Rapport d'achèvement de la mise en œuvre: Septième projet de transport d'Haïti (Crédit 1756-HA)

Document of The World Bank FOR OFFICLAL USE ONLY Report No. 16493 IMPLEMENTATION COMPLETION REPORT HAITI SEVENTH TRANSPORT PROJECT (CREDIT 1756-HA) APRIL 15, 1997 Infrastructure Division CountlyDepartmentIII Latin Americaand the Caribbean Region This document has a restricteddistributionand may be used by recipients only in the performanceof their officialduties. Its contentsmay not otherwisebe disclosedwithout WorldBankauthorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized CURRENCY EQUIVALENTS Currency Unit = Gourde (G) Exchange Rate for US$1.00 (September each year) 1987 - 5.00 1888 - 5.00 1889 - 5.00 1990 - 5.00 1991 - 5.00 1992 - 14.00 1993 - 14.00 1994 - 14.00 1995 - 14.00 1996 - 14.00 WEIGHTS AND MEASURES Metric System FISCAL YEAR OF BORROWER October 1 - September 30 ABBREVIATIONS AND ACRONYMS APN Autorite PortiereNationale CAMP Community ActionMaintenanceProgramn CCCE Caisse Centrale de Cooperation Economique(France) DDT Direction des Transports ERR Economic Rate of Retum FAC Fonds d'Aide et de Cooperation FY Fiscal Year GDP Gross DomesticProduct GOH Govenment of Haiti HDM Highway Design and MaintenanceModel HIMO Haute Intensitede Main d'Oeuvre IDA InternationalDevelopmentAssociation IDB InteramericanDevelopmentBank KFW KreditanstaltfiMr Wiederaufbau(Germany) MEF Ministere de l'Economie et des Finances MTPTC Ministere des Travaux Publics, Transportset Communications PCU Project CoordinationUnit SAR Staff Appraisal Report SCCV Servicede Controle de la Circulation de Vehicules SCR Servicede Construction Routiere SEMANAH ServiceMaritime et de Navigation d'Haiti SEP Serviced'Etude et Planification SEPRRN Serviced'Entretien Permanent du Reseau Routier National TMP Transport Master Plan UNDP UnitedNations DevelopmentProgram USAID United StatesAgencyfor Intemational Development VOC VehicleOperating Costs VicePresident: ShahidJavedBurki Director: Paul Isenran DivisionChief: Peter Ludwig Task Manager: PierreSooh HAITI FOR OFFICIAL USE ONLY SEVENTH TRANSPORT PROJECT (CREDIT 1756-HA) TABLE OF CONTENTS PREFACE ....... ............................................................. i EVALUATION SUMMARY ..................................................................... ii PART L PROJECT IMPLEMENTATION ASSESSMENT ................................................................ 1 A. INTRODUCTION ..................................................................... 1 Background...................................... 1............................... Bank Experience..................................................................... 2 Project Objectives..................................................................... 3 Evaluation of Objectives..................................................................... 3 B. ACHIEVEMENT OF OBJECTIVES. .................................................................... 5 C. IMPLEMENTATIONRECORD AND MAJOR FACTORS AFFECTINGTHE PROJECT................. 8 Road Sub-sector..................................................................... 8 Maritime Services .................................................................... 11 D. PROJECT SUSTAINABILITY .................................................................... 12 Political and Macroeconomic Sustainability .................................................................... 12 Financial Sustainability .................................................................... 13 Institutional Sustainability.................................................................... 13 E. BANK PERFORMANCE.................................................................... 14 F. BORROWERPERFORMANCE.................................................................... 15 G. ASSESSMENTOF OUTCOME.................................................................... 16 H. FUTURE OPERATIONS .................................................................... 16 I. KEY LESSONS LEARNED.................................................................... 16 Sector Lessons .................................................................... 16 Project Lessons .................................................................... 17 PART II STATISTICAL ANNEXES ..................................................................... 18 TABLE 1: SUMMARYOF ASSESSMENTS.................................................................... 18 TABLE 2: RELATED BANK LOANS/CREDITS .................................................................... 19 TABLE 3: PROJECT TIETABLE .................................................................... 20 TABLE 4: LOAN DISBURSEMENT: CUMULATIVEESTIMATED AND ACTUAL.......................... 20 TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION .................................................. 21 TABLE 6: KEY INDICATORS FOR PROJECT OPERATION............................................................... 21 TABLE 7: STUDIES INCLUDED IN PROJECT................................................................. 22 TABLE 8A: PROJECT COSTS............................................................... 23 TABLE 8B: PROJECT FINANCING................................................................. 24 TABLE 9: ECONOMIC COST AND BENEFITS .................................................................. 24 TABLE 10: STATUS OF LEGAL COVENANTS ................................................................. 25 TABLE11: BANK RESOURCES: STAFF INPUTS ................................................................. 28 TABLE 12: BANK RESOURCESMISSIONS................................................................. 29 Appendices A. MISSION'S AIDE MEMOIRE ANDBORROWER CONTRIBUTION ................................................................ 