Sri Lanka - Colombo Urban Transport Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 19900 IMPLEMENTATION COMPLETION REPORT SRI LANKA COLOMBO URBAN TRANSPORT PROJECT CREDIT NO. 2495-CE December 22, 1999 Infrastructure Sector Management Unit South Asia 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.  CURRENCY EQUIVALENTS Currency unit - Sri Lanka Rupee (Rs) Appraisal, April 1993 US$1.00 Rs 47.7 Mid term review, March 1997 US$1.00 Rs 57.7 Completion, June 1999 US$1.00 = Rs.71.1 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS CEA Central Environmental Agency CMC Colombo Municipal Council CUTP The Colombo Urban Transport Project CUTS Colombo Urban Transport Study GCMA Greater Colombo Metropolitan Area GOSL Government of Sri Lanka IDA International Development Agency MEIP Metropolitan Environment Improvement Project MOTH Ministry of Transport and Highways NBRO National Building Research Organization NTC National Transport Commission PC Provincial Councils PPF Project Preparation Facility SLR Sri Lanka Railways SLRA Sri Lanka Railway Authority TA Technical Assistance TSM Traffic System Management TSPC Transport Studies and Planning Centre FISCAL YEAR January 1 - December 31 Vice President Mieko Nishimizu Country Director Mariana Todorova Sector Director Frannie Leautier Team Leader Juan Gaviria Task Team Leader John Tillman  FOR OFFICLAL USE ONLY TABLE OF CONTENTS PREFACE .........................................................I EVALUATION SUMMARY ........................................................2 IMPLEMENTATION COMPLETION REPORT ................... ......................................5 PART I - PROJECT IMPLEMENTATION ASSESSMENT ......................................................... 5 A. Project objectives ................................5 B Achievements of Proj ect Objectives .............................. . , . , , . , . 6 C. Major factors affecting the project .............................8 D. Project sustainability ..............................9 E. Bank performance ,. . ...9 F. Borrower performance ........................................................... 12 G. Assessment of outcome .......................................................... 12 H. Future operation .,, 13 I. Key lessons learned .......................................................... 14 PART II - STATISTICAL ANNEX ....................................................... 15 Table 1: Summary Of Assessments .......................................................... 16 Table 2: Related Bank Loans/Credits .......................................................... 17 Table 3: Project Timetable .......................................................... 19 Table 4: Loan Disbursements: Cumulative EstimatedAndActual ..................................................... 20 Tables 5 And 6: Key Indicators For Project Implementation And Operation .................. ................... 21 Table 7: Studies Included In Project .......................................................... 22 Table 8a, Part I - Project Costs In Us $ ........................................................... 24 Table 8a, Part 2 - Project In Sl Rs .......................................................... 25 Table 8b: Project Financing .......................................................... 26 Table 9: Economic Costs And Benefits .......................................................... 27 Table 10: Status Of Legal Covenants .......................................................... 28 Table 12: Bank Resources: StaffInputs .......................................................... 29 Table 13: Bank Resourses: Missions .......................................................... 30 APPENDIXES A. ICR Mission's Aide-Memoire B. Economic Re-evaluation C. Borrower's Contribution to the ICR D. Borrower's Comments on draft ICR E. Map IBRD No. 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.   IMPLEMENTATION COMPLETION REPORT SRI LANKA COLOMBO URBAN TRANSPORT PROJECT CREDIT NO. 2495-CE PREFACE This is the Implementation Completion Report for the US$ 25.3 million Colombo Urban Transport Project (CUTP) in Sri Lanka, for which Credit 2495-CE in the amount of US$20 million (SDR 14.4 million equivalent) was approved on May 18, 1993 and made effective on August 18, 1993. The project closed June 30, 1999. As of December 20, 1999, disbursements totaled SDR10,031,235.14 (USD14,254,695.57) with an undisbursed balance of SDR4,368,764.86. After final payments have been made and the outstanding Special Account balance recovered, it is anticipated an amount of approximately SDR4.3 million ($5.9 million equivalent) will be cancelled. This report was prepared by John Tillman, ICR Task Leader (SASIN), with the assistance of William Denning (TWUTD), particularly with the economic evaluations. The report was reviewed by the Borrower and by Slobodan Mitric (ECSIN), Stein Lundebye, Juan Gaviria, and Frannie Leautier, Infrastructure Sector Director (SASIN). In addition, Emesto Corrales, SASIN, provided active support in the preparation of the report. IDA's final supervision/completion mission in May 1999 advised the Borrower on the preparation of their final evaluation report. This report is based on a review of material in the Project File and on the borrower's evaluation report (Appendix C).   IMPLEMENTATION COMPLETION REPORT SRI LANKA COLOMBO URBAN TRANSPORT PROJECT CREDIT NO. 2495-CE EVALUATION SUMMARY Summary 1. During the 1980's Government of Sri Lanka (GOSL) planned major economic reforms for which proposed Bank support included a transport project to assist sector reforrns and investments. In 1988 the road component became the Third Roads Project (US $42 million Credit No 2183-CE, 1990), and a US$276 million project was envisaged for the rail, bus and Colombo urban transport infrastructure components. But as the reform climate weakened and concerns arose about the viability of the proposed railway investment program, the assistance was reduced to a US$25 million Colombo Urban Transport Project (CUTP). The project consisted mainly of Traffic System Management (TSM) measures in Colombo and Technical Assistance (TA) to maintain the transport reform dialogue. The project improved traffic conditions in two of Colombo's worst congested areas. In addition, while maintaining the reform dialogue, progress was made in developing long term urban transport plans, implementing a railway access policy for private rail freight operations, and establishing monitoring stations and air quality records as part of GOSL's Clean Air 2000 action plan. Notwithstanding the narrower objectives, the CUTP was often adversely judged in the context of the GOSL's failure to implement its overall reform agenda. -Evaluation of Project objectives 2. The appraisal report reflected the original ambitious intentions, and indicated objectives that were too broadly defined in relation to both the actual project components and to GOSL's ability to undertake reforms. The stated objectives of the project were: (a) reduce traffic bottlenecks and congestion in Colombo; and (b) assist GOSL and relevant agencies to: (i) develop transport plans for Colombo and strengthen urban transport institutions; (ii) strengthen bus regulatory capabilities; (iii) increase the efficiency of the Sri Lanka Railways (SLR); and (iv) promote air quality standards and emission control measures. 3. The objectives of the traffic and urban planning component were straightforward, but the objectives of the bus and railway components were complex and risky, and beyond what could be dealt with by an intensive supervision dialogue. GOSL had not formulated a coherent program for establishing an effective bus regulatory regime, thus the objective of strengthening the concerned agencies was a risky one for GOSL. The railway component assumed that GOSL would implement the legislation transforming the railway into an autonomous body but this proved to be too complex and risky for GOSL. The environment item was, however, an integral part of the successful MEIP program and its Clean Air 2000 action plan.  Implementation Experience and Results 4. The Project outcome was satisfactory. Recent traffic studies of the traffic system management program (76% of project cost), which consisted of measures in the Olcott Mawatha corridor and additional capacity at the Maradana junction, indicates major reductions in travel time, and that an economic rate of return of 27% was achieved, close to that projected at appraisal. As a result of the success of this component, the Colombo Municipal Council (CMC) is planning to implement further traffic management programs. The outcome of the TA components (24% of cost) was mixed. The Colombo Urban Transport Study was satisfactory, but was completed at end of the project leaving little time for discussions with GOSL about the implementation of the policies and programs. The outcome of the bus regulatory component (training and provision of computer hardware and software and the dropped bus route costing study) was unsatisfactory. Little institutional strengthening occurred, while the bus crew training program included at the mid term review was not matched with improved safety programs, and has resulted in little improvement in bus crew performance. For the railway component, it was agreed with GOSL/SLR during the mid term review that the railway component would focus on implementing the access for private rail freight operators, and the outcome of this was satisfactory. The general commercial assistance for SLR accounting and property development had some limited success. The outcome of the air quality monitoring component, which included procurement of air quality testing equipment and training in data collection and analysis was a successful part of the Clean Air 2000 action plan. 5. The key factor adversely affecting the achievement of project objectives was the deteriorating overall climate for reforms. Bus policy remained in a vacuum. The legislation establishing SLRA was not implemented, but GOSL moved ahead on railway freight access policy. The protracted GOSL clearance procedures for procurement and selection of consultants, however, delayed the opportunity for a dialogue on the implementation of various reforms. Transport Studies and Planning Centre (TSPC) was to have played a vital role in managing the project, but it was scaled back during the latter part of the project, which reduced its effectiveness especially in monitoring and evaluation. 6. While IDA's identification, preparation, and supervision was satisfactory, appraisal suffered from setting unrealistic goals for the TA components. Following the hiatus in reforms in 1994 and 1995, IDA and GOSL developed a Transport Sector Strategy study and some of the issues discussed in the study were taken up under the project including the amalgamation of the 93 public sector bus companies into I 1 units, and the railway access policy. Project Sustainability 7. The completed physical works had a sustainable impact on traffic flows, and further improvements are attainable from coordinating the traffic signals, and from introducing one way systems and bus lanes. A dialogue on transport reforms was maintained and many policy papers were prepared in Sri Lanka during the project period. CMC has prepared an action plan for traffic management and it is likely that over time much of the urban transport planning will lead to implementation of traffic management and engineering schemes. Little was achieved with the bus component due to GOSL's indecision about the bus industry reform. The railway access policy has been implemented for one private party, but the timing of access for other shippers may depend on when GOSL deals with labor opposition to railway reform. The air quality monitoring stations have been an integral component of the Clean Air 2000 Action Plan, and has provided the basis for Sri Lanka's first air quality analysis, but it will be up to GOSL and  stakeholders to translate this into policies and implement programs that will achieve the air quality reduction targets. Lessons Learned 8. The project objectives given in the appraisal report should be related to what the project can deliver. It is important to be realistic about the potential results of institutional strengthening since that depends critically on the progress of country-wide economic and decentralization reforms. Too many implementing agencies involved with the project weakens the impact of dialogue on project matters and policy reforms. Project Management Units should be avoided, since projects being implemented by an established unit of the executing agency contribute directly to that agency's strengthening. Bids should be obtained for major civil works and goods and proposals for major consultancy studies before Board presentation.   IMPLEMENTATION COMPLETION REPORT SRI LANKA COLOMBO URBAN TRANSPORT PROJECT CREDIT NO. 2495-CE PART I - PROJECT IMPLEMENTATION ASSESSMENT A. PROJECT OBJECTIVES 1. The objectives of the project as given in the appraisal report were to: (a) remove traffic bottlenecks and reduce congestion in Central Colombo; (b) assist the Government of Sri Lanka (GOSL) and relevant agencies to: (i) develop transport plans for the Greater Colombo Metropolitan Area (GCMA) and strengthen urban transport institutions; (ii) strengthen the bus regulatory capabilities of the National Transport Commission (NTC) and Provincial Councils (PC); (iii) increase the efficiency of the Sri Lanka Railways (SLR); and (iv) promote air quality standards and emission control measures (Central Environmental Agency (CEA)/Metropolitan Environment Improvement Project (MEIP)). 2. The objectives matched GOSL's strategy of providing the transport infrastructure needed for greater economic commercialization and private sector participation, and for promotion of export oriented growth. Colombo being a focal point for industrial and commercial growth, the strategy was to implement traffic management measures and develop long-term plans to prevent traffic congestion in Colombo from imposing high costs on commercial and industrial activity which could damage Sri Lanka's export competitiveness. IDA supported this strategy. 3. IDA had intended to assist with the implementation of major transport sector reforms and investments. When these reforms could not be undertaken, certain components were repackaged to form a modest project of urgent Traffic System Management (TSM) measures in Colombo and Technical Assistance (TA) to maintain a dialogue on transport reforms. The style of the appraisal report however reflected the earlier ambitious intentions. The actual design of the project components suggest that a more appropriate statement of the objectives would have been: (a) remove certain key traffic bottlenecks in Colombo and reduce related congestion; (b) maintain a dialogue with GOSL on transport reforms: (i) develop long-term transport plans for the GCMA; (b) (ii) strengthen the bus regulatory capabilities of the national Transport Commission (NTC) and the Provincial Councils (PC); (b) (iii) assist the implementation of railway reforms; and (b) (iv) provide an analytical basis for developing an air pollution management program. Modest attempts were made during supervision to restate the project objectives, particularly during the mid-term review.  6 4. The objectives of the TSM component (76% of project cost) were straightforward. The appraisal report indicated the risks that occur with this type of activity and to reduce these risks the component included close supervision of the civil works. However the report was silent on maintenance management systems and no TA was provided for improving these systems. 5. The objectives of certain TA components were complex and risky. The appraisal report noted that an intensive policy dialogue with GOSL would be needed to reduce the risk that the achievement of the institutional strengthening and reform objectives did not fall below expectations. However these risks exceeded what could be dealt with through intensive dialogue during supervision missions. The effectiveness of the dialogue was also made more difficult because the different topics and agencies diluted the project's focus. 