kenya the homa bay-rongo road project performance
TRANSCRIPT
AFRICAN DEVELOPMENT BANK GROUP
KENYA
THE HOMA BAY-RONGO ROAD
Project Performance Evaluation Report (PPER)
OPERATIONS EVALUATION DEPARTMENT (OPEV)
05 September 1991
(r)
EQUWALENTS A}ID ABBREVIATIONS
Currency UnitAp'praisal, 5/80Effective lst Disbursement, 6ft2Effective Last Disbursement, 2189PPAR,6/90Average
Kenya Shilling (K.Sh)1 UA = K.Sh 9.659969I UA = K.Sh 11.95001 UA = K.Sh 25.02921 UA = K.Sh 30.2A281 UA = K.Sh 19.210492
ADBADFEIRRGDPTCBPCR.PPAtvIPPARRBRIDC
ABBREVIATIONS
African Developnænt BankAfrican Development FundEconomic Internal Rate of RenrrnGoss Domestic ProductIntemational Competitive B iddingProject Completion ReportProject Performance Audit MemorandumProject Performance Audit ReportRoads BranchRural Industrial Development Centre
BSON26ZM:
( i l )
TABTE OF CONTEilTS
EOJIVALEIITS AIID ABBREVIATIONSLIST OF AI{NEXESPREFACEBASIC PROJECT DATAEVALUATIOI{ SUMMARY
Page
f i )f i i l )( l v )( v )( v l l l )
2 ,
BACKGROT'1{D
l. l The Economy1.2 The Transport Sector1 .3 The ProJec t
PROJECT IMPLEMENTATIOI{
2. I Loan Effect lveness2.2 Procurement2 .3 Imp lenenta t lon Schedu le and Mod l f l ca t lons2,4 Repor t lng2 . 5 T l m e D l m e n s l o n2.6 ProJect Costs and Related Flnanclng2.7 D l sbursement
PROJECT ACHIEVEMENTS
PERFORMANCE EVALUATION
4.1 Operat lonal Performance4.2 Traf f I c4.3 Econonlc Perfornance4.4 Inst l tut lonal Performance and Development4.5 Envlronmental Aspects4.6 Performance of the Borrower, Contractor and Consultant4 .7 Bank 's Per fo rmance
PROJECT SUSTAINABILITY
CO}ICLUSIONS. LESSONS AND RECOMI,IENDATIONS
6 . 1 C o n c l u s l o n s6.2 Les sons6.3 Recommendat lons
I
I22
9
999
3 .
4 .
5 .
6 .
Tht s Report hasEconcomls t ) fo l low lng a
been prepared bymlss lon to Kenya
Mr. R.K. HOYAHi n J u n e , 1 9 9 0 .
BS0/0252M
(Pr tnc lpa l Transpor t
(iii)
LISTOFANNE GS
Anrrcx No. Title No. of PaErs
1 Agricultural Productionof Cash andFoodCrops I
2 Correspondence withGoveniment for commen$on rcport 2
ATTACHMENTS
Project Completion Report
BSO/0262M
(iv)
P R E F A C E
This is a Project Performance Audit Report on the Homa Bay-Rongo Road in Kenyafor which an ADB loan of UA 5.3 million was approved on 27 August, 1980 for tlre constnrctionof the road to a two-lane bitumen standard.
The Audit Report consists of a Project Perfornrance Au<fit Menrorandum (PPAI\4)and a Ploject Completion Report (PCR) dated Septernber, 1989, (attaclred), preparecl by tlreInfrastnrcture and Industry Deparrnent I.
The PPAM is bascd on a review of matelial in Barù files furclu<llng the AppraisalReport, thc PCR, correspondence with the Borrower relptine to the project, tlisqussions with Bankstafi connected with the project, di.scussions with tlre 'Sovenrmerrl: g1d tlata ':ollected û:ring anaudit mlssion to Kenya i:r June, 1991.
Ihe audit .cport agror .. with the obser rtions of tf : PCR. Br : where de' -.;ls wereneeded in.fl,: analysis of data, tl' . audit rcport tr, ,ûed those ssucs in ..r,': light of the newir formatioli ,nd data obt,rined by th, mission.
Copies of the r€,port were submitte r to the ( ovenurrent of Kenya -an{ tftçOpcra,tional Departments of ttre-Bank for comments. The Oper ationd Dc[ ômuents ol thc Bankre-acted positively and comments received have been incorporated into the report. At thc date offnatizing the report on 10 January, 1991, no conrments were received fiom tlre Govemrnent ofKenya inspite of areminder (Annex 2).
BSOl0262M
(v)
KEI\-YA
HOMA BAY-RONGO ROAD (PPAR}
BASIC PROJECT DATA
COT.JNÏRYPROJECTLOANNUMBERBORRO\MERBENEFTCIARYE)(ECUTING AGENCY
A. LOAI..{
KEI\ry4Homa Bay-Rongo RoarlcsÆvrRÆ1/001Govemment of the Republic of KenyaGovemment of the Republic of KenyaMinistry of Transport and Couuuunications
AppraisalEstimate Actual
l .2.3 .4.5.6.
3.4.5 .6.7.8.
Request for Loan (Date)Amount (U-A rnillion)Interest RateRepayrnent PeriodGrace PeriodLoan Negotiation DateLoan Approval DateLoan Signature DateLoan Effectiveness Date
Februzuy 19785.377ol8 years3 years18/08/8027rJ&lBÙa6[J2l8r26108181
B. PROJECT DATA
E.ç5.248
5.248
5.37Vo18 years3 yeals
-
7.389
L'e2J4L2.141
3Ur2lgr
3Ut2l84
May 1981Novernber
1 .2.
1 .2.
Total Cost (UA million)Financing Plan (UA million)
ADBGovemrnent
Total
Deadline for lst DisbursementEffective Date of lst DisbursementDeadline for Last DisbursementEffective Date of Last DisbursementCommencement of
'Wotks
Date of Completion of Works
Cost Ovemrn (7o)Time Ovemrn
Slippage of lst DisbursernentSlippage of Last DisbursementNo. of Extensions of Last
DisbursernentSlippage of Cornpletion Date
7.743
go- 'f-Ç L'C, 7| 4.49
2 9 - " L 4 8 7 , 2 . 2 3 7, l0gr '5;506 2.237
rs[)618230106189ouo6l89March l98l
1982 May 1985
_%_52A&rln
c. PERFORMANCE INDICATORS
: SlTo in K.Shs and 5% in UAL83Vo5.5 rnontlx4.5 years
3 tirrres33 mouths cotnpauedto Appraisal
BSO/0262M
4.5.6.7.E.
Project Implementation StatusDate Project Started
:- . Date Projeet CompletedInstitutional PerformanceContractor PerformanceConsultant Performanccr E R R ( % )Success Rating
(vi)
Dates
4-2ON2n841802-18lsl80r-rolslSr8-24lrùl8227llr-r6n?.1843rR-2U4189
CompletcdMarch l98lMay l9E5EaIEairFairAon'"ittl (39%)A
PCR. (34.5%)
AppraisalEstimæe
E.
D. MISSIONS
IdentificationPreparationAppraisalFollow-up
SupervisionPCR
No. Persons IVlen-x/cckst
7N/A72I24
3I3I322
(ù) Estimated since most missions included other activities.
F.
DISFIJRSEIvIEIIT
Total DisbursedAmount CancelledUnusedBalanceYearly Disbursement
CoNTRACI0R(S)ISUPPLIR ($)
NameResponsibilityDate Contract SignedDate Contract CompletedContract DurationTenderAmount
CIDNST,'LTAT.IT
NameDate Contract SignedDate Contract Completed
Contract DurationTender Amount
UA 5.3 million
Actual
UA 4.019 million
UA 1.281 millionUA 1.619 in f9E2UA r.933 in 19E3UA 0.174 in l9t4VAO.293 in l9E9
c.
Mess$. Hayer Bishan Singh and SonsCivil Uro*sllth Febnrary, l98lM"y, t9E6 (End of Mainænanæ)50 months (Actual)K.Shs ffi,[email protected]
Sir Alexander Gibb and Partners13th March, 19ElJune l9EE (afterpreparation of final
certificate))74 months (Actual)K.Shs 2,172,WO
BSO/O262M
H.
(vii)
OTHER BAI{K GROUP FINA}.ICED PROJECTSIN THE TRAT.ISPORT SECTOR IN KEI.TYA
Name of Project
Two Intemational RoadsYala-BusiaRoadMakutano-Tana Bridge-Sagana RoadKitale-Kapenguria RoadSouth Nyanza RoadMenr-Maua RoadKenyaRailwaysNakuru-Nyahurunt RoadMumias-KakamegaRoadKenya-Sudan Link RoadThika-Makutano Road
Loan Amount Year of Year of Post-Mllion Alproval ComPletion Evaluated
UA 2,3UA 3.0UA 3.0UA 3.0UA 5.0UA 4.1uA 10.0UA 9.0FUA 6.53uA 27.0FUA 11.83
1967r97r1974r9751977197819801981198319831988
Nov. 1971Dee. L974Ocl1977Aug. 1978Iune 1982Dr,c.1982Aug. 1988Dec. 1988Iune 1986June 1989On-going
Oct. 1983Oct. 1983Not YetNot yctNotyetNot yetNot yetNot yetNot yetNot yetNot yet
BS0/0262M
(viii)
EI/ALUATION SITMIvIARY
1. Project Genesis, Objectives and Descrintion
hoject Genesis
l.l fire project was presented to an ADB identification mission which visited Kenya inFebruary, 1978. This was foliowed within the same month by a formal Govemment requcst forfinancing, a clear demonstration of tlre high priority Govemment placed on the project.
1.2 The economic feasibility studies were canied out in-house by the Roads Branch ofthc thcn Ministry of Transport and Communications while the detailed engineering studies we:eundertaken by a firm of consultanæ. The project was appraised in May, 1980 after a review of thedocuments and a loan of UA 5.3 million was approved on 27 August, 1980.
Objectives
1.3 The objectives of the project rvere to:
(i) stimulate the local economy;(ii) facilitate the task of administering the district;(iii) assist in improving the living standards of the inhabitants of the project area.
Descrbtion
The road was to be constructed to a twoJane bitumen standard including theresurfacing of a 1.5 km of main street in Rongo township for a total lengh of 3L.7 km in theSouth Nyanza District, Nyanza Province of Kenya. More
-detailed description is given in section
2.4 of the PCR.
2. Project Implementation
Loan Effectiveness
2.1 The loan became effective 12 months after qrproval in spite of the persistentcorrespondence from the Govcmment to the Bank on the high-priority rating for the projcct. Apcrid of 6 months should have been the norm. It is interesting to m€_ntion at !|1lt po-^t .tha1ttrciery first operation of the Bank was in Kenya n l9!_7 with a loan of UA 2.3 million for the Twohtémationil Roads Project. Furthermore, the Homa Bay-Rongo road was the thirteenthintorvcntion of thc BanÉ's operations in Kenya. Therefore, Kenya. should-have teen v-eryëonvcrgant with the procedurei of the Bank and making the loan effcctive should not have takenmore than 6 months.
Procurement
2.2 The procurcment of the services of a contractor for the constnrction worts was inshict accordance
^with Bank rules. The contract \tas awarded following an intemational
comp"titiu" bidding (ICB). In reviewing the prc-qualification results, the B1nk discovered that 4firmi on the list cime from .ton-memÈr corintriés of the Bank Group and these were drolryedaccôrdingty. On the other hand, the selection of the consultant for thesuperylsion of constnrctionworks was*done in accordance with Bank guidelines for use of consultants (PCR, pqas. 3..5.1 to3.5,4). As pointed out by the PCR, there were irregularities io.+e P.rocufement of scrvices asrcgards unilàteral issue of variation orders and inadequate pre-qualification of contractors.
t .4
BSO/0262M
(ix)
Project Costs and Related Financing
2.3 The total cost of the project was estimated at appraisal to be UA 7.389 million. ThcADB loan of UA 5.3 million Q1E;) was to finance all the foreign exchange cost whil. c ttleGovcmrnent of Kcnya was to provide IJA 2.L4L million to cover thc local cosL Howcrcr, {rcrcwerc cost overïuns 6t StEo ovêr the appraisal estimates due to (i) ttre delay causod by the refirsalof the Govemment to pay I5Vo of. the èôntract sum in foreign exchange to the contractor as agreedin the con6act; (ii) increase in earttrworks and drainage stnrcffires; (iii) change in the scope ofwork by an additional 4.4 lÉm of constnrction works; (iv) national shortrye o{ fuel 9d 1ninclemeirt weather. The cost overruns were in local cunency and were satisfactorily nrct by theGovemment and did not cause any delay in the implementation of the project. On thc other hand,there is a loan saving of UA 1.28 miltion part of which will be used to reme4l iso,lated sfi:gqh{alfailures and reinstaie the shoulders and safety features which are considercd essential forenvironmental protection.
3. Project Results
3.1 One of tlre objectives of the project was to stimulate the local economy of-tlæ SouthNyanza district. This objèctive has been largely attained. Since the constnrction of the roadalriculttnat production hàs been on the increase. During t987188 season !.7! ni;llion bags ofrÀaize, 132,660 bags of beans; 412,000 bags of sorghum wery produced; these increased to1.95 million; 180,648 and 480,300 bags respectively in the 1988/89 season (see Annex l).- S-ugqcane production has also incrcased fiom 600,000 tons in 1987188 to 720,000 tons in 1989/90.These crops are moved on the project road to the consuming centres
3.2 Industry has also grown side by side with the grorirth in. qade. Thc period1984-1988 saw the èstablishmenf of general industrial activities such as: brick and tire rnaking,maize flour and posho mills, welding-and caryentry ventures, bakeries and tailoring. Ilq 9rc ofgr-owth will be iclt firfher once thè RIDC (Rural Industrial Development Centre) which wasestablished rccently in Homa Bay gets into a full swing.
3.3 By inference from the above, the project is assisting in enhancing $9-deycloprnentof tlre local ecônomy and in improving the living standards of the population within its zone ofinfluence. And as air att weathêr bitumen road,
-the movement of Government officials in their
daily task of administering the district has been made all the more easier.
4. PerformancgEvaluation
4.1 Operational Performance
The road has been built as designed and it is performing well under the cunenttraffic load. It is the main artery in the district and goes to supplement the ADB financed SouthNyanza Sugar roads in evacuating the sugar cane fiom the farms to sugar factory. The road isreirdering sérvice to meet the objeétives sei at appraisal. With the approval by the Bank of the useof the 6an balance, the perioâic maintenance Ueing undertaken by the Govemment will beenhanced.
4.1.1 At appraisal, it was estimated that there would h,687 vehicles per day-on the rgadin 1988. TTre actriâl recorded traffic on the road in 1988 was 668, that is,97Vo of the appraisalestimate. On the whole, traffic has not grown as fast as predicted due to the downhun in theeconomy of Kenya.
BSOlA262M
(x)
4.2 Economic Performancc
As already mentioned above, actual traffic recorded could not rcach the appraisalcstimates. However, the recalculated economic intemal rate of retum is 34.5Vo as comËârcd-tothe 39% of the Appraisal Report. An EIRR of 34.5Vo is still satisfactory and demorutiues theviability of the projéct.
4.3 Institutional Performance and Development
- -At appraisal, the Roads Branch (RB) belonged to the then Ministry of Transport andCommunications. Druing project implementation, the
-Ministry was reorganised and icnamed
Yittitby of Works with RB elevated tô a department. It had adeiluate staff ind performcd well onthe project. Therc is a standard training programme for the staff dhich is considêred satisfactory.i -
4.4 Performance of the Borrower, Contractor and Consultant
(i) Borrower
Tt".performance- of the. Borrower can be described as mixed. First, it qpeeded upPrË-contract activities to get the project started 2 months earlier than the appraisal târget daté.Second, it get all cost overruns oh the project and this did not constitute anâement of-detay inproject implementation.
However, the near non-adherence to the contract provisions at the eady stagcs of theconstruction works to pay the confiactor a l1Vo of the contraca sum in foreign exchangJcaused adolay of l7 months on the projcct. Moreover, variation orders were issued to ttrC contractorwithout the approval of the Bank. Furthermore, the prcqualification exercise done by theBorrower was extremely weak.
(ii) Contractor
While the finished works were judged good both by the Govemment and thc Bank,the contactor had little financial backing and organisational experience for this t1rye of roadprojects- In general tems, it can be said that the performance of the contractor was-fair (rcR,para.3.8.2).
(iii) Consultant
The performance of the consultant is judged satisfactory. The firm did supenirise thcconstruction works to the satisfaction of the executing agency and pointed out any defects to thecontractor for rectification.
4.5 Bank's Performance
The Bank reacted very quickly to the priority placed on the project by theGlovemment of Kenya and had the project put in the active pipeline within a month of theGovemment's request for financing.
Nevertheless, with no launching mission from the Bank, the Borrower took a wholeyear to get the loan effective. Also, technical supervision had been inadequate.
BSOl0262M
(xi)
4.6 Project Sustainability
The project road is programmed by Govemment for receiving adegualgmaintenance. With a'continued routiire
-and periodiè maintenânce, benefits on the road will
accrue to the usenl iN well as to the economy as a whole. With an increase in traffic due to a risein social and economic activities, the future-ElRR could be higher than the recalculated EIRR of34.SVo.
5. Conclusions. Lessons and Recommendations
5.1 Conclusions
5.1.1 By and large, the PPAM considers the conclusions of the PCR as satisfactory. Theproject has been succesifu[y completed and the quality of the finished works has been foundÈo.il. Adequate maintenancê is Uèing accorded tlie roâd at the moment and with a continucdilraintenancd effort by the Govemment, project benefits can be sustainable throughout theremaining life of ttre project (15 years).
