Dahomey - Highway Maintenance and Engineering Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1768 PROJECT PERFORMANCE AUDIT REPORT BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) October 25, 1977 Operations Evaluation Department 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 authorlation.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) Table of Contents Page No. PREFACE PROJECT PERFORMANCE AUDIT BASIC DATA SHEET HIGHLIGHTS PROJECT PERFORMANCE AUDIT MEMORANDUM I. Background I II. Project Results 2 III. Main Issues 3 IV. Conclusions 6 Annex Guidelines for Assessment of Training Needs ATTACHMENT: PROJECT COMPLETION REPORT I. Background A.1 II. Project Description A.1 III. Project Implementation A.3 IV. Project Cost and Credit Disbursements A.7 V. Economic Re-evaluation A.7 VI. Borrower's Performance A.8 VII. Conclusions A.9 Tables 1. Costs - Estimates and Actual 2. Schedule of Disbursements 3. Expenditures for Roads, 1970-1974 and their Financing Annexes 1. Proposed Organization of the Directorate of Public Works 2. Reorganized Directorate of Public Works 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.  PROJECT PERFORMANCE AUDIT REPORT BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) Preface This report presents a performance audit of the Benin Highway Maintenance and Engineering Project, for which Credit 215-DA in the amount of US$3.5 million was closed in June 1976. The memorandum is based on the attached Project Completion Report (PCR) prepared by the Bank's Western Africa Regional Office, discussions with Bank staff, and review of project files and minutes of the Board of Executive Directors' meeting which con- sidered the project. On that basis, under OED's abbreviated review process, the audit accepts most of the conclusions of the PCR. However, it expands on the inability to complete the planned training program in highway maintenance and the technical assistance in transport coordination as well as the inability of the Government to provide sufficient local funds for road maintenance after 1973. No mission by OED or Projects Staff was made in connection with this performance audit. The draft audit was sent to the Government for com- ments in the normal course; however, no comments were received.  PROJECT PERFORMANCE AUDIT BASIC DATA SHEET BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 4.1 4.3 overrun () - 5 Credit Amount (US$ million) - 35/1 Disbursed and Outstanding to 8/31/77 /2 4.1- Date Project Completed -- 9/74 Proportion Completed by Above Date (%) n.a. n.a. Proportion of Time Overrun (%) n.a. n.a. Economic Rate of Return of Maintenance Program (%) In Excess of 30 42-232 Institutional Performance Limited OTHER PROJECT DATA Original Actual or Item Plan Revisions Est. Actual First Mention in Files - 3/04/69 Government's Application - - n.a. Negotiations 11/69 - 11/20-26/69 Board Approval 9/70 - 9/08/70 Credit Agreement 9/70 - 9/09/70 Effectiveness 12/15/70 1/15/71, 2/15/71, 3/30/71, /3 and 4/30/71 4/08/71 /4 Closing Date 12/31/744- 12/31/75 6/76- Borrower Republic of Dahomey (now People's Republic of Benin) Executing Agency Directorate of Public Works Fiscal Year of Borrower 1/01 - 12/31 Follow-on Project Second Highway Project Credit Number, Amount (US$ million), 415-DA, 11.8 and Agreement Date 7/03/73 MISSION DATA Date Sent Month/ No. of No. of of Full Item by Year Weeks Persons Manweeks Report Identification PMWA 3/66 n.a. n.a. n.a. n.a. Appraisal IDA HQ. 3/69 2 3 6 6/70 Supervision I IDA HQ. 9-10/70 1 1 1 10/70 Supervision II IDA HQ. 3/71 1 1 1 3/71 Supervision III PMWA 6/71 1 1 1 6/71 Supervision IV IDA HQ. 10/71 1 1 1 11/71 Supervision V IDA HQ. 2/72 2 3 6 3/72 Supervision VI IDA HQ. 6/73 2 1 2 8/73 Supervision VII IDA HQ. 2-3/74 2 1 2 3/74 Supervision VIII IDA HQ. 11/74 1 2 2 12/74 Supervision IX IDA HQ. 9-10/75 2 3 6 12/75 COUNTRY EXCHANGE RATES Name of Currency CFAF franc (CFAF) Year: 1969-70 Exchange Rate: US$ 1 CFAF 278 1971-75 (Average) US$ 1 = CFAF 258 /1 Includes exchange adjustment of US$600,000. 77 Not indicated in Appraisal Report. TT As shown in Credit Agreement. /4 Final disbursement date.  PROJECT PERFORMANCE AUDIT REPORT BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) Highlights Credit 215-DA was intended to finance the US$3.5 million foreign exchange cost of a US$4.1 million project focussed on improving the con- dition of the road network which had deteriorated because of insufficient maintenance. The actual cost of the project was 5% higher than the cost expected at appraisal. Of the actual cost, 87% was allocated to a four- year maintenance program, including reorganization and strengthening of the Directorate of Public Works (DPW), training of maintenance personnel, and purchases and rehabilitation of equipment, as well as technical assist- ance in transport coordination. Detailed engineering of two major road sections absorbed the 13% balance. The project was completed after a seven month time overrun. The re-estimated economic rate of return exceeds the appraisal estimate and is explained by larger vehicle operating costs savings (voc) than expected. This shows that relatively small maintenance expenditures can lead to large voc savings. Despite significant strengthening of the DPW and some improvement in maintenance operations, shortfalls occurred in training in road mainte- nance, technical assistance in transport coordination, and road maintenance operations after 1973. These shortfalls were due to staffing constraints, shortages of local funds, and, to a lesser extent, inadequate project prep- aration. In retrospect, it appears that training and technical assistance results might have been more successful if a more comprehensive preparation of the project had been made, if conditions in the country had not changed, and if incentives to induce trained staff to remain in Government service had been built into the project. The following points may be of particular interest: Shortcomings of the "global" approach to formulation of the training program (paras. 8 - 11); Lack of full realization of the training program (para. 13 and PCR, paras. 3.07 and 6.01); Government's comments on the Beninese experience with counter- part training and IDA's adoption of a new approach (paras. 14 and 15); Lack of full realization of the technical assistance in transport coordination (para. 16 and PCR, paras. 3.14, 3.16, and 6.01); Importance of using limited Government financial resources for road maintenance rather than construction (para. 17); and Successful reorganization and strengthening of the DPW (PCR, paras. 3.05 - 3.07).  