Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No 21505

IMPLEMENTATION COMPLETION REPORT(IDA-24200)

ON A

CREDIT

IN THE AMOUNT OF SDRs 30 MILLION (US$4 I MILLION EQUIVALENT)

TO THE

REPUBLIC OF ANGOLA

FOR A TRANSPORT RECOVERY PROJECT

December 13, 2000

TransportAfrica Region

nThis document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not othervise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective November 2000)

Currency Unit = Kwanza (Kz)Kz I = US$ 0.070

US$ I = Kz 14.228

FISCAL YEAR

January 01 December 31

ABBREVIATIONS AND ACRONYMS

CAS - Country Assistance StrategyCCCE - French Aid Agency (Caisse Centrale de Cooperation Economique)CFL - Luanda Railways (Caminho de Ferro de Luanda)CIF - Cost Insurance FreightDANIDA - Danish Intemational Development AgencyDCA - Development Credit AgreementERR - Economic Rate of RetumFMS - Financial Management SpecialistGOA - Govemrnent of AngolaGPS - Geographical Planning SystemGNP - Gross National ProductICB - International Competitive BiddingICR - Implementation Completion ReportIDA - lnternational Development AssociationIMF - International Monetary FundINEA - Angola Highway Institute (Instituto de Estradas de Angola)IRE - Infrastructure Rehabilitation Engineering ProjectLCB - Local Competitive BiddingMINPLAN - Ministrv of PlanningMINOPU - Ministry of Public Works and Urban DevelopmentMINTEC Ministry of Transport and CommunicationMINTRANS - Ministry of TransportMTR - Mid-Term ReviewNTS - National Transport StrategyPIU - Project Implementation UnitPPF - Project Preparation FacilityPRGF - Public Reduction and Growth FacilityRF - Road FundSAR - Staff Appraisal ReportSDR - Special Drawing RightsSIDA - Swedish Intemational Development AgencySME . - Small and Medium EnterprisesTA - Technical Assistance

TOR - Temis of ReferenceUNCTAD - United Nations Conference on Trade and DevelopmentVOC - Vehicle Operating Cost

Vice President: Mr. Cagisto MadavoCountry Manager/Director: Mr. Darius Mans

Sector Manager/Director: Ms. Maryvonne Plessis-FraissardTask Team Leader/Task Manager: Mr. Abdelmoula Ghzala

FOR OFFICIAL USE ONLY

ANGOLATRANSPORT RECOVERY PROJECT

IMPLEMENTATION COMPLETION REPORT

CONTENTS

Page No.1. Project Data 12. Principal Performance Ratings I3. Assessment of Development Objective and Design. and of Quiality at Entrv 4. Achievement of Objective and Outputs 65. Major Factors Affecting Implemenitation and Outconme 1l6. Sustainability 137. Bank and Borrower Peiformance 148. Lessons Learned 1 59. Partner Comments 1610. Additional Information 24Annex I. Key Performance Indicators/Log Framiie Matrix 25Annex 2. Project Costs and Finanicing 26Annex 3. Economic Costs and Beniefits 28Annex 4. Bank Inputs 29Annex 5. Ratings for Achievemnent ol Objectives/Outputs of Components 31Annex 6. Ratings of Bank and Borrower Perfonrance 32Annex 7. List of Supporting Documents 33

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not be otherwise disclosed withoutWorld Bank authorization.

Project ID: P000050 Project Name: TRANSPORT RECOVERY7'eamn Leader: Abdelmoula M. Ghzala 11 UJnit: AFIlT1ICR Tvpe: Core ICR R?eport Date: Decelmiber 13, 2000

1. Project Data

Name: TRANSPORT RECOVERY LI/C'TI Number: IDA-24200Country/Department: ANGOLA Region: Africa Regional Office

Sector4subsector: TT - Transportation Adjustment

KEY DATESOriginal Revised/4ctual

PC'D: 01/08/91 Efftcihve: 09/15/93A-ppraisal: 03/05/92 AfIIR: 07/17/94

Approval: 09/03/92 Closing: 06/30/96 06/30/2000

Borrower/Implemnenting Agen cv: Govermnment of Angola/Ministry of Planiing/Ministry of TransportflNEAOther Partners: None

STAFF Current At AppraisalV'ice President: Callisto E. Madavo E. V. K. JaycoxCountry Mianager: Darius Mans F. Aguirre-SacasaSector Alanager: Maryvomie Plessis-Fraissard Marc BlancTeam Leader at ICR: Abdelmoula M. Ghzala Jean-Jacques RaoulICR PrimaryAuthor: Ajay Kumar; Gualberto Lima

Campos

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory,BL=High1y Likely, L=Likely, UN=UJnlikely, HUN=HighlyUnlikely, H1U=Highly Unsatisfactory,H=High, SU=Substantial, M=Modest. N=Negligible)

Outcome: S

Sustainability: UN

Institutional Development Impact: M

Bank Performance: S

Borrower Performance: S

QAG (if available) ICRQuality at Entry:

Project at Risk at Any T'ime: Yes

3. Assessment of Development Objective and Design, and of Quality at Entry

3.1 Original Objective:

3.1.1 At project preparation, Angola had just emerged from a 15 year civil war that had severelyhurt the economy. Infrastructure inadequacies were proving to be a major bottleneck toeconomic development and improvements in the quality of life. Controlled prices, ineffective costrecovery, departure of most of the skilled Portuguese highway personnel during the civil war

period and unclear institutional responsibilities made the situation worse and decapitalizationwidespread in the sector. Physical infrastructure was in urgent need of repair and sector agenciesneeded institutional reform and strengthening.

3.1.2 The main objectives of the project were to:

* preserve and restore access through urgent road rehabilitation and maintenance support;* promote employment by supporting labor intensive maintenance and creating an enabling

environment for the private sector;* improve management of main roads and operation of Luanda's railway system and the ports of

Luanda, Lobito and Namibe; and* improve sector policies particularly with regard to cost recovery and transport facilitation.

3.1.3 The project objectives were clear and realistic and supported the Government's transportrecovery program. The road and bridge rehabilitation component was expected to reopen mostimportant trunk roads; the port and rail components were expected to provide access to thecentral plateaus with the highest agricultural potential. The project objectives were consistentwith the Government's priorities and the Bank's country assistance strategy at the time of Projectpreparation, which recognized the need to expand the relationship between Angola and the Bankby broadening the dialogue on the countrys development needs... through lending operations,economic and sector work.....

3.2 Revised ObNective.-

3.2.1 The original project objectives were not changed though the project design was revisedduring implementation. The componenrs were first revised at mid-term review (MTR) in July1994 taking into account the renewed civil war and subsequently the project was restructured inDecember 1996 and the Development Credit Agreement (DCA) amended in June 1997.

3.2.2 The war restarted in September 1992, six months after the project was appraised. Theproject remained somewhat inactive during the following four years due to civil unrest. Withimprovements in the peace process and inauguration of a unified Government in 1996, the projectwas restructured to meet the new priorities. Even under the changed circumstances, mostdevelopment objectives were still valid, though the relative urgency of different actions hadchanged. The most urgent priority was to improve living conditions of the main metropolitan areaof Luanda as more than 50% of the country's population was living there. A revised action planfor the use of undisbursed funds was drawn up and agreed with the Government. Lack of accessto the roads proposed to be financed under the project required restructuring of the originalproject design. New roads were selected to be financed by the project, with a view to improveaccessibility to the capital city and the surrounding areas, where almost half the population of thecountry lived. Action plans for the Luanda railway and Lobito port were revised taking intoaccount events such as the virtual closure of the railway and loss of traffic at the port.

3.2.3 In view of the financial constraints faced by the Government, the DCA was amended to:(i) change the percentage of expenditures to be financed out of the proceeds of the Credit for roadrehabilitation components from 80 percent to 95 percent; and (ii) include Government's

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commitment to allocate for road maintenance activities (Road Fund) US$5.0 million in 1997,US$10.0 million in 1998 and US$15.0 million in 1999.

3.3 Original Components:

3.3.1 The total cost of the project, inclusive of physical and price contingencies, was estimatedduring appraisal at US$ 64.9 million, with financing by IDA of US$41.0 million (63%); SIDA,US$3.3 million (5%); (French Aid Agency) CCCE, US$3.0 million (5%); DANIDA, US$3.0million (5%); and Government of Angola, US$14.6 million (22%).

