Philippines - First Rural Infrastructure Project

Document of The World Bank FOR uFFICIAL USE ONLY Report No. 7948 PROJECT COMPLETION REPORT PHILIPPINES RURAL INFRASTRUCTURE PROJECT (CREDIT 790-PH) JUNE 30, 1989 Adra-hure Operations Division Couintry Department II Asia Regional Office This document has a restricted distribution and mat be used by recipients only in the performance of their official luties. Its contents may not otherwise be disclosed without World Bank authorizstion.  CURRENCY EQUIVALENTS Currency unit - Philippines Peso (O) P 1 - US$0.135 US$1 - 1 7.40 WEIGHTS AND MEASURES 1 ha - 2.47 acres 1 km - 0.62 miles 1 sq km - 0.386 sq mile 1 m - 3.28 ft 1 sq m = 10.76 sq ft 1 cu m - 35.31 cu ft 1 M cu m 3 810.7 ac ft 1 mm 0 0.039 in 1 kg - 2.2 lb 1 cavan = 50 kg 20 cavans = 1 m ton ABBREVIATIONS ADB - Asian Development Bank AID - Agency for International Development BAE - Bureau of Agricultural Extension BBR - Bureau of Barangay Roads BHS - Barangay health Station BPI - Bureau of Plant Industry BPW - Bureau of Public Works CCC - Cabinet Coordinating Committee on Rural Development CP - Cooperative Program CPO - Central Project Organization DAR - Department of Agrarian Reforms DLGCD - Department of Local Government and Community Development DOH - Department of Health DPH - Departmont of Public Highways DPWTC - Department of Public Works, Transportation and Communications FAO - Food and Agriculture Organization FSDC - Farm Systems Development Corporation ISA - Irrigation Service Association MLWL - Mean Low Water Level NEDA - National Economic and Development Authority NFAC - National Food and Agricultural Council NGA - National Grain Authority NIA - National Irrigation Administration O&M - Operation and Maintenance PDAP - Provincial Development Assistance Program PDD - Project Development Department PMS - Proj ect Management Staff PPA - Philippines Port Authority PPDS - Project Planning and Development Service PRIP: I - Philippines Rural Infrastructure Project: I RB - Rural Banks RHU - Rural Health Unit UPRP - Upper Pam panga River Project WHO - World Health Organization GLOSSARY Barangay - Village GOVERNMENT OF THE PHILIPPINES FISCAL YEAR January 1 - December 31  THE WOPLD BANK Wash.ngton. D.C. 20433 U.S.A. 0ke d owf tm.GmC i June 30, 1989 MHDORANDWM TO THE EMECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Philippines Rural Infrastructure Proiect (Credit 790-PH) Attached, for information, is a copy of a report entitled "Project Completion Report on Pnilippines - Rural Infrastructure Project (Credit 790-PH)" prepared by the Asia Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their ofmicial duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT PHILIPPINES RURAL INFRASTRUCTURE PROJECT (CREDIT 790-PH) Table of Contents Preface ............................................................ i Basic Data Sheet. ii Evaluation Suammry .................................................. iv OVERVIEW OF THE PROJECT COMPLETION REPORT General. 1 The Project. 2 Project Cost and Financing. 2 Implementation. 3 Project Impact. 5 Bank Performance. 8 Lessons Learned. 8 BORROWER'S PROJECT COMPLETION REPORT NMAPS .11 I. BACKGROUND .49 II. PROJECT FORMULATION AND APPRAISAL .50 III. PROJECT IMPLEMENTATION .52 IV. PROJECT COST AND DISBURSEMENT .61 V. INSTITUTIONAL PERFORMANCE .63 VI. ECONOMIC REEVALUATION .66 VII. BANK'S PERFORMANCE .73 VIII. CONCLUSIONS .75 ANNEXES MAP: IBRD 13274 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.  PROJECT COMPLETION REPORT PHILIPPINES RUkAL INFRASTRUCTURE PROJECT (CREDIT 790-PH) PREFACE This is a Project Completion Repo-t (PCR) on the Rural Infra- structure Project-I, for which an IDA credit in the amount of US$28.0 million to the government was approved on April 21, 1978. The credit was closed after two extensions totalling 2-1/2 years on June 30, 1986. The undisbursed balance of US$6.5 million was cancelled. The Project Completion Report (PCR) was prepared by the Department of Public Works and Highways of the Government and an Overview of the PCR was prepared by the Agriculture Operations Division, Country Department II, of the Asia Regional Office. The PCR Overview is based on a review of the Staff Appraisal and the President's Reports, the credit documents, other records on Bank files, and on discussions with Bank staff. This PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower on May 31, 1989, for comments by June 20, 1989, but none were received.  - ii - POJECT COWLETIOlr REOT RURAL DPA3ThUCTURE PROJECT I (CREDIT 790-PFi BASIC DATA S1EET KEY PRMJECT DATA Appraisal Actual or Actual as X of Exectation Current Estimate Asereieal Estimate Projoect Coat (US$ million) 59.9 48.8 61.9 Credit Amount (USN million) /I 29.6 21.6 77.0 Dot. Board Approval 64/11/7S Date EffectIven ee *7/2x/79 Date Physical Components Completed 12/41/92 so/w/Uo 196.6 Closing Date 12/31/65 U6/9/S6 165.6 Economic Rote of Return (3) /b 17 17 1 Financial Rate of Roturn (X) n.s. n.e. CUMULATVE DISURSEMENTS FY79 FYUO FYS1 FY62 FY65 FY34 FY3S FYIS Appraisal Estimat (USS million) 6.2 6.5 14.0 21.6 26.6 29.9 23.6 269. Actual (US million) - *.6 2.6 7.2 10.2 14.8 17.6 21.5 Actual as I of Entima-e - 14.6 17.9 54.5 69.2 61.1 Data of Final Disburament 67/16/SO Principal Repaid to 12/15/67 (USS million) O."I STAFF INPUTS (staff weeks) FY76 FY76 FY77 FY73 FY79 FYU9 FY61 FY62 FY65 FY64 FY6S FYSO FY67 FYS9 TOTAL Preappraisal 11.6 .0 22.0 6.6 42.1 Appraisal 37.9 63.9 91.7 Negotiations 7.2 7.2 Supervision 1.6 18.7 26.4 9.2 9.6 6.5 11.9 6.7 6.9 O.6 9 .1 99.1 Other t.1 0.2 2.2 0.2 2.7 Subtotal 11.7 .0 59.9 73.5 16.6 26.4 9.2 9.6 6.J 11.6 6.7 6.9 0.0 1.1 242.7  MISSION" DATA Date Ne. of Staff/Day* Speei.lizatio. Permeme. Typs of (selvr) Porsons In field nrog *Otit Trl is Prabhw 1! Identifioation 11/75 4 in2 A,Ee,Em(2) - - - Prepratien 06/76 5 1 A,E,,E*(&) - - - Appraisal 1 1/77 7 lu A(2),Ec(2),En(8) - - - Appraisal 2 11/77 b 1t Ec.En(4) - - - Subtotal 21 470 Supervision 1 17/7? 