Mozambique - First Roads and Coastal Shipping Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 20682 IMPLEMENTATION COMPLETION REPORT (23740) ON A CREDIT IN THE AMOUNT OF SDRs 54.1 MILLION (US$74.3 MILLION EQUIVALENT) TO THE REPUBLIC OF MOZAMBIQUE FORA FIRST ROADS AND COASTAL SHIPPING PROJECT June 29, 2000 Transport 1 Eastern and Southern Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective December 1999) Currency Unit = Mozambique Metical = US$ US$ I = 13,300 MT FISCAL YEAR January I to December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank ANE National Administration of Roads BADEA Arab Bank for Economic Development in Africa CCCE Caisse Centrale de Cooperation Economique (France) CFM Portos e Caminhos de Ferro de Mocambique DANIDA Danish International Development Agency DEP Provincial Department of Roads and Bridges, DNEP DfID Department for International Development (UK) DNA National Directorate of Customs DNEP National Directorate of Roads and Bridges DNM National Directorate of Maritime Affairs ECMEP Provincial State Enterprise for Construction and Maintenance of Roads and Bridges ESRP Economic and Social Rehabilitation Program EU European Union FINNIDA Finnish Intemational Development Agency FRP Feeder Roads Program GAPROMAR Bureau of Maritime Projects, MTC GOM Government of Mozambique IDA Intemational Development Association lIB Industrial Institute of Beira IIM Industrial Institute of Maputo INAV National Institute for Traffic Regulations KIfW Kreditanstalt fur Wiederaufbau (Germany) MTC Ministry of Transport and Communications MPF Ministry of Planning and Finance NAVIQUE State Navigation and Shipping Enterprise NORAD Norwegian Agency for Development RBMMP Roads and Bridges Management and Maintenance Program PDP Priority Districts Program RF Road Fund ROCS1 First Roads and Coastal Shipping Project ROCS2 Second Roads and Coastal Shipping Project SAFMAR Maritime Administration and Inspection Service SDC Swiss Development Cooperation SIDA Swedish Intemational Development Agency TA Technical Assistance UNCDF United Nations Capital Development Fund UNDP United Nations Development Program USAID United States Agency for Intemational Development UTRA Technical Unit for the Restructuring of Costums WFP World Food Program Vice President: Mr. Callisto Madavo Country Manager/Director: Mr. Michael Sarris Sector Manager/Director: Mr. Yusupha Crookes Task Team Leader/Task Manager: Mr. Abdelmoula Ghzala  FOR OFFICIAL USE ONLY MOZAMBIQUE FIRST ROADS AND COASTAL SHIPPING PROJECT IMPLEMENTATION COMPLETION REPORT CONTENTS Page No. 1. Project Data I 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 6 5. Major Factors Affecting Implementation and Outcome 14 6. Sustainability 16 7. Bank and Borrower Performance 17 8. Lessons Learned 19 9. Partner Comments 21 10. Additional Information 21 Annex 1. Key Performance Indicators/Log Frame Matrix 22 Annex 2. Project Costs and Financing 25 Annex 3. Economic Costs and Benefits 27 Annex 4. Bank Inputs 28 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 30 Annex 6. Ratings of Bank and Borrower Performance 31 Annex 7. List of Supporting Documents 32 Annex Borrower's contribution to the ICR 33 Map: IBRD No. 23129 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project D:. P001790 Project Name: FIRST ROADS AND COASTAL SHIPPING Team Leader: Abdelmoula M. Ghzala TL Unit: AFTT1 ICR Type: Core ICR Report Date: June 29, 2000 1. Project Data Name: FIRST ROADS AND COASTAL SHIPPING L/C/TF Number: 23740 Country/Department: MOZAM:BIQUE Region: Africa Regional Office Sector/subsector: TH - Highways; TP - Ports & Waterways KEY DATES Original Revised/Actual PCD: 05/08/90 Effective: 09/17/92 Appraisal: 08/27/91 MTR: 10/01/95 09/11/96 Approval: 06/02/92 Closing: 12/31/97 12/31/99 Borrower/lmplementingAgency: GOVT OF MOZAMBIQUE/DNEP/GAPROMAR/IJTRA Other Partners: AfDB, BADEA, DfID, EU, CCCE, KfW, NORAD. SDC, SIDA, UNCDF, UNDP, and WFP STAFF Current At Appraisal Vice President: Callisto E. Madavo Edward V.K. Jaycox Country Manager: Michael N. Sarris Stephen Denning Sector Manager: Yusupha B. Crookes Isaac K. Sam Team Leader at ICR: Abdelmoula M. Ghzala Carlos Alvarez ICR Primary Author: Ajay Kumar; Gualberto Lima Campos 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The First Roads and Coastal Shipping Project (ROCS 1) was identified as the first of two ROCS projects aimed at improving transport infrastructure and services through selective investments in rehabilitation and maintenance of key road and port facilities, and in increasing the capacity and efficiency of the trucking  and coastal shipping industries. ROCS 1 was to focus on laying the groundwork for future initiatives in the sector through the provision of extensive technical assistance and training to strengthen institutional capacity and the reformation of crucial GOM policies to improve efficiency in the transport sector, while the Second Roads and Coastal Shipping Project (ROCS2) was to include the implementation of road rehabilitation and maintenance of civil works. The original objectives of the ROCS1 as stated in the StafflAppraisal Report (SAR) were to: (i) provide sufficient qualified human resources (skilled, semi-skilled and managerial) to the roads and coastal shipping sub-sectors by financing the first phase of a long-term manpower development and training program for transport personnel, in order for the sector to meet the peace-time needs of the Mozambican economy; (ii) strengthen Government of Mozambique (GOM) institutions, state enterprises and newly forned local private companies involved in the roads and coastal shipping sub-sectors, encompassing the National Directorate of Roads and Bridges (DNEP), local road contractors (including the Provincial State Enterprises for Construction and Maintenance of Roads and Bridges (ECMPs), the National Directorate of Maritime Affairs (DNM), the Bureau of Maritime Projects (GAPROMAR), and new small-port operators, by providing technical assistance and training at all management levels to allow them to cost-effectively manage transport infrastructure and services; (iii) encourage and assist in implementing policy reforms necessary for effective management of national resources and increased involvement of the private sector in road rehabilitation and maintenance, small-port management, and the provision of adequate trucking and cabotage transport services; and (iv) support the Priority Districts Program (PDP) by removing transport-related obstacles that are hampering employment generation, alleviation of poverty, self sufficiency in food production, expansion of exports, and improvement in business mobility. 3.2 Revised Objective: Although the Development Credit Agreement (DCA) was amended three times (April 1993, August 1994 and March 1999), the original objectives were not changed. However, following the signing of a peace agreement in October 1992, soon after project effectiveness, the overall transport condition substantially changed in the country with the opening of the road network to traffic. The urgency to improve the efficiency of the coastal shipping sub-sector diminished because: (i) one of the main coastal shipping traffic, food aid, was substantially reduced; and (ii) many products started to be transported by road. As a result, coastal shipping transport reached its lowest volume in 1995. Confronted with this new enviromnent, GOM and the Bank agreed to adjust the project to changing circumstances by canceling some activities included in the Small Ports and Coastal Shipping Component and transferring the available funds to the existing or new activities in the Roads Component. 3.3 Original Components: The project was estimated to cost a total of US$144.7 million and planned for co-financing by Arab Bank for Economic Development in Africa (BADEA): US$6.1 million (4.2 percent); the European Union (EU): US$2.7 million (1.9 percent); the Caisse Centrale de Cooperation Economique (CCCE): US$2.6 million - 2 -  (1.8 percent); the Norwegian Agency for Development (NORAD): US$1.7 million (1.2 percent); the Swedish International Development Agency (SIDA): US$10.9 million (7.5 percent); the Swiss Development Cooperation (SDC): US$1.8 million (1.2 percent); the United Nations Development Program (UNDP): US$7.9 million (5.5 percent); the United Nations Capital Development Fund (UNCDF): US$2.5 million (1.7 percent); and other financiers including the Africa Development Bank (AfDB), the Danish International Development Agency (DANIDA), the Kreditanstalt fur Wiederaufbau (KfW), the South African Government, the Spanish Government and the United States Agency for International Development (USAID): US$13.3 million (9.2 percent). The contributions of the International Development Agency (IDA) and of the Government of Mozambique (GOM), estimated respectively at US$74.3 million and US$20.9 million, represented respectively 51.3 percent and 14.5 percent of initial Project costs. Originally, ROCS 1 comprised of a Roads Component and a Small Ports and Coastal Shipping Component. The Roads Component was managed by DNEP and included the following activities: (i) Institutional Support: technical assistance and training aimed at strengthening the planning and supervisory capabilities of DNEP, including its Provincial Departments of Roads and Bridges (DEPs), and enhancing the capacity of the parastatal ECMEPs, and studies in support of road transport; (ii) Manpower Development and Training: a five-year program for the training, retraining and upgrading of road personnel at all levels, and formulation and implementation of a program to develop local road contractors; (iii) Planning and Engineering Services: planning and engineering services including economic and feasibility studies for the rehabilitation or upgrading of 900 km of paved trunk roads and 140 km of earth/gravel roads to be executed under ROCS2, and the procurement and installation of about 850 m of temporary Bailey-type metallic bridges; (iv) Feeder Roads Program (FRP): rehabilitation and/or upgrading to engineered gravel standards predominantly by labor-intensive methods of about 2,600 km of feeder roads; The Small Ports and Coastal Shipping Component was managed by GAPROMAR and included the following activities: (i) Institutional Support and Policy Reform: technical assistance and studies to strengthening the planning and managing capability of DNM and GAPROMAR, review the coastal shipping regulatory framework, and assist in other priority areas; (ii) Manpower Development and Training: development of a comprehensive program for the training and upgrading of coastal shipping and small port personnel at all levels, including a selected staff of GAPROMAR; (iii) Credit Line: credit line to finance investments in small ports accessible to small-port operators managing concession agreements; (iv) Port Infrastructure and Shipping Investments: rehabilitation or upgrading of both marine and land infrastructure and installation of elementary navigational aids in various small ports, and rehabilitation of the coastal shipping industry; -3 -  (v) Customs and Trade Facilitation: development of a comprehensive program to strengthen and attract private sector participation in freight-forwarding, cargo handling, shipping agencies and transport internediaries, and technical assistance and support to the National Directorate of Customs (DNA) to review customs documents and procedures for domestic coastal-shipping transfers and international traffic. Component costs were initially estimated as follows: Project Cost Initial Estimates (US$ million) ComDonent Total Cost IIDACredit Roads 93.00 43.10 Institutional Support (TA and Studies) 30.10 36.00 Manpower Development and Training 28.20 3.10 Planning and Engineering Services 13.20 4.00 Feeder Roads 21.50 Small Ports and Coastal Shipping 25.80 14.70 Institutional Support (TA and Studies) 10.90 6.00 Manpower Development and Training 1.90 0.60 Credit Line Investments 6.50 5.80 Port and Shipping Investments 5.70 1.50 Customs and Trade Facilitation 0.80 0.80 Contingencies 25.90 16.50 Tntal 144.701 74.3 3.4 Revised Components: As mentioned above, during Project implementation the DCA was amended three times to adjust Project activities on both Roads, and Small Ports and Coastal Shipping components to the changing environment. The revisions included: (i) implementation of civil works for rehabilitation or new construction of the DNEP offices, the Industrial Institute of Maputo (IIM), the Industrial Institute of Beira (IIB) and the Road Training Center in Chimoio; (ii) implementation of an emergency roads program in the provinces of Cabo Delgado, Niassa and Nampula; (iii) provision of consultant services for technical studies in the roads and coastal shipping sectors; (iv) strengthening institutional capacity of the Ministry of Transport and Communications (MTC); (v) implementation of an emergency urban street repair program in the cities of Maputo, Quelimane and Nampula; (vi) cancellation of the credit line; and vii) cancellation of the port and shipping investnents. - 4 -  In addition, in 