3.3.2 The original four components of the project were:

* Road and bridge rehabilitation-preservation of about 500 km of highways and repair ofabout 25 bridges;

* Improve Luanda railway operations through an action plan, institutional assistance, andoverhaul of the rolling stock and equipment;

* Improve Lobito port operations through an action plan, procurement of spare parts,equipment and port structure repairs; and

* Institutional capacity building through liberalization of road transport and improved regulatoryframework and facilitation of inter-modal transport.

3.3.3 Technical assistance was provided to support:

(i) Ministry of Transport. TA was provided to develop the capacity of the Depaitment ofPlanning, Ministry of Transport to: (i) prepare proposals for the modernization of the legalframework of the transport sector; (ii) study and suggest to the Government strategies andpolicies; and (iii) identify, evaluate, program and follow-up on the implementation of projectsand actions.

(ii) Port of Luanda. TA focused on: (i) improving the efficiency of port management,including port operations and technical.services, port safety and environmental control; and(ii) promoting human resource development and improving maintenance of port assets. Anaction plan was agreed upon to improve operations and financial management systems,including budgetary control, operations and maintenance, asset management, staffingrationalization plan.

(iii) INEA/RF. Technical assistance for the institutional strengthening of INMA (AngolaHighway Institute) included: (i) develop technical capacity of IN1EA to identify, evaluate,program and follow-up the implementation of road construction, up-grading, rehalbilitationand maintenance; and (ii) train and promote small and medium enterprises (SMEs) for roadworks and generate employment in road maintenance. Component costs were estimated asfollows:

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Project Costs Initial Estimates(US$ mllion)

Component Total Cost IDA GOA Donors

Road/Bridge Rehabilitation 48.50 32.90 12.30 3.30Luanda Railways 6.90 5.40 1.50Ports 7.20 0.40 (.8( 6.00Institutional Support 2.30 2.30

Total 64.90 41.)0 14.60 9.30

3.4 Revived Components:

3.4.1 Most of the sites where works were to be carried out as part of the original design werenot secure. Components were significantly revised at the MTR in July 1994, taking into accountthe renewed civil war. Project priorities had shifted and revisions to the project were required toallow contractor mobilization. The road component was further revised in 1996 to includerehabilitation of three main access roads to Luanda: (i) Lot 1--LuandalBarra to Kwanza; (ii)Luanda/Viana trunk road; and (iii) Rotunda da Boavista/Kifangondo. The fourth road section(Catete/Kinfangondo road), included in the revised design, which was to be funded by DANIDA(because of insufficient funds under IDA Credit), was subsequently dropped by GoA.

3.4.2 Most sub-coiiponents of the Namibe and Luanda port systems and CFL (LuandaRailways), included as part of the IRE Project, were transferred to the TRP. In addition,technical assistance was provided to restructure the functioning of the existing Road Fund (RF).

3.4.3 Component costs were revised as follows:

Project Costs Revised Estimates(US$ millo

Component Total Cost IDA GOA Donors

Road/Bridge Rehabilitation 39.16 34.66 1.50 3.00(Luanda Railways 0.43 0.43Ports 4.45 4.45Institutional Support 1.46 1.46

Total 45.50 41.00 1.50 3.00

Note: Donor financing for road rehabilitation was subsequently dropped.

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3.5 Quality at Entrv:

3 5.1 The quality at entry is rated as satisfactory for the following reasons.

3.5.2 Consistency of objectives with CAS and government priorities. The project objectiveswere consistent with both the Government priorities and the CAS. (see para. 3.1.3)

3.5.3 Project preparation. The project was appropriately designed as a first step to addressAngola's highly deteriorated infrastructure and supported the first phase of the Government'stransport recovery program. Key issues were correctly identified and adequately addressed byproviding for studies, technical assistance, critical equipment and rehabilitation of the maLin roads.The project was appraised and negotiated during a small window in the peace process and it washoped that with the signing of the Peace Agreement, key deficiencies in the transport sector(including ports, railways and roads) could be addressed. However, peace was short lived andpolitical uncertainty overtook the country within six months of effectiveness, which delayedimplementation of the project as originally planned.

3.5.4 Project design. Although the project took eight years to implement (as compared to theoriginal time frarne of three years) a number of project components had to be restructlred, andthe reform program could not be fully implemented as originally agreed with the Government.The original design of the project was satisfactory with implementation delays resulting from anuncertain political environment surrounding an unanticipated renewal of hostilities. One keyweakness of the design was the requirement to introduce substantial policy changes andrestructure institutional arrangements within a three-year project period. Given that the countryhad just emerged from a long civil war, lacked experience in dealing with the Bank and hadlimited institutional capacity, it was somewhat optimistic to expect major policy changes withinthis short period.

3.5.5 Complernentarity with Other On-goingProjects. This project complemented the on-goingInfrastructure Rehabilitation Engineering (IRE) project, which was conceived prior to the peaceagreement in 1991. The focus of the IRE project was on providing access to large parts of thecountry, strengthening institutions in the infrastructure sector and introducing basic principles ofcost recovery. The TRP project gained from the project coordination arrangements set up underthe IRE project.

3.5.6 Project Coordination and Management Arrangements. The project was complex andrisky because it involved several Government units and was being implemented in an uncertainenvironment with regard to future progress of the peace and reform process. Governmentagencies lacked experience in implementing Bank financed projects and institutional capacity waslimited. The following implementation measures were designed to reduce risks:

(i) Ministry of Planning (MINPLAN) was responsible for the overall coordination cifproject implementation, with support from the implementation unit establishedunder the IRE within its National Directorate of Investments. The project steering

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committee, already established under IRE, included the four componentcoordinators as well as representatives designated by the Ministry of Finance andthe Angolan Central Bank;

(ii) the project implementation unit (PIU), established for the IRE, providedadministrative support to the project coordinator and the project steeringcommittee. In addition to the four advisors provided by a single internationalconsulting firm under the IRE, a transport expert was hired to provide guidance tothe transport agencies; and

(iii) establishing an intensive IDA supervision plan.

4. Achievement of Objective and Outputs

4.1 Outcomte/achievement of objective.

4.1.1 Although the project had unsatisfactory IP and DO ratings during the initial years, wheninstability resulting from the resumption of war impeded progress, the project outcome is rated assatisfactory. The physical targets were achieved in terms of improving access to the capital cityfor movement of both people and goods. In addition, the project was successful in sensitizing theBorrower to reform issues, particularly with respect to cost recovery, enhancing the role of theprivate sector in small maintenance contracts and strengthening transport agencies. Over the pastfew years, there has been a significant improvement in the dialogue between Government and theBank on specific issues related to road user charges and establishment of sustainable arrangementsfor road maintenance. The pace of reforms was slowed by the civil war and the poormacro-economic environment facing the country. Angola faced a major economic crisis duringthe mid-1990s, affecting project implementation. An economnic reform program with the IMP andthe Bank was suspended in November, 1995; hyperinflation reached 7,400% in May 1996 andthe budget deficit increased to 29% of the GDP. Prospects for improved economic performancehave improved recently with the GOA's decision to undertake an IMF staff-monitored programfrom April 2000.

4.1.2 The routine maintenance program to be funded using the road fund in 2001 is expected toinvolve about 15 local contractors and provide employment to about 1000 to 1200 unskilledworkers. The road works have improved access to the capital city and have resulted in asignificant increase in daily vehicular traffic and economic activity along the road side (local trade,car repair, small industries, markets, etc.). However, since improvement in road quality, a numberof accidents have been occurring, resulting from an increase in traffic speed. In an effort to calmthe traffic, safety humps and other measures are being installed in the proximity of pedestriancrossings.

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4.2 Outputs by components:4.2.1 Based on the following assessment, overall implementation of the road components,accounting for about 87% of the physical investments, is considered as satisfactory;implementation of Lobito port components (about 12% of the physical investments) is alsosatisfactory, considering that port operations have improved; and implementation of the muchsmaller components of Luanda railways (less than 1% of the total physical investments) is rated asmodest.