2 12 En(2) 1 2 - Supervlsion 2 9a/79 a so En(t) 1 1 - Supervision a 19/79 2 St Eni) 1 2 N Superv;sion J(o)* 'J/9 1 14 En 1 1 - Supervision 4 " /66 4 24 A,En(3) 2 2 N Supervision 4(c)o 10/6 1 En - - - Supervision 5 68/61 2 14 En(2) 2 1 i Supervision 5(a)e 56/61 1 a En - - - Supervision 6 08/82 1 7 En 2 1 UT Supervision 7 *J/J8 2 26 En,Ec 2 a UTF Supervision 3 16/83 2 6 En(2) 2 1 MTFP Supervision 9 638/4 1 7 En 2 1 bTFP Supervision 1 11/64 1 1i En 2 1 MFG Supervision 11 16/"U 1 16 En 2 - - Subtotal 24 2eo Total 46 670 3 Not full ission--SPN of one component only. OTHER PROJECT DATA Borrowor Republic of the Philippinos Executing Agency Departmnt of Public Works and Highways (OPEl) National Irrigation Administration (NIA); and Department of Health (DON) Fiscal Year jnanuary 1 - D e _ r *1 Cofinanciors None Nome of Currency (abbroviation) Peso (P) Currency Exchange Rate Appraisal Year Average 1978 USU110 * 7.37 Intervening Years Average 1962 USS11 * 8.37 Completion Year Ave-age 196 USSIl. u 2 .60 Follow-on Project: None la The undisbursed credit balance of US86,481,600.6J was cancelled *ffective July 11, 1906. lb The weighted ERR on the basis of relative costs of the irrigation, roads and posts components of the ML project. benofits from the health and eater supply components wero not quant;iled et appraisal and completion. /e A a agriculturIst; Ec z eonomiat; En a engineer. 1d I a problem-free or minor problemo; 2 a moderate problems; and * a major problems. L 1 * improvIng; 2 a stationary; 8 a deteriorating. f F a financial; M a sanagorial; T a technical; P a political; and 0 a other.  i-iv - PROJECT COMPLETION REPORT PHILIPPINES RURAL INFRASTRUCTURE PROJECT (CREDIT 790-PH) EVALUATION SUMMARY Objectives 1. The Philippine Rural Infrastructure Project-I was an effort by the Government of the Philippines to raise the socio-economic conditions of the rural population in six provinces by providing relatively small-scale infra- structure works. The project aimed to establish: (a) communal irrigation systems; (b) barangay (village) roads; (c) small ports; (d) barangay health stations; and (e) rural water supply facilities. Implementation 2. IDA Credit 790-PH for US$28 million became effective on July 20, 1978. This represented the entire foreign exchange component of the project, or 48 percent of the total cost of US$59 million. At appraisal, disburse- ments were expected to be completed by December 31, 1983, one year after the scheduled completion of all project works. However, the implemenLaLion of the project took about four years longer than predicted at the time of ap- praisal. Delays were caused by severe weather conditions, lengthy adminis- trative procedures, peace-and-order problems, shortages of materials, con- tract modificati ns necessitated by price increases, funding delays and contractor difficulties. 3. Difficulties that arose in the renegotiation of the fees of consultants involved in the detailed engineering phase of the barangay roads project delayed construction bidding for almost two years. Some of the sites proposed for roads or irrigation systems were found tc have low expected economic returns or to present technical difficulties, so they were abandoned in favor of more favorable locations. Ports also suffered delays mainly due to the inability of the contractors to finish the work because of rising costs and technical difficulties. The health station and rural water supply components experienced some slippages, but were generally completed on time. Due to lower than expected costs, the number of water systems constructed under the rural water supply component increased to 477 from the appraisal proposal of 300. Overall management and coordination of work among the different agencies responsible for the different components was also more complicated than anticipated at appraisal. Results 4. By the end of tho extended project period, about 90% of project targets had been met. A total of 1,012 km of barangay roads were constructed or upgrad- ed, including 110 km of access roads to communal irrigation systems and health stations. This represented about 73% of appraisal. Post-project economic  v analysis shows an increase of land put undtr cultivation and an increase in the value of production due to the roads. With the completion of the irrigation component, 43 communal irrigation facilities were constructed or improved. The area provided with irrigation facilities increased from the appraisal estimate of 9,400 ha to 9,589 ha. The PCR assumes somewhat higher yields and zropping intensities than those used at appraisal. These values are