Document of

The World BankFOR OFFICIAL USE ONLY

Report No. 6328

PROJECT PERFORMANCE AUDIT RFl'RT

GUINEA BISSAU FIRST ROADS PROJET(,

(CREDIT 878-GUB)

.iinc 3 0, 198i

)pr ra.t i on Ev, lunt ionr DPopartmint

This document has a restricted distribution and -nay be used by recipients only in the performanceof their ofFicial duties. Its contents may not otherwise be disclosed without World Bank authorization

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ABBREVIATIONS AND ACRONYMS

aIdt - average daily traffic

BNC - Banco Naciorial da Guine Bissau

EEC - European Economic Comnunity

MSE - Ministry of Social Equipment (Formerly Ministry ofPublic Works, Construction and Urban)

MTT - Ministry of Transport and Tourism

VoC - Vehicle Operating Cost

vpd - vehicles per day

FWAR OFFCIAL USE ONLYYt* WORLD SANK

Wash,ngion DC 20433U.SA

OIute diOe DtEwC"l.Odicsto uw aluuI,uV,

June 30, 1986

MEMORANDUM TV THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Performance Audit Report on Guinea Bissau First RoadsProject (Credit 878-GUB)

Attached, for information, is a copy of a report entitled "ProjectPerformance Audit Report on Guinea Bissau First Roads Project (Credit 878-GUB)"prepared by the Operations Evalliation Department.

Attachment

This document ha a restricted di¶r!utic,! ans mf te usez, by rcs - ent5 only in the performanceof their official duties uLs conterne rr,-, nc c,-v is bc dis los- I cs DUt ulorld Bank authorization

FOR OFFICIAL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

GUINEA BISSAU: FIRST ROADS PROJECT(CREDIr 878-GUB)

TABLE OF CONTENTS

Page No.

Preface ........................ ...................................1Basic Data Sheet .......................... .................... iiEvaluation bimmary ... ...... ................................. . . vi

PROJECT PERFORMANCE AUDIT MEMORANDUM

I. INTRODUCTION ...... ...................................... 1

The Country .......................................... . 1The Transport Sector .................................... 3IDA Assistance to the Transport Sector ................. . 4

II. THE FIRST ROADS PROJECT ............ 5

Project Preparation . ..................... 5Project Objectives .. *. .. 5Project Implementation .................................. 6Costs, Disbursements and Procurement .................... 8Economic Rate of Return ................................. 9

III. FINDINGS AND RECOMMENDATIONS ............................ 9

Annex 1 Abstract of Key Documents in the Project File .... ....... 15

Project Preparat'on ..................................... 15Project Execution ....................................... 20

PROJECT COMPLETION REPORT

I. Introduction . ............................................ 25II. Project Identification, Preparation and Appraisal ....... 26III. Project Implementation .................................. 27IV. Institutional Development .............................. 31V. Economic Evaluation .32

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

TABLE OF CONTENTS (Cont.)

Paze No.

VI. Borrower and Bank's Perfonmance .............. ........... 32VII. Conclusion ............................. .. ............. , 33

Tables

1. Cost and Benefit Streams .......... . ......... ... 352. Estimated and Actual Completion of Roads ................. 373. Estimated and Actual Project Costs ....................... 39

i

PROJECT PERFORMANCE AUDIT REPORT

GUINEA BISSAUs FIRST ROADS PROJECT(CRED)IT 878-GUB)

PREFACE

This is the performance audit report on the First Roads Projectfor which Credit 878-GUB in the amount of US$9.0 million was approved inJanuary 1979. An EEC Special Action Credit (44-GUB) in the amount of US$1.0million was approved in December 1979. Both the IDA and the EEC Creditshave been fully disbu-sed.

This document consists of a Project performance Audit Memorandum(PPAM) prepared by the Operations Evaluation Department (OED), and of aProject Completion Report (PCR) prepared by the West Afri:a Rogional Office.

OED studied the documentation preserved in the Records Center andreviewed the project against the Staff Appraisal (SAR) and the President'sReport (PR), as well as against the legal documents and the transcripts of theExecutive Directors' meetings which considered the project. Disctssionr; onproject formulation, implementation and follow-up were held with Bank staffand consultants. An OED mission visited Guinea Bissau in February 1986 tosecure Government views on the project, and the assistance extended to themission is gratefully acknowledged. Copies of this draft report were sent tothe Government and the cofinanciers for their couments; however, none werereceived.

The PCR provides an adequate summary of project preparation andimplementation. Like the First Roads Project, the subsequent Bissau PortProtect of 1983 and the Second Roads Project of 1984, focussed on worksrehabilLitation and institutional reform. The audit availed itself of theopportunity to look into the country framework within which IDA has beenassisting the transport sector.

ii

PROJECT PERFORMAN_E AUDIT REPORT

GUINEA BISSAU: FIRST ROADS PROJECT(CREDIT 87-GUB)

BASIC DATA SHEET

KEY PROJECT DATA

BORROWER Government of Guinea BissauEXECUTING AGENCY Ministry of Social Equipment(MSE)FISCAL YEAR OF BORROWER January 1 - December 31

Appraisal Actual/Estimate LatestEstimate

(US$ million equivalent)

TOTAL PROJECT COST 10.14 11.60 /1CREDIT AMOUNT 9.00 9.00EEC SPECIAL ACTION CREDIT ---- 1.00 /2GOVERNMENT PARTICIPATION 1.10 1.60 /3

PROJECT COMPLETION DATE March 1983 December 1984ECONOMIC RATE OF RETURN (ERR) 33% /4 17% /I5

/1 Estimated and actual costs are not comparable (PCR, para 3.12).

/2 The EEC Special Action Credit was intended to ease the Government'sfinancial difficulties by reducing its contribution from US$1.10 millionequivalent to US$0.1 million.

/3 Despite the EEC contribution, the Government's share increased andcovered cost overruns mainly due to wages and salaries.

/4 Figure given in para 4.04 of the January 1979 SAR. The figure given inthe July 19, 1978 Issues Paper was 41%. Before that, the Draft ProjectBrief of November 1977 had stated (para 11) that "an economicjustification according to IDA's customary criteria may be impossible".

/5 Figure given in the PCR: result of benefits from deferred maintenanceand vehicle operating cost savings. Lacking reliable data, the auditcould not calculate an alternative ERR and believes that none should beshown.

'.il

OTHER PROJECT DATA

DATE

FIRsi DOCUMENT IN THE FILE June 1977PROJECT APPRAISAL July 1978NEGOTIATIONS December 1978BOARD APPROVAL January 1979CREDIT AGREEMENT SIGNED February 1979SPECIAL ACTION CREDIT APPROVAL December 1979SPECIAL ACTION CREDIT SIGNED April 1980CREDIT EFFECTIVE June 1979SPECIAL ACTION CREDIT EFFECTIVE July 1980CREDIT CLOSED December 1984 /6PCR RECEIVED BY OED November 1985

CREDIT (AMOUNT/PERCENT) DISBURSEDBY ORIGINAL CLOSING DATE US$8.1 million/90Z

FOLLOW-ON PROJECTS

NAME Bissau Port ProjectCREDIT NUMBER 1392-GUBCREDIT AMOUNT SDR 14.9 millionCREDIT AGREEMENT DATE 1983

NAME Second Roads ProjectCREDIT NUMBER 1473-GUBCREDIT AMOUNT US$8.0 millionCREDIT AGREEMENT DATE 1984

16 Original closing date: September 1983.

iv

CUMULATIVE DISBURSEMENTS

FY79 FY80 FY81 FY82 FY83 FY84 FY85

ESTIMATED 1.00 5.64 7.18 8.72 9.00 ACTUAL 0.10 1.91 5.52 7.18 8.44 8.93 9.00

ACT/EST (X) 10 34 77 82 94 99 100

COUNTRY EXCHANGE RATES

1978 Appraisal year average s US$1.00 - GP 351979/83 Intervening years average: - GP 371984 Completion year average: - GP105

v

MISSION DATA

Mission Number Man ReportDate of Staff Weeks Date

Identification Dec. 1977 1 1.4 Dec. 1977Preappraisal Mar. 1978 8 13.0 Apr. 1978Appraisal Jun. 1978 3 6.9 Jan. 1979Post-appraisal Oct. 1978 1 0.4 Nov. 1978

Subtotal 21.70 manweeks

Superv. I Mar. 1979 2 1.3 Apr. 1979Superv. II Jun. 1979 2 0.9 Jul. 1979Superv. III Apr. 1980 2 1.7 May 1980Superv. IV Sep. 1980 1 1.0 Oct. 1980Superv. V Feb. 1981 1 1.0 Mar. 1981Superv. VI Jul. 1981 1 1.0 Aug. 1981Superv. VII Jan. 1982 1 0.7 Feb. 1982Superv. VIII Sep. 1982 2 1.7 Oct. 1982Superv. IX Oct. 1983 2 0.8 --- -- /7Superv. X Jun. 1984 1 1.0 July 1984Superv. XI Oct. 1984 2 1.1Superv. XII Dec. 1984 1 0.2Superv. XIII Feb. 1985 1 0.2 ----- - /8

Subtotal 12.60 manweeks

TOTAL STAFF TIME

FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 Total

Id/Prep. 66.9 0.1 - 67.1Negotiation - 7.3 - - - - 7.3Appraisal 3.9 27.1 - - - - - - 30.9Supervision - 5.1 15.1 10.3 7.9 6.2 2.3 2.7 49.7

/7 No supervision report prepared.

