A. Basic Information

Document of The World Bank

Report No: ICR00003255 Public Disclosure Authorized

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-38660; IDA-38661; IDPA-48210; P071985)

ON A

CREDIT

IN THE AMOUNT OF SDR 33.5 MILLION (US$50 MILLION EQUIVALENT)

AND Public Disclosure Authorized

AN ADDITIONAL FINANCING

IN THE AMOUNT OF SDR 16.8 MILLION (US$25 MILLION EQUIVALENT)

AND

A SECOND ADDITIONAL FINANCING

IN THE AMOUNT OF SDR 9.9 MILLION

Public Disclosure Authorized (US$15 MILLION EQUIVALENT)

TO THE

REPUBLIC OF ZAMBIA

IN SUPPORT OF A

ZAMBIA ROAD REHABILITATION AND MAINTENANCE PROJECT

April 27, 2015

Public Disclosure Authorized Transport Sector and ICT Global Practice Country Department AFCS3 Africa Region

CURRENCY EQUIVALENTS

(Exchange Rate Effective June 30, 2014)

Currency Unit = Zambian Kwacha ZMK 1 = US$ 0.16 US$1 = ZMK 6.28

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AF1 First Additional Financing AF2 Second Additional Financing APL Adaptable Program Loan APL1 Adaptable Program Loan, Phase 1 APL2 Adaptable Program Loan, Phase 2 ARAP Abbreviated Resettlement Action Plan CAS Country Assistance Strategy CPs Cooperating Partners CRN Core Road Network CTI Community Transport Infrastructure DANIDA Danish International Development Agency DRC Democratic Republic of Congo EIA Environmental Impact Assessment EPC Engineering, Procurement and Construction companies GDP Gross Domestic Product GRZ Government of the Republic of Zambia HDM4 Highway Design Model 4 HIPC Highly Indebted Poor Countries IA Implementing Agency IDA International Development Agency IMT Intermediate Means of Transport IRI International Roughness Index IRR Internal Rate of Return MCT Ministry of Communications and Transport M&E Monitoring and Evaluation MLGH Ministry of Local Government and Housing MOU Memorandum of Understanding MTR Mid-Term Review MTWSC Ministry of Transport, Works, Supply and Communications NCC National Construction Council NRB National Roads Board

NRFA National Road Fund Agency OP Operations Policy OPEC Organization of the Petroleum Exporting Countries PAD Project Appraisal Document PIU Project Implementing Unit PDO Project Development Objectives QEA Quality at Entry Assessment RAMP Rural Accessibility and Mobility Program RDA Road Development Agency RMI Road Maintenance Initiative ROADSIP Road Sector Investment Program ROADSIP II Road Sector Investment Program, Phase II RTSA Road Transport and Safety Agency RRMP Road Rehabilitation and Maintenance Project RTTP Rural Travel and Transport Program US United States ZMK Zambia Kwacha

Vice President: Makhtar Diop Country Director: Kundhavi Kadiresan Senior Practice Director: Pierre Guislain Practice Manager: Supee Teravaninthorn Task Team Leader: Justin Runji ICR Team Leader: Bertrand Murguet

ZAMBIA ROAD REHABILITATION AND MAINTENANCE PROJECT

CONTENTS A. Basic Information ...... i B. Key Dates ...... i C. Ratings Summary ...... i D. Sector and Theme Codes ...... ii E. Bank Staff ...... iii F. Results Framework Analysis ...... iii G. Ratings of Project Performance in ISRs ...... vii H. Restructuring (if any) ...... viii I. Disbursement Profile ...... ix

1. Project Context, Development Objectives and Design ...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 7 3. Assessment of Outcomes ...... 13 4. Assessment of Risk to Development Outcome ...... 19 5. Assessment of Bank and Borrower Performance ...... 20 6. Lessons Learned ...... 21 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ...... 23 Annex 1. Financing Summary for APL Phases and Project Cost by Component ...... 24 Annex 2. Outputs by Component ...... 25 Annex 3: Economic and Financial Analysis ...... 33 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...... 39 Annex 5. Summary of Borrower’s ICR ...... 41 Annex 6. List of Supporting Documents ...... 48 MAP

A. Basic Information

Road Rehabilitation and Country: Zambia Project Name: Maintenance Project IDA-38660,IDA- Project ID: P071985 L/C/TF Number(s): 38661,IDA-48210 ICR Date: 03/26/2015 ICR Type: Core ICR REPUBLIC OF Lending Instrument: APL Borrower: ZAMBIA Original Total XDR 33.50M Disbursed Amount: XDR 59.98M Commitment: Revised Amount: XDR 59.98M Environmental Category: B Implementing Agencies: Ministry of Transport, Works, Supply and Communications (MTWSC) Ministry of Local Government and Housing (MLGH) National Road Fund Agency (NRFA) Road Development Agency (RDA) National Council for Construction (NCC) Road Transport and Safety Agency (RTSA) Cofinanciers and Other External Partners: Danish International Development Agency (DANIDA) The European Development Fund (EDF) Japan International Cooperation Agency (JICA) Kreditanstalt Fur Wiederaufbau (KFW) Nordic Development Fund (NDF) Norwegian Agency for Development Cooperation (NORAD) Organization of the Petroleum Exporting Countries (OPEC) B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 12/12/2002 Effectiveness: 06/15/2004 06/15/2004 12/13/2006 04/12/2007 Appraisal: 10/20/2003 Restructuring(s): 05/14/2010 04/02/2012 Approval: 03/09/2004 Mid-term Review: 01/31/2006 07/14/2006 Closing: 06/30/2007 06/30/2014

C. Ratings Summary

C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Significant 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 Implementing Moderately Quality of Supervision: Moderately Satisfactory Agency/Agencies: Unsatisfactory Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance:

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

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 7 6 Ports, waterways and shipping 1 0 Rural and Inter-Urban Roads and Highways 73 75 Sub-national government administration 2 1 Urban Transport 17 18

Theme Code (as % of total Bank financing) Administrative and civil service reform 24 6 HIV/AIDS 13 0 Infrastructure services for private sector development 25 81 Participation and civic engagement 13 0 Rural services and infrastructure 25 13

E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Callisto E. Madavo Country Director: Kundhavi Kadiresan Hartwig Schafer Practice Manager/Manager: Supee Teravaninthorn C. Sanjivi Rajasingham Project Team Leader: Justin Runji Petrus Benjamin Gericke ICR Team Leader: Bertrand Murguet ICR Primary Author: Bertrand Murguet Atsushi Iimi

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The Project Development Objectives are listed below.

(a) The preservation of the public core road network in support of sustainable economic growth and diversification strategy. (b) The development and then maintaining of institutional capacity for the efficient, equitable and financially sustainable management of the public road infrastructure and road safety. (c) The extension of urban and rural transport infrastructure and services for increased accessibility. (d) The extension of local community involvement in the management of selective road infrastructure as well as in prioritization of investments.

Revised Project Development Objectives (as approved by original approving authority)

(a) Development of the institutional capacity for sustainable management of public road infrastructure and road safety; (b) Preservation of road assets in targeted transport corridors; and (c) Rehabilitation and construction of targeted transport infrastructure.

(a) PDO Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years The coverage of core road network under sustainable routine maintenance program Indicator 1 : increased from 19.50 percent in 2004 to 40 percent in 2006 Value quantitative or 19.5 percent 40 percent 50 percent 50 percent Qualitative) Date achieved 03/09/2004 06/30/2006 05/14/2010 06/30/2014

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Original target not achieved by 2006. Indicator formally revised under AF2 on Comments 05/14/2010 as: Expansion of routine maintenance of core roads program (percentage of (incl. % core roads network) from 19.5% in 2004 to 50% in 2012. Achieved with two years achievement) delay. Quality of core road network improved for paved roads from 58 percent in 2004 to 65 Indicator 2 : percent in 2006 and for unpaved roads from 7 percent in 2004 to 32 percent in 2006 Condition of the Lusaka- For paved roads Chirundu Road from 58 percent in (percentage of Value 2004 to 65 percent road in good quantitative or 58 percent in 2006 and for and fair 89 percent Qualitative) unpaved roads from condition) 7 percent in 2004 to increases from 32 percent in 2006 50 percent in 2004 to over 70 percent in 2012 Date achieved 03/09/2004 06/30/2006 06/30/2010 06/30/2014 Comments Original target exceeded by 2006 with 64% and 44%. Indicator formally revised under (incl. % AF1 to reflect actual works carried out under project. Revised target achieved with two achievement) years delay. Indicator 3 : Domestic funding for the total road budget increases from 27% in 2004 to 40% in 2006 Value from 38 percent quantitative or 27 percent 40 percent in 2006 in 2004 to 65 66 percent Qualitative) percent in 2012 Date achieved 03/09/2004 06/30/2006 06/30/2010 06/30/2014 Comments Original target not achieved by 2006. Target increased under AF2. The inconsistency in (incl. % the baseline values in 2004 is due to the availability of approximate data at the time of achievement) the project preparation. Revised target was achieved with a two years delay. Indicator 4 : System for recording of road accidents and its analysis in place by December 2005 System for Value recording of System has been quantitative or Not in place Not in place road accidents developed but is not Qualitative) and its analysis operational functional Date achieved 03/09/2004 12/31/2005 05/14/2010 06/30/2014 Comments Target not achieved by 2005. Indicator revised under AF2. Revised target not achieved. (incl. % The system has been developed by RTSA in 2014 after a long delay, but its achievement) operationalization has been carried over to APL2. Number of visitors accessing the four rehabilitated national parks before and after Indicator 5 : project intervention Number of rural population with Value access to re- quantitative or 0 502,000 in 2012 instated all- 505,000 Qualitative) weather river crossings from 0 in 2007 to

502,000 in 2012. Date achieved 04/14/2007 04/14/2007 05/14/2010 06/30/2014 Comments Indicator added under AF1. Indicator revised under AF2. The target has been exceeded (incl. % due to the completion of Chiawa Bridge. achievement) Proportion of rural population with access to re-instated all-weather river crossings Indicator 6 : from 0 in 2007 to 826,000 in 2010 Number of rural population with access to re- Value instated all- quantitative or 0 826,000 in 2010 505,000 weather river Qualitative) crossings from 0 in 2007 to 502,000 in 2012 Date achieved 04/14/2007 04/14/2007 05/14/2010 06/30/2014 Comments Indicator added under AF1. Indicator revised under AF2. Indicator was cancelled and (incl. % merged with Indicator 5. achievement) Indicator 7 : Direct project beneficiaries of which 49% are female increased to 505,000 505,000 Value beneficiaries of 49 percent of total quantitative or 0 which 49 percent 505,000 beneficiaries Qualitative) are female Date achieved 03/09/2004 05/14/2010 06/30/2014 Comments (incl. % This core indicator was added under AF2. The target was achieved. achievement)

(b) Intermediate Outcome Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised Target approval Completion or Values documents) Target Years Indicator 1 : Kilometers of core roads rehabilitated a) Roads rehabilitated, Value rural (15 km); (quantitative 0 km NA b) Roads a) 23.5 km b) 133km or Qualitative) rehabilitated, Non-rural (45km). Date achieved 03/10/2004 03/10/2004 05/14/2010 06/30/2014 Comments Indicator revised under AF2, and replaced by two Core Sector Indicators. Revised (incl. % target a) exceeded by 155 percent (community roads). Revised target exceeded by 295 achievement) percent.

Indicator 2 : Km of core roads received periodic maintenance Value (quantitative NA NA or Qualitative) Date achieved 03/10/2004 06/30/2014 Comments (incl. % Partial information indicates that the indicator was dropped after effectiveness. achievement) Indicator 3 : Km of routine maintenance of core roads completed Value (quantitative NA NA or Qualitative) Date achieved 03/10/2004 06/30/2014 Comments Partial information in supervision document indicates that the indicator was dropped (incl. % after effectiveness. achievement) Indicator 4 : Km of core roads upgraded Value (quantitative NA NA 0.0 0.0 or Qualitative) Date achieved 03/10/2004 03/10/2004 06/30/2012 06/30/2014 Comments Partial information in supervision document indicates that the indicator was dropped (incl. % after effectiveness. achievement) Indicator 5 : Km of non-core roads received accessibility improvements Value (quantitative NA NA or Qualitative) Date achieved 03/10/2004 06/30/2014 Comments Partial information in supervision document indicates that the indicator was dropped (incl. % after effectiveness. achievement) Indicator 6 : Restructuring of Road Agencies completed by 2005 Value Agencies restructured Road Agencies not restructuring (quantitative and operational by restructured completed by 2005 or Qualitative) December 2006 Date achieved 03/10/2004 12/31/2005 12/31/2006 Comments (incl. % Target achieved with one year delay by end of 2006. achievement) Indicator 7 : Number of transport sector related staff trained Value (quantitative 0 50 60 or Qualitative) Date achieved 03/10/2004 03/10/2004 06/30/2014 Comments 60 Staff of five IAs have received trainings in Road Safety, Road Finance, Road sector (incl. % reforms, Road Maintenance Management and more. The original target has been achievement) exceeded by 20%, but training value has been impacted by the high turnover of staff.

