documents.worldbank.orgdocuments.worldbank.org/.../cleared-icr-p092837-docx-0… · web...

Document ofThe World Bank

Report No: ICR00002228

IMPLEMENTATION COMPLETION AND RESULTS REPORT(IDA-46790 IDA-49490 TF-11094)

ON

CREDIT IDA-46790IN THE AMOUNT OF SDR 120 MILLION

(US$190 MILLION EQUIVALENT)

CREDIT IDA 49490IN THE AMOUNT OF SDR 47.4 MILLION

(US$75 MILLION EQUIVALENT)

AND

GRANT TF-11094IN THE AMOUNT OF £6.05 MILLION

(US$ 8.0 MILLION EQUIVALENT)

TO THE

GOVERNMENT OF THE REPUBLIC OF UGANDA

FOR A

TRANSPORT SECTOR DEVELOPMENT PROJECT

June 5, 2017

Transport and ICT Global Practice Africa Region

CURRENCY EQUIVALENTS(Exchange Effective Rate December 2015)

Currency Unit = Uganda Schilling (UGX)US$ 1.00 = UGX 3335UK£ 1.00 = US$ 1.48

US$ 1.00 = SDR 0.6307

FISCAL YEARJuly 1 – June 30

ABBREVIATIONS AND ACRONYMS

AF Additional FinancingAfDB African Development BankAPL Adaptable Program LoanBRT Bus Rapid TransitCAS Country Assistance StrategyDANIDA Danish International Development AgencyDBST Double Bituminous Surface TreatmentDFID U.K. Department for International DevelopmentDRC Democratic Republic of CongoDRS Department of Road SafetyDP Development PartnerDUCAR District, Urban, and Community Access RoadsEAC East African CommunityEC European CommissionEIA Environmental Impact AssessmentEIRR Economic Internal Rate of ReturnESIA Environmental and Social Impact AssessmentESMP Environmental and Social Management PlanGDP Gross Domestic ProductGIS Geographic Information SystemGKMA Greater Kampala Metropolitan AreaGoU Government of UgandaGRC Grievance Redress CommitteeHDM-4 Highway Development and Management Model, version 4 ICR Implementation Completion and Results ReportIDA International Development AssociationISR Implementation Status and Results ReportJICA Japan International Cooperation AgencyKCCA Kampala Capital City Authority

M&E Monitoring and EvaluationMATA Metropolitan Area Transport AuthorityMIS Management Information SystemMoFPED Ministry of Finance, Planning, and Economic DevelopmentMoWT Ministry of Works and TransportMTR Midterm ReviewMTRA Multi-sector Transport Regulatory AuthorityNEMA National Environmental Management AuthorityNERAMP North Eastern Road Corridor Asset Management ProjectNGO Nongovernmental OrganizationNPV Net Present ValueNRSC National Road Safety CouncilNRSA National Road Safety AuthorityNTPS National Transport Policy and StrategyOPRC Output-and Performance-based Road ContractPAD Project Appraisal DocumentPAP Project-Affected PersonPDO Project Development ObjectivePDU Procurement and Disposal Unit (UNRA)PIU Project Implementation UnitPPIAF Public-private Infrastructure Advisory Facility Trust FundRAP Resettlement Action PlanRCDS Road Crash DatabaseRMS Road Management SystemRSDP Road Sector Development ProgramSIL Specific Investment LoanTMT Top Management TeamTSDP Transport Sector Development ProjectTSDMS Transport Sector Data Management SystemUNRA Uganda National Roads AuthorityURF Uganda Road FundURURA Urban and Rural Roads Authority

Senior Global Practice Director:Jose Luis IrigoyenPractice Manager:Aurelio Menendez

Project Team Leader:Negede LewiICR Team Leader:Richard Martin Humphreys/Stephen Muzira

ICR Author:Peter Freeman

UGANDATransport Sector Development Project

CONTENTS

Data SheetA. Basic Information...................................................................................................................iB. Key Dates...............................................................................................................................iC. Ratings Summary...................................................................................................................iD. Sector and Theme Codes.......................................................................................................iiE. Bank Staff.............................................................................................................................iiiF. Results Framework Analysis................................................................................................iiiG. Ratings of Project Performance in ISRs............................................................................viiiH. Restructuring (if any)...........................................................................................................ix1. Project Context, Development Objectives and Design..........................................................12. Key Factors Affecting Implementation and Outcomes..........................................................73. Assessment of Outcomes.....................................................................................................165. Assessment of Bank and Borrower Performance.................................................................237. Comments on Issues Raised by Borrow/Implementing Agencies/Partners.........................32Annex 1. Project Costs and Financing.....................................................................................33Annex 2a. TSDP Outputs by Component................................................................................34Annex 2b. Operational Risk Assessment Framework..............................................................40Annex 3. Economic and Financial Analysis............................................................................46Annex 4. Bank Lending and Implementation Support/Supervision Processes........................52Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR................................54Annex 6. List of Supporting Documents..................................................................................70MAP.........................................................................................................................................72

A. Basic Information

Country: Uganda Project Name:

UGANDA TRANSPORT SECTOR DEVELOPMENT PROJECT

Project ID: P092837 L/C/TF Number(s): IDA-46790, IDA-49490, TF-11094

ICR Date: 6/5/2017 ICR Type: Core ICR

Lending Instrument: Specific Investment Loan Borrower: GOVERNMENT OF

UGANDAOriginal Total Commitment: XDR 120.00 million Disbursed Amount: XDR 106.96 million

Revised Amount: XDR 106.96 millionEnvironmental Category: BImplementing Agencies: Uganda National Roads Authority (UNRA) Co-financiers and Other External Partners: United Kingdom Department for International Development; Japanese International Cooperation Agency

B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 02/05/2008 Effectiveness: 08/05/2010 07/15/2010

Appraisal: 09/30/2009 Restructuring(s): 06/16/201105/31/2013

Approval: 12/10/2009 Midterm Review: 06/10/2012 05/10/2013Closing: 06/30/2014 01/31/2016

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Unsatisfactory Risk to Development Outcome: Substantial Bank Performance: Unsatisfactory Borrower Performance: Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)Bank Ratings Borrower Ratings

Quality at Entry: Unsatisfactory Government: Unsatisfactory

Quality of Supervision: Unsatisfactory Implementing Agency/Agencies: Unsatisfactory

Overall Bank Performance: Unsatisfactory Overall Borrower

Performance: Unsatisfactory

C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators QAG Assessments (if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA): None

Problem Project at any time (Yes/No): Yes Quality of

Supervision (QSA): None

DO rating before Closing/Inactive status: Unsatisfactory

D. Sector and Theme Codes Original Actual

Major Sector/Sector Public Administration Public administration - Transportation 11 11 Transportation Roads and highways 89 89

Major Theme/Theme/Sub Theme Economic Policy Trade 4 4 Trade Facilitation 4 4 Private Sector Development ICT 14 14 ICT Solutions 14 14 Urban and Rural Development Rural Development 45 45 Rural Infrastructure and service delivery 45 45 Urban Development 37 37 Urban Infrastructure and Service Delivery 37 37

E. Bank Staff Positions At ICR At Approval

Vice President: Makhtar Diop Obiageli Katryn Ezekwesili Country Director: Diarietou Gaye John McIntire Practice Manager/Manager: Aurelio Menendez C. Sanjivi Rajasingham

Project Team Leader: Negede Lewi Dieter E. Schelling

ICR Team Leader: Richard Martin Humphreys/Stephen Muzira

ICR Primary Author: Peter Nigel Freeman

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)The project development objective is to improve the connectivity and efficiency of the transport sector through: (i) improved condition of national road network; (ii) improved capacity for road safety management; and (iii) improved transport sector and national road management.

Revised Project Development Objectives (as approved by original approving authority)Not applicable.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1: Average vehicle operating costs (US$ per vehicle-km) reduced on the Gulu-Atiak and Vurra-Oraba roads.

Value quantitative or qualitative)

US$0.352 US$0.224 US$0.224

Date achieved 07/15/2010 06/30/2014 01/31/2016Comments (including % achievement)

Fully achieved by 2014. Data based on Highway Development and Management Model, version 4 manual (HDM-4). Note: Kamwenge-Fort Portal added at AF.

Indicator 2: Travel time on Gulu-Atiak and Vurra-Oraba roads reduced from 2 hours (2009) to 1 hour (2014).


2 hours 1 hour 1 hour


Fully achieved by 2014. Data based on survey by UNRA Directorate of Planning

Indicator 3: National roads in poor condition reduced from 36% to 15%


36% 15% 22%


Not achieved; target of 15% not reached. Indicator was reworded at AF “Roads in good and fair condition as a share of total classified roads (percent)”

Indicator 4: Access of rural population to all season roads in the target areas increased from 64% to 90%


64% 90% 84%

Date achieved 07/15/2010 12/31/2014 01/31/2016

Comments (including % achievement)

Partially achieved. Some 4.95 million people to be provided with access to an all-season access road. The final beneficiary estimate was 4.17 million. This indicator was reworded at AF to “Share of rural population with access to an all-season road (percent)”

Indicator 5: Annual rate of growth of road accident fatalities declines after the National Road Safety Agency (NRSA) becomes operational


7% Less than 7% 4% -3.2%

Date achieved 07/15/2010 12/31/2014 05/14/2011 01/31/2016

Comments including % achievement

Though technically achieved, this was not due to the project. The NRSA was turned down by the Cabinet. Road safety campaigns by the police were likely responsible for the decline in road fatalities. Indicator was changed at AF to “Annual rate of road accident fatalities (7 percent)”

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1: Km of road rehabilitated/upgraded


0 km 159 km 225 km 166 km

Date achieved 07/15/2010 12/31/2014 05/14/2011 01/31/2016


Not achieved at closure. Original target of 159 km exceeded with additional 7 km of road through Arua town. However, works on the 66 km Kamwenge to Fort Portal road only 49% complete when the Credit was cancelled. Since then the road has been completed and the target met, using Government of Uganda funding.

Indicator 2: National Road Safety Authority (NRSA) created and operational


Road Safety managed by Government Department

NRSA established and operational

NRSA creation turned down by Cabinet

Date achieved 07/15/2010 12/31/2014 01/31/2016


Not achieved. Although the road safety policy statement was agreed, Cabinet turned down the creation of NRSA in November 2014 due to insufficient information.

Indicator 3: Crash database established and operational


Crash database not yet established

Database established and fully operational

Database established


Achieved. Database established, made functional and tested in the pilot regions. Data collected from other regions still to be put in system manually

Indicator 4: Detailed design and bidding documents for phase 1 bus rapid transit system prepared


Design and bidding documents not prepared

Documents completed and approved

Documents completed and approved

Date achieved 07/15/2010 12/31/2014 01/31/2016


Achieved. Designs and reports approved by a technical committee and by stakeholders at a workshop.

Indicator 5: Framework for Metropolitan Area Transport Authority (MATA) prepared


No framework in place Framework drafted and approved

Framework drafted, but not yet approved


Partially achieved. Framework drafted and received financial clearance, but yet to be approved by Cabinet.

Indicator 6: Transport Policy Updated


Policy not updated Policy updated and approved

Policy drafted, but not yet approved


Partially achieved. Revised policy drafted and amended, but financial clearance requested before presentation to the Cabinet.

Indicator 7: Traffic and Road Safety Act Legal framework updated


Legal framework not updated

Legal framework amendment agreed by management

Legal framework drafted, but yet to be legislated


Partially achieved. Work done by consultant deemed unsatisfactory and amendment drafted in-house.

Indicator 8: Transport Sector Data Management System (TSDMS) established


No TSDMS TDMS established TDMS established and operational

Date achieved 07/15/2010 12/31/2014 01/31/2016


Achieved. System is operational and Ministry now produces an Annual Sector Performance Review

Indicator 9: Multisector Transport Regulatory Authority (MTRA) established Value quantitative or qualitative)

No MTRA MTRA established and functioning

Cabinet did not approve


Not achieved. The draft Bill was not approved. The Cabinet was reluctant to create new institutions and MoWT determined it would only prioritize the establishment of NRSA and MATA

Indicator 10: District, Urban and Community Access Roads (DUCAR) agency established


No DUCAR agency DUCAR agency established and operational

DUCAR not established

Date achieved 07/15/2010 12/31/2014 01/31/2016


Not achieved. Despite agreement from stakeholders in districts, municipalities and town councils, the request to clear the financial implications of the agency has not been responded to and it has not been submitted to Cabinet.

Indicator 11: UNRA share of administrative costs as part of overall budget is less than 5%


Not available less than 5% Less than 5 percent

Date achieved 07/15/2010 12/31/2014 01/31/2016


Achieved. After the restructuring of UNRA by the Board, Ministry of Finance, Planning and Economic Development accepted an increase in the wage bill starting July 2015

Indicator 12: UNRA Management Information System (MIS) established including red flag system


No system System in place System in place

Date achieved 07/15/2010 12/31/2014 01/31/2016


Partially achieved. A Contract Management System is in place, but not yet fully functional. A review to improve functionality is ongoing.

Indicator 13: Average time deviation from procurement plan


Not done Less than 10% Not available

Date achieved 07/15/2010 12/31/2014 01/31/2016


Not achieved. UNRA could not provide this information, due to the restructuring of the institution.

Indicator 14: Annual Customer Satisfaction Survey to be instituted


Not done Done Done


Achieved. Carried out by the Uganda Road Fund

Indicator 15: Capacity (number of staff) of Internal Audit Unit of UNRA increased to carry out technical audits


6 14 7


This indicator was added when the AF was approved. It was not achieved during the life of the project.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements(US$, millions)

1 04/30/2010 Satisfactory Satisfactory 0.00 2 12/12/2010 Satisfactory Satisfactory 0.00 3 07/27/2011 Satisfactory Moderately Satisfactory 4.00 4 02/05/2012 Satisfactory Moderately Satisfactory 10.09 5 07/07/2012 Satisfactory Moderately Satisfactory 31.93 6 01/03/2013 Satisfactory Moderately Satisfactory 31.93

7 07/21/2013 Moderately Satisfactory Moderately Unsatisfactory 67.53


9 08/04/2014 Moderately Unsatisfactory Unsatisfactory 113.09



12 02/18/2016 Unsatisfactory Unsatisfactory 175.92

H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in US$, millions

Reason for Restructuring & Key Changes MadeDO IP

06/16/2011 S MS 4.00

Additional Financing: Inclusion of Kamwenge - Fort Portal Road, strengthening of UNRA Internal Audit Unit and extension of closing date by one year to 01/31/2016.

05/31/2013 S MS 44.27 Reallocation of amounts

I. Disbursement Profile

This Implementation Completion and Results Report (ICR) for the Uganda Transport Sector Development Project has a unique significance in that it highlights issues where an overly complex project was designed in a manner that was incompatible with the available capacity in Government. The project was restructured, and additional finance provided, to add a road section that was not initially identified as challenging from a safeguards point of view, despite the fact that it presaged a considerable influx of labor to a poor rural area, where there were also some systemic social issues, without any attempt to appropriately manage the adverse impacts on the affected communities. This resulted in a complaint to the Inspection Panel and acknowledgement by World Bank management that there were serious weaknesses in the preparation, implementation and supervision of the project. The contractor failed to rectify shortcomings on a range of issues that impacted the communities, and the World Bank first suspended disbursements and then took the exceptional step of cancelling the Credits. Following these events, the World Bank carefully reviewed its entire portfolio of similar projects, the way it considers environmental and social issues in project design and implementation, and its Standard Bidding Documents to improve environmental and social provisions in contracts for both civil contractors and supervising engineers. It also issued guidelines for staff on managing the risks of adverse impacts on communities from a temporary project-induced influx of labor. Particular attention has been given in this ICR to the lessons learned from these events.

1. Project Context, Development Objectives and Design

1.1 Country Context

1. Uganda is a landlocked country in East Africa bordered by the Democratic Republic of Congo (DRC), Kenya, Rwanda, South Sudan, and Tanzania. It has a rapidly growing population of 34.6 million people, with 55 percent under 18 years of age.1 Uganda is classified as a low-income country and in 2015 had a gross domestic product (GDP) per capita of US$670.2 However, the country has substantial natural resources, including fertile soils, regular rainfall and sizeable mineral deposits of copper and cobalt. More recently, reserves of both crude oil and natural gas have been discovered. Coffee is an important export commodity, but over 80 percent of the population live in rural areas and are reliant on subsistence agriculture.

2. Following independence from Britain in 1962, Uganda sporadically experienced unrest and conflict. Corruption and human rights issues have also caused concern among development partners (DPs), and this has hampered the investment climate. On the other hand, the United Nations Refugee Agency reported that in 2015 Uganda was hosting over half a million refugees mostly from South Sudan, Burundi and the DRC. It recognized that Uganda has a progressive policy toward such people, providing land, protection and the right to be employed or run a business.3

3. Beginning around 2009, exogenous shocks, including the global economic crisis and surges in international commodity prices, negatively affected the country’s growth rate. Other

1 Uganda Bureau of Statistics, 2016, Census 2014 Final Results.2 World Bank data3 United Nations Refugee Agency, 2005, Uganda Hosts Record 500,000 Refugees and Asylum Seekers. (Accessed September 7, 2016), www.unhcr.org

1

http://www.unhcr.org/

issues reinforced this situation—primarily a lower export performance, adverse weather conditions, declining development aid, as well as high inflation. A subsequent tightening of monetary policy reduced GDP growth to 3.4 percent in 2012, down from the 7 to 8 percent range in 2008 and the earlier years in the decade.4 Nevertheless, Uganda was able to surpass the 2015 Millennium Development Goal of halving the poverty rate.5 The share of the population living below the poverty line declined from 35 percent in 2001 to 22 percent by 2013. This trend has been attributed in part to a diversification of economic activity away from an over-reliance on farm activities in favor of nonfarm household enterprises.6

1.2 Sector Context

4. In Uganda, road transport is the dominant mode and plays a pivotal role in supporting the economic and social development of the country. Road transport carries over 90 percent of the country’s passenger and freight traffic and provides the only means of access for much of the rural population. The road infrastructure also serves the primary mode on the key transit corridor linking Uganda and the neighboring land-locked countries, to the Indian Ocean port of Mombasa in Kenya. The classified road network length is about 66,000 km and consists of 21,000 km of national, 32,000 km of district and 13,000 km of urban roads, while the community access road network is estimated to be in the order of 85,000 km. Other modes of transport are a railway system with a network of 1,260 km of track, (of which only 320 km are functioning), water transport—mainly wagon and stage ferries on Lake Victoria and the Nile River - and air transport facilities, including an international airport at Entebbe, and 13 domestic air fields.7

5. National roads, of which 3,490 km are paved, connect districts and cities with one another and with neighboring countries. These roads account for only 30 percent of the network, but carry 80 percent of the total road traffic. The Uganda National Roads Authority (UNRA) created in 2008 is responsible for managing the national road network. District roads provide access from rural areas to markets, health centers, educational institutions, administrative centers and other services and are managed by district governments, while local governments manage urban roads and sub-county local governments manage community roads. An Act of Parliament established the Uganda Road Fund (URF) in 2008 with the objective of financing routine and periodic maintenance of public roads in Uganda mainly from road user charges. The URF became operational in 2010. It was intended to have been a second-generation road fund, but still receives its funds from the Ministry of Finance, Planning and Economic Development (MoFPED) and is subject to budgetary fluctuations and political priorities.4

1.3 National Transport Policy and Strategy

44 Uganda Economic Update: Bridges Across Borders – Unleashing Uganda’s regional trade Potential, February 2013 – First Edition, World Bank55 The Millennium Development Goals (MDGs) were the world’s time bound and quantified targets for addressing extreme poverty in its many dimensions66 Poverty head count ratio at national poverty line (% of population). Source: Uganda Bureau of Statistics. Estimates are consistent with the World Bank’s Global Poverty Working Group data.77 Ministry of Works and Transport.2015, Annual Sector Performance Report Financial Year 2014/154 A second-generation road fund is financed by fuel levies and other user charges and is managed by a board representing the interests of the road users.

2

6. The National Transport Policy and Strategy (NTPS), adopted in 2002, promotes less costly, efficient, and reliable transport services. To carry out this strategy, the Government of Uganda (GoU) has received substantial support from its DPs. The first 10-year Road Sector Development Program (RSDP) Phase 1 covered the period from FY 1996/97 to 2005/06. In April 2002, the RSDP was updated and rolled over for a further 10 years as RSDP Phase 2 (FY2001/02 to FY2010/11) at an estimated cost of US$2.3 billion. District roads were included for the first time. Based on the lessons learned from implementation of the first two phases, the GoU then developed RSDP Phase 3, including some urban roads. To adequately respond to the growing transport demand, provide support for national economic development, and expand competitive regional trade, RSDP Phase 3 prioritized the rehabilitation and maintenance of the major road corridors. The volume of trade with neighboring states was and still is rapidly increasing, especially trade with South Sudan. This strategy was also intended to address infrastructure bottlenecks and non-physical trade barriers (such as border controls) that hampered the smooth flow of traffic for both people and goods. The planned investment requirement for RSDP Phase 3 was US$10.36 billion over the 10-year period from FY 2009/10 to 2018/19.5

7. The Bank has supported transport projects such as RSDP Phase 1 in Uganda since the early nineties. RSDP Phase 2 was still active when the Transport Sector Development Project (TSDP) was appraised. Adaptable Program Loans (APLs) had been implemented under the previous road projects as part of RSDP Phases 1 and 2. However, the World Bank proposed a Specific Investment Loan (SIL) rather than an APL for the TSDP. This was mainly because of difficulties in predicting the timetable and costs of APLs over a long investment period. By using a SIL with a short-term focus, results were expected to be better defined and achievable within a shorter time period.

