Document of The World Bank
Public Disclosure Authorized Report No: ICR00002771
IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39300 IDA-45710)
ON AN
IDA CREDIT (IDA-39300) IN THE AMOUNT OF SDR 138.44 MILLION
Public Disclosure Authorized (US$207 MILLION EQUIVALENT)
AND
IDA CREDIT (IDA-45710) IN THE AMOUNT OF SDR 172.00 MILLION (US$253 MILLION EQUIVALENT)
Public Disclosure Authorized TO THE REPUBLIC OF KENYA
FOR THE
NORTHERN CORRIDOR TRANSPORT IMPROVEMENT PROJECT
June 29, 2016
Public Disclosure Authorized
Transport and ICT Global Practice Africa Region
CURRENCY EQUIVALENTS Currency Unit = Kenya Shilling (KSh) (Exchange Rate Effective)
(February 29, 2004) (December 31, 2015) US$1.00 = KSh 77.0 US$1.00 = KSh 102.4 SDR 1.00 = US$1.4952 SDR 1.00 = US$ 1.3857
FISCAL YEAR July 1– June 30
ABBREVIATIONS AND ACRONYMS AF Additional Financing AFD French Development Agency (Agence Française de Développement) AfDB African Development Bank APRP Annual Public Road Programme CAS Country Assistance Strategy CAT1 Category 1 DCA Development Credit Agreement EASA East African School of Aviation EBK Engineering Board of Kenya EIB European Investment Bank EIRR Economic Internal Rate of Return ERB Engineers’ Registration Board ERSWE Economic Recovery Strategy for Wealth and Employment Creation EU European Union FAA United States Federal Aviation Administration FM Financial Management GNSS Global Navigation Satellite System GoK Government of Kenya GPS Global Positioning System IA Implementing Agency IASA International Aviation Safety Assessment ICAO International Civil Aviation Organization ICR Implementation Completion and Results Report ICT Information and Communications Technologies IDA International Development Association INT Department of Institutional Integrity IRI International Roughness Index ISR Implementation Status and Results Report JICA Japan International Cooperation Agency JKIA Jomo Kenyatta International Airport KAA Kenya Airports Authority KCAA Kenya Civil Aviation Authority KeNHA Kenya National Highways Authority KeRRA Kenya Rural Roads Authority KMA Kenya Maritime Authority
KRA Kenya Revenue Authority KRB Kenya Roads Board KTSSP Kenya Transport Sector Support Project KURA Kenya Urban Roads Authority M&E Monitoring and Evaluation MoF Ministry of Finance MoTC Ministry of Transport and Communications MoTI Ministry of Transport and Infrastructure MoRPWH Ministry of Road, Public Works and Housing MTR Mid-Term Review NCA National Construction Authority NCTIP Northern Corridor Transport Improvement Project NCTTA Northern Corridor Transit and Transport Agreement NCTTCA Northern Corridor Transit and Transport Coordination Authority NDF Nordic Development Fund NGO Non-Governmental Organization NMT Non-Motorized Transport NPV Net Present Value NTSA National Transport and Safety Authority NUTRIP National Urban Transport Improvement Project OPRC Output- and Performance-based Road Contract PAD Project Appraisal Document PDO Project Development Objective POC Project Oversight Committee PPP Public-Private Partnership PTT Project Technical Team RAP Resettlement Action Plan RCCI Roadworks Construction Cost Index RSGIAP Road Sector Governance and Integrity Action Plan RSIP Road Sector Investment Program TOR Terms of Reference TSA Transport Security Administration of the United States TTL Task Team Leader UNES University of Nairobi Enterprises and Services Limited VAT Value Added Tax VCT Voluntary Consulting and Testing VPD Vehicles per Day
Senior Global Practice Director: Pierre Guislain Acting Practice Manager: Aurelio Menendez Project Team Leader: Josphat O. Sasia ICR Team Leader: Akiko Kishiue
Kenya Northern Corridor Transport Improvement Project
CONTENTS
Data Sheet A. Basic Information ...... i B. Key Dates ...... i C. Ratings Summary ...... i D. Sector and Theme Codes ...... ii E. Bank Staff ...... ii F. Results Framework Analysis ...... iii G. Ratings of Project Performance in ISRs ...... viii H. Restructuring ...... ix I. Disbursement Graph ...... x
1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 6 3. Assessment of Outcomes ...... 14 4. Assessment of Risk to Development Outcome ...... 21 5. Assessment of Bank and Borrower Performance ...... 22 6. Lessons Learned ...... 24 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 26 Annex 1. Project Costs and Financing ...... 27 Annex 2. Outputs by Component ...... 28 Annex 3. Economic and Financial Analysis ...... 46 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 52 Annex 5. Beneficiary Survey Results ...... 54 Annex 6. Stakeholder Workshop Report and Results ...... 55 Annex 7. Summary of Borrower’s ICR and Comments on Draft ICR ...... 56 Annex 8. Comments of Co-Financiers and Other Partners/Stakeholders ...... 68 Annex 9. List of Supporting Documents ...... 69 Annex 10. Road Sector Governance and Integrity Improvement Action Plan………..71 MAP ...... 77
DATA Sheet A. Basic Information
Northern Corridor Country: Kenya Project Name: Transport Improvement Project Project ID: P082615 L/C/TF Number(s): IDA-39300,IDA-45710 ICR Date: 06/27/2016 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: SIL Borrower: KENYA Original Total XDR 138.44M Disbursed Amount: XDR 310.21M Commitment: Revised Amount: XDR 310.44M Environmental Category: B Implementing Agencies: Kenya Civil Aviation Authority Kenya Airports Authority Ministry of Transport and Infrastructure1 Kenya National Highways Authority Cofinanciers and Other External Partners: Nordic Development Fund Agence Francaise pour le Developpement (AFD)
B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 06/30/2003 Effectiveness: 09/16/2004 09/16/2004 12/14/2005 Appraisal: 02/09/2004 Restructuring(s): 04/02/2009 12/27/2012 Approval: 06/17/2004 Mid-term Review: 05/04/2009 Closing: 12/31/2009 12/31/2015
C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory
1 Ministry of Roads, Public Works and Housing and Ministry of Transport and Communications merged and became Ministry of Transport and Infrastructure. MOTI has State Department of Transport and State Department of Infrastructure.
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C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance:
C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Moderately
Closing/Inactive status: Satisfactory
D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Aviation 15 9 Central government administration 10 7 Health 1 1 Other social services 2 2 Rural and Inter-Urban Roads and Highways 72 81
Theme Code (as % of total Bank financing) Administrative and civil service reform 13 13 Infrastructure services for private sector development 25 25 Regional integration 13 13 Regulation and competition policy 24 24 Trade facilitation and market access 25 25
E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Callisto E. Madavo Country Director: Diarietou Gaye Makhtar Diop Practice Aurelio Menendez C. Sanjivi Rajasingham Manager/Manager: Project Team Leader: Josphat O. Sasia Anil S. Bhandari ICR Team Leader: Akiko Kishiue
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ICR Primary Author: Akiko Kishiue Damon C. Luciano/ Rosemary Team Assistant Rosemary Ngesa Otieno Ngesa Otieno
F. Results Framework Analysis
Project Development Objectives (from Project Appraisal Document) The Development Credit Agreement (DCA) stated the project development objectives (PDO) as follows: The objective of the Project is to enhance the efficiency and effectiveness of the Borrower's transport sector through: (a) increasing the efficiency of road transport; (b) enhancing aviation safety and security to meet international standards; and (c) promoting private sector participation in the management, financing, and maintenance of road assets. The Project Appraisal Document (PAD) worded the PDO slightly different but no significant discrepancy. For the purposes of the Implementation Completion and Results Report (ICR), in line with the guidance,2 the PDOs stated in the DCA will be used.
Revised Project Development Objectives (as approved by original approving authority) In April 2009, the original PDOs were revised by the addition of one more PDO to support the implementation of the post-election recovery program. The revised PDOs in the Financing Agreement which was amending and restating the original DCA were to enhance the efficiency and effectiveness of the Recipient's transport sector through: (a) increasing the efficiency of road transport; (b) enhancing aviation safety and security to meet international standards; (c) promoting private sector participation in the management, financing, and maintenance of road assets; and (d) restoring vital public infrastructure and assets damaged as a result of the 2007 post-election crisis. The PDOs in the Additional Financing (AF) Project Paper are worded slightly different without any significant discrepancy.
(a) PDO Indicator(s)
Original Target Actual Value Values (from Formally Revised Achieved at Indicator Baseline Value approval Target Values Completion or Target documents) Years Freight and passenger travel time by road from Mombasa to Malaba and Busia Indicator 1 : reduced by 25 percent. Value Truck - 24 hours Truck - 18 hours Truck - 18 hours Truck - 21 hours (50%) quantitative or Bus - 18 hours Bus - 13.5 hours Bus - 13.5 hours Bus - 15.5 hours (63%) Qualitative) Car - 14.5 hours Car - 11 hours Car - 11 hours Car - 12 hours (71%) Date achieved 04/30/2004 12/31/2009 12/31/2015 12/31/2015 Indicator partially achieved (average 61%). A significant reduction in travel time Comments was achieved by 2013 but gains on some road sections later diminished due to (incl. % growing traffic volumes. Car travel time met the target in 2009 but later rebounded. achievement)
2 p16 Guideline for reviewing World Bank Implementation Completion and Results Reports, updated on August 1, 2014, IEG, p 58 Implementation Completion Report Guidelines, OPCS, Aug 2006, last updated July 22, 2014
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KCAA is cleared as category 1 (CAT1) safety status under the International Indicator 2 : Aviation Safety Assessment (IASA) of the United States Federal Aviation Administration (FAA). Value FAA/IASA FAA/IASA CAT1 quantitative or None CAT1 Clearance Clearance Clearance not obtained Qualitative) obtained obtained Date achieved 04/30/2004 12/31/2007 12/31/2014 12/31/2015 Comments Indicator not achieved (0%). Change in the regional security situation required (incl. % additional security measures. An ICAO security audit in 2015 scored KCAA and achievement) KAA at 88% against a cutoff of 80% for CAT1 clearance. Jomo Kenyatta International Airport (JKIA) in Nairobi is cleared by the TSA for Indicator 3 : direct flights to/from U.S. airports. Value Direct flight quantitative or None 100% Direct flight cleared. cleared. Qualitative) Date achieved 04/30/2004 12/31/2007 12/31/2014 12/31/2015 Comments Indicator achieved (100%). Clearance of direct flight to/from U.S. airports by the (incl. % TSA was obtained in April 2009. achievement) One long-term performance-based road management and maintenance contract Indicator 4 : awarded to the private sector and effectively under implementation. Value quantitative or None 100% 100% 39 long-term contracts Qualitative) Date achieved 04/30/2004 12/31/2011 12/31/2014 12/31/2015 Comments Indicator achieved (100%). The concept and approach of OPRCs were well (incl. % adopted by KeNHA and KeNHA's capacity has been increased. In FY 2015/16, 39 achievement) OPRCs have been awarded and are under implementation. Indicator 5 : Bids for concessioning of one section of road invited. Value quantitative or None 100% 100% 100% Qualitative) Date achieved 04/30/2004 06/30/2007 12/31/2012 12/31/2015 Comments Indicator achieved (100%). Bids were invited for a proposed toll road and one bid (incl. % was received in 2005.Parliament approved the concession but it was cancelled after achievement) a due diligence review raised integrity concerns about the procurement process. Indicator 6 : Damaged public infrastructure assets are restored. Value quantitative or Restoration pending. 100% 100% 100% Qualitative) Date achieved 03/05/2009 12/31/2010 12/31/2013 12/31/2015 Indicator achieved (100%) achieved. Renovation and reconstruction of the KeNHA Comments regional offices in Kisumu, Homa Bay, and Oygis towns have been completed. The (incl. % repair of the Kisian-Busia road was also carried out with the GoK internal achievement) resources.
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(b) Intermediate Outcome Indicator(s)
Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Values documents) Target Years Average roughness less than IRI 3.0 m/km on completed sections of the project Indicator 1 : roads. 100% of project 100% of project roads Value roads have Less than 20% of have average (quantitative average 100% of project roads project road length. roughness of less than or Qualitative) roughness of IRI 3.0. less than IRI 3.0. Date achieved 04/30/2004 12/31/2009 12/31/2015 12/31/2015 Comments Indicator achieved (100%). Average IRI of project roads is 2.2. Nyamasaria- (incl. % Kisumu airport-Kisian road has been handed over in the end of March 2016 and achievement) data is not available yet. Indicator 2 : Public Buildings restored and functional. Value (quantitative 0 3 3 4 or Qualitative) Date achieved 03/05/2009 12/31/2010 12/31/2013 12/31/2015 Comments Indicator achieved (133%). The renovation and reconstruction of KeNHA regional (incl. % offices in Kisumu (two offices), Homa Bay, and Oyugis towns have been achievement) completed and the buildings are in use. Indicator 3 : Term contracts awarded for disaster response readiness. Value (quantitative 0 3 3 0 or Qualitative) Date achieved 03/05/2009 12/31/2010 12/31/2013 12/31/2015 Indicator not achieved (0%). The Road Disaster Management and Response Unit Comments has been established and functions as a committee composed of representatives (incl. % from road authorities. A term contract was never advertised due to limited financial achievement) resources of MoTI. At least three roadside stations and amenities constructed and functional as per Indicator 4 : designs and serving road users and local communities. 5 schools, 1 lorry park, 1 market, 1 Value community center, 1 1 (quantitative None 3 3 footbridge and 24.8 or Qualitative) km of footpaths were constructed. Date achieved 04/30/2004 06/30/2009 12/31/2014 12/31/2015 Indicator achieved (more than 300%). A lorry park, a community center, a market, and five schools were constructed. Footpaths and a footbridge as NMT facilities Comments have been constructed in the urban centers. A lorry park and a market are under (incl. % construction. achievement)
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At least 70% of road users and local persons surveyed become aware or make use Indicator 5 : of the Voluntary Counseling and Testing (VCT) and other facilities for HIV/AIDS campaign along the Northern Corridor. Value (quantitative None 70% 70% 100% or Qualitative) Date achieved 04/30/2004 12/31/2009 12/31/2015 12/31/2015 Comments Indicator achieved (100%). By 2012, the level of HIV/AIDS awareness among the (incl. % corridor users and communities living along the corridors surveyed and use of VCT achievement) and other facilities to mitigate the spread of the disease reached 100%. Indicator 6 : Legislation enacted for private sector participation in roads. Value (quantitative None Yes Yes Yes or Qualitative) Date achieved 04/30/2004 12/31/2012 12/31/2012 12/31/2015 Indicator achieved (100%). Kenya Roads Act 2007 was enacted, stating the Comments encouragement of private sector participation in road construction, maintenance, (incl. % and management. The PPP Act was enacted in 2013 and a toll road is one of the achievement) prioritized projects. Indicator 7 : At least 10% reduction in road related fatalities per annum. Value (quantitative 3,000 2,700 2,700 3,057 or Qualitative) Date achieved 04/30/2004 12/31/2009 12/31/2014 12/31/2015 Comments Indicator not achieved (0%). The total number of road related fatalities was not (incl. % reduced. However, fatalities per 100,000people have been reduced by 23 % from achievement) 8.31 in 2008 to 6.4 in 2015. Kenya National Highways Authority established and functional as evidenced by Indicator 8 : annual reports. Value (quantitative None 100% 100% 100% or Qualitative) Date achieved 04/30/2004 12/31/2009 12/31/2014 12/31/2015 Comments Indicator achieved (100%). Through the enactment of Roads Act in 2007, Kenya (incl. % National Highways Authority, Kenya Urban Road Authority, and Kenya Rural achievement) Road Authority have been established and all are functional. Indicator 9 : All feasibility and design studies carried out satisfactorily. Value (quantitative None 100% 100% 100% or Qualitative) Date achieved 04/30/2004 12/31/2009 12/31/2014 12/31/2015 Indicator achieved (100%). All the selected feasibility and design studies have been Comments completed: (a) three sections on the Kenya-South Sudan road, (b) Kibwezi-Kitui- (incl. % Mwingi-Maua, (c) Narok-Northern Lakeside Tanzania, and (d) Mombasa Southern achievement) Bypass. Timely public disclosure of national program and business opportunities in the road Indicator 10 : sector. Value Partial and late (quantitative release of road Plans disclosed Plans disclosed Plans disclosed or Qualitative) investment program
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Date achieved 03/05/2009 12/31/2010 12/31/2013 12/31/2015 Indicator achieved (100%). Road Sector Investment Program (RSIP) and Annual Comments Public Road Programmes (APRPs) are disclosed on Kenya Roads Board (KRB) (incl. % website. (http://www.krb.go.ke/adverts-downloads) All road works were procured achievement) under open tender. The National Construction Authority (NCA) established and functional as Indicator 11 : evidenced by annual reports. Value NCA established and (quantitative None NCA established NCA established functional or Qualitative) Date achieved 03/05/2009 12/31/2011 12/31/2014 12/31/2015 Indicator achieved (100%). NCA was established in 2011 through the National Comments Construction Authority Act. NCA is executing all functions outlined under the Act. (incl. % Annual report 2013/14 has been disclosed and the 2014/15 report will be published achievement) in June 2016. Road Sector Governance and Integrity Action Plan (RSGIAP) implemented Indicator 12 : satisfactorily. Value (quantitative None 100% 100% Mostly achieved or Qualitative) Date achieved 03/05/2009 12/31/2012 12/31/2015 12/31/2015 Comments Indicator mostly achieved (cannot be measured in %). The RSGIAP was targeting (incl. % the entire transport sector, and some of the proposed actions were beyond the achievement) project scope. Implementation status of the RSGIAP is presented in Annex 10. Indicator 13 : User perception and satisfaction improved in the road sector Value >75% of users >75% of users (quantitative None surveyed are n/a surveyed are satisfied or Qualitative) satisfied Date achieved 03/05/2009 12/31/2011 12/31/2014 12/31/2015 Indicator not achieved (0%) A study to measure this indicator was planned with Comments funding from the Governance and Anti-Corruption unit of the Bank. However, the (incl. % fund was not allocated and the study was not conducted. No existing information achievement) was available. Indicator 14 : JKIA meets the ICAO and TSA CAT1 security requirements. Value (quantitative Not meet 100% 100% 100% or Qualitative) Date achieved 04/30/2004 12/31/2007 12/31/2014 12/31/2015 Indicator achieved (100%). JKIA obtained TSA clearance in 2009. Although JKIA Comments has not obtained the CAT1 status, the ICAO security audit in 2015 scored KCAA, (incl. % and KAA at a rate of 88 percent, against a cutoff of 80 percent for CAT1 achievement) certification. Indicator 15 : No. of Passengers handled at JKIA (million). Value (quantitative 4.7 6.4 6.4 6.4 or Qualitative) Date achieved 12/31/2007 12/31/2012 12/31/2015 12/31/2014 Comments Indicator achieved (100%). Based on KAA statistics, the number of passenger (incl. % handled at JKIA in 2014 was 6.4million. The information for 2015 was not achievement) available yet.
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Indicator 16 : Cargo handled at KJIA (tons). Value (quantitative 278,000 383,000 383,000 260,000 or Qualitative) Date achieved 12/31/2007 12/31/2012 12/31/2015 12/31/2014 Comments Indicator not achieved (-6.5%). According to the statistics from the KAA, cargo (incl. % handled at JKIA had a peak of 290,000 ton in 2011 and decreased since 2012 due to achievement) external factors.3. The information for 2015 was not available yet. Indicator 17 : KCAA meets ICAO and US FAA Category 1 safety requirements. Value (quantitative None 100% 100% 100% or Qualitative) Date achieved 04/30/2004 12/31/2007 12/31/2013 12/31/2015 Comments Indicator achieved (100%). Following the revenue gains, KCAA increased the (incl. % number of airworthiness and flight operations inspectors from 3 to 18 and 1 to 16, achievement) respectively. KCAA expected to obtain IASA category 1 in the next audit in 2016. The International Maritime Organization (IMO) and the Northern Corridor Transit Indicator 18 : and Transport Agreement (NCTTA) certify compliance with respective treaties. Value (quantitative None 100% 100% 100% or Qualitative) Date achieved 04/30/2004 12/31/2007 12/31/2013 12/31/2015 Indicator achieved (100%). Kenya is listed as a white list country for Comments implementation of the International Convention on Standards of Training, (incl. % Certification, and Watch keeping for Seafarers of 1995. Kenya is in compliance achievement) with the NCTTA provisions. Indicator 19 : Bridges repaired and functional. Value (quantitative 0 3 DROPPED n.a. or Qualitative) Date achieved 04/02/2009 12/31/2010 12/27/2012 Comments (incl. % Indicator was dropped in the 2012 restructuring. achievement)
G. Ratings of Project Performance in ISRs
Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 11/11/2004 Satisfactory Satisfactory 6.50 2 12/16/2004 Satisfactory Satisfactory 6.50 3 05/17/2005 Satisfactory Satisfactory 6.51 4 12/02/2005 Satisfactory Satisfactory 6.70 5 06/22/2006 Satisfactory Satisfactory 7.11 6 12/29/2006 Moderately Satisfactory Moderately Satisfactory 8.00
3 http://www.businessdailyafrica.com/Dimethoatel-ban-hits-vegetable-exports-to-the-EU-market--/-/539546/1694416/- /tf5vd1z/-/index.html. External factors such as the strengthening of European Union regulations on prohibiting fresh products with excess level of pesticide (Dimethoate) are considered the main reasons.
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7 06/27/2007 Satisfactory Satisfactory 26.25 8 12/18/2007 Satisfactory Satisfactory 41.52 9 06/26/2008 Moderately Satisfactory Moderately Satisfactory 64.10 10 12/23/2008 Satisfactory Satisfactory 93.59 11 06/22/2009 Satisfactory Satisfactory 111.87 12 12/29/2009 Satisfactory Satisfactory 141.66 13 06/28/2010 Satisfactory Satisfactory 163.98 14 03/07/2011 Satisfactory Satisfactory 169.09 15 07/27/2011 Satisfactory Satisfactory 199.12 16 03/11/2012 Satisfactory Moderately Satisfactory 219.32 17 10/29/2012 Satisfactory Moderately Satisfactory 243.25 18 05/15/2013 Satisfactory Moderately Unsatisfactory 277.08 19 11/29/2013 Satisfactory Moderately Unsatisfactory 314.30 20 05/04/2014 Satisfactory Moderately Satisfactory 375.18 21 09/07/2014 Satisfactory Moderately Satisfactory 408.12 22 04/17/2015 Satisfactory Moderately Satisfactory 447.12 23 11/19/2015 Moderately Satisfactory Moderately Unsatisfactory 468.57
H. Restructuring (if any)
ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions Restructured to change the expenditures to be financed by IDA under Roads Components from 75 percent to 67 percent and restructured project 12/14/2005 N S S 6.72 component, support to KAA: Cancelled the renovation of Old Embakasi Airport (Nairobi) instead expanded the JKIA, by building fourth terminal. Additional Financing (AF) to meet a financing gap to complete the original activities and to implement a new component for the rehabilitation and replacement of infrastructure and 04/02/2009 Y S S 103.19 public assets damaged as a result of post-election violence. The closing date was also extended by three years from December 31, 2009 to December 31, 2012. Level II restructuring as an 12/27/2012 N S MS 246.27 exceptional extension of the project closing date by 36
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ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions months to complete the on-going activities that were delayed because of factors external to the operation and outside of the control of the borrower. The closing date was also revised to December 31, 2015. Note: MU = Moderately Unsatisfactory; S = Satisfactory.
