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The World Bank

FOR omCLL USE ONLY

Rqm N.. 12565

PrOJECT oI3 OR!

NALAYSIA

SABM AND SAtAWAK ROAD PROJECT(LOAN 2291-NA)

NOVEIDER 30, 1993

Tnfrastructure Operations DivisionCountry Department IEast Asia and Pacific Region

This docmet has a resuicted distribution and may be used by recipiens ony in the ofter official due. Its co may not odierwise be disclosed witout World Bak autorI

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4.

CURRENCY EOUIVALENTS

Currency Unit - Ringgit (M$) (MR)

US$1.00 - M$2.30 (1983)- M$2.48 (1985)- M$2.58 (1986)- M$2.52 (1987)- M$2.62 (1988)- M$2.71 (1989)- M$2.70 C1990)- M$2.75 (1991)- M$2.55 (1992)- M$2.50 (1993)

FIS-CAL YEAR

January 1 - December 31

KEASURES AND EQUIVALENTS

1 foot (ft) - 0.3048 meters (m)1 mile (mi). - 1.6094 kilometers (km)1 square mile (sq mi) - 2.59 square kilometers (sq km)2.204 lbs - I metric ton (m ton)

ABBREVIATIONS AND ACRONYMS

AMDT - Average Annual Daily TrafficADT - Average Daily TrafficEPU - Federal Economic Planning UnitERR - Economic Internal Rate of ReturnGDP - Gross Domestic ProductGOM - Government of MalaysiaICB - International Competitive BiddingJKR - Jabatan Kerja Raya (PWD)LCB - Local Competitive BiddingMOT Ministry of TransportHRCU - Mechanized Road Construction UnitPPAR- Project Performance Audit ReportPCR - Project Completion ReportPM - Peninsular MalaysiaPWD - Federal Public Works DepartmentRMMS - Road Maintenance Management SystemSAR - Staff Appraisal ReportSDO - State Development OfficeSEPU - State Economic Planning UnitSEWD - State Public Works DepartmentVOC - Vehicle Operating CostVPD - Vehicles Per Day

FOR OFFICIAL USE ONLYTHE WORLD BANK

Wahingto D.G 20433USA

Off S of Director-Gene?alOperatlau Evaluagot

November 30, 1993

MEMORANDUM TO THE EXECuTIEv DIRECTORS AMD TEE PRESIDET

SUBJECT: Project Completion Report on MalaysiaSabah and Sarawak Road Prolect (Loan 2291-MAM

Attached is the "Project CoWpletion Report on Malaysia -- Sabah andSarawak Road ProJect (Loan 2291-M&)" prepared by the East Asia and PacIficRegional Office. Part II contains comments from one of the Borroer's agencies.

The Loan (US$86 .2 million of May 1983) had an institutional developmentrationale along with its infrastructure development goals: effectivecollaboration among the Federal Economic Planning Unit, the State EconomicPlanning Units in Sabah and Saravk, the Federal Public Works Department and theSabah and Sarawak Public Works Departments would lead to smoother relationsbetween the two States and the Federal Governmet; regular contacts among Stateand Federal technical agencies vould foster closer collaboration between Sabahand Sarawsk for undertakings of major Importance, such &a the construction ofthe Pan-Borneo lighway. Project components reflected these objectivea byincluding road inprvmen staff trainsing, strengtning of road mintenance,assistance for a coordinated Road Transport Revlew, and assistance for a NationalPorts Study.

All project components vere completed. Some US$16 million verecanceled. Project objectives were largely met and the economic rate of returnis 35.2Z, up from 15S estimated at appraisal. Nevertheless, there vere probleswith execution of civil works, leading to a 3-year delay in project completion,and the Borrower did not take the vigorous action recommended by the Bank.Overloaded trucks seriously damaged road surfaces recently built or maintainedand, despite continuous admonitions by the Bank, there is little evidence thataxle load regulatios are being enforced.

On the whole, the project outcome is rated as satisfactory, itssustalnability as likely, and its institutional impact as substantial.

The PCR Is comprehensive. The project may be audited along with theSecond Sabah Ports Projact and the Port Kelang Project.

T his dmumenthua rsuicteddistnbution and ma be usedby redpietti ai in the perfannencorthw fficial idudm Is contents may not athrwno be dbsed rwitbut WorldBank audztoin.

FOR OmCIAL USE ONLY

SABAH ADSARAWAK ROAD PROJECT (LOAN 2291-MA)

Table of Contents

ha No.

Preface ............................................................

Evaluation Summary .................. Li

PART I. PRWJECT REVIEV FROK THE BANK' S PERSPECTIVE

1. Summary ProJect Data 12. Background and Sectoral Setting. 13. Bank Involvement in the Sector. 24. Follow-on Initiatives. 35. The Project. 46. Project Inplementation .67. Project Results and Lessons Learned .17S. Sustainability/Remaining Issues .219. Bank Perfo-mance -. 22

10. Borrower Performane .2211. Project Relationships ................................. 2212. Project Documentation and Data ........................ 23

PART II. PROJECT REVIEW FROK THE BORROWER'S PERSPECTIVE 24

PART III. STAIISTICAL INFORMATION: TABILS

Table 1: Related Bank Lons ................................. 26Table 2: Use of Bank Resources .............................. 28Table 3: Status of Legal Covenants .......................... 30Table 4: Cumulative Estimated and Actual Disbursements ...... 31Table 5: Financing Plan - Appraisal vs. Actual .... .......... 32Table 6: Project Costs - Appraisal vs. Actual .... ........... 33Table 7: Detailed Project Costs for Sabah Component ......... 34Table 8: Project IWplementation Schedule - Sabah Component 35Table 9: Project Implementation Schedule - Sarawak Component 36Table 10: Studies and Trainirg ............................... 37Table 11: Highway Capital and Maintenance Expenditures ....... 39Table 12: Diesel and Gasoline Prices (1975-1992) .... ......... 40Table 13: Actual Traffic Volumes ............................. 41Table 14: Vehicle Operating Cost Savings ..................... 42

I This dacumt bk a *ese disuibuton nd may be ued by uents onl in tlb peffrsmaor dsek ilil dudes s wotents may not oterwise be ioed without Wold ank aut*odtin

WALYSIA

SABAR AUD SARAWAK ROAD PROJECT

(LOAN 2291-NA)

PROJECT COMPLETION REPORT

Preface

This Project Completion Report (PCR) sumarizes the implementationof the Sabah and Sarawak Road Project, for which Loan 2291-MA In the amount ofUS$86.22 million was cpproved on May 26. 1983. US$15 zillion was conceled onJanuary 24, 1987 and a further caneel tion of US$734.594.82 occurred at the timnof loan account closing. A total of US$70,485,405.18 was disbursed under theloan, with the last disbursement being made on October 28. 1992. Th. LoanClosing Date, originally June 30, 1989. was extended three times (one year eachtine) with the final closing on June 30, 1992.

The PCR was jointly prepared by the Tnfrastructure OperationsDivision of the East Asia and Pacific Region (EAlIN) and the Borrower and isbased, inter alia. on the Staff Appraisal Report (SAR). the Loan Agreement,supervision reports. the Borrower' a own records. correspondence between the Bankand the Borrower, and internal Bank memoranda.

Part II contains cOmments from the State of Sabah.

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IAA AND SAAAM OA PROJECT (LOAN 2291-KA)

Obiectives

The Project was formlated to further the Governomnt of Malaysia's(GOM) developmental objectives and the Bank's lending strategy for Malaysia. Themain objective of the Project was to improve rural trunk roads and agriculturalaccess roads in order to support agricultural and agro-industrxal activities inthe rural areas of Sabah. Through an overall plaming study for both states, itvas also expected to assist the future development of both Sabahb's and Sarawak' stransport networks so that both states could base their transport systemdevelopment on more definite plans for agricultural, forestry and industrialgrowth. The Project also aimed to help ilmrove the road anintenance capabilitiesand training efforts in both states and, by means of a comprehonsive study,provide a basis for future port investments throughout Malaysia.

fmplementation experience vas mixed. MIere were a nm=ber of problemsassociated with the civil works components due mainly to the inexperience andlack of financial resources of some of the contractors. Although implementationof the consultancy services were somewhat delayed, they vent smoothly onceunderway.

Results

All of the components vere eventually satisfactori: y implemented. Theproject vas extended three times (one year each time) because of the delays thathad occurred. Substantial cost overruns were experienced in most of the roadconstruction contracts.

7he main issues concerning sustainabilLty of the project relate tothe government's ability to (a) enforce truck loading limits to minimize roaddamage; and (b) adequately staff the training centers and maintenanceorganizations with appropriate personnel. Several successful measures havealready been taken regarding these two issues.

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Findings anid Less-ons iLearned

The main findings and lessons learned from the Sabah and Sarawak RoadProject include the following:

(a) In prequalifying contractors more care should have been exercised toensure that they had the requisite experience and capability end,just as importantly, the financial resources to properly carry outthe work. Contracts should not be routinely awarded to arginallyacceptable firms which have submitted unreasonably low bids, as inthis case. At a -inimum, if contractors with less than desirablefinancial, resources were, for whatever reason, to be awardedconcracts, then the performance bond required should have beenincreased to a level where thair default, while undesirable, wouldnot create insurmountable difficulties. -Where properly qualifiedcontractors also submitted unreasonably low bids, more care shouldhave been taken to ensure that satisfactory remedies were availablein the event of later difficulties.

(b) When it developed that certain contractors, due to shortage offunds, lack of qualified personnel or general incompetence, couldnot properly complete the work within a reasonable tim frame, theGovernment should have canceled their contracts for cause, as theBank had strongly recommended, without undue delay and used anothercontractor to complete the work rather than entering into a long,drawn-out process of assistance to the contractor which. in anyevent, did not have a satisfactory outcome and contributed to longdelays in completion of the work and substantial increases in costs.

(c) It has become abundantly clear, with Sabah and Sarawak as cases in.point, that unless some reasonable control can be exercised overexcessive axle loads, the rapid deterioration of road infr&structurecannot be avoided. The heavily overloaded trucks carrying timberand other products in both States continue to damage road pavementstructures. Until the Government begins to make more seriousefforts to limit these axle loadings, all road users will continueto encounter increased costs and inconvenience. Whiles previousefforts in this direction were undertaken without success under theThlrd Highway Project (Loan 1376-MA), the problem is now being-viewed by the Government with more concern. Further efforts tocontrol overloaded trucks throughout Malaysia, including Sabah andSarawak, are being mounted under the Bank-financed HighwayRebabilitation and Improvement Project (Loan 3145-MA), now beingimplemeted.

(d) The major training efforts mounted under this project in both Sabahand Sarawak generally achieved their objectives and can beconsidered to have been successful. However, now that theconsultants employed have completed their work and have left, theenduring effect of the efforts and funds expended will depend on theextent to which the Government follows up, providing the personnel

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and budgetary resources to continua the programs established.Particularly in Sarawak, the outlook does not encourage optiaisuprimarily due to lack of allocated funds and shortages of qualifiedpersounel. In the future, during appraisal and loan negotiations,more attention should be paid to ascertaining whether the Governmentreally has- a serious commitment, not only to the establishment of atraining program, but also to its long-term continuation as apermanent facet of the operations of the relevant agencies.considering the budgetary implications involved. Suchconsiderations should be specifically reflected in loan agreemnts.

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NALA=~~~~~~~~SABAN AND SARAWAK ROAD PROJECT (LOAN 2291-KATI

PART I. PROJECT REVIEV O THE BANK'S PERSPECTV

1. SUMMARY PROJECT DATA

Proj act Nm_: Sabah and Sarawak Road ProjectLoan Number: loan 2291-MARYP Unit: East Asia and PacificCountry: Malaysia Loan Amount: US$86.220.000.00Sector: Transport Canceled Amount: US$15.734.594.82Sub-sector: Roads Disbursed Amount: US$70,485.405.18

Approval Date: 05/26/83 Staff Appraisal Report: May 1983Effective Date: 08/19/83 Original Closing Date: 06/30/89Completion Date: 05/30/93 No. of Extensions: 3Total Project Cost: US$130.5 K Auended Closing Date: 06/30/92

Appraisal EgRR: 15 Re-Assessed KnRK: 251

2. BACKGROUND AND SECTORAL SETTING

2.1 The Federation of Malaysia consists of 13 states with a land surfaceof 337,000 square kilometers (sq ks) and a population in 1992 of abaut 18million, up from 13 million in 1980. The average annual population growth rateis expected to be about 2.3X in the period 1991-2000. Eleven states are locatedan the Malay Peninsula and the rew-ining two, Sabah and Sarawak, are on theisland of Borneo and separated from PeninulaLr Malaysia (PK) by the South ChinaSea. About 851 of the total population lives In PM where population density isabout 125 persons per sq km and 85S of Malaysia's economic activity is generated.The Government expects the recent economic boom to continue, anticipatizg CDPincreases averaging 72 per annum for the rest of this decade.

