Turkey - Road Improvement and Traffic Safety Project

Documentof The World Bank ReportNo.: 31520 PROJECT PERFORMANCE ASSESSMENT REPORT TURKEY ROAD IMPROVEMENT AND TRAFFIC SAFETY PROJECT (LOANS CPL-40480; SCL-4048A; SCL-40490) February 7,2005 Sector, Thematic,and Global Evaluation Group OperationsEvaluation Department  Currency Equivalents(annual averages) Currency Unit = Turkish Lira (TL) 1994 US$l.oo TL 14,000 1995 US$l-00 TL 39,000 1996 US$1.oo TL 50,000 1997 US$l.OO TL 75,000 1998 US$1.oo TL 108,000 1999 US$l.oo TL 206,000 2000 US$1.oo US$l.oo TL 315,000 2001 TL 540,000 2002 US$1.oo TL 670,000 2003 US$l.oo TL1,445,000 2004 US$l.oo TL1,510,000 Abbreviations and Acronyms CAS Country Assistance Strategy ERR economic rate o f return EU European Union ICR ImplementationCompletion Report KGM General Directorate o f Highways NRSP National Road Safety Program OED Operations Evaluation Department PPAR Project Performance Assessment Report PFPSAL Programmatic Financial and Public Sector Adjustment Loan I1 TTP TurkishTraffic Police Fiscal Year Government: January 1-December 31 Director-General, OperationsEvaluation : Mr.Gregory K.Ingram Director, Operations Evaluation Department : Mr.Ajay Chhibber Manager, Sector ,Thematic, and Global Evaluation Group : Mr.Alain Barbu Task Manager : Mr.PeterFreeman  i OED Mission: Enhancing development effectiveness through excellence and independence in evaluation. About this Report The Operations EvaluationDepartmentassesses the programsand activitiesof the World Bank for two purposes:first, to ensure the integrityof the Banks self-evaluation processand to verify that the Banks work is producingthe expected results,and second,to helpdevelop improveddirections, policies,and procedures through the disseminationof lessons drawn from experience.As part of this work, OED annually assesses about 25 percentof the Bank's lending operations. Inselectingoperations for assessment, preferenceis given to those that are innovative,large, or complex;those that are relevantto upcomingstudies or country evaluations;those for which ExecutiveDirectors or Bank management have requestedassessments;and those that are likely to generate important lessons. The projects,topics, and analytical approaches selectedfor assessmentsupport larger evaluation studies. A Project Performance Assessment Report (PPAR) is based on a review of the Implementation Completion Report (a self-evaluation by the responsible Bank department) and fieldwork conducted by OED. To prepare PPARs, OED staff examine project files and other documents, interview operational staff, and in most cases visit the borrowing country for onsite discussions with project staff and beneficiaries. The PPAR thereby seeks to validate and augment the information provided in the ICR, as well as examine issues of special interest to broader OED studies. Each PPAR is subject to a peer review process and OED management approval. Once cleared internally, the PPAR is reviewed by the responsible Bank department and amended as necessary. The completed PPAR is then sent to the borrower for review; the borrowers' comments are attached to the document that is sent to the Bank's Board of Executive Directors. After an assessment report has been sent to the Board, it is disclosed to the public. About the OED Rating System The time-tested evaluation methods used by OED are suited to the broad range of the World Bank's work. The methods offer both rigor and a necessary level of flexibility to adapt to lending instrument, project design, or sectoral approach. OED evaluators all apply the same basic method to arrive at their project ratings. Following is the definition and rating scale used for each evaluation criterion (more information is available on the OED website: http://worldbank.org/oedleta-mainpage.html). Relevance of Objectives: The extent to which the project's objectives are consistent with the country's current development priorities and with current Bank country and sectoral assistance strategies and corporate goals (expressed in Poverty Reduction Strategy Papers, CountryAssistance Strategies, Sector Strategy Papers, Operational Policies). Possible ratings: High, Substantial, Modest, Negligible. Efficacy: The extent to which the project's objectives were achieved, or expected to be achieved, taking into account their relative importance. Possible ratings: High, Substantial, Modest, Negligible. Efficiency: The extent to which the project achieved, or is expected to achieve, a return higher than the opportunity cost of capital and benefits at least cost compared to alternatives. Possible ratings: High, Substantial, Modest, Negligible. This rating is not generally applied to adjustment operations. Sostainabilify: The resilience to risk of net benefits flows over time. Possible ratings: Highly Likely, Likely, Unlikely, Highly Unlikely, Not Evaluable. lnstitutional Development Impact: The extent to which a project improves the ability of a country or region to make more efficient, equitable and sustainable use of its human, financial, and natural resources through: (a) better definition, stability, transparency, enforceability, and predictability of institutional arrangements andlor (b) better alignment of the mission and capacity of an organization with its mandate, which derives from these institutional arrangements. Institutional Development Impact includes both intended and unintended effects of a project. Possible ratings: High, Substantial, Modest, Negligible. Outcome: The extent to which the project's major relevant objectives were achieved, or are expected to be achieved, efficiently. Possible ratings: Highly Satisfactory, Satisfactory, Moderately Satisfactory, Moderately Unsatisfactory, Unsatisfactory, Highly Unsatisfactory. Bank Performance: The extent to which services provided by the Bank ensured quality at entry and supported implementation through appropriate supervision (including ensuring adequate transition arrangements for regular operation of the project). Possible ratings: Highly Satisfactory, Satisfactory, Unsatisfactory, Highly unsatisfactory. Borrower Performance: The extent to which the borrower assumed ownership and responsibility to ensure quality of preparation and implementation, and complied with covenants and agreements, towards the achievement of development objectives and sustainability. Possible ratings: Highly Satisfactory, Satisfactory, Unsatisfactory, Highly Unsatisfactory.   ... 111 Contents Principal Ratings ................................................................................................................ v Key Staff Responsible ........................................................................................................ v Preface .............................................................................................................................. .. vi1 Summary ........................................................................................................................... i x 1 Background . .................................................................................................................. 1 2 Objectives and Overview . . . ............................................................................................. 2 3 Preparation and Implementation . ............................................................................... 3 4. Ratings .......................................................................................................................... 5 5. Conclusions and Lessons ........................................................................................... 12 Annex A L i s t of Country Officials Consulted . .............................................................. 15 Annex B .Basic Data Sheet .............................................................................................. 16 Annex C .Borrower Comments ...................................................................................... 19 Box 1: Project Objectives and Components ................................................................... 2 Table 1 .Decreases in Traffic Accidents within 3 years. after Rehabilitation of the Black Spots improved in 1997 in the Road Improvement and Safety Project ....6 Figure 1 Effect o f Improvements to Black Spots (1996-2000) . ..................................... 7 This report was preparedby PeterFreeman.who assessedthe project inJuly 2004 The report was edited by William Hurlbut. andRomaynePereiraprovidedadministrativesupport . .   