/8 A combined supervision report (dated April 8, 1985) was prepared forthe last three missions.

vi

PROJECT PERFORMANCE AUDIT REPORT

GUINEA BISSAU: FIRST ROADS PROJECT(CREDIT 878-GUB)

EVALUATION SUMMARY

Introduction

The small West African country of Guinea Bissau is poor, withlimited economic potential, and a 1982 population of about 810,000 percons,752 of whom are illiterate. The sole political party, which has been in powersince independence in 1974, has expanded employment in the public sector.This, plus the Government's inexperience, led to unwise investment decisionsand heavy external indebtedness. Agriculture is subsistence-oriented and hasbeen performing poorly. Despite some potential, the fisheries and forestryse.tors show a disappointing record because they are badly managed. The in-dustrial sector is undeveloped and dominated by parastatal. enterprises whichcannot show a profit. Real GDP has been shrinking and the co'ntry depends onforeign aid to meet most of its investment and much of i s recurrent expendi-tures (PPAM, paras 1-3).

Domestic transport relies on road and rivers. Road transport ser-vices are inadequate and expensive, largely because they are dominated by twopublic trading companies beset by management and operational problems. Trans-port planning suffers from the lack of qualified staff and from poor coordina-tion among the ministries and public Sodies concerned (PPAM, para ').

As of March 1986, IDA has financed The First Roads Prolect of1979, the Bissau Port Proiect of 1983, and The Second Roads Project of 1984.All three have been focussed on worke rehabilitation and on institutional re-form (PPAM, para 5).

Prolect Preparation and Implementation

The First Roads Project was identified in 1977, appraised in July1978 and approved in January 1979. IDA was keen to establish a good relation-ship with the country and to assist the transport sector through a series ofoperations (PPAM, para 7). IDA was aware that, given the Government's Lack ofqualified staff, project success would largely depend on the performance oftechnical assistance personnel (PPAM, Annex 1, paras 1-A.2). Neither IDA northe consultant made sure that reasonable accommodation existed in the countrybefore the arrival of the technical aasistance personnel (PPAM, para 16).This, combaned with the Government's uncooperative attitude (PCR, para 6.01),reduced the effect of both technical assistance and of staff training (PPAM,para 16).

vii

Project objectives (PPAM, para 7) aimed at works rehabilitation,improvement of road links, strengthening of maintenance, and staff training.They were sound and modest targets. Insufficient account was taken of imper-fections in the civil service. These led to difficulties with the consultants(PPAM, paras 15-16; PPAM, Annex 1, para A.14; PCR, paras 3.09-3.11); unsatis-factory accounting (PCR, paras 3.12 and 3.15); and extremely lengthy procure-ment procedures (PCR, para 3.15). Works rehabilitation was moderately suc-cessful (PPAM, paras 8 cind 12-13; PCR, paras 3.03-3.08). Improvement of roadlinks was less successfult (PPAM, para 9 and 12-13; PCR, paras 3.03-3.08).There was little improvement to the maintenance operation in spite of threebrigades being set up for the purpose (PCR, paras 3.03-3.08) and effectivemaintenance in future is unlikely without continuing external assistance(PPAM, para 10). St&ff training did have some effect which, again, will notbe lasting in the absence of funds and administrative support outside the roadsector (PPAM, para 16; PCR, para 3.09).

Estimated and actual project costs (lUS$10.1 million and US$11.1million respectively) are not comparable because of revisions in the projectscope and non-availability of unit costs (PCR, paras 3.12). The attempt tocalculate an economic rate of return (estimated at 33% after appraisal andre-estimated at 17% in the PCR) may reflect the desire of IDA staff o followcustomany procedures for project justification although the necessary datawere absent (PPAM, Annex 1, paras A.4, A.6, and A.7). The revised figuregiven in the PCR (para 5.02) cannot be considered to be meaningful in view ofthis lack of data. In the absence of reliable data, no figure should havebeen given either in the Appraisal or in the Project Completion Report.

FijjA gIs and Recommendations

Guinea Bissau depends on external financing for investmer.t andmainternance operations in all sectors, including transport. Tn the roads sub-sector, the first priority is preservation of existing facilities so that thehistorically limited movements of goods and people between urban and ruralareas can continue. Under prevailing conditions, likely to continue irn theforeseeable future, roadworks carried out by force account are bound to yieldindifferent results. However, the upkeep o' the network is essential for thedeveloprnent of sound government and alternative solutions are needed (PPAM,paras 19-23).

IDA should assist th: Ministry of Social Equipment (MSE) to re-think its role withiin the road -'ubsector in terms of actual work to be done(PPAM, para 20, footnote). The intent of the recent restructuring of theSecond Roads Project is to address the deficiencies which became apparentduring implementation of the First Project. Government has demonstrated scep-ticism regarding the use of large teams of consultants. Still, MSE does needadvice and this could be provided by one cospetent expatriate, who would workin a line position with senior staff, but would report directly and exclusive-ly to the Minister. The main fu-nctiorn of the adviser would be to help MSE inrest-ricting its roadworks activities to basic maintenance planning and con-tract admrinistratiorn and supervision, with sperial emphasis on work measure-nent and qluality Con ll r ol. r,e r-.ad mia intenan- e piogramn would be large enough

viii

to permit its execution through an internationally advertised term contract.Suitable clauses and conditions could ensure that the contractor appointedwould subcontract an increasing proportion of the routine maintenance to localfirms, thereby encouraging the development of the local construction industry(PPAM, paras 23-25). IDA, and other aid agencies active in the country,should be aware that their assistance will be necessary for a number of yearsto come to keep the road network in a reasonable state of repair (PPAM, para28).

I

PROJECT PERFORMANCE AUDIT MEMORANDUM

GUINEA BISSAU: FIRST ROADS PROJECT(CREDIT 878-GUB)

I. INTRODUCTION /9

The Country

1. In 1982, the West African country of Guinea Bissau (36,135 squarekm) had a population of about 810,000 /10 inhabitants. The land is flat andits coastline interrupted by seven large estuaries that run far inland. Soilsare mostly alluvial and fertile. The country became independent in 1974 andhas since been governed by the sole political party (PAIGG) which resolved toexpand the public in preference to the private sector. This, plus the Govern-ment's lack of experience, has led to unwise investment decisions and heavyexternal indebtedness. Guinea Bissau continues to be among the poorest coun-tries in the world (the 1982 GDP per capita is estimated at around US$190).

/9 The following Bank Group documents were consulted for the preparationof this section:

First Roads Prolect President's Report (January 16, 1979); Staff Apprai-sal Report (January 10, 1979); Development Credit Agreement (February 9,1979).

Guinea-Bissau: An Introductory Basic Economic Report (May 21, 1982)Volume It Economic Trends and ProspectsVolume II: The SectorsVolume III: Annexes and Statistical Appendix

Bissau Port Proiect President's Report (May 17, 1983); Staff AppraisalReport (May 17, 1983); Development Credit Agreement (July 19, 1983).

Second Roads Prolect President's Report (April 12, 1984); Staff AppraisalReport (April 10, 1984); Development Credit Agreement (June 26, 1984).

Guinea-Bissau: Divisional Country Brief Review(Internal Note, World Bank, April 1986)

Impression& gained from the study of printed material need to be cali-brated with a visit to the country.

/10 Figure given in para 3 of the 1984 President's Report on The Second RoadsProject. Para 3 of the 1979 President's Report on The First Roads Projectgives a figure of 925,000 for 1977.

2

Life expectatcy at birth is 42 years;/11 75% of the population is illiter-ate;/12 watezborne diseases are rampant; and infant mortality reaches 20%.Safe water can be purchased only in the capital, in special stores and forforeign exchange.

2. The most important sector is agriculture and it is subsistence-oriented. It accounts for about 50% of GDP, most of the country's employment,and 60% of its exports. Performance has been poor, primarily because of lackof incentives. An overvalued exchange rate and low producer prices have con-tributed to smuggling of export crops and to the need to import rice, thestaple food, although in the early 1970s, the country was able to feeditself. The fisheries and the forestry sectors have potential, but a disap-pointing record due to poor management. The industrial sector is undevelopedand dominated by some 30 parastatal enterprises, only one of which showed aprofit in 1981.

3. Economic growth has been disappointing. Real GDP grew by about 3%per annum during 1975-1979 and then declined by about 5% in 1980. Agricul-tural output shrank, foreign exchange shortages prevented the importation ofspare parts, and industrial output declined. Prudent macroeconomic managementhas not been one of the Government's strong points/13.

/11 Figure given in previous Bank publications. The April 1986 DivisionalCountry Brief (para 23) gives a figure of 38 years.

/12 Figure given in para 5 of the 1984 Staff Appraisal Report on the SecondRoads Project. If accurate, it represents a tremendous progress: para10 of the 1979 President's Report on the First Roads Project statesthat "illiteracy remains at about 90%". However, the April 1986Divisional Country Brief casts doubts on the accuracy because it states(para 22) that "more than 90 percent of the population is illiterate".

/13 Para 13 of the April 12, 1984 President's Report on the Second RoadsProject reads as follows:

" The current difficult situation of Guinea-Bissau stems in partfrom policies followed after independence. Substantial interna-tional assistance, but inadequate aid management, led to a mush-rooming of projects, many of them ill-conceived, and dispersionand overla'.ping of efforts. Investment financed from abroad washigh (20-25% of GDP), but until 1980 most of it was allocated toinfrastucture, the social sectors, and to over-ambitious indus-trial projects. Poor producer prices in the rural sector contri-buted to a lack of investment and production incentives forfarmers already hurt by the overvalued currency and export te9xes.Consequently, agricultural output was sluggish, with foodstuffsunable to meet domestic demand, and exports insufficient to gerier-ate the foreign exchange needed to meet the demand for importedconsumer goods and inputs to the modern sector. Capital flows,

3

The Transport Sector

4. The transport network comprises 2,300 km of roads, /14 of which485 km are paved, a deep water port and an international airport at Bissau,about 27 small coastal and river ports, and 17 landing strips, of which only10 are in good condition. The extent of the road necwork is adequate butmaintenance is only fair, with a lot of rehabilitation work to be done. Roadtransport has been a subsidiary activity of two public trading companies,which together account for 60% of freight movement on land, and which have hadmajor management and operational problems. Consequently, they have been

although lar-ge, covered only part of the current account deficit,so that foreign reserves declined drastically and net foreignassets have been negative since 1978. Meanwhile, the role ofthe public sector grew well beyond its financing capacity, withthe result that bank credit financed around 50% of budget currentoutlays."