If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Satisfactory Against Formally Revised PDO/Targets Satisfactory Overall (weighted) rating Satisfactory
I. Disbursement Profile
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1 Project Context, Development Objectives and Design 1.1 Context at Appraisal
1. When the Northern Corridor Transport Improvement Project (NCTIP) was under preparation, the new government of Kenya (GoK), which was installed in December 2002, launched its Economic Recovery Strategy for Wealth and Employment Creation (ERSWE) for the period 2003–07 to respond to weakening economic growth, low productivity, and high unemployment. The GoK’s main objectives in the transport sector were to encourage the private sector to lead economic growth through reducing the cost of doing business in Kenya and to increase its competitiveness in domestic, regional, and international markets. Provision of reliable and least-cost infrastructure services, particularly roads, power, water, and communication was a key component of the new strategy.
2. The GoK established the Road Maintenance Levy Fund in 1993 to secure resources for maintenance of the road network and established the Kenya Roads Board (KRB) in 1999 to oversee the road network and coordinate its development, rehabilitation, and maintenance. The GoK also attempted to control axle loads along major corridors. Despite the institutional development, policy, and funding instruments for the road sub sector, development of the transport sector as a whole still suffered from numerous constraints at the time of appraisal: particularly, inadequate funds, institutional inefficiencies, weakness in the policy, legal and regulatory environment, poor safety and security standards at the airport and port, and inadequate institutional capacity and human resources.
3. The project was consistent with two key areas of the World Bank Country Assistance Strategy (CAS) placed in 2004: (a) strengthening public sector management and accountability; and (b) reducing the cost of doing business and improving the investment climate. The project was also consistent with the Kenya Transport Sector Memorandum of 2003 which was a Bank-financed Analytical and Advisory Activity to build the outline of an infrastructure strategy and policy direction. The Memorandum identified adequate routine and periodic maintenance, cost effectiveness of civil works, and institutional reforms seeing or all critical to Kenya’s economic development.
1.2 Original Project Development Objectives and Key Indicators
4. As stated in the data sheet, the Project Development Objectives (PDOs) in the original Development Credit Agreement (DCA) were “to enhance the efficiency and effectiveness of the Borrower’s transport sector through: (a) increasing the efficiency of road transport; (b) enhancing aviation safety and security to meet international standards; and (c) promoting private sector participation in the management, financing, and maintenance of road assets”. These PDOs were formulated slightly different in the Project Appraisal Document (PAD) without any significant discrepancy but providing relative weights: 60 percent for road transport efficiency, 30 percent for civil aviation safety and security enhancement, and 10 percent for private sector promotion.
5. The PDO outcome indicators in the DCA were as stated in the data sheet with marginal differences from those in PAD. As indicated in the Implementation Completion and
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Results Report (ICR) guidelines4, the indicators in the DCA are used in the ICR. The key performance indicators for each component of the project are detailed in section F of the data sheet along with discussions in section 3.2.
1.3 Revised PDO and Key Indicators, and reasons/justification
6. Additional International Development Association (IDA) credit was approved in April 2009. The original PDOs were revised by adding one more PDO: (d) restoring vital public infrastructure and assets damaged as a result of the December 2007 post-election crisis to respond to the government’s urgent appeal to IDA to support the implementation of the post-election recovery program (adaptive restructuring). The other three original PDOs remained unchanged though additional or expanded activities were included in Components A, C, and E, and Component F was restructured. Relevant weight of 60 percent for road transport efficiency has been modified to 58 percent and 2 percent weight was given to the newly added PDO.
7. To measure achievement of the additional element of the PDO, the Additional Financing (AF) added one additional PDO indicator: “Vital public infrastructure and assets destroyed or damaged during the post-election crisis are restored and functional again”. Similarly to the other PDO indicators, the Financing Agreement and the AF project paper worded this indicator slightly differently.
1.4 Main Beneficiaries
8. The project papers do not have an explicit section to describe the main beneficiaries of the project. However, the economic analysis of road sector in PAD and the AF identified that the main benefit of the project is ‘savings made by road users’. In addition to the road users, from the statement of PDOs, airport users, private sector, as well as institutions of road and civil aviation sub-sectors are considered main beneficiaries of the project.
1.5 Original Components
9. The NCTIP had originally three funding sources. The IDA credit (39300-KE) of US$207 million, the Nordic Development Fund (NDF) loan of US$15.23 million (€12 million), which was parallel financing, and the GoK’ s contribution of US$54.26 million, totaling US$276.49 million.
A. Rehabilitation of the Northern Road Corridor. (IDA US$134.59 million, total US$190.46 million) 10. Strengthening and rehabilitation of about 373 km of selected priority road sections along the Northern Corridor; improvement of the North Airport Road connecting the Mombasa Highway to the Old Embakasi Airport (about 8 km); and consultant services for supervision works.
4 p16 Guideline for reviewing World Bank Implementation Completion and Results Reports, updated on August 1, 2014, IEG and p58 Implementation Completion Report Guidelines, OPCS, Aug 2006, last updated July 22, 2014
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B. Socio-economic Enhancement, Roadside Amenities and HIV/AIDS Mitigation. (IDA US$3.62 million, total US$4.35 million) 11. Construction of proper bus and truck stops at key selected locations, and off-road booths for sale of local produce, and specific interventions along the Northern Corridor to mitigate HIV/AIDS, such as awareness campaigns, distribution of condoms, strengthening of local health centers as needed, voluntary counseling and testing, and support and care for affected persons.
C. Private Sector Participation in Road Management and Maintenance. (IDA US$8.68 million, total US$10.66 million) 12. Provision of technical assistance to (a) facilitate the concessioning of selected sections of the Northern Corridor road link; and (b) implement a pilot program of long-term output and performance based maintenance and management of a selected sub-network (about 300 km) of lower volume roads.
D. Road Safety Improvement. (IDA US$ 4.82 million, total US$4.96 million) 13. Provision of consultant services to prepare and implement a program of specific actions designed to reduce the number of road accidents and fatalities.
E. Institutional Strengthening in the Roads Sector and Technical Assistance. (IDA US$8.24 million, total US$11.46 million)5 14. Provision of technical assistance and training to enhance institutional capacity and support policy reforms in the road sector, including establishment of an autonomous National Highways Authority. This component also includes provision of consultant services for design, engineering and preparation of bid documents for selected road projects.
F. Support to the Kenya Airports Authority. (IDA US$34.82 million, total US$41.91 million) 15. Financing of civil works, consultant services, purchase of equipment, IT support and training to improve the operations, search and rescue capacity, and the safety and security standards at the Jomo Kenyatta International Airport (JKIA), Mombasa Moi International Airport, Wilson Airport, Kisumu Airport and other selected minor airports.
G. Support to the Kenya Civil Aviation Authority. (IDA US$10.02 million, total US$10.21 million) 16. This includes: (a) technical assistance for safety inspection, training, implementation of Global Navigation Satellite System/Global Positioning System (GNSS/GPS) for en route and approach procedures at minor airports; and (b) support to the East African School of Aviation (EASA) for training of trainers, purchase of training equipment for airworthiness, air traffic control systems, and engineering services, as well as an air accident investigation laboratory.
H. Support to the Ministry of Transport and Communication. (IDA US$2.20 million, total US$2.48 million) 17. This includes strengthening of the Ministry of Transport and Communications (MOTC) through purchase of equipment, support to Bandari College, technical assistance,
5 Cost includes project operation cost of MoTI, US$1.1 million.
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and training, and sector studies related to maritime laws and regulations, implementation of the new transport sector policy and regional trade and transport facilitation.
18. In the rehabilitation of roads, 98 percent of design and supervision was to be funded by IDA, while civil works were to be co-funded by the GoK and IDA at 25 percent and 75 percent, respectively. For the airport expansion and facility improvement, 94 percent of consultant services was to be financed by IDA, and the civil works were to be co-funded by the GoK and IDA at 26 percent and 74 percent, respectively.
1.6 Revised Components
19. Change in Financing Parameter and the revision of Project Component. On December 14, 2005, Office Memorandum for change in the financing parameter for Civil Works (Roads Component) and revision of the Component to support the Kenya Airports Authority (KAA) was approved. The PDOs remained same and the DCA was amended as follows: Cancel the renovation of Old Embakasi Airport (Nairobi) and Paragraph 1 in Part F of Schedule 2 to the Agreement is amended to read “Rehabilitation and reconfiguration of the main terminal at Jomo Kenyatta International Airport and construction of a new terminal 4; with corresponding reallocation of the credit proceeds; and Increase in the government’s counterpart share of financing for road works from 25 percent to 33 percent, and reducing the IDA share from 75 percent to 67 percent.
20. Additional Financing. The Board approved an additional IDA credit of US$253 million (45710–KE) entirely toward the road sub-sector for unfunded road sections and deepening the reforms and Governance and Anti-corruption Action plan that was agreed between the GoK and the Bank. The NDF financing increased by €4 million, totaling €16 million, which was equivalent to US$19.19 million. Due to changing in the financing proportions, counterpart funding increased by US$286.35 million, totaling of US$340.64 million. In addition, US$100 million from other sources6 was included in the financing plan and the overall revised project coast was US$919.83 million. The Results Framework was also revised with additional indicators.
21. The AF added the implementation of Road Sector Governance and Integrity Action Plan (RSGIAP) as a requirement. The RSGIAP included new steps and measures to improve transparency and accountability such as the introduction of new and additional clause in the road works contracts permitting the GoK and/or the World Bank to terminate any of these contracts in the event that the winning contractors were debarred by the Sanctions Board of the World Bank Group. The early termination clause was and remains an exception to Bank policy. As the result, the NCTIP expanded its target to tackle with full-scale road sub-sector reform.
22. Revised components of the projects under the AF were as follows: (a) AF to cover the shortfall in financing of three original components, Components A, C and E, including the expanded or new activities within the components; and (b) restructuring of Component
6 Financiers under consideration included European Investment Bank and Kenya Local Banks
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F without AF from IDA. The rest of the original components, Components B, D, G and H remained unchanged. Details of the revision are described below:
Component A: Rehabilitation of Northern Corridor and Emergency Rehabilitation (US$318.41 million cost increase; additional IDA financing of US$220.43 million) 23. The AF covers unfunded rehabilitation and improvement of three road sections: Mau Summit-Kericho, Kericho-Nyamasaria, and Nyamasaria-Kisumu Airport-Kisian, totaling 158 km. In addition, a new sub-component was the repair and replacement of roads and bridges damaged or destroyed by floods in late 2006 and early 2007, and restore other public infrastructure assets including buildings, vehicles, and equipment damaged following the general elections in December 2007.
Component C: Private Sector Participation in Road Management (US$12.70 million cost increase; additional IDA financing of US$8.82 million) 24. Additional cost has been allocated to the existing two sub-components.
Component E. Institutional Strengthening in the Roads Sector and Technical Assistance. (US$24.24 million cost increase; additional IDA financing of US$23.75 million) 25. In addition to the existing studies, design studies for the Sudan Link road and the Urban Public Transport Improvement study in Nairobi were added to this component. A new sub-component, Strengthening Governance in the Road Construction Industry, was added with the following activities: (a) establishing a road infrastructure disaster management and response unit within the Kenya National Highways Authority (KeNHA); (b) establishing a National Construction Authority (NCA) to promote and oversee professional and ethical conduct in the construction industry; and (c) strengthening the Engineers’ Registration Board (ERB) and its associated institutions, including the Institution of Engineers of Kenya. Institutional strengthening within the existing component was also scaled up under the AF.
Component F. Support to the Kenya Airports Authority 26. Component F was restructured, without any AF from IDA, as follows: (a) Cancel the rehabilitation of the Old Embakasi Airport; (b) Introduction of new project activities for: (i) the expansion of JKIA, including construction of a new passenger terminal building (unit 4), a car park, and reconfiguration of terminals 1, 2, and 3, and (ii) the supervision of expansion works at JKIA Units 1-4 and arrivals building; (c) Reallocation of the following IDA funds to the expansion of JKIA: (i) terminal construction and extension of the runway at Kisumu Airport, (ii) renovation of the terminal and upgrading of security at Wilson Airport, and (iii) rehabilitation of the Old Embakasi Airport; (d) Reduction of IDA’s financing percentage for civil works at JKIA Unit 4 and car park from 25 percent to 19 percent; and (e) Consolidation of the subcomponents for security perimeter lighting, surveillance system, and support to emergency centers into the subcomponent for security and communications equipment and vehicles, and adjustment of funds for feasibility, design, and supervision of Kisumu and Wilson Airport reconfiguration and training.
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1.7 Other significant changes
27. Restructuring. In addition to the changes in financing parameter and the revision of project component in 2005 and the AF, the project had a level II restructuring in December 2012. This was an exceptional request to extend the closing date of both original and additional credits by 36 months to complete the on-going activities. Delays were partially due to the implementation of RSGIAP. Since the sector wide reform was not anticipated originally, due to the factors external to the operation and outside of the control of the Borrower, extension was requested. Reallocation of funds among various categories of the NCTIP was also included in the restructuring.
28. Parallel Financiers. The French Development Agency (Agence Française de Développement, AFD) (new credit, US$93 million) and European Investment Bank (EIB) (new credit, US$93 million equivalent) decided to provide parallel finance to the NCTIP, which became effective in 2011. The AFD supported the construction of Unit 4 terminal building and car parking garage of JKIA and the activity has completed successfully7. On the other hand, the EIB was to finance the remodeling of JKIA terminals but decided to cancel its finance due to considerable delays and the needs to retrofit the expansion plan at JKIA following the fire tragedy in 2013 that destroyed part of the facilities which had been earmarked for remodeling. Since the GoK has not made the final decision on the remodeling of terminal 1-B, C and D, this activity has been on hold.
29. Government Restructuring. With the ratification of new Constitution in 2010, transport sector under Ministry of Roads, Public Works and Housing and Ministry of Transport and Communications were merged under one ministry, Ministry of Transport and Infrastructure (MoTI). MoTI has State Department of Transport and State Department of Infrastructure.
2 Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry
30. The project quality at entry is rated Moderately Satisfactory. The project was designed in a client-oriented manner, responding to the government’s priorities set in the ERSWE and gaps identified by the ongoing transport sector reform task force, and aligned with the support areas identified under the CAS (2004-2007) as well as the Transport Sector Memorandum. The project embraced a holistic approach to support policy formulation and project implementation in various transport subsectors, including regional security and tourism perspectives and its impact on the economic development of the country. Significant weight was given to strengthening the institutional structure in the road subsector.
31. Adequacy of government support on project preparation. The GoK had taken numerous steps to reform the entire transport sector since the 1990s, such as establishment of the Road Maintenance Fuel Levy Fund and KRB, improvement of axle load control, setting up of a national taskforce, the enactment of the Civil Aviation Act to establish an autonomous Kenya Civil Aviation Authority (KCAA), privatization of Kenya Airways, and so on. At appraisal, the GoK had set up a high level task force to review the existing structure
7 Final financing shares for unit 4 terminal and car parking are: IDA (11 percent), AFD (71 percent), and GoK (18 percent).
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of roads department.
32. Well selected project components. The Bank team had extensive discussions with both the GoK and development partners to finalize project components and increase coordination in the sector. Although the project covered various transport subsectors, which could increase the risk of poor performance by increasing the project’s complexity, the Task Team deemed it necessary to propose a holistic approach to the GoK based on their assessment of the ongoing sector reform and government commitment. Importance was given to Bank policies, specifically social and environmental safeguards (resettlement and HIV/AIDS mitigation, roadside amenities, and so on), some of which were new to Kenya. The financial management (FM) and procurement capacity of the implementing agencies (IAs) was reviewed, and possible funds flow and disbursement regimes were identified and agreed at the preparation stage. One component of the project concentrated on the improvement of the road safety.
33. Built on the lessons learned from previous transport sector reforms in the Region. The World Bank accumulated considerable knowledge and experience in transport sector reform in the region through Sub-Saharan Africa Transport Policy Program. Specifically, the framework developed under the Road Management Initiative would inform efforts to improve the institutional and financial sustainability of road management. Based on previous road sector projects, the project was designed to ensure ownership of the project, emphasize capacity building, incorporate an “all-inclusive” Project Technical Team (PTT), and include adequate and secured domestic funding in project-financed infrastructure maintenance.
34. Assessment of project design and Results Framework. The PDOs of the project were clear. Importance of project components to the PDOs was mostly evident but the causal chain between Components B, D, E, and H and PDOs was vague (see section 2.3). Since the project supported a transport sector reform in addition to the infrastructure development, the original project life of five years underestimated the complexity of and necessary time for sector reform to attain a sustainable level.
35. Assessment of risks and mitigation. Overall risk rating at appraisal was ‘Substantial’ with one element related to the PDO, and three elements related to component results rated ‘Modest’. Most of the potential risks were identified and mitigation measures were prepared, but the following two potential risks were not identified: (a) institutional sustainability, and (b) effective monitoring and evaluation (M&E) mechanisms. Because the project was to support the establishment of a new highways authority, a strategic approach would be required for the sustainability of such an authority in terms of funding and human resources. In addition, the project was to set up an innovative approach in M&E, outsourcing the task to a local academic institution that had no experience in M&E of large infrastructure investment projects. Therefore, there was uncertainty about the quality of outputs and extra attention was required in order to ensure adequate implementation. There was no potentially controversial aspect identified at the appraisal stage of the project.
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2.2 Implementation
36. The key issues affecting project implementation were the change of leadership, post- election crisis, regional security deterioration, floods, cost increase, late release of payment, inadequate counterpart funding, poor project management of civil works, the review of road sector procurement, and RSGIAP. Between the start of the project in September 2004 and July 2011, most Implementation Status and Results reports (ISRs) rated project performance ‘Satisfactory’. Project performance was rated ‘Moderately Satisfactory’ twice between 2006 and 2011, first when significant delays were noted due to changes in the project technical team leadership (road subsector) in 2006 and second the post-election violence in 2007/8. The Mid-Term Review (MTR) in 2009 noted the satisfactory project progress with completions of Maji Ya Chumvi-Miritini road section and security fencing of JKIA, and substantial completion of Lanet - Njoro Turn Off road section. The MTR explained the low disbursement at the initial stage was attributed to prolonged delays in start-up activities. Starting 2012 to the closing of the project, ISR rated the implementation ‘Modestly Satisfactory’ or ‘Moderately Unsatisfactory’ mainly because of late release of payment and lack of counterpart funding. This section will discuss both positive and negative factors that affected the project implementation.
37. Government commitment to sector reform enabled the successful implementation of this complex project with multi IAs from different transport sub-sectors and under three different administrations over the project cycle. Enactment of the 2007 Kenya Roads Act and creation of three road authorities in 2008 were realized one year before the revised target. The KCAA and KAA also became financially independent through the structural reform of agencies. The National Transport and Safety Authority (NTSA), NCA and the Engineering Board of Kenya (EBK) were established in 2011/12 through the enactment of designated acts. The Project Coordinating Team had quarterly meetings where IAs shared and discussed progress and implementation issues. Quarterly meetings also contributed to the enhancement of communication and coordination among IAs, providing a platform for discussions, and boosted supports for an integrated transport approach in Kenya. The project coordination was further improved after the MoTI assigned the current project coordinator.
38. The NCTIP suffered from unexpected negative factors, such as a sharp increase in the price of key construction material in the international market, post-election violence in 2007/08 and deterioration of regional security due to terrorist attacks since late 2011. Soon after the approval of the project, the prices of key construction materials in the international market increased, particularly steel, fuel and bitumen resulting in high bid prices of the civil works contracts. Post-election violence displaced about 350,000 people8 and led the NCTIP to suspend operations in several locations due to temporal unavailability of labor. The increased security risk in the region suspended the realization of direct flights to/from JKIA and U.S. airports approved by the Transportation Security Administration of the United States (TSA) in 2009 and required a higher level of security facilities at the major airports in Kenya. The number of international passengers at JKIA that had increased steadily since 1998, decreased 5 percent in 2013, compared to a peak in 2011.
39. Prolonged project life was partially due to the detailed reviews in Kenya conducted by the Department of Institutional Integrity (INT) and the introduction of the RSGIAP
8 https://wikileaks.org/wiki/Full_Kenyan_post_election_violence_report_2008
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imposed by the AF. Concerns about integrity issues and to increase transparency and accountability in the road sub sector led INT to conduct detailed implementation reviews of on-going projects in Kenya, including the NCTIP during 2005-07. This review put on hold the implementation of project activities. The INT also conducted reviews of some of the bidders for three project road sections 9 in 2008, which caused further delays in the processing of the AF and start-up of execution of road contracts. Implementation of RSGIAP required both the Bank and the GoK to undertake additional due diligence, such as reviews of the winner of bids. The full-scale sector reform necessitated more time than anticipated.
40. A unilateral change in the leadership of the PTT (road sector) in 2006 without consulting the Bank also caused a delay in start-up activities of road construction work. Changing the leadership without consulting the Bank was in contravention to the legal agreement. After the protracted discussions with the GoK, the Ministry of Roads, Public Works, and Housing (MoRPWH), Ministry of Finance (MoF), and the Bank signed the Memorandum of Understanding on transitional arrangements for the proposed change in the MoRPWH PTT, which provided the way forward.
41. Slow progress of civil works due to contractors’ poor project management and inadequate deployment of resources had serious impact on the project implementation. KeNHA issued warning letters to the contractor of road sections: Mau-Summit-Kericho, Kericho- Nyamasaria, Sultan Hamud-Machakos Turn off, and Machakos Turn off-JKIA, and requested a supervision engineer to intensify monitoring with preparation of a quarterly work program including specific outputs for each month. At the same time, it was agreed among KeNHA, the supervision consultant and the contractor to review the contract if the progress remains slow.
42. KeNHA applied liquidated penalties for the section of Machakos Turn off-JKIA, which took twice as much time than originally projected. Since the contractor contested this action, this dispute was brought to the Permanent Court of Arbitration in The Hague. Based on the recommendations from the Dispute Resolution Expert (appointed by the Court), both sides agreed on an amicable settlement. Intensive monitoring after this dispute contributed to the improvement of the progress of the construction work.
43. Insufficient counterpart funding and delays in payment processing were serious challenges. Adequate and timely counterpart funding was reported during the first phase of the project but after approval of the AF, securing the counterpart funding became a serious and systemic issue, specifically in the last two years of the project. In addition, the slow and duplicative payment procedures of the ministry delayed the settlement of payment certificates. The delays in commencement of road sections of Mau-Summit-Kericho and Kericho-Nyamasaria were caused by a lack of counterpart funding for the advance payment. 10 The outstanding payment and uncertainty of future payments from the counterpart resulted in the suspension of construction for the sections of Sultan Hamud- Machakos Turn off and Machakos Turnoff-JKIA for some time. Payment of interest due to the delays in payment was also a significant burden to the GoK. 11 Prioritization of
9 Mau Summit-Kericho; Kericho-Nyamasaria; and Nyamasaria-Kisumu-Kisian 10 It is recorded that no objection from the World Bank to award these contract was issued on October 2009, but the construction commenced only in October 2010. 11 KSh 158.5 million in interest is recorded in December 2013.
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implementing the New Constitution ratified in 2010 was another factor.
44. To cope with inadequate counterpart funds, the GoK requested the Bank to allow for 100 percent IDA financing for the road works contract starting FY 13/14 until the IDA fund was exhausted. This contributed significantly to the improvement of disbursement and progress of civil works. The Bank also recommended in 2014 that the National Treasury issue clear guidelines on securing budgets of donor funded projects. The guidance was finally issued in September 2015, and disbursement of funds and payments to contactors resumed in December 2015. At the ICR mission in February 2016, there was KSh 2.9 billion outstanding payments for the road works to be paid from counterpart funds by June 2016 and the National Treasury assured the availability of this budget.
