Kingdom of Cambodia and Socialist Republic of Viet Nam: Greater Mekong Subregion: Phnom Penh to Ho Chi Minh City Highway Project

Transcription

1 Completion Report Project Numbers: / Loan Numbers: 1659(SF) and 1660(SF) December 2007 Kingdom of Cambodia and Socialist Republic of Viet Nam: Greater Mekong Subregion: Phnom Penh to Ho Chi Minh City Highway Project

2 CURRENCY EQUIVALENTS CAMBODIA Currency Unit Riel (KR) At Appraisal At Project Completion (11 November 1998) (13 November 2006) KR1.00 = $ $ $1.00 = KR3,700 KR4, SDR1.00 = $1.346 $1.490 VIET NAM Currency Unit Dong (D) At Appraisal At Project Completion (11 November 1998) (27 October 2006) D1.00 = $ $ $1.00 = D13,880 D16, SDR1.00 = $1.346 $1.485 ABBREVIATIONS ADB EA EFRP EIRR FY GDP GMS HCM City HDM-4 ICB IEE IRI MOT MPWT PMU PMU-MT RRMU TA UXO VRA VOC vpd Asian Development Bank executing agency Emergency Flood Rehabilitation Project economic internal rate of return fiscal year gross domestic product Greater Mekong Subregion Ho Chi Minh City Highway Design and Maintenance Standards Model - 4 international competitive bidding initial environmental examination international road roughness index Ministry of Transport Ministry of Public Works and Transport project management unit project management unit My Thuan regional road maintenance units technical assistance unexploded ordnance Viet Nam Road Administration vehicle operating cost vehicles per day

3 NOTES (i) (ii) The fiscal year (FY) of the governments is from 1 January to 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2000 ends on 31 December In this report, "$" refers to US dollars. Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General A. Thapan, Southeast Asia Department (SERD) Director J. Cooney, Infrastructure Division, Southeast Asia Infrastructure Division (SEID), SERD Country Director A. Goswami, Cambodia Resident Mission (CARM); A. Konishi, Viet Nam Resident Mission (VRM), SERD Team leaders Team members Nida Ouk, Senior Project Implementation Officer, CARM Le Dinh Thang, Program and Project Implementation Officer, VRM San Sophana, Assistant Project Analyst, CARM Nguyen Thi Phuong Hoa, Assistant Project Analyst, VRM

4 CONTENTS Page BASIC DATA i MAP I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 2 C. Project Costs 4 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 8 G. Conditions and Covenants 9 H. Related Technical Assistance 10 I. Consultant Recruitment and Procurement 10 J. Performance of Consultants, Contractors, and Suppliers 12 K. Performance of the Borrower and the Executing Agency 13 L. Performance of the Asian Development Bank 14 III. EVALUATION OF PERFORMANCE 14 A. Relevance 14 B. Effectiveness in Achieving Outcome 15 C. Efficiency in Achieving Outcome and Outputs 16 D. Preliminary Assessment of Sustainability 16 E. Impact 17 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 19 A. Overall Assessment 19 B. Lessons Learned 19 C. Recommendations 20 APPENDIXES 1. Project Framework Appraisal and Actual Project Costs Currency Equivalents Summary of Contracts Funded by the Asian Development Bank Projected and Actual Disbursements Chronology of Major Events Project Implementation Schedule Organization Charts Status of Compliance with Loan Covenants Economic Reevaluation Resettlement Activities Quantitative Assessment of Overall Project Performance 68

5 i BASIC DATA (Loan No CAM) A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number B. Loan Data 1. Appraisal Date Started Date Completed 2. Loan Negotiations Date Started Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness In Loan Agreement Actual Number of Extensions 6. Closing Date In Loan Agreement Actual Number of Extensions 7. Terms of Loan Interest Rate Maturity (number of years) Grace Period (number of years) Kingdom of Cambodia 1659-CAM(SF) Phnom Penh to Ho Chi Minh City Highway Kingdom of Cambodia Ministry of Public Works and Transport SDR28,402,000 ($40 million equivalent) PCR: April May November November December March June November June July % per annum Disbursements a. Dates Initial Disbursement 20 January 2000 Effective Date 9 November 1999 Final Disbursement 20 July 2006 Original Closing Date 30 June 2003 Time Interval 79 months Time Interval 43 months

6 ii b. Amount ($) Category a Original Allocation b Last Revised Allocation Net Amount Available Amount Disbursed Undisbursed Balance c 01 30,139,515 24,439,358 24,439,358 24,372,643 66,715 01A - 7,754,201 7,754,201 7,754, , , , ,277 10, ,001,691 3,518,835 3,518,835 3,486,338 32, ,400,789 1,801,072 1,801,072 1,157, , ,057,780 2,971 2,971 2, , , ,588 18,885 Total 40,000,000 38,924,079 38,924,079 38,148, ,023 a b c 01 = civil works (road improvement), 01A = civil works (emergency flood rehabilitation), 02 = government management (incremental), 03 = consulting services, 04 = service charge, 05 = unallocated, and 06 = equipment The difference between the original allocation and the revised total amount was due to the exchange rate variation between the special drawing rights (SDR) and the US dollar. An undisbursed loan amount of SDR 528, ($776, equivalent) was cancelled at loan closing date of 20 July A previous cancellation of SDR 370, was made on 31 August In total, an amount of SDR 898, ($1,317, equivalent) was cancelled from the loan. 9. Local Costs (Financed) Appraisal Actual C. Project Data 1. Project Cost ($ million) - Amount ($ million) Percent of Local Cost Percent of Total Cost Cost Appraisal Estimate Actual Foreign Exchange Cost Local Currency Cost Total Financing Plan ($ million) Appraisal Estimate Actual Cost Foreign Local Total Foreign Local Total Implementation Costs ADB Financed Government Financed Total IDC Costs ADB Financed Government Financed Total ADB = Asian Development Bank, IDC = interest during construction.

7 iii 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual Foreign Local Total Foreign Local Total A. Base Cost 1. Land / RAP / UXO Civil Works Construction Supervision Government Management Subtotal (A) B. Contingencies 1. Physical Price Subtotal (B) C. Service Charge during Construction D. Extended Scope Total Original Scope (A+B+C) Civil Works (Emergency Flood Rehabilitation) 2. Equipment Subtotal (D) Total Cost (A)+(B)+(C)+(D) Note: estimated by Ministry of Economy and Finance final figure to be supplied UXO = unexploded ordnance, RAP = resettlement action plan 4. Project Schedule Item Appraisal Estimate Actual A. Construction Supervision Consultant 1. Contract Date March December Completion August December 2005 B. Civil Works Components. 1. Start of Construction June December Completion of Construction June December 2005 C. Other Milestones: June 2003: Approval of first extension of loan closing date to 30 June July 2004: Approval of second extension of loan closing date to 30 June September 2004: Approval of cancellation of SDR 370,000.00, effective 31 August May 2005: Approval of third extension of loan closing date to 31 December July 2006: Closing of loan account

8 iv 5. Project Performance Report Ratings Implementation Period Development Objectives Ratings Implementation Progress From 1 Jan 1999 to 31 Dec 1999 Satisfactory Satisfactory From 1 Jan 2000 to 31 Dec 2000 Satisfactory Satisfactory From 1 Jan 2001 to 31 Dec 2001 Satisfactory Satisfactory From 1 Jan 2002 to 31 Dec 2002 Satisfactory Satisfactory From 1 Jan 2003 to 31 Dec 2003 Satisfactory Satisfactory From 1 Jan 2004 to 31 Dec 2004 Satisfactory Satisfactory From 1 Jan 2005 to 31 Dec 2005 Satisfactory Satisfactory From 1 Jan 2005 to 20 July 2006 Satisfactory Satisfactory D. Data on Asian Development Bank Missions Name of Mission a Date No. of Persons No. of Person-Days Specialization of Members b Fact Finding 21 April 9 May a,b,c Appraisal 29 April 9 May a,b,c,e Special Loan Administration Mission July f, f, f, b, Review Mission July B Review Mission June g, j Review Mission December g, h Review Mission June e, f Mid-Term Review Mission Nov G Review Mission 5 22 Mar 04 Apr k, i, j Review Mission 6 30 Mar 01 Apr d, j Review Mission 7 (Resettlement) June b, l, m Review Mission 8 (Resettlement) August i, j, l Review Mission 9 07 Feb 04 Mar i, j Review Mission Oct i, j Review Mission 11 (Environment) Dec N Review Mission May i, j Review Mission 13 (Resettlement) 27 Oct 12 Nov q, i Review Mission Mar o, j Review Mission 15 (Resettlement) May l, k, o, j, p Review Mission 16 (Resettlement) Aug l, o Review Mission 17 (Resettlement) 01 Sept l, k, o, j, p Review Mission 18 (Resettlement) Nov Q Project Completion Review 7-24 Nov j, q a Fielded concurrently with other missions. b/ a senior project engineer, b- social development specialist, c- project economist, d-project engineer, e-counsel, f- project specialist, g-transport economist, h- programs officer, i-portfolio management specialist, j-program/project implementation officer, k-country director (CARM), l-resettlement specialist, m associate social development analyst, n environmental specialist, o project implementation specialist, p director, MKID, q-consultant

9 v BASIC DATA (Loan No VIE) A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number B. Loan Data 1. Appraisal Date Started Date Completed 2. Loan Negotiations Date Started Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness In Loan Agreement Actual Number of Extensions 6. Closing Date In Loan Agreement Actual Number of Extensions 7. Terms of Loan Interest Rate Maturity (number of years) Grace Period (number of years) Viet Nam 1660-VIE(SF) Phnom Penh to Ho Chi Minh City Highway The Socialist Republic of Viet Nam Ministry of Transport SDR71,005,000 ($100 million equivalent) PCR: April May November November December March June November June May % per annum Disbursements a. Dates Initial Disbursement 27 December 1999 Effective Date 09 November 1999 Final Disbursement 12 May 2006 Original Closing Date 30 June 2003 Time Interval 76.5 months Time Interval 43 months

10 vi b. Amount ($) Category a Original Allocation b Last Revised Allocation Net Amount Available Amount Disbursed Undisbursed Balance c 01 78,739,535 81,461,286 81,461,286 81,461, , , , , ,750,300 7,046,371 7,046,371 7,046, ,119,569 2,152,373 2,152,373 2,152, ,890,641 6,194,502 6,194, ,194,502 Total 100,000,000 97,087,137 97,087,137 90,892,635 6,194,502 a 01 = civil works), 02 = government management (incremental), 03 = consulting services, 04 = service charges, 05 = unallocated. b The difference between the original allocation and the revised total amount was due to the exchange rate variation between the special drawing rights (SDR) and the US dollar. c An undisbursed loan amount of SDR4,172, (equivalent to $6,194,502) was canceled at the loan closing date of 12 May Local Costs (Financed) Appraisal Actual C. Project Data 1. Project Cost ($ million) - Amount ($ million) Percent of Local Cost Percent of Total Cost Cost Appraisal Estimate Actual Foreign Exchange Cost Local Currency Cost Total Financing Plan ($ million) Appraisal Estimate Actual Cost Foreign Local Total Foreign Local Total Implementation Costs ADB Financed Government Financed Total IDC Costs ADB Financed Government Financed Total ADB = Asian Development Bank, IDC = interest during construction..

