Completion Report
Project Number: 30240 Loan Number: 1945-CAM (SF) November 2011
Cambodia: Greater Mekong Subregion: Cambodia Road Improvement Project
CURRENCY EQUIVALENTS
Currency Unit – riel (KR)
At Appraisal At Project Completion 30 August 2002 31 December 2010 KR1.00 = US$0.00026 $0.00025 $1.00 = KR3,816 KR4,053
ABBREVIATIONS
ADB – Asian Development Bank CBF – cross-border facilities CCA – common control area CCTV – closed-circuit television COI – corridor of impact COM – Council of Ministers DMS – detailed measurement survey DOP – Department of Planning EIRR – economic internal rate of return EMP – environmental management plan FRMR – fund for repair and maintenance of roads GDP – gross domestic product GMS – Greater Mekong Subregion ICB – international competitive bidding IRC – interministerial resettlement committee IRI – international roughness index km – kilometer m – meter m2 – square meter MDP – market development plan MEF – Ministry of Economy and Finance MPWT – Ministry of Public Works and Transport NCB – national competitive bidding NPV – net present value NR – national road OFID – OPEC Fund for International Development OPEC – Organization of Petroleum Exporting Countries PCR – project completion review PIB – public information brochure PMU – project management unit RCS – replacement cost study SEC – Southeast Corridor SEU – social and environment unit TA – technical assistance UXO – unexploded ordnance VOC – vehicle operating cost
NOTE
In this report, "$" refers to US dollars.
Vice-President S. Groff, Operations 2 Director General K. Senga, Southeast Asia Department (SERD) Director J. Lynch, Transport and Communications Division, SERD
Team leader S. Date, Senior Transport Specialist, SERD Team members P. Broch, Senior Transport Economist, SERD C. Clark, Safeguards Specialist (Resettlement), SERD N. Ouk, Senior Project Officer, SERD A. Samoza, Associate Project Officer, SERD P. Villanueva, Operations Assistant, SERD
In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Table of Contents
Page
BASIC DATA i MAP v I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 6 D. Disbursements 6 E. Project Schedule 7 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Related Technical Assistance 8 I. Consultant Recruitment and Procurement 8 J. Performance of Consultants, Contractors, and Suppliers 9 K. Performance of the Borrower and the Executing Agency 9 L. Performance of the Asian Development Bank 10 III. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Effectiveness in Achieving Outcome 10 C. Efficiency in Achieving Outcome and Outputs 11 D. Preliminary Assessment of Sustainability 11 E. Impact 12 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 13 C. Recommendations 14
Appendixes 1. Project Framework 16 2. Resettlement Activities 19 3. Appraisal and Actual Project Costs 28 4. Currency Equivalents 29 5. Projected and Actual Disbursements 30 6. Project Implementation Schedule 31 7. Chronology of Major Events 32 8. Organization Chart 35 9. Status of Compliance with Major Loan Covenants 37 10. Summary of Contracts 45 11. Economic Reevaluation 47 12. Quantitative Assessment of Overall Project Performance 55
BASIC DATA
A. Loan Identification
1. Country Kingdom of Cambodia 2. Loan Number 1945-CAM (SF) 3. Project Title Greater Mekong Subregion: Cambodia Road Improvement Project 4. Borrower Ministry of Economy and Finance 5. Executing Agency Ministry of Public Works and Transport 6. Amount of Loan SDR37,885,000 7. Project Completion Report Number PCR: CAM 1278
B. Loan Data 1. Appraisal – Date Started 9 August 2002 – Date Completed 19 August 2002
2. Loan Negotiations – Date Started 17 October 2002 – Date Completed 18 October 2002
3. Date of Board Approval 26 November 2002
4. Date of Loan Agreement 7 February 2003
5. Date of Loan Effectiveness – In Loan Agreement 9 May 2003 – Actual 20 May 2003 – Number of Extensions 1
6. Closing Date – In Loan Agreement 30 June 2007 – Actual 15 September 2011 – Number of Extensions 3
7. Terms of Loan – Interest Rate 1.0% per annum (grace period) 1.5% per annum (amortization period) – Maturity (number of years) 32 years – Grace Period (number of years) 8 years
8. Terms of Relending (if any) Not applicable – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower
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9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval
14 October 2003 27 June 2011 93 months
Effective Date Original Closing Date Time Interval
20 May 2003 30 June 2007 50 months
b. Amount (SDR millions) a Original Last Revised Amount Net Amount Amount Undisbursed Category Allocation Allocation Canceled Available Disbursed Balance 01A 25.20 29.15 1.72 27.43 27.43 0.00 01B 0.90 0.77 0.00 0.77 0.77 0.00 02A 3.48 3.13 0.01 3.12 3.12 0.00 02B 0.38 0.21 0.03 0.18 0.18 0.00 02C 0.07 0.04 0.02 0.02 0.02 0.00 03 0.15 2.49 0.26 2.23 2.23 0.00 04 0.08 0.13 0.01 0.12 0.12 0.00 05 0.76 0.76 0.02 0.74 0.74 0.00 06 0.23 0.09 0.06 0.03 0.03 0.00 07 0.67 0.67 0.00 0.67 0.67 0.00 08 5.96 0.44 0.44 0.00 0.00 0.00 Total 37.88 37.88 2.57 35.31 35.31 0.00 SDR = special drawing rights. a 01 = civil works, 02 = equipment, 03 = consulting services, 04 = HIV/AIDS program, 05 = incremental administrative costs, 06 = training, 07 = interest charge, 08 = unallocated. Note: The difference between the original amount and the revised total amount is due to a variation in the SDR– dollar exchange rate. Totals may not sum precisely due to rounding.
10. Local Costs (Financed) Appraisal Actual Amount ($) 18.50 6.27 Percent of Local Costs 24.50 23.33 Percent of Total Cost 23.80 7.21
C. Project Data
1. Project Cost ($ millions) Cost Appraisal Estimate Actual Foreign Exchange Cost 52.00 60.10 Local Currency Cost 25.50 26.87 Total 77.50 86.97
2. Financing Plan ($ millions) Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 17.50 21.82 ADB Financed 49.10 54.12 Other External Financing (OFID) 10.00 10.00 Subtotal 76.60 85.94 IDC Costs Borrower Financed 0.00 0.00 iii
Cost Appraisal Estimate Actual ADB Financed 0.90 1.03 OFID Financed 0.00 0.00 Sub-Total 0.90 1.03 Total 77.50 86.97 ADB = Asian Development Bank, IDC = interest during construction, OFID = OPEC Fund for International Development.
3. Cost Breakdown by Project Component ($ millions) Component Appraisal Estimate Actual A. Base Costs 1. Civil works 58.50 74.52 2. Land acquisition/resettlement 1.20 1.70 3. Relocation of utilities 0.20 0.00 4. Consulting services Construction supervision 4.60 4.67 Reorganization program 0.50 0.27 Poverty reduction monitoring program 0.10 0.03 5. Equipment 0.20 3.41 6. HIV/AIDS program 0.10 0.19 7. Project management 1.00 1.11 8. Training 0.30 0.04a Subtotal 66.70 85.94 B. Contingencies 1. Physical 6.50 0.00 2. Price 3.40 0.00 C. Interest Charge 0.90 1.03 Total 77.50 86.97 a Since an individual consultant was recruited for this program, the actual cost was much less than appraisal estimates. This training was originally intended for staff of project management unit 3, but they were too engaged in daily project implementation activities so they did not undertake the training.
4. Project Schedule Appraisal Item Estimate Actual A. Land Acquisition and Resettlement i. Commencement 15 Feb 2003 16 Sep 2005 ii. Completion 31 Dec 2003 30 Sep 2009 B. Date of Contracts with Consultants i. Prequalification and bid evaluation 1 Nov 2002 01 Oct 2003 ii. Detailed design and construction 31 Apr 2003 22 Jul 2004 supervision iii. Reorganization program Not specified 20 Oct 2005 iv. Poverty reduction 01 Jan 2005 5 Feb 2008 v. HIV/AIDS program 31 Dec 2003 8 Nov 2005 C. Completion of Engineering Designs Not estimated 30 Jun 2005 D. Civil Works Construction i. Date of first contract award 31 Aug 2003 30 Sep 2005 ii. Completion of works 15 Oct 2006 31 May 2009 E. Equipment and Supplies i. First procurement Not specified 6 Jun 2006 ii. Last procurement Not specified 1 Dec 2010 iii. Completion of equipment installation Not specified 31 Dec 2010
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Appraisal Item Estimate Actual F. Start of Operations i. Completion of tests and commissioning 31 Dec 2006 20 Jun 2009 ii. Beginning of start-up 1 Jan 2007 1 Jun 2009
5. Project Performance Report Ratings Ratings Development Implementation Implementation Period Objectives Progress From 30 Nov 2002 to 31 Aug 2006 Satisfactory Satisfactory From 1 Sep 2006 to 31 Aug 2007 Partly Satisfactory Partly Satisfactory From 1 Sep 2007 to 31 Dec 2010 Satisfactory Satisfactory
D. Data on Asian Development Bank Missions
No. of No. of Specialization Name of Missiona Date Persons Person-Days of Membersb Fact-finding 4–26 Jun 2002 6 48 a, b, c, d, e, f Appraisal 9–19 Aug 2002 6 36 a, b, c, d, e, f Special loan administration mission 1 14–17 Oct 2003 1 4 a Inception 22–31 Mar 2004 2 20 a, j Resettlement review mission 1 11–21 May 2004 1 4 k Resettlement review mission 2 19–27 Oct 2004 3 27 a, i, k Resettlement review mission 3 10–12 May 2005 5 15 f, l, m, n Loan review mission 1 24 Jun–4 Jul 2005 2 12 a, k Loan review mission 2 30 Nov–5 Dec 2005 1 6 a Loan review mission 3 1–10 Mar 2006 3 27 a, j, o Resettlement review mission 4 19–26 Apr 2006 1 8 k Loan review mission 4 12–20 Jun 2006 1 9 a Loan review mission 5 6–13 Sep 2006 2 10 a, m Loan review mission 6 25 Jan–2 Feb 2007 2 16 a, j Resettlement review mission 5 3–4 Sep 2007 2 4 f, p Loan review mission 7 15–24 Oct 2007 5 37 a, b, j, k, p Special loan administration mission 2 10–14 Dec 2007 1 5 a Environmental compliance review mission 1 9–15 Dec 2007 2 6 h, j Midterm review mission 11–20 Feb 2008 4 29 a, b, g, j Loan review mission 8 7–15 Jul 2008 1 1 a Loan review mission 9 16–22 Oct 2008 1 7 a Loan review mission 10 26 May–2 Jun 2009 3 20 a, j, n Loan review mission 11 5–6 Sep 2009 1 2 a Loan review mission 12 5–13 Oct 2009 3 27 a, j, n Loan review mission 13 11–17 Mar 2010 2 9 a, n Loan review mission 14 9–14 Jun 2010 1 6 a Loan review mission 15 3–13 Sep 2010 1 11 a Loan review mission 16 3–7 Dec 2010 1 5 a Project completion review 1–11 Mar 2011 3 20 a, j, n Project completion review for 29–30 Jun 2011 1 2 f resettlement a Some missions were fielded concurrently with other missions. b a = project officer/mission leader, b = project engineer/transport specialist, c = economist, d = counsel, e = financial specialist, f = resettlement specialist, g = social development specialist, h = environment specialist, i = portfolio management specialist, j = project analyst, k = staff consultant/resettlement specialist, l = country director, m = sector director, n = project implementation officer, o = project administration unit head, p = social safeguards officer.
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I. PROJECT DESCRIPTION
1. Good infrastructure is a prerequisite and foundation for a country’s successful economic and social development. Investments in roads have been a key part of a continuing program since 1990 to reestablish transport infrastructure in Cambodia that was severely affected by nearly 30 years of conflict. The Greater Mekong Subregion (GMS): Cambodia Road Improvement Project approved by the Asian Development Bank (ADB) in 2002 was conceived as part of this effort and aimed to help generate economic growth and social progress generally at the national level and specifically in the country’s Northwest, which was one of Cambodia’ poorest regions and in critical need of post-conflict reconstruction to enable resumption of economic activities.1
2. Economic cooperation by the six GMS countries 2 has been a major contributor to sustainable economic and social development and poverty reduction in the region. Improving transport is crucial to these efforts and to increasing subregional trade and tourism. The project’s overall objectives were to promote economic activities and facilitate trade between Cambodia, Thailand, and Viet Nam and help reduce poverty along the Southern Economic Corridor (SEC) and, specifically, in northwestern Cambodia. It aimed to (i) reduce poverty by providing all-year, all-weather road access to employment opportunities, markets, and growth centers in the Northwest, (ii) improve social conditions by providing all-year all-weather road access to education and health, and (iii) promote economic growth by reducing the cost and increasing the reliability of road transport, which would also encourage tourism. The rehabilitation of road infrastructure under this project was to complement other ADB-financed projects in urban development, water resource management, and energy.
3. The project design identified a significant need to make the road sector sustainable in Cambodia under the overall management of the Ministry of Public Works and Transport (MPWT). It also sought to mitigate the project’s potential adverse social impacts. For these reasons, the project also intended to (i) promote private sector participation and strengthen the domestic road contracting industry by providing opportunities in road construction and maintenance; (ii) work with an experienced nongovernment organization under the national HIV/AIDS framework to support efforts to control and create awareness of the disease; (iii) initiate a process of reform in the MPWT, with a particular focus on asset management in road sector; and (iv) establish effective road maintenance management and road maintenance financing systems, including axle load control.
4. The project had six components at appraisal, including the civil works, which encompassed 146.5 kilometers (km) of national road (NR) 6 and NR 5 from Siem Reap to Poipet, replacement of about 50 bridges and culverts on approximately 185 km of northern loop of NR 56 and NR 68, construction of a cross-border facility (CBF) at Poipet3, and construction of two permanent weigh stations in Poipet and Siem Reap. Work on all four roads included clearing of unexploded ordnance (UXO). The remaining five components involved (i) consulting services for construction supervision of civil works and implementation and monitoring of the resettlement plans related to civil works; (ii) consulting services to initiate a reorganization program for institutional strengthening of the MPWT; (iii) consulting services to establish a road maintenance
1 ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia for the Greater Mekong Subregion: Cambodia Road improvement Project. Manila (1945-CAM SF, $50 million, approved on 5 November 2002). 2 The members include Cambodia, the Lao People’s Democratic Republic, Myanmar, Thailand, Viet Nam, and Yunnan Province in the People’s Republic of China. 3 The city of Poipet is on the Cambodian side of the country’s border with Thailand, adjacent to the Thai city of Aranya Pratet.
2 strategy and funding mechanism; (iv) consulting services for an HIV/AIDS and human trafficking program and for implementation of a poverty reduction and monitoring program; and (v) equipment intended for the CBF and the MPWT reorganization program (database management equipment).
5. The project framework is in Appendix 1.
6. The borrower was the Kingdom of Cambodia and the MPWT was the executing agency. ADB’s loan from its Special Funds resources was equivalent to $50 million, including the equivalent of $7 million in local currency, and financed part of the project cost.4 As cofinancier, the Organization of Petroleum Exporting Countries (OPEC) Fund for International Development (OFID) provided a loan equivalent to $10.0 million, of which the equivalent of $1.0 million was in local currency. 5 The borrower provided the equivalent of $17.5 million to finance the local currency cost of the project.
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
7. The project was designed to support the government’s infrastructure development focus on improving the national and provincial road network and road sector sustainability to provide better access to the country’s rural areas. The project roads included strategic and rural access links that were important to trade and to reducing poverty in the Northwest. A key area of ADB’s operational strategy at the time of project design was rural economic development, which the project addressed. By focusing on government sector reform to help reduce poverty, the project was in line with both the government’s development strategy and ADB’s operational strategy.