45. The increase of cost let the GoK to request AF in 2008. The main causes of cost overruns were due to: (a) significant escalation in input unit costs in the international market; (b) higher traffic growth than expected, resulting in upgrading to the road design; (c) significant deterioration in the project road sections, aggravated by the floods in 2006/07, which resulted in greater than expected rehabilitation costs; and (d) additional costs incurred for supporting post-election reconstruction. An assessment of unit construction costs in neighboring countries, such as Uganda, Ethiopia, Tanzania, and Mozambique, undertaken at the time of the AF found that unit cost increase under the project reflected regional and global market movements and no abnormality was found.
46. As stated above, a rapid growth in traffic volumes on the corridor forced KeNHA to increase the scope of the original intervention. The number of vehicles in the major cities nearly doubled between 2003 and 2007, and the strong traffic growth continued throughout the project life: The annual average daily traffic (AADT) on eight project road sections varied from about 4,400 to 25,300 in 2014/15, compared to 2,000 to 12,000 in 2003 with an average annual growth rate of 8.1 percent. 12 Between 2003 and 2014, the number of registered vehicles in Kenya increased by about 1.56 million13 while the total number of registered vehicle in Kenya in 2013 was 2.01 million.14
47. Based on the above discussions, the overall implementation of the project, including the compliance with both the original credit and the AF is rated Moderately Satisfactory.
2.3 Monitoring and Evaluation Design, Implementation and Utilization
48. M&E design. As noted in section 2.1 the PDOs are clear, but slightly differed between the PAD and DCA, and the indicators of several components did not reflect the objectives directly. Attaining road sub sector reform was one of the important targets of the project but there was no PDO indicator to address this challenge. The AF supported the further expansion of JKIA and added intermediate outcomes as well as indicators to measure the capacity expansion of JKIA, which was different from security and safety enhancement. However, PDO2 for aviation remained unchanged, and the causal chain between the PDO and the additional expected component outcome became unclear. In addition, measuring methods for some indicators were not feasible, for example, ‘legislation enacted for private
12 KeNHA: NCTIP Project Completion Economic Analysis Summary, April 2016 13 Kenya Facts and Figures, Kenya National Bureau of Statistics. 14 WHO: Global Health Observatory data repository
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sector participation in road’, and ‘compliance with respective treaties’, cannot be measured as a percentage.
49. The Results Framework prepared under the NCTIP was designed to be monitored by a team of experts from the University of Nairobi Enterprises and Services Limited (UNES), and the baseline survey was completed in 2007. While responsible agencies were assigned for data collection, UNES was to consolidate and analyze the data. The approach to utilize a local academic institution was innovative, and positive impacts on the institutional capacity were observed, supporting more than 50 post-graduate students and a PhD candidate majoring in transport and setting up a transport data bank in the university. This arrangement is currently adopted by ongoing Bank-supported transport projects in Kenya.
50. Due to rapid motorization during the project period, there is a high risk of worsening traffic congestion in urban centers along the Northern Corridor. Since this risk directly affects the total travel time, this should have been identified and reviewed at the AF or at restructuring, including the travel time of individual road sections to the PDO indicator. The distance between Mombasa and Malaba/Busia is about 930 km and to achieve the target travel time, trucks, cars, and buses need to maintain an average speed of 52 km/h, 85 km/h, and 69 km/h, respectively. Thus, this target travel time was rather ambitious with respect to the speed limit within towns and for specific vehicles set by the Traffic Act of Kenya.15 This aspect needed to be considered as the Bank is a leading institution for road safety.
51. M&E Implementation. In spite of the high sustainability of the M&E arrangement with an institutionalized system, the following challenging were observed in M&E implementation: (a) long delays in contracting the UNES (contract was signed in early 2006) and amendment of contract duration; (b) delays in data collection and reports, specifically starting 2011; and (c) quality of M&E reports. During the ICR mission, lack of understanding of the tasks of the M&E consultant was observed and missing project indicators in the M&E reports were addressed though it was confirmed that each IA has collected accurate and relevant data. The issue was not the credibility of available data, but the inefficient M&E process (collecting and analyzing data), which was also addressed by the IAs and stakeholders. The ICR team therefore directly obtained most of the data from IAs and stakeholders.
52. It is also noted that the monitoring of agreed indicators by the Bank team was inconsistent and indicators different from the Results Framework were sometimes recorded in the ISRs. Some indicators, such as reduction in road-related fatalities, implementation of the RSGIAP, road user perception and satisfaction, and so on, have been hardly explained in the ISRs or Aide Memoires. Achievement of the target of 25 percent reduction in travel time, which is one of the outcome indicators, has been reported in ISRs and Aide Memoires repeatedly but the data source was not confirmed under the ICR process. Likewise, apart from the obtainment of the TSA security clearance, further details should have been provided related to the United States Federal Aviation Administration (FAA)/International Aviation Safety Assessment (IASA) Category 1 (CAT1), which was not achieved at the end of the project, whereas it was also an important outcome indicator.
15 The Traffic Act of Kenya defined that the maximum speed of a vehicle in a town is 50 km/h. To travel from Mombasa to Malaba (930 km) in 11 hours requires an average speed of 85 km/h.
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53. M&E Utilization. During the implementation of NCTIP, utilization of M&E was partial because of discrepancy of indicators, inadequate analysis on M&E, and delayed submission of M&E reports. After the closing of the project, a workshop to present the achievements and lessons learned of the NCTIP was held on March 13, 2016. It presented a good opportunity for stakeholders to review the achievements of the project and utilize the information collected. There were useful comments from stakeholders to improve the M&E of the project. It was unfortunate that there was no other workshop during the implementation of the NCTIP to discuss the project progress with the stakeholders based on the Results Framework of the project.
54. M&E collaboration with the Northern Corridor Transit and Transport Coordination Authority16 (NCTTCA) under the NCTIP was not as strong as the project aimed. The limited resources and manpower of NCTTCA were noted at the entry, but the Authority currently monitors 30 performance indicators along the corridor separately prepared under one of its program areas and has established the Northern Corridor Transport Observatory on their website which presents the monitoring results in a timely manner. Since their monitoring coverage is getting wider and more comprehensive in recently years, it is expected that performance of the corridor will continue to be monitored after the end of the project.
55. In conclusion, the Bank has raised concerns on the M&E implementation, but it could have intervened in this matter more proactively, considering the importance of M&E. Gaps observed in the project M&E design and implementation reflect enhanced M&E quality and effectiveness as a lesson learned for future projects.
2.4 Safeguard and Fiduciary Compliance
56. Safeguard. Based on the project implementation review by the safeguard and natural resource management specialists, the safeguard policies triggered during project preparation were found adequately covering the impacts and risks of the implemented subprojects. The NCTIP was designated as an Environment Category ‘B’ project-a partial assessment. Environmental Assessment (OP/BP 4.01) and Involuntary Resettlement (OP/BP 4.12) were triggered by the project. Resettlement Policy Framework was reviewed and cleared by the Bank and disclosed to public (InfoShop) on January 14, 2004. Based on the Framework, Resettlement Action Plans (RAP) were prepared for all road work contracts and in total 1,055 project affected people were compensated under the NCTIP. KeNHA carried out land acquisition for five road sections between 2010 and 2015 with the total amount of KSh 946 million without experiencing any substantial delays in civil works.17 KeNHA assigned environmental and social specialists to the project. KAA also carried out land acquisition satisfactorily for upgrading Kisumu Airport except one landowner who refused to move. The key safeguard challenges in the operation are summarized in the table 1.
57. Road-side amenities and social and economic enhancement component, including HIV/AIDS mitigation has been successfully completed with positive impacts as discussed in section 3.5. As the follow up matters, the RAP completion reports and rehabilitation of
16 The NCTTCA was established under the legal framework of the Northern Corridor Transit Agreement to co-ordinate implementation of the Agreement and to carry out decisions and resolutions reached by policy organs of the Authority. 17 For the sections of Maji ya Chumvi-Miritini and Sultan Hamud-Machakos Turnoff, no specific issue of land acquisition has been observed but the detailed information is not available in KeNHA since the constructions were undertaken by the Ministry before the establishment of KeNHA.
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borrow pits and stone quarries are required while close monitoring of the allocation of the trading stalls or units in Awasi market upon the completion of construction is necessary.
Table 1. Safeguard policies triggered by the NCTIP and implementation challenges Safeguard policy triggered Implementation challenges by NCTIP OP/BP 4.01 Environmental Construction related impacts; Assessment Safety of construction sites (speed control); Timely quarry rehabilitation and closure. OP/BP 4.12 Involuntary Compensation of project affected people without legal rights, Resettlement e.g. open air market traders with make-shift structures; No clear guidelines on livelihood restoration; Most of the road reserves encroached upon; Setting up of cut-off date due to difficulties of controlling the influx of people; Political interferences; Speculative development along the project area; No clear national policies on RAP; Issues of land ownership and documentation (succession issues leading to litigation); Lack of adequate funds for timely RAP implementation. Access to Information Policy n.a.
58. Financial management. The project complied with the financial covenants stipulated in the Financing Agreement. All the quarterly unaudited and the annual audited financial reports were received. Some of the clarifications requested by the audits were mainly related to delays in project implementation and outstanding bills that attracted interest and penalties. The main challenges during implementation were inadequate provision of budget against the submitted annual estimates that in turn affected the releasing exchequer. Delays in fund flows were also experienced especially by the parastatals. The delays could be traced either at the National Treasury or at the line ministry. The weak capacity of staffing and frequent transfer of accountants at the line ministry also affected the efficiency of project operation. However, the IAs has built overall capacities in FM over the years.
59. Procurement. Overall procurement performance under the project was rated as Satisfactory. At the initial stage of project implementation, slow and unsatisfactory procurement process was noted in the road subsector due to the transferring of functions from the ministry to the newly established KeNHA. However, KeNHA increased its procurement capacity rapidly through institutional strengthening and technical assistance of the NCTIP, and the procurement plan was back on track. KeNHA is currently fully established and staffed with qualified and experienced technical and procurement staff though procurement capacity under Bank financed operations is still relatively low, and specifically, contract management needs to be strengthened. KCAA, KAA, and MoTI also completed all the contracts earmarked for implementation under the project satisfactorily.
2.5 Post-completion Operation/Next Phase
60. At closure, most of the activities were either completed or close to completion. Status of the remaining activities at the ICR submission are as follows: The Nyamasaria-Kisumu
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Airport-Kisian section (total 21.9 km, 8.4 km of which is dual carriage way) was completed and handed over to KeNHA in March 2016, except the Nyamasaria-Kismu-Kisian road section including Kisumu Bypass in which street lighting, road furniture, landscaping, foot bridges, and construction of drains remains to be completed by July 2016. The office rehabilitation and construction of new office buildings were completed and handed over to the GoK in March 2016. A lorry park at Nyamasaria and a market at Awasi are expected to be completed by September 2016. The National Treasury acknowledged the outstanding payments and assured (ICR mission in February 2016), smooth weekly disbursement of funds to MoTI to complete the remaining payments.
61. As a positive impact of the NCTIP, some of the rehabilitated roads under the project are currently being maintained under the output- and performance-based road contract (OPRC). The NCTTCA is also monitoring the performance of the corridor including the quality of roads and traffic volume.
62. Even after the project is closed, the GoK, KAA and the KCAA are taking further steps towards the obtainment of the FAA CAT 1 recognition: the KAA and KCAA drastically improved its compliance rates through follow-up on the eight critical elements identified by the International Civil Aviation Organization (ICAO). They have met the requirements for the CAT1 clearance and expect to obtain CAT 1 certification in 2016. The key challenge for the KCAA is to retain its inspectors through an adequate staff loyalty policy, by offering, among others, competitive salaries.
63. Feasibility studies carried out under the NCTIP facilitated the project preparation and financing: Implementation of Mombasa Southern Bypass is financed by Japan International Cooperation Agency (JICA), and the design of Lesseru-Nadapal/Nakodok Road has accelerated the preparation of the Eastern Africa Regional Transport, Trade and Development Facilitation Project (P148853). The project was approved by the Board in June 2015 and became effective in November 2015, before the closure of the NCTIP.
64. Continuous institutional capacity building activities are undertaken by on-going projects: National Urban Transport Improvement Project (NUTRIP, P126321) and Kenya Transport Sector Support Project (KTSSP, P124109) have institutional capacity building supports for the NTSA, NCA, KRB, EBK and, KCAA. KTSSP also supports capacity building of KAA.
65. Follow up on uncompleted activities is necessary: the GoK’s decisions are awaited for the conclusion of the development of a 50-year transport master plan, the remodeling of terminal 1-B, C and D, and the restructuring of KCAA.
3 Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Rating: High
66. The project objectives and accomplishments remain highly relevant to the GoK’s current development priorities. The GoK’s development strategy, “Vision 2030” recognizes the transport sector as a key Pillar for development and identified the NCTIP as a flagship project to promote trade in the East African region and enhance economic and social integration. The PDOs remain highly consistent with the current Country Partnership
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Strategy, contributing to two of the three focus areas: (a) “Competitiveness and Sustainability - Growth to Eradicate Poverty”, of which a key objective is enhancing infrastructure and logistics to promote growth, and (b) “Protection and Potential - Human Resource Development for Shared Prosperity”.
67. The objective of improving aviation safety and security enhancement to meet international standards remains highly relevant as travel and tourism are key elements to the economy of Kenya 18 and East Africa, and full compliance with international aviation standards is critical to the sustainability of Kenya’s civil aviation and tourism industries.
68. The relevance of project implementation is assessed as High. The Project Oversight Committee (POC) and project coordinating team conducted quarterly meetings, and a project coordinator was appointed to increase coordination among IAs. These efforts created a platform for the sub sectors to learn from each other and for discussing the transport sector in general. The Bank responded promptly to unexpected events such as post-election crisis, cost increases, emerging demands for further expansion of JKIA and up-scaling the design scope of road sections due to higher traffic growth, severe floods, and so on, by processing the AF and restructuring the project activities and reallocating funds. Flexibility of accepting 100 percent financing from IDA allocation starting FY13 until the exhaustion of the funds mitigated the risk arising from the lack of counterpart funding. These actions were highly relevant as they allowed the successful completion of almost all project activities.
3.2 Achievement of Project Development Objectives
69. Overall attainment of original PDOs and revised PDOs are both considered Substantial. The project involved the reform of the transport sector and covered multiple subsectors of transport, including road, civil aviation, and maritime. The NCTIP introduced an integrated approach to transport planning, which led to developing and adopting an integrated transport policy in 2009. The project established a platform for the transport sector through quarterly meetings to discuss transport issues in an inclusive and holistic manner. The project has met the targets for four out of six PDO indicators, and met targets for 13 out of 18 intermediate indicators. In addition to the outcome and intermediate indicators, benefits associated to each PDO are considered in the assessment. The relevant importance among four PDOs follows the order listed in legal agreements and weight given in project papers. In summary, the NCTIP has largely achieved the PDOs. The assessment results of each PDO are summarized below, and achievements by objective are detailed in annex 2.
Table 2. Summary of achievements of PDO indicators Outcome Indicators Actual Percent Targets Values Achieved Aggregate rating of Efficacy: Substantial PDO1. Increase the efficiency of road transport (58 percent weight) Travel time by road from Mombasa to Malaba and Busia 25% 15% 60% reduced by 25 percent PDO2. Enhance aviation safety and security to meet international standards (30 percent weight) (a) KCAA is cleared as category 1 safety status under the CAT 1 Not obtained 0% IASA of the US FAA clearance but met the obtained requirements
18 The total contribution of Travel & Tourism to GDP was KSh561.8bn (10.5% of GDP) in 2014.
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(b) JKIA in Nairobi is cleared by the US TSA for direct Direct Direct flight 100% flights to/from United States airports flight cleared cleared PDO3. Promote private sector participation in the management, financing, and maintenance of road assets (10 percent weight) (c) One long term performance based road management 100% 100%+ 100%+ and maintenance contract awarded to the private sector and is effectively under implementation (d) One road segment along the Northern Corridor 100% 100% 100% offered for concession to the private sector PDO4. Restore vital infrastructure and public assets damaged as a result of the 2007 post-election crisis (2 percent weight) Vital public infrastructure and assets destroyed or 100% 100% 100% damaged during the post-election crisis are restored and functional again
70. The classical aggregated evaluation is adopted for the NCTIP. Original PDOs and outcome indicators were unchanged, and restated in the Financing Agreement of the AF. Fourth PDO added at the AF was to respond to the post-election recovery program with an outcome indicator specific to the PDO. In addition, low disbursement ratio at the AF (21 percent) implies that overall outcome rating would be largely affected by the attainment ratio of all parameters after the AF. Therefore, split evaluation does not gain any merit in this ICR to assess the achievements of PDOs.
PDO1. Increase the Efficiency of Road Transport - Rating: Substantial 71. The project has substantially achieved the first PDO by rehabilitating in total 419.3 km19 of the Northern Corridor satisfactorily, reducing travel time by 15 percent in spite of a more than doubling of the traffic volume for the project road sections20, constructing road side amenities, reducing road related fatalities, establishing and enhancing KeNHA, and increasing transparency and accountability in the road sub-sector as detailed in table 3.
Table 3. Summary of Achievement by PDO1
19 Total rehabilitated and improved road length 419.3 km includes 41.4 km dual carriage (377.9 +41.4= 419.3 km) as per Borrower’s report. 20 For 8 project road sections, the average growth in traffic volume between 2003 and 2014/15 was 265 percent, varying from 154 percent for the Lanet-Njoro Turnoff section and 345 percent for the Nyamasaria-Kisumu Airport-Kisian section.
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PDO2. Enhance Aviation Safety and Security to meet International Standards -Rating: Substantial 72. The second PDO was substantially achieved as presented in table 4. The CAT1 certification has not been obtained officially but it is expected to be obtained later in 2016 due to the considerable improvements in aviation safety and security.
Table 4. Summary of Achievement by PDO2
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. The improved security monitoring at key airports through transferring the responsibility for passenger, baggage and mail security screening from the police to the KAA . The adoption of harmonized aviation safety and security regulations by each member of the East African Community . The continuation of the KCAA restructuring through the separation of its oversight functions from service provision activities . EASA has been accredited by the ICAO as a regional training center of excellence, as one of 16 training centers in the world
PDO3. Promote Private Sector Participation in the Management, Financing, and Maintenance of Road Assets - Rating: High 73. The third PDO has been clearly achieved through mainstreaming OPRC, and obtaining legal endorsement on private sector participation in management, financing, and maintenance of road assets as summarized in table 5.
Table 5. Summary of Achievement by PDO3
PDO4. Restore Vital Infrastructure and Assets Damaged as a result of the 2007 post- election crisis -Rating: High 74. PDO 4 was assessed attained successfully with the achievement of a PDO4 outcome indicator and one of two intermediate indicators: In total, four public buildings became functional against the target of three buildings.
21 According to the information obtained from KRB. 22 Due to the unfavorable results of due diligence from the Bank group, the GoK decided to terminate the process in 2011.
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3.3 Efficiency Rating: Substantial
75. Efficiency of the project is assessed Substantial mainly due to the prolonged project life and cost overruns in spite of the convincing results of the economic analysis for both road and civil aviation components.
76. The ex-post economic analysis has been undertaken for the rehabilitation of key road sections of the Northern Corridor (Component A), and the expansion of JKIA under the original credit and the AF (Component F). The road works, with a total length of 419.3 km, and the civil aviation related works account for about 72 percent, and 21 percent of the total project cost, respectively. The details of the analysis can be found in annex 3.
Rehabilitation of the Northern Corridor 77. The main benefits of the rehabilitation of the Northern Corridor are the savings of the road users in terms of vehicle operating costs, maintenance costs, and travel time costs. The benefits were measured using the Highway Development and Management Model (HDM 4), the same method that was used at the appraisal stage as well as at the AF. The result indicates that the overall investments for road transport were economically viable for all road sections with an economic internal rate of return (EIRR) ranging from 13.3 percent in the Nyamasaia-Kisumu-Kisian section to 56.4 percent in the Machakos Turn off-JKIA section, in spite of the cost overruns. The overall EIRR for the rehabilitation of the Northern Corridor is 39.1 percent. The net present value (NPV) of the rehabilitation of the Northern Corridor at 12 percent discount rate was US$550 million, which is about 26 percent higher than that of the AF. The higher results than anticipated at appraisal and the AF in both EIRR and NPV are mainly supported by significant traffic growth in all project road sections between 2003 and 2014/15. The summary of economic analysis is presented in table 6.
Table 6. NPV and EIRR of the NCTIP At Entry At AF At Ex-post 373km Road sections Road sections 380 km under original under AF (158 credit (223 km) km) PV of Benefit (US$M) 235 n.a 265 809 PV of Base Cost (US$M) 110 n.a 199 259 NPV (US$M) 125 372 66 550 EIRR % 27 34 20 39
78. The Northern Corridor is the main transport corridor linking the land locked countries of Uganda, Rwanda, and Burundi with Kenya’s maritime port of Mombasa, and also serves the Eastern part of the Democratic Republic of Congo, South Sudan, and Northern Tanzania. About 76 percent of urban dwellers, which is equivalent to 8.7 million people in Kenya, are living within 15 km of the corridor. Project contribution to the regional integration and trade enhancement is considered significant since the project rehabilitated about 40 percent of the Corridor located within Kenya. The NCTIP reduced the average IRI score of project roads to 2.2m/km at closure, which was ranging between 3.2 and 6.6 m/km in 2003, which permits the saving of travel time and reduced vehicle operation cost.
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79. Non-quantifiable benefits associated with the improvement of the Corridor include the enhancement of, and better access to, socio-economic activities through the construction of lorry parks, markets, schools, and improved road safety, especially for non-motorized transport (NMT) with the construction of footpaths and foot-bridges. Furthermore, the establishment and enhanced capacity of KeNHA and improved transparency in the civil works industry through the enhanced capacity of KRB and the establishment of NCA and EBK are also significant benefits obtained from the road subsector reform.
Civil Aviation Component 80. While the financial analysis has not been redone for the ICR, this result was predicated on demand forecasts that predicted 5.5 million passengers (domestic, international and transit) and 353,000 tons of air-freight by 2015, and annual growth rate of 4.7 percent. Actual data received from KAA reveals that total passenger numbers through JKIA reached 6.4 million in 2014, with an annual growth rate of 6.4 percent, and cargo 260,000 tons of air freight.
81. The actual growth in passenger numbers exceeded the demand forecasts in the high scenario, despite the impact of the global economic slowdown, and the fire at JKIA. The drop in air freight is at least partially down to the introduction of stricter regulations in the European Union on the importation of fresh products with excess level of pesticide (Dimethoate)23 since the European market accounts for up to 80 percent of Kenya’s fruit and vegetable sales and 42 percent of flower exports.
82. While actual financial costs (US$270 million) exceeded estimated costs markedly, the growth in passenger traffic, the increase in the Airport Passenger Service Charge, a levy charged on each passenger to pay for the improvements, from US$20 to US$40, would be expected to more than ensure the investment was financially viable.
83. Flexibility in the project implementation such as the restructuring and AF to respond to the changed priorities of the GoK, and cost increase, and obtaining financing from other donors to cover up the financing gap, minimized these negative impacts. Nonetheless, negative impact of cost and time overruns on efficiency is considered significant.
3.4 Justification of Overall Outcome Rating Rating: Satisfactory
84. Since relevance is assessed High, efficacy and efficiency are rated Substantial, overall outcome rating of the NCTIP is Satisfactory.