The situation did not improve between 1984 and 1986. On January15, 1986, IDA suspended disbursements on all its projects becausethe Government had not made service payments in the amount ofUS$142,630. At the time of the February 1986 Audit Mission,Government had been unable to pay the January salaries to thecivil service. The April 1986 Divisional Country Brief offers noevidence that fundamental changes in Government policies and pro-cedures are to be implemented in the immediate future.

/14 Figure given in para 21 of the 1984 President's Report on the SecondRoads Pro_ ect. Para 32 of the 1979 President's Report on the FirstRoads Project gives a figure of 3,065 km.

4

providing an inadequate and expensive service which, in turn, 'iihibits thedevelopment of rice, fruit and vegetable production. Transport planning ishampered by lack of qualified staff and by poor coordination among the minis-tries and public bodies concerned./15

IDA Assistance to the Transport Sector

5. As of March 1986, IDA had financed three lending operations. TheFirst Roads Prolect of 1979 (which is the object of this audit); the BissauPort Project of 1983 (Credit 1392-GUB, SDR 14.9 million); and the Second RoadsProject of 1984 (Credit 1473-GUB, US$8.0 million). All three were focussed onrehabilitation works and on institutional reform to assist transport-relatedagencies in doing a more efficient job. Howevert little attention seems tohave been paid on whether the preconditions were satisfied for a successfulintervention by IDA in the transport sector. Specifically, no attempt wasmade to answer a fundamental question: "do transport-related ministries oper-ate as technical agencies or as employment bureaus?" The size of the civilservice and the government's performance in financial and economic management,suggest the latter, If that is the case, justification of individual projectsought to have been based on finding the least-cost solution to the country'sneeds for infrastructural rehabilitation /16. Reliance on customary formulaesuch as economic rates of return calculated in a "fairly innovative aipproach"(PPAM, Annex 1, para A.6) ought to have beer avoided in the past, and shouldbe avoided in the immediate future, because absence of reliable data renderssuspect the result of fairly elaborate calculations (PPAM, para 18).

/15 The Ministry of Social Equipment (MSE) is responsible for transportplanning, through its State Secretariat for Transport and Tourism,and the Secretariat of State for Planning providing coordination.Within MSE, the Directorate of Land Transport (DTT) is responsiblefor sub-sector administration.

MSE has about 2,000 employees but little working equipment. A ProjectUnit was createe under the First Roads Prolect but, under the SecondRoads Prolect th4 unit has been merged with the Ministry's Road's andBridges Direc.orate. Management of the First Roads Project wasentrusted to the Directorate General for Administrative, Technicaland Financial Affairs (DGAT).

In the interests of efficiency, IDA and the Government agreed, in thecourse of negotiations for the Second Roads Project, to reduce thescope of the Directorate General. A new organization chart has sincebeen drafted for MSE (Second Roads Project Supervision Report datedMarch 13, 1986) but the Directorate General continues to control theonly thing that matters: flow of funds.

/16 This was correctly suggested in the November 1977 Draft Project Briefon the First Roads Project but the suggestion was not followed up(PPAM, Annex 1, para A.4).

5

I. THE FIRST ROADS PROJECT

Proiect Preparation

6. The project was identified in 1977, appraised in July 1978 andapproved in January 1979.

Project Objectives

7. These are given in para 3.01 of the SAR and can be summarized asfollows:

(a) Protect the existing paved road network from further deterio-ration;

(b) Provide an adequate link to the southern part of the country, pre-sently suffering from very poor communications;

(c) Provide basic road infrastructure to support on-going agriculturalinvestment in the north; and

(d) Introduce regular routine and periodic maintenance operationslater to be adopted on the entire road network of the country.

When IDA's view of its role in the country's transpor,i- sector is taken intoaccount /17, these are reasonable and modest targets. The p..'iect was to be afirst step in a continuous effort by IDA to provide func. and technicalassistance over a series of similar operations. What was not taken intoaccount was the extremely low level from which this process would have to com-mence. It was assumed that the basic machinery of public administration (linesof responsibility; proper communication among the various branches of govern-ment; informing those charged with works execution concerning availability offunds; adequate control of expenditures) would either be in place, or wouldevolve during the course of the project. The assumption was not correct at thetime of the 1978 appraisal and not much progress has been made since.

/17 Para 1.21 of the SAR reads, in part, as follows: "IDA is primarilysupporting the rural sector: road rehabilitation is vital foragricultural development, providing the link between major producingareas and Bissau, the capital..."

6

8. The first objective (i.e., to protect the existing paved road net-work from further deterioration) was a correct minimum aim: that these roadswhich had been paved should remain paved./18 Although very low trafficfigures would have made the initial paving difficult to justify on economicgrounds, once roads had been paved, it was sensible to retain the paving ingood condition, if only because there would have been extra costs in lettingthese sections revert to gravel standards. The first objective was achieved inpart (139 km rehabilitated vs. 226 km planned, or about 62%), although morework was required than originally estimated, due to delays in starting up andconsequent further deterioration.

9. The second and third objectives (i.e., to provide links to thesouthern part of the country, and to develop a basic road infrastructure tosupport agricultural growth in the north) show dubious accomplishments. Paras6.06-6.09 of the May 1983 SAR on the Bissau Port Project argue that port in-vestments are partly justified on the grounds that movement of rice by water

from the southern growing area is economically preferable to movement byroad. The Audit Mission travelled on a number of gravel roads built under theFirst Roads Project and noted the modest traffic volumes as well as the lackof any significant agricultural development. Nevertheless, road development ofthe kind done under the project did provide the minimal network required forgovernment administration and could, therefore, be justifiable on thesegrounds. Significant developmental impact from such roads would be likely onlyin conjunction with integrated rural development projects.

10. The last oblective (i.e., to introduce regular routine and perio-dic maintenance operations for subsequent adoption over the entire network)did reflect a genuine need but produced very limited results in the course ofthe project. Without continuing foreign assistance, it is unlikely that anysignificant road maintenance program will be carried out on any part of thehighway network. Although the project did contribute in supplying some essen-tials (such as equipment, workshops and better trained staff) the administra-tive superstructure which would allow them to operate effectively is not yetin place.

Project Implementation

11. As appraised, the project consisted of a three-year road rehabi-litation and maintenance program. It had the following five components (SAR,

para 3.02):

(a) Establishment of a rehabilitation and maintenance brigade forthe existing paved roads;

/18 Para 32 of the President's Report on the First Roads Project reads,in part, as follows: "The high percentage (17%) of paved roads.. .isa consequence of the armed struggle, when the provincial mi'litaryadministration paved some sections mainly as a deterrent against plant-

ing land mines...

7

(b) Two road rehabilitation and maintenance brigades for graveland earth roads in the Buba-Tombali (south) and Gabu/Bafata(north) regions, and improved transhipmert facilities in thesouth at Enxude, Bedanda and Cacine;

(c) Workshop, administrative and commtunications facilities forthe brigades, by constructing and equipping of regional work-shops in Buba and Bafata, improvements to the headquartersworkshop in Bissau, provision of radio communications equip-ment and a limited program of equipment rehabilitation;

(d) A portable axle-weighing device and a light vehicle to carryit, to start a national program of axle-load control; and

(e) Technical assistance to MSE in execution of the project andfor training of MSE staff.

Project implementation is summarized as follows:

Roadworks

12. The achievements of the one bitumen brigade and the two lateriticbrigades are correctly described in paras 3.03-3.08 of the PCR. The pavedroads treated under the project are still fully operational and in a reason-able state of repair, with evidence that routine repair of potholes has beendone from time to time, although the shoulders are in need of attention inplaces and there is severe pavement deformation between Bissau and Salim.Those project gravel roads that were seen by the Audit Mission still havegravel cover and are in fair condition, with some regravelling planned.Maintenance of those roads improved under the First Project is being doneunder the Second Project, since there are no other funds for the pur'ose. Itis unfortunate that lack of sand for sealing (PCR, para 3.05) was not dis-covered at appraisal, as a sand seal would have been a suitable type of treat-ment for roads carrying so little traffic. The lateritic nodules used asaggregate appear to be performing well and the crushing and screening equip-ment set up near Nachra continues to stockpile this material, although at thetime of the Audit Mission, it was out of action awaiting spares.

13. Data to estimate the availability of project equipment was notavailable to the Audit Mission but there is no reason to disagree with thecomment in para 3.02 of the PCR that most of it is now out of action and be-yond repair. Overall availability of equipment and vehicles is judged to below due to the problems associated with obtaining spares and sometimes to un-suitable design. In the case of vehicles, only about 20 per cent were esti-mated to be in running order in early 1986. The main workshops adjoining MSEheadquarters now have reasonable premises and facilities, but all operationsare restricted by lack of spares and by the small number of fully trained andexperienced staff. It was reported to the Audit Mission that the regionalworkshops at Buba and Bafata are still uncompleted. The transshipment facili-ties provided under the project could not be visited in the time available.

8

Axle-load Control

14. The axle weighing equipment provided under the project has not sofar been used, but the Audit Mission was informed that a suitable vehicle isbeing obtained under the Second Project. The thin bituminous surfaces overcompacted unstabilised laterite bases, commonly used in Guinea Bissau, areparticularly susceptible to damage by overweight trucks, but the Audit Missionsaw no cases of gross overloading on the roads travelled. Regular trafficcounts are not carried out, but the Audit Mission estimated mid-February 1986traffic on the Bissau-Salim road to be about 250 vpd, dropping to 150-200 vpdbeyond Salim, and to 100 vpd or less to the east of Bafata.

