Incorporating utility shifting as part of the item-rate contract proved to be effective in the timely delivery of projects in some states of India. In road construction projects, the task of utility shifting is usually contracted out to a third-party entity specialized in utility shifting. However, contractors often utilize or abuse this arrangement as an excuse to delay civil works. To prevent such an occurrence, it may be necessary for utility shifting to be included in the bill of quantity items to be carried out by the contractor.
Some of this project’s initial delays can also be attributed to the need to revise the DPRs because of discrepancies or deficiencies in design, specifications, and quantities. For example, mismatches in the number of culverts and bridges relative to site conditions were found during project implementation. Additional requirements, including four lanes in urban or habituated sections, were included late in the project, requiring the issuance of variations. Further, because a wildlife sanctuary clearance was not obtained, one road was dropped from the project. In future, EAs should ensure that DPRs are more meticulously prepared to accord with the site requirements. Also importantly, that the required environmental clearances are obtained during DPR preparation.
Following the request made by the state public works department through the national government of India, this project was prepared for approval well ahead of the schedule proposed in the country operations business plan. The construction supervision consultants were recruited under ADB’s advance action facility, about 10 months before the start of loan negotiations. However, grounding the project took longer than anticipated. The benefits of advance contracting could not be realized because the EA was short of staff to undertake procurement-related tasks, and contract awards started only in quarter 1 of 2015, or three years after loan approval. This undermined the advance action’s intention to facilitate timely startup and completion. Especially for sector loan projects with multiple subprojects and contracts, such as this one, it is important that EAs/IAs have an adequate number of skilled procurement staff to ensure project readiness at loan approval and maximize the benefits of advance action.
Eight civil works packages under national competitive bidding were procured successfully using Viet Nam's e-procurement system. All the e-procured packages achieved high efficiency with an average of 50 days end-to-end procurement time. However, there were only one or two bids per package. This may be because of the new procurement procedure but may also reflect small contract values (less than $1 million per contract).
All the works contracts under this project were supervised by consulting engineers appointed to ensure that detailed engineering designs were followed, and contractors’ claims were legitimate. However, the supervision of some subprojects was insufficient to ensure timely completion and handover of fully operational, quality works. Of note were (i) a nonfunctioning pressurized piped irrigation system in Cu M’Gar, Dak Lak; and (ii) a poorly constructed irrigation system in Ea Soup, Dak Lak.
During the completion review field visits, it was observed that irrigation facilities are better maintained than low-volume rural roads. This is because budget allocations to irrigation management companies provide for a minimum level of service and people are engaged on a part-time basis to maintain canals and keep gates in operating condition. In the case of low volume rural roads, not only are commune funds more limited than provincial sources, the institutional structure to maintain alignments is also inadequate. As a result, commune people’s committees often engage voluntary groups (youth or women’s associations) to carry out basic maintenance and vegetation control at a scale that requires mechanical intervention. Without a formal organization and institutional arrangement to do the job, the maintenance of rural roads is often left undone or done too late.
With the tremendous pressure on Viet Nam’s provincial administrations to achieve economic development, investments have tended to prioritize the expansion of PRI with designs that are often based on outdated standards and cost norms. Irrigation and road designs thus typically result in lower capacity with structural weaknesses, consequently requiring repair and/or upgrade shortly after commissioning. For example, significant periodic maintenance was required for the subprojects in Buon Tria–Buon Triet communes of Lak district within just 2 years after commissioning. However, due to the limited revenue generation capacity of provincial governments, it is not always possible to meet the operation and maintenance (O&M) costs of the project assets. Given this, it is of great importance that PRI design standards adequately address current risk factors, particularly under expected climate change scenarios and the changing land-use patterns.
Unrealistic work schedules, poor procurement planning, insufficient implementation details, and loose monitoring targets prolonged implementation. A well-qualified and experienced project team leader and consultants’ familiarity with ADB processes are essential to implement an ADB-financed project.
ADB could have satisfied itself about project readiness in the key areas of detailed design, safeguards, procurement, and establishment of the project implementation unit.
A flexible approach could have been adopted with adequate supervision support for sector specialists in capacity development activities. Discussions at the technical level should have led to higherlevel discussion as the proposed reforms were far-reaching.
