Mauritania - Fourth Highway Project

Docunent of The World Bank FOR OFFICIAL USE ONLY Report No. 8109 PROJECT COMPLETION REPORT ISLAMIC REPUBLIC OF MAURITANIA FOURTH HIGHWAY PROJECT (CREDIT 1231-MAU) OCTOBER 17, 1989 Infrastructure Operations Division Sahelian Department 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 authorization.  FOR OFFICIAL US ONY THE WORLD BANK Washir,gton. D.C. 20433 06Ke ofioomtm-Cai i opmatm EvMMtiMJn October 17, 1989 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECTt Project Completion Report on Islamic Republic of Mauritania Fourth Highway Proiect (Credit 1231-MAU) Attached, for iitformation, is a copy of a report entitled "Project Completion Report on IsIlaic Republic of Mauritania Fourth Highway Project (Credit 1231-MAU)" preparad by the Africa Rtegional Office. No aadit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restrice distribution and may be used by recile nte only in the pfoannae of their official duties Its contents may not otherwie be dbclsd without Wold Bank authorrintb  FOR OFFMCIAL USE ONLY ISLAMIC REPUBLIC OF MAURITANIA FOURTH HIGHWAY PROJECT - CREDIT 1231 MAU PROJECT COMPLETION REPORT TABLE OF CONTENTS P?Me No. Preface ..*.* ............... Basic Data Sheet................................ lii Evaluation Summary ................ . v IT INTRODUCTION. . .. ................ 1 II. PROJECT IDENTIFICATION, PREPARATION, AND APPRAISAL .......... 3 III. PROJECT IMPLEMENTATION AND COSTS ............................ 8 IV. INSTITUTIONAL PERFORMANCE ................ . . 10 V. ECONOMIC RE-EVALUATION ................ ........... * . 10 VI. THE ROLE OF THE ASSOCIATION ........*..**..*......*....*.... 11 VII. CONCLUSIONS AND RECOMMENDATIONS ............................. 11 TABLES Estimated and Actual Disbursements, by Project Component ... 13 ATTACHMENTS 1. Comments from Kuwait Fund for Arab Economic Development ,... 14 2. Comments from Arab Fund for Economic and Social Development.. 15 MAP IBRD 15467R1 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.  ISLAMIC REPUBLIC OF MAURITANIA FOURTH HIGHWAY PROJECT - CREDIT 1231-MAU PROJECT COMPLETION REPORT PREFACE This is the Project Completion Report (PCR) for the Fourth Highway Project in Mauritauia, for which Credit 1231-MAU in the amount of US$4.0 million was approved on April 13, 1982. The Credit was closed on June 30, 1988, three years behind schedule. The last disbursement took place on January 4, 1989 and the remaining outstanding balance, US$62,000, was cancelled shortly thereafter. The PCR was prepared by the infrastructure Operations Division, Sahelian Department, of the Africa Regional Office and is based, inter alia, on the President's Report, the Credit Agreement, supervision reports, correspondence between tha Bank and the Borrower, and internal Bank memoranda. This PCR w4s read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower and Cofinanciers for comments and they are attached to the Report.  - ii - ISLAMIC REPUBLIC OF MAURTANIA FOURTH HIGHWAY PROJECT - CREDIT 1231 MAU PROJECT COMPLETION REPORT BASIC DATA SHEET KEY PROJECT DATA Actual Item Original or Current Estimate Total Project Cost (US$ million) 14.3 la 14.3 Cost Over/Underrun (X) Financing (US$ million) 10.3 /b 10.2 Credit IDA Amount 4.0 4.0 Disbursed 3.9 Cancelled 0.1 /c Repaid 0.0 Outstanding 3.9 Completion of Physical Components (date) 12/31/84 06/30/88 Proportion Actually Completed 25 100 by ibove Date (2) Economic Rate of Return (2) N/A /d N/A Id CUMULATED ESTIMATED AND ACTUAL DISBURSEMENTS (USS illion) Item FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 Appraisal Estimate 0.5 1.4 2.4 3.2 3.7 3.9 4.0 Actual 0.7 0.7 1.4 3.9 3.9 Ic Actual as 2 29 22 38 100 98 of Estimate  - iii - O T H E R P R O J E C T D A T A Item Original Amended Actual Project Brief 08/06/79 First Mention in Files 02/09/77 Negotiations 09/80 12/81 Board Approval of the Loan 12/80 04/13/82 Loan Agreement Date 05/20/82 Lffectiveneus Date 09/14/83 Closing Date 06/30/85 06/30/86 06/30/88 06/30/87 Borrower Islamic Republic of Mauritania Executing Agencies Ministry of Equipment, Transport and Telecommunication through its Department of Public Works Follow-on Project Fifth Highway Project Fiscal Year of Borrower January 1 to December 31 /a Excludes taxes and duties b Includes US $5.1 M from the Kuwait Fund and US $5.2 M from the Arab Fund and the Government. /c US$62,00p was cancelled. /d A Staff Appraisal Report was not prepared for this project (pare. 2.06). fSt!f wks'- FY Z& zi n zZ 2 n 0e s a 2 a 1 01 e7 a0 I daL Pr,.ppiuaI - - - - - 5.1 18.1 - - - - - - - - 18.2 Appraisal - - - - - - 6.7 28.8 .4 - - - - - - SO.3 Negotiation - - - - - - - 8.6 11.6 - - - - - - 15.2 Supervision - - - - - - - - 2.2 6.3 4.6 6.0 8.4 8.9 6.6 88.4 Other .1 .0 - - - - .2 .5 .8 - - - - - .8 1.6 TOTAL .1 .0 - - - 5.1 20.1 27.4 14.4 6.8 4.8 6.0 8.4 8.9 6.9 98.7  - iv - M I S S I O N D A T A No. Mission Man Date Item Mo./Yr. of Compo- Weeks of Persons sition Report La Identification 03/79 2 H,E 1 08/06/79 /b Identification 10/79 2 H,E 1 11/29/79 Preparation/Appraisal 02/80 1 H 1.5 04/01/80 /c P')st Appraisal 10/80 1 H 0.5 n/a Co-lender Meeting 02/81 1 H 0.5 02/17/81 Post Negotiation 02/82 2 H,E 1 03/10/82 Supervision 1 06/82 1 E 0.2 n/a Supervision 2 01/83 1 H 1.5 02/25/83 Supervision 3 08/83 1 H 0.5 0)9/07/83 Supervision 4 09/84 1 H 1 11/25/84 Supervision 5 06/85 1 H 1 07/15/85 Supervision 6 02/86 1 H 0.5 04/17/86 Co-lenders Meeting 01/87 1 H 0.5 02/12/87 Supervision 7 03/87 2 H 1 04/23/87 Supervision 8 12/87 1 H 1 12/24/87 Supervision 9 031t88 1 H 1 08/05/88 Supervision 10 Supervision 11 Supervision 12 Supervision 13 Supervision 14 Supervision 15 La E - Economist H - Highway Engineer T - Training Consultant LO - Loan Officer lb Project Brief le Issues Paper. The mission prepared the President's Report; a Staff Appraisal Report was not required.  -v - ISLAMIC REPUBLIC OF MAURITANIA FOURTH HIGHWAY PROJECT - CREDIT '231-MAU PROJECT COMPLETION REPORT EVALUATION SUMMARY Obiective The project was designed as a bridging operation as it consisted of studies essential to the preparation of a comprehensive road maintenance project, and the studies, design and completion of betterment works carried out under the Third Highway Project (para 2.06). Implementation Experience The Credit Agreement was signed in May 1982, but the Credit did not become effective until 16 months later because of delays on the part of the Government in ratifying the credit documents (para 2.16). The completion of the highway maintenance study, a key component of the project, was delayed for s.-ral years because of lack of coordination with the Association on the part of the co-lenders (para 3.07). After the initial delay in selecting consultants, the IDA part of the project prcacfded reasonably well (para 6.02). With the exception of start-up delays, the borrower's performance was satisfactory (para 7.02). IDA's performance was adequate and supervision was good (para. 7.03). Results The project provides a sound basis for a follow-up project (para 7.05). Findings Lessons learned include that performance will be enhanced when: (i) the Borrower is willing to institute organizational reforms and to shift the execution of periodic maintenance from departmental forces to contract; (ii) engineering work is completed before construction is started; and (iii) co-lenders financing is pooled rather than restricted to specific project components (para. 7.06).  ISLAMIC REPUBLIC OF MAURITANIA FOURTH HIGiHWAY PROJECT - CREDIT 1231 MAU PROJECT COMPLETION REPORT T. INTRODUCTION 1.01. The road sector of Mauritania is characterized by very high construction and maintenance costs due to vast distances, difficult topography and climate, a lack of materials in some areas, and a shortage of skilled manpower. The road network is subJzct to flash floods during the rainy season and storms during the dry season, which accelerates deterioration and increases maintenance costs. 1.02. Bank Group involvement in highway maintenance started with a maintenance study financed under the First Highway Project (CR. 69-MAU). Under the Second Highway Project (Cr. 159-MAU, FY69), the Equipment Division of the Directorate of Public Works was reorganized, and new procedures were introduced. Four brigades for road maintenance and improvament were established, and new maintenance equipment was purchased. By project completion, 80 percent (400 km) of the road improvement as well as 60 percent (1,800 km) of the annual routine maintenance targets had been achieved. Training for senior level personnel was successful, but only about 40 percent of junior personnel were trained. In addition to insufficient training, the Project Performance Audit Report of February 2, 1978, identified two other :actors as hampering project objectives: (i) establishment of too many brigades at one time to carry out operations when there were shortages of qualified personnel and locvi funds; and (ii) diversion of project equipment to unscheduled activities. 1.03. Under the Third Highway Project (CR. 519-MAU, US$3.0 M, FY75), which inter alia included 365 km of betterment works, the Government and the As3ociation sought to address some of the above issues. The project concentrated on strengthening two maintenance brigades, which required fewer managers and trained personnel. A bilingual trainir.g expert was recruited and materials for teaching provided, and additional mainteiiance equipment was financed. Unfortunately, a number of unforeseeable political and economic difficulties hindered achievement of project objectives. War, successive droughts, accelerated Mauritanization of the civil service without regard to qualification, paralysis of economic activity and a rapid deterioration of public finance, all adversely affected project implementation. Under these circumstances, force account work of the magnitude envisioned at appraisal proved beyond the capacity of the Government to implement, end delays in project execution led to a substantial cost overrun. 1.04. In 1979, the Credit Agreement was amended to reduce the scope of the project from 365 to 215 km of road improvements. To alleviate the pressure on the already constrained Government budget, IDA and the Kuwait Fund for Arab Economic Development (KF), one of the major contributors to  Mauritania's road sector, agreed to finance 100 percent of project costs. At tie same time, the Government made efforts to improve management, namely by: (1) appointing a Mauritanian project manager to work exclusively orn the project; (ii) providing the new management unit with an accountant; and (iii) establishing, a simplified procurement system. In spite of these efforts, due to the persistence of problems outlined in para 1.03, project accomplishments were limited. Although earth works were implemented on 215 km, no drainage structures were provided due to delays and lack of funds. Work on these road sections, which were being damaged by flash flooding in the rainy season, faced certain destruction if they remained unprotected. They are to be completed under the proposed Fourth Highweay Project. 