for official use only - world bank · 2014/4/4 · north eastern road-corridor asset management...
TRANSCRIPT
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PAD707
INTERNATIONAL DEVELOPMENT ASSOCIATION
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 157.6 MILLION
(US$243.8 MILLION EQUIVALENT)
TO THE
REPUBLIC OF UGANDA
FOR A
NORTH EASTERN ROAD-CORRIDOR ASSET MANAGEMENT PROJECT
(NERAMP)
April 4, 2014
Transport Sector
Country Department, AFCE1
Africa Region
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective February 28, 2014)
Currency Unit = UGX
2524UGX = US$1
US$
SDR 1
= SDR 0.64624531
US$1.5474
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS
AC Asphalt Concrete
CC Contracts Committee
CAS Country Assistance Strategy
CoST Construction Sector Transparency Initiative
DBS Data Base Section
DBMOT Design-build, Maintain, Operate and Transfer
DBST Double Bituminous Surface Treatment
DLP Defect Liability Period
DP Development Partner
DRC Democratic Republic of Congo
ED Executive Director
EIRR Economic Internal Rate of Return
ESIA Environmental and Social Impacts Assessment
ESMF Environmental and Social Management Framework
ESMPs Environmental and Social Management Programs
EU European Union
FM Financial Management
FMM Financial Management Manual
FY Fiscal Year
FWD Falling Weight Deflectometer
GAAP Governance and Accountability Action Plan
GDP Gross Domestic Product
GoU Government of Uganda
HDM Highway Design and Maintenance Model
IBRD International Bank for Reconstruction and Development
IDA International Development Association
IFC International Finance Corporation
IFR Intermediate Financial Report
IRF International Road Federation
IPBE Independent Parallel Bid Evaluation
ISIES Institutional Support and Integrity Enhancement Services
IRI International Roughness Index
MOFPED Ministry of Finance, Planning and Economic Development
MOWT Ministry of Works and Transport
NCB National Competitive Bidding
NDP National Development Plan
NERAMP North Eastern Road-corridor Asset Management Project
NEMA National Environment Management Authority
NITA National Information Technology Authority
NPV Net Present Value
NRSA National Road Safety Authority
NTPS National Transport Plan Strategy
NWSC National Water & Sewerage Cooperation
OPRC Output and Performance-based Road Contract
PAD Project Appraisal Document
PBC Performance Based Contract
PCRs Physical Cultural Resources
PPDA Procurement and Disposal of Public Assets Authority
PDO Project Development Objective
PEFA Public Expenditure and Financial Accountability
PFM Public Financial Management
PIP Project Implementation Plan
PMS Pavement Management System
PMT Project Management Team
PDU Procurement and Disposal Unit
RAFU Road Agency Formation Unit
RAMP Road Asset Management Program
RAMS Road Assets Management Systems
RAP Resettlement Action Plan
RDP Road Development Project
RDPP1 Road Development Program Phase 1
RDPP2 Road Development Program Phase 2
RDPP3 Road Development Program Phase 3
RFQ Request for Quotation
RMI Road Maintenance Initiative
RMS Road Management System
RMMS Routine Maintenance Management System
RoW Right of Way
RPF Resettlement Policy Framework
RSDP Road Sector Development Program
SBSAT Single Bituminous Surface Treatment
SDR Special Drawing Rights
SSATP Sub Saharan Africa Transport Program
SRFP Standard Request for Proposals
TA Technical Assistance
TIS Traffic Information System
TORs Terms of Reference
TSDP Transport Sector Development Program
TSDMS Transport Sector Data Management System
UBOS Uganda Bureau of Statistics
UNRA Uganda National Roads Authority
URF Uganda Road Fund
VfM Value for Money
URURA Uganda Rural and Urban Roads Authority
VOC Vehicle Operating Cost
WB World Bank
Regional Vice President: Makhtar Diop
Country Director: Philippe Dongier
Sector Director: Jamal Saghir
Sector Manager: Supee Teravaninthorn
Task Team Leader: Negede Lewi
THE REPUBLIC OF UGANDA
NORTH EASTERN ROAD-CORRIDOR ASSET MANAGEMENT PROJECT
TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................1
A. Country Context ............................................................................................................ 1
B. Higher Level Objectives to which the Project Contributes .......................................... 5
II. PROJECT DEVELOPMENT OBJECTIVE(S)..............................................................6
A. Project Development Objective (PDO) ........................................................................ 6
III. PROJECT DESCRIPTION ..............................................................................................7
A. Project Components ...................................................................................................... 7
B. Project Financing .......................................................................................................... 9
C. Institutional and Implementation Arrangements ........................................................ 10
D. Results Monitoring and Evaluation ............................................................................ 11
E. Sustainability............................................................................................................... 11
IV. KEY RISKS AND MITIGATION MEASURES ..........................................................12
A. Risk Ratings Summary ............................................................................................... 12
B. Overall Risk Rating Explanation ................................................................................ 12
V. APPRAISAL SUMMARY ..............................................................................................13
A. Economic and Financial Analysis ............................................................................... 13
B. Technical ..................................................................................................................... 14
C. Financial Management ................................................................................................ 16
D. Procurement ................................................................................................................ 16
E. Social (including Safeguards) ..................................................................................... 16
F. Environment (including Safeguards) .......................................................................... 17
G. Other Safeguards Policies Triggered .......................................................................... 18
Annex 1: Results Framework and Monitoring .........................................................................19
Annex 2: Detailed Project Description .......................................................................................24
Annex 3: Implementation Arrangements ..................................................................................35
Annex 4: Operational Risk Assessment Framework (ORAF) ................................................57
Annex 5: Implementation Support Plan ....................................................................................63
Annex 6 Economic Analysis ........................................................................................................65
Annex 7: Governance and Anti-Corruption..............................................................................70
Annex 8: Letter of Sector Development Policy .........................................................................73
MAP ............................................................................................................................................83
i
.
PAD DATA SHEET
Uganda
North Eastern Road-corridor Asset Management Project (NERAMP) (P125590)
PROJECT APPRAISAL DOCUMENT .
AFRICA
AFTTR
Report No.: PAD707 .
Basic Information
Project ID EA Category Team Leader
P125590 B - Partial Assessment Negede Lewi
Lending Instrument Fragile and/or Capacity Constraints [ ]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Project Implementation Start Date Project Implementation End Date
29-Apr-2014 30-Apr-2024
Expected Effectiveness Date Expected Closing Date
01-Sep-2014 31-Oct-2024
Joint IFC
No
Sector Manager Sector Director Country Director Regional Vice President
Supee Teravaninthorn Jamal Saghir Philippe Dongier Makhtar Diop .
Borrower: REPUBLIC OF UGANDA
Responsible Agency: Uganda National Roads Authority (UNRA)
Contact: B. Ssebbugga-Kimeze Title: Ag. Executive Director
Telephone No.: 256-312-233-100 Email: [email protected] .
Project Financing Data(in USD Million)
[ ] Loan [ ] Grant [ ] Guarantee
[ X ] Credit [ ] IDA Grant [ ] Other
Total Project Cost: 255.00 Total Bank Financing: 243.80
Financing Gap: 0.00
ii
.
Financing Source Amount
BORROWER/RECIPIENT 11.20
International Development Association (IDA) 243.80
Total 255.00 .
Expected Disbursements (in USD Million)
Fiscal
Year
2015 2016 2017 2018 2019 2020 2021 2022 2023
2024
Annual 18.00 38.00 38.00 14.00 14.00 14.00 14.00 40.00 40.00 13.8
Cumulati
ve
18.00 56.00 94.00 108.00 122.00 136.00 150.00 190.00 230.00 243.8
.
Proposed Development Objective(s)
The PDO is to reduce transport costs, enhance road safety, and improve and preserve the road assets
sustainably by applying cost effective performance based asset management contracts, along the Tororo
- Kamdini road Corridor. .
Components
Component Name Cost (USD Millions)
Road Rehabilitation, Operations and Maintenance 241.00
Institutional Support to UNRA 14.00 .
Institutional Data
Sector Board
Transport .
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation
Co-benefits %
Mitigation
Co-benefits %
Transportation Rural and Inter-Urban
Roads and Highways
80
Public Administration, Law, and
Justice
Public administration-
Transportation
10
Transportation General transportation
sector
10
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information
applicable to this project. .
Themes
iii
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Financial and private sector development Infrastructure services for private sector
development
50
Trade and integration Regional integration 20
Rural development Rural services and infrastructure 20
Public sector governance Administrative and civil service reform 10
Total 100 .
Compliance
Policy
Does the project depart from the CAS in content or in other significant
respects?
Yes [ ] No [ X ]
.
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ X ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] .
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X .
Legal Covenants
Name Recurrent Due Date Frequency
Procurement Management 01-Dec-2014
Description of Covenant
The Recipient, through UNRA, shall not later than three (3) months after the Effective Date, appoint or
recruit or designate a procurement specialist, all with qualifications, experience and on terms of
reference satisfactory to the Association. Financing Agreement (FA), Schedule 2, Section III, E.1.
iv
Name Recurrent Due Date Frequency
Designate a Director for UNRA's
Procurement directorate 31-Aug-2015
Description of Covenant
The Recipient, through UNRA, shall not later than twelve (12) months after the Effective Date,
designate a director for UNRA’s procurement directorate, with qualifications, experience and on terms
of reference satisfactory to the Association. FA Schedule 2, Section III, E.2.
Name Recurrent Due Date Frequency
Training to contract managers 01-Feb-2016
Description of Covenant
The Recipient, through UNRA, shall not later than eighteen (18) months after the Effective Date,
provide procurement Training for contract managers, under terms of reference acceptable to the
Association. FA Schedule 2, Section III, E.3.
Name Recurrent Due Date Frequency
Financial Management 31-Aug-2015
Description of Covenant
The Recipient, through UNRA, shall: (a) not later than twelve (12) months after the Effective Date,
upgrade its accounting system, and update its financial management manual and its internal audit policy
and procedures manual, all in form and substance satisfactory to the Association. FA Schedule 2,
Section II, B.4.
Name Recurrent Due Date Frequency
Social and Environmental specialists 31-Aug-2015
Description of Covenant
The Recipient, through UNRA, shall not later than twelve (12) months after the Effective Date, appoint
an environmental specialist, a sociologist and a right of way officer, all in accordance with the
provisions of Section III of Schedule 2 to this Agreement. FA Schedule 2, Section I, A.1.
Name Recurrent Due Date Frequency
Appointment of OPRC contractor 31-Mar-2015
Description of Covenant
The Recipient, through UNRA, shall not later than March 31, 2015, appoint at least one OPRC
contractor. FA Schedule 2, Section V.
Name Recurrent Due Date Frequency
Designation of key internal audit staff 01-Sep-2015
Description of Covenant
The Recipient, through UNRA, shall not later than twelve (12) months after the Effective Date,
designate key internal audit staff, all with qualifications, experience and on terms of reference
satisfactory to the Association. FA Schedule 2, Section II, B.5.
Name Recurrent Due Date Frequency
v
RAP compensation costs X Yearly
Description of Covenant
The Recipient shall, in each Fiscal Year (“FY”) commencing FY2015/2016: (a) through UNRA,
establish and thereafter maintain at all material times during the implementation of the Project, a budget
line item for RAP compensation costs under Part 1(a) of the Project; and (b) through MoFPED, allocate
counterpart funds required for said RAP compensation costs under said Part 1(a) of the Project. FA
Schedule 2, Section I, D.3.(a) .
Conditions
Source of Fund Name Type
IDA Subsidiary Agreement Effectiveness
Description of Condition
The Subsidiary Agreement has been executed on behalf of the Recipient and UNRA. FA article 5.01(a)
Source of Fund Name Type
IDA Project Implementation Plan Effectiveness
Description of Condition
The Recipient has adopted the Project Implementation Plan, in accordance with the provisions of Section
I.B.1 of Schedule 2 to the Financing Agreement. FA article 5.01(b)
Team Composition
Bank Staff
Name Title Specialization Unit
Luis M. Schwarz Senior Finance Officer Senior Finance Officer CTRLA
Negede Lewi Sr Highway Engineer Team Lead AFTTR
Labite Victorio Ocaya Sr. Highway Engineer AFTU1
Petrus Benjamin Gericke Lead Transport
Specialist
Lead Transport
Specialist
AFTTR
Rosemary Birungi
Kyabukooli
Program Assistant Program Assistant AFMUG
Christine Makori Senior Counsel Senior Counsel LEGAM
Grace Nakuya Musoke
Munanura
Senior Procurement
Specialist
Sr. Procurement
Specialist
AFTPE
Christiaan Johannes
Nieuwoudt
Finance Officer Finance Officer CTRLA
Paul Kato Kamuchwezi Financial Management
Specialist
Financial Management
Specialist
AFTME
Mariame Bamba Program Assistant Program Assistant AFCF2
Elijah Ayieko Osiro Consultant Consultant AFTP5
Zemedkun Girma
Tessema
Sr Transport. Spec. Sr Transport. Spec. AFTTR
vi
Herbert Oule Environmental Specialist Environmental Specialist AFTN3
Constance Nekessa-
Ouma
Social Development
Specialist
Social Development
Specialist
AFTCS
Celi Marie Dean Temporary Temporary AFTTR
Non Bank Staff
Name Title Office Phone City
.
Locations
Country First
Administrative
Division
Location Planned Actual Comments
1
I. STRATEGIC CONTEXT
A. Country Context
1. Uganda’s Economy and Social Context. Uganda, located in Eastern Africa, is a
landlocked country with an area of 236,040 square kilometers. With a population size of 34.1
million1, the country has recorded a high population growth rate of 3.2 percent per annum.
Growth rate of the annual gross domestic product (GDP) averaged seven percent in the 1990s,
and accelerated to more than eight percent over a consecutive seven-year period up to Fiscal
Year (FY) 20082.
2. Starting from 2009, a combination of exogenous shocks and domestic factors, such as the
global economic crisis, bad weather, and surges in international commodity prices, affected the
country’s growth rate. Subdued export performance, decline in aid (following high-profile
corruption cases), high inflation, and the subsequent tightening of monetary policy to restore
macroeconomic stability, reduced GDP growth to 3.4 percent in FY 20122.
3. Uganda turned in a noteworthy economic performance during FY 2013, helped by good
macroeconomic policy and favorable weather conditions. Real GDP at constant market prices
grew by 5.8 percent2. The strong economic growth over the past two decades has enabled
Uganda to substantially reduce poverty as the proportion of people living in poverty has reduced
from 56 percent in 1993 to 24 percent in 2010. Uganda has surpassed the 2015 Millennium
Development Goal of halving the poverty rate. The share of population living below the poverty
line has come down to 22 percent in 20133. The overall decline in poverty can be attributed to
subtle diversification of economic activity away from over-reliance on the farm, to nonfarm
household enterprises.
4. Country’s Development Plan. Uganda’s National Development Plan (NDP) (FY 2011
to 2015) stipulates the country’s medium-term development priorities and its implementation
strategy. The NDP has highlighted low levels of investments in infrastructure as a key constraint
to growth. The transport sector, especially roads, is a high priority of the NDP. In addition,
investments in road connectivity (including rehabilitation of major transport corridors) are seen
as essential for economic development, agricultural productivity, and poverty reduction in
Uganda’s Vision for 2040 and the NDP under preparation.
5. Regional Integration and Trade. Uganda is the land “bridge” for the rest of the Great
Lakes region, connecting a number of landlocked neighbors to the coastal countries. The East
Africa Community (EAC) regional integration agenda is also partly driven by Uganda’s active
economic and trade performance. Uganda’s trade with its neighbors has more than doubled from
1 Uganda Bureau of Statistics (UBOS): Uganda in Figures 2013 2 Uganda Economic Update: Bridges Across Borders --Unleashing Uganda’s Regional Trade Potential, February, 2013 - First
Edition, The World Bank 3 Poverty head count ratio at national poverty line (% of population). Source: Uganda Bureau of Statistics. Estimates are
consistent with the World Bank’s Global Poverty Working Group data.
2
about 20 percent of GDP in 1990 to over 42 percent by June 20104. The volume of trade
increased by the type of goods in transit, both by destination and sources of trade, particularly
with South Sudan. The efficiency of the transit traffic performance in the major road corridors is
critical for supporting and sustaining competitive international trade in the sub-region. This calls
for addressing infrastructure bottlenecks and non-physical trade barriers that hamper smooth
flow of traffic for people and goods.
Sectoral and Institutional Context
6. Uganda’s Transport System. Uganda’s transport system includes road, rail, water, and
air transport. Road transport is the most dominant mode and plays a pivotal role in supporting the
economic and social development of the country. Road transport carries over 90 percent of the
country’s passenger and freight traffic and provides the only means of access for the rural
population. The road infrastructure also serves the transit corridors linking the land-locked
neighboring countries of Rwanda, Burundi, South Sudan, and parts of the Democratic Republic
of Congo (DRC) to the Indian Ocean port of Mombasa, Kenya. The classified road network
length is about 66,000 km and consists of 21,000 km national, 32,000 km district and 13,000 km
urban roads. The community access road network is estimated at 85,000 km. Other modes of
transport are: (a) a railway system that consists of 1,260 km of which only 320 km are
functioning, while the rest are in a dilapidated state; (b) water transport mainly on Lake Victoria
and the Nile river served by wagon ferries; and (c) air transport facilities including one
international airport, and 13 domestic air fields5.
7. National roads, of which 3,490 km are paved, connect districts with one another and the
country with its neighbors. The Uganda National Roads Authority (UNRA) is responsible for
managing national roads. The urban roads, located within the boundaries of urban councils, are
of different types (bitumen, gravel and earth surface) and are managed by urban local
governments. District roads provide access from rural areas to markets, health centers,
educational institutions, administrative centers and other services and are managed by district
governments. The community roads are managed by sub-county local governments. The national
roads, which make up only 30 percent of the network, carry 80 percent of the total road traffic.
8. National Transport Policy and Strategy (NTPS). The NTPS, adopted in 2002,
promotes less costly, efficient, and reliable transport services as a means of providing effective
support to increased agricultural and industrial production, trade, tourism, social and
administrative services. The Government of Uganda (GoU) has received support from
development partners (DPs) in the sector. The first 10 year Road Sector Development Program
Phase 1 (RSDPP1) covered the period from FY 1997 to 2006. In April 2002, RSDPP1 was
updated and rolled over for a second 10 years as RSDPP2 (FY 2001 to 2011) and its total
estimated cost was increased from the original US$1.5 billion to US$2.3 billion. The update
included district roads, which were not part of RSDPP1. Based on the lessons learned in the
implementation of the two phases of the program, the Government, with support from DPs, has
developed an ambitious RSDPP3 program which also includes urban roads with a total proposed
4 UGANDA Assessment of Trade and Transport Corridors Serving Uganda, October 15, 2010 5 Annual Sector Performance Report Financial year 2102/13, Ministry of Works and Transport
3
investment requirement of US$10.36 billion over the ten year period from FY 2012 to 20216.
RSDPP3 places emphasis on the provision of a technically sound, economically justified and
financially sustainable road transport infrastructure through active participation of the private
sector. In order to adequately respond to the growing transport demand on a timely basis, support
national economic development, and the growing regional trade in a sustainable manner, the
RSDP has prioritized the rehabilitation of maintenance of the major road corridors. One of the
key corridors included in the RSDP is the north eastern corridor.
9. Institutional and Policy Reforms. The GoU has restructured the Ministry of Works and
Transport (MoWT) to focus on formulating policies, setting standards, strategic planning, and
sector oversight and monitoring. The Government has been delegating executive functions,
including implementation and regulatory functions, to specialized entities which have been or are
being created. Accordingly, UNRA was established to manage national roads and it commenced
operations on July 1, 2008. The Uganda Road Fund (URF) was established to finance road
maintenance and it became fully operational on July 1, 2010. The ongoing reform is focusing on
the creation of: (a) a National Road Safety Authority (NRSA) that will lead road safety
initiatives; (b) a Multi-Sector Transport Regulatory Authority (MTRA) to take care of surface
transport regulation; (c) Uganda Rural and Urban Roads Authority (URURA) to manage rural
and urban roads; and (d) a Metropolitan Area Transport Authority (MATA) to manage Urban
transport and the proposed bus rapid transit system in the Greater Kampala Metropolitan Area
(GKMA). The GoU is also committed to privatization and commercialization functions that can
be transferred to specialized service providers to enable the public sector to concentrate on its
core responsibilities.
10. Key Sector Issues. Although reforms to date have substantially enhanced sector
performance, there are a number of areas that need further attention. The September 2013 annual
review of the transport sector points to some gaps in transport infrastructure, poor condition on
some of the high priority national road network, and high vehicle operating costs (VOC). The
operationalization of the URF as a second generation maintenance financing instrument has not
yet materialized and maintenance activities are underfunded. Inadequate road designs have in
some instances led to major variations and increased the cost of works contracts making the
programming and budgeting for roads difficult. Furthermore, over the last few years, there have
been delays in payments to contractors and consultants under Government-funded projects
primarily due to over commitments in the road sector. These issues have stretched the contract
management capacity of UNRA as it has to deal with a number of claims under the contracts due
to variations, extension of time, and delayed payments.
11. Governance Challenges. Under the ongoing Transport Sector Development Project
(TSDP), the Government has been implementing the Governance and Accountability Action
Plan (GAAP) aimed at developing a system and culture for promoting transparency and
accountability in the road sector. As part of implementation support to the TSDP, the Bank and
the Government have put in place an Institutional Support and Integrity Enhancement Services
(ISIES) system. The ISIES includes measures to enhance transparency, accountability and
participation in the implementation of both Government and donor funded projects in the
6 Preparation of Third Phase of Road Sector Development Program (RSDP3), Kagga & Mott Macdonald, June 2012, UNRA
4
national roads program. These measures implemented in UNRA have helped in reducing the
number of administrative reviews associated with contracts award and have resulted with
competitive bids over the last two years. However the third annual report on tracking corruption
trends in Uganda points out the challenge of achieving value for money (VfM) in the roads
sector, noting that up to 85 percent of the road works were not implemented as scheduled for
district roads program7. Delayed release of funds works by the Ministry of Finance, Planning
and Economic Development (MoFPED) and URF, insufficient funding, inadequate capacity of
contractors, machine breakdowns, as well as delays in the procurement process were the main
reasons cited for slow implementation of district road works.
12. Road Asset Management. The focus of investment in the past was geared towards road
development, while road maintenance was underfunded. Furthermore, there was no systematic
long-term road asset management practice in UNRA. The backlog of periodic maintenance on
the national paved roads had increased from about 450 km in 1999 to about 750 km in 20128.
There was a need to address this situation that led to the reduction of the paved road assets value
by about 10 percent annually. The Bank has supported the establishment of a Road Asset
Management System (RAMS) for the national road network, under the TSDP and the completed
third support to the RSDP, to enable the optimization and prioritization of the RSDP activities.
The rationale for RAMS mainly lies on preserving the road assets from deterioration through
cost-effective, efficient, and well-designed interventions. Thus, RAMS was based on a strategy
that is designed to increase the effectiveness and efficiency of the road system through the
preservation of the road assets. It also aims at the optimal allocation of resources, to clear road
maintenance backlog and ensure the VfM principle and avoid the “build and collapse” practice
observed on the road assets. Although the RAMS was made operational, the benefits could not
be fully utilized due to challenges and constraints facing UNRA.
