The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT

Transcription

1 Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR Public Disclosure Authorized Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-H5470 TF IDA-H7890) ON A GRANT IN THE AMOUNT OF SDR 17.9 MILLION (US$30 MILLION EQUIVALENT) AND ON AN ADDITIONAL GRANT IN THE AMOUNT OF SDR 14 MILLION (US$21 MILLION EQUIVALENT) TO THE Public Disclosure Authorized LAO PEOPLE S DEMOCRATIC REPUBLIC FOR A ROAD SECTOR PROJECT ( P ) March 27, 2018 Transport & Digital Development Global Practice East Asia And Pacific Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective {September 30, 2017) Currency Unit = Lao Kip Lao Kip 8,293 = US$1 US$1.41 = SDR 1 FISCAL YEAR July 1 - June 30 Regional Vice President: Victoria Kwakwa Country Director: Jean-Christophe Carret Senior Global Practice Director: Jose Luis Irigoyen Practice Manager: Almud Weitz Task Team Leader(s): Sombath Southivong ICR Main Contributor: Chanin Manopiniwes

3 ABBREVIATIONS AND ACRONYMS AADT Annual Average Daily Traffic AF Additional Financing CAS Country Assistant Strategy CBA Cost-Benefit Analysis DPWT Department of Public Work and Transport EA Environmental Assessment EGPF Ethnic Groups Policy Framework EIA Environmental Impact Assessment EIB European Investment Bank EIRR Economic Internal Rate of Return EMP Environmental Management Plan ESOM Environmental and Social Operation Manual EU European Union FS Feasibility Study GDP Gross Domestic Product GoL Government of Lao PDR HDM Highway Development and Management Model ICT Information and Communication Technology IDA International Development Association IFC International Finance Corporation IFR Interim Financial Report IRI International Roughness Index LRSP2 Lao Road Sector Project 2 M&E Monitoring and Evaluation MPWT Ministry of Public Work and Transport MTR Mid-term Review NPV Net Present Value NSEDP National Socio-Economic Development Plan NTSP National Transport Strategic Plan PAD Project Appraisal Document PDO Project Development Objectives PPIAF Public Private Infrastructure Advisory Facility PPP Public-Private Partnership PROMMS Provincial Road Maintenance Management System PTI Public Works and Transport Institute RAMP Road Asset Management Project RAP Resettlement Action Plan RMF Road Maintenance Fund RMS Road Management System SCF Standard Conversion Factor SDR Special Drawing Right TED Technical Environmental Division VOC Vehicle Operating Cost VOT Value of Time

4 TABLE OF CONTENTS DATA SHEET... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES... 5 A. CONTEXT AT APPRAISAL...5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)...8 II. OUTCOME A. RELEVANCE OF PDOs B. ACHIEVEMENT OF PDOs (EFFICACY) C. EFFICIENCY D. JUSTIFICATION OF OVERALL OUTCOME RATING E. OTHER OUTCOMES AND IMPACTS (IF ANY) III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION B. KEY FACTORS DURING IMPLEMENTATION IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME.. 17 A. QUALITY OF MONITORING AND EVALUATION (M&E) B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE C. BANK PERFORMANCE D. RISK TO DEVELOPMENT OUTCOME V. LESSONS AND RECOMMENDATIONS ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ANNEX 3. PROJECT COST BY COMPONENT ANNEX 4. EFFICIENCY ANALYSIS ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ANNEX 6. MPWT S ICR... 42

5 The World Bank Road Sector Project ( P ) DATA SHEET BASIC INFORMATION Product Information Project ID P Country Lao People's Democratic Republic Original EA Category Partial Assessment (B) Project Name Road Sector Project Financing Instrument Specific Investment Loan Revised EA Category Full Assessment (A) Related Projects Relationship Project Approval Product Line Additional Financing P LA - Additional Financing Road Sector Project Organizations 26-Jul-2012 IBRD/IDA Borrower Ministry of Finance Implementing Agency Ministry Of Public Works and Transport Project Development Objective (PDO) Original PDO The project development objectives are (a) to improve road services on two main national corridors and the provincial road network, (b) to rehabilitate roads damaged by Typhoon Ketsana, and (c) to establish and operationalize a contingency fund for quick disaster response in the road sector. Page 1 of 90

6 The World Bank Road Sector Project ( P ) FINANCING World Bank Financing IDA-H5470 TF IDA-H7890 Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) 27,800,000 27,800,000 27,569,317 1,000, , ,013 21,000,000 21,000,000 20,684,618 Total 49,800,000 49,718,013 49,171,948 Non-World Bank Financing Borrower 14,380,000 27,880,000 26,650,000 JAPAN: Ministry of Finance - PHRD Grants 1,000,000 1,000, ,013 Total 15,380,000 28,880,000 27,568,013 Total Project Cost 65,180,000 78,598,013 76,739,961 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 25-Mar Jul Nov Sep Sep-2017 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) 06-May Mar-2017 Amount Disbursed (US$M) Key Revisions Change in Safeguard Policies Triggered Change of EA category Reallocation between Disbursement Categories KEY RATINGS Outcome Bank Performance M&E Quality Highly Satisfactory Satisfactory High Page 2 of 90

7 The World Bank Road Sector Project ( P ) RATINGS OF PROJECT PERFORMANCE IN ISRs No. Date ISR Archived DO Rating IP Rating Actual Disbursements (US$M) Jan-2011 Satisfactory Satisfactory Jan-2012 Moderately Satisfactory Moderately Satisfactory Jun-2012 Satisfactory Satisfactory Feb-2013 Satisfactory Moderately Satisfactory Oct-2013 Satisfactory Moderately Satisfactory Jun-2014 Satisfactory Moderately Satisfactory Jan-2015 Satisfactory Moderately Satisfactory Aug-2015 Satisfactory Moderately Satisfactory Feb-2016 Satisfactory Moderately Satisfactory Sep-2016 Satisfactory Satisfactory Apr-2017 Satisfactory Satisfactory SECTORS AND THEMES Sectors Major Sector/Sector (%) Transportation 100 Public Administration - Transportation 5 Rural and Inter-Urban Roads 95 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 45 Jobs 11 Job Creation 11 Regional Integration 34 Page 3 of 90

8 The World Bank Road Sector Project ( P ) Finance 8 Finance for Development 8 Disaster Risk Finance 8 Urban and Rural Development 46 Urban Development 11 Urban Infrastructure and Service Delivery 11 Rural Development 11 Rural Infrastructure and service delivery 11 Disaster Risk Management 24 Disaster Response and Recovery 8 Disaster Risk Reduction 8 Disaster Preparedness 8 ADM STAFF Role At Approval At ICR Regional Vice President: James W. Adams Victoria Kwakwa Country Director: Annette Dixon Ellen A. Goldstein Senior Global Practice Director: John A. Roome Jose Luis Irigoyen Practice Manager: Jeeva A. Perumalpillai-Essex Almud Weitz Task Team Leader(s): Zhi Liu Sombath Southivong ICR Contributing Author: Chanin Manopiniwes Page 4 of 90

9 The World Bank Road Sector Project ( P ) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. At appraisal in February 2010, Lao PDR had achieved steady economic growth, but remained one of the world s poorest countries in East Asia and the Pacific. Its per capita gross national income was US$740 in The economy of Lao PDR was primarily natural resources-based with more than half of the GDP from agriculture, forestry, livestock and fisheries. Agriculture was the major sector of the economy (44% of GDP), employing about 80% of the labor force. Given Lao PDR s central location within the Greater Mekong Sub-region, the country s transport network comprised an integral part of the sub-region s transport network and associated economic corridors. The Sixth National Socio-Economic Development Plan (NSEDP, ) aimed to ensure that an efficient transport system creates favorable conditions for sustainable growth and poverty reduction, as well as regional integration. 2. Road is still the predominant mode of transportation in Lao PDR. In 2010, the road network carried 90% of passenger traffic (passenger-km) and 86% of freight traffic (ton-km). In total, the road system extended over 35,000 km. The national road network comprised approximately 6,900 km of roads, most of which had either a sealed (56%) or gravel (30%) surface. The national network was mostly in an acceptable condition (80% of paved roads were classified as good or fair) and generally constructed to an appropriate standard for the volume and nature of the traffic carried. However, the provincial roads (totaling 5,500 km) and district and rural roads (almost 18,000 km) were mostly gravel or earth roads and vulnerable to heavy rains and floods. 3. Lao PDR is one of the ASEAN region s most vulnerable countries to natural hazards with the highest 100-year Probable Maximum Loss relative to GDP (as high as 11.7 percent). Five major storms or tropical cyclones have affected the country over the past two decades. In 2009, Typhoon Ketsana resulted in estimated damages and losses of US$58 million. In 2011, Typhoon Haima and Tropical Storm Nok-Ten caused damages of US$66 million and US$72 million, respectively. In 2013, a series of storms caused extensive flooding affecting 350,000 people in 12 provinces (out of a total of 18). Global and regional climate change projections suggest that natural disasters in Lao PDR are likely to intensify and become more frequent. On September 29, 2009, Typhoon Ketsana swept across the southern part of Lao PDR, causing enormous damages and losses in five provinces (Attapeu, Sekong, Saravanh, Champasak, and Savannakhet), killing 28 people, affecting more than 180,000 people, or almost 30,000 households. A Post- Disaster Damage, Loss, and Need Assessment estimated that about 1,842 km of roads and a number of small bridges were severely or partially damaged, and that the cost of restoring these roads and bridges could amount to about US$13 million. If not restored soon, the damages would cause economic losses, mainly in terms of higher vehicle operating costs and longer travel times, further hampering the recovery of the severely affected local economy. 4. Financing remained a major constraint for the Government of Lao PDR (GoL) to achieve its strategic objectives in the road sector. Road construction and maintenance were, and continue to be, funded mainly from three sources: external assistance, government budget and a dedicated Road Maintenance Fund (RMF). The RMF was established Page 5 of 90

10 The World Bank Road Sector Project ( P ) in 2001 with revenue mainly from a fuel levy, starting from US$2 million in 2002 and growing at about 10% per year. Funding from the Nam Theun 2 Hydropower Project was also expected to help fund poverty reduction-focused basic rural road improvement and maintenance. 5. Given that the World Bank had been one of the key donors in Lao PDR s transport sector for two decades and the support had achieved good results, the rationale for the Bank s continuing assistance to the road sector was strong. Bank support for the last two decades has been adjusted to the country s needs, which had been evolving over time i.e. from national roads rehabilitation in the 90s to provincial infrastructure development, road maintenance, and institutional strengthening. A significant achievement was the establishment of the RMF in RMF is still in operation with growing revenue from US$2 million in 2002 to US$80 million in The GoL has put in place a road asset management system, financial management system, and strengthened capacity of both public and private sectors involved in the road sector development. Lao Road Sector Project (LRSP) was built on the previous achievement and capitalized on institutional outcomes achieved from previous operations, especially the two-phase Bank-led multi-donor-funded Road Maintenance Program. In particular, the Bank s involvement in LRSP would enable further development and implementation of the building blocks of integrated road asset management and sector governance. The project would build necessary capacity to manage and utilize the road asset database, which would be the basis for road sector s planning and prioritization. At the same time, the Bank could enable GoL to establish an emergency contingency fund for rapid response to disasters, and thereby provide immediate relief for typhoon recovery. For the latter, support in the form of an IDA Grant would help the country maintain debt sustainability. Theory of Change (Results Chain) 6. The theory of change below illustrates the project s chain of impacts, from activities to output, to outcomes (at PDO level), which affect long-term outcomes. Key components related to road upgrading, maintenance and disaster recovery contributed directly to transport service outcomes; while the institutional strengthening component played a supporting role to project implementation (at output level) as well as contributing to the longer-term sector-level strategy and capacities. Page 6 of 90

11 The World Bank Road Sector Project ( P ) Project Development Objectives (PDOs) 7. The objectives of the Project in the Financing Agreement were: (a) to improve road services on two (2) main national corridors and the provincial road network; (b) to rehabilitate roads damaged by Typhoon Ketsana; and (c) to establish and operationalize a contingency fund for quick disaster response in the road sector. Key Expected Outcomes and Outcome Indicators 8. The key outcome indicators were: Reduced travel time on national roads Increased number of people served by paved national roads Increased share of provincial road network in good/fair condition Recovered condition of road damaged by Typhoon Ketsana Contingency fund established and operationalized to ensure the passability and safety of the affected national and provincial road links Page 7 of 90

12 The World Bank Road Sector Project ( P ) Components 9. Component A: Road Network Improvement and Preservation (Total US$ million; of which RMF US$8.00 million, other GoL contribution US$6.38 million and IDA US$17.55 million). This component financed physical works for the upgrading of two priority national road links, the periodic maintenance of the provincial road network, and road safety improvements. The two national roads to be upgraded are: (a) NR 1B from Pak Nam Noy to Ban Yo, Phongsaly Province, 109 km; and (b) NR 6A from Sop Bao to Ban Dan, Houaphan Province, 62 km. The provincial roads to be included under the project were identified from MPWT s three year rolling plan and Annual Works Programs (AWP). 10. Component B: Institutional Strengthening (Total US$2.45 million; of which from the Policy and Human Resource Development or PHRD Fund US$1.00 million and IDA US$1.45 million). The component provided technical assistance to both MPWT and the Provincial DPWTs in the areas of strategic planning and management, country system for environmental safeguards, fiduciary management, and internal controls. 11. Component C: Disaster Recovery and Contingency (Total US$8.80 million from IDA Crisis Response Window resources). The component supported quick recovery of about 1,100 km of Typhoon Ketsana damaged roads in the five southern provinces (Attapeu, Sekong, Saravanh, Champasack and Savannakhet) and establishment of an emergency contingency fund for quick response to the impacts of natural disasters on the road network. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets 12. The PDO was not changed during implementation. Revised PDO Indicators 13. N/A. Revised Components 14. Components were not changed or cancelled. There were changes from Additional Financing (AF), which are reflected in the section below on Other Changes. Other Changes 15. Additional Financing (AF) was approved in The project was also restructured four times: first in 2012, then in 2014, in 2015, and lastly in The AF provided an additional US$21 million equivalent (SDR 14 million) to finance 1 Reference to restructuring papers approved on January 26, 2012 (Report No ); on August 1, 2014 (Report No ); on April 9, 2015 (Report No. RES16540); and, on March 25, 2017 (Report No. RES26371). Page 8 of 90

