Algeria - Fourth Highway Project

Document o The World I nnva o Rc-p(t.' N(, {)7 J(J Af, 'TypJ; ; FOR OFFICIALtUS ' ReportNo. 9790 PROJECT COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (LOAN 1892-AL) AUGUST 5, 1991 Infrastructure Operations Division Country Department II Europe, Middle East and North Africa Region 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. EXCHANGE RATES Appraisal Year Average US$1 - DA 4.02 Intervening Year Average US$1 - DA 5.41 Completion Year Average US$1 - DA 7.60 GLOSSARY BNEDER - National Bureau for Rural Development Studies CTTP - Technical Quality Control Organization (under MTP) DIB - Basic Infrastructure (transport) Directorate ENMTP - National Public Works Equipment Enterprise HDM - Highway Design and Maintenance Standards Model IRR - Internal Rate of Return MOEq - Ministry of Equipment HOT - Ministry of Transport MTP - Ex-Ministry of Public Works (now under the consolidated Ministry of Equipment) VOC - Vehicle Operating Costs vpd - vehicles per day FISCAL YEAR January 1 - December 31 THE WORLD BANK FOR OFFICIAL USE ONLY Washngton, D.C. 20433 U.S.A. Ofce of Dnctw-CGneral Operatkm" EVAatim August 5, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on the Democratic and Popular Republic of Algeria Fourth Highway Project (Loan 1892-AL) Attached, for information, is a copy of a report entitled "Project Completion on Algeria Fourth Highway Project (Loan 1892-AL)" prepared by the Europe, Middle East and North Africa Regional Office with Part II of the report contributed by the Borrower. 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 th r official duties. Its contents may not otherwive be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (Loan 1892-AL) Table of Contents PREFACE EVALUATION SUMMARY............... ........ . . . . . i PART 1: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE. ......... . . 1 I. PROJECT IDENTITY. . ............ . . . . . . . . . 1 II. BACKGROUND: THE TRANSPORT SECTOR....... ...... . . 1 III. PROJECT OBJECTIVES AND DESCRIPTION. . ......... . . . . 3 IV. PROJECT DESIGN AND ORGANIZATION. ......... . . . . . . . 3 V. PROJECT IMPLEMENTATION. . .............. . . . . 3 Bordj Mira-Kherrata Road and Tunnel (Section RN9) . . . . . . 3 Road Maintenance Programs . . . . . . . . . . . . . . . . . . 4 Pavement Strengthening . . . . . . . . . . . . . . . . . . . . 5 Maintenance Training . . . . . . . . . . . . . . . . . . . 5 Assistance and Studies . . . . . . . . . . . . . . . . . . . 6 VI. MAJOR PROJECT RESULTS........... ...... . . . . 6 Achievement of Project Objectives. .......... . . . . 6 Achievement of Physical Targets. .......... . . . . . 7 Project Costs............... . . . . 7 Disbursements.. ... 7 Economic Reevaluation ..... .......... . . . . . 7 Environmental Impact. . ........... . . . . . . . . . 8 VII. PROJECT SUSTAINABILITY. . ........... . . . . . . . . 9 VIII. BANK 'S PERFORMANCE........... ....... . . . . 10 IX. BORROWER'S PERFORMANCE. .......... . . . . . . . . . .10 X. RELATIONS BETWEEN THE BANK AND THE BORROWER... . . . . . . . 11 XI. CONSULTANTS' SERVICES. . ........... . . . . . . . . 12 XII. PROJECT DOCUMENTATION AND DATA. . ........... . . . . . 12 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. PART LM: THE PROJECT FROM THE BORROWER'S PERSPECTIVE . . . 13 Composition of the Fourth Project . . . . . . . . . . . . . . . 14 Implementation of the Fourth Project . . . . . . . . . . . . . . 14 Conclusions of the Fourth Project . . . . . . . . . . . . . . . 15 £ASIII: STATISTICAL INFORNATIUN Table 1: Related Bank Loans Table 2: Project Timetable Table 3: Cumulative Loan Disbursements Table 4: Project Costs Table 5: Project Financing Table 6: Economic Impact Table 7: Status of Covenants Table 8: Missions Table 9: Staff Inputs AgggE: STATUS OF BANK LOANS TO TF- TRANSPORT SECTOR I2: IBRD 13997R1 - Algeria: Road Network and Highway Project Sites DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (Loan 1892-AL) PROJECT COMPLETION REPORT PREFACE This Project Completion Report describes the preparation, appraisal, and implementation of the Fourth Highway Project in Algeria, for which Loan 1892- AL in the amount of USD 110 million was signed on August 1, 1980. The project became effective on June 16, 1981 and was to have been closed on December 31, 1985. The project period was characterized by considerable upheaval in the public works sector in Algeria in the form of administrative decentralization, increase in the number of Wilayas, and transformation of equipment parks into local enterprises. The closing date was extended three times, first to December 31, 1986, then to December 31, 1987, and finally to December 31, 1988. These extensions were attributable mainly to difficulties with the design of the Kherrata tunnel complex, the major civil works component. The loan account remained open until July 26, 1989. Ultimately, USD 94.7 million were disbursed and USD 15.3 million cancelled. Higher disbursement percentages for civil works provided for in the Amendment to the Loan Agreement dated December 22, 1988 resulted in unusually high disbursement activity during the last six months (USD 19 million). The Preface, Evaluation Summary, Parts I and III of the PCR were prepared by the Infrastructure Operations Division, Country Department II, and the Infrastructure Operations Division of the Technical Department, of the Europe, Middle East and North Africa Regional Office. Part II was prepared in Algeria by the office of the Deputy Minister of Equipment for Public Works. Preparation of this PCR began during the Bank's final supervision mission in 1989, which was followed up by a completion mission in March 1990. The Bank's contribution to the report was prepared on the basis of, inter alia, the Staff Appraisal Report, the Loan Agreement, supervision reports, correspondence between the Bank and the Borrower, internal Bank memoranda, and consultation with implementation agency officials and staff, and former project officers. DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (Loan 1892-AL) PROJECT COMPLETION REPORT EVALUATION SUMR Project Obiectives and Implementation Exberience 1. The project continuad the integrated approach to road development and maintenance begun under the Third Highway Project (Loan 1863-AL). In addition, it was to have helped increase the efficiency of the national construction industry and to have developed a program to improve access in rural areas. Experience with the implementation of the different components of the project, as it was appraised (SAR, para. 3.02), was as follows: (a) reconstruction of National Road 9 (NR9) through gorges along a six-km section between Bordi Mira and Kherrata, which was delayed due to the complexity of the works affecting both procurement decisions and project design, which was changed from the construction of a series of bridges and tunnels within the gorges to the construction of three long tunnels and a viaduct; (b) a second tranche of a five-year maintenance program, by force account, for which a first tranche, involving 16 newly created Wilayas, was financed under the Third Highway Project. The second tranche, involving 15 Wilayas created in 1975, was completed but with a greatly reduced program of equipment acquisition. Budgetary allocations were met but the output reached only 70% of physical targets because the Government decided to transform the main force-account units into Wilaya-owned and *operated enterprises. In addition, the 1987 and 1988 Road Maintenance Programs, which had been appraised under the Fifth Highway Project (Loan 2808-AL), were financed under Loan 1892-AL with a "swap" arrangement (amendment to the Loan Agreement, dated December 22, 1988); (c) a second tranche of a long-term Davement strengthening prorram, for which a first tranche was financed under the Third Highway Project. Implementation did not begin until April 1985 because of unanticipated difficulties in arranging for the three participating Wilayas to delegate authority to manage the construction to one of the group. In addition, three road sections along RN3, RN4, and RN5, which had been appraised under the Fifth Highway Project, were financed under Loan 1892-AL in accordance with the above-mentioned "swap" arrangement; (d) the continuation of a program for training maintenance personnel, which was only partially implemented due to a reorganization of the national vocational training system; and (e) assistance to iMDrove the efficiency of 2ublic construction.enterprises and to