Mexico - Highway Maintenance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15162 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-MF ) DECEMBER 5, 1995 Country Department II Infrastructure Operations Division Latin America and the Caribbean 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 USE ONLY IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) CONTENTS Pa2e No. PREFACE EVALUATION SUMMARY .............................................i PART I - PROJECT IMPLEMENTATION ASSESSMENT .............................................. 1 A. Introduction .. Project Objectives .2 Evaluation of Objctives .2 B. Achievement of Objectives .4 Physical Objectives .4 Institutional Development Objectives .5 Economic Re-evaluation .5 C. Major Factors Affecting the Project .5 D. Project Sustainability .7 E. Bank Performance .7 Identification .7 Preparation and Appraisal .8 Supervision ...8 FF. Borrower Performance ...................9 Preparation ...................9 Implementation ...................9 G. Assessment of Outcome .9 H. Future Operation .............. . . . . .. . . ........ 10 1. Key Lessons Learned .............10...,,,,,,,,,,,,,,,,,,..........,,,,..... 10 Ms document has a restricted distribution and may be used by recipients only in the perfornance of their official duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.  Page No. PART II - STATISTICAL TABLES Table 1: Summary of Assessments ........................................... 12 Table 2: Related Bank Loans ............................................ 13 Table 3: Project Timetable ........................................... 14 Table 4: Loan/Disbursements: Cumulative Estimated and Actual ................. .......................... 15 Table 5a: Key Indicators for Project Implementation ......................... .................. 16 Table 5b: Key Indicators for Program Implementation ........................................... 17 Table 6: Key Indicators for Project Operations ........................................... 18 Table 7: Studies Included in the Project ........................................... 19 Table 8a: Project Costs ........................................... 21 Table 8b: Project Financing ........................................... 22 Table 9: Economic Costs and Benefits ........................................... 23 Table 10: Status of Legal Covenants ........................................... 25 Table 11: Bank Resources: Staff Inputs ........................................... 26 Table 12: Bank Resources: Missions ........................................... 27 Table 13: Comparison of Original and Reformulated Projects .......................................... 28 APPENDIXES A. Mission's Aide Memoire B. Borrower contribution to the ICR (Original and English translation) MAP MEXICO: Federal Road Network (IBRD 20343)  CURRENCY EOUIVALENTS Currency Unit = Nuevos Pesos (Mex$) = 100 Average Exchange Rate* 1987 US$1 NPMex 2.20 1988 US$1 NPMex 2.28 1989 US$1 NPMex 2.47 1990 US$1 NPMex 2.57 1991 US$1 NPMex 2.85 1992 US$1 NPMex 3.00 1993 US$1 NPMex 3.05 1994 US$1 NPMex 3.38 *As of June 30, 1995 the rate for US$1 was NPMex 6.31 FISCAL YEAR January 1 - December 31 -I  UNITS OF WEIGHTS AND MEASURES Metric British/US Equivalent 1 kilometer (km) = 0.62 mile (mi) 1 meter (m) 3.28 feet (ft) 1 gram (g) = 0.0022 pound (lb) 1 kilogram (kg) = 2.20 pounds (lb) I ton = 2,205 pounds I liter (It) = 33.28 fluid once (fl. oz) ABBREVIATIONS DGCCOP General Directorate for Maintenance of Public Works (Direcci6n General de Construcci6n y Conservaci6n de Obras Puiblicas) of SCT SCT Secretariat for Communications and Transport (Secretaria de Comunicac- iones y Transportes) SHCP Secretariat for Finance and Public Credit (Secretaria de Hacienda y Credito Piiblico) SIPUMEX Mexican Model for Bridge Management System SISTER Simulation Model of Highway Maintenance Strategies (Simulation de Strategies d'Entretien Routier) -2 -  IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) PREFACE This is the Implementation Completion Report (ICR) for the Highway Maintenance Project in Mexico for which Loan 2875-ME in the amount of US$135 million was approved on October 6, 1987 and made effective on February 2, 1988. The loan was closed on June 30, 1995 compared with the original closing date of June 30, 1994. Final disbursement took place on February 28, 1995. The ICR was prepared by Mr. Enrique Pinilla, task manager for the project, and reviewed by Mr. Martin Staab, division chief LA2IN. Preparation of this ICR began at the time of the Banks completion mission during October, 1994. It is based on materials in the project file. The borrower contributed to the ICR by preparing its own evaluation of the project's execution. (Appendix B).   IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Evaluation Summary Project Objectives 1. The objectives of the project were to: (a) assist the government and the Secretariat for Communications and Transport (SCT) in improving their maintenance capabilities and operations on the federal network so that the backlog of deferred periodic maintenance can be reduced or eliminated and maintenance requirements provided in the future on a timely basis; (b) enhance the cost effectiveness and help maximize the economic benefits of road maintenance by improving maintenance planning and management; and (c) promote the implementation of appropriate cost recovery policies for roads such that taxes on heavy vehicles cover at least the marginal cost attributable to them (para. 6). 2. The project was intended to support the Government's five year Maintenance Improvement Program (1987-1991), including: (a) periodic maintenance of paved roads and bridges; (b) provision of new, improved or expanded workshop facilities,including required machinery, tools and spare parts; (c) procurement of road maintenance equipment; (d) implementation of SCTs equipment overhaul and rehabilitation program; (e) training in equipment operation, repair and maintenance and in road maintenance planning and operations; and (f) consulting services for training and for studies and technical support to upgrade maintenance planning, design and execution (para. 11). 3. Given the accumulated backlog of periodic maintenance of the paved road network, the deteriorated condition of bridges and the equipment fleet, the need to increase public sector revenues through cost recovery policies and the necessity to improve the planning and managerial aspects of the maintenance budgeting process, the project objectives were clear, realistic and important for the sector and consistent with overall Bank Lending Strategy (para. 12). Implementation Experience and Results 4. The project modestly achieved its physical objectives. Periodic maintenance and rehabilitation of 6,100 km of federal highways was accomplished as compared to a SAR estimate of 16,000 km. The repair and rehabilitation of 338 existing bridges was accomplished as compared with a target of 400 bridges in the SAR. The institutional development objectives  HI were substantially achieved with respect to: a) the implementation of the first stages of the pavement management system (SISTER) and the bridge management system (SIPUMEX); (b) the studies for the reorganization of the General Directorate for Maintenance of Public Works (DGCCOP); and (c) the training of road maintenance personnel and equipment operators as well as technical,administrative and managerial personnel of DGCCOP (paras. 15 and 16). 5. The likelihood of project sustainability is high. The importance of contracting routine and periodic maintenance has been established at the highest levels of Government; the reorganization of DGCCOP is being implemented under loan 3628-ME as are the paving management system (SISTER) and the bridge management system (SIPUMEX). Government ownership of these institutional improvements has been demonstrated by the systematic use of these managerial tools. The project outcome is rated as satisfactory (para. 25). 6. The final project costs amounted to US$312.89 million or 11% greater than the estimated amount of US$281.5 million. The financial disbursements were negligible during the first two years after which most of the Bank's proceeds were disbursed during the next three years. The loan was closed on June 30, 1995, one year later than the estimated date (para. 24). 