8. The project also had subregional relevance. By rehabilitating NR 5, it would complete the upgrading of the link of the Bangkok–Phnom Penh–Ho Chi Minh City–Vung Tau road link that had been designated as a key GMS regional highway, or R 1. R 1 was one of 10 high-priority road projects identified in a subregional transport sector study in 19946 and the 10th GMS Ministerial Conference held in November 2001 had confirmed it as a core link in the SEC. In addition, one of the project roads, NR 6, provided direct access to Siem Reap, the location of Angkor Wat, a World Heritage site with high tourism potential. Improvement of NR 5 and NR 6, which link to roads providing access to several other temples in the north of the country, would also enhance the opportunities for greater tourism in the region.
9. Project formulation was based on the findings of ADB missions that included consultations with the government and beneficiaries. The missions also benefited from the feasibility study.7
10. Components were added during implementation for (i) construction of a common control area (CCA) building at Bavet,8 (ii) construction of five additional permanent weigh stations on the national roads and provision of vehicle monitoring equipment for axle load control, (iii) provision of
4 Refer to footnote 1. 5 The OPEC loan was signed on 30 May 2003, and became effective with the ADB loan. 6 ADB. 1993. Regional Technical Assistance for Promoting Subregional Cooperation Among Cambodia, the PRC, Lao PDR, Myanmar, Thailand and Viet Nam. Manila. 7 The main project preparatory technical assistance (TA) was TA 3868-CAM: GMS: Cambodia Road Improvement Project Engineering Design Update. The TA also had supplementary TAs. 8 Bavet- Moc Bai is the border between Viet Nam and Cambodia. 3 traffic signs and road furniture on NR 5, NR 6, and NR 7 to improve road safety, and (iv) emergency repairs of 2009 typhoon damage to NR 56 and the Bavet CBF roof.9
B. Project Outputs
1. Improvement of Roads
11. After UXO clearance, the project rehabilitated 146.5 km of NR 5 and NR 6 from Siem Reap to Poipet to asphalt-paved standards with paved shoulders, in line with the regional highway standards.10 All 47 bridges on these roads were replaced by new concrete bridges with safe bridge approaches. The project also elevated the road embankments and provided cross drainage along the entire stretch. In the densely populated areas in cities and town centers, concrete side drains were constructed on both sides of the roads to prevent flooding during the wet season.11 On NR 56 and NR 68, 38 new bridges and 21 box culverts were constructed to provide proper access during wet season. This work included a 2.7 km road realignment bypassing two historical bridges near O’chic Bridge on NR 68. All of these works, as described above, were implemented as planned at appraisal. Then, emergency repairs, not planned at appraisal, were carried out on 14 critical sections totaling 16 km in length on NR 56 to raise embankments and provide adequate cross drainage (para. 10). Due to these improvements, NR 56 was passable throughout the wet season in 2010.
2. Resettlement Plan
12. The civil works for road improvement had four contract packages: contract 6E (Siem Reap to Kralanh), contract 6F (Kralanh to Sisophon), contract 5F (Sisophon to Poipet) and contracts 56–68 (bridges and culverts in NRs 56 and 68). MPWT updated the resettlement plan prepared during the feasibility study at pre-construction stage in accordance with ADB’s Involuntary Resettlement Policy (1995). The resettlement plan covered all three contract packages for road improvement and one for the bridges and culverts. The MPWT implemented the updated resettlement plan successfully and compensated all eligible affected persons. The total cost was $1.7 million, of which $0.9 million was for the compensation for loss of land, property, and land use. However, the income restoration program was only partially successful because the envisaged relocation of affected vendors in three locations to three new project-provided markets was not fully achieved. The affected vendors got attracted to only one market and they lost half of their income. Affected vendors showed no interest in the other two markets because the provincial government allowed them to relocate near the road just outside the corridor of impact (COI). Only 5% of affected persons attended the vocational training. The details of the project resettlement activities are in Appendix 2.
3. Construction of Cross-Border Facilities
13. The project originally included construction of a new CBF at the Chhay Chhay Free Industrial Zone, which is about 10 km north of the border post at Poipet. This was cancelled in 2008 due to a border dispute and the inability of Cambodia and Thailand to agree on its location. The two countries also failed to agree on an MPWT proposal of another location about 3 km south of Poipet. In 2009, the MPWT proposed and ADB agreed to improve the existing CBF at Poipet and to provide a new CCA building at the Bavet CBF. The works at Poipet included a new
9 The typhoon severely damaged many sections of road in Cambodia in October 2009, including NR 56, as well as the roof of the CBF at Bavet. The project financed emergency repairs to the roof and works to raise embankments and provide sufficient cross-drainage on NR 56. 10 These standards are set by the member countries of the Association of Southeast Asian Nations. 11 This work proved effective during Typhoon Ketsana in October 2009, which was a 50-year flood.
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CBF main office buildings, a two-story building with Cambodian traditional architecture and a new tourist arrival building with toilet and waiting facilities. A CCA building with a common control inspection hall for inspection of freight vehicles and office facilities were built at Bavet. All these facilities were completed in 2010 when the project also financed the repair of the roof of the Bavet CBF damaged in the 2009 typhoon (para. 10).
4. Construction of Permanent Weigh Stations
14. The construction of two weigh stations to control overloading and thereby reduce road damage on NR 5 and NR 6 was included in the project at appraisal. ADB agreed during implementation to an MPWT request for an additional five weigh stations at strategic locations on NR 1, NR 5, NR 6, and NR 7. This furthered one of the project’s objectives—to preserve Cambodia’s road assets. The civil works for weigh stations were completed and each was equipped with high-speed, weigh-in-motion and low-speed, weigh-in-motion equipment for weighing axle loads of trucks. This enforced the country’s weight restriction road laws. The project also funded 38 portable weigh pads for mobile overload control units operated by provincial departments of public works.
15. Overloading control operations using the seven project-provided weigh stations began on 15 March 2011. An ADB project preparatory technical assistance (TA) project began a review of the axle load control program during the project completion report (PCR) mission.12 The findings, which are meant to guide the way forward, show that program so far has had mixed success and some failures. No firm assessment will be possible until firm indicators are selected and monitored. Meanwhile, the Ministry of Rural Development (MRD) initiated an axle overload control program for rural roads in 2011 and is drafting a sub-decree for axle overload enforcement on rural roads that is similar to one approved by the MPWT in 1999 for the national roads over which it exerts control.
16. The MPWT now chairs an interministerial national axle overload control committee (NAOCC) at the national level which was established to oversee all activities in axle load control. ADB’s project preparatory TA has proposed that the NAOCC be reorganized to include the MRD, which is the other major agency with jurisdiction over axle overload control on roads, as well as truck associations, civil society, development partners, and communities to bring about greater efficiency, transparency and accountability. It recommends that the NAOCC be co-chaired by the MPWT and the MRD, control all axle load control management and operations in the country, and provide for the relevant policy support, legislative formulation, financial support, periodic guidance, monitoring, audit, complaint handling, and inter-agency cooperation.
17. In addition, the TA has recommended that both the MPWT and the MRD need to have two fully staffed, full-time officers responsible for axle load control management and operations and supported by teams to perform day-to-day operations. The PMU3 of MPWT and PMU of MRD are to support the respective office of their own ministry with technical guidance and internal audit.
18. The TA findings, in response to the request of the minister of MPWT, also proposed an updated national comprehensive axle load control program to provide systematic policy, strategy, and planning in future interventions. It would include the reorganized NAOCC. When it prepares its draft final report, the TA may propose more comprehensively the proposed Program with all institutional, legal, operational and financial requirements with milestone dates required for achievement of each activity. This will also have a two-step approach for proposed action: first, to
12 ADB. 2010. Technical Assistance to the Kingdom of Cambodia for Preparing the Provincial Roads Improvement Project. Manila. 5 ensure the draft sub-decree of axle load control for MRD to be completed by November 2012; and second, to have the proposed NAOCC and the Program established by all parties within an acceptable timeframe. This timeframe needs to be included as a loan covenant for the proposed project that the aforementioned TA would design.
5. Consulting Services
19. As envisaged at appraisal, PMU 3 recruited the supervision consultants for project implementation in the following areas: (i) preconstruction activities, including detail design; (ii) supervising construction; (iii) the MPWT reorganization program; and (iv) the HIV/AIDS and human trafficking prevention programs. The supervision consultants also helped strengthen the capacity at the MPWT in procurement, contract administration, and quality control of works through day-to-day engagement with PMU 3 staff. The contract of the supervision consultants had to be extended until 31 December 2010, which was the revised final loan closing date.
20. The consulting services helped the MPWT initiate much needed institutional change and restructuring to improve its management of the road sector. One result was the establishment on 1 February 2007 of an interministerial committee for reorganization (ICR) chaired by the minister, which discussed and began the reorganization program as well as changes in a draft transport policy.
21. The consultants also supported an MPWT proposal that the ministry’s department of planning (DOP) be promoted to a core position13 in the reorganized structure. While the country’s Council of Ministers (COM) is now reviewing this proposed organization structure, the minister has reorganized its general department of administration services by promoting the ex-director of the DOP to be director general of planning and administration services. This raised the DOP to core department standing (para. 32).
22. The consultants helped implement the project information campaigns for construction workers and beneficiaries on HIV/AIDS and human trafficking before and during implementation. The project distributed almost 74,000 condoms to villagers and workers at entertainment establishments in the project provinces.
23. Although it was planned to have support from the consultants to establish a road maintenance strategy and funding mechanism under Fund for Repair and Maintenance of Roads (FRMR), this did not happen. The government closed FRMR on 27 September 2006, which resulted in the removal of the related loan covenant (Schedule 6, para 7 of Appendix 9) from the loan agreement. Nevertheless, the consultants supported the Japan Fund for Poverty Reduction (JFPR) by providing training to MPWT14. This JFPR, approved by ADB in 2004, was implemented in parallel with the project.
6. Equipment
24. The equipment component was not laid out in detail at appraisal but the PMU3 gradually defined the scope during implementation. First, equipment, including software for database management needed for institutional strengthening program, was procured. The PMU3 also determined that more weigh stations were needed to widen the coverage of the axle load control
13 The DOP was previously under the ministry’s directorate general of administration and did not have a central role in the MPWT structure. 14 ADB. 2004. JFPR Project CAM-9048: Assistance for Mainstreaming Labor-based Road Maintenance of the National Roads Network. Manila.
6 effort. The additional equipment increased the component’s cost. Equipment procured under the project comprised (i) computer equipment and software, (ii) portable weigh pads, (iii) vehicle monitoring system for permanent weigh stations, (iv) office furniture and computer equipment for the CBF and the CCA, (v) traffic signs and road furniture for NR 5, NR 6, and NR 7, and (vi) closed-circuit television (CCTV) for weigh stations.
C. Project Costs
25. The appraisal estimate of the project cost was $77.5 million. Foreign exchange costs were to be $52.0 million (67% of project cost). Local currency cost was estimated at $25.5 million (33% of project cost), including taxes and duties. ADB provided a loan equivalent to $50.0 million from its Special Funds resources to finance 64.5% of the project cost and 83.0% of the foreign exchange cost. OFID provided $10.0 million in cofinancing (or 12.9% of the project cost) to cover $9.0 million of the foreign exchange cost and $1.0 million of local currency cost. ADB and cofinancing funds totaled $60.0 million, or 77.4% of the project cost. The borrower was to finance the remaining local currency cost, estimated at the equivalent $17.5 million. The appraisal estimate included physical contingencies and provisions for price escalation on the foreign exchange and on the local currency costs, as well as an interest charge during construction.
26. The PCR mission estimated the actual project cost at the equivalent of $86.97 million, including a foreign exchange cost equivalent to $60.10 million (about 69.1%of the total) and a local currency cost equivalent to $26.87 million (30.9%). ADB financed the equivalent of $54.12 million, or about 62% of the project cost. OFID cofinancing accounted for the equivalent of $10.0 million, or about 11.5% of the project cost. The government funded the remaining local currency cost, equivalent to $21.82 million.
27. The actual cost for the civil works for the roads and bridge contracts was $74.52 million (including physical and price contingencies), compared with the appraisal estimate of $68.4 million. The increase was largely due to high price adjustment payments in accordance with the International Federation of Consulting Engineers Conditions of Contracts and the unenvisaged post-typhoon emergency works for drainage structure reinforcement and emergency repair on NR 56. This overrun was offset by changes in the special drawing right–dollar exchange rate that increased the value of the loan, which was denominated in special drawing rights, by about $8 million during project implementation. This appreciation also enabled the project to finance additional works (para. 11). The actual cost for consulting services for construction, $4.6 million, did not change from the appraisal estimate. The summary of appraisal and actual project costs is in Appendix 3. Dollar–riel equivalents for 2002–2011 are in Appendix 4.
D. Disbursements
28. The appraisal mission did not prepare a disbursement schedule but the PCR mission developed a projected and actual disbursement schedule based on the implementation schedule at appraisal (Appendix 5). Loan disbursement was slower than expected because of delays in the recruitment of supervision consultants and in implementation of some civil works contracts. The inexperience of the PMU 3 staff in projects with many components was another reason for slow initial disbursements. The staff eventually overcame these difficulties. The PMU 3 used an imprest account and statement of expenditure procedures for local expenditures for training and incremental administrative expenditure. The final disbursement was completed on 27 June 2011, 90 days after the actual date of loan closing. With the borrower's submission of imprest account liquidation confirmation, ADB was able to close the loan account on 15 September 2011.
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E. Project Schedule
29. The ADB Board approved the loan on 26 November 2002. After the loan agreement was signed on 7 February 2003, the loan became effective on 20 May 2003. As envisaged at appraisal, the project was to be implemented over 40 months from January 2004 to June 2007, with construction completed by December 2006. This time frame excluded preconstruction activities that began under advance procurement action in 2003. One of the four civil works contracts was completed in June 2008 and the remaining three contracts were completed between February 2009 and May 2009.
30. The original loan closing date was 30 June 2007. It was extended three times to 31 December 2010 at the request of the borrower, the Ministry of Economy and Finance (MEF). In March 2007, the MEF requested ADB approval for the first extension of 2 years, from 1 July 2007 to 30 June 2009. This was mainly due to the delay in selection of supervision consultants. The second loan extension (from 30 June 2009 to 30 June 2010) was due to implementation delays in three civil works contracts. The MEF asked for a third and final extension from 30 June 2010 to 30 June 2011 to implement additional works using the loan savings but ADB agreed only to a 6- month extension because the loan period was already too long. The PMU 3 ensured that all remaining works and procurement of equipment were completed by this final 31 December 2010 closing date. The extension of the loan enhanced the project’s development impact by enabling the additional works financed by the loan savings. The project implementation schedule is in Appendix 6. Appendix 7 contains a chronology of major events.
F. Implementation Arrangements
31. The MPWT was the executing agency. It established the PMU 3 under its general directorate of public works as the implementing agency. The director general of public works was the project director and the deputy director general of public works was the project manager of the PMU 3. The PMU 3 was responsible for (i) preconstruction activities related to the civil works (prequalification of contractors, preparation of tender documents for ADB approval, acceptance of detailed designs, pre-bid meetings, and evaluation of bids and award of contract); and (ii) engagement of consultants for detail design and construction supervision of the civil works. The PMU 3 project manager was responsible for the day-to-day implementation of the project. The project director and project manager remained in place throughout implementation. The PMU 3 maintained a staff of 22 during implementation, including an administration manager, a technical manager, an accountant, two counterpart engineers, and support staff. As a part of the MPWT reforms proposed under the project (paras. 21 and 22), a social and environment unit was established in the MPWT’s DOP, which undertook the coordination and monitoring of resettlement, environment, and social issues during project implementation. The organizational structure of the MPWT is in Appendix 8.
G. Conditions and Covenants
32. All loan covenants were either complied with or partially complied with, except the covenant on a draft road law. The draft road law encompasses all roads within Cambodia, under the jurisdictions of MPWT, MRD, and other agencies like provinces and cities (a minor portion only). The draft could not be approved within the Project period since MPWT has no jurisdiction over the other agencies regarding their road right-of-way (ROW) regulation, which is the principal contribution from each agency for the draft law. Thus, MPWT opted to approve the related ROW subdecree separately. Therefore, COM has approved MPWT’s Subdecree of Right of Way on 23 November 2009. But the remaining part of the ROW Subdecree for other Ministries and Provincial Government are beyond the jurisdiction of MPWT. Details of compliance with the loan
8 covenants are in Appendix 9.