8. At appraisal of the TSDP, Uganda was receiving finance for all sectors from more than 40 bilateral and multilateral organizations, which made it difficult for the Government to engage with all of them effectively. The project approval occurred during a time when several financiers were seeking ways to improve donor harmonization, based on a sector wide approach. The Transport Sector Framework was the result of a joint institutional support initiative prepared inter alia between the GoU, the European Commission (EC), the United Kingdom Department for International Development (DFID), the Danish International Development Agency (DANIDA) and the World Bank (see Annex 2, Table 2.1). The GoU through an annual Joint Transport Sector Review coordinated the mostly parallel funding from the DPs. This was based on a Uganda Joint Assistance Strategy encompassing issues such as better economic management, removal of infrastructure bottlenecks, and improved governance and human resource development.

9. According to a stakeholder survey of the effectiveness of this sector approach, the greatest benefits were perceived as sound economic advice and delivery of financial resources. However, some responders criticized the approach for theoretical solutions that disregarded political realities. In addition, a review funded by DFID found that although the strategy was well intended, in retrospect it was neither a necessary nor sufficient condition for more effective aid and concluded that transaction costs were not reduced because lenders and donors had

5 UNRA. 2012. Preparation of Third Phase of Road Sector Development Program, Kagga and Mott Macdonald.

3

different agendas and rules.6 Consequently, though endorsing continued efforts to harmonize, IDA returned to its earlier model of the Country Assistance Strategy (CAS) and prepared a CAS for 2011-2015 covering all World Bank support, which had as a strategic objective “enhancing public infrastructure.” For the road sector, this included strengthening the impact of the roads budget. A public expenditure review made detailed recommendations in relation to national roads with respect to land issues as well as procurement; monitoring and evaluation (M&E); and absorption capacity. Whilst these factors were taken into account in preparing the TSDP, some of the mitigation measures proved inadequate.

1.4 Project Development Objectives (PDO) and Key Indicators

10. The PDO in both the original Financing Agreement and the Project Appraisal Document (PAD) was to improve the connectivity and efficiency of the transport sector through (i) improved condition of the national road network; (ii) improved capacity for road safety management; and (iii) improved transport sector and national road management.

11. The original PDO indicators included the following:

Average vehicle operating costs on the Gulu-Atiak and Vurra-Oraba roads to reduce from US$0.352 per vehicle-km in 2009 to US$0.224 per vehicle-km in 2014;

Travel time on the Gulu-Atiak and Vurra-Oraba roads to reduce from two hours 2009) to one hour (2014);

National roads in poor condition to reduce from 36 percent in FY2009/10 to 15 percent in FY2013/14;

Access of the rural population to all-season roads in the target area to increase from 64 percent to 90 percent; and

Annual rate of growth of road accident fatalities to decline after the National Road Safety Authority (NRSA) becomes operational.

1.5 Revised PDO and Key Indicators, and reasons/justification

12. The PDO remained unchanged throughout the life of the Project, but the Results Framework was modified as follows:

The Kamwenge-Fort Portal road was added to the indicators of reductions in vehicle operating costs and travel time with the same target values; and

A new indicator was added in respect of the capacity of the Internal Audit Unit in UNRA to enable it to carry out technical audits. The staffing target was 14 persons against a baseline of 6 persons.

1.6 Main Beneficiaries

13. The entire population of Uganda was expected to benefit indirectly from the project—especially the policy, institutional and safety aspects—but national road users and communities living near the roads selected for improvement were the direct beneficiaries. More specifically,

6 DFID. 2009. Review of the Uganda Joint Assistance Strategy - Current and Future Prospects by the Overseas Development Institute, London and the Centre for Performance Management, Kampala.

4

both local and long distance users would have improved access to markets and services and transport would be facilitated to and from neighboring states to the north and west of Uganda. Policy and institutional reforms were intended to lead to better integration and efficiency for a number of Government departments and authorities especially UNRA, the Ministry of Works and Transport (MoWT) including the Department of Road Safety, and affected local authorities, including the Kampala Capital City Authority (KCCA).7

1.7 Original Components

14. The five original components were financed by means of an International Development Association (IDA) Credit (4679-UG) of US$190 million equivalent, and DFID-recipient executed Trust Fund grant (TF11094) of UK£ 6.05 million, US$8.0 million equivalent, that contributed to some of the road safety and institutional subcomponents.

Component A: Road Investments: Upgrading and Rehabilitation of National Roads (IDA financing US$162. 1 million)

15. This component was to be executed by UNRA. The component was to finance the paving of the Gulu to Atiak and Vurra-Arua-Oraba roads (approximately 160 km), linking northern Uganda with southern Sudan (now South Sudan) and northeastern DRC. Component A also included the preparation of design and bidding documents for the reconstruction of the Tororo to Soroti road (151 km) and the Lira-Kamdini-Gulu roads (148 km), in preparation for future financing. This would help ensure that the entire northern corridor from Kenya to the South Sudan and DRC borders would eventually be paved and in good condition.

Component B: Enhanced Road Safety: (IDA financing US$3.5 million, DFID US$1.0 million)

16. This component was to provide funding for the establishment and start-up funding of the National Road Safety Authority (NRSA). MoWT was to execute this component, and a special Stakeholder Committee was to be put in place to oversee its implementation. The project design envisaged a consultant financed by the Global Road Safety Facility being employed from October 2009 to January 2010 to prepare a draft road safety policy and strategy and a draft law for the creation of the NRSA in consultation with stakeholders. It had been agreed with the GoU that the creation of the NRSA was a priority and Government would endeavor to make it operational at the beginning of FY20l1/12. NRSA was to be funded by the Road Fund (about US$2 million per annum was envisaged). The component was also to provide financing for making a police crash database operational.

Component C: Urban Transport Planning: Preparation of a Kampala Urban Transport Project (IDA financing US$4.5 million)

17. MoWT was to implement this component, and a specific stakeholder committee was to be put in place to oversee its implementation. The Public-Private Infrastructure Advisory Facility Trust Fund, administered by the World Bank, had approved an allocation of US$267,000 to

7 KCCA came into force on the March 1, 2011, by the Kampala Capital City Act 2010. It is supervised by the Central Government.

5

finance a pre-feasibility study for the establishment of a Bus Rapid Transit (BRT) system in the Greater Kampala Metropolitan Area (GKMA). The study was to commence in November 2009 and was scheduled for completion in March 2010. The pre-feasibility study was intended to prepare design and bidding documents for the BRT infrastructure in the selected corridor in GKMA, as well as draft bidding documents for the bus operators, fare collectors, fund managers, system financial models, the central business district traffic management and parking studies, a bicycle path master plan, and draft legislation and support for a Metropolitan Area Transport Authority (MATA).

Component D: Institutional Support (Government): Support to Ministry of Works and Transport (IDA financing US$7.9 million, DFID US$3.0 million)

18. This component was to assist MoWT to focus on its core functions namely policy setting, strategic planning, sector oversight and monitoring, and to spin off some of its responsibilities to the newly created entities under its umbrella. There were four sub-components: (i) strengthening of the policy and planning division through updating of the sector policy, review of the sector legal framework and introduction of a Transport Sector Data Management System (TSDMS); (ii) assistance to create the proposed Multi-sector Transport Regulatory Authority (MTRA); (iii) assistance for the transformation of the management of district, urban and community access roads (DUCAR) into an Agency; and (iv) other support through, technical assistance, equipment, training and financing operating costs.

Component E: Institutional Support (UNRA): Support to Uganda National Roads Authority (IDA financing US$12.0 million, DFID US$4.0 million)

19. This component included: (i) the improvements/refurbishment of regional offices of UNRA; (ii) provision of additional technical assistance to the one provided under EC financing; (iii) financing of various studies needed by UNRA to enhance its performance; (iv) provision of training; (v) provision of office equipment and supervision vehicles; and (vi) financing of incidental operating costs because of UNRA acting as the Project Implementation Unit of TSDP.

1.9 Revised Components

20. Additional financing. On June 16, 2011, less than a year after the effectiveness of the original Credit and with an appropriate waiver from Bank management8 dated November 19, 2010, the Board approved a further IDA Credit (4949–UG) in the equivalent amount of US$75 million.9 This Additional Financing (AF) was primarily to cover the upgrading of the Kamwenge to Fort Portal road (66 km) from gravel to bituminous standard. This would extend the length of road improved under the project to 225 km. The request from the GoU to include the road in the TSDP was received too late to allow the road to be included in the original appraisal because there was insufficient time to undertake the necessary due diligence of its technical design and safeguards related work. Additional provision was made in the Additional Financing to strengthen the internal audit functions of UNRA to undertake technical audits of road projects, and the closing date for the project was extended by one year to January 31, 2016 (see Table 1

8 A waiver was required from the Regional Vice President to proceed with the Additional Financing under Operational Policy 13.20, as the TSDP had been under implementation for less than 12 months.9 The Credit was denominated in SDR for an amount of 47.4 million.

6

below).

Table 1: Transport Sector Development Project Cost at Appraisal and After Additional Financing (US$ millions)

Project Component Original Cost Revised Cost at AFIDA DFID TOTAL IDA DFID TOTAL

A: Road Investments 162.1 0.0 162.1 235.1 0.0 235.1B: Road Safety 3.5 1.0 4.5 3.5 1.0 4.5C: Urban Transport Planning 4.5 0.0 4.5 4.5 0.0 4.5D: Institutional Support – Government 7.9 3.0 10.9 7.9 3.0 10.9E: Institutional Support- UNRA 12.0 4.0 16.0 14.0 4.0 18.0TOTAL 190.0 8.0 198.0 265.0 8.0 273.0

Note: The African Development Bank (AfDB) had earlier separately funded the preparation of Environmental and Social Assessments, Resettlement Action Plans (RAPs) for the Kamwenge to Fort Portal road. The road designs for the Gulu-Atiak and Vurra-Oraba roads were financed under an earlier Bank financed operation (RDPP3). It was also involved through parallel financing in another section of the Ibanda-Fort Portal road. During implementation, the Japan International Cooperation Agency (JICA) financed a condition survey of district and community access roads. The World Bank diverted funds in 2015 to complete this initiative under component D when the amount made available to the GoU by JICA was found to be insufficient.

1.10 Other significant changes

21. The project had a second restructuring on May 31, 2013, to reallocate amounts between the Credit and Grant Agreements (see further details in paragraph 25).

22. On October 22, 2015, the Bank suspended disbursements under the Project due to the Borrower’s non-compliance with its obligation to implement the Project in conformity with environmental and social standards and practices, and on December 21, 2015, the Bank cancelled the Project. See paragraphs 31–37 for more details.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation and Risk Assessment

23. Project preparation was largely based on previous projects and although concern was expressed about the capacity of UNRA, the Bank team was confident that new staff would be recruited to tackle the rapidly increasing workload. No cap on recruitment by the GoU was foreseen. The PAD remarked on the weaknesses of technical assistance in the past and how there had been some waste of resources due to a lack of capacity in Government. It is therefore surprising that this project was designed with four new authorities to be established.10 The PAD also indicated that there had been problems previously with reforms taking more time than had been anticipated, but there was no plan to mitigate this. Project design was overly complex with too many sub-components. The level of commitment to such major reform was relatively untested. The capacity to ensure environmental and social safeguard compliance was not even discussed. The resources provided to prepare the project were unreflective of the systemic risks.

10 These included the Multi-Sectoral Transport Regulatory Agency (MTRA), the Metropolitan Area Transport Authority (MATA), the National Road Safety Agency (NRSA), and the District, Urban and Community Road Agency (DUCAR.

7

24. The original risk assessment for the TSDP is summarized in Table 2. Among the lessons learned from the implementation experience of earlier road projects in Uganda was the need to have measurable outputs in a specified time period. This related to both technical assistances for building local capacity and benchmarks for effecting policy and institutional reforms.11 In general, capacity constraints were inadequately assessed and the overall rating of moderate was an understatement.

Table 2. Risks and Mitigations Measures at Appraisal: Transport Sector Development Project

Risks Risk Mitigation MeasuresRisk Rating

with Mitigation

To Project Development Objectives

The URF does not provide a consistent flow of finance for road maintenance

Substantial technical assistance has been put in place for URF under joint institutional support framework. The GoU Policy Letter states that transfers will be made in accordance with the law.

Low

UNRA has constrained implementing capacity

UNRA is recruiting additional staff. Gaps have been identified and a substantial technical assistance program will lessen the risk Moderate

To Component Results

Slow progress in phasing out force account execution of works

Current force account constitutes only 10 percent of UNRA’s overall maintenance expenditures and UNRA plans to reduce this further to 5 percent by 2013–14

Low

Governance risks due to corruption in the road sector

A Governance and Accountability Action Plan has been agreed supported by a ‘red flag’ system Moderate

Financial management risks UNRA had substantial experience and a good record in this regard Moderate

Procurement risksManagement oversight improved and hands-on coaching to be provided by a consultant. Vacant positions to be filled and an acceptable record keeping and tracking system to be kept.

Substantial

Overall Risk Assessment: Moderate.

2.2 Implementation Issues

Reduced value of Trust Fund Grant and IDA Credits

25. Although the Trust Fund Administrative Grant Agreement was approved on April 6, 2010, it was not signed until May 27, 2012, some 23 months later. DFID planned contribution of

11 Transport Sector Development Project, 2009, PAD, page 6, Report No 50977-UG.

8

US$8.0 million to the two institutional strengthening components had during this period reduced to US$6.14 million due to negative fluctuations in the exchange rate. This resulted in changed allocations for Component D, ‘Support to MoWT,’ (down from US$3.0 million to US$2.0 million) and Component E, ‘Support to UNRA,’ (down from US$4.0 million to US$3.1 million).12 The impact of the reduction in value of DFID contribution slightly weakened the institutional support rendered and the delays introduced unnecessary complexity into the administrative arrangements because funds were ‘loaned’ from the IDA Credit so that work could begin.

Design of Institutional Support and Reforms

26. A design issue was the complexity of the reform and institutional support program that had the challenge of creating a number of new authorities, updates of legislation, office upgrading, training, and the introduction of new hardware and software. This “Christmas tree” approach was comprehensive, but unrealistic given the capacity constraints evident in Government.

Midterm Review

27. The Midterm Review (MTR) mission for the TSDP took place between April 22 and May 10, 2013. The mission expressed concern because both the construction and the institutional development and reform activities were proceeding more slowly than anticipated. The Vurra-Oraba road was reported to be behind schedule with 30.9 percent of the works completed in 52.7 percent of the contract period. The main reason was attributed to frequent equipment breakdowns at one of the two crushing plants. A plan was devised accordingly to accelerate the progress on the works. The Gulu-Atiak road was also delayed with 28.3 percent of the works completed in 47.0 percent of the contract period. Delays at this site were, amongst other reasons, due to design problems, including a need to increase the thickness of the pavement structure and a haphazard approach by the contractor. The discovery of a land mine also made it necessary to have the road section checked for unexploded ordnance.

28. Progress with components B, C and D were also found to be well behind schedule. MoWT had only recently prepared the policy for drafting the NRSA bill and received clearance from the Ministry of Public Service to establish the authority. The preparatory studies to inform the preparation of the Kampala Urban Transport Project started late. Nevertheless, the World Bank, with support from the Public-Private Infrastructure Advisory Facility (PPIAF), provided technical support for the BRT study as well as a feasibility study for the proposed establishment of MATA – a pivotal step in the process. Regarding support to MoWT, delays were affecting implementation and the MTR team considered progress to be unsatisfactory. Progress with Component E, (support to UNRA), was deemed satisfactory. As a result of the findings from the MTR, various proposals were made by the World Bank team to speed up construction progress in general. However, the status of safeguard arrangements was not scrutinized to the same degree as that for the civil works construction and social issues were not mentioned.

Additional Financing Risk Assessment

12 Final Report on DFID Trust Fund Utilization in the Transport Sector Development Project, July 2015.

9

29. When Additional Financing was approved to scale up the project, the project results framework was amended slightly to incorporate the Kamwenge-Fort Portal road and the strengthening of the UNRA Internal Audit Unit to enable it to carry out technical audits. The former was to be measured through reduced vehicle operating costs and time, while the latter was specified as an output based on staff employed in the unit. The AF effectiveness took almost 16 months (October 22, 2012) because the GoU informed IDA that parliamentary approval would be necessary first. A revised risk assessment framework was detailed in the Project Paper requesting the Additional Credit.13 This is shown in full in Annex 2, table 2.3, but the main points were:

An action plan was developed to enhance stakeholder awareness about land compensation and to ensure that there were adequate resources to enable timely compensation;

Although UNRA’s Board had given approval for 46 vacant positions to be filled (in planning, project management, maintenance, internal audit, finance, and administration, and legal), only 14 could be filled because of a wage cap imposed by Government. A plan to lift the cap was to be pursued; and

The UNRA Procurement and Disposal Unit (PDU) was to report directly to the Executive Director to increase management oversight.

Commission of Inquiry into Uganda National Roads Authority

30. Complaints from the public concerning the award of contracts, mismanagement, abuse of office and corruption in UNRA led to the appointment of a new Executive Director, on April 27, 2015. On June 8, 2015, the President of Uganda appointed a Commission of Enquiry to look into the affairs of UNRA. In September, nearly 900 employees were dismissed and a process was launched to screen former employees who reapplied for their jobs and to recruit additional personnel. Some former employees were not reappointed and some were recommended for prosecution. This major disruption in UNRA constrained its operational capacity in the short to medium term, which was reflected in its oversight of the Kamwenge-Fort Portal Road.

Inspection Panel

31. On December 19, 2014, the Inspection Panel14 (referred hereafter as the Panel) received a Request for Inspection from community members of the Bigodi town in Uganda raising concerns about the Uganda Transport Sector Development Project - Additional Financing (“the Project”). The request raised a number of issues including lack of community participation, sexual violence against children by road workers, increased child labor and school dropouts, increased number of accidents on the road and as a result of the stone quarry, a rise in crime in the community, poor compensation practices and unclear redress mechanism, among others.

32. A Non-Government Organization (NGO), ‘Joy for Children, Uganda’ represented the communities. Because these concerns had not been raised previously with World Bank

13 Transport Sector Development Project, 2011, Project Paper for Proposed Additional Credit, Report No. 59825.14 The Inspection Panel is a three-member body created in 1993 by the World Bank’s Board of Executive Directors. It provides an independent forum for project-affected persons (PAPs) who believe that they or their interests have been or could be directly harmed by a project financed by the World Bank.

10

management, the Panel following normal procedures gave management the opportunity to address the problems. Several missions involving Bank management, specialists and the task team reviewed the shortcomings in implementation and discussions were held with UNRA and Government officials. On September 11, 2015, a second request from the same entities was received restating earlier concerns and noting that management actions to address these problems were in their view unsatisfactory−progress remained slow and many mitigation measures had not been implemented. The Panel registered the Request on September 28, 2015, and requested Bank management to respond to the registration. On October 13, 2015, a Notice to Correct was issued to the Contractor, on behalf of the Employer, requiring the Contractor to undertake 36 remedial actions to address non-compliance with the contract.15

33. Eventually, on October 21, 2015, the World Bank suspended disbursements under the project due to the Borrower’s non-compliance with its obligation to implement the project in conformity with the World Bank’s environmental and social standards and practices.

34. Over the period November 19-24, 2015, a high-level mission comprising, the World Bank’s Country Manager, the Transport Practice Director, the Practice Manager and Task Team Leader met with key officials in the GoU including the Minister of MoWT, and the Permanent Secretaries of the MoFPED and the Ministry of Gender, Labor, and Social Development to discuss the situation, clarify outstanding obligations, and identify follow up actions. This informed the preparation of the Bank’s Management Response16 to the registration of the request, issued on December 17, 2015.

35. On December 21, 2015, the World Bank cancelled the Project due to the Contractor’s repeated failure to remedy the instances of non-compliance, and the lack of demonstrated willingness from UNRA to address the identified social risks. The World Bank also suspended disbursements for civil works on two other World Bank financed projects implemented by UNRA pending a review of that organization’s capacity and the need for UNRA to build its capacity to engage and communicate with affected communities. These were the Albertine Region Sustainable Development Project and the North Eastern Road Corridor Asset Management Project (NERAMP).

36. The Panel commenced the investigation stage in January 2016, and carried out field visits, interviews and focus group discussions with the requestors and community members and confirmed many of the claims of harm in the request in the Investigation Report, issued on August 4, 2016. In their formal response17, World Bank management agreed with the Panel’s findings that there were serious weaknesses in the preparation, implementation and supervision of the project. It acknowledged that the World Bank failed to identify and mitigate risks associated with a full range of social impacts that a project of this size and scope could have in a poor, rural area with many pre-existing vulnerabilities. World Bank Management also issued a report detailing the lessons learned from this project, together with an agenda for action, which

15 The Notice to Correct specified a deadline for each remedial action to be implemented, reflecting the seriousness of the issue, and/or the ease of corrective actions. 16 World Bank (2015) Management Response to the Request for Inspection Panel Review of the Uganda Transport Sector Development Project - Additional Financing, Washington D.C.17 World Bank (2016a) Management Report and Recommendations in response to the Inspection Panel Investigation Report of the Uganda: TSDP AF (P121097), Washington D.C.

