Madagascar - Seventh Highway Project

 Seventh highway project Report No: ; Type: Report/Evaluation Memorandum ; Country: Madagascar; Region: Africa; Sector: Highways; Major Sector: Transportation; ProjectID: P001510 The Madagascar Seventh Highway Project, supported by Credit 1905-MAG for US$40 million, was approved in FY89. The credit was closed in FY95, two and a half years behind schedule. US$39.19 million was disbursed. At the time of appraisal co-financing in the amount of US$75.9 million was pledged by the African Development Bank and by European donors. The Borrower and other lenders/donors did not comment on the Implementation Completion Report (ICR) which was prepared by the Africa Regional Office. The project's objectives were to: (i) strengthen the Ministry of Public Works’ (MTP) capacity in policy formulation, planning, budgeting and supervision; (ii) facilitate agricultural development and reduce poverty; (iii) shift maintenance operations from the public to the private sector; (iv) develop human resources in the MTP and the domestic construction industry; (v) improve public expenditure programming in the road sector; (vi) improve road safety and enforcement of traffic regulations; and (vii) coordinate donor assistance. The overall project consisted of: (a) rehabilitation of 2000 km of roads and 1800 km of feeder roads; (b) routine maintenance of the entire public road network, approximately 15000 km; (c) development of domestic contractors; (d) training of sector personnel; (e) consulting services; and (f) a traffic safety program. The project’s physical and institutional objectives were overly ambitious and not realistically attainable in the project’s time span. Almost all the IDA funds available to the project were used, yet only 51 percent of the 980 km road rehabilitation that comprised the physical targets of the credit was achieved. The shortfall was primarily due to underestimation at appraisal of the scope and cost of works. The economic rate of return (ERR) –estimated at appraisal to range from 13 percent to 42 percent– was not re-estimated in the ICR. The poverty reduction objective was met insofar as the feeder roads used by farmers to market their output –approximately 300 km– were improved as planned. The programming of road sector expenditures did improve, but training to improve management in MTP did not. The development of private sector capabilities fell far short of the target. Instead, the construction capacity of the MTP was increased by the project –as agreed during appraisal– and by other donors active in the country. OED rates project outcome as marginally satisfactory, mainly because the feeder roads program was reasonably effective in meeting its objective of facilitating agricultural development. OED rates institutional development as modest, and sustainability as uncertain because a coherent plan for the future operation of the project is lacking and the planned road maintenance fund is not yet in operation. Bank performance is rated as satisfactory because strong supervision facilitated the successful implementation of a project whose quality at entry was unsatisfactory. The ICR rates institutional development as modest, but fails to provide other ratings. The project’s major lesson is that an institutional development program must be consistent with the implementing agency’s capacity and be based on the resolution of well-defined problems. For example, providing road maintenance equipment for the public sector while simultaneously attempting to promote private participation in road maintenance is inconsistent. The design of training programs should be commensurate with absorptive capacity and correspond to the work tasks of the participants. The ICR is unsatisfactory. Future operation of this project is not discussed satisfactorily; data on project costs and benefits –and not only what was done with IDA financing– are not presented. Overall, the ICR does not comply with the governing operational directive. An audit is planned.