11 vii 3. Cost Breakdown by Project Component ($ million) Component Appraisal Estimate Actual Foreign Local Total Foreign Local Total A. Base Cost 1. Land / RAP / UXO Civil Works Construction Supervision Government Management Subtotal (A) B. Contingencies 1. Physical Price Subtotal (B) C. Service Charge during Construction Total Original Scope (A+B+C) D. Extended Scope Additional Work 1. Land/ RAP / UXO Civil Works Construction Supervision Subtotal (D) Total Cost (A)+(B)+(C)+(D) UXO = unexploded ordnance, RAP = resettlement action plan 4. Project Schedule Item Appraisal Estimate Actual A. Construction Supervision Consultant 1. Contract Date March August Completion August December 2005 B. Civil Works Components 1. Start of Construction June November Completion of Construction June December 2005 C. Other Milestones: 1. 5 November 2002: Approval of first extension of loan closing date to 30 June August 2005: Approval of second extension of loan closing date to 31 December May 2006: Closing of loan accounts

12 viii 5. Project Performance Report Ratings Implementation Period Development Objectives Ratings Implementation Progress From 1 January 1999 to 31 December 1999 Satisfactory Satisfactory From 1 January 2000 to 31 December 2000 Satisfactory Satisfactory From 1 January 2001 to 31 December 2001 Satisfactory Satisfactory From 1 January 2002 to 31 December 2002 Satisfactory Satisfactory From 1 January 2003 to 31 December 2003 Satisfactory Satisfactory From 1 January 2004 to 31 December 2004 Satisfactory Satisfactory From 1 January 2005 to 31 December 2005 Satisfactory Satisfactory From 1 January 2006 to 12 May 2006 Satisfactory Satisfactory D. Data on Asian Development Bank Missions Name of Mission a Date No. of Persons No. of Person-Days Specialization of Members b Fact Finding 21 April 9 May a,b,c Appraisal 29 April 9 May a,b,c,e Special Loan Administration Mission Jan f,g Review Mission b 2 18 Dec d Review Mission Mar d Mid Term Review Mission Nov d,h Special Loan Review Mission b 5 18 Apr k,h Review Mission Jun a,k,l Loan Take-Over Review Mission Feb I,l Review Mission 8 26 Jun.-1 Jul i,j Review Mission 9 29 Oct.-1 Nov i,j Review Mission Feb i,j Review Mission Jun i,j Review Mission Sept- 1 Oct i,j Review Mission Apr i,j Review Mission Jul i,j Review Mission Sept i,j Review Mission Dec i,j Review Mission Feb i,j Project Completion Review 17 Oct-5 Nov j, m a/ Missions were fielded to review progress of Projects under several loans. Person-days shown are actual days spent on the Project. b/ a-senior project engineer, b-social development specialist, c-project economist, d-project engineer, e-cunsel, f- financial management specialist, g-operations analyst, h- transport specialist, i-principal project implementation officer, j-program/project implementation officer, k-principal project specialist, l-assistant project analyst, m - consultant

13 Map 1 98o00'E 108o00'E GREATER MEKONG SUBREGION Lao Cai PHNOM PENH TO HO CHI MINH CITY HIGHWAY PROJECT Thai Nguyen Lang Son Yen Bai (as completed) Bac Giang Sing HA NOI Louangnamtha Nambak Ha Long Hoa Binh Hai Phong Xam-Nua Houayxay Mekong River 19o00'N Chiang Mai Gulf of Tonkin Ninh Binh Chiang Kong Louangphrabang Chiang Rai LAO PEOPLE'S DEMOCRATIC REPUBLIC 19o00'N Vinh Pakxan Ban Lao VIENTIANE Nong Khai Udon Thani Thakhek Nakhon Phanom Phitsanoulok Khanthabouri Phin THAILAND Gulf of Martaban Bannet Narong Nakhon Sawan Dong Ha Dansavanh Mukdahan Lao Bao Hue Da Nang Bua Yai VIET NAM Laman Ubon Ratchathani Nakhon Ratchasima Nam Tok Suphanburi Chonburi ANDAMAN Phanom Sarakham Aranyaprathet Sisophon Siem Reap Poipet Petchaburi SEA Quy Nhon Pleiku Banlung Stung Treng CAMBODIA Tonle Sap Hua Hin Quang Ngai Samakkhixai River Mekong Ayuttaya BANGKOK Pakxe Chongmek Surin Kratie Sattahip Trat Pursat Nha Trang Kompong Cham PHNOM PENH Noek Loeung Svay Rieng Kampot Gulf of Thailand Thu Dau Mot Ho Chi Minh City Sihanoukville Ha Tien Vung Tau 10o00'N 10o00'N Ca Mau SOUTH CHINA SEA Surat Thani National Capital City/Town Phuket Main Road Project Road Songkhla N Hat Yai Minor Improvement Road Railway River International Boundary Boundaries are not necessarily authoritative. Kilometers 98o00'E 108o00'E GMS a HR

14 Map o 00'E 107 o 00'E GREATER MEKONG SUBREGION PHNOM PENH TO HO CHI MINH CITY HIGHWAY PROJECT (as completed) Tonle Sap Kompong Thom 12 o 30'N Pursat Kratie 12 o 30'N Kompong Chhang Mekong River Kompong Cham Snoul An Loc C A M B O D I A PHNOM PENH Prey Veng Bao Loc Kompong Speu Tay Ninh Chon Thanh Sre Umbell Takeo Noek Loeung Kompong Trabec Svay Rieng Moc Bai Bavet Go Dau Bien Hoa Sihanoukville Veal Renh Kampot Chau Phu V I E T N A M An Suong Cho Lon Thu Duc HO CHI MINH CITY Ha Tien Long Xuyen My Tho Tan An Phuoc Leo Vung Tau Duong Dong Hon Chong Vinh Long 9 o00'n G u l f o f T h a i l a n d N Kilometers 104 o 00'E Can Tho Rach Gia Khanh Hung Gia Rai Vinh Loi Quan Long Nam Can Ba Dong Mouth of Mekong S o u t h C h i n a National Capital City/Town Airport Project Road S e a Minor Improvement Road Main Road Secondary Road Railway River International Boundary Boundaries are not necessarily authoritative. 107 o 00'E 9 o00'n GMS b HR

15 I. PROJECT DESCRIPTION 1. The Asian Development Bank (ADB) launched a strategy in 1992 to strengthen cooperation and economic links in the Greater Mekong Subregion (GMS) countries. 1 Facilitation of the cross-border movement of goods, vehicles, and people between and among the countries of the GMS is a priority under the GMS economic cooperation program (GMS program) and supports its aims of enhancing connectivity, promoting competitiveness, and engendering a greater sense of community. Improved efficiency resulting from the easier flow of goods and people across borders promotes the competitiveness of participating countries, individually and as a subregion. Improving the Bangkok Phnom Penh Ho Chi Minh City (HCM City) Vung Tau highway was assigned the highest priority by the governments of the GMS countries during the ADB-sponsored Second Conference on Subregional Economic Cooperation in August The road between Bangkok and Phnom Penh was already completed or being improved through other ADB assistance. The road between HCM City and Vung Tau was also being improved with ADB assistance. The road between Phnom Penh and HCM City (the Project) was the remaining section of the highway needing improvement. 2. The Project 2 has two country components, one for Cambodia and the other for Viet Nam. The main objectives of the Project were to encourage traffic and trade flows between Cambodia and Viet Nam by improving the highway link between Phnom Penh and HCM City; improving facilities at the border crossing; and facilitating Government efforts to reduce bureaucratic and procedural constraints to cross-border trade. At appraisal, the project scope of the Cambodia component of the Project consisted of: (i) civil works for reconstruction of 105 kilometers (km) of Route Number 1 (RN1) from Neak Leoung to the border with Viet Nam at Bavet; (ii) civil works for minor improvements to 58 km of RN1 from Phnom Penh to the Mekong River ferry; and (iii) consulting services for construction supervision. The Viet Nam component of the Project consisted of: (i) civil works for reconstruction of 80 km (consisting of 22 km of National Highway No. 1A [NH1A] between Thu Duc and An Suong and 58 km of National Highway No. 22A [NH22] from An Suong and the border with Cambodia at Moc Bai); (ii) consulting services for construction supervision; and (iii) incremental assistance support to the project management unit (PMU). 3. The project framework at appraisal compared with the achievements of the Project is shown in Appendix For the Cambodia component, the Kingdom of Cambodia was the Borrower, and the Ministry of Public Works and Transport (MPWT) was the Executing Agency (EA). The ADB loan 4 of $40 million equivalent from ADB s Special Funds resources financed all of the foreign cost and part of the local cost. For the Viet Nam component the Socialist Republic of Viet Nam was the Borrower, and the Ministry of Transport (MOT) was the EA. The ADB loan of $100 1 GMS countries include Cambodia, the People s Republic of China, Lao People s Democratic Republic, Myanmar, Thailand, and Viet Nam. 2 The Project refers collectively to both the Cambodia component and the Viet Nam component. 3 The project framework at appraisal was modified to be in line with the revised design and monitoring framework now adopted by ADB. 4 ADB Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia and to the Socialist Republic of Viet Nam for the Greater Mekong Subregion: Phnom Penh to Ho Chi Minh City Highway Project. Manila (Loan 1659-CAM[SF] for $40 million equivalent and Loan No VIE[SF], for $100 million equivalent, approved on 15 December 1998). Advance procurement action to permit prequalification of the civil works contracts under the national road improvement component commenced in January 1997.

16 2 million equivalent from ADB s Special Funds resources financed all of the foreign cost and part of the local cost. II. EVALUATION OF DESIGN AND IMPLEMENTATION A. Relevance of Design and Formulation 5. The Project was and remains consistent with ADB s strategy for Cambodia and Viet Nam and the GMS program. The Government s development strategy in Cambodia focuses on achieving sustainable economic growth. ADB supports this in the road subsector by emphasizing the need to restore the primary road network and provide safe and economic travel to the country s main urban centers and border crossing points. In Viet Nam, ADB supports the Government strategy of improving transport efficiency that is conducive to economic growth and developing and strengthening links between Viet Nam and its neighbors. The GMS program promotes the development of participating countries by strengthening economic links among them. In particular, it emphasizes encouraging trade and investment among GMS countries, realizing or enhancing development opportunities, resolving or mitigating cross-border problems, and meeting common resource needs. It covers seven sectors (transport, energy, telecommunications, environment, human resource development, trade and investment, and tourism). ADB s strategy in both Cambodia and Viet Nam is in line with the GMS program and emphasizes improving the transport network and connections to major border crossing points. The project design was consistent with the strategic objectives for the road subsector in both countries. Improving access to border posts would help to integrate the two countries and their economic development by increasing the flow of passengers and goods traffic. The Project was assessed highly relevant to the needs of the transport sector in both Cambodia and Viet Nam The Project was prepared by an ADB-financed feasibility study 6 and ADB-financed technical assistance (TA) for detailed engineering. 7 Fact-finding took place from 21 April to 9 May However, formulation of the Project was hampered by the political situation in 1997 in Cambodia, when processing had to be put on hold and the management review meeting (MRM) scheduled for 22 August 1997 was cancelled and the Project deferred. Appraisal of the Project took place one year after fact-finding from 20 April to 9 May B. Project Outputs 7. The main Project outputs for each country component are described below. 8. Cambodia Component. At appraisal it was envisaged that the road from Neak Loeung to the Cambodia Viet Nam border at Bavet (105 km) would be rehabilitated and interim repairs from Phnom Penh to Neak Loeung (58 km) would be undertaken. These civil works were to be undertaken in one contract package. The road from Neak Loeung to the border at Bavet would be improved to a double bituminous surface treatment standard with an overall width of 11.5 meters (m). In addition, four new bridges would be built and six existing bridges rehabilitated. It was also envisaged that new border facilities at Bavet would be designed and constructed. These were all implemented as envisaged, but the interim repairs of the Phnom Penh Neak 5 For an explanation of rating descriptions used in ADB evaluation reports, see: ADB Guidelines for Preparing Performance Evaluation Reports for Public Sector Operations. Manila. 6 ADB Technical Assistance for Promoting Subregional Cooperation among Cambodia, The People s Republic of China, Lao PDR, Myanmar, Thailand and Viet Nam. Manila. (TA No for $4.0 million).. 7 ADB Technical Assistance to the Socialist Republic of Viet Nam for Ho Chi Minh City to Phnom Penh Highway Project. Manila (TA 5649-REG for $3.0 million.

