Uganda - Second Highway Project

* Document of The World Bank FOR OMCIAL USE ONLY Report No. 5133 PROJECT COCPLETION NOTE UGAN1DA SECOND HIGHWAY PROJECT (CREDIT 164-UG) ;3 June 14,1984 Eastern Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank audhorization.  FOR OMCLIL USE ONLY PROJECT COMPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) TABLE OF CONTENTS Page No. * Preface ............................................................ Basic Data Sheet ....................................ii Highights .iv I. THE PROJECT. 1 II. EVALUATION OF THE PROJECT. 2 III. CONCLUSIONS ......... 5 Tables 1. Construction Costs. 6 2. Disbursements. 7 3. Traffic and Economic Evaluation. 8 4. Vehicle Operating Costs. 9 Attachment Borrower Comments .10 This document has a restricted distribution and may be used by recipients only in the performance of their official duties Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT COMPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) PREFACE Presented herewith is a Project Completion Note on the Second Highway Project in Uganda for which Credit 164-UG for US$11.6 million was signed on September 29, 1969. The credit was fully disbursed on November 25, 1980. The Project Completion Note was prepared by the Eastern Africa Regional Office in 1983. Because of the difficult political conditions in Uganda from 1972-1978, during the latter part of the project period, limited information was available on the implementation of the project and its comple- tion. It was, therefore, decided that a Project Completion Note, rather than a Project Completion Report, would be prepared. In accordance with the revised procedures for project performance audit reporting, this completion note was read by the Operations Evaluation Department but was not audited by OED staff. The Completion Note was sent for comment to the Borrower who indicated by cable that they had no comments (see attachment).  - ii - PROJECT COMPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CEEDIT 164-UG) BASIC DATA SHEET KEY PROJECT DATA Appraisal Item Estimate Actual Total Project Cost 16.5 n.a. /a Underrun/Overrun (X) - n.a. /a Credit Amount (US$ million) 11.6 11.60 Disbursed - 13.03 /b Repaid (as of March 31, 1984) 0.52 Outstanding (as of March 31, 1984) - 12.51 Date Physical Components Completed 06/30/73 02/80 Proportion Completed by Original Completion Date (Z) - 80 Proportion of Time Overrun (Z) - 287 Economic Rate of Return (Z) 10-28 n.a. /c CUMULATIVE DISBURSEMENTS (US$ million) CY69 CY70 CY71 CY72 CY73 CY74 Estimated 0.2 3.2 7.8 10.8 11.6 - Actual - - 3.7 8.0 9.0 9.4 Actual/Estimated (Z) - - 47 40 69 81 CY75 CY76 CY77 CY78 CY79 CY80 10.0 10.3 10.5 10.8 11.3 11.6 86 89 91 93 97 100 OTHER PROJECT DATA First Mention in Files - 11/21/69 Government's Application - - Negotiations - 07/14-18/69 Board Approval Date - 09/23/69 Credit Agreement Date - 09/29/69 Effectiveness Date - 12/01/69 Closing Date 06/30/74 06/30/80 /d Borrower Republic of Uganda Executing Agency Ministry of Works, Communications and Housing Fiscal Year of Borrower July 1 - June 30 Follow-on Project Third Highway Credit Number 1445 Credit Amount (US$ million) 58.00 Approval Date 03/13/84  - iii - MISSION DATA Mouth/ No. of No. of Staff- Date of Item Year Weeks Persons Weeks Report Preappraisal 06/68 n.a. 2 n.a. 07/01/68 Preappraisal 02/69 1.0 2 2.0 03/11/69 * Appraisal 05/69 1.4 2 2.8 08/25/69 Supervision I 11/69 1.0 n.a. n.a. 01/15/70 Supervision II 03/70 1.0 1 1.0 05/28/70 Supervision III 09/70 1.0 1 1.0 10/26/70 Supervision IV 03/71 0.7 2 1.4 04/09/71 Supervision V 07/71 1.9 2 3.8 07/23/71 Supervision VI 03/72 1.0 5 5.0 05/05/72 Supervision VII 03/74 0.3 1 0.3 04/09/74 Supervision VIII 03/76 1.0 1 1.0 04/06/76 Supervision IX 02/78 0.6 1 0.6 03/28/78 Supervision X 10/78 0.4 1 0.4 12/19/78 Supervision XI 08-09/79 1.4 1 1.4 11/13/79 Supervision XII 03/80 2.0 2 4.0 05/01/80 Supervision XIII 10/81 0.6 1 0.6 11/08/83 CURRENCY EXCHANGE RATES Name of Currency (Abbreviation) Uganda Shilling (U Sh) Appraisal Year Average (1969) US$1 = U Sh 7.14 Intervening Years Average (1970-79) US$1 = U Sh 7.49 Completion Year Average (1980) US$1 = U Sh 7.57 La Project costs not available; costs of road construction items were estimated at US$14.1 million at appraisal and at US$ 14.5 million at completion. /b Includes exchange adjustment of US$1.4 million. /c Not possible to calculate. /d Closing extended five times from 06/30/74 to 06/30/76, 12/31/77, 06/30/79, 12/31/79 and 06/30/80.  - iv - PROJECT COMPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) HIGHLIGHTS This credit was made in 1969 for the concluding phase of a series of road construction and reconstruction projects identified in 1962. The first and major parts of the project implementation gererally went well. By 1972 and early 1973 a number of important project objectives had been accom- plished. Since that time project supervision has been very difficult due to the political and security situation of the country, which also seriously constrained the remaining project implementation. Furthermore, organized Government activities like highway maintenance almost ceased until the early 1980s (para. 2.05). With the exception of a one-day mission, no supervision missions were carried out between 1972 and 1978. Since that time the security situa- tion has prevented visits to most project road sections and the economy of Uganda has drastically changed. In addition many earlier records were lost during the liberation war. Much of the information requirements for a PCR are therefore unavailable. For several of the project component costs financed by the Bank are known, but total costs are incomplete since some of the road works especially force account had to be finished by the Government. The present condition of the completed roads has obviously been affected by the lack of organized maintenance, and only limited information is now available. No organized traffic counts were done until 1982 and vehicle operating costs have not been estimated until recently and are now heavily influenced by scarcity of foreign exchange and consequent price distortions. No meaningful ex post estimate of the economic feasibility of the project is possible under these circumstances (para. 2.07). Some general indications of the progress of the project can never- theless be made and these are included in more detail below. The principal conclusion is that the main part of the project was carried out as anticipated by the original closing date, and valuable technical assistance was provided as long as IDA funds were available (para. 3.01).  PROJECT COMPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) I. THE PROJECT C. 1.01 The total project cost has been estimated at US$16.5 million equivalent with a foreign exchange component of US$11.6 million. 1.02 The project included: (a) the construction and reconstruction of about 665 km of primary, secondary and agricultural roads; (b) a road investment and maintenance study by consultants; (c) feasibility studies and detailed engineering of about 400 km of roads; and (d) technical assistance for the staffing and training requirements of the Ministry of Works, Communications and Housing. 1.03 The credit was approved on September 23, 1969 and became effective on December 1, 1969. 1.04 A total of US$13,032,534.16 (including an exchange adjustment of US$1,432,534.16) was disbursed under the credit until November 5, 1980. This was broken down by categories as follows: Amount SAR disbursed estimate US$ Road construction and reconstruction 9,408,248.42 7,770,000 Consultants services 1,347,252.53 1,330,000 Technical services 844,499.05 350,000 11,600,000.00 Contingencies 2,150,000 Exchange adjustment 1,432,534.16 13,032,534.16 11,600,000  -2- II. EVALUATION OF THE PROJECT 2.01 Until the late 1950's, Uganda had the best highway system in Eastern Africa in terms of coverage and technical standards. This