not unrealistic for small communal systems, where intense farming efforts are exercised. As planned, 60 health stations were completee serving about 213,800 patients in 1985. The main beneficiaries were the estimated 132,500 poorer families in the area. Construction on two of the three ports targeted for rehabilitation has been completed, while work continues on the third. Traffic at these ports has risenL significantly from 1975 to 1985; in San Jose de Buenavista, from 15,000 tons to 26,000 tons; in Dumaguit, from a negligible amount to 10,000 tons; in Culasi, from 100,000 tons to 125,000 tons. 5. The project ERR varies among the different components, but overall the returns are quite good. Based on the post-project economic analysis, 11 of the 13 test barangay roads showed returns between 11.82 and 23.8:, compared to the appraisal projection of 15Z. Based on an analysis of eight sample irrigation systems, the project ERR is about 30Z, com,ared to the appraisal projection of 212. Ports also show a positive ERR, with returns at 182 at San Jose de Buenavista, 23Z at Dumaguit and 342 at Culasi, compared to the average of 25Z anticipated at appraisal. The ERR was not calculated for the rural health station or water supply component,-, but the relatively low costs, at US$4 per family for health care and US$26 per person for water supply, are judged to be justifiable when compared with the observed benefits. Disbursements and Costs 6. The Credit Ciosing Date was extended by two and a half years from December 31, 1983 to June 30, 1986, to enable completion of the balance of the project, especially road construction. US$21.5 million of the US$28 million had been utilized by the expiry of the credit. 7. The final project cost in US dollar terms was US$48.3 million, some US$ll million (18Z) lower than the appraisal cost estimates of US$59 million. The final project cost in local currency equivalent was considerably higher (42Z) than the appraisal estimate (P 436.6 million at appraisal cf. P 618.5 million final cost). Sustainability 8. The project design concentrated mainly on implementation aspects and made only passing references, largely through legal covenants, to maintenance of the facilities after construction. At the time of appraisal maintenance problems were well known to the Bank and were raised as issues during processing. Poor or inadequate mainternance is a problem affecting the sustainability of these infrastructure investments. In particular, there has been little maintenance of any of the rural roads financed under the project (the largest component) and none have been transferred to a maintenance basis. These problems have a national perspective, however, reflecting overall resource constraints and policies, such that project- specific maintenance deficiencies are difficult to resolve.  - vi - Lessons Learned - 9. In forecating the implementation schedule, the appraisal mission could have taken a more realistic view of some of the factors which could hinder implementation, including: speed and efficiency of goverrnent procedures; likelihood or frequent difficult weather conditions; geographleal dispersion of project works; contractor availability and quality; possible peace and order problems; likelihood of the need to modify enginoering designs and works contracts; financial difficulties likely to face the country. 10. The design and costing of specific works such as ports were not sufficiently advanced at appraisal, as seen by the difficulties encountered in implementation. Although more flexibility was possible during implementation in respect to smaller, less complex infrastructure (e.g., rural roads, irrigation, water supply and health facilities), port construction requires careful preliminary planning and design.  PHILIPPINES RURAL INFRASTRUCTURE PROJECT-I (CREDIT 790-PH) PROJECT COMPLETION REPORT Overview (General 1. Thii v'-,erv lew is based on the Project Completion Report (PCR) of the Philippine R-i: Tnr:rastructure Project-I (PRIP-I) prepared by the Department of Public Works arn1 Highways (DPWH), the implementing agency of the Government of the Philip.f'i.z"- GOP), and on the Bank's Appraisal Report, President's Report, Credit Agreeuient, Bank supervision mission reports and informacion in relevant Bank -' Ies. The PCR reflects the findings and opinions of Government officials closely .ssociated with the project and, in general, presents an objective view of project implementation, performance and impact. The Project 2. Proiect jje cctives. PRIP-I was an effort by GOP to raise the socio- economic conditions of the rural population in six provinces, namely Abra, Kalinga-Apayda, Bohol, Aklan, Antique and Capiz, which were selected on the 1,asis of their low k vel of per capita income and the need for rural infrastruct.ral tacilities. This multi-sectoral, integrated project was (ieSignedi primarl to provide relatively small-scale infrastructure works in these provinces. The project aimed to establish: (a) communal irrigation systems: { 'Paaiigay (village) roads; (c) small ports; (d) barangay health stat-ions: ei rural water supply facilities; and (f) proposals for a follow-up r ro oe e t i. Thel irterent components of the project were meant to be ';omrlemertary. isolated rural farmers having