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The World Bank for OFFICIAL USE ONLY Report Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No.:. 19402 IMPLEMENTATION COMPLETION REPORT Public Disclosure Authorized PAKISTAN TRANSPORT SECTOR PROJECT (Ln. 3241 - PK) June 25, 1999 Public Disclosure Authorized Infrastructure Unit South Asia Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwisebe disclosed without World Bank authorization. ii CURRENCY EQUIVALENTS Currency Unit - Pakistan Rupee (Rs) Appraisal year, 1990 US$ 1.00 Rs 21.5 (at appraisal) Original closing year, 1996 US$ 1.00 Rs 36.1 (annual average) Completionyear, 1998 US$ 1.00 Rs 45.8 (annual average) WEIGHTS AND MEASURES Metric System FISCAL YEAR OF BORROWER July I -June 30 ABBREVIATIONS AND ACRONYMS CIMP Core Investment and MaintenanceProgram FDRP = Flood Damage RestorationProject FHP = Fourth HighwayProject FHWA = Federal HighwayAdministration (USA) FIDIC = FederationIntemationale des Ingenieurs-Conseils GDP = Gross DomesticProduct GOP = Governmentof Pakistan ICB = InternationalCompetitive Bidding ICR = ImplementationCompletion Report LCB = Local CompetitiveBidding MBRP = MaintenanceBacklog Reduction Program MIL = MaintenanceIntervention Level MIS ManagementInformation System MMS = MaintenanceManagement System MOC = Ministry of Communications MOF Ministry of Finance MOR = Ministry of Railways NHA National Highway Authority NHB = National Highway Board NLC = National LogisticsCell NTRC = National TransportResearch Centre PC = Planning Commission PC-i = Planning Commission,document #1 PPIB = Private Power and InfrastructureBoard PR = Pakistan Railways PSO Public Service Obligation RECO Rail EquipmentCompany RSP Resurfacingand StrengtheningProgram SAR Staff Appraisal Report tkm = tonne-kilometre VOC = Vehicle Operating Cost Vice President Mieko Nishimizu Country Director Sadiq Ahmed Sector Director Frannie Humplick Team Leader John Tillman Task Team Leader Navaid Qureshi FOR OFFICLAL USE ONLY Table of Contents Preface.......................................................... iv Evaluation Summary.......................................................... v Introduction. v Project Objectives........................................................... v Implementation Experience and Results.............................. ............................. v Summary of Findings, Future Operations,and Key Lessons Learned........................... vii Part I Project ImplementationAssessment A - Background .......................................................... 1l B - Project Objectives ........................................................... I C - Achievement of Objectives .......................................................... 2 D - Major Factors Affecting the Project........................................................... 6 E - Project Sustainability ........................................................... 7 F - Bank Performance .......................................................... 8 G - Borrower Performance ........................................................... 9 H - Assessment of Outcome ......................... , 10 I - Future Operation ......................... 12 J - Key Lessons Learned ......................... 13 Part II Statistical Tables Table 1: Summary of Assessments......................... 14 Table 2: Related Bank Loans/Credits......................... 17 Table 3: Project Timetable......................... 18 Table 4: Loan/Credit Disbursements:Cumulative Estimated and Actual..................... 19 Table 5: Key Indicators for Project Implementation................................................... 20 Table 6: Key Indicators for Project Operation................................................... 22 Table 7: Studies Included in Project ................................................... 24 Table 8A: Project Costs................................................... 26 Table 8B: Project Financing................................................... 27 Table 9: Economic Costs and Benefits................................................... 28 Table 10: Status of Legal Covenants.................................................... 30 Table 11: Compliancewith Operational Manual Statements........................................ 33 Table 12: Bank Resources: Staff Inputs................................................... 34 Table 13: Bank Resources: Missions ................................................... 