5.2 Although actual traffic on the road ranges between 80Vo-97Vo _of _the -appraisalestimabs, the three ôbjectives of the project have been fully aaained. The recalculated EIRR isput at 34.5Vo.
Lessons
5.3 Old gravel roads need to be thorougtrly tested at the detailed-enginecring stagebeforc being recorimended as the sub-base or basé fôr the new bitumen road in order to avoidsurprises during construction.
With a strong Govemment commitment, projec't implementation could start a lot5.4eadier than appraisal target dates.
5.5 Inadequate launching missions from the Baflk could delay fulfilment of loanconditions by the Borrower to make the loan effective.
Recommendations
5.6 From the foregoing, it is recommended that:
Forthe Govemment
(i) changes in the project as described and agreed on in the Loans Agreementshould always- be signalled to the Bank for prior approval beforeincorporated in the project;
(ii) to avoid confusion during loan disbursement on taxes and duties,Govemment should endeavour that contract prices should be.givenspecifying "with" and "without" tax elements;
(iii) to avoid undue delays in project implementation, the Executing {gcncyshould respect clausés in the ôontracf with regard to payments in forcignexchange and modalities of payment;
(iv) Govemment should continue to accord the project adequate maintenance toensure the sustainability of the project benefits.
BSO/0262M
(xii)
(i)
For thc Bank
(ii)
(iii)
(iv)
desk and site su1ærvision on projects should be intensified. The BaDk shouldforward cornrnents on Monthly Progress Reports to the Executing Agencyeven if there is no adverse opinion on the progress of work;
where payment to the Contractor, Consultant and Supplier in forcignexchange is involved, the Bank should opt for dircct payment mcthod ofdisbursement;
launching missions should be mounted on regular basis for earlyeffectiveness of loans ;
thc Bank should favourably consider the utilisatiort of the loan savings (UA1.28 million) by the Govemment to rcmedy stnrctural failures and other roadworks.
ncn/nt6ttt
PROJECT PERFORT,TANCE AT.JDIT MEMORAI{DI.'M
BSON262rû,'.'l
I
I. BACKGROT'ND
l.l Thc Economyl
1.1.1 The evolution and recent perforrnanæ of the economy of Kenya since irr*p#have been characterised by four discernible phases:
(i) a period of rapid economic growth ard stability during the first &c& ofindependenc e (19 63 - 197 3).
(ii) a period of declining economic growth (1974-1979), qpear-lrcadc{,by thc twooii crises and partially relieved by tlæ coffee boom of 1916 and 1977; d
(iii) a-priod o{-1ggro+conomic instability and acempts at subiliradon andadjustnent ( 1980- I 985); follwed by
Renewed Growdr: 1985-2fl)0."
t.1.2 During the 1963 ta L973 period, Kenya's growth pcrfomrance made it one,of tlæfatest-growing and most stable economies in Africa. Real GDP gsew by an dverage of 6.5% prannum. Per Capita income, in reat terills, regisæred an 4ggregate growth of 30.0%. Furdætmorc,dris strong economic growth was relatively broad-bascd in sectoral terrts. Agricultuç' thecconorny'i leading sectôr, grew by an annual average rale of 4.7%,higher qt- ûq -demogrry_hicgfowth rate. Govemment policies that allowcd for adequate producer prices while p.roridingèffective extension sen'icesl significantly contributed to tliis $trong pcrformance. The industrialscctor also performed briskly, wittr an annual average gowth raæ of about ll.Wo. Totuism dsogrcw at an annuat average rate of about T.SEo,becoming a significant foreign exchange eamer.
1.1.3 The country's economic forhrnes began to change rn 1974, with the oil crisir thathad sct in in 1973. Kenya's terms of trade deteriorated rapidly, contributing to a sizcable &ficiton cqrrcnt account. Unfavowable weather conditions àlso emerged and revcaled $tnrstulralwealmesses in the country's agricultural s€ctor. The Government reqponded by virtallyabandoning the hitherto active producer pricing policy; a move that adverselyafrected-growth inthc scctorrs output. Benneen iWq ana-IgSs;the agricultural sector's growth slowed down to3.5Vo per annuni from 4.7Vo previously, thus lqesinS behind population groJvth. In tlrc industrialsector] where policies had Écorne increasingly inward-lookingrprotectionist, tho slowdown lnagriculturc b"grn to act as a constraint to furtlrer growth in indqstrial outPut. These factors werctràinforced by-the brcak-up of the East African Community, which had prowided e11Y access-andanrple oppoinrnities for dxports of Kenya's manufactured goods. The adverse effects of theseJxiimal'a?ra intemal shocki rilerc exacerbated by excessive Govemment exPenditures during thecofifee boom period of 1,976 and 1977. This rcsulted in a bulld-up of inflationary pressure$. .4t."rcsult of thesè developments, Kenya's overall economic performance declined in the second halfof the 1970s.
t . Cul led f rom ChapterproJect , Kenya, June,
2, of the Appraisal Report : Rural Roads Upgrading
r990.
BSO/0262M
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1.1,4 In the wake of these adverse developments, the Governrnent iniliated necçssrystabilisation næasures in the eady 1980s. Between 1980 and 1985, Kenya entered into a scrics ofstandby arangemênts with the IMF, to stablise the economy and lay down the basis forreeunrytion of sustainable growth. Under these programmes, the Govemment adopæd monerypropriae fiscal and monetary poûcies; devalued the real effective exchange ræe; pursued apositive intercst rate policy; and allowed real u/ages to fall. All these measrres were aiûæd atcuôing aggFgate domestic demand in order to st€m the emergent internal and extemaldisequilibria. At the sectoral level, the Government also initiaæd policies to boost agriculturaland ittdustriâl productionl In agriculture, producer prices of key crops wenc incr€âscd andmeasurËs werc taken to improve input delivery systems and extension services. In industry, stepswere taken towards attracting new investment re-orienting the sector outwards to cor4Ëte inexport markets.
l.t.S The need to move the economy beyond stabilisation and onto a strong grcwrtr pathwas the cortrpelling imperative behind the launching of Sessional Paper No.l, 1986, EconomircManagemcnt for Renewed Growth, which has been adopted by the Govemment and donors alibas the blueprint for the country's devclopment to the year 2000. The major objective of ScssionalPaper No.l, given the rapid rate of population growth, is to maintain the pace of economic growthat a relatively higher rate in order to adequately provide employment for a fast-growing labourforce and shelter for the population as â wholé. Thus the paper calls for "renewed, rapideconomic grorrth," with a target average rcal GDP growth rate of 5.6Vo per annum up to year2m0. The strategies and objectives in the Sessional Paper are being pursued, since 1986, throughthe implenrentation of.a series of well-designed macro-economic policy measures and sectoraladjustment pfogrammes in agricultule, industV and the financial system.
; 1.2 IhoTransport *$ector
l.?.1 Kenya has five modes of transport, viz: road, rails, air maritime and limited lake,aq,t a prpclinç1. The transport system and its èurrent status arc extensively discussed in Chapter Iot thc-Piojecr Completion Report (PCR). Suffice it here to mention that the trarutport-sysænq-ofKenya plairs a dual iote of national importance for the develqmegt of.the economy and seco:rdly,as a'vifal transit route for the export/irnport traffic for the neighbouring landlocked countriçs ofUganda, Bunrndi, Rwanda, and north-eastem Zatre and southem Sudan.
r.3 The Prgiecl
(a) rdentification. Preparation and APpraisal
1.3.1 The project was presented to an ADB identification missionyhich visited Kenya inFebruary, '1978. ttrii was followed within the same month by a formal Governnreltt request forfinancing, a clear demonstratiorr of the high priority Govemment placed on the project.
1,3.2 The economic feasibility studies were carried out in-house by the Roads Rranch ofthe then Ministry of Transport and iommunications while *re delailed e-ngineering studies wereundertaken by a firm of coâsdtants. The project was appraised in May, 1980 after a review of thedocuments
1.3.3 While the economic feasibility had no discernible flaws, the details engineeringstudies revealed maior weakrressess during- construction with regard to soils investigation andaraittag" systems. t'tre existing gravel roaàbed was to be used as the base for the new bitumenroad. i.s it tumed out duringf cinstmction, it was discovered that the beadng -strgngû of thggravel road was not of the re{uirecl standard due to the presence of unsuitable black cotton soilwhich had to be removed (PCR, pua.3.2.I).
nsn/n?6?M
- 3 -' :
1.3.4 This should have been foreseen if adequate soils investigation had been donc. It ignot enough as a cost saving measure at the detàils engineering stage to omit a thoroughinvcstigation on the old road formation that is going to be used as à part-of thc body of tlæ rrc-:wroad. Adequate funds should be provided either by the Bank or the Govemment for this exerciscto avoid rodesign and cost overnrns during constnrction. ûi thc case of the prescnt project, thcredesign of the pavement and the consequent drainage stnrcturcs led to 42% and,43% iryctivelycost ovemrns on these componeng within the contract.
1.3.5
(b) Objectives.
The objectives of ttre project as stated in the appraisal repoft and the PCR were to:
(i) stimulate ttre local economy;(4 færlitate tlre task of adminisæring Ére disaict;(iiil assist in improving Oi ri"i"t staù'Oards of thç inhabitants of the pro|:ct arca
(c) Description
1.3.6 The road rvas to be constructed to a two-lane bitumen standard including thcqrsurfacing of,g 1.5 km of main street in Rongo township for a total length of 31.7 km in thc|otth Nylnla District, Nyanza Province of Kenya. More
-detailed description is givcn in scation
2.4 of ttrc PCR.
B,SON2Â2Mi
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2. PROJEET IMPLEMENTATION
2,1 LoanEffcctivcness
2.1.1 As pointed out in the PCR, the loan became effective 12 months aftcr approval ins$e ol th: Pers{tent correspondence from the Government to the Bank on the higli priorityrating for the projea, A period of 6 months should have been the norm. It is intérefrnc toTe^nFo^n a{-!tù,Pgin! tltll the_very fust operation of the Bank was in Kenya lrr-Lg67 with e bs;ofUa.2.3 million for the T\vo Intcmationql ng{r Project. Furthermore, the Homa Bay-Rongo roadwas the thirtecnth intervention of the Bank's operations in Kcnya Therefore, K""y" triir Ucenvory conversant with the procedures of the Bank and making thè ban effective strorild not h.vctaken morc than 6 months. The above nohrithstanding, an aiieçrarc and timely mission frott ttlcBank to lGnya g"{ itl Regional O$cc soon after loan 4pp-rovil would have ihortencd the longIryse of time indeclaring the loan effective (PCR,para. 3.1-.-l).
2.2 hocurement
2.2.1 The procurement of the services of a contractor for the construction works was instrict accordanoe with Bank nrles. the contract u'as awarded following an intemationalcompetitive bidding (ICts). In reviewing the prc-qualificuion results, the BanÉ discoverod rhar 4firms on thÊ list came ftom non-member corintriés of the Bank Group and these were drwoodaccordipgly. On ûte other hand, the selection of the consultant for the &rpervision of consmrffionworts wrs dorrc in accordance with Bank guidelirrcs for use of consdtôts (PCR, paras. 3.5.1 to3.5.4). As pointed out by the FCR, there-were irrcgularities in thc procuÈtneni'of services asregards unilatcral issue of variation orders and inadequaæ pre-qualificaËon of contractors.
2.3 Imolcmentation Schedulc and Modifications
2.3.1 Ttrc implementation schcdule set at appraisal was rcalistic (FCR, pato- 3.3.21.Construc'tion worlc were to corffnenoe in May l98l tô-be compleæd by Novenrber 1982, i.e. ovàa period-of 18 months. In reality, however, construction worlcs started in March, 1981, 2 monthsearlicr than the timetable set at appraisal. firis is explained by ûre fact that the Glovemrnentregarded the projcct as a top piiority, hcnce the eieorting agency acted prongly on thePrre{ontract exercises so that construction wo*s could start early. This shows thu with acuædedication of the Borrower to the project coupled with adeçate organirational stnrcturc of thecxecuting aSency, projects could be startsd muCh earlier than rypraisattarget.
I'.1.2 On the contrary, the same zeal to get wort started on time could not bc mûilalncdduring rhe implementation of the project. Constnrction works could only be conplecd in May1983, that is, ov,er a period of 5l months. knplementæion of the project was thus iielayed for 33months. Apart from tlp inclement weather, national shortage of perol and a lack of expericnoe inorganiration of the contractor, the two major factors grving cause to delay were 5 variation ordcrswhich modified the contract and gave rise to increase in the scope of work and project cost (rcR,frara. 3.2.2), and noût-âdhercnce if ttre Govemment at thc initi"f stage$ of tne 1io$ct to t otiôu aclause in the contract which stipulated ehat l5lo of the coNrtract sun be paid [o the contractc inforeign currency to enable him'buy spare parts and replace machinery &om abroad. firis lssuetook nearly 17 months to get resolved. The long delay in paynænt of this portion of the contractdcstabilised the financial position of the contractor and his rhythm of work. This matter will betCken up again under Disbursement (para. 2.7.1 below).
BSON262M
2.4 Reporting
2,4.1 Regular monttrly reports were issued on the project which indicaæd progress ma&and pointed out-difficulties that were encountered during construction. Howcver, the variationorders were issued without prior information to, and approval by, the Bank. This is incontravention of the loan agnLment and also underlines thC absence of technical and fitrancialsupervision on tlre projoct by the Bank. It should also be pointed out that the Bank nevcr rcacædin any way on the Progress Reports.
2.5 Time Dimension
2.5.L As alluded to in paras . 2.3.1 and 2.3.2 above, there was a delay of 33 months in thoimplementation of the project. ttre implementation schedule set at appraisal u76s reqlistic takingintô accourrt the strrengttr and the capabîlity of the executing agency in terms of manpover ardexperience as well as the performance of civil engineering contractors on similar wot{rs in Kenyagiving due allowance for unforseen cilcumstances. Had it not been for administrative difficultieswittr regard to payments in foreign cufiëncy to the contrâctor and extra wo*s, the congtnrctioriworks ôn the tirigina poject could have been completed with much less &lay in qpite of tlrcinclement weather and shortage of petrol (PCR, pan.3,3.4)
2.6 Project Costs anrlRelated Financing
2.6.1 Project costs and financing are adequately trcated in the rcR, sections 3.6 nd !.7.There wêrc cost oveûuns of SlVo over the appraisal estimates due to the factors mentioned inpua. 2.3.2 above (see dso para. 3.6.5 of the PCR). These were in local cufi€ncy and werciatisfactorily met by the Gov-ernment and did not cause any dclay in the lnplementation of thcproject. On thê other hand, there is a loan saving of UA 1,28 million part of which will be uscd toienieay isolated stnrctural failures and rcinstate the shoulden and road safety feahrres which artconsidercd essential for environmental protection. t
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2.7 Disbursement
Tlie P-CR has raised two issues which need exarnination here. Firstly, thcGovemrnent of Kenya opted for rcimbursement from the Bank for expensos irtcur€d andpaid forby the Govemment on the project. The Bank reimbursed in foreign cunency. Meanwhile, thedovemment did agree to, and-signed, the construction contract which made provision for thcpayment of. LSVo oT ttre contract Jum in foreign cuûency. However, at thÊ initial stages of thebrôiect- fhe Govemment invoked a national law which made it impossible for local contrac{ors toÛ" Ë"id in foreign cuïency. As noted in para. 2.3.2 above, the issùe causeda dela,y o! 17 monthsin thë implemeitation of ihe project. Tds could have been avoided if the Bânk had opted for adirectpayment to the contractor.
ù:2 Secondly, while it is specified in the loan agreement that the procceds of the loanshâll not be used to pay any taxe$ and duties, the conraàt prices were inclusive of taxes. Thislnakcs it difficutt for thé appraisal team as well as the disburtement officer to ?cgurately estimateih uroportion of tar invdlied so as to determine the real net of Hx cost of the proJcct beingfinaâceâ by the Bank. Borrowers should, thercfore, be rcquested to give contract pricesqpecfying "withu and "without" tâx elements.
23j It is equally noted that the project was completed in May 1985 and the maintenanoeperiod erpircd in Mav iggO. However,^diibursement hâd been extended fuom 1982 upto 1989.Tiris t*8 pêriod of l-oan disbursement could be rather expensive for the Borrower in tcrms ofcommitment charges.
2.7.1
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3.0.1
3, PRO'ECTACHIEVEIVET.{TS
One of the objectives of the project was to stimulate the local economy of the SouthNyanza district. This objective has been largcly attained. Since the constnrction of Ére roadagricultural production has been on the increase. During 198788 season 1.77 million bags ofmairn, 132,660 begs of bcans; 412,000 bags of sorghum were produced; these incrcased to 1.95million; 180,648 and 480,300 bags respectively in the 1988/89 season (see Annex l). Sugar cancproduction has also inc,reased from 600,000 tons in 198288 to 720,N0 tons in l989PO. Thesecrops arc moved on the poject road to the consuming centres.
3.0.2 trn rcrms of fishery, the Kenya side of Lake Victoria provides full time enploynrntto about 25,fi)0 fishermen and about 8,000 traden who use mainly the road for thoir trade.
3.0.3 The South Nyanza District had a total of 2,861 business establishments in 1987.This figure indicates thc number of service outlets where goods and services arè procured in ttredistrict. ïhesc include grocery shops, wholesale sho1x, butchery, carpentry, tailoring, shoe rqnir,garages, hotels etc. Thc efficiency with which these services are provided depends to a gpatextent on the project road.