(I) Road and Bridge Rehabilitation

(a) Luanda/Viana Trunk Road. The construction contract was successfully completed, on timeand within the overall planned budget. The works supervision contract was fully accomplishedand monthly progress reports maintained. The road is 17 km and rehabilitation included: (i)widening of the carriageway and paving of the shoulders; (ii) rehabilitation of the pavement,involving: reinforcement (4.8 km); rebuilding (1.2 km) and resealing (11.0 km); and (iii)rehabilitation and maintenance of the drainage systems. This road constitutes one of the mainaccess links to Luanda, with high average daily traffic and high percentage of heavy goodsvehicles. With an aim to improve traffic safety, 11 lay-by-areas were built to enable ingress andegress of passengers and goods in a proper and safe place out of the carriageway.

Table I - Luanda/Viana Trunk RoadSummary of the works values, planned and concluded (in US $ million)

Activities Planned %/ Executed 'Vo Variation %/llValue Value

Earthworks 1.24 29.7 0.94 22.3 -0.3 1 -7.4

Surfacing 1.74 41.6 2.33 55.5 0.58 13.9and Paving

Drainage 0.13 3.0 0.05 1.3 -0.07 -1.8

Sundries 1.08 25.7 0.88 20.9 -0.20 -4.7

TOTAL 4.19 100,00 4.20 100.00 $0,00 0,100

(b) Luanda/Barra Do Kwanza Trunk Road (Lot 1)

The road is 61.5 km and rehabilitation sub-components included: (i) widening of the carriagewayand paving of the shoulders; (ii) rehabilitation of the pavement, including: reinforcement (31.4km), rebuilding (8.4 km) and re-sealing (21.9 km); (iii) rehabilitation and maintenance of thedrainage system; and (iv) rebuilding and reinforcement of al I existing structures on the road. Due

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to a delay in works execution of about two years since initial planning, final plans had to bealtered somewhat in the surfacing of bitumen concrete to improve the quality of works and reducemaintenance cost. This resulted in an increase in initial cost estimates by about 11 %.

Table 2 - Luanda/Barra Do Kwanza Trunk RoadSummary of the works values (estimated and actual, in US $ million)

Description Initial amounl Final amount Deviation %(estimale) (actucll)

Bill nr.0- Preliminary and 1.36 1.21 -11.4General

Bill nr. I - Earthworks 2.31 3.99 67.8

Bill nr.2 - Bases 0.73 0.29 -60.5

Bill nr.3- Surfacing and 5.07 6.77 33.4Pavements

Bill nr.4 - Structures 4.06 2.83 -30.4- Drainage

Bill nr.5 - Structures 0.15 0.17 11.6- Bridges

Billnr.6-Incidentals 0.61 0.77 26.5

Sub Total 14.37 16.03 11.6

Bill nr.7 - Work days 0.13 0.03 -76.8

TOTAL GENERAL 14.49 16.06 10.8

(c) Luanda/Kifangondo Trunk Road (Lot 4). This is 17.5 km road and rehabilitationsub-components included: (i) widening of the carriageway and paving of the shoulders; (ii)rehabilitation and maintenance of the drainage system, including widening of the box-culvert; (iii)rehabilitation of the pavement; and (iv) widening of the bridges. This is an artery with high trafficvolume, including heavy goods vehicles and tankers carrying water to Luanda. Due to delays inwork commencement by about two years following preparation of plans and support studies(plans were prepared in early 1996 and works commenced in mid-1998), it became necessary toadapt the works to conditions prevailing at the later date. However, the final cost amount did notchange from the initial estimates (see Table 3).

(d) Bridge Rehabilitation. INEA has completed the repair of 25 bridges with installation of948 meters of metallic bridges at a total cost of US$6.0 million.

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Table 3 - Luanda/Kifangondo Trunk RoadSummary of the works values (estimated and actual, in US $ million)

Description Initical amnount Final amount Deviation %(estimate) (actual)

Bill nr.0 - Preliminary 0.87 0.86 -1and General

Bill nr.1 - Earthworks 0.95 1.48 +56

Bill nr.2 - Bases 0.53 0.67 +28

Bill nr.3 - Surfacing and 1.83 2.24 +23Pavements

Bill nr.4 - Structures - 1.87 1.54 -18Drainage

Bill nr.5 - Structures - 1.50 0.83 -45Bridges

Bill nr.6 - Incidentals 0.29 0.21 -26

Bill nr.7 - Work days 0.11 0.16 -85

TOTAL GENERAL 7.95 7.86 -1

(II) Port Operations (total cost: US$4.8 million). This component included repair to berths 5and 6 of the Lobito port, including heavy-duty pavement adjacent to the quay apron andupgrading of part of the electric system. Spare parts for the ports of Luanda, Lobito and Namibewere procured, including: spare parts for generator groups and tugboats and launch; equipmentfor two lighthouses of Luanda port; 15 meter GRP tower-shore installation at Lagostas, islands,39 meter metallic tower shore installation at Palmeirinhas; materials for beaconnage of Corimbabay; electrical and hydraulic material for the port of Luanda; crane plugs for existing port cranes;spare parts for Hyster equipment; spare parts for Toyota tractor; office equipment and urmiture;procurement of forklift trucks, electrical material and divers material for the Namibe port.Technical assistance and training was provided to strengthen administration and finance,computerize Lobito port operations and set up a data base. In addition, the environmentalregulations for ports were approved by the Ministry of Transport.

(III) Luanda Railways (total cost: US$0.25 million). This component was considerablydown-sized during the MTR and subsequent project restructuring with the virtual closure ofrailways resulting from resumption of war and a lack of access to vast tracks in the country. Theinvestments in this component were confined to procuring sleepers for about 10 km of railway

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line and rehabilitating 18 rail cars and three locomotives. This reduced program was successfullycompleted.

4.3 Net Present Value/Economic rate oJfreturn:

4.3.1 Restoration of the main road links to the capital city is expected to result in substantialbenefits to the economy. The direct benefit of the improved roads was quantified in terms oflower vehicle operating costs and savings in future reconstruction costs. When compared againstthe estimated Project costs, the ERR for the road and bridge sub-components ranged from 20percent to 38 percent, with 31% for the overall roads component. However, road sectionsplanned to be rehabilitated as part of this project had to be significantly revised during 1996,taking into account the renewed civil war. Most of the sites where work had to be carried outwere not secure and given the destruction caused by war, Project priorities had shifted. Newroads were selected to be financed under this Project, with a view to improve accessibility toLuanda and the surrounding areas.

4.3.2 All assumptions and key parameters adopted at appraisal were applied in the economicevaluation of the revised components. The ERR for the Luanda/Barra-Kwanza section isestimated to be 44%; for Luanda/Viana Trunk 43%; and for Rotunda da Boavista/Kifangondosection 23%. The overall ERR for the roads component is 38%. The higher ERR for the roadsunder the Project as compared to the original design components is because of the high volume ofheavy vehicles entering the city and the resulting savings in VOC. No savings for light vehicletraffic were included in computation, as proposed in the SAR.

4.4 Financial rate of return:

No financial rate of return was calculated for this Project.

4.5 Institutional developmnent irnpact:

4.5.1 Many of the institutional reforms were undertaken in the last year of the Project and theGovernment is still in the process of implementing the various study recommendations. As aresult, it is rather early to document specific achievements and the impact is rated as modest. Keyachievements include:

* Improved sector policies, particularly with regard to cost recovery and transport facilitation;* National Transport Strategy (NTS) for multi-modal integrated transport sector needs was

prepared and adopted. The Strategy included preparation of short, medium and long termaction plans for the transport sector. The priority investment program was developed and therole of the public and private sectors was defined. The Strategy also identified future trainingneeds. A national seminar to discuss the Strategy was held in November, 1999 withparticipation from the public and private sectors;

* The restructuring of the Ministry of Transport (as recommended by the NTS) is on-going,including strengthening of the National Road Authority and arrangements to manage the roadfund are being put in place; TA to INMA and the study on RF have also been completed andthe RF is being restructured along the recommendations;

* MNEA is currently under a restructuring process with the objective to transform itself into a

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small unit focused on managing the road network, planning maintenance works andcontrolling the quality of works developed by private contractors (300 former INEA workershave already been laid off). Its capacity to manage contracts and works has improved with afocus on: (i) preparing terms of reference for the bidding process for rehabilitation andmaintenance works; (ii) managing quality control issues through a consultants network; and(iii) installing a data base for the whole road network (the Geographical Planning System isbeing installed and INEA is now preparing a data base for the bridges). All theseachievements were achieved through intensive training in particular in Portugal and Brazil andlearning by doing with technical assistance experts, both activities largely financed by theCredit.