1.05. Implementation and maintenance problems encountered during and after the execution of the Third Highway Project, convinced the Government and the external donors financing the project of the need to reconsider their approach to the road sector. These problems provided further evidence to the Government, and persuaded external donors, that absolute priority was to be given to improving the country's institutional and financial capacity for implementing works and maintaining the country's priority roads. In preparation for the proposed Fourth Highway Project, the Government decided to utilize pzivate contractors rather than use departmental forces to execute all periodic maintenance and improvement works. It also carried out a review of road maintenance administration in February 1980. After discussion with the Association, it was concluded that preceding the es-ablishment of a more permanent improved road maintenance structure, to be determined by further studies included under the proposed project, two units should be created to help improve maintenance efficiency. The first would be a central unit with clear authority to plan road investments and effectively control the execution of works carried out by contractors; and the second would be a road maintenance and equipment unit to execute routine road maintenance operations carried out by regional subdivisions and small force account brigades. 1.06. In the late 1970s, the road network consisted of about 7,800 km of which 1,500 km were paved, 600 were improved earth roads and the remainder unimproved tracks. However, the size of the road network exceeded the capacity of the maintenance organization. It was estimated by consultants in 1976 that the Government would need to spend about US $20 million p.a., or about 10 percent of its budget, to maintain its entire road network to an optimum standard. Thus, it became clear that provision of an adequate maintenance budget would be a major drain on available domestic resources. The maintenance study, to be carried c-: under the Fourth Highway Project, would enable the Government and foreign donors to jointly determine an economically viable maintenance program to be implemented on the basis of a realistic assessment of available domestic and foreign resources. 1.07. The Ministry of Equipment, Transport and Telecommunications (METT), through its Public Works Department (PWD), was responsible for the implementation of the project. 1.08. This report is based on a review of Bank correspondence files, and interviews with Bank staff associated with the project.  - 3 - II. PROJECT IDENTIFICATION. PREPARATION, AND APPRAISAL Identification 2.01. In view of the fu:lure of the Mauritarian adminiBttation to benefit signif'cantly from earlier efforts in the road sector, the Association decided to consider the creation of a semi-autonomous state entity for road maintenance to be organized along the lines of SONADER, the rural development agency which up to the end of 1978 had enjoyed considerable success. The Association was motivated by "the tremendous pocential need for road maintenance in Mauritania," both of existing roads included under the Second Highway Pro4ect, and the new Nouakchott-Kiffa-Nema road. 2.02. An IDA mission was sent to Mauritania in March, 1979, to initiate discussion with the Government on the possibility of preparing a project, mainly comprising a road maintenance component, which would be implemented by a parastatal agency or any other appropriate procedure to be determined by the mission. In the Project Brief dated August 6, 1979, the mission examined various options and concluded that the best strategy would be to undertake an "interim project" with only limited objectives. The project would "establish a nucleus of a public corporation or a planning and contracting agency. Contractors would execute the road rehabilitation and most urgent maintenance activities on a reduced road network. Later, probably under subsequent projects, the public corporation would increase its capacity and gradually would take over the complete road network for maintenance and construction." 2.03. The mission noted that the Third Highway Project had been plagued by a series of inter-related institutional problems including: (i) a shortage of qualified managers and engineers within the METT due to the lack of trained people and low Government salaries; and (ii) disappointing results of the trainJ.ng program. This mission concluded that the cost of maintaining the network proposed for systematic maintenance would average about US $19.0 M per year including US $5.0 M for routine maintenance, US $10.0 M for periodic maintenance of paved roads and US $4.0 M for periodic maintenance of earth roads. About 50% of the maintenance budget would be used on the Noakchott-Nema road, the main east west highway across the country. 