1994, following the establishment of a Custom Restructuring Technical Unit (UTRA) in the Ministry of Planning and Finance (MPF), the Customs and Trade Facilitation activity, which was under the Small Ports and Coastal Shipping Component, emerged as a separate Component managed directly by UTRA. The British Government, through the Department for International Development (DflD), as well as the World Food Program (WFP) joined the donor financial pool during Project implementation pledging to the financing of FRP. 3.5 Quality at Entry: In support of GONTs Economic and Social Rehabilitation Program (ESRP), the Roads and Coastal Shipping Program (ROCS) was initiated with the long term objective to remove transportation bottlenecks through rehabilitation of the transport infrastructure. The central underpinning of the Program was the Govemment's transport sector strategy, which was based on the Bank's Transport Sector Review, 1989 (Report No. 8656-MOZ). Considering the situation facing the country in 1992, it was necessary to have a program which would permit rapid resettlement of the population and agricultural activities. Weak implementation capacity, limited financial resources, lack of security in certain areas and uncertainty of how the economy would develop at the commencement of the project dictated project design with a concentration on addressing the most urgent needs of roads and coastal shipping improvements. Given the postwar situation of Mozambique in 1992, project size and design were overall suitable to support maintaining the country's integrity. Project Design. Initially, ROCS was designed to address both institutional reform issues and physical investments. During preparation, ROCS was divided into two separate projects: (i) ROCSI addressed the severe lack of institutional capacity in the transport sector by launching the first phase of a long range institutional development program with a focus on building capacity to manage the transport system effectively over the next decade and into the 21st century; and (ii) ROCS2, focused on the physical implementation of the road rehabilitation and maintenance program. This was an appropriate approach as it allowed gradual build up of the imnplementation capacity. The project also included review of the Government's Roads Policy as well as institutional structures of the various organizations responsible for the management and control of the road network. Basic objective of ROCS1 was to focus on laying the groundwork for future initiatives in the sector through the provision of extensive technical assistance to strengthen institutional capacity and reform crucial GOM policies to improve efficiency in the transport sector and provide reasonable assurance that rehabilitation investments will be properly maintained. The preparation under ROCS1 has led to appraisal and commencement of ROCS2, which includes a US$750 million civil works program. Project Size. In order to improve allocation of limited resources and to ensure that no critical bottlenecks are left unresolved, ROCSl was designed with an integrated sub-sectoral programmatic approach, focusing on: (i) capital investments primarily for rehabilitation of local feeder roads serving priority agriculture production areas and badly deteriorated sections of the main roads leading to key coastal areas; (ii) policy reformns directed to attaining greater efficiency in the transport sector through increased private participation and improvement of transport pricing and asset utilization to ensure commercial viability of transport enterprises. A simpler approach, focusing on limited institution building would not have been sustainable given the special challenges presented by the roads sector in the early 90s. The adopted integrated approach addressing multi-faceted issues facing the sector, even though complex and requiring . 5 .  substantial technical support was appropriate and acceptable to the Government. Technical Assistance. The severe lack of institutional capacity at the commencement of this Project necessitated the use of intensive Technical Assistance (TA) to provide and develop capacity to the various institutions responsible for maintenance and management of the road network. The Project also included the first phase of a 15 year long range institutional development program to build capacity and facilitate recovery of the road sector. One of the principal means of both providing and developing institutional capacity was by the assignment of TA to the various institutions responsible for the maintenance and management of the road network. The high TA components was justified in light of the lack of institutional capacity to implement the project and the speed of rehabilitation required. A reduced technical assistance would have implied not developing a comprehensive reform agenda which, in turn, would have reduced the rate of recovery. The quality of the Project at entry is assessed as Satisfactory. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: As a result of the somewhat parallel preparation/implementation of the two ROCS projects, it is often not easy to isolate specific achievements of ROCS1, especially in the areas of policy support and institutional building. In addition, the thinking and experience in the areas of institutional requirements for a sustainable road sector and road financing for maintenance and rehabilitation has evolved over the years. This makes it important to measure the performance of ROCS 1 against the agreed targets at the time of appraisal, while at the same time focus on identifying future interventions with the objective of strengthening the country's capacity to manage and administer the road sector more efficiently. The First Roads and Coastal Shipping Project (ROCS 1) was adequately carried out and the outcome of the Project is assessed as Satisfactory since the overall Project objectives were achieved. Although no monitoring indicators are available to measure quantitatively the impact of the Project, it is amply recognized that the Project contributed substantially to improving the efficiency of the transport sector by addressing the severe lack of institutional capacity in two main transport sector institutions (the National Administration of Roads (ANE) and MTC) and reforming crucial GOM transport policies. Both institutions are working efficiently and staff is today more confident, professionally accountable and enthusiastic. In addition, through the rehabilitation of basic transport infrastructure in selected priority districts included in FRP, the Project contributed to removing transportation bottlenecks in agricultural production and distribution. In doing so, the Project helped to alleviate poverty and hunger by: (i) allowing war refugees to resettle, (ii) increasing employment, (iii) increasing food supply, (iv) reducing the cost of food and (v) improving rural incomes. Achievement of the four Project objectives is detailed below: (i) Developing human resource capacity. This objective was Satisfactory achieved. The non-availability of adequate and trained human resources was one of the most critical issues facing the transport sector at the commencement of this Project. Overall, programs for training of roads and coastal shipping and small port personnel and development of local contractors were adequately carried out and contributed to substantial improvement of local technical capacity. Key achievements include: -6 -  * at the time of project preparation, human resources in DNEP were extremely scarce (a total of 3 qualified engineers and 15 technicians of various levels). During the course of project implementation, 114 engineers and other technical specialists have been trained at the University Eduardo Mondlane (UEM) in Mozambique and universities abroad; * over the project life, international technical specialists were being substituted by national specialists: at the beginning of project, DNEP was supported by 40 international technical specialists and three national qualified engineers; at the end of project, the support changed to five and 57 specialists, respectively; * particularly successful was the development of the Roads Technical Training Center (CTE) in Chimoio which at Project completion had already trained more than 9,600 people from DNEP, DEPs, ECMEPs and local contractors; * development of human resources at MTC was quite successful as 18 staff members got a BA in transport economics from a South African University (eight more to complete by July 2000), a specialty not available in the Ministry at the beginning of Project implementation. * implementation of programming, monitoring and managerial procedures in DNEP and DEPs increased the ability to manage the road network in an efficient manner and contributed to the gradual development of local contractors. (ii) Strengthening institutional capacity This objective was Satisfactory achieved. (see section 4.5) (iii) Implementing policy reforms The achievement of this objective was also Satisfactory, with good progress in restructuring and liberalization of the road transport and coastal shipping sectors and devolution of public assets to the private sector. Major achievements include: Small Ports and Coastal Shipping * preparation of a transport policy by MTC which was approved by the Counsel of Ministers in April 1996. According to this policy, GOM wishes to call on the contribution of the private capital for the building and/or rehabilitation of infrastructure, for the management, through contract or leasing agreement of ports, railway services and airports and for the establishment of air and shipping transport companies. MTC is considerably reformed and now plays a role of facilitator, having the responsibility of defining policies and creating enabling environments for the private sector and monitoring transport activities in the country; * restructuring of coastal shipping companies owned by GOM and adoption of a policy allowing full private-sector access to the coastal shipping feeder market; * privatization of transport infrastructure management in ports, railways and airports. * restructuring of the National Directorate of Civil Aviation (DNAC) and creation of the National Institute of Civil Aviation (INAC), commissioning for air traffic rights and proposal for leased management of secondary airports; * preparation of institutional arrangements for long-term leasing/concessioning with the objective of eventual privatization of the management of secondary and tertiary ports; * establishment of minibus cooperatives to operate along specific corridors in Maputo city. Roads * approval by GOM of a Roads Policy, which sets the stage for creating a new environment for effective - 7 -  management and maintenance of the country's road network; * DNEP's capacity to manage and maintain the road network has increased significantly. Between 1994 and 2000, percentage of roads in poor condition has decreased from 81% to 46% and those in fair to good conditions has increased from 19% to 54% (this information does not reflect the impact on the road network offloods caused by cyclone Eline in February 2000); * development and implementation of an improved Road Maintenance Management System (RMMS), including: (i) calibration and validation of HDM-3; (ii) survey of all roads and bridges at provincial level; (iii) review of road links for consistency; (iv) set up a special unit in DNEP with capacity for road programming based on Mapinfo; * divestiture of own-account trucking fleet by state-owned enterprises; * adoption of policy measures to encourage the development of private sector maintenance and repair workshop capacity, resulting in maintenance works being carried out on a commercial basis with greater emphasis on supervisory and managerial responsibilities of DEP construction supervisors; * use of labor-based technology for rehabilitation of low-volume roads is now defined as a key part of the Roads Policy. Labor-based technology has proved to be a practical, sustainable and economic approach for rehabilitation and maintenance of low traffic volume roads; * provision of job opportunities for women formed an important part of the social component of the feeder roads program. Customs 3 restructuring of customs operations followed by adequate staff training and implementation of new procedures resulted in improved collection performance. Import duty rates of collection increased from six percent in 1996 to eleven percent in 1999. (iv) Supporting PDPs This objective was Substantially achieved. The Project supported PDPs, through the rehabilitation of an extensive network of feeder roads all over the country, which contributed to reducing transport bottlenecks. It is difficult to assess the specific impact of FRP as the Program was imnplemented at a time when Mozambique was consolidating economic reforms and overall benefiting from the implementation of the peace agreements. Nevertheless, the nature of the works supported by FRP, as well as the timing for its implementation, have reinforced the combined effects of the economic reforms and the peace process and have undoubtedly contributed to sustain economic growth and improve poverty indicators. By overcoming the isolation of rural areas, the Feeder Roads Program (FRP) had a beneficial impact on the rural poor, since it facilitated small farmer access to markets and reduced the cost of providing basic needs to consumers. FRP also coritributed to the expansion of exporting crops and improved small business mobility. In 1997 and 1998 Mozambique agriculture output increased by 7.6% and 7.0% respectively. 