V PrincipalRatings ICR* ICR Review* PPAR "_^____ -- _l_l_____l _I "" ___^1111_1 1^_11--1~-___1__" - - - - 1 - ~ ^ 1 1 - _ _ " ~ Outcome Satisfactory Moderately Satisfactory Moderately Satisfactory Sustainability Likely Likely Likely Institutional Development Modest Modest Modest Impact Bank Performance Satisfactory Satisfactory Satisfactory Borrower Performance Satisfactory Unsatisfactory Satisfactory * The Implementation Completion Report (ICR) a self-evaluation by the responsibleoperational division of the Bank. IS The ICR Review is an intermediateOperations Evaluation Department (OED) productthat seeks to independentlyverify the findings of the ICR. Key Staff Responsible Project Task Manager/Leader Division Chief/ Country Director Sector Director Appraisal Mirtha Pokorny Ricardo Halperin Kenneth Lay Completion Mirtha Pokorny Eva Molnar Andrew Vorkink   vii Preface This is a ProjectPerformance Assessment Report (PPAR), onthe Road Improvement and Traflc Safety Project (Loans CPL-40480; SCL-4048A; SCL-40490). The original amount for US$250 millionequivalent was approved on June 20, 1996. At the request o f the Government o f Turkey US$150 milliono f this amount was later made available inDeutschmarks, which were later converted to Euros, hence additional loan agreements were concluded. The total project amount was estimated to be US$389.30 millionat appraisal. Taking into account the implicationso f the financial crisis inTurkey during2001/02, it was decided not to extend the project closure date ofMarch 31,2003, even though the project hadnot beenfully completed. At closure some US$202.32 million o fthe loans hadbeendisbursedand US$308.37 million o f the total project cost had beenexpended. US$20.25 million was cancelled, whilst a further US$27.43 million was accounted for by changes incurrency values during implementation. The project was selected for assessmentbecausethere was a difference of opinion between the implementing agency and the Bank on project implementation issues and to review the impact of the traffic safety component, which was both innovative and effective. It was considered likely that an assessment also would provide a major learning opportunity for others contemplating similar projects. The PPAR will further OED's overall knowledge base on road safety programs, as well as governance and institutional issues inthe transport sector. And finally, it will serve as an input into a forthcoming country assistance evaluation (CAE) o f Turkey. OED preparedthis report based on an examinationo f the relevant Staff Appraisal Report, ImplementationCompletionReport, legal agreements, project files and archives, as well as other relevant reports, memoranda, andworking papers. Discussions were also heldwitha number o f Bank staff. An OED missionvisited Turkey inJuly 2004, conducted site visits, and discussed both the project andthe effectiveness o f Bank assistance with government officials and stakeholders. Their kindassistance i s gratefully acknowledged. Following standard OED procedures, copies o f the draft PPAR were sent to government officials and agencies for their review and comments. Comments have been taken into account inthe text and are included as Annex C.   i x Summary Transport currently has a highpriority inTurkey, partly because o f the country's strategic positionbetweenEurope and Asia making it a major transit route, especially for freighttraffic, andpartly because good communications support economic development, includingtrade and tourism. However, the recent sustained growth inroad traffic, much o f it consisting o f heavy trucks, has proved costly, because Turkey's roadtraffic safety recordhas become a major cause for concern. With this inmind, the Bank agreed to support the Road Improvement and TrafJicSafety Project, reviewedinthis PPAR by OED. This project was designed to reduce roadtransport costs through improvements to state and provincial pavedhighways, improve traffic safety, and to a lesser extent, improve operational efficiency o f the Roads Directorate as well as to ensure that environmental factors were adequately addressed. An additional factor o f increasing importance to Turkey was its application for accession to the European Union. BecauseTurkey's road accident record i s considerably worse than the European average, it became a further reason for the government to try to improve the situation. The outcome ofthe project is rated moderately satisfactory. Although the traffic safety component was successful and a number o f important road improvementswere completed, the higher than expected costs, long delays, and the decisionnot to extend the closing date, leading to unfinishedconstruction andprocurement arrangements, counted against a fully satisfactory outcome. Institutionaldevelopment impact is rated as modest because o f continuing deficiencies inthe operational practices o f the General Directorate o f Highways (KGM), including calling for constructiontendersbased only on preliminary designs and implementingtoo many projects simultaneously due to poor prioritization, leadingto slow progress on individual projects. An ambitious Highway Information System was unfinishedat project closure. Sustainability onthe other handis regarded as likely becausethe KGMi s a mature organization with adequate maintenance budgets and proventechnical capability. The traffic safety component i s beingmonitored as part o f a National Traffic Safety Strategy. Its highprofile at the upper echelons o f government leave no doubt as to its continuity and assuredfunding. Bank and borrower performance are both rated satisfactory, but with some caveats. The greatest area o f contentionis the Bank's decisionto close the project without an extension o f time to complete unfinishedconstructionworks and procurement activities. This was based on the need, following the financial crisis in2000/2001, to reduce the number o fprojects inthe portfolio and the matter was subject to ajoint review with Treasury inOctober 2002. The equivalent ofUS$20.25 million(10 percent ofthe project cost) was cancelled, leaving the implementingagency with a number o f signed contracts, but no external funding source. The ramifications o f this decision are still being sorted out. On the other hand, the traffic safety component broke new ground and the implementingagency didwell to coordinate a complex initiative satisfactorilywith other government departments, agencies, and academia. The program to eliminate black spots  X (hazardous road locations) was particularly effective inlowering the accident rate inthe road sections that were improved. The implementingagency (KGM)for this project saw the Bank as a financial rather than a development partner. Real changes to address KGM's inefficiencies were only achieved as a result of Turkey's financial crisis, which helpedfocus the central authorities on the elimination of long-standing poor practices. This illustrates that improvements ininstitutional governance may at times be difficult to achieve through project-level interventions. Three important lessonsmay be drawn from this project: P Improvementsingovernance canbestbe achieved whenthere is aholistic program o f institutional reform mandated at the highestlevels o f government, withinteractivecommunicationwith operational staffto ensurethat the changes take place inthe field as envisioned. P TrafJic safetyprojects canbeparticularlysuccessful wherethere is strong government commitment and support and where a participatory approach is pursuedto ensure the support of all the diversestakeholders. The key to success is to show what can be done and to have the right information, monitoring and evaluation systems inplace so that a nationalprogram can be rolled out and its success measured. P The elimination of road accident black spots can beahighly cost effectiveway to reduce both the accident rate and the degree o f severity o f the accidents occurring. Gregory K.Ingram Director-General Operations Evaluation  1 1. Background 1.1 Turkey has a unique geopolitical position strategically located betweenEurope andthe MiddleEast, which makes the transport sector crucial not only for its own economic development but also for the development o f the region. The country has important east-west transport links, making it a major transit route especially for freight traffic. Recent developments with regard to the growing role o f Turkey intrade with Central Asia and the South Caucasus make the focus on transport even more important. 1.2 Overall transport demand has been growing for many years at an average annual rate o f eight percent, but railtraffic has lost a substantial market share to road, declining from 55 percent o f the marketin 1950 to only four percent now; slightly larger than the combined aidsea share o f three percent. Little newtraffic can be expected to be attracted back to rail without significant new investment.Roadtransport on the other handnow accounts for 93 percent o f freight transport, so appropriate road investment i s critical to the effective fimctioning o f the economy. 1.3 The growth inroadtraffic and the highproportionofheavy vehicles has contributedto a burgeoning road safety problem, with accident rates betweenthree and six times the EUaverage. About 7,000 fatalities occur annually on Turkey's road system and the losses because o f injuries and property damage are estimated to be inthe order of 2 percent of gross domestic product.' To putthis inperspective this means that every two years the death toll from road accidents i s equivalent to that inthe tragic Marmara earthquake o f 1999. 1.4 To achieve successful accession to the EU, Turkey would have to meet a number o f requirements.Inthe transport sector these would include that the Government separate social from commercial services (with special implicationsfor ports and railways) and that it become more responsive to market needs. This also means that the road agency, known as the General Directorate o f Highways (KGM), with an annual budget exceeding US$l billion, would have to progress to become a more commercial, accountable, and transparent organization to meet EUexpectations. 