was due to a long tradition of communal labor, the existence of an abundant supply of good road building materials and the presence of a competent and well staffed highway administration. During the 1960's, the condition of the highway system deteriorated. First, there was a loss of large numbers of personnel at executive and administrative levels, and second, the funds available for road maintenance were reduced to a considerable extent. Parallel with these developments, traffic was increasing so that many of the roads built for light traffic became increasingly difficult to maintain, and the planning for future highway development was not done, largely because of insufficient staff. 2.02 IDA's efforts to assist Uganda to overcome deficiencies dated back to 1962, when an attempt was made to identify road investment needs. Subsequent progress in project preparation was slow, mainly because of staffing deficiencies in the highway management. As a result, the first IDA Credit to Uganda (Credit 108-UG) for US$5.0 million equivalent for 161 km of road construction or reconstruction was not signed until 1967. It took two more years to complete preparation of the present project, which constitutes the second and concluding phase of the original list of road investments that were identified in 1962. 2.03 The civil works components of the Second Highway project were largely completed by 1974 and the road investment and maintenance study by 1972. By that time the highway investment study, two feasibility studies and detailed engineering for five road sections had been completed. Technical assistance to the MOW and remaining civil works continued until 1980. The original closing date of June 30, 1974 was extended five times to allow for continued disbursement of funds for technical assistance. The credit of $11.6 million was fully disbursed on November 5, 1980. While the project was supervised adequately up to 1972 when mDst of the civil works were completed or contracts awarded, country conditions then prevented adequate supervision until 1978, except for one brief mission in 1974. In addition, the works have not been physically inspected in the last eight years, primarily because of security reasons in the country. For the same reasons, neither Government nor the Bank has been able to assess the impact of the project. Hence, a re-evaluation of the benefits which were forecast at appraisal would be difficult. As a result of the liberation war in 1979, most of the Government files were either destroyed or lost. Although some of the construction costs are available, traffic counts and estimates of vehicle operating costs are not. In addition, many of the Ugandans in management positions at the Ministry of Works fled the country or disappeared during the Amin regime and staff now in place have very little knowledge or recollection of events going back to 1969 and the early years of project implementation. 2.04 Given the constraining circumstances above, any assessment of the project can only be very limited. The physical progress of the project can best be judged by the situation in 1972 when contracts for six of the seven main road sections had been awarded (Table 1). Awarded contracts then covered US$10.9 million of US$11.6 million in the credit. Disbursements are shown in table 2.  -3- 2.05 Up until 1972, the civil works generally went very well. This momentum meant that six of the seven main road sections were completed in early 1973. The Jinja-Bukoloto road, however, cost almost twice the original estimate. After poor performance of the contractor for the Bale-Kayunga-Mabuganyi road and Sezibwa swamp crossing these works were finished by the Government itself. Most of the tea roads were also complete in 1974. The roads in the relatively easy Toro and Ankole areas were finished first, whereas those in the mountainuous and therefore difficult Kigezi area were lasr. A new bridge in this area was included in the project