Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 7316
PROJECT PERFORMANCE AUDIT REPORT
PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1353-PH) Public Disclosure Authorized
June 30, 1988 Public Disclosure Authorized Public Disclosure Authorized Operations Evaluation Department
This document has a restricted distribution and may be used by recipients only in the performance of # "r - * A* . -ft, 2 . . CURRENCY EXCHANGE RATES
Name of Currency (Abbreviation) Peso (P)
Period Exchange Rate
Appraisal Year Average US$ 1 = P 7.35 Intervening Years Average (1977-85) 1 = 10.50 Completion Year Average 1 = 18.53 FOR OFICIAL U ONLY THE WORLD BANK Washington. D.C. 20433 U.S.A. office Of OrctornWal Opeatmaoh Evaluatue
June 30, 1988
MEMORANDUM TC THE EXECUTIVE DIRECTORS AND THE PRESIDENT
SUBJECT: Project Performance Audit Report on Philippines Third Highway Project (Loan 1353-PH)
Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Philippines Third Highway Project (Loan 1353-PH)" prepared by the Operations Evaluation Department.
Yves Rovani
by Ram K. Chopra
This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorition. AL 6 IL61
PROJECT PERFORMANCE AUDIT REPORT
PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1352-PH)
TABLE OF CONTENTS
Page No.
Preface ...... Paae i Basic Data Sheet ...... 11 Evaluation Summary ...... IV
PROJECT PERFORMANCE AUDIT MEMORANDUM
I. PAST WORLD BANK SUPPORT TO HIGHWAY MAINTENANCE ...... 1 A. Lending Operations ...... *...... 1 B. Sector Work ...... *...... 5 II.* RESULTS OF WORLD BANK SUPPORT TO HIGHWAY MAINTENANCE ... 7 A. Overview *...... 7 B. Road Conditions ...... *.. 7 C. Funding ...... 8 D. institutions ...... 9 E. Workshops and Equipment ...... 10 F. Vehicle Weights and Dimensions ...... 11 III. CONCLUSIONS AND RECOMMENDATIONS ...... 12
PROJECT COMPLETION REPORT
I. PROJECT BACKGROUND AND SECTORAL SETTING ...... 14 II. PROJECT FORMULATION ...... 16 III. PROJECT IMPLEMENTATION ...... 18 IV. PROJECT COST AND BANK LOAN ...... 24 V. INSTITUTIONAL DEVELOPMENT ...... 26 VI. ECONOMIC RE-EVALUATION ...... 27 VII. THE ROLE OF THE BANK ...... 29 VIII. CONCLUSIONS * .. *...... *....,...... 29
Tables
1. Actual and Expected Project~ Implementation 2. Actual and Forecast Estimates of Project Cost 3. Actual and Forecast Disbursements 4. Compliance with Loan Conditions 5. Actual Traffic and Growth Rates 6. Vehicle Operating Costs
This document has a restricted distribution and MAY be use bY rMiPicnts-on1y In the Performaftce of their official duties. Its contents MAY not Otherwise be disclosed without World Bank authorization. 7. Ex-post Estimates of Economic Rates of Return
Maps
IBRD 12320: Third Highway Proje.t IBhD 12321: Other Project Elesents PROJECT PERFORMANCE AUDIT REPORT
PHILIPPINES THIRD HIGHMAY PROJECT (LOAN 1353-PH)
PREFACE
This is a Project Performance Audit Report (PPAR) on the Philippines Third Highway Project. Approved on December 23, 1976, the project was sup- ported by Loan 1353-PH for US$ 95 million, which were fully disbursed.
The PPAR consists of: (I) an Evaluation Sumn.ary and a Project Performance Audit Memorandum (PPAM), written by the Operations Evaluation Department (OED); and (ii) a Project Completion Report (PCR), drafted by staff of the Department of Public Works and Highways (DPWH), the implementing agency, and fl.nalized by staff of the World Bank's Asia Regional Office. The PCR was issued one and one-half years after loan closing. DPWH deserves full recogni- tion for its major contribution to the PCR.
The PCR has attempted to give an account of project experience without elaborating much on past or ongoing highway projects which all, including the third, were focused on highway maintenance. To give the Third Highway Project a wider perspective, OED has drafted a performance memorandum dealing with maintenance in all Bank lending to the Philippines highway sector. The audit agrees with the treatment of most other issues raised in the PCR or considers them as minor.
In preparation of the audit, OED reviewed the PCR against the President's Report, the Staff Appraisal Report (SAR), the legal documents, transcripts of Board proceedings, project files and other material. It also made use of information on the other Bank projects for the highway sector. Further, OED discussed the project with Bank staff and, during missions in November 1987 and February 1988, with government officials, road users, consultants and representatives of other aid agencies.
Following standard prozedures, OED sent copies of the draft PPAR to the Government for comments. No reply was received.
Bank staff eomments on the draft PPAM have been varied. One set of comments expressed concern about the PPAM's incisive critique of the main- tenance issue. Another set fully supported the PPAM and endorsed its recommen- dations. ii
PROJECT PERFORMANCE AUDIT BASIC DATA SHEET
PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1353-PH)
KEY PROJECT DATA
Appraisal Actual/ Estimate Forecast
Total Project Cost (US$ million) 196.2 242.4 Loan Amount (US$ million) 95.0 95.0 Loan Disbursed 95.0 95.0 Date Physical Components Complete* 09130/80 05131186 Proportion of Physical Componenta Completed by Original Schedule (Z) 100 34 Time Overrun (%) 0 125 Economic Rate of Return (Z) National Roads 18-3611 21-36 Minor Roads n.a.12 0-100 Road Maintenance Program n.a./3 n.a.
CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS (US$ million)
Bank FYs: 77 78 79 80 81 82 83 84 85 86
Appraisal 5.0 41.8 73.8 85.0 95.0 95.0 95.0 95.0 95.0 95.0 Actual 0 3.5 11.1 23.7 35.8 52.6 68.0 80.3 94.6 95.0 Actual as % of Appraisal 0 8 15 28 38 55 72 85 99 100
/I Staff Appraisal Report (SAR), Ln. 1353-PH, para. 5.07. The PCR, Ln. 1353- PH, pata. 6.3 quotes different figures.
/2 Only first-year benefit ratios calculated. SAR, Ln. 1353-PH, para. 5.10.
11 Only benefit-cost ratio calculated. SAR, Ln. 1353-PH, para. 5.12. iii
OTHER PROJECT DATA
Original Date Actual Date
First Mention in Files 05122/72 Government's Application - n.a. Negotiations (Completed) 11/12/76 11/12176 Board Approval 12/23/76 12/23/76 Loan Agreement 01/12/77 01/12/77 Loan Effectiveness 03/30/77 03/30/77 Loan Closing 06130/81 06/30/85
Follow-up Projects Fourth Highway Project (Ln. 1661-PH) Fifth Highway Project (Ln. 2418-PH)
Fiscal Year of Borrower January 1 - December 31
STAFF INPUT (Staff-Weeks)
BankFYs: 72 73 74 75 76 77 78 79
Identif./Prep. 5.4 1.3 14.3 13.2 33.8 4.7 Appr./Neg. 12.5 25.4 Supervision 8.5 17.3 15.8
Total 5.4 1.3 14.3 13.2 46.3 38.6 17.3 15.8
Bank FYs: 80 81 82 83 84 85 86 87 Total
Identif./Prep. 72.7 Appr./Neg. 38.0 Supervision 15.6 21.1 9.5 4.8 8.3 6.8 .9 5.8 114.4
Total 15.6 21.1 9.5 4.8 8.3 6.8 .9 5.8 225.1 iv
PROJECT PERFORMANCE AUDIT REPORT
PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1353-PH)
EVALUATION SUMMARY
Introduction
The Bank has financed seven road projects so far in support of the Philippine transport. Five projects, to which the Third Highway Project belongs, were made for the development of the (national) highways. The first was approved in 1971 and the latest in 1984. The two remaining projects, approved in 1980 and 1986, focused primarily on provincial and local (baran- gay) roads which constitute the lower tiers of the road system. Road transport is the dominant mode accounting for 80% of passenger and 60% of freight traffic in the country (PCR, Ln. 1353-PH, paras. 1.1, 1.2 and 1.4).
ObJectives
A 1968170 UNDP financed study identified poor maintenance as among the most serious issues facing the highway sector. To respond to this situation, the Bank gradually stepped up its involvement with maintenance, starting with the first highway project and proceeding so far to the fifth (PCR, Ln. 1353- PH, paras. 1.4, 1.5, 1.7 and 2.1; PPAM, para. 2).
With improvement of maintenance as its principal objective, the Third Highway Project set out to reconstruct or restore deteriorated roads, to return them to regular maintenance cycles; upgrade workshops and maintenance equipment; and improve maintenance management, procedures and operations. Attention was also given to adequate maintenance funding and enforcemevt of regulations governing vehicle weighte and dimensions. Truck overloading was a major cause of early road deterioration (PCR. Ln. 1353-PH, paras. 2.2, 2.5, 4.7 and 3.16; PPM, para. 7).
Implementation Experience
Project implementation suffered from various kinds of afflictions, and actual results fell far short of the plans. Implementation time was close to ten years, including a time overrun of six years. Under-achievements were particularly severe in the road restoration program, on which major h.pes were pinned in the campaign for better road maintenance. In the process of keeping implementation going, the government and highway authority introduced new contractual rules, regulations and procedures. Maintenance also received higher status in highways administration and policies (PCR, Ln. 1353-PH, paras. 3.1-3.24, 4.1-4.2, 4.5-4.6 and 5.1-5.3; PPAM, para. 8). v
Results
While maintenance progress to date has been gratifying in some areas, in others it has not. Some achievements are fragile. There are clear setbacks, and new ideas are few for getting the situation under control. Road condi- tions, only intermittently and partially monitored in the past, are not yet cause for satisfactiou at present (PPAM, paras. 16-27).
Budget allocations for highway maintenance appear to have been a moderate success, having risen from very low levels. But questions remain whether they are adequate for all required maintenance works and whether they are being spent for the right purpose (PPAM, paras. 21-22).
Institutional development has made fair progress in the last twenty years as mvintenance has been recognized as a high priority activity. Yet, these advances are seemingly not enough. One major unresolved issue is the limited attraction of public secior employment for skilled technical and managerial staff (PPAM, paras. 23-24).
Equipment management faces additional problems of its own - tightness of operating and investment budgets and the related imminent demise of the equipment rental system. Since long, equipment users under-report equipment use and thus reduce rental income (IAM, paras. 25-26).
To resolve the perennial problem of truck overloading, a new approach is being devised, with the blessing of the Bank. Unfortunately, the solution may not be as economic as it is being claimed (PPAM, para. 27).
Sustainability
The issue of highway maintenance in the Philippines has not yet been resolved. DespIte progress made, maintenance needs further development to make it a self-sustaining activity in the sector (PPAM, paras. 16 and 29).
Findings and Lessons
Highway maintenance has seemingly slipped into the background of govern- ment and Bank attention more recently, suggesting renewed confirmation of government comnitment to maintenance and a clear Bank statement about its future role. The latest Bank report on the Philippines transport sector almost ignores the maintenance issue completely (PPAM, paras. 13, 15 and 30).
To create new maintenance momentum, the government and the Bank should conduct their own evaluations of the maintenance situation and draw up new plans of action. Some useful guidance could be obtained from the Bank's recent paper on road deterioration in developing countries (PPM, paras. 14 and 31- 32). 1
PROJECT PERFORMANCE AUDIT MEMORANDUM
PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1353-PH)
I. PAST WORLD BANK SUPPORT TO HIGHWAY MAINTENANCEl1
A. Lending Operations
General
1. Road maintenance has been a recurrent issue in all World Bank ("Bank") lending to the Philippines highway sector. All five highway projects and both rural roads projects were either focused on maintenance or had significant components related to it. The issue had taken on significance because of the stakes involved: National highways total some 25,000 km; their capital stock (at current values) may be in the order of US$ 5 billion or more; and they carry most of the road traffic, which itself acceunts for some 802 of the country's passenger and 60% of freight traffic. Even small changes in the level at which highways are maintained can significantly effect the rate of depreciation of the roads, the cost for operating road vehicles and thus the country's total transport cost.
2. The maintenance issue facing the country was first documented in detail in the 1968/70 UNDP financed Philippines Transport Survey, for which the Bank acted as executing agency. In 1972, it became the main subject of a comprehen- sive Bar% financed study, completed in 1975. Since then, a series of Bank project related studies or reviews of maintenance has followed. In its own highway project documents, the Bank persistently drew attention to inadequate road viintenance, classifying it as the or one of the most serious highway sector concerns, and in particular under the third, fourth and fifth projects, it made substantial efforts at analyzing the perceived roots of the problem and devise suitable remedies.
First Highway Proiect
3. The (first) Highway Project (Ln. 731-PH), approved in 1971, addressed road maintenance issues through the financing of technical assistance (TA) to the Bureau of Public Roads (BPR), as the national highway administration was called at that time. Among other assignments, the consultants were to assist in implementing reforms in the organization of BPR, includ!ng the maintenance units, and to advise on road maintenance and workshop operations. Further, the
/1 This audit report deals primarily with maintenance of the Philippines national roads. Another OED report, scheduled for the near future, will focus on maintenance of provincial and barangay roads, the two lower classes of the country's (non-urban) road system. 2 government agreed in loan covenants to draw up a program for adequate main- tenance funding and control vehicle dimensions and ax-a-loads.I1
4. According to the Project Performance Audit Report (PPAR), somp progress was made in the introduction of adequate maintenance and axle load control, but it was slower than expected.1 Maintenance expenditures increased under tha project substantially, but lack of attention to maintenance continued to be a serious problem.14
Second Highway Project
5. The Second Highway Project (Ln. 950-PH), approved by end 1973, initiated the concept, expanded under the next three projects, of rehabilitating roads which had deteriorated because of poor maintenance and other conditions. The cost of the rehabilitation component was about US$ 53 million (452) out of total project cost of US$ 128 million. The project, further, continued techni- cal assistance services to improve road maintenance planning and methods and develop a five-year road maintenance plan, and it financed the purchase and installation of fifty portable and nine permanent weigh-bridges for use on national roado. The government gave assurances that it would draft detailed proposals for operating the weigh-bridges and enforce axle load regulations, and it agreed again to covenants on adequate road maintenance and axle load control.
6. By the account of the PPAR for the project, the road rehabilitation works were mostly implemented as planned, though in some cases with difficulties and delays./5 The portable weigh-bridges were procured and appeared to be "most- ly" in operating condition in 1980, as reported in the PPAR./6 Installation of the nine permanent weigh-bridges ran into various problems, and none was reported in the PPAR as being operational in 1980, one having been struck by lightning.17 The PPAR professed uncertainties about the effective use of the operable scales and, citing government officials, alluded to difficulties in enforcing the vehicle and axle load regulations./ The consultants completed their work on highway maintenance satisfactorily, according to the PPAR, but their recommendations were not necessarily followed./2 Overall, the PPAR
/2 Staff Appraisal Report (SAR), Ln. 950-PH, paras. 3.07, 3.18-3.21 and 4.08; and Loan Agreement, Ln. 950-Ph, Sections 4.04 and 4.05.