30 B. Map IBRD No. 19042 This document has a restricted distributionand may be used by recipients only in the performanceof their official duties. Its contentsmay not otherwise be disclosedwithout World Bank authorization. IMPLEMENTATION COMPLETION REPORT HAm SEVENTH TRANSPORT PROJECT (CREDIT1756HA) PREFACE This is the Implementation Completion Report (ICR) for the SeventhTransport Project in Haiti, for whichCredit 1756-HAin the amountof SDR 16.6millionwas approvedon February12, 1987and made effectiveon May 26, 1987. The loan was closed on June 30, 1996,comparedwith the originalclosingdate of June 30, 1991. It was fally disbursed,and the last disbursement took place on October31, 1996. The ICR was preparedby GiuseppeMariaBacigalupo,consultant,and reviewed by FernandoMontenegro,Urban TransportEngineer,Pierre Sooh, Task Manager, and Robert Crown,ProjectAdviser. Preparationof the ICR was begunduringthe Bank's finalcompletionmissionon September1996.It is based on materialin the project file and on information providedby the borrowerto the consultantduringits missionto Haiti. The borrowercontributedto the ICR by preparingit's own evaluationof the project's execution(see AppendixA). ii IMPLEMENTATION COMPLETION REPORT HAITI SEVENTH TRANSPORT PROJECT (CREDIT 1756-HA) EVALUATION SUMMARY Introduction 1. By the mid 1980s,Haiti was plaguedwith manystructuraleconomicand social problems. In addition,socialand politicalunrest startedand expandedquicklycausing, eventually, the fall of the Government.The newtransitionalnationalauthoritiesdeveloped a strategyaimedto foster the most productivesectorsof the economy,particularly agriculture,whichemployed75% of the laborforce. An importantcomponentof that strategywas the implementation of a transport plan that, in additionto loweringtransport costs, offeredthe opportunityto alleviateunemployment with labor-intensive methodsfor road constructionand maintenance (par. 1-4). 2. Prior to this loan the Bank had assistedthe financingof the transport sector in Haiti with six creditsand one loan,includinga port project. All of them,but the latter, comprisedroads and bridges'rehabilitation and maintenance, providingalso extensive technicalassistance(par. 5-9). At present,anotherroad maintenance and rehabilitation projectis under way (Credit2691-HA). Project Objectives 3. The project was designedas a sector project. Its mainobjectivewas to contribute towards achievingthe country's economicand socialgoals by the improvement and development of roads and coastal shipping, in support of agricultureand industrystarted under previousprojects,and continuedstrengthening of sectorinstitutions(par. 10-12). 4. The project includednine components integratedin three sub-sectors. In the road sub-sector,there were includedthe rehabilitation of drainagestructuresand 35 km of road, constructionof two newbridges,procurementof tools for labor-intensive road maintenance and technicalassistanceto strengthenthe TransportDepartment (DDT). In the maritimeservicessub-sector,there was includedthe constructionof a slip-wayfor boat- inspectionand a trainingcenterand technicalassistance to strengthenthe Service iii Maritimeet de Navigationd'Haiti (SEMANAH).The port sub-sectorcomprisedtechnical assistanceto the AutoritePortuaireNationale(APN)for studiesand detailedengineering for remedialworks in the JeremiePort (par. 13-14). Implementation Experienceand Results 5. The credit agreementwas signedon February 12, 1987,and becameeffectiveon May 26, sameyear. The projectwas completedon June 30, 1996,after two extensionsof the originalclosingdate. The physicalcomponentsin the road sub-sectorwere substantially achieved,but in the maritimesub-sectorplannedinfrastructure was not built due to a lack of coordination betweenAPN (whichwas to providethe land) and SEMANAH.Concerning the JeremiePort, preliminary studieswere carried out, but the detailedengineering designwas not done. Strengthening of the sector institutions was partiallyimplemented in SEMANAH, but not at all in DDT. Labor-intensive works executedby smalland mediumcontractors(throughSEPRRNand HIMO)were successfully implemented, mostlyon road maintenance and rehabilitation. Seepar. 16-25 and 30-45. 6. The economicresultswere inferiorto those estimatedin the Staff AppraisalReport (SAR). Althoughthe rangeof actualERRs for the drainagestructureswere comparable to those estimatedin the SAR,those for the bridgesand the Gonaives-Cap Haitienroad were considerably lower. The main reasonwas lack of maintenance after construction, whichmadebenefitsfrom those componentsnot sustainable (par. 26-29). 7. Severalfactors affectedthe project, causingdelaysand hampering implementation of some components. The most importantof themwas the country's ungovernability, submerged in constant civildisturbances, whichled to the coup and thereafteran international trade embargo. Also of muchinfluencewere the scarcecounterpartfunds, frequent changesin high rankingofficials, lack of allocationof properresourcesto road maintenance, littlecoordinationbetweenagenciesand inability to followBank procedures (par. 46). 8. The project has providedmanagerial capacityand executionbase for the implementation of labor-intensive works. This capacityis beingutilizedsatisfactorily in the implementation of the ongoingRoad Maintenance and Rehabilitation Project (Credit 2691-HA,par. 48-54).The politicaland macroeconomic environment remainsunclear as to the timingof stronger economicre-activation that mightalleviateunemployment and improvesocial services. Financially, sustainability relieson the future implementation of the road maintenance fund andthe assignmentof enoughbudget to road maintenance, followingthe operationalplan developedduringthe closingmission;thesetwo conditions would be possibleto met under the assumptionof a tight supervision from the Bank. iv Bank Performance 9. Bank performance is unsatisfactory in the projectidentification, preparationand appraisalsinceit failedto sufficiently take into consideration the experiencefrom six previoustroubled sector projects. It performance duringsupervision was satisfactory specifically in settingthe capacityfor management and executionof labor-intensive works. Identification and preparationwere mainlydoneunder the previouscredit,to whichthe SeventhTransportProjectis a continuation.Duringthe appraisalmission,a thorough documentwas developed. Retrospectively, the Bank didnot assessedthe risks correctly and overestimated the capabilities of MTPTC,a highlybureaucraticline ministry,to implement the changesrecommended by the consultantson reorganization and staffing. The project was supervised by 13 Bank missions,involving 52 staffweeks (par. 55-58). BorrowerPerformance 10. The Borrower's performance duringprojectpreparationwas marginally satisfactory. The implementation was unsatisfactory.It was not as strong as it couldhave been due in large part to the difficult macroeconomic situationof the country, socialand politicalunrest, frequentcabinetchanges,the coup and the resultingtrade embargothat Haiti suffered. 