The World Bank

IOR OFFICIAL USE ONLY

Report No.8373

PROJECT COMPLETION REPORT

UNION OF MYANMAR

CONSTRUCTION INDUSTRY PROJECT(CREDIT 1253-BA)

FEBRUARY 12, 1990

Infrastructure DivisionCountry Department IIAsia Region

This document bas a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Undon of MyanmarC<nstton Industry Project - Credit 1253-BA

CURRBNC Q IlVII

CurrenC Unit -Kyat (K)

US$1 = K6.87 (at completion)USS1 = EK72 (at appraisal)

S-YSI O)F WSGH^ AND MEASURM: R-

1 foot (ft) 0 0.305 mees (i)1 mile (ad) - 1609 kilomets (km)I squarefoot(sq ft) u. 0.093 squaieimeters(sq m)1 square mile (sq niA) = 2590 square kilosLetn (sq km)I pound (lb) = 0.453 lgrams (k)I long ton (ton) = 1.016 netric tonnes (tonnes)

ABBREVIATIONS AND ACRONYMS

AWP - Associated Work PogramCC - Consruction CorporationGDP - Gross Domestic ProductGOM - Govemment of MyanarICB - Interational Competitive BiddingIDA - Intenadonal Developnent AssociationMOC - Ministry of ConstrconPWD - Public Works DepartmentSAR - Staff Appraisal ReportUNDP - United Nations Deveopment Prgramvpd - vesdperday

MYANMAR FISCAL YEAR

April 1 to March31

M7

POR OMFCIAL Use ONLYTHE WORLD SANK

Washington. D.C. 20433U.S.A.

Oie Ca OuetcwCeawitOptatmm IvtAuamn

February 12, 1990

IEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report -an Union of Myanmar ConstructionIndustry ProJect (Credit 1253-BA)

Attached, for information, is a copy of a report entitled "ProjectCompletion Report on Union of Nyanmar Construction Industry Project (Credit1253-BA)" prepared by the Asia Regional Office. No audit of this projecthas been made by the Operations Evaluation Department at this time.

Attachment

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

FOR OMCIAL Use ONLY

UNO OF MXANMAR

TOIRU,CTION Sy PROICF - CREDIT 1253.3kA

,PROlBCT COMPL1UONRBRT

Table of Contents

Preface ............................ iEvaluation Summary ........ ..... ._.ii

1. Pr e I1. Proec Identit ............................................... IL2. Background ........................... 13. Project Objectives and Description ................ ......... 24. P Iect)eslgnandOrnization ..................... . . 35. Projectd ....................e.. ... . 46. Project Results ................. ... . 57. Prject SustainabiltY . ................--------------.. 68. IDA Perfmniance ....... 69. orrerprrne ........... .. 710. Project Relationsidp ........................ . . 711. Consulting Services -ndContractors......... ............ 712. PJmect Pocnenton and Data ........................ . . 7

II. EartfI - The Boowees Project Completion Rgpor. 8

If P m - Summy of Statistkal DataTable 1: Related Bank Loans and/or Credits .. 28Table 2 Ptoject Timetable . . . 29Table 3A.' Credit Disbursenints . . .30Table 33: DlsbuwsementsbyCdltCed egoyt 30Table 4: Project Implementation ............... . 31Table 5A: Project Costs ... 32Table 53 Pnjwect indacg ... 32Table 6: Project Results . . . ............ 33Table 7: Status of Covenants . . .34Table 8A: Staff Inputs ... 34Tabe 8B: Missions ... 35

This document has a festricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not othefwise be disclosed without World Bank authorization.

-1 -

UKMQN 1E MCM -1T1tUCrONDMUSTKYwRQ=c- CRDt1293-A

Thds 1s the Project Completion Report (PC1V for the Construction Industry Project inMyanmar, for which Credit 1253-BA in the amount of SDR18.0 million (equivalent to apprordmatelyUS$20.0 millon) was approved on May 25, 1982. The credit was clnsed or, June 30,1989, one year behindschdule. Disburseaents under the credit amounted to SDR17.94 million, and the final disbuzsent wasmade on June 28, 1989, at which time SDR 0016 million was canelled.

The PCR was jointly prepared by the Infrastructure Division, Country Department H of theAsia Regional Office (Preface, Evaluation Summary and Parts I and D) and the Borrower (Part II) and Isbased, inter alia, on the Staff Appraisal Report (SAR); the Credit Agreement; supervision reports; theBorrowees own records; comespondence between the International Development Assodation (IDA) and theBorower; and Internal IDA memoranda.

i-II

Qb ~ ~ ~ CbLcfimN oEi

The objective of the Construction Industry Pr%ject was to address sozwe of the issues faing theconsruction industry by strengtning it and developing its capability in the highway sector, to enable it toundertae efficiently the Increasing volume of development work. This was to be acdieved by establishingthree woring units within the Construction Corporation (CC), the largest operator in the Industry, and byproviding technical a,sstance t impnve the plannin and management abiities of CC The majorcomponents of the pr,O-vt were (Part I para 32):

(a) provision of veicles, muecanical equipment and spares for two rehabilitation units andone maintenance unit

(b) provision of workshop equipment and tools to carry out field mainteunace and repairs ard tostrengthen the capacity of base workshops to repair project equipment;

(c) supply of survey, design and office equipment required for the units; and

(d) tehnical assistance to establsh and assist with the operation of the units, to Include theIntroduction of costing, cost control and cost analysis of worts, and imov ent of qualitycontrol and work planning.

The Construction Industry Project was appraised in November/December 1981 and the credit becamefective in September 1982. The IDA Credit (1253-BA) for the project amounted to SDRl8.0 million

(equivalent to appoximately UJS$200 million), all of which was disbursed except for SDR 0.016, whichwas cancelled.

In order to bring about the proposed impents in CC operations, the units to be set up andequipped were to carMy out an Associated Work Program (AWP) of nhabilitation and naintenance workswhich had been demanstrated to be economically viable and which formed part of CCs wrork program (PartI paras 33 to 3.5). The AWP would be financed fom the Goveremnt of Myamnn's (GOM) own resoures.Although the AWP itself was not an integral part of the poect, one of the alms of the project was, bymeans of the AWP, to raise the rate of completion of rehabilitation work to about 25 miles per unit per yearas compared with the then existi rate of about 8 miles per year, and to speed up naintenance work by aprogram of pavnent repair and resealing at a rate of 110 miles per year. Better control of mnateials andwork methods was expected to reduce the rate of pavenent failure frm 10% to 2% per year. 1khrehabitaton work covered 141 miles of the Sittang -Payagy - Toungoo road and the maintenan workcovered 330 Iles of roads in an area to the south of Mandalay.

Sufficient consructional equipment was to be purchased to enable the three units to achieve animproved rate of work, with most of it going to the rehabilitation undts (Pat I pua 3.6). Spares were to bepovided not only for the new equipment, but also for the existing CC fleet that was to woi!c on the projecLThe new fleet was to be maintained as a separate entity so that a history of operating, repair anddepreiation costs could be accumulated to provide better a of outputs and real user costs (Part Ipua 3.7). The workshop equipnent to be provided was intended to supplement that which already existed

in the base workshops. In addition, soils and material testing equipment was to be procured toger withsurvey and design office equipnent, technical literature, small data proessors and some radio equipnent.

The proect went very well tially, with 70% of the bids for equipment bein reoeved by ebNury1983 (Part I paras 5.1 to 55). Therefter, progess slowed because of the length of time (10 months) taken tnevaluate the bids and to award contracts. Instead of being able to take advantage of much of the 1983/84construction season, the equipment was generally not available until the folowing seon, in late 1984.Also, the appointment of consultants was delayed for ten nths for much the same reasons, and they weretherefore unable to contribute any of the intended technical input to the rehabilitation works before thework started.

As the project progressed, several events occurred which made it necssary to rethink some of theproject components. First, increased competition in the intemational market and a strwng dollar, resulted inlow prices for the supply of equipment and a reschedulin of the project works necessitated furierpurchases of equipment in order to improve the rate of working. These were conveniently made using part ofthe savings from the first purchase. Additionally a quantity of additional spare parts were purchased.Secondly, a deterioration in Myarunar's foreign exchange position caused acute shortages of vehicle fuel,lubrcants and bitumen, which were to have been provided by GOM from their own currency resources.US$22 mdllion of the uncommitted balance of the cedit was therefore used to finance the purchase oflubdcants and bitumen. Thirdly, an unexpectedly large increase in traffic volumes on the project roadsresulted in the conclusion that the design of the rehabilitation works was inadequate and would last ordytwo to five years instead of the ten years plnned. IDA therefore attempted, with limited success, topersuade GOM to change the specification for rehabilitation to a structdral layer of naturally occurringgranular mrateria! instead of the 3" layer of penetration macadam that was generally used.