1.5 Against this background, the Road Improvement and Traffic Safety Project was designed to contribute to reducing roadtransport costs, systemically improving the approach to traffic safety, and helping KGMto improve its operations. This PPAR explores the impact and effectiveness o f the project as well as the consequences o f closingthe project before implementation was completed. The decisionnot to extend the closing date was made inthe context of the serious financial crisis that overtook the country in2001. As with all tough decisions, it also had some adverse consequences, which are examined inthis report. 1. Blomberg, Sven-Ake.RoadTraffic Safety inthe Europe and Central Asia Region. World Bank ,Europe and CentralAsia Region, WorkingPaper, No 1. Washington DC, March, 1999.  2 2. Objectives and Overview 2.1 The objectives and components ofthe project are shown inBox 1. Box 1: ProjectObjectives and Components Objectives 0 The reduction o f road transport costs through infrastructure improvements and the protection o f,past investments in the highway sector through rehabilitation and strengthening o f paved highways; 0 The improvement oftraffic safety instate and provincial roads; 0 The improvement of the operational efficiency of KGM through the implementation of management systems and computerization; and, 0 Improvement inthe consideration of environmental factors in project selection and design. Components 0 The Road Improvement Program, comprising the strengthening or upgrading o f about 600 kilometers o f high-priority state roads, and about 300 kilometers o f roads and town passages. (US$304.6 million; 78.2 percent o f project cost) 0 The Traffic Safety Program (US$78.9million; 20.3 percent o f project cost), which included: - Civil works for the improvements o f road sections identifiedas accident black spots; - Provision o f road safety materials for improved traffic management for installation by the KGM; - Provision o f equipment for the Turkish Traffic Police (TTP) for the enforcement of traffic regulations in a pilot network; - Medical equipment to improve the emergency response o f the University Hospital at Gazi University; - Educational equipment and literature for carrying out road safety campaigns inselected -schools; Extension o f TTP's accident database to other users through the creation o f an -Accident Data Bank; and Technical assistance and training for the agencies involved intraffic safety covering the design, implementation, monitoring, and evaluation o fthe pilot and national programs. The Institutional Development Program, consisting o f the introduction o f various management systems and computerization throughout KGM and training o f KGM staff inthe areas o f environmental analysis, road planning, construction and maintenance. (US$5.8 million; 1.5 percent o f project cost) 2.2 On September 28, 1999, an amendment to the objectives was approved by Bank management to cover some o f the repairs for the damage to federal roads resultingfrom the Marmaraearthquake. However, KGMdecided that the urgencyofthe needto restore former levels o f road serviceability was such that it would finance the necessary works from domestic resources, usingaccelerated localprocurement methods that would not have conformedwith the Bank's procurement guidelines. One year later, on September 27,2000, a further amendment restoredthe original objectives o f the project unchanged.  3 2.3 The road improvements comprised the rehabilitation o f important sections o f state roads carrying highvolumes of truck traffic and selected sections o f the provincial road network including town passages, the latter being prioritized on the basis o f a multi- criteria analysis that included social factors such as all-weather access, social integration, and improvedmarket access. The envisaged upgradingwas expected to contribute directly to the alleviation o f poverty inthe areas served. 2.4 The Government ofTurkey identifiedroad accidents as one ofthe more serious problems facing the nation. The fatality and injury rates were extremely high compared to the average figures for boththe EUand central and easternEurope and concern was expressed that with road traffic growing at nearly 8 percent annually a Road Traffic Safety Action Planwas necessary.A Traffic Safety Task Force was consequently established to coordinate traffic safety work and oversee the implementation o f the proposed Bank-financedTraffic Safety project. 3. Preparationand Implementation 3.1 There was no Quality at Entryassessment ofthe project by the Bank's Quality Assurance Group, but project preparation on balance was satisfactory. Although the degree o f planningandpreparation for the upgrading o f state roads was inadequate and resultedininitial plans for modest upgradingto be changed insome cases to major works involving four-lane highways, the ambitious traffic safety programwas especially well conceived. Preparationtook account o fthe Bank's safeguard policies and made efforts to limit cost overruns that hadbeenendemic inpreviousprojects. The objectives ofthe project were consistent with the objectives o f both the Country Assistance Strategy (CAS) and government priorities. The CAS stressedthe importance o f infrastructure development, while the Government o f Turkey emphasized the need to ease transport bottlenecks and especially the needto reverse the poor road safety record, which had become a concern to the general public and was a potential threat to the important Turkishtourist industry.Project designwas focused largely onthe traffic safety component with relatively limitedinstitutional strengtheningobjectives for KGM. 3.2 InpreviousBank-fundedroadprojectsinTurkey cost overruns were commonplace. Moreover, the implementingagency (KGM) managed project implementation schedules through rationing the amount o f counterpart financing made available. This meant that projects took much longer to implement than they should. The Bank was concerned about the very poor allocation efficiency o f this practice and had frequent discussions with KGMon the issue, advising that it didnot want to participate in an excessive number o f projects due to such poor prioritizationprocedures and refusing to include additional new works under the loan. Any cost increases were to be limitedto less than 15 percent over the original contract cost and the Bank insisted upon seeing the final designs before bidding. Because the bidding was often based on preliminary (and sometimes obsolete) designs, financial provisions were often inadequate to meet the project objectives and the whole process put upward pressure on project costs. KGM included too many projects inits program (almost certainly due to political pressures that encouraged it to report that the projects inquestion were inimplementation). This  4 resultedinincreased contractor costs, since equipment couldnot beusedefficiently, while materials hadto be purchased insmaller quantities and sometimes heldinstorage. Road deterioration duringlengthy implementationperiods also pushedup costs. 3.3 The Bank's stipulationthat cost increasesbe keptunder 15 percent o f the original contract cost was ineffectual because KGM simply financed higher cost increases above the Bank's limit from its own resources. Price increaseson nineBank-financedcontracts for the upgradingo f state roads inthis project ledto final contract costs that averaged 71 percent higherthan the bidprices based on preliminary designs. While it i s standard practice to use unit prices to make minor adjustments, inthese cases the adjustments sometimes included the addition o f bridgesand service roads. This custom had persisted through the previous four Bank-supported roadprojects inTurkey and the agency's operating procedures were firmly entrenched, notwithstandingdialogue with the Bank on such matters. Bank-financedprojects represented a very small percentage (less than 1 percent) o f KGM's annual budget and KGMhadpreviously beennoted as perceivingthe Bankmore as a source of fundingthanapartner indevelopment. 3.4 This situationwas finally addressednot through the project, but by the Prime Ministryunderthe Programmatic FinancialandPublic Sector Adjustment Loan I1 (PFPSAL), which was introduced after the national financial crisis o f 1999,resulting during2001 and 2002 ina reductioninthe size ofthe portfolio of approved projects and the introductionof a requirementthat any new foreign-funded projectswould have to be basedon a final designaudited by independentexperts. This also had the effect of reducingthe implementationtime o fprojects. Furthermore, the systematic audit o f proposed roadprojects was incorporated into the Guidelines for Preparation o f the 2003 InvestmentProgram,2alongwith a requirementthat environmental impact assessments needto beundertaken. The stipulations for foreign-fundedprojects have now (at least in theory) also been extended to all new projects. 