11. Structuralproblemswith the government'sbudgetarysystemimposedserious constraintsfor adequatemanagement.Significant politicalinterference and excessive dependenceon the transferof fundsfromthe MEF, coupledwith MlPTC's weaknessin contract administration causeda chronicshortageof counterpartfunds. 12. The Borrower's inabilityto coordinatedifferentagenciespreventedthe constructionof the physicalcomponents in the maritimeservicessub-sector. In addition, compliance with loan covenantsis rated deficient. See par. 59-62. Summaryof Findings 13. Overall,the project's outcomemust be consideredunsatisfactory. Only the HIMO programachievedsatisfactorily results.APN's institutionalstrengthening was nil and DDT's and SEMANAH'swere marginal. The trainingprogramon labor-intensive road maintenance was carriedout satisfactorily. Future Operations 14. MTPTC is taking actionsthat willcontributeto assureproject sustainability with respectto the physicalcomponents, by implementing the operationalplan,under which enoughfundsto meet routineand periodicmaintenance operationshave been budgeted. In addition,under the ongoingproject (Credit2691-HA)it is intendedto developand implement a road maintenance fund. v Lessons Leamed 15. There were derivedsector and project lessons. Sector lessonsare: a) In the case of countrieslike Haiti,with overwhelming socialand macroeconomic problems,an overalldevelopment plan shouldbe established whereinthe Transportsector would be an instrumental component to facilitatethe Government'sobjectives. b) In view of the socioeconomic conditionsand the scarce financialresources of Haiti, the transportinfrastructure shouldassurethe physicalintegrityof the country'snetwork,through a carefulplanningprocessin order to optimizethe assignment of the available funds. c) Labor-intensive methodsutilizedby smalland mediumcontractors constitutea suitabletool to mitigateunemployment whileachieving acceptablerehabilitation and maintenance work. Project lessonsare: a) The implementing agencyshouldbe familiarwith Bank procurement procedures. In case of institutional weaknesses,earlyspecifictechnical assistanceshouldbe includedin the projectto avoiddelays. Prior to awardingworks contracts,contractor'squalifications shouldbe carefully reviewed. b) Adequatecoordination among differentimplementing agenciesshouldbe assuredto avoidconflicts,such as those in the projectbetween APN/SEMANAH andDDT/SCCVconcerning land allocationand axle load controlrespectively. c) Accounting systemsof the variousimplementing agenciesshouldbe compatible and designedwith propertechnicalproceduresto facilitatean appropriatefollowup and subsequent audits. d) The Project Coordination Unit (PCU)shouldbe giventhe financialmeans and personnelcontinuity to performefficiently its task. e) The amount of counterpartfunds shouldbe correctlyassessedat the time of the appraisal,and if necessaryloweredto be withinthe Borrower's real possibilities. f) It is convenient to implement labor-intensive sub-projectsin areaswhere the unemployment originates,preventing migrationfrom rural to urban areas. IMPLEMENTATION COMPLETION REPORT HAITI SEVENTH TRANSPORT PROJECT (CREDIT 1756-HA) PART I. PROJECT IMPLEMENTATION ASSESSMENT A. INTRODUCTION Background 1. In the mid eightiesHaiti was plaguedby a numberof seriousstructuralproblems. Its level of povertywas uniquewithinthe WesternHemisphere(a per capitaincomeof US$ 350), together with about 50% of the laborforceunemployedor under-employed. Almost75% of the populationlived in rural areas, and sufferedfrom shortageof cultivable land due to deforestationand subsequentsoilerosion. As a result, agricultureproduction fell steadilyon a per capitabasis,followedby a substantial rural-urbanmigration. In addition,the labor-intensive export assembly industry,established in the mid seventies,and whichhad created morethan 50,000jobs by 1980,was semi-paralyzed due to the world recessionexperienced during 1980 and 1983. Economicrecessionled to increasing politicaland civilunrest that expandedquickly,damaging the economyeven further. The unsustainability of the overallsituationresultedin the fall of the nationalauthoritiesin February1986,and a transitionalnew Government cameinto power. 2. The Governmentof Haiti (GOH)developeda strategyto foster the most productivesectors of the economy,assigning high priorityto agriculture,whichemploys about three quartersof the country'slabor force. An essentialcomponentof the strategy was to reducethe transport componentof agricultural productioncost and improvements of accessto both domesticand foreignmarkets. The road and maritimesub-sectorswere alsoto be strengthened.The rural populationwouldbe the principalbeneficiary from improvedroad accessand coastal shipping services,whilethe entire economywould benefitfrom savingsin VehicleOperationCosts (VOC), improvedcoastal shipping operationsand marketingof agricultural production. 3. In addition,the transport sector offereda suitableopportunity to alleviatethe high unemployment in both rural and urban areasby meansof labor intensivemethodsfor road construction,rehabilitation and maintenance. The SeventhTransportProject was planned and implemented to furtherthis strategywith financing through the International 2 Development Association (IDA) under Credit 1756-HA, signed on February 12, 1987, and effective on May 26, 1987. 