2.2 Sabah and Sgarak comprise about 602 of the total land surface ofMalaysia, with Sarawak approximately twice as large as Sabah. Most of theproduction of the two states comes from the extraction of natural resources(timber, oil, gas) and agriculture. About 602 of the labor force is engaged inagriculture, and both states show large imports of food and manufacturedproducts. The industrial sector is relatively undeveloped, especially ifcompared with PK. Both states have considerable agro-industrial potential butdevelopment is constrained by shortages of skilled and experienced personnel andby inadequate infrastructure and, in particular. poor roads.

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2.3 Sabah itself has a land area of about 74,000 sq km and a stronglyindented coastline with many natural harbors. Sea transport has historicallybeen the primary mode of transportation for both cargo and passengers, althoughair transport has become important for the latter in recent years. Thepopulation was about 1.1 million in 1980 and reached approximately 1.5 millionin 1992, with a population density of about 20 persons per sq km. Most of theland surface is mountainous and covered vith dense forest. Historically,forestry and logging were the major economic activities but, in recent years, oiland copper extraction bave assumed increasing importance. Oil palm and cocoadominate the agricultural cash crop sector. The bulk of the rural population isengaged in subsistence farming, with a large incidence of poverty coupled witha serious income disparity with the urban population and those engaged in export-related activities. Labor shortages continue to encourage iegal and illegalimigration from the Philippines and Indonesia.

2.4 Sarawak, with a land area of about 128,000 sq km and a population ofabout 1.4 million in 1982 and 1.8 million in 1992, borders Sabah but there is noroad cornection. Population density is about 15 persons per sq km. Its interiorhighlands, heavily forested, slope down to a coastal plain. Most of thepopulation lives in small rural communities and is engaged in subsistenceagriculture. Lacking any accessible road network, except for one trunk roadconnecting its three major population centers, sea and river transport havealway¶ been the primary mode for transportation and communication. Like Sabah,theri s a large income disparity between the rural subsistence farmers and theurban population and those engaged in export-related activities. Economicactivity is centered around the forestry and logging industries and the major oiland gas extraction industry that has grown up in recent years. Domesticallyconsumed rice is a major crop, while appreciable exports of rubber and peppergenerate foreign exchange.

3. BAIIK- f IN THE SECTOR

3.1 The Bank has been deeply involved in the transport sector since theearly seventies, assisting the Government of Malaysia (GOM) to implement itsseries of five-year plans to develop and improve Malaysia's transportinfrastructure. The Bank's assistance has traditionally focused on Sabah and PMbut its involvement in the transport sector has considerably diminished in recentyears. In both Sabah and Sarawak, highway planning was, until recently, quitelimited because the respective state ministries built roads where need wasperceived (suoject to the availability of funds) rather than on economicallyjustified grounds, with the objective being the construction of maximum roadlengths. Prior to this project, less than a third of the roads in the projectarea were paved, and many lacked proper drainage, requiring costly repairs aftereach rainy season. In addition, for a long time, the maintenance of existingfacilities received a much lower priority than did the construction of new roads.As a result, many roads became impassable during the rainy season and othersrequired heavy repairs shortly after construction.

3.2 This was the eighth Bank-financed transport project in Malaysia, thefourth in Sabah, and the first in Sarawak. Total Bank financing of these projectsamounted to US$157.3 million which included two port projects, one rail project,one urban transport project, and four road projects. All have been completed

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satisfactorily, although many delays and difficulties were encountered withvirtually all of these projects due to contractors' sobilization difficulties,late ordering and receipt of materials, project management problems, lateissuance of permits and licenses, land acquisdtion difficulties, problems relatedto removal of squatters from right-of-ways, and contractors, financial and cashflow difficulties.

3.3 Subsequent to the approval of this Project, two other transportprojects were financed by the Bank: the Port Kelang Project in PM (Loans2686/2687-MA of US$18.8 million in 1986) and the Highway Rehabilitatlon andImprovement Project again in PM (Loan 3145-MA of US$83.2 million in 1989). ThePort Kelang Project has been satisfactorily completed after some appreciabledelays due to land acquisition difficulties and lack of ttmely budgetallocations. The Highway Rehabilitation and Ioprovemnt Project, now beingimplemented, is well underway despite some early delays in appointment ofconsultants and preparation of tender docuaents, as well as difficulties causedby the failure of the Government to provide adequate budgetary resources topermit timely execution of project activities.

3.4 Under the Third Highway Project (Loan 1376-NA) substantial progresswas achieved in improving Sabb' as maintenance organization within its StatePublic Works Department (SPUD), acquiring necessary mate equipment andinitiating training (including establisbment of a Training Center) in intenanceplanning and operations. Nevrtheless, at the time of this project, atenanceunits were only in the process of beong established as permanent parts of theSPUD and had few trained personznl. The situation in Sarawak was much worse,with little actual attention given to preventive road maintenance and no separatemaintenance units within its SPUD, virtually no trained personnel available andno training facilities or program for road saintenance.

3.5 The Project Performance Audit Report (PPAR) prepared for the ThirdHighway Project (Loan 1376-NA) outlined two specific findings/lessons which areparticularly applicable to this project. These include the importance of: (a)enforcing axle load limits to ensure road longevity; and (b) careful pre-qualification of contractors to ensure that they have sufficient and appropriateexperience in order to reduce the possibility of subsequent frustration, costincreases and construction delays.

4. FOLLOW-ON IITTATIS M

4.1 The Sabah-Sarawak Road Transport Review, undertaken by consultantsfinanced under this Loan, provided a framework for future highway development inthe two states and part of the basis for the Fifth Malaysia Plan (1986-1990).Feasibility studles for about 500 km of roads in Sarawak were also undertaken aspart of the Review to develop a portfolio of economically justified road projectsfor consideration by available funding sources. Despite some initial discussionsregarding a possible follow-on project in Sarawak, the Government has decided toproceed with further development of the road sector in both states using its ownresources.

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4.2 The National Port Study, undertaken by consultants financed underthis Loan, provided a national ports plan including a framework for the futuredevelopment of Malaysia's port sector with emphasis on intermodalsm andprivatization. The results of the study provided input for planning of portinvestments in the Fifth (1986-1990) and Sixth (1991-1995) Malaysia Plans.

4.3 The maintenance improvement and training components of the Projectprovided a basis, in both Sabah and Sarawak, for improvements to the organizationand in-house capability of both SPUDs, with focus on training,programs and onplanning and implemntation of maintenance efforts.

s. THE PRIECT

Oblectsves

5.1. The Project was formulated to further the Government of MWlaysia's(GOM) developpeental objectives and the Bank's lending strategy for Malaysia. Themain objective of the project was to improve rural trunk roads and agriculturalaccess roads in order to support agricultural and agro-industrial activities inthe rural areas of Sabah. Through an overall planning study for both states, itwas also expected to assist the future development of both Sabah2s and Sarawak'stransport networks so that both states could base their transport systemdevelopent on more definite plans for agricultural, forestry and industrialgrowth. The Project also aimed to help improve the road maintenance capabilitiesand training efforts in both states and, by means of a comprehensive study,provide a basis for future port imve:.cments throughout Malaysia.

De scr2iotLon

5.2 The project consisted of:

(a) road improvements in Sabah comprising construction and upgrading of192 km of rural trunk roads and about 100 km (actual length vasabout 85 km) of agricultural access roads;

(b) staff training in the Sabah and Sarawak SPUDs and construction of atraining center in Sarawak;

(c) strengthening of the Saravak SPUD road maintenance organization byestablishing divisional maintenance units in two divisions as pilotprojects for replication throughout the state;

(d) assistance to both Sabah and Sarawak to undertake a Road TransportReview in order to produce a coordinated program for roadimprovemnts, and to strengthen the collaboration among StateDevelopment Offices (SDO) and SPUDs in project preparation andsectoral planning. The Road Transport Review included preparationof road feasibility studies in Sarawak to assist in theestablishment of a portfolio of economically justified road projectsfor future consideration by available financing sources; and

(e) assistance to the Federal Economic Planning Unit (EPU) to conduct aNational Ports Study.

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Design and OrManization

5.3 The SPWD for each state is responsible for planning, design,construction, uaintenance and administration of their state's highway networkunder the general direction of the Federal Ministry of Works and the FederalPublic Works Departmert (PWD). The planning function is carried out incoordination with the State Development Offices (SDO) and State Economic PlanningUnits (SEPU) in each state and is subject to review and approval by the FederalEPU and Highway Planning Unit (HPU). For this Project, the SPWDs, in each cave,were responsible for implementation of the project components that related totheir states, except that the two major studies carried out under the Project(the Sabah-Sarawak Road Transport Review and the National Port Study) weresupervised by the Federal Economic Planning Unit (EPU) and, for the National PortStudy, by the Ministry of Transport (HOT). The Sarawak SPUD, nevertheless,participated in the road feasibility studies that were carried out as part of theRoad Transport Review.

5.4 In January 1980, the Government appointed consultants to carry outfeasibility studies in Sabah for the improvement of rural trunk roads totalingabout 350 km, and for the construction of two major bridges to replace ferrieson the Kinabatangan and Segama Rivers in Sabah. In July 1981, the Covernmentcommissioned the same consultants to carry out detailed engineering of the roadsand bridges. The report and drawings were found to be satisfactory although itlater devela-sd that the geotechnical investigations were inadequate,contributing to difficulties and cost increases during construction. Totallength of trunk road improvements to be financed under the project was 192 km,consisting of 75.4 km of the new Sandakan-Telupid Rcad and 116.6 km of theexisting Lahad Datu-Sandakan Road. Under this Project, a joint venture ofexpatriate and local consulting firms was appointed to carry out constructionsupervision for these two trunk roads. The two major bridges over theKinabatangan and Segama Rivers, however, while included in this Project, were notfinanced under the Loan. Instead, the Government carried out their constructionusing other resources.

5.5 The three agricultural access roads in Sabah included in the Projectwere identified as priority needs by the Sabah SPUD and SDO. The design,detailed engineering and preparation of tender documents for these roads, as wellas their construction supervision, were carried out by local consulting firms foreach road section appointed by SPUD, whose services were financed under the Loan.

5.6 The staff training and the improvements to maintenance operations inboth states were carried out by the SPrDs with the assistance of consultants.For Sarawak, the Project included the provision of a Training Center In Kuchingand two Maintenance Depots in outlying districts. The consultants responsiblefor the training component in Saravak also provided designs, detailedengineering, preparation of tender documents and construction supervisionservices, all financed under the Loan, for the Sarawak SPwD Training Center andfor the two Maintenance Depots.

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Revisions and Amendments

5.7 US$15.0 million was canceled on January 24, 1987 at the request ofthe Government, and US$734,594.82 was canceled at the time of the loan accountclosing. The remaining amount, US$70.5 million, was disbursed under the project.The Closing Date of the Loan was extended three times, from the original date ofJune 30, 1989 to June 30, 1992, by which time all components had been completedexcept for civil works on Section B1, which was not completed until June 1993.

6. PRW CT Inol l o

Civil Vorks-Sabah

6.1 General. The start-up of the project was delayed by two and one-halfyears due to a lack of appropriate budgetary allocations from the Governmentduring 1984 and 1985. This initial delay was further exacerbated by the slowmobilization of contractors, poor performance of some of the contractors involvedin the Sabah road construction components, and deteriorating physical progresson each of the Sabah contract packages. Land acquisition was significant onlyfor the SandAkan-Telupid Road. However, the Government began to purchase thenecessary right-of-way early and although delays occurred. the process was.completed by the time construction contracts were awarded. There w nosignificant displacement of persons. The bid prices of the road contracts werevery low, the implementation periods far too short and the contractorsinexperienced. This resulted in slow progress, which was further exacerbated byexceptionally heavy rains from November 1987 to early 1990.

6.2 Even after they begau, progress on the Sabah road works was slow,partly due to this exceptionally heavy rainfall which often caused severe damageto the works, but mainly due to the failure of the contractors to provideadequate resources on a timely basis so that satisfactory progress in projectexecution could be maintained. For these and other reasons, most of thecontracts were completed much later than the original completion dates and someeven went beyond the extension dates. The Bank early urged that termination ofthe contracts with the least progress be considered, an action which theGovernment was reluctant to take.

6.3 However, after some additional work had been accomplished And afteran inspection of the sites in July 1989 by a Bank mission and extensivediscussions among SPWD officials, the supervision consultants and contractors,and following a review of contract documents and an in-depth assessment preparedby the consultants, it was determined by the Government that there were, at thatpoint in time, only marginal contractual grounds for invoking forfeiture ortermination procedures. It was noted that termination would lead to lengthy andcostly arbitration and that rebidding would take about one year with anadditional two years for construction. There would still be no guarantee ofbetter performance, and new contracts would likely double the cost of theremaining works. In addition, in the interim, special contracts would have tobe established for the protection of work done. Thus the decision was made toallow the existing contractors to continue. Despite its original reservations,the Bank agreed with these actions. Nonetheless, in one case, due to the failureof support efforts for an unsuitable contractor, it still became necessary, at

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a later date, after many difficulties, and after the contractor abandoned thesite, to terminate a contract and appoint a new contractor to complete the work,at a greatly increased cost and lapse of time.