CGOMs reluctance to agree to this change, which would have resulted in a better product, resulted inabout two months delay to the implementation while a compromise was negotiated. Eventually, GOMagreed to construct three trial sections of road using the altemative methods that had been proposed andthese have yielded valuable nformation.

The decision by IDA to relieve GONVs foreign exchange difficulties by amending the creditagment to allow the purchase of additional equipment, lubricants and bitumen, was of great benefit tothe project, which would otherwise have experienced much more serious delays and it i possible that theAWP may not have been completed for lack of bitumen.

The project generally achieved its defind objectives, despite a one-year delay in completion (PatI paras 6.1 to 6.4). Ihe work program was completed by May 31, 1988. The credit dosing date was extendedby one year to December 31,1988 to allow for the delivery of the final orders for materials.

The projects overal goal, of strengening and enlarging the capacty of the Myamar constructionindustry, was achieved and significant improvements were made in work planning and organizationthrough the financal and technical assistance provided by the project, despite the constraint of lImitedfuel supplies. The ognal project implementation schedule would have been adhered to but for the slowprocurw procedures followed by GO1

It is expected that the results of the project will be suswtained as the improvements in qualitycontrol, equipment n_geint and work planning and mana_geme are being used on other CC projects andCC propose to continue to use the project units on other maintenane and rehabilitation work (Part I paras7.1 to 7.3). The establishnent under the project of a computerized database will also have a lasting effecton future contracts.

-iv -

Despite hcing some difficulties, this was a sucessful project. Supervision was well carried out byIDA. The Bo1rwer showed a detination to overcome the difficulties and complete the project.

IDA lerned some valuable ssons (Part I pana 83) on the need for more thrugh projectprepation. The Borrower also learned some usefl lessons (Part I para 9.4) that shozlId be applied tostrmlnirng intenal Govenument procedures and to incorporating more flexibility into future projects.

COSTRUICQWLIu N r

Lr

- ProjectName~ ...... ~ ~Contction sndwtry Proiect

- Credit No1.......... 1253-BA

- RVP UnLi ---------------------------- Asia

- Countty ..... ~-~_Unionof Myannuar

- Sector. ..... .. ~~ . Constnction

- Subsectr_ - Construction lndustry

2. Badkmnd

2.1 .ie ConsTheton r.l fist Public Works Departmt (PWD) in the Union of Myanma wasformed in 1861 to undertake the construction of buildings, roads cnd irription works. Between 1917 and1954, the work of the PWD was split between the National Housing Board, the Depatment of Highways andthe lrigation Depatent. In 1965,22 separate depaents and boards dealing with constuctim work inthe country were amalgamated into the Public Works Corporation, which in 1972 beme the ConstructionCorporation (CC). CC; in the Ministry of Construction (MOC), is the pincipal construction agency of theGovenmet of Myanar (GOM). It is responsible for the monitorit and control of all construction work inthe country and also provides tenu and other assistance to state authorities, cooperatives and pnvateenterprise.

2.2 i. Between 1977 and 1981, the value of ntucdon work carried out inMyan_r w= 1ed from $107 millon to $292 Milion In 1981 the public sector undertook about 85% of thetotal construction work, of which CC, on avage, caried out 75% of road cowtucdon work and over 90% ofroad maintenance

23 Eaors Affgli GQgzIon Work Unike many cuntries, the efectveness of the constructionindustry in Myanwar was not hampered by a shortage of qualfied technical pemsonneL Instead, the nmindeficendes were a lack of minimal equipmt and spares, poor quality suppies and a management systemoperatig without adequate and reliable data. Consruction work was labor itensive because of the shortageof equipment and spares, not because of lage labor surpluses. The countrywde nployment rate, about7% in 1981, tends to vary seasonally with the demand for agriculturl warkers and there wer regions wherelabor was always in short supply. GOM policy towards the constructio inwdustry was therore formuiated toaddress the issue of the deficienes in equipment and management experdse so that economic progress couldbe maintained and valuable nrsources not wasted.

2.4 Jnms In 1981, the cmstruction industry contributed about 2% to the total GDP, which is low,even for dev-loping countries, but the growth rate was a healthy 16%. However, the transport sector ingeneral, and the highway subsector in particular, received low priority. Only about $11 million was spent onroad construction and improvement in 1981, while an inadequate $21.7 million was spent on maintenane. Atthe time of appraisal, roads throughout the country were in a poor state of repair after decades of neglectwhile traffic was increasing in numbers and in vehicle weight as the economy grv at a rate of 6.5% perannum between 1977 and 1981. The adequacy of the existg highway inhatuctue was therefore one of themajor issues facing GOM as polcies were developed to povide the sign tifay larger constrction capacityrequired to satisfy the demand coming from every part of the construction sector.

-2-

3. 2oecdIb L

3.1 The project aimed at addressig sout of the ius faing the consttonindustry by strngthnt it and devekpIn its capability in the high sectr, to enable it to undertakeeffidently the lnaeng vohlme of development work The poject was to be the fht of seve phases inwhich the road opatin of CC, as th aget opeator in the industay, would be strengthened in selectedfield operations byy:

a. estabshig three working undts, two In road rembitation and one in road maintenance,with the necessary equipent, vehides and mmediate worshop failities; and

b. providing technical assiste to iove the work plar and magemet abilites of CCwithin thse units.

Improvement of work planing and managernet would be brought about by Inroducig or strengtheningthe operatons of costng and cost control, cost anluysis and quality contrl in the three units set up under theprojecL It was expected that later phases would attempt to stengten CC as a whole so tht it could operatecompetitively with intemational contractors.

3.2 Descipton of the Project. Ihe project consisted oha. provision of vehicles, mchanical equipment and spares for two rehabiltation units and one

maintenn unit;b. provision of workshop equdpment and tools to cay out field maintenance and repairs and to

strengthen th capadty of base workshops to repair proect equipment;C. supply of survey, design and office equipment requred for the units; andd. tecdmil assistance to establish and assist with the operation of the units, to inlude the

Introduction of costin& cost control and cost analysis of works, and inmprvement of qualitycontrol and work pannn.

33 Assoiated Work Pam (AWP). In order to bring about the prposed impments in rCoperations, the units to be set up and equipped were to cary out an AWP of rehabilitation and maintenanceworks which had bee demonstrited to be econonicaiy viable and which formed part of CCs work program.The AWP would be financed from GOM's own resources Although the AWP itself was not an integal part ofthe project one of the aims of the project was, by means of the AWP, to raise the rate of corw on ofrehabiltation work to about 25 miles per unit per year as cmpared with the then edsting rate of about 8miles per year, and to speed up maitene work by a program of pavement repair and meain at a rate of110 miles per year. Better contrl of mnaterials and work methds was expeced to reduce the rate ofpavement failure from 10% to 2% per year.

3A ReTabilitaton This work was to inrde repair of failed ares, increasg road width,providing extra base, laying penetration nmaadam and awplylng single seal dressing over the entire width ofthe caageway, together with widening bridges, culve and the road embankme to give adequateshoulders on either side. Work was plard on two muteE

a. Payayi - Toungoo Road (115 miles), which is a part of the main route connecting Rangoonand Mardalay and caried a traffic flow of about 800 veIcles per day (vpd), 85% of whichwas trucks; and

b. Payagyi - Sittang (26 mdles), which is the principal route between the Karen and Mon states inthe south and Rangoon and caried a traffic fkw of about 700 vpd, 80% of which was trucks;ths traffic was expected to increase significant with the completdon of two major bridges onthe route south of Sittang.

3.5 ThIaintenan Wo This component was to cover about 330 mibs of roads in an area to the south ofMandalay, which were cuTying an average of 60D -.d, with 65% trucks. The roads were generaly fairlyrrow and had deteriorated or failed because CC haa een unable to carry out the required perodicmaintenanc. It was planned to reduce the backlog of maintenance by cmpleti about 110 ndles per yearover three years, using largely traditional methods improved by the intoduction of quality cntrol and sonemeanical eqpment to obtain higher standards of work

-3-

3S Equpmmt. Sufficet consuctional equpment was to be purdsed to enable the three units toachieve an knproved rate of work, with most of it going to the rehabiitadon units. Spares were to beprvided vnt only for the new eqldpaut,. but also for the adsting CC fleet that was to work on te projectEqulpur -or produc graded aggregates was to be provitad as the niadstone then available was often notsuiae for roadwrk. beas of Infior quality and poor gradiNg.

3.7 Mhe :w Ouat was to be mantain as a separate entity so that a history of operati repair andepredadon cost could be acumuated to provide better of outputs and real user cost. Theworkshop equipnt to be provided was ntened to supplermt that whih alheady existed in the basewokhops so that equip and vehie epairs d be cred out effectvely. Soils and matal testequipnt was proposed to allow field testing and quality control on site, and survey and design officeequFpu-t would allow the undts to operate Indpedently of CC headquarte for survey, design and settingout of the work. Te lterature in the form of standard spedfications and codes of pactice, operatonalhandbooks and workig anumals were to be provided to asist in the revision and modenizing ofspedfations and work methods in the units set up under the project and eventually in CC genraly. Inorder that cost data could be coUlated and analysed quickly and be made available where it was needed, smalldata proessors were to be provided, suitable for use in the field by ineienend staff. To improvecommunications, some radio eqipment was tD be purchased.