3.5 With regardto the RoadTraffic Safety Program, the Bankinitially hadprotracted discussions with KGMover the wisdom of appointing an international consultant with an integrated multi-disciplinary view. KGMwas reluctant to do this as they believed this would not add sufficient tangible value to the program. They had a history inprevious projects o f failing to implement components involving foreign consultants. The Bank, for its part, wished to avoid a bias toward solutions requiringexpensive civil works. It was therefore a credit to the Bank task team andto KGMthat they successfully negotiated the appointment o f an appropriate internationalconsultant with strong safeguards to ensure a balance between both views. The Bank also committedto finance the early stages involving black spot (hazardous road accident location) improvements o fthe newly drawn upNational Road Safety Program (NRSP). Itwas also initially agreed that a pilot project would be developed with the help of the consultants to incorporate state-of-the-art worldwide knowledge and methods o f road safety. However, because o f great political pressure to make urgent progress with black spot elimination, which had become a major public issue, thepilot scheme was dropped and the consultants assisted inthe implementationo f the entire safety program. This outcome, though probably second best, 2. Prime MinistryCircular No. 2002/4  5 was a satisfactory and pragmatic solution because there was a highdegree o f ownership by the borrower at all levels and appreciation for the Bank's support ofthe NRSP. 3.6 Bank supervision was coordinated by the same project leader throughout the six years o f project implementation. This person ensuredthat the procurement standards were tightened up and fully complied with Bankprocedures, bringingrequirementsthat KGMwas unusedto. This was not welcomed by KGMand ledto a perceptionof bureaucratic delays by the Bank.While it is clear that insome cases the Bank was tardy inreactingto arequest for "no objection," onmost occasions investigated bythe assessment mission, the borrower contributed substantially to the delays by not responding ina timely manner with the submission to the Bank of informationneededto make the approval inquestion. The Bank's decisionnot to extendthe project beyond the closing date also caused resentment as a number of project components were left unfinished; some US$20.25 millionof loanfunds were cancelled. The Bank basedthis resolution on the extent o f the incremental gains anticipated through the extension measured against the need, agreedwith the Treasury, to substantially reduce the number and duration o fprojects inthe overall portfolio inlight o f the serious financial crisis gripping the country. 4. Ratings Relevance 4.1 Projectrelevance i s rated highbasedon the close alignment with the country's development priorities. The importance to general economic development, including trade and tourism, o f efficient highway connections is crucial and the needto tackle the roadtraffic safety problemi s a very high priority for the government, reflecting concern from the general public at Turkey's extremely poor road accident record. Improved access to, from, and through small rural towns aimed at alleviatingpoverty i s also inline with boththe CAS and government policy. The lesser objectives on the environment and improving the institutional strengtho f KGMare also fully inaccord with overall priorities. The project i s also inline with the overview o f the transport sector produced by the Bank's residentmission. Efficacy 4.2 The efficacy o f the project i s rated substantial,but with qualifications inthe context o fthe original objectives. The objective framed for the road component consisted of a mainroadportion o f about 600 kilometers and a rural roadportion o f about 300 kilometers. Inthe event, some 356 kilometers intwo-lune equivalents o f mainroad were successfully rehabilitated including the important sections for Ankara-Kirikkale, U9ak- Kula, and Ankara-Polatli-Sivrihisar. Although some works were not completed due to the earlier than expected project closure included sections o fthe Delice-Sungurlu-Corum road, only ninepercent o f KGM's share of the loan allocationwas unexpended when the project closed. Urgently neededmachinery, equipment, and spare parts to supplement  6 KGM's existingequipment inventory were successfully procured, but development o fthe proposed Highway Information Systemsuffereda serious setback. However, the environmental objective was fully achieved, because KGMestablished a fully staffed EnvironmentalDirectorate which carried out its duties ina satisfactory manner. All environmental matters inthe project were handledappropriately. Measurement o f the KGMoperational efficiency objective was limitedto howmany staffwere trained(50 against a target o f 20). 4.3 Rural road improvements under the project were to have been 100percent financed by KGM, but due to changing priorities, including greater focus on black spots, only 5 percent o f the amount agreed at appraisal o f US$23.17 millionwas formally set aside by KGM. Constructiono f town passageswas much less affected and 141 small works were successfully completed with a large impact ontraffic safety. Overall, it i s concluded that useful savings were made inroadtransport costs, but not to the full extent originally envisaged. 4.4 The equipment purchases and consultancy services underthe traffic safety component were mostly completed. By project closure 317 accident black spots were upgraded under 210 small contracts, usingboth loan and local funds, leaving only 87 still to be attendedto. Some safety-related materials and services were not purchased and the production of an educational video hadto be cancelled. Regarding traffic law enforcement services, a state-of-the-art Traffic InformationCenter i s now fully operational and appropriate training inmodern enforcement methods has been carried out, 4,000 global positioning devices and 234 laptop computers have beenfitted into existingpatrol cars, 744 computers and 356 printershave beenprocuredfor traffic enforcement agencies, but 121new fully equippedtraffic patrol cars could not be procured intime before project closure. 4.5 The extent ofthe improvements intraffic safety, despite the partial completiono f the safety component ofthe project, were substantial. KGMevaluated a sample of 152 road accident black spots at hazardous road sections and recorded that 143 (94 percent) o f these improvements were successful inpractice. Monitoring o f these hazardous locations showed that accidents fell by 74 percent and fatalities by a remarkable 94 percent. Table 1 and Figure 1 below show the dramatic impact o f the black spot improvement program on a sample of sites monitored by Gazi University. Incomparison with similar investmentsinternationallythis investmentis considered a cost effective way of achieving the desired outcome. Table 1.Decreases in Traffic Accidents 1996-2000 79 Black Spot Improvement Number of Number of Number of Number of Projects Years Accidents Deaths Injuries Damaged Vehicles Before Rehabilitation 1996 3635 270 2905 5585 During Rehabilitation 1998 1156 45 742 1949 After Rehabilitation (yrl) 1999 1012 40 643 1718 After Rehabilitation (yr 2) 2000 921 28 554 1613 Source: Gazi University  7 Figure 1.Effect of Improvements to Black Spots (1996-2000) 6,000 5,000 4,000 3,000 2,000 1,000 0 Number of Number of Deaths Number of Numberof Accidents Injuries Property DamagedVehicles I H1996 E3 1998 1999 Source: Gazi University 4.6 The Gazi Universitypilot project at three hospitals demonstrated that emergency response services could substantially improve the time taken to get accident victims to hospital, with better treatment at the scene by paramedic^.^ While it i s still too early to say with conviction that the national road accident picture i s showing a sustained improvement, it has beenreported that there i s a leveling off inthe number o f reported accidents and a decline infatal injury accident^,^ but this could be due to a number o f factors. According to Aydin6the NTSP i s to be applied countrywide between2002 and 2012, with the first detailed interim evaluation o f results scheduled for 2006. The project was accorded a highprofile and the Turkish Parliament had a special session to debate the matter inwhich the Bank Country Director was invitedto participate. Itnoteworthy that the project succeeded inimproving road safety education by upgrading school curricula content. A study tour to Finlandwas also organized for a group o f educators who were introducedto the latest concepts inadult traffic education and guidelines for target groups such as elderly drivers. Efficiency 4.7 The efficiency o fthe project is rated modest. Bank staffwere, for example, unsuccessful inpersuading KGMto alter its long-standing practice o f awarding contracts for which an inadequate amount o f counterpart funding was available and didnot manage 4. GaziUniversityEmergencyandPilotProjectReport,Ankara, 2003. 5. NationalTraffic Safety Programfor Turkey, Executive Summary, Sweroad, December2001. 6. Aydin Cumhur. Turkey's Traffic Safety Project andthe NationalTraffic SafetyProgram.Dept of Civil Engineering,Atlim University, 1O* Conferenceon Transport Research,Istanbul,Turkey, 2004.  8 to change the custom of basing costing on preliminary designestimates. These inefficiencies ledto the project falling short o f its objectives, taking longer to implement than planned. Higher than anticipated construction costs and lower thanexpected traffic volumes following the economic crisis o f 2001 reduced the ERRfrom 25.6 percent (expected) to a still acceptable, but disappointing, 16.4 percent (act~al).~ Inthe view of the assessmentmissionthe revisedassumptions were realistic. 