Sri Lanka - Second Roads Project

Docuent of The World Bank FOR OMCIAL USE ONLY Report No. 13276 PROJECT COMPLETION REPORT SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) JUNE 30, 1994 Infrastructure and Energy Operations Division 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.  Currencv Equivalents Currencv Unit: Sri Lanka Rupee iRs) Si = Rs 26.5 (at appraisal) Si = Rs 44.0 (at completion) MEASUREMENT EQUIVALENTS Metric Svstem British/US Svstem I meter (m) - 3.281 feet I kilometer (kim) = 0.621 mile I ton 2 '.208 pounds I ton-km = 0.621 ton-mile I passenger-km (pass-km) = 0.621 passenger-mile ACRONYMS AND ABBREVIATIONS AC - Asphaltic Concrete ADT - Average Daily Traffic DBST - Double Bituminous Surface Treatment ERR - Economic Rate of Return GOSL - Government of Sri Lanka ICB - International Competitive Bidding IRR - Internal Rate of Return LCB - Local Competitive Bidding MTH - Ministry of Transport and Highways npv - net present value OCC - Opportunity Cost of Capital PCR - Project Completion Report PMMU - Project Management and Monitoring Unit RDA - Road Development Authority TCC - Transport Coordinating Committee TFA - Technical and Financial Audit VOC - Vehicle Operating Cost vpd - vehicles per day SRI LANKA FISCAL YEAR January I - December 31  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation June 30, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Sri Lanka Second Roads Project (Loan 2517-CE) Attached is the "Project Completion Report on Sri Lanka - Second Roads Project (Loan 2517-CE)" prepared by the Energy and Infrastructure Operations Division, Country Department 3, of the South Asia Regional Office, with the Borrower providing Part II. The principal objective of the project was to improve the road network. In addition, the institutional objectives sought to strengthen road maintenance and planning. Bank performance in preparation, appraisal and supervision left a great deal to be desired. Less than five staff weeks were spent and this was insufficient to adequately identify, inspect, review the designs and estimate the costs of the project components. For example, the foundations for one major bridge were not inspected below the water line and during construction it was discovered that they were inadequate to carry the designed loads and had to be replaced resulting in a cost overrun of 200% or $9.5 million. The 1987 Bank Reorganization as well as the deteriorating security situation in Sri Lanka halted the Bank's supervision for a year during 1987/88. Moreover, the capabilities of the Executing Agency were overestimated at appraisal and the performance of consultants - who were to assist the Executing Agency - was disappointing, partly because of inadequate Terms of Reference. Serious cost increases forced a considerable cutback in the civil works program: only about half of the road and two-thirds of the bridge components were implemented and, purchase of maintenance equipment and the training component were cut back. The Government's financial contribution to the project more than doubled to over $40 million. However, by concentrating on the highest priority elements, implementation led to a good rate of return (33%) . Some capacity building also resulted from the experience. All loan covenants were fully complied with. Overall the project outcome is rated as marginally satisfactory, its sustainability as likely, and its institution development impact as modest. The PCR's quality is satisfactory. No audit is being planned. Robert Picciotto by H. Eberhard K6pp Attachment This document has a restricted distribution and may be used by recipients only in the performance of Itheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.   FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) Table of Contents i Preface .................................................................... Evaluation Summary .................................................ii Objectives .i Preparation, Appraisal and Implementation Experience . ii Project Results ............................................... iii Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv Findings and Lessons Learned ... iv P a rtI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Project Identity ............................................... I Background ................................................. 1 Project Objectives and Description ................................... 2 Project Design, Preparation and Appraisal .............................. 3 Implementation. 4 Project Results. 6 Project Sustainability. 7 Bank Performance. 7 Borrower Performance. 8 Project Relationship. 9 Consulting Services ................................ ... 9 Project Documentation and Data .10 Part II ..11 Introduction .11 Bank's Performance .12 Borrower's Performance ......................................... 12 Lessons Learnt ............................................... 14 T|his 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.  Table of Contents (Con't) Part III ... .... . 16 1. Related World Bank Loans and Credits .16 2. Project Timetable . .17 3. Loan Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 4. Project Implementation ..19 5. Project Costs ..20 6. Project Financing ..21 7. Allocation of Loan Proceeds . .21 8. Direct Benefits of Project ..22 9. Project Studies ..25 10. Compliance With Loan Covenants ..26 11. Staff Inputs By Stage of Project ..27 12. Mission Data By Project Stages ..28 Appendix 1. Economic Re-evaluation .29 Map No. 18532R  PROJECT COMPLETION REPORT DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) Fretace This is the Project Completion Report for the Second Roads Project in Sri Lanka. for which Loan 2517-CE in the amount of $24.0 million was approved on April 16. 1985. The Loan was closed on June 30, 1992 which was six months ahead of schedule. The entire loan amount was disbursed and the final payment was made on September 14, 1990. The PCR was prepared jointly bv the Energy and Infrastructure Operations Division. South Asia Country Department III (Preface. Evaluation Summary and Parts I and III) and the Borrower (Part 11) and is based. inter alia, on the Staff Appraisal Report: the Loan Agreement: supervision reports: the Borrower's own records: correspondence between the Bank and the Borrower: and internal Bank memoranda.   - ii - PROJECT COMPLETION REPORT DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) Evaluation Summarv ')biectives The objectives of the Second Roads Project were to lower vehicle operating costs on Sri Lanka's deteriorated road network through a targeted investment program for priority road sections and selected bridges. The loan also envisioned to strengthen the institutions concerned with transport infrastructure in the areas of transport planning and coordination and road maintenance (para. 6). The project's principal components included improving periodic maintenance of the trunk road network and bridges (about 10,400 krns and several hundred structures), and the rehabilitation and/or widening of about 570 kilometers of roads and 28 bridges. It also provided for workshop and laboratorv equipment, training in bitumen emulsion technology, equipment fleet management and technical assistance to strengthen contract management and administration (para. 7). Preparation. A2pvraisal and Implementation Experience The Second Roads Project was appraised in May 1983 and became effective in July 1985. The Loan (2717-CE) was for $24.0 million, all of which was disbursed (Part III, Table 3). Overall, the project suffered from three major weaknesses: (a) overestimating the capability of the implementing agency to execute large contracts; (b) underestimating the cost of some physical works, and (c) not using detailed designs for every contract. Regarding the implementing agency, the Road Development Authority (RDA) was a relatively young and inexperienced organization and the roles and duties assigned to the two expatriate engineering firms which were to assist RDA implement the project were poorly planned (para. 11). As a result. RDA quickly developed project management difficulties during implementation, supervision costs were almost 300 percent of the amount calculated during appraisal and technical assistance was almost 150 percent over original estimates (Part III. Table 8). Concerning the physical works, road contracts ended up costing about 50 percent more than that forecast at appraisal--despite eliminating from the project about one half of the kilometers to be rehabilitated. These cost overruns were largely caused by the use of tender documents on one road project that included only indicative, rather than detailed, drawings and that allowed RDA to bring about design changes during implementation (paras. 