Mauritania - Highway Maintenance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1871 PROJECT PERFORMANCE AUDIT REPORT MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) February 2, 1978 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 authorization.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) Table of Contents Page No. PREFACE PROJECT PERFORMANCE AUDIT BASIC DATA SHEET HIGHLIGHTS PROJECT PERFORMANCE AUDIT MEMORANDUM I. Background 1 II. Project Results 2 III. Points of Particular Interest 3 IV. Conclusions 8 Annexes 1. Recurrent Maintenance Expenditures, 1970-74 2. Requirements for Junior Level Personnel to Implement the 1970-74 Road Maintenance Program 3. Guidelines for Assessment of Training Needs ATTACHMENT: PROJECT COMPLETION REPORT 1. Introduction A.1 2. The Project A.1 3. Project Implementation and Execution A.2 4. Economic Re-evaluation A.8 5. The Role of IDA A.10 6. Conclusions A.11 Tables 1. Actual and Appraisal Estimates of Project Costs 2. Schedule of Disbursement 3. Road Fund Allocations 4. Schedule of Project Implementation 5. Highway Expenditures, 1968-1975 6. Fuel Consumption, 1969-1975 7. Highway Classification, 1975 Annex I. Details of the Expost Economic Analysis 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. r e PROJECT PERFORMANCE AUDIT REPORT MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) Preface This report presents a performance audit of the Mauritania Highway Maintenance Project, for which Credit 159-MAU in the amount of US$3 million was closed in January 1976. The memorandum is based on the attached Project Completion Report (PCR) prepared by the Bank's Western Africa Regional Office, a PCR prepared by the Government, discussions with Bank staff, review of project files and minutes of the Board of Executive Director's meeting which considered the project, and a three- day visit to Mauritania by OED staff in April 1977. The comments made by the Government in its PCR have been fully taken into account in the Regional PCR and audit memorandum. The assistance provided to OED staff by the Government through its PCR, discussions in the country, and comments on an earlier draft of this report, are gratefully acknowledged. On the basis described above, the audit accepts the principal conclusions of the PCR. However, it expands on the reasons why the maintenance program and the training program for junior level personnel fell short of their objectives, and discusses the problems of low equip- ment utilization and vehicle weight controls.  PROJECT PERFORMANCE AUDIT BASIC DATA SHEET MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 3.8 4.1 Overrun () - 8 Credit Amount (US$ million) 3.0 3.0 Disbursed and Outstanding 8/31/77 - 3./1 Date of Project Completion 9/73' 4/75 Proportion of Expected Maintenance Output Achieved at Completion (%) -- Betterment & Improvement - 80 -- Routine Maintenance - 60 Proportion of Time Overrun (. - 40 Economic Rate of Return (%) 11 15 Institutional Performance - Somewhat better OTHER PROJECT DATA Original Actual or Item Plan Revisions Est. Actual First Mention in Files - 8/67 Government's Application - - 9/68 Negotiations 5/69 - 5/14-19/69 Board Approval 6/69 - 6/24/69 Credit Agreement Date 6/69 - 6/26/69 Fffectiveness Date 10/1/69/2 12/1/69, 12/15/69 12/3/69/3 Closing Date 9/30/75-- 12/31/75 1/7 Borrower Government of the Islamic Republic of Mauritania Executing Agency Directorate of Public Works Fiscal Year of Borrower 1/1 - 12/31 Follow-on Project Third Highway Project Credit Number 519-MAU Amount (US$ million) 3.0 Credit Agreement Date 11/12/74 MISSION DATA Date Month/ No. of No. of of Full Item Year Weeks Persons Manweeks Report Appraisal 12/68 2 2 4 6/69 Supervision I 1/70 n.a. 1 n.a. 1/70 Supervision II 5-6/70 n.a. 1 n.a. 6/70 Supervision III 9/70 n.a. 1 n.a. 11/70 Supervision IV 3/71 n.a. 1 n.a. 3/71 Supervision V 11/71 n.a. 1 n.a. 12/71 Supervision VI 6/72 n.a. 1 n.a. 6/72 Supervision VII 5/73 n.a. 1 n.a. 5/73 Supervision VIII 5-6/75 n.a. 1 n.a. 7/75 Supervision IX 10/75 n.a. 1 n.a. 10/75 Supervision X 11/75 n.a. 1 n.a. 1/76 COUNTRY EXCHANGE RATES Name of Currency Until 6/29/73 CFAF franc (CFAF) 4 After 6/29/73 Mauritanian ouguiya (UM)- Year: 1969 Exchange Rate: US$1 - CFAF 247.0 1970 US$1 = CFAF 276.5 1971 US$1 = CFAF 275.5 1972 US$1 = CFAF 252.5 1973 US$1 = UM 44.5 1974 US$1 = Um 45.2 1975 US$1 = UM 43.2 /1 Includes exchange adjustment of US$400,000. As shown in Credit Agreement. 7- Final disbursement date 74 The Mauritanian ouguiya replaced the CFAF franc at the rate of UM 1 = CFAF 5. All local currency amounts in the audit memorandum have been converted to and are reflected in the Mauritanian ouguiya. 4 PROJECT PERFORMANCE AUDIT REPORT MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) Highlights IDA Credit 159-MAU was to support Mauritania's 1970-74 road maintenance program. The credit provided US$3 million in foreign ex- change toward a US$4.1 million project comprising purchases of maintenance and workshop equipment (73% of the actual project cost) as well as con- sultantd services for improvement of maintenance operations and training of maintenance personnel (27%). The time allowed for consultants' services was not sufficient for completion of the planned training, and the extension required explains the 19 month time overrun and 8% cost overrun for the project. While some encouraging results materialized, it was not possible to meet the project targets for the maintenance program or training of junior level personnel. Only 80% of the betterment and improvement pro- gram and 60% of the routine maintenance program were achieved, and 44% of the junior level personnel were trained. The maintenance program might have been more successful if the scope had been smaller and the training program, if closer attention had been payed during project formulation to the inadequate preparation of junior level personnel. Despite the shortfall in the maintenance targets, the re-estimated econo- mic rate of return for the project is 15% in contrast to the appraisal expectation of 11% because benefits from paved roads were higher than expected. The following points may be of particular interest: Premature expansion of the maintenance organization (PCR, paras. 3.05-3.09 and 3.11); Lack of full achievement of the maintenance targets (paras. 11-17, and PCR, paras. 3.10 and 3.12); Lack of full realization of the training program (paras. 18-23 and PCR, paras. 3.13-3.18); Low equipment utilization (para. 24); and Lack of vehicle weight controls (para. 25).  PROJECT PERFORMANCE AUDIT MEMORANDUM MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) I. Background The Transport System 1. Low population density, long distances between population centers, harsh climatic conditions, and lack of good quality materials for road- building have made provision and maintenance of transport infrastructure in Mauritania (PCR, Map) expensive and technically difficult. As a result, the transport system is presently underdeveloped and unintegrated. Three separate regional networks provide surface transport. The northern network contains a deepwater port and a railway (about 675 km). A wharf and a paved road (256 km) from Nouakchott, the capital, to Akjoukjt form the central network. The southern network includes an L-shaped road- river system, in which Nouakchott connects with Rosso via a paved road (203 km) and Rosso connects with the southwest of the country via the Senegal River's navigable waterway (about 600 km). A paved road from Nouakchott to Nema (about 1,093 km) is being constructed. The only real national network is air transport, consisting of 19 airports. Yet in terms of traffic volume, roads constitute the main transport mode. In addition to the paved roads mentioned, about 1,000 km of all-weather gravel roads and 5,500 km of earth and sand tracks carry internal traffic. IDA Support for Roads 2. IDA has provided US$12.7 million since 1964 to support the foreign exchange cost of three projects intended to assist the development of Mauritania's road sector.l/ The first Road Project helped finance engineering and construction of the Nouakchott-Rosso Road as well as a highway maintenance study by consultants. The study formed the basis of the subsequent projects. The first two projects have been completed and the third in ongoing. The credit for the first Road Project was fully disbursed before FY73. Since projects completed before FY73 are not sub- ject to performance audit, none has been prepared for that project. The credit for the Highway Maintenance Project was fully disbursed after FY73, and this Project Performance Audit Report evaluates the outcome. The Highway Maintenance Project 3. At appraisal of the project in 1968, Mauritania's road network totalled about 6,000 km, compared to about 7,000 km now. The network generally served the main centers of population and economic activity. However, access to most areas was limited to about half the year. Floods in the south during the rainy season (July to November) and sandstorms in the north during the dry season (December to June) caused traffic I/ Road Project (Credit 69-MAU of December 1964 for US$6.7 million); Highway Maintenance Project (Credit 159-MAU of June 1969 for US$3 million); and Third Highway Project (Credit 519-MAU of November 1974 for US$3 million). - 2 - interruptions and slowdowns. These interruptions were prolonged because of poor road maintenance. This was due to the maintenance organizations' obsolete equipment and workshops, insufficient operating funds, and personnel of limited capabilities and skills even to employ rudimentary maintenance techniques. 