17 3 Loeung section were transferred to the Emergency Flood Rehabilitation Project (EFRP) 8 because of floods in The rehabilitation of Trabek bridges 1 and 2 was deleted from the scope of the Cambodia component following requests from the EA on 27 November 2001 and 7 December These bridges were heavily damaged in the floods of 2000 and their rehabilitation was undertaken by the EFRP. 9. The main civil works bids for Neak Loeung Bavet were significantly lower than the engineers estimate and the amount allocated for civil works in the loan agreement (LA), so in 2001 ADB approved use of loan savings to finance the rehabilitation of road RN11, which had been damaged by the floods in A reallocation of about $8 million was made to cover civil works under the EFRP. 10 The extension of the scope of the Cambodia component included subproject RN11C under the EFRP. RN11C involved the rehabilitation of the whole road for about 97 km and was subdivided into four contracts: 11C-1, 11C-2, 11C-3, and 11C-4. All these contracts were awarded and the work was completed in The construction of border facilities at Bavet was initially included under the civil works contract for Neak Loeung Bavet and a provisional sum was provided under the contract. However, the contractor experienced difficulties in implementing the main civil works, so a decision was taken to call for bids for construction of the border facilities under a separate contract (para. 37). The completed border facilities at Bavet have had X-ray machines, close circuit television (CCTV), and fire fighting equipment installed. The equipment is sufficient for the current volume of passenger and goods traffic, but more equipment will be required as the traffic increases. 11. Consulting services for supervision and training were implemented as envisaged at appraisal, apart from the extension of time, although this did not result in the costs being higher than those envisaged at appraisal (para. 17). The consultants trained PMU staff through formal presentations and seminars. Staff from PMU assigned to the consultant supervision team as counterpart staff members also received on-the-job training. 12. Viet Nam Component. As envisaged at appraisal, the road improvements to NH1A and NH22A were implemented, except for delays (para 26). The road was improved to asphalt concrete standard with a carriageways of 33 m, 26 m, of 14 m wide, one or two lanes, and paved shoulders, for each of the civil works contracts (para 41). The works also included the construction of eight bridges and the rehabilitation of two bridges. After all contracts were awarded, loan savings were realized. The EA requested on three separate occasions, 11 that 8 ADB Report and Recommendation of the President for a Proposed Loan and Proposal to Use Loan Savings to the Socialist Republic of Viet Nam for the Emergency Flood Rehabilitation Project. Manila (Loan CAM(SF)). 9 For kilometer (km) 24 to Neak Loeung the rehabilitation work was to go to EFRP and the responsibility of the civil works contractor was restricted to maintenance of the road from Monivong Bridge (km 8) to km 24. Work was undertaken on this section at various times, notably September 2000 to February 2001, October 2001 to January 2002 and November 2002 to March When EFRP was approved on 21 December 2000, ADB also approved the use of loan savings and extension of the scope of the Phnom Penh to HCM City Highway Project to cover rehabilitation of the transport system damaged by the floods. Surplus loan funds totaling SDR7,675,000 ($10 million equivalent at the time but subsequently about $8 million equivalent because of the depreciation of the SDR against the dollar and high price escalation) were utilized. The ADB mission fielded in July 2001 agreed with MPWT that the surplus loan funds could be reallocated to the rehabilitation works for the damaged section of RN11 (subproject R11c). On 10 April 2002, ADB approved the awarding of the contract for subproject R11c at $8.5 million (ADB portion $7.3 million) November 2002, 28 January 2004, and June 2005

18 4 additional items be incorporated into the civil works 12 to use the loan savings. These additional civil works were to improve traffic efficiency and reduce the high rate of traffic accidents. These additional works enhanced the overall project objectives and complemented the original scope. They did not represent a change in route, physical site, or location and were fully within the project s purpose 13 and were therefore considered to be a minor change in the scope of the component. The additional works items were incorporated into the existing civil works contracts. At appraisal it was envisaged that a total of 80 km would be completed, but, because of the additional works, the length of road improved under the Viet Nam component eventually totaled km. The incorporation of these additional items meant that the loan closing date was extended. 13. Consultant supervision was implemented as envisaged at appraisal, except for extensions of time because of wide-ranging changes in design (para 26) and the inclusion of additional civil works items because of loan savings. However, the extension of the consultants time did not result in higher costs than those envisaged at appraisal (para 18). 14. Cross-Border Issues. As the objective of the Project was to encourage traffic and trade flows between Cambodia and Viet Nam, attention was paid to reducing the bureaucratic and procedural constraints to cross-border trade. In this context the governments of Cambodia and Viet Nam negotiated and signed a framework agreement for regulating and easing the movement of people, goods, and vehicles across their common border. In November 1999, the GMS Cross-Border Transport Agreement was signed by only three of the GMS countries (Lao PDR, Thailand, and Viet Nam) with the remaining three countries (Cambodia, the People s Republic of China, Myanmar) signing in November Of its 20 annexes and protocols, 16 have already been signed by the six member countries. At the Eighth Meeting of the GMS Transport Forum in Phnom Penh in August 2004, counties agreed to pilot the agreement at key border-crossing points, one of which was the Cambodia and Viet Nam border-crossing at Bavet/Moc Bai. The implementation of the Bilateral Road Transport Agreement between Cambodia and Viet Nam was launched at Bavet/Moc Bai on 30 September C. Project Costs 15. The actual detailed costs for the Cambodia component, the Viet Nam component, and the Project as a whole compared with the costs estimated at appraisal are shown in Appendix 2. For cost comparison, the local currency costs incurred by MPWT in Cambodia and MOT in Viet Nam have been converted into US dollars at the rate prevailing during each transaction. The average rates of exchange used are given in Appendix 3. A summary of contracts financed by ADB for each of the country components is given in Appendix At appraisal, the project cost was estimated to be $195.5 million, of which $110.7 million (about 57%) was estimated to be the foreign exchange cost, including $3.5 million for service charges and interest during construction; and the total local currency cost was $84.8 million (about 43%) including taxes and duties. The ADB loan at appraisal for the Cambodia 12 The additional work items included (a) flyover at Thu Duc intersection on NH1A, (b) flyover at Linh Xuan intersection on NH1A, (c) flyover at Binh Phuoc intersection on NH1A (1.3 km) including reconstruction of Vinh Binh Bridge, (d) flyover at Quang Trung intersection on NH1A, (e) flyover at Cu Chi intersection on NH22A, (f) widening of the road from Cu Chi to Go Dau including Go Dau Bridge, (g) flyover at Go Dua intersection, (h) realignment of the bypass at Trang Bang (3.9 km), (i) upgrading of Provincial Road No. 786 (11.1 km), (j) flyover at Ga intersection, (k) grade separation at Tan Thoi Hiep intersection, and (l) median barrier walls to reduce accidents at various locations. 13 PAI 5.04, paragraph 6.

19 5 component was $40 million equivalent from the Special Funds resources to finance 79% of the Cambodia component cost. The ADB loan at appraisal for the Viet Nam component was $100 million equivalent from Special Funds resources to finance 69% of the Viet Nam component cost. The ADB loans for each component were to finance the civil works, and consulting services for construction supervision. The remaining cost of $10.7 million equivalent for the Cambodia component and $44.8 million equivalent for the Viet Nam component were to be funded by the Borrower of each loan. The appraisal estimate included physical contingencies, provisions for price escalation, and an estimate of service charges during construction. The actual completion cost of the Project was $ million equivalent, with a foreign exchange cost of $ million equivalent (about 50%) and a local currency cost $ million equivalent. ADB financed $ million equivalent or (about 58% of the total project cost). The Governments of Cambodia and Viet Nam funded local costs $95.84 million equivalent. The actual completion cost of the Project was more than that envisaged at appraisal by about $16.30 million equivalent. The increase in costs is attributable to the additional resettlement activities that were undertaken in Viet Nam because of the additional works that were undertaken from loan savings and because of the additional works implemented in Cambodia. If the cost of the original scope of the Project as envisaged at appraisal ($195.5 million equivalent) is compared with the actual completion cost of the original scope of work ($ million equivalent), there was a saving $66.09 million equivalent. This enabled additional items to be included, thus enhancing the overall project scope. 17. Cambodia Component. At appraisal, the cost of the Cambodia component was estimated to be $50.7 million, of which $36.1 million (71%) was estimated to be the foreign exchange cost, and the total local currency cost was $14.6 million (29%). The actual completion cost was $45.25 million equivalent, with a foreign exchange cost of $35.65 million equivalent (79%) and a local currency cost of $9.60 million equivalent (21%). ADB financed $38.15 million equivalent or about 84% of the total cost. The Government of Cambodia funded local costs of $7.10 million equivalent. The actual completion cost, including the extended scope, was $5.45 million equivalent, which was less than envisaged at appraisal. If the cost of the original scope as envisaged at appraisal ($50.7 million equivalent) is compared with the actual completion cost of the original scope of work, the completion cost was $35.92 million equivalent, a saving of approximately $14.78 million equivalent. This was because civil works costs were significantly lower than those estimated at appraisal (para. 38). These savings allowed the additional scope of work to be implemented. Because of the additional scope of work, the consultant supervision time had to be extended. This extension in time, however, did not result in an increase in the consultant supervision cost, the actual cost of which was $3.49 million, the same figure as at appraisal including contingencies. 18. Viet Nam Component. At appraisal, the cost of the Viet Nam component was estimated to be $144.8 million, of which $74.6 million (52%) was estimated to be the foreign exchange cost, and $70.2 million (48%) to be the total local currency cost. The actual completion cost was $ million equivalent, with a foreign exchange cost of $69.73 million equivalent (42%) and a local currency cost of $96.80 million equivalent (58%). ADB financed $90.89 million equivalent (55%). The Government of Viet Nam funded local costs of $75.64 million equivalent. The actual completion cost was more than that envisaged at appraisal by approximately $21.75 million equivalent. The increase in costs is attributable to the additional resettlement activities caused by the additional works undertaken from loan savings. The estimated additional resettlement costs were mainly funded by HCM City People s Committee. If the cost of the original scope as envisaged at appraisal ($ million equivalent) is compared with the actual completion cost of the original scope of work ($93.49 million equivalent), there was a saving of about $51.29 million equivalent, because the civil works costs

20 6 were significantly lower than those estimated at appraisal (para. 41). These savings enabled the additional items to be included, which meant consultant supervision time had to be increased. However, this did not result in an increase in the cost of consultant supervision, which was $6.71 million at appraisal including contingencies and $5.35 million actual. D. Disbursements 19. The loan proceeds for each country component were disbursed in accordance with ADB s Loan Disbursement Handbook 14 by direct payment procedures for both civil works and consulting services. Details of the annual disbursements for each country loan are in Appendix Cambodia Component. The loan was disbursed more slowly than envisaged at appraisal because of project implementation delays (para. 24). Disbursements from the loan account were completed on 20 July 2006, the actual date of loan closing. Following the last disbursement, ADB canceled the undisbursed loan balance of SDR528, ($776,023 million equivalent). 15 This reduced the loan to SDR27,503, Viet Nam Component. The loan was disbursed more slowly than envisaged at appraisal because of project implementation delays (para. 28). Disbursements from the loan account were completed on 12 May 2006, the actual date of loan closing. Following the last disbursement ADB canceled the undisbursed loan balance of SDR4,172, (equivalent to $6,194,502). This reduced the loan to SDR65,272, E. Project Schedule 22. Appendix 6 provides a chronology of major events during project implementation for each country component. The implementation schedule prepared at appraisal compared with actual progress for each of the country components is shown in Appendix The ADB Board of Directors approved the loans on 15 December The Loan Agreement was signed on 20 March 1999 and became effective on 9 November At appraisal, it was estimated the Project would be implemented over 42 months, from March 1999 to August The civil works were to be implemented over a period of 36 months, from June 1999 to May The closing date of both loans at appraisal was 30 June Cambodia Component. The loan was extended three times at the request of the Borrower to 31 December On 22 May 2003 the Ministry of Finance requested ADB approval for the first extension of the loan closing date by 1 year from 1 July 2003 to 30 June 2004 and for loan proceeds to be reallocated. The request was because of delays caused by: 14 ADB Loan Disbursement Handbook. Manila. 15 A cancellation request of SDR370,000 had also been on 31 August The lengthy delay in loan effectiveness was because the resettlement action plan of the Cambodia component did not meet ADB s social safeguard requirements, and thus had not been approved by ADB. As the loan effectiveness for the Viet Nam component was contingent upon ADB approval of the Cambodia component for effectiveness, a considerable delay occurred in the Viet Nam Loan being declared effective. The schedule of implementation set at appraisal assumed that both loans would be effective by February 1999.