11

looked beyond project-level compliance and focused more broadly on the institutional level to identify systemic changes to strengthen oversight of projects in high-risk environments.18

37. One year after it was issued, the number of remedial actions in the Notice to Correct that were considered to be compliant had increased to 32, but the Contractor remained out of compliance in respect of four: work permits for foreign personnel, blasting operations at the quarry, workplace accidents, compensation and grievance redress. All the actions were eventually complied with by end of April 2017.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

38. The design of the project’s Results Framework had some notable shortcomings. Although the PDO and indicators largely reflected the project’s direct outcomes, there was a lack of outcome indicators for the project objective of improved sector management. Causal linkages between the PDO and the performance indicators for the physical infrastructure improvements were fairly well aligned in that they measured the condition of the national road network and reductions in travel time and operating costs for users of the upgraded roads under the project. However, other key indicators, notably changes in the annual rate of road accidents and the access of the rural population to all-season roads, posed problems of attribution to the project. Progress with reform measures and capacity building, were only measured in terms of outputs.

39. At approval of the AF, some indicators covering the road section from Kamwenge to Fort Portal were added as well as a new intermediate indicator in respect of an additional activity to increase the capacity of UNRA’s Internal Audit Unit to be able to carry out technical audits. The Database Section of MoWT was given overall responsibility for monitoring and reporting on the performance of the transport sector. During implementation the capacity-building outputs concerning UNRA were recorded as completed, but some of the benefits of this initiative may have been reduced because of the disruptive re-organization within the authority.

40. An enduring aspect of the project was the strengthening of MoWT database and the capacity to utilize it. A performance review of all transport sector modes is now produced annually, which contains a wealth of useful information that is being used to assist decision-making. This review has been regularly updated and is of high quality.

2.4 Safeguards and Fiduciary Compliance

Safeguards Compliance: Gulu-Atiak and Vurra-Oraba roads

41. The TSDP was identified in the PAD as an environmental category B project requiring partial assessment. Safeguards triggered at appraisal were Environmental Assessment (OP/BP 4.01), Physical Cultural Resources (OP/BP 4.11), and Involuntary Resettlement (OP/BP 4.12). Although compliance weaknesses were identified, the potential social impacts were not of the magnitude experienced on the Kamwenge-Fort Portal Road.

Environmental and Social Impacts

18 World Bank (2016b) Uganda: TSDP AF: Lessons Learned and Agenda for Action, Washington D.C.

12

42. Environmental and Social Impact Assessments (ESIAs) for both the Gulu-Atiak and Vurra-Oraba roads were prepared and disclosed both in country and at the InfoShop. Compliance weaknesses during implementation led to closer oversight by the supervision consultants and the World Bank team. The original ESIA and RAP documents needed substantive revision and updating in respect of the functioning and updating of records of PAPs; and the already identified capacity constraints within UNRA had not been resolved. Continuing budget constraints limited the number of vacant positions in UNRA that could be filled. The contractors applied mitigation measures to ensure compliance with road safety measures and the health and safety of workers including supply of protective equipment and provision of lunch, drinking water and sanitary facilities for the workers. Regular sensitization of the workers about work safety and HIV/AIDS also took place. Monitoring of the safeguard instruments was undertaken by UNRA, and progress made available in quarterly reports to the World Bank. Decommissioning and restoration plans were prepared and accepted by the National Environmental Management Authority (NEMA). Borrow pits and quarries were restored except in isolated cases where the quarries were needed for other projects. In these instances, formal handover documentation was completed. Roundabouts were improved and the pavement strengthened at busy intersections.

Physical and Cultural Resources

43. Several physical cultural resources were identified: the Vurra military graves, an old East African community (EAC) border post building, former colonial buildings in Arua town, an iron smelting site in Nyoro village, and a sacred area in the Koboko District, where the Buranga community performed rituals. In all cases, except the last one, the project did not affect the sites. For the Buranga community the road was realigned, and compensation was paid as well because the site could not be completely avoided due to the proximity of the adjacent border with DRC. Historic buildings in Atiak and a fort in Pabo were preserved.

Involuntary Resettlement

44. RAPs for both the Gulu-Atiak and Vurra-Oraba roads were prepared and disclosed. The World Bank team reviewed these documents, but found them in need of improvement to comply with the World Bank’s safeguard policies and standards. UNRA submitted revised documents, which were further reviewed and considered satisfactory by the safeguards team. The number of persons affected and compensated was as follows: (i) Gulu-Atiak: 1,884 out of 2,027 PAPs were compensated (93 percent);19 (ii) Vurra-Oraba: 3,276 out of 3,935 PAPs compensated (83 percent).20 The reason for the shortfall in this case was that whilst additional PAPs were identified, but there were no funds allocated for land acquisition in the financial year because compensation was supposed to have been concluded. Special arrangements have been made by GoU so that this backlog can be cleared as soon as new funds are available.

19 Of the pending payments, 10 are court cases and the remaining are due for re-assessment20 There were over 200 complaints of non-payment due to bounced payments and missing documentation. These complaints are being resolved on a case-by-case basis.

13

Safeguards Compliance: Kamwenge-Fort Portal Road

45. In addition to the safeguards triggered at appraisal, i.e. Environmental Assessment (OP/BP 4.01), Physical Cultural Resources (OP/BP 4.11), and Involuntary Resettlement (OP/BP 4.12), in the AF Paper two further safeguards were added: Natural Habitats (OP/BP 4.04) and Forests (OP/BP 4.36). The 2011 ESIA for the Kamwenge-Fort Portal road proposed that it be a category ‘A’ project (potentially significant adverse impacts), but during the preparation for Additional Financing this was downgraded to category “B”. Given the complex and systemic social issues which emerged during implementation (which were identified in the original ESIA, but insufficiently considered and reflected in the ESMP) as well as the fact that the road ran through a National Park, this change in the safeguard category was an error of judgment.

Forests and Natural Habitats

46. A 13.3 km section of the Kamwenge-Fort Portal Road traverses the Kibale National Park. This park protects a large area of forest previously managed as a logged Forest Reserve; it adjoins Queen Elizabeth National Park and is an important eco-tourism destination popular for its population of chimpanzees and other primates. While the upgraded road generally has a 30m reserve, the section through the park was originally proposed not to be widened to eliminate impacts associated with land take and destruction of trees and their canopies. Non-destruction of tree canopies was also expected to substantially reduce the frequency of road kills resulting from primates crossing at road level. Further, to avoid undesired tree damage occasioned by the need for turning space for heavy equipment, a gravel quarry was identified at either end of the park so that haulage trucks did not have to turn. Moreover, the road designs provided for properly signed speed humps at 200-500m intervals with the aim of reducing noise and road kill levels in the park. However, on December 22, 2014 the Uganda Wildlife Authority approved the wider cross section of the road through Kibale National Park, despite this alternative being rejected in the ESIA, on condition that only a limited number compensation of trees would be removed during the road upgrading, and that some additional speed reduction devices (speed humps) were installed, as it was eventually complied with.

Physical and Cultural Resources

47. During the site inspection of the Kamangwe-Fort Portal road (June 2014) the World Bank team identified a cultural site, the Lugard Camp site established in the late 19th century by Captain Frederick Lugard as an administrative center in the Kabarole District and protected under the Historical Monuments Act. The Museum authorities inspected the site, but it was determined that it would be unaffected by the project.

Involuntary Resettlement and social issues

48. The number of persons affected and compensated was 2,246 out of 2,844 identified (79 percent). Originally, the number of expected beneficiaries was 2,430, but a further sweep by a team of surveyors and valuation experts added another 414 PAPs eligible for compensation. This was necessary because the original estimate was based on sampling and not a full census. The World Bank and UNRA have continued to follow up on the completion of compensation even

14

after project cancellation. As of March 27, 2017, 94 percent of PAPs had received compensation.21

49. However, the significant social concerns raised by the communities including sexual violence against children by road workers, increased child labor and school dropouts, increased number of accidents on the road and as a result of the stone quarry, a rise in crime in the community, poor compensation practices and unclear redress mechanism, were not responded to adequately in a timely manner. In addition to the action plan to mitigate these infractions, and given the sensitivity of the gender-related matters, the World Bank undertook a diagnostic study of gender-based violence in Uganda. The purpose was to make recommendations for how the World Bank can in future better identify and address the potential impacts of gender-based violence.22

Fiduciary Compliance

Financial Management

50. Pastel Accounting software was used to account for project funds. An assessment of financial management practices carried out in December 2014 rated them only moderately satisfactory because project accounts and World Bank reconciliations were not up-to-date, withholding taxes deducted from contractors lacked receipts, and supporting documentation for overseas trips was insufficient. These deficiencies were corrected and afterwards the financial management aspects were rated as satisfactory with adequate financial systems in place, qualified accountants deployed with knowledge of World Bank systems, and no ineligible payments were recorded. UNRA and MoWT liaised with the Auditor General to have the financial records reviewed in a single audit exercise. No irregularities were reported.

Procurement

51. Procurement commenced late in several cases such as purchase of equipment for pilot phase of DUCAR and the review of engineering designs for future projects. At AF, three measures were agreed to improve procurement capacity: the UNRA PDU was to report directly to the Executive Director to increase management oversight; an outsourced independent procurement evaluation was to be introduced to benchmark and validate UNRA’s procurement actions and its management information system for procurement tracking, while the capacity of UNRA’s Internal Audit Unit was to be strengthened to enable it to carry out technical audits. It took 26 months from Board presentation in June 2011 until the selected contractor was mobilized in August 2013. During this time, two procurement specialists were employed (financed by the World Bank) and ten staff put in place by the GoU (against a target of 14). During the UNRA restructuring, however, some apparently competent procurement staffs were let go for reasons not disclosed to the World Bank and at project closure only seven staff members were in place. The new organizational structure has to implement a proposed program amounting to between US$700 million to US$2 billion over a period of four years.

21 World Bank, 2017 First Progress Report of the Implementation of Management’s Action Plan in Response to the Inspection Panel Report.22 McLean, L and P. Bukuluki. 2016. Uganda Gender-based Violence Diagnostic. Washington, DC: World Bank.

15

2.5 Post-completion Operation/Next Phase

52. Although, for reasons explained elsewhere in this report, the Credit to finance the Kamwenge - Fort Portal road was cancelled with the works 49 percent completed, the contractor continued with the project using the GoU’s own funds. At the time of cancellation of TSDP, the World Bank also suspended funding of the civil works components under UNRA of the Albertine Region Sustainable Development Project, 100 km, and the NERAMP, 340 km, because of concerns about the capacity of UNRA to implement safeguards management and community engagement in accordance with World Bank guidelines. UNRA proposes to utilize its own resources to fund the recurrent maintenance costs of the road, from the resources provided by the Road Fund. The World Bank's support for the NERAMP project is designed to pilot output and performance-based road contracts (OPRC),23 which could be extended to the remainder of the network, if the results are promising. The NERAMP project is also providing additional support to ensure for the sustainability of reforms within UNRA, as well as improvements in staffing and training. At the same the Bank will continue to advocate for adequate levels and use of funds to ensure the sustainability of the road network at all levels from the Road Fund.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Relevance of Objective(s)Rating: High

53. The TSDP supported a slice of the RSDP, based on priorities guided by the country’s Poverty Eradication Action Plan and linked to the Government’s Medium Term Expenditure Framework. Inadequate infrastructure especially roads and transport, was identified as a binding constraint for growth and economic transformation. The transport sector operates within various frameworks, the over-arching one being the Uganda Vision 2040 (launched in April 2013). In 2009, the Letter of Development Policy for the Transport Sector laid out the principles for the environment in which TSDP would operate. The National Development Plan (2010/2011-2014/2015) detailed the country’s development challenges and opportunities. Transport, especially roads, was among the sectors given priority because of the strong link with rural agricultural production and hence poverty reduction. These strategic objectives continue to remain key priorities of the Government of Uganda.

54. In addition, the Government’s NTPS hinged on the promotion of less costly, efficient and reliable transport services as the means of providing effective support to increased agricultural and industrial production, trade, tourism, social and administrative services. This was supported through the Uganda Joint Assistance Strategy, 2001-2007, and also in the immediate years afterwards, until the CAS for 2011-2015. The CAS had a strategic objective of “enhancing public infrastructure,” that for road sector included strengthening the impact of the roads budget, strengthening accountability, and improving governance arrangements. The intention was to

23 Under OPRC contractors are not paid directly for “inputs” or physical works, but for maintaining specified Service Levels (Road Conditions).

16

facilitate trade with neighboring countries, increase the percentage of national roads in good condition and increase the access of the rural population to all-season roads. The relevance of these objectives were confirmed in the CAS Progress Report issued in July, 2013. 24 IDA co-financed the TSDP together with DFID in support of key priorities in the Uganda National Transport Master plan by improving connectivity and efficiency The objectives were and remain highly relevant.

Relevance of Design Rating: Modest

55. The project’s objectives and its design were reasonably well aligned, but overly complex. The sector-wide approach to comprehensively reform the sector had too many subcomponents and was beyond the capacity of the GoU to implement. Although the weak organizational structure of UNRA and serious understaffing were identified as risks both in the PAD and in the Project Paper for AF, the implications of these risks were underestimated. In particular, the failure to properly assess UNRA’s capacity to comply with World Bank’s safeguard requirements. Strengthening measures were built into the project that included studies, training, equipment and office refurbishment, but many posts in UNRA remained unfilled and, as unfolding events made it clear, there was insufficient environmental and social specialist capacity. The scope of institutional development, capacity-building and planning activities in the project’s design proved far too ambitious, and eventually posed significant implementation challenges.

3.2 Achievement of Project Development Objectives

PDO: To improve the connectivity and efficiency of the transport sector through improved condition of the National road network. Rating: Modest

Outcomes

56. The average vehicle operating cost per vehicle-km was reduced by a third from US$0.352 to 0.224 on the Gulu-Atiak and Vurra-Oraba roads by 2014. The target was fully achieved.

57. Travel time on the same roads reduced by half from two hours to one hour - also meeting the target.

58. However, because the Kamwenge-Fort Portal road was not complete at project closing, savings in either vehicle operating costs or time were not meaningfully calculable, although the expected benefits were being realized on already completed sections.

59. Access of the rural population to all-season roads in the target areas improved from 64 percent of the population to 77 percent by June 2014 (the target was 90 percent).25 Under the AF

24 IDA/IFC and MIGA (2013) CAS Progress Report for the Republic of Uganda for the period FY11-FY15.25 Accessibility in the target areas is according to the Implementation Status and Results Report (ISR), sequence 10, February 2015.

17

this indicator was slightly reworded as the share of the rural population with access to an all-season road, with the same target of 90 percent. It was envisaged that 4,950,000 rural people would achieve access under the project. The target was not met. In the final Implementation Status Results report (ISR), actual beneficiaries were estimated at 4,172,614 and the ISR indicates that the original target may have been over-estimated.

60. A further indicator in the original project was that National roads in poor condition be reduced from 36 percent to 15 percent. This was changed at AF, to “roads in good and fair condition” as a percentage of all classified roads, with a baseline value of 64 percent and a target of 90 percent. Using the original definition, 22 percent of roads were in in poor condition at closure; using the revised definition 64 percent of all classified roads in good/fair condition – (the urban roads were generally in a poorer condition than the national roads). Neither target was met.

Outputs

61. Road length constructed. The original target of 159 km of road was exceeded by seven km due to the upgrading of the road through the town of Arua. At AF, the target was revised to 225 km. However, works on the 66 km of road from Kamwenge to Fort Portal were only 49 percent complete when the World Bank Credit was cancelled. According to the final ISR 166 km in total had been completed under the project. The works in the meantime have continued funded utilizing GoU own funds.

62. Engineering consultancy services. In preparation for four future road upgrades in the RSDP, the project funded the consultancy services for feasibility studies, environmental and social assessments and detailed engineering designs. The actual road sections were expanded as circumstances changed. The final list of roads included was Tororo-Mbale-Soroti (340 km), Kamdini-Nebbi-Goli-and Ayer-Bobi (230 km), Kafu-Karuma-Kamdini (104 km), and Zirobwe-Wobulenzi (23 km). In the case of the Tororo road, the consultant prepared a long-term OPRC contract as an input to the Northeastern Corridor Road Asset Management Project.

PDO: To improve the connectivity and efficiency of the transport sector through improved capacity for road safety management Rating: Negligible

Outcomes

63. The rate of growth of road accident fatalities in Uganda was seven percent per annum at appraisal—a statistic of great concern. The original target was that with the establishment of the NRSA this rate of growth would decline, but no specific numerical target was set. At AF approval, the indicator target was revised to a rate of growth not exceeding four percent growth in fatalities when compared to the previous year—a very modest target. Actual figures were much better than this with traffic fatalities peaking in 2012 at 3,343, then falling to 3,124 in 2013, 2,937 in 2014 and 2,845 in 2015, (see annex 2, table 2.2). However, these achievements were not attributable to the project. The decline may have been due to the traffic police introducing dedicated enforcement teams targeting major causes of accidents such as speeding,

18

drunk driving and incompetent drivers.26 Increased traffic congestion in the cities of Kampala and Entebbe may also have reduced the severity of accidents due to lower speeds.

64. Expressed another way, in 2013 the death rate per 10,000 vehicles was 45 and this declined to 26 by project closure despite the increasing vehicle population. The death rate per 100,000 people was 30, which is close to the World Health Organization estimate of 27.8. 27 Notwithstanding, this remains one of the highest rates in Africa, even though rates in some neighboring states are worse (Kenya 29.1, Rwanda 32.1 and Tanzania 32.9). The TSDP was instrumental in supporting the formulation of the new road safety policy and created awareness of good practice with the Uganda Police. However, since both the crash data base and the establishment of the NRSA are still pending there is no convincing evidence that the reduction in fatalities was attributable to the project’s interventions.

Outputs

65. NRSA created and operational. Although it approved the Road Safety Policy28 in November 2014, Cabinet was reluctant to create new institutions and did not approve the establishment of the NRSA. The objective in establishing the NRSA was to strengthen institutional capacity in achieving national road safety objectives. The NRSA was envisioned to be a central government authority that would coordinate all efforts of all stakeholders with differing road safety activities and initiatives. It would be an autonomous, self-accounting institution. MoWT made a strategic decision in 2015 to re-submit a request to Cabinet for the establishment of the NRSA with stronger justification based on empirical evidence. In the interim, road safety matters remain in the Ministry with support from underfunded advisory National Road Safety Council (NRSC).29

66. Establishment of Road Crash Database. The overall objective of the database was to enable the establishment of a well-functioning reliable road crash data system. This was structured in three phases: Phase 1 was dedicated to a needs assessment; Phase 2 was for ensuring the system was functional and piloting the project in specific districts; and Phase 3 (an additional activity) was for the roll out. The Implementation Completion and Results Report (ICR) mission confirmed that the system was functional and that data collected from non-pilot regions can be put in the system manually. Equipment was procured and delivered to the Ministry in December 2015.

67. Consultancy to update the Traffic and Road Safety Act of 1998. A consultant was hired to review the Act and prepare revised legislation, however, the final report produced was deemed unsatisfactory by the Ministry technical team. Nevertheless, in view of the approved road safety policy and emerging need for tighter Axle Load Control, the Ministry decided to finalize amendments to the Traffic and Road Safety Act in-house. The principles for drafting the amendment have been finalized, but the legislation has yet to be enacted.

26 Uganda Police. 2013. Annual Crime and Traffic Road Safety Report. Kampala.27 World Health Organization.,2015. Road Safety Report. Geneva: World Health Organization. 28 A strategy to deal with ‘bodaboda’ motorbikes was added by MoWT29 Ministry of Works and Transport, 2015. Annual Sector Performance Report Financial Year 2014/15.

19

PDO: To improve the connectivity and efficiency of the transport sector through improved transport sector and national road management

Rating: Modest

Outputs

Ministry of Works and Transport

68. Preparation of Kampala Urban Transport Project. This subcomponent comprised support to introduce a BRT system in the GKMA and the establishment of a Metropolitan Area Transport Authority (MATA). The final draft design, procurement strategy, operating conditions and taxi transformation strategy have been discussed with stakeholders and technical committee members. The duration of the contract was also extended to cater for a BRT route extension from 20 km to 25 km. Regarding the establishment of MATA, a study was carried out to advise Government on establishing such an authority. This was completed in April 2014. The MoFPED has issued a Certificate of Financial Clearance and Cabinet approved the principles for a Bill to establish MATA. The First Parliamentary Council, however, is still drafting the detailed Bill and an action plan for implementation remains under discussion.

69. Establishment of Multi-Sectoral Transport Regulatory Authority (MTRA). Cabinet did not approve the establishment of a MTRA and MoWT have not pushed this proposal any further to date.

70. Establishment of the District, Urban, Community Road Agency (DUCAR) agency. In 1998 policy matters related to district and urban roads were transferred from the Ministry of Local Government to MoWT, which established a division for DUCAR. It had proved very difficult to build and maintain sufficient capacity at district level. In 2004 a ten-year investment plan was developed covering the maintenance and upgrading of 16,372 km of roads. MoWT decided to enhance the status and performance of DUCAR by establishing an agency under its oversight. To this end TSDP funds were allocated to assist with the drafting of an appropriate Bill and consultation with local communities. MoWT opted to prepare the draft Bill in-house and held consultations with 111 districts, 12 municipalities and 198 town councils. It obtained their consent to create an authority to manage the roads, with the exception of community access roads. At a stakeholder’s workshop it was formally agreed that the agency should be established, but re-named the Urban and Rural Roads Authority (URURA). However, MoWT decided that the NRSA and MATA were the priority new authorities and URURA may only be supported at a later date.