maintain and rehabilitate rural roads. The former did not materialize because of the changing institutional context within which the road construction companies were operating, the latter because of an inadequate study on rural road maintenance and rehabilitation. Results 2. The estimated project cost was USD 206 million, with about USD 120 million representing foreign exchange. Actual project cost only reached USD 181 million. Comparison of the two figures is meaningless in view of unanticipated changes both in project scope and in the dinar exchange rate, which declined steadily from DA 4.0 per USD 1 at appraisal in 1980 to DA 7.6 on final disbursement in 1989. Project completion was originally to have taken place in June 1985 followed by a loan closing date set at December 31, 1985. Actual completion of works originally included in the Fourth Highway project took place in June 1988. A comparison of appraisal IRRs and reevaluated IRRs is broken down for various components and subcomponents as follows: ApRAisal Completion Construction RN9: Bordj Nira-Kherrata 29% 24% Strengthening RN2: Oran-Remchi 25% 48% RN3: Ain Touta-Biskra 14% 51% RN4: Mouzia-Rouina 35% 36% RN5: M'Chellah - Bordj Bou Arreridi 18% 43% SustainabiLi1ty 3. The Kherrata tunnel complex has reduced the travel distance, in particular for heavy trucks, between the port of Bejaia and the hinterland Wilaya of Setif by about 132 km. As a result, traffic levels increased from 2,300 vehicles per day in 1987 to about 5,000 in 1989. In the medium term, improved accessibility is further expected to foster economic development in the area served by the road. Civil works for pavement strengthening have increased the life of road sections by 10 years and provided for a 50-year design life for bridges and tunnels. Algeria's basic institutional, organizational, and technical capacity to maintain these new assets already exists and is being upgraded under the follow- on Fifth Highway Project. The country has also gained exposure to modern tunnel technology through its first large tunnel project, even though the work was performed and supervised by expatriates. Moreover, pavement strengthening programs, which have been both repetitive and systematic, have led to skill capitalization within the technical and organizational framework of the project. Experience in pavement strengthening h&s, indeed, proved that building and maintaining a national primary highway network will yield measurable medium- and long-term benefits. Findings and Lessons 4. Project experience illustrates the benefits derived from Bank-Borrower collaboration over a series of lending operations. The Bank assisted in preparing bidding documents and clsely monitored bid evaluation for the Kherrata gorge tunnel. The program concept adopted for the project also provided for flexibility in arranging and approving a "swap" in which road sections appraised under the Fifth Highway Project (Loan 2808-AL) were financed under the Fourth. The trading of components from one project to another holped salvage what, otherwise, would have been a seriously underdisbursed loan. 5. The complexity of this project, changes in project scope, and the Borrower's lack of understanding of Bank practices led to supervision coefficients averaging 19 staff-weeks p.a. The principal implementation difficulty centered on decisions concerning changes to the original project design for the Kherrata gorge road. It had to be determined, from the standpoint of both engineering and costing, whether the construction of major tunnels on a new alignment would be a better alternative than the reconstruction of RN9 along the existing alignment based on a series of tunnels and bridges. One lesson drawn from this experience is that the Bank needs to be able to provide adequate advice, within a limited time frame, to the Borrower on how to manage major engineering changes. The main lesson is that costly major tunnel projects are never to be undertaken without prior, thorough geological exploration. 6. Procurement issues have led to major delays in civil works implementation. The lesson is that (a) the Bank's procurement guidelines should be discussed with the Borrower at an early stage of project preparation and (b) potential procurement issues brought to the Borrower's attention before the project is even appraised. Moreover, the procurement of safety equipment for tunnel operation had to be deferred to the Fifth Highway Project. The lesson is that whenever safety equipment is required, the preparation of tender documents should be timely undertaken during the construction phase to ensure that such equipment is in place on opening the works to traffic. 7. The sudden decision of the Government in 1984 to change the status of maintenance equipment workshops, under force account, to Wilaya contractors disrupted the road maintenance organization for several years. The resultant transfer of equipment ownership halted the procurement of heavy equipment provided for under the project. The lesson is that changes in organization and policy need to be phased in over a reasonable implementation period rather than abruptly imposed. Nonetheless, the Bank and the Borrower showed ingenuity in adapting the project to these changes. 8. Whereas most of the project's physical objectives were reached, its software components (training and studies) were never implemented. At the time the project was launched, perhaps these components were either too ambitious or irrelevant. The lesson learned is that the Bank should ensure that the Borrower is committed to carrying out the entire project. The relative difficulty in implementing technical assistance and training programs in Bank-financed highway projects in Algeria suggests two additional lessons that should be applied to future operations. First, the Bank should ensure that training components in the - iv - projects it finances take road safety into account. Second, Algeria needs to make better use of external assistance, particularly in developing its own consulting capabilities. 9. At the implementation and completion stages, a more detailed single- volume project document, i.e., traditional SAR, would have saved task managers' time and improved overall efficiency in supervision and ex-post evaluation activities. % simplified SAR can be a good idea, if the project file is organized well enough to provide easy access to all necessary documentation and data. PROJECT COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (LOAN 1892-AL) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE X. PROJECT IDENTITY Name : Fourth Highway Project Loan Number : 1892-AL Loan Amount : USD 110 million RYP Unit : MENA Country : Democratic and Popular Republic of Algeria Sector : Transportation Subsector : Highway II. BACKGROUND: THE TRANSPORT SECTOR 2.01 At independence in 1962, Algeria inherited a diversified and reasonably well developed transportation system. During the first two development plans (1970-73 and 1974-77), most investments were directed toward industrial development, while only modest investments, i.e., 5% to 7% of total public expenditures, were allocated to transport infrastructure (i.e., roads, railways, and ports). Increases in economic output, combined with substantial population growth, led to a buildup in freight traffic at a growth rate of about 12% p.a. Transportation sector investments were insufficient to keep pace with such growth, which resulted in a substantial backlog in the modernization, rehabilitation, and maintenance of basic transport infrastructure. If progressive deterioration were to corvinue, it would have ultimately posed a major bottleneck to economic development. Even with a redw *Apace in industrial development, freight traffic was expected to grow into ihe 1980s at about 10% p.a. This situation led to major investments in the sector during the 1980-84 Development Plan, particularly in road infrastructure. Nevertheless, the rapid growth in traffic, the large distances involved, and the size of the earlier backlog required continued effort to modernize and rehabilitate the existing road network. 2.02 The present transport network includes 44,000 km of primary (national) and secondary (regional) roads, of which about 80% are paved; 33,000 km of local (community) roads; 3,700 km of railways; 5,000 km of oil and gas pipelines; six main ports; and an extensive domestic air network. Road transport carries, by far, the largest share of total domestic traffic, excluding crude oil, with over 25 billion ton-km p.a., or about 90% of total freight traffic, and about 13 billion passenger-km, or 90% of total passenger traffic. 