Liberia - Roads and Highways Projects

Doculftet Of The World Bank FOR OFFICIAL USE ONLY Repot No. 7846 PROJECT COMPLETION REPORT REPUBLIC OF LIBERIA FEEDER ROADS PROJECT, LOAN 1664-LBR FIFTH HIGHWAY PROJECT, CREDIT 1449-LBR JUNE 21, 1981 Infrastructure Operations Division Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  AfBRLVIATIONS AND ACRONYMS AfDB - African Development Bank FRD - Feeder Roads Division (in HPW) FRG - Federal Republic of Germany MCIT - Ministry of Cowuerce, Industry and Transport MLG - Ministry of Local Government MPEA - Ministry of Planning and Economic Affairs MPW - Ministry of Public Works USAID - United States Agency for International Development VOC - Vehicle Operating Cost Vpd - Vehicles per day  FOt OFFICUAL Ut ONLY THE WORLD SANK Washington. DC 20433 US.A ONIce co ovectsr.CewaI Op-tmfr, Ivituamn June 21, 1989 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Liberia Feeder Roads Project (Loan 1664-LBR) Fifth Highway Project (Credit 1449-LBR) Attached, for information, is a copy of a report entitled "Project Completion Report on Liberia Feeder Roads Project (Loan 1664-LBR) Fifth Highway Project (Credit 1449-LBR)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment 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 disclose without World Bank authorization.  FOR OFFICIAL USE ONLY REPUBLIC OF LIBERIA FEEDER ROADS PROJZCT. LOAN 1664-LBR FIFTH HIGHWAY PROJECT. CREDIT 1449-LBR PROJECT COMPLETION REPORT Table of Contents Pate No. Preface .............................................. Basic Data Sheets .................................... i Evaluation Sumary ................................... vi I. INTRODUCTION ......... ............................... 1 II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL ... 2 A. The Feeder Roads Project ..... .................. 2 B. The Fifth Highway Project ... ................... 3 III. PROJECT IMPLEMENTATION .............................. 5 A. The Feeder Roads Project. 5 B. The Fifth Highway Project ...... ................ 12 IV. ECONOMIC REEVALUATION ...............5................ i A. The Feeder Roads Project ...... ................. 1S B. The Fifth Highway Project ...... ................ 16 V. INSTITUTIONAL PERFORMANCE ............. .............. 16 A. The Feeder Roads Project ...... ................. 16 B. The Fifth Highway Project ...... ................ 17 VI. THE CONSULTANTSO PERFORMANCE ...... .................. 17 A. The Feeder Roads Project ...... ................. 17 B. The Fifth Highway Project ...... ................ 18 VII. ROLE OF THE BANK GROUP ....... ....................... 18 A. The Feeder Roads Project ...... ................. 18 B. The Fifth Highway Project ...... ................ 19 VIII. CONCLUSIONS AND LESSONS LEARNED .......... ........... 19 TABLES 1. Feeder Roads Project -- Cost Estimate .... ...... 22 2. Fifth Highway Project -- Cost Estimate .... ..... 23 Maps: IBRD 13971 IBRD 16873 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.  (i) REPUBLIC IF LIBERIA FEEDER ROADS PROJECT - LOAN 1664-LBR FIFTH HIGHWAY PROJECT - CREDIT 1449-LBR PROJECT COMPLETION REPORT Preface This report presents a completion evaluation of the Feeder Roads Project and the Fifth Highway Projects in Liberia. Since August 1984, Bank Group disbursements have been suspended almost continuously on all loans and credits to that country, however. disbursements continued for certain exempted activities, mainly procurement and consultants. Disbursement even under these activities were suspended for both projects as of the present closing date of December 31. 1987. Under these circumstances, it was not possible to complete the civil works, and the substantial undisbursed balances remaining in both the Loan and Credit accounts of US$1.8 million and US$4.7 million respectively are now in the process of being cancelled. Thts report explores why the performance under both projects, which was executed by the same agency over roughly the same period of time, was so poor. It also highlights the lessons to be learned from these two lending operations. The PCR was produced by staff of the Africa Region. It was based on the project's Staff Appraisal Report (SAR), the President's Report, the Credit Agreement and internal Bank memoranda and reports as project implementation and issues contained in relevant files. This PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower on May 3, 1989 for comments by June 9, 1989. No comments were received.  (ii) REPUBLIC OF LIBEnTA FEEDER ROADS PRO03K T - LOAN 1664-LBR FVIP! HIGHWAY PROJECT - CREDIT 1449-LBR PROJECT COMPLESTON REPORT BASIC DATA S ITS - FEEDER ROADS PROJECT KEY PROJECT DATA Appraisal Actual or Est. Item Estimate Actual Total project cost (USS million) 16.3 11.6 a/ underrun (S) 29 Loan amount (USS million) 10.7 10.7 Disbursed (US$ million) 10.7 8.9 Cancelled (USS million) 1.8 b/ Repaid to December 31, 1987 1.8 Outstanding as of Dec. 31, 1987 1.1 Date physical components completed 06/84 12/87 Proportion completed by above date (2) 100 41 c/ Proportion of Time Overrun (Z) 0 75 Economic Rate of Return (Z) 17 d/ Institutional performance poor poor OTHER PROJECT DATA Original Actual or Item Plan Revised Est. Actual First mention in Files or Time Table 11/76 Appraisal 05-06/78 Negotiations 22-26/01/79 22-26101179 Board approval 03/04/79 03/04/79 Loan Agreement Date 04/04/79 04/04/79 Effective Date 04/30/79 04/30/79 Closing Date 12/31/84 12/31/86 12/31/87 Borrower Republic of Liberia Executing Agency Ministry of Public Works Follow-on Project Name Fifth Highway Project Credit Number Cr. 1449-LBR Amount (USS million) 11.4 Credit Agreement Date 02130/84 Fiscal Year of Borrower July 1 - June 30 CUMULATIVE, ESTIMATED AND ACTUAL DISBURSEMENTS (US$ MILLIONS) FY 1979 1980 1981 1982 1983 1984 1985 1986 1987 Appraisal 0.1 2.4 5.3 7.3 9.5 10.7 Actual ' 0.0 0.5 2.2 2.3 3.6 3.6 4.5 6.6 8.9b/ Act. as Z of App. 0 23 41 31 38 33 42 61 82 a/ Only 41Z of civil work was completed. b/ US$1.8 million to be cancelled in FY89. c/ 2 of feeder roads constructed/improved. d/ Data for formal ERR re-evaluation not available.  a<sszo na No.of No. of Date of Item Honth/Year Uoeks persons Hanweks Rto rting Identification 12175 0.3 1 0.3 12/22/76 04109. Identification 10177 2.5 1 2.5 04/13.08/09 Preparation 02/76 1.0 1.0 11124/77 03102178 Preappraisal 02/78 2.0 1 2.0 03121178 Appraisal 04178 1.0 2 2.0 06/15178 Total 6.8 7.8 Supervision 1 03179 0.5 1 0.5 03122179 Supervision 2 07179 1.0 1 1.0 07103/79 Supervision 3 12/79 0.5 1 0.5 12128179 Supervision 4 03/80 1.5 1 1.5 03121/80 Supervision 5 11/80 1.5 1 1.5 12/03/60 Supervision 6 02/J1 1.0 1 1.0 02123181 SupervisioA 7 06J81 1.0 1 1.0 07103181 Supervisiao 8 09/81 0.5 1 0.5 101061Sl Supervision 9 l1/81 1.5 1 1.5 ll/16l/ Supervision 10 01182 0.5 1 0.5 02/01/82 Supervision 11 03/82 1.5 1 1.5 04/14/82 Supervision 12* 06/82 0.5 2 1.0 08117/62 Supervision 13* 03/83 1.5 2 3.0 07106/83 Supervision 14 11183 1.5 2 3.0 02102/84 Supervision 15 03184 0.5 1 0.5 05/18/64 Supervision 16 10184 0.5 1 0.5 11/30/84 Supervision 17 12/84 0.5 1 0.5 12114/84 Supervision 18* 12/84 1.5 2 3.0 12/27/84 Supervision 19 02/85 0.5 1 0.5 03/26/65 Supervision 20* 05/85 1.5 1 1.5 07/02/65 Supervision 21* 05/85 1.5 1 1.5 07/25/85 Supervision 22** 02/86 1.5 2 3.0 03128186 Supervision 23 05186 0.5 2 1.0 02121/86 Supervision 24 11/86 1.5 1 1.5 12/24186 Supervision 25*" 04/87 1.5 2 3.0 05113/87 Supervision 26 11/87 0.3 1 0.3 12103/87 Total 27.0 33.8 * Includes Loan 1156. Loan 1573/Credit 1311-LA and Credit 1449-LBR. **Includes Credit 1449-L8R. Staff Input (Staff Weeks) Fer Roads (Loan 1664) C7 FYV7 FY79 F!M FY51 FY62 FY32 FY54 FY5 FYN6 FY37 FYN TOTAL Pr-ppra ll *4. 10.5 .6 15.4 Appraisal 1.2 19o. 2160 N.gat)atIen 6.5 6.5 Supervision 8.2 6.6 9.4 14.0 4.4 0.5 12.2 6.2 6.4 9.e 0i11 Othr .7 .6 .. 