4. At the request of the new Government in office in February 1991, following the national elections the previous December, an urban highway component was added to the project, as part of a major restructuring. Bank Experience 5. Since 1956, and prior to this credit, the Bank Group had extended one loan and six credits to Haiti for its transport sector for a total of US$ 73.0 million equivalent. The first Bank Loan 141-HA (US$ 2.6 million) comprised maintenance and rehabilitation of about 1,000 km of road, and was completed under an Interim Highway Credit (32-HA) for US$ 350,000 in 1962. Political and managerial problems hampered the correct implementation of these projects, mainly because disputes occurred between the Government and IDA on the standards applied, as traffic grew more rapidly than forecast. After more than a decade, the Bank started operations again within the transport sector. The second and third projects (Credits 478-HA, for US$ 10.0 million in 1974, and 556-HA, for US$ 20.0 million, in 1975), included the reconstruction of 250 km of the Northern Road and the reconstruction of a number of bridges. These projects provided all-weather access between Port-au-Prince and the main northern city and port, Cap Haitien, as well as linking the Artibonite Valley to the most important food consuming centers. They also financed and initiated vehicle axle-load control. 6. The Fifth Transport Project (Credit 807-HA, for US$ 15.0 million, 1978), comprised the upgrading and paving of 54 km of roads in the Northern Plains, a feeder road to Jeremie Port, construction of the Hypolite and Trois Rivieres bridges and new terminals for shallow draft vessels Port-au-Prince, Port-de-Paix and Jeremie. Project supervision was weak, with no missions visiting the project for an entire year. The Project Completion Report (PCR) stated that most of the road construction deficiencies could have been avoided by close monitoring of the consultants in charge of supervision. It concluded that the success of future projects in the sector would depend upon stricter supervision. 7. Under the Port Project (Credit 1121-HA, for US$ 11.0 million, in 1981), co- financed by the Kreditanstalt fur Wiederaufbau (KFW), a berth for cruise ships, a wharf for break-bulk cargo and another for Ro-Ro general cargo vessels, were constructed, together with a wharf for coastal vessels at Cap Haitien. In addition other small ports were rehabilitated or constructed. The PCR concluded that, given the subsequent economic developments in Haiti, the investments in the Cap Haitien Port were premature and the viability of the project's coastal shipping ports would depend upon an appropriate pricing policy and institutional improvements in SEMANAH. This pricing issue implementation was included as a covenant in the Seventh Transport Project, but it was not resolved. 3 8. The SixthHighways Project (Credit 1220-HA,for US$ 14.0million,in 1982), continuedthis chainof projectsdesignedto addressbasicinfrastructureneeds to support Haiti's economicgrowthand socialobjectives.The projectwas based on a country development plan derivedfrom a TransportMasterPlan (TMP),preparedin the late seventies,andwhichservedas a frameworkfor programcoordinationamongthe principal international financial agenciesinvolvedin the transportsector (IDA, IDB andUSAID). Its main objectiveswere the intensification of road maintenance and the upgradingor rehabilitation of about 1,000km of gravel roads to paved standards,the improvement of another 1,000km of secondaryroads to gravel standards,andthe rehabilitation and upgradingof manyagingsteel and concretebridges. The principalrole of IDA was to financethe rehabilitation of 57 bridgesand other drainagestructures,and the rehabilitation of about 100km of the NorthernRoad betweenGonaivesand CapHaitien, and to provide technicalassistanceto the maintenance branch of the implementing agencies,the Service d'EntretienPermanentdu Reseau RoutierNational(SEPRRN)andthe Ministeredes TravauxPublicsTransportset Communications (MTPTC),respectively. 9. The SixthHighway Project did not fully achieveits objectives. By late 1983 USAIDwithdrewits support to Haiti, suspending its long standingtechnicalassistance and financial backing,impacting at the projectlevel on the technicalassistanceprovidedto SEPRRN. Socialunrest and riots beganfollowingthe rapiddeteriorationof the country's economicand socialfabric. The GOH had to reducepublicexpenditurebecauseof scarcityof financialresources,from whichtime the provisionof counterpartfundsbecame a major constrainton projectimplementation. Budget allocations for road maintenance were cut dramatically and the targets agreedat negotiationswere not met. Unforeseen time lags, increasingcosts of consultingservices,and the need to bolster the technical assistanceto the road maintenance programreducedthe financeavailable for the original bridge rehabilitation componentand rehabilitation of the NorthernRoad (althoughin this case the contractorfailedto performsatisfactory work becauseit mighthave overestimated its capabilities when acceptingthe contract). It was agreedwith GOHthat financefor the outstanding works (the secondphase of the bridge rehabilitation and part of the NorthernRoad) and furthertechnicalassistance(laborintensivemethodsin road maintenance, through SEPRRN)would be includedin the SeventhTransportProject. ProjectObjectives 10. The objectivesof the projectwere to: (a) improveand rehabilitateroads and bridges;(b) improvecoastal shipping operations;and (c) continuestrengthening the sector institutions through programsof stafftrainingand technicalassistance. Evaluationof Objectives 11. These objectives were in line with GOH's major development policies,improving livingconditionsin rural areasin order to retain the population in site and creatinga favorableenvironment for privateinvestment, employment growth,and some accessto socialresources. Theywere also in accordancewith the Bank's countryand sector 4 strategiesthat emphasized the importanceof maintaining andimprovingthe access of rural communities to socialservicesand markets. Thesebasicobjectivesremainedunchanged duringproject implementation, althoughafter a loan amendment, on April 1991,the project was restructuredandmost of the remaining fundswere reallocatedto the HIMO sub-project, whichwas highlyorientedto assisttechnically and strengthenlocal communities in the creationofjobs, together with fosteringprivate sector to participatein road maintenance activities. 