13 The World Bank Road Sector Project ( P ) unanticipated cost overruns, enabling the project to complete its original road improvement targets. The AF was also used to scale up project impact by: (a) enhancing the disaster resilience of two national roads and priority sections of the provincial network; (b) further strengthening the institutional capacities of MPWT; and (c) topping up the emergency contingency fund, depleted following rehabilitation efforts in The institutional strengthening aspects were expanded to include development of sector capacities for the management of Public Private Partnerships (PPP) as well as feasibility studies of PPP pilots. The AF also extended the original closing date from September 30, 2014 to September 30, The 2012 restructuring reallocated SDR1.86 million from various components to Component C Disaster Recovery and Contingency as an emergency response to Typhoon Haima and Nokten. 17. The 2014 restructuring reallocated SDR1.17 million (US$1.8 million equivalent) from the disaster contingency fund to finance cost overruns for National Road 6A and to finance the repair of sections of National Road 1B that was damaged by flash floods during the previous rainy season. 18. The 2015 restructuring (Level 1) revised the project s Environmental Assessment (EA) Category from B to A. As discussed below, this change was required to ensure that the feasibility studies for the road sector PPP would comply with both World Bank environmental and social policies and IFC Performance Standard requirements. 19. The 2017 restructuring (Level 2) reallocated project proceeds from Category 1 to Category 3 to cover payment of retention money for emergency repairs on NR13 after typhoon Haima, and from Category 1 to 4 to cover costs incurred mainly for (a) a supervision consultant for additional works related to upgrading NR 6A, seven bridges on NR 6A and NR 1B, and (b) consultants for the Social and Environment Survey for NR 13. Rationale for Changes and Their Implication on the Original Theory of Change 20. Rationale for Additional Financing. The AF in 2012 was deemed necessary to address the cost overruns that resulted from design changes to enhance the disaster resilience of the two national road sections, discrepancies in the original design of these two roads, the need to accommodate the installation of electricity lines along both roads, severe deterioration of the provincial road network following typhoons Haima and Nok Ten in 2011, and overall price escalation for materials and fuel, which was as high as 31.2% (year-on-year) in June Rationale for the restructuring in The original project had been accorded EA Category B as the scope of activities, including road improvement works of two national roads and maintenance works of provincial roads, was not expected to be have large scale, significant, and/or irreversible environmental or social impacts. When the AF was approved, the overall potential of PPP road development was uncertain in Lao PDR. To determine PPP viability, location, and scope, parallel funding was initially mobilized from the Public Private Infrastructure Advisory Facility (PPIAF) for a preliminary Feasibility Study (pre-fs). The pre-fs was conducted between February and May 2013, identified sections of National Road 13 (NR13) where PPP could potentially be viable, and recommended that a full FS be carried out to identify specific sections of NR13. Page 9 of 90

14 The World Bank Road Sector Project ( P ) 22. The full FS concluded that a PPP could potentially be viable for the two road sections from Km12 to Km70 of NR13 North and from Km13 to Km63 of NR13 South. The FS also found that road expansion from two to four lanes would be viable on NR13N from Km12 to Km44 and NR13S from Km21 to Km28. The proposed scope was determined to trigger the Bank s Environmental Assessment Category A under OP4.01, as the PPP pilot roads would pass through semi-urbanized areas and, if the road were widened for the full length of the pilot sections, would affect some 1,600 landowners, 30% residential and 70% commercial entities. Therefore, safeguards instruments related to the PPP road sections needed to be prepared as part of the FS on the basis of a Category A project. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating Rating: High 23. The objectives of LRSP are relevant today as at appraisal. The project strengthened road asset management planning and implementation process and capacity, which follows the goals and guidelines set out in the 6 th National Socio-economic Development Plan (NSEDP) ensuring road infrastructures are in good condition and able to support socio-economic activities. The project objectives and achievements are consistent with MPWT s National Transport Strategic Plan (NTSP) for , which prioritized a rolling investment and maintenance program for the road sector based on a Unified Road Management Framework (URMF). In addition, the project has been influential in setting the direction of the NTSP, which is updated from time to time during implementation. 24. The project was fully consistent with the World Bank s Country Assistance Strategy (CAS) for Lao PDR ( ). It supported the first CAS pillar of sustained growth through enhanced regional integration and private sector development, and also the CAS objective to improve alignment of donor resources with the Government s National Growth and Poverty Eradication Strategy and strengthen aid coordination. During implementation, the project remained relevant to the Country Partnership Strategy (CPS, ) on the first pillar: Competitiveness & Connectivity, as well as on cross-cutting areas of planning and budgeting. 25. Towards completion, the project remained even more relevant to the Country Partnership Framework (CPF, ) in several areas. The project directly linked with Objective 1.3 Investing in infrastructure for growth and inclusion under Focus Area 1: Supporting inclusive growth. In addition, Under Focus Area 3: Protecting the environment, the project addressed in the transport sector what Objective 3.2 Putting in place enhanced disaster risk management and climate and disaster resilience was set out to do. Page 10 of 90

15 The World Bank Road Sector Project ( P ) B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome Rating: High 26. As described in the previous section, the key expected outcomes of the project were: (i) improvement of road services on two main national corridors and the provincial road network; (ii) rehabilitation of roads damaged by typhoon Ketsana; and, (iii) establishing and operationalizing a contingency fund for quick disaster response in the road sector. PDO (i): Improvement of road services on two main national corridors and the provincial road network Rating: High 27. This part of the PDO refers to the improvement of road services on the two national corridors NR 6A and NR 1B as well as on the provincial road network maintained under the project. Key outcome indicators for road services improvement that contributed directly to this were: (a) reduced travel time on national roads, (b) increased number of people served by paved national roads, and (c) increased share of provincial road network in good/fair condition. 28. At appraisal, the travel times on NR 6A (62km) and NR 1B (109km) were 3 hours and 5 hours, respectively. The target was to reduce travel time by 40%. The civil works on NR 1B were completed ahead of schedule, and by August 2013 travel time had been brought down to 2.5 hours (50% reduction), this level was sustained through to the end of the project. The construction work on NR 6A was completed by the end of 2016, and the travel time reduced to 50 minutes (72% reduction). 29. It was expected that the project would serve at least 26,500 people (49% female, i.e., at least 12,985 female). The project s annual survey in 2016 showed that the paved national roads (NR 6A and NR 1B) were serving 116,581 people (44% of whom were female, i.e., 51,296 female). 30. The share of the provincial road network in good and fair condition was 46% at appraisal, against a target of 64%. By project end, implementation of annually planned provincial road maintenances programs had resulted in 65% of the provincial road network in good and fair condition. It was noteworthy that the km of provincial roads maintained had exceeded the planned targets in every year of implementation. 31. Overall implementation of project components that contributed to this objective were completed on time, above target, and within revised budget with additional financing. The results of these activities contributed as expected to the outcome of the project. The outcomes contribute to the broader objective of economic growth and shared prosperity better connectivity for people in the districts and improved quality of national road s services. It also served as a case for a sector-wide approach, which set the path toward better alignment of donor resources. Page 11 of 90

16 The World Bank Road Sector Project ( P ) PDO (ii): Rehabilitation of roads damaged by Typhoon Ketsana Rating: High 32. The rehabilitation of roads damaged by Typhoon Ketsana was implemented quickly and as soon as the project started, through advance contracting arrangements. The magnitude of impact from Typhoon Ketsana, as mentioned earlier, was as large as US$58 million in damages and losses; and it impacted more than 300,000 people in 12 provinces. Against a target of 60%, 55% of roads damaged by Typhoon Ketsana were rehabilitated by the end of 2011, whereas the remaining 45% (of repair works) were completed by the Recipient using other sources of funds. As this objective was achieved by the client partly with other sources of funding, this component also demonstrates the outcome of better alignment of donor resources, where the government is taking the lead toward a common (country s own) development objective. Overall, this objective was achieved in a timely manner and within budget. PDO (iii): Establishing and operationalizing a contingency fund for disaster response in the road sector Rating: High 33. The contingency fund mechanism for quick disaster response under the project was established in The fund was triggered following Typhoon Haima and Nock Ten in July 2011 for urgent road repair works. The objective was achieved, as US$ 3.63 million was utilized right away for emergency repair of 28.6 km of National Road 13 North after the actual natural disaster event. The mechanism implemented under LRSP has been institutionalized and is now being used for GoL budget including RMF. The procedure of requesting for emergency funding from the RMF is incorporated in MPWT s financial management guidelines. Justification of Overall Efficacy Rating Rating: High 34. The project achieved the PDOs through activities and outcomes as explained above. Although the project was affected by natural disaster events, the efficacy was further enhanced by introduction of both non-structural (contingency fund) and structural (strengthen selected vulnerable road sections) climate resilience into the project design. In addition, the technical assistance component on sector strategy enhanced the Ministry s ability not only to roll out the road asset management program to the provinces but also to have a clear direction for strengthening the sector and tackling the sector s issues. C. EFFICIENCY Assessment of Efficiency and Rating Rating: Substantial 35. This project achieved the expected efficiency from the national road improvement part and exceeded expectations from the provincial road maintenance part. Construction works on national roads were completed well before project completion, whereas the estimated benefits from vehicle operating cost (VOC) and value of time saving Page 12 of 90

17 The World Bank Road Sector Project ( P ) (VOT) are around the expected value. The economic internal rate of return (EIRR) at completion is 28.1% with net present value (NPV) of approximately US$24.7 million. The EIRR at completion is much higher than at appraisal because the additional financing added climate resilience design to the project. Extra benefits come from avoided emergency maintenance as well as the additional benefits from better provincial road connectivity. The provincial road maintenance program functioned much better than expected, because the project could implement more provincial road maintenance than appraisal estimates - 2,500 km of provincial roads maintained (compared to the target of 1,600 km at appraisal). The EIRR at completion for provincial road maintenance is 47.5% with NPV of US$14 million. See Annex 4 for details of the economic analysis. Table: Results of Economic Analysis at Different Stages National Road 1B & 6A Provincial road maintenance PAD (2010) Additional Financing (2012) Completion (2017) EIRR (%) 16.5% / 13.6% 26.0% 28.1% NPV (US$ million) 1.6 / EIRR (%) 23% 27% 47.5% NPV (US$ million) Other aspects of efficiency, particularly on implementation in the sector, have also been improved through institutional strengthening and business process of MPWT and DPWT, including road sector prioritization, planning, budgeting, procurement, contract management and monitoring. 37. Considering the achievements above, the overall efficiency for this project is rated Substantial. D. JUSTIFICATION OF OVERALL OUTCOME RATING Rating: Highly satisfactory 38. The project objectives were highly relevant to country priorities as well as within the scope and direction of the Bank s CAS at the design stage, and remained relevant at completion. There are no shortcomings in the project s achievement of its relevance, objectives, and efficiency. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 39. A key project outcome included a target on female beneficiaries along and benefits from national roads 6A and 1B. The target was at least 12,985 females, who live along the national roads, would benefit from improved national roads. Data collected during implementation showed the total number of beneficiaries to be substantially higher than Page 13 of 90

18 The World Bank Road Sector Project ( P ) originally estimated, with 51,296 females among the 116,581 people served by the two national roads. This is because: (a) the methodology at appraisal only accounts for number of people who lives along the national roads, while the project was able to also collect data on beneficiaries in the districts who benefit from using the national roads as well, and (b) the improved provincial roads enabled more people in the districts to access and utilize national roads. Institutional Strengthening 40. The technical assistance component on the transport sector strategy was instrumental in strengthening MPWT s role as a national institution with enhanced capability to provide clear direction for improving transport sector performance. A functioning road asset management system, with associated tools and database at the national level, is important for cost-effective management of the sector. With MPWT s appetite continuously to evolve, the ministry began under LRSP to explore how best to (a) incorporate climate resilience aspects into the road asset management decision-making process; and (b) roll out a road asset management system for the provinces. Implementation of these two important aspects is now proceeding under the follow-on project, Lao Road Sector Project 2 (LRSP2, Credit Number 5920-LA). Mobilizing Private Sector Financing 41. Although the project did not originally address private sector financing, the AF included a feasibility study for NR13 to assess the potential for use of a PPP in the Lao road sector. While portions of NR13N and NR13S were identified as potential PPP project, issues pertaining to country readiness suggested that a full-fledged PPP with toll collection would face road users affordability issue, which introduce political risk to the potential project. However, based on the findings of the FS, MPWT has endorsed use of an Output and Performance Based Road Contract (OPBRC) for improvement of the NR13 sections. Private sector elements inherent in OPBRC include: (i) design and construction risk transferred to the private sector with longer term contract; (ii) contractor accorded more responsibility, not only for construction of the road but also for road asset management throughout the period of contract; and (iii) payment from GoL spanning a longer time period, thereby mobilizing more resources from the private sector to address urgent needs for road improvement and maintenance. Poverty Reduction and Shared Prosperity 42. The improved road services for national roads impacted low-income households in Phongsaly province (approximately 14,800 households in Khua, Boonneua, and Boontai Districts) and Huaphan province (approximately 14,100 households in Xienkhor, Sopbao, and Add Districts). Most of them, based on the location, are low-income households in rural areas. 2 The provincial road maintenance was implemented country-wide and has impact on the rural population, which is more than 2/3 of the total population. Because most of provincial roads are unpaved and vulnerable to flood and landslides, road maintenance is crucial in ensuring all year round accessibility, which provides access to employment, market, school, and health services. The project s benefits have been distributed more to lower-income population, as well as shared among all provinces in Lao PDR. 2 According to the Census 2015, more than 80% of Phongsaly s households are in rural areas, and more than 85% of Huaphan s households are in rural areas. Page 14 of 90

19 The World Bank Road Sector Project ( P ) Other Unintended Outcomes and Impacts N/A III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 43. Realistic objectives and simple design. The project objectives were straightforward and appropriately conservative in view of the urgent response required to address a natural disaster. The project s objectives thus focused more than they might otherwise have done on restoration, strengthening and climate resilience of physical infrastructure. At the same time, the project design was well balanced as it directly addressed key institutional and capacity requirements to achieve results. The three project components aligned well with mandates of departments within MPWT, which made implementation effective and manageable. 44. Well-designed results and monitoring frameworks. The results framework focused on the important building blocks (both from processing and institutional knowledge perspectives) that feed into delivering physical outputs (i.e. roads as transport services; including emergency response fund). These physical outputs in turn had clear linkages to the PDOs and outcome indicators. While there was room for improvement (such as better coordination among MPWT s own departments and units on monitoring and data collection), the clear structure of implementation ensured that appropriate monitoring data was collected and available for timely review. 45. Adequate risk and mitigation measure identification. The risk assessment was appropriately conservative. The risks were understood to reflect systemic weaknesses, including the provincial government s lack capacity for implementation, in particular a weak control environment and limited financial management capacity. The project design addressed these risks well, and along with expectations of intensive oversight, placed important emphasis on capacity building activities. 46. Readiness for implementation. In summary, the project was well prepared with simple and straightforward objectives and design, as well as clear understanding of the strengths and weaknesses of the participating agencies. At the national level, the preparation built on capacity that had been developed in the course of previous projects. However, provincial authorities had not been fully engaged in past road projects, and thus the institutional strengthening and capacity building aspects of project design were of key importance during implementation. B. KEY FACTORS DURING IMPLEMENTATION (i) Factors subject to government and/or implementing entities control Page 15 of 90

20 The World Bank Road Sector Project ( P ) 47. Coordination, engagement, and approval processes needed a push at the beginning. The slow progress in the beginning of the project showed that, despite the good coordination and stakeholder engagement during preparation, not all participants were ready to discharge their respective responsibilities. It took two years for the project to catch up, as procurement processes were slow and disbursements lagged behind targets. 48. Capacity constraints within MPWT. Although there was technical capacity within the ministry, it tended to be limited (for example, to a single official who knows or can perform important tasks, such as procurement and data collection for provincial road management database). Staff turnover and lack of continuity posed a challenge early on during implementation, especially with respect to timely processing and achieving key milestones. 49. Strong commitment and leadership by key stakeholders. The government s strong commitment, as reflected in the efforts of MPWT and the provincial authorities, was an important factor in breaking through the first two years of implementation difficulty. Both MPWT and provincial governments realigned staffing to ensure sufficient capacity for implementing the project. More capable officials were put in place and assigned to go through required trainings (on safeguards, financial management, and procurement). 50. Procurement compliance, especially with provincial road maintenance, needed close implementation support. Capacity at the provincial level (and of MPWT to coordinate) on procurement and financial management was weak early on in project implementation. Although indications of procedural deviation were found, corrective measures were quickly put in place. After more emphasis on capacity through mobilization of more qualified staff, and extensive training and support from the procurement consultant, the fiduciary compliance and performance (for both procurement and financial management) improved to moderately satisfactory in mid Procurement aspects required close supervision throughout the project, to resolve minor delays and miscommunication between MPWT and the provincial departments. 51. Strengthened risk management. An investigation by the World Bank s Integrity Vice Presidency (INT) substantiated fraud and corruption allegations reported to INT that were related to a few contracts financed under LRSP. Therefore, the combined fiduciary risk is assessed as Substantial. Risk management includes continued technical support and capacity building to strengthen the FM system and procurement and contract management capacity. The Government has enhanced its procurement information disclosure on the MPWT s website and all staff involved in procurement decisions are required to sign disclosure of their interest. 52. Safeguard compliance strengthened with country system integration. The implementation of Environmental and Social Operation Manual (ESOM) was piloted under the project. This proved to be a useful tool for MPWT to perform environmental and social safeguard due diligence that complied with the requirements of both the government and international donors (including the World Bank). 53. Monitoring and Evaluation (M&E) was adequate, but could have been better. Data were collected as needed, but not very systematically. MPWT did make progress in building up a data collection system for both technical and implementation monitoring, but the process was not fully mainstreamed as a decision-making tool during project implementation. Page 16 of 90