71. Support for the development of software for TSDMS. After a needs assessment, diagnostics and specifications report, the work proceeded with equipment procured under TSDP. The system was launched at the transport sector review workshop in 2014. As a result of this work, the Ministry now produces an annual sector performance review. This report contains considerable useful information including key indicators to track performance.

72. Updating of NTPS. The policy has been updated and reviewed by the Sector Working

20

Group. It provides for the establishment of the NRSA and MATA, but has yet to be cleared by the MoFPED pending greater clarity on the financial implications. Further consultation is taking place before resubmitting the draft for financial clearance.

73. Consultancy Services for the preparation of a strategic implementation plan for the National Transport Master Plan. The Strategic Implementation Plan for the National Transport Master Plan including a Master Plan for the GKMA was completed during FY 2014/15.

74. Consultancy Services for Updating Inland Water Transport Legislation. A study was commissioned in 2014 to review inland water transport laws, harmonize legislation within the region and update them to international standards. A Cabinet Memorandum seeking approval of the principles is being finalized, but as yet parliamentary approval has not yet been given.

75. Condition Survey for District and Urban Roads. This item was partly funded by JICA support to MoWT. The task was to prepare a condition survey for the URURA network, comprising 30,000 km of district roads and 85,000 km of community access roads. JICA had covered about half of this network. A request was made for the balance to be funded from TSDP. This has been done and the database has been completed and is in use. Information technology equipment has been procured and delivered.

76. Transport Sector Capacity Development. Six staff members completed Masters degrees in Transport Economics and Planning at the University of Leeds in the United Kingdom. Other staff received training in professional management skills in Israel and South Africa.

Uganda National Roads Authority

77. Upgrading of UNRA regional offices. Five regional offices were to be upgraded. The designs have been completed, but the cancellation of the Credit affected the procurement of the works contract and also the construction.

78. UNRA: Road Inventory and Mapping. Some 10,000 km of district roads were reclassified to become part of the national road network and transferred to UNRA’s management. The data collection (including mapping, an inventory of road assets, condition assessment and traffic census have been completed. Quality assurance and uploading of the data in the Road Management System (RMS) was completed in May 2012. The project was successfully completed with the commissioning of the RMS in June 2012.

79. Development of a Geographic Information System (GIS) based Rights-of-Way Management Information System. The system was to support RAP preparation, land acquisition, registration and land administration. In addition, it would respond to queries and complaints as well as M&E. System development was completed and the system was installed on the UNRA server. GIS officers were given training to provide technical and helpdesk support.

80. Procurement of equipment for UNRA. This included the procurement of heavy-duty scanners, and 15 double cabin pickup vehicles.

81. Technical assistance: communications. The outputs under this support were a perception survey, communications strategy, monthly media analysis reports, designing communication

21

materials, website management, social media, operational templates, social intermediation, community relations and training.

82. Technical assistance: procurement. A procurement consultant with skills in roads and contract management joined the PDU in August 2010

83. Ferry Services Advisor for UNRA. At the close of Financial Year 2014/15, UNRA had eight operational ferries linking national roads. A ninth Ferry at Bukakata/Luuku was provided and operated by Kalangala Infrastructure Services contracted by the GoU to provide infrastructure services in Kalangala under a Public Private Partnership (PPP) arrangement. An advisor was appointed for 12 months to review the current system and make recommendations for future operation.

84. Axle Load Control Advisor. The draft policy was completed in 2010, but the process was dragged out by harmonization efforts at the EAC level, which resulted in the enactment of the EAC Vehicle Load Control Bill by the East African Legislative Assembly. However, due to delays in assent to the Bill by some Heads of State within EAC, the policy is now going to be reviewed and forwarded to Cabinet for final approval.

85. Internal Audit Unit. A consultant commenced services in September 2013 for a period of two years. In addition, consultancy services were procured for establishing and developing a Technical Audit Unit in the Directorate of Internal Audit. It was intended that 14 staff would be employed in this unit, but at project closure there were only seven staffs.

86. General capacity building (UNRA). A consulting firm provided this service from June 2014 to December 30, 2015, when it was terminated due to the restructuring of the organization.

87. Asset Management Support (UNRA). This service was to ensure that asset management practices in the newly established asset management systems were fully mainstreamed in UNRA’s business. The service will expire in February 2017.

3.3 Efficiency Rating: Modest

88. Economic analyses for the upgrading of the Gulu-Atiak and the Vurra-Oraba roads were undertaken at appraisal using the Highway Development and Management Model (HDM-4). The analyses in Table 3 were based on economic costs, excluding taxes and duties.

Table 3: Economic Analysis Results

Road Section Appraisal Completion

NPV@12% discount rate

EIRR % NPV@12% discount rate

EIRR %

Gulu-Atiak $25.68m 18.1 $65.09m 28.3

Vurra-Oraba $53.96m 21.2 $22.51m 18.0

22

Kamwenge-Fort Portal $19.00m 18.0 Not completed Not completed

89. The Gulu-Atiak road gave a better return at completion due to higher than anticipated traffic. The Kamwenge-Fort Portal road, representing a third of the road investment cost, had an NPV of US$19 million and an EIRR of 16.8 percent at appraisal. Because the Credit was cancelled and the road was unfinished at closure no further economic evaluation was undertaken.

90. Operational and administrative efficiency: The project has been characterized by delays. The MTR reported most components were behind schedule and the completion date was extended by 18 months. The Trust Fund Administrative Agreement (largely due to delays on the Bank’s side) took 23 months before approval, by which time the value of DFID grant had shrunk by 30 percent due to exchange rate fluctuations. At the time of approval of the AF steps were taken to improve procurement capacity, but still by closure most of the reforms in the transport sector had not been completed. There were savings due to exchange rate fluctuations that could have been used had the project closing date been extended; the Kamwenge-Fort Portal road construction continued after closure using GOU funding. The overall rating for efficiency was downgraded to modest because prior to closure the Kamwenge-Fort Portal Road was unfinished and because of the long delays during implementation.

3.4 Justification of Overall Outcome Rating

91. The overall project outcome rating is unsatisfactory.30 The project’s objectives remain highly relevant to the Ugandan economy, reducing poverty, and the World Bank’s program in Uganda. However, the relevance of design was modest. Establishing four new agencies was ambitious and Government had misgivings about worsening the situation given the governance issues in UNRA and elsewhere. The achievement of two project objectives (connectivity and efficiency; transport sector and road management) is rated modest, and the achievement of the secondary level objectives (road safety and transport sector road management) are rated negligible and modest respectively. The AF Credit for the Kamwenge-Fort Portal road was cancelled when only 49 percent of the construction was complete, although construction continued using GoU funds. Efficiency was modest, given the delays that had occurred.

4. Assessment of Risk to Development Outcome

Rating: Significant

92. Although the overall project outcome is unsatisfactory, several components of the project did achieve some useful results, and the risks to their sustainability are worth considering. One is the sustained maintenance of the completed Gulu-Atiak and Vurra-Oraba road sections. The URF remains underfunded and this matter requires urgent attention to avoid worsening the maintenance backlog. This road will also add to the maintenance needs and not all PAPs had yet been compensated by the time the ICR was being prepared. In regard to road safety, the project supported the preparation and adoption of the National Road Safety Policy, but it remains uncertain whether the Government will follow this up with appropriate legal, regulatory and institutional measures, which were not taken up during the life of the project. Finally, there are

30 This conforms with the standards of Appendix J, Table 1, of the ICR Guidelines.

23

numerous pending risks to the sustainability of the project’s contributions to improved sector management, including the preparation of the Kampala Urban Transport Project, the establishment of MATA and the NRSA, the updating of NTPS and the finalizing of the Inland Water Transport Bill.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance Quality at Entry: Unsatisfactory

93. The TSDP appropriately supported a portion of the RSDP, based on priorities guided by the country’s NTPS, Poverty Eradication Action Plan and the CAS of 2011/15. The project at appraisal was classified as environmental category ‘B’ because the two road projects were more or less on the same alignments and no significant adverse effects were anticipated. An appropriate team was mobilized. Identified risks at appraisal related to the absorption of technical assistance for building local capacity and benchmarks for effecting policy and institutional reforms. Although the risks for financial management and procurement were rated moderate and substantial, all other risks were questionably appraised as being low or moderate, with an overall risk rating of moderate. It was assumed that because the World Bank and its DPs had rendered considerable technical assistance to the sector over several years, the risk of insufficient capacity was only moderate, but there were serious shortcomings in MoWT when it came to the reform program, and in UNRA in ensuring there was sufficient capacity to review the quality of documents submitted by the design consultants as well as to ensure safeguards compliance. This was clearly exacerbated when UNRA was given another 10,000 km to manage without a commensurate increase in staff.

94. The World Bank team was diligent in securing funding through DFID for road safety and institutional support, while the AfDB had already funded the preparation of ESIAs, RAPs and road designs. A Governance and Accountability Action Plan was drawn up to address governance, but there were no specific risk measures associated with road safety. The establishment of the four proposed new authorities supported by TSDP, was extremely unrealistic, given the project complexity, staffing, budgetary and political implications of establishing these new entities. The Cabinet clearly had misgivings about these proposals and in the end MoWT decided to only press for consideration the two highest priority authorities, namely, the NRSA and MATA—neither of which had materialized by preparation of this ICR. Overall, the project design addressed many sector needs with numerous subcomponents covering construction, road safety, urban transport and transport sector reform, posing a challenge for the Government given its stretched operational capacity.

(b) Quality of Supervision Rating: Unsatisfactory

95. Implementation support to the Gulu-Atiak and Vurra-Oraba roads, the implementation of which were relatively straightforward, had a satisfactory outcome, despite some early construction delays prior to the MTR. Supervision of the reform program was intensive with a

24

full-time Bank staff hired in the country office and working with the Ministry on a daily basis in addition to support provided by DFID. Delays by the Borrower were a recurring feature, however, characterized by late starts, a general lack of urgency, and the failure to succeed in establishing any of the proposed authorities. By the time the Administrative Grant Agreement with DFID was signed the planned contribution of US$8.0 million had reduced to US$6.14 million due to exchange rate fluctuations in the two years that had elapsed. The Bank team could have pushed this trust fund contribution with more vigor. The time to gain support from stakeholders, navigate the procedures to prepare a Bill to set up a new authority, and obtain a Certificate of Financial Clearance from the MoFPED was generally underestimated by the World Bank and impacted headway. Nevertheless, some progress was made in respect of formulating road safety policy; setting up a pilot crash database, design of a BRT system in Kampala and in establishing a TSDMS. It is difficult to evaluate the World Bank’s performance in respect of the capacity-building subcomponents because no outcomes were specified or measured.

96. Turning to the supervision performance after approval of the AF, the findings of the Inspection Panel (accepted by Management) are highly pertinent. Many have to do with inadequate preparation of the AF proposal. In the updated draft 2011 ESIA for the Kamwenge-Fort Portal road the project was proposed as a category “A” (potentially significant adverse impacts), but in preparation for the AF this was downgraded to category “B”, as detailed under section 2.4. As environmental category “B” the project was precluded from the benefits of increased internal scrutiny and resources. The final ESIA made only brief references to the systemic social impacts and risks. The Bank team made regular visits, but initially did not include persons with a background in social safeguards, or the particular areas of concern.

97. Given the high prevalence of child abuse and child pregnancy in rural Uganda, these matters deserved much more than cursory attention and the composition of the implementation team should have reflected this. A major shortcoming was that the ESIA did not identify in sufficient detail the key risks arising from the influx of a large number of construction workers and therefore the potential impacts on the affected poor rural communities and subsequent mitigation measures applied were inadequate and not properly addressed in the Environmental and Social Management Plan (ESMP). The Panel observed that an adequate assessment of UNRA’s environmental and social capacity had not been conducted; as a consequence, the project’s technical assistance and capacity enhancement components tended to focus more on procurement.

98. The site specific ESMP prepared by the contractor lacked information on how to mitigate identified risks and was not shared in its revised form with the World Bank by the Employer until at least two years into the civil works implementation. The World Bank was remiss in not pursuing this and also assuring that activities and costs associated with social safeguards mitigation were adequately reflected in the bidding documents or in the contract.31 The World Bank also relied on figures for affected persons that were out-of-date; the 2,200 people identified in the first RAP grew to 2,844 during supervision. Moreover, the focus in terms of social safeguards was primarily on involuntary resettlement as opposed to social and environmental issues for the re-aligned sections. The Bank should have been more stringent in ensuring compliance on environmental and social issues and should have taken stronger action such as 31 However, there were provisions for Occupational Health Safety, an HIV/AIDS service provider, and a lump sum for the environmental action plan.

25

proposing suspension of disbursements at an earlier stage. Implementation supervision ratings tended to mask the true nature of the problems.

99. The Inspection Panel found that Management did not ensure the design or implementation of appropriate mitigation measures to protect the community and workers against construction impacts, thus seriously jeopardizing human health, safety, and livelihoods in non-compliance with OP/BP 4.01 on Environmental Assessment. Further, it found that early and ongoing consultations with community members would have raised sufficient warning signals to address the problems raised in the Request. Project implementation continued despite the serious compliance failures and harm repeatedly identified in supervision reports, and in the absence of decisive action by Management. Consequently, the Panel found Management in non-compliance with OP/BP 10.00 on Investment Project Financing.

100. There was over-reliance on verification sampling rather than a full census to identify PAPs, despite the recognized weakness of the original census under the RAP commissioned by the AfDB. The World Bank should have insisted on a new census given the uncertainty of the figures. In addition, there was an interval of more than two years between the original census and the updated RAP. The Panel also found that the updated RAP contained an inadequate vulnerability assessment and did not properly identify necessary assistance programs targeting vulnerable groups. Consequently, the Panel found that Management did not ensure the preparation and implementation of an updated RAP compliant with OP/BP 4.12 on Involuntary Resettlement. Moreover, road construction commenced and continued before most PAPs were compensated, which is contrary to Bank policy. Such compensation amounts were frequently insufficient due to failure to assess the full impact of the road on land-take, and there was insufficient livelihoods restoration assistance as set out in the 2011 RAP.

101. The World Bank failed to ensure the Borrower complied with its obligation to report monthly on RAP implementation. Early detection of problems by the World Bank would have permitted interventions to address known concerns and prevented compensation problems from escalating. World Bank Policy OP 4.12 on Involuntary Resettlement requires institutionalized mechanisms for the continued participation of affected persons and redress of their grievances. The RAP set out a procedure for establishing a grievance redress mechanism that included employing a RAP Implementation Consultant with field presence along the road in collaboration with a local NGO-funded to monitor RAP effectiveness. This was not done.

102. The 2011 ESIA and appraisal documents for the Additional Finance lacked a required analysis of risks to women and children caused by labor influx, in particular those risks related to sex with minors, teenage pregnancies, sexual harassment, child labor, and school dropouts. Mitigation measures mainly focused on HIV/AIDS prevention and were inadequate to respond to the multidimensional problem of gender-based violence and child protection. Management’s initial response to the complaints failed to meet the standards of systematic or holistic assessment of risks, which aimed, among other objectives, to identify adequate risk management measures for affected communities.

103. Finally, despite the Bank undertaking several implementation support missions, the composition of these teams lacked the requisite expertise to address issues related to gender-based violence and child protection. Effective implementation support (including adequate

26

understanding of the community) could have resulted in earlier detection of some problems caused by the project. The Panel found Management’s overall supervision of the Project, including its actions in response to the Request received in December 2014, in non-compliance with the World Bank Policy on Investment Project Financing OP/BP 10.00.

(c) Justification of Rating for Overall Bank Performance Rating: Unsatisfactory

104. The World Bank overestimated the willingness and capacity of the Borrower’s achieving the transport reform and the road safety outcomes of the original project design, which proved far too ambitious. The Kamwenge - Fort Portal road under the AF added another dimension of complexity and risk as discussed above. The Panel’s Investigation Report revealed many shortcomings on the part of the World Bank in relation to the AF, which led, in tandem with the Borrower’s non-compliance with its obligations, to the cancellation of the financing.

5.2 Borrower Performance

(a) Government Performance Rating: Unsatisfactory

105. In its Letter of Development Policy for the Transport Sector, the GoU placed emphasis on the provision of technically sound, economically justified, financially and environmentally sustainable infrastructure as well as the active participation of the private sector. The Government restructured MoWT to focus on formulating policies, setting standards, strategic planning, sector oversight and monitoring. At the same time, the Government began delegating executive functions, including implementation and regulatory functions, to specialized entities, which had been or are being created. Accordingly, UNRA was established to manage National roads and the URF was set up, albeit with a smaller budget than needed to provide for adequate maintenance. Despite this progress, during the life of TSDP there has been a reluctance to move further forward with new authorities including the NRSA, which was turned down by the Cabinet. This slowed the reform process and shown a wavering in commitment. Although the reform component started late, there were pockets of success – for instance, progress was made in completing the design for the BRT, and a road safety policy was approved. The reform process within MoWT proceeded overall very slowly and at project closure no new agencies had been established. There was a disconnect between what had been articulated in the policy and commitment to implement the steps necessary to achieve the policy goals.

106. The Government also supported the implementation of a Governance and Accountability Action Plan aimed at developing a system and culture for promoting transparency and accountability in the road sector. This was an important move, but governance is still a major issue emphasized by the appointment in 2015 of a Commission of Enquiry into UNRA. While the World Bank welcomed this development, which followed complaints from the public, the subsequent dismissal and re-appointment of selected staff (after a thorough screening) inevitably caused a major disruption to the operational capacity of UNRA and its ability to respond to the supervision issues on the Kamwenge-Fort Portal road. Similarly, the addition of 10,000 km of district roads re-designated as National roads doubled the responsibility of UNRA, but there was a failure to provide a commensurate improvement in staff numbers. A cap on recruitment meant

27

that despite the project’s best efforts to build capacity, the authority continued to be constrained by weak capacity. The weak governance environment had an adverse effect on implementation.

(b) Implementing Agency or Agencies Performance Rating: Unsatisfactory

Ministry of Works and Transport

107. The MTR mission expressed concern because the reform activities were proceeding more slowly than anticipated. A sense of urgency was lacking and this did not appreciably improve during the life of the project. The indicators in the results framework were recorded, but this did not translate into action when results were falling short of target. There were delays in procurement and in recruiting additional staff. The MTR states that there was a lack of follow up and a lack of accountability for the delays in procurement processing. All reform activities were constrained by the failure to achieve Cabinet approval for any of the four proposed new agencies. It would be unfair to say that no progress was made with the reform agenda, but the results were patchy and varied by department. The design of the proposed Kampala BRT was completed, but there was some dissension as to whether this was the right solution as a light rail proposal was also suggested. In any case, the planning could not proceed in the absence of approval of MATA. On the other hand, the timely completion of the URURA condition survey, the establishment of the crash database, and the annual transport sector performance review were positive steps forward.

Uganda National Road Agency

108. UNRA suffered from a significant staffing shortage throughout project implementation. Continuing budget constraints and a cap on hiring limited the number of staff that could be recruited and even when new staff came on board it was unrealistic to think they could operate at full capacity until they had received at least some orientation and training. Although there were not major problems on the Gulu-Atiak and Vurra-Oraba roads, the performance of the contractor appointed for the Kamwenge-Fort Portal road was poor and UNRA did not supervise the project adequately. Although there were social concerns expressed by the communities affected by the project, as early as June 2014 and the World Bank’s Aide Memoire at the time expressed “concern in regard to the violation of basic social, environmental, health and safety requirements by the contractor,” UNRA took little action. The supervising engineer’s instructions also appear to have been largely ignored by the contractor and UNRA did not take appropriate actions. It is clear that the contractor did not give a priority to safeguards as demonstrated by the fact that safeguard staffing was only hired on a part time basis.

109. UNRA’s management capacity was inadequate to deal with this complex project. Over the last few years, there have been delays in payments to contractors and consultants under Government-funded projects primarily due to over-commitment in the road sector. Such issues likely stretched the contract management capacity of UNRA as it has to deal, in parallel with TSDP, with many contractual claims due to variations, extensions of time, and delayed payments.32

32 World Bank. 2014. Northeastern Road Corridor Asset Management Project, Project Appraisal Document, Report PAD 707. Washington DC: World Bank.

28

110. Overall, UNRA lacked the capacity to ensure that projects followed the World Bank guidelines, did not carry out appropriate supervision and was particularly weak in the areas of compliance with environmental and social safeguards and community engagement. Subsequent to the closing of the project, UNRA capacity has steadily improved. This has led to the contractor complying with 32 of the 36 actions in the Notice to Correct over a 12-month period.

(c) Justification of Rating for Overall Borrower Performance Rating: Unsatisfactory

111. The Government increased the road development program in Uganda over and above the available capacity to implement the program effectively. This has meant that reforms were not followed through and on the Kamwenge-Fort Portal road there was a failure to meet the World Bank’s safeguard requirements. These problems also jeopardized other approved projects, which had to be suspended pending urgent measures to improve UNRA’s capacity.