4.2 .1 5.7 TS"I 4.5 12.1 31.1 7.1 9.4 14.9 5.5 U.9 12.2 6.2 6.4 9.6 185.5 COUlNTY EXCAN RAT Appraisal Year Average 1977 US$1.00 - Lib$1.Oo During implemntation period 1979-87 US$1.00 - Lib$1.00  - iv - REPUBLIC OFP LIBERA FEEDER ROADS PROJECT - LOAN 1664-LBR FrITH HIGHY PROJECT - CREDIT 1449-LBR PROJECT COMPLETION REPORT BASIC DATA SHEETS - FIFTP HlGHWAY PROJECT KEY PROJECT DATA Actual or Appraisal Estimated Itea Estimate Actual Total Project Coot (USS million) 19.4 7.87 I/ Underrun (C) 49 Credit Amount USS million) 11.4 12.75 21 Disbursed (USS million) 11.4 6.7 3/ Cancelled (USS million) 0.0 6.05 Date Physical Components Completed 12/31/87 12131187 Proportion completed by above date (C) 100S 53S Proportion of Time overrun (Z) 0.0 0.0 Economic Rate of Return (7) 100S N. A. Institutional Performance Poor Very poor OTMM PROJECT DATA Actual or Original Estimated Item Plan Revised Actual Pirst Hention in Files or Time Table 10/79 Appraisal 05/80 09/82 Negotiations 12183 12/83 Board Approval 05J81 03/20/84 Effective Date 07/30/84 08/08/84 Closing Date 12/31/87 12/31/87 Borrower Republic of Liberia Executing Agency Ministry of Public Works Follow-on Project None Fiscal Year of Borrower July 1 - June 30 CMWLATIVE. ESTMATED AND ACTUAL DISBURSEMENTS (US$ millions) FY 1984 1985 1986 1987 1988 Appraisal 1.4 5.4 8.3 10.4 11.4 Actual 1.3 1.8 3.5 3.6 6.7 Actual as Z of Appraisal 92 33 42 35 59 1/ Local Component SAR Estimate 2/ SDR 1.0 * US$1.04587 3/ SDR 1.0 - US$1.16367  Staff Input (Staff Weeks) Fifth Hihwey (Credit 1449) FY77 FY73 FY79 FYgo FY81 FY82 FY88 FY64 FY85 FY68 FY8? FY66 TOTAL Pro-Appraisal 2.9 12.9 1.4 27.9 6.9 51.9 Appe,ieel 25.e 8.7 33.7 !.e.0I tion 14.6 14.6 SugrviseIo 1.9 9.8 6.3 7.1 2.1 29.5 Oter .3 .9 .2 .3 .8 1.1 .0 8.2 18.9 Tena .3 2.9 16.0 1.7 27.8 *J.0 25.2 17.9 6.3 7.1 2.1 169.0 mnssrow am Hzth1 Rubr of so. of Date of Itm Year Weeks 11 PeForems Kanwks Reoertins Identification 10179 2.0 2 4.0 12/21/79 * 01180 2.5 2 5.0 02/01/80 * 03180 1.0 I 1.0 05/23180 * 11/80 1.5 3 4.5 01116/81 Preappraisal 11181 1.0 2 2.0 12/16/81 * 03/82 2.0 3 6.0 04126182 07/82 0.5 2 1.0 07/17/82 * 09/82 0.2 1 0.2 09/06182 Appraisal 09/82 2.5 2 5.0 02121184 Post Appraisal 12182 0.5 1 0.5 12/20182 TOTAL 13.7 28.2 Supervision 1 12J82 0.5 1 0.5 12120182 2 03183 0.5 2 1.0 05126183 * 3 03184 2.0 1 2.0 05/16/84 * 4 08t84 0.3 1 0.3 5 10/84 0.3 1 0.3 11/16184 Ol 6 12184 1.0 2 2.0 12114/84 7 02183 0.2 1 0.2 03126185 8 05/85 1.0 3 3.0 07120185 * 9 11/85 1.0 2 2.0 * 10 02186 1.0 2 2.0 03126/86 * 11 05186 0.5 2 1.0 07121186 * 12 11/86 1.0 1 1.0 13 04/87 1.2 2 2.4 04/00/87 * 14 11187 0.5 1 0.5 12124187 TOTAL 11.0 18.2 1/ All missions covered Feeder Roads Project COUNR Rom M&TR Appraisal Year Average 1982 US$1.00 - Lib$l.00 During Implementation Period 1984 - 1988 US$1.00 - lItS1.00  (vi) REPUBLIC OF LIBERIA FEEDER ROADS PROJECT - LOAN 1664-LBR FIFTH HIGHWAY PROJECT - CREDIT 1449-LBR PROJECT COMPLETION REPORT EVALUATION SUMYARY Introduction and Objectives 1. The Feeder Roads and Fifth Highway Projects aimed at upgrading road sector institutions and rehabilitating and maintaining part of the country's road network (paras. 2.02-2.05 and 2.08-2.09). Both projects were to be executed by the same agency, the Ministry of Public Works (MPW) (para 1.05). Because of the Bank Group's frequent suspension of disbursements in Liberia, the latest in December 1986, the completion of the feeder road project was delayed beyond its closing date, and the civil works componeats of both projects in particular, were only partly completed. The undisbursed balances in both the Loan and Credit accounts are now in the process of being cancelled (paras 3.29 and 3.44). Implementation Experience 2. As the Feeder Roads Project was started first, its civil works were about 402 completed, while for the Fifth Highway Project only about 281 of the regravelling and 1OZ of the routine maintenance were completed. Because payments for consultants and purchases of equipnvmnt were only partially affected by the suspension of disbursements, riore irogress was made on these components than on civil works. Performance on civil works also suffered because of a critical shortage of local currency, and the limited capacity of the MPW (paras 3.06, 3.10. 3.13 and ?.42). R,sults 3. Overall, performance of the Borrower under both projects must be rated as poor. It is doubtful that much progress in the way of institution building has been accomplished, given the difficult circumstances under which the projects were carried out (para 5.08). 4. The Bank Group's performance was mixed; in earlier years staff was changed frequently, but after mid-1984 a concerted effort was made to improve the frequency and quality of supervision. The Bank made a number of constructive changes in the Loan/Credit Agreements to assist both projects. However, no amount of assistance could overcome the devastating effect of a general suspension of disbursements and a shortage of local funds on project execution, in the light of the deteriorating economy of Liberia (paras 7.02-7.08).  (vii) Sustainability 5. Due to the limited project achievements and macro-economic conditions, the prospects for *wstainability are poor. Institutionally, the Ministry of Public Works deteriorated over the life of the projects (paras. 3.04-3.26, S.30-3.39 and 5.01-5.08). Findings and Lessons 6. Most of the Loan/Credit funds for both projects were used for consultants and procurement, and little for construction work which was the largest component in both projects. The Bank should carefully assess the disastrous effect on its ongoing projects when it suspends disbursements for non-repayment of earlier loans. Suspension is usually brought about because of the country's inability to repay its debts, and meet current obligations. Thus suspension only adds to the difficulties of executing ongoing projects, and invites even more adverse performance. Perhaps at the time of a suspension, the Bank should make a decision to either continue to support its ongoing projects fully, or withdraw completely and shut them down (para 8.06). 7. Among the lessons learned are the following: i) Given the adverse effects of a general suspension of disbursements on its on-going projects in a country like Liberia, the Back should consider using letters of credit more frequently under these circumstances to finance contractors and consulting services as well as for procurement of goods; ii) every effort should be made to avoid frequent changes of Bank supervisory staff and to carry out supervision missioas on a regular basis on projects where difficult execution problems are being experienced, and iii) more use should be made of international contractors to carry out civil works rather than relying on the departmental forces of understaffed and underfinanced Government executing agencies (paras 8.03-8.11).  REPUBLIC OF LIBERIA FEEDER ROADS PROJECT - LOAN 16 4-LBR FIFTH HIGHWAY PROJECT - CREDIT 1449-LBR PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The Bank has participated in Liberia's road subsector since 1964, when the First Highway Project. Loan 368-LBR (US$4.25 million) was approved. A total of six Loans/Credits including the Fifth Highway Project, have been made totalling US$74.4 million. 1.02 In the late 1970s, the transport sector of Liberia consisted of 6,200 miles of road network, 300 miles of privately-owned railways, four seaports and one international and 13 domestic airfields serving regular local flights. The road network was composed of 366 miles of public and 93 miles of private paved roads, 2,084 miles of g-avel all-weather and 2,276 miles of earth dry weather public roads and 1,381 miles of gravel and earth surface private roads. The network was far from adequate to accommodate the traffic levels and development needs of the country. 1.03 The Government's objectives in the road subsector aimed at i) postponing investment in new road construction and increasing emphasis on upgrading existing primary and secondary roads; ii) improving performance in road maintenance; and iii) developing feeder roads in support of the priority sector, agriculture. The proposed public expenditure for the Transport Development Plan for the 1981/82-1984/85 period was set at US$159.3 million, of which the roads sector allocation was 68Z (US$109.0 million). The Plan, even though in the right direction, was optimistic in terms of local funding available and implementation capacity. 1.04 In the past, road construction and maintenance in Liberia had been financed largely by foreign lending, with the Bank Group, United States Agency for International Development (USAID), the Federal Republic of Germany (FRG) and the African Development Bank (AfDB) as principal sources. Consistent with the Development Plan to expand and maircain feeder roads, in 1979 the Bank provided a US$10.7 million loan for construction/ improvement and subsequent maintenance of feeder roads. In 1984, the Association made a US$11.4 million credit for the Fifth Highway Project to strengthen MP`'s management, carry out a three year road maintenance program and provide technical assistance. By the closing date of December 31, 1987 of both these lending operations, about 82Z of the Loan and 59Z of the Credit had been disbursed. 1.05 The executing agency for both projects was the Ministry of Public Works. However, during execution some of the responsibility for the Feeder Roads Project was transferred to the Ministry of Local Government (MLG) (para 3.02). 