2.04. The mission examined the alternative approaches to maintaining the road network includingt (i) increasing Government efficiency, the chances of which were considered "remote;" (ii) involving the private secto= including the use of at least two domestic contractors plus several subsidiaries of foreign firms in the country; and (iii) establishing a Public Maintenance Corporation which could entail some of the sAme types of problems already encountered such as financial, staffing, and management. The mission proposed an engineering credit be used to finance the legal, organizational and technical studies leading to the establishment of a highway authority or a planning and contracting office. The credit would also finance the technical studies leading to cost estimates and bidding documents for rehabilitation and periodic maintenance works. The order of magnitude on the estimates oost of the proposed project was US $50.0 M, which would be split roughly into two with the participation of an interested co-financier, possibly the Kuwait Fund (KF), which had already been involved on earlier road projects in Mauritania.  -4- 2.05. In November, 1979, a mission to gupervise the Third Highway Proj...: reported that because of managerial, financial and technical problems, the project had been classified as a "problem project" since 1977. The project, which had been reduced in scope (para 1.04), was scheduled to be substantially completed by March, 1980. It was 'not expected to achieve the original objective in planning and execution of road maintenance. The road bettorment works carried out under the project faced certain destruction by flash flooding during the rainy season. Drainage structures were not executed under the project because of the lack of funds." The mission recommended that "an urgent interim project be prepared that would at least include design and construction of drainage structures on roads improved under the ongoing project, and investrment studies of road maintenance and reinforcement of paved roads." Preparation and Aupraisal 2.06. In February, 1980, a mission consisting of one engineer was sent to Mauritania to prepare the interim project propozed above. The mission was instructed to prepare a President's Report on its return, as it was not considered necessary to propare a staff appr-isal report for an engineering credit or supplementary financing. In the Issues Paper dated April 1, 1980, the mission outlined project objectives, descriptlon and cost estimates. It noted that if all the components proposed were Included, the cost would be about US $10.0 M of which S0% would be foreign cost. The project was designed as a bridging operation as it included studies essential to the preparation of a comprehensive road maintenance project and the completion of betterment works carried out under the Third Highway Project. "The (interim) project would thus combine an engineering credit to prepare the Fourth Highway Project, and supplementary financing to coryiete the works started under the Third Highway Project." 2.07. The issues included i) the project content and amount of financing in the light of the lending program allocation of only US $3.0 H for an engineering credit; ii) the possible participation of the Kr in the project which was interested in arresting the deterioration on a road which it had previously financed; iii) the need to continue to improve the management of the PWD. The Government had recently simplified its procurement procedures and had decided to do periodic maintenance works by contract and limit the activities of the PWD to simple routine and maintenance works. It was considered essential to get critical drainage structures in place by July, 1981, when the rainy season started so as to prevent destruction of the previously completed betterment works (para 2.06). 2.08. At the Decision Meeting held on April 15, 1980, the basic framework of the project was accepted, subject to the following considerations. In view of the great distances between centers of economic activity and the high cost of maintenance, an assessment of the appropriate level of future road maintenance and co-instruction expenditure was needed. It was decided that feasibility and engineering studies should be carried out in two phases so that design would only be done when it was economically justified. One road was eliminated from the project to reduce the cost estimate to US $9.0 H, and discussion centered on how to share the cost of the project between the KF and IDA. The meeting decided that as a condition of negotiations, two  central units would be set up in the PWD, one to manage contract works and the other to carry out routine maintenance by force account. 2.09. Following the Decision Meeting, it was decided to refer to the iLcerim highway project as the Fourth Highway Project. A post appraisal mission in October, 1980 was sent to: i) ascertain the steps the Government had taken to create an effective road organization; ii) discuss the project concept and conditions as outlined in the decision memorandum; and iii) prepare a detailed cost estimate of the project. In February 1981, a mission was sent to Kuwait to discuss with the KF and Government representatives: i) coordination of KF-IDA assistance; ii) detailed components of the proposed project; iii) detailed cost of the project and its financing and iv) an action plan for project processing and implementation. 