Burundi - Second Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6255 PROJECT PERFORMANCE AUDIT REPORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773-BU June 9, 1986 Operations Evaluation Department 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. ABBREVIATIONS AND ACRONYMS ADT Average Daily Traffic BADEA Arab Bank for Economic Development in Africa (Banque Arabe pour le Developpement Economique en Afrique) ERR Economic Rate of Return FRG Vederal Republic of Germany FYR First Year Return ICB International Competitive Bidding INTRACO International Transport Corporation MPW Ministry of Public Works MTPT Ministry of Transportation, Postal Services and Telecommunications RD Road Department RIG Road of General Interest (Route d'Interet General) RN National Road (Route Nationale) TOB Transport Office of Burundi UNDP United Nations Development Program VPD Vehicles Per Day FOR OFFICIAL USE ONLY THE WORLD SANK Washngton. DC 20433 U.S A MIae af Duc.aweal Opstattie, Ivaheatin June 9, 1986 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Projec-t Performance Audit Report on Bur,ndi Second Highway Project (Credit 773-BU) Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Burundi Second Highway Project (Credit 773-BU)" prepared by the Operations Evaluation Department. Attachment This document has a restricted distribution and may be used by ecipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT BURUNDI: SECOND HIGHWAY PROJECT (CREDIT 773-BU) TABLE OF CONTENTS Paae No. Preface ........................................ I Basic Data Sheet ............................................... II Evaluation Summary ........ ........ .................. v PROJECT.PEPFORMANCE AUDIT MEMORANDUM I. INTRODUCTION .......................................... 1 The Country in the 1970s ............. ............. 1 IDA Assistance to the Highway Sector .......... ......... 4 II. THE SECOND HIGHWAY PROJECT ............................. 6 IDA Objectives and Means for their Pursuit .............. 6 Implementation of Project Components .................... 7 The Bujumbura-Rugombo Road: Procurement, Supervision and Financing Issues ................ 13 Project Cost, Financing and Reestimated Rate of Return... 15 Sustainability of Project Benefits ..................... 16 III. FINDINGS AND CONCLUSIONS .............................. 17 Macroeconomics ....................................... 17 Finance ............................................. 18 Investments and Maintenance .................... 18 Access to the Indian Ocean .............................. 20 IDA Assistance to the Highway Sector: 1970-1985 ......... 23 Annex 1 ABSTRACT OF KEY DOCUMENTS IN THE PROJECT FILE Preappraisal ......................... 24 Appraisal and issues Paper ................................. 24 Negotiations ............................... 27 Credit Signature and Date of Effectiveness ................... 29 Project Implementation ...................................... 29 The Bujumbura-Rugombo Road: Reconstruction and Procurement Issues ................................... 34 This document has a restricted distribution and may be used by recipients only in the peforaUe of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Table of Contents (Cont'd.) Page No. PROJECT COMPLETION REPORT I. Introduction .... .............. .......... 39 II. Project identification, Preparation and Appraisal ....... 41 Ill. Project implementation and Costs ........................ 47 IV. Institutional Development ............................... 58 V. The Role of Government ...................... 59 VI. Economic Reevaluation ................................... 60 ViI. The Role of IDA ......................................... 65 Viii. Conclusions ............................................. 66 Annexes 1 . Cost Est imates ............ ................ 68 2. Investm~ent Program .............................. 69 3. Bridges Proposed for Reconstruction...................... 70 4. Stabilization of Steep Grades................... 71 5. Procurement of Maintenance Equipment.............. 72 6. Contract Awards ................................. 73 7. Disbursement byCategory................ .......... 74 8. Record of Credit Disbursements....................... 75 9. GovernmRent's Final Report on the Bujumbura-Rugombo Road 76 10. Compliance with Major Credit Covenants .............. 81 11. Economic Rsevaluatlon: Bujumbura-Rugombo Road .............83 12. Economic Reevaluation: Replacement of Wooden Bridges, Stabilization of Steep Grades and Maintenance Program 84 1. Comments from the Borrower ............................. 86 ME -. IBRD 12905R PCR - I - PROJECT PEREORMANCE AUDIT REPORT BURUNDI: SECOND HIGHWAY PROJECT (CREDIT 773-BU) PREFACE This is the performance audit report on the Second Highway Project for which Credit 773-BU In the amount of US$14.0 million was signed on March 29, 1978. The Credit has been fully disbursed. Cofinancing was provided by the Arab Bank for Economic development of Africa (BADEA) in the amount of US$6.1 million, the Federal Republic of Germany In the amount of US$750,000, and the United Nations Development Programme (UNDP) in the amount of US$900,000. This document consista of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED), and of a Project Completion Report (PCR) prepared by the Eastern and Southern Africa Regional Office. OED studied the documentation preserved in the Records Center and reviewed the project against the Staff Appraisal (SAR) and the President's Report (PR), as well as against the legal documents and the transcripts of the Executive Directors' meetings which considered the project. Discussions on project formulation, implementation and follow-up were held with Bank staff and consultants. An OED mission visited Burundi In July 1985 to secure Government views on the project and the assistance extended to the mission Is gratefully acknowledged. Copies of this draft report will be sent to the Government and the cofinanciers for their comments. The PCR provides a generally adequate summary of project preparation and implementation. Since the Second Highway Project has flowed out of the First, and since the Third and Fourth Projects provide finance for the repair of the major road constructed under the Second, the PPAM has taken advantage of the opportunity offered by this audit to look into the macroeconomic framework against whic(h the Association has been assisting the Burundi highway subsector over the 19/0-1985 period. The draft audit report was sent to the Borrower and the cofinanciers for comments. The Borrower's comnents are reproduced In Appendix 1. - ii - PROJECT PERFO"MAICE AUDIT REPORT BURUNDI: SECOND HIGHWAY PROJECT CREDIT 773-BU) BASIC DATA SHEET KEY PROJECT DATA BORROWER Republic of Burundi EXECUTING AGENCY Ministry of Public Works FISCAL YEAR OF BORROWER January 1 - December 31 ADRraisal ActualL Estimate Latest Estimate TOTAL PROJECT COST (US$m equivalent) 23.97 31.05(1) CREDIT AMOUNT (USSm equivalent) 14.00 14.00 OTHER EXTERNAL FINANCING (USSm equivalent) 7.75 7.75 GOVERNMENT PARTICIPATION (US$m equivalent) 2.22 2.22 PROJECT COMPLETION DATE December 1981 December 1982(2) ECONOMIC RATE OR RETURN 17% 12-17%(3) 1 This total includos the US$4.5 million spent under the Third Highway Project, plus an additional US$1.5 to be spent under the Fourth Highway Projeci for repair works on the Bujumbura-Rugombo road. 2 The completed works encompass significant reductions of the originally envisaged scope of the project. 3 Depending on future traffic growth. - iii - OTE PROJECT DATA EAI FIRST DOCUMENT IN THE FILE January 1976 PROJECT APPRAISAL February 1977 NEGOTIATIONS December 1977 BOARD APPROVAL February 1978 CREDIT AGREEMENT SIGNED March 1978 CREDIT EFFECTIVE July 1978 FiNAL DISBURSEMENT July 1983 CREDIT CLOSED December 1982 PCR RECEIVED BY OED July 1985 FOLLOW-ON PROJECTS(4) NAME Third Highway Project CREDIT NUMBER 1132-BU CREDIT AMOUNT SDR 20.0 million CREDIT AGREEMENT DATE December 1981 NAME Fourth Highway Project CREDIT NUMBER 1583-BU CREDIT AMOUNT SDR 18.9 millon CREDIT AGREEMENT DATE June 1985 CUMULATIVE DISBURSEMENTS fIm Ef8 EY81 EEM2 EMI3 EfBA ESTIMATED 3.3 8.7 12.9 14.0 ACTUAL 2.0 5.5 8.8 12.7 13.96 14.0 % OF ESTIMATED 60.6 63.2 68.5 91.0 99.7 100.0 4 Both projects provided funds for repair works on the Bujumbura-Rugombo road built under the Second Project. - iv - CUNTRY EXCHAGE RATES Average for project implementation period (1978-1982): US$1.00 m Fbu 90.0 MISSION DATA Mission Number Ma Renort RAI of Staff a= DAIA Preparation Jan. 1976 2 10 April 1976 Preparation June 1978 1 7 July 1976 Preparation/ Preappraisal Nov. 1976 2 10 Dec. 1976 Appraisal Feb. 1977 2 20 Feb.1978 SubtotaL 47(5) Superv. I Sept.1978 1 10 Nov.1978 Superv. II Feb.1979 1 7 Apr.1979 Superv. III June 1979 2 14 Aug.1979 Superv. IV Oct.1979 2 20 ----(6) Superv. V Nov.1981 1 3 Jan.1982 Superv. Vi Apr.1982 2 20 July 1982 Superv. VII Sep.1982 1 8 Nov.1982 Superv. ViII Apr.1983 1 6 July 1983(7) Subtot,L 88(8) 5 Includes supervision of the First Highway Pro.ect (Credit 467-8U). 6 There is no copy of the Supervision Mission Report in the file. Mission dates and composition extracted out of a December 10, 1979 letter from IDA to the Ministry of Public Works. 7 There Is no copy of the Supervision Mission Report In the file. 8 Includes preparation and supervision of Third Highway Project (Credit 1132-BU). - v - PROJECT PERFORMANCE AUDIT REPORT BURUNDI: SECOND HIGHWAY PROJECT (CREDIT 773-OU) EVALUATION SUMMARY Intro2duction Burundi is among the poorest and most densely populated countries in the world. About 95% of the population Is rural and depends precariously on subsistence agriculture. There are no exploitable mineral resources. Coffee sales generate most of the export earnings, but these are not enough to cover the country's foreign exchange needs which, consequently, have to be financed by substantial volumes of concessionary aid (PPAM, paras 1-5). Economic performance has not been Impressive over thi past ten years and In 1983, per capita GNP fell In real terms. The umodernO sector is small. The public sector It growing in numbers of persons employed, but not In productivity. The budget, largely preempted by wages and salaries, cannot easily provide either counterpart funds for Investment or regular financing for recurrent expenditures (PPAM, paras 37-41). Domestic transport relies exclusively on roads (about 5,400 km of roads and tracks, of which 2,900 km are Incorporated into the classified network). Burundi Is landlocked and International transport depends upon Ugando, Kenya and Tanzania to provide transit facilities. Arrangements have never been satlsfacto y: the long time (up to six months between Bujumbura and Dar es Salaam) and the high cost of international shipments affect adversely both the Implementation of development projects In Burundi and the general price level (PPAM, paras 3 and 43-45). Between 1974 and 1985, IDA financed four highway projects (PPAM, paras 6-9 and 42). This report Is the audit of the Second Project and, apart from reviewing results associated with the implementation of this particular project, the opportunity was taken to explore broader Issues, such as the improvement of the country's connections with ports on the Indian Ocean, which may be addressed with advantage in future IDA-supported projects. - vi - Prolect Object!veS (PP*AM, para 10) The Secona Project had the same basic objectives as the First: (a) help the Government improve the classified road network; and (b) continue the road maintenance program begun in 1974 under the Highway Maintenance Project. Prolect Results Physical outout did not come up to appraisal expectations. The 65 km BulWmbura-Rugombo Road was expected to be completed in 30 months. The original contract was awarded in September 1978 but works execution encountered considerable difficultlei (PPAM, paras 13-16; PCR, paras 3.02-3.12). Remedial works financed under the Fourth C phway Project had not yet been carried out, as of December 1985. Work2 by force account (PPAM, para 19) to improve the classified network produced 72% of the planned output (207 km Instead of 289 km). Works by contract (PPAM, para 20; PCR, paras 3.14-3.20) to Improve the classified network produced 22.6 km of road improvements (instead of the planned 149.5 km): 10 wooden bridges were replaced (Instead of the planned 22); and 68,000 m2 of steep grades were stabilized (5,000 m2 more than planned) but no surface treatment was applied. Project components re!ated to staff training, technical assistance, Improvement of road maintenance operations, construction and operation of the MPW Solils and Materials Laboratory, and Institution building were satisfactorily Implemented (PPAM, para 23; PCR, para 3.21). Total orolect costs exceeded appraisal estimates by about 30% (from US$23.97 million to US$31.05 million), In spite of the significantly reduced physical scope of the works, largely because of the extra expenditures necessitated by the remedial work for the Bujumbura-Rugombo road (PPAM, paras 31-32; PCR, para 3.27). The reestimated economLc rate of returna for the project may range from about 17% (the same as the appraisal estimate) to about 12%, depending on actual traffic growth (PPAM, para 33; PCR, paras 5.01 ff). Conciualons Throughout the 4970-1985 period, IDA assistance was correctly focussed on the twin oblectives of improving the classified road network and on strengthening maintenance operations through staff training, technical assistance and provision of mechanical equipment. Physical works execution (for the First as well as for the So-ond Project) encountered difficulties due in unequal parts to cumbersome Government procedures (PCR, para 3.20); to lack of experienced staff; to imperfect supervision by consultant and IDA staff (PCR, paras 3.36 and 7.02); - vii - and to political conflicts in neighboring countries which interrupted, for prolonged periods of time, the arrival of needed supplies and equipment In Burundi (PCR, para 3.04). Under the Second Project, road maintenance seems to be Improving and MPW seems to be making good use of the mechanical equipment and technical assistance resources financed under the project (PPAM, para 24). Staff training and gradual Inatitution building, for which the continuing presence of consultants and technical assistance staff will be Indispensable for a number of years to come, (PCR, paras 3.25 and 4.04), as well as better supervision by IDA, are beginning to remove the factors which, in the past, had been largely responsible for poor implementation results. Examined strictly within the framework of the highway sector, and assuming that further macroeconomic difficulties will not prove Insurmountable, suatainability of Drolect benefits shows encouraging signs (PPAM, paras 34-36). Future Drolects may well continue emphasizing road maintenance, selective improvement of economically justified sections of the classified network, and further assistance to staff training efforts (PPAM, para 49). The major outatandina lasue Is how to improve access to tho Indian Ocean. This could be resolved only through tight collaboration among the donor community which, by pooling the Influence It has over Burundi's neighbors, may persuade them to provide preferential service for good transiting through their territories on behalf of landlocked countries In the Interior of Eastern Africa (PPAM, paras 43-45). Financing arrangements for the repair of the Bujumbura-Rugombo road revealed that Government did not fully recall the limits placed on the authority of IDA Project Officers actlng in the field. IDA guidelines do specify that verbal commitments by Project Officers must be confirmed in writing by IDA Headquarters. Such confirmation was not Issued for the contract i repair the Bujumbura-Poigombo Road and IDA may need to spell out even ire clearly Its standard procedures to avoid a recurrence of developments similar to those experienced in the course of this project (PPAM, Annex 1, paras A.30-A.35). PROJECT PERFORMANCE AUDIT MEMORANDUM BURUNDI: SECOND HIGHWAY PROJECT (CREDIT 773-BU) I. INTRODUCTION The Country In the 1970s 1. Burundi became Independent In 1982 after having been administered, together with neighboring Rwanda, as a Belgian Trust Territory for the previous 45 years. It was a kingdom until the army coup in November 1986 which established a Republic. On November 1, 1976 another coup dismissed the previous regime and the new government proclaimed a policy of national unity. 2. The small country (27,800 km2) was poor and undeveloped when It became independent and the situation had not chanped much ten years later.(9) With a population of 3.8 Million in 1976, only 121,000 were in wage employment and the remainder depended on subslstence agriculture. The agricultural labor force was untrained and the level of enroiment In formal education was one of the lowest in Africa. The preponderance of subsistence agriculture and the small amount of production for the market created a heavy dependence upon the importation of consumer goods. Thus, any expansion of domestic demand would inevitably provoke a corresponding increase in the demand for imports. Exports consisted primarily of coffee, with a very small quantity of cotton. 3. In the mid-1970s, Burundi faced formidable disadvantages: a high rate of population increase;(10) dependence on coffee exports f^r foreign 9 In 1965, the per capita gross domestic product (GDP) was equivalent to US$48 and almost two-thirds of the GDP consisted of subsistence agriculure. Ten years later, In 1976, the per capita Income was estimated at US$120 and between 1970-1975 GDP had grown by no more than 2% annually In real terms. 10 From 3.8 million in 1976, population increased to 4.4 million in 1983 and is expected to reach 7.0 million in the year 2000 and 9 million in 2009. 2 exchange; a large, untrained labor force; a rudimentary lnfrastructure;(11) and long and Inefficient transport connections to the Indian Ocean;(12). The level of investment was consistently low, averaging less than 10% of GDP, domestic savings amounted to about 5% of GDP, and close to half of total 11 Road transport was then, as it continues to be now, the only internal transport mode. The road network consisted of about 3,000 km of classified roads and about 2,600 km of unclassified earth tracks. The classified network was subdivided as follows: Primary Roads (RN-Routes Nationales): about 760 km radiating from Bujumbura to the borders of neighboring countries. Secondary Roads (RIG-Routes d'Interet General): about 1,020 km linking the provincial centers with one another. ProvinCial Roada (RP-Routes Provinciales), about 1,200 km linking commercial centers within a province. The general condition of the network was poor: In 1977, only about 180 km of primary roads were paved and of these, 20 km needed urgent repairs. 12 in the 1970s, there were two international routes available from Burundi to the Indian Ocean. First, the traditional lake/rail Bulumbura-KIgoma-Dar es Salaam route (175 km by barge and 1255 km by rail) which carried 90% of total external traffic, amounting to 147,000 tons in 1977. Although route capacity was designed to handle about 450,000 tons per year, service was slow and losses through theft were reportedly common. Total transit time generally averaged 90 days but frequently extended to six months. The main bottlenecks occured on the Tanzania Railway and in the port of Dar es Salaam. Second, the northern route via Rwanda and Kampala to Mombasa (884 km from Bujumbura to Kampala by road, and 1200 km either by road or by rail from Kampala to Mobesa). Most of the traffic on that route preferred to use the road from end to end to avoid the additional handling and longer transit time for rail. Round trip between Bujumbura and Mombasa took frr- 10 days to a month, depending on delays in Mombasa and administrative formalities at the various borders. In the 1980s, the northern route had increased its share from about 10% to over 50% of total traffic because of *capacity problems and bottlenecks on the Tanzania railways and in the port of Dar es Salaamu (SAR, Burundl:Fourth Highway Prolert, April 1985, para 1.08). "Cumbersome administrative procedures', an expression of considerable elasticity, are alleged to constrain efficient operations through the northern route as well, and the SAR for the Fourth Highway Project (para 1.09) hopes that a series of studies, reports and agreements will Improve matters. 3 capital formation was financed by external aid.(13) 4. Belgium bequeathed a complicated administrative system, suited to the much larger territory of which Burundi had been only a part. Given the shortage of domestic talent, the places of the departed colonial staff had to be filled by technical assistance personnel. Between 1974 and 1975, disbursements of official loans and grants(14) averaged about US$17 million per annum. Since approximately half of this aid went for technical assistance, not much was left for investment because government resources were meager and a portion of aid funds had to be used to finance recurrent expenditures.(15) 5. At the end of 1976, Burundi's external medium and long term debt amounted to about 11S$24 million, with the Bank and IDA holding 21% of the total. Debt service averaged 4.4% of export earnings durinp 1972-76, with the Bank Group receiving 28% of all debt service payments. Notwithstanding the low debt service ratio, Burundi could not attract much external capital on commercial terms, partly because it did not have any resources worth exploiting and partly because of the Instability of Its export earnings, which depended on the fluctuating price of coffee. Consequently, external aid had to be on grant terms and to Include a substantial share of local cost financing. If development projects were economically viable, substantial volumes of external assistance could be justified both for construction and for maintenance. On the other hand, if projects that were not economically viable were built, not only would scarce resources be wasted but additional recurrent obligations would be added to an extremely tight maintenance budget.(16) 13 In 1976 and 1977, foreign aid amounted to more than 40% of total Government highway expenditures. 14 With the major contributions coming from Belgium, the UN agencies, IDA and the European Development Fund. 15 This happened with the IDA-supported First Highway Project (para 8, below). 16 This was the Issue behind the prolonged discussions over the proposed construction (to be financed by Germany and the Republic of China) of the economically unjustifiable Gitega-GIhofl and Bujumbura-Rutovu roads (PPAM, Annex 1, para A.3(f) below). Economics, and IDA advice, notwithstanding, the two roads were eventually built (PPAM, Annex 1, para A.10). 