21 7 (i) the floods of 2000 and 2001 and the heavy rainfall in 2002, which made civil works difficult; (ii) a disorganized construction plan by the contract; (iii) delay in relocating telecommunications cables; 19 (iv) additional slope protection work to protect the road from future flooding; (v) additional time to carry out remedial works at the collapsed embankment in Svay Rieng bypass which had been constructed on very soft natural ground; (vi) a delay in finalizing the design of border post facilities because of a lack of clarity on construction within border areas identified as no-man s land between the Cambodia and Viet Nam borders. 20 ADB approved the extension of the loan closing date and reallocation of funds on 27 June On 21 June 2004, the EA requested a further extension of the loan closing date by an additional 12 months, from 1 July 2004 to 30 June Although the civil works contract had been substantially completed in mid-january 2004, the contractor was still undertaking the additional works that had been requested. There had also been delays to the construction of the cross-border facilities at Bavet, which had begun only on 16 February These were caused by the change in scope from the original asphalt concrete pavement to a reinforced concrete pavement, to match the Viet Nam side of the border, and by modifications to the fencing. As a result, it was not expected that construction of the border post would be completed until January The EA also asked to be able to use loan savings to finance furnishing and equipment for the border post facilities. The second loan extension was approved by ADB on 12 July A third request for the extension of the loan closing date was made on 12 May 2005 for a 6-month extension from 1 July 2005 to 31 December 2005 and for a minor reallocation of loan proceeds. This was approved by ADB on 31 May 2005 on the grounds that the extension was needed to ensure that the first GMS road project provided adequate equipment and facilities to enable effective implementation of the GMS Cross-Border Transport Agreement at the Bavet- Moc Bai border crossing. It was agreed at the First Tripartite Meeting on 1-3 December 2004 that Cambodia and Viet Nam would establish a common control area for the inspection of goods. Given the shortage of government funds, a request was made to use loan savings to finance the common control area, which would not be completed until September 2005 (i.e., after the loan closing date of 30 June 2005). The loan extension request also included a request to use loan savings to finance additional works for the border facilities and associated costs for consulting services. The third loan extension and loan reallocation was approved by ADB on 31 May Viet Nam Component. The loan was extended twice at the request of the Borrower to 31 December The extension was caused by delays, some of which were caused by the addition of items to the scope of work. 17 The flooding prevented the contractor from working on the road, as access to the quarry and base course materials was not possible for more than 3 months of those years. Because of this, the contractor was given a 4 month extension to the construction period to end in April Some delays can be attributed to the contractors failure to mobilize sufficient human and financial resources, especially during the initial implementation phase. 19 The drawings given by the Ministry of Post and Telecommunication showed inaccurate location of the cables which kept getting damaged by construction works. 20 Viet Nam constructed a concrete fence with plants extending 25 meters into area identified as no-man s land during that time. Also the border gate, according to drawings given to Cambodian staff during the First Tripartite Meeting in June 2002 in Phnom Penh, would move in by 50 meters. This was somewhat against the spirit of the 1997 border treaty signed by both countries. This was to be discussed further at the Second Tripartite meeting. The border point at this area was only clearly marked in September 2006.

22 8 28. By March 2001, only 10% of the civil works had been completed, although about 45% of the 3-year contract period had elapsed. The main reasons for the delay were (i) the time consumed by preparation of the detailed design and redesign; 21 (ii) slow progress in resettlement activities, 22 including the relocation of utilities; (iii) contractors low bid prices and insufficient equipment; (iv) a long rainy season in 2000; 23 and (v) heavy traffic in the construction area. The implementation schedule was about 14 months behind that estimated at appraisal and thus, on 30 September 2002, the Borrower requested a loan extension to 30 June 2005 to enable it to complete the civil works and additional civil works financed by loan savings. About 20 km of road formed a ring through the northern suburbs of HCM City and the road crossed several major radial roads, including four national highways and the major Quang Trung road. All of these intersections were at-grade and controlled by traffic lights, so long delays were already occurring. The original designs had called for flyovers but they were deleted because of an expected shortfall in foreign cost funding from ADB. It then became apparent that there were loan savings and the Borrower asked ADB to approve construction of five flyovers and the widening of a 28-km section of the road from 14 m to 18 m to make it safer for motorcycles. 24 The revised program also required an extension to the consultant supervision contract by 2 years at a cost of $1.06 million. 25 All the additional work was incorporated into the existing contracts through contract amendments. ADB approved the loan extension and the implementation of additional civil works on 5 November On 7 June 2005, the EA asked ADB to approve adding works to the civil works contracts using loan savings and extending the loan a second time from 30 June 2005 to 31 December ADB approved the second loan extension on 8 August F. Implementation Arrangements 29. Cambodia Component. The implementation arrangements were as envisaged at appraisal. The organizational structure of MPWT is shown in Appendix 8. Overall control of the component was the responsibility of MPWT s Secretary of State. A senior engineer was appointed as the project director on a full-time basis. The project director headed a PMU1. The PMU1 was responsible for (i) preconstruction activities (prequalification of contractors, preparation of tender documents for ADB approval, acceptance of detailed designs, pre-bid meetings, and evaluation of bids and award of contract) related to the civil works; and (ii) engagement of consultants for construction and maintenance supervision of the civil works. The 21 The TA for the Project had limited funds and it took a considerable amount of time for the TA consultants to study issues relating to the international nature of the Project. As a result, the preliminary design on which tenders were based was inadequate for execution of the civil works. The design of most of the road alignment and bridges was not complete. This was recognized at the time of Board approval by including the detailed design in the civil works contracts. However, the full extent of the shortfalls in investigation and quantities did not become apparent until detailed design was complete. Moreover, surveys and designs of soft soil treatment, especially soft soil treatment of bridge approach roads were carried out at the construction stage. The detailed design works were time consuming. It also took a long time to carry out the surveys and designs and up to the end of 2000 the design works were basically completed and work quantities of approved new designs increased as compared to the quantities in the bidding documents. This delayed the construction progress. 22 Resettlement was hampered by an influx of squatters along the route. 23 The weather in 2000 and 2001 was not favorable and the south of Viet Nam was affected by the highest flood level in 40 years. 24 The Borrower also requested widening of Cach Mang Thang Tam feeder road but this was rejected since the works were not consistent with the Project objectives 25 This was to be funded by $0.20 million from the savings in the consultants category of the loan and the other $0.86 million from reallocation of unallocated category of the loan. 26 In accordance with ADB Loan Closing Dates. Project Administration Instructions, Section Manila (17 August). Available: Lotus Notes database, LNADBG1, a cumulative loan extension beyond 2 years requires approval by the director general, Mekong Division

23 9 PMU1 s project director was responsible for the day-to-day implementation of the component. The same project director continued throughout the implementation period. There were eight staff within PMU1 over the course of implementation, including engineers, an accountant, and technical and administrative support staff. Two people from each of the two provinces through which the road passed, Svay Rieng and Prey Veng, were assigned alternately to PMU1 for 6 months at a time as part of a training process for provincial staff. 30. Viet Nam Component. The implementation arrangements were as envisaged at appraisal. The organizational structure of MOT is shown in Appendix 8. The implementation of the component was assigned to an agency of MOT based in HCM City, the Project Management Unit My Thuan (PMU-MT). The PMU-MT deputy director general was the project director and was responsible for the day-to-day control of the component. A sub-pmu was established within the PMU-MT headed by a senior engineer, who was responsible to the project director for all aspects of the implementation work. The engineer was supported on a full-time basis by technical, supporting, and administrative personnel. Consultants assisted the unit with its construction supervision responsibilities. The same project director continued throughout the implementation period. There were 16 staff within the PMU-MT over the implementation period, including road and bridge engineers, civil engineers, accountants, transport economists, and resettlement specialists. Other staff were assigned to assist as necessary. G. Conditions and Covenants 31. Cambodia Component. Details of compliance with the covenants under the loan are presented in Appendix 9. The Government and MPWT generally complied with the standard loan covenants, although the covenant on resettlement and compensation to project-affected people was only partially complied with. A full resettlement audit was implemented (para. 62) following complaints from some project-affected people through a nongovernmental organization (NGO). There were also delays in fully complying with environmental mitigation measures and ADB missions noted that the consultants needed to improve these. A report by the supervision consultant specializing in environmental matters in June 2002 documented ADB s environmental concerns and recommended a program of remedial action. Subsequent missions noted that the recommended environmental mitigation measures had been carried out. One of the covenants was that tripartite coordination meetings (Cambodia, Viet Nam, and ADB) on project implementation matters would be held two to three times a year. Although only three formal tripartite meetings were held during the implementation period, several informal meetings were held under a regional technical assistance (RETA). 27 The covenant related to road maintenance was only partially complied with. 32. Viet Nam Component. The Government and MOT generally complied with the standard loan covenants on engagement of consultants and contractors, availability of land, timely provision of counterpart funds, staffing, and reporting. However, the midterm review in November 2001 noted that the consultants needed to improve traffic control facilities during the construction period in the interests of safety. Traffic control subsequently improved and the consultants used more flag-men, better traffic signs, and safety barriers, which reduced the number of accidents. Details of compliance with the covenants under the loan are presented in Appendix ADB Technical Assistance for Facilitating the Cross Border Movement of Goods and People in the Greater Mekong Subregion. Manila. (RETA 5850).

24 10 H. Related Technical Assistance 33. No related TA was associated with the Project. I. Consultant Recruitment and Procurement 1. Consultant Recruitment 34. Consultant recruitment under the Project was undertaken in accordance with ADB s Guidelines on the Use of Consultants as envisaged at appraisal. 35. Cambodia Component. The consultancy contract was signed on 3 December 1999 with the consultant who prepared the detailed engineering design, as envisaged at appraisal. The consultancy supervision contract was based on a 36-month construction period ending in December At appraisal it was estimated that 114 person-months of international and 738 person-months of national consulting experts would be required. However, because of delays in construction, the contract had to be extended by variation orders. The actual input for international consultants was 152 person-months, and for national consultants it was 927 person-months. The original border post supervision consultancy contract supervision was for 6 person-months of international staff and 9 person-months of national staff, i.e. a total of 15 person-months. This was based on an 8-month construction period. The contract was signed on 2 February 2004 and services began on 16 February Because of delays, the final total was 35.5 person-months (12 person-months of international consultants and 23.5 personmonths of national consultants). The increase in the consultants time did not result in any increase in costs (para 17). 36. Viet Nam Component. In June 1999 the PMU-MT invited five international consulting firms to submit technical and financial proposals for consultancy services. The first ranked consultant signed a consultancy services contract in August 1999 for a contract period up to 14 November At appraisal it was estimated that the total consultant supervision would be for 260 person-months of international and 1,450 person-months of domestic consulting experts. At the contract stage, the consulting services were for 228 person-months of international and 713 person-months of domestic consulting services. Because of extensive revisions to the design, and the extension of consulting services to undertake the additional works, the final international consulting services totaled person-months, and the domestic consulting services totaled 1,304 person-months. The increase in the consultants time did not result in any increase in costs (para 18). 2. Procurement 37. The procurement of all goods and services under the Project was carried out in accordance with ADB s Guidelines for Procurement as envisaged at appraisal. As also envisaged at appraisal, advance procurement action to permit prequalification of the civil works contracts was approved in June 1996 for Cambodia and in January 1997 for Viet Nam. 38. Cambodia Component. For procurement and implementation purposes, civil works was covered by a single package 28 using international competitive bidding (ICB) procedures. 28 Contract C2: Neak Loeung to Bavet (105 km) and Contract C1 for resealing and maintenance on the section from Phnom Penh to Neak Loeung (53 km) were combined into one package. The contract also included a provisional sum for construction of border facilities. MPWT had requested ADB approval of single civil works contract on 16 June 1999 to combine C2 and C1.