2.03 In the transport sector, Algeria has been granted ten loans from the Bank, for a total amount of USD 700 million (net of cancellations), to finance five projects for roads, three for ports, and two for railways (see Annex). Sector dialogue rests on the achievements of past Bank assistance and on a Transport Sector Strategy Paper (TSSP), issued in October 1987. Policy issues, -2- including road transport regulation and cost recovery from road users, are currently being addressed by the National Transport Study, which is still in progress and is being financed under the Fifth Highway Project (Loan 2808-AL). 2.04 In the highway subsector, Bank loans amount to USD 415 million; four of these loans have been fully disbursed. During the 1980s, highway investment was about USD 6.6 million. Recent Bank-assisted projects have increasingly stressed the need for redirecting expenditures to road maintenance, strengthening maintenance capabilities through institution building and training, and rationalizing maintenance management. Future lending is expected to continue Bank support to maintenance at the central and local levels, while defining the relative roles of the various levels of government in the management of the primary road system. 2.05 During the project period, major developments in Algeria abruptly transformed the organization and operation of the public works sector. The strong movement towards decentralization that began in 1982 had a significant impact on the project. First, Wilaya boundaries continued to shift as the number of Wilayas increased from 15 to 31 in 1975 and to 48 in 1984. Second, roles within the Ministry of Public Works (MTP, reorganized under the Office of the Deputy Minister of Equipment for Public Works) changed when the equipment parks, which had been decentralized in 1977, were legally transformed in 1984 from administrative agencies into Wilaya-owned and -operated enterprises. 2.06 Currently, responsibilities for sector management are scattered among various levels of Government. At the central level, two Ministries playing a more direct role in transport matters are the Ministry of Equipment (MOEq) and the Ministry of Transport (MOT). MOEq has overall responsibility for infrastructure matters apart from the railways, while MOT is entrusted with the overview of transport operations. At the local level, the Wilayas and the Communes play a leading role in their areas of jurisdiction, including the setting of tariffs for transport services and the creation and ownership of enterprises. The relative role of the central vis-&-vis local government management of infrastructure is experiencing a gradual transformation in the context of the administrative decentralization reform. The Wilayas are now entrusted with the implementation of nationwide programs, including the ones affecting port infrastructure and the national highway system. The existing assets and new investments in port infrastructure are managed by the various port EPICs (para. 2.07). The ministries, however, continue to be responsible for projects of national importance. 2.07 The ongoing autonomization of the public enterprises, within the framework of the economic reform process, has introduced considerable changes in the relationships between enterprises and their tutelage. Recent legislation provides three different models for the public delivery of transport services: administrative enterprises (Rdgies), industrial and commercial agencies (Etablissements Publics Industriels et Commerciaux, EPICS), and economic enterprises (Entreprises Publics Economiques, EPEs). These types of enterprises enjoy varying degrees of financial and operational autonomy. The creation of *3- local EPIC and EPEs seem to be the right approach for ensuring the mobilization of adequate financial resources in the sector as well as their rational utilization. III. PROJECT OBJECTIVES AND DESCRIPTION 3.01 The Fourth Highway Project continued the integrated approach to road development and maintenance begun during the Third Highway Project. Under the latter project, the Government had embarked on a rehabilitation and strengthening program according to a Highway Network Master Plan, providing for the rehabilitation of about 2,000 km of roads. In addition to rehabilitation and strengthening, the Fourth Project was to have helped increase the efficiency of the national construction industry and to have developed a program to increase access in rural areas. Initially, it included: (a) reconstruction of a seven -km narrow section of National Road 9 (RN9) between Bordj Mira and Kherrata, on which landslides had led to frequent closure; (b) a second tranche of a five -year maintenance program; (c) a second tranche of a long-term pavement strengthening program; (d) the continuation of a program for training maintenance personnel; and (e) assistance to improve the efficiency of public construction enterprises and to maintain and rehabilitate rural roads. IV. PROJECT DESIGN AND ORGANIZATION 4.01 The project was identified during a Bank mission in October 1978 and prepared by MTP based on components sele,,ted from studies financed, in part, under the First Highway Project (Loan 912-AL). It was appraised in January 1980 and negotiations took place the following May. However, following loan effectiveness on June 16, 1981, there was a two-year delay before the startup of the main component on August 4, 1983. This reflected the complexities of the procurement procedures and the final bid evaluation for the RN9 road, which resulted in an alternative design being adopted. Only through very skillful contract management was the final revised cost for the tunnel complex kept within USD 2 million of appraisal estimates (Part III, Table 4). Initial. revised cost estimates had been substantially higher (para. 6.03). V. PROJECT INPLEMENTATION Bordi Mira-Kherrata Road and Tunnel (Section RN9) 5.01 Prequalification of contractors for the reconstruction of the Bordj Mira-Kherrata section of RN9 began in November 1979 and ended in February 1980. Tender started in February 1980 and was extended from June to October 1980 to allow more time for alternative designs. Nine bids were received from five contractors. Bid evaluation did not begin, however, until November 1981, 16 months behind schedule. Government restrictions on hiring foreign consultants contributed to this delay. When bids were opened, it was concluded that all bids were technically equivalent and it was impossible to update the bids to conform with economic conditions that had changed substantially in the past two years. Moreover, the lowest bidder presented a tunnel solution as the least costly alternative. The Government, therefore, decided to retender and accept new bids from the prequalified contractors who had submitted earlier bids, accepting the tunnel alternative. The Bank insisted that the Government justify this course of action in the tender evaluation report. Final bid evaluation was completed in mid-1982. The new bids were evaluated on the basis of technical criteria related to design, accessibility, location of bridges, construction gradient, construction period, costs, risks, and quality of the studies. Provision for bypassing the Bordj Mira village was also required. The same firm was again the lowest bidder. A special review panel composed of Bank staff and consultants, which was dispatched to Algeria in December 1982, validated the contract award. One of the consultants noted, however, that the cost of the proposed solution would be highly sensitive to the geological conditions encountered. This warning, however, was unheeded. The contract was awarded in May 1983, three and one-half years after prequalification. 