6. The bus and railway items were complex and risky. GOSL had intended to privatize the Sri Lanka Central Transport Board by transferring ownership to private operators, but was only able to decentralized the Board into 93 peoplised units with ownership shared between GOSL and the workers. The appraisal report gave no indication that GOSL had formulated a coherent program for establishing an effective bus riegulatory agencies, and in the absence of such a program, the objective of strengthening NTC and PCs was a risky one for GOSL. The railway component assumed that GOSL would implement the legislation transforming SLR into an autonomous Sri Lanka Railway Authority (SLRA), but this proved to be too complex and risky for GOSL. However the environment item was an integral part of the successful MEIP program and its Clean Air 2000 action plan, reviewed in the 1999 Bank report "Colombo Story; Piloting Environmental Change in Sri Lanka." B. ACHIEVEMENTS OF PROJECT OBJECTIVES Project Components 7. The Project consisted of the following components: (a) A traffic system management program (TSM (76% of project cost). This consisted of: (i) junction improvements, signalization, bus terminal improvements, pedestrian facilities and a footbridge, rehabilitation of the road, sidewalks and drainage and stalls for small traders for the Fort area and the nearby Olcott Mawatha corridor (38% of project cost); (ii) additional capacity at the Maradana junction by construction of an additional bridge over the railway (27% of cost); and (iii) consultancy supervision (11% of cost); (b) Colombo Urban Transport Study (CUTS) (6% of cost). This consisted of the preparation of a long term comprehensive policy and investment program; and (c) Institutional strengthening (17% of costs): (i) NTC/PC. To strengthen the bus regulatory capability, this included training for NTC and PC staff and provision of computer hardware and software and a bus route costing study (4% of cost). (ii) SLR. To support SLR becoming an autonomous body, consultancy services were provided to advise on the commercialization process including potential private sector involvement, training of financial, operating and marketmng staff, installation and training of a management  7 information system, and development of a public sector obligation framework (11% of cost). (iii) Air quality monitoring and management. This included procurement of air quality testing equipment and consultancy services to prepare an air pollution control program for Colombo by developing an emissions inventory, monitoring air pollutants, carrying out feasibility studies for reducing vehicular air pollution, and training (2% of cost). Achievement of Objectives 8. Remove "certain" transport bottlenecks and reduce "related " traffic congestion in Central Colombo. This objective was fully achieved. A recent traffic study indicates substantial reduction travel time in the affected areas and the economic returns projected at appraisal were realized. As a result of the success of this component, Colombo Municipal Council (CMC) is planning to implement further traffic management programs. The component also encouraged the development of two private contractors who now do work for public road agencies. 9. Long-term Urban Transport Planning. This objective was fully achieved and a comprehensive policy and investment program for Colombo was prepared. The work was done in two phases but GOSL consultant selection process resulted in a two year delay in the second phase which was completed only as the project closed. A workshop with key stakeholders was conducted in May 1999 to discuss the institutional findings of the report, and IDA is currently preparing an urban transport strategy note. In addition, during the project period there were workshops and papers prepared by various parties in Sri Lanka and an awareness of the strategies and policies needed to tackle Colombo's traffic problems began to emerge. 10. Strengthening management capability of NTClPCs. This objective was not achieved and these agencies have remained unchanged in their bus regulatory capacity. 11. Increasing efficiency of SLR. International experience now indicates that the change from SLR to SLRA would be unlikely to lead to an increase in efficiency, and that private sector participation is needed. In 1995 the new government declined to implement the law establishing SLRA, and in 1996 IDA and GOSL agreed to focus the railway TA component to assist SLR implement an access policy for private development of rail freight services. SLR established a Strategic Business Unit (SBU) which developed the access policy and negotiated an access contract with a cement company to operate its own train, but SBU/SLR/MOTH have yet to work with two further parties interested in the access policy. The project thus satisfactorily initiated the introduction of the private sector into the railway. 12. Promote air quality standards and emission control measures. This objective was inappropriate and was not achieved. The actual design of this component suggests that a more appropriate objective was to initiate a dialogue among GOSL agencies to highlight the need for appropriate ambient air quality standards and provide an analytical basis for developing an air pollution management program, and this was achieved.  8 Economic Evaluation 13. An economic reassessment was undertaken for the TSM which amounted to 76% of project costs (see annex B). The major physical components of the project are likely to meet their objectives, and have ERR's similar to those estimated at appraisal. Economic Rates of Return (ERR%) Components ICR Appraisal Olcott Mawatha 30 28 Maradana Junction 22 24 Fort Junctions dropped 45 Total 27 26 C. MAJOR FACTORS AFFECTING THE PROJECT 14. Factors outside the control of the government. Security incidents in Colombo required a change in traffic patterns causing the Fort traffic measures to be dropped from the project. Security matters also became a GOSL priority and adversely affected the climate for reforms. 15. Factors within the control of the government. Following the change of government in 1994, the legislation establishing SLRA was not implemented. Bus policy remained in a vacuum and there was no leadership to reorient the National Transport Commission from the traditions of the Central Transport Board from which it had originated. The change in the Minister of Transport in 1997 further delayed decision making. However, these delays provided the opportunity for extensive discussions of transport policy within GOSL and civil society. GOSL moved ahead on railway freiaht access policy and began regrouping the "peoplised" bus services to 11 companies. The slowdown in decentralization also reduced the ability of the Provincial Councils to undertake many of their responsibilities. 16. Timeliness in decision making. The civil works were completed by the original closing date indicating that the appraisal estimate of the project period was realistic. The protracted GOSL clearance procedures for procurement and selection of consultants, however, caused delays and reduced the opportunity for a dialogue on the implementation of various reforms. 17. Project cost. The actual project cost (Table 8a) amounted to US$ 18 million, i.e. 72% of the appraisal estimate of US$ 25 million. The contingencies were not needed. The savings on the Fort junction were used on improvements to the bus station at Bastion Mawatha within the Olcott Mawatha area. There were considerable savings on the TA components especially the railway item. IDA would likely have responded favorably to a GOSL request to use the project savings for other justifiable traffic schemes in Colombo, but no request was received which could have been implemented during the project period.  9 D. PROJECT SUSTAINABILrIY 18. The sustainability ratings of the components are: Overall Traffic system Urban transport NTC/PC SLR Environmental management planning monitoring (TSM) Likely Likely Likely Unlikely Uncertain Uncertain 19. The road improvements had a sustainable impact on traffic flows. Further improvements are attainable from coordinating the traffic signals, and from introducing one way systems and bus lanes. The Colombo Metropolitan Council (CMC) highway department has taken over the maintenance of the improvements as part of their regular maintenance program and has the capacity for continuing with traffic management projects. 20. The technical assistance was successful in maintaining a dialogue on transport reforms, and many policy papers were prepared during the project period. CMC has prepared an action plan for traffic management and it is likely that over time much of the CUTS work will lead to implementation of traffic management and engineering schemes. Little was achieved with the NTC component due to GOSL's indecision about the bus industry. The objective of the railway component was changed during the mid-term review to the development of an access policy for private sector railway freight services. An initial access contract is in operation, and other shippers are interested, but the timing of these other contracts depends on when GOSL/MOTH is successful in dealing with labor opposition to railway reform. 21. CEA has developed a program of air quality monitoring in the Colombo Metropolitan Area utilizing the two fixed air quality monitoring stations procured under the Credit and a monitoring program for secondary cities using the mobile station. Funds for the program have been allocated by GOSL, and technical assistance for data analysis and interpretation will be provided under the IDA financed Environment Action I Project. A comprehensive air quality management action plan was developed with stakeholder participation and in 1993 GOSL approved the implementation of the Clean Air 2000 Action Plan. While certain parts of the Action Plan have been implemented, a significant portion has yet to be implemented. The sustainability of the air quality monitoring component is therefore uncertain. E. IDA'S PERFORMANCE 22. Overall, IDA's identification, preparation and supervision was satisfactory. Considerable effort was devoted to identification and preparation activities, and to supervision from early 1997. Appraisal was unsatisfactory. 23. Project identification and preparation were satisfactory. Identification began in 1986 as part of IDA's proposed support for the economic reforms proposed by GOSL. Initially the proposed Transport Rehabilitation project covered roads, railway, bus line of credit, and urban traffic management, and in 1988 a Project Preparation Facility was for the preparation work. In 1988 the road component became a separate project (Third Roads Project Credit No 2183-CE).  10 In 1990 the project was renamed Transport I and in 1991 assistance was proposed for a US$276 million project with railway, bus and Colombo traffic system management schemes components. In 1992 concerns about the proposed railway investment program resulted in the Colombo Urban Transport Project (CUTP) being proposed which focused on relieving key traffic bottlenecks in Colombo and on providing TA to assist keeping the transport reform dialogue open with possible future assistance for major reforms as and when they occurred. IDA therefore demonstrated flexibility in modifying the proposed assistance to respond to the changing political climate in Sri Lanka. 24. Appraisal. The appraisal was unsatisfactory. The Appraisal mission aide-memoire is missing from the files. The appraisal report documents the TSM investment program and its analysis. However, there was no discussion of the status of maintenance management systems and unlike most IDA financed road projects no assistance was provided for strengthening the systems. The feasibility studies and many of the designs for civil works for the TSM component were completed by credit signing in June 1993, but only one contract had been issued for bids by the end of 1993. This was not untypical of projects of this vintage although Bank practice now requires bids to be received on the first year program. 25. The economic evaluation was appropriate to an urban transport project. It included consideration of changes in traffic congestion on project benefits. It included consideration of increased congestion during project construction as a "negative benefit". Benefits due to changes in vehicle operating costs were estimated for both benefits from reduced roughness and benefits due to reduction in congestion. The evaluation conducted an appropriate level of sensitivity analysis and calculated switch values. Benefits described but not quantified in the appraisal report included reduced traffic safety hazards and improved pedestrian access. The third benefit of better access to the port area, was eliminated when the Fort Junction item was dropped as a result of security considerations. Information developed during the project indicated that: (a) at Olcott Mawatha improvements were quite substantial, with speeds increasing from 25 km per hour to 35 km per hour during uncongested times and from 16 km to 20 km during extreme congestion (see Annex B). Accidents in this area also dropped by 25% during the project period. However at Maradana accidents nearly tripled in part due to traffic being temporarily diverted here from the Baseline Road reconstruction area. 26. The urban transport study was well conceived, and the appraisal of the railway component was satisfactory. SLR matters were thoroughly analyzed during preparation and the appraisal report summarizes SLR issues. In 1993 the conventional wisdom concerning the reforms needed to adapt state owned railways to competitive transport markets was changing from a focus on institutional reforms within the public sector railway to the realization that privatization was essential. The Railway TA component reflects this transition by having two components: the first to assist in transforming SLR into SLRA , and the second to assist GOSL to evaluate the options for privatization, thus implicitly recognizing the limitations of SLRA. 27. The appraisal of the NTC component was unsatisfactory. The report did not analyze the bus regulatory regime etc., and therefore provided no basis for assessing the need for assistance for strengthening NTC/PC, or for evaluating whether such assistance was successful. However, dialogue during the project contributed to GOSL consolidating the peoplised bus companies into 11 regional transport companies in 1998. 28. The appraisal report discussion of the Air Quality Monitoring component was unsatisfactory. There was no analysis of policies, programs or institutional arrangements and problems later arose over the responsibility for monitoring and whether CEA was to develop an  11 air pollution management program and who was to implement the program. As a Bank administered program, it was a conflict of responsibility for MEIP to implement this component. 29. Supervision was satisfactory, but was adversely affected by the political and security developments in Sri Lanka in 1994 and 1995. Following the hiatus in reforms during these two years, in 1996 IDA and GOSL developed a Transport Sector Strategy study which involved participatory workshops. After endorsement of the sector work by GOSL, there was intense supervision from March 1997 until project closing in June 1999 which helped to make up for earlier deficiencies. Some of the issues discussed in the strategy were taken up under the project including the amalgamation of the peoplised bus companies and the railway access policy. 