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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 15787

IMPLEMENTATION COMPLETION REPORT

PHILIPPINES

SECOND RURAL ROADS IMPROVEMENT PROJECT(LOAN 2716-PH)

JUNE 18, 1996

Agriculture and Environment Operations Division

Country Department IEast Asia and Pacific Region

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

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CURRENCY EQUIVALENTS

Currency Unit: Philippine Peso (P)

USS 1.00 = P 18.70 (at appraisal in 1986)P 26.50 (at completion in 1995)

WEIGHTS AND MEASURES

Metric System

FISCAL YEAR

Januar) 1 to December 31

ABBREVIATIONS AND ACRONYMS

ADB - Asian Development BankDILG - Department of Interior and Local Government (former

Ministry of Local Government and Community Development)DPWH - Department of Public Works and Highways (former Ministry

of Public Works)GOP - Government of the PhilippinesICR - Implementation Completion ReportSRRIP - Second Rural Roads Improvement ProjectRRIP - (first) Rural Roads Improvement ProjectDAR - Department of Agrarian ReformPMO - Project Management OfficePEO - Provincial Engineer's OfficeLGU - Local Government UnitICB - International Competitive BiddingNEDA - National Economic and Development AuthorityRMMM - Road Maintenance Management ManualGEMS - Guide to Equipment Management SystemsLBM - Labor-Based MethodsEIRR - Economic Internal Rate of ReturnWAADT - Weighted Annual Average Daily Traffic

FOR OFFICLAL USE ONLY

Table of Contents

Preface .................................................... iEvaluation Summary ................................................... ii

Part I: Second Rural Roads Improvement Project Implementation Assessment

A. Statement/Evaluation of Objectives .................................................... 1B. Achievement of Objectives ................................................... 3C. Major Factors Affecting the Project .................................................... 6D. Project Sustainability ................................................... 7E. Bank Performance ................................................... 7F. Borrower Performance .................................................... 8G. Assessment of Outcome .................................................... 9H. Future Operation ................................................... 10I. Key Lessons Learned ................................................... II

Part II: Statistical Tables

Table 1: Summary of Assessments ................................................... 13Table 2: Related Bank Loans ................................................... 14Table 3: Project Timetable ................................................... 14Table 4: Loan Disbursements: Cumulative Estimated and Actual .............................................. 15Table 5: Key Indicators for Project Implementation ................................................... 15Table 6: Key Indicators for Project Operation ................................................... 17Table 7: Studies Included in the Project ................................................... 18Table 8: Project Costs ................................................... 19Table 9: Economic Costs and Benefits ................................................... 19Table 10: Status of Legal Covenants ................................................... 20Table I 1: Compliance with Operational Manual Statements ................................................... 21Table 12: Bank Resources: Staff Inputs ................................................... 21Table 13: Bank Resources: Missions ................................................... 22

AppendicesAppendix A: Completion Mission's Aide Memoire ................................................... 24Appendix B: Economic Impact Data from a Sample of DILG Roads ........................................... 28Appendix C: Economic Impact Data from a Sample of DPWH Roads ......................................... 38Appendix Dl: DPWH Contribution to the ICR ................................................... 41Appendix D2: DILG Contribution to the ICR ................................................... 48

Map IBRD 19287R

This document has a restricted distribution and may be used by recipients only in the performance of theiroficial duties. Its contents may not othcr-ise bc disclosed wiLhout World Bank authorization.


PHILIPPINES

SECOND RURAL ROADS IMPROVEMENT PROJECT (Loan 2716-PH)

Preface

This is the Implementation Completion Report (ICR) for the Second Rural RoadsImprovement Project in the Republic of the Philippines, for which Loan 2716-PH in theamount of US$ 82 million was approved on June 10, 1986 and made effective on October23, 1986.

The loan was closed on December 31, 1995, compared with the original closingdate of June 30, 1992. Final disbursement was made on May 6, 1996 and a balance ofUS$114,099.85 has been canceled as of that date.

The ICR was prepared by Mr. Marcelo J. Minc, Transport SpecialistlEconomistConsultant of EAI AE and reviewed by Mr. Jeffrey Gutman, Agriculture andEnvironment Division Chief and Mr. Walter Schwermer, Project Adviser. The borrowerprovided comments that are included as Appendix D to the ICR.

Preparation of this ICR was begun during the Bank's completion mission inFebruary 1996. It is based on material in the project file. The borrower contributed tothe preparation of the ICR by contributing views reflected in the mission's ICR,preparing its own evaluation of the project's execution, and commenting on the draftICR.

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PHILIPPINES


Evaluation Summary

Introduction

i. Before the 1 970s the Bank had financed rural roads in the Philippines as transportcomponents of irrigation, multipurpose and rural development projects. Centralgovernment agencies had been responsible for executing these road components. Duringthe late 1 970s there was a shift in government policy towards rural development anddecentralization of development responsibilities. The Government of the Philippines(GOP) planned to strengthen local government capabilities to plan, construct andmaintain rural roads, and to significantly increase its investments in farm-to-market andfeeder roads. To implement this plan, the GOP requested World Bank assistance infinancing a rural roads project.

ii. That project, the (first) Rural Roads Improvement Project (RRIP), was supportedby Loan 1860-PH. Its long-term objectives were to provide improved transport servicesto the rural population in order to stimulate agricultural production and increase ruralincomes. The RRIP experienced problems and delays, mainly due to the difficult fiscalsituation and political climate prevailing in the Philippines during most of the 1 980s.Also, some of the problems were due to expectations, that the provincial governments,with largely inexperienced and inadequately trained staff, would become capable ofassuming major responsibility for the rural road subsector in a relatively brief time. As aresult, transport services in the rural areas were improved but not to the extent expected,and the institutional goals were only partly achieved.

iii. The Second Rural Roads Improvement Project (SRRIP) originated under theRRIP, in which consultants undertook feasibility studies for rural road improvements in22 provinces. Based on these studies, which were completed in 1982, the AsianDevelopment Bank (ADB) agreed in 1983 to finance rural road improvements in nine ofthe provinces. The GOP requested the Bank to finance rural road improvements in theremaining thirteen provinces. During negotiations the GOP requested the inclusion of anadditional province. In addition the Ministry of Agrarian Reform (presently Departmentof Agrarian Reform (DAR)) had undertaken feasibility studies for a land settlementproject in 1981 and updated them in 1985. Since the rural roads component enjoyed thehighest priority in the GOP's regional planning, the Bank agreed to also include relatedrural roads in the SRRIP.

iv. One aspect of the project which requires clarification is the title which indicatesthat the roads to be constructed are "rural roads". The term rural roads is not preciselydefined anywhere in the Bank, but is generally taken to mean the lowest level of roads inthe network, essentially roads connecting villages to the secondary road system, orconnecting farm to markets. It does not normally include major roads in rural areas. The

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roads proposed for construction under the Department of Interior and Local Government(former Ministry of Local Government and Community Development) (DILG)component of this project were virtually all classified as provincial roads. The need wasaccurately defined, as these provincial roads needed upgrading and improvement beforeany connecting farm-to-market roads were constructed, but they were generally of ahigher classification than normally considered under rural road projects. The Departmentof Public Works and Highways (former Ministry of Public Works) (DPWH) roads weredesigned for the purposes of land settlement and as such were accurately described in theSAR as national and barangay roads, instead of the Bank's traditional "rural roads". Infact some of the DPWH barangay roads (e.g. Wao-Banisilan) appear to be candidates forreclassification to provincial or national highways.

Project Objectives and Description

v. The SRRIP continued the Bank's efforts, which began with the first RRIP. Theobjectives were to: (a) alleviate poverty in rural areas by providing farmers with accessto markets, thereby stimulating food production and employment opportunities; (b)provide the infrastructure required to support land settlement efforts; (c) facilitateprovision of health care and other services to the rural population; and (d) furtherstrengthen institution-building efforts in DILG and the provincial governments startedunder the RRIP. Conceptually the project had timely and appropriate goals: (1) ruraldevelopment and (2) decentralization through capacity building. Objectives (a), (b) and(c), which dealt with the first aspect, were transparent and project componentsspecifically responded to them. Performance indicators for objective (d) to strengtheninstitution building efforts in DILG and provincial governments were not clearlyspecified at appraisal, making it difficult to evaluate the success of this objective.

vi. To accomplish those objectives, the project consisted of two separate components:(a) rehabilitation, upgrading and improvement of about 750 km of high priority provincialroads, including bridges in the following 14 provinces: Abra, Agusan del Norte, Agusandel Sur, Bohol, Cagayan, Catanduanes, Davao del Sur, Ilocos Norte, Marinduque,Misamis Oriental Southern Leyte, Surigao del Sur, Surigao del Norte, and Samar. Thisproject component was implemented by DILG and the provincial governments; and (b)improvement of about 580 km of rural roads (national, provincial and barangay throughlabor-based methods (LBM)) including bridges in the following three settlement areas:Kabankalan, Sultan Kudarat-South Cotabato and Wao-Banisilan. This project componentwas implemented by DPWH.

Implementation Experience and Results

vii. There were various factors that adversely affected the SRRIP, delaying itsimplementation. These delays caused the loan to be closed three and half years later thanplanned at appraisal time, i.e., December 31, 1995 instead of June 30, 1992. The mainfactors were: (a) unusual typhoon and bad weather conditions in the project areas; (b)numerous peace and order problems in the project areas, especially in the land settlementareas under the DPWH component; (c) the 1986 revolution which caused majorinstitutional changes in implementation agencies; and (d) the 1991 economic crisis,following the middle east crisis of 1990-1991, which caused excessive cost increases in

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construction materials. All of these factors made contractors reduce or completely stopconstruction activities for several months at a time.

viii. Despite the numerous difficulties, SRRIP achieved most of the originalobjectives. Roads built/rehabilitated in rural areas: (a) provided farmers access tomarkets, stimulating food production and employment opportunities; (b) provided theinfrastructure required to support land settlement efforts; (c) facilitated the provision ofhealth care, education and other services to the rural population. Recording the objectiveto strengthen institution-building efforts in DILG and the provincial governments therewere no specific targets and it was difficult to evaluate the success of this objective.However, provincial engineers' offices were strengthened by the provision ofmaintenance equipment, workshops, office equipment, and training.

ix. Total cost of the project was estimated to be US$ 127.5 million, or about 4.3%higher than the US$ 122.2 million estimated at appraisal. In order to assess the economicimpact of the roads built/rehabilitated, DILG carried out impact studies in five provinces:Agusan del Norte, Davao del Sur, Marinduque, Surigao del Norte and Surigao del Sur.Economic internal rates of return (EIRR) were re-estimated in four of the studies, rangingfrom 1 1% to 29% as compared with 17% to 18%, estimated at appraisal for the sameroads. For all of the 5 roads where the impact study was conducted, the study showedthat: (a) agricultural production increased, also due to the increase of visits to the areas ofinfluence by agricultural extension workers (DAR staff, provision of fertilizer and banks);(b) travel times to the provincial connectors were substantially reduced; (c) access to theareas of influence increased to year-round; (d) traffic substantially increased; and (e)transportation costs to the main road were reduced.

x. The Bank's performance at appraisal was partially satisfactory. From the positiveside, there was: (a) commitment of the GOP, the implementing agencies, and thebeneficiaries to the project; and (b) incentives for stakeholders to sustain the project.Since the appraisal mission took place in July 1985, and negotiations shortly after the1986 revolution, it is surprising that the Bank did not revisit the institutional aspects ofthe SRRIP, and did not include it as a risk for project performnance. Bank's performanceduring supervision was also partially satisfactory, even when considering the difficultproject launching period. Project implementation progress, and the lack of it, wereadequately reported, and problems were identified and assessed. Proper advice was givento DILG and DPWH, but still delays kept occurring. The working relationship betweenthe Bank, GOP, and implementing agencies was very good. However, the DILG andDPWH noted that the Bank was slow giving clearances, and that more Bank fieldsupervision during the SRRIP's initial implementation phase, would have helped to avoiddelays.

Summary of Findings, Future Operations and Key Lessons Learned

xi. Because of the nature of the civil works component of the SRRIP, sustainabilitydepends mainly on the maintenance that will be performed to the roads and bridgesbuilt/rehabilitated. The Bank's completion mission verified the commitment of theProvincial Engineer's Offices (PEOs) to conduct adequate maintenance activities, and theexistence of sufficient funds to do them. Experience in other countries and from previous

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projects in Philippines, however, raise concerns about maintenance and sustainabilitywithout specific project follow-up activities. Regarding the institutional capacitybuilding, the PEOs were the main beneficiaries of the project and are ready to assumeexpanded responsibilities. The only drawback is that the DILG SRRIP PMO, which wasalso trained during the project, is a temporary office and will be dismantled shortly afterthe project is completed. Also, on the successfully executed DPWH LBM sub-component, there seem to be no institutional vestiges of it, four years after completion.

xii. Regarding future operations, the Bank together with NEDA, DPWH and DILG isreviewing its strategy towards rural infrastructure, in order to support the GOP policy ofdevolving from the national government to the Local Government Units (LGUs), theprovision for the delivery of basic services and facilities, such as rural roads, watersupply, etc. Issues under discussion are: (a) institutional responsibilities for the provisionof rural infrastructure including roles of central versus local governments; (b) appropriatecost recovery policy for investment and for operation and maintenance; (c) strategies forcommunity participation; (d) application of appropriate technology and quality controlprocurement methods; (e) responsibilities for maintenance; (f) methods of planning,decision-making and appraisal of locally proposed projects; and (g) multisectoral versussectoral project design.

xiii. The lessons learned from SRRIP's preparation and appraisal experience, includethe need to: (a) designate a nucleus within the implementing agency with highly qualifiedstaff to be responsible for planning and managing the implementation of the project. Thiscould substantially minimize the institutional risks to a project; (b) establish clear andrealistic capacity building goals for the implementing agencies; (c) assure up-front thecommitment of the implementing agencies to dedicate funds to maintenance of thebuilt/rehabilitated roads; and (d) encourage local communities to participate in the designof the project.

xiv. Summarizing, among the lessons learned that could be drawn from SRRIP'simplementation, there is a need to: (a) improve the pre-qualification process by making itmore rigorous and transparent. This would reduce contract terminations and recisions,unnecessary delays and project costs; (b) speed up clearances by the Bank anddisbursements by the borrower; (c) improve Bank supervision during the implementationstage; (d) engage the services of an independent technical consultant to assure qualitycontrol in project performance; (e) develop more specific interventions to ensure adequatemaintenance and project sustainability; and (f) avoid including projects in remote areas ofthe country where security risks limit adequate supervision.


PHILIPPINES


A. Statement/Evaluation of Objectives

1. Prior Bank Involvement. Before the 1 970s the Bank had financed rural roads inthe Philippines as transport components of irrigation, multipurpose and rural developmentprojects. Central government agencies had been responsible for executing these roadcomponents. During the late 1 970s there was a shift in government policy towards ruraldevelopment and decentralization of development responsibilities. The Government ofthe Philippines (GOP) planned to strengthen local government capabilities to plan,construct and maintain rural roads, and to significantly increase its investments in farm-to-market and feeder roads. To implement this plan, the GOP requested World Bankassistance in financing a rural roads project.

2. That project became loan 1 860-PH: (first) Rural Roads Improvement Project(RRIP). Its long-term objectives were to provide improved transport services to the ruralpopulation in order to stimulate agricultural production and increase rural incomes. Theshort-term objectives were: (a) to reconstruct, rehabilitate and maintain priority ruralroads, and (b) to strengthen the capacity of provincial highway authorities to plan, design,administer, and execute rural roads programs and to maintain their rural road networkunder the overall direction of the Department of Local Government (DLG), (currentlyDepartment of Interior and Local Government (DILG)). The RRIP had threecomponents: (a) construction and maintenance of rural roads, (b) construction andimprovement of a national road, and (c) technical assistance to the Department ofTransportation and Communications (DOTC) and to the National Economic andDevelopment Authority (NEDA) for transport planning.

3. The RRIP experienced numerous problems and delays, mainly due to the difficultfiscal situation and political climate prevailing in the Philippines during most of the1980s. Also, some of the problems were due to the project expectations, that theprovincial governments, with largely inexperienced and inadequately trained staff, wouldbecome capable of assuming major responsibility for the rural road subsector in arelatively brief time. As a result, transport services in the rural areas were improved butnot to the extent expected, and the institutional goals were also only partly achieved.

4. The Second Rural Roads Improvement Project (SRRIP) originated under theRRIP, in which consultants undertook feasibility studies for rural road improvements in22 provinces. Based on these studies, which were completed in 1982, the AsianDevelopment Bank (ADB) agreed in 1983 to finance rural road improvements in nine ofthe provinces. The GOP requested the Bank to finance rural road improvements in the

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remaining thirteen provinces. During negotiations the GOP requested the inclusion of anadditional province. In addition the Ministry of Agrarian Reform (presently Departmentof Agrarian Reform (DAR)) had undertaken feasibility studies for a land settlementproject in 1981 and updated them in 1985. Since the rural roads component enjoyed thehighest priority in the GOP's regional planning, the Bank agreed to also include relatedrural roads in the SRRIP.

5. One aspect of the project which causes some confusion is the title which indicatesthat the roads to be constructed are "rural roads". The term rural roads is not preciselydefined anywhere in the Bank, but is generally taken to mean the lowest level of roads inthe network, essentially roads connecting villages to the secondary road system, orconnecting farm to markets. It does not normally include major roads in rural areas. Theroads proposed for construction under the DILG component of this project were virtuallyall classified as provincial roads. The need was accurately defined, as these provincialroads needed upgrading and improvement before any connecting farm to market roadswere constructed, but were generally of a higher classification than normally consideredunder rural road projects. The DPWH roads were for the purposes of land settlement andsuch were accurately described in the SAR as national and barangay road, again notnormal Bank "rural road". In fact some of the DPWH barangay roads (e.g. Wao-Banisilan) appear to be candidates for reclassification to provincial or national highways.

6. Statement of Objectives. The SRRIP continued the Bank's efforts, which beganwith the first RRIP. The objectives were to: (a) alleviate poverty in rural areas byproviding farmers with easy access to markets, thereby stimulating food production andemployment opportunities; (b) provide the infrastructure required to support landsettlement efforts; (c) facilitate provision of health care and other services to the ruralpopulation; and (d) further strengthen institution-building efforts in DILG and theprovincial governments started under the RRIP.