/3 PPAR, Philippines First Highway Project (Lt.. 731-PH), Highlights (page iv) and PCR, paras. 4...-4.13.
/ PPAR, Ln. 731-PH, Attachment I (PCR), paras. 4.06 and 4.07..
/I PPAR, Ln. 950 PH, para. 5.
/6 PPAR, Ln. 950-PH, para. 25.
/7 PPAR, Ln. 950-PH, para. 25 and PCR, Table. 6.
1I PPAR, Ln. 950-PH, paras. 24 and 25.
19 PPAR, Ln. 950-PH, para. 12 and PCR, para. 3.17. 3 concluded, maintenance of the national highway system remained rather unsats- factory./10
Third Highway Project
7. The Third Fighway Project (Ln. 1353-PH), approved in late 1976, made a frontal attack on inadequate highway maintenance, committing all its con- siderable resources to the task. For a total project cost of US$ 196 million, and guided by the groundwork laid under the previous projects, it aimed at: reconstruction of national and minor roads deteriorated because of poor maintenance, traffic conditions and inferior design; implementation of a Road Maintenance Program, consisting of the large-scalc restoration of dilapidated roads and massive investments in workshops and maintenance equipment; and various types of maintenance related technical assistance.11 This time, vehicle weights and dimensions did not come in for special treatment, though the Loan Agreement carried the by now familiar covenant.112 The rationale for the road restoration program, and in fact also for road reconstruction, was to bring the roads back to conditions in which they could be maintained. Other project agreements, including one on adequate funding of road maintenance activities, were meant to tighten up the maintenance case./13
8. Implementation of the project suffered from various kinds of afflictions, and actual results fell far short of the plans. When the project was ter- minated in 1986 after a six years time overrun, all road reconstruction had apparently been completed, but under-achievements were severe in the restora- tion program: some unattended works were subseluently deleted and others were included in the Fourth Highway Project (Ln. 1661-PH). The planned investments in workshops and maintenance equipment were undertaken, by and large, with some delays. The issue of road maintenance was not to be resolved during implementation of this project (1977-1986), as the SARs for the fourth project and the Fifth Highway Project (Ln. 2418-PH) made abundantly clear. Written in 1979 and 1984, they provide an item-by-item checklist for what can go wrong on road maintenance. 114
110 PPAR, Ln. 950-PH, para. 10.
Ill SAR, Ln. 1353-PH, paras. 4.04-4.19.
112 Loan Agreement, Ln. 1353-PH, Section 4.05.
/13 Loan Agreement, Ln. 1353-PH, Section 4.03.
114 Against the background of labored implementation stretched out to May 1986, an 1986 Bank document reported that the Third Highway Project had been "satisfactorily completed in June 1985". Refer to SAR, Second Rural Roads Improvement Project, Ln. 2716-PH, para. 1.07. 4
Fourth Highway Proiect
9. The fourth project was appraised in 1977, within one year of the third, but approval was postponed until 1979, the year in which tangible progress on the third finally could be observed. In its principal features, the fourth project was a copy of the third. Once more, it financeds the reconstruction of national and some feeder roads, which had succumbed to poor maintenance and traffic; the restoration of national roads, also deteriorated, primarily, for want of maintenance; the construction or improvement of workshops, combined with the acquisition of equipment and spare parts; and a large chunk of maintenance related consulting services. An additional item was seven per- manent and 32 portable weigh-bridges to beef up the troubled axle load control program, and again, there was the now familiar vehicle dimensions and axle load covenant. Total project cost, almost exclusively linked to maintenance activities, was US$ 205 million./15
10. Project implementation dragged out for several years, and the loan was finally closed on June 30, 1987, as compared to the original date of December 31, 1983. In late 1987, about 80% of the road restoration program were accom- plished, and the balance was transferred to the fifth project. The rate of workshop completion looked dismal, but more progress was expected by the end of the year. The training program and the equipment procurement were com- pleted.I16 A detailed account of the project's-histoty has yet to be given. In 1984, at a time when the project was supposed to have been completed, the SAR for the fifth project reported initial delays on a broad front of activities, which, at least for some time, were contained through the prescription of two ad hoc action programs. 117 Whatever progress the fourth project was yet to make on highway maintenance, it did not sound very promising at the writing of the fifth project's SAR. Though not initially foreseen, the fourth project produced a study on a revision of regulations governing vehicle weights and dimensions.118
Fifth Highway Project
11. The fifth project of 1984 was the culmination so far of the Bank's labor at improving the Philippines' highway maintenance. This time, the SAR tried to get at the bottom of the muddled maintenance business, exploring new
/15 SAR, Ln. 1661-PH, paras. 3.06-3.26; and Loan Agreement, Ln. 1661-PH, Section 4.05.
/16 Bank project files.
/17 SAR, Ln. 2418-PH, para. 1.20.
/18 SAR, Ln. 2418-PH, para. 2.08. 5 avenues of actions, including maintenance monitoring and cost accounting. As budget allocations for maintenance had gradually achieved respectable levels, but as actual maintenance and road conditions had not, new questions had to be asked. Another emerging theme was the dilena of attracting and retaining competent staff in the public sector. The search for answers may have been intensified by the realization that soon the question might surface what had been achieved so far, after a string of projects focused on maintenance. In fact, in pre-Board inquiries, one Excutive Director asked for explanations why maintenance was so neglected and whether previous projects had carried cove- nants on maintenance; and another sought to determine, how it was possible for maintenance to deteriorate so substantially, given the Bank's long involvement in highways, particularly institution building./L9 Total project cost was about US$ 190 million, of which close to 50% was related to maintenanc*, for continuing the highway restoration programs of the previous loans and for consultants services. A bridge reconstruction program, improvement of a national highway and miscellaneous consulting services accounted for the remainder of cost. Vehicle weights and dimensions got some mention in the SAR/20, but lost the traditional place in the Loan Agreement, possibly because the fourth project's study was on the verge of producing a solution.121
12. According to late 1987 Bank records, implementation overall was one and one half years behind schedule. The road restoration program was on target. Technical assistance for strenghtening highway maintenance capabilities was ongoing. How well maintenance was jeing performed was not determined./2 Raising maintenance to adequate levels and improving highway management, particularly execution of maintenance, was among the specific objectives of this project./23
B. Sector Work
13. The Bank's determined push under its projects for better road maintenance in the Philippines was only faintly mirrored in its transport sector work. In other instances, the Bank has used free-standing sector approaches to launch new initiatives or reinforce existing ones. The sector work performed on the Philippines reflected the seriousness of the maintenance issue only in part, and it did little to expand on themes developed under two Bank policy papers on road maintenance, one written in 1979 and the other in 1986/87.
119 Bank staff memoranda to files dated May 15 and 16, 1984.
120 SAR, Ln. 2418-PH, parse. 2.08 and 2.11.
/21 SAR, Ln. 2418-PH, para. 2.11.
/22 Bank project files.
/23 SAR, Ln. 2418-PH, para. 3.03. 6
14. The first policy paper, published as Board document (SecM79-283) under the title -'The Highway Maintenance Problem", gave a panoramic view of the Bank's uncomforting highway experience and sketched out guiding principles of future Bank efforts on maintenance. The second document, entitled "The Road Deterioration Problem in Developing Countries"124, laid out the vast dimen- sions of the problem in the developing world and elaborated on a set of recommendations for Bank and country policies. If nothing else, the second document was meant to raise awareness about the seriousness of the maintenance issue in the Bank and governments. The same paper also gave pointers as to how individual countries ranked in their maintenance performance, placing the Philippines somewhere into the middle of the field./25
15. From 1970 to 1988, the Bank produced four sector papers on the Philip- pines transport, the first in 1973, the second in 1976, the third in 1983 and the fourth in 1988/26. The first three gave modest coverage to the maintenance topic. The fourth dropped the item completely, except for some scattered comments on funding, making the reader wonder what kind of priority highway maintenance had in the Bank's future work on the country.
124 The Road Deterioration Problem in Developing Countries, Draft dated September 1986.
125 The Road Deterioration Problem in Developing Countries, Tables 2.3 and 6.1.
/26 Current Economic Position and Prospects of the Philippines, Volume II (Special Annexes), Annex 2, The Transport Sector, Rep. No. 78a-PH, dated 1973; Transport Planning in the Philippines, Rep. No. 1017-a-PH, dated May 4, 1976; Report on the Transport Sector in the Philippines, Rep. No. 3916-PH, dated September 14, 1983; and Philippines Transport Sector Review, Rep. No. 7098-PH, dated March 31, 1988. 7
II. RESULTS OF WORLD BANK SUPPORT TO HIGHWAY MAINTENANCE
A. Overview
16. A 1988 review of Bank and other documents, discussions with government officials, Bank staff, consultants and observers, and audit mission visits reveal a picture of highway maintenance, which is incomplete but remains a matter of concern. While maintenance progress to date has been gratifying in some areas, in others it has not. Some achievements are fragile. There are clear setbacks, and new ideas are few for getting the situation under control. The issue of adequate highway maintenance continues to be alive, almost 20 years since the Bank became involved in it.
B. Road Conditions
17. As a complex issue, improvements in road maintenance are usually sought in multiple ways. Among the tasks typically performed are the strengthening of maintenance institutions, the streamlining of procedures, the training of staff, the provision of adequate funding, upgrading of cost accounting and financial controls, the supply of equipment and control of vehicle dimensions and weights. In one form or another, they all have been or are being pursued under the Bank projects or actions initiated by the Philippine government. But after all pieces have been put together over the years, the question finally is, in what condition are the roads.
18. Unfortunately, engineering data on the country's highway conditions are scarce. While the SARs of the five highway projects are laced with comments on the lamentable state of road conditions, they contain close to no statistics and analyses on the topic. All SARs combined give condition ratings for only two years, 1977 and 1982, but these are crude, tentative and unsuitable for comparative analysis./27 The sector reports exhibit no such information at all. The SAR for the fourth project noted that the Philippines highway autho- rity was committed to recording road conditions and that updates would be provided annually./28 The audit was unable to locate one condition report.
/27 The 1977 information was given in SAR, Ln. 1661-PH, Table 4.5. About 282 of national roads were judged as being in good, 35% in fair, 91 in bad and 28% in very bad condition. - The 1982 data were presented in SAR, Ln. 2418-PH, para. 3.10. In this case, a preliminary data collection suggested 31% of the roads to be in good condition, 54% in fair (but requiring periodic maintenance "shortly") and 15% in poor condition. No attempt was made in this SAR to evaluate the reliability and underlying methodology of the 1982 data.
/28 SAR, Ln. 1661-PH, para. 2.05. 8
According to the Fifth Highway Project, regular field inspections by the Bureau of Maintenance (BOM) of the highway authority, to conduct evaluation ratings of national roads, were instituted only "recently" (SAR written in 1984)./29 At the time of the last audit mission, these evaluations had been discontinued.
19. In the view of observers, including Bank staff working on the Philippines transport, there have been swings in the conditions of the national highways over the years. Not considering those roads which ultimately were restored, some observers believe to have seen improvements. Others suggest that the more recent change in government with the widespread dismissal of government officials and staff has provided a setback for the roads, after matters had become noticeably better. In the same vein, some analysts take a pessimistic view of development of highway conditions in the near future. Making random field observations but lacking points of reference in earlier years, the audit mission collected mixed impressions about the present status of the roads.130
20. Based on targets established under the fifth project, it would appear, that from 1977 to 1990, about 13,000 km will have been restored, about 7,500 km through resurfacing and 5,500 km through other works (primarily on shoul- ders and ditches)./31 As welcome as these achievements will be, they may not be enough to arrest a deterioration process, which in 1977 was already in full motion and which may not have been halted through "regular" maintenance works undertaken since.
C. Funding
21. Budget allocations for highway maintenance appear to have been a mole- rate success. As a result of continuous representations by the Bank and the government's own initiatives, maintenance funding has followed a general trend of increases, with nominal and (inflation adjusted) real declines in between. Until 1975, financing came from the Highway Special Fund (HSF) and the general budget, but then general revenues remained the only source as all special funds were abolished./22 Progress was also made in arranging a calamity budget separate from the regular maintenance budget, to take care of frequent road
/29 SAR, Ln. 2418-PH, para. 2.36.
130 The mission saw highways in every category of conditions. Some roads had deteriorated to the point where nothing else but reconstruction would help. Poor conditions could be observed for all types of road surfaces- asphalt, concrete and gravel. During many days of travel in February 1988, in the dry season, no maintenance work crews could be seen, except in one district of a highway region which has a reputation for good maintenance works.
131 SAR, Ln. 2418-PH, para. 2.39.
/32 SAR, Ln. 1353-PH, para. 3.14. 9 damage caused by weather conditions. Between 1975 and 1983, maintenance expen- ditures for national highways were reported as having ranged between 16% of total highway expenditures at the beginning and 112 at the end, figures which the fifth highway project aimed to increase.133 Global maintenance allocations to the sector are channeled to individual roads through the EMK (equivalent maintenance kilometer) system, which was defined and introduced under the early Bank projects. The EHK system is meant to relate the maintenance budget for a road to the maintenance needs.
22. As total maintenance budgets reached respectable levels, two questions had gradually to be addressed, whether the budgets were adequate and whether the funds were spent for the right purpose. A related question, noted earlier, dealt with the results which could be shown for the spending. Neither to the first or second (or third) question have good answers yet been found because of flaws in maintenance monitoring and cost accounting, as the Fifth Highway Project of 1984 explained.134 According to a preliminary assessment by the highway authority, based on 1982 and 1983 experience from pilot operations, the allocation may have been sufficient for routine but not for routine and periodic maintenance combined.135 If the assessment was correct and still holding true, it would cast a deep shadow over the declared policy of bringing the network gradually back to conditions suitable for regular maintenance. The issue of ultimate destination of funds could be equally serious. Many well- placed observtrs believe that due to inefficiencies, diversion to other highway activi.ties and unethical practices, huge portions of maintenance allocations are still being lost.
D. Institutions
23. The institutional development of highway maintenance made fair progress in the last twenty years. After a long period of subordination to other highway functions, maintenance gradually found its own place as a major activity of the highway authority, nurtured by the government's recognition that maintenance makes economic sense. Among other achievements, maintenance procedures were streamlined, a funding mechanism was instituted and the units at the authority's central office responsible for maintenance and equipment were elevated to the status of Bureaus, giving them high organizational rank. Yet, these advances are seemingly not enough, and the danger is ever present that lapses in making all system parts work in concert will lead to serious setbacks. Maintenance needs attention and fine-tuning at all times, virtually on a daily or weekly basis, which is a very basic idea behind effective management of highway maintenance.
/133 SAR, Ln. 2418-PH, para. 2.38 and Table 2.1.