Technical Assistance and Training

15. Paras 3.09-3.11 of the PCR summarize the considerable difficultiesencountered by the technical assistance staff. The team was in position earlyin the project but they found themselves in an extremely adverse situationwith poor accommodation, continual shortages of most essentials for theirwork, and all the disruptions following the coup of November 1980. Althoughit was a condition of the Credit Agreement that government would provide hous-ing for the consultants' staff, both IDA and the consulting firm, who are wellexperienced in assignments of this nature, should have satisfied themselvesbefore the team arrived in Bissau that reasonable accommodation existed andhad been allocated for he team's exclusive use, and that the other minimalfacilities required fc operation of the team could be provided. The earlyestablishment by IDA o a revolving fund in foreign currency outside GuineaBissau (administered . he consultants and for which they would have beenaccounitable) might have a 4ded some of the problems encountered.

16. In spite of their difficulties, and quite apart from their super-vision of road rehabilitation and maintenance operations, the consultants havebeen able to leave some evidence of the work they did, primarily in terms ofencouraging recruitment of technical personnel. There are now about twentygraduate engineers in MSE (compared to a single one before the project) al-though not all of them were trained as a result of the First Project. Amodest number of middle level and technical staff are now available in theMinistry, whereas there were virtually none before. The main workshops inBissau would probably be able to function as a result of the organization setup during the project if the necessary funds and the administration were inplace elsewhere in government. Nevertheless, and on balance, the visibleresults do not seem to represent a reasonable return for the expenditure ofsome US$2.4 million allocated to technical assistance and training.

Costs, Disbursements and Procurement

17. PCR paras 3.12-3.13 discuss estimated and actual project costs(US$10.1 million and US$11.6 million respectively) but noce that the two sumsare not comparable because of revisions in the project scope and non availabi-lity of unit costs. Disbursements were consistently slow and the credit was

9

fully disbursed with a 21 month delay (PCR, para 3.14). Government procedurescreated major problems for the procurement of sp1re parts and supplies (PCR,paras 3.02, 3.15, 3.16 and 6.02).

Economic Rate of Return

18. At appraisal, the project's overall rate of economic return wasestimated to be about 33%, although at earlier stages of project preparationthe statement was made that lack of data precluded any sensible calculations(PPAM, Annex 1, para 4). The PCR (para 5.02 and Table 1) claims that the re-estimated economic rate of return would be about 17% and would result fromdeferred maintenance and savings in vehicle operating costs. The absence ofregular traffic counts renders debatable the assumptions on vehicle operatingcost savings shown in PCR Table 1. Lacking reliable data, the audit could notcalculate an alternative rate of return and believes that none should beshown.

III. FINDINGS AND RECOMMENDATIONS

19. The First Road Prolect proposed a strategy which was reasonablefor the development of a highway sector. However, circumstances in the coun-try did not (at the time of appraisal), and do not (in 1986) call so much fordevelopmental as for survival strategies. In the case of roads, this meanspreservation of existing facilities so that the historically limited movementsof goods and people between rural and urban areas can continue and, perhaps,grow modestly over time. Such preservation is normally carried out, on theone hand by the allocation of financial resources for the procurement (domes-tically or internationally) of necessary goods and services and, on the other,by the cultivation of a domestic capacity for better planning, execution andmaintenance of works.

20. "Institution-building" is the cultivation of this domestic capa-city. But the Government seems to have been more interested in expansion ofnumbers than in increasing the efficiency of staff already employed. Lackingthe means to earn sufficient foreign exchange, and with resources too small toallow internal development, the country has acquired a large and unproductivecivil service which it cannot afford. It is true that public sector employ-ment does provide a means to distribute some income among the population butthis is not necessarily the best means. Reducing the number of governmentemployees will be difficult. But, at the same time, government finds it dif-ficult in early 1986 to pay salaries on time. Hence, foreign assistance seemsto be indispensable to keep things even as they are. The major uncertainty isfor how long will aid agencies continue to subsidize a recurrent budget

10

excessively burdened with salary and wage items /19. In these circumstances,it seema that alternative formulas ought to be found so as to keep the presentroad system in a reasonable state of repair. The necessity for this is under-scored by an overview of expenditures and accomplishments under the FirstRoads Prolect.

21. Thz real cost of the work accomplished under the Project can beestimated only approximately but it may be argued that the spending of US$11.6million resulted in the following:

(a) rehabilitation and sealing of 139 km of paved roads;

(b) rehabilitation and gravelling of 302 km of unpaved roads;

(c) provision of some equipment, most of which was beyond repairby the end of the project;

(d) provision of workshops and buildings;

(e) wages, salaries, fuel, materials and supplies;

(f) technical assistance; and

(g) some transshipment facilities.

22. The proportion of total project cost represented by the projectcomponents and their residual values appear to be as follows:/20

/19 "Unsatisfactory management" of the Second Roads Prolect has inspireda reorganization of the roads branch of the MSE (Supervision Report,dated March 13, 1986). The exercise is theoretically aimed at staffreductions but does not seem to enjoy support in higher echelons ofthe Ministry. Much of the new organization is on paper only, it hasnot been sanctioned by law, and it has no funds to do anything exceptwork funded by the Second Roads Project.

Outside the proposed restructuring, responsibilities and duties inhigher MSE management a:e obscure and subject to abrupt changes. Evenif the new organizational chart were fully operational, the necessaryhigher management is not readily available.

/2U Source: SAR (Annex 1) and Audit Mission estimates.

11

% of % of Component % of ProjectComponent ProJect Cost Residual Value Residual Value

Highway Equipmentand spare parts 39% 5Z /21 2.0

Workshop Equipment 1% 50% 0.5Workshops and Buildings 3% 80% 2.4Spare parts 1% 0% 0.0Wages and Salaries 9% 0% 0.0Fuel, materials, etc. 22% 0% 0.0Technical assistance 23X 25% /22 5.7

Hence, the balance represents the estimated cost of the roadworks completedduring the project, i.e., about 90% of the project costs of US$11.6, or sayUS$10.4 million. This amounts to about US$23,500 per km of road rehabilitated(paved and unpaved), or about US$4 per square meter of roadway. For the typeof work undertaken (repair and reseal or regravel), this is a very high unitcost, particularly when it is realized that to repeat the operation, resourceson the same scale would have to be supplied again. The Region has recentlyrecorded cost/km under the Second Roads Project of $3,500 for unpaved and$17,000 for paved roads.

23. In Guinea Bissau, under conditions prevailing at present andlikely to continue in the foreseeable future, institution-building efforts tocreate the familiar form of a roads authority have no chance of success. Road-works carried out by force account will yield indifferent results and theprospects for improvement are poor. However, the upkeep of the existing roadsnetwork is essential if provision of government services and a modicum' ofdomestic trade is to continue. One formula for ensuring this may be the fol-lowing:

(a) Provide one comp,tent adviser to MSE to work with senior staff,but reporting directly and exclusively to the Minister;

(b) Restrict MSE activities in roadworks to basic maintenance planningand contract administration with the assistance of the Minister'sadviser. Main emphasis ought to be given to the development ofprocedures for work measurement and quality control; and

/21 PCR estimate.

/22 Estimated residual value of training.

12

(c) Carry out a planned program of routine and periodic road main-tenance by means of internationally advertised term contracts/23.Suitable contractual arrangement would ensure that che contractorappointed would subcontract a proportion of the routine mainte-nance work to local firms, thereby contributing to the developmentof a domestic construction industry.

24. The functions required of MSE could, and should, be done by asmall cadre of staff with clearly defined duties and suitable staff areprotably to be found now in the ministry. The contractor appointed would beentirely responsible for carrying out the work, including provision, mainte-nance, and operation of equipment. Suitable allocations of foreign exchange,pl.s a simplification of import -rocedures, would be necessary to make thispossible.

25. The suggested approach implies that many of the present MSE staffwould become completely redundant, with consequent problems. On the otherhand, the contractor would be able to employ a number of tile present MSE roadand workshop staff and by using term contracts over a number of years (subjectto satisfactory performance), reasonable continuity of employment to produc-tive labor could be achieved.

26. If MSE were forced to _arry surplus labor in addition, this wouldbe no more than it already does, and is the penalty of having an excessivelylarge civil service. There is no doubt that costs of contract T.iaintenancewould initially be high but probably no higher thar the cost of the work doneunder the First Road Project. TDA ought to continue assisting the Governmentinadopting more efficient procedures for contract administration, along thelines already followed in the Second Roads Project /24. If operations of thefirst contractor to be entrusted with network-wide maintenance were facili-tated, subsequent contracts would attract a lower "risk factor" in bidding andwould thus be less expensive.

/23 The audit notes that an important step has already been taken in thisdirection. In the course of the January 1986 supervision mission forthe Second Roads Prolect, ICA and the Government agreed that allproject-financed resurfacing and rehabilitation works on paved roadswould be done by private contractors following an internationalcompetitive bidding process (Supervision Report, dated March 13,1986). IDA ought to extend all possible assistance so that theGovernment, which has demonstrated its willingness to reduce forceaccount operations, be further encouraged to pursue cost-effectivesolutions for the maintenance of the entire road network.

/24 Specifically, with provisions such as the one embodied in the CreditAgreement which envisages that the Government's contribution to the pro-Ject ought to be paid Into a specia1 account with the National Bank ofGuinea Bissau.

13

27. Provided that suitable guarantees and conditions were offered, thevalue of the work to be done for the network to be maintained at a correctlevel would be sufficient to interest international contractots. The develop-ment of local contractors is one of the objectives of the Second RoadsProject, which provides for the financing of a study to identify the specificmeasures to be taken. One of the major requirements for the growth of anyconstruction industry is continuity of work. If continuous work in road main-tenance operations .s assured over a period of say ten years, the few smallcontractors who now exist in Guinea-Bisse.u stand to benefit considerably fromtheir collaboration with an international contractor.

28. IDA, and all other aid agencies active in the country, should beaware that external financing, close control, and effective coordination amongdonors will be necessary to keep the road network in reasonable repair. Thiswill very likely remain the situation until the local administration is ableto carry out the basic functions of government reliably, and has the requiredresources to eo so, probably as a result of administrative reform and agricul-tural development over several decades.