PROJECT PERFORMANCE AUDIT MEMORANDUM BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) I. Background The Transport System 1. Benin's simple, but fairly well developed, transport system (PCR, Map) focuses on Cotonou, the admistrative and commercial center which has a deepwater port and an international airport. The country has a 7,200 km road network, which constitutes the main transport mode, a railway, and five airfields. The most important transport axis extends 758 km over the length of the country, and comprises the port of Cotonou, the railway from the port of Parakou, and the road from Parakou to Malanville on the Niger border. IDA Support for Highways 2. Since 1970, three IDA credits totalling US$29.8 million 1/ have been made available to Benin primarily for development of the road sector. The first two projects responded to a UNDP-financed Land Transport Survey, which identified the need to improve road maintenance, to rehabilitate several paved road sections, and to close two inefficient rail lines (PCR, para. 1.01). The third supported improvement and maintenance of feeder roads. In addition, two agriculture projects have included construction and rehabilitation of feeder roads. 2/ The Highway Maintenance and Engineering Project has been completed and is the subject of this Project Performance Audit Report. The Highway Maintenance and Engineering Project 3. Proper maintenance of Dahomey's road network had been difficult in the early 1970's because of lack of funds, deterioration of equipment, and inadequate organization. The project supported by Credit 215-DA (PCR, para. 2.01) was intended to maintain and improve the road network through a four-year maintenance program, including reorganization and strengthening of the Directorate of Public Works (DPW), training of maintenance personnel, and purchases and rehabilitation of equipment. The project also supported if Highway Maintenance and Engineering Project (Credit 215-DA of September 1970 for US$3.5 million), Second Highway Project (Credit 415-DA of July 1973 for US$20.8 million), and Feeder Roads Project (Credit 717-BEN of June 1977 for US$5.5 million). 2/ Hinvi Agricultural Project (Credit 144-DA of March 1969 for US$4.6 million) and Zou Borgou Cotton Project (Credit 307-DA of May 1972 for US$6.1 million). - 2 - preparation of detailed engineering and bidding documents for two major road sections and technical assistance for activation of a transport coor- dination agency. II. Project Results Implementation 4. The overall project was completed in September 1974, about seven months later than the contractual completion date. The main reason for the delay was an extension of consultants' services for the maintenance program (PCR, paras. 3.01-3.17 and Table 1). Due to this delay as well as to realign- ment of the CFA franc against the US dollar, the actual project cost was 5% more than anticipated at appraisal (PCR, paras. 4.01-4.02 and Table 1). 5. As a result of the project, the DPW was reorganized and strengthened and maintenance operations were improved. New equipment was acquired and existing equipment repaired and returned to active service. A Highway Plan- ning Unit was established. Finally, detailed engineering and bidding docu- ments were prepared for two major road sections, whose rehabilitation was included in the Second Highway Project. The project did not, however, materialize entirely as expected. Shortages of personnel prevented comple- tion of the planned training programs in road maintenance and planned tech- nical assistance in transport coordination. Efforts in these areas were reintroduced in the ongoing Second Highway Project and are included in the proposed Third Highway Project. Although consultants set up a reporting and accounting system for maintenance operations, lack of cost data prevented proper assessment of unit costs of maintenance operations. Finally, despite the Government's provision of local funds for maintenance in accordance with the schedule agreed with IDA, from 1973 onwards inflation reduced the purchas- ing power of the funds. The Government was unable to increase the amounts and after 1973 maintenance operations fell behind planned programs. The major shortfalls of the project are discussed in Section III of this memorandum. Economic Re-evaluation 6. At the time of appraisal, an economic rate of return exceeding 30% was estimated for the maintenance program on the basis of reductions in vehicle operating costs (voc)(PCR, paras. 5.01 and 5.02). The rate of return was re-estimated for the PCR (paras. 5.03 and 5.04), using revised inputs to voc and traffic data as well as information concerning the quality of the pavement with and without the project. Account was taken of increases in oil prices. The re-estimated rate of return ranges from 42% to 232%, 1/ depending on assumptions concerning road conditions after project completion I/ Although high, such rates of return are not unusual in maintenance projects where relatively small expenditures can result in large voc savings. -3- and equipment life. The higher rate of return than at appraisal is due to larger voc savings than expected. These larger voc savings are primarily due to an increase in the proportion of heavy vehicles in total traffic and their larger unit voc savings. III. Main Issues Inability to Complete the Planned Training Program in Road Maintenance 7. Because of the importance of road maintenance in furthering eco- nomic development as well as of competent staff in carrying out the work involved, the project included a training component. Through that compo- nent, local staff were to acquire specific skills required to maintain roads satisfactorily in the future. A review of the formulation and implementa- tion of the training component indicates that, although the planned train- ing for certain staff categories could not be completed as envisaged pri- marily due to shortages of local personnel, maintenance operations did improve as a result of the project. 8. The Terms of Reference of October 1969 for technical assistance under the project charged the consultants with implementing three separate training programs: practical courses for equipment operators and mechanics, on-the-job training for supervisory field personnel, and counterpart train- ing for senior staff (engineers and technical assistants). However, they did not direct the consultants to design incentives which would induce staff to remain in Government service after completion of training. In addition, the terms of reference did not require an assessment of the overall train- ing needs of the maintenance organization. No indication that these activi- ties took place appears in IDA files. Information about many factors crucial to the success of training efforts may be obtained through an assessment of training needs. At the time this project was formulated, IDA had not de- veloped guidelines to assist in examining the status of training require- ments and in formulating proposals to deal with the findings. Such guide- lines have been compiled over the last five years, however, and are attached as an Annex to this memorandum. 