Report No: ICR00002185

Document of The World Bank

Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39760 IDA-H1220)

ON A

CREDIT

IN THE AMOUNT OF SDR 45.970 MILLION (US$67.60 MILLION EQUIVALENT)

AND AN

Public Disclosure Authorized IDA GRANT

IN THE AMOUNT OF SDR 27.201 MILLION (US$40.00 MILLION EQUIVALENT)

TO THE

REPUBLIC OF UGANDA

FOR THE

THE ROAD DEVELOPMENT PROGRAM, PHASE III Public Disclosure Authorized

May 17, 2012

Transport Unit Country Department AFCE1

Public Disclosure Authorized Africa Region

CURRENCY EQUIVALENTS

(Exchange Rate Effective October 31, 2011)

Currency Unit = Uganda Shillings (UGX) SDR1.00 = US$1.59 US$1.00 = 2,585 UGX

FISCAL YEAR July 1 – June 30

ABBREVIATIONS AND ACRONYMS

AfDB African Development Bank APL Adaptable Program Loan CAS Country Assistance Strategy CHOGM Commonwealth Heads of Government Meeting CPA Contract Price Adjustment DANIDA Danish International Development Agency DCA Development Credit Agreement DFA Development Finance Agreement DLP Defect Liability Period DPs Development Partners DRC Democratic Republic of Congo DUCARIP District, Urban, and Community Access Roads Investment Plan EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EMP Environmental Management Plan EOT Extension of Time ESIA Environmental and Social Impact Assessment EU European Union FM Financial Management FY Financial Year GoU Government of Uganda HDM Highway Design and Maintenance Model HIV/AIDS Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome ICR Implementation Completion and Results Report IDA International Development Association IPR Independent Procurement Review IRI International Roughness Index ISR Implementation Status Report KM Kilometer LVR Low Volume Roads M&E Monitoring & Evaluation MOFPED Ministry of Finance, Planning, and Economic Development MOWHC Ministry of Works, Housing, and Communication (July 1, 1998 to June 30, 2006) MOWT Ministry of Works and Transport MTEF Medium Expenditure Framework MTR Mid Term Review NEMA National Environmental Management Authority NDF Nordic Development Fund NGOs Non Governmental Organizations NPV Net Present Value NRSAP National Road Safety Action Plan NTMP National Transport Master Plan

OPRC Output and Performance Based Road Contracting PAD Project Appraisal Document PDO Project Development Objectives PIP Project Implementation Plan PRSC Poverty Reduction Strategy Credit QAG Quality Assurance Group RAFU Road Agency Formation Unit RAP Resettlement Action Plan RDP Road Development Project RDPP1 Road Development Program Phase I RDPP2 Road Development Program Phase II RDPP3 Road Development Program Phase III RED Roads Economic Decision RF Road Fund RSDP Road Sector Development Program RSISTAP Road Sector Institutional Support Technical Assistance Project SDR Special Drawing Rights SIA Social Impact Assessment SIL Specific Investment Loan STDs Sexually Transmitted Diseases TOR Terms of Reference TSDP Transport Sector Development Project TSIREP Transport Sector Investment Recurrent Expenditure Program TYDRIP Ten Year District Road Investment Program UNRA Uganda National Roads Authority UWA Uganda Wildlife Authority VOC Vehicle Operating Cost WB World Bank

Vice President: Makhtar Diop Country Director: Philippe Dongier Sector Manager: Supee Teravaninthorn Project Team Leader: Labite Victorio Ocaya ICR Primary Author: Zemedkun Girma

REPUBLIC OF UGANDA

ROAD DEVELOPMENT PROGRAM, PHASE III

Contents Data Sheet ...... i A. Basic Information ...... i B. Key Dates ...... i C. Ratings Summary ...... i D. Sector and Theme Codes ...... ii E. Bank Staff...... ii F. Results Framework Analysis ...... ii G. Ratings of Project Performance in ISRs ...... vi H. Restructuring ...... vii I. Disbursement Profile ...... vii 1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 6 3. Assessment of Outcomes ...... 14 4. Assessment of Risk to Development Outcome ...... 19 5. Assessment of Bank and Borrower Performance ...... 19 6. Lessons Learned ...... 22 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 23 Annex 1. Project Costs and Financing ...... 24 Annex 2. Outputs by Component ...... 25 Annex 3. Economic and Financial Analysis ...... 32 Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR ...... 43 Annex 6. List of Supporting Documents ...... 57

Data Sheet

A. Basic Information

ROAD Country: Uganda Project Name: DEVELOPMENT PROGRAM, PHASE 3 Project ID: P074079 L/C/TF Number(s): IDA-39760,IDA-H1220 ICR Date: 05/17/2012 ICR Type: Core ICR Adaptable Program THE REPUBLIC OF Lending Instrument: Borrower: Loan (APL) UGANDA Original Total XDR 73.17M Disbursed Amount: XDR 72.84M Commitment: Revised Amount: XDR 73.17M Environmental Category: B Implementing Agencies: RAFU/UNRA Co financiers and Other External Partners: None

B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 11/27/2002 Effectiveness: 09/30/2004 06/23/2005 04/25/2007

11/11/2009 Appraisal: 02/06/2004 Restructuring(s): 09/23/2009 01/12/2011

Approval: 09/02/2004 Mid-term Review: 04/28/2008 05/05/2008 Closing: 12/31/2009 10/31/2011

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Moderately Satisfactory Implementing Moderately Satisfactory Quality of Supervision: Agency/Agencies:

Overall Bank Moderately Satisfactory Overall Borrower Moderately Satisfactory Performance: Performance:

C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential problem project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem project at any Quality of Yes Moderately Satisfactory time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status:

D. Sector and Theme Codes Original Actual Sector Code (as percent of total Bank financing) Roads and highways 100 100

Theme Code (as percent of total Bank financing) Administrative and civil service reform 20 10 Infrastructure services for private sector development 20 20 Other urban development 20 20 Rural services and infrastructure 40 20 Trade facilitation - 30

E. Bank Staff Positions At ICR At Approval Vice President Makhtar Diop Callisto E. Madavo Country Director Philippe Dongier Judy M. O’Connor Sector Manager Supee Teravaninton Sanjivi Rajasingham Project Team Leader Labite Victorio Ocaya Stephen Brushett ICR Primary Author Zemedkun Girma

F. Results Framework Analysis

Project Development Objectives (PDO) The development objective of the Road Development Program, Phase 3 (RDPP3) project is to improve access to rural and economically productive areas and to progressively

ii continue to build up sustainable road sector planning, design, and program management capability, including road safety management.

The project comprises: (i) upgrading and strengthening of three high priority national roads: Kampala-Gayaza-Zirobwe-Wobulenzi; Soroti-Dokolo-Lira; and Busega-Mityana; (ii) designing the upgrade of about 300 km of district roads reclassified as national roads, which therefore are required to meet the National Road Standard; (iii) studying, through the use of consultancies, the feasibility of upgrading to bitumen standard about 600 km of priority national roads (iv) rehabilitation/re- graveling of the Atiak-Moyo road; (v) constructing a proposed Road Authority headquarters building; (vi) developing institutional support for the establishment of the Road Authority, and (vii) provisioning of external auditing services.

These project objectives complement the objectives of the Adaptable Program Loan (APL) Phase I and II projects in meeting the overall objectives of the Road Development Program.

Revised Project Development Objectives

Although some project sub-components were dropped, following the mid-term review, and the scope of some components were revised, the project development objectives remain unchanged. Due to the high bids received on the first three civil works contracts, the target for upgrading of gravel roads was revised from 178 km to 152 km. Similarly, the target for rehabilitation of paved roads was revised from 72 km to 15 km, with the GoU agreeing to finance the rehabilitation of the other 57 km of the Busega-Mityana road. At the request of the GoU the Atiak-Moyo road was left to be financed by the government, with the understanding that the road would be upgraded to paved standard. GoU has now financed seven bridges on this road and ferry landings where the Atiak- Moyo crosses the river Nile. The actual achieved achievement, including the GoU funded roads, were the upgrading of 152 km of gravel roads and the rehabilitation of 72 km of paved roads.

At appraisal, baselines for the PDO indicators had not been established. Accordingly, the PDO baseline indicators were established in May 2005, with these targets being used during the entire credit period.

A: PDO Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Values documents) Target Years Average travel time (typical mode of transport is the bus) on selected Indicator 1: national road: Soroti-Lira Road (123 km) Value: 140 minutes 100 minutes travel 100 minutes (quantitative or travel time time with project at N/A travel time with qualitative) without project IRI 2 project at IRI 2

iii

at international roughness index (IRI) 12 Date achieved 05/05/2005 12/31/2009 10/31/2010 Comments: (including Target value achieved 100 percent. percentage of achievement) Vehicle operating cost (VOC) for 15-year design period on Soroti-Lira Indicator 2: road (USD/vehicle km)(Number) Value: (quantitative or 0.464 0.224 N/A 0.22 qualitative) Date achieved 06/22/2005 12/31/2009 10/31/2010 Comments: (including Achieved 53 percent reduction in vehicle operating cost compared to percentage of baseline and two percent compared to target value. achievement) Indicator 3: Traffic on selected national road: Soroti-Lira Road (vpd)(Number) Value: (quantitative or 346 380 N/A 894 qualitative) Date achieved 06/22/2005 12/31/2009 10/31/2010 Comments: Achieved 258 percent of baseline and 235 percent of target value. (including With the return of peace in northern Uganda and South Sudan, economic percentage of achievement) activities and subsequently the traffic increased two and half times.

B: Intermediate Outcome Indicators(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Values documents) Target Years 178 km of existing national gravel roads upgraded to paved (bitumen) to Indicator 1: meet national road Class II standard of width 6.0 meter and 1.5 meter shoulders (pedestrian walkways). 152 km of 178 km of 154 km of 178 km of national national gravel national gravel national gravel gravel roads: Soroti- roads: Soroti- roads: Soroti-Lira roads: Soroti- Value: Lira road [125 Lira road [123 road [125 km] and Lira road [125 (quantitative km[ and Gayaza- km] and or Qualitative) Gayaza-Zirobwe- km] and Gayaza- Zirobwe-Wobulenzi Gayaza- Wobulenzi road Zirobwe road [29 road [54 km[ Zirobwe road [54 km] km] [29 km] Date achieved 05/05/2005 12/31/2009 11/29/2009 07/21/2011 Comments: Achieved 85 percent of target value and 90 percent of formally revised (including target.

iv percentage of achievement) 72 km of damaged paved roads reconstructed and widened to Class I Indicator 2: (national roads standard) Busega-Mityana Value: road [57 km] and (quantitative 72 km 15 km 15 km or qualitative) Kampala-Gayaza road [15km] Date achieved 05/05/2005 12/31/2009 11/29/2009 07/21/2011 Comments: Due to high bids received on the first three civil works contracts, the (including Busega-Mityana road (57 km) was dropped from IDA financing and was percentage of achievement) picked up under GoU financing. Indicator 2 : 91 km of gravel roads improved Atiak-Moyo road [91 km]: gravel Design for Design for road with poor upgrading upgrading Atiak- Value: riding quality (IRI 91 km of gravel Atiak-Moyo Moyo road to (quantitative 13) and poor ferry roads improved road to Sudan or qualitative) Sudan border landings at the border [104 km] [104 km] Nile river completed crossing Date achieved 05/05/2005 12/31/2009 01/03/2006 10/31/2011 Comments: (including At the request of GoU, re- graveling of Atiak-Moyo road was dropped. percentage of Instead, the design has been updated so that the road could be sealed. achievement) Design for upgrading of 300 km district roads to be upgraded and Indicator 3 reclassified to a Class III national paved bitumen standard road (width 5.6m and 1.2m sealed shoulders) 311.5 km of district roads 300 km of district designed for roads designed for The 300 km of upgrading and upgrading and roads are in the reclassification reclassification to a Value: classification of to a Class III Class III national (quantitative district roads national paved or qualitative) paved bitumen (average width: bitumen standard road (width 4.5m) standard road 5.6m and 1.2m (width 5.6m and sealed shoulders) 1.2m sealed shoulders) Date achieved 05/05/2005 12/31/2009 10/31/2011

Comments: (including 104 percent achieved percentage of achievement)

Feasibility studies and detailed design for upgrading of about 600 km of Indicator 4 national roads to paved bitumen standard Long list of 755 Short list of km of gravel about 200 km of Feasibility studies Detailed design roads prepared. key priority and detailed design and tender Average daily roads prepared for upgrading of documents Value: traffic recorded and a Request for about 600 km of prepared for the (quantitative on the most Expression of or qualitative) national roads to two high heavily trafficked Interest issued paved bitumen priority roads, roads ranged from for consultant’s standard completed totaling 222 km 200 to 400 vpd services for detailed design Date achieved 05/05/2005 12/31/2009 05/15/2007 10/31/2011 Comments: Only two high priority roads totaling about 200 km qualified for the (including percentage of detailed design. Indicator 5 Road Authority legally established and operationally functional The Roads Road Authority Agency legally Road Authority Formation Unit established and Value: legally established (RAFU), became fully (quantitative and operationally or qualitative) predecessor to the operationally functional Roads Authority functional on operational July 1, 2008 Date achieved 05/05/2005 12/31/2009 07/01/2008

100 percent complete. Comments: The Uganda National Roads Authority Bill was approved by Parliament (including on May 24, 2006, Board of Directors appointed on January 22, 2007, percentage of achievement) Executive Director appointed on October 31, 2007 and key positions filled by June 30, 2008.

G. Ratings of Project Performance in ISRs

Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 09/09/2004 Satisfactory Satisfactory 0.00 2 12/14/2004 Satisfactory Satisfactory 0.00 3 01/26/2005 Satisfactory Satisfactory 0.00 4 08/30/2005 Satisfactory Satisfactory 0.00 5 03/15/2006 Satisfactory Satisfactory 0.00 6 12/27/2006 Satisfactory Satisfactory 0.00 7 06/28/2007 Satisfactory Satisfactory 1.00 8 12/12/2007 Moderately Satisfactory Unsatisfactory 6.62 9 06/04/2008 Moderately Satisfactory Moderately 21.92

Unsatisfactory 10 12/20/2008 Moderately Satisfactory Satisfactory 44.35 11 03/19/2009 Moderately Satisfactory Satisfactory 59.96 12 09/09/2009 Satisfactory Satisfactory 86.56 13 11/30/2009 Satisfactory Satisfactory 95.73 14 06/28/2010 Satisfactory Satisfactory 103.09 15 04/12/2011 Satisfactory Satisfactory 106.30

H. Restructuring

The project was restructured on April 25, 2007, November 11, 2009 and on January 12, 2011. The April 2007 restructuring was to amend the Credit to 100 percent financing by IDA. During the restructuring of November 2009, some of the components were dropped, primarily due to the high bids received on the civil works contracts. The restructuring involved dropping of some of the components of the project, the reallocation of credit proceeds and extension of the closing date. The restructured project dropped the civil works for: (i) the upgrading of the Zirobwe-Wobulenzi road (23 km); (ii) the re-graveling of the Atiak-Moyo road (91 km); (iii) the reconstruction and upgrading of the Busega-Mityana road (57 km); and (iv) construction of the UNRA/MOWT Headquarter building. The funds allocated to these dropped activities were reallocated to meet the shortfall of funds for the upgrading of the Soroti-Lira road (125 km) and Kampala-Gayaza-Zirobwe road (44 km) of the project. The Credit was then amended to allow for 20 percent of GoU financing of the civil works. The January 2011 restructuring was to allocate the unallocated funds to Categories 1 and 2 (works and services). I. Disbursement Profile

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1. Project Context, Development Objectives, and Design 1.1 Context at Appraisal 1. In 2000, The World Bank’s (WB) Country Assistance Strategy (CAS) for Uganda had the primary objective of reduction of poverty through a medium-term strategy focused on private-investment-led growth and export diversification. Lowering transport costs and improving reliability of access to infrastructure were considered in the CAS as key elements to facilitate business development and to support poverty reduction. Regionally targeted public investment—mainly in northern Uganda, which has lagged behind due to two decades of insurgency—was also considered as a key element of the CAS.