7. The project was estimated to begin implementation in early 1988 and be completed by June 30, 1994. Project implementation started with two years delay and was completed by the end of 1994. Project implementation during the early years was hindered by inadequate and untimely budgetary allocations, the lack of experience and motivation by DGCCOP in the adequate supervision and quality control of the works, the lack of experience of DGCCOP in managing works under contract, the lack of incentives for SCT to contract the periodic maintenance of roads and the lack of familiarity of DGCCOP with the Bank's procedures and regulations regarding the contracting of works. After 1990 the DGCCOP began implementation as it was originally intended. Budgetary allocations were linked to the execution of Bank-financed projects; priority was given to highway maintenance; contracting of periodic maintenance operations was established at high levels of government; and the DGCOP became more involved in the design and supervision of work. From 1992-1994, with the advanced progress of works, the DGCCOP placed great emphasis on the institutional development component of the project during which time studies were completed for the paving management system (SISTER), the bridge management system (SIPUMEX) and the reorganization of DGCCOP (paras. 18, 19 and 20). 8. The Bank's performance in the identification stage was satisfactory. During the preparation and appraisal stages, the Bank's assessment of SCT's implementation capacity and its commitment to maintenance was probably too optimistic resulting in a design of the project which was somewhat ambitious. During supervision, the Bank was able to compensate for some of these problems by providing support and advice to the DGCCOP. The Borrower's performance during project preparation and appraisal was not as strong as it could have been due in large part to the difficult macroeconomic situation confronting the country, the fact that the government was at the end of its administration, and the confusion caused by the Mexico City earthquake. In spite of the delay of two years, the borrower's performance during  iii implementation was satisfactory following the resolution of its budgetary allocation problems and its commitment to execute the project (paras. 27, 28, 29, 30 and 31). Summary of Findings, Future Operations, and Key Lessons Learned 9. The physical objectives were only partly achieved while the institutional developments were substantially accomplished. The project suffered from an initial two year delay but once budgetary problems were resolved and the government was convinced of the project's importance, the DGCCOP began implementing the project at a rapid pace. The project has assisted the DGCCOP to develop its institutional and human capacity in its effort to transform it from an operational agency to an agency with a planning and strategic role (para. 32). 10. Under the ongoing Highway Rehabilitation and Traffic Safety Project (Loan 3628-ME), the paving (SISTER) and bridge (SIPUMEX) management systems, and the reorganization of DGCCOP continue to move forward. The importance of highway maintenance and the contracting of maintenance of roads has been established at the highest levels of Government. There is reason to be confident that the institutional improvements, started under the project, will be sustained (paras. 25, 33). 11. The following lessons emerged from the project and have been taken into account in the on-going loan 3628-ME (para. 34): (a) The implementing agency should be committed to undertake the project and be familiar with Bank procedures regarding the contracting of works. (b) Resistance to institutional change may require a modest initial approach to implementation of new policies and procedures. Opportunities for further development may occur later, building on achievements. A flexible approach is needed. (c) Expenditures for Bank financed projects should be tied to budgetary disbursements of the implementing agency. (d) The Secretariat for Finance and Public Credit (SHCP) should be involved on a timely basis in discussions with the SCT and DGCCOP regarding the need for additional allocations and better efficiency in the use of allocated funds, especially in tying the allocations to the implementation schedule.   IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) PART I - PROJECT IMPLEMENTATION ASSESSMENT A. INTRODUCTION 1. Road transport in Mexico is the major mode for both passengers and freight. In 1989, 99% of intercity movement and about 84% of cargo movement by land between cities occurred on highways. 2. The Federal Highway Network, as well as the rest of Mexico's road system, has evolved rapidly. From 1952, when there were only 27,000 kmn. of roads of which 16,000 km were paved, the road system overall has grown to over 250,000 km of which about 95,000 km are paved (including 9,000 km with four or more lanes). The slower annual rate of growth of paved roads in the last twenty years is an indication that the network has reached relative maturity and that, with the exception of some areas, the trunk network is in place. 3. Highways have experienced a continual drop in the relative share of transport investment, falling from over 60% of investment in 1977 to almost 400/o in the mid-1980's, to the point where the annual budgets for construction and maintenance were insufficient to cover the needs of the network. The level of traffic congestion and the condition of the road network led to excessive vehicle operating costs and the progressive deterioration of the federal trunk network. 4. During the Country Program Implementation Review held in July, 1985, the Government proposed that the Bank support its efforts to reduce the backlog of deferred maintenance that had rapidly accumulated. As a result, this project was prepared which would focus on overall maintenance and the institutional improvements required as well as other deferred maintenance needs. 5. The Bank has been involved with the Mexican Highway Sector since 1960, and has made a total of twelve loans, ten of which were for the federal road system. The two most recent loans, the Highway Maintenance Project (Loan 2875-ME), and the ongoing Highway Rehabilitation and Traffic Safety Project (Loan 3628-ME) have focussed on addressing the need for maintenance and rehabilitation of the federal network.  2 Project Objectives 6. The objectives of the project were to: (a) assist the government and the SCT in improving their maintenance capabilities and operations on the federal network so that the backlog of deferred periodic maintenance can be reduced or eliminated and maintenance requirements provided in the future on a timely basis; (b) enhance the cost effectiveness and help maximize the economic benefits of road maintenance by improving maintenance planning and management; and (c) promote the implementation of appropriate cost recovery policies for roads such that taxes on heavy vehicles cover at least the marginal cost attributable to them. Evaluation of Objectives 7. As a result of the economic crisis which began in 1982, the Government had to curtail radically the sectoral investment plans, and by 1985, transport investment levels were 43% below the 1981 levels. The budgetary cuts in the highway sector, coupled with the fact that many of the pavements were substandard to support the heavy axle loads and higher traffic densities, led to excessive operating costs and the progressive deterioration of the federal trunk system. Consequently, many of the roads did not receive the necessary maintenance attention, causing an accumulating backlog of periodic maintenance. 8. A similar situation existed with regard to bridges. Many of the bridge structures in the system were built before 1950 and the design loads were no longer compatible with the heavier truck loadings utilizing these structures. In addition, the outdated design of expansion joints and bearings led to the deteriorated condition of many of the bridges. 9. An important part of the Government's annual maintenance budget exercise is the planning and programming of highway maintenance operations. Due to the inadequacies in the staffing and the organizational problems within the DGCCOP's Programming and Evaluation Directorate, there was limited capabilities to prepare, optimize and justify annual and multi-year maintenance budgets. 10. In 1985, SCT in coordination with the Bank conducted a study on road user charges which concluded that the total revenues from all road users were insufficient to cover total road construction and maintenance needs. In particular, the heavier vehicles, which cause more damage to the road system than other vehicles, were not paying their full share of the damages. 