Indicator 8 : Reduction of travel time of farm produce to markets Average delay Value across river reduction by over (quantitative No data available No data available Kafue at 90% or Qualitative) Chiawa reduced by over 90%. Date achieved 03/10/2004 03/10/2004 04/14/2007 06/30/2014 Comments Original indicator replaced under AF1 to adjust attribution. After completion of Chiawa (incl. % Bridge on June 30, 2014, the time has been indeed reduced by over 90% (from 25 min achievement) to 1 min). Indicator 9 : Number of river crossings reconstructed Value (quantitative 0 103 103 or Qualitative) Date achieved 03/10/2007 12/31/2010 12/31/2010 Comments Indicator added under AF1 to reflect on the new activity of construction of River (incl. % crossings. Original target achieved in 2010 (34 in Northern Province, 30 in Luapula achievement) Province and 39 in National Parks). Indicator 10 : Completion of Chiawa Bridge construction Value (quantitative No Yes Yes or Qualitative) Date achieved 03/05/2007 03/05/2009 06/30/2014 Comments Indicator added under AF1 to reflect on new activity. The contract was tendered twice (incl. % in 2009 and 2012 because of high bids. Contract partially financed under AF2, and achievement) Bridge completed on June 30, 2014. Indicator 11 : Bridge Management system in place and operational by the end of FY2008 Value Yes by end of (quantitative No Yes FY2012 or Qualitative) Date achieved 03/05/2007 06/30/2008 05/14/2010 06/30/2014 Comments Indicator added AF1 to reflect new activity. Target extend to FY2012 under AF2. (incl. % Revised Target achieved. achievement)

G. Ratings of Project Performance in ISRs

Date ISR Actual Disbursements No. DO IP Archived (USD millions) 1 05/04/2004 Satisfactory Satisfactory 0.00 2 09/13/2004 Satisfactory Satisfactory 3.00 3 12/02/2004 Satisfactory Satisfactory 3.00 4 04/08/2005 Satisfactory Satisfactory 4.46 5 07/05/2005 Satisfactory Satisfactory 5.57 6 11/09/2005 Satisfactory Satisfactory 6.05 7 06/08/2006 Satisfactory Satisfactory 15.42 8 11/07/2006 Satisfactory Satisfactory 19.85

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9 05/09/2007 Satisfactory Satisfactory 27.34 10 10/26/2007 Satisfactory Satisfactory 33.95 11 04/24/2008 Moderately Satisfactory Moderately Satisfactory 40.53 12 11/01/2008 Moderately Satisfactory Satisfactory 51.51 13 05/05/2009 Moderately Satisfactory Satisfactory 53.39 14 11/12/2009 Moderately Satisfactory Satisfactory 57.02 15 12/08/2009 Moderately Satisfactory Satisfactory 57.02 16 06/11/2010 Moderately Satisfactory Satisfactory 60.34 17 04/23/2011 Moderately Satisfactory Moderately Satisfactory 60.38 18 11/16/2011 Moderately Satisfactory Moderately Satisfactory 60.38 19 06/07/2012 Moderately Satisfactory Moderately Satisfactory 62.58 20 03/27/2013 Satisfactory Moderately Unsatisfactory 72.29 21 05/18/2013 Satisfactory Moderately Satisfactory 76.54 22 12/15/2013 Satisfactory Moderately Satisfactory 86.11 23 04/20/2014 Moderately Satisfactory Moderately Satisfactory 88.04

H. Restructuring (if any)

ISR Ratings at Amount Board Restructuring Restructuring Disbursed at Reason for Restructuring & Key Approved PDO Date(s) Restructuring Changes Made Change DO IP in USD millions Delays related to procurement of civil works. The project closing 12/13/2006 S S 20.42 date was extended by one year from June 30, 2007 to June 30, 2008. AF1 helped finance costs associated with completion of additional project activities resulting from flood damage to bridge and culvert infrastructure (108 culverts in three provinces 04/12/2007 S S 25.00 and four National Parks, and construction of Chiawa Bridge on the Kafue River). This restructuring allowed the extension of the closing date by two years from June 30, 2008 to June 30, 2010. AF2 proposed the rehabilitation of a section on the Lusaka-Chirundu Road. Some indicators were also 05/14/2010 MS S 60.34 revised and two were added. A two years extension of the closing date from June 30, 2010 to June 30, 2012 was granted to allow for

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ISR Ratings at Amount Board Restructuring Restructuring Disbursed at Reason for Restructuring & Key Approved PDO Date(s) Restructuring Changes Made Change DO IP in USD millions the completion of these additional works. Extension of two years from June 30, 2012 to June 30, 2014 to allow 04/02/2012 MS MS 62.58 completion of Chiawa Bridge and of 12 km of Lusaka-Chirundu road.

I. Disbursement Profile

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Country background

1. At the time of appraisal, Zambia was just recovering from a period of very poor economic performance in the years 1991-1998, due to a combination of inadequate national policies, low international commodity prices, decades of economic turmoil and continuing regional instability. With an economy heavily dependent on revenues from copper exports, the significant drop of copper price on world market in the 1980’s had a serious impact on the country. During that period, the Gross Domestic Product (GDP) fell by an average of 0.2 percent per year, and by 1989, the debt to GDP ratio was 200 percent, opening a period of hyperinflation and the collapse of the Zambia currency.

2. In the 1990’s, with a change of government and the introduction of a multi-party political system, Zambia implemented a set of structural reforms and improved its economic management despite serious fiscal and capacity constraints. The country benefited from the Highly Indebted Poor Countries (HIPC) debt relief program in 2001, resulting in the fall of inflation (from 93 percent in 1991 to 16 percent in 2002), and with the help of increasing copper prices, the country posted positive real GDP growth again, which averaged five percent per year in 2003 and 2004.

3. In this context, the objective of the World Bank Country Assistance Strategy (CAS) dated November 1999 was to sustain positive growth rates and show that economic reforms were beginning to bring tangible, measurable benefits to the population and allowed a reduction of poverty in the near future. In 2004, around two-thirds of Zambians were still living in poverty, and 50 percent of rural households were living more than twenty five kilometers from a market.

4. Road transport was identified as a major factor within the Government's overall policy framework to enhance economic development and growth. Similarly, the World Bank CAS states that transport would contribute to two of its strategic objectives: (a) removing constraints to sustainable, diversified growth, improving governance, and (b) increasing access to basic services and direct poverty interventions.

Sector background

5. Most of the road network was built in the decade following Independence in 1964, at a time when Zambia had one of the most prosperous economies in Africa and was classified as a middle income country. Roads were primarily built to promote national unity and to ensure that all parts of the country were connected without taking into consideration the economic costs of such massive investments.

6. Zambia has one of the highest lengths of road network in Africa per person and per dollar of GDP1 and the highest proportion of over-engineered roads2. At the time of appraisal, the national network consisted of approximately 37,000 km of gazetted road, with over 20,000 km classified as trunk, main and district roads, and the balance consisting of feeder (rural district), urban and parks (tourist) roads. Maintaining such a length of road network proved challenging and costly - especially following the sharp economic decline that hit the economy prior to and in the 1980’s. Maintenance funding was therefore negligible between the 1970’s and mid 1990’s, which resulted in a network with 51 percent of main and district roads and 90 percent of feeder roads in poor condition in 19953.

7. In the early 1990’s the Government eventually took action to address the main backlog of maintenance, which were due to both institutional and financial inefficiencies. The country signed up to the World Bank led Road Maintenance Initiative (RMI) in 1994, and introduced a fuel levy the proceeds of which were earmarked for road maintenance and channeled through a newly established Road Fund.

8. The Government drew up the first Road Sector Investment Program (ROADSIP-I) outlining the rehabilitation and upgrading needs over the period from 1997 to 2007. This planning tool also helped mobilize much needed support from international donors. Among others, the World Bank provided support through a US$70.0 million Road Sector Investment Program Support Project (ROADSIP – 1998 to 2005) that aimed at: (a) reforming the road sector policy and institutional framework; (b) strengthening the road sector financing; (c) strengthening the local construction and consulting industry; and (d) addressing the road maintenance and rehabilitation backlog.

9. With the support of the World Bank and other Cooperating Partners, the Government adopted in May 2002 a Transport Policy which committed to pursue, in the road sector, the following three main strategic objectives: (a) ensuring an effective coordination of the road sector investment program and the correct prioritization of resources, (b) implementation of policy on road transport and traffic management and road safety and (c) improving rural access and mobility. These policy objectives were to be translated in a follow up investment program, ROADSIP II covering the period 2004 to 2013. The World Bank designed the Road Rehabilitation and Maintenance Project (RRMP) to support the achievement of ROADSIP II objectives.

Rationale for Bank Assistance

10. Since 1991, the Bank has been successfully engaged in the transport sector in Zambia. It has supported the Government both through direct sector work and capacity building as well as provided technical assistance in formulating and implementing institutional and policy reforms Road Management Initiative (RMI) and Rural Travel and Transport Program (RTTP) and ROADSIP I.

1 Raballand, G. and Whitworth, A. (2012). The crisis in the Zambian Road Sector, Zambia Institute for Policy Analysis and Research (ZIPAR). 2 Gwilliam K. et al. (2009). The Burden of Maintenance: Roads in Sub-Saharan Africa, Africa Infrastructure Country Diagnostic Background Paper 14, The World Bank 3 World Bank 1997:12.

11. The RRMP was conceived as a three- phased Adaptable Program Loan (APL) to provide support for the implementation of the ROADSIP II program. This ICR relates to the work carried out under APL1 and its two Additional Financings (AF).

Table 1: Indicative Financing Plan APL Indicative Financing Plan Estimated Implementation Period Phase IDA Percentage Others Total Start Date Closing Date (US$ Mil) (US$ Mil) (US$ Mil) APL1 50.00 13.1 330.90 380.90 07/01/2004 06/30/2007 APL2 70.00 20.3 275.50 345.50 07/01/2007 06/30/2010 APL3 70.00 18.7 303.80 373.80 07/01/2010 06/30/2014 Total 190.00 910.20 1100.20

1.2 Original Project Development Objectives (PDO) and Key Indicators

12. The original PDO as stated in the Development Credit Agreement is to support the Borrower in implementing the first three years (2004-2007) of the Road Sector Investment Program (ROADSIP II), including: (a) preserving its public core road network in support of sustainable economic growth and diversification strategy; (b) development and then maintaining of institutional capacity for the efficient, equitable and financially sustainable management of the public road infrastructure and road safety; (c) extension of urban and rural transport infrastructure and services for increased accessibility; and (d) extension of local community involvement in the management of selective road infrastructure as well as in prioritization of investments.

13. The Government and International Development Agency (IDA) agreed to measure the project performance at the outcome level against the following key performance indicators, which focus on road improvements and completion of some institutional changes: (i) Increase the coverage of core road network under sustainable routine maintenance program. (ii) Improve the quality of core road network for paved and unpaved roads. (iii) Increase domestic funding for the total road budget. (iv) Put in place and operate a system for recording of road accidents.

14. The key performance indicators at the intermediate outcome level for each component of the project are detailed in Section F of the data sheet along with a discussion of their appropriateness in Section 2.3.

1.3 Revised PDO and Key Indicators, and reasons/justification

15. The PDO was amended to reflect the emerging needs at activity level, improve measurability, and adjust the overall scope of the project. The Second Additional Financing (AF2) approved on October 14, 2010 amended the PDO on the basis of the need to shorten it “for improved clarity and measurability”. The number of objectives were indeed reduced from four to three, as follows: “The objectives of the Project are to support the Recipient in implementing the Program, including: (a) development of the institutional capacity for sustainable management of public road infrastructure and road safety; (b) preservation of road assets in targeted transport

corridors; and (c) rehabilitation and construction of targeted transport infrastructure”. It should be noted that the second objective (b) refers to “targeted corridors” in place of “core public network”, which reflects the actual scope of activity while the latter included parts of the core road network over which the Project had no influence. The third revised objective (c) drops reference to “accessibility and rural transport services, and community transport infrastructures” which could be seen as a reduction of the scope of the project. However, the addition of PDO level Key Project Indicators (KPI) on accessibility monitors this impact. The fourth original objective was dropped. The motivation for the decision has not been fully discussed in the Restructuring Project Paper.

Table 2: Changes to PDOs Original PDO Revised PDO (after AF2) (a) Preserving its public core road network in support (a) Development of the institutional capacity for of sustainable economic growth and diversification sustainable management of public road strategy; infrastructure and road safety (b) Development and then maintaining of (b) Preservation of road assets in targeted institutional capacity for the efficient, equitable and transport corridors financially sustainable management of the public road infrastructure and road safety; (c) Extension of urban and rural transport Dropped infrastructure and services for increased accessibility; (d) Extension of local community involvement in the Dropped management of selective road infrastructure as well as in prioritization of investments. (c) Rehabilitation and construction of targeted transport infrastructure

16. Outcome level indicators were modified twice. Two outcome level indicators were added at the time of the First Additional Financing (AF1) on March 29, 2007 to reflect and monitor progress on the added interventions in the four national parks and on selected river crossings: (a) Number of visitors accessing the four rehabilitated national parks before and after project intervention and (b) Proportion of rural population with access to re-instated all-weather river crossings. At the time of AF2, some targets were adjusted to reflect the new activities added. Lastly, core indicators were introduced both at the project outcome and intermediate outcome levels as required by corporate guidelines. See Annex 2 table 2.4 for details of the revisions to PDO-level indicators and targets.

1.4 Main Beneficiaries

17. The project’s direct beneficiaries were commercial and social road users of the core road network in the whole country, the local communities, and the supported Agencies. The benefits of improved road condition through improved rehabilitation and maintenance over the whole core road network provided better economic and social opportunities (such as access to markets, health services, education and information). By lowering transport costs, the project was expected to contribute to a reduction of consumer prices and to an increase in farm gate price for farmers. The local contracting and consulting industry was able to access contract opportunities, and provided job opportunities for local residents for road rehabilitation works. Overall, the

improved road safety programs was expected to benefit in particular the poor in both rural and urban areas, as they constitute the bulk of pedestrians and suffer disproportionately more from road accidents. Lastly, the project benefited the three recently created public agencies: Road Development Agency (RDA), National Road Fund Agency (NRFA) and Road Transport and Safety Agency (RTSA) as well as Ministry of Transport, Works, Supply and Communications (MTWSC), Ministry of Local Government and Housing (MLGH) and the National Construction Council (NCC) through technical and management capacity building.

1.5 Original Components

18. The project was approved by the Board on March 9, 2004 and consisted of four main components:

Component 1: Civil Works for Road Maintenance, Upgrading and Rehabilitation (US$ 283.78 million, IDA Financing US$43.50 million – actual US$75.80 million). This component was designed to focus on the priority civil works needs for road maintenance and rehabilitation for the period of 2004-07 within the core road network. The program supported ongoing road maintenance and rehabilitation works, and included inter-territorial trunk, territorial main, district roads, primary feeder roads, urban roads, and tourist roads in the country.

Component 2: Engineering and other Technical Services (US$34.98 million, IDA Financing US$2.00 million – actual US$7.20 million). Technical assistance for carrying out feasibility studies, engineering design and supervision of maintenance and rehabilitation works for Component 1 and to provide support to complete the preparatory activities for the next phase.

Component 3: Institutional Development and Capacity Building (US$48.49 million, IDA Financing US$3.40 million – actual US$5.90 million). Technical assistance and training in the areas of policy support, implementation support, and institutional development. The strategic focus of the project was to provide support to the Government in implementation of the Transport Policy and the new institutional framework including the creation of three new agencies in the road sector. The main elements of the component included: Policy Support, Implementation Support, Institutional Development, and Monitoring and Evaluation.

