Somalia - Fourth Highway Project

Th Woi lo- .,0t No. C; ; (i Vv ) ( iCi-C FOROICL WAlk] } BX1 O7) / X -- H (12 / Jk lI)I r) RePOt NO. 9666 PROJECT COMPLETION REPORT SOMALIA FOURTH HIGHWAY PROJECT (CREDIT 1324-SO) JUNE 24, 1991 Infrastructure Operations Division Eastern Africa Department Africa Regional Office 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 disclsed without World Bank authorization.  Currency Exchange Rates Currency Unit = Somali Shilling (So. Shs.) So. Shs. to the US$ 1980 6.30 1981 6.30 1982 10.75 1983 15.78 1934 19.93 1985 39.22 1986 72.50 1987 105.58 1988 169.72 1989 490.65 1990 2500.00 Weights and Measures metric Acronyms and Abbreviations AfDF - African Development Fund AFESD - Arab Fund for Economic and Social Development CED - Civil Engineering Department DOH - Directorate of Highways EDF - European Development Fund MF - Ministry of Finance MULAT - Ministry of Land and Air Transport MNP - Ministry of National Planning RMF - Road Maintenance Fund vpd - vehicles per day Government of Soma'ia Fiscal Year January 1 - December 31  TH* WORLD BANK Washington. D.C. 20433 U.S.A. Okce fi ODecUGenswal Opratine avaatIu June 24, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECTs Project Completion Report on Somalia Fourth Highway Project (Credit 1324-SO) attached, for information, is a copy of a report entitled "Project Completion Report on Somalia Fourth Highway Project (Credit 1324-SO)" prepared by the Africa Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment .~~~~~~~~~~~~~ This docummi ho- a restricted distribution and may be used by recipients only in the perfonmance of their official du a. Its contents may not otherwise be disclod without World Bank authoristion.  FOR OMCIAL USE ONLY SOMALIA FOURTH HIGHWAY PROJECT Credit 1324-SO PROJECT COMPLETION REPORT Table of Contents Preface . . . . . . . .* . . i Evaluation Summary . . . . . . . . . . . . . . . . . . . . . . . ii PART I PROJECT REVIEW FROM BANK'S PERSPECTIVE . . . . . . . . . 1 Project Identity . . . . ..1 Background . .. . . . . : : 1 Project objectives and Description . . . . . . . . . . . . . 1. Project Design and Organization 2.. .2 Project Implementation . ... 3 Project Results . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Project Sustainability 5... . . Bank Performance 6... 6 Borrower Performance . . . . . . . . . . . . . . . . . . . . . . . 6 Consulting Services . . . . . . . . . . . . . . . . . . . . . . . . 7 PART II PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . . . . 8 PMT III STATISTICAL INFORMATION ...... ... 9 Bank Related Credits ......... ... 9 Project Timetable..10 .-----.--- . 0 Project Costs ...... . . .-. .............. . . . 10 Project Financing . -. .11 Allocation of Loan Proceeds . .1.1................ . -. Schedule of Credit Disbursements ............... . . 12 Mission Data. . . .- . . . ............ .12 Project Implementation . . . . . . . . . . . . . . . . . . . . . . 13 Status of Covenants .... . . . . . . . . . . ..... . 14 Annex: Recalculation of ERR . . . . . . . . . . . . . . . . . . 16 Map of Somalia (IBRD No. 15924R) ..... . .. 17 At the time of Project appraisal the Department Director was Mr. H. Adler, I the Assistant Director was Mr. P.C. Loh and the Division Chief was Mr. P. Gyamfi. The Project was appraised by Mr. S. Kathuria (Sr. Engineer), D. Jovanovic (Sr. Economist), Mr. A. Khanna (Economist), and Mr. S. Sigfusson (Sr. Engineer). During the supervision phase the Director was Mr. H. Wyss and the Division Chiefs were Mr. Y. Abe followed by Mr. J.C. Brown. Supervision missions were undertaken by Mr. P. Jensen (Sr. Engineer), Mr. E. Irgens (Sr. Engineer) and Ms. J. Holt (Sr. Financial Analyst). 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.  SOMALIA FOURTH HIGHWAY PROJECT (Credit 1324-SO) PROJECT COMPLETION REPORT PREFACE This is the Project Completion Report (PCR) for the Fourth Highway Project in Somalia for which Credit 1324-SO in the amount of US$23.0 million was approved on February 15, 1983. The credit was closed on June 21, 1989, at which time SDR 186,563 was canceled. The PCR was prepared by the Infrastructure Operations Division of the Eastern Africa Department in the Africa Region (Preface, Evaluation Summary, Part I and Part III). On January 28, 1991 comrments on the report were solic ted from the Arab Fund for Economic and Social Development, a co-financie', but none were received as of February 28, 1991. Preparation of this PCR was started in October 1990 and is based, inter alia, on the Staff Appraisal Report, the Development Credit Agreement, supervision reports, correspondence between the Bank and the Borrower, and internal Bank memoranda. on September 13, 1990 the Bank sent the Borrower a request to prepare Part II but, as of February 28, 1991, no reply was received.  - ii - SOMALIA FOURTH HIGHWAY PROJECT (Credit 1324-SO) PROJECT COMPLETION REPORT EVALUATION SUNWALY Obiectiv-s The objectives of the Project (from SAR 3604-SO) were to i) protect the capital investment in and increase the service life of a primary road in south-central Somalia; ii) help improve road maintenance planning, organization and operations; and iii) help alleviate the starfing shortage of the Civil Engineering Department (CED), forerunner of the Directorate of Highways, within the Ministry of Public Works and Housing (MPWH) (para. 4-5). ImlDementation Experience Implementation of the main civil works component of the Project, the strengthening and improvement of the Afgoi-Baidoa Road, was hindered by several problems which contributed to its late start, the truncating of the sc.ope of work and its resultant early completion. The late start was caused by a delay in Credit effectiveness caused by difficulties in obtaining the Borrower's legal opinion, which, in turn, delayed the mobilization of the contractor, approval of the contract having been given before Credit effectiveness. The truncating of the scope of the main civil works was caused by the withdrawal of financial support in the amount of US$14 'nillion by the Arab Fund for Economic and Social Development (AFESD) owing to the Borrower's being in default on earlier AFESD loans. A decision was taken to complete as much of the original project design as could be financed by IDA and GOS alone, without increasing the planned financial contribution from either source of funds. The reduced scope of work, about 35% of the original length of the road, was completed seven months before the completion date estimated at the time of Project appraisal (para. 12-13). The technical assistance component of the Project was implemented without undue problems. A team of advisors assisted with the preparation of a Road Maintenance Study and the strengthening of the highway maintenance capacity of MPWH. The inadequate provision of recurrent funds allocated by GOS to road maintenance precluded the possibility of posting the technical assistance team to regional headquarters. The project closing date was extended once by 12 months to allow the team to complete a small training program. Emergency road repair works were undertaken by the Ministry with the help of the technical assistance team (para. 14) Results The objective of increasing the service life of the Afgoi-Baidoa Road was only partly achieved for reasons beyond the control of the implementing agency (para. 17). Approximately 80 km of the original 216 km of the Afgoi-Baidoa Road was strengthened and improved. Urgent repairs to critical elements in the main north-south "spine" road in the country were undertaken. The project yielded significant institutional changes which flowed from the recommendations of an important Road Maintenance Study financed under the project. Despite the delays incurred while GOS studied the advice contained in the Study, by 1988 the following major innovations had been introduced in the way maintenance of roads was to be managed in the future:  - iii - a) The Civil Engineering Department (CED) was transtor.ned into a single-purpose Department of Highways and subsequently up-graded to the level of an autonomous self-budgeting Directorate of Highways (DOH) under the Ministry of Public Works and Housing (MPWH); b) DOH gained direct control over all road maintenance activities in 7 newly defined Highway Maintenance Areas throughout the country; and C) MPWH established a Road Maintenance Fund to be generated by revenue raised by means of a motor fuel tax, thereby increasing the potential for adequate funding for road maintenance in the years to come. To date, however, sources of funding have been insufficient to adequately finance road maintenance. Sustainability The institutLonal accomplishments of the Project set the stage for future improvement in road maintenance in Somalia. It remains for Government to utilize the framework by creating the appropriate conditions under which the Road Maintenance Fund can generate adequate resources tc finanoe routine road maintenance activities. Measures to be taken to achieve this goal include eliminating the subsidy which exists in the price of motor fuels, revising the fuel levy to be an ad valorem tax, and expanding the tax base of the Fund to include not only diesel but also gasoline. Provision for these policy dctions have been made in a proposed IDA-financed follow-up project (para 23). However, political developments in the Persian Gulf in August 1990 coupled with national macroeconomic imbalances indicate that Government will find it difficult to pursue further progress in road maintenance. High fuel prices, caused by the Persian Gulf crisis in the last quarter of 1990, has made it difficult for the Government to reach import parity pricing let alone implement revised tax schedules on motor fuel to finance road maintenance. In the short to medium terf, continuing internal political discord militates against improved operations of the re- constituted DOH in most areas of the country. Once political and economic stability return to the country, DOH will require further assistance to activate the mechanisms at its disposal tc implement an eftective national road maintenance program. Findings and Lessons The principal lessons include the following: a) IDA should carefully assess the risk involved in giving no objection to the award of a large contract before Credit effectiveness, especially if a significant amount of unsecured co- financing is involved; b) Projects which call for a significant level of technical training should include specialists who are knowledgeable not only about the technical area concerned but who are also knowledgeable about effective and appropriate methods of experiential learning; and C) Under conditions where the Borrower's capacity to prepare financial audits of project accouncs is limited, IDA should include funds for their preparation by external auditors, including international auditors if necessary.  - 1 - PART I PROJECT REIXEW FROM BANU'8 PERSPECTS X A. Prolect Identity Projet nami: Fourth Highway Project Credit No.: Credit 1324-SO RVP units Africa Countrys Somalia Sectors Transport Subsectors Highways a . Prolt Background 1. SQctor DeveloRment Obiectives. Government's broad objectives in the transport sector, as enunciated at the tin,e of project preparation (Five-Year Development Plan - 1982-85) included: a) opening aew areas for development 'n order to increase the productive capacity of the economy} b) fostering economic integration of relatively isolated areas; and c) facilitating movement of goods within the country at low cost. The overall objective was to promote regional development and the efficiency of the transport system as a support to other economic sectors. Somalia's specific objectives in the highways sub-sector included upgrading primary and secondary roads in order to prevent serious traffic interruptions during rains and to reduce vehicle operating costs. 2. Policy Context. In 1980 transport infrastructure in Somalia was composed of about 21,600 km of roads of which only 2,460 km were paved, three principal ports, and fifteen airfields, four of which had paved runways. There were no railways, pipelines or inland waterways. Coastal shipping, whb_ch once linked economically active coastal cities, has essentially ceased. In the period 1974-1978 planned transport investments accounted for 20 percent of total public investment. The road network, absorbing 63 percent of transport investment, formed by far the most important means of transport in the country. The situation in 1991 remains basically the same - only that there are now 21,830 km of road of which 2,757 km are surfaced. Because of the high foreign cost element (95%) in the road transport system composed of both roads and vehicles, traditional (non-motorized) means of moving people, goods and servicen within the country are still common practice. 3. At the time of project inception there were still three Ministries involved in the road transport sector: i) Ministry of Public Works and Housing (MPWH), through its Directorate of Highways (formerly Civil Engineering Department), responsible for planning, constructing and maintaining roads, ii) Ministry of Land and Air Transport (MLAT) responsible for vehicle registration; and iii) Ministry of National Planning (MNP) responsible for general planning of the sector and monitoring project implementation. As a result of Project implementation, the institutional structure within MPWH has been improved to give greater autonomy and control to the Directorate of Highways (DOH) to carry out its mandate with regard to road maintenance (Section F. below). C. Proiect Obiectives and Descrintion 4. Project Obiectives. The objectives of the Project (from SAR 3604-SO) were to: a) protect the capital investment in and increase the service life of a primary road in south-central Somalia; b) help improve road maintenance planning, organization and operations; and  - 2 - C) help alleviate the staffing shortage of the Civil Engineering Department (CED), forerunner of the Directorate of Highways, within the Ministry of Public Works and Housing. 5. Proiect Components. The Project consisted of the following components: a) strengthening and improvement of the Afgoi-Baidoa road (216 km.) and related supervision; b) consultancy services for: i) a countrywide road maintenance stmdy; and ii) technical assistance to the CED; and C) assistance for urgent road maintenance needs. D. Proisct Design and Organization 6. Proiect Design. The Afgoi-Baidoa Road was originally constructed in 1971 with EDF and IDA assistance. The pavement was designed for a service life of seven years using staged construction. By 1980 the road had not been resealed since its construction and was showing signs of distress, having reached the end of its economic life. The technical and economic study for strengthening and improvement of the Afgoi-Baidoa Road, including detailed engineering design, was u:dertaken by British consultants during the nine months ending mid-1981. The design standards adopted for the Afgoi-Baidoa Road were in accordance with the national primary road standards and the road improvement and strengthening works were designed for a service life of 20 years. The Project was appraised immediately after the design was complete in May 1981. 7. The technical assistance component of the Project was designed to strengthen CED's road maintenance operations, prepare and monitor the road maintenance budget, improve the traffic count system, and to draw up and implement a staff training program. The design of the component was based primarily on the supply of 180 person-months of long-term technical assistance. 8. The road maintenance study was intended to make recommendations about improving road maintenance planning, organization and financing and to define a five-year comprehensive road rehabilitation and maintenance program which could form the basis for future assistance to the country. 9. The urgent road maintenance works, identified as part of the Rorn Maintenance Study, included the repair of 21 bridges along the Bulo Burti- Beletweine Road. Design of the repairs was undertaken by CED, assisted by an American firm of consultants. 10. Proiect Organization. The strengthening/improvement of the Afgoi-Baidoa Road was carried out by a Chinese contractor under the supervision of the British consultants on behalf of CED. The Chinese contractor also carried out the urgent repair of bridges on the Bulo Burti - Beletweine Road under the supervision of the CED. The US consultant provided CED with technical assistance and training, including the preparation of a national road maintenance study. 