7. To accomplish those objectives, the project consisted of two separate components:(a) rehabilitation, upgrading and improvement of about 750 km of high priority provincialroads, including bridges in the following 14 provinces: Abra, Agusan del Norte, Agusandel Sur, Bohol, Cagayan, Catanduanes, Davao del Sur, Ilocos Norte, Marinduque,Misamis Oriental Southern Leyte, Surigao del Sur, Surigao del Norte, and Samar. Thisproject component was implemented by DILG and the provincial governments; and (b)improvement of about 580 km of rural roads (national, provincial and barangay throughLBM) including bridges in the settlement areas of Kabankalan, Sultan Kudarat-SouthCotabato and Wao-Banisilan. This project component was implemented by DPWH.

8. Specifically, the DILG project component covering 14 provinces comprised: (a)rehabilitation, upgrading and spot improvement of about 750 km of high priorityprovincial roads; (b) provision of road maintenance equipment, construction ofmechanical workshops and quality control laboratories, and procurement of workshop,laboratories, and office equipment and tools; (c) consultant services for detailedengineering and road construction supervision of the above roads; (d) technical assistance

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to DILG and the provincial road authorities to improve their capability to implement theproject, to prepare feasibility studies for an additional 10 provinces and to train localstaff; and (e) overseas training and special courses and seminars for senior staff selectedfrom DILG and the 14 project provinces.

9. The DPWH project component covered the three settlement areas and consistedof: (a) improvement of about 80 km of national roads, 220 km of provincial roads andabout 280 km of barangay roads; (b) provision of road maintenance equipment to enableDPWH and provincial governments to maintain the above roads; (c) consultant servicesfor detailed engineering and road construction supervision of the above roads; and (d)technical assistance to DPWH to assist in implementing road construction by laborintensive methods and to provide on-the-job training for local supervisory staff andoverseas study tours for senior staff. The barangay roads sub-component was executedthrough Labor Based Methods (LBM). This approach was selected because: (a) itprovides greater employment opportunities than would machine intensive methods; (b) itdirectly involves the targeted communities; and (c) it enhances the capacity of localcommunities to carry on maintenance of the roads after the life of the project.

10. Evaluation of Objectives. Conceptually the SRRIP had timely and appropriategoals: (i) rural development and (ii) decentralization through capacity building.Objectives (a), (b) and (c) (para. 4), which dealt with the first aspect, were transparent andproject components specifically responded to them. Objective (d) (para. 4) to strengtheninstitution building efforts in DILG and provincial governments was not clearly specifiedat appraisal, making it difficult to evaluate the success of this component.

11. Attendance at training and overseas seminars are necessary but not sufficientcondition to strengthen institution building efforts. It is important that those courses andseminars be part of a plan to create or improve the ability of an agency to plan andmanage the implementation of projects. Therefore, there should be a commitment fromthe agency to designate the staff to be part of this effort. This recommendation does notmean that the agency should massively hire technical staff to become an "engineeringfirm or contractor". The idea is that there should be an in-house, highly qualified nucleusthat could plan and control the tasks to be given to consultants, designers, constructionsupervisors, etc., who will be the ones that will actually implement the projects. Also,this would ensure the sustainability of the technical assistance programs

B. Achievement of Objectives

12. Despite the numerous difficulties (paras. 16, 17, 18), SRRIP achieved most of theoriginal objectives satisfactorily. A significant amount of rural roads were built, althoughin the case of the DILG program, a much lower total length was built than planned atappraisal. These roads (a) provided farmners access to markets, stimulating foodproduction and employment opportunities; (b) provided the infrastructure required tosupport land settlement efforts; and (c) facilitated the provision of health care, educationand other services to the rural population. The objective to strengthen institution-building

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efforts in DILG and the provincial governments was not clearly specified at appraisal. Asthere were no specific targets, it was difficult to evaluate the success of this component.However, provincial engineers' offices were strengthened by the provision ofmaintenance equipment, workshops, office equipment, and training.

13. Under the DILG part, civil works component, 773 kms of provincial roads weredesigned by local consultants and Provincial Engineering Offices (PEOs), in fourdifferent stages. Biading of 36 contracts was done in 1990, of which only 27 weresuccessfully awarded in 1991. The remaining 9 contracts were not awarded due to designproblems and/or bidding failures. At project completion, 463 kms of roads and 54bridges with combined length 1,968 linear meters were built. There are still tworemaining contracts in Samar Province which were delayed due to inclement weather, butthese will be completed by June 1996. Five workshops and quality laboratories indifferent provinces were completed. Thirty school-type buildings which served as theengineer's offices, were turned over to the local authorities.

14. There appear to have been two main reasons for the reduction of the DILG roadconstruction program from the 773 kms planned at appraisal to the 463 completed. Theyare the unit cost per km and the change in disbursement percentage by the Bank.Regarding the unit cost per km, at appraisal it was planned to construct the 773 km forUS$ 51,500 base plus 42% contingencies, or an average of US$ 73,300 per km. In factthe 463 km cost US$ 53.4 million or US$ 114,000/km. The difference was not primarilydue to overruns on the quantities in the contracts, but to low cost estimates at thefeasibility study stage. Bank policy usually requires that detailed engineering for "major"road works be substantially completed at appraisal, but for this project as is standardpractice with "rural" roads, detailed engineering was carried out as part of projectexecution, and the targets do not appear to have been formally revised as a result of thelater more precise cost estimates.

15. The higher cost per km was affected by the conditions of peace and order underwhich the construction of many of the roads took place. Such problems do not lendthemselves to solutions by the normal process of competitive bidding and contractingassumed for Bank procurement. Several contractors found themselves unable to carry onunder theses dangerous conditions (some experienced harassment and equipment wasburned), and the rate of contract terminations by mutual consent was high. Rebiddinginevitably delayed project progress, and gave rise to higher prices to cover such risks aswell as the normal inflation of prices. The completion mission would suggest that if thegovernment cannot assure the safety and freedom of contractors from harassment, that theBank consider whether its normal procurement guidelines are appropriate for constructionin such areas.

16. The Middle East oil crisis occurred during execution of the project. Thissignificantly increased costs of all civil works, and the government did not encouragecontractors to apply price variation formulae. At the same time the government shortageof funds, reduced funding available to pay contractors (who were paying about 24%

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annual interest) faced severe financial difficulties and were unable to carry on. Topartially alleviate this, the implementing agencies and the Bank agreed to use the systemof direct payment to the contractors, rather than the reimbursement method which hadbeen the rule in the Philippines before then. At the same time, the Bank agreed to raisethe percentage of civil works contracts financed under the loan from 64% to 75%following the oil crisis. This assisted the cash flow situation but the higher percentageresulted in a reduced number of kms which could be constructed for the available Bankfunding.

17. Under the equipment component, 270 units of various maintenance equipmentwere procured through international competitive bidding (ICB), and workshop tools,surveying and office equipment were procured for the PEOs. Under the consultancycomponent, seven local firms were hired to provide detailed engineering services. Alsothe PEOs of fourteen provinces were commissioned to undertake detailed engineering of192 kms of roads. Nine local firms were contracted by DILG to provide constructionsupervision services from 1991 to 1995. Three local firms were hired to performfeasibility studies in 22 provinces, of which 950 kms found feasible were packaged andsubmitted to NEDA in 1994, for consideration for future Bank financing. Also the DILGSRRIP PMO contracted an expatriate coordinating consultant (in joint venture with alocal firm), which proved to be essential for the successful completion of the project.

18. Under the technical assistance component, the coordinating consultant assistednot only in the management and implementation supervision of the civil workscomponent, but also in improving different guidelines developed during the RRIP,including the Road Maintenance Management Manual (RMMM) and the Guide toEquipment and Management Systems (GEMS). Additionally, a training program wasdeveloped and carried out including overseas seminars, local road maintenance andequipment management courses and hands-on training. However the DILG SRRIP PMO,which was also trained during the project, is a temporary office and will be dismantledshortly after the project is completed.

19. The fourth stage of detailed engineering was commissioned to be undertaken bythe PEOs of the 14 provinces included under the project, in 1991. With the assistance ofthe DILG SRRIP PMO and the coordinating consultant, the PEOs were able to completedesigns and draft tender documents for 17 contracts covering 192 kms of road. However,they could not be implemented under SRRIP due to limited loan funds and the inabilityof the GOP to wholly finance the projects. DILG is hoping to implement these deferredcivil works projects under a future Bank loan.

20. The DPWH component for national and provincial roads was 98% built at projectcompletion. Kabankalan-Tapi national road, Bantayan-Tabugon-Inapoy provincial roadand Tabugon-Tapy provincial road, all in the Kabankalan settlement area, NegrosOccidental were all completed, after long delays, in August 1995, five years after theconstruction contract was first awarded. Those delays were caused by bad weather,financial, and peace and order problems. This situation was typical of the project

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components in the land settlement areas. Projects in the Sultan Kudarat area werecompleted and turned over to the authorities in 1993. In this case delays were a result ofdesign deficiencies in estimating the quantities of materials. Projects in the Wao-Banisilan settlement area were 96% completed at the time when this completion reportwas prepared. The road Libungan-Wao-Maramag is of regional importance because itprovides a shorter alternative to the existing links between cities in Southern Mindanao(Davao, General Santos and Cotabato City) and Cagayan de Oro in the North. Therewere also delays in this project area due to the problems mentioned above.

21. The DPWH sub-components for barangay roads executed through LBM weresuccessfully completed in 1991. The positive results of the LBM component include: (a)the actual average cost per kilometer was about $13,800, lower than $15,700/kmestimated at appraisal;' (b) 450,000 workdays were created by the LBM units with manyunskilled workers benefiting from transfer of skills in such fields as surveying,concreting, masonry, repair of vehicles, bookkeeping, etc.; and (c) others benefitedindirectly including small traders, store keepers, blacksmiths and transport operators.Among the aspects that could have been improved, the appraisal report called formaintenance after the LBM roads were completed, but there were no identified amountsfor this operation, neither was provision made under budget releases for individual roadconstruction. Furthermore, while national and provincial roads were provided with atwelve-month warranty, no such consideration was afforded for LBM barangay roads.

22. Total cost of the project was estimated to be US$ 127.5 million, or about 4.3%higher than the US$ 122.2 million estimated at appraisal. Average actual cost per km forthe DILG component was US$ 114,000 as compared to US$ 73,300 planned at appraisal.For the DPWH component, average actual cost was US$ 79,000/km as compared to US$48,000/km estimated at appraisal. But, as mentioned in para. 19, the Bank agreed toeliminate the fourth-year program of the DILG component, for implementation under theSRRIP, in order to keep costs within the amount established at appraisal.

C. Major Factors Affecting the Project

23. There were various factors that adversely affected the SRRIP, delaying theimplementation of it. These delays caused the loan to be closed three and half years laterthan planned at appraisal time, December 31, 1995 instead of June 30, 1992. The mainfactors were: (a) unusual typhoon and bad weather conditions in the project areas; (b)numerous peace and order problems in the project areas, especially in the land settlementareas under the DPWVvH component; (c) the 1986 EDSA revolution caused majorinstitutional changes in implementation agencies; and (d) the 1991 economic crisis,following the Middle East crisis of 1990-1991, which caused excessive cost increases inconstruction materials and limited budget outlays to pay contractors. All of these factorsmade contractors reduce or completely stop construction activities for several months ata time.

1 These costs are not directly comparable with those in para 22, because the standards are different.

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24. There were alsofactors subject to implementing agency control including: (a)numerous management changes in the implementing agencies SRRIP PMOs, seven PMODirectors for DPWH and five for DILG; (b) cumbersome and non-transparent pre-qualification and bidding practices; and (b) slow procurement procedures anddisbursements.

25. A number of factors particularly affected the DPWH land settlement program: (a)the remote and hostile locations of projects made them unattractive to bidders toparticipate; (b) the size of contracts were insufficient to attract major companies, evenwith the prospect of being awarded more than one; (c) inadequate competition admittedless competent contractors who ordinarily would not have pre-qualified; (d) the Gulf warafter-effects on the economy bankrupted some of the smaller contractors; and (e) poor bidpresentation by some contractors, e.g. failure to fully assess prevailing field conditionsresulted in under-pricing of general items such as mobilization and camp establishment,which in turn initiated claims for bad weather, poor accessibility, intimidation, etc.Unfortunately, the difficult access to the land settlement areas reflected negatively on thecredibility of the successfully completed LBM barangay roads sub-component. As anexample, in Kabankalan 60 kms of reconstructed LBM barangay roads were handed overto the authorities in 1991, but remained in isolation until 1995 when the provincial roadsconnecting them to the network were completed.

D. Project Sustainability

26. Because of the nature of the civil works component of the SRRIP, sustainabilitydepends mainly on the maintenance that will be performed to the roads and bridgesbuilt/rehabilitated. The Bank's completion mission verified the commitment of the PEOsto conduct adequate maintenance activities, and the existence of sufficient funds to dothem. Experience in other countries and from previous projects in Philippines, however,raise concerns about maintenance and sustainability without specific project follow-upactivities. Regarding the institutional capacity building, the PEOs were the mainbeneficiaries of the project and are ready to assume expanded responsibilities. The onlydrawback is that the DILG SRRIP PMO, which was also trained during the project, is atemporary office and will be dismantled shortly after the project is completed. Also, onthe successfully executed DPWH LBM sub-component, there seem to be no institutionalvestiges of it, four years after completion.

E. Bank Performance

27. Identification and Preparation. The Bank's performance during theidentification and preparation phases was partially satisfactory. SRRIP's goals wereconsistent with the GOP's priorities of rural development and decentralization throughcapacity building, and a follow-on operation to an existing one. SRRIP was preparedunder the RRIP. Some of the major relevant aspects of project preparation (technical,economic, financial, environmental, and sociological) were covered adequately.However, the institutional aspect was too optimistic considering the difficult political

- 8 -

prevailing situation in the mid 1980s. Strangely, it seems to be that some of the badexperiences occurring in the on-going RRIP were not taken into account when designingthe SRRIP. For example, ambitious expectations that projects in remote and hostile areascould be carried out by inexperienced entities, without dedicated supervision.

28. Appraisal. In general, it could be said that Bank's performance at appraisal wasalso only partially satisfactory. From the positive side, there was: (a) commitment of theGOP, the implementing agencies, and the beneficiaries to the project; and (b) incentivesfor stakeholders to sustain the project. The only project risks assessed during appraisalwere: (a) possible cost overruns for the civil works component; and (b) the lack ofadequate maintenance after construction. Risk (b) was appropriately identified but therewere neither remedies nor maintenance funds in place to avoid the lack of maintenanceafter project completion. This was totally left to the individual PEOs.

29. Since the appraisal mission took place in July 1985, and negotiations shortly afterthe 1986 EDSA revolution, it is surprising that the Bank did not revisit the institutionalaspects of the SRRIP, and did not include it as a risk for project performance. As a resultof the institutional changes occurring at that time, it took DILG three years to launch itsproject component. Other risks that should have been assessed at appraisal were relatedto the project performance in the land settlement areas due to: (a) prevailing peace andorder problems; and (b) remote project location made it unattractive for bidders toparticipate .

30. Supervision. Bank's performance during supervision was partially satisfactory,even when considering the difficult project launching period. Project implementationprogress, and the lack of it, were adequately reported, and problems were identified andassessed. Proper advice was given to DILG and DPWH, but still delays kept occurring.Bank staff showed flexibility in approving a modification to the project in 1989. Sincethe DILG component was three years behind schedule, and costs had increased 23% bythat time, the GOP requested the Bank to defer the implementation of the fourth stage ofthat component to keep costs close to the original loan allocation level. The Bankaccepted that request. The working relationship between the Bank, GOP, andimplementing agencies was very good. However, the DILG and DPWH noted that theBank was slow giving clearances, and that more Bank field supervision during theSRRIP's initial implementation phase, would have helped to avoid delays.

F. Borrower Performance

31. Borrower performance during preparation was satisfactory. They worked hand-in-hand with the Bank staff to prepare the project showing a great level of stakeholdercommitment (para. 20). Borrower performance during implementation was partiallysatisfactory notwithstanding the number of serious events that occurred (paras. 16, 17,18). During the first years of the SRRIP, implementing agencies were not staffedproperly, and not prepared to handle the large amount of contracts specified. As aconsequence, the project had enornous delays in the launching phase (three years for the

-9-

DILG and DPWH national and provincial roads components). Additionally, there werenumerous management changes in the implementing agencies SRRIP PMOs, seven PMODirectors for DPWH and five for DILG. This situation was slowly overcome, and theproject was back on track, especially after the DILG SRRIP PMO retained the services ofa coordinating consultant in 1991, who provided quality control in the management of thecivil works component, and was also instrumental in implementing the technicalassistance component. The performance of the DILG PMO also improved when theProject Manager was replaced, and support was given by new management within DILG.

32. The main concerns of the Bank's completion mission, regarding borrower'sperformance, which were shared by the implementing agencies were as follows: (a) someincompetent contractors were pre-qualified and won biddings, causing later on, a largenumber of contract terminations and recisions during the construction phase; (b)disbursements and payments to contractors were slow during periods of financial crisisand regularly during the start of each fiscal year; (c) quality of detailed engineering,construction and supervision was poor in several of the contracts; (d) as maintenancerequirements are intensive in these types of roads, it is critical that it will be performed toassure project sustainability; and (e) the contribution of the project to capacity building ofboth DILG and the provinces was difficult to measure.

33. It is important to mention, that during the latter part of the SRRIP, DILG andDPWH performed extremely well. Perhaps, this was partly due to the fact that PMODirectors did not change for the last three years, and they enjoyed full support from theirmanagement Also, implementation agencies' PMOs learned from experience, and actedpromptly to accomplish the objectives of the project. Unfortunately, since the PMOs areproject-based entities with a limited term, the capacity building objective could be boundto this project only.