/34 SAR, Ln. 2418-PH, paras. 2.36 and 2.37.
/35 SAR, Ln. 2418-PH, para. 2.37. 10
24. Development of technical and managerial staff expertise was a critical and frustrating component of institution building for maintenance. Over the span of the five Bank projects, explicit training programs were instituted, the huge technical assistance components left some marks, and progress was made simply through execution of maintenance works. But the expertise acquired was preserved only in part as many maintenance staff on their own or against their will transferred to other posts in highways, in other government depirt- merts or the private sector./26 Unattractive employment conditions in public service were one reason for staff departures. Another was the lack of glamour and tediousness of maintenance work. To offset the exodus, the highway ad- ministration would on occasion recruit consultants, but no doubt at high cost./37 The issue facing highway maintenance, obviously, is less to develop requisite technical and managerial skills than to retain and deploy those staff who have them.
E. Workshops and Equipment
25. The Bank showed constraint in financing maintenance equipment, but sup- ported a large program for workshop construction and a series of consulting services for streamlining equipment management. At one time at least, in the early seventies, the highway sector was believed to be flooded by equipment, a large portion of it supplied by Japanese aid. A cursory look at equipment to- day reveals a situation, which is characterized by many seemingly oversized workshops, large numbers of deadlined and unserviceable pieces awaiting, since long, their disposal and equally large numbers of others out of service and due for repairs. The Bank, under the fifth project, resisted suggestions to finance more maintenance equipment and workshops.
26. The audit mission did not find clear evidence about the adequacy of the stocks on call but notes that their size or condition, composition and deploy- ment are potentially a problem. Difficulties which have been confirmed are the tendencies of competent mechanics to leave the service, the tightness of investment and operating budgets and the imminent demise of the equipment rental system. Perhaps, limitations on investment budgets are a blessing in disguise, producing economies in equipment utilization, but the squeeze on operating budgets frustrates efforts at prolonging equipment life. Starved of
/36 For a recent reference to these problems facing the highway sector, refer to SAR, Ln. 2418-PH, paras. 1.15 and 2.19.
/37 Another measure bringing temporary but not lasting relief was the J..sti- tution of regulations, under which beneficiaries of overseas training programs were required to remain in public service for a minimum time. See SAR, Ln. 2418-PH, para. 15. - In the longer run, some improvements may also materialize from an expansion of contract maintenance works, which is the subject of an ongoing ADB-financed study by consultants. Refer to ADB, SAR, Fourth Road Improvement Project, Appendix 24. So far, it is too early to predict how and when future highway maintenance will be shaped as a result of the study. 11
operating funds, workshop managers struggle to adhere to meaningful main- tenance standards. At least by design, operating budgets of workshops are supposed to be fed by rental income from equipment users, primarily the district offices of the highway administration. Tolerated by management of the highway authority, the districts since long under-report equipment use and under-pay accordingly, thus stretching their own financial resources. This practice, of course, also relieves pressure on the districts to minimize equipment idling and make decisions on maintenance operations based on full equipment cost./38
F. Vehicle Weights and Dimensions
27. The projects' efforts at controlling axle loads were largely unsuccess- ful, the problem being primarily one of enforcement. In a new attempt to get the matter resolved, another concept is now being developed. Based on the fourth project's study and tentatively endorsed by the Bank/29, it would increase legal axle loads to a level which reportedly would make them among the highest in the world./40 The increase would be part of a larger package of revising vehicle weights and dimensions. Another element of the new concept would be the creation of a special police in the highway administration to enforce the new regulations. Apart from the obvious benefits for enforcement, the new approach is thought to be economically sound, as it would minimize overall economic cost of road infrastructure and vehicle operations. The Bank, in this context, makes the point that many road pavements have already been built to sustain the heavy loads and, therefore, large future outlays for pavement strengthening wo-!ld be contained./41
, 28. Regrettably, the story about the adequacy of existing pavements is hardly correct, as the study itself is careful to note./42 Adequately reinforced pavements, which can carry heavy loads, are still quite few, which may suggest
138 Interestingly, the fifth highway project did not mention the existence of an equipment rental system, which is often a significant piece of information in other highway projects. The fourth highway project refers to the system briefly, without commenting on its performance. See SAR, Ln. 1661-PH, para. 2.13.
139 Pavement and Axle Load Study, Final Report (3 volumes), October 1985. For the endorsement, refer to Philippines Transport Sector Review (1987/88), paras. 2.4-2.6 and Annex 1, Page 3.
/40 Among the new regulations would be an increase in the permissable weight transmitted to the road surface by a single four tire axle from 8 to 13 metric tons. For a tandem axle, the increase would be from 14.5 to 26 tons.
/41 Philippines Transport Sector Review (1988), paras. 7 (Executive Summary) and 2.5 and Annex 1, Page 3.
/42 Pavement and Axle Lead Study, paras. 2.2.2.1 - 2.2.3 and 13.6. 12 that the economics of the new axle load and pavement program may yet have to be demonstrated. Even if economic, large programs for upgrading highway pavements would be difficult to finance, as the study also points out. Apart from all this, there are also the issues of heavy and overloaded trucks on provincial and barangay roads, which seldom have suitable pavements, and the adequacy of future maintenance on any type of roads in the country. 13
III. CONCLUSIONS AND RECOMMENDATIONS
29. The simple and fundamental conclusion of this report is that the issue of highway maintenance has not yet been resolved in the Philippines, despite the recurrent efforts by the government and the Bank. More progress is needed to transform maintenance into a self-sustaining activity in the highway sector and raise its performance level.
30. The conclusion seems the more important, as highway maintenance has seemingly slipped into the background of government and Bank attention more recently. The often evoked government commitment to good maintenance needs new and credible confirmation, and the Bank should come out clear about where it stands and what, if any, future support it is prepared and competent to offer. A transport sector report, explicitly aimed at setting the stage for future Bank assistance to the sector and virtually ignoring the topic, is not well positioned to move the Bank towards "transport sector loans ... with an emphasis on policy and institutional reforms."/A3 Highway maintenance remains a candidate for such reforms, and to design and monitor reforms, a solid understanding of the issues is essential.
31. Foremost of all, the government and the Bank should conduct their own in-depth evaluations about the current maintenance situation, perhaps making use of this audit. The PCR for the Third Highway Project only touched on these subjects to meet the formal requirements of the project cycle and did not serve as a tool fot engaged reflection. The implications of good or bad highway maintenance for the national economy would amply justify the venture. As a first step, the quality of information about the maintenance environment, activities and results should be raised, to provide a sound basis for analy- sis.
32. Ultimately, the evaluations should be merged into plans of action which usefully would draw on the wealth of suggestions made in the Bank's recent paper on road deterioration. This exercise could also be the occasion for the Bank to review its stance on vehicle weights and dimensions or give a more rational account of the story, and advance its thinking about the supply of technical expertise to the public sector. The last topic, of course, goes beyond the confinements of the transport sector. Without prejudicing focus on other points made in the Bank's road deterioration paper, the audit believes there is merit in the ideas to raise public awareness about maintenance and create a road inspectorate independent of the highway authority, to certify road conditions.
/43 Philippines Transport Sector Review (1988), page x, para. 36. Bank staff note that there is no disagreement between the Government and the Bank on the maintenance issue. The problem is rather one of implementing agreed policie - 14 -
PHILIPPINES
THIRD HIGHWAY PROJECT (LOAN 1353-PH)
PROJECT COMPLETION REPORT
I. PROJECT BACKGROUND AND SECTORAL SETTING
The Transport Sector
1.1 Since the mid-70s, the Philippine gross national product has increased by an average of about 6% p.a. This has been due to growth in both the agriculture and industry sectors of the economy which in turn gave rise to significant growth in the demand for transport. The transport sector's con- tribution to economic development can be measured, in part, by comparing transport growth rates with those of the economy as a whole and its main sectors. Since the 1970s, the transport sector has been growing faster than CNP as a whole, at the rate of 92 p.a. compared to about 7% p.a. for industry and 4.5% for agriculture. In cargo traffic, air transport grew at the annual rate of 18.7% p.a., followed by water and road transport at 12.0% and 6.7%, respectively, while on the railway it declined 2.22 p.a. The rate of increase in passenger traffic has been 6.5% p.a. for roads, 8.22 p.a. for shipping and 2.9% p.a. for air transport, while it declined about 2.9Z p.a. on the rail- way. During the 1980s the transport sector is expected to continue expanding in step with, or slightly ahead of, GNP growth.
1.2 The Philippine Government's basic objective has been to increase transport capacity in line with projected traffic growth. Due to its geography, the Philippines depends to a great extent on interisland shipping and ferry services to link the main island of Luzon with the other islands. The transport system is predominantly bimodal with road and water transport generally complementing rather than competing with each other. Road transport handles 80% of the country's passenger movements and 602 of the freight move- ments compared with water transport (8% of passenger and 40% of freight traffic). The railways and air transport handle the remaining 122 of passenger traffic and a small volume of freight (less than 12). The overall transport system is reasonably well balanced and there is no substantial uneconomic allocation of traffic among the various modes.
1.3 In order to accommodate the rapidly grQwing transport demand, the Government has undertaken large investments in infrastructure and also helped to create a generally competitive transport industry. The infrastructure investments have been complemented by considerable efforts to improve the efficiency of the transportation system through the establishment and strengthening of institutions to plan, construct, maintain and operate the facilities and to provide services. The Bank has actively supported the Government's institutional development efforts by seconding (1973-75) a high- way engineer to the MPWH under the Second Highway Project. Since then, the MPWH has received significant technical assistance under successive highway projects and has developed into a good project planning and executing agency. - 15 -
1.4 The Bank has played an active role in advising and assisting the Philippine Government in the development of its transport sector. A summary of Bank investments follows:
Project Approval Loan Amount year No. (US$ m)
1. Highway I 1971 731 8.0 2. Highway II 1973 950 68.0 3. Highway III 1977 1353 95.0 4. Highway IV 1979 1661 100.0 5. Rural Roads I 1980 1860 62.0 6. Highway V 1984 2418 102.0 7. Rural Roads II 1986 2716 82.0 Subtotal 517.0
10. Ports I 1961 290 8.5 11. Ports II 1973 939 6.2 12. Shipping I 1974 1048 20.0 13. Ports III 1980 1855 67.0 Subtotal 101.7
Total 618.7
The Road Subsector
1.5 Transport was an important part of the overall Government policy strategy after martial law in 1972 when the Integrated Reorganization Plan (IRP) was launched. The Government's investment policy specifically addressed road development (over 75% of all transport investments) largely to meet demand and also because interisland shipping is mostly privatized. Most of the investment originally went into developing adequate all-weather paved national roads to serve the most developed regions of the country. Subse- quently, in the 1980s, the Government has invested significantly in the exten- sion and rehabilitation of rural roads. The public road network now totals about 155,000 km, of which 25,100 km are national, 28,800 provincial, 15,900 city and municipal, and 85,200 barangay roads. The network is, in general, quite adequate in location and size, but suffers from many deficiencies. Only about 14% of the total network is paved. The condition of many roads is poor because of lack of maintenance and damage from overloaded vehicles. Missing or weak bridges diminish the usefulness of many existing roads, and in some remote areas access roads are scarce. Road classification is often arbitrary as it is not always based on function. The Bank is addressing some of these deficiencies in its ongoing road projects. - 16 -
1.6 Motorized traffic on all public roads has increased steadily, averaging 5.2% p.a. growth over the last 15 years. The number of registered four-wheel (or more) motor vehicles amounts to 16 per thousand persons, com- pared to 10 in Korea, 15 in Thailand, and 49 in Malaysia. The country's transport system is centered on the capital, Manila, with the road and rail systems in Luzon and the whole country's maritime and air transport systems radiating out to other areas. The flow of traffic follows a similar pattern, with domestic and imported manufactured goods going out of Manila to other areas and agricultural and other products coming into Manila. After Manila, Cebu is the most important traffic and transport focus.
1.7 To provide a better basis for transport investment planning, a UNDP- financed transport survey was carried out by consultants in 1968-69 with the Bank as executing agency. The survey highlighted the general lack of adequate capacity, standards and maintenance operations in all modes of transport. The survey provided the basis for the Bank's First and Second Highway Projects which financed high priority national roads and some rural roads in Luzon and Mindanao islands. The projects also included components for (a) extensive institution building in the MPWH; (b) formulation and revisions of transport sector policies such as user charges and axle load restrictions; and (c) the provision of workshops and equipment for road maintenance.
1.8 The Third Highway Project thus continued the road reconstruction and improvement efforts of the two previous projects as well as provided for extensive highway maintenance equipment procurement and the building of work- shops. This report reviews the progress made under the Third Project based on information provided by the MPWH, a mission to the Philippines and a review of the Bank's files in Washington. Bank staff who are iamiliar with the project have also contributed to this PCR.
II. PROJECT FORMULATION
Preparation Stage
2.1 The Third Highway Project was identified from the findings of two separate studies, one for road reconstruction and improvement, and a second for highway maintenance. The road improvement plans and their technical and economic viability were assessed in the UNDP-financed Road Feasibility Studies II which was carried out by Norwegian and Danish consultants fron Jan%ary 197! to June 1975. Their final report (of June 1975) showed the feasibility of reconstructing and improving a total of about 1,150 km of national roads and about 500 km of minor roads. From these, 540 km of national highways and 270 km of minor roads were selected for the Third Highway project; the remainder was to be financed under the Fourth Highway project. The highway maintenance component arose from a study carried out by Danish and American consultants as part of the technical assistance services included under the Second Highway Project (Loan 950-PH). In a report dated April 1975, the study proposed a five-year maintenance program for national roads and recommended improving the maintenance operations by strengthening the planning and organization of the work, budgets and staff. In addition, a large program for the repair of - 17 - existing road maintenance equipment, and the purchase of new equipment, workshop machinery, tools and spare parts to implement the maintenance programs was recommended. Final designs for both components were completed mostly by Local consultants supported by foreign firms for the national roads and by the MPWH regional offices, assisted by a foreign consulting firm, for the minor roads.
Project Objectives
2.2 The objectives of the project were to assist in improving the road network, mainly in the Visayas and Mindanao Islands and in implementing the first phase of a road maintenance program in Luzon Island. In addition, the objectives included (a) improving the maintenance of the national roads and the minor roads; (b) conducting studies to identify future national and minor roads improvements; and (c) providing technical assistance and training for staff of the MPWH.
Appraisal Stage
2.3 -he appraisal mission, composed of an engineer, an economist and the Bank's training advisor, visited the Philippines in May 1976 and reviewed the project documents. These included the detailed engineering, economic evaluation, bid documents and other information requested previously by the Bank. The only real issue raised concerned the uncompleted detailed engineering which affected the precision of Lhe cost estimates and the loan amount.