11. Financing for the project was provided by IDA, the Arab Fund for Economic and Social Development (AFESD) and the Borrower as shown in Table 4.  - 3- X. Prolect Implementation 12. afgoo-Baidoa Road Strenathening and Improvement. After an unsuccessful first attempt to invite international competitive tenders for the work, which resulted in only one submission with a price three times higher than the engineer's estimate, IDA, AFESD and GOS agreed to r.tendering. Seven prequalified firms participated and the contract was awarded to the lowest evaluated responsive bidder, the Chinese contractor, in the amount of US$29.7 million equivalent. The contract was signed in May 1983 and called for a completion date of February 14, 1986, after a contract period of 32 months. The order to commence work was given In June 1983, five months after Credit negotiations but four Lnonths before Credit effectiveness. The delay in Credit effectiveness, caused by a delay in the receipt of the Borrower's legal opinion, forced a delay in the release of mobilization payinents by both IDA and AFESD which in turn slowed the contracto:s i mobilization rate. Credit effectiveness was declared in September i983 and construction of the permanent works was started in December 1983. Physical progress was slow during the first year of implementation owing to problems with site management and organization on the part of the contractor. After senior personnel changes were implemented, initiated by IDA, progress improved such that by mid-1984, 25 percent of the work was complete. 13. In July 1984, AFESD suspended disbursements of the remaining US$14 million out of a total of US$16.3 million provided as J.cint co-financing for the Project. The reason given was GOS's being in default on other AFESD loans. Despite a multi-donor agreement in February 1985 to reschedule Somalia's international debts, AFESD did not resume disbursements. To avoid closure of the works, agreement was reached in May 1985 by IDA and GOS that IDA would take over the outstanding contract payments from the AFESD and the scope of the project would be reduced to fit within the amount of funds available from IDA and GOS. In addition to the already completed section beginning at Afgoi up to km 69, the funds (after reallocation) were used to complete items of work already in progress, undertake repairs of the worst parts of the remainder of the road, and to compen%atA the contractor for his losses caused by the reduction in the scope of the work. The reduced contract was substantially completed in September 1985 at a cost of US$21.3 million equivalent. The reduction in the scope of the work on the Afgoi-Baidoa Road rep-esents the most critical variance between the planned and actual implementation of the Project. The withdrawal of AFESD financial support in mid-stream was an event which could not have been foreseen. The decision to alter the contract and allow the contractor to complete in an orderly manner an amount of work commensurate with the available funds was the most appropriate solution at the time. Other alternatives, including terminating the contract and suspending further IDA disbursements because of cross-conditionality with AFESD, would have yielded lower overall results. 14. Road Maintenance Study and Technical Assistance to CED. Both the Road Maintenance Study and the technical assistance to CED were provided by the U.S. firm of consultants. The study, prepared over a two year period, wae submitted in final form in September 1986. The issues addressed in the Study included the economics of road maintenance, a proposed Five-Year Maintenance Program, suggested administrative and organizational changes in the sector, priority road maintenance needs, manpower deve:.r-.nent and training considerations and a plan for technical assistance to support implementation of the recommendations. is. Under the Project, a technical assistance team provided by the US Consultant assisted DOH to strengthen its administration and to improve highway operations. The 6-member team comprised a road maintenance engineer (team leader), a road design/construction engineer, a road  -4- maintenance superintekident, two workshop superintendents, and an administi.ttive/financial officer. The technical assistance ctaff provided formal and on-the-job training to a number of Somali engineers and other categories of staff (mechanics, drivers, operators); however, the value of courses and on-the-job training for the other categories was limited due to the iack of actual road maintenance work in the field, the result of inadequate recurrent finance from Government. Also, four engineers received six months training at the New Mexico Department of Highways; two engineers attended one month courses at the Eastern and Southern African Management Institute (ESAMI), Tanzania; and three engineerm received training abroad, two in UK and one in Yugoslavia. All six members of the consultant's team remained stationed in Mogadishu throughout the Project because GOS fund. allocated for road maintenance were too meager to justify their posting to regional headquarters. The contract for technical assistance was amended eight times between 1984 and 1989 owing to the need to make adjustments in the contract period, the exchange rate, person-months of TA provided, travel and education units and costs, and the provision for training. During the same period the consultant was engaged to prepare the detailed engineering study for resealing/rehabilitation of sections of the Mogadishu - Galkayo, appraised as part of a proposed follow-up IDA-financed project. The design study was financed from a Project Preparation Facility provided as part of the follow-up project. Applications for withdrawal of IDA funds occasionally confused the two contracts with resultant lack of clarity in record- keeping. 