9. The consultants had not formulated detailed training proposals by the time of preparation of the Appraisal Report for the project in June 1970. Therefore, the training component was described on a "global" basis within the context and funding of a four-year technical assistance program. Equipment operators, mechanics, field personnel, and staff engineers were identified as the staff categories to receive training. Operators and mechanics were to undergo a comprehensive training program organized by the consultants. Field personnel were to receive on-the-job training by a team of inspectors from the road maintenance organization, under the supervision of the consultants. Finally, staff engineers "were expected to benefit from the expertise" of the consultants. 10. In view of the "global" approach being followed, the Appraisal Report did not discuss the numbers and levels of personnel to be trained, the duration envisaged, the methodology to be used for training equipment operators and mechanics as well as for transferring expertise from con- sultants to staff engineers, the inclusion of a training expert among the consultants, or the qualifications of road maintenance inspectors for training field personnel. Furthermore, the cost of the proposed training was not separately specified. 11. The consultants' training proposal was the subject of discussion with an IDA supervision mission in September 1970. It provided that field supervisors be trained in a school to be established and that field staff be sent abroad for specialized training, particularly in administration and management. The mission could not agree to the proposal because sufficient account was not taken of financial implications or of problems in reinte- grating trained personnel into the rigid seniority and restrained salary system prevailing for the maintenance agency. 12. Following revision of the proposal to take IDA's comments into account, training began before the second supervision mission visited Benin in March 1971. The revised proposal provided that field supervisors be trained in the Regional Training Center in Lome, Togo. It also specified that equipment operators and mechanics be trained on-the-job by the consul- tants, complemented by short courses run by personnel of the Fonds d'Aide et de Cooperation in Cotonou. Engineers were to be prepared to take over the work of the consultants through counterpart training and specialized practical training abroad. As no funds had been allocated under the proj- ect for training abroad, the Government requested IDA finance for the for- eign exchange cost. Before agreeing, IDA obtained more details on the candidates and their training needs as well as assurances that the trained engineers would return to Benin to work in the capacities for which they had been trained. 13. The PCR (para. 3.07) indicates that clerks, technicians, mechanics, and operators were trained as a result of the projectbut that shortfalls occurred in the training of the last three staff categories. It also men- tions that some local counterparts for managerial positions could not be provided because of personnel shortages. IDA staff had reported the constraints on the training program as a result of these shortages from the time of the October 1971 supervision mission. Reportedly, the shortages are primarily attributable to a change in Government at the end of 1969 and the removal or departure from office of many senior technical staff that followed. Although the turnover of junior technical personnel was generally not extensive, the changes in senior technical personnel set back the whole program to strengthen maintenance operations and necessitated repetition of much of the training effort. Training was continued under the ongoing Second Highway Project (PCR, para. 3.07), which also has experienced a shortage of local counter- parts, and is included in the proposed Third Highway Project, scheduled for presentation to the Executive Directors in FY78. 14. It is interesting to note that, at the time of negotiations for the Third Highway Project in August 1977, Government representatives commented on the Beninese experience with the assignment of counterparts to technical - 5 - assistance experts for training. They consider that the experience gen- erally had not been effective for several reasons: personality conflicts, inability of many experts to communicate their knowledge, resentment from counterparts often assigned to do boring tasks, and knowledge gaps of coun- terparts in theories to be applied. For these reasons, the representatives felt that such experts should not be asked to undertake training as a pri- mary task. Instead, they suggested that Beninese be assigned to work with technical experts so as to benefit from on-the-job training. In addition, they suggested that fellowships be provided for use, when specific training needs are identified, at the College Polytechnique Universitaire du Benin, which now trains most road personnel, or abroad. 15. IDA has formulated the proposed Third Highway Project to respond to the comments of the Government representatives. Provision will be made for on-the-job training of top and middle management of the former DPW 1/ as well as for fellowships. A list of the staff categories to receive training has been approved by the Government and is to be included in the Credit Agreement. The project also will provide for an assessment of the overall training needs of the former DPW and the preparation of a compre- hensive training program for all staff categories by consultants for imple- mentation at a later time. Inability to Complete the Planned Technical Assistance in Transport Coordination 16. In 1969, the Government had established a transport coordination agency, the Directorate of Land Transport (DLT), in the new Ministry of Transport, Posts, and Telecommunications. Technical assistance to that agency was to be provided under the project. The Terms of Reference of October 1969 (para. 8) specified that an expert in transport coordination should advise the head of the agency, study traffic flows on main roads, and formulate policies on land transport, especially rail and road coordi- nation, and road transport together with means of implementation. Because of lack of qualified local personnel and adequate funds as well as limita- tions imposed on DLT, the