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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: 28235 IMPLEMENTATION COMPLETION REPORT (SCL-43950) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$ 64.5 MILLION TO THE ORIENTAL REPUBLIC OF URUGUAY FOR A SECOND TRANSPORT PROJECT May 10, 2004 Public Disclosure Authorized Finance, Private Sector and Infrastructure Sector Management Unit (SMU) Argentina, Chile, Paraguay, Uruguay Country Management Unit (CMU) Latin America and the Caribbean Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective March 16, 2004) Currency Unit = Peso Uruguayo 29.6 = US$ 1 US$ 0.034 = 1 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS ANCAP National Fuel Administration, Alcohol and Portland (Administración Nacional de Combustibles Alcohol y Portland) BMS Bridge Management System CAS ountry Assistance Strategy CEPRE Executive Commission for the Reform of State CND National Corporation for Development (Corporación Nacional de Desarollo) CVU Uruguay Road Corporation (Corporación Vial de Uruguay) CREMA Contracts for Rehabilitation and Maintenance Departments Intendencias DIVD Entity responsible for Departmental Road Maintenance within DNV DNV National Directorate of Highways EEq Energy Equivalent GOU Government of Uruguay HDM Highway Design and Maintenance Standards Model IDB Inter-American Development Bank IERR Internal Economic Rate of Return Departments Intendencias IVA Value Added Tax IRI International Roughness Index ITPI Institute for Transport and Investment Planning LACI Loan Administration Change Initiative MEF Ministry of Economy and Financing MERCOSUR Regional Trade Agreement (Argentina, Brazil, Paraguay and Uruguay) MMS Maintenance Management System MTOP Ministry of Transport and Public Works NPV Net Present Value OPP Office of Planning and Budgeting (Ministry of Presidency) PAD Project Appraisal Document PCU Project Coordination Unit QAG Quality Assurance Group RUC Road User Charge Model SAM Maintenance management system SIPLA Integrated highway planning system TOR Terms of Reference UE-DNV Department within DNV in charge of structures Vice President: David de Ferranti Country Director Axel van Trotsenburg Sector Director Danny Leipziger Task Team Leader/Task Manager: Jose Luis Irigoyen URUGUAY UY TRANSPORT II CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 16 6. Sustainability 18 7. Bank and Borrower Performance 19 8. Lessons Learned 22 9. Partner Comments 26 10. Additional Information 40 Annex 1. Key Performance Indicators/Log Frame Matrix 41 Annex 2. Project Costs and Financing 45 Annex 3. Economic Costs and Benefits 47 Annex 4. Bank Inputs 55 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 57 Annex 6. Ratings of Bank and Borrower Performance 58 Annex 7. List of Supporting Documents 59 Project ID: P049267 Project Name: UY TRANSPORT II Team Leader: Jose Luis Irigoyen TL Unit: LCSFT ICR Type: Core ICR Report Date: May 10, 2004 1. Project Data Name: UY TRANSPORT II L/C/TF Number: SCL-43950 Country/Department: URUGUAY Region: Latin America and the Caribbean Region Sector/subsector: Roads and highways (94%); Central government administration (6%) Theme: Regional integration (P); Infrastructure services for private sector development (P); Other urban development (S); Other financial and private sector development (S); Technology diffusion (S) KEY DATES Original Revised/Actual PCD: 03/18/1998 Effective: 09/30/1998 11/05/1998 Appraisal: 08/26/1998 MTR: 12/01/2000 11/22/2000 Approval: 09/17/1998 Closing: 09/30/2002 09/30/2003 Borrower/Implementing Agency: REPUBLIC OF URUGUAY/MTOP; REPUBLIC OF URUGUAY/DNV and Intendencias Other Partners: STAFF Current At Appraisal Vice President: David de Ferranti Shahid Javed Burki Country Director: Axel van Trotsenburg Myna Alexander Sector Manager: Jose Luis Irigoyen Krishna Challa (Acting) Team Leader at ICR: Jose Luis Irigoyen Jose Luis Irigoyen ICR Primary Author: Jose Luis Irigoyen; Rodrigo Archondo-Callao; Elisabeth Goller 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: Overall purpose. The overall purpose of the project was to increase efficiency in the provision of transport services and the maintenance of road infrastructure to enhance the competitiveness of Uruguay's products, especially within Mercosur, and to rationalize sector expenditures. Project specific objectives. The project specific objectives were to: (a) rehabilitate and upgrade to Mercosur standards selected national roads and bridges to permit