4 IDA Assitance to the Highway Setor 6. IDA assistance was first extended In 1957 (17) to the Belgian Trust Territory of Ruanda-Urundl. In 1970, a credit was granted for the financing of detailed engineering of the Bujumbura-Nyanza Lac road plus a study for the improvement of road maintenance.(18) The credit amount was later included for refinancing under the 1974 First Highway Project.(19) 7. The First Highway Project was originally appraised in 1971, but the 1972 civil war depopulated the area where the project was expected to improve a major road. Agricultural output vanished and five years were thought to be needed before production could come back to the 1971 levels. Reappraisal was done In 1973, the road improvement component was dropped, and emphasis was shifted on maintenance and betterment of existing roads.(20) The project became effective in August 1974 and all physical components were completed in August 1978, except for the construction of an office building which was not included in the original scope. This necessitated a two-year extension of the closing date. 8. The First Project had mixed results. Due to cost overruns, fewer pieces of equipment could be purchased than expected at appraisal and no spare parts were procured. The Government's recurrent budget had insufficient funds for maintenance, and loan funds for betterment were used to supplement the budget. Construction of the workshop and depot was virtually complete when the loan became effective and the corresponding loan funds were used to renovate the Ministry of Works building in Bujumbura and the Training 17 Loan 165-BE for US$4.8 million to improve to paved standards the Bujumbura-Muramvaya road. This project was completed in 1959. 18 Credit S11-BU, for US$380,000. 19 Credit 467-BU, US$5 million. 20 The Project Completion Report (Burundi-First Highway Project (Credit 467-BU), OED Report No.4582, dated June 27, 1983.) states (para 2.08) that the project consisted of: (a) E four-year highway maintenance Drogram, Including technical assistance to the Department of Roads and Bridges, encompassing staff training at all levels; procurement of maintenance, workshop and training equipment, spare parts, fuel and materials, and the construction of a mechanical workshop and storeroom at Bujumbura and of a small maintenance depot at Gltega; (b) conlitaniL services for preparation of a master plan for road development; feasibility studies and detailed engineering and updating the report for preparing the project; and (c) refinancing of Credit S11-BU. 5 School building in Gitega. In both Instances, construction was delayed and held up full disbursement of the credit for two years. Technical assistance, and the associated staff training, suffered from lack of suitable counterparts, poor staff continuity and discipline problems. In addition, training was also hampered by lack of funds, slow deliveries of materials, and delays In procuring equipment.(21) On the other hand, the road plan, the studies and the engineering were eventually completed, albelt with delays, and formed the basis for the Second and Third Highway Projects. All of the above could, in good faith, be attributed to the teething troubles of a first operation, Implemented under difficult conditions.(22) 9. While the First Highway Project was encountering the d'fficulties summarized above, the Second Highway Prolect was approved in i;178 (23) and encountered significant difficulties of its own, primarily in the construction of its major road. The Third Highway Prolect was approved in April 1981 and the major road financed under the Second began to fall in 1983. Since funds were not available under the Second for remedial works, additional financing was provided by amending the description of the Third Project in April 1984. Further aliocations for the same purpose were included in the Fourth Prolect, approved in April 1985 (cf. below, para 16). 21 A debate of form over substance led to a two-year delay in the procurement of equipment. While the Borrower Intended to disqualify the lowest bidder for tipper trucks on the grounds of lack of after-sales service, and to award the contract to another company it had had long and good experience with, IDA Insisted that the contract be awarded to the lowest bidder. It took twenty-eight months after the first bid was opened before IDA finally withdrew Its objection. 22 This was acknowledged In a March 25, 1983 note where OED summarized its review of the PCR and drew the attention of the Region to the following: (a) credit funds were extensively reallocated to uses not originally Intended; (b) significant cost overruns occurred and project components had to be cut back or to be financed by subsequent projects, by the Bank's Project Preparation Facility, and by additional UNDP grants; and (c) It was not possible to say with any certainty what the project's total cost was which, combined with the fact that there was no information on the actual impact of the project, put in question how the PCR could have calculated, as it did, a rate of return of 20%. 23 Credit 773-BU for US$14 million of February 1978. 6 II. THE SECOND HIGHWAY PROJECT (24) IDA Oblectives and Means for their Pursuit 10. IDA assistance to tho Burundi highway sector aimed at straightforward objectives: Impr-ve the classified network and strengthen road maintenance operations. The means were equally straightforward: (a) technical assistance (to help the Ministry of Public Works (MPW) carry out its tasks, and to train staff so that, over time, MPW could handle road planning, construction and maintenance on its own); (b) provision of maintenance equipment; and (c) financing of the betterment of road sections with an acceptable rate of economic return. The above objectives and means were incorporated into the First Highway Project. 11. The Secord Highway Project(25) was conceived along the same lines (PCR, para 2.12) and despite the fact that the construction of the major road component generated serious problems, progress has been made both in Institution-building and in staff training. The MPW organizational structure ha% been improved, and staff at various levels have been exposed to training oppo,*tjnlties (PCR, para 4.04). Institutional Improvement was largely due to the advisors financed by donor agencies and to the consultants financed by UNDP and IDA, who continued to assist the Government in implementing road improvement and maintenance programs, and in Introducing accounting and Inventory control systems (PCR, para 3.21). 24 The Project Completion Report (PCR) prepared belatedly by the Eastern and Southern Africa Regional Office (because Government provided parts of Its project completion report in February 1985 and the rest only in May 1985) is, on the whole, an adequate account of the preparation and Implementation of the Second Highway Project. The following two sections of the Project Performance Audit Memorandum (PPAM) summarize points discussed in greater detail in the PCR, find'ngs of the July 1985 OED mission to Burundi, and procurement and financing Issues discussed In PPAM Annex 1 (Abstract of Key Documents in the Prolect 25 The Second Highway Project was preappraised in November 1976 (PPAM, Annex 1, para A.1 ff.), appraised in February 1977, approved In February 1978, and became effective In July 1978. After a six month extension, the closing date was set at December 31, 1982 and the Project Completion Report Is dated June 28, 1985. 7 ImWomentation of Prolect Comonents 12. Planned and actual results for eAch of the five components constituting the project can be summarized as follows. Lal Construction of the Bulumbura-Ruaombo Road (65 km)(26) 13. Situated within the Ruzizi Valley, the road had an average daily traffic of 300-80 vehicles, depending on the section, a generally satisfactory alignment and poor surface condition. The sunken proflie, frequent flooding of the valley, and poor drainage made the road impassable after heavy rains. The road would be reconstructed to two-lane bituminous paved standards and several alignment improvements would shorten the route from 68 to 65 km. The proposed standards were based on a design speed of 80 km/h and a maximum gradient of 7%. The pavement would be composed of a natural gravel subbase and a cement stabilized base course with a double bituminous surface treatment on a 5.50 m width and a 1.50 m shoulder on each side (SAR, paras 4.03-4.04). A contract for an amount of US$10.2 million (about the same as the appraisal estimate), was awarded on September 19, 1978 to the the lowest bidder. The bidder had proposed a mechanically stabilized base, instead of the cement stabilized base provided for in the original design. The price advantage was small (about US$200,000) but, with IDA's agreement, the Government accepted the modification, partly because of the frequent cement shortages that Burundi had been experiencing. The construction period stipulated In the contract was 18 months Instead of the 30 estimated at appraisal (PCR, para 3.02). 14. Delays due to the Uganda-Tanzania war interrupted deliveries of equipment and supplies from Mombasa and Dar es Salaam. The contractor could not work regularly until January 1981 and his financial situation deteriorated. However, his overseas headquarters reorganized the local management in Burundi, provided more financial and technical support and by mid-November 1981 about 92% of the work had been completed (PCR, para 3.04). Government, with IDA agreement, made extensive changes to the scope 26 For details, please see PPAM Annex 1, paras A.13-A.35. 8 of work during contract Implementation (PCR, para 3.06).(27) Problems generated by the Uganda-Tanzania war led the contractor to submit claims for some US$3.5 million, but the Government did not accept that 'force majourel was applicable and refused to submit the case to arbitration (PCR, para 3.05). 15. Ir May 1982, the contractor went bankrupt and stopped working. He had completed all but 1.18 km out of the 85 km of the road. The Government did not pay the contractor's last bill (US$640,000) and cashed the performance bond (US$730,000). It then awarded a contract for US$130,000 to another contractor to complete the work. The supervising consultants had left the country and the work was supervised by the Government, which also financed the contract out of its own resources since there were no IDA funds remaining in the credit (PCR, paras 3.07-3.08). 16. At the beginning of 1983, the road started to fall. After a preliminary study, the Government Laboratory recommended remedial works distinguished Into tasks that had to be carried out at once and into tasks 27 Road shoulders were constructed with the same material as the base course so that the base course increased in width from 5.5 m to 8.5 m. The 5.5 m double surface bituminous treatment was replaced by a triple treatment 6.0 m wide. The shoulder width was reduced from 1.5 m to 1.25 m. The horizontal alignment was changed at three places over a total length of about 8 km, and the road grade was raised over about 23 km, resulting In additional earthworks. Drainage and other structures were also changed and a 100 m long retaining wall, not provided for in the original design, was built. 9 that could be carried out later.(28) in August 1983, the Government signed a US$4.4 million contract with the second contractor, who had completed the construction work, to carry out the priority rehabliltation work. IDA agreed to finance 70% of the contract's total cost and, since funds in the Second Credit had been exhausted, the Third Highway Project Credit Agreement was amended on April 4, 1984. The work was completed In August 1984 and further remedial work (estimated to cost US$1.5 million) Is being financed through the Fourth Highway Project, approved in April 1985 (PCR, paras 3.10-3.12). ta Imorovement of Classified Road Network 17. Under this component, the SAR envisaged: (1) the replacement of 21 wooden bridges (SAR, para 4.05 and Table 9); (1l) the stabilization of 6O,000m2 of steep grades (SAR, para 4.06 and Table 10); and (Ill) the Improvement of 57 km of low standard gravel roads and of 370 km of earth roads (SAR, para 4.07 and Table 11). Total estimated cost was US$3.9 million equivalent. 18. In June 1978, the Government proposed a revised program which was approved by IDA and had an estimated cost of US$4.95 million equivalent (PCR, para 3.14). The program consisted of works to be carried out by force acount and by contract. 28 The question Is: Were the failures due to the choice of the mechanically stabilized base proposed by the contractor (instead of the colent stabilized base provided for In the original design), or were they due to poor compaction? The record contains no information on the basis of which a straightforward answer could be given. The Bank's Procurement Unit In Its June 28, 1985 note (para 26 below) states that the mechanically stabilized base was an unsatisfactory alternative to the originally proposed cement stabilized base solution. On the other hand, all Supervision Mission Reports consistently stated that the performance of the contractor and of the supervising consultant was satisfactory. When the road began to fall, the consultant proposed Immediate corrective action which, according to him, would have prevented further failures. Immediate action was not taken because the contractor had, In the meantime, gone bankrupt. The nature and extent of the remedial works are described below (PPAM, Annex 1, Para A.29). The chronological account of road failures and of subsequent corrective measures is given in PPAM Annex 1, paras A.13-A.35. 10 19. Works by Force Account: Target: Upgrading (by means of grading and partial regravelling) of 289 km of earth tracks to improved earth road standards (PCR, para 3.15(a)). Results: 207 km of tracks upgraded (72% of the planned total (PCR, para 3.16). 20. Works by Contract: Targt: (1) Upgrading of a 13.5 km section of the Bujumbura- Muzinda road to improved earth road standard; (II) upgrading of three sections of RIG 6, RIG 7 and RIG 11, totalling 136 km to low gravel road standard; (ill) replacement of 22 wooden bridges; and (iv) stabilization of steep grades on RIG 6, totalling 63,000 m2 (PCR, para 3.15 (b)-(e)). Results: Only 22.6 km of RIG 6 were upgraded (instead of a total of 149.5 km), and only 10 bridges were replaced (instead of 22), about 68,000 m2 of steep grades were stabilized but no surface treatment was applied. Targets could not be achieved(29) because preparation dragged on for several years, and meanwhile prices went up. The Government was slow In carrying out routine administrative business, probably because of lengthy bureaucratic procedures and lack of staff (PCR, para 3.20). Consultants were selected in March 1979 (one year after the start of the project), preparation of the economic study and of the designs took another year (June 1979-July 1980), and selection of the contractor took another year (September 1980-September 1981). 1ol Consultant Services 21. These included (1) construction supervision of the Bujumbura-Rugombo road; (1l) detailed engineering and construction supervision of road improvements on the classified network; and (ill) assistance for the continuing Improvement of road maintenance operations (SAR, paras 4.02(111) and 4.08-4.10). 22. The failure of the Bujumbura-Rugombo road provoked long and acrimonious exchanges between the MPW and the consultant who supervisid the 29 When the time came for works execution to begin, prices had gone up and in order to stay within the available financing, the Government awarded a US$2.59 million, 12-month contract encompassing a reduced scope of work. The contractor mobilized immediately and finished work satisfactorily in June 1982. However, during the contract execution, prices continued to rise and work quantities were further reduced. On the other hand, a double surface treatment was applied on the main streets of Bururi, although this work was included neither in the orlgina! nor In the revised work program. 11 construction.(30) The Ministry maintained that responsibility rests with the consultant. The consultant accepted responsibility for identifying mistakes, pointing them out to the contractor, and following up on the repairs that the contractor would effect. However, since the contractor went bankrupt 30 The two and a half year correspondence, whose principal documents are listed below, suggests that both sides are resolved to stick to the positions they took at the beginning: September 1982: Consultant to Ministry Final report on the Bulumbura-Rugombo Road 19 February 1983: Ministry to Consultant Letter stating non-acceptance of Final ReOort 19 February 1983: Ministry to Consultant Letter refusing Davment of invoices and reauesting that consultant send to Burundi a mission to advise on remedial action 18 March 1983: Consultant to Ministry Letter exolaining consultant's Dosition 19 April 1983: Ministry to Consultant Letter relecting the exolanations 14 April 1983: Consultant to Ministry Letter summarizina the results of the consultant's March visit to Burundi 7 July 1983: Consultant to Ministry Letter and attachment of a geotechnical report by a member of the consultant's staff and offer to undertake suDervision of repair work. Drovided consultant is entrusted with works supervision of the Droposed Ruaombo-Frontler road. 4 November 1983: Ministry to Consultant Letter reauesting the consultant to Inform the Ministry of the measures the consultant gronoses to counterbalance the exDenses undertaken by the Government to reDair the road, 14 July 1984: Ministry to Consultant Letter reoeatina the substance of the November 4. 1983 letter. 8 August 1984: Consultant to Ministry Letter relecting accusations of resoonsibility for the failure of the 2 January 1985: Ministry to the World Bank Letter reauesting the Bank's assistance in Dersuading the consultant to contribute financing for the reair of the road. 12 there was no way to make him carry out the necessary repairs. The altercation is complicated by the fact that IDA supervision missions consistently reported that the consultant's performance was satisfactory.(31) 23. The consultants who did the engineering design and works supervision for road improvements on the classifled network performed well (PCR, para 3.37), and so did the technical assistance staff, financed by IDA and UNDP, who assisted the Government in implementing the road improvement program by force account and in executing routine road maintenance operations (PCR, para 3.21). 1A1 Road Maintenance Eauloment 24. The First Highway Project determined appropriate levels of mechanized road maintenance and the Second Project provided for the replacument of 42 Items costing an estimated US$1.85 million (SAR, para 4.11 and Table 13). The Government procured 40 Items at a total cost of US$1.64 million (PCR, para 3.22). The July 1985 OED mission received the impression, from the general condition of the roads seen in the course of extensive field visits, that MPW was making good use both of the equipment and of the technical assistance, financed under the project, for the improvement of maintenance operations. Lal Imorovement of the MPW Soils and Materials Laboratory 25. The laboratory which existed at the time of appraisal was unsuitable, poorly equipped and with inexperienced staff. The project envisaged construction of a new building, procurement of laboratory equipment, and technical assistance for staff training (SAR, para 4.12). The component was executed satisfactorily and the new laboratory started operating at the beginning of 1983 (PCR, paras 3.23-3.24). The Bulumbura-Rugombo Road: Procurement. SuDervision and Financing issues 26. On June 28, 1985, the Bank's Procurement Unit sent its comments on the draft PCR to the Region in a note which strongly suggests that construction of the Bujumbura-Rugombo road displayed unsatisfactory performance by all parties concerned. The points made in the note, with which the audit agrees, are summarized in the following paragraphs. 31 PPAM Annex 1, paras A.7, A.8, A.11. 13 27. The first contractor proposed a questionable alte-native to cement stabilization and agreed to finish the work one full year faster than envisaged by the appraisal team. 28. Wh!le the contractor was encountering difficulties beyond his control, he was directed by ME to follow major design changes. The contractor incurred financial losses, but was not allowed to submit his case to arbitration. He went bankrupt after having completed more than 98% of the work, was denied payment on his last bill and the performance security was called. It would appear that the contractor's rights and privileges under the contract may have been abused by the MPW and this issue Is not addressed in the PCR.(32) 29. The suoervising consultant had prepared the original road design and specifications. Neverthless, he agreed to a technicalty questionibie alternative to cement stabilization, and appears to have been lax In controlling laboratory testing and supervision. 30. Monitoring by IDA staff was not what it should have been. Changes to Important design features were agreed after %opralsal, the mechanical stabilization solution proposed by the bidder was agreed to by IDA, there was a two-year gap in supervision while the bulk of the work was carried out, and financing of the remedial work was discussed and agreed upon In 32 The Region notes: 'The General Conditions of Contract stipulate that the time for completion may be adjusted in a case of force majeure; they do not allow for any compensation. The contractor, as all other bidders, was aware of this important clause and accepted it when he signed the contract. That Is why the Government did not allow the case to be submitted to arbitration and hence, the Issue was not addressed in the PCR.* 14 an unorthodox manner.(33) Prolect Cogt. Financing and Reestimated Rate of Return 31. At appraisal, total prolect costa were estimated at US$24.0 million net of taxes, with a foreign exchange component of US$18.4 million or 70% (SAR, para 4.14). Financing was to be provided by an IDA Credit of US$14.0 million, a BADEA loan of US$6.1 million, a grant from the Federal Republic of Germany of US$0.80 million, and a UNDP grant of US$0.9 million. External contr'butions would cover 100% of foreign costs and 60% of local costs not of taxes. The remaining 40% of local costs (about US$2.2 million equivalent) would be covered by Government (SAR, para 4.16). 