H. Related Technical Assistance
33. No related technical assistance was associated with the project.
I. Consultant Recruitment and Procurement
1. Consultant Recruitment
34. Consultant recruitment was in accordance with ADB’s Guidelines on the Use of Consultants (2002, as amended from time-to-time). Recruitment of the design and supervision consultant required for detailed design and supervision during implementation was delayed for more than 1 year due to an incorrect procurement decision by ADB. The consulting contract was based at appraisal on a 6-month design period and a 36-month construction period ending in December 2007 and was to cover 200 person-months of international and 1,000 person-months of national experts. The contract had to be extended until the end of the revised loan closing date through variation orders due to resettlement and construction delays. The estimate of actual input at completion was 270 person-months for international consultants and 1,039 person-months for national consultants.
2. Procurement
35. The procurement of all works and goods under the project was done in accordance with ADB’s Procurement Guidelines (2002, as amended from time-to-time). To expedite procurement processes, ADB approved advance procurement action to permit prequalification of the civil works contracts in 2003. Major procurements out of the Project’s 23 procurement packages are described in paras. 37–39.
36. Four major civil works contracts followed international competitive bidding (ICB) procedures, with prequalification. This procurement process started on 30 June 2005, with prequalification for all four contracts. The contracts for contract 56–68 were signed on 30 September 2005, and those for contracts 6E, 6F, and 5F on 17 October 2005.
37. The PMU 3 prepared a contract for traffic signs and roadside furniture for NR 5, NR 6, and NR 7. It was awarded in March 2007 under ICB procedures. Another ICB contract was awarded in April 2008 for the vehicle monitoring system for the seven weigh stations. The ICB contract of road furniture streamlining for NR 5, NR 6, and NR 7 was awarded in September 2010. No delays occurred during procurement or implementation under these contracts.
38. Civil works for the seven weigh stations followed the local competitive bidding procedure and the PMU 3 completed the procurement process in 8 months. The PMU 3 subsequently awarded a national competitive bidding (NCB) contract for concrete slabs and steel roofs for the weigh stations in January 2009. Civil works for the CBF at Poipet and the CCA at Bavet were awarded under NCB and completed in 3 months. The NCB contract for supply and delivery of the surveillance camera system for weigh stations (NCB) was awarded in November 2010. Procurement of portable weigh pads was done through an international shopping procedure in three batches in 2006, 2007, and 2008. None of these procurements experienced delays.
39. Details of all procurement of works and goods completed during project implementation are in Appendix 10. A total of 30 national contractors took part the procurement process, which indicated growth in the country’s contracting industry. 9
J. Performance of Consultants, Contractors, and Suppliers
40. The performance of the consultants, contractors, and suppliers is rated satisfactory overall. The consultants performed their tasks professionally in accordance with their terms of reference. The consultant firms provided technically sound experts in each field of expertise required. The consultants helped the PMU 3 complete 23 procurement processes without a major issue. The firms mobilized foreign experts and national experts on time and supervised construction and managed contracts effectively. The consultants produced all monthly reports and quarterly reports and a project completion report punctually.
41. The contractor for 6E, 6F, and 5F lacked staff with appropriate technical and managerial skills from the beginning of the contract in October 2005. It also seemed to lack the logistical capability to handle the process of importing construction equipment efficiently. This contributed to initial delays in civil works. Up until a major flood in 2007, progress was slow and it seemed apparent that the contractor could not complete the work on time. However, the contractor made additional efforts beginning in the second quarter of 2008, using new management staff, and progress improved. All three civil works contracts along NR 5 and NR 6 were completed on 31 May 2009.
42. The PCR mission inspected all the road works and found the quality of construction to be satisfactory. The road furniture and safety facilities were properly installed. The contractor engaged to clear the project sites was mobilized on time and cleared a considerable amount of UXO without accident or injury. The work was completed on 30 June 2008, 3 months ahead of schedule. In 2010, the same contractor undertook the emergency repair of NR 56 under a contract variation and successfully completed the work in December 2010.
43. Two local contractors were mobilized for the construction of the CBFs in Poipet and Bavet on time in October 2009, continued their work during the dry season, and completed it in June 2010. The quality of the work was satisfactory and involved no environmental or social issues.
44. Although the contractor for the civil works for the weigh stations was mobilized on time, it failed to properly manage work at the seven scattered locations. Although the work was completed on time, the material and workmanship of buildings, toilets, and generators were defective. This was rectified during the defect liability period.
45. Although the manufacturer produced the vehicle monitoring systems on time, the supplier did not install the equipment for the weigh stations on schedule. This was due to a lack of technicians and poor site management. The supplier changed its installation team and asked the manufacturer to complete the installation. After the supplier’s installation, the supplier and manufacturer disputed responsibility for repairs during the warranty period. The supplier refused to rectify the defects of equipment and thus failed to meet its contractual obligations. The MPWT deducted the cost of the necessary repairs from the contract amount and entered into a contract with the manufacturer to rectify the defects. The performance of other suppliers was satisfactory.
K. Performance of the Borrower and the Executing Agency
46. The performance of the borrower and the executing agency is rated satisfactory. The MPWT was responsible for overall project implementation and its PMU 3 was the implementing agency. Counterpart funds were delayed in 2006 but this situation improved gradually over implementation. The approval process between the MPWT and the MEF for disbursement of certified payments was slow at first. This improved gradually in later years but contributed to
10 contractual delays. The PMU 3 was responsible for day-to-day implementation activities and managed physical implementation and financial control effectively, with the help of the supervision consultants. Although some civil works were delayed, the quality of finished work was highly satisfactory. There seem to be some governance issues related to the operation of permanent weigh stations linked with axle load control activities; of improper fining of overloaded vehicles and unloading of vehicles.
L. Performance of the Asian Development Bank
47. The performance of ADB is rated satisfactory. ADB conducted 20 missions to monitor the project, including an inception mission, 4 special loan administration missions, a midterm review mission, and the PCR mission. Four special missions focused on social, resettlement, and environmental reviews of social safeguard compliance during construction. All review missions included site visits that followed meetings with the PMU 3 and the MEF. Three separate ADB mission leaders administered the project during implementation. The ADB missions provided guidance on technical issues, preparation and evaluation of bid documents, social safeguards issues, and reallocation of loan proceeds and disbursement. They also closely monitored the overall project budget in coordination with the PMU 3 and the MEF to avoid cost overruns. ADB also reviewed and monitored the proposed reorganization of the MPWT and the formulation of transport policies to make planning and implementation of transport infrastructure projects in Cambodia efficient. ADB emphasized the establishment of a system and organizational framework for a country program to control truck overloading, an issue critical to the protection of the rehabilitated road assets. ADB further helped the MPWT initiate the program and to work to make enforcement sustainable. These contributions were substantial. However, ADB also contributed to the initial delay in the selection of a detailed design and supervision consultant.
III. EVALUATION OF PERFORMANCE
A. Relevance
48. The project is rated highly relevant. It was consistent with the government’s development objectives and in line with the ADB’s operational strategy in the road sector in Cambodia. The project was particularly relevant in the context of the strategic needs to develop the northwestern part of the country and to reduce poverty by providing all-year, all-weather roads in one of the country’s poorest regions. The project was also relevant in terms of regional cooperation and integration because it completed an important link in the GMS R1, which is an integral part of the GMS SEC.
B. Effectiveness in Achieving Outcome
49. This report rates each of the components and the project as a whole highly effective. The outcome of the project as envisaged at appraisal has been substantially achieved. The project’s primary purposes of increasing the movement of people and goods and vehicles between Siem Reap and Poipet on the country’s border with Thailand and reducing vehicle operating costs (VOC) and travel time were achieved. The project realized its goals of helping to provide all-year and all-weather road access to the region and supporting the development of tourism. The new CBF in Poipet provided better services for tourists coming from Thailand and for increased cross-border activities in the future. The fact that cross-border movement has not increased significantly at Poipet is due to a border conflict that began in 2008 and was beyond the project’s control. Since 2009, when tension eased, trade across the border has increased steadily and tourism picked up in 2010.
11
50. Although no specific target was set at appraisal for VOC reductions, it has been conservatively estimated that these costs have been reduced by 10% for passenger cars and by 15% for trucks and buses. Travel time from Siem Reap to Sisophon has been reduced by more than 50% during much of the year. Similar reductions have been achieved from Sisophon to Poipet. (The saving effect for the whole year was not easy to estimate because the road was often not passable during rainy season before construction.) The average trip time on the bus route (Siem Reap to Poipet) declined from 6 hours to 2.5 hours after the project.
51. Traffic count data suggest that traffic on NR6 in 2010 was approximately double that in 2006—much higher growth that could have been expected from normal expansion rates for several vehicle types. This indicates that the road improvement generated new traffic on the route. Traffic increased by over 50% on NR 5, mostly in 2008–2009.
C. Efficiency in Achieving Outcome and Outputs
52. The project and each of its components are rated efficient in achieving the project outcome and outputs. Although the project was delayed by 39 months, it was completed within budget and expanded on its original development objectives through loan savings. The PCR mission reevaluated the economic internal rate of return (EIRR) for each road section and the project overall. Economic viability was assessed by computing all incremental benefits and costs resulting from project implementation. The net present value was calculated as the sum of all savings minus the capital costs, discounted to base year values at 12.0%. All four components are highly viable, with positive net present values and EIRRs well above the target 12.0%. The project has an overall EIRR of 37.8%, much higher than that estimated at appraisal (30.7%). As would be expected, the higher traffic levels produced higher rates of return. The highest EIRR (61.1%) was for the Sisophon–Poipet road component, which had a lower capital cost per kilometer and significantly more traffic than the other project sections. The primary differences between reevaluated and appraisal EIRR were due to (i) revised economic costs derived from actual costs, (ii) longer construction periods caused by implementation delays, and (iii) differences in traffic growth estimates at appraisal and after completion.
D. Preliminary Assessment of Sustainability
53. The road component is rated likely to be sustainable. The asphalt pavement provided under the project is more durable and lasts longer than double bituminous surface treatment and costs less to maintain. In addition, the roads are equipped with safety facilities and proper road furniture. Expenditure on road maintenance in Cambodia was previously well below what was required, given the condition of the road network, but has increased from almost $0.00 per km in 2002 to $13,917 per km in 2010. The PCR mission found the project roads to be in good condition, with no sign of damage or immediate need for significant periodic maintenance. Because heavy truck traffic on the Poipet to Sisophon road is increasing due to growing trade between Cambodia and Thailand, this section will probably need periodic pavement maintenance beginning in late 2014. MPWT reorganization is also considered sustainable.
54. The project weigh stations can play an important role in overall road sustainability in Cambodia because the axle load restrictions are intended to ensure that roads, including the project sections, do not deteriorate from truck overloading. Six of the seven stations remain operational. One has experienced access problems due to encroachment by residents adjacent to the station, which effectively blocked constructing the security fence at the perimeter of the weigh station. Monthly reports from the two stations on the project road—at Poipet on NR 5 and Siem Reap on NR 6—show that overloading is decreasing, which would benefit project road
12 sustainability. Nevertheless, many issues15 need to be resolved to make sure that the monitoring by the weigh stations is actually accurate and efficient. In fact, it is unlikely that this will be the case or that the stations will be sustainable financially without continuous interventions and close monitoring by ADB through ongoing and future projects. Further financing by ADB needs to be conditional on proposed organizational reforms under the ongoing TA for Provincial Roads Improvement (see footnote 12).
E. Impact
1. Environmental Impact
55. No adverse environmental impacts were envisaged at appraisal because the project involved the rehabilitation of existing roads. The initial environmental examination completed during project preparation concluded that the environmental impacts of the project during construction would be minor.
56. The contractors did not strictly comply during initial construction with the environmental impact mitigation measures included in the civil works contracts but improved mitigation after repeated warnings and thorough inspection by the supervision consultants. The environmental concerns addressed included the risks of (i) air pollution due to dust from construction, (ii) insufficient traffic control measures to minimize accidents during construction, (iii) inadequate control of borrow pit slopes for the road sub-base, (vi) erosion of embankments, and (v) oil spills and debris from construction residuals. The contractors provided flagmen, warning signs, and safety facilities.
2. Socioeconomic Impact
57. The socioeconomic impact, including the impact on poverty, of the project has been significant, as is evident from achievement against the indicators of the project framework (Appendix 1). The PCR mission found that development has increased significantly along NR 5 and NR 6 since 2002, with photographs taken during project implementation showing far fewer residences, buildings, and shops along the project road sections at the start of the project. Provincial capital and district centers have changed their faces in development: of roadside buildings through modernization, especially shops and houses along the rehabilitated roads. One university has been built in Sisophon. Road improvement has led to greater passenger traffic and commercial activity.
58. The one adverse impact noted by the PCR mission was an 80% increase in traffic accidents during 2008–2010 along the project roads. This may be due to the significantly higher vehicle speeds made possible by better road conditions provided by the project. In addition, road safety education for road users and enforcement are both clearly inadequate, even though the project road sections are equipped with road safety features.
3. Resettlement Impact
59. The project affected 2,888 people. Of this total, 2,877 received compensation for loss of land use and structures. Of the remaining 11 persons, 2 were found ineligible because their
15 Operational issues are common at the weigh stations. They include poor etiquette by weigh station staff, absence from their work stations, failure to operate the weigh stations 24 hours a day, and removal of main power from CCTV monitoring etc. The PCR mission heard allegations that weigh station staff collect off-the-record penalties from truck drivers. The PAOCC has taken no concrete action on these issues yet. 13 affected land was outside the COI. The other 9 persons did not collect their compensation despite public announcements through media and efforts to contact them individually.
60. From the perspective of safety and potential future expansion of the roads, it would have been preferable to relocate all affected persons from the ROW. Some affected individuals wanted to remain for livelihood reasons, however, the government permitted them to move affected houses, shops, and structures to locations outside the COI but within the road ROW. They did not receive title to this land. Compensation was provided for loss of privately owned land. The compensation for the loss of the use of land within the ROW was equivalent to about 10 years of income from rice production per square meter of land use lost. All affected persons were compensated for loss of structures and provided with relocation assistance regardless of whether they were originally located inside or outside the ROW.
61. The affected persons were given an income restoration allowance of $100 per household. Although the project established three new market sites, the PCR mission found that only one market was operating as of June 2011. The mission also observed that, despite the new facilities, the vendors who relocated to this market in Kork Snoul, Siem Reap lost income. The market was located too far from the road to attract passing traffic. The other two market sites in Banteay Meanchey did not attract the affected vendors. The main contributing factor was the permission given by provincial government for affected roadside vendors to move back from the COI and continue to operate within the road ROW. The MPWT carried out the income restoration program from April 2007 to March 2008. Only 5% of the total affected persons attended vocational training courses provided under the project resettlement program and absenteeism among those registered for the courses was high.
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS
A. Overall Assessment
62. Based on the weighted average rating value of the relevance, effectiveness, efficiency, and sustainability criteria, the project is rated successful overall. The project was implemented fully and successfully, costs were properly controlled, and loan savings helped finance additional works that enhanced its outcome. The quantitative assessment of the overall project performance is in Appendix 12.
B. Lessons
63. Match covenants with jurisdictions. One covenant required government approval of the road law and transport policy. However, the formulation of the road law and transport policy that was expected under the project was delayed. The requirement should not have been a loan covenant because the MPWT did not have jurisdiction over rural roads and thus lacked the ability to comply fully. Loans should not include covenants that impose requirements on an executing agency that lacks full jurisdiction to meet them.
64. ADB teamwork. ADB needs to have better teamwork approach between its operational support divisions for activities, such as consultant recruitment where support divisions have more authority over approvals. The project completion review mission observed that absence of internal coordination created the initial delay in the consulting selection process.
