Evaluation Team

This report was prepared by a team of consultants (Aurecon, Republic of South Africa) under the coordination of Ms. Maria PATEGUANA (Young Professional, OPEV.1) and under the supervision of Mr. M.H. MANAÏ, Division Manager, OPEV.1. Any questions related to this document should be forwarded to Mr. MANAI (m.manai@afdb.org)

Objective

The objectives of the project were to improve the quality of road transport service levels and reduce vehicle operating costs and road maintenance costs between Mpharane, Bela Bela and Kolojane and St Theresa.

Main Findings

• The implementation of the project and the achievement of development objectives have been affected by significant time delay and additional financing by the GoL. The implementation schedule was very optimistic and implementation works were delayed from 12 to 21 months.

• However, the project was relevant in view of its consistency with the Bank’s Country Strategy Paper particularly regarding rural development as well as with the Poverty Reduction Strategy 2003/04 – 2006/07 (PRS) that emphasized the development of infrastructure (with specific emphasis on roads). The upgrading of this road is also referred to in the Transport Sector Programme (TSP). In terms of Quality at Entry, there are two major design weaknesses: (i) the project objectives were limited to the reduction of transport costs and provision of all-weather access to selected communities. Socio-economic dimensions such as poverty reduction, strengthening socio economic development of the target areas and rural development were not explicitly spelled out or taken into account in project design (ii) there was no appropriate socio-economic baseline or poverty/socio-economic assessment at the start-up of the project.

• The project was efficacious in achieving its intended results but the major shortcoming lies in achieving long term results. Travel times were reduced from about one hour to about half an hour. The road is now accessible all year around by all vehicle types, and estimations on Vehicle Operating Costs (VOC) show a reduction of about 40%. Nonetheless, the achievement of long term results i.e. promotion of economic growth and development, socio-economic development; poverty alleviation is not evident at this stage. This can be attributed to the fact that the road was only completed in 2005 and typically, the impact of rural roads takes some time to materialize.

• Updated information on traffic counts, physical implementation of outputs and VOC were used to recalculate the Economic Internal Rate of Return (EIRR) which amounted to 7.26% against the 16% expected at appraisal. The main underlying reason is below expectation traffic count. In addition, project implementation was characterized by 9 months delay, 55.3% cost overrun (from appraisal until completion) and the use of labor force for maintenance. Overall the efficiency of the project is rated unsatisfactory.

• There are two major issues that affect sustainability namely (i) inadequate funding for maintenance and (ii) limitations in institutional capacity. Cost recovery from road users is not sufficient to make a contribution towards rehabilitation of the road. According to a recent study conducted by the Roads Fund (RF) in 20101, the current recovery levels from road users amount to Maloti 56.78 million (approximately equivalent to UA 5.07 million) for the 2007/08 financial year compared to the Maloti 155.48 million (approximately UA 13.9 million) needed per annum for routine and periodic maintenance only to maintain the road network in a fair condition. This represents cost recovery from road users of about 36.5%. In case the recurrent budget allocations from central government are included, the financing gap narrows to about 56%.

• In terms of institutional sustainability, RD is currently undergoing a major institutional reform as staff levels are in the process of being reduced from 1,800 (technical and professional) to 150 (professional only). Only 60 positions out of the 150 positions of the RD have been filled, and the remaining positions are being advertised.

• Overall, the project is rated satisfactory despite the fact that traffic growth estimations did not materialize and that both implementation delays and costs overruns have hampered the project efficiency leading to an achievement of some results slower than expected.

 

Main Lessons

• Baseline data and continuous follow up after project completion with country’s executing agencies are paramount to ensure appropriate impact assessment of projects with socio-economic and poverty reduction dimensions.

• Private sector development in contracting road works is a condition to ensure proper competition in the bidding process and suitable qualifications of the national capacity in the sector.

• Appropriate M&E system with key performance indicators to measure socio-economic impact and poverty reduction are key to ensure that objectives are met and project is yielding expected impacts.

• Adequate institutional capacity and expertise of the Road Department on planning and executing road maintenance works is another necessary condition to ensure project sustainability in particular and the national road network in general.

• Enforcement of safety measures and preservation of existing safety equipments on the road are key to ensure road users safety. Traffic Sign Vandalism can hamper road safety. In some instances, the traffic signs are stolen from the road and then used in building dwellings or the poles of guardrails are used for firewood.

Main Recommendations

Recommendation(s) to the Bank:

• Preparation of rural road projects should have a specific approach for rural development and should take on board the need for complementary activities and services broadening the socio-economic opportunities in the targeted communities.

• In order to avoid changes in quantities and consequently extra cost and delays, the Bank should ensure that at appraisal, the bidding documents are based on a detailed engineering design.

Recommendation(s) to the Beneficiary:

• Adequate levels of financing for road maintenance can be resolved by strong commitment from the GOL in implementing recommendations from previous studies from the RF targeting road maintenance needs. Those include the gradual phasing of increased road user charge levels whilst ensuring that they remain affordable and the channeling of all roads funding to the RF. The Bank in coordination with the development partners active in the sector should continue to invest in policy dialogue with the GoL in order to tackle the road financing needs.

• It is imperative that the GoL in conjunction with development partners continue to invest in the promotion of local construction industry which ultimately would foster competition and reduce bid prices. This can be done through institutional capacity projects/programs aimed at developing and strengthening country’s medium and large road contractors.

• The GoL needs to strengthen M&E and Data Collection. Time series statistical data was not available at constituency as data is aggregated at district level and discarded afterwards. This situation has hampered both the PCR as well as the PPER exercise. It is recommended that the GoL and the MOPWT put in place mechanisms of data collection and analysis that are not discarded after aggregation.

• It is recommended to perform reseal actions at an earlier point of time to avoid costly rehabilitation actions or pavement reconstruction at a later stage.