16. Uraent Road Maintenance Works. The Chinese contractor, selected under LCB procedures, repaired 21 bridges on the Bulo-Burti - Beletweine Road under the terms of a 16-month contract finally valued at US$650,000. Work was completed in October 1987. P. Prolect Results 17. The objective of increasing the service life of the Afgoi-Baidoa Road was only partly achieved for reasons beyond the control of the implementing agency. Approximately 80 km of the original 216 km of the Afgoi-Baidoa Road was strengthened and improved. The recalcalated ERR was determined to be 16.2%, a result within the range of 15% - 23' estimated for the corresponding road sections at the time of project appraisal (Annex). The similarity between the ERR in the SAR and recalculated ERR is attributed to the higher actual costs of the civil works per km being offset by the higher traffic volume than anticipated at appraisal. It should also be noted that owing to a lack of reliable data, the recalculated ERR does not include benefits accruing in the form of deferred reconstruction ccvts. Had these been included, thb recalculated ERR would have been higher. 18. The economic costs of the project were assumed to be made up of the actual final cost of the road (US$26.43 million including design and supervision) as determined at the time of the completion of the road in 1985 and the estimated vehicle operating costs prepared by the consultants in 1988. The actual average cost of the civil works was US$300,000 per km as compared with US$185,000 per km &t appraisal. All costs were brought to a 1985 base, the year during which the largest project investment was m&de. 19. After the road section was rehabilitated, one traffic count was carried out in 1986 as part of the preparation of the National Transport Master Plan. Total daily traffic on the rehabilitated road section was 726 vehicles of which 61% were light and the balance were heavy. Daily traffic on the unrehabilitated section of the road was measured at 514 vpd. On the whole, the actual traffic was higher than what was estimated in the Staff Appraisal Report for the corresponding road sections, estimated to be between 350 and 700 vpd in 1985/86. Taking into account the GTZ-financed  5 Master Plan and more recent forecastc for Somalia's economy showing lower overall growth, the annual traffic growth rate was revised downwards from 5% in the SAR to 2% for purposes of determining the recalculated stream of benefits, i.e., savinqs in vehicle operating costs over the twenty-year economic life of the road. 20. In addition to the rehabilitation of part of the Afgoi-Baidoa Road and the complet'on of urgent repairs to critical elements in the main north-south "spine" road in the country, the project yielded significant institutional changes. Institutional reform flowed from the recommendations of the Road Maintenance Study. Despite the delays incurred while GOS studied the advice contained in the Study, by 1988 the following majo.. innovations had been introduced in the way maintenance of roads was to be manageds a) CED was transformed into a single-purpose Department of Highways and subsequently up-graded to the level of an autonomous self- budgeting Directorate of Highways (DOH) under MPWH; b) DOH gained direct control over all road maintenance activities in 7 newly defined Highway Maintenance Areas throughout the country; c) DOH retained the services of several trained Somali engineers who now form the backbone of the technical capacity of the Directorate; and d) MPWM established a Road Maintenance Fund (RMF) to be generated by revenue raised by means of a motor fuel tax. However the RMF still needs assurances that adequate funding will be provided. 21. Training of CED staff was not especially effective owing to the delay in preparing a suitable training program (a training proposal was submitted to IDA three years after the date agreed at negotiations) and the absence of a qualified specialist in human resource development on the expatriate technical assistance team (para. 15). 22. At the same time there exists a situation, exogenous to the Project, which has offset the institutional gains outlined &bove. This is the continuing erosion of civil service salaries and benefits in the face of high rate of inflation in Somalia. Inflation has been caused both by unconstrained growth of the money supply and rapid devaluation of the local currency vis a via the US dollar during the project implementation period. At appraisal in May 1981 the Somali shilling/US dollar exchange rate was 15 to 1 whereas by the time of project completion in June 1989 it was 400 to 1. By October 1990, the rate had soared to nearly 3,000 to 1. The current levels of remuneration received by even the highest level of the civil * service fall far short of a living wage. Consequently many staff have left DOH for better job opportunities in the private sector and others who want to leave and are restricted from leaving feel little obligation to job performance. In theory, revenue generated by the RMF should be adequate to provide, inter