1.06 This PCR was prepared by Bank staff, based on information obtained from the Staff Appraisal Reports and from review of Bank files,  - 2 - including supervision and progress reports and other correspondence. The Borrower did not provide the Project Completion Reports called for under Loan/Credit Agreements and no Bank mission was sent out for the purpose of preparing the PCR. II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL A. Feeder Road Prolect Identification and Preparation 2.01 The Feeder Roads project was discussed between the Bank and the Government in December 1976, by a Bank identification mission. Agreement was reached on the strategy for the preparation of the Project. in 'ine with the Government's transport sector investment plan. The November 1977 preparation mission report identified the main components of the proposed project. 2.02 The following issues were highlighted in the project brief and were duly addressed by the pre-appraisal mission of February 1978: (a) the proposed feeder road program indicates the means which would be used to define the location, classification and standards for the road construction program proposed together with an elaboration of the basis for selecting priorities; (b) review the sources of trained and experienced manpower likely to be available in MPW and in private industry for managing and executing the project, and to indicate how the expected deficiencies can be made up by training and by technical aide; ,nd (c) consider what modifications might be necessary in timing the execution of- the project so that it and the other functions of planning, constructing and maintaining roads in Liberia can be undertaken without excessive strain on MPW and the local constrv:tion industry. A,^Draisal 2.03 The project was appraised in May/June 1978. The principal objective was to continue assisting Government in building and improving feeder roads necessary to achieve its rural development goals. In so doing, the project vas to establish a feeder roads institution in the MFW, train the staff in planning and maintaining the feeder roads and instigate closer cooperation among Government agencies on feeder roads. Other objectives were to improve overall transport planning and coordination, and to provide a basis for developing the domestic road construction industry.  -3- 2.04 The project components includeds (a) A four-year program for the construction/improvement and subsequent maintenance of about 700 miles of feeder roads. plus the maintenance of an additional 200 miles of existing feeder roads; (b) assistance to the domestic contracting industry; tc) studies for the follow-up feeder roads program and monitoring of project progress and its socio-economic impact; (d) assistance to the Bureau of Transportation in the Ministry of Commerce, Industry and Transport (MCIT); and (e) training for local staff including an overseas scholarship. 2.05 The Loan was to assist in financing the following: (a) purchase of road construction and maintenance equipment, spare parts, vehicles, office equipment, workshop tools and survey equipment; (b) purchase of materials and supplies; cc) construction of workshops and office buildings; (d) survey and design of about 250 miles of feeder roads by local consultant's and construction of these roads by local contractors; (e) tecbnical assistance and consultancy services; and (f) an overseas scholarship. The project was expected to be completed by June 30, 1984. B. Fifth Hig.hwa Proiect Identification and Preparation 2.06 The project was first discussed between the Bank and the Government of Liberia in September 1979, five months after the Feeder Road Project became effective. However, appraisal did not take place until September 1982 because of the increasing shortage of local funds and the fast decline in the country's economy. As a result of this, the composition and scope of the project was reduced by 70Z from US$64.0 million in 1979 to US$19.3 million at appraisal. 2.07 A Five-Year Highway Maintenance Program, developed by consultants under the Fourth Highway Project, suggested an investment level  - of US$68.0 million or USS100o0 million including salaries. In the September 9, 1982 Project .Brief meeting, the Bank. vhile agreeing to the basic concept of the Program, found the proposed investment level unrealistic in size and scope given Government's financial constraints and implementation capability. Based on MPW's views on the effectiveness of past technical assistance, it was agreed to limit the technical assistance component under the project to assistance needed to remedy MPS's institutional shortcomings. Appraisal 2.08 The project was appraised in September/October 1982. At the time the Project was identified, the proposed project was to continue upgrading the primary network by paving road sections identified and prepared under earlier projects, and further improve road maintenance. However, in view of the Government's limited ability to provide counterpart funds for new road construction, the deterioration in MFW's management capability and the inadequacy of present maintenance operations, it was agreed with the Governmeut that the proposed project should focus on: (a) strengthening of MPW's technical and financial management capability to ensure efficient use of scarce available resources for the development anc maintenance of Liberia's public road network; and (b) preservation of past investments in highway infrastructure by securing adequate funding for minimum routine maintenance and by taking a first step towards elimination of the periodic maintenance backlog. 2.09 To attain the above objectives within the prevailing local funding constraints, the proposed project consisted of the following: (a) the development and implementation of a medium-term program for improvement of MPW's managerial and financial accountability, including related technical assistance and training; (b) a three-year road maintenance program to include: (i) routine maintenance by force account to cover the all-weather road network (2,450 miles) and to gradually expand to include the dry-weather network (2,280 miles); (ii) periodic maintenance of about 450 miles of gravel roads by force account (350 miles) and by contract (100 miles); (iii) basic rehabilitation of workshop facilities, including replacement of ancillary equipment and hand tools;  - 5 - (iv) limited additions to the road maintenance equipment fleet and overhaul of some of the exiting equipment. (v) consultant services tos (i) asuist the Operations Bureau in the MPW in improving the efficiency of road maintenance operations, (ii) prepare, in collaboration with the Programing and Planning Bureau (PPB). in the MPW, a follow-up maintenance program, and (iii) audit project expenditures; and (vi) fellowships. The Project was expected to be completed by December 31, 1986. III. PROJECT IMPLEMENTATION A. Feeder Road Proiect 3.01 The Project was approved by the Board on March 4, 1979, it was signed on April 4. 1979 and become effective on April 30, 1979. There were no special conditions for Loan effectiveness. 3.02 In April 1980, one year after the Feeder Roads Project became effective, there was a change of Government and new Ministers were appointed in different ministries. Four different Ministers of diverse experience, have directed the MPW over the life of the project. Several of the senior and middle-level staff were also promoted and transferred within the Ministry. These changes affected the progress of the project, until the new appointees became familiar with their new responsibilities. In 1982, the transfer of the main responsibility for feeder roads from MPW to MLG created further administ-atives problems (para 5.01). 3.03 In September 1982, the Loan Agreement was amended to add new components and to increase the percentage of disbursements under some of the project components. The project closing date was extended by two years to December 31. 1986. In August 1984. the Bank suspended disbursements of all projects in Liberia due to arrears of repayments. However, disbursements continued up to the final closing date of the project for civil and consultanting contracts in progress; and for goods shipped and delivered, as they from time to time, were exempted from the general suspension. 