25 11 Prequalification notices were published in October 1996 and the prequalification evaluation was completed in February A total of 21 firms were prequalified. As a result of civil disturbances in Cambodia in mid-1997, the procurement process was halted. The prequalification recommenced in June 1998 and concluded in August Bids for the contract were invited from prequalified firms on 14 September Of the firms prequalified to participate, 6 firms submitted bids. The bids were significantly lower than the engineers estimate and the amount allocated for civil works in the Loan Agreement. This permitted a reallocation of $8 million to civil works under the Emergency Flood Rehabilitation Project (EFRP). ADB approved the contract amount for the civil works ($22.85 million) and the contract was signed on 8 December There were only limited border facilities during project preparation. The road civil works contract included a provisional sum for the design and construction of a new border post to facilitate cross-border flows. The contractor was instructed that a local designer must be included in the design team as the intention was that the buildings should express traditional Khmer architecture. The design was submitted by the contractor in May 2002 and the priced bill of quantities in October It was decided, however, that the contract should be separate from the main civil works contract (because of the slow performance of the contractor). Bids were invited under local competitive bidding (LCB) procedures in July 2003 and received on 21 August The bid evaluation report was submitted to ADB on 23 December 2003 and was approved on 6 January The contract 29 was awarded on 29 January 2004 and signed on 2 February 2004 with completion due by mid-october Subsequent additions to the project included a separate contract 30 for an external walkway roof. LCB procedures were used. The EA opened and registered the bids for the prequalified bidders on 8 November The contract was awarded to the contractor undertaking the border post construction. Five further contracts 31 for supply of equipment for the border post were also tendered. Of these, four contracts, BPC-2A, BP-C2B, BP-C2D, and BP- C2E were awarded while the fifth contract, BP-C2C, was abandoned after no bids were received. The bid evaluation reports for the four contracts were submitted to ADB on 4 March 2005 and approved on 15 March The contract for BP-C2A was awarded on 14 June 2005, and those for BP-C2B, BP-C2D and BP-C2E on 30 April Viet Nam Component. For procurement and implementation purposes, the civil works were divided into three contract packages 32 using ICB procedures. Prequalification applications were invited in October 1997, and 43 firms responded by the closing date. ADB approved the prequalification evaluation in December Nine applicants were prequalified for Package V1, 17 for Package V2, and 12 for Package V3. Bids were invited from the prequalified applicants on 2 July The closing date for submission was extended to 9 January 1999 to give bidders time to take into account substantial additional issues. Of the 38 prequalified firms, 23 submitted bids: 6 for Package V1, 10 for Package V2, and 7 for Package V3. ADB was informed of the bid prices on 12 January 1999 and was concerned that the bids were very low in comparison to the original estimates, being about 50% lower. On 4 February 1999, ADB asked PMU-MT to ensure that the evaluation reflected ADB s concerns about low prices; schedules 29 Contract BP-C2: Construction of Border Post 30 Contract BP-C2F: Construction of Border Post Walkway Roof. 31 BP-C2A: X-Ray, CCTV, fire-fighting equipment; BP-C2B: office equipment; BP-C2C: laboratory equipment; BP- C2D: computer equipment; BP-C2E: office furniture. 32 Contract V1: On NH1A on the northern outskirts of HCM City and on NH22A (22.12 km); Contract V2: on NH22A from An Suong to the Viet Nam border with Cambodia at Moc Bai (50.33 km); and Contract V3: on NH1A including bridges (7.60 km).

26 12 and resources; and the performance of some bidders on earlier ADB financed projects. PMU- MT responded to ADB in sufficient detail to justify the bids. PMU-MT evaluated the bids with the assistance of the consultant and the bid evaluation report was received by ADB on 29 September After careful review, ADB approved the civil works contracts on 13 October At appraisal, the loan allocation for the civil works was $71.8 million. Because of the low bid prices for the civil works, the loan savings amounted to $35.4 million. The EA asked ADB to approve several variation orders 34 to the civil works contracts, because of the inadequate design, and also additional work items in early J. Performance of Consultants, Contractors, and Suppliers 43. Cambodia Component. PMU1 reported that the performance of the consultants was generally satisfactory and that the consultants performed their tasks professionally and in accordance with their terms of reference. However, there were some deficiencies in their performance. For example, the collapse of the Svay Rieng bypass because of soft soil can be attributed to the consultants inadequate testing of conditions in the area. The consultants produced comprehensive reports, including a final completion report, but their benefit monitoring and evaluation report was inadequate and contained little pre-project (baseline) or post-project data. 44. From the beginning of the contract, the contractor implementing the main civil works lacked staff with appropriate technical and managerial skills. Before the major flood in 2000, the pace of work was slow and it was apparent at the end of 2001 that the contractor could not complete the works on time. However, the contractor made efforts during the second half of 2003 to increase output. The road to Bavet was substantially completed by mid-january Other ancillary works, such as road signs and markings 35 and guardrails, were carried out throughout 2004, although the provision of road signs was not complete until September The asphalt concreting in built-up areas 37 which was due to begin in May 2004 was delayed by slow mobilization of the asphalt batching plant and did not start until December Progress was slow and the work was not completed until May Additional asphalt concrete surfacing between Neak Loeung and Kampong Soeung followed in June and July At appraisal, it was assumed that civil works would be completed by about June 2002, but they were not substantially completed until January Despite the construction delays, the Project Completion Review Mission inspected all the road works and found that the quality of construction was good. As a result the contractor s performance was rated satisfactory. 45. The contractor for the border post at Bavet was not fully mobilized until May 2004, 4-5 months after the signing of the contract. There were delays in the submission of drawings for 33 Contract V1 was valued at $12.7 million, contract V2 at $11.3 million, and contract V3$12.3 million. 34 The variation orders included: (i) increase in quantity of soft soil treatment, (ii) adjustment of pavement design (increase in thickness of asphalt concrete layer), (iii) adjustment of bridge design (widening of Binh Phuoc Bridge, span extension of Ca Bon Bridge and An Ha Bridge), (iv) increase in quantity of side ditches, (v) increase in quantity of lighting system, (vi) addition of Moc Bai Border facilities based on the Cross-Border Agreement, and (vii) increase in quantity of miscellaneous works (earthworks, culverts, slope protection, curbs, road signage and landscaping). 35 The original painted markings as specified were replaced by using thermoplastic road markings. 36 Owing to a combination of slow supply and increased quantities caused by revisions to the road sign schedules as the work progressed. 37 Variations to enhance the scope by the provision of asphalt concrete surfacing on selected sections were undertaken in 2004 and The asphalt concrete road totaled 23 km.

27 13 civil works and services. By July 2004, only 30% of the works had been completed, although 60% of the construction time had elapsed. The works were not completed until March The contract needed a number of major variations to bring the final product into line with Cambodian Government requirements. Clearance of unexploded ordnance and additional quantities of civil works cause delays. Completion of the main border post civil works was 7 months late and completion of additional works for the walkway roof was 5 months late because of the large number of variations required by the Government. The border post at Bavet was opened on 15 December The border post and its equipment were examined by the Project Completion Review Mission and found to be in good order. The equipment was all in working order with the exception of a broken X-ray machine for which spare parts had been ordered. Overall the performance of the contractor was rated satisfactory. 46. Viet Nam Component. The performance of the supervision consultants engaged under the Viet Nam component was considered satisfactory. The consultants were asked to report more fully on environment and social aspects as these matters had not been adequately covered in monthly reports before March The performance of the contractors on the civil works contracts varied. All three of the civil works contractors were using equipment that was too small and insufficient to meet the production rates needed to ensure the work schedule. Much of this equipment was old and badly maintained, so there were frequent breakdowns, resulting in delays. The civil works contractors were also informed on several occasions that there were environmental and safetyrelated issues that they were not taking account of, including: (i) poor maintenance of the existing road; (ii) lack of barriers and adequate signage between the existing road and the work area; and (iii) lack of or inadequate temporary drainage and reduced travel-lane width because of water-ponding. The original scope of the civil works for all three contracts was substantially complete in April 2003, about 9 months behind the schedule at appraisal. However, some of this delay was because contractors had to undertake additional civil works items that had been approved by ADB and before work on the main contracts could be continued. The Project Completion Review Mission inspected all the road works and found that the quality of construction by all contractors was good and their performance was therefore rated satisfactory. K. Performance of the Borrower, Executing Agency, and Implementation Agency 48. Cambodia Component. The performance of the Borrower and the EA was rated satisfactory. 38 Overall responsibility for the Cambodia component was the responsibility of MPWT s Secretary of State. The release of counterpart funds in 2003 was delayed and became worse because of poor revenue collection and national elections. By October 2003, the main civil works contractor had not been paid for 5 months which meant it had cash-flow problems which led to implementation delays. The implementing agency, PMU1, was responsible for the day-to-day control of the component and it effectively managed physical implementation with the assistance of the supervision consultants. Although implementation of the civil works was delayed, the quality of the completed work was satisfactory. 49. Viet Nam Component. The performance of the Borrower and the EA was satisfactory. The overall responsibility of the Viet Nam component was the responsibility of the Vice-Minister of MOT. The implementing agency, PMU-MT, was responsible for the day-to-day control of the component. The PMU-MT effectively managed physical implementation of the component with 38 The performance of the Borrower was considered partially satisfactory during the project implementation stage as resettlement issues were not fully addressed at that time..

28 14 the assistance of the supervision consultants. While implementation of the civil works was delayed, the quality of the completed works was satisfactory. The Project Completion Review Mission, however, had difficulty in collecting actual component costs in Viet Nam from the PMU- MT, as the accounts on local expenditure were at times misleading. 39 PMU-MT record-keeping on resettlement activities was also misleading, with some data conflicting with that obtained on previous ADB review missions. L. Performance of the Asian Development Bank 50. Cambodia Component. The Project was originally administered and supervised from ADB headquarters but was transferred to Cambodia Resident Mission on 12 April ADB conducted 18 review missions, 1 special loan administration mission, a midterm review mission and a loan take-over mission transferring the project to the Resident Mission. Of the 18 review missions, 7 missions were resettlement review missions in response to the problems that had occurred and the subsequent resettlement audit. Review missions included visits to the project site and to the PMU1 headquarters in Phnom Penh where coordination meetings were held. ADB had a total of three project officers involved during the implementation period (two from ADB headquarters and one from the Resident Mission). The role performed by the ADB missions in providing advice on technical issues, preparation and evaluation of bid documents, and matters of loan administration was recognized by the EA and PMU1. However, ADB could not field a sufficient number of missions to fully monitor Government s compliance and effective implementation of the resettlement action plan at the beginning of implementation stage. This has also occurred on other ADB projects. 40 It was also noted that, while project completion review missions fielded from headquarters have officers and analysts assigned full-time, the workload at the Resident Mission does not permit officers and analysts to be assigned full time to a project completion review mission. There is also a need to provide further training for the Resident Mission s project analysts on the collection and analysis of data for a project completion review mission. Overall, the performance of ADB was rated satisfactory. 51. Viet Nam Component. The Viet Nam component was originally administered and supervised from ADB headquarters but was transferred on 7 January 2003 to the Viet Nam Resident Mission. ADB conducted 13 review missions, 2 special loan administration missions, a midterm review mission and a loan take-over mission transferring the project to the Resident Mission. These missions included visits to the project site and also to the PMU-MT headquarters in HCM City where coordination meetings were held. ADB had a total of five project officers involved during the implementation of the Project. The role performed by the ADB missions in providing advice on technical issues, preparation and evaluation of bid documents, and matters of loan administration was recognized by the EA and the PMU-MT. Overall, the performance of ADB was rated satisfactory. III. EVALUATION OF PERFORMANCE A. Relevance 52. The Project is considered to be highly relevant. It was consistent with the Government s development objectives and in line with the ADB s operational strategy in the road subsector for both the Kingdom of Cambodia and the Socialist Republic of Viet Nam. The Project was 39 It appeared at one stage that actual ADB disbursements of local currency were 120% higher than ADB actually disbursed. 40 ADB Report and Recommendation of the President to the Board of Directors for a Proposed Loan to the Kingdom of Cambodia for the Primary Roads Restoration Project (SF). Manila, (Loan 1967-CAM, for $68 Million).