11. Based on field investigations and economic analysis performed by SCT, the Bank collaborated in developing a project to support the Government's five year maintenance improvement Program (1987-1991). The project consisted of. (a) Civil Works Maintenance Program of roads in the Federal Highway Network which includes the periodic maintenance of 7,000 km (of a total of 18,200 Iam) and the surface  3 treatment of 9,000 km (of a total of 48,000 km) of paved roads over the five year period Repair and Rehabilitation Program for existing bridges and culverts on the Federal Highway Network which includes about 400 major bridges (of a total of 950 bridges) which require major repairs Workshop Construction, Rehabilitation, Improvement and Expansion Program including workshop tools and equipment and an initial stock of spare parts for scheduled maintenance. (b) Maintenance Equipment Repair and Rehabilitation Program for Existing Equipment Procurement of New Road Maintenance Equipment including associated spare parts (c) Training Training Program including Technical Support for Training (d) Consulting Services Consulting Services and Technical Support 12. Given the accumulated backlog of periodic maintenance of the paved road network, the deteriorated condition of bridges and the equipment fleet, the need to increase public sector revenues through cost recovery policies and the necessity to improve the planning and managerial aspects of the maintenance budgeting process, the project objectives were clear, realistic and important for the sector and consistent with the overall Bank lending strategy. 13. SCT, through DGCCOP, was responsible for the project's implementation. Periodic maintenance and the rehabilitation of bridges were to be carried out by contract. Consulting services were utilized to provide engineering, supervision and technical support to the DGCCOP as well as to provide professional services to DGCCOP's Training Unit. Within the DGCCOP, the Directorate for Programming and Evaluation was responsible for the planning, monitoring and reporting of project activities. The Equipment Directorate within the DGCCOP handled the procurement of new maintenance equipment, spare parts, tools and machinery as well as the design, bidding and awarding of construction contracts, for new workshops. 14. The total project cost, excluding taxes,was estimated at US$281.5 million, with a foreign exchange cost of US$135.0 rnillion (representing 48% of the total project cost). The Bank loan of US$135.0 million was to finance the total foreign exchange portion of the cost of selected  4 items. The Government was to provide the required counterpart funding through an annual budgetary allocation. B. ACHIIEVEMENT OF OBJECTIVES Physical Objectives 15. The physical objectives of the project were modestly achieved. They are summarized as follows: Civil Works: Periodic maintenance for roads in the Federal Highway System. Project financing provided for a portion of the government's five-year Maintenance Improvement Program (1987-1991). Under the Project, rehabilitation and periodic maintenance"' of 6,100 km of Federal highways was accomplished as compared with the SAR estimate of 7,000 km periodic maintenance (overlay) and 9,000 km of surface treatment of paved roads. The Government's Maintenance Improvement Program had even more optimistic targets of about 66,000 km of asphalt overlays and surface treatments of which only some 10,000 km were accomplished. The physical targets were not achieved due to the following facts: (a) insufficient budgetary allocations; (b) due to a two year delay in implementing the projects many of the roads which were originally scheduled for periodic maintenance had deteriorated rapidly to the point where they had to be rehabilitated instead, resulting in cost increases of three to four times the original estimate and consequently reducing the amount of work which could be done with the available funds; (c) the unit prices and costs per km for civil works were underestimated mainly due to the fact that as result of the effects of the Mexico City earthquake much of the critical cost data and road condition inventory was lost or in disarray; (d) the basic experience of DGCCOP was essentially confined to maintenance by force account with a lack of knowledge of unit prices and costs of maintenance by contract; and (e) the SAR estimate included surface treatment of roads as a separate work item when in reality these operations were implemented as part of the periodic maintenance component; Repair and rehabilitation program for existing bridges and culverts on the Federal highway network: The repair and rehabilitation of 338 bridges were accomplished as compared with the repair and rehabilitation of 400 bridges in the SAR estimate. Workshop construction,rehabilitation. improvement and expansion program including workshop tools and equipment and an initial stock of spare parts for scheduled maintenance: The repair and rehabilitation of 28 maintenance depots was accomplished (of a total of 31 depots). 1/ Surface treatment was included in periodic maintenance operations.  5 Maintenance equipment: Equipment purchases for about US$10.8 million were financed under the project. With the emphasis on implementing the civil works by contract, the need for greater amounts of equipment was reduced and consequently the purchased equipment (vehicles, telecommunication equipment, computers, tires, lubrication equipment and traffic control devices) was for logistical and technical support of the DGCCOP. Institutional Development Objectives 16. The institutional development objectives of the project were substantially achieved as follows: (a).about 8,200 persons from the SCT's Maintenance Directorate received training and the upgrading of their technical capabilities in the areas of heavy equipment operation and maintenance, on the job training of road maintenance crews, and the upgrading the performance of field foremen; (b) the DGCCOP, assisted by its consultants, prepared studies for: (i) the implementation of the first stage of the Pavement Management System (SISTER) which serves as a base to evaluate different maintenance strategies for a multi-year period and to prepare annual budgets, (ii) the implementation of the first stage of a Bridge Management System (SIPUMEX), and (iii) to improve its human resources, budgeting, planning and programming, a study was prepared which recommended the reorganization of the DGCCOP. Economic Re-evaluation 17. The recalculated ERR was done for a sample of 19 projects for periodic maintenance, representing 15% of the total project costs.AII but one project continue to demonstrate ERR's in excess of 12%. A lower than the estimated ERR in the case of project 19, Villahernosa- Escarcega (Ramal a Palizada) is attributable to the fact that the feasibility study contained an erroneous traffic count and an under estimation of the costs (Table 11). C. MAJOR FACTORS AFFECTING THE PROJECT 18. The project was scheduled to begin in early 1988 and be completed by June 30, 1994. Project implementation was delayed by almost two years and was completed in October, 1994 upon the conclusion of the training component and Phase 1 of the Bridge Management System. 19. During 1988 and 1989, practically no progress was made in the implementation of the project. The project was designed to support the Government's 1987-1991 highway maintenance program, on the assumption that the 1987 highway maintenance budget (about US$106 million) would be increased by about 75% and that after that, it would grow 100/o annually in real terms. The additional budget would then be implemented through the increased use of contracting rather than the existing practice of force account. However, actual budgetary allocations for 1987, 1988 and 1989 failed to include the additional amounts required for project  6 implementation and most of the works were carried out by force account, which is not eligible for Bank financing. Furthermore, as the condition of the network deteriorated, instead of periodic maintenance, the network required heavy maintenance or rehabilitation. Also, the release of budgeted funds was governed by fiscal planning considerations, keeping the flow of available funds in the early part of the year artificially low and, in addition there was a lack of incentives on the part of SCT to use the Bank Loan proceeds. In addition to the budgetary difficulties, project implementation suffered initially from the lack of experience and motivation of DGCCOP in the adequate supervision and quality control of contracted works as well as its lack of familiarity regarding the Bank's procedures and regulations on the type of project under execution. Lastly, the initiation of project implementation was ill timed as it coincided with the last year of Government administration. 