AFRICAN DEVELOPMENT FUND

ETHIOPIA

JIMA – MIZAN ROAD UPGRADING PROJECT

PROJECT COMPLETION REPORT

(PCR)

COET/RDGE

September 2018

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I BASIC DATA

A Report data

Report date Date of Report: 09 March 2018

Mission date (if field mission) From: 11 February 2018 To: 17 February 2018

B Responsible Bank staff

Positions At approval At completion

Regional Director Mr. S. Kayizzi-Mugerwa Mr. Gabriel NEGATU

Sector Director Mr. G. MBESHERUBUSA Mr. Amadou OUMAROU

Sector Manager Mr. J. RWAMABUGA Mr. Abayomi BABALOLA

Task Manager Mr. M. WA-KYENDO Mr. E. GARBADO

Alternate Task

Manager

Mr. M. WA-KYENDO

PCR Team Leader GARBADO, Eriso Guntura

PCR Team Members Ms. MERHATSIDK Mulumebet

Mr. AGUMA Bassy Jeremy Mr. OKU Felix

C Project data

Project name: Jima – Mizan Road Upgrading Project.

Project code:P-ET-DB0-011 Loan number: 2100150013218.

Project type: Road Upgrading

Construction

Sector: Transport

Country: Ethiopia Environmental categorization (1-3): I

Processing milestones (Loan) Key events (Loan) Disbursement and closing dates

(Loan)

Date approved: 13 Dec 2006 / Cancelled amounts: UA 9,957,673.72 Original disbursement deadline: 31

March 2013

Date signed: 12 January 2007 Supplementary financing: NA Original closing date: 31 Dec 2012

Date of entry into force: 9 May

2008

Restructuring (specify date & amount

involved): NA

Revised (if applicable) disbursement

deadline: 31 March 2016

Date effective for 1st

disbursement:

Extensions (specify dates): Revised (if applicable) closing date: 30

Dec 2015

Date of actual 1st

disbursement:

PROJECT COMPLETION REPORT FOR PUBLIC SECTOR OPERATIONS (PCR)

AFRICAN DEVELOPMENT

BANK GROUP

2

Processing milestones (Grant) Key events (Grant) Disbursement and closing dates

(Grant)

Date approved: Cancelled amounts: Original disbursement deadline:

Date signed: Supplementary financing: Original closing date:

Date of entry into force: Restructuring (specify date & amount

involved):

Revised (if applicable) disbursement

deadline:

Date effective for 1st

disbursement:

Extensions (specify dates): Revised (if applicable) closing date:

Date of actual 1st

disbursement:

Financing source (UA): Disbursed amount

(amount, UA):

Percentage

disbursed (%):

UnDisbursed

amount (UA):

Percentage

undisbursed (%):

Loan: 65.00 UA 55,754,267.53 m 85.78 9,245,732.47 14.22

Grant: NA

Government: NA

Other (eg. co-financiers). Add

rows as needed

NA

TOTAL UA 55,754,267.53 m 85.78 9,245,732.47 14.22

Financing source (UA): Committed amount

(UA):

Percentage

committed (%):

Uncommitted

amount (UA):

Percentage

uncommitted

(%):

Loan: 65.00 57,373,172.03 88.27 7,626,827.97 11.73

Grant:

Government: 36.53 100 00.00 00.00

Other (eg. co-financiers). Add

rows as needed.

TOTAL 93,903,172.03 88.27 7,626,827.97 11.73

Co-financiers and other external partners: Government of Ethiopia in the amount of UA 36.53 Million.

Executing and implementing agency (ies): Executing and implementing agency (ies): The Ethiopian Roads Authority (ERA) was the Executing Agency. A Project Coordinator was designated to monitor the activities during implementation. Regional and Woreda (District) administrative bodies facilitated execution of mitigating measures, especially relating to land acquisition and possession of site free of encumbrances.

D Management review and comments

Report reviewed by Name Date reviewed

Comments

Division Manger Mr. Zerfu TESSEMA (OIC RDGE 4) Mr Jean Kizito KABANGUKA

Sector Director Mr. Amadou OUMAROU

Country Manager Mr. Abdl KAMARA

Regional Director Mr. Gabriel NEGATU

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II Project performance assessment

A Relevance

1. Relevance of project development objective

Rating* Narrative assessment (max 250 words)

4 The project road traverses two Administractive Regions of the country, i. e. Oromia Regional State and

The Southern Nations, Nationalities and peoples (SNNP) Regional states. The Oromia Regional State has

an area of 284,538 square kilometres, while the Southern Nations, Nationalities and peoples (SNNP)

Regional state has an area of about 105,887 square kilometers, accounting for about 25 and 10 percent of

the total landmass of Ethiopia respectively. the project road starts at Jima town and crosses Jima Zone in

Oromia Rigiona State and traverses along Keffa and Sheka -Bench Maji zone in SNNPR. Its location is

featured with fertile arable land and their huge investment potential. However, the project area had

remained isolated and far from development due to the very poor and dilapidated road infrastructure

provision especially prone to total disconnection during rainy seasons. Infrastructure development was

very challenging and had remained unattainable for many years.

The poor condition of the road infrastructure led to low operating speeds and difficult operating conditions

during wet seasons. The development of road infrastructure was considered to be important for market

integration between the rural and urban sectors. The realization of upgrading of Jima-Miza Road has

bolstered the economy of the regions and opened up the area, and improved mobility and accessibility

that are essential factors to the achievement of all other aspects of economic growth.

The project road is sliced into two sections (Jima – Bonga 110 km & Bonga – Miza 120 km). The contractor

for both lots is Keangnam Enterprises of South Korea and the consultants are Lea International (Canada)

with Core Consultants (Ethiopia) for Lot 1 and ICT India with ITC Ethiopia for Lot 2. The project is already

completed successfully as of February 2013 for section 1 and February 2015 for section 2 and is fully

opened for the public traffic.

The originally estimated cost of the project including contingencies was ETB 1.429 billion (about 42.98

million UA at the [December 2017] exchange rate 1UA= 33.25 birr) whereas the actual cost of project up

to completion is about ETB 2.285 billion (about 68.72 million UA at project completion on December 2017

[1UA= 33.25 birr] the overrun being 59.89%, the major contributor of the cost overrun; (i) price escalation,

(ii) variations due to increase in work volue (iii) claims due to delayed right of way(ROW) clearance and

associated costs.

* For all ratings in the PCR use the following scale: 4 (Highly satisfactory), 3 (Satisfactory), 2 (Unsatisfactory), 1 (Highly unsatisfactory)

2. Relevance of project design

Rating* Narrative assessment (max 250 words)

3 The design of Jima – Mizan road had been initially carried out by an international consultant known as O’Sullivan International consulting Firm of UK in 1996. During the project appraisal the Construction works proposed for upgrading the existing gravel road to a bituminous (Asphalt Concrete) all-weather engineered road with a 7-m carriageway with 1.5 double sealed shoulders on either side of the carriageway for a total length of 230 km between the towns of Jima - Mizan. Major realignment (Bonga by-pass of 6.5 km was provided to serve the town of Bonga by through traffic. However, this section of the road on the realignment has crossed the highly wet and susceptible to landslide area. At km 4.5 a landslide happened and the ERA has made a geotechnical investigation for repair and heavy maintence and it is underway.

4

The Detailed Design review and Tender Document Preparation of the project was later on done by Design Review and Tender document preparation was done by ICT consulting Firm of India in 2007. The Design of the road was modified on the basis of the proposed realignment improvements to the horizontal curve and the vertical profile of the existing road in order to accommodate a design speed of 60 k/h and to meet road safety requirements as well as widening of the road to a 7 meter carriage way width and 1.5m wide shoulders on either side of the carriageway.

3. Lessons learned related to relevance

Key issues (max 5, add rows as needed)

Lessons learned Target audience

Delay in project implementation

The delay in project implementation contributed to the cost overrun and high price escalation. The expeditious implementation of projects could reduces the amount of the overrun.

Executing Agency

Route selection along the rugged terrain suscpitable to land slides

The route selection should follow the geotechnically and geologically suitable soil strata formation to avoid the absolute maximum geometric design values;such as horizontal and vertical geometric design parameters

Executing Agency

Construction in restricted area

The project road traverses the UNESCO Heritage tropical forest area. The construction was done by half carriageway width to minimize the damage to the forest. The construction work was hampered by the flow of traffic during the whole construction period. When planning for civil works in restricted areas there is need to take into consideration the longer time it takes to carry out civil works in restricted areas due to preserving the natual heritage.

Executing Agency

Adverse climatic conditions

The project is situated in one of the heaviest rainfall area of the country. The specifications for works should address this special climatic issue in appropriate manner.

Executing Agency

Magnitude of the works.

The project should be sliced in adequate sections/lengths so that average contractors can manage it with respect to the allowed completion period.

Executing Agency

B Effectiveness

1. Progress towards the project’s development objective (project purpose)

Comments

Provide a brief description of the Project (components) and the context in which it was designed and implemented.

State the project development objective (usually the project purpose as set out in the RLF) and assess progress.

Unanticipated outcomes should also be accounted for, as well as specific reference of gender equality in the project .

The consistency of the assumptions that link the different levels of the results chain in the RLFshould also be considered.

Indicative max length: 400 words.