4.2 Outputs by components: Roads Component Technical Assistance Programs. One of the principal means of providing and developing institutional capacity was by providing technical assistance to the various institutions responsible for maintenance of the road network. A number of TA programs were implemented to support: (i) DNEP at headquarters and the provinces (DEPs); (ii) FRP maintenance; (iii) establishing a self sustaining training facility; and (iv) developing capacity of local road contractors. All TA programs accounted for a total of about 1,700 staff-months. Final cost of TA activities (including - 8 -  studies) was US$52.3 million. Overall, the TA programs were adequately designed and implemented. A Technology Transfer Program (TTP) was implemented to monitor the transfer of skills from foreign consultants. Consultants and their counterparts were requested to jointly develop work plans, describing the work tasks and the related group of skills necessary to perform the tasks, rate current skill levels and propose skill improvement methods. All TA experts had to provide quarterly reports and report on knowledge and responsibility transfer. A total of 356 reports were submitted and about 100 identified counterparts benefited from technological transfer. Studies: A number of studies were carried out under the Project, resulting in: (i) road policy paper prepared by MOPH, grounded in the concept of commercialization management of roads; (ii) restructuring of DNEP; (iii) restructuring of ECMEPs to be operated along commercial lines; (iv) arrangements to set up privately owned plant equipment and rental companies; (v) CETA Privatization Study; (vi) developing Environmental Guidelines for Road Works; (vii) studies on Social and Economic Impact of the Implementation of Roads Civil Works; (viii) studies on AIDS Prevention on Road Works. The Project also resulted in preparation of final design and tender documents for high-priority sub-components, to be implemented in follow-up project, and included: (i) feasibility studies for a total of 2040 km of roads; (ii) engineering detailed design for 2,392 km of roads; (iii) bridge inspection studies (Tete, Xai-Xai, Save); and (iv) design standards and standard specification for roads and bridges in Mozambique. Manpower Development and Training. A Human Resources Development and Training Program was designed and carried out in DNEP. Under this program, DNEP: (i) created a Training Division with the objective to formulate, implement and coordinate all training activities in the road sector, (ii) rehabilitated and developed CTE in the central town of Chimoio to train, retrain and upgrade foremen, supervisors and technicians, and (iii) set up Road and Mechanical Training Production Units for mobile practical training activities. One of the most cost effective capacity building and retaining program was the establishment of a scholarship program at UEM, which combined work with studies in the areas of transport economics and planning. To accomplish the training duties, DNEP contracted a ten TA staff team accounting for 360 staff/months. The Training Program was carried out through: (i) short courses and workshops at CTE; (ii) specific workshops on management and various technical subjects at DNEP headquarters; (iii) transfer of know-how to designated counterparts; (iv) large scale training-by-doing on the job. In addition, the Project granted 114 scholarships for academic studies abroad and at the local University in different technical fields. Also, over 110 participants attended English language courses. The Training Program applied to all personnel categories from top management to support staff and covered DNEP, DEPs, ECMEPs as well as the local contractors. Overall, the Training Program was adequately carried out and contributed to substantial improvement of technical skills of roads staff. In particular, many counterparts feel today more confident and enthusiastic, and have been appointed to high positions in the road sector administration. Initial estimates for personnel to be trained were largely exceeded since as many as about 11,500 road workers were trained, of which 9,600 were at the CTE, instead of 3,500 foreseen in the SAR. Development of DEP Laboratories. The rehabilitation and development of ten soil laboratories, one in each Mozambique Province, was carried out under the TA to DEPs. All ten laboratories have been adequately equipped and effective training provided to all staff. However, at Project completion the laboratories were operating at different levels of efficiency. To standardize procedures and specifications a Laboratory Operations Manual (LOM) was developed. This manual includes all the procedures for the day to day running of the laboratory, requisition, testing and report forms, materials classification, standards and specifications as well as testing standards. A Materials Management System (MMS) was also prepared and implemented at the same time as LOM. Computers and Management System. Under Project financing, DNEP procured over 100 computers and -9-  related software and equipment. Computerization has greatly contributed to enhance the capacity of DNEP and provincial DEPs to handle information and project administration. A Roads Management System (RMS) comprising of a wide range of modules was also installed. RMS is today the main tool used by ANE in monitoring the road network and planning the operations. The system manages different data banks such as the network data bank, the surveyed road conditions data bank, the traffic data bank, the bridges data bank and the planning data bank. Bailley Type Bridges. The Project fnance the acquisition and installation of over 100 metallic Bailey-type bridges representing a total of 2,806 m of bridge installed. These temporary bridges allowed a rapid reinstatement of river crossings throughout the country on the aftermath of the peace accords. Emergency Road Works in Cabo Delgado Province. Given the calamitous situation in which most of the road network was at the beginning of the Project, it was designed a Program of emergency reopening of roads aiming at facilitating a rapid resettlement of the population and resuming the agricultural activities. This Program did not require feasibility studies and detailed design, and was financed under both ROCS I and ROCS2 Projects. A total of 280 km of roads in Cabo Delgado Province were repaired under ROCS I financing. The works included repair of potholes, resurfacing on surfaced roads and regravelling, and construction of site drains on unsurfaced roads. These works covered also the instalation of Bailey-type bridges. The emergency program allowed the immediate reopening of many roads across Mozambique at the time when the peace process had started to be implemented and civil-war refugees begun to resettle in remote areas. Emergency Urban Street Repair Program. This Program was identified and carried out during the last year of Project implementation. The pavement of the vast majority of streets in the main urban centers were in poor condition and if these works would have not been implemented at that time, there would have been economic loses due to increased vehicle operation costs as well as the costs of rehabilitation would have gone up due to further deterioration. Emergency urban street repair and rehabilitation works were undertaken on 160 km in Maputo, 25 km in Nampula and 20 km in Quelimane. The works included patching of potholes and edge works, resealing road, regravelling of gravel roads, repair drainage structures, spot improvements, walkway cleaning and clearing of drains. The Feeder Road Program. During Project implementation the FRP rehabilitated more than 3,500 km and maintained more than 2,000 km of roads, which exceeds largely initial SAR estimates of 2,400 km. The FRP used primarily labor-based technologies to rehabilitate and maintain earth and gravel roads. These technologies proved to be a practical, sustainable and economical method for the rehabilitation and maintenance of low volume roads in areas of high population density. In addition to the physical outputs, the program has various other positive impacts: * creation of substantial numbers of unskilled jobs for the rural population (more than 6,000 in 1997, over 7,800 in 1998 and over 7,000 in 1999), 15 percent of which were occupied by women; * adoption by Mozambican companies of feeder-road-maintenance techniques appropriate to local conditions; companies now operate with minimal technical support; * adoption by GOM of labor-based technology for the rehabilitation of roads with low traffic volumes as a key element of road policy. A mid-term evaluation of the program carried out in 1998 concluded that overall FRP performance was satisfactory. Roads were being rehabilitated and maintained, local capacity to manage and execute the program was being developed and FRP was bringing significant positive benefits to rural areas. However, the report raised doubts about the sustainability of FRP beyond 2000 if further reforms were not introduced - 10-  in the management and financing of the operation including restructuring the ECMEPs, increasing the involvement of local contractors and reforming DNEP and the FRP management unit. FRP was entirely financed by various donors other than IDA, including DflD, KfW, SIDA, UNDP, UNCDF and SDC, and GOM. WFP also contributed to the Program under a food-for-work program estimated at US$1.1 million. Final FRP costs reached US$68.3 million, which more than tripled initial estimates of US$21.5 million as donors increased their contributions for the rehabilitation and maintenance of a greater amount of road km. Civil Works. The Project financed the rehabilitation and expansion of DNEP offices, the construction of eight residential flats in Maputo and four houses in Chimoio to alleviate housing needs of expatriate personnel, the rehabilitation of CTE and the rehabilitation of classrooms in IIM for the use of DNEP. All offices, houses and classrooms were also adequately equipped. Small Ports and Coastal Shipping. Technical Assistance Programs. A number of TA programs were implemented to support: * Strengthening of the planing and management capabilities of DNM/GAPROMAR * Restructuring of NA VIQUE - Developing and implementing a training program for MTC 3 Restructuring of air transport 3 Implementing cooperatives for minibuses 3 Setting-up a new Ports and Shipping Directorate TA short term programs were also undertaken for preparing or up-dating bidding documents, and up-dating economic and financial feasibility studies regarding the rehabilitation of tertiary ports. Studies. A number of studies were carried out to examine issues related to privatization, concessioning arrangements, legislative reforms and safety regulations in the areas of: trucking, road transport industry, civil aviation, tertiary ports, transport infrastructure and services and ports and shipping. Manpower Development and Training. The project financed a comprehensive program for the training and upgrading of selected staff of MTC Directorates and Institutes including: (i) the National Directorate of Ports and Shipping (DNMP); (ii) the National Directorate for Civil Aviation (DNAC); the Road Transport Safety Institute (INAV); and the Economic Directorate. The Training Program was carried out through: (i) seminars and Workshops on project management and transport related subjects; (ii) study tours abroad; (iii) transfer of know-how to designated counterparts; (iv) large scale training-by-doing on the job. In addition the Project granted 26 scholarships for academic studies in transport economics at the Rand Afrikaans University in South Africa and a six-month fellowship for a training in civil aviation in the United Kingdom. Also, the project supported a comprehensive training in English language for a large part of MTC staff in Mozambique and South Africa. Overall, the Training Program was adequately carried out and contributed to substantial improvement of technical skills of MTC staff. A total of about 200 participants benefited from the training program which is in line with initial estimates. Customs and Trade Facilitation This component was implemented by the Technical Unit for the Restructuring of Customs (UTRA) of the Ministry of Planing and Finance (MPF) and jointly supervised by teams of ROCS 1 and of two economic adjustment operations (Third Economic Recovery Credit and Economic Management Reform Operation). - 11 -  ROCS 1 financed TA to assist UTRA in