G. Assessment of Outcome

34. Despite all the difficulties, the overall outcome of the SRRIP was satisfactory,assessing the achievement of the original project objectives: a) the roadsbuilt/rehabilitated in rural areas provided farmers access to markets, stimulating foodproduction and employment opportunities; b) provided the infrastructure required tosupport land settlement efforts; c) facilitated the provision of health care, education andother services to the rural population. The objective to strengthen institution buildingefforts in DILG and PEOs was not clearly specified at appraisal. As there were nospecific targets, it was difficult to evaluate the success of this component. HoweverPEOs were strengthened by the provision of maintenance equipment, workshops, officeequipment, and training.

35. In order to assess the economic impact of the roads built/rehabilitated, DILGcarried out impact studies in five provinces: Agusan del Norte, Davao del Sur,Marinduque, Surigao del Norte and Surigao del Sur. Economic internal rates of return(EIRR) were re-estimated in four of the studies, ranging from 1 1% to 29% as compared

- 10-

with 17% to 18%, estimated at appraisal for the same roads. In three cases the re-estimated EIRR were higher than the original ones. In the fourth case, the re-estimatedEIRR was 11% for the Cogon-Kapatagan road, due to the extremely difficult terrain andslopes with gradients of 12%, which resulted in higher than originally estimatedconstruction costs. However, in this road, traffic measured as weighted annual averagedaily traffic (WAADT), increased from 45 pack-horses and 12 motorized vehicleswithout the project, to 260 motorized vehicles with the project. Accessibility increasedfrom 60 days/year (4-wheel drive vehicles during the dry season only) to 365 days/year.Travel time from the beginning of the road to the provincial connector was reduced from12 hours for pack-horses and 2 hours for motorized vehicles, to 30 minutes for motorizedvehicles.

36. For all of the 5 roads where the impact studies were conducted, the studiesshowed that: (a) agricultural production increased, also due to the increase of visits to theareas of influence by agricultural extension workers (DAR staff, provision of fertilizerand banks); (b) travel times to the provincial connectors were substantially reduced; (c)access to the areas of influence increased to year-round; (d) also traffic substantiallyincreased; and (e) transportation costs to the main road were reduced. The analyses,however, assume the continued maintenance of the infrastructure which will requirefurther efforts. For this reason, sustainability is rated as "uncertain".

37. The positive impact of the road construction/rehabilitation in the area of influencecould be seen during the site inspection. The Bank's completion mission visited a sampleof both DPWH and DILG roads in Mindanao. As barangays and municipalities wereconnected to the main road network, population and economic activity increasedconsiderably. Some of the roads were previously trails and only accessible with packhorses and buffalo carts. Presently, the barangays and municipalities affected haveregular jeepney service, which allows the communities to carry agricultural production tothe markets. In some cases, transport costs were reduced by 60%-80%. Previous peaceand order problems were also eased after roads were completed. Additionally,communities expressed their willingness to participate more actively in the road's routinemaintenance.

H. Future Operation

38. Due to the nature of the type of roads and bridges built/rehabilitated during theSRRIP, adequate maintenance is essential to assure project sustainability and properfuture operation. The Bank's completion mission verified the commitment of the PEOsto conduct adequate maintenance activities, and the existence of sufficient funds toperform them, even though this was not specified at appraisal. However, there areconcerns that without specific follow-up support by the Bank or other donors to continuethe strengthening of these PEOs, maintenance may suffer and the infrastructure woulddeteriorate.

- I I -

39. The Bank together with NEDA, DPWH and DILG is reviewing its strategytowards rural infrastructure, in order to support the GOP policy of devolving from thenational government to the Local Governnent Units (LGUs), the provision for thedelivery of basic services and facilities, such as rural roads, water supply, etc. Issuesunder discussion are: (a) institutional responsibilities for the provision of ruralinfrastructure including roles of central versus local governments; (b) appropriate costrecovery policy for investment and for operation and maintenance; (c) strategies forcommunity participation; (d) application of appropriate technology and quality controlprocurement methods; (e) responsibilities for maintenance; (f) methods of planning,decision-making and appraisal of locally proposed projects; and (g) multisectoral versussectoral project design.

40. Since DILG has developed an internal capacity to design and implement ruralinfrastructure projects, it would be wise to use the momentum acquired during the lastfew years, to analyze the issues mentioned in the preceding paragraph. Theunderstanding of those issues could prove to be critical for the successful identificationand preparation of future rural infrastructure projects in the Philippines.

I. Key Lessons Learned

41. The lessons learned from SRRIP's preparation and appraisal experience, includethe need to: (a) designate a nucleus within the implementing agency with highly qualifiedstaff to be responsible for planning and managing the implementation of the project. Thiscould substantially minimize the institutional risks to a project; (b) establish clear andrealistic capacity building goals for the implementing agencies. With (a) and (b) in placeit will be easier, at least to identify the beneficiaries of the capacity building exercise, andmore probability that they will remain in-house, ensuring sustainability of the efforts; (c)assure up-front the commitment of the implementing agencies to dedicate funds tomaintenance of the built/rehabilitated roads; and (d) encourage local communities toparticipate in the design of the project.

42. Summarizing, among the lessons learned that could be drawn from SRRIP'simplementation, there is a need to: (a) improve the pre-qualification process by making itmore rigorous and transparent. This would reduce contract terminations and recisions,unnecessary delays and project costs; (b) speed up clearances by the Bank anddisbursements by the borrower; (c) improve Bank supervision during the implementationstage; (d) engage the services of an independent technical consultant to assure qualitycontrol in project performance; (e) develop more specific interventions to ensure adequatemaintenance and project sustainability; and (f) avoid including projects in remote areas ofthe country where security risks limit adequate supervision.

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PHILIPPINES

SECOND RURAL ROADS IMPROVEMENT PROJECT (Loan 2716-PH

Statistical Tables

Table 1: Summary of AssessmentsTable 2: Related Bank LoansTable 3: Project TimetableTable 4: Loan Disbursements: Cumulative Estimated and ActualTable 5: Key Indicators for Project ImplementationTable 6: Key Indicators for Project OperationTable 7: Studies Included in the ProjectTable 8A: Project CostsTable 8B: Project FinancingTable 9: Economic Costs and BenefitsTable 10: Status of Legal CovenantsTable 11: Compliance with Operational Manual StatementsTable 12: Bank Resources: Staff InputsTable 13: Bank Resources: Missions

- 13 -

IMPLEMENTATION COMPLETION REPORTPHILIPPINES

SECOND RURAL ROADS IMPROVEMENT PROJECT(LOAN 2716-PH)

Table 1: Summary of Assessments

A. Achievement of Objectives Substantial Partial Negligible Not applicable

Macro Policies 0 0 0 E

Sector Policies 0 0S] 0

Financial Objectives 0 0 0 E3

Institutional Development 0 0m 0 0

Physical Objectives 0E 0 0 0

Poverty Reduction 0 0 0 0

Gender Issues 0 0 0 E3

Other Social Objectives 0 0 0 0

Environmental Objectives 0 0 0 0

Public Sector Management 0 0 0 03

Private Sector Development 0 0 0 E0

Other (specify) 0 o 0 E

B. Proiect Sustainability Likely Unlikely Uncertain(/) (/) (/)

gb~~~~~~~~~~~~~~~~~~EHighly

C. Bank Performance satisfactory Satisfactory Deficient(/) (/) (1)

Identification 0 0

Preparation Assistance 0 01 0

Appraisal 0 01 0

Supervision 0 E3 0

HighlyD. Borrower Performance satisfactory Satisfactor Deficien

(/) (1) (1)

Preparation 0 0 0

Implementation I 01 0

Covenant Compliance 0 0 0

Operation (if applicable) 0 0

Hhly HihE. Assessment of Outcome satisfactoy Satisfactory Unsatisfat unsatisfactory

0 0HI 0 0

Partially Satisfactory

- 14 -

Table 2: Related Bank Loans

Year ofPurpose Approval Status

Loan Title

Preceding operations

Rural Roads Improvement to provide improved transport 1980 CompletedLn. 1860-PH services to the rural population 1988

in order to stimulateagricultural production andincrease rural incomes

Following operations

Earthquake Reconstruction reconstruction operations for 1991 OngoingLn. 3263-PH roads, bridges, housing,

irrigation, and hospitalsHighway Management to improve the quality of 1992 OngoingLn. 3430-PH vitally important arterial

highway network and therebyto reduce transport cost andincrease the country'seconomic competitiveness

Table 3: Project Timetable

Date actual/Steps in Project Cycle Date planned latest estimate

Identification (Issues Paper) 1984 1984PreparationAppraisal July 1985 July 15, 1985Negotiations March 1986 May 2, 1986Board presentation May 1986 June 10, 1986Signing June 19, 1986Effectiveness Sept. 17, 1986 October 23, 1986Project completion June 30, 1991 Dec. 31, 1995Loan Closing June 30, 1992 Dec. 31, 1995

- 15 -

Table 4: Loan Disbursements: Cumulative Estimated and Actual(US$ Millions)

FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96

Appraisal estimate 3.50 16.90 36.80 62.00 77.80 82.00 82.00 82.00 82.00 82.00Actual 5.58 5.69 13.70 21.40 30.52 49.21 65.67 75.15 81.89Actual as % of estimate 33% 16% 22% 28% 37% 60% 80% 92% 98%/aDate of final disbursement May 6, 1996

/a As of December 31, 1995

Table 5A: Key Indicators for Project ImplementationPhysical Accomplishment

Rural Roads Built/Rehabilitated by ProvinceDILG Component

Province Estimated at Appraisal Actual

Road Length Bridges Road Length Bridges

(kms.) (No./l.m.) (kms.) (No./l.m.)

Abra 14.9 4/395 14.7 4/378

Agusan del Norte 37.3 6/410 26.1 3/290

Agusan del Sur 62.2 17/381 42.1 4/146

Bohol 19.9 4/141 27.4 5/176

Catanduanes 68.4 3/40 69.7 2/44

Cagayan 73.9 14/455 27.7 7/177

Davao del Sur 88.1 13/407 89.7 13/383

Ilocos Norte 44.9 5/70 49.3 3/57

Marinduque 8.6 1/30 8.2 1/31

Samar /a 63.9 11/218 42.1 7/211Southern Leyte 11.5 1/10 11.8 1/16

Surigao del Norte 10.5 10/212 12.8 8/224

Surigao del Sur 19.0 3/45 18.0 2/47

Misamis Oriental and 225.0 40/1,200 28.1

Other Roads

Total 748.0 132/3,964 467.7 60/2,180

/a To be completed by December 1996.

- 16 -

Table 5B: Key Indicators for Project ImplementationPhysical Accomplishment

Rural Roads Built/Rehabilitated by Settlement AreaDPWH Component

Settlement Area Estimated at Appraisal Actual

Road Length Bridges Road Length Bridgesl ________________ (kms.) (No./l.m.) (kms.) (No./l.m.)Kabankalan 116.4 3/78 116.1 2/48Sultan Kudarat 179.5 21/395 162.1 19/437Wao-Banisilan 298.1 54/824 260.0 47/818

Total 594.0 78/1,297 538.2 68/1,303

Table 5C: Key Indicators for Project ImplementationPhysical Accomplishment

Other Civil WorksDILG Component

Civil Works Estimated at Appraisal Actual

Workshop and Quality 5 5 (Bohol, Catanduanes,Control Laboratories Ilocos Norte, Southern

Leyte, Surigao del Norte)

Turned-over School type 0 30buildings .__ _

- 17 -

Table 5D: Key Indicators for Project Implementation

List of Road Maintenance Equipment ProcuredDILG Component

Description Estimated at ActualAppraisal

Dump Truck 80 100Water truck 13 8Stake Truck 9 11Low Bed Trailer w/Prime Mover 9 7Motor Grader 23 32Loader Front End 1 7 19Road Roller 8 16Bulldozer 18 18Pick up Truck 37 51Asphalt Kettle 2 0Rock Crusher 0 4Wheel Excavator 0 4TOTAL 216 270

Table 6: Key Indicators for Project Operation

There were no indicators for project operation set at appraisal. Maintenance of the roadsbuilt/rehabilitated will be carried out by the PEOs.

- 18 -

Table 7: Studies Included in Project

Study Purpose as defined at appraisal Status Impact of_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _stu d y

Feasibility Identify rural roads projects in: Cavite Completed potential ofCamarines Norte & Sur, Masbate, future projectRomblon, Mindoro Oriental &Occidental and Palawan

Feasibility Identify rural roads projects in: Aklan, Completed potential ofEastern Samar, Davao Oriental, Lanao future projectdel Norte, Maguindanao and Tawi-Tawi

Feasibility Identify rural roads projects in: Kalinga Completed potential ofApayao, Isabela, Bataan, Aurora, future projectBenguet, Nueva Ecija, La Union,Pangasinan

Road Maintenance self-explanatory Completed improved theManagement approach ofManual conducting(RMMM) road/bridge

inventoriesGuide to Equipment self-explanatory Completed guide forManagement properSystems management(GEMS) system of

provincialequipmentpools

- 19 -

Table 8: Project Costs

Appraisal estimate (US$M) Actual/latest estimate (US$Local Foreign Local Foreign

Item costs costs Total costs costs Tot

Executive Agency DILGCivil works in 13 provinces 18.8 20.4 39.2 24.6 28.8Procurement of equipment 8.6 8.6 0.1 12.5Consultant services 3.9 1.7 5.6 0.1 6.9Technical assistance and training 0.4 1.0 1.4 4.3

Executive Agency DPWHCivil works in 3 settlement areas 9.6 10.4 20.0 19.6 22.9Procurement of equipment 1.3 1.3 1.7 _

Consultant services 1.3 0.9 2.1 3.3Technical assistance and training 0.2 0.6 0.8 0.5

Land Acquisition 6.9 6.9 2.2Total Base Cost 41.0 44.9 85.9 =Contingencies 17.5 18.8 36.3Total Project Costs 58.6 63.6 122.2 46.6 80.9 1

Table 9: Economic Costs and Benefits

Sample of Province/ Length EIRR (%) EIRR (%)Road Section (Kms.) Estimated at Re-estimated

Appraisal at CompletionAgusan del Norte/ 12.7 18 23Magallanes-Cabadbaran RoadSurigao del Sur/ 13.0 18 29Teleje-San Isidro-Matidum-Maitum RoadSurigao del Norte/ 12.8 18 23Mainit-Mansayao Road lDavao del Sur/ 26.7 17 11Cogon-Kapatagan

Table 10: Status of Legal Covenants

Loan/ Orl7in^l Revied Description of Covenant CommsentsLoan) Orig~~~~~~~~~inal RevisedCredit Covenant Ful lte Fulfill

Agrement Nuwer Text Reference Clas(es) .. Statu Date _ Date

LORd L 3.Ol(al 3.4.5.10 CD Carry out the projeetctith diligence end 1uVlefsentetion of the project wee marked byLffienriency and in accordance with the initial delays beyond the control of theappropriate practices Isplementing Agency, further delays incurred

becaus* of security situation in any areas, poorperformance of aon contractors, delayed payment

3.01 IbI 5.10 CD Carry our the project in accordanca with the isplementetion Prog,rams for both OWYN and DlOW1lplesentation Program have been revised t"odjust for delays incurred,

progress ie again felling behind program becauseof additional ieplemnt tinn delays

3.02 5.10 C Procur eent of goods, works and consultants Procedures within both DPI end DIW are very slowservices shall be governed by the provisions ofthe Loan Agreemsnt

4.01 E) 1 C Maintain racords and accounts *attdfactor chea to theayt esyloyad byOPUH and DW were raquasted and Implemeeted

4.011bl Ii) I CD Have the accounts, including the Special Account Generelly complied with, except that the aditsaudited. ar usually a little late

4.011b) (ii) I CD Furnish to the Bank not later than six oothe Generally coplied with, excegt that the re%¶tsafter the end of each fiscal year. a certified aer usually a little late. The audit repo9rfror.copy of the audit report the project Account, Special Account and Statement

of Expeniditures for 1994 is due an 6/30/95

4.01(b) (iii) I C Furnish to the Dank such other informtion Satisfactory, inforuation alway provided whenconcerning the audit as the Rank shall request requested

4.01(cl (l 1,3 C Mntain separate records and accounts reflecting Satisfactoryall -expenditures under the project

.01(Cl (ii) 1 HYD Retain all accounting records until at least one The project is still running and furtheryear after the final audit report withdrawals are expected. Records to date are

being recorded

4.015lc (iiil IS..9 C Enable the Bank to examine such records Satisfactory

4 .011 v I.R.lS cP Include suchl eparate accounts in the annual audit Generally czlied with Afttr lapses in 1992 acreport and also a separare opinion by the 19P) while the project accounts were reforettedauItorS In accordance with Dank instructions, the auditing

pgrocess is now beck on schedule. Audit Reportfor 1994 Is due on 6310/95

Bch 5(l3 Eel 5.10 CD DELW and OPWN to Implmet project in accordance Generally satisfactory,bucoetsaryPwith action plan a scehedule. always took longer than planned for unforeseen

reasons

Sch5E11 b) 5,10 C DIW and DPWH to apply satisfactory design Satifactorystandards

Bch 5S11(c) 510 CD Dla and DPOW to carry out 197 program agreed Political eents prevented a quick start to thewith Rank project the programm wee eventually completed

Bch 523 Eel S. 10 CP Borrower to furnish annual lint of roads and The late start to carrying out project workebridges to be improved/constructed resullted In 0sIte lists of roaid andi bridge

contracts being drawn up which were morked onbiultanneously, the annial program waebabedoned

Sech. l illSbI 5.10 C orrower to include roads annd bridges with ERR of Satisfactoryat least 125

Bch 5 13(IIEe 11 CP Rorrower to alloate maintenance funds In DPUS have adopted this system of maintenanceaccordance with U4K formula funding, but provinces are yet to comply

Sch 5i1 (bI 11 CP Borrower to adjust these funds for inflation Partly carried out, but funds for mintenance haveremained below desirable levels

Covenant Class

Status. C - Complied with I Accounts/auditCD I oyiance after Delay 2 Financial prformnce/generate revenue from beneficiariesPC - Rot Complied with 3 Flow and utilization of Project fundsSOON - Caopliance Expected in Reasonably Short Tim 4 Counterpart tundingCP - Complied with Partilly S Management aspects of the Project or of its executing agencymmD - Rot Yet Due 6 Environmental covenants

7 Involuntary resettlementI Indigenous peopleI Monitoring, review and reporting

10, Implemsentstion11 Sectoral or croms-sectoral budgetary or other resource allocation12 Sectoral or cross-sectoral regulatory/institutional action13 Other

- 21 -

Table 11: Compliance with Operational Manual Statements

No significant lack of compliance with an applicable Bank manual statement.