29 15 particularly relevant in the context of the strategic needs to develop and strengthen links between Cambodia and Viet Nam. B. Effectiveness in Achieving Outcome 53. Each of the country components and the Project as a whole were rated effective. The outcome of the Project as envisaged at appraisal (Appendix 1) has been substantially achieved. The primary purpose of increasing the movement of people and goods and vehicles across the Cambodia Viet Nam border at Bavet/Moc Bai, reducing vehicle operating costs (VOCs) and travel time, and increasing the level of traffic was achieved. The road and the border facilities have provided physical infrastructure that will help to realize the project goal of facilitating trade. The increase in the trans-border activities at Bavet/Moc Bai measured both in terms of persons and vehicles crossing the border and of import and export values started increasing in , soon after the completion of the main civil works contract. There have recently been further substantial increases. The total value of trade through the Bavet/Moc Bai border post increased by about 41% per annum between 2003 and The number of people crossing the border increased at an average annual rate of 53% between 2003 and 2006 while the number of vehicles crossing the border increased at an average annual rate of 38% during the same period. 54. However, cross-border movement has not reached its full potential and there is not yet through movement of trade traffic between Thailand, Cambodia and Viet Nam. In September 2006 as a pilot study, 40 vehicles crossed the border between Cambodia and Viet Nam. The majority of freight vehicles at present stop at the border and transfer their goods onto local vehicles which then continue into the other country. 55. Although no specific level of VOC reduction was set as a target at appraisal it has been conservatively estimated 41 that VOCs have been reduced by 10% for passenger cars and by 15% for trucks and buses. In Cambodia, travel time from Phnom Penh to Bavet has been reduced by 30%. Similar reductions have been achieved in Viet Nam, especially in urban areas. Several bus routes have reduced their trip times, e.g., one bus route reduced its average trip time from 1 hour and 10 minutes to 50 minutes after the project, a reduction of 28%. 56. Traffic data collected by the project completion review mission show marked differences along the road between Neak Loeung and Bavet. In 2005, traffic between the border and Svay Rieng totaled about 8,500 vehicles per day (vpd), including motorcycles. From Svay Rieng to Neak Loeung, traffic levels were 2,984 vpd. At appraisal it was estimated that traffic growth between 1996 and 2005 would increase from 851 vpd to 1,804 vpd, excluding motorcycles. Actual traffic increased from 851 vpd in 1996 to an average of 1,879 vpd in 2005, excluding motorcycles. In Viet Nam, traffic growth from Cu Chi to Moc Bai has been increasing at about 25% per annum. The annual average growth for traffic just before the border at Moc Bai on NH22A grew from 3,265 vpd in 1996 (excluding motorcycles) to 10,354 vpd in 2005 (excluding motorcycles), a growth of 12% per annum. On NH1A near Thu Duc the traffic increased from 7,784 vpd in 1996 to 29,310 vpd in 2006, an average growth of 14% per annum. At appraisal it was estimated that passenger traffic and freight traffic would grow on average by 4 10% per annum depending on vehicle type. 57. In 2002 (before the road improvements had been completed), there were 323 accidents on NH1A. In 2005, the figure was 124, a reduction of 60%. Similar reductions have been 41 Consultant Benefit Monitoring and Evaluation Report, March 2006.

30 16 achieved on parts of NH22A, where traffic accidents in 2003 (just before completion of the road improvements) totalled 95. At the end of 2005, this had been reduced to 42, a 56% reduction. C. Efficiency in Achieving Outcome and Outputs 58. Each of the country components and the Project as a whole were rated highly efficient. 42 The Project Completion Review Mission reevaluated the economic internal rates of return (EIRRs) for the Cambodia component, the Viet Nam component, and the overall Project. The economic viability was assessed by computing all incremental benefits and costs resulting from project implementation. At appraisal, the EIRR was calculated for each of the road sections in Cambodia and Viet Nam and for the Project as a whole. At appraisal the EIRR for the Project was 23%. The EIRR for the Cambodia component was estimated at appraisal to be 22% and for the Viet Nam component it was 24%. The recalculated EIRR for the Project as a whole is 25.1%. This compares favorably with the economic opportunity cost of capital of 12%. The EIRR recalculated for the Cambodia section of the Project was 24.1%. For the Viet Nam component as a whole the recalculated EIRR was 25.6% (28.7% for V1, 25.4% for V2, and 21.4% for V3 sections of the component). The primary differences between reevaluation and appraisal were due to (i) revised economic costs derived from actual costs, (ii) longer construction periods caused by implementation delays, and (iii) differences in traffic growth at appraisal and reevaluation. Appendix 10 shows the recalculated EIRRs as well as the supporting assumptions. D. Preliminary Assessment of Sustainability 59. Cambodia Component. The road component in Cambodia was rated less likely to be sustainable. Expenditure on road maintenance in Cambodia has been well below that required, given the condition of the road network. Funds available to the government are also limited and that has meant that fees collected from road users for road maintenance have been used for significant road works, and works in other sectors. In 2006, only $2.4 million of the $12.3 million allocated in the national budget for roads was provided for maintenance. The total amount allocated for 2006 to RN1 in both Svay Rieng and Prey Veng was KR584 million, about $136,300. This equates to $1,282 per km of road to be maintained. For RN11 the total for routine maintenance in 2006 was KR576 million, about $134,500. This equates to $1,500 per km of road to be maintained. For routine maintenance, these levels of expenditure are adequate. Although the Project Completion Review Mission s inspection found that both RN1 and RN11 were in good condition, with little sign of damage, they had not yet required any significant periodic maintenance which will probably be due in late 2007 or early As the level of truck traffic on the project roads is increasing with the growing trade movements between Cambodia and Viet Nam and there is a significant overloading, the need for regular periodic maintenance will increase. At present, there are no weighbridges or axle-load monitoring and to ensure that the road does not deteriorate further from truck overloading it will be necessary to enforce strict adherence to load limits. Although its road maintenance funds are insufficient for the whole Cambodia road network, the Government has prioritized maintenance of roads rehabilitated under externally funded projects, including the project road. The Project Completion Review Mission informed the EA that ADB would continue to monitor the maintenance of the improved roads under through the annual government road maintenance budgets. 42 According to ADB Operations Evaluation Department guidelines, if the estimated EIRR (E) exceeds 18%. a project is normally rated highly efficient. Highly efficient > 18%; efficient 18% E 12%; less efficient 12% > E 6%; inefficient < 6%.

31 Viet Nam Component. The physical and financial sustainability of the component completed in Viet Nam is rated likely. The Government is committed to undertaking maintenance and there is a sufficient flow of funds to cover operation and maintenance (O&M) and periodic and rehabilitation costs. The roads rehabilitated under the component are maintained by regional road maintenance units (RRMUs): in HCM City by RRMU-2 and by Viet Nam Road Administration (VRA) RRMU-7 for NH22A. The RRMUs receive annual budgets from the Government, although the Project Completion Review Mission s discussion with both the RRMUs indicated only 70-75% of the requested budget was received. Given that the project roads are only 3 years old, the budget is adequate for maintenance, but periodic maintenance will be required in a few years time and the budget allocation needs to increase accordingly. The RRMUs currently receive an average of $2,100 $2,900 per km. The Project Completion Review Mission s inspection found that the roads were in good condition, with little sign of damage. However, as in Cambodia, the level of truck traffic and overloading on the roads is high and the necessity for regular periodic maintenance will increase. E. Impact 1. Environmental Impact 61. It was envisaged at appraisal that for both the Cambodia and the Viet Nam components there would not be any adverse environmental impacts as the civil works consisted of rehabilitation of an existing road. Initial environmental examinations (IEE) were undertaken during project preparation and these concluded that the environmental impacts of the two components during construction and operation would be minor. 62. The civil works contract documents for both components included environmental impact mitigation measures to be implemented during construction by the contractors. However, these mitigation measures were not always fully complied with. Environmental concerns included: (i) poor maintenance of the existing road, (ii) insufficient traffic control measures to minimize accidents during construction, (iii) lack of or inadequate temporary drainage and reduced travellane width because of water-ponding, (iv) borrow pits beside the road whose steep slopes posed a safety risk to people and animals, (v) dust in sections under construction and in unfinished sections, (vi) erosion of embankments, and (vii) disruption of the normal course of business and daily life in communities. The contractors did improve their mitigation measures after repeated warnings. In order to improve traffic safety the EAs employed traffic controllers (police staff) to improve traffic safety at critical points. The supervision consultants monitored the civil works contractors to ensure that environmental mitigation measures were properly implemented. 2. Socioeconomic Impact 63. The socioeconomic impact of both country components has been significant. In Cambodia, the level of development along RN1 has increased. There has been significant ribbon development, including residences, buildings, and shops, between 2000 and the time of the Project Completion Review Mission. At the Bavet border post, the increase in both passenger and goods traffic from Viet Nam has led to development, including several casinos and hotels on the Cambodia side of the border that attract large numbers of tourists. The number of ancillary services, such as restaurants and gas stations, has increased along the road. An industrial park close to Bavet has also recently opened, providing employment opportunities for the local residents. In Viet Nam the urban sections of the project close to HCM

32 18 City in particular have benefited from the road improvements, although benefits are now being observed in other project areas. New industrial areas offering employment opportunities have been built near the project roads in Viet Nam. 43 One of these industrial areas employs over 10,000 people and is planning to expand its activities in a new site. No indigenous peoples and/or ethnic minority issues arose during project implementation. 3. Resettlement Impact 64. Cambodia Component. A resettlement action plan undertaken at appraisal identified 5,920 project affected persons living in 1,184 households who would be affected by the project. The calculation was based on an inventory in a corridor of influence 18 meters (m) from the road centerline. Following loan approval on 15 December 1998, between March and October 1999 the Government conducted a new census of project-affected persons and a detailed measurement survey of all fixed structures inside the 50 m right-of-way, identifying those found within (i) 10 m, (ii) 10 m to 15 m, and (iii) 15 m to 25 m from the road centerline. The Government wanted to know the resettlement costs of clearing various widths of the right-ofway before deciding what corridor of influence to use. Because the Government changed the resettlement action plan and the valuations contained in it, the loan could not be made effective 44 until ADB had approved it. ADB fielded a Resettlement Review Mission from 24 to 26 October 1999 and it was agreed that the corridor of influence would be m from the road centerline. The new resettlement plan stated that only 1,086 households would be affected by the project. After the loan became effective on 9 November 1999, resettlement activities began. On 14 February 2002, a report prepared by Legal Aid of Cambodia and the NGO Forum on Cambodia on behalf of 99 families living along the road in Prey Veng Province stated that several believed their compensation was inadequate. In response to the issues raised, an ADB Resettlement Review Mission was fielded on 1-4 June 2002 and found that nobody in the sites mentioned by the Legal Aid of Cambodia report had received compensation for lost land. The mission proposed that a tripartite group containing representatives of IRC, the NGO Forum, and ADB would conduct a resettlement audit of RN1. This audit began in November 2004 and documents provided by IRC in November 2006 showed that RGC had completed compensation payments to the affected persons identified during the resettlement audit, as agreed by ADB, NGOs, and project affected persons. In response to a letter sent by the NGO Forum on Cambodia in January 2007 on 93 outstanding cases, ADB facilitated meetings between the NGO and the Government and recommended that outstanding issues should be investigated. In response to a letter dated 30 July 2007 from another NGO (CD Cam), ADB undertook another review to determine the validity of the complaints and work with the Government to resolve them. Appendix 11 gives the background to the resettlement and the resettlement audit. 65. Viet Nam Component. A resettlement action plan undertaken at appraisal identified 5,585 households and 3,322 commercial and residential structures that would be affected by the project. The Project Completion Review Mission determined that, under the original scope of the component, the actual number of households affected was less than envisaged at appraisal. The actual cost of land acquisition, resettlement, and unexploded ordnance clearance was $32.37 million. The 3% increase over the appraisal estimates was because some resettled people requesting compensation above market rates. Because of the incorporation of additional 43 The Trang Bang Industrial Park and the Moc Bai Economic Zone are two large industrial zones that have developed along NH22A since the implementation of the project. 44 As the loan could not be made effective and there was a cross-effectivity agreement with the Viet Nam loan, i.e. until both loans satisfied all of ADBs effectiveness criteria then neither loan could become effective. Viet Nam had already satisfied ADBs loan effectiveness criteria but could not commence civil works due to Cambodia not having satisfied ADBs effectiveness criteria.