the restructuring process, training for customs staff, equipment for UTRA as well as the services of a specialized private company that was hired to manage customs for a period of three years. UTRA had a central role in monitoring and steering the customs reform process in Mozambique since 1996. Its activities focused on three main areas: (i) conducting the process of hiring and monitoring the performance of the specialized customs management company; (ii) hiring and monitoring performance of a pre-shipment inspection company; and (iii) drafting the legislation necessary to modernize customs policies and procedures. In addition, it implemented the new customs code (import tariff). The customs reform focused on the rationalization of the import tariff which reduced trade-weighted import duties from 18 to 11 percent and the number of rate categories from seven to five. Despite the decline in statutory rates, the tax base increased and the collection rates improved from less than six percent in 1996 to around eleven percent in 1999 according to information provided by the authorities. In addition, a new simplified importers registration system was adopted, as the previous cumbersome import documentation was replaced with a Single Administrative Document (Documento Unico). As a result, the elapsed time for processing of import documentation was reduced from the previous three to four weeks to a maximum of 48 hours, lowering transaction costs and increasing the transparency of the import process. These improvements in the tax and import regime supported by improvements in customs administration yielded an increase in the efficiency and transparency of a key government office. However, despite the remarkable progress, corruption is still a worrying feature that will continue to require special GOM attention and that will entail actions beyond customs, such as the police, the legal and the judicial systems. In addition, while UTRA's work has been critical in improving the efficiency, transparency, and operations of customs operations in Mozambique, it still suffers from capacity and organizational weaknesses. 4.3 Net Present Value/Economic rate of return: The SAR presented economic analysis for the coastal shipping investments and the feeder roads program. The economic re-evaluation is conducted only for the feeder roads program as the investments in coastal shipping were dropped during implementation (see section 3.4). The economic re-evaluation for the project was undertaken following the same methodology as used in the SAR. All assumptions and key parameters adopted at appraisal were applied in the economic re-evaluation. Detailed economic analysis in the SAR for the Maxixe-Homoine road estimated an ERR of 174%. Economic re-evaluation on the same section of the road produces an ERR of 47%. This is considerably lower than at appraisal for two reasons: (i) the costs of rehabilitation and maintenance were understated in the SAR; (ii) traffic volumes were overstated in the SAR. The ex-post ERR for the project, however, is well above 12%. 4.4 Financial rate ofreturn: Not applicable 4.5 Institutional development impact: Given the magnitude of problems facing the roads and coastal shipping sectors at the time of project preparation, the Project has come a long way in building local capacity, strengthening institutional framework and most importantly, raising awareness on the need to develop mechanisms to provide dedicated and adequate funding for road maintenance. The Project resulted in reviewing institutional structures of the various organizations responsible for the management of the sector and reaching agreements on the most appropriate structure to be put in place. The Project had a significant impact in - 12 -  terms of institutional development particularly on the following institutions: ANE (former DNEP including DEPs), MTC and UTRA (MPF). One of the Project agreements was to "implement an appropriate organization for DNEP and for the provincial supervisory and executing entities (DEP/ECMEP) with adequate staffing." Following an institutional study of DNEP, the Project has made considerable progress in reforming the institutional structure. An autonomous Road Authority has been created (ANE) with the responsibility for maintenance and management of the road system. The Board of ANE has been appointed with the responsibility for national roads, regional roads, road fund and administration. The new structure represents a major step forward in the reform process, well beyond what was agreed to as part of the Project Agreements in 1992. New guidelines and monitoring procedures have been introduced particularly in the areas of procurement, contract management, data collection, contract supervision and maintenance control. ANE is today increasingly being supported by national instead of international specialists. However, the reform process is far from complete. A number of outstanding issues, specifically related to internal regulations governing the Road Fund to improve transparency and accountability and roles and functions of the Board, continue to be discussed as part of the on-going ROCS2 under implementation and preparation of the third roads project, Roads and Bridges Management and Maintenance Program (RBMMP). A study was commissioned to examine the most appropriate institutional structure for the management and operation of the Government owned and controlled Provincial State Enterprise for Construction and Maintenance of Roads and Bridges (ECMEP). GOM implemented study recommendations as ten provincial-based organizations were consolidated into three regional companies (SARLs), under public ownership but each having an independent management board (rather than falling under the Ministry of Public Works and Housing) with clear mandates to operate with commercial objectives. The plant pool study examined the most economic method of providing the local construction and maintenance industry with operational and well maintained earthmoving equipment. The study recommended forming privately owned plant equipment and rental companies (PERCs). Such equipment rental companies are in the process of being set up in each of the three regions though there has been a long delay and the arrangements are not fully satisfactory. GOM has embarked on the creation of a viable, competitive local road construction industry which has been identified as an essential component towards continuing and sustainable development and maintenance of road infrastructure. To facilitate this, a Contractor Development Teams (CDT) project was conceived, as part of the ROCS project, with the objective to develop institutional capacity in the country by means of a practical program of civil Works, involving maintenance of priority roads. The restructuring and liberalization of the road transport sector has mostly been achieved with the privatization of transport companies and the setting up of joint ventures with the private sector, approval of new regulations, signing of road protocols with SATC neighboring countries and creation of a trade point to be managed by the Road Transport Committee created under the project. Urban transport was also restructured through assistance to establish cooperatives and regulating routes in Maputo. MTC is gradually implementing the new transport policy adopted in 1996, focusing inter alia on the privatization of management of transport services, liberalization and greater involvement of the private sector. To this effect, the Ministry has been restructured with the objective of a leaner more professional staffing and responsibilities focusing on policy making, sector monitoring, regulatory procedures and regulations enforcement. In addition, studies are on going to establish institutional arrangements and procedures for long-term leasing/concessioning and regulations to better monitor the sector. As part of the - 13-  comprehensive restructuring program, the internal structure of MTC has been modified, with the setting up of new National Directorates, such as the new Directorate for Shipping and Ports, the Directorate for Land Transport (covering rail and road transport) and the Economics Directorate. The restructuring of coastal shipping and maritime transport is also well advanced with new regulations, management contracts for NAVIQUE and TRANSINSULAR, the creation of the National Maritime Administration (SAFMAR) and liberalization of stevedoring activities. Major reforms are also being finalized regarding ports and railways with the restructuring and concessioning of CFM and contracts for the management of secondary ports of Pebane, Macuse and Mocimboa da Praia, with a decision to extend the process to other ports. Customs restructuring is progressing well with significant results in collection performance, staff training and implementation of new procedures. In 1994, the Portos e Caminhos de Ferro de Mocambique (CFM) was transformed into an independent, financially autonomous company. More recently, all responsibilities related to maritime safety and ships inspection were transferred from the National Directorate for Maritime Affairs (DNM) to SAFMAR, an independent public agency. The responsibility for road safety, issuing of driving licenses and the registration of vehicles were transferred from the National Directorate for Road Transport (DNTR) to the National Institute for Traffic Regulation (INAV), an independent agency that should also soon become financially autonomous. Recently, the Council of Ministers approved the transformation of ADM, agency responsible for the management of primary and secondary airports of the country, into an independent, financially autonomous agency. MTC has up-dated all air safety regulations and has started the process to create an independent institute responsible for air transport safety. MTC has started restructuring its Provincial Directorates and is in the process of setting up corridor authorities for the development of the corridors of Maputo, Beira and Nacala. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: Although at different Project stages the Bank has attempted to coordinate the fourteen Project donors, this was a very difficult task to implement. Some donors tended to consider their financed components as individual projects and were not focused on the broad objectives of the Project. As an example, transformation of ECMEPs as commercial contractors was substantially delayed because copious funds and equipment were made available by different donors to carry out feeder road works on force account basis. Also, road sector institutional reforms were constantly deferred, in part because of the delays in developing a common strategy among the Bank, various donors and GOM. 5.2 Factors generally subjeci to government control: No acceptable level of agreement has been reached with regard to sufficient overall funding levels in the long-term and transparent mechanisms to channel funds to the Road Fund. Funding remains a most serious implementation issue as the agreement with MPF to maintenance funding levels up to year 2000 is still not fully complied with, despite the Bank's increase of its funding share of periodic maintenance, which only provides a short term relief. A significant increase in Govemments funding for maintenance is critical as most roads rehabilitated or reopened early during the road program will need routine and later on periodic maintenance. Delays in approval mechanism from MPF with regards to counterpart funding on roads and expenditure levels for all procurement processes would impact sustainability of project investments. This is an issue involving a number of Ministries and has an adverse impact on: (i) development of small contractors (delayed approval of contracts and payments); (ii) decentralization of RF and the direct transfer of road user charges into the RF. A delayed transfer into the RF means delayed payment for small - 14 -  contractors who are being promoted under the LRCI and this weakens their ability to survive. Overall progress was jeopardized by delays in taking a final decision regarding the extent and funding of the ROCS program and its impact on DNEP's ability to carry out routine maintenance, development of local contractors, the general implementation of road program due to central lack and unreliable flow of counterpart funds and sustainability of future maintenance. Although decrees establishing the new Roads Authority, ANE, have been passed since April, 1999, policy reforms regarding the organizational restructuring of the road sector are still not finalized (internal regulations). There is a concern with the approved decree establishing ANE, concentrating powers within MOPH, and creating a parastatal with potential conflict of interest (custody of RF and execution in the same entity ANE) and lack of transparency and accountability. 