2.10. The KF suggested that the Arab Fund for Economic and Social Development (AF) also be involved in the highway sector, as it had set up a special fund to assist the development of the seven poorest Arab countries, which included Mauritania. The KF supported IDA's condition of negotiations which called for the Government to establish two independent units in the PWD; the KF asked the AF to do the same. One of the Mauritanian delegates tried throughout the discussion to eliminate all studies and to induce the co-lenders to allocate all the funds to construction and equipment procurement contrary to agreements already reached between IDA and the Government. The KF assured the IDA that both it and the AF woulc. firmly stick to their position to have appropriate studies conducted before carrying out construction. The second Government delegate, representing the Minist-y of Economy and Finance, expressed agreement with this position. The following financing plan was agreed on at the meeting: KF - US $5.1 M, and the AF - US $4.4 M, and IDA - US $3.0 M. The Government was also expected to contribute to the financing. The three co-lenders agreed to coordinate their assistance, including close consultation to take place between them in the drafting of the TOR for each study. The TORs were drafted by the Association; CPS requested substantial changes in the first drafts. 2.11. The Loan Committee suggested the following main changes in the documentss 1) add a covenant limiting construction of new roads; ii) introduce a covenant assuring that all civil works would be carried out by contractors; iii) set a minimum level of annual maintenance expenditures; and iv) review the financing plan so that the Government would contribute at least 5% of the total project cost. The Government was invited to negotiate the project on May 1, 1981, on the condition that the two central units (para 2.08) had been established and their respective chiefs appointed. 2.12. .n June, 1981, the Government indicated to a Bank mission its reservations to two Credit covenants requiring it to: i) transmit its Five- Year Plan to IDA for comment; and ii) consult IDA before carrying out road investment of over US $2.0 M equivalent. Thu Government said these conditions violated its principle of sovereignty. As regards the two central units, the Government indicated that it had prepared a draft decree establishing them in the PWD and that the unit heads had been identified. However, processing was proceeding slowly due to a recent change in the G,overnment, which did not agree entirely with the project concepts accepted by its predecessor. The Bank informed the co-lenders of the situation; the KF e.xpressed concern that its loan agreement was not being adhered to. It  -6- added that it would take up these matters with the Government as its loan had already been signed and declared effective. Representatives of the KF and IDA met in Mauritania early in September, 1981 to discuss the above matters, and again in Washington early in December. 2.13. The files indicate some internal discussion within the Bank regarding the delay in negotiation, but no specific reasons were identified other than the difficulty in bringing the Borrower to the negotiating table. The Projects Department pointed out that since the appraisal took place early in 1980, some of its data was almost two years out of date. 2.14. Finally, in December, 1981, over six months after the invitation to negotiate had been issued, negotiations took place in Washington. The Loan Committee agreed to change the condition of negotiations to Board Presentation, as the reorganization of the METT was being carried out but the decree had not yet been issued by the Government. The Govermnent asked that the draft Credit documents calling for the feasibility and engineering studies to be done under one contract, rather than two as proposed by IDA. This was agreed to by IDA on the understanding that the work would be executed in two consecutive phases. 2.15. A post-negotiation misoion was sent out in February, 1982 to resolve the remaining points needed to present the project to the Board. The mission was given a copy of the decree, dated February 5, 1982, establishing the two central units in the METT, and the METT indicated informally the staff who had been chosen to head the units, both of whom the mission found were qualified. Traffic counts were updated which enabled the staff to complete the President's Report. A short list of consultants was agreed upon. The total cost of the project was estimated at US $14.3 M of which US $11.9 M or 83% was in foreign exchange. 2.16. The project was presented to the Board on April 13, 1982, and the Credit Agreement was signed on May 20, 1982. However, the Credit did not become effective until September 14, 1983, because of delays on the part of the Government in ratifying the Credit documents. This necessitated five postponements by IDA of the deadline for effectiveness. By May, 1983, IDA contemplated allowing the Credit to lapse in view of the seemingly lack of commitment on the part of the Government. IDA was persuaded not to do so by the KF which called for a 'more patient attitude' ln view of 'the difficult situation faced by Mauritania, and the extensive recent changes in METT senior office holders." Project Obiectives and Description 2.:,. The objectives of the proposed Fourth Highway Project were to: 1) assist the Government in formulating a maintenance policy which took into account its financial and institutional limitations; i1) prepare a follow-up project, which would contribute to maintenance of paved and engineered earth roads; and iii) complete and protect betterment works carried out under the Third Highway Project. 