I/ /-I,I" / /1/

ANNEX 1

PROJECT PERFORMANCE AUDIT MEMORANDUM

GUINEA BISSAU: FIRST ROADS PROJECT(CREDIT 878-GUB)

ABSTRACT OF KEY DOCUMENTS IN THE PROJECT FILE

A.1 The First Roads Pro1ect was the first lending operation by IDA toa poor country handiceiped by the absence of even a rudimentary administrativemachinery. The idea was to prepare a fast-disbursing project whose successwould strengt1len IDA credibility with the Government, thereby paving the wayfor a closer, development-oriented collaboration. There were two major prob-lems. First, the Government's inexperience in public administration. Second,the Government's commitment to the expansion of the public sector. This pro-duced a delicate state of affairs for IDA which was aware that the beneficia-r4es of its assistance should be the inhabitants and not the civil service ofany given country. IDA was equally aware that, in order to reach t'%e benefi-ciaries, it had to work through the civil service. The instruments for thiswould be technical assistance staff who, in time, would help steer policies inthe right direction. Consequently, the success of the project would, to alarge extent, depend upon the performance of consultants.

A.2 In late 1977, when the project began to be prepared, the evidencesuggested that Guinea-Bissau was at the earliest stage of development andwould therefore need patient help before it fou.A itself on the way to finan-cial and administrative health. Thus, familiar formulae for project justifi-cation, such as calculations of economic rates of return, would be inappli-cable. First, because there were no data. Second, because IDA and theGovernment engaged in a dialogue but did not really communicate: IDA thoughtof long-term efficiency and the Government thought of day-to-day welfare.

A.3 The President's Report, the Staff Appraisal Report, and theProject Completion Report of the First Roads Prolect all reflect the precedingconsiderations but in prose sometimes convoluted to the point of inscrutabili-ty. The following pages summarize key documents in the project file whichprovide a much clearer picture of the phases that the project went through.

Proiect Preparation

A.4 The Draft Proiect Brief (November 3, 1977) is a straightforwarddocument:

16

"The Bank Group's short-term operational goals in Guinea Bissaucall for a quickly-prepared project: fast-disbursing in ahigh-priority field. Road rehabilitation and maintenance has beenselected, since it matches the Government's priority for ruraldevelopment, and is necessary for recovery in agriculture" (para2).

Far more significant is the following statement (para 11) whose substance wasquickly forgotten:

"With low traffic volumes and no statistics on agricultural sur-plus or potential, an economic justification of a project accord-ing to IDA's customary criteria may be impossible. The justifica-tion depends, therefore, on finding a least-cost solution to thecountry's evident need for road rehabilitation, the requirementsto assure effective highway maintenance so that poor road trans-port does not hamper the Government's rural development objec-tives, and IDA's desire to establish a good working relationshipwith the Government as a basis for future operations inGuinea-Bissau."

A.5 The Back-to-Office Report of the Identification Mission (December15, 1977) proposed two objectives: (a) to improve land transport and (b) totrain Guinean technicians and mechanics by execution of works in the field(para 4). she report noted that Government had still not decided on therelative importance of road transport vs. coastal shipping; that the countryhas only one road engineer; and that the general lack of equipment heightensthe risk that machines to be provided under the project might be diverted toother uses (para 6). However, professional optimism prevailed:

"The zest and enthusiasm implicit in all Government activity, thedesire and experience at mobilizing people to perform a task, andthe ability to think conceptually /25 (when pressed) and in termsof plans and strategy, will contribute to a good project in GuineaBissau" (para 7).

/25 The lntriguing suggestion that thinking is possible in non-conceptualterms is unfortunately left unexplored.

17

The above notwithstanding, Annex 2 of the Report (The Transport Sector) raisessome disturbing issues:

"There were modest rice exports annually in the 1950s" (para 2).

"Rice imports have ranged between 14,000-30,000 tons per yearsince 1970" (para 3).

"Government policy is to increase State control over the means oftransport" (para 5).

Two State enterprises dominate the transport sector but no costaccounts are kept and it is estimated that they operated theirtrucks at less than 20% of capacity (paras 17-18).

There are too many ministries interested in transport and at leasttwo more want to set up units to study transport costs but no one,except the planning agency, has any economist., or planners (para21).

"Public expenditure greatly exceeds revenues" (para 24).

A.6 Even so, the signs were disregarded. An internal Bank Note(December 20, 1977), summarizing the discussion of the IdentificationMission's Back-to-Office Report demonstrates how economic justification may becarried out without the benefit of data. Para 3 of this Note reads asfollows:

"The absence of traffic counts and other data may require a fairlyinnovative approach to the economic justification. It was agreedthat some agricultural production data did exist, and that thisdata should be analysed in the framework of a rural road methodol-ogy, with approximations as appropriate, since this road projectwould essentially develop farm-to-market access. The meeting didnot consider it useful to ask Government for any data preparation%t present, given their severe manpower constraints. Referencewas made to the apparent existence of aerial survey photographs,which might prove useful in developing agricultural productionestimates."

A.7 The Project Brief (February 3, 1978) is a bland document. Withtwo exceptions. First, the statement made in para 2:

"The country depends heavily on foreign grants and otherconcessional aid, and the Government budget is deeply in deficit."

18

Second, para 15, which offers additional exorcisms for project justification:

"The provision of simple road infrastructure and training to meetthe basia transport needs of a high-priority rural area has arather obvious justification, even with little existing traffic.To quantify the economic justification of the proposed project,the preparation mission will examine the possible incremental riceoutput in the South, and the necessary policies, conditions andcomplementary investments for such a potential surplus to materia-lize. But it is not expected that sufficient data will be availa-ble to provide a rigorous analysis of incremental agriculturalbenefits that could be attributed to the road project. The insti-tution building, training and technicAl assistance features of theproject will lead to considerable non-quantifiable benefits toGuinea-Bissau, and will have a national impact."

A.8 The Back-to-Office Report of the Preappraisal Mission (April 6,1978) summarizes the activities of an unusually large team (8 persons) whichproposed (para 2) a three-year road program consisting of eight project compo-nents, with an estimated total cost of US$9.6 million equivalent, and a for-eign component of US$8.6 million equivalent. The mission concluded that

"the improvement to engineered gravel standard of existing tracksin the south is justified by vehicle operating cost savings forpresent traffic, estimated at 25 vehicles per day" (para 6) andthat

"feeder and network road improvement in the north-east is justi-fied by the support it provides to on-going agricultural develop-ment projects in the main cash crop producing areas" (para 7).

The mission recommended (para 10) that the project be executed byforce account on the grounds that the proposed works would beunsuitable for international contractors, that there are no domes-tic contractors, and that "it is not a Government priority toencourage their development".

The fact that the Mission did not challenge the Government's position on thelast point reveals how much IDA valued the cultivation of amicable relationswith the Government: since 1976, the Bank had been making extensive effortsworldwide to encourage the development of local contractors on the grounds ofefficiency and economy.

A.9 Project appraisal took place in June/July 1978 and the IssuesPaper (July 19, 1978) contains (para 5) a visually impressive exposition ofeconomic rate of return calculation results (412 for the project as a

19

economic rate of return calculation results (41% for the project as awhole)/26 and ranging from 100% to 17% for individual prtject components).The Paper noted (para 8) that housing for the consultants might generateproblems and recommended that the Government's making arrangements satisfac-tory to IDA for consultant's housing be a condition for Credit negotiations.The Decision Memorandum (August 8, 1978) endorsed the findings and recommenda-tions in the Issues Paper. Negotiations were completed in December 1978 andthe Credit was approved in January 1979.

A.10 Underneath the obligatory euphemisms, the President's Report(January 16, 1979) and the Staff Appraisal Report (January 10, 1979), reveal,as shown in the following excerpts from the President's Report, the precariousstate of the country's economy as well as the potential difficulties that theproject might run into.

"1977 per capita GDP is roughly estimated at US$160 for apopulation estimated at 925,000" (para 3).

"Export of goods and non-factor services covered only one-fourthof the import bill over the past three years, and the monetizedsector of the economy has essentially relied on foreign aid tofinance its demand for consumer goods and capital equipment. Des-pite very heavy levels of aid inflows, net reserves have falleneach year since independence to their currently negative position"(para 4).

"The tertiary sector is dominated by the civil service, with some15,000 public employees" (para 9).

"Illiteracy remains at about 90x" (para 10).

"Economic policy-making has so far addressed problems on an ad hocbasis...The Central Bank has consciously retained an overvaluedcurrency since independence. This policy favors urban dwellers bymaking consumer goods cheaper..." (para 12).

"Government will continue to depend, for the time being, on bal-ance of payments support or program aid to finance the desiredlevel of consumption for the modern sector" (para 13).

"Public finaace trends show rising budget deficits...Currentbudget expenditures are relatively high (30% of GDP) and areconcentrated on wages (over 70%), with little remaining for mater-ials...Defense receives 20% of current expenditure.. .The currentdeficit has been financed by borrowing from the central bank andsome external borrowing...The size of the civil service, at 15,000employees. exclusive of the military, is a serious medium-term

/26 Somehow, this was reduced to 33% in the SAR but the record contains noexposition of the methodological, refinements involved.

20

problem since the level of resources available from the primarysector is not nearly sufficient to maintain the public payroll"(para 18).

"Guinea-Bissau's long-term prospects hinge upon the development ofagriculture and the possible exploitation of bauxite...studies forthe exploitation of bauxite reserves are still in the initialstage, and there has been little interest expressed so far by in-ternational mining companies. The deposits are located 150-200 kmfrom the sea, and total project costs, including infrastructure,would approach US$1 billion" (para 17).

"The three executing ministries in the transport sector exerciseconsiderable independence...There is little coordination betweenthese ministries at the working level" (para 27).