13. There is a shortage of staff and specialized expertise in some of the emerging and
complex areas of infrastructure delivery such as managing private-public-partnerships (PPP), and
design-build, maintain, operate and transfer (DBMOT). Other constraints include the lack of
defined procedures and standard output-based contract management processes, and the
mainstreaming of such systems and procedures within UNRA.
14. Road Asset Management Contracts. In support of its strategy to mainstream road asset
management practices, the GoU is introducing innovative road asset management contracts,
under the North Eastern Road-corridor Asset Management Project (NERAMP). The DBMOT
asset management contracts are also referred to Output and Performance-based Road Contracts
(OPRC)9. This contracting approach reduces the risks related with poor road design, quality
control, and cost overruns as the contractor will be responsible for the design of the road and
payments would be on a lump sum basis for a predefined level of performance and output. The
OPRC will introduce a new way of doing business shifting from the more traditional approach of
7 The Third Annual Report on Corruption Trends Tracking Mechanism, the Republic of Uganda Inspectorate of Government -
December 2012. 8 Final report: Needs Assessment for Engaging the Diaspora - Capacity Needs Assessment of Uganda National Roads Authority
- Ministry of Foreign Affairs, May 2012 9 In the rest of the Document reference is only made to OPRC since this terminology is consistent with the Bank’s sample Bid
Document.
5
admeasurement contracts, which is based on payment for inputs, a method that has not been
budget friendly due to quantity and price variations arising during contract implementation.
OPRC contracts, on the other hand, promote innovation, efficiency and effectiveness as
contractors strive to achieve set performance standards with an optimally agreed contract price.
OPRC also helps to preserve road assets by protecting them from further deterioration through
application of appropriate and timely interventions. This, coupled with the institutional support
to be provided to UNRA under the NERAMP, will improve the efficiency and effectiveness of
road network management, and will bring about the culture change to deliver the benefits of the
RAMS.
15. Rationale for World Bank Involvement. The World Bank brings in global experience
in the application of OPRC. The Bank has also benefited from the experience gained in
implementing comprehensive road sector development programs and institutional reforms in
Sub-Saharan Africa. In Uganda, the Bank's key role during the preparation and implementation
of the RSDP has been recognized by all stakeholders. The Bank funded three completed projects
in support of RSDP, and another ongoing project, the TSDP which has funded, among others,
institutional transformations in MoWT and the establishment of RAMS. The Bank's participation
in this new project will provide for continuity in carrying out sector reforms and implementation
of long-term national road sector programs, using innovative approaches.
B. Higher Level Objectives to which the Project Contributes
16. The proposed NERAMP will contribute to the Government of Uganda’s National
Box 1: Overview of OPRC
OPRC requires the contractor to prepare the design of the expected rehabilitation works, and after approval of
the design by the “Employer”, the contractor will be responsible for the construction, maintenance, and
operations activities. The maintenance of the selected road links will be at the required levels of service.
Payments will be based on whether the roads under contract must comply with the level of service as specified in
the bidding document, i.e., the outcomes for all required activities beginning from rehabilitation, through
maintenance services ensures continuous compliance with the specified level of service.
OPRC addresses the shortcoming of conventional contracting by creating incentive structures for the contractor.
The main advantages of OPRC, based on Bank experience in other projects can be summarized as follows: (a)
cost savings in managing and maintaining road assets ranging from 20 to 45 percent; (b) expenditure certainty
(fixed price contracts with monthly regularity to avoid unexpected variations); (c) leaner road agencies
(reduction of road agency’s in-house workforce and general administrative costs); (d) improved and sustained
condition of contracted road assets; (e) enhance satisfaction of road users; (f) secured financing for multi-year
maintenance program (long-term contracts); (g) better planning and use of resources, and improved governance;
and (h) reduced number of contracts which otherwise would need to be carried out and administered by the Road
Authority during the same long-term contract.
From a lesson learnt in earlier Bank-financed projects, for a successful implementation of OPRC, the contracts
require proper risks identification and allocation between Employer and Contractor or to be shared by both. The
Assessment Study for the conceptual design and preparation of bid documents for the project roads studied these
and the outcome of the risk allocation will be included as specific clauses in the bid documents.
6
Development Plan, NTPS, and RSDP. As the project is focusing on one of the major transport
corridors it will also support GoU’s effort of unleashing Uganda’s regional trade potential, thus
enhancing the regional integration objective of the East Africa Community (EAC).
17. The project supports the World Bank’s twin goals of reducing extreme poverty and
promoting shared prosperity. The corridor will connect some of the poorest regions in Uganda
with its neighboring countries where poverty rates are high. A large majority of the population
lives in rural areas and lives on subsistence agriculture. The project corridor, apart from
providing a cost effective transport system for economic activity, especially for agricultural
development in the project area, has been serving as the main access route to northern Uganda,
Kenya, south eastern DRC and South Sudan, where some of the poorest populations reside.
Improving connectivity will provide better access to markets and services for the bottom 40
percent of the population, while upgrading the corridor will help to reduce the cost of imports to
the region, expand markets, facilitate development and create local jobs.
18. The project supports the core pillars of the Africa Strategy: (a) improving
competitiveness and employment; and (b) addressing vulnerability and promoting resilience. It is
also aligned with the current Bank’s Country Assistance Strategy (CAS) for Uganda10
, covering
FY 2011 to 2015 which has a strategic objective of enhancing public infrastructure and
promoting inclusive and sustainable growth. Transport is one of the priorities of the CAS and is
considered to be one of the determining factors for growth, interconnectivity, trade and regional
integration. Improved access to and quality of the roads are being monitored as key outcome
indicators of the CAS. The CAS Progress Report (CAS PR)11
of July 2013 highlights an
emphasis on transformational operations focusing on infrastructure, (including rehabilitation of
major transport corridors), agricultural productivity and access to markets and skills development
that leads to more jobs.
19. As the project is to introduce the utilization of output-based asset management contracts
it would be a paradigm shift from the current practice of input-based contracting. The
transformational nature of the operation could provide lessons that could be replicated in Uganda
and other countries.
II. PROJECT DEVELOPMENT OBJECTIVE(S)
A. Project Development Objective (PDO)
20. The PDO is to reduce transport costs, enhance road safety, and improve and preserve the
road assets sustainably by applying cost effective performance based asset management
contracts, along the Tororo-Kamdini road corridor.
21. Project Beneficiaries. The primary target group or main beneficiaries of the project will
be: (a) the road users, who will gain from an improved level of service as a result of the
10 Report No 54187-UG
11 Report No 75283-UG
7
improvements and the maintenance of the road corridor; (b) the tourism industry, as the corridor
would provide better access to two national parks (Murchison Falls and Kidepo); and (c) the
agricultural producers and communities along the corridor that would benefit from the jobs
created and the improved access to markets, social and economic activities. The project
beneficiaries are about 2.25 million people out of which about 40 percent are female.
22. PDO Level Results Indicators. The PDO key result indicators are: (a) road corridor
sections in good, fair and bad condition (percentage); (b) reduced travel time (HR); (c) vehicle
operating cost (VOC) savings (US$); (d) reduced road accidents on project road (number); (e)
direct project beneficiaries (number); and (f) female beneficiaries (number).
III. PROJECT DESCRIPTION
A. Project Components
23. Component 1 - Road Rehabilitation, Operations and Maintenance (US$241 million).
This component will finance long term OPRC for the Tororo - Mbale - Soroti - Lira - Kamdini
road (340 km). This road corridor links South Sudan, parts of the Democratic Republic of
Congo, and northern and eastern Uganda to the port of Mombasa. The works and services under
the OPRC contract will include: (a) the design and rehabilitation of sections of the road corridor;
(b) routine and periodic maintenance of the whole corridor; and (c) operations which will include
management of traffic, road safety and axle load control measures. This component will also
finance consultancy services for the Project Management Unit that will be responsible for
administering and supervising the OPRC contracts.
24. The North-East Corridor. The project road comprises paved road that stretches from
Tororo up to Kamdini located in the eastern and north eastern part of Uganda, respectively.
There are two road corridors from Kamdini: (a) to DRC through Goli and Vurra and onward to
South Sudan through Oraba in north western Uganda; and (b) to South Sudan through Nimule in
northern Uganda. Thus, the project road is feeding traffic from the Mombasa port to South
Sudan, DRC and Uganda. The road traverses mainly a flat to rolling terrain through the districts
of Tororo, Mbale, Bukedea, Kumi, Ngora, Soroti, Kaberamaido, Dokolo, Lira, Kole and Oyam.
25. Component 2 - Institutional Support to UNRA (US$14 million). To ensure
sustainability, technical assistance to UNRA will focus on designing, awarding, and managing
OPRC. In addition, local stakeholders, including regulatory bodies, auditors, and the local
construction industry need support to help build awareness in order to contribute towards the
change process in the way the road network is planned, developed and maintained. The
following will be provided as a package to bring about sustained and lasting culture change to
deliver the benefits of OPRC.
a) Asset Management Support and Road Safety (US$7.5 million). Technical Assistance
(TA) support will be provided in data collection, lifecycle cost analysis, development of
output specifications for the long term contracts, monitoring and evaluation, and
reporting on the performance of pavements and bridges. This component will also
finance consultancy services that will prepare asset management contracts for future
8
projects. The road safety activities are aimed at the reduction of road traffic injuries and
fatalities by strengthening the road safety management capacity, and reducing road
crashes in the project corridor. The safety interventions under the NERAMP will build on
the lesson learned from “Safe Way Right Way (SWRW) initiative”12
. The component
will support the road safety audit, monitoring and evaluation exercise and road safety
enhancement measures. It will be closely coordinated with the ongoing activities
supported under the TSDP to implement the National Road Safety Policy, the
establishment of a NRSA, and development of the National Road Crash Database.
b) Support in Contract Supervision and Management of OPRC (US$5.5 million). UNRA’s contract management setup is predominantly for managing admeasurement
contracts. Consultancy services will be provided to reorganize the contract management
and administration systems and practices in UNRA to ensure that OPRC contracts are
appropriately supervised and monitored. The component will also provide consultancy
services in the areas of safeguards, financial management, and enhancing the contract
monitoring system. Support will also be given to the implementation of the CoST
initiative which is intended to reinforce good governance and accountability in the road
sub-sector.
UNRA needs to influence planning, charging, enforcement, control, and information on
the national road network in order to operate the network effectively. The management
of traffic flow, safety and axle load control must be enhanced in partnership with
contractors and other key stakeholders. Thus to improve UNRA’s network management
capabilities, support will be provided to improve customer services, charging, and
enforcement. This will also entail the preparation and implementation of a project
communication strategy to disseminate useful information to the public as well as
generate and secure a sustained feedback from all stakeholders to maintain or improve
the services. As OPRC is a new initiative, a robust training program is an integral part of
the project. This will entail, among others, secondment of graduate engineers during
implementation and specialists’ training for senior UNRA staff in the planning and
supervision of output and performance-based contracts. Training will also be provided in
building the capacity of local contractors in undertaking such output-based contracts.
c) Operating Costs (US$1.0 million). This component will finance incremental project
implementation expenses based on agreed annual work plan and budget. The operation
cost will consist of, audit fees, expenditures for office supplies, vehicle operation and
maintenance, maintenance of equipment, communication and insurance costs, office
administration costs, utilities, rental, consumables, accommodation, travel and per diem,
and salaries of Project staff,
12
Safe Way Right Way (SWRW) initiative is a road safety program carried out in the Northern corridor with the partnership of
the World Bank and TOTAL Group closely working with private sector companies, several members and program activities
under a registered NGO umbrella called “Safe Way Right Way”.
9
B. Project Financing
26. The total cost of the project is estimated at US$255.00 million equivalent. The share of
IDA financing amounts to US$243.80 million equivalent (SDR 157.60 million) and the
remaining US$11.20 million is financed by the GoU. The proposed lending instrument is
Investment Project Financing (IPF). Table 1 below shows the project cost by component, and
the details are provided under Annex 2.
Table 1: Project Costs by Component (US$ million)
Project Components Total
Project cost
% of
total
IDA
Financing
% IDA
Financing
Road Rehabilitation, Operations and
Maintenance 241.00
94.5
229.80
94.3
Institutional Support to UNRA 14.00
5.5
14.00
5.7
Total 255.00
100
243.80
100
Lessons Learned and Reflected in the Project Design
27. The lessons learned and reflected in the design of the project are based upon
implementation of completed projects that have supported the RSDP in Uganda and the ongoing
TSDP; and the Bank’s global experience with OPRC contracts elsewhere.
28. Procurement Delays. In other projects, the cost of the civil works has varied
substantially from that at the feasibility and detailed engineering design stages, mainly due to
delays in the procurement process (which in some cases took up to four years). These delays led
to several parameters affecting bid prices and/or variations under the contracts (from estimates
made at appraisal). Under the proposed operation, major works contracts will be carried out on
post qualification basis. The early launch of procurement processing will be complemented with
TA support to expedite the bid evaluation process.
29. Cost Increases. In past projects, cost overruns under civil works contracts were mainly
attributed to: (a) inadequate or absolute road designs, weak contract management, inefficient
planning and timely implementation of environmental and social impact mitigation measures,
resulting in variations, and major claims under the contracts; (b) unexpected or sudden increases
in the cost of fuel, construction materials and other inputs; and (c) low cost estimates. These
factors have affected project implementation and resulted in reducing the scope or dropping of
project components. The OPRC approach proposed under this project addresses most of the
issues including variations related to inadequate road designs. Furthermore, the technical
assistance will augment the support provided to the contracts manager and enhance the capacity
of UNRA, including for environmental and social management.
30. The project will build up on the lesson learned from the implementation of the ISIES,
under the TSDP, including the use of an Independent Parallel Bid Evaluation (IPBE) system,
timely actions by internal audit and improved contract management procedures. The project will
10
also build up on the Construction Sector Transparency (CoST) Initiative13
. In October 2013,
Uganda became the tenth CoST country. CoST will be working directly with UNRA, which will
lead the implementation of CoST within Uganda.
31. Asset Management. Experience elsewhere has shown that the use of OPRC needs to go
hand in hand with good road asset management. In the case of UNRA, the asset management
concept has been adopted and RAMS developed. Furthermore, the duration of the OPRC
contract was proposed based on lessons learned from the implementation of similar projects.
IMPLEMENTATION
C. Institutional and Implementation Arrangements
32. The project will be implemented by UNRA, which is the Recipient’s legal entity
established by law, to be responsible for the maintenance, development and management of the
national road network, under the supervision of the MoWT. Proceeds of the Credit will be
availed by MoFPED to UNRA as a grant. The Executive Director (ED) of UNRA will be the
“Accounting Officer” for the project. The ED of UNRA will delegate the function of the day-to-
day management of the project to the NERAMP Project Coordinator. The project is fully
mainstreamed. UNRA will implement the project through existing systems. UNRA has three
technical Directorates: (a) Directorate of Planning responsible for planning, programming,
budgeting, designing, and social and environment management, monitoring and evaluation; (b)
Directorate of Projects responsible for implementation of construction and rehabilitation works;
and (c) Directorate of Operations, responsible for maintenance, operations, axle load control and
ferry services. As the implementation of the OPRC will cut across the functions of the three
Directorates, the project coordinator will be working with specialists assigned from the different
Directorates. The details of the working arrangements will be included in the Project
Implementation Plan (PIP). UNRA will submit the final PIP that is acceptable to IDA, which is a
condition of effectiveness.
33. UNRA has been implementing various World Bank and other DPs financed projects and
has a well-established finance unit to manage the proceeds of the IDA credit. UNRA will
maintain the designated account and will ensure compliance with all financial requirements of
IDA. UNRA will be responsible to present consolidated progress reports and consolidated
unaudited Interim Financial Reports (IFRs) to IDA in a timely manner.
34. The procurement function will be executed by the Procurement Directorate. Since its
elevation to a Directorate in 2012, the TSDP has been financing the positions of one procurement
consultant (who is also the acting Director of Procurement), and one procurement specialist.
These positions have been instrumental in building capacity of the procurement in UNRA and
helping bridge the understaffing gap. UNRA has started the recruitment process for the position
of the Director of Procurement.
13
CoST is a country centered multi-stakeholder initiative designed to promote transparency and accountability in publicly
financed construction. Details could be obtained at http://www.constructiontransparency.org/
11
D. Results Monitoring and Evaluation
35. The Data Base Section (DBS) of the Policy and Planning Division of MoWT has the
overall responsibility for monitoring and reporting on the performance of the transport sector. Bi-
annual reports are produced by the DBS, which are used to measure the performance of the
different sub-sectors. The Transport Sector Data Management System (TSDMS) used for this
purpose has already been established under the TSDP. The day-to-day monitoring and reporting
function of the project will be with UNRA. Other data will be generated from the Road
Management System (RMS) of UNRA which was established under the Bank financed RDPP3
and the TSDP. The RMS, comprises a Pavement Management System (PMS), Bridge
Management System (BMS), Contract Management System (CMS), Traffic Information System
(TIS), Geographic Information System (GIS) and a Routine Maintenance Management System
(RMMS). These were successfully established, populated with data for the approximately 20,500
km of the National Roads. The project road specific data will be obtained from the above data
bases and the service level measurements that are to be defined for NERAMP. The NERAMP
project coordinator will produce the bi-annual status and progress reports in time for the bi-
annual supervision missions. The detailed arrangements for project monitoring, including
outcome indicators, baseline data and targets planned to be achieved, are provided in Annex 1.
E. Sustainability
36. There is strong country commitment and ownership of the project. The project was based
on the GoU’s stated interest of introducing OPRC in the Ugandan road sector to address some of
the issues related with current practices. The key stakeholders, including the MoFPED, MoWT,
UNRA, the Parliamentary Committee for Infrastructure and beneficiary groups living along the
roads, have all expressed their commitment to the project. Many development partners have
expressed their support to the project and are keen to support such an approach. The institutional
support that would be provided under the project will bring about the change required for the
preservation of the road assets and the continued application of the OPRC.
37. The sustainability of the road sector program will depend on improved road maintenance
performance. This will require timely and stable availability of maintenance funding, and
capacity of the private sector. In the past, when maintenance of the national roads was under the
MoWT, the quality of maintenance was mixed, as the maintenance budgets were unpredictable
and fluctuating, and as a consequence, planning was difficult and the local construction industry
did not develop adequately. Although maintenance funding amounts are predictable after the
establishment of URF, the budget allocated has never been adequate to cover all the funding
requirements. It is expected that this situation will improve with URF being fully operational as a
second generation road fund, as this will enable it to generate more funds for road maintenance.
12
IV. KEY RISKS AND MITIGATION MEASURES
A. Risk Ratings Summary
Table 2: Risk Summary Table
Risk Category Rating
Stakeholder Risk Moderate
Implementing Agency Risk
- Capacity Substantial
- Governance High
Project Risk
- Design Substantial
- Social and Environmental Moderate
- Program and Donor Low
- Delivery Monitoring and Sustainability Substantial
Overall Implementation Risk Substantial
B. Overall Risk Rating Explanation
38. The major risks in implementation of the project are associated with the operating
environment, mainly a result of the governance challenges such as corruption. Although these
risks are substantial, the Bank, has been working with the Government on mitigation measures
(under the High Level Financial Management Action Plan) some of which will also be applicable
to the project. The Government has put in place comprehensive measures to strengthen the
management of public resources, and to enhance capacity of oversight institutions such as the
Inspectorate of Government. At the national level, the GoU is also committed to carry out
regular extensive forensic audits to monitor VfM in high spending sectors including the transport
sector14
. The governance related issues within the transport sector have been addressed over the
last three years as part of the GAAP developed and implemented under the TSDP. Lessons from
implementation of the GAAP have been considered to formulate mitigation measures to be
implemented under NERAMP. Furthermore, as the major investment in the project goes to
contracts that are under prior review by the Bank, the risks identified could be managed and may
not substantially hinder project implementation.
39. Although UNRA has not implemented OPRC contracts, it has an operational road asset
management unit. This unit has been supported by TA under the Road Development Program
Phase 3 (RDPP3) and TSDP, including setting up the road database and establishing the RAMS
system. In addition, the Bank supported diaspora program deployed TA to identify the change
14
The High Level Government Finance Management Reform Action Plan Matrix agreed by MoFEPD and Development
Partners, December 2012.
13
management process requirements and strategy for rolling out the implementation of modern
road asset management in UNRA. As part of project preparation and through financing under
the TSDP, a major training program was organized for key stakeholders from the implementing
agency, key ministries, the Parliament, PPDA, Office of the Auditor General, local construction
industry representatives etc., to bring them on board. Additional technical assistance will be
provided under the project.
V. APPRAISAL SUMMARY
A. Economic and Financial Analysis
40. The economic and financial analysis was carried out by UNRA through the support of the
consultant firm M/s COWI. The results of the economic analysis for the Tororo-Kamdini
corridor road shows that the proposed project is economically and financially viable. The
analysis assumed an asphalt concrete (AC) overlay and defined maintenance interventions to
determine the associated costs and benefits for each type of maintenance by year of intervention
on each of the seven road sections in the Tororo-Kamdini corridor. The analysis was undertaken
using the Highway Design and Management Model, Version 4 (HDM4) and was based on a
recent traffic survey and an assessment of both the current condition and the residual life of the
pavement. The economic evaluation compared the actual and estimated costs and benefits, based
on present and projected traffic volume, the project road condition, the characteristics of the
vehicles using the road, the vehicle operating costs, and the unit costs associated with the
identified interventions.
41. The conceptual design considered five possible options (scenarios) based on: (a) the
thickness, timing, frequency of AC overlay activities; and (b) the different possibilities for the
completion and/or termination of the current contract for the reconstruction of the Tororo-Mbale-
Soroti section. The details of the technical options considered are provided in Tables 2.3 and 2.4
of Annex two. Comparative costs and benefits analysis of the five scenarios were calculated
based on different road rehabilitation and maintenance strategies based on different service level
standards, timing and packaging of interventions. Findings of the analysis are shown in Table 3
below, with the details provided in Annex 6.
42. The preferred scenario 3A was chosen as it returned a NPV of US$8.2 million and an
EIRR value of 13.4 percent under the base case. Whilst these returns were slightly lower than
those for scenario 3, an NPV of US$8.7 million and an EIRR of 13.5 percent, Scenario 3A was
the preferred option as it was found: (i) to provide a better residual pavement strength at the end
of the OPRC contract period, (ii) provide the best value for money from the current contract; and
(iii) it avoids possible costs and reputational risks associated with the termination and waiver of
Defects Liability Period (DLP) under an ongoing road improvement works contract on the
Tororo-Mbale-Soroti section of the road corridor.