4. The Government considered betterment and improvement of unpaved roads in the south, where 80% of the population lived, to be essential for further economic development. It also anticipated the need for annual routine maintenance of the Nouakchott-Rosso Road, expected to be completed in 1969. Therefore, a road maintenance program for 1970-74 was formulated. IDA and the Fonds d'Aide et de Cooperation (FAC) agreed with the Government to support the program. IDA was to provide US$3 million under Credit 159- MAU to finance the foreign exchange costs of maintenance and certain workshop equipment, improvement of maintenance operations, and training of maintenance personnel in 1970-73. FAC was to make available about US$490,000 to finance construction of office buildings and a central workshop complex as well as purchases of additional workshop equipment. Finally, the Government was to furnish about US$5 million equivalent for local costs of the project and recurrent maintenance expenditures in 1970-73. No joint or parallel financing was arranged between IDA and FAC, and only the IDA and Government funding were formally coordinated. II. Project Results Implementation 5. The organization, buildings, and equipment for more efficient road maintenance operations were improved and upgraded under the Maintenance Project (PCR, paras. 3.01-3.11). The Equipment Division of the Directorate of Public Works was reorganized and new procedures were introduced. Four mechanical units for road maintenance (road bases) were established. The road bases carried out betterment and improvement of unpaved roads as well as routine maintenance of paved and unpaved roads. Office buildings, including a training center, and a central workshop complex (shops, ware- houses, and a maintenance station) were constructed and outfitted. New maintenance equipment was purchased and existing equipment was overhauled. 6. By the end of 1974, 80% of the road betterment and improvement as well as 60% of the annual routine maintenance targets set for the project had been achieved. While logistical problems due to the long road sections being repaired and lack of sufficient spare parts (PCR, para. 3.12) held up the work involved, four major difficulties prevented the full achievement of maintenance targets. These difficulties are discussed in Section III. 7. The training program for middle and senior level maintenance personnel was more successful than that for junior level personnel. After on-the-job and overseas training, three local counterparts were able to - 3 - take over duties previously assigned to consultants. However, expatriate personnel still play an important role in the planning of highway mainte- nance and considerable time will be required before Government forces will be able to assume this function. Training of junior level personnel did not progress well, and, to complete as much as possible, the technical assistance contract and project period were extended eighteen months. 8. About 44% of the junior level personnel ultimately received some training, which focussed on equipment operation and machinery repair. Training was expected to continue uninterrupted with finance provided under the Third Project. However, unexpected delays in project effectiveness interrupted training for several months. The training program for junior level staff is further discussed in Section III of this memorandum and PCR, paras. 3.13-3.18. 9. The need to extend training resulted in a 19 month postponement of project completion (from September 1973). The higher than expected cost of consultants' services (US$1.45 million actual versus US$1.10 million ex- pected) which resulted was responsible for the 8% increase in project cost when compared to the appraisal estimate (PCR, para. 3.19 and Table 1). The overrun (US$345,000) was financed by the Government (43%) and retroactively by the Third Project (57%). Economic Reevaluation 10. At appraisal, project expenditures on capital equipment and re- current maintenance operations were expected to yield an economic rate of return of about 11% over the eight year life expectancy of the equipment (PCR, para. 4.03). This was based on the assumptions of goods traffic of 18.5 million ton-km by 1970, increasing 3% yearly thereafter, and vehicle operating cost (voc) savings of about UM .12 per ton-km as a result of imo proved road conditions. The rate of return was re-estimated at 15% for the PCR (paras. 4.04-4.07 and Annex 1), based on the same economic life for the equipment as at appraisal and estimated salvage value at the end of the maintenance program. Also taken into account were traffic volumes and voc savings resulting from betterment of unpaved roads as well as routine maintenance of paved and unpaved roads estimated for the Third Project. Finally, consideration was given to increases in oil prices. The higher return than at appraisal was due to the relatively higher benefits result- ing from maintenance of paved roads,1/ despite the lack of achievement of the maintenance targets of the project. III. Points of Particular Interest The Maintenance Program 11. The Government's road maintenance program for 1970-74 set targets of betterment and improvement of 500 km of roads and annual routine mainte- nance of about 3,000 km by 1974 (PCR, para. 2.02). Under the Maintenance 1/ Construction of the Rosso-Nouakchott Road under the Road Project was com- pleted in 1971. Benefits from its maintenance could not be accurately assessed for the 1968 appraisal of the Maintenance Project. Project, betterment and improvement were carried out on 400 km (80% of the expectation) and annual routine maintenance was increased annually until 1,800 km was reached in 1974 (60% of the expectation). Some unpaved roads included in the project carried low traffic volumes (PCR, Annex 1, Table 1). In view of the shortages of personnel and financial resources, which materialized during the project, some concentration on the most heavily trafficked roads might have been more appropriate..1/ The primary reasons for the shortfall in maintenance were the: (a) reduction in purchasing power of local funds available for recurrent maintenance operations from 1973 onward due to inflation and increased local personnel costs, despite the Government's provision of funds for the project in accordance with or excess of the schedule agreed with IDA; (b) establishment simultaneously of four road bases to carry out operations while there were shortages of qualified personnel and, after 1973, of local funds; (c) diversion of project equipment to unscheduled activities; and (d) lack of training in maintenance techniques. 12. Through annual increases in fuel taxes and license fees, the Government provided local funds for recurrent maintenance operations in accordance with its commitment to IDA in 1970 and about 3% in excess of its commitments in 1971-74, as shown in Annex 1. By 1974, recurrent maintenance expenditures (UM 77.4 million) were over four times those of 1968 (UM 18 million) and nearly twice those of 1970 (UM 40 million). However, the purchasing power of the amounts provided was reduced by the rapid inflation from 1973 onward and the Government has not been able to compensate for the reduction, partly due to financial constraints resulting from the Sahelian drought. IDA's May 1973 and 1974 supervision missions reported that the amounts for those years were insufficient to cover planned equipment pur- chases and maintenance operations. 13. The increases in recurrent maintenance expenditures from 1973 onward were completely absorbed by the increased costs of local personnel. Therefore, insufficient funds were available for fuel, whose price had increased three-fold between 1973 and 1976, and spare parts, whose prices had risen 50% between 1969 and 1974. This contributed to low equipment utilization, as discussed in para. 24. Local personnel costs (Annex 1) grew from a quarter of recurrent maintenance expenditures in 1970 (UM 10 million) to nearly half in 1974 (UM 36 million). The Government's PCR explains that the high costs of local personnel were due to the need, for social reasons, to maintain the labor force (mostly unskilled and semi-skilled workers) at the pre-mechanization level as well as to re- cruit additional equipment operators and mechanics. 