"The high percentage (17x) of paved roads in Guinea-Bissau's 3,065km road network is a consequence of the armed struggle, when theprovincial military administration paved some sections mainly as adeterrent against planting land mines...No overall road plan yetexists" (para 32).

"The country has no complete accounting of road expenditures"(para 34).

For project execution and "owing to the lack of experiencedGuinean staff, the technical assistance team would initially takeup line functions" (para 38).

Proiect Execution

A.11 The April 4, 1979 Supervision Mission Report states thpc a goodstart has been made, that the consultant's morale is good and tha. chere isgood collaboration between the team and the Guinean engineer counterpart tothe team leader.

A.12 The July 11, 1979 Supervision Mission Report states that "theconsultants' housing situation is unsatisfactory and the atmosphere of pragma-tic informality that characterized the Government's dealings with Bank mis-sions, has been replaced by a more formal and bureaucratic attitude towardsthe consultants. Otherwise, things are going well". /27

/27 This erncourai-ing conclusion is flatly contradicted in Annex IV whosepara 5 discusses consultants' housing and states that "the housingsituation is most unsatisfactory and the Government's good faitn in thismatter must be questioned". The following statement creates furtherdoubts ea to how well things are really going: "During the mission'sstay, there was neither water nor electricity for three days, the dietis monotonous and very basic, and such things as soap, toilet paper andbeer are harder to come by than during appraisal a year ago".

21

A.13 In December 1979, the country's financial situation had becomegrim enough to warrant a US$1.0 million EEC Special Action Credit whichincreased external financing to 99X of total costs of The First RoadsProlect. The Decomber 13, 1979 proposal to the Board states that projectimplementation is 'proceeding satisfactorily" which, given the problems withthe consultants and the fact that work had not started, raises questions as towhat meaning one should attach to "unsatisfactory progress". Interestinglyenough, the proposal put forward the following partial justification forallocating Special Action Funds to Guinea-Bissau:

"...In 1978, as a result of the Sahelian drought, there was aserious decline in exports, while imports of foodstuffs wereincreased to compensate for the decline of domestic production..."

No previous document in the file had blamed the Sahelian drought for decreas-ing agricultural production.

A,14 The May 30, 1980 Supervision Report concedes that progress is notas satisfactory as might have been hoped.

"A flare-up over a trivial matter has led to the dismissal of theconsultant's project manager and administrator. The tension on theconsultants' side must be due in part to unsatisfactory livingconditions which, after 17 months, the government's lack of com-mitment must surely have contributed ...Nevertheless, work willstart in mid-May, only four months behind schedule.."

"The Government's performance over consultants housing, provisionof counterparts, decision making and delegation of authority tothe consultants has been poor."

"The quarterly reports for December 1979 and March 1980 were beingtyped in Dakar, as no secretary is available locally who can typeacceptably in French."

A.15 In November 1980, a coup prcduced disruptions. A January 22,1981, Note to Files states that "there have already been serious shortages ofrice and diesel fuel and this may get worse before it gets better." Theforecast was for "deteriorating living conditions and a difficult time aheadfor the project."

A.16 The March 30, 1981 Supervision Report notes the following:

"There was a hiatus in public adminis,;ration and a severe foreignexchange situation which brought the project to a halt followingthe coup, mainly due to a break in diesel fuel supplies."

"To date, expenditures made or committed amount to $6.6 millionout of an expected project cost of $10.1 million for a totalproduction of only 6 km of resurfaced bitumen road, 30 km of

22

reconditioned shoulders, and 21 km of laterite road...money hasbeen eaten up without production during the procurement and start-up phases and it is now evident that funds reserved for estab-lishment of the third brigade will have to be used for operationof the two existing brigades until June 1983. A number of factorshave contributed to this situation viz: (a) the slow start-upduring which salaries were paid but no output produced; (b) costof workshops and houses which were built from scratch rather thanreconditioned; (c) fuel supply difficulties at the national level;(d) a large increase in the number of employees of the projectabove that agreed with the government at appraisal; and (e) salaryincreases of 17%-25% announced immediately after the coup ofNovember 1980."

"Reports are being prepared by the consultant and are being sentto Dakar for typing. However, they are not being forwarded by theministry because it dots r.ct always agree with their contents...Noreports have ever arrived officially..."

A.17 The August 3, 1981 Supervision Report states that the project hadhad a reasonably uninterrupted run over a four month period. The missionidentified a Second Roads Project intended to start in September 1983 and toinclude the rehabilitation of a further 500 km of roads plus general roadmaintenance operations to be carried out by the brigades established under theFirst Project.

A.18 Between August 1981 and September 1982, project execution went on,albeit with difficulties regarding procurement and disbursements, (Annex 3,paras 5-8 and Section 6(B) respectively of the August 3, 1981 SupervisionReport). The bitumen brigade was diverted to road repairs in the capital./28Preparation of the Second Roads Project went on although "the economicanalysis will need to be redone using up-to-date traffic counts" (Annex 5,

/28 Para 5 of Annex 4 of the November 12, 1982 Supervision Report reads, inpart, as follows:

"The town streets are a disgrace, impede movement about town and give avery poor impression to visitors. The city has no equipment,insufficient budget to do its own maintenance, and little chance ofobtaining finance for a re-seal or hot mix program that is clearlyneeded. Therefore, when the President ordered the Minister of PublicWorks to put the project's bitumen brigade at the disposal of the citycouncil, he was obliged to comply..."

This had been anticipated as far back as December 1977 (para A.5,above). It is not clear from the PCR how this diversion affected therecalculated economic rate of return of the project although the PCRdoes assert that street repairs In Bissau "had a positive effect on theeconomy" (PCR, para 3.06).

23

para 3, November 12, 1982 Supervision Report) and the Government had still not"pronounced" on ferry services. /29

A.19 The July 21, 1984 Supervision Report notes that the project hasbeen completed and summarizes the results as follows:

"Output of finished roads is satisfactory but there are some tech-nical difficulties in preparing the aggregates for the bitumenbrigade. A total of 516 km of roads have been rehabilitated...Butthe maintenance of the equipment is still insufficient. The twoworkshops in Buba and Bufata have not been created, and the orga-nization of the workshop in Bissau is deficient and needs to becompletely reorganized under the Second Project. Axle load con-trol was not enforced during this project as initially planned..."(Section 6).

A.20 The Project Completion Report was received in OED on November 11,1985 and an audit mission was scheduled to visit Guinea Bissau in February1986. On January 15, 1986 IDA suspended disbursements on all outstanding cre-dits to Guinea Bissau because, as of January 14, it had not received servicepayments in the amount of US$142,630, a portion of which had been overdue bymore than 75 days. All outstanding payments were received on March 10, 1986and IDA lifted the suspension of disbursements on March 13, 1986.

/29 This continued to be an open question sInce the Identification of theFirst Project (para A.5, above).

I I /

25

GUINEA-BISSAU

FIRST "ADS PROJECT, CR. 878-GUB

PROJECT COMPLETION REPORT

I INTRODUCTION

1.01 Guinea-Bissau with an area of 36,125 km2 is bordered by Senegaland the Republic of Guinea. An important feature of the country is thedeep penetration uf seven estuary complexes. All of these rivers are tidaland provide navigable waterways to much of the country excert the north-east. The Government's main priority is the stimulation of agriculture,Guinea-Bissau's principal economic activity and source of most of the coun-try's foreign exchange earnings.

1.02 The country was ruled by the Portuguese right down to the levelsof clerks and mechanics. Guinea Bissau became an independent nation in1975 after 11 years of civil war. At the time of appraisal, the country'sinternal transport consisted of a road network dating from the colonialtimes, a system of water-borne transportation with many small river ports,an international airport and numerous landing strips, seven of which werepaved. The scarcity of skilled people, absence of set guidelines and pro-cedures and the organizational problems made the transport system a seriousbottleneck to the country's economic development.

1.03 The Ministry of Public Works, Construction and Housing (laterbecame Ministry of Social Equipment (MSE)) is responsible for road cons-truction and maintenance. The Ministry of Transport and Tourism (MTT) isresponsible for ports, coastal shipping, aviation and road transport, bothdirectly and through reporting agencies. In practice, this ministry exer-cises considerable influence in sector planning. At the time of projectpreparat'on, transport sector insticutions were undeveloped and capacity torehabilitate and maintain the existing roads did not exist.

1.04 The road network comprised 3,065 km, of which 520 km (17%) werepaved. The network density, 0.084 hm/km 2 was similar to that of other WestAfrican countries. Taken along with 'nland and coastal waterways, its ex-tent was considered to be largely adequate, but its poor condition was con-sidered to limit its effective role in the country's economy.

1.05 This report is based on the information collected by the finalsupervision/completion mission in December 1984; information available inthe Bank files; final project report prepared in June 1984 by the consul-tants hired under the project's technical assistance component; and dis-cussions wit1 - concerned Ba-k staff.

26

II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL

2.01 The project was identified in December 1977 and prepared by IDAand its consultants with the Government's cooperation. The project wasappraised in July 1978.

2.02 IDA's overall objective in the transport sector was to assist theGovernment in restoring basic road incrastructure in all regions of thecountry, thus supporting rural development, and imp-oving public works andtrensport alministration and services. The first road project was intendedto promote this objective by establishing, in the then Ministry of PublicWorks, the capacity to rehabilitate and maintain the road network and atthe same time to preserve the extensive investment in paved roads, providebasic road infrastructure in the South, and to permit evacuation of cropsfrom the North and to restore an important export crop (groundnuts), thevolume of which had dwindled to nothing during the civil war.

2.03 Negotiations were completed in December 1978 and the credit wasapproved in January 1979. The credit was declared effective on June 1,1979. Special Action Credit (EEC-44GUB) was incorporated in April 1980 andbe-ame effective in July 1980. IDA's credit of UTS$9.0 million covered88.7% of total project cost while EEC (US$1.0 million) and the Governmentfinanced the balance (US$1.6 million).

