Burundi - Highway Maintenance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 4582 PROJECT COMPLETION REPORT BURUNDI FIRST HIGHWAY PROJECT (CREDIT 467-BU) June 27, 1983 Eastern Africa Projects Department Transportation Division I 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.  I I  FOR OFFICIAL USE ONLY BURUNDI FIRST HIGHWAY PROJECT (CREDIT 467-BU) PROJECT COMPLETION REPORT TABLE OF CONTENTS Page No. Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . Key Project Data .... . . . . . . . . . . . . . . . . . . ii Highlights .... . . . . . . . . . . . . . . . . . . . . . . iv PROJECT COMPLETION REPORT I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . 1 II. PROJECT PREPARATION AND APPRAISAL . . . . . . . . . . . . 2 III. PROJECT IMPLEMENTATION AND COST . . . . . . . . . . . . . 4 IV. INSTITUTIONAL DEVELOPMENT ... . . . . . . ..... . . 12 V. FINANCIAL CONTRIBUTION OF GOVERNMENT. . . . . . . . . . . 13 VI. ECONOMIC REEVALUATION. 14 VII. THE ROLE OF IDA. ... . .. . . . . . 15 VIII. CONCLUSIONS AND LESSONS LEARNT. . . . . . . . . . . . . . 16 Tables 1. Project Cost Estimates and Financing. . . . . . . . . . . 18 2. Maintenance Equipment .... . . . . . . . . . . . . . . 19 3. Schedule of Disbursements .... . . . . . . . . . . . . 20 4. Vehicle Operating Cost Estimates. . . . . . . . . . . . . 22 MAP | 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.  I I A  PREFACE The First Highway Project for Burundi (Credit 467-BU) for an amount of US>') million was approved by the Board in March 1974. The credit was signed on March 27, 1974, and became effective on August 22, 1974, two months later than expected. The physical component of the project was virtually completed in August 1978, except for the construction of an office building which was not included in the original project. Construction of that building necessitated two, one-year extensions of the Closing Date before it was completed by a contractor (para. 3.02). The major components of the project consisted of (a) a four-year road maintenance program; (b) consultants' services for technical assistance to the Departement des Ponts et Chaussees (DPC) and training of its personnel; and (c) refinancing of an earlier credit for preparatory studies (Credit S11-BU). Since the Credit Agreement dates from early 1974, it did not include a covenant requiring the Government to submit a PCR. This PCR was prepared by the Eastern Africa Projects Department Highways Division (since July 1982 Transportation Division I) in September 1981. Preparation of this PCR was a desk job, based on supervision mission reports, appraisal reports of the First, Second and Third Highway Projects, progress reports and Bank files. No special mission was arranged or considered necessary for its preparation. In accordance with the revised project performance audit reporting procedures (1982), this PCR was read by the Operations Evaluation Department (OED) but the project was not audited by OED staff. The PCR was sent to the Borrower for comments; however, none were received.  I I I  - ii - KEY PROJECT DATA Item Appraisal Estimate Actual Total Project Cost (US$million) 8.4 8.8 Overrun (%) - 5 a/ Credit Amount (US$million) 5 5 Disbursed 5 Repaid - - Closing Date 12/31/78 12/31/80 Date Physical Components completed 09/78 09/80 Proportion completed by above date 85 100 Proportion time overrun (%) - 50 Economic Rate of Return (%) 13 )13 b/ OTHER PROJECT DATA Item Original Plan Actual First Mentioned in File 03/06/70 - Negotiations 04/72 02/74 Board Approval 04/72 02/74 Credit Agreement Date 03/27/74 Effectiveness Date 06/27/74 08/22/74 Closing Date 12/31/78 - First Revision Closing Date - 12/31/79 Second Revision Closing Date - 12/31/80 Borrower Republic of Burundi Executing Agency Direction des Ponts et Chauss6es, DPC Fiscal Year Borrower January 1 - December 31 Follow-on Project Second Highway Project 03/78 Cumulative Estimated and Actual Disbursements (US$ million) FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 (i) Estimated 0.4 1.4 3.2 4.5 4.9 5.0 - - (ii) Actual - 0.3 0.7 1.5 3.3 4.0 4.9 5.07 % of (ii) to (i) - 21 22 33 67 80 - - a/ Figure is somewhat misleading because project implemented deviated from that appraised in that part of the materials, fuel, technical assistance and training was financed under subsequent projects. b/ It was not feasible to calculate a re-evaluated rate of return for the Project as there is no clear-cut separation of costs and benefits among this and the two subsequent projects (para. 6.ul); however, indications are that the rate of return is higher than the appraised 13% (para. 6.05).  