2. At project appraisal in 2004, the transport infrastructure in Uganda was comprised of: (i) a road network of about 34,000 km, out of which 10,000 km were national roads, 21,000 km district roads, and 3,000 km urban roads; (ii) a railway system of about 1,350 km; (iii) wagon ferry services on Lake Victoria; and (iv) air transport facilities including one international airport and eleven domestic air fields. Road transport was by far the most dominant mode of transport and played a pivotal role in supporting the economic and social development programs. The roads carried over 90 percent of the country’s passenger and freight transport and provided the only form of access to most rural communities. The classified roads, which make up only 30 percent of the network, carried 80 percent of the total road traffic. Uganda's road network has also served as a transit corridor linking the landlocked neighboring countries of Rwanda, Burundi, parts of Eastern Democratic Republic of Congo (DRC), and southern Sudan to the sea.

3. Centrally located in the East African region, the road network is of national and regional strategic importance, as it helps Uganda play a crucial role in the region's economy and regional cooperation. Prior to 1974, Uganda had one of the best road networks in sub-Saharan Africa. The whole road network deteriorated sharply between 1974-1985 due to neglect, mismanagement, and lack of adequate maintenance: a consequence of civil strife and disruption of civil administration. The neglect of road maintenance resulted in increased transport costs, reduced transport fleets, and an approximate 75 percent loss in road network investment due to deterioration. During that period, Uganda registered negative economic growth, and declining agricultural and industrial production, while population growth continued to increase at over three percent per annum.

4. Since 1986, government policy has focused on improved transport and communication infrastructure for accelerated development and to revamp the economy, as well as to consolidate national unity and regional cooperation. The 1986-1995 rehabilitation and maintenance efforts improved the condition of the road network from less than 10 percent in a good state of repair in 1986 to approximately 70 percent of main roads and about 40 percent of district feeder roads by 1995. This duly impacted the development of the national economy, such that Uganda registered average annual growth rates of six percent in the 10 years from 1985 to 1995, with the economy 70 percent larger than it was in 1985.

5. The World Bank’s Adaptable Program Loan (APL) was an International Development Association (IDA) contribution to the Government of Uganda’s (GoU) Road Sector Development Program (RSDP); which was developed in 1995 and endorsed by the participating development partners at a Donor’s Conference held in Paris on November 30, 1996. The primary purpose of the RSDP was to improve access to rural and economically productive areas by removing major constraints to transport services on the country's road network. The RSDP also aimed to support actions related to further strengthening of the road sector management.

6. The projected total expenditure under the RSDP, over the first ten years, was estimated at about US$1.5 billion in constant prices at the end of 1998. The initial RSDP was updated to a rolling RSDP and was endorsed by stakeholders, including Donor Partners, at a road conference held in Kampala in April 2002. The RSDP originally focused on the national road network, but the review of 2002 took on board the district, urban and community access roads (DUCAR). The projected expenditure for the updated RSDP for the 10 years from 2001/02 to 2010/11 was estimated at US$2.28 billion and had three major components: (i) the national road sub-sector (69.5 percent), the DUCAR sub-sector (25.3 percent) and road sector institutional development and capacity building (5.2 percent) of the program cost.

7. Out of the RSDP cost, around US$1.4 billion had been secured in 2004, leaving a funding gap of about US$0.88 billion. The Bank provided funding to the RSDP through an APL instrument in the total amount of US$289.35 million. The APL 1 and 2 were in the amount of US$90.98 million and US$64.52 million respectively. The Road Development Program Phase III (RDPP3), the third phase of a four-phased APL program, provided US$107.6 million.

Table 1: Financing Summary for APL Phases

APL Phases Financing and Implementation Actual Financing and Implementation Difference of actual from appraisal Period at Appraisal Period at Closing

Amount Start Date Completion Amount Effectiveness Completion Amount Start to Start to (US$m) Date (US$ m)* Date Date (US$ m)* Effective Completion ness - No. No. of Days of days Phase I 90.98 Nov. 1999 June 2004 92.33 Feb 1, 2000 June 30, 2008 1.35 +60 +1460 Phase II 64.52 July 2001 June 2006 76.12 April 11, 2002 June 30, 2008 11.6 +250 +730 Phase III 107.60 Oct. 2002 June 2007 112.54 June 23, 2005 Oct 31, 2011 4.94 +945 +1580 Phase IV 26.25 June 2003 Dec. 2007 N/A N/A N/A N/A N/A N/A Total 289.35 280.99 * The difference appears due to exchange rate between SDR and US$. 1.2 Original Project Development Objectives (PDO) and Key Indicators 8. The development objective of the Road Development Program, Phase 3 project was to improve access to rural and economically productive areas and to progressively continue to build up sustainable road sector planning, design and program management capability including road safety management. The project components are: (i) upgrading and strengthening three high priority national roads: Kampala-Gayaza-Zirobwe-

Wobulenzi; Soroti- Dokolo-Lira; and Busega-Mityana roads; (ii) designing the upgrade of about 300 km of district roads reclassified as national roads, which therefore are required to meet the National Road Standard; (iii) studying, through the use of consultancies the feasibility of upgrading to bitumen standard of about 600 km of priority national roads; (iv) rehabilitation/re-graveling of the Atiak-Moyo road (91 km); (v) constructing a proposed Road Authority headquarters building; and (vi) developing institutional support for the establishment of the Road Authority; and provisioning of external auditing services. These project objectives complement the objectives of the Phase I and II projects in meeting the overall objectives of the Roads Development Program. The core indicators, included: (i) increase in the share of rural population with all-season access; (ii) increase in the proportion of the road network in good condition; and (iii) direct project beneficiaries (number), of which the percentage of female. 1.3 Revised PDO and Key Indicators 9. Following the mid-term review, the Credit was restructured and the scope of work revised for some components. The project development objective remained unchanged as agreement was reached with GoU that they would finance the components that were dropped. As a result, it was not necessary to make any changes in the key indicators. 1.4 Main Beneficiaries 10. The primary target group or main beneficiaries of the project were the road users, who were to gain from travel time savings and vehicle operating cost (VOC) reduction as a result of improvements on the main roads. The roads under the program serve areas of good agricultural potential in central, eastern, and northern Uganda and the road investments benefited agricultural producers and consumers as demonstrated by the increase in traffic. Furthermore, the privately provided commercial bus services were capable of competitively extending coverage and improving service frequencies to more remote and less developed areas of the project after responding to the road improvements. To this extent, VOC savings also benefited low-income road users leading to improvements in their accessibility to markets and social services.

11. The communities living along the roads benefited from growth in trade, economic activities, and the introduction of awareness creation of cross cutting issues of road safety matters such as speed controls, sealed verges, road signs etc. In addition, the project also benefitted the Ministry of Works and Transport (MOWT), the former Road Agency Formation Unit (RAFU), now the Uganda National Roads Authority (UNRA), and local governments. RDPP3 also contributed support of the preparation and launching of the National Transport Master Plan (NTMP). The NTMP is being used as a guiding principle for making decisions relating to planning and development of transport projects in the country and in the Greater Kampala Metropolitan Area. As the improved road projects were part of a comprehensive countrywide road investment strategy, the overall RDPP3 project contributed a great deal to fostering economic growth and poverty alleviation through improvement in accessibility and market integration. RDPP3 is succeeded by the on-going Transport Sector Development Program (TSDP); which is a three years Specific Investment Loan (SIL).

1.5 Original Components 12. The original project was comprised of the following parts:

Component 1: Civil works for upgrading, rehabilitation and reconstruction of national roads including: (i) upgrading of about 125 km of the Soroti-Lira road to paved (bitumen) standards; (ii) upgrading of about 68 km of the Kampala-Gayaza-Zirobwe-Wobulenzi road; (iii) rehabilitation and re-graveling of about 91 km on Atiak-Moyo road; and (iv) reconstruction and upgrading of the 57 km Busega-Mityana road.

Component 2: Civil works for construction of headquarters building for MOWT and the Road Authority Component 3: Roads construction supervision services for construction of roads referred to in Component.1 Component 4: Review and update of detailed engineering design and preparation of tender documents, verification of economic feasibility for reconstruction of the paved roads and completion of environmental and social assessments for Busega-Mityana road, all through the provision of technical advisory services. Component 5: Roads feasibility and detailed engineering design for: (i) upgrading of about 300 km of district gravel roads to national roads at paved (bitumen) standard; and (ii) upgrading of about 600 km of national roads from gravel to paved (bitumen) standard and detailed design of selected roads thereof, all through the provision of technical advisory services. Component 6: Institutional support and establishment of the Road Authority, comprising: (i) provision of training and technical advisory services to consolidate the institutional reform process, including establishment and commencing operations of the Road Authority; (ii) strengthening institutional support for implementation of Components 1 through 5 of the project; and (iii) provision of external audit services. 1.6 Revised Components 13. The scope of the revised project components include:

Component 1: i) Upgrading from gravel to paved (bitumen) standard of the Kampala-Gayaza- Zirobwe-Wobulenzi road dropped the Zirobwe-Wobulenzi (23km) section of the road. ii) The reconstruction of the Busega-Mityana road (57km) dropped from the credit, but funded by the Government. iii) The rehabilitation and re-graveling of Atiak-Moyo road (91km) scope of work reduced only to design works for upgrading the road to paved (bitumen) standard and the Government agreed to finance the civil works part.

Component 2: Civil works for construction of UNRA headquarter building dropped.

Component 3: The supervision works of the components under Component 1 dropped and Government financed the corresponding consultant’s services. The GoU agreed to undertake the project financing.

Component 4: Detailed designs on total length of roads slightly increased to 312km from the planned 300km.

Component 5: Feasibility studies and engineering designs reduced to 300km from 600km of high traffic national roads only to include: Gulu-Atiak-Bibia-Nimule (104km); Vurra-Arua-Koboko-Oraba (92km); Atiak-Moyo-Sudan border (104km).

Other significant changes

14. The project was restructured on April 25, 2007 to allow for 100 percent financing by IDA because of a lack of counterpart funding from GoU. The amended Development Financing Agreement (DFA) provided for the Credit to pay for taxes levied by, or in the territory of the Borrower, on the goods or services to be financed under the Financing, or on their importation, manufacture, procurement, or supply.

15. A second restructuring on November 11, 2009 was prompted by a shortfall resulting from higher than anticipated bids received on three works contracts tendered, out of the seven contracts originally planned for implementation under the Credit. Thus, the DFA was amended to: (i) drop the components that could not be financed under the Credit; (ii) reallocate the amounts in Category 1(b) of SDR 16.53 million to meet the shortfall in Category 1(a); to allow for 20 percent GoU financing of civil works under Category 1 of the Credit; (iv) extend the closing date by 22 months from December 31, 2009 to October 31, 2011; and (v) change the name of the implementing agency from RAFU to UNRA.

16. A third and final restructuring was carried out on January 12, 2011 to reallocate the amounts in Category 3 (unallocated) of SDR 5.451 million to Categories 1 and 2 so as to complete the remaining civil works contract for upgrading Kampala-Gayaza-Zirobwe road and the related supervision consultancy services; and to drop the requirement for completion of environmental and social assessment of the Busega-Mityana road that was dropped from Component 3 of the project.

17. Project Design, Scope and Scale: When the RDPP3 project faced large cost overruns it was intended for a while that the RDPP4 would be reshaped to finance such overruns. However, during a bi-lateral meeting between MOWT and the IDA in October 2008, it was decided that the cost overruns, which could not be financed by the RDPP3 project, could be financed by GoU from its increased road sector allocation. Accordingly, the Busega-Mityana road and bridges on the Atiak-Moyo road were financed by the GoU. Apart from the amendments mentioned above, no other changes were made to the project design scope and scale.

18. Implementation Schedule: The original project closing date was December 31, 2009. On June 19, 2009, the government requested IDA to amend the DFA and extend the

closing date by two years. On November 11, 2009, IDA issued a letter to GoU to amend the Development Finance Agreement (DFA) and extended the closing date by 22 months from December 31, 2009 to October 31, 2011.

19. Funding Reallocation: The final project cost at completion is US$239.34 million (US$116.40 million IDA credit/grant; US$122.94 million government contribution) against the commitment of US$133 million. This indicates that there was an overall increase of 80 percent at completion as compared to the original commitment of US$133 at appraisal. As a result, the GoU contribution increased from 20 percent to 51 percent at completion, inclusive of the dropped project components.

2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry 20. The Four Phased Roads APL was envisaged in the Bank Group's CAS discussed by the Executive Directors on November 16, 2000. The APL was an appropriate choice of lending instrument for the long-term development of Uganda's road sector. The program was simple in design, limiting itself to civil works for national roads and some district roads, plus institutional support for creating an autonomous road authority and a road fund. Suitable measures were included to transform the Road Agency Formation Unit (RAFU) to a full-fledged autonomous Uganda National Road Authority (UNRA) and to allow for continued dialogue with the borrower on the establishment of a Road Fund. The borrower fully participated in the preparation of the project and remained committed to the project objectives, in particular the road upgrading. On the institutional front there was strong ownership, as evidenced by the creation of UNRA and a Road Fund.

21. The project supported the government’s RSDP which is a critical element of its overarching strategy for poverty reduction. The RSDP nonetheless required regular and substantial infusions of capital support for infrastructure improvement and maintenance. The RDPP3 project was designed to provide a blend of grant and credit to ensure that the government’s financing requirements would be met, commensurate with its borrowing capacity and with acceptable progress towards debt sustainability. At the introduction of IDA grants in September 2002, the RDPP3 project was selected to receive IDA grant financing in view of the complementarily of the RSDP goals with those of the Poverty Reduction Strategy Credit (PRSC) and the specific contribution of infrastructure improvements targeted to increased mobility and access to services and markets of the rural poor.

22. The project design was relevant, appropriate and responsive to the client’s needs as it was part and parcel of the Road Development Program, in line with the GoU National Development Plan (NDP) and the RSDP. The Bank also shared knowledge and experience gained from the Road Maintenance Initiative (RMI) in Africa to help support the GoU and donor community efforts in the preparation of the RSDP. In addition, a series of information-sharing and consultation meetings took place with the donor community during project preparation about the RDPP3 project. As a result, the overall risk at project appraisal was assessed as “moderate.” The project had inbuilt price and

physical contingencies as well as the unallocated amounts to cater for any cost overruns. However, due to the long period of time that elapsed from appraisal to implementation, the contingencies were found to be inadequate to respond to the cost overruns and changing circumstances at project implementation.

23. Quality of Procurement in Project Design: At project appraisal, procurement aspects at design were straight-forward since this project was the third phase of the APL. All procurement arrangements, including a procurement plan, a project implementation plan, and procurement methods consistent with the World Bank guidelines, were discussed and agreed upon. The project primarily included procurement of large civil works contracts, requiring pre-qualification, for upgrading/strengthening of major roads. Other contracts were for consulting services for the supervision of the civil works contracts, carrying out design and feasibility studies on reclassified national and district roads, and data collection on the national roads network. RAFU was responsible for managing mainly donor-funded projects. Many donors were involved and appropriate coordination and control mechanisms were put in place. As such, Phases 1 and 2 of the program were implemented with some comfort with respect to GAC and no specific provisions were included in the Project Appraisal Document (PAD). However, during the implementation of the project, governance issues were noted and appropriate measures were taken to address them. This included the carrying out of independent procurement and technical audits and the overall restructuring of the procurement functions of UNRA.

24. Value for Money Assessment of the Procurement of the Civil Works Contracts: The procurement of each of the three civil works contracts were assessed by the Operations and Procurement Review Committee to determine that each one returned good value for money. The prequalification documents and confidential cost estimates were prepared in 2004 and revised estimates were prepared in 2006 prior to the invitation of bids to give an indication of the possible changes in price escalation. The bids opened between December 2006 and March 2007, were on average 36 per cent above the updated Engineer’s estimates. A value for money cost analysis was carried out based on: (i) the local market cost analysis for fluctuation in prices of petroleum products, power, and materials from quarries which came out in the bids as high cost items; (ii) road construction unit costs for similar projects in the region which seemed to be on the rise; (iii) the effect of insecurity, specifically for the Soroti-Lira road which was affected by insurgency at the time of bidding; (iv) pre-financing cost of guarantees, insurance premiums, delayed payments to contractors in previous contracts, and the implications on the prices of bids received. The conclusion was that the engineer’s estimates did not adequately address these issues. The analysis, based on sample contracts from elsewhere confirmed that the region had experienced massive price escalations in the cost of road construction contracts within the two years preceding the time of preparation and submission of the bids. A highway design and maintenance model (HDM) was re-run, with the lowest evaluated bid price, showed that the projects were still viable, with an economic internal rate of return (EIRR) above 15 percent for each road project.