agency could not function as a high level body and the services of the expert were reduced from 22 to 16 months. Upon a request by the Government, IDA reintroduced this technical assistance under the Second Highway Project. During implementation, the Government requested postpone- ment because it first intended to reorganize DLT. However, reorganization did not take place as expected, and IDA agreed that the funds allocated to DLT could be used by the Directorate of Roads and Bridges in the reorganized Ministry of Public Works and Transport. During discussions regarding formu- lation of the Third Highway Project, the Government informed IDA of its inten- tion to concentrate transport coordination and certain other functions in the Directorate of Studies and Planning (DSP) of the reorganized Ministry of 1/ Now known as the Directorate of Roads and Bridges. - 6 - Transport, and IDA has agreed to include technical assistance to DSP in the proposed project. Inability of Government to Provide Sufficient Local Funds for Road Maintenance in 1973 17. The Appraisal Report for the Highway Maintenance and Engineering Project specified that road maintenance expenditures should be increased from CFAF 190 million in 1969 to CFAF 400 million in 1973 and thereafter. Upward adjustment each year to take account of inflation was not required as increases in inflation large enough to have detrimental effects on proj- ect financing had not previously been experienced. The Government was able to increase its contribution from CFAF 288 million in 1970 to CFAF 474 mil- lion in 1972 (PCR, Table 3). However, severe inflation from 1973 onwards, not foreseen at appraisal, reduced the purchasing power of the funds. The Government was not able to increase the amount further, and from 1973 road maintenance operations fell behind planned programs. As Government finan- cial resources for roads are limited, it would be desirable not to spread resources too thinly by further expanding the road network. Instead, the limited resources should be used, as much as possible, to maintain the existing road network. IV. Conclusions 18. Significant strengthening of the DPW and some improvement in main- tenance operations occurred as a result of the Benin Highway Maintenance and Engineering Project. However, due to staffing constraints, shortages of local funds, and, to a lesser extent, inadequate preparation, the project fell short of expectations concerning achievements in training in road main- tenance, in technical assistance in transport coordination, and in road main- tenance operations after 1973. In retrospect, the outcome of training and technical assistance might have been more positive if a more comprehensive preparation of the project had been made, if conditions in the country had not changed, and if incentives designed to induce trained staff to remain in Government service had been built into the project. ANNEX Page 1 of 2 PROJECT PERFORMANCE AUDIT MEMORANDUM BENIN HIGHWAY MAINTENANCE AND ENGINEERING PROJECT (CREDIT 215-DA) Guidelines for Assessment of Training Needs 1. Preparation of inventory of existing maintenance and mechanical per- sonnel and future personnel requirements for the duration of the proposed program, including: (a) established positions broken down by numbers, categories, and levels; (b) positions presently filled and vacant; and (c) additional personnel required by a certain future date broken down by year. 2. Identification of the skills and knowledge required by personnel at all levels for efficient maintenance operations. 3. Evaluation of the capability and potential, including literacy level and language proficiency, of available personnel so as to better as- sess training needs. 4. Determination of how existing personnel can be made available for retraining and upgrading training without interfering with ongoing operations. 5. Identification of possible sources of recruitment and related levels, and assessment of likely constraints. 6. Evaluation of existing training facilities and programs in the country and determination of their suitability and availability for training of maintenance personnel. 7. Determination of need for training abroad: (a) categories of personnel to be trained; (b) where training is to be carried out and by whom; and (c) duration of programs. 8. Identification of the number and types of courses/programs, short and long-term, for a certain period, including: (a) number of trainees in each class; and (b) duration of classes. ANNEX Page 2 of 2 9. Determination of the number and types of instructors required to implement the program. 10. Determination of the number and types of local technical staff to be trained to become instructors over a certain period. 11. Evaluation of existing personnel/training policies. 12. Definition of the organizational structure, functions, legal frame- work and related operating budget of a permanent Training Section within the highway administration, responsible for the preparation, implementation, and supervision of all training. 13. Estimation of the cost of the training program, broken down between local currency and foreign exchange, as follows: (a) civil works for physical facilities (if applicable and required): (i) classrooms; (ii) workshops; (iii) stores; and (iv) dormitories. (b) training equipment and materials (if applicable and required): (i) heavy road construction/maintenance equipment for the number of operators at the training facilities; (ii) machines and hand tools; (iii) training materials; and (iv) audio-visual equipment. (c) training abroad (if applicable and required): (i) cost of individual programs. (d) operating budget for the training program. 14. Determination of the Government capability to finance recurrent coats of the training program. 