I  -iii - MISSION DATA Month/ No. of No. of Man- Date of Item Year Weeks Persons Weeks/C Report Identificstion 03/701/ - - - - Preparation ) Pre-appraisal) 10/71 3 3 9 04/71 Appraisal 07/73 - 2 -- 01/25/74 Supervision I 08/74 1 1 1 - Supervision II 12/74 1 1 1 01/14/75 Supervision III 11/75 1 2 2 11/18/75 Supervision IV 01/76 1 2 2 04/08/76 Supervision V 06/76 1 1 1 07/14/76 Supervision VI 02/77 1.5 2 3 04/06/77 Supervision VII 08/77 1 1 1 09/28/77 Supervision VIII 02/78 1 1 1 04/28/78 Supervision IX 09/78 1.5 1 1.5 10/27/782/ Supervision X 02/79 1 1 1 04/06/797/ Supervision XI 10/79 1.5 2 3 12/20/79S/ Supervision XII 02/80 1.5 1 3 05/09/80S/ Supervision XIII 07/80 1 1 1 4/ Supervision XIV 10/80 1 1 1 COUNTRY EXCHANGE RATE Name of Currency Burundi Franc (FBu) Appraisal Date July 1973 US$1.00: FBu 78.50 until March 1976 US$1.00: FBu 78.50 after March 1976 US$1.00: FBu 90. l/ In the context of the preparation of engineering Credit S11-BU dated 6/19/70. 2/ After this date combined with supervision Credit 773-BU. 3/ After this date combined with supervision Credit 773-BIT and preparation Third Highway Project. 4/ Incorporated in Appraisal Report Third Highway Project.  I I I I  - iv - HIGHLIGHTS The First Highway Project was intended as a first phase of an eight-to-ten year program to establish a highway maintenance organization capable of adequately maintaining Burundi's highway network (2.02, 4.01). Nationals with sufficient education to take full advantage of the training and technical assistance provided to the D6partement des Ponts et Chauss6es (DPC) are scarce in Burundi. As a result, appointments of suitable counterparts to the staff of expatriate consultants was a continuous problem during the implementation of the project (para. 3.09). This made the task of the consultants difficult and often frustrating but they performed quite satisfactorily (paras. 3.23-3.25). Since DPC recognizes that the shortage of domestic staff will continue for some time, it readily accepts technical assistance. As a result, additional technical assistance was incorporated under the Second and Third Highway Projects and subsequent progress in staffing and training has been reported (paras. 4.01, 4.02). This implies that institution building, which was a major goal of the First Highway Project, is being followed up. Another problem during implementation was the shortage of local funds due to inadequate budgeting (para. 3.10). This led IDA to agree to use funds under the Credit, initially intended for betterment works, for the purchase of materials and fuel to be used in maintenance works (para. 3.10). The shortage of local funds was corrected in the follow up projects when related covenants in the credit agreements for the Second and Third Highway Projects were made more specific and stringent (para. 3.11). An unforeseen problem arose when the Dar es Salaam refinery was down for repairs and when war conditions in Uganda closed Burundi's major external supply route via Mombasa, causing frequent shortages of fuel and materials, particularly cement (para. 3.08). Whereas the introduction of labor intensive maintenance procedures was quite successful, the introduction of mechanized maintenance brigades was less successful because of delays in deliveries of equipment (paras. 3.03, 3.07) and in training of operators (para. 3.15). Further, a two-year delay resulted from IDA's initial resistance, later withdrawn, to agree placing an order for trucks with the second lowest bidder which was preferred by DPC (para. 3.16).  v - The Government failed to comply with the Credit Agreement by pressing DPC into using its organization to repair and maintain city streets in Bujumbura. To correct this, a covenant in Credit 773-BU for the Second Highway Project requires setting up a separate department for Bujumbura with its own budget, staff and equipment (para. 3.12). The studies financed under the project formed the basis not only for the Second and Third Highway Projects but also for funding of works by the Kuwait Fund and the African Development Fund. The 5% cost overrun for the project was small but this is somewhat misleading because the project as implemented deviated from that appraised, in that part of the materials, fuel, technical assistance and training was financed under the Second and Third Highway Projects (para. 3.22). As there is no clear-cut separation for costs and benefits among the three projects, an economic re-evaluation of the First Highway Project was not feasible (para. 6.01). In summary, although implementation of the First Highway Project met with a number of problems, some of which may have been foreseen (e.g., shortage of local funds and national counterparts), it constituted a positive first step to strengthen the DPC. DPC made serious efforts to perform well and most problems were outside its control, some even outside the control of the Government. The fact that performance is improving under two follow-on projects may lead to the conclusion that by and large the teething problems of the initial project have been corrected and that the project was successful.  - 1 - I. INTRODUCTION 1.01 The first Bank Group lending operation in Burundi was made in 1957 (Loan 165-BE, US84.8 million), to the Belgian Trust Territory of Ruanda-TTrundi for improving to paved standards the BRujumbura-Muramvya road; the project was completed in 1959. The second was in 1970 (Credit Sl1-BTJ, TTS8380,000) to assist in financing detailed engineering of the Bujumbura-Nyanza Lac road plus a study for the improvement of road maintenance. This latter credit amount was later included for refinancing under the First Highway Project (Credit 467-BTT, TTSS5 million, March 1974) which is the subject of this Project Completion Report. 1/ 1.02 Burundi's topography is rugged, and the cost of road transport, including that of road construction and maintenance, is high. Since road conditions are poor, the Bank Group's lending activities have consistently focussed on reducing road transport costs through improvements of the country's 3,000 km classified roads and the maintenance thereof. The total system is about 5,500 km of which the 3,000 km classified network is administered by the central Government and the remaining 2,500 km by local administrations and the users. The maximum east-west distance within the country is about 150 km and north-south about 225 km. In view of the above and the absence of navigable rivers, road transport is the only internal economic transport mode, and minimizing its cost is vital for the country's economy. 1.03 Volumes of external transport are low and unbalanced, the more so since the main export is coffee and thus highly seasonal. In the 1976-1978 period, foreign trade amounted to about 110,000 tons of imports and 27,000 tons of exports per annum. External transport routes are either the most frequently used southern lake/rail route via Kigoma to Dar es Salaam in Tanzania (1,428 km) or the northern route via Rwanda through Kampala in Uganda to Mombasa in Kenya (1,740 km by road or 1,925 km by road/rail). Because of the small volume of traffic it generates, Burundi has virtually no leverage over neighboring countries to improve transport conditions. 1.04 During the implementation period of this First Highway Project, another credit was granted to Burundi (Credit 773-BIJ, USS14 million, February 1978) for the Second Highway Project. In April 1981 the Board approved a Third Highway Project. Whereas the First Highway Project focussed exclusively on improvements of maintenance operations and studies, the Second and Third Highway Projects include also road construction and improvement works in addition to continuing the maintenance activities begun under the First Highway Project. 1/ The original title of this project was "Highway Maintenance Project" but since subsequent road projects which include also a maintenance component, are called Second and Third Highway Project, the title "Highway Maintenance Project" was later unofficially changed to First Highway Project.  - 2 - II. PROJECT PRRPARATION AND APPRAISAL Preparation 2.01 The preparation of the First Highway Project took a long time and met with many difficulties. In 1967-69 the United Nations Development Program (UNDP) financed a feasibility study for improvement of the road from the country's capital, Bujumbura, to Kigoma in Tanzania, a railhead of the then East African Railways by which a large share of Burundi's export-import traffic is transported to and from the Tanzanian port of Dar es Salaam. The Rank was the executing agency for this study which was carried out by a German/French joint venture of consulting firms. It demonstrated that the volume of international Burundi traffic was insufficient to warrant an improved road link in competition with the established lake transport route between Bujumbura and Kigoma. The study did indicate, however, that improvement of Bujumbura-Nyanza Lac (121 km) would be economically