In line with the overall Transport Sector objective of improving the efficiency and the capacity of the transport system to support economic and social development in Ethiopia on a sustainable basis, the objective of the project was to improve road transport service levels between the Towns of Jima and Mizan and to facilitate market integration of the zone (Oromio and SNNP Regions) with the rest of the country and export markets. The Project was designed to address accessibility and mobility in the two economically very productive regions producing about 90% of Coffee and 25% of livestock in Ethiopia. The Project outputs (Components) that have been successfully achieved despite the implementation delays and cost overruns arising partly out of design deficiencies include: i) Construction/upgrading works of the 230-km Jima – Mizan road from gravel road to Asphalt Concrete standard; ii) Consultancy Services for (a) supervision of construction works of (i) above and (b) project audit services; and iii) Resettlement/Payment of Compensation to affected population.

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The upgraded road to asphalt standard has opened up the hitherto inaccesible two regions and connected them to the other parts of the Country. Mobility has been improved with Traffic on the road increasing four fold from about 284 vehicles per day at appraisal in 2006 to 972 vehicles per day when the completed road was open to traffic in 2016. The upgraded road has contributed to increased agricultural production especially for Coffee among other crops, tourism and trade have been facilitated. Social services that include Education, Health and Governement administrative work have equally been enhanced by the upgraded road. The overall projected economic benefits at appraisal have been exceeded; as demonstrated by an Economic Interanal rate of Return (EIRR) of 23.8% as compared to the projected EIRR of 20.5%

2. Outcome reporting

Outcome indicators (as

per RLF; add more rows as needed)

Baseline value (Year)

Most recent value

(A)

End target (B)

(expected value at project

completion)

Progress towards

target (% realized)

(A/B)

Narrative assessment (indicative max length: 50 words per outcome)

Core Sector

Indicator (Yes/No)

1.Reduced VOCs

USD 0.75/ vehicle-

km. (2006)

USD 0.26

(2016)

USD 0.34 (2011)

215% Composite VOC reduced from USD 0.75/veh-km in 2006 to USD0.26/veh-km in 2016, equivalent to 65% reduction. Target reduction was 55%.

Yes

2.Reduced Travel Time Cost

USD0.128 (2008).

USD 0.04 (201)

USD 0.04 (2011)

100% Average annual travel time cost per composite vec-km reduced from USD0.128 in 2008 to USD 0.04 in 2011 when project road is completed.

Yes

3 Reduced Travel Time

5 Hours (2006)

3 Hours (2016)

3 Hours (2011)

100% Travel time has reduced from 5 hours before the road was paved to 3 hours after civil works were completed as anticipated at Appraisal due to improved (paved) road surface, implying motorists are able to maintain the design speeds.

Yes

4. (a) Increased Traffic Levels

22.34 Million (2008)

44.68 Million (2016)

31.27 Million (2011)

143% Travelled vehicle-km increased by 100% from 22.34 million in 2008 to 44.68 million in 2016 on completion of the project. Project increase at Appraisal was 40% to 31.27million. The increase is estimated based on the rate in the

PHD Thesis- Socio-Economic Impacts of Roads in Ethiopia-including the Project Region Oromio, By Dr. Belew Dagnew Bogale, UNISA, June 2016,

Yes

4 (b) Increased traffic

284 vpd (2006)

972 vpd (2016)

557 vpd (2011)

176% The high increase (four-fold) in traffic volume is attributed mainly to improved road conditions along the project road with correspondent reduction in travel time.

Yes

5 Reduced Annual Recurrent Maintenance Cost Needs

USD 440.7/km

(2006)

4,126 (2016)

4,126 (2011)

100% Annual recurrent maintenance cost needs were projected to decrease from USD 440.7/KM in 2006 (at appraisal) for a gravel road to USD 60.8/km in 2011 for a constructed asphalt surface standard. It is noted that according to the records from the Executing Agency (ERA) the annual recurrent maintance cost for asphalt surface is about USD4,126 (2016) partly due to inflation. It could also imply that the projected routine maintenance cost could have been under-estimated at appraisal.

Yes

6

Rating* (see IPR methodology)

Narrative assessment

4 Four out of six outcomes were fully achieved while current data was not available for two outcomes (ratio transport cost to farm-gate prices and passenger tarrifs on improved roads). It can however be deduced that the four-fold incease in traffic implies reduction in transport costs and tarrifs).

3. Output reporting

Output indicators (as

specified in the RLF; add more rows as needed)

Most recent value

(A)

End target (B)

(expected value at project

completion)

Progress towards

target (% realized)

(A/B)

Narrative assessment (indicative max length: 50 words per output)

Core Sector

Indicator (Yes/No)

230 km of road Construction between Jimma and Mizan towns

230 km road from gravel level to bitumen paved road.

230 km bitumen paved raod

100 The works for 230 km of bitumen surfaced

road Jima – Bonga Lot 1 (120 km) was

completed 28 February 2014 and Bonga –

Mizan Lot 2 (110 km) was completed 28

February 2016. The ERA will maintain the

road in accordance with the maintenance

action plan after its completion

yes

4. Development Objective (DO) rating

DO rating (from IPR

update)* Narrative assessment (indicative max length: 250 words

4

The upgraded to asphalt concrete surface; Jimma – Bonga – Mizan road and opened to traffic in 2016

year has improved accessibility and mobility in the two Regions of Oromo, and Southern Nations

Nationalities and Peoples Regional State (SNNP). The upgraded road has enhanced socio-economic

development along the vicinity of the project in addition to providing a link to the major trunk road

serving and interconnecting the south –western route corridors. The upgraded road is playing a crucial

role in developing and integrating the regional economy. In addition to this currently relatively

undeveloped area is believed to have important potential for agriculture and related investments in

all economic development sectors will undoubtedly grow all along and around the completed road

project. The project roads provide access and short cut to important agricultural and tourist areas. It

makes a significant contribution to removing some of the constraints on agriculture and tourism.

The various regional and national economy benefits from the upgraded road are confirmed by higher

economic internal rate of return after upgrading which is higher than projected at appraisal at 23.8%

as compared to 20.5% projected at appraisal.

Despite the various implementations delays and cost increases, the Project met the sector outcomes

and is rated Highly Satisfactory. The Project also met its development objectives and is rated Highly

Satisfactory in meeting its expected outputs. The combined development objective rating for the

project is Highly Satisfactory.

During the 6 years construction period, the project created employment for a total of 2580 monthly at its peak, more than 60% of which is estimated to have benefited the local population. While the project had a target of 30% female employees, project records show that only less than 5% of the employment generated benefited women. The HIV/AIDS and road safety sensitization service provided to both the local population and the project staff has helped raise awareness.

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5. Beneficiaries (add rows as needed)

Actual (A) Planned (B) Progress towards target (% realized) (A/B)

% of women Category (eg. farmers, students)

2580/month 129/month Local labour

6. Unanticipated or additional outcomes (add rows as needed)

Description Type (eg. gender,

climate change, social, other)

Positive or negative

Impact on project (High,

Medium, Low)

1. The upgraded road has led to improvement in public transport services as compared to before upgrading. Traffic at the opening of the road indicate that the composition of small buses at completion has increased to 22% (2016) from 11% at appraisal (2006).

Economic, Gender, Social

Positive High

2. Traffic levels after project completion have increased four-fold i.e higher than predicted levels at appraisal (two-fold). In addition to the increase in traffic volumes, the composition of small buses for public transport has increased (doubled) from 11% at appraisal to 22% at project completion in 2016. While the increase is positive in the context of improved mobility, it also has negative implications especially with inadequate road safety measures as is the case in the Project area. Despite absence of specific traffic accidents in the Project area, the general trend is based on other secondary sources of data indicate that accidents have been increasing in Ethiopia including in the two Project Regions. T, between appraisal and project completion in 2016. This calls for enhanced road safety measures on the completed Project Road.

Economic, Social Positive/ Negative

Medium

3. The upgraded road has contributed to other unquantifiable social benefits related to the improved accessibility to economic and social facilities after road upgrading. These were assessed only qualitatively due to absence of baseline data before and after road upgrading. The project has resulted into easy access to hospitals, health centres, schools, domestic water sources and other social facilities that were relatively difficult to get to before the road upgrading. This translates into positive impact on access to economic opportunities; and gender as more women, boys and girls benefit.

Social/Economic Positive Medium

4. The estimated road construction cost at appraisal had doubled by the completion the upgrading works of the road. This implies that the overall economic benefits of the road though positive are lower that what would been realised if the cost did not double. The lesson learnt is the need for adequate design reviews prior to commencement of works.

Economic Negative Medium

7. Lessons learned related to effectiveness (add rows as needed)

Key issues (max 5, add rows as needed) Lessons learned Target audience

procurement delays. An implementation delay due to inadequate capacity for procurement actions is still a problem and remains as one of the main reasons for the unsatisfactory performance of the Executing Agency. The EA upgrades the skills of the procurement officers from time to time and retain an experienced ones by giving the necessary incietives.

Executing Agency and the Bank

8

Project Implementation delay The project implementation was delayed by stopages due to obstructions within the road right off way limit. The removal of utility lines such as electric lines, water supply and other puplic installations were hindrance to the progress of implementation. Rigorous work should be done by the EA to avail to the contractor to hand over sufficient working site before commencement of the works.