2.04 The project consisted of:

(a) Patching, resealing and maintenance of 226 km of asphaltroads; 1/

(b) Rehabilitation and maintenance of 388 km of gravelroads;1/

(c) Purchase of highway maintenance equipment and spare partsfor new and existing equipment, materials and supplies forcivil works, workshop equipment, tools and three tranship-ment facilities in the South;

(d) Purchase of a portable axle-weighing device to initiate anational program of axle-load control; and

(e) Provision of technical assistance (252 man-months) toassist with project execution, training for Guinean staffand strengthening of the planning and operating capacity ofMSE.

1/ See Table 2 for information on estimated and actual completion ofroads.

27

III. PROJECT IMPLEMENTATION

3.01 The project was expected to take three years beginning late 1979,but completion was delayed by about two years. When the credit was fullydisbursed in December 1984, about 78% of the revised project road works hadbeen achieved.

3.02 The provision of adequate housing for consultants proved unrea-sonably difficult (paras. 3.10 and 3.11) and-the procurement of equipment(para. 3.16) proved to be more time consuming than expected at appraisalwhich were responsible for delayed operation of road maintenance brigadesby about 12 months. By November 1980, the brigades were operational, butthe coup d'etat in the same month brought the project works to a standstillfor a month due to serious shortage of fuel. The nationwide fuel shortageswere frequent before and after the coup. Due to severe foreign exchangeshortage in the country, the Government had instituted a cumbersome andvery time-consuming process of disbursing funds in foreign currencies.This process caused serious problems in disbursement of project fundsduring the entire period of project implementation. By the time the creditwas fully disbursed, about 441 km of roads had been completed. Thisaccounts for 72% of the appraisal estimate or about 78% of the revised workprogram. About 84 km of roads were substituted because of the reassessmentof priorities (para. 3.08). The two workshops at Buba and Bafata were notoperational and about 95% of the equipment financed under the project wasinoperable with a substantia. ?ortion beyond repairs at completion.

Roads Rehabilitation and Maintenance

3.03 The road rehabilitation and maintenance works were executed byforce account using MSE employees assigned to tee project since there wereno local contractors and there was little possibility of attracting foreigncontractors.

Patching, Resurfacing and Maintenance of Asphalt Roads by Bitumen Brigade(226 km)

3.04 The bitumen brigade began operations about 12 months after proj.-ect start-up, upon arrival of equipment (para. 3.16). Consequently, theresealing work which was seen as an emergency operation at appraisal turnedout to be a full scale reconditioning work due to further deterioration ofthe pavement caused by the delay.

3.05 The progress of the bitumen brigade continued to be slow. Inaddition to the fuel supply shortages, this was due to aggregate productionproblems. The difficulty of availability of sucficient clean lateritenodules was not fully appreciated at appraisal and the slow rate of produc-tion posed a major problem. The site selected for the washing and screen-ing plant was not best suited for the purpose, as washing was not possibleduring the dry season, and it was decided to add a second screening plantin March 1982, adapted for dry screening, at a cost of about US$250,000.The situation did not improve much and the supervision mission in July 1981indicated that unless progress was made, there would be no pavement leftfor resealing. Furthermore, it became evident in early 1.981], during a

28

detailed examination of the situation, that sand was not available toperform sand sealing work of 104 km as had been assured by the Government.

3.06 By September 1982, only 70 km of the expected 226 km had beencompleted. The work completed was of variable quality and in one case, asection had stripped about 50%. In the meantime, the Government had con-voked the bitumen brigade prior to the beginning of the new resealing sea-son to carry out the badly needed repairs in the capital city of Bissau,which was not a part of the project, but it had positive impact on-the eco-nomy. Between September 1982 and June 1984 only 130 km of the roads hadbeen completed. At the time the zredit was fully disbursed in December1984, only 139 km or about 62% of roads were completed.

Rehabilitation and Maintenance of Gravel Roads by Laterite Brigades(388 km)

3.07 The operation of the second brigade (first laterite brigade) wasalso delayed by about 12 months due to delavs in procurement of equipment.By September 1981, only 21 km of the 388 km had bee. completed. However,the momentum picked up and p ogress was much better than in the bitumenbrigade, although it was still below its target.

3.08 The MSE was very keen on establishing the third brigade, despitethe recommendations against it by the supervision missions. After Govern-ment's assurances that it would pay all wages after the EEC credit had beenfully disbursed, IDA agreed to the establishment of the third brigade.Upon orders from the Council of State, MSE hurriedly launched the thirdbrigade (second laterite brigade) in December 1981 to carry out emergencyroad rehab,litation in groundnut growing areas, to permit evacuation of thecrop in 1982. By Sep*ember 1982, about 110 km of key roads in groundnutgrowing areas had been treated but certain road sections required furtherwork. By December 1984, 166km of roads in the south and 136 km of roads inthe north had been completed by both brigades.

Technical Assistance

3.09 Tn view of the scarcity of qualified and experienced people inthe country and limited absorptive capacity of the borrower, a total of 252man-months of expatriate technical assistance including a contingency of 36man-months at a cost of about US$2.4 million was provided to assist MSEwith procurement and installation of equipment, supervision of projectworks and training of local staff. The size of the technical assistanceteam appears to have been adequate. However, the difficult localconditions, lack of full commitment by the Government for quicker projectimplementation, dl 'iculties with procurement of spare parts and suppliesand consultants' lack of experience in the country contributed to mixedresults. The training component for mechanics was carried out successfullyat the beginning of the project. While the ovetall performance of theconsultants was considered acceptable under the circumstances, in the lateryears they paid insufficient attention to field supervision (para. 3.06).

3.10 The Government contracted an expatriate consulting firm inOctober 1978 as a condition of Credit negotiations. At the contract

29

negotiations with the consultants, IDA was present as an observer. TheCredit agreement contained assurances from the Government to providesatisfactory housing for the consultants. These assurances by the Govern-ment had little results. The second supervision mission in June 1979 con-sidered the Government's performance poor as regards to consultants housingand counterpart staff and sought agreement with them on a permanent solu-tion. However, this only materialized some two years after the consultantshad arrived in the country. The intermediate arrangements offered wereunsuitable and due to inadequate housing conditions one consultant resignedin early 1980. A clash between the consultants and their local counter-parts over a trivial matter resulted in the dismissal of two consultants,the project manager and the project administrator. The tension in part wasattributed to unsatisfactory living conditions for about 17 months. Theseadded to the low morale and to the difficulties associated with coordina-tion and teamwork effort needed for the successful implementation of theproject. In addition, consultants' difficulty in obtaining local staff forthe workshops and the accidental death of the country's only highwav en-gineer (unrelated to project activity) who was the project manager's coun-terpart, also contributed to the difficulties. Moreover, the availabilitvof local staff, particularly at the intermediate level was overestimated atthe time of project preparation.

3.11 By September 1980, with the arrival of replacement for consul-tants, half of them (3) housed and most of the counterpart staff in place,the consultant6' morale was higher and their relationship with the Govern-ment significantly improved. However, the coup d'etat in November 1980worsened the living conditions for expatriates. There was a hiatus inpublic administration and severe shortages of fuel, foreign exchange andfood. By mid-1981, all the consultants were reasonably housed. The proj-ect was still faced with other problems such as insufficient supplies ofclean laterite nodules, sand, and difficulties with procurement of spareparts and supplies (paras. 3.15 and 3.16). These greatly influenced theeffectiveness of the technical assistance component on project implement-ation.

Project Cost, Financing and Disbursements

3.12 Project cost at appraisal was estimated at US$10.1 million andcost at completion would have been substantially higher (close to about37%) if all roads had been fi'iished as originally planned. Actual cost atcompletion is US$11.6 million (about 16% higher). However, revised projectscope and the fact that unit costs are not available, make it difficult toestimate and compare project costs at completion.2/ The higher costs aremainly due to implementation delays which caused increased shoulder andresealing work, higher installation costs and overestimation of the avail-ability of clean laterite nodules and sand. Also, the Government increasedthe salaries of local staff by 17% - 25% immediately after the coup and

2/ See Table 3 for the estimated and actual costs.

increased the number of local employees of the project substantially morethan agreed at appraisal.

3.13 The foreign exchange cost of the project was expected to be fi-nanced by IDA and the local cost, mainly of wages ,as expected to be fi-nanced by the Government, Later, in view of Government's difficulties withcounterpart financing, an agreement was signed with EEC to finance US$1.0million of the local costs which reduced the Government's contribution toUS$0.1 million. The Government however, financed the cost overruns, mainlyin salaries and wages amounting to US$1.6 million.

Project Financing(US$ million)

Original A^tualFinanced Bv Local Foreign Total Local F(ueign Total

IDA 9.0 9.0 - 9.0 9.0EEC - - - 1.0 - 1.0Government 1.1 - 1.1 1.4 0.2 1.6

Total: 1.1 9.0 10.1 2.4 9.2 11.6

3.14 The Credit was expected at appraisal to be fully disbursed byMarch 1983. However, this was not achieved until December 1984, 21 monthslater. Disbursements were particularly slow during the early stages ofimplementation. By June 1980, about a year and a half after approval ofthe credit, only 34% (US$1.9 mill-'on) of credit funds had been disbursed.Later, disbursements picked up and by March 1983, about 81% (US$8.2 mil-lion) was disbursed.