30. The supervision missions from 1997 onwards monitored the civil works closely. The project envisaged sequencing for much of the civil works, and the political developments and change in government in 1994 caused only relatively small delays. All contracts were completed by project closing, except for the Fort intersections which were dropped because of the impact of security measures on traffic flows at these locations. IDA declined to fund the traffic signal component when GOSL awarded the contract on a sole source basis to a local supplier. 31. The March 1997 supervision mission conducted an informal mid term review and agreed with GOSL to restructure the TA component to include financing (i) a private bus sector crew training program prior to GOSL making such training compulsory for those entering the industry; and (ii) SLR training and consultancy services to prepare the railway for operation of an access policy and for commercial orientation. The midterm review also undertook to retrofit performance indicators, but this was before the procedures for a project design summary table had been fully developed. The indicators for the bus and environmental components exceeded what could be expected to be achieved from the TA components. Moreover data that was to be collected by the Transport Studies and Planning Commission (TSPC) that was essential for quantifying the indicators was not collected as TSPC was downsized during project implementation reducing its capacity to cany out monitoring. IDA's supervision teams (there were four tasks managers during the project period) did not always work closely enough with SLR or NTC but relied on TSPC for maintaining the policy and reform dialogue. TSPC did not have the stature within GOSL to adequately pursue the reform agenda. 32. Supervision of the TA component was generally satisfactory. Initially attention was focussed on beginning the Colombo Urban Transport Study, and to holding a "best practice" railway workshop in 1995. The lack of an appraisal blueprint for assessing the progress in institutional strengthening of NTC resulted in this item being rated satisfactory in the project status report because procurement was proceeding and NTC was continuing its routine work. The supervision team worked closely with SLRJSBU to finalize and implement the access policy, including a 1998 study of potential private rail operators. 33. The air quality component was managed by MEIP, and the CUTP supervision reports focused on the details of the monitoring program and the specific problems concerning repair and operation of the monitoring equipment. The reports did not indicate how the component contributed to the progress of the Clean Air 2000 action plan. This explains the apparent contradiction between the critical supervision comments on the performance of the monitoring equipment and the continued satisfactory rating in the project status report.  12 F. BORROWER PERFORMANCE 34. The borrower's project identification and preparation was satisfactory, but implementation was only marginally satisfactory due to a variety of problems, which hindered but did not ultimately prevent the projects implementation. Slow GOSL procurement procedures delayed the TSM component. Also the project included procurement of traffic signal equipment under international competitive bidding process with the equipment to be the first part of a computerized urban traffic control system for Colombo. In 1997/98 MOTH unilaterally decided that the traffic signal equipment from abroad was too expensive, and that it would buy locally made traffic signal equipment on a sole source basis, despite the unsophisticated equipment was unsuitable for the central business district of Colombo or for the project roads due to poor co- ordination of the traffic signals in the absence of "cableless linking" to electrical time clocks and thereby reducing the benefits of the traffic management schemes. GOSL financed the basic signal equipment itself when IDA declined to finance, but the cableless linking has yet to be introduced. 35. Consultant selection in the TA component was delayed by GOSL procedures. CUTS was split into two phases with separate consultant selection processes, and the full study could only be completed at the time of project closing. GOSL remained undecided about how to make the "peoplised" bus companies successful and NTC played a passive role in using the TA component for institutional strengthening. Instead NTC proposed the private sector bus crew training program. The new government in 1995 decided against transforming SLR into SLRA but was willing to use the TA for implementing the access policy for freight operations. The change of Minister delayed establishing the SBU and the recruiting of consultants for this and the accounting, property development and stores management proved time consuming. GOSL (MOTH/SLR) declined to hire a consulting firm for the development of SLR management information systems even though individual consultants were not available 36. In the environmental component, CEA was to retain ownership of the equipment, but the routine monitoring was to be contracted out to NBRO. But the component suffered from difficulties that arose due to inadequate coordination between the CEA and NBRO and a lack of clear definition of responsibility between the two agencies. 37. TSPC was to have played a vital role in managing the project, but it took time to become effective and was scaled back during the latter part of the project, which severely damaged its effectiveness especially in monitoring and evaluation. TSPC played a useful role in managing the day to day affairs of the project, maintaining a policy dialogue with some agencies, and on assisting CMC with the TSM component. TSPC was responsible for the execution of CUTS and it satisfactorily supervised the consultants. However TSPC lacked the stature to take the leadership in project matters relating to SLR and NTC. All legal covenants were met. G. ASSESSMENT OF OUTCOME 38. Overall the Project outcome was rated as satisfactory (Table 1): (a) The outcome of the TSM component was very satisfactory and CMC is planning to implement further traffic management programs.  13 (b) The outcome of TA assistance components were: (i) The CUTS component was satisfactory, even though it was completed only at end of project, thus leaving little time for supervision missions to discuss with GOSL their plans to implement the policies and programs. (ii) The NTC/PC component was unsatisfactory. Little institutional strengthening of NTC/PC occurred. Also the bus crew training program was not matched with any improved safety programs etc., and has resulted in little improvement in bus crew performance. (iii) In 1996 IDA and GOSL decided to focus the Railway TA on assisting GOSL/SLR to implement access for private Rail freight operators, and the outcome of this component was satisfactory. The assistance in areas such as accounting and property development had some success once GOSL finally approved the consultant's appointments. An expatriate railway adviser provided a wide range of advice and assistance to SLR on modern railway management practices. Unfortunately, many of the proposed innovations required SLR to obtain GOSL/MOTH approval and this was often delayed or not forthcoming. But, as noted, such assistance would have little impact on efficiency as long as SLR remains in the public sector. (iv) The outcome of the air quality monitoring component was partially satisfactory and established monitoring stations as part of the Clean Air 2000 action plan, but it will be up to GOSL and stakeholders to translate this into policies and implement programs that will achieve the air quality reduction targets. H. FUTURE OPERATION 39. The traffic system management component is functioning as planned and no further monitoring is needed. GOSL now plans to allocate road maintenance and development funds directly to local authorities thereby improving CMC's ability to maintain the infrastructure improvements created by this component. CUTS has developed comprehensive plans for the Colombo area and undertook feasibility work permitting early implementation of such plans. This has assisted CMC to prepare a program for road rehabilitation, maintenance and capacity expansion and is establishing a pavement management system. IDA is undertaking an urban transport strategy review with GOSL focusing on implementation issues. 40. TSPC have been absorbed by the expanded Planning and Monitoring Division of MOTH as part of GOSL policy to strengthen the planning and monitoring activities of line Ministries. In the short term, the transport planning activities are likely to be reduced and it is uncertain if GOSL will be more proactive in implementation of transport development efforts. 41. The railway TA assisted SLR develop an access policy for private development of rail freight services and in reaching the first access agreement with a private party. Other companies are interested, but further TA may be needed for SLR to meet the operational requirements of significant numbers of rail freight operators. IDA currently has no plans for such assistance, although IFC could assist the private operators.  14 42. A draft bus policy prepared by NDC is being reviewed by GOSL with a view to finalizing a national bus policy after the forth coming national elections. 43. The air quality monitoring stations have been an integral component of the Clean Air 2000 Action Plan. The data collected has provided the basis for air quality analysis for the first time in Sri Lanka. Although, the component suffered due to poor maintenance support from the equipment supplier, a significant amount of air quality data has been gathered. GOSL has committed resources for the operation and maintenance of the equipment, data analysis and modeling required for introducing policies to reverse the trend of deteriorating air quality. This will be supported under the IDA financed Environment Action 1 Project. I. KEY LESSONS LEARNED 44. Ensure that project objectives as given in the project documents are related to what the project can deliver. As a project evolves during identification, preparation and appraisal, it is important that a realistic match is maintained between project components, objectives and indicators. The project design summary table now included in project documentation is a key step in ensuring that this is done. This would also have helped ensure that the project was realistic about what could be achieved with the TA components. 45. Be realistic about results of institutional strengthening. The objective of the TA to assist SLR become an autonomous body was to increase efficiency. Changing a government. department into a supposedly autonomous body would be unlikely to have a noticeable impact on efficiency unless this was accompanied by a deregulation of (a) service provision and tariff setting to enable effective commercial response to competition; and (b) genuine autonomy regarding cost control, use of revenues and access to capital markets. In a country where red tape and political interference is the norm, it is unrealistic to expect sustainable efficiency gains. Thus the transformation of SLR into SLRA by itself would not achieve these gains. 46. Avoid having too many implementing agencies involved with the project. Supervision involved five agencies which weakened the impact of Bank discussions with GOSL on project matters and policy reforms. The project would have been a typical Bank urban transport infrastructure project if CUTP haq consisted of: (i) the Traffic System Management component; and (ii) TA for institutional strengthening for CMC highway department, and for the Colombo Urban Transport Study. In the absence of a coherent bus industry development policy, assistance was not justified for NTC/PC. A stand alone TA project could have been considered for the development and implementation of railway reform measures. The air quality monitoring component should have been included in IDA's environmental assistance projects. 47. Avoid having Project Management Units. Projects are more effective if they are being implemented by an established unit as part of the regular work program of the executing agency. The project can then contribute directly to the institutional strengthening of that agency. 48. Obtain bids for major civil works and goods and proposals for major consultancy studies before Board presentation. The procurement process needs to be well advanced by the time of negotiations, particularly in countries where procurement is a slow process.  15 IMPLEMENTATION COMPLETION REPORT SRI LANKA COLOMBO URBAN TRANSPORT PROJECT CREDIT NO. 2495-CE PART II - STATISTICAL ANNEX  16 TABLE 1: SUMMARY OF ASSESSMENTS A. Achievement of Objectives Substantial Partial Negligible Not applicable Macro Policies O 11 0 / Sector Policies O / O O Financial Objectives O O O I/ Institutional Development Ol E Ol Physical Objectives I/ 11 0 0 Poverty Reduction O O O Gender Issues O O O / Other Social Objectives Cl O Environmental Objectives O I/ O O Public Sector Management E E Ol Private Sector Development O / O E Other (specify) a E E / B. Project Sustainability Likely Unlikely Uncertain C. Bank Performance Satisfactory Satisfactory Deficient Identification E / E Preparation Assistance E / El Appraisal E E V Supervision El / El Highly D. Borrower Performance Satisfactory Satisfactory Deficient Preparation E / E Implementation O / E Covenant Compliance E / E Operation (if applicable) El El E Highly Highly E. Assessment of Outcome Satisfactory Satisfactory Unsatisfactory unsatisfactory E / E E  17 TABLE 2: RELATED BANK LOANS/CREDITS Loan/credit title Purpose Year of Status approval 1. Road The basic aim was to facilitate the transport of goods and June 1979 complete Maintenance passengers and to reduce road transport costs. The project was Project (Credit specifically designed to: (a) arrest the deterioration of the road 900-CE) system by a program of enhanced routine and periodic maintenance, and (b) lay the foundation for improved planning of road maintenance and execution of future works 2. Road The objectives of the project were to: (a) restrain the growth of March 1980 complete Passenger oil imports, (b) provide a more reliable bus service which would Transport Project offer the public a more acceptable alternative to the use of (Credit 994-CE) private car, and (c) decentralize the control of bus operations to financially viable RTBs. 3. Second Roads The objectives of the Second Roads Project were to lower April 1985 complete Project (Loan vehicle operating costs on Sri Lanka's deteriorated road network 2517-CE) through a targeted investrnent program for priority road sections and selected bridges. The loan also envisioned strengthening the institutions concerned with transport infrastructure in the areas of transport planning and coordination and road maintenance. The project's principal components included improving periodic maintenance of the trunk road network and bridges (about 10,400 km and several hundred structures), and the rehabilitation and/or widening of about 570 kilometers of roads and 28 brides. It also provided for workshop and laboratory equipment, training in bitumen emulsion technology, equipment fleet management and technical assistance to strengthen contract management and administration 4. Third Roads The project's objectives were to: (a) reduce road transport cost December complete Project (Cr. 2183- and delays for passengers and goods by restoring major trunk 1998 CE) roads to better operational condition, (b) help restore priority road infrastructure damaged by flooding and landslides in May/June 1989, (c) enhance institutional capabilities to increase the quality and extent of road maintenance and rehabilitation, and (d) upgrade the Road Development Authority's (RDA) capacity to supervise and execute rehabilitation works and to identify actions needed to develop the local road contracting industry.  