Executing Agency and public institutions.

Project implementation delay The right of way clearance affected people have a problem with inadequate compensation estimation and payment mechanism, sometimes causing dispute and disruption of pregress. To avoid the stoppage of works and subsequent delay in completion period the Project Affected People (PAP) should be compensated for the property they lost due to the encroachment of construction corridor and road formation limit.

Executing Agency

Project cost over-run The Bank and the Borrower should engage more proactively at the project preparation stage to help minimise the need for design modifications and consequent delays and costs over-run during implementation.

Executing Agency and the Bank

Tracking and documentation of socio-economic impact

There is a need to plan for and invest project resources in collection of baseline data on socio-economic impact and adequate tracking and documentation of project progress in this regard to enable project development impact analysis.

Executing Agency and the Bank

C Efficiency

1. Timeliness

Planned project duration – years (A) (as per PAR)

Actual implementation time – years (B) (from effectiveness for

1st disb.)

Ratio of planned and actual implementation time (A/B)

Rating*

3.00 years 7.00 years 42.85% 3

Narrative assessment (indicative max length: 250 words)

The Road upgrading works were started 21 April 2008 and completed 28 February 2014 for Lot 1 and started 23 April 2008 and completed 28 February 2016 for Lot 2 and now it is fully opened to traffic. However the original completion date for Lot 1 was 20 February 2011 and for Lot 2 it was 22 February 2011.

In view of the targets set out at appraisal the timeliness in the actual project implementation was unsatisfactory. The revised completion date for the civil works of the project has happened due to some design modifications and variations of activities and subsequent increase in the volume of works. Compared with the actual completion dates this gives a time overrun of about 142%. This delay has mainly been due to the additional civil work activities following the design modifications. The delay in project implementation is also reflected in the slippages of actual disbursement. The ADF loan amount, as at appraisal, was to be disbursed during 2007-2011. However, the actual disbursements were spread over 2008-2015.

It was also noted during the review of the implementation completion report of EA that there are road formation side slope failures in the cut-fill and embakment of the road sections . At Bonga town realignment (km 4+500), km 197+000 and several other places between Wacha Maji junction and Mizan town. This could be attributed to inadequancies of detailed design in geotechnical investigation and hydrological data collection and hudroulics analysis specific to the project’s area climatic conditions. Other causes of the failure could be deficiencies in the geometric design of the road and the quality assurance procedures regarding construction materials and workmanship. Eventhough, failures at sections of the road are redesigned and repaired the contribution to project . delay was significant.

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2. Resource use efficiency

Median % physical implementation of RLF outputs financed by all financiers (A) (see

II.B.3)

Commitment rate (%) (B) (See table 1.C – Total commitment rate of

all financiers)

Ratio of the median percentage physical implementation and

commitment rate (A/B)

Rating*

67.68%

88.27%

0.77

3

Narrative assessment (indicative max length: 250 words)

The project cost estimate at appraisal was UA 101.53 Million net of all taxes and duties, however a provision of 10% physical contingencies and 11% price escalation were taken into consideration. The ADF financing covered UA 65.00 million which 64.02% of the project cost and the Government of Ethiopia (GOE) financed UA 36.53million amounting 35.98%. GOE was in addition responsible to cover all taxes, duties, royalities and Right of Way acquision component of the project cost for PAPs. The actual disbursement of the project financial cost is ETB 2,284.81 million (which is UA 68.72 at current rate of exchange 1UA=ETB 33.25).

The loan amount was utilized exclusively for the implementation of Jima - Mizan Road Upgrading Project as originally committed by both financiers during the appraisal period. During the implementation of the project ERA as the executing agency was responsible for all technical and management issues of the road project. The EA assigned a project engineer to follow up the day-to-day progress of the works and expedite the implementation by giving quick solutions for the problems arising. Regular monthly meeting on site were conducted between the contractor, supervision consultant and the EA as part of contractual obligations to be fulfilled. . All Payments including monthly Interim Payment certificates to the contractor and consultant were effected through ERA. The loan details, the estimated and the actual expenditures of the road project are shown in Annex I.

3. Cost benefit analysis

Economic Rate of Return (at appraisal)

Updated Economic Rate of Return (at completion)

Rating*

20.5% 23.8% 4

Narrative assessment (indicative max length: 250 words)

Economic re-evaluation was done following the Cost Benefit Analysis Methodology using Highway Development and Management (HDM IV) model version 2.08 at 10.0% discount rate and analysis period covering 25 years of road service. Two Options were considered: (i) “Without project” do minimum case : Maintenance of a gravel road; (ii) “With project”: Upgrading to Asphalt Concrete standard. Investment and Maintenance Costs were considered among other assumptions. For economic re-evaluation purposes, the same assumptions were maintained, with some adjustments to take into account various changes different from Appraisal. Re-evaluation considered final investment costs and traffic levels on completion. As at appraisal the economic indicators considered were the Economic internal Rate of Return and the Net Present Value (NPV) which faiciliated a comparison between the projected and realised benefits. It is noted that despite the doubling of the investment cost by project completion time, the economic benefits as represented by the EIRR are higher than projected at appraisal. The EIRR inceases to about 32% when the standard conversion factor used at appraisal of 0.74 is applied in the HDM-4 model at completion instead of the conversion factor of 0.94 used at completion due to changes that have taken place in the tax regime for road construction inputs in Ethiopia

4. Implementation Progress (IP)

IP Rating (derived from IPR update) *

Narrative comments (commenting specifically on those IP items that were rated Unsatisfactory or Highly Unsatisfactory, as per last IPR). (indicative max length: 500 words)

3 The civil work contract was procured through international competitive bidding (ICB) with pre-

qualification in accordance with the Bank’s Rules and Procedures of procurement. The SPN for PQ

was advertised on UNDB journal and the Ethiopian Herald on 28 February 2007 (Annex III). The letter

10

of invitation to the pre-qualifid contractors was issued on 30 August 2007. Following the Bank’s Rules

and Procedures of procurement the Works contract was signed on 20, February 2008 for both lots

with Keagnam enterprise of Soth Korea.

The Project consisted of: (i) the upgrading of the existing gravel surfaced road by some realignment

improvements to the horizontal curve and the vertical profile in order to accommodate a design

speed of 60 km/hour and to meet road safety requirements as well as widening of the road to a 7

meter carriage way width and (ii) consultancy services for supervision of construction works (iii)

project audit service. The Road upgrading works for 230 km of bitumen surfaced road Proposed for

whole stretch between Jima and Mizan. Jima – Bonga Lot 1 (120 km) was completed 28 February

2013 and Bonga – Mizan Lot 2 (110 km) was completed 28 February 2015 and is fully opened to

traffic.

During the entire project implementation period the experience has been that the contractor, while

very resourced in terms of equipment, has not managed his resources well enough. The supervision

missions reviewed the performance of the contractor, management capacity and methods and

identified gaps that have contributed to the delay and proposed way forward: (i) to improve the cash

flow problems that are curtailing his ability to supply fuel and spare parts (his equipment down time

is too high), construction materials, hire skilled labour and produce sufficient output, (ii) to enhance

the the quality and increase the number of skilled workers supervisors / engineers, (iii) to adapt to

adverse weather of the area, (iv) to optimize the utilization of his equipment.

The consultants for supervision of Road upgrading works were selected by ICB and the contract was

signed on 21 November 2007 and 2 November 2007 for Lot 1 and Lot 2 respectively. The scope of

supervision services consisted of review of design, assistance in the pre-qualification submissions of

contractors, bid invitation, review, evaluation and preparation of bid evaluation reports. The

consultant major service included, implementation supervision (land acquisition and resettlement,

environmental mitigation, quantity control, quality control, monitoring and recording), supervision

of maintenance activities (during Defects Liabiliy Period). The project corridor is located at the heavy

rainfall area of the country and impacted by the geological and geotechnical problems and prone to

landslides, which the consultants engaged in revision and rectification of these problems during the

entire duration of the works. The Project audit services aimed at ensuring that the proceeds of the

loan were utilized for the purpose of which they were intended to.

5. Lessons learned related to efficiency

Key issues (max 5, add rows as needed) Lessons learned Target audience

Capacity Building 1. There is a high turnover of engineers in the the Executing Agency, which puts the expertise sustainability in a jeopardy. The government should pay competitive incentive for the engineers to avoid the high turnover.

2. Executing Agency need to reinforce its capacity for reviewing and supervising design studies;

3. There is still a need for capacity strengthening of the executing agency for monitoring and evaluation of works.

Executing Agency and the Bank

Timely RAP implementation There is a need to plan for and execute timely and consultative handling of compensation / resettlement issues to avoid delay in project implementation

Executing Agency

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D Sustainability

1. Financial sustainability

Rating*

Narrative assessment (indicative max length: 250 words)

4 The sustainability of the project road mainly depends on the provision of regular and recurrent

maintenance with stable funding mechanism and proper enforcement of vehicle axle load control.

The Office of Road Fund (ORF) is now responsible for the collection of revenues from various sources and

the fund is fully dedicated to the maintenance of all roads in the country that include Federal roads

administered by ERA, regional roads and roads under municipalities. It was established in 1997 with an

objective of financing road maintenance works. The sources of Road Fund revenues comprise levy on fuel

consumptions, vehicle license fees, overloading fines and central government budgetary allocation.

The financial sustainability of a road network is highly dependent on regular financing of proper and timely

road maintenance. At present routine maintenance of roads is regularly accomplished through the

Ethiopian Roads Construction Corporation(ERCC) and private contractors. ERA plays the regulatory roles

in the implementation of the existing Road maintenance Action Plan.

The ORF allocates annual budgets for road maintenance. During the past 9-Years period (2006/07 –

2014/15), Road Fund budget allocation was 72.4% to federal roads (ERA), 19.7% to regional roads and

7.9% to municipalities. The collected RF revenues are in excess of the allocations. The GOE is highly

concerned on the sustainability of the existing road network and gave attention to maintenance. During

the same period the total road fund revenue and budget allocations have shown average annual growth

rates of 24 and 28 percent, respectively.

2. Institutional sustainability and strengthening of capacities

Rating* Narrative assessment (indicative max length: 250 words)

4 ERA has long experience and capacity as an Executing Agency of similar road projects financed by Multinational Development Banks (MDB) such as AfDB. The present decentralized organization structure of ERA together with the number and skill mix of staff, overall responsibility for project implementation, capacity building interventions particularly in procurement, contract administration and financial management, monitoring and evaluation, and environmental management, etc. had made ERA an effective Executing Agency in spite of the magnitude and complex nature of road project management and implementation. ERA, headed by a DG has Restructured four Departments being led by four DDGs (Deputy Director

Generals) i.e. 1) Planning and ICT service, 2) Engineering Operations, 3) Road Asset Management, and 4)

Human Resources and Finance. ERA is responsible for overall planning, construction, maintenance and

management of the country’s Federal trunk and major link road Network. The Board of Directors of ERA

has the authority to approve the award of contracts.

The Rural Road Authorities (RRAs) of respective Regional Governments (Nine Reional Governments and Two Municipality Adminitrations) are responsible for the construction and maintenance of rural/regional roads. The RRAs function as autonomous agencies under respective management boards. ERA has Rural Roads Technical Support Team to provide technical assistance and training support to RRAs. Under GTP I, 71,500 km of low level all weather roads are planned to be executed under the auspieces of Woreda road desks. Currently, about 1000 medium scale contractors and 360 consultants are engaged in the domestic construction industry of the country. The ERA structure is functioning effectively as is evident from the successful completion of a number of programs/projects including Phase I (1997-2002), Phase II (2002-2007), Phase III (2007-2010), Phase IV (2010-2015) and the on-going Phase V (2015-2020) of the Road Sector Development Program (RSDP).

12

3. Ownership and sustainability of partnerships

Rating* Narrative assessment (indicative max length: 250 words)

3 Government offices such as Ministry of Finance and Economic Cooperation (MoFEC) had also played

their role in securing finance from the Bank. relevant public administrative offices at all levels have

played their part in the successful implementation of the project. During the supervision field visits, the

mission witnessed that both the community and the local government offices were so concerned about

the failures in some sections of the road due to land slideproblem. Remedial measures were being taken

by ERA to overcome this problem through engaging standby crews in the sections of the road doing

some emergency repairs. The design of the massive land slide failure at Bonga realignment (km 4+500)

has been completed after a geotechnical investigation was conducted by an independent engineering

firm. The ERA is undertaking frequent repair measures at areas prone to land slide.

There is need to engage with this community in the sustainable development of the road network. This

can be done through creating a sense of ownership to the roads as an asset to the community and

enhance their participation in the sustainability of the road through activities such as road maintenance;

the expansion of new engineered community roads that could feed to the main and collector roads; and

enhancing the transport services using the road, etc. The ERA has to develop a clear policy of securing

the road reserve corridor and protect the encroachment of the right of way limit.

In line with the main objectives of the Regional Road Authorities, under the respective Regional States,

and objectives set out in the RSDP, the communities in the project corridor have been beneficiaries of

easy access to machineries and supply of skilled manpower from the RRA.

In addition, further extension construction of the road from Mizan to the border of the South Sudan and beyond could enhance the sustainable development of this road.

4. Environmental and social sustainability

Rating*

Narrative assessment (indicative max length: 250 words)

4

The project was categorized as Category I and an ESIA (incorporating an ESMP) and RAP were developed

as part of the project appraisal process to meet the Bank’s Integrated Safeguard System (ISS) requirement.

Site specific ESMPs were developed for both lots based on the general project ESIA/ESMP to guide

safeguard compliance. The implementation of the ESMP was monitored by the Environmental

Management Team of ERA with support from the supervision Consultant and supervision visits by the

African Development Bank. Good practise road safety campaigns, waste management, pollution

prevention and soils management were reported to have been employed during the project.

Some of the measures taken that contributed to minimizing the potential negative social and

environmental impact of the project include: a) the project route as much as possible followed the

alignment of the existing road b) keeping the ROW limited to 20 meters (as opposed to the alternative 30

meters) reduced the number of affected households c) restriction on the use of detours helped lessen the

potential damage on the dense forests alongside the road d) road side grassing (more than 60 hectare)

and tree planting and management (more than 45,000 trees) for replacement and afforestation e)

assignment of a safeguard specialist as a Consultant staff to guide planning and as well as monitor

compliance. All of the quarries (30), borrow pits (55) and work/camp sites have been reinstated and

handed over to the local administration. Some of the quarries were partially reinstated for use by local

government. Compensation and resettlement support to Project affected people was provided by ERA

13

based on the RAP and updated assessments. Occupational and community health and road safety risks

were addressed through a dedicated local sub-contractor on HIV/AIDS and safety sensitization.

The project design did not adequately identify and factor the landslide risk in the sloppy areas and

environmental mitigation measures were not satisfactorily provided for. As well, the project experienced

protracted compensation/resettlement process, particularly in the urban centers, that contributed

significantly to the delayed completion of the project. There was also a gap in the follow up on compliance

reporting on the implementation of the site specific ESMP.

5. Lessons learned related to sustainability

Key issues (max 5, add rows as needed) Lessons learned Target audience

1 RAP Implmentation There is a need for a streamlined process for timeley settlement of compensation and removal of obstruction once compensation is completed. ERA need to give emphasis to continued and meaningful engagement of the local communities and administration during the construction phase and dedicate the required personnel and follow up on this issue.

Executing Agency

2 ESIA Assessment Future E&S studies in hilly and mountainous areas need to treat landslide risks with elevated attention. It is also probable that this will require enhanced liaison between the engineering design teams and the E&S study teams as this is also an engineering concern.

ERA, EMT of ERA

3 Safeguard compliance monitoring Institutionalized ESMP implementation progress follow up whereby the Environmental and Social Management Team of ERA works in close co-ordination with the regular project monitoring schedule is necessary for a better safeguard compliance monitoring and enforcing of standards.

Executing Agency and the Bank

4 ESMP Implementation by Contractor Cost elements of the ESMP within the ESIA

should be included in the Contractor Bidding

proposals to enable allocation of sufficient

budget to ensure their effective

implementation during construction phase

of the project

Procurement Team of ERA, EMT of ERA

5 Acquisition of RoW It is recommended that all compensation

payments for all physical assets, land and

livelihood restoration activities should be

completed on Contract Sections (Lots) prior

to mobilisation of Contractor to site to

minimise delays in project implementation

and potential increase in project cost.

Procurement Team of ERA, EMT of ERA

14

III Performance of stakeholders

1. Bank performance

Rating* Narrative assessment by the Borrower on the Bank’s performance, as well as any other aspects of the project (both quantitative and qualitative). See guidance note on issues to cover. (indicative max length: 250 words)

4 The Bank has played a major role as the main financier starting from initiation to the final

implementation of the Road Project. Fourteen Supervision, one Mid-term, including the Identification

and Appraisal missions have been conducted during the implementation of the project. The missions

comprise from 2 to 3 experts at a time and conducted meetings with the contractors, consultants and

Executing Agency and prepared Aide Memoires to bolster the proper implementation of the project.

During these supervision missions valuable discussions were held between the team and Government officials from Ministries such as Ministry of Finance and Economic Cooperation (MoFEC), Ministry of Transport (MOT) and Ethiopian Roads Authority (ERA) regarding the implementation and performance of on-going operations in the sector. Site visits were undertaken to supervise works of Road Projects.

The Missions were shown presentations starting from the inception report for the design review and supervision of the Jima-Mizan Road Upgrading project to working sessions on implementation progress of study activities with the Executing Agency (ERA). Through site visits, the missions have also reviewed quality of project output, implementation and performance in relation to work program and compliance with implementation schedules with the consultants, contractors and the respective Regional Directorate of ERA. The supervision missions were accompanied by ERA’s senior management staff (Regional Directors) and project Managers. The team identified acute problems encountered on the site and recommending immediate and pragmatic solutions. Meetings have been called with the communities dwelling along the project corridor and common action plans have been devised to resolving the prevailing problems. The Missions have also reviewed fulfillment of conditions for the project approvals, and Procurement actions. In general, the Bank supervision missions have worked in close coordination with the Government, the Consultant and the Contractor.

Comments to be inserted by the Bank on its own performance (both quantitative and qualitative). See guidance note on issues to cover. (indicative max length: 250 words)

The current transport sector investment portfolio in Ethiopia comprises of UA 384.04 million in loans resources for

the construction of 1031 km of roads. There are 5 ongoing road projects under this portfolio including Jima - Mizan

Road Upgrading Project. Out of these 5 projects the implementation of Jima- -Mizan Road project has been

completed in February 2016. The remainings are underway and disbursement is ongoing. The physical

implementation of Bedele - Metu road is 91%, while financial disbursement status is 82%. The implementation of

Mombasa – Nairobi - -Addis Ababa Road Corridor Phase II project is completed except the one stop border post

(OSBP) at Moyale town. The implementation progress of Mombasa - Nairobi – Addis Ababa Road Corridor Phase

III is about 45%. This 198km road project has been divided into 3 lots and it has been slow in progress and of a

concern for some time in the begining. Unable to tolerate the poor performance by the contractors, ERA

terminated the contracts for Lot 1 and Lot 2 and expelled the contractors and retendered. The new contractors for

both lots 1 & 2 have resumed works under the retendered new contracts and operating well. Modjo – Hawassa

Highway Project Phase I- Lot 1 (Modjo – Meki); the overall project consists of the design and build of a tolled 200km

long 4-lane dual carriage expressway from Modjo to Hawassa. The Bank is funding Lot I (56.8km) of phase I in

parallel with Korea Exim Bank (Lot 2). World Bank and China Exim Bank will fund Lots 2 and 3 which are falling

under phase II. However, Ethiopia Integrated Transport Program (EITP) Phase I (Jimma – Chida & Sodo – Sawal

Road Upgrading Project) is under advanced stage of procurement and Finance jointly by; (i) ADF Bank Grant:UA

41.67 million; (ii) ADF Bank Loan :UA 25.58 million, (iii) JICA/ACFA Loan :UA 67.31 million and (iv) Government

Contribution :UA 52.71 million.

15

The Bank had made Biannual supervision missions to the Jima-Mizan Road accompanied by the EA’s senior

managemne (Regional Director, Project Engineer, environmentalist and socio-econmist). Detailed site visits and

inspections were made during each site visit. An assessment review meetings are conducted with the contractor,

supervision consultant and the EA. Aide Memoires prepared for each site visit and an action plan prepared and

signed between the Bank mission team and the EA. During its entire project execution period the contractor was

well organized regarding its equipment and heavy machinerty fleet. But the project was marred by delays since its

start and the Bank mission was focused in identifying the problems and recommending the mitigation measures

by dissecting the problems encounterd. The contractor has been benfitting from the regular Bank missions to the

project Site. Furthermore, Mid-term review was conducted on September 2012.encompassing a wide range of

Bank and EA Staff.

The detailed features of these projects are shown in Annex V. The implementations of these projects is inline with

the country’s ongoing Growth and Transformation Plan (GTP I & II). The Bank’s Country Strategy Paper (CSP), 2011-

2015 & 2016-2020.

Key issues (related to Bank performance, max 5, add rows as

needed) Lessons learned

Professional inputs by the Bank in Environmental and Social aspects of the project

There is a need for professional inputs in Environmental and Social aspects of the project. E&S professionals should be in all supervision missions in order to properly address environmental and social issues together with the Executing Agency and other stakeholders.

Outcomes of Design Reviews on the overall implementation of the project

The Bank Missions should give due emphasis on the outcomes of Design Reviews on the overall implementation of the project. The missions together with the Executing Agency should closely examine the design reviews of consultants in order to ensure that there are no gaps in design that would lead to modification and hence additional works, with implications for Extension of Time, and possibly cost overrun.

2. Borrower performance

Rating* Narrative assessment on the Borrower performance to be inserted by the Bank (both quantitative and qualitative, depending on available information). See guidance note. (indicative max length: 250 words)

3 ERA had played a satisfactory role as an implementing agency starting from the procurement services

and related activities. In this regard, the “the Engineering Procurement Directorate” of ERA has been

executing the day to day activities in the selection of Contractors and Consultants and subsequent

activities. The physical implementation of the Road Project had been closely followed up by Western

Regional Directorate of ERA. This is one of the Directorates in the new decentralized institutional

structures of ERA, which are functioning as counterpart in charge of Projects under execution.

In addition, the Planning & ICT and Road Asset Management Directorate of ERA also undertakes the

Monitoring and Evaluation, and Road Asset Management such as traffic studies & analysis. All the

disbursement and other financial matters in relation to the project were also processed through the

Finance Directorate of ERA under the Human Resources and Finance Department.

The ERA assumed responsibility for overall project management in its capacity as the “Executing

Agency.” It operated through the Engineering Operations Department, and under the Regional

Operations Directorates. Early capacity building supported by other Development Partners (DPs) in

contract administration, financial management and planning facilitated procurement processing and

16

contract management for the project road. A project Engineer was assigned for the overall monitoring

of the activities of the project. The Borrower’s oversight was generally satisfactory as the Authority’s

management in general, and the Project Engineer in particular regularly monitored progress and

attended site meetings during which time key issues relating to implementation (adherence to schedule,

quality of works, design modification and variation orders, environmental and social safeguards, etc...)

were identified and actions to be taken agreed.

While ERA’s capacity and commitment on social and environmental safeguard management is

increasing, there is a need to give increased emphasis on better articulated and nuanced safeguard

compliance requirements, readiness to monitor and enforce compliance by the Contractors and a more

systematic integration of safeguard issues in the monitoring of projects by ERA. It is expected that new

procedures being put in place by ERA, like the project handover guidelines which explicitly identifies

safeguard measures to be taken during project completion/handover, will help further streamline

coordinated action in this area by ERA.

Key issues (related to Borrower performance, max 5, add rows as

needed) Lessons learned

1. Project Implementation An implementation delay due to inadequate capacity for procurement actions is still a problem and remains as one of the main reasons for the unsatisfactory performance the Executing Agency. The executing agency has to conduct a continuous long-term, short-term and on the job training for its staff at different level of project implementation.

2. Sustainability of professionals The high turn over of the professionals is an acute problem of the Borrower for the timely execution of the project. The Borrower could not retain a high calibre professionals during the the entire implemtation period of the project.it is always argued that a competitive incentive and salary with the private sector should be paid to retain the qualified professionals required to the sustainable implementation of projects.

3. Performance of other stakeholders (Contractor & Supervision Consultant)

Rating* Narrative assessment on the performance of other stakeholders, including co-financiers, contractors and service providers. See guidance note on issues to cover. (indicative max length: 250 words)

3 Several problems have been encountered during the physical implementation of Jimma Road upgrading Project. According to the consultant’s Contract Completion Report (CCR), extremely rugged terrain, adverse weather condition, slow clearance of right of way obstruction from construction limit and restricted working space of half way road width due to natural forest conservation were among the major challenges encountered in addition to prolonged heavy rain season. Both the consultant and contractor have played their respective roles to overcome all the challenges that have directly or indirectly affected the work Progress throughout the execution period of the project.

The contractor has mobilized all his resources adequately, but could not engage and utilize it appropriately especially his heavy equipment and machinery fleet was idling unnecessarily through out the implementation period. The Consultant had made close monitoring and evaluation on the day to day activities of the road project and rendered the required consultancy services to the Contractor. Nevertheless, the contractor had acted accordingly and taken necessary measures on time in order to alleviate the Problems or minimize their impact on the objective of the project.

17

Road Maintenance Financing The intuitional capacity of the Road Fund Office should be improved in order to cope up with financial needs increasing due to the expansion of the road network following the implementation of the Road Sector Development Program (RSDP). A wide range of Road Financing mechanism should be put in place such as (i) expansion of toll roads; and (ii) involving private sector in the road expansion in the form of Public Private Partnerships (PPP)

Executing Agency, and the Bank and the ORF.

IV Summary of key lessons learned and recommendations

1. Key lessons learned

Key issues (max 5, add rows as needed) Key lessons learned Target audience

The climatic condition of the project area is characterized by wide topographic variations, extremely rugged train, severe climatic conditions and a heavy rainfall extending for about six months in a year.

The work volume and the time of construction should take in to account the peculiar climatic and geographical conditions of the project area in providing adequate period of contract implementation.

Executing Agency and the Bank.

Wide range of design changes and issue of several variation orders inflated the project cost.

The detailed engineering design should take into account various design paramenters especialy adaptable to the local conditions. Detailed Geotechnical investigations to be done for structural foundations and heavy cut areas prone to slides.

Executing Agency and Engineering Firms.

The price adjustment /increase in cost acounted 59.89% of the initial project cost. The escalation could be partially attributed to price escalation and increase in work volume

Contract conditions to be adapted should carefully study the price adjustment factor within the inflation rate of the country of the executing agencies.

Executing Agency and Bank.

Road Construction Cost Stabilization.

Road construction costs are getting high and becoming serious challenge to the sector. The Government has adopted several projects aimed at stabilizing road construction costs that include the following. (i) improve capacity of local construction industry; (ii) increase the number of professionals in the road sector and (iii) train road construction technology technicians.

Executing Agency and the Bank.

The recurrence of the ROW problem entails frequent stoppage of works and one of the causes of implemetaion delays during construction.

The EA should identify major obstruction especially public utility lines and laiase with the responsible authorities during the design of the project and start clearing during the bidding process and avail the site to the winning bidder before the commencement of works.

Executing Agency

18

2. Key recommendations (with particular emphasis on ensuring sustainability of project benefits)

Key issue (max 10, add rows as needed) Key recommendation Responsible Deadline

Keeping the public and commercial transport system robust throughout the year between the towns of Jima and Mizan.

The continuity of the accessibility of the road is indispensable. The government has to give due diligence to protect and maintain the road from excessive damage that may interrupt the flow of traffic entirely.

The Executing Agency

Continuous

Reinstatement of the sources of local construction materials are in compliance with the environmental guidance and safeguard procedures.;

And agreed wth the local administration and communities.

The Executing agency

Immediately

Some location (km 4+500 at Bonga Realignment, km 197+100 and other similar several locations) are prone to landslide failure by shear at the culvert structure locations and cut-fill slope slide failure. These damages along the location are repaired before blocking the road and cut-off traffic flow.

Permanent technical solutions should be sought for the section of the road (km 4+500 at Bonga Realignment and around km 197+100) where it is severely damaged by sliding and shear failure.

The Executing Agency

Immediately

The road corridor is very rugged coupled with a heavy rainfall almost for about six months a year damaging side ditches and cross drainage structures prematurely.

An accelerated erosion and side slide should be protected / minimized by immediate intervention such as bracing with gabions and planting grass.

Executing Agency

Immediately

V Overall PCR rating

Dimensions and criteria Rating*

DIMENSION A: RELEVANCE 3.5

Relevance of project development objective (II.A.1) 4

Relevance of project design (II.A.2) 3

DIMENSION B: EFFECTIVENESS 4

Development Objective (DO) (II.B.4) 4

DIMENSION C: EFFICIENCY 3.25

Timeliness (II.C.1) 3

Resource use efficiency (II.C.2) 3

Cost-benefit analysis (II.C.3) 4

Implementation Progress (IP) (II.C.4) 3

DIMENSION D: SUSTAINABILITY 3.75

Financial sustainability (II.D.1) 4

Institutional sustainability and strengthening of capacities (II.D.2) 4

Ownership and sustainability of partnerships (II.D.3) 3

Environmental and social sustainability (II.D.4) 4

OVERALL PROJECT COMPLETION RATING 3.55

19

VI Acronyms and abbreviations

Acronym (add rows as needed)

Full name

AADT Average Annual Daily Traffic

ADB African Development Bank

ADF African Development Fund

CSP Country Strategy Paper

DDG Deputy Director General

DG Director General

DO Development Objective

DPs Development Partners

EIRR Economic Internal Rate of Return

ESIA Environmental and Social Impact Assessment

ESMP Environmental and Social Management Plan

ERA Ethiopian Roads Authority

ERCC Ethiopian Road Construction Corporation

ETB Ethiopian Birr

EU European Union

EA Executing Agency

GDP Gross Domestic Product

GOE Government of Ethiopia

GTP Growth and Transformation Plan

HDM-4 Highway Development And Management Model

ICB International Competitive Bidding

IPR Implementation Progress Report

MOFEC Ministry of Finance and Economic Cooperation

NA Not Available

NPV Net Present Value

PAP Project Affected People

PAR Project Appraisal Report

PCR Project Completion Report

PPP Public Private Partnerships

ORF Office of Road Fund

RRAs Rural Road Authorities

RSDP Road Sector Development Program

SCF Standard Conversion Factor

SNNPRS Southern Nations, Nationalities and peoples Regional State

SPN Specific Procurement Notice

TOR Terms of Reference

UA Unit of Account

URRAP Universal Rural Road Access Program

VAT Value Added Tax

VOC Vehicle Operating Cost

I

Annex: I

Project Cost and Source of Finance

Table 1:- Summary of total Project Cost Estimates (UA Million) by Sources of Finance (Net of Taxes)

Source: Appraisal Report Jimma - Mizan Road Project

Table 2:- Summary of Project Cost Estimates by Component and Finance Source

Project Categories/ Component UA million

ADB GOE Total 1. Civil Works

1.1: Jimma – Mizan Road Construction 61.25 29.52 81.62

2. Consulting Services

2.1 Supervision of Road Construction 2.57 0.29 2.96

2.3 Project Account Auditing 0.1

Sub Total 2.77 0.29 2.96

Total 54.87 29.81 84.58

Source: Appraisal Report Jimma - Mizan Road Project

Source Foreign

Exchange Local Costs Total Costs % of Total

ADF

Loan 75.16 75.16 74.02

GOE 26.37 26.37 25.98

Total 26.37 101.53 100

II

Table 3:- Disbursement Summary by Category (ADB- disbursed, in million ETB)

Year Civil Works Supervision Total

2008 - 0.042 0.042

2009 56.18 5.68 67.66

2010 132.70 6.18 138.88

2011 204.15 7.65 211.80

2012 264.26 8.06 272.32

2013 229.39 8.12 237.51

2014 161.13 7.36 168.49

2015 178.17 4.39 182.57

2016 67.44 1.49 68.93

Total 1,293.45 48.99 1,342.44

Table 4: Financial Performance Summary of the Project by Component

ACTIVITY

CONTRUCT AMOUNT ACTUAL COST Ratio:

Plan/Actual

(in, %) ETB (Million) UA (Million) ETB

(Million) usd(Million)

CIVIL WORKS

/CONTRACTOR 1,429.04

2284.8 62.54

SUPERVISION

CONSULTANT 32.74

75.3

43.47

TOTAL 1,461.78

2360.1 61.93

Source: Consultancy Completion Report ( CCR)

N.B: final disbursement ETBM 2,360.1 without the ROW and 15 % VAT

III

Table 5: Road Fund Regular Budget Allocation and Actual Transfers (ETB in Million)

Fiscal

Year

Road

Fund

Budget Allocation Actual

Transfer

Annual Increase (%)

ERA RRA MRA Total Budget

Allocation

Actual

Transfer

2003/04 516.7 208.3 59.5 29.8 297.5 286.3 - -

2004/05 535 216.1 83.1 33.3 332.5 424 12% 48%

2005/06 350 395.5 124.6 48.3 568.3 577.9 71% 36%

2006/07 1121.8 701.2 174.4 76.3 948.9 909 67% 57%

200/08 1094.4 1014.2 225.3 86.9 1326.3 1077.7 40% 19%

2008/09 692.9 1111.9 223.1 94.1 1429.1 675.7 8% -37%

2009/10 1322.1 1090.6 252.5 100.3 1443.4 1304.9 1% 93%

2010/11 1252.1 775 277.8 110.3 1163.1 1146 -19% -12%

2011/12 1288.1 846.5 305.5 121.4 1273.4 1360.7 9% 19%

2012/13 931.15

2013/14 931.15

2014/15 931.15

2015/16 936.86

2016/17 1138.60

2017/18 1252.46

Average 832.04

IV

Annex II: Physical Implementation of Project

Table 6: Physical Performance Summary of the Project (Work Progress Summary)

Description Original Revised Time

Extension Actual

Ratio: Plan/Actual

Original Revised

Jim

ma

-Bo

ng

a

(Lo

t 1

)

Commencement date of Project

21.04.2008 25/09/2007

Project Completion Date

20.02.2011 28.02.2

014 - 28 feb.2014

Duration (Days) 1034 70 1104 1104 0.93 14.77

Duration (Years) 2.83 0.19 3.02 3.02 0.93 14.77

B

on

ga

- -

Miz

an

(Lo

t 2

)

Commencement date of Project

23 April ,2008

Project Completion Date

22 february,2011

28 Feb,201

6 - 28 Feb,2016

Duration (Days) 1036 796 1832 1832 0.56 1.3

Duration (Years) 2.83 2.18 5.01 5.01 0.56 1.3

V

Annex III: Procurement Plan and Project Implementation

Procurement Plan and Implementation: Jimma- Bonga Lot 1 Procurement Activities Milestone Dates

Appraisal Actual I. Civil Works General Procurement Notice Issued on the United Nations Development Magazine and Local Newspaper

January 16, 2007

Specific Procurement Notice Issued on the United Nations Development Business Magazine and Local Newspaper

February 28, 2007 & March 01, 2007

Letter of Invitation to the pre-qualified Contractors August 30, 2007 Receipt of Applications for Pre-qualification April 19, 2007 Pre-qualification Application Evaluation Sent to the Bank June 12, 2007 No-Objection of the Bank on the PQ Application Evaluation Report/Approval of Pre-qualification and Tender Document.

July 02, 2007

Issue of Tenders August 30, 2007 Receipt of Tenders/Deadline for Bid Submission November 06, 2007 Evaluation Approval by the Bank Group Notification of Award 25 January 2008 Signing of Contract February 20, 2008 Date of Commencement April 21, 2008 Date of Completion February 28, 2015 II. Consultancy Service (Supervision) SPN Issued on the UNDB Magazine and Local newspaper January 16, 2007 Letter of Invitation sent to the Approved shortlisted consultants

April 05, 2007

Final date for submission of proposal May 31, 2007 Evaluation report of proposals sent to the Bank July 25, 2007 Approval by the Bank group September 06,

2007 Signing of contract January 02, 2008 Date of completion February 28, 2015 III. Consultancy service (Auditing) GPN issued on the UNDB Magazine and local newspaper Specific Procurement Notice Issued on the local newspaper

September 10, 2013

Letter of invitation sent to the approved shortlisted consultant

Nov. 07, 2007 or November 21, 2013

Final date for submission of proposals Dec. 25, 2007 or November 28, 2013

Signing of Contract May 09, 2014 Date of Completion June 2017

Mode of Procurement

VI

Procurement Plan and Implementation: Bonga-Mizan Lot 2

Procurement Activities Milestone Dates Appraisal Actual

I. Civil Works General Procurement Notice Issued on the United Nations Development Magazine and Local Newspaper

January 16, 2007

Specific Procurement Notice Issued on the United Nations Development Business Magazine and Local Newspaper

February 28, 2007 & March 01, 2007

Letter of Invitation to the pre-qualified Contractors August 30, 2007 Receipt of Applications for Pre-qualification April 19, 2007 Pre-qualification Application Evaluation Sent to the Bank June 12, 2007 No-Objection of the Bank on the PQ Application Evaluation Report/Approval of Pre-qualification and Tender Document.

July 02, 2007

Issue of Tenders August 30, 2007 Receipt of Tenders/Deadline for Bid Submission November 06, 2007 Evaluation Approval by the Bank Group Notification of Award 25 January 2008 Signing of Contract February 20, 2008 Date of Commencement April 21, 2008 Date of Completion April 30, 2017 II. Consultancy Service (Supervision) SPN Issued on the UNDB Magazine and Local newspaper January 16, 2007 Letter of Invitation sent to the Approved shortlisted consultants

April 05, 2007

Final date for submission of proposal May 31, 2007 Evaluation report of proposals sent to the Bank July 25, 2007 Approval by the Bank group September 06,

2007 Signing of contract January 02, 2008 Date of commencement Date of completion April 30, 2017 III. Consultancy service (Auditing) GPN issued on the UNDB Magazine and local newspaper Specific Procurement Notice Issued on the local newspaper

September 10, 2013

Letter of invitation sent to the approved shortlisted consultant

Nov. 07, 2007 or November 21, 2013

Final date for submission of proposals Dec. 25, 2007 or November 28, 2013

Signing of Contract May 09, 2014 Date of Completion June 2017

Mode of Procurement

VII

Annex IV: Updated RSDP Indicators & Impacts of RSDP

Table 20: Change in Selected Indicators

Indicators

(1997, RSDP Start)

(20, year RSDP V)

% Change

Ratio

Proportion of Asphalt roads in Good Condition

17% 73 56 4.3

Proportion of Gravel roads in Good Condition

25% 66 41 2.6

Proportion of Rural roads in Good Condition

21% 55 34 2.6

Proportion of Total Road network in Good Condition

22% 72 50 3.3

Road Density 1/1000 sq.km 24 km 109.2 355 4.6

Road Density 1/1000 population 0.49 km 1.3 165 2.7

Proportion of area more than 5 km from all-weather road

79% 33.5 46 0.4

Average distance to all weather road 21km 4.6 78 0.2

Road length (in km) excluding Woreda Roads

26,550 67423 154 2.5

Road length (in km) including Woreda Roads 26,550 120171 353 4.5

VIII

Annex V: Active Transport Portfolio (Summary Status of the Portfolio)

PROJECT NAME

Loan

amt

UA

million

Lengths Contract Period PROGRESS TO DATE

Project Section Start date Completion date /

Revised

Time

lapse

Physical ( Km of AC /

Per cent age)

Ethiopia Integrated Transport Program I (Jima – Chida & Sodo-Sawla Road Upgrading project

Lot 1: Jima – Chida / JICA 67.32

240 km

80 Under procurement

Lot 2: Sodo – Dinke

67.27

80 Works Contract

concluded

Lot 3: Dinke - Sawla 80 Under procurement

1. Mombasa-Addis Ababa Phase II

Lot 1: Agaremariam-Yebelo

85.00 301.3 km

96.2 May 2011 May 2014 /Mar

2016

EOT COMPLETED

Lot 2: Yebelo – Mega 97.8 Dec 2010 May 2014 100% COMPLETED

Lot 3: Mega - Moyale 109 2 Sept 2013 2 Sept 2016

/March 2018

100% 107km / 99%

2. Mombasa-Addis Ababa Phase III

Lot 1: Hawassa-Chuko

105.0 198 km

66 Apr2013 Apr2016 T* 20km /34%

27Jan2017 26Jan2019 42% 5km / 21%

Lot 2: Chuko-Yirgachefe 60 Apr2013 Apr2016 T* 24 km / 41%

24 Apr2017 24Feb2019 33% 0km /7%

Lot3: Yirgachefe–

Agaremariam

73 1 Apr2013 1 Apr 2016 /

12/7/2017

EOT? 45 km / 60%

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Bedele – Metu

Lot 1: Bedele- Km 61 41.06 112 km

61.0 22 Apr2013 Apr2016/ Dec2017 EoT 50 km / 83%

Lot 2: km 60 - Metu 50.6 15 Feb2013 Feb2016 / Jan 2017 EOT 50.61km /100%

3. Modjo – Hawassa Highway Phase I (dual c/w)

Lot 1: Modjo – Meki (AfDB) 85.71

93X2 km

56x 2 Nov 2015 May 2019 57% 27X2 km /45%

Lot 2: Meki–Zeway (Korea

Exim) 66.7

37 x 2 May 2016 13.33%

Total 518.06

** 1031 km

** Excluding Korea Exim & JICA loan, the total is UA384.04 m

* Contractors Terminated in Jun2016

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1. Jimma –Bonga- Mizan Road Project

Lot 1: JIMA –BONGA ROAD 113.12km

Lot 2: BONGA – MIZAN ROAD 118.98 km

Contractor: Keangnam Enterprise Keangnam Enterprise Works contract value ETB 686,101,953.69 ETB 724,938,245 Supervision Consultancy Lea International with

Core Consultants ICT India with ICT Ethiopia

Supervision contract price ETB 8,436,000 + Euro 600,187.5

ETB 8,241,925 + USD 576,315

Contract Commencement 21 Apr. 2008 23 Apr. 2008 Contract period 34 month 34 month Contract completion 20Feb 2011 23 Feb 2011 Revised completion 28 Feb 2014 28 Feb 2016 Final disbursement date / 2nd revised date.

31 Dec 2012 / 30 Dec 2015 31 Dec 2012 / 30 Dec 2015

This 232 km road project sliced into 2 lots commenced in 2008 and complete in 2016. The document preparation

for the PCR consultancy services is underway.

2. Mombasa - Nairobi – Addis Ababa Road Corridor Phase II

Basic Data Approval Date : 1 July 2009 Signature Date : 15 January 2010 Effectiveness : 29 September 2010 Revised Disbursement Closing date : 31 December 2018

Loan amount : UA 85 million Disbursement rate : 99.25% Implementation progress : 301/ 301 km (99%)

Objectives

Promote trade and regional integration by providing efficient and effective transport system between Ethiopia and Kenya

Key Components of the Project

Road Construction Civil Works: o Construction of 301 km in three Lots to bitumen standard with 7-m carriageway and 1.5-m

shoulders of the road section between Ageremariam and Moyale including One-Stop Border Post (Moyale), community water wells and roadside socio-economic infrastructure (health, parking lot, market place).

Consulting Services for Construction Supervision, and Audit: o The supervision will also be divided in three lots corresponding to the civil works contracts; o Technical and Financial Audit will be a separate consultancy component.

Expected Outputs

301km of new road, One-stop Boarder post and 8 water wells Outcomes

Reduced travel times and increased vehicle speeds and costs of transport and logistics reduced

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3. Mombasa - Nairobi – Addis Ababa Road Corridor Phase III Basic Data

Approval Date : December 2012 Signature Date : 3 February 2012 Effectiveness : 4 December 2012 Revised Disbursement Closing date : 31 December 2019 Total Project Cost : UA 105 million Disbursement : 48.75% Implementation progress : 80/200km (43%) Objectives

Promote trade and regional integration by providing efficient and effective transport system between Ethiopia and Kenya

Key Components of the Project

Works: Construction of 200km of road to bitumen standard with 7m wide carriageway and construction of road side amenities between Hawassa and Agaremariam.

Consultancy

Supervision of the above works, audit and asset management. Expected Outputs

200km of new road and improved road asset management system Outcomes

Reduced travel times and increased vehicle speeds

Costs of transport and logistics reduced

Improved road asset management system

4. Bedele-Metu Road Upgrading

Basic Data Approval Date : 30 November 2011 Signature Date : 3 February 2012 Effectiveness : 1 April 2012 Last Disbursement closing date : 31 December 2017

Total Project Cost : UA 50.31 million ADF Bank Loan : UA 41.06 million Government Contribution : UA 9.25 million Disbursement : 82% Implementation progress : 91%

Objectives

The project objective is to connect Bedele and Metu towns with an asphalt concrete road and thereby connect the region with the commercial and administrative city of Addis Ababa.

Key Components of the Project

Upgrading of the 112 km Bedele – Metu road section by widening of the existing 6 m wide road to a 10 m road cross section (7m carriageway plus 2 x 1.5 m;

Consultancy services for the supervision of roads work including quality and quantity control of all permanent and temporary works;

Consultancy services for audit of the managerial, financial and technical aspects of the project implementation.