For the ADB-funded section of the road, the Lao PDR government could keep track of expenditures and verify if timelines and guidelines are followed. This was not the case with the PRC and Thailand financed sections. For example, the PRC used its own design standards for the road without conducting any dialogue with the Lao PDR government.
A mechanism needs to be devised for the costs to be shared in proportion to the benefits received by the stakeholders.
The IEM economic analysis indicates that the net present value of the project for the Lao PDR could be made positive if higher grant elements were used in the financing by the PRC and Thailand.
The project was able to deliver benefits to the project area through the inclusion of both the provincial highway upgrade and the rural link roads in the project design. The socioeconomic benefits of these roads were very important, allowing all-weather access to jobs and services (health care, transport). Local tourists use the rural roads to travel to scenic areas, a further source of economic development as well as of support for maintaining the environment. The HPDT advised that it is frequently difficult to gain funding for rural roads because they are of lower priority than the expressways and highways, and ADB support for these projects provided valuable social impacts.
This project was the third ADB road project in Heilongjiang (and a fourth is currently underway). The HPDT has extensive experience in road design and construction, knowledge of ADB practices and requirements, and clear boundaries for its responsibilities. Although international practices can be usefully included in projects, they do not always work well in the local context. With nearly 20 years of experience with the ADB now part of the institutional memory of the agencies involved in these projects, it is likely there are well-qualified local resources available to lead the PPTA studies and produce project designs that are streamlined to deliver the project in the local context and in compliance with ADB requirements.
The difference between the budget and actual cost of supervision and training for the project indicates that the project required substantially more supervision than planned. The HPDT attributes this greater cost, at least in part, to the selection of the low-cost bidders for portions of the civil works. The PCR states “four contracts [of the 26] (procured under international competitive bidding) were awarded on an exceptional basis [due to the very low prices] without determining the combination of bids offering the lowest evaluated cost.” Although these contracts were subjected to higher performance securities, such bids rarely include adequate management and contingency budgets. Therefore, to ensure appropriate quality, greater executing agency supervision and monitoring during construction is required. Comparisons of bids on the basis of established provincial reference prices and the expected quality of higher cost bids should be undertaken before contract awarding to ensure low-cost bidders can deliver civil works of the appropriate quality. The award process should be strictly followed, with no exceptions being made for the low-cost bids. This is likely to result in a better project implementation process within the expected supervisory budget.
At appraisal, two sections were intended to be financed by ADB. The Yevlakh-Ganja section involves much higher traffic than the Gazakh–Georgian border section. Thus, the Yevlakh-Ganja section brought greater benefits and greater socioeconomic impact to the project area. If ADB had financed the Yevlakh-Ganja section instead of the Gazakh–Georgian border section, the project might have been rated efficient as the recalculated EIRR would have been higher than the threshold of economic viability. Thus, selection of the ADB-financed project section should have been made more carefully.
Although the actual cost for the civil works sections increased by about 50%, the project still ended with unused loan proceeds of $9.65 million (Loan 2205) and SDR1.40 million (Loan 2206). These were sufficient to finance the local roads, which were estimated to cost $3.8 million. A thorough fund disbursement analysis should have been conducted during project implementation. The PCR recognized the need for greater due diligence during project design and formulation, which includes carrying out adequate cost estimations and setting aside enough resources to cover contingencies. The IEM also highlighted this lesson for future road projects.
Some indicators for impact and outcome are not readily available nor closely linked to the project. Since data are generally not readily available in Azerbaijan, sources for evaluation indicators should be identified in more detail at appraisal. Documents such as those prepared at appraisal and project completion should include sufficient data for subsequent verification and follow-up. Specific omissions were traffic data, unit benefits, and unit costs that were needed to fully comprehend the economic analysis.
In the project, two sections (0.5% of the project roads) are not yet completed owing to difficulty in acquiring the land. The NHAI recently adopted a policy that construction procurements will be started only when more than 80% of land acquisition is completed. However, even if this policy had been adopted in the project, the project still might not have resolved the issues it faced. Land acquisition is a difficult issue in India, and lack of careful consultation with landowners can lead to delays in the acquisition of land for roads. Moreover, the inclusion of religious sites in land acquisition plans entails both more time and thorough planning and consultation, as resolving the issue requires a more conservative approach.