Component 4: Accessibility and Mobility Improvement: (US$13.61 million, IDA Financing US$1.l0 million – actual US$1.10). This component was aimed at providing continued support for improving physical access for the poor in order to promote their economic and social development. The main sub-components included Community Transport Infrastructure (CTI), Intermediate Means of Transport (IMTs) and Canals and Waterways.

1.6 Revised Components

19. The project components were not revised but changes were made at the sub-component level, with some cancellation or addition of activities from the original design as discussed in section 1.7 below.

1.7 Other significant changes

20. Restructurings. AF1 (Cr. 38661-ZA) was approved on March 29, 2007 to finance flood damaged transport infrastructure (selected priority river crossings in the Northern and Luapula Provinces and in Four National Parks) for an amount of US$25 million and became effective on August 21, 2007. The Bank’s initial response was to prepare a stand-alone project but this option was revisited following the Quality Enhancement Review meeting of August 24, 2006 which advised for the Additional Financing approach given its simplicity, speed of processing and because the general design and implementation modalities of RRMP would be utilized. AF2 (Cr. 4821-ZM) to finance unanticipated cost overruns associated with the construction of Chiawa Bridge and to scale up the project by rehabilitation of another road section (Lusaka– Chirundu) was approved on October 14, 2010, in the amount of US$15 million (of which US$10.0 million was from the Crisis Response Window and US$5.0 from IDA) and became effective on September 22, 2011. Both of these AFs were approved by the Board of Directors.

21. Scope and scale. The two AFs mentioned above led to the modification of the scope and scale of the project. The scope of Component 1 was extended under AF1 to include the reinstatement, rehabilitation and improvement of about 180 small river crossings in three Provinces (Northern, Luapula and Copperbelt) and in four National Parks, and the construction of the Chiawa Bridge on the Kafue River. Following a recommendation at mid-term review (MTR), two activities were cancelled under AF1: (i) the upgrading of non-core roads because the road re- classification study had not been launched at the time of MTR, the team deemed impossible to complete the ensuing work during the project timeframe; (ii) the proposed road safety and environmental management program under Component 1 was covered under Component 2. Under the AF2 the scope of the project was extended, to include the rehabilitation of a further 12 km of Lusaka -Chirundu paved road.

22. Implementation Schedule. The original project duration of three years from July 1, 2004 to June 30, 2007, was extended four times, by seven years, total, to June 30, 2014. The credit was first amended on December 13, 2006, following the MTR to extend the closing date by one year until June 30, 2008 to complete activities delayed by the procurement of civil works. On April 12, 2007, a second amendment extended the project by two years until June 30, 2010 to allow the completion of activities funded under AF1. The Credit was amended a third time on May 14, 2010 for a two years extension of activities funded under AF2. This was due to delays in the construction of the Chiawa Bridge caused by insufficient funding and the uncompetitive bids received in May 2009 for the construction of the bridge. The fourth extension was approved on April 2, 2012, for two years to allow the completion of Chiawa Bridge and of the 12 km of works on the Lusaka- Chirundu road.

23. Implementation arrangements. The project started with the arrangements in place for the implementation of ROADSIP project, with overall responsibility for coordination and management of the Project bestowed to the National Roads Board (NRB). When the three new Agencies were deemed operational in 2006, these responsibilities were transferred to NRFA under the AF1.

Table 3. Summary of Project Restructurings No Type of Approving Restructuring Authority and Date of Approval Major Changes Reasons for Changes

1 Level Two December 13, 2006 Extension of the closing date by Delays related to procurement of one year from June 30, 2007 to civil works. June 30, 2008. 2 Level One/ Approved by the Additional Financing of The first Additional Financing Additional Board on April 12, US$25 million helped finance costs associated Financing 2007 Extension of the closing date by with completion of additional two years from June 30, 2008 project activities resulting from to June 30, 2010. flood damage to bridge and culvert Addition of two PDO indicators infrastructure (108 culverts in three provinces and four National Parks, and construction of Chiawa Bridge on the Kafue River). 3 Level One/ Approved by the Additional Financing of US$15 Second Board on May 14, million Additional 2010 Financing Extension of the closing date by two years extension from June 30, 2010 to June 30, 2012 was The second Additional Financing granted to allow for the proposed the rehabilitation of a completion of these additional section on the Lusaka-Chirundu works. Road. PDOs were revised and number reduced from four to three. 5 PDO indicators were revised, one dropped, and one added.

4 Level Two Approved by Extension of the closing date by To allow completion of Chiawa Regional Vice- two years from June 30, 2012 Bridge and of 12 km of Lusaka- President on April to June 30, 2014. Chirundu road. 2, 2012 Four PDO indicators were revised.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

(a) Soundness of the background analysis

24. RRMP built on the achievements of The Road Management Initiative (RMI) in the 1980’s, the Rural Travel and Transport Program (RTTP) and the Road Sector Investment Program Support Project (ROADSIP – 1998 to 2005). The ROADSIP project was financed by the Bank and aimed at: (i) reforming the road sector policy and institutional framework; (ii) strengthening the road sector financing; (iii) strengthening the local construction and consulting industry; and (iv) addressing the road maintenance and rehabilitation backlog. RRMP was conceived to support and

improve the outcomes of ROADSIP (the overall outcome was assessed as Satisfactory), by supporting the establishment of the three newly created Road Agencies, while also continuing the institutional reform agenda, in particular with regard to the financing of the sector.

25. Project design was informed by lessons learned from past operations such as the need to strengthen the local capacity in the construction industry. Under ROADSIP, the poor performance of the local construction industry had created major delays and resulted in higher than expected construction costs. As a consequence, RRMP was designed to include support to the National Construction Council (NCC) to strengthen construction industry capacity. Also, previous operation reported on the very poor performance of M&E in the road sector, and therefore RRMP rightly introduced the development of a centralized M&E system for the road sector as a critical output.

26. The Quality at Entry Assessment rated the project as Satisfactory. Strategic Relevance and Approach and Policy and Institutional Aspects were rated Highly Satisfactory, while Implementation Arrangements were rated Moderately Satisfactory. The excellent collaboration with other donors was noted as well as the strong commitment from the Borrower (through the Zambia National Task Force). The review panel highlighted the absence of clear responsibility for carrying out Monitoring and Evaluation, the fact that the baseline data was not available and that the implementation and procurement plans were not ready at Board presentation. The QEA rating seems over estimated and did not take into account the fact that not all PDOs were connected to outputs directly expected from the project but were rather reflective of national ROADSIP II program.

(b) Assessment of the project design

27. Ambitious and complex project design. The project objectives were ambitious and targeted too many areas of interventions. As a result the PDO lacked clarity and reflected more a collection of objectives than a single simple objective to which all project outcomes would contribute. There was also some disconnect between objectives and activities at the design stage. For instance, one of the PDO indicator’s aspects “increase coverage of Core Road Network (CRN) under sustainable routine maintenance” does not relate directly to an activity financed by the project. Similarly, the project’s theory of change was not robust as it was expected that capacity building within the road sector agencies would improve rationalization of road investments, and hence result in redirection of sufficient resources towards the maintenance of the road network in general.

28. The choice to finance the operation through an Adaptable Program Lending (APL) was highly relevant. The project aimed at supporting a 10-years road program (ROADSIP II) and the APL tool provided the adequate progressive and phased support to the Government program. One may discuss the design of the Program triggers4 because only some of them are linked to

4 The APL triggers for Phase 2 are : (i) the three agencies NRFA, RDA, and RTSA having their own Board of Directors, comprising private and public sector representatives, are established and fully functional one year before APL 1 closing; (ii) NRFA is able to meet 40% of total road expenditures incurred on routine and periodic maintenance and rehabilitation from domestic resources by 2006; (iii) Satisfactory implementation of the road safety plan; (iv) The

outputs resulting from the project activities. As such, most relate to institutional achievements and less on physical progress on road improvements works, which does not reflect the bias of the Results Framework toward physical achievement.

29. The implementation arrangements were not adequate for supporting new institutions. The project aimed at supporting the setting up of the three agencies (NRFA, RDA and RTSA) while giving them the responsibility of implementing the project. It would have been more appropriate to create a separate Project Implementation Unit (PIU) outside of these Agencies, primarily responsible and accountable for the projects activities, including capacity building in the three Agencies. At the close of the project, these agencies have not reached the expected professional standards, and still require ad hoc technical assistance. It has to be admitted also that saddling the agencies with the implementation responsibility in itself would have instilled a sense of project ownership and some residual specialized skills.

30. The Government’s commitment was satisfactory. The Government recognized RRMP as a critical vehicle for implementing its Transport Strategy, as further defined in the Transport Policy of May 2002 and the Letter of Sector Policy of December 2003. The design of the project was discussed and agreed with the Cooperating Partners, through the Donors Forum for the Transport Sector established in 2000 to facilitate such coordination. The relatively short duration of the preparation phase - 15 months – between the Concept Review Meeting on December 12, 2002 and the Board Approval on March 9, 2004, illustrates that no major issues arose, thanks to the commitment from Government.

(d) Assessment of risks

31. The assessment of risk at appraisal was adequate and mitigation measures were identified. Most risks related to the Government’s commitment to enact and effectively implement the legislation setting up the three new Road Agencies, the timely release of counterpart funding for the agreed activities and its overall lack of efficiency and transparency. The mitigation measures proposed did not prove sufficiently effective to address the risks that indeed became reality during implementation.

2.2 Implementation

32. The project was approved on March 9, 2004 and was declared effective on June 15, 2004 after meeting effectiveness conditions.

33. Major delays were experienced for all activities, both for setting up the institutional reform and for the procurement and realization of civil works. From the outset, the project was delayed because some issues from ROADSIP project remained unresolved, in particular

annual administrative costs for all these agencies shall be less than the 5% maximum funding limit of the NRF; and (v) Satisfactory completion of all preparatory activities for the planned Phase 2 investments.

concerning the management structure for the road sector and the financing of maintenance (Road Fund issues). As a result, the appointment of Board Directors in the three Implementing Agencies took much longer than expected and delayed ownership of the project and consequently, the actual implementation of activities. Engineering designs and bidding documents were not ready at project effectiveness, due to the lack of in-house capacity at RDA. Additional delays were experienced at procurement stage, because higher bids than expected were received for Chiawa Bridge for instance. Lastly, adverse climatic conditions, such as the massive floods in 2006 also contributed to more delays. These delays, which justified several project closing dates, also provided further time for the project to achieve or exceed its targets related to civil works.

34. Audit of the road sector by the Office of the Auditor-General (2009-2010). The Government of Zambian conducted a major audit of the road sector between February 2009 and September 2010, following allegations of over commitment of funds. The audit, managed by the Office of the Auditor-General, revealed serious governance weaknesses that resulted in misappropriation of resources for Government-funded projects and sub-optimal quality of work. RRMP funds were not concerned by such mismanagement. Following the Audit, Cooperating Partners froze assistance to the sector until the findings were made available. A large number of key staff at RDA, NRFA and RTSA including those assigned to implementation of Bank-funded activities was dismissed in 2009 and the Agencies were not able to recruit most of the replacement staff before October 2011. Over this period (2009-2011), the project was impacted by this decrease in capacity at the level of implementing agencies which resulted in a slowdown of implementation.

35. To address the issues identified by the Audit, the project supported the adoption, implementation and monitoring of the Road Sector Governance Plan and of a Financial Management Improvement Plan. To improve the institutional capacity, and to support project implementation, the Bank and Government agreed to the recruitment of Technical Assistance in institutional policy development work, engineering, and procurement under APL Phase 2. In addition, the incoming Government, in December 2011, implemented further staff dismissals - not linked to the Audit - from among the remaining staff, directly impacting the implementation capacity of RDA.

36. The Mid-Term Review. A mid-term review took place from June 26 to July 14, 2006 and noted an overall delay of two years within most activities due to challenges on procurement. At that stage, the Monitoring and Evaluation (M&E) consultant had just submitted its inception report on the development of a national M&E framework, two years late. The MTR report also noted major delays in the release of funds by the Government to support ROADSIP II (amounting to only six percent of the required commitments per year). The MTR mission recommended the cancellation of two activities under Component 1. Overall, the MTR was not used as an opportunity to take major corrective actions to improve project implementation performance with the hiring of additional technical assistants to implementing agencies and tailored training in procurement, financial management and monitoring and evaluation.

37. Restructurings. In total, the project has been through four restructurings, with two AFs that has also led to changes in the results framework on at the sub-component level. Restructurings have been used to adjust the scope of activities: (a) to add new activities, such as additional civil works (river crossings, Chiawa Bridge, and a section of the road link from Lusaka to Chirundu) or

complementary technical assistance (Bridge management Unit); (b) to adjust the result framework and at the same time reduce the scope of activities (original Objective 3); (c) to extend closing dates by seven years. Overall restructurings have not been used to increase project efficiency and improve quality of implementation with sufficient technical and fiduciary support to implementing agencies.

38. The activities added under AF1, at the request of GRZ are accountable for major implementation delays and eventually led to AF2. The Bank initial response to GRZ was to prepare a stand-alone project but a Quality Enhancement Review held on August 24, 2006 found that an AF to the ongoing RRMP would be a more efficient, simple and rapid process for the Bank and GRZ.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

39. M&E Design: The original design had four PDO level indicators, and nine intermediate outcome level indicators. Most of them were straightforward and connected to the activities but two PDOs, “(c) extension of urban and rural transport infrastructure and services for increased accessibility”; and “(d) extension of local community involvement in the management of selective road infrastructure as well as in prioritization of investments” were not monitored at the outcome level. Indeed, the result framework focused on the achievement of civil works and disregarded the levels of services and accessibility, or community involvement. The latter was also absent at the output level (this was solved by deleting the PDO through a Restructuring). Overall, the Results Framework, was well designed to reflect achievements on physical outputs, such as the improvement of road quality and the construction of IMTs, and the achievement of maintenance program targets, but could have been refined to better monitor results on the institutional objectives.

40. M&E Implementation and Utilization: The original M&E implementation arrangements were never set up and the interim arrangement became permanent and suboptimal. Under the original framework, the plan was to have the Ministry of Communications and Transport (MCT) as the entity responsible for managing the M&E for the whole road sector, while NRFA was required to provide financial resources for data collection. Since MCT needed time to develop its M&E system, an interim arrangement was agreed by which each agency would collect data with their own resources and report to NRFA that would ultimately compile and analyze data. At project closing, MCT (by then renamed MTWSC) had not developed its M&E system and none of the Agencies had the appropriate capacity to report qualitative and timely information to NRFA, despite specific capacity support received from the European Union (EU) in 2007 and from the Danish International Development Agency (DANIDA) from January 2010. It should be noted that the weakness of M&E in Zambia road sector was flagged as major area of concern in previous Bank operations, at RRMP Quality Entry Assessment. As such, the absence of an operational M&E system by the end of project is a significant shortfall for RRMP.