5.02 Continuous implementation delays resulted from worsening geological conditions uncovered during tunnel excavation, culminating in a decision to line the entire length of the tunnels with concrete. The three tunnels were pierced in early December 1986. The project with all finishing works (e.g., ventilation, lighting) was completed in mid-1988. An Amendment to the Loan Agreement was signed on December 22, 1988 to permit the completion of localized improvements along RN9 needed to bring the entire road section up to par. Because of major procurement-related delays, contract award and execution of works had to be deferred to the Fifth Highway Project. Road Maintenance Programs 5.03 The First Highway Project planned and the Third Highway Project supported the development of a force account road maintenance organization for Algerian highways. It was built around an equipment service that owned, operated, and maintained the necessary equipment, which was then "rented" to the Wilaya maintenance district organizations (financed from the maintenance budget). The need of such an organization stemmed from an accumulated need for road maintenance, which had been neglected during the struggle for independence and the lack of contractor capability and interest for executing this type of work. Local contractors were being formed at the time in joint-venture with foreign firms that were engaged in larger road improvement and new road construction projects. 5.04 The Fourth Highway Project would build on the progress achieved to date. A first tranche of a five-year road maintenance program, by force account, involving 16 newly created Wilayas, had been financed under the Third Highway Project. The second tranche, financed under the Fourth Project, contemplated providing equipment not only for the equipment parks of another 15 new Wilayas, -5- but also brigades to crush rock and mix asphalt for strengthening and rehabilitation works on paved roads. The latest increase in the number of Wilayas, as well as in Wilaya autonomy, was matched with an abrupt increase, in January 1984, in the number of road maintenance organizations together with the dismantling of four regional workshops originally formed for major repairs in support of the Wilaya workshops. 5.05 It had been envisaged initially that large-scale equipment and spare parts procurement would be managed by MTP equipment parks and administrative subdivisions. However, the decentralization of road maintenance on a national scale and the transfer of equipment to Wilaya enterprises complicated equipment procurement and subsequent contracting mechanisms for the maintenance equipment provided for in the Bank loan. As a result, only USD 17.5 million of USD 45.4 million estimated at appraisal was spent on equipment. 5.06 Also included in the Fourth Project were the 1987 and 1988 Road Maintenance Programs. These had been appraised under the Fifth Project but financed from the proceeds of Loan 1892-AL in accordance with a "swap" arrangement provided for in an amendment to the Loan Agreement, dated December 22, 1988. Financing was provided for periodic maintenance, mainly steel coating, which was tendered under ICB and in which the newly created Wilaya enterprises participated along with other public works contractors. Pavement Strengthening 5.07 The feasibility study of the Oran-Remchi road section (106 km) was completed in October 1982, tender began two months later, and bid evaluation was completed in August 1983. However, implementation did not begin until April 1985. This considerable delay was the result of unanticipated difficulties in arranging for the three participating Wilayas to delegate authority to manage the construction to one of the group. This situation was exacerbated by local government reorganization in 1984, i.e., increase in the number of Wilayas from 31 to 48. Pavement strengthening of the Oran-Remchi road was completed in June 1988. In addition, three road sections along RN3, RN4, and RN5, which had been appraised under the Fifth Highway Project, were financed with proceeds from Loan 1892-AL in accordance with the afore-mentioned "swap" arrangement. Maintenance Training 5.08 The training program was implemented in three phases. The first consisted of continued financing of the training activities that had begun under the Third Highway Project; the second one, an assessment of training needs arising from equipment utilization in the westernmost Wilayas; and the third one, retraining of workshop personnel in public road construction enterprises, to be delivered, with the assistance of consultants, by the Bethouia training center. The first two phases were successfully completed and final reports submitted to the Bank. The third phase lasted from mid-1985 to early 1986, when the Bethouia training center, which was in poor condition, was closed. A new training center at Batna, which was to have been financed under the project, was never opened since the construction brigades, the envisaged target audience, were never formed and major changes occurred within the national vocational training organization, - 6 - including the establishment of the Ministry of Vocational Training. The Bank did not object to eliminating the remainder of the third phase from the project, particularly since a training component covering the planning, management, and control of contracted road maintenance works would be included in the then- proposed Fifth Highway Project. Assistance and Studies 5.09 Technical assistance aimed at strengthening public construction enterprises was never implemented. The rapidly changing institutional context within which the road construction companies in Algeria (paras. 2.06-2.07) were operating made it difficult for MTP to commit itself to this project component. The study on rural road maintenance was completed in mid-1985 but failed to achieve the intended objectives. The study was supposed to have produced an overall methodology for the planning of rural road improvements and maintenance to be applied by Wilaya officials. Instead of hiring consultants as planned, the Ministry of Agriculture (MOA) assigned the study to the National Bureau for Rural Development Studies (BNEDER). Two agricultural engineers prepared a study modelled on road improvement feasibility studies (e.g., traffic counts, agricultural production) for two pilot districts, each within different Wilayas, to justify paving some road sections in those districts. This was not a replicable procedure that could be put into general use throughout the country. Owing to a decision taken in HOA, the study was never released, even at the insistence of Bank supervision missions. It should be noted that the study was financed entirely by the Government. VI. MJOR PROJECT RESULTS Achievement of Project Objectives 6.01 Investments under the project supported the objectives of the Government's draft Five-Year Plan (1980-84). The project contributed especially to the development of the country's economic infrastructure with continued emphasis on regional development and integration, particularly through the removal of bottlenecks in the highway network. As such, the project followed the pattern set by the Second and Third Highway Projects, which included improvements to critical sections of the primary network; namely, RN2 between Boudouaou and Lakdaria and RN1 between La Chiffa and Berrouaghia. The objectives of two major components, the RN9/Kherrata Tunnel and the strengthening of heavily trafficked roads, were achieved with success, introducing both tunnel and pavement strengthening methodologies. In fact, several pavement strengthening design methods were introduced by different consultants creating a problem that had to be resolved at the time of preparation of the Fifth Highway Project. The objectives of another important component, the two-year tranche of a five- year maintenance program by force account, were not fully accomplished since acquisition of maintenance equipment was curtailed in the face of organizational and administrative changes. However, this was replaced by a system of contract maintenance which was provided under the Fifth Highway Project and also partly -7- under the Fourth Project as part of the "swap" arrangement. Technical assistance objectives, except for training, were essentially abandoned due to lack of commitment. Achievement of Physical Targets 6.02 The project's primary physical targets centered on tunneL construction. These were achieved, but with considerable delay, in the face of difficult technical and geological conditions and procurement difficulties. Prolegt .Costs 6.03 The estimated project cost was USD 206 million, with about USD 120 million representing foreign exchange. Actual project cost only reached USD 181 million. Comparison of the two figures is meaningless in view of unanticipated changes both in project scope and in the dinar exchange rate, which declined steadily from DA 4.0 per USD 1 at appraisal in 1980 to DA 7.6 on final disbursement in 1989. The major component, which was completely redesigned turned out to cost only about 2% more (USD 2.0 million) than original estimates. The contractor was claiming a revised cost estimate