4. tI

4.1 The concept of a phased approach to imprving the operational effectiveness of the Myamarconstrction industry, rpresented by CC, was throughly discussed and agreed between IDA and GOM. Apreliminary IDA mission went to Myanmar in January 1981 and this was foUowed by discussions betweenIDA and GOM in May and September of that year, when the scope and main featumes for a project wereageed. It was aceped tiat th strategy of concentrating on the road constuction act!vities of CC andoperating though only a part of the organization without, at that stage, attempting to chang overall GOMand CC polcy, created a limited objective that would have good chances of showing positive results. lteproject was prepared in a hurry, as GOM wanted it quicy, and no formal prepartion missions took place.T}is omission probably resulted in some of the problems that the prject underwent durin Inpleniati,of weak tediclha appisal and lack of apprecation of the Myanmar bureaucratic system. It is arguable thatthe scope of h. poject should have been more ambitious, but little was known, at that ebme, about thecapabiiies of CC and its ability to successfully manage an IDA project Furer, it was r.ot possible to includethe roadworks of the AWP in the project because they would have to have been procured under ICB andGOM was not wling to alow foreign corctors into Myanar to cary out wodrk, whch they consideredCC wu capable of doing suceully. In the liht of experience gaine during the project, when deficienciesin the prcuement sstem caused considerable delay to the pess, the dedsion to liit the objectves of theprject was probably the ght one. Under the circumstnes, t delays that ensued could be contained,whes, with a more complex and ambitious project, they nay have got out of hand.

42 Appra of the project took plce in November/December 1981, when general agree_met wasrached on detas of the pJoject, *e AWP, the scale of equipment and othe resourc to be provided, and theamount of tehidc assistanx eqd In puttig togeher the project work program, use was made of theRoad Sectr bIprovement Study, financed under the UNDP Burma Umbrela Pject and coampleted in 1977and of the Rangoon - Prome Road, Project Preparation Study carried out by CC in 1981. Negotiations tookplace in April 19M2 and a credit for SDR18 million was approved by the Board on May 25,1982.

4.3 The project was well conceived when viewed in the light of the naow focus and Lmited objecdvesthat were necessary becase of GOMs reluctnce to have a full-scale highway propet involving the use ofitnatonal ntracts. The supply of eqpment for road rehabilitaton and maintenance and for the plantworkhops and the provision of teicl assistune to improve the management sidlls of CC addressed thetwo main def of the road constction industry which had been identified befoe appraisaL Becauseof the grwing economy, hireasing road traffic and vast neglect of the road system, the need for acion wasbecomg urgent and the tmdng was appropriate. 's - - was consideable enthusiasm for the prject from allthose involved. Rols and eponities were dearly defined and geally dte projct ran quite smoothly,despite some delays, espeially so in view of the lack of previous experience of implementing IDA projects.

-4-

4A Proet p.qratio suffered frnt two main deficides. Because of the narrow focus of the poectfwhich co_nbtd on providing equpm.rk and tecnul assnce to be applied to Inproving fte outputad puimtan of CC on projects witin their work progrm, not enough attention was given by thapprsl miion to th engineri aspects of the AWP. In pardcular, although the scfcatIons for thework had bum agreed betwe: A. and GOM, It becme dear that a tecicl appraisal wa not red outof the deWl% or of the -Mtaton methods to be used by CC, when viewed in the Sght of the current tateof tteu r=m ad the voume trafdic foeas to use them Alhugh the AWP was not an intl part of thepojet and was being paid for entively by GOMK the cowsultats' terms of referece aled for them to eviewthedesinof thembabitationworkbefothe tof work. Theappraia mission nl dthat Cs constrion methods were outdtfed, but faied to appreciate the true extent of fhwe of the roadfomato and no prvion was Inoported to emure that more modem and appropriate methods of roadrh tion wee toduced frm the oute by cyng out a prop desin study during appial andIdkmifyi the anst appropriate tdtnlog to be adopted. When the consultants, In rpe to their temsof f proposed a design better suited to the conitions found on site, ther advice was not acted upon.mTis had some adverse effect on the prgess of the works (see paras 52 and 53 below).

4.5 The second defidency in project prpaation was the adoption of an implementation schedule thatwas too optimistic. ihe appraisal {ailed to appreciate the slowness of the Myannr bureaucratic nudminery.Mhe thmes alowed for appointing consltants and eviwig and awardit contracts for the procurement ofequipment were too short when viewed in the light of IDAs exper in similar situatons. In the event,delays of about a year occured because of slow prom t implementaton (see para 5.1 below).

5.1 Thw project went very wedl initaly, with 70% of the bids for equipment beg received by Februay193. Thereaft, progess slowed because of the len* of time (10 months) taken to evaluate the bids andobtain the necessary GOM approvals for award of contracts. Instead of bein able to tkde advantage of muchof the 1983/84 anstruction season, the equipment was gnerally not available until the following seasoz, in alate 984. Also, the appointment of consultants to cuy out the technical assistanice components of the projectwas delayed from the planned date of December 1982 to Ocoe1983 for much the same reasons, and theywere therfe unable to contribute any of the intended techntical input to the rehabilitation works before thework sawtec

52 As the prject progressed, several events occurred which made it necessary to rthik some of thepject component First becuse of hreased competition in the intenational equipment market and ast dollar, the prics being obtained for the supply of equipment were wel below the appraisal estimates.is situation was liky to reult in a are unexpended balce on the credit. Frther, in view of the delay to

the prwo caused by te dlow conWct awad procedures, a reschedulin of the project works was caried outwhich shorened the time for cmpetion and necessitated further purdases of equipment in oider to improvethe rate of workig. These could be conveniently made using part of the US$5.7 million savings frm the firstpuPchase Additionally US2.6 mflion of additlonal spare parts were purchased. Secnly, a deteroration inMyanaes foreig exchange position caused acute shortge of veile fuel, lubricns and bitume whichwee to have bet prvidd by GOM from their own cunency resources. US$2.2 milion of the uncommittedbalance of the credit was theefre used to finance the purhase of lubriants and bitumen but the problem offuel s es ned with the project to the end. Thirdly, an un ctdly lae increase in traffic volumeson the prject rds resuted in the condusion that the design of the nrabiltation works was inadequate andwould lst only two to five yea Ismtead of the ten yers planned duing pject design. IDA attempted, withlimited sueos, to perude GOM to change the specfication for rehabilitation to a structural layer ofnaturally ocurit grnular materal instead of the 3" layer of penetration macadam that was generally used,although a granular ovaeay was used on some stretches of the project roads in the later stages. Penerationmaca&m is the traditional surfacng in Myanmar, because it is relvely easy to lay in labor-intensivesituatlons and the workforce is faliar with the echnique, but it uses a lot of bitumen and provides little inthe way of structural stength. As suitable gravel was avaiable close to the road and required less processing,the comsultants showed that costs would not increase despite a tebing of thcmess and an increase in theamount of transport need to bring it to site. The amount of bitumen required would have been greatly

-5-

redued, Wesuldng in a ficant foregn exchange saving to GOM,Iwho were originally fundi e AWP6om tr own resowums

33 Dcuseof the lkelhood of an enbanasin breakup of the nwly ehabtitad road otprjec ended, a decsion t chane the specfication at w exa ct shoud have be made by GOM onpractical ad ecomic grounds. However, on poHlical gounds, such a chage was unaeptble as ftseemed to MOC, who disagreed with the coatns provided by thir consultants, that a ailm hn thelergh bWng ehW atetd and/or a delay In the zompIetior date tight ense It would appew that thepFnject budgto made, was mmutab, bewause, though the total would not haw ed, the inivialcompo_erts would havre qied adjustment.

SA Beause GOM did not agree to this change, which wod have esulted in a better product, about twomonts dday ept into the Impleentation while a compromdw was negodated. IDA expressed itsefreuta to a&roe any furher equipme or matlals contracts untl GOM agreed, as a minimum tocons g three tial sections of road using the altenative ethods that had been proposed, so that, evethough ty would not benefit the on-going pojec, there would be sone point of reference to c ae theperforance of the various rehabilitation nmds in the future. lslme trial sections were acostucted, assuggested, and have yielded valuable infmation, which CC is now using on other projecs So the presrexerted by IDA has yielded some useful results.