6.4 To improve their cash flow, all of the local contractors applied tothe Government for.the release of retention monies against a bank guarantee.Justification for the release of funds was based on the fact that there had been:(a) exceptionally low bids and subsequent contract aounts; (b) substantial priceincreases, but limited provision for price variation in the contracts; (c)unfavorable exchange rates; and (d) extra costs (not reimbursable under thecontracts) due to exceptionally heavy rains. The Government, with Bankconcurrence, eventually decided to release all retention monies.,

6.5 Progress improved about mid 1989, especially after the Governmentreleased retention monies to ease cash flow problems. Six contracts (Tawau-Merotai Road, Sapi-Nangoh Road, Lahad Datu-Bakapit Road, Packages Al and A2 ofthe Sandakan-Telupid Road and Package 52 of the Lahad Datu-Sandakan Road) werefinally completed after much delay, while Package B1 of the Lahad Datu-SandakanRoad, where the contract was terminated after the contractor abandoned the site,and a new contractor was appointed to complete the uncompleted works, was stillongoing when the Loan closed. It was completed in June 1993.

6.6 Sa-dakan-Teluvid Road. This 87.8 km road was the only unpavedsection of the highway linking the eastern and western parts of Sabah. The first33 miles of road from Sandakan was paved, and from mile 33 to Telupid, it wassituated on hilly terrain. The road was built in 1960 to low geometricalstandards with gradients frequently in excess of 10, and in places as high as14X. Traffic prior to the project was about 350 vehicles per day CVPD), half ofwhich were heavy, including about 40 logging trucks. Vehicle speed was lowbecause of poor road standards and rough gravel surface. Under the project, theroad was built partly on a new alignment which shortened the route distance by12.4 km. The works also included five new bridges of 20 m and 30 m spans,totaling 230 m. After project completion, traffic levels reached 1100 VPD (AADT)in 1991 for the Sandakan-Telupid Road.

6.7 The construction work for the Sandakan-Telupid Road was divided intotwo contracts (Packages Al and A2) which were awarded to the same expatriatecontractor with construction to start in September 1986 and a scheduledcompletion date of September 1989. From the beginning, progress on bothcontracts was exceedingly slow, partly due to exceptionally bad weather and longdelays in obtaining a necessary quarry exploitation license from the Government.However, even after the legal problem was solved (in part due to Bankintervention) and the weather improved, the contractor was unable to provideadequately skilled manpower or appropriate equipment to allow a satisfactory rateof progress in project execution. As of the end of 1989, more tharn three yearsafter work had begun and three months beyond the original completion date, thecontractor had completed only 27Z of the work for Package Al and about 551 of thePackage A2 work. The disparity was due to the contractor's decision toconcentrate resources on Package A2. The contractor's financial difficultiesexacerbated the situation and led to cash flow problems which were only partlyrelieved by the Government's decision to release retention monies against bank

guarantees. As of the middle of 1990, the contractor had submitted substantialclaims, most of which had not, at that point in time, been agreed to by theEngineer due to inadequate documentation by the contractor. The Government,however, anxious to have the works finished, and taking into account thecontractor's insistence that work would stop unless all claims were settled,negotiated, with the Bank's concurrence, the settlement of all claims through thedate of settlement (December 1990, when Package Al was 431 complete and PackageA2 was 791 complete) in the form of a lump sum payment in addition to thecontract price, increasing the cost for the two packages to N$128.5 million fromthe original bid price of M$58.5 million. In addition, a series of timeextensions were granted to the contractor, with final agreement on a revisedcompletion date of June 30, 1991 for Package A2 and April 30, -1992 for PackageAl. Progress thereupon improved, reaching 601 completion in May 1991 for PackageAl and 93Z for Package A2.

6.8 Package A2 was completed in September 1991, three months beyond therevised completion date. Package Al was substantially complete by the end ofDecember 1991, appreciably ahead of the revised completion date of April 30,1992. The quality of construction, in both cases, was satisfactory although anumber of defects, which were rectified, had been identified by the consultants.Additionally, the pavements and shoulders were often damaged, during and afterconstruction, by heavily laden logging trucks, requiring constant repair andmajor post-construction maintenance work.

6.9 Lahad Datu-Sandakan Road. This 121.8 km road is part of the EastCoast road in Sabah joining Tawau with Sandakan. The project sectlon of the roadjoined the Saudakan-Telupid road at mile 32 (Labuk Junction). The existing roadwas built in the 1970s to gravel standards and had generally satisfactoryalignment and gradients, except on about 20 km from Labuk Junction, where thevertical alignment required improvement. The traffic at the time of appraisalwas 450 VPD at Labuk Junction, growing to 800 VPD near Lahad Datu. The worksconsisted of improvements to curves and gradients, widening of formation,drainage, pavement, and three new bridges totaling 120 m in length. Two majorbridges (Kinabatangan and Segama) were included in the project but were financedby the Government using its own resources. After project completion, trafficlevels reached 888 VPD (AADT) average for the entire road in 1991.

6.10 The construction work for the Lahad Datu-Sandakan Road wat dividedinto two contracts (Packages B1 and B2). Package B1 w awarded to a jointventure of two local contractors with construction to start in September 1986 anda scheduled completion date of January 1989. Package B2 was awarded to anexpatriate contractor with construction to start in September 1986 and ascheduled completion date of September 1989. For both packages, substantialinitial delays took place due to the failure of both contractors to mobilizeadequate resources of material, equipment and manpower in the early stages of theimplementation period. These delays were exacerbated by the unusually inclementweather that -was experienced during the same period. For these and otherreasons, by the end of 1987 only 301 of the work for Package B1 had beenaccomplished. The situation for Package B2 was much worse, the contractor havingaccomplished only 161 of the work by the end of 1987.

6.11 Notwithstanding the early delays that occurred on Package B2, the

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contract was completed in August 1990 without major problems and the contractorperformed quite well under difficult conditions, producing work of satisfactoryquality. The earthwork required increased nearly 90X over the quantitiesincluded in the original contract due to the encounter of extensive deposits ofsoft, unsuitable material that had to be removed and replaced. In addition, itproved necessary to allow time for enbankments to settle and to repair slips thatoccurred in unstable areas. The contractor was granted time extensions toaccount for the various difficulties experienced that brought the scheduledcompletion date to April 1991. The contractor, however, completed the work byOctober 1990, except for some remedial work to be carried out during themaintenance period of the contract. The contract price increased to N$35.7million, some 21S higher than the original price, mostly dus- to. the increasedearthwork required. During and after construction, damage by heavily loadedlogging trucks made necessary the constant remediation of works on pavement andshoulder areas, as well as major post-construction maintenance work.

6.12 For Package Bl, the contractor faced initial delays in carrying outthe work due to the unusually inclement weather and difficulty in obtainingpermits for quarry exploitation. In addition, the contractor vas inadequatelymobilized and organized, lacking adequate equipment, manpower and financialresources to properly pursue the execution of the project vork. Poor managementof the resources available worsened the situation. By mid-1988, 22 nonths afterbeginning work, only 35X of the work had been completed. The Government madestrenuous efforts to assist-the contractor in solving lts serious fLnancialproblems, irnluding the release of all retention monies, agreement to timeextensions that revised the completion date to October 1989, and use of its goodoffices in an attempt to assist the contractor to sub-contract the works to afirm capable of completing the work. Nevertheless, by June 1989, these problems.had become insurmountable and the contractor ceased work, abandoning the site byNovember 1989. Negotiations with the contractor's bank for a rescue package,using a sub-contractor acceptable to the Government, were unsuccessful. As aresult, the Government, with Bank concurrence, negotiated another contract tocomplete the remaining works with a local contractor at a considerable costincrease. At the time of termination, the works were 421 complete; however, due -

to lack of maintenance during the interim period (16 months) and because of thedamage done to the road pavement and shoulders by heavily loaded logging trucks,before the new contractor occupied the site the actual work needed to beaccomplished by the new contractor was about 751 of that originally p4anned.After abandoning the site, the original contractor removed the plant, equipmentand material that were at the site.

6.13 The new contract for the completion of the uncompleted works inPackage BI was negotiated with and awarded to a local contractor for a cost ofM$46.5 million, making the total cost of Package Bl equal to M$58.2 million (lessthe H$1.3 million performance bond forfeited). Thus, including the moniesalready expended, the original bid price for the work was quadrupled. Thecommencement date for ths new contract was during January 1991 (due to long,drawn-out negotiations) and its scheduled completion date was in January 1993.This contractor performed quite well despite some delay during the latter partof the implementation period, mostly due to the need to carry out some additionalworks. The contractor was granted a time extension of four months to allow forthis factor, bringing the scheduled completion date to the end of May 1993. As

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of the end of April 1993, the work had been substantially completed, with onlysome minor works to be accomplished by the end of May 1993. The quality of thework carried out was satisfactory. Due to the damage done to the road pavementand shoulders by heavily loaded logging trucks during and after construction,continuous remedial works vere necessary during the course of the work and majormaintenance efforts will be necessary until such time as the overloaded vehiclescan be brought under control.

6.14 Aricultural Access Roads. These roads were Included in the projectto support agricultural development and to improve rural living conditions byproviding all-weather access to areas previously served seasonally or unreliablyby road. The roads included in the project were all located ixt Sabah and werethose whose construction opened up new agricultural areas and included: (a) theSapi-Nangoh Road (34 km); (b) the Lahad Datu-Bakapit Road (29 km); and (c) theTawau-Herotai Road (21.6 km).

6.15 Sayi-Nang2h Road. This contract was awarded to a local contractorwith works beginning in May 1987 and with a scheduled completion date of May1989. Initial progress was very slow due to the contractor's inability toquickly mobilize needed resources of manpower and equipment and due to theexceptionally inclement weather experienced. By May 1988, 12 months afterconstruction began, the work was only 12Z complete. Progress then improvedsomewhat, especially after the Government decided to release retention moniesagainst bank guarantees. Except for some minor works to be completed within themaintenance period, the work was completed in January 1991, two months after therevised completion date of November 1990. A time extension of 18 months had beengranted due to unavoidable delays experienced and time needed to accomplishadditional work. The final coutract price was M$14.2 million, some 19X higherthan the original price of H$11.9 million, mostly due to increased quantities.No traffic surveys have yet been carried out for this road.

6.16 Lahad Datu-Bakauit Road. Work on the Lahad Datu-Bakapit Roadcommenced as scheduled in September 1987, but the local contractor made a verypoor start due to slow resource mobilization. Unusually heavy rainfall alsocaused serious delays. By mid-1988, nine months after work began, the works wereonly 12X complete. Heavily loaded logging trucks using the roads during theconstruction period and afterward also caused damage which required rectificationbefore further work could be done and will require major maintenance wbrk on acontinuing basis. The contractor was graLted a time extension until the end ofJanuary 1991 to account for delays caused by weather and increases in requiredwork, and completed the work within this extended time frame. After completion,traffic reached 1453 VPD (AADT) in 1990.

6.17 Tawau-Nerotai Road. Excessive rainfall contributed to the delays inprogressing the work on this contract, as did the local contractor's earlydifficulty in providing adequate suitable equipment to carry out the work. Thework commenced in December 1986 with a scheduled completion date of August 1988.The Government granted the contractor time extensions, which brought thecompletion date to February 1989. After the appointment of a differentsubcontractor which helped to accelerate the rate of progress, the works werecompleted in July 1989, six months after the revised completion date. The final

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contract cost was H$10.6 million, the original bid price, with the cost ofadditional work needed on the projtect being accommodated within the contingencyand daywork allowances. After completion, traffic reached 3113 VPD (AADT) onthis road in 1991.

6.18 KinabatanLwn and Se5a e.dresdm. These major bridges on the LahAdDatu-Sandakan Road in Sabah were not financed under the Loan but were includedin the Loan Agreement, pursuant to which the Government was to complete theirconstruction by December 31, 1987. Although the tendering of the hridges was twoyears late, the tenders were let simultaneously with the project's trunk roadcomponents. The delivery of superstructure steel, however, was delayed byseveral months due to unseasonably heavy rains where they were being fabricated.Despite these delays, and since the bridges progressed in a more orrderly fashionrelative to the road components, they were completed before the road work wascompleted. Segama Bridge was completed and opened to traffic in August 1989,while Kinabatangan Bridge was opened in June 1990. Since the bridges provided24 hour access across the rivers, the ferry service was discontinued.