Negotiations
2.4 Negotiations took place in Washington from November 8 to November 12, 1976. The focus of discussions during negotiations was the inclusion of the road restoration component (as part of the Five-Year main- tenance program) an4 the Bank requirement that the right-of-vey be acquired as a condition prior to approving the award of contracts for construction or improvement of the project roads. The proposed financing of the road restoration component involved an additional loan amount of US$10.0 million (equivalent to 40% of the ;otal cost) to cover foreign costs. The inclusion of this component was requested by Government during negotiations and the Bank agreed since the appraisal mission had already assessed the whole Five-Year maintenance program's (including the road restoration) feasibility.
Project Description
2.5 The project as approved consisted of the following:
(a) the construction and improvement of 10 national road sections totaling 500 km and 16 minor road sections totaling about 230 km;
(b) the implementation of the first phase of a Five-Year Road Maintenance Program comprising: (i) the construction or enlargement of 5 base and 23 area workshops on Luzon Island; (ii) procurement of road maintenance equipment including spares, hand tools, workshop - 18 -
cools and machinery; (iii) procurement of spares and components for existing equipment; and (iv) restoration, to a maintainable condition, of deteriorated sections of the national road network included in the first two years of the Five-Year Program;
(c) consulting services for: (i) supervision of the construction and improvement of roads in (a) above; (ii) feasibility studies of about 1,400 km of national roads, 800 km of minor roads and seven ferry crossings to be followed by detailed engineering of elements found justified; (iii) technical assistarce to strengthen the MPWH and to help implement the road maintenance program in (b) above; (iv) designing and supervising the construction oi workshops in Luzon Island; and (v) training of MPWH personnel.
2.6 The appraisal report, No. 1297a-PH was dated Decemer 10, 1976. The project was approved by the executive directors in December 1976, and Loan Agreement No. 1353-PH (US$95.0 million, for 20 years including four and a half years of grace with interest at 8.7% per annum) was signed on January 12, 1977, and became effective on April 12, 1977.
III. PROJECT IMPLEMENTATION
Overview
3.1 Road reconstruction and improvement works were originally scheduled for completion by October 1980, but due to initial delays in contract awards, the failure of contractors, and budgetary constraints that were caused by the difficult economic environment, some of the roads were not completed until late 1986. Similarly, the maintenance program and the other project components had lengthy delays due mainly to budgetary, auditing and admin- istrative constraints. As a result, the original loan closing date oi June 30, 1981 was extended until January 15, 1986.
Construction of National Roads
3.2 The national roads were divided into fourteen separate contracts for international biddfng among prequalified contractors, ranging from US$2.7 mil- lion to $8.0 million, and averaging US$5.7 million. All bids ranged from 13% to 33% (an average of 22%) below approved Government estimates. Originally, eleven contracts were awarded to local contractors, two contracts to a Korean- local joint venture and one contract to an Italian firm. The individual contracts and corresponding bid prices are listed in Table 1.
3.3 Construction begun in early 1978 but all contracts experienced such extensive delays that, by the end of 1981, almost all were making very little or no progress at all. The most important reasons for this were:
(a) poor contractor job organization and lack of managerial skills; - 19 -
(b) shortage of equipment and construction materials and lack of working capital;
(c) unpredictable natural and geological formations which affected at least four contracts and unfavorable weather conditions, aggravated by unusually frequent and heavy typhoons; and
(d) the adverse economic conditions of 1980-1983 which saw repeated, major devaluations of the peso, very tight cash position of the contractors and Government, high interest races and difficult credit conditions.
3.4 For five contracts (Bacolod-Pontevedra, Pontevedra-Kabankalan, Zarraga-Passi, Aglayan-Kibawe and Passi-Dao-Sigma), the delays and implementa- tion problems were so serious that they were terminated by end-1979. The Bacolod-Pontevedra and Pontevedra-Kabankalan contracts were taken away from local contractors and subsequently awarded to a Korean firm after a rebidding in August 1979. The Korean firm started work in early 1980 and completed both contracts in February 1982.
3.5 Delays in the completion of Zarraga-Passi contract resulted from the failure of three successive contractors. The first firm, a newly organized local contractor, was quickly crippled by lack of funds, equipment and managerial capabilities; this was compounded by competing internal organizational interests. The result of this was that the contractor requested termination within one year of starting work. A second local contractor took over the project (at the same cost) but again lacked equipment and adequate funding, and gave up in less than two years. The third contractor, also a newly organized joint venture of three local contractors, took over the contract, but was faced immediately with serious internal organization difficulties and was ready to terminate the contract. The Government at this point was reluctant to terminate (and rebid) the contract. Instead the Government extended the contract and allowed the con- tractor to reorganize himself. This led to successful project completion by June 1986.
3.6 The contractor on the Aglayan-Kibawe Road also experienced such difficulties that after one year the Government agreed to the consultant's recommendation to terminate his contract and award it to another contractor who was then performing well on an adjacent contract. However, the first contractor contested the termination; this resulted in work stoppage for more than two years and his eventually being reinstated by legal action in late 1981. Completion was further delayed when dam construction in the adjacent areas by the National Power Corporation flooded the road improvement site and about 9 km of roads had to be relocated in late 1983. The road was finally completed in late 1986.
3.7 The Passi-Dao-Sigma contract was first awarded to a Korean-Filipino joint venture but the contractor failed to comply with the implementation schedule. The contract was terminated and subsequently awarded to the joint venture of local contractors which was about to complete the Iloilo-Jaro diversion road. The contract was substantially completed by mid-1985. - 20 -
However, two successive typhoons, one with 100-year magnitude, caused severe damage to about 2.0 km of the finished road. The type of repairs which the Government plans to complete before the next typhoon season is still being studied but the road is being maintained and is passable to traffic at all times.
3.8 The quality of construction on the national roads was good with a few exceptions, notable of which was the reconstruction of slips caused by previously undetermined geological formations along the Sayre highway in Bukidnon and the Naga-Toledo road in Cebu, and the reconstruction of four blocks of the reinforced concrete deck of the Iloilo Bridge along the Iloilo- Jara diversion road. The Local contractors who did most of the civil works were able to complete a high quality job which meets international standards. The performance of the consultants was also quite adequate. A total of 529 km of national roads were constructed under this project component.
3.9 New construction techniques introduced included:
(a) slip-form construction for the pier, and construction-wagon method for the deck of the Atugan Bridge on the Sayre highway;
(b) post-tension method for the reinforced girders for most bridges; (c) bamboo reinforced earth-fill embankment for the reconstruction of the slip along the Naga-Toledo road in Cebu province; and
(cf) thin-shell pre-cast reinforced concrete for the deck slab for four bridges along the Iloilo - Zarraga - Passi - Dao - Sigma roads.
Minor Roads Construction
3.10 The minor roads component involved sixteen road sections contiguous to the national roads which, except for the Dawatan-Banate road, were grouped into eight contract packages ranging from US$360,000 to US$3,000,000. Dawatan-Banate road was made a part of the contract package for the Jaro- Barotac Viejo road of the national roads component.
3.11 The objective was to complete the minor roads at the same time as the completion of the adjacent major road contracts. In order to do so, two of the Negros minor roads and the three Mindanao minor road contracts were bid in mid 1979 while another two of the Negros minor roads and one Panay minor road contract were bid in 1981. All minor road contracts were undertaken by local contractors and experienced implementation delays similar to those on the national roads.
3.12 The major reasons for delays were the inexperience, lack of proper equipment, and operating capital on the part of contractors, and unfavorable weather conditions caused by heavy rains and floods. Except for one contract, the La Castellana-Isabela and Hinigaran-Aranda roads contract, the quality of work was acceptable, although there is room for improvement. More than 50% of the La Castellana-Isabela and Hinigaran-Arands roads were resurfaced (DBST - 21 -
surfacing) after a flood in the area in 1985. Construction periods ranged from one and a half to two and a half years, which was quite reasonable. ALL of the minor roads contracts were supervised by the MPWH Regional Offices. A total of 215 km of minor roads were constructed under this project component.
Workshops Construction and Improvement
3.13 This component covered the expansion of two base overhaul shops in Regions II and V, the construction of three base shop complexes in Regions I, III and IV, and the construction of 23 area shops spread over the five regions, all in Luzon Island. Design and construction supervision were done by three local consulting firms and construction was undertaken by some 35 local contractors; all but three of the latter have completed their contracts without the need for rescheduling.
3.14 Of the 28 workshops, 20 were completed and turned over to the MPWH fairly close to the schedules. In the case of the unfinished shops, arrangements were made to allow the MPWU to occupy and use the completed portions. They were all finally completed by end-1985, except for the Bauang base shop complex which was removed from the loan package. It was subse- quently completed under the Fourth Highway project.
Procurement of Coods
3.15 Along with the workshops' construction, the project also included the procurement by ICB of road maintenance equipment, tooling for the newly constructed and improved workshops, spare/repair parts for existing road maintesanance equipment, and soil/materials testing equipment. Procurement was in two phases.
Phase I (1978-84)
(a) Road maintenance equipment
To prolong the usefulness of the newly constructed and/or restored road network, 64 units of road maintenance equipment worth US$7.3 million were purchased and are now integrated into the MPWH equipment fleet in Luson.
(b) Shop Equipment and Tools Full complements of tools, for three base shops and fifteen area shops in Regions I, III and IV to upgrade the servicing capability of the respective equipment shops, worth US$2.6 mil- lion, were purchased and installed in the finished workshops.
(c) Spare Parts For the rehabilitation, operation and maintenance of various types of existing MPWH equipment, spare parts worth US$3.7 mil- lion were purchased and integrated into the MPWH parts inventory. - 22 -
(4) Soils and Materials Test Equipment Testing equipment worth US$0.2 mitlion was procured and is now used by the MPWH, Bureau of Materials and Quality Control.
Phase II (1984-86)
(a) Additional Road Maintenance Equipment
To augment the existing and newly procured equipment fleet, 911 units of utility vehicles and other equipment worth US$5.2 mil- lion were purchased.
(b) Shop Equipment and Tools For the tooling of five base shops and 21 area shops in Regions VI, VII, IX and KII in the Visayas and Mindanao, 26 sets of tools worth US$4.6 million were received and distributed for installation to the various workshops.
Road Restoration
3.16 A study which was conducted in the latter part of 1972 confirmed the need for setting up a special program to restore and improve the large backlog of sub-standard roads existing within the national highway system. This large backlog of sub-standard roads were attributed to:
(a) inadequate and inefficient roads maintenance organization which resulted in the serious deterioration of some pavements;
(b) severe flooding of roads during the rainy season;
(c) frequent overloading of trucks (many of the roads were built long ago and intended to carry only small vehicles);
(W) the roads themselves being badly designed and constructed; and
(e) insufficient maintenance funds coupled with unsatisfactory planning, budgeting and operating procedures.
3.17 As a result of the study, one of the project's objectives was to focus on the maintenance or restoration to a maintainable and improved condition of several deteriorated sections of the national road network. A simple rating system based on economic and enginzering criteria was used in determining the location and nature of work to be carried out.
3.18 The Road Restoration Program commenced in the early part of 1977 with 316 projects, all of which were undertaken at first by the MPWH with an initial appropriation of P 40 million. The restoration works involved ditching, resealing, shouldering and regravelling. Although there were some delays, all of the 1977 projects were completed. In 1978 to 1981, the restoration projects were partly undertaken by contracts and by MPWH. Several problems were encountered, especially on the contract projects. Problems such as delayed release of Cash Disbursement Ceilings (CDC's) due to lack of local - 23 -
funds, inclement weather, and difficulties in the procurement of surfacing materials resulted in the postponed implementation of unstarted projects and suspension of some on-going projects. Consequently, the projects which had been proposed for each year within the five year program were not carried out as originally scheduled. For example, in 1979, out of 176 projects proposed, only 12 were implemented since almost all the projects for 1978 were still ongoing in 1979. The unimplemented projects in 1979 were deferred to either 1980 or 1981; the same happened to many projects in the succeeding years. Poor management by the then BCM (Bureau of Construction and Maintenance) and inadequate supervision by the regional offices were other factors that caused the slow progress in the implementation of the program.
3.19 A total of 365 km of bituminous roads, 1,168 km of gravel roads and 1,323 km of shoulders and ditches were restored. These figures represent 41%, 49% and 87% respectively of the works program, and amount to the completion of 522 projects out of 743 planned.
3.20 Consulting Services. Construction of most of the national roads contracts were supervised by local consulting firms assisted by foreign firms which supplied expatriates to fill up key positions. MPWH Regions V and VI, supported by expatriate Resident Engineers and/or Materials Engineers supplied by foreign consulting firms, supervised all contracts. In general, construc- tion supervision was adequate; however, there were cases where the Government requested replacements (for one Project Manager, for two Resident Engineers and one Materials Engineer).
Feasibility Studies and Engineering for Future Projects
3.21 The project included the preparation of future projects (Road Feasibility Studies III) involving 10 national road links totalling 1,360 kilometers, 940 kilometers of minor roads contiguous to the national roads, and seven ferry service routes in various regions of the country. The study was carried out principally by a Swiss consulting firm, in association with a German firm and a local firm, with the assistance of Government counterparts from the MPWH. The feasibility study of the road links took eleven months and was completed in September 1978. The Final Reports were issued in August 1981.
3.22 About 70%-of the total length of roads studied and five out of seven ferry service projects were found feasible. One of the road links (Baguio- Bontoc, 83 km) is being implemented under the Fifth Highway project (Loan 2418-PH) while most of other roads are being implemented, with assistance from the Asian Development Bank. The Ferry service projects, however, have not yet been implemented.
IBRD Projects Office
3.23 The IBRD Projects Office, under the provisions of the loan agreement for the Second Highway Project, was created in September 1973 within the Bureau of Public Highways (BPS), which subsequently became the Ministry of Public Highways (MPH) and eventually the Ministry of Public Works and Highways (KPWH), to supervise, administer and coordinate Bank-financed highway - 24 -
projects. The office was initially headed by a seconded Bank Highway Engineer, with an MPH official as counterpart. The counterpart MPH official took over sole leadership of the office in 1975 as Project Director, and the office has since been always headed by a Filipino national.
3.24 Under the terms of the Loan Agreement, the Projects office was responsible for the execution of the Third project. Consistent with the assignment of a number of functions to other MPWH headquarters units, the equipment procurement and workshop improvement project components were given to the Bureau of Equipment. All traffic analyses and economic evaluations were assigned to the Planning-and Project Development Office; and later when the Bureau of Maintenance became independent from the Bureau of Construction, it was assigned all maintenance-related work.
IV. PROJECT COST AND BANK LOAN
4.1 The total cost of the project was US$242.4 million, which is about 24% higher than the appraisal estimated cost including contingencies. The foreign component was US$95.0 million, or 40Z of the total cost. The cost overrun was due mostly to increases in road construction, workshop construction and equipment procurement costs. The average cost of completed roads was about US$72,000 per km, 331 higher than the appraisal estimates but still quite reasonable. Details of actual costs and appraisal estimates are given in Table 3.