20. Starting in 1990, DGCCOP began implementing the project as it was originally intended primarily due to the fact that: (i) the new administration decided to link budgetary disbursements to the execution of Bank-financed projects; (ii) the project was reformulated (the objectives remained the same but the physical targets were modified) to support the 1989-1993 maintenance program; (iii) priority was given to highway maintenance over other activities; (iv) the reformulated program took into account realistic budgetary projections negotiated with the Secretariat of Programming Budget (SPP), the 1990 authorized budget for highway rehabilitation and maintenance was increased to US$214 million and since then the budget allocation has been increased to US$270 million for 1995; (v) contracting of highway maintenance works was established at high levels; (vi) cash flows of finds have been improved so that monthly allocations were more in line with the work implementation schedule; and (vii) SCTs technical department became more involved in the design and supervision of work; 21. Given the initial optimistic financial and physical estimates, in May 1991 the DGCCOP found it necessary to request the Bank to reformulate the project to more realistic goals, without changing its objectives (Table 15). The basis for reformulation was the execution of the 1989- 1993 maintenance program. 22. During 1992, with most of the physical components under implementation or completed, greater emphasis was placed on the institutional development component of the project and was highlighted by the contracting of consultants to assist the DGCCOP in the initial phases of the pavement management system (SISTER) and the bridge management system (SIPUMEX) and a study of the reorganization of DGCCOP. 23. The period 1993-1995 was characterized by the completion of the few remaining works, mostly bridges, and the implementation of the training component of the project. 24. The final cost of the project amounted to US$312.89 million, or 11% greater than the original estimate. With regard to the periodic maintenance of road projects financed by the Bank the total investments amounted to US$253.7 million of which the Bank financed US$111.4 million through 135 contracts. From 1988 to 1991 the disbursements under the loan were practically nil. After the disbursement of US$10.0 million in the special account in February  7 1988, there were disbursements of only US$1,615 in January 1989, and US$2.0 million in September 1990, after which time 80%o of the loan funds were disbursed during FY91, FY92 and FY93 (Table 4). The loan was closed on June 30, 1995, one year later than the original closing date. D. PROJECT SUSTAD`ABLIATY 25. The project achieved most of its development objectives and the likelihood of sustainability is high. It moved from a low level of ownership at its beginning to a high ownership level when it was completed. The importance of highway maintenance, particularly of adequate budgets, the contracting of maintenance of highways and the need for the efficient use of resources is now recognized and established at the highest levels of Government. The project has been successful in improving DGCCOP's ability to make better use of its human and financial resources despite the frequent staff and managerial changes and insufficient budget allocations. The DGCCOP has made substantial improvements in developing its institutional and human capacity to move from a centralized operational agency into an agency with a planning and strategic role. DGCCOP has trained a substantial number of its personnel in upgrading their road maintenance, equipment operation, technical, administrative and managerial skills. With the implementation of loan 3628-ME, it is expected that the project's objectives would be further sustained. Under the ongoing loan the training of DGCCOP personnel is being continued; the reorganization of DGCCOP will be completed; the pavement management system (SISTER) and the bridge management system (SIPUMEX) will be implemented, and actions will be taken to ensure that the Government has a sound highway cost recovery policy and establish a systematic methodology to assess annually the status of highway cost recovery. E. BANK PERFORMANCE 26. The Bank spent nearly 75 staff-weeks to identify, prepare and appraise the project including 98 person-days in the field. A total of 100 staff-weeks was spent on supervision, including 215 person-days in the field. Identification 27. Satisfactory. As a result of the Governments budgetary limitations to allocate sufficient funds to maintain the backlog of deferred maintenance of roads that was rapidly accumulating, the Bank satisfactorily addressed the constraints, focused on the sector policy issues and collaborated with the DGCCOP in identifying a detailed five year maintenance Program. Agreements were developed with the Government on objectives to be met. The Bank and the DGCCOP satisfactorily identified the scope of the other components of the program including: the technical support to assist in the planning and managing of road maintenance operations; the requirements for the procurement of equipment and the rehabilitation and overhaul of existing equipment; and a training program to upgrade the capabilities of technical, administrative and managerial personnel of DGCCOP.  8 Preparation and Appraisal 28. Deficient. The project appraisal stage had several shortcomings. Much of the cost information and vital information relating to the condition of the road network had been lost or in complete disarray due to the effects of the Mexico City earthquake. Not enough data was available to properly appraise the cost and the amount of kilometers of roads to be included in the program. The Bank was probably too optimistic in assessing the DGCCOP's implementation capacity, the DGCCOP'S lack of experience in managing works by contract, and the DGCCOP'S lack of knowledge of Bank procurement requirements. The project was appraised on the optimistic assumption that substantial additional budgetary funds would allow implementation through the increased use of contracting rather than by greater use of force account. Given the history of maintenance allocations, the existing force account capabilities, the assessment of SCT's implementation capacity and its weak maintenance planning, the Bank appraisal was optimistic and the project turned out to be somewhat ambitious. Supervision 29. Satisfactory. The Bank collaborated with, and was supportive of the implementing agency and other key entities involved with the project in the resolution of problems arising during the implementation stage. The status and progress of implementation was satisfactorily reported in Supervision Form 590 as well as in other reports and Aide Memoires, all of which satisfactorily identified problems and recommended follow up actions to be taken by the implementing agency or the Bank. During implementation the Bank sent 11 supervision missions at opportune times to review the project, make a mid-term review of project implementation as well as to discuss and resolve outstanding issues and implementation problems. The Bank provided correct and timely advice and orientation to the DGCCOP contributing much to project implementation,in such aspects as: discussions with SHCP and the SCT on the linking of budgetary disbursements to the execution of Bank-financed projects; the increased use of periodic and routine maintenance of roads by contract; and advising the DGCCOP in the preparation of Terms of Reference for paving and bridge management studies as well as other studies included in the institutional development aspect of the project. F. BORROWER PERFORMANCE Preparation 30. Deficient. As a result of the macro economic constraints confronting the country, the confusion and disarray caused by the effects of the Mexico City earthquake and the fact that the Government was at the end of its administration period, borrower participation in the preparation process at this difficult time was less than adequate. There existed little or no adequate records on road conditions nor adequate maintenance cost information on which to make a satisfactory assessment of the project.  