Lessons Learned

112. Following the Panel’s investigation, the World Bank conducted a thorough review to document lessons from the Uganda experience so as to avoid similar problems in other projects and to improve guidance, procedures and standards to staff involved in project preparation, design and supervision of projects in countries that had weak capacity. The main lessons and some follow up actions are given below:

Institutional Reforms

113. New transport agencies should only be established when there is clear acceptance of their value by the Borrower at all levels and there is a sound understanding of the financial, legal and political implications of such initiatives. There needs to be sufficient capacity in place to ensure the necessary stakeholder buy-in, financial clearance from the appropriate financial ministry, and the preparation of suitable legislation. The establishment of four new agencies in Uganda covering road safety, metropolitan transport, multi-sector transport regulation, and district urban and community access roads was unrealistic during the life of one project, given the extent of the capacity of MoWT to absorb and implement such initiatives. Cabinet turned down both the MTRA and the NRSA proposals when they were presented. MoWT has since decided to focus on the MATA and NRSA agencies, the latter now based on a stronger submission. However, at project closure no new agencies had been established.

114. Reform initiatives and capacity building in the transport sector should not be subordinate to progress with the physical investment components. There is a natural tendency in infrastructure projects for attention to be focused on physical construction progress once contracts have been awarded. In TSDP, there should have been a parallel focus from the outset on the softer components if the targets set were to be achieved prior to project closure. There is a tendency for such components to be rolled over to a follow-on project if not completed on time and this is a concern requiring both the World Bank and its Client’s attention. In this case, because the loan was cancelled and follow-on projects suspended, continuity was impacted severely.

Institutional Capacity

29

115. Where capacity is thin, fewer, but more focused activities should be the norm. In TSDP there were simply too many activities. Had there been less there may have been a different outcome.

116. Donor crowding without proper consideration of the client’s capacity to manage its full aid program can affect the capacity to deliver appropriately. In Uganda, at the time of appraisal there was a concerted effort by several development partners to operate jointly. However, it was concluded that this did not necessarily reduce transaction costs because of the differing agendas and rules of the partners.

117. Capacity building and training indicators need to be given more thought during preparation. It is not always useful to say that a person attended a course or that a new staff appointment was made in a critical position. The bottom line is whether the organization can operate more effectively because of these inputs and this needs to be measured over time. New staff members are not necessarily immediately effective.

118. In complex projects a thorough assessment of all aspects relating to the implementing agency’s capacity including safeguards is essential, with credible measures to address any weaknesses identified. In all large infrastructure projects, the World Bank needs to ensure that sufficient contract capacity is in place before implementation commences and that qualified social and environmental staffs are assigned to the project, or if this is not likely, alternative arrangements are made for greater implementation oversight, which reflects the capacity constraints. Where applicable the guidance provided in managing the risks of adverse impacts on communities from temporary project-induced labor influx should be followed.

119. Failure to put in place robust community engagement processes weakens the World Bank’s ability to anticipate potential social impacts and respond appropriately when problems arise. There was no grievance redress mechanism in place or partnerships with NGOs in the Uganda TSDP that could assist in understanding and resolving sensitive local issues.

120. When AF substantially increases the project scope a thorough review of the safeguard implications of the new component(s) should take place. In some cases, the revised project should not necessarily be given the same environmental classification as the parent project. In the case of the TSDP, the circumstances associated with the added road were much more complex than the ones in the original project and an environmental category “A,” recognizing potentially significant adverse impacts, should have been designated.

121. The World Bank staff skills and capacity need to match the risk and complexity of the anticipated operations. There was an over reliance by the World Bank on newly hired safeguard staff who had received limited support from others in the region and from headquarters. Until well after the Inspection Panel complaint was received, there was no deployment of staff with the right skills to address systemic social risks or to engage the communities. Implementation supervision report ratings were misleadingly positive.

Procurement and contract management

122. Based on the lessons learned from the TSDP, the World Bank has taken a series of actions to enhance the procurement and contractual provisions for both civil contractors and

30

supervising engineers. While the engineering aspects of works contracts were normally well covered, the expectations in respect of environmental and social safeguards were not spelt out. The Bank Standard Procurement Documents have been revised to incorporate changes reflecting enhanced environmental or social, health and safety safeguards as of January 2017. This includes:

Bidders are required to declare any civil works contracts that have been suspended or terminated by the employer for reasons related to environmental or social safeguard compliance (including health and safety issues in the past five years). This information is used to inform additional due diligence that may be required prior to contract signing.

Contractors are required to post an environmental and social performance bond that the contracting entity could cash should a contractor fail to remedy cases of environmental and social non-compliance. The bond is for a reasonable amount, which, in combination with the current performance bond, would normally not exceed 10 percent of the contract amount. The bond would be cashable based on failure to comply with the engineer’s notice to correct the said defects.

A provisional sum could be included in civil works contracts to be used as agreed between the contracting entity and the contractor in cases where contractors have fully met all environmental and social obligations under the contract and propose to further enhance environmental and social outcomes. The parties’ agreement on the use of this provisional sum would be subject to the World Bank’s ‘no-objection.’

Civil works contractors and supervising engineers would be required to include dedicated staff with appropriate qualifications and experience to manage specific social and environmental impacts.

A guidance note has been produced for managing the risks of adverse impacts on communities from temporary project induced labor influx.33 The importance of assessing impacts and designing mitigating factors increases with the social fragility of the road corridor. While many of these potential impacts should be carefully identified and evaluated in a project’s ESIA, they may only become fully known once a contractor is appointed and decides on sourcing the required labor force. This means that not all specific risks and impacts can be fully assessed prior to project implementation, and others may emerge as the project progresses. Site specific measures may have to be developed before the contractor starts work, and they may have to be updated as the project is implemented.

Land acquisition, resettlement, and compensation processes need to be aligned with procurement in a manner that those processes are appropriately completed along specific segments of the road project ahead of the start of civil works on those segments.

123. For the purpose of addressing the actions listed above, the Bank is launching a procurement pilot in the East Africa Region with the purpose of engaging with a broad set

33 World Bank, 2017, Managing the Risks of Adverse Impacts on Communities from Temporary Project-induced Labor Influx, Operations Policy and Country Services, and Environmental and Social Safeguards Advisory Team, Washington DC

31

of stakeholders and devising strategies and actions to enhance procurement and contract management approaches. This engagement will form the basis for i) introducing the enhanced Standard Procurement Documents to the Road Agencies and other stakeholders in the sub-region to get their commitments to its implementation, and ii) exchanging ideas on strengthening bidding documents to set out clear expectations with respect to environmental or social safeguards. UNRA is expected to use this platform to play a leading role in peer regional efforts.

124. Road agencies, as UNRA is doing, can also take steps to strengthen clauses and requirements in bidding and contractual documents for all road projects that relate to social, environmental, health and safety, and labor issues. This includes the revision of bidding documents to include penalties for contractors that do not comply with such requirements, as well as the development of a Contract Management Manual that should contribute to overall successful contract performance and value for money throughout the procurement and contract management process. For the ongoing NERAMP procurement process, UNRA is including clauses in the contract document to incorporate the new environmental, social, health and safety requirements.

125. In addressing the issues related to the TSDP, UNRA has also learned some lessons and taken actions that are applicable to other road agencies, such as: (i) revamping its environmental and social management systems, staffing and training, and embrace general attitudinal changes with a recognition of the need to deliver road infrastructure projects in a way that enhances social impacts for the local communities; (ii) improving community engagement (with client care officers, dedicated resident project engineers and on-the-ground land compensation teams, as well as training and the rolling out of Grievance Redress Committees); and (iii) enhancing the collaboration with, and empowerment of supervision engineers.

126. The TSDP has also shown the large and pivotal value of introducing the services of NGOs to work closely with the road agency, Supervision Engineers, and contractors in “Enhancing Social Impact” under (Bank financed) road contracts. The aim is to help: (i) prevent issues related to sexual and gender-based violence; (ii) promote the empowerment and improved livelihoods for young girls; and (iii) monitor implementation of various measures to address social risk and enhance the positive social impacts associated with the road works, including addressing issues associated with the implementation of resettlement action plans.

7. Comments on Issues Raised by Borrow/Implementing Agencies/Partners

(a) Borrower/implementing agencies

127. See Borrower’s ICR in Annex 5.

128. There is a disconnect between the Bank and Client perceptions of project ratings. The Client refers primarily to the extent of the road upgrading completed under the project, which it says met most of the PDO outcome indicators. (It met two out of five of the original indicators, but the impact on these indicators was reduced by the Kamwenge-Fort Portal road that was unfinished when the Credit was cancelled). Regarding intermediate indicators, some were achieved, but none of the four new authorities proposed under the project were established. Efforts to strengthen capacity also produced mixed results. The contractual non-compliance with

32

agreed social and environmental standards compounded by unsatisfactory progress with the handling of compensation claims by PAPs contributed to the cancellation of the Credits, such impacts are not factored in to the ratings given in the Borrower ICR.

(b) Co-financiers

129. The draft report was sent to DFID for comment but comments have not been received to date.

(c) Other partners and stakeholders

130. There were no other comments received.

33

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in US$, millions equivalent)

Components

Appraisal Estimate

(US$,millions)

AF Estimate (US$,

millions)

Actual/Latest Estimate

(US$,millions)

Latest % of

Appraisal

Latest % of Revised Estimate

A. Road Investments 162.1 235.1 140.7 86.8 59.8B. Enhanced Road Safety 4.5 4.5 2.1 46.7 46.7C. Urban Transport Planning 4.5 4.5 4.1 91.1 91.1D. Institutional Support (Government) 10.9 10.9 5.8 53.2 53.2

E. Institutional Support (UNRA) 16.0 18.0 12.5 78.1 69.4Total Project Costs* 198.0 273.0 165.2 83.4 60.5Total Financing Required 198.0 273.0 — — —

Note: *Including physical and price contingencies.(b) Financing

Source of Funds

Appraisal Estimate

(US$,millions)

Revised Estimate at AF (US$,millions)

Actual/Latest Estimate (US$,

millions)

Latest % of Appraisal

Latest % of Revised Estimate

IDA 190.0 265.0 159.1 83.7 60.0DFID 8.0 8.0 6.1 76.2 76.2

34

Annex 2a. TSDP Outputs by Component

Original Components at Appraisal

Component A: Road Investments

Project Surfacing Contract Progress Land and Property Compensation

Gulu-Atiak (74 km) Surface

dressing

Works contract:UGX 89.669 billion

Supervision contract:€928,027

RAP contract:UGX 317.486 million

Commenced in February 2012. The project is nearly completed. Major works on the Gulu Municipal road to the airport and cathedral have also been completed; the contractor is finalizing drainage works and correction of defects within Gulu town.

The project was completed on January 30, 2015; the performance certificate was issued on May 20, 2016.

Approved value:UGX 10.262 billion;Amount paid UGX 10.140 billion;

Valued PAPs 2,027;paid PAPs 1,884;percentage: 92.94

Vurra-Arua- Oraba (92 km)

Surface dressing

Works contract:UGX 138.861 billion

Supervision contract:US$2.108 million, revised to US$2.362 million

RAP contract:UGX 396.599 million

Approved value:UGX 18.396 billion;Amount paidUGX 16.827 billion.

Valued PAPs 3,935;paid PAPs 3,276; percentage 83.20

1. The Gulu-Atiak road, which lies entirely in the Acholi region of Uganda, is part of the northern corridor route that links South Sudan to the port of Mombasa. It is a strategic road as it is the main gateway for trade between Uganda and Southern Sudan to bolster regional integration. The road also provides links to Moyo and Adjumani districts in northern Uganda. Physical works progress of major works is 100 percent complete. The Vurra-Arua-Oraba road is part of the national road network linking northeastern Democratic Republic of Congo and southwestern Sudan to the port of Mombasa. It is situated in the northwestern part of Uganda stretching northward parallel to the Uganda-Democratic Republic of Congo border and connects with South Sudan close to where the borders of Uganda, South Sudan, and Democratic Republic of Congo converge.

Preparation of Road Design and Bidding Documents

2. Component A also financed consultancy services for feasibility study, the ESIAs, and detailed engineering design for the reconstruction and upgrading of the following roads:

(a) Tororo-Mbale-Soroti-Lira-Kamdini road (340 km): The contract was signed in May 3, 2013. The contract was amended on October 3, 2013, to allow the consultant to assess the corridor and prepare a long-term OPRC for the Tororo-Mbale-Soroti-Lira-Kamdini road. The consultant has submitted all the reports, which were the basis for the preparation of the NERAMP.

35

(b) Kafu-Karuma-Kamdini road (104 km): The contract was signed on April 23, 2013, and the consultant submitted the final detailed engineering design on September 29, 2014.

(c) Zirobwe-Wobulenzi road (23 km): The contract was signed on September 25, 2013, and was amended to cater for an extended scope of services. The consultant submitted the final documents for the detailed engineering design, bidding documents, ESIAs, and RAP.

(d) Kamdini-Nebbi-Goli and Ayer-Bobi road (230 km): The contract was signed on May 3, 2013, for the Lira-Kamdini-Gulu road (148 km) road. However, because of the proposed plan to have Tororo-Kamdini corridor as an asset management contract, the scope of service for this contract was amended to enable the consultant to prepare design and bidding documents for the rehabilitation of the Kamdini-Karuma-Olwiyo-Pakwach-Nebbi road (161 km) and for upgrading of Nebbi-Goli (15 km) and Ayer-Bobi (54 km) road to paved bitumen standard. The consultant has submitted the final documents for the detailed engineering design, bidding documents, ESIAs, and RAP.

Revised Component at AF

Project Funder Surfacing Contract Progress Land and Property Compensation

Kamwenge- Fort Portal road (66 km)

World Bank/ GoU

Surface dressing

Works contract: UGX 117.942 billion

Supervision contract: €1.929 million(UGX 1.142 billion)

RAP contract: UGX 961.150 million

Civil works commenced in August 2013, originally scheduled for completion in January 2016.

Cumulative progress as of October 2016 was 83.9 percent against a plan of 100 percent. Time elapsed was 130 percent.

The project encountered challenges regarding adherence to environmental and social safeguard standards, resulting in cancellation of funding by the World Bank in December 2015.

Approved value:UGX 9.121 billion

Amount paid: UGX 8.228 billion

Valued PAPs: 2,844

Paid PAPs 2,246

Supplementary valuation report 3 approved number added in the total above.Verification and disclosure is completed; preparations of payment are batches ongoing.

3. The additional IDA credit in the amount of US$75 million was approved in May 2011 to scale up the project to include the paving of the Kamwenge-Fort Portal road (66 km). This road connects Western Uganda to the Northern Corridor and the Trans-Africa Highway.

36

Distribution of Funds by Components

Components WorksTotal Contract

Amount, US$ (at Contract Rate)

Total Cumulative Amount, US$ (Paid up to May 31, 2016)

Component A: Road Investments: Upgrading and Rehabilitation of National Roads

A1.1 Construction of gravel to bitumen of Gulu-Atiak road (74 km) 55,188,698.00 49,477,370.00

A1.2 Construction supervision of Gulu-Atiak road 1,991,613.71 1,537,580.72

A1.3 Construction of Vurra-Arua-Oraba road works (85 km) 58,331,426.00 56,616,495.00

A1.4 Construction supervision of Vurra-Arua-Oraba road works 2,669,480.00 2,666,226.00

A1.5 Construction of Kamwenge-Fort Portal road works (66 km) 47,310,635.00 21,857,069.00

A1.6 Construction supervision of Kamwenge-Fort Portal road 2,891,169.00 2,285,465.00

A1.7Assessment and preparation of an asset management contract for Tororo-Mbale-Soroti-Kamdini road (340 km)

2,193,253.00 2,029,914.00

A1.8Design and bidding documents for full reconstruction of Kamdini-Pakwachi-Nebbi-Arua road

2,384,279.00 1,077,994.00

A1.9 Consultancy services design update of Zirobwe-Wobulenzi road (23 km) 498,215.00 409,560.00

A1.10Consultancy services for feasibility study and detailed engineering design for Kafu-Karuma-Kamdini road (104 km)

1,211,079.00 1,101,028.00

Component B: Enhanced Road Safety

B.1 Support to putting in place the NRSA and road safety enhancing measures 466,808.00 419,465.38

B.2 Preparation of draft bill for the NRSA 39,126.71 1,914.35 B.3 Making the crash database operational 2,068,595.06 1,504,518.51

Component C: Urban Transport Planning: Preparation of Kampala Urban Transport Project

C.1 Preparation of Phase 1 of the Kampala BRT studies 4,215,293.76 3,691,928.45

C.2 Support to start up MATA 408,305.73 408,305.73 Component D: Institutional Support to Ministry of Works and Transport

D.1 Support to policy and planning division/NTPS 682,676.30 682,676.30

D.2 Support to the Ministry for Software Development for the TSDMS 60,138.35 46,473.92

D.3 Inland Water Transport Legislation 486,810.00 486,810.00 D.4 Support to start up MTRA Nil NilD.5 Assistance to DUCAR agency 3,319,200.00 2,821,477.76

D.6Support to other core MoWT functions - preparation of detailed strategic implementation plan for the NTMP/GKMA

632,047.08 632,047.08

D.7 Support to other core MoWT functions - training 127,443.72 127,443.72

D.8 Support to MoWT supply of information technology equipment 1,298,932.06 958,548.44

Component E: Institutional Support to UNRAE.1 Consultancy services (design and construction

supervision) for the renovation and upgrading 443,336.00 85,343.00

37

Components WorksTotal Contract

Amount, US$ (at Contract Rate)

Total Cumulative Amount, US$ (Paid up to May 31, 2016)

of five UNRA station offices to regional offices design completed, but works not tendered. Supervision will extend into 2016.

E.2 Technical assistance to UNRA

E.2.1 Technical assistance for capacity-building support to UNRA 3,490,595.00 2,442,027.00

E.2.2 Asset management support to UNRA (2 years) 1,689,811.04 992,681.29

E.2.3 Technical assistance to UNRA - Axle Load Control Advisor 836,513.00 836,513.00

E.2.4 Technical assistance to UNRA - Procurement Consultant 522,812.00 522,812.00

E.2.5 Technical assistance to UNRA - Procurement Specialists 297,000.00 188,765.00

E.2.6 Technical assistance to UNRA - ferry services 120,000.00 100,000.00

E.2.7 Technical assistance to UNRA - Communications Specialist 118,800.00 118,800.00

E.2.8Consultancy services for establishing and developing a Technical Audit Unit in the Directorate of Internal Audit, UNRA

1,661,172.00 1,538,166.00

E.2.9 Preparation of ICR 25,600.00 25,600.00

E.2.10 Preparation of road investment priority list by individual consultant 6,400.00 6,400.00

E.2.11 Recruitment of six consultants to fill technical skills gap in three Directorates (two in each) 147,762.00 147,223.00

E.3 Studies

E.3.1National Roads Data Collection Study (Implementation of RMS and Addendum No. 1)

3,831,725.13 2,085,883.00

E.3.2 GIS-based Rights-of-Way Management Information System 1,295,595.46 1,252,118.53

E.3.3 Development of UNRA's Communication Strategy 150,000.00 43,566.00

E.4 Training

E.4.1 Training in accordance with the approved UNRA Training Plan 1,407,425.00 1,407,425.00

E.4.2 Asset management/OPRC Best Practice Study visits 179,122.00 179,122.00

E.5 Equipment E.5.1 Three heavy-duty scanners 94,500.00 94,500.00 E.5.6 Equipment for GIS-based ROW MIS 190,000.00 E.5.7 Vehicles 448,155.00 448,155.00E.6 Operating costs

E.6.1 Incremental Operational Costs because of UNRA’s function as implementing agency 1,000,000 124,799.00

Total of all components 206,431,548.11 163,480,210.18

38

Table 2.1. Joint Institutional Support Plan of Development Partners to the Uganda Transport Sector (2009–2014)

Institution Key Issues to be Addressed World Bank EC DFID DANIDA Total

MoWT

Sector policy setting Strategic planning Sector oversight Transport regulation Sector monitoring Road safety capacity Adjustment of legal

framework

US$0.4 million under RSDP-3 for TA

US$7.9 million support to MoWT under the TSDP

US$3.5 million for road safety under the TSDP

— US$4.0 million support to World Bank TSDP — US$15.8

million

DUCAR

Strategy for district road management

Planning, budgeting, and expenditure management

Technical oversight Monitoring

Support to DUCAR included in the above

— Support to DUCAR included in the above

Long-term advisor to DUCARdivision in MoWT (US$2.0 million)

US$2.0 million

Road Fund(Ministry of Finance)

Establishment of Road Fund Secretariat

Regulations Operating procedures Financial management

systems Monitoring systems

—US$2.6 million for TA to work in coordination with DFID support

— — US$2.6 million

39

Institution Key Issues to be Addressed World Bank EC DFID DANIDA Total

UNRA

UNRA management Road network

management Procurement, MIS Contract/bridge

managementFerry operations

Axle load control

US$2.6 for TA; US$ 12m for regional offices

US$6.2 million for TA (to work in coordination with DFID and World Bank support)

US$4.0 million support to World Bank TSDP

US$24.8 million

National Road Construction Industry

Strengthening of contractors and consultant associations

Business development Technical skills Contract management Code of conduct

US$4.3 million for TA to work in coordination with DFID support

US$15.8 million for project to promote markets for northern corridor integration to work incoordination with EC support

US$20.1 million

Total Total planned expenditure

US$26.4 million,of which US$3.0

million for RSDP-3US$13.l million US$23.8 million US$2.0

millionUS$65.3 million

Source: PAD TSDP, page 26.Note: DANIDA = Danish International Development Agency; TA = Technical Assistance.