2.4 Safeguard and Fiduciary Compliance

41. Procurement. At project appraisal, a procurement assessment of the implementing agencies was carried out showing that procurement capacity had been built in the sector during ROADSIP

11 project and that appropriate arrangements and monitoring existed in all implementing agencies. A plan to mitigate risks was attached to the PAD. The project included procurement of a mix of large civil works and numerous smaller contracts and consultancies. Despite a positive assessment at appraisal, the implementing Agencies were not able to carry out procurement tasks and proved to be understaffed and without proper capacity/expertise. Delays in procurement were also caused by the lack of capacity at the level of bidders whom even required assistance from RDA to modify their bidding documents when requested. The Bank carried out annual post procurement reviews in order to ensure that acceptable standards were being observed. Despite close monitoring the Bank team has not been able to improve performance in Implementing Agencies, as additional training and closer supervision may have been necessary. The procurement ratings in the Implementation Status reports (ISRs) have varied from Moderately Satisfactory (MS) to Satisfactory (S) at 2014.

42. Financial Management. Financial Management policies were complied with. NRB and later NRFA was the entity responsible of all aspects of financial management including submitting all financial reporting. Its performance was satisfactory throughout implementation, despite the absence of an internal audit function. All interim and audit reports were submitted without major delay, but shortage of lower level accounting staff in 2010 resulted in some delays in the release of payments to contractors. Consequently, improved staffing was part of the Financial Management Improvement Action Plan agreed to between the Bank and Government at the time of preparing AF2.

43. Environment. The project was rated Environmental Category “B”. The project worked with the environmental management unit established under ROADSIP project, located in the Roads Department. The project prepared Environment Impact Assessments (EIAs) and Environment Management Plans (EMPs) to address the requirement of (OP/BP 4.01) and laid out mitigation measures for the identified minor environmental issues. The project also prepared and cleared an Environmental and Social Management Plan.

44. Social Assessment. All social safeguards documents and instruments were prepared, reviewed, disclosed and cleared as per Bank’s policies and guidelines. A Resettlement Policy Framework was also prepared and disclosed before effectiveness in October 2003 as required by Involuntary Resettlement (OP) (BP 4.12). The project also triggered Natural habitats (OP/BP 4.04) and Cultural Property (OPN 11.03). A Resettlement Action Plan (RAP) of USD 3.5 million was prepared and implemented for 333 people, out of 57 households affected by the construction of Mufuchani Bridge. The RAP for Chiawa Bridge included four project affected people whose small business was relocated.

Table 4: Safeguards Instruments Prepared Environmental Safeguards Social Safeguards 1 Environmental Impact Assessment (EIA), Resettlement Policy Framework (RPF), disclosed October disclosed October 2003 2003 2 Environmental Procedures Manual, disclosed Abbreviated Resettlement Action Plan (ARAP) for the February 2007 Kasumbalesa border post, disclosed July 2006 3 EIA for Chirundu-Lusaka road, disclosed Resettlement Action Plan (RAP) for Mufuchani Bridge, February 2007 disclosed August 2007 4 EIA for Chiawa Bridge, disclosed May 2007 ARAP for Chiawa Bridge, disclosed June 2010.

2.5 Post-completion Operation/Next Phase

45. RRMP was designed as a ten-year APL program to be implemented in three consecutive phases with no overlap. RRMP Phase 2 was approved by the Board on September 2009, 62 months after the effectiveness of RRMP Phase 1, but 15 months before its AF2, 57 months before APL 1 closing date. RRMP Phase 2 is also facing major delays that required extension of the closing dates by two years, but latest assessment of the project performance shows that the project will accelerate implementation as most stumbling blocks have been addressed.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

46. The relevance of objectives is substantial. The overall program objective to stimulate economic growth and contribute to poverty reduction through investment in road infrastructure and adequate institutional and policy reforms remains highly relevant to the development priorities of Zambia in 2015. The RRMP project development objectives remain relevant to the second and third objectives of the Country Partnership Strategy for the Period FY13-16: (ii) Improving competitiveness and infrastructure for growth and employment; (iii) Improving governance and strengthening economic management. The backlog of maintenance has not been solved and the institutional capacity of the Government to manage its core road network needs continuous technical support.

47. The relevance of design and implementation is moderate. The complex project design is reflective of the negotiations between the Government and other Cooperative Partners which respective policy agenda were not initially aligned. By closing date, the design had been simplified. Implementation arrangements were not adequate for supporting new institutions. There were too many Implementing Agencies involved and the project should have devolved responsibilities to them progressively, rather than from the outset.

3.2 Achievement of Project Development Objectives

3.2.1 Achievement of the original PDOs by the second restructuring in 2007, when PDO indicators were modified Rating: Moderately Unsatisfactory

Objective 1: Development of adequate institutional capacity for effective, efficient, equitable and sustainable management of the public road infrastructure and road safety. Rating: Moderately Satisfactory

48. The three new Road agencies RDA, NRFA, and RTSA were established in 2005 and deemed staffed and operational by the end of 2006. However, no activity concerning Road safety objectives were carried out.

Objective 2: The preservation of the public core network. Rating: Moderately Unsatisfactory.

49. Two of the three major rehabilitations civil works were ongoing. Positive evolution of the quality of CRN was reported, with 64 percent of paved and 44 percent unpaved network in good condition but these results cannot be attributed to the project.

Objective 3: Extension of local community involvement in the management of selected road infrastructure as well as in prioritization of investments. Rating: Unsatisfactory.

50. No activities were completed under the project at the time of the second restructuring to involve local community in the management of local infrastructures.

Objective 4: Extension of urban and rural transport infrastructure and services for increased accessibility. Rating: Moderately Satisfactory

51. No works were completed at the time of the second restructuring. MLGH appointed a project coordinator and a proposed program for CTI was under discussion.

3.2.2 Achievement of the PDOs achievement by AF2 / third restructuring in 2010, when the PDOs were revised Rating: Moderately Satisfactory

52. Establishment of three Road Agencies. Completed. The agencies staff low technical capacity created challenges for implementation, and the dismissal of their Board in 2009 as a consequence of the Audit of the Road Sector, stalled progress and strengthening of capacity.

53. Road Safety: RTSA had contracted a consultant for the establishment of an accident database and was in the process of analyzing Requests of Interest for the construction of Road Safety School Park and Motor Vehicle Inspection Center.

Objective 2: The preservation of the public core network. Rating: Satisfactory

54. Rehabilitation of road section to a maintainable condition. The project’s targets were exceeded with the proportion of paved roads in good and fair condition increased from 58 percent to 90 percent and the condition of good and fair unpaved road network increased from 7 percent to 20 percent. By approval of AF2, Road Fund coverage of the core road network under the routine maintenance program increased from 19.5 percent to 34 percent and combined internal road budget increased from 27 percent to 84 percent.

Objective 3: Extension of local community involvement in the management of selected road infrastructure as well as in prioritization of investments.

Rating: Unsatisfactory

55. Involvement of local authority in the implementation and promotion of basic infrastructures. This objective derived from recommendation from ROADSIP experience for the promotion and implementation of IMTs. But the experience was not followed under RRMP as experience showed that such involvement created major interference in the selection process of roads, culverts and IMTs, resulting in the disregard of economic and social assessment criteria in favor of others, like political criteria. Therefore, the Team considered that it was not adequate to pursue this activity or to try to address the issue and dropped the objective under AF2, many years after completion of civil works.

Objective 4: Extension of urban and rural transport infrastructure and services for increased accessibility Rating: Satisfactory

56. This objective of the Community Transport Infrastructure program (CTI) was to improve accessibility to markets and essential services through small scale access improvements. This objective was fully achieved, although the component remained a pilot in the five districts (Chibombo, Kalabo, Mpongwe, Sinazongwe and Zambezi) and has not been scaled up as initially intended per the project design. Despite substantial delays (due to the preparation of contract packages, challenging mobilization to sites for contractors and heavy rains) and a global variation order of 120 percent, the project has carried out 15 km of spot improvements, constructed 131 culverts (over 524 m) and rehabilitated one canal (over 1.4 km) by 2010. Traffic counts on three roads in Chibombo, Mpongwe and Sinazongwe districts show major increase of traffic of 200 percent or more.

3.2.3 Achievement of the revised PDOs achievement by the project closing date in 2014 Rating: Moderately Satisfactory

Objective 1: Development of the institutional capacity for sustainable management of public road infrastructure and road safety Rating: Moderately Satisfactory

57. Institutional Capacity Building: The Boards of RDA, NRFA, and RTSA were only reconstituted in 2011. During this period the Agencies were managed by a Chairman without the check and balance offered by a fully established Board. Overall, capacity of the three road agencies supported by the project has not been strengthened in a sustainable manner as intended by the project, although RDA showed notable diligence in its role to supervise the construction of Chiawa Bridge and rehabilitation works carried out in 2014.

58. Road Safety Improvement: RTSA has developed the Road Accident Information System in 2014 but its rolling out was deferred to the second phase of the project. Similarly the project intended the construction of a mechanized motor vehicle inspection center but this activity did not take place.

59. High Level Policy Review of the Road Sector Institutional Framework: This activity was added in 2012 and replaced the intended institutional study and performance review of MTWSC. The activity was not carried out before project closing and was deferred to the second phase of the project.

60. Increase in domestic funding for total road budget: The target of increasing to 66 percent of domestic funding the road budget was not met but reached 55 percent in 2014 from a level of 27 percent in 2004. It should also be noted that road user revenues have increased from zero in 2004 to about US$100 million in 2014.

Objective 2. Revised as: Preservation of road assets in targeted transport corridors Rating: Satisfactory

61. Condition of Chirundu – Lusaka Road. Rehabilitation works, including minor upgrading works, over the total 134.5 km road were divided in four sections and an escarpment section and were completed in 2013. The target was exceeded (109 percent) with 89 percent of the road in fair condition.

Objective 3. Revised as: Rehabilitation and construction of targeted transport infrastructure Rating: Satisfactory

62. Construction of selected Priority River Crossings: 103 river crossings were built in Luapula, Northern, Eastern, North Western and Copperbelt Provinces and four national parks before AF2.

63. Construction of Chiawa Bridge (renamed Michael Sata) on the Kafue River. Works started in June 2012 and were completed in June 2014. The works started with long delays because the bid prices originally received were too high (US$17.2 million against an expected US$8.7 million). This required a cancellation of the procurement process, a review of the designs and rebidding at a revised cost estimate of US$14.7 million. The financing gap of US$6.0 million was financed by the AF2 in 2010.

Objective 4. Dropped.

Attribution: co-Financiers and external factors. 64. At the time of project preparation, several other donors in addition to the Bank were keen to support the ROADSIP II with likely commitments amounting to US$ 141 million, but the funding architecture had not been finalized. The donors listed in the PAD were: DANIDA, the European Development Fund, the Japan International Cooperation Agency, Germany (through the Kreditanstalt Fur Wiederaufbau), the Nordic Development Fund, and the Norwegian Agency for Development Cooperation. During the implementation, these donors, which later included Organization of the Petroleum Exporting Countries (OPEC), provided their support to ROADSIP II and not to RRMP and as such, the financing did not strictly constitute parallel financing. The CPs met regularly among themselves to discuss transport sector developments and consulted with government on sector policy issues. In general, the CPs operated with a high degree of independence from each other. 16

3.3 Efficiency

65. Efficiency is rated substantial. The PAD included a cost benefit analysis for three main road sections showing an Economic Rate of Return ranging from 20 percent to 25 percent. All initial activities were completed by 2009, with reasonable delays. Five additional years were needed for the completion of new activities added under AF1 in 2007. This ICR calculated efficiency at completion only and did not run calculation as of AF1 and AF2 due to limited availability of data.

66. At completion, the Internal Rate of Return was calculated for 95 percent of project investment. Overall, the Project achieved higher IRR than expected because the project costs were lower than estimated for road works and there was no major cost overrun despite major delays. Second, traffic increased substantially during project implementation and the actual traffic volumes were much higher than the projections, especially, heavy vehicle traffic. However, completion of Chiawa Bridge was poorly efficient, with construction costs much higher than expected. The bridge was completed on June 2014 and traffic was low at the time of the ICR mission. Because access roads are poor and under rehabilitation, it is expected that traffic volume will increase in the coming months, once access will be easier. The economic rates of return are high at 30 percent to 60 percent for road works and at 12 percent for Chiawa Bridge. Regarding CTI, the main lessons is that following the completion of pilot phase, there was no funding available for the maintenance of the newly built infrastructure. Therefore, most of the facilities have deteriorated since 2009.

Table 5: Road Costs, IRR, Traffic Estimates Appraisal Completion

Base Traffic Cost estimate Base Traffic Actual cost IRR (%) IRR (%) year (AADT) ($ million) year (AADT) ($ million)

Chingola-Kasumbalesa (40 km) 2002 1,604 12.1 25.1% 2005 1,994 10.29 33.1%

Kafulafuta-Luanshya (45 km) 2003 3,031 9.1 13.6-26.1% 2006 4,085 7.30 63.4%

Lusaka-Chirundu Escarpment (34 km)* 2007 902 17.5 5.5%-5.8% 2008 1,054 8.03 29.8%

Lusaka-Chirundu Link 3 (20 km)* 2007 1,343 17.2 6.8-10.8% 2014 963 10.7

Chiawa Bridge 2008 36 6.0 15.4% 2014 160 11.14 12.%

* Based on the Final Design Report Chiawa Chirundu Road Project.

3.4 Justification of Overall Outcome Rating

67. The overall Outcome Rating is Moderately Satisfactory, based on the ratings of achievement of original and revised PDOs and rating of efficiency.