Table 12: Bank Resources: Staff Inputs

Planned Revised Actual

Stage of project cycle Weeks US$ Weeks US$ Weeks US$

Through appraisal N.A. N.A. 26.6 50,900

Appraisal - Board N.A. N.A. 33.7 61,291

Supervision N.A. N.A. 83.4 168,200

Completion 8.0 16.400

TOTAL

- 22 -

Table 13: Bank Resources: Missions

Performance ratingSpecialized Implemen- Develop-

Stage of project Month/ No. of staff skills tation ment Types ofI ~~~22cycle Year Persons represented' Status Objectives2 Problems

ThroughAppraisalAppraisal - Board 6/86Board - 10/86EffectivenessSupervision 5/87 2 1 delays

12/87 3 1 delays4/88 3 1 delays10/88 2 1 delays3/89 3 1 delays8/89 2 HE 2 1 DILG 3- year delay4/90 2 HE 2 16/90 1 HE 2 16/91 1 HE 2 1 peace and order5/92 3 HE, FA 2 1 peace and order12/92 3 HE, FA 2 19/93 2 HE, FA 2 23/94 4 HE, FA 2 25/95 1 HE S S

Final Supervision 2/96 2 HE, TE S S SatisfactoryCompletion 2/96 2 HE, TE S S Satisfactory

HE: Highway Engineer; FA: Financial Analyst; TE: Transport Economist

2 S: Satisfactory

1: No significant problems

2: Moderate problems

3: Major problems. Appropriate actions are being taken to address these problems

- 23 -


PHILIPPINES


Appendices

A: Completion Mission Aide Memoire

B: Economic Impact Data from DILG Roads

C: Economic Impact Data from DPWI Roads

D: Borrower Contribution to the ICR

Appendix APage 1

- 24 -

REPUBLIC OF THE PHILIPPINES


SECOND RURAL ROADS IMPROVEMENT PROJECT(Loan 2716-PH)

AIDE MEMOIRE

1. The Second Rural Roads Improvement Project, Loan 2716-PH was signedby the parties on June 1986 and declared effective on September 1986. The closing datewas originally planned for June 30, 1992. Due to a number of factors, external andinternal to the project management, the project implementation period was extended, andthe project closed officially after four extensions on December 31, 1995.

2. A World Bank mission consisting of Marcelo Minc, Team Leader(Transport Specialist/Economist) and Peter Long, Task Manager (Principal HighwayEngineer) visited the Philippines during February 12 - March 1, 1996 to solicit the viewsof the borrower and implementing agencies, to provide advice and support to thegovernment's efforts to make its own contribution to the ICR, and to collect additionaldata for the preparation of the ICR. During its stay the mission inspected a sample ofrural roads constructed under the project (Attachment 1). Mary Judd (CommunityDevelopment Specialist) accompanied the mission during the field trip, to obtain theviews of communities affected by the project and to assess their participation in its designand implementation.

3. The mission received excellent cooperation from the respective DILG andDPWH Project Management Offices (PMOs) and would like to express its appreciation toUndersecretary Edmundo Mir of DPWH and Assistant Secretary Yolanda de Leon ofDILG for the courtesy and collaboration extended to the mission. This aide-memoire setsout the mission's findings and agreements reached with DPWH and DILG at a wrap-upmeeting jointly chaired by Messrs. Director Baliamen Mamainte (DPWH PMO) and AlanMaliksi (DILG PMO) on February 28, 1996. Ms. Violeta Corpus and Anna Nolasco(Project Monitoring Staff, NEDA) also participated in the wrap-up meeting.

4. During the mission the objectives of the ICR were explained to the DPWHand DILG counterparts and discussions were held on the their draft ICR. The missionencouraged the officials to emphasize on: a) providing feedback from implementationexperience; and, b) ensuring that the lessons learned that are relevant to similar projectsare considered in the future rural roads strategies.

5. Project completion and construction supervision reports prepared by thevarious consultants were given to the ICR mission as follows: a) DPWH component:a. 1) Labor-based Roads (by Ray Cahoon); a.2) Wao-Banisilan Settlement Road (by

Appendix A

-25 - Page 2

Philipp's Technical Consultants); a.3) Sultan Kudarat Roads (by Philnor); and, a.4)Kabankalan Roads, Negros Occidental (draft ICR by SRRIP Construction Team, Officeof the Resident Engineer, Tabugon); b) DILG component: b. 1) SRRIP Final Report (byRenardet); and, b.2) draft ICR (by DILG PMO).

6. The views of the stakeholders on the project implementation and operationof the SRRIP can be summarized as follows. Both the Bank and the implementingagencies, DPWH and DILG, performed satisfactorily under difficult circumstances.From the start the project faced a number of difficulties including: a) the EDSARevolution in February 1986 resulted in major changes at all levels in the implementingagencies management; b) 1991 economic crisis; c) changes in implementing agenciesmanagement after 1992 general elections; d) numerous peace and order problems inproject areas; and e) unusual bad weather conditions in the project areas.

7. Despite these difficulties, the overall outcome of the SRRIP wassatisfactory, assessing the achievement of the original project objectives: a) the roadsbuilt/rehabilitated in rural areas provided farmers access to markets, stimulating foodproduction and employment opportunities; b) provided the infrastructure required tosupport land settlement efforts; c) facilitated the provision of health care, education andother services to the rural population. The objective to strengthen institution buildingefforts in DILG and Provincial Governments was not clearly specified at appraisal. Thisfact made it difficult to evaluate the success of this component. However, provincialengineers' offices were strengthened by the provision of maintenance equipment,workshops, office equipment. and training.

8. The positive impact of the road construction/rehabilitation in the area ofinfluence could be seen during the site inspection. The mission visited a sample of bothDPWH and DILG roads in Mindanao. As barangays and municipalities were connectedto the main road network, population and economic activity increased considerably.Some of the roads were previously trails and only accessible with pack horses and buffalocarts. Presently, the barangays and municipalities affected have regular jeepney service,which allows the communities to carry agricultural production to the markets. In somecases, transport costs were reduced by 60%-80%. Previous peace and order problemswere also eased after roads were completed. Additionally, communities expressed theirwillingness to participate more actively in the road's routine maintenance.

9. The main concerns of the mission, which were shared by theimplementing agencies are as follows: a) there was a large number of contractterninations and recissions during project implementation; b) disbursements andpayments to contractors were slow during periods of financial crisis and regularly duringthe start of each fiscal year; c) quality of detailed engineering, construction andsupervision was poor in several of the contracts; d) as maintenance requirements areintensive in these types of roads, it is critical that it will be performed to assure projectsustainability; e) the contribution of the project to capacity building of both DILG and theprovinces was difficult to measure.

- 26 - ~~~~~Appendix A-26- flage X3

10. Among the lessons learned that could be drawn from SRRIP'simplementation experience, there is a need to:

(a) improve the pre-qualification process by making it more rigorousand transparent. This would reduce contract terminations andrecissions, unnecessary delays and project costs;

(b) speed up clearances by the Bank and procurement procedures anddisbursements by the borrower;

(c) improve Bank supervision during the implementation stage;

(d) engage the services of an independent technical consultant toassure quality control in project performance;

(e) perform adequate maintenance to assure project sustainability; and,

(f) establish clear and realistic capacity building goals for theimplementing agencies.

11. The Government's contribution to the SRRIP ICR will be formally madeavailable to the Bank by April 30, 1996.

Manila, February 28, 1996

Appendix A-27 - Attachment 1

Page 1

Attachment I

Roads Visited during the Field Trip, February 18-21, 1996

DILG Roads

1. Cogon - Kapatagan, Davao del Sur

2. Mati - Balabag, Davao del Sur3. Sinaliwan - Matanao - Bangkal, Davao del Sur4. Bansalan - Magsaysay, Davao del Sur

DPWH Roads

i. Maramag - Pargantucan - Kalilangan - Kilikili, Bukidnon2. Kiliildi - Wao - Katutungan, Lanao del Sur3. Kilikili - Bumugot, Lanao del Sur4. Katatangan - Banisilan - Little Pantas, North Cotabato

-28- Appendix BPage 1

Economic Impact Data From DILG Roads

Republic of the PhilippinesDepartment of the Interior and Local GovemmentSECOND RURAL ROADS IMPROVEMENT PROJECTIBRD Loan No. 2716-PH

Table 1Population Within Road Influence Area (RIA)

Province/Road Section ! No. of Barangays/Populationj__ w/o Project (1985) | w/Project (1995)

1 Marinduque 3/ 1927 4/ 2,658Matalaba-Pantayin-De Villa Road

2 Agusan del Norte 7/ 28973 15/ 48.158Magallanes-Cabadbaran Road

1 8 Surigao del Sur 5/ 3782 6/ 8,437Telaje-San Isidro-Matiodum-Maitum Road

4 Surigao del Norte 8/ 9625 8/ 10.352Mainit-Mansayao Road

5 Davao del Sur |S 13001 5/18.622Cogon-KaPatagan Road !

F:eputIic of tthie MtidilpAesOEpartniienI .)t tle Interior arid Local GoveruiwitSECOND Rl!RAL R11A1)3 IMPROVEM ENI PROJECTIBRD loan NIo 2116-PHI

'travelI imeIBeHjriring to Erd of Road Section)

Piirk+eIRoad t ecti)on Lenigth Surfae Te Surface Condirtion Index Averaqe Travel Time(mrnutes) I/(krri) w/o PrIolct w/Proiect wlo Prect wiect w/o Proiect (mylad)' wlProlect (mv/ad)'

IidtMlul 8214 BE G 16 8 0i1 90; 16/ 0

Matalaba-Paitayri-Da Villa Road

2 Aurdrw el NJofte 1 2 664 BG POCCP 1 2 1 201 / 01 I 0

MagaIanes{badbaran Road

3 sijfno del Sr 1 2 96 BE G 1 6 9 46 I 0 131 0

Te3je-San Isidro-Malic0im-Maitum Road

41 rigaodil Norte 12 8 VBG G 13 10 30 I 0 19) 0

Marid-Milansa Road

S Dayao idl Sir 22 44142 VBE GIPCCP 18 9/3 120/ 720 30 0

_o_ n-ataqan Road . __ _

SlURFACE TPE P SURFACE CONDITION INDEX

G -Gravel SurfaceTvpe T Surface Sirface Type I Surface Surface Type Surface

Bi -BadGravel ad Condibonn Condition No. and Condition Condition No and Condition Condiion No

VEBG -Var BEad Gravel _Paved Gravel Earti

BE -Bad Earltr Good 1 Good 8 Very Bad Stone 1 5

\BE - Very Bad EaMlt Good/Fair 2 Good/Fair 9 PavefrmentFPOP - Portbrid Cernwrt Gsnorete Pamrnent Fair 3 Fir 10 Bad 1 6

FairlBad 4 Fair/Bad 11 Very Bad 1 7

LEGEND Bad 6 Bad 1I2 Imapssable for 1 8 D

rnivlad)- mctor vehidenirnnl-drazr, Bad'/ery Bad 6 BadNeiy Bad 13 Motorized X r

11 80 kph at paved road, 60 1ph at gravel road Very Bad 7 Very Bad 1 4 _- Transortatiorn _ x

bL

Repubibkc uf te FhiippinesDeportmeul ol the Iroeiido and Locol GoaverrirenlSECI)ND RURPAL ROADS IWFIOVlEMENT PRoJECTI6RDLOnNo 21l6-fH

Tablia 3-A,ClOST OF FARIM PRODUCTS

FRCVlJCF __FARM ATE PRICES Pesos per kilo0r6niRie _ Cupr Baneju _ Nip _ Comr _Caiee _Pesnut _ Abaca Cnote uber _ Poto Cao

Mam.duque 650 5 38

SurgaeO del Sur 5 3. 5 23 120 Ofs,sd. 351U 110/1 OIupcs

Sungno del ?k,rte 5 90 6 2S5

Arguseu, del Norie t 0Q 6 00 a 80

D)aalcode1 Sir 680 8a o 3 00 5 00 20 00 /00 15 00 3 00 8 00 12100 25 00

'Ufor time cournsumptiun o&> 1595 Prnces

- 31- Appendix BPage 4

Repubuc at thaPhtiiiopinesSECOND RUR.- L ROADS IMPROVEMENT PROJECTIBRO Loan No. 2716-PH

Tabie 3-SMATERiAL AND LABtOR INPUT OF RICE(1 Hectare ot Paiay)

Surigao dal Sur

A M11TERL .L 14PUTS

MATERiAL t ATEPIAL INPUTSKind :v I Cost I Total Cast Pesos

1 Sarea l 64^ T ~~~~~~~~~~~~~~~~~2 cavans jF-405 LSJOcavan r-il 002 Ferti(z er UJsed

a. Srarad 3ad 1 AmMonaurn Sulfate IO klos P9.0tJkg 37 oo

t;Fteld1 StA piication i AMmonMum SuTute I SCCK P225 00/sack 2 .25 002nd A pplicator ' 4-14-14 1 sack P320.00/sack 320.003rd Applicalion -

3 Insecti-oe/Fungicide- SeaedTreatment Orymbus 1ODmt FS58.00JiOOmi 58.00

b Seectresd Treatmernt Az2dnn 1 lrter P500.00/iter 250.00c. Fisi Treatment I

1 st sprWng |Cymbus I lirter PS8QJtrter 580.002nd spraying Phosphorus 1 liter IP450/liter 450.00

4 Raoentictaec Manual | -i

b Chemricl Zinc Phostide 1/4 can P60 00/can 1s

c Electrical5 Weediilde

ae Field Trrcutment1 st applicaton Madicete 1 bottle P1 75.00,botle 175 002na oatiiCatton Hvdoncl 1/2 liter P208 00/liter 104 00

ToGai _ost ot MateriLt input per CroppingL 3.067 00

a LAS-OR'NhPUJTFARM OPERATION LABOR INPUTS

Man-O&' LaborlMar-dav Total Cast PeSaS

1 Seedoed pre:aration. sowing S. care of serdilings 2-50 00 '00.002 Land Freparetiorr I,

a Land Clarwir _a I PS00 o0 400 Of,b Plowing I 0

; witn anima;2 wtn rnacnine none

c. HarrownoI1 wrth animal P5 00 | 400 002. wrtn maLchrne none

d Repair of dikes 8 levelitng 2 P50 00 100 00 i3 Pulling eLnd Hauling of Seedlings 25 P50.00 1 .250.004 Transplanting & iUningoBroadcasting 20 P50.00 1.000.00S Fertilizing 1 P50.00 50.006 Cleaning Oikes S P50.00 300 007 Weedino

a I.1canua

b Mechanicaic. emnmical, 1 P50 00 50.00

8 Conrol of insCeCt pests& diseases

M Manualb Chemnical 1 | Ps50.00 50.00

g Conurol of Rats 1 P50.00 50.00|1C0 Hareastno and 5udllng 15 I PSO 00 750.00

Total Labor input 4.500.00

TOTAL MATEPiALS . LABOR INPUTS 7.56700

- 32 - Appendix BPage 5

Ropublic of the PhilippinesDepartnent of the Interior and Local GovemmentSECOND RURAL ROADS IMPROVEMENT PROJECTIBRD Loan No. 2716-PH

Table 3-CLabor Input of Coconut/Hectare (150 Trees/Hectare) *aSurigao del Sur

FARM OPERATION LABOR INPlJT TOTAL| ______________________________ _ g Man-days ! Cost/Man-day *d I COST

A. Land Clearing Ob 6 175.00 1.050.00

SB. Copra-making 'c1 Climbing 1 225.00 225.002 Nut Stocking 1 150.00 150.00L3Husking 2 112.50' 225.0014 Nut Hauling 1 150.00 150.Q15 Nut Cracking 1 45.0 45.00 6 Dtying and Shelling 2 150.00 j 300.007 Sacking 1 50.00 50.008 Copra Hauling 1 50.00 50.00

|TOTAL 16 1 2.246500 1NOTE:a on the average of 10 nuts/tree or a total of 1.500 nuts per hectare

*b Land cdearing every 6 monthsc Harvesting every 3 months*d 19965 Prices


Republic of the PhilippinesDepartment of the Interior and Local GovemmentSECOND RPtURAL ROADS IMPROVEMENT PROJECTIBRD Loan No. 2716-PH

Table 4FREQUENCY OF VISITS

PROVINCE 1 Agricultural Extension Workers (AEW)________________ _ l DAR I Chem.Co. ! BankClient

Marinduque lonce a month ftwice a year twice a yearISurigao del Sur monthlySurigao del Norte 4 times a year 6 times a year 6 times a yearAgusan del Norte 4 times a year monthlyDavao del Sur 1 monthly _monthly Itwice a year


Republic of the PhilippinesDepartment of the Interior and Local GovernmentSECOND RUPLRAL ROADS IMPROVEMENT PROJECTIBRD Loan No. 2716-PH

Table 6

Days Per Year With Vehicle Access

Province/Road Section Vehicie Access (Days)W/O Project * W/Project

1 Mannduque 365 365Matalaba-Pantayin-De Villa Road

2 Agusan del Norte 365 365Magailanes-Cabadbaran Road

3 Surigao del Sur 153 366Telaje-San lsidro-Matiodum-Maitum Road

4 Surigao del Norte 365 36|Mainit-Mansayao Road

5 Davao del Sur 60 365Cogon-Kapatagan Road ; .Fagures were based on the followiig:Marinduque - Vehicle access is from Matalaba to Pantayin on.y From Pantayin.

access was possible oriy by foot & animal sledges.Aqusar del Norte road section wvas an all-weather road.Surncao del Sur - vehicle access was from Teiale to San Jose oniy and

accessible only during dr/ season.SuriaEo del Norte the road orovided an all-weather motorized access.Davao .,el Sur - tne road ,was accessible bY foot and animal-draw-n carmage only.