justified. Identification 2.02 In view of that conclusion, the Association followed up the study with Credit Sll-BU ITS$380,000, 1970) to help finance the detailed engineering of the above road. The credit also provided for a study on how to improve the maintenance of Burundi's highway network, the priority of which was established during IDA's appraisal of Credit Sll-BU. The maintenance study was carried out by the German partner of the above joint venture. Preappraisal 2.03 On the basis of the findings in October 1971 of the above studies, an IDA mission appraised a project consisting of: (a) construction to bituminous paved standards of the Bujumbura-Mutambara road section; (b) improvement to gravel standards of the Mutambara-Nyanza Lac road section; and (c) a four-year highway maintenance program as a first phase of a longer-term (eight to ten years) maintenance program. A US$8.9 million Credit was negotiated in April 1972 for the above project. However, in May 1972 political disturbances eruDted and Board presentation was deferred. 2.04 In late 1972 the Government proposed changing the specifications of the contract for the Bujumbura-Nyanza Lac road to render the work more labor intensive so as to expedite resettlement of the population in the Bujumbura-Nyanza Lac region, depopulated during the above disturbances. Consultants who were retained to study the feasibility of this concluded in an April 1973 report that labor, if available, could be substituted for equipment for some operations. However, they also concluded that execution of the works to the original specifications was no longer justified because traffic was about half the 1971 level as a result of the depopulation of the region. 2.05 A subsequent FAO study carried out in April 1973 concluded further that it would take about five years for production in the abandoned region to return to the 1971 level. IDA therefore proposed to the Government to finance only limited improvement of the Bujumbura-Nyanza Lac road and to defer paving of the Bujumbura-Mutambara road section until justified by increased traffic volumes. However, the Government later decided to seek other financing for the full reconstruction of the above road and to limit IDA financing to a highway maintenance project plus preinvestment studies.  -3- Appraisal 2.06 Accordingly, a more modest project was conceived and appraised in July 1973. The total cost of the project was estimated at UTS$8.4 million of which about US$7.2 million was the foreign currency component (Table 1). The project costs were to be shared by the Association, ITJNT)P, the Federal Republic of Germany, Belgium and Burundi (for the amounts see para. 2.11). Negotiations were held in February 1974 and a US$5 million Credit was signed in March 1974. Of the US$5 million IDA credit, UTS$4.82 million, or 96%, was to be for foreign costs and the remaining US$180,000 would be local; the Credit included the refinancing of Credit Sll-BU for preparatory studies (para. 1.01). 2.07 Thus, the highway maintenance project for which Credit 467-BIJ was made in March 1974, was part of an initially larger project, identified some five years earlier as a result of a 1967-1969 TIJNDP study, and of subsequent feasibility and detailed engineering studies undertaken in 1970 and updated in 1973. The Project 2.08 The project consisted of the following: (a) a four-year highway maintenance program, including (i) technical assistance to the Department of Roads and Bridges (Departement des Ponts et Chaussees, DPC) including the training of DPC personnel at all levels; (ii) procurement of maintenance, workshop and training equipment, spare parts, fuel and materials; and (iii) the construction of a mechanical workshop and storeroom at Bujumbura and a small maintenance depot at Gitega; (b) consultants' services for: (i) the preparation of a master plan for road development; (ii) feasibility study and detailed engineering of the Ngozi-Muyinga-Kobero road (106 km) and of other roads to be identified under (i) above; and (iii) updating the consultants' report financed by Credit Sll-BTU for preparing the project: (c) refinancing Credit Sll-BU. 2.09 The DPC within the Ministry of Public Works was responsible for execution of the project, assisted by the experts financed by UNDP, German and Belgian financial aid and the Credit.  -4- Estimated Cost of the Project 2.10 The estimated cost of the project and IDA's contribution is shown in Table 1 and summarized below: IDA Local Foreign Total Foreign Contribution ---- S-- IT St 000