5.3 Factors generally subject to implementing agency control: MTC implemented ROCS 1 project through GAPROMAR. At the beginning of the project, GAPROMAR acted as an independent body and the various National Directorates of the MTC were not always fully informed of the project activities. Once this was recognized, GAPROMAR offices were moved to the MTC headquarters, regular memorandum were published and it maintained close dialogue with all parties concerned with the project. Accounting and Auditing. The management of Special Accounts was Satisfactory. Separate audit reports were prepared for each Project component and quarterly financial statements were produced. GAPROMAR produced a Monthly Activities Report and operated a Contracts Register on a manual basis. Considering the lack of financial capacity in the agency at the beginning of Project implementation, audited accounts reveal satisfactory management of resources. However, the Project did not have a Financial Management Procedures Manual and a conventional cash flow management system, and a Cash Flow Statement (CFS) should have been prepared as an integral part of the Project's Financial Statements in compliance with International Accounting Standard Number 7. One of the important issues in ensuring adequacy and stability in road maintenance financing is the transparency in the management of the Road Fund. Although auditing of Road Fund accounts was not envisaged as part of Project agreements, this remains an important issue to be addressed, especially as part of future preparation activities. Independent review of the Project In June 1998, following some adverse local press reviews and criticism within some government circles concerning the ROCS Projects, GOM and the Bank agreed to carry out an independent, joint review of the performance of both projects with the objective to: (i) assess the relevance and effectiveness of the ROCS projects in meeting its objectives; (ii) identify key changes to the scope of the projects and approaches to the resolution of critical technical and financial issues; and (iii) draw lessons from the projects for the design, implementation and processing of future projects. After a careful review of facts and information collected, the review team concluded that: (i) with exception to the size of ROCS2, the choices in designing the projects were appropriate; (ii) supervision missions were well documented and both projects have been carefully supervised by the Bank; (iii) all parties have shown flexibility and responsiveness during implementation in adapting the projects to changing and unaticipated developments; and (iv) coordination among donors and financing agencies could be improved. - 15 -  5 4 Costs andfinancing: The Project was implemented within the financial package as agreed in DCA. As shown in Annex 2, the final Project cost was US$188.5 million which represented 130 percent of the initial estimate. The increase in Project cost was mainly due to FRP activity since two new donors joined the financing pool during Project implementation and existing donors increased their contributions. IDA-Credit disbursements accounted for a total of US$72.5 million, representing 98 percent of the total credit amount. IDA contribution represented 38.5 percent of Project financing. Other donors' Project financing was as follows: AfDB: US$6.2 million (3.3 percent); BADEA: US$2.5 million (1.3 percent); DfID: US$9.5 million (5.0 percent); EU: US$3.9 million (2.1 percent); KfW: US$24.3 million (12.9 percent); CCCE: US$4.0 million (2.1 percent); NORAD: US$2.6 million (1.4 percent); SIDA: US$18.5 million (9.8 percent); SDC: US$0.8 million (0.4 percent); UNDP: US$7.6 million (4.0 percent); UNCDF: US$7.5 million (4.0 percent); ); and WFP: US$1.1 million (0.6 percent). GOM contribution was US$27.5 million accounting for 14.6 percent of the Project cost. The life of the Project was initially set at six years. The credit closing date was extended twice, first from June 30, 1998 to June 30, 1999, which was further extended a second time to December 31, 1999. This was to allow the Borrower to carry out remaining activities including the road sector institutional reforms and customs restructuring as well as new activities introduced through the third Project Amendment such as the Emergency Urban Streets Repairs in the cities of Maputo, Quelimane and Nampula. 6. Sustainability 6.1 Rationale for sustainability rating: Sustainability is likely. This is because of the specific focus of the project on: (i) capacity building; (ii) strengthening institutional framework; and (iii) implementing policy reforms. The improvement in ANE (formerly DNEP) capacity has been across the board - both at the head office in Maputo as well as throughout the provinces and has been achieved by training of about 12,000 individuals and equipping of their respective departments. ANE is today increasingly being supported by national instead of international specialists. About 200 staff members of MTC have also been adequately trained including providing a degree in transport economics to 18 persons. MTC is considerably reformed and now plays a role of facilitator, having the responsibility of defining policies and creating enabling environments for the private sector and monitoring transport activities. The Government has made good progress in restructuring and liberalization of the road transport and coastal shipping sectors and devolution of public assets to the private sector. The Government has adopted a Roads Policy which creates a new environment for effective management and maintenance of the Mozambican road network. Increasing use is made of labor-based technology, which has proved to be a practical, sustainable and economic approach for rehabilitation and maintenance of low traffic volume roads. Monitoring and implementation procedures have been developed, especially related to: procurement guidelines, contract management, laboratory strengthening, civil work guidelines and data management. The private sector has emerged as a provider of transport services, consulting, construction of civil works and maintenance. The new sector organization framework has gained acceptance and the new management concepts are being adopted. The Project laid the ground work for ROCS2, currently under implementation - 16 -  and a third roads project, RBMMP, is currently being prepared, to carry forward the institutional and policy reforms initiated under ROCS1 and ROCS2. One of the unresolved issues relates to agreement on specific actions to set the management and financing of roads on a sustainable long-term basis. Discussions as part of ROCS1 have resulted in setting up an autonomous road authority (ANE). ANE is also currently managing the Road Fund. This sets the stage for further discussions as part of preparation of RBMMP to ensure that the Road Fund can be properly managed in a transparent manner. Policy reforms regarding the organizational restructuring of the road sector are still not finalized. There is a concern with the approved decree establishing the new road authority system concentrating powers within MOPH and creating a parastatal with potential conflict of interest and lack of transparency and accountability. The discussions with the government so far are on the right track and indicative of GOM commitment to address this important issue and to carry out the further institutional reforms (separation of custody and management of Road Fund from works execution and management) during the execution of the first phase of the future roads operation (RBMMP). 6.2 Transition arrangement to regular operations: ROCS1 and ROCS2 were prepared aiming at improving transport infrastructure and services through selective investment in rehabilitation and maintenance of key road and port facilities, and in increasing the capacity and efficiency of the trucking and coastal shipping industries. The improvements in the road and transport service sectors were expected to contribute to economic growth and reduce poverty. Since then, and with the assurance of lasting peace, monitoring poverty impacts of transport investments and strengthening institutional capacity at the national and regional levels has become increasingly important to the Government's and Bankls commitment to link future development support to poverty reduction strategies. A three year socio-economic impact assessment has been launched to examine the poverty and environmental impact of road investments. In particular, ANE has pioneered several initiatives to support the Government's Plan for poverty reduction and defmne relevant actions for the roads sector, including establishing a Poverty, Gender and AIDS Prevention Unit, to provide policy guidance for the identification of strategic road investments to reduce poverty, enhance the participation of women at all levels of the transport sector and support Government's plan to combat HIV/AIDS. Although management of the road network has improved considerably over the past decade, the institutional and policy reform process is yet to be completed. During an October, 1999 seminar organized by ANE and the Ministry of Public Works, the Government announced plans to implement second and third generation institutional reforms over the next two years to: (i) improve the rate of adoption and implementation of agreed policy and institutional restructuring reforms; (ii) reach agreement on sustainable and adequate maintenance funding mechanisms in line with the maintenance capacity; (iii) expand rehabilitation of the road network in densely populated and economically productive areas of the north and center; (iv) strengthen capacity in implementation of road safety programs; and (v) increase FHV/AIDS awareness among road workers and residents. The institutional reforn of the roads sector continues under the on-going ROCS2 and fulfillment of specific objectives and measurable targets in the strengthening of financial management, organizational structure and institutional reforms will be conditions of negotiating the third roads project, RBMMLP, currently under preparation. 7. Bank and Borrower Performance Bank 7.1 Lending: - 17 -  The Bank's performance during identification, preparation and appraisal was Satisfactory, with considerable effort invested to design the Project in a difficult political and institutional environment. About 280 staff-weeks were spent in preparing the Project which is way above the Bank's average. The Bank conducted a review of the transport sector in 1989 which forms the underpinning for the Project. The Project was well designed and all aspects were given due attention. 7.2 Supervision: The Bank's supervision performance was overall Satisfactory. During supervision, the Bank maintained a close monitoring of the Project and helped DNEP, GAPROMAR and UTRA in identifyiing technical problems as well as in implementing appropriate solutions, including procurement matters and transport and road policy issues. The Bank provided on-ground support by deploying a project assistant during initial period of Project implementation. Bank supervision was careful and well documented with detailed Aide Memoirs. In addition, the Bank has shown flexibility and responsiveness in adapting the project design to changing and unanticipated developments as reflected in the three amendments to DCA. However, there was a lack of appropriate documentation of Project Status Reports (PSR/590s) during the initial four years of Project implementation. Moreover, no monitoring indicators were followed during Project implementation. 7.3 Overall Bank performance: The overall Bank performance was Satisfactory. Borrower 7.4 Preparation: The Borrower's performance was Satisfactory as regards Project identification, preparation and appraisal. The different Ministries and agencies participated fully in discussions concerning Project component identification and displayed flexibility in Project design. 7.5 Government implementation performance: Overall, Govemment s implementation performance was Satisfactory. The sector policy environment has been considerably reformed since the commencement of ROCS 1. The achievements are particularly significant when viewed in the background of a relative absence of institutional framework and inadequate capacity because of the history of long civil wars in the country at the beginning of ROCS 1. 