few marketing opportunities lacked the marerial incentives and technical support necessary to maximize crop yields. '.isth the construction of roads to ensure convenient access to market, ifrlgdi,r'r systems to improve the yields, health stations and wells, the :iving staan.tards of the target population were to be raised. . ,aL^iv e>J,ads. This component aimed to construct or upgrade 1,386 km of sir.guie 7ane, all-weather roads, which would benefit some 78,000 families or 43v,0JO inhabitants, This would consist of about 150 road stretches Xaringllg an length f rom three to 17 km. Location of the roads was based on the crlteria ot' a ii;inimum of two villages and/or a population of 100 inhabitants per km- t.' !r served, and a minimum economic rate of return of 10?. '. >.eie ;w-standard access roads would link relatively isolated ..e maInstream of economic life of the provinces. Before the , -:i.ages were accessible only by dirt tracks the majority of ih l 'e!- _r a condition, and often only by foot or animal-drawn sleds X.e : . e:e-~-~ !.- r' tiring the dry season. The dirt tracks were used by the  -2- farmers, their children and hired labor to transport paddy and corn to the prwvincial roads and then to market. Some farmers due to the lack of time, money or labor, sold paddy to local middlemen for half the price ava,lable in nearby markets. 6. Coo inal Irritation Systems. The appraisal report ptoposed the construction of 53 new irrigation systems ranging in size from 50 ha to 1,100 ha, serving about 6,500 ha. and the rehabilitation of two systema serving about 900 ha. Approzimately 7,000 farm families and 1,500 landless laborers' families would benefit. In the absence of the project, the rate of increase in rice yields was estimated at about 0.5Z each year, due mainly to some marginal improvDemnts in application of inputs. With the project, the projected yield at full development was expected to rise from 1.5 tons/ha to 2.5 to 3.0 tons/ha. The selection of the areas was based on the criteria of a minimum cropping intensity of 130S, farm size of 1.0 to 1.5 ha or less for at least 70Z of the farms and a minimum economic rate of return of 102. 7. Ports. The project aimed to rehabilitate and expand the port facilities in one municipal and two national ports. Though relatively small in size, these ports are of major importance to the poor rural inhabitants who depend on them for inter-regional communication. The appraisal report estimated traffic in the ports would rise significantly from 1975 to 198g. An increase in fishing activities also increased the need for pogt renovation. Without rehabilitation, the degradation of the ports would cb6tinue. More goods would have to be transported by truck to and from the port at Iloilo, an average of 150 km away, increasing transportation costs. Upgrading and rehabilitating the selected ports would reduce turnaround times and handling costs of ships and cargoes, and encourage the introduction of larger and more efficient vessels in inter-island trade, The improvement works included extension or realignment of breakwaters, installation of navigational aids, reclaiming and surfacing for storage area ind provision of independent water supply. 8. Health Stations. About 60 rural health stations located in villages appioximately 5-10 km from a rural health unit were to be constructed under the project. These stations would provide family planning and nutritional services as well as basic health care. Each station would be built on a publicly owned 300 sq m plot of land with a floor area of about 50 sq m. Since some of the stations in the provinces had no access roads, these would be provided under the barangay road component. 9. Rural Water Supply. The proposed 300 wells would be drilled with drilling depths varying from six m to about 100 m depending on the aquifer characteristics, and the wells equipped with standard hand pumps. Easy access to the wells would be ensured, a concrete basin facility for washing clothes provided at each site. Wells would be at least 300 m apart, and villagers would be responsible for providing land for the well and maintaining the well after construction. Proiect Cost and Financing 10. The total estimated cost of the project was US$59 million. IDA Credit 790-PH for US$28 million was signed on April 21, 1978, representing the  -3- entire foreign exchange component of the project. or 482 of the total cost. The remaining US$31 million was to be provided by the Government. ImDlementation 11. The Credit was signed Dy the Executive Directors on April 21, 1978, and became effective on July 20. 1978. At appraisal, disbursements were expected to be completed by December 31, 1983. one year after the scheduled completion of all project works. However, project implementation took about four years longer than predicted at appraisal. The main factors responsible for the delay include severe weather conditions, Government's lengthy administrative procedures, peace and order problems, funding delays and contractor difficulties. The barangay roads component suffered especially long delays, the first due to the renegotiation of consultant quotations for detailed engineering because of the Bank's view that these quotations were too high. Also shortages of materials caused delays in the roads and ports components. Coordination between the different implementing agencies was not as smooth as expected, and the diversity and geographic dispersion of the individual works made overall management difficult. 