14
Table 3: EIRR and NPV Results of the Economic Analysis
Traffic
scenario
Scenario 1 (Scheduled
maintenance)
Scenario 2
(Scheduled
maintenance)
Scenario 3 (3A)
Scheduled maintenance)
Scenario 4
(Responsive
Maintenance)
NPV EIRR NPV EIRR NPV EIRR NPV EIRR
All
Sections
High -3.8 11.6% -1.3 11.8% 19.3 (18.8) 15.0% (15.0%) 9.4 13.7%
Base -14.4 10.3% -11.9 10.5% 8.7 (8.2) 13.5% (13.4%) 0.0 12.0%
Low -24.6 8.8% -22.0 9.0% -1.4 (-1.9) 11.7% (11.6%) -7.4 10.5%
43. Rationale for Public Involvement. Road transport as the predominant mode of transport
has been an engine of growth and socio-economic development in Uganda and the countries in
the sub-region. The road corridor under this project requires long term support to provide
dependable and efficient service as one of the main corridors serving local and international
traffic. The project corridor, apart from providing a cost effective transport system for economic
activity, especially for agricultural development in the project area, has been serving as the main
access route to the northern part of Uganda, south eastern DRC and South Sudan. Therefore, the
project has a very strategic importance and is a public asset that needs to be preserved. As the
current traffic level on the corridor is not sufficient to attract private financing, the option for
Public Private Partnership (PPP) for a design build, operate and transfer arrangement was not
considered. Road safety improvement is included in the project as it falls under the social and
public responsibility of the Government.
44. The Bank’s Value Added. The GoU gives high strategic importance to efficient, optimal
and timely use of public resources allocated to the road sector, so as to develop and keep the road
network in a good condition. As part of this effort, the road asset management system to support
the long term preservation of the transport system has been rolled out under the RDPP3 and
TSDP. The Bank is further responding to this need by sharing its worldwide experience in the
application of good road asset management practices, including the OPRC. The Bank, together
with other DPs, have been engaged in continuous dialogue and has provided support to improve
procurement and contract management, as well as, social and environmental management
capacity of UNRA. This project will build upon and enhance previous efforts.
B. Technical
45. The conceptual design for the road, which was the basis for determining the technical
viability and costs of the interventions proposed, was prepared by M/s COWI with funding under
the TSDP. Various surveys and investigations have been undertaken to serve as a basis for the
assessment of appropriate service levels and performance indicators, conceptual design, and
financing strategy. The road safety assessment of the road corridor provided the list of road
safety measures that will be included in the OPRC.
46. As the OPRC shifts a large portion of the risk of road construction and maintenance to
the contractor, 35 risks related to road design, works contract execution, and operation and
15
maintenance have been assessed and allocated to be borne by the contractor, employer, and a
few of them to be shared by both parties. The bidding documents for the OPRC and contract
clauses are prepared based on this risk allocation. The bidding documents also include (i) the
works specifications both at the design and implementation stages, (ii) the performance
specifications and level of service requirements, (iii) the financial and associated payment
models, (iv) the forms and models of contract guarantees and (v) the standard drawings. This
would provide the bidders with background information relevant for preparing realistic bid prices
for the works under the OPRC. Annex 2 has further details on the risk identification and
allocations under the OPRC.
47. The project road corridor has three distinct sub-sections primarily due to heterogeneity
both in terms of time and nature of prior rehabilitation and maintenance interventions executed.
These are: (a) Tororo-Mbale-Soroti section (151 km), which has substantially deteriorated due to
increased traffic and has been under staged reconstruction since 2010. The road is being
rehabilitated by constructing with double bituminous surface treatment (DBST) on pavement that
consists of 200 mm mechanically modified base, 200 mm natural gravel, and 300 mm natural
gravel sub-grade; (b) Soroti-Lira Road (123 km) that was upgraded from gravel to a paved
(bitumen) standard in 2010, through an IDA financing, and is still in a good condition though
some failures have started in roundabouts that were not constructed in rigid pavement; and (c)
Lira-Kamdini Road (66 km) which was constructed in 1968 and which has received periodic
maintenance, through a contract financed by the European Commission (EC), and completed in
August 2011. The road is still in fair condition but failures have started in swamp areas. The
conceptual design for the Tororo-Mbale-Soroti section of the road is based on the consultant’s
pavement assessment for 82 km of roads completed at the end of September 2013. The pavement
assessment for the remaining 69 km section of the road will be carried out after the deadline for
handover of the section of road by the current contractor to UNRA. The Soroti-Lira and Lira-
Kamdini sections of the road are readily available for the OPRC contractors, while the Tororo-
Mbale-Soroti section will be available as soon as the implementation of the ongoing contract is
completed. The contract completion date is June 2014.
48. The OPRC for the project road is expected to comprise the following: (a) rehabilitation
and improvement works, on the Lira – Kamdini section of the road; (b) routine, periodic, and
emergency maintenance works including strengthening by AC overlay for all sections of the
road; (c) management services that includes testing and inspections to predict the future traffic
volume, load, and road condition, in order to plan the maintenance activities; and (d)
implementation of proposed safety measures, including undertaking road safety sensitizations,
education and awareness campaigns and axle load control and surveys. The contractor is fully
responsible for the design of the works which are necessary to reach the required service levels,
and the durability and performance of the roads over the prescribed life of the road. The
payments to be made to the contractor will not be based on quantities of works measured by unit
prices for work inputs, but on measured “outputs” reflecting the target conditions of the roads
under the contract. In other words, “what the roads are supposed to look like”, expressed through
“Service Levels.” The duties of the contractor will include maintenance of the road at the service
levels as defined in the contract, carrying out the regular maintenance operations historically
undertaken by a maintenance station.
16
C. Financial Management
49. Financial Management (FM) arrangements will be based on those used for the ongoing
TSDP and past IDA financed projects. UNRA has implemented several projects and is currently
implementing two IDA credits and a trust funded grant (totaling US$271 million). The Executive
Director of UNRA will be the overall accounting officer and the day-to-day financial
management operations will be handled by the Finance Department headed by the Director of
Finance and Administration who supervises the overall FM arrangements including a dedicated
Project Accountant.
50. Previous audits and World Bank reviews have however, highlighted risks pertaining to
price adjustments for ongoing road works leading to excess payments, inter-project borrowing of
funds, and lack of full operation of the internal auditing function. The accounting system also
needs an upgrade to increase functionality. The proposed action plan to be implemented by
UNRA to strengthen the financial management arrangements are detailed in Annex 3.
D. Procurement
51. Procurement will be carried out by the UNRA Procurement Directorate with technical
inputs from the Planning, Projects and Operations Directorates. UNRA has well established
institutional and governance structures for the processing of tenders with the Procurement and
Disposal Unit (PDU), and the Contracts Committee (CC) in place. The Solicitor General has the
responsibility of approving contracts on behalf of the GoU. UNRA has experience in managing
procurement under Bank financed projects. The capacity assessment of UNRA was carried out
by the Bank in July and September 2013 to review staff skills, current workload, quality and
adequacy of supporting and control systems, and legal and regulatory frameworks. The key risks
are delays in processing procurement, weak contract management, lack of sufficient number of
competent procurement staff and weak coordination between Directorates. (See Annex 3.)
52. Procurement under the project will be carried out in accordance with the World Bank’s
"Guidelines: Procurement under International Bank for Reconstruction and Development (IBRD)
Loans and IDA Credits" dated January 2011; and "Guidelines: Selection and Employment of
Consultants by WB Borrowers" dated January 2011; Guidelines on Preventing and Combating
Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated
October 15, 2006 and revised in January 2011; and the provisions stipulated in the Legal
Agreement.
E. Social (including Safeguards)
53. The project involves the rehabilitation and maintenance of an existing road corridor.
Social impacts intrinsic to rehabilitation and maintenance works are localized and readily
mitigated. However, Operational Policy (OP) 4.12, is triggered because there could be some land
acquisition for possible road re-alignment, borrow-pit areas, workers camps, equipment storage
areas and quarry sites which may have substantial social impacts. In addition, the road corridor
that passes through urban centers and market areas may have expanded in the right of way and
require temporary or permanent relocations. Deviation from the present alignment will probably
be for engineering reasons or to avoid or minimize resettlement.
17
54. GoU prepared a Resettlement Policy Framework (RPF) and disclosed it in-country and at
the Bank’s Infoshop on February 7, 2014. The RPF will guide the land acquisition required
within the right-of-way as well as extended land acquisition for the complementary activities of
the road rehabilitation and maintenance over the project life. The RPF was chosen as the
resettlement instrument to be prepared prior to appraisal because the contract arrangements
require final design to be done by the OPRC contractor. During implementation, the
Resettlement Action Plans (RAPs) will be prepared based on the detailed designs. The RPF
provides step-by-step procedures for determining the necessity of the RAP and the guidelines for
its preparation, including the procedures for consultations with potentially affected individuals,
households, businesses and local governments, the process for disclosure of entitlements, and the
establishment of a grievance mechanism. The RPF and its implementation responsibility will be
included as part of the bidding documents for the OPRC contractor. Construction related social
impacts will be addressed within and by the Environment and Social Management Framework
(ESMF).
55. The RAP will be prepared by the contractor. It will be reviewed by the Project Manager
who will be responsible for the administration and supervision of the contract. The Project
Manager will closely work with and be guided by UNRA’s Safeguards unit in the review and
implementation of the RAP. The RAP prepared by the OPRC contractor will also be reviewed by
an independent consultant to ascertain the validity and comprehensiveness of the initial RAP
assessment report. The RAP report(s) will then be reviewed and agreed by the UNRA safeguard
unit and cleared by the Bank for disclosure to the public prior to commencement of the civil
works. The GoU will finance the RAP implementation activities and UNRA will ensure that the
RAP compensation and resettlement costs are appropriately reviewed and approved by the Office
of the Chief Government Valuer before passing it to the contractor for administration. The
contractor’s team will include qualified staff to implement and report on social aspects including
implementation of the RAP. The Project Manager will be supported with a designated qualified
resource person (Sociology/Social Scientist and Right of Way officer) to monitor and report on
progress of the RAP implementation.
F. Environment (including Safeguards)
56. The project has been assigned Environmental Category B because it supports the
rehabilitation and maintenance works of an existing road. The project triggers the safeguards
policy on Environmental Assessment OP 4.01 because the program will support investments
with potentially adverse environmental impacts. The Natural Habitats OP 4.04 is also triggered
because the works may impact on the existing ecosystems along the road including but not
limited to major wetlands, forest plantations adjacent to the road; Forests OP 4.36 applicable
because the road improvements may have impacts on the adjacent forest plantations; Physical
Cultural Resources OP 4.11 is triggered because project investments will involve civil works that
may potentially affect both known and unknown physical cultural resources (PCR) along the
road corridor. As result a chance find procedure for PCR has been developed as part of the
ESMF and will be implemented during contract implementation. Where applicable, the ESMPs
will incorporate the management of impacts of the project on the forest and natural habitats.
57. The Environmental and Social Management Framework (ESMF) was developed for the
18
project in close consultation with Government Central Agencies, and District Authorities through
which the road corridor traverses. The ESMF was disclosed in-country and at the Bank’s
Infoshop on February 7, 2014. The ESMF was chosen as the instrument because the contract
arrangements require the final design to be prepared by the OPRC contractor. The ESMF
provides guidance for assessing the potential environmental and social impacts of the project
during implementation. It also established clear guidelines and methodologies for the
identification and assessment of environment and social impacts. It gives clear guidance for
environmental screening, preparation of environmental assessments with basic TORs, as well as
preparation of Environmental and Social Management Plans (ESMPs). The site specific
Environmental and Social Impacts Assessments (ESIA) including site ESMPs will be prepared
and disclosed before commencement of any civil/road works.
58. The safeguards capacity assessment of the implementing agency UNRA indicates that the
agency has sufficient experience in the implementation of World Bank financed projects and has
knowledge of the environmental and social safeguards requirements. There is an established
Safeguards Unit under the Directorate of Planning, though it is understaffed. UNRA has one
environmental specialist to coordinate, supervise, monitor and report on the implementation of
the environmental aspects of all road projects. UNRA has experienced implementation
challenges under its ongoing projects. The key challenges under TSDP include, inadequate
monitoring and supervision by the safeguards staff, inability to ensure timely conduct of relevant
environmental assessments for stone quarries, limited management and follow-up of
environmental and social impacts, and irregular submission of the required quarterly
environmental reports. The current staffing level is overwhelmed by the numerous projects
UNRA is undertaking. UNRA will recruit an additional Environmental Specialist, who will be
designated to handle World Bank projects, within 12 months of project effectiveness. The details
on the social and environment safeguards of the project are provided under Annex 3.
G. Other Safeguards Policies Triggered
59. There are no other safeguards policies triggered.
19
Annex 1: Results Framework and Monitoring
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP) .
Results Framework .
Project Development Objectives .
The PDO is to reduce transport costs, enhance road safety, and improve and preserve the road assets sustainably by applying cost effective
performance based asset management contracts, along the Tororo -Kamdini road Corridor.
These results are at Project Level .
Project Development Objective Indicators
Cumulative Target Values Data Source/
Responsibility
for Data
Indicator Name Core Unit of
Measure Baseline
YR
1 YR
2 YR
3 YR
4 YR
5 YR
6 YR
7 YR
8 YR
9 YR
10 End
Target Frequency
Methodology Collection
Road sections in
good, fair &
poor condition
as a share of
total length of
the Tororo- Kamdini road
Percentage
Good 89 89 92 96 100 100 100 100 100 100 100 100
Annually
Data to be
generated
from OPRC
preparation
and PM
reports and
reported by
implementing
entity UNRA
Project Manager Percentage
Fair 2 2 8 4 0 0 0 0 0 0 0 0
Percentage
Poor 9 9 0 0 0 0 0 0 0 0 0 0
Travel time Hours 6.0
6 5.5 5.3 5 4.2 4.2 4.2 4.2 4.2 4.2 4.2 Annually
Same as
above Project Manager
/ UNRA
Vehicle
Amount 0.3 0.30 0.30 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 0.27 Annually Same as Project Manager
20
Operating Cost (USD ) per
Km/ veh
equivalent
above
Reductions in
Road Accidents
on the project
road
Percentage 0 5 10 20 30 40 50 50 50 50 50 50 Annually
Data from PM
report, crash
data base to
be reported by
UNRA
Project Manager
and MoWT
Direct project
beneficiaries
Number
(million) 2.25 2.65 3.11 3.33 3.56 3.80 4.06 4.26 4.46 4.68 4.90 5.14 Annually
progress
report by
implementing
entity
UNRA
Female
beneficiaries
Percentage Sub-Type Supplemental
5 7 15 25 30 30 30 30 30 30 30 30 Annually
progress
report by
implementing
entity
UNRA
.
Intermediate Results Indicators
Cumulative Target Values Data Source/
Responsibility
for
Indicator Name Core Unit of
Measure Baseline
YR
1 YR
2 YR
3 YR
4 YR
5 YR
6 YR
7 YR
8 YR
9 YR
10 End
Target Frequency
Methodology Data Collection
Annual Road
Inventory to
update RMS
Yes/No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Annually
RAMS
information
to be reported
by
implementing
entity
Contractor and
Project
Manager
Annual network
investment plan
prepared using
the established
Yes/No NO Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Annually
Progress report
by
implementing
entity
UNRA
21
asset
Management
system
Road safety
Audits carried
out
Number 0 1 1 1 1 1 2 2 2 3 3 3
Three
times in
project
life
Audit report
by T&F Audit
Consultant
Technical &
Financial
Audit
Consultant
Roads
rehabilitated,
Non-rural
Kilometers 151 151 157 0 0 0 0 0 0 340 340 340 Quarterly PM progress
report UNRA
Roads
Maintained Kilometers 189 189 183 340 340 340 340 340 340 340 340 340 Quarterly PM progress
report UNRA
Percentage no of
trucks
overloaded
Percentage 56 56 50 40 30 25 20 15 10 5 5 5 Annually PM progress
report UNRA
No of People
trained in asset
management
related areas
Number 3 0 4 7 10 13 16 19 22 25 28 28 Annually
progress report
by
implementing
entity
UNRA
22
Annex 1: Results Framework and Monitoring .
UGANDA: North Eastern Road-corridor Asset Management Project (P125590) .
Results Framework .
Project Development Objective Indicators
Indicator Name Description (indicator definition etc.)
Road sections in good, fair & poor condition as a share
of total length of the Tororo- Kamdini road
Percentage of the total project road corridor that is in good and fair condition
depending on the road surface and the level of roughness. The Supplemental value is
the total Corridor length. The conditions of the project road in good, fair and bad
conditions are based on detailed inventory data carried out on the project road corridor.
The data are available in project files.
Good Base Data on road roughness measurements available by section of road. IRI reading
2-3 m/km is classified as good.
Fair Base Data on road roughness measurements available by section of road. IRI reading
3-4.5 m/km is classified as fair.
Poor Base Data on road roughness measurements available by section of road. IRI reading
4-6.5 m/km is classified as bad.
Travel time The travel times are showed to be reducing on the Tororo – Kamdini from 6 to 4.2
hours
Vehicle Operating Cost The Vehicle operating Cost in US$ per km per vehicle equivalent is showed to be
reducing over the 10 yr period on the road corridor to be updated by the PM of the
OPRC
Reductions in Road accident on the project road The base line figures the average of number of fatal, serious, and minor accidents per
year on the road corridor are being collected. Percentage reductions for fatal, serious
and minor accidents are proposed for the OPRC corridor over the 10 year period.
23
Direct project beneficiaries Direct beneficiaries are people or groups who directly derive benefits from an
intervention (i.e., children who benefit from an immunization program; families that
have a new piped water connection).
Female beneficiaries Based on the assessment and definition of direct project beneficiaries, specify what
percentage of the beneficiaries are female. Population growth rate and current ratio of
females to males currently living in Uganda has been considered. .
Intermediate Results Indicators
Indicator Name Description (indicator definition etc.)
Annual Road Inventory to update RMS Annual road inventory to be carried out on project road.
Roads rehabilitated, Non-rural Kilometers of all non-rural roads reopened to motorized traffic, rehabilitated, or
upgraded under the project. Non-rural roads are roads functionally classified in
various countries as Trunk or Primary, Secondary or Link roads, or sometimes Tertiary
roads. Typically, non-rural roads connect urban centers/towns/settlements of more
than 5,000 inhabitants to each other or to higher classes of road, market towns and
urban centers. Urban roads are included in non-rural roads.
Roads Maintained Km of the corridor that have received routine or periodic maintenance intervention
Reduced no of trucks overloaded Percentage of reduction in trucks overloaded considering the current percentage of
overloaded trucks using the road.
Road safety Audits carried out Safety audit at the beginning, mid-year and project final stage
No of people trained in asset management People trained in related areas to road asset management
24
Annex 2: Detailed Project Description
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP)
Background
1. The North Eastern Road Corridor is a high priority road for the Government of Uganda
(GoU), as the country aspires to serve as a land bridge to the neighboring countries. This position
was confirmed with the formal request from GoU for an International Development Association
(IDA) support to the NERAMP to improve and preserve the 340 km Tororo–Mbale–Soroti-Lira-
Kamdini road through a long term asset management contract. The infrastructure bottleneck on
the route is a major constraint for sustainable economic growth, Uganda’s trade competitiveness
and regional integration.
2. Given that working with performance-based road contracts involves a paradigm shift
from current practice of civil works contracting and management, Uganda National Road
Authority (UNRA) held a sensitization workshop for three days, in August 2013. The workshop
was attended by members of the Parliamentary Committees on Infrastructure and National
Economy and Development, officials from different government institutions, donors,
consultants, civil society and contractor representatives to boost their understanding and
appreciation of the Output and Performance-based Road Contract (OPRC) concept. The
workshop, conducted in Kampala by the International Road Federation (IRF), helped in
sensitizing the stakeholders about the OPRC initiative. The feedback obtained from the
workshop indicated that the project objective is now owned by the key stakeholders.
Furthermore, the GoU has adopted the OPRC strategy on the corridors as opposed to the earlier
concept of introducing an Area-wide Performance-based Road Contracts, in response to the
concerns of the local construction industry.
Component 1 - Road Rehabilitation, Operations and Maintenance (US$241 million)
3. This component will finance a long term OPRC on the Tororo-Mbale-Soroti-Lira-
Kamdini road. The works and services will include: (a) the design, rehabilitation of sections of
the road corridor; (b) routine and periodic maintenance of the whole corridor; and (c) road safety
measures and traffic management, and axle overload control. This component will also finance
consultancy services for the Project Management that will be responsible for administering and
supervising the OPRC contracts.
4. The conceptual design for the road formed the basis for determining the technical
viability and costs of the interventions proposed over the road corridor. Various surveys and
investigations have been undertaken that served as a basis for the assessment of appropriate
service levels, conceptual design, financing strategy etc. This will provide the bidders with
background information relevant for preparing realistic bid prices for the works under the OPRC.
5. Surveys and investigations. The following surveys and investigations have been carried
out: (a) detailed road reconnaissance and inventory records to define the existing road assets; (b)
traffic surveys comprising assessment of previous traffic survey data, undertaking classified
traffic counts for one week (5 days of 12 hours and 2 days of 24 hours) at 9 locations along the
road corridor as well as combined axle load and origin-destination survey for 3 days of 24 hours
using the existing stationary weigh bridge at 46.2 km just south of Mbale; (c) visual pavement
25
condition surveys with recording at 1 km interval of 15 parameters; (d) roughness surveys by
bump integrator to determine International Roughness Index (IRI) for both the north-bound and
south-bound traffic lane of the entire road corridor; (e) Falling Weight Deflectometer (FWD)
measurements for the paved sections of the road with measurement points at 100m staggered
between the two road sides and using Standard FWD equipment; (f) Drainage Structure
Inventory comprising recording of type, size, length of all cross drainage bridge; and (g)
hydrological assessment with determination of catchment areas on the basis of existing 1:50,000
topographical maps and with runoff estimation.
6. The project road corridor. The road has three distinct sections primarily due to
heterogeneity both in terms of time and nature of prior rehabilitation and maintenance
interventions executed. The characteristics of the different sections of the road are summarized in
the Table 2.1.
Table 2.1: Characteristics of the Different Sections of the Road
Section Length Original Construction Previous or ongoing Treatment
Km Year Standard Surfacing End Type Standard Carriage Surfacing
Shoulder surfacing
Status Feb 2013
Toror-
Mbale 49.0 1969 6.0c’way
+2X1.0m
shoulders but 8.0-9.4
c’way in
Mbale & Tororo
DBST Dec,
2013
Staged
reconstruction
6.30m c’way
+
2X1.5SBST shoulders
(2X2.35m
shoulders in urban areas)
DBST SBST 13 km
SBST
Mbale-Soroti 102.0 1970 DBST Mar,
2014 Staged
reconstruction DBST SBST 0 km SBST
Soroti-
Dokolo 67.6 1995-
97
6.00c’way + 2X0.75m
shoulders
Gravel
Mar,
2010 Upgrading to
Bituminous (DBST)
Standard
6.30m way + 2X1.50SBST
shoulders
(2X2.00m shoulders in
urban areas)
DBST SBST
Dokolo-Boroboro 46.9 1995-
97 Sept 2010 DBST SBST
Boroboro-
Lira incl. Lira Bypass
8.5 2000 DBST Sept
2010
Rehabilitation
to DBST DBST SBST
Lira-
Kamidni 66.5 1968 DBST Aug.
2011
Periodic
maintenance DBST SBST
7. Tororo-Mbale-Soroti Road (151 km). The road failed completely, has several severe
pot holes, and is currently under staged reconstruction. The revised contract completion date is
September 30, 2014. The works are carried out to a formation width of 9.3 m and the
carriageway is Double Bituminous Surface Treatment (DBST). As of February 28, 2014, 47.5
km out of the 49 km on the Tororo-Mbale road, and 68 km out of the 103 km of the Mbale-
Soroti road section have been paved with single seal while 13 km of Mbale-Soroti have received
a second seal. This makes a total of 115.5 km. However the contractor has completed 80 km of
sub base works on the Mbale-Soroti road, UNRA has confirmed that the contractor has now
carried out all the preparatory works and has mobilized resources to complete single seal paving
works on both sections by June 2014.
