Turkey - State and Provincial Roads

 ICRR 10205 Report Number : ICRR10205 ICR Review Operations Evaluation Department 1. Project Data : OEDID : OEDID: L3324 Project ID : P009051 Project Name : State and Provincial Roads Country : Turkey Sector : Highways L/C Number : L3324 Partners involved : Switzerland Prepared by : Hernan Levy, OEDST Reviewed by : Alain Barbu Group Manager : Roger H. Slade Date Posted : 08/19/1998 2. Project Objectives, Financing, Costs and Components : The project, supported by a loan for US$ 300.0 million, was approved in FY91 and closed in FY98 (December 1997), six months behind schedule . US$50 million was canceled in 1993. The reduced loan was fully disbursed . Objectives : a) keep transport costs low by ensuring adequate renewal and maintenance of road network; b ) reduce the backlog of road strengthening; c ) continue the downsizing, modernization and improvement of the management of the General Directorate of Highways (KGM); d) strengthen KGM's planning and design capabilities; and e ) improve the management and safety of the road system through reforms, modernization and training . Components : i) strengthening 650 km of high priority sections of state roads; ii ) improvement of 300 km of provincial roads; iii) procurement of equipment for road maintenance, planning design, computerization and training; iv ) road safety equipment and materials; v ) training; vi) consulting services in support of the above objectives and components. Cost: Cost : Estimated total when all on-going works are completed: $750.9 million; actually expended by project closing : $472.1 million; Original appraisal estimate: $480 million Co -Financing : Switzerland: $15 million (not envisaged at appraisal ) were contributed towards improvement of Co- provincial road sections in lower income regions . 3. Achievement of Relevant Objectives : The physical components were substantially achieved . Some 72 percent of the target 950 km of road strengthening and improvement were implemented or had been completed by project closing, and total length would be about double the original target km when on -going contracts are completed . Equipment needed to upgrade KGM's maintenance equipment and to improve research, design and training facilities were procured and put into service . The new equipment improved the effectiveness of KGM's maintenance services, including winter maintenance . Road safety improvements were made through the provision of materials to improve accident black spots, install guard rails, install portable weighing scales and improve traffic signs and road markings . The project's modest institutional development objectives were not achieved . An extensive training program to train trainers for KGM's Training Center was prepared but not carried out due to Government's restrictions on travel abroad . Consultant services foreseen at appraisal to advise on pavement research, highway safety and highway management were not carried out. The economic rate of return for 695 km completed or close to completion is estimated at 15 percent, while the return for the 1875 km expected to be improved/strengthened under the project is estimated at 14 percent. Both figures are satisfactory but considerably below the 30 percent return foreseen at appraisal, because of higher construction costs and lower traffic than originally foreseen . 4. Significant Achievements : The improvement in KGM's maintenance capabilities and the corresponding reduction in maintenance costs thanks to project-financed equipment and supplier -financed training program is an important project achievement . 5. Significant Shortcomings : The extension of contracts leading to a substantial expansion in the length of the road sections to be improved/strengthened under the project exhausted project funds and will require Government funding outside the project timeframe. This is a significant shortcoming, since the Bank will have no control over the works still underway by project completion . The lack of requirement for joint reviews of investment program or other control mechanism may have been a contributing factor for this situation . Failure to implement the training program as well as the consultant advisory services made the project's institutional achievements negligible . $50 million to finance provision of bitumen were canceled following a dispute on procurement procedures, reducing project financed items . The dispute arose in part as a result of restrictive bid conditions . The procurement dispute suggests potentially significant rent seeking behavior on the part of some local officials . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Satisfactory Marginally Satisfactory Failure to implement the modest institutional development components . Institutional Dev .: Partial Negligible Ditto Sustainability : Likely Likely Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Satisfactory Quality of ICR : Satisfactory 7. Lessons of Broad Applicability : (i) Sector investment-type projects can easily astray from intended targets , even if the executing agency is experienced and has a tradition of competence , unless strict controls are instituted for the project's implementation phase; (ii) supplier-provided training encapsulates foreign costs as part of equipment supply and insulates it from government resistance to use foreign exchange for training, (iii) care should be taken to avoid overly restrictive bid specifications that will result in lack of effective competition . 8. Audit Recommended? Yes No Why? To check what was actually implemented, given yet -to-be completed contracts at the time of project closing 9. Comments on Quality of ICR : The ICR is of good quality, and covers comprehensively some aspects, such as the problems with procurement and the extension of civil works contracts . It also includes rates of return for all road subprojects . However, the ICR does not explain why studies were not carried out and does not include a plan for future project operations other than a reference to a follow-on project.