Civil Works - Saravak

6.19 Training Center. The contract for construction of a new TrainingCenter in Kuching for Sarawak's SPUD was awarded to a local contractor, with thedesign and supervision of construction carried out by a local consulting firm(part of a joint venture of expatriate and local firms engaged to carry out thetraining and technical assistance program for Sarawak's SPUD). The constructioncontract included site work, classroom training center, quarters, trainingworkshops and ancillary equipment and facilities. The contract was signed inSeptember 1988, work began in December 1988 and was completed satisfactorily onschedule and within budget in January 1990. The Training Center was formallyopened on August 28, 1990. Host of the facilities were fully equipped and somecourses were taught there by local instructors beginning in late 1990.

6.20 Maintenance DeRots. The construction of the two new maintenancedepots for Sarawak's SPwD were awarded to local contractors, after a very latestart on implementation by the SPwD, with the design and supervision ofconstruction carried out by a local consulting firm (part of a joint venture ofexpatriate and local firms engaged to carry out the training and technicalassistance program for Sarawak's SPUD). The work on the construction contractfor the maintenance depot at Balai Ringin, SAarahan, Sarawak, including livingquarters, site work, workshop and ancillary equipment and facilities, began inOctober 1991 with completion scheduled for August 1992. By the end of June 1992when the Loan closed, work had reached 68Z completion. The work wassatisfactorily completed in October 1992 with final cost less than thatoriginally bid due to some reductions in the required work. The work on theconstruction contract for the maintenance depot at Selangau, Sibu, Sarawak beganin December 1991 with a scheduled completion date of December 1992. The contractincluded site work, living quarters, workshop and ancillary equipment andfacilities and, at the time that the Loan closed at the end of June 1992, workhad reached 41X of completion. The work was satisfactorily completed in January1993, at a cost somewhat below the original contract price due to reductions inwork required. The Project had originally included the upgrading of some ofSarawak's existing maintenance depots but the Government decided to carry out

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that work using its own resources over a longer time period.

EauiMent. Tools. Books and Materials

6.21 For Sabh, necessary training equipment, tools, books and materialswere procured and supplied by the expatriate consultants engaged to providetechnical assistance for maintenance improvement and training to Sabah *s SPUD.The equipment, tools and materials for classroom and workshop training wereobtained through tenders let by the consultants at an aggregate cost ofM$650,000. By mid-1990, all equipment, tools and materials had been purchasedand received.

6.22 For Sarawak, necessary training equipment, tools, books andmaterials, including computer hardware and software for implementation of theRoad Maintenance Management System (RHES) and vehicles to permit improvedinspection of on-going maintenance work, were procured under the Project bySarawak,s SPUD. By the end of 1990, all equipment, tools and materials,including that required for the Training Center, had been obtained at anaggregate cost of H$1.7 million. The Project also included the procurement ofroad maintenance equipment, based on the recommendations of the technicalassistance consultants. This equipment was obtained by the SPUD for an aggregatecost of M$1.98 million and financed under the Loan.

Training Programs and IMnrovements to Naintenance Onerations

6.23 In Sabah, a joint venture between an expatriate consulting firm andlocal consulting firms was engaged to assist the Sabah SPUD to carry out itsmaintenance training program. including improving planning, administration andimplementation of maintenance operations. The technical assistance provideAbegan in January 1988 after some delay because of protracted consultant selectionand contract negotiation, and was completed in February 1990, providing SPUD withvaluable assistance in further establishing and extending its maintenancetraining programs (which had been initiated with Bank assistance under the ThirdHighway Project, Loan 1376-MA) and helping to upgrade maintenance management andmanpower planning and personnel policies. The consultants also procurednecessary training equipment, tools and materials for SPUD under their contract.During the two year course of the technical assistance for training, 35 courses,largely focussed on road maintenance and workshop operations, were dePeloped,local instructors were trained and a total of 349 SPwu staff attended courses.In addition, seminars in manpower planning and development and in monitoring andevaluation systems were organized for higher level staff. As part of thiscomponent, a numier of Sabah, s SPUD staff were provided with overseas fellowshipsfinanced by the Bank. A total of 22 SPUD personnel attended these overseascourses relating to road maintenance planning and operations. The training andmaintenance improvement efforts were successful and are expected to be continuedas a pernmnent facet of SPUD's operations.

6.24 In Sarawak, a joint venture among two expatriate consulting firms anda local consulting firm was engaged to assist the Sarawak SPUD in: (a)establishing a road maintenance division within SPUD and improving the planning,organization, management and execution of road maintenance operations in Sarawak;and (b) strengthening and expanding staff training activities of SPWD, including,

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among other things, establishment of a Training Center, a Manpower Developmentand Training Unit, a Road Maintenance Management System (RMNS), an EquipmentManagement System, and a Training Production Unit. These consulting servicesbegan in December 1986 and were completed in June 199G. During this time, over1500 SPWD staff were trained, including local instructors who are expected tocontinue implementation of the training programs on a permanent basis. Theseservices were suecessful in reaching the goals originally set and providedvaluable assistance to SPWD in achieving its objectives of establishing animproved training organization and program and rationalizing, its planning,administration and execution of road maintenance operations.

Consulting Services

6.25 Under the Project, in addition to the consulting services fortechnical assistance described above, the Government engaged consulting firms to-carry out construction supervision for trunk roads in Sabah; to carry outdesigns, preparation of tender documents and construction supervision for theagricultural access roads in Sabah and for the Training Center and MaintenanceDepots in Saravak; and to carry out the Road Transport Study in Sarawak and theNational Port Study for all of Malaysia. All of these consultancy services weresatisfactorily carried out and completed, although some of the assignments hadto be extended due to the delays in completion of the associated road works.

6.26 In addition, provision of consultancy services for the design andpreparation of contract documents for the BakaDit-Tungu Road was added to thisproject during implementation. This section of road was to be constructedthrough finanring provided under a Bank agricultural loan proposed at that time,the Sabah Land Settlement and Environmental Management Project (later Loan 3030-.MA). The Bank agreed to finance the design of this section of road from Loan2291-MA in order to expedite its execution. The work was successfully completed.In addition, the design and preparation of tender documents for the SandakanInterchange, the uncompleted connection between the Sandakan-Telupid Road and theLahad Datu-Sandakan Road, was also completed under the Project with financing forconstruction to be provided by the Government from its own resources andconstruction to be undertaken at a later date. Also, during implementation ofthe Project, a missing link (one half of one km) joining these two trunk roadsin the vicinity of Sandakan was also discovered. Improvement of this section wasdesigned by the consultants and was carried out through an addendum to one of theexisting contracts.

Studies

6.27 Sabah-Sarawak Road Transport Review. The Government engaged a jointventure between an expatriate consulting firm and local consultants to carry outa review of the road networks of the two states in order to: (a) identifyconstraints for the optimal operation of road transport in the two states andbetween them; (b) identify constraints from inadequate road infrastructure uponagricultural, forestry and other resource development; and (c) establishpriorities for the expansion and improvement of the road transport network. TheReview identified priorities in development of trunk and feeder roads in Sabahand Sarawak, including the Pan-Borneo Highway, and deficiencies in operation andmanagement of the road stock, specifically inadequate maintenance. In addition,

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feasibility studies and preliminary engineering were carried out for a total offifteen road schemes in Sarawak, totaling 497 km, to provida the Sarawak SPUDwith a stock of economically justified road projects for future financing fromavailable sources. The Review began in December 1985 and was satisfactorilycompleted in April 1989.

6.28 National Ports Study. A joint venture between an expatriateconsulting firm and local firms was appointed by the Government to reviewexisting port facilities and current administrative practices. The Studyprepared a long term port development program including both an investment planand measures for operational improvements. It also focussed on the objective ofpromoting direct shipping via Malaysian ports and, at the same time, ninimizingtransport costs, goals which are not always compatible. ffeaxs of promotingincreased port productivity and avoiding duplication of port facilities were alsoexamined as were intermodal considerations and port privatization policies. ThsStudy began in August 1986 and was completed satisfactorily in March 1988.

Land Acquisition

6.29 Land acquisition for road right-of-way purposes in Sabah was carriedout by the SPWD. Since the land was required largely for widening of an existingroad in a rural area, no appreciable resettlement of persons was required. InSarawak, some very minor land purchases for the training center and maintenancedepcts were undertaken by the SPUD, without the need for any racettlement ofpersons. All land acquisition in both states was financed by the Governmentutilizing its own resources.

Procurement

Civil Vorks

6.30 Prepualification. A large number (over 50) of foreign and localcontractors were originally prequalified to undertake the road works for theSandakan-Telupid Road and the Lahad Datu-SandAkan Road in Sabah, each of whichwere divided into two contract packages to be tendered under InternationalCompetitive Bidding (ICB) in accordance with the Bank's guidelines. Contractors,depending on their capacity to undertake the work, were prequalified to bid forall or some of the four contract packages. The Bank reviewed and approved theprequalification documents and questionnaires, the evaluation methodology and,eventually, the list of contractors permitted to bid. Due to the lack ofbudgetary resources available to the Sabah SPWD, further action relating to thecalling of tenders was postponed for more than two years. When funding becameavailable, the program was revived and all those who had applied previously werecontacted and the data updated for those who still evidenced interest intendering. In addition, a number of additional companies were added to the list,after their suitability was investigated. The Bank reviewed and concurred in allof these activities and decisions as well. While the SPUD carefully followed theproper procedure as approved by the Bank, insufficient judgement was applied tothe ratings established for some firms, and despite the various reviews andapprovals by the Bank, all the contractors who were later awarded contractsexperienced substantial difficulties in carrying out the work and meeting theirfinancial obligations, in one case finding itself unable to complete the work.

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Other factors, such as very bad veather and unexpectedly poor sub-surface soilconditions, also contributed to the difficulties experienced.

6.31 Prequalification exercises were also undertaken, when funds becameavailable, for-the Lahad Datu-Bakapit Road, the Sapi-Nangoh Road and the Tawau-Merotai Road in Sabah, also to be let under ICB. A large number of applicationswere received for each of these road sections and the Bank agreed with theresults of the evaluation of prequalification documents by SPWD. Nevertheless,the contractors who were awarded the work experienced similar problems asdescribed above, although they eventually managed to complete the work.

6.32 Tendering. Under ICB, tenders were called, after the Bank hadapproved the relevant tender documents, for each of the road sections. The fourpackages for the Sandakan-Telupid Road and the Lahad Datu-Sandakan Road were letat the same time with bidders, according to their prequalification status, being'permitted to bid on any or all of the packages. The other three road sectionswere called individually when their designs and contract documentation werecompleted. Low bids received, in all cases, were exceptionally low, ranging from13Z to 45Z below the engineer's estimate, perhaps reflecting the state of theroad construction market at the time and the large numbers of interested bidders.Nevertheless, even though some of the bids were low enough to cause concern aboutthe ability of the contractors to properly complete the work, the contracts were,in all cases, awarded to the lowest evaluated bidder without any increase in theperformance bond required. The Bank concurred with these awards. Since two ofthe contract packages (Al&A2-Sandakan to Telupid Road) were awarded to acontractor who had bid them jointly and was found to be the low bidder, therewere a total of seven contracts to be implemented.

6.33 Other tenders were called- with Bank agreement, under LocalCompetitive Bidding procedures for the Sarawak SPWD Training Center in Kuchingand the Maintenance Depots at Selangau and Balai Ringin in Sarawak. Thecontracts were awarded to the lowest evaluated bidder, and were completed withoutmajor difficulties.

kauipment

6.34 Equipment needed for training purposes by the Sabah SPWD was obtainedas part of the technical assistance consultancy services for training Includedunder the Project. For the Sarawak SPWD, equipment needed for the TrainingCenter and for maintenance purposes was procured through Local Shoppingprocedures, in accordance with the limitations set forth in the Loan Agreement,in a manner satisfactory to the Bank.

Technical_Assistance and Consultancy Services

6.35 Technical assistance for training in Sabah and Sarawak was obtainedthrough engagement of specialist consulting firms in each case which provided theneeded expertise. Consultancy services for design, detailed engineering andpreparation of tender documents for the three agricultural access roads includedin the Project were obtained through the appointment of consulting engineeringfirm which also carried out the construction supervision for each contract. For

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the two trunk roads, the designs and preparation of contract documents had beenpreviously completed by the Government and only construction supervision of theworks was included under this Project. Consultancy services for design andpreparation of tender documents were also obtained for Sarawak SPUD's trainingcenter and two maintenance depots, with construction supervision provided by thesame consultants. -The design, detailed engineering and preparation of tenderdocuments for an additional length of agricultural access road (the Bakapit-TunikuRoad) and for an interchange providing connections between the two trunk roadsin Sabah were also included for financing in this Project. In addition, twomajor studies were carried out by consulting firms under this Project, a NationalPort Study for all of Malaysia and a Road Transport Review for Sabah and Sarawak.