8. The asphalt concrete (AC) overlay design carried out by COWI based recommends a 50
mm AC layer, for this section of the road, for a 20 year design life. The outstanding works are to
be completed as per the agreed design to ensure value for money (VfM) and thus the
recommendations of COWI for the AC layer could also be applicable for the remaining sections.
As some FWD readings have shown that there are some local weak spots in the completed
section of the road, these spots will be improved under the ongoing contract to attain the required
strength.
26
9. Soroti – Lira Road (123 km). Upgrading of this road from gravel to paved standard was
financed by an IDA Credit Road Development Program Phase 3 (RDPP3) and the works under
two contracts for Soroti to Dokolo and Dokolo-Lira road sections were completed in March 2010
and September 2010 respectively. Despite the increased traffic, the road is still in a good
condition but failures have started in the roundabouts that were not constructed in rigid
pavement. In any future development, the first intervention should be on the roundabouts and in
the meantime, UNRA will be maintaining the defects noted. The cost estimate for this section of
the road is based on the conceptual design providing an asphalt concrete overlay along with
routine and periodic maintenance during the remainder of the contract period.
10. Lira-Kamdini Road (66 km). This road was constructed in 1968 and has been receiving
routine maintenance up until 2009 when the periodic maintenance of the road was carried out
with financing from the EC. The works were completed in August 2011. Despite the increased
traffic, the road is still in a fairly good condition but failures have started in the low swampy
areas. The cost estimate for this section is based on the conceptual design providing for its
reconstruction over some sections of the road along with routine and periodic maintenance.
11. Scope of OPRC. The scope of the OPRC is expected to comprise the following: (a)
rehabilitation and improvement works on the Lira–Kamdini section of the road; (b) routine,
periodic, and emergency maintenance works including strengthening by 50 – 95 mm asphalt
concrete (AC) for all sections of the road; and (c) management services that includes testing and
inspections from which the contractor can predict the future traffic volume, load, and road
condition, in order to plan the maintenance activities. The contractor is fully responsible for the
design of the works which are necessary to reach the required service levels, and the durability
and performance of the roads over a longer period. The payments to be made to the Contractor
are not based on quantities of works measured by unit prices for works inputs, but on measured
“outputs” reflecting the target conditions of the roads under contract i.e. “what the roads are
supposed to look like”, expressed through “Service Levels.” The duties of the Contractor will
include maintain the road at the service levels as defined in the contract, carrying out the regular
maintenance operations historically undertaken by a maintenance station of UNRA, together
with all the necessary management. Based on the test results including FWD the consultant
proposes the following interventions for the different sections of the road.
Table 2.2: Proposed Interventions for the Different Sections of the Road
Description AC Overlay Thickness (mm)
Road Section Tororo-Mbale-Soroti Soroti - Lira Lira - Kamdini
Design Life (years) 20 20 20
Design Method ELMOD1 50 55 75
Design Method SN Methodi2 80 85 (70)
3 90
1 Structural Number (SN) pavement design method
2 Overlay design based on the FWD measurements done by means of the ELMOD5 computer program 3 When taking account of the actual high quality and self-cemented crushed aggregate base a 70 mm AC overlay is required
12. Project Road Assets. The specific road related assets and items that are to be maintained
under the OPRC include: (a) pavements comprising carriageway, shoulders, bus bays and
junctions up to the right-of-way (ROW) limits being 25 m each side of the centerline in rural
areas, but reduced in urban sections; (b) Embankments and cut slopes; (c) drainage structures;
(d) roadside drainage; and (e) signs, road marking and other road safety features.
27
13. Implementation Scenarios. Five implementation scenarios were considered for the
rehabilitation and improvement works for the OPRC as shown on the Table 2.3 and 2.4. Under
three of the scenarios, scenarios 1, 3 and (3A), the OPRC contractor will take over the entire 340
km Tororo – Kamdini road at the start of the contract period. Under Scenario 2 and 4 the taking
over of Lot 1 (Tororo-Mbale-Soroti section) is delayed by 1 year to allow for the completion of
the on-going rehabilitation of that section plus the further 12 months Defect Liability Period
(DLP). According to conceptual pavement design based on the FWD measurements and 20 years
design life there is a need to strengthen the pavement of the road corridor by about 35 to 85 mm
AC. In Scenario 1 this is done during an initial 2 year period, while it is postponed by 1 year for
Scenario 2 and Scenario 3A. Furthermore, staged strengthening is made in Scenario 3 and 3A
with initial 35 mm followed by 35 – 55 mm AC overlay some 6 years later. The Scenario 3A
has been chosen as the preferred option as the staged AC overlay will be provided within the
OPRC period, and does not require the termination and modifications of the ongoing contract.
Table 2.3: Description of Options/ Scenarios Considered Scenario Overview of Scenario description Technical description of Scenario
Scenario 1 AC Overlay for full 20 year design period during
Year 1 -3, and Termination of ongoing maintenance
contract including DLP on the Tororo-Soroti section
(151 km) by June 2014.
35 - 95 mm AC Overlay placed in the different
sections during Year 1 - 3 and Tororo-Soroti section
to be completed with SBST by the current contract
and/or the OPRC Contractor.
Scenario 2 AC Overlay for full 20 year design period during
Year 1 -3 and Tororo-Soroti section will be included
under NERAMP only after end the current Contract
incl. DLP by 31.03.2015.
35 - 95 mm AC Overlay during Year 2 - 4 and
Tororo-Soroti section to be completed with DBST
by the current Contractor
Scenario 3 Staged AC Overlay in Year 1-3 and Year 8-9 and
Termination of the current Contract including DLP
by 31.03.2014.
35- 55 mm AC Overlay in Year 1 - 3 and 35 - 55
mm in Year 8 - 9 and Tororo-Soroti section to be
completed with SBST the current contractor and/or
OPRC Contractor.
Scenario 3A Staged AC Overlay in Year 1-3 and Year 8-9 and no
termination of the current contract incl. DLP (to be
in January and June 2015) for the different sections
and with the contract processing concurrently done
for the whole road corridor with a possible different
hand over of road sections for OPRC Contractor.
35 - 55 mm AC Overlay in Year 1 - 3 and 30 - 40
mm in Year 8 - 9 and Tororo-Soroti section to be
completed with DBST by the current Contractor.
Scenario 4 Stage Overlay in Year 1-3 and Year 8-9 and Lot 1
under NERAMP only after end of current Contract
incl. DLP (assumed by 31.03.2015)
In principle as Scenario 3A, but overlay of 35 mm
triggered in HDM by condition responsive approach
(IRI max. 3.5 m/km )
14. Service Level Standards. The service level standards were defined based on various
technical and practical parameters that include: (a) traffic volume and composition; (b) urban
versus rural sections; (c) flat, hilly or mountainous terrain; (d) sub-grade quality and type; (e)
quality of available construction materials; (f) capacity of available contractors; and (g) any
environmental constraints, such as protected areas, parks, forest reserves, etc. The most
important criterion was what service level can be afforded and economically justified for the
road in question.
28
Table 2.4: Implementation Scenarios (Rehabilitation and Improvement/Strengthening Works)
.
1 Tororo-Molo 21.0 km 50 mm 55 mm .—————— .
2 Molo-Mbale 30.6 km 55 mm 60 mm .—————— .
3 Mbale-Kachumbala 14.4 km 55 mm 60 mm .——— .
4 Kachumbala-Soroti 85.0 km 55 mm 60mm .——————————————— .
5 Soroti-Dokolo 67.0 km 35 - 95 mm 75mm . ——————————————— .
6 Dokolo-Lira 56.0 km 35 - 70 mm 60 mm . ———————————— .
Lot 3 7 Lira-Kamdini 66.2 km 65 - 85 mm 75 mm .————————————————————————————————————————————— .
. .
1 Tororo-Molo 21.0 km 50 mm 55 mm . —————— .
2 Molo-Mbale 30.6 km 55 mm 60 mm . —————— .
3 Mbale-Kachumbala 14.4 km 55 mm 60 mm . ——— .
4 Kachumbala-Soroti 85.0 km 55 mm 60mm . ——————————————— .
5 Soroti-Dokolo 67.0 km 35 - 95 mm 75mm .———————————— .
6 Dokolo-Lira 56.0 km 35 - 70 mm 60 mm .———————————— .
Lot 3 7 Lira-Kamdini 66.2 km 65 - 85 mm 75 mm .——————————————————————————————————————— .
. .
1 Tororo-Molo 21.0 km 35 mm 35 mm 30 mm 30 mm .—————— —————— .
2 Molo-Mbale 30.6 km 35 mm 35 mm 30 mm 30 mm .—————— —————— .
3 Mbale-Kachumbala 14.4 km 35 mm 35 mm 30 mm 30 mm .——— ——— .
4 Kachumbala-Soroti 85.0 km 35 mm 35 mm 30 mm 30 mm .——————————————— ———————————— .
5 Soroti-Dokolo 67.0 km 35 - 55 mm 45 mm 30 - 40 mm 35 mm . ——————————————— ———————————— .
6 Dokolo-Lira 56.0 km 35 - 45mm 40 mm 0 - 35 mm 25 mm . ———————————— ———————————— .
Lot 3 7 Lira-Kamdini 66.2 km 35 - 55 mm * 45 mm 30 - 35 mm 35 mm .————————————————————————————————————————————— ———————————— .
. .
1 Tororo-Molo 21.0 km 35 mm 35 mm 30 mm 30 mm . —————— —————— .
2 Molo-Mbale 30.6 km 35 mm 35 mm 30 mm 30 mm . —————— —————— .
3 Mbale-Kachumbala 14.4 km 35 mm 35 mm 30 mm 30 mm . ——— ——— .
4 Kachumbala-Soroti 85.0 km 35 mm 35 mm 30 mm 30 mm . ——————————————— ———————————— .
5 Soroti-Dokolo 67.0 km 35 - 55 mm 45 mm 30 - 40 mm 35 mm .———————————— ———————————— .
6 Dokolo-Lira 56.0 km 35 - 45mm 40 mm 0 - 35 mm 25 mm .———————————— ———————————— .
Lot 3 7 Lira-Kamdini 66.2 km 35 - 55 mm * 45 mm 30 - 35 mm 35 mm .——————————————————————————————————————— ———————————— .
. .
1 Tororo-Molo 21.0 km 35 mm 35 mm 30 mm 30 mm . —————— ——————.2 Molo-Mbale 30.6 km 35 mm 35 mm 30 mm 30 mm . —————— ——————.
3 Mbale-Kachumbala 14.4 km 35 mm 35 mm 30 mm 30 mm . ——— ———.
4 Kachumbala-Soroti 85.0 km 35 mm 35 mm 30 mm 30 mm . ———————————————5 Soroti-Dokolo 67.0 km 35 - 55 mm 45 mm 30 - 40 mm 35 mm .————————————6 Dokolo-Lira 56.0 km 35 - 45mm 40 mm 0 - 35 mm 25 mm .————————————
Lot 3 7 Lira-Kamdini 66.2 km 35 - 55 mm * 45 mm 30 - 35 mm 35 mm .———————————————————————————————————————. .
Legend: Note:
AC Overlay * About 6.2 km require reconstruction (rew orking existing base,new 150mm CRR and 40mm AC )
Sectional Reconstruction
9Description Lot Section Length
AC Overlay
Year 1-3
AC Overlay
Year 8-9
1 8
Q2Q4Q1 Q2 Q3 Q4 Q1 Q2 Q1Q1 Q4
10
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
3 4 5 6 7
Q2 Q3 Q4 Q1 Q2
Additional
overlay only
triggered in
Pro ject Year
11, 12, 13, 14Lot 2
Q3 Q4Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4
Additional
overlay only
triggered in
Pro ject Year
9, 10, 11
Lot 2
Q1Q2 Q3 Q4
Dott Serv ices
Defects
Liability
Period
Sc
en
ari
o 2 35 - 95 mm AC Overlay
during Year 2 - 4
(Lot 1 to be completed
w ith DBST by DOTT
Services)
Lot 1
Dott Serv ices
Defects
Liability
Period
Sc
en
ari
o 1 35 - 95 mm AC Overlay
during Year 1 - 3
(Lot 1 to be completed
w ith SBST by DOTT
Services or OPRC
Contractor)
Lot 1
2Avg. AC
for HDM
Avg. AC
for HDM Q3
Additional
overlay only
triggered in
Pro ject Year
12, 14, 16
Lot 2
Sc
en
ari
o 3
35 - 55 mm AC Overlay
in Year 1 - 3 and 35 - 55
mm in Year 8 - 9
(Lot 1 to be completed
w ith SBST by DOTT
Services or OPRC
Contractor)
Lot 1
Lot 2
Sc
en
ari
o 4 In principle as Scenario
3A, but overlay of 35mm
triggered in HDM by
condtion responsive
approach
(IRI max. 3.5 m/km)
Lot 1
Dott Serv ices
Defects
Liability
Period
Sc
en
ari
o 3
A 35 - 55 mm AC Overlay
in Year 1 - 3 and 30 - 40
mm in Year 8 - 9
(Lot 2 + 3 tendered in
2014 and Lot 1 after
end of Dott's Defects
Liability Period)
Lot 1
Lot 2
29
15. With a current ADT of vehicular traffic on the road varying from 509 to 872 (average
about 690) and projected to increase to 990 – 1,725 (average about 1,360) after 10 years, it is
considered appropriate to apply the “Good” to “Very Good” Service Level Standard for the
entire road. The current average IRI for the road varied from 3.6 m/km of the Toror- Mbale
section 3.1 m/km for the Sorti-Lira section. The current maximum for any one km is 4.8 m/km.
The proposed IRI for the OPRC is average of 2.2 m/km and maximum 3.5 m/km for any one-km
section. The details on the IRI recommendations and other level of service (LOS) requirements
are included in report 2 of COWI dated October 29, 2013.
16. Performance Criteria. The OPRC specification defines three groups of performance
measures: (a) road user service and comfort measures expressed in terms of - road roughness,
skid resistance, road and lane width, pavement edge condition, vegetation control, availability of
each lane-km for use by traffic, response times to rectify defects compromising the safety of road
users, attendance at road accidents, drainage off the pavement, and road signs, and other safety
furniture; (b) durability performance measures expressed in terms of - pavement strength,
cracking, rutting, the extent of repairs permissible before a more extensive periodic maintenance
treatment is required, paved shoulders, degree of sedimentation in drainage facilities; and (c)
management performance measures which define the information the Employer requires both to
govern the asset during the term of the contract, and to facilitate the next tender round. These
performance criteria are specified as minimum requirements/Levels of Service as the Contractor
may decide to construct and maintain a road using alternative solutions or materials which may
initially be expensive, but will reduce the maintenance cost.
17. The contractor must continuously monitor and control the road conditions and level of
service for all roads or road sections under the contract. This will not only be necessary to fulfill
the contractual requirements, but is also an activity which will provide him with the information
needed to: (a) know the degree of his own compliance with level of service requirements; and (b)
define and plan, in a timely fashion, all physical interventions required to ensure that service
quality indicators never fall below the indicated thresholds. Together with his periodic invoice,
the contractor will report the result of his own evaluation of compliance with the required level
of service, based on his own monitoring system which is mandatory. His statement will then be
verified by the project manager on behalf of UNRA through inspections. If the level of service is
not met in any given month, the payment for that month may be reduced based on a schedule
given in the contract or even suspended.
18. Risks under the OPRC. The level of risk taken by the contractor which is lowest in the
input based contracts, increases significantly in the OPRC contracts. The substantial risk transfer
is undertaken on the premise that the contractor is in the best position to identify the risks and
determine treatments to manage them. The general principle is to transfer the risks associated
with poor construction to the contractor while risks associated with force majeure-type events are
left with the Employer. The contractor is responsible for designing and carrying out the works,
services and actions that are necessary in order to achieve and maintain the agreed level of
service. In such manner, the contractor decides when, where and what to implement, hence
undertakes the majority of risks, which otherwise would stay with the Employer. Therefore, he
has a strong financial incentive to be both efficient and effective whenever he undertakes work.
The contractor needs to have professional management capability to define, optimize and carry
out on a timely basis the physical interventions which are needed in the short, medium and long
term, in order to guarantee that the roads comply with the agreed levels of service.
30
19. As part of the OPRC documents preparation 35 major risks have been identified related
to design, construction, maintenance, operation and management of the road during the OPRC
period. Other risks identified are associated with changes in laws and regulation, forced
measures, damages resulting from road accidents, price escalations and exchange rate
movements, and unforeseen natural phenomena etc. Each of these risks is allocated to the
Employer, the Contractor or is to be shared by both parties. The bidding documents for the
contracts are prepared based on these risks allocation. The risks allocation is detailed enough for
the contractors to come with a cost that would cover all the areas and thus reduce the possible
lack of interest in bidding for the works in addition to minimizing claims during implementation.
20. Cash Flow Models. Cash-flow models have been developed for eight alternatives each
with the three scenarios (1 to 3) for payment schedules for the OPRC contract for the sections
and the entire project road. Alternative 3 to 8 is analyzed for Scenario 3A only, which was found
to be the preferred options. The Table 2.5 below summarizes the two main alternatives for the
cash-flow development resulting in different monthly payments to the contractor over the 120
month OPRC contract period. Alternative 1a and 1b are almost identical as the works to be
carried out and the corresponding monthly payments may not differ significantly between the
two variant of Alternative 1. Alternative 3 to 8 are for scenario 3 only and include variants of
advance payments and transfer of overlay cost to intermediate periods.
Table 2.5: Alternative Cash-flow Models
Alternative
Cash-flow
Models
Management & Maintenance Overlays Improvement &
Emergency Works
1a
Paid at the tendered fixed monthly
rate over the entire 120 months
contract period
According to unit rates and actual
nominal thickness and paid by monthly
certificates by output during period
where the work is undertaken.
When work
actually
undertaken
1b
Total lump sum costs of overlay
according to unit rate and actual
thickness and paid at equal monthly
payment over the months where the
work is undertaken.
2
Total lump sum costs of overlay
according to unit rate and actual
thickness and paid at equal monthly
payment over all 120 months OPRC
contract period.
3-8
3: (10% advance & 20% transfer)
4: (10% advance & 30% transfer)
5: (10% advance & 40% transfer)
6: (20% advance & 20% transfer)
7: (20% advance & 30% transfer)
8: (20% advance & 40% transfer)
Where the financial payments are
distributed over the 10 year lifetime of
the OPRC with various advance
payments (10% and 20%) combined
with respectively 20%, 30% and 40%
transfer of overlay costs to intermediate
periods.
21. Financial cash-flows on a monthly basis have been calculated for scheduled Scenario 1 to
3 for the two main alternatives according to the monthly payment schedules as indicated above.
Scenario 4 (condition responsive maintenance) is furthermore compared to these scenarios. The
alternative cash-flow models show that when applying Alternative 3 - 8, the contractor will in
31
certain periods during the OPRC face financial deficits resulting from the difference in the
monthly payments for the alternatives based on the payments for the works undertaken and equal
payments over the contract period or advance payments with transfer of overlay costs. Short-
term credit facilities have been assumed to financially support the OPRC contractor when there
is a mismatch in the cost of works actually undertaken and the monthly payments causing
temporary cash-flow deficits. The terms and condition of this credit facility will eventually be
negotiated between the contractor and their commercial bank. The Table 2.6 shows the total
payments and the present value (discounted by 10 percent p.a.) of Scenario 3A. Further detailed
cash flow analysis has been prepared with a 15 percent advance and 10 percent retention has
been made for the scenario 3A, that formed the basis for the Disbursement forecast the project.
Table 2.6: Total Payments and Present Value of Payments for Cash Flow USD Scenario 3A
Alternative 1 (monthly payments when works are undertaken)
Total monthly payments 230,393,700
Present Value of Total Payments (10% p.a) 158,295,555
Alternative 2 (monthly payments over 10 years)
Total monthly payments 230,393,700
Total interest expenses 3,464,434
Total payments incl. interest exp. 233,858,134
Present Value (10% p.a.) of Total payments incl. interest exp. 141,168,992
Alternative 3 (Advance payment 10 % plus 20% transfer of overlay costs to intermediate periods)
Total monthly payments 230,393,700
Total interest expenses 663,383
Advance Payments (10%) 19,015,772
Total payments incl. interest exp. 231,057,083
Present Value (10% p.a.) of Total payments incl. interest exp. 143,167,518
Alternative 4 (Advance payment 10 % plus 30% transfer of overlay costs to intermediate periods)
Total monthly payments 230,393,700
Total interest expenses 1,156,756
Advance Payments (10%) 19,015,772
Total payments incl. interest exp. 231,550,456
Present Value (10% p.a.) of Total payments incl. interest exp. 157,404,532
Alternative 5 (Advance payment 10 % plus 40% transfer of overlay costs to intermediate periods)
Total monthly payments 230,393,700
Total interest expenses 1,650,129
Advance Payments (10%) 19,015,772
Total payments incl. interest exp. 232,043,829
Present Value (10% p.a.) of Total payments incl. interest exp. 155,364,053
Alternative 6 (Advance payment 20 % plus 20% transfer of overlay costs to intermediate periods)
Total monthly payments 230,393,700
Total interest expenses 269,901
Advance Payments (10%) 38,031,543
Total payments incl. interest exp. 230,663,601
Present Value (10% p.a.) of Total payments incl. interest exp. 165,202,350
Alternative 7 (Advance payment 20 % plus 30% transfer of overlay costs to intermediate periods)
Total monthly payments 230,393,700
Total interest expenses 668,935
Advance Payments (10%) 38,031,543
Total payments incl. interest exp. 231,062,635
Present Value (10% p.a.) of Total payments incl. interest exp. 163,348,836
Alternative 8 (Advance payment 20 % plus 40% transfer of overlay costs to intermediate periods)
Total monthly payments 230,393,700
Total interest expenses 1,107,489
Advance Payments (10%) 38,031,543
Total payments incl. interest exp. 231,501,189
Present Value (10% p.a.) of Total payments incl. interest exp. 161,519,327
32
Component 2 - Institutional Support to UNRA (US$14 million)
22. This component will finance the following activities to strengthening UNRA’s capacity
the areas OPRC implementation and road asset management.
23. Asset Management Support and Road Safety (US$7.5 million). This component will
finance consultancy services to carry out: (i) data collection on road assets; (ii) life cycle cost
analysis; and (iii) development of output specifications for the long term contracts, monitoring
and evaluation of the performance of pavements and bridges. The data collection service is to
carry out annual road inventory surveys to update the condition of the road asset as input to the
Road Asset Management System (RAMS). The data collected on the road assets will form the
basis for the life cycle cost analysis that will determine the optimal allocation of resources for
preserving the road assets. UNRA will be supported by technical assistance (TA) in carrying out
the life cycle cost analysis. This will enable UNRA to prepare the investment plan and annual
budget for the national road system in an effective manner. The output specifications for the long
term contracts will help in defining national standards and specifications applicable to future
output based contracts. This component will also support UNRA in the preparation of two asset
management contracts for future projects.