21 The World Bank Road Sector Project ( P ) (ii) Factors subject to World Bank control 54. Implementation support was adequate. Taking advantage of an in-country Task Team Leader (TTL), project implementation support was carried out on a continuous rather than intermittent basis. The close proximity of the TTL and some of the Bank s fiduciary staff helped the Bank anticipate problems, e.g., gaps in coordination and engagement, and be proactive and timely in assisting government to resolve them. Opportunities were identified and acted upon, as evidenced in the decisions to include climate resilient designs and PPP analytical work in the Additional Financing. Reporting, as in ISRs and Aide-Memoires, was candid throughout. (iii) Factors outside the control of government and or implementing entities 55. Natural disaster and related cost escalation. Following Typhoons Haima and Nok Ten in 2011, there was overall price escalation for materials and fuel. The fuel prices rose by 31.2% (year-on-year) in June 2011, from 29% in May, and 26.5% in April 3. This led to the Additional Financing, which was used not only to cover cost overruns, but also to address climate resilience aspects of road design in the civil works under the project. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) Rating: High M&E Design 56. The theory of change in the PAD was clear and straightforward. The intermediate outcome indicators include: (a) those that directly linked with the performance toward PDO (such as km of national roads upgraded as per specification, km of Typhoon Ketsana affected roads repaired, and km of provincial roads preserved through periodic maintenance), and (b) those that contributed as project implementation enablers and toward policy/sector level development. Examples of the latter include: acquiring knowledge and capacity on sector strategic planning and internal control, MPWT s staff trained to use country systems for environmental assessment, fiduciary, and supervisory capacity strengthened at provincial level. 57. At design stage, the result frameworks are close to output level and the higher-level outcome objectives have been more implicit. This is mainly because the project was designed at post-disaster stage, where the priority was to quickly respond to the natural disaster s impact at hand. 3 Government of Lao PDR (2011). Typhoon Haima Joint Damage, Lossess and Needs Assessment (JDLNA) - A Report prepared by the Government of the Lao PDR With support from the ADB, ADPC, FAO, GFDRR, Save the Children, UNDP, UNFPA, UNICEF, UNHABITAT, WFP,WHO, World Bank, World Vision, AND WSP. Page 17 of 90

22 The World Bank Road Sector Project ( P ) M&E Implementation 58. MPWT managed M&E implementation with its own resources plus the support of consulting services. A consultant was contracted for the Unified Road Management Framework (URMF) data collection and ICT development that serves the Ministry s strategic planning of the sector. MPWT s related department performed M&E through its utilization of Road Management System (RMS) and Provincial Road Maintenance Management System (PROMMS). Data analysis was performed by the Public Works and Transport Institute (PTI an extended research institute under MPWT), which helped to inform implementation decisions well and in a timely manner. M&E Utilization 59. Given that MPWT carried out most of the M&E implementation in-house, data and results from analyses were embedded in the decision-making process. The URMF and ICT infrastructure that was developed will be utilized beyond the project, i.e. for all of MPWT s projects, in the future. Justification of Overall Rating of Quality of M&E 60. There were no shortcomings, and the M&E system worked as it was supposed to. The M&E system was able to quickly identify gaps and needs and inform decision makers through simple but comprehensive database and data analysis. Disbursement targets and results indicator targets were achieved well before the project closed. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental safeguards 61. The project was initially classified as a Category B Project, and thus triggered Environmental Assessment (OP/BP 4.01, which is piloted under OP 4.00). The Environment and Social Operations Manual (ESOM) was piloted under OP 4.00, in line with OP 4.01, and has been applied satisfactorily to all civil works financed by the project i.e. when there s a gap between government regulation and World Bank s safeguard policy, ESOM enabled implementation to follow both. 62. During early implementation, the government issued a new Environmental Impact Assessment (EIA) Decree. The Bank and MPWT jointly conducted a consistency analysis for the new EIA Decree and ESOM. Based on the results of the assessment, the ESOM was updated in line with the new EIA Decree, and also consistent with the Bank s safeguards requirements. Both the Initial Environmental Examination (IEE) and Environmental Management Plan (EMP) for the two national road improvements were developed by the Technical and Environmental Division (TED) of Roads Department in MPWT, and were implemented on the ground by the supervision consultant and Provincial Department of Public Works and Transport (DPWT) to ensure effective supervision of contractor performance and provide the required safeguards monitoring reports. The Page 18 of 90

23 The World Bank Road Sector Project ( P ) implementation of ESOM worked well throughout implementation, with no major negative impact on the local environment or people. 63. In 2015, the Environmental Assessment category was changed to Category A through full project restructuring (see paras 15-16). The resulting FS for the PPP proposed widening of two national road sections (NR13 North and NR13 South), for which land acquisition would be required. Although LRSP only financed the FS, the change in EA category ensured that the feasibility study s scope and outputs would comply with the World Bank s safeguards policies. The Terms of Reference (TOR) for the Environmental and Social Impact Assessment (ESIA) Report, Resettlement Action Plan (RAP), and Ethnic Group Development Plan (EGDP) were prepared as part of the FS report. However, the Environmental and Social sections of the FS prepared during March - April 2015 were found to be insufficient for the level of a World Bank Group (WBG) Category A project. Thus the ESIA, RAP and EGDP/EGEP were revised to meet category A project requirements as part of NR13 project preparation. Social safeguards 64. The LRSP triggered (a) Involuntary Resettlement (OP/BP 4.12), and (b) Indigenous People (OP/BP 4.10) social safeguards policies. The Resettlement Policy Framework (RPF), RAP, and the Ethic Groups Policy Framework (EGPF) were prepared by TED and monitored by PTI. Project implementation was in line with the social safeguards frameworks and plans, and there were no reports of major social safeguards issues in the progress reports (only minor issues about traffic control during construction, which were addressed by the contractors and project manager). Procurement 65. Procurement delays contributed to the slow startup of the project during the first two years of implementation, but the progress accelerated in year three and caught up with planned targets thereafter. The procurement delays affected the national road improvement sub-component in the early years, as well as procurement of road safety equipment and recruitment of various consultants (e.g. quality assurance and supervision advisors for provincial roads). The main causes of delay included (i) limited human resources and staff turnover, and (ii) a lengthy internal approval process within MPWT. MPWT had put more focus on the typhoon-affected roads, which with limited human resource, caused delays in other parts. The long internal approval process associated with how the procurement committee functioned i.e. availability to meet and discuss was another factor. Financial Management 66. Financial Management performance lagged behind at the beginning of the project, due to poor quality and delayed submission of the Interim Financial Reports (IFRs) and project audit reports. The quality of the IFRs and timing of submission of both IFRs and audit reports continued to improve after the second year of implementation. The audit opinions were unqualified (clean) throughout project implementation. Despite the complex structure of disbursement arrangements (i.e. with MPWT and DPWT), FM staffing, accounting and Page 19 of 90

24 The World Bank Road Sector Project ( P ) internal control systems, and maintenance of supporting documents were sufficient. As all of the staff working on the financial management of the project were staff of MPWT and DPWT, the project was instrumental in improving the overall capacity of ministry staff to manage the finances of ODA projects. Work on strengthening internal controls, internal audit and accounting within MPWT commenced in this project, and the plan is to continue the process in future engagements. C. BANK PERFORMANCE Rating: Satisfactory Quality at Entry 67. As discussed, the project design was simple and straightforward, with a PDO of strategic relevance to the country s NESDP and NTSP. The technical, financial, and economic appraisal was approached with room for flexibility which enabled, among other things, the project to scale-up toward climate resiliency in the initial road improvement designs. Flexibility also was provided via the project s adoption of MPWT s Annual Work Programming process as the basis for identifying the provincial road network periodic maintenance program to be financed each year under the project. Poverty, gender, and social development aspects were considered and related outcome indicators reflected. Environmental and social safeguards were prepared properly, with a focus on strengthening country systems through the ESOM along with other required safeguard instruments (such as EMP, EGPF, RAP). The fiduciary team adequately assessed the procurement and financial management capacity of the implementation units and incorporated assistance in the project design as required. A minor shortcoming was that the procurement assessment and actions did not fully account for procurement staff turnover in MPWT. This turnover caused procurement implementation delays, which were resolved later on through implementation support. The Bank team put a lot of effort into ensuring that the policies, institutions and implementation arrangements were set up right and fit for implementation which is one of the most crucial aspects of the project. The M&E arrangement not only took advantage of the existing monitoring system (i.e. RMS & PROMMS), but also enhanced the process through actual utilization of the system. Quality of Supervision 68. Understanding of implementation agency s potential and limitations. The Bank s supervision was effective in supporting MPWT s implementation of the project. With good understanding of the weaknesses and strengths of the implementing agency, the Bank s team was able to address the issues detected in a collaborative fashion, with the Bank and the client working together to find solutions. This collaborative approach led to the right capacity building support and training (e.g. on procurement and FM in the beginning of the project, technical aspects and on safeguards at preparation and during implementation). The capacity enhancement also went beyond the project. For example, the Department of Finance established under the project has become a part of the Ministry s standard practice. The Bank also facilitated knowledge exchange activities with neighboring countries, such as Vietnam, to share and exchange experiences with PROMMS, resulting in adapting the PROMMS for the local road maintenance management system in Vietnam; and later on during implementation, with South Africa on road sector reform, PPP, public works and transport research, and overloading control. Page 20 of 90

25 The World Bank Road Sector Project ( P ) 69. Mid-term review (MTR). A thorough and well-documented MTR was carried out towards the end of 2014, which confirmed that (a) the project design was still relevant and practicable, (b) risks identified during appraisal were being effectively managed, and (c) implementation was on track towards attainment of the PDO. The assessment concluded that implementation was still appropriately focused not only on civil works, but also on systems development and strengthening. The MTR team identified areas in need of further support and/or strengthening, particularly at the DPWT/provincial level, was proactive in identifying resources and approaches to provide such support, and monitored progress for the duration. 70. Lao-based implementation support. Given that the Bank s team was largely in the region (with the TTL stationed in Vientiane), responses to issues did not have to wait for the next mission. Problems could be discussed and handled expeditiously and - given a high frequency of dialogue often could be solved before they became problematic. Technical assistance and training could be made available whenever needed, as opposed to waiting for the next mission. Local implementation support was especially helpful in facilitating coordination and dialog between MPWT and the provinces during project implementation. 71. Technical support and flexibility within scope. The Bank s team was well placed to provide technical support to help MPWT cope with unexpected changes, i.e. cost overruns and financing gap due to natural disasters, typhoons. The team supported the client in adjusting the project design within the original scope to consider climate resilience, a more realistic design that resulted in higher efficiency. Further support also was provided by Additional Financing approved two years into implementation. Various technical assistances were also mobilized to support the client, such as Transport sector strategic advisory services, internal control system and tools development, PPP feasibility study, Integrated Road Asset Management System (IRAM), and Financial Management System. Justification of Overall Rating of Bank Performance 72. The Bank s performance was rated Satisfactory for both Quality at Entry and Quality of Supervision, hence Bank performance overall is rated Satisfactory. D. RISK TO DEVELOPMENT OUTCOME 73. There were three key risks to development outcome: (a) overloading trucks cause road to deteriorate faster than expected, causing service level to decline faster; (b) the government does not allocate adequate budget for road maintenance; and/or (c) the government neglects the climate resilience and emergency response initiative. 74. It is unlikely that the government will not continue to maintain the roads because the government has set up (and continues to develop) a viable road asset management system, a Road Fund 4 to address road maintenance matters, and the capacity of agencies concerned was built throughout the project implementation period. The Road Fund is the key mechanism to ensure predictable and sustained allocations 4 Road Fund Decree No. 130 in June 2016 to change the name from Road Maintenance Fund to Road Fund Page 21 of 90

26 The World Bank Road Sector Project ( P ) of funds for road maintenance. Its main source of funds is a fuel levy and the annual revenue generated by the RMF which has been increasing steadily from US$2 million in 2002 (when the fund became operational) to US$80 million in It is expected that the fund will continue to grow more than 10% annually over the next 5 years. As per Prime Minister s Decree 130/PM of 2016, national roads receive 80% the RMF allocation, and local roads, the remaining 20%. The subsequent LRSP2, which became effective in February 2017, directly supports this initiative. 75. It is also unlikely that the government will neglect the climate resilience and emergency response initiative because MPWT has started to mainstream climate resilience aspects into the planning process under LRSP2 as well. Steps are being undertaken for the road asset management system to include climate resilience aspects in its database module, which in turn will incorporate climate resilience into the maintenance prioritization and the decision-making process, and establishment of climate resilience road maintenance procedures was included as a policy action for the recently approved Green Growth Development Policy Operation. V. LESSONS AND RECOMMENDATIONS 76. Key lessons from project preparation and implementation experience are the following: 77. Straightforward project design supported easy adjustments during the life of the project. Clear, not overly ambitious targets were set and sufficiently straightforward to be easily adjusted when required, e.g., after the typhoons and to accommodate associated cost overruns through Additional Financing. The project design provided a clear line-of-sight from outputs to objectives, which made it possible for the project to be easily adapted to unexpected challenges. The approach will likely continue to be relevant in the Lao context. From the project s experience, capacity building takes time and will likely require continuing support due to staff movments. 78. Institutional leadership by MPWT was key to the success of the project. Many aspects of the project have an impact at the sector level, which is possible because MPWT has taken the lead in donor coordination, financial management practice, safeguards implementation, etc., beyond the project. This would not be possible without the institutional leadership and ownership of MPWT. With MPWT s leadership, advances in the road sector planning and management arising from project interventions, have been carried forward into the sector s strategic planning and prioritization system for road improvement and maintenance. This includes how the government handled the fiduciary case investigated by INT. The Government had quickly enhanced its transparency of procurement information disclosure and of all staff involved in procurement decisions to contain and lower the risk level. 79. Innovative implementation turned the natural disaster into an opportunity. Because of the need to respond to the typhoon which caused cost overrun, the project used the opportunity to introduce adaptation to climate change and streamlining the practice. South-South knowledge exchange with South Africa had been useful for Page 22 of 90