Costs

6.36 In spite of the unrealistically low bids, and due to the delays anddifficulties encountered, as well as the need to increase the required workbecause of unexpected field conditions encountered, the actual cost of the roadconstruction work in Sabah was N$295 million compared to the original bid amountsof M$171 million, an increase of 72X. Compared to the appraisal estimate(without contingencies) of M$217 million, there was an increase of 361. Theseamounts include the costs of construction supervision by consultants whichthemselves nearly doubled (increasing from the K$13.7 million estimated (withoutcontingencies) at the time of appraisal) to a total of M$25.3 million, primarilybecause of the exceptional increase in the time required for completion ofconstruction work, necessitating long extensions to the consultant's contract.

6.37 The cost of the consultancy services in Sabah for training andimprovements to maintenance operations, including acquisition of trainingequipment and materials, on the other hand, was only about 541 of the amount thathad been estimated at appraisal. This was due to savings in the cost ofconsultancy services and reductions in equipment acquisition plans. For Sarawak,substantial increases occurred in the costs of consultancy services and in theconstruction costs for the Training Center over those that had been estimated atthe time of appraisal. However, other costs for the component related totraining and maintenance operation improvement, including the acquisition ofequipment, were close to or less than those estimated. Overall, the actual costof this Sarawak component increased by 17S over that estimated at appraisal.

6.38 For the two studies included in the Project, actual costs for theSabah-Sarawak Road Transport Review increased by about 201 over that estimatedat appraisal, while the cost for the National Port Study was slightly below thatoriginally estimated. In Sabah, land acquisition costs of H$12. 0 million (notincluded in the Project's cost estimates) increased about 601 ever SPWD'soriginal cost estimates. Land acquisition costs in Sarawak were minimal, lessthan that estimated.

6.39 Despite the substantial increases in the costs of road constructionand consulting services compared to those originally estimated, the Project'soverall costs, when contingency allowances are taken into account, were actuallyslightly less (4X) than the total estimate made at the time of appraisal.Foreign exchange costs, which were the portion of costs that the Bank loan(US$86.22 million) was to defray, including both direct and indirect costs, are

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estimated to be close to those anticipated al: che time of appraisal (58X of totalcosts). In addition, after the cancsllati,;t of US$15 million from the loan atthe request of the Government, the Bank's coutribution to project financing wouldhave been US$71.22 million (57X of total actual costs). Further, at the time ofloan account closing, an additional unused amount of US$0.73 million wascanceled. Therefore, the actual amount of Bank financing. US$70.5 million,represented 56Z of total actual costs of US$125.2 million equivalent, close tothe 58Z originally estimated. Nevertheless, it is clear that the Bank loanfinanced a portion of the project's local costs.

Disbursements

6.40 The Loan became effective on August 19, 1983. Due to theGovernment' s unwillingness to commit any resources to the Project, there was noprogress in beginning izplementation until 1986, when budgetary resources beganto become available, and no disbursements at all until the fall of 1986, adisbursement lag of almost three years. Disbursement experience subsequent to1986 proceeded at a rate of about one-half that which had been estimated for theearly years of project implementation at the time of appraisal, conforming to theslower pace of project execution that actually occurred. As problems anddifficulties that were encountered during the course of project implementationwere solved or surmounted, the rate of disbursement increased substantially.Overall, except for the unfortunate delay in beginning work on the Project,disbursement experience was satisfactory, generally conforming to the applicableprofile. The Loan closed on-June 30, 1992, although some project components hadnot yet been completed, with US$2.63 million being disbursed after the ClosingDate for expenditures related to work accomplished prior to Loan closing. Thefinal disbursement was made on October 28, 1992. The costs of work carried out.after the Closing Date were borne entirely by the Government from their ownresources.

7. PROWECT RESULTS AND LESSONS LEARKED

7.1 In-Sabah. prequalification, although carried out using Bank-approvedprocedures and methodology, was generally poorly done with insufficient rigorapplied, resulting in works being awarded to some poorly qualified contractors.The result was extensive delays. Although there were extenuating circumstances(heavy and long periods of rain), many of the contractors lacked appropriateexperience, were slow to mobilize, and had limited financial resources to provideadequate equipment, personnel and material and to cover protracted delays. InSarawak, project civil works contractors performed satisfactorily, albeit withsome delays. The equipment suppliers in both states, who were both local andforeign, generally performed satisfactorily and delivered equipment on time.Consultancy services and technical assistance in both states were, in general,provided in a satisfactory manner by both local and foreign firms. Insofar asthe Sabah-Sarawak Road Transport Review, the National Ports Study, and the roadfeasibility studies in Sarawak are concerned, all were completed satisfactorilyand their recommendations taken into account in the Government's planning.

7.2 Overall, the project had mixed results. Although all works wereeventually completed, there were significant delays and problems in

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implementation. Bids for road works were exceptionally low, ranging from 132 to451 below engineering estimates, and the time allowed for completion was, inretrospect, too short. In addition, most of the low bidders for the road workswere inexperienced in road works. The others either were not familiar with thetype of weather, topography or soil conditions found in Sabah or assigned veryinexperienced personnel to carry out the works who were not replaced with morequalified staff, even after difficulties worsened. This led to constructiondelays, extension of contracts and price increases. * The heavy rains and thecontractors' lack of sufficient financial resources also lengthened the timeneeded to complete the work. As a result, substantial cost overruns occurred inthe road construction contracts in Sabah, as well as in the associated consultingservices for supervision, due to lengthy delays in the completipn of the works.

Economic Evaluation

7.3 Between 1985 and 1991, traffic on the project roads has increasedbetween 71 and 24Z depending on the segment. At the time of appraisal, it wasforecast to increase at about 12.5X to the year 1994, and 7.5Z thereafter.

7.4 Sandakan-Teluiid Road. Traffic on this section has been groving ata slightly faster rate than that forecast in the SAR. In 1991 actual averageannual daily traffic (AADT) -was 1101 compared to the projected traffic of 954.The reason for this higher rate relates to the fact that a number of agriculturalprojects have come on stream during this period, the cumulative result of Whichhas impacted traffic growth.

7.5 Lahad Datu-Sandakan Road. This is the only section where traffic hasbeen growing at a slower rate than that forecast in the SAR. In 1991 actual AADTwas 888 while that projected was 1245. The main reason for the drop in trafficgrowth relates to the fact that logging output in the area has been virtuallyexhausted at this point, although there is ample agricultural land with a numberof schemes being developed for the cultivation of cocoa, oil palm, coffee,pepper, rice and rubber. There is also a new forestry (5500 hectares) schemebeing planned at Batu Putch. When these projects are realized it is expectedthat the rate of traffic growth will increase.

7.6 Tawau-Merotai Road. Since 1985, traffic has been growing at anaverage rate of about 7.5Z annually. The SAR notes that in 1983 the ADT for thisroad was about 800. In 1991, it had risen to 3113. Between 1983 and 1985,traffic on this section had more than doubled due to a number of privatedevelopment schemes in its area of influence which had been completed.

7.: YLahad Datit-Bakit Rbod. Traffic on this section has been growing atan average rate of over 20X between 1985 and 1991. This is due mainly to thecompletion of a number of agricultural development schemes coupled with the factthat this road forms part of the Tengu and Tambison Roads uhich have beeninstrumental in opening up an extensive area hitherto inaccessible to ruraldevelopment.

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7.8 Saoi-Nanaoh Road. The construction of this upenetration' road wasintended to support the development of several large oil palm plantations and arice growing estate, which together were expected to provide employment for about2,300 persons by providing year-round access to hitherto inaccessible are1s.However, no information is presently available concerning traffic on this road.Traffic surveys are to be undertaken in late 1993.

Proit-vt Costs and Benefits

7.9 As noted earlier, costs for the trunk roads in Sabah escalatedmarkedly over those estimated during appraisal, while costs for the agriculturalaccess roads in Sabah increased only slightly over appraisal estimates. As inthe SAR, vehicle operating cost (VOC) savings have constituted tse main benefitsfor all road improvement components. There is, however, some difference betweenSAR estimates (average saving of 0.380 H$/km) and the reevaluated benefits (0.529M$/km). Maintenance cost savings, while appreciable in theory, were not includedin the reevaluation because of the constant need to repair the continuing damagecaused by logging trucks. Also, the Sapi-Nangoh Road component (one of theagricultural roads under the project) was not reevaluated on a quantified basisdue to a lack of traffic information and other data. There is little doubt,however, that the increased production of agricultural products (oil palm andcocoa) due to the provision of the road would easily produce an EIRR at leastequal to the 121 estimated during appraisal.

7.10 Economic Internal Rates of Return (EIRRs) were calculated for each ofthe other road components separately. While costs have increased, changes intraffic growth coupled with increased VOC savings, have resulted in significantdifferences between appraisal and reevaluated EIRRs. The results are as follows:.

ECONOMIC INTERnAL RATES OF RETURN (EIRBs)

- *od Se o,4gmenlt. .AEtmt ', | *:~_~~~~~~~~. .. ......

A. Sandakan-Telupid 17.6Z 20.8XB. Lahad Datu-Sandakan 13.2X 21.6XC. Tawau-Merotai 19.1X 47.51D. Lahad Datu-Bakapit 15.11 27.61E. Sapi -Nangoh 11.7X N.A." Overall EIRR (A through D) 25.21

Lessons learned

7.11 There are four primary lessons to be learned from the implementationof this project:

(a) More care should have been taken in the prequalification process toensure that contractors had the requisite experience, capability and,just as importantly, the financial resources to properly carry out the

- 20 -

work. Contracts should not be routinely awarded to marginallyacceptable firms which have submitted unreasonably low bids, as inthis case. Instead, after a review of the Engineers, Estimate toascertain its reasonableness, the likelihood of the contractoresfailure should be realistically assessed, and appropriate action takenbefore letting the contract. At a minimum, if contractors with lessthan desirable financial resources were, for whatever reason, to beawarded contracts, then the performance bond required should have beenincreased to a level where their default, although undesirable, wouldnot create insurmountable difficulties. Where properly qualifledcontractors also submitted unreasonably low bids, more care shouldhave been taken to ensure that satisfactory remedies were availablein the event of later difficulties.

(b) When it developed that certain contractors, due to shortage of funds,lack of qualified personnel or general incompetence, could notproperly complete the work within a reasonable time frame, theGovernment should have canceled their contracts for cause, as the Bankhad strongly recomended at an early stage, without undue delay andrused another contractor to complete the work rather than entering intoa long, drawn out process of assistance to the contractor which, insome cases, did not have a satisfactory outcome and contributed tolong delays in completion of the work and substantial increases incosts.

(c) It has become abundantly clear, with Sabah and Sarawak as cases inpoint, that unless some reasonable control can be exercised overexcessive axle loads, the rapid deterioration of road infrastructurecannot be avoided. The heavily overloaded trucks carrying timber andother products in both states continue to damage road pavementstructures. Until the Government begins to make more serious effortsto limit these axle loadings, all road users will continue toencounter increased costs and inconvenience. While previous effortsin this direction were undertaken without success under the ThirdHighway Project (Loan 1376-MA), the problem is now being viewed by theGovernment with more concern, and despite continued resistance bythose affected economically, further efforts to control overloadedtrucks throughout Malaysia, including Sabah and Sarawak, are beingmounted under the on-going, Bank-financed Highway Rehabilitation andImprovement Project (Loan 3145-MA), and by other means.

(d) The major training efforts mounted under this project in both Sabahand Sararak generally achieved their objectives and can be consideredto have been successful. Hovever, now that the consultants employedhave completed their work and have left, the enduring effect of theseefforts, and of the funds that were expended, will depend on theextent to which the Government follows up, providing the personnel andbudgetary resources to continue the programs established. Particularlyin Sarawak, the outlook is not bright due to a continued lack ofallocated funds and shortages of qualified personnel. In the future,during appraisal and loan negotiations, more attention should be paidto ascertaining whether the government really has a serious

JJ

- 21 -

comitment, not only to the establishment of a training program, butalso to its long-term continuation as a permanent facet of theoperations of the relevant agencies, considering the budgetaryimplications involved. Such considerations should be specificallyreflected in future loan agreements.

8. SZUSTAINABILIY4E&NING ISSUES_-

8.1 Road maintenance in both Sabah and Sarawak presents a continuing anddifficult problea which seriously affects the sustainability of road investments.Despite the improvements made to the maintenance organization and increasedmaintenance capability of both states through this and previous projects (theBank-financed Third Highway Project, Loan 1376-HA, for example) andnotwithstanding the increased budgetary allocations provided by both federal andstate governments for maintenance in recent years, the continued lack ofenforcement by the responsible agencies of the laws and regulations relating toallowable axle loads on public roads by logging interests is continuing to causethe accelerated deterioration of roads in both states.

