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LESSONS:

Regional Roads (Sector) Project and Second Regional Roads (Sector) Project

sector: Transport | country: Thailand | region: Greater Mekong Subregion

Covenant compliance, especially with regard to submission of audited accounts, and adequate maintenance of project facilities, needs to be enforced thoroughly during implementation.

The most important problem encountered by the project was undoubtedly the 1997 financial crisis, which affected most contractors, resulting not only in cash flow and financial problems but also in a flow-on effect to site personnel and, in some cases, affecting contractors’ management of construction. Cash-flow problems were the single biggest cause of civil works’ delays, affecting supply of construction plant and materials, and payment of site personnel. Bidders should have sufficient financial resources during prequalification. Procurement was delayed by the executing agency’s (Department of Highway’s) unfamiliarity with ADB’s standard bidding documents and by need for Cabinet approval of contracts. Adequate management capability is essential to avoid these delays.

The project did not have a coordination or implementation unit, which made coordinating the various subcomponents difficult.

Covenant compliance, especially with regard to submission of audited accounts, and adequate maintenance of project facilities, needs to be enforced thoroughly during implementation.

The most important problem encountered by the project was undoubtedly the 1997 financial crisis, which affected most Thai contractors, resulting not only in cash flow and financial problems but also in a flow-on effect to site personnel and, in some cases, affecting contractors’ management of construction. Cash-flow problems were the single biggest cause of civil works’ delays, affecting supply of construction plant and materials, and payment of site personnel. Bidders should have sufficient financial resources during prequalification. Procurement was delayed by the executing agency’s (Department of Highway’s) unfamiliarity with ADB’s standard bidding documents and by need for Cabinet approval of contracts. Adequate management capability is essential to avoid these delays.

Too many components under the project complicated project administration and involved too many executing agencies. The project did not have a coordination or implementation unit, which made coordinating the various subcomponents difficult.

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