27 The World Bank Road Sector Project ( P ) MPWT and provincial governments to explore the new policy direction i.e. utilizing road funds and enhancing climate resilience. 80. Strong relationship and trust foster sustainability. Institutional capacity building was developed hand-inhand with strong relationship and trust between MPWT and the Bank s team. With flexibility and focus on sustainability at the institution level, the approach that the World Bank task team used in provide implementation support has built and strengthened relationship and trust, which has provided opportunities to introduce innovative approaches including OPBRC and business processes for road asset management. LRSP2 is a good example of how the institutional strengthening, improved business processes, and the capacity of MPWT to manage a sector-wide approach have sustainably evolved, and expanded beyond national level to provincial level. Lao National Road 13 project is another good example of how the government moves toward a long-term performance-based road maintenance contracting practice like OPBRC. Coordination challenge 81. Coordination between central and provincial agencies was more of a challenge than anticipated. More dialogue with stakeholders, more training, and more agreements were required to move the project forward. It is important not to underestimate the coordination requirements, especially between central and local governments. Another aspect of the coordination challenge links to the capacity and availability of MPWT officials at sufficiently high levels for decision-making purposes. Director-General level officials, when empowered to make decisions, will resolve issues quickly and enable the project to move forward. 82. A partnership style and in-country implementation support were key to the successful implementation of the project. Problems and issues were quickly addressed, both informally and formally through quick and timely communication. The close proximity of the TTL and fiduciary team helped to develop a partnership built on cooperation, trust and candor. It also facilitated provision of useful technical advice, made possible by the Bank s in-depth understanding of sectoral issues and relevant government systems and modalities.. Page 23 of 90

28 The World Bank Road Sector Project ( P ) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: To improve road services on two main national corridors and the provincial road network Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Vehicle travel time on upgraded roads reduced by 40% Text NR 1B (109 km): 5 hours; NR 6A (62 km): 3 hours 40% reduction (NR1B=3 hours; 6A=108 minutes) 40% reduction (NR1B=3 hours; 6A=108 minutes) 50% - NR 1B (109 km): 2.5 hours; 72% - NR 6A (62 km): 50 minutes 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Vehicle travel time on upgraded national roads NR 1B and NB6A reduced by 50% (or 2.5 hours) and 72% (or 50 minutes), exceeding the end target of 40% by the end of project. Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion At least 26,500 people (49% female), most of whom live Text 0 At least 26,500 (49% female) At least 26,500 (49% female) About 116,581(44% female) Page 24 of 90

29 The World Bank Road Sector Project ( P ) by the roadside, served with paved roads along NR 1B and 6A 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): About 116,581 people (44% female), most of whom live by the roadside, served with paved roads along NR 1B and 6A, exceeding the end target of at least 26,500 people. Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Share of provincial road network in good and fair condition (by Lao standards) increased from 46% to 64% Text 46% 64% 64% 65% 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Share of provincial road network in good and fair condition (by Lao standards) increased from 46% to 64% - target achieved by project closing. Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Roads rehabilitated, Nonrural Kilometers Feb Feb Sep Feb-2017 Comments (achievements against targets): 456km of non-rural roads (which is the total length of the rehabilitated Ketsana damaged national roads and improvement of NR 1B & 6A) rehabilitated target achieved. Page 25 of 90

30 The World Bank Road Sector Project ( P ) Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Roads rehabilitated, Rural Kilometers Feb Feb Sep Feb-2017 Comments (achievements against targets): 813km of rural roads rehabilitated (which is the length of rural roads damaged by Ketsana) target achieved. Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Roads in good and fair condition as a share of total classified roads Size of the total classified network Percentage May Feb Sep Feb-2017 Kilometers May Feb Sep Feb-2017 Comments (achievements against targets): 65% of Roads in good and fair condition as a share of total classified roads exceeding the end target of 55% Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Share of rural population with access to an all-season road Percentage May Feb Sep Feb-2017 Number of rural people Number Page 26 of 90

31 The World Bank Road Sector Project ( P ) with access to an all-season road 31-May Feb Sep Feb-2017 Comments (achievements against targets): 64% of rural population with access to an all-season road - target achieved. Objective/Outcome: To rehabilitate roads damaged by Typhoon Ketsana Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion About 60% of Ketsana damaged roads (including small and wooden bridges) repaired and improved Percentage Feb Feb Sep Feb-2017 Comments (achievements against targets): About 60% of Ketsana damaged roads (including small and wooden bridges) repaired and improved target achieved. Objective/Outcome: To establish an operationalize a contingency fund for quick disaster response in the road sector Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion A contingency fund established for quick restoration of passability and safety of disaster affected national and provincial roads Text Contingency fund not established Functional Functional Functional 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): A contingency fund established for quick restoration of passability and safety of disaster affected national and provincial roads - target achieved. Page 27 of 90

32 The World Bank Road Sector Project ( P ) A.2 Intermediate Results Indicators Component: Component A: Road Network Improvement and Presevation Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion 171 km of national roads (NR 1B and NR 6A) upgraded as per specifications Text Feb Feb Sep Feb-2017 Comments (achievements against targets): 171 km of national roads (NR 1B and NR 6A) upgraded as per specifications - target achieved Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion About 1,600 km of provincial roads preserved through periodic maintenance Text Feb Feb Sep Feb-2017 Comments (achievements against targets): About 2,500 km of provincial roads preserved through periodic maintenance - exceeding the end target of 1,600 km Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Road safety facilities Text 0 Fully installed Fully installed Fully installed Page 28 of 90

33 The World Bank Road Sector Project ( P ) acquired and installed as per specifications 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Road safety facilities acquired and fully installed as per specifications - target achieved. Component: Component B: Institutional Strengthening Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Knowledge and practical experiences acquired on transport sector strategic planning and management Text First sector strategic plan produced Strategic Plan updated and expanded Strategic Plan updated and expanded Strategic plan updated - Basis for preparing the MPWT transport sector vision, strategy and five- year plans 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Country system for EA used and staff trained Text Country system just piloted and only a few staff trained Safeguard actions under the country system for EA undertaken by MPWT and DPWT Safeguard actions under the country system for EA undertaken by MPWT and DPWT Training provided to 260 provincial and district engineers received ESOM training 23-Feb Feb Sep Feb-2017 Page 29 of 90

34 The World Bank Road Sector Project ( P ) Comments (achievements against targets): Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Acquired knowledge and practical experiences on internal control Text Internal control function non existent Third internal audit report produced Third internal audit report produced Internal control sections established in 17 provinces & internal control divisions in 8 departments, 2 institutes and 2 State Own Enterprises. Capacity building in in progress. 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Fiduciary and supervisory capacity strengthened at provincial level Text Capacity development program not yet started Capacity development program completed Capacity development program completed Impletmentation of training program is on-going and more than 1500 people trained. Page 30 of 90

35 The World Bank Road Sector Project ( P ) 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Component: Component C: Disaster Recovery and Contingency Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion About 1,100 km of Ketsana damaged roads (including small and wooden bridges) repaired and improved as per specifications Text 90 KM 1,100 KM 1,100 KM All repair works were completed. Target met 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): About 1,100 km of Ketsana damaged roads (including small and wooden bridges) repaired and improved as per specifications target achieved. Indicator Name Unit of Measure Baseline Original Target Formally Revised Target Actual Achieved at Completion Length of time to process payment to contractors for emergency works shortened Text Time of payment delayed for up to 2 years The fund established and time of payment shortened to less than 1 months The fund established and time of payment shortened to less than 1 months Payment made by about 4 months 23-Feb Feb Sep Feb-2017 Comments (achievements against targets): Page 31 of 90

36 The World Bank Road Sector Project ( P ) Page 32 of 90

37 The World Bank Road Sector Project ( P ) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1: To improve road services on two main national corridors and the provincial road network Outcome Indicators Intermediate Results Indicators 1. Vehicle travel time on upgraded national roads NR 1B and NB6A reduced by 50% (or 2.5 hours) and 72% (or 50 minutes), exceeding the end target of 40% by the end of project. 2. About 116,581 people (44% female), most of whom live by the roadside, served with paved roads along NR 1B and 6A, exceeding the end target of at least 26,500 people. 3. Share of provincial road network in good and fair condition (by Lao standards) increased from 46% to 64% - target achieved by project closing km of non-rural roads (which is the total length of the rehabilitated Ketsana damaged national roads and improvement of NR 1B & 6A) rehabilitated target achieved km of rural roads rehabilitated (which is the length of rural roads damaged by Ketsana) target achieved % of Roads in good and fair condition as a share of total classified roads exceeding the end target of 55% 7. 64% of rural population with access to an all-season road - target achieved million of rural people with access to an all-season road - target achieved km of national roads (NR 1B and NR 6A) upgraded as per specifications - target achieved 2. About 2,500 km of provincial roads preserved through periodic maintenance - exceeding the end target of 1,600 km Page 33 of 90

38 The World Bank Road Sector Project ( P ) 3. Road safety facilities acquired and fully installed as per specifications - target achieved. Key Outputs by Component (linked to the achievement of the Objective/Outcome 1) 1. NR 1B (109km) and NR 6A (62km) upgraded including 7 bridges 2. 2,500 km of provincial roads preserved through periodic maintenance Objective/Outcome 2: To rehabilitate roads damaged by Typhoon Ketsana Outcome Indicators Intermediate Results Indicators Key Outputs by Component (linked to the achievement of the Objective/Outcome 2) 1. About 60% of Ketsana damaged roads (including small and wooden bridges) repaired and improved target achieved. 1. About 1,100 km of Ketsana damaged roads (including small and wooden bridges) repaired and improved as per specifications target achieved. 1. 1,100 km of Ketsana damaged roads (including small and wooden bridges) repaired and improved. Objective/Outcome 3: To establish an operationalize a contingency fund for quick disaster response in the road sector Outcome Indicators Intermediate Results Indicators Key Outputs by Component (linked to the achievement of the Objective/Outcome 2) 1. A contingency fund established for quick restoration of passability and safety of disaster affected national and provincial roads - target achieved. 1. Length of time to process payment to contractors for emergency works shortened - target achieved. 1. A contingency fund established and operationalized. Page 34 of 90

39 The World Bank Road Sector Project ( P ) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Preparation Supervision/ICR Sombath Southivong Hoai Van Nguyen Siriphone Vanitsaveth Vachraras Pasuksuwan Flavio Chaves Vatthana Singharaj Siriphone Sourivanh Sybounheung Phandanouvong Khamlar Phonsavat Van Anh Thi Tran Martin Henry Lenihan Chanin Manopiniwes Vilayvanh Phonepraseuth Paul Vallely Reaksmey Keo Sok Wasittee Udchachone Role Task Team Leader(s) Procurement Specialist(s) Financial Management Specialist Operations Assistant Consultant Program Assistant Sr. Financial Management Specialist Sr. Social Development Specialist Consultant, Environment Specialist Sr. Transport Specialist, Road Safety Social Safeguards Specialist Infrastructure Economist Operations Analyst Sr. Transport Specialist Consultant Environmental Safeguards Specialist Page 35 of 90

40 The World Bank Road Sector Project ( P ) B. STAFF TIME AND COST Stage of Project Cycle No. of staff weeks Staff Time and Cost US$ (including travel and consultant costs) Preparation FY , FY , FY , FY , Total , Supervision/ICR FY , FY , FY , FY , FY , FY , FY , FY , FY , Total ,612, Page 36 of 90

41 The World Bank Road Sector Project ( P ) ANNEX 3. PROJECT COST BY COMPONENT Components Component A: Road Network Improvement and Preservation Component Component B: Institutional strengthening Component C: Disaster Recovery and Contingency Amount at Approval (US$M) Actual at Project Closing (US$M) Percentage of Approval (US$M) % % % Total % Page 37 of 90

42 The World Bank Road Sector Project ( P ) ANNEX 4. EFFICIENCY ANALYSIS 1. Overview Methodology at appraisal estimate. The economic evaluation for the original project at appraisal was carried out for two parts of the project: (i) evaluation of the periodic maintenance interventions (for provincial roads), and (ii) road improvement sub-projects (NR 1B & NR 6A). A conventional cost-benefit analysis (CBA) was carried out, using the Road Management System (RMS) which is supplemented by the Highway Development and Management Model (HDM-4) particularly for the provincial road maintenance part. Key benefits in both parts of the project were estimated from reductions of vehicle operating cost (VOC) and time savings, which resulted from improved road condition measured in terms of the International Roughness Index (IRI). The appraisal evaluation was based on the following key assumptions: (i) an analysis period of 24 years from 2009 to 2032; (ii) the discount rate of 12% per year; and, (iii) standard conversion factor (SCF) of 0.9 to determine economic costs, where information on tax is not available. Methodology for post-project economic analysis. The economic evaluation at project completion follows the same methodology as at appraisal utilizing HDM-4 results to support the conventional cost-benefit analysis. This is also because the project components remain largely unchanged since appraisal, and the implementing agency has been using the same methodology for its own overall planning. The key assumptions are: (i) an analysis period of 24 years from 2011 to 2034; (ii) a discount rate of 12% per year; and, (iii) standard conversion factor (SCF) of 0.92 for construction costs and 0.87 for maintenance costs (which is based on a study conducted during the project implementation) to determine economic costs more accurately. 2. Assumptions and components of the Cost-Benefit Analysis Project costs. The analysis considers actual civil works disbursements as the investment costs. Table A4.1 shows the cumulative disbursement of civil works by sub-component, which is taken from a series of IFRs. The CBA also assumes that routine maintenance is annually conducted to preserve road in good condition i.e. maintaining the IRI for the analysis period. The maintenance cost of US$387 per km per year is used, based on the updated costs by MPWT (for another project; LRSP2). Table A4.1: Cumulative disbursement of civil works by sub-component Description NRN 1B Improvement NRN 6A Improvement Bridge Construction PRN Periodic Maintenance Page 38 of 90

43 The World Bank Road Sector Project ( P ) The estimation of benefits is from the project s impact on VOC and VOT savings. Factors that affect VOC and VOT are: annual average daily traffic (AADT), growth rate, roughness (IRI), and VOC based on HDM-4. Traffic and growth. The following traffic data from MPWT was used as inputs to the cost-benefit analysis model (see Table A4.2). Most of the traffic is motorcycles, with more trucks on NR 1B. For provincial road maintenance, PROMMS data indicates vehicles per day for provincial and district roads. The AADT of 50 vehicles per day was used for the CBA. Table A4.2: Traffic counts for NR 1B and NR 6A Type of Vehicle NR 1B NR 6A Mini-tractor Motorcycle Light vehicle (Car) Bus Truck Vehicle operating costs. The analysis uses VOC produced by an updated HDM-4 Model. The results are in Table A4.3. The average VOC saving from improving the road from IRI of 16 to IRI of 4 is approximately US$0.17 per vehicle-km. The analysis uses actual differences for each of the vehicle type to determine the actual savings for national road improvement, while use the average VOC saving for provincial road maintenance. Table A4.2: Traffic counts for NR 1B and NR 6A IRI Motorcycle Mini-Tractor Car Pickup Small bus Medium bus Heavy bus Light truck Medium truck Heavy truck Truck trailer Cycle Value of time. Time saving is additional benefits. The average hourly wage of US$0.82 was used as a baseline in 2010 and assumed to grow at a real rate of 4%. Value of time saving was estimated based on improvement of Page 39 of 90

