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World Bank Document ROAD SECTOR DEVELOPMENT PROJECT (IDA Credit Nos. 4832-NP, 5002-NP and IDA Grant Nos. H-339-NP, H-629-NP) Implementation Review and Support Mission: July 29-August 06, 2015 AIDE-MEMOIRE Public Disclosure Authorized I. Introduction and Acknowledgment 1. A World Bank review team1 (see Annex 1a provides the team members’ list) carried out an implementation review from July 29 - August 06, 2015 on the Road Sector Development Project (RSDP). The review had following objectives: (i) review and assess the project status and identify the key implementation issues; (ii) identify and agree with the Government of Nepal (GON) on the future course of actions that will be necessary for achieving satisfactory results as envisaged in this project; and (iii) identify actions for the planning and preparation of the potential Additional Financing (AF). The Team visited RSDP roadwork sites in order to summarily assess the roadwork quality and contract implementation progress status. 2. The Team would like to thank GON for the hospitality extended to it, especially by counterpart agencies and officials (Annex 1b provides the list of persons met). This Aide-Memoire (AM) summarizes main review findings, agreements reached, and recommendations made. It also reflects Public Disclosure Authorized discussions held in a wrap-up meeting chaired by Mr. Devendra Karki, Officiating Secretary, Ministry of Physical Infrastructure and Transport (MoPIT) on August 13, 2015. As per the Bank's Access to Information policy and the wrap-up meeting decision, this Aide-Memoire will be classified as a public document. II. Key Project Data 3. The following table provides the summary project data and the summary performance ratings: Project Data Project Performance Ratings Board Approval (original) December 6, 2007 Summary Ratings Last Now Trend Board Approval (AF) June 2, 2011 Review Effectiveness Date (original) February 21, 2008 Achievement of PDO MS MS ◄► Effectiveness Date (AF) July 8, 2011 Implementation Progress MS MS ▲ Closing Date (original) December 31, 2013 Project Management MS S ▲ Public Disclosure Authorized Closing Date (AF) June 30, 2016 Procurement MS MS ▲ Credit/Grant Amount SDR 76.1 million2 Financial Management MS MS ◄► Amount Disbursed (as of July SDR 63.94 million Safeguards MS MS ▲ 31, 2015) ($98.01 million; M&E MS MS ▲ approx.89%) Counterpart Funding S S ▲ Notes: AF-Additional Financing; S-Satisfactory; MS-Moderately Satisfactory; MU –Moderately Unsatisfactory; U-Unsatisfactory; ▲Improving Trends; ▼ Deteriorating Trends; ◄► Static. III. Achievement of Project Development Objective Status 4. RSDP is most likely to achieve its objectives and notable progress has been made towards the achievement of the Project Development Objective (PDO). Impact studies have made good progress. A draft report encompassing the five roads is currently being revised and finalized. The studies would primarily assess one of the outcome indicators: Reduction in travel time. An interim analysis, that used the Geographic Information Systems (GIS), has already assessed another outcome Public Disclosure Authorized indicator - increase in population to all-season roads. The final figures would be confirmed once the end-project status of road undertaken for upgrading is known. Department of Roads (DOR) will assess the third outcome indicator-condition of strategic network roads-as part of its normal network monitoring activities. As reported earlier a road condition survey carried out in November, 2012 1Hereinafter referred as “The Team” 2 Excludes an amount of SDR 4.5m (US$ 6.75m) cancelled in January, 2015 through a restructuring process. showed that 11.27% of black-topped SRN roads were in poor condition (i.e. the end-project target is 15% has been achieved). The next report is due in mid-September 2015. IV. Current Implementation Status Road Development Component 5. Although RSDP has achieved the periodic maintenance target, five contracts under this component remain incomplete. The project management has been proactive in accelerating the pace of implementation of these contracts. Due to their proactive actions RSDP could manage to make substantial progress in this component including the completion of a number of contracts which previously looked vulnerable. The Team has requested the project to pay particular attention to two incomplete contracts of Surkhet-Jumla Road corridor so that they can be completed speedily. Upgrading Works Sub-Component 6. All upgrading contracts but one (out of total 46 contracts) are now complete and all eight targeted district headquarters of Mid and Far-Western regions3 are now connected to all- weather roads. The incomplete contract is contract no. 6A (physical progress 87%) of the Surkhet- Jumla Road corridor. DOR has already imposed liquidated damages to this contract. RSDP now sets October, 2015 as the target date for completion of the contracts. It is to be noted that approximately 6 km section of the corridor could not be completed fully due to problems linked to the slope instability and bridge approaches. 