24. The road safety component is aimed at the reduction of road traffic injuries and fatalities
by strengthening the road safety management capacity, and reducing level of road crashes in the
project corridor. The component will finance consultancy services for road safety audit,
monitoring and evaluation exercise along with road safety enhancement measures as part of the
OPRC. These activities will closely be coordinated with the ongoing activities supported by the
Bank under the TSDP to implement the National Road Safety Policy, the establishment of a
National Road Safety Authority (NRSA) and development of a National Road Crash Database.
The safety interventions under the NERAMP will build up on the good practices and lesson
learned from “Safe Way Right Way (SWRW) initiative” along the Northern corridor road.
25. As part of its road safety strategy of minimizing road crashes/accidents, in line with the
five pillars of the UN decade of Action, UNRA’s safety unit will play the leading role in the
implementation of the safety interventions of the project, particularly the audit and education
aspects. The unit will also be coordinating and liaising with all key stakeholders, including the
police, the contractor and the National Road Safety Council/ NRSA etc. The unit will follow up
on the NERAMP road safety performance and compliance to requirements of the national road
safety standards and programs.
26. The implementation strategy will include a reactive review of the available accident
historical database and include investigations at those parts of the route experiencing accident
clusters as spots of high accident rating. To this effect, UNRA will hire a consultant with
reputable road safety experience to undertake the Road Safety Audits (RSAs) on the project
corridor. The surveys will be carried out at least three times during the 10 year period; at
commencement of project, after substantial major works are carried out and towards the end of
the 10 year project. The results of these RSAs will guide the safety activities to be carried out in
the corridor in addition to providing an independent review of their implementation.
27. The OPRC Contractor will be responsible for the overall safety performance and traffic
control functions on the road corridor. The implementation of the safety measures included in the
33
OPRC also requires drawing a safety program which will include undertaking road safety
sensitizations, education and awareness campaigns. The strategy should include a reactive
review of the available accident data history and include investigations at those parts of the route
experiencing accident clusters or links with high accident rates. Most importantly, the strategy
should also include proactive identification of risks; with specific interventions aimed at
eliminating or minimizing the risk of injury.
28. Support in Contract Supervision and Management of OPRC (US$5.5 million). UNRA’s contracts management set up is predominantly for managing admeasurement contracts.
The project will finance a consultancy service to organize the contract management and
administration practices in UNRA to ensure that OPRC contracts are appropriately supervised
and monitored. This study among others would also recommend on how asset management could
be well streamlined in the current procedure of UNRA which is developed for managing input
based contracts. In addition, this component will also finance the cost of an Environmental
Specialist, a Sociologist, and a Right of Way Officer who will follow up the day to day
implementation of the ESMF and RPF. This will help to reduce contractual claims arising from
delays related to getting clearance for environment and social related actions, in addition to
improving UNRA’s capacity in safeguards. The cost of financial specialists has also been
included to reinforce the internal control functions of UNRA. The consultancy services contract
that will update contract monitoring system of UNRA, and the support that will be provided to
the implementation of the Construction Sector Transparency (CoST) Initiative , to reinforce good
Governance and accountability in the road sub-sector are also financed under this component. .
29. Road network Operations and Management. UNRA needs to influence planning,
charging, enforcement, control, and information on the national road network in order to operate
the network effectively. Particularly the management of traffic flow, safety and axle load control
has to be enhanced in partnership with contractors and other key stakeholders. Thus to improve
UNRA’s network management capabilities, support will be provided to improve customer
services, axle load control and enforcement. The study preparation and implementation of a
project communication strategy to disseminate useful information to the public, as well as
generate and secure a sustained feedback from all stakeholders, to maintain or improve the
services. This component will also finance a study on how to control axle overload and
streamlining of load control functions in long term asset management contracts.
30. Training. This being a new initiative, a robust training program will be defined and
prepared as an integral part of the OPRC project, to ensure that UNRA and the road sector at
large, appreciate the benefits of OPRC. This will entail, among others, secondment of graduate
Engineers on implementation projects and specialist training to UNRA senior staffs to skill them
in the planning, procurement and supervision of output and performance based contracts.
Training will also be provided to -develop capacity of local construction industry in undertaking
such output based contracts.
31. Operating Costs (US$1.0 million). The Project will finance the costs for the project
implementation that are directly related to project management. The Project’s operating costs
will be incremental expenses incurred based on annual work plan and budget and consisting of,
financial audit fees, expenditures for office supplies, vehicle operation and maintenance,
maintenance of equipment, communication and insurance costs, office administration costs,
utilities, rental, consumables, accommodation, travel and per diem, and salaries of Project staff,
34
but excluding the salaries of civil service, meeting allowances, other sitting allowances, salary
top ups and all honoraria, as further outlined in the Project Implementation Plan
32. Project Costs. Table 2.7 shows the project costs by source of financing and component.
Table 2.7 Project Costs (US$255 million)
Ref. Component Description
Total
(including
Contingencies
and taxes)
IDA
Financing
GoU
Financing
A: Road Rehabilitation, Operations and
Maintenance 241.00 229.80 11.20
A.1 Output and Performance Based Road
Maintenance Contract (OPRC) for Lot 1:
Tororo-Mbale-Soroti Road (151 km) & Lot 2:
Soroti-Lira-Kamdini (189 km) Road
234.00 223.12 10.87
A.2 Consultancy Services for Project Management of
the Tororo-Mbale-Soroti-Kamdini OPRC Project 7.00 6.68 0.33
B. Institutional Support to UNRA 14.00 14.00 0.00
B.1 Asset Management Support and Road Safety 7.50 7.50 0.00
B.2 Support in Contract Supervision and
Management of OPRC 5.50 5.50 0.00
B.3 Project Operating Costs 1.00 1.00 0.00
Total 255.00 243.80 11.20
35
Annex 3: Implementation Arrangements
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP)
A. Project Institutional and Implementation Arrangements
1. The responsibility for project implementation will be with UNRA. The Executive
Director (ED) of UNRA will be the “Accounting Officer” for the project, and would have overall
responsibility for the project funds and implementation of the project. UNRA will be responsible
for the implementation of all the components of the project and will carry out: (a) procurement of
goods, works and consulting services; (b) project monitoring, reporting and evaluation; (c)
organizing supervision missions of the Bank; and (d) Financial Management (FM), maintenance
of proper books of accounts, disbursements preparation of annual financial accounts and audit
arrangements. UNRA will also be responsible for submitting timely and consolidated progress
reports and Interim Financial Reports (IFRs) to IDA. UNRA will employ TA and consultants to
assist to implement the project. The organization structure of UNRA is shown in Figure 1.
2. The preparation by UNRA of a PIP is a condition of effectiveness of this credit. The PIP
will contain or refer to the detailed arrangements and procedures for implementation of the
Project, including, inter alia: (a) institutional coordination and day-to-day execution of the
Project; (b) disbursement and FM; (c) procurement; (d) monitoring, evaluation, and reporting;
(v) procedures, measure and guidelines for environmental management and implementation of
the ESMF and RPF, Environmental and Social Management Programs (ESMPs) and
Resettlement Action Plan (RAPs); and (e) such other administrative, financial, technical and
organizational arrangements and procedures as shall be required for the project implementation.
3. UNRA will have to prepare itself for the paradigm shift from its conventional way of
managing road maintenance contracts from input based to output and performance based
contracts; thus, ensuring the people, processes and procedures required for successfully
implementing the OPRC. Significant progress has been registered to this effect: (a) the newly
installed RAMS which contains the road information database and a Life Cycle Cost Analysis
tool that will enable the organization to make decisions based on up-to-date information, and the
monitoring of the performance of the OPRC contracts, particularly the service levels; and (b) the
organization has embarked on an ongoing training program to ensure management and
operational staff is conversant with the OPRC initiative. Training has been provided by the IRF
in August 2013 to all UNRA Senior Managers as well as other stakeholders.
4. Training. The project will formulate an annual training plan and budget which will be
submitted to the Bank for prior review and approval. The training plan will, inter alia, identify:
(a) the training envisaged; (b) the justification for the training, how it will lead to effective
performance and implementation of the project and or sectors; (c) the personnel to be trained; (d)
the selection methods of institutions or individuals conducting such training; (e) the institutions
which will conduct training, if already selected; (f) the duration of proposed training; and (g) the
estimated cost of the training. Upon completion of training, the trainee shall be required to
prepare and submit a report on the training received. A copy of the training report will be kept
for IDA review. Additionally the NERAMP’s PIP shall specify how candidates eligible for the
graduate training shall be selected. These procedures shall ensure equal opportunity to all eligible
participants.
36
FIGURE 1: Uganda National Roads Authority
Organization
Legal Counsel
UNRA Board
Executive Director
UNRA Contracts Committee
Maintenance Planning & Monitoring
5 Regional Maintenance Offices
Maintenance Contracts
Special Projects
Mechanical Services
Axle Load Control
22 Stations
Technical Services Unit
Network Strategy Unit
Monitoring & Evaluation Unit
Road Safety Unit
Bridges & Structures Unit
Social & Environmental
Safeguards Unit
Project Managers
Project Engineers
Director Internal Audit
Director Finance & Admin
Senior Internal Auditors Manager PDU Works & Services
Director Procurement
Director Operations
Chief Accountant
Director Planning
Director Projects
Corporate
Communications
Information Services
Manager PDU Goods and Supplies
Human Resources Manager
Administration Manager
37
5. Although the Project will be implemented fully mainstreamed in UNRA, the ED will
appoint an inter Directorate Project Management Team (PMT) comprising members from the
Directorates of Planning, Projects and Operations, as the implementation of the OPRC calls for a
special supervision team which will comprise members with the different competencies in
Maintenance, Project Management and Monitoring. Activities for which PMT members will be
appointed, paying attention to the required competency matrix are shown below:
FIGURE 2: NERAMP PROJECT MANAGEMENT STRUCTURE
B. Financial Management, Disbursements and Procurement
B.1. Financial Management
6. Financial Management Assessment. An assessment of the proposed FM arrangements
for the NERAMP was made to determine under OP/BP 10.0: (a) whether UNRA, has adequate
FM arrangements to ensure project funds will be used for purposes intended in an efficient and
economical way; (b) project financial reports will be prepared in an accurate, reliable and timely
manner; and (c) the entities’ assets will be safeguarded. Under OP/BP 10.0, borrowers and
project implementing entities are supposed to have and maintain adequate FM systems which
include budgeting, accounting, internal controls, funds flow, financial reporting and auditing
arrangements to ensure that they can readily provide accurate and timely information regarding
the project resources and expenditures.
PROJECT DIRECTOR
PROJECT COORDINATOR
NETWORK STRATEGY MANAGER
&
PROJECT ENGINEERS
MAINTENANCE &
OPERATIONS MANAGER PROJECT ENGINEERS
Design Review
Contract Supervision
Traffic Management, Axle Load Control,
Road Safety, Customer Care Services
Performance Monitoring – Measurement of
LoS (Condition & Traffic) and overall
Reporting
38
7. UNRA is currently implementing IDA credits 46790 (US$190 million) and 49490
(US$75 million) together with TF 11094 (US$6.15 million) upgrading three major roads together
with various consultancies and studies. The existing FM arrangements satisfy the Bank’s
minimum requirements under OP/BP 10.0 and are adequate to provide, with reasonable
assurance, accurate and timely information on the status of the project resources required by
IDA. The NERAMP is being designed to finance OPRC which, among others is intended to
transfer some of the risks of construction to the contractor and hence improve value for money
(VfM) to the road user. Due to UNRA’S previous and current experience in implementing
various World Bank (WB) Projects, the preliminary assessment of the overall financial
management risk rating before mitigation is Substantial and after fully analyzing identified risks
and mitigating measures put in place, the residual risk will be Moderate.
8. Risk Assessment and Mitigation. Table 3.1 below identifies the key risks that the
project management may face in achieving these objectives and provides a basis for determining
how management should address these risks.
Table 3.1: Risk Assessment and Mitigation
Risk Risk
Rating
Risk Mitigating Measures
Incorporated into Project
Design
Mitigated Risk
Inherent Risk Country Level-The 2005 & 2012 Public
Expenditure and Financial Accountability
(PEFA) reports identified weaknesses in
government Public Financial Management
(PFM) systems. Enforcement of
Procurement rules is still weak.
Governance issues including the scandals
in the OPM and Public Service Ministry is
still presenting a major challenge. June 30,
2012 audit report identifies major
weaknesses in FM across the Government
departments.
H Weaknesses in accounting capacity,
budget classification, payroll rules and
procurement compliance are being
mitigated under a government PFM
reform program called Financial
Management and Accountability
Program (FINMAP). The High Level
Matrix agreed between development
partners and Government is being
implemented to address the
governance issues.
S
Entity Level- The Auditor General’s
reports of 30th
June 2012 for UNRA was
qualified with material weaknesses and
accountability challenges that need to be
addressed. Gaps in fiduciary and technical
staff at UNRA exist.
S UNRA has provided action plan to
address the key accountability and
institutional weaknesses. Key
accounting and internal audit staff to
be in place at UNRA as agreed.
M
39
Risk Risk
Rating
Risk Mitigating Measures
Incorporated into Project
Design
Mitigated Risk
Project Level-
Road construction costs escalation and risk
of price fixing and collusion. Issues with
the high unit cost of road construction
make project costs unpredictable. Delays
in project completion and variations and
non-adherence to contract conditions. The
risk of poor quality works and premature
failure on works. Variation of Prices
(VOP) in road works has been reported in
recent audits
New approach of Output and Performance
Based Road Contacting (OPRC) might
require special skills.
S The new approach for road network
management and conservation as an
Output and Performance Based Road
Contact (OPRC) will mitigate major
risks of construction by transferring
responsibility to the contractor and
hence improve VfM to the road user.
This will be a Design-Construct-
Maintain contract paid on
performance. Detailed feasibility
studies to be conducted to inform the
design stage. Study tours have been
planned to gain skills
The component will be managed
centrally by the MoLG with
participation of the LGs. Project
identification process will be inclusive
with a bottom up approach with all
stakeholders on board.
M
S
Overall Inherent Risk Moderate
Budgeting- Inadequate funding of approved budget
and budget cuts affecting approved work
plans resulting in increased outstanding
payables and exposing UNRA to risk of
higher cost and litigation by suppliers and
contractors. Budget ceilings on
expenditure items by GoU not related to
activities level. Charging expenditure to
wrong expenditure codes. Undervalued
land for compensation and Poor feasibility
studies resulting in unrealistic budgets that
calls for frequent revisions. The chart of
accounts as provided by the MoFPED is
inconsistent with project costing as per the
cost tables.
S
Project budget will be ring fenced as
to guard against diversion or
reductions. Detailed feasibility studies
to inform realistic budgets and timely
execution of budgets. Being an Output
and Performance Based Road Contact
(OPRC), the contractor will minimize
these risks by measuring accurately to
avoid delays in performance. Project
will be 100% financed by WB except
the RAP.
M
Accounting-
The June 30, 2012 Entity audit report for
UNRA was qualified and identified
material weaknesses and accountability
challenges. (i) Limitations of Pastel and
IFMS in accounting requirements of
UNRA (ii) Understatement of value of
land and lack of respective titles, (iii)
overpayment to contractors thru VOP and
(iv) fraudulent practices by one staff were
also noted in the report. The Financial
Management Manual (FMM) of UNRA
requires an update.
S UNRA to upgrade the accounting
system and update the FMM within 12
months after effectiveness.
.
M
40
Risk Risk
Rating
Risk Mitigating Measures
Incorporated into Project
Design
Mitigated Risk
Internal Control- UNRA: Management delays in response
and follow up reported internal control
weaknesses by the internal audit. Material
internal control weaknesses noted in Pastel
accounting software. Non adherence to the
audit work plan. Inadequate IA staffing
and lack of budget line Weak technical
audit skills and experience. The Audit
Manual of 2009 requires updating.
Computerized audits have not been
undertaken due to delayed renewal of
software licenses.
The June 30, 2012 audit reports for UNRA
noted several material internal control
weaknesses and management overrides of
controls. The capacity for internal audit to
conduct technical audits on infrastructure
components is limited.
S UNRA: Internal audit report to be
shared with Bank within 45 days after
end of quarter. Provision of Internal
audit budget line to be pursued. Two
technical auditors to be recruited. Firm
has been recruited to strengthen
technical audits and capacity for audit
staff. Upgrade of the accounting
system with inbuilt controls. Update of
Audit Manual to include financial and
technical audits. The audit software
licenses have been renewed.
M
Funds Flow-
Delays or failure by the Government to
provide counterpart funds to meets its part
of the project costs, especially RAP costs
or expenditure not eligible under Bank
financing. Diversion of project funds to
meet other non-project activities were
noted in the internal and external audit
reports exposing the project to the risk of
loss of funds or delay in project activities.
S
The government has established the
Road Fund with substantial budget
support to be channeled through
UNRA which will mitigate the risk of
government failure to meet local costs.
UNRA should also adhere to the Bank
policy prohibiting diversion of project
funds. Additionally MoFPED has
recently introduced reforms geared at
improving fund flow to Government
Ministries and agencies.
M
Financial Reporting-
Delays in submission of accurate quarterly
interim financial reports in the desired
format.
M The reporting format has been agreed
with UNRA and reporting deadlines
will be part of the FA.
L
External Audit-
Delay in submission of financial
statements for audit and delay in
submission of audited financial statements.
The entity audit report for UNRA for June
30, 2012 was qualified with material
accountability issues and weaknesses in
both financial and technical aspects.
However, the audit report for the WB TSD
Project implemented by UNRA was
unqualified.
S Time bound action plan on how to
address pending audit issues raised in
the entity audit report for the project
have been agreed.
M
Overall Risk Rating S Moderate
H – High S – Substantial M – Moderate L – Low
41
9. The overall residual risk is assessed as Moderate upon meeting the conditions in the risk
assessment and mitigation table above.
10. Strengths of the Implementing Unit. The project FM is strengthened by the following
salient features: (a) the accounting personnel within UNRA are adequately qualified and
experienced; (b) UNRA has successfully implemented other WB projects while maintaining
adequate FM arrangements; and (c) the accounting policies and procedures are documented in
UNRA FM Manual and Treasury Accounting Instructions (TAI), 2003 issued under the Public
Finance and Accountability Act (PFAA) 2003.
11. Budgeting Arrangements. Budgeting for the project will be in line with the Government
of Uganda (GoU) budget cycle and as per the TAI issued under the Public Expenditure and
Financial Accountability (PEFA). The RAP budgetary provision for UNRA has been inadequate
in meeting planned activities resulting in increase of outstanding payables. There are also budget
cuts during the year which further affects implementation of planned activities. Budget ceilings
on expenditure items as provided by the Ministry of Finance, Planning and Economic
Development (MoFPED) is not related to project activity levels resulting in combining and
charging expenditure to wrong expenditure codes. The chart of accounts as provided by the
MoFPED is inconsistent with project costing as per the cost tables. The project budget will be
ring fenced to ensure project activities are not affected by budget cuts and diversions.
12. Accounting System. UNRA has the Financial Management Manual (FMM) which is
being updated. In addition, the PIP will be updated with FM arrangements specific to the WB
projects. UNRA is computerized and is using Pastel Partner 2007 Version accounting software
which is currently inadequate resulting in several manual interventions and weak internal
controls of Pastel as per the Auditor General’s report. UNRA will maintain similar books of
accounts to those for other IDA funded projects. The June 30, 2012 audit report for UNRA
identified material accounting weaknesses including management override of the accounting
procedures that need to be addressed to avoid spillage into the project. However, the PASTEL
accounting software enables maintenance of each individual Project’s accounts as a stand-alone
entity. This helps in avoidance of commingling of Project activities and resources. Arising from
this strength, WB funded Projects have always got unqualified audit opinions.
13. Staff Arrangements. UNRA is staffed with qualified and experienced accounting
personnel. The UNRA Directorate of Finance and Administration is headed up by the Director
Finance and Administration (DFA) who reports to the ED. The DFA is supported by a Finance
Manager/Chief Accountant for the finance function who, in turn, is assisted by a Financial
Accountant, a Management Accountant and two Development Partners (DPs) Credit Agreement
Accountants. At the regional level there is one accountant per region who reports to the Chief
accountant. They are assisted by six Assistant Accountants at the Head Office. There is also one
Assistant Accountant at each station. All the accounting staff dealing in projects have received
refresher training on the more recent WB Financial Management and Disbursement Guidelines.
14. Internal Controls. The project will rely on the existing internal control framework to
ensure that all procedures and controls are adequately documented as per the Treasury
Accounting Instructions 2003 and UNRA Financial management Manual. The June 30, 2012
42
Entity audit report noted material internal control weaknesses and management override of the
controls that need to be addressed by management.
15. Internal Audit. UNRA has a Directorate of Internal Audit headed by a Director assisted
by two Audit Managers and three financial internal auditors. Recruitment of two technical
internal auditors is in the process through IDA support under the Transport Sector Development
Program (TSDP) project and they are expected on board by end of December 2014. UNRA has
procured the services of a firm to conduct technical audits, develop a technical audit manual and
also train the technical internal auditors. The Internal Audit operations are guided by the Internal
Audit Charter and Internal Audit's Policy and Procedures Manual of April 2009 which needs an
update. The internal audit directorate does not have a line budget as approved by the Audit and
Finance and Administration Committees and this has denied them full independence.
B.2. Funds Flow and Disbursement Arrangements
16. Bank Accounts. The following bank accounts will be maintained for the purposes of
implementing the project:
Designated Account: Denominated in US dollars, disbursements from the IDA Credit
will be deposited on this account.
Project Account: This will be denominated in local currency. Counterpart funds, other
donors and transfers from the Designated Account (for payment of transactions in local
currency) will be deposited on this account in accordance with project objectives.
These bank accounts shall be opened at Bank of Uganda in accordance with the
Financing Agreement. The signatories for the project will be done in accordance with the
FMM.
17. Flow of Funds. The funds from WB will flow into the UNRA project Design Account
(DA) at Bank of Uganda. UNRA will request for the initial advance in line with forecasted report
based format of cash flow requirements. Funds can be paid from the DA. Counterpart funds from
GoU will only be accessed through IFMS. Figure 3 shows the Funds Flow Chart.
18. Disbursement and Reporting Arrangements. UNRA has established FM and
accounting systems, which will facilitate the use of report based disbursement where cash flow
forecasts based on work plans are submitted for a period of six months every quarterly period
along with Interim Financial Reports (IFRs). The IFRs will be submitted for disbursement on a
quarterly basis within 45 days of the end of each reporting period. Ineligible expenditures that
may be found to have been made from the DA will be refunded by the borrower in full.
19. IFRs. The following quarterly IFRs will be produced by UNRA: (a) a statement of
sources and uses of funds for the reported quarter and cumulative period (from project inception)
reconciled to opening and closing bank balances; and (b) a statement of uses of funds
(expenditure) by project activity/indicator/component comparing actual expenditure against the
budget, with explanations for significant variances for both the quarter and cumulative period. In
addition to the above IFRs, UNRA will also have to submit to the Bank the following
information in order to support report-based disbursement: (i) Designated Account (DA) Activity
Statement; and (ii) DA Bank Statements.