4.8 The traffic safety component was reasonably efficient inmeetingits intended objectives consideringthat not all items could be financed by project closure. Cooperationbetweenthe various agencies was also fairly well coordinated by KGM, giventhat there hadbeenlittle precedent for this kindof collaborationbefore. However, there were nevertheless some disjunctions causedby the non availability of key team members(Gazi University), difficulties with synchronizingbudgetarysystemsand problems inensuring proper documentation was submitted on time. The latter ledto the failure to procure traffic patrol cars before project closure. Outcome 4.9 Overall, the outcome o f the project i s rated moderatelysatisfactory. Although the traffic safety component was evidentlysuccessful and a numberofimportantroad improvementswere completed, the higher than expected costs, long delays and the decisionnot to extend the closing date, leadingto unfinishedconstruction and procurement arrangements, counted against a fully satisfactory outcome. InstitutionalDevelopmentImpact 4.10 Institutional development impact i s rated modest. The institutional development impact o f the project was disappointing inseveral respects. While KGMhad a record as a competent organization, there were a number o f ways inwhich its operations could have been improved and its efficiency level raised (see Chapter 3). KGM's method of contracting for major works remained defective, despite the discussions with the project team, until interventions by the Prime Ministry forced a review, following the financial crisis o f 2001. 4.11 The institutionaldevelopment component, as appraised, was relatively modest in scope and focused on finalizing designwork and the implementation o f a simple Pavement Management System.Duringproject implementation KGMdecided to expand the scope ofthe component andinclude a comprehensive Highway InformationSystem. Although KGMstaff made substantial efforts to designthe system, which required coordination with the TurkishMapping Agency (under the Army) with both the Police and its own informationsystems, the task provedto be considerably more difficult than expected and the Bank agreedto finance two experts from the U.S.Federal Highway Administration to provide specialized assistance. The consultants helpedto disaggregate the component into manageable modules, but progress continuedto be slow. Following 3. Feasibility Studies ofRoadImprovementandTraffic Safety Projects (Loans 4048/9-TU), General DirectorateofHighwaysPlanningDivision, June 2003.  9 the decision not to extendthe closingdate oftheproject, implementationwas left to be fundedfrom KGM's ownresources, butthe assessmentmissionconfirmed that the process had beenstopped at least for the short to mediumterm as KGMnow has different priorities. It must be concluded that since the project was in implementation for six and a halfyears there was little real commitment to finalize the work, which is unfortunate becausethe information yielded from such a systemcould have helpedto further modernize the organization. 4.12 On the more positive side, some 56 memberso f KGM's staff were trained in 10 areas o f expertise ranging from environment and designto contract administration and materials technology at a cost o f US$l.3 million. KGMalso deserves credit for its role in coordinatinga number o f different government departments as well as university staff, unusedto working together as ateam. Ittook the lead inthe task force for road safety and supported the other executing agencies inthe areas o f procurement and financial management. The result o f the participatory approach was that each organization brought its own perspective to the traffic safety problem and there was strong "buy-in" and ownership o fthe strategy that evolved. 4.13 The road safety team approach successfully provided a model for future cooperation, but was not without problems. Inparticular the harmonization o f financial arrangements, departmental bureaucratic problems, and lack o f continuity o f staffposed some serious difficulties that contributed, for example, to the under-spending o f the emergency aid pilot project and the failure to make a timely purchase o f the specified traffic patrol cars. Sustainability 4.14 Sustainability i s ratedlikely. KGM is a mature organization with a good technical record and an annual budget exceeding US$1 billion. Turkey places a highvalue on the effectiveness o f its road system and relatively largebudgetsare made available to sustain and upgrade the network. The recent moves by the Prime Ministryto ensure greater efficiency inresource allocation will strengthenthis position. For example, KGMhas continued to streamline its workforce through a plannedreduction o f direct-hire staff, which declined from 35,100 in 1994 to 24,000 today. The decision to call for bids in futureto bebasedon fullrather than onpreliminarydesigns andthe reductioninthe size o f the project portfolio to be managed are significant steps forward. 4.15 The traffic safety initiative has beenstrengthenedby the government through the NTSP since the project closed and i s to be monitored at the highest level over the next 10 years. Because it is important to the general public andto Turkey's bidfor EUaccession, ithasahighpoliticalpriority andthere is no doubt as to its continuity and assured funding. Bank Performance 4.16 Bankperformance is ratedsatisfactory, butwith somereservations. Identification, preparation, and appraisal were all performed adequately and the intention to move the Bank-KGM dialogue to a new level o f cooperation was well-intentioned.  10 Withregard to the roadcomponents this new level of understandingwas not achieved, however, and the Borrower was resistant to the perceived (though clearlyjustified) tighteningof Bank procedures. Onthe other hand, progress incooperation was made in the traffic safety component anddifferences were resolved inaproactiveway. Bank supervision was generally sound, but there i s no doubt that both the Bank and Borrower contributedto the delays at important decision points during implementation. The Bank could have moved with more urgency on some occasions to speed up its responsesto the "no objection" requests. This matter was also raised by the Under-secretariat o f the Treasury and the Bank has inthe meantime taken steps to streamline its procurement a~tivities.~ 4.17 Bank's decision to close theproject without anextension oftime to complete unfinishedconstruction works andprocurement activities was obviously taken badly by KGMandthe Traffic Safety CoordinationUnitas they hadentered into anumber of contracts on the assumption that the financing stream would continue, despite warnings to the contrary. However, this difficult decision was a direct result o f the financial crisis in2000/2001, which ledto areductioninthe numberofprojects inthe portfolio a - resolutionthat emanated from ajoint review by the Bank and Treasury inOctober 2002. The decision was made taking into account the expected incrementalgains that would be achieved during a further implementationperiod, set against the urgent need to downscale the portfolio size andto impress uponthe government the gravity o f KGM's costly practices. 4.18 Although the Treasury officials did subsequently request an extension o fthe loan byninemonths, this was turneddownby the Bank inJanuary 2003 onthe grounds that the overall benefits continuedto outweighthe costs o f closure before project completion as only ten per cent o f the loanhadnot been disbursed. Inaddition, KGMdid have other resources and would be able to complete the project albeit over a longer time-span. As far as the construction works were concerned, however, it was realizedthat little further progress would be possible betweenthe decisiondate and the date o f closure (March 31 2003) because constructionwork inthe interior o f Turkey i s suspendedduringthe harsh winter season (December through March). The items outstanding at project closure were : Some highway sections were not completed. This mainly affected the Delice- Sungurlu-Corum contracts that had already beenawarded. Whenthe assessment mission inspected the contract some 16months after loan closure, work was nevertheless inprogress using own funds, but at a much slower rate than before. Thermoplasticpaint road markings and weighing scales which were financed from the local budget. Magnetic resonance equipment and traflc safety videos contracts which were cancelled, while purchases o f various road safety materials and roadside delineators were not carried out. Work on the Highway Information System (including a traffic safety data bank) was stopped. 7. Procurementinthe World Bank, FY03 Annual Report, Operations Policy and Country Services. April. 2004.  11 0 121traflc patrol vehicles were not procuredunder the project. 0 A number ofblack spots and townpassage improvements were deferred. 4.19 Inaddition ameasureofirritationandfrustrationwas generatedwhich set back the improving relationship betweenKGMandthe Bank.The prospect of furtherprogress inimproving the efficiency ofKGM's operations throughmakingthe Highway Information Systemoperational also sharply receded. However, there was no certainty that had the loan continued for a further ninemonths this particular assignment would have been completed either within the budgetor the timeframe. 