17-19). In addition. it appears that Bank examination of these tender documents was inadequate and that this also contributed to implementation problems and cost increases. Bridge contracts ended up costing about 120 percent more than the appraisal estimate even though eight of the planned 28 structures were dropped from the project (two bridges were also added during implementation). One bridge in particular (Kalutaral was responsible for most of the bridge cost overruns because of inadequate condition surveys during the preliminary and final design phases (para. 15).  - iii - Compounding implementation difficulties were (a) the Bank's 1987 re-organization which resulted in an interruption of the normal supervision schedule. and (b) an ensuing deterioration in the countrv's security situation which also temporarily halted any travel to Sri Lanka bv Bank staff. By the time the Bank's re-organization was completed and the country's security situation improved sufficiently to allow supervision missions to resume, implementation problems had developed and the project was already significantly over budget. At this stage, both the Borrower and Bank moved quickly to reduce its scope and redirect resources to complete those components that remained. As a result, by early 1989 the project was generally back on track with more frequent Bank supervision and increased attention from the Borrower (para. 22). The project subsequently closed on June 30, 1992, which was six months ahead of schedule. Project Results As a result of the problems described above, the project did not fully achieve its objectives. Only about half of the planned 300 km of roads were rehabilitated, only 20 out of 28 bridges were re- constructed or widened (two were also added) and only Rs. 12.1 million out of an estimated Rs. 28.5 million was spent on equipment (see Part III, Table 8). Even with a reduced scope. project costs were still approximately 70 percent over that budgeted at appraisal (Rs. 2.00 billion and Rs. 1.18 billion, respectively) (Part III, Table 8). Technical assistance to strengthen RDA capabilities in the area of planned and routine maintenance did result in the establishment of District Offices to initiate and oversee these activities, but was only marginally successful regarding their implementation (para. 27). By concentrating its revised scope of work on some of the country's busiest roads and bridges, and despite numerous and serious problems during implementation, the project did succeed to maximize benefits in terms of reduced vehicle operating costs. As a result, the overall economic rate of return (ERR) was still about 33 percent, versus an overall ERR of 82 percent estimated at appraisal) (para. 24 and Appendix 1. The project also served to tum the Ministry of Transportation and Highway's emphasis from new construction to rehabilitation and maintenance and to building up its implementation capacity. RDA is now more experienced in undertaking rehabilitation and maintenance work and has significantly improved its performance in the areas of project and contract management. The project also increased domestic contracting capacity through the provision of numerous civil works to be completed using local competitive bidding and force account. Hence, the ongoing Third Roads Project (Cr. 2183-CE) benefits from increased participation in rehabilitation contracts at costs lower than would be possible using international firms. The sector also benefited from the Transport Sector Planning Study financed by the project and intended to strengthen transport institutions at the inter-ministerial level (para. 29). This was the first study performed in the country that covered all transportation modes and it has become an important policy paper for donors and the Government, as well being a useful reference document for transport statistics.  - iv - Sustainability All of the project's contracts remaining after the reduction in scope were finished to satisfactory engineering and construction standards. Therefore. these components' net benefits should last throughout their expected economic lives (paras. 30 and 31). Most of the project's important management lessons were learned through experience, but their sustainability appears to be strong as is evidenced b',' RDA's enhanced and continuing awareness in the Third Roads Project concerning: contract design; the differences between, and implications of. rehabilitation versus upgrading; contract disputes and administration; and the need for adequate training of its senior staff. Findings and Lessons Learned The lessons learned from the project include (paras. 36, 37, 39 and 41): It is important during appraisal to take the time necessary to ensure that institutional arrangements are adequate to implement the project; Accurate estimates of civil works costs require thorough inspections and condition surveys during identification and appraisal--possibly through the use of a Project Preparation Facility (or similar instrument); Consultant engineers and economists preparing project designs and costs cannot be relied upon to deliver appropriate and accurate products without a thorough review by the Bank and Borrower; When the implementing agency is inexperienced in dealing with international contractors and large contracts, the supervisory role for the Bank substantially increases; The use of standardized bidding documents should be mandated to limit bidding problems and contractor claims; and Technology transfer works best when counterpart staff are expressly assigned to the project from its inception and continuity is assured.   - 1 - PROJECT COMPLETION REPORT DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) Part I Proiect Identitv * Project Name ........... Second Roads Project * Loan Number ........... 2517-CE * RVP Unit ........... South Asia * Countrv .Democratic Socialist Republic of Sri Lanka i Sector ........... Transport i Subsector ........... Highways Background 1. Sri Lanka has a relatively extensive and well-developed road network which evolved during the last century to service the island's plantations. Almost every part of the country is accessible by road and the total system amounts to about 97,400 km, including some 30,750 km of paved roads. The national trunk road network (Class A and B roads), under responsibility of the Road Deveiopment Authority (RDA), consists of 10,440 km of paved roads, and amounts to approximately 10 percent of the total network. Responsibility for the other roads rests with the Provincial Councils (16 percent), local governments (53 percent) and specialized agencies (21 percent). Road transport is the countrv's major transportation mode. accounts for more than 82 percent of total freight movements and carries about 85 percent of total passengers. Except for a small percentage of traffic carried by sea, the balance of Sri Lanka's transportation needs is assumed by the railways. 