4.5.2 One of the agreements during prn ;ect preparation was development of an action plan forcost recovery to finance road maintenance through road user charges, with the objective ofensuring collection of at least US$15 million per year, starting in 1993. However, as a result ofthe major economic crisis confronting the country in early to mid-1990s, the project wasrestructured and the DCA amended to include Government's commitment to allocate for roadmaintenance activities equivalent to US$5.0 million in 1997, US$10.0 million in 1998 andUS$15.0 million in 1999. Due to continued worsening of the macro-economic environmnent, thisrevised objective has not been fully achieved. There have been delays in financing the RFaccount. In 1999, about US$1.5 million was transferred for road maintenance activities, whichwas less than expected but sufficient to maintain about 1500 km of the road network, which is thetotal length of the currently accessible network due to the prevailing war situation. With a returnto peaceful condition, the development objectives would not be sustainable unlessrecommendations of the RF study were utilly implemented.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors outsidie he control of government or implenmenting agencl:

5.1.1 The project was implemented during a period of great economic and political volatility.The 1991 peace agreement and the momentum for reform were short-lived as hostilities renewedin 1992. Despite a further period of limited peace between 1994 and 1998, harmony 'was neverfully achieved. Renewed civil strife increased military spending and diverted resources away fromthe development activities. A constant uncertainty on several fronts inevitably affected criticalproject decisions and slowed implementation of policy reforms.

5.2 Factors generally sub ject to government control:

5.2.1 The Government's pre-occupation with the civil war and the resulting political turmoil,resulted in inadequate attention to macro-economic and structural reform issues. Delays inproviding counterpart funds and allocating funds for road maintenance activities adverselyimpacted project outcomes. Because of Government's failure to move forward consistently with aprogram of macro-economic stabilization and reform, the Bank has largely suspended thepreparation of new lending activities pending successful completion of the TM\F's Staff MIonitoredProgram and an agreement between the Government and the IvF on a successor arrangement.

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5.3 Factors generally.subject to ihnpkmenting agency control:

5.3.1 In spite of the uncertain political environment and limited institutional capacity, theimplementing agencies have kept to the timetable, including preparation of tenders andsupervision of works. Successful efforts were made by the coordination of the project and othersub-agencies to respect the schedule agreed during supervision missions. The supervision of roadrehabilitation works was carried out with due diligence in spite of delays in procurement ofconsultants and finalization of bid documents. The studies supporting the rehabilitation projectwere conducted in early 1996. The works began in mid-1998. This required a need to adapt thefinal plan to the then existing conditions. This adaptation resulted in several variations of thepredicted quantities for each working unit as well as alterations in improving the quality of theworks. Still, work deadlines and broad financial estimates were respected. The unit pricesestablished by contract were also respected, as well as its overall value. Specific factors impactingthe project implementation were:

* limited institutional capacity of the implementing agencies has added significantly to the timeneeded to review design, prepare and process procurement documents;

f delays in preparation of technical specifications and bid documents, partly because ofinadequate command of the English language;

* delays in receiving construction material; frequent and lengthy shortages of bitumen in thecountry; and

- component coordinators were overloaded with work, reducing the time and attention availablefor project coordination.

5.4 Costs andfinancing:

5.4.1 While consultants conducting road rehabilitation studies performed satisfactorily, costsescalated for one of the road sections. This was primarily because the studies supporting therehabilitation project were conducted in early 1996, while the works began in mid-1998. Thisrequired a need to adapt the final design to the then existing conditions. This adaptation resultedin several variations of the predicted quantities for items of the bill of quantities as well asalterations in improving the quality of the works, though the unit costs of the contract wererespected in the final cost assessment. Main modifications were aimed at improving the qualityof work and road safety and reducing maintenance cost. The project modifications for Lot 4 werethe most significant, resulting in a 10% increase in cost. The changes in cost are small whencompared to uncertain conditions prevailing in the country and lack of adequate experience withBank projects. In addition, the modifications will improve service perfornance of the roads fromwhat was initially planned.

5.4.2 The Credit was signed on September 15, 1992 and became effective in September, 1993.The initial closing date was June 30, 1996. However, the project remained almost inactive for thefirst three years of implementation because of insecure conditions prevailing in the country. InSeptember 1996, total disbursement had only reached 6% of the total Credit amount, mainlytowards the award of the metal bridge sub-component. The closing date had to be extendedthree times to achieve project objectives and allow completion of the following outstanding tasks:(i) rehabilitation of three main access roads to Luanda; (ii) procurement of spare parts for the

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three main Angolan ports; and (iii) provision of technical assistance programs to the M[inistry ofTransport, Port of Luanda and INEA. The closing date was first extended by one year fromJune 30, 1996 to June 30, 1997. The second extension was granted until June 30, 1999, afterrestructuring of the project in December 1996. However, particularly due to delays encounteredin launching and evaluating the various tenders and in mobilizing the contractors, and theconsultants, road works and consultant services could not be completed. The closing date wasextended for the third time to June 30, 2000.

6. Sustainability

6.1 Rationale/for suslainahility rating:

6.1.2 Sustainability of the project benefits is unlikely in view of continued conflict within thecountry and instability of the macro-economic environment. This is despite the considerableprogress made during the project to open up a dialogue with the Government on the reformprocess and provide technical assistance to the Port of Luanda, INEA and the Ministry ofTransport. Significant achievements of the project included: (i) introduction of the concept ofcost recovery; (ii) decentralization of port tariff, (iii) creating an enabling environment forparticipation of the private sector in road maintenance activities. The Govemment is justbeginning to restructure the road agency and provide a sustainable basis for road maintenance.However, it would require a continued dialogue with the Govemment to ensure that appropriatemechanisms are put in place and adequately supported. Technical studies to strengthen capacityof the port of Luanda, Ministry of Transport and INEA have just been completed prior to closingof the project. Failure to follow on the recommendations of the studies and provide continuedassistance to the Government in advising and monitoring the agencies' performance may adverselyimpact successful implementation of thi recommendations. Considering that there is no othertransport project in the Bank's current lending program, it is unlikely that the progress made underthe project would be sustained. However, if there is a satisfactory completion of the ]IMF StaffMonitored Program and subsequent IMF-Govemment agreement on a PRGF, it is possible thatBank support in the transport sector will resume. That will allow continuation in the support forreform policies and capacity building initiated under this project and could lead to sustainability ofthe project outcomes.

6.2 Transition arrangement to regular operations:

6.2.1 Future operations should be considered when the Govemment and the IMF agree on aprogram to address the critical macro-economic issues confronting the country. In the long run,in order to attract intemational investment, the Government will need to increase the confidenceof the investment community by increasing the role of the private sector and by addressing themacro-economic issues raised by the IMF. In the short-to-medium term, in absence of anyforeseen transport operation in the pipeline, it is imperative to continue with some TA to maintainthe dialogue on the transport sector with the Government and to follow up on the implernentationof the restructuring of MINTRANS and the RF. There is also a need to: (i) launch a detailedstudy on traffic safety in the new upgraded road section; (ii) conduct a careful inspection of therehabilitation works (some of the road signs were stolen subsequent to installation and it isnecessary to build adequate safeguards); and (iii) proceed with maintenance works of the drainage

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system as well as prevent erosion of the embankment slopes caused by rainfall. If theseoperations are not adequately carried out, the whole integrity of pavement may be threatened,which may also adversely impact traffic safety. In the absence of adequate maintenance, localizedphenomena such as erosion of embankments may damage the pavements.

7. Bank and Borrower Performance

Bank7.1 Lending:

7.1.1 The Bank clearly identified, prepared and appraised the project which met the needs of theBorrower and was consistent with the Bank's lending strategy. The objectives were appropriateand components provided for flexibility during implementation. The Bank's performance wassatisfactory.