25. Quality of Financial Management Aspects in Project Design: There was a dedicated Finance and Administration Division, in RAFU/UNRA, that was responsible for all aspects of financial management. A well-documented Financial Management

Manual was developed. The manual outlines internal control procedures as well as financial reporting arrangements for the funding received from the GoU budget, IDA, and other donors. Prior to appraisal, the accounting system was fully computerized based on a double entry accounting system. The financial management (FM) system was well established with experienced and knowledgeable staff, modified financial manual, and appropriate technology requirement to support the FM system. At appraisal, the FM system was performing satisfactorily. However, the project was subject to statutory audit regulations through which the internal audit function was provided by the Ministry of Works and Transport. This service was limited to the pre-audit inspection of the project’s transactions. The project envisaged a transition from RAFU to UNRA, which would have an internal audit function in accordance with the UNRA Act.

26. Quality of Environmental Aspects in Project Design: The project was classified as a Category B project with no potential impact on wildlife or national parks. Environmental aspects were integrated into project design to a large extent. Key stakeholders included in the project were: the National Environmental Management Authority (NEMA), the Uganda Wildlife Authority (UWA), the RAFU, the Ministry of Works and Transport (MOWT), concerned groups, NGOs, and local communities who were to participate through public consultations, field visits, and surveys for the project. The steps undertaken for environmental assessment and the environmental management plan (EMP) preparation included the following: determination of the scope of the environmental impact assessment (EIA); preparation of the terms of reference (TOR) for the EIA that captured the importance of preparing and implementing a comprehensive EMP; review of the coverage of the TOR; approval of the TOR by NEMA; information retrieval and consultation with the affected people and local non-governmental organizations (NGOs); comparison of alternatives; assessment of impacts; and proposal of mitigation and monitoring measures.

27. The EIA was carried out for each road project as part of the detailed feasibility studies for the following purposes: (i) to prepare a comprehensive investigation delineating any environmental impacts of the proposed road works; (ii) to describe and quantify these impacts; (iii) to draw up feasible mitigation measures for minimizing, eliminating or offsetting any adverse effects; and (iv) to recommend the most appropriate mitigation and/or enhancement measures. Mitigation measures were incorporated in the final road designs and contract documentation, and those with appropriate expertise were included in the supervision consultants’ staff to carry out such measures. An environmental and social monitoring plan was developed for each project road outlining the nature, location, and methodology of monitoring that should take place during the construction of each road.

28. Quality of Social Safeguards in Project Design: The social agenda was adequately outlined in the original project documentation. The key issues that were identified as relevant to the project objectives included: the likely impacts on road safety due to an increase in the number of accidents; impacts on public health resulting from dust and the spread of sexually transmitted diseases (STDs) and Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS); and degradation of air and water quality caused by dust, soil erosion, and siltation of water bodies/sources. Road

safety audits out under the Roads Sector Institutional Support Technical Assistance project (RSISTAP) provided the basis for safety considerations in road design, construction and maintenance. Each of the physical components included in the Phase III Project included provisions for qualified on-site clinic screening and counseling for HIV/AIDS and STD, and awareness and training programs for workers and local people, with associated costs included in the construction contracts. A social impact assessment (SIA) for the physical components was conducted prior to appraisal in conjunction with EIA for the roads selected for upgrading and strengthening. For each road project, the Environmental and Social Impact Assessment (ESIA) team included a social scientist. Socioeconomic data were collected and analyzed from each of the areas where the road improvements were planned. The ESIA included analysis of the temporary and localized social and microeconomic impacts resulting from construction activities. Further separate site specific resettlement action plans (RAP) for the roads were undertaken to determine the need for land take, prepare compensation for assets that would be lost and rehabilitation of the facilities for the project-affected persons.

29. Risk Assessment: A risk analysis was carried out and mitigation measures were identified. The identified key risks include: (i) total annual development and recurrent budget estimates are not made available in accordance with projections; (ii) GoU counterpart funds are neither budgeted nor released on time; (iii) annual road network maintenance program is not implemented as scheduled; (iv) government does not prepare legislation and support proclamation for the establishment of a Road Authority by end of 2005 and subsequently no transfer of agreed management functions for national roads from MOWT to the road authority; (v) an adequate social plan for redundant MOWT staff is neither developed nor funded; (vi) security problems in some project areas inhibit surveys, detailed engineering, and construction; (vii) detailed studies of individual roads do not conform to the economic viability of selected roads and do not address social and environmental aspects; and (viii) internal audits limited to pre-audit of expenditures with no review of internal control system.

30. The risk mitigation measures mainly relied on the experiences from the outcomes and the prevailing conditions of the parallel and ongoing APL components of RDPP1 and RDPP2. These comprised: (i) a rolling three-year Transport Sector Investment Recurrent Expenditure Program (TSIREP) produced every year in consultation with the Bank and in consistency with the Medium Expenditure Framework (MTEF); (ii) funding targets for the life of the program confirmed in letter of development policy; (iii) a maintenance program updated in line with the updating of the TSIREP by March 31, each year; (iv) Cabinet approval sought before end 2004 so that legislation for establishment of a roads authority can be tabled in Parliament in a timely fashion; (v) creation of the legal framework for the establishment of a roads authority to provide for a properly constituted internal audit function; and (vi) transfer of maintenance function to the roads authority, when established. 31. The risk due to the unforeseen procurement delay that led to costs escalations was not adequately addressed by the price/physical contingencies and the unallocated amount in the financing agreement. Overall the project risk mitigation measure rating was assessed as “Modest.”

32. The project was not subjected to a Quality Assurance Group (QAG) review at entry. 2.2 Implementation 33. The Bank approved the project on September 2, 2004, the DFA was signed on February 23, 2005, and the credit became effective on June 23, 2005 after a delay of five months. At the request of government, the financing agreement was amended on April 25, 2007 to allow for 100 percent IDA financing of consultancy services and civil works. A mid-term review (MTR) took place in May 2008 and identified the need to drop the components that could not be financed as a result of high bids received on the first three civil works contracts and to extend the closing date of the credit due to delays experienced in procuring the civil works contracts. It was therefore recommended that the credit be amended to: (i) drop some of the project sub-components; (ii) extend the closing date by 22 months; and (iii) change the name of the implementing agency from RAFU to UNRA which was to become effective on July 1, 2008. Accordingly, on November 11, 2009, the DFA was amended to drop the components that could not be financed. Further, due to initial delays in procurement of the civil works contracts, the Closing Date was extended by 22 months from December 31, 2009 to October 31, 2011. On January 12, 2011 a final amendment to the DFA was effected to reallocate the “unallocated” amount on the credit to enable completion of the remaining civil works contract for upgrading Kampala-Gayaza-Zirobwe road and the related supervision consultancy services. Overall, there was a further increase in costs of the three civil works contracts due to: (i) additional works that were not envisaged at the design stage, and (ii) price escalation for which the provision in the price contingencies was not adequate. 2.2.1 Major Factors Affecting Implementation Factors outside the Control of the GoU or Implementing Agencies

34. Limited Construction Sector Capacity: It was evident that there was a low construction industry capacity in Uganda, with very few contractors who had the capacity to handle ICB projects at the time of appraisal. Further, there were contractors with limited financial and technical capacities, leading to limited competition and lengthy verification processes on the performance of previous projects.

35. Insecurity: Some of the project roads fell in areas that were experiencing insurgency at the time of appraisal and commencement of the works. As a result, the response to the invitation for bids was poor.

36. Shortage in the Supply of Fuel: The temporary closure of the refinery at Mombasa, followed by an intermittent break down of operations of the oil pipeline from Mombasa to Eldoret, as well as the political crisis in Kenya at the of end 2007 to early 2008 created a fuel supply shortage. This contributed to the overall slow project progress and affected the civil works contracts both in completion delays and cost overruns.

37. Global Economic Crisis: The global economic situation affected the prices of inputs. This is a fact that was acknowledged by the QAG Report of November 2008. For

example, while the price of a barrel of oil was US$43.03 at appraisal in August 2004, the registered price in November 2006, 28 days prior to opening of bids was US$58.48, a 26 percent increase from the cost at appraisal. During the implementation of the civil works contracts, the price of a barrel of oil continued to fluctuate, generally with an upward trend and with a peak of US$133.90 in July 2008. The average price during the execution of the civil works contracts was US$77.35, which is 32.3 percent above the price 28 days prior to bid opening or 80 percent above the price at appraisal. In terms of contracts management, this resulted in higher than expected values of price adjustment for which a price contingency of five percent was provided in the project. In real terms, price adjustments followed the percentage increase of the price of a barrel of oil as the production and transportation of all other inputs were affected by the price of oil.

Factors Generally Subject to Government Control

38. Counterpart Funding: The project was designed to provide for 20 percent counterpart funding on the civil works component and 10 percent on the consultants’ services. At the request of government, the Credit was amended to provide for 100 percent financing of the civil works and consultants’ services. However, when bids were opened for the first three civil works contracts, the total sum of the contracts was 43 percent over and above the available funds for this category of expenditure on the Credit/Grant. Hence, the GoU had to commit additional financing to meet the shortfall for the three contracts that were signed. Accordingly, the DFA was amended to provide for 20 percent financing of the civil works by government, leaving the consultants’ services to be financed 100 percent by IDA. However, at closure, there were still outstanding payments on completed works, including retention, which the government committed to finance as the Credit is fully disbursed. Generally, the government has demonstrated a good performance by meeting the financing shortfall, over and above the planned 20 percent borrower commitment of counterpart funding for the creation of the Uganda National Roads Authority and a Road Fund.

Factors Generally Subject to the Implementing Agency’s Control

39. The Transition from RAFU to UNRA: RAFU has been the executing agency for Phase I and II of the program. While not always showing an outstanding performance, its managerial and technical skills were adequate. RAFU was the agency responsible for implementing the first half of Phase III of the program, but starting July 1, 2008, the newly created autonomous Road Authority (UNRA) became the responsible entity. With the transfer of responsibilities from RAFU to UNRA, some of the mechanisms and fiduciary controls were temporarily affected due to delays in transition to UNRA from RAFU and the resultant weakness reflected on transitional accountability.

40. Lack of Comprehensive Progress Reporting: RAFU/UNRA prepared progress reports on individual project activities, but paid little attention to the production of more comprehensive and consolidated progress reports on implementation of the project. However, with time, UNRA improved on their method of reporting.

2.3 Monitoring and Evaluation (M&E) Design, Implementation, and Utilization 41. M&E Design and Implementation: At project appraisal, the key performance indicators were: (i) reduction in travel time compared to baseline, (ii) reduction in vehicle operating costs on national roads compared to baseline; and (iii) industrial and agricultural product flows. The last one is reflected by growth in traffic. Due to lack of information on the entire national roads network, given that the previous phases of the program did not include data collection on the national roads network, it was not possible to get baseline data for these indicators. Instead, the RDPP3 project provided for full data collection on the entire national roads network. During project implementation, the performance indicators were not modified to take into account the project restructuring and extension.

42. A QAG review carried out on October 8, 2008 acknowledged that in terms of the institutional framework for the project, the transition from RAFU to UNRA was the main policy element in the project, and reasonable measures were put in place to achieve this during RDPP3 project. The QAG noted that the good progress on the institutional setup was in the right direction for achievement of the development objectives. Further, they noted that the pace of project implementation and disbursement had started to pick up as an indication that the remaining project elements would be implemented successfully. The report also pointed out some of the strengths and weaknesses, which, as captured in Section 6 – Lessons Learned, were to be addressed under the project and follow-on projects. The overall QAG assessment of the likelihood to achieve the development objectives was “Moderately Likely.” 2.4 Safeguard and Fiduciary Compliance 43. Procurement: The procurement process remained the primary factor delaying the project implementation, and required putting in place a realistic procurement plan in order to avoid such delays. The organization structure of UNRA placed the functions of procurement at a very low level in the directorate of Finance and Administration. At commissioning, UNRA did not have a qualified Procurement Specialist. After a long dialogue the Directorate of Procurement was created and the procurement functions were split into: (i) works and services and (ii) goods. Other weaknesses were noted in the area of contracts management and specifically on the application of contract price adjustment (CPA) formulae. Because of the absence of a proper procurement function, several complaints were registered, including an allegation of improper contract management against UNRA for some of the roads financed by the project.

44. An independent procurement review (IPR) on the project was conducted in October and November 2010. The consultants reviewed the procurement, contract management, internal control mechanisms, and implementation processes, as well as the timeliness and appropriateness of no-objections issued by the Bank to confirm their consistency with the Legal Agreements and associated documents. Major factors, subject to the control of the implementing agency UNRA, indicated in the IPR summary include:

(i) UNRA has insufficient skills in the evaluation and application of CPA

(ii) UNRA does not have adequate procurement and technical staff leading to long procurement cycles of up to 32 and 42 months between prequalification and contract signature, and inadequate attention to contract management. (iii) UNRA did not handle, in a timely manner, cases of delayed compensation of project-affected persons, leading to delayed site handover, which resulted in delays in completion of the civil works contracts. 45. Because of the above factors, the IPR gave the recommendations: (i) build the capacity of UNRA by establishing a quality assurance system to help reduce the long procurement cycle; (ii) train UNRA staff in the application of the CPA formula; (iii) review the current organization structure and increase the number of staff in the procurement and technical departments; (iv) prepare a customized procurement manual and ensure procurement based on updated designs/bidding documents and invite bids after the design reviews; and (v) enhance contract management and administration. It concluded that the benefits of investing in adequate staffing would, in the long run, outstrip the cost of the extra staff.

46. In order to enhance the skill of UNRA and their consultants, the Bank organized a special training, in Kampala in July 2011, on the application of CPA formulae. With the support of the governance team and financing from the Governance Partnership Facility Window 1 project, the bank engaged an independent consultant to review the procurement processes in UNRA and to recommend ways of combating corruption. The consultant recommended the establishment of an independent and parallel bid evaluation for large contracts and a random sample of smaller contracts to benchmark the results of UNRA’s bid/proposal evaluation reports. These actions are now undertaken by the DFID financed project part of the ongoing follow-up actions of the Transport Sector Development Project (TSDP).

47. Financial Management: The quality of the financial management reports was generally acceptable. Satisfactory audit reports were received on a timely basis, which were reviewed by the Bank and the comments sent to the borrower. The project was first implemented by RAFU, which did not have an internal audit unit within its structure as it was not a statutory body but an organ of the MOWT. An internal audit unit was established as part of the UNRA structure. Consistent with the DFA, the following financial covenants were complied with: (i) carrying out audits of the special account in accordance with appropriate auditing principles by independent auditors; (ii) implementing a time-bound action plan for strengthening financial management system; and (iii) furnishing quarterly project management reports. Given that the project closed on October 31, 2011, the Credit is not able to finance the audit for the period from July 1, 2011 to closure of the accounts on February 29, 2012. The government has pledged to finance the audit and the report will be provided at the end of FY12/13.

48. Environment: At project implementation, the supervising consultants responsible for construction-related mitigation as part of the routine inspection of contractor's work provided information on environmental mitigation measures in the monthly progress reports. A full time environmentalist within RAFU/UNRA continued to monitor the

activities on the road projects in liaison with NEMA. No adverse environmental degradation matters were reported and the performance was rated “Satisfactory.”

49. Social Assessment: During the project implementation, RAFU/UNRA had a sociologist and two land acquisition officers who were instrumental in monitoring the implementation of the RAPs, and the HIV/AIDS mitigation programs. Treatment of the STD cases was also provided by the on-site clinics, with the HIV/AIDS treatment coordinated through the national program. UNRA have provided the RAP Implementation Completion Reports for all the upgraded roads and the reports are satisfactory. However, reporting on the progress of RAPs implementation was a challenge. This challenge was addressed through the training of UNRA staff and their consultants in management of land acquisition and through on-the-spot guidance during supervision missions to enhance their skills. The performance was rated “Moderately Satisfactory.” 2.5 Post-completion Operation/Next Phase 50. Originally it was planned to continue the Roads Development Program with a fourth phase (RDPP4). RDPP4 was intended to finance the rehabilitation of district roads identified by the Ten Year District Road Investment Program (TYDRIP) with a credit amount of US$26 million. However, in the course of the implementation of the APL program, it was decided that the financing of district roads should be mainstreamed in the government’s recurrent and development budgets, and that development programs (DPs) should rather focus on capacity building (including capacity for the management of local roads) and on large investments on the national roads network.