18 5. Emergency The main objectives of the project were to assist the March 1983 Complete Reconstruction Government of Sri Lanka: (i) to deliver crucial social needs to and refugees returning to the North and East regions of the country, Rehabilitation which had been ravaged by civil war, (ii) to rehabilitate and Project (Credit upgrade basic infrastructure damaged in the conflict, and (iii) to 1883-CE) reestablish economic activities in these areas. Specific objectives of the project included: (i) clearing of mined residential and agricultural areas, (ii) provision of resettlement grants, (iii) assistance for housing construction and for the recovery of economic activities, and (iv) reconstruction of physical infrastructure. 6. Economic The broad objectives of the ERC and the PMEAC were to May 1990 Complete Restructuring support the program agreed between the Government, the Bank, Credit (Credit and the IMF and set forth in the Policy Framework Paper (PFP).' 2128-CE) The ERC emphasized macro-economic stabilization and poverty-reducing growth through structural measures to rationalize government expenditures, alleviate poverty, and develop the private sector. The PMEAC focused on the development of the private sector through measures to deregulate, commercialize, and privatize public manufacturing enterprises.  19 TABLE 3: PROJECT TIMETABLE Steps in Project Cycle Date Planned Date Actual! Latest Estimate _ _ _ _ _ _ _~~~ - ___l Identification (Executive Project Summary) November 1992 Preparation Appraisal January 1993 April 4, 1993 Negotiations March 1993 April 21, 1993 Board Presentation May 1993 May 18, 1993 Signing June 11, 1993 Effectiveness August 18, 1993 Mid-term Review March 19, 1997 Project Completion June 30, 1999 June 30, 1999 Loan Closing October 31, 1999 i L Loan will be closed as soon as two applications are received and the Special Account balance recovered.  TABLE 4: LOAN DISBURSEMENTS: CUMULATIVE ESTIMATED AND ACTUAL (US$ MILLION) FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 Appraisal 0.00 2.40 6.40 13.00 18.90 20.00 20.00 20.00 Estimate Actual 0.00 2.20 3.30 7.74 9.87 12.12 13.64 14.3* Actual as % 0% 92% 52% 60% 52% 61% 68% 71% of Estimate As of December 20, 1999  21 TABLES 5 AND 6: KEY INDICATORS FOR PROJECT IMPLEMENTATION AND OPERATION Key Implementation SAR Estimate Revised Indicators (funded) 1. Upgrading of the 2.3 km 2.3 km Olcott Mawatha corridor 2. Maradana Junction Additional bridge and associated road works Additional bridge and associated road works improvements 3. Technical assistance (a) Columbo Urban transport Study (a) Columbo Urban Transport Study (b) Strengthening of NTC/PC's (b) Strengthening of NTC/PC's (i) Supply of computers and software and (i) Supply of computers and software and training training (ii) Bus route costing study (ii) private bus crew training (iii) Bus regulatory training (iii) Oversees bus regulatory training (c) SLR restructuring (c) SLR restructuring (i) Restructuring study (i) First phase of restructuring study 1994 (ii) Private sector involvement study (ii) Commercial and PSO adviser to SLR 1994- 1999 (iii) Access adviser 1998, (iv) accounting, property management and stores management advisors (v) Commercial training for SLR officials (d) Air Quality Monitoring (i) Procurement of air quality monitoring (d) Air Quality Monitoring equipment (i) Procurement of air quality monitoring (ii) Consultancy services for air pollution equipment management study (Hi) Training for modelling and analysis of data.  22 TABLE 7: STUDIES INCLUDED IN PROJECT Purpose as Defined Status Impact of Study Study at Appraisal/Redefined Provided basis for the Phase 2 of the The study would develop long term transport plans study. It also for the Greater Colombo Metropolitan area. assisted in the During the first phase, the study would undertake preparation of the 1. Colombo Urban travel corridor analysis based an transport surveys, Published in 1995 and 1996 Transport Transport Study evaluate bus and rail modal choice, analyze included numerous Strategy Study as (Phase 1) economic and financial viability of investrnent working papers well as numerous options, and identify institutional reform and policy working policy action plans needed for the long-term papers etc period. prepared for GOSL Workshop concluded with Prepare packages of capital schemes, institutional stakeholder in 2. Colombo Urban strengthening and feasibility studies and to suggest Published in June May 1999. In Transport Study associated policy reforms to assist in improving the 1999 and included 27 conjunction with (Phase 2) urban transport systems. working papers phase d, CMC has prepared an action plan for traffic management schemes. The consultancy package was dropped, 3. Bus Regulatory Train Bus Regulatory staff f in a variety of but training on Assistance regulatory functions including route costing study. computer software Very limited. and oversees bus regulatory study tour was undertaken.  23 SLRA not created and study was dropped after first phase of consultants The long term work in 1994/95. adviser played a Commercial and critical role in Public Service getting SLR to Obligation Adviser think about 4. Railway Assist the newly created Sri Lanka railway worked with SLR for commercial issues. Restructuring Authority with implementation of the railway 1994-1999 assisting Local consultants Study restructuring plan. the General Manager did some good and others on a wide work but period range of commercial was too short to orientation matters. have much impact. Local consultants hired in first half of 1999 for accounting, project and spares management. Study not carried out, GOSL adopted but access policy for policy in 1997 and private freight completed operators developed negotiations with 5. Private Sector during 1996. one company in Involvement in Study areas for potential private involvement. Transport Sector 1999. Further SLR Strategy Study. Short cement companies term access adviser in interested in 1998 for negotiations operating rail with private cement freight service for company. their own product. The objectives were to: (a) identify pollutants that are reaching critical levels; (b) provide design Monitoring parameters for a comprehensive air pollution Study as such not stations were key 6.Air Quality management program, (c) develop the basis for carried out. But some component of Monitoring and establishing a policy framework to support air: training was provided Clean Air 2000 Manaiment quality objectives; (d) develop a program to for use and record Action Plan and Study improve the scientific data base to support the collecting of air provided basis for development of an air quality program and; (e) quality monitoring air quality identify the prerequisites to strengthen the equipment. analysis. institutional capabilities to plan and implement an effective air quality program over the long-term.  24 TABLE 8A, PART 1- PROJECT COSTS IN US $ Appraisal Estimate Actual/Latest Estimate (US $ million) (US $ million) Local Foreign Total Local Foreign Total Item Costs Costs Costs Costs 1. TSM & INFRASTRUCTURE (a) Pettah, Olcott & Fort 3.31 2.10 5.44 1.92 3.86 5.78 (b) Maradana Junction 0.97 3.13 4.10 1.46 2.87 4.33 (c) Implementation Support 0.02 2.89 2.91 0.00 3.82 3.82 (d) TSPC Support Not included in SAR 0.37 0.19 0.56 Sub-Total 4.30 8.12 12.42 3.75 10.74 14.49 2. URBAN TRANSPORT PLAN 0.48 1.12 1.60 j 0.00 1.38 1.38 3. INSTITUTIONAL STRENTHENING (a) National Transport Comm/PC 0.45 0.55 1.00 0.03 0.57 0.60 (b) Rail Restructuring 0.40 2.31 2.71 0.00 0.39 0.39 (c) Air Quality Management 0.09 0.51 0.60 0.13 0.36 0.49 Sub-Total 0.94 3.37 4.31 0.16 1.32 1.48 TOTAL BASE COST 5.72 12.61 18.33 3.91 13.44 17.35 Physical Contingencies 0.50 0.78 1.28 0.00 0.00 0.00 Price Contingencies 1.53 0.91 2.44 0.00 0.00 0.00 Project Preparation Facility 0.20 1.00 1.20 0.13 0.69 0.82 TOTAL PROJECT COST 79 1530 23.5 1 (excluding taxes) . 5.2__________________________ Taxes and Duties 2.03 0.00 2.03 __________________________I TOTAL PROJECT COST 9.98 15.30 228 4.04 14.13 18.17 (including taxes) _ 9.98 15.30 25.28 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.0143 187  25 TABLE 8A, PART 2 - PROJECT IN SL Rs Appraisal Estimate Actual/Latest Estimate (SL Rs million) (SL Rs million) Local Foreign Total Local Foreign Total Item Costs Costs Costs Costs 1. TSM & INFRASTRUCTURE (a) Pettah, Olcott & Fort 144.97 93.14 238.11 122.00 244.97 366.97 (b)MaradanaJunction 42.68 137.72 180.40 93.17 182.44 275.61 (c) Implementation Support 0.88 127.16 128.04 0.00 242.66 242.66 (d) TSPC Support Not included in SAR 23.61 12.30 35.91 Sub-Total 188.53 358.02 546.55 238.78 682.37 921.15 2. URBAN TRANSPORT PLAN 21.12 49.28 70.40 0.00 87.23 87.23 3. INSTITUTIONAL STRENTHENING (a) National Transport Comm/PC 19.80 24.20 44.00 2.40 36.49 38.89 (b) Rail Restructuring 17.60 101.64 119.24 0.00 24.82 24.82 (c) Air Quality Management 3.96 22.44 26.40 8.32 22.91 31.23 Sub-Total 41.36 148.28 189.64 10.72 84.22 94.94 TOTAL BASE COST 251.01 555.58 806.59 249.50 853.82 1103.32 Physical Contingencies 21.80 34.45 56.25 0.00 0.00 0.00 Price Contingencies 67.40 40.29 107.69 0.00 0.00 0.00 Project Preparation Facility 8.80 44.00 52.80 8.80 44.00 52.80 TOTAL PROJECT COST 349.01 674.32 1023.33 (excluding taxes) Taxes and Duties 89.02 0.00 89.02 TOTAL PROJECT COST 438.03 674.32 1112.35 258.30 897.82 1156.12 (including taxes)  26 TABLE 8B: PROJECT FINANCING Appraisal Estimate (US$ million) Actual/Latest Estimate (US$ million) Local Foreign Total Local Foreign Total Source Costs Costs Costs Costs IDA 5.50 14.50 20.00 0.00 14.16 14.16 UNDP 0.20 0.30 0.50 0.00 0.50 0.50 CANADA 0.00 0.50 0.50 0.00 0.00 0.00 GOSL 4.30 0.00 4.30 4.04 0.00 4.04 TOTAL 10.00 15.30 25.30 4.04 14.66 18.70  27 TABLE 9: ECONOMIC COSTS AND BENEFITS Annex B contains the details of the economic re-evaluation. Summary of Evaluation Results (Olcott Mawatha) (SL Rs millions) SAR BR ICR Total cost 325.0 364.4 391.5 Total benefit 2,666.4 1,730.1 2662.6 First year of benefits 1998 1998 1998 Project life (years) 15 10 15 NPV (at 10% discount) 506.8 437.7 499.9 ERR 28.4 % 29.5 % 29.7 % C/B ratio n/a 0.49 0.31 Source: SAR; ICR Annex C; ICR Annex B - Tables B-1, B-2. Summary of Evaluation Results (Maradana Junction) (SL Rs millions) SAR BR ICR Total cost 247.0 237.4 246.4 Total benefit 1,167.6 823.9 1,222.7 First year of benefits 1997 1998 1998 Project life (years) 15 10 15 NPV (at 10% discount) 198.8 133.8 187.4 ERR 23.8 % 24.6 % 22.3 % C/B ratio n/a 0.51 0.45 Source: SAR; ICR Annex C; ICR Annex B - Tables B-3, B-4. Summary of Evaluation Results (Fort Junctions) (SL Rs millions) SAR BR ICR Total cost 58.6 Total benefit 437.5 First year of benefits 1996 Project life (years) 1 5 This sub-component was not undertaken and has not been re-evaluated. NPV (at 10% discount) 111.3 ERR 45.2 % C/B ratio n/a Source: SAR SAR - Staff Appraisal Report (22 April, 1993) BR - Borrower's Report (7 September, 1999) ICR - Implementation Completion Report (December, 1999)  28 TABLE 10: STATUS OF LEGAL COVENANTS Agree Section Covenant Present Original Revised Description of Comments ment type Status fulfillmnent fulfillment Covenant date date Schedule 01 C 09/30/1994 Borrower shall maintain project Fulfilled 4. 01 (b) records ands accounts and submit audited accounts to IDA. Schedule 01 C 09/30/1994 For the withdrawals made from Credit Fulfilled 4 Accounts on the basis of statement of 4. 0 1 (c) expenditures (SOEs), the Borrower shall include all relevant records in the annual audit reports as well as a separate opinion, prepared by independent auditors certifying that SOEs submitted during the fiscal year can be relied upon to support withdrawals. Schedule Ol C 09/30/1993 Borrower shall establish separate Fulfilled 4.2 (a) accounts for activities related to the Project. Schedule 05 C 06/30/1993 Borrower shall appoint heads of Fulfilled 4.2(b) Project Accounts Department. Schedule 09 C 07/31/1994 Borrower shall furnish Project Progress Fulfilled 4.3 (a) Reports. Covenant types: 1. = Accounts/audits 8. = Indigenous people 2. = Financial performance/revenue generation from 9. = Monitoring, review, and reporting beneficiaries 10. = Project implementation not covered by categories 1-9 3. = Flow and utilization of project funds 11. = Sectoral or cross-sectoral budgetary or other resource 4. = Counterpart funding allocation 5. = Management aspects of the project or its executing 12. = Sectoral or cross-sectoral policy/ agency regulatory/institutional action 6. = Environmental covenants 13. = Other 7. = Involuntary resettlement 8. Present Status: C = covenant complied with CD = complied with after delay CP = complied with partially NC = not complied with  29 TABLE 12: BANK RESOURCES: STAFF INPUTS Stage of Planned Revised Actual Project Cycle _ Weeks US$ Weeks US$ Weeks US$ Preparation to Appraisal 2.00 20.70 70.70 Appraisal-Board 2.00 16.90 53.40 Negotiations through Board Approval 6.00 1.80 6.00 Supervision 62.00 114.50 378.40 Completion 8.00 0.80 10.20 TOTAL 80.00 154.70 518.70  30 TABLE 13: BANK RESOURSES: MISSIONS Performance Rating Number Specialized Implemen- Develop- Stage of Month/ of Days in Staff Skills tation ment Types of Project Cycle Year Persons Field Represented Status Objectives Problems Through Appraisal Aug-88 I 10 SE _ May-89 2 13 SE, RS - - Nov-90 3 8 (2) RE, SE - - March-91 4 7 ML, RS, C, ENG - - July-91 4 24 ML, RE, ENG, RCS - - Appraisal through June-92 1 12 SE - - Board Approval Aug-92 Sep-92 1 13 ES - Supervision June-93 3 20 SE, TS, PROC 1 Dec-93 2 15 SE, C Dec-94 2 10 TE, Traff. S S S March-95 2 11 TE, EE S S Mid-TerTn Review March-97 4 12 TE, TEng, ML, ES S S Oct-97 3 10 TE, ML, C S S March-98 2 8 TE, ES S S Oct-98 2 8 TE, TEng S S Completion May-99 2 10 TE, C S S June-99 1 4 TE _ _ Staff Skills: SE = Senior Economist RS = Railway Specialist ENG = Engineer ML = Mission Leader C = Consultant TS = Transport Specialist TE = Transport Economist RCS = Rail Costing Specialist ES = Environmental Specialist Traff S = Traffic Specialist PROC = Procurement Specialist EE = Environment Engineer TEng = Traffic Engineer Performance Rating Key: H = Highly Satisfactory S = Satisfactory U = Unsatisfactory HU = Highly Unsatisfactory M = Managerial E = Environmental  IMPLEMENTATION COMPLETION REPORT SRI LANKA COLOMBO URBAN TRANSPORT PROJECT CREDIT NO. 2495-CE APPENDIXES   SRI LANKA COLOMBO URBAN TRANSPORT PROJECT (CR. 2495-CE) SUPERVISION/COMPLETION REPORT Aide Memoire May 25, 1999 ANNEX A   THE WORLD BANKIFC/M.I.G.A. OFFICE MEMORANDUM FILE COPY DATE: June 2, 1999 TO: Frannie Humplick, Sector Director, SASIN THROUGH: Juan Gaviria, Sr. Transport Economist, SASIN FROM: Stein Lundebye, Sr. Transport Specialist, SASIN EXTENSION: 80148 SUBJECT: SRI LANKA: Colombo Urban Transport Project (Cr. 2495-CE) ICR Preparation and Supervision Mission Back-to-Office Report- May 1999 1. In accordance with Terrns of Reference, dated May 5, 1999, the following supervision team visited Sri Lanka during the period May 17 - 25, 1999, to supervise the ongoing Colombo Urban Transport Project and a launch the Implementation Completion Report process: Mr. Stein Lundebye, Mission Leader/Senior Transport Engineer (SASIN) and Mr. William Denning, Transport Economist/consultant (TWUTD), and Mr. Sumith Pilapitiya, Engineer - Environment & Infrastructure, joined the mission from the Colombo Field Office who carried out supervision of the environmental component of the project. 