2.18. The project included the following elementss  -7- a) road maintenance studies including: definition of the network to be maintained, maintenance operations, methods, and cganization, research of suitable maintenance materials, staf. training, financing, and proposals for broader maintenance and investment priorities in the medium term; b) studies for rehabilitation and reinforcement of the Nouakchott- Rosso (203 km) and Nouakchott-Akjoujt (256 km) paved roads; c) completion of works started under the Third Highway Project including: i) detailed engineering and preparation of bidding documents for the completion of earthworks and construction of the drainage structures and studieb of bridges on a) the Boghe-Kaedi (100 km) and b) Atar-Oued Seguelil (45 km) roads improved under that project; and ii) completion of earth works and construction of the drainage structures themselves and their approaches, excluding bridges; and d) studies for reinforcement of the recently paved Nouakchott-Kiffa- Nema road (1,150 km), and the execution of urgent maintenance works on this road. 2.19. Each co-lendee undertook to finance specific components of the project. IDA financed components were parts (b) and (c) Atar-Oued Seguelil road only. The project was to be completed by December 31, 1984.  - 8 - III. PROJECT IMPLEMENTATION AND COSTS 3.01. Following Credit signature, over a year was taken up with the select {on of consultants for the studies included in the project. The five studies were grouped into three contracts to minimize contracting procedures. All co-lenders had to agree on the short list and the firms selected to do the studies. The METT was slow in preparing the package of letters of invitations to submit proposals and TOR for consultant services for approval. 3.02. The two supervision missions in 1982 and the three missions in 1983 were primarily concerned with expediting the effectiveness of the Credit and the award of the studies. The mission of January 1983, noted that while the project should be very easy to execute, if an acceptable rate of progress and compliance with covenants was ever to be achieved, considerable 'handholding' would be required to assist the limited Borrower's staff. 3.03. Proposals for the IDA financed study were received in May, 1983, and were reported as being evaluated "with unusual thoroughness." The proposed selections were acceptable to IDA and mobilization was expected late in 1983. By September, 1984, the consultants on the IDA financed part had submitted their feasibility report. The mission reported that the consultants, a joint venture of three firms, had on the whole, done a commendable job in unusual circumstances. As expected, the works were only feasible if reduced to the barest minimum. 3.04. In September, 1984, an IDA mission found that consulting work under the parts of the project financed by the co-lenders, had been delayed for over a year by a dispute between the Government and the agencies as to the selection of consultants. Early in 1985, the Association learned that the KF and AF had refused to f'nance the services of the firm selected by the Government l/ 3.05. The mission of June 1985 reported that consultants were expected to be selected for the KF and AF work by mid 1985. It found that the feasibility studies and design work on the IDA financed portion of the work had been completed and bid invitations for the civil work were ready and acceptable. Civil works were expected to cost about 50% over the appraisal estimates. The documents provided for local dry stone masonry con'truction techniques, as well as other alternatives such as concrete and corrugated steel. As maintenance needs of the project roads radically increased since appraisal, the mission recommended that the civil works be supplemented by including a maintenance component for the road for which drainage structures only was included in the project. The METT agreed to this approach. Bid invitations were not issued until December, 1985, about three months later than the date agreed on with the Government by the June mission. 3.06. Upon receipt of the draft bid documents, IDA found that an additional clause had been added restricting firms eligible to bid to such firms or groups having a "siege social" in Mauritania. IDA ruled that in the light of this unacceptable restriction, bids should be returned unopened and a new round of bidding called. The February 1986 mission found that the Government had reissued the call for bids accordingly but they would not be 2 See Attachment 2, para 6.  opened until April, 1986. The mission reported further delays had occurred in engaging consultants for the studies to be financed by the KF and the AF because of a disagreement between the firms and the Government. 3.07. Thus, unfortunately, the important road maintenance study which was to be financed by the KF, was not started until four years after the approval of the KF Credit. It was essential to have this study completed as it was needed as a basis for IDA's next road lending operation in Mauritania. It was urged that contacts be re-established, and a Joint supervision carried out in April, 1986, provided that opportunity. 