7.2 Supervision:

7.2.1 Considerable efforts were made by the Bank and the Government during implementationto realize project objectives in spite of the difficult economic and political environment prevailingat the time. Overall Bank supervision took place in three phases. During the first phase whichlasted until late 1994, the project was implemented as appraised, though project activitiesremained almost inactive and total disbursement was less than 5% of the total Credit amount.During the secondphase, which lasted between early 1995 and late 1996, the DCA was amendedand attempts were made to improve implementation, though disbursements remained slow. Anumber of personnel changes took place in the Bank's supervision teams during the first andsecond phases, adversely impacting effective implementation. During the third phase whichlasted from 1996 to project closing, a continuity was maintained in the Bank's supervision teamresulting in improved dialogue with the implementing agencies. Since 1996, the supervisionmissions contributed significantly to improved project performance. Specific actions taken by theBank supervision missions to improve project performance included: (i) flexibility and adaptabilityshown by the project team to changed circumstances and restructuring of the project to suit thespecific national priorities; (ii) recruitment of short-term consultants to support documentpreparation and provide "hands-on" procurement training; (iii) providing support to the PIU toassist in the preparation of a Procedure Manual; and (iv) inclusion, with the approval of theGovernment, of preparing an integrated national transport strategy.

7.3 Overall Bank performance:

7.3.1 Overall, Bank performance was satisfactory.

Borrower7.4 Preparation:

7.4.1 The Borrower's performance during identification, preparation and appraisal wassatisfactory.

7.5 Government implementation performance:

7.5.1 The Government performance during implementation was marginally satisfactoryconsidering that counterpart funding was provided after considerable delay, which delayed

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contractor payments and adversely impacted the implementation schedule. However, the delaywas not surprising considering the serious macro-economic problems faced by the country duringthis period. The real strength of the Government's commitment was ownership of the reformprocess. The Govemment maintained an open dialogue and was receptive to suggestions from theBank.

7.6 Implementing Agency:

7.6.1 As observed earlier, overall Project implementation took place in three phases. During thefirst phase, communication between the PrU and some implementing agencies was weak due tothe poor understanding of these agencies of their role vis-a-vis the PIU. These factors resulted indecision making delays. In the second phase, the Govermnent entrusted project managlement toinexperienced local staff and as a result experienced a series of procurement problems. During thethird phase, the PIU staff and the Bank's project team worked effectively together to resolveproblems and by the end of the Project, the PrIU had become a highly effective unit capable ofmaking rapid decisions and complying with Bank procedures and guidelines. The supervisionteams responsible for contract management and the quality of works have performedsatisfactorily.

7.6.2 The borrower, in spite of constraints and little experience in the management of largecontracts, has kept to the timetable including preparation of tenders; successful efforts were madeby the Coordination of the project and other sub-agencies to respect the schedule agreed duringsupervision missions. INEA and its Supervisors showed remarkable performance and readiness inthe road rehabilitation works. Throughout the development of different works, there was agenuine concern to respect the Contract Technical Specifications and initial cost estimates by allconcerned parties (INEA, supervisors and contractors).

7.6.3 During the past two years, the financial statements of the Project's management have beenprepared on an annual basis and audited by independent auditors. The procurement procedureswere observed to be in accordance with the Bank's procurement guidelines as stipulated in theDCA.

7.7 Overall Borrower perjbrmance:7.7.1 The overall Borrower performance was satisfactory.

8. Lessons Learned

8.1 The following lessons can be learned from the Transport Recovery Project:

8. 1.1 During project preparation, special efforts should be made to provide training in Bankguidelines on procurement, disbursement and financial management to the staff of implementingagencies. This is especially important for a new Borrower and when the implementing agenciesare unfamiliar with Bank's operational guidelines. Focused short-term technical assistance shouldbe used during early phases of the project to provide practical training. Detailed Implementationmanuals should be prepared to assist the Borrower in project implementation and monitor projectperformance. In addition, continuity in the Bank project team and Govemment's ownership of the

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project are critical to maintain a dialogue with the Government to ensure successfulimplementation of the reform program.

8.1.2 It is important to pay adequate attention to all aspects of road policy reform to ensuresustainable improvements in the sector and transparency in financial arrangements. To providesustainable financing for road maintenance, the consultants have prepared a detailed study onrestructuring the functioning of the existing Road Fund. However, adequate resources to financethe RF have not been forthcoming. At project completion, given the still on-going civil warsituation and lack of access to most of the road network, no specific agreement has been reachedwith regard to sufficient overall funding levels in the long-term and transparent mechanisms tochannel funds to the RF. In this context, it is important that the road agency (INEA) isrestructured to improve planning and monitoring of the financing arrangements.

8.1.3 Agreements sought from the Government as part of project preparation should be realisticand based on institutional capacity and local knowledge. Over-optimistic conditionalities whichare not fully supported by detailed action plans make the reform program difficult to implementand make the project objectives unsustainable.

8.1.4 It is necessary to implement measures of quality assurance related to design, works andoperation stage. The design plan must be carefully evaluated by the Administration to ensurecompatibility with all programs and local specifications. All revisions to the plans must beforrnally introduced to eliminate any discrepancy during the works stage. It is important toestablish quality auditor assessment throughout the contract works. The auditor group mayinclude representatives from the Administration, the State Laboratory, the University and otherinterest groups. In addition, in order to adequately program activities related to maintenance andrehabilitation, a good knowledge of road condition is essential. This requires maintaining alltechnical drawings in a computerized form capable of easy consultation and storage, possibleupdating and a good reference system.

8.1.5 The road improvement/rehabilitation works must pay particular attention to improvingroad safety. Often, road surface improvements and road widening allow achievement of muchhigher speeds which can result in compromising road safety standards. This requires that as a partof road design and technical specifications, special attention should be paid to improving roadsafety with construction of lay-bys, safety humps or other traffic calming measures to improveservice performance of the roads.

9. Partner Comments

(a) Borrowerlimplementing agency:

Borrower's Contribution to the Implementation Completion Report

INTRODUCTION

The object of this report is to presenit a summary of the final evaluation of the TRP Project (IDA) Credit 2420ANG), from the point of view of the Angolan Govermment, in order to make its contribution to drawing up theFinal Implementation Report (ICR).

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This contribution takes the form of a development of the following themes: (a) evaluation of Projectobjectives; (b)evaluation of the performance of the Bank and of the Government during the clifferent phases ofthe Project; (c) the relationship between the Government and the Bank; (d)knowledge gained; (e) theenvironment where the Project was developed; (f) economic and finance information about the project(attached), and (g)the analysis of the sustainability of the project.

The Project was identified during the visit of His Excellency, Brig. Eduardo dos Santos. the President ofAngola, to the World Bank Headquarters, in Washington, in September 1991, as being of the "emergency"type, anticipating the IRE Project, in such a way as to enable the riestoration and upkeep of naeans of access tothe economically important zones of the country, in order to support the reactivation and development ofnational economic activity. Later on, in October of the same !'ear, with the visit of the, Bank TechnicalMission to Angola, and the Staff Appraisal Report of 4 May 1992, the need for a project with thecharacteristics of TRP was confirmed.

In September 1991 the first Bank Mission caine to Angola and, jointly with the Ministry of Transport and theMinistry of Public Works and Urbanization. worked on preparations for the Project. The evaluation of theProject was carried out from 14-29 Febmiary 1992, in Luanda. The Development Credit Accord (IDA 2420ANG) was negotiated with the World Bank in May 1992 and signed on 15 September 1992 by the Angolanrepresentative to the United Nations.

The TRP Project was envisioned as the first physical intervention in Angolan infrastructure, mainly at thelevel of rehabilitation of some priority stretches of the Basic Road Network. It was rationalized as anticipatingthe IRE Project, given that the latter was more directed towards carrying out studies and, while such studieswere carried out by the TRP, would help with questions which at the time were identified as beingemergencies, covering the basic priorities of the three sub-sectors - roads, ports and railways. In this respectthe TRP Project may be considered as complementary to the IRE Project, which terminated on 31 March1999.

By Jtuie 1997 the various Task Managers W]ho had moved over to the Project, along with their respectiveteams, were those who oversaw the execution of the IRE Project. At a certain juncture different TaskManagers were nominated for each of the Projects, and as of that time there were no more changes in taskmanagers. This decision, taken by the Bank, helped considerably in improving the performance of the Project.

In the same way the Co-ordination of the TRP Project, including the Management Unit, was that whichoversaw the IRE Project co-ordination, due to the limited number of trained personnel availalble at that time.