33 19 works into the civil works contracts, additional resettlement became necessary, especially within the HCM City area. The total for the additional land acquisition and resettlement compensation amounted to $31.96 million. No indigenous peoples, ethnic minorities, vulnerable groups, or non-titled people (e.g. people living in informal settlements) along the right-of-way were affected. All the project affected persons had their living conditions improved or restored because of the increase in economic activity in the area (para 63). Appendix 11 gives further details on the resettlement. IV. OVERALL ASSESSMENT AND RECOMMENDATIONS A. Overall Assessment 66. The overall assessment of the Project, based on based on separate assessments of the Cambodia and Viet Nam components, was that it was successful. Both components were rated successful. To arrive at this overall assessment, the individual country component ratings were aggregated using weightings developed by the Project Completion Review Mission: Cambodia component (26%); and Viet Nam component (74%). These reflect the relative importance of the component to expected overall project outcomes, taking into account its contribution to project cost at appraisal. The rating of each component was based on a review of its relevance, effectiveness, efficiency, and sustainability. 45 Appendix 12 includes the quantitative assessment of each country component s performance to determine the overall project rating. B. Lessons Learned 67. The Project encountered problems in both Cambodia and Viet Nam regarding the performance of the contractors, resettlement, and noncompliance with environmental mitigation measures. 68. The prequalification of firms that do not have the capacity to undertake the civil works in a timely manner not only results in delays but extends the period of the construction supervision consultants. There was no effective measure to ensure that bidders who passed the prequalification and won the contract had the required equipment, working capital, and management staff at the project sites as stipulated in the documents. The prequalification process needs to be more rigorous to avoid delays caused by the incorrect choice of contractors. 69. There were several areas where resettlement issues affected the completion of the civil works, especially in Cambodia, where a resettlement audit became necessary. The resettlement audit was instrumental in improving the Ministry of Finance s understanding of proper resettlement practices and has improved overall resettlement practice in Cambodia. In future, ADB needs to undertake a careful analysis of the legal and policy framework in a country in relation to ADB s policy, which may help to anticipate and address potential resettlement risks. The management structure for planning and implementing resettlement needs careful thought and planning to avoid conflicts of interest and to ensure efficient implementation. In Viet Nam, some residents were not satisfied with the resettlement payments and would not move until they were compensated at higher than market rates. Civil works cannot be continually delayed because of individuals attempting to receive additional benefits. 45 This project completion report is part of a sample of project completion reports independently reviewed by the Operations Evaluation Department. The review has validated the methodology used and the rating given.

34 Environmental problems caused by contractors not taking an active role in protecting the environment could be avoided by more active monitoring. One way of doing this would be to withhold payment from contractors if they have not carried out environmental mitigation measures. Implementation of environmental mitigation measures should be included in tender documents and contracts, and where possible separate cost estimates for mitigation measures should be made. An environmental management action plan should also be prepared for project implementation. C. Recommendations 1. Project-Related a. Future Monitoring and Follow-Up Action 71. The maintenance of project facilities is critical to the long-term success of the project roads. The rapid increase in the levels of traffic since appraisal requires an adequate maintenance budget for the roads. ADB should regularly monitor the maintenance of the roads in both countries by analyzing the Government s annual budget allocations. b. Covenants 72. Strict adherence to the resettlement action plan agreed at ADB Board approval is essential. To avoid delays to civil works, affected people need to be informed of compensation rates and their entitlements as agreed under the resettlement action plan. ADB should allocate more resources to regular reviews of the implementation of resettlement plans of ongoing and future projects from the initial stage. c. Timing of Project Performance Evaluation Report Preparation 73. A project performance evaluation should be undertaken in 2009 to determine whether the Project is still meeting its objectives. 2. General 74. Maintenance of the Project roads must be the top priority so the assets will continue to used by local people and contribute to the social and economic growth of Cambodia and Viet Nam. Funds must be made available for timely and effective implementation of road maintenance.

35 PROJECT FRAMEWORK Design Summary Appraisal Performance Indicators/Targets Project Achievements Key Issues and Recommendations Impact Economic Integration Increased movements (people, goods, and vehicles) across the Cambodia Viet Nam border After project completion records at the border by year of: - number of people crossing - volume and value of goods crossing - number and type of vehicles crossing Data available in Viet Nam and Cambodia on passenger and freight volumes 21 Appendix 1 Reduced time and cost for each movement Records of time expended by those wishing to cross, from initial application to actual crossing, for people,goods, and vehicles These data were not collected in the BME. Travel times between cities have been reduced by 30% due to improved road conditions. Benefits to vehicles using the road within Cambodia and Viet Nam, in terms of lower unit vehicle operating costs Community benefits from better road safety Outcome Improve 240 km of the existing highway between Phnom Penh in Cambodia and Ho Chi Minh City (Thu Duc) in Viet Nam Greater traffic volumes, faster speeds, lower operating costs, changes in vehicle types Reduction in vehicle and pedestrian accidents Improvement works completed for both the Cambodia and Viet Nam sections of the road by 31 May 2002 Traffic volumes have increased and vehicle operating costs for vehicles are 10%-15% lower. Accidents in Viet Nam have been reduced. Data for Cambodia are inconclusive because of poor accident records. Civil works for road components completed in Cambodia in January 2004 and Viet Nam in April Because of loan savings, further work was undertaken in Viet Nam on improving intersection safety by introducing flyovers. Appendix 10 gives details of vehicle operating costs per km for different vehicle types, and also of increasing traffic volumes for Cambodia and Viet Nam components. 9 new bridges were completed under the Viet Nam component compared with the 8 envisaged at appraisal. The number of intersections increased from the original 2 envisaged at appraisal to a total of 10 due to the additional works. Construct customs and immigration infrastructure on the Cambodian and Vietnamese sides of the border Access roads, vehicle parking areas, bond stores, security areas, offices and residential complexes completed by 31 May 2002 Cambodia border post not completed until March 2005 because of delays in design and separate contract bidding. Additional facilities and equipment. Cambodia border post opened 15 December Viet Nam facilities completed April 2003.

36 Design Summary Appraisal Performance Indicators/Targets Project Achievements Key Issues and Recommendations Clear road reservation of No ordnance contamination within the project road reservation Achieved unexploded ordnance by 31 May 2002 Implement a bilateral agreement between Cambodia and Viet Nam that will harmonize, regulate, and simplify cross-border movements Component/Outputs 4 civil works contracts for road improvement: - Cambodia 1 contract (reconstruction 105 km, improvement 55 km) - Viet Nam 3 contracts (reconstruction of 80 km) Enabling protocols and regulations negotiated, signed, and in operation by 31 December 2001 at the latest and preferably by 31 October 1999 Civil works contracts signed by 31 March 1999 Civil works commenced by 1 June 1999 Civil works complete by 31 May 2002 Cross-Border Transport Agreement signed between Cambodia and Viet Nam in November out of 20 annexes and protocols signed. Others still pending. August 2004 agreement to implement Cross-Border Transport Agreement on a pilot-basis. Full implementation expected early Cambodia contract signed and commenced December 1999, Viet Nam contract signed and commenced November Cambodia civil works completed December 2005, Viet Nam civil works completed December Viet Nam 3 contracts including additional works reconstructed km - Cambodia 2 contracts, one for road construction (105 km) and one for border post. - R11c improved Civil works in Cambodia were substantially complete in January 2004 and in Viet Nam in April Additional works were implemented because of loan savings. 2 consulting services contracts for construction supervision Consulting services contracts negotiated, signed and activated by 15 March 1999 Cambodia December 1999, Viet Nam August 1999 Unexploded ordnance removal Ordnance surveys indicate no contamination Achieved Bilateral agreements regulating and facilitating cross-border movements Full implementation expected in A pilot-basis test commenced in September 2006 to enable 40 vehicles to travel from Cambodia to Viet Nam. Appendix 1 22

37 Activities 1. Detailed engineering and preparation of tender documents 2. Procurement 3. Civil works (road improvement) 4. Construction supervision 5. Capacity-building consulting services. Inputs Financing from the ADBs Special Fund resources $40 million for Cambodia - $100 million for Viet Nam Counterpart financing from the Governments 23 Appendix 1 $11 million for Cambodia $45 million for Viet Nam ADB = Asian Development Bank, MPWT = Ministry of Public Works and Transport (Cambodia), km = kilometer, MOT = Ministry of Transport (Viet Nam), NH = national highway.

38 24 Appendix 2 APPRAISAL AND ACTUAL PROJECT COSTS Table A2.1: Appraisal and Actual Cambodia Component Costs ($ million) Item Appraisal Estimate Foreign Local Exchange Currency Total Foreign Exchange Actual Local Currency Total A. Base Cost 1. Land/Resettlement/UXO a Civil Works Consultant Supervision Government Management Subtotal (A) B. Contingencies 1. Physical Price Subtotal (B) C. Service Charge during Construction Total (A+B+C) D. Extended Scope 1. Civil Works (Emergency Flood Rehabilitation) Equipment Subtotal (D) Total (A+B+C+D) UXO = unexploded ordnance. a The actual cost of UXO clearance was included under the civil works contracts Source: Asian Development Bank estimates.

39 Appendix 2 25 Table A2.2: Appraisal and Actual Viet Nam Component Costs ($ million) Item Appraisal Estimate Foreign Local Exchange Currency Total Foreign Exchange Actual Local Currency Total A. Base Cost 1. Land/Resettlement/UXO a Civil Works Consultant Supervision Government Management Subtotal (A) B. Contingencies 1. Physical Price Subtotal (B) C. Service Charge during Construction Total (A+B+C) D. Extended Scope Additional Works 1. Land/Resettlement/UXO Civil Works Consultant Supervision Subtotal (D) Total (A+B+C+D) UXO = unexploded ordnance. a The actual cost of UXO clearance was included under the civil works of contracts. Source: Asian Development Bank estimates.

40 26 Appendix 2 Table A2.3: Appraisal and Actual Project Costs ($ million) Item Appraisal Estimate Foreign Local Exchange Currency Total Foreign Exchange Actual Local Currency Total A. Base Cost 1. Land/Resettlement/UXO a Civil Works Consultant Supervision Government Management Subtotal (A) B. Contingencies 1. Physical Price Subtotal (B) C. Service Charge during Construction Total (A+B+C) D. Extended Scope in Viet Nam Additional Works 1. Land/Resettlement/UXO Civil Works Consultant Supervision Extended Scope in Cambodia 1. Civil Works (Emergency Flood Rehabilitation) 2. Equipment Subtotal (D) Total Project Cost (A+B+C+D) UXO = unexploded ordnance. a The actual cost of UXO clearance was included under the civil works of contracts. Source: Asian Development Bank estimates.

41 Appendix 3 27 CURRENCY EQUIVALENTS (1 January 31 December) a Year KR to $1.00 D to $ , , , , , , , , , , , , , , , , b 4, , KR = riel/s; D = dong.. a Average over the year, except in 2006 b 2006 exchange rate is based on 1 January 31 October Source: Asian Development Bank.