2. Development of an efficient transport sector in Sri Lanka has long been an objective of Government of Sri Lanka (GOSL) policy and one which the Bank has encouraged. The Government's overall objectives for the sector are to: (a) develop an integrated approach to development of the transport system; (b) improve operation and management of major transport modes: (c) accelerate completion of ongoing projects and programs; and (d) give priority only to those programs using external financing which would help improve overall efficiency in the national networks. From 1981 to 1989 which corresponds to the implementation period of the Second Roads Project, the Government invested Rs 20.7 billion in the transport sector, of which Rs 6.0 billion (29 percent) was allocated to highwavs. However, in recent years the GOSL's emphasis on improving road transport and its associated maintenance has increased. For example, and according to the October 1992 Public Investment Program. the Government's 1992-96 highwav sector budget is  approximately Rs 16.8 billion, which represents 36 percent of the total transport budget--or seven percent more than was allocated on average during the 1980s. 3. The World Bank and IDA have been actively involved in the Sri Lanka roads sector for almost 15 years and its projects emphasized maintenance, rehabilitation and technical assistance. The first IDA credit for a highway project was approved by the Board in 1968, but it was subsequently cancelled as the Government wanted to change the project approach and scope. The next operation was in 1979, when IDA approved the first Road Maintenance Project (CR900-CE) (PCR No. 8000, August 1989). In March 1980, IDA approved CR994-CE for the Road Passenger Transport Project (PCR No. 8011, August 1989). The Second Roads Project was effective in July 1985, the Third Roads Project (CR2183-CE) in February 1991. The Colombo Urban Transport Project (Cr. 2495-CE) in August 1993 and the National Roads Project (8SRIPA1 18) is now under preparation. 4. IDA credits in other sectors have also contained some road components. The Emergency Reconstruction and Rehabilitation Project (CR1883-CE) financed limited road reconstruction in selected areas in the north and northeast which had been damaged during the country's civil unrest. Also. under the Economic Restructuring Project (CR2128-CE), Government-owned bus operations are in the process of being privatized to make them commercially viable. Bus fares also have been deregulated and the National Transport Commission established with powers to enforce safety standards to control operations of new or additional services. 5. Although projects previous to the Second Roads Project produced mixed results, in retrospect it is clear that they helped bring about fundamental policy and institutional changes and encouraged the Governnent to formulate new solutions to transport problems. For example, RDA's operations are better focused on maintenance and rehabilitation and away from new construction. Also as the result of previous Bank projects, local contractors and consultants have been encouraged to enter the road sector and it is expected that they will capitalize on this experience by competing for more contracts. In this way, the Bank has helped to build the country's indigenous construction capacity and lower RDA's overall outlays per kilometer for road and bridge maintenance and rehabilitation. Proiect Obiectives and Description 6. The Second Roads Project was designed to continue RDA's emphasis on planned maintenance and rehabilitation as well as build technical and administrative capabilities in the Ministry of Transport and Highways (MTH). Thus, the objectives of this project were to: a. to maximize economic return to the road sector by rehabilitating, improving drainage and resealing surfaces to extend the economic life of the road network, and rehabilitating and widening selected bridges; b. delaying where possible the need for road reconstruction through the establishment of, and an increase in the capability for, planned and routine maintenance programs; and  c. strengthen the institutions concerned with transport infrastructure in the following key areas: i. transport coordination and planning at an inter-ministerial level: and ii. road maintenance planning, supervision and execution of the maintenance program. 7. The Second Roads Project included the following components: a. a programn of rehabilitation consisting of bituminous overlay on about 300 km of roads, and surface resealing on about 270 km of roads; b. strengthening or rehabilitation of 28 bridges; c. provision of workshop equipment and tools and laboratory equipment to RDA; d. equipment and training for MTH's highway planning and highway maintenance departments; and e. technical assistance to the Inter-Ministerial Committee for Coordination and Planning of Transport and its technical secretariat as well as to RDA for contract management and implementation. Proiect Design. Preparation and Appraisal 8. By selective improvement of the highway system, the Second Roads Project was designed to continue the progress made by the Road Passenger Transport Project in reducing the costs and delays associated with inernal transport. Taking some lessons from this first project, the Second Roads Project also was designed to strengthen the semi-autonomous governmental units of the MTH (RDA and Technical and Financial Audit (TFA)) to speed implementation, achieve higher levels of domestic expertise in this sector and assure better quality control and accountability of construction works. 9. The project was innovative in its design by seeking to further develop the capacity of indigenous road construction and consulting firmns. In this regard. resealing and overlay equipment purchased under First Roads Project was made available for hire (at a rate schedule agreed to in consultation with the Bank) to local firms wishing to bid on Second Roads Project contracts. It was envisioned that this provision would allow local firms to become familiar with the operation of this type of equipment and eventually purchase their own machines for use on MTH contracts. 10. Because the Second Roads Project was to continue the First Roads Project's reduction in the backlog of periodic maintenance that had grown during the 10 years the Bank was not active in the sector (1969 to 1979), another innovative aspect of the project was the establishment of pilot RDA district offices to improve routine and periodic maintenance operations. This included the provision of limited, but essential, equipment for patching and compaction. as well as supporting force account works supervised by these offices to avoid the long delays sometimes experienced under local and international competitive bidding.  - 4 - 11. One shortcoming of project design concerns the estimation of RDA's ability to implement the project and the related roles and terms of reference (TOR) for the expatriate engineers. Recognizing that RDA was still a relatively young organization (it was formed in 1981) and not yet experienced with large construction contracts, the project had two expatriate consulting firms: one as the engineer's representative on site (supervising engineer) and the other as the engineer's advisor and to give technical assistance to RDA on contract management and implementation (advising engineer); and the . RDA was the engineer. However, because the TORs were too restrictive for each firm, this arrangement was not satisfactory and RDA did not receive as much benefit from the consulting engineers as had been envisioned. 