4.20 Insummary, Turkey was inthemidstofavery serious macro economic and financial crisis. Inline with the latest government policy directive, the loanportfolio was reduced in size. Since the objectives o f this project had by this time largely, though not entirely, been achieved, with 90 percent o f the loan disbursed, and since there was a reasonable probability that KGMwould be able to complete the project using its own resources over time, the decision to close the project without an extension o f time was rational, even ifpainful. Borrower Performance 4.21 Borrower performance i s also rated satisfactory, but with certain caveats. The implementingagency, KGM, is a substantial and technically competent organization. This was a large project involving loans to the value ofUS$250 million. At closure, some US$202.32 millionhad been disbursed, while US$20.25 million equivalent (10 percent) was cancelled. The remaining shortfall o f US$27.43 millionresultedfrom changes in currency values duringimplementation. Fromthe Borrower's side there was also a shortfall incounterpart funds. Inthis case, some funds were diverted to other priorities (especially from rural roads), but there was also a significant impact from currency fluctuations. Overall, however, most o f the project was accomplished, and given another ninemonthsitmayhave beenvirtually completed. Itis clear that the refusalto extendthe loan periodwas unexpected to KGM (although this had beencommunicated on several occasions), as it was a departure from their previous experience with the Bank. 4.22 The Borrower's mainproblem areas were tardiness insubmitting informationto the Bank on time, some internal inefficiencies, and the relatively new experience for many o fthe parties concerned, to work ina complex interdepartmental team environment. There was also an attitude, certainly with regard to the road component, that the loanwas akinto a commercial source o f funds and that KGM's internalpractices were outside o fthe Bank's purview.Inother words, there was little development partnershipunderstanding. 4.23 On the other hand, the traffic safety component broke new ground inTurkey and the Borrower andthe Bank worked muchbetter together. KGMdid well to coordinate satisfactorily with other government departments and agencies, and with academia. The performance o fthese partners varied, but was satisfactory on the whole; they also took good advantage o f the presence o f the international consultants especially inlearning and applyingthe latest knowledge regardingthe designo f improvements for the elimination o f black spots.  12 5. Conclusions and Lessons The Governance Issue 5.1 Achieving a satisfactory and genuine development partner relationship i s a major challenge, especially at the operational level. This i s the classic case where the implementing agency exhibitedrent-seekingbehavior and saw the Bank as a commercial rather than a development partner. Real change to address KGM's inefficiencies came about only after matters were brought to a head by a financial crisis, which helped focus the Treasury andPrime Ministryonthe eliminationofpoor practices that hadbecome accepted over the years. It illustrates that improvements ingovernance cannot always be achieved at project level and often requires a holistic approach. Today, the Bank gives greater prominence to poor governance issues andthese are increasinglybeingtackled through institutionalreformprojects that do not go forward unless backed by political will. The Request for a Loan Extension 5.2 Itwas a difficult decision to denythe loanextension and it is understandable that this call hadto bemade urgentlyduringa financial crisis. The decisionto reduce the size of the loan portfolio was jointly taken betweenthe Bank andthe Treasury and a clear message was also signaled that the problems and poor practices encountered at the operational level had to be eliminated. One could question whether the matter hadto be addressed insuch a radical way, since it created muchbitterness with KGMand its partners, but clearly a strong stance i s sometimes necessaryto bring about change and decisions o f this nature are always ajudgment call. The Traffic Safety Component 5.3 This component had some interestingfeatures. Iti s unusual for a road safety projectto have such a high level o fpolitical support and, even though the project was not completed as designed, it did achieve a great deal. The task team and the implementing agency showed great flexibility intailoring itto the NTSP andto ensuring there was strong local ownership. While the approach followed may not have been ideal intheory, the fact that aparticipatory opportunity existedfor all stakeholders to contribute ideas, more than compensated for this. It should also be mentionedthat KGMshowed strong leadership inensuringthat the diverse traffic safety team worked together successfully. The learningfrom this project could beuseful inother roadtraffic safety initiatives elsewhere and inparticular it is noted that very significant benefits can be derived from low-cost black spot improvements. 5.4 The following lessonsmay be drawn from the experience ofthis project: P Improvements ingovernance can best be achievedwhenthere is a holistic program o f institutional reform mandated at the highest levels o f government, with interactive communication with operational staffto ensure that the changes take place inthe field as envisioned.  13 > Trafic safety projects can be particularly successful where there i s strong government commitment and support and where a participatory approach i s pursuedto ensurethe support of all the diverse stakeholders. The key to successi s to show what can be done and to have the right information, monitoring and evaluation systems inplace so that a nationalprogram can be rolled out and its success measured. & The elimination of road accident black spots can be a highly cost effective way to reduce both the accident rate and the degree o f severity o f the accidents occurring.   15 Annex A. List of Country Officials Consulted Prime Ministry: Under-secretariat of Treasury Nurse1Durucakoglu Division Chief Ozgur Pehlivan Head o f Department Osman Gundopdu Associate KGM: GeneralDirectorateof Highways Ismail Tumay DeputyDirector General Yasar Yilmaz Director, External Loans CoordinationDiv. Hansan Piskin Director & Deputy Head of Construction Mircahit Arman Director, Planning Div. Yusuf Koger Director MustafaKizilkaya Director, Road Project Mustafa Karademir Head o f Survey & DesignDept. Ahmet Bulut Head o f Maintenance Dept. Ayse Kurt DeputyDirector, External Loans Coordination Div. ElifSoykan Economist, PlanningDiv. Ministry of NationalEducation,RoadSafety Program Yuksel Polat Director, Road Safety Program Osman Yildirim Section Manager KerimInal Specialist, Road Safety Gazi University,Ankara ProfDr Mehmet Ali Bumin Head o f Research & Prevention Inst. on Accidents EGM: GeneralDirectorateof Security Ali Bilkay Head o f Traffic Research Center Yilmaz Bostrip Specialist, Traffic Research World Bank, Ankara ElifYonca Yukseker Administrative Support Atilim University, Incek-Ankara Conference on Transport Research, Istanbul). Dr.Cumhur Aydin (Paper presentedat the lofhWorldAssistant Professor, Dept.o f Civil Engineering  16 Annex B. Basic Data Sheet ROAD IMPROVEMENT & TRAFFICSAFETYPROJECT Key Project Data (amounts in US$million) Appraisal Actual or estimate current estimate Total project costs 389.30 308.37 Loan amount 250.20 250.20 Cofinancing N/A N/A Cancellation N/A 20.25 Economic rate of return (YO) 25.6 16.4 Original Actual Appraisal Mission 06/21/1995 06121/I991 Board approval 06/20/1996 06/20/1996 Effectiveness 09/23/1996 10110/1996 Closing date 03/31/2003 03/31/2003 Staff Inmts Actual/Latest Estimate No. staff weeks US$POOOJ IdentificationlPreparation N/A 104 Appraisal/Negotiation N/A 232 Supervision N/A 744 ICR N/A 20 Total N/A 1100  17 Mission Data Date No. of Specializations represented Performance rating (month/year) persons Rating trend Identification/ Preparation 07111/1994 3 TM, HE, Tr. Economist 11/07/1994 3 TM, HE, Tr. Economist 02/13/1995 4 TM, HE,Tr. Economist, RSE AppraisallNegotiation 06/21/1995 5 TM, HE, FS, Env. Consultant 03/25/1996 6 TM, HE, FS, Env. PS, Disbursement Specialist Supervision 09/21/1996 1 TM HS S 04117/1997 2 TM: PS S S 10115/1997 3 2 HE;TL S S 05/12/1998 1 TM S S 04/01/1999 2 TL; HE S S 07/15/1999 1 ProgramTL S S 11/05/1999 2 Program TL; TS S S 06/31/2000 3 ProgramTL; TS; Senior PS S S 12/01/2000 2 Senior TS; ProgramTL S S 03/02/2001 1 Program TL S S 10119/2001 2 Senior TS; ProgramTL S S 05/04/2002 2 Senior TS; ProgramTL S S 10/22/2002 2 Senior TS; ProgramTL S S ICR 06/05/2003 2 Senior TS; ProgramTL S S Abbreviations: TL = Team Leader, T M = Task Manager, TS = Transport Specialist,PS = ProcurementSpecialist, RSE= Road Safety Engineer, HE = Highway Engineer,Env = Environmentalist, FS=FinanceSpecialist,TE= Transport Economist   19 Annex C.Borrower Comments HEt'UBLIC OF TURKEY PRIME MINISTRY The Undersecretariat of Treasury 26,11.04* 72482 Ref: B 02 1 !