of about USD 138 million equivalent because of the unanticipated poor geological conditions, representing a 22% increase over appraisal figures. However, Algerian officials were aware of the possibility of unbalanced bids; e.g., high unit prices on poor rock and low unit prices on good rock, when the latter was expected to be the norm. They skillfully managed the negotiations and succeeded in keeping the final cost down at USD 115 million. Disbursements 6.04 Disbursement began two years behind schedule due to late project startup affecting all major components. Once disbursement got underway, cumulative disbursements remained significantly below original estimates and the relevant country and sector profile. Even though disbursements never caught up, they did maintain a satisfactory pace over a six-year period. Economic Reevaluation 6.05 Kherrata Tunnel. The advent of the tunnel reduced travel distances for truck traffic between the port of Bejaia and the Wilaya of Setif in the hinterland by 132 km. The economic benefit of this solution can be measured through lower vehicle operating costs for diverted and newly generated traffic and, although to a much lesser degree, lower surface maintenance costs on the detour route also yielded economic benefits. In addition, the tunnel significantly reduced the prospect of roadway closure along the Kherrata gorges due to landslides and cave-ins. Prior to the opening of the tunnel, traffic in the corridor was increasing at a pace of 5% p.a. Now that the tunnel has opened, it has increased more than twofold, from 2,300 to 5,000 vehicles per day (vpd). A conservative economic reevaluation of this component showed an IRR of 24%, confirming the economic viability of the investment, which was originally - 8 - estimated to yield an IRR of 29%1. The analysis was based on the assumption that traffic along RN9 between Setif and Souk el Tenine would continue to increase at 5% p.a. (in line with forecast GDP growth) due to stepped-up economic activity in the hinterland made possible by the tunnel. 6.06 Pavement Strengthening. The analysis was performed by the staff of the Technical Quality Control Organization (CTTP), under the auspices of MTP, according to a methodology similar to the HDM, which the Bank intreduced in Algeria in the mid-1980s. It showed acceptable results, with IRRs ranging from 20% to 43% (Part III, Table 6). In most cases, reevaluated IRRs were more than double the original estimates, which can be attributed to a combination of factors such as actual costs below appraisal estimates and higher traffic volumes than projected for the first year following completion of works. 6.07 Road _Maintenance. Investment in road maintenance programs, less equipment, represented only 8% of the total Bank financing. The return on the original maintenance program, in which the Bank financed equipment and training, could not be reevaluated as it was not implemented as envisaged due to the transfer of maintenance equipment and responsibility to the Wilaya enterprises. However, appraisal of maintenance programs for two pilot Wilayas in 1986 in connection with the Fifth Highway Project revealed extremely high rates of return for this type of investment; e.g., 323% and 104% for the best- and worst-case maintenance policy scenarios in the Wilaya of BouLra. For that reason, it was deemed unnecessary to reevaluate formally the two pilot Wilaya maintenance programs (appraised under the Fifth Highway Project and financed under the Fourth through the swap arrangement). Based on Bank experience with road maintenance components, even with stagnating traffic, the rate of return for Bouira would still be in the order of 75%. Environmental Im2act 6.08 Civil works components strengthened key sections of the country's primary road network and bolstered regional development. There was no known adverse environmental impact in terms of land use, expropriation, resettlement, or any other ecological or sociological aspect. However, the tunnel's steep gradient (6%) has left some unresolved safety issues, particularly concerning the downhill movement of heavy trucks. Bank missions repeatedly drew the attention of Bejaia Wilaya authorities to this issue. A serious accident, which took place soon after the opening of the tunnel in 1989, prompted the Governor of Bejaia to block temporarily the entry of heavy vehicles at the upper portal of the tunnel, requiring them to use the old road within the Kherrata gorge and permitting heavy trucks to proceed through the tunnel in an uphill movement only. Progressive relaxation of this rule is taking place as more safety equipment, being procured under the Fifth Highway Project, is installed. Details of reevaluated cost and benefit streams, together with updated vehicle operating costs, as well as all relevant assumptions relating to the analysis, are available in the Project File. -9- VII. PROJECT SUSTAINABILITY 7.01 The Kherrata tunnel complex has reduced the travel distance, in particular, for heavy trucks between the port of Bejaia and the Wilaya of Setif in the hinterland by about 132 km. Diverted and newly generated traffic led to increased overall traffic counts from 2,300 vehicles per day in 1987 to about 5,000 in 1989. Improved accessibility is expected to open the region up to greater economic development. Civil works for pavement strengthening have increased the life of road sections from 10 to 20 years and that of bridges and tunnels to 50 years. Algeria's basic institutional, organizational, and technical capacity to maintain these new assets already exists and is being upgraded under the follow-on Fifth Highway Project (Loan 2808-AL). The country has also gained some exposure to modern tunnel technology through its first large tunnel project, even though works were supervised and executed by expatriates. Moreover, pavement strengthening programs, which have been both repetitive and systematic, have led to skill capitalization within the technical and organizational framework of the project. Experience in pavement strengthening has, indeed, proved that building and maintaining a national primary highway network will yield measurable medium- and long-term benefits. VIII. BANK 'S PERFORMANCE 8.01 The Bank's contribution to the project was significant. Bank staff helped forge a close working relationship, based on mutual confidence, with the Algerian authorities. This was accomplished under the strain of difficult technical conditions. Bank staff also assisted in identifying the two major project components: the Kherrata tunnel and the strengthening of heavily trafficked roads, both of which show high economic returns and long-term results. However, important lessons can be drawn from the following shortcomings: - The Bank needs to respond more quickly to major and unexpected changes that occur in the country or in the project context. In effect, the Borrower needs more assistance than the Bank provided in terms of resolving issues arising from the implementation of particular project components, such as the acquisition of mainterance equipment. - The argument for adopting the tunnel solution was that the five short tunnels in the original design would run through highly fractured surface rock, which implied costly construction requiring fully reinforced concrete lining as well as difficult foundation conditions for the viaducts. The contractor argued that by going deeper into the mountains, the solid rock found there would obviate the need for most of the concrete lining. The contractor's original cost estimate was based on this prewise. The quoted price for fractured rock excavation was about twice that for solid rock excavation. However, in the contract documents, the contractor was given an unusual exclusion allowing for cost renegotiation for major quantitative changes in rock - 10 - excavation, concrete lining, and steel reinforcements for concrete linings. The tunnels were eventually constructed through mainly fractured rock, using a new Austrian method, at considerably increased cost. The Bank subsequently provided support to MTP in renegotiations with the contractor over the latter's claims regarding the unexpected geological conditions. The lesson is that costly major tunnel projects are never to be undertaken without prior, thorough geological exploration. - On relieving the Kherrata Gorge bottleneck, a complete solution for the full length of RN9 was postponed and later included in the Fifth Highway Project. The Bank should have insisted that the full