43
FIGURE 3: Funds Flow Chart
20. Annual Financial Statements (AFS). AFS should be prepared in accordance with
International Accounting Standards for external audit. These Financial Statements will comprise
of: (a) A Statement of Sources and Uses of Funds / Cash Receipts and Payments; (b) A
Statement of Affairs/ Balance Sheet; (c) Statement of Fund Balance; (d) Designated Activity
Account Statement; and (e) Notes to the Accounts. Other methods of disbursements that can be
used are direct payments and special commitments using letters of credit.
21. External Auditing Arrangements. The Auditor General is primarily responsible for
auditing of all government projects. The audit may be subcontracted to a firm of private auditors,
with the final report being issued by the Auditor General, based on the audit work carried out by
the subcontracted firm. The private firms to be sub-contracted should be acceptable to the Bank,
following a review of audit firms in Uganda. In case the audit is subcontracted to a firm of
private auditors, IDA funding may be used to pay the cost of the audit. The audits are done in
accordance with International Standards on Auditing with appropriate terms of reference.
UNRA will submit the project Audit Report together with the Management Letter to the Bank
within six months after the end of each financial year.
22. Operating Costs. The Project will finance costs of the implementation that are directly
related to project implementation. These will be procured using IDA procedures or the
Borrower’s procurement, financial and other administrative procedures, acceptable to the Bank.
23. Financial Management Action Plan. The action plan below indicates the actions to be
taken for the project to strengthen its FM system and the dates that they are due to be completed.
IDA GoU
Consolidated
Fund
Designated Account for
UNRA (USD)
Project transactions paid in either USD or UGX
Project Account for UNRA,
(UGX)
44
Table 3.2: Financial Management Action Plan
Action Date due by Responsible
1 Updating Financial Management Manual (FMM)
Upgrade the Financial management and accounting
systems all in form and substance satisfactory to IDA
Within 12 months
after effectiveness
UNRA
2 Updating Internal Audit Policy and Procedures Manual
all in form and substance satisfactory to IDA
Within 12 months
after effectiveness
UNRA
4 Designate key internal audit staff within 12 months
after effectiveness
UNRA
24. Effectiveness Conditions. There are no FM conditions of effectiveness to be included in
the legal agreement.
B.3. Procurement
25. Applicable Guidelines. Procurement for the proposed project would be carried out in
accordance with the WB’s "Guidelines: Procurement under IBRD Loans and IDA Credits" dated
January 2011; and "Guidelines: Selection and Employment of Consultants by WB Borrowers"
dated January 2011, Guidelines on Preventing and Combating Fraud and Corruption in Projects
Financed by IBRD Loans and IDA Credits and Grants, dated October 15, 2006 and revised in
January 2011, and the provisions stipulated in the Legal Agreement. The items under different
expenditure categories to be procured, identified by appraisal, are indicated in the “Scope of
Procurement under the project” section.
Applicable Procedures
26. Advance Contracting shall apply for this project which allows the Borrower to proceed
with the initial steps of procurement before signing the related Bank loan. In such cases, the
procurement procedures, including advertising, shall be in accordance with the Guidelines in
order for the eventual contracts to be eligible for Bank financing, and the Bank shall review the
process used by the Borrower. A Borrower undertakes such advance contracting at its own risk,
and any concurrence by the Bank with the procedures, documentation, or proposal for award
does not commit the Bank to make a loan for the project in question.
(a) Use of National Procurement System. All contracts procured at the national level
following National Competitive Bidding (NCB) and other lower procurement procedures
such as Shopping, may follow the national public procurement law (the Procurement and
Disposal of Public Assets Authority (PPDA) Act, 2003) and attendant regulations. These
procedures have been reviewed by the WB and found to be acceptable except for the
provisions which will not be applicable and/or need to be modified as shown below for
the purpose of this project:
(b) Domestic preferences shall not apply under NCB.
(c) Charging of fees for dealing with bidder complaints at procuring entity level shall not
apply.
(d) Evaluation of Goods and Works. The following documentation or their equivalent shall
not be treated as eligibility requirements: (i) Tax clearance certificates; (ii) Tax
registration certificates; and (iii) trading licenses, which may however be included as post
45
qualification requirements, which the Borrower can request the Bidder to avail during the
evaluation.
(e) Disqualification of Bidders for not purchasing the bidding documents from the Borrower
shall not apply.
(f) Ineligibility shall in addition to firms suspended by PPDA extend to firms debarred or
suspended by WB.
(g) In accordance with paragraph 1.16(e) of the Procurement Guidelines, each bidding
document and contract shall provide for the following: (i) the bidders, suppliers,
contractors and subcontractors shall, on request, permit the Association to inspect the
accounts and records relating to the bid submission and performance of the contract; shall
have the accounts and records audited by auditors appointed by the Association; and (ii)
any deliberate and/or material violation of such provision by any bidder, supplier,
contractor or subcontractor may amount to an obstructive practice provided for in
paragraphs 1.16(a) and (v) of the Procurement Guidelines.
27. Procurement processing. Under the project, procurement processing shall also comply
with the national approval system in addition to the WB guidelines, except where the two
conflict, in which case the WB Guidelines will take precedence. Specifically, the Contracts
Committee (CC) shall perform their oversight functions at every key procurement stage as
required by the PPDA Act, and contracts shall be subjected to the SG clearance where
applicable.
28. Procedure for Shopping. Shopping shall follow the Request for Quotation (RFQ)
procedures as defined in the PPDA Act and attendant regulations. These procedures have been
reviewed by the Bank and found to be satisfactory subject to the exceptions under paragraph 3.
29. Use of Framework Agreements (FAs). There is no expected procurement for goods.
Common supplies, for example, stationery and consumables will be aggregated and procured
through framework contracts to enable implementing agencies place orders for urgently needed
supplies at short notice, at a competitive price. FAs shall not restrict foreign competition, and
should be limited to a maximum duration of 3 years. FA procedures applicable to the project are
those of the Borrowers that have been deemed acceptable by the Bank, and shall be described in
the Loan Agreement.
30. NCB Bidding Documents. It has been agreed with the Borrower, that bidding documents
under NCB procedures include a clause rendering ineligible for Bank financing a firm, or an
individual, of the Borrower country that is under a sanction of debarment from being awarded a
contract by the appropriate judicial authority of the Borrower country and pursuant to its relevant
laws, provided that the Bank has determined that the firm, or the individual, has engaged in fraud
or corruption and the judicial proceeding afforded the firm or the individual adequate due
process.
31. The Consultant Guidelines. Shall apply for the selection of Procurement Agents and
Construction Managers, as well as inspection services providers. The cost or fee of the
Procurement Agents and Construction Managers or inspection services providers (see paragraph
3.12) is eligible for financing from the Bank loan, if so provided in the Loan Agreement and in
46
the Procurement Plan, and provided that the terms and conditions of selection and employment
are acceptable to the Bank.
32. Solicitation Documents to be used - Works. The Bank’s Sample Bidding Documents
for OPRC and standard bid evaluation form (SBEF) appropriately modified will be used for
procurement under ICB.
33. Use of Two-Envelope System. OPRC contracts have unique features. It combines
engineering design and road assets management services with civil works for rehabilitation and
maintenance. To better address these features, a two envelope system will be adopted on a pilot
basis in the procurement of the OPRC contracts under this project. This approach is not
prohibited by the Bank's current Procurement Guidelines. The detailed procedures for applying
this approach will be prepared jointly by the Borrower and Bank teams based on experience of
similar approaches used under other Bank financed projects. The final detailed two envelope
system procedures will be subject to the Bank's review and clearance as part of the Bidding
Documents for the OPRC contracts. At this stage, the procedures are outlined as follows:
a. Bidders will be required to prepare and submit their bids in two separate sealed envelopes
at the same time: the Technical envelope will include Bidder's information of eligibility
and qualifications, and technical proposals, etc, while the Financial Envelope will include
the filled Price Schedules etc.
b. The Technical Envelopes will be first opened and evaluated, while the Financial
Envelopes will remain sealed and kept at a secure place or deposited with a reputable
public auditor or independent authority.
c. The technical evaluation of the bids will include examination of the Bidder's eligibility
and qualifications against defined criteria on pass/fail pass. Methodology to evaluate the
substantial responsiveness of the Bidder's technical proposal will be further discussed and
agreed with the Bank.
d. The Borrower will submit the qualification and technical evaluation report for Bank
review and no-objection. The Borrower will then inform the Bidders of the outcome of
the evaluation. For those Bidders whose bids are rejected at this stage, the Borrower shall
provide clear reasons for the rejection.
e. Prior to the opening of the Financial Envelopes, adequate time will be provided to allow
opportunity for Bidders to complain, if they wish.
f. Only the Financial Envelopes of the Bidders who have passed the qualification and
technical evaluation will be publicly opened. The contract will be awarded to the Bidder
whose financial proposal has been determined to be the lowest evaluated.
34. GoU Consulting Services. The WB’s Standard Request for Proposal (SRFP) document
and sample form of evaluation report will be used in the selection of consulting firms. The PPDA
procedures for selection of Consultants including bidding documents, evaluation forms, etc.,
shall not apply for this project. Short lists of consultants for services estimated to cost less than
US$300,000 equivalent per contract may be composed entirely of national consultants in
accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
35. Record Keeping. The UNRA Directorate of procurement will be responsible for record
keeping and shall open a procurement file for each contract processed. The file should contain all
47
documents on the procurement process in accordance with the requirements and as described in
the PPDA Act. UNRA will ensure that there is adequate lockable storage space for active files,
and for archiving.
36. Scope of Procurement under the Project. Procurement activities to be financed by the
Bank identified by appraisal are indicated in procurement plan, while other activities will be
identified during project implementation:
37. The selection will be done using the WB’s SRFP for all Consultancies. Short lists of
consultants for services estimated to cost less than US$300,000 equivalent per contract may be
composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of
the Consultant Guidelines.
38. Capacity Assessment of UNRA. A procurement capacity assessment for UNRA was
carried out on July 25, 2013 and September 25, 2013. Capacity of the Procurement and
Technical staff to fulfill their role in the procurement cycle was assessed. Procurement
processing in UNRA is in general compliant to the PPDA procedures and the requisite structures
of a Procurement and Disposal Unit (PDU) and CC are in place. A detailed procurement
capacity report has been prepared, but highlights of the findings are indicated below.
39. Procurement Planning is done by each Technical directorate in liaison with the
Procurement. Framework contracts are used for Stationery, printer consumables. Plans are in
progress to use framework contracts for Goods commonly used for force account across the
UNRA regions.
40. Bid evaluation reports were prepared and duly signed by the Evaluation Committee (EC)
for all the procurements reviewed. Normally evaluation stage suffers major delays due to the
following reasons:
Understaffing where on average one staff member may be a member of 5 evaluation
teams at the same time leading to delays.
The CC is equally overloaded with contracts from both Headquarters and the 22 stations
across the country leading to delays in review, and subsequently in decisions. UNRA
should increase the thresholds for delegation to the regions to lower the workload on the
CC at Head Quarters, and prepare a Manual on procurement processing at the regional
level including service standards and performance parameters as well as a mechanism for
monitoring, reporting progress at the regional offices.
41. Administrative reviews in UNRA have dropped from an average of 16 in 2009/10 to 2 in
2013/2014. The drop can be attributed to increased confidence of the bidder community in the
Evaluation processing in UNRA after the internal procurement reforms and introduction of the
IPBE where bids being evaluated by the EC are also evaluated by an independent evaluator as an
advisor to the CC.
42. At Contract Management stage, understaffing affects the quality of supervision, with
Project Managers assigned 4-6 roads at the same time unable to dedicate sufficient attention to
adequately supervise the Consultants and contractors and timely intervene in areas considered
48
bottlenecks or follow actions that would address bottlenecks and thereby minimize delays.
However, it has also been noted that the contract management skills need to be enhanced for
some of the project managers in regard to timeliness of communicating instructions and
following good practice in traffic management for roads under supervision.
43. Delays in payment in some cases of up to 4-5 months or more attributed to shortage in
planned releases from MoFPED. UNRA is preparing a proposal to MoFPED to agree on a 3 year
implementation plan as one way of addressing payment delays. This may not directly affect IDA
funded contracts but creates credibility and reliability issues for bidding community who may
build these delays into the bid prices leading to higher bid prices.
44. The procurement function under NERAMP will be executed by the Procurement
Directorate. The PDU handles procurement for UNRA Headquarters in Kampala, the 22 stations,
7 ferry landing sites and 6 weigh bridge stations spread over the country. UNRA is also in the
process of setting up 5 regional offices which will co-ordinate and manage the activities of their
respective stations. The UNRA structure provides for 21 staff though currently 15 are in place
due to the wage cap, and the resulting funding constraints. The PDU has which often results in
staff working for extended hours.
45. The UNRA budget for FY 12/13 was approximately US$485 million for this financial
year out of which 90 percent was to be expended through Procurement. Based on the
procurement plan of 2011/12 and 2012/13, the UNRA handles between 300 and 400
procurements in a financial year excluding contract amendments. The 15 staff are inadequate in
number to handle the number of procurements that are carried out by UNRA in a year leading to
a heavy workload delays in processing. UNRA, shall appoint/recruit five PDU staff to increase
staff numbers in the PDU when funding becomes available
46. Under the ongoing TSDP, one Procurement Consultant, now acting Director Procurement
and one Procurement Specialist were hired to support the PDU and have been instrumental in
building capacity of the PDU staff and helping bridge the understaffing gap. In order to ensure
adequate procurement capacity for NERAMP it is imperative that a staff of equivalent caliber is
designated in addition to a Procurement Specialist.
47. Record Keeping is a principle function of the PDU. There is a large amount of records,
and though there is a store for active files it is nearly full and some of these are kept in the
Director Procurement’s office on the floor. UNRA shall provide additional storage space for
procurement records.
48. Staffing in Technical Departments in UNRA has suffered understaffing constraint since
2008 due to the ceiling on the wage cap leading to delays in procurement processing and contract
management. UNRA mandate was increased from 10,000 km to 20,000 km of national roads
without a corresponding increase in staff numbers to cater for the increased workload. There are
inadequate staff numbers and skills in Technical Departments to ensure timely support to the
49
procurement function and fulfill carrying out their role in the procurement cycle15
in a timely and
efficient manner constraining the performance of the procurement function especially at
evaluation and contract management stages.
49. The Technical Directorates that will implement the project are the Planning, Projects and
Maintenance Directorates. They do not have previous experience in the OPRC approach where
the service provider will implement the contract from Design through Construction to
Maintenance over a long term of about ten years. However, UNRA has some experience in
Design Build approach16
under the 82.5 km Malaba – Bugiri Road and the 74 km Mbarara –
Kikagati Road and has thus evaluated bids based on designs prepared by contractors. UNRA
staff are conversant with the Bank guidelines and procedures having implemented the RDPP3
project, and now implementing TSDP. There are thus foreseen challenges due to the lack of any
previous experience in the OPRC approach which have been included in the risk matrix.
Frequency of Bank Supervision
50. In addition to the prior review supervision carried out from Bank offices, the capacity
assessment of the Implementing Agency has recommended at least a bi-annual supervision
mission to visit the field, at least one of which shall include carrying out post review of
procurement actions.
51. Prior Review Thresholds. The prior review thresholds are as follows:
Procurement of Goods, Works and Non-consulting services
Expenditure
Category
Contract Value (Threshold) USD Procurement
Method
Contracts Subject to
Prior Review
1. Works >=10,000,000
< 10,000,000
<200,000
ICB
NCB
Shopping
All Contracts
Selected Contracts as indicated
on PP
First contract under this method
2. Goods and Non-
consulting services
>=1,000,000
<1,000,000
<100,000
ICB
NCB
Shopping
All Contracts
Selected Contracts as indicated
on PP
First contract under this method
All categories All values Direct Contracting All
Selection of Consultants17
Expenditure
Category
Contract Value (Threshold)
USD
Selection Method Contracts Subject to Prior
Review
15 It is the Technical departments ‘s role to prepare Technical specification and terms of reference, evaluation of bids, expressions of interest and Consultants’ technical and financial proposals during the bidding/selection process, and to supervise the Contractors and consultants
16 UNRA adopted for the Design and Build, the FIDIC Design for Building conditions of contract (yellow book). UNRA provided only preliminary designs information based on investigations results for surveying, pavement investigations, topographical survey, and hydrology as a
basis for the contractors to prepare comprehensive designs and bids for construction
17
All Terms of Reference regardless of cost will be subject to clearance by the Bank.
50
(a) Firms18
>=300,000
<300,000
QCBS, QBS, FBS,
LCS
Qualifications/Other
Selection Methods
All contracts
Selected Contracts as indicated
on PP
(b) Individual All values
IC Selected Contracts as indicated
on PP
Firms and
Individual
All values SSS All contracts
52. Procurement Plan. The Borrower, at appraisal, developed a procurement plan for
project implementation which provides the basis for the procurement methods. The Plan was
prepared in a format acceptable to IDA. This plan was agreed between the Borrower and the
Project Team on March 11, 2014 and is available at the UNRA offices on Lourdel Road in
Kampala. It will also be available in the project’s database and in the Bank’s external website.
The Procurement Plan will be updated in agreement with the Project Team annually or as
required to reflect the actual project implementation needs and improvements in institutional
capacity.
53. Details of the Procurement Arrangements Involving International Competition:
(a) List of contract packages to be procured following ICB and Direct Contracting
1 2 3 4 5 6 7 8 9
Ref.
No.
Contract
(Description)
Estimated
Cost ($ mill)
–excludes
local taxes
Procure
ment
Method
Pre-
qualific
ation
(yes/no)
Domestic
Preference
(yes/no)
Review
by Bank
(Prior /
Post)
Expected
Bid-
Opening
Date
Comments
1 Output and
Performance
Based Road
Maintenance
Contract
(OPRC) for
Lot 1: Tororo-
Mbale-Soroti
Road
(140Km) &
Lot 2: Soroti-
Lira-Kamdini
(160Km)
Road
187 ICB post No Prior Sept 2014 Bidding
Documents
are being
updated by
UNRA.
2
18
A shortlist of consultants for services estimated to cost less than US$ 200,000 equivalent per contract may consist
entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
51
54. Selection of Consultants:
(b) Consultancy Assignments with Selection Methods and Time Schedule
1 2 3 4 5 6 7
Ref.
No.
Description of
Assignment
Estimated
Cost (US$
mill)
Selection
Method
Review by
Bank (Prior /
Post)
Expected
Proposals
Submission
Date
Comments
COMPONENT 1: Introduction of OPRC on a Priority Road Corridor
1.1 Consultancy Services
for Project
Management and
M&E of the Tororo-
Mbale-Soroti-Kamdini
OPRC Project
5 QCBS Prior Jun 2014
1.2 Consultancy Services
for Road Safety Audit
of North Eastern Road
Corridor
0.9 QCBS Prior Apr 2017 3 Audits
over the
10yrs
COMPONENT 2: Institution Support
2.1 Consultancy Services
for Asset Management
Support to UNRA
2.00 QCBS Prior April 2016
2.2 Consultancy Services
for Support to UNRA
in OPRC Contract
Management and
Operations
1.5 QCBS Prior Sept 2014
2.3 Consultancy Services
for Preparation of
OPRC Pipeline
Projects on National
Road Corridors
1.00 QCBS Post Sept 2015
2.4 Consultancy Services
for Technical Support
to the UNRA CMS &
the CoST Initiative
0.5 QCBS Prior May 2014
Action Plan to mitigate overall Risk
55. Procurement Risk Assessment and Rating. The key shortcomings noted in UNRA are:
( a) The lack of previous experience in UNRA in implementing the OPRC approach; (b) The CC
and PDU staff heavy workload leading to delays in processing; (c) Delays at Evaluation; (d) the
inadequate staff numbers in the technical Departments; (e) Delays in payment to service
providers; and (f) need to enhance skills in contract management. In light of the following
findings, the overall risk of UNRA procurement management for the proposed NERAMP is
Substantial expected to moderate after mitigation.
52
56. Based on the Procurement Capacity Assessment report, the following Action Plan was
agreed to mitigate the overall risk as indicated in the matrix below:
Findings Action Completion Date Responsible
Entity
Delays in procurement
processing due to PDU
staff heavy workload
(i) Appoint or recruit or designate 1
Procurement Consultant who is a Road Engineer
with ToR acceptable to IDA to: (a) ensure
timely procurement processing for NERAMP
contracts and (b) provide hands-on coaching and
mentoring of PDU staff
GoU.
Three months
after project
effectiveness
UNRA
Lack of substantive
strategic leadership of the
Procurement Directorate
UNRA to designate a Director for Procurement
directorate under GoU funding .
Twelve months
after project
effectiveness
UNRA
Contracts Committee –
heavy workload UNRA to finalize delegation of procurement
oversight to the 5 regions.
During Project
implementation
UNRA
Safety in keeping of
Financial envelope under
the two envelope system
Enhanced safe keeping of Financial Proposals
by use of a safe to be opened/lockable by 3
Senior Officers appointed by the Accounting
Officer , and none of whom should be part of the
evaluation committees.
During Project
Implementation
UNRA
Inadequate awareness on
reporting fraud and
corruption
Procurement Notice Board to include Poster or
Banner indicating telephone No. in UNRA to
which fraud and corruption issues should be
reported as well as IDA’s Integrity Department
contacts and that of the IGG.
During Project
Implementation
UNRA
Inadequate Contract
Management practices
Specialized training for Contract managers
under NERAMP,
UNRA to update the contract management
system to include monitoring mechanism to
regularly update progress during contract
implementation.
Within 18
months of
Effectiveness
UNRA
Risks due to UNRA lack of previous experience in OPRC approach
UNRA lack of
proficiency in OPRC
practical application and
contract mechanism.
Enhancement of UNRA in-house capacity
through hire of an experienced “Project
Manager” to support management of the OPRC
Contracts and build capacity of UNRA staff.
During project
implementation
UNRA
Lack of skills in
evaluating OPRC and
bias to award lowest
priced bid without due
consideration of
qualification
requirements leading to
delays in implementation
(i) Evaluation to be supported by consultants
preparing OPRC Bidding Document.
Consultant to participate in evaluation -
Consultant’s team to include Team leader,
Financial specialist, Procurement Expert must
have experience in Road Asset Management.
(ii) Proposed use of Two Envelope System.
Evaluation of Technical and Qualification Bid
During project
implementation
During project
implementation
UNRA
UNRA
53
first of all bidders and only financials of
technically responsive and qualifying bidders to
be opened.
Environmental and Social (including safeguards)
57. The Project has been assigned Environmental Category B because the Environmental and
Social impacts (ESIs) generic to upgrading, rehabilitation, and maintenance works of existing
roads will be predictable, localized and readily mitigated. The project triggered the following
Environmental and Social Safeguard Policies: Environmental Assessment OP/BP 4.01, because
the program will support investments with potential adverse Environmental impacts such as road
re-alignment, borrow-pit areas, soil spoil material, workers camps, equipment storage areas and
quarry sites which may have substantial ESIs; Natural Habitats OP/BP 4.04 triggered because the
works may impact on the existing ecosystems along the road including but not limited to major
wetlands, forest plantations adjacent to the road; Forests OP/BP 4.36 applicable because the road
improvements may have impacts on the adjacent forest plantations; Physical Cultural Resources
OP/BP 4.11 triggered because project investments will involve civil works and may potentially
affect both known & unknown physical cultural resources along the road corridor; and
Involuntary Resettlement OP/BP 4.12 triggered because the project may require land acquisition
in areas of road realignment/widening. At this stage and under OPRC, the specific road works
required for the various sections and timing is not yet determined.