51. The next lending program was chosen to be a SIL. This instrument was chosen rather than continuation with the APL for RDPP4 because the reforms that were promoted under the three phases of the previous APL (RDPP) had largely been achieved, although with some delays. It was therefore agreed that the proposed RDPP4 would be dropped and that IDA would support a new proposed series of projects named the Transport Sector Development Project (TSDP) that would, jointly with other DPs, support government’s implementation of its National Transport Master Plan (NTMP). 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design, and Implementation 52. The project objectives were clear, relevant, and important to improve sector policy and strengthening road management. The program components had a good linkage with the project objectives. The project also contributed to the Bank’s CAS strategic outcomes of improving reliability of access to infrastructure services and poverty reduction through medium-term strategy focused on private-investment-led growth. The project objectives were also in line with the country’s 2000 CAS objectives of facilitating the efficient and reliable provision of transport services, increasing agricultural production, stimulating economic growth, promoting security in the country, and enhancing linkages with neighboring countries.

53. The RDPP3 was the third phase of the APL, follow-on project from the RDP Phases I & II (RDPP1 & RDPP2). Originally it was planned to continue the Roads Development Program with a fourth phase (RDPP4) which was intended to finance the rehabilitation of district roads identified by the Ten Year District Road Investment Program (TYDRIP) with a credit amount of US$26 million. In the course of implementing the APL program, it was decided that the financing of district roads should be “mainstreamed” in the government’s recurrent and development budgets, and that Development Partners should rather focus on capacity building (including capacity for the management of local roads) and on large investments on the national road network.

54. Further, since the RDPP3 was a phased APL program, for continuity of the APL, the PDO relied on RDPP1 and RDPP2 objectives, and implemented them as a rolling program with overlaps in the different phases of the program. The combined output of the APL has substantially contributed to achieving the objective of the RDP as a total of 935 km of roads were upgraded/rehabilitated.

55. In terms of linkage to the PDO, the project components of the RDPP3 project focused on the national roads network. Project areas are rural part of the country with high yield of agricultural productivity. Thus, the anticipated benefit lay with reducing high transport costs that form a large portion of the cost of agricultural produce and therefore make it uncompetitive in the market. However, due to the fact that some of the projects components were dropped, the outcome achievements were not at desired level as anticipated at appraisal. Overall, since the GoU agreed to finance the components that were dropped, there was no requirement to consider the review of the PDO and outcome indicators in line with project restructuring and new developments in the sector.

56. Given the long time period elapsed at initial stages—the time of preparation, and the unprecedented procurement delays on actual implementation—it would have been better to consider a review of the PDO indicators, so as to realistically reflect the changes and new developments. In addition, dropping of some components while keeping the original PDO indicators intact, lead to gross reductions in project benefits. A lack of detailed information makes quantifying the foregone benefits a difficult and complex exercise, rendering measured values nearly impossible. However, it can be noted that delay caused lost benefits that would have been generated from savings on transport costs and travel time. 3.2 Achievement of Project Development Objectives 57. The project’s overriding objective of improving accesses to rural and economically productive areas through upgrading of selected priority road links and further strengthening road sector management was substantially achieved through the following accomplishments: (i) the Kampala-Gayaza-Zirobwe road (44 km) was strengthened/upgraded from gravel to paved (bituminous) standard; (ii) the Soroti- Dokolo-Lira road (123 km) was upgraded from gravel to paved (bituminous) standard; (iii) a detailed design for upgrading of 300 km of district roads reclassified to national (bitumen) standard was prepared; (iv) data collection on 10,000 km of national roads was completed; (v) a feasibility study and detailed design for upgrading of 300 km of national gravel roads to paved (bituminous) standard was completed; (vi) provision was made for

training and technical advisory services to consolidate the institutional reform process, including establishment and commencing operations of the Road Authority, through, inter alia, developing a performance agreement and a business plan, (vii) a financial management system and internal audit function was established, including the restructure of internal office organization and staffing, and development of management information systems; and (viii) provision was made for external audit services. As noted above it was the Busega-Mityana road and bridges on the Atiak-Moyo road that were financed by the government. As a result, the outcomes of the project were achieved with this financing of the Government that supported key pillars of the CAS.

58. The PDO relates the project roads to classified national roads, which are considered to be important instruments for the improvement of the linkage of rural economic activity to the market. The PDO reflects the importance of the project components with regards to their contribution to rural access improvement and increase in agricultural productivity as a result of the expected reductions in transport cost. However, use of crude traffic growth measures as a proxy indicator for agricultural productivity cannot adequately or fully reflect the project zone of influence on agriculture productivity growth and economic activity. Detailed data on the project area freight traffic generation by traffic mode and commodity type were not availed either as baseline or for the project at completion. This limits the assessment capacity on the sub-indicator elements of the project. However, from the appraisal and reappraisal reports, an overall economic assessment is provided on Annex 3 of the report, summarizing the economic parameters and traffic information for the two road projects.

3.3 Efficiency 59. At project appraisal, an economic analysis for investment on each of the project roads was carried out using the HDM. The consolidated EIRR was observed to be above 12 percent. The project also carried out a sensitivity analysis based on economic costs (+20 percent) and average daily traffic (-20 percent). At project completion, the net present value (NPV) and the EIRR were re-evaluated for the two roads that were upgraded—the Soroti-Lira and Kampala-Gayaza-Zirobwe roads. The NPV and EIRR for the two roads at completion are much higher than at appraisal. Details of the economic and financial analysis, economic indicators and assessment on the reappraisal report are shown in Annex 3 with input parameters in Tables 3.1, 3.2 and traffic count for the two roads in Tables 3.3 and 3.4.

60. Results of traffic studies on Soroti Lira road revealed an increase in traffic from appraisal forecast. The number of heavy goods vehicles more than doubled in volume, the number of cars increased by 200 percent while passenger buses did not grow as forecasted. The economic indicators for the completed road (Soroti-Dokolo) showed positive NPV of US$30.6 million, which is about 50 percent more than that obtained at appraisal, and an EIRR of 15.6 percent despite the increase in cost from US$47.0 million at appraisal to US$115.0 million at completion (more than double). It must be noted that the scope of work of the completed project was substantially different from the scope at appraisal. Specifically for the Kampala-Gayaza-Zirobwe road, additions to the original scope of work included dualization of the carriageway, relocations of utilities, and

provision of pedestrian walkway. These additions were, however, necessary since the completion of the northern by-pass, which was designed after completion of the design of this road, attracted a high volume of traffic, calling for improvement of the capacity and road safety features on the first 1.3 km of the road that now feeds traffic from the central business district to the by-pass. Results of the current study show that some of the predictions made at appraisal were achieved soon after completion of the project. 3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory

61. The development objective of the project was to improve access to rural and economically productive areas and to progressively continue to build up road sector planning, design, and program management capability including road safety management. However, the road safety aspect was not properly addressed as part of the indicators nor captured as one component of the project. The outcome indicators relate to reduction in average travel time, vehicle operating costs, and traffic growth as a proxy measure to agricultural productivity and increase in economic activity on the project roads. As discussed in paragraph 54, the corresponding baseline values for each indicator were not properly developed during preparation. In addition, the inadequacy and absence of detailed data and information on agricultural productivity and economic activity makes the justification on the overall rating difficult. 62. However, there are tangible results attained from the other indicators defined during the implementation process. The project achieved the targets of upgrading and rehabilitating a total of 152 km of roads, and rehabilitating 15 km of an existing paved road. In addition, the GoU financed the rehabilitation of another 57 km of road that was dropped when the project was restructured. The change in average roughness on these roads brings about benefits to all groups of road users resulting from reduction in vehicle operating costs and travel time. 63. Considering the time lose on actual implementation, and zero disbursement levels over the project period from 09/09/2004 (1st ISR date) to 06/28/2007 (6th ISR date), the ISR “Satisfactory” ratings were too generous. The project in 2007/08 was one of the flagged problem projects and the ISR rating was downgraded to “Moderately Unsatisfactory.” From 2008 onward, with the advent of UNRA and proactive measures on project management, the project started to progress very well and started to pick up “Satisfactory” ratings and continued thusly up to end of the project. Based on an assessment of the overall performance, considering the above mentioned factors and weaknesses as an impetus for rating, the ICR assessed the overall performance outcome rating to be “Moderately Satisfactory,” differing from the ISR “Satisfactory” inclined ratings as indicated in Section G of the Data sheet. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development

(i) Poverty Impact: The project influence area in which the roads were improved are known for agriculture production, dairy and poultry farming, fish production, and tourism

for the provision of easy access to national parks. The development of all these activities enhanced the local economy and reduced rural poverty through creating job opportunities, increasing agricultural production and promoting tourism.

(ii) Gender Impacts: The policy and strategy of the roads sector provided overall equal opportunities of employment for male and female workers on road rehabilitation works.

(iii) Social Development: The project provided improved access to schools, health centers, village markets, social services, and facilitated business development activities. Since the roads were improved on existing alignments, the project did not have any negative impact on human settlements.

(b) Institutional Change/Strengthening

64. During the implementation phase the following institutional changes were made:

(i) RAFU, which was a nucleus for the establishment of UNRA, was phased out and the UNRA,(created by an act of Parliament in May 2006) took over on its effective operational date of July 1, 2008. RAFU was instrumental under the MOWT for effective development of the RDP from concept level to implementation of the RDPP1 and RDPP2 phases. It also commenced the implementation of the RDPP3 up to the time UNRA became effective. The experience gained from the works of RAFU was the basis for the newly formed institution to start its business from firm ground as an independent and autonomous body. This is demonstrated by the fact that RAFU/UNRA’s capacity to deliver increased from US$120 million per annum at appraisal to about US$400 million per annum at closure of the project. (ii) In April 2001, with financing provided under the RSISTAP, an environmental management/liaison unit was established within the MOWT. Its objective was to provide the needed capacity to coordinate environmental and social policies under the RSDP and to facilitate coordination between all affected stakeholders —RAFU/UNRA, MOWT, NEMA, the Uganda Wildlife Authority (UWA), the engineer, the contractor, local administrations, and members of the local communities—on the implementation and monitoring of the mitigation measures. (iii) Parliament passed the UNRA Bill in May 2006. UNRA Board was appointed in January 2007. UNRA was formally established on November 1, 2007 and it became fully operational on July 1, 2008 after a lengthy process to appoint its Chief Executive Officer and senior managers. (iv) A Road Fund Act was passed by Parliament on June 19, 2008, gazetted on October 15, 2008 and the Road Fund (RF) became operational on July 1, 2009 after appointment of the Board members, its Chief Executive Officer and senior managers. (c) Other Unintended Outcomes and Impacts (positive or negative) N/A

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

65. Every year, a joint transport sector review meeting was held in Kampala to review the performance of the sector. The assessment reports included a paragraph or two on the project and were provided to both development partners and the political leadership of the country. 4. Assessment of Risk to Development Outcome

Rating: Moderate

66. Given that UNRA and the Road Fund are now fully operational; the risks to the development outcomes are considered moderate. UNRA has taken over the maintenance function on national roads from MOWT and the well-tested management systems of RAFU. Even though, as has been experienced in many other countries, policy reversals are possible, UNRA and the RF have continued to build their capacities. However, UNRA has not been able to retain high quality staff as many of them have joined large organizations (Regional Economic Communities, African Development Bank (AfDB), European Union (EU), and others). UNRA has not yet adopted new ways of managing road networks based on the principles of life cycle costs, for example output based approaches. The RF has yet to implement the principles of the second generation Road Fund. However, this has been hampered by the fact that Uganda Revenue Authority Act does not provide for direct transfer of funds to the Road Fund. Instead, the funds are channeled through the consolidated fund of the Ministry of Finance, Planning, and Economic Development (MoFPED) and passed to the Road Fund through the budget cycle. The end result is that the funds received are insufficient to meet the maintenance requirements of approximately 60,000 km of national, district and urban roads and are unable to arrest the buildup of backlog maintenance. In order to address the situation, it has been agreed with the rest of the Development Partners to handle backlog maintenance through the use of Output and Performance Based Road Contracting (OPRC) approach. In this regard, there is ongoing dialogue with government to ensure sustainable funding for road maintenance. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

67. The project design was relevant, appropriate, and responsive to the client’s needs as it supported the government’s 10-year (1997-2006) RSDP and the updated RSDP (2001- 2012). The key triggers for preparation of the third phase of the Road Development program were: (i) RAFU strategy for recruitment of technical staff implemented; (ii) PIP prepared; (iii) detailed design and bidding documents accepted; and (iv) pre-qualification of contractors commenced. During project preparation, information sharing and consultation took place with the donor community; the Bank

provided experience gained from application of principles of the Road Maintenance Initiative (RMI) in Africa. The GoU and donor community acknowledged the Bank's leadership role during preparation of the RSDP.

68. The overall risk at project appraisal was assessed to be Moderate as mitigation measures were adequate at entry. However, it is noted that a comprehensive risk mitigation plan to be followed during project implementation was not designed and discussed with the borrower at entry. The capacity built under the RSISTAP, apart from contributing a lot for implementation of the previous projects (RDPP1 and RDPP2), laid the base foundation to help reduce the quality-at-entry risk for project implementation. The team proactively addressed the project risks and problems faced and came up with mitigation measures agreed with the GoU.

(b) Quality of Supervision

Rating: Moderately Satisfactory

69. A Project Implementation Plan (PIP) was prepared, which provided a good basis for the project supervision. The skills mix of the Bank supervision team was well balanced. The team maintained a strategic vision not only on institutional development, but provided a good advice on other cross cutting issues such as road safety, HIV/AIDS awareness and mitigation measures and governance. There was significant involvement of the Bank’s team to resolve day-to-day problems. The quality of the financial management reviews was found to be satisfactory and consistent with the Bank guidelines. The supervision aide-memoires for the implementation phase provided highlights on the key issues thus providing prompt information to the client and Bank management.

70. The contracts were substantially delayed due to procurement delays. As such, the project implementation was rated Unsatisfactory and Moderately Unsatisfactory in the ISR No 8, dated December 12, 2007 and ISR No. 9, dated June 24, 2008, respectively. From a strategic standpoint, the Bank was responsive in recognizing the problems that arose and in providing space and time for their resolution. The actions taken by the Bank to resolve implementation bottlenecks were adequate. With enhanced supervision and independent technical audits carried out by consultants outsourced under the project, implementation and subsequent ratings of the project improved. Under the RDPP3, in 2005, the Bank provided training for a critical mass of RAFU staff in the application of road planning tools, specifically the Roads Economic Decision (RED) model and the HDM4, to enable the staff to analyze data and use it for planning. Software licenses were also provided for the HDM4.

Rating: Moderately Satisfactory

71. Taking into account the role that was played by the Bank at entry and at supervision, the overall rating for Bank’s performance is assessed as “Moderately Satisfactory.” 5.2 Borrower Performance (a) Government Performance

Rating: Moderately Satisfactory

72. The government showed commitment in implementing institutional reforms; UNRA became fully operational in July 2008 though it took ten years. As recommended by the sector financing and management study and after a consistent dialogue with the Bank, the government finally decided to set up a Road Fund to enhance financial sustainability of road maintenance. The Road Fund Bill was passed by the Cabinet on May 17, 2007 and was approved by the Parliament on June 19, 2008 and the RF became operational on July 1, 2009. When high bids were received for the first three civil works contracts, the total sum of the contracts was 43 percent over and above the available funds for this category of expenditure on the credit/grant. The GoU came in promptly to meet the shortfall. At closure, there were still outstanding payments resulting from variations in the scope of work that were needed to address changes not envisaged at the design stage. Based on the commitments, and because the ultimate goal of the second generation Road Fund have not been met, the government’s performance is rated as “Moderately Satisfactory.”

(b) Implementing Agency or Agencies Performance

Rating: Moderately Satisfactory

73. RAFU was the executing agency for Phase I and II of the program. While not always showing a stellar performance, its managerial and technical skills were adequate. RAFU was also the agency responsible for implementing the first half of Phase III of the program, but starting July 1, 2008, the newly created autonomous Road Authority (UNRA) is the responsible entity. With the transfer of responsibilities from RAFU to UNRA, some of the accountability mechanisms and fiduciary controls may have been temporarily impaired.

74. Due to pre-qualification issues, the project has suffered a delay of about two years. On the institutional side, there was a weakness in UNRA’s procurement capacity. However, at closure of the project, UNRA had made most of the required improvements. It has also responded well to calls for training to improve the skills of its staff. Based on the above, UNRA’s performance is rated as Moderately Satisfactory.