42 SUMMARY OF ASIAN DEVELOPMENT BANK CONTRACTS FUNDED Loan No CAM PCSS No. Contractor/Supplier Description Currency of Contract Contract Amount US Dollar Equivalent 28 Appendix Civil Works A- Civil Works CEC/Nopawong Construction Co., Ltd. Muhibbah Engineering (Cambodia) Co., Ltd. Muhibbah Engineering (Cambodia) Co., Ltd. Construction of National Road No. 1: Neak Loeung to Bavet (Add.: 7.3KM Asphalt Surfacing Between Neak Loeung town Construction of the Border Post Facility at Bavet, Svay Rieng province USD 22,030, ,030, USD 1,568, ,568, Construction of Walkway Roof at Bavet Border Post, Svay Rieng province USD 773, , Sub-Total Cat. 01: 24,372, Shanxi Construction Engineering Co., Ltd. Rehabilitation of National Road No. 11 Between KM 61 and KM 74 USD 1,891, ,891, Shanxi Construction Engineering Co., Ltd Thavon Vissavayotha Co., Ltd Mong Rethy/Tiwanon 02-Gov't Management (Incremental) Rehabilitation of National Road No. 11 Between KM 74 and KM 91 Rehabilitation of National Road No. 11 Between KM 91 and KM 126 USD 1,993, ,993, USD 2,025, ,025, Rehabilitation of National Road No. 11 Between KM 126 and 151 USD 1,842, ,842, Sub-Total Cat. 01A: 7,754, Various Incremental Expenditures for 2005 USD 449, , Various 03 Consulting Services 0001 SCOTT WILSON KIRKPATRICK/BCEOM/KCEC For Liquidation of the Imprest Account Fund USD 70, , Sub-Total Cat. 02: 520, Consulting Services for the Construction Supervision of RN1 Neak Loeung to the Border USD 1,168, ,168,879.05

43 PCSS No. Contractor/Supplier Description SCOTT WILSON KIRKPATRICK/BCEOM/KCEC SCOTT WILSON KIRKPATRICK/BCEOM/KCEC 0009 Scott Wilson Kirkpatric (UK) 06- Equipment 0011 TAKRAL Brothers Pte Ltd COMIN KHMER 0013 TAKRAL Brothers Pte Ltd Various China GEzhouba Group Foreign Muhibbah Engineering (CAMB) Co., Ltd. Currency of Contract Contract Amount US Dollar Equivalent Consulting Services for the Construction Supervision of RN1 Neak Loeung to the Border GBP ( ) 726, ,187, Consulting Services for the Construction Supervision of RN1 Neak FF 5,959, , Loeung to the Border Consulting Services for the Construction Supervision of Border USD 235, , Post Facility at Bavet Sub-Total Cat. 03: 3,486, Supply and Delivery and Installation of a Server System and Computer Equipment at Border Post Facility at Bavet USD 110, , Supply and Delivery and Installation of Baggage X-Ray, Electronic and Fire USD 639, , Equipment Supply and Delivery and Installation of the Office Equipment at Border Post USD 36, , Facility at Bavet Supply and Delivery and Installation of the Office Furniture at Border Post USD 33, , Facility at Bavet Procurement of TYPE A Vehicle for the Construction Supervision of the Border USD 33, , Post Building Facilities For Liquidation of the Imprest Account Fund USD 3, , Sub-Total Cat. 04: 857, FF = French Franc, GBP = British Pound, ICB = international competitive bidding, USD = United States dollar. Source: Asian Development Bank. TOTAL 36,991, Appendix 4 29

44 SUMMARY OF ASIAN DEVELOPMENT BANK CONTRACTS FUNDED Loan No VIE PCSS No. Contractor/Supplier Description Contract Amount Disbursed Amount US$ Equivalent CONSULTING SERVICE China Engineering 0001 Consultants, Inc. in associate Construction supervision of the civil $7,046,371 with Louis Berger Inc. works and to act as Engineer $7,046,371 $7,046,371 Sub-total $7,046,371 $7,046,371 $7,046,371 CIVIL WORKS Anam Cienco No.8 Joint V1: Road Contract length : km on $7,025,327 $7,025, Venture the National Highway 1A and 22ª. D349,069,265,335 D349,069,265,335 $29,353,975 Anam Cienco No.8 Joint V2: Road Contract length: km on the National Highway 22A ending at the border between Viet Nam and $7,029,081 $7,032,609 $27,387, Venture Cambodia D316,403,077,680 D316,403,077, Cienco 8, Cienco 6, Cienco 5 Joint Venture V3: Road Contract length: 8.90 km on the National Highway1A involving the construction of 8 bridges. $8,489,247 D252,438,695,631 $8,489,247 D252,438,695 $24,719,773 Sub-total $81,461,286 GOVERNMENT MANAGEMENT (INCREMENTAL) Incremental Expenses incurred from 0005 PMU-MT July to November 2000 $69,008 $69,008 $69,008 Incremental Expenses incurred from 0006 PMU-MT December 2000 to March 2001 $67,627 $67,627 $67, PMU-MT Salary and Admin cost April-July 2001 D1,003,799,970 D1,003,799,970 $67, PMU-MT Staff salary & Admin cost August- September 2001 D433,024,360 D433,024,360 $28,777 Sub-total 232, Appendix 4 TOTAL 88,740,262 PMU-MT = project management unit-my Thuan. Source: Asian Development Bank.

45 Appendix 5 31 PROJECTED AND ACTUAL DISBURSEMENTS ($ million) Table A5.1: Loan No CAM Year Projected Actual Total Source: Asian Development Bank loans financial information system. Figure A5.1: Disbursement Details Details $45 $40 $35 $30 $25 $20 $15 $10 $5 $ Projected Actual

46 32 Appendix 5 Table A5.2: Loan No VIE Year Projected Actual Total Source: Asian Development Bank Loans Financial Information System. Figure A5.2: Disbursement Details Details $120 $100 $80 $60 $40 $20 $ Projected Actual

47 Appendix 6 33 CHRONOLOGY OF MAIN EVENTS Table A6.1: Loan No CAM Year Date Event February Reconnaissance Mission fielded 21 April - 9 May Fact-Finding Mission fielded March Advertisement of the project in ADB Business Opportunities 14 April ADB management review meeting 20 April 9 May Appraisal Mission fielded 11 June ADB staff review committee meeting 14 September Invitations issued to bid for road rehabilitation contract 5-6 November Loan negotiations 15 December ADB approves loan March Loan agreements signed 23 June ADB approves a first extension of loan effectiveness from 18 June 1999 to 17 September November ADB loan declared effective 3 December Contract for construction supervision consultant signed 8 December Contract for road rehabilitation signed July Special Loan Administration Mission fielded March - 4 April Loan Review Mission fielded 14 February NGOs sent a report on behalf of 99 affected persons on resettlement issues 15 April Project administration transferred from ADB s Mekong Infrastructure Division (MKID) to Cambodia Resident Mission 1-4 June Resettlement Review Mission fielded June Special Project Administration Mission fielded August Resettlement Review Mission fielded February - 1 March Second tripartite coordination meeting held 7 February - 4 March Loan Review Mission fielded 6-15 October Loan Review Mission fielded 3-6 December Review mission fielded (Environment) February Contract for construction of border post facilities signed 1 March Contract variation for the improvement of road section in Svay Rieng town approved by ADB 1-4 March Loan Review Mission fielded 6-21 May Loan Review Mission fielded 30 June ADB approves a first extension of loan closing date July Third tripartite coordination meeting on cross border post held 31 August First partial loan cancellation of SDR 370,000.00

48 34 Appendix 6 Year Date Event 27 October - 12 November Resettlement Review Mission fielded January Contract for walkway roof for the border post facilities at Bavet approved March Loan Review Mission fielded May Resettlement Review Mission fielded 30 June ADB approves a second extension of the loan closing date 8-11 August Resettlement Review Mission fielded 1 September Resettlement Review Mission fielded 3-23 November Resettlement Review Mission fielded 31 December ADB approves a third extension of the loan closing date July Closing of loan account 7-24 November Project Completion Review fielded January NGO Forum on Cambodia sends a letter on 93 outstanding resettlement cases 27 February Meeting between the Government, NGOs and ADB held to address the 93 outstanding resettlement cases

49 Appendix 6 35 Table A6.2: Loan No VIE Year Date Event April 9 May Fact-finding Mission 18 July PMU-MT sent prequalification invitation for civil works contracts V1,V2,V3 30 September PMU-MT sent invitation letter for consulting services January ADB approves pre-qualification 14 April Management review meeting 20 April 09 May Appraisal Mission 11 June SRC held 2 July Issuance of invitations to bid for civil works (V1,V2 & V3 contracts) 9 July 5 6 November Loan negotiations 17 November Circulation of RRP January Bidding documents submitted for civil works V1, V2 & V3 contracts 20 March Loan Agreement signed 3 September MOT submitted proposal to PM for allocating loan savings to 13 additional work items 9 November Civil works contracts awarded (V1, V2 & V3) 9 November Loan effectiveness 15 November Notice to proceed issued to successful bidders of civil works contracts V1,V2 & V3 December PM approves the request for allocation loans savings to 13 additional work items January ADB review mission on additional work items 28 January ADB holds meeting on the mission to prioritize the proposed additional work items 16 February MOT asks ADB to approve 13 additional work items 21 February Consultant submits a proposal to review the feasibility study report and conceptual design of eight priority additional work items to PMU-MT 16 October ADB Special Loan Administration Review Mission 20 November ADB financial management specialist inspects PMU-MT s financial processing procedures and project disbursement schedules 18 December ADB review mission chairs a meeting to discuss contract variations and revise cost estimates January First partial cancellation of loan savings: SDR1.56 million March ADB review mission 4 April PMU-MT submits final review report and drawings for the feasibility study report and concept design for 7 additional work items 25 April PMU-MT sends a request for 7 additional work items to ADB for approval 1 June State Treasury s mission visits the project site and reviews the engineer s payment procedures to the contractors

50 36 Appendix 6 Year Date Event 27 June Revision to the final review report and drawing for the feasibility study report and concept design for 7 additional work items submitted 14 September PMU MT s submits variation order No.7 (repair work for the existing road), variation order No. 4 (Moc Bai Border) and adjustment of pavement structure 21 September ADB approves variation orders for 3 civil works contracts the soft soil treatment 5 14 November ADB Midterm Review Mission 6 November PMU MT s submits addenda to civil works contracts for additional work items February MPI sends request to ADB for approval of 13 additional work items, (6 items of which were supported by ADB) 5 April PMU-MT submits request to ADB for extension of loan closing date by 12 months 18 April ADB Special Loan Review Mission June ADB Review Mission 26 June First tripartite coordination meeting: Viet Nam, Cambodia and ADB in Phnom Penh 30 September State Bank of Viet Nam formally request an extension of loan closing date to 30 June October Director, MKID approves the request for utilization of loan savings, reallocation of loan funds and extension of loan closing date 5 November ADB sends formal approval for extension of loan closing date to 30 June November Groundbreaking ceremony for Go Dau 2 Bridge additional work item February ADB Review Mission 28 February 1 March Second Tripartite Coordination Meeting 13 March ADB s approval of cost of additional work items Addendum to Civil Work Contracts 26 June 1 July ADB Review Mission 2 4 July Workshop on single-stop, cross-border customs clearance at Moc Bai, Viet Nam and Bavet, Cambodia 29 July PMU-MT submits report on BME September ADB approves the addendum to the construction supervision services contract 29 October 01 November ADB Review Mission February Second ADB approval of cost of additional work items February ADB Review Mission June ADB Review Mission 28 June PMU-MT submits addendum 3 to the construction supervision services contract 1 July ADB approves addendum 3 to the construction supervision services contract 1 September Replacement of the construction supervision consultant project manager 28 September 01 October ADB Review Mission

51 Appendix 6 37 Year Date Event December PMU-MT submits BME report January ADB Review Mission 17 March ADB approves additional work items addendum 3 to civil work contracts April ADB review mission 31 May PMU-MT submits addendum 3 to civil work contracts 7 June SBV formal requests an extension of the loan closing date to 31 December July ADB Review Mission 13 July ADB approves the final draft addendum 4 to the construction supervision services contract 8 August ADB approves SBV s request for an extension of the loan closing date to 31 December September ADB Special Review Mission December ADB Review Mission 26 December Replacement of the construction supervision project manager 31 December Loan closing date February ADB Special Loan Review Mission 12 May Actual loan account closing date Second partial cancellation of loan savings: SDR4,172,168

52 Activity PROJECT IMPLEMENTATION SCHEDULE 38 Appendix 7