12. The project's objectives were clear, concreteand consistentwith the overallBank lendingpolicy. This includedsupportto the agricultural sector, especially in the northern rural plainsof the country. Thiswas to be achievedby the provisionof improvedhighway accessibility, coastal shippingoperations,coastal shipping port facilities, strengthening of the Government'ssector institutions,and pushingforwardappropriateinitiatives to cope - at least partially- with the soaringunemployment reigningin the country. 13. IDA collaboratedin developing the project and assistedthe GOHin project identification and preparation. The projectincludednine components split amongthree sub-sectors,namely: (a) Roads (i) continuationof works startedunder the previousSixthHighway Project, Credit 1220-HA,i.e., the rehabilitation of bridges and drainagestructures,located on departmental and secondaryroads, totaling38 km; (ii) constructionof the Fer-a-Cheval Bridge (whichhad collapsed)and the Guayamouc Bridge (whichwas unserviceable); (iii) rehabilitation of about 35 km of the Gonaives-Cap Haitienroad (deferredfrom the SixthHighwayProject); (iv) acquisition and utilizationof tools, equipmentand spare parts for road maintenance; (v) technicalassistanceto strengthenthe staff skillsof the Direction Des Transports(DDT) in respect of planning, road maintenance, equipment management, and support of a programto improve labor-based techniques for secondary road constructionand maintenance. (b) Maritime Services, the components in support of the ServiceMaritimeet de Navigationd'Haiti (SEMANAH), included: (i) constructionof a slip-way and yard for inspectionand minorrepairs of vessels; 5 (ii) constructionof a trainingcenterfor seamen; (iii) technicalassistanceto strengthenSEMANAH'sadministration, management and operation. (c) Port Imorovement, assistingthe AutoritePortuaireNationale(APN)with a detailedstudy of the problemscausedby silt on the mooringbasin of the JeremiePort, preparationof preliminary studiesand, followingIDA review and approval,preparationof detailedengineering for the remedialworks. 14. The responsibility for project executionwas dividedamong three implementing agencies: (a) DDT for the roads andbridges,(b) SEMANAH for the maritimeregulatory servicefacilities,and (c) APN for the Jeremieport engineeringstudies. A Project Coordination Unit (PCU)was established to assure proper coordination and monitoringof implementation, as well as to produceprogressreports. The PCU comprisedthe Directors of DDT, SEMANAHand APN, and a seniorrepresentative of the Ministerede ''Economie et des Finances(MEF) -to whichAPN reports-,chairedby the Director of DDT. A qualifiedand experienced engineer,responsible for the dailyfollowup of project implementation was also appointedas a ProjectImplementation Officer. Consulting servicesand technicalassistancewere contractedto provideengineering, supervision and technicalsupportto the implementing agenciesin chargeof eachcomponentof the project. 15. The total cost of the projectwas estimatedin the StaffAppraisalReport (SAR)at US$ 24.0 million, with a foreignexchangecost of US$ 18.7million(representing78% of the total projectcost), and localcosts of US$ 5.3 millionequivalent.Includedin this cost were physicaland price contingencies, whichrepresented10.25%of the total base cost. Physicalcontingencies ranged from 5% for civilworks for whichdetailedengineering were completed,to 15% for itemsfor whichonly preliminary estimateswere available. Price increasesfor both local and foreigncosts components were assumedat 3% for FY87 and 1% for FY88-FY89,in accordancewith Bank Guidelines on expectedprice increases. The IDA credit of US$ 20.0 million(equivalent to SDR 16.6million) was to financethe full foreignexchangecosts and 25% of local costs. The GOHwas to financethe balance of US$ 4.0 millionequivalentin local currency. B. ACHIEVEMENT OF OBJECTIVES 16. Improvement and rehabilitation of roads and bridges. The project accomplished substantially this objective. 17. DrainageStructures. Contractorsfinishedthe constructionof eight 16-meter bridges and 27 culverts(2m x 2m). Workswere completedbetweenthe beginningof 1987 and the first quarterof 1990 withinthe SAR's estimatedschedule. Three fords includedin the SAR were not built. The finalconstructioncosts totaledUS$ 7,652,214 equivalent,comparedwith the SARestimateof US$ 8,663,900. 6 18. Bridges. Contractorscompletedthe constructionof: (a) the Fer-a-Chevalbridge (four 20-meterspans),on the Mirebalais-Balladere road, and (b) the Guayamouc bridge at Hinche (four 20-meterspans+ 10 meters). Both were builtin 1988, and their finalcost was US$ 4,692,368 equivalent, whilethe SAR estimatewas US$ 3,600,300. These works were completedin less time than estimatedin the SAR. The length of the Guayamouc bridgewas enlargedto 90 m from the 80 m indicatedin the SAR. 19. RoadRehabilitation. The originalrehabilitation programthat includedthe strengthening of 20 km of the North Road and spot repairsand surfacedressingon additional15 km of the road, givinga total of 35 km, was modified with IDA agreement, to includethe whole lengthof 96 km of the road. 20. Improvement of CoastalShippingOperationsand Port Improvement. This objective was not achieved. Regardingthe civilworks for both the slip-wayand the trainingcenter,no morethan the architectural and engineering designswere completed. With respectto the remedialworks andimprovements of the Jeremieport, onlythe consultingservicesfor engineering investigations and a studyof alternativeremedial works,jointlywith the economicfeasibility of these alternatives, were completed. The designand detailedengineering was not undertaken. 