65. Faster disbursement process. Disbursement was slower than specified in the conditions of contracts. In addition, local funds were disbursed much later than ADB funds. The government needs to reduce the time for disbursement of funds to improve cash flow of the contractors.
14
66. Better planning of vendor relocation. Planning for relocation of roadside vendors in projects such as this needs to pay careful attention to the viability of new market area sites and to involve close consultation with the affected individuals. Moving vendors from a roadside to proper market facilities does not guarantee that they will earn the same income as before. A new marketplace housed in a linear building running parallel to the road and provided with service lanes could give better access to relocated vendors.
67. Closer ADB watch on environmental issues. Closer ADB supervision through regular submission of environmental monitoring reports by MPWT, along with regular safeguard reviews, will help avoid or minimize adverse environmental impacts due to project implementation.
C. Recommendations
1. Project-Related
a. Future Monitoring and Follow-Up Action
68. Maintenance is critical to the long-term sustainability of the project roads. The rapid growth of traffic on the roads since appraisal highlights the need to ensure that budget for maintenance remains adequate. ADB should monitor the maintenance of the roads by regularly analyzing annual government budget allocations and should introduce conditions in future projects to ensure that the project facilities are maintained properly and are sustainable.
69. Through ongoing and planned interventions in the road sector, ADB should also closely monitor the axle load control activities and weigh station operations to make sure that they are effective, sustainable, and free of governance issues. This will reduce damage from overloading to pavement and road structure and save on long-term maintenance. The way forward proposed by the ongoing TA for Provincial Roads Improvement is through organizational reforms of the NAOCC and a systematic, all-inclusive approach in the future.
70. The increased vehicle speeds made possible by the project road improvements have made road safety a major issue. To help prevent accidents, more national and community-based education programs for road users are needed. Non-existent police enforcement of speed limits and violations of traffic regulations must now be in place. ADB has to consider these measures when planning future interventions.
b. Covenants
71. Strict adherence to the resettlement action plan is essential. To avoid delays to civil works, affected people need to be informed of compensation rates and their entitlements as agreed under the resettlement action plan. The government should allocate more resources at the start of the project to implement the resettlement plans.
c. Timing of Project Performance Evaluation Report Preparation
72. The PCR mission recommends that the project performance evaluation be undertaken in 2015.
d. Implementation Period
73. The PCR mission suggests the following recommendations be considered to facilitate 15 timely project implementation:
(i) post-qualification instead of pre-qualification procurement method should be used to reduce the procurement period. (ii) An individual consultant as project management cum procurement advisor with knowledge of ADB’s procurement procedures should be financed out of loan funds as an advance action to help government in the recruitment of consultants and procurement. This will accelerate implementation. (iii) The executing agency should seek additional benefits from the consultants engaged in the project by availing of technical knowledge that can be transferred during the day-to-day activities of project implementation.
2. General
74. If the country’s road network is to continue to serve Cambodia’s people and contribute to social and economic growth, the MPWT must make maintenance of its road assets a top priority. The government must make funds available for effective and timely maintenance of road assets. The MPWT also needs to provide more support to the private sector contracting industry, especially for maintenance works. The MPWT currently maintains most roads using its force account, an approach that is subject to problems of quality and transparency. ADB’s loan for the Road Asset Management Project16 initiated support to the MPWT for such changes in the use of its force account since 2007. Though this project is ongoing, ADB will need to continue support for these changes in future.
16 ADB. 2009. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia for the Road Asset Management Project. Manila.
16 Appendix 1
PROJECT FRAMEWORK
Performance Issues and Design Summary Indicators/Targets Project Achievements Recommendations Goal Promote economic and Improved social The rate of poverty in the The project social development in indicators in the road's project area decreased from completion review the project area of area of influence 40% in 2002 to 20% in 2010. mission simplified influence and promote the targets as in general economic Increased trade and Annual Tourism: visitors in project growth at national and tourism the project area increased achievements subregional levels from 0.9 million in 2006 to 2.7 million in 2010.
Reduced cost of VOC was reduced by 10% for There was no transport and increased cars and 15% for buses and appraisal estimate traffic trucks from 2002 to 2010. of VOC so the VOC reduction is a safe At three locations on the estimate. project roads, motorized traffic grew 45%–90% from 2006 to 2010. Purpose Reduce poverty by Agricultural and trading Rice production increased by This is based on a providing efficient all- activities developed 70 times in beneficiary sample survey of weather access to households from 2006 to 2010. households. employment opportunities, Internal and external Internal linkages: In 2006, 41% markets, and growth linkages in the project of residents needed to travel centers area of influence more than 1 hour to reach the strengthened nearest village. In 2010, it took them 15 minutes.
External: Project roads completed improvement of GMS R1 and strengthened the SEC.
Improve social Displaced persons Resettlement completed conditions by resettled providing efficient all- weather access to Education and health Primary school enrollment education and health indicators improved increased from 92.4 in 2005 to providers 95.8 in 2009.
Secondary schools enrolment increased from 9.5 in 2006 to 18.3 in 2009.
The number of beneficiaries reaching a private health clinic within 15 minutes increased 2 times from 2006 to 2010.
Promote economic Improved traffic safety Traffic accidents on project growth by reducing roads increased by 80% from This is the only the cost of transport 2008 to 2010. project negative Appendix 1 17
Performance Issues and Design Summary Indicators/Targets Project Achievements Recommendations effect seen. Project Increased cargo and Leisure trips in the project area provisions of road passenger traffic increased by 5% from 2006 to safety are volumes 2010. insufficient. Further external interventions Reduced cost of VOC was reduced by 10% for in road user transport provision cars and 15% for buses and education and traffic trucks from 2002 to 2010. regulation enforcement are Tourist industry further Tourism: visitors in the project necessary. developed area increased from 0.9 million in 2006 to 2.7 million in 2010.
Strengthen the Several viable domestic The PMU 3 found more than domestic road road contractors 30 domestic contractors to contracting industry established participate in the bidding by providing training processes. and opportunities in road construction Outputs Siem Reap-Sisophon- Roads rehabilitated to Roads were rehabilitated to Delays occurred due Poipet NRs 5 and 6 agreed design standard agreed standards. to procurement and (about 150 km) within 3 years of start of slow progress by rehabilitated civil works contractors
Structures constructed Structures constructed Structures were built to agreed Though delayed due on NRs 56 and 68 to agreed design design standards. to initial project standards within 3 delays, all structures years of start of civil are of sound quality. works
UXO cleared within the UXO cleared prior to UXO cleared prior to start of right-of-way start of civil works civil works
Local contractors At least 5 local More than 30 capable local capable of contracting contractors capable of contractors identified by MPWT and performing simple bidding for and during procurement process. road works performing routine and recurrent maintenance tasks
Resettlement plan Affected persons All affected people were implemented property compensated compensated. Activities (i) Selection of April 2003 July 2004 Though delayed due construction to initial project supervision delays, all the consultant activities were (ii) Preparation of July–August 2003 June 2005 completed. tender documents and selection of contractors (iii) Implementation of October 2003 September–October 2005 road rehabilitation
18 Appendix 1
Performance Issues and Design Summary Indicators/Targets Project Achievements Recommendations works (iv) Implementation plan January 2003 March 2008 reorganization of MPWT: (v) Social and July 2003 May 2008 environment division established (vi) Department of August 2003 October 2008 Planning repositioned (vii) Report of February 2005 November 2008 Interministerial Committee for Reorganization submitted to COM Inputs Civil works contract August 2003 Awarded in October 2005 Delayed due to initial project delays COM = council of ministers, GMS R1 = Greater Mekong Subregion regional highway, km = kilometer, MPWT = Ministry of Public Works and Transport, NR = national road, PMU = project management unit, SEC = southeast corridor, UXO = unexploded ordnance, VOC = vehicle operating cost.
Appendix 2 19
RESETTLEMENT ACTIVITIES
A. Introduction
1. A full resettlement plan was prepared by the Ministry of Public Works and Transport (MPWT) in 2002 during the project feasibility study. The plan was based on the findings of an inventory of losses survey, the Asian Development Bank’s Involuntary Resettlement Policy (1995) and Cambodian national policies and land law. The plan noted that it would require updating based on detailed design, final determination of the corridor of impact (COI), and a detailed measurement survey (DMS).
2. The plan covered impacts on local populations that would result from rehabilitation of the proposed project sections of National Road (NR) 5 and NR6 and mitigation measures to restore affected assets and livelihoods. No land acquisition impacts were expected along NR56 and NR68 since the project was only expected to involve replacement of about 50 bridges on those roads. The plan did note, however, that the entitlements it set out would apply in any other areas where additional impacts were identified during detailed design.
3. The inventory of losses (IOL) was based on expected road works on NR5 and NR6. This involved widening the existing road embankment to produce a COI of 20 meters (m) from the road center line. No resettlement impact was expected on NR56 and NR68. It was noted that the official right-of-way (ROW) for the existing roads was 50 m–60 m (i.e. 25 m–30 m from the centerline. As such, all affected persons and their property were deemed to be within the official ROW.
4. The IOL results indicated that approximately 60 hectares (ha) would need to be acquired and revealed seven main types of impacts/losses: (i) loss of about 48 ha of agricultural land use in the ROW, in the form of rice paddy and grazing on both side of the roads sections of road totaling 80 km, affecting approximately 2,000 households; (ii) road realignments of approximately 8 ha, affecting approximately 30 households; (iii) loss of land and disruption to pedestrian and market areas and community facilities resulting from measures to mitigate hazards to pedestrians and two-wheeled vehicles in the ROW, including the creation of bicycle and pedestrian paths away from the road at Puok and similar places with school populations currently using the road, estimated to involve about 6 ha in land acquisition and to affect about 50 households; (iv) loss of 572 privately-owned fruit trees and 2,025 publicly- and privately- owned shade trees in the COI; (v) disruption and replacement of gardens, entranceways, private bridges, and culverts and ponds on both sides of about 10 km of road, mainly in peri- urban areas, measuring approximately 6 ha, and affecting approximately 800 households; (vi) displacement of or disruption to approximately 520 roadside stalls or lightly built shops; (vii) loss or displacement of 210 single-storey houses and shop houses, about one-third of them built of thatch and light wood and the rest of light timber and corrugated iron roofing and ply or composite walls, generally with between 10 and 24 square meter (m2) of floor space.
5. Mitigation measures included the Government only requiring that affected persons move outside the COI and could remain within the ROW where possible. Compensation would be provided for loss of land use and for the disruption of social and economic activity and for any loss or replacement of structures at the cost of rebuilding with new materials. Income restoration assistance would also be given. A budget of $134,000 was planned to administer implementation of the resettlement plan, including the cost of a DMS, compensation, consultation and information programs, and grievance procedures, and for the contracting of an
20 Appendix 2 independent external monitor. The total cost of implementing the plan was estimated at $1,200,000.
B. Updated Resettlement Plans
6. The resettlement plan was updated in September 2005 by the MPWT. The estimated cost of the plan’s implementation based on the results of the DMS (including 20% contingencies and the incremental administration cost of implementation) was $1,700,756.
7. The detailed design incorporated several measures that significantly reduced potential resettlement impacts: (i) road relocation on NR68 to bypass historic bridges, (ii) reduction of the COI in urbanized area in Sisophon, (iii) reduction of the COI in Puok Town area from 20 m to 11.50 m, (iv) realignment of NR5 and NR6 to reduce resettlement impacts, and (v) adjacent embankment contouring and in-fill in project construction works to permit the replacement of the sites of affected houses, shops, and stalls in the ROW.
8. The updated scope of land acquisition due to the impact of the road improvement and the construction of the seven weigh stations was 41.4 ha. The total loss of land use from road rehabilitation in the ROW was 32.9 ha, 79.4% of the original estimate. Of the total affected area within the ROW, agricultural land accounted for 50% (16.4 ha), of which 7.1 ha was for a bypass on NR 68 to avoid impact on an ancient bridge at O'chic.
9. The updated resettlement plan foresaw impacts on 3,081 households, totaling 16,665 people, with the majority experiencing minor losses of land use in the ROW. Physical displacement of residences was limited to 129 households. The most frequent impacts involved the loss of productive land, secondary structures, and shops and stalls. The total loss of productive land was estimated at 23.6 ha and the number of persons expected to be affected was 583. Of these, 500 would lose less than 10% of their total productive land and 83 would lose more than 10%. A summary of the resettlement impacts on affected persons is in Table A2.1.
Table A2.1: Summary of Resettlement Impacts on Affected Persons Not Physically Affected Displaced Physically Displaced Persons Losing Land and Land Land House >10% Affected Affected Land Secondary and and and Land Contract Households Persons Only Structures House Shop Shop Holdings Vulnerable 6E 1,189 6,348 994 192 9 1 18 49 529 6F 208 1,215 161 76 6 – 23 16 71 5F 1,542 8,469 1,174 467 110 1 265 172 534 56–68 121 562 108 10 4 – 6 28 60 Weigh 21 71 21 – – – – 10 7 Stations Total 3,081 16,665 2,458 745 129 2 312 275 1,201 – = none. Source: Asian Development Bank
10. An addendum to the plan was prepared in 2006 to update the changes in resettlement impacts. It identified 3,182 affected households. Of these, 306 households were subsequently identified as not being affected and were therefore not eligible for compensation. The final number of entitled affected persons was 2,888.
Appendix 2 21
C. Institutional Framework, including Resettlement Committees
11. Management of the resettlement plan was the responsibility of the MPWT. A social and environment unit (SEU) was established within the MPW. It was responsible for updating, implementing, monitoring, and evaluating the plan.
12. Provincial resettlement committees were established in Siem Reap and Banteay Meanchey provinces, chaired by the governor or a representative, normally the director of the provincial public works department. District and commune resettlement committees were also established. A provincial working group was set up in each province, with the participation of community leaders to be responsible for day-to-day administration of resettlement plan implementation.
D. Detailed Measurement Survey
13. The DMS completed in the field on 5 June 2005 included all land and structures affected by the project. It was based on the detailed design and organized in line with the civil works in the four contracts.
14. A cut-off date for the inclusion of affected persons in the DMS was agreed with the interministerial resettlement committee (IRC). It allowed affected persons unavoidably absent and not identified during the DMS to make themselves and their claims to ownership or use of land impacted by the project known by 30 June 2005 to their commune council or to the provincial resettlement subcommittee.
E. Unit Costs for Various Losses
15. A replacement cost study (RCS) was undertaken in May 2005 in Banteay Meanchey and Siem Reap provinces on or close to NR 5 and NR 6 to determine valuations for all affected structures, land, and other assets. The RCS team was led by the local resettlement consultant and included surveyors, MPWT engineers, and a local consultant architect. A staff member of the Ministry of Economy and Finance Resettlement Unit also took part.
16. The RCS provided a revised categorization of houses and other structures to replace the four categories previously applied. These comprised (i) four separate categories for low- standard houses (replacing the original low-cost thatch house category); (ii) six subcategories of more solid timber houses (replacing one former category for semi-solid structures); (iii) four subcategories of more permanent timber and masonry houses (replacing former two categories of permanent structures).
17. Land prices for land privately owned or privately used land outside the ROW were costed at market prices. Replacement cost of land use in the ROW was put at a single price of $0.50 per m2, which represented slightly more than 10 years’ worth of rice production at market prices. It was applied to all land use, whether agricultural or residential. Establishing this single uniform price, regardless of the market price of unencumbered land outside the ROW in these vicinities, was regarded by both affected persons and the IRC as fair and adequate compensation for the loss of permitted land use. It reflected the intention in the approved resettlement plan to value land use as a source of income and livelihood and overcame the adverse reaction of affected persons noted in consultations to the possibility of having replacement prices differ between communities.
22 Appendix 2
18. The loss of a house and of shop and stall sites was compensated for by replacing the sites with sites near the affected locations.
F. Resettlement Compensation
1. Resettlement Plan Implementation and Monitoring Costs
19. A total of $264,200 was allocated for updating, managing, implementing, and monitoring the resettlement plan (Table A2.2).
