Ghana - Transport Rehabilitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15741 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA TRANSPORT REHABILITATION PROJECT (CREDIT 1858-GH) June 17, 1996 Infrastructure Operations Division West Central Africa Department 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.  CUJRRENCY EQUIVALENTS Currency t,Unit = cedi (C) UtSS 1 1987 = 160 cedis (SAR) 1988 2- 03 cedis 1 989 270 cedis 1991) - 326 cedis ]991 367 cedis 1992 - 437 cedis 19)3 = o5 1 cedis 1 994 964 cedis '995 1,200 cedis 1996 1,500 cedis WEIGHTS ANDL MEASURES 1 meter (im) 3. 28 feet (ft) I hectare (ha) = 2.47 acres 1 kilometer (kin) = 0 62 mile (mi) I metric ton (t) 22,205 pounds (lb) F'ISC'AL, YEAR January I - December 3 1 ABBREVIATIONS AND ACRONYMS ADT -- Average Daily Traflic AftD - African Deve'opnment Bank DFR -- Department of Feeder Roads DUR -- Department of Urban Roads ERP -- Economic Recovery P'ro;ram GCAA -- Ghana Civil Aviation Authority GHA -- Ghana Highw, ay Authority GPHA -- Ghana Ports and H]arbors Authority GRC -- Ghana Railhay C'orporation ICB - Internationial Competitive Bidding LCB -- Local Coompetitive BEidding M'EP -- Ministry ot' Finanice and Economic Planning MRH -- Ministry of Roads and Hlighways MOTC'-- Ministry of'Transport and C'ommunications NPC -- National Planning C'ommnission PIP -- Public Investnment Prc,,,ranr PMU -- Project Managemernt Unit PPF -- Project Preparation Flacility VOC -- Vehicle Operati.1g CosT WF' -- World Food Prograrm  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA TRANSPORT REHABILITATION PROJECT (CREDIT 1858-GH) TABLE OF CONTENTS Page Nos. PREFACE EVALUATION SUMMARY i-iv PART I - PROJECT IMPLEMENTATION ASSESSMENT Introduction I Project Objectives 1 Achievement of Project Objectives 3 Implementation Record and Major Factors affecting the Project 4 Project Sustainability 6 Bank Performance 6 Borrower Performance 7 Assessment of Outcome 7 Future Operation 8 Key Lessons Learned 8 PART II - STATISTICAL ANNEXES Table 1: Summary of Assessments 10 Table 2: Related Bank Loans and IDA Credits 11 Table 3: Project Timetable 13 Table 4: Credit Disbursements: Cumulative Estimated and Actual 13 Table 5: Key Indicators for Project Implementation 14 Table 6: Key Indicators for Project Operation 16 Table 7: Studies Included in Project 17 Table 8A: Project Costs 18 Table 8B: Project Financing 18 Table 9: Economic Costs and Benefits 19 Table 10: Status of Legal Covenants in the Credit Agreement 20 Table 11: Compliance with Operational Manual Statements 22 Table 12: Bank Resources: Staff Inputs 22 Table 13: Bank Resources: Missions 23 APPENDIX A. Borrower contribution to the ICR 24 This docunent has a resiricted distribution and may be used by recipients only in the performance of their oEficial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization. I   IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA TRANSPORT REHABILITATION PROJECT (CREDIT 1858-GH) Preface This is the Implementation Completion Report (ICR) for the Transport Rehabilitation Project (TRP-1) in Ghana, for which Credit 1858-GH in the amount of SDR 46.9 M (US$60.0 million equivalent) was approved on December 10, 1987, and made effective on May 9, 1988. The Credit was closed on December 31, 1995, 24 months behind the Credit Agreement schedule. It was fully disbursed, and the last disbursement took place on April 24, 1996. Cofinancing for the project was provided by the Government of Italy; however, most of the cofinancing noted in the SAR did not materialize. The ICR was drafted by Harold Young, a consultant, in 1994 and updated by Farida Khan of the Infrastructure and Urban Development Division (AF4IN), West Central Africa Department, and reviewed by Mr. James Wright, Division Chief and Mr. Franz Kaps, Project Adviser. Preparation of this ICR began in April 1995 during the appraisal mission of a proposed Highway Sector Investment Credit. Since the appraisal mission aide-memoire summarizes the findings as regards to the project, no specific ICR aide-memoire has been written. The ICR is based on material provided in the project file and on interviews with project staff. The Borrower contributed to the preparation of the ICR by preparing its own evaluation of the project's implementation (Appendix) and by commenting on the draft ICR.   IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA TRANSPORT REHABILITATION PROJECT (CREDIT 1858-GH) EVALUATION SUMMARY Introduction 1. Country Background. Ghana experienced a major economic crisis during the 1970s and early 1980s. The transport infrastructure faced virtual collapse due to prolonged neglect of maintenance and rehabilitation. In 1983, Ghana launched a successful Economic Recovery Program (ERP) emphasizing the restoration of export capacity as part of its basic strategy. Under the ERP, with considerable support from IDA and other donors, Ghana undertook emergency repairs and rehabilitation of parts of its transport network, and initiated generally sound pragmatic institutional reforms. While these measures averted the complete breakdown of the transport system, by late 1987 much remained to be done to restore its capacity