12. The Credit was extended for two and a half years, to June 30, 1986. By the end of March 1986, overall project completion was abo4t 90?. The irrigation system, water supply and health station components were 1001 complete. The barangay roads component suffered from peace add order and right-of-way problems, contractor difficulties, delayed fund releases and bad weather, and was only 73S complete by the end of the project. Two of the three ports were completed, the other only about 60? completed; delays were due to the lack of funds, redesign of the project and contract adjustment. The PCR has listed most of the causes of delays in project implementation with which this Overview agrees. However, the PCR does not mention the delays caused by inadequate allocation of local funds for project implementation by GOP, due to severe financial constraints. 13. Barangav Roads. A total of 1,012 km of roads were constructed or upgraded, against an apprais~al target of 1,386 km, under this component. Barangay roads were divided into two groups, those to be constructed by the DPWH and ti.ose to be constructed by contractors. Out of a total number of 140 road sections, 66 sections with an aggregate length of 671 km were subject to contract bidding by prequalified contractors. The original target date for bidding was set in September 1978 but due to high rates quoted by the local consultants for the detailed engineering phase, the Bank suggested renegotiation of the bids on the detailed engineering phase. This delayed the bidding on roads until mid-1980, delaying commencement of construction by almost two years (see PCR paras. 3.02-3.08). Many contracts suffered delays. The most prevalent causes were: unavailability of equipment and materials and lack of working capital in the case of many contractors; delay by government in acquisition of right-of-way and relocation of utilities; poor organization and management among most contractors; time consuming government procedures for processing interim payments, and contract modifications. Other delays stemmed from the reorganization of the Ministry of Public Works and Highways, severe weather conditions and sporadic peace and order problems. Among the total road projects under contract, 42? were completed on time while the rest experienced delays ranging from less than a year to three years. About 10S of  -4- the contract projects were either cancelled or rescinded and then completed by DPWH. Almost all of the road sections implemented by DPWH are reported to have been completed on time (see PCR paras. 3.02-3.08). 14. Communal Irrifation. The impiementation of this component was undertaken by the National Irrigation Administration (NIA). Of the 51 new irrigation systems planned at appraisal, 22 were constructed. Since others were found to be uneconomical or to present technical difficulties, 21 alternative systems were rehabilitated instead. The total area developed is reported as 9,589 ha against an appraisal target of 9,400 ha. Some minor delays were caused by errors in design and construction of four systems, right-of-way problems due to disagreement of some farmers to the constructior4 of on-farm facilities, and in some cases the lack of cooperation of Irrigator Association (IA) members. Farmer beneficiaries were involved in the formulation, design and construction of most of the 43 systems, and are responsible for their operation and maintenance (see PCR paras. 3.09-3.10). The construction of the 43 communal sub-projects started in July 1978 and was completed close to Rcnedule, in December 1983. The constructed systems had already been turned over to their respective Irrigation Associations when typhoons and strong floods hit the region in 1984 and 1985, causing some damage. The repair work was completed in May 1986. 15. BaranRay Health Stations. The Bureau of Public Works of the Department of Public Works, Transportation and Communication (DPWTC) was responsible for the design, construction and supervision of the health stations while the Project Management Staff of the Department of Health (DOH) was responsible for contract administration and procurement of supplies and materials and operation. Construction began in 1979, and the 60 stations became operational in 1983. However the complete equipping and furnishing of these stations was finished only in 1985, mainly due to a lack of coordination between the implementing agencies. :6. Ports. The Bureau of Public Works of DPWTC was responsible for the design and construction of ports, with contractors taking on most of the actual construction work. Slippages occurred on all projects, mainly due to the inability of the contractors to finish the work in time because of rising costs, technical difficulties and political cactors. The port at Culasi was 87S finished in 1982, when the contract was terminated because the contractor was unable to finish the work. Another contractor finished the job in 1983. The port of San Jose de Buenavista was 99Z complete when the newly constructed breakwater was damaged by a typhoon in 1982 and the contract terminated in 1983. Other contractors continued the project, completing all work in April 1986. Work at the Dumaguit port (about 60t accomplished) has yet to be completed, due mainly to deficiencies in the origina. pile foundation design and contractual problems which followed as a result, which Government failed to resolve in time (see PCR paras. 