Table A2.2: Resettlement Plan Implementation and Monitoring Cost Budget Rate Cost Actual Cost Item Unit Quantity ($) ($) ($) Resettlement plan Month 6 15,000 90,000 1. Administration implementation expense (before Detailed measurement survey Month 4 10,000 40,000 2005) Community consultation Month 4 5,000 20,000 229,752 Monitoring—SEU, MPWT/ Month 12 1,000 12,000 Resettlement Unit, MEF 2. Administration Evaluation–SEU, MPWT/ Month 6 2,000 12,000 expense (after resettlement unit, MEF 2005) Reporting Month 6 500 3,000 503,808 Administration Month 12 1,000 12,000 Grievance committee Lump 4 5,000 20,000 sum External NGO monitoring Month 12 3,400 40,800 119,718 Supervisor/team leader Month 48 300 14,400 enumerators Total 264,200 853,278 MEF = Ministry of Economy and Finance, MPWT = Ministry of Public Works and Transport, NGO = non-government organization, SEU = social and environment unit. Source: Asian Development Bank
2. Payment of Resettlement Compensation to Affected Persons
20. A total of $898,859.35 of compensation and allowances was disbursed directly to 2,877 affected persons. The payments, disaggregated by contract package, are presented in the Table A2.3.
Table A2.3: Disbursement of Compensation to Affected Persons No. of Entitled Affected Persons’ Compensation Disbursement Households, per Final Updated Amount Contract Package Resettlement Plan Affected Persons ($) 6E 1,071 1,071 311,759.52 6F 212 210 55,715.13 5F 1,441 1,432 350,514.46 56–68 137 137 82,263.54 Weigh stations 27 27 81,206.70 Compensation for the loss of more than 10% of land/shops paid to 174 affected 17,400.00 persons (no. of affected persons included above) Total 2,888 2,877 898,859.35 Source: Asian Development Bank
Appendix 2 23
21. Of 2,888 affected persons, 2,877 received their compensation for loss of land use and structures. Compensation was not paid to 11 households. Of these, nine affected persons in Poipet Commune did not present themselves to receive their compensation and two affected persons in Toaek Chor Commune were not paid due to a family conflict over ownership. The provincial committee of the IRC broadcast requests on radio for the nine affected persons to come forward to receive their compensation. After the compensation remained unclaimed for 6 months, the IRC returned the compensation funds to the national treasury in accordance with its regulations. When the IRC investigated the issue of the two affected persons who had not received their compensation due to the ownership dispute, it discovered that the affected land was actually outside the COI. The IRC then removed the property and compensation allocation from the resettlement plan impact assessment and compensation budget.
G. Resettlement Public Consultations
22. Consultation and disclosure were conducted throughout the updating of the Resettlement Plan. Topics included the expected impact of the road construction, steps to mitigate impact, provisions to assist and compensate affected persons, proposals and sites for relocation, the entitlements of affected persons, their participation in resettlement subcommittees, and grievance procedures. The consultations with affected persons and their local representatives and local authorities took place (i) during the handing out of information leaflets and in prior meetings with district and commune councils to explain the leaflets and their content and purpose; (ii) at public meetings where affected persons were encouraged to ask questions and put forward their ideas; (iii) in individual interviews with those affected, village heads, commune chiefs, and elected district officials; and (iv) question and answer sessions with individual affected persons during the consultation activities. Consultation activities continued during resettlement plan implementation to update affected persons on project and resettlement activities. A Khmer language public information booklet (PIB) was provided to all affected persons during the DMS and again during public meetings.
23. Public consultations meetings conducted along the alignment provided information on the principles to be followed in planning and implementing a resettlement program, including the participation of affected communities in its design and the intention to make the impact on affected persons and their property and livelihoods minimal. The meetings also discussed (i) the proposed road improvement and expected corridors of impact; (ii) the purpose and content of the PIB, which was read out to inform any affected persons who were not able to read; (iii) project entitlements and the MPWT’s commitment to compensate for losses of land use in the ROW at a level that would replace the livelihoods of affected persons and reflect market prices; (iv) their entitlement to compensation irrespective of legal title to land; (v) allowances for affected persons, including a disruption allowance, a transportation allowance for displaced households, and a vulnerability allowance; (vi) relocation options; (vii) grievance procedures; and (viii) tentative schedule of construction works.
24. The presentation by the SEU was supported at all meetings by further explanation by representatives of the IRC. An open forum followed invited questions from affected persons and the public in general for the SEU, the IRC, and the project resettlement consultants. Table A2.4 shows attendance at the public consultation meetings. At those meetings where sex- disaggregated participation was recorded, the participation of women averaged 58%.
24 Appendix 2
Table A2.4: Public Consultations with Affected Persons, May–June 2005 Affected Persons Contract Commune Total Female 6E Pouk 71 Lves 73 Teuk Wil 43 28 Khat 69 42 Prey Chrouk 70 45 Sasarsdom 100 Sranal 87 38 Kompong Thkov 71 39 6F and 5F Nimit 225 Kob 82 Kob 102 Samroang 104 Poipet 139 Tapon 30 9 Phnom Leab 29 17 Rohal 145 97 Chhnuor Meanchey 19 Chob Vary 15 Sophakmangkul 13 Teuk Thia 16 11 Phneat 19 10 56–68 Cheung Tean 15 Mkak 17 13 Total 1,554 Source: Asian Development Bank
25. External monitoring indicated that information dissemination and consultation were effective in most cases prior to the DMS and that affected persons were fully informed about the Project and their entitlements. External monitoring also confirmed that affected persons received the PIBs and had a high awareness of their entitlements. The approved resettlement plan was translated into the Khmer language and was made available in July 2006 in the provincial department of public works, the resident engineer's offices, and commune offices.
H. Resettlement Grievance Redress
26. Affected persons were informed during public consultation meetings about their rights and the mechanism by which their grievances could be addressed. This information was not provided in the PIB, however. The external evaluation consultant also noted that those surveyed tended to know less about the grievance redress process than about such other aspects of the resettlement plan as entitlements.
27. The formal grievance redress mechanism provided for in the resettlement plan had four stages. The affected persons could elevate an unresolved grievance (i) to the local resettlement officer in the Commune/Sangkat verbally, to be acted upon within 15 days; (ii) then in writing to the district/khan, to be acted upon within 15 days; (iii) next to the provincial grievance redress committee in writing, to be acted upon within 30 days; and (iv) finally to the court in a complaint if no redress could be agreed upon.
Appendix 2 25
28. Each province had a grievance committee comprising four permanent members and one member from the complainant’s locality. Each was chaired by the provincial governor or a deputy and included the provincial head of the department of public works, the Provincial Head of the Justice Department, a representative of the external monitoring agency, and a local leader, such as the commune chief, who was familiar with the area and the circumstances of the complaint.
29. Affected persons were encouraged to seek the assistance of family members, village heads, community chiefs, or nongovernment organizations in presenting their grievances in writing to ensure that all the details of disputes were recorded accurately enabling and all parties were treated fairly. The grievance procedures did affect the constitutional rights of any claimant to lodge a complaint with courts at the municipal and provincial levels.
I. Income Restoration under the Resettlement Plan
1. Mitigation Measures
30. Assistance provided under the resettlement plan’s income restoration measures took several forms. Depending on the circumstances, those affected by the loss of agricultural land received:
(i) compensation for privately owned land, compensation for loss of land use if the affected land was within the road ROW, (ii) compensation for loss of crops, and a (iii) disruption allowance. If the loss of productive land exceeded 10%, those affected also received an (iv) income restoration allowance of $100 per household and the right to (v) participate in vocational training. Those who lost roadside stalls or shops received: (a) cash compensation for loss of structures, (b) disruption allowance for temporary loss of income, a (c) transport/relocation allowance, and were assisted in relocation to a site that was intended to hold similar or better commercial potential than the land they occupied before. Three market sites were selected and developed for this purpose—Kork Snoul in Pouk District, Siem Reap province; and Kob Commune and Nimit Commune, both in O’Chrev District, Banteay Meanchey Province. These individuals were also entitled to participate in vocational training.
2. Effectiveness of Income Restoration of Measures
31. Vocational training. Only 5% of the affected persons offered vocational training participated in the training courses and absenteeism were high among those who registered. Attendance was slightly better in on-farm training courses than in off-farm training. An animal- raising course attracted the most participants, followed by a motor repair course.
32. The vast majority (91%) of the affected persons who lost part of their land reported in a survey that they could continue their livelihood with the remaining piece of agricultural land. The remaining 9% surveyed reported that their loss of agricultural land might affect their livelihoods partially but said they were able to improve their livelihood by seeking alternative jobs in or outside their original villages, pursuing fishing as an occupation, becoming a grocery seller, working as casual laborers, or leasing other land to cultivate crops.
33. An assessment of the understanding level was modest, with around 40% of trainees achieving scores of 50%–69% and only around 16% of trainees showing high scores of 70%–
26 Appendix 2
90%. However, nearly half of the trainees evaluated the training program as helpful. Overall evaluation of income restoration training program from 90% trainees sampled, the score of the evaluation was low and program seemed not to reach the goal. The effectiveness of off-farm training was further limited because participants lacked capital to set up small businesses after being trained.
34. The training and income restoration project was not effective. Future training programs should be better designed and provide real practical skills that participants can use to improve their living standards.
35. Relocating vendors and establishing new markets. Three markets were to be constructed under the project for shop and stall vendors displaced from the ROW. Land for all three sites was acquired by the MPWT. Details of the planned markets are in Table A2.5.
Table A2.5: Planned Markets Size Contract Province Locations (m2) 6E Siem Reap PK 4+350 3,545 5F Banteay Meanchey PK 378,340 1,391 Banteay Meanchey PK 387,190 1,664 m2 = square meter, PK = kilometer post. Source: Asian Development Bank
36. Only the market in the Siem Rep Province had been constructed by June 2011. The other two sites in Banteay Meanchey Province had been prepared but no displaced vendors were interested in making use of them. A significant contributing factor was that province’s comparatively less strict approach to removing vendors from the road ROW. The project completion review mission observed that roadside vendors continued to operate within the road ROW.
37. Although completed, the Siem Reap market failed to restore the incomes of displaced roadside vendors, according to a field survey. All of those interviewed reported that their incomes were only around 50% of pre-project levels. They principal reason they cited for this decline was the market’s location. Although they were satisfied with the physical design and facilities and acknowledged their appreciation for the assistance that they received, they said the market was difficult for passing traffic to see from the road. The stalls of the vendors interviewed in the new market were 50 meters–80 meters from the roadside. A motorbike repair vendor who had been affected in the same village but had relocated to land just beyond the ROW that was accessible to passing traffic reported that his income had increased since the project was completed.
3. Lessons Learned: Income Restoration
38. Relocating roadside vendors. Relocating displaced vendors to new market sites may not always be a viable income restoration measure. Vendors spring up in locations that are conducive to their business, give them access to their customers, and allow them to respond to pre-existing needs. Moving them to newly created markets runs the risk of diminishing or eliminating their access to their customers, and vice versa. The relocation component of this resettlement plan was a failure. If similar markets are to be included in future project, their location and design should be based on close consultation with those to be displaced. One possible workable design would be a linear market running parallel to the road, with service Appendix 2 27 lanes allowing passing vehicles to pull over to do business with vendors. Another alternative to carefully consider is to what extent the displacement of such vendors from roadside ROW is. This is an issue that should be studied when weighing potential resettlement avoidance or minimization measures in the design of a resettlement plan.
39. Vocational training. Vocational training in this project failed as a means to restore the incomes of affected people:
(i) The assessment of training needs was inadequate. The value and viability in the local area of the training skills offered should have been carefully evaluated before the program was finalized. The capacity of the targeted beneficiaries to participate should also have been assessed. (ii) The training needed to be longer—i.e., long enough to deliver a level of skills sufficient to actually help beneficiaries generate income. (iii) Courses should have included field and practical training and perhaps even informal apprenticeships and mentoring. (iv) Trainees should have been given allowances to replace lost income during training. A high degree of absenteeism in the project courses was likely due to the fact that, as they reported in interviews, many participants needed to take off training time to earn an income.
J. Conclusion
40. Overall, resettlement activities were successful. The government remedied all issues of resettlement impacts although shortcomings afflicted the income restoration program.
28 APPRAISAL AND ACTUAL PROJECT COSTS ($ million) Appendix 3 Appraisal Estimate Actual Project Component Foreign Local Total Foreign Local Total A. Base Cost 1. Civil Works
NR6E 11.10 6.60 17.70 15.26 6.86 22.12 NR6F 11.90 6.60 18.50 14.82 6.66 21.48 NR5F 9.00 5.70 14.70 9.85 5.85 14.70 NR56–68 5.90 1.60 7.50 8.73 3.93 12.66 Others 0.00 0.00 0.00 1.99 0.57 2.56 2. Resettlement 0.00 1.20 1.20 0.00 1.70 1.70 3. Relocation of utilities 0.00 0.40 0.40 0.00 0.00 0.00 Civil Works Subtotal 60.10 50.65 25.57 76.22 4. Consulting Services Construction supervision 3.60 1.00 4.60 4.67 0.00 4.67 Reorganization program 0.50 0.00 0.50 0.27 0.00 0.27 Poverty reduction monitoring 0.00 0.10 0.10 0.03 0.00 0.03 5. Equipment 0.10 0.00 0.10 3.41 0.00 3.41 6. HIV/AIDS 0.10 0.00 0.10 0.00 0.19 0.19 7. Project management 0.00 1.00 1.00 0.00 1.11 1.11 8. Training 0.20 0.00 0.20 0.04 0.00 0.04 Subtotal (A) 42.50 24.10 66.60 59.07 26.87 85.94 B. Contingencies 1. Physical 4.20 2.30 6.60 0.00 0.00 0.00 2. Price 2.50 3.70 10.40 0.00 0.00 0.00 Subtotal (B) 6.70 3.70 10.40 0.00 0.00 0.00 C. Interest Charge 0.80 0.00 0.80 1.03 0.00 1.03 Total (A+B+C) 49.80 28.00 77.90 60.10 26.87 86.97 50.00 27.80 77.80 NR = national road Source: Asian Development Bank estimates.
Appendix 4 29
CURRENCY EQUIVALENTS (dollar–riel) Year $1.00 2002 KR4,015 2003 KR4,007 2004 KR4,062 2005 KR4,187 2006 KR4,173 2007 KR4,003 2008 KR4,081 2009 KR4,169 2010 KR4,053 KR = Cambodia riel. *2007–2010 Source: National Bank of Cambodia. .
30 Appendix 5
DISBURSEMENTS
Table A6.1: Projected and Actual Disbursement for the CAM: GMS: Cambodia Road Improvement Project ($ million)
Year Projected Actual 2002 - - 2003 0.15 2004 2.90 0.70 2005 4.69 6.13 2006 7.70 3.16 2007 8.00 8.07 2008 10.00 13.34 2009 14.00 16.15 2010 6.10 4.35 2011 - 2.07 Total 53.39 54.12 Source: ADB semimonthly list of loan disbursement.