32. In mid-1985, total orolect costs are estimated at US$31.1 million (PCR, para 3.27). The main cause for cost increase is the repair work that had to be done on the Bujumbura-Rugombo road and which would be financed under the Third and Fourth Highway Projects. The cost of other components remained more or less within the limits of the appraisal estimates and external financing was provided according to plan. 33. At appraisal, the project's rate of economic return was estimated at 17% (SAR, paras 5.01 ff). The PCR reestimated the rate of return for each 33 MPW was known to be short of staff experienced enough to supervise closely the execution of a major contract. In this sense, IDA supervision missions became twice as important and necessary as they wouid otherwise have been. Instead of increasing the frequency of such missions, IDA did not send any missions at all over a period of two years, precisely during the time when the bulk of the construction work was being done (PCR, para 7.02). IDA missions that visited Burundi later, have stated that both the construction and the supervision work were Osatisfactorym (PPAM, Annex 1, para A.8) but annexes of the Supervision Reports contained data which contradicted this assertion (PPAM, Annex 1, paras A.9-A.10). When it became obvious that extensive remedial works would be needed, financing was approved by the project officer in the field, with no subsequent confirmation to the Government from IDA Headquarters, and commitments were made when the remaining funds in the Credit allowed no such latitude (PPAM, Annex 1, para A.33). Eventually, IDA came up with a legally satisfactory formula for justifying the extra expenses (PPAM, Annex 1, paras A.34-A.35) and the necessary financing came from the Third and Fourth Projects which, Instead of paying for repairs of work badly done, could have paid for new investments. 15 project component (paras 6.01-6.18) and concludes (para 6.17) that the comparison with appraisal estimates yields the following results: (%) Agoralsal ERR Recalculated ERR High LDa Bujumbura-Rugombo Road 16 14 11 Bridge Replacement 12 12 7 Grade Stabilization 12 14 9 Maintenance Program 20 27 18 Clas. Net. Improvements 15 23 16 Total Project 17 17 12 The recalculated rate of return for the Bujumbura-Rugombo roud Includes the additional cost of US$4.6 million and US$1.5 million, financed under the Third and Fourth Highway Projects respectively, and these extra expenditures would bring it down from 16% (estimated at appraisal) to between 14 and 11%, depending on traffic growth patterns. On the strength of the PCR assumption (para 6.03), that the opportunity cost of capital in Burundi ranges between 10-12%, the project would be economically justified. Sustainability of Project Benefits 34. Apart from road user savings to be derived from Infrastructure improvements, project benefits were expected to arise out of staff training and institution building (PCR, para 4.01-4.04). The project assisted in the Improvement of MPW organization and contributed to staff training at various leveis of the Ministry. These are positive accomplishments and as long as further macroeconomic difficulties do not prove insurmountable (paras 37-41 below), benefits would be lasting. This should not be Interpreted to mean that MPW now has a full complement of trained and experienced staff with whom It can carry out all the planning, supervision and maintenance work that the road network requires. As the PCR notes (para 4.04), expatriate technical assistance and consultants are still in MPW and all indications iuegest that their presence will continue to be needed for a decade or more. 35. The July 1985 OED mission to Burundi noted that, contrary to what Is observable in many other developing countries, collaboration among the national and expatriate staff in MPW Is easy, comfortable and free of either personal or professional frictions. This does credit to both sides and assuming that MPW continues to attract the same high caliber of expatriate staff, the country stands to gain from the presence and work of such experienced Individuals who contribute much, as the PCR has remarked (para 8.02), to the crucial area of staff training in road maintenance. 16 Ill. FINDINGS AND CONCLUSIONS 36. The First Highway Project was not audited In depth by OED because It marked the beginning of Bank Group assistance to the Burundi transport sector and more time was needed for findings to coalesce into experience. Auditing the Second Project has allowed sectoral issues to be considered within the macroeconomic context and permitted the review of IDA assistance over a longer period of years. Macroeconomics 37. Burundl was not advantageously placed when the First Project was approved In 1974 but, ten years later, It Is in even more difficult straits.(34) In 1983, the estimated GNP per capita amounted to US$240 (and this places the country among the poorest In the world). Educational and training needs are enormous (75% of the adult population Is Illiterate). Services are severely limited (only 5% of the population has access to safe potable water and to electricity). The population problem Is horrendous (Burundi Is the second most densely populated country in Africa and at current growth levels, Its population will treble in 35 years). Food production Is barely keeping up with population increase, drought years lead to near famine (as they did in 1984), and pressure on the land is leading to alarming deforestation and erosion. The principal source of export earnings continues to be coffee (whose long term price Is expected to fall), there are no exploitable mineral resources, and the manufacturing sector Is minuscule. 34 This Is made clear In the 268 pages of the Burundl Economic Memorandum (December 1984) which have yielded the conclusions summarized below. 17 FInance 38. The various forms of demand generated by a rapidly multiplying population and the expanding civil service which, as in many developing countries, Is an employer of first resort, have had, over the years, a significant effect upon the budget. In 1982 the current surplus declined to one-tenth of its 1978 level and disappeared completely In 1983. Wages and salaries make up a large part of the government's current expenditure but new sources of revenue have not been sought with appropriate energy. Given the shortage of educated staff, Institutional capacity is not what It should be. The public investment program reflects the inexperience of the civil service and many of the projects it contains are of debatable economic priority.(35) 39. The balance of payments has been deteriorating since 1977 and the current account deficit reached 12% of GDP In 1982. Net foreign financing could not cover such deficits and foreign exchange reserves have been drawn down. The country cannot afford to borrow from commercial sources, but even the concessional assistance it has been receiving from International and bilateral aid agencies has increased public debt to the point where concern Is warranted. During the 1983-87 Fourth Plan period, it is expected that public debt service as a percentage of exports could surpass 25%: this Is disturbingly high for a country that depends so heavily on one export crop (coffee) whose price seems to be on a declining trend. Investments and Maintenance 40. In view of the need for economically justified projects, of the absence of domestic ,asources for investment, and of the Government's 35 The Region notes: OThe statement on the public investment program Is now out of date. Progress has been made in the context of the preparation of the Structural Adjustment Credit and the overall composition of the PIP is now consistent with the country's development priorities." 18 Inexperience in project preparation and evaluation, the following seem to apply: Financing for new investments would have to come from some aid agency. New Investments must respond to genuine economic needs. Maintenance of existing facilities would also have to be funded, directly or indirectly, by some aid agency. Consequently, aid agencies ought to coordinate their activities, and to the extent possible avoid financing *prestige" or "poiltical" projects. Financing projects of dubious validity is not only a waste of scarce capital resources but, also, a claim on future aid resources since the same or some other agency would have to finance the grehabilitationO, ObettermentO, OupgradingO or "improvementO of a facility that was not needed in the first place. 41. IDA was aware of this rationale,(36) and so was the Federal Republic of Germany,(37) when, during negotiations of the Second Project, they questioned the justification for the construction of the Gihofi-Gltega and the Bujumbura-Rutovu roads. The fact that IDA did not take any action 36 Please see PPAM Annex 1, para A.3(f): the issues Paper (dated March 16, 1977) for the Second Highway Project notes that the Government proposed to construct, with German and Chinese financing, two roads which were not economically justified. 37 Please see PPAM Annex 1, para A.4(c): during negotiations of the Second Highway Project, the German Government representative pointed out to the Burundian delegation that the economic analyses of the Gitega-Gihofl road did not show a favorable rate of return and that it would therefore bu difficult to justify financing of the road to paved standards. 19 when both of these roads were constructed(38) suggests a failure to perform as the technical and economic advisor to a member country that, perhaps out of unfamiliarity with proper economic evaluation methods, was acting contrary to its own Interests. 42. IDA assistance to the highway subsector began with an engineering credit in 1970 (S11-BU) which financed a study of highway maintenance needs. The First Highway Pro!ec of 1974 arose from the recommendations of this study and emphasized strengthening of road maintenance and staff training. The Second Highway Prolect of 1978 continued with the strengthening of maintenance operations and staff training and financed improvements of selected sections of the classified network. As noted in this audit, physical work on the Bujumbura-Rugombo road was done Indifferently and repairs had to be financed through the ILd and Fourth HighWay ProIects of 1981 and 1985 respectively. The last two projects continued with strengthening of maintenance operations, with staff training, and with selective Improvement of secondary and tertiary roads. Even after making allowances for the optimism of supervision reports on the Second Project, the July 1985 OED mission gathered the impression, after field visits and conversations with MPW personnel, that physical work under the Third and Fourth Projects is proceeding more satisfactorily than it did under the Second. Staff training and institution building also appear to be producing results which, modest though they continue to be, are still in the right direction. In sum, IDA and the Government seem to have drawn the appropriate lessons from the First and Second Projects and to be focussing on the crucial Issues of maintenance, staff training, and investment prioritization (SAR, Fourth Highway ProIect. April 1985, paras 1.45-1.50). However, neither the Government nor IDA has been prepared to tackle squarely the crucial issue of land transport connections between Burundi and the Indian Ocean. Access to the Indian Ocean 43. Landlocked Burundi must have reliable corridors to the sea: It 38 IDA was not legally obliged to take any action at all. During negotiations of the Second Highway Project, the Government undertook to *consult with the Association* before it would decide to proceed with actual construction. Section 4.02 of the Credit Agreement contained the following bland statement: *The Borrower shall: (1) not later than April 30, 1978 prepare and furnish to IDA a road investment program for at least five years and exchange views with IDA thereon: and (1l) adopt such prcgram and from time to time review its execution with IDA" Both roads were eventually built (PPAM, Andex 1, para A.10 and PCR, Annex 10: ComDliance with Malor Credit Covenants). 20 can neither live on what It grows, nor develop without imports of supplies and equipment. The two corridors It uses are through Tanzania and through Uganda and Kenya (cf.above, para 3, footnote). The problems created for Burundi by the unreliability of these corridors have been known for decades but although they have been extensively debated and documented,(39) nothing much has been done to alleviate a sltuation(40) which is not as intractable as may be supposed. 44. The quality of transport services in Kenya, Uganda and Tanzania was not ideal when the East African Community was still In operation,(41) and It nas not visibly improved since. The donor community, with the Bank Group frequently taking the lead, have extended significant volumes of financial assistance, In the form of both project and sector loans, so that transport users in the three countries might receive better service. Many large projects were justified in part by means of assertions that some of the traffic to be served would be transit traffic from or to Rwanda, Burundi, 39 A July 24, 1978 Bank document (Burundi: Transoort Sector Memorandum) describes these problems In exhaustive detail (pp. 9-11, 15, 21-26, and Tables 11, 12, 13 and 14) and emphasizes the urgency attached to the speedy resolution of the transit difficulties. Shortly after the publication of this memorandum, transport services between Burundi and the Indian Ocean were virtually suspended for the duration of the Tanzania-Uganda war and this was the root cause for the problems encountered In the construction of the Bujumbura-Rugombo road. 40 Similar problems with access to the Indian Ocean have been encountered over the years by neighboring Rwanda. The Staff Appraisal Report for Rwanda Sixth Highway Prolect (dated November 6, 1985) devotes an entire section to international transport (paras 1.09-1.12) and employs complicated syntax to conclude that nothing much has happened. Part of para 1.11 reads as follows: *Concerted efforts were launched by the landiocked and transit countries and other Interested parties to alleviate the International transport problems of landlocked countries. These and other developments were reviewed in a World Bank report whose preliminary conclusions Indicate that while the various initiatives undertaken fell short of their expected results, good progress has been made in a number of areas. With respect to each of the corridors, International consultations and cooperation have become more structured.4 41 See, for example, the Project Performance Audit Report on East African Community-Third Railway Prolect (Loan 674-EA) (OED Report No. 4533, dated June 3, 1983). 21 Malawi or Zambla.(42) However, in more than fifteen years of Bank Group presence in East Africa, no forceful action(43) has been taken that would no longer request or encourage but would plainly oblige the coastal recipients of aid to facilitate transit traffic destined to benefit their landlocked neighbors. The donor community, which commands extraordinary Influence if only it agrees to act in unison, ought to realize that preliminary conclusions and structured consultations (pare 43 above, footnote) can no longer serve as substitutes for action. Such atlon ought to be taken by the donor community on behalf of landlocked c6untries which do not have the means to oblige their neighbors to provide them with a better service. 45. Considering the size of the financial assistance extended by the donor community to Uganda, Kenya and Tanzania, it Is inconceivable that if aid agencies had decided to act together they would have been unable to persuade these three countries that shipments for landlocked countries ought to receive special treatment and under no circumstances ought to be held up because of real or alleged formalities at ports, at points of 42 More specifically: the justification of improvements to the Nairobi-Mombasa road, to the port of Dar es Salaam, and to the Tanzania Railroad are always accompanied by lengthy expositions of the benefits for landlocked countries to the west. 43 Studies, such as the one prepared by the Bank in 1980 on the "northern corridorO or the one prepared by UNCTAD and covering the transit needs of Burundi, Rwands and eastern Zaire, do not qualify as forceful action (cf. Staff Appraisal Report on Burundi-Fourth Highway Prolect, April 1985, para 1.09). Aid recipients may put to suboptimal use the aid they receive as long as the loss of benefits affects their own territory exclusively. But when they receive funds that are, at least in part, expected to help neighboring countries survive and prosper and, through negligence, inefficiency, procrastination, or worse, prevent the anticipated benefits from materializing, then the donors not only have the right but the obligation to switch from dialogue to strict conditionality. After years of fruitless discussions and studies minutely elaborating on the obvious, the time has come for the Bank to take the lead for the resolution of what is a regional problem that has proven to be Insoluble by the Individual countries Involved but could be solved through the application of outside pressure that so far has been avoided, probably for the sake of preserving amicable bilateral relations. 22 transshipment, or at the frontlers.(44) IDA Assistance to the Highway Sector: 1970-1985 46. Throughout this period, IDA assistance was correctly focussed on the twin objectives of improving the classified road network and on strangthening maintenance operations through staff training, technical assistance and provision of mechanical equipment. 47. Physical works execution encountered difficulties due in unequal parts to cumbersome Government procedures (PCR, para 3.20); to lack of experienced staff; to imperfect supervision by consultant and IDA staff (PCR, paras 3.36 and 7.02); and to political conflicts In neighboring countries which Interrupted, for prolonged periods of time, the arrival of needed supplies and equipment in Burundi (PCR, para 3.04). 48. Staff training and gradual institution building, for which the continuing presence of consultants and technical assistance staff will be Indispensable for a number of years to come, (PCR, paras 3.25 and 4.04), as well as better supervision by IDA (evident from the somewhat improved implementation of the Third and Fourth Highway Projects), are beginning to remove the factors which, in the past, had been largely responsible for poor Implementation results. 49. Examined within the framework of the highway sector alone, and assuming that further macroeconomic difficulties will not prove Insurmountable, the sustainability of project benefits appears to be encouraging. Future projects may well continue emphasizing the strengthening of road maintenance, the selective improvement of genuinely high priority sections of the classified network, and further assistance to staff training efforts. 50. The major outstanding Issue Is how to Improve access to the Indian Ocean. This could only be resolved through a combined effort of the donor community which, by pooling the influence it has over Burundi's neighbors, may persuade them to provide preferential service for good transiting through their territories on behalf of landlocked countries in the interior of Eastern Africa. 44 The Region has the following comment: 'We do not believe that It Is realistic to assume that the Bank and the donor Community can persuade the transit countries to provide better transport services to their neighbors than to their nationals. We do not think it Is appropriate either and we should not give false expectations to the landlocked countries through such statementsO. 23 ANNEX -1 PROJECT PERFORMANCE AUDIT MEMORANDUM BURUNDI: SECOND HIGHWAY PROJECT (CREDIT 773-BU) ABSTRACT OF KEY DOCUMENTS IN THE PROJECT FILE Preanoralsal A.1 Preappralsal was carried out one week after the November 1, 1976 coup.(45) ADpraisal and Issues Paner A.2 Appraisal was done In February 1977. Project components, with estimated costs, for which Government requested assistance and which could 45 The preappralsal mission report lists the following tentative project composition and costs: (a) Construction of the Bujumbura- Cibitoke- Rwanda/Zaire Border (US$22 million), or Construction of the Bujumbura- Cibitoke Road (US$13 million) whose *economic justification rests largely on the presupposition of a cement factory proposed for construction at Cyangugu in Rwanda. Without the cement traffic, construction of the 27 km section north of Cibitoke would not be economically viable'. (b) Continuation of the ongoing Highway Maintenance Project (US$5 million); (c) Renovation and reconstruction of obsolete bridges (US$1 million); (d) Paving of steeply graded road sections (US$0.5 million); (e) Continuat:on of technical assistance for highway maintenance (US$1 million). 24 be eligible for IDA financing were as follows: (US$ 000) Iotal Forelgn (A) MAIN ROAD CONSTRUCTION Bujumbura-Klhungwe (24 km) 3,964 2,577 Klhungwe-Cibitoke (31 km) 5,694 3,702 Cibitoke-Border (20 km) 3,629 2,359 (B) IMPROVEMENT OF ROAD NETWORK Bridge replacement 1,508 905 Grade stabilization 838 545 Implementation of investment program proposed by consultant study 2,568 1,669 (C) CONSULTING SERVICES Supervision of (A) 804 643 Study and Supervision of (B) 503 402 Continuation of technical assistance 1,005 804 (D) MAINTENANCE EQUIPMENT 1,787 1,608 (E) IMPROVEMENT OF MOW LABORATORY 200 170 (F) CONTINGENCIES Physical (10% on A-E) 2,250 1,541 Price 10% on A 1,463 949 15% on B-E 1,519 1,117 IIAL 24,732 18,991 A.3 The Issues Paper (dated March 16, 1977) lists the following as the main issues: Maintenance Budget The 1977 road maintenance budget amounted to US$900,000 and about half of It was used to maintain urban roads In Bujumbura. The First Highway Project is being used to supplement day-to-day recurrent expenditures for equipment operation Instead of to build up an initial stock of materials, spare parts and fuel as originally intended. IDA should insist on a covenant In the Credit Agreement requiring the Government to increase budget allocations for road maintenance to an adequate level, which would be about $1,000 per km (up from the current US$250 per km of primary roads). A further covenant should require the Government to distinguish in the budget and accounts between expenditures on municipal roads and the rural road network. 