2. Herewith we submit Form 590, Aide Memoire, draft letter to the Government and the Covenant Compliance Statement for your review and confirmation. Attachments: 1. Form 590 2. Aide Memoire 3. Draft letter to GOSL, confirming the Aide Memoire Recommendations 4. Status of Legal Covenants Compliance Distribution A: Full Report Messrs./Mmes. R. Drysdale, M. Penalver, A. Litvak, A Byrne, J. Williamson (SASVP); R.Zagha (SASPR); R. Ackermann (SASEN); L. Bennett (SASSD); L. Lowenstein (SASPR); R. Bentjerodt, S. Pilapitiya (SACCO); S. Lundebye, J. Tillman, W. Denning (SASIN); Correia da Silva (LEGSA); V. Abraham (LOAAS) SASIN Unit File Distribution B: Cover Memo, Form 590 and Status of Legal Covenants Compliance Messrs. R. Picciotto (DGO)(2); A. Pellegrini (TWUDR)   PROJECT STATUS REPORT SRI LANKA COLOMBO URB TRANSPOR (Project ID 10420 -- Credit No. 24950) Current Version Project Data Project Performa ce Ratings Board Approval: 05/1811993 Summary Ratings: Last Now Resettlement Effectiveness Date: 08/18/1993 Achievement of PDO S S Environment S S Original Closing Date: 06/30/1999 Implementation Progress S S Environmental Plan Form. Rev. Closing Date: Other Ratings: Financial Covenants NR NR No. of Extensions: 0 Counterpart Funds S S Other Legal Covenants S S PSR Date: 06/02/1999 Project Management S S WID Impact NR NR Latest Site Visit Date: 05/2511999 Procurement S S Monitoring & Ev luation S S MTR Date: 03/01/1997 Project Component Ratings Cost Last Now MTR Scheduled For: TSM AND INFRASTRUCTURE 12.4 S S Restructuring Date.: 03/19/1997 URBAN TRANSPORT PLAN 1.6 S S Original Ln./Cr. Amt: 14.40SDRM NTC/PC 1.0 S S Revised Ln./Cr. Amt: RAILWAY RESTRUCTURING 2.7 U S Total Project Costs: 25.30USSM AIR QUALITY MANAGEMENT 0.6 S S NVotes: HS=High1j Satisfactory: S=Satisfactory; U=Unsatisfactory. HU=Highly Unsatisfactory NANotApplicabhe NR=Not Razed Cost in USSM Risk Ratings Last I Now Last Now Summary Risk Rating M M Macroeconomic policies/conditions Generic Assunptions: Sector policies/conditions M M World market conditionstprices Private sector response M M Local/National market conditions/prices Community/NGO support Climatic/Environmental conditions Government Administrative capacity Political/Security conditions M M Counterpart funding Project-Specific Assumptions NO OBSTRUCTIONS TO PEDESTRIANS NA NA SRI LANKA RAILWAYS WILLINGNESS TO S S DURING TRAFFIC OPERATIONS IMPLEMENT ACCESS POLICY RAILWAY TRADE UNIONS COOPERATE NA NA FARE INCREASES IN BUS SERVICES S S PROPORTIONAL TO COSTS Notes: H=High; S=Substantia/: M=Modest: N=Low or ANeglible: NA=Not Applicable; NR=A'ot Rated Cumulative Disbursements Cumulative Disbursements: 9.31SDRM ___________________________________________ Original Disbursement Lag(%): 35.1 c 16 Original Disbursement Lag(months): 35 =-E - u Expected Disbursements for FY99: " O 5 => ~ ~ 4th Quarter: 0.OSDRM :z m ~_,zm e-- 7: Expected Disbursements for FY00: - 1 S S F - - x x - Ist Quarter: 0.OSDRM 2nd Quarter: 0.OSDRM 3rd Quarter: 0.OSDRM Planned - - - - - Actual to-date F.Revised Project Development Objective (PDO) 1. (a) Remove transport bottlenecks and traffic congestion in Central Colombo that impose high costs on commercial and industrial establishments; (b) develop long-term transport plans for the Greater Colombo Metropolitan Area and strengthen institutions concerned with urban transport; (c) strengthen the managerial capabilities of the National Transport Commission (NTC) and Provincial Councils (PCs); (d) increase the efficiency of the Sri Lanka Railways (SLR); and (e) promote adequate air quality standards and emission control measures. Key indicators: Retrofitted indicators were developed and agreed upon with the Borrower in December 1996 andfinalized in March 199Z Indicators of development outcome/impact include: 06/02/99 1  (J) Bus services operate in a safe and efficient manner as measured by: - reduction in number of accidents involving buses by 15% after project implementation - operating losses ofpeoplized bus companies reduced by 25% after project implementation (2) Levels of vehicle emissions reduced to meet Clean Air 2000 standards (3) Railway restructuring done as measured by adoption and implementation of Open Access Policy Frameworkfor the SLR PDO Rating Explanation The physical civil works components have been completed, and they have had noticeable impact on reducing congestion in a key part of the city. The only outstanding physical civil works is the completion of the office building, restrooms facilities and the installation of the bus shelters on Bastian Mawatha. These works have been added to the original contract due to cost savings. The other components, being TA, are having less direct impact, particularly since GOSL policy on railway and buses has changed since the project was approved in 1993. The TA components are, however; contributing to a dialogue on urban transport with in GOSL and civil society. The air quality monitoring is establishing some institutional strengthening to this area. Current Project Status All the civil works agreed at the project appraisal have been completed. Only the completion of the office building, provision of restrooms facilities and the construction of the bus shelters is outstanding but these works will be completed before the closing of the credit (i.e. June 30, 1999). This latter works have been added to the project due to the cost savings. The institutional strengthening of the National Transport Commission (NTC) and Sri Lanka Railways (SLR) have progressed at a slow pace. Intemal management reforms are now being carried out by SLR to improve operating efficiencies. The SLR has been encouraged to adopt a commercial orientation to enhance its competitiveness, especially in freight traffic. The Strategic Business Unit (SBU) has been established and SLR has also now introduced the Open Access Policy and signed and agreement with a private cement company. The project assistance to NTC has contributed to some strengthening of their managerial capabilities but limited progress has been made to develop a strong bus industry in Sri Lanka. The consultants for the Colombo Urban Transport Study - Phase 11 (CUTP-I1) have in a short time prepared many technical working papers on proposed physical road infrastructure improvements, traffic management proposals, parking strategy and policy, bus sector operations, railway operations and institutional arrangements. CEA Board has made a decision to contract a suitable extemal agency to undertake ambient air quality monitoring on behalf of the CEA and submit analyzed data to assist the CEA in its regulatory functions. But it appears that data collection has been on ad-hoc basis, therefore; the usefulness of data collection without adequate analysis is a serious concern. Although there has been a significant amount of data collected during the program, it appears that only trend analysis has been undertaken. Since financial support for the air quality monitoring program from the Colombo Urban Transport Project will end in June 30, 199 due to Credit closure, the CEA was informed that there is a possibility of financing future activities under the IDA financed Environment Action I Project (EAIP). Summary of Key Issues and Actions Date Status Entered Issue: 06/02/1999 P Action:CEA & NBRO to obtain quotes for consumables for the air quality monitoring equipment by June 30, 1999. By Whom:CEA By When:0613011999 Issue: 06/02/1999 P Action:OMC 20: The implementation of the works with the installation fo the bus shelters should be completed by the closing date of the credit. By Whom:NTC By When:06130/99 / v /f - 5Notes: N-New; P=Pending Prepared By: ITeam Leader: I LUNDEBYE 06/02/99 2  Manager's Comments JUAN GAVIRIA FRANNIE HUMPLICK Sr Transport. Spec. Sector Director 06/02/99 3   SRI LANKA COLOMBO URBAN TRANSPORT PROJECT (CR 2495-CE) ICR Preparation and Supervision Mission - May 1999 Draft Aide Memoire I. Introduction 1. An IDA Supervision mission comprising Mr. Stein Lundebye, Mission Leader/Senior Transport Engineer (SASIN) and Mr. William Denning, Transport Economist/consultant (TWUTD) visited Sri Lanka from May 17-25, 1999 to supervise the ongoing Colombo Urban Transport Project and a launch the Implementation Completion Report process. Mr. Sumith Pilapitiya, Engineer - Environment & Infrastructure, joined the mission from the Colombo Field Office who carried out supervision of the environmental component of the project. 2. The mission wishes to thank the officials of the Ministry of Transport and Highways (MOTH), the Transport Studies and Planning Center (TSPC), the Sri Lanka Railways (SLR), the National Transport Commission (NTC), the Colombo Municipal Council (CMC), the Central Environmental Authority (CEA), the National Building Research Organization (NBRO), and the office of the Inspector General of the Police (IGP) for the courtesies and co-operation extended to the mission. 3. The following annexes are attached to this aide-memoire: Annex 1: List of persons met; Annex 2: List of CUTS-II Working Papers; Annex 3: Agenda for CUTS-II Workshop; Annex 4: Inaugural Address by H.E. Minister of Transport and Highways; Annex 5: Presentation on Traffic Management Council; Annex 6: Open Access Agreement; Annex 7: Final Project Account 1998 4. This aide-memoire records the understandings and agreements reached among the following concerned agencies of the Government of Sri Lanka (GOSL): TSPC, SLR, NTC, CMC, CEA, NBRO, and the mission. 5. The mission's findings and recommendations are subject to confirmation by IDA management. 1  II. Progress on Civil Works and Equipment 6. The physical works which consist mainly of localized road improvements are progressing well with one exception, Ten contracts have been completed and the only outstanding major contract is for the construction of bus shelters and facilities to be provided at the Bastian Mawatha bus station (contract OMC20). The Air Quality Monitoring Component of the project has been making some progress. The major delays continue to be in the implementation of the institutional strengthening components of the project concerning the National Transport Comrnission (NTC) and the Sri Lanka Railways (SLR). Phiysical Works 7. The overall progress of the civil works components has been satisfactory. All the original civil works contracts under the project have been completed: ( i.e., OMC 1, OMC 2, OMC 3, OMC 4, OMC 5, OMC 6, OMC 7 and OMC 12). The only civil works, which have not been completed, are the following works related to the Bastian Mawatha bus station (OMC 20): manager's office block, police post, toilet blocks and bus shelters. These works were additional works added to the project since there were some cost savings from the original project. The mission was informed that the construction work would be completed by the end of June 1999. If the works is not completed before the closing of the credit, any expenditures after that date have to be covered by the Governnent. The CMC has completed all works related to the street lighting and road markings. 8. The installation of the central reservation fences along the Olcott Mawatha road outside the Fort station has been completed and this has had a positive effect to channel pedestrians on to the new footbridge. This ensures that the road safety objectives are addressed. However, it was found that some of the panels were already broken and that the median barrier should be extended (about 100 meters) towards Lotus Road in order for the fence to be really effective near the bus laybys on the Northside of Olcott Mawatha near the new footbridge. The mission pointed out that it was very important that this work is completed in order to direct the pedestrians in a safe manner. Sample surveys carried out by TSPC shows that about 85% of the pedestrians are now using the footbridge to cross the street. This situation has improved the traffic flow on Olcott Mawatha. Supervision of Works 9. The project consultants (W.S.Atkins Intemational Ltd) with the help of staff from their local consultant partner are carrying out the supervision of the outstanding works for the Bastian Mawatha bus station (Contract OMC20). This latter supervision work is carried for the NTC and the Westem Province Road Passenger Authority. It has been agreed earlier that a representative of the project consultants (WSA) will carry out the 2  final inspection and certification, including the release of the retention money for the ICB contracts under the project. III. Transport Policy, Planning and Institutional Strengthening Components A. Transport Policy and Planning The Colombo Urban Transport Study - Phase II (CUTS-II) 10. As part of the on-going project, the Government has embarked on a major study - Colombo Urban Transport Study Phase -II (CUTS-II). The main objectives of the study are to prepare the basis for development of an integrated multi-modal urban transport system that would make the most effective use of the current system components through a combination of: (i) immediate and short term initiatives to remove capacity bottlenecks, and (ii) medium and long term strategies and measures to meet transport needs arising from urban growth in Colombo. 11. The CUTS-II Study is well advanced. A team of international consultants (M/s W.S. Atkins) and the University of Moratuwa is undertaking its implementation. The consultants team have been very active since the start of the study, and consistent with the Inception Report prepared in January 1999, a large number of technical working papers, covering the sectors and issues agreed in the Inception Report, have been prepared. (see Annex 2 for a list of the working papers). The full scope of the work covers the following activities: (i) Inception Report, (ii) documentation on policy, regulation and institutional actions; (iii) feasibility studies for priority infrastructure projects; (iv) traffic management and safety improvement programs and schemes; and (v) development of an Action Plan, covering the above issues. The mission was informed that the members of the Steering Committee and the working groups established for this study, have provided useful comments and inputs to the CUTS-II reports, prepared by the consultants. It is expected that the Draft Final Report by the consultants will be completed before June 30, 1999. The Government and IDA will thereafter undertake a review of the report and expect the consultants to incorporate the comments and finalize the report on or before August 1999. 12. The MOTH with the support of the CUTS-II consultants arranged a Workshop on the "Institutional Aspects of Traffic Management" on May 21, 1999. The mission participated in this workshop together with high level Government officials from concerned agencies (e.g., MOTH, CMC, RDA, CMT, IGP, SLR, NTC, UDA, NDC, CTB, WP and various Municipal Commissioners from the Greater Colombo Metropolitan Area). H.E. the Minister of Transport and Highways presented the Inaugural Address, and a copy of his presentation can-be found in Annex 3. The main objective of the workshop was to discuss the future organization for traffic management in Sri Lanka. 3  The workshop explored the interfaces between institutional stakeholders in traffic management, the possible formulation of a co-ordination body to develop a traffic management policy. Furthermore, there were discussions on appropriate methods of implementation of the policy at local level, and the need for institutional change and strengthening of local stakeholders. (see Annex 4 for a copy of the Workshop Agenda and Annex 5 for a copy of the main presentation by the CUTS-II consultant team). 13. Since the last mission, the TSPC has prepared a Concept Paper on urban transport infrastructure which gives an outline of a possible future project for the Government of Sri Lanka to develop and implement major transport sector improvements together with key reforms. The proposed project would help to fund infrastructure rehabilitation, improvements to selected expansions, to improve the metropolitan transport system, support comprehensive transport planning and reforms in order to assure sustainability of the system. The mission was informed that the recommendations from the Concept Paper have been included in the 6-year Development Plan prepared by GOSL. TSPC is also preparing a White Paper on the transport sector and the draft is expected by July 1999. IDA expects that this paper should address some of the key issues and recommendations presented in the Transport Sector Strategy paper, prepared jointly by the Government and IDA in 1996. Urban Transport Strategy Note 14. During the mission a Workshop was held to discuss with key stakeholders issues related to the institutional organization of the urban transport and traffic management in Colombo. The discussions included the possible establishment of a high-level Traffic Management Council (represented by Secretaries of Government), with a Technical Unit, and a Traffic management Secretariat in MOTH in charge of coordinating implementation. 