7. The upgrading works with Otta-seal surfacing in Khidkijyula-Jumla Section of Surkhet- Jumla Road are at their last stage, albeit some issues remain. They are: slope stabilization, water management and pavement related works on portions that encountered slope instability. The Team recommends that DOR takes up a geo-technical study, which will recommend appropriate slope stabilization related mitigation measures. These measures, along with the incomplete sections of the road could be undertaken under the project’s potential additional financing. Considering the urgency, the Team recommends DOR hires a consultancy firm on a single source basis, provided the proposal is not in variance with conditions laid down in the Financing Agreement with International Development Association (IDA). 8. One monsoon damaged road contract (contact no. TSD-8B) of the Surkhet-Jumla Road corridor (out of two) remains incomplete (physical progress 80%). This contract is expected to be completed by September, 2015. Also three 2013 flood damaged small-value contracts of the Khodpe- Chainpur (KC) and Gokuleshwor-Darchula Road (GD) are on-going. Their progress ranges from 56% to 82%. The original contract completion dates have already passed. DOR has set a new target dates for the completion of these contracts. They are: MD-1: October, 2015; MD-2: December, 2015; MD- 3: October, 2015. The Team has requested RSDP to be vigilant. The following table summarizes the progress status of the project financed contracts (see Annex 3 for details). Progress Completed 80-95% 65-80% 50-65% <50% 46 2 2 1 0 No. of contracts 9. RSDP has so far upgraded over 97% (680 km) of the 700 km target length to an all-season road. The completed length includes 644 km with Otta-seal surface (original financing: 295km, AF: 349km) and 36km double-bituminous surface treatment surface under AF. 10. DOR requires to closely monitor all six incomplete contracts, especially three contracts in KMJ corridor. All these contracts are beyond their original contract completion time and some of them have missed milestones. The Team has advised RSDP to closely monitor the incomplete contracts so that they are completed within the target dates. The Team advises RSDP to take further actions against these non-performing contractors in case they fail to make progress against targets set by the project. 3Baitadi, Dailekh, Darchula, Chainpur of Bajhang district, Jajarkot and Musikot of Rukum District 2 11. Supervision consultants will continue with a reduced size. The consultants agreed to extend the contracts (up to September, 2015) as per DOR’s request. The original contract end-date was June 30, 2015. Only two local Resident Engineers (one for KC & GD roads and another for Surkhet-Jumla Road) will be retained. The Team has advised DOR to negotiate the time extension and retention of the consultants’ personnel in such a way that the project does not suffer in terms of progress monitoring and quality of roadworks. 12. The Team has identified a number of issues during field visits that need attention. Annex 11 provides details. The issues are: (i) delays in executing bio-engineering works; (ii) delays in the finalization of contract variations; (iii) non-availability of codes in field laboratories and inappropriate setting up of mini-laboratories; (iv) poor quality of cement masonry and gabion works; and (v) use of over-sized gravel sub-base and crusher-run materials (CRM) in roadworks. Periodic Maintenance Works Sub-Component 13. The Periodic Maintenance (PM) target of periodic maintenance of 2,550km of black- topped strategic roads has already been achieved. As of mid-July, 2015 the total length completed under PM works was 2,610km [451km under original financing; 1,740km under AF; 418km under GON/Roads Board Nepal (RBN) financing]. Annex 3 provides details of the PM works. It is to be noted that the total figure includes 49km completed roads of cancelled or terminated contracts. No of contracts No of contracts Length completed out of (Contracted (Completed the cancelled /terminated Length in km) Length in km) contracts RSDP Original Financing 16 (451.5) 16 (451.5) 0.0 FYPM (FY 2011/12) 26 (718.6) 24 (657.0) 12.0 SYPM (FY 2012/13) 27 (647.0) 26 (620.3) 6.8 TYPM (FY 2013/14) 22 (522.1) 22 (462.4) 20.0 Total under RSDPAF 75 (1,887.7) 72 (1,739.8) 38.8 Total under RSDP 91 (2,339.2) 88 (2,191.3) 38.8 GON/RBN Financing (FY 2014/015 32 (450.4) 29 (418.6) 10.0 TOTAL (RSDP+GON) 123 (2,789.6) 117 (2,609.9) 48.8 Notes: First Year Periodic Maintenance (FYPM); Second Year Periodic Maintenance (SYPM); Third Year Periodic Maintenance (TYPM) Road Safety Works 14. All RSDP road safety contracts are now complete and good progress has been made in road safety works linked to the Global Road Safety Facility (GRSF) assisted Road Safety Support Project (RSSP).
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