25 Length of Main Road Construction Whether this will stop at Cibitoke or go beyond It to the Rwanda border will depend on the transport of cement to Bujumbura from the projected factory at Cyangugu, 8 km across the border on Rwandese territory. Although there Is agreement between the Peoples' Republic of China and Rwanda for the construction of this factory, it was Impossible to obtain a firm date for the start of construction and its completion. Co-financing The programmed IDA funds of US$10 million are not sufficient to cover the foreign exchange costs. Since a part of local costs ought to be financed as well, In view of Burundi's financial situation, total necessary external financing would amount to US$22.3 million. Continuation of UNDP Technical Assiatance Technical assistance for road maintenance financed under a UNDP grant and included in the First Highway Project has shown good results, and all parties concerned would like to continue this assistance. However, future UNDP allocations are not sufficient to cover the full scope of assistance required. Government has therefore proposed to use part of the proposed IDA credit for payment into the UNDP fund as cost-sharing for the continuation of the technical assistance and the issue is whether this Is administratively possible. Continuation of German Technical Asslatance The German bilateral aid has provided technical assistance over a 6-year period to train mechanics and to improve the capacity of the Roads Department central mechanical workshop, which maintains the road maintenance equipment. The program is scheduled to end in late 1977, without leaving behind a satisfactorily functioning workshop because counterparts are not yet sufficiently trained and It Is feared that If technical assistance is not continued, all equipment, including that procured under the IDA projects, will rapidly be Immobilized because of lack of adequate maintenance. If Germany does not extend Its assistance beyond 1977, the IDA project should provide for it, or the Association should have Government's assurance that it will obtain assistance from other bilateral donors. Investment Program for Paved Roads Government presented the Appraisal Mission with an ambitious program to upgrade earth roads to bitumen standards, the justification of which is, in some cases, questionable. The consultants who have prepared the road Investment program have pointed out in their report the possibility of overinvestment, In particular for the Gitega-GIhofl and the Bujumbura-Rutovu roads. However, since Germany and the Peoples' Republic of China have committed themselves to financing construction of these roads, IDA's opportunities for discouraging Government from 26 overinvestment appear to be limited.(48) Negotiations A.4 Negotiations regarding a US$14 million credit were held from December 5-9, 1977 and the Minutes of Negotiations (dated December 27, 1977) 46 The draft President's Report, Staff Appraisal Report, and Development Credit Agreement were submitted for distribution to the Bank's Executive Directors under a note (dated October 10, 1977) Illustrating how a firm stand may be transformed into elastic action. The essence of the relevant paragraphs Is as follows: Para 3:. During the Decision Meeting, IDA resolved to oppose firmly, on the grounds of potential misuse of scarce resources, the Government's intention to build two partially competing roads: the Bujumbura-Rutovu Road (financed by the Peoples' Republic of China) and the Gitega-GihofI Road (financed by the Federal Republic of Germany). Para 4: Germany also has doubts about the economic justification of the road it proposes to finance. In view of frank discussions with the Government over the past few months, IDA will no longer Insist (as proposed In para 10 of the Decision Memorandum) that one of the two roads be dropped. It will be sufficient if the Government prepare and submit to IDA, by end March 1978, a road Investment program, exchange views thereon with IDA, and from time to tf review with IDA any modifications made to it. Par as 5-7:, The Cibitoke-Rwanda Border section of RN5 would be justified only if a cement factory and an access road are built in Rwanda with Chinese aid. Cement traffic to Bujumbura could be transported via Zaire, assuming that a Zairian road is improved with German aid. It Is proposed that an 8 km road section in Rwandese territory be financed by Burundi with resources provided by the Second Highway Project on the grounds that this will contribute to regional cooperation, that Burundi needs the cement, and that Rwanda has not included this section in its own road Investment program. 27 record, Inter alla, the following matters: Road ConStruction Component The delegation of Burundi stated that (1) Burundi would not finance the construction of the Rwandese Border-Ougarama section of the Vibitoke-Bugarama Road and suggested that this be included in the proposed Fourth Highway Project in Rwanda; (II) the construction of the Cibitoke-Rwanda Border road section was justified even without the transport of cement and that the consultants had systematically underestimated the benefits from transport of tea, tourism and tea production.(47) Financing Plan BADEA was Interested in participating In the project and would send an appraisal mission to Burundi In January 1978 which would help determine the terms and exact amount of BADEA participation. CongtruCtiol of the Gltega-Glhofl Road The repretintative of KfW pointed out to the Burundian delegation that the feasibility studies did not show a favorable economic rate of return and that consequently It would be difficult for KfW to justify financing construction of the road to paved standards. The Burundlan delegation replied that the Government wanted to make both GihofI and Gitega more important administrative centers and that a road connection would facilitate development of the surrounding areas. IDA representatives said that construction of both the Bujumbura-Rutovu and the Kitega-Kihofi roads would lead to overinvestment and would put a heavy burden on the limited resources for road maintenance. The Burundian delegation said it would consult with the Association before it would decide to proceed with the construction of the Gitega-Glhofl road.(48) Road Maintenance Budget The Burundian delegatirii confl*med that the budget of the Ministry of Public Works included the equivalent of US$2.7 million for January-December 1978. IDA would be Informed as soon as this amount had been approved by Government. 47 Once again, IDA showed elasticity: It reviewed the consultant's economic analysis of the consultant's study on the Bujumbura-Rwanda Border Road and agreed that construction of a two-lane bituminous road was justified up to Rugombo, about 10 km beyond Cibitoke. 48 The record contains no indication that such consultation ever took place. Annex 5 of the July 22, 1982 Supervision Report noted that construction of both the Bujumbura-Rutovu and the Gitega-GIhofl roads was underway. 28 Credit Signature and Date of Effectiveness A.5 The Credit was signed on March 29, 1978 and became effective on July 26, 1978. Project components in major groups and the corresponding estimated costs were as follows: Estimated Total Cost (Net of taxes, including contingencies) (US$ million) (A) Main Road Construction 12.90 (B) Improvement of Road Network 4.60 (C) Consulting Services 4.30 (D) Maintenance Equipment 1.85 (E) Improvement of MPW Laboratory 0.32 Toa1 23L97 Prolect ImDlementAtion A.6 The project started out by making good progress. The A2ril 6. 1979 SuDervision Renort states that all components were well underway, that latest cost estimates were within the appraisal estimates, and that disbursements were faster than estimated. However, the Report notes that the war in Uganda had closed Burundi's access to Mombasa, leading to acute fuel shortages and supply difficulties of materials such as cement and steel. A.7 The August 9. 1979 Supervilson Report notes the emergence of problems. Due to a severe shortage of fuel, stemming from the war in Uganda, almost no physical progress had been made since February 1979 and the project was about four months behind schedule. Due to sharply increased prices of fuel, cement, etc., estimates of main road construction had risen about 35% above the initial contract cost. Technical assistance and training of counterparts continued to be satisfactory, although somewhat hampered by the curtailment of maintenance activities due to the fuel shortage. Supervision of the rather limited main road construction work Is satisfactory. A.8 The January 5. 1982 SuDervision ReDort contains the findings of a supervision mission that visited Burundi after a supervision hiatus of two years (from November 1979 to November 1981).(49) The report goes into considerable detail concerning events that took place In the Interim and 49 The record does not contain any explanation why the project was not supervised at all during the period when most of the construction work was taking place. 29 these can be summarized as follows: Sugervlalon Renort: Section 6 *Implementation of project Is proceeding generally satisfactorilyO. The contractor has completed 92% of the RN5 works. This component may be completed bw early 1982. Cost overrun in IDA's participation may be absorbed by the *UnallocatedO Category of the Credit. Maintenance of completed works done manually and satisfactorily by MPW brigades paid by the contractor. Supervision of works by the consultant is good. Earth road Imorovements by contract have been considerably reduced from the initial 140 km to about 76 km. Work started in October 1981 with a 12-month contractual period and the completion of this component will delay credit closing date from end June to end Dectmber 1982. Road Imorovements by force account (290 km) proceeding satisfactorily and close to completion. Technical assistance to help with the implementation of the manual and mechanized road maintenance operations and for the administrative department Is adequate. All road maintenance eauloment to be procured under the project is in the field. The three buildings of the new MPW Laboratory will be completed within three months and all equipment has been received. Technical assistance for the laboratory will be provided by the French Government. The Credit will be totally disbursed by December 31, 1982, six months later than scheduled. Budgetary allocations for maintenance during the first half of 1981 were adequate but were reduced by 16.7% during the second semester. Supervision Renort: Annex 1 Paras 2-8 describe the problems encountered up to end 1981 In the construction of the Bujumbura-Rugombo Road. Para 2: The contractual date for starting the works was November 26, 1978 but shortage of fuel and lack of cement delayed commencement. Contractor unable to complete camp Installation and equipment mobilization before March 1979. Between March and June 1979 shortage of fuel and cement was such that no works could be carried out. Situation improved In July and contractor started work on July 17. The Ministry of Works approved an eight-month extension of the contract period to January 31, 1981. 30 Para 3: At the beginning of 1980, only 25% of the works had been completed. Problems In the supply of fuel, cement and bitumen arose periodically thereafter due to causes beyond the contractor's control (mainly economic and political troubles in the neighboring countries). The contractor's financial situation became difficult and project management was reorganized, Contractor never stopped work and at the end of 1980, 50% of the works had been completed. The Ministry approved a second extension of the contract to December 31, 1981. Para 4: Beginning in early 1981, supply of materials improved considerably althouOh never reaching an adequate level. Project management obtained more economic and personnel help from the contractor's headquarters. Work performance Improved drastically and by November 1981, about 92% of the works had been completed. The quality of the works Is good. At the current pace, contractor should complete works by December 31, 1981 as scheduled. Para 5: The contractor has verbally informed the Ministry of Works, the supervising consultant and the Supervision Mission of his Intention to submit a claim to the Government for approximately US$3.5 million equivalent for the periods of total and partial paralysis, equipment immobilization, and overhead costs. The Ministry of Works will not consider this claim, alleging that the contract states that contractor will be responsible for an adequate and timely completion of the works even in the case of *force majoure. In case the claim should be accepted, financing could not be provided under the Credit due to lack of funds. Para 8:e Supervision of works Is carried out by a consultant whose staff is performing satisfactorily. The quality of supervision Is good. A.9 The July 22. 1982 Supervilson Report notes (Section 2) that this is a problem-free project with an uImproving* trend. The main points of Section 6 read as follows: Bulumbura-Rugombo Road Reconstruction Is 99% complete. An Increase In Government's participation will be necessary to cover a cost overrun of some US$0.3 million 31 Imorovement of Classified Road Network By end 1981 the mechanical brigades had regravelled 217 km of secondary and tertiary roads out of the 371 km scheduled. Earth road improvements and bridge reconstruction on RIG 6 and RIG 7 (34 km compared to 57 km scheduled) by contractor are expected to be completed by June 30, 1982 Consultant Services The component was completed on July 31, 1981 and Is being continued under the Third Highway Project EqulDment All equipment has been procured Laboratory After experiencing various delays, construction of the laboratory building is now practically completed A.10 In sharp contrast with the summary, Annex 1 and Annex 5 of the same Supervision Report provoke doubts as to whether the project is indeed problem-free and showing an Improving trend. Annex 1 Construction of the Bujumbura-Rugombo road is 99% completed. The quality of work Is satisfactory. 'There seems, however, to be a minor problem of sweating of the bituminous surface course which has not yet been settled, neither technically nor legallyu (para 3) From the start of the works, the contractor faced many difficulties, mainly due to the aftermath of the conflict in Uganda. Contractor claims some US$3.5 million in compensation. MOW has not accepted the principle of *force majeure" or a recourse to international arbitration (para 5) It appears that Government does not intend to consider the contractor's claims or any part thereof. Subsequent to the mission's return to Wash!ngton, the contractor was declared bankrupt In his home cou.try. This is likely to affect the settlement of outstanding payments and the question of contractor's claims. Moreover, some minor works are to be completed (para 7). Government has outstanding conmitments under most categories of the Credit which in total would probably exceed the remaining funds (para 16) Since physIcal completion of the project will probably be delayed till end 1982, mainly due to the failure of the contractor of the Bujumbura-Rugombo road, the closing date of the credit will have to be postponed to March 31, 1983 (para 17) Annex 5 Although Section 4.02 of the Credit Agreement strongly Implies that Government will not commence the construction of the Bujumbura-Rutovu and of the Gitega-GIhofl roads without prior 32 consultations with IDA, both roads are reported to be under construction without any evidence that previous consultations took place. A.11 The November 15. 1982 Supervision Report also notes (Section 2) that this Is a problem-free project with an *Improving* trend. No references In the annex about any technical failure of the Bujumbura-Rugombo road. The main points of Section 6 read as follows: Bulumbura-Rugombo Road Following the bankruptcy of the contractor, Government has negotiated a new contract with a new contractor to complete the remaining works by January 1983. Improvement of Classified Road Network The earth road Improvement program by force account, planned for 371 km, was reduced to 232.7 km. The works were more substantial (partial reconstruction Instead of regrading) than foreseen at appraisal and were satisfactorily completed in February 1982. The improvement program by contract, planned for 67 km and 21 bridges, was reduced to 34 km on RIG 6 and 11 bridges on RIG 7 due to higher prices than estimated at appraisal. The contractor completed the works satisfactorily in August 1982 Consultant Services One consultant was responsible for works supervision on the Bujumbura-Rugombo road and for improvement of earth roads by contract.(50) These tasks were satisfactorily carried out. A different consultant satisfactorily assisted the Government in the execution of the road maintenance program and in the improvement of earth roads by force account. A.12 The July 1. 1983 Supervision Report is the last supervision report In the file on the Second Highway project. It summarizes, with a three-month delay, the findings of an IDA mission that visited Burundi from March 28 to AprIl 2, 1983. Like the preceding two reports, this also maintains that the project Is problem-free and with an Improving trend (Section 2). However, evidence to the contrary Is offered in Section 6 which states that failures have occurred on the Bujumbura-Rugombo Road and that they are being investigated for appropriate maintenance operations. No annex on the project is attached to the report, which is mainly concerned with supervision of the Third Highway Project (Credit 1132-BU). 50 The statement Is wrong but probably due to a typing error. Two different consultants were involved. 33 The Bulumbura-Rugomlbo Road: Reconstruction and Procurement lasues A.13 Between October 1983 and March 1984, documents In the project file are mostly devoted to procedural, management and financial Issues arising out of the failure of large portions of the Bujumbura-Rugombo road. The background (51) Is as follows: 197A A.14 Design work completed by consultant. it called for a natural gravel basecourse, stabilized with 2% cement (prudently increased to 3% in the bill of quantities since 2% Is difficult to mix evenly); double surface dressing, applied over a 5.5 m width, as well as bituminous priming on the 1.5 m shoulders. 19I78. A.15 During the bid period, prospective bidders were informed of certain changes, including a shortening of the contract period to 18 months, and an Increase of the paved width from 5.5 to 6.0 m (with reduction of shoulders to 1.25 m. A.16 The lower of the two bidders proposed the omission of cement in basecourse construction and the provision of *mechanical stabilization', which involves mixing of two gravels. The price differential between the two solutions was modest (about 15% lower for 'mechanical stabilizatlonO) but the award committee accepted mechanical stabilization partly because of cement shortage at the time. The low bid also included a 7.6% price reduction which made it even more attractive. IDA offered no objection and contract award was made to the low bidder. A.17 Work was to have started In late 1978 but was delayed because of the Uganda-Tanzania war and did not get underway until mid-1979. 1979-1980: A.18 The contractor apparently worked In a satisfactory way under the consultant's supervision. At the same time, the contractor submitted claims for delays he had suffered on account of the Uganda-Tanzania war but Government both denied the claim and refused to submit it to arbitration. 51 The chronological summary below has been largely extracted from a February 23, 1984 IDA report entitled BURUNDI: Speclal Mission. February 2-9. 1984. 34 1980-1981: A.19 The contractor underwent a change of management In late 1980 and, In early 1981, so did the consultant. Through 1981 the project was under Onew* management. Early 1982: A.20 Several localized failures started to occur, beginning along the edges of the road and spreading Inwards, probably caused by Ingress of water Into basecourse and lower layers. A.21 This is the first time that IDA Supervision Reports mention technical problems of this nature (see above, para A.10(a)). The reference Is to minor problems: Osweating* of the bituminous wearing course. Second auarter of 1982: A.23 The contractor went bankrupt. His personnel left Burundi, leaving the plant and equipment behind, and a road which seemed to be about 99 percent completed with only 1.5 km of surfacing remaining to be finished. A.24 The contract for supervision work had expired and the consultant left. Prior to leaving, however, the consultant had refused to accept certain road sections due to the bad surfacing, and had defined the completion and repair works that were necessary. A.25 The November 15, 1982 IDA Supervision Mission Report contains no reference whatever to technical failures of the road (see above, para A.11). September 1982: A.26 Aware that certain repairs had to be done and that surfacing of the remaining 1.5 km had to De completed, Government asked two firms to make proposals for the work. Only one responded, submitted a priced proposal (which was accepted) and the work order was Issued on September 25, 1982. The contract was totally financed by Government and supervision was done by Ministry staff. October 1982-April 1983: A.27 As the repair works progressed, the road failures increased at an alarming rate and, by early March 1983, it became obvious that a very large amount of work remained to be done. On March 10, 1983 the Government issued an additional work rrder to the contractor for the express purpose of patching about 12,000 square meters of road, using approximately the same unit prices as in the contract of September 25, 1982. Work was suspended In early April when Government funds ran out. 35 May-August 1983 A.28 At that point, Government decided that a thorough investigation ought to be done of the causes and possible remedies of the failures. The work was done by the National Laboratory and its findings were reported in three reports dated May 19, June 9, and August 11, 1983. A.29 These studies recommended a two-phased approach. First, localized deep patching had to be done as necessary over the whole length of the roaa; a single seal surface dressing would have to be applied on-the existing surfacing of selected sections (totalling 10.5 km); and a new basecourse and surface dressing would be applied over 18 kms, including 1.0 km where a drainage subbase layer would also be applied. Second, an overlay would have to be applied on 5.6 km and the embankment would have to be raised on another 5.6 km. A.30 Based on its recommendations for the first priority work, the National Laboratory prepared a bill of quantities of works to be performed. The contractor who had already worked on the road submitted a priced proposal for this in July 1983. The estimated cost of the work was about US$4 million equivalent. The question was where this money would come from. A.31 In late July 1983, and while on route from Madagascar to Rwanda, the IDA project officer was asked to stop off in Burundi to discuss the matter of financing.