alia, the necessary staff incentives. However the current fuel tax levy earmarked for the RMF amounts to a token So. Shs. 0.2 per liter, a specific tax rate unchanged since the establishment of the Fund on September 1, 1988. O. 1!rogint Sustainabilitv 23. The institutional accomplishments of the Project set the stage for future improvement in road mainienance in Somalia. It remains for Government to utilize the framework by creating the appropriate conditions under which the RMP can generate adequate resources to finance routine road maintenance activities, estimated to cost US$1.2 million per year (1989  -6- prices). Measures to be taken to achieve this goal include eliminating the subsidy which exists in the price of motor fuels, making the fuel levy an ad valorem tax rather than a specific one, and expanding the tax base of the RMF to include not only diesel but also gasoline. These measures were embodied in the conditionality of a proposed follow-up project. 24. However, political developments in the Persian Gulf in August 1990 coupled with national macroeconomic imbalances indicate that Government will find it difficult to pursue further progress in road maintenance. High fuel prices, caused by the Persian Gulf crisis in the last quarter of 1990, has made it difficult for the Government to reach import parity pricing let alone implement revised tax schedules on motor fuel to finance road maintenance. In the short to medium term, heightened internal political discord militates against improved operations of the re- constituted DOH in most areas of the country. Once political and economic stability return to the country, DOH will require further assistance to activate the mechanisms at its disposal to implement an effective national road maintenance program. H. Bank Performance 25. Through the Fourth Highway Project, the Bank made a positive contribution to the development of the road transport sector. Bank staff contributed to the success of the project through supportive working relationships and professional advice. IDA attention given to the resolution of the problem created by the withdrawal of co-financing by the AFESD effectively saved the major component of the Project from collapse. Bank records reflect very little official communication from AFESD after the latter's withdrawal from the project, thereby creating a degree of uncertainty abou.. the co-financier's possible actions in the situation and thus making the preparation of contingency plans especially important. IDA's intervention making GOS aware and accept the fact that no additional AFESD funds would ce forthcoming after disbursements were suspended, was fundamental to arriving at a successful outcome with a minimum of disruption. The multitude of contracts for technical assistance each bearing similar titles and descriptions created problems in the processing of disbursement claims, with the result that the allocation of costs between them was difficult to ascertain. 26. The principal lessons include the following: a) IDA should carefully assess the risk involved in giving no objection to the award of a large contract before Credit effectiveness, especially if a significant amount of unsecured co- financing is involved; and b) Projects which call for a significant level of technical training should include specialists who are knowledgeable not only about the technical area concerned but also knowledgeable about effective and appropriate methods of experiential learning. I. Borrower Performance 27. DOH performance was barely adequate despite heavy reliance on foreign consultants. The Borrower was remiss in meeting standard reporting requirements, including quarterly progress reports and annual audit reporta. Productivity of DOH staff was low owing to low levels of remuneration (para. 21). 28. The major lesson suggests that where the Borrower's capacity to prepare financial audits of project accounts is limited, IDA should include  - 7 - funds for their preparation by external auditors, including international auditors if necessary. J. Consultina services 29. Consultant services for the supervision of the Afgoi-Baidoa road rehabilitation were well delivered. Supervision missions gained the impression that the assistance provided to the civil engineering contractor who was relatively inexperienced with the working conditions of Somalia was important and well done. Supervision reports were consistently thorough and timely. 30. Technical assistance provided to CED for preparation of the Road Maintenance Study and for institutional strengthening was characterized by a high turnover of staff who tended to act in line functions. At times local staff felt under-utilized. Stricter oversight by the consul'ant firm's management would have been desirable in the preparation of the RMS report.  PART II PROJECT REVIEW FROM BORROWER PERSPECTIVE On September 13, 1990 the Bank sent the Borrower a request to prepare Part II by November 30, 1990, but no reply was received.  - 9 - PART III STATISTICAL INFORMATION 1. Related Bank Credits ----------------------------------------------------------------__-------- Credit Year of Title Purpose A02royal Engineering Credit Highway design 1964 Completed First Highway Project Construction of 200 km primary roads and institutional development 1968 Completed Second Highway Project Construct 158 km Hargeisa- Berbera Road 1972 Completed Third Highway Project Construct 70 km from Hargeisa to Nabadid 1983 Completed Infrastructure Highway maintenance - Negotiated Rehabilitation Project  - 10 - Table 2. PROJECT TIMETABLE .................. .......................................