40

Annex 2b. Operational Risk Assessment Framework

Table 2.2. Performance of the Uganda Road Subsector Measured Against National Targets

No. Description (MoWT Transport Sector Performance Report 2014–15) June 2011 June 2012 Actual

June 2013Actual

June 2014Target

June 2015Actual

June 2015Roads

1 Road network in fair to good condition (%)National roads (paved) - fair to good 74 77.6 77.0 80.0 78 80.0National roads (unpaved) - fair to good 64 66.6 66.0 68.0 68 70.0District roads (unpaved) - fair to good 55 65.0 65.3 50.5 55 57.8Urban roads (paved) - fair to good 50 61.0 73.7 58.2 — 58.0Urban roads (unpaved) - fair to good 55 44.0 44.7 48.5 — 47.0KCCA roads (paved) - fair to good 11 — 35.0 48.0 50 49.0KCCA roads (unpaved) - fair to good 48 — 60.0 60.0 62 61.0

2 Paved road network (km)National roads 3,264 3,317 3,489 3,795 4,000 3,981.0Urban roads 684 824.0 745.0 745.0 — 745.0KCCA 416 422.0 463.0 483.5 495 498.0

3 Road safetyTotal fatalities (road deaths) 2,954 3,343 3,124 2,937 — 2,845.0a

Fatalities per 10,000 vehicles 46 45.0 36.0 30.0 — 26.0Total registered vehicles 635,656 739,036.0 865,823.0 974,714.0 — 1,102,021.0

4 Road service level - travel time (minutes/km)On national roads n.a. 1.18 1.15 1.01 — 1.15

Note: a. All data on road fatalities is for the previous calendar years as opposed to the financial year from Uganda Police.

41

Table 2.3. Additional Financing of the Transport Sector Development Project

Project Development Objective: The PDO is to improve the connectivity and efficiency of the transport sector through (i) improved condition of national road network; (ii) improved capacity for road safety management; and (iii) improved transport sector and national road management.

PDO-level Results Indicators:

1. Average vehicle operating costs on targeted roads (US$ per vehicle km)2. Travel time on targeted routes (hours)3. Roads in good and fair condition as a share of total classified roads (percentage) - core indicator4. Share of rural population with access to an all-season road (percentage) - core indicator5. Annual rate of road accident fatalities (percentage)6. Direct project beneficiaries (number), of which female (percentage)7. Roads rehabilitated, non-rural - core indicator

Table 2.4. Risks and Mitigation Measures

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

1. Project stakeholder risks M-I

Experiences have shown that compensation for land and properties did not move ahead as planned, thus delaying some road projects.

An action plan was developed with UNRA before appraisal, which included the following actions: (a) UNRA to appoint consultants before appraisal who will implement the RAP; (b) UNRA to ensure the consultants enhance stakeholder awareness; (c) UNRA to ensure there are adequate resources to meet the involuntary RAP costs and be able to timely compensate the local people for loss of land/property and/or income.

2. Implementing agency risks

42


Capacity M-L

The increased annual budget for the transport sector (US$318 million in FY2007/08, US$542 million in FY2008/09, and US$546 million in FY2009/10, 85 percent of which is managed by UNRA) requires a substantial increase in UNRA’s implementation capacity. Thus, theneed to address the following: (a) weak organizational structure; (b) inadequate experience in procurement management; (c) inadequate record keeping; (d) inadequate staff numbers; and (e) delays in implementation of the approved Procurement Plan for the main TSDP.

UNRA’s board has given approval to fill 46 vacant positions in its various directorates. Currently, only 14 of the proposed positions can be filled as a result of the wage cap. An action plan to lift the cap on recurrent expenditure has been discussed with the GoU. UNRA will also pursue the transfer of all operational expenses related to road maintenance to a special account to be financed by the URF, as stipulated in the Road Fund Act.

Other actions include the following:(a) The PDU to report directly to the Executive Director to increase management oversight and monitoring of procurement functions; (b) unbundle the concentration of activities in the PDU and delegating and reassigning activities as appropriate to functionally designated units;(c) recruitment of a Procurement Consultant to provide hands-on coaching and mentoring to the PDU staff; (d) introduce an outsourced independent procurement evaluation to benchmark and validate UNRA’s procurement actions; (e) strengthen the internal audit functions of UNRA to provide real-time technical audits of road projects/program implementation; (f) strengthen the PPDA’s oversight function through the World Bank Integrity Vice Presidency’s capacity-building initiatives; (g) enhance mechanisms for stakeholder and external monitoring of road projects; and (h) establish acceptable MIS for procurement tracking.

Fraud and corruption M-I

Petty and high-level corruption are prevalent and affect every institution in the country and are rifest in procurement, privatization, administration of revenues and public expenditures, and public service delivery.Despite the Government’s purported zero tolerance policy on corruption, few, if any, high-level officials involved in major corruption scandals have been tried, hindering attempts to raise the bar and address lower-level corruption.

The World Bank is working with the GoU to reinvigorate institutions and accountability systems, rethinking decentralization policies, and relaunching stalled public service reform processes. The Governance and Anticorruption is a cross-cutting pillar in the CAS 2011–15 and plans are being built into new operations and the value for money agenda is supported across the portfolio, including in Analytical and Advisory Activities/Economic Sector Work, particularly the

43


Performance Evaluation Reviews. The recently developed data tracking mechanism provides the Government with a self-assessment tool for corruption and governance and identifies areas where key reforms to address governance have failed. This will help provide pointers for better governance arrangements in investment projects.

3. Project risks

Design M-L Capacity of UNRA to review the quality of documents submitted by design consultants is highly constrained.

A substantial technical assistance program to strengthen the capacity of UNRA has been built in the TSDP to address this.

Social and environmental M-I

Relevant environmental regulations and policies are largely in place but not adequately implemented. Capacity of the implementing agency for environmental management, including supervision of implementation of planned environmental mitigation measures is lacking.Project road crosses Kibale National Park with critically endangered primate species including chimpanzees.

The Roads Authority retains consultants for the implementation of RAPs and their reporting is weak and irregular in spite of guidance provided by IDA.

Implementing agency will continue receiving capacity strengthening assistance from the European Union. The ESIA and RAP for the Kamwenge-Fort Portal road will guide the road works undertaken in the AF. Implementation of the environmental management plans and RAPs will be undertaken by the contractor and UNRA with support of short-term consultants respectively. Environmental mitigation measures, as outlined in the ESIA, will be implemented, including (a) a special, low impact regimen for road upgrade design and activities in Kibale National Park; (b) intensive IDA supervision; and (c) advisory monitoring of project activities in Kibale National Park by a major conservation, NGO, or academic entity.

Capacity building in UNRA with one additional sociologist and all to be trained in monitoring and reporting for RAPs implementation.

Program and donor M-IFramework for program and donor coordination is not strong, and proposed subcommittees of the Transport Sector Working Group do not meet regularly.

Meetings of the Transport Sector Working Group to be held on a monthly basis and the subcommittees to sit more frequently, as and when needed. Progress of the previous year and program of the following year to be discussed annually.

Delivery Quality M-I Capacity of UNRA to supervise major civil works contracts is highly constrained.

A substantial number of technical assistants under a technical assistance program to strengthen the capacity of UNRA has been built in the TSDP to address this.

Overall Risk Rating at Preparation

Overall Risk Rating During ImplementationComments

M-I M-I

44

Table 2.5. Summary of List of Actions Arising out of October 27, 2015: (response to the complaint to management)

No. Issue Actions

1 Compensation

(a) Provide the World Bank with a comprehensive report including strip maps on the compensation status of the PAPs on the Kamwenge-Fort Portal road, including number of PAPS in original, first supplementary, second supplementary, and third supplementary; location of PAPs by chainage; and type of compensation impact, cost, and progress in payments; and (b) 100 percent compensation of PAPs by December 31, 2015.

2 Road safety

(a) All safety signage and speed humps along the road installed as per the engineer’s instructions; (b) PAPs living in houses in precarious conditions compensated, relocated, and houses demolished in km 193+535, km 150+750, km 156; (c) Proper safety barriers erected in areas with heavy excavations on the road or at high embankment locations and not the single run tape provisions currently in place; (d) Prepare and implement a robust Traffic Management Plan; and (e) Undertake road safety campaigns.

3 Child protection

(a) Sign contract on expanded Terms of Reference with the HIV service provider to undertake child protection work, including collaborations as necessary with other competent persons and institutions to deliver this priority task;(b) Implement the child protection activities specified in the contract, including but not limited to sensitization, awareness campaigns, liaising with schools, health centers, sensitization of contractor’s workers, liaising with local communities, MoGLSD, parents, crime preventers, linking to legal services, liaising with police on prevention and prosecution, and preparation and display of zero tolerance materials toward child protection.

4

Employment contracts, workman’s compensation, identity cards

(a) Prepare and sign contracts with workers that are compliant with the national labor laws, (b) Document all payments paid to accident victims (both workers and members of the public) in accordance with the national laws and the contract, (c) Maintain the accident log and status on follow-up of claims, and(d) Provide all workers with identity cards.

5 Sexual harassment

(a) Provide a copy of the sexual harassment policy, (b) Implement the zero tolerance toward sexual harassment policy including sensitization of all contractor’s workers, and (c) Provide gender-separated facilities.

6 General health and safety

(a) Register workplace with the MoGLSD;(b) Prepare and implement an Occupational Health and Safety Plan, eecruit a competent Occupational Health and Safety Officer; (c) Provide Occupational Health and Safety training to all workers; (d) Provide drinking water, bath, changing, and sanitation facilities (including gender separated facilities) to workers; and (e) Provide appropriate and adequate Personal Protective Equipment to all workers and ensure its use by all the workers.

7Grievance Redress Committees (GRCs)

(a) Ensure adequate facilitation (stationery) and working of the GRCs; and (b) Prepare monthly progress report on their functionality, complaints received, and status of resolution.

8Communication and Community Engagement Plan

(a) Prepare and implement a Communication and Community Engagement Plan that ensures that communities are informed of road activities, receive feedback on the status of their compensation, and can also air other concerns related to the project road that the GRCs cannot handle or resolve at the community level; and (b) Ensure non-retaliation of community members, workers, or other parties who have raised complaints.

9 HIV/AIDS (a) Ensure implementation of HIV/AIDS service provider work according to the

45

No. Issue Actionssensitization awareness and education

contract with timely payment of the service provider and review the work undertaken to ensure compliance with national standards.

10

General ESMP and associated social and environmental requirements

(a) Undertake actions included in the ESIA, 2011 ESMP, and the contractor’s 2014 ESMP: (i) take reasonable precautions to prevent unlawful conduct on by its employees; (ii) provide accommodation for workers in a camp; (iii) prepare and implement a Gender Action Plan which includes gender sensitization for communication and conduct toward women; (iv) retain an environmental and social specialist on site; (v) provide separate bath and toilet facilities for men/women; (vi) allocate certain jobs to women; (vii) implement an HIV prevention and awareness program; (viii) prohibit child labor; (ix) institute and enforce a policy to prevent sexual harassment; and (x) establish a community liaison; and (b) Comply fully with NEMA conditions of approval for operation of quarries and other work sites, including not blasting before compensating people living within a 500 m safety radius; wet crushing, proper waste material disposal, proper licensing, operation and restoration of borrow pits, quarries, dump sites, and other work sites; and (c) Comply with the project environmental requirements and the Uganda Wildlife Authority approvals for work undertaken in Kibale National Park.

11 Drainage and access

(a) Address drainage and access provision issues as per engineer’s instructions and community requests.

12 Work resource mobilization

(a) Mobilize adequate, good working equipment and competent personnel as per contract requirements and engineer’s instructions.

46

Annex 3. Economic and Financial Analysis

Project Efficiency

1. Appraisal: Economic Evaluation of the Upgrading of the Gulu-Atiak road (74 km)

1.1 Project Costs

1. Economic analyses for the upgrading of the Gulu-Atiak road at appraisal were undertaken using the Highway Development and Management Model (HDM-4). The analyses were based on economic costs, excluding taxes and duties. The economic costs were assumed to amount to 91.9 percent of financial costs and the discount rate used was 12 percent. The appraisal period was 25 years. No shadow pricing of unskilled labor was undertaken.

2. Before the improvement, the road had a gravel surface in poor condition. The subprojects comprised the construction of a new sub-base, base, and a bituminous surfacing for the main carriageway and its shoulders; upgrading the road furniture; and the installation of drainage structures. Two alternative design standards were defined for the road: Alternative A - DBST on 200 mm crushed stone-base course, 150 mm mechanically stabilized sub-base, and 150 mm natural gravel subgrade and Alternative B - 50 mm asphalt concrete on 200 mm crushed stone-base course, 150 mm mechanically stabilized sub-base, and 150 mm natural gravel subgrade. Alternative A was found to be the less costly option. The financial costs for the upgrading of this road project are summarized in table 3.1.

Table 3.1. Financial Costs of Upgrading Gulu-Atiak Road Project at Appraisal

Description Length (km)

Total Cost (US$, millions) Cost/km (US$)

Alternative A Alternative B Alternative A Alternative B

Gulu-Lacor

Lacor-Atiak

11

63

9.0

51.6

11.0

63.0

818,919

818,919

1,000,000

1,000,000

Total 74 60.6 74.0 818,919 1,000,000

3. The maintenance regimen adopted for each alternative was a scheduled routine and standard periodic maintenance. Total maintenance costs were approximately the same for alternatives A and B. Traffic growth from 2010 to 2023 was assumed as 6 percent a year and 3 percent thereafter for all vehicle types. The road project road was split into two sections for economic analysis, with a separate assessment of traffic for each link The HDM-4 analysis was based on economic factors alone to calculate the viability of the proposed works. The results were predominantly influenced by road roughness, which was greatly improved because of the pavement upgrading.

1.2 Results of the Economic Analysis at Appraisal

4. The results of the economic analysis are set out in table 3.2. The analysis indicated that for both Alternatives A and B, road upgrading for the two road sections was economically

47

feasible with an EIRR well in excess of the 12 percent economic feasibility threshold. The combined result for Alternatives A and B on all the sections gave NPVs (at a 12 percent discount rate) of US$25.68 million and U$16.91 million, respectively. The approximate overall EIRR for the combined projects under Alternative A was 18.l percent, while that for Alternative B was 15.5 percent.

48

Table 3.2. Summary of Main Inputs and Results of the Economic Analysis

Location Alternative

Surface TypeLength (km)

Pavement Width Initial

Roughness (IRI m/km)

Base Year 2007

ADDT Range

Revised Financial Costs Revised Economic Analysis

Existing Appraised Existing NewTotal Cost

(US$,millions)

Cost per km (US$)

NPV at 12% (US$,

millions)

NPV/Cost Ratio

Gulu-Lacor

AB

Gravel Gravel

DBST/CSB AC/CSB

1111

5.05.0

9.59.5

14.014.0

779779

9.00811.000

818,9191,000,000

13.9412.56

1.5481.142

Lacor-Atiak

AB

Gravel Gravel

DBST/CSB AC/CSB

6363

5.05.0

9.59.5

17.017.0

330330

51.59263.000

818,9191,000,000

11.744.36

0.2280.069

Note: AC = Asphalt Concrete; ADDT = ; CSB = Crushed Stone-Base; IRI = International Roughness Index; Economic costs in the economic analysis were calculated to be 91.9 percent of financial costs. The combined project EIRRs are derived from the HDM-4 output tables.

49

1.3 Sensitivity Analysis

5. The sensitivity analyses undertaken examined the impact on the economic feasibility of assuming 20 percent lower traffic, 30 percent higher investment costs, and a worst-case scenario combining 20 percent lower traffic and 20 percent higher investment costs. The analyses indicated that all sections using Alternative A would remain economically feasible, even with 20 percent higher investment costs and 20 percent lower traffic. However, the more expensive Alternative B was uniformly more uneconomical because of its higher overall investment costs. Alternative A was selected as a more robust investment.

2. Appraisal: Economic Evaluation of Upgrading of Vurra-Eruba, Arua-Oraba road (85 km)

2.1 Project Costs

6. Economic analyses for the upgrading of the Vurra-Eruba-Arua-Oraba road at appraisal were undertaken using HDM-4 on the same basis as for the Gulu-Atiak road. The existing road in this case was a gravel road in fair condition. Base year (2009) traffic estimates and subsequent traffic growth assumptions are used for the economic analysis, as shown in tables 3.3 and 3.4.

Table 3.3. Average Annual Daily Motorized and Non-Motorized Traffic at AppraisalRoad Section Vurra-Eruba Arua-Manibe Manibe-Koboko Koboko-Oraba

Motorized 422 1,584 694 1,685Bicycles 1,140 2,735 422 1,567Pedestrians 536 1,430 1,021 2,122

Table 3.4. Expected Traffic Growth Rates for Motorized TrafficAnalysis Period Vurra-Arua Eruba-Arua-Manibe Manibe-Koboko Koboko-Oraba

Existing Surface Type Unpaved Paved Unpaved UnpavedGrowth Rate Passenger Freight Passenger Freight Passenger Freight Passenger Freight

>2012–16 7.6 7.3 7.4 5.3 7.6 5.3 7.6 8.12017–26 7.0 6.0 6.0 5.0 7.0 6.0 7.0 6.0

2027 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0

7. The project road was split into six links for the economic analysis, with separate assessments of traffic for each link. The HDM-4 analysis is based on economic factors alone to calculate the viability of the proposed works.

Results of Economic and Sensitivity Analysis at Appraisal

8. The results of the revised economic analysis by alternative are set out in Table 3.5. The analysis undertaken using HDM-4 indicates that each upgrading alternative for the two road sections is economically feasible, with EIRRs well in excess of the 12 percent economic feasibility threshold. A combined result for all the road sections is given in table 3.5. Alternative A, which has the highest NPV of US$53.96 million and an EIRR of 21.2 percent, made it the selected option for the detailed design. The analysis by section revealed that the VurraEruba section failed with an NPV of −US$2.11 million and EIRRs below the 12 percent discount rate of 5.5 percent. All other sections had positive NPVs and EIRR above 12 percent. The sensitivity

50

analyses indicated that all sections using Alternative A would remain economically feasible, even with 20 percent higher investment costs and 20 percent lower traffic.

Table 3.5. Summary of Economic Analysis by Alternative

Alternatives NPV (US$, millions) EIRR (%)Alternative

Carriageway

A – DBST with 6.5 m wide 53.96 21.2

Alternative B - AC with 6.5 m wide carriageway 47.36 19.4Note: AC = Asphalt Concrete.

3. Additional Financing: Economic Analysis for the Kamwenge-Fort Portal Upgrading (66 km)

9. The economic analysis of the additional works for upgrading the Kamwenge-Fort Portal road was also carried out using HDM-4 and was based on the estimated costs from the design stage and the projected traffic volume. Financial costs were determined for each section and converted to economic costs by applying a conversion factor of 83 percent based on UNRA’s procedural guidelines. The period of analysis was 20 years, with cost and benefits discounted at a rate of 12 percent using benefit categories of savings in vehicle operating costs, timesaving, and induced agricultural production. Traffic volumes were 1,569 motorized vehicles per day and 788 nonmotorized vehicles per day (mainly bicycles). A sensitivity analysis was also conducted by varying investment costs and traffic growth. In the worst-case scenario (combining −20 percent traffic and +20 percent costs), overall project NPVs/EIRRs for the Kamwenge-Fort Portal road were US$-5.7 million and 13.2 percent, respectively.

10. On the other hand, an EIRR of 13.4 percent and NPV of US$20.5 million were obtained when a corridor-wide (that is, Nyakahita-Kazo-Kamwenge-Fort Portal) sensitivity analysis is done. The sensitivity analysis results indicate that even in the worst-case scenario of lower traffic growth rate of 20 percent and higher investment cost of 20 percent, upgrading the Kamwenge-Fort Portal road to bitumen standard offers robust results—that is, with an EIRR of 13.2 percent, which is higher than the economic viability threshold of 12 percent. The economic analysis results indicate that the project is economically viable. The economic analysis (base case) showed the preferred option to be DBST, on crushed stone aggregate base and natural gravel sub-base, with an EIRR return of 16.8 percent and NPV of US$19.9 million. For the corridor, the EIRR was 19.6 percent and the NPV was US$117.4 million, as summarized in table 3.6.

Table 3.6. Kamwange-Fort Portal Road Economic Analysis Results (Base Case) at Appraisal

Road Link and intervention NPV@12%(US$, millions) EIRR (%)

Kamwenge-Fort Portal road (DBST) 19.9 16.8Project corridor 117.4 19.6

4. Results at Completion

Gulu-Atiak Project Analysis Results

51

11. The economic evaluation results of the DBST base case cost-benefit analysis, considering the final completion economic cost of construction of US$563,182 per km and the central 2014 Annual Average Daily Traffic for the entire road, indicated an EIRR of 28.3 percent. The NPV was US$65.09 million. The EIRR is above the cutoff rate of return of 12 percent opportunity cost of capital in Uganda and thus, confirms the viability of the intervention in the project.