5.5 Twhe dedsion by IDA to relieve GOIts foreign exchae difculties by amin the credit ageementto allow the purhase of additional equipment and, more signifiatly, lubriats ad bitumn, was of greatbenefit to the AWP, and therefore to the project itself, which would oherwise have exeieced much moreserious delm and It is possible that the AWP may not have been completed for lack of bitumen. About 28%of the credit proeds were used for this additional procurement.

6. u

6.1 Mm project genaly achieved its dd objectives, despite a onew deiay in complo Thedelay casied by fuel shortes could not have been forseen at appais and were outside the control of CC.However the dday caused by slow procuement procedures could have been allowed for. Most of the workprgram was conpleted by the rvised completion date of March 31,1988, the balce beig completed byMay31, 196. Th credit dosing date was ededed by one year to December31, 1968 to allow for the deliveryOf the fnal orders for matweals, made to use up the balance of the credit funds in response to the foreignecehs}ortge

62 MTe prcecs overall goal, of strengthening and enlarging the capacity of the Myaur onstrcontndusry, was achieved withi th consuction units that were established. Sinficnt Ipoemet was also

acheved in work planin and gazion thOugh the finandal and te a asstance povided by theprojec. More secficaly, the objectives of the pject were to:

a. Incse the rate of toad rehabiltation from 8 to 25 miles per year per undtb. reduc the failure rate from 10% to 2% of pavement area per year,c. complete a maintena progmm, which induded the resealing of 330 miles of road over

tnes years; andd. estaish apprpriate equipment managennt, quality cDntrol and cost control and

accountirg systems;

-6-

63 Ac mn wards the above objectives were as follows:a. the rehbutation rate vared fom l1 to 28 mlw per year per uit and avenged out at about

22 mil udWer the constraint of lidted fuel saule;b a falure rate of less than 2% was acdeved whee a srctural oveday was used and quality

contro prcedur were folowed, but othrwise the rate was up to 5% where td adtonalcostucton medhod of penetration nmcdam was used;

c. the _aineac proam was completed; andd. the equipment na_gement and quality control systems wee establshed, but their

imnplementon in field uts had not been fily completed, whle the cost cntrol andacounting systes were pepaed, but were iarly not fully implemented.

6A The original proj,ect imlementatin schedule was unrealistic only to the extent that the dowplllwunent procedures followed by GOM shoad ve been allowed for. Th ete of the fuel supplyproblem could not have been anticpated at appraisal.

7.

7.1 It is expected at theresults of e project wiU besust as the improWventsIinqualitycontrol,equipment management ard work planning and ageent are being used on oter CC pjet and CCpropose to contie to use the project units on other maintenance and rehabiltation work Also, theestablishmnt under the project of a computerized database of tender documnts and equipmentspedficaions wil have lasting effects on future contracts.

72 Although the cost control and accountig system intoduced by the consultants was of a traditionalfom, CCs experience with it has resulted in the omment that madng more use of existing CC reports andfoms would produce a more successful system, presumably because the staff are more faimliar with them. Itis expected that the new syste, modified if necessary, will continue to be used. The risk here is that CC willfall back into using old and, possibly, inefficient reporting forms and the potentW gains to be made from thenew system wUl be lost. The late awrrival on the project of the consultas costing expert was a disadvantage,as a system had evolved, which it was difficult to change.

73 Depte the fact that a stuctural layer was not eteilvely used for rebablitation work on this proe*,CC has decded, based on their experience on this project, to use moden methods of construction for theirnext project, the upgrding of the continuation northwards from Toungoo - Pyawbwe, and to use a strtallayer where shown to be nceswy.

8.1 IDA's prfomance durin the poject has been mixed. It is dear that the technical aspecs shouldhavbeen blooked at rthlr more dosely during apprisaL The AWP was not an integral part of the projectand therefo the design of the road rehabilitation was not scrutnized as it would normally have been duringappraisaL The resultant use of a thin penetration macadam laye, which impwved riding qualites but didlittle for the strength of the road, was the unfortunate outcome (see para 4A above). Also, the pject

_ w I - mntationschedule was too optimistic in the light of procurement delays that enued from slowprocsIng by the Myanmar bureucratic system (see pan 4.5 above).

82 The project was regularly and adequately supevised and a good relationship was established withGOM, CC and their consultans

83 Thelesss tobe leamed by IDA are:a. bette prpaation of the proet from a tecal aspect would have yielded much bette

results;b. more discussion with the Government and other parties cncened durng the preparation of

the project would also have rielded dividuds; and

-7-

C. appraa miUsions shauld studw bu cutic systheb of the couy to aive at realistiming for vis which InWlveGownu act

9.

9.1 DespIte tm e foingi cunugc antaint that were affeetg Myamnar duw the time of theperOec e DBarrow' denmst a tacom ndable detmnaIon to complete the proect suces y.Wle el foons wewied tou t Myamar nd al poects we affted, this project washford with a kW fuel bwa than ot

9.2 lbe Inal produ that was the caus of th procmewt delays were, under thedt"a s, lrgel uviae It would, ow be to thebnft of fueproe the procedu

coud be tudid ead modi to speed up the pr s without scrifilcing the budtsy control tat wouldstill be remy, by the depation of powes of approval to or levls under previouy estblid overalllmbts of expedtur

93 CoIdeing that this w the fist IDA pjt executed by CC, it perfmed well, although auditedacounts were not provided by the agreed date each year.

9A Thw lesso to be lerned by the Govenent area. a streaml of hemal Gon rview and apval pocedus would gretlybet

hftue p ; andb. the abiity to hcwopoate some element of chne hit an on-gon project, where the product

is caly below standard, would be of great long-tr benefit to the country.

I0L

10.1 Some good relaosp were built up ding the projet and the oopeation afforded to IDA staffby Myani offidals at all levels and by the consultant's staff, were nt butory ctos in makithisprojet mrun as smootly as It did.

1LC

11.1 Ihw consultans employed by CC to cary out the technical asssta comonet of the projectperfonmed wel and applied theslves with paece and retaint to situatio that were often diffiCult and

ustadn& situation that are co.m In similar ountries elsewhe

112 The epme sppe geaylly pefmed well, thWug there wse Itnes of equlipmet beingdelivered that did not onfom to the ageed specifications.

IL mM MdDAm

12.1 Te Credit Agut otamined a few covenas, which were ausonable and which were alcmnplied with, albit somewhat late.

12.2 11e Staff Apil Report povided a reasonabl good ramwork for the mentaion of theprojet, though It should have looked e closely at the tehl aspocs of the pavement desin for theAWP. r1ming we somewhat unrealstic and some of the delays that ensued should have been foreseen.

123 Most of the data rquie for the PCR were availble and no problem have bee e qperiene.

-8-

GoNammo?IN iNxwST PRmaIr-cREDrT im3-m

PFAJET CEPLEI'ION REIPRr

PARr It

1. Project Design and Crganization

1.1 GOB and CC considered that the identification, preparation and appraisal

of the project were reasonably adequate despite unavoidable constraints

experienced in the course of implementation of the project.

1.2 CC.felt that as a result of failure to organize a forrmal

preparation mission. som problems such as a weak technical appraisal and

lack of appreciation of the Buzmese system were encountered during the

the iupleimntation of the project.

1.3 CC also failed to foresee the deficiencies in the procurement

sytem. CC could haw determined apprprate tbdng to be allowed for

the procunrent process in consutation with its e n central store.

At the prp n stage the report was presented in a rush as GOB wanted

it urgently. CC alo faile to refer to its Central Laboratory in considering

ade8uacy of the pavement design before the project went anyfurther.

1.4 GOB on economical grounds was enthusiastic to honour the bank's

appraisal in order to get the project promptly nted as it was

considered to be the first IDA project in Road Sector in Burma and road

rehabilitation work was urgently needed.

1.5 GOB policy was formulated to address the issue of the deficiencies in

equipment and mmnagement expertise so that ecnomic progress could be maintained

and valuable resources are not wasted. Hence lisnited objective was expected

in a short term with a little investment where achievement being through the

inplenetation by CC. A 3-inch thidc Penetration Macadam overlay was adopted

just to reduce the road roughness and rate of failure.

-9-

1.6 we ha expected that this project wu1d strengtten C as a whole

so that it could paticipate in futur international coopetitive biddings

within and outside the country. As expected a conmltant tem from Ca. heded

by fote CIP Prject Director wa selected in November 1988 to provide

consultancy service in Southern Transport Project, funded by IDA in Lao

people's Defcratic Repblic.

1.7 It must be admitted that GOB's procurent system wa a lengthy

process and involved anny steps which resulted in a one year delay in the

completion of the project.

1.8 It is felt that the inpleiutation schedule in appraisal was

realistic. ee supply of fuel was t primn factor for the delay in

the bzplentation of the project. It was obvious that the production rates

varied directly with the supply of fuel.With sufficient suply of fuel the *ate

of progress was found to be better than wtat was originally exPected in certain

periods as can be seen in Annex A.

