Social safeguard designs initially underestimated the resettlement impacts, omitted right-of-way compensation requirements, and proposed unsuitable mitigation measures such as voluntary land donations. As a result, the project was non-compliant with social safeguards requirements for 26 months. Safeguards implementation came into better shape, following the reconduct of detailed measurement survey of losses and execution of a resettlement corrective action plan in 2018. Although some issues remained pending as of project physical completion in 2019, these were eventually resolved with the resumption of discussions between ADB and the EA in 2020. The experience highlights the importance of an accurate assessment of potential impacts and EA/IA safeguards capacity and EA/IA training and capacity building to ensure proper safeguards design and implementation. Context-sensitive issues such as the suitability of voluntary land donations, should be carefully weighed and agreed with the EAs/IAs at the early stage of project implementation.
The ADB grant-financed module 1 was completed more than two years ahead of the KEXIM loan-financed modules 2 and 3. However, because of the interdependence of the three transmission modules, module 1 cannot be operationalized without the completion of modules 1 and 2. The risk of procurement and implementation delays in the co-financed components should have been considered in the project design. When project components can be made technically independent, this option should be used to avoid delayed benefits.
Cost overruns initially led to the removal of one transmission line, but a shorter line was added once it was confirmed it could be completed using the project’s available financing envelope. These overruns were caused mainly by higher than envisaged materials costs. For example, between 2009 and 2011 copper prices increased by about 54%, aluminum by about 44%, and steel by about 30%. The overruns could have been mitigated by a thorough assessment of the relevant international market conditions and the incorporation of results into the project cost estimates.
The project had two turnkey contracts procured through international competitive bidding: (i) an ADB-financed $12.6 million contract, open to contractors from all ADB member countries, and (ii) the KEXIM-financed $34.82 million contract, open only to contractors from Korea. The ADB-financed contract, once awarded, was implemented smoothly. However, the KEXIM-financed contract encountered difficulties to the contractor’s limited experience in the Lao PDR, which caused delays in conducting surveys, fine-tuning technical designs, obtaining various approvals, and preparing the contractor environmental management plan.
Extended five times, the completion of this project was 5.5-year behind schedule. Delays occurred because of low project readiness and weak procurement capacity of the executing agency. As a result, against the procurement plan to award all transmission works contracts in quarter 4 of 2012, the ADB-financed contract for module 1 was awarded in quarter 2 of 2014 while the contracts for modules 2 and 3 financed by the government of Korea through the Korean Export and Import (KEXIM) Bank was awarded in quarter 2 of 2016. Contract awards could have been accelerated if the project was design or procurement ready at approval. In future, ADB and the government should identify and mobilize adequate resources to prepare detailed engineering designs and corresponding safeguards documents to launch procurement as early as possible.
Unaddressed comments from the executing agency (EA) for the Toktogul rehabilitation works, the Electric Power Plants (EPP) joint-stock company, left questions regarding the quality of the dam safety assessment component of this project. A report on this assessment was provided and accepted by the EA in-charge of the soft components and which also managed the assessment, the Ministry of Energy and Industry (MOEI). An unclear communications chain complicated matters, as the consultant disregarded EPP’s comments unless received via MOEI. In future, careful and adequate thought should be given to selecting the most appropriate EA, considering as well likely organizational changes that could impact implementation. For example, frequent changes in the government’s ministerial structures under this project hindered continuity and the smooth implementation of some components.
Often, not enough attention is given to developing indicators that are precise and can be easily assessed in post-project evaluations. In this project, the impact indicators of increased exports and increased domestic supply did not foresee the high growth in domestic demand that prevented the export target from being achieved. In this case, total supply, i.e., exports plus domestic supply, would have been a better indicator. Similarly, the output indicator of reducing commercial losses to 10% by the end of the project was poorly selected because KESC’s identifying losses is only the first step. The second step would be to introduce a targeted loss reduction program. It should also be noted that the design and monitoring framework wrongly categorized total distribution losses, including technical and commercial, as commercial losses. Recurrence of these shortcomings in future projects should be avoided as it could hamper and impact on the reliability of performance evaluations.
This project experienced some implementation delays and had two loan extensions. Toktogul’s rehabilitation was delayed by almost 2 years due to a lack of responsive bidders during the initial bidding. The establishment of the Kyrgyz electricity settlement center (KESC) was delayed by 3 years because of difficulties, including disagreements, in developing the implementation consultant’s TOR and incompatibility between the KESC server hardware and the metering and data acquisition software. Two lessons emerge from this experience: (i) contracts need to be carefully packaged, i.e., the initial Toktogul HEPP contract should have been broken into separate lots, while the two separate KESC packages for server hardware and metering software packages should have been combined to improve compatibility; and (ii) clear consultants’ TORs should be developed and agreed by all relevant stakeholders well before implementation, especially when there are complex issues to be resolved.