1. Civil Works 3_04 MPW was to construct/improve 450 miles of feeder roads using two new and one existing force account brigades. The brigades' equipment, spare parts, materials and supplies and workshop and office facilities were to be financed from the proceeds of the Loan. The contracts for the purchase of the equipment were signed in December 1979, seven months later than the appraisal schedule. Portions of the equipment ordered were  delivered in March 1980. In May 1980, when the rest of the order was expected to arrive, the supplier requested a cancellation of the procurement contract, stating it would no longer be in a position to provide after-sales services (para 3.16). This cancellation resulted in an imbalance in the brigades' equipment fleet, and became one of the main reasons for an average of 18 miles output per brigade per year as compared to the 50 miles production rate estimated in the appraisal report. 3.05 The two new force account brigades were mobilized in mid-1980, but were not in full operation until November 1982, because of shortage of local funds. The existing brigade started work in mid-1983, three years later than scheduled at appraisal. The three brigades continued operating over a long period with unbalanced equipment and, at project closing date, completed 260 miles, representing 58Z of the planned 450 miles. The actual construction cost was US$21,400 per mile as compared to the appraisal estimate of US$16,700, an overrun of almost 30Z. 3.06 The performance of the brigades was affected by a severe and persistent shortage of supervisory and operational staff; a critical shortage of materials and supplies such as fuel, lubricants and spare parts; frequent change of key headquarter's and brigades' level staff; and ineffective logistic support. 3.07 Out of the 700 miles of feeder roads, 250 miles vere to be constructed/improved by domestic contractors following local competitive bidding procedure acceptable to the Bank. The soils/materials investigation and bridge designs for the roads were to be carried out by HPW, while the field location survey and geometric and pavement designs were to be carried out by consultants. The MPV did not start its share of the design activities until the first half of 1981. A local consultant firm was engaged in December 1979 to do the design of the first 54 miles in 150 calendar days. The quality of the consultant's work was low early in the contract period and later the firm went out of business before the design was completed. The designs for two roads were completed in June 1985 by MPW staff, assisted by 4 consultant, six years after the time specified in the appraisal report. 3.08 MPW engaged a consultant in August 1984 to assist in design, to process bids, to train its staff in contract supervision and to train domestic contractors. Four contractors were prequalified out of the eight who indicated their interest. Two contractors were awarded contracts for each of the two designed roads in October 1985. The bid amounts were US$1.6 million for 14.2 miles and US$1.4 million for 14.8 miles, the average of which was 3.5 times the US$20,500 per mile cost estimated in the appraisal report. Both contractors completed the work within the contract time. The quality of work of the two contractors was satisfactory and the experience gained should enable the two firms to compete with international firms. 3.09 In line with the objective of developiub the domestic construction industry, the following provisions were made for the two contracts to alleviate some of the common constraints usually encountered by domestic contractors;  (a) waiver of performance bond requirements; (b) reduction of the retention money to 5 as compared to a normal 10? requirements; and (c) provision for increased interest free mo''lization advance loan (252) with collateral to ensure the loan. This enables the two contractors to repair their existing equipment in order to start the work. 3.10 In total, 289 miles of feeder roads were constructed/improved in seven year by both force account and contractors as compared to planned 700 miles in four years. The accomplishment on the average was only 41? of the planned target at 732 of total cost, in 175Z of the estimated time. The total cost was USS7.7 million or an average of US$26,900 per mile, while the appraisal estimate was to construct/improve 700 miles at a total cost of US$12.6 million an average of US$18,000 per mile. This represents a 49? increase in US$ in per mile cost. 3.11 The force account brigades were to be equipped and funded to carry out the annual reshaping of the roads they built, and other selected roads within or close to their operating areas. The contractors were to maintain the roads they constructed for one year. After this period of maintenance provision was over, the roads were to be handed over to MPW to carry out periodic maintenance with its own forces. The financing of routine maintenance was to be shared among the local communities by contributions of free labor and/or cash. MPW9s district engineers were to have overall responsibility for technical supervision. 3.12 The Government. through the MLG, was to organize the local communities directly benefitting from the roads, to participste in the routine maintenance of the feeder roads. In March 1979, a Bank consu'tant (sociologist) visited Liberia and highlighted the main problems in encouraging the local communities to participate in routine maintenance as follows: (a) shortage of manpower at the local level; (b) shortage of funds for routine maintenance; (c) 'the coordinating problems between MPW technical assistance and MLG administrative supervision, between routine maintenance and periodic maintenance, and during peaks in the agricultural cycles and peaks in routine maintenance activitiess; (d) possible weakening of the approach proposed because of association with the former requirements of involuntary contributions of labor and cash'; and (e) dangers of progressive decline in motivation, particularly if land in the area moves into the hands of outsiders, or if other promised maintenance inputs do not materialize.  -8a - 3.13 In later 1979, a joint coinittee formed from representatives of MPW and MLG tried to organize the local comunities to participate in routine maintenance of the roads. The reaction of the elders was positive whereas the younger generation adamantly opposed the idea. It was finally decided that individuals be hired and paid directly by the MPW to carry out the routine maintenance of the feeder roads. The MPU was not able to make meaningful progress in maintaining the constructed feeder roads because: (a) there was a persistent critical shortage of local funds; (b) Government's freeze on hiring, again because of shortage of local funds; (c) requirements that Government's ministries make a 15Z saving on their previous year budget; and (d) critical shortage of qualified middle and lower-level staff due to the closure or phasing out of the Camp Mechlin Training Center financed by the FRG. 3.14 The plan, under the project agreement, was to bring the overall responsibility for feeder roads under the MPW. Earlier, there was a move in this direction; however, in late 1982, the responsibility for the construction and maintenance of a portion of the feeder roads was passed to MLG. This action seems to have been spurred by a decision made by the Government to distribute the equipment purchased (about 200 units) under a US$18.4 million Japanese commodity loan. This transfer of responsibility will have the long-term effect of spreading scarce human and physical resources too thinly, lowering output, and reducing quality standards. 3.15 MPW was to complete the design and construction of workshop and office facilities for the brigades by December 1979. In mid-1980, MPW started the construction of the two workshops and offices by force account. Because of delay of completion of these facilities, the brigades were not provided with the appropriate shelter and repair space fer over one year, and this reason among others, contributed to the accelerated deterioration of the equipment. 2. Procurement of Equipment. Vehicles and Spare Parts 3.16 Equipment, vehicles, spare parts, and materials and supplies were to be procured through international competitive bidding in accordance with the Bank's guidelines. Bids for the bulk of equipment, vehicles and spare parts were advertised on April 23, 1979, with a bid closing date of May 31 of the same year. Four to six bids were received for the different types of equipment and the bids were evaluated and contracts were awarded foilowing the Bank's no objection. The first group of equipment (about half the value ordered) were delivered in March 1980, mostly from stock in Liberia. In May 1980. when the balance of the equipment ordered was expected to be delivered, the supplier asked the Government to cancel the procurement contract (para. 3.04). The undelivered equipment consisted of  - 9 - 35 units which included all dump trucks (18 units), all transport vehicles (15 units) and two water trucks. 