8.2 This situation, exacerbated by a shortage of trained staff and poorefficiency regarding the use of maintenance equipment, may require that many ofthe roads will need to be periodically upgraded to a maintainable condition, ashas been the case in the past. Although the authorization for positions andstaff for the newly created maintenance and training organizations was effective,filling these positions proved difficult as staff were attracted to better payingpositions in the private sector. Some relief did come, however, from personneltransfers. In order that the progress made in improving maintenance capabilitybe sustained, the Government will need to provide sufficient budgetary zesourcesfor maintenance operations and provide adequate numbers of qualified personnelto plan, direct and perform necessary activities, including authorization of fullstaffing of the maintenance and training organizations. Further, in order forimproved maintenance efforts to be effective in providing satisfactory roadconditions for the traveling public, the Government will need to take the actionsnecessary to provide proper control of axle loadings and truck sizes so thatexcessive damage to the roads due to overloaded and oversize trucks is prevented.

8.3 In terms of the enforcement of axle load limits, the one loan covenantwhich was only partially complied with concerned "measures to prohibit loggingtrucks exceeding the legal axle limits from using the project trunk roads inSabah,,. Several successful measures to improve axle load control have been orare being taken, including repair and rehabilitation of the six weighbridges thathad been obtained and installed under the Third Highway Project (Loan 1376-MA)and had become inoperable due to lack of maintenance, neglect and vandalism; andthe provision of five additional veighbridge installations under the or-goingHighway Rehabilitation and Improvement Project (Loan 3145-MA). In addition,seven checkpoint facilities were constructed at various critical locations inSabah and two were fully operational 24 hours a day. Weighbridges were notinitially available at these facilities, although the Bank did indicate itswillingness to finance the rehabilitation and construction of new weighbridgeswith surplus funds from the Loan. The Bank suggested 24 hour enforcement for allthe seven stations until such time as laws on the importation of heavy vehicles,

- 22 -

or the introduction of fiscal measures to discourage the use of inappropriatevehicles (those with insufficient axles to carry their load within the legallimits) was enacted. Nevertheless, there is still a need to revise the law inorder to enable the use of portable weighbridges for enforcement.

8.4 For Sarawak, three veighbridge installations are being provided underthe Bank's Highway Rehabilitation and Improvement Project (Loe.. 3145-HA). Whenthese weighbridges become operational, it will be possible to begin enforcing thelaw and regulations more strictly regarding restrictions on the -gross weight andaxle loads of vehicles. It is necessary, as well, to revise the current law inorder to enable the use of portable weighbridges for enforcement.

9. B ]N

9.1 Bank performance was good throughout the project cycle but perhapsmost important during identification and preparation. The Bank did provide acontinuity of involvement throughout implementation, with minimum staff changes.Supervision was regular and staffed with appropriate personnel. The Bank urgedthe Government early on to take strong action regarding the failure of the roadcontractors in Sabah to properly pursue the execution of the work. TheGovernment's unwillingness to act expeditiously, while perhaps understandable,was a major factor in producing the project's. delays and cost overruns.

10. BORROwM PER CE

10.1 Except for the long delay in providing needed budgetary resources, theBorrower Is performance was generally good throughout project preparation andimplementation. The staff of the SPWDs for both states accelerated the processof project preparatian by readily providing the information requested andcontinued to show enthusiasm during project implementation. Compliance with LoanCovenants was generally good, and the rapidly growing technical capabilities andexperience of the SPUDs were demonstrated zany times during project execution.

10.2 The Borrower, however, was unwilling to take early action againstcontractors that did not show sufficient progress on the road work contracts inSabah, instead trying in several ways to assist the contractors to meet theirfinAncial and scheduling obligations. This understandable reluctancenevertheless contributed to the delays and cost increases that were experienced.In retrospect, the Government would have been better served by terminating thecontracts of the worst offenders early and appointed more capable contracto-z tocomplete the work, as it finally did in one case after the contractor abandonedthe site.

11. PROJECT RELATIONSHIPS

11.1 The good working relationship developed between the Federal PWD andthe Sabah SPwD and the Bank in the course of previous Bank-supported projectscontinued under this Project, and facilitated project preparation and

23 -

implementation. A similar excellent working relationship between the SaravakSPUD and the Bank was established during the course of implementation of thisProject.

Consulting Services

11.2 Consultants were engaged under the project to: (a) carry outfeasibility studies, designs and construction supervision; (b) assess roadmaintenance organizations; (c) undertake staff training; and (A) undertake a.Sabah-Sarawak Road Transport Reviev and a National Ports Study. Although therewere delays in selection and contract negotiation, the consultants performed wellin project implementation and maintained good working relation,ships with theGovernment agencies and the Bank.

Contractors/Sumliers

11.3 Project civil works contractors in Sarawak and equipment suppliers inboth states, who were both local and foreign, generally performed satisfactorilyand delivered equipment on time. Major difficulties were experienced with thecivil works contractors (except for one) in Sabah which are describe4 elsewherein this Report.

12. PROWECT DOCUMENTATION AND DATA

12.1 The covenants contained in the Loan Agreement were reasonable and theBorrower generally complied with them. In addition, the staff appraisal reportprovided a useful reference framework during project implementa ton. Projectdocumentation by the two state SPUDs was generally adequate and the availabilityof data for project monitoring was, in general, satisfactory. Bank projectfiles, Bank supervision reports and the progress reports received from the twoSPUDs provided useful information and data for the preparation of this Report.

12.2 The fact that project components were implemented by three differentgovernment agencies without any central control and reporting authority createddifficulties in data gathering and in monitoring the overall project.Coordination of efforts by a central authority would have improved the situation.

.4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~O

i L3

- 25

Page 2

ihe various aspecs of the projec Malter wkhc rquired the urgtattention of the govcrnment were actively discussed and dec6ion expeditiouslyreamhed and g1 ivw whici othemi%c would not how been. posmie becau cfburcuuatic pscduru.

BdikP BcI ane aa - :

For various reson. all the twxuctkion contracts fell behind m-hedule.Although thr wem differnces of opnion betwixun the Hank and the

Borrower on thc maUer of temination of contacis semingly du- to ihepoor performance of the contractors at thc time. theelose rap pon asd ekoie

co-labbwion belween lbe Hank and The Borower and a clear undenAandingof the problens at hand prevailcd in tdie *nd. All projecs witis sc cwcpe ionof 1acka Ill wv completd lbv the original contraoru Package HI L%

now substatiall completd.

Lbu IAared

Scktiou of Countracton

His for the condruction of onads yoieas w*r invited duringtheecononmical n.enion period. The lowesr tender pnces rem-eidwere all well below the entineers estimates. The economy c rf tecountry stmed to recover during the constmrution period. Thcprices of mantalu and other operational *; nIb navc thus

eacoild. As n reuuh all conuaclos were ntxisted to incurlhcuw financial koes and had cash flu% problm. lbc praddl

of awading caniract to the owt!u1 bnir an the Nl.rngth of

past performance and rcputmaion should be seriowsiv reviewed.

lbe tender price should be evaluated and thc experienem nadJamliarity of the cvatractir with the cliawtic condiion. wida thc

logtic of the projets and with the: locl conditioi, laiding

aovaibility or i urkeus and machinesr and paus should alsobe tae into id .

- 26 -

Pagr? 3

2 jpyatd Igsl don

Proper design with adequatc burvey information .nd soil

invation is vezY importnt for the well-bring and .niouthinplBensitation of the construction phasb of the project. Rushing

through the dein phase withoul adequate infonnation in orderto mcet a date-line will lead to inaccurcies in desip and

inaccuracv in the a_ tsmet of the vrious lills -of Q)uantwies inthd maaking up of thc Tcnder Document. As a dirtcoNsequcnc. it lwdb to a lot of contractual issue wbich are

dtrinmental to the project It leads to dcbzy and to escatlion ofprocct cLos. Packagt% Al. tY. 131 and fZ .arc obvious mmplsof inadoquacies at the in4iatSion and desin stage. C-uanhitics

of ccrtain items uwr- grosly undcr-cstimnted. In th- rouic of

copnstructiozi. designs of slocs and embanlkents had to hc

.-viso wimh additional land to ki- acquired to fit. Thr;is uscd

in"vuent delay and dismupion. tnder-design of Thc ixvmcnt

,urfwce coupled with overnaMing now nrsulk in pavrmcnt di'ircss

anmd prcmaure failure.

Since the compleio of the pro jcts. there has been an upsurpg inricvultural actMties on land fronting the roads. Therm hms also hbras a

maked inase in inter-districi vehicular traffic especially during sc6&ooIhoHday seauons. Ile completed all-weather roads certaimly provide .-a :hcjcratenative means of trawl between towns. The sole dependani on ;airtinsport within Sabah can be said to be ower. The completion if theseifra-szructurc has undouhledly led to more socia inteaction amxng Thecommunitios and bring about a clear awrrncs of wbat gors *n in othertowns. In a sense, it helps to promote internal tourirm within The Statc. Iicnrlainlv goxs towards facilitating the transporn of local produce I1 the-mActk. COne tbinS that mwst be cmphasiixd is that. hand in hand with ihtcomphtion of these infraitructural fcltis theen ast also bc a conetcdcfTort and a detcrmined will towards enforcement on ovrloading on theroads without which the roads wiD not perform to the purpose orignallyintended.

- 27 -

PART III. 1TAzIgIL..ImBM&=

_ 28 _

Tabil IPage 1

S_A SARAWA _11X 29-

Table 1: RELATED BANK LOANS

LOAN 1TmLE PURPOSE -UMAL ---s C. . E;

S.b Peh To impo_ ft port Scilitie to serm 1971 Comtd PPAR No. 1244(LN 774-MA) t m tonmy of the Stat of isuud 07176.

Makyan Railwy To fian 1972-73 pid of Malaya 1972 Completed PPAR No. 2748Plroec Raiwas 1971-75 DecopmI Mm ised 1179.aN 799-MA) and equipunnt ad wodrk to

_beeuit from th us of diesel

Kaunipur To impwvea e to Koala Lunpur 1973 Completed PPAR No. 2573Urb. Th_pmt fiomt do acet of Peoahg issmd 06/79.(LW 851-MA) Jy. .

Secod Higway To impwnve ad upd the capacity of 1974 Complted PPAk No. 573Projc she ealhing mum rou non tRhe Wed issoed 09/84.aL 931-MA) cant of Mlaysia, Rout I by

co.dmcting two sections - a) IL toSerx=lu nd b) 1Dh Caves to RoweL

Seonod 11: To inew efficien use of the 1976 Compltd PPAR No. 5424Lumpu Url exist ad ploed _Pt fcilities issued 01/85.Tumpot Ihiug policy. trac _g(LN 1214-MA) uu. and now oand construction,

and to initiate a daerp.ugr- aqutse mu upgrading and

aites and svies delopnuL

Tzd Highway To suppot Government's povey 1977 Copletd PPAR No. 7303Piect r by p issued 06/88.CLN 13764M) iqved _=pmf i,pmvmy

u~~~~ra unuyta_Xd=cio d _iumm nSbL

- 29-

Page 2

LOAN TitE=- PURPOSE , ISCAL SrAC.lJS COMMNT

Second Sabah Ports To rebabilitate and expad the port 1978 Compled PCR No. 6110Project faiilities at Tawra, by repairing th imed 03/86.(LN 1580-MA) exsing quy ad providng new berths

and bwkup facilities toicL Ae portcapcity. he project also simd atdeveloping the instiutical stength ofthe Sabah Port Authority by &cussingon operations and trining.

Port Kelag To establish a dialogue with the 1986 Completd PCR No. 12037(LN 2686-MA & govmt on improving the issued 06193LN 2687-MA) opeatios at Port Keang specificaUy

and in the maritme sctor in Malaysiain geneal and to construct aconvile caergena cargoberth at the North Port.

HYighwy To assist te govenment to achve its 1990 P ct d Cblsing Date isRehabilitaio & goals fir the highway sector as execution. 0613019S.

nmprovement articulatd in the Fift Maaysia(LN 3145-MA) Development Plan. ie.. the

p reservatin and i cmvement of theexisting federal highway network sothat it can safely and adeately caterto rapidly increasing taffic demnd. __.__ ._. __

MALAYSIASABAH SARAWAK ROADS PROJECT ILOAN 2291.MA)

PROJCr COMMETION REPORT

Table 2: USE OP BANK RESOURCES

2A: Bank Stafr/Consuta Inpubs(Staff Weeks)

PROJECT | PRE FY81 FY82 PY83 FY84 FY85 FY86 FY87 FY88 Y9 FY90 FY91 FY92 FY93 TOTALCYCLE m lY81

Praration 6.6 12.7 25.5 3.6 48.4

Appisal 39.4 39.4

Negoiatlons 4.5 =_____ 4.5

LoanPmOCSing .6 1.3 1.6 8.1 11.6

Supervsion 6.8 7.3 10.6 5.8 14.2 10.7 10.5 7.5 6.0 2.5 80.6 0

Proj. CompIdion _ _

Total 7.1 14.0 27.1 55.6 6.8 7.3 10.6 5.8 14.2 10.7 10.5 7.5 6.0 2.7 185.8

NOTE: AU figum anro unded.