3,04 Trade devclopment in South Nyanza district is also demonstrated by the increase oflicences over the year. These have increased from 2,568 in 1980 to 3,410 in 1987.
3.0.5 , Industry has also grown side by side with the growth in trade. firc period198+1988 saw the establishment of general industrial activities such as: brick and tire making,maize flour and posho mills, welding and carpentry ventures, bakeries and tailoring. The rate ofgrowth will bc felt ftutlrer once the RIDC (Rural Industrial Development Centre) which wasestablishcd recently in Homa Bay gets into a full swing.
3.0.6 By inference from the above, ttre project is assisting in enhancing the dcvclopnentof the local economy and in improving the living standards of the population within its zone ofinfluence. And as an all weathér bitumen road. the movement of Govemment officials in theifdaily task of administering the district has been made all the more easier. Indeed, the provision ofthe road infrasuucture has contributed to the development of the district.
BSOl0262M
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4. PERFORMANCE EVALUATION
4.1 Operational Performance
4.LJ The road has been built as designed and it is performing well under the currenttraffic load. It is the main artery in the district and goes to supplement the ADB financed SoudrNyqza Sugar roads in evacuating the sugar cane from the farms to sugar factory. The road islendgring scrvige to meet the objectives set at appraisal (PCR, para.3.9.2). With the approval bythe Bank of the use of loan balance, the periodic maintenance being undertakèn by thêGovemment will be enhanced.
4.2 Traffic
4.2,1 As stated in the PCR (para. 5.2.8) economic activities and traffic arc related. Atappraisal, it was estimated that there would be 687 vehicles per day on the road in 1988. Theactual rccorded ûaffic on the road in 1988 was 668, ttrat is,977o of ttie appraisal estimate. On theIhqlg, traffic has not gro\À/n iN fast as predicted due to the downtum iri-the economy of Kenya.Traffrc analysis is well presented in the PCR (para. 5.2.3).
4.3 EconomicPerformance
4.3.1 As akeady mentioned in para. 4.2.1 afuye, actual traffic recorded could not reachthe appraisal estimates. However, the iecalculated economic intemal rate of return is 34.5Vo ascompared to the 39Vo of the Appraisal Report. An EIRR of 34.5Vo is still satisfactory anddemonstrates the viability of the project.
4,4 InstitutionalPerformance andDevelopment
\4.1 .At appraisal, the Roads Branch (RB) belonged to the then Minisry of Transport andCommunications. During project implementation, the Ministry was reorganised and ienamedMinistry of Works with RB elevated to a departrnent. It had adequate staff and performed well onthe project. There is a standard training programme for the staff which is considêred satisfactory.
4.5 EnvironmentalAspects
4.5.1 Constnrction of the road to a bitumen standard has had a favourable aspect on theenvironment. Both passengers and the population living along the roadside aæ qparedthe hazardsand the discomfort of dust. The new roail followed exactly the old alignment and, therefore, hadlittle encroachment on the existing environment.
4.6 Performance of the Borrower, Contractor and Consultant
(i) Borrower
4.6.1 The performance of the Borrower can be described as mixed. First, it speeded upPre-contract activities to get the project started 2 months earlier than the appraisal target datè.Second, it met all cost oveffuns on the project and this did not constitute an element of delay inproject implementation.
4.6.2 However, the near non-adherence to the contract provisions at the early stages of theconstnrction works to pay the contractor a l1Vo of the confracf sum in foreign exchange caused adelay of 17 months on the project. Moreover, variation orders were issued to the contractorwithout the approval of the Bank. Furthermore, the pre-qualification exercise done by theBorrower \f,ras extremely weak.
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(ii) Contractor
4.8.j While the ftrished works were judged good both by the Govemment and thc Bûh,the.contractor had little financial backing and organisational exlrcrience for this type of roadprojects. In general terms, it can be said that the perforrnance of the contractor was-fair (PeR,pua.3.8.2).
(iii) Consultant
4.6.4 The performance of the consultant is judged satisfactory. The fhm did supervise thecorutnrction works to the satisfaction of the executing agency and poinçed out any defects to thecontractor for rectification.
4.7 Bank's Per,formance
4.7.I The Bank reacted very quickly to the priority placed on the project by theGovemment of Kenya and had the project put in the active pipeline within a month of theGovemment's rcquest for financing.
4.7.2 Nevertheless, with no launching mission from the Bank or the Nairobi Office, theBorrower took a whole year to get the loan effective. Also, technical supervision had beeninadequate.
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5. PROJECT SUSTAINABIUTY
5.0.1 The proiect road i$ programmed by Govemment for receiving adequ*temaintenance. Witti a continued routine
-and periodié rnainænance, benefits 'on the road will
accrue to the useË as well as to tlre economy as a whole. TVith an incrcase in traffic due to a risein social and economic activities, the future EIRR could be higher tharr the recalcrrlated EIRR of34.SVo.
6. CONCLUSIONS, LESSONS AI{D RECOMMENDATIONS
6.1 Conclusions
6.1.f By and large, the PPAM considers the conclusions of the PCR as satisfactory.- TIEproject has beén succeoifuUy completed and the quatity of ttre finished wo*s has been found;odd. Adequato maintenanie is bêing accorded tlie roâd at tlæ moment and with a continuedtraintenanci effort by the Govemment, project benefits can be sustainable throughout tlrcremdining life of the project (15 years).
6,L2 Although actual traffic on the road ranges between SÛlo-97-.4o 9f -the-rypraisalestimates, the tluce ôbjectives of the project have been-fully attained. The rccalculated EIRR iEpttt 8t 34.51o.
6.2 Lessons
6.2.1 Old gravel roads need to be thorouglrty tested at the detailed_engine-ering staSJbefore being recorimended as the sub-base or base for the new bitumen road in order to avoidsurprises during constnrction.
6.2.2 Wittr e $trong Govemment commitment, project implementation could start o lotearlier than appraisal target dates.
6.2,3 Inadequate launching missions from the Bank could delay fulfilment of loanconditioru by the Bôrrower to make the loan effective.
6.3.1
6.3 Recornrncndations
From the foregoing, it is recommended that:
For the Govemment
(i) changes in the project as descrited and agreed on ig tttg Loans r'igræmentshoufd always 6e Àignalled to the Bank for approval before incorporated Ênthe project;
(ii) to avoid confusion during loan disbursement on t&tes anC dutie$,Government should endeavour that contract prices should be givernspecifying "with" and "without" tax elements;
(iii) to avoid undue delays in project imptementation, the Ëxecuting Agencyshould re,spect clauses in the ôontract with regarcl to pâyrnents in forcignexchange;
(iv) Govenmerrt should continue to accord the.project adequate rnaintenance toensure the sustainability of the project benefits.
BSO/0262M
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For the Bank
(i)
(ii)
desk and site supervision on projects should be intensified. The Bank shouldforward conunents on Monthly Progress Reports to the Exeorting Agcncyeven if there is no adverse opinion on the progress of work;
wherc payment to the Contractor, Consultant and Supplier in foreignexchange is involved, the Bank should opt for direct payment method ofdisbursement;
launching missions should be mounted on rcgular basis for earlyeffectiveness of loans.
the Bank should favourably consider the utilisation of thc loan savings (UA1.28 million) by the Govemment to remedy stnrcturd failures and other roadworks.
(ifi)
(iv)
bSo/û262M
ANNEX I
K E N Y A
HOMA BAY-RONGO ROAD (PPAR)
AGRICULTURAL PRODUCTION OI CASH AND FOOD CROPSlilAJOR F00D CR0P YIELD PROJECTIONS: 1988 - 1993 (BAGS)
1987 188Y l e l d ( H a )
I 988189Y l e l d
I 989/90Y l e l d
I 990/91Y l e l d
l99t 192Y l e l d ( H a )
llal ze
Beans
Sorghum
Fl riger Ml I I et
1 , 7 7 0 , 0 0 0( 59 ,000)
I 3 2 , 6 6 0( 7 , 3 7 0 )
4 1 2 , 0 0 0( 20 ,600)
34,920( 2 , 9 1 0 )
1 , 9 5 0 , 0 0 0
1 80 ,648
480, 300
36,000
2 , 1 00,000
27,004
500,000
42,000
2, I 60 ,000
270,000
500,000
42,000
2,250,000( 75,000)
270,000( | 5,000)
600,000(30,000)
48,000(4,000)
CASH CROP YIELD PROJECTIONS: I988-1993(TONS)
Crop r 987/88Y l e l d( H a )
I 988/89Y l e l d( H a )
r 989/ 90Y l e l d( Ha)
r 990/9rY l e l d( Ha)
r99t 192 1992193Y f e l d Y f e f d(Ha) (Ha)
Sunflower
Sugar Cane
Coffee
Cotton
680( I , 7 0 0 )
600,000i l 5,000)
3 , 6 7 0( 920)
3 , . l 5 0( 7 , 0 û 0 )
700f i , 7 5 0 )
64û,000f i 6,000)
3 , 6 7 0f i , 4 0 0 )
3 , 5 2 5( 7 ,500)
740f l , 8 5 0 )
720,000f l 8,000)
6 , 5 0 0 'f i , 8 0 0 )
4 , 0 0 0( 8 , 0 0 0 ) ,
800( 2 , 0 0 0 )
800,000( 20 ,000)
I ,000( 3 ,000)
4 , 7 3 0(8 ,600)
860( 2 , 1 5 0 )
960,000( 24 ,000)
l0 ,000( 4 ,000)
5 ,400( I ,000)
924(2 ,300)
I , 2 0 0 , 0 0 0(28,000)
l2 ,000( 6 ,000)
6,000f i 0,000)
S o u r c e : M l n i s t r y o f A g r i c u l t u r e : S o u t h N y a n s a D l s t r l c t , A n n u a l R e p o r t .
BSO/0262M
ABBREVIATIONS
r è r -
ADB Afrlcan Developnent Bank
AIIF Afrlcan DevelopmenÈ Fund
ADT Average Dally Traffic
F.E" Foreign Enchange
CDP Gross Domestle Product
GOK Government of Kenya
HG\t Heavy Goods Vehicle
L.C. Local Cost
tctt Ltght Goods Vehicle
tlG\t Medlurn Goode Vehicle
I{OPW Mlnletry of Publlc I'lorks
PC Paseenger Car
VOC Vehlcle OperatLng Coste
qUARTERLY E(CIIANGE RAÎES
Àppraleal 5/80 : 1 UA = K.She 9.659969
Effectlve Flrsr Dlsbursement 6lg2 : I UA = K.She 11.9500
Effectlve taet Dlsbursement 2189 : 1 UA = K-Sha 25-O292
3
lferu-{laua Road (7) Eoma Bay -Rongo Road (8) Kenya Rallwaye (9, Nakuru-Nyahururu (10) Mumias-Kakamega Road (11) Kenya-Sudan Link Road and (12) Thika-llakutano Road.
L.2.2 Seven of the above projects have been successfuly completed namely :the I\co InternationaL Roads; Yala-Busia Road; Makutano-Tana Bridge-SaganaRoad; Kitale-Kapengurla road; South Nyanza Sugar Road; Meru-Maua Road; KenyaRallways and the Homa Bay -Rongo Road, the subject of thls PCR.
L.2.3 0f the remaining five proJects, the Mumiae-Kakanega, andNakuru-Nyâhururu Roads projects have been completed although the PCRe on themare etil1 outetanding. The Kenya-Sudan Link Roads hae been eubsÈantLallycompleted and the one year maintenance guarantee period started in June,1989. the construction of Thika-ùlakutano Road le expected to cormence by thebeginnlng of 1990.
'2, PROJECT IDEI{TIFICATIONT PREPARATI0N Æ{D APPRAISAL
' 2.L Project ldent i f lcat lon
2,L.L The project l raa ident i f ied by an ADB ldent i f icat lon Èean whlchvlelÈed Kenya in February L978. Following thls mieslon, the Governmerrt ofKenya ln the 6arne month formally asked the Bank to conslder the flnance ofthie proJect. Thus in Mareh L978, the project was included ln the actlveplpellne of potentlal projects for Kenya, and eLated to be appraieed ln thefourth quarter af L979
2.L.2 Prl.or to the lnôluelon of the Eoma Bay - Roago Road proJect ln theplpellne, the Nyahururu-Nakuru Road wae awaitlng procèselng foi fLnance. InOctober L979 the Homa Bay-Rongo Road was made a top priority proJect by ÈheGovernment and wae proposed to be lmproved ahead of the Nyahururu-Nakuru road.
2.L.3 The Homa Bay-Rongo Road le Located ln the South Nyanza Dlstrlct ofthe lfyanza Provl.nce of Kenya. South Nyanza waê one of the 23 dlstrlcteaelected for incluslon ln the then natlonwide rural accesa roade progranme toprovide all-weather road and acceas between farmLng areaa, marketl.ng, andeocial service facilltles. the Homa Bay-Rongo Road was one of such accesgroade.
! .1.4 In addft lon, the project was perceLved to be of high pr lor l ty to theGovernment of Kenya(GoK) as lt would Llnk up with the ADB financed roade ofthe South Nyanza Sugar Scheme, and the dietrict headquarters of Homa Bay anilthe lnternatlonal A1.
2.2 Preparatlon. Agpralsal. Negotlatton and Aggroval
Preparation
2.2.1 The feaslblllty etudiee for the Homa Bay-Rongo Road were carrled outlnhouee by the then Ministry of Transport and Comnunlcatl-ons (RoadeDepartment). the subsequent detal led engineering were done by a consultant,the eervicee being paid for by the GOK from i ts own resources.
2.2.2 An updated economle etudy, the detal led engineerLngr tender documenteetc were forwarded to the Bank in September L979 for review and comnente. fnJuly 1980, fol lowing a supervision mlsslon for other traneport proJecta toKenya, the reports were dlscussed with the GOK and the reporte amended or madeto conform to Bank procedures.
ADDraleal
2.2.3 The project was appraised by a teaman englneer and a loan officer) beEween Zndabove, there was urgency expreeeed throughouttbe projeet. .Thle keen lntereet wae expressedNARO off lce.
of three (a traneport economLettand 1-8th May 1980. Ae indlcatedthe appraieaL and proceeslng of
by both the GOK and the reglonal
2.2.4 The appralsal report was based on the feaslbi l l ty study and detal let lenglneerirg by a consultant (para. 2.2.L) and other f ie ld information and daÈacol lected ln the f teLd during the May mlesLon.
2.2.5 The economic analyeis concentrated on the r ight issues of juet i fytng
the proJect. These included the minimisat ion of vehicle operat ing costs (VOC);
the avoidance of naintenance costs and time savings. Traffic proJectloneconprl.eed normal, dlverted and generated as a result of the improvement of theproJect road.
2.2.6 The contract documente generally were formulated in aceordance wlthrecomrendatlons of the FIDIC and the requiremente of the M0TC and the Bank-the ADB appralsal mission reconruended the incluelon in the contract of thereconetructlon of the 1.5 km long main road in Homa Bay and the resurfaclng ofthe 1.5 km long main road through Rongo Townshlp. These changes were acceptedby the MOTC and the contract documente amended accordingly.
2.2.7 Ihe geometr lc deslgn and the traneverse prof l le of the road wae to
comply wlth the requiremegts for Class C Roads as indlcated in the Road Design
Manual Part I prepared by the Ministry of I'Iqrks in Kenya.
2.2.8 Ttre pavement was to be designed in accordance wlth Road Note 31Leeued by the Transport and Road Reeearch Laboratory (TRRI) of the Unlted
Klngdom based upon a design l l fe of L5 years. Howeverrthe appraLsal noted
that the proJect road ls capabLe of meetlng the traf f ic projected ln the
economlc analyele over the full 20 year period. The hydrologlcal deelgn of
the road was baaed on TRRL Report No. 623.
lleqotLetlon
2.2.9 Internal ly, the scope and content of the project dld not change
much. Loan negotlatlons took place on 18th August 1980 and there \dere no
maJor igauee raleed by the Bank or the Borrower concerning the project road.
Approval
Z.2.LA The proJeet was approved by the Board on 27th August 1980. Condit loneprlor to flrst disbursement incl-uded only the turdertaking to make budgetary
i l locat lone and meeting of cost overruns. Two l tems in other condiEione were
of lnterest. These concerned the l -ntroduct ion of ef fect ive control of vehlcLe
overloadLng on the project road; and the enaurâIrce of ProPer and blnely
uaintenance of the pioject road in acc.orclance wlth the reconrnendatlons of the
Torld Bank Kenya Elghway Maintenaee Study of 1970.
2.3 Targets and-GeêlÉ.
2.3.L the project waÉi targeted to st lmulate the l -ocal economy of Sout 'h
NyanzaS and to fac iL l ta te the task o f admin is te r lng the d ie t r i c t and to aee le t
f ; lnprovlng the l lv ing standarcls of the inhabitants of, the project area'
ffADB Afrlcan Developnent Bank
ADf Afrlcan Development Fund
ADf Average Dally lraffic
F.E. Foreign Bcchaage
GIIP Groee Domestic Product
GOK Government of Kenya
HG'tt Eeavy Goode Vehicle
L.C. Local Coet
IÆV Ltght Goode Vehlcle
UGV Medlnn Goods Vehicle
ll0Pl.t ltllnietry of Publlc lJorks
PC Passenger Car
VOC Vehlcle Operatlng Coets
qUARTERTI E!(CEANGE RATES
Appralsal 5/80 : I UA - K.She 9.659969
Effectlve Flrst Dlsburgemernt 6182 : 1 UA = K.She 11.9500
Ef,fectlve Iagt Dleburaement 2189 : t UA = (.96e 25.O292
TABLE OF COI{TENTS
SASIC PROJECÎ DATA
Iillr.ODUClrOl{
1.1 The Transport SyetemL.2 Bank Group Role in the Sector
PROJECÎ IDETiMIFICATION. PREPARATION AIVD APPRAISAL
2.L ProJect ldent l f icat ion2.2 Preparatl.on, Appraleal, Negotiation and Approval2.3 Targete and Goale2.4 ProJect Deecrlpt ion
PROJECT IMPIEI{ENÏATION Æ,ID COSTS
3.1 Effect lvenees and Start-Up3.2 Revleions3.3 Implementation Schedule3.4 Report lng3.5 Procurehent3 .6 ProJec t Coets3.7 Diebureement and FLnancl.ng Sourcee3.8 Performance of Coneultante and Contractore3.9 Phyelcal Performance of the ProJect
INSTITUTIOI\IAL DEUELOPMENT
ECONOÈIIC REEVALUATION
5.1 Appralsal Expectat lons5.2 ProJect Effects and Developmente5.3 Re-calculat lon of Economlc Rate of Return
BANK'S AI{D BORROIIER'S PERFORMAT{CE
6.1 Bank'e Performance6.2 Borrower's Performanèe
COI{CLUSIOI{S AT{D RECOM}IENDATIONS
7.L Conc lus lons7.2 Recommendat ions
Page
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11 .