3.17 While efforts were being made to rebid the cancelled equipment, Liberia was experiencing a critical shortage of local funds. Moreover, the delay in the start of the training of road foremen, mechanics, equipment operators and drivers was becoming a serious problem, aggravated by an increased demand for trained staff because of the arrival of 200 units financed through a Japanese Commodity Loan. The local fund constraint and shortage of staff delayed the decision to reorder the cancelled equipment. After a long delay, the Government requested, and the Bank agreed, to reorder the equipment through limited competitive bidding from at least three suppliers. This equipment was delivered in February 1983. With the new order, the actual loan disbursement for equipment and spare parts amounted to US$3.5 million or 132 more than the US$3.1 million allocated. 3. Technical Assistance a. Feeder Roads Advisors Service 3.18 The project included 156 man-months of technical assistance to train, coach and supplement MPW's staff and to develop a follow-up program for feeder roads improvement and maintenance. While the initial plan was to engage individual experts, at the request of MFW the Bank agreed to use a consulting firm, cautioning MPW of the possible increase in cost. While MPW was modifying the contract agreement based on the Bank's comment and prior to signing a contract, the selected consultan started mobilizing his staff early in November 1979 on the basis of a letter of intent. 3.19 The consultant's performance was not up to the standard expected and according to the files *... after nearly two months in Liberia, the team leader had only a superficial knowledge of the project and had not yet made any definite plans or proposed a strategy to ensure an effective implementation of the project. Therefore, it must be doubted if he will be able to carry out in a satisfactory manner the duties of a team leader., The consultant had about 20 years of continuous service in Liberia - long enough to fully understand the level and type of expertise needed to provide the services needed. MPW was reluctant to include under this contract the training expert originally agreed upon to supplement the activities at the Camp Mechlin Training Center. 3.20 The contract which was for a period of 30 months, did not fully achieve the expected results because: (a) the newly established Feeder Roads Divisions (FRD) was only about 50o staffed, hence the consultant's service was rendered to only half of the targeted group originally envisaged; (b) the logistic support for the Planning and Programming Bureau was not provided primarily due to insufficient funds;  - 10 - (c) the operational assistance to the field brigades could not be fully rendered since, during the consultant's service period, the brigades completed only 15 miles as compared to 250 miles planned- and (d) the consultant service was related to assisting the FRD in construction and road maintenance operations. and since no operation was started in these two areas the services rendered to FRD during the 30-month contract time was limited, and the transfer of knowledge was minimal. b. Design of Feeder Roads 3.21 MPW was to engage a domestic consultant to carry out the field survey, geometric and pavement designs of the feeder roads to be constructed/improved by domestic contractors, while the soils and materials investigations and bridge designs were to be carried out by MW's departmental force. A domestic consultant was selected through local advertisement and a contract for the design of the first 54 miles was signed after Bank's clearance in March 1980. The total contract amount was US$73,850 and the design was to be completed in 150 calendar days. The consultant had financial problems because of the firm's limited capital as well as payment delays. It also had a problem of controlling its field personnel, who, when monthly payments were delayed, confiscated the field equipment and refused to continue working until they were paid. The firm finally informed the MPW of its inability to execute the work. 3.22 The draft detailed design was finally submitted to MPW by another firm, an outgrowth of the firm to whom the services were contracted. The design entailed a high construction cost compared to the originally anticipated cost. It was revised and completed by the MPW with the assistance of an expatriate consultant, who lowered the standards of vertical and horizontal alignments to reduce cost. The per mile construction cost of the reduced standard was at an average cost of US$72,400, which was still 3.5 times the appraisal estimate of US$20,500 per mile. C. Technical Assistance to Domestic Contractors 3.23 MPW was to obtain the services of two experts: one to be attached to the MPW for two years as a member of the staff of the Programming and Planning Bureau to assist =n preparing a program of work suitable for domestic contractors, and to advise them how to build up their capability; and the other to be attached to the Liberian Bank of Development and Investment for a period of two years to assist in developing capacity within the Bank for approving and monitoring loans to contractors. 3.24 In October 1979, MPW recruited a civil engineer with training in law as the construction industry specialist. He had a problem to adjust to local conditions and finally left the country in mid-1980. After a long interruption, mainly due to delay in completion of the detail engineering design of roads to be contracted out, MPW, in March 1984, invited proposals from five selected consultant firms. Only two proposals were received and  - 11 - based on the evaluation results of the two proposals, MPW signed a contract on August 20, 1984 for 35 van-months at a total cost of US$484,000 (USU13,800/man-month) including reimbursables and 1OZ contingency costs). The contract agreement was amended on November 13, 1984. to include one civil engineer to assist the MPW in reviewing feeder roads designs, processing bids and supervising the contract construction. After these amendments the contract amount increased from USS84,000 to US$814,000. A total of 29 miles of feeder roads at a cost of US$2.1 million was constructed under this assistance at a cost of 37Z of the value of the civil works contracts. d. Technical Assistance to MCIT 3.25 The project provided for a transport specialist to assist the Ministry of Commerce, Industry and Transportation (MCIT) in improving its transport planning function. This service was later transferred to the Ministry of Planning and External Affairs (MPEA) at the request of the Government. Based on an invitation for proposals issued to six shortlisted firms, MPEA signed a contract on August 20, 1984 with the technically highest rated firm. The contract amount was US$601,663 for 30 man-months. The consultant submitted the draft final report in December 1986. MPEA's benefit from the study will depend upon the effective implementation of the planning techniques proposed. e. Overseas ScholarshiP 3.26 Under the project, provision was made for an overseas scholarship for an experienced engineer for an 18-months construction management course which included nine months of practical training with a reputable construction firm. Upon completion of the scholarship, the engineer was to join the Feeder Roads Division of MPW, to oversee the Feeder Roads Division. In November 1982, MPW nominated a 1979 graduate who was accepted by the University of Illinois for study in materials engineering. He moved to another university after which MPW withdrew its financial support. In July 1984, another civil engineer who graduated in 1982 was nominated and accepted for a two year graduate program by Case *Testern University, and started his studies in January 1985. He successfully completed his studies and returned to the MLC to take charge of rural works. f. Auditing of the Proiect Accounts 3.27 Section 4.02 of the Loan Agreement required the auditing of the project accounts on the basis of certified expenditures. MPW engaged, without Bank knowledge, a local firm to carry out the audit for the period from April 1979 to January 31. 