15. Determination of the incentives necessary to induce local per- sonnel to remain in Government service after completion of training. ATTACHMENT PEOPLE'S REPUBLIC OF BENIN (DAHOMEY) CREDIT 215-DA - HIGHWAY MAINTENANCE AND ENGINEERING PROJECT PROJECT COMPLETION REPORT I. BACKGROUND 1.01 In 1966 a Bank mission visited Dahomey to identify projects suitable for Bank Group financing. The mission recommended a compre- hensive study of Dahomey's land transport requirements, which was then financed by UNDP to assist the Government in project preparation. The Bank, as Executing Agency, awarded the contract for the study to a joint venture of two Canadian consulting firms, N.D. Lea and Associates and Lamarre Valois Int. in 1967 and the Land Transport Survey report was published in July 1969. It recommended: (i) the improvement of road maintenance; (ii) the reconstruction and rehabilitation of about 870 km of roads with the Parakou-Malanville road (about 300 km) among those with highest priority; and (iii) the closing of two inefficient coastal railway lines. These recommendations provided the basis for the formulation of this project, the first to be financed by the Bank Group in the transport sector in Dahomey, now the People's Republic of Benin. II. PROJECT DESCRIPTION The Project 2.01 The project comprised three parts: (a) A Four-Year Highway Maintenance Program (1970-1974) including: (i) reorganization and strengthening of the Directorate of Public Works (DPW), including the training of maintenance personnel; (ii) procurement of highway maintenance equipment and related spare parts; (iii) overhaul and repair of the existing highway maintenance equipment; - A.2 - (iv) procurement of equipment for DPW's Laboratory. (b) Detailed engineering and preparation of bidding documents for the reconstruction of about 318 km of highway including: (i) about 300 km of the Parakou-Malanville highway; and (ii) the sections Godomey-Abomey/Calavi and Sehou6-Massi total- ling about 18 km of the Cotonou-Bohicon highway. (c) Activation of the Directorate of Land Transport (DLT). Cost Estimates and Financing 2.02 Total capital project cost was estimated at US$4.1 million. IDA agreed to finance the foreign component through a credit of US$3.5 million signed on September 9, 1970. Retroactive financing, up to US$300,000 was to be provided to cover the foreign exchange costs of consultants who had been assisting DPW with its maintenance program since March 1970. In addition to its contribution to cover the local component of capital expenditures (US$600,000), the Government was to increase its recurrent road maintenance expenditures to a minimum of CFAF 400 million annually beginning in 1973. The Government also agreed to increase the percentage of Road Fund revenues allocated to highway maintenance from about 50% in 1970 to 100% in 1973. Special Covenants 2.03 In signing the Credit document, the Government agreed to the following special covenants: (i) To establish and maintain a Highway Planning Unit within the Department of Public Works; (ii) To reorganize and strengthen the operations of the equipment division (Service des Techniques Industrielles, STI); (iii) To ensure that resources of the Road Fund be used exclusively for the maintenance of roads, road-maintenance equipment and workshops and to make additional amounts available if necessary; and (iv) To close the Cotonou-Segboroue railway line (except the section serving the palm-oil processing plant at Ahozon) and the Cotonou-Pobe railway line within one year following the rehabilitation of parallel highways. - A.3 - III. PROJECT IMPLEMENTATION 1. Highway Maintenance Program Sequence of Implementation 3.01 The Four-Year Highway Maintenance Program (1970-74) was carried out in the chronological sequence outlined below. The Govern- ment negotiated the contract with the consultants Lea/Lamarre Valois (para. 1.01) during Credit negotiations in November 1969, and the consultants commenced work on the Program in March 1970. 3.02 The first year (1970) was spent studying the highway main- tenance needs in the country. The consultants determined the condition of the roads, the existing equipment and the workshops, as well as the availability of spare parts. Traffic counts were started throughout the country. The consultants thoroughly studied the organization of the Department of Public Works (DPW) and its highway maintenance sub-divisions. Finally, the consultants prepared the bidding documents for procuring highway maintenance equipment. 3.03 In the second year (1971), the workshops were enlarged, renovated, equipped and set in operation. Highway maintenance equipment and spares for existing equipment were procured and delivered. A training program for mechanics and operators was started. Reorganization of DPW and its Equip- ment Division was initiated. 3.04 During the period January 1972 to April 1974, the consultants consolidated and monitored the reorganization of the DPW and its Equipment Division. Existing maintenance equipment was repaired, training of both technical and semi-skilled personnel was carried out. Actual improvement of the road network was achieved through programmed maintenance operations. Reorganization and Strengthening of DPW 3.05 This operation started in the early stages of the project and continued throughout its implementation. The reorganization of DPW as shown in Annex I (proposed) and II (implemented) mainly involved the Roads and Bridges Division and the Equipment Division (Service des Techniques Industrielles, STI). In addition, a Planning Office was established, and the Soil Laboratory was reorganized and re-equipped. When the project was completed in 1974, the new administrative units, with the exception of STI, were headed by nationals. 3.06 In the Roads and Bridges Division, sub-divisions for Maintenance and for Construction were created, and both were initially headed by expatriates. Training programs were developed for the technical counterparts assigned to the project. In general, this training was successful, even with the disruptions caused by personnel changes in October 1972. - A.4 - 3.07 STI, charged with maintaining and repairing highway maintenance equipment and administrative vehicles, was also reorganized and strengthened. The division became more efficient due to the renovation of the workshops and storage facilities as well as the purchase of new shop equipment and tools assisted by two experts from the Fond d'Aide et de Cooperation (FAC), one of whom acted as chief of STI, and three equipment technicians provided by the consultants. Technicians, clerks, mechanics and operators were trained both at the Regional Training Center of Lom6 (Togo) and by the consultants in Benin. Local counterparts for the managerial positions in this division could not be provided because of a shortage of qualified personnel. It was also not possible to complete the staffing and training for positions as mechanics, operators and technicians. Thus this portion of the project had to be extended into the Second Highway Project (Credit 415-DA). Reports on highway maintenance showed that only about 25 to 30% of the equipment was out of order at the end of 1973, compared to 60% before reorganization of STI. The shops of STI have been provided with appropriate inventory systems for equipment and spares. Procurement of New Maintenance Equipment 3.08 The consultants assessed the requirements for new equipment and prepared the necessary documents for international competitive bidding. Bids were received in February and May 1971. Contracts were awarded to the suppliers who submitted the