Accessible by 4-wheel drive dunng dry season only.

keputik, ot the FtilpprieaDepartriment of the Inleric r frd Locl Gov'ernrrterSECOND RURAL ROADS IMPROVEMENT FPRCOJECT

IBFtD- Loan No 2716-PH

Table 6

Summary Resulls of Arinual Average Daily Traffic (M[DT)

_ __ __ _ _ /WEIGHTED ANNLIAL AVEFRAGE DA.ILL TFAFFIC9(AADT-L_VEHICLE Tr PE A_arinlsrue Ausar delNortae- -Suri a3 del Sur Sujrla Ie Ncorte Da3 'o del Sur

_____ _ ___ wrw oled tt \pdrojecl wp Froyect w/Fyolect wio Project w!5roec.t w1o Prq rect wlijct io Projeet _wProlect

C arNatrdPic$-p 8 8 97 12: 3 115 27 30 , 21

Jeepney 2 1 1 16 29 2)6 63 67 22

J11i1al ls 6 2 3

Sub-Total LiGlT 10 2 I 12 164 3 144 90 1 a 8 43

Fligid Tiucd 1 2 4o 81 91 8 12 19 n

Aibiulated TruW; 10 10 1 7 3

Sub-Total MED)U1M1 1 2 63 95 1 18 11 1 ( 19

Others 1 1f, 12 466 6 3t7 51 480 4 188

TOTAL 2374 71_ 9 __ _9 162 E89 12 250

Aniwial-drawn 24 6 25 _5 _ _ _

Repi'blbi o( the PilipplnesDeVa3drrrent of Ihe Intenor aridi LocA GovernrmentSECOND RURAL RCADS IMPROVEMENT PROJECTIBRD Loan No 2716-PH

Table 7Cost of Transport(Mart Road to M.ket)

F'-once/Road Section _wh Prolect- wProjectMeaans of Transport Transport Cost Means of Transport _ Transport Cost

I Mannduque Jeepney up to 6.00 Pantaqin - Sta. Cruz Market Jeepney up to 4 00 Pantayin-Sta Cfuz MarketMatalaba-Pantain-De 4illa Road Pantani onr' De Vola 8 00 De Vlla-Sta. Cruz

5 00 Bariogbog-Sta Cruz.Oa

2 Agusan dei Norta Thc)1el 15600 Magallanes -Cabadbaran Trk.)le/ 10 00 Magallanes-Cabadbaran MarketMalallanes-abadba,-an Road Motorized Padicab Market Motonzed Pedi_3D _.

16 00 Maitum/Maticdurnr to3 Sungao del Sut Arrncl-drawn) Tandag Market Motorcyc,es 10.00 Matm-Tandag

Telae-San Isidro -Matlicirri-Maiturn Road banca + Jeepney 10.00 MaitumlMatidunr, to 10 00 MaticAdm-Tandag MarketQu,ezon

._________ 6.00 Quezon -Tandag Market

4 S,urigac, del orte Jeepney 1000 Mansayao -Mainit Market Jeepney 5 00 Mansaao-Mainit MarketMain,t-Mansayao Road 3 00 Mabn-ao- Mairiv Market 260 Matin-ao - Mainrt Market

5 Davao del Sur Anirnal-drawn 60.00 Kapatagar, -Digos Market Jeepney °,3000 Kapatagar-Digos MarketCogon-r4atagan Road ________-10 00 Kj~gpt - Digos Market ___ _6 00 Kiagnt-Digos MarkettMaiturn and Matcdurr, were orny accessible by foot trais. anin-da-,A carfiage and banca3 most riovernens fioFi ths area crossed the Tandag Riyer >and cimnctes\cd with jeeprieys at Quezon going to Tandag propr r

-M

,4

Reputlc. of the F'hilipprlesDepartment of ith lrateiior and Local Governmer,tSECOND RURAL ROADS IMPROVEMENT PROJECTIBRD Loan No 2716-PH

Table 8Result of Post-Evaluation

Prowrirce.Roal Section Length P st (POOO) _ E IR() - Benefit Source__________ (krns F S. Completed F - Completed F S. Corrpleted

1 Marrmduque 8214 9843 17.661 13.9 TrafficJ TrafricMatalata-Parita1n-De Villa Road DeveloprA,ental

Road2 Agusan dal Norte 12 654 4.809 32.767 18 4 23 48 Trafftl Traffic -

Magallanes-Cabadbarari Road DevelopmentalRoad

3 Surigao del Su 12 96 10.018 16,624 17 9 28 37 Trat&iH TrafficTel.e-San lsidio-MalIxum-Mahitrr, Road Devekiprf(euital

Road4 Surigao del Nrte 12 8 13.028 13.853 18 1 22 5 Traffidc Traffic

Marit-Marsayao Road DevelopmrrentalRoad

5 Davao del Sur 26 64 16.929 68.797 17 6 13 Traffic,' TratficCogorr-Kapatagan Road Developmental

._________________________ .. _______ .__________ .___________ ______._ _ _ _ _____ Road _R a

OQ la

tD .

- 38 -Appendix C

Page I

Economic Impact Data from DPWH Roads

Sultan Kudarat Settlement Area

Before (1990) After (1995)

(a) Population P 91,224.00 P 104,907.60

(b) Travel time to a major center 4 hrs. 2.5 hrs

(c) Local cost of a defined list of goods

(I) Palay P 2.50/kilo P 6.80/kilo

(2) Corn P 2.50/kilo P 7.00/kilo

(3) Coffee P 22.00/kilo P 61.00/kilo

(d) Frequency of visit by health or twice/semester or everydayother services to local communities once/quarter

2 High School (public) 2 High School (public)2 High School (private) 5 High School (private)

2 College (private)3 Elementary School 3 Elementary School

(e) Days per year with vehicle access 125 days/year 365 days/year

(f) Number of jeepneys/day that reachthe local communities

(1) Jeepneys 4 12

(2) Motorcycles 45 321

(3) Light cargo vehicles 6 138

(g) Cost of transport to the main roador to the market P 1.25/km P 0.75/km

- 39 -Appendix C

Page 2

Kabankalan Settlement Area

Before (1 990! After (l995?

(a) Population P 12,000.00 P 27,000.00

(b) Travel time to a major center 3 hrs. I hr.

(c) (1) Transportation cost of:(i) Palay P 20.00/sack P 10.00/sack(ii) Fertilizer P 20.00/sack P 10.00/sack

(2) Cost of palay P 600.00/sack P 950.00/sack(3) Cost of fertilizer P 480.00/sack P 800.00/sack(4) Cost of sugar P 700.00/sack P 1,200.00/sack

(d) (1) Health(i) Hospital (managed by

Dacongragon-Sugar Central) everyday everyday(ii) Barangay health center once/month everyday

(2) Education(i) 3 High School 2 High School 5 High School(ii) 3 Elementary School 3 Elementary School 3 Elementary School



(1) Jeepneys 2 12


(3) Buses 2 5

(g) Cost of transportation

(1) Jeepneys P 20.00/person P 15.00/person

(2) Motorcycles P 10.00/person P 5.00/person

(3) Bus P 25.00/person P 12.00/person

- 40 -Appendix C

Page 3

Wao-Banisilan Settlement Project Area

Before (1990) After (1995)

(a) Population P 350,796.00 P 403,415.40

(b) Travel time to a major center 6 hrs. 4 hrs

(c) Local cost of a defined list of goods

(1) Palay P 3.80/kilo P 10.50/kilo

(2) Corn P 3.80/kilo P 10.50/kilo

(d) Frequency of visit by health or twice/month everydayother services to local communities

2 High School 4 High School2 Elementary School 4 Elementary School

I Vocational School2 College



(1) Jeepneys 10 20

(2) Buses 5 10


(g) Cost of transport to the main roador to the market P 3.50/km P 2.50/km

- 41 -ApeaxD

DPWfH Contribution to ICR Page 1

1. EVALUATION SUMMARY

1.1 Introduction:

The Second Rural Roads Improvement Project (SRRIP) is one of the componentsof the Department of Agrarian Reform (DAR) programs in three settlement areas,namely, Kabankalan Settlement in Negros Occidental, Wao-Banisilan in Lanaodel Sur and North Cotabato, and Sultan Kudarat and South Cotabato.

A study was conducted and intended for an integrated large scale developmentprogram, divided into different components. Nonetheless, the National, Provincialand Barangay Roads Component was assigned to the Department of PublicWorks and Highways. The project was funded by the World Bank-IBRD Loan No.2716- PH. The total loan and breakdown of estimates and be shown on annex"A". Twenty five (25) percent of the project cost is co-financed by theGovernment of the Philippines under GOP.

Detailed Engineering Design was undertaken by the Local Consultants -as earlyas 1986. The Barangay roads component was then immediately implemented byAdministration thru Labor Based Equipment Supported Projects. Imptementationcompletion report was prepared and submitted by Engr. Raymund L. Cahoon,SRRIP Rural Roads Resident Consultant, after it was completed in July 16, 1991.

The National and Provincial Roads projects were started in October 1 990 bycontract packages. The supervision was also awarded to Local Consultants. ThisImplementation Completion Report was made in compliance with therequirement of WB-IBRO for their evaluation and reference on the completedprojects.

2. PROJECT OBJECTIVES

In these three settlement projects, mostly located in rural areas, the govemmentprogram is to improve and reconstruct the poor existing condition of National,Provincial and Barangay roads to all weather road in an effort to support sustainabledevelopment, reduce the transport operating cost and travel time. The threesettlement areas are potentially rich in agricultural products. In Kabankalan, acooperative type Sugar Milling Corporation is located at the township of thesettlement. The areas remained neglected in terms of Infrastructure improvementsand the road conditions are deteriorated gravel which become unpassable duringrainy season. This physical condition of road makes the three settlement areasisolated.

The SRRIP project therefore was aimed to alleviate poverty by providing bettertransport facilites to enhance easy access to markets in order to generate increasein food producton, additional empioyment oppurtunities, and uplift the standard ofliving. With better roads, insurgency problem will be minimized, while social servicessuch as health educaton and other outreach assistance program of the governmentwill be greatly improved.

The project is funded by WB-IBRD under Loan No. 2716-PH and co-financedby the GOP.

- 42 -Appendix Dirage Z 2

3. IMPLEMENTATION EXPERIENCE AND RESULTS

3.1 Achievement of Project Objectives:

The project objectve has been substantially attained in terms of economic,social and political aspects. Increased in agricultural production has significanteffect thru upliftment of standard of living in the projects influence area. SocialServices such as health education and government assistance to the inhabitantsupgraded to a considerable degree. Support services becomes readily available,while peace and order problem was minimized. The communities in the threesettlement areas changed into very progressive countryside and farm producecan now be easily transported to markets. The outcome has been very satisfactorysince the Internal Rate of Return (IRR) has been achieved as planned. Thesummary of actual costs, financing arrangement, implementation timetable ascompared to the original estimate were found on the attached Annex 'A'.

3.2 The following are major factors that affect implementation timetable:

3.2.1 Seven Project Directors has taken over the SRRIP - PMO managementsince it was started in 1 986. This create major changes/delays in themanagement and implementation of projects.

3.2.2 It took more than three (3) months before W3-IBRD releasesthe refundfor expenses incurred by PMO during construction period.

3.2.3 Unstable peace and order problem in the settlement areas. Several incidentof harassments/threats has been noted during implementation. Overtimework after 5:00 p.m. is no longer advisable.

3.2.4 Detailed Engineering studies under contract by local consultant is erroneousresulting into changes and variation orders then exceeding the 25% limit setby the, government. Most bench marks and reference points has been lostduring'implementation because they were only marked on semi-permanent:ees or boulders along the alignment.

3.2.5 Some incompetent contractors were prequalified and won the bidding. Theequipment mobilized/deployed to the project were far below the number ofequipment requirement as stated in the contract

3.2.6 Inexperienced and Incompetent staff were fielded by the contractor resultingin the inferior quality of work, mismanagement of equipment, manpower andother resources causing considerable delay in the implementation.

3.2.7 Poor assistance or support received by Field Personnel from the Contractor,resulting into the delay of the aquisation of materials, fuel, oil and spare partsresulting in the delay of project implementation.

3.2.8 Road Right of Way Problem.

3.2.9 General items or assistance to the Engineers were not promptly released tothe Consultant. This hinders mobility and close supervision of the on-goingconstruction.

Anix D 13.3 Project Sustainability Page 3

It is likely and probable that the project will maintain its achievements generatedin relation to economic and social impact upon completion. The living standardof the settlers is likely to improve as a result of increased Agricultural productionand additonal incentives created by the establishment of government supportfacilities and services.

In this connection also, a proper maintenance program, whether routine, periodicor by contract shall be immediately undertaken to avoid early deterioration of gravelsurfacing materials. The project study and planning for follow-up improvement toupgrade into Bituminous Asphalt Pavement or Portland Cement Concrete Pavementwill further bolster sustainability.

3.4 Bank Performance

One of the major problems encounted in the implementation is the delay in therelease of reimbursement trom WB-IBRD which usually takes three (3) monthsbefore the expenditures incurred during construction period are replenished. If GOPcounterparts are no longer available to pay the contractors progress billings, theprogress of the work is affected. Moreover, immediate constructon is very muchaffected by the delay of the review of bidding results by the World Bank before theaward is made.

In this regard, it is suggested that this method be revised or modified to miximizedelay.

3.5 Borrowers Performance

Project Management Office was mandated to implement and supervise theproject operabon. Although seven Project Directors has already taken overthemanagement of the PMO, thus creating major changes in the implementaton, theoffice is however staffed with competent technical engineers to assist in the fieldoperation aAfd in administrative matters. Periodic project coordination meetngs wereconducted resolving the issues that affect the project timetable. The progress billingof the contractors and consultants are acted promptly. Project inspectons and sitevisits are frequently made by no less than Dir. Baliamen P. Mamainte, the presentProject Director. Quality Assurance Unit from DPWH conducted also periodicinspectons, thus, improving the contractors performance and compliance withMaterials Specifications.

3.6 Assessment of Project Outcome:

The project outcome has been satisfactory since all the major objectives hasbeen achieved as a result of substantial development and elimination ot major in theprocess.

44 - Apendix DlPage 4

4. SUMMARY OF FINDINGS, FUTURE OPERATIONS AND KEY LESSONLEARNED:

4.1 Key Lessons Leamed:

The major detects that badly affected the Timetable and cost of the project maybe eliminated in the future construction of the following factors, and adopted, asrecommended, viz:

4.1.1 If possible, no frequent changes in the Top Management Executive hierarchybe made to avoid changes in policy and management style.

4.1.2 Project loans shall be released to the project proponent on time to avoiddelay and make the fund available whenever needed.

4.1.3 Detailed Engineering Studies shall be strictly supervised by the concemedPMO, requiring the Consulting Engineers to comply with Terms andConditions of the Contract.

4.1.4 Improved/more strict PBAC selection of contractors to ensure that onlyqualified ones are allowed to bid.

4.1.5 Prequaliflcation of Technical Staff of the contractor shall be included in thebidding requirement. Only prequalified staff shall be the same person tosupervise the project and replacement/substitution thereof shall be submittedto the PMO for evaluation and approval.

4.1.6 Acquisitfon of Road Right of Way shall be done before the project is startedand shall be the responsibility of the implementing PMO not contractor.

4.1.7 Provision of General Items shall be modified and included in the contractsupervi0on of the Consultant.

,,

4.2 Plans for Future Operations:

It is urgent that the project will be property turn-overto concemed agencyNational, Provincial and Local Government Unit so that regulations, maintenanceliability of the contractor after Turn-over and Acceptance is only one year tor thisparticular projects and transfer of responsibility to the end-user for the futureoperation is necessary to enhance project sustainability.