4.2 The main reason for the cost overrun was the prevailing inflationary climate and repeated devaluations of the peso from US$1 - P 7.35 at appraisal to P 18.53 by the completion year. The Local costs of the project therefore increased by over 40%. In particular, the road construction component was affected by the high inflation, and the need to rebid several contracts--which usually produced prices about 201 higher than the initial bid. The cost increases due to design changes were small (<15%); this shows that the detailed engineering was done well and construction supervision was adequate. Also, the main reason for the large cost increases for the base and area shops was due to the change from wooden frames to steel frames; with the devaluation of the peso the prices for the steel frames rose significantly. Finally, the increased cost for equipment was due to procurement of larger quantities of equipment than expected at appraisal and higher unit prices. Hence, given the overall adverse combination of high inflation and protracted implementation, the cost overrun of 24% was quite reasonable. Loan Disbursements
4.3 Cumulative disbarsements (detailed in Table 3), compared to appraisal estimates, were as follows: - 25 -
FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 ------e-----e-e(US$million) ------
Appraisal 5.0 41.8 73.8 85.0 95.0 Actual 0 3.5 11.1 23.7 35.8 52.6 68.0 80.3 94.6 95.0
The actual disbursement profile was considerably slower than the appraisal estimates due to the problems experienced by the project. However, the actual profile was quite similar to the regional disbursement profile, suggesting that the project's implementation experience was typical.
Final Allocation of Lorn Funds
4.4 The loan was closed in January 1986 when it was completely disbursed. The following table shows the original, revised and final allocation of the loan.
Original Revised Final Category (Jan 1977) (Feb 1985) (Jan 1986) - - US$ (million) ------
Civil Works National and minor roads 45.00 52.00 51.99 Area and base shops 1.00 4.00 4.50 Road restoration 8.00 8.00 7.97
Equipment 15.00 23.00 22.85 Consultancy services 6.00 8.00 7.69 Unallocated 20.00 0 0
Total 95.00 95.00 95.00
Fulfillment of the Main Loan Covenants
4.5 In general, compliance with the loan covenants (Table 4) was satisfactory. However, there were a few areas which merit mention here. Section 3.07 of the Loan Agreement required the Government to take action as necessary to acquire land required for carrying out the civil works for the national and minor roads before awarding any contracts. However, this was not - 26 -
always done, and in a number of cases non-acqusition of the right-of-way caused delays in completing contracts. This was understandable because the Government had to handle the acquiring of Land and displacement of people, or destruction of crops with considerable caution, in keeping with national practices. In most cases, the Government could not have acted any faster.
4.6 Section 4.03(b)(IV) required that the Government dispose of, in an appropriate manner, all non-serviceable equipment, scrap parts and components not later than December 31, 1977, and thereafter regularly dispose of all items of equipment as they reach the end of their economic life. However, the Government has disposed of just over half of the eligible equipment and scrap parts and components. This was largely because the laws, rules and regula- tions governing disposal of Government properties and equipment are numerous and intricate and are very difficult to comply with. Also, the disposal of non-serviceable equipment involves a number of agencies; this makes it more difficult and time consuming.
4.7 Section 4.05 of the Loan Agreement required the Government to take all necessary steps to ensure that the dimensions and axle loads of vehicles using the national road network are consistent with the structural and geometric standards of the roads. However, the axle load control program was not very effectively enforced, largely because this responsibility is shared by different Government agencies and is difficult to enforce. This issue is being addressed further under the Fourth and Fifth Highway Projects.
V. INSTITUTIONAL DEVELOPMENT
5.1 In addition to assisting the Government of the Philippines in attaining its road construction goals, the Third Highway Project contributed to the development of all road subsector institutions, especially the MPWH. The most significant improvement was made in maintenance because its organiza- tional structure was strengthened and its procedures and operations improved. The assumption of a new Minister for Public Highways in late 1981 and the merger of the Ministry of Public Highways and the Ministry of Public Works, into the now Ministry of Public Works and HiChways, saw the maintenance of roads and bridges being given priority attention and importance. A new fulltime Director for the Bureau of Maintenance was appointed and the Maintenance Divisions in ccatral headquarters and all regions were given the same ranking and importance as other divisions (like the construction division).
5.2 The MPWH was able to take innovative and positive action to ensure project completion, despite the national financial and economic difficulties during the implementation period. Of the actions taken, the more important were:
(a) the MPWH caused PD 1594 and its implementing rules and regulations governing infrastructure contracts to be issued in June 1982, which principally sought to: - 27 -
(i) simplify and improve contract management procedures;
(ii) streamline administrative requirements;
(iii) help develop the contracting industry; and
(iv) clarify ambiguities and to establish adequate control for more effective contract administration;
(c) in February 1984, the MPWH sought and was successful in securing approved authority to review and readjust (for inflation) the unit prices of existing contracts for projects financed by the Bank. Although funds were still released late, this action helped almost all on-going projects, including contracts under the Fourth Highway Project; and
(d) Internal controls were instituted to facilitate the processing of progress payments as well as change orders.
5.3 :he KPH also took effective steps to improve contract management and administration. In many cases when contractor performance and capability slipped to sub-par level, the contract was terminated or rescinded, and rebid. This action resulted with some exceptions, in the completion of the contract. One exception was the Zarraga-Passi Road where the new contractor again slipped in performance and capability, and eventually a ten-kilometer section of the contract was deleted and awarded to the contractor on the adjacent road section. Also, decisive and timely action on the part of the MPWU id 1982 on various monetary claims of contractors for four contract sections (Jaro-Barotac Viejo, Puerto-Impasugong, Impasugong-Aglayan and Aglayan Diversion) which at that time were well behind schedule, helped to ensure satisfactory completion in late 1983.
VI. ECONOMIC REEVALUATION
A. National Roads
6.1 The national roads improved under the project are located in the four major islands of the country, namely: Luzon, Panay, Negros, Cebu and Mindanao. These roads serve the provinces of Albay, Iloilo, Negros Occidental, Cebu and Bukidnon, and form part of the major trunk roads linking them to other neighboring provinces and major urban centers. The areas served are mostly densely populated and important agricultural production areas producing commercial crops (such as rice, sugar, coconuts, coffee, pineapples, vegetables and logs) that need access either to the nearest trading center or to refineries or milling centers for processing into finished products.
6.2 Traffic growth rates expected at appraisal for the period 1973-85 ranged from 6% to 10% and were higher than actual growth which ranged from -5.7% to 5%, except for a road section in Iloilo (Tabugon-Dumalag) which posted a relatively high growth of 12.6% (Table 5). Actual traffic growth - 28 -
rates were affected by decreased production and the general slowdown in the national economy. Panay and Negros Islands, being two of the country's major sugar producing regions, experienced the largest economic decline because of the reduced sugar production and the decline in world market prices for sugar. For the purposes of re-evaluatinn, in estimating future (1986-2000) traffic growth rates, the passenger traffic growth is based on future popula- tion and income growth rates in the provinces; however, future truck (or commodity) traffic growth rates have been assumed to be the same as the growth rates in the appraisal.
6.3 The rates of economic return estimated during the appraisal ranged from 15% to 451 with an overall rate of return of 27% as compared with ex-post returns ranging from 211 to 36% (except for two roads in Mindanao) with an overall return of 23% (Table 7). The main reason for the lower than expected economic rates of return was the lower traffic growth.
q. Minor Roads
6.4 These roads connect large and important areas and were evaluated in terms of their First Year Benefit/Cost ratio. The quantified benfits included the savings in vehicle operating costs and maintenance costs. For the ex-post economic evaluation, all of the 16 minor rqads were analysed. In 1985, field data were obtained on road conditions and traffic volumes, and a random inter- view of farmers in the road influence areas was undertaken. Due to the lack of reliable agricultural data at the village level, a before/after comparison is not possible. Therefore, the quantified benefits are solely from the savings in vehicle operating costs.
6.5 The traffic projections at appraisal indicated a much higher volume than the recent 1985 traffic count, except for one minor road in Negros (Hinigaran-Aranda) which had a large increase in truck traffic from 50 in 1973 to 1,762 average trucks per day in 1985. The 1985 traffic counts showed that there were 5 roads with less than 100 AADT; 9 roads between 101 and 5:a-AADT; and 2 roads with more than 500 AADT (Table 5). In terms of growth, average annual traffic growth rates on the 16 roads ranged from a low of -14.8% to a high of 15.5%. For economic reevaluation, future passenger traffic growth was assumed to follow population growth in the influence areas while future truck traffic growth was assumed to be the same as the forecast for adjacent national roads.
6.6 The results of the economic analysis were generally satisfactory, with ERRs averaging about 21% (Table 7), except for one road in Panay and four roads in Mindanao. - 29 -
VII. THE ROLE OF THE BANK
7.1 The project continued and expanded the dialogue between the Covernment and the Bank which had been started under the previous projects. This has Led to the further evolution and implementation of policies and programs in the road transport subsector. Moreover, the studies provided the Government with a planning framework and led directly to Bank involvement with the rural road network.
7.2 In terms of policy development, the continued dialogue on maintenance funding and reviews of road transport regulations led to further development of transport policy. There is now a stronger emphasis on transport investment planning and the design of least-cost alternatives. Bank involvement contributed to improving the quality of the projects which are now better technically designed and implemented. This appears to be generally true both for construction works and for maintenance organization ean4 operation. In addition, the efficiency of the road transport industry, highway maintenance and planning capabilities have improved.
7.3 During supervision missions, the Bank staff assisted in solving various problems associated with project implementation. The extensive use of local consultants, and the Bank's support in this venture has led to the development of a competent local industry. Now, selected foreign consultants can be used in a mostly local team to undertake feasibility studies and detailed engineering.
VIII. CONCLUSIONS
8.1 The project was satisfactorily implemented and accomplished its major objectives. Despite major delays, the civil works component was well executed and most roads had adequate re-estimated rates of return. The emphasis on maintenance was timely and led to more adequate arrangements for protecting the road networks. All of the various studies led to follow-on projects, and the technical assistance and training helped significantly to develop road subsector organizations. Finally, the project helped to focus the Government's attention on the previously low priority rural road network. PHILIPPINES
THIRD HICHMAT PROJECT (LOAN 1353-PH)
PROJECT COMPLETION REPORT
Actual and Expected Project Implementation
National Roads
Actual cost as Appraisal Contract Actual of Revised Actual National roads Length estimate 8n amount cost ContiactAppraeal Starting cnmpletion completion Item Coatraci (kIS) (P wla) ----- (P) * amount estimate date date b date
Luson T Tabsco-Legaspi 24.7 19.9 19,690,972.24 31,141,101.36 155 155 09/29/77 07/31/82 07/31/82
Pansy C - arraga-Passt 45.2 62.1 59,422.957.57 61,287,272.66 103 98 01/08/82 05/15/81 06/1V!86 D - Jaro-Barotac Viejo 72.4 81.8 46.983,557.00 120,493.963.84 255 148 02/15/79 12/26/80 0715/81 I - Jare Diversion Road 8.7 54.1 33,178,680.00 63,570,322.89 184 114 12/06/79 01/14/82 02/15/83 Z - Pasel-Bao-Siges 57.1 54.3 90,72.570.00 168.424,676.03 185 309 11/26/81 08/11/83 09/10/85
Subtotal 183.4 252.5 230.357.764.57 411776.235.40 179 162 W Negros0 F - Bacolod-Stley 14.0 40.8 29,954,829.00 32,387,603.00 76 80 09/29/77 12/26/79 08/28/80 C - Becolod-Pootevedra 36.0 1 161.7 64,659,106.00 98.755,025.87 153 - 11/28/79 01/14/82 01/14/82 0 - Pontevedra-Kabankslan 44.8 I 64,499,197.00 87.316.354.28 126 114 11/28/19 01/14/82 02/28/82 Subtotal 98.9 204.5 163,313,132.00 218,458,983.15 133 106
Cabu 9 - Naga-Tol do 34.4 78.2 39,197.280.00 75,989,240.11 190 97 09/29/77 02/14/80 02/28/82 J - Cab-Car a 33.0 42.1 24.095517.47 51,971,218.33 216 121 11/10/81 11/10/82 04/15/83
Subtotal' 67.4 120.3 63,492,797.47 127.960,974.44 200 106 Mnadenao L - Fuerto-ppaueag 51.I 41.311,516.00 107,738,176.08 263 ) 11/09/71 08/06/80 09/13/80 N - Impasugong-Aglayan 33.0 ) 207.0 21.476,416.00 48,785,324.80 223 )17 11/09/?7 08/06/80 10/25/80 8 - Atugan Diversion 7.8 ) 22.289,945.00 43,858,151.00 191 ) 11/09/177 08/06/80 1t/19/80 N - Aglyasa Kebawe 63.0 I 37,605,127.00 125,457,811.47 329 3 09/09/83 10/15/83 06/30/n6
Subtotal 154.9 207.0 112681.000.00 325839,463.3 289 57 U 3e Total 529.2 804.2 589.537,670.20 1i4,906,158.00 189 319 I 61
/a Including contingencies. 7T All section originally had 10/80 completion dateu at appraiqal. Minor Roads
Covernment Original Final Length Date estimete contract amount contract amount Item Contract (km) awarded ------(F) ----
Minor Roads / ! Past-Callg 13.90 09/16/81 9.690.325.90 11.143,874.00 13,368.663.29
CM Imbeag-Patag 19.50 03/27/19 7,696,651.60 7,157,632.00 9,426,830.10 Silay-Gutabalson 13.50 Subtotal 33.00 OP"(2) Caftlsa-San Isidro 11.60 12/21/78 2,868,030.90 2.667,267.00 3,257,766.00 Ulamaylan-Carabalan 12.00 Subtotal 23.60 Oe(2) Talisay-concepcon l.155 05/22/81 13.570,963.35 14,905,719.02 15,909,798.84 Sum-ag-Abuanas 12.05 Subtotal 23.60
Or"(1) La Castellans-labela 16.00 09/29/81 23,320,265.16 22,178,461.70 27,932,442.70 Ninagaras-Aranda 17.15 Subtotal 13.15
Total for Negro 113.35 Mindanso ',IlM Aglayan-Higiamin 15.22 09/27/79 7,586,000.00 6,785,974.00 17,739,019.00 W-(2) Aglayan-Basak 38.00 04/27/79 9,902,000.00 9,117,881.00 17,095,099.00 Aglayan-atlongan 35.00 04/26/79 9,351,000.00 8,696.307.00 16,500.512.10 Total for Nindanao 82.22 26,839.000.00 24,600,162.00 5$1315,440.00 Total (FeG+1M) 215.50 83985,23h.91 82.651.5.72 121,210,940.90 Ia.* la Total appraisal esetimate * P 63.9 mlition or $8.7 amilion. - 32 -
Table I Pace 3
Road Restoration Program (1977-80)
CT No. of project Bituminous Gravel Shldr. 6 ditch Cost (ka) -(9000)
1977 Programt 316 118.1 795.0 1,195.9 40,000 Completed: 316 76.0 359.0 1,146.0 40.00 1978 Program: 139 238.0 363.0 172.0 109,247 Completed: 102 163.3 241.5 92.0 77,929 1979 Program: 176 333.4 841.8 70.4 150,000 Completed: 12 4.3 17.2 3.8 2.377 1980 Programs 86 136.1 201.3 78.7 42,633 Completed: 68 88.8 166.1 78.7 42,633 1981 Program: 26 53.3 200.2 0.6 35.330 Completeds 24 32.5 182.8 0.6 29,157 Total Program: 15178 18Completed: im2 1._3.___.4 CY 19T8 9 projects were terminated 14 Projects were revrograsmed to CT 1980 14 projects were deleted 30 projects undertaken by administration 72 projects undertaken by contract CT 1979 72 Projects were reprogrammed for CT 1980 43 projects were reprogrammed for CT 1981 1 projects were reprogrammed for CT 1982 33 projects were deleted 12 undertaken by administration (no contract projects) CY 1980 6 projects were terminated 4 Projects were deleted 6 projects were reprograed to CT 1983-84 42 projects by administration 26 projects by contractors ZEEEAhL 2 projects were terminated 5 projects undertaken by administration 21 projects undertaken b- contractors
Nte: Progrmmng the annual allocation was swee by PIPOO, a planntnx unit of the KPH~ With the assistance of am expatriate transport economist. Table 2
PRIILIPP'INES
THIRD MIGHdAY PROJECT (LOAN 1353-PH) PROJECT COMPLETION REPORT
Actual and Forecast Esttmates of Project Costs
Forecast Actual cost of Actual costs 0,000) estimate of cost Ia as a proportion Total Con- * Total Forecast US$ tract US$ amount of Contract cost (1) amount (7) Project componeat Local Foreign equiv. amount Local Foreign equiv.