3.15 The ;overnment's cumbersome administrative and clearance proce-dures for disbursing project funds created considerable difficulties inprocuring spare parts and supplies (para. 3.02). For instance, the foreigncurrency payment remitted by IDA in April 1981 was credited to the proj-ect's account in September 1982 only after the supervision mission, alertedby the auditor's report intervened directly with the Governor of BancoNacional da Guinea Bissau (BNG, the Central Bank). Likewise, an amount ofCFAF 5.4 million which was deposited by IDA in March 1981 in an accountopened by the Central Bank for local purchases was not disclosed to theproject manager. The information was not revealed until the next auditor'sreport. The Bank should share an equal responsibility for this incident.Another major difficulty vis-a-vis suppliers was the slowness of paymentsmade in foreign currency through the BNG. After repeated follow-up by IDA,BNG Governor promised to settle future claims within five working days.However, difficulties with procurement of spare parts and supplies remainedthroughout the project implementation as suppliers insisted on paymentbefore delivery. The Ministry of F'inance had refused to use the normalLetter of Credit for financing deliveries, and given the country's foreignexclhange situation, it is doubtfui if the Letter of Credit would have been

31

more efficient. To resolve difficulties in making the numerous smallpurchases that are an unavoidable part of the running of a force accountproject, under the Second Highway Project, Bank accounts were opened incorrespondent Banks of BNG in Dakar and Lisbon with IDA's depcsit ofUS$50,000 in each account to disburse through a checkbook, checks beingsigned jointly by MSE and Ministry of Economics and Finance.

Procurement

3.16 Although there were no major procurement problems, it took longerthan expected to prepare bidding documents, award the contracts and deliverequipment due to very difficult local conditions and the lack of experienceof the concerned officials with international trade. There were continuedproblems for procuring spare parts and supplies (paras. 3.15 and 6.02).The rehabilitation and improvement works were carrie( out by force accountusing MSE employees assigned to the project as there wete no local con-tractors and no chance of attracting outside contractors.

Covenants

3.17 All but one covenant were generally complied with. The permissi-ble axle-load weight was increased from 10 to 12 tons and difficulties wereexperienced in the following:

(a) delays in providing the counterpart staff due mainly toscarcity of skilled people;

(b) cumbersome disbursement/clearance procedures for payment inforeign currency, caused problems especially for procuringspare parts aid supplies throughout the project implement-ation; and

(c) delays in providing consultants' housing caused seriousdifficulties during the early stages of project implementa-tion.

IV. INSTITUTIONAL DEVELOPMENT

) Il In view of the weak organization which existed at the time ofappraisal, a project implementation unit within the MSE was created. Theunit was mostly managed by expatriates and was self-sufficient for projectimplementation. Furthermore, it had very little interaction with otherunits within MSE. The unit was staffed with counterpart staff of variouslevel of competence after some delays. The project works were carried outby force account and it did not include specific institution buildingefforts except for the training program for mechanics which was parti-cularly successful. Counterpart staff, particularly at lower levels in themaintenance brigades, demonstrated keen abilities to learn.

32

V. ECONOIIIC EVALUATIOF

Background

5.01 The Appraisal mission estimated the project's overall economicrate of return (ERR) to be about 33% based on:

(a) Extending the i.^ ,• paved roads north of Bissau, andpostponing the need for expensive reconstruction which,otherwise, would Pave e. en a potential heavy drain on thedevelopment buaset;

(b) Savings in vehicle operating costs on the paved and moreimportant gravel roads; and

(c) For the less important gravel roads, a net increase in thevalue of agricultural production (producers' surplus) inGabu and Bafata, the important producing regions forforeign exchange-earning groundnuts and locally-consumedgrain crops.

5.02 The ERR at completion is estimated to be about 17% (Table 1).This however, is a conservative estimate based mainly on deferred recon-struction costs and savings in vehicle operating costs (Table 1). It wasnot possible to reestimate the increase in net value of increased agricul-tural production in the area of influence of the project (gravel roads),due to the lack of data on agricultural output and complementaryinvestments. Apart from this, the main reason for the lower ERR atcompletion is that traffic did not attain expected levels.

VT. BORROWER AND BANK'S PERFORMANCE

6.01 The Government's performance over consulLants' housing and thedelegation of authority to the consultants, especially during the start-upphase of the project was poor. The situation eventually improved, but notbefore causing serious problems (paras. 3.10 and 3.11).

6.02 Payments for purchases in foreign and local currencies weresubject to tedious clearance procedures. While these were significantlymodified to reduce delays, purchase of spare parts and supplies withforeign currency payments continued to be a problem throughout projectimplementation. Although the borrower was generally cooperative, higherpriority to ease clearance procedures would have produced better results.Training for local staff, particularly those working on the maintenancebrigades was successful, as they demonstrated their willingness to learn.

6.03 The Association made significant contributions under difficultcircumstances. Its contribution toward minimizing the cumbersome Govern-ment procedures is particularly noteworthy. However, some of the project'siritial impact in improving the Government's maintenance capacity and itsadministrative procedures was lost due to the lack of overlap between thisproject and the follow-up Second Highway Project. Despite the Bank's

33

effort to bridge the gap between the two projects through a ProjectPreparation fund, much of the equipment had become inoperative and thebrigades had been dismantled by the time the Second Highway Project hadbecome effective (The Kuwait Fund Credit, which cofinances part of theproject has still to become effective).

VII. CONCLUSION

7.01 The project was moderately successful, mainly due to difficultlocal conditions and cumbersome administrative and disbursement proceduresof the Government, start-up delays, financial and technical problems. Thereestimated economic rate of return is about 17Z which is a conservativeestimate, as compared with the appraisal estimate of 33%. About 78% of therevised project works were carried out with a cost overrun of US$1.2 mil-lion and the implementation was delayed by about two years. Remainder ofthe roads and parts of the roads which need additional improvement arebeing incorporated on a priority basis into the Second Roads Project.

7.02 The technical assistance component mainly provided for projectexecution, in view of the borrower's limited capacity. Except for thetraining components for mechanics which was particularly successful, noother form of institution building effort was included.

7.03 In retrospect, it appears essential that a follow-up highwaymaintenance project should be appraised and processed with such timing thatsufficient overlap permits a smooth transition between the two projects.

: i

35

Table 1

GUINEA-BISSAU

FIRST ROADS PROJECT

PROJECT COMPLETION REPORT

COST AND BENEFIT STREAMS -/(US$'000)

Capital Costs Recurrent CostsWith b/ Without c/ With Without VOC d/ Total

Year Project Project Project Project Savings Net Benefit

1979 128 0 0 180 0 521980 2,320 0 0 180 0 -2,1401981 4,640 0 0 180 186 -4,2741982 2,192 0 37 180 543 -1,5061983 1,670. 0 109 180 1,401 -1981984 650 0 280 180 1,441 6921985 0 2,000 286 180 1,499 3,3931986 0 2,720 286 180 1,725 4,3391987 0 2,000 286 180 1,794 3,6881988 0 0 286 316 1,991 2,02119b9 0 0 286 316 2,070 2,10019S0 0 0 286 316 2,153 2,1831991 0 0 136 136 921 9211992 0 0 136 136 958 9581993 500 0 0 136 997 6331994 612 0 0 136 1,036 5601995 500 0 0 136 1,078 714

a/ Assumptions on VOC and VPD are available in the files.b/ Paved and gravel roads.c/ For paved roads only.d/ VOC savings from 199! to 1995 applicable only to paved roads.

WAPT2October 1985

/

37

Table 2

GUINEA-BISSAU

FIRST ROADS PROJECT

ESTIMATED AND ACTUAL COMPLETION OF ROADS(In Kilometers)

Appraisal a/Paved Roads Estimate Revised - Actual

1. Bissau Airport - Safim 5 5 102. Safim - Sao Vicente 41 41 223. Safim - Farim 98 94 644. Binar - Bula 12 10 05. Bula - Canchungo 38 40 336. Canchungo - Cacheu 32 32 0

Bissau Streets b/ - 10Subtotal 226 222 139

Gravel. Roads (South)1. Quebo - Cacine - Campeane 70 70 322. Tite - Fulacunda - Buba 38 38 383. Batambali - Catio 25 25 224. Fulacanda - Garsene c/ 14 11 05. Fulacunda - Grangona c/ 18 23 06. Uama Beafada - Uama Porto c/ 4 4 07. Jaba - Jabada cl 18 18 08. Nova Sintra - Sao Joao 15 14 09. Gantua - Balanta - Chigue 13 0 010. Guileje - Rio Languere 15 0 011. Mampata - Cacine b/ -- -- 74

Subtotal 230 203 166

Gravel Roads (North)12. Comuda - Contuboel 25 25 2513. Contuboel - Cambaju 38 42 4214. Gabu - Pirada 30 25 2515. Gabu - Sonaco 33 0 016. Contuboel - Sare Bacar 20 35 3517. Sonaco - Jabicunda 12 12 9

Subtotal 158 139 136

Total 614 564 441

a, Revised in late 1982.b/ Proposed originally under the Second Highway Project, but was cartied

out under the First Project.cI Proposed under the Second Highway Project.

'WAPT 2O)ctober I985

I

I

CUINEA-BISSAU

FIRST ROADS PROJECT

ESTIMATED AND ACTUAL PROJECT COSTS(US$ million)

Cost Estimate at Appraisal Revised Cost Estimate Actual Cost at Completion -f(July 1978) (September 1982) (December 1984)

Foreign Local Total Foreign Local Total Foreign Local Tatal

Equipment and Spare Parts 3.73 - 3.73 3.84 0.01 3.85 4.31 0.01 4.32

Workshop Equipment 0.10 -- 0.10 0.29 0.01 0.30 0.16 0.05 0.21

Workshops 0.20 0.07 0.27 0.09 0.02 0.11

Transhipmeent facilities 0.30 0.01 0.31 -- -- -- -- -- --

Spare Parts for Rehabilitation

of Existing Equipment 0.10 -- 0.10 0.07 -- 0.07 0.10 --

Wages and Salaries -- 0.97 0.97 -- 1.49 1.48 -- 1.oO 1.60

Fuel, Materials and Supplies 2.13 0.06 2.24 2.36 0.24 2.60 2.01 0.30 2.31

Tecihnical Assistance c/ 2.39 0.03 2.42 2.35 0.03 2.38 2.66 0.40 3.06

l!nallocated -- -- -- -- 0.20 0.20 -- -- --

Total 9.00 1.14 12 14 9 °.00 11.00 9.24 2.36 11.60

a/ Itemized costs are estimared costs.b/ includes taxes.c/ Includes auditing.

WAPT'(1k toter l i