E~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1

- 31_

TaMb 2: USE OF BANK R2SOURCES (continued

23: Bankiou

TYPE OF MISSION OMSSON DAYS IN SrAPF PERFORMNCE MISSIONDATES FED RANG REPOTS

Fuui Meando Inl Project Fie

Ikdeniheadaa 02I32 19 E. HE ___________

Prepuinuion 05182 5 E, TE

10182 30 E. HE._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ST E. R TA _ _ _ _ _ _ _ _

Pob*AppmsI 03/ 14 E. HE

5Wi 1 01 2 TB, EN 1 03/06/4

Supezvisiom2 01/3 5 TB. HE 2 03115/85

Supervision 3 07/35 7 HE 2 07119/85

SupervisionS 04116 7 HE 2 061031/6

SupavuocS 0217 11 TB. HE 2 CW2687

Suevso6 11/87 14 TE. HE 2 01/06133

Supervision 7 06/3 14 TE. HE 2 07/03/33

Supevisionp 1 3= 14 HE 2 12116/33

Surisio 9 06/3 14 HE 2 0029

Supevision 10 10111 14 HE 2 12101139

Suprvion 11 0910 7 TE, HE 2 lO126m90

Supervisaon 12 10/91 7 HE 2 10/29/91

PCR Om_ 2 7 HE - 06113/92

Lg: e =Bono=i tB = Tn t Eomis EN - r. HE ighw"y Egineer.se - Saff Tning Expkt, rA - Regioal Tran Advisor

_ 32 -

SAB&I SARtAWAK ROADS PROJECr dOAN 2291-MA)

Table 3: STATUS OF LEGAL COVENANTS

Section Subject 'Staus

Section 3.06 The Bo arwer to ae or caue to be taen Party complied with Seval successfidal ncssac y minu1_es to proibt loggng memue hae ben take and othr atruckeceeding te legal axle imts frm beig prepared. Geneaslly overoadig ofusing the Poect trn m ods in SabL tucks is decdining due to imprved

enforcement but remains a prblm Sixweighbridges promided uder te ThirdHighway Project (LAn 1376-MA) whichhad become ioperble hv been opertonaL Offender are chargd withbreakig the law. In addiio guidelinesregarding restrictos for e gros wightand axle loads of vehicles asued inaccornce with th Rcod Trnsport Act of1997) hav made en&=inent ease. nheis. however, a need to revise the law inorder to enable the use of portbleweighbridges for enfoirment.

Section 3.07 The Borrower to easure or cae to ensure Geaeally complied witL However, somethat the nght-of-way acquisition required for delay due to difficulty in completing landhe Sabah rod ipovemes is completed acquistic.

before constrction cont awan&

Sectn 3.08 lle Borrwer to ensure the completioa of Comnplied with. Segma' Brdge wascontuctio of the Kinabatangan ad Segma completee in August 1989 and thebridges by Daemuber 31, 1987. lGnbtangan Bridge in June 1990.

Sectio 4.02 (e) Te Bonower to mintin recods ad Complied with, bit later tn the time frameaccon d hawe its accounts and fincial given.stateme u nd the stemet of epnditure(SOE) audited annually and furnh to theBak not lae tmn nine months afker theend of etch fiscal year, certified copis ofits financ stments ad aud report,iwcudng a sepae opiio as to whetherthe proceds of the Lan mad avaiable toit ad withdrawn from the Loa Accout onthe basis of SOEB hve been used fbr thepupoe for which tiey were povided.

-33 -

SAUA OM A T(ANM-A

e~~~~" RE T

CUMM112fve

FY Semester Apprata Actmal Actua as Actual asEnding Esdte Amount % of Appraisal % of Revised

Emate Lo Amo n'

1984 12M1/83 1.00 .22 22.0 % 0.2%06/30184 9.00 .22 2.4 % 0.2 %

1985 12/34 16.50 .22 1.3 % 0.2 %06130/85 26.00 .22 0.8 % 0.2%

1986 11M/85 36.00 .22 0.6 % 0.2 %06/30186 47.00 .22 0.5 % 0.2 %

1987 12/31/86 57.00 2.05 3.6 % 2.4 %06/30/87 67.00 7.71 11.5 % 14.8 %

1988 12131/87 73.00 13.27 18.2 % 22.9 %06130188 79.00 18.76 23.7 % 29.3 %

1989 12/31/88 83.00 21M 26.0 % 31.7 %06130/89 86.22 25.63 29.7 % 36.0 %

1990 12131/89 29.98 34.8 % 42.1%06130/0 33.9 39.4 % 47.7 %

1991 12/31/90 38.08 44.2 % 53.5%06/30/91 50.72 58.8 % 71.2 %

1992 12/31/91 58.19 67.5 % 81.7 %06/30/92 67.86 78.7 % 95.3 %

1993 12131/92 70.49 81.8 % 100.0 %

Closing Date: 06/30/92Fmal DiL*uemmn 10/28192

NOTE:'Refbt. Cancefatiom oUSS15 Mil. . 1124/7 ad US$73494.82 an IWU/Q

MALAYSIASABAH SARAWAK BQADS PROJEClT ILOAN 2291 -MAI

PROJECT COMPLETION REPORT

Table S: FINANCING PLAN - APPRAISALVS. ACTUAL(US$ Million)

,____________ APPRAISAL ACTUALAgency Local Forelgn Total Share Agency Local Foreign Total Share

Government 61.90 0.00 61.90 41.79% Government 54.72 0.00 54.72 43.70%

Bank Loan (Original) 0.00 86.22Cancellatlon 1/24/87 0.00 115.00)Cancellation 10128192 0.00 (0.73)

Bank Loan 0.00 86.22 86.22 58.21 % i3ank Loan (Finall 0.00 70.49 70.49 58.30%

Total 61.90 86.22 148.12 100.00% otal 54.72 70.49 125.21 100.00%

Note:Exchange Rate used: US$1 - M42.60

tfil z WI jji Z ij^ji pf p. " fh HP-"PFPF bIz

tllltii i II~ I 1 .l11 Xlsttg1f1 1Xg

|~~~~ ~ | g i .l[ }t " || 0 e ~ ! gs sl;s ^16Nue | H52 l| ;|ii 1Sg 12l ¢| lSa

SARM4 SARAWAK Amoas un@ci lOAM 2281;A

eMOT caTUM POOIT

lVabI. 7: Dtaied Prolct Costs for Sab.h Comonant Ifftooa Mda1alab

Fod E d CR4 - "^ S ~~~~~~~~~~~~~~AdMS flo as S d

hpdqe t | ~~~~~~~~~F |W Tdol Am; LOW F

1. kS _

a bdoiTiwRn Z Z I 25651MBU 4hJE ! 23 _0 2_2 _ _1_._ ._

tL wd*&TdOdROMadag 23155 21717459 I..2 34 M .11@ 2mana ul_O Rou.Um di P I s7s.0 sIs c o4 s ts

Ld tdD mu4d.an n Road PcI 92 _2s.s21.202.27 14.7 7tsm7.29 22.2_O X#4.s 120L L9Coralmln 6 al: i .ig .m.n t.e.arom 161.f.L oo. 11i0Io.0h 5aaI30..05 o .ni 1 22J-321J..0 1. 36.12% __ ._

o M 4mm I 1.6ma. I *.200.00ao Ij.jW.OJ3 1 4J j.Mjno 18.216.S1aol .700.042 J1 I2.3.54 n 15.12% 15 In,n Roods S4wad: I 3AM1 O M I0l.2aoO coaln001I M.M.0 I51,5D4951 1o ,M14s4.Z Eo.M 1 245,2 L J 3. J9 124W t 0 sn

Towomefow Raw 10001.13~~~~~~0,57ILO10 ,405.321 32 000 10.465.321.32 89041la-ad d 1 s1_RoS PAM t.30.436 25 1712.602346 OW 17 .I.2&44 W 36

fi°Rmd .__1 | a20 _ P.IIJ 1 If doao 1158131175 li |§ ts

BO&Ud tnt_SamC D 21.WlMQW DODO 3I8O350D. s2005 41-924.Ma5u oM 41.11M24 1,u6 Uis a0

u Tmm R4f" Rod 84,2U59 1,1 13.01300 00 I.18tn.as

lOW bhdiOi-edcl pRc |2,372,57B50 23,M15153 0oe 2.987153

Abn _e m _ _o o 721,240,no000 2,.00000 2,M4,6924 2.1270A.2 @ol 2.160.4627 mr.41d 1020.28

T.*od.l RdhO o 00 30.00000 12,ol 210=00000 11 17.065.231.44@1 240.121 | 5z.Qss III 515151u0 1001ffiA 172 J,A

zcm& ,g sw* 12406000.D 2.9CtDCO 4,1440D0=00 2,154SN,t.00| 2,826,70m.46 | QOO IIAIW.46 |33 IM| 0.O

Liund Wc Taeo,400a 32%0=a00 4.00anoMW | 0O co aoeX coot |QOO%

.P cFt 000 4W.00,000 400,000 | 22.96400 1| 25.01691 107,12M | %aow|0 , 156.24% 100L01

TrrdFdmt C.40.do 5.220.CCOO 1.620.0W 00D &JO7.e39ao a595.eogo4 50,0 o wl-1zCI l,s- 1 5311sl es4n

Toldtal Cos h 'is a 91 134 I25.1,AOMQD 224L32qe0WeW 1161225176f44 244,4s5iu A31 114181.0 I 20s2U1S,7 13 m2161 Im4a

ba: P.W.Q slh am 1AonV I 12.88Mt - pd _ aWw#ftiasSA.

ii P*isiRWATI o If6em bdwkiasAdi u*daW Iubdw.so

Vm.ami k m my m .a

MALASVIAsAAHI SARAWAK ROADS PROJECT . ILOAN 2221a MAI

PROJECT COMPLETION REPORT

Tabds 9: Protect Imnlementatlion Schedule - Sabah Comnonant

Plefu Component cenltScloietswdlent _miNlaully lid lasSeSp CoSCC Awwd Eaoelmng S Work CGmn$ee of Watt- - la~~~~~~~~~~~~~~~~~~~~~~~cti P64d AW fpeea SteeW I apaed Asked Emspeam

I CklW4cia

SwWdu&nvTakp Read PacikeAl POaewaoCeepaatlen KtaKugw Oit lle Oct 10l3 May 1056 Feb 1114 Aal 111O Ap 1614 0.. lil. Ot. tllo

Smdeten.TepWd Pals Pectga Al2 Oae." Caiatlen FeteI Oatiles Oct 1113 May logl Feb 1114 PLQ 1tl Aft 114 Jon sues hea tulLtadaatuluidabmnRed Ptaeltt it ChdesyaPmammn&S*ldJ sm ne Oct ill Oct tES3 MayII1$. Feb 1114 Aaq 1llS Apr 1114 Tutnud OnU S?J2

Lee f. Ent. Sin Sld. JV OdadyVal

tahadOetu.luaienmRed PachaltP n u(M CapwatldnlR. JyaJstl1 Ac 1til NA Dec BuJ0 NA Jot tIol NIA Saue 1t9i WA

Litad OaewSuidehm Reed P waca SI HHeaddIHawbu a ntweatS Dev. Ce. ot less Oct 1til May 1196 Fab 1114 AM 1@06 AP 1134 Ac 1i0 nt 1Il?LtU. PantI

TowelMlamcidR CtReadPtiba Jnt IllS Jth 1114 Oct tIoS Oct 1114 New Iola 0S 1014 Fob llSS On tllsiNM Gusty Sin. EM. * IV PdtEGawSwi

tahed OcateSakpit RIad Odt tlthawe tlMIdn. ht. plSadtail Imp till Oct tI 2 J IS Aoop lAt Ill 4E lSoll Jun aISs Jon tI*J Jun I 1a

olen"eeh need Aheomr clienhlttlwst3. ISalSen n On ligo id tIl lab IllJ Dec tllg May 065? Feb tlea Jtn tilt Oec lo?l

2 luimint Ted. mid MmG i.