2 .
3 .
12
3345
567I9
10111313
l4
14L416
L 7
L 718
19
1 920
4 .
5 .
6 .
7 .
Thle report has been prepared by Messrs. M. l , tARU{O (Civt t Engfneer) andH. I{YAII|E-MENSAH (Senior Transport Economist ) f oLlowlng their miaeion to Kenyaln Aprt l , 1989. Further informatlon concerning this report may be obÈalnedf r o m M r . M . O . M A I c A , C h i e f , N I S I . l ( g x t . 3 1 1 9 ) a n d M r . A . M T E G H A , C h i e f , N C P R . 2( n : r t . 3 1 1 5 ) .
1
1. INISIDUCÎ,rcN
1.1 The Traneport S-lL6-Ëe
2
L.L,f the natlonal carrler Le Kenya Alrwaye, e pereatatal whleh operatee a
relatlvely mlxed fleet of aLrcraft as followe : 2 no. 4310; 1 no. each of B27t
and DC9; 2 no. A7O7i 3 no. F27. Ttre alrllne route network le relatlvely
e*tensive coverLng internatlonal long haul (Europel Indlar Pakletan) and
reglonal long haul (Zambfa, Botawana, Halawl, Zlmbabwe), ae well ae wlthln Èhe
Eaet Afrlcan eub-regLon, and domeetlc fllghte.lhe number of alrcraft movementa
handled at the alrports ls about 201000 annually, whlle Passenger novements
hls,tcached the 1.8 nlllton mark. In Èhe eame veln the frelght moved le about451000 toÉrg ln recent yeare and thle le accounted malnly by horticulturalproducte for export.
1.1.8 the prlncipal seaport ln Kenya ie Mombasa whlch le admlnistered by
Èhe State-owned Kenya Ports Authorlty (KPA). KPA aleo admlnletera the mlnorporte ât thlmonle Utwapa, Mallndl1 and Lanu. The Mombasa Port hae extenelve
lnfraatructure of 16 déep water berthsi 3 ol1 berths; 3 contaLner berthe3 2
cenent berthe; and 2 llghterage berths. Monbasa handles not only Kenya'e
lnternatlonal trade but elso the transit traffic for Uganda, Rwanda, Burundl
and certaLn parts of Zaire and Sudan. Preeently the port handles about 6 to
6.5 nill[on tone of cargo, and of thie amount, approxinately one-'thJ'r<l le
exporte (malnly agrlcultuial products of coffee and tea, but also slgnlflcant
.rol,nea of cement, eoda aah, and bunker ol1), and the remal'nder le Lnporte(petrolegm ol ls in bulk, fert l l lzere, wheat, l ron and steel, palm ol1 and
general cargo).
1.1.9 The State-owned Kenya Pipeline Company operates a 425 km plpelhe to
transport whlte oLl products from Mombaea to Nalrobi, whence lt le dlstrlbuted
natloially and lnternationally by rall and truck. The pipeline hae a capaclty
of two and one thlrd milllon toûnea wlth the four preeenÈ pumplng etatlone but
hae the potentlal to increaae to 5 mllllon tonnes'
1.1.10 Slnce Lg|g, throughput has ranged between 1 to L.2 ml l l lon tone
anngally. The ehortfall between capacity and throughput arlsee from the lack
of demand rather than operatlng dlfficulties elnce the whole plpellne
atructure le well malntalned.
1.1.11 In aurmary, it can be seen that the Eransport sector ln Kenya has
tradltionally pfayéa g1ro rolee: that of a catalyet I'n the natLonal
developnrent3 and tt"t of a vl.tal transit link ln the movement of goode f9t
Kenya'e netitrUour6r The efficiency wlth which the traneport syetem operatea I'a
therefore ciltlcal on a regional level as well aB on a natLonal basls. For
thle reason conditlon of rnuch of the infraetructure, particularly the road and
rall networks glve8 cause for concern because of the physical deterloration of
facl l l t les caueed by lnsuff ic ient maintenance'
1.1.12 The ei tuatLon requires consLderable rehabl l l tat lon, as wel l aa the
re-egtabliehment of maintenance proceduree and operations' The Government iS
eware of thie and, indeed, o.rJ of the prinelpal tenets -9f the NatLonal
Developmenr plan (fôAa-gg) and the current Development Plan (1989-1993) ls to
piot""i the l-nfrastructure I and the Government has instituted rehabilltatlon
programnes for both road and rail modes'
L.2 Eagk Group Role ln the Sector
t.2.L The Bank Gr:oup has financed twelve transport proJects ln Kenya,
repreeenting a total cànunitment of UA 7L.7 mlll-ion from ADB and UA 18'36
mlilton from ADF. Previoue and on-going projects Ln the transport sector are
(1) Tno Internitional Roads Q) iara-susiâ Road (3) Makutano-Tana Brldge-
à"t*rl -
noaa (4) Kltale-Kap.rrgrrtf t Road (5 ) SouÈh Nyanza Sugar Road (6 )
- i -
BASIC PROJECT DATA
1. COI'NTRT2. PROJECT3. LOAI{ NUIBER4. BORROWER5. BEI{EFICIART6. H(ECUTING AGENCY
A. toAl{
1. REQUEST FOR LOÆ,I (oate)2. AItlOtNT (UA mtllion)3. IT{TERSSÎ RATE4. REPAIT'IENT PERIOD5. CRACE PERIOD6. LOÆ{ NEGOTIATION DATE7. LOAN APPROVAL DATE8. LOAIV SIENAÎURE DAÎE9. LOÆ,I EFFECTMNESS DATE
B. PROJECT DATA
KENYAHoma Bay-Rongo Roadcs/K/rR/81/011Government of the Republlc of KenyaGovernrnent of the Republic of KenyaMinistry of Transport and Cormunicatl.one
AppraisalEstlmate
5 . 37718 years
:
""""
Actual
February 19785 . 37T18 yeare3 years
18/08/802710818006lo2l8L26lO8l8L
1 ,2 .
1 .2 .
Total Cost (UA mil l ion)Fl.nanclng Plan (UA million)
7 . 7 4 3
F . C . L . C .
4 . 0 1 93 . 7 2 4
Ls106l8230161892l02l89
March 1981May 1985
: Completed: March 1981: May l-985: Fair: EaLr: Fair: Appraisal (39U) PcR (34.51)
F . C .
7 .389
L . C .
\.
ADB 5.249Governrnent - 2.141
3. DEADLTNE FoR FrRsr DTSBRUSEI.|ENT 31 December 19914. EFtr'ECTIVE DATE OF FIRST DISSBURSEMEI\IT5. DEADLTNE FoR LAsr DTsBURsE[,tENr 31 December 19g46. EFFECTIVE DATE OF I,ASI DISBURSEMENT7. COÛIMENCE!,IENT OF TJORKS Mav 19818. DATE 0F COMPLETION OF WORKS November t9g2
G. PERtr'0RMANCE TNDTCATORS
3. Project Implementat ion Statue-Date ProJect Started-Date Project Completed
4. fngt i tut ional Performance5. ConÈract,or Performance6. Coneultant Performance7 . I E R R ( Z )
c031 ovERRtN (u) : 312 ln K.She and 5l ln UATIME OVERRI'N/IJNDERI'N-Sl lppage of Flrst Disbursement : 5.5 months-Sllppage of Laet Dlsbursement : 4.5 years-Number of Extensions of Last Dlsbursement: 3 times-sltppage of compLetion Date :30 monthe eompared to Appraleal
D. I,IISSIOilS
- 1 1 -
No. Per6ons Man-weeks*Datee
4-20121784180z-LSlsleot-Lol5l8r8-241t01L98227 ILL-L6lL2l843Ll3-2L14189
- Identif lcatlon:- Preparation :- Appraieal :- Follow-up :
- Supenrlsloa :- P C R :
E. DISBURSEI|ENT (Annual)
- Total Diabursed- Anount Cancelled- Unueed Balance
- Yearly DLsbureement
F. COlflRAC�oR(Sr/SUPPLTER(S)
- Nane- Reeponstbt l i ty- Date contract signed- Date contract cornpleted- Contract duratl-on- Tender anount
- Contraet duratlon- Tender anount
l{ane of Prolect
Two lnternational roadsYala-Busia roadllekutrno-Tana Bri dge-Sagana roadKltf lc-Xapenguri a roadSouth Nyanza roadlleru-l{aua roadKenyr Railwrysl{akuru-tlyahururu roadilumlas-Kakanega roadKenyr-Sudan Link roadThl ke-Huftutano road
uA 1 .619uA 1 .933uA 0 .174uA 0.293
3 Messr6. Hayer Bishan Singh and Sone: Civll works: l l th February, 1981
May, 1986 (nnd of Malntenance)50 months (Actual)K . S h e 6 0 , 0 6 0 , 4 2 1
3L3I322
7N/A72I24
(*) Eet lmated slnce most mLssions lncluded other act lv i t iee.
AppralealEstimate
uo
: .3
mi l l ion
Actual
4 .019 ml l l lon
1 .281 ml l l lon
L982198319841989
UA
UA
Ln1nLnin
G. CONSULTAI{T
- l{ane : Sir Alexandar Gibb and Partnere- Date contract s igned : 13.03.81- Date contract completed : June, 1988 (afÈer preparatlon of final
cert i f lcate ): 74 months: K .Shs 2r I72rOOO
U. OÎEER BÆ,IK GROUP FINÆ{CED PROJECTS I}T THE TRAIISPORT SECÎOR IN KENTA
Loan Amounti l i l l i on
U A 2 . 3UA 3 .0uA 3.0UA 3.0U A 5 . 0u A 4 . 1 0uA r0.0uA 9.0FUA 6.53uA 27.0FUA I I .83
Year ofApproval
r967l97 l1974| 975r977r978| 980l98 lr983r983r 988
LIST OT ANNEKES
Annex No.
1. ProJect Locat ion Map
2. Actual and E:rpected proJect rmplementatlon schedulee
3. Detaile of Actr.ral and Appraisal Estimatesof Project Coste
4. Comparlson Between Actual Project andLoan Dlaburaements Schedulee
5. Traffic Growth L976-L988
6. South Nyanza Distr ict Product lon Stat ist i .cs
7, Actual and ProJected Traff lc
8. Recalculatlon of Economlc RaÈe of Return
No. ofPagee
1
2
1
1
I
I
L
1
5
Ttrle goal was to be achieved through the upgrading to all-weather standard theelngle most important road link between the district headquartere tor*n of f,onaBay and Kenya's main arterial- highway syetem.
2'g.2 The proJect formed part of the Kenya Governnent'e uaeeLve ruraldeveloprnent progranne to lnprove the livlng conditions of the rural populatlonand to provlde galnful employment for the people. Thue the project road wae.eeeentlaLly a developmental road for the Homa Bay-Rongo environs which hadconei.derable agrlcultural and tourlet potentlal.
2 , 4 . L
2.4 Project Descrlgt lon
ltre project aB appralsed and approved consisted of the followlngcomponents:
f) the conetruction of a two-lane bltumen standard of the Homa BayRongo Road lncluding the resurfacing of a 1.5 km of maln
, ;ï;;',n;:"tr",?;"ff:iii# i,::i::"';l',13";j 31'7 km rn the
f f ) consultancy services for the eupervlelon of contract worke
2.4,2 In detaf l , the reconetructed road waa to fol low the then exlst lngallgrrnentl excludl.ng minor variations. The conetruction worke nas expecÈednot to LnvoLve any major earthworka or new bridglng but conelderable remedLaleub-grade worke and some {mprovements to the road dralnage.
2.4.3 The pavement was to conel.st of a llme etabLLLzed, eub-baee courae (100mr) and a double bitumlnous eurfacê treatment. The carrlageway wldth traa:deelgned for 6 m with two 1 m wide shoulders. The ehouldere were to forned byextendLng the sub-base and baee courses and flnlshlng wlth a slngle b{tuminoueeurface treatment. About 76 junctions nere identlfled to be properlyconetructed.
2.4.4 The supenrlslon of constructlon worke rag to be tmdertaken by a ftrrof coneultlng englneers wLth a resldent englneer who was to act â6 the agentof the coK.
3. .PROJECT TMPJ.EilENTATT9N Æ.{D COSTS
3,1 Effect iveneee and Start-Up
3.1.1 A sl lght delay occurred in the loan slgnature which took place on the6th February 1981-r about 5 months after the loan approval. The ADB l-oan of UA5.3 mllllon was approved on 27th August, 1980. the loan condltlons precedentto flràt dlsbursement lrere fulftl led by 2nd July 1981 and the loan waodeclared effectlve on the 26th Auguet, 1981. The loan conditlonÊ werefulftlled flve months after the eigning of the loan agreement. Even thoughall the loan condltlons precedent to flrst disbursement were standârd and dtdnot present any particular probleme, it took one yea,t to declare the loanef,fecÈlve. ThLe was duê to a delay ln the loan elgnature and elott procealngof the loan, condltlons precedent to flret dlsbursement by the Borrower'ebpectàlly the latç eubntlealon of the Legal opinlon.
3.L.2 The procurement of the consultancy servLces contracts nas done veryrapldly and the Bank rras put under conslderable pre66ure by the executLngagency, to approve the different stages of procurement, and the formalapprovald of the Bank were often late. The timing for the preparatlon of
6
propoeals by consul.tants and tenders by contractore waa shorter than thaÈnornally required by the Bank. Both the coneultancy and conetruetion eenriceecontracts were awarded and became effective by March, 1981 only 6 months afterthe loan approval.The coneËruction works were conunenced by the 15th March,1981 whlle the consultancy servlce etarted in November, 1980 ln order toaeslet ln the evaluat ion of tendere.
3.1.3 Overal l , the project implementat ion was wel l within the eet lmatedechedule up to the December, 1981 (see para. 3.3.4(a). The Government,however, dtd not meet the deadllne for firet diebursement whlch explred on31et December, 1981 and thls led to comnencement of loan disbureement only lnJunet L982.
3.2 Revlslone
3.2.L Several design modif icat ions \rere made, the lmportant onea were lnthe earthworks and draLnage. ft was origlnaLly envLsaged ln the deelgp thaËthe exlstlng gravel road would be used ae formation but Lt was diecovered atan early etage of construction that the bearing strength of the eubgrade waalnadequate becauee of the preoence of unsuitable black cotton soil. It wagthen decided to replace the unsuLtable material wtth selected ftll and thevertlcal aLlgnnent had to be redesigned ahead of constructlon. The deelgnnodlflcatlon of the vertical all-gnment led to an increaee of the coBt ofearthworke and dralnage by 421" and 431 respectively over the tenderedamorrntg.The changea nere brought about by ineufflcient solle inveetLgatl.onedurlng the deelgn of the road. the changee did not, however, have a aerlouelmpact on the work progralrne of the contractor.
3.2'.2 FLve maJor variatlon ordere were issued to the contractor durlng theconetruct lon period ae fol lows:
VarLatlonOrder No. Date of Lseue
18 .05 .81
1 6 , 1 2 . 8 1
24.04.84
1 9 . 0 3 . 8 3
2 . 0 8 . 8 4
Ilescrlption
1. Replacement of temporary housing by rentedaccommodation
Approach roade and ral1 overpass onKleumu-Kakamega Road
Conetructlon of 0.367km of Kennedy Roadand Odera Akongo street Ln Homa Bay lownshlp
Construction of 2.6km of Kenyatta Avenue inIloma Bay township
Construct ion of 1.4km of Asego Road inHoma Bay township
2 .
3 .
4 .
5 .
ûarlatlon Qrder l{o.1 reeulted ln the reductlon of cost whlle Varlatlon Orders
No. 2 to 5 lncreased the scope of work and affected advereely the
fnplementatLon echedule even though Varlatlon,Order No.2 was later treated and
i"ia for under a separate contlact sl.nce tt tf,as remote from and totally
qnrelated to the project.
3.2.3 The addltlonal work ln the form of lmprovement of the roads/etreete
ulthln the Homa Bay townshlp was earried out ln order to lnprove traffl 'c
clreulatlon l-n the iownship, and the bulk of lts coet wae met dlrectly by the
Government. Since the additlonal work does not have a direct bearLng on the
7
expected project benefits, it could quite easily have been omitted from theproJect. tltth the above mentioned changes, the overalL length oE the roadworke changed from the appraisal est imate of 31.7 km Eo 36.9 km coosiet ing of32.5 km of the main road and 4.4km of. acceas roads within the Homa BayTownship.