14. Maintenance output was curtailed also by the simultaneous establishment of four road bases for betterment, improvement, and mainte- nance works. The consultant's study for the project had recommended establishment of four bases because of the long distances from headquarters, 1/ Consultants are currently carrying out a study to determine appropriate maintenance levels for low-trafficked roads. - 5 - but this recommendation does not seem to have taken sufficient account of the limited resources available to support operations. The shortage of qualified local personnel and, after 1973, of local funds meant that the resources were too thinly spread over the four camps to allow completion of maintenance targets. The Government's PCR remarked that the complete absence of road base foremen with sufficient technical skills and super- visory capabilities seriously constrained maintenance operations.1! 15. This experience had been put to use in the Third Highway Project; IDA suggested, and the Government agreed, that the four bases be regrouped into two to carry out planned operations. In Spring 1977, all operations were concentrated in one base in the north. In the near future, once sufficient new equipment has been delivered, a second base will be opened in the south. In retrospect, it seems that under the Maintenance Project a gradual approach to the establishment of road bases might have been more appropriate. Work in excess of Government capabilities could have been offered to the six locally based contractors, some of whom have substantial French participation, although possibly at a higher cost than force account work. 16. Another factor which diminished the maintenance output was the diversion of project equipment to unscheduled activities.2/ Those activities included sewage disposal as well as maintenance and repair of streets in the Nouakchott area, earthworks and excavation, water supply projects, roadworks outside the project, repair of about 240 vehicles from various Government departments, and chauffeuring of officials. The Government, in its PCR, recognizes that, although many of these unscheduled activities may have their own justification, diversion of equipment contributed to the non- fulfillment of the project's objectives. 17. Finally, the lack of training in maintenance techniques reduced the maintenance output. The consultants who carried out the study for the project had recommended that Mauritanian personnel receive training in maintenance techniques. However, this training was postponed under the project because the work involved was being carried out by French technical assistance experts. Between 1970 and 1975, many experts left Mauritania. With their departure, many Mauritanian personnel who had been working with them left Government service. They were replaced by new personnel who had not received maintenance training. Since sufficient time was not left to carry out their training under the Maintenance Project, training was included in the ongoing Third Project. Under that project, training has proceeded slowly as turnover of junior level personnel has been high.3/ 1/ Foremen level personnel are said to be in short supply throughout Mauritania. 2/ These activities were explained in detail in the Government's PCR. 3/ To observe the results of ongoing maintenance operations, during OED staff's mission in April 1977 visits were made to the Nouakchott-Rosso Road as well as to maintenance workshops and stores in Nouakchott. Although past road maintenance was evident, regravelling of shoulders and rebuilding of about 2-3 km is necessary. Some large sand dunes had encroached upon the pavement, causing a hazardous situation for fast-moving traffic. At the workshop, a shortage of staff had led to curtailment of some operations. Much equipment, including some purchased under the project, awaited repair or disposal. At the stores, the system introduced by the consultants under the project was said to be in use, but items could not be located easily. In addition, due to budgetary constraints, the available range of fast-moving spares was not complete. - 6 - The Training Program for Junior Level Personnel 18. The Appraisal Report for the Maintenance Project specified that consultants were to supervise the training of existing and new equipment operators, mechanics, drivers, and other personnel for junior level maintenance positions. However, no precise training targets were given. About 44% of the junior level personnel required received some training. The inability to train the entire junior personnel complement seems to have been caused by the: (a) very high illiteracy rate of personnel undergoing training; (b) language barrier between Arabic-speaking junior level personnel and French-speaking consultants' experts; and (c) low technical background of junior level personnel. 19. The very high illiteracy rate of junior level personnel was pointed out in the Government's PCR.. A breakdown of the numbers and qualifications of existing junior level personnel as well as of the numbers of recruits needed to carry out the 1970-74 road maintenance program is presented in Annex 2. At the start of the program, 29% of the required personnel was on hand, of which 96% were illiterate, 3% were vocational school graduates, and only 1% were literate. Five of the twelve job categories (see Annex 2) were staffed, and the personnel in the five categories ranged between 11% and 86% of the number required. Of the existing workshop foremen, 50% were vocational school graduates, and of the chief mechanics, 5% were literate. All the maintenance mechanics, machine operators, and drivers were illiterate. To overcome the illiteracy problem, time was taken from project-related training to teach reading and writing. 20. The language barrier between Arabic-speaking junior level personnel and French-speaking consultant's experts was overcome by taking more time from project-related training for the study of French. Presumably this solution was chosen because the consultants did not have Arabic-speaking experts available. The PCR (para. 3.17) suggests that bilingual local trainers might have been used to greater advantage. This has been tried under the Third Highway Project, and success has been limited. Although Arabic is considered to be the national language of Mauritania, it is not the universal mother tongue. Therefore, some potential candidates still are not able to participate in training. Furthermore, religious, and some commercial, Arabic is used, which does not include a technical vocabulary. 21. The Government's PCR discusses the lack of sufficient technical background of personnel available for junior level positions. Before the project, the absence of qualified workshop staff, the lack of proper organization and a shortage of tools, was said to be responsible for the poor performance of vehicles and high proportion of immobilized vehicles. Workshop foremen and mechanics had only rudimentary technical skills. They did not have sufficient knowledge of and experience with machinery to be sensitive to proper adjustment and maintenance. Regional chiefs recruited - 7 - from these workers lacked mechanical knowledge required to carry out essential training and coordination functions. The qualifications of machine operators and, drivers also were said to be extremely low. In the Government's view, notwithstanding the training under the project, standards of performance were lower and progress in implementing the new organizational structure was slower than expected because of the insuffi- cient technical background of junior level personnel. 22. Two other factors also contributed, to a lesser extent, to the difficulties of the training program. One was the unplanned rotation with- in the Government of personnel enrolled in ongoing training programs because of their urgent need in other assignments. The other was the movement of personnel to more lucrative positions in the private sector before or after the completion of training because Government salaries and incentives were not sufficient to induce them to remain in service. 