12. The supervising engineer was to supervise the day-to-day construction and administer the instructions of the engineer for each contract. In this role, it acted only as a conduit for the engineer's instructions, i.e., there was no authority for it to "manage" the contract. 13. The advising engineer was employed to give technical assistance to RDA for highway engineering and construction management. In this role, it should have been well situated to find many of the problems with the designs and tender documents before going to bid, as well as provide guidance to RDA in order to help limit problems when they developed (para. 19). However, given the results at project end, it is clear that this firm did not perform its functions well. 14. It appears that the project setup for the role of engineer and the two engineering consulting firms could have been better designed. The supervising engineer probably needed more authority to manage the contracts on site and the advising engineer needed better TORs which clearly set out its responsibilities for the choice of works to be undertaken, the designs chosen for specific works and tender document quality control. 15. Bank records show that only a total of 4.5 staff weeks were used from project identification through appraisal (Section III, Table 11) and this short time was not sufficient to adequately identify, inspect, review the designs and cost the project's components. For example, the foundations for one major bridge (Kalutara) were not inspected below the water line, and during construction it was discovered that they were inadequate to carry the designed loads and, therefore, had to be replaced. Mostly as a result of this oversight, the contract suffered more than a 200 percent cost overrun (Section III, Table 8). Implementation 16. After an initial good start with the award of two contracts within three months of effectiveness (July 1985), the project gradually began to suffer increasing difficulties and, by late 1988, was experiencing substantial cost overruns and delays. Overall, implementation suffered from: poor project design regarding the role for the expatriate consulting engineers; inadequate physical works inspections during appraisal; insufficient review of designs and tender documents by the engineers, RDA and the Bank; and not enough Bank supervision missions resulting from its 1987 re-organization and civil disturbances. 17. Concerning the road components, many of the problems that developed during implementation can be traced to one contract (Colombo-Kandy road) where engineering specifications were based on definitions of a limited number of work types (e.g., replace base, rebuild shoulder, etc.) and not detailed drawings. Bids were then invited on indicative quotes for the different work types supported  bv only line drawings, with the extent of the actual work to be agreed on site and within an overall budget envelope. The adoption of this procedure may have been the result of the drawings and tender documents being prepared in only three months. 18. During much of the time that road works were starting to experience difficulty (from February 1987 to February 1988), the Bank was unable to field any missions to supervise the work in progress (because of its re-organization and then civil unrest inside Sri Lanka). As a result, RDA was left more or less on its own (see following paragraph) and the problems with major cost overruns started. For example, on certain sections of the Colombo-Kandy road. and because of a lack of detailed designs and drawings, the contractor and RDA agreed on construction that went far beyond the appraisal intention of "rehabilitation" and instead amounted to upgrading without consideration for cost implications, land acquisition problems, time delays and the potential for contractor claims. 19. During the time of the Bank's inability to send missions to Sri Lanka, the advising engineer should have assumed much of the responsibility for making sure that the work undertaken agreed with the project's goal of rehabilitation and stayed within budget. Unfortunately, this firm exercised little control in this regard, and road work cost overruns and problems sharply escalated during that year. It also appears that the Bank and advising engineer did not adequately review all the tender documents for consistency which likely led to further implementation problems. 20. As for bridge works, and except for the problems discussed above for the Kalutara Bridge (para. 15), they were completed almost within budget (Rs. 79.5 million at appraisal versus Rs. 80.9 at completion) and two additional structures were added during implementation (Section III, Table 8). 21. Some responsibility for the cost overruns and implementation problems can also be attributed to civil disturbances. Many of the project's contracts were located in areas which eventually became dangerous and had either to be abandoned (especially bridges) or delayed with subsequent cost increases (see map). 22. On a more positive note, once the problems in implementation became evident, both the Borrower and Bank moved quickly to better manage and supervise the project and redirect resources to successfully and complete those components that remained. For example, the Bank made frequent supervision missions after February 1988, and included more engineers as mission members than would normally be the case for this type of loan (see Part III, Table 10). RDA also acted promptly to strengthen management and project controls through the establishment of a Project Management and Monitoring Unit (PMMU) that employed additional and better qualified managers and cost accountants than had previously existed in the agency. It also began to insist that contractors adhere to the scope of project works and contract provisions and devoted more time to resolving contractors' claims and concerns. As a result, by early 1989, costs were much better controlled, the largest contractor claims were resolved, the works were progressing much faster and substantially all of the project cost overruns had already taken place. By early 1991, and in spite of the sometimes disruptive deterioration in the security situation, almost all the components remaining in the project's reduced scope were successfully completed (some major works even finished early) and the loan closed six months ahead of the date projected at appraisal.  6- Proiect Results 23. Overall, project results were significantly below those envisioned at appraisal. By the time of its completion in June 1992. only about half of the planned 300 km of roads had been improved, only 20 out of an anticipated 28 bridges were rehabilitated (two were also added) and only Rs. 12.1 million out of an estimated Rs. 28.5 million was spent on equipment. Despite the reductions in project scope, the total cost of the completed components was still Rs. 2.00 billion, compared with an appraisal estimate of Rs. 1.18 billion (see Part III, Table 8). 24. Yet, by concentrating the road and bridge work that could be completed on the nation's busiest highways, benefits were maximized in terms of reduced vehicle operating costs. For example, and despite an escalation in costs and lower benefits, an economic re-evaluation calculates the overall ERR at about 33 percent for those contracts that remained in the reduced project scope (versus an overall ERR of 82 percent estimated at appraisal). In addition, and although not included in either ERR calculation, significant travel time savings were achieved on every road section addressed during the project (e.g., RDA states that non-peak travel time from Colombo to Kandy, which is 116 kilometers, was reduced to from at least 3.5 to a maximum of 2.5 hours). 