Mali - Second and Third Highway Projects

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4612 PROJECT COMPLETION REPORT MALI SECOND HIGHWAY PROJECT - CREDIT 383-MLI THIRD HIGHWAY PROJECT - CREDIT 599-MLI June 29, 1983 West Africa Region Highways Division This document has a restricted distribution and may be used by recipients only in the performanceo   FOR OFFICIAL USE ONLY MALI SECOND HIGHWAY PROJECT - CREDIT 383-MlI THIRD HIGHWAY PROJECT - CREDIT 599-MLI PROJECT COMPLETION REPORT TABLE OF CONTENTS Page No. Preface ........................................................ i Basic Data Sheet ............... ii Highlights ............... vi MALI SECOND HIGHWAY PROJECT COMPLETION REPORT I. INTRODUCTION . 1 II. PROJECT IDENTIFICATION, PREPARATION, APPRAISAL AND NEGOTIATIONS. 2 III. PROJECT IMPLEMENTATION. 5 Effectiveness and Start-Up. 5 Revisions of the Project and Credit Amount 5 Reconstruction of the Faladie-Segou Road. 6 Continuation of Program for Road Maintenance and Feeder Road Betterment .........................; 7 Procurement of Road Maintenance Equipment 8 Detailed Engineering for Bamako-Kati-Kolokani Road 8 Study of the Trucking Industry. 9 Construction of a Training Center (CPTP). 9 Implementation Schedule .10 Costs .......................... 10 Performance of Consultants .......................... 10 Performance of Contractors .11 Performance of Borrower .11 Disbursements .12 IV. INSTITUTIONAL DEVELOPMENT . 13 V. ECONOMIC RE-EVALUATION .13 General ..... 13 Technical Assistance and Studies .14 Maintenance Equipment .14 The Faladie-Segou Road .14 VI. THE ROLE OF THE ASSOCIATION . 16 VII. CONCLUSIONS .16 Tables 1. Project Cost Estimates 2. Actual and Expected Project Implementation 3. Actual and Appraisal Estimates of Project Cost 4. Schedule of Disbursements 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.  TABLE OF CONTENTS (Cont'd) Page No. MALI THIRD HIGHWAY PROJECT COMPLETION REPORT I. INTRODUCTION ........ ............................. 21 II. PROJECT IDENTIFICATION, PREPARATION, APPRAISAL AND NEGOTIATIONS .21 Project Description .22 Project Cost .22 Execution and Procurement .22 Disbursements ............. ..................... 23 Important Covenants ...... ........................ 23 III. PROJECT IMPLEMENTATION ..... ...................... 23 Feeder Road Program ...... ........................ 24 Paved Roads Maintenance ...... .................... 24 Assistance to the Training Center .... ............ 26 National Transport Plan ...... .................... 26 Bamako-Bougouni Road Detailed Engineering ........ 26 Project Actual Cost ...... ........................ 27 Disbursements ........ ............................ 27 Amendments ......... .............................. 27 Consultant Performance ...... ..................... 27 IV. INSTITUTIONAL DEVELOPMENT ..... ................... 28 Compliance with Covenants ..... ................... 28 Government Performance ........................... 29 V. ECONOMIC EVALUATION .............................. 29 Feeder Roads ........ ............................. 30 Paved Roads Maintenance ..... ..................... 31 VI. THE ROLE OF THE ASSOCIATION ..... ................. 31 VII. CONCLUSION ......... .............................. 33 Tables 1. Cost Estimates 2. Schedule of Disbursements 3. Disbursements by Category 4. Feeder Roads Constructed Under the Project 5. Costs and Benefits of Feeder Roads 6. Economic Re-evaluation of Highway Maintenance Component MAP (IBRD 11682R)  PROJECT COMPLETION REPORT MALI SECOND HIGHWAY PROJECT - CREDIT 383-MLI and THIRD HIGHWAY PROJECT - CREDIT 599-MlI Preface The following are project completion reports on two highway projects in Mali, the Second Highway Project, approved in April 1973 (Credit 383-MLI, US$9.5 m originally, credit amount increased to US$17.8 m in June 1975) and the Third Highway Project, approved in December 1975. (Credit 599-MII, US$10.0 m). On completion of the Second Highway Project, it had originally been envisaged to keep undisbursed funds, over US$1 million, as a reserve against outstanding contractor's claims. Subsequently, the Government informed the Bank that any payments on claims would be settled with Mali's own funds; at Government's request, US$1,040,000 were reallocated to finance maintenance equipment. The closing date was postponed to March 31, 1983. As of May 16, 1983, US$43,000 remained undisbursed. The two Project Completion Reports were prepared by the West Africa Region based on consultant, Government and Bank reports, and infor- mation collected by final supervision missions in January 1981 (Credit 383) and June 1980 (Credit 599). The assistance of the Government and the Ministry of Transport, in particular, is gratefully acknowledged. In accordance with the revised procedures for project performance audit reporting, these Completion Reports were read by the Operations Evaluation Department but the projects were not audited by OED staff. The draft Completion Reports were sent to the Borrower; however, no comments were received.   