9 Implementation 31. Satisfactory. During the first 2 years (1988 and 1989) of project implementation the project was dornant. Although an amount of US$10 million was disbursed into the special account, none of the resources were used. Implementation delays were due to the fact that: (a) a new Government administration had just taken office; (b) the initial lack of interest of SCT to carry out the project when the budgetary increases did not materialize; and (c) the allocated funds were needed by the implementing agency to support their force account activities. Project implementation dramatically improved in 1990. The new administration took positive steps which included: the tying of the availability of budget resources to the use of Bank project funds, the increase of the highway maintenance budgets; the strengthening of the administration of the project within the SCT; and the acceptance at high levels to contract maintenance works of roads instead of using in-house resources. As a result, contracts were let for the execution of periodic maintenance and the rehabilitation of bridges and the disbursements of loan funds rose at a sharp rate (during FY91, FY92 and FY93 an arnount of US$110 million or 81% of the US$135 million loan funds were disbursed). SCT, however, was slow in preparing and submitting the progress reports on project implementation to the Bank. G. ASSESSMENT OF OUTCOME 32. The project partially achieved its physical objectives regarding the periodic maintenance of paved roads but substantially achieved its institutional development objectives. During implementation priority was given to highway maintenance over other activities. The SCT accepted the importance of contracting highway maintenance works, and established it as a part of their highway maintenance program, and the SCT technical department has become involved in the engineering and supervision of rehabilitation works. The changes sought by the project are being institutionalized, particularly the pavement management system (SISTER) and the bridge management system (SIPUMEX) which are being implemented and used in the preparation and control of DGCCOP's annual budget. In addition, DGCCOP has been reorganized and strengthened and it's planning and managerial role have been improved. Overall the project is rated as satisfactory. H. FUTURE OPERATION 33. The DGCCOP has taken steps to ensure project sustainability. The ongoing Highway Rehabilitation and Traffic Safety Project (Loan 3628-ME), provides for a continuation of the training of technical, administrative and managerial personnel; the completion of the DGCCOP reorganization; the systematic implementation of pavement and bridge management systems, the rehabilitation and resurfacing of highways, and the rehabilitation and improvement of bridges. In addition, a set of project monitoring Performance Indicators is in place, which will provide data and infornation on the status and quality of DGCCOP's maintenance operations, providing benchmarks against which improvement in road and bridge maintenance operations and capability can be measured.  10 I. KEY LESSONS LEARNED 34. The following lessons which emerge from the project provided the foundation for the ongoing loan 3628-ME, Highway Rehabilitation and Traffic Safety Project and have been incorporated in the ongoing loan: - The Implementing Agency should be committed to undertake the project and be familiar with Bank procedures especially related to procurement of works. The DGCCOP had, for many years, undertaken the role as executor of projects, with little experience in planning, contracting, monitoring and supervising the projects and no knowledge of Bank procedures. - The institutional appraisal both of the implementation agency and of the environment in which it operates should be highlighted during project preparation and appraisal. Resistance to change may require a modest initial approach in implementation of new policies and procedures. Opportunities for further development may occur later, building on achievements. A flexible approach is needed. - Expenditures for extemally funded projects should be tied to budgetary disbursements of the Implementing Agency. Without the incentive to utilize Bank Loan Funds, the DGCCOP continued to only utilize its budgetary allocations which were primarily destined for maintenance work by force account. - The various branches of SHCP should be involved as early as possible in the project cycle, in discussions regarding the need for additional allocations, better efficiency in the use of allocated resources and especially in tying the allocations to the implementation schedule. The involvement of the SHCP facilitated the discussions to improve the budgetary allocations and to avoid the unbalanced allocations occurring at the end of the year, causing many projects to be constructed in the rainy season with its consequential rise in costs. - Stress the importance of increasing the proportion of highway maintenance expenditures relative to those for construction and of ensuring that timely financing for periodic maintenance be provided during the highway life cycle in order to avoid the risk of costlier reconstruction or rehabilitation. - Encourage the Government to improve both the programming of works and the preparation of multiannual projections. This would increase the efficiency and assist in the rationalization of the highway sector. - Encourage the contracting of periodic maintenance operations and a gradual increase in the contracting of routine maintenance operations.  11 PART II - STATISTICAL TABLES  12 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 1: Summary of Assessments A. Achievement of Objectives Substantial Partial Negligible Not Applicable Macroeconomic Policies x Sector Policies X Financial Objectives x Institutional Development X Physical Objectives X Poverty Reduction X Gender Concerns X Other Social Objectives X Environmental Objectives X Public Sector Management X Private Sector Development x B. Project Sustainability Likely Unlikely Uncertain C. Bank Performance Highly satisfactory Satisfactory Deficient Identification X Preparation Assistance x Appraisal X Supervision X D. Borrower Performance Highly satisfactory Satisfactory Deficient Preparation x Implementation x Covenant Compliance X Operation (if applicable) E. Assessment of Outcome Highly Highly Satisfactory Satisfactory Unsatisfactory Unsatisfactory x  13 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 2: Related Bank Loans Loan No. Purpose Year of Status Approval Preceding Operations 268-ME Construction of 3,150 km of federal highways 1960 Completed 317-ME Construction of 385 km of toll roads, 5 bridges and 1962 Completed procurement of ferry boat 354-NE Construction of 6,000 km of federal highways and 1963 Completed procurement of maintenance equipment 401-ME Construction of 350 km of toll roads and 3 toll bridges 1965 Completed 528-ME Construction of 2,200 km of federal highways 1968 Completed 695-ME Construction of 1,040 km of federal highways 1970 Completed 968-ME Construction of 1,216 km of federal highways (including 1974 Completed widening) 1671-ME A program to modernize/improve roads, construct major 1979 Completed bridges, road infrastructure to two ports and by-passes A program of construction/reconstruction, rehabilitation 2428-ME and improvement and technical assistance 1984 Completed Construction of 1,00 km of rural roads and reconstruction 2525-Mt of 2,000 km in Chiapas 1985 Canceled Following ODerations Rehabilitation and resurfacing of 27,000 km of Highway, 3628-ME a road safety program and institutional strengthening for 1993 Ongoing improving transport sector planning and policies.  14 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 3: Project Timetable Step in Project Cycle Date Planned Date Actual Identification January 1986 January 1986 Preparation March/April 1986 March/April 1986 Appraisal June 1986 November 1986 Negotiations February, 1987 April 27, 1987 Board presentation May 1987 October 6, 1987 SigBring June 1987 November 4, 1987 Effectiveness January 1988 February 2, 1988 Project completion December 31, 1993 June 30, 1994 Loan closing June 30, 1994 June 30, 1995  15 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 4: Loan Disbursements: Cumulative Estimated and Actual Loan Disbursements (US$ Millions) FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 Appraisal 14.0 1/ 9.0 28.3 32.4 25.7 17.5 8.1 Estimate Actual 10.0 2/ 0 0 35.1 40.9 34.0 12 3.0 Actual as % 71 0 0 108 159 194 148 of estimate I/ Early disbursements reflect retroactive financing of initial works 2/ Disbursement of US$10.0 million into the special account. Date of First Disbursement: February 18, 1988 Initial Loan Closing Date: June 30, 1994 Actual Loan Closing Date: June 30, 1995 Date of Final Disbursement: February 28, 1995  16 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table Sa: Key Indicators for Project Implementation Key Implementation Estimated I/ Reformulated 2/ Actual 1987-1991 1989-1993 1989-1993 Surface Treatment (Chip Sealing) km 9,000 5,000 3/ Periodic Maintenance (Overlay) km 7,000 6,000 6,100 3/ Repair and Rehabilitation of Bridges unit 400 400 338 Pavement Strengthening kn --- 200 3/ Other Indicators Construction, rehabilitation and unit 4/ 4/ 4/ improvement of road maintenance workshops Training Accomplished persons 15,900 17,994 8,207 1/ Source: SAR 2/ Source: Propuesta de Reformulacion para el credito BIRF 2875-ME, SCT, May 15, 1991. 3/ Included in periodic maintenance 4/ The project financed, in general, the civil works involved and part of the workshop tools, equipment and spare parts needed.  