-tM O.DEI.01 03.192 Ankara, November 25,2004 i 1 DE3r Mr. Vorkink, RE Raad Improvement and Traffjc Safety Project (Loan No. 4048A) With reference to the Bank's letter of October 28, 2004 regarding the draft Project Performance Assessment Report for the above' mentioned project, please find attached herewith the Borrower's comments on.the draft PPAR provided by Ministry of National Educationand KGM. Besi regards, Head of Department Enci Cc. Ms. &!ark Helene Bricknel, Country Manager hlr. Peter Freeman Task Manager and Lead EvaluationOfficer, OED  20 VIEWS OF MINISTRY OF PUBLICWORKS AND SETTLEMENT GENERAL DIRECTORATE OF HIGHWAYSTO BE PUBLISHED IN THE "Annex C, Borrower Comments" OF THE PPAR We believe that PPAR. should reflect only the truth, without hiding the realities or diminishing the importance of the facts, if PPAR is intended to be useful for all sides. The following two comments A and B have been given, just to serve the purpose of our Bank. wishing to evaluate the general effectiveness of the Bank's actions and to develop improved directions, policies, and procedures through the dissemination of lessons drawn from experience. A) The ICR forwarded to the Bank, explained the most important reasons of delay in completion of the Project in the pages 1-4 of this Report. Our views are as follows. Bank's authorized person and staff relatingto this loan agreement, couldn't be very helpful, as they didn't know what their duties and positionswould be, during the Bank's reorganization. After completion of the Bank's reorganization, receipt of the Bank's no objection. became very difficult and took incredible long durations as; a) due to reduction in the number of experienced Bank's staff and b) due to very high increase in the number of projects, loans, and countries to be taken care by the same Bank's staff. (according to what the Bank's related ProgramTeam staff say) c) they couldn't give necessary attention and importance to this Project it deserves As an example; Bank's no objection for feasibility studies of Black Spot works (though their solutions, estimated costs, environmental reports, feasibility studies and other tables have been prepared and checked by the KGM and the Consultant firm) could be obtained after numerous correspondence by the Bank and after 64 days and 109 days passed. In the same way. the Bank's no objection for the Traffic Police Training Program (proposed with the letter of General Directorate of Security dated 19.12.2001) could be obtained with the fax of 21 October 2002 after 10 months passed (302 days). Similar delays occurred in the receipt of the Bank's no objection, for the works of the Ministry of National Education and Gazi University  21 In order to have a rough idea about how the World Bank managed this Loan (from the beginning of the Loan upto the end) one can consider the duration past between the dates of our Treasury's application which is November 18, 2002 to the Bank (for extension of closing date of the loan to 31.12.2003) and the Bank's reply date which is 21.Jan.2003. Bank's Official written message informing the Borrower that the closing date of the Loan would not be extended has been forwarded after 63 days from the date of Treasury's letter and only 70 days before the closing date of the Loan. There was no time to take necessary precautions (making changes in the investment program, providing local funds, warning contractors etc.) for the ongoing contracts, bids, contractswhose tenders had been received.(Please see Clause Ill). The Bank has given its consent (no objection) for a contract whose completion duration was 36 months, on 19 June 2002, just 7 months before the fax refusing to extendthe completiondate of the Loan by 9 months. THE FOLLOWING PARAGRAPH HAS BEEN TAKEN FROM A BANK'S REPORT JJPPR) During the Joint Meeting Pealized among the officials of Undersecretariat of Treasury, World Bank and the Implementing Agencies manv proiect manaqers voiced their frustration with delavs in obtaininq the World Bank's response on procurement matters. Thev pointed out that it was difficult to Dlan ahead without knowina bv when a response on a particular procurement matter can be expected bv the Bank. It is therefore recommended that all World Bank TTLS acknowledqe, receipt of procurement documents within 3 davs of receipt and provide an indication bv when the Bank's response can be expected." This rule hasn't been applied in our RlSP Project. As a result of this, we have received the messages saying "We haven't received the documents" or "Some documents are missing" after 3, 4, 5 months and upon our 3-4 reminding and warning faxes to the Bank to receive reply, while we are expecting to receive Bank's messages for "Consent of Bank" or "No objection messages of Bank" as it was already stated in the paragraphs 18, 19., 20 of the page 3 and Clause 8 of the page 4 of the ICR.- KGM If the Bank wishes, it can continue to understand and express this very important criticism above, taking lightly as "it is clear that in some cases the Bank was tardy in reacting to a request for "no objection" on most occasions investigated by the assessment mission" or "There is no doubt that both the Bank and Borrower contributed to the delays at important decision points during implementation. The Bank could have moved with more urgency on some occasions to speed up its responses to the "no objection" requests." as was expressed by the Bank in PPAR. B) Fax of 21st Jan. 2003 said "We feel that the incremental qains that miqht be extension..." made durina a further implementation period are not areat enouqh to iustifv an  22 Considering the circumstances * (given in pages 5-6 of this letter) determined by the Bank itself and views** of the Borrower in ICR (has been given in pages 7-9 of this letter given below, we leave a) The judgement of the correctness of thisstatement above and b) Correctness of the Bank's performance evaluation by it self as "satisfactory"to the Bank's experiencedpersonsand all other readers: 1, The Officials of Borrower (Undersecretariat of Treasury) did subsequently request an extension of the loan by nine months, this was turned down by the Bank in January 2003 as it was also stated in Clause I of this letter. 2 There was money (an undisbursed loan amount) of US$ 23.249.140.26 whose commitment charges had been paid to the Bank for a period of 7 years. to be expended in the Loan . (Please see Clause 11). 3. There were many items outstanding at project closure (Please see Clauses Ill and IV) Implementing Agencies were left to the position of canceling the bids whose tenders had been received, upon not extending the closing date . Please see Clause V) 5 In order to have a rough idea about how the World Bank managed this Loan (from the beginning of the Loan upto the end) one can consider the duration past between the dates of our Treasury's application which is November 18, 2002 to the Bank (for extension of closing date of the loan to 31.12.2003) and the Bank's reply date which is 21.Jan.2003. Bank's Official written message informing the Borrower that the closing date of the Loan would not be extended has been forwarded after 63 days from the date of Treasury's letter and only 70 days before the closing date of the Loan. There was no time to take necessary precautions (making changes in the investment program, providing local funds, warning contractors etc) for the ongoing contracts, bids, contracts whose tenders had been received. (Please see Clause Ill). The Bank has given its consent (no objection) for the contract whose completion duration was 36 months, on 19June 2002, just 7 months before the fax refusing to extend the completion date of the Loan by 9 months Sincerely speaking, we had thought that the Bank would evaluate itself as "Unsatisfactory" if not "Very Unsatisfactory" considering the reasons explained in "Data Necessary for the Bank to Evaluate the Performance of the Bank by Itself" Part of the ICR. We had evaluated the Bank "as successful" and thanked to all Bank's Staff working for the loans we have received before. We thanked also the Bank's staff working in the Residential Office of the Bank and Disbursement Division of the Bank related to our Loans of 4048A-TU and 4049-TU. We wish, we could evaluate the  23 performance of other staff involved in this project also as Successful, as the other Banks Staff instead of Unsuccessful. From the contents and assessments made in the Draft PPAR, it is understood that ICR and its attachments (788 pages) couldn't be evaluated well. We believe that Evaluation of ICR Review for the Borrower should be done once more. Your enclosing these 9 pages to PPAR will be highly appreciated. THE FOLLOWING DETERMINATIONS, FIXATIONS AND OBSERVATIONS REALIZED BY THE BANK ITSELF, HAVE BEEN TAKEN FROM M E PPAR (PROJECT PERFORMANCE ASSESSMENT REPORT) PREPARED BY THE BANK. Clause 1. (PPAR 4.18) ALTHOUGH THE TREASURY OFFICIALS DID SUBSEQUENTLY REQUEST AN EXTENSION OF THE LOAN BY NINE MONTHS, THIS WAS TURNED DOWN BY THE BANK IN JANUARY 2003. Clause II. (PREFACE, 4.21) US$20.25 (Please chanqe this fiqure with the correct value of US$ 23.249.140,26 or EURO 21.111.257.47 as was informed bv our letter in reference "a" above.-KGM) MILLION WAS CANCELLED, WHILST A FURTHER US$27.43 ( Please chanqe this fiqure with the correct value of US$ 24.431.819.28 -KGM) MILLION WAS ACCOUNTED FOR BY CHANGES IN CURRENCY VALUES DURING IMPLEMENTATION. Clause Ill. (4.18) The items outstandinq at Droiectclosure were: Some highway sections were not completed. This mainly affected the Delice-Sungurlu-forum contracts that had already been awarded. When the assessment mission inspected the contracts some 16 months after loan closure, work was nevertheless in progress using own funds, but at a much slower rate than before. (4.11) Following the decision not to extend the closing date of the project, implementation was left to be funded from KGM's own resources, but the assessment mission confirmed that the process had been stopped at least for the short to medium term as KGM now has different priorities. (1.3) ABOUT 7,000 FATALITIES OCCUR ANNUALLY ON TURKEY'S ROAD SYSTEM AND THE LOSSES BECAUSE OF INJURIES AND PROPERTY DAMAGE ARE ESTIMATED TO BE IN THE ORDER OF 2 PERCENT OF GROSS DOMESTIC PRODUCT. TO PUT THIS IN PERSPECTIVE,THIS MEANS THAT EVERY TWO YEARS THE DEATH TOLL FROM ROAD ACCIDENTS IS EQUIVALENT TO THAT IN THE TRAGIC MARMARA EARTHQUAKEOF 1999. (4.4) BY PROJECT CLOSURE,317 ACCIDENT BLACK SPOTS WERE UPGRADED UNDER210 SMALL CONTRACTS.USING BOTH LOAN AND LOCAL FUNDS, LEAVING ONLY 87 STILL TO BE ATTENDED TO. SOME SAFETY-RELATEDMATERIALSAND SERVICES WERE NOT PURCHASED AND THE PRODUCTION OF AN EDUCATIONAL VIDEO HAD TO BE CANCELLED.  