Utilizing loan and grant savings, a works contract to rehabilitate the 500-kilovolt switchyard at the Toktogul hydroelectric power plant (HEPP) was added to the scope of this project. The additional scope required a supplementary initial environmental examination (IEE) that included the handling of asbestos-containing material, which was not covered by the EMP and therefore needed to be addressed. The executing agency and the project management consultant for the Toktogul HEPP experienced some difficulty in doing this because precise requirements were not specified in the EMP. It would have been useful for ADB to conduct a training on asbestos handling in addition to ADB’s Safeguard Policy Statement. In ongoing and future projects, training and advice on ADB’s safeguard policy should be strengthened and made responsive to issues and concerns that emerge during project implementation.
The project was prepared through a sequence of four processing missions, without the benefit of dedicated project preparatory TA. In retrospect, given the weaknesses in the DMF, the four departures from the original scope of work, and the methodological shortcomings in the EIRR calculation, the project could have benefited from more careful preparation. Due to the unexpected long delay between the end of the last processing mission and the project’s approval following the political instability during 2000– 2002, there was ample opportunity for a more complete preparation. Small-scale project preparatory TA should have been considered during this period to better prepare the project.
The project processing missions could have consulted the key project stakeholders more effectively. For example, a decrease in the port service charge by 50% in 2009 and its elimination by 2010 was cited as a project benefit, but this would have required agreement of the shipping agents and shipping companies to implement. The same applies to the Lautoka reclamation component, which should have been undertaken only after commitments by shipping companies and agents had been obtained. More thorough consultation would have ensured that all parties were aware of their commitments and resulted in better project design.
Related to the above lesson on better consultation, the project should have done a better risk assessment. A key impact assumption overlooked was elimination of the port service charge by shipping agents and companies. Another assumption that shipping agents would not construct their own container yards near Lautoka Port should have been highlighted as a key output assumption for sustainable utilization of the reclamation area financed by the project.
Higher priority should have been given to ensuring that baseline data was collected and reported during project implementation. The data that should have been collected includes (i) benchmarking data, to provide MPAF management with objective reference points for impact evaluation corresponding with the needs of the port users and consumers; (ii) benefit monitoring data, to ensure that the project benefits actually accrue to the port users; and (iii) post-project performance evaluation data, to assess overall effectiveness of the project. The PCR identified this as a lesson, and this is reconfirmed at the evaluation stage. Subsequent to the PCR, Fiji Ports Corporation Limited and Ports Terminal Limited have introduced a more systematic performance management system, but port statistics provided to the IEM were still insufficient. The absence of these baseline data targets made independent evaluation of the project considerably more difficult.
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 RCU could have been embedded within an established organization (e.g., an intergovernmental agency or nongovernment organization) or existing program with similar objectives to the CDC1. By hiring a consultant and housing the RCU independently, institutional capacity for coordinating CDC was not developed within these agencies, risking loss of momentum after project closure.
The same team of senior staff continued to guide the GMS CDC1 project though all stages from the concept paper, formulation, implementation, and writing of the PCR.
This was compounded by the executing agencies’ difficulty in retaining qualified national staff for financial management, lack of in-service training from ADB, and limited support from ADB resident missions since the project was managed out of Manila.
Regional cooperation for CDC is a long-term prospect. As a first generation GMS project supported by ADB, the CDC1 project left behind a legacy of regional political commitment, trust, and familiarity among counterpart colleagues in Cambodia, the Lao People’s Democratic Republic, and Viet Nam countries, and knowledge products generated from Regional Coordination Unit (CDC1 and CDC2) -supported studies.
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.
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.
As new technologies are made available through various projects, close monitoring of their application and performance and as well as best practices should be incorporated so they can contribute to the success of the program and projects. Accumulation of this knowledge and its proper dissemination within ADB will ensure that it can be applied to other projects in different locations.
Road investments alone cannot ensure that sustainability objectives are achieved; complementary measures are needed to offset the adverse impacts of infrastructure provision, but to support this, traffic accident and count data need to be accurately collected and monitored. Also, a properly designed roadway which is effective in reducing the frequency and severity of road accidents, such as the road built by this project, could be used by the road authority to adopt and implement a coherent national road safety policy and program. In this project, the provision of proper rest and refueling areas every 75 km–100 km would reduce driver fatigue and enhance the safety and sustainability of the road.