3.2.4 The loan agreement was amended in respect of the extensione to Èhedeadl lnee for loan disbursement. The deadl ine for the f i rst diebursemeri t r taaextended fron 31 December 1981 to 30th Jtrne, 1982 due to delay ln theeubnLEelon of the signed contract agreement and the necessary Government,requeet for extension. The deadline for l-aet disbursement wae extended threet lmee, the laet extension wae to 30.06.89. The lat ter extension was caueed bylengthy dispute over the contractor 's claims for addlt lonal compensat ion. I ttook about two yearB to sett le the cLaims which were not i f ied as far back ae1986. 0ther than this, there were nelther supplementary loane nor loancancel lat lone.
3.3 Implementat ion Schedule
3.3.1 the Governrneut agency direct ly responelble for the executLon of theproJect waa the Roads Department of the Ministry of Transport andComunlcations aB was foreseen at the time of appraisal of the project. TheRoade Department was reorganized during the implementatlon of the projectualnly by: redeelgnation of positions below that of the Eead of theDepartment; dlvleion of the Development Branch lnto two branches of Dealgn andConetructloni and elevation of the Planning Branch to the l-evel of aDepartment wlthln the Ministry instead of being a Division wlthln the RoadeDepartment. It ls not considered that the re-organlzation had any Lmpact onÈhe lmplementat ion of the project.
3.3.2 The tender documents for the construct lon works were expected to beleeued ln mid 0ctober,l-980 and the contract awarded in mld February 1981 wlthÈhe corunencement of the construction works in mid 1981 for a eontract duratLon
of 18 months, that is, eubstantlal completlon wae expected in mld November
1982. The lgauance of the contract docurnente and Ehe award of contract were
dOte ln êccordance wlth the appralsal echedule, and the contoencement of Èhe
conetructlon wae two monthe ahead of the appraleal târget date.
3.3.3 Ttre maln Homa Bay-Rongo Road from km5+800 to km 32+500 waa
eubatant lal ly completed and opened to traf f lc by the 4th May 1983 whl le
km0+000 to km5+800 was completed by 17th January l-984, thu6, the construction
cchedule for the maLn road slipped by about 14 monthe. The addltlonal worke
ôrdered through Varlation Orders were achieved by the 23rd llay 1985 and Èhe
laat maintenance period explred on the 22ad May 1986. ûverall, the proJect
complet lon vras real lzed 2,5 years later than the appralsal est lmate. the
comparleon between the appraisal and the actual/implementation schedule lepreeented ln annex 2.
j .3.4 The delay of about 2.5 yearÊ ln the complet lon of the construct lodr
worke waa caused by var ious factors chief of whlch were:
a) The contraetor was not paid t imely the forelgn currency wlth
which he had hoped to procure Epare parts and Eome eseentLal
equipment. The works were progressing in accordance with the
accepted prograflme until December t981 when the contractor
could not obtain spare parts for repair of the broken down
plant. At this t ime the foreign exchange element of
à e r t i f i c a r e s N o s . 4 a n d 5 i s s u e d o r l 1 3 . 0 7 . 8 1 a n d 1 5 . 0 8 . 8 1
respect ively, wa6 unpaid. Instruct ions for i ts Payment by the
I
Bant yrere lssued only on 27.12.82 folLowing subnLgelon of edisbursement appl icaÈion dated 24.IL.82. Accordlng to thecontractor, his most ser ious problem lay with the cruahLngplant which could not produce on si te the bl tumen surfacingstone to specif icat ion since the main erusher component wa6r:nsultable for the type of rock readi ly avaLlable on el te,consequently, stone chlpplngs had to be re-cruehed to brl.ngtheu lnto specification and finaly some of the chlpplnge had tobe hauted from Kieumu, aome 170 km away from the proJect sl te.the contractor attempted to remedy el ippage of the workprogramne by hlrlng of addltional equlpment and nlght work' andthere was a notlceable improvement ln the progrees of the workeaf te r Ju ly 1982.
b) In September, 1982 there was a natl.onal shortage of fuel andregular fueL suppllee to the slte were reeumed ln January 1983but could not be eustalned for long because by the end ofFebruary 1983 the contractor was experiencing caehf lowproblems. The contractor, belng smal l did not have enorrghcapitalr Bo sllght deLays in payment put him in flnancLald l f f i cu l t iee .
c) The addlt ional construct lon works of. 4.4km of aece6a roade.Theee accounted for about 16 months of the proeJctlmplementation delaye .
d) The llmlted experlence and lnadequate organLeatLon of thecont rac tor .
e) The inclement weather aLso had some negative impact on theimplementat ion schedule.
3.3.5 fhe Lssue of non-payment of the foreign exchange to the contractor atthe early ÉtageÉ of the contraet could have been avoided if the Goverrunent
recognLzed the Lmpact it would have on the performance of the contractor or at
leaeù the Government should have facilitated Èhe importatlon of the needed
Bpare parts through the normal procedures for all-ocation of forelgn currency.
ftre lant did inteivene in the resolution of the issue in Novemberr 1982 but lt
wag too Late for the contractor to order essent lal equipment. the dlsrupt lons
caueed by the nat ional shortage of fuel and the inclement weatherr could not
have been reaeonably foreseen. The effect of ordering of the addit ional worke
was foreseen by the Government.
3.3.6 The appraisal implementat ion schedule was real lst ic ln respeet of the
construct ion pïr iod but not so in the case of t ime which was al lowed for
procurement ol the service.s. Irlhile the procurement was speeded uP and was
ignnlng sl tght ly ahead oi scheduLer not suff ic ient t ime wa6 given for
pr"p.ràtlott of tenders anrl sometimes thle may lead to uncompetitive tenders
ând- breach of the Bank rules of procedure for procurement aa it almost
happened ln the case of prequal i f icat ion of contractors.
3.4 Report ing
3.4.1. Monthly progress reports for the construet ion works were prepared by
the eupervision consultarrt and made available to the Bank. The quarterly
progress reporrs covering the whole project and prepared by the borrower in
Lhe- format of the Bank were submi.t tet l i r regular ly. The monthly progregs
9
rePorts presented adequate informatlon for purposee of monitori.ng the progregsof the project. A completLon report coverlng only the construci lon wôrkJ waaeubmltted by the Borrower.
3.5 Procurement
Constructl.on Woike
3.5.1 Ttre prequalifieatf.on notice was publlshed Ln one local newepaper butthe resPoaae to it nâs lnternational and of a wlde geographlc aietrl[ution.Thlrty four contractors were inltlally prequalified by thà cbvernment but whenthe Bank aeked for deÈailed informatlon on the orlgin and Érource of thecontractorer a l lst of L6 contractors was eubmitted wlth a,recormendatlon foracceptance of 11 of them. The Bank finally approved prequalifieation of sevencontractore because of ineltgibility of some of Ehe contractora recormrended bythe Government. The approval of the prequalificatl.on by the Bank wae g1vensubaeguent to recelpt of eight tenders, one of whlch was tnellglble. TheGovernnent rejected the ineligible tender.
3,5.2 The eecond lowest tender of the domest ic contractor, Messrs EayerBlshan Stngh and sons was accepted. The flrst lowest tender wae rejected onthe baele that the tenderer did not have eufficlent experl.ence and yet he waeprequal l f led.
Coeultancy eernrlcee '
3.5.3 FLve consultants were ehorÈllsted lncludlng the deelgn consultant.The ehortllet and requeet for proposal package wêre àpproved by the Bank. Ttreconeultancy contract wae awarded to the deelgn consultànt, Slr Alexander Glbband Partners (Afrlca), a Brltiah flrn baeed ln Kenya.The eelected coneultentevcn though forelgn, opted for payment Ln local currency and the contract vaesreeuted accordlngly.
(hrerall Aseegement
3.5.4 fté Procurement proceduree followed by the Goverrment rere notgenerally Ln accordance wLth thoee of the Bank but were all approved by theBank. The project wae aecopded a very hlgh prlority by Èhe Government, hencethe executl.ng agency took prompt actions Ln the proceselng of procurement a3dthe Bank recponces were generally regarded as slow aa evidenced by thecorre8Pondence ln the proJect fllee. The tlme allowed for the preparatl.on ofpropoe4la by the consultante and tenders by the proepective contractors wasËhort and yet conpetltlve blda were recelved. the reaaon for thle rea the
.fact that almogt all the blddera nere elther donestLc or had an offLce ln tbrcourtry. From the reeulta of the tender evaluatLon and the aeaeeament of tbËiierformance of the contractor, tt le concluded that the preqrrallf lcatlonanalyele was not done properly.
3.5.5 The Ëender docunents for Èhe congtructl.on made a provlal.on forpey[étrt of eervtcee ln both local and forelgn currencles and the eelectedcoûtrector asked for 152 of the contract 6um to be pald ln forelgn currencyand the contract was slgned oa thle baele, Upon eubmlesl.on of paJmenteertlflcatee lnc!.uding foreign exchange elemenÈ agreed in the contract, theGovernnent dld not make a payment in forelgn currency imnedlately becauseaccor{lng Èo the lawe of the cormtry domeetic contractore are not, ellglble fordlrecÈ pâltmenÈ ln forelgn currency. this yraÉ to become a naJor tseue whlchaffected the proJecL lmplementat ion adversely as explaLned in para 3.3.4. Theconeultancy eervices were not affected by this factor slnce the consultant hadopted for paynent in iocal currency.
10
3.5.6 l{o evidenee !ta6 found of the Bank approval of the flve Varlatl.onOrdere mentioned in para. 3.2.2, three of which increased the coat aFd theecope of the work. Failure of the Government to obtain the Bank approval formodlflcatlon of the project was contary to the provlsion ln the loan- AgreemenÈconcerning project plans and specif icat ions. The addit ional worke wereprocured dlrect by employlng the or iginal contractor.
3 . 6 . 1
3 . 6 P r o j e c t C o s t s
the to ta l es t imated cos t o f the pro jec t was K.Shs T I .37z mi l l ion , neÈof taxes. The accepted tender sums for the conetruction works and conaultencyeerv lcee nere K.Shs 60 .060 mi l l ion and K.Shs 2 .L72 mi lL ion respec t ive ly , atotal of K.She 62.232 mlLl lon incLusive of taxes. The tender aun for theconatruet ion works was subject to var iat ion of pr ice of basic mater lale whi lethat for aupervleion was variable in terms of the reLmbursable costa. Theactual coet of the proJect ls K.Shs 103.619 mll l lon lncluslve of taxes andR.Shs 93.348 mll l lon, net of taxea, assurnlng Èhe 6ane tax element aB atappralsaL elnce the contract ratee. were Lnelusive of taxes. The issue of notnaklng the tan elenent a eeparate coet ltem in contracts is conrnon and oftencomplLcatee recalculat ion of the net of taxe6 co6t as wel l aa thedeternlnatlon of the proportion of contract sums payable by the Bank.
3.6.2 Ttre comparlson between the appralsal and actual coats ls sunnarlzedln Table 3.1 below and given in detail in Annex 3. I
Tab le 3 .1Sununarv of Appraisal and ActuaL Costs
(Kshs mi l l ion)
ComgônenÈ
ConatructlonSupervlelonTOTAL
Taxea
Appralsal Estimate
68 .6732 , 6 9 9
7 L , 3 7 2
7 . 8 5 4
Actual Cost
87.995s .3s3
93 .348
LO.27L
Difference
(-) L9.322(-) z.ostr(-) 2L.e76
( - ) 2 .4L1
3.6.3 the actual cost in Kshs is 31% more than the appralsal esElmate. Thecost overrun is attr ibutable to the fol lowlng faetors:
The lncrease of quantitles of work itene such as earthworke anddrainage. the design changes were technically justlfied and lfthey were not made, the road pavement mlght have falledpremature ly .
The change of 6cope of work by an additionaL 4.4 km ofc o n s t r u c t i o n w o r k s ( p a r a . 3 . 2 . 2 ) .
The contractor's cl-aims for delayed paynrent of forelgn exchangeincreased the cost by Kshs 10.74 mil l ion, more than 10% of thetotal actual cost. This extra cost coul"d have been avoided l fal-1 the part ies concerned acted promptly.
The prolongation of the construction perLod Lncreased the coêtof supervision and added to pr ice escalat ion.
a )
b )
c )
d )
1 1
3.6.4 The cost overruns vrere met by the Government and the loan rtagdiebureed, ln Kenya shi l l . ings, up to the appraisal est imate of the foreLgnexchange cost less the consultancy servlces which were paid for by theGovernment. Therefore, the Governrnent ful f iL led i ts responsibi l i ty in respectof the cost overruns of the project.
3.6.5 The appraieal co6t est imates could have been suff ic ient i f thelmplementation of the project had not been extended by Ehe factors mentLonedln para . 3 .6 .2 (b) and (c ) . The base eoet y ra l we l l w i th ln the or lg lna leetlmatee and when the original- project is considered on its oltrl ' the costovernrn ls in the order of 9% of. the appraisal estimate and ie less than theextra cost paid to the contractor for àLaime against late payment of forelgncurrency. Ttrus, it can be said that sufficient provision waa made for thephysical and pr ice cont ingencies.
3.7 DLebursement and Financing Sourcee
3.7.1 The project was financed by Lhe ADB and the Government of Kenya(COK). The ADB f inance of UA 5.30 mil l ion was used for purpose of f inancing100[ of the foreigxr exchange cost of the project. The comparison beÈween theappralsal. and actual Eources of flnance is ehown in Table 3.2. The actualflnanclng plan assurnee the sarne proportions of the foreign exchange and localcosts aB at appraisal since there is no cost data to support the separatiorr ofthe actual coets into the two coet elements.
Tab le 3 .2Appraisal and Actual Sources of Finance
(Kehs Mil l ton)
Annrei sel Ect imetc Actrral AmormtsSource
ADB
GOK
lotal
Taxee
Total GOK
L . C . L . C . Total J_
3.7.2 the Bank actual ly patd 521 of the total cost,net of taxes as agalnet
the 7LZ eetimated originaLly. The Government did not seek reLmbursement of
any part of the cost for the consultancy services and of the lndlrect forelgnexchange expenditure hence there is an unused balance (UA L.281 mil l lon) ofthe loan amount. The Government of Kenya has not made any definite decLslonq)1 the u6e of this balance. I t is, however, considering el ther l ts
cancel lat ion or use for road maintenance.
3.7.3 The appraleal estlmated expenditure ln comnltments by year
expendlture and thls is compared hereafter to actual expendLture by Eource
f inance according to the datee of issue of the Payment cert l f icates.
F . E
s0 . 6 93
50 .693 20 .679
7 .854
lo ta1 f F .E .
50 .693 7L 48 .4s5
2A.679 29 L7.922
7L.372 100 66.377
7 .85t+
28 .533 17 .922
,+8.455 52
26.97L 44.891 48
26.97L 93.348 100
====== ====æ ===
L0.27L L0.27L
37 .242 55 .164
ofo f
L2
Tab le 3 .3Aporalsa'l and Actual Expenditure Schedule by Sources of Finance
( K s h s m i l l i o n l
1985 r986Source
ADB(Est imate(Actual
(Est lmrte(Actual
GOK
Total ( Est imate(Actual
Taxes( Estinate( Actual
Total (Est imateGOK (Actual
Conponcnt
Cons t ruc t i on (Es t ima te )(Actual )
Superv is ion (Est imate)(Actual )
l98 l r982 r983
23.463 27.2306.786 20.768 r4. r35
9 .57 r i l . r 08r3.30r 6.312 -0.84
r984
I . 625
r4.069 7 .067
1987 r988 Total
- s0.6935.141 1|8.455
20.6790.058 4.557 44.893
- 7.8541.067 r0 .27r
0 .369
oloao oloou
rl.rr, ,Lou olaog
3.7.4 The o<pendlture waa lncurred against the loan up to 1984' the tlnefor completion of the original proJect and then resumed in 1988 for settlementof the final palrnent due to the contractor after reeolutlon of the clal.msdlspute. The Government paid for all the coste incurred during the maJor partof 1984 and thereafter except for the claims settLement. these rvereprlnclpally for the additl.onal work ordered in 1984. the expenditure echeduleby component given below shows that payments made in 1987 were for consultancyservLcee rendered ln connection with the end of the final maintenance perlod
tn 1986 and the analysle of the contractor 's claims.
Tab le 3 .4Expenditure Schedule by Comoonent
( K . S h s m i l l i o n )
r98r r982 r983 t984 t985 1987 r988 Total
33.034 38 .33820.087 27.080 13.295 15.694 7.067
3,642 4.2122 . 2 1 1 2 . 9 8 0 1 . 4 6 3 1 . 7 2 6 0 . 7 7 8
1 3 . 2 1 3 1 5 . 3 2 0ls .s l2 9 .292 0 ,623
33.398 35.?751 9 . 0 0 9 2 5 . 1 9 1 1 2 . 1 ? 6
r . 3 4 9 1 . 3 5 0t . 0 7 8 L 8 8 9 l . 1 6 9
34.747 36.62520 .087 27 .A80 13 .295
,i.r,, ulr*
olrog olo* s.oge "Efr
28.s330.064 5.624 55. 164
1986
0 .365
i .rru o.z7s olooq o.os'
- 68.6739 .698 87 .995
2.6995 .353
7r.3720.058 9 .698 93 .348
Total
faxes
( Estl mate )(Actual )
(Es t ima te )(Actual )
r 5 .594 7 .067 0 .369
t l
2.2r r 2 .980 I .463 1 .726 0 .778 olooo oloo, ,lou, .,i'.r'
( r ) E x p e n d i t u r e s c h e d u l e f o r t a x e s w a s n o t g i v e n i n t h e a p p r a i s a l r e p o r t .