project be studied before undertaking a costly improvement of just one section of the RN9 route. - The training component was only partially implemented. Not only was its design too complex and costly, but urgent training needs, particularly those concerned with highway safety, were entirely overlooked. The Borrower did not share all of the objectives of the training program, which explains the lack of commitment to it. In the future, the Bank should insist that major contracts for training, studies, and other technical assistance be awarded prior to Board presentation. - During project preparation, the Bank should seek assurances that decentralized implementation units are adequately staffed and trained to carry out the works for which they are responsible. - Safety equipment for tunnel operation had to be diferred to the Fifth Highway. Whenever safety equipment is ultimately required, tender documents should be timely prepared during the construction phase to ensure that such equipment is in place on opening the works to traffic. IX. BORROWER'S PERFORMANCE 9.01 MTP, the Wilaya of Bejaia, and the Wilaya-owned and -operated enterprises responsible for pavement strengthening and periodic maintenance, faced a difficult and changing environment. They succeeded in implementing an infrastructure program that was technically sophisticated and new for Algeria. The final cost of the fully concrete-lined tunnel was sharply reduced as the result of skillful contract management. This accomplishment would have been impossible without the singular dedication of MTP engineering staff. At the same time, the MTP complement needs to be reinforced with more engineers to improve the overall coordination of the decentralized units responsible for building and maintaining primary road network. Notably, engineer trainees assigned, contractually, to the tunnel project were neither suitably qualified nor motivated for such tasks as geotechnical monitoring. An excellent training opportunity under the Fourth Highway Project was missed. *11 - 9.02 Immediately on closing the central equipment accounts, MTP issued a directive cransferring the equipment services to the Wilaya governments (but not to the Wilaya works organizations) to be reconstituted as contractors. MTP did not, however, issue any further instructions or guidelines as to how this would be accomplished but, instead, allewed works maintenance organizations to act on their own. In most cases, they negotiated favorable contracts (20% to 30Z lower), while in other cases, they were charged higher rental rates. The other result in the change in equipment ownership was a halt to the procurement of heavy equipment provided under the project. 9.03 Although technical assistance for the construction of the Kherrata tunnel was highly successful, Algeria seldom uses external assistance to its full potential. This problem is probably due to inexperience as the country was not opened to foreign competition until only recently. 9.04 Delays in decision making are due not only to the change in the institutional setup (at the ministerial and Wilaya levels) but also to communication difficulties, engineers' lack of background in modern management techniques, and a general lack of motivation. Experience in implementing this project demonstrates that changes in organization and policy, such as the transfer of equipment services to the Wilaya governments, need to be phased in over a reasonable implementation period rather than abruptly imposed. A clear delineation of the responsibilities of officials at various levels following organizational changes is also needed to streamline the decision-making process. Non-formal specialized training of project engineers could militate against delays in technical and contractual decision making. All engineers from the ministerial level down to each work site need to be made aware of the financial and economic costs incurred by each month's delay in project implementation. The systematic posting and updating of an operational time chart would help prevent procurement delays (e.g., the delivery of safety equipment for the tunnels two years after t-ey are opened to traffic). The transportation of Government engineers and other problems related to the work site are being addressed through supervision of the Fifth Highway Project. I. RELATIONS BETWEEN THE BANK AND THE BORROWER 10.01 Relations between the Bank and MTP were positive as well as dynamic, whereas the level of commitment to the project by the Wilaya authorities was comparatively lower. If cooperation between the Wilayas implementing pavement strengthening of the Bejaia-Setif and Oran-Remchi road sections had been stronger, it would have enhanced the concerted effort to build and maintain a primary network of national roads. In the future, the Bank and the Borrower need to cooperate more closely, through project design and implementation, in seeking ways to provide the requisite incentive and coordination framework. . 12 - XI. CONSULTANTS' SERVICES 11.01 The consultants in charge of supervising the Kherrata tunnel construction were competent and performed well despite shortcomings, such as: (a) excessive overtime due to the renegotiation of contract extension, contractor appraisal for the new project design, and general understaffing; and (b) difficulties with the contract itself, such as the absence of price revision to compensate for the rise in cost of living and failure to reimburse short-term consultants. XII. PROJECT DOCUMENTATION AND DATA 12.01 The project appraisal report was shortened and simplified in a pilot effort to facilitate its review by Bank management. A final opinion, however, as to the efficiency of this approach has never been made known officially. At the implementation and completion stages, it is believed that a more detailed single-volume project document, i.e., traditional SAR, would have saved task managers' time and improved overall efficiency in supervision and ex-post evaluation activities. It was often necessary to peruse lengthy reports and feasibility studies in the Project File in search of data normally summarized in the Annexes to the SAR. PROJECT COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (LOAN 1892-AL) PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE 14 - PART II: THE PROJECT FROM THE BORROWER'S PERSPECTIVE Composition of the Fourth Project 1. The Fourth Highway Project was essentially a continuation of the accomplishments of the Third Highway Project. It consisted of: (a) the construction of a third north-south link through the coastal mountain gorge, the first two (Lakhdaria and La Chiffa gorges) having been completed under the previous two loans (Second and Third Projects); (b) pavement strengthening of the Oran-Remchi road section, similar to the works on the Constantine-Batna highway financed under the Third Loan, and on which present traffic exceeds 5,000 vpd; and (c) reinforcement of the Wilaya equipment parks in charge of the road maintenance. It is necessary to point out that the Fourth Project was designed to meet the objective begun under the Third Project, which was to provide all Wilaya directorates with complete pavement strengthening and surface dressing capability, including a crushing station. 