to meet current and future needs, and to strengthen the management of the transport sector and rebuild its institutions. These objectives were noted in the SAR as requiring a decade or longer of concerted effort to accomplish. Government had requested IDA's support in continuing the rehabilitation of the transport sector; particularly in roads and road transport, railways, and sector management begun under earlier projects. The Transport Rehabilitation Project, (TRP-1), was prepared during 1986- 87, while a follow-up project, the Second Transport Rehabilitation Project, (TRP-2), had been identified at that time. It was prepared during the execution of TRP- 1, and was approved by the Board on December 13, 1990. Project Objectives 2. The project complemented and reinforced IDA's ongoing assistance to Ghana in support of its ERP. The aim of the project was to sustain and help consolidate the momentum of Ghana's economic recovery by: (a) removing physical bottlenecks to the expansion of exports, farm production and labor mobility through better maintenance and further rehabilitation of the transport infrastructure; (b) raising the efficiency of the transport sector through (i) promotion of market-oriented policies, (ii) increasing involvement of the private sector, (iii) strengthening transport institutions, and (iv) improving productivity; (c) facilitating rural transport by promoting appropriate low-cost technology; and (d) reducing transportation costs for both goods and passengers. The project formed part of Ghana's 1986-88 investment program and the new 1988- 90 investment program then being prepared. IDA's involvement in the transport and other sectors, was beginning to pay off in a quickened pace of economic recovery. It followed up earlier credits dedicated to better maintenance and more efficient management in the crucial transport sector. IDA's help was needed not only to ensure appropriate policy reform but also to attract potential cofinancing support for the priority physical investments which still needed to be made under the Government's transport rehabilitation program.  ii 3. Project Description. The main thrust of the project was road maintenance and rehabilitation (73 percent of total project costs) and railway rehabilitation (22 percent), with associated technical assistance; support for transport sector institutions (3 percent); and pilot programs in support of small-scale private road transport and low-cost rural transport (2 percent). The main project components and sub-components are described in Part I. 4. Credit Covenants and Special Agreements. The credit agreement included covenants covering implementation arrangements, cost recovery measures, the timing of fiscal studies and follow-up actions. 5. Evaluation of Project Objectives. The project's objectives were clear and were largely achieved although with delays because of slow implementation particularly of the bridge program and the Ghana Railway Corporation (GRC) component. The Ministry of Transport and Communications (MOTC) and its agencies greatly benefited from the large scale and comprehensive training of transport staff in roads, railways and civil aviation. The emphasis placed on developing local consultants and contractors to design, build and maintain lower standard roads provided additional benefits to local firms, technical staff and workers, as well as to the state. Rural transport was improved by the development of low-cost technology vehicles and by the feeder road program. Farmers, including women, also benefited from the project through better roads and the promotion of non-motorized transport. The project was well conceived, carefully coordinated, and provided a wide range of assistance to the overall transport sector. The project objectives are considered sound and reasonable in the light of the country's background. The project achieved all of its major objectives, and facilitated execution of the follow-up project. Despite a delay in completion, the project was successful in achieving its objectives. Implementation Experience And Results 6. Assessment of Project's Success in Achieving its Objectives and Sustainability. The road maintenance and rehabilitation components have substantially improved the condition of Ghana's trunk road network and are contributing to a reduction of transport costs for both goods and passenger transport. Besides physical road improvements, a system of cost recovery through road user charges and a road fund has been established thus contributing to the sustainability of road maintenance. The railway rehabilitation program, well behind schedule due to cofinancing problems, has prevented the railway corporation from meeting its traffic targets. The transport agencies have greatly benefited from large scale comprehensive training. The motor vehicle safety program has helped reduce Ghana's high accident rate. The implementation of transport study results have been successful and are contributing to increased overall efficiencies in the transport sector. 