Algeria - Fifth Highway Project

 Fifth highway project Report No: ; Type: Report/Evaluation Memorandum ; Country: Algeria; Region: Middle East And North Africa; Sector: Highways; Major Sector: Transportation; ProjectID: P004900 Algeria: Fifth Highway Project (Loan 2808-AL) The Implementation Completion Report (ICR) on the Algeria Fifth Highway project (Loan 2808-AL, approved in FY87) was prepared by the Middle-East and North Africa Regional Office with no contribution from the Borrower. The Loan for US$120 million was approved on May 12, 1987, and closed on December 31, 1994, three years behind schedule. US$5.77 million was canceled as an unused balance. The project objectives were to: (a) reduce Algeria's road maintenance backlog; (b) help rationalize planning and supervision of civil works; (c) improve efficiency in road maintenance; (d) eliminate distortions in maintenance costs; (e) strengthen personnel management and training functions in the Ministries of Public Works (MPW) and Transport (MOT); and (f) improve policy formulation capability in MOT. The project components were: (a) civil works and associated consultancy services for a two year pavement strengthening program of primary roads and for a two-year pilot program of road maintenance, including an experiment for maintenance by contract; (b) technical assistance, training and research to: (i) improve data collection and use, (ii) develop technical specifications, standards and a quality assurance system for civil works, (iii) investigate the availability and use of natural materials, and (iv) train MPW and MOT personnel; (c) preparation of a national multi-modal transport plan, and feasibility studies for specific railroads and ports projects; and (d) procurement of equipment and supplies for technical assistance, training and vehicle inspection. The project's civil works targets were exceeded by over 200 percent -in part because of significant appreciation of the dollar against the dinar- but the objective of reducing the maintenance backlog was not met due to (i) prolonged implementation, during which the maintenance backlog grew more than the maintenance targets set for the original three- year implementation period, and (ii) a persistent shortage of counterpart funds. The achievement of the other objectives was mixed. Training of personnel was partially successful, especially in the Ministry of Public Works and the independent Public Works Technical Quality Control Agency (CTTP). Accomplishments in research programs, studies and technical assistance were limited because they started late and some of them were not carried out. Equipment procurement was substantially expanded to include equipment for road construction and maintenance. The rate of return for the civil works-ranging from 23 to 150 percent at appraisal-was not re-estimated in the ICR. The Operations Evaluation Department rates the project outcome as satisfactory (as in the ICR) in light of the substantial achievement of its physical objectives. However, institutional development is rated only as moderate (instead of substantial in the ICR) because capacity building and training programs did not reach the Ministry of Transportation, and important studies and research programs were not carried out. Sustainability is rated as uncertain (instead of likely in the ICR) because no cost recovery mechanism is in place and sustained counterpart funding is in doubt due to difficult macroeconomic circumstances. Bank performance is rated as satisfactory (as in the ICR). The most important lessons from this project are that project objectives must clearly relate to project components, and that institutional capacity for undertaking projects and studies must be assessed correctly. In this regard, the design of this project was too complex and disregarded past implementation experience in Algeria. Intensive Bank supervision contributed to keep the physical components on track, but not so in the case of the institutional and training components necessary for long term sustainability and development of local capacity. The ICR is satisfactory. However, it would have benefited from a re-estimated ERR, and also should have explained why past experience regarding institutional development, procurement and disbursement problems in Algeria were not taken into account in designing the project. No audit is planned.