1.9 Unconpleted portions of rehabilitation works during fiscal year

1987-88 had to be carried over to the next fiscal year due to shortage of

fuel. As soon as sufficient fuel requireunts were fulfilled these sections

of the road were conpleted in avery short tine by May 31 1988. The allocated

fuel being procured with the use of credit of US S 0.4 million was approved

by IN.

2. Project RM]gntation

2.1 In the early part of the implemntation stage there were considerable

and serious discussions between the consultants and CC concerning any possible

changes to the design. The consultants advised to use thicker granular. material

course with double surface Maws ts in place of 3 inch thick overlay. This

type of granular base with double surface dressing had already been introduced

by SMC in Western Highway Project in Pegu Division. GOB carefully scrutinised

effectiveness of using both granular and pennmc overlays.Two short secttons-one

using penmac uverlay and the other granular overlay-were constructed and the

perforumnce were conpared.

-10-

2.2 roviaw of the design authod mm carried out by the consultant in

parallel with the plvmtotation of the project which resulted son delay in

the proges of -rk.

2.3 Originally G intended to adopt structural grnular overlay an

the whole stretch of Sittang R:ad which is 26 miles long in the initial year.

on Totngoo Road it elected 10 iles for strtal ganlar overlay and15 miles for penc overlay in the sam first year. Such construction methodswere to be adopted oly if the folizwing requirmnts were fulfilled:

(1) No extr cot of the project should be incurred,(2) No additional equypnt and vehicles shuld be involved.

(3) No extra time for cooltion should be allowed and

(4) Rhabilitated paveient section should be in accordance with the

specified standards.

2.4 18 miles of Payagyi-Sittang Road was cospleted using Consultant's

design nuthod. For the remaining sections of both roads a 3-inch thick penrac

overlay was constructed due to-the following reasons:

insufficient supply of fuel to adopt granular construction method.

3-inch thicik csu c overlay requires less raterial than granular

overlay.

acute shortage of tiem to meet the scheduled target.

C's staff ware alzeady fandliar with the peulac overlay and no

special trainings wasr required. and

labour intemive method could be used expeditiously when eqyuipnent

ware not available,

2.5 The consultant's strDng reconniandation on the change of the design method

persuaded IDA to insist GOB to carrunmt 3 trial sections on Toungoo Road usingalterntive design methods if GOB we to receive the approval of ID for anyfwther procwnt of eqipunt and uterials contracts. GOB agreed to realiseIDA's gideline and the following 3 types of trial sections were constructed:

* g-11-

* -grma Overlay.*puc overlay and

*cpletO pvunt reconstruction.

The desigeof thes trial sections were based on the remdation

nmde by the witnts of Constnutlon Industry Ptoject in conjuction with

those nude by the Central Ead Rserch Laboratory and the then Rad Research

and Developnt Project. GOO also showed its enthusiaum to undertake monitoring

of the post-construction studies of the trial sections. This was followed by

a series of periodic tests on the said sections by the Central Read Research

Laboratory to study the perfori of the pavunt unier changing cli ntic

conditions and traffic. The studies still continue to-day.

2.6 As far as status of credit expenditure was concerned GOB's intentionto fully utilize the credit before the closing date was accomplished.

3. Costs

3.1 The cost of APP was funded by GOO. Reviews on the estinmtes nude by

construction units at the start of the project inlicated that the costs in

the appraisal a'wm underestilmated as there was no provision for repair of the

failed areas and regulating course. Moreover the quantities of crushed rock

for penmac overlay worked out in the original estinwtes were found to be less

than what wauld actually required. During implementation period the failed areas

ware heavily reparied with the use of special repair funds, which was provided

by G08. Thus the total cost of AMP was increased . A conparison of estimated

cost to actual cost of AMP should be referred to Table 1.

4. Econofic Re-evaluation

4.1 CC undertook an economic evaluation of the project as coupleted

based on its principal components of the cash flow table. The results of this

evaluation and that made in appraisal for the Payagyi-Sittang Section are

compare and sumnorized below:

-12-

A. Payaayi-Sittang Section

An increase of 341 in total net present cost.An increase of 45% in total net present benefit.An increase of 1.05% (Fran 14.95S to 16.00%) in ERR,

* An increase of 0.12% (Frn 1.47% to 1.59%) ib B/C ratio.

4.2 The vehicle operation cost saving per vehicle per nile conputed on the

basis of the Road Research and Developnt Project model

KC * Exp (7.547 + 0.05141 IRI)

was found to. be in the order of K 0.88.

4.3 A 45% rise in the net present benefit contributed an increase in ERRand B/C ratio even though the total net present cost was increased and thetraffic volume declined during the last few years.

Payagyi-Sittang Rad was conapleted earlier than the plan target. This

achievent effered quicker benefit returns.

4.4 Re-eveluated econanic parameters m given below:

Parateter ga=i-S$ttm-9 Pasyagyi-Tounqoos_t_on Section

Total net present 32.47 153.39costTotal net present 51.73 382.77benefitERR 16% 24%B/C ratio 1.59 2.5

VWC per vehicleper mile

(a) before project K 3.12 K 3.12(b) after project K 2.24 K 2.24

-13-

4.5 On the whole the prject was a success and eomnaidcally viable even

without tadng into consideration of the integbl benfits such as better

magmunt capabilites and production capacity of the bad Units. All the

economic indicators were also satisfactory in the sense that the increase in

net oenefit produced favourable ERR and B/C ratio. At the smm tlmc saving was

achieved in vehicle operating cost.

5. iPrject Results

5.1 The project achieved its defined objectives.despite a one year delay

in completion. The prim cause of the delay was of course shortage of fuel supply

which could not have been foreseen at the time of appraisal. There were also

several other reasons such as:

Lengthy procurennt procedures of GOB.

Belated submission of design review by the consultants

Delay in the process of decision making for design change on the part of

a..R

I>wever it was interesting to find that even with the then available

quantity of fuel whichts about 71% of the actual reqydrment the road units

managed to complete the whole project by May 31. 1988.

5.2 Even todayb tUt is after 5 years of the project - tte riding quality

of both rehabilitated and nmintained setions are acceptable to the road

users S he surface gemtry and structutal condition of the pavint is still

in good shape.

5.3 As soon as the project was completed AWP equipnent of all sorts procured

under the project wre remallocated to other major projects and work sites within

the CC and have been in effective use ever since.

5.4 The equipvent spareparts valued at US S 2.9 million are still availableto satisfy the need for repair and maintenance for four years.

-14-

6. 's Ve

6.1 The Dank -eforvd well right frn the prepation stage to thetin of closure of the credit. A good relahip has also bee achieved

betwae the Duk and GOB or CC or the consultants.

6.2 Lessons which are worthy of note are:

(a) the 1ank should undergo careful study of ecc-amc and

political situation of the country before the drawing upof the initial work plan so that a better preparation of theproject could be node,

(b) the conpleted section of the road should be kept monitoredad evaluated throuout its design life and after.

7. Borrower's Perfornce

7.1 Under the general shortages of fuel and problem with foreignexchange in Ema, the borrower inrplenuted the project geerally inaccordance with project design and atte,ated a trzrendous effort to conplete

the project successfully.

7.2 As this was the first .DA project and the first wiernce with theBank for GOB, OC learned nny useful less frn the Bank such as:

(a) the iqortance of factual infozution an reliable data for feasibleforecast and design at appraisal,

(b) the result of lengthy prmr nt procedures.

8. Project Relationship

8.1 There was a healthy and warm relationship among the Bank, GOB, CC and theconsultants all throughout the project duration.GOB and CC sincerely appreciatedthe Sank's assistance and valuable advice offered by the consultants.

-15-

9. Consulting Service

9.1 2w consultants performd their duties well in carrying out

technical assistance. Frequent discussion on design ?uthods resulted many

useful lessons for both CC and the consultants.

9.2 The services of the consultants were gene-ally satisfactory.

9.3 The technical papers and reports prepared by the consultants

during the life of the project were also mostly comprehensive and of good

quality.

9.4 There was only one exception in that the Costing Consultant was

recruited very late by the consulting firm arcing only at the last quarter

of 1985. The project was then one and a half years old and had been using

CC's accounting system very smoothly and in good momentum. The result was

that when he introduced the new accounting system it hindered the good

progress being made at that time. Should he had arrived ear'ier before the

conlIncIMent of the project and had started introducing the new system it

would have yeilded successful results.

10. Project Docunmntation

10.1 Major loan covenants were corplied with dMLte late audit report.

There were no problems with legal agreenent.