21. Strengthening of SectorInstitutions. The achievement of this objectivewas marginal. Althoughtwo studiesto strengthenthe sector institutions (DDT and SEMANAH) were carriedout by foreign consultantshiredunder the program,almost nothingwas implemented, particularly in respectof DDT. We shouldhighlightthat the projectwas virtuallystopped for three years duringthe embargoand politicalproblemsin the countrydid not providea stablebackgroundenvironment for institutional development. 22. Macroeconomics Policies. The completionof the civilworks in the road sub- sector providedreliableaccessto the rural areaswhose populationbenefitedfrom the projectthrough the transport cost savings. Also,the Community ActionMaintenance Program(CAMP),and later sub-projectscarriedout by the Haute Intensitede Main d'Oeuvre program(HIMO)createda numberofjobs that helpedin alleviating to some extentpovertyand unemployment as long as financialaid fromthe Bank was available and used properly. However,when the coup d'etat took place in September1991,most of the benefitswere drastically reduced and,in the followingthree years,economic mismanagement and an international trade embargoled to a sharpdeclinein living standards. Merchandise exports fell from aboutUS$ 200 millionin 1991 to someUS$ 60 millionin 1994, and GNP per capitafell from US$ 320 in 1991 to US$ 220 in 1994. 23. TransportSectorPolicies. A Road TaxationMaintenanceFundingStudywas successfully completedunder the project. The studyconcludedthat revenuesfrom road user chargesshouldbe enoughto cover all routineand periodicmaintenance expenditure, once the network has been rehabilitated and tax collectionsare improved. The study also stated that of the US$ 6.5 millionper year spent on maintenance and rehabilitation, just US$ 1 millionwas spent on works, comparedwith a need of about US$ 15 million. A 7 follow up study (to be funded under the ongoing Credit 269 1-HA) will start in the near future aimed at generating a coherent roads funding strategy. 24. Institutional Development. The objectives of further institutional development on DDT failed, although a good study to restructure its organization and job reclassifications, together with training on planning methods, was done by a consulting firm. SEMANAH has been successfullyrestructured with three new divisions, and under the program various actions were implemented, including: formulating a Maritime Code, compiling a safety manual for vessels and a ship registration code, and provision of an inspection manual for coastal vessels and sailor's registration proceedings. 25. Physical Objectives. In the road sub-sector, all physical targets were completed (see par. 17-19). 26. Economic Results. The economic re-evaluation of the project and the comparison of its results with those of the SAR has been hampered by the loss of all the Bank files related to technical project preparation, due to various changes in the Bank's regions structure, internal movements and many government changes during an unstable political period in the country. Therefore, the economic evaluation of the project components and the risk analysis considered at that time could not be reviewed. Since the completion of the civil works on the road sub-sector, no routine or periodic maintenance has been carried out at all. Therefore VOCs should have been higher than those considered at appraisal, and the traffic growth rate lower than that considered at SAR. The traffic counts handed over by the Borrower during the closing supervision mission are not updated (the latest records are April 1990) and not reliable, showing, for example, the same average daily traffic existing ten years ago on the Gonaives-Cap Haitien section. So, the economic analysisto compare ERRs assessed at appraisal required more assumptions than usual, but the indications are that benefits of the main components (Northern Road and principal bridges) were lower and less sustainable than expected. 27. The assumptions made for the economic post evaluation considered: (i) traffic growth as same rate as GDP since 1990; (ii) unit VOC same as in SAR; (iii) no maintenance costs as no maintenance was undertaken. Actual construction costs were used. 28. The results of the economic evaluation show a diminution compared with the estimated in the SAR. Thus, as can be seen in Table 9 (A) for Drainage Structures, while the estimated EER ranged from 16.2% to 87.3%, the actual go from 17.3% to 77.9%; (B) for the two main bridges estimated ERRs were 18.3% (Guayamouc) and 120.2% (Fer-a- Cheval), while the actual are 13.8% and 87.3%, respectively; and finally, (C) for the Cap- Haitien road, the estimated ERR was 28% and the actual 19%. For the whole project, the average cost-weighted ERR derived from the SAR estimates was 39% and the actual 31%, showing a loss of more than a fifth from the estimated originally. 29. During the mission, the Gonaives-CapHaitien road section, rehabilitated in early 1995, was entirely toured. After only five years in service it had deteriorated. The 8 reasonsfor this deteriorationare: the absolutelack of maintenance and the heavyvehicle trafficon the road (operatingoverloadedand thereforecausingdamageto pavement structuresand bridges). This road is one of the mainnationalroads in the country. C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT 30. The project was scheduled to start in mid 1987 and completedon June 30, 1991. Soon after launching,someproblemsarose due to civilunrestand violentpolitical demonstrationsand some civilworks to be carriedout on the road were affectedand had to stop. Eventhough the overallperformance for the firstthree years maybe considered satisfactory,politicalchangesandan increasingsocialunrest, motivatedsome delaysthat slowedthe project,the climaxbeingthe coup andthe sanctionsimposedthereafterby the international community. 