25. Another important achievement was the project's positive effect on the local contracting industry. Before the project started, there was virtually no indigenous capability (including in RDA) to undertake more than the most ingenuous road and bridge work. However, as all but one of the project's 22 bridge contracts were completed using either local competitive bidding (10) or force account (11), the loan provided the means for a substantial improvement in the country's capacity to undertake more sophisticated construction. These benefits are already being realized in the Third Roads Project where there is an increased reliance on local contractors. 26. The project also achieved its objective of turning MTH's emphasis from new construction to rehabilitation and maintenance and to building up its implementation capacity. Thus, RDA today has a clear understanding about the cost and contract ramifications of moving center lines, insisting on uniform carriage widths and not adapting as necessary to existing site topography. Also, and as a result of lessons learned, RDA has begun developing in-house institutional and technical capability to: execute large international competitive bidding contracts (including how to best cast the role of expatriate engineering firms); prepare accurate and consistent tender documents; and implement contracts in such a way as to limit contractor opportunities for un-substantiated claims. 27. Improved periodic maintenance for the country's trunk road network was addressed through the establishment of RDA District Offices. However, given the constraints caused by the road and bridge civil works cost overruns, the initial impact of these offices was somewhat diminished because it was not possible to purchase any of the equipment intended for periodic maintenance. 28. Regarding equipment and training to increase MTH's highway planning capacity, some progress was made with the establishment and staffing of a traffic planning department. However, most of the envisioned equipment and training could not be provided because of cost overruns in the civil works.  29. Finally, the sector also benefited from the Transport Sector Planning Study financed by the project. This was the first study performed in the country that covered all transportation modes and it has become an important policy paper for lenders, donors and the GOSL. Because it contains in one volume material that formerly had to be gathered from different government departments. it is also proving to be a useful reference document for transport statistics. Project Sustamability 30. All of the completed project components are likely to sustain their net benefits over their respective estimated economic lives. While some factors may later appear that would affect this outcome (e.g., faulty workmanship that is not immediately apparent, natural disasters, or a resurgence of civil unrest), there do not appear to be technical problems with any of the civil works. 31. Risks to this assessment depend on RDA's ability to undertake periodic surveys and maintenance work to ensure that small and easily manageable problems do not become large ones which would exceed its financial and technical capacity. To address this concern. RDA and IDA are designing in the proposed National Roads Project a road and bridge monitoring component appropriate to the needs and abilities of RDA's staff. It is envisioned that this system will, for the first time, allow RDA to design a periodic and preventative maintenance program and, thereby, ensure that the net benefits achieved during the Second and Third Roads Projects are continued for as long as possible. 32. The sustainability of lessons learned in technical assistance areas are also likely to be maintained. For example, RDA has institutionalized its PMMU approach to contract administration and has shown, in the ongoing Third Roads Project, that it can achieve meaningful technology transfer through this arrangement. It has also been able to improve and enlarge the accounting and tracking systems established as part of the Second Roads Project. The most serious risks to the project's instuiutional gains are personnel turnover, but RDA has already made one successful transition at the Director level and it continues placing more emphasis on training and involvement for its less senior managers. Bank Performance 33. The lack of adequate time spent by the Bank in preparation and supervision is at least partly to blame for the significant cost overruns experienced during implementation. Also, the Bank should not have allowed the use of indicative and typical (versus detailed) drawings, and should have taken more steps to insure that tender documents were adequate and consistent. It also assumed too much about the feasibility of the advising engineer to assist RDA with contract implementation without more detailed TORs and/or better supervision. The Bank should have exercised more control over the design changes that occurred during implementation and, when costs rose rapidly, demanded the project be re-structured or re-appraised. Another Bank shortcoming in this project was permitting a long break in supervision missions while the 1987 re-organization was underway. 34. Against these weaknesses, and once it became clear that the project had serious difficulties, the Bank was both quick and appropriate in its response. Its first action (in June 1988) was to send a team composed of two senior highway engineers and one transport specialist on a fact finding mission. Their recommendations (to re-orient the project towards rehabilitating the maximum  - 8- possible number of road sections and bridees without exceeding the loan's monetary limits and to correct to the extent possible the technical problems already encountered) kept the project's overall performance from deteriorating any further. 35. Further, and after the Bank's June 1988 mission, the Borrower also made significant headway in controlling contract costs. This was accomplished mainly by following the Bank's suggestion to insist that variation orders not be routinely processed and that the cost of all such orders be analyzed by RDA and reviewed by the Bank before approval. 36. The Bank also recognized many of the institutional weaknesses that these problems had brought to the forefront, and it moved to correct them where possible and to design components in the Third Roads Project to further build up RDA's capabilities. For example, a Project Preparation Facility was used to finance detailed engineering studies, and the project includes components for counterpart construction management training and three relevant studies. In addition, this latest project enlarged the PMMU to strengthen RDA's capacity to administer large contracts and also it uses IDA's standard bidding documents. 