24 (4.5) THE EXTENT OF THE IMPROVEMENTS IN TRAFFIC SAFETY. DESPITE THE PARTIAL COMPLETION OF THE SAFETY COMPONENT OF THE PROJECT, WERE SUBSTANTIAL. KGM EVALUATEDA SAMPLE OF 152 ROAD ACCIDENT BLACK SPOTS AT HAZARDOUS ROAD SECTIONS AND RECORDED THAT 143 (94 PERCENT) OF THESE IMPROVEMENTS WERE SUCCESSFUL IN PRACTICE. MONITORING OF THESE HAZARDOUS LOCATIONS SHOWED THAT ACCIDENTS FELL BY 74 PERCENT AND FATALITIESBY A REMARKABLE 94 PERCENT. (4.18) The other items outstandinq at project closure were: Thermoplastic paint road markings and weighing scales which were financed from the local budget. Maanetic resonance equbment and traffic safetv videos contracts which were cancelled, while purchases of various road safety materials and roadside delineators were not carried out. Work ontheHiuhwav lnformafion Svstem (includinaa traffic safetv data bank) was stowed. 121 traffic patrol vehicles were not procured under the project. A numberof black spots and town passaue improvements were deferred. Clause IV. (4.19) The prospect of further progress in improving the efficiency of KGM's operations through making the Highway Information System operational also shamlv receded. (Bid documents have been prepared with the contribution of the Bank's consultants and Federal Highway Administration's consultants after a long common study. Announcement pertaining to HIS was published also in UN Development Business on 30.06.2001.Though Prequalifications have been realized and the Short List has been prepared and many tenderers hired consultants from abroad and strengthened their firms to give their tenders: and the Bank has given its no extending the closing date of the Loan. - KGM) objection on 19 June, 2002 the process was stopped upon Bank's not Clause V. (4.17) Bank's decision to close the project without an extension of time to complete unfinished construction works and procurement activities was obviously taken badly by KGM and the Traffic Safety Coordination Unit as thev had entered into a number of contracts on the assumption that the financinq stream would continue. ;lause Vi. (4.9) Overall. the outcome of the project is rated moderately satisfactory. Although the traffic safety component was evidently successful and a number of important road improvements were completed. the higher than expected costs, long delays and the decision not to extend the closing date leadinq to unfinished construction and procurement arranqements, counted aaainst a fullv satisfactorv outcome.  25 Clause VII. (4.8) Cooperation between the various agencies was also fairly well coordinated by KGM. given that there had been little precedent for this kind of collaboration before. (412) KGM also deserves credit for its role in coordinating a number of different government departments as well as university staff, unused to working together as a team. It took the lead in the task force for road safety and supported the other executing agencies in the areas of procurement and financial management. (4.23) KGM did well to coordinate satisfactorily with other government departments and agencies, and with academia. The performance of these partners varied, but was satisfactory on the whole. Clause VIII. (4.16) Bank performance is rated satisfactory. but with some reservations.There is no doubt that both the Bank and Borrower contributed to the delays at important decision points during implementation.The Bank could have moved with more urgency on some occasions to speed up its responses to the "no objection" requests. This matter was also raised by the Under-secretariatof the Treasury, and the Bank has in the meantime taken steps to streamline its procurementactivities. **SOME PARAGRAPHS FROM THE VIEWS OF THE BORROWER EXPRESSED IN ICR GENERAL EVALUATION OF THE RlSP BY THE COORDINATOR IMPLEMENTING AGENCY (ROAD IMPROVEMENT AND SAFETY PROJECT) I- DATA NECESSARY FOR THE BANK TO EVALUATE THE PERFORMANCE OF THE BANK BY ITSELF. The latest situation of the Project is as follows: THE BANK HAS REFUSED THE PROPOSAL OF THE NDERSECRETARIAT OF TREASURY AND OF THE 4 IMPLEMENTING AGENCIES TO EXTEND THE CLOSING DATE OF THE LOAN 4048A-TU, FROM 31.03.2003 TO 31.12.2003 AND THE AMOUNT OF EURO 21.I11.257,47 ( US $ 23.249.140,26, that Is 18,52 % OF THE LOAN 4048A-TU AMOUNT) WAS CANCELLED BY THE BANK, UPON THE FOLLOWING BANK'S FAX  26 DATED JANUARY 21,2003 PURSUANT TO YOUR LETTER DATED NOVEMBER 18, 2002, REQUESTING THE BANK TO EXTEND THE CLOSING DATE OF THE LOAN, I REGRET TO INFORM YOU THAT THE BANK IS NOT IN A POSITION TO AGREE TO SUCH AN EXTENSION. WHILE WE RECOGNIZE THE SOLID CONTRIBUTION THAT THE LOAN FINANCED ACTIVITIES UNDER THE PROJECT HAVE MADE TO TRAFFIC SAFETY AND OTHER SECTOR OBJECTIVES, WE FEEL THAT THE INCREMENTAL GAINS THAT MIGHT BE MADE DURING A FURTHER IMPLEMENTATION PERIOD ARE NOT GREAT ENOUGH TO JUSTIFY AN EXTENSION... 6- As, everybody will accept. signing and approving the mentioned related contracts implies that implementing agency and/or the World Bank committed against Contractors that the expenditure amounts of these contracts, would be paid. CWA-II. CWA-Ill. MS-05, 01-812-IC Code Numbered contracts, couldn't be finished or didn't reach to the expenditure levels which were agreed before with the Bank at the closing date of the Loan. 10- 4 IMPLEMENTING AGENCIES SINCERELY BELIEVED THAT THE GAINS (as (1) Very important ongoing contracts would not be stopped, they would be completed. (2) Commitments of the Bank and the implementing agencies given to the contractors, would be realized (3) There would be no legal problem due to uncompleted contracts, since the works in all of these contracts were necessary and described works according to the Loan Agreement, (4) The objectives of the Loan Agreement would have been reached completely) THAT WOULD BE REALIZED DURING EXTENDED PERIOD, WOULD BE GREAT ENOUGH TO JUSTIFY AN EXTENSION, ON THE CONTRARY WHAT WAS SAID BY THE COUNTRY DIRECTOR,IN HIS LElTER OF 21 ST JAN.,2003.  27 19- After completion of the Bank's reorganization. receipt of the Bank's no objection. became very difficult and took incredible long durations as; a) due to reduction in the number of experienced Bank's staff and b) due to very high increase in the number of projects, loans, and countries to be taken care by the same Bank's staff. (according to what the Bank's related Program Team staff say) 20- As an example; Bank's no objection for feasibility studies of Black Spot works (though their solutions, estimated costs, environmental reports, feasibility studies and other tables have been prepared and checked by the KGM and the Consultant firm) could be obtained after numerous correspondence by the Bank and after 64 days and 109 days passed. In the same way, the Bank's no objection for the Traffic Police Training Program (proposed with the letter of General Directorate of Security dated 19.12.2001) could be obtained with the fax of 21 October 2002 after 10 months passed (302 days). Similar delays occurred in the receipt of the Bank's no objection, for the works of the Ministry of National Education and Gazi University. (Though the tenders were received, the bid was to be cancelled by the Ministry of National Education when it was understood that the Bank would not extend the Loan closing date.) 8- This contract of CS-5, Highway Information System (Including Traffic Safety Common Data Bank) It was hoped by KGM that due to the special importance given to this component of the Loan by the Bank, the Bank could permit KGM to continue with this contract even the Bank doesn't permit the continuation of all other ongoing contracts. Bid documents have been prepared with the contribution of the Bank's consultants and Federal Highway Administration's consultants after a long common study. Announcement pertaining to HIS was published also in UN Development Business on 30.06.2001. Though Prequalifications have been realized and the Short List has been prepared and many tenderers hired consultants from abroad and strengthened their firms to give their tenders; and the Bank has given its no objection on June 19, 2002, the process was stopped upon Bank's not extending the closing date of the Loan. In order to have a rough idea about how the World Bank managed this Loan (from the beginning of the Loan upto the end) one can consider the duration past between the dates of our Treasury's application which is November 18. 2002 to the Bank (for extension of closing date of the loan to 31.12.2003) and the Bank's reply date which is 21.Jan.2003.  28 f EK-J VISION OFPROJEXTCOORDlNATIONCENTERONDRAFI'F'ROJKT PEXFORMANCEEVALUATIONREPORT The budge?of GeneralDircctoratcofW w a p was vay high,buttbt activkiesoftheproject Were allrelatedwiththe Highwaysthey shouldhavebeendeliveredbuwbtathe reletadUnits. ActivitieswhichW a c relatedwith tbeM n b y of Educarionnecdcdto bemwioned. 700tcachcrswaetxainedinteachertrainiipro~a 40 thousandtruck drivers who took thcir driving-liceasbefore 1996wap.trained thtsrminars. `TeacherguidciineonTd5c" was pubIisbcdilnddeliveredfor thesakeofthe sNdew, b m pr6sCboal to the& ofththigbschool&cat@ to make tbe edrrcationmat* ricer bysnpportingthcu"aclpcrtiwprogrs"~ Educationnsataialssuchas; compata, s"er, tdevislon, video, overhead- projectorwme to 362 sclmok, r. I IiI: