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LESSONS:

Timor-Leste: Emergency Infrastructure Rehabilitation Project, Phases 1 and 2 [Grant 8181-TIM and Grant 8198-TIM]

sector: Public Sector Management | country: Timor-Leste

Post-conflict intervention designs. The interventions funded by the Trust Fund for East Timor were focused on infrastructure development, which was useful and appropriate for the economic recovery process. However, peace in the country must continue. While parallel efforts by the United Nations and other partners are ongoing, ADB project designs could have included softer elements to complement these parallel efforts. Such elements include development of a strategic menu of interventions such as encouraging cross-group stakeholder meetings, developing subprojects that enable stronger exchanges between conflicting communities, and encouraging contractors to include cross-community working groups for construction activities.

Policy dialogue. Timor-Leste has experienced a series of conflicts since it became independent in 1999. The setting up of a governing administration took time, which is typical for a post-conflict country. During this transition, development partners had a unique opportunity to conduct policy dialogue with the emerging government on issues that create long-term sustainability, especially on infrastructure development, maintenance, and ensuring basic services in rural areas. However, there was insufficient policy dialogue during the initial years even after the democratically elected government was in place. Timor-Leste could have benefited from such a dialogue covering wide range of economic policies and management decisions, such as road maintenance, power tariffs, and port tariffs. These are macroeconomic issues that require continuous policy dialogue throughout project implementation.

In a post-conflict situation, generally governance suffers. It is admittedly more difficult to implement policies. This leads to issues such as lack of accountability. In the absence of a sound administrative structure, setting up an accountability mechanism can be difficult. This was apparent during the early years immediately after independence of Timor-Leste. However, the need for good governance and for ensuring accountability in all decisions needs to be highlighted during policy dialogues between development partners and the government. The government is in the process of setting up the High Audit Court, which is a step in the right direction. The outcomes of this step will need to be assessed after it has been fully effective.

Flexibility in project design. In a post-conflict scenario, there is no certainty of the accuracy of field data, specific nature of requirements, or institutional arrangements before the start of the construction activity. This requires flexibility to be built into the project design, resulting in a project that enables a series of interventions that are customized to the requirements. Such flexibility could be in the form of nature of civil works as well as the scope of rehabilitation activities. Phase 2 is a good example of such flexibility wherein supplementary funding was provided to continue the emergency repair activities. Although the design of Phase 2 could have been improved, the rationale was sound in that it aimed to continue the support for economic recovery.

In the case of Timor-Leste, the flexibility in assistance during Phase 2 could have rehabilitated the roads by upgrading them from the currently unmaintainable condition and setting up a road maintenance planning and implementation system. Similarly, in the power sector, the power plants need to be upgraded and interconnected through a grid. Unless a system of regular maintenance of these power plants is put in place and implemented, the power plants will not be able to improve their service levels.

Capacity development. Developing institutional capacity is crucial for development effectiveness in Timor-Leste. One area where the project had only partial value addition was in developing institutional capacity through continued training of project staff. Although there were several studies undertaken to develop new institutions, Phase 1 did not have any specific capacity development component and could not be expected to do so since there were no institutions in place at appraisal. Phase 2 had on-the-job training, which was a step in the right direction but not sufficient enough. The project management unit provided some training but relied mainly on consultants and continues to do so. Separate capacity-building efforts have been undertaken in Timor-Leste by ADB through separate technical assistance as well as by other development partners, but the country continues to lack skills in project management and technical aspects of infrastructure development.

ADB has provided the technical assistance (TA) for infrastructure project management for capacity development within the government. Expanding the scope of such TA projects to cover private sector contractors could help build the local industry and enable better implementation of projects. Such capacity development for private road contractors is being undertaken in other countries, such as the Lao PDR, to strengthen their project implementation capabilities.

Design simpler and realistic projects. Emergency assistance projects, especially post-conflict ones, need to be designed in a way that the outputs can be achieved expeditiously. This requires simpler and more realistic designs. The design of Phase 1 could be seen as complex since it covered three different sectors. Yet given the need for immediate restoration, this could be rationalized as appropriate. Phase 2 was relatively simple and focused on roads only. However, Phase 1 covered the entire country, resulting in high transaction costs. Such transactions costs could have been saved during Phase 2 if the latter had focused on one or two road sections in a specific geographical area and had assisted in complete rehabilitation and upgrading of the road from the sub-base. This conclusion is in line with that of a recent evaluation study by the European Commission, which recommended that packaging of disparate projects into a program should be avoided.

This highlights an important lesson for designing realistic projects with balanced expectations. Post-conflict rehabilitation is a complex process covering all sectors simultaneously. Although there are good intentions to fit in lot of different components in a project due to its emergency nature, the implementation has been found to be difficult – time and resource-intense.

Prioritize the areas of interventions. In a post-conflict context, it is important to prioritize the areas of intervention so that funds are used judiciously. For Phase 1, the areas of interventions were appropriate – roads, power, and port. These are high-priority areas, and the joint assessment mission correctly chose these sectors for funding through the Trust Fund for East Timor.

Frequent and closer monitoring of project implementation. Both Phase 1 and Phase 2 showed that early and frequent supervision by ADB is crucial to ensuring efficient project implementation. In a post-conflict situation, the government lacks adequate resources, and ADB’s value addition in this area could deliver better results. Despite frequent review missions there remained areas for improvement in ADB’s supervision of the project.

Village management committees for power sector. The experience of Phase 1 shows that the village management committees were not effective in maintaining and operating the power plants because (i) they did not have sufficient ability to ensure consistent collections, (ii) they did not have sufficient revenues to pay for the fuel to operate the diesel generator sets, and (iii) they lacked the technical expertise to operate and maintain these sets. The Trust Fund for East Timor water sector projects had similar conclusions, indicating that this structure needs to be improved.

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