Appendix DIProject Coll and Timetable Anflfnl-A.Page 5

CONTRACT NAxME OP ORIGINAL REVISEO PLANNEO oATr OATS REMARKSPACKAGES CONTRACTORS COOT COOT *) Strt a) Coenpl-ted

b) Completed b) TerffinatedI la I~~~~ ~ ~ ~~~~~~~~~Peso)

CP-I ACPI 34s3.219S 3 S.060.525.90 a) 04-Oct-90 *1 23-JuI-1 Terminated.) 1t-Jui-02 0)

CP-l UNICORN 63.233.290.37 78.744.044.34 a) 04-Apr-92 a) 1S-Aug-9S Completed0) 03-Apr-9S D)

CP-11-A GoRoNEs 76,s4a.044.70 103.6Q."4.00 a) 22-Fer-SO a) 30-Jan-94 Completed0) 13-Jun-52 0)

CP-Il-U R.P. AGUSTIN SS.300.977.00 83o348.951.86 a) Os-Jan-Il a) Teirnated0) 21-Apr-92 U)

CP-11-C PL. SEBASTIAN 7a,1198029.36 1OS.342.200.27 a) 22-Oct-So a) 0a-Mar-14 Completedb) 04-Nov-92 b)

CP-Ill-A P.L. SEBASTIAN 02.395.225.93 118,212.816.04 a) 21 -Oct-S0 a) 08-Jan-94 Completed0) 10-Oct-92 b)

CP-Ill-S N LOPEZ 14.301.340.2S 23.937.000.00 a) IS-Nov-O0 a)D) 0o-Jui-02 0) 2S-Jui-92 Rescinded

CP-Ill-S P.L SEBASTIAN S0.054.717.3a 69.603.952.04 a) 21-Feb-94 a) 21-Mar-94 On-goinga) 20-Jan-93 D)

CP-Ill-E GRAACE CONOT. 38.616.1449.0 47.621.291.24 a) 11-Oo-92 a) 03-Fet-94 Completed*) 06-Oct-93 0)

CP-Ill-C sM CONSTRUCTION 47.3Ts.210.09 1i.2S3.000.00 a) 0-Jan-Si a)0) 2e-Feb-02 b) l6-Mar-04 Reonded

CP-Ill-C GRACE CONST. 4r,73o.926.43 S9.416.1S6.02 A) 29-Jan-OS a) 10-Msr-96 OnrgoingD) 1a-Dec-9s D)

CP-11-CC COTASATO CONST. 8,702.000.00 6,762.000.00 o o 17-Nov-92 a) Terminoted0) 12-Oct-93 b)

CP-Ill-CC GRACE CONST. 30.391.4S1.84 30.391.461.4 a) 01-Aug-9s5 - ) CompletedL) 18-Mar-96 0)

CP-I11-D HOWA CONST 67.142.000.50 13,637.000.00 a) 07-Nov-00 a)0) 31 -Dec-91 0) 02-Apr-94 Terminated

ICP-IlI-O PFL. SEaASTIAN .f 47,67S.526.70 34.83.91J3.04 a) 17-Oct-94 a) 26-May-96 On-goingD) 27-Jun-96 b)

CP-111-02 ALGON ENGG. CONST. 46.622,140.34 46.070.390.51 a) 19-Jun-04 *) 1S-Mar-96 On-goingb) 04-Apr-93 b)

CP-Ill-I iALGON ENGG. CONST. 68.947.211.98 10,32a.732.36 a) 07-Nov-90 a) 16-Oeo-93 Completed

I D) 29-Peo-92 b)

CONSULTANCV SERVICES:

CP-Ill PHILIPPS 21.767.303.00 44.023.909.70 Na NA On-going

CP-Ili PHILNORIJdANSUETO 14.630.S90.S0 24.854.133.40 Na N4a On-going

CP-I T ANS ASIA 3031 .720.00 3.031O720.00 NC Na On-going

CP-Ill LAZARO 6,112.131.20 S.112,131.t2 NA Na Detaled

CP-Il TECHNIKS 4,044461.96 6.044.441.906 Na Na Oetaled

CP-I OCCO 2.573.3o0.00 2.875.360.00 Na Na Oetoed

TOTAL P153.906.052.16 P.o64,07,S8OS.12

-6-

Appendix Dl- 46 - Page 6

ANNEX B: SUMMARY OF ASSESSMENTSA. AcijAlWvetnent of Objactives substantlil Partial Negligible Not appieDable

Macro policiesI

*Sctor policies I ,

tinancial objectives r.inmtitutional oveloopment |

Pnysicai oojectivoe I

Poverty reduction

Gander issuesI

Otner social obectives

Environmental ObjeOtiVOS rPublIc sector managoment /

Private sector development I

otner (specify)

. Project sustalnaoillty Likely U nlikely Unoortain

(I) (V) (I)

5. Ratik perform an*o- SatIstaotory Satisfactory Defi-lent

(I) (I) (I)

Identitlc ation m

Preoaration assistance i

Aop praisalI

Supervision E

Highly

B a orrower perform-ance | Satloleatery Satioa-tory oriol-ent

(I) t/) Cl)

Prep&ration jn

ImplomentatIon rCovenant compliance LOperation (if appicab|le) i

Highly Hl eghiyE. Assessment of outcomfne Satisrfatory aetiataotory UnsatIsiactory Unsatistoctorl

U) C)U) Wl

-7 -

- 47- A endix D1

ANNEX B: SUMMARY OF ASSESSMENTS Page 7

A. Acnlevement otO% eotlvee souetantial Partial Negllgible Nat GPplleable

C/~~~ Cfl (flCl

Macro polle ie

Sector pollcie s

Financial rclectives x

inetituruonal revelopment i

Phycal oblectives a

Poverty reduclon rGender saue i

Other social objectlve s

Environmental Obljetivoe |

PubDlc sector manageoment |

Private sector development |

Otner (specity) I

E m ploymnent

B. Project su=tainabilty Likely Unilkoly Unortaln

Cl) Cl) U)

HighlyC. Banx performance Satistactory Catiefactery Def-lient

tl) U() C)

Irdenctication I

Preparation assistance |

Appraisal I

Supervision I

Highly

D Dorrower pertormanoe Satisfactory Satiefatery Detlic-ntCl, Cl~~) Cl)

Preparation |

I m plementabon |

Covenant complianoe |

Operation (it applicable)

Highly HighlyF. Asessement of outoe me | 8atisfectory Satisfactory Unsatisfactery Uneatiefactal

l) Cl) C U)

I i I x 1 1 1

- 48 - Appendix D2Page 1

DILG Contribution to ICR

PRO.JECT BACKGROUlr4D

1.1 INTRODUCTION

Focius lias long been givei bvy Ihe Philippine (iovernliluelt on rnradsdevelopilelit. It lnas becomle one of the govenuneutCs top prioritv ill view of iheincreasing tlraffic volwue and tr:affic related iiee(ds to sustain economilic growthand halsten econoimic developmijenit in tdie counilysidle.

Thlis r-esulted in die improvement orf llipl priority rw-url roads tllrlonazreconstruction anil restorationi projects. However. this did not finmilv addressand enmphasize tde importance of preserving Ihe inivestnilellt to newly consiructedrural roads becantse road niiaiiitellnnnce has always been relealted secondarv lothat of conistructioni aiidl hias not been well attend(ledl tO.

In view of tiis, die Departmenet of the Interior and Local Govemnuiieiti(IIL,G) implenionted and comlpleted various ibreial- assisted n1ural roadsdevelopment prog-muns witlh fitnancial nssistanice fi-oai IISAII). World Bunk anidADB. Oiie of these waR tbe IBIW-assisted Second Rau nl RoadsImprovement Project (SRRp) imder Loan No. 2716-PH willi miraiorobjectives of assisting the provinicial governmientls to cany out rur-al roadimprovement anid mainteiianice progrnns; mad s rngthellill tile localgover-nunienit's capability to adninister and imnlplemenlt tleir nrral inkastruchirep-rogralms fi-omji project identificationi to actual imnplemnent'alion.

Tlhe SRRIP was initiated to continiue the World Banlk's assisltuuce onrural road development. It can be said that SRRII' was successfill in attaining itstargets despite problems aid delays in thie project inulple-me.niation. lTheexperiences oll SRRll' could serve as good bases for adopting mluch beltersystemiis mad procedures in the imaplemnenttuion orDIL('s succeedinig pro.grallls.

This Implemintlaion Completion Repori (ICR) only covers theproject components imlplemented lby DJLG in foamuteeui (14) SRRIPUprovinces. Infondation obtained fro pipraisal r-eports, teasibility stttdies,progress reports anid interviews from people w*ho lhave been directly intvolvedin dhe implementation of dhe project were made as basis in thie preparation ofthis report.

1.2 : PRO.J,ECT PRE,PARATION, APPRAISAl, AND NEGOTIATION

A. CR1 GIKAMD PREPARAION

In 1980, ns part of the process ot rationalizirng lhe relationslipbetween the Ministuy of Public Highways (MP-1I) niow Dcpaittielit ofPublic Works and. Highways (DPWYIH) and Mioistty of LocalGovenmment (MX,C]) Iow D)epartment of the Interior and LocalGovernunent (DILO) antd delegating the responsibilily of adminiisteriuug

49 - Appendix D2Page 2

rural roads, series of nietnorladulodI of a;etilUt loI rival roadsdevelopillenl proingrals Weire estabili.lx'dl beovuL- P DPI 1. 1)1 '( aiti(otlilem colceorielud n'dional aoencies tuid thie proje'lt prov iice-s. Irn&tliese nareenients. D)P'Wll was r-)spo!sible. for se4tiI;2 stan(hl (is sUid, fora transitional period %vould provide technical assistace to DILG andtle provinces. 1 AL,A] Was tIiskell lo i"orlitorl phlsicat iinplelneOtnt loll

wid expenditures by tlie proviices stuld provide tlseil also witil technlicalassistance. Full nulthority to plant. prograni aid execute tnaininitnice of'all iural roads wvas given to tlhe provinces.

Since liets. I)U,G was given a wider rui ol' reqpotUsibiltly toact as tile executina agec r provincial -oads.. Ilhl imlementedprojects inclu(le lechijical assist.uice programn to flih-i-er improve tliecapability of D)ILG to nIonitor mid supervise the lproectis beinou.unldeitaketi bv 6ike provinces aid tit tlue smuine tiini traiin tlle provincialstaff: tlhin enablin2 tllemii to undertake ruiral road iniprovenlets an.d oIl e-infi-astructure projecls iu ilhe ile;u liltile.

Tlle SIUIUP was started duriliQ ithe lii s 1BRl)-ussisted Rur -tRoads imnprovenient Project's (Rl lP Loami No. 1 860- I t)inpl)lenelltalion o01 six (6). pilot provinces nsumelv: Aklhi. C."lruillesNoite. Cebu, Iloilo, Ilocos Sur mid Qtiezon. Under RtRI', 1easibililtvstudies for rural r oads improvenment in twelity-two (22) priorityprovinices were undcleltak-en and comnpleted in 1982. Out of tie hventy-two (22) provinces, nine (9) provinces were included in tdie first ADB-assisted Thlird Road Improvemnent l'roject ('TJIP Loan No. 597-fl11)inpl)lenlietited in 1983 unwil 30 Junie 1991. Tlle reniaining thiiteen (13)provinces were presented to the 1RIJ )B aW3 and wer-e eiveni finanicialassistance. Durinig loait negotiation tdie Govemiiijenl requested dieinclusion of si additional province. thus fourleen (14) province.s wei-ecovered bvy tie SRRIP.

llie SRRIP recipient provinices by regiont are as follows:

CAR - AbraReeion I - llocos NorleRegion II - Cag,%ayitRegion IV - MarinlduqiueRegion V - Catairdusiues

Region VIU - BoliolRe.gion V1II - Saniar. Soijlhenil LeOteRegion X - Agussmi dcel No-te. Agusami del

Stin, Misunlis Oriental,Surigno d(l Nolte

Region XI - Suripgo del Sur, Davao del Sur

The provinices were selected based on tlhe following criteriaaeecl bv I13RD and DILG:


1) a responsible cross-seclioii of atl pr vinces in0 ter-ns Of

- eglneerlilR atliiisilive capabilities.

2) reasonlable ran2e of filalncial de'clopllnelnt. Iouollvrepresentlative of ',ll pro.'ines; and

3) geographical (listlbuiluioiI llt tHot sO Widell, distributed us tocause tumtsual difficulties in monitorinsŽ. tes,iz anld evaluaiinprojects.

B. APP L41S 4t A.D ivECOL J

Thlle Banik appraised 1i) Project on Jnimt 1985C mid lthe

Gorentllellt was inviledi to oaul tiegotiatioll oil iecelnber tlle s-aume Vear.Thie IBtRD Loan Agreretieut No. 2716-Pll for TS S82.0O(i milllon for th,,implementation of the SiRRII' R was signied on 19 JAune 1986.

1.3 PROJECT OBJECTITES AND COMLPONENTS

A. PRO JECT OBkjIZC'T1 VEFS

'Tlie ORPJ' umajor otljectives a:re 'IS lows:

1. alleviate poverty ii rurwal aueas by providinig fartiers wit easyaccess to markels ltherelby slinlulsli b 11eo(1 pjrodlidttotil IJ(Ieniplovinenlt oppoltutlities:

2. lprovide time infi-astructure required to suppoir lanid settlementejforts.

3. facilitate provision of lealtim cas-e and otlihe services to the nu-ralpopulationi; and

4. fiurthier' istiel-h inlstitutio- I tiIliig, effott ith lo &al

gover-nment uniits (LOU,s) started wider the previous projects.

B. PR lCIECT COMPORENTS

The DILG project comiponienits includ-,e thc followine:

1. Rehabilitatioin, upgraditkg and spol improvement of about 750iois. of hliigh priority provincial roads includinge bidges, in tile

14 recipient provinces andl constiriction of five (5) mieclaniicalworkshop and quality contr ol laboratories.

2. Provisioni of road maintienaince equipienit. suaid procuremnent. ofworkshops, enginieer-ing. office and trainting equipment.

-51-

Appendix D2Page 4

7. consultac",y selvices For d-sti(ljtd enoniteri: an;d con-d,Jlu'tio

- superv ision).

4. Tecihical assistance to DLCi and the, l provincial road authoritiLsto improve road anid brid-^e cont-Iniction Mid mainitefrnacecapabilihies; ami(i to preopare feasibility sIludies iOIb addliot'l ten(10) pr-ovinices amid to train local s1013'

5. Overseas trainling. spleciial cou-ses and senliuulas for seled0 eldo,Žior stafll fiom) 1D11,(3 ,*) )I 1 11projectov prioeRR:

1.1 PROJECT COS1S ANDL) ENANCJNG

Tlhe tcoal pr-oject cost bliseted on 198. appraisal wvas P2.285.10million eciquivalelit to US$ 122.20 miillioni inclusive oFDPFVII and DILGconlponents. US$82.00 minillioni or aboult 67%(, will be financed roml theloan proceeds while Ilie balance ol $ 40.2 imillion (3.3%.;-) is thePhilippine Govellullenl's counterpart to Ilhe project.

Out of the loat amiiouwt of US$82.00 niillionJ, the DILG allocalion

was US$57.60 miillioni. This will cover 74.32%l. of thle total DlIL(J

prolject cost of USS 77.50 niillioil.

Listed below are thle D)IL.G comuponenles ilnlditd Ithe lioa

allocation to each itemil:

DILG Loan AllocationCoin,,ouuent (JJsS,Mil lio)i

On ~i na I _e visedt

1. ConistructioluIlluplovellelin ot o 350.So 3S.5oProvincial Roadsk/Bridees in

14 Plovinces (750 kihs.), andCIQUal itv Coihtol Ulsboralo resin five (5) provilices

2. Road Maintenance, Workshopiq 8.60 1 2.Li-- Laboratory. Office ancl Other

Equjipmenlt3. Colisultancv Services fou 5 .60 5.60

Engincering ald ConlstuiictionSuppoil, Feasibility Studies

4. T'echnical Assistaiice and 'lraininv 1.4t0 1.40-5. Unalloctded (Coutuiiagentcies) 6.50 2.50

Total $ 57.00 $ 57.6(

Project costs comparison betveen the appraisal and actual costsare presented in Table 1.

- 52- edix D2PageS

1.5 LOAN EFFECTINITY AND CLOSING D)ATE

A. r (\ EF.FE,CT VITY

flie RRIP Ioaul jee-:neuit bkanle effeclive of] 1,7 ';eplemIbelrI984ninlety (90) (days a11er tIho 1m1)0 l iot llilg ill Wasillmltoll 1).o.. l 19Jtune 19866. The lowi ejThctivitv period was five (5) yevus.

B. LOAi L (CJ,NA DCA- TE

'llie origoiial loanu expir;v daIte v-sLs 30 Jtmte 1992. Due loim1iph110iilatioli delavys. dlk lon was exteideod lourl ('1) tim1es with linalclosing date 01131 Decemiber 1995. Thle diflkre-et e,teis,onos pranted twthlBaJik e -Ls followvs:

Extensil o Duration Per-iod CoveredIst 6 monl1ts liI.! uly 1992 to .I D)ec. 19922id i12 uontlihs 01 Jun. 1993 to 31 Dee. 19933 i-d 12 11m0othils 0 1 Jan. 1994 to 31 Doc. 199:14t1 121 1icahs 01 Jun. 1995 10 31 Dec. 1995

-53_ Appendix D2Page 6

2. PROJECCT MIPLEMENTATION

2.I CIVI1L WORKS CONPONENT

Unider thle program. abotut 750 kIns. oif lhighI priorily provincial roads.itnclu(lilg bridges mid five (5) workshops and quality control laboratoriesshould be constructed, improved and'or rehabilitated withiin a five (5) yearpeliod. Due to imnplemenetatioii delays. tlie MJ3RD!WB approved -hur (4I)extensionls tluovilig thle loanl clomSig date Jioi 301 Juwe 1992 to 31 Decemiber1995. Henice, tie actual project iniplemneiatttion perio(I was 8.5 years.

A. PPRov,i,ct4t. RA Dn'S

Detailed enRinleen ing designl for 53 contract packages comprisising773 ions. of provincial roads vere comlpleted. lluiitV six(36) contractsfor thle 1st, 2nd and 3rd year pr ogramns were done by local conisuiltanls in1989 while seventeen (17) conrhacts lor the 411h yeua programn wereprepa-red by die Pr-ovincial ED,ginee,.iig Ollice- (PEGs) in 199 1.

To recover fion twvo (2) years delay in project take- on,detailed enkgineering design for the Ist to 3rd yem- lproui wvere dloniesitnuitunieously in 1988 to early 1989. Bidtdiiko were donte itn 1990 with27 contracts successfullv awarded towards 1991. llie other contractswere not awarded clue to failutre of bidding awcd1or design problems.

Upont r eview of loan proceed requirem-ent for the 27 awardedpiojects, it becamne app)arent that the available loma fThds will just beenough to covet ani additional fouir (4) contracts. -Thus, onlv tWvo (2)both in AgtUsnn del Stir, out o thie niine (9) iinawarcded contracis plus thetwo (2) contracts designied by the PEO, Miswnis Oriental for thie 4thyear prowajnii were considered for rebiddintz/biddi.n2 in 1992. Thlismiakes the 31 conttact packages comilpr'isinlg of 467.57 kins. implenientedwider SRRIP. Twenty two (22) contracts were defetTed on theother liand.

As of 31 DecemLer 1995, 29 contracts were successfullycompleted comilpr-isinig 436.13 Ilos. of roads and 54 bridtes witilcomiibined lengtl of 1,968.18 lineur meters. The actual contirct amounitof the completed projects was 1P1.11 Ibillion.

'lie two (2) remaining contracts wortlh P162.61 million bollt inSamrm Provinice were delayed due to prolonged woiit suspensionbroughlit about by inclemenit weather in die project area and in somedegree, to conllactors wlho lacked tIme neces-uay financial rtsoiwceS.Tlhe PEO of Samal has filly taken1 over one J)roject white die othercontract will be doie jointly witlh tihe contractor.

_ 54 - Appendix D2Page 7

Plivsical acc inplishinetil for the provincial :oad coluponellt is98%') as of i)ec.ember 1995. Th1e coniplele list of road and bridgeprojects implemnenled iunder the prow.Uwn is presentled in Table 2.

B. WOVC -RKZSH;P0S ANVD QULI1TY (CvT, R O.£ OJt4TORJES (WO0 CL)

All five (5) WQCL facilities inciltded und-kr th,e .loUI werecompleted before 31 December 1995. Construction works tvere (loniely thle recipient provinces throughp their r especlive PEOs. Thne actualcost of the facilities was 1'33.95 mlillioni. Complete details of projectlocationi mid contract costs are presellted in Taible 3.