Civil Work national and Improvement of 115 146 roads 85.4 2.0 137.4 91.5 59.7 59.8 119.5 minor 450 181 Construction of area shop 23.0 4.5 27.5 15.0 4.0 1.8 5.6 134 100 of equipment - 22.8 22*8 22*8 2*4 14.5 16.9 Procurement 103 00 Road restoration 21.3 8.0 29.3 29.3 17.4 10.8 28.2 8.1 16.6 101 10S Consultancy services 9.4 7.7 17.1 16.2 8.5 Right-of-vey 8.3 - 8.3 - 9.2 - 9.2 - - 124 111 Total 147.4 95.0 242.4 116.8 101.2 95.0 196.2
for forecast estimate of costs. /a using in exchange rate of US$I a P 10.94 for actual costs and US$1 - P 7.11
distributed over all project components. Notp: Contingency allowance *r - 34 - Table 3
PHILIPPINES
THIRD HIGHWAY PROJECT (LOAN 1353-PH)
PROJECT COMPLETION REPORT
Actual and Forecast Disbursements (USl milTon)
Bank Accumlated disburements Actual disbursemense fiscal year Actual total ApVU8l as oercentage of and quarter disbursements estimate epraisal estimate
1977 =/31/77 06/30/77 0.0 5.0 1978 N/30/77 0.1 11.8 1 12/31/77 0.1 19.2 1 03/31/78 2.1 26.8 8 06/30/78 3.5 41.8 8 1979 5/30/178 5.6 52.1 11 12/31/78 6.1 62.4 13 03/31/79 9.2 68.8 13 06/30/79 11.1 73.8 13 1960 W/30/79 18.6 76.0 25 12/31/79 20.5 79.0 26 03/31/80 22.5 82.0 27 06/30/80 23.7 55.0 28 1981 /30/80 25.4 88.0 29 12/31/80 30.7 91.0 34 03/31/81 32.5 95.0 34 06/31/81 35.6 38 1982 W/30/81 39.1 42 12/31/81 45.0 47 03/31/82 50.0 53 06/30/82 52.6 55
1 / 30 / 8 2 57.4 60 12/31/82 63.1 66 03/31/83 65.7 69 06/30/83 68.0 72
5T/3sles 70.7 74 12/31/63 72.7 77 03/31/64 76.3 80 06/30/6 80.3 85 1963 SoL30/84 a... . o 12/31/86 86.2 91 03/31/85 92.0 97 06/30185 94.6 99
Ao0 95. 100
IA Attual d&te of final disburammut and loe closins. - 35 -
Table 4 Page I
PHILIPPINES
THIRD HIGHWAY PROJECT (LOAN 1353-PH) PROJECT COLUTION REPORT
Compliance with Loan Conditions
Article Action required Action taken
3.03 Governms to adhere to agreed Complied with. design standards for highway con- struction.
3.04 Government to maintain to the Complied with. Ministry of Public Works and Highwave (MPMR) a special office to adinister the project.
3.07 Land acquisition to be completed Although several cases of con- prior to award of construction tract award prior to comoletion contracts. of right-of-way acquisition occurred, NPUMhandled land acquisition satisfactorily. 4.03(a) Government will properly and ade- Complied with. Maintenance of quately maintain and repair its the national road network had national road network and will been poor to nonextscent in the maintain and renew as necessary past. However, additional road all required road maintenance maintenance equipment and facili- equipment and facilities. ties have been provided, and some taprovements have been made in maintenance operations. 4.03(b)(I) MH will implement its Five-Year Comelied with oartlv. Execution Road maintenance Program In of the program began slowly and accordance with agreed time- was far behind the appraisal tables. schedule.
4.03(b)(it) Deteraine asnual physical targets Complied with partly. and budget requirements for the Five-Year Road Maintaenance Pro- gram, including the road rester- tion component by October 31 of the previous year In consultation with the Bank. - 36 -
Table Page 2
Article Action required Action taken
4.03(b)(i11) HPM will complete the road res- Complied with partly. The or*- toration component of the Five- gras suffered extensive delays Year Road Kaintenance Program not and was about 70 completed. later than December 31, 1981.
4.03(b)(tv) HPU will dispose of a11 eser- Partly complied with by the viceable equipment, scrap parts agreed date; however, limited asd composents by not later than progress has been made with the December 31, 1977 and thereafter revised program for disposal of dispose of all such items s they som 3,000 units. So far, about reach the end of their economic 2,500 units have ben disposed life. of.
4.03(b)(v) HPUR will furnish the Bank with Comli*d with. St.ing Auxust semiannual progress reports on 1978, reports were furnished, al- its road maintenance orogram though with sow delavs. Reports including the road restoration wre satisfactory as to their componest. comprehensiveness and qualitv. 4.04 The Government will institute a Complied with partly. The svstew system, satisfactory to the Bank, is not yet fully operational al- to collect and record necessary though development has been our- data for the assessment of the sued, partly through the National technical, economic and financial Transport Planning Project. aspects of the national road net- work in order to properly plan required construction, saiute- same and improvements. The sys- tem shall be operative by Dece- ber 31, 1977.
4.05 fmplementation and enforcement of Complied with partly. The pro- azle load and vehicle disension grm is now operative but control program. enforeaent procedures need strengthening. The program is being further assisted by execut- ing the Pavement and Axle Load Study, financed under the Fourth Digh"sy Project. 4.06 All vacant professtonal post- All vacant poitions filled dur- tions, including 3 economists aW ing 1978. PPDD w reorganized 15 engaineers, In the Plannsn and into a Plauning Service in 1981. Project Development Office (PPD0) to be filled by December 31, 1977. - 37 - WteM S
PHILIPPINES
THIRD HIGHWAY PROJECT (LOAN 1353-OH)
PROJECT COMPLETION REPORT
Actual Traffic and Growth Rates
Road Average annual daily traffic Average length (ko) 1985 estimated traffic IXWst- weighted Forecast srowth I.aS.) lug NeW Range average 195 ZMMD 1965-9I 198-2
National Roads Luson 'tasp-Tabaco 27 25 964-1,777 1,357 2.319 4,651 .5 7.2
Tilo-Jare - 9 1,982-5,356 3,837 7.396 13,324 6.4 6.1 Zarregs-Passi 42 36 624-1.430 1.113 1,974 3,555 5.9 6.1 Jero-Barocac-Vlejo 58 54 1.209-3.111 1,187 2,142 3,911 6.1 6.2 Passi-Dao-Siga 45 43 457-838 477 848 1,554 5.9 6.2
plolod-Silay 14 14 5,405-7,508 6,295 11,257 20.84 6.0 6.4 Bacolod-Pootevedra 45 36 1,854-4,034 2,308 4,588 8,657 6.2 6.6 Poetevedra-Kabankalon 49 49 1,469-1,704 1,865 3,232 5,800 S.7 6.0 Cabu CbW-arAea 33 33 1,677-2.871 1,860 3,075 6,183 5.1 7.2 Naga-Toledo 40 35 992-1,177 1,091 1,818 2,901 S.2 4.8 41indanso Puerto-Imposaugong 54 31 952-1,305 1,190 2,102 4,156 5.9 7.0 Esasugong-Aglayan 38 33 942-1,072 1,010 1.615 2,981 4.8 6.3 Aglayan-Kibawe 63 64 253-615 479 772 1,433 5.0 6.4 Atugan Diversion 8 8 615-718 745 1,266 2,432 5.4 6.7 Minor Road* Panay Passi-Calintog 14 203 104 136 177 2.7 2.7
=ing-atas 19 328 244 356 S30 3.8 4.1 Silay-ftaibeloa 13 141 109 159 238 3.8 4.1 Talisay-Coacepcion 11 382 519 654 763 2.3 1.5 Susag-Abanan 12 613 319 458 666 3.7 3.6 La Castellana-Isabela 16 25* 193 280 413 3.8 4.0 Rnigaraw-Arande 17 2.252 1,743 2,545 3,786 3.9 4.0 Cadulase-Saa lside 11 149 118 173 259 3.9 4.1 Himeasylao-Crabalas 12 248 191 279 417 3.7 4.1 Mindasao Ag aVan-iglan is 284 113 139 167 2.1 1.8 Aglayan-Basak 38 146 52 79 121 4.3 4.4 Dan Carloe-Conce"cton 9 144 72 103 155 3.6 4.2 Concepoe-sagnoagen 7 22 11 16 25 3.8 4.6 Concepcion-Bocboc 8 115 44 62 91 3.5 3.9 Dancagan-Maray 3 35 13 19 26 3.9 3.2 Kibae-Nanulongan 8 - 9 . 13 -20 - 3- .- ---- 44- Table 1. PNILPPINES
THIRD HICNWAY PROJECT (LOAN 1353-PN> PROJECT CONPU.T10N RIPORT
Vehle Operating Costa, 1985 PUU per it excludins taxes)
Car Jeep Bus Truck Eisting laproved 5 ngs Ezisting Improved av m=* ExiSting Improved Savin%n road road Extsting Improved Savins Perki road road ef u= road road erroad road er Ma x
Nat loual Roads inson M asp-Tabacco 0.44 0.25 0.19 41 0.59 0.12 0.27 46 0.64 0.13 0.31 48 0.27 0.14 0.13 48
lito-Jpro Diversion 2.53 1.32 1.21 48 0.41 0.21 0.20 49 1.07 0.50 0.57 53 2.24 1.01 1.21 54 Zerraga-Tabugon i 0.15 0.18 0.57 49 0.33 0.16 0.17 55 0.61 0.29 Jaro-narotac 0.12 32 0.76 0.15 0.4t 54 ViejQ 0.40 0.21 0.19 47 0.46 0.23 0.23 50 0.55 0.26 0.29 51 0.62 Pasi-Oso-Sigma 0.58 0.09 0.09 0.29 0.11 51 50 0.07 0.04 0.03 43 0.26 0.12 0.14 54 0.44 0.21 0.21 52
"eotod-Siay 2.14 1.17 0.97 41 1.84 5.00 0.84 0.60 Mcolod-Pontevedra 46 0.11 0.29 48 4.24 2.24 2.04 41 1.04 0.61 0.43 41 0.52 0.28 0.24 46 1.13 0.58 0.55 49 1.08 Peotevedra-Kabankalan 0.54 0.38 0.16 1.61 0.51 11 30 0.32 0.20 0.12 17 5.04 0.67 0.37 36 1.45 0.97 0.40 15 Cebu e ~re 0.58 0.18 0.20 34 0.37 0.23 0.14 38 0.42 0.25 0.17 40 1.21 0.71 41 laga-Toledo 0.4t 0.24 0.å7 0.50 41 0.15 0.08 0.07 47 0.64 0.35 0.29 45 1.08 0.60 0.48 44 Nindana. w o-lwagugong 0.59 0.50 0.09 47 0.03 0.0 0.02 67 0.12 0.06 0.06 50 0.46 0.21 0.21 50 Imsugnog-Aglayan 0.52 0.25 0.27 52 0.11 0.05 0.06 Aglayan-Kbasme 54 0.35 0.15 0.20 57 1.06 0.44 41.62 SK 0.10 0.0v 0.01 en 0.02 0.01 0.01 50 0.16 0.11 0.01 19 0.62 0.26 Atugan Diversion 0.26 0.17 0.09 <5.16 51 35 0.02 0.05 0.01 50 0.24 0.54 0.10 42 0.62 0.17 0.25 405 Minor Road
ap,It-Caliog 0.06 0.01 0.03 50 0.06 0.01 0.03 50 0.02 0.01 0.0t 50 0.25 0.09 0.12 SI
Whng-Patag 0.04 0.02 0.02 50 0.05 0.03 0.02 40 0.010 0.006 0.004 40 0.10 Silåy-Cuiabaloan 0.012 0.006 0.8 <1.12 4b 0.006 50 0.02 0.01 0.01 50 - - - - 0.32 Talltay-Concepcton 0.09 0.05 0.04 0.14 0.18 5% 44 0.09 0.04 0.05 54 - 0.61 0.27 0.14 sh Suag-Abäanaf 0.23 0.14 0.09 39 0.12 0.07 0.05 42 0.003 0.002 La Castallana-teabela 0.001 31 0.80 0.44 0.16 4% 0.04 0.02 0.02 50 0.02 0.01 0.01 50 0.04 0.05 0.03 *tnigarbo-hranda 0.32 75 0.51 0.71 0. 10 s 0.16 0.16 50 0.13 0.07 0.06 46 0.22 0.10 0.12 54 4.97 Cadulaan-Sat Isidro 0.02 0.01 0.01 2.25 216 55 50 0.001 0.002 0.001 33 0.007 0.004 0.003 41 0.15 0.19 0.16 nimaylaw-Carabalao 0.03 0.02 0.0 33 0.02 46 0.01 0.01 53 0.053 0.008 0.005 38 0.55 0.30 0.25 4% Nindanao -Aglayn-Niglam 0.13 0.08 0.05 38 0.09 0.05 Aglayan-Basak 0.04 44 - - - - (.24 0.51 db.i1 46 0.07 0.04 0.03 41 0.412 0.05 0.01 50 - Don Carloa-Concepcton 6.22 - - - 0..9 <.941. 44 3.67 2.55 41 0.10 0.05 0.05 50 0.01 0.02 0.01 11 41.1 Concepcon-Nongnongan 0.0009 0.0006 0.0001 11.07 O.Of$ 46 31 0.006 .011 0.003 50 - - - - 0.0o 0.15x 0.1m5 so Concepcon-Docboc 0.04 0.02 0.02 50 0.06 0.451 0.01 Sr Dancagan-NHaray 0.17 0.O04 0.00 41 4.#)8 0.04 0.04 ses 0.03 0.112 0.01 11 0.414 18.02 0.02 50 - Kibawe-Natulongan - - - 0.05% 0.411 of.12 40 .00 0.0(5 I.0N1 17 0.012 1#.11o7 0.005 42 - - - - 0.02 11.01 0.111 .6 .45 ftL'KLVVt'LNa
THIRD HICUWAY PROJECT (LOAN 1353-Pi) PROJECT COMPLETION REPORT
Ex-Post Estimates of Economic Rates of Return (Peso Thousand)
N'eU&CiAICTLION M IA) tIWROWV844fN (WMAI k~ft 4106
C 0 Ir
Cuntatråectrs ------ettont-Of-hoay fp3urcatifseg 5s.aangs #Matrtern..sec< fcåtäå fmnatfastå a våtaptrvt Lau u: o. Lo/u WsI . tiattaj. W& tnmt W&kn Year Coa r I aase Ta.a metT
1977 22 19~/¥.fU0 Byta' 127635 BlISS ..u4 11s/64 2.. is t47 lmarv'/ Loivu: fåfi 39* T97:be 16t 234, .907 22/0/ 25u B<9U4 ,.u53 Ž11*53 233S '..2I8a 22u44a 1985(20 .22Uåa0 2.3 343 239 8906 33a .30ä 233 35a69 243 197342 487ö 23 3715 2?1CO3 598u .'.64i) .'60u 22.3 34.573 263 * 9i.97 :222 '.3 33 319 'v7u Aq,32- 233 403 yb93 alnt Iý. 29 - u16*/ 233 4t4 2901*U 99.2 4432 2166A3 2J3 4665 32093 1934738 33U84U 233 49/71 34u73 av94 tauou 140 233 .7 19% 4ö5 38otu 2336b3 , 3dUt43 i996 /74 420a 233 69I7 443 1907 SMU2 4406 23- 648 4493 199i 1614 4724U 233 3b473 474/3 9U9 /uu t/90 233 733 523. 2ff 7l/7 4,4Ö 20 243 . 7s14 23 194s ';9ål3. 233 '43.13 202 ~us0J å2u00 233 U6I-a 62233
IR/ 2.4 22.1- / .2.6 PNILIPPINES
ToIR HICHwAY PROJECT (LOAN 1353-Pl) PROJECT COMPLETION REPORT
Ex-Post Estimates of Economic &ates of Return (Peso Thousand)
~aJroa bcoIt.d-t&it 1y
------t Ni
Consrucaan------.agIaUt-ay Operating Savanga Natatrnances Total anfita a grvaiasuI Cut% w/tå Wtes tövångå Matrout W&ith Yr Coat liaaa Tia. laft Ta..