37. Given these observations, the lessons learned for the Bank are the following: a. the need to develop and maintain a tracking system to monitor step-by-step progress made on each contract, including the setting of deadlines for critical tasks, b. in order to facilitate a clear understanding between parties about project objectives, a comprehensive cost monitoring system, agreed to by both Bank and Borrower, should be in place before contracts are started. An important function of this system would be the routine calculation of the effect of work variation orders on the overall contract price; c. the use of a Project Preparation Facility (or other similar instrument) to provide more detailed and better engineering drawings and specifications. This would help the Bank and Borrower to agree on the critical project components and, therefore, where both parties will put the greatest supervision effort; and d. the need to use IDA's standard bidding documents to reduce contractor claims bv helping to insure the internal consistency of tender packages. Borrower Performance 38. The Borrower's main weaknesses stemmed from its inexperience in contract administration, procurement and construction management which resulted in continuous experimentation and over ambitious design during implementation--without due concern to costs versus contractual limitations. However, considering that this was the first large-scale construction project executed by RDA which involved international firms, it demonstrated a commendable determination to successfully complete as much of the project as possible--even when serious problems appeared in connection with both contract claims and civil unrest. As for the loan's legal requirements, the Borrower promptly met all its requirements, including the timely provision of counterpart funds and the submission of all required audit reports.  -9- 39. Lessons learned for the Borrower (but also applicable to the Bank) are summarized as follows: a. when civil works are specified by definitive tvpe only, without detailed designs and actual works are to be agreed as the contract progresses, then it becomes much more difficult to keep the contract within budget: b. tender documents need to be as explicit as possible in their description of the work to be performed. and engineering specifications and site conditions must be specified to the fullest extent in these documents: c. site investigations should be thoroughly carried out before design and costing of project contracts: d. contracts should be split so that certain works can be performed by local contractors--at rates usually lower than international contractors: and e. RDA needs to build up its in-house expertise in the areas of the design and administration of large construction contracts. modern road and bridge building techniques and accounting. Proiect Relationship 40. Initially, the Bank could have supervised the on-going contracts more closely and the Borrower, in the absence of adequate Bank supervision, should have signalled earlier to the Bank that problems were being encountered. As a result of the substantial cost overruns and contract problems experienced midway through the project, the Bank and Borrower subsequently developed a much closer working relationship. This was particularly the case after the fact finding mission in June 1988. As a result, the RDA and Bank relationship in the ongoing Third Roads Project is considered good. and largely reflects that established in the Second Roads Project. Consulting Services 41. As discussed in paragraphs 11 to 14, consultant performance by the advising engineer was less than optimal. On the other hand, given the restrictive TORs and the sometimes difficult working conditions with civil unrest and contract disputes, the supervising engineer generally performed in a satisfactorv manner. 42. One lesson leamed in the use of advising consultants is that they need to be better utilized to facilitate technology transfer and thereby increase RDA's in-house capabilities. For example, in the Third Roads Project, two RDA counterpart engineers are assigned to the expatriate project advisor in the PMMU. The full-time responsibilities of these staff are to leam (by doing and through structured instruction) as much as possible concerning the design and management of large road and bridge contracts, and help with the dissemination of such information throughout the agency.  - 10 - Proiect Documentation and Data 43. There were no problems with the availability or adequacv of project documentation. Because the Borrower was advised of the requirements for preparation of the Project Completion Report about a v'ear before the loan's final disbursement. all the material needed for this report (includin tihe text for Part 11) was timely delivered. Detailed calculations and the assumptions used in the Staff Appraisal Report (SAR) to determine the project's ERR were not found in the Bank's files and are presumed lost. However, the results of these analyses were presented in the SAR, so this was not a problem. except possibly in the case of the double bituminous surface treatment (DBST) road contracts where it could not be determined whether or not exactly the same methodology was used to re-calculate the ERR (see Appendix 1, paragraph 6).  - 11 - PROJECT COMPLETION REPORT DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) Part II Introduction 44. The Second Roads Project was specifically structured for the major works to be performed bv international, rather than local. contractors as a result of the inadequate performance of local contractors in the First Project. The introduction of major international construction companies. which give major emphasis and commensurate resources for the contractual administration. quantitv surveving and claims aspects of a contract, led to major disputes and claims bv Contractors which RDA had great difficultv in controlling and resulted in final contract values in excess of three times the original value, and actual costs in Rupees exceeding bv four times the original estimated costs. Contract No. 3 is still not settled (as of the date of the writing of Part II in September 1991) and is likely to go to arbitration. 45. As the PCR is intended to be analytical rather than descriptive and comprehensive. the report does not attempt to fullv detail the major problems experienced on the reconstruction of Kalutara Bridge and the rehabilitation of Colombo-Kandv Road. Phase II. The history of the contractual disputes has been recorded in other reports and correspondence. 46. It must be stressed that the contractual difficulties on these 2 Contracts marred the Project and forced its reduction of scope. The RDA was pitched into contractual conflict with two international companies Skanska AB of Sweden and Balfour Beattv International Ltd. of UK (while the latter was one of the Joint Venture Partner, it effectively managed and executed the Contract). Although the RDA, as the implementing agency had the benefit of the Technical assistance provided under the Project. and in addition utilized reputable international consultants for supervision of the Colombo- Kandy Road Phase II work, the financial outcome of these two contracts is considered most unsatisfactory. (It should be noted that the finished work was satisfactory). Similar situations, with the accompanying, fruitless expenditure of time and effort and must be avoided in the future. 47. The PCR also does not attempt to detail the numerous events and serious effects of the civil disruption caused by politically motivated militants in Sri Lanka during 1988 and 1989. These events are recorded elsewhere and it is sufficient to note that the country was totally paralvsed for several periods during these 2 years and that the unrest obviously caused delays to progress. increased costs considerablv and aggravated the other contractual problems that were being experienced. 