Expected outputs

Construction of 112 km of paved road, road side trade facilities for use by women vendors; 500,000 trees planted.

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Expected outcomes

Improved road network, reduced travel times and travel cost for all road users; and to enhance Public education in relation to: road safety; environmental protection & Sexual Transmitted Diseases.

5. Modjo-Hawassa Highway Project

Basic Data Approval Date : 06 November 2013 Signature Date : 06 December 2013 Effectiveness : Not yet Effective Last Disbursement closing date : 31 December 2020

Total Project Cost : UA 233.2 million ADF Bank Loan : UA 85.71 million Government Contribution : UA 80.77 million Korea Exim Bank : UA 66.72 million Disbursement : 38.72%

Implementation progress : Construction started in Dec 2015. Progress stands at about 45%.

Objectives

The project objective is to improve the road transport connectivity between the capital city Addis-Ababa and Hawassa by increasing the traffic carrying capacity of the road.

Key Updates

The project was declared effective in July 2014. The Evaluation Report for the procurement of a contractor is under review by ERA.

6. Ethiopia Integrated Transport Program Phase I (Jimma – Chida & Sodo – Sawal Road

Upgrading Project)

Basic Data Approval Date : 07 December 2016 Signature / Effectiveness : 31 Jan 2017 / 23 February 2017 Last Disbursement closing date : 31 December 2023

Total Project Cost : UA 191.33 million ADF Bank Loan : UA 25.58 million

ADF Bank Grant : UA 41.67 million Government Contribution : UA 52.71 million JICA/ACFA Loan : UA 67.31 million

NDF Grant : UA 4.03 million Disbursement : Nil

Implementation Progress : Procurement ongoing.

Objectives The project objective is to provide an all-weather climate – resilient road transport infrastructure to the rich agricultural area of southern Ethiopia, which will form a southerly outer ring road corridor connecting the remote hinterland with the rest of the country. The project includes elements intended to enhance economic and social inclusion of people served by the project. The project benefits include improved road connectivity, road safety, access to social services and women economic empowerment, and increased knowledge in transport sector issues. The project is the first in a program that will integrate investments in infrastructure with other sectors, especially in aggregating agricultural production and marketing.

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Components

Civil Works for upgrading 240km of road: The works will include the construction to upgrade the existing gravel road running between Jimma and Chida (80km) and Sodo and Sawla (160 km) to asphalt concrete surface standard, with a 7m wide carriageway and 1.5m wide paved shoulders on both sides of the road.

Supervision consultancy services for road upgrading works contracts

Capacity Building in skills development in the Transport Sector:

Capacity Building in Climate Risk Assessment and Management at ERA:

Women entrepreneurial Support program.

Audit consultancy services

Resettlement Action Plan (RAP)

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Annex 5: Economic and Financial Performance (Economic Re-Estimation)

5.1 Traffic Volumes

Traffic Volumes have increased four-fold by 242% after road upgrading between the appraisal levels in 2004 and completion levels in 2016 as summarized in Table5.1 below.

Table 5.1: Traffic Levels (Vehicles per day) on Jimma-Mizan Road (Before and After Upgrading)

Road Section Car Utility S/

Bus

L/

Bus

S/

Truck

M/

Truck

H/

Truck

T/

Trailer Total

Jimma – Bonga- Mizan

(2004 , appraisal ) 1 42.5 27 21.5 51 70 57.5 13 284

Traffic Composition at

appraisal (2004) (%)

0.4

% 15%

10

% 8% 18% 25% 20% 5%

100

%

Jimma – Bonga- Mizan

2016, open to traffic) after

construction

20 134 218 57 117 200 178 48 972

Traffic Composition after

construction appraisal

(2016) (%)

2% 14% 22

% 6% 12% 21% 18% 5%

100

%

Jimma – Bonga- Mizan

Comparison of 2004 and

2016 (before construction

and after construction ) –

Increase in no. of vehicles

19 91.5 191 35.5 66 130 120.5 35 688

Source: Ethiopian Roads Authority and AfDB PCR Mission- February 2018

5.1.1 Traffic Composition: As indicated in Table5.1 traffic composition has changed slightly after road upgrading for most of the vehicle types, apart from small buses whose percentage has more than doubled. For example, percentage of passenger vehicles has improved from 32% at appraisal to 44% after upgrading. Specifically for small buses, the percentage has more than doubled from 10% at appraisal to 22% after upgrading. The implication is that passenger transport has been greatly improved after the road was upgraded. On the other hand, the percentage of freight vehicles has reduced from 67% at appraisal to 56% after the road was upgraded to bitumen standard. The implication is that passenger transport has been greatly improved after road upgrading.

5.1.2 Average Travel Time: As projected at appraisal this has reduced by about 40% from 5 hours before the road was upgraded to 3 hours on the upgraded road.

5.2 Economic Performance

5.2.1 Economic Re-Estimation

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At appraisal (2006), the methodology for the economic analysis for the project road was based on cost benefit analysis by comparing the “with” (asphalt surfaced road) and “without” (Do minimum on a gravel surfaced road) project scenarios over a period of 25 years, using the World Bank Highway Development and Management Model (HDM-4). The HDM-4 model calculates the life cycle road user benefits of road improvement in form of reduction in vehicle operating costs, travel times, and reduction in maintenance costs, based on the economic costs that include: (i) capital investment costs and (ii) routine and periodic maintenance expenses. The estimated 2008 construction cost for the project roads was USD119.47 million (ETB1,028 million). A discount rate of 10% (the opportunity cost of capital in Ethiopia), a residual value of 0% and upgrading period of 36 months starting in 2008 were adopted. Economic prices were estimated by converting financial prices to economic using a standard conversion factor (SCF) for the Transport sector in Ethiopia of 0.74.The Economic Internal Rate of Return (EIRR) and the Net Present Values (NPV) were the economic indicators used to assess the project viability at appraisal.

At the PCR (February 2018) stage, the same methodology and most of the assumptions at appraisal were adopted for economic re-estimation. Actual road upgrading costs (ETB 2,218.6 million) and current traffic volumes (2016) were used for economic re-estimation. Some adjustments in the assumptions at re-estimation include: (i) use of the current standard conversion factor of 0.94 and (ii) a discount rate of 10.23% instead of 10.00% used at Appraisal. The evaluation period was adjusted to 20 years instead of 25 years at appraisal to reflect the adjusted commencement of construction works .It is noted that though the economic analysis assumptions at project completion are more conservative than at appraisal, the economic analysis results are higher than projected as indicated in Table 5.2. The HDM-4 Economic Analysis Summary (Re-estimation) Results are attached as Table 5.3.

The economic re-estimation results indicate that realized economic benefits as seen from the EIRR for the upgraded road is far above the projected EIRR at appraisal. The higher than projected economic benefit has arisen from the traffic levels growing faster than projected at appraisal, implying that the project was a worthwhile investment and has generated high economic benefits in the project area. It is also noted that after upgrading the road, the re-estimated EIRR could have been higher at about 32% is the standard conversion factor of 0.74 as used at appraisal was used instead of the revised SCF of 0.94 used at project completion due to changes in tax regimes for road construction inputs as compared to the appraisal stage.

Table 5.2: Economic Re-estimation Results

Project Road

Length

(km)

Appraisal - 2006

NPV

(USD Million )

PCR - 2016

NPV

(USD Million)

Appraisal 2006

EIRR

(%)

PCR - 2016

EIRR

(%)

Jimma-Bonga-Mizan 229.59

162.56 227.88 20.5 23.8

Source: Ethiopian Roads Authority and AfDB PCR Mission- February 2018

5.2.2 Comparison of Road User Costs and Units – at Appraisal (2006) and at Project Completion (2016)

At Appraisal it was estimated that Composite Vehicle Operating Cost (VOC) on existing gravel roads, estimated at US$0.75 per vehicle kilometre would reduce by 55% to US$0.34 in 2011 when project road would be completed. At PCR (2016), from economic re-estimation Composite VOC on the upgraded road is US$0.26 per vehicle km, a reduction of 65% instead of the projected 55%.

At appraisal it was projected that the average annual travel time cost per composite vehicle-kilometre would be reduced by about 69 percent by year 2011 on project completion; from US$0.128 per vehicle km in 2008 to US$0.04 in 2011. At PCR (2016), it was established from economic re-estimation results that the average annual

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travel time cost per composite vehicle-kilometre reduced by about 84 percent by year 2016 on project completion; from US$0.128 per vehicle km in 2008 to US$0.02 in 2016 at project completion. The greater than expected reduction could be attributed to increased speed on a paved road with resultant reduction in average travel time.

At appraisal (2006), it was projected that Road Maintenance (routine) costs for a gravel road would be reduced from US$440.7 per km per year in year 2006 by about 86% to US$60.8 per km per year (for a paved road) by year 2011 when project road is completed. Available information from the Executing Agency (ERA) at PCR (2016) indicates that Road Maintenance (routine) costs for a paved road is US$4,126 per km per year. The increase is attributed to general inflation in Ethiopia between appraisal and project completion periods. The relatively higher figure than predicted at appraisal could also imply that the projected figure was greatly under-estimated at appraisal.

Table 5.2- Economic Analysis Summary (Re-Estimation Results- HDM-4 Output)