Table 6. Assessment of the Overall Outcome Against Original Against Revised Against Revised Overall PDOs PDOs (2010) PDOs (2012) 1. Relevance of: a) High a) High a) High - a) PDOs, b) High b) High b) High b) design, c) Poor c) Poor c) Poor c) implementation 2. Achievement of Moderately Moderately Moderately the PDOs Satisfactory Satisfactory Satisfactory 3. Efficiency Not applicable Not applicable Moderately Satisfactory 4. Overall rating Moderately Moderately Moderately - Satisfactory Satisfactory Satisfactory 5. Rating value 4 4 4 -

6. Weight (% 83% 2% 15% disbursed before/after PDO change 7. Weighted value 3.32 0.08 0.68 4 (5x6) 8. Final Rating - - - Moderately Satisfactory Satisfactory=5; Moderately Satisfactory=4; Moderately Unsatisfactory=3; Unsatisfactory=2

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

- Poverty Impact. The project did not measure its impact on poverty reduction, but economic and social baseline survey was conducted in the area supported by CTI component. A post survey remains to be done. However, most investments are in inter-urban and rural areas, where literature shows that such investments have general poverty reduction impact on communities by reducing traveling time, providing opportunities for income generating activities, and increasing access to agricultural markets for farmers.

- Gender Impact. In the absence of robust data, it is difficult to confirm if the policy and strategy of the roads sector provided overall equal opportunities of employment for male and female workers on road rehabilitation works.

- Social Development Impact: The project did not measure Social Development Impact. The roads were improved on existing alignments and did not have any negative impact on human settlements. However, similar projects in other countries have showed that access to schools, health centers, village markets, social services is generally increased by improved infrastructures and supports the development of commercial activities.

HIV/AIDS: The project financed an HIV/AIDS Task Team coordinator within MCT from 2004 to 2006 that conducted sensitizing campaigns for MCT staff based in the provinces. A five-year program to promote sexual behavior change in the transport sector, promote positive living among people with HIV/AIDS, and promote appropriate care, support and treatment was developed but not implemented due to the lack of funding.

(b) Institutional Change/Strengthening

68. One of the notable, albeit indirect, indicators of the project outcomes is the improved domestic funding for road maintenance. In 2012, six months before the penultimate project closing date, NRFA prepared a plan for future operations beyond the project, as required under Section 3.3 of the Development Credit Agreement for the project. According to the plan, Zambia recognizes the special challenge associated with road maintenance, noting that the annual requirement for routine and periodic maintenance of the core road network of about 40,000 km amounted to US$422 million. The fuel levy, one of the road user revenues, was capable of fully funding the cost of routine maintenance (estimated at US$35 million annually) as well as 31 percent of the periodic maintenance needs. This is a significant step especially in view of the predictability of routine maintenance funding and the potential to bridge the periodic maintenance funding gap from increased road user revenues.

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

4. Assessment of Risk to Development Outcome Rating: Significant 69. The project has revealed several problematic areas with potential risk impact: governance, low technical capacity, reluctance to prioritize maintenance over construction. The sustainability of project achievements in the rehabilitation or construction of infrastructures is likely to be impacted by the relative underperformance of the project in developing institutional capacity for an efficient and financially sustainable management of the public road infrastructure. Although the sector has achieved positive results in addressing governance issues, these achievement require qualified technical staff at the level of road agencies. On a political economy perspective, the mobilization of funding through the Road Fund is not a guarantee that the Government will prioritize maintenance over the extension of its road network. In the absence of a revised National Transport Policy that would clarify that the Government is prioritizing maintenance, the sustainability risk of Development Outcome remains significant.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

70. The Bank performance in ensuring quality at entry is rated Moderately Satisfactory. The Task Team ensured that the development objectives and project scope were consistent with the Government's PRSP and the Bank’s Country Assistance Strategy (CAS), and appraised the project in close coordination with the Borrower and Cooperating Partners. As mentioned before, the project scope was too broad and the Team may have been over optimistic on the capacity of the newly created agencies to take on their responsibilities. Lessons from past operations, such as the poor capacity of local construction industry in applying quality design standards and in carrying out proper supervision of contractors, the absence of an M&E system, and outstanding issues on the management structure of the road sector, could have led the Team to focus support on activities to address these weak areas, and more stringent supervision arrangement from the outset. In addition, one project objective (increase of funding for the road sector) and one intermediate indicator (routine maintenance) were not directly linked to project activities. The results reported are not attributable to the project. At effectiveness, baseline data was not established and no proper Monitoring and Evaluation system was put in place.

(b) Quality of Supervision

71. The Bank performance in ensuring quality of supervision is rated Moderately Satisfactory. The Bank supervision was regular through 23 supervision missions and with the presence in country of the last Task Team Leader from May 2013 until June 2014. Supervision aide-memoires were relatively extensive but sometimes inconsistent or incomplete in the reporting of results. It provided highlights on key issues to the client and to Bank management, yet most often reflecting slippages of activities and unmet deadlines. Regarding works and bidding processes of works, the Team was available to assist the borrowers but evidence suggests that it could have been more proactive in detecting the causes for procurement delays, pay more attention to the review of bidding documents and of engineering designs. The Bank team could have been strengthened with a governance specialist to help address the numerous and pronged lack of achievement regarding the institutional targets. Management has commended the team for persistently and effectively coordinating with other donors and building synergy in transport investment among stakeholders. It is not obvious if the Bank decision to include further activities through AF1 instead of a stand-alone project was adequate since major delays are attributable to these activities. The Bank team should be commended for commissioning Technical audits on civil works (Priority River crossings, Kafulafuta-Luanshya) to investigate possible shortfalls in supervision or on design.

72. Bank overall performance is rated Moderately Satisfactory consistent with the evaluation of each section above.

5.2 Borrower Performance

(a) Government Performance

73. The Government performance is rated Moderately Satisfactory. The Government demonstrated a strong commitment to the project during preparation. This support changed with the new Government in office in 2011 that led to a shift in the political agenda and to prioritizing construction over maintenance. CPs have been decreasing their support or opting out of the sector because of the lack of responsiveness and commitment of the Government to the Maintenance agenda. In addition, the Government commitment of project counterpart funding was not fully realized, and not paid on schedule, causing major delays in implementing the Resettlement Action Plan (RAP), and thus negatively impacting the overall project implementation timetable and costs. The Government is to be commended for addressing the governance issues identified by the Audit in 2009. Lastly, the Government managed the coordination of five Implementing Agencies in a challenging environment.

(b) Implementing Agency or Agencies Performance

74. Overall performance of the five Implementing Agencies (IAs) is rated as Moderately Unsatisfactory. NRFA, RDA, RTSA have performed poorly in implementing and monitoring project’s activities and in undertaking procurement of services and works. NRFA, in charge of coordinating financial management for the project, did not have the capacity to process payments to contractors in a timely manner, which created delays and serious problems with the projects suppliers. The Government commissioned an audit of the road sector in 2009 based on assumptions of mismanagement of resources (but not of Bank’s funds) that led to the suspension of activities and the need to reappoint IAs Boards. In summary, all IAs were not sufficiently prepared for the project with weak implementation and coordination capacity and showed a lack of ownership of the project activities. It is a telling example that as of October 2014, NRFA, MTWSC, RTSA, RDA and NCC had not formally appointed a Desk officer, yet being recommended by the Bank since 2009.

75. Borrower’s overall performance is rated Moderately Satisfactory consistent with the evaluation of each section above. Because the rating of the Borrower Performance is in the satisfactory range, while the rating of Implementing Agencies Performance is in the negative range, the overall Borrower Performance rating is influenced by the Outcome rating, which is in the positive range.

6. Lessons Learned

76. Institutional Reforms: A lesson learned is that establishment of new institutions requires more time than usually anticipated for transition, which may impact on project progress especially when the new institutions are set to become implementing agencies. Such implementation arrangements are probably overly ambitious in countries with overall weak institutions and implementation capacity. It is preferable to use or create a PIU whose role is to implement all

activities, or to coordinate IAs. PIU staff are generally accessible to IAs staff and this collaboration would be key in transferring knowledge.

77. Human Resource Capacity. Projects should rely on IAs’ internal expertise or when not available, offer training to develop it, instead of recruiting external consultant to do their job. It could have been more appropriate to monitor the capacity of the supported agencies to carry out the tasks that were expected from them under the project, such as preparing detailed engineering designs for roads, and undertaking bidding processes without contracting external consultants.

78. Use the Adaptable Program Lending (APL) instrument as a tool for deepening reforms: This instrument offered the appropriate flexibility and long-term engagement to support the implementation of a sectoral policy over a decade. It has since been replaced by the Series of Project instrument which offers similar advantages. In this project, the Phases should not have been designed to run in parallel, and should have been consecutive, to avoid both IAs and Bank team, focusing too much time on preparing the follow on operation rather than addressing current challenges, and to allow the learning of lessons from one phase to the next. It would have been appropriate with this project, to focus this first phase (2-3 years) of the project, to focus on creating capacity in the new Agencies and ensuring coordination amongst them, and having strong processes for works prioritization and capacity to manage complex bidding process, while launching small civil works. The second and third phases would later launch more complex and large rehabilitation and maintenance works.

79. Use of Additional Financing in place of stand-alone project. In this case, the project duration and overall efficiency has been affected by the activities added through AF1. While the additional activities and the AF1 were warranted, the capacity of IAs to undertake additional activities was not fully assessed. . It may have been more appropriate to initiate a stand-alone emergency project so as to forestall delays under the original project. This option provides flexibility to respond to the Government’s request without delays, and does not create additional burden on ongoing operations.

80. Monitoring and Evaluation: M&E should be given the appropriate attention by IAs and the Bank team to inform decisions and corrective actions. Under an APL, a clear distinction should be made between the triggers and intermediary Key Project Indicators.

81. Role for the Bank in the road sector. This project shows that the Government has been able to mobilize significant funding for maintenance of CRN but, because of a lack of appropriate controls and oversight, the Government is not allocating sufficient funds to road maintenance. Having a well-funded Road Fund does not of necessity guarantee proper use of the resources. More robust economic analysis and rationalization needs to be applied in decision making. Therefore, as the Government has increased its funding to new road construction during project life, the Bank could focus on supporting institutional reforms to ensure that investment decisions are underpinned by robust economic analysis.

82. Lack of foreign competition to the local road Engineering, Procurement and Construction companies (EPCs) in Zambia. An overly protective legislation in the country,

limiting access to foreign road EPCs, does not incentivize local EPCs to increase their standard and capacity. This results in poor designs and weak implementation capacity of roads project.

83. Social and poverty reduction impacts should be measured more systematically. Future operations should be more focused on poverty reduction.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

84. Bank’s draft ICR was shared with the Borrower on March 31, 2015. No comments were received by the time the ICR was finalized.

85. The following recommendations were made in the Borrower’s ICR: The Borrower recommended that the implementation of Mobility Improvement projects be decentralised to district councils as opposed to the centralised approach of CTI, assuming that local community are best placed to take local decisions.

86. The Borrower noted that the lack of clear lines of responsibilities between Agencies created confusion and delays. The ROADSIP Steering Committee was ineffective in driving project implementation. The protracted absence of Desk Officer also negatively affected implementation as did the lack of project management and contract management capacity building. It was recommended to establish Project Technical Working Groups comprising all the implementing agencies to deal with matters pertaining to technical issues of project implementation.

(b) Co-financiers. See paragraph 64. (c) Other partners and stakeholders

Annex 1. Financing Summary for APL Phases and Project Cost by Component

(a) Project Cost by Component (in USD Million Equivalent)

Components Appraisal Estimate Actual Percentage of (US$m) (US$m) Appraisal

1. Civil Works 43.50 75.80 174.25 2. Engineering and other technical services 2.00 7.20 260 3. Institutional development and Capacity building 3.40 5.90 173.52 4.Accessibility and mobility improvements 1.10 1.10 100 Total Project Cost 50.00 90.00 125 Front-end PPF 1.00

(b) Financing

Source of Funds Type of Appraisal Actual/Latest Percentage of Cofinancing Estimate Estimate Appraisal (USD (USD millions) millions) Borrower Counterpart funding 64.28 64.28 100 Borrower sources 114.8 114.8 100 IDA Credit 50.0 90.0 125 Other Development Partner Parallel 151.78 120.78 79 Total 380.90 389.86 102

APL Financing and Implementation Actual Financing and Implementation Difference of actual Phases Period at Appraisal Period at Closing from Appraisal Amount Start Completion Amount Effectiveness Completion Amount Start to (US$m) Date Date (US$m) Date Date (US$m) Complet ion No. of Days Phase I 50.00 July 2004 June 2007 90.00 June 2004 June 2014 + 40.00 + 2555 Phase II 70.00 July 2007 June 2010 70.00 March 2010 April 2016 N/A Phase III 70.00 July 2010 June 2014 N/A N/A N/A N/A N/A Total 190.00 160.00

Annex 2. Outputs by Component

Table 2.1: List of Project’s Output by Component Component 1 Civil Works for Road Maintenance, Upgrading and Rehabilitation (US$283.78 million, IDA: US$43.50 million) Program of periodic maintenance of the core road network, including primary etc… a. Routine Maintenance (US$32.66 million, Category Works 1(a)). The program will include 9,606 km in 2004 and reach 20,000 in 2006.

Output: • Expansion to 50 percent of the Core Road Network achieved in 2014 on Trunk, Main and Districts roads, equivalent to a cumulative 108,737 km over project duration. No maintenance carried out on Primary feeder roads. b. Periodic Maintenance (US$37.65 million, Category Works 1(a)). The program will support periodic maintenance of 824 km (370 km paved and 454 km unpaved). The program is intended to fully address the backlog of maintenance as well as to assure all scheduled periodic maintenance falling due in 2003-2007 is attended to. This sub-component would also be used for a pilot project to pool funds.

Output: • 38,450 km of core roads received periodic maintenance c. Rehabilitation (US$97.50 million, Category Works (b)). The project will support rehabilitation of 1 868 km (560 km paved and 167 km unpaved primary and secondary roads, 675 km urban roads, 69 km primary feeder roads and 217 km park roads) with a view to assuring that the target reduction of roads in poor condition can be met.

Output: • 23.5 km of core roads rehabilitated o Chingola – Kasumbalesa o Kafulafuta – Luanshya • Kafue Park Spinal Road : DROPPED – transferred to Nordic Development Fund (NDF)- credit d. Upgrading (US$110.30 million, Category Works 1(b)). The project will support a limited amount of upgrading of 669 km of primary and secondary roads where the economic viability has been demonstrated and 1,379 km of primary feeder roads to be upgraded to tertiary road engineering standard. The project is aimed at improving the condition mix of the primary feeder roads by 2007 to 50 percent good (to an acceptable engineering standard) so that it could be covered under a regular maintenance program.

Output: • Lusaka – Chirundu Road Link 3 (US$11.25 million). Works completed in December 2013. Government decided to fund with its own resources, approximately 2 km between the end of Link 3 and the start of the Escarpment section. e. Road safety improvements (US$2.10 million, Category Works 1(d)). This project will aim to implement the road safety program developed under the current IDA-credit and will strengthen the newly established RTSA.