7. Economic Evaluation. The overall economic rate of return estimated at appraisal was 34 percent, ranging from 25 percent for railways to 47 percent for the road maintenance program. The weighted average ERR of the sample of roads as given in Table 9 is now estimated at 42 percent as compared to 61 percent at appraisal. No ERR was calculated for the railway component as it was only recently completed.  iii 8. Summary of Costs. The latest project cost estimate is about US$200.39 million, compared to the SAR estimate of US$222.4 million. IDA disbursed US$65.8 million, compared to US$60.0 million estimated at appraisal; government provided about 78 percent of its estimated contribution of US$100.5 million (the other 22 percent consisted of taxes for goods which were cleared tax free), while most of the co-financing did not materialize. 9. Implementation Timetable. The project was approved by the Board on December 10, 1987, and became effective on May 9, 1988. As the project had been fully prepared by the time the Credit was signed, no time was lost in starting up work on the various project components. Later on, the implementation slowed down due to the bridge program and the GRC component. 10. Analysis of Key Factors Affecting Achievement of the Major Objectives. The factor that had the greatest impact on project implementation was the non-availability of cofinancing. Other factors were long delays in the award of tenders following the receipt of bids because of the Government's cumbersome review procedures, and its failure to promptly release funds to Ghana Highway Authority (GHA) and GRC. 11. Assessment of Performance of the Bank and the Borrower. Overall, the Bank's performance in preparing and supervising this broad based project was good. The Borrower's performance was satisfactory. 12. Assessment of Project's Outcome. The outcome was satisfactory for all components, except a small sub-component of the "Pilot Programs for Road Transport and Low Cost, Rural Transport" relating to the provision of credit for small contractors. Summary Of Findings, Future Operations, And Key Lessons Learned 13. The project was successful because it was well prepared, met the needs of the sector, included provision for adequate design and supervision of the various components, and the Borrower mobilized the requisite implementation resources. Lack of cofinancing, and the slow provision of counterpart funds for road works and the railways caused delays. The project formed part of an overall rehabilitation program of the transport sector which is being continued under a follow-up projects. A Credit of US$100.0 million for the Highway Sector Investment Program was approved on May 14, 1996. This is the first time an integrated sector-wide investment approach has been adopted for the sustainable development and management of a sector in Ghana. 14. Lessons for Future Projects in the Transport Sector i. Counterpart funding arrangements need to be carefully made and followed up on; ii. Every effort should be made to complete arrangements for cofinancing before a lending operation is presented to the Board. iii. The project was innovative and is a good case of how to design a comprehensive program to assist weak institutions throughout the transport sector.  iv iv. Frequent supervision visits by experienced staff contributed substantially to the successful execution of the project. v. The Borrower also contributed to the success of the project by placing competent personnel in charge of its ministries and departments. vi. The importance of low cost non-motorized transport to the rural poor was demonstrated by the project which assisted local NGO's in developing, manufacturing and demonstrating their usefulness to farmers, including women. vii. Careful planning resulted in the preparation and implementation of a series of related projects in the transport sector which stimulated the low cost movement of bulk minerals and agricultural crops. This key step greatly assisted Ghana's ERP.  IMPLEMENTATION COMPLETION REPORT REPUBLIC OF GHANA TRANSPORT REHABILITATION PROJECT (CR. 1858-GH) PART I - PROJECT IMPLEMENTATION ASSESSMENT I. INTRODUCTION 1. Country Background. Ghana experienced a major economic crisis during the 1970s and early 1980s. The transport infrastructure faced virtual collapse due to prolonged neglect of maintenance and rehabilitation. In 1983, Ghana launched a successful Economic Recovery Program (ERP) emphasizing the restoration of export capacity as part of its basic strategy. Under the ERP, with considerable support from IDA and other donors, Ghana undertook emergency repairs and rehabilitation of parts of its transport network, and initiated generally sound pragmatic institutional reforms. While these measures averted the complete breakdown of the transport system, by late 1987 much remained to be done to restore its capacity to meet current and future needs, and to strengthen the management of the transport sector and rebuild its institutions. These objectives were noted in the SAR as requiring a decade or longer of concerted effort to accomplish. Government had requested IDA's support in continuing the rehabilitation of the transport sector; particularly in roads and road transport, railways, and sector management begun under earlier projects. The Transport Rehabilitation Project, (TRP-1), was prepared during 1986- 87, while a follow-up project, the Second Transport Rehabilitation Project, (TRP-2), had been identified at that time. It was prepared during the execution of TRP- 1, and was approved by the Board on December 13, 1990. 