15. It has become apparent that the follow-up to the CUTS-II will require a concerted urban transport, which involves key stakeholders (private and public) and sets priorities and directives on how to address the urban transport challenges in the city. The aforementioned Urban Transport Strategy could be prepared on the basis of the substantial body of knowledge, which results from the implementation of CUTP and the good progress and work in progress by the Consultants in charge of the CUTS-II Study. Along these lines the mission agreed with the Government that the Bank will lead an effort to prepare an Urban Strategy Note with a draft planned to be completed on or before December 1999. The Bank team in charge will consist of Mr. Slobodan Mitric, Principal Transport Specialist, and Mr. Stein Lundebye, mission leader. 16. The mission and the Government agreed that Mr. Mitric will visit Colombo on or about June 15, 1999 to discuss with the Consultant team the various Working Papers with a view to provide feedback for the draft Final Report and start the preparation of the Urban Transport Strategy Note. 4  TSPC Transport Sector Data Bank 17. The TSPC have acquired fixed assets consisting of computers, computer accessories, photocopying machines, fax machines, traffic counting equipment and other related items under the project. Furthermore, under the CUTP project, furniture and vehicles were purchased to strengthen the UNDP project and planning capabilities of the TSPC/MOTH and also to assist the concerned line agencies. The Bank is of the view that the transport planning work has to be continued with the resources acquired under the project in order to undertake donor funded transport project activities in addition to the regular transport data bank and planning work. The mission requested MOTH to submit a plan to IDA regarding the future plan for the TSPC before June 30, 1999. B. National Transport Commission (NTC) and Provincial Councils (PC) Specialized Trainingfor Bus Crews 18. The mission was informed that NTC has already organized training and carried out a program for existing private sector bus drivers and conductors in all provinces. Up to April 30, 1999, a total of about 18,000 persons have been trained out of a total planned program for 20,000 persons covering all private sector crews. The Bank has requested an independent evaluation to be carried out of the effectiveness of the training program. It is expected that the evaluation report will be available after May 31, 1999. The mission requested that a copy of the evaluation report should be forwarded to the Bank for review and comments by June 15, 1999. Monitoring of Bus Services 19. NTC reported that all Provincial Councils had now been supplied with Personal Computers for public transport purposes under the project and that monitoring software, developed by the University of Colombo, had been installed in all these computers. Staff at the Provincial Councils has now been trained to use the software. This software also includes provision for recording road accidents involving bus drivers. Software for route monitoring and rotated timetables for each operator have been prepared and tested on NTC permits. The mission requested that a copy of this software should be sent to the Bank by June 30, 1999. Staff Training 20. The first group of personnel involved in NTC and PC bus regulation was sent to the UK in October 1998 for training in regulatory practices relating to bus services and crew training practices. The Bank has received the report on this study tour, and one of the conclusions from the group was that Sri Lanka should consider to adopt some of the relevant practices of the British Transport Authorities with the necessary modifications in order for them to be applicable here. It was also further reported by NTC that a follow-up 5  seminar was arranged in Feb. 1999. A proposal for a second group to be sent to U.K. has been received, and the Bank reviewed the Government's proposal. The mission did not agree with the revised list of candidates for training considering the Credit closing done of June 30, 1999 and the fact that most candidates are retired staff on contract extension. The mission consider that the personnel sent on a study tour/training assignment should remain in service for several years after completion of such training, and should be required to share the experience, knowledge and skills obtained from the tour to their colleagues in the bus transport sector. It was also earlier agreed between the Bank and GOSL that the second batch of officers to be sent for overseas training should be Provincial Council officials who are in active service.. Bus Stations 21. The supervision consultants informed the mission, that there were implementation problems with the contractor (Elemech Engineers (Pvt.) Ltd.). All shelters are almost completed but very little progress was achieved with works on the buildings during the month of April 1999. There are some concerns that the contractor will not be able to complete the contract before the closing of the credit, i.e., June 30, 1999. The mission is recommending that GOSL emphasize to the contractor the importance of completing the works on time otherwise the Government would have provide funding from own resources to finalize the works. 22. The NTC requested IDA during the previous supervision mission for some financial assistance to rehabilitate part of the People's Park bus station in Colombo. However, due to the short period left until closing of the credit, it was not possible to complete all the required procurement arrangements and therefore the proposed additional works was not possible. Repair of Bus Bays 23. NTC informed the mission that the bus bays, which had been proposed for rehabilitation were mainly located outside the CMC area, and therefore this work was not undertaken due to the fact that there was not sufficient time available to carry out new surveys, preparing designs and bid documentation, and carry out the physical works before the closing of the credit. C. Sri Lanka Railways (SLR) 24. The mission met with senior SLR officials to discuss the progress in implementing the access policy for development of freight operations by the private sector and the progress of other technical assistance to SLR under the project. 25. A draft access policy for private sector freight operations on SLR tracks has been prepared by the Strategic Business Unit (SBU) and has been circulated for observations 6  and comments. Subject to those observations a final version of the policy will be sent to Cabinet for approval. The Cabinet has already approved (October 1997) the concept of open access. 26. Concurrent to the development of the open access policy, SLR has continued negotiations with Puttalam Cement on their proposed access and own freight operation. The operation uses approximately 39 km of track, about 10 km of which were Puttalam Cement spur tracks and about 6 km on which SLR will continue to run passenger service. The terms and conditions for a formal agreement have largely been settled. Agreement was assisted by the help of an intemational expert (Mr. Anson Jack of Railtrack in the UK) who was brought to Sri Lanka through project funding in November 1998. These terms and conditions have now been implemented in an interim agreement, which allows the private operation to begin while resolving the remaining outstanding issues. The outstanding issues cover areas where SLR needs to prepare standards or specifications. These include track maintenance standards, train crew qualifications, and safety rules. During this interim period SLR will provide train crews, maintain train tracks and maintain rolling stocks under separate contract to Puttalam Cement. 27. Under the interim agreement private operations commenced at the beginning of May 1999. With much of the existing track work continuing to be done by SLR crews there has been little or no effect on SLR staff levels to date. After full private operation begins it is expected that displaced SLR staff will take up existing vacant positions within 50 to 100 km of their current work location. 28. The progress of the other CUTP assistance to SLR has been as follows: (i) Local consultants for accounting systems, property development, and materials management have now been appointed. (ii) It has not been possible to hire an international specialist in computer MIS. The tasks which had been expected of such a person, (a) staff training, (b) develop an Operating Information System (OIS), and (c) develop a revenue accounting system, will now not take place under the project. Specifications for an OIS were prepared by the PSO advisor and have been accepted by SLR, but have not been put into effect. National Institute of Business Management using SLR funds will do training. (iii) The proposed feasibility study on a public/private partnership for improvement of the Colombo-Veyangoda suburban services (including possible electrification) was approved by the Ministry of Transport and Highways (MOTH) only after considerable delay. There is not enough time remaining in the project to allow this study to be completed by the end of June and so it has been dropped. (iv) IDA has received papers produced by GOSL/SLR officials who attended management training activities in August and September 1998. 7  29. The mission learned that the PSO advisor will be staying on with SLR until June 30, 1999. 30. The mission was informed that SLR has prepared a draft Cabinet paper on "Functional Reorganization of SLR and Establishment of a Railway Management Council". This paper is currently being circulated for discussion in MOTH. A second cabinet paper has been drafted to establish a Railway Property Management Company as an entirely owned subsidiary of SLR, to identify and commercially develop railway lands. 31. The mission also learned that joint commercial development of several station sites is under consideration. One site could involve a combined bus and train station. Substantial improvements in accounts payable have been made by using local banks to pay salaries at major pay locations. Banks are now collecting revenue at Fort and Maradana stations and discussions are under way to involve banks in revenue collection at other locations. D. Air Quality Monitoring Component 32. The mission reviewed the status of the air quality-monitoring program and noted that the two fixed stations were in operation. However, the issue of poor support services for the equipment continues to plague the program. NBRO is handicapped by the lack of a local agent with technical capabilities to service and maintain the equipment. Any technical support provided, is through the equipment supplier in Australia and is not done in a timely manner. In order to minimize the downtime of the equipment, the Credit supported training of six technical staff members--three each from CEA and NBRO--by the supplier in Australia, on basic troubleshooting, operation and maintenance of the equipment. This has resulted in improved performance, although a few problems still exist. 33. The mission noted that the ozone analyzer in the Fort Railway Station site is not functioning due to calibration problems. The carbon dioxide, sulfur dioxide and ozone analyzers, as well the wind direction sensor at the baseline data-gathering site at the Meteorology Department is not functional. As the warranty period for the equipment expired in December 1998, the IDA supervision mission in October 1998 had agreed with GOSL that a service agreement for operation and maintenance of the equipment would be in place by December 31, 1998. The mission had also reached agreement with GOSL that CEA and NBRO jointly finalize quotes, for procurement under local shopping, of consumables that needed for the air quality-monitoring program for 1999, and informn IDA by December 31, 1998. The mission noted that neither of the above have been done, which calls into question the commitment both NBRO and CEA have for the air quality monitoring program. 8  34. NBRO has commenced a program of monitoring air quality in secondary cities-- with the mobile unit--to establish baseline data during the Northeast and Southwest monsoons. The cities identified in this phase of the program are Hambantota, Anuradapura, Nuwara Eliya, Kandy, Puttalam and Ambawela. The program at Hambantota has been completed and the Anuradapura monitoring program is on-going. At IDA's recommendation, a short course on air pollution modeling--supported by the Credit--was conducted for staff of NBRO and CEA by Prof. Michael Allen, from the University of Auckland, New Zealand, while on sabbatical leave at the University of Peradeniya. This was supplemented by additional training in the use of statistical computer packages as well. 35. The mission expressed its serious concerns with regard to the usefulness of ad-hoc data collection without adequate analysis. Although there has been a significant amount of data collected during the program, it appears that only trend analysis has been undertaken. The data collected in 1997 has shown that ambient levels for S02 has already reached the maximum permissible limit and ozone has exceeded the set limit. While this information is useful, the mission noted that no actions or recommendations for actions to reverse the trend of deterioration in air quality in the metropolitan area have been attempted. This leads the mission to question the overall achievement and sustainability of objectives of the air quality-monitoring program. 36. The mission was informed that the CEA Board had reversed an earlier decision to take over the operations of the air quality monitoring equipment at the end of 1999. The mission is pleased to note that the CEA Board decision is to contract out to a suitable extemal agency to undertake ambient air quality monitoring on behalf of the CEA, and submit analyzed data to assist the CEA in its regulatory functions. Since financial support for the air quality monitoring program from the Colombo Urban Transport Project will end on June 30, 1999 due to Credit closure, the mission informed the CEA that there is a possibility of financing future activities under the IDA financed Environrnent Action I Project (EA1P). However, the mission informed the CEA that EA1P financing will be available only for a focused, outcome oriented program of air quality monitoring, with GOSL commitment to undertake policies to reverse the trend of deteriorating air quality. The mission requested CEA to submit a proposal that would address the above issues, for IDA consideration, by June 15, 1999. IV. Financial Status of the Project Disbursement and Financial Management 37. Project disbursement to date total SDR 9.3 mill. amounting to 65 % of the IDA credit. The TSPC expects that the final account will show that about 25 % of the credit funds will not be used. The mission reviewed the accounting and internal control systems of the project and found it satisfactory. The-audit report for 1998 will soon be submitted to IDA. The report will show that there are no indications of any serious accountability 9  issues. A copy of the 1998 expenditure statement for the IDA contribution, the Govermnent of Sri Lanka contribution and the overall summary of expenditures can be found in Annex 7. V. Learning and Innovation 38. During the CUTS-II workshop on May 21, 1999 (ref. to para. 12), the participants discussed immediate and short-term measures that can help the City of Colombo to relieve the traffic congestion and improve the road safety situation. The participants endorsed the need to have a concerted effort for the following actions: (i) developing a focal point for urban transport management reform ( i.e., setting up a Traffic Management Couancil); (ii) the need to implement some low-cost traffic engineering demonstration projects which can assist in removal of infrastructure "bottlenecks" on priority corridors and to provide improvements in traffic management and road safety. 