Output: • RTSA established but not adequately staffed and capacitated

• Roll out of the Accident Information System (RTSA): NOT COMPLETED and rolled over to APL2. • Motor vehicles Inspection Center: NOT COMPLETED • Road Safety Parks: NOT COMPLETED f. Accessibility improvements, including pontoons and bridges (US$3.58 million, Category Works 1(c)). The remaining 50 percent of the primary feeder roads will receive accessibility improvements works. To enhance connectivity at strategic locations on the core road network, e.g. substandard crossings of major rivers, the program will include replacement of pontoons with higher tonnage or new bridges of adequate capacity provided the investments in pontoon and bridges are economically viable

Output: • 23.3 km of spots improvements (road formation and graveling) against a proposed 45 km of road and embankment rehabilitation • 131 culvert build against a proposed 44 km. g. Reconstruction of Priority River Crossings [Activity added with Additional Financing 1]

Output: • 103 small and medium sized river crossings have been completed: 34 River crossings completed in Northern Provinces, 30 in Luapula and 39 in the four National Parks • Technical audit of the two civil works contracts h. Construction of the Chiawa Bridge on the Kafue River (Estimated value US$9.9 million) [Activity added at Second Additional Financing]

Output: • Chiawa Bridge started on October 22, 2012 and was completed on June 30, 2014. • Rehabilitation of about 12 km of the paved road between Lusaka and Chirundu Component 2 Engineering and other Technical Services (US$2.00 million) TA for carrying out feasibility studies, engineering design, and supervision of maintenance and rehabilitation works for component 1 and to provide support to complete the preparatory activities for next phase.

Output: A total of 13 consultancy contracts were signed for the purpose of carrying out feasibility studies, engineering design and the supervision of maintenance and rehabilitation works: • Engineering supervision of works on Kafulafuta – Luanshya road • Engineering supervision of works on Chingola- Kasumbalesa road • Engineering supervision of works on Lusaka – Chirundu • Chiawa Bridge construction supervision • Feasibility study for Mufuchani Bridge • Design and supervision of the Resettlement Action Plan for Mufuchani Bridge • Independent review of engineering designs for Mufuchani Bridge • Supervision of resettlement works for Mufuchani Bridge • Engineering Assessment Performance contracts • Design and Preparation of bidding documents for weighbridges in Eastern Provinces • Detailed engineering design of fixed electronic weighbridges in Chililabombwe disctrict • Detailed engineering design and construction supervision for selected CTI • Condition surveys, engineering designs and preparation of bidding documents for CTI

• Feasibility studies, design and supervision for road rehabilitation under Phase 2 of ROADSIP II: DROPPED –July 2006. Reallocation of the funds to the civil works for the Kafue Spinal Road. • Drafting by consultants of bid documents for labor-intensive feeder road works [agreed in May 2005] • Feasibility study for establishment of a construction Materials Centre: DROPPED and REALLOCATED to the supply and delivery of laboratory equipment for the civil engineering department at the University of Zambia. Component 3 Institutional Development and Capacity Building (US$3.40 million)

a. Policy support: TA and training with regard to financial strategy and instruments, poverty assessment (M&E), road safety, axle load control.

Output: • Establishment of RDA, NRAF and RTSA completed by 2005 • 60 transport related staff trained • TA for Planning and Design: DROPPED and funded by EU • Review of the Driver Licensing System: DROPPED, instead a “Zambia traffic Information System” was developed by a South African firm financed by the Government • Review of Road User Charges (NRFA) • Review of Road Classification Study (RDA) • TA for Road Maintenance Management (DROPPED from the Credit late 2005, financed by EU) • Two years TA in Road Safety: NOT COMPLETED

Support to NCC • Unit rate study completed but the training of users did not take place before project closing in June 2014 • Re-design of NCC website completed in December 2013 • Support to the Preparation of NCC Business plan (2014-2018) approved by the Board in June 2014 b. Implementation Support: TA and training with regard to environmental and social assessment, audit and financial management services

Output: • Technical implementation assistance to RDA for the Bridge Management Unit (BMU) completed in 2012. • Motorcycles, cars , first aid kits and communication equipment, speed traps • Road Safety Advisor financed by Nordic Development Fund • Design and supervision of the Resettlement Action Plan for Mufuchani • Baseline Study for Poverty Impact Assessment. c. Institutional Development: Institutional management (operating procedures, financial requirement), contract management including out-sourcing, and performance based maintenance contracting, institutional planning and the provision of new management systems required for the efficient operation of the three new Agencies.

Output: • 50 staff received training in: (a) Management of Public Transportation; (b)M&E, design and Implementation; (c) Project Procurement of Works, Goods and Consultancy; • Institutional Study of Ministry of Transport, Works, Supply and Communications (MTWSC) completed, draft received January 24, 2005. d. Monitoring and Evaluation (US$0.42 million). Establish an independent M&E unit within the Ministry of Communications and Transport (MCT).

Output: • Not completed. Component 4 Accessibility and Mobility Improvements (US$ 1.1 million) a. Community transport infrastructure. Support to scale up to all districts by 2007. Provision of grants on a cost sharing basis to communities for construction and rehabilitation as well as training and capacity building at community and district level.

This component’s scope was reduced to the five initial pilot districts: Chibombo, Mpongwe, Sinazongwe, Kalabo, and Zambezi Output: • CTI baseline study (2009) • CTI ownership report • 15 spot road formation and gravelling • 131 culverts (524 meters) • 1 canal rehabilitated (1.4 km) b. Intermediate means of transport. Provision of IMT support.

Output: • 18 culverts, small bridges (only). Thought as a pilot and to be scaled up under APL2. c. Canals and waterways. Studies to review the infrastructure and service needs and support to pilot rehabilitation in Western and Luapula Provinces.

Output: d. Management and Coordination. Creation of a focal point in Ministry of Local Government and Housing (MLGH). Support to legal reforms to promote local community ownership and management of transport infrastructure assets and creating M&E system.

Output:

Table 2.2: RRMP Triggers Schedule and Realization

Responsible Expected Actual Trigger APL1 Specific Action Agency completion date completion date The three agencies NRFA, RDA, and RTSA a) Board members and CEO appointed NRFA, RDA, a) Dec 2004 a) 29 having their own Board of Directors, comprising b) Staff members appointed RTSA b) Jun 2005 December private and public sector representatives, are c) Agencies regulations approved; and c) Dec 2005 2004 established and fully functional one year before d) Redundancy plan satisfactorily implemented d) Dec 2005 b) July 2006 APL1 closing c) December 2005 d) December 2005 NRFA is able to meet 40 percent of total road NRFA adopts a three-year financial strategy for NRFA June 2007 January 2007 expenditures incurred on routine and periodic road maintenance and RDA implements it maintenance and rehabilitation from domestic satisfactorily. Targeted improvements of roads to resources by 2006 be verified through carrying road condition surveys. Satisfactory implementation of the road safety Activities defined in the PIP substantially RTSA June 2007 December plan completed 2007 The annual administrative costs for all these To carry out an audit of the administrative cost NRFA, RDA, June 2007 2009 agencies shall be less than the five percent of all agencies and their total expenditure RTSA maximum funding limit of the NRF Satisfactory completion of all preparatory Engineering designs and tender documents RDA June 2007 2009 activities for the planned Phase 2 investments including environmental impact assessment and social impact assessment have been completed Trigger APL 2 Agreed phase two road works have been Activities defined in the credit agreement RDA June 2010 substantially completed and performance substantially completed indicators satisfactorily achieved NRFA is able to meet 80 percent of total road NRFA adopts a financial strategy for road NRFA June 2010 expenditures incurred on routine and periodic maintenance and RDA implements it maintenance and rehabilitation from domestic satisfactorily. Targeted improvement of roads to resources by 2009 be verified through carrying out road condition surveys Satisfactory implementation of the road safety Activities defined in the PIP substantially RTSA June 2010 plan completed

Satisfactory completion of all activities for the Engineering designs, and tender documents RDA June 2010 planned phase 3 investments including environmental impact assessment and social impact assessment have been completed

Table 2.3: Project Results Framework

ROAD REHABILITATION AND MAINTENANCE PROJECT APL 1 (P071985) RESULTS FRAMEWORK

Indicator name Baseline Target Achieved Percent Dec. at Achieved 2004 completion

Project Development Objective Indicators (after AF2)

1. Expansion of routine maintenance of core 19.5% 50% 50% 100% Comment: The target was achieved in June 2014 with a roads program (percentage of core roads two years delays and reflects work done on the Trunk. network) from 19.5% in 2004 to 50% in 2012 Main and District roads. Most of these contracts have Initial Target: to 40% in 2006 been awarded to local contractors. 2. Condition of Lusaka - Chirundu Road 50% 81% 89% 110% Comment: Works over the total 134.5 km road were (percentage of road in good and fair condition) divided in 4 sections and an escarpment section. Link 4 Initial target: Quality of CRN improved and for is assessed in bad condition and therefore, the total road paved (from 58% in 2004 to 65% in 2006) and is about 89% in fair condition. unpaved roads (from 7% in 2004 to 32% in 2006) 3. Domestic funding increased from 27% in 27% 65% 66% 101% Comment: Target was not achieved in 2012 but in 2004 to more than 65% in 2012 2014. Previous target: to 40% in 2006 4. System for recording road accident data and No Yes No 0% Comment: The system is in place after a long delay, but its analysis functional the roll out has been carried over into APL2. Initial Target: by 2005 5. Number of rural population with access to re- 0 505,000 505,000 100% Comment: All the initial 103 small and medium sized instated all-weather river crossings from 0 in river crossings have been completed. 2007 to 502,000 in 2012 (and 505,000 in 2014) 6. Direct project beneficiaries 0 N/A 505,000 100% Comment: An estimated 502,000 beneficiaries for roads and An additional 3,000 for the Chiawa Bridge. 7. Female beneficiaries 0% N/A 49% Comment:

Intermediate Results Indicators (after AF2)

1. Roads rehabilitated, Rural 0 km 15 km 23.5 km 100% Comment: These community roads were rehabilitated in Chibombo, Kalabo, Mpongwe, Sinazongwe and Zambezi districts. 2. Roads rehabilitated, Non-rural 0 km 46 km 132.5 km Comment: This includes 40.5 km of Luanshya- Kafulafuta; 39 km of Chingola – Kasumbalesa, and 53 of Lusaka-Chirundu. 3. Number of river crossings reconstructed 0 103 103 Comment: 34 river crossings completed in Northern Province, 30 in Luapula Province and 39 in National Parks 4. Bridge management system in place and No Yes Yes Comment: The system was put in place and operational by end of FY 2012 operational in May 2014. 5. Restructuring of Road Agencies completed No Yes Yes Comment: The three Agencies were established in by 2005 2003 by Law and their restructuring was considered completed in 2006 with intermediate staffing. The nomination of Boards members was not completed in 2006. 6. Number of transport sector related staff 0 50 60 Comment: Only partial information available trained 7. Construction of Chiawa Bridge is No Yes Yes Comment: Bridge completed on June 30, 2014. completed

Table 2.4: Changes to PDO Level Indicators and Targets Changes to PDO-level Indicators and Targets

Original (PAD- 2004) Revised (AF1- 2007) Revised (AF 2- 2010) Revised (Restructuring April 2012) a) Coverage of Core Road Scope and delay increased: Delay increased: Network (CRN) under No change Expansion of routine Expansion of routine sustainable routine maintenance of core roads maintenance of core maintenance program program (percentage of core roads program increases from 19.5% in roads network) from 19.5% in (percentage of core 2004 to 40% in 2006 2004 to 50% in 2012 roads network) from 19.5% in 2004 to 50% in 2014 b) Quality of CRN improved Scope reduced: Scope reduced and for paved roads from 58% No change Condition of the Lusaka- delay increased: in 2004 to 65% in 2006 Chirundu Road (% of road in Condition of the and for unpaved roads good and fair condition) Lusaka-Chirundu from 7% in 2004 to 32% increases from 50% in 2004 Road (% of road in in 2006 to >70% in 2012 good and fair condition) increases from 50% in 2004 to 63% in 2014 c) Domestic funding for the Scope and delay increased: Scope and delay roads budget from 27% in No change Domestic funding for road increased: 2004 to 40% in 2006 budget increase from 38% in Road sector funding 2004 to over 65% in 2012 from domestic revenue increased from 27% in 2004 to over 66% in 2014 d) System for recording of Delay increased: Delay increased: road accidents and its No change System for recording of road System for recording analysis in place by accidents and its analysis of road accidents and December 2005 functional by 2012 its analysis functional by 2013 e) NA New Indicator: NA Number of visitors accessing the four Dropped rehabilitated national parks before and after project intervention f) NA New Indicator: Scope reduced: Number of No change Proportion of rural rural population with access population with to re-instated river crossings access to re-instated increased from 0 in 2007 to all-weather river 502,000 in 2012 crossings from 0 in 2007 to 826,000 in 2010 g) NA NA Core indicator: Direct Project No change Beneficiaries of which 49% are female increased to 505,000

Annex 3: Economic and Financial Analysis

1. The project was composed of various investment components. At appraisal, economic analysis was conducted focusing on major road rehabilitation components: (i) Chingola- Kasumbalesa, (ii) Kafulafuta-Luanshya, (iii) Lusaka-Chirundu Escarpment, and (iv) Lusaka- Chirundu Link 3. Under the Additional Financing, economic assessment was also conducted to evaluate (v) the Chiawa Bridge, a large bridge construction work across the Kafue River. These five investments amounted to US$66 million or three-quarters of the actual total project cost.

2. The Project also supported other small interventions, such as spot road improvements in rural areas and construction and reconstruction of small bridges and culverts under the Community Transport Infrastructure (CTI) component. Conventional cost benefit analysis is generally not appropriate to evaluate low-volume rural roads.5 According to the appraisal document, instead, a multi-criteria assessment was used to select priority interventions in each district and province. Though, there is little documentation on how to actually do this in the relevant documents. According to a baseline survey of the impact evaluation conducted in the CTI areas, the traffic levels are indeed much low at about 200 per day. In addition, half of which were non-motorized traffic, such as pedestrians, bicycles, and ox carts. Thus, the current analysis excludes these rural, small interventions and focuses on the above-mentioned major road rehabilitation and bridge investments.

3. In ex post project economic analysis, ideally, the same methodologies and assumptions should be used to re-evaluate efficiency after the intervention. Unfortunately, however, the evaluation methods used at the appraisal stage were neither maintained nor well documented. In addition, the monitoring framework of the Project was not linked well to the project evaluation. For some project locations, no systematic traffic counts were made after the Project, although the country owns a nationwide network of traffic count stations. Therefore, the current analysis replicates the similar evaluation models, updating underlying parameters and traffic data to an extent possible.

4. For the first four road rehabilitation components, Highway Design Model 4 (HDM4) was used at appraisal. The model was rerun with updated traffic data and vehicle operating costs. For the Chiawa Bridge construction, more static cost-benefit analysis was conducted to compare time savings of passengers, eliminated costs of an operating pontoon, and investment cost of the bridge. See the following section for more details.

5. The summary of the results is shown in Table 3.1. The first three road rehabilitation components achieved higher efficiency than expected. This is partly because the project costs were lower than estimated. There was no major cost overrun despite some project delays in some components. It is also because traffic was increased substantially. The actual traffic volumes were much greater than the projections. Especially, heavy vehicle traffic has been increasing rapidly along the project corridors. As a result, the economic rates of return are high at 30 percent to 60 percent. For the Chiawa Bridge component, the traffic was increased dramatically, because people now have 24-hour access to cross the river. However, the project costs nearly doubled compared

5 See, for example, World Bank. (2005) Notes on the economic evaluation of transport projects: Low volume rural roads. Transport Note No. TRN-21.

with the estimate. This makes IRR lower than expected, though it is still above the conventional threshold.

Table 3.1: Summary of Economic Rates of Return Appraisal Completion

Base Traffic Cost estimate Base Traffic Actual cost IRR (%) IRR (%) year (AADT) ($ million) year (AADT) ($ million)

Chingola-Kasumbalesa (40 km) 2002 1,604 12.1 25.1% 2005 1,994 10.29 33.1%

Kafulafuta-Luanshya (45 km) 2003 3,031 9.1 13.6-26.1% 2006 4,085 7.30 63.4%

Lusaka-Chirundu Escarpment (34 km)* 2007 902 17.5 5.5%-5.8% 2008 1,054 8.03 29.8%

Lusaka-Chirundu Link 3 (20 km)* 2007 1,343 17.2 6.8-10.8% 2015 963 10.7

Chiawa Bridge 2008 36 6.0 15.4% 2015 160 11.14 12.1%

* Based on the Final Design Report Chiawa Chirundu Road Project.

Chingola-Kasumbalesa 6. Background. The T3 road from Chingola to Kasumbalesa, a border crossing to the Democratic Republic of Congo (DRC), is a vital route for the Copperbelt Province to be connected to the mining towns of Chingola and Chiliabombwe to Kasumbalesa. There was a significant amount of traffic on this road with a large number of heavy goods vehicles, making a riding surface extremely rough and causing severe traffic congestion at the Kasumbalesa border post. The project aimed at rehabilitating this road segment with 40.48 km length and strengthening shoulders.

7. The civil work was awarded in February 2005 and started in the following month. The work was completed in November 2007, four months before the original schedule. The project cost was reduced from an original contract amount of US$10.7 million to a final payment of US$9.8 million, because of various price adjustments.

8. After the work was completed, the traffic volume increased substantially along the road. Before the project, the average traffic was 1,694 vehicles in 2002. Unfortunately, no traffic count was made immediately after the project completion. A more recent traffic count in 2013 indicates daily traffic increased to 4,468, suggesting an average annual growth rate of 9.2 percent for the past ten year.

9. Evaluation. The HDM4 model is applied for the period of 2005 to 2025, using this actual traffic growth up to 2013 and a constant growth rate of 5 percent for the rest of the period, a more conservative assumption. Vehicle operating costs are adjusted to the year of 2005, using historical national data on fuel prices, per capita income, and consumer price index (Table 3.2). The project work was implemented in the first two years.

10. The economic internal rate of return is estimated at 33.1 percent, which is higher than estimated at appraisal (see Table 3.1 above). The main reason is that the traffic increased more than expected. The growth rates vary from 3 percent to 40 percent per annum, depending on type

34 of vehicle. Heavy trailers and trucks grew particularly, because the project road serves mining activities in the region. This contributes to boosting economic benefits from improved road conditions by the Project.

Table 3.2: Vehicle Operating Costs in 2005 Passenger

Vehicle New New Lubricating Maintenance Crew Annual Annual Working Nonworking Cargo

Description Vehicle Tire Fuel Oil Labor Wages Overhead Interest Time Time Time

($/car) ($/tire) ($/liter) ($/liter) ($/hour) ($/hour) ($/year) (%) ($/hour) ($/hour) ($/hour)

Motorcycle 773 15.47 0.42 1.24 13.05 0.17 0 28.21 0.32 0.11 0.00

Car 12783 34.02 0.42 1.24 13.05 0.46 0 28.21 0.32 0.11 0.00

Delivery Vehicle 18284 34.02 0.42 1.24 13.05 0.46 0 28.21 0.32 0.11 0.00

Truck Light 18804 86.61 0.46 1.24 13.05 0.70 619 28.21 0.32 0.11 0.07

Truck Heavy 55672 494.90 0.46 1.24 13.05 1.12 1237 28.21 0.32 0.11 0.07

Truck Articulated 68656 348.68 0.46 1.24 13.05 1.12 3959 28.21 0.32 0.11 0.07

Bus 108750 360.86 0.46 1.24 13.05 1.12 6186 28.21 0.32 0.11 0.00

Source: Road Development Agency.

Kafulafuta-Luanshya 11. Background. The M6 is a bituminized trunk road, commencing north of Kafulafuta on the T3 and heading in a northwesterly direction for 32 km before turning south-west to Luanshya. The total length is 43.4 km. Together with the T3, it is among the most important strategic road networks in the Copperbelt Province. It connects not only domestic but also international commercial centers, especially to DRC and to Lusaka, South Africa and Zimbabwe.

12. At the appraisal stage, the road condition was not so bad with International Roughness Index (IRI) measured at 2.1 to 2.7. But with anticipation that the traffic would increase and the road condition would deteriorate rapidly, the Project aimed at rehabilitating the road with pavement repairs and asphalt overlay. The traffic volume was actually increased significantly from 3,031 to 4,085 after the project.

13. The work was awarded in October 2005 and completed on time by April 2007. The contract amount was US$7.3 million, including supervision costs. There was a small amount of cost overrun, about two percent of the contract amount. The total cost was still far below the original cost estimate, which was US$9 million.

14. Evaluation. The HDM4 model is applied for a 20 years project life from 2006 to 2026. The actual traffic growth is used for 2006, and a constant growth rate of five percent is assumed for the rest of the period. The project work was implemented in the first two years. Similarly to Table 3.2, vehicle-operating costs are adjusted to the year of the project based on historical fuel price, income and Consumer Price Index (CPI) data.

15. The economic internal rate of return is estimated at 63 percent, which is significantly higher than the original estimate. This is partly because of the nature of the work, which is a rehabilitation of the road segment that had been relatively well maintained even before the Project. Thus, the project cost was relatively low on a unit basis. Another reason is that the traffic on the road increased significantly once the work was completed. The annual average growth rate was 12.8 percent in 2006. The proportion of heavy vehicles increased tremendously, because of the expansion of the Copper Mines as well as the decommissioning of rail operations between Ndola and Luanshya in 2006. At a 32 km point of this road segment, the share of heavy trailers and trucks increased from 9.2 percent in 2003 to 28.4 percent in 2006. This contributed to boosting economic benefits from the Project.

Lusaka-Chirundu Escarpment

16. Background. The Lusaka-Chirundu road (135 km in total) forms part of the southern portion of the T2 that originates at the southern end of the Lusaka and ends at the border post of Chirundu. This is an important road link connecting Zambia to the south, including Zimbabwe, Mozambique and South Africa. In recent years, traffic has grown very rapidly. The traffic increased for 50 percent for the period of 2003-2008 at a growth rate of about 10 percent per annum.

17. Before the Project, the riding quality of Escarpment section (75 km to 109 km) was particularly poor. IRI deteriorated by more than 20 percent from 2003 to 2008. The original design retained the existing vertical and horizontal alignment. Following a design review, however, the mountainous sections of the road were decided to be realigned to improve the horizontal and vertical alignment. This escarpment section has a length of 34.7 km, spanning across mountainous terrain.

18. The appraisal document indicates that the IRR is 21.7 percent. But there is no detailed information on how to calculate it. In 2007, the work design was reviewed to ensure physical appropriateness of the road alignment and cost effectiveness of the proposed work. According to the final design report, the traffic level was 907 vehicles in 2008. The cost of the work was estimated at US$17.5 million. The Internal Rate of Return (IRR) was reevaluated at 5.5-5.8 percent, depending on section.

19. The civil work was awarded in March 2006, but the implementation was significantly delayed due to the review of the design, as mentioned above. The design was approved in September 2007. The revised completion date was set at the end of February, 2008. However, the progress was generally slow due to unfavorable weather condition, particularly, extremely wet weather in November and December, 2007. The work was completed in June, 2008, with a 4 months delay. However, the project cost was not changed. The final project cost was US$8.03 million with a supervision cost of about US$1 million included.

20. Evaluation. The HDM4 model is applied for the period of 2008 to 2028, using the actual traffic growth up to 2013 and a constant growth rate of five percent for the rest of the period. It is assumed that the project work was implemented in the first year, given the significant delay

experienced. Based on historical national data on fuel prices, per capita income and CPI, vehicle operating costs were adjusted to the year of the project.

21. The economic internal rate of return is estimated at 29.8 percent, which is higher than the revised estimate. The actual traffic level turned out larger than the estimate. More importantly, the actual project cost was much lower than estimated. This contributes significantly raising the economic rate of return.

Lusaka-Chirundu Link 3

22. Background. The Link 3 is on the same Lusaka-Chirundu corridor as the above Escarpment Section. According to the work design was reviewed to ensure physical appropriateness of the road alignment and cost effectiveness of the proposed work. According to the 2007 detailed design final report, the traffic level was 1,343 vehicles on Link 3. The cost of the work was estimated at US$17.8 million. The IRR was reevaluated at 6.3-10.8 percent, depending on section.

23. Evaluation. As in the case of Escarpment Section, HDM4 was rerun for the period of 2014 to 2034, using the latest available traffic data in 2014. The data provided by RDA indicates that the current traffic volume is much lower than the level before the project in 2007. This may be affected by possible methodological differences in traffic counting, such as location and seasonality. However, given this low level of traffic, HDM4 generates a negative rate of return. This is considered to be caused by multiple factors: lower-than-expected traffic, relatively good road condition even before the project, and relatively high project costs per kilometer, though the project cost was still much lower than estimated.

Chiawa Bridge

24. Background. The Chiawa Bridge was recognized as a priority link to improve transport connectivity across the Kafue River not only for tourism and agricultural development but also to improve people’s amenities. Before the Project, a pontoon existed, which was in fair condition and was operated fairly efficiently. However, its limited working hours and frequent breakdowns crucially constrained local mobility of people and freights.

25. The appraisal document indicates that the economic rate of return is 15.4 percent. However, there is little discussion on the applied methodology and assumptions. A detailed cost benefit analysis report was prepared in 2010, which updated the original analysis. This shows that the cost of operating a pontoon could be saved, which amounted to US$578,000 per annum. The traffic level observed before the Project was relatively low at 36 motorcycles and vehicles. A time cost of about US$40,000 could be saved per year. More economic benefits were expected from induced growth in the agriculture and tourism sectors. It was assumed that the Project could increase agricultural production by 10,000 to 30,000 tons along the project areas. As a result, the IRR was estimated at 10.9 percent.

26. The work was awarded in July 2012, with work duration of 15 months. However, the work was delayed for about five months, due to the late start of the work. In May 2014, a 140 m long

37 bridge was completed with two approach roads each 800 m long, totaling 1,600 m. The actual project cost was about US$11.1 million.

27. Evaluation. Using the latest traffic count at the bridge in 2015, the same cost benefit analysis framework was applied. Other parameters, such as vehicle operating costs and time values of passengers and freights, are assumed unchanged. The IRR is estimated at 12.1 percent, which is lower than expected. This was largely attributed to a significant increase in project costs from US$6 million to US$11.1 million, more than offsetting more-than-expected traffic growth over the bridge.

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Responsibility/ Names Title Unit Specialty Lending Stephen Brushett Consultant GSURR Tesfaalem Gebreiyesus Lead Specialist OPSOR Ajay Kumar Consultant ITSWE David Silcock Consultant GTIDR Jonathan Pavluk Senior Counsel LEGOP Ntombie Siwale Senior Program Assistant GTIDR Nina Chee Senior Environmental Specialist OPSOR Davies Makasa Transport Specialist GTIDR

Supervision/ICR Justin Runji Sr Transport. Spec. GTIDR Tawia Addo-Ashong Sr Transport. Spec. GTIDR Anthony Bliss Consultant GTIDR Atsushi Iimi Senior Economist GTIDR Robin Mearns Program Leader AFCS3 Pierre Pozzo di Borgo Principal Investment Officer CNGSI David Sislen Program Leader AFCS1 Richard Bullock Consultant GTIDR Bertrand Murguet Consultant GTIDR Haileyesus Adamtei Highway Engineer GTIDR Stella Chepkorir Finance Analyst WFALA Lungiswa Gxaba Consultant GFADR Jose Luis Irigoyen Director GTIDR James Robert Markland Sr Transport. Spec. GTIDR Lozi Sapele Program Assistant EDS14 Luis Schwarz Senior Finance Officer WFALA Celi Dean Temporary GTIDR Wisdom Mulenga Office Assistant AFCS3 Komana Lubinda Consultant GGODR Stephen Mukaindo Counsel LEGAM Grace Soko Program Assistant AFCZM Ben Gericke Lead Transport Specialist GTIDR Subhash Seth Consultant GEDDR Vivian Nwachukwu-Irondi Legal Analyst LEGCF Felly Kaboyo Operations Analyst GPSOS Farida Khan Consultant GTIDR Antoine Lema Senior Social Development Specialist GSURR

(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ Thousands (including No. of staff weeks travel and consultant costs) Lending FY04 37.03 37,645.48 FY05 0.00 0.00 FY06 0.00 0.00 FY07 0.00 0.00 FY08 0.00 0.00 FY09 0.00 0.00 FY10 0.00 0.00 FY11 0.00 0.00 FY12 0.00 0.00 FY13 0.00 0.00 FY14 0.00 0.00 FY15 0.00 0.00

Total: 37.03 37,645.48 Supervision/ICR FY04 0.00 0.00 FY05 27.05 30,443.45 FY06 40.90 40,563.85 FY07 42.96 31,296.14 FY08 46.10 26,511.29 FY09 30.15 25,682.51 FY10 68.03 23,145.63 FY11 27.03 136.61 FY12 16.59 26,026.64 FY13 16.99 6,559.31 FY14 17.92 5,584.88 FY15 7.30 17,477.01

Total: 341.02 233,427.32

Annex 5. Summary of Borrower’s ICR

Component 1: Civil Works

Periodic Maintenance: periodic maintenance under the project was carried on the Lusaka to Kabwe Road and some minor works under Community Transport Infrastructure (CTI) (RAMP) in the five districts, Chibombo, Kalabo, Mpongwe, Sinazongwe and Zambezi.

The amount of roads under periodic maintenance was as shown in Table 5.1 below.

Table 5.1: Periodic Maintenance Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 Km - 1,479 5,841.88* - 5,236.22 12,275.97 9,425 1,451 2,741 Note: * Planned (Source: RRMP I Mid-term Review)

The amount of road under periodic maintenance was higher than the target at the beginning but had started reducing as more roads were placed under routine maintenance.

Rehabilitation: rehabilitation works were carried out on the following roads: (i) Chingola – Kasumbalesa; the rehabilitation works covered a total length of 40.5km. The works contract was awarded to China Henan International Corporation Company Limited (CHICO) of China with a commencement of March 18, 2005. (ii) Lusaka – Chirundu; the rehabilitation works covered a total length of 53 km comprising the escarpment section and Link 3 (55 km to 100 km). (iii) Kafulafuta – Luanshya; the rehabilitation works covered a total length of 45.36 km and was jointly financed by the WB and OPEC, through parallel financing. The OPEC financed the section of road from Kafulafuta to km7 while IDA financed the section from km7 to Luanshya.

The works were handed over on April 20, 2007 two weeks ahead of schedule. An evaluation by the engineer of the road condition after completion found the riding quality to be good.

Upgrading: No major upgrading works were undertaken under RRMP I except for some partial upgrades that were undertaken on the Lusaka – Chirundu Road escarpment section to provide passing lanes in some sections.

Construction of Chiawa Bridge: the construction of Chiawa Bridge, (renamed Michael Sata Bridge), on the Kafue River, see Figure 1, was one of the last major works to be undertaken. The start of the works was delayed due to the high bid prices originally received. Consequently government had to request for additional funding for the works. The works were completed in June 2014.

Construction of Selected Priority River Crossings: a total of 103 selected priority river crossings in Luapula, Northern, Eastern, North Western and Copperbelt provinces and four game parks which were washed away by rains were constructed.

Road Safety Improvement: the activities under this component were to strengthen Road Transport and Safety Agency (RTSA) through the procurement of various requirements for traffic law enforcement and capacity building in road safety management through the development, installation and roll out of an Accident Database Management System and a mechanized motor vehicle inspection center.

Component 2: Engineering and Technical Services:

The focus of this component was to provide technical assistance for carrying out feasibility studies, engineering design and supervision of maintenance and rehabilitation works for Component 1 and to provide support to complete the preparatory activities for the next phase. Achievement: A total of 13 consultancy contracts were entered into for undertaking feasibility studies, engineering design and the supervision of maintenance and rehabilitation works. The consultancies were all effectively executed. However, the provision for Feasibility study for establishment of a construction Materials Centre was reallocated to the supply and delivery of laboratory equipment for the civil engineering department at the University of Zambia.

Component 3: Institutional Development and Capacity Building:

Policy support: the implementation of the government Transport Policy resulted in the establishment of the three implementing agencies, NRFA, RDA and RTSA. While the three newly created agencies have been performing satisfactorily technically, it was noted that the Boards of Directors have not been in place consistently to provide policy guidelines and operational oversight. Another challenge faced is the scope of work and overlaps between Road Development Agency (RDA) and Ministry of Local Government and Housing (MLGH). The problem emanates from the appointment of councils as Road Authorities and their reporting channels. In order to try and overcome the conflict, a Memorandum of Understanding (MoU) was signed between MLGH and Ministry of Transport, Works, Supply and Communications (MTWSC) for RDA to try and manage the problem. Adherence to the terms of the MoU was not satisfactory.

Implementation Support: two consultancies were undertaken under this component, namely: (i) Design and supervision of the Resettlement Action Plan for Mufuchani; and (ii) Baseline Study for Poverty Impact Assessment.

Institutional and Capacity Development: A total of 50 staff underwent training in various fields relevant to the operations of the implementing agencies. However, there seems to have been difficulties in the coordination of this activity as not all the agencies had their staff trained. The training undertaken included: • Management of Public Transportation; • Monitoring and Evaluation, design and Implementation; • Project Procurement of Works, Goods and Consultancy; and • Goods and Equipment procurement.

NCC: Consultancy Services for the Redesigning of the NCC Website: the redesigned website was accepted in September 2013 and launched in December 2013. The redesigned website has enabled NCC to improve service delivery through online registration of contractors. Further, stakeholders are able to obtain necessary information from the website.

NCC: Consultancy Services to develop a Business Plan: after a protracted process NRFA developed a strategic plan using its own resources. The strategic plan was used a basis for the development of a Business Plan. However, due to the lapse of time the operationalization of the Business Plan was carried forward to APL II. The development of the Business Case will give the NCC and the construction sector in general a clear direction on how the sector can grow and be more efficient and effective.

NCC: Consultancy Services to Develop Unit Rates: the consultancy to develop Unit Rates was successfully completed, albeit late. The training of the users in the use of the software is to take place under APL II. The unit rates will be particularly important in adjudicating bids

Monitoring and Evaluation: The M & E Unit under the MTWSC was established in 2010 as a sector wide M & E Unit and has since undertaken a needs assessment. There was no Monitoring and Evaluation Reports based on the Project M & E Framework. It was reported that the Monitoring and Evaluation Unit under MTWSC had challenges collecting data from the implementing agencies as the Unit had no system of collecting the data. Both NRFA and RDA have M & E Units which have been undertaking monitoring and evaluation of the various projects being executed but have not used the Project M & E Framework.

Component 4: Accessibility and Mobility Improvement

Community Transport Infrastructure (CTI): The contracts for consulting services to undertake condition survey, the design of the interventions and the supervision of the civil works were signed in May 2008. The works contracts were signed and the actual works commenced in October 2009. The civil works involved accessibility improvement (spot improvement) of community roads and construction of footbridges and culverts. The other component of CTI was clearing of canals and waterways in Kalabo District.

This component commenced almost four years after Project effectiveness. The delay in the commencement of activities has been attributed to a number of factors. These included; (a) delay due to time taken to decide who would implement the project activities. The MLGH had initially wanted to implement the activities, including design, but the WB insisted on the use of consultant, and (b) inadequate institutional arrangements within MLGH in that the project activities were not regarded as part and parcel of the main activities of the Ministry.

As a result of the delay, the original scope of the component was drastically reduced to a pilot project in five districts. The component has remained a pilot in the same districts. While the PAD stated that one of the objectives of the project was enhancing the local capacity, the district councils were not involved in the procurement of the consultants and contractors. As a

result, it is reported that the district councils felt left out and did not regard the projects as their own and consequently not providing for the maintenance of the infrastructure. The project did not provide funding to councils for the maintenance of the newly constructed infrastructure. As a result, most of the facilities have deteriorated since their construction. Tables 5.2 and 5.3 below show the state of some of the roads at the time of this report.

Traffic Count and Transport Study A Traffic Count and Transport Study undertaken by the Consultant on three roads in three districts as part of this report showed that the generally the average traffic had significantly increased as shown in Table 5.2 below.

Table 5.2: AADT Comparative Analysis, 3 Districts District 2009 2015

Chibombo 25 59

Mpongwe 2 5

Sinazongwe 11 54

The study also showed that in rural districts IMT was still the predominant means of transport as shown in Table 5.3 below.

Table 5.3: ADT in 3 District Roads Districts Chibombo Sinazongwe Mpongwe Pedestrian - no load 175.3 385.0 85.6 Pedestrian - load 16.2 141.2 8.5 Bicycle 61.4 186.8 38.3 Ox-cart 15.9 2.6 7.0 Total IMT 268.8 715.6 139.3 Motorbike 8.4 6.1 0.5 Saloon car 4.3 4.8 0.0 Light goods vehicle 1.0 4.6 0.0 Tractor 12.1 2.8 0.0 Minibus 0.0 0.5 0.0 Truck 0.7 0.0 0.0 Total Motorised 26.6 18.7 0.5

The results show that more people can access the markets and move their commodities from the farms to the respective markets.

Assessment of Bank Performance

Bank Performance in Ensuring Quality at Entry Bank performance is rated as satisfactory in ensuring quality at entry. The Bank spent sufficient resources on project preparation, with most of the preparation done in 2002 and 2003.The first identification mission took place much earlier, but it took much time to reach agreement and move from a first identification mission to full preparation. During preparation, the Bank team clearly identified the sectoral issues and ensured that the works proposed in the approach adopted were closely aligned with GRZ objectives and the CAS. Further, the design took into consideration the positive achievements of ROADSIP I.

Quality of Supervision Quality of Bank supervision is rated as satisfactory. The Bank provided a total of 23 full supervision missions during project implementation. These missions were timely and did not shy away from addressing issues that arose during the realization of a project of the type that was relatively new to the country at that time. The missions reacted proactively to identify issues and problems that could have jeopardized the achievement of the PDOs or could have resulted in both cost overruns and substandard end products. The aide memoires prepared at the end of each mission were informative and clear, as well as identified the issues that needed to be addressed before the next mission.

Justification of Rating for Overall Bank Performance Overall Bank performance is rated as satisfactory. Bank performance was satisfactory at all stages from project preparation through supervision.

Assessment of Borrower Performance

Government Performance Government performance is rated as satisfactory. Government implemented the necessary policy and the necessary legislation for the establishment of the three agencies, namely NRFA, RDA and RTSA, which were critical to the implementation of the project. Further government throughout the implementation showed commitment to the project objectives by allocating increased funding for routine maintenance and periodic maintenance of CRN. The Steering Committee and the Committee of Permanent secretaries were always available to discuss important issues during supervision missions and had provided sufficient resources for these missions.

Implementing Agencies Performance The performance of the implementing agencies is rated as moderately satisfactory. Most implementing agencies did not have staff dedicated to the implementation of project activities and

45 therefore project activities were additional to their responsibilities. This caused challenges in decision making and timely implementation of activities. The staff assigned showed dedication to the implementation of the project but the requirements of their jobs, performance of which is evaluated made it difficult for them to be available at all times.

Justification of Rating for Overall Borrower Performance The overall performance of the Borrower is rated as moderately satisfactory.

Lessons learned Mobility Improvement: this component commenced about two years behind schedule. The Consultant noted that a similar project under MLGH, Community Access Improvement Project (CAIP) was able to undertake 461 projects in 14 districts during a similar period, i.e., from January 2010 to November 2013. The major difference was that the CAIP works were decentralised to district councils as opposed to the centralised approach of CTI. It is evident that such small work which has a great impact on communities, are best implemented through a decentralised approach.

Project Coordination: The use of the ROADSIP Steering Committee for the project was well intentioned but had challenges in driving project implementation.

Project Management: there were lapses in project and contract management as could be evidenced on the Chingola – Kasumbalesa Road where variation orders were executed without obtaining due authority.

Desk Officers: There were no dedicated offices in some of the implementing agencies for the implementation of the project.

Recommendations Mobility Improvement: it is recommended that the implementation of these projects be decentralised to district councils as opposed to the centralised approach of CTI. It is evident that such small work which has a great impact on communities, are best implemented through a decentralised approach.

Project Coordination: there is need to improve coordination and draw clear lines as to who is responsible for what action. This will allow for better follow up on issues and avoid lapses. The use of the ROADSIP Steering Committee for the project was well intentioned but seems to have been ineffective in driving project implementation.

Project Management: there is a need to provide capacity building in project and contract management.

Desk Officers: There is need to have dedicated offices in each of the implementing agencies for the implementation of the project.

Project Technical Working Groups: There is need to establish Project Technical Working Groups comprising all the implementing agencies to deal with matters pertaining to technical issues of project implementation.

Annex 6. List of Supporting Documents

Background Information

- The World Bank, Country Assistance Strategy, 1999 - The World Bank, Country Assistance Strategy, 2004 - Poverty Reduction Strategy Paper

Zambia Transport Sector

- Government of the Republic of Zambia, The Road Traffic Act (Act No.11 of 2002) - Government of the Republic of Zambia, The Public Road Act (Act No.12 of 2002) - Government of the Republic of Zambia, National Road Fund Act (Act No.13 of 2002) - Government of the Republic of Zambia, Road Sector Policy, December 2003 - Gwilliam et al. (2008). The Burden of Maintenance: Roads in Sub-Saharan Africa, Africa Infrastructure Country Diagnostic Background Paper (14) - Raballand, G. and Whitworth, A. (2012). The crisis in the Zambian Road Sector, Zambia Institute for Policy Analysis and Research (ZIPAR) Working Paper No.5 - Kaira, C. and Hodgson N. (2014). Consultancy services for capacity building to the Zambian road transport sector – inception report, funded by the European Union, October 2014 - The World Bank, Good Governance in Roads Project, Minutes from the Planning for sustainable impact workshop, October 30-31, 2013 - The World Bank, Program Document for an Economic Management and Growth Credit to the Republic of Zambia, November 12, 2004; Report No. 29294 ZA - IEG. 2013. Improving Institutional Capability and Financial Viability to Sustain Transport: An Evaluation of World Bank group Support since 2002. Washington, D.C: World Bank.

Road Rehabilitation and Maintenance Project Documentation

- The World Bank, Agreed Minutes of Negotiations - The World Bank, Project Appraisal Document, RRMP, March 2004 - Development Credit Agreement - Additional Financing Agreement - Restructuring Paper I - Second Additional Financing Agreement - Restructuring Paper II - The World Bank, Aide-Memoires of Appraisal mission, and Implementation Status Reports - Implementation Completion Report ROADSIP - Project Appraisal Document, Phase II in support of the Second Phase of the ROADSIP II Program, September 8, 2009 - CTI Completion Report, January 2012