23. In retrospect, while the training included in the project was in line with recommendations of a Bank technical assistance mission of 1967 for extensive technical training, the objective of improving all maintenance operations in one project period exceeded the absorptive capacity of the Equipment Division. The formulation of the training program did not take sufficient account of the limited number and qualifications of personnel available or of the most efficient use which could be made of them. At the time of preparation of this project, IDA had not developed guidelines to assist inidentifying factors which can help to ensure appropriate formula- tion of training efforts. Such guidelines have been compiled over the last five years, however, and are attached as Annex 3. Low Equipment Utilization 24. Equipment utilization in Mauritania is low. Factors responsible include the harsh climate, shortages of fuel and spare parts since 1973, and the methods of equipment utilization and maintenance. Equipment is constantly exposed to new personnel, reflecting the extensive loss of Government personnel to the private sector. It suffers from premature wear and tear, frequent breakdowns, and numerous accidents. Also, some equipment is cannibalized and eventually prematurely scrapped in order to obtain spare parts. These problems are likely to continue until a sufficient permanent cadre of trained personnel has been built up. Lack of Vehicle Weight Controls 25. Mauritania does not have regulations concerning vehicle weights, dimensions, or axle loads. No weighing stations exist. Vehicles are heavily loaded and this is causing serious pavement damage, especially in low-lying areas during the rainy season. A priority task is to establish regulations for vehicle weights, dimensions, and axle loads that are con- sistent with those of neighboring countries. In addition, it is important to introduce weigh stations. However, in view of the shortage of qualified personnel and financial resources, this will take some time and will have to be done gradually. One weigh station could be established initially at Nouakchott and, after several years of operating experience, additional stations could be established at other locations. - 8 - IV. Conclusions 26. The assumptions concerning the capability for improvement of road maintenance operations were overoptimistic for the Maintenance Project. While the maintenance program produced some encouraging results, more might have been achieved if efforts had been concentrated on a smaller number of bases, with emphasis on maintenance of relatively highly traffick- ed roads, as was done in the subsequent project. Furthermore, the outcome might have been better if maintenance improvement had been directed initially toward routine maintenance and subsequently toward periodic maintenance. Sucessful establishment of a maintenance organization will depend upon the availability of capable personnel. The slow progress of the training program, which partly reflects insufficient attention given during formulation of the program to the inadequate prior preparation of personnel to be trained, ad- versely affected implementation of the maintenance program. The training program for junior level personnel achieved less than half the planned target proposed in the consultants' study. 27. The experience of this project points to a number of conditions required for proper road maintenance in Mauritania. Budgetary priorities for road maintenance, levels of maintenance, particularly on low-trafficked roads, and measures to control the weights of vehicles will be needed. More efficient equipment utilization will be wanted. A planned, countrywide pro- gram to locate and recruit all levels of personnel with sufficient technical qualifications will be necessary. Further training of personnel, both on- the-job and in classrooms, will be required and solutions will be needed to existing language barriers. Finally, increased salary levels or other incen- tives to prevent loss of Government personnel to a more lucrative private sector will be essential. Efforts to train personnel for road maintenance are being continued as part of the ongoing Third Highway Project. PROJECT PERFORMANCE AUDIT REPORT MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) Recurrent Maintenance Expenditures, 1970-74 UM million 1970 1971 1972 1973 1974 Total Category of Expenditures Actual % Actual % Actual % Actual % Actual % Actual % Local Personnel Costs 9.5 24 16.7 34 22.5 40 29.6 48 35.8 46 114.1 40 Operations Equipment Division 18.0 10.6 8.3 8.7 9.9 55.5 Public Works Regions 10.3 9.0 5.4 4.9 4.9 34.5 Road Camps - - 9.0 11.6 13.2 33.8 Ferries .4 1.2 2.0 1.4 1.8 6.8 Road Division .5 .4 .6 .3 .3 2.1 Subtotal 29.2 73 21.2 44 25.3 45 26.9 43 30.1 39 132.7 47 Maintenance of the Rosso-Akjoujt Road 1.4 3 5.0 10 2.8 5 4.4 7 6.5 9 20.1 7 Procurement of equipment, machinery, and tools - - 6.0 12 6.0 10 .6 1 2.5 3 15.1 5 Miscellaneous - - - - - - .8 1 2.5 3 3.3 1 Total Expenditures 40.0 100 48.9 100 56.6 100 62.4 100 77.4 100 285.3 100 Commitments 40.0 - 47.4 - 55.0 - 60.0 - 74.4 - 276.8 - Expenditures as Proportion of Commitments - 100 - 103 - 103 - 104 - 104 - 103 Source: Islamic Republic of Mauritania, Ministry of Development, Infrastructure Department, Completion Report on Road Maintenance Program, 1970/74 and IBRD/IDA Credit Agreement 159/MAU, March 28, 1975. PROJECT PERFORMANCE AUDIT REPORT MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) Requirements for Junior Level Personnel to Implement the 1970-74 Road Maintenance Program Of which: Staff on Hand Vocational Total Staff Before the 1970-74 School Staff to be Required for the Job Categories Maintenance Program Diploma Literate Illiterate Recruited Maintenance Program Foremen Workshop 6 3 0 3 1 7 Stores 0 0 0 0 6 6 Camp 0 0 0 0 4 4 Chief Mechanics 0 0 0 0 13 13 Mechanics 19 0 1 18 11 30 Maintenance mechanics 0 0 0 0 14 14 Assistant mechanics 2 0 0 2 16 18 Skilled workers 0 0 0 0 9 9 Field supervisors 0 0 0 0 12 12 Machine operators 21 0 0 21 28 49 Assistant operators 0 0 0 0 27 27 Drivers 45 0 0 45 85 130 Total 93 3 1 89 226 319 Source: Islamic Republic of Mauritania, Ministry of Development, Infrastructure Department, Completion Report on Road Maintenance Program, 1970/74 and IBRD/IDA Credit Agreement 159/MAU, March 28, 1975. ANNEX 3 Page 1 of 2 PROJECT PERFORMANCE AUDIT MEMORANDUM MAURITANIA HIGHWAY MAINTENANCE PROJECT (CREDIT 159-MAU) 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 3 Page 2 of 2 9. Determination of the number and types of instructors required tQ 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 o[ 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 capacity to finance recurrent costs 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 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT 1. INTRODUCTION Background 1.01 In 1964, during the appraisal of the First Highway Project (Credit 69-MAU, US$6.7 million) the general condition of the road network was found to be deteriorating due to insufficient mainte- nance. Funds for a maintenance study were included in the Credit, which primarily consisted of engineering and construction of 200 km of road between Nouakchott, the capital,and Rosso on the Senegal River. The French consulting firm, BCEOM, completed the study in August 1967. A year later, based on results of this study, the Government submitted a request to IDA for assistance in financing a four-year maintenance program. The project was appraised in December 1968 and the Credit Agreement (Credit 159-MAU) was signed on June 26, 1969,in the amount of US$3.0 million. 2. THE PROJECT A. General Description 2.01 The project implemented with the assistance of consultants, .consisted of a four-year Road Improvement and Maintenance Program, providing for: a) purchase of maintenance and shop equipment; b) improvement of the efficiency of maintenance operations; and c) training of personnel at all levels. 2.02 Although not stated explicitly, the expected physical output of the project was estimated at appraisal to include 500 km of road betterment and improvement works, and annual routine maintenance of about 3,000 km of the national road network. B. Cost Estimates 2.03 At appraisal, the total capital cost of the project, including taxes and duties, was estimated at US$3.8 million equi- valent, of which the IDA credit Q59-MAU) provided US$3.0 million. Recurrent expenditures,to be borne by the Government, were estimated at US$4.8 million equivalent. A cost overrun of US$345,000 - A.2 - equivalent was due to a two-year extension of the technical assistance contract from September 30, 1973 to October 30, 1975 to maintain continuity between this project and the Third Highway Project. The Government covered the equivalent of US$150,000 of the overrun and the balance of US$195,000 has been paid from the unallocated funds of the Third Highway Project (Credit 519-MAU, Table 1). 