3.14-3.17). Government will complete this work using local funds. 17. Rural Water Supply. The Bureau of Public Works of DPWTC was responsible for the implementation of rural water supply systems. The drilling of wells was started on time. A total of 462 wells were initially drilled of these 25 wells were abandoned due to problems such as salty or muddy water or shale formation. Noting the availability of more funds due to  p. -~~~~~~~~~~~~5- lower than anticipated unit costs, DPWTC continued to construct 40 more water supply systems with Bank approval. Of the 477 serviceable wells constructed :bout 31 are not currently operational because of poor maintenance (see PCR paras. 3.18-3.19). 18. PreDaration of Future Proiect. No work was performed on the component, due apparently to a decision between the Bank and Government not to have a follow-up project of this type. 19. Disbursements and Costs. Disbursement of Credit 790-PH lagged well behind appratsal estimates throughout the project implementation period. The Credit Closing Date was extended by two and a half years from December 31, 1983 to June 30, 1986, to permit completion of the remaining works, especially road construction. US$21.5 million (of a total of US$28 million) was utilized of by the close of the Credit and the balance was cancelled (see PCR paras. 4.04-4.06, Annex 4.07.1). 20. The final project cost in US dollar terms, was US$48.3 million, some US$11 million or 182 lower than the appraisal estimate of US$59 million, mainly due to the devaluation of Philippine currency. However, the final project cost in local currency equivalent is higher than the 0appraisal estimate by about 42Z. from Pesos 436.6 million at appraisal to,Pesos 618.5 million final cost. Proiect Impact 21. Overall. The major objectives of the project were met by providing 1,012 km of all-weather road access to markets, health stations and irrigation systems for the rural population; irrigating 9,589 ha of farmland to increase the yield of rural agricultural production; providing 60 rural health stations to promote health and serve the medical needs of the rural population; improving the rural water supply system by constructing 477 rural water supply systems to provide safe and potable drinking water; finishing construction of two ports to promote transportation and shipping, with work continuing on a third. By the end of the project, about 90Z of the appraisal targets were completed. 22. Barangay Roads. A total of 1,012 km of barangay roads were constructed or upgraded through the project. Because of sparse population or difficult terrain, some of the sites originally proposed were found inappropriate. Roads with higher rates of expected economic returns and lower construction costs replaced those which were dropped. 23. The appraisal mission had analyzed 6 barangay road projects to evaluate the economic viability of this component. The post-project reassessment study used the same methodology but analyzed 13 sample roads, with some adjustments of prices and costs to the 1986 level (see PCR paras. 6.01-6.04). The appraisal mission determined that a satisfactory ERR would be 102; the post-project evaluation calculates the ERR to be satisfactory on 11 of the of 13 projects, ranging from 11.8Z to 23.8? (see PCR para. 6.05, Annexes 6.05.1 to 6.05.13).  -6- 24. Greater access to markets, and substitution of jeepneys and trishaws for animal and man-drawn sleds has probably been the greatest benefit of the new barangay roads. Agricultural production has increased from both the increase in crop yields (see PCR Annex Table 6.04.7) and the opening up of new areas to cultivation. The appraisal report assumed that five years after completion of a road all identified new potential areas for future production, averaging about 20 ha per km of road, would be under cultivation. According to the 1987 economic analysis of the six km Sevilla-Bilar road section, total area under cultivation would remain constant at 1985 levels without road construction, at 1,945 ha, but with the road this would increase to 2,143 ha by 1990, an increase of 198 ha or 102. On this sub-project, new land put under cultivation increased 33 ha per km of road built, higher than the appraisal estimates. The economic analysis also predicts an increase in the value of production, from P 7,161,000 in 199n without the roads to P 9,792,00i with the roads, an increase of 36?. All-weather roads are also expected to give inhabitants greater access to health and educational facilities. According to the appraisal report, children should be able to spend more time in school instead of transporting paddy, villagers have better access to off- farm employment during the off-season months in nearby towns, and farmers can grow labor-intensive, higher value crops, but these points are not mentioned in the PCR. 25. Communal Irrigation. With the completion