17 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 5b: Key Indicators for Project Implementation (SCT's Highway Maintenance Program) Key Implementation Estimated 1/ Reformulated 2/ Actual 1987-1991 1989-1993 1989-1993 Surface Treatment (Chip Sealing) km 48,000 12,100 3/ Periodic Maintenance (Overlay) km 18,000 13,900 10,146 3/ Repair and Rehabilitation and unit 950 563 338 Reconstruction of Bridges Pavement Strengthening km 2,700 418 3/ Other Indicators Construction, rehabilitation and unit 31 31 28 improvement of road maintenance workshops Training Accomplished persons 15,900 17,994 8,207 routine Maintenance (per year) km 37,400 39,240 45,000 1/ Source: SAR 2/ Source: Propuesta de Reformulaci6n para el credito BIRF 2875-ME, SCT, May 15, 1991. 3/ Includes seals, overlays and pavement strengthening  18 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 6: Key Indicators for Project Operations Key Implementation Estimated Actual Road inventoried km/yr 20,000 42,000 Bridges inventoried brid/yr 2,500 6,149 Permanently sidelined equipment fleet scrapped per year % 20 12 Periodic maintenance using Force Account - Bituminous seal % 75 70 - Asphaltic concret overlay % 25 30 Modified indicators for future operation Roads inventoried km/yr 40,000 42,000 Bridges inventoried brid/yr 6,000 6,149 Sidelined equipment fleet scrapped per year % 20 12 Periodic maintenance work using Force Account - Bituminous Seal % 75 80 - Asphaltic Concret Overlay % 25 20 Roads in good condition (target) % 50 20 Routine maintenance costlkm US$/km 2,200 2,500 Periodic maintenance cost/km US$/km 18,500 19,000 'Reference: "Informe de Terminacion del Credito 2875-ME". SCT July 1995.  19 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 7: Studies Included in the Project Study Purpose as defined as appraisal Status Impact of Study Pavement Condition Survey Carry out detailed pavement condition Pavement condition surveys were Preparation of annual budgets and surveys on about 39,000 km of the carried out yearly during 1990-1993. request for more detailed federal highway network. inventories. Technical Support to DGCCOP's Assist DGCCOP in developing required The following studies were carried out: Programming and Evaluation planning methods for the preparation of Directorate annual and five-year prioritized - Elaboration of maintenance - Establishment of a Pavement maintenance programs with related strategies for the federal Management System used to budget estimates. highway network develop the HRRM* strategy under loan 3628-ME - Economic evaluation and - Preparation of the 1993-1996 priority of hazardous spots in program for the improvement of the primary network. about 350 hazardous road locations. Bridge Condition Survey - Carry out detailed condition - An emergency inspection of - About 76 bridges selceted as inventories of all bridges on 821 bridges was carried out high priority would be financed the paved highway network. in 1992. Yearly inspections will under the loan 3628-ME continue under the loan (Highway Rehabilitation and 3628-ME. Traffic Safety Project). - Based on the information gathered, rate the safe load capacity of each bridge, recommend programs of routine and periodic maintenance, and reconstruction of emergency works for each bridge - Assist DGCCOP in preparing an - Phase I of a Bridge Pavement - Establishment of a Bridge integrated bridge maintenance Management System was Pavement Management System program on a priority basis. completed in october 1994. which will continue to be developed under the loan 3628-ME. * Highway Rehabilitation, Resurfacing and Maintenance  20 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 7: Studies Included in the Project (Cont'd.) Study Purpose as defined as appraisal Status Impact of Study Vehicle Weight Survey Determine more accurately the axle Completed. A new axle weight regulation was loadings to which the road network and issued on January 1994. selected bridges are being subjected. Engineering Studies and Design of pavement and bridge repairs Detailed engineering studies for the Repairs of bridges executed. Supervision and rehabilitation. rehabilitation and reconstruction of 47 bridges and supervision of works. Training Courses Strengthen the performance capabilities Courses were completed in the 8207 people were trained and their of highway maintenance personnel. following areas: equipment skills improved. management, project management, bridge and road maintenance, bridge and road maintenance planning, ethics of civil servants, procurement, and english. Highway Maintenance Not defined during appraisal. This study Study recommendations are being The loan 3628-ME is assisting Organization was developed as part of the HRRM implemented. DGCCOP in implementing its project preparation. reorganizations and to strengthen its operational capacity.  21 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 8a: Project Costs Appraisal Estimate (US$M) Actual Estimate (USSM) PROJECT COMPONENT _ Local Foreign Total Local Foreign Total Costs Costs Costs Costs CIVIL WORKS 137.31 87.51 224.82 175.96 117.30 293.26 Maintenance Program for Roads on 114.35 73.00 187.35 160.51 107.00 267.51 the Federal Highway Network Repair and Rehabilitation of Bridges 18.43 11.79 30.22 13.20 8.80 22.00 Workshop construction, 4.53 2.72 7.25 2.25 1.50 3.75 Rehabilitation, Improvement and Expansion Program including tools and equipment. MAINTENANCE EQUIPMENT 6.07 45.90 51.97 3.24 7.57 10.81 TRAINING PROGRAM 1.09 0.60 1.69 1.25 0.68 1.93 CONSULTING SERVICES 2.05 0,97 3.02 4.48 2.41 6.89 TOTAL 146.52 134.98 281.50 184.93 127.90 312.89  22 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 8b: Project Financing Appraisal Estimate (USSM) Actual Estimate (USSM) Local Foreign Total Local Foreign Total Costs Costs Costs Costs IBRD 5.12 129.88 135.00 7.04 127.96 135.00 Government Contribution 141.40 5.10 146.50 177.89 0.00 177.89 TOTAL 146.52 134.98 281.50 184.93 127.96 312.89  23 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 9: Economic Cost and Benefits Original Feasibility Study ICR Estimates Representative Estinated Cost (Mill.) Actual Cost (Mill.) Date Length Length (Krn) AADT ERR (%) (Km) AADT ERR (%) MexS US$ MexS USS 1 Mexico - Piedras Negras S.L.P. - Ojuelos 1990 9.3 270 95 3594 234.07 882 273 9.3 6284 294.81 2 Matamoros - Puente Juarez Kantunil - Valladolid 1991 97.5 4,346 1,441 2048 76.21 8,982 2,779 97.5 2542 182.63 3 Mexico - Nuevo Laredo Ciudad Valles - San Luis Potosi 1992 72.0 5,000 1,616 2807 37.87 2,374 735 72.0 2529 170.95 4 Reinosa - Mazatlan Dahillo - Lim Edos. Coah./ N.L. 1991 26.7 3,300 1,094 9145 49.31 5,076 1,571 26.7 9303 166.11 5 Colima - Ciudad Mier Ent. Muleros - Lim. Edos. Zac. /Coah. 1991 92.0 691 229 1692 237.10 1,707 528 92.0 2212 152.28 6 San Luis Potosi - Jimenez San Luis Potosi - Matehuala 1990 48.3 947 333 5789 370.96 1,759 544 48.3 6712 142.21 7 Mexico - Ciudad Juarez Providencia - Luis Moya 1990 10.0 342 120 2649 122.94 1,015 314 10.0 2913 141.04 8 Muna - Felipe Carrillo P. Muna- Lim. Edos. Yuc. /Q. Roo 1991 18.0 7,820 2,593 1600 16.09 4,591 1,421 18.0 2759 132.68 9 Mexico - Acapulco Chilpancigo - Acapulco 1991 51.0 9,932 3,293 7765 89.60 11,353 3,513 51.0 6783 113.24 10 Colima - Ciudad Mier Lim. Edos. Jalisco/Zacatecas - Ednt. La Escondida 1991 161.8 1,938 643 2530 115.71 3,309 1,024 161.8 3552 103.03 11 Mexico - Ciudad Juarez Ent. La Chicharrona - Lim. Edos. Zac./ Dgo. 1991 20.0 659 218 1967 87.24 987 305 20.0 3834 95.84 12 Mexico - Nuevo Laredo Ciudad Valles- Lim. Edos. S.L.P. /Tams. 1991 23.5 793 263 2785 64.82 1,153 357 23.5 3302 58.73 13 Matamnoros - Mazatlan Monterrey Lim. Edos. Nuevo Laredo / Tams. 1990 80.0 5,492 1,929 5234 65.87 8,652 2,677 80.0 5212 58.05  24 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 9: Economic Cost and Benefits (Cont.) Original Feasibility Study ICR Estimates Representative Estimated Cost (Mill.) Actual Cost (Mill.) Date Length Length (KFin) AADT ERR (%) (Krn) AADT ERR (%) MexS USS MexS USS 14 Villahermosa - Escarcega Lim. Edos. Tab. / Camp. - Escarcega 1990 42.0 3,971 1,395 4068 66.26 14,216 4,399 42.0 2683 55.32 15 Ojuelos - Aguascalientes Lim. Edos. Jal. / Ags. - Aguascalientes 1990 17.5 1,566 550 7885 68.33 2,764 855 17.5 3060 54.98 16 Escarcerga - Progreso Ramal Conkal - Pto. Chicxulub 1991 27.0 1,645 545 950 16.03 3,341 1,034 27.0 932 47.25 17 Escarcega - Chetumal Escarcega- Lim. Edos. Camp. /Q. Roo 1991 50.0 11,804 3,914 1200 33.45 19,250 5,957 50.0 762 25.64 18 Villahernosa - Escarcega Rarnal a lonuta - Ramal a Palizada 1990 21.0 4,541 1,595 600 13.55 9,028 2,794 21.0 429 13.35 19 Villahernosa - Escarcega Ramal a Palizada 1990 42.0 13,700 4,813 2500 31.86 29,048 8,989 42.0 429 9.16  25 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINENANCE PROJECT (LOAN 2875-ME) Table 10: Status of Legal Covenants Covenant Present Original Revised Agreement Section Type Status FuIlfil FuDilt Description of Covenant Comnments Date Date Guarantee 3.01 Counterpart CP Guarantor to provide in a timely manner as needed, the 1987-89 maintenance allocations were about US$105M. Funding funds, facilities, services and other resources required for and monthly releases of allocations were distorted. Since the project. 