Rating: Moderately Satisfactory

75. The government’s overall performance is rated as Moderately Satisfactory.

6. Lessons Learned 76. APL Instrument: The APL instrument cut down on the demand for rigorous project preparations for every SIL. It also cut down on the approval processes from the government’s side as evidenced by the fact that each phase was able to start and run for some time in parallel with the previous phase. 77. Policy and Institutional Reforms: Institutional reform conducted parallel to project implementation causes delays in program implementation. An important lesson learned is that establishment of new institutions require longer time than anticipated for transition, which may impact on project progress, and needs policy consultations and commitment as part of the preparatory work. 78. Human Resource Capacity Development: Restructuring an agency at the same time as implementing a project is challenging and may cause project implementation delays. The development of human capital to an acceptable and stable stage is a continuous process. It is therefore essential to continue providing support to build UNRA’s capacity to enable them to establish sustainable management systems to help reduce the turn- around time for implementing of projects. It is also essential to keep in mind the dynamics of human resource development, including of recruiting and training staff in various disciplines. For sustainability on the provision of policy and institutional reform and technical assistance, the process needs continuation and pick up by the follow-on TSDP. 79. Counterpart Funding: Due to delays caused by the long procurement process that resulted in cost overruns, the project was restructured and DFA amended to drop components that could not be financed. However, the GoU committed to finance the cost overruns and works that, as a consequence of these overruns, could not be financed by RDPP3 with its increased road sector allocation. 80. Sustainability of the Road Network: With the establishment of the Road Fund, it was anticipated that the important aspect of sustainable financing of maintenance would be addressed. However, Government has yet to implement the RF on the principles of the second generation Road Fund, without which the sustainability of road management will be doubtful. 81. Escalation of Costs: Cost of the civil works component both at appraisal and feasibility/detailed design varied substantially due to the sudden sharp rise of the cost of fuel, construction materials and other inputs at the time of bidding. The eventual bid prices could therefore not enable the project to be implemented as appraised and consequently some components had to be dropped. In future, design reviews and updates of the cost estimates will be necessary just before calling for bids. 82. Land Acquisition and Right-of-way: Payment of compensation for properties has continued to cause project implementation problems thus should be resolved before the works contracts commence. All efforts should be made to ensure that contractors always receive encumbrance free sites.

83. Procurement Delays: Cost of the civil works component at the time of bidding varied substantially from that at the feasibility and detailed design stage due to delays in the procurement process of about four years. The eventual bid prices could therefore not enable the project to be implemented as appraised and consequently some components had to be dropped. In future, design reviews and updates of the cost estimates will be necessary just before calling for bids. It would also be advisable to avoid a long prequalification period. It is also worthwhile to explore the possibility of commencing procurement prior to credit effectiveness in order to provide for procurement lead-time. 84. Monitoring and Evaluation Indicators of the Projects: At appraisal, the baseline data for the outcome indicators were not provided. These were provided in the ISR4 in August 2005. As a proxy for increased industrial and agricultural activity, the traffic increase on the project roads was used to reflect the agricultural productivity benefits to the rural population. The lesson learned is that baseline data should be provided at the appraisal stage for appropriate reading of the PDO indicators. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies: None

(b) Co financiers: No co-financier

Annex 1. Project Costs and Financing Financial Status 1. The financial status presented in the Table below shows that there was a final total commitment of US$239.34 million against the appraisal estimate amount of US$133 million. As this by far exceeded the available funds on the credit, the GoU agreed to finance the shortfall. The GoU also financed one road that was dropped from the Credit along with bridges on the Atiak-Moyo road that were re-designed for upgrading. The bridges are commensurate with the Class II bitumen standard road. The Table 1.1 shows costs including dropped projects financed by the GoU.

Table 1.1 Project Cost by Component (in USD Million equivalent) including dropped projects financed by GoU

Appraisal Actual/Latest Percentage of Components Estimate Estimate Appraisal (US$ millions) (US$ millions) Kampala-Gayaza-Zirobwe-Wobulenzi, Civil Works 31.18 57.72 185% Atiak-Moyo, Civil Works 10.88 8.92 82% Soroti-Dokolo-Lira, Civil Works 47.00 103.51 220% Busega-Mityana, Civil Works 24.30 53.94 222% Road Authority Headquarters, Civil Works 7.50 0 0% Supervision consultancy services for roads (Kampala, Atiak, Soroti and Busega) 5.44 9.52 175% Detailed Design of 300 km of District Roads from gravel to National paved (bitumen) standards. 1.60 1.02 64% Feasibility & Design for upgrading 600 km of national roads to paved (bitumen) standards. 2.00 2.51 126% Consultancy services, institutional support to RAFU/Road Authority 3.10 2.20 71% TOTAL 133.00 239.34 180%

Table 1.2 Financing inclusive of dropped projects financed by GoU

Appraisal Actual/Latest Type of Co- Percentage of Source of Funds Estimate Estimate financing Appraisal (US$ millions) (US$ millions) Borrower 25.40 122.94 484% IDA 107.60 116.40 108% Total 133.00 239.34 180%

Annex 2. Outputs by Component

1. The credit had six components: (i) upgrading and strengthening of three high priority national roads; (ii) designing the upgrade of about 300 km of district roads as national roads, which therefore are required to meet the National Road Standard; (iii) studying, through the use of consultancies, the feasibility of upgrading to bitumen standard about 600 km of priority national roads; (iv) rehabilitation/re-graveling of the Atiak-Moyo road (91 km); (v) constructing a proposed Road Authority headquarters building; and (vi) developing institutional support for the establishment of the National Road Authority, and (vii) provisioning of external auditing services.

2. The outcome indicator related to the civil works for upgrading, rehabilitation and reconstruction component is “reduction in average travel time on national roads compared to baseline” and “reduction in vehicle operating costs on national roads compared to baseline.” At closure of the RDPP3, the three APLs together upgraded and rehabilitated a total of 877 kilometers of roads, close to the original target of 886 kilometers appraised for upgrading rehabilitation and re-graveling under the program. This has resulted in reduction of travel time and vehicle operating costs from Kampala-Gayaza and Soroti-Lira to far off towns, as well as cross-border traffic as high as 40 percent. With completion of the projects, travel time and vehicle operating costs from the Kenya border for traffic originating from Mombasa to northeastern DRC and southern Sudan were reduced by equivalent amounts.

3. Further, under institutional support to the sector, creation of a roads authority, transfer of maintenance functions from the Ministry of Works to UNRA and the creation of a road fund are major milestones. With the above background, it can be concluded that the outcome indicator related to the civil works for upgrading and rehabilitation/reconstruction under the program was achieved. However, it has to be noted that sub-components dropped from the original plan during the restructuring of the program would have brought additional output gains. The three civil works dropped are: (i) upgrading Zirobwe-Wobulenzi road (23 km); (ii) rehabilitation of the paved Busega-Mityana road (57 km) and re-graveling of Atiak-Moyo road (91 km), and the building contract for the proposed UNRA and MOWT offices, all of which the government embarked on financing.

4. RDPP3 was originally planned to finance the paving and reconstruction of 249 kilometers of national roads and to re-gravel 91 kilometers of (national) gravel roads. However, due to higher than anticipated bids, the paving and reconstruction of 57 kilometers of roads out of the 82 kilometers appraised could not be financed by the project. GoU committed itself to avail financing for the balance of dropped projects from its own budget. The project was also supposed to finance the re-graveling of a 91 km road that was planned to be financed by the IDA-supported Northern Uganda Reconstruction Project (1994-1996). but was abandoned due to insurgency in the area. While the road was appraised for re- graveling, the government decided that with the increased traffic, it would be best to upgrade the design to enable upgrading to a paved (bituminous) standard road. In that light, the US$8.7 million allocated for the road was about 10 percent of the engineer’s estimate for upgrading the road. Hence, the government’s proposal was to finance it at a later stage through other means.

Table 2.1: Comparison of Performance Indicators at Project Appraisal and Project Completion

Achieved Outputs Planned Outputs at at Project Percent Hierarchy of Objectives Appraisal and/or Remarks Completion Achieved as amended (October 2011) Project Development Objectives To improve access to rural areas and economically productive areas, and to continue to build up sustainable road sector planning, design and program management capabilities, including road safety. i) Upgrading of three priority 154 km of National 152 km of National Upgrading of 23 km of 92% national roads, i.e. Kampala- Roads upgraded Roads upgraded to Zirobwe-Wobulenzi were Gayaza-Zirobwe-Wobulenzi; from gravel to bitumen roads; cancelled due to insufficient Soroti-Dokolo-Lira; and bitumen standard; funds; Busega-Mityana; 72 km of bitumen 15 km of bitumen First 1.3 km of Kampala- 21% standard roads standard roads Gayaza built to dual reconstructed. reconstructed. carriageway standard. 57 km of Busega-Mityana was fully financed by the GoU i) Detailed design for upgrading Detailed designs for Designs completed Satisfactorily completed. 104% about 300 km of District Roads 300 km completed. for 311.5 km reclassified to the National Road Standard; ii) Consultancies for feasibility Feasibility studies Detailed designs The Government conducted a 34% studies of upgrading about 600 for 600 km and preparation of further prioritization based on km of priority national roads; completed. bidding documents traffic levels and only Gulu- completed for Atiak-Nimule and Vura- upgrading 202 km Arua-Koboko-Oraba were authorized for detailed design preparation of biddings documents. iii) Rehabilitation/re-graveling of 91 km of gravel Detailed designs Following design review, the 100% the Atiak-Moyo road; roads improved. and preparation of need for widening of bridges bidding documents and upgrading to Class II for upgrading to bitumen standards was bitumen standards. established and scope of services was extended accordingly. Detailed designs were completed and bidding documents were prepared. iv) Construction of the proposed Road Authority HQ Designs and Designs Satisfactorily 100% Road Authority headquarters design completed preparation of completed. building; end 2005; occupied bidding documents and functioning by completed in 2008. Construction of HQ building 0% end of 2008. cancelled due to shortage of funding. v) Institutional support for the Road authority Road authority staff Satisfactorily completed. 100% establishment of the Road staffing is recruited and Authority, including provision completed and authority became of external auditing services. operational and operational on July developmental 1, 2008. budget provided for by end 2005.

Table 2.2: Comparison of Activities Proposed at Appraisal and Outputs Achieved at Project Completion

Com- Name of Activities Agreed at Output Achieved at Project Percent Remarks ponent Component Appraisal/through Completion Amendments A. Civil Works i) Soroti-Dokolo Road i) Soroti-Dokolo Road (62.6 for Upgrading, (62.6 km) km) 100% Rehabilitation and ii) Dokolo-Lira Road (60.4 ii) Dokolo-Lira Road (60.4 Reconstruction km) km) 100%

i) Reconstruction of i) Reconstruction of Kampala-Gayaza Road Kampala-Gayaza Road (15 km) (15 km) 100%

ii) Upgrading of Gayaza- ii) Upgrading of Gayaza- Kiwenda Road (11 km) Kiwenda Road (11 km) 100%

iii) Upgrading of Kiwenda- iii) Upgrading of Kiwenda- Zirobwe Road (19 km) Zirobwe Road (19 km) 100%

iv) Upgrading of Zirobwe- iv) Not achieved Upgrading of road section cancelled Wobulenzi Road (23 due to insufficient funds in the DFA. km) 0%

v) Rehabilitation and Re- v) Achieved with GoU graveling of Atiak-Moyo financing Road (91 km) 100%

vi) Reconstruction and vi) Achieved with GoU Upgrading of Busega- financing Mityana Road (57 km) 100%

Construction of headquarters Not achieved Project cancelled due to increased B Civil Works building for MOWT and the costs of road components and for Road Authority 0% insufficient funds in the DFA. Construction of Buildings i) Soroti-Dokolo Road i) Soroti-Dokolo Road (62.6 Issuance of final certificate and final C Road (62.6 km): Design km): Design Review & accounts outstanding. Construction Review & Supervision Supervision of Services of construction. construction. 97%

ii) Dokolo-Lira Road (60.4 ii) Dokolo-Lira Road (60.4 Issuance of final certificate and final km): Design Review & km): Design Review & accounts outstanding. Supervision of Supervision of 97% construction. construction.

Com- Name of Activities Agreed at Output Achieved at Project Percent Remarks ponent Component Appraisal/through Completion Amendments iii) Kampala-Gayaza- iii) Kampala-Gayaza- Substantial Completion was achieved Kiwenda-Zirobwe Road Kiwenda-Zirobwe Road on July, 2011. Services under Defects (45 km) (45 km) Liability Period (DLP) after closure 90% of the Credit will be financed by the GoU.

iv) Zirobwe-Wobulenzi Road (45 km) Not achieved. Road project cancelled due to 0% insufficient funds in the DFA.

v) Rehabilitation and Re- DED services awarded. Following design review, design to graveling of Atiak-Moyo Services were later amended upgrading to Class II Standards was Road (91 km) through Addendum 1 to cover adopted, including design for upgrading the road 100% reconstruction/widening of bridges to from gravel to paved double carriageway. Detailed design (bituminous) standard. was completed and bidding documents prepared.

vi) Reconstruction and Not achieved Upgrading of road section was Upgrading of Busega- cancelled due to insufficient funds in Mityana Road (57 km) 0% the DFA.

Roads Detailed engineering design i) Lot A Roads: Detailed design, EIA and Bidding D Feasibility and for upgrading of 300 km of  Katine-Ochero (69.2 km) documents prepared. Design District Roads from gravel  Nebbi-Golli (14.4 km) 100% to paved standards.  Ochoko-Inde (32.8 km)

ii) Lot B Roads: Detailed design, EIA and Bidding  Luwero-Wakyato (34.2 documents prepared. km)  Luwero-Zirobwe (36.7 km) 100%  Mityana-Kanoni (37.2 km)  Kyegegwa-Kazo (87.0 km) (replacing Muzizi- Rwemiyaga) Feasibility studies for Because of low traffic on the four upgrading 600 km of i) Feasibility study and roads, the original scope was reduced national roads to paved detailed design of Gulu- to two roads: namely; Arua–Koboko– standards, and detailed Atiak-Bibia/Nimule (104 Oraba Road (78 km) and Gulu-Atiak- design of selected few km). Bibia Road (104 km). (Kotido–Moroto–Muyembe Road (290 km); Mpigi– Maddu–Sembabule Road 100% Design of Gulu-Atiak-Bibia-Nimule (135 km); road was completed and bidding Kyenjojo–Hoima–Masindi– documents prepared for two contract Kigumba Road (238 km); packages: Gulu-Atiak (64 km) and Arua–Koboko–Oraba Road Atiak-Nimule (40 km). (78 km); Gulu-Atiak-Bibia Road (104 km).

Com- Name of Activities Agreed at Output Achieved at Project Percent Remarks ponent Component Appraisal/through Completion Amendments Design of Vura-Arua-Koboko-Oraba ii) Feasibility study and road was completed and bidding detailed of Vura-Arua- 100% documents prepared for one contract Koboko-Oraba (98 km). package: Gulu-Atiak (64 km) and Atiak-Nimule (40 km). E Institutional Provision of training and TA i) TA services engaged to TA services acquired during Support and services, including support establishment of 100% transition. Establishment establishment of the Road Road Authority. of the Road Authority ii) Training of Road Training program of the Road Authority 100% Authority staff. Authority supported. iii) Road Authority Processes for establishment of the 100% Established. Road Authority supported. Institutional Support for Institutional support provided. Parts A thru E, including 100% external audit services. External Audits carried out. 100%

Table 2.3: Comparison of Cost & Duration of Civil Works Contract at Project Start and Completion

No Project Length Original Revised Cost Start Date Original Actual Delay Remark . (KM) Contract Contract Increase completion completion Price US$ Price With % date date Millions Price Adjustment US$ Millions 1 Soroti- 62.6 38.68 53.58 38.52% 1-Nov-07 30-Apr-10 18-Mar-10 0 Contract was Dokolo completed ahead of schedule.