---.. ...................... .......................................-ve*^XX- Date Revised Actuat Item Plannvd Date ................... ....... .......... ....... Identification 10/77 Preparation 04/81 Appraisal Mission 05/81 Credit megotiations 02/82 01/83 12/82 Board Approval 04/82 02/83 02/83 Credit Effectiveness 06/83 09/83 Credit Closing 09/87 09/88 Credit Coepletion 03/88 06/89 ............................................................................................................ Commnts: Extension of closing date granted to permit completion of technical assistance component of Project. .................................................... ................................................................................... Table 3. PROJECT COSTS (US# million) ............................................................................................................ Estfmatd Coats Actuat Csts 4/ Local Foreign Total Local Foreign Total Item Costs Costs Costs Costs Coats Costs .... ....... ....... ....... ....... ...... ....... 1. Strengthening of Afgolilaidoa Road 5.04 24.63 29.67 4.22 20.63 24.85 2. Supervision of 1. 0.12 1.08 1.20 0.12 1.06 1.18 3. Road Maintenance Study 1/ 0.04 0.36 0.40 4. TechnicaL Assistance to CEO 2/ 0.14 1.24 1.38 0.36 3.16 3.52 5. Assistance to Urgent Road Maintenance Need 3/ 0.05 0.45 0.50 0.05 0.48 0.53 TotaL Base Costs 5.39 27.76 33.15 4.75 25.33 30.08 ; Contingencies Physical 0.53 2.73 3.26 Price 2.71 4.68 7.39 SubtotaL 3.24 7.41 10.65 ~~~~~~~. ........ ........ ........ ........ ........... ....... Total Project Costs 4/ 8.63 35.17 43.80 5.93 24.15 30.08 ............................................................................................................ Comments: 1/ Included in *4. Tchnifcal Assistance to CEDO. 2/ Actual cost of technical assistance to CED increased by 180X owing to extension of contract period by 12 months, increases in agreed foes and llowanees, and additional training. 3/ Approximately 590,000 of "5. Urgent road maintenance" iorks included in "1. Strengthening Ot Afgoi - Baidoa" as both civil works contracts were carried out by the sam contractor. 4/ Actual costs are 68S of estimated costs owing to reduction in scope of the main civil works from 216 km to 80 km.  - 11 - table 4. PROJECT FINANCING (USS million) Estimated 1/ Actual 2/ IDA Expenditure Catal rle 23.00 22.80 Arab Fund I/ 16.30 2.21 GWS 4.50 5.07 .......... ..................... Total Project Costs 43.80 30.08 osauu.auuu asuU suflUUU .......................................................................................... Conn ts: 1/ Actual AFESO finance provided to project amounted to 13X of original * t _mte owing to withdrawal of eo-financier because of Soomlia's default on earieor credits. Table S. ALLOCATION OF LOAN PROCEEDS (SOR) Origfnal Actual Category osecription Allocation Disburs _ nts (1) Civit works 13,890,000 17,578,921 (2) Consultant services (a) Supervision 560,000 701,447 (b) Other 1,480,000 2,884.829 (3) Materials and Equip 420,000 48.240 (4) Unallocated 5,050,000 0 Total 21.400.000 21,213,437 sa*a-Ju--- *-uau-aJuuf Amount Cancolled on June 21, 1989 1/ 186,563 Coae~nts: 1/ Amount cancelled ncluded approximatoly SOR 100,000 for professional foes oarmarked for updating design of Afgoi-8aidoa goad strengthening to be continued uwder proposed ftollow-up project.  - 12 - ....................................................................................................... Table 6. SCHEDULE OF CREDIT OISURSEMEMTS (SOR million) .......................................................................... ............................. Year Appraisat Actual Actual/ Estimate Disbursement Estimato % ...................... ......... .............. ......... 19U3 2.10 0.00 0.0% 1984 5.10 3.09 60.oX 1985 12.60 7.56 60.0% 1986 20.00 18.70 93.5% 196? 21.40 19.80 92.5% 198 21.40 21.00 98.1% 1989 21.40 21.20 99.1% Cooments: 1/ Actual disbursement lagged behind estimated disbursement until 1986 when paym nts totalling SOR 7 million were made to contractor fn respect of outstanding suin owed by AFESO nd coqpensatlon for loss"s incurred as a result of the reduction in the scope of works. Table 7. PROJECT IMPLEMENTATION Mission Month/ No. of Staff Mission Date of Year Persons Weks Comosition Report in Felod 1/ Identification 10/77 2 2 HE, EC Prep ration 03/79 2 2 HE, EC Prepration 11/79 1 1 HE 01/11/80 Proparation 06/80 1 1 HE 07/11/80 Appraisal 05/81 3 6 HE,EC,YP 06/11/81 Post-apprasatl 11/82 1 1 DC, HE 01/19/83 Supervision 1 11/83 1 2 HE 01/31/84 Supervision 11 06/84 2 2 2 x HE 07/20/84 Supervision III 12/84 1 2 He 01/15/85 Supervision IV 03/85 1 1 NE 04/19/65 Suporvision V 05/85 1 1 HE 06/26/85 Supervision Vt 12/85 1 1 mE 01/30/06 Supervision VI 06/86 1 1 mE 09/03/" Supervision VlIl 11/86 1 1 HE 02/03/87 Supervision IX 08/8D 1 1 NE 09/25/87 .............................................................. .......................................... I/ me - Hlghwa oniginvr; IC - Ecrominst: DC - DvIsior Chief; YP -Young Protiessfonsl  - 13 - ....................................................................................... Table S. PROJECT IMPLENENTATION ................................. ................................................................ . Planned Actual onths Project COonent CoNplotion CoWplotion of Oelay ...................................................................................... Civil Works ............ *trongthoninfg/IprovMnt of Afgo -saidee Road 04/86 09/85 .6 Rehabilitation of Sgidges (lulo-Surti oleed Weino ) 12/85 6/87 -18 Technical Assistancoe ad Training .................................... Road Maintenance Study 12/85 4/85 .8 Technical Assistance to CEO 12/85 3/89 -39 .................................................... ........................ ^....  - 14 - SOMALIA Fourth Highway Prolect (CR. 1324-S00 Compliance with Credit Covenants Covenant section status The Borrower shall employ ' 02 Complied with. consultants whose qualifications shall be satisfactory to IDA. The Borrower shall (1) review 3.06 Final re.orts was with IDA the findings and submitted in September recommendations of the road 1985. (1) Complied maintenance study; and (2) within with. 1986. (2) six months after completion of Implementation of this study prepare and submit to recommendations has been IDA for its approval an action delayed due to lack of plan to implement the Government commitment to recommendations of the study. these recommendations. The Borrower shall by October 31, 3.07 Complied with. 1983, appoint a counterpart staff member to each member of the consultant' team to prcvide technical assistance to CED. 1/ The qualifications and experience of such counterparts shall be satisfactory to the Association. The Borrower shall prepare list 3.08 The urgent road of materials, equipment, spare maintenance work was parts and tools needed to carry carried out by contract. out urgent road maintenance works, and submit such lists to IDA for its approval, well before inviting price quotations for such goods. The Borrower shall furnish to IDA 4.01 Complied with except for not later than six months after report for FY 1988/89. the end of each fiscal year, an audit report on the project accounts. _________________ 1/ CED was reconstituted as the Directorate of Highways (DOH) in January 1989.  - 15 - The Borrower shall, starting in 4.02 Complied with. 1983 and until completion of the project, annually recruit for CED additional newly graduated civil engineers, so that CED shall employ at least 10 additional civil engineers by the completion of the project. The Borrower shall cause its 4.03 Not complied with. highways system to be adequately So.Sh.18 million was maintained, and shall (1) for budgeted in 1985. This 1984 allocate not less than was far below the agreed So.Sh.20 million for road figure, due to high maintenance, and (2) by September inflation. In fact, 1 of each year up to and less than 10 million including 1987, review with IDA So.Shs. was actually the proposed allocations for road allocated to road maintenance for the following maintenance. For 1986 budget year. and 1987, the budget allocation was So.Shs. 24 million. The Borrower shall ensure that 4.04 Not complied with. Road all road maintenance staff and maintenance personnel equipment shall not be diverted and equipment were often to uses other than road diverted to maintenance. upgrading/reconstruction of roads. The Borrower shall take measures 4.05 The Road Maintenance to enforce axle-load regulations. Study put forward recommendations in 1987, Government passed a decree mandating maximum axle-loads; however decree has not yet been enforced in a regular manner. The Borrower shall, by June 30, 4.06 Complied with in mid- 1984, submit to IDA for its 1987. approval a training program for CED highways sections.  - 16 - ANNEX SOMALIA FOURTH HIGHWAYS PROJECT Project Completion Report Economic Reevaluation of Afgoi-Wanle Wein Road 1/ Net Year Costs 2/ Benefits Benefits (USS Millions) (USS MillLons) (USS Millions) 1983 5.35 (5.35) 1984 5.73 (5.73) 1985 15.35 (15.35) 1986 0.00 4.49 4.49 1987 0.00 4.58 4.58 1988 0.00 4.67 4.67 1989 0.00 4.76 4.76 1990 0.00 4.86 4.86 1991 0.00 4.96 4.96 1992 0.00 5.06 5.06 1993 0.00 5.16 5.16 1994 0.00 5.26 5.26 199S 0.00 5.37 5.37 1996 0.00 5.48 5.48 1997 0.00 5.59 5.59 1998 0.00 5.70 5.70 1999 0.00 5.81 5.81 2000 0.00 5.93 5.93 2001 0.00 6.05 6.05 2002 0.00 6.17 6.17 2003 0.00 6.29 6.29 2004 0.00 6.42 6.42 2005 0.00 6.55 6.55 ERR 16.23% Notes: 1/ Calculation of ERR was done in 1985 prices in US dollars 2/ Economic costs include cost of civil works ($24.85 million), costs of engineering design ($0.4 million) and consultant supervision ($1.18 million).  IBRD 15924R. 12* /DJIBOUT I REPUBLIC OF YEMEN IBOUTI cyodo~~~~~~~~~~~~~~~~adl /SeyI Adodo Bososo 0+ e Mai'l KAIKoreh t ~~~~~ > l \ M o il *tD~~~~~~~~~~~~~~~~~~~OSASOd ' ~~~ LuL~~~~~~~A BreaKB bro LASKOALBndrBel 1x RAM W it X ~~~~~~~~~~~~~~~~~~~E-E !G El CAAA rRK .AVSOo Tug Buroloco 5000 BOEOOtt n Los Anod PRIMARY AND SECONDARY ROADS' Bituminous Surfaced Grovel or Earth Surface PREVIOUS BANK HIGHWAY PROJECTS Construction Feosibility Studies & Detailed Engineering GAIKAYO JA AiA FOURTH HIGHWAY PROJECT Strengthening & Improvement /MUDUG 4. Major Ports + Domestic Airfields * Internotional Airports BY Rivers 9 ./V../ iX/ - - District Boundaries A\ D eb Obbia Regional Boundories - Internationol Boundaries r EL8UR |HARAROERS . - r -w a G>LGADUD / \t' EL BAROE lebtwen1 i I El Bur 4.- 'WAJIO1 J~. - B ADENYASAL "' 0 50 100 50 200 250 300 FYAI HAF aRE BoLES I r~~~~Ik Ako I LNAK A DiN i S! O BAY a f BA .-U s- FA iiSAO *-KORYOLE e O4 L BALE DISHUe MIDODLE JU 10WER * fU - , ~~ I Klu \olivi O A IH AFMADU GELaBvo _o- . s- - stoz -/oome SOMALIA ~~~~~~~~~~~~~~0' \ E T H I10 P I A : iKolbi\ KISMY SOMOALIA/ FOURTH HIGHWAY PROJECT O* \ \1' / Road Networkt ,gE KENYA I _ / } e ~~~~~~~~~~~~~~~~~~~~TANZANIA DECEMUE 1190