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LESSONS:

Third Road Improvement

| country: Viet Nam, Socialist Republic of

The prequalification of firms that did not have the capacity to undertake civil works in a timely manner resulted not only in delays but also necessitated the extension of the input of the construction supervision consultants. The prequalification process needs to be more rigorous to avoid delays in implementation of civil works contracts resulting from the incorrect choice of contractors. Any form of qualification process is bound to falter if the lowest price bid is unconditionally given preeminence over all others. At worst, the application of International Federation of Consulting Engineers conditions of contract for international construction can become impossible when practiced with insufficiently experienced contractor management and labor. The Project was close to the limit and its professional engineering supervisory capacity was inevitably, and understandably, severely challenged in completing the national highway component (NHC) satisfactorily. Flexibility in technical supervision as a pragmatic response is essential when dealing with inexperience. The supervising consultant commendably responded by using the right approach with the small provincial roads component (PRC) contractors by, for example, basing their payment on estimation rather than on the more involved criterion of measurement.

At project appraisal it was foreseen that the roads selected under the PRC would be lightly trafficked and could be adequately improved with low-cost spot improvement. Although the majority of provincial roads are in fact constructed for light traffic, they have significant traffic loads, including heavy vehicles. With the PRC expenditure target of $20,000 per km for improvement, an important portion of the PRC roads remained under-designed after completion. The selection procedure should either have ensured selection of roads with low traffic volumes, or abandoned the expenditure limit and treated fewer roads to a higher standard. There should have been as much interaction between ADB and the Government to respond to an obvious mismatch between intent and requirement on the PRC as there was in formulating and implementing the large-scale physical modifications to the NHC. The concept and design of the PRC was essentially a repeat of the rural road component of Road Improvement Project (1996) and bore the same weaknesses. The lessons of Road Improvement Project (1996) were too late to influence the Third Road Improvement Project (1998). However, ADB’s ongoing Road Improvement Project (2001) and Central Region Transport Network Project (2005) are benefiting.

Savings were realized during the course of the NHC implementation because local contractors primarily carried out construction rather than international regional contractors as was envisaged at appraisal. The savings enabled realization of additional NHC components which have significantly improved the project and contributed to its long-term sustainability. Flexibility during project implementation is important to ensure that opportunities for further improvement can be taken. However, some restraint should be exercised regarding any expansion of physical works on the scale eventually accomplished during implementation of the NHC. The end result was far removed from that which had been evaluated at appraisal. Justification for the modification and expansion of the NHC was not as fully developed as would have been the case if these were included at appraisal. The economic feasibility of the major changes, such as the additional bypasses and extra widening in urban areas, could have been more fully investigated in terms of costs and benefits. A phasing of these additions would then have been assessed and some elements might have been shown to benefit from a degree of postponement.

The situation also placed heavy demands on project management, which lacked the capacity to rapidly process major variation orders to contracts so that the contractors could get promptly paid for work completed on the additions. This was particularly important given that the financial resources of the contracting firms were extremely limited. Confusion and consternation among all involved parties would have been avoided by explicitly maintaining the delineation between work that had been approved by ADB and work that had not. In the PRC there was a parallel, but more minor, situation. Work under the 1999 flood rehabilitation works (FRW) expanded beyond road restoration to rehabilitation and improvement of roadway well outside the vulnerable stretches. This was not recognized as a variation, nor was it formally justified to the extent that it should have been.

The implementation of sector development policy (ISDP) successfully served the Viet Nam Road Administration (VRA) well by putting in place a system of procedures and management for national network management. However, the ISDP suffered significantly from being driven by technology. Development of the road information management system (RIMS) and supporting organizational structures for its implementation were made the core issues, but these systems could not be made operational due to the lack of suitable input data. This could have been readily recognized during the ISDP formulation stage. The target should have been as much one of data acquisition as of data processing and reporting. Future similar projects should be designed around a more practical and knowledgeable appraisal of inputs available and outputs achievable and less focused on the technology to be placed between the two. Also, the formulation of ISDP-type components of road development projects should be carried out much closer to the start of implementation of the main components than was the case in this Project. Finally, the formulation should have had a significant staff training budget. There were no training resources assigned; training costs had to be sourced from the component covering ISDP data collection. This is not good practice, particularly where the implementation of new technology is involved.

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