19i77 6511
7 ,V b a40V 80.1 7276 51490 19434 765& 54651: daa§ 73 54730 AUlUtc.I/90 DIWå 60.1 579 4416 U92 åu~00 0.1 9608U0 0 VM'a? b4. 67900 8a-. 926 6340
¥U *06: 70¥~0 iK. lij6 799u 51 104/2 74~O0 tO.1 ".s 1~2 74Mu b99g &tubu 7900u hö. 1140 790~u *1116' éY* U400 00.4 5?6 h63~ 5¥93 124:0 ao/I0 Ou.1 124 0 2~ M 1194 a 024 9hO0u 00. 8 1 3340 93008 199% 91T/34 9d800 KKO.1 13t14 9u10V
1v 7 2544 1 600 0.1 214.4 10961iu 16J I.~.sj i16200> DUA 16.140 a162aeuý 9 8/.:.o 12..9uu 40.1 12u6 129u 2is0.> B.ita' 1su34u i.k oa2uu 930u 2001 .192%u 13/~0 du.& 93 3ts 2.92 24b2 S4Mu0 Mäu.3 2u9¥2 I4atuU BIR 9.4 36.4 8/C O.S 4.2
1- 0r PHILIPPINES TnIRD ulGMAY PROJECT (LOAN 1353-PH) PROJECT cOHwLsTION REPORT
Ex-Post Estlimates of EconoMIc Rates of Retura (Peso Thousand)
~am: bactalmdi-lottuvestr h:tità004WBCI T *N AN» Ii%-L.M st NI W tt- 1di UtJNd. frL5Ustut
e I ------M LLF &4 4.e^te utaon ------ft4g0-u-*ay ~y*LrAD.ehg t.vangä* tAs#Stat.Ia et §at..a1 Mwel*itfl. bo urvis*on Cuats w/o Wath h.avaagt Nat0~ut Wath Cr~t tsa ea~ - lsa~r Ts3
197t14
A¥I*4 - 6141 4t.l t19.2 /u s 440.?o ivisa 266 tätv.;&.: M/::Au 52~i 69?6b t.4?/ W1*¥. 2 /47 18987 1*å92 t*.-a,u 189.2 Ufl 1-919
9v39 9, *.44&us L8Y..? '62405 64:ts4 1 ~5UVl 6909 M02 M##3.u 109.2 9/ r5t 1<99 u1836 /240U 11*9..2 1ö325 725W9 I<9'd~211./4 l6O uk.2 åcckr#v 7~4* å9å132 klu~su -70.l 42d23 737'/1 ¥4 38199t* UzJK7>0 8~9. 0 121a7 I9 91./82 9uuuu u9.2 9 199. 1*aU34 966&9 u 84.9.1 4Mtbv. 963~9 997 I4266 laI9ka 1¥. 2 144?1 502å49 5995* 1604 8a78.uu 1Id¥.2 12W 10771¥ 1~i72 l15.* å~*.. $9.2c01 134*5* 2000 8tu'/74 2IMOU i 9. t#2#»3 i2U JU1 8<98¥4 &.£71ou 189.2 9563 $372&&,9 .2''.6 14b4^ -- i.9. & :'. 2/ ? 1303p1 2uA '.'8652 *?.430U 1år9.2 2>791 1544h¥ 904 294 an¥rka 86:. 2 2 så in 640~8 AiR 2.1 21.7 8/C 0.22 1.66
5.4 raiL.rr LSn.> THIRD nICKwAY PROJECT (LOAN 1353-Pål) PROJECT COMPLETION REPORT
Ex-Post Estimates of Economic Rates of Return (Peso Thousand)
Na.-gross * untasvenir a-Fadb...4*sa4
b~ii(~149iI4 ANU ti*k% r41 KW0*t4B 4~4. KNö0bÉ>
C t a T ------0[ENEF 5i t &.anbtructan ------ajht-uf -W.ay UpLerata.an tivimångb Nantenanco> Tot&I barefata . ~upvauarin Crsuts N/o With 6vangs W thcut with ymar Comt Ti~n Tia~ Tg Taar 1979 1748
89U4 7J4 t0243u 230. P:jl'/ 5266b 3913 77b,1 1410bu 240.' U/W 10 U&Ca t-4b AdU0 2m0.2 te it3 hft41&9 '197 Ubt-t ÖMÖ13 23u.2 i/Vt, 61.6ås kvmU8 ~#v2 64234 23M. 923 64468 b 1~ 0460 67y7U 231.2 Vc¥t 671eU 190 9vu3 Ma$1u 23a.2 8i221 78540 1991 19 ? tUILK 23t4. 2 tv /63 7j41tu' V042 M04 /922% 2 SU. l A;:29 7941.s S99 3i W l 34t0A -~1. 2 UI2 74t 89v4 122/ d/640 23d.: 2."8 M7714 a9.a 1,2,04 4 9 202. 2 AJM00 9-167U 1996 i ;b69 v/uku 23u.'2 1.90/ 97~a 19v7 84483 92JU.2 t&1461 1031m0 $:. LS0 i o 3 10U¥ 2ju. 2 åt4MU . ^m92t 99LI2 184~/ 3.u 2. 2~0 16324) 1451OU 1es 12113:w 2Mu.2 ý 7-27 S2M5U8 tud 9/4 .IUIJU 2jU.:» 1b176 i1Jlö jb 2002lu i&A 1:1t44 0 23. 99 3~66 24032'A 143250 -25k^.4 1 51.04 134399 t004 '21.2x ItA44u 2Iu. 2144V 4b9674s
IIR 3.1 24.8 s/C 0.28 2.08
cr'-4 rni.rrinth
THIRD HICHWAY PROJECT (LOAN 1353-PII) PROJECT COMPLETION REPORT
Ex-Post Estimates of Econoic Rates of Return (Peso Thousand)
IdiectTNUl1 KK5N Um 0~ am-Mhtih.Nr x* tMe lmuL mOimb
t.atatuctan------.----- mtasjht-at-May Upetra.&insj b~åvu nanaki*bnce esåtså ht.sertfatt. te ~iupervataua Laut. wiu Wa&., ti .avalsta W. t.Iab,t måtte
117/ 4,1 197U I:-.5t22 - 49/09 to2å37
Ivust 62/5
1bU4 v b2ö14 /?.a?5 5.6.
19~ &WolS /6-,gu 9/å.9 1I'6u 76&as9 1v97 Ii Le2 ? '/0. ^7u.v 11743 huj:vi 99l663 U. 310 U70.9 S. 42
$¥¥1~0tJO *0i ba'' 670.9 A3jd $9 S¥¥U S441. å11.U -t/;.0 81iu Cv93 l830 ho/3*~ s /u.¥ ir::03s/0/3,
t b tau ii040 t0/LJ.9 / ct J i 1a4tv 899i å92 / ts7 .1t001 t/im. 90 iis:,o .:m5 9a 11mid . Mtvo t7d. 9 11ay r-O7ci 1*/e9 ad68 i8 ~ 44. 579 a.:la $4¥ 2.a0u .'6 164°.6U b/M.> S.f/h 84u.g I00 1'99 / 40 -'/d 2 '.4 9% uu0% .'/6bu B ¥/bÉ,u bt t.v .:U2.1/ 89vs t .v IRR 0 34.3 D/C 0.34 4.3
0* rKILLerLNt.ä
THIRD HIGKWAY PROJECT (LOAN 1353-PI) PROJECT COMPLETION REPORT
Ex-Post -Estiates of Economic Rates of Return (Peso Thousand)
4:eaua c..au-c.ru.e d~ia->1ileJcI 1t*4 .u4D 1I8cUVl.ItIN (iF fet4i £04*. GUAti
------n-.-- E-F--T-
Co.butruct ian ------ka4ht-o*-i.ay p4éwratanj Savaesga fflanteonancm Total Lin.A ata b h~wphrvausn Co t m/o with havangs Wathrut Wath Ver cat lad* IS.. laae Tada 391 27MO0 10U 4211.2 59Is3 . 2283 89844 4513 39022 254.6 476u 39 46U4 33,460 254.8 4939 31# *99 891*6 4u 349Uz 24.225 a9tb7 . tå!8 36:-ai0 2*4.u 47 a98eS 36Is35 l.142 3h¥60 2~14.' .J445 996Ut 4U.80 2U4.0 6tsa 40265 8990 ?072 42940 2b4.w 682/ 8995 42895 61bJ4 4$94W 24. 64u 44285 åt2 ga1é7 40.20 - 254.0 6705: ~^^.4 923 69. 494u0 -477/.3 2850 447u3 8994 /149P 52490 2b4. b 7u4 1 ~5 U2s45 II:l . ~40 254.ii u~65 åvW6 UA05 ti9.20 254.8 h~ln j9575 897 Ut4U 63540 254.ts 909t39 19W 9481 6/-?: 254. 9666 8999 C047b 80083 4 /1540 2534.1s 1u269 78/5 20v8 . 31 MÖ876/ 244.0 U1603'. 2UV2 b2uh2 SMx> p2~4.0 82337 208 b~,U 82us.9 ar_*o -477//.4 Juva 67143 .'4u4 13746 9/90 254.U 5.961 amt5
IM 6.2 38.3 8/C 0.45 3.32 .4 as 0*
-4 THIRD HIGKWAY PROJECT (LOAN 1353-Pl) PROJECT COMPLETION REPORT
Ex-Post Estimates of Economic Rates Of Return (Peso Thousand)
Påssways IIoiIto-Juro Davertison
tEa&Mb1UCT10 etNO .810 8OVErtNt 1* Ndét It #Wt. Russt1Ji6
------Cunatruction ------.---- tqht-cå-~.s Operumtanj avanøs maanten~nce T0t1 Bnf&te 6 uwrvtsaan Co*ta w/o Wath b*vanga mathout Wath Year C.omt Tlear Time Taae laae 191*O 11718 198 44u#5 kl#02 469,9•
19u4 3h '.:/ u 1b3. 4ob 28884 8.415 4u22 0a~uu 15.u 41>/ 3<>234 4:11 3il70 1&3. 11 4lSU. 3$324 V9M7 4364 31m50 t5.0 4518 330i4 4599 346 153.0 34014 8989 4W.2 3665.t 16:3. 0 - 36tu4 . 99 59;51 3U770 $h.3.0 5205 38924 8998 ?.4.U 4U94U 853.8*50. 410*94 1v92 5732 4321u 153.b 56 43364 1993 * 6v49 4t1640 A53.0 62u3 45794 8994 63vu '"uu -1623.7 4766 46576 e99b 6740 b'.u¥30 153.a .69u2 510mt4 8996 *U/ b3.¥0 153.b /2m44 b4084 89¥/ 7t~ b/14>t0 53."t 77u4 57254 199 7¥~4 6v400 153.d l*4u 60634 1990 046/ 64076 853. få U&21 64224 2'a0a0 Uv/u */910 153.M 9824 6064 2uuI 95?7 72 ~u 153.b vt.61 72154 2sa I-I THIRD HICHWAY PROJECT (LOAN 1353-PH) PROJECT COMPLETION REPORT Ex-Post Esimates of Econoic Rates of Return (Peso Thousand) iPan.ays elaro-bsatéc Vikjc REC~iTRUAGi 114 ANDi lHWUVttN IM- N4.1 IGNAL fikR08b - C u ba T Conhtructaan ------kisjtat-uf-way Upertång ~a.tsvgå m~antthnasc* Tucml bU.Unetat b Sup*rvahaan Lt»ta w/o With wavingj Methuut Wath vudr canlat 1as Tamed Tia Taa 197& 24/9 1979 0u 19 34934 19132 48972 19m83 2437 19*4 2U81 7V24m "A. 5W77 71it&, 1945 14052 71^wu tou., Aluta 72 /9 1¥m le.276 7~340 ~u.b 11235 $4359 19d7 t 2.00 00 ~..5 121b9 ä999 191m 81M8 d44u 177.0 11993 84577 1¥¥ a 2474 li1uo 604.5 13413 9~09 199i All202 94300 5t.5 14164 £259 19¥8 Bå944 99600 5 14903 10~9 19~2 84/14 1050U0 95.5 15673 1 690 199.3 1b47v 18bu0 -10&4U.2 b22 I0J,ÖJ2 1994 1o366 1900 50.5 17125 117d59 ia5/f2u A2300 kois.5 1å079 123~¥ 19l 9t0214 1jut# va1.5 I9173 131~59 89v7 I92W 137b4.0 0150. 25 24.amo I34S¥ 891* 2u32O§ 846200 1/7.0 145477 1¥9¥ 2147o l5u Gr-M.5 22445 1b43591 2u~ 22/~ 162200 V*.5 23667 1631t0 2vu8 .410 i/ ylQbm# gris. h .'4v9 17249 2n2 2*.5360 tlItJU *3.th .6127 12859 - 203 2666 88U -1014ti.2 t6/lä t 80h7b2 2004 '¿842u 203~0 VS*.5 2.879 2491W III 0 29.8. 8/C 0.40 2.86 cr * a0. PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1353-PR) PROJECT COMPLETION REPORT Ex-Post Estimates of Economic Rates of Return (Peso Thousand) llan.vs larraga- Iabugan RECNSIhMCTION AD INVVMNF OF NAl1t*NL ROhUS - LNEFIFS Construction ------Uight-of-ay Aperstang Savarsus M.41ntenance Totdl bienfits & Supervasion Cots w/o With Savings Nthout With Vear Cost Tame Time Tame Tas" ------..------1901 2568 l9b;2 14716 *9413 31470 1984 58AR7 19U5 Bot2 5377 36410 496.2 5873 389"6 1986 630 5648 40340 446.- 6144 40136 19117 W"*3 423W0 496.2 6429 42U76 190 6240 44570 496.2 6736. 