1 3
3.7.5 T.he dlrbursement schedule appearlng Ln annexe 4 shows that the Bankcommenced the dlsbursement of Ëhe loan in June 1982 more than â yeat afterconmeccement of the coaetruction worke. This del-ay wa6 caused by Ehe laEeeubml,asion of the signed construction eontract agreement. Once th€dlebureements started, they were made regularly and within reaeonable time ofreceLpË of wlthdrawal applicattons, and the GovernmenE wae advLsed pronptly ofthe actr:aL payrnent instructl-ons given to the comnerciaL baoke. The lnltialdelay could have been avolded by flelding a project launchlng mieeion. Thedlrect forelgn currency payments were made to the contractor only in December1982, oûe year and nine months from the date of comrnencement of the worke.The responeibillty for this late payment 1ay with the Goverrunent.
9.7.6 There waa qn over disbursement in 1983 due to dupi. ieat ion ofappllcatlon for withdrawal of the loan against payment certifl-cates Nos. L7and l8 for whlch LSI was claimed in forelgn exchange and then combined Lntocert l f lcate No. L9 on which the balance, 852 was withdrawn from the toan.Later, 711 of the srrnr of certificates L7-L9 was claLmed agalnst the loan. ItLe not consldered that overall thie has caueed overdl.gbursement of the loanbecause the Governnent has borne a much higher proportlon of the coet of theproJect than should have been the case.
3 . 8 Performance of Conçultants and Contractors
Ttre Coneultant
3,9.1 the performance of the consultant lg on average judged as fair'. Thedealgn of the road by the consultant should have talcen lnto account thecondltlon of the soile underlying the gr:avel pavement which wae supPoeed to beLncorporated lnto the finaL works. Taking thls precaution at the deslgn etagecould have avol.ded cost overruns on the earthworks and to a certain extenÈ ont,he dralnage worka except for those whlch nere varied ln the Homay Baytownehlp. It took a long time for the contractor to complete ml.noroutstanding rçorks such as km 0+000 to km5+800 of the main road whlch tookalmosÈ a year to complete.The consultant should have been instrurnental towardea remedLal actLon by the Employer (Government) in this case.
The Contractor
3.8.2 The contractor 's performance waa not sat isfactory in terms ofdefielencles in the organization and marragemenb of Èhe contract works. Themain reagon fr :r these was insuff ic ient experience of the contractor in the
execut l .on o1 contracts of this magnitude. Addit ional ly the ccrrr t iactor 'stnadeqtrate f lnancial. resourcea added to his inabllity Èo acceleraf;.e theprogregs of the works. The workmanship of the contractor is noE of â hlghstandard but is acceptable.
3.9 PhyeLcal Performance of the Project
3.9.f The main road is st i lL in reasonable condit ion a"f ter al inr:st f iveyeare of trafflc uÊe except the bitumen surtlacing which showed sLgns of'
dlstress. The main eause of the distress ln the surfacing is the unsultabletype of bitumen binder used and to some extent the weekness in lto
conetruct ion joi"nt ' s i rni lar surfacing fai lures krere experlenced on other
roade where the same binder was used and i t was decided to di"scont inue ies use
ln Kenya, therefore, i t is no longer speci. f ied in road works.
3.g.2 Tlle inspection of the road shoyred that the routine maintenanrce of the
road vergee lnclurilng pavement shoulders was not done regularly whereae the
carriageway part of the pavement wâa maintai.ned aciequately" The Governrnent
L4
has taken actlon to reseal the road ln the ftfth year of ite life and work tothla effect was in progress during the PCR miesion. Pavement deformati.on wagnoÈed at two ieolated locatLone one of which is already corrected and areuedlal action wao contemplated for the other. The reseallng of the roadwlll correeÈ the defect tn ttre eurfaclng except for those plJeee where potholee had formed and depending on how they are repal.red, they may for:n agàlnwlthln a ahort time. The pot hole damage, ùowever, dàee not warrantreconstruct ion of long sect lons of the road.
4. INSTIT"T'IIONAL DEUELOPT{EI{Î
4.0.1 The proJect did not address the inetitut ionaleffect lt had wa6 a successful training of two counterpartslnce assuned important posit ions in the engineering f ield.
aspecte .engineers
Thewho
onlyhave
5. ÊCoilotrllc RE-HtrAtuATIoN
5.1. Appraisal E:cpectatione
5.1.1 The proJect road le located in the South Nyanza Dlstr lct of Kenya.Ïhe proJect road formed part of the rural access road programte which wasbelng nndertaken in Kenya during the end of the L970s and early 1980a. theHoma Bay-Rongo Road lras thought of to be of vital sbcial and economLce l g n l f l c a n c e i n È h e d i s t r i c t ( p a r a . 2 . 3 ) .
5.1.2 thus the mal.n alma of the proJect were to stlmulate the localeconomyr to facilltate the task of adminietering the distrlct and to lmprovethe llvlng standards and generaL movement of people and goods withln the SouthNyanza Dletrlct. The. project waa expected Èo help ln the evacuatlon ofpr lnclpal food and cash erope ae wel l as f iehlng.
5.1.3 l raf f lc waa forecaet from a base Average Dai ly Traff ic (ADT) of 265tn 1980 to be growlng at a general rate of 9.22 to 447 ln 1983 when the roadwould have been opened. the growth rate waÊ estimated at an annualgeneralLzed rate of 9.22 wlth each vehlcle category est imated to grow at adlfferent rate. For exanple, paaaenger car6 (PC) and nredlum goode vehlcleeand bueeg were expeeted to grow at 10f, per annun each.
5.1.4 the maLn economLc Juetlflcation for the proJect was baeed on threequant l f iable i tems of: vehicLe operat lng cost (VOC) savings; t ime eavlngs; andavoldance of nal.ntenance costs. Based on theser an economic rate of return of39%%f wae calculated over a 2}-year Life span of the project.
5.2 Project Effeets and Developmente
5.2.1 In Kenya, each of the classtf ied roade in the country hae been l letedand traff ic count si tes sel-ected for systematic aurveys. l raf f ic fLow data iecollected on routine basis by the Traffic Engineering Unlt of the MOPI.I.Addltlonal and supplementary information of epeclfic nature are sometl.mesobtained on indivldual basls conducted by the unit or by consultante. The HomaBay-Rongo road existing and current traffic data is based on polnt cenouecounts of l2-hour counts done from Monday to Friday with at least a 24-hourcount on one of these days.
1_5
5.2.2 In addit ion, automatic traf f ic count ing machines are used forcontinuous counts; as welL as various manual counts as the occasion demande.Veh lc le c lass i f l ca t ions inc lude the fo l low ing : p r iva te /passenger cara (PC) ;l ight gocds vehicLes (LcV); medium goods vehicles (MGV); heavy goods vehicles(HcV) and busee (B) .
5.2.3 The traffic growth on the Homa Bay-Rongo road in ADT ls shown inAnnex 5 for Èhe year L976, i .e. before the ini t iat ion and construct ion of theprojeet roadl through 1980-84, i .e. the construct ion period and posEconstruct ion period traf f ic f rom 1984 to 1988.
T a b l e 5 . 1Total Traff ic Çrowth: Appraisal Vs Actual (1983-88)
ïear Appraisal- Estimateq Actual as % of Appraieal
1980198119821983198419851986L9871988
Actual
506409324349391425457506556
t90z**80u80280280U802802
265**
447486532577631687
SOURCE:('t )
ADBNot
Appraisl Report , 1980, Ministry of Publ lc I ' Iorks, Aprl l 1989.avalLabLe
5.2.4 Annex 6 ehows the quantlty of cash and food crops produced ln theSouth Nyanza Distr ict for the period 1981 and 1988. Some of the food cropaproduced in the dlstr ict include: maize, r ice, eorghum, mi l let , caÊsava,potatoes and bananas. The fol lowing vegetablea are also produced: beane,kalel cabbages, tomatoes and onions. In terms of cash cropÊ: cotton,sugarcane, tobacco, and groundnuts are produced.
5.2.5 Between 1981 to 1983, maize, r ice, potatoes, and bananas to the tuneof zZt+tZL9; 1,883i L24r398; and 29358 tons respect ivel"y were produced ln the$outh Nyanza Distr lct corresponding roughly to the constructLon perLod.After the road was completed, roughly between 1984 and 1987' 160'160; L.0903631662 and 331054 tons respect ively of maLze, r ice, potatoes, and bananae wereproduced.
5.2.6 In terms of cash crops of Éugareane, cotton, and tobacco, for theper iod 1981-83, an average o f 2811385r 21679 and 21684 tona respec t ive ly wereproduced whi le for the period L984-L987 a corresponding average of 2641000,1 ,655 and 3 ,7 28 tons r^rere the outputs . The sugarcane traf f lc has beenslgnificant and has taken advantage of the project road to feed nearbyfac torLes .
5 .2 .7 S ta t i s t i cs on f i sh ing are no t d isagregated to the d is t r i c t leve1.Thue the catch figures are preciented for the whoLe output from l,ake Vfctoria.The followlng quânti-ty and value of flsh were landed from Lake VLetorl-abetween 1983-86. 0Ë rtre total 911068 metr ic tons of f resh water f ish recordedlanded in Kenya in 1983, 77,327 came from Lake Victor ia. For the years1984-86 about 71 ,854, 88 ,589 and 1 ,03 ,163 met r ic tons respec t ive ly were landed
1 6
which represented on the average 907" of the total catch from fregh waterBource6. Ïrr terms of value, the catch from Lake Victor ia ranged from Kf 6.0ml l l lon in 1 -983 to K f 11 .9 mi l l ion in l -986.
5.2.8 Developinents, economie act iv i t ies and traff ic growth hae to someextent been fairly related. The traffic growËh rate has been lower comparJ.ngappralsal est imates to actual f igures. But the overal l t raf f ic volume f lgureàare fair ly good considering the general and locaL economic si tuat ion of theperlod under revlew.
5.2.9 fn generaL traff lc in the area becomes disrupted due to thlnge l lkef loods. For example in 1985 most of the feeder roads to the project road weredl.srupted due to heavy rains in September/October, only the project roadeurvived the rains. Addit ional ly the mining and tour ism prospects projectedfor the area did not mater iaLize appreciably.
5 . 3 Re-calcul-at"ioq-of Economie Rate of R
5.3.1 the future traf f ic on the project road was assessed by consl lder irrgthe hlstor lcal growth raten taking into account the trends in the nat ionalvehicle popuLation' fuel consumption and the general economic growth. Fromtheser the projected growth pattern for normal traf f ic is cal-culated and anelement of generated and diverted traf f ic are subsequent ly est imated.
T a b l e 5 . 2Ilistorical-T-raf:tig Growth on Project Road (1080-88)
Vehlcle Tyge: eere I'GV MCV HcV Buees Total
G r o w t h % 2 . 5 1 . 3 2 . 3 4 4 - t 5 2 . 5
5.3.2 On a nat ional 1-eveL, an aÊseaament of t raf f lc recorded by Kenya'e 60-Polnt eeneus on alL classes of roads yielded the foLlowing growth ratesbetween the years 1982-1.986: cara 57"1 tGV 6Il McV 77"; IIGV 47"1 and busea 52.In addit ion the var iat- ions ln a nat ion's road vehicle populat ion le anLmportant indicator of the general direcÈion traf f ic is grovr lng.
5.3.3 From vehicle sales stat ist ics gathered between 1980-86, the fol lowlnggrowth ra tes fo r cars (3%) ; tvc (6%) ; MGV (3%) ; HcV (32) ; and buses (10%) havebeen est imated. I t tnust, be pointed out that for the l .ast few years, vehicleaales have decreased because of economic recession and other imporÈres t r i c t ions . Never the less , the u t i l i t y lvar r /min ibus veh ic le c lass , i .e . theLGV and buses which âre pracl j -caLly l"ocal ly assembled cont inue to increase.
5.3.4 Another factor ' which may infLuenee vehicle ueage and henee growth oftraf f ic is fuel consumption. Al though no restr ict ive measures Like fuelrat loning have been i .mposed in Kenya since the oi l - cr is is of L973, theconsunpt ion f igures re{ ' lect increasing restraint in fuel- usage. Growth ratesderived from fue1 ccrnsumption f igur:ee indicate that growth rates ln fuelconsurnpt ion for the rrar ious type6 of vehicles are: car6 -2.37"; LGV -2.3; MGV+1 .8%; HGV "rL " B%; and br-qses +1 .8%
5.3.5 Corrpled w. ihh ahove. the performance of the nat ional eeonomy couldhave tremendous inf ; luenee on the demarrd f or t ransport . Inereased nat ionalproduct ion in al" l ser: tç.r :s of, the economy may demand a propor[ ionate increaaein transport ser:vices. l io is increase in real per capita income result lng ingreater paesenger travel." The average annual growth in ÇDP of 5"4% has beenest imated for Kenya for: the l r i .annlng period 1984-88.
L 7
5.3.6 f,avlng consldered all the above factors, the followLng growth rateehavé been adopted for Èhe projection of traffic for the remaLnlng useful ltfeof the projeci , l .e. up to the year 2003; for ears 2.5%t for tGV 2.AI i for ! {GV3Z; for HGV 3% and for buses 2I. The growth rates are used to predlct. futuretrafflc for norrual traffic as shown ln Annex 7. Actual trafflc data ia ueedfor the years 1984-88
5,3,7 Trvo categorles of t raf f ic were conel.dered ln the proJecÈlon of futuretrafflc. These lnclude normal and lnduced trafflc (generated and dlverted).The normel traffic ls assumed to be the existlng and future traffic whlch lenot dependent on the improvemenÈ on the road. It ls the requl.red day-to-daytrafflc which meets the ordinary transport needs of routine economLc andsoclal act lv i ty of the project area.
5.3.8 Induced traffic (tottr dlverted and generated) te new trafflc thaÈarieee as a result of the new improvement of the road to bltrrminoue level .For thls analyeLs, 107 of the normal traffic ls expected to be Lnducede withone truck or IIG\I expected a6 a reault of mainly the sugar factory.
5.3.9 Annexed 7 and 8 show the computatlon and proJectlon of trafflc fornormal and lnduced. The Annexes also show the baele of the recalculation ofthe ERR. The benefits are based mainLy on VOC savings as a reeult. of thelmprovement of the road; the time savings as it pertalns in Kenya as a reeultof fagter travel time and avoidance of maintenance cost due to the superLorpavement. The benefits due to the lnduced traffic are taken to be 50[ of Èhatdue to normal traffic. Annexe 7 providee the basis for the detalle oflnformation for the calculation of the ERR.
5.3.10 For the purposes of the economlc analysis, proJect costs include theactual congtruction cost for the project and a rnaintenance coet aa presumedplus the supervlsLon cost. the recalculated ERR is 34.5%r in current K.Shetat ln constant 1988 pr ices.
6 . BAT'IK'S AI.ID BORROT{ER'S PERtr'ORMANCE
6.1 Bank's Performance
General
6.1.L In general terms the performanee of the Bank was falr . There weredef lc lencies in the Bank's performance as noted elsewhere in the rePort ' chLefof whlch was inadequate field supervlsion of the irroject. Thie obeervat,ion wasalso made by the Borrower.
Project Juet l f lcat lon and Object: lvee
6.L.2 The project was a pr ior l ty in the transport sector and remalne 8oto-date. The economic and social impact on the basis of which i t was just i f led
ls analysed ln detai l in Chapter 5.
Loan Conditions
6.1.3 0f the loan corrdi t ions included in the loan agreement, that requlr lng
an lntroduct ion of an "effect ive control of vehicLe Loading on the project
roàd" (Art ic l-e VI, sect ion 6.02(b) of the Loan Agreement) was not qul teprâct lcal . The imposit ion of the axle- load control measures on a single
eecondary road and the consequential capital and administrative costs would
have been di f f lcul t to just i fy unless l t was a normal poLicy of the Governnent
1 B
to exerciee such a control on roads of the 6ame claesi f icatLon. f t appearethat the leeue of vehicle over- loading affected not only the project road butal l the naÈlonal roads and should have been addreesed at sectoral level go aBÈo encourage the Government to Save the national roads from premature fallurecaused by over- loaded vehicles. Subsequent road project loan agreements havealready addressed this issue and the Government has taken active steps towardelntroduct lon of a nat i .onwide conErol of over- loaded vehicles.
Prolect fmolementatlon and Oneratins Outcome
6.L.4 Ae mentioned earl ler on, the Bank found i t di f f icul t to adhere to theappraisal . t iming for procurement of goods and services and i ts approvals wereoften glven after the fact. The approvals referred to concern Bank's revlewof prequal l f icaÈion and tender analysis reports prepared by the Borrower. I tle aaar.med that this situation may have arisen from the fact Èhat eufficl-entreeourceg and time were not devoted to proJect implementatLon andeupervlslon. I t should also be noted that - misunderstanding such aspreqr:al l f lcat lon of tnel igtble contractors by the Borrower and the loandisbureement issues mentioned in para. 3.7.5 might have been avoLded byfteldlng project launching missione comprising project, loan and disburoemento f f l c e r e .
b . f .S Ae ment ioned in para . 6 .1 .1 , the f ieLd superv is lon o f the pro jec t waslacklng. The only eupevisLon mission on record took place at the end of 1984when the project was nearing completion. Fo11ow-up mlssions do not apPear tohave been ln the poeition to reeolve the issues ldentified in thia reportexcept for the palment of the foreign exchange to the contractor whlch appearsto have been expedited by a missiorr f ie lded around October/November, L982.