2 Dokolo- 60.4 44.7 62.25 38.26% 1-Jun-08 30-Nov-10 24-Sept-10 0 Contract was Lira completed ahead of schedule. 3 Kampala- 45 39.2 54.59 39.26% 30-Mar-08 30-Nov-09 21-Jul-11 19.6 EOT was Gayaza- months granted for Zirobwe additional works, including dualing of km 0 ~ km 1.3. 4 Busega- 57 47.19 53.94 14.30% 24-Jan,-09 8-Jan-11 31-Jan,-12 Financed by the Mityana GoU road 5 Atiak- 7 8.92 8.92 0.00% 31-Dec-10 30 Dec-11 20-Jan-12 Financed by the Moyo Bridges GoU road and 2 bridges Ferry and ferry landings landings TOTAL 178.69 230.74 30.55%

Table 2.4: Comparison of Cost of Consultancy Services Contract at Project Start and Completion

No. Project Length Original Revised Percent (km) Contract Contract of Cost Price US$ Price US$ Increase Million Million 1 Supervision of Soroti-Dokolo 62.5 1.2 1.2 0%

2 Supervision of Dokolo-Lira 45.55 1.5 1.5 0%

3 Supervision of Kampala- 68 1.1 2.93 166.36% Gayaza-Zirobwe 4 Supervision of Busega-Mityana 57 1.87 3.32 178% road Supervision of bridges on 7 No 0.46 0.46 0 Atiak-Moyo road 4 Design for Gulu-Atiak-Nimule 104 0.79 0.79 0%

5 Design for Vurra-Arua-Oraba 92 0.90 0.90 0%

6 Feasibility/Design of Atiak- 104 0.82 0.82 0% Moyo road 7 Design for district roads – Lot A 116 0.45 0.45 0%

8 Design for district roads – Lot B 203 0.57 0.57 0%

9 National Roads Data Collection 10,000 2.0 2.37 18.50% Study 10 Capacity Building LS0 1.0 1.0 0%

TOTAL 12.66 16.31 28.83%

Annex 3. Economic and Financial Analysis

Kampala-Gayaza-Zirobwe Road

1. The Economic reappraisal report was prepared to update the appraisal report that was conducted long before the commencement of civil work contracts. The reappraisal provided updates on results, and verified and validated the previous economic appraisal of the Kampala-Gayaza-Zirobwe Road Upgrading Project at completion. There was a significant project cost escalation that could have changed the indicators of the study. It is noted that, mainly due to additional scope of work, the overall project cost at completion increased significantly to the projected final cost of UGX 96.05 billion (US$40.261 million at an exchange rate of UGX 2,385.79 as at 29 April, 2011), including a Contract Price Adjustment (CPA) and additional improvement works. The Engineer’s cost estimate at appraisal was UGX 38.46 billion while the tender price was UGX 67.80 billion.

2. As part of the assessment, the consultant carried out classified traffic counts and origin and destination surveys at designated locations. Three alternative assumptions were considered for the economic and sensitivity analysis of the completed road. The alternatives scenarios considered were:

 Alternative 1: to consider only normal traffic and no maintenance after improvement.  Alternative 2: to include generated traffic with no maintenance after completion.  Alternative 3: to include both generated traffic and maintenance after improvement.

3. A summary of the results obtained in the appraisal and reappraisal reports are shown in the Table 3.1 for the economic indicators based on actual work completed.

Table 3.1: Summary of Results of the Appraisal and Reappraisal Reports Reappraisal results by Alternative Remark Alternative 1 Alternative 2 Alternative 3 Appraisal EIRR % 27.5 55.1 57.2 55.4 Alternative 3 higher at reappraisal NPV US Millions 18.09 26.47 26.34 30.13 Alternative 3 higher at reappraisal B/C 1.58 3.33 3.47 3.57 Alternative 3 higher at reappraisal Cost/km 496,215 744,208 744,208 744,208 Unit Cost at reappraisal increasing by 50% from reappraisal

4. Overall, the scenario option of Alternative 3 recorded better results for the economic indicators. With regards to traffic, the base year traffic ranged from 200 to 600 vehicles a day with higher traffic volumes found towards the Kampala end of the road. At completion the traffic on all sections ranged from 584 to 16,176 vehicles per day. The highest traffic count was recorded for the Kampala-Mpererwe section, and overall measured annual daily traffic (ADT) at reappraisal far exceeded the projected traffic at appraisal. The average traffic growth rate estimate is 8.16 percent for the reappraisal and the projected traffic growth rate was 5.5 percent at appraisal. The long project delays

between project appraisal and project implementation can invalidate the estimates and may have an effect on the results of the project benefit.

5. The NPV for the completed project was higher than that obtained when the road was appraised though costs have increased by about 50 percent from original levels. Hence, the positive results of the reappraised road can be attributed to increases in benefits due to increased traffic on the completed road. Baseline for economic analysis and input parameters for economic analysis and traffic volume are shown in Tables 3.3. Results of the traffic analysis revealed that there is an overall increase in traffic compared to appraisal forecasts. For some categories of vehicles such as heavy trucks, vehicle traffic, which was not expected to increase, more than doubled in volume. On the contrary, some passenger vehicles, for which traffic was expected to grow, did not perform well; specifically small bus traffic grew negatively while car traffic increased by over 200 percent.

6. The economic indicators for the completed road recorded positive NPV of US$30.13 million, which is 65 percent more than that obtained at appraisal. An EIRR of 55.4 percent was recorded despite the fact that there was an over 100 percent increase in costs; against EIRR appraisal values of 27 percent for Alternative 3. However, it must be noted that the scope of work of the completed project was substantially different from the scope work at appraisal. Among others, factors resulting from dualizations of the carriageway, relocations of utilities, and provision of pedestrian walkways are some of the additions to the original scope of work. In general, results of the current study show that some of the predictions made at appraisal were achieved soon after completion of the project.

7. With regards to costs, the Kampala Gayaza Zirobwe Wobulenzi civil works cost at appraisal was estimated at US$31.38 million, which was only US$458,529 per km. This is for the appraised project segment including the dropped Zirobwe-Woblonzi (23km) segment of the road. At completion of the credit, after dropping the Zirobwe-Woblonzi road segment, for the remaining 53 km of the Kampala Gayaza Zirobwe the actual cost was US$54.61 million. The corresponding unit cost sharply increased to US$1,030,377 from US$458,529 per km. The increment from the appraisal cost is by about 75 percent and by-unit cost is 125 percent. Assuming a delay of five years, and other factors being constant, the unit cost increment per year on average was 25 percent. This reduced the high level of expected benefit that was expected to be gained by road users over the time period.

8. The unit cost per KM increment varied from the project cost increment as the project road length reduced from 68 km to 53 km at completion (see Table 3.2). It can be argued that the anticipated benefits are partial due to segment dropping from the original appraised project. The comparative analysis on increments of the Kampala Gayaza and the Soroti Lira indicating the estimates at appraisal are devalued due to long delays over the project time period. At appraisal, an incremental project cost provision of US$15.82 million was given, for an increment of 55 km over Soroti Lira compared to Kampala Gayaza. The actual comparative increment at completion ended up at US$60.59 million.

Table 3.2: Comparison of Unit Cost per Km Against Project Cost at Appraisal and Completion Percentage increment Project Cost US$ Unit cost (US$) completion cost Remark million at per km at Component Distance from appraisal by Appraisal Completion Appraisal Completion Project Unit cost cost Kampala- Zirobwe Gayaza- Woblenzi 68 31.18 54.61 458,529 1,030,377 75% 125% Zirobwe- (23) km Wobulenzi dropped Soroti- Dokolo-Lira, 123 47 115.2 382,114 936,585 145% 145% Civil Works

Increments of Soroti Lira to 55 15.82 60.59 287,636 1,101,636 283% 283% Kampala Gayaza

9. It should be noted that traffic counts were not conducted just before the commencement of construction and soon after completion of the project. In addition, the long project delays between project appraisal and project implementation have an effect on project benefit. In general, it is noted that planning, monitoring, and evaluation of projects during the appraisal stage, and re-evaluating projects in situations where there is a long delay, did not adequately take in to account the long term effect resulting from delays. It is important to read the results in light of the actual time gap between appraisal and commencement of construction to ascertain the validity of results obtained at appraisal. For a realistic comparative assessment, the traffic counts should also be conducted just before the commencement of construction and soon after completion of a project life cycle.

Table 3.3: Input Parameters for Economic Analysis Kampala-Gayaza-Zirobwe Road Length 67.28 km Works Commencement 2007 Project Duration 3 years Completion Cost Financial Cost (US$/km) Economic Cost (US$/km) Total Financial Costs (US$) (Based on Lowest Bidder) Kampala -Nsooba 1,480,923 1,406,877 1,828,940 Nsooba -Mpererwe 1,162,584 1,104,455 3,644,701 Mpererwe -Gayaza 730,448 693,926 6,960,074 Gayaza -Kiwenda 709,135 673,678 7,188,147 Kiwenda -Zirobwe 686,342 652,025 12,388,473 Zirobwe -Wobulenzi 686,342 652,025 14,983,532 Total 46,993,866.74 Annual Cost Stream Year 1 Year 2 Year 3 30% 30% 40% Start Year 2007 Analysis Period 25 yrs Discount Rate 12% Salvage value 10% Base Option: Do Minimum Maintain Gravel Road  Re-graveling when gravel thickness less than equal 50mm  Grading every 365 days  Routine maintenance

Maintain Paved Road  Patching once a year, 100% potholes  Crack sealing once a year, 100% transverse thermal cracks  Routine Maintenance Alternative Option  Upgrading of Gayaza-Zirobwe-Wobulenzi Road to bitumen standard in 2007; and  Strengthening/rehabilitation of Kampala-Gayaza road in 2007; and  Maintain Paved Road from 2011 onwards Traffic growth after 2007 5 % - Light vehicles As forecast in economic evaluation report

Motorized Traffic in 2006 (weighted Motorized Traffic (ADT) Non Motorized Traffic (ADT) average ADT) Kampala -Nsooba 17920 3,947 Nsooba-Mpererwe 11487 1,610 Mpererwe-Gayaza 6163 944 Gayaza-Kiwenda 1723 375 Kiwenda-Zirobwe 591 564 Zirobwe-Wobulenzi 783 1,493 Generated Traffic Assumptions used in the feasibility have been applied as follows:  Generated traffic at 5% of normal traffic;  Diverted traffic of 20 vpd for Kampala-Gayaza-Kiwenda road and 59 vpd for Kiwenda-Wobulenzi road (Not applied);  Sensitivity analysis carried out at 10% and 20% reduction in normal traffic as well as 10% and 20% increase in construction/rehabilitation costs.

10. The traffic composition in percentage terms derived from the March 2007 traffic counts that were used in this analysis are as indicated in the table below:

Table 3.4: Increase in Traffic Volume Kampala-Gayaza-Woublonzi Vehicle Composition (%) Kampala-Gayaza Gayaza-Wobulenzi 1 2 3 4 5 6 Cars Special Hire Taxis 22.54 23.20 15.34 6.97 1.51 1.91 Pickups / Vans / 4WD 15.93 14.18 13.27 10.78 4.15 3.76 Minibuses 31.50 26.96 25.14 9.86 6.24 1.34 Medium Buses / Coasters 0.27 0.29 0.60 0.73 0.15 0.01 Buses 0.01 0.07 0.08 0.11 0.03 0.08 Single Unit Truck (Dynas / Tractors) 6.59 1.95 6.89 3.94 2.47 2.14 Single Unit Truck (Medium) 1.58 1.56 1.81 1.48 1.28 0.18 Single Unit Truck (Fusos / Lorries) 1.99 0.99 1.73 1.37 1.36 0.41 Truck Trailers and Semi Trailers 0.11 0.13 0.37 0.1 0.00 0.03 Motorcycles 19.47 30.67 34.8 64.67 82.83 90.12

Soroti-Dokolo-Lira Road

11. The Economic reappraisal report updated the appraisal report conducted by the consultant in 2002, which was conducted long before the commencement of civil works. The reappraisal study provided updates on indicators, and verified and validated the economic appraisal of results the Soroti-Dokolo-Lira Road Upgrading Project at completion. The overall project cost at completion had increased, mainly due to additional scope of work. The actual cost is UGX 116,466,319,888 as against the projected contract cost of UGX 82,068,227,664, including Contract Price Adjustment (CPA) and additional improvement works.

12. As part of the assessment, the consultant carried out classified traffic counts and origin and destination surveys at designated locations. Three alternative assumptions were considered for the economic analysis of the completed road. The alternatives scenarios considered were:

13. A summary of the results obtained in the appraisal and reappraisal reports are shown in Table 3.5 for the economic indicators based on actual work completed.

Table 3.5: Summary of Results on the Appraisal and Reappraisal Reappraisal results by Alternative Remark Alternative 1 Alternative 2 Alternative 3 Appraisal EIRR % 21.3 7.8 14.70 15.6 Alternative 3 high at reappraisal NPV US Millions 18.09 -23.04 20.11 30.6 Alternative 3 high at reappraisal B/C 1.79 0.38 1.53 1.78 Alternative 3 high at reappraisal Cost/km 381,779 744,208 744,208 744,208 Appraisal Unit Cost doubled by increasing by about 95%

14. Overall, the scenario option of Alternative 3 recorded better results for the economic indicators. With regards to traffic, the base year traffic in 2003 ranged from 219 to 644 for the four sections of the project road, whereas the 2010 traffic count ranges from 584 to 1505. The traffic increment level for the four segments of the Dokolo-Lira road is shown in Table 3.6.

Table 3.6: Summary of Traffic Count Lira-Agwata Agwata- Dokolo Dokolo-Katine Katine –Soroti Year 2003 2010 2003 2010 2003 2010 2003 2010 ADT 623 1505 219 644 245 584 380 991 % of ADT (2010 to 2003) 142% 194% 138% 161% Overall total traffic growth (%) 10.71 16.66 13.21 158 Overall generated traffic growth (%) 5.71 11.66 8.21 9.68

15. Measured ADT at reappraisal exceeded the projected traffic forecast of the appraisal. The average traffic growth for overall annual traffic for the four sections of the road ranged from 11 percent to 16 percent and for the generated and diverted traffic between five percent and 11 percent against a projected growth rate of 5.5 percent at appraisal. Despite the unit cost increases on the project, the NPV values for the completed project remain higher than the results obtained when the designed road was appraised. The positive results achieved on the reappraised road can, therefore, be attributed to increases in benefits due to increased traffic on the completed road.

16. Upon reappraisal, results of traffic analysis revealed an overall growth of traffic above the appraised forecast levels. For some categories of vehicles such as heavy trucks, vehicle traffic, which was not expected to increase, more than doubled in volume. On the contrary, some passenger vehicles, for which traffic was expected to grow, did not perform well; specifically small bus traffic grew negatively while car traffic increased by over 200 percent. The economic indicators for the completed road showed positive NPV of US$30.6 million, which is about 50 percent more than that obtained at appraisal, and an EIRR of 15.6 percent despite the over 100 percent increase in costs. The EIRR at appraisal was about five percent more than of the re-appraisal. The reappraisal showed that some of the predictions made at appraisal were achieved soon after completion of the project.

17. The Soroti Dokolo Lira civil works construction estimated cost was US$47 million; which is only about US$382,000 per km for the whole project segment at appraisal. At project completion the actual construction cost was US$115.2 million and the corresponding unit cost sharply increasing to US$936,585 from US$382,000 per km. The increment in cost, in terms of both project cost and unit costs, from appraisal to completion is 145 percent. This is so significant that on taking a delay of five years, and other factors being constant, the unit cost increment per year was 29 percent. This indicates that the huge level of benefit missed which could otherwise was supposed to be gained over the time period.

18. The comparative analysis on increments of the Kampala Gayaza and the Soroti Lira indicates that the estimates at appraisal are devalued due to delays over the time period (see Table 3.2). At appraisal, an incremental project cost provision of US$15.82 million provided on the estimates for the increment of 55 km of Soroti Lira from Kampala Gayaza. Whereas the actual comparative increment at completion ended up to be US$60.59 million. The variance is justified from the point of variances in the competitively offered tender prices for the two projects and dropping of segments of the project. It is noted that the completion cost for the increment at completion is four fold higher than the project cost estimates at appraisal.