3. PROJECT IMPLEMENTATION AND EXECUTION Road Maintenance Program A. Purchase and Distribution of Equipment 3.01 The BCEOM highway maintenance study (under Credit 69-MAU) recommended creation of a central organization for acquisition and management of road maintenance equipment. A technical assistance contract with BCEOM (France) was signed on September 16, 1969. Experts arrived in Mauritania in December 1969 and began the first phase of implementation by preparing bidding documents for the acquisition of the new equipment and a list of spare parts needed to overhaul existing highway maintenance equipment. The first call for bids for equipment and spare parts was issued in May 1970, bids were opened in July 1970 and purchase orders were issued in October 1970. Equipment and spare parts were purchased with funds from both the Credit (US$2,090,000) and the Government's Road Fund (US$380,000). All new equipment was ordered with about 15% of its value in spare parts. The equipment began to arrive in January 1971 and was distributed to the four newly established highway bases, in accordance with the improvement and maintenance operations assigned to them (para 3.05). The Nouakchott base was given specialized equipment to handle the maintenance of bituminous paved roads. The other three bases received equipment adapted to mainte- nance and improvement of unpaved roads. B. Improvement of Maintenance Operations 3.02 Efficiency of maintenance operations was improved by the reorganization of the Equipment Division and creation of four centralized highway bases. Reorganization of the Equipment Division 3.03 The Equipment Division of the Infrastructure Service, within the Directorate of Public Works in the Ministry of Construction (formerly Ministry of Equipment) was reorganized and began its program in June 1970. As a first step, a new headquarters for the Equipment Division was planned and constructed in Nouakchott, near the central highway equipment maintenance workshops and warehouses financed by Fonds d'Aide et de Cooperation (FAC). FAC also financed a small amount of equipment for the sub-division workshops. Construction of the ins- tallations was completed between June 1970 and June 1972. - A.3 - 3.o The Equipment Division was headed and partially staffed by expatriates until the counterparts designated by the Ministry completed their training in France and Italy. Expatriate technical assistance was also provided by FAC. Responsibilities included pro- curement, maintenance, repair, and renewal of DPW equipment. It operated the central workshop at Nouakchott and the mobile workshops assigned to the highway bases (para 3.05), and it supervised the light repair facilities of the field subdivisions. The Technical Assistance experts introduced new accounting procedures in the central workshop and highway bases which provided adequate cost analyses. The various services of the division were run directly by the experts who occupied positions of division chief, equipment super- visor, storekeeper, and training center chief. Creation of Highway Bases 3.05 Prior to the project, all road maintenance was carried out by three geographical divisions of DPW with nine subdivisions. These subdivisions were poorly manned and only had a limited amount of highway maintenance and shop equipment. Some of the heavy equipment was, and still is, shared by more than one subdivision. The consultants' study recommended that four well-equipped highway bases be created and strategically located to accomplish the major improvement and maintenance works; and that subdivisions handle only the routine maintenance work. This recommendation was approved by the Government and IDA, and work programs for each base were established in accordance with Govern- mental priorities. The cost of operating these bases was financed by the Government. 3.06 The West Base with headquarters in Nouakchott (see Map) started operation with the arrival of the new equipment (January/February 1971). This base was designated to maintain the paved road network, comprising at that time the Akjout-Nouakchott and Nouakchott-Rosso links (the latter at the time of appraisal was under construction). 3.07 The North Base with headquarters located halfway between Akjoujt and Atar, was organized in April 1971, but was not fully operational until March 1972. It:was responsible for improving the earth/laterite roads Akjoujt-Atar, Atar-Chinguetti and Atar-Fderik (Fort Gourad). The Base constructed also an all-weather realignment of a section of the Akjoujt-Atar road reducing its length by 20 km. 3.08 The Center Base with.headquarters south of Moudjeria was started in May 1971, but was not fully operational until March 1972. It was responsible for improving the roads Aleg-Moudjeria-Tidjikja and Moudjeria-Letfatar-Djouk-Kiffa, only some of which were all-weather roads. The goal was to try to bring them all to all-veather standards. This working program was more ambitious than the one set by the Appraisal Report, which contemplated the improvement of the Boghe-Kaedi road and 50 km of unimproved road southwest of Kiffa. To accomplish this im- provement program it was planned that the Rosso maintenance subdivision and the Nouakchott base would reinforce the Center Base. This was not possible in practice and only portions of the assigned roads were improved. - A.4 - 3.09 The East Base, with headquarters located about halfway between M'Bout and Kiffa, was also started in May 1971 and was fully operational by April 1972. Its task was to improve the existing all-weather 300 km road from Kaedi to M'Bout and Kiffa, and M'Bout-Selibaby-Gouraye road. The physical output of the East Base more or less met the appraisal targets. 3.10 The output of the three bases engaged in betterment works averaged about 100 km per year, including realignment and regravel- ling. The aggregate output of betterment works over the project period was about 100 km less than the appraisal target of 500 km. Routine maintenance gradually increased from 260 km in 1971 to 1,800 km in 1974, inclusive of 459 km of paved roads from 1972 to 1974. The maintenance of paved roads network included repair and improvement of urban streets and roads in Nouakchott. Subdivisions 3.11 After the four main highway bases were created, the opera- tions of the subdivisions were limited to routine, light highway maintenance (para. 3.05). Through the combined efforts of the four bases and nine subdivisions all the country's highway main- tenance .needs were expected to be met. The Government tried to carry out the maintenance programs of the subdivisions to the best of its ability without technical and financial assistance. Climatic and geotechnical conditions of the country are such that the roads require constant attention to avoid quick deterioration. Hence, more resources were needed for road maintenance than were made available under the project. Under the Third Highway Project, (Credit 519-MAU), financing is provided to acquire additional equipment for the subdivisions and to strenthen their organization through provision of technical assistance. Problems Encountered During Implementation of Maintenance Operations 3.12 The main problems encountered during the implementation of the maintenance program can be classified in three broad categories: a) Personnel: Problems pertaining to personnel affected the progress of the training program and led to logisti- cal difficulties in maintenance operations. As DPW's lower-level staff did not know French, the training program for operators, mechanics, and other lower-level staff could not be carried out effectively (para. 3.15-3.17). As regards management and administrative positions, there was insufficient time overlap between the return of Mauritanian personnel from overseas training and the departure of the technical assistance experts. As a result, the local managers were not sufficiently prepared to assume the responsibilities of the departing expa- triate staff. The logistical difficulties (lack of shelter, food and water) concerned the resettlement of personnel at highway bases in desert areas. At some bases, employees worked three continuous seven-day weeks, and then took one week of leave to visit their families. - A.5 - b) Equipment: Long road sections were expected to be improved with only limited amounts of equipment; this posed serious logistic problems. A shortage of inspectors and maintenance personnel aggravated an already strained system when equipment had to be transported to Nouakchott for major repairs. Inadequate provision of spare parts caused further difficulties. This situation was complicated by the prolonged and awkward procedures involved in ordering spare parts through a central purchasing office. The frequent requisitioning of road maintenance equipment by Government authorities for extra-road-maintenance activities (e.g. water supply and sewage disposal services in Nouakchott and other towns), often interrupted road maintenance work,and to some degree caused shortfall in project targets. The diversion of road equipment for performing municipal services obviously points to the need to improve urban amenities such as water supply and sewage disposal. c) Finances: A Road Fund was used to finance recurrent expenditures of highway maintenance, but it was not autonomous, thereby resulting in delays in payments to personnel and suppliers. Although an "Advances Fund" was created to expedite payments to equipment suppliers, there is no evidence if it was ever used. Despite increased Government allocations to the Road Fund during the project period, the allocated maintenance funds were not sufficient to offset the effects of inflation. The financial situation was further aggra- vated by the budgetary constraints imposed by the Sahelian drought. C. Training of Highway Maintenance Personnel 3.13 The BCEOM study recommended training highway maintenance personnel at all levels and creating a training center within the Equipment Division to develop skilled personnel. The training, however, was almost entirely confined to equipment maintenance person- nel of the Equipment Division and no training was provided in the techniques of highway