(52) In the course of a total stay of 44 hours (July 25-27), he reviewed the studies, surveyed the failures, found that a state of emergency existed, reviewed the draft contract, found that prices were reasonable, reviewed the Credit Agreement and its Amendment, found that road maintenance and its execution by contractor were covered, that sufficient funds existed in the Credit to cover IDA's participation and that the contractor was in the best position to carry out the works urgently, efficiently and at a reasonable cost. Consequently, he gave verbal approval for the work to proceed. On the strength of this verbal approval, Government asked the contractor to submit an amended proposal, which he did on August 2, 1983. The order for the work was issued on August 4, 1983 as a sec-)nd amendment to the work order Issued on September 25, 1982 (para A.26 above). In view of subsequent developments, a serious question is raised regarding the authority of project officers In the field and the risk for complications in the event that Governments do not recall the IDA guidelines which dictate that written confirmation has to be issued by IDA Headquarters for any commitment made by Project Officers. In this case, no such confirmation was issued. 52 The visit is discussed in a February 10, 1984 IDA report entitled BURUNDI-Second and Third Highway projects. Bulumbura-Rugombo Road. 36 October 1983-March 1984 (63) A.32 Early in October 1983, an inquiry from the IDA Resident Representative led t, a review in IDA Headquarters of the contract for the repair works and this raised the following questions: (a) 8whether proper procurement procedures were followed for a contract amounting to US$4 millonf; (b) whether the Issue was properly dealt with by the supervision mission and properly treated In the supervision report*; 53 Paragraphs A.32-A.35 summarize the IDA memos listed below: October 12, 1983 BURUNDI-Credit 773-BU, Second Highway Project Procurement November 21, 1983 BURUNDI- Second Highway project (Bujumbura-Rugombo Road) December 30, 1983 BURUNDI- Second Highway Project Bujumbura-Rugonbo Road (65 km) January 13, 1984 BURUNDI: Credit No.1132 BU (Third Highway Project) January 16, 1984 BURUNDI- Second and Third Highway Projects (Procurement and Disbursement issues) January 16, 1984 BURUNDI: Second and Third Highway Project Bujumbura-Rugombo Road (RN 5) January 16, 1984 BURUNDI: Third Highway project Credit No. 1132-BU January 18, 1984 BURUNDI: Second and Third Highway Projects (Procurement and Disbursement issues) February 27, 1984 BURUNDI: Third Highway Project, Credit 1132-BU Contract Payments 37 (c) *whether the practice could be misinterpreted by the Government that deviations from the Bank's normal procurement procedures is not a serious matter'; and (d) *the amount provided under the Third Highway Project was not Intended for the repair work of a recently built highway and in an amount of such magnitude, and whether the matter was properly reviewed by the management within the Banku. A.33 A meeting held in the Bank on January 10, 1984 to review the procurement and disbursement issues associated with the contract for the repair works concluded that: (a) OThe Bank's procurement procedures had not been followed for the review and approval of a contract amounting to about US$4 million. No bidding documents were prepared or reviewed. No competitive bidding (neither ICB nor LCB) was conducted. Contract was approved verbally by the project officer in the field without subsequent formal telex confirmation by the Division from Washington....a (b) ONo one outside the Division in Headquarters was Informed of the transaction (Programs, Legal, OPD Procurement Unit, and the Front Office of the Projects Department). The supervision reports do not provide adequate information about the transaction.' (c) "....On December 2, 1983, In response to a Loan Department Inquiry (whether reallocation of funds would take place-already overdrawn on November 16 by SDR 760,000--or, if no reallocation was planned, up to what limit could the Loan Department continue overdisbursement), the Division again without prior consultation with any person outside the Division authorized the Loan Department to disburse up to SDR 3.5 million under Category 1(b), under which only SDR 400,000 were available. After the event, it appears that no attempt was made to Inform anyone outside the Division of the authorization....'. A.34 The meeting agreed that, In view of the fact that two thirds of the repair work had already been completed, and in the best Interests of the project, the Bank should consider that a waiver be given to the Bank's procurement requirements subject to (1) a review by the Engineering Adviser of the technical merit of the work under the contract, and (II) a review by the Legal D(partment on the need for revision of the Project Description. A.35 The Engineering Adviser visited Burundi in February and his report (dated February 23, 1984 and referred to in para A.13 above) stated that the design of the repair works being carried out on the Bujumbura-Rugombo Road was technically reasonable and the quality of works satisfactory. The Bank reviewed the matter regarding disbursement of withdrawal applications under the contract and concluded that, since "Government had signed the 38 contract in good faith and with the Association's approvall,(54) disbursement should be made in keeping with the terms of the contract. The description of the Third Highway Project, as well as Schedule I of the Development Credit Agreement were duly amended. BURHIGH.1 16 May 1986 64 The record contains no evidence that IDA Issued any written approval between the time when the Project Officer left Burundi on July 27, 1983 and August 4, 1983 when the Government issued a work order to the contractor to proceed with the road repairs. Once again, this poses the question of the extent to which IDA authority resides in Project Officers acting in the field. Under the circumstances, the limits on the authority of Project Officers may need to be spelled out even more clearly to avoid a recurrence of the developments experienced in the course of this project. - 39 - PROJECT COMPLETION REPORT BURUNDI SECOND HIGHWAY PROJECT (CREDIT 773-BU) I. INTRODUCTION 1.01 Burundi is a small, densely populated, land-locked country, bounded by Rwanda, Tanzania, Zaire and Uganda. All internal transport is by road. External transport is by lake and rail to Dar es Salaam (about 1,400 km), by road or road/rail to Mombasa (about 2,000 km), and by lake/rail or lake/road to Lusaka. Efficient and economic internal and external transport, on which its economic development depends, is vital for Burundi. External transport, however, has been unreliable, slow, and expensive because these routes have been subject to many problems, the most important of which have been the war between Tanzania and Uganda, strained terms between Kenya and Uganda, and traffic congestion in the Dar es Salaam port. Also, the rugged topography makes road construction and maintenance costly. The main long-term objectives of Burundi have been and are to improve road maintenance capacity, develop the road network, and reduce the cost of road transport through selected rehabilitation and upgrading operations on the most economically important roads. 1.02 The present transport system in Burundi consists of: (a) about 2,900 km of classified roads and tracks, of which about 750 km are paved; (b) about 2,500 km non-classified rural roads; (c) the port of Bujumbura; and (d) an international airport at Bujumbura. There are no railways or navigable rivers. Lake Tanganyika is mostly used for international transport to and from the port of Kigoma (Tanzania). 1.03 IDA's involvement in Burundi's highway subsector began in 1970 with a Highway Engineering Project (Credit S11-BU, US$380,000), which helped finance detailed engineering of the Bujumbura-Nyanza Lac road and a study for the improvement of road maintenance. Later, IDA approved the Highway Maintenance Project (Credit 467-RU, US$5.0 million, 1974), which helped finance: (a) the preparation and implementation of a four-year maintenance program, includi : the establishment of a labor intensive road maintenance organization and one mechanized maintenance brigade; (b) the technical assistance for these activities and for training of local staff; and - 40 - (c) studies fe: future highway development, which formed the basis for the Second Highway Project, object of this PCR. The Highwy Maintenance Project, completed in September 1980 (PCR dated September 25, 1981), significantly improved the road maintenance organization and also provided an incentive to the government to allocate adequate funds for road maintenance. 1.04 Also, IDA helped the International Transport Company (INTRACO), engaged in road transport to and from Mombasa (Kenya), reduce Burundi's dependence on the route through Tanzania. Under a Development Bank Project (Credit 731-BU, US$3.4 million, 1978) IDA helped INTRACO buy trucks. After INTRACO became insolvent in 1980, the Governmant liquidated the company and the funds provided under the Credit were used by the Transport Office of Burundi (TOB), a Government's road transport company. - 41 - II. PROJECT IDENTIFICATIONs PREPARATION AND APPRAISAL Project Identification and Preparation 2.01 Elements of the project were identified in consultation with the Government, at the beginning of 1976 during an IDA supervision mission to Burundi. They were: (a) a construction element, mainly the Improvement to bituminous standards of the Bujumbura-Cibitoke Rwanda border road (75 km); and (b) a maintenance element, mainly the continuation of the efforts to improve the Ministry of Public Works' (MPW) maintenance operations by providing financing for equipment renewal, spare parts, materials, and training. In the event that the Bujumbura-Cibitoke road did not show the highest priority, improvement of the Ngozi-Kobero road (106 km) would be considered. 2.02 The Highway Maintenance Project included a general road investment study, and a feasibility study of the Ngozi-Kobero road (106 km) and of other roads identified under the investment study. It was within these studies, carried out by consultants, that the elements of the project were defined. By mid-1976, it became clear that improvement of the Bujumbura-Cibitoke road would top the list of the investment projects. A consultants' preliminary report on the feasibility of improving the Bujumbura-Cibitoke Road to two-lane bituminous standards indicated that the economic rate of return of various sections would be between 16% and 21%, and that the overall rate of return for the whole road, up to the Rwandese border, would be 18%. Construction costs were estimated at US$19.0 million at October 1977 prices, including 10% physical and 12% price contingencies for two years, the expected duration of the work. 2.03 At the same time, IDA realized that Government's allocation to the 1976 maintenance budget (US$0.8 million) was substantially below the actual requirements (US$2.0 million). Although under the Highway Maintenance Project IDA was providing financing to build up a stock of spare parts, materials and fuel, the Government was unable to replace the stock from its own funds, thus depleting the stock. IDA questioned whether the Government could not, or did not want to, allocate the required funds for road maintenance. Burundi's poverty and its scarce resources, however, were unquestionable, and IDA discussed the possibility of going beyond its conventional maintenance projects by providing financing for recurrent maintenance expenditures. Therefore, the project element regarding the continuation of the highway maintenance program was changed in order to include a contribution to the maintenance budget over a five year period in such a way that the Credit wou*d cover the difference between the Government's budget allocation and actual requirements, with - 42 - increasing Government's budget allocation so that after the five-year period the Government's allocation would meet all recurrent requirements. The contribution to the maintenance budget was estimated at US$3.0 million, whereas the cost of renewing the equipment was estimated at US$1.5 million. 2.04 Consultants, financed by the United Nations Development Program (UNDP) under the Highway Maintenance Project, provided technical assistance to the Road Department of MPW. They established a bridge inventory of Burundi's main highways indicating their condition and the necessary repairs to be carried out. 50 wooden bridges (4-12 m span) needed either urgent repairs or replacement by culverts or small concrete bridges. The estimated cost was US$1.0 million. 2.05 The estimated total cost of the project was US$24.5 million while an IDA Credit of US$10 million was available. IDA estimated that the Government could not contribute more than 14% (US$3.5 million). Therefore, additional financing of about US$11.0 million was required. The project was expected to be ready for appraisal in early 1977. The main issue to be resolved was whether Burundi, in view of its limited resources, could afford a construction/maintenance project of this size, or whether all available resources had to be directed to road maintenance. Appraisal and Negotiations 2.06 The project was appraised in February 1977. According to the Issues Paper, the project included: (a) improvement to bituminous standards of the Bujumbura-Rwanda border road (75 km); (b) improvement of the earth road network; (c) consultants for supervision of road improvement, study and supervision of the earth network improvement, and technical assistance; (d) procurement of road maintenance equipment; and (e) improvement of MPW's soils and materials laboratory. The estimated total cost of the project, including contingencies but excluding taxes, was US$25.0 million. The estimated foreign exchange cost was US$19.0 million. The improvement of the earth road network included the replacement of obsolete wooden bridges, stabilization of steep road grades, and improvement of road sections from earth track to low standard gravel road. The last two items had been added, as had been the improvement of MPW's laboratory. Conversely, the project element regarding contribution to the maintenance budget over a five-year period had been taken out. In particular, although initially requested by the Government, no provision was made in the project for the procurement of spare parts and materials, as it was considered that these items were to be provided from the recurrent budget. -43 - 2.07 The issues raised were: (a) Burundi was spending only about US$250 per km a year for the maintenance of its primary road network, or 1.3% of its total budget (as against 3% to 5% that comparable countries spent). IDA's funds from the ongoing credit were being used to supplement day-to-day recurrent expenditures for equipment operation, instead of building up an initial stock of materials, spare parts and fuel as originally intended. The Credit Agreement, therefore, would require the Government to increase the budget allocations for road maintenance to an adequate level, which was about US$1,000 per km per year, ard to maintain separate accounts for expenditures on municipal and rural roads. (b) The economic justification of the road section north of Cibitoke was contingent on the construction of a cement factory in Cyangugu, Rwanda (8 km across the border on Rwandese territory). Without traffic resulting from ihe transport of cement to Bujumbura, the rates of return would be substantially less, and the improvement of the section north of Cibitoke would not be economically viable. In view of the uncertainty about the construction of the cement factory, road construction would be limited to those sections ecoromically justified without cement traffic. (c) IDA's US$10.0 million allocated to the project was not sufficient to cover the foreign exchange cost, estimated at US$19.0 million. On the other hand, in view of Burundi's economic situation, it was proposed to finance part of the local costs as well. The necessary total external financing was estimated at US$22.3 million, i.e. 90% of the total cost, net of taxes. The co-financing needs were, therefore, US$12.3 million. The Arab Bank for Economic Development in Africa (BADEA), Kuwait Fund, Saudi Fund, and Belgium were identified as likely co-financing partners. 2.08 The Decision Meeting of March 25, 1977, decided the following: (a) No funds for recurrent maintenance expenditures would be in- cluded in the credit, and the Credit Agreement for the pro- posed project would contain a covenant requiring a sub- stantial increase of the Government's budget allocation for highway maintenance; (b) The use of manual labor techniques would continue to be emphasized in the proposed project; (c) If the Federal Republic of Germany (FRG) did not finance technical assistance to the MPW central mechanical workshop, the Government #ould seek financing from other sources, or the cost of this technical assistance would be financed from the IDA Credit with consequent reductions in the physical works; -44- (d) Prior to the negotiations, more detailed information should be obtained to make an adequate judgment on the justifica- tion of the construction of the Bujumbura-Cibitoke road con- struction and its possible extension across the Rwandese border. The Rwandese Government should be sounded out as to whether it would be willing to improve the road from Cyangugu to the Burundi border. Pending this information, the appraisal report should be written on the assumption that the whole road including the stretch to the Rwandese border would be built; (e) The Government should be warned about the possible misuse of scarce resources if the Bujumbura-Rutovu road with Chinese financing, and the Gitega-Gihofi road with Germar financing were built, since the two roads would run partially parallel, and this would constitute overinvestment; and Cf) It was recommended that IDA should allocate an additional US$5.0 million to the project. 2.09 During negotiations for an IDA Credit of US$14.0 million from December 5 to 9, 1977, the Government, BADEA, and IDA discussed and agreed the following: (a) upon review of the consultants' economic analysis of the Bujumbura-Cibitoke-Rwandese border road, construction of a two lane bituminous road was justified up to Rugombo, about 10 km beyond Cibitoke; the construction of the remaining 10 km to the Rwandese border would depend on economic justification satisfactory to IDA, to be provided before December 31, 1979; this would include evidence that a cement factory would be built in Rwanda and that Burundi would import a substantial quantity of cement; Cb) BADEA's representative said that BADEA was in principle prepared to cofinance the road construction element of the project which it planned to appraise in January 1978; and Cc) MPW's budget included FBU250 million (US$2.7 million) for road maintenance for fiscal year 1978 (Jan-Dec); in the following years, the Government would allocate adequate amounts of funds for road maintenance, not less than FBU250 million, and annually it would consult with IDA on budget allocations for maintenance; (d) the MPW general manager had been appointed coordinator of road investments. 2.10 Also, the government agreed to: (a) prepare by April 30, 1978, a road investment program covering at least five years and to exchange views with IDA; - 45 - (b) discuss with IDA and later adopt a program for the progressive creation of two separate services to maintain Bujumbura's township roads and the national road network; (c) maintain a position within MPW to coordinate the implementation of the road investment program; and (d) appoint adequate counterpart staff to the consultants. 2.11 The Credit Agreement (Credit 773-BU) of US$14.0 million was signed on March 29, 1978. The project, whose total costs were estimated at US$23.97 million, was cofinanced by BADEA (US$6.1 million), FRG (US$0.75 million), Government of Burundi (US$2.22 million), and UNDP (US$0.9 million). The Credit became effective on July 26, 1978. The project was scheduled for completion by December 1981, and the closing date of the Credit was June 30, 1982. The final composition of the project approved by IDA as well as the project costs, are given in Annex 6. Project Objectives and Description 2.12 The objectives of the proposed project were to help the Government improve Burundi's classified road network and continue the road maintenance program which began in 1974 under the Highway Maintenance Project. 