MALI SECOND HIGHWAY PROJECT - CREDIT 383-MLI PROJECT COMPLETION REPORT Basic Data Sheet KEY PROJECT DATA Actual or Appraisal Current Item Expectation Estimate 1/ Total Project Cost (US$ Million): 11.8 24.2 Overrun (%) 105% Credit Amount (US$ Million): 17.8 Original 9.5 Supplementary 8.3 Disbursed (as of May 31, 1981) 16.745 Undisbursed (as of May 31, 1981) 1.055 Project Completion Date 5/76 5/81 Proportion Completed by above Date 11% Proportion of Time Overrun 100% Economic Rate of Return (on reconstruction 29% 15% component) Institutional Performance good Cumulative Estimates and Actual Disbursement (US$ million) IBRD FY 1973 1974 1975 1976 1977 1978 1979 1980 1981 Estimate - 1,500 5,500 8,500 9,500 - - - - Actual 2/ - 300 3,833 6,198 9,673 12,205 14,664 16,722 16,728 Actual/Estimate (%)- - 20 70 73 102 102 - - - OTHER PROJECT DATA Actual or Original Estim. Item Plan Revisions Actual First Mention in Files or Timetable 07/30/71 Government's Application N.A. Negotiations N.A. 02/26/73 Board Approval N.A. 04/17/73 Credit Agreement Date 05/23/73 05/23/73 Effectiveness Date 08/20/73 09/12/73 Board Approval Supplementary Credit 06/03/75 Supplementary Credit Agreement Date 06/12/75 Closing Date 07/15/77 06/79-06/80 12/31/81 Borrower Republic of Mali Executing Agency Directorate of Public Works Fiscal Year of Borrower January 01 to December 31 Follow-on Project Name Third Highway Project Credit Number 599-MLI Amount US$ 10 million Credit Agreement Date 01/09/76   MISSION DATA No. of No. of Date of Item Month/Year Persons Staff Days Report Identification 07/71 2 16 07/30/71 Preparation 03/72 1 8 06/02/72 Preappraisal 10/72 1 3 11/14/72 Appraisal 06/72 2 40 04/03/73 Total 67 3/ Supervision I 06-07/73 1 21 08/73 II 06/74 2 20 07/74 4/ III 01-02/75 2 48 04/75 4/ IV 10/75 3 27 12/75 4/ V 12/75 1 2 01/76 5/ VI 03/76 2 2 05/76 4/ VII 06/76 1 7 08/76 4/ VIII 09/76 1 6) 12/76 4/ IX 10/76 1 6) X 05/77 2 10 06/77 4/ XI 04/78 2 20 05/78 4/ XII 03/79 2 20 04/79 4/ XIII 12/79 1 18 01/80 6/ XIV 05-06/80 1 8 07/80 4/ XVl 01/81 2 20 03/81 6/ 235 COUNTRY EXCHANGE RATES Name of Currency Malian Franc (MF) At Appraisal Exchange Rate: US$1 = 460 Average during Disbursement Period US$1 = 437 (range 402-493) Current US$1 = 500 (May 05, 1981) 1/ Excluding USAID financed portion. 2/ Actual disbursements as a percentage of appraisal estimates (up to mid-1978) and percentage of increased credit after mid-1978. 3/ Combined with First Highway Project. 4/ Combined with Third Highway Project. 5/ Same as 4/, plus preparation Fourth Highway Project. June 1981   - iv - MALI THIRD RIGHWAY PROJECT PROJECT COMPLETION REPORT (Credit 599-MLI) Basic Data Sheet KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 13.3 130 Underrun or Overrun (Z) 3 Credit Amount (US$ million) 10.0 Disbursed 10.0 Date Physical Components Completed 12/78 12/80 Proportion of Time Overrun (%) 100 Economic Rate of Return (x) 65 30 (average) Cumulative Estimates and Actual Disbursement (US$ million) US$ million 1976 1977 1978 1979 1980 1981 1982 Estimate 2,000 5,600 8,400 10,000 Actual 500 1,749 3,522 5,745 7,475 8,480 9,964 Actual/Estimate (%) 25 31' 42 57 75 84 99 OTHER PROJECT DATA Origirnal Actual or Item Plan Est. Actual First Mention in Files or Timetable 5/24/74 Government's Application r. a. Negotiations 5/5/75 10/28/75 Board Approval 12/11/75 Credit Agreement Date 1/9/76 Effectiveness Date 3/10/76 Closing Date 6/30/79 12/31/81 Borrower Republic of Mali Executing Agency National Directorate of Public Works Fiscal Year of Borrower January 1 to December 31 Follow-on Project Name Fourth Highway Credit Number 1104-MLI Amount (US$ million) 17.0 Credit Agreement Date 3/11/i1 1/ The Project as foreseen would have cost some $18m.   MISSION DATA No. of No. of Man Report Date Weeks Persons Weeks Date Identification/ Preparation 6/73 2 2 4 7/26/73 Appraisal/ Post-Appraisal 1-2/75 4 2 8 3/12/75 1/. Supervision I- 3/76 4 2 8 5/19/76 Supervision II 6/76 1 1 1 8/3/76 Supervision III 9-10/76 2 1 2 12/14/76 Supervision IV 5/77 1 2 2 6/22/77 Supervision V 3-4/78 2 2 4 5/23/78 Supervision VI 3/79 3 2 6 4/24/79 Supervision VII 12/79 2 1 2 1/14/80 Supervision VIII 2/80 2 2 4 3/17/80 Supervision IX 5-6/80 2 1 2 7/2/80 Total 19 31 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation): Malian Franc (MF) Appraisal Year Average: 1975 450 Intervening Years Average: 1976 496 1977 470 1978 418 1979 402 1980 452 Completion Year Average: 1981 500 1/ Most missions were for both the Second and Third Highway Projects.   - vi - Highlights A country-wide transport survey financed in 1967-69 by the United Nations Development Programme with the Bank acting as executing agency laid down the framework for a strategy in the road subsector. This survey con- cluded that, with the exception of a few trunk roads requiring rehabilita- tion/reconstruction, the main sector needs were improving highway maintenance and building feeder roads. The two highway projects subject of this audit, as well as the First Project, and the Fourth Project (currently underway) were framed in the survey's recommendations. The main physical components of the Second Project were the improve- ment of two paved roads, Bamako-Bougouni (155 km) and Faladie-Segou (223 km), continuation of highway maintenance and feeder road betterment program, procurement of highway maintenance equipment and studies; the main components of the Third Project were the improvement of 1,200 km of feeder roads, in- cluding provision of two ferries, a program to eliminate backlog maintenance on 944 km of paved roads, assistance to a Training Center established in the previous project, and preparation of a national transport plan. During implementation, the two projects had to be reduced in scope due to cost overruns stemming from bids significantly higher than expected during a period of high world-wide inflation in the Second Project and to delays in implementation, mainly due to slowness in Government procedures coupled with high inflation, in the Third Project. The main changes were de- letion of the USAID-financed Bamako-Bougouni Road (lowest bid was US$18.7 m compared to a US$4.6 m estimate) from the Second Project and reduced number of kilometers executed in the Third Project, 856 km instead of 1200 km of feeder roads and 250 km of backlog maititenance instead of 944 km. Had the projects been executed as originally envisaged, there would have been a cost overrun of 105% in the Second and 40% in the Third. Other important highlights are: In the Second Project: - The creation of a domestic training center in sub- stitution for fellowships abroad (paras. 3.06 and 3.16), which was later assisted also under the Third Project. While the training of Malian staff actually carried out during the initial operation period of the center fell substantially short of expectations (paras. 3.10 and 3.11 of Third Project), the center should in the long run greatly contribute to the development of the institutional capacity of the Ministry of Works; the importance of the center is further enhanced by the use of Malian instructors (para. 4.02).  - vii - While the Government met most of the covenants, it failed to provide the funds it agreed to for highway maintenance. This was due largely to the fact that fuel taxes, the main source of the Road Fund, were more and more frequently paid with checks drawn on the Postal Checking System (PCS), which was basically insolvent. Suppliers of spare parts became increasing- ly unwilling to accept postal checks and road mainte- nance deteriorated considerably as the Ministry of Works became short of equipment and of operating in- puts (paras. 3.23 - 3.25). As a result of cost being double the original estimate, without a parallel adjustment in benefits, the con- struction of the Faladie-Segou Road had an economic rate of return of 15%, about 50% below the appraisal estimate, but still fully satisfactory (paras. 5.06, 5.07). In the Third Project: - The problems encountered with highway maintenance financing and the postal checking system in the Second Project remained virtually unchanged during the Third; the problem was further compounded because a large part of the Road Fund's liquid re- sources was used as the Malian contribution to sub- stantial, mainly foreign-financed road investments (paras. 4.01, 4.02). - The Government was slow in signing contracts for technical assistance and in appointing trainees (para. 4.04). - The preparation of the National Transport Plan study left much to be desired; it had a cumbersome pre- sentation and lacked unity (partly the result that it was carried out by French, German and Malian per- sonnel, inadequately coordinated), was very descrip- tive and had little straightforward economic analysis or consistent conclusions and recommendations. Large- ly reflecting Government's objectives and priorities, it proposed unrealistically high road investments, unsupported by economic analysis and in clear conflict with available and potential financial resources (paras. 