2. Project Preparation. The TRP-1 project was prepared with funding from the previous road project (Cr. 1601-GH), the previous railway project (Cr. 1 170-GH), and a PPF for US$14 million. The funds were used for a wide range of studies and to prepare designs and bid documents, which greatly expedited preparation of this multi-component project. IDA followed up project preparation closely with frequent missions by Bank staff fully familiar with local conditions and previous road, port and rail projects. The result was that the project, covering the whole transport sector with the exception of the ports, which were fully rehabilitated under an earlier project, was thoroughly prepared and presented to the Board in less than two years following its identification. H. PROJECT OBJECTIVES 3. The project complemented and reinforced IDA's ongoing assistance to Ghana in support of its ERP. The aim of the project was to sustain and help consolidate the momentum of Ghana's economic recovery by: (a) removing physical bottlenecks to the expansion of exports, farm production and labor mobility through better maintenance and further rehabilitation of the transport infrastructure; (b) raising the efficiency of the transport sector through (i) promotion of market-oriented policies, (ii) increasing involvement of the private sector, (iii) strengthening transport institutions, and (iv) improving productivity; (c) facilitating rural transport by promoting  2 appropriate low-cost technology; and (d) reducing transportation costs for both goods and passengers. The project formed part of Ghana's 1986-88 investment program and the new 1988- 90 investment program then being prepared. IDA's involvement in the transport and other sectors, was beginning to pay off in a quickened pace of economic recovery. It followed up earlier credits dedicated to better maintenance and more efficient management in the crucial transport sector. IDA's help was needed not only to ensure appropriate policy reform but also to attract potential co-financing support for the priority physical investments which still needed to be made under the Government's transport rehabilitation program. 4. Evaluation of Project Objectives. The project's objectives were clear and were largely achieved, though with delays on the bridge program and the Ghana Railway Corporation (GRC) component. The Ministry of Transport and Communications (MOTC) and its agencies greatly benefited from the large scale and comprehensive training of transport staff in roads, railways and civil aviation. The emphasis placed on developing local consultants and contractors to design, build and maintain roads provided additional benefits to local firms, technical staff and workers, as well as to the state. Rural transport was improved by the development of sturdy bicycle trailers and by the feeder road program. Farmers, including women, also benefited from the project through better roads and the promotion of non-motorized transport. The project was well conceived, carefully coordinated, and provided a wide range of assistance to the overall transport sector. Despite some delay in completion, the project was successful in achieving its objectives. 5. Project Description: The main thrust of the project was road maintenance and rehabilitation (73% of total project costs) and railway rehabilitation (22%), with associated technical assistance; support for transport sector institutions (3%); and pilot programs in support of small-scale private road transport and low-cost rural transport (2%). The main project components and sub-components are described below. (a) Road Maintenance and Rehabilitation i. a two-year (1988-89) time-slice of Ghana Highway Authority's (GHA) and Department of Feeder Road's (DFR's) road maintenance programs, including clearance of maintenance backlogs; ii. technical assistance for project supervision and management strengthening at Ministry of Roads and Highways (MRH), GHA and DFR; iii. rehabilitation of about 512 km of the Kumasi-Paga Road; and iv. a bridge rehabilitation program. (b) Railway Rehabilitation Program i. Rehabilitation of the Eastern and Central lines (256 km and 183 km respectively) of the GRC and provision of essential rolling stock and other inputs to increase overall capacity; and ii. technical assistance for management support and training.  3 (c) Support for Transport Sector Institutions i. strengthening MOTC organization including policy studies and institutional reforms; ii. management support to Ghana Civil Aviation Authority (GCAA), iii. improvement of road safety and traffic management, iv. training programs for road transport and GCAA; (d) Pilot Programs for Road Transport and Rural Transport i. A credit facility and technical assistance for small vehicle workshops, spare parts reclamation, a freight terminal, and for the commercial production of low cost non- motorized vehicles; and ii. assistance to develop and promote low cost non-motorized vehicles suitable for use in rural areas and small towns. (e) Support for Infrastructure Planning i. Support for infrastructure planning to be under-taken by the National Planning Commission (NPC). III. ACHIEVEMENT OF PROJECT OBJECTIVES 6. Overall the project was successful, in particular, components related to strengthening transport sector institutions, pilot programs supporting private road transport and training both locally and abroad. Evaluation of the project as a whole is reflected in Table 1 of Part II. Achievements were substantial for sector policies and institutional development. Financial and physical objectives were only partially achieved because the expected cofinancing did not materialize and there were delays in counterpart funding. Components funded from the IDA credit were successfully completed. 7. Sector Policy Objectives. The Road Maintenance and Rehabilitation operations have substantially improved the condition of Ghana's trunk road network and are contributing to a reduction of transport costs for both goods and passenger transport. Besides physical road improvements, a system of cost recovery through road user charges and a road fund has been established thus contributing to the sustainability of road maintenance. The implementation of transport study results has been very successful and is contributing to increased efficiencies in the overall transport sector. The motor vehicle safety program helped reduce Ghana's high accident rate. 8. Institutional Development Objectives: The MOTC and M]RH and their agencies (DFR, GHA, GRC and GCAA) greatly benefited from large scale comprehensive training, (both in and outside the country) of staff in roads, railways and civil aviation.  4 IV. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT Implementation Record 9. The project was approved by the Board on December 10, 1987 and became effective on May 9, 1988. As the project had been fully prepared by the time the Credit was signed, no time was lost in starting up work on the various project components. The credit agreement included a number of covenants covering implementation arrangements, the timing of fiscal studies and follow-up actions. Progress in implementing the project was satisfactory overall. There were however some problems. Delays arose on the GRC component because the expected cofinancing did not materialize and road and bridge rehabilitation were slowed down because budget releases from the Ministry of Finance and Economic Planning (MFEP) were not on time. 10. Road Maintenance and Rehabilitation: The implementation of this component was satisfactory. Some 330 km of trunk roads have been rehabilitated and 1,200 km of trunk roads have undergone periodic maintenance. 11. Railway Rehabilitation Program: The rehabilitation of the Eastern and Central lines was behind schedule because of low locomotive availability for hauling materials to the work site and insufficient release of funds by the Government. Lack of cofinancing adversely affected the performance of GRC as cofinancing was to be used for the purchase of new locomotives to bolster GRC's hauling capacity. This delayed the reconstruction of the Eastern and Central lines, and prevented GRC from handling all the freight traffic offered as well as potential passenger traffic. This, in turn, prevented GRC from meeting its operating performance goals set in the Project Agreement, and later in the Performance Agreement it signed with the Government. It was not until 1993 that GRC received four locomotives provided by France. These locomotives enabled GRC to greatly improve its performance. Finally in 1995, the Japanese Government provided 14 locomotives jointly cofinanced under TRP-1 and TRP-2. 12. Support for Transport Sector Institutions: The MOTC and MRH and their agencies (DFR, GHA, GRC and GCAA) greatly benefited from large scale comprehensive training (both in and outside the country) of staff in roads, railways and civil aviation. 13. Pilot Programs for Road Transport and Rural Transport: The implementation record of this component was mixed. The "Line of Credit" facility did not work out on account of poor recovery of interest from beneficiaries under the "Tools and Equipment" subcomponent and other subcomponents not taking off. The amount under this component was reallocated to GRC. Low cost transport technology for non-motorized transport was developed and introduced in selected rural communities, in the north of Ghana. 14. Support for Infrastructure Planning: Initially this component moved very slowly due to delays in fully formalizing National Planning Commission's (NPC) operations, and in appointing key officials. The two specialists provided under technical assistance performed well and NPC has prepared a national development and implementation plan. Overall the implementation was satisfactory.  5 15. Economic Evaluation. Road Maintenance Program: The actual economic rate of return (ERR) and the net present value (NPV) are based on HDM-III (see Table 9). Where data for HDM input was not available in the Consultant's Reports, the data from GHA was used. Roughness values were estimated for some Gravel Roads where Post Construction Studies were done long after their construction. The present value of actual project costs is approximately 29 percent higher than expected at appraisal. Further deterioration of the roads between the time of appraisal and the time of execution of works on certain roads, led to a substantial change in the scope of works in order to restore the roads to an acceptable standard. This led to a related substantial change in costs and lower ERRs after completion. This is particularly marked where the initial average daily traffic (ADT) is low, indicating the need for a more careful assessment of investments under these conditions. The weighted average ERR of the sample of roads as given in Table 9 is now estimated at 42 percent as compared to 61 percent at appraisal. The NPV-- computed with a discount rate of 15 percent--is now 2,731.0 million cedis (4,188.9 million cedis estimated). Railway Rehabilitation Program: No ERR has been calculated as this component was not completed until recently. Analysis of major factors that affected project implementation 16. Factors Generally beyond Government Control. The factor that had the greatest impact on project implementation was the non-availability of cofinancing. Lack of the cofinancing anticipated at the time of board presentation of the project was a handicap throughout the period of execution of the project. As a result, GHA was forced to slow down its program of works. Lack of cofinancing also adversely affected the performance of GRC as cofinancing was to be used for the purchase of new locomotives to bolster GRC's hauling capacity. Over time, GRC's traction capacity gradually diminished with the wear on old equipment. This delayed the reconstruction of the Eastern and Central lines, and prevented GRC from handling all the freight traffic offered as well as potential passenger traffic. This in turn, prevented GRC from meeting its operating performance goals set in the Project Agreement, and later in the Performance Agreement it signed with the Government. It was not until 1993 that GRC received new locomotives. 17. Factors Generally Subject to Government Control. Other factors were long delays in the award of tenders following the receipt of bids because of the Government's cumbersome review procedures, and its failure to promptly release funds to GHA and GRC. The delays in awards frequently led to increased cost because bidders often refused to extend the validity date of their bids which expired because of the prolonged time taken to approve contract awards by the different levels of the Government. Also, roads deteriorated further while awaiting repairs. For GRC the problem was two fold: (a) the slow release of foreign exchange to enable it to purchase spare parts and equipment abroad, and (b) the inadequacy of local funding for capital expenditure. These problems continued throughout the life of the project, and the Government made little or no progress in improving its performance despite continual reminders by Bank missions and telexes from headquarters. As a result, the project was not completed until December 1995, 24 months beyond the completion date of December 31, 1993. The closing date had to be extended by 24 months to December 31, 1995.  6 18. Disbursements ran substantially behind the appraisal estimate as shown in Table 4. While delays in contract awards and in the release of local funds contributed to slow disbursements, the decision to reduce disbursement percentages on the roads component because of lack of cofinancing, also contributed to the lower than forecasted disbursement rate. V. PROJECT SUSTAINABILITY 19. The project enhanced Ghana's ability to rehabilitate and maintain its transport infrastructure. Introduction of a system of cost recovery through road user charges and the establishment of a road fund financed, through a levy on fuel, vehicle tolls and license fees is a major step towards providing an assured source of funding for road maintenance thus contributing to the sustainability of road maintenance. The implementation of transport study results has been very successful and is contributing to increased efficiencies in the overall transport sector. The motor vehicle safety program helped reduce Ghana's high accident rate and IDA is continuing to support safety programs under ongoing projects. The MOTC and MIRH and their agencies (DFR, GHA, GRC and GCAA) greatly benefited from large scale comprehensive training, (both in and outside the country) of staff in roads, railways and civil aviation resulting in increased institutional capacity to develop and implement policy reforms. VI. BANK PERFORMANCE 20. Overall, the Bank's performance in preparing and supervising this broad based project was good. The project was thoroughly prepared, which enabled its execution to get underway immediately after the credit was signed. 