C.~ \S,)CWOL- TYPE U/IDI DI.@NG.;''. S.!,r FO ,R, TUE EN(XNEER

A iotlu oftflilty (330) school-yp-e bu1ilings which s-l.ered as.1. tlheEneineer's Office lhave also bee-n turned- over to tfhe local aulltorities.Most of these buildinkgs are iiow' being used af school rooIIIs. T1h1ecomiple,te list of the buildlingss ad(I whlkere constrncted iecl-over issliowin in Table 4.

2.2 EQU1PMENT COIWPONENT

Various equipmne-nt were proctured wial dtelivere.d to li.e provinces whiichinclulde:

A. R OADM IVM4'ET 4NC§ EQ£UIP'M EN

A total of 270 units of various mainteanice equipment to supl)ortroad miiainteniaiice operalions were lproclured lthrough.i internatiollilcompetitive bidding ill 12 Ju1lvy 1989. It inCIIl(udes purchase oI' one lot ol'spare psi-ts equivalenit to 10?)l of each equipiiient cost. 11' (totalprocureient amiounted to 113$10.81 imillioni inclus.ive otlbail: charoes.

Late in October 1992. additional spare parts for (umip trucks,niotorgra(lers. whieel loaders aid bulldozers were plocured thluu directconitractin.g. flie cost of additional spare parts amuounted to USS0.65milli}on.

Total cost of equipmenit inicludinig spare p!arts mnuouitf.-ed toUSS11.46 millioni. 1)etails of equipment distribution andl costs arepresenited in Table 5.

B. OFFICE. ENGINEEPJIVCAATVD WORK ISHOP EOCQUP.MENT

To further strlengtentIe provinces' enginreering anida(diniiiistiative capabilitv. support equipment sucih as workshop toolsmnd equipmenlt, mid .u'eying sund office equipinent were iticluded in tiepjrovamn. Basic tools auid miiiscellanicoiis equilpntieit wer-e procuredtlirou)gh inteniational shopping on1 20 Matrcia 1992 wilit a total cost of


US$0.46 i Inj1ion. Details of the eqiipmiuent and co:;s aue prve1iiteo inTable 6.

Najor items of workslhop. oflice 'Ind Coiiuelinc 2q1lipalnolli

vvwere also procured Ou 22 Iulfle 1.992 11t111 itttINate .ion al comupetitivebidding with a totll to monltll, of 1USS0. 55 milloll. C'omlplete detmikV of thle(uitllnenlt incClLdiIllg costs aIre preselltecd in Table 7.

2.3 CONSUiJIANCY COMPONENT

A. DET,LED GINE..%UNc; .7Ar,fli.7 ( '7I-'J.T

O 'even (7) local cons.line:uacv Ii ni. were him- r bd Qite 1)1l,(, ioJuLIe 198Fmutntil Fenlmurv 1.989 to riepa:ue tIlt clela ieci ed u eiUg

desini of the lst-3rd vear proarmllm conmprkiFit 575 k'nms. of road&S. Thleactual cost of the services was 1P22.() liiillioln villth P9.86 mIilliofina-nced fi-oni tilc smvin gs ol 1131t'D ILnnue No. I8690 -ll 1. Iletailed i istof thwe consutlitgfilllls wit lile iltividuall cotllil.lI aout are preSellteil Tallc S.

hiI add(lition, ilhe Pi-,Os of ilhe tbleuteell (14) provilices Weirecommissioned in 1991 to undemiake tlhe deLailed ensgineering deSig of192 kins. ofroals for tlie 4th1 vearu- progi-amll. lle Project idenltification

dtl imFe feasibility sludies wer*e done Jointly by tIl SPj?JI Officte Indprovincial conttetl)ali Stlalf in 1989. 'l.he tololl cot ot' Itle de tailedeteoigeeriing (lesign cldone lby the 14 provitces vwas P4.34 mil liOnl.

B. CONSTR UCT! O,;St JPE : ONn RER F-7 CHAS'

Nine (9) local fim,S were also conirtrtlld 1.ibv hlie L)ll,( tosupervise the actial road coCinsituction ikom MIay 1991 to Oclober 1995.Aclual cost of thle consultancy servides for cowlsitctior clmperi.iOn as

P141.23 taillioni. Detailed list of consill(itants wiltl tleil tesqpectivecontract anIowtit is preSellte(l in Talile 9.

C. F,EAS7IiLiTY STUDY ~ -H

To idlenitify futiure rural roal projects, tlie DILC; lilred tLir-ee (3)local finns in March 1993 to tuidertnkee (lie feasibilitv studies in tventvtwo (22) provinces itistead often (10) provinces as originally phumned.Tlhe Conqsultants services wvere comnpletedI in January 1994 wilth a totalcost of P24.63 million. Detailed lisl of consultants wld Colltract costsare presented in Tablc 10.

Ilie feansible projects comprising of 950 knts. of roads wverepackagedl tuider time prol)osedI Tlirdl Rural Roads ln)ptovenimenit Project(TRRIP). The project proposal was submitted to NEDAk on March1994 for evaluatioun.


Tle CO1S'ultancy11' ;CV c' U$A prOViLed by Px,njdtel S.A.

(Consi;lline EuQineez's of SwilzeorhluId i joilln venture will the localconsi.lting lIi-In of'lleristics Technol ogy mid fyliw;uigenisilt Consultailts,-Ic. llie conslultant services commenced on November 1990 andcomlleted o0 131 Deceiinbe 1995. Actual cost olf lhe services aiuouzitsto USS 2168 illion for foir.ign CoSt component and P27.56 illion forlocal cost comiponmenit. Details are pre!sented in I ntble I 1.

- 57 _ Appendix D2Page 10

3. INSTITUTIONAL, DEVELOPMENT

3.1 TECUNCAtL ASSISTANCE

I'o assist thle D.U1G and the SklIM) Oflice iu siaengileling e II). localgovernm11selit Ullits to ilamge tliein rural -' road improvellielint prognlsus. a tteaull of'Coorditiatinie Consultants and Advisor s werc Ihire.d bv the Govermnent under theproject. hi addlitionl to tecnlilical assistanice ill tlhe allalagltielit .UldimnIleilitation supervision of road and bridgee lprojects. hlie Consullantstfrou2.h the respective Advisors. assisted thie SRPJP Ollce to mied anidimprove the differ-ent guidelines develolle(d ciiin2 the previolus project. Tule

iuproved guidel ines have beeni distributed aid lnowv ill use laliollwide. Ilesemanuals include:

A. R J4 A LUEVAc MA,,,yAr (WME/vr>4tr=SJf=TvT M5>t'0'4Ln (R.AIAIM)'^'l

The first drcIa of'ihe i.iuniial was lprepar-(l ill 9 I ulnder Oue tifsiIB3RD-Ahssisteed RIP aid pilot tested in tile six (6) project prvilicesz.

Subsequenitly, thee aiwiual was adopted for national implemiienitationi in1984 whieni all the ptovinces were required to prepare their 1985mainitenianice woIk prongms andl budgets in accordance wilb tlerequirelmlenlt of dhe miiantual. 'Ilu ougli lte ye.u s. t(le IMIaual isperiodicaldlv reviewed and in Jtuie 1985 a revised e(litioni was preparedjoilntly by the RRIP Office, Road Maintenalnce Advisor an(i tecluhicalrepresentatives of thle project provinces.

hI 1992. tlirough thie coIIIbillo(d effoits of the Road MlaintenanlceAdvisor, SRRIP Oflice and palticipating provinces, Ilhe 1985 editioni ofthe nianiual was thoroughily revised and updaled. Ilie gtuiclelines midstanidards presented in die aninual aure desianed for the pr eselitprovincial organization and on tihe basic aesotiu-ces rieadilv availatble. amcitie r oad systeini Hey liave to miainitaiin.

A inore realistic al)proach in tihe coinduct of roati mnd bridgeinventory lias been svsteniaticaliv improved atid stipulated in thenimiual. Teciliical paranieters sUchI as m-iding conditiori index, roadwidth, thickness, surface type. average daily traffic and strnchtures withiintie road section liave already beema takein into account.

In tlie old systeml, inaijiteiiaince flids wer-e being r eleasedthu oghl dile DPWH having the full autoiloity on all r oad supervision andfinancial inatters. Tlhe funids released to thie provinices were basedmainilv on the Equivalent Maintenatince p,er Kilometer (EM K) in which aconresponding anoioit was being niultil)hie(l to the tot.l road networkand not oni the submitted anmual promranis and budgets. Preparationi andslubimissionI of maimual proLumns anid budgets were treatedl onilv ascomplianice for thie release of mainitenanice ftund.


Since RPIMINM lhas been produced in lihe li.Jl of tire-npleanentntloll of tio' Novw I ocul (love-rnmielit Cotle of 1991 °iVill°, tllLUlTs fiull aton it'/ and teCliCal Slipel'iSiOn OVer tIme 1310\ iliCifi I mond1

fmlids for road mnaiinteimiuice woere n ow: aivemr prolmer sllocatimor blasecd onwhat are required( in tile anmmumi- nmaitulellmamce lyro. alll amml d budget.

flie 1993 editioni ol th,e RMINIAM lhus tdremlyI bemij disfr-ibuted toall ploviice.s fob natiowvide imple rientatiou.

B. UrU L)E TV r (I! E;'Ti' -P L; T ;,

'[lie te(lilical asistIdice to the lyrovilices alSO, ifiChides tfieprovision) of'a gtide do f the proper eymanaeemnem;t of provincial e(lipmnOllIpools. Olle lUijor acco0inpil slnlivilt ill te iflmlnlemuentatioll of SRRB' isthI comlmplete revision of tire Guide to Equiipmoeit Mrmrmaemenit System

(GEMIS) anuaiil.

GENIS is also kviown -6 .O rl n ll)Elellt l.umarigrnenmt M.l.unaldeveloped ind implemnled iln le six (6) PJUP' pilot proviimces iii 1983.Time illmummal inillodliced nagement supervision in eqluipnimlet opjerattliolcost syslelus, seriCvcinq ammd repair system1, coutrol 6stein, 1hnnmIiim°practices aind procur-eiiienit a91(1 disposal. Afler ils pilot lesting,. tieniainial was revise(d ill 1984 id thlilen distributed for use. Suiguestionsaid recomnuendations fioii the provinces wvere com-iidered to adopt asvslelnl copatllible to local colldildiomis afl( ln-.lclic5. liloleh jirovimicesWe-re amllelIbl)le to lhe Purpose of ile immanual.lu., Idloptioll waS vwnv miiiinilalcomisiderine thie very Jimited equipmnit and mnipower resources as wellavS iroin- himilaiarizatioii to tie proposed systenia.

Thle imuiual. was adopled by tlie SRRIP provinces up)on fIrearival of the road mainteianuce eqmmipnienit iii 1990 mid 1991.However, due lo vmried provincial orgm;aizaliomtal set-up, lack ofpelSsoIimiel and ability to cope willi tihe demminds for dalta recording,equipt)etut engiiieers suggested for. a imiore respomisive smstelil to suit ltheir

local operationls. FluallTer with tlhe effieclivity of tlile Local GoverunlelitCode of 1991, revisionl to thle 1ma,1nual is mecessaly Io keel) abreast to lirepresenit organizationial and local govemnlienit stnicturen.

In early 1993, a top level seminar was held by tie SRIUP Officeand Equipmenit Advisor to finalize the revisioll of tile ilainual. llits wasattended by equlim.reut engilieers lihoui tlhe 6 RJlP anid 14 SRRIPtprovinces & otlier DThILG FAPs ofirces & kev officials of LOGOME.AP.

TIlle revised versiol. wvilich is flow culled tIme GEMS wascomlp)leted in mid-1993 nid iIIrodluced clurimmo tihe 711t AnilualLOGOMEAP Coniferetice Workshop in August 1993. A. toual of 300copies were tlienc distributed to all proviices, cities. DP11 Centrtl anidRegionial Oflices for nationwide adoplion.

_ 59 - Appendix D2Page 12

Tlhe mnuial is a guide for: 1) equilpmnenit pool miaiianelainent. 2)equipment. operational coitrol, 3) equipmnent malintenance nrmn1angenllrenlt,4) parts mianagenient, anid 5) eqLuip3Iment Ucosti1n9 wnd budgetinn.i.Inmportance of pel-sonnlel training (skilicdLspecialized alndcomputerizalion). data baiks, regular repoiling/nroniforinrg and uir,dtedorgalizationl shtlchure were also inllorlpoaler inI thie nIIIall.l"1

Some prtovinces ar-e nowe embarkitik o01 flteir- ownzl equiIenlt

eCOllOili c eliel-rprises Ilsing flre revised Inaulrial FS gi tide.

C. TRALMVN11GS'

In filwlthel-ance to lwe cqJaplilify bnijdiug objectives of tjie project,

vafious t aullillras anid selliilnars waere developed and coliducted jollitly by

the Coorduiaftill, Consultaits aWId SRIPS COffice. III otiem occasiolns.personnel were sent to international conIences/semimus specifically,oni bilernatiomral Road Federationi (lRF) sponsored tr-aifinrgs. Belowv are

sonie trainiiags conducted aund attended to by the D11,(O and Provincial

coumrterprtrts uintder tire project.

1) Overseas Conferences/Serllimnas

The SRRIP Office lIas senit a total of fourteen (14)participaits firotm DILG top levvel and middle mnanageienit to thie

IRF Fxecutive Coiiferenice oni Road Matlagelllellt in ArizoIIaU.S.A. Tluee (3) each drin-iie tlie Seconid (1988) and llird(1989) while fotur (4) each duir-ikg (lie SixIli (1992.) nd (lieSeveniti (1993) confer-enice. 'lle conferenice objjective is to traimr

and orienit die pa-ticipants in Road Mainilemmaruce M-aniageelntTechnoloyv.

Foiur (4) DILG/SRiRII' personnel also at(enided tie

Trainer's Traimiiitg oni IRF Videotalpes oni Coimsltictionr

Inspection, Road Maintenance Operation, and EqtuipmlentMainlenanice and Operation nl Washiiglton D.C. U.S.A. Thleseminar emphasized tie concept of technical training techluiqules

to develop tire par-icipiants' capabililies to train their

subordinates aid to use IRF Videotapes as mediumii to improveproductivity mid effectiveness. A provision of two successive

5-dlay btaininlg in Manila whiicih foruur part of tire semiinar wasincluded to re-eciho the traiting in Ire fourteemi (14) SRRIP

provinces.

2) Local Trainines

Basic computer trainiigs werel implemeented durii,e tdie

first quatuer of 1989. These trainings were coniducted in supportto tie computers delivere(d to tire fourteen (14) SIRPIPprovinices. It aimned to orienit anid fniiaiize DILG persoinel


and provincial staff on 1he basic disk opertfinc, sysftenUS aWdtecluliques. ollotow-up avaniced cOmIpjuter colurses wverecondiucted on tdie iltier pmat of 1990.

Several traininl,.s on1 Roadl Maintenance and EquipluelntManlagenielit S'-slelis were conductoed to strenothlen tlie roadnaaiiiitemmtawce ani d equipill2.eut wu mulavellient oper.Ai ul1 ill Itheprovilucesl. vevlifualliv it u ultedl iu the revisioll and upd)(Ialing oftle RMTMM -1 uld (GEMIS. Actual applicalions on hlie bnasictecnlusiales andt, inelhods kased on the oil vi tRpes oil 1-d

inainlenm:uce aid equipment itimimee dui( oper"ations lhaIvebcell Ir0-,9i7-Cd.

Afler- ltie IMNMM mnd GIh1; revised ediliomi hlave leen

finalized. successive tr-tnuigis were agaill carrieiid otil oto onlVaniolne time SRRIP pluticipalling provinces but ill oilier selectedprovilnceS as ws ell. A one-milonilti c(inlprhellsive tainin o

iMuagemnemit or Civil Woroks was condulcte(l in Cavile durino tilielast quUUelr of 1992 foir DILG Central a w( PEO teclulicalpersoninel. Ilme training focused on dlie proper procediue ofCivil Works imp leirieni ation ajnd Hleavy Equipminents Woi-ks witiemlliphasis on: a) construction mlletod anld ecluhiques., qulll itycontr-ol amid roald mnaintenance; anld b) piO l)p imlacimiile sel-tionlaid macihine, matching productivity & miainteunanmce of eqiipnmen(.

3) h1ndils Oni Trnaining

II addlitioni to fomnual lrajinin sessionis. a uuumber of DlLGamd provincial counterparts were seconided to tlhe detailedengineer'iqg consultants of le 1st to 3rd year pr-oject lor on-tde-job trainings. Each COs1wte)t Sta'Were giVen specific tasks topeiforin. for themi to specialize in one. Field like nmiter-ialsengineering, road desipi, and bridige/shmuclural designi. III doingso, a multi- disciplinaiy desigui tenin canu be trained tor cactl ofthe project plrovinces.

Subsequently in 1991, tie 14 provinces throuigh thieirrespective PEOs were commissioned to uindeitiake the detaileddesigti of proojects undei tihe 4thi Year Proraiin. Witih iietechnical assistaice of the Coordining - Comsi fulas aid tie-SRRIP Ofice, tlie provinces were able to comiplete the designinchlding drlh tenider documenits fbI 17 conitr-acts coverin-g 192kiloimeters of roads. Ilowevei, thie projects were niotiIple ntldil t id undcler tlie SRRIP dute to limite(d loi fiuids wid flheinability of thie Gove-iminienit to whoilly finwice tlhe projects.Major trainings undei-taken tinder the S'RI) ate preseented inTable 12.

- 61 - Appendix D2

Page 14

1. PERFOR1JAiNCE ASSESSMlEINT

4.1 DILG AND SR-RP OFM'CE PER ORMANCE

A. R C).!E Ci' (.LfPOt'V!UwiT

Apait fi-ofm tile inifial delays inI laliichinl tle p0roject in 1986 upIto 1988. tle political situalioll iI Ite fliitii,ies and t.i1e lacl: ofcotilnuityilv of thie D[L tol) and middle level executives have *reallvcont.ributed to die unforeseen dtelavs. Realiniuent of fuictions mnd

responsibilities cause% Imatni ununiaerial difficulItieS aid in the

processing of Varirous docullielits withiii t[ie DILG.