35 Annexes A. Highway mission aide-memoire B. Railway mission aide-memoire C. National Highway Authority's contribution to the ICR D. Revised Economic and Financial Evaluation of Pakistan Railway E. Map This document has a restricted distributionand may be used by recipients only in the performanceof their official duties. Its contents may not otherwisebe disclosedwithout World Bank authorization. iv IMPLEMENTATION COMPLETION REPORT PAKISTAN TRANSPORT SECTOR PROJECT (Ln. 3241- PK) PREFACE This is the ImplementationCompletion Report (ICR) for the Transport Sector Project in Pakistan, for which Loan 3241-PK in the amount of US$ 184.0 million was approved on June 28, 1990 and made effective on February 26, 1991. The project included three components:railways (US$ 105 million), highways (US$ 77.5 million) and transport sector reform (US$ 1.5 million). The initial project identification,preparation, appraisal, earliest supervision, and final drafting of the ICR were undertaken as a unified project. However most of the supervision of the loan including the fieldwork for two draft ICRs was undertaken separately for each component. The project closed on June 30, 1998, after two 12 month extensions granted beyond the original closing date of June 30, 1996. An amount of US$ 22,657,602.62had been cancelled on October 31, 1996. A further amount of US$ 11,097,674.94had been cancelled on November 16, 1998. The final disbursement transaction took place on January 12, 1999, when the special account balance was refunded and the remaining undisbursedbalance of US$ 9,171.92 was cancelled. A total of US$ 150,235,550.52 (82%) was disbursed from the Loan. The project was restructured in June 1996 and loan amounts were reallocated. The railway component was revised down to US$ 93,500,000,of which ultimately US$ 63,095,592.21 (67%) was disbursed. The highway component of the loan was increased to US$ 89,000,000,of which US$ 87,101,053.80(98%) was disbursed. Only US$ 38,904.51 (3%) of the Sector Reform Component was disbursed. The ICR was prepared by William Denning (TWUTD) from January to June, 1999, with help from Lilian MacArthur (SASIN) and Dr. Khalid Rashid (Consultant), and was reviewed by Navaid Qureshi (SASIN), John Tillman (SASIN) and peer reviewers Chris Hoban (SASIN), and Yash Pal Kedia (AIFTT1).It is based on the draft ICRs prepared for each component, discussions with Bank staff, and material from the project and correspondencefiles and consultants in the field. Material for the highway component was taken from a draft ICR prepared by Hasan Masood, Consultant, in March 1997 and April 1998. Preparation for this component of the ICR was begun during the Bank's final highway component supervision/completionmission, in June 1997. It is based on material on the project file, periodic managementreports prepared by the borrower and several technical and end-of- assignment reports prepared by the consultants who worked on this project. The Borrower contributedto preparation of the ICR by preparing its own evaluation of the project implementation (included as Annex C of the ICR), and reviewing and commenting on the draft ICR. Material for the railway component was taken from a draft ICR prepared by Jerry Pinkepank and Khalid Rashid, Consultants, in May 1997 and June 1998. The railway component draft was prepared during and after a supervision/completionmission in May, 1997. Presentation of the draft ICR to the Borrower took place March 8, 1999. The Borrower was not able to contribute to preparation of the railway component by commenting on the draft ICR. The Borrower has not prepared an evaluation report v PAKISTAN TRANSPORT SECTORPROJECT (Ln. 3241- PK) EVALUATIONSUMMARY Introduction 1. The Transport Sector Project was an evolution of previous Bank lending operations in the sector. The project funded sector and institutional reforms and priority maintenance work for the highway network and railway operation. It was not simply a traditional project loan as it focussed on both physical and institutional development objectives. There were three components to the project: highway, railway, and sector reform. Proiect Obiectives 2. The objectives of the highway component were to assist in: (a) bringing the National Highway Authority (NHA) to a size, structure and level of professional competence reflecting its responsibilities; (b) instituting a sustainable core investmentand maintenance program (CIMP) for national highways; and (c) removing a substantialportion of the backlog of maintenance,rehabilitation, and resurfacing so that a sustainable maintenance program could be established. These objectives were to be pursued through: (a) technical assistance and training for the reorganizationof NHB, (b) a Maintenance Backlog Reduction Program (MBRP), and (c) a pavement Resurfacing and Strengthening Program (RSP). 3. The objectives of the railway component were to assist Pakistan Railways (PR) in: (a) implementingrailway restructuring and establishment of a strong business department in order
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