VuIe.a LnSSh. ole.Pddedrti sotp tlns WA Ocet 1leS NA Dm_ 3 N/WA hllOc NIA

i, ldle & Tecfcd Aiseietsncet Stiedbhpw Traean* KIenwtav Int idNlWM leN AM tlos tISS D ScIloo Oct 11SJ Jn ISle Jmn 1I14 Ntow D Dee Ila?

hi maclden with le*Seu Sella Paeed*nSa SW. SM, PSlay

t1 lnw. Dae lea AV. Aem Read. JSaiNs K~tatflMenaeeNw NtanpiV . . ApSep El JSn 114 Aq tIlJ JSn 1014 Juat tIl ON tIll

tl Swbn G~~~~~~CCS Sin Slid. Pddeydautitte. lewmevl.knesof BW.rAayom

tI Tre*Raede: MktNtit,t ifstS. fIddywool JuS tlls Sep 1tES JeA lo Jone 1ti4 Sep tisl pt 1144 Isa. tIll Mw 1tllaSa&kn.Tahle Need At & Al hi Gmededan with Palte rFemS temnean_

erSudetnrt. Octal Reed St &2 El LW. nitkAN .no atsLitane teimpon IATI

2I ApecLusAe Seem Sedmi S. 11. iditrdT Marsl Octlt eteild Swew ssn eut NMAI Sdn.6iC.UhJdeatil Oct 66 J N til eCt 1J44 ew I ti sDe 1354 Ac 1tl l Sm SO?Lelted Oattetulst Read KastpwdeseN eni OATeT SI GIMalsay OctJ4 t.1 lab itS? Maiy lv Sqtoll Jut tIlls APe tlt d lSi?le$Nlangeh eesd OCS Sin. 15. SIMauarelvI Dec tless Mm JeS? Clom11416, May66 loo aFb tEEs AO tlt J teis

clownmAearaUetmMIpAdSR trtmaIofP*AM NSA NSA NSA WA An tIsla JtEINS Oatilto Vntloo_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _r m_ Deweleennar Sarna tl

SWAMI ~ ~ ~ ~ ~ e VMS"Z -h

beam W -mum sCdtte esnt4 mmm11 F. memiididuid

MALAYSIASABAH SARAWAK ROADS PROJECT iLOAN 2291-MAM

PROJECT COMPLETION REPORT

Table 9: PROJECT IMPLEMENTATION SCHEDULE - SARAWAK COMPONENT

Project Component Contractor/Consultant Beginning of Work Completion of Workand Nationality Plinned Actual Planned Actual

_I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- - n _ - | -- --

Sarawak SPWD TralninoStage 1: Prep. Seivices Foreign & Local Joint Venture /1 Jan 1984 Jan 1987 Dec 1984 Nov 1987Construction of Training Center Perunding Utama (Malaysian) Jan 1984 Sept 1988 Dec 1985 Mar 1990Recrit Local Instructors /2 Jan 1985 N/A Dec 1985 N/A wFellowships Jun 1985 Jun 1988 Dec 1987 Dec 1988Procurement of Equipment Vartous local and forelgn sources Mar 1983 Sept 1987 Dec 1985 Jun 1992Stage 2: Tralning Services Foreign & Local Joint Venture /1 Jan 1985 Jan 1988 Dec 1987 Dec 1992

Sarawak Road MaintenanceConsultant Services Forelgn & Local Joint Venture /1 Jun 1984 Jun 1987 Jun 1987 Jun 1990Buildings & Land Development Jee Sung Shin Construction and Jan 1984 Sept 1991 Dec 1985 Jun 1992

Hap Lick Constructilon (Malayslan)Procurement of Equipment Varlous local and foreign sources Sept 1984 Sept 1987 Jun 1986 Jun 1992

Saurce: SPWD SarawakNOTES:It DorschConsult (German) In assoclallon vth Delauw Cather Intemaaional Ltd. (U.S.) and Perunding Utama (Malayslan)21 Nat Implemented

- 39 -

Tag 10

SABAHI SARAWAK ROADS PROI aSOAN 2291-MA)- R0r CObMPLE=7N RPR

lable 10: STUDJES AND TRAINING

Studies-

Sabah-Sarawa_ _ Rad Ta=rt Review Including FeaibUit Studies on Pdority Proe= in. ak The review was completed in April 1989. The study identfied seven upgrading

projects tauling 294 km with the estmated com of MS3M2 milion (USS112 mion). Thesepmjects were funmd to be eoomialy justified with ElRs ranging between 15 and 36 peret

National Stody:The study was completed in March 1988 and defined principal action andpolicy recommdas. The plans included a sector-wide privatiatio firawork,recommendations for port financial practices and policies, and the roles of specific ports in thedevelopm of an ovenal trsport network

This component was successfully completed durngthe period of Jamnary 1988 hruwgh November1990.

Trafinin Criteion Staff Appraisal R-eport Actual

Total Professimal Inpt 180 man months 136 man monts (106 expatriate, 30local)

Courses to be Develpd a) Engmeeing Course Suiect of ursesby the Consultant b) Mechaics Civil trades 11

c) Equipmet operation Mlechanical trdes 17d) Stordekeping Capetry 3

Dr iversOperators 6AdminstrAton 2

I____________ _________________ Storekeper course 1Number of Trainees 500 per amnm over 3 years of 375 auended for periods rangingAttending implemeation from 4-13 weels.

Overseas Fellowships 1S (10 Instctors, 5 22 (18 Bank-financed, 4 sponsored_ Prfssional Staff) by Danish Government)

- 40 -

Table 10Page 2

Sk

This component was successfilly completed during the period of December 1986 though June1990. A Training Ceer was built in Kuching and two Maintenance Depots were comuctedin Sibu and Samarahar, respecdvely.

Training Criterion Staff Appraisal Report Actual

Total Professional lIput 249 man moths 253 man months

Couse Areas to be a) Road Maitane a) 21 coutesDeveloped by the ManagementConsulnt b) Road Maintenance Work b) & c) coures at TPUs: 394

Methods people trained for a total ofc) Equipment Operation 15.760 trainee days.d) Mechanical Skills d) 27 coursese) Road Construction e) 12 coutses

Tecqest) Maagement t) 6 courses

J_____________ g)Accounting g)2 cours

Number of Trainees 600 per amnm capability 1,55611Attending ._______________________________

Trainee Days 14,755 27,475

Source: SPWD Sabah and SPWD Sarawak, SAR

MALAVOIEAHAII SARAWAK ROAD PROJECT * ILOAN 2291.6MA

PROJECT COMPLETION REPORT

Table 11: Hictiwaw C"nitol and Maintenance Exnanditures(MO MiMonI

11T5. ism io 1 919 1160 1961 1602 165 14 IM6 1M 1161 16 1M60 I I

tas^

lnx*RGG 34.33 30.21 44.30 101s5 lose 10561 me65 16o 6345 49 21 64.15 351 105,36 1 64.15 1416? INS4 7042ReuAI Roo . . I . 41 A4 1S30 4f l.e . . * . . . . .

bAW 343 31 2 .30 V U3D re51 902e 1101 105.10 13f.10 n 6w 52 37 * 4.7s _as _40 U4.ts 1416 13-1 7

F 4, R RWS lOl1 446 11.33 22S4 J1E51 s300 164 4nu U o062 2xx 13S It3S 116.4 MW *3.n u41 1nf saSA01iiCPueuRsds 53$4 4.11 tUX 083 10.24 365? 26.4 6s00 0.1 3.36 3.27 1.n2 23 1.7 11.41 1452 111t4 10.10

mRowf a9 n a.U r.7 a* ss 1 3Sm 44.0D. 4n2 35n25 x 0S a .10 le n S2 n u1' so22_t _226t IL 1.j 40AS,f Gs Al 12113 _ _ 9.00 51.9 UZ26 40ArS 4S49 34.87 6134 _3 tS2t .48 11 I

TGtdel 566? 5113 11017 14064 159.44 2314 0 256 226.10 1311? t17.3 10403 12000 140.25 121.22 14050 304.70 212 1e34 o-

Mahtiuuse Eu.dhe

ROdW 1WkilSE 116 2240 216 3.06 326 ? 3624 43 45 52.00 42.33 530s oe 61s0 $616.15 739.? 1.15 I3 11524 11352S DwWffbod Rha,I fld oM .401 24 4.27 1 MS 91 00 J 2 4fall * 2381 f i I4jJ1 1.J f 3191 01

"ah Total 6l16 20 27.16 30611 3.4 41 U 53I N 57.00 45.62 61.11 61.N U40 705 106 111311 I'd6 11642 I14.1

.lnaTRnAls126I 1406 1.13 1123 ItS9 24.1 7.300 3712 3640 3696 60.50 10140 1s53 67.33 US" lIsAG IOnc 1160Fros"ROS RD..i4l 301 .J .. ... i 8A4M . 3 50i lJoP J3o 1.70. 3.. . 2.02 --- U2

SAW Q 1427 11L14 __H.| 2 g9 340 CH e 4552 l sa 44.40 1 *60I 11220la° ADO l S . 0 0 s t4etO 2N.

feedReld 1.42 4.01 466 1s16 16 10760 1200 ItS5 llS5 2460 36.10 356 3t.40 520 4460 6400 "3so 16 30Rut Reods J.j . .t y 11so l 2ss sl 2..4fl s4a o .j9

sakw A 4H 40l 4 so 116 13l11 4 2 sm Itm4 -a- as9 __m an- L -L fl J 14WTotal - _ s.e6 2121 26.7? 36.74 37.20 5251 6630 di0? 53U1."= 1.63 1360 151.39 1n.n2 In I 0 2026 236.40 32560

_~~~~~~~~~~~~57 144 -1.234 i 1 16 30a it

Ieawdk Taot 254 261.01 43 52.27 4114 6452 7941 n151 60.36 6as 1 15951 16176 161. 1wlESI 13150 24637 2t620 36411

ITOTAL 44441 00 I 2 .11 1 US4 6606 10631 13265 134.1 12.00 I 151.02 224 211 231.3 1 MI31 4046 nl 46stl M ,1_t461^ 11armkLWfNAfoMRp(

an 1 r sea nw 'mnnsmmolt~~~~~~~~~~~~~~~

MALAYSIASABAH SARAWAK ROADS PROJECT (LOAN 2291 -MAI

PROJECT COMPLETION REPORT

Table 12: DIESEL AND GASOLINE PRlCES (1975-19921

Diesel Ga solineEffective Date of Price Premium Rslar

per gallon per liter per gallori per liter per gallon per liter. ~~~~~~~(M$) (M cents) (M$) (M $) (MS) (M S)

Before February 1976 1.00 3.10 2.65February 1976 1.18 3.38 . 3.00 .une 1979 1.20 - 3.48 - 3.10 -

August 1979 1.30 28.6 3.69 0.81 3.35 0.74pril 1980 1.62 35.6 4.04 0.89 3.82 0.84

August 1980 1.80 39.6 4.63 11.02 4.40 0,97

August 1985 53.58 - _September 1986 45.50 - .September 1989 50.58 1.00 . 0.94June 1991 , 65.18 1.11 1.06

pril 1 992 65.18 1.11 . 1.06June 1992 ~ __ 65.18 _ 1.11 - 1.06Sourcs: 1965-1992 Pdc.- Shell Marketing Sdn. Bhd.,Sabah. June 1993.

1975-1980 Prices - Staff Appraisal Report, Highwy Planning Unit, Miniaty of Wofks and UtliHts

MALAYSA

SABAH SARAWAK ROAD PROJECT . (LOAN 2291-MA)

PROJECT COMPLETION REPORT

Table 13: ACTUAL TRAFFIC VOLUMESIVehicles/Day)

Annual Average Daily Traffic (AADT) Traffic Growth Rate(%

_ _ l |~~~~~~~~~ Forecas:, 1992-2002)1985. 186 1987 198811989 19901|1991 Actual (1985-1991)11985 - 1994111995 - 2002

ReconstrUcted Rgads

Sandakan-Tolupid Road /1 541 - 620 543 . 488 1100 17.22% 12.50% 7.50%

Lahad Datu-Sandakan Road /2 633 - 725 774 850 888 6.70% 12.50% 7.50%

Tawau-Merotail Road /3 2141 - - 2169 2913 3113 7.56% .

Lahad Datu-Bakapit Road /4 647 - 874 1036 1453 - 24.90% -

Sapi-Nangoh Road /5 _- - - - -

8oura P.W.D. 8abahNOTES:I1 Biimn JundUon (Ta(up4d Og). Unk AIOI2V Mi 32 Junc$on (Lahad Datu kg). Unk B20131 Nolbh Road Jundcon (Mhrotal og)41 Mle 10 fum Lahad DatuU NotAvuubloe. Trmffleswu nol carld otL

MALAYSIASABAH SARAWAK ROADS PROJEC:T (LOAN 2291-MA)

PROJECT COMPLETION REPORT

Table 14: VEHICLE OPERATING COST SAVINGSIM$ Rinogit)

A. Sandakan - Telupid RoadVehicle Operating Coats VOC Savings

Vehicle Type Without ProJect SAR Estimate Actual SAR Estimate Actual

Private Car 0R16 0.359 0.249 0.257 0.367Pickup 0.942 0.617 0.525 0.325 0.417Jeep 1.164 0.636 0.525 0.428 0.639I Medium Truck z_1.543 0.996 0.709 _ 0.547 0.734

S. Lahad Datu - Sandakan Road _

.I. . _ _ Vehicle Operating Coa ts VOC SavinasVehicle Type Without Project SAR Estimate Actual SAR Estimate Actual

Private Car 0.597 0.367 0.249 0.240 0.348Pickup 0.879 0.615 0.525 0.264 0.354Jeep 1,093 0.635 0.525 0.458 0.568iMedium Truck 1 1.496 0.97 1 0.709 0.525 0.787