Vura-Arua-Oraba Project Analysis Results

12. The economic evaluation results of the DBST base case cost-benefit analysis, considering the final completion economic cost of construction of US$612,100 per km and the central 2014 AADT traffic for the entire road, indicated an EIRR of 18 percent. The NPV was US$22.507 million. The EIRR is above the cutoff rate of return of 12 percent opportunity cost of capital in Uganda and thus, confirms the viability of the intervention in the project.

Kamwenge-Fort Portal Project Analysis Results

13. The economic evaluation results of the DBST base case cost-benefit analysis, considering the final completion economic cost of construction of 737,955 per km and the central 2014 AADT traffic for the entire road, indicated an EIRR of 9.7 percent. The NPV was US$ −6.196 million. The EIRR is below the cutoff rate of return of 12 percent opportunity cost of capital in Uganda. However, this result may be disregarded because the project was not actually completed at closure.

Table 3.7. Summary of Base Case Economic Evaluation Results at Completion

Road Section Investment Cost (US$, millions)

Economic Cost Per Km

NPV (US$,

millions)

EIRR (%)

Gulu-Ataik (74 km) road 49.03 563,182 65.089 28.3Vurra-Arua-Oraba road (85km) 61.21 612,100 22.507 18.0Kamwenge-Fort Portal (66 km) road 57.30 737,955 −6.196 9.7

Source: UNRA 2016 HDM4 Project Completion Results.

Operational and Administrative Efficiency

14. The project has been characterized by delays. The MTR reported that most components were behind schedule; the Trust Fund Administrative Agreement took 23 months before approval, by which time the value of DFID Grant had shrunk by 30 percent because of exchange rate fluctuations. At the AF, steps were taken to improve procurement capacity; however, by closure, most of the reforms in the transport sector had still not been completed. The Kamwenge-Fort Portal road could only have been completed using IDA finance if a further extension of the closing date had been approved, but this did not happen as the Credit was cancelled.

52

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/Specialty

LendingNina Chee Regional Safeguards Adviser OPSPFMartin Fodor Sr. Environmental SpecialistGrace Nakuya Musoke Munanura Senior Procurement Specialist GGO01

Faith-Lucy Matumbo Program Assistant AFCE1Richard Olowo Lead Procurement Specialist GCFKE

Nina M. Jones Program Assistant AFTTR - HIS

Agnes Kaye Program Assistant AFMUG

Labite Victorio Ocaya Sr Highway Engineer AFTU1 - HIS

Dieter E. Schelling Consultant GSURRPaul Kato Kamuchwezi Sr. Financial Management Specialist GGO31Zemedkun Girma Tessema Sr. transport Specialist GTI07Constance Nekessa-Ouma Social development Specialist GSU07 Subhash C. Seth Consultant GTI06Supervision/ICRRichard Martin Humphreys Lead Transport Economist GTI01Negede Lewi Sr Highway Engineer GTI01Peter Nigel Freeman Consultant GTI01Stephen Muzira Sr. Transport Specialist GTI01Paul Kato Kamuchwezi Sr Financial Management Specia GGO31Agnes Kaye Program Assistant AFMUGGrace Nakuya Musoke Munanura Senior Procurement Specialist GGO01

Labite Victorio Ocaya Sr Highway Engineer AFTU1 - HIS

Subhash C. Seth Consultant GTI06Celi Marie Dean Temporary GTI01Barbara Nalugo Program Assistant AFMUGConstance Nekessa-Ouma Social Development Specialist GSU07Franklin Mutahakana Sr. Operations Officer AFMUGHerbert Oule Sr. Environment Specialist GEN01Shamiela Saeki Mir Communications Officer ECRIMSheila Byiringiro AFRECZemedkun Girma Tessema Sr. Transport Specialist GTI07

53

(b) Staff Time and Cost

Stage of Project CycleStaff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

LendingFY05 0.18 3.30FY06 0.0 4.26FY07 0.0 0.0FY08 8.56 48.76FY09 25.19 130.1FY10 30.78 171.8

Total: 64.71 358.22Supervision/ICRFY10 5.72 27.3FY11 21.18 71.4FY12 30.47 70.9FY13 31.75 112.3FY14 20.89 83.4FY15 19.98 101.3FY16 43.96 272.4FY17 12.5 146.2

Total: 186.45 885.2

54

55

Annex 5. Summary of Borrower's ICR34 and/or Comments on Draft ICR

1.1. Introduction

1. This document is the contribution of the GoU ICR of the TSDP, which was co-financed by IDA and DFID through Credits and a Grant, respectively. The GoU and the DPs attached great importance toward the achievement of the PDOs. The ICR provides an evaluation of the TSDP implementation and operation against the costs and benefits that have been derived from the project finances. The ICR also provides an assessment of lessons learned, the financiers’ performance in relation to their respective obligations under the financing agreements, and the extent to which the purpose of the finances were achieved. It is intended that the project performance data provided in this ICR will assist the World Bank in the preparation of its final ICR.

1.2. Context at Appraisal

2. In 1996, the GoU, with the assistance of DPs, formulated the first 10-year (1996/97–2005/06) RSDP Phase 1. In April 2002, RSDP Phase 1 was updated and rolled over to the second 10-year RSDP Phase 2 (2001/02–2010/11) and its total estimated cost was increased from the original US$1.5 million to US$2.3 billion. An MTR of RSDP Phase 2 was carried out in 2007/08 to assess the pace of implementation. The findings and lessons drawn from RSDP Phase 2 were to be used in the preparation of RSDP Phase 3 (2009/10–2018/19). It had been planned to continue with a fourth phase (RSDP Phase 4) that would have financed those RSDP Phase 3 projects that could not be financed because of cost increases. During a bilateral meeting between MoWT and IDA on October 7, 2008, it was decided that the GoU could finance most of these items through an increased road sector allocation.

3. The road component of the proposed TSDP was intended to support a three-year period (2010/11–2012/13) of the Five-Year National Roads Development and Maintenance Plan prepared by UNRA as an interim investment plan. The TSDP was aimed at improving the sector performance through contributing jointly with other DPs in a sector wide approach. The TSDP was intended to be the first in a series of proposed transport sector projects that would individually support three-year rolling plans of the overall road transport investment and reform program. Total financing of the TSDP was US$198 million, with IDA supporting the project with Credits of US$190 million and a Grant of US$8 million from DFID.

1.3. Project Development Objective and Key Indicators

4. An SIL-financed the TSDP. This instrument was selected as the most appropriate to support sector reforms and capacity building, complemented by targeted infrastructure investment, all to be accomplished within a defined period.

5. The key development objective of the TSDP was to improve the performance of the transport sector in Uganda to enhance economic growth and reduce poverty through (a) reduction of transport costs and travel times on major corridors, (b) improvement of road safety,

34 To avoid duplication, details on outputs and funds per component and economic and financial analysis are to be found in annex 2A and 3.

56

and (c) enhancement of sector management capacity.

6. The project outcome indicators included the following:

(i) The reduction of transport costs and travel times on major road corridors and enhancing regional connectivity

(ii) Share of national roads in poor condition decreased

(iii) Percentage of rural population with access to an all season road in the target area increased

(iv) Decline in annual rate of growth of accident fatalities

1.4. Key Project Data

Table 7.1. Key Project Data

Project ID Type Credit/Grant No.

Approval Date

Financing Agreement

Signing

Effectiveness Date

Closing Date

Amount (US$,

millions)

P092837

Credit IDA-49790 December 10, 2009

February 3, 2010 July 15, 2010 January

31, 2016 190.00

Grant TF-11094 April 6, 2010

March 27, 2012 March 27, 2012 June 30,

2014 6.15

AF Credit IDA-46790 June 16, 2011 June 5, 2012 October 22,

2012January 31, 2016 75.00

Total Amount 271.15

1.5. Risk Assessment and Mitigation at Appraisal

7. The following are the critical project risks and proposed mitigation strategies:

Table 7.2. Risks and Mitigation Measures

Description of Risk Why is it Important? Risk Rating Mitigation Measures Residu

al RiskThe URF is not operational as per the law. One of the requirements of the Road Fund Law is that user charges are being transferred directly from the source to the URF on a monthly basis.

The URF is essential for the sustainability of the road network. The URF is expected to provide a consistent flow of finance for maintenance. This will help develop the local construction industry.

M

The URF, with the MoFPED approval, will cover the funding for that maintenance of the project. The MoFPED has already committed to secure the budget allocation for the project while UNRA will prioritize the project among other maintenance requirements.

L

57

Description of Risk Why is it Important? Risk Rating Mitigation Measures Residu

al Risk

UNRA’s constrained implementing capacity

The increased annual budget allocation for the national roads subsector (from an average for US$100 million from 2001/02 to 2007/08 to about US$500 million from 2008/09 to 2014/15) requires a substantial increase in UNRA’s implementing capacity.

S

To mitigate this risk, UNRA will establish a Contract Management Team responsible for managing the project on behalf of the UNRA.

M

Financial management risks

Substantial country risks persist S

UNRA, which takes on the key financial management responsibility for the project, has substantial experience and a good financial management record (from its predecessor RAFU)

M

Procurement risksUNRA procures works for over US$500 million annually.

H Regular monitoring and follow-up of procurement timelines. S

Overall risk rating: ModerateNote: Rating of risks is on a four-point scale: H = High; S = Substantial; M = Moderate; and L = Low.

1.6. Implementation Arrangements

8. MoWT and UNRA implemented the project. UNRA is the legal entity responsible for the development, maintenance, and management of the national road network under the supervision of MoWT. The proceeds of the credit were availed by the MoFPED to UNRA as a Grant. The Permanent Secretary of MoWT and the Executive Director of UNRA were the Accounting Officers for the project. MoWT implemented Components B, C, and D, while UNRA implemented Components A and E. The Permanent Secretary of MoWT and the Executive Director of UNRA delegated the function of the day-to-day management of the project to the TSDP Project Coordinators within MoWT and UNRA. MoWT and UNRA implemented the project fully mainstreamed in the existing institutional systems. Project Managers were appointed by UNRA for day-to-day management of the project. UNRA was responsible for the overall financial management of the project and the timely presentation of consolidated progress reports and consolidated unaudited interim financial reports to IDA.

1.7. Partnership Arrangements

9. The TSDP was co-financed by IDA (US$190 million equivalent) and DFID (US$8 million equivalent). It was supported jointly by parallel funding from other DPs for a three-year period (2010/11–2012/13) of the implementation of the GoU’s National Transport Master Plan (NTMP) in a sector wide framework. The GoU led the coordination through annual Joint Transport Sector Review meetings and quarterly performance reviews, where progress against the targets set were reviewed and discussed with sector stakeholders. Furthermore, to monitor and coordinate the reform process in general and the implementation of the RSDP in particular, a Steering Committee was set up within the MoFPED, consisting of its Permanent Secretary/Secretary to the Treasury as Chairperson and Officials from the Ministry of Public

58

Service and MoWT as well as representatives of the DPs.

1.8. Sustainability

10. MoWT was to enhance its policy setting, strategic planning, oversight, and monitoring capacity and assist the various executing agencies to perform their duties that were crucial for the sustainability of the transport sector program. Improvement of maintenance performance was key for the sustainability of the road sector program. This required timely and stable availability of maintenance funding and capacity of the private sector. In the past, when maintenance of the national roads was under MoWT, the quality of maintenance was mixed, as the maintenance budgets were unpredictable and fluctuating, and as a consequence, planning was difficult and the local construction industry did not develop adequately. It was expected that with the establishment of the URF on July 1, 2010, the situation would improve.

2.1. Project Components

11. The project was structured into five components intended to achieve the PDOs to improve the connectivity and efficiency of the transport sector through (i) improved condition of the national road network; (ii) improved capacity for road safety management; and (iii) improved transport sector and national road management.

Component A: Road Investments: Upgrading and Rehabilitation of National Roads

12. This component comprised the following subcomponents.

Subcomponent 1: Upgrading of Gulu-Atiak Road (74 km) to Bitumen Standard

13. The works are completed. The road is constructed to a width of 6.5 m, with 1.5 m shoulders either side (increased to 3.25 m in urban areas to allow for parking). The works executed include (a) geometric improvements to the existing road’s vertical and horizontal alignment carried out to conform with UNRA’s requirements as provided for in MoWT Road Design Manual and in the standard and special specifications for the civil works; (b) site clearance and removal of topsoil; (c) earthworks for new alignment inclusive of the formation of all drains, side ditches, junctions, and minor link roads in urban and rural locations and in climbing lanes; (d) construction of embankments over swamps; (e) construction of pavement layers consisting of a mechanically modified sub-base and crushed stone-base and double bituminous surface dressing as a wearing course; (f) construction of rigid pavement at two roundabouts and five major junctions; and (g) installation of streetlights at the two roundabouts, road marking, guardrails, road signs, bus-bays, speed humps, rumble strips, and other items of road furniture.

Subcomponent 2: Upgrading of Vurra-Arua-Oraba Road (85 km) to Bitumen Standard

14. The works are completed. The road is constructed to a width of 6.5 m, with 1.5 m shoulders either side (increased to 3.25 m in urban areas to allow for parking). The works carried out under this subcomponent include the upgrading of the existing gravel road to a class II bituminous standard road. The pavement structure comprised 200 mm mechanically stabilized gravel sub- base, 200 mm crushed stone-base, and DBST wearing course—900 mm and 1,200

59

mm main culverts and 600 mm access culverts were constructed. Longitudinal drains comprised earth and lined (stone pitch and concrete) drains. Ancillary works included metal guardrails and vertical road signs to improve safety. HIV/AIDS awareness information was satisfactorily carried out, including education and communication services. Utilities within the road prism were successfully relocated.

Subcomponent 3: Upgrading of Kamwenge-Fort Portal Road (66 km) to Bitumen Standard

15. The road is constructed to a width of 6.5 m, with 1.5 m shoulders either side (increased to 3.25 m in urban areas to allow for parking). The works executed include (a) geometric improvements to the existing road’s vertical and horizontal alignment carried out to conform with UNRA’s requirements as provided for in MoWT Road Design Manual and in the standard and special specifications for the civil works; (b) site clearance and removal of topsoil; (c) earthworks for new alignment inclusive of the formation of all drains, side ditches, junctions, and minor link roads in urban and rural locations and in climbing lanes; (d) construction of embankments over swamps; (e) construction of pavement layers consisting of a mechanically modified sub-base and crushed stone-base and double bituminous surface dressing as a wearing course.

Subcomponent 4: Preparation of Road Design and Bidding Documents

16. Component A also financed consultancy services for feasibility studies, ESIAs, and detailed engineering designs for the reconstruction and upgrading of the following roads:

Tororo-Mbale-Soroti-Lira-Kamdini road (340 km): The contract was amended on October 3, 2013, to allow the consultant to assess the corridor and prepare a long-term OPRC.

Kafu-Karuma-Kamdini road (104 km).

Zirobwe-Wobulenzi road (23 km): The contract was amended to cater for the extended scope of services.

Kamdini-Nebbi-Goli and Ayer-Bobi road (230 km).

Component B: Enhanced Road Safety

17. Under this component, the GoU committed to prepare and develop the National Road Safety Policy and establish and operationalize an NRSA by FY2011/12. The policy was developed and approved on November 26, 2014. However, the Policy Statement for the establishment of the NRSA was not approved. The top management team (TMT) of MoWT recommended the ministry to rather strengthen the capacity of the department implementing road safety issues. The review of the Traffic and Road Safety Act has, nevertheless recommended the establishment of a strong road safety lead agency to replace the NRSC.

18. This component also provided funding for the establishment of an RCDS. Phase I, (needs assessment system design, review of crash form) and Phase II (database software development, training and piloting of the new crash form, and testing the database) were completed.

60

Implementation of Phase III (rollout phase), however, was delayed because of the lack of equipment, which was under procurement. The equipment was eventually delivered to the ministry at the beginning of December 2015.

19. The following pending activities are yet to be implemented to ensure successful completion of the subcomponent:

Securing funds for pending training programs to enable rollout of the RCDS

Roll out of the RCDS country wide

Internet connectivity for the police stations

20. Because of these pending activities, a request for contract extension was granted from December 25, 2015, to December 24, 2016, to successfully roll out the RCDS. This extension approved by the Contracts Committee was subsequently affected by the cancellation of the credits. Cancellation of the credits affected the program in the following ways:

The implementation of the RCDS had reached a critical stage where most of key inputs required for its establishment had been achieved, leaving only training and rollout.

The establishment of the RCDS was left in suspense despite the effort that had been made toward the implementation and commitment from both the ministry and other key stakeholders such as the Uganda Police and UNRA.

Failure to secure funds could waste the expenditure made so far toward the RCDS establishment.

21. The road safety enhancement included an update of the transport sector legal framework by MoWT by July 1, 2013. The drafting principles for the amendment of the Traffic and Road Safety Act were prepared and approved by the ministry’s TMT. The Drafting Principles were reviewed and harmonized with the Roads Bill, which is being drafted by the First Parliamentary Council.

22. Improved roads and increased private car and motorcycle ownership, coupled with the absence of public transport facilities, have led to an alarming deterioration of road safety. In FY2015/16, there was an increase in fatalities by 13 percent over the previous year. The total estimated financial loss as a result of road crashes in Uganda was US$1.32 billion in 2015. The economic cost of dealing with the consequences of road trauma already runs into hundreds of billions of dollars each year and the social cost is equally high. The TSDP’s outcome indicator was to reduce the accident fatality rate and enhance safety. The TSDP cancellation based on the failure of one activity (that is, Kamwenge-Fort Portal road) should not have affected other important Government priorities such as the rollout of the RCDS, customization, technical support, and training.

Component C: Urban Transport Planning: Preparation of Kampala Urban Transport Project

61

23. MoWT implemented this component. The main purpose was to finance the feasibility study, detailed engineering designs, and contract preparation for the pilot BRT project for the GKMA and fund preparation for the legislation for the establishment of a MATA.

24. The BRT feasibility study and system engineering designs were prepared and completed, ready to be implemented by the Government. Drafting Principles for the establishment of the MATA Bill were prepared and approved by the Cabinet (January 2016). The approved Drafting Principles have been forwarded to the First Parliamentary Council for Drafting of the bill. The GoU affirms that the establishment of MATA is a priority institutional reform strategy to mitigate the challenges of congestion within the GKMA, which is faced with high urbanization resulting into increased motorization. Commitment to actualize plans is yet to be concretized by concerned Ministries, Departments, and Agencies.

Component D: Institutional Support to the Ministry of Works and Transport

25. The GoU Sector Policy required MoWT to carry out institutional reform actions to devolve power to the new institutions accountable to it. This required redefinition of the role of the ministry to focus on policy formulation, sector oversight, strategic planning, setting standards, and M&E. To that effect, MoWT launched a number of studies and service contracts under this component. The main activities undertaken are summarized below.

Strengthening of the Policy and Planning Division

26. Under this component, the ministry was able to procure hardware office equipment and design DEVINFO for the establishment of the TSDMS. The TSDMS was launched and commissioned in 2014 at a joint Transport Sector Review Workshop. The system has been tested and is currently being used. A number of studies related to transport policy and planning were carried out by the ministry, namely the development and update of an NTPS, the Inland Water Transport Legislation, whose drafting principles have been approved and forwarded to First Parliamentary Council for drafting of the bill. The detailed Strategic Implementation Plan for the National Transport Master Plan including the Plan for GKMA was prepared and successfully developed. Preparation of a condition survey for the DUCAR network and creation of a database were completed. The final draft of the NTPS was presented to the TMT and discussed. However, it did not obtain financial clearance approvals from the MoFPED to enable submission of the Cabinet Memorandum to the Cabinet Secretariat. The NTPS supported the establishment of the NRSA and MATA but experienced serious financial setbacks after the TSDP Credit cancellation. Further, consultation is being made with relevant stakeholders to clarify and respond to issues raised by the MoFPED before resubmitting the draft for financial clearance and, thereafter, to proceed with submission to the Cabinet Secretariat for approval.

Technical Assistance toward Establishment of MTRA

27. Technical officers of the ministry undertook in-depth consultations about the establishment of the MTRA. They collaborated with all transport sector stakeholders. The concept of establishing a new MTRA was mooted to take over the functions of the Directorate of Transport. The stakeholders objected to this concept and advised through the TMT to alternatively strengthen the capacity of the Transport Directorates to enable them to perform this

62

task.

Other Support to MoWT through TA, Studies, Equipment, and Training

28. This component was focused on assistance to transform the DUCAR divisions to an agency through technical assistance, purchase of equipment, training, and finance operating costs. The ministry was able to procure information technology equipment for a DUCAR data center and for the local governments to improve the condition of the local roads. The ministry increased the capacity and skills in transport planning by training a number of several officers in Transport Planning and Economics to master’s level at Leeds University. It is important to evaluate and take into account the knowledge, skills, talents, and competencies achieved as a result of the TSDP activities in Uganda.

Component E: Institutional Support to UNRA

29. The main activities undertaken under this component are summarized in the following paragraphs.

30. Upgrading of regional offices. This involved the detailed design, construction, and supervision for the upgrading of five UNRA regional offices. The design and supervision contract commenced on April 18, 2013. The design is completed, but the supervision phase depended on the procurement of the works contract, which was subsequently affected by the cancellation of the credits.

31. Road inventory and mapping. About 10,000 km of roads that were formally district roads and reclassified as national roads were transferred to UNRA for management. The data collection, which included mapping of this new network, inventory of the road assets, condition assessments, and traffic census information, were substantially completed in December 2011. Quality assurance and uploading of the data in the RMS was successfully completed on May 4, 2012. The contract was completed with the commissioning of the RMS in June 2012.