1/ 3.08. It was suggested at the time the project was handed over to a new division during the recent Bank reorganization, that any savings on construction work should be used to establish a maintenance brigade. This 'would provide an apportunity for testing the will and capacity of the Government to carry out limited maintenance works with tight monitoring of financial resources used." Later, this proposal had to be dropped when it was found that remaining funds were insufficient. 3.09. A co-lenders meeting at the consultant's office in Germany was held in February 1987, to discuss the draft report on road maintenance with the consultants and the Government. It was agreed that the consultants report was acceptable at the conclusion of Phase 1, and the consultant was instructed to proceed with Phase 2 (the final phase). This report would pro7ide a basis for IDA's next leading operation. The Government declared that Its road maintenance policy was to i) reduce reliance of its own forces and to rapidly increase the use of contractors; and ii) substantially increase the allocation of funds to road maintenance and to give priority to its road expenditure program. This policy change on the part of the Government was of particular significance for executing future road works. 3.10. Ais it now appeared that about SDR 300,000 would be left under the IDA Credit, it was agreed that this sum should be used for a pilot exercise in road maintenance by contract. This would replace the previous proposal to establish a pilot force account brigade (para 3.08). 3.11. The supervision mission of March, 1987, found that the final report on road maintenance had been submitted but that it had some unsatisfactory aspects, notably in the cost estimates and benefit analysis. The contractor for civil works had been instructed to start work but his contract would not be completed until February, 1988, thus necessitating a further extension of the cloaing date. A contract for supervision of the civil works had also been signed. 3.12. In October, 1987, the AF suggested that as the study of highway maintenance had been completed, a meeting of the co-lenders and the Government be held to discuss needs of highway maintenance and translate them into a program composed of several well defined projects. The Bank concurred with the above proposal. 3.13. The December 1987 mission found that progress of the civil works and supervision by the consultant was satisfactory. The works were expected I/See Attachment 2, para 7.  - 10 - to be completed iu May, 1988. The Closing Date had been extended earlier to June 30, 1988. The final disbursement under the credit took place on January 4, 1989, and approximately US$62,000 remaining in the credit account were cancelled. The total cost of the project was US$14.2 million. 3.14 The IDA financed part of the project proceeded well after the initial delay in selecting consultants. The remainder of the project was delayed for several years because of the slow appointment of consultants financed by the KF and AF. The Closing Date had to be extended three times; however, disbursement fell far behind the appraisal estimate during the early years but by the end of FY 88 they had caught up. IV. INSTITUTIONAL PERFORMANCE 4.01. The Government was extremely slow to take the agreed on steps to prepare for negotiaticns and ratify the project documents after they had been signed. The long delay in effectiveness was mainly responsible for the slow start up of project execution. The METT technical performance was reasonably good given the scarcity of experienced personnel i.. the PWD administration. It was unfortunate that it took the Borrower, the KF &dt AF so long to reach agreement in the selection of consultants financed by these two co-lenders. This resulted in several years' delay '-' completing the maintenance study, which was essential to the preparatio.i of follow-up projects by all co- lenders. 4.02. The willingness of the Borrower to institute the organizational reforms in the NWD administration and to shift the execution of periodic maintenance from force account to contract is commendable, and hopefully will result in better performance in future. This change in policy reflected the emerging importance of personnel stability in the PWD. V. ECONOMIC RE-EVALUATION 5.01. No economic rate of return was estimated for this project as a staff appraisal report was not prepared. 5.02. The project included a substantial studies component to help improve the overall planning and organization of highway maintenance in Mauritania. I.ese studies were essential to identifying the appropriate steps for organizing road maintenance, and establishing the priority and scope of further improvements. The studies were successfully carried out and provided the basis for further lending for the road sector. 5.03. The project provided for completion of earth works and drainage structures on the Boghe-Koede and Atar-Oued-Seguelil roads which were begun under the Third Highway Project. It assured that these highways remained usable and that the benefits envisioned at appraisal were fully realized. The investment ensured that the roads would last their full economic life. In an improvement over past practice, construction was not carried out until after the engineering work had been completed.  - 11 - VI. THE ROLE OF THE ASSOCIATION 6.01. The long delay after appraisal in negotiating the project would indicate some inexperience on the part of the staff involved. The delay almost necessitated a second appraisal, but fortunately the updating Information needed was obtained by a post-negotiation mission. 6.02. After the initial delay in selecting consultants, the IDA part of the project progressed reasonably well. Supervision, although averaging only about one visit per year between 1984-88, seemed adequate for the pace of the work. 6.03. Despite the agreement reached in 1981 to coordinate these activities (para. 2.10), liaison among the co-lenders did not yield the desired results because supervision of the studies component could not be carried out jointly since the award of contract for the IDA financed part preceded those two years. The maintenance study, which was one of the principal reasons for IDA's participation in the Fourth Highway Project in the first place w.a the most important part of the project as it provided the basis for follow-up lending operations of all three co-lenders. 6.04. This project provides another example of the mistake in agreeing to parallel financing of key project components. If the co-lenders had pooled their funds, and the project had been managed by the Association, or jointly by the co-lenders, there is every reason to believe that the vital maintenance study part of the project would have been completed years earlier. 6.05. The expectation that drainage structures could be built by July, 1981 (para 2.07), was overly optimistic and it was not until 1988 that the last of the work was completed. VII. CONCLUSIONS AND RECOMMENDATIONS 7.01. The project suffered delays at various stages but it was finally completed, although several years later than origiually scheduled. It was designed as a bridging operation, and it was successful in that it provides a basis for follow-up road projects financed by the Association and other lenders. 7.02. With the exception of start-up delays, the Borrower's performance was satisfactory. The Government took a number of important steps to improve its management of road maintenance operations which should benefit its future performance in this sector. 7.03. IDA performance was adequate; supervision was good, but greater effort should have been made to expedite negotiations. The co-lenders did not cot-dinate their operations with the IDA with unfortunate results for the project.l/ However, see Attachment! with comments from KT on this PCR.  - 12 - 7.04. The project provides another example of the mistake in agreeing to parallel financing of key project elements. 7.05. The project provides a sound basis of a follow-up road project, or a road component in an infrastructure project which is under consideration. 7.06. Lessons learned include that performance will be enhanced when: i) the Borrower is willing to institute organizational reforms and to shift the execution of periodic maintenance Lrom departmental forces to contract; ii) engineering work is completed before construction is started; and iii) co- lenders financing is pooled rather than restricted to specific project components.  - 13 - Table 1 ISLAMIC REPUBLIC OF MAURITANIA FOURTH HIGHWAY PROJECT - CREDIT 1231-MAU PROJECT COMPLETION REPORT Estimated and Actual Disbursements, by Project Component (SDR million) 1. Studies .60 Civil Works .85 Atar-Oued Seguelil (45 km) 2. Supervision of Construction *14 3. Construction 2.55 2.61 Total 3.40 3.35 Notes SDR = Special Drawing Rights -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  - 14 - Attaehment 1 CONIOENTS FROM KUWAIT FUND FOR ARAB ECONOMIC DEVELOPMENT ZCZC OERP0304 JUS0385 OEDDI .TCP TF * OEDDI * JJS0385 ZVU365 IN 22/08:32 OUT 22/09:30 440098 220832 2575644 KFAED 22613 KT KFAED 22613 KT COMPUTER MESSAGE - DO NOT INTERRUPT REF : KF/GEN/1703 DATE: AUG 22, 1989 FROM : KUWAIT FUND FOR ARAB ECONOMIC DEVELOPMENT7 KUUAIT (REPLY TO 22025 ALSUNDUK OR 22613 KFAED KT) TO : MR. GRAHAM DONALDSON, CHIEF, AGRICULTURE, INFRASTRUCTURE AND HUMAN RESOURCES DIVISION, OPERATIONS EVALUATION DEPARTMENT, THE UORLD BANK, UASHINGTON D.C., U.S.A. la SUB : MAURITANIA - HIGHUAY IV (CREDIT 1231-MAU) w3 PROJECT COMPLETION REPORT UE THANK YOU FOR YOUR LETTEC. DATED 14 JULY, 1989 UITH RESPECT TO THE SUBJECT PROJECT ANII FOR THE OPPORTUNITY TO SEE THE BANKS COMPLETION REPORT. WE HAVE NOTED THE VARIOUS VIEWS EXPRESSED REGARDING COORDINATION UITH THE KUWAIT FUND AND FEEL THAT THE BANK HAS NOT BE'N FULLY INFORMED AS TO THE TRUE POSITIONS TAKEN BY THE FUND STOP. FURTHERMORE7 UE ARE OF THE OPINION THAT THE MAIN PROBLEM HAS BEEN AthD CONTINUES TO BE LACK OF SUFFICIENT EXPERIENCE TO CARRY OUT PROCUREMENT EFFICIENTLY IN ACCORDANCE UITH NORMAL PROCEDURES, BE IT FOR CONSULTANCY SERVICES, EQUIPMENT OR CIVIL UORKS. UE HOPE THAT THE ABOVE COMMENTS ARE USEFUL FOR YOUR PURPOSE. BEST REGARDS HISHAM AL-UOQAYAN DIRECTOR OF OPERATIONS KFAED 22613 K: KFAED 22613 KT  - 15 _ Attachment 2 COMMS FROM ARAB FUND FOR ECONOMIC & SOCIAL DEVELOPMENT Iage 1 of 4 ARAB FUND FOR ECONOMIC AND SOCIAL DEVELOPMENT IEL ibS1u v 0 e :, ,AFA' '15i A.twAir CARLE IN.MAAI KUWAIT T1!L9X I AR3 22153 KT KUWAli , J L - Jt4 ,z1 ' l) FACSIMILE TRANSMISSION URGENT T O : Mr. Graham Donaldson f Chief, AgricUlturc-, Infrastritl.-ure d Human Rerouxr .:. Divi-ion Operations Evaluatia,n Department W)rld