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LESSONS:

Bangladesh: Road Maintenance and Improvement Project

sector: Transport | country: Bangladesh

Time dimension of the reform process. Implementing policy initiatives entails a complex and long-term process. In general, sufficient time is needed to build political consensus, strengthen institutional capacity, and put in place necessary enabling conditions for reforms. The legislation and policy measures that were enacted required fundamental changes among institutions, which cover a longer time horizon and add some uncertainty as to the timing of realization of actual outputs and outcomes. The full extent of reforms, especially the institutional type, may extend well beyond the usual administrative life of a project loan. Also, performance targets entail time lags and as such, their effects could not be readily realized within the time frame presented in the design and monitoring framework. More success would likely have been achieved if ADB had provided a greater amount of technical assistance to help develop institutional capacity for procurement and establishment of the road maintenance fund prior to the processing of the loan.

Baseline data collection is a priority. At appraisal and during implementation, greater attention should have been given to the design and monitoring framework, especially to establishing measurable indicators and their baseline values, and target values with realistic time frames. In particular, the indicators measuring socioeconomic impacts should have been carefully designed, their initial values measured and presented, and their updates monitored throughout the project period as well as at completion. Higher priority should have been given to ensuring that baseline data were collected and reported during project implementation. The absence of these data made independent evaluation of the project considerably more difficult.

Private sector participation. ADB should closely monitor developments on the Chittagong Port access road, especially on the development of vehicle parking facilities by the private sector and the adjustment of toll fees to cope with the increased costs of toll road operations and maintenance. The government should carefully consider lessons learned from the pilot public-private partnership to make future projects more successful. Credible traffic forecasts and tolls that are set at full cost recovery are essential if the private sector is to be incentivized to participate in the transport sector.

Project design and risk analysis. The mitigation measures to address project risks were largely unsuccessful, and the project was subject to long delays, problems with land acquisition and procurement, shortfalls in demand, and insufficient funding for maintenance. Despite advance procurement actions, enactment of legislation for maintenance, and establishment of controlled access arrangements for Chittagong Port access road, the expected results were not achieved. In part, the problem appears to be attributable to weaknesses in the project design, in which the feasibility study and detailed design were not completed until 9 March 2008, seven years after loan approval. A greater level of upfront investment in project preparation, particularly in the areas of preparing credible traffic forecasts and identifying road alignments, could pay large dividends. Similarly, credible solutions can be developed upfront before finalization of the loan to address perennial areas such as delays in land acquisition and procurement.

Road Maintenance Fund. The financing and adequacy of funding for the Road Maintenance Fund is a critical risk for the corridor improvement component that needs to be monitored.

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