39. Without creating any expectations, the mission discussed briefly the characteristics of a new lending product, which the World Bank offers called the Learning and Innovation Loan (LIL). In this context, a LIL project could be one mechanism to assist the Government to carry out these activities, if these recommendations are prioritized in the proposed urban transport strategy. VI. Implementation Completion Report (ICR) Preparation of Implementation Completion Report (ICR) 40. The purpose and content of ICR reporting was discussed with TSPC. TSPC was provided with fuither ICR documentation includinig (i) a sample of a recently completed ICR (Punjab Urban Project), and (ii) excerpts from the SAR on the economic evaluation. This is in additioni to ICR documentation and examples provided in earlier missions. The mission reviewed and commented on material made available by TSPC including a very preliminary draft of the Borrower's Contribution to the ICR. 41. The purpose and content of ICR reporting was also discussed with implementing agencies to be sw-e they were aware of this part of the project process. Opinions on their experiences under the project were solicited Borrowers Contribution to ICR 42. The mission reminded TSPC that in accordance with the "General Conditions Applicable to Development Credit Agreements", the Borrower is required to prepare its own evaluation report on the project and submit this to the Bank by August 31, 1999. The evaluation report/summary, which is attached unedited to the ICR, should include: 10  (I) an assessment of the project objectives, design, implementation and operation experience; (ii) a re-evaluation of the economic rate of return (ERR) for each project component and an aggregated ERR for the overall project to compare with the calculated in the SAR, (iii) an evaluation of Borrower's own performance during the evolution and implementation of the project, with special emphasis on lessons learned that may be relevant in the future; and (iv) the evaluation of the performance of the Bank and any co-financiers during the evolution and implementation of the project, including effectiveness of the relationship among the Borrower, the Bank and co-financiers, with special emphasis on lessons learned, (v) project sustainability as measured by an Operation Plan for each project component which has on-going activities. 43. Specific items, which are required, include: (i) updating of the key indicators of project implementation and project operation, (ii) total project costs for local currency and foreign currency costs. 44. The mission discussed with TSPC the preparation of the ICR for the project and handed over copies of IDA policies and guidelines for the preparation of the ICR. The mission informed TSPC that they would forward some more examples of completed ICR reports for the transport sector. The compilation of relevant data should now begin and analysis should be carried out for the various project components. VII. Next Steps 45. The mission agreed with GOSL officials that the following steps should be undertaken. Physical Works/Equipment (i) Contact OMC 20: The implementation of the ongoing civil works, e.g., administration building, toilet facilities, police post and installation of the bus shelters at the Bastian Mawatha bus station should be completed by June 30, 1999; Transport Policy and Planning (ii) Government and IDA to provide comments on CUTS-II Technical Working Papers before June 15, 1999, and comments on Draft Final Report by July 30 1999; (iii) The CUTS-II consultants to complete Draft Final Report by June 30, 1999 and Final report by August 30, 1999; (iv) TSPC to complete Draft White Paper on Transport before July 30, 1999; (v) IDA to prepare Urban Transport Strategy Note by December 31, 1999; 11  (vi) MOTH to submit a report to IDA on the future plan for the TSPC by June 30, 1999. Institutional Issues - NTC (vii) NTC to submit to IDA a copy of the evaluation report of the bus driver training program by June 15, 1999. Institutional Issues - Environment (viii) CEA. to submit to IDA by June 15, 1999, a proposal for contracting out the AQM program. SL/CUTP A:\amO599.doc 05/19/99 10:40 AM 12  11/06 '99 10:12 FkS 94 1 440357 WORLD BANK LA\KA - SASIN T Qo1 The World Bank CoIwrbo 0aw Taoni.: 432M84aW74417I ONrEPXATIONALA K FOR RECONSTIUCflON AND DEVELOPMET a Po D.wF.0. FC Fax: z03v WTERNATIONAL DEVELOPMSHTASSOCIATION 73i5, GAM Roa. CaeleMcknm: NTDAFIAD COLOiMo CoD 3. Malang Addtes: P. O. BOX 1781 oc~ avL< V- .uA W&A C(olato 3. Sri Ln A s--v-=- ., f P PI .. - -. cli:. -- _ -____ iJune 9, 1999 Mr Dixon Nilawera- Secmt.asy Poti4t' Fax Note 7671 0511 161 iI of o Ministry of Finance and Planning r 9 F _____ The Secretariat cc PL C1Co. V% - C Colombo I 1 -ax W Fax _ Dear Mr. Nflaweera Sri Lanka: Colombo Urban Transport Project (Cr.2495 - CE) Supervision Mission I would like to thank you for the courtesies and cooperation extended by all concemed officials to the IDA's last mission. which visited Sri Lanka from May 17-25, 1999 to supervise the above project and to discuss the draft Implementation Completion Report (ICR) for the project. We particularly thank you and your colleagues at the Ministry and officials and the key stake holders who participated in a workshop held on May 21. 1999 and discussed the main findings of the Colombo Urban Transport Study - Phase II and in particular, the instiutional aspects of tafflc management in Sri Lanka. The mission has reported to IDA on its findings which are based on its aide memoire dated May 24, 1999. I am glad to endorse the various suggestions and recom.mendations contained in the aide memoire. I am pleased to note that GOSL have discussed future directions, dialogue and areas for IDA assistance in urban transport sector in Sri Lanka. With best regards, 5 Sincerely yours, Mariana Todorova Country Director CC: Mr G Hewagama, Secretary, Ministry of Transport and Highways _ T Mr. Faiz Mobideen, Director Gencral, External Resources Departnent m Mr. M. Jayasinghe, Chairman, Road Development Authority : CD 0 S Headquanter: WUNington. O. C.. U. S. A.  Legal Covenant Report: Status of Covenanit Compli:nce - Full llistory Page: I Division: SASIN - Infrastructure Sector Unit Program: PCLCR2 Sorted by: Project ID Run Dome: 06/02/99 at I 0 I Z 119 Product Line: Lending (PE,SF) Project ID: LK-PE-10420 - COLOMBO URB TRANSPOR Original Entry/ Revised CoveOanet Fulfill Form 590 Fulfill Cl-es(s) Date Date Data Status Description of Covenant Coments Agreement:DCA CNuenaer: IDA -24950 Covenant: 4.01 (b) 01 09/30/1994 Borrower shall maintain project records and accounts and submit audited accounts to IDA. 112 12995 11/30/1994 C Financial Statements FY93 (coincides with CY in Sri Lanka) Audit Report was submitted in November 04/1l.1995 11/30/1994 C i nancial Statements FY93 (coincides with CY in Sri Lanka) Audit Report was submitted in November 1994 03/27/1997 11/30/1994 C FAnancial Statements FY93 (coincides with CY In Sri Lanka) Audit Report was submitted in November 1994. 12/19/1997 11/30/1994 C Audit reports for FY1996 were received on July 23, 1997. 05/05/1998 11/30/1994 C Audit reports for FY1996 were received on July 23, 1997. Covenant: 4.01 (c) 01 09/30/1994 For withdrawals made from Credit Account on the hasis of statement of expenditures (SOEs), the Borrower shall includo all relevanit records In theannual audit reports as well as a separate opinion, prepared by independent auditors certify-ing that SOEs submitted during the fiscal year canbe relied upon to support withdrawals. 12/28/1994 11/30/1994 C Complied with in November 1994. 04/11/1995 11/30/1994 C Complied with in November 1994. 03/27/1997 11/30/1994 C Complied with in November 1994. Status: C - Complied with CD - Compliance after Delay NC - Not Complied with SOON - Compliance Expected in Reasonably Short Time CP - Complied with Partially NYD - Not Yet Due  Legal Covenant Report: Status of Covenant Compliance - Full hlistory Page: 2 Division: SASIN - Infrastructure Sector Unit Program: PCLCR2 Sorted by: Project ID Run Date: 06/02/99 at 7.17.19 Product Line: Lending (PE,SF) Project ID: LK-PE-10420 - COLOMBO URB TRANSPOR Original Entry/ Revised Covenant Fulfill Form 590 Fulfill Class t-) Date Dote Date Status Description of Covenant Comments 01 09/30/1994 12/19/1997 11/30/1994 C Complied with in November 1994. 05/05/1998 11/30/1994 C Complied with in November 1994. Covenant: Sch. 4, 2 (a) 01 09/30/1993 Borrower shall establish separate accounts for activities related to the Project. 12/28/1994 C The accounts were opened in September 1993. 04/11/1995 C The accounts were opened in September 1993. 03/27/1997 C The accounts were opened in September 1993. 12/19/1997 C The accounts were opened in September 1993. 05/05/1998 C The accouints were opened in September 1993. Covenant: Sch. 4, 2 (h) 05 06/30/1993 rnorrowot shall appoint heads of Project Accounts Dlepartment. 12/28/1994 C Complied with on June 18, 1993. 04/11/1995 C Complied with on Juine 18, .1993. 03/27/1997 c Complied with on June 18, 1993. 12/19/1997 C Complied with on June 18, 1993. 05/05/1998 C Complied with on June 18, 1993. Status: C - Complied with CD - Compliance after Delay NC - Not Complied with SOON - Compliance Expected io Reasonably Short Time CP - Complied with Partially NYD - Not Yet Due  Legal Covenant Report: Status of Covenant Compliance - Full hlistory Page: 3 Division: SASIN - Ilfrastructure Sector Unit Program: PCLCR2 Sorted by: Project ID Run Date: 06/02/99 at 17.17.19 Product Line: Lending (PE,SF) Project ID: LK-PE-10420 - COLOMBO URB 1RANSPOR Original Entry/ Revised Covenant Fulfill Form 590 Fulfill Class ($) Date Date Date Status Description of Covenant Com,ents Covenant: Sch. 4, 3 (a) 09 07/31/1994 Borrower shall furrnish Project Proqress Reports. 12/21/1994 12/31/1994 C Last Progress Report dated December 1994 was received by IDA on 02/01/95. 04/11/1995 12/31/1994 C Last Progress Report dated December 1994 was received by IDA on 02/01/95. 03/21/i997 12/31/1994 C Last Progress Report dated December 1994 was received by IDA on 02/01/95. 12/19/1997 12/31/1994 C Last Progress Report dated December 1994 was received by IDA on 02/01/95. 05/05/1998 12/31/1994 C Last Progress Report dated December 1994 was received by IDA on 02/01/95. Status: C Complied with CD - Compliance after Delay NC - Not Complied with SOON - Compliance Expected in Reaso nably Short Time CP - Complied with Partially NYD - Not Yet Due  Report: PCLCR2 - Status of Covenant Compliance - Full History Run Date: 6/2/99 5:17:25 PM User ID: TMSAS03, User Division: ISGSR Selection Criteria for Report: Product Line :'PE','SF' Project ID : 10420   SRI LANKA COLOMBO URBAN TRANSPORT PROJECT (CR. 2495-CE) ECONOMIC RE-EVALUATION ANNEX B   1 SRI LANKA COLOMBO URBAN TRANSPORT PROJECT (CREDIT 2495 CE) ANNEX B Economic Evaluation 1. The economic evaluation for the ICR is based on the evaluation provided in the Borrower's Report (BR), see Annex C, and some additional analysis. The principle results of the BR are repeated here. Improvements to two Transport System Management (TSM) project components, the Olcott Mawatha corridor and Maradana Junction, were subject to economic re-evaluation. The third TSM component, Fort Junctions, was dropped from the project due to security issues and is not re-evaluated. This annex also discusses the appropriateness of the economic evaluation undertaken at appraisal. Each TSM component is discussed separately below. 2. The Borrower's evaluation is described in Annex C, however two points will be mentioned here on the method employed. The SAR evaluation used the SATURN traffic network model to analyse present and future traffic flows for "with" and "without" project cases. The Transportation Studies and Planning Centre (TSPC) repeated the same modelling exercise for the BR using present traffic flows with the project and simulated a "without" project case. With the TSPC being disbanded the details of the modelling exercise and present day traffic volumes are not available for examination. 3. An overall ERR has also been calculated based on summing the net costs of each TSM component. It shows a combined ERR of 27% compared to 26% in the SAR. Olcott Mawatha 4. The economic costs of the Olcott Mawatha corridor rehabilitation component are composed of construction, equipment, and maintenance cost. The actual economic construction and equipment costs are summarised below: Economic Investment Costs (Olcott Mawatha) Year Costs (SL Rs million) Construction Road Furniture Total & Equipment 1994 32.382 0.441 32.823 1995 42.399 9.555 51.954 1996 63.630 8.260 71.890 1997 64.827 23.303 88.130 1998 21.882 0.000 21.882  2 1999 21.343 l 11.095 32.438 Source: Annex C 5. The additional maintenance costs of the rehabilitated section of the Olcott Mawatha corridor were obtained from the Colombo Municipal Council (periodic and routine) over the life of the project. In the SAR a percentage of the total construction cost had been used, 1 % per annum for Olcott Mawatha portion. 6. Average speeds have increased as a result of the project. If the project have be implemented as originally planned, with co-ordinated timing of traffic signals, the average speeds would have been higher. Change in Average Speed (Olcott Mawatha) Volune/Capacity ratio Average Vehicle Speed (km/h) 1991 1999 0.0 - 0.5 25.0 34.5 0.5 - 0.6 21.9 32.2 0.6 - 0.7 19.7 25.5 0.7 - 0.8 17.5 23.0 0.8 - 0.9 16.2 20.0 0.9- 1.0 15.0 15.0 > 1.0 not available 12.0 Source: SAR, and Annex C 7. The economic benefits of the rehabilitated section of the Olcott Mawatha corridor include savings in vehicle operating costs and passenger time costs, as summarized in the following text table. Carbon reduction and air pollution reduction benefit is not included, as the SAR had not included these benefits in its economic evaluation. The project benefits were derived 37% from VOC savings and 63% from passenger time savings. The high passenger time benefit arises because areas adjacent to Olcott Mawatha are centres for passenger movement containing both major bus and passenger rail terminals. Economic Benefits (Olcott Mawatha) (SL Rs millions) Year VOC Savings Time Savings Total Benefits 1998 24.42 40.20 64.62 1999 30.89 48.40 79.30 2000 39.08 58.28 97.36 2001 49.44 70.18 119.61 2002 62.54 84.50 147.04  3 2003 65.10 97.00 162.09 2004 67.76 111.34 179.10 2005 70.53 127.80 198.34 2006 73.42 146.70 220.12 2007 75.49 151.96 227.45 2008 77.62 157.40 235.02 Source: Annex C 8. A conventional set of economic evaluation indicators has been calculated for Olcott Mawatha. Three sets of calculations have been performed. The first replicates the analysis done in the SAR. The second tries to replicate the evaluation undertaken in the Borrower's Report (BR), although it does not succeed precisely. The third is an independent analysis undertaken for the ICR. The BR limited its analysis to a ten year project horizon because of uncertainty in the dynamic conditions of Colombo urban traffic. The SAR handles this issue by assuming a cap for benefits after the seventh year. 9. For the ICR the re-evaluation was calculated using the details of the BR evaluation with two modifications. First, the starting year of the evaluation was pushed back to 1993 to match the analysis of the SAR. Second, the figures for the final year (year 10) of the project were assumed to carry forward for an additional five years, so that the length of the project would match the SAR analysis. This ICR analysis reconciles the actual cost and benefit figures shown in the BR with the project timing and project life assumptions of the ICR (see also paragraphs 15, 16 below on the SAR's evaluation). The details are shown in Tables B-1 and B-2 at the end of this Annex. A summary is presented in the following text table: Summary of Evaluation Results (Olcott Mawatha) (SL Rs millions) SAR BR ICR Total cost 325.0 364.4 391.5 Total benefit 2,666.4 1,730.1 2662.6 First year of benefits 1998 1998 1998 Project life (years) 15 10 15 NPV (at 10% discount) 506.8 437.7 499.9 ERR 28.4 % 29.5 % 29.7 % C/B ratio n/a 0.49 0.31 Source: SAR, Annex C, Tables B-1, B-2.  