of the irrigation component, 43 communal irrigation facilities were constructed or improved. This included the construction of 22 new irrigation systems serving 5,274 ha and the rehabilitation of 21 existing systems serving 4,315 ha. Of these 43 implemented projects, 28 were included in the appraisal listing and 15 systems were new inclusions. The appraisal report proposed the establishment of about 53 new communal irrigation projects serving about 8,500 ha and the rehabilitation of 2 old systems serving 900 ha, a total of 9,400 ha, but due to various factors, including the low expected economic returns of some proposed systems, lack of water, steep slope and high construction costs, some of the originally planned systems were not built. Despite the reduction in the number of projects implemented, the area provided with irrigation facilities increased from the appraisal estimates of 9,400 ha to 9,589 ha. 26. At appraisal the overall ERR for this component was estimated at 21?. The feasibility report on which appraisal was based presented ten representa- tive communal irrigation systems as test projects that were subjected to detailed feasibility studies. For purposes of comparison, the economic re- evaluation in the PCR has been limited to the studied systems and the procedure carried out as in the feasibility studies (see PCR paras. 6.06.10). The projects costs used in the post-project analysis were adjusted to 1986 levels for the evaluation. On this basis the ERR of the sampLe systems is higher than the feasibility study estimates. The higher ERR is attributable to a larger service area, higher yields and cropping intensities, higher farmgate price and, in some cases, reduction in project costs. The ERRs range from 17.0Z to 47.2? (30? weighted average) in the PCR, higher than the feasibility study estimates in all but two cases (see PCR paragraph 6.10), and higher than the appraisal estimate. 27. The average cropping intensity increased from an estimated 164? to 174?, increasing the total effective area from 15,400 ha to 16,705 ha (see PCR  -7- paras. 3.22, 3.23, Annex 3.22.1). The average cost of construction was estimated as P 6,920 per ha, compared with P 8,800 per ha estimated by the appraisal report (see PCR Annex 3.22.1). The operation and maintenance cost (o&0) was predicted to be US$10 per ha by the appraisal report, about the same as the P 200 estimated for 1986 in the PCR (see PCR Annex 6.09.1). Crop yields on irrigated land increased; for example, at the Madua-San Isidro Comnunal Irrigation System in Bohol, yields of rice in 1987 are an estimated 3.28 tons/ha for both the first and second planting. Without the project, yields would only be about 2.5 toils/ha for the first planting and 2.2 tons/ha for the second planting (see Economic Analysis tables, Irrigation Component). Yields also increased for other crops. Projected maximum yield levels estimated by PCR are generally high.er than those predicted by the appraisal report (see PCR Annex 6.04.8). 28. Health Stations. As planned, 60 health stations were completed and made operational in 1983. Some of the units were constructed in new sites because of poor access to the proposed sites or low population in the area (see PCR paras. 3.28-3.29). These clinics provide family planning and nutrition services as well as basic health services. PCR reports a total of 213,760 patients served in 1985 (see PCR Annexes 6.11.1). Although the influence of health care is difficult to quantify, PCR notes that in 1985 total crude deaths in the areas were 12,893, 18.6Z lower thon the 15,839 before the opening of the station in 1979. Infant mortality dropped 43.81. The drop in death rate and child mortality may have some correapondence with the establishment of the health care stations, but other factors may also be involved. The main beneficiaries of the health stations are the estimated 132,503 poorer families of the area. Total cost comes to about US$4 per family (see PCR paras. 6.11-6.13, Annex 6.11.1). 29. Ports. Two national ports end one municipal port were targeted for rehabilitation and improvement. The work on the ports of Culasi in Capiz and San Jose de Buenavista in Antique are completed. Due to a deficiency in the design of the concrete pile foundations for the wharf, resulting design changes and problems with contractors, the work on the Dumaguit in Aklan port (about 601 done) has not yet been completed (see PCR paras. 3.24-3.27). At appraisal, it was predicted that traffic at the three ports would rise significantly from 1975 to 1985; in San Jose de Buena Vista, from 15,000 tons to 26,000 tons, in Dumaguit from a negligible amount to 10,000 tons, and in Culasi from 100,000 tons to 125,000 tons. In the post-project re-evaluation of the port project, the evaluation method used in the appraisal is adopted. This assumed that without improvement these ports would have difficulty handling traffic and would not be able to handle traffic increases unless facilities were rehabilitated. Despite the uncompleted status of the port of Dumaguit, it is still evaluated based on the assumption that the existing cargo and passenger traffic in Washington will be transferred to Dumaguit when it opens (see PCR para. 6.16). With rehabilitation, total cargo handled is slightly above the appraisal estimates (see PCR para. 6.15). Post-project ERR was slightly higher than the appraisal evaluation, at 18? at San Jose de Buenavista, 231 at Dumaguit, and 341 at Culasi (see PCR para. 6.18, Annex 6.18.1) against appraisal projections of 15?, 21Z and 302 respectively. 