2. In the course of implementing the Fourth Project, a new organizational setup was introduced to replace road maintenance work being carried out by force account and to increase the number of Wilaya enterprises from 31 to 48. This change disrupted procurement of the third tranche of maintenance equipment. Implementation of the Fourth Project 3. The three main components were implemented as follows; (a) The Gorges of Kherrata Works. The initial study for the tunnel alternative proposed by the contractor was overly optimistic and considered the rock bed to be sound on the entire distance with a proportion exceeding 70%. But this turned out to be totally different. Most of the rock was, in fact, fractured and required complete lining. Lengthy technical discussions took place with the contractor, in particular concerning the unit prices for rock removal and concrete, which would be needed in much greater quantity. Technical assistance for construction supervision was very helpful to the administration. The tunnels and the viaduct have now been completed. The results of these works surfaced very quickly as the traffic counts clearly show. In 1989, the traffic through the tunnels surpassed 5,000 vpd, which was higher than anticipated. The tunnels were built to provide permanent passage and to avoid frequent road closure caused by falling rocks that required detours of over 100 km. The supervision and the specific management of the tunnels brought some results earlier than - 15 - anticipated. The authorities have been made aware of this and some directives have been issued to maintain and manage these works adequately. The purchase of security and management equipment was thus provided for by the Fifth Highway Project. The remaining problem is the link between Souk El Tenine and Bordj Mira for which the pavement strengthening works were ineffectual. The works consist of preserving the existing road without any modernization or widening. The economic viability of this undertaking is limited by its difficult site. The enterprises had considerable difficulty working while traffic was flowing. If the World Bank had exerted more pressure, the preparatory studies of the Kherrata gorge section would have been more thorough and would have provided a more coherent design and step-by-step implementation plan. (b) strenathening works of the Oran-Remchi section. This was carried out to the satisfaction of all parties concerned; and (c) the acauisition of eauigment for the Wilaya directorates in charge of road maintenance works carried out by force account. As mentioned above, this operation had to be interrupted due to institutional and administrative reorganization and decentralization. The importance of providing new equipment within the scope of the Fourth Project seems to have influenced the decision to transform the equipment parks under the authority of the Wilaya road maintenance enterprises. The balance of the Fourth Loan was used to financt part of the pavement strengthening works initially envisaged under the Fifth Highway Project, which was fully consistent with the overall pavement strengthening and road maintenance objectives of the Fourth Project. Conclusions of the Fourth Project 4. The main objectives of the project were reached except for the acquisition of road maintenance equipment. It was implemented over an eight- year period. This was nearly twice the originally planned four and one-half years. The main reasons for implementation delays were: (a) the difficulty in comparing technical and economical deviations in requests from the enterprises (the Ministry was to have sought specialized technical assistance for this); (b) cumbersome administrative procedures affecting procurement during the first half of the decade 1980-1989; and (c) the potential for geological hazards affecting works on the Kherrata gorges, as confirmed by geological studies. Investigative studies were costly and their reliability questionable. * 16 - Comments The delay between the loan effectiveness date (June 16, 1981) and the startup of the civil works (April 8, 1983) was over two years. Therefore, the closing date had to be postponed to June 30, 1986. The unforeseen geological conditions required generalized concrete lining of the tunnels, which led to implementation delays. Therefore, the closing date had to be postponed finally to June 30, 1988. The partial acquisition of equipment planned for the Wilaya directorates in charge of highway maintenance and the depreciation of the dinar in relation to the US dollar left a significant undisbursed balance in the loan account. To take advantage of this, it was necessary to finance part of the maintenance and strengthening works initially envisaged under the Fifth Project and extend the closing date for a third time to June 30, 1989. PROJECT COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA FOURTH HIGHWAY PROJECT (LOAN 1892-AL) PART III: STATISTICAL INFORMATION * 18 - Table 1: Related Bank Loans Loan Number and Title Purpose FY Status Loan 912-AL Rehabilitation works for roads; 73 Completed; First Highway Project road maintenance equipment; and PPAR # 2882 consultant services for project, 3/11/80 preparation, planning, and management. Loan 1407-AL Reconstruction of a key section of 77 Completed; Second Highway Project the primary road network; technical PCR # 5652 assistance for construction and 5/16/85 planning; and training of middle management staff. Loan 1683-AL Two-year slice of a five-year road 79 Completed; Third Highway Project maintenance program; two-year PCR # 7043 tranche of a road pavement 12/14/87 rehabilitation program; construction works for improving NR1 section (La Chiffa-Brrouaghia); training for road maintenance; and technical assistance for improving MTP's planning capability. Loan 2808-AL Strengthening of primary roads; 87 Ongoing Fifth Highway Project road maintenance works; technical assistance to CTTP for road data collection, maintenance planning and control, pavement reinforcement planning, design, and contract management, and training at the Wiaya level; management training for KTP staff; research on the use of local building materine ls; training for OT in road transport management and road safety; preparation of intermodal National Transport Study; and detailed engineering for railroad track engineering. - 19 - Table 2: Proiect Timetable Planned Revised Actual Identification 10/78 Preparation Beginning 11/78 11/78 Preparation End 3/80 12/80 12/80 Appraisal Mission 3/80 1/80 1/80 Loan Negotiations 5/80 Board Approval 9/80 6/80 7/08/80 Loan Signature 8/01/80 8/01/80 Loan Effectiveness 12/01/80 2/28/81 6/16/81 5/29/81 Loan Closing 12/31/85 12/31/86 12/31/88 12/31/87 12/31/88 Project Completion 6/85 9/86 12/86 12/85 6/86 12/86 8/87 12/87 6/88 12/88 - 20 - Table 3: Cumulative Loan Disbursements Quarter Original Profile Actual (USD millions) Sep. 1980 Dec. 1980 Mar. 1981 10.00 Jun. 1981 25.00 Etf2 Sep. 1981 28.00 Dec. 1981 32.00 1.42 Mar. 1982 36.00 2.84 Jun. 1982 40.00 6.16 Sep. 1982 45.00 9.47 Dec. 1982 50.00 13.26 Mar. 1983 55.00 17.05 .01 Jun. 1983 60.00 24.63 .01 FY84 Sep. 1983 66.00 32.21 7.27 Dec. 1983 72.00 35.99 8.05 Mar. 1984 78.00 39.78 8.25 Jun. 1984 85.00 45.47 15.45 EYMI Sep. 1984 92.00 51.15 20.44 Dec. 1984 98.00 56.83 23.30 Mar. 1985 104.00 62.52 27.12 Jun. 1985 110.00 68.20 32.17 EY88 Sep. 1985 73.88 37.54 Dec. 1985 77.67 37.74 Mar. 1986 81.46 51.79 Jun. 1986 84.30 52.47 EBZ Sep. 1986 87.14 56.86 Dec. 1986 89.99 64.03 Mar. 1987 92.83 66.17 Jun. 1987 93.77 66.50 Sep. 1987 94.72 67.69 Dec. 1987 71.43 Mar. 1988 74.10 Jun. 1988 74.10 Sep. 1988 75.70 Dec. 1988 76.16 Mar. 1989 76.65 Jun. 1989 78.67 Sep. 1989 94.72 - 21 - Table 4: Project Costs Appraisal Estimates Actual Local Local Item Costs F.E. Total Costs F.E. Total Variation Higbway Maintenance Original Highway IV Equipment 7.7 37.7 45.4 3.5 14.0 17.5 -27.9 38% Training 0.5 1.7 2.2 0.4 1.8 1.2 -1.0 55% With Highway V Swap (1987-88 Program) 6.8 6.8 1.2 Subtotal 8.2 39.4 47.6 10.7 21.5 32.2 -15.4 68% Pavement Strengthening Original Highway IV 21.2 22.9 44.1 11.8 9.6 21.4 -22.7 49% With Highway V Swap 6.4 6.4 12.7 Subtotal 21.2 22.9 44.1 18.2 16.0 34.1 -10.0 77% RN9/Tunnel Construction Civil Works 53.7 55.3 109.0 57.5 47.1 104.6 -4.4 96% Construction Supervision 2.7 1.3 4.0 3.1 7.3 10.4 6.4 2611 Subtotal 56.4 56.6 113.0 60.6 54.4 115.0 2.0 1021 Assistance and Studies Strengthening of public enterprises 0.4 1.0 1.4 Preparation of rural roads project 0.2 0.2 Subtotal 0.4 1.2 1.6 TOTAL 86.2 120.1 206.3 89.5 91.8 181.3 25.0 88% * 22 - Table 5: ProjLectFinancing Original Planned Actual Bank Borrower Bank Borrower (USD million) Highway Maintenance Original Highway IV Equipment 35.7 7.7 14.0 3.5 Training 0.3 1.9 0.8 0.4 With Highway V Swap 6.8 6.8 (1987-88 Program) Pavement Strenathening Original Highway IV 19.9 24.2 9.6 11.8 With Highway V Swap - - 6.4 6.4 Tunnel Construction Civil Works 48.1 60.9 9.1 55.4 Construction Supv. 2.8 1.2 8.1 2.3 Assistance and Studies Strengthening of public enterprises 1.4 0.4 - Preparation of rural roads project 0.1 0.1 - - TOTAL 110.0 96.3 94.7 86.6 * 23 - Table 6: Economic Impact Original Estimate Reevaluated Construction Economic Rate of Return: RN9: Bordj Mira-Kherrata 29% 24% Project Life 50 years 50 years Strenahnng Economic Rate of Return: RN2: Oran-Reachi 25Z 48Z RN3: Ain Touta-Biskra 14% 51% RN4: Mouzia-Rouina 35% 36% RN5: N'Chellah - Bordj Bou Arreridi 18% 43% Project Life 20 years 20 years - 24 - Page 1 of 2 Table 7: Status of Covenants Loan Agreemnt Reference Description Status LA 3.0 Borrower to soptoy consultants and For Part C of the project, consultants were employed for experts In carrying out Parts C, D and training at the Bethoufa training center. The Batna E of the Project. training center was never opened