lowest evaluated bids. The total cost of these did not exceed the original estimate. Delivery was practically completed by the end of 1971. The equipment performed satisfactorily, except the 12 graders, which had been selected because their price was about 23% lower than that offered by the next lowest bidder. The performance of the graders, as well as the after-sales-service by the supplier,was unsatisfactory until adjustments to meet local conditions were made. This resulted in a three to four month delay in executing some highway maintenance operations. Repair of Existing Maintenance Equipment 3.09 Overhaul and repair of the existing equipment was slow because of lack of qualified personnel and the time lost by repair of some of the new graders before they were adjusted by the supplier. The consultants in conjunction with the FAC experts set up systems for inventory control of spare parts. In addition to the $100,000 worth of spare parts delivered with the new equipment, STI simultaneously procured spares amounting to about $300,000 for existing equipment with Credit funds. Difficulties, which arose in storing and administering these large quantities of spare parts, could have been avoided by ordering them in several lots with delivery spread over the entire period of project execution. Procurement of Equipment for DPW's Laboratory 3.10 The soil testing laboratory lacked the necessary equipment and installations to perform its function properly. The consultants assessed the additional laboratory equipment needed and prepared the documents for international competitive bidding. However, bids were received for only - A.5 - about half the equipment required. The remaining items were procured, with Association's approval, from the manufacturers at standard list prices. Delivery was completed within the first two years of project execution. Thus, the laboratory could assist the consultants who had to investigate soils and materials to prepare the detailed engineering of trunk roads under the project. 2. Detailed Engineering for Highway Reconstruction 3.11 The project included detailed engineering for the reconstruction of the Parakou-Malanville road to its original one-lane paved standard as the economically justified solution according to the findings of the Land Transport Survey in 1968. However, the new assessment made in early 1971 by the German consulting firm Dorsch Consult, which was chosen to prepare the detailed engineering, revealed that basic assumptions for the above solution had changed. Many road sections had further deteriorated; an investigation of the pavement strength led to the conclusion that the reconstruction of the road would require substantially more work than originally anticipated. 3.12 The Government then requested the consultants Lea/Lamarre- Valois to update their economic analysis of the road, which was completed in May 1971. It concluded that both the one-lane and two-lane solutions were economically justified, even with traffic forecasts taking into account possible diversion due to the introduction of navigation on the Niger River between Malanville and Port Hartcourt. Although the one-lane solution showed a higher return in quantified benefits (29% for Benin only and 40% for the Benin/Niger region) than the two-lane solution (18% and 20% respectively), the consultants recommended the latter as better adapted to modern traffic requirements yielding higher non- quantified benefits such as reduction in accident rates, smoother traffic flow and easier maintenance. The consultant's report was reviewed by the Association and found to be generally sound. The Government subsequently instructed Dorsch to carry out the two-lane design. Reviewing the choice of a one or two-lane solution caused the delay in completing bidding documents from the contract date of June 1971 to July 1973. 3.13 Due to the high cost of reconstruction of the Parakou-Malanville and parts of the Cotonou-Bohicon highways, it was agreed that these works would be financed jointly by USAID, the Government and the Association. USAID would finance the northern half of the Parakou-Malanville highway and the Association the southern half plus the two sections of the Cotonou- Bohicon road. The consultants were instructed to prepare the plans and bidding documents in two separate packages, each conforming to the regulations of the respective lending agency. All documents were completed satisfactorily and the reconstruction of these highways is being carried out under the Second Highway Project (Credit 415-DA). - A.6 - 3. Activation of the Directorate of Land Transport 3.14 In 1969, shortly before the project was appraised, the Government created the Directorate of Land Transport (DLT) under the Ministry of Public Works, Telecommunication and Transport, to function as coordinating body for transport in Dahomey. The project included technical assistance by an expert to advise in its management and to assist in studying the traffic patterns in the country and in elaborat- ing the national land transport policies including road/rail transport coordination. Lea/Lamarre Valois supplied the expert. Originally 22 man-months were estimated to be required for the expert's assignment. However, his services were discontinued after about 16 months because the Government could not find enough adequately qualified local personnel to carry out the task. This assistance was reintroduced in the Second Highway Project. 4. Consultant Services 3.15 The consultant services required under the project were rendered by Lea/Lamarre Valois for the technical assistance to DPW and DLT and by Dorsch for .the detailed engineering to reconstruct specified trunk roads (paras. 3.01, 3.11 and 3.14). The performance of the consultants was in general satisfactory. 3.16 Lea/Lamarre Valois commenced working on DPW's Highway Maintenance Program in March 1970 (para. 3.02) and in DLT about a year later. The consultants completed their assignment with DPW on April 30, 1974 after providing 244 man-months, 11 man-months more than originally anticipated. Although the additional services were rendered to DPW, further assistance to this Directorate had to be included in a Second and will most likely be re-included in the proposed Third Highway Project. Lea/Lamarre Valois' services to DLT were terminated after about 16 months in September 1972, earlier than originally scheduled (para. 3.14). The reasons for early termination of the services, as well as extension of the services to DPW, were not related to the consultants' performance 'but to the ability of the agencies to make proper use of the advice given by the consultants. 