Thus it was possible to achieve certain economies of scale in tenrs of personnel and materials. Given that (i)the greater part of the administrative, logistical and technical support materials made available to the TRPProject were financed by the IRE Project, (ii) the daily activities colmected with Project implementation wereguaranteed by the Project Coordination UCP

Effective Date l5 September 1993Conclusion date (originally) 30 June 1996Conclusion date (final) 30 June 2000Initial financing of Project

* IDA credit USD41 million* GOA USD14.8 million

Project finance after Mid-

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Period Revision (final)* IDA USD41 million* GAO USD1.5 million

Adverse circumstances made the execution of some aspects of the Project more difficult, which meant that theCredit Accord suffered some amendments, both in tenns of deadlines and in the adaptation of some clauses tothe realities of the Project.

The following amendments were made to the Credit Accord:

At the Mid-term Review Mission, from 18-24 July 1994, and confirmed by letter of 17 January 1994,ProJect components were reoriented and resources accordingly reallocated (it is worth mentioning that up to30 June 1994, nine months after the effective date of the credit, only USD76,000( had been disbursed, for thereimbursement of the PPF. Given the situation that prevailed at the time, and the urgent needs of the country,most of the actions plained for the Transport Component of the IRE Project were re-grouped into the TRP, aswill be seen later.

* Amendment to the Credit Accord on 28 September 1997, which extended the date of conclusion of theProject to 30 June 1997, reallocated items. and a new Component is introduced. the Urban Sanitation of aPilot Macaque (Sarnbizanga), which was moved to the TRP Project from IRE, due to a lack of funds;

* Second amendment to the ACD on 9 June 1999 extends the conclusion date of the Project to 30 June1999, introduces alterations to the structure of the credit, with Government participation changing from 20%to 5% of the contribution of funds for the rehabilitation of roads.

* Letter from Ms Barbara Kafka dated 22 June 1999, authorizing extension of the conclusion date of theProject to 30 June 2000.

III - INITIAL OBJECTIVES OF TRP PROJECT/ASSUMPTIONS AND RISKS

As mentioned above, at the time of signature of the Accord (IDA Credit 2420 ANG), there were strongexpectations of peace, and consequently great optimism about the relenting of the economy, and thencepossible opportunities for reforming institutional policies.

Another assumption was that it would be possible, despite their run

o periodic maintenance work on tracks, including: (i) provision of approximately 10 km oftrack, 14,000 metal sleepers and 80,000 M3 of ballast, (ii) rehabilitation of stations, and(iii) carry out maintenance work on locomotives; and rehabilitate approximately 18carriages and three principal locomotives.

Institutional Support

o provision of technical assistance to Ministry of Planning and the Unit responsible forProject implementation;

o carry out first phase of institutional capacity strengthening for roads sector, ports andrailways; and

o carry out the following: (a) study for the privatization and liberalization of the roadssector; (b) studies. including: (i) institutional framework of maritime transport, (ii)

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customs documentation and operations, and (iii) freight and insurance; and (c)strengthening National Directorate of Merchant Marine.

Definitive Components of TRP Project

ROADS AND BRIDGES COMPONENT

o Acquisition of 25 metal bridges;o Prequalification of contractors;o Rehabilitation of approx. 150km of roads;o Supervision of roads rehabilitation works;o INEA training program;o Road engineering studies for rehabilitation of roads;o Technical assistance for [NEA in the implementation of the Road Ftnd and

Maintenance Program;

PROGRAMME

o Development study for the Port of Namibe:o Technical assistance for the Port of Lobito;o Acquisition of parts and spares for the Ports of Luanda, Lobito and Namibe;o Acquisition of sleepers and fixings for CFL;o Technical assistance for Port of Luanda and development of Blocks 2 and 4;o Technical assistance for Ministry of Transport for the preparation of National Transport

Sector Strategy; ando Personnel training program.

- EVALUATION OF OBJECTIVES

The costs arising from the non-realization of the Project would doubtless have been greater than the overallcost of the Project. The cost savings that can be expected from the Improvements in rehabilitated roads, fromthe efficiency of the three ports, in the substantial improvements in stevedoring activities, the existence offeasibility studies designed to assist the Govermment in taking important decisions regarding infrastructuresector rehabilitation which, if implemented opportunely will make an important contribution to the attempts atstabilization and relenting economic activity in the country, are all significant. In fact, during the eight yearsthat the Project has existed, dialogue with the Bank regarding policy reform in the infrastructuresector/transport infrastructure, and the studies carried out will provide important support for the Governmentin defining its development strategies for the transport sector, including roads, and in designing new policiesfor the sustainability of the system through private initiative with the possible introduction of privateoperators.

In terms of the impact of the most significant rehabilitation and conservation policies anid strategies, theseshould be analyzed in respect of the implemeentation of the two Projects (IRE and TRP), as a result of whichthe following is seen:

o A management structure was developed, jointly with INEA, for roads; and roadmaintenance;

o The Government has already created the legal framnework which will apply the Roads Fundwith the introduction of the following: (i) Decree nO 27/94 of 22.07.94 of the CM which

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created the Roads Fund; (ii) Joint Executive Decree nO 61/95, wlhich defines the source ofincome for the Funds; and (iii) Executive Decree nO 14195 of 28.04.95, which governs theuse of various existing Funds.

o Three main access roads into Luanda were rehabilitated with IDA assistance. totalingaround 100km, under the ambit of the TRP Project;

o The Master Plan for the Rehabilitation and Maintenance of Roads and Bridges (whichenabled the start of local procurement for roads maintenance to be financed by the RoadsFund);

o Creation of a cooperation protocol between tlle Portuguese roads authority (JAE) andINEA for professional training;

o Completion of the Development Study for the Port of Narnibe:o Teclnical assistance for the Port of Luanda for administrative and organizational capacity

strengthening and lhmtan resources management:o Acquisition of parts and equipment for the Port of Gnarring;o Acquisition of parts and equipment for the Port of Luanda;o Acquisition of 7,500 metal sleepers and related fixing materials for the Luanda Railway;o Acquisition of parts and spares for the Port of Lobito;o Technical assistance for the Port of Lobito; ando Institutional support to the Ministry of Transport with a view to defining policies and

strategy for the period 2000-2015, computerization of the Studies and Planning Office ofthe same Ministry, carrying out a training course for Transport Planning and Economics.

VII - Evaluation of Performance

Government Performance

This evaluation will observe the periods mentioned above. i e (i) October 1991 June 1992, the period ofidentification, preparation, evaluation and negotiation of the Project, (ii) June 1992 -December 1995, theinitial implementation period with techlnical assistance from WSA. and (iii) Januarv 1996 to the conclusion ofthe Project on 30 June 2000. the final phase of Project implementation with local personnel.

In general terms it may be considered that Government performance in each of thie periods was satisfactory,taking into account the fact that each period had its own character. and consequently its own dynamic, whichtaken all together resulted an overall satisfactory performance of the Project

In terms of disbursements, as can be seen in the attached tables, the highest levels of disbursement were seenat the time when the Project was under local management, and this is also the time when a considerablenumber of actions were realized. At the start of the Project, with a reduced number of technical staff, it waspossible, with the Bank's assistance, to identify and make available all the infornation that the Bank neededfor the various Missions it undertook. It was possible to create the necessary conditions for negotiating thecredit. The limitations of this phase were due to the assimilation of this first experience of working with theBank.

The development of the following phase was adversely affected by the new outbreak of war. TRP Projectcompletions were reduced, with significant delays which brought into question the continuation of the credit.Up to 31 December 1996 approximately USD5-6 million had been disbursed - 13%) of the total of the credit.

The relenting of the Project came with the Supervision Mission of 16-20 December 1996. From this date theProject took on another dynamic and perforned better, in tandem with the IRE Project. Thne capacity of the

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Project Coordination Unit also improved substantially from this time on.

At any given time the Government's compliance with its obligations under the Credit Accord was inaccordance with the strictures of the credit. It should be observed however that this compliance was oftenpartial or delayed.

Bank Performance

The Bank's performance in the identification and preparation phase of the Project was good: the objectiveswere clear, appropriate and realistic. However, the Bank could have suggested the prior approval of aProcedures Manual in order to mitigate the lack of local experience.

(a) The Supervision Missions were sufficient in number and aided the Government in resolving concreteproblems related to the implementation of the Project; (b) the time taken to give 'no objection" wasreasonable; (c) during the Mid-term Review Mission the Bank showed itself to be flexible and capable ofadapting to the new reality; (d) from 1996 the Bank team made a significant contribution to tlhe substantialimprovement in Project performance: and (e) dialogue with the Bank was always beneficial.