44 The World Bank Road Sector Project ( P ) speed, due to better road condition. 3. Evaluation Results The results of the evaluation are summarized in the following table in terms of EIRR and NPV of the original project at appraisal, for additional financing, and at completion. National Road 1B & 6A Provincial road maintenance PAD (2010) Additional Financing (2012) Completion (2017) EIRR (%) 16.5% / 13.6% 26.0% 28.1% NPV (US$ million) 1.6 / EIRR (%) 23% 27% 47.5% NPV (US$ million) Economic evaluations of NR 1B & 6A were conducted separately without a combined analysis, while the evaluation for the Additional Financing (AF) was conducted together. The EIRR of national road improvements is higher than at appraisal, and around the same value as with the AF. This is because the AF enhanced the national road improvement designs to be more climate resilient, which was additional benefits at additional financing stage. Also, the economic assessment at appraisal did not have sufficient information on (or was conservative about how) additional benefits that come from the connectivity of national and provincial roads. Extra costs and benefits come from avoided emergency maintenance. For the provincial road maintenance, both EIRR and NPV at completion are much higher than the estimates at appraisal. This is because the project could achieve 2,500 km of provincial road maintenance, versus the target of 1,600 km at appraisal. The benefits expand with scale. Page 40 of 90

45 The World Bank Road Sector Project ( P ) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS MPWT has provided their comments, which have been incorporated into the ICR. In addition, MPWT has also prepared its own ICR. Please see MPWT s ICR in the ANNEX 6. Page 41 of 90

46 The World Bank Road Sector Project ( P ) ANNEX 6. MPWT s ICR LAO PEOPLE S DEMOCRATIC REPUBLIC Peace Independence Democracy Unity Prosperity Ministry of Public Works and Transport Department of Planning and Cooperation LAO ROAD SECTOR PROJECT Project No. P (Grant No. H547-LA, No. H7890-LA and No. TF093083) IMPLEMENTATION COMPLETION REPORT March 2018 Page 42 of 90

47 ABBREVIATIONS AND ACRONYMS LRSP Implementation Completion Report ADB AF AFTA ASEAN AusAID AWPB BER CO CRM CSC DBST DD DESIA DG DIT DOI DOP DOR DOT DPC DPWT E&Y (Laos) EA EGDP EGPF EIA EMP EOI ESD ESOM FD FDI FM FMCBP FMM FMS GDP GFDRR GHG GMS GNI Asian Development Bank Additional Financing Asean Free Trade Area Association of South East Asian Nations Australian Agency for International Development Annual Work Plan and Budget Bid Evaluation Report Cabinet Office Community Road Model Consultant Selection Committee, of DOR Double Bitouminous Surface Treatment Disbursement Division, DOR, MPWT Department of Environmental and Social Impact Assessment, of MONRE Director General Division of Infrastructure and Transport, PTI Department of Inspection, MPWT Department of Personnel, MPWT Department of Roads, MPWT Department of Transport, MPWT Department of Planning and Cooperation, MPWT provincial Department of Public Works and Transport (at provincial level) Ernst & Young Laos Co. Ltd Environment Assessment Ethnic Group Development Plan Ethnic Group Policy Framework Environmental Impact Assessment Environment Management Plan Expression of Interest Environment and Social Division, PTI, MPWT Environment and Social Operations Manual Financial Division of DPC Foreign Direct Investment Financial Management Financial Management Capacity Building Project Financial Management Manual Financial Management System Gross Domestic Product Global Facility for Disaster Reduction and Recovery Green House Gas Greater Mekong Subregion Gross National Income i

48 LRSP Implementation Completion Report GOL Government of the Lao People's Democratic Republic HDM4 Highway Development and Management Model, Version 4 IA Internal Audit ICB International Competition Bidding ICCC Internal Control Coordination Committee ICD Internal Control Division, DOI, MPWT ICT Information and Communication Technologies IDA International Development Agency IEE Initial Environment Examination IFB Invitation for Bids IFI International Financial Institution IFR Interim Financial Report IOC Incremental Operating Cost IRI International Roughness Index IRR Internal Rate of Return ISWG Infrastructure Sector Working Group JBIC Japan Bank for International Cooperation Km Kilometer LAK Lao Kip LPB Luang Phabang province LRD Local Road Administration Division, DOR, MPWT LRSP Lao Road Sector Project LSRSP-3 Third Lao-Swedish Road Sector Project LTEC Lao Transport Engineering Consultant M&E Monitoring and Evaluation MMDD Manpower Management and Development Division of Department of Personnel MOF Ministry of Finance MONRE Ministry of Natural Resources and Environment MPWT Ministry of Public Works and Transport MTEF Medium-term Expenditure Frame Work, GOL NCB National Competition Bidding NOL No-Objection Letter NORAD Norwegian Agency for Development and Cooperation NR National Road NR National Road NR13N National Road 13 North NR13S National Road 13 South NRN National Road Network NRSC National Road Safety Committee NSEDP National Socio-Economic Development Plan NT-2 Namtheun 2 Hydropower Project NTSP National Transport Strategic Plan NUOL National University of Laos ii

49 LRSP Implementation Completion Report OC Office Cabinet (of MPWT) ODA Official Development Assistance OPWT district Office of Public Works and Transport (at district level) PAD Project Appraisal Document PAL Phase Alternate Line PAU Project Accounting Unit, LRSP PBC Performance Based Contract PDF Portable Document Format PFM Public Finance Management PFU Provincial Finance Unit PHRD Japan Population and Human Resource Development Fund PIP Provincial Infrastructure Project, funded by IDA PR Provincial Road PRN Provincial Road Network PRoMMS Provincial Road Maintenance Management System PRTP Participatory Rural Transport Planning PSL Phongsaly province PTI Public Works and Transport Institute, MPWT PTTC Public Works and Transport Training Centre, MPWT RAD National Road Administration Division, DOR, MPWT RAP Resettlement Action Plan RMF Road Maintenance Fund RMFAB Road Maintenance Fund Advisory Board RMP Road Maintenance Program RMP1 Road Maintenance Program, Phase 1 RMP2 Road Maintenance Program, Phase 2 RMS Road Management System ROW Rights of Way RPF Resettlement Policy Framework RSF Road Safety Fund RTIP Rural Transport Infrastructure Policy SAO State Audit Organization SBD Standard Bidding Document SDR Special Drawing Rights SEA Strategic Environment Assessment SEZ Special Economic Zone SGDR Safeguards Diagnostic Review SIDA Swedish International Development Agency SOE State Owned Enterprise STC Science and Technology Council STMQ Standard, Metrology, Testing and Quality SWAp Sector-Wide Approach TA Technical Assistance iii

50 LRSP Implementation Completion Report TED UCS UNIDO URMF USD VMC VOC VPD VTC VTP WB WREA Technique and Environment Division of DOR Use of Country System United Nations Industrial Development Organization Unified Road Maintenance Framework United States of America Dollars Village Maintenance Committee Vehicle Operating Cost Vehicles Per Day Vientiane capital Vientiane province World Bank Group Water Resource and Environment Administration, Lao PDR iv

51 LRSP Implementation Completion Report TABLE OF CONTENTS Page ABBREVIATIONS AND ACRONYMS i 1. INTRODUCTION 1 2. PROJECT CONTEXT, DEVELOPMENT OBJECTIVE AND DESIGN 2 3. COST ALLOCATION AND DISBURSEMENTS 5 4. DETAILED OUTCOMES Road Network improvement and preservation Network Upgrading 7 A.1.a National Road 1B (NR1B) 7 A.1.b National Road 6A (NR6A) including construction of seven bridges 8 A.1.c Resettlement 10 A.1.d Supervision consultants 10 A.1.f Monitoring and evaluation Provincial Network Maintenance 10 A.2.a Periodic maintenance and spot improvements 10 A.2.b Supervision 10 A.2.c Capacity building Road Safety 11 A.3.a Road safety goods 11 A.3.b Road safety awareness and capacity building Institutional Strengthening Strategic management 11 B.1.a Strategic management advisory and capacity development 11 B.1.b Advisory services for provincial and rural management 11 B.1.c ICT development 12 B.1.d URMF data collection 12 B.1.f Fiduciary support ESOM 12 B.2.a ESOM preparation 12 B.2.b Environment, social and safeguard monitoring Internal controls 13 B.3.a Advisory services and training for internal control division 13 B.3.b Technical audit 14 B.3.c Financial audit 14 B.3.d Capacity building 14

52 LRSP Implementation Completion Report Provincial capacity development Disaster Recovery and Contingency ASSESSMENT OF OUTCOMES PERFORMANCE ECONOMIC ASPECTS ENVIRONMENTAL AND SOCIAL ASPECTS LESSONS LEARNED 25 APPENDIXs: Appendix A Project Result Framework Appendix B Progress of seven bridges construction Appendix C Supervision consultants quarterly progress report as at December 2015 Appendix D Provincial road maintenance contracts Appendix E Traffic Safety Appendix F List of counterpart payables as at 30 September 2017

53 LRSP Implementation Completion Report 1. INTRODUCTION The transport sector in Lao PDR is dominated by the road sub-sector, which represents 98% of total passenger km traveled, and 86% of freight moved in the country. Road transport remains at the core of the country s policy from land-locked to land-linked and central to economic development and poverty reduction. Therefore, the road network is the key priority for the transport sector, linking people to resources, markets, and public services. The total length of the road network reported is 37,552 km, of which 7,019 km is national roads, and 29,468 km is local roads. Urban road amounts to 718 km and around 166 km is Special roads. Table 1: Road Length (Km) by Road Classes and Provinces from RMS Statistics, 2016 Source: RMS Database, 2016 Page 1 of 94

54 LRSP Implementation Completion Report A graphical distribution of the share of each road class is provided in the figure 1 below which shows that rural road network covers around 46% of the total road length. While national and provincial road network shares about 19% and 18% of the total length respectively. Urban road and Special road share small portion of total road length. Figure 1: Proportion of Lao Road Network by Road Classes from RMS statistics, 2016 Source: RMS Database, 2016 The road sector is under the overall jurisdiction of the Ministry of Public Works and Transport (MPWT). With the ongoing devolution of responsibilities, MPWT has progressively delegated maintenance and operational tasks for local roads (Provincial, District, and Rural roads) to the Department of Public Works and Transport (DPWT) of each province, while retaining a mandate for policy making, financing, strategic planning, oversight, and management for the road sector. Maintenance and operational tasks for National roads remain with MPWT. Lao Road Sector Project (the Project) is capitalized on the institutional outcomes achieved from previous operations, especially the Bank-led, multi-donor funded Road Maintenance Program Phase 1 and 2, and add value through financing crucial physical investment, and supporting the strategic planning, design, preparation, implementation, and management of road infrastructure in an environmentally and socially responsible manner. The Project is also built on the MPW s continuing effort in aid harmonization, the Project is a pilot use of country system (or sector wide approach) for environmental assessment, the establishment of internal audit function, the strengthening of fiduciary management systems especially at the provincial level, and the establishment of an emergency contingency fund for repaid response to disasters. All these are designed as relevant supporting functions to improve the effectiveness of physical investments and delivery of road services to the people. The Project is fully consistent with the World Bank s Country Assistance Strategy (CAS) for Lao PDR. It supports one of the main CAS pillars of sustained growth through enhanced regional Page 1 of 25

55 LRSP Implementation Completion Report integration and private sector development, and to a lesser extent, one of the supporting CAS objectives regarding better alignment of donor resources with the objectives of the Government s National Growth and Poverty Eradication Strategy and strengthened aid coordination. In line with these objectives, the Project supports the country s economic growth and poverty reduction through: (i) reducing road transport costs for goods and passengers; (ii) rehabilitating the road damaged by Typhoon Ketsana; and (iii) developing an emergency contingency fund for rapid response to natural disasters in the road sector. Support to the second CAS objective is mainly through the strengthening of the MPWT s systems for strategic planning, fiduciary management, and environmental safeguards, which are required for achieving better aid harmonization and coordination. 2. PROJECT CONTEXT, DEVELOPMENT OBJECTIVE AND DESIGN Lao PDR has received initial financing from the International Development Association (IDA) and grant co-financing from the Policy and Human Resources Development Fund (PHRD) of Japan toward the cost of the Project as follows: Grant No. H547-LA as per the Grant Agreement dated 2 April 2010 between the IDA and the Government of Lao PDR (GoL), as represented by the Ministry of Finance: USD 27.8 million. GoL contributes to the Project via Road Maintenance Fund (RMF) USD8 million and Government budget USD6.38 million, the total of Lao PDR contribution to Project is USD14.38 million, the grant total of Project cost is USD43.18 million. Grant No. TF as per the Grant Agreement dated 17 May 2010 between the Government of Japan under the PHRD, as represented by the IDA, and the GoL, as represented by the Ministry of Finance: USD 1 million. To address the cost overrun that resulted from design changes to enhance the disaster resilience of the two national roads sections, discrepancies in the original design of these two roads and also to scale up project impact by: (a) enhancing the disaster resilience of two national roads and priority sections of the provincial network; (b) further strengthening the institutional capacities of the MPWT; and (c) topping up the emergency contingency fund, depleted following rehabilitation efforts in 2011, World Bank approved additional funding to the Project through Grand No. H7890-LA as per the Grant Agreement dated 8 August 2012 between the IDA and the GoL, as represented by the Ministry of Finance: USD 21 million. GoL also contributes to the Project via RMF USD7.2 million and Government budget USD6.3 million, the total of Lao PDR contribution as additional to Project is USD13.5 million, the grant total of Project cost for this additional is USD34.50 million. The Project is implemented by MPWT for the period from 1 July 2010 to 30 September The Project development objective (PDO) are: (i) to improve road services on two main national corridors and the provincial road network; (ii) to recover the conditions of Typhoon Ketsana damaged roads; and (iii) to establish a contingency fund for quick disaster response in the road sector. Page 2 of 25

56 LRSP Implementation Completion Report The achievement of the objective will be measured by the following key outcome indicators by the end of the Project: Reduced travel time on upgraded roads (on NR1B reduced by 40% and on NR6A by 50%); Increased number of people connected by paved roads (at least 26,500 people, including 49% of females, mostly living by the roadside will be served by paved road along NR1B and NR6A); Increased percentage of provincial road network in good and/or fair condition (by increasing from 46% to 65%); Recovered conditions of Typhoon Ketsana damaged roads (about 60% of the damaged roads repaired and improved); and An emergency contingency fund established for quick restoration of passability and safety of disaster affected national and provincial roads. The Project comprises three main components: Component 1: Road Network Improvement and Preservation (total USD million; of which IDA of USD million, GoL s RMF of USD million and GoL contribution of USD million), which finances physical works for the upgrading of two national roads, 6A and 1B in Phongsaly and Houaphan Provinces respectively, the periodic maintenance of the provincial road network, and road safety improvements. Component 2: Institutional Strengthening (total USD 6.03 million; of which IDA of USD 5.03 million and PHRD of USD 1 million), which provides technical assistance to both the MPWT and the DPWT in the areas of sector strategic management, local road management, country systems for environmental safeguards, fiduciary management, and internal controls. Component 3: Disaster Recovery and Contingency (IDA of USD million), which funds spot rehabilitation and periodic maintenance of roads damaged by Typhoon Ketsana in the five affected southern provinces, and supports an emergency contingency fund for quick disbursement of emergency civil works and construction materials ensuring the possibility and safety of affected national and provincial road links following a natural disaster. Page 3 of 25

