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LESSONS:

Road Network Project

sector: Transport | country: Bhutan

1. The project implementation was marked by substantial cost overruns. The detailed design put the cost for civil works about 35% higher than that estimated at appraisal. During implementation, the actual cost rose by about another 15%, including 6.7% for extra works and 8.2% for price escalation in construction materials. Such cost overrun caused three feeder roads packages to be removed from the project scope. In future, similar projects, this experience should be duly taken into account when estimating project costs as well as schedules. Additional costs and time were required due to unexpected amounts of rock needing to be excavated. This would have been difficult to detect in the design stage and could be found only during implementation. Therefore, it is recommended that sufficient contingencies be provided for similar projects.

2. Implementation delays were mainly caused by slow and repeated procurements. Although, the project management office was retained from the previous ADB-funded project, most of its staff were newly recruited and not experienced with ADB Procurement Guidelines. For future projects, it is desirable to retain staff with ADB project implementation experience. Furthermore, adequate training on project management and implementation should be provided to relevant staff. In order to expose as many staff members as possible and provide repeated learning opportunities, on-site training by the consultants should be considered at an appropriate time during the implementation phase. Training design and resource should be appropriately incorporated and allocated during project design. The capacity of the executing agency to implement the road asset management system, including the data gathering, in particular, could have been better assessed at appraisal.

3. The local competitive bidding adopted in the project provided an opportunity for domestic firms to learn international best practice under the supervision of an international consulting firm. Domestic contractors had weak capacity in management, technical staff, fund availability, and equipment, thus causing delays in project implementation.

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