VIII - Factors Which Affected Project Implementation

Factors Outside Government Control

The following were the main factors outside Government control which affected Project implementation

The unexpected fresh outbreak of war in October 1992 and again towards the end of 1994. affecting a largepart of national territory, preventing the credit from being made effective within 90 days of signature.

Lack of security for carrying inspection visits for Project members. which resulted in some adjustments andcuts in the road and rail components. The war was partly responsible for delays in restructuring andimplementing the Project.

Difficulties for the contractor MOTA and Co. in finishing road rchabilitation works Lots I and 4 with delaysof between 6 and 8 months.

Difficulties in implementing the contract for supply of sleepers anud fixings for CFL. The material supplied didnot correspond to the technical specified in the bid document.

Difficulties with disbursements from the special account during the last four months of the Project, withdelays of more than 30 days and a lack of effective communication with the Disbursement I)ivision of theBank.

Factors generically under Government control.

Administrative procedures, macroeconomic policies and conditions at times unfavorable for carrying outprojects in accordance with Bank procedures. namely: (i) the problem of obtaining work visas for expatriatepersonnel; (ii) delays in exemption decisions for customs dutics: (iii) the problem of materials and theconstruction industry in the country; (iv) slowness in the implementation of the Roads Fund; (v) difficulties inproviding counterpart funds; (vi) excessive workloads for most Component Coordinators; (vii) limitedinstitutional capacity for overseeing Project dynamics: (viii) excessive bureaucracy in customs procedures for

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materials.

Factors under UCP and Implementing Agencies' control

Slowness in identifying, drawing up technical specifications and bid documents for acquisition of materials forLuanda, Lobito and Namibe ports;

Poor knowledge of English language, giving rise to substantial delays in preparing bid documents;

Communications difficulties with the Bank, particularly at the start of the Project;

Inadequate mechanisms for controlling and planning activities;

Lack of experience in the management of large works contracts.

IX - PROJECT MONITORING

Internal Monitoring

During the course of the eight years of the Project Supervision Missions averaged two per year.

These Missions were extremely useful in that they helped to idenitify and overcome some of the obstaclesencountered during Project implementation. helped in harmonizing decisions (strategic and operational), andmade a significant contribution to improving Project performance.

External Monitoring - Auditing (Financial and Technical)

All planned audits were carried out annually, and in accordance with Bank norms and procedures. Thephysical and financial data were verified and tested without special comment, as also for the existing recordssystem.

From 20 to 31 March 2000 a Mission came to evaluate the quality of works and supervision of execution Ofworks on the three stretches of, road. This evaluation was carried out by an expert from the National CivilEngineering Laboratory in Lisbon, Portugal, LNEC.

VIII -Experience of implementation and lessons learnt

In terms of lessons learnt we mention, among others, the following: (a) Technical Assistance should be betterincorporated in order to allow the inclusion of local personnel and the effective transfer of expertise; (b) thereshould be more support for procurement activities, in cases where national expertise is still insufficient; (c) theBank should reduce the alterations/ substitutions in teams responsible for the preparation and supervision ofthe Project, mainly as refers to the Task Manager, since such changes generally bring in their wake negativeconsequences for implementation and dialogue with the Bank; (d) the Implemenitation Manual should bedrawn up before the Project becomes effective; (e) the current state of transport systems will mean continuedsignificant investment to ensure reasonable recuperation, and (f) it is possible to develop and implementprojects of this kind based on local technical personnel with timely support and technical assistance; (g) theprocess of recovery of the special account should be previously agreed with the borrower, before the start, soas to avoid possible bottlenecks in the event of invoices towards the end of the Project.

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IX - Project Sustainability

As seen above, the TRP Project in tandem with the IRE Project has had a significant impact on the country,with implications for future development. There is no doubt that it will be a benchmark, for the changesbrought about in the legal sector of transportation (ref. the list of decrees already approved or beingapproved).

New concepts were introduced, partly with the implementation of the Project, such as: (a) the concept ofcost-recovery; (b) decentralization of decisions on port tariffs: and (c) private sector participation in theimplementation of the Road Fund and in roads maintenance.

It should be noted, however, that if finiance is niot made available for works implementation with complete biddocumentation, there is the risk that they will become outdated and in need of extensive revislion. If such asitLation came about it would have a negative impact on the viability of investment made in the stldies for theproject.

The sustainability of roads rehabilitation works carried out under the ambit of the project, which representedan investment of the order of USD32.18 million (project plus works plus supervision), i e. around 75.7% ofthe total value of the credit, is based on the immediate implementation of a regular mainteniance policy for theparts already rehabilitated, assumed to be financed through the Roads Fund.

Institutional strengthening studies should be applied as proposed.

x - CONCLUSIONS

It can be concluded that the objectives of the Project corresponded to the priorities defined by the Govemmentat the time. In addition, the structural method, followed gradually anld flexibly, meant that the needs of thesector could be met.

The key questions in relation to Project implementation were identified and sufficiently pondered, with theadoption of measures to minimize the negative effects of the advanced state of disrepair of most of thetransport infrastructures targeted for Project intervenitions.

Other risk vectors were previously identified and solutions found. cither by thle Bank or by the Govermnent,and adjusted to the realities of the Project.

In the absence of a Project Implementation Manual defining from the outset the procedures to be followed inthe management of different contracts and the quantities of information produced, a functional model ofproject management was adopted which answered the needs.

We feel that the objectives of the Project were attained, given that besides the phvsical improvements seen inthe radical change in the physical structure of the entities involved in the Project, it was possible, with the jointdevelopment of the Project, to introduce new ideas linked to the reform of the transport sector, includingroads.

It should also be noted that the political and social climate for sectoral reform improved considerably due tothe influence of the IRE and TRP Projects. and the Govemrment took irreversible positive measures byadopting new laws and decrees.

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The unstable situation in the country, the lack of experience in the ways of the Bank and lack of knowledge ofEnglish among local staff, together with the inefficient transfer of knowledge from the consultants working inthe Project Coordination Unit were, amnong others, placed significanlt limitations on performance.

However, such constraints did not prevent the Project from developing to a level that may be consideredacceptable, taking into account the factors mentioned above, and the Project concluded successfully.

(b) Cofinanciers:None

(cO Other partners (.V'GOs/private sector):N/A

10. Additional Information

None

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Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome IImpact Indicators:

a -dicatorM trix Projected in last PS -= Actual/Latest-Estimate

Local contractors involved in road RF established and support provided to local About 15 local contractors expected to berehabilitation, and in maintenance activities, contractors involved in road maintenance programs inunder Road Fund financing. 2001.

Prepare National Transport Strategy (NTS) NTS has been completed and adopted by the Discussions on-going in the Government toGovernment. National seminar held in implement recommendations of the strategyNovember, 1999 with participation from bothpublic and private sectors.

Provide technical assistance to Luanda port TA to Port of Luanda completed. The Credit Study recommendations in the process offinanced computers, software and training as being implemented.identified in the study recommendation.

Provide training to implementing agencies Courses in English language training Completedand the PIU courses organized; seminar organized for

INEA, and MINTRANS

Road Fund restructured and operational by Study to restructure INEA completed and Government is in the process of

end of project; US$1.5 million deposited in the RF implementing recommendations of the study

Strengthen Institutional capacity of TA study for institutional strengthening of the The restructuring of the Ministry of TransportMINTRANS Bureau of Studies, Planning and Statistics of is on-going in light of the study

the MINTRANS completed recommendations.

Strengthen institutional capacity of INEA INEA is in the process of being restructured On-goingwith the objective to transform itself into asmall unit focused on management, policyplanning and quality control.

Promote employment by supporting labor Routine maintenance program is expected to On-goingintensive maintenance programs provide employment to about 1000 to 1200

I unskilled workers.

Output Indicators:

Incicato,lMatrix Projected in last PSR -X ActualatestEstimate

Rehabilitation of 83 km of roads in the Rehabilitation of three access roads to CompletedLuanda area by end of project; Luanda and the surrounding areas

completed successfully.

Rehabilitation of stretches of railway after 7500 sleepers procured; 3 engines Sleepers are in the process of being installedrailway sleepers received; rehabilitated

Improvement of Lobito, Luanda and Namibe Spare parts procured and installed; TA Completedports' operations. provided; equipment for two lighthouses of

Luanda port procured; installation of 15meter GRP tower-shore at Lagostas islandsand 39 meter metallic tower shore atPalmeirinhas; procurement of forklift trucks,electrical materials and divers material.