3.5 Overarching Themes, Other outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development
85. The roadworks under the project included socioeconomic enhancement elements. The positive way in which the NCTIP altered the lives of ordinary Kenyans is encapsulated in a documentary video (https://vimeo.com/116895967). Construction of roadside amenities, such as lorry parks, a community center, and community market created a better environment for truck drivers to rest and local residents to sell local products. Construction
23 Business Daily (2013) Chemical ban hits vegetable exports to the EU market, May 2013
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of five schools has provided better educational facilities for 2,620 students. Footpaths constructed in the urban centers of Kisumu and Nakuru, with a total length of 24.8 km also provide better safety for pedestrians and cyclists, including children and women. The HIV/AIDS mitigation activity under the project resulted in 100 percent level of awareness and availability of VCT centers for the surveyed sample.
(b) Institutional Change/Strengthening
86. The project supported the transport sector reform and made remarkable contributions to institutional strengthening as summarized in annex 2d. Particularly, the NCTIP’s support on the enactment of the Kenya Roads Act 2007, establishment of three road authorities, financial autonomy of the KAA and KCAA are the most outstanding ones.
87. Under the NCTIP, a total of 380 staff attended oversea and/or domestic training programs between 2005 and 2015. In addition, 21 staff from PTT including technical, financial and procurement staff participated in disbursement and procurement clinics organized annually by the Bank and enhanced their knowledge on fiduciary issues.
(c) Other Unintended Outcomes and Impacts
88. No other unintended outcomes and impacts are observed.
4 Assessment of Risk to Development Outcome Rating: Low
89. Risks to maintain the development outcomes are assessed Low as described below:
90. Road Maintenance. At appraisal, the Road Maintenance Fuel Levy Fund, which was established in 1994, could generate about US$100 million annually. This amount was just enough to cover the core network of strategic roads, which were in maintainable condition. With the increase of the number of vehicles and cost of fuel levy from KSh 9/l to KSh 12/l, it is expected that the fund generate about US$400 million in 2015/16.24 Steady traffic growth will support the increase of revenue in the fund. While some of the roads rehabilitated are already under the OPRC, the NCTTCA keeps monitoring and reporting the condition of the roads of the whole corridor with their own performance indicators. Therefore, the maintenance risk of the Northern Corridor is low.
91. Decentralization. Kenya is experiencing a devolution process under the 2010 Constitution, which provided for not only a major devolution of resources and functions, but also creating a whole new layer of county governments. Due to the devolution, the roles and responsibilities amongst national government and county governments are still under discussion. A draft bill has been prepared and submitted to the Parliament to propose merging KURA and KeRRA.
92. Institutional Strengthening and Sustainability. The NCTIP supported the establishment of KeNHA, KURA, KeRRA, NCA, NTSA, and EBK, and the institutional enhancement of MoTI, KAA, KCAA, and KRB. Their implementation capacities have been
24 Estimation calculated by KRB.
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increased through a technical assistance program but continuous supports for further institutional strengthening and sustainability are necessary. For example, the KCAA has not reached a final agreement of institutional arrangement and is still facing a challenge of retaining an adequate number of flight inspection officers at the internationally required level. KeNHA, in coordination with the KRB, needs to develop and apply construction cost index for road works to prepare more accurate cost estimations. The on-going KTSSP and NUTRIP have activities to support these institutions but it is necessary to monitor any other needs for their sustainability.
5 Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory
93. As noted in section 2.1, the project was designed in a client-oriented manner, responding to the government’s priorities and aligned with the support areas identified under the CAS (2004-07), after 10 years break in Bank financing in the transport. The project was designed based on extensive discussions with both the GoK and development partners, being part of the sector reform task force. The Bank ensured the setting up of an “all-inclusive” PTT, and inclusion of adequate and secured domestic funding in the project financed infrastructure maintenance. While the Bank policies, such as environmental and social safeguards, were well respected, special attention was paid to road safety, which the Bank was addressing as a key priority before the establishment of the Global Road Safety Facility in 2006. In addition, efforts made for enacting the Road Act, establishing KeNHA, bringing local academia on board for sustainable M&E system, are remarkable. To demonstrate the GoK’s trust in the Bank, the project was launched by a well-organized workshop with attendance by top managers of the transport sector.
94. In spite of numerous positive aspects observed in the Bank’s performance at entry, the following shortcomings are observed: The PDOs were clear but the result chain from outputs to intermediate outcomes and to final outcomes has not been well developed for some components as noted in section 2.3. The significant cost overruns of road works were mainly due to the factors beyond project control, but were also attributed partially to too conservative cost estimates at entry. Thus, overall Bank performance at entry is rated Moderately Satisfactory.
(b) Quality of Supervision Rating: Moderately Satisfactory
95. The Bank team worked closely with the IAs and the GoK by providing technical support. The Bank supervision team put appropriate fiduciary measures and safeguards in place. Most of the team members were located in Nairobi, which allowed the team to provide daily communication and support for the GoK. It was noted during the ICR mission that the client respected the Bank and the relationship between the project management team and IAs was solid, which enabled both sides to manage and conclude this complex project successfully. Furthermore, the fact that anti-corruption measures introduced by the Bank after the approval of project were mostly adopted and implemented successfully by the GoK demonstrates strong commitment of the GoK to the Bank project. The Borrower’s ICR noted
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that physical availability of the task team leader (TTL) at the country office made consultation easier, which the GoK considers one of the reasons for the successful implementation of the project.
96. The Bank was responsive and took necessary actions for emerging issues and changing needs. While the AF and restructuring were undertaken to achieve the original project target, adjustment of the financing arrangement was accepted to respond to prolonged counterpart funding issues. These actions helped the project be concluded with the completion of most activities, attaining the primary project objectives. The Bank’s leadership among development partners in the transport sector was also noteworthy, bringing other financiers on board, such as the NDF, EIB, and AFD to fill the financial gaps and increase the coordination. Regular joint missions and joint ‘no objections’ organized and issued with the AFD are noted as good examples of efficient coordinated supervision.
97. Nonetheless, the M&E implementation was rated Moderately Satisfactory. The Bank should have been more proactive to improve the situation and ensure the quality of outputs, understanding that this was the first attempt to utilize the university as an M&E consultant in a large-scale investment project. Implementation of the RSGIAP was mostly carried out but key monitoring indictors were not fully reported. As stated in section 2.3, inconsistency in the monitoring of agreed indicators was also observed in ISRs and Aide Memoires.
98. Regardless of shortcomings in project design and the M&E, overall supervision, which managed this complex and large-scale project to conclude successfully as discussed in section 3.2, is rated Moderately Satisfactory on balance.
(c) Justification of Rating for Overall Bank Performance
99. As described above, overall Bank performance is rated Moderately Satisfactory.
5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory
100. The GoK was committed to the transport sector reform and supportive to the project throughout the project life, including the AF and restructuring, and executed more than what was envisaged at appraisal. To manage this complex project, the POC was established. Regular quarterly joint meeting with the IAs and the appointment of a project coordinator were key factors for successful project implementation. The GoK’s commitment to the transport sector reform is demonstrated in the number of acts enacted, policies adopted, and authorities newly established or reformed with the direct and indirect support from the NCTIP. Despite the fact that the introduction of RSGIAP and other anti-corruption measures were additional heavy tasks assigned to the GoK after the project approval, the GoK implemented most of actions satisfactorily, resulting in increased and long term transparency and accountability in the road sub-sector. All authorities established are functional though some are still facing challenges in securing resources. Specifically, establishment of KeNHA, making KAA and KCAA financially autonomous and the institutional enhancement of these three IAs are notable.
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101. Nonetheless, inadequate counterpart funding was a serious issue that adversely affected the implementation of the project and increased the total project cost. Through a number of discussions, the National Treasury issued guidelines on budgets of donor-funded projects in September 2015, and the disbursement of funds and payments to contactors resumed in December 2015. Although the NCTIP has already been closed, this action will be a significant contribution to other ongoing and future projects to avoid unnecessary delays and accrual of interest. The limited capacity of staffing and frequent transfer of accountants at the line ministry also affected the efficiency of project operation.
(b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory
102. PTT was set up in each IA and joint coordination meetings were organized regularly to monitor the project progress. The MoTC, KAA, and KCAA did not have previous experience in implementing Bank financed projects but they have learned the Bank procedures during project implementation with support from the fiduciary team of the Bank. For most part, compliance with environmental and social safeguards, as well as procurement was largely satisfactory throughout project implementation. The immediate response of KAA to the restoration of operations at JKIA in August 2013 after a major fire that destroyed part of the airport, successful execution of 419.3 km of road rehabilitation and construction at closure by the newly established KeNHA, and KCAA’s fulfillment of security requirement for CAT1 are significant samples of demonstrating the positive results of institutional enhancement and reform under the NCTIP. Coordination and communication among the IAs were smooth, and each subsector had a better idea on the benefit of having an integrated transport approach through the implementation of the NCTIP.
103. The change of the project leader of the PTT (road sub sector) without informing the Bank was noted but the Legal Agreement was reconfirmed without such an issue recurring. The road subsector encountered challenges such as cost overruns, poor performance of contractors, and so on, which were partly the reason for the AF, restructuring, and extension of the project closing date. The IAs’ coordination with the M&E consultant was not clear though the IAs has monitored the progress and collected data of quality independently.
104. Completion of most activities of the NCTIP at closure, establishing new authorities, experiencing organizational reforms, and coping with post-election violence, rate the performance of IAs as Moderately Satisfactory
(c) Justification of Rating for Overall Borrower Performance
105. As detailed above, overall Borrower Performance is rated Moderately Satisfactory.
6 Lessons Learned
106. The approach of an integrated transport project with good partnership with the government and a well-developed Results Framework can bring constructive results. The GoK mentioned the following positive impacts of NCTIP: improved integration of the transport system, enhanced coordination and inclusiveness of transport sub-sectors. The National Treasury also strongly supports the integrated transport approach to boost
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economic development.
107. Strong ownership of sector reform and institutional development enables successful implementation of a complex project. The NCTIP was implemented in a period that has seen three different government administrations but the GoK demonstrated a strong commitment to the project and made considerable progress in sector reform and institutional development, such as policy development and enactment of Road Act, establishment of road authorities and a maritime authority, enhancement of road sector agencies, restructuring of civil aviation authorities, and implementation of governance action plans.
108. A TTL assigned in the country office supports smooth implementation of complex project and enhances coordination with the government counterparts. The NCTIP was led by TTLs assigned in the country office, which allowed TTLs to deepen their understanding of the transport sector in the country and enabled counterparts to communicate and consult with the Bank team on a daily basis.
109. Close inter-agency coordination with a project coordinator concedes smooth implementation of complicated project. The NCTIP was composed of multiple subsectors of transport, but all implementation agencies commented that project coordination was smooth. Quarterly inter-government project meetings and the project coordinator were identified as the key factors of smooth coordination of this complex project.
110. A sound analysis to determine a realistic project duration is essential when the project supports sector reform and institutional development. The NCTIP supported large-scale infrastructure development but significant weight was also given to the transport sector reform. To develop the sector reform to a sustainable level, the project needed extensions through the AF and restructuring.
111. Securing the budget for the donor-funded projects by the National Treasury helps smooth implementation. Inadequate counterpart funding was a serious challenge of the NCTIP. With the issuance of a guidance note on donor-funded projects from the National Treasury in September 2015, disbursement of funds and payments to contactors resumed in December 2015. Therefore, for on-going and future projects, it is important for the GoK to ensure the enforcement of the guidance note and for the Bank to monitor closely through maintaining coordination with the National Treasury.
112. Sector-wide support by INT can bring long term transparency and accountability in Transport sector. The NCTIP received numerous supports from INT and implemented various activities to increase transparency and accountability in the road sub- sector. As a result, annual/5-year road investment plans are disclosed to the public, construction companies are registered, corruption-reporting system becomes available, all road works under the Road Authorities are procured under open tender, and the number of qualified bids has been increased with competitive offer, some of which are below the engineers’ estimates.
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7 Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/Implementing Agencies
113. The GoK has prepared the Borrower’s ICR and provided comments on the draft ICR, both of which are found in annex 7.
(b) Co-Financiers - Not Applicable
(c) Other Partners and Stakeholders
114. The draft report was shared with the parallel financiers, NDF and AFD for their comments. The NDF and AFD thanked the Bank for sharing the draft report and informed that they had neither specific questions nor comments on the report. The AFD also expressed their gratitude to the Bank’s project team for the quality of collaboration in the implementation of Component F.
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Annex 1. Project Costs and Financing
(a) Project Cost by Component (in USD million equivalent) Additional Actual/ Appraisal Latest % Finance Latest Latest % Estimate of Estimate Estimate of (US$ Revised Components (US$ (US$ Appraisal millions) Estimate millions) millions) A. Rehabilitation of the Northern 190.46 546.86 750.78 394 137 Road Corridor B. Socio-Economic Enhancement, Roadside Amenities and HIV/AIDS 4.35 3.78 0*** 0 0 Mitigation. C. Private Sector Participation in Road Management and 10.66 16.54 2.60 24 16 D.Maintenance. Road Safety Improvement 4.96 4.97 0*** 0 0 E. Institutional Strengthening in the 10.36 35.88 32.43 313 90 Roads Sector and Technical AssistanceProject operating costs(MoTI)* 1.1 1.1 - - - F. Support to the KAA 41.91 297.90** 246.27 588 121 G. Support to the KCAA 10.21 10.31 9.26 91 90 H. Support to the MoTI 2.48 2.49 2.36 95 95 Total Project Cost 276.49 919.83 1043.71 377 113 Note: *Project operating costs for Component A, B, C, D and E are available in an aggregated manner only. ** No AF from IDA. The cost includes parallel finance and GoK’s own contributions *** Actual estimates for Component B and D are included under Component A. (b) Financing
Revised Actual/ Appraisal Revised Latest Estimate Latest Latest % Source of Type of Estimate Estimate at % of at the Estimate of Funds Funding (US$ Restructuring Revised AF (US$ (US$ Appraisal millions) (US$ million) Estimate millions) millions) Counterpart Borrower 54.26 340.64 225.00 430.76 794 191 Funding IDA Credit 207.00 460.00 460.00 491.35 237 107 NDF Loan 15.23 19.19 19.00 28.93 190 152 EIB Loan 0.00 70.00* 93.00 0.00 n.a. 0 Others** Loan 0.00 30.00 30.00 0.00 n.a. 0 AFD Loan 0.00 0.00 93.00 92.67 n.a. 100 Total 276.49 919.83 920.00 1043.71 377 113 Note: *under appraisal, **Others includes Kenya Local Bank and other financiers
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Annex 2. Outputs by Component Annex 2a. Outputs of Project Components Table 2.1. Summary of outputs by component Component Description Outputs Achieved Original Additional Financing Original Additional Financing A. Rehabilitation of the Northern Corridor. Rehabilitation of Rehabilitation of infrastructure The following road sections (total 419.3 km (including 41.4 km dual carriage)) have infrastructure and provision of and provision of services for the been completed and handed over to the GoK: (a) Maji ya Chumvi - Miritini (35 km, (5 services for the improvement improvement of approximately km of which is dual carriageway)); (b) Sultan Hamud-Machakos Turnoff (55 km); (c) of approximately 373 km of 383 km of roads in selected Machakos Turn off-JKIA (33 km (12 km of which dual carriageway)); (d) Lanet-Njoro roads in selected sections sections along the Northern Turnoff (dual carriageway 16 km); (e) Njoro Turnoff-Timboroa (84 km); (f) Mau along the Northern Corridor, Corridor. Summit-Kericho (57 km); (g) Kericho-Nyamasaria (76 km); and (h) Nyamasaria- including construction of Kisumu Airport-Kisian section (total 21.9 km (8.4 km of which dual carriage)). approximately 8 km of roads connecting the old Embakasi Airport terminal to Nairobi- Mombasa highway. Rehabilitation and repair of roads, The main buildings works at Oyugis office and two Homa Bay offices bridges, buildings, and other are completed and in use while KeNHA regional office (new office public infrastructure damaged or building) in Kisumu is also completed. Rehabilitation of KeNHA destroyed by floods or the events regional office in Kisumu is completed and in use. Road and bridges at of the December 2007 post- Kisian-Busia road sections were also rehabilitated with the GoK fund. election crisis. Replacement of public equipment Completed. and vehicles destroyed during the December 2007 post-election crisis. Implementation of the mitigation measures specified in the EIA and For the most part, compliance with both environmental and social safeguards was provision of support to PAPs including provision of support for largely satisfactorily throughout the project implementation. KeNHA has not yet resettlement activities and compensation. prepared a RAP Completion Report.
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B. Socio-Economic Enhancement, Roadside Amenities and HIV/AIDS Mitigation. Construction of facilities to enhance the socio-economic impact on (a) Roadside Amenities: A lorry park at Sultan Hamud-Machakos Junction, a market at local communities and improve safety of road users, including bus Taru, a community center at Chepseon, and five schools in Taru, Mlolongo, and and truck stops, parking areas, utilities, merchandise booths for use Kisumu airport have been constructed under the project. Footpaths as Non-Motorized by local communities, bicycle paths, and pedestrian sidewalks. Transport (NMT) Facilities have been constructed in the road sections in the urban centers of Kisumu and Nakuru. (Total length of footpaths is 24.8 km). A lorry park at Nyamasaria and a market at Awasi are currently under construction and expected to be completed by the end of May 2016. Development and implementation of measures to mitigate effects (b) HIV/AIDS mitigation: Implementation of this activity involves two dimensions: (i) of HIV/AIDS, including awareness and information dissemination, measures aimed at project workers for whom the contracts provide such items as distribution of condoms, strengthening of local health centers, condoms, educational pamphlet and awareness raising through experts to help facilitation of voluntary testing and counseling including disseminate information; and (ii) a second tier intervention including truck drivers and construction of kiosks for these purposes, and provision of support other stakeholders operating along the Northern Corridor. Implementation of first to infected and affected people. dimension has proceeded well, all work contractors under the project received support from a local non-governmental organization (NGO) which is registered and recognized by the National Aids Control Council to conduct awareness, education and information on HIV/AIDS targeting the workers, truck drivers and local community members including setting up of VCT centers. C. Private Sector Participation in Road Management and Maintenance. Provision of technical advisory services for the preparation of bid Both activities under Component C were cancelled without completion. However, documents for and facilitation of the concessioning of selected road positive impacts of the project on the involvement of private sectors in road sections of the Northern Corridor; and performance-based management and maintenance are observed. maintenance of approximately 300 km of selected roads by the (a) (Completed) One segment of the Northern Corridor was offered for concession to private sector. the private sector (target achieved), but financial closure was not concluded and as a result, the process was terminated. There is no toll road in Kenya yet. The concept of concession of road segments to the private sector was also new in Kenya. It was concluded that the regulatory framework to embrace the involvement of private sector in the management, financing, operation and maintenance of road assets would be necessary. PPP Act was enacted in 2013 and the PPP unit was established under section 8 of the act as the special purpose unit within the NT.
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(b) The process was cancelled due to the receipt of nonresponsive bids. The concept of performance-based contract was new to Kenya when the bids were invited and it was not well understood by potential bidders. Although the process under the project was cancelled, KeNHA worked with assistance under the project and carried out sensitization on long-term performance based road maintenance contracting, through a workshop for consultants and contractors. The concept has been accepted in Kenya and maintenance of any new road constructed will be under the performance-based contract. Currently there are 39 long-term performance based contracts awarded and under implementation. D. Road Safety Improvement. Improvement of safety conditions in selected locations along the National Road Safety Program (NRSP) was developed and adopted by the GoK during Northern Corridor, including carrying out of a road safety and the first phase of project. With the establishment of the NTSA in 2012, the awareness campaign, construction of approximately 5 children’s implementation of the NRSP has been undertaken by the NTSA. The procurement of traffic safety parks, rehabilitation of about 5 existing children’s information and communications technologies (ICT) equipment for institutional traffic safety parks, and improvement of safety conditions of capacity building has been completed. NTSA has carried out countrywide road safety hazardous locations. education, public awareness campaign. But the authority is facing financial and human resource challenges to conduct road audit. The NTSA is currently collecting road accident data for entire country from the police and reporting it on their website daily. The NTSA also analyzes and summarizes the road safety statistics annually. Safety Park. With the establishment of KURA, this activity was transferred to KURA. The authority has continued to manage the parks and currently there are six (6) parks in operation in: Nairobi, Nyeri, Embu, Kisumu, Kisii and Kakamega. The authority is currently rehabilitating Kisii Children’s Traffic Park. An additional park is also being established in Nairobi at the junction of Outer Ring Road/Kangundo Road under the ongoing Outer Ring Road expansion project financed by the government and AfDB. The number of fatalities related to road accidents in 2015 was 3,057. The target of the project was to reduce the total number of fatalities by10% between 2004 and 2015. Although this target has not been achieved, fatalities per 100,000 have reduced from 8.31in 2008 to 6.4in 2015.
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E. Institutional Strengthening in the Roads Sector and Technical Assistance. Establishment and Road Authorities. The Kenya Roads Act was enacted in 2007 and enabled the strengthening of KeNHA creation of three road authorities: KeNHA, KURA, and KeRRA in 2008. Equipment through provision of technical purchase, vehicle acquisition, and consultant service for the construction supervision, advisory services. and feasibility studies were provided. With this reform in the road sector, the ministry can focus on policy formulation and oversight and road authorities can focus on the implementation of programs and projects. KeNHA is currently composed of 6 departments, 10 regional offices, and 487 staff according to the annual report of 2014/15. KeNHA prepares an annual work program and submits it to the KRB, which in turn prepares and publishes Annual Public Road Programme (APRPs) that consolidate the annual work program of the three road agencies. Strengthening the KRB Strengthening the capacity of the KRB: All four studies have been completed. (a) Road User Charges Study, (b) Road including reforming its KRB and reforming its mandate Inventory/Road Reclassification Study, covering 160,886 km of roads, (c) Road mandate through carrying out through carrying out of studies Sector Investment Program (RSIP), and (d) Transport Sector Indictor Framework of studies and reviews and and reviews, and provision of Study. Road classification has been published in the national gazette in January 2016. provision of technical technical advisory services and The RSIP is under implementation with a 5-year detailed program. Second phase of advisory services and training. the 5-year program (2015–19) is under preparation. In addition to RSIP, APRPs are training. also disclosed on their website. Designing Kibwezi-Kitui- Conducting feasibility studies and Feasibility Studies: All the feasibility and detailed engineering design studies on Mwingi-Maua-Isiolo road designing of the (a) Kibwezi- selected road sections have been completed. (a) three sections along the Kenya- corridor. Kitui-Mwingi- Maua-Isiolo road South Sudan Road, which will now be reconstructed with financing under the Bank- Designing an alternative route corridor; (b) the alternative route financed EATTEDP, (b) Kibwezi-Kitui-Mwingi-Maua-Isiolo, (c) Narok-Nothern linking northern Tanzania to linking northern Tanzania to Lakeside Tanzania, and (d) Mombasa Southern Bypass, which is now funded by JICA Narok in the territory of the Narok in the territory of the for construction. Borrower, and designing the Recipient; (c) the Sudan link road; widening of the access road to (d) the access road to the Moi the Moi International Airport international airport, Mombasa; in Mombasa. and (e) the Mombasa By pass. Carrying out of feasibility and sector studies for the transport sector including the Mombasa Bypass study.