31. Somecomponentsof the projectwere onlypartiallyachieved. Concerning the physicalworks, onlythose includedin the road sub-sectorwere completed,with a considerable delayin the NorthernRoad, as comparedwith the scheduleestimatedin the SAR. The civilworks foreseenfor the maritimesector couldnot be accomplished, nor the full technicalassistancefor the remedialworks on the Jeremieport. The strengthening of the sector institutions,the studiesandtrainingincludedin the SARwere carriedout, but were not fiully implemented.The detailsare summarized as follows. Road Sub-sector 32. Road Rehabilitation. The originalrehabilitation programthat includedthe strengthening of 20 km of the North Road and spot repairsand surfacedressingon additional15 km of the road, givinga total of 35 km, was modified with IDA agreement. The reasonwas severedegradationof the entire Gonaives-Cap Haitienroad resultingfrom lack of maintenance duringthe periodbetweenthe time of preparationof the program, when a comprehensive studyof the road network was carriedout in 1981 by a consulting firm on the FifthHighwayProject, and the actualcontractingof the works. For the worse, the conditionof the road deterioratedheavilyduringthe rainyseason. As a result, the wholelinkbetweenGonaivesand Cap Haitien,of 96 km, had to be rehabilitated. 33. The firstworks contract,signedunder Credit 1220-HAin 1983,with a contractor whose performance turned out to be inadequate,was rescindedin early 1987. A new contractunder Credit 1756-HAsignedin mid 1987,was based on the scope of the works contractedin 1983under the previousSixthHighway Project. The new contractwas thereforeexpandedto includeadditional works neededdue to the deteriorationof the road that took place since 1983. The expansion of the scope of the works was madepossible through parallelfinancing obtainedfromthe CaisseCentralede CooperationEconomique (CCCE),that also providedthe counterpartfundswhichGOH shouldhave contributed. 9 As a result, the Gonaives-Cap Haitien road was divided into three sections: A (30.2 km), B (38.7 km) and C (27.3 km). IDA financed the works on sections A and C, while CCCE on section B. The works were eventually accomplished under the good supervision of a foreign consulting firm. The final costs were US$ 5,681,190 for sections A and C and FF 19,871,457 for section B. 34. Along the construction period (which started in April 1988) there were delays in payment due to a chronic lack of counterpart funds and political instability caused by frequent changes within the GOH's cabinet, which led to poor management that resulted in cash flow shortages. The contractor stopped the works in October 1988, following non payment of local counterparts. Seven months later the works recommenced after the signing of a major amendment of the contract in May 1989, but this was not without additional costs due to further deterioration of the road and a penalty for work stoppage. The entire link was completed in 1990. 35. Road Maintenance. The technical assistance for SEPRRN was provided by a consulting firn which was actively involved in training MTPTC's personnel before the beginning of the project, and then it was continued with the services of a personal consultant that was hired later on. Both had good performance. The main problem was the chronic lack of funds to allocate on maintenance, far below the needs. 36. Under the project, SEPRRN was given equipment and diverse tools for road maintenance and managed to undertake either construction or road maintenance of departmental and feeder roads, working along with 56 communities under the Community Action Maintenance Program (CAMP). Within this program 666 km of secondary and departmental roads were maintained. Nevertheless, due to fund shortages that impeded continuity of the works, CAMP with 27 communities was stopped in December 1987 (the program had not received any payments since August 1987). The works were resumed later on, but because of an increasing shortage of budget allocated to SEPRRN, this task was discontinued. Only after a major amendment on April 1991, which implied a restructuring of the Project did the works start again under a new unit within the MTPTC called Unite de Coordination d'Haute Intensite de Main d'Oeuvre (UC-HIMO) to which all the remaining funds of Credit 1756-HA, along with the one from Urban Development Credit 1.338-HAand Special Fund SF1-HA, were reallocated. 37. In view of the critical level of unemployment and the accumulated backlog of infrastructure maintenance, the new GOH decided to finance a three year priority labor intensive Road Maintenance Program with those resources which amounted to about US$ 4,000,000. An additional provision of US$ 800,000 was given out by the Fond d'Aide et de Cooperation (FAC) to GOH in order to finance the local counterpart and to assure a revolving fund for the Program. The main objectives of the program were: (a) generate employment, (b) carry out some priority maintenance activities on the road and drainage networks and, (c) test management tools and labor techniques proposed for both urban and interurban sub components. IDA agreed to finance the purchase of materials, tools, fuel and supplementary staff working hours, plus the expenses of the UC-HIMO, comprising a foreign labor intensive expert and a local accounting firm. 10 38. ProjectAmendment. Accordingto these changes,a major amendment was necessaryand the fundswere reallocatedas shownin Table A, below. The closingdates of the two referredcreditswere extended: Credit 1338 and SF1to December31, 1991 and Credit 1756 to June 30, 1992. Table A: FinalAllocationof Credit Resources (S DR) Category Original Amendment Allocation 1. Works for Parts A and B 11,320,000 10,850,000 2. Goods for Part A 1,180,000 800,000 3. Technical Assistance, Training, Consultants' Services and Audits: (a) for Parts A and B 2,450,000 4,650,000 (b) for Part C 210,000 300,000 4. Unallocated 1,440,000 - Total 16,600,000 16,600,000 39. HIMOwork was undertakenin two phases,the first phase fromMay 1991 to June 1993,the secondphase whenthe projectwas reactivatedin 1995 untilthe new closing date of June 30, 1996. UnderPhase I, eight sub-projects were fullyaccomplished and anothertwo partiallycompleted. Its total cost was US$ 1,626,000. Under PhaseII, five sub-projectswere completedand anotherfour started.In addition,materialsfor another two sub-projectswere purchased. The six uncompletedsub-projectsare goingto be continuedunder Credit 2691-HA. The total cost of Phase II was US$ 3,840,000,financed by IDA entirely. 