30. Rural Water Supply. The 300 wells proposed at appraisal were drilled at well under appraisal cost, due to the availability of equipment and lower  -8- than expected drilling depths. Wells were constructed at the health care stations and other sites. A total of 477 wells were constructed. The rural water supply project has provided a safe and reliable watcr supply for about 110,000 villagers. This should lead to a reduction in water-borne diseases and elimination of the necessity of hauling water over long distances. These benefits have not been quantified. but are judged to justify the small per capita investment of about US$26. Bank Performance 31. The PCR notes that the project was in agreement with the Government's efforts to raise the socio-economic conditions in the project area. The PCR comments that the implementation schedule prepared by the Bank's appraisal mission was overly optimistic and did not allow for lengthy administrative procedures and delays due to difficult weather conditions and security issues (see PCR para. 7.02). Although these factors may not have been fully appreciated at appraisal, other delays, such as those due to the lack of local funding, were also major factors. 32. The PCR credits the Bank with making valuable suggestions and recommendations, and with following-up problems that could have further aggravated implementation delay if they were not resolved iptime. Among the assistance noted was that given to the strengthening and supp&rt of staff, procurement of equipment and advice on financial matters including the extension of the Bank Credit (see PCR paragraph 7.03.) 33. Mention was also made of the 'negative attitudes' of the Bank toward the bidding procedures on barangay roads, and the lack of understanding of some Bank members, particularly during the early stages of implementation. This, 'caused disenchantment among field officials and resulted in lukewarm cooperation' (see PCR paragraph 7.02). Lessons Learned 34. The implementation schedule prepared by the Bank's appraisal appears to have been overly optimistic. Some factors, such as: speed and efficiency of Government procedures; likelihood of frequent severe weather conditions; geographical spread of project works; contractor availability and quality; possible peace and order problems; likely funding difficulties; etc. are common to several projects and deserve a deeper appreciation. 35. The roads and ports projects suffered the longest delays, each containing some sub-projects that needed redesigning. The redesign and relocation of some of the roads were unavoidable due to the large area involved and variations in terrain. Allowances for such changes appear inadequate, considering the overall environment. The necessity of redesigning the port facilities at Dumaguit, however, indicates inadequate preparatory work by the time of project appraisal. Hiring dnd retaining good contractors was difficult in both the roads and ports components, and projects were consequently delayed. This emphasizes the importance of thoroughly reviewing all important construction designs for works of this nature and carefully evaluating contractor capability and availability. 36. Although rearly impossible, there is a need for measures to expedite and improve the efficiency of novernment procedures.  -9- Republic of the Philippines DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS Manila PHILIPPINE RURAL INFRASTRUCTURE PROJECT-I (IDA LOAN-790-PH) PROJECT COMPLETION REPORT AUGUST, 1987 PROJECT MANAGEMENT OFFICE-PRIP-I, MAR-IBRD IN COORDINATION WITH PROJECT MANAGEMENT OFFICE-FEASIBILITY STUDIES  SdVWI - TT -  - 13 - smn Juan ~15z,uin"bmg Road Alinaya - Br4h Road K~s ._ a \ ,~~~~~~.._.j.-...._ Jet. Nat'l. \ \ .- _ j -/ > Villaviciosa-s Road. -J -Nmbo B- lm r Road D tam XR.oad: . . .AR ~~~~~~BoLry - Kion-ula Rd RPilippine Rral Infrastruture Project ProviwA of AMA .,,,M Baranpy Roads  .~~~~~~~~~~~i- . ...... - I 4 I 9:  ,jp OuS t ~~~~~~~~Solido -lasena Poad iNlnisud - Btgttg bato .Taps Road #anPande - Payakan Road AL Tmacoe - Panayakdn P"W~~~rioes- Ltaan oa Regador - Yawan Road \ai' U#o PIA ATvi o La : Baauigay ad A'or Libalyg - B. Barrio Ru&ovlLI IA J l)fo " WSITtl >1 { { .\ 9bw~ARG Brlones -Laan Rsoad Naulinao - Bulabod Road 6 7 kA3\ Futgencio - C_Iig,an RPd t I II^~~~LiEl t - Batete - Calem pa pibacao Ortega Rod Pbes I % i * a7 I~~ A Philippine Rurat Lnfrastnucture Project Provinc-e of AKLAN ?hp I legetid: _..o B;ra:Cay Roads z orts  - 16 - itadton-Alegre Road Culasi-Montero Road anise-Flores Road Importante-Tuno Road awaan-Maybunga Road Bugasong-Pangagalkan .oad rmTnoMoS -F~'~-ffi- - = X , ' Eatnongon-Cuyapisto Road Sumaray-Bagumbayan Road San Remegio-Maradiona Road Bia-nan - Bad-as- Tordesillas Road alala-Apdo Road Philippine Rural Infrastructure Project Map I Province of Antique Legend: w~ Barangay Roads rts  RRINE O AS CITY Bia -(tasi Bcad All I N~ ~ ~~~~~~~~Ip < A~~~~APIAN C BARANGAY ROADS ~ ~ ~ ~ ~ ~ ~ ~ ~ LA .*, PORT "^*S0o OAS .?CJZJ A