Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized PROJECT COMPLETION REPORT URUGUAY Public Disclosure Authorized SECOND HIGHWAY PROJECT (LOAN 1689-UR) JUNE 10, 1993 Public Disclosure Authorized Infrastructure and Energy Operations Division Country Department IV Public Disclosure Authorized Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. 7 January 1 to December 3 1, 1992 Metric 1 Metet (m) 3.28 feet (ft) 1 Kilometet (Km.) 0.62 mile (mi) 1 Kilogram (Kg.) 2.20 pounds (lb) 1 Metric Ton von.) 2,205 pounds ABT Average Daily traffic AFE Administracidn de 10s Ferrocarriles del Estado AID Agency for International Development ANCAP Administracidn Nacional de Combustible, Alcohol y ~ortland ANP Administracidn Nacional de Puertos CIF Cost Insurance and Freight CNPA Comisi6n Nacional de Polftica AeronAutica DAC Direcci6n General de Aeropuertos Nacionales DODE Directorate of Economics Development Works ERR Economic Rate of Return IDB Intm American Development Banks MTOP Ministry of Transport and Public Works PLUNA Primera Lheas Uruguayas de Navegaci6n AQea RAM Real Analysis Model SEPLACODI Seamade Planificaci6n Coordinaci6n y Difusi6n TAMU Trmportes AQm Militar Uruguayo TPU Transport Planning Unit UNDP United Nations Development R~yram VP~ Vehicles per day FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operatione Evaluation June 10, 1993 MEMORANDUM TO TRE EXECUTIVE DIRECTORS AND TRE PRESIDENT SUBJECT : Project Completion Report on Uruguay Second Binhway Proqect (Loan 1689-UR) Attached is the report entitled "Project Completion Report on Uruguay - Second Highway Project (Loan 1689-UR)", prepared by the Latin America and the Caribbean Regional Office. The report, written some six years after loan closing, does not include a borrower review of the project (Part 11). However, the report is of satisfactory quality and incorporates findings of a brief borrower implementation report issued within one year after project completion. Project objectives, characterized in the PCR as modest, were vague: to reestablish a borrower-Bank working relationship in highways and continue improving the sector. Project components were physical investments and measures to imprwe transport sector management. After substantial delays, the project was successfully implemented. Overall project performance is rated as satisfactory, institutional development as partial, and sustainability as likely. Attachment This docunmt has a restricted distribution and mey be usd by recipients only in the prfonnance of their official duties. Its contents my not otherwise k disclosed without World Bank authorization. FOR OFFICIAL USE ONLY URUGUAY PROJECT COMPLETION REPORT Table of ContenQ meNo. PREFACE .................................................... ii EVALUATIONS-Y ............................................ iii PART I PROJECI' REVIEW FROM BM+X'S I%~SPECIm 1. Project Identity .............................................. 1 2 . Bakgound ................................................... 1 3 . Project Objectives and Description .................................... 2 4 . Project Design and Organization ..................................... 2 5. Project Implementation ........................................... 3 6 . ProjectResults ................................................ 5 7 . Sustainability ................................................. 6 8 . Bankperformance .............................................. 6 9 . Borrower's Performance .......................................... 6 10. Project Relationships ........................................... 7 11. Consulting Services ............................................ 7 12 . Project Documentation and Data .................................... 7 PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ................. 9 PART Ill STATISTICAL INFORMATION .................................. 10 1. Related Bank Loans ............................................ 11 2 . Project Time Table ............................................ 12 3 . Estimated and Actual Schedule of Disbursements ........................... 13 4.EstimatedandActualCosts ....................................... 14 5. Project Implementation Schedule (Civil Works) ........................... 15 6 . Status of Loan Covenants ......................................... 16 7 . Economic Reevaluation of the Project ................................. 18 8 . Use of Bank Resources .Mission Data ................................ 