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Preparation of a ten-year Preparing a ten-year national The development of a 50 year transport master plan including a 10 year investment national transportation transportation development plan. plan is delayed due to poor performance by the consultant. MoTI hired a team of development plan. experts to review the draft plan prepared by the consultant but the result was not positive. The GoK is currently internally discussing the way forward. Carrying out several transport IDA funds were reallocated and the activity is financed under sector studies including an urban NUTRIP. transport study for Nairobi. Strengthening the Department Strengthening and building the Training. Acquiring critical equipment for these departments and organizations has of Materials Research and capacity of the Roads Department, been completed. Development at MORPWH Materials Research and EBK: The reform of the ERB was effected through: (a) the repeal of the Engineers and External Resources Development Department, Registration Act (1969) and the enactment of the Engineers Act 2011. The EBK was Department of the Ministry of KeNHA, KeRRA, KURA, KRB, created through the newly enacted act in 2011 to widen the mandate of the EBK to Finance. Mechanical and Transport oversee and regulate the standards in the engineering profession and building capacity Capacity building for Department, Kenya Institute of for individual engineers and engineering firms. Currently there are 32 accredited MORPWH, NHA, the Highways and Building programs in 6 universities in Kenya. The biggest challenge for the EBK is the External Resources Technology, Engineers availability of funds to sustain the organization. Department of the Ministry of Registration Board (ERB) and Finance and KRB in associated institutions; the management and financing of External Resources Department roads including axle load State Law Office, Department of monitoring and control. Government Investments and Public Enterprises, and the Institution of Engineers of Kenya through provision of equipment, training and technical advisory services. Monitoring, evaluation, and Monitoring, evaluating and The consulting division of the University of Nairobi Enterprises and Services (UNES) impact assessment of the conducting of impact assessment was awarded the task of Monitoring and Evaluation for the project. However, Project. of the Project including reviewing submission of reports were delayed and the final draft report initially covered the of ongoing and recently completed period up to 2013 only and M&E results for 2014 and 2015 were missing. In addition, contracts for compliance with the several indicators adopted under the Results Framework of the project are not included relevant contractual requirements. in the report yet. The revised final version was submitted on March 30, 2016. Although the approach to support the enhancement of research capacity of local academia was innovative, it was observed that there was confusion for the UNES in
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understanding their role as a consultant as well as specific tasks assigned for this M&E. Establishing and building the The NCA was established in 2011 through the enactment of the NCA capacity of the National Act 2011 to regulate, streamline, and build capacity in the construction Construction Authority (NCA). industry. The act has outlined 14 functions for the NCA and it is already executing all the functions, focusing on contractor registration, contractor training, and quality assurance with a total of 78 staff. The revenue of the NCA comprises: (a) a budget from the GoK, (b)
registration fee, (c) annual renewal fee, (d) levy of civil works contracts, and (e) training fee. For the period 2015–20, NCA’s planned budget is KSh 27 billion and it is estimated that KSh 16–17 billion is secured from the national budget. The NCA is currently preparing the financial report for 2014/15 and annual report 2014/15 is expected to be published in April 2016. Establishing a system in KeNHA After the discussions, the Road Disaster Management and Response for responding to and managing Unit has been established under MoTI (Road Department), not disasters requiring emergency KeNHA, and functions as a committee comprising representatives road works and other related from road authorities when a disaster occurs. It works with the
materials. National Disaster Operational Center and is a member of the task force. The unit procures materials and equipment for disaster response. Although the unit was established, no budget has been allocated yet and the term contract was not advertised. F. Support to the Kenya Airports Authority. Provision of support to KAA to improve aviation security, safety, and operations at major airports through acquisition of equipment and vehicles; carrying out of civil works; provision of technical advisory service, and training, including: Rehabilitation and Expansion of the JKIA through its reconfiguration of old reconfiguration and construction Apron extension taxiways Unit 4 terminal building and car park of JKIA have been Embakasi Airport terminal of a new unit. completed. The EIB cancelled the finance for the design and remodeling of Terminals and the main terminal at Jomo 1-B, C, and D because of delay of the process. There was delay in the process and also Kenyatta International Airport because of the fire at the arrival hall of JKIA in 2013, the entire airport layout had to (JKIA) and construction of be reviewed. The government will finance this activity and possibly with the support the road linking the two from development partners. terminals.
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Installation of fencing, Installation of fencing, lighting, Significant security improvement at JKIA was achieved by completing the security lighting, and surveillance and surveillance systems at JKIA, fence, enhancement of screening by use of X-ray screening machines and separation of systems at JKIA, Moi Moi international airport, Wilson arriving and departing passengers. As a result, the ICAO security audit of October International Airport, Wilson airport, and Kisumu airport. 2015, scored Kenya, KCAA and KAA 88 percent rate, against a cut off of 80% for Airport, Kisumu Airport, CAT1 certification. Malindi Airport, and Ukunda For Kisumu and Moi Airports, the project supported the purchase of materials for Airport. fencing. Rehabilitation of and Rehabilitation and reconfiguration A new terminal building was constructed instead of rehabilitation of the old building. reconfiguration of terminal of terminal buildings at Kisumu The runway rehabilitated and extended, and an access road and parking area at Kisumu buildings at Kisumu and and Wilson airports, and Airport constructed. Renovation and upgrading of security at Wilson Airport: Wilson Airports, and rehabilitation and extension of the feasibility study was completed but the KAA faced challenges as part of the airport rehabilitation and extension of runway at Kisumu airport. land was acquired for private development thereby constraining the expansion and the runway at Kisumu location of a new terminal building. In addition, due to the increased demand of Airport. facility improvement in other national airports, priority of the KAA has changed. As the result, the GoK requested for reallocation of IDA funds for this activity toward the expansion of JKIA, which was done under restructuring of the project. Enhancing aviation security Enhancing aviation security and Transport Safety Authority of the United States cleared direct flights to/from U.S. and safety, flight information safety, flight information system, airports to JKIA in 2009, though an official certificate has not been issued. Delta system, search and rescue search and rescue capacity, Airlines was supposed to have the maiden flight and the Minister of Transport of capacity, communications, communications, and emergency Kenya was invited to join the first flight in 2009. However, because of the emerging and emergency operations operations centers at JKIA, Moi security concerns and terrorist threats in the region attributed to Somali-based Al centers at JKIA, Moi international airport, Wilson Shabaab direct flights were put in abeyance. The funds allocated for the following International Airport, Wilson airport, and Kisumu airport. activities were reallocated to the JKIA expansion: (a) security perimeter lighting and Airport, and Kisumu Airport. detection at four airports, (b) security and communication equipment and vehicles at four airports, and (c) support emergency operation centers. Capacity building for staff in Capacity building for staff in A total of 171 staff attended the overseas and/or domestic training program between airports operations security airports operations, security, and 2007 and 2015. and management. management. G. Support to the Kenya Civil Aviation Authority (KCAA). Development and implementation of reforms at KCAA aimed at The KCAA engaged with a human resource consultant to conduct a study on the enhancing aviation safety and security oversight, and safety institutional reforms to be implemented. The revenues of the KCAA have been tripled inspection through provision of technical advisory services and between 2004 and 2015, which allows the KCAA to recruit more inspectors. Number training. of airworthiness inspectors and flight operations inspectors increased from 3 to 18 and 1 to 16, respectively. It is expected that the KCAA can obtain the IASA CAT1 in the next audit in 2016.
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Provision of support to Provision of support to KCAA Air traffic control training school of aviation simulator, laboratory equipment for KCAA and EASA through and EASA through acquisition of telecommunications engineering, test and measurement equipment, two generators, air acquisition of training and training and operations equipment. conditioners, search and rescue equipment, and library books were purchased. A operations equipment Trainer Plus Program was implemented. The EASA enhanced its capacity and is now including equipment for accredited by the ICAO as a regional training center of excellence. Such centers exist accident investigation only in South Africa and Kenya, in Africa, and in 14 other locations in the rest of the laboratory. world. Implementation of GNSS- Provision of technical advisory Implementation of GNSS procedures was completed for six airports (Kisumu, Malindi, GPS enroute and approach services to use the global Lokichoggio, Lamu, Nanyuki, and Ol Kiombo Airports) and ICT systems were procedures through provision navigation satellite system and installed and in use, improving approach and departure procedures allowing aircrafts to of technical advisory services. global positioning system to repair fly more directly which saves fuel costs at these airports and enhances safety in the approach navigation charts for airspace. selected airports. Carrying out of training of trainers in airworthiness inspection, This was completed as follows (a) flight inspection staff were provided for 3 years to flight operations inspection, personnel licensing and security fill the shortfall at KCAA; (b) safety regulations, technical guidance materials, on-the- oversight. job training program and manuals for inspections and audits were developed and in use; (c) inspector’s guidance materials were prepared and in use; (d) a database has been established containing information on registration of aviation personnel, aircraft, Aircraft Maintenance Organization (AMO) and air operators; (e) a strategic plan for East Africa School of Aviation (EASA) was prepared and is under implementation; (f) on-the-job training was conducted using the developed materials; and (g) a human resources and financial restructuring study was carried out, which formed the basis for the proposed restructuring of the KCAA
H. Support to the Ministry of Transport and Infrastructure (MoTI). Capacity building for MoTC Building the capacity of MoTI in The procurement of computers and other ICT equipment and installation has been in procurement, Project procurement, project management, completed. This activity included the support of digitization of human resource records management, financial financial management; in the ministry. The Traffic Act has been reviewed to ensure that it conforms to management; implementation implementation of the national international transport conventions including the Northern Corridor Transit of the national transportation transportation policy and maritime Agreement. The implementation of the National Transport Policy has enhanced road policy and maritime law; and law; and compliance with safety, improved compliance with international road safety levels, and improved compliance with conventions conventions of the International efficiency and smooth operations in the Public Service Vehicle industry due to of the International Maritime Maritime Organization. behavioral change of the players. The training curriculum for driving schools has been Organization; establishment developed and approval from the Minister of Transport and Infrastructure is awaited.
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and strengthening of the Strengthening the capacity of the The project supported the establishment of a new maritime administration, the Kenya Maritime Authority; assisting Kenya Maritime Authority Maritime Authority (KMA), which was set up in June 2004 as the semi-autonomous the GoK to comply with the through provision of technical agency in charge of regulatory oversight of the Kenyan maritime industry. Northern Corridor Transit advisory services, training, and Procurement and installation of a local area network and computers at the KMA Agreement; and provision of acquisition of equipment. headquarters has been completed. support to Bandari College, Assisting the GoK to comply with through provision of technical the Northern Corridor Transit Kenya is one of the compliant member states on the NCTTA provisions. advisory services and Agreement through training and training, and acquisition of technical advisory services. equipment. Provision of support to Bandari Procurement of navigation bridge simulator software and ICT equipment and cabling College, through provision of of the training room for Bandari College has been completed. Bandari College is now technical advisory services, one of the four accredited institutions for maritime education and training in Kenya. training, and acquisition of Kenya is already listed among the white list countries based on proper implementation equipment. of the International Convention on Standards of Training, Certification, and Watch keeping for Seafarers of 1995.
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Annex 2b. Outputs of Project Components Table 2.2. Achievement by outcome and intermediate indicators PDO Outcome Indicators Original AF/ Restructuring Original AF Restructuring Actual Percent Targets Values Achieved 1. Increase the efficiency of road transport Travel time by road from Mombasa to Malaba and 25% 15% 61% Busia reduced by 25 percent 2. Enhance aviation safety and security to meet (a) KCAA is cleared as category 1 safety status under CAT 1 Not obtained 0%25 international standards the IASA of the US FAA clearance but met the obtained requirements
(b) JKIA in Nairobi is cleared by the US TSA for direct Direct Direct flight 100% flights to/from United States airports flight cleared cleared 3. Promote private sector participation in the (c) One long term performance based road management 100% 100%+ 100%+ management, financing, and maintenance of road and maintenance contract awarded to the private sector assets and is effectively under implementation (d) One road segment along the Northern Corridor 100% 100% 100% offered for concession to the private sector 4. Restore vital Vital public infrastructure and assets 100% 100% 100% infrastructure and public destroyed or damaged during the post- assets damaged as a result election crisis are restored and functional of the 2007 post-election again crisis
Intermediate Results / One per component Results indicators for each component Original AF/ Restructuring Original AF Restructuring Component A Contracts awarded Contracts awarded and Average roughness less than International Roughness 100% 100% 100% and construction construction satisfactory Index (IRI) 3.0 m/km on completed sections of the
25 Since the CAT1 clearance has not been obtained officially yet, it is considered that the project has not achieved the target. However, please note that the KCAA and KAA have met all the requirements to obtain CAT1.
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satisfactory on 373 on 381 km of selected project roads km of selected priority road sections priority road along the Northern sections along the Corridor Northern Corridor and 8 km of the Airport North Road Damaged or destroyed (a) 3 bridges (a) Not mentioned in assets restored repaired and restructuring paper functional (b) 3 public (b) 3 public buildings buildings restored restored and 3 4 100%+ and functional functional (c) 3 term contracts (c) 3 term contracts awarded for awarded for disaster 3 0 0% disaster response response readiness readiness Component B (a) Effective functioning of bus and truck stops at (a) At least three roadside stations and amenities 3 >3 100% + key locations and satisfactory construction and constructed and functional as per designs and serving utilization of booths for sale of local produce and road users and local communities products by roadside communities (b) At least 70% of road users and local persons (b) Health kiosks constructed and HIV/AIDS surveyed become aware of or make use of the 70% 100% 100% + awareness campaigns undertaken at key locations Voluntary Counseling and Testing (VCT) and other along the Northern Corridor facilities for the HIV/AIDS campaign along the Northern Corridor Component C Private Sector involved in road management and Legislation enacted for private sector participation in 100% 100% 100% maintenance roads Component D Road safety improved At least 10% reduction in road related fatalities per 2,700 3,057 0% annum
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Component E Management and governance improved in the (a) KeNHA established and fully functional KeNHA KeNHA 100% road sector established established (b) All feasibility and design studies carried out satisfactorily 100% 100% 100% (c) Timely public disclosure of national Plan Plan 100% program and business opportunities in the disclosed disclosed road sector (d) NCA established and functioning NCA NCA 100% satisfactorily established established (e) Governance and Integrity Action Plan 100% mostly substantial implemented satisfactorily* implemented (f) User perception and satisfaction >75% improved in the road sector* satisfaction not assessed n.a. Component F Security improved at major airports JKIA meets ICAO and USA TSA security 100% 100% 100% requirements. Capacity at JKIA expanded (a) Annual passengers handled at JKIA 6.4 6.4 100% increased from 4.8 million in 2007 to 6.4 million in 2012 (b) Cargo by air handled at JKIA increased from 278,000 tons in 2007 to 383,000 260,000 0% 383,000 tons in 2012 Component G Aviation safety and air navigation standards KCAA meets ICAO and USA FAA Category 1 safety 100% 100% 100% improved requirements Component H Compliance with IMO conventions and NCTTCA IMO and NCTTCA certify compliance 100% 100% 100% treaty
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Annex 2c. Detailed Narrative Summary of Achievement of Project Development Objectives
PDO1. Increase the Efficiency of Road Transport Rating: Substantial
1. The project has substantially achieved first PDO by rehabilitating total 419.3 km of the Northern Corridor satisfactorily, constructing road side amenities, reducing road related fatalities, establishing and enhancing KeNHA, and increasing transparency and accountability in road sub-sector.
2. The outcome indicator for the first objective, “freight and passenger travel time by road from Mombasa to Malaba reduced by 25 percent” was 60 percent achieved by the project closing with 15 percent lower travel time than the baseline. While a 25 percent reduction in travel time between Mombasa and Malaba was recorded in ISR Sequence 12, in December 2009 after the completion of Maji Ya Chumi- Miritini (40 km) and Lanet- Njoro Turnoff (dual 16 km) road sections, 2014 and 2015 travel time data obtained from the NCTTCA and UNES indicate the travel time decreased to 15 percent by the project closing. The increased traffic volume along the project roads, particularly in Nairobi as shown in table 2.3, and on-going maintenance works in other sections of the Northern Corridor are the most likely explanation for the increase26.
Table 2.3: Traffic Survey Result in Nairobi Survey/Year 2004 2013 Cordon line survey (total vehicles in 24 hours) 121,000 205,000 Screen line survey (total vehicles in 24 hours) 251,728 418,885 Source: Integrated Urban Development Master Plan for the City of Nairobi (final report, appendix III), December 2014, JICA
3. Seven original intermediate indicators and two revised intermediate indicators were achieved satisfactorily. From the total length of 419.3km rehabilitated road, 389km exceeds the target average roughness of less than IRI 3.0 as indicated in table 2.427 . The newly established KeNHA, KURA, and KeRRA are all functional against the target of establishment of one national highways authority. All planned feasibility and detailed engineering design studies on selected road sections, have been completed and implementation of Mombasa Southern Bypass is financed by JICA, and the design of Lesseru-Nadapal/Nakodok Road has accelerated the preparation of the Eastern Africa Regional Transport, Trade and Development Facilitation Project (P148853).
4. The newly established NCA is functional and the NCTIP meets the target of ‘timely public disclosure of road sector program’ through the publication of the Road Sector Investment Program (RSIP), and Annual Public Road Programs (APRP) by KRB. All road works under the Roads Authorities are procured under open tender. The total number of road related fatalities in Kenya has not been reduced but analysis prepared by the NTSA shows that fatalities per 100,000 people have been reduced by 23 percent from 8.31 in 2008
26 BBC also reported heavy traffic jam stretching for 50 km (30 miles) on the highway between Mombasa and Nairobi on November 19, 2015. 27 The road section of Nyamasaria-Kisumu Airport-Kisian (21.9 km, (8.4 km of which is dual carriageway), total 30.3km) was handed over to the GoK in March 2016 and the IRI data for this section is not yet available.
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to 6.4 in 2015. Two intermediate indicator related to social aspects also met the targets. In addition, Kenya became one of the compliant Member States on Northern Corridor Transit and Transport Agreement provisions.
Table 2.4. Average IRI score by road section IRI Section IRI (2013, 2015) (2003) 1. Maji ya Chumvi - Miritini (35 km, 5 km of which is dual carriageway) 6.4 2.6 2. Sultan Hamud-Machakos Turnoff (55 km) 3.2-3.9 1.8 3. Machakos Turn off-JKIA (33 km, 12 km of which is dual carriageway) 4.0-4.6 1.9 4. Lanet-Njoro Turnoff (dual carriageway 16 km) 3.2-3.3 2.0 5. Njoro Turnoff-Timboroa (84 km) 6.4-6.6 2.2 6. Mau Summit-Kericho (57 km) 4.8 2.2 7. Kericho-Nyamasaria (76 km) 4.8-5.8 2.7 8. Nyamasaria-Kisumu Airport-Kisian (21.9 km, 4.8 Not yet measured as this 8.4 km of which is dual carriageway) section was handed over to GoK in the end of March 2016. Total Average n.a. 2.2 Source: PAD and maintenance data of KeNHA
5. There are other benefits of the project Map 1. Concentration of Urban Population which are associated with PDO1 and along the Northern Corridor worth mentioning:
6. The NCTIP rehabilitated and improved a total of 419.3 km (including 41.4 km of dual carriage) of roads, exceeding the revised target of 383 km listed in the Financing Agreement by 36 km. The GoK’s contribution to the road works was planned at US$42.63 million at entry but it was increased to US$126.12 million at the AF, and US$307.94 million at closure. In addition to the improvement of IRI scores as stated above, the NCTTCA also reported that the road condition
Northern Corridor between Mombasa and Malaba is either ‘Excellent’ or ‘Good’ in 2015, which was rated only ‘Poor’ to ‘Good’ in 2009. The Northern Corridor runs from Mombasa Sea Port through Kenya and Uganda to Kigali in Rwanda, Bujumbura in Burundi and to Kisangani in the Democratic Republic of Congo Source: Kenya Urbanization Review, 2016, the World Bank and about 930 km is under the Kenya’s
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jurisdiction. In addition, about 76 percent of urban dwellers in Kenya, which is equivalent to 8.7 million people, are living within 15 km of the Northern Corridor. Therefore, the positive impact of physical improvement of 419.3 km of roads on the efficiency of road transport along the corridor is considerable.
7. Support to the KRB resulted in the completion of inventory/reclassification of 160,886 km of roads which was published in the national gazette in January 201628. This clarifies the responsibility of each road authority, and the inventory data has been used for the enhancement of Strategic Road Asset Management. Establishments of the NTSA, and EBK are also the considerable achievement of NCTIP, enhancing and facilitating the provision of safe, reliable, and efficient road transport in the country.
8. Outcome indicator of PDO1 has not been fully achieved but there should have been more PDO indicators to assess the first PDO adequately. Attainment level of intermediate indicators is reasonably high. In addition, considerable benefits of the project related to PDO1 are observed and overall project contribution to the road sector is remarkable. Therefore, achievement of PDO1 is rated Substantial.
PDO2. Enhance Aviation Safety and Security to Meet International Standards Rating: Substantial
9. The second PDO, ‘Enhance Aviation Safety and Security to Meet International Standards’ was substantially achieved. The CAT1 certification is expected to be obtained later in 2016 due to the considerable improvements in aviation safety and security.
10. The highest accomplishment in the aviation subsector under the NCTIP was the security clearance from the TSA, which allows U.S. airlines to operate direct flights from/to JKIA, one of the PDO2 outcome indicators. Such a measure is yet to be implemented due to security conditions in the East Africa region, not related to the airport operation itself. In parallel, the KCAA is on track to meet the FAA CAT1 requirement, which is another outcome indicator, through the enhancement of its oversight capacity, especially in the area of safety, with key staff recruited with the required qualifications and in adequate numbers. As a result, the ICAO security audit in October 2015 scored Kenya, the KCAA and KAA a rate of 88 percent, against a cut off rate of 80 percent for CAT1 certification.
11. Achievements of the intermediate indicators for this PDO are as follows: (i) JKIA has met ICAO and USA TSA security requirements by obtaining higher score than cut off rate for CAT1 certification; (ii) the number of passengers handled at JKIA has met the target of 6.4 million in 2014; and (iii) the volume of cargo handled at JKIA has not met the target since it slightly decreased from 278,000 tons in 2007 (baseline) to 260,000 tons in 2014 due to external factors.29
28 Kenya’s Road Network is estimated at 161,451.3km. APRP 2015/16, KRB 29 Business Daily (2013) Chemical ban hits vegetable exports to the EU market, May 2013 http://www.businessdailyafrica.com/Dimethoatel-ban-hits-vegetable-exports-to-the-EU-market--/-/539546/1694416/- /tf5vd1z/-/index.html.
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12. The other key outputs of aviation-related components were: (a) the construction of a new terminal building (Terminal 1A, formerly Terminal 4); (b) the construction of a three- story car park at the airport, increasing its capacity to a total of 1,500 cars and grade parking for 400 cars. The ground floor of the facility is temporarily used as the arrival hall after the fire in 2013 until the opening of a new arrival hall which has been completed; (c) the expansion of the aircraft parking (apron) and taxiways at JKIA, which increased the apron space by 50 percent through the creation of 13 new stands for aircrafts, a fuel hydrant system, and two new taxiways; (d) the upgrading of Kisumu airport into an international airport, which increased the passenger capacity to 500,000; (e) the acquisition of security and safety related equipment (for passengers and luggage screening; an access control system; material for perimeter fencings for major airports; and flight information display systems); (f) enhancement of the EASA, resulting in an ICAO accredited regional training center of excellence as one of 16 training centers in the world; and (g) various feasibility and design studies as well as works supervision contracts.
13. The following key achievements in the aviation sector reform also contributed to the enhancement of aviation security and safety: (a) the creation of an airport security oversight unit which is responsible for monitoring security issues and ensuring compliance with security regulations; (b) the financial autonomy to both the KCAA and KAA which now retain the revenues generated from their operations, which were previously remitted to the government’s general revenue; (c) the improved security monitoring at key airports through transferring the responsibility for passenger, baggage and mail security screening from the police to the KAA; (d) the adoption of harmonized aviation safety and security regulations by each member of the East African Community; and (e) the continuation of the KCAA restructuring through the separation of its oversight functions from service provision activities.