2.13 As appraised the project provided for: (a) improvement to bituminous standards of the Bujumbura-Rugombo road (65 km); (b) improvement of the classified road network through: (i) replacement of 21 selected obsolete wooden bridges; (ii) stabilization of about 60,000 m2 of selected steep road sections; and (iii) implementation of the road upgrading program, consisting of upgrading 57 km of earth tracks to low standard gravel road, and 371 km of earth tracks to improved earth road; (c) consultant services to: (i) supervise the improvement of (a); (ii) prepare economic evaluation and detailed engineering for and, supervise improvement of (b); iii) continue technical assistance to improve road maintenance operations, - 46 - (d) procurement of road maintenance equipment to replace existing equipment near the end of its economic life and to provide adequate capacity for mechanized road maintenance; (e) improvement of the MPW soils and materials laboratory by: (i) providing technical assistance to train local laboratory personnel; (ii) procuring laboratory dquipment and vehicles; and (iii) reconstructing the laboratory building. - 47 - III. PROJECT IMPLEMENTATION AND COSTS Road Construction 3.01 The Bujumbura-Rugombo road (65 km) is situated within the Ruzizt Valley, which, due to its fertile soil, supports extensive agricultural activity. The alignment of the existing road was generally satisfactory. However, the condition of its gravel surface was poor, and the absence of suitable materials in the vicinity of the road made maintenance difficult. Also, the low road line and flooding of the valley after heavy rains made the road frequently impassable, in particular on its first 25 km. The average daily traffic (ADT) on the road ranged from about 80 to 300 vehicles. Consultants designed the project road in 1974. Generally the new road followed the existing alignment, except for certain short realignments, which reduced the road length by about 3 km from 68 to 65 km. The design standards were based on a design speed of 80 km/h and a maximum gradient of 7%. The roadway proposed was 8.5 m wide. The pavement consa3ted of a natural gravel sub-base, a cement stabilized base, and a bituminous double surface treatment, 5.50 a wide. The design standards were consistent with the standards used for other paved roads in Burundi and were appropriate for the forecasted traffic. However, a 9 a wide roadway and a 6 m wide pavement would have been better, especially for the first section of the road, which already carried 300 v.p.d. 3.02 Government invited bids for road construction from six prequalified firms, but only two bids were received. On September 19, 1978, a contract was awarded to the lowest bidder for an amount of US$10.2 million, net of taxes, i.e. about the same as the appraisal estimate net of taxes. In its tender, the lowest bidder proposed a mechanically stabilized base, which would cost about US$200,000 less than the cement stabilized base provided for in the original design. In spite of the small difference in price, the Government accepted the proposal with IDA's agreement, in part because of the frequent cement shortages that Burundi had been experiencing. The construction period stipulated in the contract was 18 months, (November 1978 to May 1980) as compared to the 30 months estimated at appraisal. 3.03 The consultants who had designed the road also supervised the construction work, as well. BADEA, one of the cofinanciers, had proposed a list of seven consulting firms for the supervision. When the Government and IDA agreed to award a contract directly to the design consultants, because of their familiarity with the design, BADEA withdrew its financing for the supervision, which was then financed by the Government and IDA. The supervision contract price was USSO.52 million, i.e. 22% lower than the appraisal estimate (US$0.67 million without contingencies). 3.04 Until December 1981, due to the secu:ity situation in Tanzania and Uganda, Burundi's import and export routes to and from Dar es Salaam and Mombasa were interrupted for long periods of time. Shortages of essential suppltes, such as cement, bitumen and fuel, occurred frequently, and the contractor's equipment arrived at site several months late. Therefore, the contractor's mobilization an* actual work on the road - 48 - progressed very slowly, and it often came-to a standstill. In July 1979, the situation improved slightly. However, it was not until January 1981 that the contractor could work regularly. In the meantime, contractor's financial situation became difficult; the contractor's headquarters reorganized the local management in Burundi, and provided more financial and technical support. Work performance improved, and by November 15, 1981 about 92% of the work had been completed. 3.05 Since the beginning of the transport problems in the transit countries of Uganda and Tanzania, the contractor complained about the lost work time and the financial losses it had incurred, and invoked the application of the "force majeure" clause. Later on, the contractor claimed some US$3.5 million as compensation for its heavy financial losses. The Government accepted the principle of "force majeure" as far as the completion time was concerned, and extended the construction period by .9 months to December 31, 1981. As far as compensation for financial losses was concerned, the Government turned down the contractor's requests, and refused to submit the case to arbitration. 3.06 With IDA's agreement, the Government made several changes during contract implementation. Road shoulders were constructed with the same material as the base so that the base course was actually 8.5 m wide, instead of 5.5 m. The 5.5 m double surface bituminous treatment was replaced by a triple bituminous surface treatment 6.C m wide; and the shoulder width was reduced from 1.5 m to 1.25 m as a result. The horizontal alignment was changed at three places over a total length of about 8 km, and the road grade line was raised over about 23 km resulting in additional earthwork. The drainage and other structures were also changed; a 100 m long retaining wall, not provided for in the original design, was built. 3.07 In May 1982, the contractor went bankrupt and stopped working. About 1.18 km of road out of a total of 65 km had not yet been finished. The total amount of work done and billed was US$15.45 million, i.e. about 20% above the appraisal estimate net of taxes but including contingencies, and 51% above the initial contract price. The 20% increase was entirely due to price adjustment, and the 51% increase was due 13% to additional quantities and 38% to price adjustment. The Government awarded a contract for US$130,000 to another contractor to complete the work. Because the supervising consultants had already left Burundi, the Government itself supervised the work. The second contractor started working in October 1982 and completed it in December 1982. Since IDA funds had almost been exhausted, the Government financed the remaining work from its own resoutces. 3.08 Following the contractor's bankruptcy, the Government did not pay its last bill amounting to US$640,000, and also cashed the performance bond amounting to US$730,000. The final contract price, including the work done by the second contractor, was US$14.21 million, about 10% above the appraisal estimate, and 39% above the initial contract price. 3.09 The actual total cost of the construction supervision was US$1.32 million compared to an initial contract price of US$0.52 million and an estimated cost at appraisal of US$0.78 million. The actual cost, - 49 - therefore, was 154% higher than the initial contract price and 69% higher than the appraisal estimate. The 154% increase was due 74% to quantity increase (increased man-months, since the construction-work lasted 42 months instead of 18 months), and 26% to price adjustment. 3.10 The road started showing signs of failure at the beginning of 1983, i.e. only a few months after the end of the work. In large sections, surfacing was found to be deficient because of uneven spreading of bitumen. Failures started along the edges and spread inwards, probably because water penetrated into the base and lower courses. The Government Laboratory carried out a preliminary study and found that: (a) the materials used in the sub-base and base courses were not homogeneous; (b) compaction of the sub-base and base was insufficient; (c) in some sections the water table was very close to the road level, the drainage was not sufficient, and capillary water might have softened the subgrade and the pavement courses, and as a result of these factors, the Soils Laboratory stated that the road needed to be repaired between km 5.5 and km 50; 3.11 The Laboratory recommended the following repair program: (a) works to be carried out immediately; (i) strengthening (new sub-base and base courses, and double surface treatment) of six stretches totaling about 18 km; (ii) local repair on four stretches totaling about 19 km (10.5 km of which would be strengthened later on); and (iii) reconstruction of drainage structures. (b) works to be carried out later on; (i) strengthening and repairing of four stretches totaling about 16 km (including the 10.5 km mentioned above). 3.12 In August 1983, the Government signed a US$4.4 million contract with the second contractor, who had completed the construction work, for the execution of all required repair works to be carried out immediately. IDA agreed to finance 70% of the contract's total cost. However, because no funds under Credit 773-BU were avaiiable, the Government and IDA agreed to finance the repair works under the Third Highway Project, Credit 1132-BU, which consequently was then amended on April 4, 1984. In August 1984, the contractor completed the work at a total cost of US$4.5 million. The strengthening and repair work of the four stretches (about 16 km), the cost of which is estimated at US$1.5 million, will be carried out under the Fourth Highway Project approved by the Bank's Board on April 23, 1985. - 50 - Improvement of the Classified Road Network (428 km) 3.13 According to the appraisal report this project component included the upgrading of 428 km of earth tracks (see Annex 2), the replacement of 21 wooden bridges (see Annex 3), and the stabilization of 60,000 m2 of steep grades (see Annex 4), the total cost of which was estimated at US$5.19 million, including contingencies. (a) Out of 428 km of earth tracks, 371 km were to be upgraded to earth road standards by force account. The work consisted of improving road drainage and surface, and did not include any major earthworks. The estimated total cost was US$1.14 million, including contingencies; the estimated completion period was 39 months from October 1978 to December 1981, with an estimated monthly output of 9.5 km, and the cost per km about US$3,000; (b) The remaining 57 km of earth tracks were to be upgraded to low gravel road standards by contract. The work consisted of improving the road drainage, carrying out major earthworks where necessary, and systematic regravelling. The estimated total cost was US$1.79 million, including contingencies; the estimated completion period was 26 months from November 1979 to December 1981, with an estimated monthly output of 2.2 km, and the cost per km about US$31,400; (c) The replacement of 21 wooden bridges was to be carried out by force account; some bridges, however, could be subcontracted to Burundi contractors to alleviate staff constraints and to shorten the completion period. The estimated total cost was US$940,000, including contingencies; the estimated completion period was 24 months from October 1978 to-September 1980, with the estimated monthly output of about 1 bridge per month, and the cost per bridge about US$45,000; (d) The stabilization of 60,000 m2 of steep grades was to be carried out by contract; it included regravelling, and a bituminous surface treatment. The estimated total cost was US$1.32 million, including contingencies; the estimated completion period was 26 months from November 1979 to December 1981, with an estimated monthly output of 2,300 m2, and the cost per m2 about US$22. 3.14 In June 1978, however, the Government proposed a revised program to IDA based on the following considerations: (a) roads to be upgraded should be chosen according to the priorities set in the 1978-1987 road investment program; (b) roads scheduled to be financed from other sources in the short and medium terms should not be chosen; - 51 - (c) works technically too difficult and too large for RD should be carried out by contract; and (d) works by contract should be grouped in geographic lots, in order to reduce mobilization costs. IDA approved the revised program. The Government estimated the cost of the revised program at US$3.75 million, excluding contingencies. IDA estimated that the cost including contingencies (32%) would be US$4.95 million. 3.15 The revised program consisted of: (a) upgrading of 289 km of earth tracks to improved earth road standards by force account, at an estimated cost of US$1.79 million, including contingencies (US$6,195 per ka). This work consisted of grading and partial regravelling; (b) upgrading of a 13.5 km section of RIG 9 between Bujumbura and Muzinda to improved earth road standards by contract, at an estimated cost of US$179,000, including contingencies (US$13,260 per kn). This work consisted of systematically improving the road drainage and regravelling; (c) upgrading of three sections of RIG 6, Mutambara-Ruzira, RIG 7, Boma du Chef-Mabanda, and RIG 11, Mabanda-Nyanza Lac, totaling 136 km to low gravel road standards by contract, at an estimated cost of US$1.10 million, including contingencies (US$8,000 per kW). This work consisted of systematically carrying out major earthworks, improving the road drainage, and regravelling; (d) replacement of 22 wooden bridges, 2 on RIG 9, Bujumbura-Bubanza, and 20 on RIG 7, between Boma du Chef-Mabanda, by contract, at an estimated cost of US$741,000, including contingencies (US$33,700 per bridge); (e) stabilization of steep grades on RIG 6 between Mutambara and Boma du Chef, totaling about 11.5 km, or 63,000 m2 by contract, at an estimated cost of US$1.15 million, including contingencies (US$100,000 per km, or US$18 per m2). 3.16 The Government's mechanized '4gade, established in December 1978, carried out the upgrading of earth tracks to improved earth road standards. The work actually consisted of laying about 720 m3 per km of gravel (average transport distance of about 2 ka). The brigade started working in December 1978 and-completed it in February 1982. It actually upgraded about 207 km of tracks, or 72% of the planned 289 ki, at a total cost of US$1.31 million. - 52 - The roads actually upgraded were: RN 3 Mutumbara-Nyanza Lac 45.190 km RIG 2 Gitega-Buhiga-Muyinga 99.000 km RIG 9 Muzinda-Bubanza 26.260 km RIG 14 Kirundo-junction RN 6 32.000 km Kirundo's towqship roads 4.100 km Total 206.550 km The average output was about 5.3 km per month, or 56% of the estimated output (9.5 km per month) at appraisal, and the cost per km was about US$6,280, i.e. about the same as the Government's estimate (US$6,595 per km), and about twice as high as the appraisal estimate (US$3,000 per km). 3.17 The actual monthly output was lower and the cost per km higher than the appraisal estimates mainly because: (a) the earth roads were actually upgraded to higher standards than planned, because they were important connecting routes between large centers of activity; (b) the delivery of some of the additional equipment was delayed; (c) in 1979 several work stoppages occurred, because of lack of fuel and spare parts, because of the security situation in Uganda; (d) the average hauling distance for laterite was 3 km, i.e. higher than the estimated 2 km; (e) availability of equipment was lower than estimated; and (f) lack of sufficient local funds, due to increases of wages, and of the prices of fuel, spare parts, and materials. Taking into consideration all these reasons, the lower than expected results are considered satisfactory. 3.18 In March 1979, with IDA's agreement, the Government selected consultants to carry out the economic study, design, and supervision of the revised program for the improvement of the road network to be carried out by contract (see para 3.15). The consultants started the study/design in June 1979, and completed it in April 1980. The Government received bids for replacement of bridges, stabilization of steep grades, and upgrading of earth tracks. In September 1980, and with IDA's agreement, the Government selected the same contractor who later completed construction works on the Bujumbura-Rugombo road. 3.19 Meanwhile, because of inflation, prices had gone up, and it was no longer possible to carry out the planned amount of work within the available funds. To stay within the available financing, the Government - 53 - awarded a US$2.59 million contract to the contractor for the upgrading of 29.1 ka of RIG 6, instead of 149.5 km (see para. 3.15 b and c), gravelling and surfacing of 11.4 km of steep grades along RIG 6, instead of 11.5 km (see para. 3.15 e), and replacement of 20 bridges, instead of 22 (see para. 3.15 d). The contract period was 12 months, from October 1981 to October 1982. The contractor mobilized immediately and finished the work satisfactorily in June 1982. During the contract execution, however, prices continued to rise, and work quantities were further reduced. Finally, only 22.6 km of RIG 6, instead of 149.5 km, were upgraded, and only 10 bridges, instead of 22, were replaced. About 11.4 km, or 68,000 m2 of steep grades were stabilized, but no surface treatment was applied. A double surface treatment, however, was applied on the main streets of Bururi. This -work was not included either in the orijinal or in the revised program. The final total cost was US$2.91 million. The design consultants supervised the work, as planned, at a total cost of US$570,000, including the study, as compared to US$550,000 estimated at appraisal. 3.20 The targets set at appraisal and later on in the revised program could not be achieved, because the preparation of this project element dragged on for several years, and meanwhile prices went up. The Government was very slow i1i carrying out routine administrative business, probably because of lengthy bureaucratic procedures and lack of staff. At any rate, the result was that the consultants were selected one year after the start of the project (March 1978), the execution of the economic study and design took about a year (June 1979-July 1980), and the selection of the contractor, through local bidding, took also a year (September 1980-September 1981). Technical Assistance 3.21 Under the Highway Maintenance Project, UNDP financed technical assistance to help the Government carry out a four-year highway maintenance program. IDA, as executing agency, awarded the contract to a consulting firm. Under the Second Highway Project IDA and UNDP financed the services of the same consultants from March 1978 to June 1981. Later, with IDA's financing, the Government awarded a contract to the same consultants covering the period July 1981-February 1982. The consultants assisted the Government in implementing the road improvement program by force account, as well as in the manual and mechanized routine road maintenance. Also they assisted the Government in administrative matters such as accounting and inventory control. The total cost of their services was US$2.5 million as compared to US$2.97, including contingencies, estimated at appraisal. Road Maintenance Equipment 3.22 In June 1978, with IDA's agreement, the Government called for bids for the supply of road maintenance equipment. It received the bids in September, and awarded the contracts in March 1979. The appraisal report provided for 42 items (see Annex 5) at an estimated cost of US$1.85 million, including contingencies. The Government procured 40 items for a total cost of US$1.64 million. -54- Improvement of the MPW Laboratory 3.23 The existing laboratory building did not justify improvement. The Government decided, therefore, to build a new one at another location. The new laboratory building consisted of three units: laboratory, warehouse, and an administrative building. In January 1980, the Government called for local bids. It received only two bids. With IDA's agreement, in February 1980 the Government awarded a US$210,000 contract to the lowest bidder. The work did not start until June 1980, due to delay in obtaining title to the property at the new site. In August 1982, the works were 98% completed. The cost of the remaining work was estimated at US$33,000. Due to the contractor's financial difficulties, the Government cancelled the' contract, and negotiated an agreement for the completion of the work with a foreign contractor, which completed the work for US$30,000 at the end of 1982. The final total cost of the work was US$240,000. 3.24 With IDA's agreement, the Government awarded a US$230,000 contract for the supply of laboratory equipment to the lowest bidder. Also, the Government hired two experts for a total of 20 man-months, the cost of which was US$120,000. France provided two experts for a total of 61.5 man-months, two vehicles, and training of a-Burundi expert in France. The laboratory started operating at the beginning of 1983. Training 3.25 Under the Highway Maintenance Project (Credit 467-BU) the following was achieved: (a) a study to determine training needs was carried out by consultants; (b) road overseers, foremen, equipment operators, and superintendents were trained; and (W) two teachers for the MPW's technical school were provided. Also, German bilateral aid provided training for mechanics and truck drivers. The Government and IDA estimated that that training program would provide for Burundi's needs adequately, and that eventually Burundi instructors would carry on the training program. Therefore, with the exception of training of technicians for MPW laboratory end the continuation of on-the-job training in the maintenance field, no training component was included in the project. However, at the completion of the project, the Government and IDA realized that there was still need for training. Therefore, a training component was included in the Third Highway Project and expanded in the Fourth Highway Project. Reporting 3.26 Project progress reports were received regularly. However, the reporting was too detailed on certain project elements, and insufficiently detailed on others. Little information was given on the costs of project items. S55 - Project Costs and Disbursements 3.27 The actual costs compared to the appraisal estimates are given in Annex 6. The actual disbursements are given in Annex 8. The actual total project cost, excluding taxes, was US$25.05 million, compared to a total project cost of US$23.97 million estimated at appraisal. There was a cost increase of about 5%. However, including the cost for repair work, i.e. US$4.5 million financed under the Third Highway Project (Credit 1132-BU), and the estimated US$1.5 million to be financed under the Fourth Highway Project, the total cost rises to US$31.05 million, about 30%more than the appraisal estimate. A summary of costs by component is given below: Summary of Component Costs Total Costs Total Costs Net of Taxes Net of Taxes (Including contingencies) Component (US Million) Appraisal Report Actual I. Main Road Construction 12.90 14.21 II. Improvement of :'oad Network 4.60 4.22 III. Consulting Service 4.30 4.39 IV. Maintenance Equipment 1.85 1.64 V. Improvement of Laboratory Equipment 0.32 0.59 Total 23.97 25.05 3.28 A comparison of the actual costs with the appraisal estimates shows that: (a) the actual cost of the construction of the Bujumbura-Rugombo road (65 ki), was 10% higher without the repair work, and 57% higher with the repair work; (b) the actual cost of improvement cf the road network was 8% lower;1/ (c) The actual cost of the consulting services was 2% higher on the whole; in particular the cost of: (i) the supervision of the Bujumbura-Rugombo road was 69% higher; (ii) the study and supervision of the improvement of the road network was 3% higher; (iii) the technical assistance to MPW was 16% lower. I/ Actually the volume of work done was much less than planned but prices went up because of inflation (see pars. 3.19) and earth roads were upgraded to higher standards than planned (see para. 3.17a). - 56 - (d) the maintenance equipment was 11% lower; and (e) the improvement of MPW's laboratory was 184% higher, and in particular the cost of the: (i) equipment and vehicles was 187% higher; and (ii) the reconstruction of buildings was 100% higher. 