57 LRSP Implementation Completion Report Figure 2: Project Location Map Page 4 of 25

58 LRSP Implementation Completion Report 3. COST ALLOCATION AND DISBURSEMENTS The Project cost was estimated at USD77.68 million, of which IDA financing constitutes USD48.80 million equivalent and Government contribution through RMF of USD15.20 million, and Ministry of Finance and Provincial State Budget (GoL) of USD million. The Government contribution for National Roads improvement at 30% and at 75% of total contracts for Provincial Roads maintenance. Table 2: Project cost by component and source of fund USD million Original Project costs Additional Project costs Total Proje Component PHD Tota GoL RMF IDA Total GoL RMF IDA ct R l costs 1. Road Network Improvement and Preservation Institutional Strengthening Disaster Recovery and Contingency TOTAL The Project s first restructuring was approved by the Bank on 9 September 2014 to cover costs incurred during the upgrading National Road 6A (NR6A), and address the deterioration to sections of National Road 1B (NR1B) caused primarily by unexpected severe rains and landslides while the second restructuring was approved by the Bank on 14 March 2017 to cover costs incurred for Technical Supervision during the upgrading NR6A and address the deterioration to sections of NR1B. The revised Project costs and total actual accumulated disbursements as at 30 September 2017 are shown as follows: Table 3: Revised Project costs and actual accumulated disbursements USD million Revised Project costs Actual accumulated disbursements Component PHR PHR Tota GoL RMF IDA Total GoL RMF IDA D D l 1. Road Network Improvement and Preservation 2 2. Institutional Strengthening Disaster Recovery and Contingency TOTAL Due to fluctuating XDR rate, actual receipts from the AF were only USD20.7 million out of USD21 million which valued on the Grant signing date. Therefore, some minor works have to be eliminated. Page 5 of 25

59 Table 4: Details of actual project disbursements as at 30 September 2017 LRSP Implementation Completion Report No Description Cumulative to 30 September 2017 GoL RMF IDA PHRD Total A Road Network Improvement and 15,220, ,715, ,434, ,060, Preservation 8 6 A.1 Network Upgrading 9,540, ,749, ,290, A.1.a NR1B 5,758, ,289, ,048, A.1. b NR6A including bridge constructions 3,407, ,778, ,186, A.1.c.i Resettlement for 1B 46, , A.1.c.ii Resettlement for 6A 328, , A.1.d.i Construction Supervision for 1B - 2,619, ,619, A.1.d.ii Construction Supervision for 6A A.1.f Monitoring and Evaluation , , A.2 Provincial Network Maintenance 1,893, ,220, ,930, ,816, A.2.a PRN Maintenance 1,893, ,220, ,815, ,700, A.2.b Construction Supervision , , A.2.c IOC For Provincial and DoR/DoF M&E , , A.3 Road Safety - - 1,494, ,494, A.3.a Road Safety Goods - - 1,324, ,324, A.3.b Road Safety Awareness , , B. Institutional Strengthening - - 5,661, , ,604, B.1 Strategic Management - - 3,222, , ,229, B.1.a Strategic Management Advisory Services & Capacity Development - - 1,397, , ,404, B.1.b Advisory Services for Provincial and Rural Management , , B.1.c ICT Development , , B.1.d URMF Data Collection , , B.1.e Unit Cost Analysis B.1.f DPC Fiduciary Support , , B.2 Advisory Services and equipment for ESOM Implementation , , B.3 Internal Controls - - 1,204, ,204, B.3.a Advisory Services for Internal Controls - - 1,002, ,002, B.3.b Technical Audit B.3.c Financial Audit , , B.3.d Internal Operating Costs , , B.4 Provincial Capacity Development , , ,435, C. Disaster Contingency, Mitigation and Preparedness ,622, Page 6 of 25 10,622, C.1 Recovery of Ketsana Damaged Roads - - 6,925, ,925, C.1.a Recovery Civil Works - - 6,925, ,925, C.1.b Engineering Supervision C.1.c Incremental Operating Costs C.2 Disaster Contingency Fund - - 3,696, ,696, TOTAL PROJECT COST 11,434, Source: Interim Unaudited Financial Report as at 30 September ,220, ,343, , ,942,

60 LRSP Implementation Completion Report Page 7 of 25

61 LRSP Implementation Completion Report 4. DETAILED OUTCOMES Overall the Project is meeting its development objectives satisfactorily as follows, however, a number of important lessons learned, as described in No. 9, from the implementation should be addressed in preparation of next projects: Four of five PDO Level Result Indicators have met and exceeded the target values. Target Values of Intermediate Result Indicators on road network upgrading and provincial road maintenance have been substantially met and exceeded. Most of the Intermediate Result Indicators on Institutional Strengthening meet their target values. Strategic Planning and Management Final Report has been utilised as one reference to produce the Sector 8th Five-Year Plan ( ), which has been approved by the Ministry. The Sector Plan has been incorporated in the 8 th National Socio-Economic Development Plan. Internal Control Function has been expanded, since there are now Internal Control sections and divisions in 17 provinces, 8 departments, 2 sub-departments and 2 State Owned Enterprise (SOE), Lao Airlines. The feasibility study of PPP Pilot Project has been completed, and the recruitment of consulting firm to undertake additional E&S survey on Road No. 13N is under process. The full report to the government will be made once the survey becomes completed. The first payment made to contractors for disaster recovery after its declaration doesn t meet the target due to the process of seeking contractors & other documentation steps. (Please refer to Appendix A: Project Result Framework). Detailed outcomes per components are summarized as follows: 4.1 Road Network improvement and preservation Network Upgrading A.1.a National Road 1B (NR1B): Performed by China Yunnan Sunny Road & Bridge Co., Ltd: the Taking Over Certificates for Lot 1 (Km 0-54) and Lot 2 (Km 54-88) have been issued by the Engineer on 11 September 2014 after no objection from Inspection Committee, 100% of payment (including retention money) of Lot 1 and Lot 2 were fully paid. Taking Over Certificate for section Km have been issued on 7 August 2015, and which the Defects Liability Period has expired in August Taking Over Certificate for repairs and mitigation works for sections from Km to , and from Km to has been issued on 5 January 2017 while the Defects Liability Period has expired on 24 July Payment for retention money was made in June Figure 3: National Road 1 B Page 8 of 25

62 LRSP Implementation Completion Report Upon ending of defects liability period which was 2015, RMF allocated its budget for routine maintenance as follows: A.1.b National Road 6A (NR6A) including construction of seven bridges: Upgrading NR6A: Performed by SCC-ADC-DSC Joint Venture: the road works have been completed with a few defects which have been inspected by MPWT Defects Liability Committee in September Minor repairs in 6 small locations which have been completed by the contractor in September Taking Over Certificates have been issued and payment for remaining 50% of retention money has been made in March Figure 4: National Road 6A Page 9 of 25

63 LRSP Implementation Completion Report Construction of seven bridges on NR6A: Performed by Civil Engineering Construction Joint Stock Company N0. 525: all seven bridges have been completed with the extension of contract period from 15 August 2015 to 30 December 2015 due to disruption of works caused by heavy rainfalls that flooded Nam Long from June The Taking-over certificate has been issued on 2 March Final payment for construction cost including the first 50% of retention money cost was paid in August 2016 while the remaining 50% will be made in October Figure 5: Nam Ma bridge in National Road 6A Table 5: Name and length of seven bridges No. Bridge Name Length (m) 1 Nam Ma Nam Long Huay Bor Huay Huang Huay Mone Huay Dik Huay Yang 25.0 Please refer to Appendix B for details of above seven bridges. A.1.c Resettlement: All resettlements on NR1B and NR6A were fully paid by GoL in accordance with Law and Regulations prior to the start of constructions. Page 10 of 25

64 LRSP Implementation Completion Report A.1.d Supervision consultants: SweRoad in association with WSP and Burapha were assigned as supervision consultant for road upgrading on National Roads 1B and 6A, The Consultant has also assisted DoR in reviewing the detailed bridge designs and Drawings, including bidding documents, for the 6 small bridges and Nam Ma bridge in NR6A which were prepared by LTEC. LTEC, under a separate contract with MPWT, has carried out the topographic surveys, geotechnical investigations, detailed design of the 7 bridges in NR6A. Draft bidding documents, including Drawings and BOQ have been submitted by LTEC to DOR and copied to World Bank. The Team Leader and his team have reviewed LTEC s design of the bridge structures including their foundations and confirmed/modified to comply with the technical standards and AASHTO LRFD bridge design specifications. He also assisted LTEC in preparing the bidding documents and specifications for the steel structures. Please refer to Appendix E for the final quarterly report of consultant as at December A.1.e Monitoring and evaluation: Monitoring and evaluation was performed by Project managers who were assigned by DoR to carry out day-to-day monitoring together with supervision consultants Provincial Network Maintenance A.2.a Periodic maintenance and spot improvements: As at 30 September 2017, more than 2,400 km of provincial road have received spot improvement and periodic maintenance under the Project (see Appendix D for provincial road maintenance contracts). Furthermore, in order to cope with the maintenance needs while preventing the road network from further deteriorated and not to lose the momentum while those needs have already been prioritized systematically for the 3-Year Rolling Plan, DoR therefore has received approval by minister for continuing to allocate fund from RMF amount to LAK 41, million, covering 18 maintenance contracts for provincial roads, with total length of about km, spreading allover 18 provinces countrywide. A.2.b Supervision: Supervision was performed by MPWT and DPWT staffs who were assigned by DoR to carry out day-to-day supervision together with provincial and rural management consultants. A.2.c Capacity building: To further strengthen DPWT in managing provincial roads maintenance, a training has been provided to six provinces on planning, supervision, and contract management. DOR conducted the technical trainings using the remaining training budget and IOC for 12 provinces (Northern and Southern parts) in September Road Safety A.3.a Road safety goods: Package 1 for mitigation of traffic accidents in Vientiane Capital of USD0.58 million and Package 2 for road furniture, road marking and signage on NR13N amounting to USD0.81 million was fully installed. The final 10% payment for Package 2 was made in February A.3.b Road safety awareness and capacity building: The public campaign in Vientiane Capital and traffic management training have been successfully completed while the speed management training had been postponed from November 2015 to January 2016 due to the readiness of AIT. However, the speed management training had been again postponed and conducted on June 2016 while the awareness raising was shifted from NR13N to NR1B and NR6A which expects to be Page 11 of 25

65 LRSP Implementation Completion Report carried out in October-November Due to the minimal readiness of the communities, the actual implementation is reset to perform in February Procurement for the safety capacity assessment consultant, who will help on updating traffic regulation and fine decree and PRSC workshops are postponed due to the budget constraints (see Appendix E for details). 4.2 Institutional Strengthening Strategic management B.1.a Strategic management advisory and capacity development: Strategic Planning and Management (SPM) Consultant Services: Strategic Planning and Management Final Report has been utilized as the basis to produce the Sector 8th Five-Year Plan ( ), Strategy up to 2025 and Vision up to The Five-Year Plan (FYP) in Lao version has been finalized and received the minister s approval. The available edition of the FYP can be shared to all development partners. Public-Private Partnership (PPP) financing of roads: ToRs for individual consultants and a firm on ESIA, RAP and EGDP have been completed. Two individual consultants have been on board since July 2016, however, due to budget constraint resulting delays in procuring a consulting firm to perform additional surveys. Therefore, all E&S related studies were carried out under Lao Road Sector Project 2. MPWT reported the progress of PPP to the government on 11 August 2016, and it has been agreed that a full report, including response to government enquiries on 7 issues, from MPWT to the government on the way to have PPP moving forward will be prepared. At current stage, MPWT is in the process of preparing new project, Lao National Road 13 Improvement and Maintenance Project, using one of PPP concept as Output and Performance-Based Road Contract (OPBRC). B.1.b Advisory services for provincial and rural management: Maintenance monitoring consultant has been recruited for day-to-day monitoring of provincial periodic maintenance and spot improvements. B.1.c ICT development: The design and development of ICT tools to support road asset management, Integrated Road Asset Management System (IRAM or system), is completed and testing was performed in June July ICT Steering Committee has reviewed and approved the IRAM. Training for users was conducted in February 2016 and the system has been officially operated in May Procurements of ICT equipment for two packages have been completed and payments were fully made to the contractors. B.1.d URMF data collection: Annual Road Asset Report for FY 14/15 was submitted to DoR, DPC and WB in November The condition survey for national roads for FY 15/16 including data collection, with limited budget of USD20 thousand, was completed in March 2016 and its analysis has been completed in May Data input, validation and analysis of road condition for local roads was completed and Annual Road Asset Report for FY 15/16 was issued in March B.1.f Fiduciary support: At the first stage of the Project, this role was under DPC and later under DoF since it was established in MPWT together with WB developed the Internal Financial Manual of MPWT which was approved by Minister in 2010 and revision was made in September 2017 (including Standard Operating Procedures) by assisting of National Coordination and FM Page 12 of 25

66 LRSP Implementation Completion Report Consultants. New version of APACC (and accounting software) was upgraded and used as the Project software in recording financial information and generating financial reports such Interim Financial Reports (IFRs), financial statements and etc. At the first year of Project implementation, there were poor quality and delays submission of the IFRs and Project audit reports. The quality of the IFRs and timing of submission of both IFRs and audit reports continued to improve after the second year of implementation. The audit opinions were unqualified (clean) throughout Project implementation. From June 2015, the Project recruited a National Coordination Adviser and three Financial Management Advisers to advise the Project in coordination and financial management including revision of Internal Financial Manual. As all of the staffs working on the financial management of the Project were staffs of MPWT and DPWT, the Project was instrumental in improving the overall capacity of ministry and provincial staffs to manage the finances of ODA projects ESOM B.2.a ESOM preparation: PTI has finished its translation of ESOM to English version and already submitted to the Bank for comments in early October Upon receiving comments from the Bank, PTI will revise and collaborate with the Council of Science and Technology in preparation to seek the minister s approval on the revised ESOM. However, The Bank will review the ESOM in parallel with safeguard preparation for the new project to ensure consistency. As recommended by the Bank, ESD/PTI and TED/DOR completed submission work plan on E&S monitoring for provincial road maintenance to the Bank. However, it was cancel due to the WB keep priority to the preparation safeguards framework for LRSP 2 (ESMF, RPF, EGPF) which is urgent needed to submit to head quarter. B.2.b Environment, social and safeguard monitoring: The E&S monitoring (completion report) of NR1B and NR6A, and of provincial road maintenance have been completed. Random visit to verify the safeguard compliance for the provincial road maintenance projects of five Northern provinces (Xayabuly, Bokeo, Luangnamtha, Oudomxay and Phongsaly) during December 2015 with no major issues were noticed. PTI also completed safeguard training in Laung Prabang for 8 DPWTs in January ESD/PTI conducted several consultation for preparing safeguards framework for LRSP 2 such as: i) the first consultation was made in Vientiane on 25 February 2016 to inform the public and key agencies about the objective and scope of the Project as well as the draft TORs for the ESMF, RPF, and EGPF while the second consultant was made in Vientiane on 29 April 2016 on the draft ESMF, RPF, and EGPF; ii) two consultations were also made in the Bolikhamxay and Xayabuly. The first consultation in BKX and XBL were made in 04 to 11 of March 2016 to describe scope of the subprojects to be carried out in the provinces, consult the draft TORs for ESMF, and RPF as well as collect baseline data to identify if ethnic groups are present in the subproject areas and/or possible effected people and/or property that may be affected by the subprojects; iii) the second consultation which was conducted in XBL during April 2016 and in BKX in April Results for the second consultation confirmed strong support for the project as well as the ESMF, RPF, and EGPF to be applied to the Project; and iv) additional consultation has conducted for concerned provincial departments in Houaphan and Oudomxay during 28 June and 9 July Internal controls Page 13 of 25