14. The activities under the aviation-related components significantly contributed to improve aviation safety and security, with achievements of one of two PDO outcome indicators and two out of three intermediates indicators. Thus, rating for PDO2 is assessed Substantial.
PDO3. Promote Private Sector Participation in the Management, Financing, and Maintenance of Road Assets Rating: High
15. The third PDO has been clearly achieved through mainstreaming OPRC, and obtaining legal endorsement on private sector participation in management, financing, and maintenance of road assets.
16. The first outcome indicator for the third PDO, ‘awarding of an OPRC’ is considered achieved. The implementation of performance-based contracts is apparent in the increased level of private sector participation in the management and maintenance of road assets over the course of the project. Although the process of the proposed OPRC under the project was canceled, KeNHA and KURA are managing 18 and 21 contracts, respectively30, with the total amount of KSh 794 million (US$7.4 million) in FY15 and FY16, and this approach is
30 According to the information obtained from KRB.
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mainstreamed in road maintenance.
17. Another outcome indicator, offering one road segment of the Northern Corridor for concession, has also achieved the targets. With the approval of the concession contract by the parliament in 2009, this activity was further developed into a pipeline project with a total estimated cost of US$960 million, which was supported by several donors: IDA partial risk guarantee (US$120 million), Multilateral Investments Guarantee Agency (US$120 million), International Finance Corporation (US$115 million), African Development Bank (AfDB) (US$100 million), and IDA (US$100 million). Due to the unfavorable results of due diligence from the Bank group, however, the GoK decided to terminate the process in 2011.
18. The intermediate indicator of PDO3 met the target, too. The project supported the enactment of the Kenya Roads Act 2007 under the institutional reform of the transport sector, and section 53 of the act clearly stated the encouragement of private sector participation in road construction, maintenance, and management. In 2013, the GoK established a Public-Private Partnership (PPP) Unit under the National Treasury through the PPP Act of 2013 and toll road projects for Nairobi Southern Bypass and the Nairobi-Nakuru Highway were included in 71 pipeline projects.
19. Thus, the contribution of the project to PDO3 is extensive even though both processes under the project were canceled. Since PDO indicators and results indicator achieved the targets, rate for PDO3 is High.
PDO4. Restore Vital Infrastructure and Assets Damaged as a result of the 2007 post- election crisis Rating: High
20. PDO4 was to support the post-election recovery program of GoK and assessed accomplished successfully with the achievement of a PDO4 outcome indicator and one of two intermediate indicators: renovation and reconstruction of Oyugis office, Homa Bay office, and Kisumu office of KeNHA have been completed and all offices are in use while the new construction of KeNHA regional office block in Kisumu has also been completed and is in use. In total, four public buildings became functional against the target of three buildings.
21. Another intermediate indicator, ‘awarding of 3 term contracts for disaster response readiness’ has not been achieved though the Road Disaster Management and Response Unit has been established and functions as a committee composed of representatives from road authorities when a disaster occurs. However, since PDO4 is targeting only infrastructure and assets damaged due to the post-election crisis, the accomplishment of this intermediate indicator is irrelevant to the overall achievement of PDO4.
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Annex 2d. Summary of Institutional Change/Strengthening
1. The project supported the transport sector reform and made remarkable contributions to institutional strengthening. Notable results of institutional strengthening under the NCTIP are summarized below:
NCTIP supported the enactment of the Kenya Roads Act 2007 and establishment of three road authorities: KeNHA, KURA, and KeRRA in 2008. With this reform, the ministry can focus on policy formulation and oversight, and road authorities can focus on the implementation of programs and projects; supported MoTI to review the Traffic Act to ensure that it conforms to international transport conventions as well as prepare and adopt an integrated transport policy; supported the establishment and capacity building of the KMA; assisted the KAA to be autonomous and financially independent, which allowed the KAA to retain the revenues generated. The responsibility of security screening was transferred from the police to the KAA; assisted the KCAA to be autonomous and financially independent and enhanced its capacity to comply with international standards and practice; enhanced the capacity of the EASA, which has been accredited by the ICAO as a regional training center of excellence. Such centers exist in Africa only in South Africa and Kenya, and there are only 14 in the rest of the world; supported the establishment of the Road Disaster Management and Response Unit under MoTI (road department), which functions as a committee composed of representatives from road authorities when a disaster occurs; provided assistance for the KRB in conducting the (a) Road User Charges Study, (b) Road Inventory/Road Reclassification Study, covering 160,886 km of roads, (c) Road Sector Investment Program (RSIP), and (d) Transport Sector Indicator Framework Study; supported the establishment and capacity building of the NCA through the enactment of the National Construction Authority Act 2011 to regulate, streamline, and build capacity in the construction industry; supported the reform of the Engineers’ Registration Board and the establishment of the EBK through the repeal of the Engineers Registration Act (1969) and the enactment of the Engineers Act 2011 to widen the mandate of the EBK to oversee and regulate the standards in the engineering profession and build capacity for individual engineers and engineering firms; supported the preparation of a National Road Safety Program and the establishment of the NTSA through Parliament Act Number 33 to facilitate the provision of safe, reliable, and efficient road transport services; provided assistance for the enhancement of maritime training capacity in Bandari College, which became one of the four accredited institutions for maritime education and training in Kenya; and assisted the University of Nairobi, through the M&E assignment, to enhance research capacity and support more than 50 post-graduate students majoring in transport and set up a transport data bank in the university.
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Annex 3. Economic and Financial Analysis
1. This annex summarizes the ex-post economic analysis for the following two components under the original credit and the AF: (i) the rehabilitation and improvement of the Northern Corridor; and (ii) the expansion of JKIA. The road works, with a total length of 419.3 km, and the civil aviation related works account for about 72 percent, and 21 percent of the total project cost, respectively.
3.1 Rehabilitation of the Northern Corridor (Component A)
2. Ex-post economic analysis of the road rehabilitation and improvement under the project was conducted and obtained the following results: (i) the net present value (NPV) of the rehabilitation and improvement program is US$550 million at a 12 percent discount rate; and (ii) the overall economic internal rate of return (EIRR) over 30 years (2004-2033) is 39.1 percent, varying from 13.3 percent to 56.4 percent, depending on road section, as presented in table 3.1.
Table 3.1. Summary of Economic Analysis* PAD AF Ex-Post Section Section Section NPV NPV Length IRR % Length IRR % Length NPV (US$M) IRR % (US$M) (US$M) Road Section (KM) (KM) (KM) 1. Maji ya Chumvi - Miritini 35 13 37 35 49.1 44.0 35 14.1 14.1 18.7 18.7 2. Sultan Hamud-Machakos Turnoff 56.1 48.2 55 13 23 55 36.6 28.0 55 122.4 49.1 66.3 49.9 3. Machakos Turn off-JKIA 179.5 55.5 33 31 28 33 142.1 39.0 33 277.8 56.4 98.3 58.0 4. Lanet-Njoro Turnoff 14.6 23.2 12 16 97.2 37.0 16 33.7 9.8 29.7 43.7 9.3 44.1 99 33 5. Njoro Turnoff-Timboroa 27.1 41.7 26 84 47.1 28.0 84 68.9 23.3 31.6 40.8 18.5 21.0 Sub Total (original credit component) 223 372.1 34 223 516.9 40.3 6. Mau Summit-Kericho 57 14.4 17.0 57 7.9 7.9 18.0 18.0 7. Kericho-Nyamasaria 7.2 21.9 137 22 20 81 39.7 23.5 76 23.9 5.9 27.8 24.8 10.7 44.4
8 Airport North Road 8 7 25 Dropped Dropped
9. Nyamasaria-Kisumu Airport -Kisian 24 11.6 16.0 22 1.4 1.4 13.3 13.3 Sub total (AF component) 162 65.7 19.2 155 33.2 22.3 TOTAL 367 124 27 385 437.8 N/A 378 550.0 39.1 *Note: Results presented for each road section and for the homogeneous road subsections were analyzed separately in the HDM4 model.
3. The ex-post economic analysis demonstrates that the Project is economically justified despite cost overruns. The overall EIRR is higher than those estimated at the beginning of the project and the AF economic analysis. Total NPV is also higher than at appraisal or the AF. Significantly higher than anticipated traffic growth is one of the main contributing factors for the positive results of analysis. Details of economic analysis are described below.
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4. Project objectives and main benefits. The expected outcome of the proposed road works was to increase the efficiency of road transport along the Northern Corridor. The rehabilitated and improved road sections covered about 40 percent of the regional corridor within Kenya and improvements contributed to improved traffic flow and road safety. As noted in section 3.2, the road rehabilitation and improvement has reduced travel times between Mombasa and Malaba/Busia by 15 percent in 2015 and road-related fatalities per 100,000 people in Kenya, has decreased by 23 percent from 8.31 in 2008 to 6.4 in 2015.
5. Main assumptions and methodology. Net benefits were computed using the Highway Development and Management Model (HDM-4), which simulated lifecycle conditions and costs and provided economic decision criteria for multiple road design and maintenance alternatives. The evaluation followed the same methodology as the ex-ante economic analysis assessing road users’ benefits and actual construction cost, estimated maintenance cost, and traffic data obtained from existing studies31. The discount rate was set to 12 percent and the evaluation period to 30 years. The data were provided by KeNHA and were adjusted to reflect actual road works costs, incorporate a more realistic maintenance program in the base scenario, and reflect actual traffic growth to date.
6. The main benefits are the savings made by road users on vehicle operating costs, maintenance cost, and passenger/freight time. The evaluation calculated these benefits to road users and costs of the investments in road works as compared to a without-project scenario, and assessed streams of a net economic benefit to a society. Additional benefits, which have not been quantified, include the reduction of accidents, reduction of vehicle emissions such as GHG, and the improvement of driving and riding comfort. The costs to the road agency are the works costs.
7. Road section. The civil works consist of rehabilitating and improving eight road sections, totaling 377.9 km (Maji ya Chumvi - Miritini; Sultan Hamud-Machakos Turnoff; Machakos Turn off-JKIA; Lanet-Njoro Turnoff; Njoro Turnoff-Timboroa; Mau Summit- Kericho; Kericho-Nyamasaria; and Nyamasaria-Kisumu Airport-Kisian section), 41.4 km of which is dual carriageways. The above eight road sections are further categorized into sixteen homogenous road sections in terms of traffic and road condition for evaluation in HDM4.
8. Traffic volume. The traffic volumes (Average Annual Daily Traffic) and the annual traffic growth rates are presented in table 3.2. The base year of the traffic data (2003) and the actual traffic data in 2014 and 2015 were utilized to calculate average annual traffic growth rates for each mode for the years 2003 to 2014/15. The annual traffic growth rates of 5 and 4 percent were applied to all modes for the periods, year 12 /13 to 19 (2015/16-2022), and year 20 to 30 (2023-2033), respectively.
31 Traffic data has been extracted from the following studies: JICA: Goods Movement and Vehicle Traffic Survey for Master Plan on Logistics in Northern Economic Corridor in the Republic of Kenya (2015); PricewaterhouseCoopers(PwC) Kenya Ltd.:- Transaction Advisory Services for the Development, Operation and Maintenance of Mombasa Nairobi (A109) Highway on PPP basis (2015/16); and, ITEC Engineering Ltd.:- Consultancy Services for Reviewing And Updating The Economic Feasibility Study Report of Ahero – Kisii – Isebania (A1) Road (2015). APEC Consortium Ltd.:- Consultancy Services To Undertake Traffic Surveys On the Entire Road Network for the Kenya Roads Board (2014).
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Table 3.2.Traffic Volumes in 2003, and 2014/2015 and Traffic Growth Rate 2003 2014/2015 Average Growth Ratio (2003-2014/15) Large Trucks Large Trucks Large Trucks Road Section Car Matatu Bus Light Medium Heavy Total Car Matatu Bus Light Medium Heavy Total Car Matatu Bus Light Medium Heavy 1. Maji ya Chumvi - 1,269 453 280 166 696 4,362 7,226 Miritini 404 767 163 468 163 803 2769 10.0% -4.3% 4.6% -8.3% 12.8% 15.1% 2.Sultan Hamud- 492 393 80 305 566 836 2672 1,803 496 216 352 792 4,246 7,905 11.4% 2.0% 8.6% 1.2% 2.8% 14.5% Machakos Turnoff 492 393 80 305 566 836 2672 1,803 496 216 352 792 4,246 7,905 11.4% 2.0% 8.6% 1.2% 2.8% 14.5% 3. Machakos Turn 1397 917 474 994 894 1243 5919 6,066 3,475 1,061 2,414 1,431 6,768 21,215 14.3% 12.9% 7.6% 8.4% 4.4% 16.7% off-JKIA 3836 2388 673 2782 1308 1715 12702 9,244 3,955 989 4,632 2,178 3,657 24,655 7.6% 4.3% 3.3% 4.3% 4.3% 6.5% 5503 2779 603 859 491 926 11162 3,973 2,303 283 2,125 711 2,591 11,986 -2.9% -1.7% -6.6% 8.6% 3.4% 9.8% 4. Lanet-Njoro 8482 5042 634 768 801 968 16697 10,030 8,034 449 2,752 1,136 2,813 25,214 1.5% 4.3% -3.1% 12.3% 3.2% 10.2% Turnoff 3614 1771 551 520 551 866 7873 6,479 4,287 349 2,099 1,124 3,517 17,855 5.5% 8.4% -4.1% 13.5% 6.7% 13.6% 1802 868 287 249 210 409 3825 2,119 1,422 410 793 524 2,168 7,436 1.5% 4.6% 3.3% 11.1% 8.7% 16.4% 5. Njoro Turnoff- 1036 697 470 246 186 563 3199 2,119 1,422 410 793 524 2,168 7,436 6.7% 6.7% -1.2% 11.2% 9.9% 13.0% Timboroa 404 253 174 133 94 406 1464 1,347 825 98 177 478 1,734 4,659 10.6% 10.3% -4.7% 2.4% 14.5% 12.9% 6. Mau Summit- 1,527 957 198 228 713 734 4,357 Kericho 621 328 230 397 224 198 1997 7.8% 9.3% -1.2% -4.5% 10.1% 11.6% 703 384 230 530 391 238 2477 1,527 957 198 228 713 734 4,357 6.7% 7.9% -1.3% -6.8% 5.1% 9.8% 7. Kericho- 548 385 141 366 215 196 1850 2,141 1,528 739 828 688 1,046 6,970 12.0% 12.2% 14.8% 7.0% 10.2% 15.0% Nyamasaria 604 588 126 365 212 145 2040 2,774 2,267 834 1,189 847 1,211 9,122 13.5% 11.9% 17.0% 10.3% 12.2% 19.4% 8. Nyamasaria- 3,536 1,059 322 958 474 716 7,065 Kisumu Airport 604 588 126 365 212 145 2040 17.4% 5.5% 8.9% 9.2% 7.6% 15.6%
9. Estimating economic benefits. The economic benefits of road rehabilitation and upgrading works are: (i) reduction in vehicle operating costs and (ii) travel time savings. The project contributes to increased average traffic speeds as well as improved riding comfort. Accordingly, the economic benefits from the road works consist of the reduction of the following transport costs: (i) vehicle operating costs, mainly, reduction in consumption of fuels and reduction of wear due to vibration during driving, and (ii) reduction in travel time for passengers and freight, which is converted into monetary terms and added as economic benefits.
10. In the HDM4 model, benefits are calculated as the difference in transport costs and benefits between a with-project scenario (alternative case) and a without-project scenario (base case). These two scenarios include the following works:
11. With-project scenario. The following rehabilitation and maintenance activities were assumed in the model of the with-project scenario:
a. Rehabilitation and Improvement: Actual construction period data was utilized during the road rehabilitation and improvement period. The reduction of the International Roughness Index (IRI) has been simulated by the model once works have been executed, and completed.
b. Maintenance: Annual routine maintenance includes: roadside cleaning, maintenance of road facilities, and normal road patrol. Routine maintenance costs are assumed at the same level for all road types. Along with the maintenance, regular patching will be carried out if the pavement surface is damaged before reaching the roughness threshold for rehabilitation.
12. Without-project or Base scenario. The AF economic analysis base scenario assumed annual routine maintenance and reconstruction at IRI 12.0 would be performed. Given the significance and classification of the corridor 32 , the AF scenario assumptions likely understated the maintenance levels that would have taken place without the project. The base
32 The Northern Corridor is classified as international trunk roads (class A)
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scenario in the ex-post analysis was therefore amended based on more realistic assumptions. The ex-post base scenario included the same routine annual maintenance and reconstruction at IRI 12.0 as the AF base scenario and additional maintenance work of a 50 mm overlay at IRI 6.5 after the completion year of rehabilitation and improvement in the project scenario. To make the base scenario and with-project scenario comparable, the additional maintenance in the base scenario is of the same type and costs as were assumed in the with-project scenario.
13. Road works costs. Rehabilitation and improvement costs were calculated from the final construction cost. The economic cost (excluding taxes) was estimated as 78 percent of financial cost, similar to the proportion estimated in the economic analysis of the AF. To make the results comparable to the results at the appraisal and the AF, the economic costs were converted into 2008 prices using the GDP deflator published by the Bank.
14. Maintenance works. The same costs of routine maintenance works, 50mm overlay, double surface treatments utilized in the AF economic analysis were assumed in the ex-post analysis.
15. Table 3.3 presents the road sections lengths, road works and base investments costs at the appraisal, the AF and ex-post evaluation:
Table 3. 3. Road Sections and Investments Costs of NCTIP
PAD AF Ex-post Road Road work Road work Section Road work Section Road Section Road Road Section Road Work Work Road Work unit cost Road Work unit cost Length unit cost (US$ Length Work cost Length Work cost description cost description (US$ description (US$ (km) M/km) (km) (US$M) (km) (US$M) (US$M) M/km) M/km) Rehabilitation 1. Maji ya Chumvi - Miritini 35 Rehabilitation 13.0 0.37 35 Rehabilitation 24.55 0.7 35 48.63 1.39 and Widening
2. Sultan Hamud-Machakos Turnoff 55 Rehabilitation 24.7 0.45 55 Rehabilitation 39.20 0.71 55 Rehabilitation 65.23 1.19
3. Machakos Turn off-JKIA 34 Widening 35.0 1.04 33 Widening 61.57 1.87 33 Widening 115.39 3.50 Rehabilitation 4. Lanet-Njoro Turnoff Widening 0.71 16 Widening 39.20 2.45 16 54.68 3.42 Rehabilitation and Widening 99 37.1 Rehabilitation and Widening 5. Njoro Turnoff-Timboroa 0.32 84 Rehabilitation 56.55 0.67 84 Rehabilitation 83.36 0.99
6. Mau Summit-Kericho Rehabilitation 55 Rehabilitation 86.44 1.57 57 Rehabilitation 72.52 1.27 137 42.0 0.31 7. Kericho-Nyamasaria Rehabilitation 81 Rehabilitation 101.66 1.26 76 Rehabilitation 99.16 1.30
8. Airport North Road 8 Widening 10.0 1.30 Dropped Dropped Rehabilitation Rehabilitation 8. Nyamasaria-Kisumu Airport n/a n/a n/a n/a 24 66.88 3.04 22 70.26 3.32 and Widening and Widening TOTAL 368 161.8 383 476.05 378 609.23 16. Vehicle Operating Cost. Vehicle fleet characteristics and economic unit costs were defined for six vehicle classes: (i) car, (ii) matatu, (iii) large bus, (iv) light truck, (v) medium truck, and (vi) heavy truck. The following table presents typical road user unit costs for each type of vehicle. The parameters are based on the economic analysis at the AF, reflecting 2008 costs.
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Table 3.4. Vehicle Fleet Characteristics and Economic Unit Costs Mediu Large Light Heavy Car Matatu m Bus Truck Truck Truck Vehicle Characteristics Number of axles 2 2 3 2 2 3 Number of wheels 4 4 10 4 6 10 Average Operating Weight (ton) 1.6 3.2 12.6 5 12.3 25 Service Life (years) 6 6 7 10 8 8 Km driven per year 20,000 100,000 150,000 60,000 80,000 80,000 Hours driven per year 400 1,600 3,000 1,300 2,500 2,500 Number of passengers 2 12 40 0 0 0 ESA loading factor 0.00 0.10 1.20 0.03 4.30 4.60 Economic Costs in 2008 price 135,26 19,300 24,325 77,075 34,783 65,217 New vehicle price (US$) 3 New tire price (US$) 55 58 298 397 397 435 Fuel cost (US$/Liter) 0.78 0.78 0.78 0.78 0.78 0.78 Lubricants cost (US$/Liter) 2.08 2.08 2.08 2.08 2.08 2.08 Labor cost of maintenance (US$/hour) 7.38 7.38 7.38 7.38 9.53 9.53 Crew wage (US$/hour) 0.00 1.63 1.63 1.63 3.29 3.29 Time costs for working passenger (US$/hour) 1.80 0.67 0.67 0.67 0.67 0.67 Time costs for non- working passenger 0.45 0.18 0.18 0.18 0.18 0.18 (US$/hour) Cargo time (US$/hour) 0.00 0.00 0.00 0.02 0.04 0.13 Annual Interest Rate (%) 12 12 12 12 12 12
3.2 Civil Aviation Component
17. The aviation components (Components F and G) in the PAD amounted to US$51.65 million, or some 18.6 percent of the original project costs. The PAD notes that the proposed interventions were required for upgrading the aviation safety and security status based on internationally accepted standards and were not subject to economic analysis given the non- quantifiable benefits associated with increased safety and security.
18. The project paper (PP) for the 2009 AF confirmed the change in project scope from December 2005, when permission was sought and agreed, by exchange of letter to replace the proposed renovation of Old Embakasi Airport (Nairobi) and increase the expansion of JKIA, adding the development of the Unit 4 Terminal and Car park, with corresponding reallocation of the credit proceeds, from the former to the latter. The PP also noted the expected benefits of the JKIA expansion comprise: (i) increased revenue for the KAA; (ii) reduced congestion at the airport; (iii) increased safety and security; (iv) increased reliability and reduced delays in passenger and cargo handling; and (v) multiplier effects of reduction in the cost of doing business, particularly in the horticulture and fresh flower industries.
19. The PP presented the results of a feasibility study for all the interventions at JKIA.33 Whilst an economic analysis was not undertaken to ascertain whether it represented an appropriate use of public investment, the PP reported the results of a financial analysis, which
33 Queens Qay Architects Intl Ltd (Canada) 2005 Jomo Kenyatta International Airport Terminal Master Plan, Design and Construction Final Report, KAA, February 2005
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estimated project costs of US$134 million, NPV (at 10% discount rate) of US$218 million, and an IRR of 19 percent.
20. While the financial analysis has not been redone for the ICR, this result was predicated on demand forecasts that predicted 5.5 million passengers (domestic, international and transit) with an annual growth rate of 4.7 percent for 2011-2016 and 353,000 tons of air-freight by 2015. Actual data from KAA reveals that total passenger numbers through JKIA reached 6.4 million in 2014, an average annual growth rate of 6.4 percent, and cargo throughput reached 260,000 tons.
21. The actual growth in passenger numbers exceeded the demand forecasts in the high scenario, despite the impact of the global economic slowdown and the fire at JKIA. The drop in air-freight is at least partially due to the introduction of stricter European Union import regulations concerning pesticide levels on fresh products (Dimethoate) 34. The European market accounts for up to 80 percent of Kenya’s fruit and vegetable sales and 42 percent of flower exports.
22. While actual financial costs (US$270 million) exceeded estimated costs markedly, the growth in passenger traffic, the increase in the Airport Passenger Service Charge, a levy charged on each passenger to pay for the improvements, from US$20 to US$40, would be expected to more than ensure the investment was financially viable.