3.29 The cost increases indicated above were mainly due to the repair works on the Bujumbura-Rugombo road, and to a lesser extent, to a longer than expected preparation and execution time, and to the compounded effect of inflation. 3.30 Disbursements were 60% to 70% of the appraisal estimates for the ftrst two years of project execution. This was so because the progress on road construction was very slow until January 1981. Also, in 1980 shortages of cement, bitumen, and fuel continued to occur. Then they picked up and by December 31, 1981, the originally estimated project completion date, they were US$10.12 million, or 75% of the appraisal. This credit was fully disbursed (see Annex 8). Performance of Consultants, Contractors, and Suppliers 3.31 In its final report on the construction of the Bujumbura-Rugombo road (see Annex 9), the Government stated that: (a) the contractor's equipment was very old, and the supply of spare parts and tyres was insufficient and irregular; during the entire construction period more than half of the equip- ment was always under repair, and at the end of the work all of it was out of order; the contractor's organization and management were inadequate, the staff was incompetent, and financial means were insufficient; (b) the road design was poor and as a result, many changes be- came necessary; however, the soil study was good; (c) supervision of the work was not satisfactory; the consul- tants did not control the work adequately, and they were not as forceful as they should have been, and part of the work was not executed up to standards and specifications. 3.32 The contractor was pre-qualified along with seven other contrac- tors. According to the minutes of the pre-qualification meeting: (a) the contractor's headquarters were in Belgium; (b) its bank references were good; (c) its technical staff consisted of about 20 engineers and 70 foremen; - 57 - (d) its equipment park was important, and much of it was in Zaire; and (e) the list of work done showed many contracts executed in Belgium and Zaire. 3.33 The contractor suffered considerable losses because of the transport problems in Burundi's neighboring countries. For the first eight months of its contract it could not work, and for another seventeen months it could work at a reduced pace only. Probably the contractor was not financially strong enough to withstand such losses, estimated by him at US$3.5 million. (para. 3.05). 3.34 Along the first 50 km, the plasticity of the soils used in the pavement courses was relatively high, the road traversed areas subject to flooding, and the water-table was.close to the road level. In these cases cement stabilization is more suitable than the mechanical stabilization, because cement not only increases the strength, but it lowers the plasti- city. In its bid the contractor proposed a mechanically stabilized base course, instead of a cement stabilized base course provided for in the original design which was accepted by Government with the agreement of IDA. (para. 3.02) 3.35 The contractor was responsible for the control testing during the execution of the work. According to the records the results complied with the contract specification. However, about 50 km of road, out of 65 km, failed. 3.36 The consultants were responsible for the supervision of the work and for the control of all laboratory tests carried out by the contractor. Neither the Government nor IDA can understand why the consultants could not detect the bad works and defects during the execution of the work. A copy of the PCR will be sent to the consultants for comments. 3.37 Performance of other contractors, consultants, and suppliers was found to be generally good. - 58 - IV. INSTITUTIONAL DEVELOPMENT Institutional Performance 4.01 The project stimulated the rationalization and decentralization of the highway organization in MPW. Previously, one division of MPW was responsible for feasibility studies, detailed engineering, and supervision of execution of works, and another division for maintenance operations. These two divisions depended directly on MPW headquarters, which actually managed all road activities. During project implementation the Road Department (RD) was set up in MPW and given the responsibility for the two divisions. This improved coordination. 4.02 Also, before the project, one division had the responsibility for the maintenance of the Bujumbura township roads and for the national road network vested in one division. This favored Bujumbura's roads to the detriment of the national roads. The process of vesting these responsibilities in two separate services started under the project and was completed under the Third Highway Project. This has resulted in a better use of the Government's resources for the maintenance of the road network. 4.03 Under the project four maintenance regions were set up in Bujumbura, Ngozi, Gitega, and Bururi, and each region was responsible for the manual maintenance and operations of small mechanized units. This decentralization has resulted in quicker interventions and better maintenance operations. 4.04 Institutional performance improved gradually during the course of project implementation. MPW's organization was improved, staff at various levels were trained, procedures were not simplified, but the process of institution building which the project helped, remained within the highway sub-sectors and did not assist the transport sector as a whole. According to the appraisal report of the Fourth Righway Project, transport sector management in Burundi still needs to be improved, especially coordination of road, port, and lake transport development. Transport planning and coordination has not yet been established, and assistance to MPW (and MTPT) for institution building will still be required for some time. Expatriate technical assistance and consultants are still in MPW in the same positions and in the same number. Compliance with Credit Covenants 4.05 The experience with compliance of Credit Covenants was relatively good. The only problem, relating to section 4.02 of the Credit Agreement, was the paving of the Bujumbura-Rutovu road, financed by China, and of the Gitega-Gihofi road, financed by FRG. IDA questioned the adequacy of the investment in these two partially competing roads which were eventually paved. The compliance with major Credit covenants at the end of the project is given in Annex 10. - 59 - V. THE ROLE OF THE GOVERNMENT 5.01 The Government strove to achieve the project objectives, but it had to face limitations of human and financial resources. The Government provided sufficient funds for the road maintenance, took an interest in improving its organization and in training its personnel., and was receptive to advice by technical assistance staff. However, it did not simplify its lengthy bureaucratic procedures, and did not shorten the time for preparation of bidding documents, evaluation of bids, preparation and award of contracts, etc. Therefore, delays in the implementation of some project components occurred, their costs went up, and the work had to be eventually scaled down. - 60 - VI. ECONOMIC RE-EVALUATION 6.01 According to the appraisal report, "the objectives of the Second Highway Project were to assist the Government in: (a) reconstructing an economically important road; (b) improving Burundi's classified road network; and (c) continuing the road maintenance program, which began in 1974 under the Highway Maintenance Project (Credit 467-BU). The combined effect of the implementation of the project components was supposed to lower road transport costs, and ensure all season access bet- ween agricultural areas and markets, particularly Bujumbura, the main outlet for Burundi's exports. The principal beneficiaries were expected to be the rural farming population. The weighted average economic return of all project components exceeded 17%." 6.02 The economic rates of return (ERR) evaluated at appraisal were as follows:. (a) 16% for the improvement of the Bujumbura-Rugombo road to bituminous standards as a whole; 18%, 16%, and 12% for the first, second, and third section of the road. (b) no ERR was given for the replacement of bridges, and for the stabilization of steep grades. The selected bridge replace- ments and grade stabilization would yield economic returns exceeding 12%. The consultants who would carry out the technical studies were supposed to assess the economic justification of each improvement; (c) no ERR was given for the stabilization of steep road grades; the threshold of their final selection was set at 12%. (d) no ERR was given for the upgrading of 428 km of earth tracks to low gravel or improved earth road standards, but only the First Year Return (FYR). The tracks were selected from a highway investment program formulated by consultants under the Highway Maintenance Project. According to the invest- ment program, the economic return of each track to be up- graded would exceed 15%; (d) 21% for the updated Highway Maintenance Program. The financing of technical assistance, and of highway and laboratory equipment were essentially a continuation of the program initiated under the Highway Maintenance Project in 1974. The evaluation of the program was done on the bases of revised costs, traffic forecasts, and actual expenditures; -61- 6.03 The economic reevaluation was done comparing the 'with' and 'without' the project scenarios. The analysis is based on findings of a consultant who reevaluated the project in the field on behalf of the Government. The economic reevaluation was done in early 1982 prices. The assumed opportunity cost of capital was about 10-12%. 6.04 The reevaluated project components are the following: (a) construction of the Bujumbura-Rugombo Road (65 km); (i) Bujumbura-Gihanga (14 km); (ii) Gihanga-Cibitoke (41 km); and (iii) Cibitoke-Rugombo (10 km); (b) replacement of 10 wooden bridges; (c) stabilization of 68,000 m2 of steep road gradients, exclud- ing bituminous surfacing; (d) upgrading of about 230 km of earth tracks; and (e) continuation of the Maintenance Program. 6.05 The quantified benefits used in the reevaluation are vehicle operating cost savings and avoided maintenance cost. On the cost side, actual construction and maintenance costs were used. Vehicles operating costs were estimated for five different types of vehicles (cars, pickups, buses, trucks and truck trailers) and three types of terrain (plain, un- dulating and hilly). 6.06 At appraisal, the traffic on the first section (Bujumbura- Gihanga) was estimated to be 500 vehicles per day (vpd) in 1983, the open- ing year of the road. A traffic survey carried out in 1983 and 1984 indicated that traffic was about 550, vpd slightly above the appraisal estimate. Also at appraisal, the traffic growth during the 20 year economic life of the road was assumed to be about 5%. The reevaluation was done on the basis of 550, 170 and 110 vpd for the first, second and third section respectively and a 5% growth rate from 1983 onwards. 6.07 On the basis of the inputs mentioned above the overall ERR of the project excluding the component concerning the upgrading of classified road network (see para. 6.11-6.12) is about 17% which matches the threshold set out at appraisal. 6.08 Although the scope of the project component concerning the up- grading of the classified road network was considerably reduced, and the cost of the Bujumbura-Rugombo road was higher than estimated at appraisal, the recalculate ERR for the entire project is exactly thi threshold of 17% estimated at appraisal. While costs were higher, they nevertheless were spread over eight years versus the three years estimated at appraisal; furthermore, traffic level in 1983 was 15% higher than the appraisal - 62- estimate. Finally, the VOC savings, used in the recalculation are probably higher than those estimated at appraisal, although this is impossible to ascertain exactly because in the appraisal report there is no indication of VOC savings with regard to specific road types and conditions. Bujumbura-Rugombo (65 ka) 6.09 The overall ERR of the whole road is about 14% compared to 16% at appraisal. The breakdown by road section-is as follows: (a) BuJumbura--Gihanga (14 ka). The reevaluated ERR is about 16% compared to 18% at appraisal (Annex 11); (b) Gihanga-Cibitoke (41 ka). The recalculated ERR for the section is about 14% compared to 16% at appraisal (Annex 11). (c) Cibitoke-Rugombo (10 ka) The recalculated ERR of this short section matches the appraisal estimate of 12% (Annex 11). 6.10 The difference between the ERR estimated at appraisal and the recalculated ERR is largely accounted for by the cost of the repair work following the failure of the first two road sections (para. 3.10). In fact the recalculation of the ERR includes the additional cost of US$4.5 million financed under the Third Highway project, and about US$1.5 million to be financed under the Fourth Highway Project. Replacement of Wooden Bridges 6.11 Ten wooden bridges were replaced. In the economic reevaluation the economic life of this component was assumed to be ten years. Only avoided maintenance costs were considered as benefits. The recalculated ERR is about 12% (Annex 12), a little lower than the appraisal threshold. The recalculated ERR is, however, conservative since it does not consider the cost of the eventual bridge replacement and the elimination of the customary traffic dislocation following trequent bridge failures. Stabilization of Steep Grades 6.12 The surfacing of the steeply graded road sections scattered on the main road network would reduce road maintenance cost and seasonal traffic delays by preventing excessive erosion and wear. The economic life of this component was assumed to be ten years. Vehicle operating cost savings were the only benefit assumed for the economic reevaluation. The recalculated ERR is about 14% as compared to the threshold of 12% at appraisal (Annex 12). Upgrading Classified Road Network 6.13 The appraisal report gave the FYR for the roads to be upgraded. From a total of 428 km only 229 km were done (paras. 3.15 and 3.16). Out of five roads that were actually improved, only two were in the appraisal - 63 - list: RN6-Kirundo, which had a FYR of 63%, while the recalculated FYR is 17%, and Mutambara-Bururi, which had a FYR of 55%, while the recalculated FYR is about 20%. The other three sections had the following recalculated FYR: Muzinda-Bubanza: 15%; Mutambara-Nyanza-Lac: 46%; and Gitega- Muyinga: 23%. 6.14 According to the appraisal report, during project implementation, consultants were supposed to evaluate the ERR of each earth track-proposed for upgrading. Only tracks with an ERR exceeding 15% wordeto be selected. However, the consultants never did the evaluation. On the basis of avail- able information, the ERR for each track section was evaluated. Only one had an ERR of less than 15% (14%), one had an ERR of 15%, and the remaining three tracks had an ERR of 21%, 22% and 33%. Highway Maintenance Program 6.15 This project component consisting of technical assistance, pro- curement of highway equipment, construction of the MPW Laboratory, and procurement of laboratory equipment was essentially a continuation of the previous Highway Maintenance Project (Cr. 467-BU). 6.16 At appraisal, it was estimated that the incremental return on the continuation of technical assistance and renewal of equipment would be about 21%, while the reevaluated ERR is about 27% (Annex 12). Sensitivity Analyses 6.17 Sensitivity analyses have been performed for the different com- ponents assuming a reduction in benefits of 20%, possible with lower traffic growth than anticipated and/or lower savings in unit vehicle operating costs. The results are as follows for the various project components: Recalculated ERR Recalculated ERR Appraisal ERR (Best estimate) Benefits -20% Project Item (%) (%) (%) Overall Project 17 17 12 Bujumbura-Rugombo 16 14 11 a) Bujumbura-Gihanga 18 16 12 b) Gihanga-Cibitoke 16 14 11 c) Cibitoke-Rugombo 12 12 9 Bridge Replacement 121/ 12 7 Stabilization of Steep Grades 121/ 14 9 Maintenance Program 201/ 27 18 Upgrading of the Classified Road Network 151/ 23 16 1/ Threshold set in the appraisal. - 64 - 6.18 Notwithstanding certain limitations of the recalculation, and even if the recalculation is premature because of the economic life of t1hC project started only recently, the project still appears to be economically justified. - 65 - VII. THE ROLE OF IDA 7.01 IDA played an important role in the road subsector. It helped the Government set the subsector priorities better and reorganize and strengthen its road departments, as well as improve and develop Burundi's road system. Also, IDA was instrumental in making the Government aware of the importance of concentrating its efforts on improving secondary roads to gravel standards and maintaining the road network routinely, instead of focusing only on improving roads to bituminous roads. 7.02 IDA supervised the project adequately with two missions per year from September 1979 to the end of 1981, but then it reduced the number of missions drastically. For about two years, from December 1979 to October 1981, IDA did not send any supervision mission to Burundi. This was a serious error, because it was just during this period that the contractor did most of the work on the Bujumbura-Rugombo road. If IDA had sent supervision missions to Burundi regularly, it might have helped the govern- ment supervise the road construction, and detect the first signs of bad work. - 66 - VIII. CONCLUSIONS 8.01 The project was a logical continuation of the efforts started under the Highway Maintenance Project to improve the road network and the road maintenance organization and operations. Ordinarily the project should have been executed without any major problem since it included basi- cally road construction and improvement components which were not parti- cularly difficult. 8.02 The only component that could have caused certain amount of un- certainty was the road maintenance program the objectives of which were to improve the Government's road maintenance capability by training of local staff until maintenance operations became efficient and independent of expatriate assistance. And yet, the most positive achievements were made in the field of road maintenance and improvement. 8.03 On the other hand, the execution of the main project component, the construction of the Bujumbura-Rugombo road, was very disappointing. The contractor went bankrupt, several sections of the road totaling about 42 km (65% of the total length) failed, and an additional US$6 million had to be spent to repair the road. 8.04 Notwithstanding certain limitations of the recalculation, and even if the recalculation is premature because the economic life of the project started only recently, the project still appears to be economically justified. 8.05 Principal responsibility for the failure of the Bujumbura-Rugombo road lay with the contractor and supervisory consultants. However, the Government and IDA should probably have rejected the contractor's proposal to replace the cement stabilization of the base with a mechanical stabili- zation. One of the main reasons of the road failure was penetration of water into the base and lower courses. The absence of cement made the base more sensi-ive to the presence of water, and weakened its bearing capacity. 8.06 Also, the Government could have been more sensitive to the con- tractors compensation claims for the financial losses incurred because of the interruption and disruption of transport to and from Dar es Salaam. The contractor might have done a better work, if not worried about financial problems, and eventually the total cost of the road might have been lower than it actually was. 8.07 The main lessons learnt were: (a) IDA should supervise project components that become diffi- cult during implementation more closely. IDA's objective in supervising projects is not only to ensure that the credit proceeds are used for the purposes for which the credit was approved, but also to help borrowers identify and solve implementation problems. - 67 - (b) A highway subsector training program should have been in- cluded in the project to improve the performance of RD's staff, and consequently to reduce RD's reliance on consul- tants. This type of training was included in the Third and Fourth Highway Projects. 8.08 Other problems encountered during the implementation of the pro- ject were not much different from those encountered in most road projects elsewhere and have not resulted in any particular lessons to be learned. -’細、、‘〕’!’〔’〕’-,, 隊“&&’肆―i 69 Annex 2 PROJECT CONUffb REPORT BURUNDI SECOND HIGHWAY PROJECT CRRDZT 773-W Invest"Ut EEMan Estimated First Year Road Length 00st Return km USV-000 % I# Low Standard Gravel Road Bujumbura-Muzinda 15 310 27 Mutambara-Kigwena 21 450 20 Gitega-Songa 6 160 19 Kigangara-Mvaro is 435 18 Subtotal 57 1,355 2. Improved Earth Road RN6-Kirundo 30 70 63 Intersection RIG3, RIG4- Intersection RIG3. RIG5 6 15 61 Gitega-Makera 11.5 25 56 Mutambara-Bururi 29 80 55 Bururi-Ruzira 25 60 54 Ruhororo-Ngozi 23 55 46 Makera-Mukigo 10.5 25 45 Makebuko-Ruyigi 36 85 40 Makebuko-Bukirasazi 15 30 37 Kihanga-Randa 10 17 33 Kitongo-Ruhororo 25.5 60 31 Makamba-RIG6 36 90 30 Muzinda-Randa 13 25 28 Gitega-Kitongo 31 70 28 Mukigo-Buhiga 38.5 90 21 Randa-Bubanza 11 25 20 Makamba-Mabanda 20 45 17 Subtotsl 371.0 867 TOTAL 428 2,222 - 70 - Annex-3 PROJECT COMPLETION REPORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773-80 1/ Bridges Proposed for Reconstruction Average Estimated Road km Daily Traffic Construction No. Stone River Span in 1976 Cost USDollars Muramvya-Kibogoye RP34 8.000 Mubarazi 8 > 20 44,000 Bujumbura-Bubanza RIG9 11.500 Muzazi 10 125 50,000 Bujumbura-Bubanza RIG9 26.500 Musenvi 12 40 54,000 RN6-Kirundo RIG14 5.000 Kuntega 5 35 30,000 RN6-Kirundo RIG14 10.500 Kuntega 6 35 34,000 RN6-Kirundo RIG14 10.550 Kuntega 4 35 26,000 RN6-Kirundo RIG14 24.800 Buyongwe 5 33 30,000 Gitega-Muyinga RIG2 20.500 Nyakisuma 4 21 26,000 Gitega-Muyinga RIG2 31.500 Muburundi 4 21 26,000 Gitega-Muyinga RIG2 34.500 Mwicomwa 5 21 30,000 Gitega-Muyinga RIG2 44.500 Gitamanuka 5 21 30,000 Mutambara-Bururi RIG6 25.000 Kagoma 5 28 30,000 Boma du Chef- Mabanda RIG7 0.500 n.a. 4 33 26,000 Boma du Chef- Mabanda RIG7 6.000 n.a. 6 33 34,000 Boma du Chef- Mabanda RIG7 17.500 n.a. 6 33 34,000 Boma du Chef- Mabanda RIG7 25.000 n.a. 4 33 26,000 Boma du Chef- Mabanda RIG7 26.200 n.a. 6 33 34,000 Boma du Chef- Mabanda RIG7 26.500 n.a. 6 33 34,000 Gihofi-Giharo RP85 1.000 Musindozi 6 ) 34,000 Gihofi-Giharo RP85 2.500 Musindozi 8 )2/ 44,000 Gihofi-Giharo R85 4.000 Musindozi 6 ) 34,000 TOTAL US$710,000 n.a. - not available 1/ Spans < 6 m will be constructed as box culverts. 