4 10. The BR shows a lower NPV for this component largely because it used a ten year project life in its analysis. The ICR shows a slightly lower NPV for this component because costs were higher than expected at appraisal. Despite lower construction costs (Rs 56 million less) the non-construction capital costs and the ongoing maintenance costs were higher than assumed (Rs 33 million and Rs 90 million more, respectively). The ERRs calculated in both the BR and ICR matched the SAR estimate reasonably closely. A cost/benefit ratio was not estimated in the SAR. Maradana Junction 11. The economic costs of the Maradana Junction Improvement component are composed of construction, equipment and maintenance costs only. As in the SAR environmental benefits are not included. The construction and equipment costs are summarized below as executed by the CMC. The additional maintenance costs of the Maradana Junction component for the remainder of the project's life were obtained from the Colombo Municipal Council. In the SAR, 0.5% per annum of the Maradana Junction total construction cost had been used as a maintenance cost estimate. 12. The economic benefits of the Maradana Junction Improvement includes savings in vehicle operating costs and passenger time costs, as summarized in the following text table. Average speeds have increased and journey times have decreased as a result of the improvements. As with Olcott Mawatha, if the project have be implemented as originally planned, with co-ordinated timing of traffic signals, the average speeds would have been higher. Project benefits were derived 61% from VOC savings and 39% from passenger time saving. This proportion is very close to the benefits estimated in the SAR (i.e., VOC saving of 60% and passenger time saving of 40%). Economic Investment Costs (Maradana Junction) Year Costs (SL Rs million) Construction Road Furniture Total & Equipment 1994 _ 1995 46.732 - 46.732 1996 85.799 15.988 101.787 1997 55.293 0.157 55.450 1998 12.404 - 12.404 Source: Annex C  5 Economic Benefits (Maradana Junction) (SL Rs millions) Year VOC Savings Time Savings Total Benefits 1998 17.30 11.20 28.50 1999 22.69 14.61 37.30 2000 29.76 19.05 48.81 2001 39.04 24.84 63.88 2002 51.20 32.40 83.60 2003 52.96 33.54 86.50 2004 54.78 34.72 89.49 2005 56.66 35.94 92.59 2006 58.60 37.20 95.80 2007 59.49 38.24 97.73 2008 60.40 39.30 99.70 Source: Annex C 13. A conventional set of economic evaluation indicators has also been calculated for Maradana Junction. As for Olcott Mawatha above, three sets of calculations have been performed (see paragraphs 6, 7, above). The details are shown in Tables B-3 and B-4 at the end of this Annex. A summary is presented in the following text table: Summary of Evaluation Results (Maradana Junction) (SL Rs millions) SAR BR ICR Total cost 247.0 237.4 246.4 Total benefit 1,167.6 823.9 1,222.7 First year of benefits 1997 1998 1998 Project life (years) 15 10 15 NPV (at 10% 198.8 133.8 187.4 discount) ERR 23.8 % 24.6 % 22.3 % C/B ratio n/a 0.51 0.45 Source: SAR, Annex C, Tables B-3, B-4.  6 14 The BR shows a lower NPV for this component because it used a ten year project life in its analysis. The ICR shows a slightly lower NPV and ERR for this component compared to the SAR because project benefits began one year later than anticipated. A cost/benefit ratio was not estimated in the SAR. Although total costs were almost exactly as estimated in the SAR, lower construction costs were lower (Rs 18 million less) and ongoing maintenance costs were higher than assumed (Rs 14 million more). Economic Evaluation in the SAR 15 The economic evaluation prepared in the SAR was appropriate to this urban transport project. It included consideration of changes in traffic congestion on project benefits. It evaluated traffic flows in a network context. It included consideration of increased congestion during project construction as a "negative benefit". Benefits due to changes in vehicle operating costs (VOCs) were estimated for both benefits from reduced roughness and benefits due to reduction in congestion. The SAR included both NPVs and ERRs. The evaluation conducted an appropriate level of sensitivity analysis and calculated switch values. 16 Benefits described in the SAR but not quantified included reduced traffic safety hazards, improved pedestrian access. A third non-quantified benefit was better traffic access to the port area, however by dropping the third part of the TSM (Fort Junction) this benefit was eliminated. 17 The SAR indicates that ex-post evaluation and monitoring of project progress (SAR, Annex 9) will be done using a number of surveys and on-going statistical reporting. Most of these surveys have been completed by TPSC or through the Colombo Urban Transport Study and are used in calculating the economic re-evaluation (i.e. journey time, traffic volume, passenger income, vehicle operating costs). However traffic accident data is not available at the time of preparing the ICR for "before" and "after" comparison. 18 The calculation of the NPV and ERR in the SAR are replicated in Tables B- 1 and B-3. These calculations show two years of zero cost and zero benefit (1993, 1994) before the project gets underway. As seen above, these zero years have a strong effect on the NPV calculations. One could presume that the SAR was attempting to include the effect of two years of waiting time after the project became effective (1993) before substantial project disbursements began (1995). This should be spelled out more clearly in the discussion on "economic evaluation methods".  ECONOMIC RE-EVALUATION Project: Colombo Urban Transport Project, Olcott Mawatha Improvements Currency units: Sri Lanka Rupees (Rs), millions Effectiveness date: 18-Aug-93 INITIAL EVALUATION (replicate SAR) RE - EVALUATION following Borrower's Report COSTS BENEFITS NET COSTS BENEFITS NET const other mtce total reduced psgr total BENEFITS const other mtce total reduced psgr total BENEFITS Year voc time voc time 1993 0.0 0.0 0.0 1994 27.1 1.8 28.9 0.0 -28.9 32.38 0.44 32.82 0.00 -32.82 1995 54.4 3.7 58.1 -5.5 -5.5 -63.6 42.40 9.56 51.95 0.00 -51.95 1996 81.5 5.5 87.0 0.0 -7.3 -7.3 -94.3 63.63 8.26 71.89 0.00 -71.89 1997 108.6 7.4 116.0 0.0 -7.3 -7.3 -123.3 64.83 23.30 88.13 0.00 -88.13 1998 16.1 1.1 17.2 37.8 39.4 77.2 60.0 21.88 0.00 3.70 25.58 24.42 40.20 64.62 39.04 1999 0.2 0.2 42.4 46.6 89.0 88.8 21.34 11.10 3.70 36.13 30.89 48.40 79.29 43.16 2000 0.2 0.2 46.3 55.2 101.5 101.3 3.70 3.70 39.08 58.28 97.36 93.66 2001 0.2 0.2 50.5 65.3 115.8 115.6 3.70 3.70 49.44 70.18 119.62 115.92 2002 0.2 0.2 55.0 77.3 132.3 132.1 16.02 16.02 62.54 84.50 147.04 131.02 2003 0.2 0.2 59.9 91.5 151.4 151.2 3.70 3.70 65.10 97.00 162.10 158.40 2004 0.2 0.2 65.2 108.3 173.5 173.3 3.70 3.70 67.76 111.34 179.10 175.40 2005 0.2 0.2 70.9 128.1 199.0 198.8 3.70 3.70 70.53 127.80 198.33 194.63 2006 0.2 0.2 77.0 151.6 228.6 228.4 3.70 3.70 73.42 146.70 220.12 216.42 2007 0.2 0.2 74.5 151.6 226.1 225.9 16.02 16.02 75.49 151.96 227.45 211.43 2008 0.2 0.2 72.1 151.6 223.7 223.5 3.70 3.70 77.62 157.40 235.02 231.32 2009 15.0 0.2 15.2 94.2 151.6 245.8 230.6 2010 0.2 0.2 91.7 151.6 243.3 243.1 2011 0.2 0.2 89.3 151.6 240.9 240.7 2012 0.2 0.2 86.8 151.6 238.4 238.2 Total 302.7 19.5 2.8 325.0 1,013.6 1,652.8 2,666.4 2,341.4 246.46 52.65 65.31 364.43 636.29 1,093.76 1,730.05 1,365.62 Compared to SAR estimate -56.24 33.15 62.51 39.43 -377.31 -559.04 -936.35 -975.78 -19% 170% 2233% 12% -37% -34% -35% -42% Discounted flow at: c/b b/c c/b b/c 10.0% 212.5 0.30 3.38 719.3 506.8 243.8 0.39 2.55 621.4 377.6 0.49 4~~~~~37.66 -I ERR 28.4% 29.48% 28.0% W mtce assumDtion ?? mtce assumPtion Borrower's Report r 1.0% annual 1.5% annual I Sources & Notes: 5.0% 5 yr periodic ICR - Implementation Completion Report, World Bank, November 1999 SAR - Staff Appraisal Report, World Bank, 22 April 1993 366.97 total construction from monthly project costs report (fnancial costs) Borrower's Report, Ministry of Transport and Highways, August 1999 economic costs are 67% of financial costs  ECONOMIC RE-EVALUATION Project: Colombo Urban Transport Project, Olcott Mawatha Improvements Currency units: Sri Lanka Rupees (Rs), millions Effectiveness date: 18-Aug-93 INITIAL EVALUATION (replicate SAR) ICR RE-EVALUATION with project term matching SAR COSTS BENEFITS NET COSTS BENEFITS NET const other mtce total reduced psgr total BENEFITS const other mtce total reduced psgr totai BENEFITS Year voc time voc time 1993 0.0 0.0 0.0 0.00 0.00 0.00 1994 27.1 1.8 28.9 0.0 -28.9 32.38 0.44 32.82 0.00 -32.82 1995 54.4 3.7 58.1 -5.5 -5.5 -63.6 42.40 9.56 51.95 0.00 -51.95 1996 81.5 5.5 87.0 0.0 -7.3 -7.3 -94.3 63.63 8.26 71.89 0.00 -71.89 1997 108.6 7.4 116.0 0.0 -7.3 -7.3 -123.3 64.83 23.30 88.13 0.00 -88.13 1998 16.1 1.1 17.2 37.8 39.4 77.2 60.0 21.88 0.00 3.70 25.58 24.42 40.20 64.62 39.04 1999 0.2 0.2 42.4 46.6 89.0 88.8 21.34 11.10 3.70 36.13 30.89 48.40 79.29 43.16 2000 0.2 0.2 46.3 55.2 101.5 101.3 3.70 3.70 39.08 58.28 97.36 93.66 2001 0.2 0.2 50.5 65.3 115.8 115.6 3.70 3.70 49.44 70.18 119.62 115.92 2002 0.2 0.2 55.0 77.3 132.3 132.1 16.02 16.02 62.54 84.50 147.04 131.02 2003 0.2 0.2 59.9 91.5 151.4 151.2 3.70 3.70 65.10 97.00 162.10 158.40 2004 0.2 0.2 65.2 108.3 173.5 173.3 3.70 3.70 67.76 111.34 179.10 175.40 2005 0.2 0.2 70.9 128.1 199. T 198.8 3.70 3.70 70.53 127.80 198.33 194.63 2006 0.2 0.2 77.0 151.6 228.6 228.4 3.70 3.70 73.42 146.70 220.12 216.42 0 2007 0.2 0.2 74.5 151.6 226.1 225.9 16.02 16.02 75.49 151.96 227.45 211.43 2008 0.2 0.2 72.1 151.6 223.7 223.5 3.70 3.70 77.62 157.40 235.02 231.32 2009 15.0 0.2 15.2 94.2 151.6 245.8 230.6 3.70 3.70 77.62 157.40 235.02 231.32 2010 0.2 0.2 91.7 151.6 243.3 243.1 3.70 3.70 77.62 157.40 235.02 231.32 2011 0.2 0.2 89.3 151.6 240.9 240.7 3.70 3.70 77.62 157.40 235.02 231.32 2012 0.2 0.2 86.8 151.6 238.4 238.2 16.02 16.02 75.49 151.96 227.45 211.43 Total 302.7 19.5 2.8 325.0 1,013.6 1,652.8 2,666.4 2,341.4 246.46 52.65 92.42 391.54 944.64 1,717.92 2,662.56 2,271.02 Compared to SAR estimate -56.24 33.15 89.62 66.54 -68.96 65.12 -3.84 -70.38 -19% 170% 3201% 20% -7% 4% 0% -3% Discounted flow at: c/b btc chb b/c 10.0% 212.5 0.30 3.38 719.3 506.8 226.0 0.31 321 725.9 499.9 0049 437.6t -f ERR 28.4% 1 29.48% 29.7% mtce assumption ?? mtce assumption Borrower's Report: r 1.0% annual 1.5% annual m Sources & Notes: 5.0% 5 yr perodic ICR - Implementation Completion Report, World Bank, November 1999 W SAR - Staff Appraisal Report, World Bank, 22 April 1993 366.97 total construction from monthly project costs report (financial costs) N) Borrower's Report, Ministry of Transport and Highways, August 1999 economic costs are 67% of financial costs  ECONOMIC RE-EVALUATION Project: Colombo Urban Transport Project. Maradana Junction Improvements Currency units: Sri Lanka Rupees (Rs), millions Effectiveness date: 1 8-Aug-93 INITIAL EVALUATION (replicate SAR) RE - EVALUATION following Borrowers Report COSTS BENEFITS NET COSTS BENEFITS NET const other mtce total reduced psgr total BENEFITS const other mtce total reduced psgr total BENEFITS Year voc time voc time 1993 0.0 0.0 0.0 1994 0.0 0.0 0.0 1995 84.0 4.7 88.7 -1.6 -1.6 -90.3 46.73 46.73 0.00 -46.73 1996 84.0 4.7 88.7 -1.6 -1.6 -90.3 85.80 15.99 101.79 0.00 -101.79 1997 41.9 2.4 1.1 45.4 15.6 9.1 24.7 -20.7 55.29 0.16 55.45 0.00 -55.45 1998 8.3 0.5 1.1 9.9 34.3 20.5 54.8 44.9 12.40 1.00 13.41 17.30 11.20 28.50 15.09 1999 1.1 1.1 37.8 23.1 60.9 59.8 1.00 1.00 22.69 14.61 37.30 36.30 2000 1.1 1.1 37.8 23.1 60.9 59.8 1.00 1.00 29.76 19.05 48.81 47.81 2001 1.1 1.1 41.6 26.1 67.7 66.6 1.00 1.00 39.04 24.84 63.88 62.88 2002 1.1 1.1 45.8 29.4 75.2 74.1 6.01 6.01 51.20 32.40 83.60 77.59 2003 1.1 1.1 50.44 33.14 83.58 82.48 1.00 1.00 52.96 33.54 86.50 85.50 2004 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 54.78 34.72 89.50 88.50 2005 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 56.66 35.94 92.60 91.60 2006 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 58.60 37.20 95.80 94.80 2007 1.1 1.1 55.54 37.34 92.88 91.78 6.01 6.01 59.49 38.24 97.73 91.72 2008 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 60.40 39.30 99.70 98.70 2009 1.1 1.1 55.54 37.34 92.88 91.78 2010 1.1 1.1 55.54 37.34 92.88 91.78 2011 1.1 1.1 55.54 37.34 92.88 91.78 2012 0.0 0.00 0.00 Total 218.2 12.3 16.5 247.0 707.66 459.96 1,167.62 920.62 200.23 16.15 21.02 237.40 502.88 321.04 823.92 586.52 Compared to SAR estimate -17.97 3.85 4.52 -9.60 -204.78 -138.92 -343.70 -334.10 -8% 31% 27% -4% -29% -30% -29% -36% Discounted flow at: c/b b/c c/b b/c 10.0% 165.4 0.45 2.20 364.3 198.9 185.4 0.56 1.78 330.7 145.3 0.51 1338 ERR 23.8% 24.58% 20.23% W mtce assumPtiOn ?? _mtce_ssmPo Borrower's Report r 0.5% annual 0.5% annual 0 Sources & Notes: 2.5% 5 yr periodic ICR - Implementation Completion Report, World Bank, November 1999 SAR - Staff Appraisal Report, World Bank, 22 April 1993 Z75.61 total construction from monthly project costs report (financial costs) | Borrower's Report, Ministry of Transport and Highways, August 1999 economic costs are 73% of financial costs  ECONOMIC RE-EVALUATION Project: Colombo Urban Transport Project, Maradana Junction Improvements Currency units: Sri Lanka Rupees (Rs), millions Effectiveness date: 18-Aug-93 INITIAL EVALUATION (replicate SAR) ICR RE-EVALUATION with project term matching SAR COSTS BENEFITS NET COSTS BENEFITS NET const other mtce total reduced psgr total BENEFITS const other mtce total reduced psgr total BENEFITS Year voc time voc time 1993 0.0 0.0 0.0 0.00 0.00 0.00 1994 0.0 0.0 0.0 0.00 0.00 0.00 1995 84.0 4.7 88.7 -1.6 -1.6 -90.3 46.73 46.73 0.00 -46.73 1996 84.0 4.7 88.7 -1.6 -1.6 -90.3 85.80 15.99 101.79 0.00 -101.79 1997 41.9 2.4 1.1 45.4 15.6 9.1 24.7 -20.7 55.29 0.16 55.45 0.00 -55.45 1998 8.3 0.5 1.1 9.9 34.3 20.5 54.8 44.9 12.40 1.00 13.41 17.30 11.20 28.50 15.09 1999 1.1 1.1 37.8 23.1 60.9 59.8 1.00 1.00 22.69 14.61 37.30 36.30 2000 1.1 1.1 37.8 23.1 60.9 59.8 1.00 1.00 29.76 19.05 48.81 47.81 2001 1.1 1.1 41.6 26.1 67.7 66.6 1.00 1.00 39.04 24.84 63.88 62.88 2002 1.1 1.1 45.8 29.4 75,2 74.1 6.01 6.01 51.20 32.40 83.60 77.59 2003 1.1 1.1 50.44 33.14 83.58 82.48 1.00 1.00 52.96 33.54 86.50 85.50 2004 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 54.78 34.72 89.50 88.50 2005 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 56.66 35.94 92.60 91.60 2006 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 58.60 37.20 95.80 94.80 2007 1.1 1.1 55.54 37.34 92.88 91.78 6.01 6.01 59.49 38.24 97.73 91.72 2008 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 60.40 39.30 99.70 98.70 2009 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 60.40 39.30 99.70 98.70 2010 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 60.40 39.30 99.70 98.70 2011 1.1 1.1 55.54 37.34 92.88 91.78 1.00 1.00 60.40 39.30 99.70 98.70 2012 6.01 6.01 60.40 39.30 99.70 93.69 Total 218.2 12.3 16.5 247.0 707.66 459.96 1,167.62 920.62 200.23 16.15 30.03 246.41 744.48 478.24 1,222.72 976.31 Compared to SAR estimate -17.97 3.85 13.53 -0.59 36.82 18.28 55.10 55.69 -8% 31% 82% 0% 5% 4% 5% 6% Discounted flow at: cOb b/c c/b b/c 10.0% 165.4 0.45 2.20 364.3 198.9 154.7 0.45 2.21 342.1 187.4 V051 133.8 18 ERR 23.8% 24.58% 22.29% W mice assumption ?? mtce assumption Borrowers Report r 0.5% annual 0.5% annual i Sources & Notes: 2.5% 5 yr periodic w ICR - Implementation Completion Report, World Bank, November 1999 SAR - Staff Appraisal Report, World Bank, 22 April 1993 275.61 total construction from monthly project costs report (financial costs) Borrower's Report, Ministry of Transport and Highways, August 1999 economic costs are 73% of financial costs  GOVERNMENT OF THE REPUBLIC OF SRI LANKA MINISTRY OF TRANSPORT AND HIGHWAYS COLOMBO URBAN TRANSPORT PROJECT (CR. 2495-CE) BORROWERS EVALUATION OF THE PROJECT ANNEX C   -- OwM.a.2g. QuM,jQ p,0383 ,aaw uoa q 01, t. .ja . 4;ejr w M Q 10. si "ff*44. su9ffi4@*^ ^"w 2;r~~~~0. ql L. ef. FJ1gtui,rsi'. wfsq