34 Business Daily (2013)
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Annex 4. Bank Lending and Implementation Support/Supervision Processes
(a) Task Team members Responsibility/ Names Title Unit Specialty Lending Anil Bhandari TTL AFTTR TTL Josphat Sasia Economist AFTTR Co TTL Jean Francois Marteau Transport Specialist AFTTR Transport Nina Chee Environment Specialist AFTES Environment Amadou Konare Consultant/Environmental AFTES Environment Moses Wasike Financial Management Specialist AFTFM Financial Management Nyambura Githagui Sr. Social Develop. Specialist AFTES Social safeguard Dahir E. Warsame Procurement Specialist AFTPC Procurement Pascale Dubois Senior Counsel LEGAF Legal Hisham A. Abdo Kahin Consultant/Counsel LEGAF Legal Fabio Galli Sr. Financial Analyst SASEI Financial Management Rodrigo Archondo-Callao Technical Specialist TUDTR Transport Jaswant Channe Consultant/Highway Engineer SASEI Transport James Karuiru Consultant/Infrastructure Eng. AFCO5 Infrastructure Yoshi Kawasumi Consultant/Road Safety AFTTR Road Safety Farida Khan Operations Analyst AFTTR Operations Analyst Nina Jones Program Assistant AFTTR Program Assistant Anne Njuguna Team Assistant AFTTR Team Assistant Anne Odera Team Assistant AFCO5 Team Assistant Hye Ra Kim Finance Analyst LOAG2 Finance Hyacinth D. Brown Senior Finance Officer LOAG2 Finance Marc Juhel Peer Reviewer TUDTR Peer Reviewer Cesar Queiroz Peer Reviewer ECSIE Peer Reviewer Henry Kerali Peer Reviewer ECSIE Peer Reviewer Supervision/ICR Josphat Sasia Lead Transport Specialist GTIDR TTL Fabio Galli Lead Transport Specialist GTIDR Transport Nina Chee Lead Environmental Specialist OPSPF Environment Anil Bhandari Consultant GGODR Team Member Nyambura Githagui Lead Social Development Specialist GSU07 Safeguards Dahir E. Warsame Senior Procurement Specialist AFTPC Team Member James N. Karuiru Consultant GSU19 Team Member Anne Khatimba Program Assistant AFCE2 Program Assistant Jean Francois Marteau Program Leader ECCU5 Program Lead Akiko Kishiue Urban Transport Specialist GTIDR ICR Team leader Moses Sabuni Wasike Sr. Financial Management Specialist GGO21 Financial Management Damon C. Luciano Program Assistant GTIDR Team Member Tim
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Noreen Beg Senior Environmental Specialist GEN 04 Environment Peter Thinwa Warutere Senior Communications Officer AFRSC Communication Shamis Salah Musingo Senior Executive Assistant AFCE2 Team Member Armin Morz Consultant LCSTR Team Member Silverster Kasuku Consultant N/A Social Development Josephine Kabura Kamau Sr. Financial Management Specialist GGO31 Financial Management Felly Akiiko Kaboyo Operations Analyst GPSOS Team Member Josephine Kabura Ngigi Consultant GGODR Team Member Lucy Kang’aura Program Assistant AFCE2 Team Member Gibwa A. Kajubi Sr. Social Development Specialist GSURR Safeguards Joel Buku Munyori Procurement Specialist GGO01 Procurement Lucy Antango Musira Program Assistant AFCE2 Team Member Charlene D’Aleida Consultant AFTTR Team Member Samuel Iyasu Zerom Operations Analyst AFMRW Team Member Solomon Muhuthu Waithaka Sr. Highway Engineer GTIDR TTL Pascal Tegwa Procurement Specialist GGO01 Procurement Rosemary Ngesa Otieno Program Assistant AFCE2 Team Member Monica Gathoni Okwirry Program Assistant AFCE2 Team Member Svetlana Khvostova Natural Resources Mgmt. Spec GEN01 Safeguards Tito
(b) Staff Time and Cost (from System) Staff Time and Cost (Bank Budget Only) Stage of Project US$, Thousands (including Cycle No. of staff weeks travel and consultant costs) Lending FY03 15.32 87.2 FY04 50.81 262.7 Total: 66.18 349.9 Supervision/ICR FY05 38.46 136.1 FY06 32.13 141.9 FY07 25.49 123.8 FY08 38.28 134.1 FY09 37.75 204.9 FY10 19.21 129.2 FY11 28.51 149.5 FY12 18.62 95.1 FY13 27.63 136.1 FY14 26.02 114.6 FY15 20.79 76.9 FY16 27.70 157.8 Total: 406.71 1,949.7
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Annex 5. Beneficiary Survey Results Not applicable
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Annex 6. Stakeholder Workshop Report and Results Not applicable
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Annex 7. Summary of Borrower’s ICR and Comments on Draft ICR NORTHERN CORRIDOR TRANSPORT IMPROVEMENT PROJECT (NCTIP) Credit 3930-KE and Credit 4571-KE Borrower's Implementation Completion and Results Report (ICR) Date: March 31, 2016
(i) Background Implementation period. The Financing Agreement for the Northern Corridor Transport Improvement Project (NCTIP) became effective on September 16, 2004. The Development Credit Agreement was amended and restated on May 8, 2009 so as to close on December 31, 2012. However, the government requested the World Bank for an extension on September 21, 2012, which the Bank approved through a letter dated January 3, 2013, and the implementation period was thus extended to December 31, 2015. The project NCTIP therefore became the longest running transport project under implementation by the Ministry, with a total implementation period of eleven (11) years. Justification for second extension of the implementation period. This extension was necessitated by exogenous factors, which caused delays in completing the following major works contracts: - Rehabilitation of the Northern Corridor comprising the Mau Summit-Kericho-Nyamasaria- Kisumu-Kisian section. At the time of project preparation in 2003, the country was preparing to go to elections and from 2003 to 2012 there was significant growth of traffic surpassing the forecasted volumes partly due to the growth of the economy. This therefore necessitated redesign of urban sections of the Northern Corridor to provide dual carriageways within major towns of Mombasa, Nairobi, Nakuru, Kericho and Kisumu. - Sub-components at Jomo Kenyatta International Airport (JKIA) mainly comprising completion of Terminal T1A (international departures) co-financed by AFD. Project Implementing Entities. There were four Project Implementing Entities (PIEs) namely: State Department of Transport, Kenya National Highways Authority (KeNHA), Kenya Civil Aviation Authority (KCAA) and Kenya Airports Authority (KAA). State Department of Infrastructure coordinated the project. Original Credit: US$ 207 million Additional Credit: US$ 253million Total Credit: US$ 460 million Effectiveness date: September 16, 2004 Restating Development Credit Agreement: May 8, 2009 Approval of Extension of implementation period: January 3, 2013 Credit Closure date: December 31, 2015
Over the implementation period, the government put in substantial resources as counterpart funding, running to about 35% of the total cost of the project (about US$ 250 million). This included counterpart funding that went directly to finance the works and operational expenses by the Project Implementing Entities (PIEs). (ii) Project Development Objectives (PDOs) The revised PDOs were to: (i) increase the efficiency of road transport along the Northern Corridor to facilitate trade and regional integration; (ii) enhance aviation safety and security to meet international standards; (iii) promote private sector participation in the management, financing and maintenance of road assets; and (iv) restore vital infrastructure and public assets damaged as a result of the 2007 post-election crisis.
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What is significant to note is that while the project was mainly road transport-oriented, the objectives went beyond the traditional design as attested by indicators specifically touching on maritime, aviation and other trade facilitative aspects of transport. (iii) Key Design and Implementation Issues Project complexity. This project had the longest implementation period, having started in 2004 and closing on December 31, 2015. The project combined three sub-sectors in the transport sector namely (i) roads, (ii) aviation and (iii) maritime. Such a design therefore needed proper planning and commitment by the implementing entities. Project design flexibility. Although challenging, the approach of an integrated transport project is supported by the government and has been seen to produce positive results for Kenya. During the currency of the project, reforms were carried out and some of the institutions established through the project participated in implementation. This could not have been possible were it not for project flexibility. Following the political crisis that followed the general elections in December 2007, some critical infrastructure and public assets, were damaged. The need to rehabilitate and replace the public assets necessitated revision of the project development objectives (PDO) accordingly. Again, this was made possible due to the project design flexibility. The revision of PDOs and Additional Financing necessitated extension of the implementation period. The 11-year duration was also partly due to other exogenous factors e.g. ongoing sector reforms as well as the election violence of 2007/08, which temporarily slowed down progress. (iv) Key Achievements of Project Development Objectives The key achievements are listed below: a) Roads sub-sector Roads completed. A total of 419.3km of roads were rehabilitated/upgraded along the Northern Corridor between Mombasa and Kisumu. This length was noted to be longer than what was targeted at project design due to the inclusion of the additional lengths arising from dual carriageways. Roads Completed No. Road Section Rehabilitated Length (km) 1. Maji ya Chumvi – Miritini 35 + 5* 2. Lanet – Njoro Turnoff dualling 16 + 16* 3. Njoro Turnoff – Timboroa 84 4. Sultan Hamud – Machakos Turnoff 55 5. Machakos Turnoff – JKIA 33 + 12* 6. Kericho – Nyamasaria Road 76 7. Mau Summit – Kericho Road 57 8. Nyamasaria – Kisumu – Kisumu Airport 14.9 + 8.4* 9. Kisumu Airport – Kisian Road 7 Total length of roads completed 419.3
Note 5* - This is the length of road that is dual Long term performance-based road maintenance contract. The concept of performance based contract was new to Kenya. KeNHA sensitized consultants and contractors on long term performance based road maintenance contract through workshops. The concept has been accepted in Kenya and maintenance of newly constructed roads are to be under the performance based contract, e.g. Thika Road.
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Currently there are 12 long-term performance-based contracts awarded and under implementation. This way, private sector participation in road construction, maintenance and management is enhanced. Road safety. The facilities constructed alongside the roads have greatly enhanced road safety. These include footbridges, e.g. at Mlolongo, wide shoulders (1.5-2.0m), service lanes within build up areas and street lighting. Other facilities were construction of proper bus and truck stops at key selected locations. Children’s Traffic Parks. Following the reforms under the Kenya Roads Act 2007 that saw to the establishment of three Roads Authorities, the management of children’s traffic parks was moved to Kenya Urban Roads Authority (KURA). Children Traffic Parks have therefore been under KURA since 2009. Budgetary allocation for the same started in 2012 as tabulated bellow. Currently there are six (6) in operation as follows: Nairobi, Nyeri, Embu, Kisumu, Kisii and Kakamega. The Authority is currently rehabilitating Kisii Children’s Traffic Park, which has been in operation since the 1980s to give it a face lift. An additional one is also being established in Nairobi at the junction of Outer Ring Road/Kangundo Road under the ongoing Outer Ring Road expansion project financed by the Government and African Development Bank (AfDB). KURA has used from the exchequer Kshs. 135 million from 2012 to 2015 and Kshs. 40 million budgeted in FY 2015/16, thus a total of Kshs. 175 million. Budgetary Allocation to Children’s Traffic Parks Managed by KURA Year Allocation Kshs. Million 2012 20.00 2013 25.00 2014 60.00 2015 30.00 2016 40.00 Total 175.00 The number of fatalities related to road accidents in 2015 was 3,057, about 3% less compared to the 2008 figures. Further, fatalities per 100,000 have been improved from 8.31 in 2008 to 6.4 in 2015. Feasibility Studies: The design of the project was futuristic, allowing for design of roads to be considered for implementation in the future. This was aimed at reducing lead time to project implementation for the designed road sections. All the feasibility and detailed engineering design studies on selected road sections were completed as follows: (i) three sections on the Kenya-South Sudan Road from Lesseru to the Nadapal/Nakodok border, length 601km, (ii) Kibwezi-Kitui-Mwingi-Maua-Isiolo, (iii) Narok-Northern Lakeside Tanzania, and (iv) Mombasa Southern Bypass whose implementation is under financing by JICA. The design of Lesseru-Nadapal/Nakodok Road under NCTIP played a significant role in facilitating the quick preparation of the Eastern Africa Regional Transport, Trade and Development Facilitation Project (EATTEDP). This project was prepared and approved in a very short time compared to other projects that have been prepared within the transport sector. Before closure of NCTIP, the Financing Agreement for EARTTDFP had already been declared effective. The lead time to closure of the road upgrading contracts for the Bank-financed sections will also be significantly shorter than usual. Transport Sector Reforms: The project supported reforms in the transport sector. This included the enactment of Kenya Roads Act, 2007 which set the ground for establishing of the three roads authorities (KeNHA, KURA, and KeRRA). Further, the reforms resulted in the enhancement of Kenya Road Board (KRB), creation of the National Transport Safety Authority (NTSA), National Construction Authority (NCA), and Engineers Board of Kenya (EBK). Consolidation of the transport sector, which was previously managed by three Ministries namely, Transport, Roads, and Public Works under the Ministry of Transport and Infrastructure in 2013, has also contributed to the
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strengthening of the transport sector governance. These initiatives have brought efficiency in the sector. Roadside amenities. To facilitate socio-economic enhancement, markets were built along the Northern Corridor at Taru and Awasi, three schools at Mlolongo, a community centre at Chepseon, and a lorry park at Nyamasaria. Further, awareness campaigns were carried out for HIV and AIDS Mitigation. Emergency post-election reconstruction and recovery: Offices have been rehabilitated at Oyugis and Hama Bay (two office blocks) and Kisumu. A new KeNHA regional office block in Kisumu has also been completed. Road Disaster Management and Response Unit: this unit was established under MoTI (Roads Department) and functions as a committee composed of representatives from roads authorities when a disaster occurs. The Disaster Management and Response Unit works with the National Disaster Operational Centre when a disaster occurs. b) Aviation Sub-sector JKIA Terminal T1-A Construction. The construction of this new terminal improved capacity by 100% to 5 million per year. The terminal was substantially completed in August 2014. Parking facilities at JKIA. These were increased, adding a multi-storey parking facility for 1,500 cars and at grade parking for 400 vehicles. The multi-storey parking facility was converted to a temporary arrivals facility following the fire disaster incident at JKIA in August 2013. Security and safety at JKIA. This was enhanced and the International Aviation Safety Assessment (IASA) Category 1 clearance for KCAA and direct flights to/from United States of America (USA) and United States Transportation Security Administration (TSA) security clearance is expected once the process is completed. Significant security improvements at JKIA were achieved by completing enhancement of passenger screening. As a result, the ICAO security audit of October 2015 scored JKIA a high of 88%, against a cut off of 80% for CAT1 certification. Kisumu International Airport. The runway was extended from 2.0km to 3.3km and a new terminal building of area 5,400 m2 was constructed. This upgrade resulted in capacity increase from about 70,000 to 300,000. The facility was opened in 2011. Structural reform and capacity building of KCAA. Reforms at KCAA are still on-going. The revenues of KCAA have been tripled between 2004 and 2015, which allows KCAA to recruit more inspectors. The number of airworthiness inspectors and flight operations inspectors increased from 3 to 18 and 1 to 16, respectively. These changes will facilitate KCAA obtaining IASA Category 1 in the next audit in 2016. East African School of Aviation (EASA) enhanced its capacity and is now accredited by ICAO as a regional training center of excellence. Such centers exist in Africa only in South Africa and Kenya and 14 in the rest of the world. c) Maritime Sub-sector Support to Kenya Maritime Authority. The project supported the establishment of a new maritime administration, KMA which was set up in June 2004 as the semi-autonomous agency in charge of regulatory oversight of the Kenyan maritime industry. Enhancement of Maritime Training Capacity (Bandari College). Procurement and installation of navigation bridge simulator software and ICT equipment for Bandari College was completed. Bandari College is now one of the four accredited institutions for Maritime Education and Training in Kenya. Kenya is already listed in the white list countries based on proper implementation of ‘The International Convention on Standards of Training, Certification and Watch-keeping for Seafarers of
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1995’. Kenya has been re-elected by the Assembly of the International Maritime Organization (IMO), into its 40- Member Council under Category (C) for the 2016-2017 biennium. Support for Implementation of Maritime Laws: Consultancy services to Draft Rules and Regulations for seven Maritime Laws had resulted in development of regulations to improve the Maritime Sector/Industry; enforcement of the merchant shipping Act; enhanced safety; strengthened the capacity of the Kenya Maritime Authority; and enhanced Marine Environment Protection as well as enhanced revenue generation for Kenya Maritime Authority. Capacity building. Capacity building has been undertaken in all implementing entities across the board. The two levels of capacity building are procurement and installation of IT and other equipment as well as staff training. Training has been undertaken in various institutions on diverse topics and as a result, achievement of project development objectives was realised. Kenya Airports Authority trained a total of 171 staff between 2007 to 2015, Kenya Civil Aviation Authority 18 staff and the Ministry of Transport trained 71 from 2005 to 2015. KeNHA trained 112 staff members. Under the Engineers Board of Kenya, 8 staff members received training (4 attended engineers conference in Singapore and Nigeria respectively and 4 went on a benchmarking trip to Tanzania), a stakeholder conference was held at Kenya School of Government and the Strategic Plan for 2014 to 2019 was launched in 2015. Every year the Bank holds at least one disbursement and procurement clinic, which deal with fiduciary issues and pointing out areas that the project implementation teams should improve on. Further, during the annual FM supervision missions, Bank staff takes the implementing teams through the requirements for proper financial management. Project Implementation Teams (PITs) received training on financial and fiduciary management through disbursement and procurement clinics that were organised at least once every calendar year by the World Bank. The following were trained: KeNHA – 6 (4 technical, 1 finance and 1 procurement); MoTI(I) – 6 (2 technical, 3 finance and 1 procurement); MoTI (T) – 9 (6 technical including 2 from KCAA, 3 finance including 1 from KCAA). M&E: The consulting division of the University of Nairobi Enterprises and Services (UNES) was awarded the task of Monitoring and Evaluation for the project and has submitted a final draft report. The choice of a public university to undertake monitoring and evaluation was another unique aspect of the project design. By awarding the assignment to UNES, the then Ministry of Roads and the World Bank intended to enhance the capacity of the University of Nairobi to undertake M&E of such a complex project.
Overall Outcome Rating: Satisfactory. The Project Development Objectives were achieved.
(v) Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development Economic activities along the Northern Corridor increased as a result of the improved road characteristics. This in essence worked to reduce poverty among residents. By constructing the footbridge at Mlolongo for example, the numbers of accidents occurring at the section were reduced. The two sides of the road were also socially integrated due to ease of movement of non-motorised transport users. (b) Institutional Change/Strengthening Under the NCTIP the following institutions were established thereby strengthening the road transport sector and construction: 1. Kenya National Highways Authority – to manage national highways;
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2. Kenya Rural Roads Authority – to manage rural access roads; 3. Kenya Urban Roads Authority – to manage urban roads; 4. National Transport and Safety Authority – in charge of road safety; 5. National Construction Authority – regulation of construction industry; 6. Engineers Board of Kenya – to regulate the engineering profession.
The following institutions were strengthened to execute their mandate: 1. Materials and Testing Department – additional testing equipment supplied; 2. Kenya Institute of Highways and Building Technology – additional training equipment supplied; 3. Mechanical and Transport Department – ICT equipment supplied; 4. Kenya Maritime Authority – enactment of treaties. (c) Other Unintended Outcomes and Impacts (positive or negative) 1. The way projects are managed in the transport sector changed as a result of bringing together various sub-sectors in the transport sector. Previously, each sub-sector planned alone but through the NCTIP, this changed and it has now become a best practice. 2. When the project brought together aviation, maritime and road sub-sectors, another dimension of transport planning hitherto unknown was established. The interconnectivity of these sub-sectors has now been better understood.
(vi) Assessment of Risk to Development Outcome Rating: Moderate. While the risk rating in the Project Appraisal Document was noted as substantial, the Government has taken steps to ensure that sustainability of the facilities implemented under the project is ascertained. These are: a) enhancement of the Road Maintenance Levy Fund (RMLF) by Ksh.3.00 to Ksh.12.00, b) continuation of deepening of transport sector reforms by instituting various measures e.g. formation of National Construction Authority to regulate the construction industry, formation of the National Transport and Safety Authority for improved safety on the road, continued implementation of the Integrated National Transport Policy, c) the Boards of the Roads Authorities (KeNHA, KURA, KeRRA as well as KRB) are still in place as per the Kenya Roads Act, 2007, d) the Constitution of Kenya, 2010 gives both levels of Government – National and County, mandates over their respective jurisdictions to ensure that maintenance of roads is given priority. Project sustainability - the government has instituted various measures to ensure that the project is sustained. These include operationlisation of the Road Maintenance Levy Fund to provide funds for maintenance of the road network. Further, stakeholders are involved during the planning process of road works to ensure that the project components are sustained.
(vii) Assessment of Bank and Borrower Performance Rating: Satisfactory. The implementation of the road rehabilitation projects was successfully completed.
Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e. performance through lending phase) Rating: Satisfactory. The NCTIP Credit was consistent with the Country Assistance Strategy (CAS) and focused on economic growth and improving governance. The lending was packaged into a Specific Investment Loan (SIL) since the borrower had well defined timetables for the implementation of major physical investments.
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(b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory. The selection of consultants and contractors was performed under Bank regulations, which ensured quality. The Kenya National Audit Office (KENAO) audits the activities and accounts of the projects in the Credit. Further, the Bank policies on safeguards are integrated in the projects, which have safeguards experts to ensure compliance. The Bank reviews performance of the executing agency twice a year in supervision support missions.
Overall Bank Performance: Satisfactory. The entire Credit has been applied to meet the Project Development Objectives as detailed in the Project Appraisal Document.
Borrower Performance (a) Government Performance Rating: Satisfactory. The Government applied the Credit as documented in the Financing Agreement with the World Bank and the Project Appraisal Document of 2004 as well as the Project Report of 2009 and completed the project components as intended. The National Treasury gave leadership in ensuring that disbursements were well managed. Further, the Government provided the required counterpart funding and even surpassed the ratios agreed in the Financing Agreement and thus outdid the intended outcomes in some instances as reported in the Monitoring and Evaluation Report.
(b) Implementing Agencies Performance Rating: Satisfactory. The Ministry of Transport and Infrastructure set up a Project Oversight Committee (POC) to oversee the overall implementation of the project. The POC met on quarterly basis and dealt with a cross-section of issues from various Project Implementing Entities (PIEs). Members of the POC were the Chief Executive Officers of the PIEs, the Principal Secretaries for the State Departments of Infrastructure and also Transport, and the Principal Secretary of the National Treasury. The project was being coordinated by the State Department of Infrastructure, with the Principal Secretary as chairman and the Principal Secretary (Transport) as co-chairman. The Project Coordinator was the secretary to the POC. The Project Implementing Entities namely KeNHA, KAA, KCAA, and MOTI (T) had set up a multi-disciplinary Project Implementation Teams (PITs) that managed the implementation of NCTIP project components to completion.
Overall Borrower Performance: Satisfactory. The Credit has been fully utilized and the planned physical works completed as intended. From the Monitoring and Evaluation results, the project was noted to have performed well from the point of view of achieving the intended outcomes in the results monitoring framework. Overall performance of the transport sector has improved tremendously following the reforms carried out in various sub-sectors. As an example, the Ministry of Transport and Infrastructure has been left with the function of policy formulation and oversight while policy implementation has been taken up by various roads authorities and other institutions under the Ministry. This has not only improved service delivery but also governance. Over the period of the 11 years that the project was being implemented, the sector saw increased levels of competitiveness in bidding processes. This has resulted in significant savings in large value contracts. It is also worth noting that the perception of Kenyans on the sector’s reputation has improved significantly.