Rehabilitate road bridges Completed repair of 25 bridges with Completedinstallation of 948 meters of metallic bridges.

Eind of project

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Annex 2. Project Costs and Financing

Comparative Project Costs: Appraisal Estimate, Revised Estimate and Actual

Appraisal Revised ActualEstimate Estimate IDA Donors GOA Total (Ao of % of

Component n1,1 MilJon! (USI Million! (US$ Million) Apzraisal Revised

Road/Bridze Rehabilitation 48.50 39.16 32.75 1.38 34.13 (.70 0.87Luanda Railways 6.90 0.43 0.25 0.25 0.04 0.58Ports 7.20 4.45 4.83 4.X3 0.67 1.09Istitutional Support 2.30 1.46 1.85 1.85 (.80 1.27

Total 64.90 45.50 39.69 0.00 1.38 41.06 0.63 .()9(0

Project Costs by Procurement Arrangements (Actual/latest Estimate)(US$ million equivalent)

Procurem ent Meth [d (1LExpenditure Category ICB NCB Other t2) N.B.F Total Cost1. Works 28.82 28.82

(26.88). (26.88).

2. Goods 4.91 0.15 5.06(4.91). (0.15). (5.06).

3. Services 7.18 7.18(7.18). 7_ 7.18).

4. Miscellaneous 0.57 0.57(0.57). (0.57).

Total 40.91 0.15 0.57 41.06(38.97). (0.15). (0.57). (39.69).

(1) Figures in parentheses are the amounts to be financed by the Bank Loan. All costs include contingencies.

(2) icludes civil works and goods to be procured through national shopping, consulting services, services

of contracted staff of the project management office, training, technical assistance services and incrementaloperating costs related to (i) managing the project; and (ii) re-lending prqject linds to local government umits.

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Project Financing by Component (in US$ million equivalent)

|-a- ; X .- . -. - - -

Roads and Bridges 32.90 12.30 3.30 32.75 1.38 99.5 11.2 0.0RehabilitationLuanda Railways 5.40 1.50 0.25 4.6 0.0Ports 0.40 (.8( 6.00 4.83 1207.5 0.0 0.0Institutional Support 2.30 1.85 80.4

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Annex 3: Economic Costs and Benefits

ECONONMC ANALYSIS (000 US$)

Luanda/Baya-wanm unarliana Thnk Rohunda da BoaksfMdo Total NetYear Cost Beneft Net Benefit Cost Benefit Net Benefi Cost Benefit Net Benefit Benefit

1998 1100 0 -1100 4230 0 -4230 2543 0 -2543 -78731999 2800 0 -2800 8560 0 -8560 3896 0 -3896 -152562000 298 2125 1827 3257 7688 4421 1423 2188 765 70122001 300 2168 1868 1124 7841 6717 550 2231 1681 1C2fE2002 300 2211 1911 1124 7998 6874 550 2276 1726 105112003 300 2255 1955 1124 8158 7034 550 2321 1771 107602004 300 2300 2000 1124 8321 7197 550 2368 1818 110152005 300 2346 2046 1124 8488 7364 550 2415 1865 112752006 300 2393 2093 1124 8657 7533 550 2463 1913 115402007 300 2441 2141 1124 8831 7707 550 2513 1963 118102008 300 2490 2190 1124 9007 7883 550 2563 2013 120862009 300 2540 2240 1124 9187 8063 550 2614 2064 123672010 300 2590 2290 1124 9371 8247 550 2667 2117 126542011 300 2642 2342 1124 9558 8434 550 2720 2170 129462012 300 2695 2395 1124 9750 8625 550 2774 2224 132452013 300 2749 2449 1124 9945 8821 550 2830 2280 135492014 300 2804 2504 1124 10143 9019 550 2886 2336 138602015 300 2860 2560 1124 10346 92g2 550 2944 2394 141762016 300 2917 2617 1124 10553 9429 550 3003 2453 144992017 300 2976 2676 1124 10764 9640 550 3063 2513 14829

ERR 44% 43/a6 23%o 38/o

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Annex 4. Bank Inputs

(a) Missions:

Stage of Project Cycle No. of Persons and Specialtl Performance Rating(e.g. 2 Economists, 1 FMS, clc.) Implementation Development

Month/Year Count Specialty Progress Objective

Identification/PreparationOctober, 91 4 TE,RE.PE,CE

AppraisalNegotiationFebruai7. 92 6 CE, TE, UE, FA, RE. PE

SulervisionNovember, 92 5 TE, RE. PE, FA, CE S UFebruary, 93 5 TE, RE, PE, FA, UE S UMay, 93 1 TE S UJanuary, 94 4 TE, FA, SE, CE S SMay, 94 4 TE, SE, CE,HE S SJuly, 94 4 TE. HE, FA, CE S SNovember, 94 3 TE, HE. CE U UFebruary, 95 4 TE,CE.TE.FA U UMay, 95 3 TE,CE. FA U UOctober, 95 3 FA, CE. TE U UJanuary, 96 1 FA S UJune, 96 2 FA, TE S SOctober, 96 2 PA, TE S U

December, 96 2 HE, FA S U

April, 97 4 HE, FA, CE,TE S UNovember, 97 1 HE S UApril, 98 2 HE, OA U SNovember, 98 2 HE, FA S UMarch, 99 2 HE, OA S SOctober, 99 2 HE, FA S S

ICRMarch, 2000 3 HE, OA. FA S S

TE: Transport Economist; PE: Port Engineer: RE: Railway Engineer; CE: Civil Engineer, SE: SanitaryEngineer; FA: Financial Analyst; UE: Urban Economist; HE Highway Engineer: OA: Operations Analyst

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(b) Staff:

Stage of ProJect Cycle Actua/Latst Estirnate:No. Staffweeks i$: (,O)

Identification/Preparation 153 337.0Appraisal/Negotiation 70 167.)Supervision 300 752.0ICR 6 141)Total 529 1270.)

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Annex 5. Ratings for Achievement of Objectives/Outputs of Components

(H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable)

RatingEl Macro policies O ) H O SU Adf O N ON. IO Sector Policies C H 0 SlJ 0 Adl O N O N IO Physical O H 0 SU (; Ad O N O N IO Financial C) H OSU OAl ON ON'O Institutional Development O H 0 Sl 0 Ad 0 N 0 Ni/O Environmental O H O SU Af 0 N 0 N.

SocialO Poverty Reduction OH 0 SU AI 0 N 0 N.i Gender O. H O SU( Adl O N 0 NI3 Other (Please specify) f H 0n SV ' Ad 0 N O N. l

l Private sector development C H 0 SU 0 M0 N (9V N.!E Public sector management K H 0 SU 0 Ad 0 N O6 NInI Other (Please specif O H 0 SJ ' Ad ON N :..

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Annex 6. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=High10 Unsatisfactory)

6.1 Bankperformance Rating

O Lending 0 HS OS OU O U U(rF Supervision O HS * S 0 U C fUK] Overall O HS * S O U C 1(1

6.2 Borrowerperformance Rating

K Preparation O HS * S O U C fluG ;overnment implementation perjormance O H * S O U s ITflUImplementation agencyperformance IS * 0C U C [[U

1 Overall 7 HS *S 0 J ( f-IU

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Annex 7. List of Supporting Documents

Project, Staff Appraisal Report. August 10. 1992, The World Bank

Memorandum and Recommendation of the President of the International Bank for Reconstructionand Development to the Executive Directors on an Proposed Credit of SDR30.0 Million to thePeople's Republic of Angola for a Transport Recover! Project, The World Bank

Credit Number 24200 ANG. Development Credit Agreemenit between thePeople's Republic ofAngola and the Intemational Development Association. The World Bank

Assessment of Progress anid Quality of Road Works, Luanda, March, 2000

Technical assistance for the Institutional Strengthening of INEA and to the Restructuring of RoadFund Final Report (in PortLugese), Angola. Jtne 2000

Technical Assistance for the Institutionial Strengthening of the Bureau of Studies. Planning andStatistics of the Ministry of Transport (in Portugese), Angola, Julne 2000.

Transport Recovery Project Supervision Reports including Impementation Summaries (Fonns 590)or Project Status Reports (PSR) from 1993 to 2000, The World Bank

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