7.6 Implementing Agency: The project was implemented by three agencies: (i) the roads component was managed by DNEP; (ii) small ports and coastal shipping component was managed by GAPROMAR; and (iii) customs and trade facilitation was managed by UTRA. Performance of each of the three implementing agencies is discussed separately. DNEP The performance of DNEP during Project implementation was Satisfactory. Significant progress has been made in the implementation of the roads components by DNEP, as brought out in paragraph 4.5. Legal status of ECMEPs has been restructured, plant equipment rental companies have been created and an -18 -  autonomous Road Authority has been set up with the responsibility for maintenance and management of the road system. New guidelines and monitoring procedures have been introduced particularly in the areas of: procurement of civil works, contract management, data collection, contract supervision and maintenance control. Human resource capacity has been strengthened considerably and laboratories have been equipped. However, some delays have been experienced in implementing necessary policy reforms and restructuring and development of local contractors has been slow as a result of delays in payments and limited access to equipment. GAPROMAR The performance of GAPROMAR during Project implementation was Satisfactory. MTC has completed its restructuring focusing on policy making, sector monitoring and regulations. This transformation is in line with the Government's transport policy objectives of privatizing the management of transport services, liberalizing operations and involving the private sector more significantly. As a result, MTC has been transformed from a public administered system with operational responsibility into a monitoring and regulatory body. MTC is also completing the legislation and policy guidelines necessary for implementation of the transport policy through new institutional arrangements, revised new regulations for all sub-sectors and procedures for long-term leasing/concessioning. The restructuring of coastal shipping and maritime transport is also well advanced with new regulations and liberalization of activities. CFM has been transformed into an independent, financially autonomous company. The responsibility for road safety has been transferred to an independent agency. UTRA The performance of UTRA during Project implementation was Satisfactory. UTRA has had a central role in monitoring and steering the customs reform process in Mozambique. Its activities focused on: (i) conducting the process of hiring and monitoring the performance of the specialized customs management company, which was hired to manage Mozambique customs over the past 3 years; (ii) hiring and monitoring performance of a pre-shipment inspection company; and (iii) drafting the legislation necessary to modernize customs policies and procedures. In addition, it implemented the new customs code (import tariff), which lowered import barriers, and contributed to the elimination of import licensing. However, while UTRA's work has been critical in improving the efficiency, transparency, and operations of customs operations in Mozambique, it still suffers from capacity and organizational weaknesses. 7.7 Overall Borrower performance: The overall Borrower performance is assessed as Satisfactory 8. Lessons Learned The following lessons can be learned from the ROCSI Project: l. Reforming institutional structure and management approaches is a slow process requiring a sustained dialogue beyond one project cycle. ROCS1 has set the basic framework for sustainable operations of the transport sector in Mozambique. However, there is a need for continuous monitoring and policy advice to support the reform program. Given the nascent institutional base and weak capacity at the beginning of project - 19 -  preparation, it will take more than one project cycle to put the transport sector back on a sustainable footing. The important lesson here is the need to maintain a dialogue and provide technical support extending over more than just one project cycle. 2. Project ownership is crucial for achievement of Project objectives. Ownership is an important element that contributes to effective Project implementation and to the achievement of its objectives. With the Project under effective control of GOM its implementation was efficiently monitored despite a multi-implementing agency, multi-donor and multi-purpose environment. In particular, the dynamic and competent management of DNEP was critical for the success of the Roads component. DNEP developed an exemplary system of TA monitoring and evaluation towards ensuring hand over of TA posts to local staff. Consultants and their counterparts were requested to jointly develop work plans, describing the work tasks and the related group of skills necessary to perform the tasks, rate current skill levels and propose skill improvement methods. All TA experts had to provide quarterly reports and report on knowledge and responsibility transfer. 3. There is a need for comprehensiveness in addressing road policy reforms. It is important to pay adequate attention to all aspects of road policy reform to ensure sustainable improvements in the sector and transparency in financial arrangements. Regarding the road sector policy reform process, ROCS 1 focused primarily on institutional strengthening and staff training with particular attention given to building public sector management capacity, planning and programming of works and capacity building of local companies. The reform process has culminated with the creation of an autonomous road authority, the ANE, to replace the DNEP. However, reforms regarding important aspects related to providing a stable and adequate financing for road maintenance and associated management arrangements lagged during Project implementation. At Project completion, no acceptable agreement has been reached with regard to sufficient overall funding levels in the long-term and transparent mechanisms to channel funds to the RF. Discussions are still underway on the most suitable institutional arrangements. It is equally important to ensure that a political commitment exists to safeguard the use of money and a check-and-balance governance system to restrict government's discretionary power and arbitrary behavior. The requirement is to pay particular attention to the design of the RF in order to maximize the probability that they will not be abused, rather than simply be content with legislating a RF into existence. Raiding may still be possible through legal or bureaucratic holes in the system. The structural safeguards necessary to provide protection to the road funds require a strong political will, adequate user representation and transparent dissemination of the RF activities. 4. Strengthen human resource capacity adapted to local needs and environment. A training program should be based on what is locally acceptable and on transfer of know-how to ensure sustainability. Developing sophisticated programs which are not locally accepted are not likely to reap much benefits. Success of CTE, the main roads training school, can be attributed to adequate adaptation to local needs and environment. 5. Need for flexibility and continuity during implementation For successful project implementation, it is important to maintain flexibility in project design and continuity in implementation teams, both in the Bank and the Government. This is particularly important when implementing a large and complex project, with an ambitious reform agenda in a country with a long history of unstable political environment, inexperience working with the Bank and weak institutional framnework. The success of this project hinged on three critical elements: (i) flexibility during implementation to change project design to suit the changing environment. DCA was amended three times during implementation to adjust Project activities to accommodate the changing sector requirements; (ii) building good understanding between the Bank and the Government helped resolve a number of difficult issues in an amicable manner; and (iii) - 20 -  continuity in the project team both in the Bank and the implementing agencies has helped maintain a healthy dialogue and good understanding. Considering the long preparation time of such projects and the complexity of agreements to be reached and strategies to be developed, it is of vital importance that key members of the project team, both from the Bank and the government, maintain continuity over the project preparation period. While continuity is important for most Bank projects, it is especially important for projects in a new and uncertain environment, which are complex with long gestation period and require coordination with multiple donor agencies. A strong and continuing support from the resident mission greatly helps in project preparation and supervision. 9. Partner Comments (a) Borrower/implementing agency: (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information -21 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome I Impact Indicators: Elaboration of a comprehensive policy for MTC has completed its restructuring Completed MTC restructuring focusing on policy making, regulatory procedures and regulations enforcement in line with the Government 1996 Transport Policy. Complete liberalizabon of the trucking sector The restructuring and liberalkzation of the Completed and restructuring/downsizing land transport road transport sector has mostly been department at national and provindal levels achieved. Restructure coastal shipping and maritime transport The restructuring of coastal shipping and Completed maritime transport is well advanced with new regulations approved, management contracts for NAVIQUE and TRANSINSULAR, creabon of SAFMAR and liberalization of stevedoring activities. Introduce reforms in ports and railways Major reforrms are being finalized regarding Discussions on going under the follow-up ports and railways with the restructuring and Bank-financed projects concessioning of CFM and contracts for the management of several secondary ports. Air transport policy in place, including The restructuring of DNAC and the creabton The last step will be to concession/lease the restructuring of LAM, private sector of an autonomous self-financing aircraft management of airports and establish a involvement in airports management and safety institute (INAC) with a new set of Commission for air traffic rights. action plan for a sustainable DNAC regulations is almost complete. Definition of an urban transport policy Urban transport restructuring through Competed cooperatives and new regulations for tariffs and routes is almost completed. Customs restructuring Customs restructuring had significant impact Completed in collection performance. Collection rates improved from less than 6 percent in 1996 to around 11 percent in 1999. Rationalization of the import tariff has reduced weighted-import dubes from 18 to 11 percent and the number of rate categories from seven to five . Amend Road Fund regulations No acceptable agreement has been reached An acceptable agreement regarding funding with regard to sufficient overall funding levels and complebon of key restructuring reforms in the long-term and revised bmely and are key conditions for continuing IDA support transparent mechanisms to channel funds to to the road sector. the RF. Create DNEP as an independent road An autonomous road authority (ANE) has Completed authority been created to replace the DNEP by decree of the Council of Ministers (April, 1999) Set up a sustainable and self financing Chimoio training center has been set up and To ensure sustainability of the Chimoio Chimoio Training center has already trained more than 9600 people. training center it is necessary to develop a marketing strategy. Legalize ECMEPs as commercial ECMEPs have been transformed as Completed contractors commercial firms and maintenance works is being contracted out on a commercial basis - 22 -  Output Indicators: Provide training to 3,500 road sector staff About 12,000 persons trained members Provide training to 200 MTC staff members About 200 persons trained Emergency repair of 280 km of roads About 280 km repaired Rehabilitate and/or maintain 2,400 km of feeder roads Rehabilitate 205 km of urban streets About 205 km of urban streets repaired Create 40 small local contractors About 50 small local contractors developed -23 -  End of project - 24 -  Annex 2. Project Costs and Financing Comparative Project Costs: Appraisal Estimate, Revised Estimate and Actual ACTUAL Appraisal Other Percentage Project Component Estimate IDA Donors GOM Total of A raisal Roads 93.0 58.3 81.9 25.2 165.3 178% Institutional Support 58.3 41.0 1.0 8.6 49.8 85% Planning and Engineering Services 13.2 2.4 12.6 2.9 17.9 135% Feeder Roads 21.5 68.3 9.7 78.0 363% Emergency Roads Program 8.5 2.0 10.5 Urban Street Emergency Repair 6.5 2.0 8.5 Small Ports and Coastal Shipping 24.9 9.7 6.6 1.6 17.9 72% TA and Studies 10.8 9.0 4.0 1.4 14.4 134% Training and Development 1.9 0.7 2.6 0.1 3.4 181% Credit Line Investments 6.5 Port and Shipping Investments 5.7 Customs and Trade Facilitation 0.8 4.5 0.8 5.3 656% Contingencies 26.0 Total 144.7 72.5 88.5 27.5 188.5 130% - 25 -  Proiect Costs bv Procurement Arrangements (Actual/Latest Estimate) (in USS million eauivalent) Procur mentLMetbodtl Expenditure Categorv ICB NCB Other/2 N.B.F. Total Cost 1. Works 14.9 2.5 82.0 99.4 (14.9) (2.5) (17.4) 2. Equipment and Spare Parts 2.0 0.7 15.5 18.2 (2.0) (0.7) (2.7) 3. Consultant Services 47.4 0.6 1.1 17.0 66.1 (47.4) (0.6) (1.1) (49.1) 4. Training 2.3 1.5 3.8 (2.3) (2.3) 5. Credit Line 0.0 0.0 6. PPF Refinancing 1.0 1.0 (1.0) (1.0) Total 64.3 3.1 5.1 116.0 188.5 (64.3) (3.1) (5.1) (72.5) /I Figures in parenthesis are the amounts financed by the Bank Credit. /2 Includes civil works and goods procured through national shopping, consuting services, services of