-16-

Annex A

Dwlam'ntation Schedule of AWP

Item Original ACtual Percent Actual OipletionPErn Gxpletion Coplete Date

Road Rehbilitation miles mles 100% May 31. 1988

Road Maintenance 330 niles 330 miles 100% Decenber 31, 1987

Technical Assistance 136M/m 128 M/m 94% March 31, 1987Procurement 46 Lots 113 Lots 245% Decede 31, 1988

Yearly Program and Proess of AWP

YeryProgram and Progres (in Mile - Furlong)Name of Work -i FY FY- - FY

1984/85 1985/86 1986/87 1987/88 1988/89

1. Road FM 50 - 0 50 - 0 40 - 1 - -

Rehabilitation Ps 25 - 7 58 - 5 Jo - 1 17 - 1 8- 2(140m-1F) (51%) (117%) (75%)

2. Road Pm 110 -0 110 - 0 110 - 0 - -

Maintenance Ps - 76 3 187 - 6 65 - 7 -

(330 m) (10%) (69%) (179%)

Average PercentCompletion (30%) (93%) (127%)

Note: Pm a* Program Ps - Progress

Yearly ReqydrSenet and Availabillity of Diesel Fuel

Yearly NR t n AaMq y i r -e.-Fel( n ga--.

Description Total 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89

High (R) 3979000 50000 1008000 1051000 1020000 850000 -Speed (A) 2808388 2720{ 49037 955273 815224 393312 127000Diesel (71%) (54%) (48%) (91%) (80%) (46%)

Note: R a Requirement A = Availability

; - -17-

Table 1

Cgoiarison of Estimute Cost to Actual cost of WP

K '000)

sr. Associated Estlzmte ActualNo. work cost cxt

program Total Cost Total Cost Rimnzksper permile mile

1. Road Rehbilitation

(a) Sittang Road 16,400 636 31.638 1.228 Cost increased due to(25 nlles increase in road width6 furlonc' fron 12 feet to 18 feet

(b) Tomgoo Road 124,000 1.084 187.881 1.642 Cost inclusive of(114 miles Special Repair Funds3 fu-long)

2. Road Maintenancein Mxndalav Division 45,500 137 53,859 163 Cost inclusive of(330 miles) SPecial Repair Funds

-18-

(Compiled from CC telexes 075/CXP/89 of 4/25/89, 076/CSP/89 of 4/26/89,083/CZP/89 of 5/2/89 and 078/CZP/89 of 4/26/89)

A. Pany-Young. R.,4tn

7.01 Economic costs of construction and maintenance and the benefits ofsavings in vehicle operating costs (voc) were tabulated (see Appendix 8) andthe Economic Rate of Return (ERR) was calculated. The following factors weretaken i$to consideration:

a. The cost stream shown in the table is the actual economic cost.

b. Traffic data obtained from a traffic count taken in 1985-1989 areused in the calculation of benefit stream. we assuse the trafficvolume in 1990 will be almost the same as in 1989, but we expectthe traffic growth of 4.5% in normal conditions based on 1985traffic data.

c. Voc per vehicle mile of Ks 3.12 before the project and of Ks 2.24after the project are obtained using the voc model for heavy truckand the corresponding roughness (ZRI) before and after the project(see below). For light vehicles the voc is taken as 0.55 of theheavy truck value.

7.02 The ERR at appraisal was estimated to be 26 %. The new ERR is 24.8%.The lower ERR is mainly due to the following:

a. Although the Payagyi-Toungoo section was planned to be completed inthree years (1984/85-1966/87), the project was extended to 1987/88as a result of late arrival of project equipment in the first year.A shortage in the supply of diesel fuel in the later stage of ofthe project definitely prolonged the project period up to May 1988,and thus the project costs were affected.

b. Due to the shortage of fuel in the later part of the project, asignificant drop-off of traffic volume occurred, which isconsidered to be an abnormal circumstance for Burma. A higher ERRcan be established assuming that traffic volume increases and asteady and adequate supply of fuel is maintained throughout Burma.

7.03 At appraisal the AADT was taken as 800 vrd in 1981 with a traffic growthrate of 8 and the composition of traffic flow being 88% heavy vehicles and 12%light vehicles. During the execution of the project traffic data was collectedas follows:

-19-

zfte PE MC!1-Y1rfn9 RaeStAMnwi

Year/Month Total vpd %Ueavy Vehs %Light Veha

1984 Feb 990 88s 12%1985 Jun 1198 73% 27%1986 Jan 1197 79% 21%1987 Jan 1200 74% 26%1988 Jan 903 72% 28%

7.04 At appraisal roughness was estimated by visual inspection. Before theproject, roughness was estimated to be 4500 mm/km increasing to 6000 mm/kmafter 10 years. After the project it was estimated to be 2500 mm/km increasingto 3500 mm/Jm after 10 years.

7.05 In February 1989, mile by mile roughness measurements were recorded byRoad Research and Development Project (financed by UNDP) using NAASRA meterwith the following results:

R~mlmRryof Tfli Rnuass: Pnyayi.-TnGan Rae1inn

Section Length (miles) Average IRI Remarks

60/5-93/0 33 5.6 Overlay completed in 198693/0-116/0 23 6.1 Overlay completed in 1987116/0-148/0 32 5.8 Overlay completed in 1988148/0-175/0 27 6.0 Overlay completed in 1986/7

Average per mile 5.8

7.06 The actual roughness after the project was compared with the assumptionsmade in the appraisal report:

Rongbna ~- fl1pAPiann. Paya -EngagoJt±ann

Assumed inAppraisal Report Equivalent Actual

mm/km IR IRI

After Project 2500 3.5 5.8

Before Project 4500 6.0 10.5

-20-

7.07 The voc at appraisal and after the project are given in the followingtable. After the project, the voc were obtained using the voc model used bythe UNDP project in 1989:

Vail .At 4 Lng Cgmk*nG PAy=I=TaMPnngo JACtjg

(Ryats per mile)

Type of Vehicle at Appraisal After the Project

Heavy 3.12 2.24

Light (0.55xHeavy) 1.71 1.23

Cost of R&.hnhJ1lta*4nn

7.08 Construction costs are given in the table below:

Co_t of Be 1t-ation. Panv s

Year Length Constructed Cost(Miles - Furlongs) (Kyats)

1984/85 10 - 3 17,185,2321985/86 48 - 3 60,836,1081986/87 30 - 1 60,697,1581987/88 17 - 2 31,117,8501988.89 8 - 2 8,719,163

TOTAL 114 - 3 178,555,511

7.09 As roughness measuring equipment was not available during the project, anumber of travel time surveys were carried out before, during and after therehabilitation work. These give a qualitative idea of the improvementsachieved and the benefits to road users as a result of the CIP. A summary ofthe survey fo;- the Payagyi-Toungoo section is given below:

-21-

Distance - 49.4 miles

Date Condition Travel Time Average SpeedMinutes MPH

March 1984 Before Project 110-130 27-23

February 1986 Overlay 78% complete22 restrictions 91 32

May 1987 Overlay 100% complete2 restrictions 65-75 46-39

B. tAfi t tan. 4ts

7.10 Economic costs of construction and maintenance and the benefits ofsavings in vehicle operating costs (voc) were tabulated (see Appendix B) andthe Economic Rate of Return (ERR) was calculated. The following factors weretaken into consideration:

a. The cost stream shown in the table is the actual economic cost.

b. Traffic data shown in the table shows the drop in the trafficvolume during the period 1985/86 to 1988/89. We also expect theAADT for 1989/90 will be almost the same as in 1988/89, but thenormal traffic growth rate of 4.5% has beer. used after 1989/90.

c. The total benefits due to the increase in voc are calculated byusing the actual traffic data up to 1989 and the estimated dataafter that.

7.11 The ERR at appraisal was estimated to be 15.0 %. The new ERR is 16.3%.The decrease in traffic was compensated for by a shorter construction period oftwo years instead of three years estimated at appraisal.

7.12 At appraisal the AADT was taken as 700 vpd in 1981 with a traffic growthrate of 6% and the composition of traffic flow being 65% heavy vehicles and 35%light vehicles. During the execution of the project traffic data was collectedas follows:

'Paffi£* Payaqyi-RI?tnng Sqinn

Year Total vpd %Heavy Vehs %Light Vehs

1984/85 700 80% 20%1985/86 643 64% 36%1986/87 564 65% 35%1987/88 371 64% 36%

-22-

7.13 At appraisal roughness was estimated by visual inspection. Before theproject, roughness was estimated to be 4500 MM/km increasing to 6000 am/kmafter 10 years. After the project it was estimated to be 2500 mm/km increasingto 3500 mm/km after 10 years.