19. It should be noted that traffic counts were not conducted just before the commencement of construction and soon after completion of the project. In addition, the long project delays between project appraisal and project implementation have an effect on project benefit. In general, it is noted that planning, monitoring, and evaluation of projects during the appraisal stage, and re-evaluating projects in situations where there is a long delay, did not adequately take in to account the long-term effect resulting from delays. It is important to read the results in light of the actual time gap between appraisal and commencement of construction to ascertain the validity of results obtained at appraisal. For a realistic comparative assessment, the traffic counts should also be conducted just before the commencement of construction and soon after completion of a project life cycle

Table 3.7: Input Parameters for Economic Analysis Soroti-Dokolo-Lira Road Length 123.0 km Road Sections Soroti – Dokolo 62.6 km Dokolo – Lira 60.4 km Works Commencement 2007 Project Duration 3 years Completion Cost (Based on Lowest bidder) Financial Cost (US$/km) Economic Cost (US$/km) Total Financial Costs (mn US$) Soroti – Dokolo 640,701 608,666 40.04 Dokolo – Lira 745,109 707,854 45.00

Annual Cost Stream Year 1 Year 2 Year 3 30% 35% 35% Start Year 2007 Analysis Period 25 yrs Discount Rate 12% Salvage value 10% Base Option: Do Minimum Maintain Gravel Road:  Re- graveling every 10 years  Grading every 550 days  Spot re- graveling with 30m3/km/yr  Routine maintenance Alternative Option  Upgrade Road in 2007 (DBST with 150mm Base)  Maintain Paved Road from 2011 onwards Last rehabilitation 2004 (assumed) Traffic growth after 2007 3.4 % - Light vehicles As forecast in economic evaluation 2.0% - Commercial vehicles report Motorized Traffic - 2006(weighted average ADT) Soroti-Dokolo Dokolo-Lira Motorized 320 vpd 374 vpd Non-Motorized 1392 vpd 1203 vpd Motorized Traffic- 2004 (weighted average ADT) Soroti-Dokolo Dokolo-Lira

Motorized 321 421 Non-Motorized 2051 1428 Generated Traffic Assumptions used in the feasibility have been applied as follows:  20% of normal traffic (for PSVs, light vehicles and motorcycles;  10% of normal traffic (for light and medium trucks;  0% of normal traffic (for heavy trucks and buses). Exogenous benefits (producer surplus based on Net benefit increment of agricultural income US$ 18,338 per year assumptions made in previous studies) Soroti – Dokolo Dokolo - Lira Cars Special Hire Taxis 14 15 Pickups / Vans / 4WD 6 8 Minibuses 28 26 Medium Buses / Coasters 10 11 Buses 1 1 Single Unit Truck (Dynas / Tractors) 3 3 Single Unit Truck (Fusos / Lorries) 12 15 Truck Trailers and Semi Trailers 13 10 Motorcycles 13 11

Table 3.8: Increase in Traffic Volume Soroti - Lira

Name of Traffic Volume at Traffic Volume at Project Percent increase Roads Appraisal (2004) Completion (2010/11) Car Bus Others Car Bus Others Car Bus Others Lira-Agwata 68 53 404 301 30 578 343 -43 43 Agwata-Dokolo 9 31 166 164 30 321 1722 -3% 93 Dokolo-Katine 17 25 111 86 14 379 406 -44 241 Katine-Soroti 20 51 268 123 21 652 515 -59 143

Annex 4: Bank Lending and Implementation Support/Supervision Process

(a) Task Team members Responsibility/ Names Title Unit Specialty Lending

Supervision/ICR Mustapha Benmaamar Sr. Transport. Spec. EASIS Anil S. Bhandari Consultant AFTEG Mary C.K. Bitekerezo Senior Social Development Spec. AFTCS Nina Chee Senior Environmental Specialist MIGEP Jocelyne O. Do Sacramento Operations Analyst AFTTR Olav E. Ellevset Sr. Transport. Spec. AFTTR Martin Fodor Senior Environmental Specialist AFTEN Jonas Per Hermanson Transport. Spec. AFTTR Yitzhak A. Kamhi Consultant AFTTR Paul Kato Kamuchwezi Financial Management Specialist AFTFM Agnes Kaye Program Assistant AFMUG Rosemary Kyabukooli Program Assistant AFMUG Negede Lewi Sr. Highway Engineer AFTTR Mary Consolate Muduuli Operations Officer AFMUG Grace Nakuya Musoke Senior Procurement Specialist AFTPC Munanura Harriet Nannyonjo Senior Education Specialist LCSHE Elizabeth Ninan Human Development Specialist AFTED Labite Victorio Ocaya Sr. Highway Engineer AFTTR Peter Okwero Senior Health Specialist AFTHE Richard Olowo Senior Procurement Specialist AFTPC C. Sanjivi Rajasingham Sector Manager AFTTR Stephen Brushett Lead Transport Specialist AFTTR Dieter E. Schelling Lead Transport Specialist AFTTR Kristine Schwebach Operations Analyst AFTCS Subhash C. Seth Consultant LCSUW Patrick Piker Umah Tete Sr. Financial Management Specialist AFTFM Zemedkun Girma Senior Transport Specialist AFTTR Hege Hope Wade Senior Operations Officer AFMUG

(b) Staff Time and Cost

Staff Time and Cost (Bank Budget Only)

USD Thousands (including Stage of Project Cycle No. of staff weeks travel and consultant costs) Lending FY02 FY03 4.53 31.05 FY04 10.98 62.61 FY05 23.70 128.19 Sub-Total: 39.21 221.86

Supervision/ICR - FY06 20.84 94.51 FY07 15.72 57.93 FY08 17.17 57.22 FY09 23.78 87.26 FY10 25.65 114.35 FY11 26.53 86.60 FY12 33.27 98.96 Sub-Total : 162.96 1,734.17 TOTAL 202.17 1,956.03

Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR

5.3 Introduction

1. A key element in the implementation of the Government’s Roads Sector strategy is the Road Sector Development Program (RSDP), which was endorsed at the Donor’s Conference held in Paris on November 10, 1996. The primary objectives of the RSDP were: (i) to provide an efficient, safe and sustainable road network in support of market integration and poverty alleviation; (ii) to improve the managerial and operational efficiency of road administration; and (iii) to develop the domestic construction industry. The projected total expenditure level under the RSDP was estimated at US$1.5 billion for the national roads network for the period 1996 to 2007 and US$380 million for the district roads over the same period.

2. In order to achieve the RSDP’s intended development objectives, the Government of Uganda (GoU) in 1999 approached the International Development Association (IDA) for funding support. The IDA, in cooperation with other development partners, agreed to support the 10- year program. Of the projected total financing, GoU planned to contribute US$700 million; EU US$223 million; IDA US$356 million and bilateral donors to finance the remainder, The IDA contribution was to include US$282 million under the Adaptable Program Lending and the rest to be provided under the Transport Rehabilitation Project (TRP - Cr. 2587-UG), the Roads Sector Institutional Support Technical Assistance project (RSISTAP Cr. 2987-UG), and El Nino Emergency Project (ENERP).

3. The Development Credit Agreement (DCA) for Road Development Program Phase 1 (RDPP1) in the amount of SDR 67.2 million (US$ 90.98 million equivalent) was signed on November 22, 1999. The closing date for the credit was June 30, 2004 but was later revised to June 30, 2008. The DCA for RDPP2 in the amount of SDR 50.9 million (US$ 6452 million equivalent) was signed on April 11, 2002 and the scheduled closing date was June 30, 2006 but was later reviewed to June 30, 2008. The Development Financing Agreement (DFA) for RDPP3 in the credit amount of SDR 45.970 (US$67.70 equivalent) and grant amount of SDR 27.201 (US$40.00 million equivalent) was signed on September 30, 2004. The closing date was scheduled for December 31, 2009 but was later revised to October 31, 2011.

4. When the tenders for the key components of the RDPP3—the upgrading and strengthening of three high priority national roads—were received the bid amounts were found to be much higher than the funds available for the component. Coupled with the delays during the prequalification of contractors, the lengthy evaluation process, and the long time to decide whether the contracts should proceed, the implementation fell behind schedule by more than two years. The credit was then extended to October 31, 2011.

5. This report is the Borrower’s contribution to the Implementation Completion and Results Report (ICR) for the Road Development Program, Phase III (RDPP3). It provides the overall performance of the project over the program phase and it comprises: an introduction, project objectives, project scope and any changes during the course of implementation, project costs and reallocations, achievements of the project, and lessons learned.

5.2 Project Objectives

6. The development objective of the Project was to improve access to rural areas and economically productive areas and to progressively continue to build-up sustainable road sector planning, design and program management capability including road safety management. It was envisaged that the project would contribute to the following:- i) Increased industrial and agricultural activity ii) Increased traffic growth iii) Reduced travel time and iv) Reduced transport rates and vehicle operating costs over the national roads network.

5.3 Project Components

5.3.1 Original Project Scope as approved

7. The project comprised of the following components:

Component 1. Civil works for upgrading, rehabilitation and reconstruction of priority national roads: i) Reconstruction / upgrading from gravel to paved (bitumen) standards of Kampala- Gayaza-Zirobwe-Wobulenzi road (68km); ii) Upgrading from gravel to paved (bitumen) standards of Soroti-Dokolo-Lira road (125 km); iii) Reconstruction of the Busega-Mityana road (57 km); and iv) Rehabilitation and re-graveling of Atiak-Moyo road (91km).

Component 2. Civil works for construction of buildings This component comprised the reconstruction of the proposed new headquarters building for the Roads Authority.

Component 3. Roads construction services – Construction supervision This component comprised provision of consultancy services for supervision of the civil works contracts in component 1.

Component 4. Detailed design of about 300km of upgrading of district gravel roads and reclassifying to national road standard. This component comprised carrying out designs for the following district roads.

Luwero-Zirobwe 36.7 km Luwero- Wakyato 34.2 km Mityana-Kanoni 37.2 km Nebbi-Goli 14.4 km Ocoko-Inde 32.8 km Muzizi-Rwemiyaga 77.3 km Katine-Ochero 69.2 km Total: 302km

Component 5. Feasibility Studies and Selected Design of about 600 km for Upgrading of Priority National Roads:

This component comprised carrying out feasibility studies and engineering designs of about 600km of roads. Initially, the following roads, with a length totaling to 788 km were considered:

Muyembe-Moroto-Kotido 290 km Mpigi-Maddu-Sembabule 135 km Kyenjojo-Hoima-Masindi-Kigumba 285 km Arua-Koboko-Oraba 78 km

Component 6. Institutional Support and Establishment of the Road Authority This component comprised activities that would enable the establishment and strengthening of an autonomous Roads Authority to improve national roads administration.

5.3.2 Changes in the Project Scope

8. Revised Project Components Component 1

A revision and restructuring of this component was prompted by the shortfall in funds resulting from higher than anticipated bids received on the first three works contracts out of the seven originally planned for implementation under this credit. The following components / subcomponents were reviewed or dropped: iv) Upgrading from gravel to paved (bitumen) standard of the Kampala-Gayaza-Zirobwe- Wobulenzi road had been planned to be implemented through two contracts: Kampala- Gayaza-Zirobwe, 44 km and Zirobwe-Wobulenzi, 23 km. Due to inadequacy of funds, procurement for the contract for the Zirobwe-Wobulenzi, 23 km section of the road was not commenced and this part of the sub-component was dropped. v) Reconstruction of Busega-Mityana road, 57 km. This sub component was funded by the Government of Uganda. vi) Rehabilitation and re-graveling of Atiak-Moyo road, 91 km. The scope of work for this sub-component was reviewed. Drawing from previous experience where investments in rehabilitation and re-graveling of heavily trafficked roads lasted a few months, government adopted a policy not to contract any more future loans for this type of investment. Instead, it was agreed with the Bank that a full design for upgrading the road to paved (bitumen) standard be undertaken under the RDDP3. Government is now financing the construction of bridges, box culverts, and ferry landings for crossing the River Nile on this road.

Component 2

Civil works for construction of buildings: The sub-component for the construction of the proposed headquarters of the Roads Authority was also dropped due to the shortfall arising from the higher prices for contracts in Component 1.

Component 3

The road construction services - supervision of the construction works: the sub-component for the construction supervision of Busega–Mityana road was funded by the GoU and rehabilitation and re- graveling of Moyo–Atiak road was dropped. GoU is financing consultant’s services for supervision of the bridges and ferry landings.

Component 4

Detailed designs were carried out on the roads as per Appraisal Document excepting Muzizi– Rwemiyaga road: 77.3 km which was replaced by Kyegegwa–Kazo road: 87 km. The total length of the roads subsequently increased slightly from the initially 300 km planned to 312 km.

Component 5

This component comprised carrying out feasibility studies and engineering designs of about 600km of national roads. It had been envisaged that the priority national roads that would be considered under this component would be as follows.

Muyembe-Moroto-Kotido 290 km Mpigi-Maddu-Sembabule 135 km Kyenjojo-Hoima-Masindi-Kigumba 285 km Vurra-Arua-Koboko –Oraba 92 km Gulu-Atiak-Bibia-Nimule 104 km The total length of the roads 859 km

A traffic count was carried out on various road links of the national roads network and it was established that there were some that were carrying higher traffic volumes than some of the above roads. Coupled with other economic considerations, the list of the roads to be studied was reviewed and it was agreed that only the following roads totaling to 300 km in length be designed to bitumen standard.

Gulu -Atiak-Bibia-Nimule 104 km Vurra-Arua- Koboko-Oraba 92 km Atiak-Moyo-Sudan border 104 km The total length of the roads designed 300 km

Component 6

All the sub–components of this component were accomplished as appraised

5.4 PROJECT COSTS

5.4.1 Original IDA Financing Allocations

9. The Development Financing Agreement (DFA) for RDPP3 provided for allocation of the SDR 45,970,000 (Credit) and 27,201,000 (Grant) as follows: Category 1. (a) Civil works for parts A1, A2, A3, and B of the project: SDR 20,884,000 Credit and SDR 22,876,000 grant being 80 percent funding for the category; (b) Civil works for part A4 of the project: SDR 16,530,000 Category 2. Consultants’ Services, including Audit Fees: SDR 3,105,000 Credit and SDR 4,325,000 grant being 90 percent funding for the category; and Category 3. Unallocated: SDR 5,451,000.

5.4.2 Amendments and Re-allocations

10. Due to the changes of project scope mentioned in 5.3.2 above and other factors, there were several amendments to the DFA. The first amendment to the DFA was made in November 2007 in response to the Government’s application to the Bank in April 2006 requesting it to meet 100 percent of the financing for (i) civil works and (ii) consultancy services. The Bank accepted the request and Schedule 1 of the DFA was amended to read as in Table 5.1.

Table 5.1: Amendment 1 to the Development Financing Agreement

Category Amount of the Amount of Grant % of Credit Allocated in Allocated in SDR Expenditure SDR Equivalent Equivalent i) Civil Works a) For Parts A1, A2, A3, and B of 20,884,000 22,876,000 100% the Project b) For part A4 of the project 16,530,000 ii) Consultant’s Services, 3,105,000 4,325,000 100% including audit fees iii) Unallocated 5,451,000 Total 45,970,000 27,201,000

11. Schedule 7 of the DFA was also amended to allow for the proceeds of the credit to be utilized to pay for some taxes. The second amendment was made in January 2011 following the Government’s request to the Bank in October 2010 to reallocate the Category of the credit for Unallocated Funds to Categories 1 and 2. The Bank accepted the request and Schedule 1 of the DFA was amended as shown in Table 5.2.

Table 5.2: Amendment 2 to the Development Financing Agreement

Category Amount of the Amount of Grant % of Credit Allocated in Allocated in SDR Expenditure SDR Equivalent Equivalent 1) Civil Works a) For Parts A1 and A2 of 41,800,000 22,876,000 80% the Project 2) Consultant’s Services, 4,170,000 4,325,000 100% Technical Assistance and Parts B, C and D of the Project Total 45,970,000 27,201,000

12. Further, amendments were also made to the scope and description of works to be executed under Category i) Parts A and B of the Project. The credit closing date was also extended by 22 months from December 31, 2009 to October 31, 2011; and the name of the implementing agency was changed from RAFU to UNRA. In component 6, it was agreed with the Bank that the sub-component for consultancies to assist with RAFU transformation be funded by another development partner, EU. The amendments to the original allocations are as shown in Table 5.3.

Table 5.3: Amendments and Reallocations of the Credit and Grant

Component Original Allocation Revised Allocation SDR million SDR million a) All Civil works other than Busega- 43.760 64.676 Mityana road b) Busega-Mityana road 16.530 Nil c) Consultancy Services and Audit fees 7.430 8.495 d) Unallocated 5.451 Nil Total 73.171 73.171

13. When bids for Soroti-Dokolo road were received, it became clear that costs for civil works would outstrip the funds available. A decision was taken to advertise tenders for Kampala- Gayaza-Zirobwe road and Dokolo-Lira road and hold back on tendering the Zirobwe- Wobulenzi road for the time being. For Kampala-Gayaza-Zirobwe road, the lowest bid was US$ 8millon above the funds available for the road. For the Dokolo-Lira road, the lowest bid was US$20million above the budget. It was agreed with the Bank that Government would avail the balance of US$25 million to cover the shortfall in the two contracts before a “no– objection” to sign the contracts would be granted. Following the undertaking, the Bank gave its “no objection” for the contracts to be signed. There were several reallocations between the components to cover the shortfalls in the budgets for the civil works. Allocation of the credit and grant proceeds between the components and financial performance during the implementation of the project are as shown in Table 5.4.