after collapse of an old bridge during flood of the river Ishasha; and finally completed in 1980. The Kabale-Katuna (Rwanda border) road also in the Kigezi area had various problems over a long time. After an initial high bid price the works were rebid and a contract was awarded in 1974. This was also the reason for the first extension of the Credit closing date. The last section of this road, the Katuna swamp crossing, was finally completed by Rwanda in 1978. This crossing was just on the border and Rwanda at the time was constructing their part of the same road. Rwanda was reimbursed the cost under this Credit. Some studies were made to use remaining funds to bitumenize part of this road but in the end all credit funds were needed for the Ishasha bridge above; and technical assistance. Traffic remains low since another road in Rwanda from Kigali, although longer, is in better condition. 2.06 Despite the fact that traffic in Uganda has generally decreased due to country conditions, traffic on the main project roads has generally increased since the road improvements were carried out (table 3). Furthermore vehicle operating costs have increased dramatically (table 4) though the figures have to be considered very cautiously in view of the devaluations and difficulties in selecting the most relevant exchange rate. Even using a shadow exchange rate of several times the official rate there has been a substantial vehicle cost increase over the period. On these grounds a re-evaluation of at least most of the main roads would give a satisfactory return. 2.07 At appraisal, the economic returns on the various road components included in the project varied from 10% to 28%. A 1982 consultant survey of traffic on certain selected roads in Uganda concluded that overall traffic levels were about 50% below those which existed in 1972, corroborated on the basis of vehicle fleet and fuel imports. Because the economic justification for several roads were based on the value added of increased production in addition to savings in vehicle operating costs, it is likely that some of the economic returns today would be below acceptable levels. However, it is not possible to derive any specific, quantified conclusions since they are clouded by security and political events and the entire economy of the country has been radically changed. These events which occurred during project implementation could not have been foreseen at appraisal. 2.08 The feeder roads (including tea roads) are therefore much more difficult to judge. The last area was not complete until 1980 due to cost increases and many other constraints. Nevertheless the major parts of the works were carried out as anticipated although with delays and cost overruns.  -4- 2.09 One of the main reasons for extending the credit closing date was to maintain essential technical assistance as long as possible which eventually covered the period June 30, 1974 to Nuveuber 5, 1980, after most feasibility studies and main roads had been completed. Under normal circumstances this would have been difficult to justify. Under the very unusual conditions of the country in these years the technical assistance provided a nucleus of continuity in the Ministry of Works and Housing. A collapse of the works department in this Ministry was unavoidable in the liberation war but the effects of this were diminished. Thus four of the original eleven experts in key positions were retained until 1980 and well justified. t  -5- III. CONCLUSIONS 3.01 The principal conclusion is that the main part of this project was carried out as anticipated despite the fact that records cannot give the complete and accurate estimate of construction costs and benefits. Six out of seven main road sections, the main studies and two of three tea road areas were completed by the original closing date. 3.02 The remaining road section Kabale-Katuma was eventually finished since it was a potentially important international road link, but the full impact of this road remains to be achieved. 