7.14 In February 1989, mile by mile roughness measurements were recorded byRoad Research and Development Project (financed by UNDP) using NAASRA meterwith the following results:

Runnnnv imp YRTh? fnamns P&MON4.Afi_g R_*14ttnn

Section Length (miles) Average IR! Remarks

60/5-63/6 3.1 5.4 Overlay completed in 1985/663/6-83/3 19.6 6.2 Overlay completed in 1984/583/3-85/3 2.0 5.5 Overlay completed in 1984/585/3-86/3 1.0 5.4 Overlay completed in 1984/5Average per mile 6.0

7.15 The actual roughness after the project was compared with the assumptionsmade in the appraisal report:

R6Ihn. _ _ _ _ ~4. Pyg{.Ri.s.an. .R..... __

Assumed inAppraisal Report Equivalent Actual

xun/km IZR IRR

After Project 2500 3.5 6.0

Before Project 4500 6.0 10.5

V.hie1. es rate4 n Csatas

7.16 These are the same as for the Payagyi-Toungoo Section.

-23-

7.17 Construction costs are given in the table below:

ef hni1it~ton!~ Pazey*v-1vg tin

Year Length Constructed Cost(Miles - Furlongs) (Kyats)

1984/85 15 - 4 17,963,5651985/86 10 - 2 13,674,957

TOTAL 25 - 6 31,638,522

Travel Tt me

7.18 As for the Payagyi-Toungoo section, travel time surveys were carried outbefore, during and after the rehabilitation work. These give a qualitativeidea of the improvements achieved and the benefits to road users as a result ofthe CIP. A swumary of the survey for the Payagyi-Sittang section is givenbelow:

Tri * PaZaggf Atnng nEt_innDistance - 25.4 miles

Date Condition Travel Time Average SpeedMinutes MPH

March 1984 Before Project 90-120 17-13February 1986 Overlay 78% complete 43 35February 1987 Overlay 100% complete 30-36 51-42

C. = = =ndna

Irraffin!

7.19 At appraisal the AADT was taken as 600 vpd in 1981 with a traffic growthrate of 6% and the composition of traffic flow being 65% heavy vehicles and 35%light vehicles. It has not been possible to carry out traffic counts in thisarea since the project started. There is therefore no up-to-date traffic data.

RBaOhnaa

7.20 At appraisal it was assumed that the roughness after the project would be3000 mm/km increasing to 4500 mm/km after 10 years. No measurement of theroughness has yet been taken by the UNDP project after the project. By meansof visual inspection and comparison with, the roughness after the project wasestimated to be 5000 mm/km increasing to 7500 mm/kn after 10 years. Generallythe reduction in roughness achieved in the Maintenance Program area has beenbetter than that achieved in the areas of rehabilitation.

-24-

7.21 xt was found that travel time hao been reduced by more than 40% becauseof the reduced roughness.

7.22 The cost of the maintenance program is given in the table below:

. E Ka4i,lpnpnj~p. Mandal Araa

Year Length Maintained Cost(Mlles - Furlong3) (Kyats)

1985/86 76 - 3 12,230,0151986/87 187 - 6 27,075,6431987/88 65 - 7 14,553,626

TOTAL 330 - 0 53,859,284

COUSIU U INDUSTRY PROAYT CR OAD

COSTU41_IT TAUE: PAVAGITOUNGOO SECTIO0Kyat . MEMuuO

S1or. Uoime b ssom Total Wv d TONI Wv VeIkb gToal PV 1 TNta V No se. To"ta Nlme. TooY oesnmstIea Eaos.a Eoseub Cosls et Cast Oatbng m. it _ lsolta so immom Vehe ftosin n_mers

Coat Cost C"t Cat salg Y

1 168405 17.1" 17.16 16.03 ISO23 0.oo 0.04 0.o 0.o -15.02 MA7.N -15. 2 f Pus.2 1085/8 0.u 70.611 60.27 at. 3 S a.s1 3 .00 3.0 .47.37 7 57.sa .6.3 1366/0 60.69 133.71 45.O I. 320.4S 13. 1.36 .20 .0.23 .40.3 R.3. t. Rs-mpai2 .4 S07N 31. tt0. 2t.2S 12.71 30.21 54.181 20.0 03.0 .01 .0. .0.6 10600 6 e.71 17.s 5.4 130.17 26.02' S.0 16.60 SL. 11.141 .s1o -02.o .Z t oen6 1:0::10 2.2 S6. 1.30 10.X4 28.62 10002 10.32 71. is. 21.U -. 67. so_f _7 19S0091 2.20 S63.1 t .t h4O.0 .1O. 16t.5T 24. 36.0 23. 40.371 .4s.* 9101/02 2.26 165. 1.06 141.601 10. 200.41 23.71 120.571 12.6 40. .11.1 1 3 R .Mm* 1 92123 2. 107.6 0.W 6 142. la, 3.5 22.'S6 143.1 1.6" P0. 0. 4 -.10 0103104 2. Se.ll 06 143.5 :5.54 310. 11.40 10.50 30. 63 16.011 1004105 2.13 101. 0.7 144.35 5.01 370.001 20.39 14.2 0.53 55.73 40. 4 . _ _b0':a 100/0 120 104.61 0.7 14." 60.62 436.70 1.1 304.1 16.50 5.6b 50.00 at 10 bl

13 1065/0 1101 100.70 0.06 145. 40.3 500.00 10.31 212.51 17.9 61.0 76.714 100D7/6 2.20 100.07 0.t 140.at2 00.30 560.2z 17.42 230. 16.e 60.63 63.2 e. AOlas *S 16. UtS 1060/6 11.tl3 10.01 1.83 149.1 0.16 035.t ?0.50 250.5 13. 17.4 107.3 51ts 10000 320t 11.1 0.4 140.6 72.a 707.7st 15.73 172.1 I.a 70.02 s.U

I 9 2000101 2. 5.47 0.451 t50.1 75.55 76331 * 404 157.101 4.49 73 97nt0 1001/01 1.10 117.7 0.41 150.51 75.6 051.16l 14 30130 13Ss.7§ 76.67 1SOJ610 2000 2.10 130.03 0.3 1 20 a..0701.2044.7 13.4L 34. 3.11 60 163 120 200/041 2.30 210.31 0.33 151.22 e6.n1 "030.6 11.01 327.60A s2.47 6.03 170.4721 100406 1 2.0 224.53 0.30 III. 00. 1131.00 11.17 330uo 11.65 67.61 160.12 2005103 13 120.6 0. .0 64 s215.13 II. MAN 1.3 01.6 10.2293 2006107 2. 223.1 0.26 152.66 1a31.02 10.0 302.42 10.73 0.11 210.324 2007106 12.0 131. 0.19 161 1023.1 141644 10.4 372. to0o 10.63 110.5025 2000/0 11.03 243.20 1.09 15.3 107.4 1523 901 362.7S _.a nS.o210.

EL * 24.6%P _"tmh Pder * 9 go"Aidt/C Ail - 2.5

tZ rtot

CONSlhUCT1N IIASTRY PR0JECT (CR 126"a

R10AIOO.AVOV.UIROtf RO40

COSI4EINEI TaBLE: PAVAGVYIT1A SECT101OMS* MEns

set. lineal. Enelb Total VW d Tstul PY Vehlt. Total PR ao Tlt PP tPY t Ee TOWl Nme. Vee Coeualtba blalatas Bon s" costs St Coat Op toUag SousIte Bonefflt as send" VYlu presses es_na

Cost Cat Cosl Cos l Sawts Vale

I loeSolS 17.54 t1.0 to.st toast 0.o0 0.0oi 0.05 0.0 -10.31 -I7.04 -16.231 EmoomsnW PwOamaT2 100516 15.67 a.eo 11.30 87.0 2.07 8.67 a.a1 2.1 9 20 700. .2I.4a 1986167 0.64 326 0.4 20.11 1.66 4.241 1.1 5. 0.09 0.01 .24. 1. RbsdL 2bIopm4 1067100 0.64 s2.0a 0.4 2a. 2.66 6.0 1.705 .41 1.91 1.921 .22.41O 10800 0.04 3.571 0.s 280. 2.66 0.271 1.50 6.7 1.10 1.921 .22.2 2. Traf das 6 l066I00 0.04 U4.2t 0.so 20.3 6.e t16.221 3.06 30.6 .50 CM .16.21 m bUds _ _7 10001019 0.64 54.65 0.91 20.0 7.15 23.57 3.07 14.2 .34 65 -S.376 1991192 0.64 05.0 0.a 209.0 7.48 20.0 3.40 7.7? 3.10 0.6 .12.a a Fcuh nnbuim0 190 0.6 6 30..2 20.22 7.0) 2. 3.31 21.0 3.04 7.175 .0.1 a M.pSW10 003/04 0.44 S6.701 0.2 0.4 6.16 40.64 3.1 24.2 2.001 7.5 4.2

040 0.644 27. 0. 0o.6 6.55 55.31 2.00 27.2 2.76 76 .s *s4 Neel.t.imu12 100506 1.6 s0.os o0.51 31. 6. 04.30) 2 50.06 2.53) 7.0 *.1. U 10pm btnnbt2 3106/07 0. ss.6 0.10 51.3 9.32 73.62 2.7 32.78 2.51 8.07 1.14 1007/0 0.04 40.32 07 3.. a7 03. 2.65 0.32 2.aG 0.0 an ls. oouui Plh, Io 0S OSOiso/ 0.64 4to.0771 0.1 51.7 10.1 03. 2.43 37.7 2.28 0. 6.16 ss1o0l 0 0.64 41.1 0.1 81.0 10. 164.16 2.31 42.070 2.17 9. B.217 2000/01 0.04 42.20 0.12 21.0 11.1 11t.2 2.10 Z422 2.0 10.4 t0

16 200110 0I.U 42.0 0.11 32.1 11.01 126.01 2.0e 44.5 1.07 10.07 z2.109 20 02U0 103 0 .0e4 43. 0.1 52. 12 15005 1.06 40.8 a. o . 4 4.120 200U04 0." 44'.1 0.0 52.3 12. 151.74 I. 45.25 1. 12.04 15.02a 20040 0.64o 44.62 . 3.o 2.a9a1 20 164.2 t.701 6.0 .70 12.61 17.622 200400 toa 3-.10 32. 1a.o6 170.e s . 61. 1.50 12.2 10.)