Safeguard Policies Triggered? Explanation (Optional)
Environmental Assessment OP/BP 4.01 Yes Although the road corridor is known (existing), the
road design is not yet known. A framework
approach for safeguards is recommended as the
design of the road will be done by the contractor
under the OPRC considering the prevailing
conditions of the road. An ESMF has therefore
been prepared, consulted upon, and disclosed
before appraisal. Subsequent ESIAs (ESMPs) will
be undertaken during implementation before start
of any civil works.
Natural Habitats OP/BP 4.04 Yes The natural habitats along the road project include:
rivers, wetlands, and forest plantations. The
framework for management of environmental
impacts of the road asset management project on
the natural habitats will be incorporated in the
ESMF. Where applicable, the ESMPs will
incorporate the management of impacts of the
project on the Natural Habitats.
Forests OP/BP 4.36 Yes There are no natural forests along the road
corridor. However, there are a few forest
plantations of mainly eucalyptus and pine tree
species. The framework for management of
environmental impacts of the road asset
54
management project on the natural habitats will be
incorporated in the ESMF. Where applicable the
ESMPs will incorporate the management of
impacts of the project on the forest.
Pest Management OP 4.09 No Not Applicable
Physical Cultural Resources OP/BP 4.11 Yes This is triggered because project investments will
involve civil works that may potentially affect both
known and unknown PCR along the road corridor.
As result a chance find procedure for PCR has been
developed as part of the ESMF and will be
implemented during contract implementation.
Indigenous Peoples OP/BP 4.10 No There are no Indigenous Peoples in the project
area.
Involuntary Resettlement OP/BP 4.12 Yes The project may require land acquisition in areas of
road realignment/widening. While the road corridor
is known/exists, the design is not yet developed and
therefore the exact impact on land acquisition and
subsequent resettlement/ compensation cannot be
defined before project appraisal. Therefore, a
Resettlement Policy Framework (RPF) has been
prepared, consulted upon, and disclosed before
project appraisal. Resettlement Action Plans
(RAPs) will be prepared as may be defined by the
detailed design of the works.
Safety of Dams OP/BP 4.37 No The project does not involve dam related works.
Projects on International Waterways OP/BP
7.50
No The project does not affect international
waterways.
Projects in Disputed Areas OP/BP 7.60 No There are no disputed areas along the project
corridor.
58. Both environmental and Social safeguards instruments for the project, i.e. ESMF and
RPF were developed in close consultation with the respective Government Central Agencies
such as National Environment Management Authority (NEMA), National Water & Sewerage
Cooperation (NWSC), National Information Technology Authority (NITA), Ministry of Water
and Environment, Electricity Distribution Company UMEME, Ministry of Tourism and
Antiquities, and respective Local Governments (Districts) through which the road corridor
traverses. The ESMF provides guidance for assessing of the potential environmental and social
impacts of project during implementation. The ESMF established clear guidelines and
methodologies for the identification and assessment of environmental and social impacts. It gives
clear guidance for environmental screening, preparation of environmental assessments with basic
TORs, as well as preparation of Environmental and Social Management Plans (ESMPs). The
ESMF has established basic Terms of Reference (TORs) for EA of Road Works, TORs for EA
of Stone Quarries, guidelines for acquisition and operation of borrow pits, guidelines for
55
establishment of Equipment Storage yards/ Workers Camp, etc. The ESMF also outlines a
framework for managing and monitoring the environmental and social impacts of the project,
including management and handling of physical cultural resources thru a Chance Finds
Procedure, minimizing impacts on the natural habitats, and a mechanism for addressing
grievances. Complementarily, an RPF was developed to provide step by step procedure for
preparing road corridor specific Resettlement Action Plans for project activities that will involve
land acquisition, and this shall be the responsibility of the OPRC Contractor to be procured by
UNRA. The ultimate goal of the ESMF and RPF is to ensure that the proposed project will be
environmentally and socially sustainable including responding to the land acquisition
requirements as may arise. The ESMF was disclosed in-country and at the Bank’s Infoshop on
February 7, 2014. Specific ESIA including site ESMPs and RAPs will be prepared by the OPRC
Contractors and validated by an independent consultant as and when necessary during
implementation, guided by the ESMF and RPF respectively. The ESIAs and RAPs prepared will
be cleared by the Bank and disclosed prior to commencement of any civil/road works. In
addition, the following approvals and clearances shall be obtained before commencement of road
works: NEMA EIA approvals, NFA Forest areas approval, MoU with UMEME, National
Information Technology Authority (NITA) & National Water and Sewage Cooperation (NWSC)
to relocate any respective electricity, IT & water service infrastructure along the road reserves,
Chief Government’s Evaluator approval of RAP and payment of PAPs by UNRA.
59. The potential environmental impacts of the proposed road corridor project include:
clearance of trees and other vegetation due to realignment and road works, road cuts, fills and
embankments, change in hydrology and drainage patterns and increase in sediment load of
swamps and waterways as a result of widening the road embankment across wetlands, and soil
and water contamination due to spillage and leakage of oils and other toxic materials, noise, dust
and air pollution from road works, health & safety issues, acquisition & operation of borrow pits
and stone quarries. A generic ESMP has been developed giving basic guidance on mitigation
measures during the construction and operation phases taking into account both environmental
and social impacts. However, site specific ESIAs and RAP will elaborately identify the
associated impacts and develop specific ESMPs to handle the likely ESIs including land
acquisition. The proposed mitigation measures shall be incorporated into bidding documents to
ensure their implementation through the OPRC Contractor’s SEAP. In addition, the Supervising
Consultants shall be required to include on his team Environmental and Social Development
Specialists.
60. Meanwhile Safeguards capacity assessment of the implementing agency UNRA indicates
they have sufficient experience in implementation of Bank financed projects and are thus
acquainted with environmental safeguards requirements. There is an established Safeguards Unit
under the Directorate of Planning, though generally understaffed. UNRA has one (01)
Environmental Specialist to coordinate, supervise, monitor and report on the implementation of
the environmental aspects of all road projects. UNRA has experienced implementation
challenges with regard to ongoing projects such as Transport Sector Development Project
(TSDP). The key challenges under TSDP include inadequate monitoring and supervision by the
Safeguards staff, inability conduct timely relevant environmental assessments for borrow pits
and stone quarries, limited management and follow-up of environmental and social impacts, and
irregular submission of the required quarterly environmental reports. Apparently, the current
56
staffing level is overwhelmed by the numerous projects UNRA is undertaking. UNRA will
recruit an additional Environmental Specialist, a Sociologist, and a Right of Way Officer who
will be designated among others to handle World Bank projects, within 12 months of project
effectiveness. The Project Manager will oversee and supervise implementation of ESMPs and
RAPs including HIV/AIDS, gender and poverty reduction plans and implications of the project
by the contractors and cover its monitoring and reporting activities. UNRA’s safeguards
specialists will conduct periodical (monthly) field visits. Bank safeguards specialists will
participate in at least two supervision missions per year.
57
Annex 4: Operational Risk Assessment Framework (ORAF)
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP) (P125590)
Risks .
Project Stakeholder Risks
Stakeholder Risk Rating Moderate
Risk Description:
The project will introduce a new
approach to the national road asset
management system and its
operation, the implementation of
which will significantly affect the
maintenance operation and
budgeting practices in Uganda.
Although the OPRC concept has a
strong ownership with key
Government stakeholders, there
could be some groups that may
object or resist the long term
commitment of maintenance
financing to a single corridor as
opposed to the conventional
approach currently practiced, where
available resources are thinly
distributed to all roads.
Risk Management:
The risk management lies in sensitization of stakeholders by engaging them in continued dialogue for a
lasting solution towards the establishment of a long term asset management practice through sustainable road
financing mechanism.
Resp: Both Status: In
Progress
Stage: Implementation Recurrent: Due
Date: Frequency: Yearly
Risk Management:
Establish a well prioritized road development plan that would minimize the increasing rate of growth in
backlog maintenance, and create enabling environment for the construction industry.
Resp: Both Status: In
Progress
Stage: Implementation Recurrent:
Due
Date:
31-
May-
2015
Frequency:
Implementing Agency (IA) Risks (including Fiduciary Risks)
Capacity Rating Substantial
Risk Description: Risk Management:
58
The road sector annual budget
steadily increasing without a
commensurate increase of UNRA
manpower, thus constraining the
implementation capacity and calling
for a substantial increase in
UNRA’s resources.
(a) Use of experienced consultants to prepare conceptual design, bidding documents including
specifying service standards and evaluations of Bids. The bidding documents to clearly define the roles
and responsibilities of the contractor and UNRA.
(b) In country group training on OPRC for UNRA staff and other key stakeholders was carried out by
International Road Federation in August 2013 in Kampala.
(c) Study tours are organized and are being under taken to countries where OPRC has been successfully
implemented. Both activities (b) and (c) are financed under the ongoing TSDP and the training plan is
under review.
Resp: Both Status: Completed Stage: Preparation Recurrent:
Due
Date:
31-
Jan-
2015
Frequency:
The established Road Asset
Management Unit and System of
UNRA is yet to be tested for
efficient implementation.
Furthermore the limited technical
knowledge, critical skills needed
and practical experience in UNRA
in the procurement and
implementation of OPRC contracts
will be a constraining factor
Risk Management:
UNRA’s current structure is under review by a consulting firm with the ultimate aim of recommending an
appropriate structure and budget to manage the increased workload. When the report is approved, the
Ministry of Public Service is expected to approve the new structure based on which the MoFPED would
increase UNRA’s wage cap (budget). Further during project implementation there will be a close follow up
to ensure that UNRA is implementing the change management process to fully implement RAMS.
Resp: Both Status: In
Progress
Stage: Preparation Recurrent:
Due
Date:
31-
Mar-
2015
Frequency:
Governance Rating High
Risk Description: Risk Management:
The overall country governance
related issues noted above could
affect project implementation.
(a) The Government developed a five year NDP based on the vision, political objectives and poverty
reduction strategy of the Country. There is commitment to adhere to the key priority areas and policy
directions spelled out in the NDP.
(b) The Government is also taking steps to reverse the tarnished image of Uganda in light of DPs suspension
of Budget Support following the 2012 corruption allegations in key Government Ministries and has
committed to several critical actions in a High Level Action Matrix which include (i) repayment and
recovery of funds lost through fraudulent acts of public officials; (ii) providing assurance of the fidelity of
59
the Government's Financial Management Systems, and (iii) strengthening anti-corruption and accountability
institutions and legislation. The implementation of these actions will be the starting point to resume policy
dialog with DPs in relation to Budget Support.
(c) The WB will also rethink its engagement on governance given the perceived deterioration of the
governance with a focus on (i) engaging with Parliament, civil society and other non-state actors (ii)
supporting anti-corruption and accountability institutions to build their capacity; (iii) fostering and
supporting Development Partners coordination to strengthen the voice and dialogue impact on governance
and anti-corruption; (iv) enhancing analytical rigor applied to understanding the context and causes of
corruption, and (v) systematic engagement on fiduciary reforms, building payroll and wage bill management,
and the pay reform agenda.
Resp: Both Status: In
Progress
Stage: Both Recurrent: Due
Date: Frequency: Yearly
Project Risks
Design Rating Substantial
Risk Description:
As the number of contractors
operating in the region that have
experience in OPRC
implementation may be limited,
small number of bidders may
respond to the call for bids.
Risk Management:
Promote the project with potential contractors and consultants. Carry an outreach program targeting markets
that have contractors experienced in OPRC prior to the bidding process. This would be done as part of the
efforts of introducing the RSDP 3 and Government initiated project showcasing and the OPRC contracts.
Resp: Client Status: In
Progress
Stage: Preparation Recurrent:
Due
Date:
31-
Dec-
2015
Frequency:
Risk Management:
Sensitization workshop will be carried out prior to launching the pre-qualification process for contracts to be
included under the project. UNRA will get support from the Consultant that has been hired to carry out the
preparation of the pilot asset management contract. It is planned to be a full-day workshop for potential
bidders and other stakeholders during which the consultant will present and explain in detail on the asset
management concept, and answer questions which may arise.
Resp: Client Status: Not Yet
Due
Stage: Both Recurrent:
Due
Date:
31-
Dec-
2015
Frequency:
60
Social and Environmental Rating Moderate
Risk Description:
There could be some land
acquisition for possible road re-
alignment and quarry sites which
may have substantial environmental
and social impacts. This could raise
issues associated with social and
environmental impacts that need to
be addressed. The limited
monitoring, enforcement and
reporting of implementation of
Social and Environmental aspects of
the projects by UNRA and by some
Supervising Consultants could
affect project implementation.
Risk Management:
The Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework
(RPF) have been disclosed. The framework approach is recommended as the design of the road will be done
by the contractor under the OPRC considering the prevailing conditions of the road.
Resp: Client Status: In
Progress
Stage: Preparation Recurrent:
Due
Date:
31-
Dec-
2015
Frequency:
Risk Management:
Capacity assessment has been made and mitigation measures agreed as part of the preparation Mission.
Continuous dialogue on social and environmental compliance condition to ensure effective implementation,
monitoring and reporting.
Resp: Both Status: In
Progress
Stage: Both Recurrent: Due
Date: Frequency: Quarterly
Program and Donor Rating Low
Risk Description: Risk Management:
The possibility that other Donor
partners may not buy in the concept
of the planned projects as it requires
a major shift from current practices.
There is a stated risk element on
grounds that UNRA is not well
prepared and do not have
dependable capacity for OPRC
based contract management.
Current consultations with DPs indicate that there is a general consensus that the OPRC could provide a
solution to issues related with the current contracting method of payments for works and services based on
inputs which is not budget friendly due to variations and price adjustments. Some Donor's has shown their
interest in the application of the OPRC based contracts and to take stock of lessons learned from the
experience of the pilot project as will be reported to UNRA and will also be shared to Partnering Donors. In
addition, they have indicated that as the Bank has pioneered the OPRC elsewhere it would be prudent that it
take the lead in introducing it to the Road sector in Uganda.
Resp: Bank Status: In
Progress
Stage: Both Recurrent: Due
Date: Frequency: Yearly
Delivery Monitoring and
Sustainability Rating Substantial
Risk Description:
Despite increased spending on
roads, there is a substantial gap
between actual needs and resources
Risk Management:
The DPs Group for Transport and the Joint Budget Support Framework (JBSF) will continue to dialogue
with MoFPED to allow for: (a) the direct transfer of road user charges to the RF, (b) enable the RF to operate
like a second generation road fund, and (c) sufficient allocation to cover the unfulfilled road development
61
provided for development and
maintenance interventions. This has
resulted in a scenario whereby the
road assets are not managed based
on an optimized network planning
approach. The operationalization of
URF as a second generation Road
Fund has not yet materialized and
maintenance activities are
underfunded. As such, it has been
very difficult for UNRA to address
the backlog maintenance on the
national road network.
programs and commitments.
Resp: Both Status: In
Progress
Stage: Both Recurrent:
Due
Date: Frequency: Yearly
Other (Optional) Rating Moderate
Risk Description: Risk Management:
UNRA has been subjected to
fraudulent practices by Bidders in
recent Bids. This has primarily been
manifested through mis-
representation of experience by
contractors in order to be qualified
for works contracts. This has
resulted in substantial delays on
concluding the Bid evaluation
process which affected the
implementation schedule of projects
which may lead to higher cost and
delayed disbursement.
The Team will work with the INT, RPM and UNRA to establish mechanism in which Contractors previous
experience could be easily tracked and confirmed without spending substantial amount of time. Further the
ongoing efforts to strengthen the procurement capacity of UNRA under the TSDP project would be
enhanced.
Resp: Both Status: In
Progress
Stage: Both Recurrent:
Due
Date: Frequency: Quarterly
Project Team Proposed Rating Before Review
Overall Implementation Risk: Substantial
Risk Description:
OPRC application in the Uganda road sector is new and UNRA’s systems and institutional arrangements were setup for managing input based
contracts. Thus the implementation capacity for OPRC contract is very limited. In addition, to the increased spending on roads over the last five
years was not supported by a commensurate increase in manpower, thus constraining the implementation capacity and calling for a substantial
62
need for strengthening UNRA’s internal capacity. The Ministry of Public Service is expected to approve the new structure of UNRA, to which the
MoFPED may increase UNRA’s administration budget. In the meantime the project has planned for institutional support UNRA to ensure that the
project is implemented as planned.
63
Annex 5: Implementation Support Plan
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP)
Strategy and Approach for Implementation Support
1. The strategy for implementation support has been developed based on: (a) the nature of
the project; (b) the lessons learned from the implementation experience of the completed projects
that supported the implementation of Road Sector Development Program (RSDP) in Uganda and
the on-going Transport Sector Development Program (TSDP); (c) the Banks’ experience in the
implementation of Output and Performance-based Road Contract (OPRC) contract elsewhere;
and (d) the project risk profile. The strategy is designed to make implementation support to the
client more flexible and efficient. It will focus on the implementation of the safeguards and
fiduciary aspects of project as well as on the risk mitigation measures defined in the Operational
Risk Assessment Framework (ORAF), especially those with regard to governance. In addition to
the day to day advice to be provided by different specialists in the World Bank (WB) country
office formal supervision and field visits will be carried out semi-annually, and will focus on the
following.
2. Technical inputs. OPRC implementation is new in Uganda National Roads Authority
(UNRA), engineering, procurement, and contract management inputs are required to ensure the
timely award and implementation of the OPRC. A very experienced highway engineer who is
well conversant with OPRC will review the bidding documents for the OPRC. During
implementation of the contract close technical supervision will be provided to ensure the
requirements for the services standards are efficiently implemented. The OPRC Engineer will
conduct site visits on a semi-annual basis throughout project implementation. In addition
intermittent technical input will be provided by a Transport Specialist and road safety expert.
3. Fiduciary requirements and inputs. The procurement capacity assessment of UNRA
has recommended at least a bi-annual supervision mission, in addition to the prior review of
contracts, at least one of which shall include carrying out post review of procurement actions.
Similarly the Financial Management (FM) assessment of UNRA has concluded that the need for
a bi-annual supervision mission. Both will focus on addressing the issues that were raised during
the assessments in addition to supporting UNRA in enhancing financial management and
procurement management capacity and efficiency.
4. Safeguards. The environment and social specialist who are based in the country office
will be supporting relevant counterpart staff during the implementation of the project. Field visits
will be made on a semi-annual basis to identify and address any emerging and/or outstanding
social and environmental issue. The supervision will focus on the timely and efficient
preparation and implementation of the Resettlement Action Plan (RAP) and Environmental and
Social Impacts Assessment (ESIA) based on the agreed Resettlement Policy Framework (RPF)
and Environmental and Social Management Framework (ESMF) for the project.
5. Overall project coordination. The Task Team Leader will coordinate the Bank team to
ensure project implementation meets Bank requirements, as specified in the legal documents.
The TTL will meet with senior officials on a regular basis to keep them apprised of project
64
progress and issues requiring resolution at their level.
Implementation Support Plan
6. The implementation support plan is as follows:
Time Focus Skills Needed Resource Estimate (Staff
Weeks/year)
First twelve
months
Team
Leadership
Project Management, supervision, and
coordination
Task Team Leader 8
Project Support Supervision, coordination Transport Specialist/
Economist
4
Technical OPRC road engineering, design, supervision
and expertise
Road Engineer/OPRC
Specialist
10
Social Social safeguards, land acquisition,
resettlement, HIV/AIDS and WB’s Social
safeguards knowledge and road safety
Social Specialist
Road Safety Specialist
3
2
Environment Environmental experience and WB’s
environmental safeguards knowledge
Environmental Specialist 3
Procurement Procurement experience, and Bank’s
procurement knowledge,
Procurement Specialist 4
Financial
Management
FM experience, knowledge of Bank FM
norms, training
FM Specialist 4
12-120
months
Team
Leadership
Project management, supervision, and
coordination
Task Team Leader 6
Project Support Supervision, coordination Transport Specialist /
Economist
4
Technical OPRC road engineering, technical
supervision and expertise,
Highway Engineer
4
Social Social safeguards, land acquisition,
resettlement, HIV/AIDS and WB’s Social
safeguards knowledge
and road safety
Social Specialist
Road Safety Specialist
3
1
Environment Environmental safeguards, supervision and
monitoring, training as needed
Environmental Specialist 2
Procurement Procurement reviews, training as needed
Procurement Specialist 4
Financial
Management
FM reviews, training and monitoring
FM Specialist 4
7. Skills mix required for implementation support is as follows:
Skills Needed Number of Staff Weeks Number of Trips Comments
Task Team Leader 6 Staff Weeks/year Two/year Region based
Highway Engineer/ OPRC
Specialist
6 Staff Weeks/year Two/year HQ/ Region based
Transport Economist 4 Staff Weeks/year Two/year Country based
Social Specialist 3 Staff Weeks/year Two/year Country based
Environmental Specialist 3 Staff Weeks/year Two/year Country based
Procurement Specialist 4 Staff Weeks/year n/a Country based
FM Specialist 4 Staff Weeks/year n/a Country based
Road Safety Specialist 1 Staff Week/year One/year HQ based
65
Annex 6 Economic Analysis
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP)
1. The economic rationale of an asset management contract mainly lies on preserving the
road asset value from further deteriorations through the application of an appropriate intervention
in good time. The benefit of a performance based Asset Management contracts, with regards to
the project financial impact, is to promote innovation, efficiency and effectiveness as contractors
strive to achieve the set performance standards with an optimally agreed budget/contract price.
2. Traffic Studies. Detailed traffic projection and growth analysis was made for the base
case normal, diverted and generated traffic for the different road sections. This was based on
traffic count carried out for 7 days of 24 hours at nine stations. An Origin-Destination survey
was also carried out for a period of 3 days of 24 hour simultaneously with axle load surveys at
the existing stationary weigh bridge at km 46.2 just south of Mbale. Table 1 below summarizes
the traffic count results.
Table 6.1 Traffic count results Location Car
and taxi
Pickups
& St Wagons
Mini
bus
Large
Bus
Small
Trucks
Medium
Truck
Heavy
Truck
Semi-
Trailer
Truck-
Trailer
Total
Vehicular Traffic
excl.
motor cycles
Motor
cycles
Total
Munguria 104 197 120 14 35 71 123 203 5 872 763 1635
Busiu 129 113 126 14 29 56 68 182 4 721 347 1068
Akwarkwar 148 156 166 23 57 53 54 125 10 792 369 1161
Alungale 51 114 124 25 27 65 39 128 9 582 318 900
Awoja
Primary
School 58 113 98 25 36 43 30 107 7 517 381 898
Awasi Village 70 94 43 8 33 80 22 113 5 468 313 781
Awiro Village 160 108 50 8 35 36 19 103 6 525 462 987
Alidi 135 136 27 13 25 39 22 107 5 509 114 623
Amwa Hq 71 171 36 38 18 56 30 121 7 548 76 624
3. Traffic growth estimates for the low, medium and high traffic growth scenario’s
considered for the four passenger and five freight transport vehicle categories. The annual traffic
growth rates of the base case traffic, for the periods 2013-2020 and 2021-onwards, for each
vehicle categories traffic growth assumptions (under the low, medium and high) are shown on
table 6.2 below.