32. Development of a GIS Right-of-Way Management Information System. The aim of developing this system was to support the RAP preparation, land acquisition, registration and land administration, query, complaints management, and M&E. A computerized database of the Right-of-Way information was created to increase efficiency and effectiveness of service delivery at UNRA.

33. System development was completed and the system was installed on the UNRA server and end-user computers. Capacity building and training of end users was conducted. A core team of GIS officers was trained to give technical and helpdesk support. The system is being used on new projects and data generated from previous projects will be uploaded. Training and capacity building will be continued, especially to cater for new staff joining the organization. The designer, because of intellectual property rights, can only implement future system upgrades and modifications. There is need to put in place a service maintenance contract to cater for upgrades and any changes requested by end users. Furthermore, the system was developed based on ArcGIS software, licensed software from ESRI. There is, however, favorable development in free GIS software. The cost of maintenance would have been lower where the system is to be designed based on free GIS software.

63

34. Equipment. Fifteen double cabin pickup vehicles and heavy-duty scanners were procured.

Technical Assistance: Specialist Assistance (UNRA)

35. Communication Specialist. The consultant commenced work on May 4, 2012. The contract was for a period of two years with the original expiry date of April 24, 2014, but was extended to October 23, 2014.

36. Procurement. The consultant commenced work in August 2010. The consultant doubled as the Acting Director for the PDU. The consultant offered his services up to June 31, 2014, when he handed over the work to a new substantive Director, who was appointed by UNRA. In addition, a Procurement Specialist was recruited, who commenced service on July 21, 2011, up to October 22, 2015.

37. Ferry Services Advisor. The contract with the Ferry Services Advisor was for a period of six months and commenced on July 10, 2012.

38. Axle Load Control Advisor. The consultant commenced the services on September 30, 2013, and concluded on January 31, 2015.

39. Internal Audit Unit. The consultant commenced the services on September 30, 2013, for a period of two years.

40. General capacity building. The two-year contract for these services commenced in June 2014. The contract was terminated on December 30, 2015, because of the restructuring exercise the organization was undergoing.

41. Asset management support. This was a two-year support service intended to help UNRA fully functionalize its RMS and to mainstream asset management practice in its business. The services commenced in February 2015 and will expire in February 2017.

2.2. Fiduciary Issues

Procurement

42. The procurement for the project was carried out in accordance with the World Bank’s ‘Guidelines: Procurement under IBRD Loans and IDA Credits’, dated May 2004 and revised October 2006; ‘Guidelines: Selection and Employment of Consultants by World Bank Recipients’, dated May 2004 and revised October 2006; and the provisions stipulated in the Financing Agreement. The national legislation on public procurement, as laid out in the Public Procurement and Disposal of Public Assets Act, is generally in line with the World Bank’s guidelines.

Financial Management

43. The financial management for the project was generally reliable and adequate systems were in place. Pastel accounting software was used to account for project funds. The project

64

finances were released and utilized in accordance with the agreed financial schedule. The supervision missions reviewed the project financial management arrangements with regard to correct recording of all transactions and balances, to ensure proper use of World Bank’s funds in an economic and effective way for the purpose intended. In this way, the funds disbursement by donor, component, and category were scrutinized.

2.3. Environment and Safeguard Compliance

Gulu-Atiak and Vurra-Oraba Roads

44. The project obtained approvals for ESIAs from NEMA. Auxiliary components of the projects undertook stand-alone environmental assessments and obtained approvals from NEMA. Comprehensive environmental audits for the road projects were undertaken and approvals were also obtained from NEMA.

45. The contractor’s ESMPs were prepared for the two completed projects to guide implementation of environmental and social management and monitoring activities on a continuous basis throughout project implementation. The ESMPs were based on the Environmental Impact Statements and NEMA approval conditions in the licenses and certificates.

46. RAPs were prepared and approved by the Chief Government Valuer to guide mitigation of social impacts and implementation of compensation for PAPs. Both projects procured HIV/AIDS service providers to mitigate social impacts resulting from interaction of workers and the local communities.

Physical Cultural Resources

47. Physical Cultural Resource Assessments were undertaken alongside ESIAs to guide Physical Cultural Resource Assessments’ preservations for both roads. The monument and graves and customs house in Vurra, historical buildings in Arua town, and ritual trees in Aroi sub-county and Koboko were preserved. Historical buildings in Atiak and a historical fort in Pabo were preserved.

Quarries and Borrow Pits

48. The quarry operations for both projects were preceded by stand-alone ESIAs, which were approved by NEMA. A total of 300 borrow pits were opened on the Vurra-Oraba road and almost all have been restored. Forty borrow areas were opened on the Gulu-Atiak road and all have been restored. The few borrow areas that are still operational have been formally transferred to other projects and NEMA informed.

Decommissioning Plans

49. Both projects prepared decommissioning plans for major components, including contractor’s camps, quarries, borrow areas, and spoil disposal areas, which were submitted to NEMA for review and approval. NEMA was informed of the project’s completion and transfer of quarries for purposes of providing materials to other projects.

65

Final Environmental Mitigation Reports

50. Final Environmental and Social Mitigation Reports for the completed projects have been prepared and submitted for review and approval in line with the General Specifications for Road and Bridge Works 2005. The reports will be submitted to NEMA for concurrence before the retention money can be released.

Lessons Learned in Environmental and Social Management

51. The ESMPs should always be undertaken and approvals obtained in line with national systems and World Bank safeguard policies. Conditions of approval and environmental and social contract clauses should always be implemented on a day-to-day basis to avoid noncompliance with environmental and social safeguards. While acquiring quarry facilities, abbreviated RAPs should always be prepared and approved to ensure fair compensation of PAPs. For a discussion of environmental and social issues on the Kamwenge-Fort Portal road, see section 6.

52. For the Kamwenge-Fort Portal road see Section 6.2.

3. Assessment of Outcomes

53. At cancelation of the Credit, the project had achieved 84 percent of the planned km of road to be upgraded (189 km of tarmac against the planned 225 km). The Gulu-Atiak road (74 km) and Vura-Arua-Oraba road (85 km) were completed. About 30 km of the Fort Portal road was complete against the planned 66.2 km. The project, on the whole, met most of the outcome indicators as detailed in the TSDP Results Framework.

3.1. Relevance of Objectives, Design and Implementation

54. The TSDP was highly relevant to the country’s development objectives as stated in the Vision 2040 and the National Development Plan II strategy to achieve middle-income status by 2020. The TSDP strategy was based on achieving the goals of the TSDP of 2008 and the National Transport Master Plan that included the Plan for GKMA and the 2002 draft NTPS. It was consistent with the Government’s poverty reduction and economic growth strategy by improving the rural and urban populations’ access to basic services, markets, and employment opportunities. Through civil works and bridges in remote and isolated areas, it has facilitated connectivity between and within regions as well as employment generation and marketing opportunities. It has complemented other Government efforts with a rich HIV/AIDS agenda in the project areas.

3.2. Justification of Overall Outcome Rating

55. The TSDP is rated Satisfactory because of its contribution to improve the performance of the transport sector in Uganda to enhance economic growth and reduce poverty through (a) reduction of transport costs and travel times on the major corridors, (b) improvement of road safety, and (c) enhancement of sector management capacity.

66

56. Policy and institutional reforms in the transport sector were aimed at supporting MoWT in reviewing its portfolio mandate and rationalizing its service deliveries. However, the targeted authorities had not been established, namely MATA, the NRSA, MTRA, and DUCAR agency. The project ended while the processes toward the establishment of agencies such as MATA and the NRSA were still under way, while the establishment of MTRA and DUCAR has been suspended.

57. The TSDP financed important studies, which comprised an update of the NTPS, Strategic Implementation Plan for the National Transport Master Plan including a Plan for GKMA, Inland Water Policy and Legislation, National Road Safety Policy, and a review of the Traffic and Road Safety Act. Capacity building was also addressed in the subsectors based on information from the studies’ reports. The recommendations from the studies led to skills upgrading training as well as professional enrichment for various categories of staff in all road agencies. In MoWT Department of Policy and Planning, for instance, transport planners and economists received a master’s degree in Transport Planning and Economics from the University of Leeds. A number of staff in the Directorate of Transport and Engineering received short-term training in transport project management and appraisal from the Transportation Institute in Israel. The retooling skills obtained are being put to good use within the ministry.

4. Performance of the Government and the Bank

4.1. Assessment of the Government Performance

58. The performance of the GoU can be assessed as follows:

Positive

The PDOs were consistent and in conformity with Uganda’s Vision 2040, the National Transport Master Plan, and the National Development Plan. It was, therefore, consistent with the Government planning and legal frameworks.

The Government demonstrated its commitment by establishing an acceptable procurement tracking and record keeping system within 12 months of effectiveness.

Reliable and adequate systems for financial management were put in place.

Negative

Contractual noncompliance—the Government did not adequately enforce compliance to road safety issues, labor issues, health and safety issues, and social and environmental safeguards on the Kamwenge-Fort Portal road upgrading works.

Compensation—unsatisfactory progress with respect to the speed in handling the claims and a number of pending compensation claims.

4.2. Assessment of IDA Performance

59. The performance of IDA in the project can be assessed as follows:

67

Positive

The project was consistent with the CAS.

The World Bank played a leadership role among donors in supporting road sector reforms and capacity building.

Regular supervision missions provided the necessary support in project implementation, were constructive, and were strong in enforcing fiduciary measures and safeguards.

Negative

Delays in providing ‘no-objections’

5. Disbursements

Disbursements – by Loan

Proj

ect

Loa

n/G

rant

Stat

us

Cur

renc

y

Ori

gina

l

Rev

ised

Can

celle

d

Dis

burs

ed

Und

isbu

rsed

Dis

burs

ed (%

)

P092837 IDA-46790 Closed US$ 190.00 190.00 30.92 159.08 0.00 83.73P092837 IDA-49490 Closed US$ 75.00 75.00 75.00 0.00 0.00 0.00P092837 TF-11094 Closed US$ 6.15 6.15 0.00 6.15 0.00 100.00

Total 271.15 271.15 105.92 165.23 0.00 60.94

TSDP - Loss in Loan Value (US$40.76 million)

60. The present depreciated value of the two TSDP Credits is US$40.76 million. This represents the movement between the SDR (the Credits’ currency) and the U.S. dollar (the disbursing currency) over the Credit term.

6. Project Closure

61. The project closure was a result of the project not being carried out in accordance with appropriate and agreed social and environmental standards. The genesis of the closure of the project stemmed from the social and environmental social safeguard issues on the Kamwenge-Fort Portal road, which were not adequately managed. This first led to the suspension of the project’s credit disbursements, which culminated in the cancellation of the funding to the TSDP.

6.1. Suspension of the Project Credits Disbursements

62. After road works commenced under the project on August 1, 2013, World Bank supervision missions repeatedly found instances of noncompliance with a number of environmental and social requirements, particularly concerning land acquisition and various physical impacts of construction, and alerted the implementing agency, UNRA, that they

68

required remediation. After multiple reviews, there was a lack of progress with corrective actions and concerns about allegations of sexual misconduct by contracted road workers. The World Bank’s Regional Vice President for Africa sent a letter dated October 21, 2015, to the GoU informing the suspension of disbursements under the project (Credits: IDA-46790 and IDA-49490), effective October 22, 2015. Under the conditions of suspension, no funds already withdrawn and in the project Designated Accounts were to be applied for any payments for civil works on the Kawenge-Fort Portal road. The reasons underlying the suspension were threefold:

(i) Contractual noncompliance. The contractor failed to comply with general contractual requirements including, but not limited to, road safety issues, labor issues, working with the community issues, health and safety issues (including incidences of deaths reported), and environmental issues, among others.

(ii) Compensation. Unsatisfactory progress with respect to the speed in handling the claims and a number of pending compensation claims,

(iii) Social safeguards. There were complaints from the community citing workers of the contractor involved in sexual abuse and sexual harassment of female employees. Certain actions on child protection that were agreed to be necessary had not been fully undertaken.

6.2. Cancellation of the Project

63. Concerns related to sexual misconduct of contracted road workers under the project were first brought to the World Bank’s attention in a letter of complaint from some communities in December 2014. Subsequent World Bank missions to the project site to review the issues raised, working closely with the Government agencies concerned, specialized social development consultants, and a local civil society organization, provided more insight into the complaints. The World Bank concluded that there was credible evidence of project road workers engaging in sexual misconduct with minors. The World Bank alerted the Government and UNRA, urging the involvement of law enforcement and child protection agencies. On September 28, 2015, the Inspection Panel—the independent accountability mechanism for people and communities who believe that they have been, or are likely to be, adversely affected by a World Bank-funded project—registered a request for inspection regarding the TSDP. The request concerned complaints from the Bigodi and Nyabubale-Nkingo communities, located along the Kamwenge to Fort Portal road. The World Bank Management reviewed the request and concluded that the World Bank and the GoU failed to take sufficient measures to mitigate the identified risks and to take action in a timely manner after serious issues were brought to their attention. After further review and after the GoU and the Government contractor failed to take corrective steps, the World Bank management informed the World Bank Board that it was cancelling the project, effective December 21, 2015. The World Bank Group President Jim Yong Kim announced the cancellation of funding to the Uganda TSDP because the project was not being carried out in accordance with appropriate and agreed social and environmental standards.

64. At the time of cancellation of funding, substantial progress had been achieved for the planned road upgrading works and capacity-building activities planned for UNRA. The Gulu-Atiak road and Vura-Arua-Oraba road were substantially completed. For the Kamwenge-Fort

69

Portal road, only 30 km of the planned 66 km had been paved with tarmac. The GoU continued with the financing of the Kamwenge-Fort Portal road.

65. The obligation left to the GoU upon cancellation of the funding was enormous, whereby, some of the subcomponents could no longer be completed because of budgetary constraints. The shock of cancellation of funding highly risks the effort the project had made in supporting the sector’s policy and strategy.

7. Challenges, Lessons Learned, and Conclusion

7.1. Challenges

The implementation of the RCDS had reached a critical stage where most of key inputs required for its establishment had been achieved with only training and rollout remaining.

The cancellation of the Credits on account of an unrelated component left the establishment of the RCDS in suspense at a critical stage. A lot of effort had been made toward implementation by both the ministry and all key stakeholders who were left frustrated by the cancellation.

Failure to find alternative funding for completion of the program means that all the prior expenditures could result in sunk costs.

Getting a champion for the BRT project was necessary for the completion and implementation of the BRT system.

Reviewing BRT feasibility and design documents was challenging because of insufficient skills regarding BRT designs at the ministry.

There are different opinions from different stakeholders on choice of mass rapid transport that would reduce congestion in the GKMA (BRT versus light rail).

Preparatory activities such as the transformation of the taxi industry, land acquisition, and sensitization before implementation of BRT are a hindrance to the BRT’s success.

Government processes and approvals to establish MATA have been lengthy and affected the implementation of the BRT system in Kampala.

A long procurement process basing on the PPDA and World Bank procedures delayed progress.

Delays in approving requests for reallocating funds from nonperforming components to reprioritized activities affected completion of vital objectives.

7.2. Lessons Learned

70

Project Appraisals should gather adequate information from previous programs in order to arrive at a realistic, achievable timeline for implementation of major institutional reforms; and

Cancellation of an entire Credit with a multitude of components because of problems with a single subcomponent is unfair. Only the funds for the problematic one should be withdrawn.

There is need for continued capacity building in the field of Public Transport and Planning in the Ministry.

Political support and Top Management support is critical to the success of major public infrastructure projects.

Involvement of stakeholders enriches the outputs and outcomes of infrastructure projects.

MoFPED has to be heavily and actively involved at each and every stage of an infrastructure project, especially at conceptualization, to have agreement and guarantee counterpart funding.

Contracts ought to be drafted carefully to pay attention to such details as taxes in order to minimize conflicts during contract implementation.

Establishing of a fully funded BRT Implementation Unit within the Ministry in the initial stages is key for the success of BRT before actualization of MATA

Additional resources are required to fast track the reforms

Environmental and social plans should always be undertaken and approvals obtained in line with national systems and World Bank Safeguard Policies. Conditions of approval and environmental and social contract clauses should always be implemented on a day-to-day basis to avoid non-compliance with environmental and social safeguards. While acquiring quarry facilities, Abbreviated Resettlement Action Plans should always be prepared and approved to ensure fair compensation of Project Affected Persons.

7.3. Conclusion

66. The Government’s sector policy and medium-term strategy hinge on the promotion of sustainable, efficient, safe, and reliable transport services as the means for providing effective support to increase agriculture and industrial production, trade, tourism, social, and administrative services. This is in line with the Government’s National Development Plan, which is to improve the stock and quality of roads infrastructure, transport, and traffic management. The TSDP provided the framework for fulfilling the Government’s objective. The project was critical in supporting the GoU to roll out the sector reforms into implementation.

71

Annex 6. List of Supporting Documents

Aide Memoires, Project Progress Reports, Implementation Status and Results Reports, Environmental and Social Impact Assessments and Environmental and Social Management Plans

Country Assistance Strategy for the Republic of Uganda for the Period 2011-2015, April 27, 2010, Report 54187-UG.

DFID (U.K. Department for International Development), 2015, Final Report on DFID Trust Fund Utilization in the Transport Sector Development Project

DFID (U.K. Department for International Development). 2009. Review of the Uganda Joint Assistance Strategy - Current and Future Prospects by Alison Evans of the Overseas Development Institute, London and Peter Sentongo of the Centre for Performance Management, Kampala.

Employment (Employment of Children) Regulations, Government of Uganda, April 20, 2012.

Fact Sheet, Uganda Economic Update 6. 2015 (September). First Progress Report on the Implementation of Management’s Action Plan in Response

to the Inspection Panel Investigation Report (INSP/106710-UG) on the Republic of Uganda Transport Sector Development Project- Additional Financing (P121097), March 30, 2017

Financing Agreement for Credit 4679-UG conformed, February 3, 2010. Guidelines for Reviewing World Bank Implementation Completion and Results Reports, a

Manual for Evaluators, last updated August 1, 2014. Implementation Completion Report Guidelines, OPCS, August 2006, last updated July

22, 2014. Inspection Panel Investigation Report: Transport Sector Development Project -

Additional Financing, August 4, 2016; and Management Response. Inspection Panel Process Guidance Note, October 2014. Inspection Panel: Request for Inspection - Notice of Registration, September 28, 2015. Letter of Development Policy for the Transport Sector (Uganda), October 8, 2009. Management Response to Request for Inspection Panel Review of the Uganda Transport

Development Project - Additional Financing, December 17, 2015. Managing the Risks of Adverse Impacts on Communities from Temporary Project

Induced Labor Influx, 2016, Environmental and Social Safeguards Advisory Team, Operations Policy and Country Services, Washington DC

Mclean, L, and P. Bukuluki. 2016. Uganda Gender-Based Violence Diagnostic. Washington, DC: World Bank.

Mid-term Review, Mission Report, April 22–May 10, 2013. Ministry of Works and Transport. 2015. Annual Sector Performance Report Financial

Year 2014/15, Government of Uganda Progress Report on Country Assistance Strategy. Resettlement Action Plan, January 2011, AWE Engineers, Kampala, Uganda. The Independent. 2016. How Uganda Ranks in Drink Driving, Fatal Accidents and

Helmet Use. All Africa Global Media (March). Transport Case Study, Republic of Uganda, April 2012, Independent Evaluation Group. Transport Paper TP-21, Monitoring Road Works Contracts and Unit Costs for Enhanced

Governance in Sub-Saharan Africa, Alexeeva V. et al, September 2008.

72

Uganda Bureau of Statistics. 2016. Census 2014 Final Results. Uganda National Road Agency. 2012. Preparation of Third Phase of Road Sector

Development Program. Kagga and Mott Macdonald. Uganda Police. 2013. Annual Crime and Traffic Road Safety Report, Kampala. Uganda Road Fund. Road Maintenance Monitoring Report, Q1 FY2015/16, November

2015. Uganda Sexual and Gender-based Violence Diagnostic. 2016. Washington, DC: World

Bank. Uganda Transport Sector Development Project, Environmental Assessment, E1879, July

2009. Uganda Transport Sector Development Project, Resettlement Action Plan, RP665, July

2009. United Nations Refugee Agency. 2005. Uganda Hosts Record 500,000 Refugees and

Asylum Seekers. (accessed September 7, 2016), www.unhcr.org . World Bank. 2010. Rural Road Investment Efficiency: Lessons from Burkina Faso,

Cameroon and Uganda, Report 53646. World Bank Bridges Across Borders--Unleashing Uganda’s Regional Trade Potential.

Uganda Economic Update 1. 2013 (February). World Bank Northeastern Road Corridor Asset Management Project, Project Appraisal

Document, Report PAD 707, Washington, DC: World Bank. 2014 World Bank Uganda Overview, Country at a Glance (accessed October 14, 2016). http://www.worldbank.org/en/country/uganda. World Bank, 2016, Lessons learned and Agenda for Action from the Uganda TSDP World Bank, 2011, Transport Sector Development Project, Project Paper on a Proposed

Additional Credit, Report 59825, Washington DC World Bank, 2009, Transport Sector Development Project, Project Appraisal Document,

Report 50977-UG, Washington DC World Health Organization. 2015. Road Safety Report, Geneva.

http://www.worldbank.org/en/country/uganda

http://www.unhcr.org/

73

MAP