19 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization . URUGUAY PROJECT COMPLETION REPORT SECOND HIGHWAY PROJECT man 1689-UR) PREFACE This is the Project Completion Report (PCR) for the Second Highway Project in Uruguay, for which Loan 1689-UR in the amount of US$26.5 million was approved on Bpfil 17. 1979. The loan was closed on Juae 30. 1986, two years behind schedule, when (US$24.6 million) was disbursed, and US$1.9 million was cancelled. The PCR was prepared by the Infrastructure and Energy Operations Division of the Latin America and the Caribbean Country Department IV (Preface, Evaluation Summary, and Parts I and m.) The Borrower sent a brief PCR in May 1987. Due to lapse of more than 5 years since the conclusion of the projezt, it is not expec&d that the borrower will have any significant contribution to make towards Part II (Project Review from Borrower's Perspective) other than the data and comments given in the Borrower's PCR of May 1987, which have already been incorporated in this report. iii URUGUAY PR OJECI' COMPLETION REPORT sECOND HIGHWAY PROJECT (Loan 1689-UR) EVALUATION SUMMARY 1. The main objectives of the project, the establishment by the Bank of a working relationship in regards to the highway sector in Uruguay, and the initiation of improvements in the sector by improving a highway connecting Uruguay with its neighbor Brazil, were basically achieved. The technical assistance provided under this project helped define a long term plan for the highways, and helped provide a framework for the restructuring of the railway system. 2. There were substantial delays in the implementation of the Civil Works, initially in the evaluation of the bids, and later, rather more seriously, in obtaining the land appropriations for the project and the relocation of the utilities from the area to be covered by some of the new alignments of Route 8 (Para. 5.5). As a result, the loan closing date had to be extended twice and the loan was closed two years later than the date foreseen at appraisal. 3. Changes in the country's monetary policies resulting in frequent devaluations of the Uruguayan peso reduced the cost of the project (in US$ terms), which enabled some additional works to be included for Bank financing (Para. 5.6) and eventually led to the cancellation of US$1.9 million out of the Bank loan of US$26.5 million (Para. 5 3). 4. The Project as originally conceived was sustainable in as much as it resulted in the development of a long-term program for the improvement of the generally rundown highway infrastructure of Uruguay, which has incidentally been followed up in the subsequent highway/ transport sector projects. 5. This was a relatively small project with modest objectives which were largely achieved, although there were substantial delays. The execution of the Civil Works and their Supervision were germally competenty done, although it seems the problem of land acquisition and relocation of utilities from the projects area were inadequately studied at the time of the preparation of the project. There is evidence that some of these delays affeded the performance of the Contractors. This project highlights the need for adequate attention to this important subject at the time of project preparation. 6. The project served to strengthen transport sector planning. Technical assistance to the Transport Planning Unit (TPU) helped define a long-term development plan for highways and bridges, which has formed the basis of the subsequent two projects in Uruguay, and prepared recommendations concerning appropriate refonns in the role of the railways, on which the pattan for the restructuring of the A.F.E. in the following years has by in large been based. URUGUAY letion Re~od Second Hinhwav Proiect ban 1689-UR) PART I - Pro iect Review from Bank's Pers~ective 1.1 Project Name Second Highway Project Loan Number 1689-UR Loan Amount $26.5 million (reduced to $24.6 million)/l.9 03-Financing $5.0 million, by the Bank of Nova Scotia, Canada Total Project Cost at Appraisal $61.2 million Actual Project Cost $52.8 million RVP Unit Latin America and the Caribbeau Region 03- Uruguay Sector Transport Sub-Sector Highways 2.1 The concen*on of Uruguay's commercial activity and population in the capital city of Montevideo is reflected in the country's transport system which developed road and rail permanent ways extending radially north, east and west from the poli it an region around the seaport of Montevideo. At the time of the inception of this project, roads accounted for about 73 % of the traffic, rail 20 46 and water 7 46. Of the road network of some 50,000 km., at the time of appraisal 9800 km. were national roads (Map IBRD 14225), the remainder