21. Every facet of transport was assisted by an extensive training program covering the needs of the various transport agencies of the Government. Public and private sector transport operators assisted through the provision of spare parts, the development of local workshops and garages, the training of mechanics and the implementation of a road safety program. In addition, domestic banking was strengthened to provide assistance to private sector workshops, mechanics and those involved in developing intermediate forms of transport. The project was innovative and is a good example of how to design a comprehensive program to assist institutions in all parts of the transport sector. The many appreciative letters in the correspondence files from Ghanaians who were trained abroad testify to the usefulness and pertinence of the training programs. 22. The Bank could have done more to ensure that cofinancing would be available by the time the credit was signed. The lack of cofinancing had serious consequences for GHA and GRC, greatly slowing the execution of their components. During a visit by a Bank mission to the African Development Bank (AfDB), about the time the project was presented, AfDB expressed surprise that it had not been approached earlier for cofinancing. There is no correspondence in the files indicating that efforts were made to encourage participation of Italy, CIDA and the Japanese despite their inclusion in the list of expected co-financiers to provide US$100.5 million (para 3.24 of the SAR). Support was eventually obtained from Italy, France and Japan.  7 23. Supervision visits were frequent, and aide memoires extensively recorded the discussions and agreements reached at the final meetings of missions with transport officials. The Bank was helpful in considering changes to expedite the project, firm in requiring that its procurement rules be adhered to, but willing to compromise to help resolve particular problems raised by the Borrower. Undoubtedly, a contributing factor to the success of the Bank's supervision was the skill, long previous experience in Ghana, and familiarity of its staff with the transport sector and the many agencies involved as well as their management. The only caveat regarding supervision was the generally high rating given for "availability of funds" which should have been rated lower, thus calling attention to the need for more forceful action on the part of the Bank. 24. The Bank also performed well in insuring the continued provision of food aid under the World Food Program (WFP) for workers and staff of MRH, GHA and DFR. Food aid had been initiated under earlier transport projects and provided an effective wage supplement and incentive to increased productivity. VII. BORROWER PERFORMANCE 25. Officials heading up the various transport agencies of the Borrower were cooperative with the Bank, and ably performed their duties. There was little in the way of procurement problems, other than the protracted clearance times by Government, and those that arose were promptly handled to the satisfaction of the Bank. Government officials kept the Bank closely informed on progress, and delivered satisfactory audit reports on the various accounts opened under the project, and on GRC. Government's failure to promptly make counterpart funds and foreign exchange available, as it was committed to do under the Credit Agreement, caused delays, particularly to the GRC component, throughout the execution period. 26. The shortfall in cofinancing exacerbated the situation as Government had to attempt to find the equivalent funding elsewhere. As noted previously, it would have greatly facilitated execution, if the Bank and the Government had insured the availability of cofinancing by the time the credit was signed. VIII. ASSESSMENT OF OUTCOME 27. The project's major objectives were achieved and the outcome is judged satisfactory. TRP-1 originally focused on the first two-year slice (1988-89) of the program, which effectively was completed over 1988-91, due to a delayed start, procurement and construction time-lags, and the unavailability of US$20 million in anticipated cofinancing, which had to be made up with local financing over a longer period. While development of the ICB process, including preparation of standard bid documents and Government's approval of the ICB awards, took longer than expected, it was successfully launched. Engineering studies, specifications and tender documents for some 1,300 km of periodic road maintenance works which are being implemented under the follow-up project, TRP-2, were prepared. This advanced preparation and the finalization of standard bidding documents under TRP- 1 enabled TRP-2 to be implemented quickly, avoiding delays encountered under TRP- 1. During negotiations of TRP-2, the Government agreed to streamline its procurement clearance process for award of future contracts, which further expedited TRP-2's implementation.  8 28. A shortage of funding was the main bottleneck in implementing the road stabilization program. As institutional constraints were largely resolved, and contractor capacity was available, funding remained the main problem. The magnitude of financing needed was indeed large, and was apparently beyond Ghana's capability to meet (para 3.21). The Government made some progress in increasing the level of road user charges under TRP- 1 and agreed under TRP-2 to progressively increase the cost recovery from road users. 