1984. In August 1984, the Bank informed MPW that the audit report was not satisfactory. Following the Bank's agreement, MPN signed a contract in April 1985, with a foreign firm in Joint venture with the local firm at a total cost of US$45,000. MPW submitted the audit up to June 30, 1986. Since then no further audits have been carried out.  - 12 - 4. Proiect Cost 3.28 A comparison between the appraisal estimate and the final cost of the project is shown in Table 1. For the 289 miles of feeder roads constructed and improved. the total expenditure was US$7.7 million. This expenditure was 54? higher than rhe appraisal estimate for the same length of roads. This is mainly due to an average of 350Z per mlile cost increase in vorks done by contract and 282 increase on force account per mile cost. The expenditures for the technical assistance component was US$2.43 million as compared to the appraisal estimate of US$2.14 million, an increase of 10: over the appraisal. 3.29 US$8.9 million or 82? of the loan funds have been disbursed to- date. The last disbursement was made in February 1988. three years after the original project closing date of December 31, 1984. The undisbursed balance of US$1.8 million is in the procesi of being cancelled. B. Fifth Hi2hway Proiect 1. Start-un Delas 3.30 The Project was negotiated before a financing plan was firmed up and was not approved by the Board until March 30, 1984, sixteen months after appraisal. This delay was due to difficulties encountered in obtaining firm financing commitments from possible donors which. in turn, was due to the continuous decline in the country's eco-1omy. During the project processing period. Liberia vent from an IBRD to an IDA-eligible country which entailed further delays because of the then scarce IDA funds. The US$10.5 million cofinancing anticipated at appraisal to make up US$19.4 million total project cost failed to materialize, except for an indication from USAID of a US$3.1 million grant. 3.31 The Bank's efforts to provide the needed foreign component balance of US$11.4 million from a combined IDA and Special Account fund were not successful because grouping components of the project to meet the different procurement eligibility criteria between the two sources of funds was not found to be practical. The financing of the project finally consisted of US$11.4 million from IDA, US$3.1 million from a USAID grant and US$4.9 million from the Government, amounting to a total of U$19.4 million. 3.32 The loan became effective on July 30, 1984 four months after the project was approved. The special conditions of effectiveness were: (a) the opening of a Project Account and a Special Account; (b) the payment into the Project Account of an initial deposit of US$400,000 equivalent; and (c) the making by the Borrower of arrangements, satisfactory to the Association to obtain the USAID grant.  - 13 - 3.33 In May 1983. the Bank approved the Government's request for PPF funds, for consultant services to improve MPW's management and administration system as a prerequisite to assuring efficient implementation of the proposed Project. The MPW submitted an evaluation of proposals received from the four shortlisted consultant firms, which was carefully reviewed by the Bank. Based on the Bank's comments, the MPW- selected firm replaced the proposed team leader and two cost accounting specialists with better qualified staff, after which the Bank then agreed to the selection. Following the Bank's comments on the consultant's mid- term report, the consultant revised and modified the proposed cost accounting system to ensure simplicity and applicability. The system was successfully implemented during the period when MPW was assisted by the second consultant financed under the Project. 2. Civil Works a. ReRravellin" 3.34 MPW, assisted by c,onsultants, was to regravel 350 miles of roads by deploying three force account brigades. They were to be made up of existing equipment (to be repaired under the Credit) and limited additional equipment. Equipment repair contracts for 5 graders, 2 bulldozers and 3 loaders were signed in August 1984 with a private workshop for a total firm contract cost of slightly under US$200,000. The first contract for equipment and spare paris purchase was signed in Hay 1985 and the last in October 1985, which was an average of 12 months delay after the project became effective. 3.35 The first force account brigade was mobilized in November 1985, 15 months after the estimated starting tAme at appraisal. Shortly thereafter, the brigade's dump trucks were withdrawn to work on construction financed outside the regular budget. The Bank objected to the withdrawal of the equipment and the MPW returned it shortly thereafter. In the first year, only 20 miles (202) of the plaaned 100 miles were regravelled. By the project Closing Date of December 31, 1987, only an estimated 40 miles (11Z) of the total 350 miles were regravelled by force account. In the meantime, because of the poor performance of the force account brigades, a decision was made to have the remaining regravelling work done by contract. 3.36 The regravelling by contract required an amendment to the Credit Agreement, which was approved in December 1985. It took ten months after the amendment was approved before the first regravelling contract for 60 miles at US$1.24 million was signed. Because of the critical financial problems in the country, private banks were reluctant to accept each others checks and vendors had difficulty in obtaining bank guarantees. The contractor requested the opening of a Letter of Credit for payments to which the Bank agreed. The second regravelling contract, for which bids were received in March 1987, was not started when the project was terminated on December 31. 1987. Among other reasons, this was due to the Bank groups' suspension of disbursements on all loans/credits to Liberia.  - 14 - 3.37 A total of US$0.88 million was disbursed for 60 miles of regravelling by contract, out of US$0.95 million payable from the Credit. Between force account and contract works, a total of about 100 miles or 282, were regravelled out of the planned 350 miles, at a total calculated cost of US$2.69 million, giving an average cost of US$26,900 per mile as compared to US$26,405 per mile estimated at appraisal. b. Routine Maintenance 3.38 Out of the total US$1.84 million under the project, to cover 402 of expenditures per annum for routine maintenance, only US$0.2 million was spent in three years, representing only 102 of expenditure required. This accomplishment in routine maintenance was minimal as it was affected mainly by repeated Bank Group disbursement suspensions; inadequate counterpart funding; lack of operable equipment; delays in the supply of spare parts; and poor institutional performance. Moreover, routine maintenance had to compete with the Feeder Roads Project for funds. 3.39 Reduczion of surplus and non-productive labor force was one of the planned measures to be taken by MPW to improve performance and to save funds to supplement the road maintenance operation funds. During the project period, MPW reduced staff by 75 persons per annum while the proposed transfer of 800 permanent employees to seasonal labor force was postponed by the Government. 3. Procurement. Equipment. Tools. Spare Parts and Eauipment Regairs 3.40 A total of about US$2 million was disbursed for purchase of equipment, tools and spare parts. However, delivery for most items did not take place until the end of the second year, thus the contribution of these items to the prograummed work was insignificant. 4. Consultant Services 3.41 MPW engaged a consulting firm in August 1984 tot (i) implement the financial and administrative management systems; (ii) improve workshop and equipment management; (iii) strengthen the Operations Bureau to help achieve an efficient road maintenance delivery system; and (iv) assist in regravelling of 450 miles of road. This contract, which was exempt from the Bank's general suspension of disbursement, continued until the Project Closing date, however, progress on civil works was minimal. At project completion a total of US$2.7 million or about 1002 of the funds allocated for consultant services was disbursed. 3.42 Under the contract, MPW was able to put in place the cost accounting system developed with the PPF funds and was able to develop routine maintenance and regravelling pro-rams. However, as the acromplishment in routine maintenance was about 102 and regravelling only 289 of the planned program, the physical output was extremely low to justify the cost in consultant services.  - is - S. Auditing Services 3.43 The auditing of accounts of the Fifth Highway Project was undertaken in conjunction with and financed under the Feeder Roads Project (see para 3.27). Proiect Cost 3.44 The comparisrn between appraisal estimate and the final cost of the project is shown in Table 2. Routine and periodic maintenance represent 18? of planned target 4itile consultancy services, which was mainly for civil works implementation, represent 10OZ of the funds allocated under this category. Disbursement under the project was US$6.78 million which represents 352 of the appraisal cost estimate of US$19.4 million. The last disbursement was made on June 30, 1988, and the undisbursed balance of US$6.05 million is in the process of being cancelled. IV. ECONOMIC RE-EVALTJATION A. Feeder Road Prolect 4.01 The economic justification of the project was based on reducing transport costs and produce spoilage in the influence areas of the project roads; in contributing to the expansion of agricultural production; in providing improved access to bhalth, education and other social amenities; and in institutional-building. All the roads constructed and improved are located in areas of ongoing agricultural development projects. In both Lofa and Nimba Counties the agricultural development projects were supported by multilateral and bilateral financing agencies including IDA, AfDB, USAID. and PRG. 4.02 The MFW assessed the achievements in the agricultural development in October 1984, for Lofa and Nimba Counties. The results show that farmer participation exceeded the appraisal estimate by 22; for the three main crops marketed -- rice, cocoa and coffee achievements were 1002, 72? and 522, respectively. Crop yields have ranged from 762 to 137Z of the appraisal estimate except for few low yields for cocoa and swamp rice in the first and fifth harvest seasons in some areas. 4.03 The appraisal report took account of the benefits from road user savings to non-agricultural traffic and net incremental agricultural production attributable to road improvement for existing roads and on net incremental agricultural production for new roads. The agricultural development projects have achieved the expected incremental agricultural production which supports the traffic growth estimated at appraisal of the feeder roads projects. Under these circumstances, it is safe to assume that non-agricultural traffic will also increase from the ADT recorded at appraisal. Based on the above assessment, it would be reasonable to conclude that the ERR of an average of 172 estimated at appraisal was attained for the roads built.  - 16 - B. Fifth Highway Proiect 4.04 The economic justification of the project was derived from its role in reducing vehicle operating costs (VOC) using the methodology developed under the Bank's and Transport and Road Research Laboratory's (TRRLLs) research programs in Kenya. VOC savings were calculatmd as the difference between VOC on the rapidly deteriorating network under current maintenance levels and those resulting from implementation of the Project's maintenance strategy, applying road deterioration parameters and user cost relationships by TRRL. 4.05 The project ERR was estimated at 1002 at appraisal for both routine and periodic maintenance. Under the project, only 102 of the planned investment in routine maintenance was implemented in three years, hence the anticipated benefit in VOC has not been attained. In fact, because only minimal routine maintenance has been carried out during tre three years, the road system further deteriorated, which would result in increased VOC. No data is available on which to base a revised ERR on the regravelled roads. However, because of higher VOC and high consulting costs, the revised EB would be substantially lower than the appraisal estimate. V. INSTITUTIONAL PERFORMANCE A. Feeder Road Proiect 5.01 One of the main objectives of the project was to strengthen MPW's capacity to assume responsibility for feeder roads construction and subsequent maintenance. Liberia was to benefit by avoiding duplication of management, in different ministries and agencies. Even thov i, at the start of the project there was a move to this direction, in j82 the main responsibility for feeder roads was transferred to K.G. This had the long- term effect of spreading scarce himan and physical resources too thinly so that in the end little output would be realized, quality standards would generally be low, and economic losses would be unavoidable. In general, the objective in this area of institutional building was not achieved. 5.02 To ensure effective performance of the FRD, MPW was to engage seven experts who would train and coach both head office and brigade level staff. Even though the FRD was established within a reasonable time, the division was not fully staffed. As years went by, several of the head office and brigade level staff were reassigned to different posts within MNW and replacements were not appointed. Moreover, the number of experts under the technical service, was reduced to about half. Because of such variations from the initial plan, the achievement in this area of institutional development was poor. 5.03 To supplement and strengthen the brigades of the staff needs, MPh was to train road foremen, mechanics, equipment operators and drivers. Early in the project implementation period, the FRG financed Camp Mechlin Training Center, where the planned training was to be provided, phased out its training activities because of shortfall in financing. Even though MPW was encouraged to use Loan funds to finance a training expert, it was z:'uctant to do so. The shortage of staff was furthpr aggravated by the  - 17 - arrival of some 200 units of road construction equipment financed under a Japanese Comiodity Loan. -The failure to start-up the planned training resulted in poor utilization, maintenance and repair of the brigades' equipment. In this area of institution development. MPW was worse off at project completion than when it started. 5.04 The development of the domestic construction industry was to be achieved by contracting out the constructionlimprovement of 250 miles of feeder road. However, only two contracts for a total length of 29 miles were awarded to two Liberian contractors in October 1985. Despite a slow start, some local contzactors have continued to do road works with financing by USAID, and thus appear to have benefited from the project improvement. B. Fifth Highway Proiect 5.05. MPW had been inadequately staffed in middle management and field technical personnel, even under the Fourth Highway and Feeder Roads Projects. the failure to start up the training program under the Fifth Highway Project has further aggravated its staff shortage. Under this constraint, the start of the Fifth Highway Project, while the Feeder Roads Project was still in progress, placed a major burden on MPW's weak institutional capability. 5.06 The low salary scale and absence of a production-based incentive system has also affected MPW's institutional performance. Moreover, the insufficient and delayed allocation of local funds adversely affected staff morale and performance. 5.07 MPW's inability to assign the required number of qualified counterpart staff to work with the consultants significantly reduced the possible transfer of skills and sustainment ability of the cost accounting system developed under the Project. MPW vwas not able to introduce the Consultant's recommended changes in organizational structure hence, anticipated improvement in institutional development has failed to materialize. 5.08 Overall, performance of the Borrower under both projects must be rated as poor. The objectives set under both projects, in institutional building and in road maintenance improvement, were not met. Despite the projects, MPW was left institutionally worse off than when it started because of the general deterioration in its management. VI. CONSULTANT'S PERFORMANCE A. Feeder Road Proiect 6.01 As previously noted, the Liberian consultrnt firm engaged for the design of the feeder roads went out of business, and MPW had to complete the design by itself.  - 18 - 6 02 The consultant engaged to train, coach and supplement MFPW's staff and to develop a follow-up program for feeder roads Improvment and maintenance initially did not provide a capable teas leader. The first team leader of the consultant failed to perform satisfactorily and had to be replaced. Overall. performance was much less than the appraisal expectation. 