Table 5.4: Financial performance of the project components

5.5 Project Implementation

5.5.1 Implementation Schedule

14. The credit became effective on June 23, 2005 with an original project closing date of December 31, 2009. Due to delays occasioned by the late commencement of the key components of the project i.e. upgrading and strengthening of three priority national roads, an extension was sought on November 2009, and the credit was extended to October 31, 2011. Implementation of the main component of the project, the civil works, was delayed by more than two years. Project implementation of the key activities is as shown in Table 5.5.

Table 5.5: Procurement Implementation Schedule of Key Activities.

Activity Original Actual / Revised Credit Negotiation March 31, 2004 April 5, 2004 Credit Signature September 30, 2004 February 23, 2005 Credit Effectiveness September 30, 2004 June 23, 2005 Credit Closure December 31, 2009 October 31, 2011 Component 1: Upgrading of Priority Roads i) Kampala-Gayaza-Zirobwe-Wobulenzi Road  Selection of Consultants September 28, 2004 July 27, 2007  Selection of Contractors March 29, 2007 August 11, 2007  Commencement of works May 1, 2007 March 30, 2008  Completion of works July 26,2009 July 21, 2011 ii) Soroti-Dokolo Road  Selection of Consultants May 3, 2005 July 27, 2007  Selection of Contractors April 5, 2007 August 13,2007  Commencement of works June 1,2007 November 1, 2007  Completion of works November 17,2009 March 18, 2010 ahead of schedule iii) Dokolo-Lira Road  Selection of Consultants May 3, 2005  Selection of Contractors April 5, 2007 February 2008  Commencement of works June 1,2007 June 1, 2008  Completion of works November 17,2009 September 24, 2010 ahead of schedule iv) Busega – Mityana Road  Selection of Consultants June 24, 2005 May 8, 2009  Selection of Contractors October 23, 2007 May 7, 2009  Commencement of works July 9, 2009  Completion of works April 15, 2009 July 30, 2012 v) Rehabilitation and Re-graveling of Atiak- Moyo road  Selection of Consultants September 28, 2004 February 23, 2007 (only design) Supervision: Dec. 31, 2010  Selection of Contractors August 31, 200 October 4, 2010  Commencement of works January 24, 2009 Dec. 31, 2010  Completion of works August 21,2010 Dec. 31, 2012 Component 2: Civil works for construction

of Buildings  Selection of Consultants  Selection of Contractors July 19,2007 n.a  Commencement of works September 1,2007 n.a  Completion of works July 28, 2008 n.a Component 3: Consultancy services for civil works construction supervision  Selection of Consultants Various times Various times but within schedule  Commencement Various times Various times but within schedule  Completion Various times Various times but within schedule Component 4: Design of 300km District Roads  Selection of Consultants June 24, 2005 September 1, 2006 & February 19, 2007 October 30, 2007  Commencement Various times Various times but within schedule  Completion Various times Various times but within schedule Component 5: Feasibility Studies and Design of 600km of National roads  Selection of Consultants January 2005 December 29, 2008  Commencement June 24,2005 December 29,2008  Completion March 24, 2006 August 28, 2009 Component 6: Institutional Support and establishment of Roads Authority  Selection of Consultants Various times Various times but within schedule  Commencement Various times Various times but within schedule  Completion Various times Various times but within schedule

5.5.1 Financial Performance

A summary of the financial performance of the individual components at project closure is shown in Table 5.6. From the table the percentage utilization of the credit and grant is 108 percent. This difference arises from the depreciation of the dollar against the SDR over the years.

Table 5.6: Financial performance as at Project Closure

Component Description Appraisal Estimate Revised Estimate Actual Expenditure US$ million US$ million US$ million IDA GoU Total IDA GoU Total IDA GoU Total Part A: Civil works for Upgrading, Rehabilitation and Reconstruction i) Kampala -Gayaza- 24.94 6.24 31.18 27.85 21.16 54.59 31.56 26.16 57.72 Zirobwe-Wobulenzi road ii) Soroti-Dokolo-Lira 37.60 9.40 47.00 74.00 40.83 114.83 74.00 29.51 103.51 road iii) Busega-Mityana road 19.44 4.86 24.30 0.00 47.19 47.19 0.00 53.94 53.940 iv) Atiak-Moyo road 8.70 2.18 10.88 0.00 8.92 8.92 0.00 8.92 8.92 Part B: Construction of 6.00 1.50 7.50 0.00 0.00 0.00 0.00 0.00 0.00 Road Authority Headquarters Part C: Consultancy Services for Construction Supervision i) Kampala-Gayaza- 1.32 0.14 1.36 2.33 2.33 2.70 0.23 2.93) Zirobwe -Wobulenzi road ii) Soroti-Dokolo-Lira 1.84 0.20 2.04 2.70 2.70 2.47 0.34 2.81) road iii) Busega-Mityana road 0.99 0.11 1.1 1.87 1.87 3.32 3.32 iv) Atiak-Moyo road 0.85 0.09 0.94 0.46 0.46 0.46 0.46 Total for Part C 5.44 0.00 5.44 5.03 0.00 5.03 5.17 0.57 5.74 Part D: i) Design for Upgrading 1.44 0.16 1.60 0.92 0.01 1.02 0.97 0.05 1.02 300km ii) Feasibility studies and 1.80 0.20 2.00 2.26 0.25 2.51 2.51 0.00 2.51 Detailed Design of 300 km Part E: Institutional 2.79 0.31 3.10 2.94 0.33 3.37 2.19 0.01 2.20 Support to RAFU / Road Authority TOTAL PROJECT 107.70 25.39 133.00 107.97 126.05 239.79 116.40 122.94 239.34 COST

5.6 Achievements Of Project, Implementation And Financial Objectives

5.6.1 Overall Assessment

15. The overall development objective of RDPP3 was to improve access to rural and economically productive areas and to progressively continue to build up sustainable road sector planning, design and program management capability, as well as road safety management. This was to be achieved by: (i) upgrading/reconstruction of three high priority national roads; (ii) carrying out detailed design of about 300km of district roads reclassified

to the national roads standard; (iii) carrying out feasibility studies and detailed engineering design for about 600km of priority national roads; (iv) rehabilitation/re-graveling of the Atiak-Moyo road; (v) construction of the proposed new Roads Authority headquarters building and (vi) institutional support to the establishment of the Roads Authority.

16. Implementation of the civil works commenced more than two years behind schedule. During the Bank’s mission of October 22-November 2, 2007, the project rating had been downgraded to “moderately unsatisfactory.” However, once the civil works contracts commenced, performance improved significantly. The rating with respect to achievement of the project and implementation objectives is as follows:

Component 1. Civil Works for Upgrading, Rehabilitation and Reconstruction:

Table 5.7: Component 1 – Outputs

Planned Output Indicator Actual Output Remark Output Priority national 154 km of gravel Upgrading of Soroti- 152 km out of the planned 154 km was achieved. roads upgraded roads upgraded by Dokolo section: 62.6 km to paved December 2009 completed in March 2010, The road Section: Zirobwe -Wobulenzi: 23.0 km could standard Dokolo-Lira section: 60.4 not be done due to inadequate funds. km completed in September 2010 and Works were completed 2 years late; the late Gayaza-Zirobwe section: completion was due to initial delays in credit 30.0 km completed in effectiveness; prequalification of contractors, July 2011 evaluation of bids and approval of commencement of the works after bids received were much higher than the available budget. Priority national 72km of existing Kampala -Gayaza section Only 14.6 km out of the planned 72km of roads was roads roads reconstructed of 14.6 km was completed achieved, there were two years of delay. reconstructed by December 2009 in July 2011 Busega-Mityana: 57km was financed by GoU. Due to Busega-Mityana (57km) inadequate funds in the budget, for the component, will be completed in June works will be completed by the end of June 2012. 2012 Priority national Moyo-Atiak road Feasibility study and The GoU funded the construction of bridges and box roads 91km rehabilitated / detailed engineering culverts, which will be completed by the end of rehabilitated/ re- re-graveled by design carried out December 2012. graveled. September 2009

Rating of achievement of this objective is: SATISFACTORY

Component 2. Civil Works for construction of buildings:

Table 5.8: Component 2 – Outputs

Planned Output Indicator Actual Output Remark s Output Authority Head Building Construction works This component was dropped due to the Quarters Construction works not undertaken restructuring of the credit Building completed by September 2009

The objective of this component was not achieved.

Component 3. Consultancy Services for Civil works construction supervision

Table 5.9: Component 3 – Outputs

Planned Output Indicator Actual Output Remark Output Civil works 5 Civil works 3 Civil works Planned outputs were achieved contracts contracts completed contracts completed excepting consultancy services supervised by September 2007 at various times contracts for components B which were between March 2010 dropped and the services were not and July 2011. procured

Rating of achievement of this objective is: SATISFACTORY

Component 4. Detailed design of about 300km of upgrading of District gravel Roads and Reclassifying to National Roads Standard

Table 5.10: Component 4 – Outputs

Planned Output Indicator Actual Output Remarks Output Feasibility Feasibility studies Feasibility studies All planned outputs were achieved studies and and designs of the and Designs for 312 within the project implementation Detailed roads completed by km of district roads period. However there was a Engineering September 2009 in 2 lots completed in replacement of Muzizi – Rwemiyaga: Design for February 2007 77.3 km road with Kyegegwa – Kazo: about 300km 87 km road road carried out

Rating of achievement of this objective is: SATISFACTORY

Component 5. Feasibility studies and design of about 600km for upgrading of Priority National Roads. Table 5.11: Component 5 – Outputs

Planned Output Actual Output Remarks Output Indicator Feasibility Feasibility Feasibility studies Government reviewed its studies and studies and and designs of 306 prioritization based on traffic counts engineering designs of about km of roads and determined that Vurra–Arua – design for 600 km of roads completed by Koboko–Oraba: 98 km and Gulu– about 600km completed by December 2009 Atiak–Bibia–Nimule: 104 km were of roads September 2009 of higher priority and be designed to carried out bitumen standard in addition to Atiak – Moyo.

Rating of achievement of this Component is: SATISFACTORY

Component 6. Institutional Support and establishment of the Roads Authority

Table 5.12: Component 6 – Outputs

Planned Output Output Indicator Actual Output Remarks i) Parliamentary Proclamation of Act to establish Road Achieved in 2006 Road Authority Authority passed ii) Consultancies to assist with Consultants procured 43 man-months This component was RAFU transformation procured within implementation of TA procured later financed by period another development partner – EU iii) Head Office Organization Organization achieved Restructured restructured iv) Performance Agreement Performance achieved Developed agreement put in place v) Internal Audit Department Internal Audit achieved Established Department established vi) Management Information MIS’s in place achieved Systems Developed vii) Management Systems for Systems for subsidiary achieved subsidiary activities developed activities in place viii) Human Resource and Training to develop achieved Management Skills Developed. skills undertaken ix) Funding arrangements Arrangements achieved established established x) Roads Authority Business Plan Business Plan in place achieved Developed xi) Regional Managing Engineering Consultants procured achieved Consultants Established xii) External Audit Services carried Audit services carried achieved out through the Implementation out annually Period

Rating of achievement of this Component is: SATISFACTORY

5.7 Bank and Borrower Performance

5.7.1 Bank’ s Performance: a) Project Preparation:

17. Components of the project had been identified earlier in 1999 when the RDP was being formulated. The Bank worked very closely with the Government officials during the implementation of Phase I and II. Phase III was as per earlier plan but some modifications to scope and timing to take into account Government’s emerging priorities and policies at that later time were introduced. b) Project Appraisal:

18. The project was reviewed and appraised in August 2004. The appraisal took into consideration the country’s RSDP review of 2001. c) Project Monitoring:

19. The Bank’s monitoring was satisfactory. This is reflected in the regular quarterly project implementation supervision missions, midterm review, an independent procurement review and several other project visits all of which provided invaluable guidance for improving the project implementation.

20. Throughout the life of the project, the Bank endeavored to ensure that the Client achieved the project outcomes. This was particularly evident with regard to the Bank’s keen interest in trying to resolve the issue to achieve the original project objectives despite the higher than anticipated costs of the road projects. Regular project implementation missions were conducted throughout the project life. In this regard, the Bank’s performance is rated as SATISFACTORY.

5.7.2 Borrower’s Performance a) Government: 21. Although it experienced problems in meeting its counterpart funding obligations during the earlier stages of the project implementation, Government was later able to contribute additional funding to enable some of the components that had been dropped from the program due inadequate funds, e.g., the reconstruction of Busega-Mityana road. There were long initial delays to commence the civil works contracts, but once the problems were overcome, contract execution was smooth. The proportion of GoU’s contribution ended up being higher than at project appraisal. In this regard, Government’s performance is rated as SATISFACTORY. b) Implementing Agencies

22. With the establishment of the National Roads Authority (UNRA), the borrower was able after resolving problems that caused the initial delays, to ensure timely and smooth implementation of the project.

23. The implementing agency endeavored to ensure that the contracts were completed within the scheduled time, cost and quality. The agency was able to ensure success of most of the project components as conceived. The agency supported the Bank missions whenever need arose to ensure that the Bank accomplished its objectives. Overall, the Implementing Agency’s performance is rated as SATISFACTORY.

5.8 Lessons Learned

24. The cost of the civil works component both at appraisal and feasibility/detailed design varied substantially. This was due to the sudden sharp rise of the cost of fuel, construction materials and other inputs at the time of bidding. The eventual bid prices could therefore not enable the project to be implemented as appraised; consequently some components had to be dropped. In future, it may be prudent to undertake design reviews and updates of cost estimates just before calling for bids.

25. Land acquisition for right-of-way and payment of compensation for properties has continued to cause project implementation problems, and thus should be resolved before the works contracts commence. All efforts should be made to ensure that contractors should always receive encumbrance free sites.

26. Procurement continues to be a major delaying factor for IDA and other donor funded projects. It is vital that realistic procurement plans are put in place to avoid such delays. It is worthwhile to explore the possibility that commencement of procurements could also be de- linked from the credit effectiveness date in order to reduce procurement lead-time.

27. Clauses in the standard bidding document relating to variation of price, the price adjustment formula, and indices and factors affecting prices of project inputs need to be reviewed and streamlined. The complex implementing agency’s staff need to receive specialized training to enable them handle this subject more confidently.

5.9 Project Benefits

28. The major benefits of the project are:- i) The upgrading / reconstruction of 170 km of national roads; ii) Reduction of travel times on the improved roads; iii) Increased agricultural activities along and in the neighborhood of the improved roads; iv) Increased values of land and properties along and in the neighborhood of the improved roads; v) The design and subsequent improvement of 312 km of district roads that have been reclassified to national roads standard; vi) The design of some 306km of national roads for upgrading from gravel to bitumen standard; and vii) The establishment of an autonomous Roads Authority for more effective of national roads management.

Annex 6. List of Supporting Documents

1. Project Appraisal Documents for: i) Road Development Program, Phase I Project – June 3, 1999 ii) Road Development Program, Phase II Project – June 7, 2001 iii) Road Development Program, Phase III Project – August 9, 2004 2. Development Credit Agreements for: i) Road Development Program Phase I Project – November 22, 1999 ii) Road Development Program, Phase II Project – August 16, 2001 iii) Road Development Program, Phase III – February 23, 2005. 3. Aides-memoire, implementation status reports and project progress reports. 4. Country Assistance Strategy 5. Project Implementation Plan 6. Executive Agency Implementation Policy Framework and Implementation Strategy, March 2000 7. Uganda National Road Authority Act, June 8, 2006 8. Consultants’ Study Reports: i) Transitional Institutional Reforms for the Establishment of Road Agency, June 1998 i) Road Agency Study, March 2002

57 IBRD 39358

UGANDA ROADS DEVELOPMENT PROGRAM PHASE 3 (RDPP3) PROJECT

ROADS UPGRADED TO BITUMEN STANDARD MAIN CITIES ROADS DESIGNED FOR UPGRADING UNDER THE FOLLOW-ON PROJECT DISTRICT CAPITALS ROADS UPGRADED OR RECONSTRUCTED UNDER RDPP NATIONAL CAPITAL ROADS DROPPED BUT REHABILITATION FINANCED BY THE GoU GRAVEL ROADS ROAD DROPPED FROM RDPP3 PAVED ROADS INTERNATIONAL BOUNDARIES Source: Uganda National Road Authority (UNRA).

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