(viii) Lessons Learned The implementation of the NCTIP brought out some lessons that would be useful in current and future projects: i. Regular consultative meetings between Bank and PIEs – in the implementation of the various projects there was need to review various project aspects such as costs and time. It was realized that processing of such changes was better expedited by holding meetings to review the matter at hand.
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ii. Innovative scheduling of Credit funds – as a developing country, the Government would occasionally experience slower than expected cash flow, which would lead to delayed payments and subsequent claims. In this regard, the Bank agreed to reschedule the payment to contractors such that most of the payments were brought forward. This had two major benefits; works continued unhindered and claims were avoided and the borrower was able to realize benefits of the rehabilitated road sections in good time. iii. Establishment of a Project Oversight Committee (POC) – this Committee was constituted of the Ministry of Transport and Infrastructure, the National Treasury, the CEOs and PIT leaders of the various PIEs. It provided coordination and oversight among PIEs and provided peer review during implementation of the project. Although the project was composed of several sub-sectors of transport, all implementing entities agreed that project coordination was smooth. Quarterly project meetings and the project coordinator were identified as the key factors of smooth coordination of this complex project. iv. Project decision making – there were some contracts that required difficult decisions like termination, e.g. the Restoration of the Public Assets. It is a lesson learnt that such decisions should be made in a timely manner in order to realize the project objectives. v. Project design flexibility – although challenging, the approach of an integrated transport project is supported by the government and has been seen to produce positive results for Kenya. It is significant to note that during the currency of the project, reforms were carried out and some of the institutions established through the project participated in implementation. This could not have been possible but for project flexibility. vi. Financial management - disbursements and counterpart funding. During project implementation, procurement plans and disbursement projections will need to be strictly adhered to as much as is practically possible. This will help reduce delays. Late release of the exchequer for counterpart funding was seen to be a major drawback to implementation, resulting in delayed payments and accrual of interest. Capacity at MOTI was an issue. Resource Mobilization Sections were set up in the two departments of the Ministry of Transport and Infrastructure to improve capacity and reduce delays. Good knowledge of World Bank fiduciary and financial procedures was a prerequisite to successful implementation. vii. Design and implementation of large value contracts. It was noted that by addressing institutional capacity constraints, it is possible to implement expanded project activities effectively. viii. Implementation duration – the NCTIP was implemented in a period, which has seen three different governments and also with strong economic development, which generated more transport movements than anticipated. The project teams and the World Bank were flexible enough to respond to unexpected situations, modify the activities, and provide emergency support. ix. Project administration World Bank country office. The relationship of the Bank project management team and the implementing entities was key to successful implementation. Having the task Team Leader in the World Bank Country Office made consultation easier and regular. Delays in issuance of the No Objections were kept at a minimum. x. Co-financing by other development partners. The project was co-financed by the Nordic Development Fund (NDF), European Investment Bank (EIB) and the Government. By the World Bank taking the lead in project preparation amongst the development partners, coordination was seamless. xi. Project design replication. Designs of future projects can borrow from the lessons learned from NCTIP with good results. While the NCTIP took long to implement, the impact it has had as shown in the monitoring and evaluation final report indicates that it was highly successful. The project was quite ambitious because it covered several subsectors of the transport sector. Owing to the concerted efforts by the key players, the challenges arising from its complexity were surmounted.
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Borrower’s Comments on the Draft ICR (Letter from MoTI)
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NORTHERN CORRIDOR TRANSPORT IMPROVEMENT PROJECT (NCTIP) Cr. 4571-Ke and Cr. 3930-Ke Borrower’s Comments on the Draft ICR35 Date: June 20, 2016
Below are the Borrower’s comments on the ICR: (a) Intermediate outcome indicators: Under Indicator 4: add to the list of achievement by December 2015 ‘1 footbridge at Mlolongo’. This is reported as 100% achievement while in essence 300% was achieved since 9 amenities were constructed. - The Bank team will revise the achievement of indicator 4 accordingly. Under Indicator 7: in our view, more than 10% reduction in road related fatalities was achieved when measured from the internationally recognized rate per 100,000 population. Noting that the traffic volume continued to grow from the base year to the end of the project as noted in paragraph 44 therefore, it is not practical to state that the target was not achieved while at the same time acknowledging that there was a reduction of 23% as per 100,000 population. - Unfortunately, project indicator 4 set the target as the total number of road related fatalities, not per 100,000 people. Therefore, the ICR needs to report as designed in the Results Framework of the project. However, the data obtained from NTSA confirmed the 23% reduction in fatalities per 100,000 people, the ICR included this information in the report to support the positive result of project. Under Indicator 10: further to achieving 100% of the target, also indicate that all road works under the Roads Authorities are procured under open tender and thus the opportunities are open to the public - The Bank team will include the open tender in the comment section of Indicator 10.
(b) The Borrower notes the seriousness with which the Bank takes changes in the composition of Project Technical Teams (PTT). Paragraph 38 of the ICR clarifies that the unilateral change in leadership of the PTT in 2006 without consulting the Bank caused a delay in start-up activities of road construction work. Changing the leadership without consulting the Bank was in contravention to the legal agreement. This resulted in the signing of a Memorandum of Understanding on transitional arrangements for the proposed change in the Ministry of Roads, Public Works and Housing (MoRPWH) PTT. Moving forward, this is a good lesson to entities implementing components under ongoing projects. - The Bank team appreciates this comment.
(c) The Borrower notes the comments in paragraph 53 in regard to gaps observed in the project M&E design and implementation. Concerns of the Bank and stakeholders on the quality and timeliness of reporting were appreciated and this will be taken as a lesson learned for future projects. Both the Borrower and the Bank will need to be more proactive in making critical decisions relating to the implementation of M&E in order to improve performance monitoring. - The Bank team appreciates this comment.
35 The responses from the Bank team are inserted (texts in italic and bold).
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(d) Paragraph 58: The street lighting, road furniture, landscaping, foot bridges, and construction of drains for Nyamasaria – Kismu-Kisian road section including Kisumu Bypass (14.9 km, including 8.4 km of dual carriage way) had not been completed by end of the project and is scheduled for completion in July 2016. The lorry park at Nyamasaria and market at Awasi are expected to be completed by September 2016. Delay in their completion was as a result of budgetary constraints. - The Bank team will update the information in the report (please see paragraph 60 of this report).
(e) Paragraph 63: As noted in the ICR, follow up of conclusion of the development of a 50-year transport master plan and the remodeling of terminal 1-B, C and D, and the restructuring of KCAA are being carried out. The Consultant for the 50-year transport master plan made a presentation of the draft final master plan and stakeholders gave comments which are expected to be incorporated by end of June 2016 and the report resubmitted to the Ministry. In regard to remodeling of T1B, C and D, the Government wrote to the Bank requesting for a project preparation facility to complete the design and the same is under consideration by the Bank. With respect to restructuring of KCAA, a study on delinking of regulatory and service provision functions of KCAA was completed and recommendations on the way forward made. The Ministry is following up the issue to ensure that the Authority is restructured as intended. - The Bank team takes note of this comment.
(f) Paragraph 70: you indicate that 389km of roads were rehabilitated while elsewhere (paragraph 73) and in the Borrower’s contribution it is different. Please harmonise the figures. - Total length is 419.3 km. Paragraph 70 in the draft ICR was referring to the total KM of road rehabilitated with available IRI data in order to confirm the improved road condition which was one of the achievements of the NCTIP. Since IRI is not available for the road section of Nyamasaria-Kisumu-Kisian (21.9km, 8.4 km of which is dual carriageway) yet, total KM for 7 road sections is 389km (419.3km - 21.9km-8.4km). Please see annex 2c paragraph 3 of this report.
(g) Paragraph 71: Refer to comment (a) above. - The Bank Team will include this point in the final document. (Please see table 3, paragraph 112, and annex 2c paragraph 4 of this report)
(h) Paragraph 77: It is worth mentioning the achievements under the East African School of Aviation in respect to attaining the Centre of Excellence status, one of the 16 in the world as a result of facilities majorly installed through NCTIP. The school’s capacity to train aviation professionals within the region and develop curriculum for specialized courses has been enhanced. - Thank you for pointing this out. The Bank team will include EASA’s achievement in section 3.2 in addition to annex 2d in the final report.
(i) Paragraph 115: We take note of the need to have adequate counterpart funding in order to reduce project costs. This is a lesson learned and will be take into consideration for future projects. - The Bank team appreciates this comment.
(j) Paragraph 123: The need to staff the External Resource Sections in the Ministry has been noted. Inadequate capacity in this regard was a source of delays in payment processing. - The Bank team appreciates this comment.
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Annex 8. Comments of Co-financiers and Other Partners/Stakeholders
Co-financiers 1. There was no co-financier for the NCTIP.
Parallel financiers 2. The draft report was shared with the parallel financiers, NDF and AFD for their comments. The NDF and AFD thanked the Bank for sharing the report and informed that they had neither specific questions nor comments on the report. The AFD also expressed their gratitude to the Bank’s project team for the quality of collaboration in the implementation of Component F, ‘Support to KAA’.
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Annex 9. List of Supporting Documents
Additional Financing Project Paper for the Northern Corridor Transport Improvement Project, Report No. 43537-KE, March 5, 2009
Aide memoires, project progress reports, and implementation status reports of NCTIP
Annual Report, Kenya National Highways Authority 2014/15
Constitution of Kenya, 2010
Country Assistance Strategy, 2004–08, Report 29038-KE, May 2004
Country Partnership Strategy, FY2010–13, Report 52521-KE, March 2010
Country Partnership Strategy, 2014–18, Report 88940, June 2014
Development Credit Agreement, Northern Corridor Transport Improvement Project, between Republic of Kenya and IDA, June 25, 2004
Feasibility Study and Preliminary Design for Upgrading of Facilities at Kisumu and Wilson Airport Study and Rehabilitation/Upgrading of Airport Pavements Design Study for Jomo Kenyatta International Airport, Kenya Airports Authority, November 2006
Financing Agreement (Amending and Restating Development Credit Agreement), NCTIP, between Republic of Kenya and IDA, May 8, 2009
Guidelines for Reviewing World Bank Implementation Completion and Results Reports, a Manual for Evaluators, last updated Aug 1, 2014
Implementation Completion Report Guidelines, OPCS, Aug 2006, last updated July 22, 2014
Integrated National Transport Policy, Ministry of Transport, 2009
Integrated Urban Development Master Plan for the City of Nairobi in the Republic of Kenya, December 2014, Japan International Cooperation Agency (JICA)
International Roughness Index data, Kenya National Highways Authorities
Jomo Kenyatta International Airport Terminal Master Plan, Design and Construction Final Report, KAA, February 2005
KAA Traffic Data and Analysis
Kenya Airports Authority Statistics
Kenya Facts and Figures, Kenya National Bureau of Statistics (for 2003–15 figures)
Kenya Transport Sector Memorandum (Volume I–III) 26444-KE
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Kenya Urbanization Review, February 2016, The World Bank.
Midterm Review, Mission Report, May 2009. Second Medium Term Plan (2013–17), Vision 2030, The Presidency, Ministry of Devolution and Planning, 2013
NCTIP Monitoring Report, University of Nairobi Enterprises and Services Limited, March 2016
Northern Corridor Transit and Transport Coordination Agreement, October 2007
Northern Corridor Transit and Transport Coordination Authority (http://www.ttcanc.org/), (travel time between Mombasa to Malaba and Busia, road condition, traffic in weigh bridge)
Project Appraisal Document for a Northern Corridor Transport Improvement Project, April 30, 2004
Road Act of 2007, Republic of Kenya
Road Maintenance and Trend, Kenya Roads Board
Road Safety Status Report 2015, January 2016, National Transport and Safety Authority,
Road Sector Investment Programme 2010–14, Ministry of Roads, Republic of Kenya
The State of Easter African Cities, 2014, UN-Habitat 2014
Traffic Act of Kenya, Revised Edition 2014
Vision 2030, Government of Kenya, 2007
Global Health Observatory data repository, Registered Vehicles Data by country 2013, World Health Organization (http://apps.who.int/gho/data/node.main.A995)
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Annex 10. Road Sector Governance and Integrity Improvement Action Plan - Implementation Status Risk Control/Action Status 1. Collusion and Client: (a) Use post-qualification, instead of Client: (a) Post-qualification has bid rigging. pre-qualification, to avoid advance been used for all major civil knowledge of the firms invited to bid. works contracts. (b) Public dissemination of the overall roads (b) The Client held two such program and business opportunities in the public dissemination workshops road sector, reinforce government’s and (June 2004 and August 2005) and Bank’s commitment to fight corruption. participated in a third organized This will also include publication of the by the Bank during its Public project’s detailed and updated procurement Forum (October 2007). plan on the website. Bank: (a) An independent Bank: (a) Engage an independent qualified procurement specialist, procurement specialist charged with financed by the Bank as an reviewing bid specifications and bids for adviser to the Bank’s team, has Bank-funded contracts, and reporting reviewed all the bids as received: directly to MoF, MoR and Bank. (b) The Bank’s audit rights have (b) Include the Bank’s audit rights in the already been in Standard Bidding works contracts. Documents;(c) and (d) All major (c) Ensure works contracts are large enough contracts are more than US$30- to attract international and large domestic US$40 million each and are firms to bid. sliced and/or packaged together to (d) Ensure that contracts are not deliberately attract international and large split to circumvent the Bank’s prior review domestic firms. This was adopted thresholds or to limit competition. for other Bank-financed projects Key monitoring indicator: Increase in the such as KTSSP. number of qualified bids obtained [4-5]
Baseline: 2-3 bids Indicator: Number of bids received increased for subsequent similar Bank financed projects. Under the KTSSP, average 10 bids have been obtained for six road work tenders between 2010 and 2015. In 2016 under the EARTTDFP, between 17 and 20 bids have been received for four contracts. 2. Fraud and Client: (a) Establish a transparent, well Client: (a) (i) This is already part Corruption in documented, and consistently implemented of the Function of the Public the Road system for debarment of poor performers Procurement Oversight Authority. Construction and contractors engaged in fraudulent and (ii) The NCA was established Industry. corrupt practices through the NCA. under the project in 2011 to (b) Strengthen the Recipient’s capacity to regulate, streamline, and build design and supervise the construction of capacity in the construction roads, with particular emphasis on quality industry. and contract management. (b) The project had a training (c) Review on-going or recently completed component and a technical
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contract(s) to check for fraud such as assistance component to unbalanced bid, use of substandard strengthen the capacity of materials, lower quantities used than paid KeNHA. for, and other non-compliance with (c) Reporting corruption system is specifications. established in KeNHA’s website. (d) Determine through an independent An Integrity Committee in survey why some bidders who buy bid KeNHA undertakes training and documents choose not to submit bids. carries out surveys through independent firms. Quarterly Bank: (a) A technical audit to be conducted reports are forwarded to Ethics independently of the implementing agency and Anti-Corruption Commission on all contracts. (EACC). (b) Strengthen the use of contractual (d) A survey has not been remedies, such as performance bonds, in undertaken. case of project delays and poor performance. Bank: (a) Internationally recruited and qualified Key monitoring indicator: Percentage of engineering firms were selected government-funded projects completed on and performed day-to-day time, within budget, and in compliance with independent certification of the specifications (measured by periodic review quality of works, payment of random sample of large projects). certificates and compliance with contract terms. Baseline: Less than 40% completed on time (b) Unconditional performance and within budget. bonds were mandatory as additional remedies should the contractor perform poorly.
Indicator: At the stage of the ICR, it is still a challenge for the GoK to complete government- funded projects on time and within budget. Still less than 40% were completed on time and within budget. 3. Truck Client: (a) Review current efforts to address Client: (a) Management of 5 Overloading – corruption in control of axle loads, weighbridge clusters covering 9 lack of recommend appropriate measures to weigh stations, with 11 fixed enforcement and mitigate such risks, and examine the need weighbridges and 6 mobile corruption. for additional weight control infrastructure, weighbridges by the private preferably automated. sector through competitive (b) Ensure that road designs are bidding. Automated systems commensurate with the prevailing traffic (weigh-in motion) have been and axle load projections. installed at four of the weigh (c) Institute a fine that is commensurate with stations along the Northern damages to the roads and additional Corridor. deterrent measures to ensure compliance. (b) Current road designs are (d) Establish quarterly and random based on actual axle load surveys independent reviews of the weigh stations’ and projected design life activities including fines imposed and equivalent standard axle loads, collected. which produce higher designs but
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are more economic in the long Key monitoring indicator: At least 50% run. decrease in the percentage of overloaded (http://www.itsinternational.com/ trucks traveling on the Northern Corridor. categories/enforcement/features/k Baseline: Will be established once the first enya-wim-system-cuts-four-days- automated axle-load weighing station is off-journey-times/ constructed and functioning - expected in (c) The NCTTCA is monitoring one year from credit effectiveness. weighbridge compliance and reporting at their website weekly (http://top.ttcanc.org/)
Indicator: At four weighbridges along the Northern Corridor, average 95 % of compliance is reported between October 2014 and December 2015. 4. Delays in Value Client: (a) Assess the amount of VAT (a) The project assisted in Added Tax outstanding for reimbursement to mounting regular workshops to be (VAT) refunds, contractors and liaise with the MoF and the conducted by KRA for causing inflated Kenya Revenue Authority (KRA) to contractors to explain procedures prices in establish a system to minimize delays. and resolve any issues. The construction (b) Provide guidance notes and instructions President has directed that all the bids. to the contractors on VAT procedures and outstanding eligible tax refunds timelines. be made within the current fiscal Key monitoring indicator: Time elapsed year and the KRA is between receipt of required VAT implementing the directive. documentation by the KRA and issue of However, the NCTIP was refund to contractors decreased by at least exempted from VAT. Hence 50%. refunds were not applicable. Baseline: To be established by MoRPWH (b) A workshop was held in after survey of local contractors (within 3–6 November 2008 where the KRA months of effectiveness). made a presentation to contractors and consultants on VAT procedures.
Indicator: Since this is beyond the scope of the project, data has not been collected under this ICR. 5. Weak due Client: (a) The Recipient must increase its (a) and (b)The project promoted diligence on efforts in conducting due diligence of greater scrutiny, in line with the bidders. The bidders, particularly with regard to past provisions of the bidding integrity and performance, financial and technical documents. The results have been past capacity, equipment holding, and made public by KeNHA and the performance of compliance with tax laws and site safety Public Procurement Oversight contractors is a regulations. Authority. key determinant (b) Undertaking performance reviews to Indicator: Extra due diligence in of fraud and ensure poor performers are identified. verifying qualifications and past corruption risks. performance has been carried out. Key monitoring indicator: Extra due For example, companies under diligence in verifying qualifications and past temporary Bank suspension were performance is carried out by the Recipient informed that they were ineligible
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on all preferred bidders, as verified in the for Bank-financed contracts, and bid evaluation reports. none of them bid for the Mau Baseline: Insufficient due diligence on Summit-Kisumu contracts. This companies bidding for roads contracts. requirement has been adopted for subsequent Bank financed projects: KTSSP and EARTTDFP. 6. Absence of Client: (a) Cost estimates should be (a) and (b) The Cost Estimation robust cost developed from first principles and adjusted Manual for road maintenance estimates. for prevailing market conditions and, if works has been developed and possible, also comparable to markets in the published in 2011. The KRB region (i.e. East Africa). prepared a concept paper for the (b) Hire a consultant to develop new, robust development of a road works cost-estimates and regularly update the cost construction cost index (RCCI) methodology and estimates as necessary to and drafted the terms of reference reflect prevailing market conditions. (TORs) for an RCCI Committee (c) Exercise the audit rights under the to develop the RCCI and advise contract to review true cost structure of the road sector on the RCCI recently completed projects. trend. The RCCI will cover road Key monitoring indicators: Robust cost development and maintenance estimates developed; capacity developed in interventions carried out by the National Highways Authority to monitor road agencies in every financial actual costs obtained in the field. year. Baseline: There is no systematic monitoring (c) The contract provisions of unit costs by the MoRPWH. already in the Standard Bidding Document of the Bank permit such an audit and an independent review will be undertaken according to item 2(c).
Indicators: Cost estimation manual for road maintenance works has been published. Concept paper for the development of a road works construction cost index has been prepared. Capacity of KeNHA has been increased. 7. Weak capacity Bank (a) Facilitate training workshops Indicators: 24 key staff from to detect and focused on identifying red flags and each of the four PTT participated deal with fraud establishing controls in procurement, in the training workshop: KeNHA and corruption. financial management, and human resource – 6 (4 technical, 1finance and 1 management particularly in the road sector, procurement); MoTI(I) – 6 (2 including prevention of fraud in works technical, 3 finance and 1 contracts. procurement): and MoTI (T) – 12 (6 technical including 2 from Key monitoring indicators: At least three KCAA, 3 finance including 1 (3) key people from each of the four (4) from KCAA) Project Technical Teams have participated in the training workshops.
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Baseline: No training has taken place. 8. Weak complaint Client: (a) Strengthen systems to handle and Client ((a),(b), (c)) and handling effectively respond to complaints in a timely Indicator: mechanisms. manner. The NCA has been established (b) Establish and implement a and has set up a complaints communications strategy to build awareness handling mechanism. A of fraud and corruption and provide the complaint form can be picked up means for all parties to register their from and submitted to complaint complaints. desk of the NCA office or (c) Encourage the appropriate authority to through emails. The complaints institute strong whistleblower protection submitted are logged into an regulations. official complaint register and Key monitoring indicators: (a) Internet- responded to within 7 days. based complaint lodging system established. http://www.nca.go.ke/index.php/a (b) NCA established and functioning bout-nca/complaint-handling- satisfactorily as judged from its annual mechanisim reports. Baselines: (a) There is no Internet-based complaint lodging system. (b) There is no construction authority to register and monitor contractors. 9. Weak road Client: (a) Strengthen planning, Client: (a) Legislation has been management programming, budgeting, execution, enacted (Kenya Roads Act 2007) capacity. monitoring, and evaluation capacity of the which provided for the road agency. establishment of the three (b) Ensure the key positions for the three autonomous roads authorities— roads authorities are selected through a KeNHA, KeRRA, and KURA. competitive process based on their (b) Key positions of KeNHA, qualifications against the established TOR. KURA, and KeRRA have been filled through a competitive Key monitoring indicators: (a) Key staff in process based on qualifications the National Roads Authority, Rural Roads against the established TOR. Authority, and Urban Roads Authority are Indicators: KeNHA, KURA, and in place, and trained in work program and KeRRA prepare annual road budget planning, execution, monitoring and works programs and submit to the evaluation. (b) Annual work programs, KRB, which reviews the annual budgets and progress reports are prepared road works programs and and published. consolidates them into an APRP. Baseline: The three roads authorities are not The APRP is published in the yet fully functional. website of the KRB. 10. Overall Client, Bank, Civil Society: (a) Take Indicators: (a) Work program, transparency additional practical steps to foster a culture tender notices and awards, and and social of transparency and probity in the road vacancy announcements are monitoring of subsector. placed in the websites of KeNHA the road (b) Establish a communications strategy and KRB and overall construction. through radio programs and talk shows transparency and social where the issues facing the road sector are monitoring of the road discussed and the general public is asked to construction have been promoted. participate through expressing their views (b) Road user satisfaction survey, and comments. which involves an NGO/civil society organization was planned
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Key monitoring indicator: (a) to be conducted with the research Communication strategy in place and (b) at funds from Governance and least two road-user satisfaction surveys Anticorruption unit. However, the carried out during project implementation, funds were not allocated and the by NGO/Civil Society Organization. survey was not conducted. Baseline: No system in place for transparency and social monitoring of road construction outside of MoRPWH.
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MAP
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