contracts staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending projectfunds to local government units. -26 -  Annex 3: Economic Costs and Benefits Benefits ($/lOOOkm) W/out With Net Ben. VOC LV 505 413 92 VOC HV 658 574 84 Road Length km 33 Costs Maint cost per km 607 Rehabilitation cost per km 10718 Economic Analysis Road ER 418 Homoine - Pembe (Inhambane Province) Traffic Volume/day Benefits $000/year Total Costs Net Benefits LV HV LV HV Total $000 $000 1997 89.0 52.0 353.7 (353.7) 1998 97.9 57.2 95.1 50.7 145.85 20.0 125.8 1999 107.7 62.9 104.6 55.8 160.44 20.0 140.4 2000 118.5 69.2 115.1 61.4 176.48 20.0 156.4 2001 130.3 76.1 126.6 67.5 194.13 20.0 174.1 2002 143.3 83.7 139.3 74.3 213.54 20.0 193.5 2003 157.7 92.1 153.2 81.7 234.89 20.0 214.9 2004 173.4 101.3 168.5 89.9 258.38 20.0 238.4 2005 190.8 111.5 185.3 98.9 284.22 20.0 264.2 2006 209.9 122.6 203.9 108.8 312.64 20.0 292.6 2007 230.8 134.9 224.3 119.6 343.91 20.0 323.9 2008 253.9 148.4 246.7 131.6 378.30 20.0 358.3 2009 279.3 163.2 271.4 144.8 416.13 20.0 396.1 2010 307.3 179.5 298.5 159.2 457.74 20.0 437.7 2011 338.0 197.5 328.4 175.2 503.52 20.0 483.5 2012 371.8 217.2 361.2 192.7 553.87 20.0 533.8 2013 409.0 238.9 397.3 211.9 609.25 20.0 589.2 2014 449.8 262.8 437.0 233.1 670.18 20.0 650.1 2015 494.8 289.1 480.7 256.5 737.20 20.0 717.2 2016 544.3 318.0 528.8 282.1 810.92 20.0 790.9 NPV 1,816.3 ERR 47% -27 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation April 1990 1 Transport Planner July 1990 I Transport Planner I Highway Engineer I Port Engineer December 1990 1 Highway Engineer I Training Specialist April/May 1991 1 Highway Engineer I Training Specialist Appraisal/Negotiation September/ I Transport Engineer October 1991 1 Financial Analyst I Procurement Specialist I Highway Engineer I Training Specialist 1 Trans. Operations Special. I Equipment Specialist I Shipping Operations Expert I Environmental Expert I Port Management Special. I Legal Officer I Agricultural Specialist February 1992 1 Transport Engineer Supervision October 1992 1 Transport Engineer HS HS I Financial Analyst I Highway Engineer I Port Engineer June/July 1993 1 Financial Analyst S S I Operations Officer I Civil Engineer I Procurement Specialist I Highway Engineer I Environmental Specialist I Legal Officer I Port Specialist September 1993 1 Financial Analyst S S I Operations Officer I Civil Engineer I Procurement Specialist I Road Policy Reform Specialist March 1994 1 Financial Analyst S S I Operations Officer Port Engineer -28 -  May/June 1994 1 Financial Analyst S S I Operations Officer 1 Environmental Specialist I Road Policy Reform Specialist September/ October 1994 1 Financial Analyst S S I Operations Officer April 1995 1 Financial Analyst S S I Operations Officer I Program Assistant 2 Consultants September/ 1 Financial Analyst S S October 1995 1 Consultant March 1996 1 Financial Analyst S S Operations Officer September/ 1 Financial Analyst S S October 1996 1 Operations Officer July 1997 1 Financial Analyst S S I Operations Officer I Project Assistant October 1997 1 Operations Officer S S 1 Project Assistant July 1998 1 Operations Officer S 1 Project Assistant I Highway Engineer September 1998 1 Operations Officer S I Project Assistant I Highway Engineer July 1999 2 Operations Officer S S I Project Assistant 2 Highway Engineer I Transport Economist ICR December 1999 2 Highway Engineer S S 1 Financial Analyst 2 Consultant (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ (000) Identification/Preparation 154.8 312.5 Appraisal/Negotiation 123.2 246.0 Supervision 184.4 427.0 ICR 8.0 20.0 Total 470.4 1005.5 -29 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Z Macro policies O H OSUOM O N * NA Z Sector Policies O H *SUOM O N O NA Z Physical * H OSUOM O N O NA Z Financial O H OSU*M O N O NA Z Institutional Development 0 H O SU O M 0 N 0 NA Z Environmental O H OSUOM O N * NA Social X Poverty Reduction O H *SUOM O N O NA Gender OH OSUOM ON ONA Z Other (Please specify) O H *SUOM O N O NA AIDS awarness Z Private sector development 0 H 0 SU O M 0 N 0 NA M Public sector management 0 H 0 SU O M 0 N 0 NA D Other (Please specify) - 30 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bankperformance Rating 0 Lending OHS OS OLu OHU O Supervision OHS OS OLu OHU O Overall OHS OS O u O HU 6.2 Borrowerperformance Rating O Preparation OHS OS O U O HU El Government implementation performance O HS OS O U 0 HU LI Implementation agency performance OHS OS OU O HU F Overall OHS OS 0 U O HU -31 -  Annex 7. List of Supporting Documents Mozambique First Roads and Coastal Shipping Project, Staff Appraisal Report, May 6, 1992, The World Bank Memorandum and Recommendation of the President of the International Bank for Reconstruction and Development to the Executive Directors on an Proposed Credit of SDR54.1 Million to the Republic of Mozambique for a First Roads and Coastal Shipping Project, May 6, 1992, The World Bank Credit Number 2374 MOZ, Development Credit Agreement between the Republic of Mozambique and the International Development Association, June 19, 1992, The World Bank Mozambique First Roads and Coastal Shipping Project, First Amendment to the Development Credit Agreement, April 22, 1993, The World Bank Mozambique First Roads and Coastal Shipping Project, Second Amendment to the Development Credit Agreement, November 22, 1995, The World Bank Mozambique First Roads and Coastal Shipping Project, Third Amendment to the Development Credit Agreement, March 1, 1999, The World Bank Mozambique First Roads and Coastal Shipping Project, Supervision Reports including Impementation Summaries (Forms 590) or Project Status Reports (PSR) from 1993 to 1999, The World Bank Review of the Performance of the Roads and Coastal Shipping Projects, June 12, 1998, The World Bank Roads and Coastal Shipping Projects (ROCS 1 and ROCS2) Annual Review, Report - 1998, Roads Component, October 5, 1998, National Directorate of Roads and Bridges, Ministry of Public Works and Housing, Maputo, Mozambique Feeder Roads Programme Annual Report - 1998, May 1999, National Directorate of Roads and Bridges, Ministry of Public Works and Housing, Maputo, Mozambique ROCS I Component Managed by the MTC, Annual Report - 1998, GAPROMAR, Ministry of Transport and Communications, Maputo, Mozambique -32 -  BORROWER'S CONTRIBUTION - 33-   A Ab*4T SACA O NAOO~t DE ESTRADAS IMPLEMENTATION COMPLETION REPORT FIRST ROAD AND COASTAL SHIPPING PROJECT ROCS-I ROAD COMPONENT ONLY MARCH, 2000   ADHIINISTRCAO NACIONAL DE ESTRADAS ICR ROCSI PROJECr ABBREVIATION GLOSSARY: ASDI Swedish International Development Agency ADB African Development Bank BADEA Arab Bank for Economic Development in Africa BM Banco de Mo,ambique CFD Caisse Fran,aise de Developement DNEP National Directorate of Roads and Bridges DEP Provincial Department of Roads and Bridges, DNEP ECMEP Enterprise for the Construction and Maintenance of Roads and Bridges FMEP Road Maintenance Fund GOM Government of Mozambique HDM III Highway Design Model IDA International Development Association KFAED Kuwait Fund for Arab Economic Development KFW Kreditanstal fur Wiederaufbau (Germany) LRCI Local Road Construction Industry MOPH Ministry of Public Works and Housing MTC Ministry of Transport and Communications ODA Overseas Development Administration (U.K.) ROCS Roads and Coastal Shipping Projects UEM University Eduardo Mondlane UNDP United Nations Development Prograrnme USAID United States Agency for International Development Pace-l  ADMINISTRACAO NACIONAL DE ESTRADAS ICR ROCS-1 PROJECT JNDEX Contents Page 1. Executive Sumrmary ............... 03 2. Studies and Projects ............... 03 3. Works ............... j 04 4. Planning ..................... 04 3 Tcchnical Assistance ............... 04 6. Institutional Reforms ............... 05 7. Development of the Local Road Construction Industry ...... ............. 06 8. Professional Development ......................................... 06 9. Laboratories ......................................... 07 10. Social and Economic Impact ......................................... 07 11. Funding .07 Page-2  ADM21STRACAO NACIONAL DE ESTRADAS ICR ROC5-I PROJECT 1.0 Executive Summary The ROCS-1 Development Credit Agreement was signed in June 1992, this was amended several times during the course of the project to suit the requirements of the Project Implementing Units.,The project ended on the 31SL December of 1999. In summary, the Staff Appraisal Report define the primary project objectives as the development ofkstitutional capacity and the implementation of policy reforms. With the general project objectives being further defined as (i) providing sufficient qualified human resources in order to meet the peace-time needs of the economy, (ii) strengthening of GOM institutions to allow them to cost effectively manage transport infrastructure, (iii) encouraging and assisting in implementing policy reforms necessary for efficient management of national rources and (iv) support to GOM's Priority Districts Programme by removing transport related obstacles. The Roads component of the project has, by and large, succeeded in achieving the above objectives as demonstrated by (i) ANE' s ability to implement some USD 500 M worth of projects under the ROCS-2 project with constantly diminishing numbers of technical assistants, (ii) the large volume of training undertaken as well as the establishment of the Roads Training Center and development at various technical institutions in Mo9ambique. (iii) the creation of an autonomous Road Authority and the establishment of company structures for the ECMEPS and PERCS and (iv) the reduction of roads in a poor or worse condition from 81% of the network to only 46% and an increment of those in fair condition from 19% to 54%. The social and economic impact of the project whilst not monitored under the project is clear as demonstrated by the improvement in the Moambican vehicle fleet, foreign investment in agricultural projects made possible by the improved road network, stabilisation of the currency and the dramatic growth of the economy. Throughout the project the flexible and accommodating approach of the Bank made the implementation of this complicated project a possibility and finally a success. 2.0 Works Projects The Department of Studies and Projects. responsible for project identification, design and tendering, completed a total of thirteen Feasibility studies on 2040 kilometers of road throughout the country. Of these Feasibility studies all, except one, have been or are in the process of being implemented. In addition to these projects a further, approximately, 230 kilometers of road were opened and rehabilitated and 1603 km of roads subjected to detailed designs in 10 separate projects. In addition to these a further 5 Technical assistance contracts.  ADMIN[STRACAO NACIONAL DE ESTRADAS ICR ROCS-I PROJECT 3.0 Tertiary Roads Under the project a total of 140 tertiary road rehabilitation contracts were entered intG. These were mainly under the umbrella of the Feeder Road Program ( FRP ) which used labour-based technologies to rehabilitate and maintain earth and gravel roads. The FRP grew from a senes of pilot projects beginning in the early eighties to a country-wide programme by 1992. The most positive features of the programme are substantial job creation ( over 7000 during 1999), the provision of job opportunities for women, the creation of technical capability and the reduction of machine base maintenance requirements. The Labour-based technology proved to be a practical, sustainable and economical method for the rehabilitationtand maintenance of low volume roads which forms a key part of the Mo9ambican Govtmment's Road Policy in areas of high population density. 4.0 Planning In 1995, there was an increase of 60% in the recorded 1994 traffic volumes. The approximate distribution of vehicles by category is small vehi cles 46%, trmcks 3 7%, buses 8% and tractors 9%. A Road Management System was designed and introduced in September 1996. As a result a comprehensive roads data base now exists, providing an invaluable planning and management tool. The current national roads programme was designed taking into account the road policy which defines all weather roads, roads transitable at least 10 months per year, the percentage of the network which must be in good and reasonable condition, Design standards and feasible maintenance levels for differing road categories and, defined IRR's for investment projects, 5.0 Technical Assistance The weakness of GOM implementation capacity in 1992, the limited financial resources, the lack of security in certain areas and the uncertainty of how the economy would develop at the inception of the ROCS project, in 1991, meant that the first phase of the project, ROCS-1, concentrated on the country's most urgent needs for road and coastal shipping transport improvements. In addition, as the first of a series of development projects the ROCS-1 project also addressed the severe lack of institutional capacity in the transport sector by including the first phase of a long range institutional development program to build capacity and facilitate the recovery of the roads sector. One of the principal means of both pro-viding and developing institutional capacity was by the assignment of technical assistants to the various institutions responsible for the maintenance and management of the road network. This has been a large programme which has benefitted from approximately 1600 man months of input under the General C:xtG-_lD-ftn1-kr d. Pn oP X  AD'MINISTRAC,O NACIONAL DE ESTRADAS ICR ROCS.I PROJECT Consultant, TA to DEPs, TA to Feeder Roads Programme, TA to training, TA to Road Fund and TA to Local Road Construction Industry contracts. In addition, various other institutional studies were undertaken utilising short term TAs. What is, however, clear is that ANE and its personnel have benefitted greatly from the presence of TA during the period since 1993 as demonstrated by the continued (efficient) day to day functioning of the ANE organisation following a dramatic reduction in TA. In addition ANb4 has succeeded in implementing some USD 710 M worth of projects in the roads sector of which about USD 120 M fall under ROCS-1. This has resulted in a reduction of the percentage of roads considered to be in poor or worse condition from 81 % to only 46% and an increment of those in fair to good condition from 19% to 54%. 