maintenance. The only exception was one Mauritanian counterpart, originally chosen to be trained overseas as the future Chief Equipment Inspector. He later chose to be trained in highway administration, and was first named to head the Roads and Airports Division. He was later named as the Chief of the Infrastructure Services ofDPW 3.14 The Mauritanian counterparts selected to head the Equipment Division and its Central Workshops were sent to France (Societ6 de Construction de Matfriel Routier) and Italy (ILO) for a period of about 18 months each, in 1972-73. The person later selected to be trained as the Chief Equipment Inspector was also trained in France and Italy during 1973-75. The new Chief of the Equipment Division and the new Chief of the Central Workshops took charge of their units in the latter part of 1973 and have performed competently. The Chief Equipment Inspector took office in November 1975, after the project was completed and all the experts had left the country. - A.6 - 3.15 Skilled personnel at lower levels such as mechanics, operators, clerks, drivers, etc. were trained in the Equipment Division at the training center built for this purpose by FAC. The consultants estimated that about 225 men should be trained to meet the requirements of the entire Equipment Division and the four highway bases. At the start of the project there was an existing staff of 93 employees, 89 of whom were semi-literate. This was the main source of semi-skilled personnel as recruitment outside Nouakchott was very difficult because of the problems involved in providing housing and resettlement. 3.16 The consultants proposed four training sessions for mechanics. The first took place from October 1972 to May 1973. Of the eight candidates in the session, only five completed the course. The second session ran from November 1972 to April 1973 beginning with nine candidates, but only six completed this course. The third session started in June 1973 but was not completed before the technical assistance contract ended. During successive extensions of the technical assistance contract, no major effort was made to stabilize the operation of the training center,and sessions were held irregularly. Once the BCEOM technical assistance team left the country, the Equipment Division, in collaboration with FAC made some efforts, albeit futile, to continue training mechanics. In total, there were 140 students, including mechanics, operators and drivers, but not all of them completed their training or remained with the Government. The estimated output of the total training program included 10 mechanics, 8 maintenance inspectors, 12 assistant mechanics, 50 equipment operators and drivers, and a number of workshop machine tool operators. Training requirements for equipment operators and drivers, who were trained in the field, were fully met under the project. 3.17 A major problem contributing to the slow progress of the training program was that the majority of personnel chosen for training spoke only Arabic. The training experts, on the other hand, had no knowledge of Arabic and had to begin each training session by teaching French to the trainees. There is little chance of success for any training program where trainees have to meet the linguistic requirements of the instructors before training can commence. Training programs in future will have to take the language barrier into consideration, otherwise a recurrence of the present experience is inevitable. In future it would be desirable if bilingual expa- triate staff with fluency in French and Arabic could be recruited for training programs. Another possible approach could be the intensive training of a select group of bilingual local technicians by expatriate staff; the locally trained instructors could then assume training responsibilities. 3.18 The Government extended the contract of BCEOM from September 1973 to April 1975 to continue with the training program. Although the program did not fully reach the expected goals, the results actually achieved, can be considered broadly satisfactory. - A.7 - D. Costs and Disbursements 3.19 The project had a total capital cost of about US$4.12 million of which the IDA Credit covered US$3.0 million. There was a cost overrun equivalent to about US$345,000 due entirely to the successive extensions of the technical assistance contract from the time the original contract expired (September 30, 1973) to April 30, 1975, in an attempt to provide continuity of technical assistance between the Highway Maintenance Project and the Third Highway Project (Credit 519-MAU). The Government paid the equi- valent of US$150,000 of the overrun, and the balance (US$195,000) was paid out of the unallocated funds of the Third Highway Project. Actual project costs exceeded the appraisal estimates by 8% (Table 1). The foreign exchange component of the project at completion was 81% compared to 79% at appraisal. The-total amount of the Credit was disbursed before the end of 1975 and the Credit account was closed on December 31, 1975. Except at the start of the project, disbursements kept pace with the disbursement schedule prepared at appraisal. Almost 87% of the funds had been disbursed by the end of FY74, when according to appraisal estimates, the Credit should have been fully disbursed (Table 2). E. Borrower's Performance Covenants of the Credit Agreement 3.20 Throughout the implementation of this project, the Government, to the limit of its capabilities, complied with the covenants set out in the Credit Agreement. Cooperation between the Government and IDA was excellent as was the relationship with the consultants. Government promptly named counterparts to be trained for the higher positions in the Equipment Division and facilitated their overseas training. They were immediately appointed to the positions for which they were trained when they returned. The Government also cooperated as much as possible in providing personnel to be trained by the consultants as clerks, mechanics, operators and drivers as well as hiring additional personnel for the newly organized Equipment Division and highway bases (para. 3.05). 3.21 The Government allocated specific amounts to the Road Fund in accordance with the Credit Agreement requirements. In fact, the Government's allocation to the Road Fund exceeded the minimum requirements estimated at appraisal and confirmed in the Side Letter to the Credit Agreement. However, because of world wide inflation, the escalating cost of spare parts, and the Government's complicated fiscal procedures, these amounts were not sufficient to cover replacement of equipment or spare parts (para. 3.12 and Table 3). - A.8 - Progress Reports 3.22 IDA regularly received reports on the progress of the project. These trimester reports (19 in all) served a useful purpose in identifying problems that arose during project execution. At project completion, the Government prepared a comprehensive report entitled, "Programme d'Entretien Routier, 1970-74; Contrat Cr6dit 159-MAU/BIRD/IDA - Rapport Sur l'Execution du Projet, March 28, 1975". The Government's project completion report provided a detailed account of the road improvement and mainte- nance works carried out under the project. The report compared appraisal expectations with actual project performance and ex- plained the reasons for the shortfalls in expected targets. In addition, the problems encountered during project execution were discussed in detail (see para. 3.12). The Government's -report served as the basis for the preparation of the IDA report. The preparation of the report by the Government was a worthwhile effort as it brought to light the difficulties and problems in highway maintenance as visualized by the Government. F. Consultant's Performance 3.23 The French firm BCEOM provided a five man team consisting of a mechanical engineer (team's chief), an equipment inspector, two mechanics and a store officer. Since BCEOM had already made a study of Mauritania's Highway Maintenance Needs, the project began without loss of time. The firm was well acquainted with the existing equipment inventory as well as the requirements for additional equipment and spares to overhaul the existing equipment. 3.24 The initial contract provided for 207.5 man-months of services from January 1970 to September 30, 1973. This contract was successively extended to October 30, 1975, at which time the team had provided a total of 267.5 man-months of services. The extension of consultant's services resulted in the project cost overrun discussed in para 3.19. 3.25 The technical assistance experts assigned to the project fulfilled their tasks satisfactorily. The training.of high level personnel was effectively carried out by the consultant. However, the training of personnel at the levels of mechanics, clerks and operators was less successful as discussed in paragraphs 3.15-3.17. Additional training is still needed to fully prepare Equipment Department personnel for their tasks. 