3.03 Although the absence of complete cost data precludes an economic re-evaluation, traffic counts in 1982 indicate that wDst main road sections have shown increases in traffic although not quite as high as expected. Most of the project goals have therefore been achieved. 3.04 With a few exceptions, performance of contractors and consultants had generally been good. The vital continued technical assistance during a very difficult time clearly justified the prolonged extensions of the Credit. J  PROJECT COHPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) Construction Costs Final or Construction Cost Appraisal Cost In 1972 Estimated Completion Road Section Cost Estimate or estimate Cost in 1980 Date U.Sh. (OOO)/_ Main roads Masaka-Kyotera 13210 19850 19476 7/72 Kabale-Rwanda Border(Katuna) 6780 10770(E) 12362 1978 Iganga-Mbale 15710 13770 17889 12/72 Kayunga-Bale ) Kayunga-Mabugaiiyi ) 8570 10000(E) 9238 4/73 Sezibwa Swamp Crossing) Jinja-Bukoloto 9280 19000(E) 18268 4/73 Feeder Roads Mbale-Nkokonjeru 5710 7460 7331 12/72 Malyugo-Akororo 2500 2170 2138 5/72 Tea Roads: Toro area 4640 ) 10/70 Akkole area 5000 ) 20880(E) 23059 2/ 1973 Kigezi area 7850 ) 2j80 Contingencies 21420 100670 103900 109761 1/ 7.14 U.Sh. - US$1 in 1972-1974 2/ Including U.Sh. 2,685,000 for Ishasha Bridge.  -7- TABLE 2 PROJECT COMPLETION NOTE UGAIDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) Disbursements Road Construction and Reconstruction Consultants Technical Calendar Year US$(OOO) Services Services 1971 3657.1 1972 3581.2 607.7 45.7 1973 674.3 295.2 35.1 1974 212.2 158.3 43.7 1975 472.2 47.0 47.5 1976 129.6 47.1 153.1 1977 41.0 55.3 77.5 1978 92.4 42.3 204.3 1979 401.4 24.5 120.4 1980 146.8 69.9 117.2 9408.2 1347.3 844.5  PROJECT COMPLETION NOTE UGANDA SECOND HIGHWAY PROJECT (CREDIT 164-UG) Traffic and Economic Evaluation Traffic and Economic Evolution Road Section SAR Base SAR Econ. SAR ADT 1/ 1982 Actual Primary & Secondary Roads Cost US$(OOO) Returt 1967/68 ADT Main roads Masaka-Kyotera 1850 21X 335 945 Kabale-Rwanda Border(Katuna) 950 15 48 60(1978) Iganga-Mbale 2200 10 62 357 Kayunga-Bale ) 600 13 111 315 Kayunga-Mabuganyi ) 270 11 78 315 Sezibwa Swamp Crossing) 330 15 561 286 JinJa-Bukoloto 1300 12 185 312 0 1380 2590 1 Feeder roads Mbale-Nkokonjeru 800 20) Maiyugo-Akororo 350 13 ) Not available Tea Roads: Toro Area 650 28 ) Ankole Area 700 19 ) Kigezi Area 1100 16 ) 11100 1/ ADT: Average daily traffic.  PROJECT COMPLETION NOTE UGANDA SECOND IIIGUIWAY PROJECT (CREDIT 164-UG) Vohicle Operatiiig Costs 7-ton truck 62 passongor bun 20-toni tractor-trailr Light vehicle Bitumen Gravel Earth Bitumen Gravel Earth Bitumen. Gravol Earth BLtumen Gravcil Earth Appraisol. US c/km 8.44 10.33 12.95 10.87 13.58 17.68 17.85 21.76 28.11 4.1 5.1 7.0 (1969) Economic Cost Typical pecel 70 55 40 70 55 40 70 55 40 - - - (Km/hr) U.Sh/km I/ .603 .738 .925 .776 .970 1.263 1.275 1.554 2.01 .292 .364 .50 Kabale-I;n t ;in U.Sh 1km road stnUdy (1'978) 5.05 7.61 - 6.00 9.04 -8.22 11.53 1,0 1.31 - Economlc Cost US c/km 2/ 6U.1 102.6 - 80.9 121.9 - 110.8 155.4 - 16.2 24.4 Berger 6tt1tiv (1982) US8 V.km I Finaneinl cuHL 79.0 91.0 - 78.0 90.0 - 117.0 134.0 - 55.0 69.0 Economic cout 58.0 81.0 - 55.0 75.0 - 108.0 114.0 - 22.0 36.0 Roughness 25n0 4000 - 2500 4000 - 2500 4000 - 2500 4000 1/ U.Sh. 7.143 u US$1, official exchange rate 2/ U.Sh. 7.4175 - US$1, official exchange rate  - 10 - ATTACHMENT ZiCZC DIST5164 WsBl9491 IIIST REF TCP FCA OEDLbR WBW9491 84.05.23.0825 9491 84.05.23.0825 197638 IWORLDBKIIJT 61370 FINANCE ATTN: MR SHIV S KAPUR YPL1R LETTER TO MR EKINU, SECRETARY TO THE TREASURY DATED MARCH 12, 1984 STOP THE DRAFT PROJECT CONPLETION REPORT ON UGANDA SECOND HIGHWAY PROJECT HAS BEEN FOUND SATISFACTORY AND NO COMMENTS TO MfAKE. DELAYED COMMUNICATION IS REGRETTED STOP REGARDS ONEGI OREL HEAD, AID COORDINATION ITNISTRY OF FIMANCE KAJIPALA. 23/5/84 197688 WORLJtBKMIJT =05230828 NNNNN