An11other lactor that imumlipered project complietiom I-as dlle to

delaVed' stalt of conSitructionl activities fiolml tlhe ini1e tle detailedl

ellngilleeriln was % Completed. If tookl 1%vo years before tile , wwa rds wore

uade, anid duriniig that period, thle l).ojeQi roaIdIs had dkleorl ioI.rated tillflelr.ConSequently, additional costS miud tiune wer e li'-Ssaty Ibl the

additional works.

Project implementation was also g enatIy aff'ccted byv Ihe middleeast crisis in 1990. Costs of constructioni mnaterials have goine

excessively highI that somle contractors have to ininimize constructionlactivities if not totally stopped. Tllis was coutpled by tle inallility of tlleGovernumienit to provide thle necessary filids to cushlion tih?e impact of

price increases thius. tlie delav on payiments to thle contractors. Thleprobleml was solved onilv witih die Baik's approval of tIhe direct paymentsclhellme ill ml1id-1992.

Eflirts to improve project imuplemneutafion were nmdde lyv tlecturrenlt DILG malae-ment fioml tihe time tllev ass-illc'd ofUice in mlidl-1992. Ii adlditionj to regular coordination meetinlgs. delayedl contrtactswer-e isslled warninigs anid in soIme., contr'actoi-s were advised to sulb-

contract p)orions of the work. Sonie contractors were nlso expelledwith the sub-contractor and die PEC) takinig over to conmplete timeprojects. Ill extfellme cases, several contracts were teriiiniaed ald wereawarded to iiew contractors U-othlroI inegotiatioin O- orebiddihg. As a

result, twenty niine (29) out of tlithty otte (31) contracts weresuccessfiulv comliplete(l. Thle tvo (2) remaining projects. bothl ill Sainia.

were delayed largelv due to inclemiienit weather anid in sollie m1easure, tothe contractors who lacked tlhe necessarv financial backing.

It was not uitil the last qualter of 1992 thlat thle project stalted totake off at a faster rate despite problems mud difficulties. Tlhe miajoraccollilislunelnt that shiould have be-en dolle duilring tlhe live-ve,u

implemenitation period of tlie project was completed for onily tluee ancd

a lialfyvars during thie proJect exlension leriod alid upoll take-ovVer of anew DILG adminiiistrationl in 1992. Rale of accomlnpisluimienl rose fioml

-62- Appendix D2Page 15

8.9%)/Veai thle first live ve,nis (1987 - hll'e I 992) le I5. limijn-July 1992 - December 1 995.

(In tile othlol'rhalld (h11'' fivo (5) WQC(1, ee ;II comil't'n d mId

su)pplied vtith all die Iocessa10 ols andi eqLulipilnlelt. Rpold IliliitelluilceqIII li t'nenlt includillJg vaarious type o1 CnOIIOOu. ot_ifci' and l Iraivig

equilu nelit *vere al'su d-eliv-led to Ilhe provin ces.

A colincered eflblrt. was also Illnde I.% Ithe (- ool diflmtiIi:'iosullants ,)d Advisors togelhler wv ih th)e 1)11 D ;SR;111'RIVO colillepartplisto caim,-out triiiiing plogain TnMnl adi hpoics Ti nuI II Mlto Cll-UI I *illllgpl ull,'UI ill N4lallilaalld ill tile p Vll tfS 'Ulil'

conductedA gave enmilphasis Oil the C"apabi it imiprvemety i.iintaininyequilpment aNd ioadl facili[ies. luouoh joilit eLlodis, Ile [e-n allsoni"proved and updAted hlie l.lNNMM anld the (Thi.1 which wevrelrplo(1dlc(Id i(l distilbuted (o ;all plroviin"cs ,illd Ii,.jor cihi .s brl.natiollwidte implementationl.

S;enior D11,(I staf wveroe also sent lo atten1d overseas Irailiunswand conferencefseniiiiilnas condcticted l v Ilte IRF in VWashiiilgolii an1dArizona. IU.S.A. It also includ-es l1te Ilnrclm.se of 16 sets (45 volumnesper set) of RF video tapes on1 coiistiictioni inspteclion, road mnaiiteilanceoperation, and equilment nmailntenfauce amid Operationl. ilie said tapeswere used bvy te traineld local stfffor re-echo Iraintil°gs ini the differentregionis anrd provinces.

Overseas studv ton-s and posl-m-aciiale stiudies for seuior statlwele tnot pushed through becauise of the issumcie of govelilllelit'secololllmy IlleaSures Onl overseas tlavels alid tlie needl to maximize tIIe ISe

of available manpower lo cope up with thIe projecl &elays.

Aliltoughi thie project ob jective to stienviigthen istliltntioli-t-udildeffoils in tihe DlLG amd LGU was ntot clearly s1,ecilied ill tie appraisal.tie capabilities of tie PEOs were strenigthenied blv tle provision of roadmaintenance equipmenit, vor;kshiol) tools. ollice equipinenlt, inll-provodinamagemieit mianuals aind initenisive traininiiigs.

It is also wort-hwhiile to mitenttiont tihat a total of liiil1y (30) school-t,pe buildings (85 rooms) whiichi selrved as Fighimeer's Field Of-tices andlcost component of civil work coitracts were turnied-over to tlie localauthorities. Most of thte buil(lings weore constnicted withinl tile schoolcoilpoutli( anid now beinig used as schIool rooImS.

Thle consilLuictioii of engineer's field offices were statled uniderthe SRRIP and was expalndod to ithe A)13-assisted projects to conlinuethe DILG's support to the social developme-nti of lhle localities.

Thle over-all physical nccoipslnnent oftlie project c'n [e saidto he allmolst 100%4. However, (lie efiects of this cannot be judged aftera relatively slhoit period. 11Te econonmic miand social bellefits of


roads/bridges as well as tle benefits fiTorn tainiiigs aid iniprovellnellt ofmaintlena-nce capability of each provillce will take tilme to ass. Butto give an idea, an iiipactl slud', haiS beent utidell hkell ill liv: (5)provilnces to asess Ille illyrovtlinen0t in local coll(lilions dlirccllyattr ibutablle to the coumpleted road project in Ilte area. ljle result of theinmpact stiicly is discusse(l in Section 5 of tlis repoit.

B. F;'J'vALVC,.AL

It is estiniated dhal the tot-l Cost ol the DI L, A mcoilionellntt willreacih PL.92 Lillioni (US$74.18 uiillionll) comipared to 1985 appraisalestimiiate ofP1.45 Lbillion (US$77.5 miillioni). Bank's share to tlie prlojectwas pegged at US$5 7.60 m)lillioQU. Deta.ilS ar-e plreeeiited i l Table 1.

As o[3G April 1996., tolal value of wvork puid amtiounlts to P11.89bill ion equivaleut to US5 73.24 mi i lion. I b-e valu,e of work paid isequivalenit to 98.95%i,) of thie total pro ject. 0ml Ue otherhand. total loalndisbilrselitelit ol thie salile perio(l is US$5 7.60 mlillion. Ii- e ainoinit isequivalentt to 1 00% of th,e DILG loanl allocatioll.

Tnhe status of loan utilization for- in(lividtial couiponients are asfollows:

Loan Allocation Disiursenment Statis ofCollL,ojlelt (Alil l on (_1ilhion)L iUltzatLion (%J

a. Civil Works S35.50 i) $.1 98.96b. E:quipiumenit 8.60 12.48 1415.12C. ConIsultacV 5.60 5.95 IC6. 25d. TArrlaitiuji 1.40) 4. (M 288g.93e. UnallAocated 6.50 - 100.00

TOTFAL $57.60 $s7.60 If)t.10

Based oti (lie nbove figures. eqimipin-enIt aid leclillical assisltancecomilponlents used up Imost of tie unallocated fimd. The increase iniequipmiienit cost was due to low estimate duringo thie appraisal andprocureeneit of additional units muid spare par ts for the r-oad mivainteianiceequipmeLit. Consequently, US$4.0 mlillioni of tihe uniallocatedi finld wasrealigEnect to the equipment item in luite 1991. hicrease in cost on thleteclulical assistalnce colnlponiett was p?ri immily due to extenisionl of th-econsultalnts services for miole thIani two (2) years ill view of lrojectdelays.

Cost of civil works were kept close lo ilie loan alloculiomi levelby deferring tie imiiplemnenitationi of projects under the 4t6 ye.u progr aiii.These deferred projects are beinig progri-minmed for inlllemelitati ounidler ie TRT P and proposed to be financeld by thle IBRDbWVL. Thlelist of plojects and estimnated costs are shownt. ii Table 13.

-64 - Appendix D2

Page 17

5. PROJECT hll'VACT

All project toads serled predtplnidoinajitly angtitirat 1 Ilmls. Ditinz thie conductof tile feasibility studies andcl appraisal .1 major qanitifiable xetiefits w7er expected toresiilt froml thie provision of mlore economical traunspolatlion to tose, areas wvihere a31existing or potential Wallspo)t demand had been identified. lime mproject wold provideremiiote baruwgavs witih low-cust truanspolt and easy access to nziculturad extenlsionwor-kers. TIlerefore. farmer s were expected to he ailde to introd(lce hybrid varieties. toadopt diversified pro(luction aid 1miullicroppilnlg m1id to culllivate idie landul a11ilultillialely. aigrIcultural plroduclionl was expcoted to inicrease. In a"ddition, a mun1luber olcase studlies uildertakeni in ithe Philippines had shlovwn a close co relin ionll betweenimnproved roads and hikher farmngate prices for aQricultural connodiities as well asincreased tranisfr of mIo(den Larminig lccutiiqies throuo,ih agruicnltural exlenlsioln

serv ices.

Ben,efits fioml trafFic are expected1 to h)e Qeerateca a resnilt of reduceld vrellicleand ani teainenace operati,ig cosis, and transport costs of non-agricultural conmmIoditit's.sulch as consullmier oods. nerals andl l lasetWnt. Dul)uni appraisal, the roeltais ol' therural roads ra-ged lotin 12-37%, witlih weitited EIP- of 20.X°>f.

Tlhe SPRIUP Office calried ouit impact surveys onl five (5) ral road prcljectscompleted two (2) years ago. 'Tllese surveys showed diat: (1) contraiy to ex,pqectatto0is.thlere had beeln no significanit changes in fmiln tecnluology. (2) there h1a5d been increasesin the pro(uiction of certain crops and in die prices received by the faniner at diefaiiigate, (3) there lhave been substantial increase in traFfic aid economilic activitieswitinii die l)roject areas. and (4) miost of the gravel snrtbaceud roas silowedl si.s3s ofdeterioration, characterized bv suiface weauing, potholes and r-tun-off caunals within thieroadwav caised bv increaseld axle loads, excessive rains and minilial maintetnmance

activities.

The impact surveys were undertaken inl tile following, provinces:RoadNo. Province Road Section Date C'omilletedl

01 Mariminduque Matalaba-Paitayil-De 'Villa July 16. 19928.214 I;ms.. Gravel

02 Agusan del Noile iagtillanes-labadbaratx .hte 1, 199.312.654 Ikns., P(C2F

03 Surigao del Sumr Telaje--Sanisidro- September 8. 1993Maticdlum-Ml :lait12.96 kits., Gravel

04 Surigao del None Mainit-Mamisayao October 27, 199312.8 knis., G3ravel

05 Davao del Sumr Cogon-Kapatagam December 6. 199326.64 kans., GravelPCOCP

- 65 - Appendix D2Page 1 8

5.1 EcoI ilinic Project Benesits

Proj ect belnefits were qualitii (1edl ath(l ero lt te(l -hrough tIa.lic t llid SociU-

economilic impact alalasis. Betnefits wvere inII h1e fb;lli of N-etl Piesc-nti \'alil.'(NPV) andl Vellicle O)perating cost Sanvill(' l, (\V'C'cS).

1TawUspo,lt cos sa'. i ,gS,5 'vere ob aitled till loil I edlclC(d '. clice op-elatilUzcosts. blese Letnefits accrue-d to lBoll trawsport oil rators and to localpopulation tlhrot2iil reduced costs of IrallispYohllng persolns aleycilillJ tulrn po(rhdclsan(d u on-agiiClluaral comumodilies.

Non-(pianilifianle benefils w ile ako considderd like improv-de access lohlealth11 and ecdlicatiollal ficifilies mid lo olhetr puhlic sel vice.s. rOr local esi(leills.

Road iImpi ovellnets wvele locaed ill illllpove islleld ewts ihilll pr Cpiltainicoime below tfie colintrv's absolillu pov-olrt iltlrshold. Ir;eitAi:u-ies uSprlirliar illy te st.l} holding(1 and riclItIIr-al workoleis. 11 plrovi(iesfrners ieimprovedI op)pollillitties to ilmrket tleui produicts tlewreby s1i intitll iiDazpicultural productionl wilit associalteld 1 oCleltiuO Pt iIci eased incolile ;nidet.1uploynilelit for- workers i tlle a iicultural sectlor ill 0eicr-al.

5.2 Economic Antalvsis

Of the five (5) road sainples used in the impact analysis. un11%i, three (3)have increa.sedl EllUt. Two( 2) road proj ecks. 21.Itlahal. aJ:ta'uni-t)e V i IaRoad iti Maiinduique and Coguni-Knpala,wui Road in l)avao (d.1 Stir haved(ecre-isec EIR1U. Altlhouohi ecollonlic ;clivilies incrasd ill hvo(2!) projects.

tlie re(luced LIRR can) be altributed to verv ltiiJI construclioll costs.

Ill, iticrease in agJ icultural %l ene hils aI e trot siiffcjeilm to olhet t11imeIreinem-(lodis ilncreanse ill thie aIctlull conistilmti on costs. Wit iI icrea.ss in velicl.Iraflic volmitiie coul(d have resllte(l lioilr a li illcre.se ill ap 1ri ctlimiral-p 01otluction.this d1id not ninaerialize tine to nonll-adloption ot nlewv fhaitil leciliroinKy and ollerinputls.

Below iS tlhe tabulaled comIparison of the impact sludy:

7FASIBUlITY STUDY MIMPACT SMT I.) Y DIFFT-1ENC (I )Road No.t Eco. Cost EIIR(%) Eco. Cost EHIU4R(% Cst EUR

(1"n00 ('0)_ ____._ (") (.,._.,I...I) 9.843 13.9 17.551 ).'l9 78 I (96)02 4.809 18.4 32.767 23.48 581 703 1 (0.018 17.9 15.624 28.37 6004 13.028 18.1 13.853 22.50_ _6_6 21,__05 1-6.929 17.5 68.797 13.01) 306 (26)

R.oardnos. 01 nnl 05 nme still teing evRlunted for socio-(C'u'oIic leLetits

hr tOW -. ~~~~~~~~~. 8 - ilo* dr 'Er~~~~~~~~~12

PHILIPPINES[LOCOS - SECOND RURAL ROADS

ICAYAN IMPROVEMENT PROJECT/ 9 PRESENT PROJECT.

IS.~~~~~~~Pj. .11A-

I k..... s.o.oo ~~~~~~~~PREVIOUS PROJECTS:

CLASSIFICATION OF PROVINCES 6F..sb.p ~ odo ,r,t HiRIOSy Project - Loo 731 PH

BY GEOGRAPKIC REGIONS I I SCon'ro',ooodIO' OOOel Secrd Htoo.y Project - Lo- 950 PH- e 0''~~~...... B.gm;P Th.d HqI-yOO Projeol - Loo 1353 PH

NCR. NATIONAL CAPITAL REGION -S- Ferries FAI, HIRh.Oy P-o1et - 2418 PRI. ILCCOS VI WESTERN VISATAS 5t*oo 7____ A Ar- Workshops (MPH) R-ro Roods Imp,--met Pro1eol - Loo 1860 PH

1Aboo 38. Aklco bo ' C5O0 Regool B-. Workshop. (MPH)2 enet39. A.rlps.9-"

5 Lo Uo,on 42 N.os Oroideotol Roiboopso . M-o.to M. CENTEAL VISAYAS ~ rero.nlAirport 9 00 50 00 0

8. ~~~~~CAGAYAN VALLEY 44 Cebo .U Ar,portR. Rotooss ~~~43. Negro. OriertoI *. pos O s0o0 100

V q. Cgoo 46 S,qoijor, o.2IT. ilogoo 97~11. EASTERN VISAYAS / .oC,rMPH Reg.ioo Heodqoore- .....

I I. tIsoeb 47E ,oser S... ~P Rsodre12 (I,.ogo Apoyoo 48 L 1 - - rssr

13 NoeoVisoyo 49Norther Soo .' Reg._iorlRod

IR. CENTRAL LUZON 3I. S-,ht..r Lepte I * .r~ .-- btrrsolRodroIS Rotor IS. WESTERN AMNDANAO16 BOlooo 52 Zorrrlooog de1 Horse7IN-er E,Ilo 53 Zornhbong del Sor O-0528

18 Porporrgo 5 .-.19Toloo 25. Solo20 Zombole, 56. Tooo-Tioss

I. SOTHERN TAGALOG X. NORTHERN OtJNDANAO21. Aoror 57. Ago=o del Ho-s22 Rotoogo. SR. Agoso delSo

4. 23. Coo,te 39B. k.dr-o24. Loju-r 60. Cosoigoso423 Moriodqo. 61A. Misooi O-dis1oto26. O-rdooto M.rdo- 62. M,sosis Odetol* 1 327 Or,wrtd Mindoro 63. Sorigoo del NodeAAN UA E2RBOoeeo Xl EASTERN MIDANAO29 R-oo 64 0-o20 Rosobloo 635lsc Ck l So ( \ 5'..I ... I21l. Poloo 66 D-ooOeoo

V. RCL 67 Sooth Cotoloot32. A"o ER So,4oo d.l S.r,soee . 2 MARINDUQUE F~,, 33 L 33.Coscooe Hoot Xtt. CENTRAL AAIHDANAO34. Cosso. Sor 89 EL.- del Node33. Cotorrdooe 70 Looo del S.,26. M-oslso. 71 Mogsodono3?. Sorsogo 72 Norh Cotohot

73 Solto- ILoJro I -.. 4

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R ePort N,:,: 1 7 8u1

Type: ICh

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World Bank Documentdocuments.worldbank.org/curated/en/557091468092656854/pdf/multi...DPWH - Department of ... GEMS - Guide to Equipment Management Systems LBM ... (GOP) planned to