40. At the beginning,the tasks had some delaysbecausethe staffteams werejust formedand faced certaindifficulties with the bureaucraticproceduresto whichthe new officials were unfamiliar and for some monthsvery littleprogresswas made. The presence of a residentrepresentative in the countrywould have solvedmost of these problems. The work pace increasedandin September1991,the credit disbursement reached approximately US$ 120,000. Followingthe coup, IDA suspendedpaymentsand the works sloweddown. In September1992,due to the devolutionof G 3,980,000(US$ 800,000equivalent), for a double paymentmadeto a consulting firm (this fact was detectedlater by the auditors),the pace of the works sped up, with US$ 240,000 disbursedin November1992,and from then on sloweddown untilthere were no more fundsavailable by June 1993. Afterthree years of trade embargo,the legal authorities were reinstalledby mid 1995 and the projectwas reactivatedand the non-disbursed amount (US$ 3.71 million)was appliedto Phase II giventhe successthe programhad 11 shown. The HIMOcomponenthas turned to be an outstandingpart of the Project and was giventechnicaland financialcontinuity by meansof the ongoingCredit 2691-HA. 41. TechnicalAssistancefor DDT. A foreignconsultingfirm completeda study on the institutional and technicalissuesof DDT. A numberof recommendations were made for institutional improvements in accordancewith DDT and an engineering council, reportingdirectlyto the Minister. Not muchfollow-upwas madeon that study, due to continuouspoliticalchangesin the MTPTC that have occurred sincethe studywas completed. Whenthe new Administration took officein February 1991,another comprehensive Institutional Reviewof the wholeMinistrywas undertakenwith financing from the IDA's SpecialFund SF1-HA. This study was well receivedby the new GOH, and its recommendations were to be includedas an inputin the newRoad Maintenance Project, then under preparation,althoughno changeshave been done so far. The technicalissuesof the task fulfilled by the consultantfirm -developedfor the Service d'Etude et Planification (SEP)-,includedsector data banks, methodologies on maintenance planning,economicfeasibility of road improvement, analyticmethodsto deriveunit costs on road constructionandtrainingfor a numberof staffengineerson the HDM III modelused for performing the feasibility studiesof two road sectionswithinthe trainingprogram. Thispart of the technicalassistancewas not implemented. Maritime Services 42. CoastalShipping. Regardingthe civilworks for both the slip-wayandthe trainingcenter, no morethan the architectural and engineering designswere achieved. Despitesome problemsrelatedto some designaspectswith the boat repair facility(which was later revised)and certainover-designof the trainingfacility,the key conflictwhich impededany progressin the works construction was an internaldispute between SEMANAHand APN concerning the land allotmentneededfor those purposes,which was to be acquiredfromAPN. 43. SEMANAH was createdby Decree 11 of March 3, 1982 as part of the Government'sagreementunder the Port Development Project (Credit 1121-HA), which definedits functionsand organization. The agencyis in chargeof the regulationand administration of the maritimeservices,includingefficiency and safetyof shipping operations. SEMANAH has no financialresourcesof its own (to whichit has the right under the provisionsof Decree 11). Only eightmonthsafter its creation,SEMANAH's right to collectfees from coastal and sea-goingshipswas taken away from it withoutany legal basisand givento APN, leavingSEMANAH totally dependenton allocationsfrom the Government'sgeneralbudget. Throughthe years those allocationsprovedto be insufficient to ensureadequateperformance.From FY 88 to FY 91, the budgeted financialresourcesstood at US$ 200,000,whereasthe minimum agreedbudget under the project shouldhave been an averageof about US$ 1,000,000. 44. A foreignconsulting firm was hiredin order to developoperationalefficiency and to establisha trainingprogramfor seamen. Thattechnicalassistanceprovedto be quite good and the consultantsprepared a MaritimeCode and SafetyandInspections 12 regulations, but due to GOH's inactionneitherof them were approvednor enforced. Nevertheless,the partialrestructuringof SEMANAH whichwas madefollowing recommendations of the consultants, providedsomemanagerial benefits. 45. Port of Jeremie. The amountof moneyconsideredat appraisalfor allocationto APN was not enoughfor the three stagesof remedialworks. In fact, the financial resourcesjust met the costs of the basicstudiesand designs. At present,the APN authoritiesare considering a combination of two alternatives developedby the consultants, but its preliminary high cost would make it difficultto justify. 46. To sumup, the factorswhichimpactedon the project are as follows: (a) Factors not subjectto governmentcontrol: these factors includea high degreeof ungovemability in the country,exacerbatedby a constant social restlessness, and finally the overthrownof the governmentwhichled to the embargo'simpact,by far the worst negativefactor faced by the project. (b) Factors subjectto governmentcontrol:these factors includethe constant turnoverof high-ranking officials,recurrentscarcityof counterpartfunds, lack of allocationof appropriateresourcesto road maintenance andto the sector agencies,slow responseto enforcethe MaritimeCode and other regulations,inactionto enforcethe load axle control,and finallyabsolute lack of coordination betweenagencies(APN/SEMANAH, on land allotment;andDDT/SCCVon axleload control). (c) Factors subjectto implementing agenciescontrol: these factors include lack of experience regardingthe Bank's proceduresand regulationson the type of projectunder executionand neglectin implementing the recommendations and productsderivedfrom technicalassistance. 47. The finalcost of the project amountedto US$ 25.33 million,or 5.54% greater t