29. The Government made substantial efforts to tackle the problems of road transport through appropriate policy changes, which emphasized competition and free market operation of the transport system, and through investment support, where essential. The main sector problems were identified during the preparation of TRP-1 and these were addressed under the project. IX. FUTURE OPERATION 30. To provide sector planning support for Ghana's transport sector institutions, the Government is implementing a phased program of technical assistance and other support to strengthen planning units in MOTC, MIRH, GHA and DFR. A Transport Sector Strategy Note (TSSN, Report No. 5737-GH, June 1985) prepared by the Bank and agreed with the Government in mid-1985, focused on the main transport problems and policy issues, and presented a short and medium term strategy for tackling them. Further Government/Bank joint reviews undertaken in 1989, 1992 and 1994, recommended that the process of reducing the backlog of maintenance should be continued, while concurrently maintaining roads that have been restored to "good" condition and implementing policies and institutional reforms to make the delivery of transport services more sustainable and responsive to users' needs. Following this, a Credit of US$100.0 million for the Highway Sector Investment Program was approved on May 14, 1996. This is the first time an integrated sector-wide investment approach has been adopted for the sustainable development and management of a sector in Ghana. IDA' s credit, together with pledges from other donors, would support implementation of the 1996-2000 Road Sector Expenditure Program jointly developed by the Government, user groups, the Parliamentary sub-committee for infrastructure, and all donors active in the sector. The developmental goal is to support Government in reducing poverty through increased growth, largely in the agricultural sector and by improving access to social services and markets, particularly for rural areas. The program will seek to achieve this by: (a) reducing vehicle operating costs through maintenance, rehabilitation and reconstruction of the highest priority sections of the road network; and (b) ensuring the improvements are sustained by developing and implementing cost recovery policies, building and utilizing indigenous capacity in the public and private sectors, and improving financial management and control. Related Bank Loans/Credits are listed in Table 2. X. KEY LESSONS LEARNED 31. The project was successful because it was well prepared, met the needs of the sector, included provision for adequate design and supervision of the various components, and the Borrower mobilized the requisite implementation resources. Lack of cofinancing, and the slow provision of counterpart funds for road works and the railways caused delays. The project formed part of an overall rehabilitation program of the transport sector which is being continued under a follow-up projects.  9 32. Lessons for Future Projects in the Transport Sector. The following lessons, some of which could also apply to many other projects or have even become standard requirements on more recent projects, can be learned from the implementation of the Transport Rehabilitation Project: i. Counterpart funding arrangements need to be carefully made and followed up on; ii. Every effort should be made to complete arrangements for cofinancing before a lending operation is presented to the Board. iii. The project was innovative and is a good case of how to design a comprehensive program to assist weak institutions throughout the transport sector. iv. Frequent supervision visits by experienced staff contributed substantially to the successful execution of the project. v. The Borrower also contributed to the success of the project by placing competent personnel in charge of its ministries and departments. vi. The importance of low cost non-motorized transport to the rural poor was demonstrated by the project which assisted local NGO's in developing, manufacturing and demonstrating their usefulness to farmers, including women. vii. Careful planning resulted in the preparation and implementation of a series of related projects in the transport sector which stimulated the low cost movement of bulk minerals and agricultural crops. This key step greatly assisted Ghana's ERP.  10 Table 1: Summary of Assessments A. Achievement of objectives Substantial Partial Negligible Not applicable Macro policies i Li Li L Sector policies FLi 0 Li Financial objectives Li L Li L Institutional development Li Li Li Physical objectives Li rl L Li Poverty reduction Li Li Li L Gender issues C Li Li Li Other social objectives Ci EL Li Environmental objectives Li Li Li L Public sector management L L L [ Private sector management [ L C Li Other (specify) L Li L 0 B. Proiect sustainability Likelv Unlikely Uncertain I ,-' (\ ) 1 I Highly C. Bank performance satisfactory Satisfactory Deficient Identification Fi fl Preparation assistance i 0Li Appraisal EL