3.12, 3.13). - Overall, the feeder roads had a lower economic return than expected at appraisal, but were still satisfac- tory; the roads in the cotton-growing area had better returns than expected, while those in the groundnut- raising area were only marginal. As had been expected, the road maintenance component had a high return of about 50% (paras. 5.04 and 5.08).  MALI SECOND HIGHWAY PROJECT - CREDIT 383-MLI PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 Landlocked Mali covers about 1.24 million km2, with 90% of its 6.3 million population living in rural areas. The country has a simple transport system which provides minimum transport facilities to most areas of the country, with road and rail being by far the most important modes. At the end of 1980 the classified road network comprised about 14,200 km of roads and tracks, of which only about 3,300 km (including 1,670 km of paved roads) provided all-weather service; an additional 1,300 km were non-classified. It is estimated that 750 km of earth roads will be upgraded to paved standards within the next five years. The Malian Railway extends 640 km from Koulikoro, 57 km east of Bamako, via Kayes to the Senegalese border where it joins the Senegalese Railway leading to the ocean port of Dakar; the total distance by rail to this port is 1,285 km. River transport on the two major rivers crossing the country, the Niger and the Senegal, is limited by poor navigation conditions, making it usable only seven months of the year. Air transport is served by international airports at Bamako and Gao, and several small air- fields open to domestic traffic. 1.02 The Bank Group-s involvement in the transport sector began prior to independence when what was to become the Malian Railway benefited in part from a US$7.5 million loan (Loan 100-FR) granted to the French agency managing the railways in Francophone West Africa. Since independence in 1960, the Bank Group has financed three railway projects totaling US$26.3 million, four highway projects totaling US$52.5 million for strengthening and maintaining the primary and secondary road networks, and the construction and improvement of about 1,300 km of feeder roads. The first financing agreement in the transport sector (First Railway Project, Credit 95-MLI, US$9.1 million) was signed in 1966 and the first Credit for a highway project (Highway Mainte- nance Project, subsequently referred to as First Highway Project, Credit 197-MLI, US$7.7 million) was signed in June 1970. Credits for the Second and Third Highway Projects and for a Road Maintenance Project (Fourth Highway Project) were signed in May 1973, January 1976, and March 1981 respectively. 1.03 A countrywide transport survey financed in 1967-69 by the United Nations Development Programme with the Bank acting as executing agency laid down the framework for a strategy in the road sub-sector. The survey con- cluded that, with the exception of a few trunk roads, the main road system could serve the transport needs of the country without heavy investment, but that highway maintenance needed to be improved and feeder roads constructed. As recommended by the above survey, the Directorate of Public Works (DPW) prepared a highway maintenance and feeder road program which formed the basis for the above IDA-financed First Highway Project. Also, the three subsequent IDA highway projects have been aimed at these same objectives.  - 2 - 1.04 The technical assistance and training'part of the First Highway Project was reasonably successful to the extent that it contributed to the reorganization and strengthening of the country's DPW. A serious shortfall in available local funds prevented expectations of improved highway maintenance from being met fully, and only 470 km of the programmed 1,450 km betterment of feeder roads were completed (Project Performance Audit Report No. 1913 dated February 16, 1978). IDA continued to participate in the financing of technical assistance and training under the Second Highway Project, the subject of this report, and under the Third Highway Project (Credit 599-MLI dated January 9, 1976) which also included a feeder road program. The Road Maintenance Project (Credit 1104-MLI dated March 11, 1981) continues to emphasize maintenance of the road system. II. PROJECT IDENTIFICATION, PREPARATION, APPRAISAL AND NEGOTIATIONS 2.01 The First Highway Project included feasibility and detailed engineer- ing studies for Mali