ERR * 1t.3%p q PlPd - 12.6 ram_ tCa Ral - *.69

#100.

Dn- t

-2 7 - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

MON WA AI TA Y* Id ~MAAVUVO

pDt) I#G VAN AUKSE

CHAr TAUNGyOI

i.xKYAUPA 0

PYINMANA

TOUNGOO d

DA Y ~~~~~ROMEBAY~~~~~~~~~~Y

OF THARRAWADDY

HENZAOABENGAL PAYAGY SITTANG

PEU,

Read R.hablttloa t._.

P-*t a-ftnanco AreaDBURMA COtISRUCTION INDUSTRV PROJECTPllot Mettonanee Area

MAPL .,

-28-

1. BktiLuIda.kku andIorMA.C=dit

Loan/Credit Year ofTitle Purpose Approval Stltus Comments

Cr. 413-BA WaterwayInlard Water Transport Development 1973 CompletePrct

Cr. 414-BA RailwayThird Railway Project Improvement 1973 Complete

Cr. 671-BA PortSecond Ports Project Development 1976 Complete

Cr. 1372-BA Port ClosesThird Ports Project Development 1983 In Progress 3/31/91

Cr. 1615-BA TinberTimber Distuibution Transportation 1985 In Progress ClosesProject Improvement 3/31/90

Infrastructure Rehabilitation Infrastructure Under NegotiatedProject Rehabilitation N/A Preparation 8/88

-29-

Date

Item Phuned PiRsed Atua

FebSt Mention in Fls - 03/25/81

Governnmnt's Applcatkin - N/A

Identfiation 01/81

PrjectEbief -- 09/0/91

Preparation I 05/81II 09/81

Appraisal Mission I 12/81 11/81E ' ~ 03/82

Czedit Negotiations 05/03/82 04/05/82

Ebard Approval 06/29/82 05/25/82

Credit Signature - 06/28/82

CreditEffectivenm 09/28/82 - 09/20/82

CreditClosing 12/31/87 12/31/88 12/31/88

CreditComplon 06/30/88 06/30/89 06/28/89

-30-

(US$ l00)

IIID FY 1983 1964 1985 1966 1967 198 199

Appasal l Estite 40 l1,000 17,600 19OW 19,750 20.A0

Actual 0 1,98D 10,480 12,870 16,400 19,110 19M820

Acua as % of Esdate 0 18 60 6( 83 96 99

he fn disbu_ment was nude on 06/28/89 and the undlisb d cedit baane of SDR 16,20.82(equvalent to US 20566 at SDR 1 - U5S t277) was cancelld effective 06/28/89.

B. byyQs=ao(SDRmllifons)

Credit ActualCatery Aocation % Aoun %

at Appsal Dis

Vehicles,Equipment,MdalsandSpaeParb 15.30 85.0% 16.50 91.6%

Technical Assistancand Tanin 135 7.5% 12 6.7%

Petleum Products 0.30 1.7%

Unallocated .5 7.5% 0.00 0.0%

1840 100.0% 18.00 100.0%

-31-

ODae9 Conqebyt = Sbrt wad ofW!k xp wj.ze

covoe Acta b cu vedAtd DueEqWpwad~ ~ ~ ~ ~ ~ ~~~~~~~%fWkt~~~~~~~~~~~~Ita

PNi_menit 9/03 12/82 1/84 4/83 4/84 7/83 11/84 3/84 0

Road Reb talion - - 10/84 1/84 5/88 3/88 81RoadMaltmwm - -9 5/85 1/84 12/17 3/88 1X

Tecrdeu lAsLsane 12/82 10/82 10/83 12/82 10/83 12/82 3/88 3/88 100

1982 19UM 194 19AI 196 1967 1Me6

1. Project Effectiv *

2. Prowe Speclfications n invite olds am

3. Reeive Bids SW Evaluate .

4 EauiPment Doelivey _

5. Rehbiitattmr PWaYg - Sitta (Unit 2)

. Reallition P1aI - Toungee (Unit 2) _ = _

7. Reh1ilitstilet P1g - Town g(Unit 1n ) _ _

8. Maintenhnci Muulay _ -_ -_

9. Technical As ita

Expected implementation Actual Implementation

[

1! 0§§X§g loo lXlI0

iœ '.; , 4 '4 p 4 1 § °t ° 1k~ ~ |0 0f| ! | §

i j 5 |gl 2| 1}1000§Xgl

U I 1t10X X S *1l}jill0

-33-

A.(not applable under ths proect)

-~~~~~~~~ cul conu.natsBun Ila] 21bM 31cI

Ecwn* Rate of Return -

WholePoect 23.9 223 20A 16.0 22.0

Ranon-Touoo-Mandalay 26.O(dI - - - 24.8

Payayi-slttg 154.dJ - 163 [l

Note: [a] 20%reductiontnoutpus[bi 20% huncem h costs[ci 20%reduction in outpub and 20% zease i costs.(dl ues povided by CC. mfonntlon not available in pj,ect SeL

(not applible under tis pject)

D. bdiaNone arried out under thds Prject)

-34-

7.

D_a£lie forCOMM* SUte CoGWlim SW"

Credit Apima

3Al(bXDiD Make a, saticoy to IDA, forthecarrylgout byCCof theAssodatedWorkdPrga 10/01/82 CopIled

3.02 Estai, maintin and operate untilcompletion of projt, a Proect Cell withinCC with staff, powes and responldessatsfato y to IDA. 10/01/82 Comld

3.03 Enter Ino a conact of empioymwt with aconsult fim, whose selecton, qualmcosexerience and terms and cowndi of Compiledemploymen shall be satifcbtory to IDA. 12/31/82 10/83

A. StffJnw

Steof NumofPt kCyce Stbf-wefks RPurk

Trou hAppsa 79.0 111

Appraisafl th=Bod Approval 225 (11

Bad Approvathouh Effevness 16.1

SupeWvision 47.6

TOTAL 1652

Notes [11 Estimes, as MIS divides up lending operatio in dilfSet way.

-35-

.~ ~ ~ ~ ~ ~ ~~~~3 . ula

Swgeof Month/ Nuu*er of Days Spn Peuforne TYPofPraen Cyde Yew Persons ined pu 1 Ratbig Satsu21 P_1mm(31

Ihouh Appas - No p_msphon lemi arted out Two ned etweven Ass ton sf andMyannur officals took plwe on 05/06/81 in Tokyo and on 09/21/81 in Was_nton.

Boad Appiwal -Appraba I 11/81 4 21 EBCN/R/FNA/TRtG - -Appsal I 0/82 1 10 ECN -

Boad Appmvalthru Effectemss -

SupervisionI 08/82 1 17 MSP

Supervsion -SupwanisionU 10/82 2 14 ECN/BEGR ISupervonM 01/83 1 7 ECN I -SupervisionIV 04/83 1 4 ECR - -Superlsl*onV 10/83 1 7 CIHF - -SuprvfisimonVI 11/83 3 14 ECN/EGR/MSP 1 -SupwrvsionVIl 03/84 1 7 BCN I -Suprvision VI 06/84 1 7 ECN 1 -SupervisonD( 04/85 1 7 IGR 2 TSupbWlomX 10/85 3 10 ECN/ECRx2 2 [4 -[41SupervlslonXl 03/86 1 7 BCiR 2SupervWsioXnI 11/86 1 5 BCR -Supervision)I 01/87 1 7 FNASupervlslouaV 11/87 1 7 V 1I

NOTES [P1 ECN0 Ecoormis;t EGR - Enrgneer, FA - Financia AnalystCIF - Division Cldf, MSP Mechdadnie Equipment SpecIaistN, 1W . Traport SpeciasL

[21 1. Problem-free or Mknor Problns, 2- Modete ProblimD[ Tm TechticaL141 Ratng syswn changed. Problen, no long. stated on Fbmn 590- Supervsidn Reports.