due to changes in the national vocation training organization and capability. This change in the project was agreed to by the Bank. The last phase of training by the Bethoufa center included satellfte training of road contractors. The Bethouia center was closed in early 1986, two years after the 018 equipment parks had been converted into Wilaya-owned road works enterprises (contracting firm). The new Ministry of Vocational Training, with Bank financial assistance under the Fifth Education Project (Loan 1803-AL), created an Enterprise Career Development and Training Institute (INDEFE) to assist enterprises in inpementing their training plans. For Part D of the Project, consultants, satisfactory to the Bank were eptoyed. For Part E of the project, the Ministry of Agriculture did not employ consultants and assigned the study to the National Bureau for Rural Development Studies (8NEDER). The resulting study did not achieve its Intended objectives and was never released. LA 3.03 Carry out Parts A and C of the Project This covenant was comptied with for the 1982-83 time slice in accordance with annual programs of the maintenance program, which beneftted from forth detailed physical targets and financing wnder Part A of the Project. During the hiatus budgets appropriations and implementing caused by converting equipment parks to enterprises and related equipment renewal activities. creating 17 new UILayas, maintenance and training planning programing deteriorated (1986-86). The probem of restoring adequate programing of maintenance work by contract is an important objective of the Fifth Highway Project and model annual prograoi were prepared during project preparation, for seven pilot Uiayas for 1987. LA 3.04 Construct Part D of the Project to Comptiedwithalthough the design standards used at appraisat satisfactory to the Bank. were drastically changed, which is reflected in the amended project description. - 25 - Page 2 of 2 Table 7: Status of Covenants (continued) Loan Agreement Reference Description Status LA 3.05 Carry out Part 8 of the Project in Conptied with. accordance with design standards, methodology, criteria, and bid procedures acceptable to the Bank. LA 3.06 Borrower to ensure that dimensions Cooptied with by means of considerable regulation of the and axle toads of vehicles are entire road transport industry. consistent with the road design standards. ComIementary notes Timely progress reporting to the Bank required under Section 3.07 did not evolve satisfactorily due to the decentralizatio, of project contract supervision to the Wilayas. This was not a major problem due to the frequency of missions for preparation of the Fifth Highway Project, which permitted concurrent progress monitoring. The matter was addressed under the Fifth Project. Procurement procedures for ICB (Schedule 4) became an area of general disagreement between the Government and the Bank due to differences between Algerian regulations and Bank guidelines. In particular, the lack of public bid openings and substantial delays occasioned by negotiations with apparent low bidders were major issues. These were resolved on a country basis for all future Bank-financed projects. - 26 - Page 1 of 2 Table 8: Missions Stage of Nonth/ No. of Days in Specializations Nature of Project Cycle Year Staff Field Represented Ratings Problems Through Appraisal 9/78 2 21 Highway Engineer 4/79 2 7 Highway Engineer Economist 9/79 4 21 Highway Engineer Economist Appraisal through 1/80 4 14 Highway Engineer Board approval Economist Loan Officer Supervision 10/80 2 12 Highway Engineer 1 Economist 3/81 2 14 Highway Engineer 2 Technical Economist 6/81 2 18 Highway Engineer 2 Managerial Economist Technical 11/81 1 21 Highway Engineer 2 Nanagerial Technical 3/82 1 18 Highway Engineer 2 Nanagerial Technical 6/82 3 10 Highway Engineer 2 Managerial Economist Technical 10/82 2 12 Highway Engineer 2 Managerial Economist Technical 12/82 4 21 Highway Engineer I Technical Economist 7/83 2 21 Highway Engineer 1 Financial Analyst 11/83 4 25 Highway Engineer 1 Economist Training Specialist 12/84 4 19 Highway Engineer 1 Economist Tunne Expert 7/85 4 18 Highway Engineer 2 Technical Economist Financial Tunnet Expert 3/86 3 9 Highway Engineer 2 Technical Economist Financial 5/86 3 18 Highway Engineer 2 Technical Economist Financial * 27 - Page 2 of 2 Table 8: Missions (continued) Stage of Nonth/ No. of Days in Specializations Nature of Project Cycle Year Staff Field Represented Ratings Problems 6/86 2 16 Highway Engineer 2 Technical Economist Financial 9/86 4 21 Highway Engineer 2 Technical Economist Financial 12/86 2 7 Highway Engineer 2 Technical Financial 7/87 1 7 Highway Engineer 2 Development Impact 10/87 2 18 Highway Engineer 2 Development lapact Training Specialist 3/88 2 21 Highway Engineer 2 Development Impact Project Management 11/88 2 12 Highway Engineer Economist Completion 3/90 1 4 Operations Analyst Total nuiber of days in field a 285 - 28 - Table 9: Staff Inputs Loan Preparation Appraisal Negotiations Processing Supervision PCR Total FY89 FY80 FY81 16.4 17.0 7.0 12.7 6.1 FY82 8.5 FY83 0.3 22.8 FY84 8.3 FY85 21.8 FY86 0.3 29.8 FY87 0.3 9.2 FY88 5.2 FY89 3.5 FY90 0.2 6.2 6.4 FY91 1.3 1.3 Total 16.4 17.0 7.0 13.6 115.4 7.5 125.3 - 29 - Status of Bank Loans to the Transport Sector Loan Loan Net FY Project Number Amount Cancelled Amount Undisbursed Status 73 First Highway Project 912-AL 18.50 0.99 17.51 Closed 74 Bethious Port Project 995-AL 70.00 20.34 49.66 Closed 74 First Railway Project 996-AL 49.00 5.94 43.06 Closed 77 Second Highway Project 1407-AL 41.50 41.50 Closed 77 Second Port Project 1/ 1427-AL 80.00 79.73 0.27 Closed 79 Third Highway Project 1683-AL 126.00 126.00 Closed 81 Fourth Highway Project 1892-AL 110.00 15.28 94.72 Closed 87 Fifth Highway Project 2808-AL 120.00 120.00 74.20 ongoing 88 Second Railway Project 2976-AL 143.00 143.00 143.00 Ongoing 89 Third Ports Project 2/ 3105-AL 63.00 63.00 63.00 ongoing Total 821.00 122.28 698.72 280.20 1/ The implementation of an envisaged port project et Jijet did not materialize because of the postponement of an associated new steel complex. The loan was cancelled in 1980. 2/ Ports of Algiers, Annaba, and Oran. .. IBRD 13997R1 T* e ha s ba ll"' orcpow br w* a3 Apr "I OfIb foo"hA d "M&*d kvAB ftK~ kIJT b%lass so TeWOW amo* AoCaaanfino nor aswittilolm, chnfta AI 401&1111bmattsKa"a Bordi Souk El TenWn * UIagilgss Denys Axan For detail, see inset in upper left. SKIKOA < of &Iy *wr or awy IJ L Mhd laxbowlamnt or soceptism of ALGI ERS ' Ah Toy 1 9 , ashboursdades AthTaysRDE TIZI 8J2 lMl R ONaq Bo1sml'n.UZ Zl u Arrouch chI PA At El BaS Aich Ordi Mi S El Tnine A T&II Gow s La E, M. zJ Irn I - GUE Bauhe in Elf* SLlDA Akbou Bougoo CONSTANTINE ag eir O1 El Khroub OU AN Khmsai EDEA A9=Abid SETIF ADLAF rd *El EUIrno .ShO.A HLEF VerroS.ghEl 80UD BOUAnil KILO METEA S MANOAmEAGaANSIAM W Gac$ BATNA ghoul TIIMIT NAnOsst KHENCHELA a EES AIN q E 1TIARET Zeah DIGLA88IS Kwa Chelnala IKnr hl 4! Frndats- Babbeh -j *, MCENAm0hbISR TO OW&d Td *. DIIIA An El Malh BSR Sebdw hy 1Tlp I RasEMaOJELFA 1l Oved El Ar 4 clsif )( e _34 0Ouatob Aflou O s. 0* LAGHOUAT . EL BAYADH 36 MIhm Dw& Guar Ta AhSofa I Sft Ghard" ToTwalpur 6* T urn * ELOUEO < ALGERIA For detail, see abov.. ? ROAD NETWORK AND HIGHWAY PROJECT SITES t' WILAYA NAMES: SNAAMA * ALGIERS RELIZANE OUM EL 80UAGHI G.- HARDAIA 0 NEW PAVEMENT TUNNEL ROAD TLEMCEN AIN DEFLA PAM BECH4AR )*CONSTUCION RECONSTRUCTION STENGTENING CONSTRUCION BER ENTTLMEAIDFANAA BCA OUARGLA FIFTH HIGHWAY PROJECT: 0 PILOT ROAD MAINTENANCE PRO(,RAM AIN TEMOUCHENT BLIDA EL BAYADH -000 Proposed Under Fourth Highway Project 0 SUPPLEMENTAL ROAD MAINTENANCE PROGRAM ORAN BOUIRA LAGHOUAT Proposed Under F,fth Highwoy Project - PAVED NATIONAL ROADS MOSTAGANEM BORDJ BOU ARRERIDJ DJELFA TtNDOUF FOURTH HIGHWAY PROJECT PAVED WILAYA ROADS CHLEF SETIF 85KRA T DU. ADRAR Proposed Under Fifth Highway Project - RAILROADS TIPAZA MILA KHENCHELA El...... -- Proposed Under Fourth Highway + AIRPORTS BOUMERDES CONSTANTINE TEBESSA oiu ILLIZI@ Project (Implemented) RIVERS TIZI OUZOU GUELMA EL OUED a-sas Proposed Under Fourth HighwayBEAASUARSa Project (Not Implemented) 0 TOWNS AND VILLAGES BEJAIA SOUK AHAS BECHAR WILAYA CAPITALS JUEL SAIDA GHARDAIA TAMANGHASSET THIRD HIGHWAY PROJECT NATIONAL CAPITAL SKIKDA TIARET OUARGLA T ./HS SECOND HIGHWAY PROJECT WILAYA BOUNDARIES ANNABA TISSEMSILT TINDOUF 1. '*"' FIRST HIGHWAY PROJECT -.- INTERNATIONAL BOUNDARIES EL TARF MEDEA ADRA SIDI BEL ABBES M'SILA TAMANGHASSET To Goo / MASCARA BATNA ILLZI io-. Agoder MAY 1991