45v66 1989 6566 460 -1119.2 5441 45/MI 1990 6913 493W0 496.2 7409 49076 3991 7301 521b0 496.2 7797 52646 1992 76UIN 5490 496.2 filt 11536 A993 UIbb b7/bu 496.2 autl 1994 wos 60/0 -15UY.0 6918 t0163 6995 0966 630/yu 496.2 9452 64466 1996 94-16 67,;0 496.2 9922 67626 1997 9944 71030 49b.2 t44 7t12a 1998 1W24 75170 496.2 to 756ea 1999 )13"7 790.O -1496.2 95/1 77.54 20a 1676 634"1 49b.2 12172 b1W6 2u. 123.l aw"-1 416.2 1282t Ub46 I'S2bwb 97(p)(A 416.2 140?6 9/496 20I3 1.756 9260 496.' 142e2 V0/56 2Ito$4 I4640 l13804U. 12;6.1V Su02/I 2ub Albb IOV/60 4VA.. 66 10 IR 6.3 37.6 8/C 0.46 3.51 PIIILIPPIES THIRD RIGIuI PROJEC? (LOAN 1353-PH) PROJC ComHLETION fEPORT Ez-Post "stimstes of Econmcle Rate* of Return (Peso Thousand) Panay:s IubugOn-PÉh,i -D.O-.S8qmd EcN~RUcTION AND IÆff i1 NI Oi NM I(NAM. roADs c u 8 T ------b E N E F I T 6 canatroction ------fight-of-Way opowratang Svin9n Naintanance Total en84ats & up iarvisenl Cot. »/G Wath SAvanga W#thout Wtth r cobt time Tim* Time Time 390~ 1467 1901 3895 1982 43592 I9W3 40414 tyb4 36913 8985 33769 4223 3238 917.6 5131 33228 1906 4746 3300 917.6 5664 349 89w7 4974 35530 917.å 5092 36448 198 5237 37410 917.6 6155 36326 199 5515 3939% -3. 1 5512 39387 1990 UI50Ø 41430 917. & 671#1 42348 1991 6143 43590 917.6 7021 44508 1992 6433 4595u 917.6 7351 46868 1993 6/77 40410 917.6 76'# 49329 1994 * 7143 51020 -9465. 3 -2322 41555 1995 7511 53450 917.6 9429 54568 319 7924 6400 917.6 8842 57538 1997 0364 b9740 917.4 9282 60658 19g% 8824 63030 987.6 9742 63948 8999 9-'4~0 66430 -3.1 9297 66427 2000 941 7290 917.6 10759 72200 2003 10378 74130 917.6 11296 75049 2~2 3k958 702u1 917.6 1t069 79119 2403 1lt77 82690 917.6 12495 03608 2004 122'8.j 87340 -946b.3 2743 7707: . t 293v 92420 91/.6 13*57 93338 IR 0.10 21.4 8/C 0.22 1.54 0 PHIILIPPINES THIRD HICHWAY PROJECT (LOAN 1353-PH) PROJECT COMPLITION REPORT Ex-Post Estimates of Economic Rates of Return (Peso Thousand) 8LUtU1t'8 1siN e*it?»t'Vt N f L* NnS INet4. kueata *: u t T ------t.F onstructaara ------fetiht -ta -h.ay tevur."ci sy t.ava sa. nateat wgta...d 6&9t.41 åIavfactu asGuer ys "%&6utt, st/o Watts maaase t.atuu ka b ¥war Gt Ala Uu an 19// 4WO» 19 /k 11f234 19'&.u 1249/ 19UR 14b94 8¥ua ".!.7/04 8%¥..532 u40 14. 2 6:094, 390t84 89. üb97 39uu 714.2 4;11 44 1*tj uuBe4s Mr.'o /84.2 e/6 43914 4%u 8 4a.:0~mr 714 .2' c9u? 4/'.609 / 4.' 1SA4 I.W.II L*29 4 4 '/ 14. 264i bm2u4 VW4 / 41 . 71 -4. . .144 U3.74 1/bl b3.34b4.U -14;.?.2 494 AW94 U-19 ksv.ks 7U4.2 5424 a 94¥. kiti/¥ ta eA /84.2 402*0. 619¥4 Ilt%9 9'.413 0a< /4.2 VV/: 6774 $99d 342¥ 744v0 ;/14.2 å1143 7b-4 aBWVs hm '9vt /14.2 1 /M2 79/74 ' li/to I* 9U 784.2 1 B464 64c44 25uI I-4/7 uva20 Y/4.2 1.11 tev8$4 24i 8 32b4 Vi4.70 /14.2 :.M 9h i4 Z'0.1 1448 . 1t19/.0 -. 04 lu. 2 v uv /t A Dm 0 2.9 SIC 0.34.4 1a PHILIPPINES THIRD HICHWAY PROJECT (LOAN 1353-PH) PROJECT COMlETION REPORT Ex-Post Estastes of Economc Rates of Return (Peso Thousand) ManS.an.wai ukrto-Ipa.uggnt RELOM MIAMJC 8111id No I0<~fNth filåN tAuLtiUn tonstructaan ------eSalut-oi--t.#y trataly S.svång. aantenance Int-s båene*t & lupervåtausa Ctacta o/u with smvanlga Wathout Watt V:Or cobt #ihm Ta~T ILa 1e Y'U,# tol5 8i831U 2u8J 730 b2,7 352 8984 '/UtN t.53Ut 6.39.4 3 //I' 6t44 19872 600. /4U: 978 227 639.3 69t529 89 7 1 $•/606 7/a8 55.'2 :S bil¥.5639.3 isto ab 't02 6V/UM 67'0. 91744 61309 1u,0i 6Wt94/ Ifuk. 6434c# 990 9,436 6/4#u 6 *v. . 8tus/. öuU39· S<9 N4 7 u2A 63.0. 10b?eU5 ¥¥ imano uau4uu -utlit4.5 t'/ 7l8ö 1P94 I~~41-94-1 8 ö21 i&tiut140 63,.3 2d.r &S2p9 9ull.4 8 I36kI/aAtO145k9 639. Ih i:ci 2±uUu i /tecass 8?ö'au 63¥i. .. i,s3'a/ 826839i .1,HJ i:u.9. 8 --46.40 639.L l'4.¥ qj2 2144 L'4e51 14.64 . 2u?4k 1442/V 214t1109 *8..U -t1s. t. / 44 j*6 .'U"' l'éUwe 8 66.?A 63.3. 2.1:·..¥ 86483¥ BRR 8.9 31.4 D/C 0.62 3.73 0-. PHILIPPINES TnIRD NIGWAY PROJECT (LOAN 1353-PH) PROJECT COMPLETION RPORT Ex-Pos Estimates of Ecomic Rates of Return (Peso Thousand) KECbthIEl 1tJ4 AND IB~COW..M41 t* ffAiff4A. kit$ob C o bs T ------NE IS 8ConstructIcon ------..-...... -.. Raght-o*-*ay JpLeatsang 6avangs M.snter.asoce total 8enee4atm & upervasaon L.ot.t. w/u 01 th avngs W&thut W&th VL-år Cott. l i &w- ]&&u I a au fa 19~0 2325 19w.: 1422Ø 19u3S ,;3913 1/614 16$ 37 lntI tsu 134 U eu 34ó.t) 14/4 U444 191J6 16t:30 Slk k 43ju b'4S.i 1.20 UP/u 19I7 l226 W&'/u 4.U:66 90 l9tI 12t31 916I 34u.U 1621 949ó 19t19 U 13.a ¥t4ø -1408.4 %lt*8 r32 t9*riv 14- i 1. ~4ej.0 1/41 8998 a4.tKl 1469 1049.) 34u0.u ~u9 ls.Ik 1¥9.* 1t tt7 .1',0 :~4 .0 gç1a49b4s 19v4 1646 11Y60 4.96 'Au..ø 1994 1740 1245u -10.:.99,. -u69 1995 Iks44 110 / '4u.: 2104 130 t I*tM..6 t' W.4$.9 143u lq/ .'V;7b 14d40 34o.($ 241d 1%1UU 1'v 5'26 67¢.0 -3.4. .146 ln.tw 200a 2ques g j//8 -140. 2.9 Itibl/ .64% 1tAau 4U. Ikto. . ' -.IWP ýX84.tt ,,uu 4-.0 a g47 t 9 '901 21291 . 4.0 338 2863 2UQ4 1;64 •264H9. -13t9. i .' $6tø :.4Av 4. 3/t 24:.w '-1 IRR 0 0 B/C 0.07 0.6 Ls THIRD HIGWAY PROJECT (LOAN 1353-PH) PROJECT COMPLETION REPORT Ex-Post Estimates of Economic Rates of Return (Peso Thousand) måndssaml shtuagn Diversa.ra flE.COImiskuCT lufN ANa> 1tU1‡0VEIiNT (5 NAT l(hMt. I ------EN i Canstruction ------lagiht-Ot-W&y Opkratareg sjevanya Maanterianrce latal ~aef itu & ~augaarvsuaon LuatL w/u Wåth tauvasajt Wataut Wato Yftar. *Iowt Umo. t~ Ta~. låmft 1977 u7.5 8978 A2243 1979 23365 813.. /016 AVMst 18295 8¥9r2 89¥/0 19t34 499 33¥¥ 68.0 b60 3460 8905 .8 ./b 61.0 562 36*36 b9486 b23 S/33 68.0 hM4 3/94 890/ 547 3 61.0 6m 396v 89tAl 572 4~h5 6.0 c933 4846 19 699 4'7t 61.u 966 4u3, 5vvu 62W 44WU 61.0 4549 899 - 660 4714 61.0 721 477% t992 701 50u/ 61.0 762 506a 1993 744 5315 -1392.7 -649 3922 1994 78¥ 5639 61.0 HS 57Ksu 1995 t04 #9l6 61.0 Jå99 604 / 1996 .9' 6370 61.0 9U3 6438 1997 949 6774s 69.0 1.010 601. 9 tl9U .lu /2.1 64.a 1o/2 .2st1 . 991 10/7 769V 61.O 130 /75 2uuD 1146 E1åwi 69.u l.:-U/ 246 20U1 i2.0 It/,/ 6.0 .P11 M//H 2002 &299 ¥.'/9 68.4 1 tbu 9 4c. 200333 9thel -8392.7 -tU u4UU 4/3 805é2 65.0 5' 4 tuöu02 P. tr IRR 0 0.23 eIC 0.03 3.3 PHILIPPINES THIRD HIGHWAY PROJECT (LOAN 1353-PH) PROJECT COMPLETION REPORT Ex-Post Estimates of Economic Rates of Return (Peso Thousand) RECONSTRUCTION AND IMPhOVEINS OF MIN* RtAS COST .------eb E k F sIs Constructan ------hight-of-4y Operatingq Savange Mintenancw Total 1eMefits & Supurvason Costs w/o Waths SvSn1 Wthout WSth RDAS Coat Time Tame Time Tame in ------ Pasi-Calinog 25714 357 2549 40.6 398 2590 0 0.61 ..aRDB Iobang-Patag 21587 9t67 6905 - 967 6W05 25.2 1.93 Sildy-GulablMon 21587 365 2605 -22.1 343 2583 11.4 0.73 lslibay-CAncdpcian 3%704 . 696 497u 849.6 046 5120 12.6 0.83 Susag-Abuanan 35/04 l8 6129 - E50 61::9 15.5 1.03 La Castelana-lbele 44046 781 55e 104.0 U85 5684 13.6 0.9 Hanigaran-4randa 44046 7468 53341 278.9 7747 53620 103.1 8.73 Candulaan-Sn. Isadro l063 274 1961 - 274 1961 19.0 1.3 1a4i eylan-Carabalan 10063 462 3299 - 462 3299 24.2 1.72 INDANMtD. 401ayan-golams 34681 420 2999 - 420 2998 8.1 0.i Aftayan-Besk 274811 423 3025 - 423 3125 9.5 0.61 Dn Carlos-Conepcian 9502 147 1047 - 14? 1047 9.5 056 Concepctan-Nongnongan 2152 7 51 - 7 51 0 013 Concepion-Decoc :W7* 87 624 - 97 626 0 051 Dangcagwn-Naray 4959 22 160 - 22 1&e 0 4017 Kabne-Matutongtn 6676 18 128 * 18 128 0 0.12 1I for the 'WithoUt ime Savings' case Were not derived due to the am-availability of estimates of annal benefit streams. e4 IBRD 1 232OR4 丰 lir gr er PHILIPPINES THIRD HIGHWAY PROJECT OTHER PROJECT ELEMENTS la- F~Wiry Shdi. .d ~ed E~iq f F" C.~ RNkmi 8~ Work~ rhi" m~ Proiw C-k~ .0 h"-r A- Wå~ PREW1OLISPROJECTS. ------Femblity md D~led Eni~å9 First#f.~ P,~ L- 731 -PH C.~i. -d b~ S-d H~ h~ k- 950-pm Ri~ Inkm~ Ak~ omw Airpom se 120 m pom DPH Re~ MILES LUZON 14- c*~ MINDORO ýM%IE 12- FANAY LEYTE NEGRos 8 Hot MINDANAO lir 4NPLIL 11.1m ES > i N D 0 N E 4 1 A ler 12r m