Figure A6.1: Disbursements
60
50
40
30
20
10
Annual Disbursements (in $million) (in Disbursements Annual 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Projected Actual
PROJECT IMPLEMENTATION SCHEDULE
2002 2003 2004 2005 2006 2007 2008 2009 2010 Item 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 A. Civil Works
Prequalification
Emergency Bidding, bid evaluation, and contract award Repair of NR56
Land acquisition/ resettlement
Implementation
B. Construction Supervision for Civil Works
Consultant selection
Procurement support
Construction supervision for civil works
Project performance management
C. Reorganization
Establishment of ICR
Reform program
Quarterly report to ICR
Establishment of social and environmental unit
Establishment of general department of planning
ICR report to council of ministers
Appendix Appendix 6
Approval of report by council of ministers
Commencement of reorganization
Appendix Appendix 6 D. HIV/AIDS Program
E. Poverty Reduction Monitoring Program Survey and analysis
31
At appraisal Actual ICR = interministerial committee for reorganization, NR = national road. Source:
32 Appendix 7
CHRONOLOGY OF MAIN EVENTS
Date Event 2002 4–26 June Fact-finding mission 9–19 August Appraisal mission 17–18 October Loan negotiations 26 November Loan approval
2003 7 February Loan signing 20 May Loan effectiveness 30 May OFID loan agreement signed 4 July Cofinancing agreement with OFID signed 1 October Consulting services contract for civil works prequalification evaluation signed 14–17 October Special loan administration mission fielded 28 November 2nd consulting services contract for civil works prequalification evaluation signed
2004 22–31 March Inception mission fielded 11–21 May Resettlement review mission fielded 22 July Consulting services contract for detailed design and construction supervision signed 19–27 October Resettlement review mission fielded
2005 9 March Joint resettlement meeting held (ADB,IRC, MPWT) 10–12 May Resettlement review mission fielded 24 June–4 July Loan review mission fielded 30 June Detailed engineering design completed 30 September Civil works contract for package 56–68 signed 5 October Updated resettlement plan approved by ADB 17 October Civil works contracts for packages 6E, 6F, and 5F signed 20 October Consulting services for reorganization program signed 8 November Consulting services for HIV/AIDS and human trafficking program signed 30 November–5 December Loan review mission fielded
2006 8 February ADB requested MPWT to undertake study for proposed cross- border facility at Chhay Road 1–10 March Loan review mission fielded 19–26 April Resettlement review mission fielded 6 June Supply and delivery contract for 8 portable weigh pads signed 12–20 June Loan review mission fielded 10 July Environment management plan approved 6–13 September Loan review mission fielded 29 November Civil works contract for weigh stations signed
Appendix 7 33
Date Event 20 December ADB recommended change of pavement design based on the report of pavement study 2007 9 January ADB loan closing date extended from 30 June 2007 to 30 June 2009 25 January–2 February Loan review mission fielded 19 March Contract for traffic signs and roadside furniture signed 20 March Supply and delivery contract for 10 portable weigh pads signed 13 July Override of PPR rating to adjust project implementation delay from 24 to 12 months and project implementation progress from unsatisfactory to partly satisfactory approved 6 August Change of pavement design specifications approved 3–4 September Resettlement review mission fielded 15–24 October Loan review mission fielded 10–14 December Special loan administration mission fielded 9–15 December Environmental compliance review mission fielded
2008 5 February Consulting service for poverty reduction program signed 11–20 February Midterm review mission fielded 7 March Contract for supply of additional 20 portable weigh pads signed 28 April Contract for supply and installation of vehicle monitoring system signed 30 June Civil works package 56-68 completed 7–15 July Loan review mission fielded 16–22 October Loan review mission fielded
2009 28 February Civil works package 5F completed 30 April Civil works package 6F completed 31 May Civil works package 6E completed 26 May–2 June Loan review mission fielded 15 June Extension of loan closing date from 30 June 2009 to 30 June 2010, approval of a major change in scope to include Bavet CCA facilities, and reallocation of loan proceeds approved 30 June End of defects liability period for package 56-68 5–6 September Loan review mission fielded 9 September OFID loan extended up to 30 June 2010 17 September Civil works contracts for CBF in Poipet and CCA building in Bavet signed 5–13 October Loan review mission fielded 28 December Official opening of packages 6E, 6F, and 5F road sections
2010 20 January Civil works contract for concrete pavement and steel roof for weigh stations signed 28 February End of defects liability period for package 5F 11–17 March Loan review mission fielded 19 April Emergency repair of NR 56 approved
34 Appendix 7
Date Event 30 April Supply contract for computer equipment for CBF and CCA signed 30 April End of defects liability period for package 6F 11 May Supply contract for furniture for CBF and CCA signed 31 May End of defects liability period for package 6E 9–14 June Loan review mission fielded 30 June OFID loan closed 20 August Civil works contract for the improvement of Pouk weigh station signed 25 August ADB loan closing date extended from 30 June 2010 to 31 December 2010 3 September Contract for road furniture streamlining for NR 5, NR6, and NR7 signed 3–13 September Loan review mission fielded 4 October Civil works contract for the improvement of six weigh stations signed 2 November Supply and installation of CCTV system for weigh stations signed 25 November Supply of computer equipment awarded 1 December Supply of spare parts and maintenance contract for permanent weigh stations signed 3–7 December Loan review mission fielded 28 December Emergency repair of NR 56 completed 23 December Reallocation of loan proceeds approved 31 December Project completed
2011 1–11 March Project completion review mission fielded and completed 29–30 June Project completion review mission for resettlement fielded 15 September Final cancellation of unutilized loan proceeds approved 15 September Loan account closed ADB = Asian Development Bank, CBF = cross-border facility, CCA = common control area, CCTV = closed-circuit television, IRC = interministerial resettlement committee, MPWT = Ministry of Public Works and Transport, NR = national road, OFID = OPEC Fund for International Development, PPR = project performance report.
Appendix 8 35
Overview of the Ministry of Public Works and Transport Reorganization Initiative
1. The project helped the Ministry of Public Works and Transport Reorganization (MPWT) institute institutional changes in its organization structure that were greatly needed to manage the road sector effectively. This led to the establishment on 1 February 2007 of an interministerial committee for reorganization (ICR) chaired by the minister in charge of the MPWT. Members included representatives from the MPWT, the State Secretariat of Public Functions under the country’s Council of Ministers (COM), and the Ministry of Economy and Finance. During the first meeting, ICR discussed the MPWT reorganization program and road transport policy.
2. While a new organization structure of MPWT is currently being reviewed by the COM, the Prime Minister is expected to approve it by mid-2009 for implementation thereafter. MPWT complied with the loan covenant in reorganizing the general department of administration services by promoting the former director of the planning department to be director general of planning and administration services and promoting the department of planning to a core position in the ministry in 2007.
3. A draft transport policy was completed and approved by the minister of the MPWT. It covered road transport, rail transport, inland waterways and maritime transport, air transport, and urban transport. After several revisions during discussions between the MPWT and the COM, the MPWT submitted a final draft to the COM in early 2008. COM approved the subpolicies on road transport and rail transport in late 2009. Approval of the other three draft subsector policies are still pending with the COM. Once the policy is approved, the MPWT plans to make it to the public on the MPWT website, through other media, and in an official address by the minister.
36 Appendix 8
ORGANIZATION CHART
Source: Ministry of Public Works and Transport.
Appendix 9 37
STATUS OF COMPLIANCE WITH LOAN COVENANTS
Reference in Loan Loan Covenant Agreement Status of Compliance The Borrower will cause the Project to be carried out with Sect. 4.01 Complied with. due diligence and efficiency and in conformity with sound (a) administrative, financial, engineering, environmental, road, and transport practices. In the carrying out of the Project and operation of the Sect. 4.01 Complied with. project facilities, the Borrower will perform, or cause to be (b) performed, all obligations set forth in the Schedule 6 of this Loan Agreement. The Borrower will make available, promptly as needed, the Sect. 4.02 Complied with. funds, facilities, services, land, and other resources, which are required, in addition to the proceeds of the loan, for the carrying out of the Project and for the operation and maintenance of the project facilities. In the carrying out of the Project, the Borrower will cause Sect. 4.03 Complied with. competent and qualified consultants and contractors, (a) acceptable to the Borrower and ADB, to be employed to an extent and upon terms and conditions satisfactory to the Borrower and ADB. The Borrower will cause the Project to be carried out in Sect. 4.03 Complied with. accordance with plans, design standards, specifications, (b) work schedules, and construction methods acceptable to the Borrower and ADB. The Borrower will furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as ADB will reasonably request. The Borrower will ensure that the activities of its Sect. 4.04 Complied with. departments and agencies with respect to the carrying out of the Project and operation of the project facilities are conducted and coordinated in accordance with sound administrative policies and procedures. The Borrower will make arrangements satisfactory to ADB Sect. 4.05 Complied with. for insurance of equipment to such extent and against such (a) risks and in such amount as will be consistent with sound practice. Without limiting the generality of the foregoing, the Sect. 4.05 Complied with. Borrower undertakes to insure, or cause to be insured, the (b) goods to be imported for the Project and to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods. The Borrower will (i) maintain, or cause to be maintained, Sect. 4.06 Complied with. separate accounts for the Project; (ii) have such accounts (b) and related financial statements audited annually, in accordance with sound auditing standards, by auditors acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 3 months after the
38 Appendix 9
Reference in Loan Loan Covenant Agreement Status of Compliance end of each related fiscal year, unaudited copies of such accounts and financial statements, and not later than 9 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto, all in English; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB will from time to time reasonably request. The Borrower will furnish, or cause to be furnished, to ADB Sect. 4.07 Complied with. all such reports and information as ADB will reasonably (a) request concerning (i) the loan, and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods and service and other items of expenditure financed out of the proceeds of the loan; (iii) the Project; (iv) the administration, operations, and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower and the international balance-of- payments position of the Borrower; and (vi) any other matters relating to the purposes of the loan. Without limiting the generality of the foregoing, the Sect. 4.07 Complied with. Borrower will furnish, or cause to be furnished, to ADB on (b) quarterly basis or at such other intervals as ADB may reasonably request, reports on the carrying out of the Project and on the operation and management of the project facilities. Such reports will be submitted in such form and in such detail and within such a period as ADB will reasonably request, and will indicate, among other things, progress made and problems encountered during the period under review, steps proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following period. Promptly after physical completion of the Project, but in Sect. 4.07 Complied with any event not later than 6 months thereafter or such later (c) date as may be agreed on for this purpose between the borrower and ADB, the Borrower will prepare and furnish to ADB a report, in such form and in such detail as ADB will reasonably request, on the execution and initial operation of the Project, including its cost, benefits, environmental and social impact, the performance by the Borrower of its obligations under the Loan Agreement, and the accomplishment of the purposes of the loan. A copy of the video film showing the implementation of the civil works under the project and prepared by the consultants for the construction supervision, will also be provided to ADB upon its completion. The Borrower will enable ADB’s representatives to inspect Sect. 4.08 Complied with the Project, the goods financed out of the proceeds of the loan and any relevant records and documents. The Borrower will ensure that the Project road is operated, Sect. 4.09 Complied with
Appendix 9 39
Reference in Loan Loan Covenant Agreement Status of Compliance maintained, and repaired in accordance with sound administrative, financial, engineering, environmental, road, transport, and maintenance and operational practices. MPWT will be the Project executing agency. MPWT will Schedule 6, Complied with establish a PMU to be headed by a full-time Project Para. 1 Director, supported by a Project Manager responsible for day-to-day Project operation. Both the Project Director and the Project Manager will be senior officials with adequate technical and administrative experience and qualifications acceptable to ADB. The Project Director will be assisted by appropriate and adequate technical and administrative staff. The Borrower will implement the measures and meet the Schedule 6, Delayed, but complied with. targets specified in the policy reform and institutional Para. 2 development matrix agreed upon with ADB. The lCR, whose primary function will be to review, and Schedule 6, Delayed, but complied with. advise on reform directions for MPWT, will be chaired by Para. 3 the Minister, MPWT, and comprising representatives from ICR was re-established on MPWT, State Secretariat of Public Functions, Council for 1 February 2007. The first Administrative Reform (Office of the COM), and MEF will meeting was held on 28 be set up prior to loan effectiveness. The secretariat of the February 2007. The result ICR will be DOP with the Director, DOP, or its successor, of meeting was reported to acting as Secretary for the Secretariat. ADB on 9 March 2007. Within 6 months of the Effective Date, the proposal for a Schedule 6, Delayed, but complied with. strengthened DOP will be submitted by the Minister, Para. 4 MPWT to the COM and the repositioned DOP will be The proposal for a established and fully functional within 10 months of the strengthened DOP was effective date. The DOP or its successor, as applicable, submitted by the Minister, will, among other things, be responsible for developing, MPWT to the Deputy Prime reviewing, negotiating, recommending and monitoring all Minister on 6 April 2007. concession agreements in the transport sector. Awaiting official approval by the COM. Training program has been completed and training for DOP staff started in July 2007 and completed in mid-October 2007. Within 24 months of the effective date, the ICR will have Schedule 6, Delayed, but complied with. developed and approved an MPWT organizational Para. 5 structure and submitted the proposed resulting The proposal for a reorganizational structure to COM for approval. strengthened DOP was submitted by the Minister, MPWT to the Deputy Prime Minister on 6 April 2007. Awaiting official approval by the COM. Within 4 months of the Effective Date, MPWT will create a Schedule 6, Delayed, but complied with. Social and Environment Division in the DOP, to be Para. 6 transferred to the repositioned DOP when established. The Social and Environment Division will be fully functional within 6 months of the Effective Date. In coordination with relevant agencies, it will be responsible for social and environmental issues across all sectors
40 Appendix 9
Reference in Loan Loan Covenant Agreement Status of Compliance under MPWT's authority, particularly resettlement planning and management, HIV/AIDS and anti-trafficking efforts, poverty and social impact assessments, labor practices and environmental management. The Borrower will utilize the proceeds of the FRMR for a Schedule 6, This covenant has been road network maintenance plan allocating at least 10% of Para. 7 removed, as FRMR was the FRMR funds for rural road maintenance activities with closed on 27 September the reminder of the funds used solely for maintenance of 2006. national and provincial roads. MPWT will ensure that the Road MMS previously Schedule 6, Partly complied with. developed for Kampot, Kampong Cham and Kandal Para. 8 Provinces is adopted and formally institutionalized within Road maintenance plan MPWT as the guiding procedure for planning and was prepared. However, prioritization for maintenance of all national and provincial MMS is not used for highways under MPWT administration. MPWT will prepare planning, prioritizing, and annual road maintenance plans based on the MMS and allocating resources for use of the MMS will be required for planning, prioritizing, routine and periodic and allocating resources for routine and periodic maintenance. maintenance of provincial highways and rural access roads in all provinces. MPWT will be responsible for operating and maintaining Schedule 6 Complied with the Project road sections through proper technical Para. 9 supervision and adequate allocation of funds. MPWT will carry out routine and periodic maintenance work on NRs 56 and 68 to ensure all-year and all-weather access along the routes, especially in support of the infrastructure improvements made under the Project. Within 6 months of the effective date, the Government will Schedule 6 Delayed, but complied with. have established a Road Safety Council, with a Secretariat Para. 10 within MPWT responsible for implementing its recommendations and coordinating road safety programs. Within 8 months of the effective date, a Comprehensive Schedule 6 Delayed, but complied with. Axle Load Control Program, including a regulatory Para. 11 framework incorporating maximum axle loads and increased financial penalties, will be submitted by MPWT to the COM for formal adoption as regulatory instruments. Within 9 months of the effective date, a draft Transport Schedule 6 Delayed, but complied with. Policy, acceptable to ADB, will be submitted by MPWT to Para. 12 the COM for formal adoption as a national policy. A draft road transport Policy was submitted by MPWT to the COM in April 2007. COM approval pending.
