Technical Assistance Consultant’s Report Project Number: 41076-01 February 2011 Republic of the Philippines: Road Sector Improvement Project (Financed by the Japan Special Fund) Volume 1: Executive Summary Prepared by Katahira & Engineers International In association with Schema Konsult, Inc. and DCCD Engineering Corporation For the Ministry of Public Works and Transport, Lao PDR and This consultant’s report does not necessarily reflect the views of ADB or the Governments concerned, and ADB and the Governments cannot be held liable for its contents. All the views expressed herein may not be incorporated into the proposed project’s design. Republic of the Philippines DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS OFFICE OF THE SECRETARY PORT AREA, MANILA ASSET PRESERVATION COMPONENT UNDER TRANCHE 1, PHASE I ROAD SECTOR INSTITUTIONAL DEVELOPMENT AND INVESTMENT PROGRAM (RSIDIP) EXECUTIVE SUMMARY in association KATAHIRA & ENGINEERS with SCHEMA KONSULT, DCCD ENGINEERING INTERNATIONAL INC. CORPORATION Road Sector Institutional Development and Investment Program (RSIDIP): Executive Summary TABLE OF CONTENTS Page EXECUTIVE SUMMARY 1. BACKGROUND OF THE PROJECT ................................................... ES-1 2. OBJECTIVES OF THE PPTA............................................................ ES-1 3. SCOPE OF THE STUDY ................................................................. ES-2 4. SELECTION OF ROAD SECTIONS FOR DESIGN IN TRANCHE 1 ....... ES-3 5. PROJECT DESCRIPTION .............................................................. ES-8 5.1 Contract Package 1 ................................................................. ES-8 5.1.1 Lot 1.1: Bauang-Baguio Road.......................................... ES-8 5.1.2 Lot 1.2 : Olongapo-Bugallon Road.................................... ES-10 5.2 Contract Package 2.................................................................. ES-12 5.2.1 Lot 2.1a : Palo-Carigara-Ormoc Road ............................... ES-12 5.2.2 Lot 2.1b : Daang Maharlika Road (Liloan-Naval Highway).... ES-14 5.2.3 Lot 2.2 : Iloilo-Capiz Road .............................................. ES-14 5.2.4 Lot 2.3 : Dumaguete North, 1st District (Manjayod-La Libertad)...................................... ES-17 5.2.5 Lot 2.4 : Dumaguete North Road, 1st District (La Libertad-Vallehermoso) ............................... ES-17 5.3 Contract Package 3 5.3.1 Lot 3.1 : Dipolog-Oroquieta City Road .............................. ES-20 5.3.2 Lot 3.2 : Butuan-Cagayan de Oro City-Iligan Road (Misamis Oriental)............................................. ES-22 5.3.3 Lot 3.3 : Butuan-Cagayan de Oro City-Iligan Road (Agusan del Norte)............................................ ES-22 5.3.4 Lot 3.4 : Bukidnon-Cotabato Road ................................... ES-25 6. BRIEF PROFILE OF THE PROJECT AREAS ..................................... ES-27 6.1 Lot 1.1 : Bauang-Baguio Road (Provinces of La Union and Benguet)................................................................. ES-27 6.2 Lot 1.2 : Olongapo-Bugallon Road (Zambales and Pangasinan Provinces) ............................................................... ES-28 6.3 Lot 2.1a : Palo-Carigara-Ormoc Road (Leyte Province) ................. ES-29 6.4 Lot 2.1b : Daang Maharlika Road (Liloan-Naval Highway) (Leyte Province) ....................................................... ES-30 6.5 Lot 2.2 : Iloilo-Capiz Road (Old Route), (Provinces of Iloilo and Capiz)............................................................... ES-30 6.6 Lot 2.3 : Dumaguete North Road, 1st District (Manjuyod- La-Libertad), (Province of Negros Oriental)................... ES-31 KEI in association with SKI and DCCD i Road Sector Institutional Development and Investment Program (RSIDIP): Executive Summary 6.7 Lot 2.4 : Dumaguete North Road, 1st District (La Libertad- Vallehermoso), (Province of Negros Oriental)................ ES 31 6.8 Lot 3.1 : Dipolog-Oroquieta City Road (Provinces of Zamboanga del Norte and Misamis Occidental) .............................. ES 32 6.9 Lot 3.2 : Butuan-Cagayan de Oro-Iligan Road (Province of Misamis Oriental) .................................... ES-33 6.10 Lot 3.3 : Butuan-Cagayan de Oro-Iligan Road (Province of Agusan del Norte) ................................... ES-33 6.11 Lot 3.4 : Bukidnon-Cotabato Road (Provinces of Bukidnon and North Cotabato) ....................................................... ES-34 7. PAVEMENT DESIGN OF PHASE 1 OF THE PROJECT ....................... ES-37 7.1 Introduction ........................................................................... ES-37 7.2 Design Approach for the Selected Road Sections.......................... ES-37 7.2.1 Base Data for Design ..................................................... ES-37 7.2.2 Design Considerations.................................................... ES-39 7.2.3 Design Methodology....................................................... ES-39 7.2.4 Design Plans and Typical Road Sections ............................ ES-40 7.3 Maintenance Options Considered ............................................... ES-40 7.4 Recommended Maintenance Schemes ........................................ ES-44 8. COST ESTMATION BY ROAD SECTION........................................... ES-45 8.1 Updated Unit Rates.................................................................. ES-45 8.2 Updated Unit Rates for Periodic Road Maintenance ....................... ES-47 8.3 Cost Estimates by Road Section................................................. ES-47 9. PROPOSED IMPLEMENTATION SCHEDULE .................................... ES-47 10. ECONOMIC EVALUATION METHODOLOGY AND RESULTS............... ES-49 10.1 Economic Evaluation Model ....................................................... ES-49 10.2 Economic Applications.............................................................. ES-50 10.2.1 Traffic Projection......................................................... ES-50 10.2.2 Basic Vehicle Operating Cost Estimates .......................... ES-50 10.2.3 Cost Benefit Analysis ................................................... ES-50 10.2.4 Economic and Shadow Pricing ....................................... ES-51 10.3 Economic Evaluation Results ..................................................... ES-52 10.4 Sensitivity and Risk Analysis ..................................................... ES-52 10.5 Benefit Distribution Analysis...................................................... ES-53 11. SUMMARY RESULT OF ANALYSIS OF EXISTING FINANCIAL MANAGEMENT SYSTEM OF DPWH ................................................. ES-54 11.1 The Present Financial Management System ................................. ES-54 11.2 Result of Analysis .................................................................... ES-56 11.3 Recommendations ................................................................... ES-59 12. INSTITUTIONAL CAPACITY BUILDING (ICB) OF DPWH ................ ES-60 12.1 Objectives of Analysis .............................................................. ES-60 KEI in association with SKI and DCCD ii Road Sector Institutional Development and Investment Program (RSIDIP): Executive Summary 12.2 Methodology........................................................................... ES-61 12.3 Status of ICB Efforts in DPWH ................................................... ES-61 12.4 Proposed ICB Component of the Project...................................... ES-63 12.4.1 Identification Process................................................... ES-63 12.4.2 Proposed ICB Projects.................................................. ES-64 13. RESETTLEMENT FRAMEWORK FOR TRANCHES 2 AND 3................ ES-69 13.1 Summary of Findings and Recommendation ................................ ES-69 13.2 Project Impacts....................................................................... ES-70 13.3 Impact on Gender and Other Vulnerable Groups .......................... ES-70 14. ENVIRONMENTAL ISSUES AND MEASURES ................................... ES-71 14.1 Introduction ........................................................................... ES-71 14.2 Methodology........................................................................... ES-71 14.3 Screening Environmental Impacts and Mitigation Measures ........... ES-72 14.4 Environmental Monitoring Plan .................................................. ES-73 KEI in association with SKI and DCCD iii Road Sector Institutional Development and Investment Program (RSIDIP): Executive Summary EXECUTIVE SUMMARY 1. BACKGROUND OF THE PROJECT 1. The Government of the Philippines requested the Asian Development Bank (ADB) during its 2007 Country Programming Mission for a Project Preparatory Technical Assistance (PPTA) to provide funds for a Road Sector Improvement Project (hereinafter referred to as RSIP). The PPTA was included in ADB’s Country Operations Business Plan (2007-2008), and in ADB’s pipeline for non- lending products and services for 2008. 2. The request was based on an outline concept paper for the RSIP, prepared by the Department of Public Works and Highways (DPWH) in July 2007. The concept paper envisaged a US$500M project, including a technical and financial assistance package comprising preventive maintenance and/or rehabilitation of selected national roads, as well as institutional capacity building components in support of its mandate and development objectives. 3. The National Economic Development Authority (NEDA) favourably reviewed the DPWH concept paper