6.03 Technical assistance to domestic contractors was limited to 29 miles of construction by two contractors, compared to the larger number of contractors needed to do 250 miles of feeder roads construction. However. the benefits achieved in helping the domestic construction industry are being sustained on USAID financed works. B. Fifth Highway Proiect 6.04 The consultant engaged under the PPF funds, after considerable effort on the part of the Bank, was able to develop an applicable cost accounting system which was introduced in the MPI by a second consultant financed under the project. The second consultant was able to introduce the cost accounting and monitoring system. However, the consultant's contribution was limited to 10 of routine and 28S of the regravelling target planned under the project, even though the services expenditure was 100o of the funds allocated. Nevertheless, this poor performance in civil works was influenced by factors not related to the consultants' performance. VII ROLE OF THE BANK GROUP A. Feeder Road Proiect 7.01 The design of the project was in keeping with the Government's Development Plan. It included comprehensive provisions necessary to ensure success in its implementation, and took into account the then prevailing situation in Liberia. However, the progress of the project was handicapped by critical shortages of funds and local staff. constant transfer of key personnel, and frequent general suspension of disbursements by the Bank due to arrears in repayments, the latest in December 1986. Despite the suspension, the Bank continued to disburse for civil and consultant services contracts in progress, and for goods shipped and delivered. 7.02 Bank Group performance on the project was mixed. Bank supervision missions contributed to developing short range revised work programs and implementation schedules despite the prevailing problems and constraints. Without these suggestions, the performance of the project could have been more adverse than was the case. Nevertheless. supervision was handicapped by frequent changes in Bank staff assigned to the project during the early years of project execution. From mid-1984, supervisory staff remained unchanged, and a commendable effort was made to get the project back on track. While some progress was made, the Bank Group's general suspension of disbursements undermined these efforts.  - 19- 7.03 The Bank might have been more prompt in having an incompetent project manager for one of the consultants on the Feeder Road Project removed when the problem first became evident. This problem might have been recognized earlier if it were not for the frequent changes in Bank supervision staff during the early years of project execution. 7.04 The failure of local communities to participate in the routine maintenance program might have been avoided if the Bank and the Government had consulted them during the planning and preparation stage of the project by getting their reaction to their proposals, and soliciting their cooperation and participation. 7.05 The Bank should have objected to the transfer of responsibility for feeder roads to MLG, as it clearly violated Section 3.06 of the Loan Agre ment which called for the FRD to be maintained in the MPW. It should also have made a greater effort to carry on the training activities at Camp Mechlin. 7.06 Bank decisions to approve the amendments to the Loan Agreement to include new project components and to increase the percent of disbursements from the loan funds was helpful. Also the steps agreed to by the Bank to assist local contractors (para 3.09) were constructive. But again the general suspension of disbursements undermined the assistance these actions were designed to provide. B. Fifth Highway Proiect 7.07 IDA was confronted with unusual difficulties in solving issues related to local funds constraints and mobilizing cofinancing for the foreign component of the project. Considerable staff effort went into project identification, preparation and finalization of the project after appraisal which required eight Bank missions prior to appraisal. The Bank Group's efforts in seeking cofinancing, and to have the project, which was initially planned for IBRD lending, financed by IDA. was also commendable and helped to maintain good relations with the Government. 7.08 The Bank's supervision of the project was thorough, which resulted in the development and introduction of a usable cost accounting system. Its detailed review arz coments on MPW's evaluation on the consultant's proposals and reports helped in ensuring expected final results. Also despite the suspension of disbursements, local contractors seem to have benefitted from their training program as they have been successful in securing work under the ongoing USAID road program. VIII. CONCLUSIONS AND LESSONS LEARNED Conclusions 8.01 The Bank Group's level of supervision was inadequate on the Feeder Road Project, but in mid 1984 supervision of the project improved as execution the Fifth Highway Project was getting underway. Commendable  - 20 - effort was made to improve the execution of both projects but the general suspension of disbursements undermined any progress that could be made. 8.02 Execution of broad based highway projects in a politically and economically unstable environment such as Liberia, is bound to produce problems particularly when there is frequent turnove. of government officials, shortages of budgetary funds, and under-financed local consultants and contractors. Furthermore, the Feeder Road Project was hampered by unavoidable problems such as the failure of a supplier to deliver an order of equipment, and the bankruptcy of a local consultant. It is impossible for the Bank to avoid these risks in developing countries, and they must be expected as a part of doing business. 8.03 Two-third of the cunstruction/improvement works under the Feeder Road Project were to be built by force account and the remainder by local contractors. It might have been more appropriate to have brought inexperienced foreign contractors under both projects with the provision that they use local supervisors, foremen, operators and mechanics to a substantial extent. This would have given local construction personnel good practical experience, and at the same time assured that the civil works components were successfully carried out. 8.05 Even though the Fifth Highway Project's objectives were only partially met, one component was effective in that MPW now has at its disposal a well developed cost accounting system and study-based recommendations to improve its organizational effectiveness, which could be introduced when the situation in the country permits. Lessons learned ^.06 Most of the Loan/Credit funds for both projects were used for consultants and procurement, and little for construction work which was the largest component in both projects. The Bank should carefully assess the disastrous effect on its ongoing projects when it suspends disbursements for non-repayment of earlier loans. Suspension is usually brought about because of the country's inability to repay its debts, and meet clarrent obligations. Thus suspension only adds to the difficulties of executing ongoing projects, and invites even more adverse performance. Perhaps at the time of a suspension, the Bank should make a decision to either continue to support its ongoing projects fully, or withdraw completely and shut them down (para 8.06). 8.07 If there is a likelihood of suspension of disbursements, consideration should also be given to extending the use of letters of credit beyond the supply of goods as presently permitted to civil works and teFhnical assistance contracts, as a means of protecting on-going projects from sudden and frequent cut-off of Loan/Credit funds. 8.08 During the execution of projects being carried out under difficult conditions such as in Liberia, particular effort should be made by the Bank to avoid frequent changes in staff, and to carry out supervision missions on a regular basis.  -21 - 8.09 These two projects, as vell as others in West Africa, reflect the mistake of relying on force account operations as the primary means of carrying out civil works by public works agencies that do not have the capacity to even maintain their roads, let alone improve or rebuild existing roads. Under these circumstances. greater use might be made of foreign contractors to supplement local contractors and to ease the burden on local executing agencies. I.  MAP SECTION  _A 17 FodorRodPo*Area . r ---------~G cr 'WIS, . . f \ + ;$ - - ^ . -< W '- ' ' ' OtN_hw Hwb r > . ~~~~~~~~~~~~~~COUNTY COW -- --- 8 <eS ,/ O ,.