48. The civil unrest was allegedlv the reason for the Contractor on Contract No. RDA/WB2/ICB- 4 abandoning the works in December 1989. While this mav have been valid reason, it is believed that the uneconomic contract prices would have forced the event ultimately. Termination on mutuallv agreed terms was negotiated. the main advantage of which was the lease of some of the Contractor's equipment. at preferential rates, which was used to complete a portion of the Contract work. 49. The contractual disputes encountered. which demonstrated the acumen of international contractors contractual expertise and their modus operandi lead to:  - 12 - querving the suitabilitv of the standard FIDIC type conditions of contract for rehabilitation work which is not fullv detailed at tender and which necessarily requires extensive variations. querving the empiovment of sophisticate. hi-tech international contractors. for basicallv simple but labour intensive road rehabilitation works. Consideration of wavs of assisting and encouraging local contractors to perform road rehabilitation works and exploring the 'construction management and supply of material' approach for future road rehabilitation works. Ensuring circumstances leading to delays and variations to the works are minimized in future similar Projects. Bank's Performance 50. The Banks significant contribution and understanding throughout the Project period are greatlv appreciated. In particular the Bank was sympathetic to the contractual problems encountered and to the internal difficulties in Sri Lanka during the execution of the Project. The Bank's loan terms contain conditions pertaining to the selection of contractors and consultants, contract conditions to be used and approval by the Bank for major expenditure or deviations from the approved program. The Borrower therefore is guided to a large extent by the Bank's procedures and requirements. In such circumstances, it is considered incumbent on the Bank to assist and advise corrective action to be taken when serious problems arise in the implementation of a Project. With regard to the problems encountered on Contracts Nos. I and 3, it is felt that although a mission was sent in June 1988 to investigate the status of Contract No 3, the Bank could have assisted more and been positive in respect of the serious contractual and cost difficulties. 51. In structuring the scope and Contract documents for the Third Project, both the Bank and RDA have recognized the problems experienced in the Second Project and have sought to avoid similar ones by improving technical specifications, more fully describing and detailing work at tender stace and amending suitably the conditions of contract. The Bank's recommendations are encapsulated in the Appraisal Report for the Third Project. Borrower's Performance 52. The First Roads Project did not cover any long sections of roads, nor involved international companies in the execution of the Project scope. No major road project, apart from that included in the Mahaweli Dam and Irrigation Project, had been undertaken in Sri Lanka for a number of years. The implementation of the Project, was to an extent out with the RDA's experience, which was the reason the Project included the Technical Assistance (Highway Engineering and Construction Management Advisers) to supplement RDA's organization. The Technical Assistance period actually used was some 84 man months, double the estimated quantitv. 53. The two advisers operated within the Project Management Cell of the Construction Management and Contracts Division (changed to "Contracts Management" in 1990) of the RDA.  - 13 - 54. The Director. CM. acted as the Eneineer under the Contract for Contracts Nos. .. 3 and 4 while the Consultants assumed the position for Contract No. 1. Kalutara Bridges. The Deputv Director was the Engineer for the LCB bridge contracts. The situation whereby the Engineer, under a FIDIC based contract. is part of the Employer's staff. is not uncommon but undesirable as conflict of interest is unavoidable and complete impartialitv, as intended by the Contract. is therefore difficult to achieve. >5. The CM division. the Technical Assistance and the consultants supervising Kalutara Bridge and Colombo-Kandy Road. Phase II Contracts worked very diligentlv (as evidenced bv the extensive records. reports and correspondence) to bring the Contracts to a satisfactory conclusion but the overrun of costs was not avoided. While hindsight provides better solutions. no particular cause. fault or non-performance can be determined which explains or lays blame for the outcome. but bv the same token no particular party can be exonerated. The problems stemmed from. in the case of Kalutara Bridges, a major variation due to a design change and on Colombo-Kandy Road Phase II. largely from ambiguous and inadequate tender documentation which in turn resulted in ordered variations. The Contractors used such variations to claim inordinately large payment increase. The unit costs achieved in the Project are: A.C. rehabilitated Roads: Rs b.6 million (SO.2 million per Kn DBST rehabilitated Roads: Rs 1.90 million ($0.06 million) per Km Major Bridge: Rs 0.3 million ($0.01 million) per carriageway metre length of bridge) Minor Bridges: Rs 4.5 million ($0.14 million) each 56. While the road costs were very much higher than the estimates, thev are not so excessive when compared to the tender prices received in mid 1991 for World Bank Third Roads Project and the ADB Second Roads Project. For example the unit price for AC rehabilitated roads in these tenders is between Rs 6 and 8.2 million per km. Considered in the light of current costs, then the actual unit costs achieved are not so unreasonable when the additional costs of civil disruption are discounted. 57. The actual cost of the Kalutara Bridge is less than the cost of the similar New Victoria Bridge (Japanese Friendship Bridge) which is currently under construction. This bridge provides only about 30% of the Kalutara Bridge's carriageway length. This again is reassuring in that the actual cost. while greatvly in excess of the estimate and tender price. has proved to be not unreasonable. 58. The fact that the unit cost in the Project work are in line with the current costs indicates that the original estimates were low and that costs have greatly increased in the Project period. The rates of return. as given in Part I. Section 6 reflect that the actual costs were not out of order.  - 14 - L essons Learnt Road Rehabilitation 59. On both phases of the rehabilitation of Colombo-Kandy Road. the road pavement strengthening and profiling by scarification of the existing pavement wvas found to be physicallv impractical. The use of penetration macadam for road base was also found to be inadvisable because of time considerations on heavilv trafficked roads. The use of an asphaltic regulating material was therefore introduced on these two contracts and was also specified for Contract No. 4. Since an asphalt mixing plant is already a necessity for the surface course material. processing an asphaltic regulating base material is only marginallv more expensive but this margin is outweighed by time and related costs. All future Contracts will specify the use of such asphaltic regulatingibase material. 60. Care will be taken ensure delays due to services are minimized either by re-locating these prior to commencement of work. or bv designing the road improvements with the extant services. Similarly with land acquisition, if land has not been, or cannot be acquired for desired widening, then the works will be detailed within the right of way. 61. Tender documents need to be more explicit in the description of the works and need to be thoroughly checked in order to remove ambiguities, errors etc. and to ensure completeness. Bridge Works 62. Following the events of Kalutara Bridge Contract, the site investigation, which will include a structural survey of any part of the existing bridge which is to be incorporated into the new structure, will be thoroughly carried out and confirmed prior to design and tender. Local Contracting Industrv 63. In the light of the cost of performing rehabilitation works by international contractors. the .ncouragement and development of domestic contractors appears paramount for long term benefits. The Third Project provides for a study of local contractors and ways and means for developing the industrv. It would seem that if the supply of materials, such as aggregates and asphaltic concrete, which require large long term capital investment. could be arranged this would facilitate the participation of local contractors. Selection of Contractors 64. The pre-qualification of contractors should contain provisions for assessing the Contractor's litigation record and feedback from the Bank should be forthcoming on previous work undertaken by each applicant on other Bank funded projects. Considered excessive dispute history should be grounds for disqualifving contractors.  - 15 - Management and Monitoring 65. It is acknowledged that an improvement in contract manaigement is required. especially for international contractors and their sophisticated staff. The Third Roads Project has provisions for establishing a Project Management and Monitoringz Unit which will facilitate identifving necessary action in respect of issuing variations. their valuations. claims. etc. Risk of Civil Unrest 66. With the history of events in Sri Lanka over the past 10 vears. the risk of civil unrest in the countrv impacting a Project cannot be ignored. Having experienced the effects during the Second Roads Project. the RDA is now more aware of the consequences and is better prepared for taking decisions regarding suspending or termninating work for such reasons.  PROJECT COMPLETION REPORT DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA SECOND ROADS PROJECT (LOAN 2517-CE) Part III 1. Related World Bank Loans and Credits Loan/Credit Year of Purpose of Project [ Status Comments Title Approval L569-CE; CR133-CE 1968 Enhanced bus transport Cancelled Highwavs and maintenance: traffic engineering CR900-CE 1979 Restore portions of road Completed Road Maintenance network: repair bridges: institutional strengtheninz CR994-CE 1980 Facilitate transportation of Completed Road Passenger passengers and goods and Transport to reduce road transport costs CR1883-CE 1988 Road reconstruction in In Progress Slowed by Emergency north and northeast areas civil unrest Reconstruction and Rehabilitation Project l CR2183-CE 1991 Restore and/or upgrade In Progress Progressing Third Roads major trunk and well secondary roads and bridges; 3 major studies: construction standards: roads sub-sector of construction industrv; and user charges National Roads N/A Establish appropriate Under Appraisal in Project policy and institutional Preparation FY 94 framework for road maintenance  - 17 - 2. Project Timetable Date Item Planned Revised Actual First Mention in Files 3/80 Government's Application N/A Identification 10/80 Project Brief 2/82 Preparation Mission -- 11/82 Appraisal Missions 1 1/82 5/83 to 9/84 Loan Negotiations 4/83 2/85 Board Approval 6/83 4/85 Loan Signature 7/83 5/85 Loan Effectiveness 9/83 7/85 Project Completion 10/92 -- 4/92 Loan Closing 1 12/92 7/92 6/92  - 18 - 3. Loan Disbursements Bank Fical Year Estimated Actual Actual % of and Quarter Cumulative * Cumulative Estimated 1986 1 240 2.000 833.33 2 480 2,900 604.17 3 1,200 2.900 241.67 4 1,680 3,500 208.33 1987 1 2,640 3,700 140.15 2 3,360 5,700 169.64 3 4,320 6,000 138.89 4 5,280 7,500 142.05 1988 1 6,480 9,100 140.43 2 7.680 9,700 126.30 3 8,880 11,400 128.38 4 10,080 12,200 121.03 1989 1 11,280 16,000 141.84 2 12,480 16,500 132.21 3 13,680 17,300 126.46 4 14,880 18,800 126.34 1990 1 16,080 19,600 121.89 2 17,040 23,000 134.98 3 18.000 23,800 132.22 4 18,960 23.900 126.05 1991 1 19,680 24,000 121.95 2 20,400 24,000 117.65 3 21,120 24.000 113.64 4 21,840 24,000 109.89 1992 1 22,230 24,000 107.96 2 22,800 24,000 105.26 3 23,160 24,000 103.63 4 23,520 24,000 102.04 1993 1 23.760 24,000 101.01 2 24,000 24,000 100.00 Final Disbursement: September 14, 1990 Based on South Asia Transportation Disbursement Profile as of 3/85  - 19 - 4. Proiect ImDlementation Bids Invited Contract Award Start of Work I CompLttion of Workl Project .--I----------- ------------------ c onent Ptwled ActuaI PaWWed Actual| Plared Actual Pliwrd Actual Road Works by Contract | I ........... _........ ....... . I Paclkae S1 (per SAU) 01/85 I 11/85 i 1/86 3/89 Package Q2 (per SU) 12/85 | N/A | /A 1989 Cotolfbo-Norone Road 4/88 10/18 12/8 9/90 Cobo-Kandy Phase I 4/85 8/5 s 10/85 I 7/89 Cotaffo-Kwndy Phase I1 1/86 08/86 10/86 I 1990 Bridge Works by Contract | F ..............................l Package 91 (per SAR) 1/85 10/85 I 11/85 I N/A Packag 02 (per AR) 11/85 I 6/86 K/A I N/A Package 93 (per SAU) 12/l 6 6/87 l/A I N/A 1 27/1 and 27/2 at Katutara 1/85 7/85 9/a5 s 1990 2 38/1, Cotabo Gall* Road 5/87 6/87 197 1992 6 153/6 (243/5 km), C.R.W.R. Rd. 2/87 | 6/87 | 7/87 | 1990 7 159/4 (253/4 km), C.R.U.R. Rd. 2/87 6/87 1 7/87 1990 8 183/2, Comc o-Wet&LNay Rd. 2/87 6/57 I 7/v7 1992 16 18/2, EkaUla-Gaha Road 2/87 I 5/87 6/87 2/89 17 17/13. Colo-Kandy Road 11/86 3/87 I 4/87 1 1988 21 9/4, Alaem-Dplteasa Ad. 11/86 3/87 | 4/87 | 3/91 23 1/6. Katswayeke- vywWoda Rd. 11/86 i 3/87 4/87 10/90 30 154/2, Cotro-GCate-gavntoto Rd. 7/87 9/87 1987 1991 i ~ ~ ~~ ~~~~~~~~I II BrdWge worka by force Account I I ...... _____ __ _ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I I Per SMR K/A Multiplo Dotes | Muttiple Dotes MultipLe Dates 3 1/8. Kirindiwits G_Imjlla Rd MA I A 1987 I 12/90 4 25/2. Galtlebeiyay load MA MA 1987 I 8/88 9 53/2, Tawmuntr_lal tawateole Rd. IA MA 1986 | 11/88 18 Over e Oy', oAwgo.-Mika wera. Rd. ItA LA | 1986 12/86 19 10/11, Ablwanod-Pitigosi Rd. ItA A I A 117 12/87 22 1/1. Laxpwa-awry R od MA K A 1986 12/86 24 27/1, Kottaws-Ahangmi Rd. A a/MA | s | lO/86| 25 2V9 Niomn-Tha thagiaums Rd. MA MA 196 1 2/8 26 6/3 (10/2 io), Colabo-Kwdy Rd. MA MA 1985 12/86 28 Laeoon Bridge, Chilow MA IlA 1987 8/87 29 1V/7 Katte-ope toad MA MA 1987 I 11/87 Tlchnical Assistwnce I I ._ _______ _ __ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I I Pr SM 5/85 I 11/85 1 1/86 1 2/88 Kiax Interatiil MA 2/85 I 7/85 1 4/87 W. S. Atkirn Intenutional MA MA MA MA Louit larger International MA MA MA MA Equipment Procurmnt: I I ..............................l Labratory 6/85 NA I 11/85 MA MA KA Workshop 6/85 MA 11/85 MA MA MA Niace lmous 1/86 MA I N/A MA MA MA i/A * Mot avOilaobe.  - 20 - 5. Proiect Costs (in US$ miilions) <--------Estimated -------- <-------- Actua* --------l Category Locat Foreign Totat Locat Foreign Total Road Repairs 11.0 9.8 20.8 26.87 12.01 38.9 Bridge Repairs 3.1 3.2 6.3 10.35 6.38 16.7 Supervision 0.9 0.3 1.2 0.13 3.67 3.8 Equipment 0.6 0.9 1.5 0.14 0.23 0.4 Technical Assistance and Training 0.2 0.7 0.9 0.04 1.7 1.7 Total Base Costs 15.8 14.9 30.7 37.5 24.0 61.5 Physical Contingencies 1.5 1.4 2.9 Price Contingencies 6.2 3.8 10.0 Total Contingencies 7.7 5.2 12.9 0.0 0.0 0.0 Project Total 23.5 20.1 43.6 37.5 24.0 61.5 UflflE =ZzMzSf =ZZss Nassus= =Manz== zzSaSu a Used exchange rate of Rs. 32.5 a S1 (mean exchange rate during Project).  - 21 - 6. Project Financing and 7. Allocation of Loan Proceeds (in USS millions) <---------Planned----------, First Second Source Original Revision Revision Percent (1) (2) (3) Actual of P(anned IBRD Roadworks 14.0 12.0 12.0 12.03 100.25 Bridgeworks 4.0 6.2 6.4 6.39 99.84 Equipment 1.0 0.4 0.3 0.24 80.00 Technical Assistance 2.5 5.4 5.3 5.34 100.75 Special Account 2.0 0.0 0.0 0.00 0.00 Unallocated 0.5 0.0 0.0 0.00 0.00 Total IBRO 24.0 24.0 24.0 24.0 100.00 GOVERNMENT 19.6 19.6 19.6 41.23 210.36 Total 43.6 43.6 43.6 65.2 149.61 NOTES: (1) Original is per Loan Agreement dated 5/85; (2) First Revision is per GOSL request and Bank agreement dated 12/88; (3) Second Revision is per GOSL request and Bank agreement dated 5/89.  - 22 - 8. Direct Benefits of Proiect Road Ccnporwnts of Project < -Length (km)--> Cost (Rs. Millions) Cost (USS Millions) Road and Location Approisal Actual Appraisat Actual Appraisal Actual