Table 6.2 Traffic growth rate by Vehicles Categories Vehicle Categories 2013-2020 2021-foreward
Low Medium High Low Medium High
Passenger Transport
Cars 4.5% 5.6% 6.8% 3.2% 4.0% 4.8%
Pick/St. Wagon 4.5% 5.6% 6.8% 3.2% 4.0% 4.8%
Small Bus 4.5% 5.6% 6.8% 3.2% 4.0% 4.8%
Large Bus 6.1% 7.6% 9.1% 4.0% 5.0% 6.0%
Freight Transport
Small Truck 6.1% 7.6% 9.1% 4.0% 5.0% 6.0%
Medium Truck 6.1% 7.6% 9.1% 4.0% 5.0% 6.0%
Heavy Truck 6.1% 7.6% 9.1% 4.0% 5.0% 6.0%
Semi-Trailer 6.1% 7.6% 9.1% 4.0% 5.0% 6.0%
Truck Trailer 6.1% 7.6% 9.1% 4.0% 5.0% 6.0%
Source: Consultants estimate based on official GDP and traffic statistics
66
4. The traffic projections of the economic analysis assumed that the generated traffic growth
rate will be 10 percent in year 2016 for all sections. Accordingly, the Annual Daily Traffic
(ADT) for medium traffic growth scenarios for each of the road sub-sections is shown on graph
below.
5. The five identified scenario options for project implementation results of the Highway
Design and Maintenance (HDM) analysis are shown on the table below (table 6.3). The
economic evaluation provided a comparison of the five scenarios for a combination of
maintenance strategies, for the three options including Scenario 4 of responsive maintenance
assumption, against a base case scenario (do-minimum) at which the scope of maintenance is
based on realistic measures applied. Scenario 1-3 represents the maintenance measures that are
applied for the seven road sections at specific years over the ten year Output and Performance-
based Road Contract (OPRC) contract period. While scenario 4 is representing responsive
maintenance when IRI>4.5 and is therefore not taking into consideration the logistics
implications in terms of mobilization and optimization of the contractors work schedule. The
results of the economic evaluation compared the four Scenarios for maintenance measures and
expressed in terms of Economic Internal Rate of Return (EIRR), Net Present Value (NPV).
Discount rate of 12 perecnt is used for the 22 year period in order to show the full analysis
representing the technical lifetime of the road assets. There are clear indications from the overall
analysis that show the project feasibility and its financial viability will be based on appropriate
selection of service level standards for cost effectiveness and ensuring its sustainability.
6. Based on review comments on the study report, an HDM re-run was also made to
strengthen the sensitivity analysis especially considering the 20 year design life option; in place
of the 15 year base case scenario analysis of the consultant. Results from the Falling Weight
Deflectometer (FWD) measurement and survey results are also included in the HDM re-run
sensitivity analysis; both for the seven segments of the corridor and whole sections of the road.
For the combined sections of the whole corridor, the table below provides the NPV and EIRR
economic indicators for Scenario 1-4 for the traffic levels. The summary table below presents the
NPV and EIRR values obtained for Scenario 1-4 for traffic forecast levels of 20 percent reduced
traffic from base case, medium or base case traffic, and 20 percent increased traffic from base
case and takes up the medium base case combined result for the whole sections analysis of the
project road.
67
Table 6.3: EIRR and NPV Results of the Economic Analysis
Traffic
scenario
Scenario 1
(Scheduled
maintenance)
Scenario 2
(Scheduled
maintenance)
Scenario 3 (3A) Scheduled
maintenance)
Scenario 4
(Responsive
Maintenance)
NPV EIRR NPV EIRR NPV EIRR NPV EIRR
All
Sections
High
(+20%) -3.8 11.6% -1.3 11.8% 19.3 (18.8) 15.0% (15.0%) 9.4 13.7%
Base Case -14.4 10.3% -11.9 10.5% 8.7 (8.2) 13.5% (13.4%) 0.0 12.0%
Low (-
20%) -24.6 8.8% -22.0 9.0% -1.4 (-1.9) 11.7% (11.6%) -7.4 10.5%
Source: Consultants HDM-4 computations
7. The overall findings, as shown in the results summary tables of the analysis, justified the
feasibility of the project under scenario options 3 with an EIRR value of 12.0 percent, for the
responsive maintenance option 4, and 13.5 percent for the scheduled maintenance option 3. The
NPV value for option 3 is US$8.7 million while the NPV value for option 4 is zero. In addition
to that it has been noted that option 4, from the point of the logistical and operational aspect, will
not be a realistically preferred option for a long term OPRC contracting.
8. The HDM analysis considered 15 year design life and 20 years (recommended design life
for national roads) for sensitivity testing and optimal costing of the project. However, the base
case for the OPRC analysis is for a period of 10 years. The appraisal analysis was made for an
asphalt concrete (AC) overlay. Results of the analysis are used to determine the level, type and
year of maintenance intervention for each of the seven sections. Detailed results of the economic
analysis, by road segment, for each sections of the seven lots, is also shown in a summarized
form in the summary table below. The logistics of maintenance works as defined for Scenario 1-
3, and the corresponding works advantages for the OPRC contractor, should favor those
scenarios as compared to the responsive maintenance Scenario 4. However, the comparison from
among Scenario 1-3, with scheduled maintenance, the more feasible scenario will be option 3,
with an EIRR value of 13.5 percent at which maintenance of the seven road sub-sections are
schedules over the periods for the respective 35 mm and 55 mm overlay.
9. Scenarios options are considered to be comparable based on the development of the
roughness level over time on the eight road sub-sections. The condition of the different road sub-
section will be at the same quality level after 10 years (OPRC contract) and 22 years (for lifetime
technical and economic analysis of the road). The comparative analysis of the economic analysis
of the Scenarios takes into account the importance of the logistics of the maintenance works to
be carried out by the OPRC contractor.
10. The breakdown of the full economic costs and benefits of the project road (all sections
under medium traffic growth assumption) for the respective maintenance scenarios, under the
different traffic growth scenario’s (+/-20 percent, against base case) are presented in summarized
form in the table below. It indicates that the majority of the benefits come from savings in
vehicle operating costs followed by travel time savings. However, the Economic analysis results
68
for option 3 shows that more gains obtained from Vehicle Operating Cost (VOC) savings for
Lots 1 & 2, whereas time savings are higher for Lot 3 of the project.
Table 6.4: Results of the Economic Analysis for Scenario 1 to 4 (EIRR & NPV (US$
million)
IRR Traffic
scenario
SCENARIO 1
(Scheduled
maintenance)
SCENARIO 2
(Scheduled
maintenance)
SCENARIO
3 (Scheduled
maintenance)
SCENARIO
3A
(Scheduled
maintenance)
SCENARIO 4
(Responsive
Maintenance)
NPV EIRR NPV EIRR NPV EIRR NPV EIRR NPV EIRR
Section 1 Growth 1.2 3.6 17.0% 4.0 18.3% 5.0 21.7% 5.1 23.4% 4.5 23.2%
Basis 2.5 15.8% 2.9 16.9% 4.0 20.2% 4.1 21.7% 3.9 22.1%
Growth 0.8 1.4 14.3% 1.8 15.3% 2.9 18.4% 3.0 19.7% 2.8 20.0%
Section 2 Growth 1.2 2.5 14.4% 3.1 15.6% 4.6 18.3% 4.9 19.7% 4.2 19.4%
Basis 1.1 13.2% 1.8 14.2% 3.3 16.8% 3.6 18.0% 3.0 17.7%
Growth 0.8 -0.2 11.7% 0.5 12.6% 2.0 15.2% 2.2 16.1% 1.6 15.5%
Section 3 Growth 1.2 0.6 13.2% 0.9 14.4% 1.6 16.7% 1.7 18.0% 1.4 17.5%
Basis 0.0 12.0% 0.4 13.0% 1.0 15.3% 1.2 16.4% 0.9 15.8%
Growth 0.8 -0.5 10.8% -0.1 11.7% 0.5 13.9% 0.7 14.8% 0.3 13.6%
Section 4 Growth 1.2 1.9 12.9% 1.2 12.6% 4.3 14.7% 5.1 15.7% 5.7 18.2%
Basis -0.7 11.7% -1.3 11.3% 1.8 13.2% 2.7 14.0% 3.3 15.9%
Growth 0.8 -3.4 10.1% -4.0 9.5% -0.8 11.4% 0.0 12.0% 1.8 14.2%
Section 5 Growth 1.2 -4.5 9.0% -4.4 9.1% 0.1 12.1% -1.8 10.8% -4.8 8.0%
Basis -6.2 7.6% -6.1 7.6% -1.6 10.4% -3.5 9.3% -5.7 7.3%
Growth 0.8 -7.8 6.0% -7.7 6.1% -3.2 8.6% -5.2 7.9% -7.0 6.1%
Section 6 Growth 1.2 -4.7 8.8% -4.2 9.1% -0.2 11.8% -0.2 11.8% -2.7 9.7%
Basis -6.2 7.5% -5.6 7.8% -1.8 10.2% -1.7 10.3% -4.2 8.1%
Growth 0.8 -7.6 6.2% -6.9 6.6% -3.1 8.7% -3.0 8.7% -5.5 6.5%
Section 7 Growth 1.2 -3.1 10.2% -2.0 10.7% 3.9 15.9% 3.9 15.8% 1.0 13.1%
Basis -4.9 8.8% -3.9 9.4% 2.0 14.1% 2.0 14.1% -1.1 10.5%
Growth 0.8 -6.5 7.5% -5.5 8.1% 0.4 12.5% 0.3 12.4% -1.5 10.2%
All Sections Growth 1.2 -3.8 11.6% -1.3 11.8% 19.3 15.0% 18.8 15.0% 9.4 13.7%
Basis -14.4 10.3% -11.9 10.5% 8.7 13.5% 8.2 13.4% 0.0 12.0%
Growth 0.8 -24.6 8.8% -22.0 9.0% -1.4 11.7% -1.9 11.6% -7.4 10.5%
Source: Consultants HDM-4 computations
11. Impacts of the project. As the project road serves the Northern part of the country, as
major economic and regional corridor for the country, there are additional benefits not well
quantifiably captured as part of the economic analysis. This includes local access to market areas
and social services, including the ones in the district town to be connected through the
realignment. The other key impact of the proposed project is the enhancement of road safety.
The project will reduce the negative transport externalities through improved road safety and
axle overload control measures and also improved management of national roads through the
strengthening of UNRA’s capacity for road asset management. The project will also have impact
on poverty reduction and improving the livelihood of the poor along the project area, as it will
help increase productivity and farm gate prices for agricultural products. As well, the project will
69
provide income generating employment opportunities during the construction and maintenance
period.
Table 6.5: Breakdown of Economic Benefits (NPV, USD million)
SCENARI
O 1
SCENARIO
2
SCENARIO
3
SCENARI
O 3A
SCENARIO 4 (Responsive
Maintenance)
Traffic Growth 1.2
Net investment
Costs
0.0 0.0 0.0 0.0 0.0
Maintenance
Costs -86.2 -82.3 -63.0 -63.1 -72.5
VOC 50.4 49.6 50.3 50.1 49.6
Travel time costs 30.9 30.2 30.9 30.6 31.2
NPV -3.8 -1.3 19.3 18.8 9.4
Basis
Net investment
Costs 0.0 0.0 0.0 0.0 0.0
Maintenance
Costs -86.6 -82.7 -63.4 -63.5 -71.5
VOC 43.8 43.0 43.7 43.5 42.8
Travel time costs 27.5 26.9 27.5 27.3 27.8
NPV -14.4 -11.9 8.7 8.2 0.0
Traffic Growth 0.8
Net investment
Costs 0.0 0.0 0.0 0.0 0.0
Maintenance
Costs -87.6 -83.7 -64.4 -64.5 -69.8
VOC 37.8 37.0 37.7 37.5 36.9
Travel time costs 24.5 23.8 24.5 24.2 24.7
NPV -24.6 -22.0 -1.4 -1.9 -7.4
Table 6.6: Distribution of cost and benefits for Lot 1 to 3 and
Total for maintenance, VOC and time (NPV, USD million)
Maintenance VOC Time
Lot 1 -27.4 24.4 12.8
Lot 2 -24.9 13.5 7.5
Lot 3 -11.1 5.8 7.2
Total -63.4 43.7 27.5
Source: Consultants HDM-4 computations
12. Sensitivity analysis. Shows that the project for scenario 4 has an EIRR value of 10.5
percent for 20 percent reduced traffic and increased costs combination. Unlike the others,
scenario 4 is based on responsive maintenance option for IRI>4.5 and is not taking into
consideration the logistics in terms of mobilization and optimization of the contractors work
schedule. Hence, the recommended option 3 with an EIRR of 13.5 percent and NPV of 8.7
million, based on base case traffic (normal+ generated traffic scenario) is further analyzed. In
case of a higher variation in traffic and cost, for 20 percent increase in traffic and percentage
increase in cost, the results will go higher than the discount rate showing that long term
maintenance contract would be a more economical option.
70
Annex 7: Governance and Anti-Corruption
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP)
1. The project will build upon key governance and anti-corruption measures implemented
under the ongoing Technical Sector Development Program (TSDP) by Uganda National Roads
Authority (UNRA). The Governance and Accountability Action Plan (GAAP) is aimed at
developing a system and culture for promoting transparency and accountability in the sector.
UNRA took actions to establish arrangements for Institutional Support and Integrity
Enhancement Services (ISIES) to support the implementation of institutional reforms that are
geared towards improving governance in the road sector. The ISIES consists of the following
actions: (a) the use of the Independent Parallel Bid Evaluation (IPBE) System; (b) building
capacity of the procurement and disposal unit, and the internal audit and financial management
units; and (c) strengthening the contract management system.
2. Capacity Building and Reorganization in Procurement. The Procurement Disposable
Unit (PDU) of UNRA has been elevated to a Directorate level and the Director of Procurement,
who was appointed in November 2012, is now directly reporting to the Executive Director (ED).
The Directorate of Procurement now has two Units, each headed by a Manager: The Works and
Services Unit and the Goods and Supplies Unit. Prior to this, procurement was undertaken by a
Unit which was under the Directorate of Finance and Administration. The restructuring has given
the Directorate its due importance in the Entity, with more competent staff which includes
Technical Assistance financed under the TSDP. UNRA got accreditation from the Public
Procurement and Disposal of Public Assets Authority (PPDA) in carrying out the proposed
changes within the framework of the requirements of the PPDA.
3. Introduction of an Independent Parallel Bid Evaluation (IPBE) System. The
introduction IPBE system aimed at increasing public confidence, improving and validating the
quality of the decision making process and ensuring integrity in UNRA’s procurement functions
for works and services was instituted. The DFID financed consultant commenced services in
March 2012 and is carrying out an independent evaluation of bids and proposals for works: all
large contracts above US$10 million equivalent; at least 30 percent of all contracts between
US$1 million and US$10 million equivalent and a random sample of contracts below US$1.0
million, and for consultancy: all large contracts above US$2 million equivalent and 50 percent of
all contracts between US$1 million and US$2 million. The consultant has to date completed
evaluating 79 procurements (32 consultancies and 47 works) of which apart from one evaluation,
the IPBE and UNRA’s process have been in agreement. This process has helped UNRA’s
Contract Committee to benchmark UNRA’s evaluation process while improving the quality of
the decisions and has also increased the confidence in the UNRA procurement process.
4. Enhancement of the Internal Audit Unit of UNRA. During the appraisal for the
additional financing under TSDP, it was agreed that UNRA strengthens capacity to undertake
technical audit of projects. As such a consultant financed under TSDP was appointed in October
2013 to provide technical assistance in establishing the Technical Audit Unit in UNRA’s Internal
Audit Directorate, to be staffed with Engineers and Contract Specialists, to enable the
Directorate carry out Technical audits, in addition to the Financial Audits which they presently
carry out. The aim of the technical audit is to provide UNRA Management with a real time
71
opinion on the efficiency, cost-effectiveness and transparency of the investments that the
Authority is called upon to manage. This technical audit, performed by experts, shall look at the
implementation of the budgeted activities of the Authority on a random basis and/or when it is
called by the Management and/or other stakeholders on particular issues highlighted as affecting
the implementation of the project or program activities. The technical audits unit would be used
as one of the mechanisms to ensure that the planned activities under the NERAMP have met the
intended purposes.
5. Whistle Blower’s Policy. UNRA has developed a Whistle blowing Disclosure Policy in
line with the Whistle blowers Protection Act that was enacted by Parliament in May 2010. The
Policy is aimed at increasing the catchment of complaints and to provide guidance on procedures
for managing complaints within UNRA. The Internal Audit Unit has installed Suggestion boxes
at UNRA Headquarters and up-country Stations, Ferry Landing Sites and Weigh bridges. These
are open to the public and all stakeholders to forward their views to UNRA and are periodically
checked and contents summarized for management information and action. This system has
already triggered investigations by the Internal Audit from which recommendations have been
made to management.
6. Other initiatives to improve transparency and stakeholder involvement in road
activities. UNRA maintains an email ([email protected]) available to the public through which
comments, complaints or compliments are received. Two additional staff members for the
Corporate Communications Unit have been hired on temporary contracts, with the intention of
retaining them as permanent staff and were providing support on customer service and social
media. The Unit is also compiling monthly Media Analysis Reports with summaries on articles -
negative and positive-that are published in the print media on UNRA and its activities. These
include studies and projects (planned, ongoing or completed), service levels and safeguards
issues, as well as performance of contractors.
7. Establishment of a Contract Management System. UNRA has procured a Consultant
to establish a Contract Management System (CMS). The CMS containing agreed Indicators of
Conformity (ICs) and Red Flag System will be crucial for internal performance management and
accountability system. The CMS was installed and tested at UNRA in March 2013. It is now
being populated with contract data before it can be put to full use.
8. Construction Sector Transparency (CoST) Initiative. Whereas the above activities
will enhance the capacity of UNRA and build on achievements under TSDP, they fall short of
expanding the roles of citizens in ensuring transparency, accountability and participation in
achieving the results of the project. NERAMP will build on the transparency pillars of the CoST
Initiative, for which Uganda became the 10th
Member Country in October 2013.
9. This would involve UNRA working together with oversight agencies, private sector
consultants and contractors, and civil society groups to improve transparency. CoST uses the
disclosure of key non-sensitive information and a multi-stakeholder approach to improve
transparency and to complement other oversight bodies. CoST will be working directly with the
UNRA who will lead in the implementation of CoST within the country. Implementation of the
CoST Uganda program builds on a Multi-Stakeholder approach used by the Uganda Road
72
Council (URC). Under the CoST initiative UNRA will devise mechanism for working together
with oversight agencies, private sector consultants and contractors, and civil society groups to
improve transparency. The NERAMP will finance, under the Component 2 of the project, the
operational cost associated with the implementation of CoST in UNRA. The Project will also
benefit from social accountability measures to being developed at the Country level as part of the
overall Bank demand for good governance framework.
73
Annex 8: Letter of Sector Development Policy
UGANDA: North Eastern Road-corridor Asset Management Project (NERAMP)
74
75
76
77
78
79
80
81
82
PakwachOlwiyo
Atiak
Nimule
Karuma
BusunjuGayaza
ZirobweWobulenzi
Katunguru
Kilembe
Mpondwe
Bundibugyo
Bushenyi
Ibanda
Kiruhura
Ntungamo
Hoima
IgangaBusia
Sironko
Bugiri
Kabale
KamuliKaliro
Butaleja
Budaka
KayungaKyenjojo
Kapchorwa
Bukwo
Kasese
Kisoro
Kitgum
Kumi
Kaberamaido
Lira
LuweroNakaseke
Nakasongola
Masaka
Kamwenge
Kalangala
Masindi
Mbarara
Kanungu
Moroto
NakapiripiritKatakwiAmuria
Moyo
Kibale
Pallisa
Soroti
FortPortal
Arua
Jinja
Bubulo
Mbale
Tororo
Gulu
Nebbi
Apac
Amolatar
Mubende
Rukungiri Isingiro Rakai
Sembabule
Mpigi
MukonoMityana
Wakiso
Kiboga
Kotido
Kaabong
AdjumaniYumbeKoboko
Kilak
Maracha
Kamdini
Dokolo
Busiki
Bulisa
Abim
KAMPALA
DEM. REP.OF CONGO
S U D A N
K E N Y A
K E N Y A
TANZAN IATANZAN IA
RWANDA
Vurra
Corner Aboke
Corner Ayer
Malaba
Katuna
Pakwach
Vurra
OlwiyoCorner Aboke
Corner Ayer
Atiak
NimuleOraba
Karuma
Kafu
MalabaBusunjuGayaza
Nyakaita
Mutukula
Katuna
ZirobweWobulenzi
Katunguru
Kilembe
Mpondwe
Bundibugyo
Bushenyi
Ibanda
Kiruhura
Ntungamo
Hoima
IgangaBusia
Sironko
Bugiri
Kabale
KamuliKaliro
Butaleja
Budaka
KayungaKyenjojo
Kapchorwa
Bukwo
Kasese
Kisoro
Kitgum
Kumi
Kaberamaido
Lira
LuweroNakaseke
Nakasongola
Masaka
Kamwenge
Kalangala
Masindi
Mbarara
Kanungu
Moroto
NakapiripiritKatakwiAmuria
Moyo
Kibale
Pallisa
Soroti
FortPortal
Arua
Jinja
Bubulo
Mbale
Tororo
Gulu
Nebbi
Apac
Amolatar
Mubende
Rukungiri Isingiro Rakai
Sembabule
Mpigi
MukonoMityana
Wakiso
Kiboga
Kotido
Kaabong
AdjumaniYumbeKoboko
Kilak
Maracha
Kamdini
Dokolo
Busiki
Bulisa
Abim
KAMPALA
DEM. REP.OF CONGO
S U D A N
K E N Y A
K E N Y A
TANZAN IATANZAN IA
RWANDA
Albe
rt
Nile
Victoria Nile
L a k e
V i c t o r i a
LakeEdward
LakeEdward
Lake Albert
To Faradje
To Juba
To Lodwar
To Beni
To Bunia
To Beni
To Nyakanazi
To Kisumu
To Nakuru
To Kigali
To G
oma
30°E
4°N
2°N
0°
4°N
2°N
0°
32°E
32°E 34°E
UGANDA
0 25 50 75
0 25 50 75 Miles
100 Kilometers
IBRD 40820
APRIL 2014
Th is map was produced by the Map Des ign Uni t o f The Wor ld Bank. The boundar ies , co lo rs , denominat ions and any other in format ionshown on th is map do not imply, on the par t o f The Wor ld BankGroup, any judgment on the lega l s ta tus of any te r r i to r y, o r anyendorsement or acceptance of such boundar ies .
UGANDANORTH EASTERN ROAD-CORRIDOR
ASSET MANAGEMENT PROJECT (NERAMP)PAVED ROADS
GRAVEL ROADS
NATIONAL CAPITAL
DISTRICT CAPITALS
MAIN CITIES
INTERNATIONAL BOUNDARIES
ROAD UNDER NERAMP
ROADS BEING PAVED UNDER TSDP AND THE AF
ROADS UPGRADED OR RECONSTRUCTEDUNDER RDPP
Source: Uganda National Road Authority (UNRA).
GSDPMMap Design Unit