Madagascar - Ports Rehabilitation Project

 Ports rehabilitation project Report No: ; Type: Report/Evaluation Memorandum ; Country: Madagascar; Region: Africa; Sector: Ports & Waterways; Major Sector: Transportation; ProjectID: P001507 December 29, 1995 Madagascar: Ports Rehabilitation Project (Credit 1752- MAG) The Implementation Completion Report (ICR) on the Madagascar Ports Rehabilitation project (Credit 1752-MAG, approved in FY87) was prepared by the Africa Regional Office with Part II contributed by the Borrower. The credit for SDR $13.2 million (US$16 million equivalent) was closed on December 31, 1994, two years and three months behind schedule. A balance of US$2.9 million equivalent was canceled. The project relaunched Bank operations in Madagascar's port sector, eight years after the completion of the first port project. The objectives of the port rehabilitation project were: (a) to rehabilitate physical infrastructure and to rehabilitate or provide new equipment in 10 ports; (b) to develop the institutional capacity to manage, operate and maintain the port system, at a reasonable level of efficiency; and (c) to eliminate delays and safety hazards in navigation. To achieve these objectives, the project comprised repair and rehabilitation of existing infrastructure; procurement of new cargo handling equipment; technical assistance and training to the Toamasina Port Authority (TMA) and to the Directorate of Maritime Transport (DTM); and dredging and navigation aids. The project's performance was mixed. All physical works and institutional strengthening measures proposed for the Toamasina Port, managed by the TMA, and which carries some three-quarters of Madagascar's port traffic, were successfully implemented. The TMA also showed a satisfactory financial position at completion of the project. In the other project ports, as well as in DMT, which oversees them, performance showed large variations. The management and financial goals for the DMT which comprised achieving adequate cost recovery, reducing staffing by 10 percent, and increasing the budgetary allocation for maintenance, were not achieved. The economic rate of return for the project is estimated at 27 percent, marginally below the 29 percent estimated at appraisal. However, investments in four of the ports, which accounted for some 30 percent of the IDA funding for the project, had negative rates of return. There were major problems with project design. The institutional objectives, were too broadly defined and ambitious, and the training and technical assistance were too limited in scope to be able to adequately support the objectives. In addition, the project was difficult to manage and to supervise at 10 ports located throughout Madagascar. The Operations Evaluation Department (OED) rates the project outcome as marginally satisfactory (versus satisfactory in the ICR); this assessment takes into account the good outcome for the part of the project focusing on Toamasina and the unsatisfactory one for the DTM and the smaller ports. The OED rates institutional development as moderate and sustainability as uncertain, in line with the ICR. It further rates Bank's performance as satisfactory, although project design was complex and supervision was deficient. The ICR is good, although the section on future operation of project components exclusively revolves around future loans. The main lesson from this operation is that projects should be well-focused, have realistic objectives, and be limited in scope, both physically and institutionally. A further lesson, based on the experience with the dredging component, is that maintenance works should be contracted to private operators rather than conducted by force account. The project may be audited.