The draft of road transport policy was presented to the technical working group and the ICR in May 2007. Presentation was held on 10 July 2007. Khmer versions were submitted to the ICR on 13 September 2007. MPWT submitted the draft to the COM at the end
Appendix 9 41
Reference in Loan Loan Covenant Agreement Status of Compliance of December 2007, for final approval expected in May 2008 and Prime Minister’s approval in October 2008. For other 4 sub sector draft policies, the same process was expected once the Minister approves the drafts in March 2008. This has been approved by the Minister in December 2009. This was submitted to COM for approval in March 2010, after clarifying the budgetary requirements, now being revised for COM’s final approval. Within 12 months of the effective date, the draft Schedule 6 Cannot be complied with Subdecree for Roads will be revised in a manner Para. 13 within the project period. acceptable to ADB, and approved by the COM. The Draft Road Law encompasses all roads within Cambodia, under the jurisdictions of MPWT, MRD and other agencies like provinces and cities (a minor portion only). This makes the Draft impossible to be approved within the project since MPWT has no jurisdiction over the other agencies regarding their road right of way regulation, which is the principal component from each agency for the draft law. Thus, MPWT opted to approve the related right of way sub decree separately. MPWT’s Subdecree of Right of way has been now approved by the COM on 23 November 2009. Within 12 months of the effective date, MPWT will approve Schedule 6 Delayed, but complied with. revised road sign standards and formally adopt ASEAN Para. 14 standards for all road signs and markings. MPWT, through the ICR and the Provincial Resettlement Schedule 6 Complied with Committees, will be responsible for the acquisition of the Para. 15 land required for the Project and for compensation and, if required, relocation and resettlement of Project affected people. MPWT will ensure that such land acquisition, compensation, relocation and resettlement is carried out in accordance with the Resettlement Plan agreed upon
42 Appendix 9
Reference in Loan Loan Covenant Agreement Status of Compliance between the Borrower and ADB, the Borrower's laws, regulations, and ADB's requirements as defined in ADB's Policy on Involuntary Resettlement. In case of discrepancies between the Borrower's laws, regulations, and procedures and ADB's requirements, ADB's requirements will apply. MPWT will provide ADB with monthly status reports on the land acquisition and resettlement process as part of the progress reports required under Section 4.06 of the Loan Agreement and will provide a report immediately following completion of Resettlement Plan implementation and 6 months thereafter. Without limitation to the overall application of ADB's Policy Schedule 6 Complied with. on Involuntary Resettlement, the following principles will Para. 16 apply in respect of compensation and resettlement of Project affected people: (a) Project affected people will be compensated and assisted in such a way that generally their economic and social future shall not be unfavorably affected by the Project and, in particular, that they will not face a material reduction in income, deterioration of living standards or unnecessary social and cultural dislocation as a result of the Project; (b) Project affected people will not be required to have legal title to the land used by them to be eligible for compensation; (c) the amount of compensation in respect of land acquisition will be at a level sufficient to cover the full replacement cost of the land and the structures built thereon; and (d) all compensation and resettlement activities will be satisfactorily completed before award of relevant civil works contracts. MPWT will ensure timely provision of counterpart funds for Schedule 6 Complied with. land acquisition, resettlement and monitoring activities Para. 17 specified in the Resettlement Plan, and will meet any unforeseen obligations in excess of the Resettlement Plan budget estimate in order to satisfy resettlement objectives. MPWT will ensure that counterpart funds for compensation and entitlements under the Resettlement Plan are fully provided directly to affected people prior to their displacement from housing and prior to loss of land, livelihood, income or other assets. MPWT will ensure that all Project affected people, Schedule 6 Complied with. including any hosts who provide land to Project affected Para. 18 people, are provided adequate information to reach an informed decision and are regularly consulted in advance of compensation agreements that affect livelihoods or living conditions as a result of the Project. MPWT and other officials implementing resettlement will keep complete records on consultations and grievances relating to resettlement and will make such records available to ADB upon request. No later than 1 month after the effective date, the Borrower Schedule 6 Complied with. will engage an independent external monitor, acceptable to Para. 19 ADB and with terms of reference included in the approved Contract of external monitor
Appendix 9 43
Reference in Loan Loan Covenant Agreement Status of Compliance Resettlement Plan, to monitor and evaluate completed in June 2007. implementation of the Resettlement Plan. The external Revised TOR for the monitor will be engaged prior to commencement of the extension of the external resettlement process. The budget provided to the external monitor was finalized and monitor will include funds sufficient, in the opinion of ADB, the external monitor was re- for the external monitor to adequately perform its functions. mobilized in January 2008. The external monitor will carry out systematic monitoring during Resettlement Plan implementation and will conduct one evaluation 6 to 12 months after the conclusion of resettlement implementation. All reports by the external monitor will be submitted to MEF and ADB. The Borrower will provide to the external monitor, at no Schedule 6 Complied with. cost, all documents required to monitor the resettlement Para. 20 process, specifically including the Resettlement Plan. DMS documents, and all associated documents which may be requested by the external monitor. The Borrower will ensure that the contract documents for Schedule 6 Complied with. the civil works include specific mitigating measures as Para. 21 indicated in the lEE and in accordance with ADB's Environmental Guidelines for Selected Infrastructure Development Projects to mitigate negative environmental impacts caused by the construction. MPWT will develop and implement an EMP for the Project, Schedule 6 Complied with. based on the lEE, ensuring that such issues as cross flow Para. 22 discharge capacity, facilitation of floodwater drainage, landslides, erosion, and the prevention of damage to the natural environment receive due consideration in the design, construction, operation and maintenance of Project Facilities. The Borrower will cause (i) the contractors engaged under the civil works contracts to comply strictly with all environmental impact mitigation requirements set out in the contract documents, and (ii) the consultants engaged for construction supervision to monitor closely the compliance by the contractors with the environment impact mitigation requirements. Upon project completion, the Government will ensure that Schedule 6 Ongoing. the cross-border facilities reflect the principles agreed by Para. 23 the Government in the Cross-Border Frameworks Agreement. Border controls will include measures to deter iIIegal trafficking of women and children. MPWT, with advice and guidance from the proposed SEU, Schedule 6 Complied with. will engage a suitably qualified agency to implement an Para. 24 information campaign on HIV/AIDS and trafficking of women and children. During construction of the Project Facilities, MPWT, together with other appropriate Government agencies and non-governmental organizations, will ensure that such qualified agency disseminates information on the risks of socially transmitted diseases (including HIV/AIDS), and on the risks of trafficking women and children, to those employed during Project implementation and to communities in the Project area. The Borrower will ensure that the civil works contracts Schedule 6 Complied with.
44 Appendix 9
Reference in Loan Loan Covenant Agreement Status of Compliance include mandatory provisions on health, sanitation and Para. 25 appropriate working conditions, including accommodation, for construction workers at campsites during the construction period. The Borrower will ensure that the civil works contractors Schedule 6 Complied with. comply with all applicable labor laws, including elimination Para. 26 of gender differentiated wages or food rations, do not employ child labor in construction activities, and seek to ensure the maximum level of female participation contains such requirements. MPWT, with the assistance of the consultants for Project Schedule 6 Delayed, but complied with. supervision, will develop a baseline for performance Para. 27 monitoring in accordance with ADB's Project Performance Management System Handbook, and will establish systematic project performance monitoring, including benefit monitoring and evaluation. MPWT will direct the consultants to carry out surveys (i) at the start of Project implementation to establish data, (ii) at Project mid-term, and (iii) six months after Project completion, to evaluate the Project benefits. Data to be compiled and analyzed for the purpose of benefit monitoring and evaluation will be in a format to be agreed upon with ADB. MPWT will engage qualified and experienced consultants Schedule 6 Delayed, but complied with. to undertake a poverty reduction monitoring program Para. 28 through two surveys to be conducted 2 years and 3 years, respectively, after the effective date. Within 9 months of the Effective Date, or at a later date as Schedule 6 Complied with. ADB may otherwise agree, the Borrower will have Para. 29 obtained the OFID Loan or will have made other Cofinancing agreement was arrangements, acceptable to ADB, to fund the amount signed on 30 May 2003. intended to be provided by the OPEC Fund Loan. ADB = Asian Development Bank, ASEAN = Association of Southeast Asian Nations, COM = council of ministers, DMS = detailed measurement survey, DOP = Department of Planning, EMP = environmental management plan, FRMR = fund for repair and maintenance of road, ICR = Interministerial Committee for Reorganization, IEE = Initial Environmental Examination, MEF = Ministry of Economy and Finance, MMS = maintenance management system, MPWT = Ministry of Public Works and Transport, NR = national road, PMU = project management unit, OFID = OPEC Fund for International Development, SEU = social and environment unit, TOR = terms of reference.
SUMMARY OF CONTRACTS
Original Contract Contract Amount at PCSS Amount Completion No. Contractor/Supplier Description ($) ($) 01—Civil Works 0003 KC MKK/Guangdong Prov. Changda 56–68 (Sisophon–Samraong-Kralanh road) 10,039,315.78 12,231,721.13 Highway Eng. Co. Ltd 0004 S.P.T. Civil Group Ltd. Part 6E (Siem Reap–Kralanh road) 15,218,368.50 20,194,856.79 0005 S.P.T. Civil Group Ltd. Part 6F (Kralanh–Sisophon road) 15,142,193.61 20,349,904.66 0006 S.P.T. Civil Group Ltd. Part 5F (Sisophon–Poipet road) 11,631,387.84 14,704,408.12 0010 South East Corporation Co. Ltd Civil Works for Weigh Stations 889,536.06 858,415.10 0016 T-RO Construction Co. Ltd Construction of Cross-Border Facilities in Poipet 650,082.95 649,692.22 0017 Taing Cheng Oing Construction Co. Ltd Construction of Common Control Area Building in 318,572.91 476,442.09 Bavet 0018 Daun Penh Construction Co. Ltd Concrete Pavement and Steel Roof for Weigh 257,986.26 256,908.53 Stations 0021 Taing Cheng Oing Construction Co. Ltd. Improvement of Puok Weigh Station 31,453.80 31,360.00 0023 T-RO Construction co. Ltd. Improvement of Six Weigh Stations 230,178.06 289,338.20 Subtotal Category 01 54,409,075.77 70,043,046.84 02—Consulting Services 0001 Mr. Young Shik KIM Prequalification for Civil Works Bidders 50,083.00 62,626.27 0002 Korea Consultants International Consulting Services for Detailed Design and 3,743,045.00 4,665,339.73 Construction Supervision 0007 Michel Dorval Consulting Services for Reorganization Program 315,000.00 270,794.00 0013 K.A.S. Murshid Consulting Services for Poverty Reduction and 31,437.00 27,637.00 Social Strategy 0008 SBK Research and Development Consulting Services for HIV/AIDS and Human 193,280.00 193,280.00
Trafficking Program Appendix 10 Subtotal Category 02 4,332,845.00 5,267,683.00 03—Equipment Imp/Acc Takral Brothers Pte. Ltd Supply and Delivery of computer Equipment 52,130.00 52,130.00 Imp/Acc Te Aik Hong co. Ltd. Supply and Delivery of Photocopy Machine 5,900.00 5,900.00 0009 Comin Khmere Co. Ltd Supply and Delivery of 8 Portable Weigh Pads 32,136.00 32,136.00
0011 Kamtranship Co. Ltd. Supply and Installation of Traffic Signs and 836,311.76 829,022.96 Roadside Furniture 0012 Comin Khmere Co. Ltd Supply and Delivery of 10 Portable Weigh Pads 38,640.00 38,640.00 45 0014 Comin Khmere Co. Ltd Supply and Delivery of 10 Portable Weigh Pads 83,240.00 83,240.00
Original Contract 99 46
Contract Amount at PCSS Amount Completion
No. Contractor/Supplier Description ($) ($) Appendix 10 0015 Singapore Technology Investment Supply and Installation of Vehicle Monitoring 596,200.00 416,900.00 Center/Samin Data System Co. Ltd. System 0019 Neeka Ltd. Supply and Delivery of Computer Equipment for 23,848.00 23,848.00 CBF 0020 Leeco Furniture Shop Supply and Delivery of Office Furniture for CBF 20,169.00 20,169.00 0022 Guangdong Provincial Changda Road Furniture Streamlining for NR 5, NR 6, and 1,809,406.19 1,808,919.44 Highway Engineering Corporation NR 7 0024 FST E&C Co. Ltd. Supply and Delivery of CCTV for Weigh Stations 17,911.95 17,910.00 0025 Samin Data System Co. Ltd. Maintenance and spare parts for permanent weigh 97,566.33 93,443.20 stations 0026 Neeka Ltd. Supply and Delivery of Computer Equipment 44,575.26 44,575.26 Subtotal Category 03 3,658,034.49 3,467,833.86 Total 62,399,955.26 78,788,563.70 CBF = cross-border facility, CCTV = closed circuit television, NR = national road, PCSS = procurement contract summary sheet. Source: Asian Development Bank
Appendix 11 47
ECONOMIC REEVALUATION
A. Introduction
1. The economic reevaluation of the Greater Mekong Subregion Cambodia Road Improvement Project followed an approach similar to that employed at appraisal. It took into account factors that can be quantified, such as the road construction and maintenance costs, traffic levels, and the benefits of reduced vehicle operating costs (VOC) and time savings for road users. The analysis of the completed project used actual construction costs and actual observed traffic levels and road conditions following implementation rather than having to rely on forecasts and projections, as was the case in the feasibility study. The results therefore can only be estimates of the actual rates of return. The costs and benefits in each year of the analysis period were discounted to their value in the base year. This was to reflect the time value of money, represented by the opportunity cost of the capital invested in a project or the required rate of return on capital.
2. The evaluation used the widely accepted Highway Development and Management (HDM-4) software tool originally developed by the World Bank and sanctioned by the World Road Association. HDM-4 allows flexibility in specifying observed levels for parameters such as traffic level and road roughness, a useful advantage when undertaking an evaluation of a completed project.
B. Economic Costs
1. Construction Costs
3. The construction costs are summarized in Table A11.1 by contract package. Because these were actual costs incurred, no allowance was necessary for contingencies. Residual values, representing the remaining asset value of the works, were included at the end of the evaluation period, although the impact on the result was small over more than 20 years due to discounting. A nominal value of 25% of the construction cost was included as residual value investment costs. In addition to the civil works costs, the capital costs included consultancy costs for supervision, which added approximately 6% to civil works costs, and the compensation paid for resettlement resulting from acquisition of property or land to implement the works.
4. Land and resettlement costs were a relatively small proportion of the total cost for this project as most of the works were completed within the road right of way. Land and structures had to be acquired where the road was realigned at new bridge sites. Where the costs for resettlement comprised structures, the financial cost of the compensation was taken as the economic cost, plus compensation for disruption to businesses and rehabilitation for vulnerable groups.
Table A11.1: Estimated Costs at Completion ($) Road Length Civil Works and Supervision Economic Contract (km) Financial Economic Resettlement Total Per Km 6E 48.4 23,088,726 21,241,628 119,530 21,361,158 441,346 6F 49.8 22,806,658 20,982,126 38,586 21,020,712 422,103 5F 47.2 15,655,625 14,403,175 282,016 14,685,191 311,127 56–68 187.5 12,100,203 - Total 145.4 61,551,010 56,626,929 440,131 57,067,060 392,483 km = kilometer. Source: Asian Development Bank
48 Appendix 11
2. Road Maintenance Costs
5. The cost of road maintenance is not a major factor in the evaluation of highways with moderate to high traffic levels. However, when using the HDM-4 model, it is important that an appropriate maintenance assignment is made for both the base case and the project case so that predicted pavement condition is realistic. The amount of maintenance required each year for the project roads was determined by the HDM-4 analysis according to specified interventions. For evaluation purposes, these procedures have been combined into an average annual maintenance cost of $2,000 per kilometer (km).
C. Economic Benefits
6. It was possible to quantify two types of benefits with sufficient accuracy for inclusion in the analysis: road user savings and the residual value of the works.
1. Vehicle Operating Costs Savings
7. VOC savings have been estimated using HDM-4. Many different vehicle types are used in Cambodia, including non-motorized vehicles and unconventional motorized vehicles. All motorized types were defined in HDM-4 to represent the vehicle fleet but the non-motorized type was not used. Table A11.2 shows the VOCs for the vehicle types used in the study for a range of roughness levels for a typical road section in flat terrain. An international roughness index (IRI) of 2.2 represents the expected level of a new asphalt concrete surface in this project. The two other IRI levels shown in the table cover the range of typical roughness levels of the original surfaces of the project road sections.