6.1.6 It ls clear from the information available that there waa Bomeurgency attached to the implementation of the proJect. Under theeecl.rcumetancee, the Bank rules and procedures for procurement were regarded aBan lmpedl.ment to the acceleration of progrese of the project ln spite of thelrretaxatlon to acconunodate the actions taken by the Borrower prior to obÈalnLngthe neceesary approvals
6.L.7 the Borrower has to i ts best abl l i ty t r led to ful f l l l loan condLtLoneattached to the project except for that requiring introduction of an effectlvecontroL of vehicLe over-loading on the project road which ls conmented upon inpara.6.L.3. Concernlng the loan condit ion requlr ing the Borrower to enaureproper and t lmely maintenance of the project road in accordance wlth thereconunèndatione of the World Bank Kenya Highway lvlaintenance Study of 1970'rout lne maintenance of the road verges was not properly carr ied outr however,the periodic maintenace has been embarked upon on a timel-y basis. The focusof the mal.ntenance study referred to above waa introduct lon and effectLvelmplementaElon of a Êatisfactory road maintenance management system. Indeed,the required system has been introduced recent ly with the assistance of theWor ld Bank bu t i t i6 too ear ly to assess i t s e f fec t i veness .
6.2 Dorrsu.er'Ë_P-*e:forrttqaç_e-
6.2.L The performance of the Borrower was not general ly sat isfactory lnrespect of processing the procurement of goods and services. The areae lnwhlch the Borrower'B performance was not sat isfactory are:
a) Failure of the Government to make timely Palrments of f orelgn
currency to the contractor for work done and in accordance wi th
the provisions of the contracE agr:eement. The Governrnent
should have done i -hs best to fac i l i ta te âccesÉi of the
1 9
contractor to the foreign exchange provided
order to eneourâge the development and
conEractor through the Project '
by the Bank inof the domest ic
Late t iming for l -oan signature, ful f i lment of loan condl- t lons
precedent to f i rst disbursement, and submission of
documentat ion required for l -oan disbureement. In general t l t
appears the Borroier was not fu11y aware of the Bank proceduree
governing loan disbursements.
Late f inal isat lon of the project coet. The eonetructLon works
were substantially compleled in May 1985 and Èhe maintenance
period expired in Uay 1986 and yet the final paymerit to !h"contractor wa8 made as recent ly as January, 1989. AdmitËedlyt
ln lhis case there wa6 a serious dispute between the Governnent
and the contractor over this payment, culminating into a
threatened court act ion.
6.2.2 In engineering terms, the Borrower performed wel l- in eplte of hayfng
had to deal with ; relativel-y lnexperiànced contractor' The problem
aeeoclated with the premature strtpping Lf the surface dreseing Part of t!"
road pavement was noi ent i rely witÀin the competence of the Borrower' I t La
largely a result of experimentation in the use of different types of
construct lon mater lals.
6.2.g In nraklng changes and revLsions to the scoPe of the projectt the
Borrower dtd not consult Lhe Bank even though it is recognized thlt- tl"
Borrower paid dlrect ly for the bul"k of the coJt of major -revisione' I f the
Bank was notifled of these revisions and dld not consider them relevant to the
proJect it might have asked for winding up of the main contract works earlier
than it actuaLlY haPPened.
7. CONCLUSIONS AI'ID RECOMMENDATIONS
7.L Conclueione
7.1.1 The preparatlon of the proJect by the Borrower r"as done generally
well except tnaf the a'sunption i" ltte detalled engineering- deslgn that the
èxlstlng gravel pavement was suitable for use aB a road bed (formatlOn) proved
LnaccuraÈe. The nature of the deflciency in the deslgn ls euch that lt would
have been dlfflcult for the Bank to discover from the revj-ew of the dealgn
docrutents and the aPPraisal-.
l ,L.z The Lmplementat ion of ' the project vraE delayed pr lnclpal ly by the
delayed pâ,,nent of foreign currency pârt of the construction contract eurn and
the revlsion of the ""op" of the pràject. AccordLng to the rate of Progresg
of the conetruction works at Che bàgiining of the contract, it would have been
poeslble to impLement the project t i t t t i " t1"^ appraisal- schedule' therefore'
ih" "ppr"teal impLementat ion schedule wa' real- ist ic.
7. I .3 The loan balance of UA 1.281 mil l ion has been real lsed because the
Government l imited the loan withdrawal to i ts or iginal- value in local currency
and did not take into aecount the favourable curreny exchange flactuations
experienced during the project implemental ion period. The project cost
overrun was cau'ed pr incipàffy fy the two factors mentioned in para" 7 'L '2 '
b )
c )
1.L,4 The o-r"r-ài"bursement of Khs 0.84 mi l l ion by the Bank ln 1983 may
have reeulted from the confusion caused by mlxing the direct and the
reimbureement methods of loan disbursements. It is, however, concluded ttrat
on the whole i t does not represent over-diebursement on the loan sLnce the GOK
clalmed on1-y L5Z of the amourrt of several pa5rmenÈ certif icates whieh
const i tuted direct foreign currecney expenditure and did not c laim on theee
the lndlrect foreign expenditure. The noted irregular i ty ln the Loan
diebureement ls, however, noteworthy of the lessons Eo be learned from Èhe
pro jec t .
7. I .5 Ttre Lrregular i t ies which arose in the procurêment of conatruct lon
senrices and the deLay in the initial loan disbureement seem to have been
caueed by the misr:nderstanding or Lack of understandlag of the Bank procedures
governlni the procurement of goods and services, and the disbursement of loans.
1.1.6 At appralsal the project was e*pected to sÈlmulate the local economy'
to facllitate the adrninietration, living standards and movement wlthln the
south Nyanza Distr ict . the project wa6 also expected to help ln Èhe
evaegat lôn of pr incipal eroPs and other cash croPs as wel l as f lshing' To
Bome extenr mogt of these object ives have been met. The traff ic growth for
the perlod 1980-88 hae been about 2.51 aud actual ADT a8 a percentage of
apprilsal ADT has been about 802 - a decent and reaeonable figure'
7 .L .7 Oû the o ther handr the tour lsm (ho te ls , lodges , s i tes , e tc ' ) and
mlnlng (gold, coPPer, z inc and si lver) prospects proJected for the area dtd
not materlali"e -Jppr.ciably.
On the whole considering the world economl-c
sl t 'at lon of the pérfoa 19i10-87, i t can be Eaid that the proJect has fair ly
l lved up to expectat ion. I t has faci l l tated the administrat ive and general
movement within the distr ict .
T.L.B The road etandards are st i l l - appl icable and the constructed road Let
ln reaeonably good condition. The re-calculated economic rate of return is
34.5x. Thue, the project ie et i t l considered economical l -y viable.
7.L.g the inst l tut ional (Bank and Borrower) performance on this parÈicular
proJect wae fair according to the assessment made in chapter 6.0.
7.2 Reconunendatlons
7.2.L The iseue of the deLayed payment of forelgn currency to a domestLc
contractor and l ts conseçluences thereof, is a lesson whose reeults should be
examlned closely by the Bank. The Bank shouLd endeavour to Promote the
development of aomest ic civ i l works eontractors through a dlalogue wlth Èhe
Borrowere concernLng the accessibiLi ty of foreign currency, eepeeial- ly that
made avaLlable by donors, to the domest ic contractors so that they can
replace, augment ând maintaln their equipment fLeets easi ly, thereby maklng
thàm competitlve ln the bidding for Ehe Bank or donor and domestically ftrnded
proJec ts .
7.2.2 Variat ions of contracts involving increase in the or iginal ÊcoPe of
work delay project complet ion and, the Bank should discourage their exect l tLon
under p"oj .àt" in cases where i t eonsiders them not of direct benef i t to the
ob jec t ives o f Pro jec ts .
7.2,3 Misunt lerstanding or lack of understanding of the procurement and
disbursenlent procedures of t.he Bank by the borrower may not be confined to
thie project and meriLs review on a wir le country coverage so that a <lecleion
2L
can be taken on how beet to tackle tt tf lt le establlshed Èhat lt le I'ndeed,
a cormon problem. 0f course, lf proJect supervision and follow-up are
lntenelfled, Èhey may go a long way towarde aolving a problem of thLs naËure.
7.2.4 It ie recomnended that the Bank should a6 a normal procedure fleld
proJect laqnchlng nieslone comprlelng projectr. loan and dlsbureement offlcere
In order to eneure an effectlve etart-up of approved proJecte. the8e ml.eeione
ehould take place withln three to elx monthe of the date of loan eignature.
A1so, the ptlbl.* proJecterlike thle one, deeerve regular fLeld eupenrlelon
misslone. ltr thta regàrd and recognizing the actions taken by the Bank eo far
Èo lnprove ite project lmplementation monitoring and supervieio, lt ls
recomènded Èo Lncrease human regources for thle operational actl'vLty.
7,2.5 The Borrower took too long to settle flnal Payments and incurredgnrecesaary coml.tment charges on the undisbureed balance of the loan. Since
thls issue |s not peculiar to thls project but affects oEhers ln the traneporL
aector, the Bank should take lt up with the Government of Kenya- the
Governnent ehould be requeeted to eubmlt a propoeal to utilize the loan
balance or to cancel i t .
7.2.6 The separation of taxea and and duties from the actual coet hae had
to be eetlmated because the contract unit rates were inclusive of thls elemenÈ
of the f lnancial cost of the project. The pract ice of al l inclueive contract
rates for infrastructure projects ls conmoû and the Bank ie not in a poel'tlon
to know precisely the exact cost of tæ(e6, duttes, fees and other government
inposttio;s. It ls recormended that the Bank rules of procedure lotptà"orement of goods and servicee should include rmder the guidelinea f or
preparatlon of btddtng documents, a requirement for the Borrowers to eeparate
ln ttre tender docgnents, the taxes, duties, feesr levies and other feee coeÈ
element ao that it can be prlced on its ortn. The provislon of the tanea
element of the cost can be made through provlslonal or prime cost 6uma agal'nst
whlch cost relmbursement or pro rata payments can be made. the adoptLon of
thta recomrendation would improve the accuracy of the net of taxee coet
estlmate ûtd facllitate loan disbursement proceeslng, and the preparatlon of
proJect completlon and audlt teports.
ANNEX 1
KENYAPROJECT COMPLETION REPORT FOR HOMA BAY-GONGO ROAD
Project LocaÊion Map
NGGE NGOR€
' T h i s o a p h a s b c e n
, - c o n v e n i e n c e o t t h ep r e p a r e d
r e a d e : sbyo r
Èhe ADB Group.s Staf ! erËlusively fcr theE h e r e n o r r l o o h i a ! . ; - : - - ! - - - L - r . .
Anne:< 2
KENTA
PROJECT COIPLETION REPORT FOR f,(xtlA BAT-ROIVCO ROAI)
Actual and Expected Project Inplernentation Schedulee
AcÈlvlty Appraieal Target Date Actual Date
fssue of Tender Documents mid Octoberrl980 mid Octoberr1980
Return of lendere mld Novemberrl980 mld Novemberrl9So
Evaluatlon of Tenderg end Decemberrl98O end Novemberrl980
Approval of Evaluatlon end Januaryrl98l mid Januaryr198l
Award of contract
Mobllleatlon mid May,198t mid marchrl98l
Conet,ructlon Complete mid Novemberrl9S2 mid Mayr1985
End of llalntenanee Perlod mld Novemberrl983 mld !tayr1986
SOURCE: Project Appraisal Report , August, 1980
and MOPI' I and ADB Mission, Apri l , 1989.
nld February,l981 mld Februâryrlg8l
KENYA
PROJECT COI{PLETIOI{ REPORT FOR }IOI{A EAY.ROI{GO ROAD
Details of the Actual and Appraisal Estinates of Prolect Costs
ANNEX 3
Actual as proportion gf:appraisal Contract
Conrponent
Constructlon
Supervi sl on
TOTAT
Act r r : l Coc t Contract Ânnre{cr l Cac}
F.E. L.C. Total amount LE,
62.363 25.632 87 .995 54. r07 .18.669 20.004 68.673 1282 r63U
4.014 r .339 5.3s3 1.9s7
66.377 26.97r 93.348 56.063
2.î24 0.67s 2.699
50.693 20.679 71.372
t98Z
r3rz
t3 lz
274t
r67/.
t67tlaxes 0 r0 .27 r r0 .27 r 6 .169 0 7.854 7.8s4
SOURCE: ProJect Appralsal Report, August, 1980, lOPl, and ADB Hisslon, Aprll, 1989.
Annex 4Page I .:f
P R o J E C T c o M P L E T I o N R E P 0 R T F o R H O H A B A Y - R o N G o R o A P R 0 J E C T
l'lonbh Year
( K s h s n r l l r o
Pr,r.i,=cr, D i sbur getûer.t:Fi
Hr- ,nbhly CunulaBrveAnounb Amot-rnb
Loarr D i sl:rur'serrettl;s
MonthlY Cumulat iveAnount Amount
n i I I t o t r
FebruarY l98lt' larch 196lApri I l 'gElMay 1981Junc l'981July tg8lAr.€pcc t98tgeptenber 196lOcbobcr l9E1Novgnbcr l96lDecenber l'9ô1
Sub ToEal 19Et
Janrrary 1942FcbruarY lg8zl'larch 1982April 1962l'lay 1982June 1982July 1982Àr"rgucb $42Ecptcober 1982Octobcr læ2Novcobcr 1982D,ecenber 1962
8ub Tobal 1982
JanrrarY 1963FebruarY l'963l'larch 1983Apri l 19E3llay 1983Jrrne 1983July 1983Augusù 1983Eepteuber 1983Ocbober 1983Novenber 1983Deceml.rr 1983
Sub Tobal l9 i3
22.297 22.297
2 . t 3 22 . 1 3 00 . 8 6 20 . 0 0 00 . 0 0 02 .5362.5892 .9033 . 1 9 10 . I 4 35 . 8 r 0
5 .3680 . 3 0 23.9243 . 0 0 2l . E r l3 . 4 0 23.3340 . r 5 53.76 ' l2 . 5 1 90 . r 6 32 . 3 1 5
0 . 1 2 92 . 0 1 70 . 7 2 70 . 1 ? 22 . 0 7 2I . 1 9 62 . 2 ? 00 . 0 8 51 . 8 1 72.9540 . 1 0 0l . t 6 l
2.1324 . 2 6 r3 . 1 2 35 . 1 2 35 . 1 2 3? . 6 6 0
10.2491 3 . 1 5 316.3441 6 . 4 8 722.297
2?.66527.9673 t . 8 9 13 4 . 8 9 33 6 . 7 0 44 0 . 1 0 643.44043.59447 .36149. E?950 .04252.357
52.48654.56355.2895 5 . 4 6 15 ? . 5 3 358.1296 0 . 9 9 96 1 . 0 8 46 2 . 9 0 I6 5 . 8 5 56 s . 9 5 56 ? . 1 1 6
0 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 .0 .000 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 0
0 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 0
0 , 0 0 00 . 0 0 0
1 8 . 4 0 6
0 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 0
r 2. 5830 . 0 0 00 . 0 0 00 . 0 0 05 .3600 . 0 0 00 .465
0 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 0
12 .58312.583r2 .563r2 .58317.9431? .94318 .408
18 .408
%. l l ;6125.40723.72926.02326.6343 0 . 1 2 33 0 . 4 1 73 0 . 9 0 640 .6394 1 . 0 9 941.33441.526
30 .050 52.357
6 .9990 . 0 0 00 .3220 .2940 . 6 1 13.4890 .2940 .4899 . 9 3 30 .2600 . 2 3 50 . 1 9 2
L4 .7 ' t 9 6 ? . 1 1 6 2 3 . l L 8 4 I . 5 2 6
MonÈh Year
jurruary l9i3+Fekrruary l9E4l'larch l9E4Apri l 19E4May 1984June l9E4July lgl84Augusb 1984Ecpbcnber l9E4Ocbobcr 1964Novcmbcr 1984Deccobcr l9E4
8ub ToÈal 1964
JanuaryFabrusryMarchApri Il'layJwrcJu lyAuguat
Ju lyAuolucb
1965tgEst9E5t9E5t9E519851985l965
0 . 0 5 23.6560 . 0 0 00 . 1 0 90 . 0 3 63.3230 . 4 5 40 . 0 1 5
0 .4060 . 0 0 4
84.58888.44488.44466.55388.5899 r . 9 1 292.3669 2 . 3 8 1
0 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 00 . 0 0 0
4r .6894r .6E942. t?942.17942.t+8442.48,442 .90942.90943.31443.31443.314
43 .31443.31443 .31443.3r443 .3144 3 . 3 1 443 .3 t443 .314
Annex 4Page 2 oî 2
Cumulat iveArasunt
MorrthlyAeesn!
1 . ' ; : ; a1 . 7 2 92. r240 . 0 9 21 .885L . C B 70 . 0 7 54 .2062 . 0 6 30 . 0 7 7t .74 . t0 . 0 6 0
t 'tonthly
4g"""!
0 . 1 6 30 . 0 0 00 .4900 . 0 0 00 . 3 0 50 . 0 0 00 . 4 2 5q . 0 0 0d.+os0 . 0 0 00 . 0 0 0
Cr:mr-rlabive'Anounb
gF;.'a40
70 .575? 2 . 7 0 072.79174.676"t6.314
7 6 . 3 8 980 .59662.659a2.73684.4?664.536
L? .420 84.536 1 . ? 6 8 43.314
8ub Tobal lg8s ?.845 92 .381 0 . 0 0 0 43.314
tgaB1986
9 2 . 7 8 692.190
r 0 3 . 5 1 91 0 3 . 6 1 9
0 . 0 0 00 . 0 0 0
4 3 . 3 1 44 3 . 3 1 4
4 3 . 3 1 448.455
8ub Total, l,g8o
Januery tg8?