3.17 Dorsch prepared the detailed engineering and bidding documents for the reconstruction of the Parakou-Malanville road (about 320 km) and the two sections (totalling about 20 km) of the Cotonou-Bohicon road included in the project. The consultants subcontracted soil and material investigation to the DPW laboratory at the Government's request. Dorsch started work in December 1970 and completed the assignment in July 1973, about two years later than originally scheduled due to additional investigation required to determine the design standards (para. 3.12). The completed detailed engineering and bidding documents were found to be satisfactory by the Government and the Association. The reconstruction of these road sections were included in the Second Highway Project (Credit 415-DA). - A.7 - IV. PROJECT COST AND CREDIT DISBURSEMENTS 4.01 At appraisal the project cost was estimated at uS$4.10 million equivalent, of which the Credit would finance the foreign exchange cost of US$3.50 million (85%). The Government was to contribute the equivalent of US$0.60 million, the amount estimated for local cost. Final project cost amounted to the equivalent of US$4.25 million, about 5% above the appraisal estimate even though during the project period the CFAF streng- thened in relation to the dollar by a much higher percentage. Table 1 provides details of the project cost comparing the appraisal estimate and actual expenditures. 4.02 The Government's contribution to project cost was made fairly regularly and exceeded the appraisal estimate by about 25%. In addition, its recurrent expenditures for road maintenance were in general above the appraisal estimate as is demonstrated in the following table, however, since 1973, due to inflation, these allocations have been insufficient to enable DPW to carry out effective road maintenance. (in millions of CFAF) Years 1970 FY1971 1971 FY1972 1972 FY1973 1973 FY1974 1974 Appraisal estimate (at constant 1969/ 70 prices) 280 340 380 400 Actual expenditures 341 423 474 402 473 4.03 Credit disbursements (Table 2) were made at slightly slower rate than the appraisal forecast. The undisbursed amount of about $595 will be cancelled. V. ECONOMIC RE-EVALUATION 5.01 The economic evaluation of the road maintenance program was based on the estimated savings in vehicle operating costs resulting from improve- ment of road maintenance on the national network. No attempt was made to isolate benefits due to any single element such as equipment renewal, shop equipment and spare parts purchase. The economic analysis therefore compared the stream of savings in total vehicle operating costs resulting from the program with the additional maintenance expenditures, including the capital cost of the program and the anticipated increases in annual recurrent expen- ditures. 5.02 The economic rate of return of the program has been computed over the period 1971-80, which corresponds to the estimated eight year average life of the equipment which was procured in 1971 and 1972, assuming that vehicle operating costs would remain constant. The analysis indicated, with - A.8 - expected savings of 25% in the average vehicle operating costs and an expec- ted average increase in traffic of about 5% per annum, an economic rate of return of 31%1. Sensitivity analysis indicated that even with vehicle operating cost savings of 15% instead of 25%, t4e program would still yield a ratecf return in excess of 12%. Any substantial change in the economic evaluation of the project after its execution compared with appraisal time, would have to stem basically from deviations (a) in costs of investment and period of execution, (b) in traffic volumes or composition, and (c) in vehicle operating cost savings per kilometer. 5.03 After project coipletion the consultants recalculated the rate of return based on a detailed analysis of the benefits and more comprehensive infurmation concerning the quality of the pavement on which vehicles travel- led after the execution of the project compared to conditions expected with- out the project. The cost of the project was nearly that estimated at ap- praisal. Vehicle operating cost savings were almost as foreseen in the ap- praisal report (25%) except for heavy trucks, which had a higher saving (30%), thus increasing the overall average vehicle operating cost savings to about 26%. In addition, the composition of traffic shifted to a larger percentage of heavy vehicles. As a result, benefits were higher than fore- seen at appraisal, in spite of a somewhat lower than expected traffic growth due to political and economic difficulties in Benin during that period. 5.04 Depending on the lifetime of the investment and its effect beyond 1976, the consultant's calculations indicated an economic rate of return of between 42 and 232 percentVi (substantially higher than the 30 percent rate of return forecast at appraisal) and a benefit/cost ratio of between 1.55 and 2.15 at 12 percent discount rate. VI. BORROWER'S PERFORMANCE 6.01 The overall performance of the Borrower was in general satisfactory. Although the Borrower made successful efforts to find suitable personnel for the key positions in DPW and DLT, a few positions in STI still had to be fil- led by expatriates (paras 3.05 and 3.07) and the consultant's services for DLT had to be discontinued due to lack of the agency's staffing capability (para 3.14). Further assistance was therefore provided by IDA under subse- quent highway projects. 1/ The appraisal report does not define capital cost or recurrent costs as used in Table 12 of the report, but as no costs are recorded for 1970, in spite of the consultant's presence in the country since March 1970, it can be assumed that the cost for consultant services were not taken into account. 2/ The large fluctuation indicates the weakness of the rate of return con- cept compared to the cost benefit concept for measuring economic returns of road maintenance projects. - A.9 - 6.02 In accordance with the terms of the Credit Agreement, the Borrower re-established the Road Fund as an autonomous account to be used exclusively by DPW in highway maintenance. During the period of the project, a fuel sales tax of CFAF 4 per liter was deposited in a special bank account ad- ministered by DPW for the Road Fund. The Road Fund provided more than halfof the total Government budget for highway maintenance and, in addition, because of its special autonomous status was able to accumulate CFAF 289 million in reserves by the end of 1973/. The finahcing of highway main- tenance and investment expenditures in the years 1970 through 1974 is shown in Table 3. This table indicates that Road Fund revenues and road fund reserves started to decrease in 1973. The consultants, employed under the Second Highway Project, therefore, recommended reviewing the fuel tax rate to meet increasing road maintenance costs. This proposal is being considered by the Borrower. 