6.0 Institutional Reforms The ROCS-1 Project was conceived in 1991, as a long term project, to remove transportation bottlenecks through the rehabilitation of the transport infrastructure, in support of the Government of Mozambique's Economic Rehabilitation (ERP) and Economic and Social Rehabilitation (ESRP) Programmes In addition to the physical reconstruction work required on the road network it was also realised that there was a need to review the Governments Roads Policy as well as institutional structures of the various organisations responsible for the management and control of the road network. The following Policy and Institutional changes resulted from these reviews. Policy Changes: The formulation and adoption of a revised Road Policy in July 1998. Institiutional Changes: The result of this review was that an autonomous Road Authority be formed with full responsibility for the financing, management and control of the road network. This was effected by the establishment of the Road Board or "Administracao Nacional de Estradas (ANE)" in late 1999. A second study commissioned to investigate the most appropriate institutional structure for the management and operation of the Government owned and controlled ECMEPS resulted in the recommendation that the ten provincially based organisations be consolidated into three regional companies (SARLs). This was also implemented during 1999. These companies, although still public, have clear mandates to operate with commercial objectives. A similar study to that undertaken for the ECMEPS was undertaken to determine the most economical method of providing the local construction and maintenance industry with operational and well maintained earthmoving equipment. The recommendation of this study was that privately owned plant equipment and rental companies should be formed. Three regional autonomous companies have been set up but are as yet no functional.  ADMINISTRACAO NACIONAL DE ESTRADAS ICR ROCS-I PROJECr Fundamental to the functioning of any Road Authority is the availability of funds. The legislation currently enacted to establish ANE, makes provision for this by directly incorporating the Road Fund and its incomes in the Road Authority as well as its management and maintenance obligations. 7'0 Local Road Construction Industry -The Govermnent of Mozambique (GOM) embarked on the creation of a viable, competitive local road construction industry which was identified as an essential component of the continuing and sustainable development and maintenance of Mozambique's infrastructure. To support the development of Local Industry, ANE launched two separate prograns, the first for the Local Consultants and the second for Local Contractors. Forthedevelopmentof local consultants, ANE prepared contracts forengineering, design and supervision of certain roads which were directly awarded to locally registered consultants. Eleven contracts covering a total of 917km were awarded. A work plan for the Local Contractor Developmenit Project aimed at achieving 10 percent of Mozambique's routine road maintenance needs being satisfied by local contractors, and that all provinces being provided with suitably qualified and competent local contractors. In support of this initiative II contracts wvere awarded to Local Contractors in 1996, covering some 1,637 km of roads . This was increased by a further 120 contracts during the period between 1997 and 2000, covering some 4667 km of roads. 8.0 Professional Development At the inception of the ROCS-1 project ANE only had 3 qualified engineers and 15 technicians of various levels. Following the professional development programme under the ROCS-1 and subsequent ROCS-2 project ANE now boasts some 57 qualified engineers, 59 engineers in training and 16 technicians. This increase was made possible by a Human Resources Development and Training Program which was designed and implemented by ANE in 1993. Under this program a Training Division Nvas created with the responsibility for the formulation, implementation and coordination of all the training activities within the road sector. To achieve this, ANE contracted technical assistance services under the ROCS-1 Project. The main objective of the services was the establishment within ANE of the necessary professional development capacity to produce qualified road and bridge engineers, technicians, inspectors, labour- and administrative personnel needed to carry out rehabilitation, maintenance and-mana,ement if the road network.  AD.INIssRACAO NACIONAL DE ESTRADAS ICR ROCS-I PROJECT To achieve this objective Roads Training Technical Assistance Services (RTTAS) were procured with the responsibility for: Setting up a sustainable training capacity in DNEP by the establishment of an operational Training Division; Setting up the Roads Technical Training Center and the Road and Mechanical Training Broduction Units for mobile practical training activities; Rehabilitation of the Roads Technical Training Center's facilities to increase its capacity to 100 participants. 9.0 Laboratories The development of the DNEP's laboratories, which were being operated by the ECMEP's, was carried out under the TA to DEP's project as part of the overall ROCS programme. All ten laboratories are now functioning and providing a useful service to the construction industrv. A Manual including all the procedures for the day to day running of the laboratories was produced. The Manual was presented to DNEP in February, 1995 and introduced at provincial level through short courses. 10.0 Social and Economic Impact The effect of the development of ANE and the projects undertaken in the reinstatement of the national road network has had a profound socio-economic effect by permitting the large majority of the Mozambican population access to commercial opportunities. This together with the substantial foreign and local investment bodes well for the next phase of the ROCS project and the future of Mozambique. 11.0 Funding The project was financed from a number of sources and included grants, loans and own funds. Of a total expenditure of approximately USD 180M the Government of Mocambique contributed approximately twelve percent or USD 25M. The sources and the uses of the project funds are detailed in the table over the page. (.$t;,,,.1-D~~~~~~~~~/t l,! 7'P~p-  ADl)1INIStI AC,LO NACIONAL DE FSTTRADAS ICR ROCS-I PROJECT ROCS-1 FINANCIERS (in 1000 USD) Financier - PROJECT - x -. - Provisoin AvaitabI Disburjed . , . . : .. " :-,--:..*...... ..,;. :. ...:;;, .-- -5S Beira Corridor (Engineering) 1,171 1.101 ADF Beira Corridor (Engineering) 4,874 3.700 Pemba - Monte. & Vand - Changara (Eng) 3,513 1,368 Sub-Total 32,000 9,558 6,168 ASDI Technical Assistance (General Consultant) 770 0 Tertiary Roads 28.813 17,545 Sub-Total 24,000 29,583 17,545 Chib.Chissano-Xai-Xai 215 210 BADEA Technical Ass stance 145 131 Equipment - 3.300 2.184 Sub-Total 18,000 3,660 2,525 BoanelSabie Mn ineering) 469 411 EDF Nampula/Nacara (Engineering) .536 553 Baillet Bridges and Armco Culverts 2,9791 3,026 Sub-Total 84,000 3,984 3,990 GOM Internal Financing 25.178 25.178 Sub-Total 46,000 25,178t 25,178 IDA ROCS-I&II ! 56.0001 54,394 Sub-Total 56,000 1 560001 54394 Japio Eouioment I 10_335 _ 111818 Sub-Total | 52,000 10335 11,818 Emeroency Rehabilitation 20,705 21,057 KFW Tertiary Road Rehabilitation 3,155 3.270 _Sub-Total = 35,000 23,860 24,326 KFAED MaoutoiNarraacha | 1,5001 1,500 Sub-Total 1,500 1,500 1,500 Opec Xai-Xai Bridce 3,500 3.400 Sub-Total 10,000 3,500 3,400 Zambezia Province Rehabiiitation 29741 2.060 UNCOF Namoula Province Rehabilitation 5 452 5.427 Sub-Total 6,000 8,4261 7,487 Caixa Francesa Sub-Total 1,000 0 0 Zambezia Tertiary road rehabilitation 14,000 9.563 ODA Sub-Total 14,000 14,000 9,563 Niassa Tertiary road rehabilitation 886 814 SOC Sub-Total 1,000 886 814 1 1043 1,106 WFP Sub-Total 6 000 1,a43 1 106 Tertiary Roads 10_130 7_576 PNUO Sub-Total 10,000 10S130 7576 -'Total.. . -. -- --- ' - 396,500 201642.177,391 Paze-8  ROCS 1 (MTC components) COMfPLETION REPORT The ROCS I project had, originally two executing agencies, Gpromar on behalf of the Ministry of Transport and Communications (MTC) and DNEP on behalf of the Ministry of Public works and Construction (Initially the Ministry of Construction and Water at the time of the signing of the project). This report covers that part of the project managed by Gapromar Objectives and components ofthe project The project objectives were as follows: (i) Develop the institutional capacity in the MTC to effectively plan and supervise the improvement of small coastal ports serving the priority districts (ii) Implement policy reforms in the trucking and coastal shipping sub-sector, required to effectively support the "Economic Second Rehabilitation Program" and the agricultural development contemplated in the GOM's Pubic Development program (PDP) In particular ROCS 1 would begin IDA's long term assistance to GOM in developing the institutional and managerial capacity and the policy and regulatory fiamework required to successfully implement and sustain transport improvement through this and forthcoming projects. The projects' components were as follows: (i) Technical assistance to DNM/Gapromar and other coastal shipping organizations intended to provide guidance and assistance during implementation of this and two proposed subsequent ROCS project, including: - over all project management - policy and regulatory reforms - facilitation of greater private sector involvement (awarding port management contracts, preparing state enterprise for divestiture etc.) and - development and preparation of subsequent phases of long term coastal shipping transport sub-sectors improvement program (ii) The first five years of a comprehensive training program for coastal shipping personnel (iii) Studies and implementation of recommendations for policy reforms in procurements and trucking  (iv) Initial assistance for inter-modal facilitation, and customs efficiency improvement (v) Small ports investments in infrastrcture and in cargo handling equipment and tugs - the latter to be funded through a line of credit, in five of the fifteen tertiary ports and in one of the five regional ports and (vi) Investments in small port navigational aids and communications Following the signing of a peace agreement soon after the signing of this project, the over all transport condition changed drastically in Mozambique with the opening of the road network to traffic. The urgency to improve the efficiency of the coastal shipping sub- sector diminished partly becaus4one of the main coastal shipping traffic, food aid, was substantially reduced, partly be4'use due to various factors the agricultural production tools were largely destroyed andrpartly because many products started to be transported by road. As a result coastal shipping started to decrease to reach its lowest volume in1995 of about 75,000 tons. Confronted with this new environment, the GOM and the World Bank agreed, on August 4, 1994, to modify the objectives of the project. A new activity (part F) "Institutional strengthening of the MTC and strengthening of the Trucking industrv' was added to the project. The objective was to strengthen the institutional capacity of the MTC for long termn planning and monitoring project and for the supervision and control of the liberalization and privatization of the transport sector. Later, when the Custom Restructuring Unit (UTRA) was established, the GOM and the World Bank agreed that the component of the project related to the restructuring of custom would not be any more managed by Gapromar but will be managed directly by the MPF. Key results Following the amendment of the credit agreement in August, 1994, Gapromar focused the activities of the project on t