Table A11.2: Vehicle Operating Costs ($/km) Vehicle Type IRI 2.2 IRI 8.0 IRI 16.0 Motorcycle 0.03 0.04 0.04 Motorcycle and trailer 0.04 0.05 0.05 Passenger car 0.20 0.22 0.28 Van 0.20 0.24 0.31 Land-drive vehicle 0.22 0.24 0.38 Public utility vehicle 0.20 0.24 0.33 Light and medium goods vehicle 0.28 0.32 0.41 HGV 0.54 0.68 0.87 HGV with trailer/very HGV 0.67 0.77 1.03 Minibus 0.30 0.36 0.51 Bus 0.36 0.43 0.63 HGV = heavy goods vehicle, IRI = international roughness index, km = kilometer. Source: Asian Development Bank
2. Time Savings
8. Travel time savings are obtained when road improvements lead to an increase in vehicle speeds, thus reducing the journey times of passengers. These savings are in addition to the time value of the vehicle itself and crew costs for commercially operated vehicles. HDM-4 allows values for work and non-work time per hour per person to be specified separately. These are combined with an average passenger load per vehicle and an estimate of the percentage of passenger trips that are work-related to produce a passenger time cost per vehicle hour.
Appendix 11 49
Passenger time savings are not always calculated in road appraisals in developing countries but it is generally considered appropriate to include them. Savings in time when journeys are related to work clearly have a value; if less work time is spent traveling, more of the working day can be used for productive purposes, resulting in an increase the economic output of the country.
9. The level of gross domestic product (GDP), expressed per head of the working population, was used as the basic indication of the value of working time. The latest GDP estimates for Cambodia from the International Monetary Fund put annual per capita GDP in 2010 at $795.00 in current prices. 17 Assuming that 45% of the population was economically active and work averaged 2,000 hours per year, the average hourly income for 2010 was $0.88. This is higher than typical rural wage incomes and a value of $ 0.50 per hour was used for the working time of motorcycle users and other passengers, except those in cars and four-wheel drive vehicles. The origin–destination surveys carried out for this study included questions on trip purpose for private vehicles and passengers in public transport. The information from these suggests that an insignificant number, only 2% of passengers, were traveling in work time but 30% were traveling to or from work. With such a large proportion of the population engaged in agriculture, the evaluation considered that travel time would result in a greater loss of work time than indicated by the declared purpose of the journey (para. 8). For this reason, a general assumption was made that 30% of travel time was working time. For car and four-wheel drive vehicle passengers, this was increased to 50%. Non-working time was valued at $0.30 per hour for car and four-wheel drive passengers and $0.15 for all other passengers.
3. Traffic Data
10. Regular traffic counts are not carried out on roads in Cambodia but baseline counts were carried out on the project road in 2006. They comprised 7-day classified counts carried out for 24 hours per day at four sites. The results of the traffic counts are summarized in Table A11.3. Counts were also done for the feasibility study in 2002 but were conducted at different sites and used a slightly different vehicle classification system. Several counts were also carried out during the 1998–2000 period. The results of the earlier counts suggest that traffic did not grow consistently between 1998 and 2006. However, due to the uncertain accuracy of some earlier counts and the fact that successive counts were at different points even though traffic flow varies between one location and another, it was not possible to reliably determine the trends in traffic flow.
11. The results show that traffic growth has not been consistent. At three of the count sites, motorcycle traffic grew by at least 50% over the 4 years (2006-2010), but at Puok it declined. Motorcycles are mainly used for short journeys and the first 17 km section of the project road from Siem Reap through Puok was in fair condition in 2006. At the other sites, the road was in bad condition. This suggests that the increase in motorcycle traffic was mainly new traffic that has been generated by the improvement in the condition of the road rather than through normal growth. The absence of newly generated motorcycle traffic at Puok was likely due to the fact that the road was already sealed and in fair condition when the first count was made. Nevertheless, the decline in motorcycle traffic at Puok is surprising, given the general increase in motorcycle traffic in recent years.
17 World Economic Outlook Database, International Monetary Fund, October 2010.
50 Appendix 11
Table A11.3: Project Road Traffic Counts, 2006 and 2010 (average daily traffic) Preah Netr Puok Kralanh Preah Poipet Vehicle Type 2006 2010 2006 2010 2006 2010 2006 2010 Non-motorized 2,270 1,732 756 940 232 303 194 282 Motorcycle 4,827 4,132 2,563 3,069 2,016 3,448 1,936 3,589 Motorcycle and trailer 115 106 88 24 91 113 157 102 Passenger car 445 930 399 1,079 373 1,265 876 1,687 Van 17 228 18 163 19 76 25 75 Land-drive vehicle 126 334 111 278 141 437 234 487 Public utility vehicle 174 187 226 172 184 149 327 180 Light and medium goods 20 58 12 51 13 53 24 58 vehicle HGV 32 46 27 62 26 38 47 34 HGV with trailer 139 67 101 67 92 49 131 54 Very HGV 86 147 104 185 101 173 32 177 Minibus 48 69 61 131 56 29 155 57 Bus 9 60 10 75 16 50 73 63 Other 1 15 3 42 10 80 6 62 Total Motorized 6,039 6,379 3,723 5,398 3,138 5,960 4,023 6,625 Total Excluding 1,097 2,141 1,072 2,305 1,031 2,399 1,930 2,934 Motorcycles HGV = heavy goods vehicle. Source: Asian Development Bank
12. The pattern was more consistent for the total for all other motorized vehicles, with traffic doubling over the 4 years, although near the end of the road at Poipet the increase was only 50%. Growth was particularly rapid for most passenger vehicles—cars, land drive vehicles, vans, and buses—but minibus trips declined steeply at two sites. They may by larger buses and vans over time. Misclassification during counts is also a possibility. Freight vehicle traffic grew more slowly, with a trend from heavy goods vehicles (rigid trucks with trailers) to very heavy goods vehicles (multi-axle truck). The overall pattern suggests the generation of new traffic generation has been a key element of the growth. Passenger vehicles traffic is more likely to increase after road improvement than freight vehicle traffic because it is more responsive to reductions in VOC and travel time and to improvements in comfort.
4. Traffic Growth
13. To assess the benefits of road improvements, it was necessary to establish future traffic levels on the project roads. These levels needed to be projected from 2010 for a period of 19 years to provide a basis for the 20-year benefit period. It was also necessary to consider the types of growth that had taken place since the base year of 2006 because different types incur different levels of benefit. To assess benefits of road improvement projects, traffic must be considered in three categories.
5. Normal Traffic
14. Normal traffic would use the project roads with or without improvements. Normal traffic flows are likely to increase over time as a result of growth in population and economic activity. Traffic growth is usually closely related to economic growth as measured by GDP and can be forecast by relating future traffic growth to predicted economic growth. The demand for transport is related to the output of the economy that produces it. Traffic growth is almost invariably
Appendix 11 51 positively correlated with GDP growth. Using the estimates of GDP growth and elasticities, the evaluation assumed the traffic growth rates shown in Table A11.4.
15. Traffic growth can be affected by changes in the vehicle types used or loading patterns that can follow significant improvements to a road. Such changes cannot be incorporated in a standard HDM-4 analysis, which applies the same traffic projection to both the base case and the with project case, although newly generated traffic can be applied in the with-project case. Reflecting the apparent shift revealed in traffic counts, the change from the use of heavy goods vehicle (rigid trucks with trailer) to the use of very heavy goods vehicles (multi-axle trucks) was simulated by combining these into a single vehicle type. No growth was assumed for public utility vehicles (pickup trucks) and motorcycles with trailers because use of these appeared to be decreasing.
Table A11.4: Projected Normal Traffic Growth Rates (%) 2010–2012 2013–2020 2021 Onwards Motorcycles 6.0 9.0 2.0 Passenger Vehicles 5.2 7.8 6.5 Freight Vehicles 4.8 7.2 6.0 Source: Asian Development Bank
6. Generated Traffic
16. Generated traffic results from the improvement to the road, not normal growth. Generated traffic arises because the road improvement makes a journey more attractive due to the resulting reduction in travel cost and/or trip time. The upgrading of unpaved roads to sealed standard normally provide sufficient reductions for traffic generation to occur. The standard approach to estimating generated traffic is to use demand relationships. The price elasticity of demand for transport is the responsiveness of traffic to a decline in transport costs. It has been measured in road appraisal studies in developing countries and found to be the range -0.6 to -3.0 and to average about -1.5. This means that a 1% decrease in transport costs leads, on average, to a 1.5% increase in traffic. Evidence suggests that the elasticity of demand for passenger transport is usually well above 1, while that for freight transport is usually lower. Freight traffic generation would logically be minimal because the impact of lower transport costs on demand via lower retail prices for the commodities transported would usually be too small to measure but empirical evidence is that freight traffic is often higher after road improvement.
17. It is probable that the shorter journey time and increased comfort contribute more to higher passenger travel demand than lower VOC but these effects cannot be separated from the price effect. In any case, the theoretical response to lower VOC in terms of increased demand for travel depends not on the total VOC but on the perceived cost reduction. This is mainly the cost of fuel, plus the value of time, in the case of private vehicles. In the case of public transport, it is the fare reduction plus the value of time. The true price elasticity is almost certainly less than 1; if it was 1 or above, the traveler would be deciding to spend all of the cost saving on additional trips. Therefore, if more trips are made, travelers are almost certainly not reacting only to a lower price but also to superior service. This does not present a problem because this effect is incorporated in the estimate of demand elasticity and any additional trips are given the same value in the evaluation. But if the generation of passenger trips following the sealing of roads is as much a response to quality of service as the cost reduction, the level of generated traffic will not be closely related to the reduction in cost and it is not useful to calculate a precise relationship. A general allowance for generated traffic will normally be as accurate. In the case of a post-project study such as this, the traffic surveys indicate the actual
52 Appendix 11 traffic increase, although it is not possible to separate generated traffic from normal traffic, and the evidence from 1 year is not conclusive.
18. The evidence from the traffic counts is that traffic generation has been substantial since project completion, although the lack of annual count data makes this impossible to verify. The increase between 2006 and 2010 was much higher than would be expected from normal traffic growth for several vehicle types and traffic generation is the obvious explanation.
Table A11.5: Assumed Traffic Generation Rates (% of Normal Traffic) Contract 6E Contract Contract Contract Vehicle Type km 0–17 km 17–48.4 6F 5F 56–68 Motorcycle 0 0 80 Motorcycle and trailer 0 0 0 0 60 Passenger car 100 100 100 30 80 Van 200 200 150 100 80 Land drive vehicle 100 100 100 100 60 Public utility vehicle 0 0 0 0 60 Light and medium goods vehicle 50 50 50 50 50 HGV 25 25 25 25 50 Very HGV 0 0 0 0 10 Minibus 25 50 0 0 10 Bus 200 200 100 0 0 Other 0 0 0 0 0 HGV = heavy goods vehicle, km = kilometer. Source: Asian Development Bank
19. The economic benefit arising from this traffic is calculated as half the benefit to an equal amount of normal traffic. In theory, generation should be determined from costs expressed in financial rather than in the economic terms used for the calculation of project benefits but the difference in percentage terms is small.
20. In addition to generated traffic of the type discussed in para. 16, additional trips are made if road closures that normally occur during the rainy season are eliminated or reduced following upgrading. The benefits of such additional trips are valued in the same way as generated trips, and so are best considered generated traffic. The effect of generation is sometimes assumed not to occur in full for a number of years while road users adjust to the new situation following road improvement. For simplicity, this evaluation assumed that all generation occurred in the first year after improvement. Generated traffic has been assumed to grow at the same rate as normal traffic.
7. Diverted Traffic
21. Diverted traffic is traffic shifted from another route or mode of transport due to the road improvement. Traffic will normally take the quickest or cheapest route available even it is not the shortest and, by providing savings in time and expense, improvements to a road may attract existing traffic from another route.
22. The potential for diversion was considered low during the feasibility study and not included. Although the project roads now provide a good alternative to NR5 via Battambang from Poipet to Phnom Penh and Viet Nam, this route is considerably longer. Normally, diversion would not be expected. Preliminary analysis of the 2010 origin–destination survey results indicates that virtually all traffic on the project roads is local, originating and ending in the
Appendix 11 53 provinces of Siem Reap and Banteay Meanchey. This indicates that there has been no significant traffic diversion. No allowance for it has been included in the analysis.
D. Results of the Economic Reevaluation
23. The results of the economic evaluation are shown in Table A11.7. The results are summarized for the four contract packages and for the project as a whole. The values of the main components of project costs and benefits are shown as undiscounted values. The net present value (NPV) shown is the sum of all savings minus the capital costs, discounted to base year values at 12%. The economic internal rate of return (EIRR) is shown in the final column.
Table A11.6: Summary of Evaluation Results ($ million) Capital Passenger Generated Cost Maintenance VOC Time Traffic EIRR Item Increase Cost Saving Saving Saving Benefits NPV (%) Section 6E A (1.675) 2.697 47.368 8.602 10.485 0.559 24.8 Section 6E B (12.702) 0.586 121.511 23.655 35.571 28.431 34.2 Contract 6F (19.192) 0.783 181.358 38.590 52.794 42.660 33.1 Contract 5F (14.483) 0.783 272.731 85.864 47.592 78.864 61.1 Contract 56–68 (11.565) - - - 119.037 15.211 27.3 Total (59.617) 4.849 622.968 156.711 265.479 165.725 37.8 () = negative, EIRR = economic internal rate of return, NPV = net present value, VOC = vehicle operating cost. Source: Asian Development Bank
24. All four contracts packages are highly viable. The project overall has an EIRR of 37.8%, much higher than the appraisal estimate of 30.7%. As would be expected, the higher traffic levels produce higher rates of return. The highest rate of return is for the Sisophon–Poipet road component, which had a lower capital cost per kilometer and a significantly higher post-project traffic level than the other sections. The lowest rate of return is for Section 6E A because this was a sealed road in fair condition before the project and thus the benefits of improvement are much lower. The difference between the roughness indexes of the base case roads and the post-project improved roads largely determined the scale of the benefits obtained during each year of the evaluation period. The capital cost increase appears low for this section. In the base case, it was assumed that the pavement would have required frequent reseals, which are considered to be a capital cost in HDM-4.
25. The new estimate of EIRR for roads 56–68 is 27.3%, much lower than the 88.9% estimated at appraisal for two reasons. The final costs of the works on the two roads were much higher than the estimates used at appraisal and the appraisal used VOC and time savings benefits based on a reduction in these costs per kilometer. No improvement in road surface condition resulted from the project, although road 68 was improved later using other funds.
26. The results show significantly higher rates of return than those obtained in the feasibility study in 2003 although this also showed all sections of the project to be clearly viable. The reasons include lower capital costs in real terms, higher traffic levels than forecast in 2003, and lower standard of roads in the base case because of their deterioration after the feasibility study.
27. By far the largest source of benefits was VOC savings. Passenger time savings and generated traffic benefits together amounted to only about 50% of VOC savings. Generated traffic benefits included both VOC and time savings. They are much lower than those of normal traffic because the savings are valued at half of those of normal traffic and in some traffic
54 Appendix 11 categories, little or no generated traffic occurred. The balance of the benefits were provided by the road maintenance cost savings and the residual value of the investment. The capital costs shown in Table A11.7 were net of the residual values of the improvements. These have virtually no impact on the evaluation results because of the impact of discounting.
Appendix 12 55
QUANTITATIVE ASSESSMENT OF OVERALL PROJECT PERFORMANCE
1. Overall Rating
Criteria Assessment Rating (0–3) Weights (%) Weighted Rating Relevance Highly Relevant 3 20 0.60 Effectiveness Effective 2 30 0.60 Efficiency Efficient 2 30 0.60 Sustainability Likely 2 20 0.40 Overall Rating Successful 2.20 Note: Relevance: Project objectives and outputs were relevant to strategic objectives of the Government and the ADB. Effectiveness: Project achieved its outcome. Efficiency: Project achieved objectives in an efficient manner Sustainability: Project benefits and development impacts are sustainable
2. Rating System
Rating Value Relevance Effectiveness Efficiency Sustainability 3 Highly Relevant Highly Effective Highly Efficient Most Likely 2 Relevant Effective Efficient Likely 1 Partly Relevant Less Effective Less Efficient Less Likely 0 Irrelevant Ineffective Inefficient Unlikely Rating: Greater than 2.7 = Highly Successful Between 1.6 and less than 2.7 = Successful Between 0.8 and less than 1.6 = Partly Successful Less than 0.8 = Unsuccessful