6.03 According to the terms of Credit Agreement the two coastal rail- road lines were to be closed within a year after the rehabilitation of the parallel roadway, except for the section which serves a palm-oil processing plant at Ahozon (halfway between Cotonou and Segboroue). When the Cotonou Segboroue road section was rehabilitated under the Highway Maintenance Prog- ram, the Borrower requested that the corresponding coastal line not be closed until adequate bus service was established in the area. The Association accepted this request on condition that no further capital expenditures be made on that line, and the rates be adjusted to eliminate deficits in the operation of the line. This situation is unchanged. The Cotonou-Pobe line, running eastward along the coast and then northward to Pob6 also remains in operation, because rehabilitation of the parallel roadway has not been com- pleted yet. In addition, the Borrower now intends to extend that line to the planned cement plant of Onigbolo. VII. CONCLUSIONS 7.01 The project can be considered generally successful. By strengthening DPW it achieved its main objective of improving the country's capacity to maintain its roads. The total project cost was only 5% above the estimate, and the project adhered to its schedule reasonably well. Reviews of the country's transport sector made since the project's completion (by both the Government and the Bank) have confirmed the economic justification and priorities assigned to all project items. 7.02 As the first of a series, this project identified and prepared future activities which are included in or proposed for Bank Group highway projects. These activities relate in particular to further training of DPW staff, technical assistance to DLT, and the reconstruction of the roads engineered. 1 The project ended in April 1974 and no data are available for that date. See Table 3 sum of line (5) minus sum of line (10). PEOPLE'S REPUBLIC OF BENIN (DAHOMEY) CREDIT 215-DA - HIGHWAY MAINTENANCE AND ENGINEERING PROJECT PROJECT COMPLETION REPORT COSTS - Estimates and Actual Completion Date Total Cost Estimates (US$'000) IDA Contribution Actual Executed CopeinDt Total ofCost Project Items as of by Appraisa 1/ Actual2/ Contract Actual (US$ = CFAF 277.71) (US$1 = CFAF 225) Appraisal Actual Appraisal . Govt. 10 Total Govt. IDA I Tota.) Estimate 1. Consultants Lamarre-Valois,' Tech. Assist. N.D.Lea Assoc. Feb. 74 9-30-74 180 1,000 1,186 183 1,054 1,237 85 85 105 2. Maintenance Various Equipment Suppliers Spares and Workshop Equipment Dec. 72 31-12-73 311 1,910 2,221 454 1,667 2,121 86 79 87 3. Laboratory Various Equipment' Suppliers Dec. 72 31-12-72 4 40. 44 - 39 39 91 100 98 4. Consultant's Dorsch Final Engineer -Consult ing June 71 7-31-73 105 390 495 110 446 556 79 80 114 5. Subsistence Allowance to Consultante Feb. 74 9-30-74 - 160 160 - 292 292 100 100 183 TOTALS 600 3 500 4,100 747 3,498 4,245 85 82 105 1/ Including contingencies 2/ Exchange rate used in Bank Group in January 1976. Actual disbursements took place at rate of day of disbursement. TABLE 2 PEOPLE'S REPUBLIC OF BEN IN (DAHOMEY) CREDIT 215-DA - HIGHWAY MAINTENANCE AND ENGINEERING PROJECT PROJECT COMPLETION REPORT Schedule of Disbursements ACTUAL IDA ACCUMULATED DISBURSEMENTS DISBURSEMENTS FISCAL YEAR US$ '000 EQUIVALENT AS A PERCENTAGE AND Appraisal Estimate Actual OF APPRAISAL SEMESTER Disbursements ESTIMATE 197-. 1st 2nd 1,200 1,055 88 1972 1st 1,826 2nd 2,600 2,549 98 1st 2,843 2nd 3,350 3,099 93 1st 3,274 2nd 3,500 3,319 95 1975 1st 3,443 98 2nd 3,489 100 1976 1st 3,489 100 2nd 3,4991 100 Closing Date 12-31-74 12-31-74 1/ The remaining Credit funds amounting to US$595 will be cancelled. TABLE 3 PEOPLE'S REPUBLIC OF BENIN (DA11OMEY) CREDIT 215-DA - HIGHWAY MAINTENANCE AND ENGINEERING PROJECT PROJECT COMPLETION REPORT Expenditures for Roads, 1970-1974 and their Financing (in millions of CFAF) 1970 1971 1972 1973 1974 '(l)Expenditures including built up of reserves of Road Fund 964 1317 1073 877 1893 (2)Actual expendituresl/ 799 1131 913 766 1893 (3)- Maintenance expenditures2/ 341 423 474 402 473 (4)- Capital expenditures 458 708 439 364 1420 (5)- Road Fund Reserves built up 165 186 1 -. - (6)Financing 964 1317 1073 877 1893 (M)- Road Fund Revenue 228 246 285 _42 223 (8)- Government budget 3/ 278 349 349 274 250 (9)- Foreign Aid 403 508 375 340 1271 of which: EDF 317 - - 106 608 FAC 86. - 119 85 6 IDA - 508 256 149 657 19)- Use of Road Fund Reserves _5/ 214 64 - 1 1/ Line (1) minus line C51 2/ Includes administrative expenditures. Figure for 1975 is a budget estimate. / Current and capital budget combined. (Residual)' / Estimates based on CFAF 289 killion in reserves at the end of 1973 which were run down in two years. 5/ Almost all for capital expenditures. DAHOMEY: HiGHWAY MAiNTENANCE AND EN7iNEERING PROJECT PROPOSED ORGANIZATION OF THE DIRECTORATE OF PUBLIC WORKS MINISTRY OF,PUBLIC WORKS, TELECOMMUNICATIONS AND TRANSPORT ND PA MMN soM m I. DIRECTORATE OF PUBLIC WORKS V DIRECTORATE OF DIRE OR NDTRANSPORT(Kl DIRECOAT OF AN COLT14 W NROJADS AND BRIDGES OfVISION N UM1N EQUIPMl DIVISION STUDIES CHIEF ENdINEER CHIEF ENGINEER STUDIES EQUIPMENT CENTRAL WORKSHOP AND STORES DEPARTMENT MAINrENANCE CONSTRUCTION DEPARTMENT INSPECTION ADMINISTRATIVE DPW EQUIPMENT AMNTTV MOBILE FI/ ELD OR AA/ ZATr/ ON MAINTENANCECREW NORTHERN DI RICT CENTRAL DISTRICT SOUTHERN DISTRICT PARAKOU BOHICON COTONOU suaQiVISIONS . SUBoIVISIcNS SUBDIVISIONS, PARAKOU BONICON COTONOU OJOUGOU SAVE PORTO NOVO NATrTINGOU SAVALOU LOKOSSA RyS KARD (1) Establisaed as a separate Directoao , May 1969. Technlcal Assistsnce Expes: * Actually provided by FAC. SRequested fro. FAC by Doboe* E To be proided by consultant% - ler DA Highvay Project. Roorazaxocn mourres un, T, IA Hi2kway Project. IBRD - 4416 (2R) DAHOMEY - REORGANIZED DIRECTORATE OF PUBLIC WORKS PLANNING OFFICE DIRECTOR MMRECORDS PLANNING BRIDGES URBAN & DOCUM. ADMINISTRATION ROADS & BRIDGES URBAN & H N EQUIPMENT & ACCOUNTING DIVISION DIVISION ILVISION i-Lu--I '-' IOUI r -r-1CO 1 g MAINTENANCE CON RUCTION SUB-DIVISION SUB-DIVIS:ON I I I g mam - -mm- I.~ - ammm mmmal - - 1- - m SOILS LAB NORTHERN DISTRICT CENTRAL DISTRILCT. SOUTHERN )ISTRICT PARAKOU BOHICON COTONOU PARAKOU BOHICON COTONOU DJOUGOU SAVE PORTO. 0VO Reorganized under Credit 215-DA. NATITINGOU SAVALOU LOKOSI:A KANDI World Bank-9980 IBRD 12709 N Y G E R FEBRUARY 1977 PEOPLE'S REPUBLIC OF BENIN FEEDER ROADS PROJECT MALANVIL-LGEx Kos R ©©' Angara- ebu Fua †KAND SPorga JGound Dso Kiro. it . 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