transit of larger and heavier vehicles and reduce transport costs between Uruguay and its Mercosur trading partners; (b) support the Ministry of Transport and Public Works' (MTOP) policy of increasing private sector participation in the maintenance and rehabilitation of national roads through performance-based contracts; and (c) strengthen road sector management through the carrying out of (i) the National Directorate of Highways's (DNV) renewal program, (ii) the transfer of technology to the Departments (Intendencias) to maintain gravel roads, and (iii) a road safety program. These objectives reflected essential priorities for the transport sector in Uruguay and were consistent with the government strategy for regional integration and trade, road network conservation, strengthening of road sector management, private sector involvement in road management and more efficiency in road financing/road user charges. They also reflected the priorities identified in the Bank's Country Assistance Strategy (CAS), which called for (i) a support of investments in key sectors to enhance the competitiveness of Uruguay's economy in the context of Mercosur, (ii) the increase of private sector participation, and (iii) the acceleration of the rationalization of public expenditure needed to sustain macroeconomic stability. Of particular importance in these circumstances, the objectives were realistic in terms of demonstrated capacity of the implementing agencies, financial, political and institutional constraints at the moment of the project approval and the related project risks. 3.2 Revised Objective: No revision of the project objectives took place. 3.3 Original Components: Component 1: Road Rehabilitation and Bridge Reconditioning (Cost: US$20,594,000) This component entailed carrying out of: (a) about 146 km of rehabilitation works consisting of reinforcing the pavement structures of (i) about 96 km of the Palmitas-Mercedes section on national Route 2; (ii) about 30 km between km 192 and the town of Masoller on national Route 30; and (iii) about 20 km between Km 36.4 and km 56.4 on national Route 27; and (b) reconditioning works consisting of strengthening, widening or replacing the existing structures of 13 bridges located on national Routes 3, 8 and 26. Component 2: CREMA Contracts (Cost: US$ 23,360,000) This component envisaged the implementation of rehabilitation and maintenance works of three road networks covering an estimated 635 km of national roads through multiyear performance-based CREMA contracts between DNV and private contractors. The networks under each contract comprised different pavement types and service conditions. The contracts to be financed under the project covered three networks located in DNV's maintenance districts II and X (about 240 km), II and III (about 242 km), and VII (about 153 km). - 2 - Component 3: DNV's Road Maintenance Program (Cost: US$ 45,106,000) This component consisted of the road maintenance program for the years 1998 - 2000 directly funded by DNV and included: (i) a program of contract maintenance with micro-enterprises comprised of former DNV staff and private contractors for about 1,855 km, and (ii) maintenance works on the portion of the national road network, which is not maintained by private contractors (incremental operational costs of force account works, excluding salaries, administration, and DNV’s equipment). Component 4: Departmental Road Maintenance (Cost: US$ 33,000,000) This component included annual routine maintenance programs for about 9,500 km of selected gravel roads in participating departments and annual periodic maintenance programs for about 1,500 km of gravel roads to be carried out by participating departments between 1998 and 2000. Component 5: Road Sector Management / Institutional Building (Cost: US$ 3,000,000) This component included the (i) provision of technical assistance to DNV to monitor and supervise project implementation; (ii) preparation of MTOP’s transport infrastructure plan for the years 2000-2004; (iii) strengthening of the Institute of Transport and Infrastructure Planning's (IPTI) technical capacity to carry out road sector fiscal policy analyses; (iv) carrying out of DNV’s renewal program to strengthen its institutional, operational and financial capacity; and (v) carrying out of a program to transfer technology and strengthen the road maintenance management practices of the Intendencias
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