67 LRSP Implementation Completion Report B.3.a Advisory services and training for internal control division: Financial audit manual, financial audit working papers, technical audit manual, technical audit working papers, quality assurance guidance, strategy for internal auditing plan, and strategy for financial management system in English, which produced by Nanjing Audit University, have been completely translated into Lao language while the first workshop has been conducted on August 2016 for gathering comments from nationwide inspectors of MPWT (by using GoL s budget) and second was made in December 2016 for 9 northern provinces while for 9 southern provinces was made in January DoI completed its procurement for equipment and vehicles to six provinces in August 2015 and distribution to those provinces were also completed. A national coordination advisor and three financial management advisors have been on board since June 2015 while another two internal control consultants are now postponed and recruited under new project (Lao Road Sector Project 2). All internal control weaknesses identified by Ernst & Young in Internal Control Assessment Report dated 21 December 2012 and certain internal control weaknesses that highlighted in the Management Letter for the year ended 30 September 2014 by EY have been fully implemented. B.3.b Technical audit: The consultant for technical audit of NR6A, NR1B and provincial roads has been on board since May The consultant has been completed his technical audit report in September During the nationwide workshop for inspection sectors, which held in September 2015 at Vangvieng of Vientiane Province, the Consultant completed his introduction to Quality Assurance and Control. B.3.c Financial audit: Ernst & Young Lao Co., Ltd is the external auditor for the whole period of the Project. Although certain delays in submission of audited reports, however, the audit opinions were unqualified (clean) throughout Project implementation. The final audit was carried out in January 2018 and now is process of signing and the audited reports will be submitted to World Bank in March B.3.d Capacity building: Nationwide workshop for inspection sectors was held in September 2015 at Vangvieng of Vientiane Province with approximated 100 participants to introduce new Prime Minister Decree PM01/PM dated 6 January 2015 mandates the internal control division of the relevant department at central and provincial level to review all new contracts before these are signed. First workshop, (on Financial audit manual, financial audit working papers, technical audit manual, technical audit working papers, quality assurance guidance, strategy for internal auditing plan, and strategy for financial management system), has been conducted on August 2016 for gathering comments from nationwide inspectors of MPWT (by using GoL s budget) and second was made in December 2016 for 9 northern provinces while for 9 southern provinces was made in January Provincial capacity development: The capacity development plans were focused on enhancing ministerial, provincial and district capacities for equality control, financial and contract management. Total 2,042 participants (286 females and 1,756 males) including 727 participants from Ministry, 1,089 from provinces and 226 from districts were trained during the Project period. Page 14 of 25

68 LRSP Implementation Completion Report 4.3 Disaster Recovery and Contingency: It has been agreed in a follow-up meeting on Agreed Actions that DOR with a support from DOF and DPC will draft the Standard Operating Procedures (SOP) for the management of the emergency contingency fund. The third drafted SOP for the Emergency Response and Disaster Recovery Fund has been reviewed and commented by DoR and DoR who agreed in principles on the fund allocation, scope of the use and activation procedures. Final draft has been completed and attached to the Internal Financial Manual which approved by Minister on 8 September ASSESSMENT OF OUTCOMES Project Development Objective The Project development objective (PDO) are: (i) to improve road services on two main national corridors and the provincial road network; (ii) to recover the conditions of Typhoon Ketsana damaged roads; and (iii) to establish a contingency fund for quick disaster response in the road sector. Project Outcome Indicators 1) Vehicle travel time on upgraded NR1B reduced by 40%; 2) Vehicle travel time on upgraded NR6A reduced by 50%; 3) At least 26,500 people (49% females) mostly living by the roadside will be served by paved road along NR1B and 6A; 4) Share of provincial road network in good and fair condition (by Lao standards) increased from 46% to 65% 5) About 60% of the Typhoon Ketsana damaged roads repaired and improved; 6) Standard operational procedures for the management of the emergency contingency fund functional Project beneficiaries (309,400 people including 157,794 female) Use of Project Outcome Information For decision makers to gauge effectiveness of the Government s program for road sector management, and to make decisions for actions required to improve the effectiveness. Assess impact of improved national and provincial road networks and effective transfer of benefits to road users. ICR outcome note: 1) Travel time on NR1B is 2.5 hours or reduced by 50% as per observation during mission on January 2017; 2) Travel time on NR6A is 50 minutes or reduced by 72% as per observation during mission on February 2017; 3) 116,581 people (44% female). 23,371 people (11,438/49% female) of 52 villages living along NR1B and 93,210 people Page 15 of 25

69 LRSP Implementation Completion Report (40,022/43% female) of 3 districts living along NR6A; 4) Provincial road network in good and fair condition increased to 73% based on received ProMMs data. The figure might not reflect real condition of the road network due to the ineffectiveness of data collection; 5) Achieved 55% and the remaining 45% was taken up by GoL and other sources of funding; 6) The Standard Operating Procedures ( SOP ) for the Emergency Response and Disaster Recovery Fund has been prepared and attached to the Internal Financial Manual which approved by Minister on 8 September Total 467,863 beneficiaries (230,858 female) Intermediate Outcomes Intermediate Outcome Indicators Use of Intermediate Outcome Monitoring Intermediate Result 1: Network Improvement and Preservation 1. Road conditions on national roads 1B and 6A substantially improved: upgrading of 109 km NR1B and 62 km NR6A km of national roads (NR1B and NR6A) upgraded with disaster resilience standard. Monitor implementation progress and formulate action plan to address possible delays on NR1B and NR6A. ICR outcome note: Objective is met; all 171 km including seven bridges was fully completed. 2. Road conditions improved on selected provincial roads: periodic maintenance on priority sections of 2. About 2,100 km of provincial roads preserved through periodic maintenance Monitoring implementation progress and formulate action plan to address possible delays for maintenance on Page 16 of 25

70 LRSP Implementation Completion Report the provincial road network. 3. Safety pedestrian and road users improved on targeted roads: support to National Road Safety Strategy. 3. Road safety facilities acquired and installed as per specifications police officers, local authorities, community members and teachers and students exposed to road safety training and awareness raising activities in 3 pilot provinces. Intermediate Result 2: Institutional Strengthening 4. MPWT capacity for 5. Knowledge and practical sector strategic experience acquired on planning and transport sector strategic management planning and strengthened and management. National streamlined: strategic plan updated and management of expanded. transport sector. 5. Country system for environmental assessment adopted and enhanced: strengthening of safeguard capacity. 6. Enhanced knowledge and practical experiences gained on safeguard management. Country systems used for EA and staff trained. priority sections of provincial road network. ICR outcome note: Objective is met; 2,500 km of provincial road network received maintenance. In addition, GoL allocates its budget from RMF to continue provincial maintenance approximately 300 km in year 2016/17 Monitoring implementation progress for road safety facilities acquisition and installation. ICR outcome note: 3. Objective id met; fully installed facilities participants and 10 observers. Assess the completion status and impact of technical assistance. Use continued knowledge acquisition for sector strategic planning and management. ICR outcome note: The final edition of Sector Five-Year Plan produced and approved. Assess the completion status and impact of technical assistance. Use continued knowledge acquisition for safeguard capacity development. ICR outcome note: 256 provincial and district engineers received ESOM Page 17 of 25

71 LRSP Implementation Completion Report 6. Internal control system established and functional: strengthening internal controls. 7. Provincial Department capacity further strengthened: Provincial Department capacity development. 7. Acquire knowledge and experience on internal control, Internal audit function established and functional. 8. Knowledge enhanced and practical experiences gained on fiduciary management and contract management at the provincial level training. ESOM in English version shared to the Bank for comments. Trainings on ESOM will be postponed to the LRSP 2. Assess the completion status and impact of technical assistance. Use continued knowledge acquisition for internal controls. ICR outcome note: Internal control sections established in 17 provinces and internal control divisions in 8 departments, 2 subdepartments and 2 SOEs. Assess the completion status and impact of technical assistance. Use continued knowledge acquisition for provincial capacity development. 8. PPP Unit established. 9. PPP Unit established. 10. Feasibility study for two PPP pilot road sections ICR outcome note: 2,042 people (286 females) received trainings and workshops. Assess the completion status and impact of technical assistance. Use continued knowledge acquisition for PPP. ICR outcome note: 9. Steering Committee established. PPP implementation responsibility is with DoR, and coordinating responsibility will remain with DPC. 10. Feasibility study is completed. MPWT to compile a full report to the government Page 18 of 25

72 LRSP Implementation Completion Report Intermediate Results 3: Disaster Recovery and Contingency 9. The conditions of 11. About 1,100 km of Typhoon Ketsana Ketsana damaged roads damaged roads (including small and restored and improved: wooden bridges) repaired Spot rehabilitation and and improved as per periodic maintenance specifications. of Ketsana Damaged Roads. 10. Disaster response capacity enhanced: Emergency contingency fund. 12. Length of time between declaration of disaster and the first payment to contractors for emergency works shortened (time of payment shortened to less than 6 month). after the completion of additional E&S study which will be carried out under LRSP 2. Monitoring implementation progress and formulate action plan to address possible delays on NR1B and NR6A. ICR outcome note: Target achieved. Assess the time required for payments made to contractors who carried out the emergency works. ICR outcome note: Time of payment for Typhoons Ketsana and Nok Ten on average about 10 months. Due to the lack of fund in each financial year, first payment for disaster recovery works in just been made in Aug Documentation process to obtain the payment not complicated. For the WB disaster & emergency fund took about 10 months on average for the first payment to be made. 6. PERFORMANCE Overall performance on a Project may be weighed against the following criteria: Relevance Effectiveness Efficiency Page 19 of 25

73 LRSP Implementation Completion Report Sustainability Where the weighings are 20%, 30%, 30% and 20% respectively. Scorings: Highly satisfactory > 2.7; satisfactory 2.7>S>1.6; partly satisfactory 1.6>PS>0.8; unsatisfactory<0.8. The performance of the Bank and Borrower were based upon the above criteria. 6.1 Bank s Performance Relevance in continuation of the institutional outcomes achieved from previous operations, especially the Bank-led, multi-donor funded Road Maintenance Program Phase 1 and 2, and add value through financing crucial physical investment, and supporting the strategic planning, design, preparation, implementation, and management of road infrastructure in an environmentally and socially responsible manner. The Project is also built on the MPW s continuing effort in aid harmonization, the Project is a pilot use of country system (or sector wide approach) for environmental assessment, the establishment of internal audit function, the strengthening of fiduciary management systems especially at the provincial level, and the establishment of an emergency contingency fund for repaid response to disasters. All these are designed as very relevant supporting functions to improve the effectiveness of physical investments and delivery of road services to the people. The Project is fully consistent with the World Bank s Country Assistance Strategy (CAS) for Lao PDR. It supports one of the main CAS pillars of sustained growth through enhanced regional integration and private sector development, and to a lesser extent, one of the supporting CAS objectives regarding better alignment of donor resources with the objectives of the Government s National Growth and Poverty Eradication Strategy and strengthened aid coordination. Effectiveness the Bank is rated highly effective in achieving its targeted outcomes. The interrelationship of the Bank s staff and consultants with those of the MPWT proved most positive in the development and implementation of the Project. The Bank s dealings with MPWT and outcomes of its missions through the Aide Memoire were effective in progressing the satisfactory outcome of the Project as well as leading cross donor co-operation through bi-annual meetings and promoting the Infrastructure Technical Working Group which involves MPWT and most of the Development Partners. Efficiency the efficiency of the Bank is demonstrated in its interactions with the MPWT regarding processing of procurement approvals for both consultants and civil works, revisions to the Project affecting the scheduling of consultants for the capacity building component, time in replying to queries, etc the Bank s rating in this respect is considered as efficient. Sustainability the Bank continues support with further funding to Lao Road Sector Project 2 ( LRSP2 ) with co-financing from Nordic Development Fund and Government of Lao PDR through Road Maintenance Fund s budget and Provincial State budget. LRSP2 is supporting sector institutional development through the preparation of financing and policy frameworks, the sector Page 20 of 25

74 LRSP Implementation Completion Report strategic plan, improved governance systems, and development of technical capacity to maximize the effectiveness of public expenditure in the sector. In addition, the Bank s commitment to sustainability is demonstrated by its continuing association with MPWT through the preparation of the Lao National Road 13 Improvement and Maintenance Project ( NR13 project ) with the purpose of climate resilient upgrade and improvement of 58km on NR13 North from Vientiane to Phonhong, a critical stretch serving high traffic volumes. The works and maintenance will be carried out through the implementation of an Output and Performance-Based Road Contract (OPBRC) the Bank commitment to sustainability of the Lao road networks is rated sustainable. Score: Relevance (20%) = 2.8 Effectiveness (30%) = 2.8 Efficiency (30%) = 2.4 Sustainability (20%) = 2.4 Overall rating = 2.6 The Bank s performance is rated as satisfactory. 6.2 Borrower s Performance Relevance - The Project supports the country s economic growth and poverty reduction through: (i) reducing road transport costs for goods and passengers; (ii) rehabilitating the road damaged by Typhoon Ketsana; and (iii) developing an emergency contingency fund for rapid response to natural disasters in the road sector. Support to the second CAS objective is mainly through the strengthening of the MPWT s systems for strategic planning, fiduciary management, and environmental safeguards, which are required for achieving better aid harmonization and coordination. The Borrow is rated as most relevant. Effectiveness the Borrower is rated as effective based on the targets for the Project: improve road services on two main national corridors and the provincial road network; recover the conditions of Typhoon Ketsana damaged roads; and establish a contingency fund for quick disaster response in the road sector. The civil works have been completed, however, counterpart funding remains payable of LAK 22 billion (USD 2.67 million) (see Appendix F for details) and the implementation of all components is considered satisfactory. In the view of the Bank, the financial management performance of the Project remains moderate satisfactory due to: (i) late advance clearance; (ii) large expenses on administrative expenses; (iii) un-updated fixed assets register; and (iv) inactive DA. However, at the date of this report, all issues related to financial management have been addressed and therefore, we consider rate is satisfactory for financial management. Page 21 of 25

75 LRSP Implementation Completion Report Efficiency the Borrower is rated efficient - all key outcome indicators and intermediate performance indicator targets have been met as planned. Sustainability the Government has continued towards the goal of achieving sustainable maintenance of the road system, all institutional outcomes achieved from this Project, as sector wide approach project, is moved forward to LRSP2 and NR13 project. The road sector is financed through Government budget, ODA, and the Road Maintenance Fund (RMF). The RMF, capitalized mainly through a fuel levy, is the key mechanism to ensure predictable and sustained allocations of funds for road maintenance. The RMF has been growing at more than 10 percent per annum in recent years and stood at over US$80 million in 2016, from US$2 million in 2002 (when it became operational). MPWT s conservative projection is for future growth rates maintained at around 10 percent in the medium term. The Borrower is rated as sustainable. Score: Relevance (20%) = 2.8 Effectiveness (30%) = 2.0 Efficiency (30%) = 2.5 Sustainability (20%) = 2.5 Overall rating = 2.5 The Borrower s and Implementing Agency s performance is rated as satisfactory. Key outcome indicators and intermediate performance indicator targets have been met. The results framework and achievements are shown in Appendix B. The civil works on National Roads (NRs) 1B and 6A, including the repairs on NR 1B and the construction of the bridges on NR 6A financed under LRSP, have been completed. The provincial road maintenance including FY has also been fully completed. By cooperation between, the DoF and DoR of MPWT, the SOP for the Emergency Response and Disaster Recovery Fund has been prepared and attached to the Internal Financial Manual which approved by Minister on 8 September The Sector Strategy technical assistance has been completed and MPWT has utilized the outputs as the basis for internal discussions and drafting of the Transport Sector Vision up to 2030, Ten-Year Strategic Plan, and Five-Year Action Plan ICT tools to support business processes for road asset management have been developed, tested and operationalized. Provincial capacity development activities are underway with 90% of the training plan for completed. Internal controls are being strengthened and guidelines for technical audit and internal control have been developed as planned. Training activities are on track. The coordination among departments has improved, and the bi-annual monitoring report for 2016 was shared with the World Bank in a timely manner and with good quality. 7. ECONOMIC ASPECTS The Project is fully consistent with the World Bank s Country Assistance Strategy (CAS) for Lao PDR. It supports one of the main CAS pillars of sustained growth through enhanced regional integration and private sector development, and to a lesser extent, one of the supporting CAS Page 22 of 25