4. ECONOMIC RE-EVALUATION 4.01 The primary purpose of this project was the general improvement and maintenance of the road network as necessary to support the development of economic activity in Mauritania. The direct economic benefits of the maintenance program included: (i) avoidance of increased vehicle operating costs (voc) through routine maintenance of paved roads; and (ii) reduction of voc through betterment works and routine maintenance on the non-paved network. The training program and institution building aspects of - A.9 - the project constitute significant additional benefits that would be spread over a considerable longer period of time than the duration of the project. 4.02 The project served as a useful vehicle in achieving IDA's basic objective of initiating a self-sustaining maintenance capability in Mauritania. This was accomplished through the establishment of four maintenance bases, management and technical training, and increase in local financing of road maintenance from UM30 million in 1969 to about UM80 million in 1975. 4.03 The economic evaluation of the project at appraisal yielded an economic return of 11% assuming an e'ght-year life expectancy of the capital investment and estimated voc savings of CFAF6.0 (UMO.12) per ton-km, resulting from road rehabilitation and maintenance. Traffic was estimated to reach 18.5 million ton-km in 1970 with a 3% annual growth rate thereafter. 4.04 The details of the ex-post economic analysis are pre- sented in the Annex to this report. The economic re-evaluation, in constant 1973 prices,is based primarily on voc and traffic volume estimates used in the Third Highway Project Appraisal Report (No. 493a-MAU). It should be noted, however, that the lack of relevant traffic and voc data makes an accurate determination of an ex-post economic rate of return difficult. The economic return of the project, as calculated from order of magnitude estimates of some key input parameters, reflects the most likely estimate of the rate of return. The analysis period was taken the same as the five-year project implementation period (1970-74). The average economic life of the equipment was assumed to be eight years and a salvage value of 30% of the original value was assigned to the equipment at the end of the project period. The project benefits used in the analysis 1/ comprised savings in vehicle operating costs (in 1973 prices) esti- mated as: 2/ a) 1.58 UM per pcu-km- from routine maintenance of unpaved roads, (including benefits from increased seasonal use); b) 5.25 UM per veh-km from betterment works on non-paved roads; and c) 0.53 UM per pcu-km from routine maintenance of paved roads. 1/ The voc estimates used for the Third Highway Project Appraisal were expressed in pcu-km units for routine maintenance and veh-km units for betterment works 2/ pcu - passenger car unit; it was assumed that 1 light truck - 2.5 pcu, and 1 heavy truck - 4.0 pcu - A.10 - 4.05 With the foregoing assumptions the maintenance project yields an economic return of 15% corresponding to a benefit/cost ratio of 1.06 discounted at 10%. The economic return was found to be sensitive to the incidence of benefits; a 5% decrease in benefits lowered the economic return to 11% while a 10% decrease resulted in a return of 7%. As project benefits have been estimated conservatively and only account for savings in vehicle operating costs, the likelihood that actual benefits were lower than the estimated ones is remote. Given the most probable benefit/cost ratio for the project in the range of 1.0 to 1.06, the project as executed, was marginal in terms of its economic efficiency. In the context of Mauritania, this is not unexpected, as high unit construction costs, long distances, and a narrow economic base (as reflected in low traffic activity) all combine to create inefficiency in transport sector operations. The higher ex-post economic return (15%) com- pared to the appraisal estimate (11%), despite the failure in meeting physical project targets, can be explained in terms of relatively higher-than-anticipated benefits resulting from mainte- nance of paved roads. The construction of Rosso-Nouakchott road was completed in 1971 and the benefits resulting from maintenance of this road could not be accurately assessed at the time of ap- praisal in 1968. 4.06 Since most of the equipment provided under the project was operational at the time of the appraisal of the Third Highway Project (Credit 519-MAU) in late 1973, the maintenance equipment was assumed to have a residual value of 30% at the end of project period. 4.07 Although the project failed to meet the physical targets established at appraisal, it contributed significantly to insti- tution building and prepared the framework for a self-sustaining road maintenance operation in Mauritania. A highly tangible benefit of the maintenance project was adequate and timely routine maintenance of the paved roads, (including repair of streets and roads in Nouakchott), which otherwise would have deteriorated significantly, resulting in substantial economic loss to the country. 5. THE ROLE OF IDA 5.01 During project implementation, IDA helped in preparing the groundwork for a road maintenance organization in Mauritania. Through supervision of the project, IDA contributed to project monitoring and to the identification of problems that led to the shortfall in the physical targets of the maintenance program. - A.11 - 5.02 Implementation of the project could have been strengthened by including at least one highway maintenance expert to assist DPW, in programming field operations of the four highway bases and the nine subdivisions (para. 30.5). Similarly, the training center could have been provided with more appropriate training material (e.g. audio-visual aids), and staffed with bilingual instructors speaking French and Arabic. To correct some of these drawbacks, the Third Highway Project (Credit 519-MAU) provides additional technical assistance for road maintenance, and funds for training, as well as,didactic materials. 6. CONCLUSIONS 6.01 The project was completed in April 1975, although the physical targets established at appraisal were not fully realized. The road betterment works fell short of the estimated 500 km by about 100 km; routine maintenance operations progressively increased to 800 km per year in 1973, instead of the 3,000 km envisaged at appraisal. The implementation of this project points to a number of problems pertaining to adequate highway maintenance in Mauritania, namely,shortage of manpower resources and the resultant dependence on external technical assistance for project execution; large-scale training needs; inadequacy of maintenance funds, most of which are accounted by salaries, leaving little for purchase of materials and equipment renewal; and not the least, a harsh physical environment which results in high unit costs of maintenance operations and serves as an impediment to efficient maintenance practice. Although the Third Highway Project (Credit 519-MAU) has been designed to ameliorate some of these problems, its slow execution clearly shows that it will be a long, arduous task before an efficient, self-sustaining maintenance capability will evolve in Mauritania. MAURITANIA CREDIT 159-MAU - Highway Maintenance Project PROJECT COMPLETION REPORT Actual and Appraisal Estimates of Project Costs Project Component Actual Costl/ Appraisal Estimate of Cos - Actual Cost as % of Appraisal Local Foreign Total Local Foreign Total Cost Estimate UM UM US$ CFAF US$ US$ -------- millions------ millions------- I. Equipment & 2/ 2/ Spare Parts 30.0 2.09 2.67 150 2.10 2.70 99% II. Consultant's 3/ Services 10..0 1.26 1.45 50 0.90 1.10 132% 4/ TOTAL 40.0 3.35 4.12- 200 3.00 3.80 108% 1/ Using an exchange rate of US$1:UM51.6 for actual costs and US$1=CFAF247.0 for appraisal estimate of costs. 2/ Local costs represent import duties and taxes. 3/ Estimated local expenditure, inclusive of taxes. 