Sub Togul 198?
l'lay t98E
9ub Tobal t98E
Janrrary 1989Fcbruary 1989
8ub Tobal 1989
TOTAL
0 . 4 1 0 92.790
0 . 0 6 4 92 .855
0 . 0 6 4
1 0 . 7 6 5
92.855
r 0 3 . 6 1 9
r 0 . 7 6 5 t 0 3 . 6 1 9
0 . 0 0 0 4 3 . 3 1 4
0 . 0 0 0 43 .314
0 . 0 0 0 43.314
0 . 0 0 0 4 3 . 3 1 4
0 . 0 0 0 43.314
0 . 0 0 00 . 0 0 0
0 . 0 0 05 . 1 4 1
0 . 0 0 0 t 0 3 . 6 1 9
I 0 3 . 6 1 9 1 0 3 . 6 1 9
5 . 1 4 1 48.455
46.455
SOURCE: MOPI I and FDIS , Ap r i l , 1989 .
4E.455
Annex 5
KENTA
PROJECT COMPLETION REPOR1 FOR IIOMA BAY-RONGO ROAD
Traff ie Growth 1976-1988
Vehicl-e Tvoe
Year
L976
t977
L978
L979
1980
1981
L982
1983
1984
198s
1986
L987
1988
I 989
Cars
56
4L
23
33
62
45
28
30
39
46
54
6 7
80
LGV
143
176
232
250
3s429L
229
249
272
296
3r.8355
392
MGV
48
35
25
3 7
49
39
36
54
5 2
58
64
6 L
5 9
TIG\T Bueeg
29
23
20
32
4L
32
28
15
23
20
T 7
T 7
L 7
Total
277
276
238
353
506
409
324
349
39L
425
457
506
556
1
I
2
1
0
2
3
1
5
5
4
6
I
SOTIRCE:
LG\' !MGV 3HGV 3Buees i
MOPI' I , Apri l 1989.
L igh t Goods Veh ic les , e .g . P lckup,Med ium Goods Veh lc les , ê .g . up toHeavy Goods Vehicles t ê.8. +9 tons+5-Passenger
Landrovers9 tons
Annex 6
KENYA
PNOJECT CO}IPIETION RÉPORT TOR HOMA BAT-ROI{GO ROAI)
South Nyanza Dietr ict: Produetion Statiet ics - Various Conmodlt ies ( lons)
Crogs 1981
VlaLxe L78076
Rlce 77L
Sorghurn 2L429
Flngerrnlllet 4654
Beans 13L49
Green grams N/A
Cageava 361700
Irlsh potatoes 180
Sweet potatoes 139136
Bananae 29358
Sugarcane 303887
Kales+carbages N/A
Tomatoeg N/A
gnlone 4113
Cotton 3985
Tobacco 2595
Groundnuts 898
L982
249874
2055
31170
5 785
11 131
N/A
II7852
3L2
L69362
N/A
26L784
N/A
N/A
N/A
2325
2672
1 1 3 9
L983
2I+47L0
24LA
45150
4462
L2746
N/A
7L69s
N/A
64204
N/A
278484
20800
N/A
N/A
L727
2785
15 104
1984
t48204
4L4
375L3
L2t+0
8835
1015
83170
4290
75656
L6436
344391
6544
5982
111_6
899
4660
4296
.1985
144085
2922
44080
1_815
8189
6 3 3
68745
780
55769
3 1 1 3 5
163941
5784
2990
864
1800
3276
3104
1986
189050
740
25936
2746
10839
L594
37775
520
59955
37336
250877
7079
3588
r.1232736
3248
2260
L987
159300
285
32960
2793
11880
334
11880
400
57280
47310
297L47
13340
4860
2376
L226
N/A
N/A
SOURCE: PDA' NYanzaDAO's D is t r ie t RePor tsKSA
NA = Not avallable
Year Cars IGU UW HGU Buses
Annex 7
Page I of I
INOUCED TRAFFIC (Generatd and Diverted
Cars tGU IGU ECU Buses Total
KETIYA
PROJECT COHPLETION REPORT TOR HOIIA BAY-NONGO ROAD
Actual and Prolected Traffic
ilONHAt ÎRÂFFTC
1983 30 249
1984 39 212
l98s 46 296
t986 54 3r8
1987 6'' 355
f988 80 392'
1989 82 400
1990 84 408
r99r 86 416
1992 88 424
1993 91 432
1994 93 441
1995 95 450
1996 97 454
1997 r00 468
1998 f02 479
1999 105 487
2000 r08 497
2001 I r0 507
2002 il3 517
2003 n6 527
54
52
58
64
6 l
59
6 l
63
64
66
68
70
73
75
77
79
82
84
87
89
92
I
5
5
4
6
I
I
I
9
9
9
r0
l 0
l 0
l 0
l l
l l
t l
t 2
1 2
l 2
l4
23
20
t 7
t 7
l 7
t 7
l8
l8
r 8
t9
l 9
20
20
20
20
2 l
?2
22
zz23
Total
349
391
425
457
506
556
568
58r
593
60s
6r9
633
648
661
675
692
706
722
738
753
770
I
I
9
9
9
9
t 0
t0
l0
l 0
il
l l
t l
nt 2
40
4 l
42
42
43
44
45
46
47
48
49
50
5 l
52
53
6
6
7
7
7
7
7
I
I
I
I
I
9
9
9
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
57
58
60
6 l
62
63
65
67
68
69
7 l
7Z
74
75
77
SOURCE: i f0Pl l , Miss ion Est imates, Apr i l 1989.
I Truck HGV induced
Annex IPage L of.
KENTAPROJECT CflTIPLETION REPORÎ FOR HOIIA BAY-RONGO ROÆ)
Recalculatlon of ERR.
A. Econonic VOC (K.Shs/km - 1988 prlces - Normal Trafftc)
Bcieting RoadLength = 32 kn
Proposed RoadLength - 32 kn
VehlcleGlaee
Care
LCV
uct,
Buses
Roughnees=7800 nn/km Roughness=l508 nnr/km S A VVOC Rates VOC x 32 VOC Rates VOC x 32 Per Vehlcle
2.81 89 .92 I .30 41 .60 49.32
Proposed RoadRoughness=l5O8 mr/km
voc vocK.Shs/km x 32 km
I N G SPer lear
t7,636
45,435
321704
68 '09t1
32,273
T N G SPer yearK.Shs
8 , 7 9 6
22,7L7
16,352
34.�O47
L7,637
ltairt
6 . 0 5
6 . 2 6
L5.77
6 . 9 1
193.60
200.32
504.64
2 2 L . L 2
2 . 1 6
3 .46 .
9 .94
3 . 8 9
69 .L2
rlo.72
3r8.08
124.48
20.80
34.56
5 5 . 3 6
1 5 9 . 0 4
62.24
L24.48
8 9 . 6 0
1 8 6 . 5 6
96 .64
B. VOC Savlnqe - Induced lrafflc
Existing RoadRoughness=7g00 mn/kmVOC Rates VOCK.Shs/km VOC x 32 km
VehlcleClaee
Care
LCV
T{GV
HGV
Bueee
1 . 4 0
3 . 2 5
3 . 1 3
7 . 8 8
3 . 4 5
44.90
96 .80
100. r_6
252.32
1 1 0 . 5 6
0 . 6 5
r .08
L . 7 3
h . 9 7
1 . 9 4
S Aper
Journey
24.L0
62.24
4 4 . 8 0
9 3 . 2 8
4 8 . 3 2
NOTE: Savings
SOURCE: MOPlt,
assurned as 50% of those attr ibuted
Apr i l , L989, Mies ion Es t lmates
to Normal Traffic
Annex I
Page 2 af
KENYA
RecalculaÈion of ERR
e. lotal voc savlngs (K.shs '000)
C.1 Nornal Trafflc
Y,ear
198319841985198619871988198919901991t992L993L99419951996L99l199819992000200120022003
Cars
529688811952
1 r 1 8 21r411 ,L14461 ,4811 , 5 1 71 , 5 5 2L ,6051 ,640L16751 , 7 1 1L , 7 6 4L , 7 g gI , 8 5 2l. ,9051 , 9 4 01 r 9 9 321046
tctt
1 1 , 3 1 312 ,358L3,449L4,448L6 rL291 7 , 8 L O18 ,1 7418 ,53718,900Lg,264L9,62820,03620,44620 16272L12632l,76322,L2922,58L23,03523 ,48923,808
l{Gv
L , 7 6 61 ,7001 ,8992r0931 , 9 9 51 ,9301 r 9 9 52,0602,O932 ,1582,221+2128921387214532r5L8215842,68221747218452rgl-L3,008
re[
68340340272408544544544613613613681681681681749749749817817817
Busee
52981170560060060060063563563567067070570570574L74L776776776811
Total
14,20015,90016,40019,40020,30022r3OO22,8O923,30043,8002F,2OO24,70O25,30025,90026,2O026,90027 160028,10028,80029,4OO30,00030,500
RENTA
Recalculation of ERR
C.2 VgC Savlnss: Induced Trafflc
Annex 8
Page 3 of
EGV Busee TotalIeÊE
L98919901991L9921993L994L995L996L9971998L9e92000200120022003
70707979797988888888979 79797
106
90993t954954977
1,000LrO22I n045I , 0 6 8I ,0901 r 1 1 31 , 1 3 61 , 1 5 9I , L 8 1t ,204
Care IÆV MGV
989898
155155155155131131131131131L47L47L47
343434343434343434343434343434
35353535353s353535353535353535
1 ,1461 ,168rrza0L,2L71,240L,263L 12941 , 3 3 31 i 3 5 61 r 3 7 81r4101 ,433L , 4 7 2L ,494L1526
KENÏA
PROJECÎ COMPLEÎIOII REPORT FOR f,C[tIA BAY-R()IICO ROAI,
Recalculatloa of ERR
D. Avoided Maintenance Coste
Exletlng RoadLength = 32 lun
llalntenance CostsRoutLne PerLodic lotal
Propoeed RoadLength - 32 km
MaLntenance CoetgRoutine Periodic lotal
Annex I
Page 4 of
Avolded MaintenanceSavlnge (K.Sher
22.2
22.2
4739.O
2 2 . 2
22.2
(3633 .8 )
22.2
22.2
4739
2 2 . 2
( 3 6 3 3 . 8 )
22.2
22.2
4739
22.2
22.2
( 3633 .8 )
22.2
22.2
4739
maintenance cost ofKÊ 7506/km. I.rtth
KSlrs 6O r99Olyr andp e r i o d .
1983 83.2
1984 83 .2
1985 83 .2
1986 83 .2
t987 83.2
1988 83.2
1989 83 .2
1990 83.2
1 9 9 1 8 3 . 2
L992 83.2
L994 83.2
1995 83.2
1996 83 .2
t997 83.2
1 9 9 8 8 3 . 2
L999 83.2
2000 83.2
2001 83.2
2002 83.2
2003
8 3 . 2
83.2
4800 4800
83.2
83 .2
83.2
83.2
83 .2
4800 4800
83.2
83.2
83 .2
8 3 . 2
4800 4800
83.2
83.2
83.2
8 3 . 2
83 .2
4800 4800
61
6 1
6 L
6 t
6 L
6 1
6 1
6 1
6 1
61
61
61
6 1
6 L
6 1
6 1
61
61
61
37L7
37L7
37L7
61
61
6 L
6 1
6 1
37L7
61
6 1
6L
6 1
37L7
6 1
6 1
6 l
6 1
6 1
3717
6 1
6 1
6 1
l, l ithout project type IV gravel assraed routineKf 130/km and periodic mainÈenance cosÈ of
the project, MOPW rout ine maintenance cost ofper lod ic ma in tenance cos t o f K .Sh 3 .7 mi l l ion per
NOTES:
_ tai
Annex I
Page 5 of I
KENYA
PB[J.ËeLqofl p!I-IJ_0ltl_E rgB r r 0 R HoHA _QAy=ggNGo_ R oApR.c_cale!-lafistr_sf ERR
E. Time Savinqs
Ex l s t i ng RoadLength = 32 km
Vehi c le Speed JourneyClass km/hr Time (minute-s_)
Proposed RoadLenEth - 32 km
Speed Journeykm/hr ]-ime_lminules)
TimeSavi ngs
( mi nutes )
28
27
24
64
37
T imeCos tRates
Kjhlhr
84
l l
I
7
50
HCv
0 . 3 4
Cars
LGV
HGV
HGV
Buses
4A
40
40
20
30
48
Æ
48
96
64
r00
90
80
60
70
z0
2 l
24
32
2,7
S A V I N G SPer PerJournev Year
39 14"235
5 | ,825
3 I ,095
7 . 5 2 , 7 3 7
3 l I I , 3 1 5
BUSES
2 , 5 2
1 r MF._5AV LNES__çUBBEN M_I x_ rJSEltt KENYA
VEHICLE CLASS
Rate: Kllhr
CARS
4 . r 9
Lfl
0 . 5 7
ucv
0 . 4 0
SOURCE: M0Pl . | , Apr i l 1989, Miss ion Est imates
&nex-g
Page 6 of I
KENYA
PROJECT COJPLETION REPORT FOR HOI.IA BAY-RONGO ROAD
Reca lcu lA t i on o f ERR
F. T ine Sav ings (K .Shs ' 000 )
NORi.IAL TRÀFFIC
Year Cars tGll IGY HGV
INDUCED TRAFFIC
Cars LGy Ug HçC[. Buses Total
t989 I 173 730
1990 1202 745
l99l 1230 7759
1992 t259 774
1993 1302 788
1994 r33r 80s
1995 1359 821
t996 1388 838
1997 l43r 8s4
1998 1459 874
t999 1502 889
2000 1545 907
200r 1574 925
2002 1617 944
2003 1660 962
67
69
70
7Z
74
77
80
82
84
87
90
92
95
9 7 '
r 0 l
?2
22
24
24
?4
?7
27
27
27
30
30
30
33
33
33
Buses
192
204
204
204
? 1 5
215
226
226
226
238
238
249
249
?49
260
ïotal
2184
224?
2287
??33
?40?
2455
2 5 r 3
255r
26?2
2688
2749
2823
2876
2940
3 0 1 6
| | lût!
l l i l o
i l l l 8
I t l l 9
I t 1 2 0
il l2r
l l r29
I I 130
l l t 3 t
l l I 3 2
l l 1 4 0
l l l 4 l
l l 142
il 143
I t l 5 r
57
57
64
64
64
64
7 l
7 l
7 l
7 l
78
78
78
78
85
36
37
38
38
39
40
4 l
42
43
44
45
46
46
47
48
3
3
3
4
4
4
4
4
4
4
4
4
5
5
5
2
z2
2
2
2
2
2
2
2
2
2
2
z2
Annex 8
Page 7 of 8
KEITYA
PROJECÏ C$PIETI(N REPORT FOR }IO$IA BAY-ROIIGO ROAD
Recalculat ion of ERR
G. Sunrery of Eenefits (KShs'0001
Year
r983
r984
r985
r986
t987
r988
t989
1990
r99l
1992
t993
t994
r995
r996
r 997
r998
r999
2000
2001
2002
2003
llormalTraffi c
14200
r5900
r6400
r8400
20300
22300
22800
23300
23800
24200
24700
2s300
2s900
?6?.00
26900
27600
28r00
28800
29400
30000
30s00
IrtducedTraf f i c
r 146
r r68
1200
12'�a7
1240
r263
r294
| 333
| 356
| 378
t 4 l 0
r433
1472
1494
t5?6
zr84
2242
2287
2333
2402
2455
25r3
2551
2622
2688
2749
2823
2876
2940
30r6
Totel
r422?,
r59?,2
24r39
rc422
24322
r8666
2626r
268/,2
32r44
27891
28Æ4
32773
298s8
30236
3r031
36537
3242r
33?19
30256
34456
3978r
Roedflal ntenanceSavi ngs
2 2 . 0
22.0
4739
.^lÀ-,t
,"tVt zz.o( 3634.0 )
2 2 , 0
22.0
4739
22.0
22.0
( 3634.0 )
22.0
22.0
22.0
4139
22.0
2 2 . 0
( 3634. 0 )
22.0
4739
Tine Savinos
ll,ornal Induced
r09
i l0
i l8
il9
r20
l2 r
129
r30
r3 l
t32
140
r 4 l
142
t43
r5r
Aoner I
Page I of
KEXTTTA
PROJEET C(ilIPLEIIOIT REPORT FOR f,TT.IA BAT-RO{GO ROAI'
(K.Shg '�000 - 1988 Conetant Prlces)
E. Recalculatlon of ERR
Cc,st"l/ Beoeftrs2/ l{et BeneflÈeïear
1981
L982
1983
1984
1985
1986
t987
1988
1989
1990
1991
L992
L993
L994
1995
1996
L997
1998
L999
2000
2001
2002
2003
14,890
1g ,876
9 , 5 1 9
11 ,048
5,o2t1
310
53g ,698
14,222
L5 1922
24,L39
I8,422
20,322
18 ,666
26 r26L
26,842
32rL44
27,89t
28,484
32,773
29 ,858
30,236
31 ,031
36,537
32,42r
33,2L9
30 ,256
34 ,456
39,78L
(14,890)
( 19 ,876 )
94,7O3
41874
1 9 , 1 1 5
18 ,112
20,269
8 ,968
26 ,551
26 ,551
32,144
27,89L
28,484
32,773
29,858
30r236
31 ,031
36,537
32,42L
33,2L9
30,256
34,456
57 ,386(L7,605)31
ERR = 34.52
Total capital costs, supervLsion costs
Total benefits of VOC, iime Savlng a'd Avoided Malntenance
Reeidual value taken as 257" of construcÈion cost-
1 .2 .3 .
NOTES!