1990, maintanance budget has increased and in 1994 reached about US$450M. which is still short of US$700M. required to eliminate backlog by 2001. Guarantee 3.03 Managernent Aspects C Procurement to be carried out according Bank guidelines. Procurement practices still need some improvements Guarantee 3.04 Financed C Bank and the Guarantor to review annually budgetary Complied with. allocations for highway maintenance. Guarantee 3.05 Project Management, C Guarantor shall prepare, carry out, monitor and review Sec SAR for "Mexico Highway Rehabilitation and Traffic revised and with the Bank the annual highway expenditure plan and Safety Project". monitoring. annual maintenance plan. Guarantee 3.06 Project Review C Bank and the Guarantor to review the progress of Complied with. carrying out the project. Guarantee 3.07 Project Reporting C Guarantor shall furmish to the Bank quarterly reports on Last progress report up to December 1993, as well as a progress of project implementation. progress report on the training progress have been received and found satisfactory. Guarantee 3.08 Institutional C Guarantor to carry out the road user cost recovery Complied with, but methodology and monitoring need scheme. revision and systematization. A road financing study would be carried out as part of the Highway Rehabilitation and Safety Project. Guarantee 4.01/4.02 Accounts/Auditing C Auditing of accounts and records of the project, and Audit Report for 1994 has been received. SOEs with annual reports to the Bank. Loan 4.01 Accounts/Auditing C Auditing of Special Account by independent auditors Audit for 1994 has been provided to the Bank. with annual reports to the Bank. Status: C - Complied with SOON - Compliance Expected in Reasonably Short Time CD - Compliance after Delay CP -Complied with Partially NC- Not complied with NYD - NYD  26 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 11: Bank Resources: Staff Inputs Planned Actual Staff of Project Cycle _ Weeks US$ Weeks US$ Through appraisal N/A N/A 58.5 105,100 Appraisal - Board N/A N/A 16.6 34,500 Board - Effectiveness N/A N/A N/A N/A Supervision N/A N/A 100,1 310,800 Completion N/A N/A 6 3,500 TOTAL 181,5 453,400  27 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 12: Bank Resources: Missions Performance rating I/ Stage of Project Month/year Number of Days in field Specialized Cycle persons 2/ staff sldlls 3/ represented Implementation Development Types of status impact problems Identification 7/85 2 9 HE, EC N/A N/A N/A Preparation 4/86 2 9 HE, EC N/A N/A N/A Pre-appraisal 7/86 2 13 HE, EC N/A N/A N/A Appraisal 10/86 2 18 HE, EC N/A N/A N/A Supervision 3/88 2 5 HE, EC 1 I N/A Supervision 9/88 2 18 HE, EC I I F Supervision 4/89 2 18 HE, EC 2 1 F Supervision 8/90 2 22 HE, EC 2 1 M,F Supervision 2/91 1 17 HE 2 I M,F Supervision 4/91 1 21 HE 2 1 M,F Supervision 9/91 1 6 F 2 1 M,F Supervision 3/92 1 5 HE 2 1 M,F Supervision 5/92 1 17 HE 2 1 M,F Supervision 7/93 1 9 HE 2 1 M,F Supervision 10/94 1 14 HE S S I I - Problem free; 2 - Moderate problems; S - Satisfactory 2 Combined with supervision/preparation missions for other highway projects 3 HE - Highway Engineer; HE (C) - Highway Engineer, Consultant; EC - Economist 4 M - Managerial; T - Technical; F - Financial  28 IMPLEMENTATION COMPLETION REPORT MEXICO HIGHWAY MAINTENANCE PROJECT (LOAN 2875-ME) Table 13: Comparison of Original and Reformulated Projects Item Original Project Reformulated Multiannual Project Maintenance 1987-1991 1989-1993 Program Program Program Periodic Maintenance - 7,000 km of asphalt - 6,000 km of asphalt Program paving (of a total of paving of a total of 18,200 km. 13,900 km - 9,000 km of surface - 5,000 km of surface treatment of a total treatment of a total of 48,000 km of 12,100 km - 200 km of rehabilita- tion and pavement strengthering Routine Maintenance Not included Routine maintenance by contract to be financed by the Bank up to US$15 million Repair and Rehabilitation of Repair and Rehabilitation of Repair, strengthening and Bridges approximately 400 bridges rehabilitation of 400 bridges Construction and Construction and No changes Rehabilitation of Workshops rehabilitation of workshops Purchase of equipment and Purchase of equipment and Purchase of selected spare parts, and the spare parts (US$42.3 equipment and spare parts rehabilitation of existing million) and repairing of US$11 million equipment equipment (US$9.67 million) Consulting Services Maintenance planning and No changes programming road inventory, engineering for the rehabilitation of roads and bridges, monitoring systems, inspection and maintenance of bridges  - 29 - APPENDIX A   - 30 - AYUDA MEMORIA MISION DE CAMINOS DEL BANCO MllNDLAL PROYECTO DE CONSERVACION DE CARRETERAS (Prestamo 2875) 1. Esta Ayuda Memoria resume los principales temas tratados durante la misi6n de caminos que visit6 Mexico entre el 7 y el 20 de octubre de 1994. La misi6n, compuesta por el Ingeniero Enrique PiniJla, revis6 conjuntamente con las agencias involucradas, el avance de la implementaci6n del Proyecto de Conservacion de Carreteras funnciado con el Pr6starno 2875-ME. La misi6n encontr6 que la fase de implementaci6n del proyecto estaba concluida con la terminaci6n en septiembre del programa de capacitaci6n y en octbubre de la primera fase del Sistema de Administraci6n de Puentes. Las ultimas aplicaciones de desembolso estan en preparacion y se espera completar los desembolsos antes del fin de ano. La misi6a tuvo la oportunidad de visitar algunas de la obras financiadas con este pr6stamo en los estados de Yucatan y Campeche, y acord6 en principio el calendario y actividades para preparar el Informe de Terminaci6n del Proyecto. La misi6n conjuntamente con las agencias involucradas en el proyecto hizo una evaluaci6n tentativa de la implementaci6n del proyecto. Los objectivos del Proyecto y su Evaluacion 2. El objetivo principal del proyecto era, segun lo consignado en el informe de evaluaci6n del Banco de mayo 20, 1989, de asistir al Gobierno y a la SCT en mejorar sus pricticas para la conservaci6n de las carreteras del sistema federal, para abatir la acumulaci6n de trabajos de mantenimiento peri6dico y para que en el futuro los recursos requeridos para la conservacion de carretares sean asignados a tiempo. Ademas, el proyecto ayudaria a promover la implementaci6n de polfticas adecuadas para la recuparaci6n de costos causados por los usuarios. La misi6n y los funcionarios del Gobierno concluyeron que estos objectivos son lo suficientemente claros, realistas e importantes para las estrategias del Gobierno en el Sector transporte. Logros de los obiectivos 3. El pr6stamo cuyo monto es de US$135 milones fue hecho para financiar un proyecto cuyo alcance representaba una parte importante del Programa de Conservacion de Carreteras en el periodo 1987-1991 y su fecha original de cierre era el 30 de junio de 1994. La implementacion del proyecto se caracteriz6 por tres periodos cuyas caracteristicas son las siguientes: o El periodo 1987-1990 en que el proyecto tuvo muy poca actividad y el desembolso del prestamo fue exiguo. Este periodo se caracteriz6 por reducciones en el presupuesto para atender la politica macroecon6mica del gobierno (Anexo 1), continuaci6n de las antiguas politicas tales como la ejecuci6n de los trabajos por administraci6n, y el deteriodo rapido de la red.  - 31 - o El periodo 1990-1992 en el que se contrataron y realizaron la mayorfa de las obras. Este periodo se caracteriz6 por el aumento en las asignaciones presupuesta.es y el desembolso de la 2/3 partes del pr6stamo (Anexo 2). o El periodo 1992-1994, di6 enfasis al desarrollo institucional y se caracteriz6 por la contratacion y desarrollo de la fase inicial de los sistemas para administraci6n de pavimentos (SISTER) y de puentes (SIPUMEX), asi como la elaboraci6n del estudio para la reorganizaci6n de la D.G.C.C. Durante este periodo tambien se prepar6 e implement6 un programa de capacitacion. 