4/ Includes a cost overrun of US$345,000 which was partially covered through Government payments (US$150,000) and partially through financing (US$195,000) provided under the Third Highway Project (Credit 519-MAU). SOURCE: a)"Appraisal of a Highway Maintenance Project',' Report No. PTR-9a, June 4, 1969. b) Project Supervision,Reportn June 22, 1977 TABLE 2 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Schedule of Disbursement Accumulated Disbursement IBRD Fiscal US$'000 Equivalent Cumulative Actual Year & Semester Actual Total Appraisal Disbursement as a Disbursements Estimate Percentage of Appraisal Estimate 1970 1st - 2nd 41 1,000 4% 1971 1st 125 2nd 1,250 2,000 60% 1972 1st 1,800 2nd 2,000 2,800 72% 1973 1st 2,180 2nd 2,371 2,950 80% 1974 1st 2,524 2nd 2,618 3,000 87% 1975 1st 2,673 (3,000) 89% 2nd 2,971 (3,000) 99% 1976 1st 3,000 (3,000) 100% Closing Date 12-31-75 3-31-74 June 22, 1977 TABLE 3 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Road Fund Allocations Recurrent Expenditures 1970 1971 1972 1973 1974 TOTAL Estimated i) ------(In CFAF Million)---------- 200.0 237.0 275.0 300.0 372.0 1,384.0 ii) ------(In UM Million)------------ 40.0 47.4 55.0 60.0 74.4 276.8 iii)- ------(In US$ Thousand)---------- 810 960 1,100 1,215 1,490 5,575.0 Actual i)- ------ (In UM Million)------------ 40.0 48.9 56.6 62.4 77.4 285.3 ii)- ------(In US$ Thousand)----------- 820 1,000 1,500 1,390 1,720 6,430.0 June 22, 1977 SOURCE: IDA: "Appraisal of a Highway Maintenance Project, Mauritania", Report No. PTR-9a, June 4, 1969. IDA: Project Supervision Reports DPW: "Programme d'Entretien Routier, 1970-74; Contrat Credit 159- MAU/BIRD/IDA - Rapport Sur l'Entretien du Projet',' March 28, 1975, Islamic Republic of Mauritania. MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Schedule of Project Implementation Project Component Consultant or Dates of Percentage of work Supplies Contract Completion of Work Completed by the Award Actual Expected Expected Completion Date I. Procurement of 1/ Maintenance and Shop various various Sept'73 various 100% Equipment II. Consultant's Services BCEOM 6-30-69 10-30-75 9-30-73 70-80% 1/ The delivery of the first batch comprising the bulk of equipment was completed by March 1971, the second batch was delivered by July 1972 and the final batch by September 1973. SOURCE: IDA June 22, 1977 to TABLE. 5 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Highway Expenditures, 1968 - 1975 (in millions of current MU) 1/ Year Construction Maintenance Total 1968 57 18 75 1969 202 30 232 1970 136 40 176 1971 309 49 358 1972 101 57 158 1973 228 62 290 1974 149 77 226 2/ 1975 1,206 78 1,284 Source: R6publique Islamique de Mauritanie, Minist6re de 1'Equipement, Service de l'Infrastructure. Budget Fonds Routier and data supplied by the Government. 1/ Road Fund 2/ Budget estimate June 23, 1977 TABLE 6 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Fuel Consumption 1969 - 1975 (in thousands of metric tons) 1/ 1969 1970 1971 1972 1973 1974 1975- Actual Growth 1969 - 1974 Gasoil (Diesel) 62.5 82.8 79.6 85.0 81.0 85.2 93.4 6% Fuel oil 10.2 25.0 21.7 34.5 45.4 44.9 39.8 35% Heavy oil 5.5 7.2 7.5 4.0 3.0 4.8 5.0 0% Kerosene 3.4 4.4 5.4 4.2 7.8 7.9 11.1 27% Gasoline (auto) 9.9 10.9 12.2 12.5 13.6 10.8 23.&/ 2% Gasoline (aviation) 2.1 2.4 1.7 2.3 2.9 2.0 0% TOTAL 93.6 132.7 128.1 142.5 153.7 155.6 173.1 2/ of which COMINOR 67% 56% 44% 52% n.a. n.a. n.a. 1/ Government estimate based on half a year's consumption. 2/ ex MIFERMA 3/ Total of Gasoline consumption for automobiles and aviation. Source: R6publique Islamique de Mauritanie, Ministire de la Planification et du Ddveloppement Industriel, Direction des Mines et de la G6o1ogie Etude sur la Distribution des Carburants en Mauritanie, May 1975 June 22, 1977 TABLE 7 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Highway Classification, 1975 (in kilometers) Improved Not Improved % of Bituminous Passable Passable Passable Passable TOTAL Total All Year Part Year All Year Part Year National 520 579 400 1,120 215 2,834 40 Regional - 330 125 779 650 1,884 27 Secondary - 32 180 443 - 655 9 Non-Classified - 120 80 427 1,000 1,627 23 Subtotal 1,061 785 2,769 1,865 TOTAL 520 1 846 4,634 7 000 1/ % of Total 7% 26% 66% 100 1/ Difference due to rounding Source: ME, Infrastructure Department ANNEX I Page 1 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Details of the Expost Economic Analysis 1.0 The lack of'detailed traffic and vehicle operating cost (voc) data makes an accurate determination of the economic return of the Highway Maintenance Project (Credit MAU-159) difficult. The analysis that follows is based on voc and traffic volume estimates used in the Third Highway Project Appraisal Report (No. 493a-MAU). A. Project Period 2.0 The project period was taken as 5 years (1970-1974), instead of the average economic life of the equipment (8 years), as information concerning the use of remaining equipment and road maintenance activities after project completion,is not available. B. Physical Output of the Project 3.0 A review of the project completion report prepared by the Government, shows the following output of road betterment and maintenance works: Output of Maintenance Project (km) 1971 1972 1973 1974 Betterment Works on Unpaved Roads 40 140 160 60 Maintenance of Unpaved Roads (mainly routine) 260 750 1365 1396 Maintenance of Paved Roads (mainly routine) - 459 459 459 C. Traffic 4.0 In the absence of traffic counts, it is only possible to estimate order of magnitude traffic volumes. Traffic estimates for the economic re-evaluation of this project (Table 1) are derived from information used for the economic analysis of the Third Highway Project (Credit 519-MAU). A traffic growth rate of 5% was assumed for the non-paved road network conforming to a 6% increase in diesel oil consumption between 1969-1974. Traffic on the paved roads was assumed to decline from 470 vpd in 1972 to about 400 vpd in 1974 mainly due to reduced traffic demand between Mauritania and Senegal. ANNEX I Page 2 D. Project Costs 5.0 The capital and recurrent expenditures taken from IDA records are presented in Table 2. Disbursements for technical assistance were assumed to be uniformly distributed over the project period as detailed information concerning the breakdown of technical assistance costs was not available. E. Benefits 6.0 Benefits were considered to result from reduction in vehicle operating costs (in 1973 prices), and were derived from data presented in the Third Highway Project Appraisal Report No. 493a-MAU (October 30, 1974). Appraisal report estimates were increased 5% to be consistent with recent assessments in comparable countries, as follows: a) 1.58 UM per pcu-km for maintenance of unpaved roads; b) 5.25 UM per veh-km for improved non-paved roads after betterment works; c) 0.53 UM per pcu-km for maintenance of paved roads. F. Adjustment to Constant 1973 Prices 7.0 All costs were reduced to constant 1973 prices by multiplying the cost figures by adjustment factors (reciprocals of GDP deflators), given below: 1970 1971 1972 1973 1974 Adjustment Factor1l 1.19 1.18 1.11 1.00 0.88 GDP (constant 1973 prices#'12.3 12.5 11.7 12.3 14.8 GDP (current prices)2' 10.3 10.6 10.5 12.3 16.9 G. Cost Benefit Analysis 8.0 The cost benefit Analysis, based on the data shown in Table 3, resulted in an economic rate of return of 15% equivalent to a benefit/cost ratio of 1.06 at 10%. Although the ex-post rate of return is higher than the appraisal estimate of 11%, the benefit/cost ratio indicates that the project, as executed, was marginal. H. Sensitivity Analysis Effect of Reduction in Benefits 9.0 The economic return of the maintenance program showed the following sensitivity to the incidence of benefits: 1/ Adjustment factor = GDP in Constant Prices GDP in Current Prices 2/ In billions of UM from Report No. 1346-MAU - "Special Report - Proposals for a Public Investment Program in Mauritania", Dec. 14, 1976. ANNEX I Page 3 Change in Benefits Rate of Return 5% increase in benefits 19 10% increase in benefits 28 5% decrease in benefits 11 10% decrease in benefits 7 As only savings in vehicle operating costs have been taken as project benefits, the likelihood of overestimating project benefits is low. As such, the rate of return for the project is estimated to be in the range of 11-18% with 15% being the most probable value. ANNEX I Table 1 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Traffic Volumes, 1970 - 1974 Network 1970 1971 1972 1973 1974 1/ Paved Roads - 430 470 400 400 (vpd) Improved Roads 2/ (with Betterment Works) 49 52 54 57 60 (vpd) 3/ Other Unpaved Roads 21 22 23 24 25 (pcu/day) 1/ Traffic volumes assumed to decrease after 1972 due to reduced traffic between Mauritania and Senegal; lvpd is considered equivalent to 1.9pcu/day. 2/ Assuming annual growth rate of 5%. 3/ Traffic volume in passenger car units (pcu/day) and an annual growth rate of 5%. SOURCE: IDA - "Appraisal of a Third Highway Project, Mauritania", Report No. 493a-MAU, October 30, 1974. - Project File, Mauritania Third Highway Project (Credit 519-MAU). June 22, 1977 ANNEX I Table 2 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Project Costs (net of taxes) 1/ Year Capital Expenditure Recurrent Expenditure (net of taxes) (net of taxes) Equipment Technical (UM million) (US$million) (US$million) Assistance (US$million) 1970 - 0.25 - - 1971 2.09 0.25 33 0.67 1972 - 0.25 38 0.76 1973 - 0.25 43 0.95 4/ 1974 -0.63 0.25 53 1.18 11 Taxes on recurrent expenditures estimated at 30%. 2/ Disbursements for technical assistance assumed to be spread equally over 5 years. 3/ Exchange rate; 1970-72, US$1=UM50; 1973-74, US$1-UM45. 4/ Residual value of equipment=30%. SOURCE: IDA Estimates. June 22, 1977 ANNEX I Table 3 MAURITANIA CREDIT 159-MAU - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Cost Benefit Analysis Year Capital Recurrent Total Adjusted Total Benefits(Constant'73 Prices) (Constant'73 Prices) (UM millibn) (U$ mnillion) 1 0.25 - 0.25 0.30 - - 2 2.34 0.67 3.01 3.55 7.2 0.16 3 0.25 0.76 1.01 1.12 106.7 2.37 4 0.25 0.95 1.20 1.20 122.9 2.73 5 -0.38 1.18 0.80 0.69 132.9 2.95 Rate of Return = 15% B/C at 10% = 1.06 B/C at 12% 1.03 June 22, 1977 一 臣 星