2/ Indispensable for agricultural project. Source: Ministry of Works, February 1977 and Appraisal Mission estimates. - 71- Annex 4 PROJECT COMPLETION REPORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773- B Stabilization of Steep Grades Average Road km Daily Traffic Surface to No* Stone Grade in 1976 be Treated Mutambara-Bururi RIG6 9 12% 28 3,600 Mutambara-Bururi RIG6 13 15% 28 1,000 Mutambara-Bururi RIG6 15 12 28 5,400 Mutambara-Buruiri RIG6 21 12% 28 6,600 Nyanza Lac-Mabanda 9IG11 16 12% 22 1,500 Nyanza Lac-Mabanda RIGH 19 12% 22 12,000 Nyanza Lac-Mabanda RIGH 20 13% 22 2,000 Nyanza Lac-Mabanda RIG1 20 14% 22 2,000 Nyanza Lac-Mabanda RIG11 21 15% 22 6,000 Boma du Chef-Mabanda RIG7 5 13% 33 4000 Boma du Chef-Mabanda RIG7 15 14% 33 6,000 Boma du ChefMabanda RIG7 23 15% 33 8,000 58,100 say 60,000 m2 Unit price per G2 includinx draining improvement: FBu 1,500/r2 Total Coat: 1,500 . 60,000 FBu 90,000,000 Source: Ministry of Works, February 1977 - 72 - Annex 5 PROJECT COMPLETION REPORT BURUNDI .SECOND HIGHWAY PROJECT CREDIT 773-BU Procurement of Maintenance Equipment Appraisal Estimate Actual Procurement No. of Total No. of Total Description of Unit Units Cost Units Cost US$'000 Us$'000 Utility vehicle 1 40 - - Multipurpose tractor 1 40 - - Four-wheel drive vehicles 9 90 9 133 Graders 5 350 5 374 Rubber wheel rollers 6 330 2 248 Vibrating rollers 6 78 1 6 Bitumen spreader 1 15 1 18 Loaders 2 120 4 213 Bulldozer 1 80 2 258 Tipping trucks 10 300 6 188 Tank trucks - - 4 153 Miscellaneous - 57 6 49 Subtoral 42 1,500 40 1,640 Contingencies 348 TOTAL: 1,848 1,640 ource: Table 13, Appraisal Report, and Government's Project Completion Report. PROJECT COWMTMN REPORT BURUNDI SECOND HIGHWAY PROJECT (CREIT 773-BU) CONTRACT AWARDS Total Cost Total Cost Net of Taxes Net of Taxes Including Contract Completion Date contingencies Signed AR Contract Actual (US Million) AR Actual I. Main Road Construction 12710 IX.21 09/78 12/80 05/80 05/82 - 14.08 N/A - N/A 12/82 - 0.13 II. Imerovement of Road Network 4.60 4.22 (a) Replacement of Bridges 01/81 09/80 10/82 09/82 0.83 0.69 1/ (b) Stabilization of Grades 01/81 12/81 10/82 08/82 1.17 1.54 2/ (c) Upgrading of Earth Tracks 1/ by force account 11/78 12/81 - 02/82 1.02 1.31 T/ by contract 01/81 12/81 10/82 08/82 1.58 0.68 5/ III. Consultant Services 4.30 4.39 (a) Supervision of Road Construction 05/78 12/80 05/80 06/82 0.78 1.32 (b) Engineering and Supervislon of Road Network Improvement 04/79 03/80 11/82 10/82 0.55 0.57 (c) Technical Assistance 03/78 12/80 02/82 02/82 2.97 2.50 IV. Maintenance Equipment 08/79 2/79 04/80 N/A 1.85 1.64 V. Improvement of MPN Laboratory 0.32 0.59 (a) Technical Assistance N/A 06/80 N/A N/A 0.12 0.12 (b) Equipment and Vehicles 12/80 03/79 02/81 08/82 0.08 0.23 (c) Building Construction 02/80 09/79 05/81 03/83 0.12 0.21 N/A - N/A 10/82 - 0.03 TOTAL 23.97 25.05 03 I/ Excluding repair work. US$4.5 million already done and financed under Credit 1132-BU; and US$1.5 millior to be financed under the 0 4th Highway Project. 2/ Only 10 bridges instead of the planned 21. 3/ No bituminous surface treatment actually done. 4/ 207 km upgraded, instead of the planded 371 km. T/ 22.60 km upgraded, instead of the planned 57 km. -74- Annex 7 PROJECT COMPLETION EORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773-lu Disbursement by Category (in 98$) Allocation to Actual Credit Agreement Disbursement 1. Civil works (Part A of project) 5,540,000 6,808,330.93 2. Civil Works (Part B and P.3 of 3,100,000 3,072,046.9 Project) 3. Road Maintenance and laboratory 1,500,000 1,537,902.72 equipment (Parts E and F. 2 of the Project) 4. Consultants' services (Part C.1 270,000 1,102,882.99 of Project) 5. Consultants' services (Parts 1,280,000 1,478,836.67 C.2, D and P.1 of the Project) 6. Unallocated 2,310,00 0.00 14,000,000 14,000,000.00 - 75 -ANNEX 8 PROJECT COMLETION REPORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773-BU Record of Credit Disbursements ACCOUMLATED DISBURSEMENTS IN THOUSAND OF U.S. DtLAR EQUIVALENT IBRD/IDA ACTUAL DISBURSEMENT AS A FISCAL ACTUAL PERCENTAGE OF APPRAISAL YEAR AND DISBURSE- APPRAISAL ESTIMATE (I * 2) QUARTER MENTS ESTIMATE 1 2 3 1978/1979 Sept. 30, 1978 Dec. 31, 1978 March 31, 1979 1.00 0.0 June 30, 1979 2.00 3.30 60.6 1979/1980 Sept. 30, 1979 2.93 4.70 62.3 Dec. 31, 1979 3.43 6.10 56.2 March 31, 1980 4.93 7.90 66.2 June 30, 1980 5.50 8.70 63.2 1980/1981 Sept. 30, 1980 6.24 9.70 63.9 Dec. 31, 1980 7.37 10.80 70.1 March 31, 1981 8.49 11.80 74.2 June 30, 1981 8.84 12.90 68.5 1981/1982 Sept. 30, 1981 9.52 13.20 72.1 Dec. 31, 1981 10.20 13.60 75.0 March 31, 1982 11.51 13.80 83.4 June 30, 1982 12.74 14.00 91.0 1982/1983 Sept. 30, 1982 13.58 97.0 Dec. 31, 1982 13.91 99.4 March 31, 1983 13.96 99*7 June 30, 1983 13.96 99.7 1983/1984 Sept. 30, 1983 14.00 100.0 Dec. 31, 1983 -76 Anex9 Page 1 of 5 ROUT NATIONUA N* - loomUIA R00 1. INTlRODUCTION Le deuxiée projet routier - crédit 773 M prévoyait dam es composant.- Travaux A l'entrepris. - la construction de la route nationale a* 5 BUJUMURA- I000M0. Le présent rapport précise les aspect& teohaiquee et financiers du projet, les difficultés rencontrées et les slutions adoptées, un jugement sur la conception du projet et une appréciation sur l'entreprim. et le Consultat. 2. FINAUCEMIT 2.1. des Banque Mondiale 92,3 % Budget Extraordinaire d'nveetiasuent du Surundi (BEU) 7,5 % 2.2. Travaux Banque Mondiale 6.858.000 8 - 43,85 % Banque Arabe pour la Développement Economique sn Afrique (BADEA) 5.855.555 S - 37,44 % BEIB 2.2â - 18,71 % Total 15.639.355 S 2.3. Surveillance des travaux Banque Mondiale 92,5 % BEIB 7,5% Les études ont été réalisées on 1974 par le Bureau d'Etudec La chaussée était couque de la snière suivante - Revétement bicouche avec couche d'accrochage - Couche de base en graveleux de quarts ou de Calcaire stabilisé à 3 % de ciment et d'épaisseur uniforme de 0,15 a. - Couche de fondation on graveleux de quatrz ou de calcaire d'une épais- seur de 0,15 a A 0,25 a. - Couche de forme de 0,40 a compactée A 95 % OPR aur les 20 cm supérieurs dans les zones où le CU du terrain naturel est nettemest insuffisant. Le projet prévoyait également la construction de 7 ponts droits en béton armi à double voie de 10 A 25 a de portée et de 2 dalots (4x2) de 46 a de longueurs. . / . 77-Ane. 9 YagarTt 5 drag - MPANDA - Poat droit de 25 . d'overtue - KmE - Post droit de 10 a d'overtuft - NYAMTANIGA Dalot 4 x 2 a d'ouverture - Nar DAfa -. ePst drnit de 10 a de potée - AGDNDU - Post droit de 25 a de portée ~UKE - Delot de 4 x 2 a de portå. . rmUAi • Post drott de 25 a de portå SMUURA - Post dreit de 15 a de portée NANAGmAA - Poat drit d 10 de portiø L"%aiisemmnt &tatt ostitué de - øa48 loatudaeu traøsotdaux noa r~VIts - ioeés longitudinaux trapåseIdu retuø m b4tos • Foenio umgo=n4o reatagulaires r Tosa de gard. - Ytlots d'au • Foemåa coilleteur et åvwcmateura - Bugg* de diametre ø 1,00, 0,80, 0,60 a. Le projet co~preait galemeat la costrwmtioa d'u ca~a d'am*tisement du PK 3,89 au PK ?,54 eiaøi que la ooastratio de mure de aoutåsmet. Los caractårintique géåtrique de la route ltaieat les uivaat: - Logseur de la ronte 66,030 km - Largeur du rev&t=eet m5 algesmt droit 5,50 a Accoto~ente 1,5 trattå m remblai Largeur de la coche de base : 5,50 a Largeur de la ouhe de fondatioa : 5,50 a Deoerg : entre 3 et 10 % Peste logitudi~ul : mxn 7 0 Rayo enim : 190 . ?lua om d"blae 1/3 -1/5 Taluas m reebas 3/2 Le dimesiommesent de la chaømø e6 t besm ar ume charge axile de 13T par esmnies, 4. ZET!ON DES IAVAUX Å.1. Etrerisø A La suite de La prémbleotiom, 6 ontreprie ont åté roteauem Atmex 9 -78 - Page 3 of 5 Deux oatreprises eulment ost rsa me offre, le ler auût 1978 L'etepriae Dm3 b VANM Vmh a åté déuigée adjudieataire de* travaux. La lettre de comende a* 720/1142 est datöe du 19/9/78 et porte mr um ~ntamt de 921.116.067 MDU. L*Asumtatteasaestané C3-ASTmD*, deuxAUme *ni~c si maire, avait présemté ne offre de 1.012.2~,0.482 Mi. 4.2. Délaje d'exécution Le d4la$ d'exéutioa tait de 18 st à partir de 614m. jour copté i partir de la date de réceptios de la lettro de ~ ~nne sett du 27/9/78 au 27/5/80. Prolongation du déla contraetuel Le coaflit entro 10~gnda et la Tsaae p~ geq des difttiultés d'achemi- nemet du satériel, la påatie de arburat ma 1980, l'augeatattoa des quatités (5% eavea)et de la nature dec travaux de tertamsemenmt ot coduit 'Admintotra. tioo å prolonger le9 dålala juqu'an 31/1281. 4.3. Modifieatioe apportées au ~;et 4.3.1. Profil- em traEr E l achue2 ~ Le revtement a åté port& de 5,5 a 1 6 a, les acooteesta étant réduita de 1,50 a å 1,25 a et traités en matéraux de bas. et de fondation. 4.3.2. Couche de bage La couche de bas prévue es graveleux stabiligé au cimeot a té remplacé* par une couchh/ * e bétom de sol miveat la varimato proposée par l'eatrepriae. 4.3.3. Ac0ot=§=nt Les accotenesta prévus iaitialemet eu matériaux de reublai ont été exécutés en ~6e temps que la o ahmc& es catérlaux de base et de foadatioa. 4.3.4. Modification de trasé Le tracé a été medifté entre les PK 38,6 et 45,8 etrainat des ohangenta dans les oubatures ot lee ~ 1atit4 de 9 la zouvelle route 9*4cartaat de la pist* existamte. - Modificatioa ds trasé das la traverake de RUGMB= pour åviter une conduite d'eau. - Modificattoa ds tracé ~ 600 as PK 25,8 du. au déplacement du dalot de la KATUNGUR vers l'temt de 15 al. 4.3.5. äA~ ant - Suppressioa du ca~al estre les PK 3,89 et 7,54 - Certaies buses måtalllques omt åté replacées per des dalots en béton armé. - Le dalot de la NYAITANGA de 4 x 2 a été remplacé par deux dalota de 2,5 x 2,00. - Remplacenent de la bss aO 166 pr im dalet de 1,20 a 1,20 - Suppresson des auvelles b~cos etre les P 0 et 19,000. Am«e 9 Page4 of 5 - 79 - 4.3.6. Modification de la limn. rMuIe La ligne rouge a étà relvée entre le P 0 et 23 4.3.7. Nur de soutènement d' 46420. Compte tenu de la présence d'une couche de sahle dans les déblais de la MURIRA entre les PK 49,420 et 49,520, il a été féaeaMire de enstruire un sur de soutnement es mellons &n« prévu su projet. 4.3.8. Ouvrages d'art Resplaceent du pont sur la KATJM par un triple dalot, solution adoptée suite aux problèes d'ordre technique que pose la fondation des culées d'un pont sur un .ol instable. 4.4. Difficultés rencontréem Les principales difficultés d'ordre techniques étaient dues à la mauvaise qualité des sols rencontrée qui ont entrainé la modification sit de tracé soit des fondations des ouvrages d'art. 4.5. Matériel de l'entreurise Le atériel utilisé par l'entreprise était dans up état de vétusté avancé. Les engins de terrasemnents étaient eeastament en atnne et sur 4 scrapers, 2 étaient toujours à l'arrt pour réparatione. L'approvisionnement des pièces de rechange n'était pa régulier et le matériel était immobilisé pour des pases biaignes. Le matériel de repfadage était en avoie état ce qui a conduit à la réaliation d'un revêtement défectueux. E fin de chantier, le matériel était hors d'usage Plus ue la woitié du pare était iàmobilisé par manque de pneumatiques et de pièces détachées. 5. SURVEILLANCE DES MAVAUX La surveillance des travaux a été confiée au Bureau d'études . Les travam d'ahèvement exécutém ensuite par ont été surveillés par 1 'Admaiatffties. 6. REPON PROVSO!EE. MMNIT1U -AAR L'entreprise Vamt tait faillit. en Mai 1982 alors qu'il restait 1180 m de route à terMiaer, la réseptioa provisoire n'a jamais été prononcée. Les travaux du PK 64,858 an P 66,038 ont été achevés par l'entreprise 7. SITUATION FINANCID La situation du projet se présente comm suit 1. Etuges 15.419.250 FEU 2. Surveillace 99.738.469 mu Révision des prix 18.621.156 F81 3. Travaux (facturatica) 1."0.878.223 Ma - Révision des prix + 383.337.667 MEU Annex 9 ageTof 5 - 80 - Factures impayées suite à la faillite de l'entreprise - 57.638.478 nu. Récupération sur la caution de bonne fin - 65.558.332 FBU. Finition des travaux + 11.851.368 FBU 1.278.870.448 FBM. Coût total de la construction 1.412.649.523 FBU 8. COMMWITAT=TS DE L 'ADNNISTRATION SUR LA CNCEPION D PROJE , L' REPRISE wr LE CONSLTANT. 8.1. Conception du 2210t. Au vu des réalisations, on peut dire que l'étude a été de qualité très moyenne. Plusieurs modifications de tracé ont été nécessaires. La traversée de la plaine inondable de l'Imbo a été mal étudiée e rapport avec 1'asainissement de la route et le relèvement de la ligne rouge dans cette ,région a été obligatoire. Le rapport géotechnique a été correctement fait mut peut-être pour les fonda- tions de certains ouvrages d'art où des modifications ont dû être apportées en cours d'exécution. 8.2. Entreprise L'entreprise est, en partie, responsable des difficultés actuelles rencontrées sur la 11 5. Cette entreprise, qqui n'existe plus à l'heure actuelle, n'a jamais donné entière satisfaction. Manque d'organisation, cadres incompétentm,tréuorer±e insuffimante, mauvaise gestion, matériel vétuste ont été constatés tout au long des travaux. 8.3. Consultant Le Consultant a également sa part de responsabilité dans la ruine de la Route Nationale a* 5 (N 5) entre les Pt 5 + 500 et 50 + 000. La mission de surveillance n'a pas été remplie correctement et un certain laxisme vis-à-vis de l'entreprise a permis s» eéati«n des travaux non conforme aux règles d'art. Plusieurs oomespofdases et 6êwbangées avec le Bureau d'études en vue d'obtenir réparation du préudiee «me ,% par l'Administration maie sana résultat jusqu'à ce jour, refusant de recomatre ses torts. -81- Annex 10 Pace 1 of 2 PROJECT COMPLETION REPORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773-BU Compliance with Major Credit Covenants Section of Credit Covenants Agreement Action The Borrower shall: (i) not later 4.02 Government prepared a summary of than April 30, 1978 prepare and fur- investments in the transport sector nish to IDA a road investment program for its Third Five-Year Plan for a least five years and exchange (1978-82). This document included views with IDA thereon; and (ii) the improvement to paved standards of adopt such program and from time to the BuJumbura-Rutovu (to be financed time review its execution with IDA. by China) and Gitega-Gihofi (to be financed by West Germany) roads. IDA questioned the adequacy of investment in these two partially competing north-south roads. Construction of both roads was implemented. Otherwise, Governments investment program for the highway subsector was satisfactory. The Borrower shall:- (i) no later than 4.03 Two different services were created June 30, 1978 prepare and furnish to within the Roads Department, one for IDA a plan of action to assign the construction and maintenance of gradually to two different roads in Bujumbura and another for departments within the MPW the the maintenance of the national responsibility for the construction network. The Government prepared the and maintenance of roads in Bujumbura decentralization of road maintenance and in the rest of the country; and responsibilities by creating four (ii) thereafter carry out such plan. road maintenance zones and services in the country. IDA assisted in the implementation of this project. The Borrowerf shall: at all times 4.04 The Director General of the M was maintain the position of coordinator designated for this position. He has for the Borrower's road investment the necessary qualifications for this program and employ for this position position. a competent and experienced person. 82 - Annex 10 Page ? of 2 'The Borrower shall: (i) adequately 4.05 The maintenance of the road network maintain its national road network; and of the maintenance equipment has (ii) adequately maintain its mainte- improved gradually under the project. nance equipment; (iii) provide work- Government's budget allocations for shops and spares as required; (iv) road maintenance increased in real proptly provide funds, facilities terms in the project's years and and services for the foregoing inclu- maintenance budgets were ding an amount of no less than satisfactory. In 1982, however, the US$2,500,000 equivalent for FY78; and maintenance budget, although in (v) discuss yearly by October 31 the compliance with the covenant was adequacy of such amount with IDAo reduced compared to 1981. The Borrower shall take all measures 4.06 Consultants providing technical reasonably required to ensure that assistance to RD were asked to review the dimensions and axle loads of ye- the legislation concerning vehicle hicles using its national highway axle loads They completed the network shall not exceed limits con- review during th first quarter of sistent with the design standards of 1982 and proposed miar changes in such roads. legislation related to the network included in each axle load category. New vehicle weight legislation is being prepared in coordination with relevant legislations in Rwanda, Uganda, and Kenya, which will allow 10 tons per axle. ArnInex 11 - 83 - I N ~ - i,i P . 101. - - al -- -I ----- I I I I I I I I I I lå maan a1 I saa es ø i c 0% 0 0% 0 - -s å PROJECT COMPLETION REPORT BURUNDI SECOND HIGHWAY PROJECT CREDIT 773- BU Economic Reevaluation (FBu Millions - Early 1982 Prices) Stabilization Replacement of Wooden Bridges of Steep Grades Maintenance Program VOC Haint. Cost VOC Cost Benefit Cost Savings Cost (Net Increase) Savings 1978 - - - - 78.1 - 79 - - - - 105.2 12.1 - 80 - - - - 124.8 16.2 107.0 81 - - - - 114.3 19.4 127.9 82 54.2 - 120.2 - - 19.4 136.2 83 - 7.9 - 19.4 - 19.4 143.0 84 - 8.3 - 20.4 - 19.4 150.2 85 - 8.7 - 21.4 - 19.4 157.7 * 86 - 9.1 - 22.5 - 19.4 165.6 87 - 9.6 - 23.6 - 19.4 173.8 88 - 10.0 - 24.8 - 19.4 182.5 89 - 10.5 - 26.0 - - 90 - 11.1 - 27.0 - - 91 - 11.6 - 28.7 - - 92 - 12.2 - 30.1 - - ERR 11.66% ERR = 14.16% ERR 26.96% Source: Consultant Report. g APPENDIX 1 - 86- Page 1 of 3 E-886/86 May 16, 1986 French (Burundi) OED OTS:jb Repub'ic of Burundi Ministry of Public Works, Energy and Mines Directorate General of Highways Bujumbura, Burundi Bujumbura, April 29, 1986 Mr. Yukinori Watanabe Director, Operations Evaluation Department IBRD, Washington, D.C. No. 723/255/DGR/KA/86 Your ref.: Your letter of February 24, 1986 Subject: Evaluation Report Burundi. Second Highway Project (Credit 773-BU) Dear Sir: I have the honor to ackr.owledge receipt of the draft version of the evaluation report on the Second Highway Project. In accordance with your request, I am attaching my comments on this draft. I must, however, draw your attention to the fact that these co.ments can only relate essentially to the aspects of the report that come under the Directorate General of Highways. They do not therefore in general extend to the other fields, such as those concerning the economy, the country's financial situation or general policy. Yours, etc. /s/ Franqois NAHIGOMBEYE Director General of Highways [stamp: Ministry of Public Works, Energy and Mines Directorate General of Highways] Attached: Comments on evaluation report. APPENDIX 1 -87 - Page 2 of 3 COMMENTS OA THE TECHNICAL tS.7CTS OF THE WORLD BANK'S DRAFT EVALUATION REPORT ON 7HE SECOND HIGHWAY PROJECT Page i. ABEDA contribution: this was US$6.0 million and not US$6.1 million. Belgian contribution: US$600,000 (not mentioned in report). Page xi. The report states that the Government did not wait to receive written confirmation from IDA headquarters of the verbal commitment of the field engineer, before placing the order for the repair work on RN5. It should be noted that this work was then extremely urgent, since the amount of deterioration was increasing from day to day. The total cost depended very much on how quickly the work could be done. The Bank engineer was well aware of this urgency and the Burundian authorities had understood from their discussions with him that they had the green light to place the order immediately. Page 2, para. 2. Tea exports could also be mentioned, in addition to those of coffee and cotton. Page 5, para. 6. This should read "Route BujumCura-Nyanza Lac" and not "Lac de Nyanza." Page 6. The text between "Le premier pro-jet routier a 4t6 6value une premiere fois en 1971" and "Unt nouvelle 6valuation a eu lieu en 1973...." should be omitted, because it does not in fact reflect the situation at the time. Page 15, comment at bottom of page, para. 3. The corrective measures proposed by the consultant who supervised the execution of RN5, when the contractor requested acceptance, were essentially superficial works. The results of laboratory tests performed after his departure showed that the causes of the deterioration were deep-seated and that, over long sections, only complete and extremely costly reinforcement would make it possible to save the road. Pages 18-20, para. 22. The conbultant acknowledges being responsible for detecting errors and pointing them out. These errors are for instance the use of poor quality materials for the foundation and base courses, and inadequate compacting. APPENDIX 1 -88 - Page 3 of 3 However, it was only after these errors :.--d been made and the road was finished that he took action, though immediately, by having the unsatisfactory works restarted. Page 22, para. 28. The Government was not opposed to the dispute between it and the contractor )eing submitted to arbitration. However, it did not favor this procedure, which it considered pointless. Page 23, para. 31. Same comment as for page i. Page 27, para. 37. The report states under the heading of "Macroeconomic Context" that Burun't's situation worsened steadily from 1974 to 1984. A sweeping statement of this nature should be backed by facts and figures, if it is retained. In general, although the purpose of the evaluation report is to critically review the execution of the project, it seems to us that the terms used do not at times reflect the precise situation of the country, its economy or the project itself; they are therefore exaggerated and should not have been used. [stamp: Ministry of Public Works, Energy and Mines Directorate General of Highways 긷 , I- I - y0btkibre. MU 1911 A Makwo Uwa R1 0 WUMBUR M 'so Rusongo TEGA, GI 4 % hein'o OM90 otAunshe RuyiGi 8 wolo LU (I ya akebuko 'Auhro muturnbo To K,bo d-c a sh b, yonge y Buk"osoz' Kanii,ya Mylnyo Toro 10 G, or Minago Ruzrr <A-3 < Kvyarn Paved Roads Rtuitovu ?aveci Roads Under Constructio- BURURI d. Ch*F N Ear rh/Gravel Surfaced Roads 6 .............. 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