4. En t6rminos ffsicos al Programa 1987-1991, fue disefado en base a que el presupuesto de conservaci6n seria aumentado a partir de 1987 en un 75% y en adelante seguiria creciendo cerca del 10% en terminos reales. La red a atender tenia el 60% de su longitud en estado regular y 6% en estado malo. Sin embargo, debido a la politica macroecon6mica de ajuste adoptada por el Gobierno, los presupuestos de 1987, 1988 y 1989, alcanzaron solo un 60% de lo estimado inicialmente y el pr6stamo s6lo empez6o a usarse hacia finales de 1989. En consecuencia, la implementaci6n del proyecto sufri6 un retrazo de aproximadamente dos anios y medio. Este atrazo tuvo un impacto significativo en la condici6n de la red cuyo estado empeor6 significativamente y muchos de los sectores cuya condici6n era regular en 1987 pasaron a una condici6n mala, y los trabajos de reparacion costaron, 3 o 4 veces mis de lo previsto inicialmente; el resultado de todo esto fu6 una drastica reducci6n en los alcances fisicos del programa y del proyecto que de por si ya eran armbiciosos. Gracias al inter6s de la administraci6n (89-94) se adoptaron medidas, tales como la adopci6n de una estrategia para incrementar la contratacion de la conservaci6n en 1990, el aumento de la asignaci6n presupuestal (en mayo 1990) y la inclusion en le presupuesto de la partida de Credito Externo en 1989, que permitieron iniciar el proyecto y aumentar el interes de la DGCC por su imnplementacion. En resumen puede decirse que el aspecto fisico del proyecto tuvo un alcance modesto. 5. Los logros de los objectivos relacionados con los aspectos institucionales, en el parecer de los entrevistados, son satisfactorios. Los estudios financiados por el proyecto, para la administraci6n de Puentes y Pavimentos y para la reorganizaci6n administrativa de la DGCC, originaron cambios institutionales muy importantes que se est.n implementando con el apoyo del Proyecto de Rehabilitaci6n y Seguridad del Trafico (Prestamo 3628) y los programas de capacitaci6n financiados en ambos prestamos redundaron en mejores practicas para la conservaci6n de carreteras. Con respecto al sostenimiento o continuidad en los logros alcanzados, los directivos de la SCT manifestaron su optimismo ya que una vez institucionalizado el cambio es mAs dificil dar pie atris y lo que es mas importante estos cambios intitucionales tienen. el respaldo de la Gerencia de la SCT. 2  - 32 - 6. En relaci6n con el objectivo de promover la implementacion de polfticas adecuadas para la recuperaci6n de los costos causados por los usuarios y los compromisos manifestados en la carta de la SHCP del 25 de agosto de 1987 la misi6n solicit6 el envio al Banco lo antes posible de un informe actualizado sobre el estado de los ingresos por cargos a los usuarios (en paticular los vehiculos pesados) y de los gastos en conservaci6n y rehabilitacifn de carreteras. (Este compromiso fue confirmado en la carta del 25 de mayo de 1993 de los Subsecretarios de Infraestructura de la SCT y de Hacienda y Credito Publico). Dicho informe seria enviado al Banco antes del fin de abril de 1995. Comportamiento de la agencias involucradas en el Prgyecto 7. Este tema merece un poco mas de reflexi6n y las agencias involucradas, SHCP, BANOBRAS y SCT prefirieron abordarlo en el informe final de evaluaci6n. Sin embargo, hubo acuerdo en que la labor de equipo interagencial y con el Banco deberia hacerse mas facil. Con respecto al comportamiento del Banco, la misi6n recibi6 comentarios favorables de los funcionarios de la tres agencias mencionadas. Segiin ellos, ia presencia del Banco da una mejor orientaci6n t6cnica y administrativa de los programas de la DGCC, y ha servido para tener una mejor disciplina en los procesos de selecci6n y evaluaci6n de los proyectos y en la mejor preparaci6n y transparencia de la propuestas presupuestales. Tambien se he logrado una mejor conciencia en las esferas decisorias del Gobierno sobre los montos presupuestales para la conservaci6n de carreterea y las consecuencias de reducir su asignaci6n, lo que has redundado en los aumentos presupuestales de los ultimos afnos. El Banco, sin embargo, necesita adaptarse mas a la realidad de los pafses y ser mas flexible en sus requerimientos estrechos de selecci6n de proyectos en base a criterios puramente econ6micos y en los procesos de no objeciones durante los procesos de licitaci6n. Por tanto, se deben buscar mecanismos que agilicen mis el proceso de no objeciones, ya que de ordinario los tiempos son bastante apretados y la intervenci6n del Banco necesariamente alarga el proceso. Preparacion del informe final de evaluaci6n 8. En general la conclusion fue que el proyecto puede calificarse como satisfactorio ya que su objectivo principal de mejorar las praciticas de conservaci6n en la red federal se esta cumpliendo. Para la elaboraci6n de la constribuci6n del prestarario al informe final de evaluaci6n, el Banco prepar6 una guia que se adjunta en el Anexo 3. Ademas, se acordaron tentativamente los sectores de carretera para los cuales se actualizaria la evaluaci6n econ6mica e informacion de inventario a pie, asi como los trabajos de carpetas, renivelaciones y sellos ejecutados desde 1990 en dichos sectores (Anexo 4). El Anexo 5 muestra el estado de los componentes del proyecto al fm del periodo de implementaci6n. El informe final de evaluaci6n debera entregarse al Banco antes del 30 de abril de 1995. 3  - 33 - 9. La misi6n agradece la colaboraci6n de funcionarios del Gobierno que intervinieron durante la visita y a la administracifn en general por su gesti6n con el Banco durante este sexenio. ING. EEQUE PNLLA 18 de noviembre de 1994 4  - 34 - It PROYECTO REFORM fLACION ESTADO PRESLNE ORIG2SAL Asignadone del pr Smo (.Amexo 1 del Coovenia de 6U17/94 P~mo) ___ MDD S MD i DD 1) Reab. C=tL 60.40 39 100.0 60 basat lIL40 . ~~~~~~5/11/91 2) Rcbsb. haNItz 9.75 39 10.0 30 31pu ds 6.1S4 3) Ta&Ul 1.90 39 1.00 1.33 4) Cocoa, Equipo 30.0 100/6S 7.00 100/65 6.09 5) Rebab. EqWipo 5.50 100165 4.50 IC0/63 1.00 6) Bin.L Eureh. 0.35 100165 2.00 100/65 Q.36 7) Erami o 1.40 100 1.40 100 1.31 t) Servidos Coas. 2.50 100 5.00 lW 6.47 9) sin Asirtd 23.20 4.10 __ IOTAL 1ls.00 l3S.c0 _ 13;.0 E5timalivo de ARO JD 1'O bMD El desembolso 4 ocrubre 30, 1994 es de USS1L32-. Dcsembolso 68 I80 go 14 Mnilones jr sc espena qua presamo este totalzentis S9 1.91 60 desembdlsado para diciambre de 1994. .90 31.0 92 40 U^tu 1991 1992 1993 1989 11990 1 991 11992 [1993 ES I I I I PdondatesS (hoaz E I E C U T A D O Couservac50nt 42,000 kmtaAto 40000 |4,600W 46000 45000 45000 46000 |4600 47000 Sc103 -S,SX Jcmi'11f 2350 2500 25S00 C&TAS 3.500 hnta/do 3060 3ZS0 3250 9Si' 2700- 2425. 2130' 1886' Consetdcoa 4 Rcetes cons. 6C o ASL |o . . .i Rcpuacdtk de 270 puentcs/&ASo 119 125 125 41 79 67 214 120 IpucmLft .I. Ijucacia de 20 puewsafio _ 7 13 34 n7 _ _ ' Htnmca indica (A total de sellos. carpeas. I MUM20s.  - 35 - I 111 |x PROYECTO ORIGINAL REFORMULACION ESTADO PRESENTE. Progrma Multiaau. de Progra=a 1981-1991 Programa 1989-1993 El Prestamo prcddca=eMe flnaci6 Coo.setvacion el progrma 1989-1993. Ea 1994 se termin6 el progr=a de . ~~~~~~~~~~capacitacion. Programa de Conservacidf 7000 kms. de concreto - 6000 km. de carpeta Hasci dicie2bre 30 de 1993. se periddica de las carrermc.s asMlnica (capeca de 5 cma.) ufikicos do un tcutl de babLa termiado cerca de 6100 k | foderazs de un cocal de 18 _Okm. 13,900 Ja. de carpecas y SWloi &anciLLdos 9000 km. de sollas * 5000 kn. de sClos deatro del pr6stamo. El aots. aLfklzcos de un tocal de asfLldcos de ixa Cocal de correpondierte al progana fue de 43.,000 kL 12.100 km aproximad=enu 10.146 k=- -200 km. de rbtabilitacidl. y roeferzo de pavimeotos de uL toual do 418 ka. F~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Proga, de Contervacin, Progra-a incluye conservuaWiu Trabajos de conservaci6o. La SCT empez6 a cosr=car la Normal normal cn toda la red federL . normal por coatco. El couservacinnormal en 1989 y Banco pardcipa hbsca coninud hacCendolo tn 1990 y 1991. USSIS mi1lones. (1,721 km. ea 1989. 12.700 km. ea 1990 y 14,300 km in 1991). Ea l99_-94. sdlo so Ihas conmcado deteoi adas acdvidades. En base td esta expoenacia. la SCT esLi roevaluando su politica de conuzatci6n de la conservacidn. Repaxuci6a y Rebabilitccidn Reparacion y rehabilitaci6n do El progrmia de repauracifo. Hasit diciembre 30. 1993. se babfaa de Puentes aproximadamente 400 puente de roetirzos y r cbilibacidn reparado 338, con fliciamenro del un total de 950. comprmndeia 400 pueotes Banco do teu total de 521 puentes. de un total de 563. Coansrccida y - Progpua de coustr=cin y NiaDua Hasta diciombre 30. 1993. se haba Rehaiitacgn de Talle=s rebabMltai6 de alleros. ztabilitado 28 calers. Adquisicion de Equipo nievo Progrma de adquisift de Toniendo ea cu=ea la St ban adquirido vehiculos, equipo y de Repueztos, y Repanacioa Equipos y repufstos (costo total pol1ica de conntacido qu de ctetcomunicaciones. l1ants, do Equipo existenate TSS 42.3 mtlfon=s). Progpama eitf emplementado la SCT se5ales elericas, equipo de de reparaceioa de eqaipo y el increme=o de las lubricacion. y equipo de compnuto mediate contracto (US$9.67 obms, este componenre se con un costo aproximado de mill.) redujo srubstan=ialmenre USS108 millo=s. __ (USS 11 milones). Servicios de Consultoria Servicios relacionados con las Nlguna Se contLararon esomdios y servicios