76 LRSP Implementation Completion Report objectives regarding better alignment of donor resources with the objectives of the Government s National Growth and Poverty Eradication Strategy and strengthened aid coordination. The improved road services for national roads impacted low-income households in Phongsaly province (Khua, Boonneua, and Boontai Districts) and Huaphan province (Xienkhor, Sopbao, and Add Districts). Most of them, based on the location, are low-income households in rural areas. The provincial road maintenance was implemented country-wide and has impact on the rural population, which is more than 2/3 of the total population. Because most of provincial roads are unpaved and vulnerable to flood and landslides, road maintenance is crucial in ensuring all year round accessibility, which provides access to employment, market, school, and health services. The Project s benefits have been distributed more to lower-income population, as well as shared among all provinces in Lao PDR. The Project directly supports the economic growth as following: In line with these objectives, the Project supports the country s economic growth and poverty reduction through: (i) reducing road transport costs for goods and passengers; (ii) rehabilitating the road damaged by Typhoon Ketsana; and (iii) developing an emergency contingency fund for rapid response to natural disasters in the road sector. Support to the second CAS objective is mainly through the strengthening of the MPWT s systems for strategic planning, fiduciary management, and environmental safeguards, which are required for achieving better aid harmonization and coordination; At appraisal, the travel times on NR 6A (62km) and NR 1B (109km) were 3 hours and 5 hours, respectively. The target was to reduce travel time by 40%. The civil works on NR 1B were completed ahead of schedule, and by August 2013 travel time had been brought down to 2.5 hours (50% reduction),;this level was sustained through to the end of the project. The construction work on NR 6A was completed by the end of 2016, and the travel time reduced to 50 minutes (72% reduction); It was expected that the project would serve at least 26,500 people (49% female, i.e., at least 12,985 female). The project s annual survey in 2016 showed that the paved national roads (NR 6A and NR 1B) were serving 116,581 people (44% of whom were female, i.e., 51,296 female) The share of the provincial road network in good and fair condition was 46% at appraisal, against a target of 64%. By project end, implementation of annually planned provincial road maintenances programs had resulted in 65% of the provincial road network in good and fair condition. It was noteworthy that the km of provincial roads maintained had exceeded the planned targets in every year of implementation 8. ENVIRONMENTAL AND SOCIAL ASPECTS Environmental Safeguards: Safeguard compliance is considered Satisfactory based on the documents provided, discussions with the Project stakeholders, and field visits to NR1B and NR6A and some provincial roads in Phongsaly, Oudomxay, Houaphan and Xiengkhouang. No major safeguards related issues were Page 23 of 25

77 LRSP Implementation Completion Report identified and reported during Project implementation. All required written evidence was made available for the mission s review when required. The quality of safeguard documentation could be further improved with advanced training, and support will be provided to MPWT and the DPWTs under LRSP2. Safeguard monitoring of NR 6A and 1B and Provincial Road Maintenance: Civil works for NR 1B and NR 6A and provincial road maintenance were completed with no major safeguards concerns. The mission noted that the Project contributed significantly to dust reduction in communities where roads were upgraded from unpaved to paved standard. The PTRI had conducted periodic Environment and Social (E&S) monitoring, including final E&S monitoring during December 22 30, 2015 on road NR1B in Phongsaly and six sub-projects of provincial road maintenance in five northern provinces (Xayabouly, Borkeo, Luangnamtha, Oudomxay and Phongsaly). Common issues found by the mission include: improper use and poor management of borrow pits, improper camp site management (waste management, use of materials from natural resources, etc.), inadequate warning sign installation, soil erosion, poor construction waste disposal, etc. These issues had been considered and included in the design of LRSP2, particularly with respect to implementation and enforcement of safeguards obligations in contractor contracts and contractor management and capacity building. All safeguards trainings planned for LRSP have been completed. The mission also discussed with the DPWTs the way forward for LRSP2. Environment and Social Operations Manual (ESOM) updates and implementation. In 2015 PTRI had finished the ESOM updates to include new regulations and had finished an English translation. The English version was submitted to the Bank for review in October 2015, but was found by the Bank to require further improvement. However, since the Department of Environmental and Social Impact Assessment (DESIA) of the Ministry of Natural Resources and Environment (MONRE) plans to upgrade the Environment and Social Impact Assessment (ESIA) and Initial Environmental Examination (IEE) regulations into ESIA law or decree in , and LRSP2 will include TA support to prepare several guidelines on safeguards in road sector investment projects, the mission suggested that the ESOM updates be continued and included under LRSP2 implementation. Preparation of PPP NR13 Road Project: The Feasibility Study (FS) for the PPP for NR 13N and 13S has been completed, but the Environmental and Social (E&S) Assessment was found insufficient for a World Bank Group (WBG) financed Category A project. Procurement of an additional E&S study is in process. At the same time, MPWT informed the mission that due to the current economic and financial situation, the government is not in favor of the implementing a PPP project as proposed for NR 13 N and 13 S road sections and had decided to terminate the Financial Advisory Services Agreement with the IFC for the PPP road project. However, MPWT still seeks IDA support for NR 13N improvement. Investment on NR 13S is still in GoL s plan, but would be carried out in a later phase. With this decision and partly because of cost and financing implications, the E&S study of NR 13N and NR 13S will now be conducted separately. The proposed first step will be to carry out additional planning activities and update the ESIA, Resettlement Action Plan (RAP) and Ethnic Group Development Plan (EGDP) for the 13N road section only. The MPWT has revised the E&S TORs to reflect this split and clearly describe coverage of each contract and its interface. The International Environmental Specialist contract for the E&S study of NR 13N and 13S, which ended Page 24 of 25

78 LRSP Implementation Completion Report in November 2016, will be revised and renewed for only the NR 13N road section. As discussed in para 26 under Procurement for the E&S Study, MPWT has received the revised technical and financial proposals from the firm whose scope of work would now include all safeguards surveys and preparation of social safeguards instruments including the RAP and EGDP. The mission discussed that these factors - the need for more time for study completion than remains under LRSP, a higher cost estimate than the available budget, and the requirement to incorporate preparation of a full RAP all suggest that the study would best be carried out under LRSP2. Social Safeguard: Safeguard monitoring of NR 6A and NR 1B and Provincial Road Maintenance. On the basis of the safeguard monitoring, RAP completion reports reviewed, and field visit to NR 6A and some provincial roads in Xiengkhouang conducted during the mission, no major issue was identified. The RAP implementation has been completed with compensation and required support provided to all Project Affected Households (PAH). All written evidence, including minutes of consultation meetings, receipts and agreements, were made available for review. The PAHs met confirmed the receipt of cash compensation from the Project and expressed their appreciation for the improved roads and positive impacts on their livelihood. There were some grievances expressed mainly related to the need for further improvement of road safety measures such as traffic control sign posts at some points of the NR6A. The quality of safeguard documentation could be further improved with advanced training, updated templates and samples of comprehensive RAPs and reports to be provided for the MPWT and the DPWTs for their references under the LRSP2. 9. LESSONS LEARNED Straightforward project design supported easy adjustments during the life of the project. Clear, not overly ambitious targets were set and sufficiently straightforward to be easily adjusted when required. The Project design provided a clear line-of-sight from outputs to objectives, which made it possible for the project to be easily adapted to unexpected challenges. The use of long-term improvement and maintenance contracts can help improve road asset management and enhance sector efficiencies. Climate resilient road designs are critical and need to be promoted to reduce infrastructure vulnerability to current and future climate risk. Coordination between central and provincial level: since this is the first pilot Project using sector wide approach, coordination was more of a challenge than anticipated. Participation/ownership from provincial level: in adequate capacity of provincial level in fully understanding key documentations as they are in English (i.e. PAD, POM, Aide Memoire and etc). In addition, no participations from provincial level on key missions. Page 25 of 25

79 LRSP Implementation Completion Report Lengthy in procurement process which mainly from (i) limited human resources and staff turnover, and (ii) a lengthy internal approval process within the Project. Monitoring and evaluation: regular involvements in monitoring procurement and execution of the works, and sufficient budget for carrying out systematic data collection. Contract management: strengthen contract management capacity and registration system for contractors. Page 26 of 25

80 Core LRSP Implementation Completion Report Appendix A - Project Results Framework Project Development Objective (PDO): (a) To improve road services on two main national corridors and the provincial road network, (b) to rehabilitate the roads damaged by Typhoon Ketsana, and (c) to establish and operationalize a contingency fund for quick disaster response in the road sector. PDO Level Results Indicators Unit of Measur ement Baseline Original Project Start (2010) Progress To Date (Sep 2017) Cumulative Target Values Frequenc y Data Source/ Methodology Responsibili ty for Data Collection Comments 1. Vehicle travel time on upgraded NR1B reduced by 40% (109km): 5 hours; 50% 20% 30% 40% 40% Annual Project progress report and National Road Survey DoR Travel time=2.5 hrs Based on observation during mission January Vehicle travel time on upgraded NR6A reduced by 50% 3. At least 26,500 people (49% female) mostly living by the roadside will be served by paved road along NR1B and 6A 4. Share of provincial road network in good and fair condition (by Lao standards) increased from 46% to 65% (62 km): 3 hours Number 0 72% 20% 30% 40% 50% Annual 116,581 (44% female) 13,000 At least 26,500 (51% female) At least 26,500 (51% female) At least 26,500 (51% female) Annual 46% 73% 64% 64% 64% 65% Annual Project progress report and National Road Survey Project progress report and sampling survey Progress report and Annual Asset Report DoR DoR DoR Travel time= 50 mins. 6A total ppl incl. 3 districts= 93,210 (F=40,022/ 43%) 1B total ppl incl. 52 villages along the road= 23,371 (F=11,438/49%) Based on received ProMMs data. The figure might not reflect real condition of the road network due to the ineffectiveness of data collection Page 1 of 5 (Appendix A)

81 Core Core PDO Level Results Indicators 5. Standard operational procedures for the management of the emergency contingency fund functional Beneficiaries Project beneficiaries, Unit of Measur ement Text Baseline Original Project Start (2010) Fund establish ed Progress To Date (Sep 2017) Draft prepared Number 467,863 Cumulative Target Values Functio nal Functio nal 147,60 0 Functional Function al 309,400 Of which female (beneficiaries) Number 230,858 75, ,794 LRSP Implementation Completion Report Frequenc y Annual Data Source/ Methodology Project progress report Responsibili ty for Data Collection DoR & DoF Comments The development of draft SOP prepared earlier will require some more time. Figures of 5 districts in Houaphan Province and 7 districts in Phongsaly Province. Intermediate Results Indicators Unit of Measur ement Baseline Original Project Start (2010) Progress To Date (Sep 2017) Cumulative Target Values Frequenc y Data Source/ Methodology Responsibili ty for Data Collection Comments Intermediate Result 1: Network Improvement and Preservation km of national roads (NR1B&6A) upgraded with disaster resilience standard 2. About 2,100 km of provincial roads preserved through periodic maintenance 3. Road safety facilities acquired and installed as per specifications 4. New. Police officers, local authorities, community members and teachers and students exposed to road safety training and awareness raising activities in 3 pilot provinces km Bi-annual km 0 2,500 1,415 1,600 1,900 2,100 Bi-annual Text 0 Number 0 Fully installed 102 participants and 10 observers Goods procure d Installe d Fully installed Fully installed Annual Annual Project progress report Project progress report Project progress report Project progress report DoR DoR DoT DoT Traffic Management Training completed Speed Management was Page 2 of 5 (Appendix A)

82 Core LRSP Implementation Completion Report Intermediate Results Indicators Unit of Measur ement Baseline Original Project Start (2010) Progress To Date (Sep 2017) Cumulative Target Values Frequenc y Data Source/ Methodology Responsibili ty for Data Collection Comments conducted in June 2016 Intermediate Result 2: Institutional Strengthening 5. Knowledge and practical experience acquired on transport sector strategic planning and management 6. Country systems used for EA and staff trained 7. Acquire knowledge and experience on internal control Text Text Text First sector planning produced Country system just piloted and only a few staff trained Internal control function non existent The final edition of Sector Five- Year Plan Produced & Approved 256 provincia -l and district engineer s received ESOM training Internal control sections est. in 17 provinces & internal control divisions in 8 dept., 2 sub-dept and 2 SOE Strategi c plan updated and expand ed 169 provinci al and district enginee rs receive d ESOM training internal audit report produced Strateg ic Plan update d and expand ed 200 provinci al and district engineer s received ESOM training internal audit report produced Strategi c Plan updated and expand ed 230 provinci al and district enginee rs receive d ESOM training Annual internal audit report produce d Strategi c Plan updated and expande d 260 provinci al and district engineer s received ESOM training Annual internal audit report produce d Annual Annual Annual Project progress report Project progress report Project progress report DPC PTRI DoI No. Of trainees from October 2010-Mar 2012 Only. ESOM in English version shared to the Bank for comments. Trainings on ESOM may be postponed to the next project. Page 3 of 5 (Appendix A)

83 Core LRSP Implementation Completion Report Intermediate Results Indicators 8. Knowledge enhanced and practical experiences gained on fiduciary management and contract management at the provincial level Unit of Measur ement Text 9. New. PPP Unit established Text 10. New. Feasibility study for two PPP pilot road sections Baseline Original Project Start (2010) Capa-city develop ment program not started Progress To Date (Sep 2017) 2,042 ppl (286 females) participati ng in trainings & workshop s Different functions of PPP assigned to DoRs & DPC Under process of additional E&S Study 13 N Cumulative Target Values At least 450 people trained Operati onal FS completed At least 600 people trained Compl eted At least 750 people trained Under process of addition al E&S Study Capacity develop ment program completed Operational Operational Operational Frequenc y Annual Annual Data Source/ Methodology Project progress report Project progress report Responsibili ty for Data Collection DOP DPC DPC Comments Steering Committee established. PPP implementation responsibility will be with DOR, and coordinating responsibility will remain with DPC MPWT to compile a full report to the government after the completion of additional E&S study. Intermediate Result 3: Disaster Recovery and Contingency 11. Length of time between declaration of disaster and the first payment to contractors for emergency works shortened Text Time of pay-ment delayed for up to 2 years Time of payment for Typhoon s Ketsana and Nok Ten on average about 10 months Time of payment shortened by less than 6 months Time of payment shortened by less than 6 months Time of paymen t shortened to less than 6 months Time of payment shortened to less than 6 month Annual Project progress report DOR & DOF Due to the lack of fund in each financial year, first payment for disaster recovery works in just been made in Aug Documentation process to obtain Page 4 of 5 (Appendix A)

84 Core LRSP Implementation Completion Report Intermediate Results Indicators Unit of Measur ement Baseline Original Project Start (2010) Progress To Date (Sep 2017) Cumulative Target Values Frequenc y Data Source/ Methodology Responsibili ty for Data Collection Comments the payment not complicated. For the WB disaster & emergency fund took about 10 months on average for the first payment to be made Page 5 of 5 (Appendix A)

85 Appendix B Progress of seven bridges construction LRSP Implementation Completion Report Page 1 of 2 (Appendix B)

86 LRSP Implementation Completion Report Page 2 of 2 (Appendix B)