Document of The World Bank Report No: ICR2141 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-73840) ON A LOAN IN THE AMOUNT OF EURO 150 MILLION (US$ 180.20 MILLION EQUIVALENT) TO THE REPUBLIC OF POLAND FOR A ROAD MAINTENANCE AND REHABILITATION III PROJECT March 7, 2012 Sustainable Development Department Central Europe and the Baltic Countries Unit Europe and Central Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2011) Currency Unit = Zloty (PLN) Zloty 1.00 = US$0.29 Zloty 1.00 = EUR0.22 FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS BTO Back to Office Report MIS Management Information System CPS Country Partnership Strategy MIS- Management Information System- ERP Enterprise Resource Planning EIB European Investment Bank MIS- Management Information System WAN Wide Area Network ERP Enterprise Resource Planning MoI Ministry of Infrastructure EU European Union MoF Ministry of Finance GDDKiA General Directorate for National NRSC National Road Safety Council Roads and Motorways GDP Gross Domestic Product PAD Project Appraisal Document HDM-4 Highway Development Model PDO Project Development Objective Version 4 IBRD International Bank for PIU Project Implementation Unit Reconstruction and Development ICR Implementation Completion and PLN Polish Zloty Results Report IFI International Financial Institutions PMMR Performance-based Management and Maintenance of Roads ISR Implementation Status Report QER Quality Enhancement Review ITS Intelligent Transport System RM Road Maintenance and Rehabilitation &R3 Project MAP Modernization Action Plan TA Technical Assistance M&E Monitoring and Evaluation ToR Terms of Reference Vice President: Philippe H. Le Houerou Country Director: Peter C. Harrold Sector Manager: Henry Kerali Project Team Leader: Radoslaw Czapski ICR Team Leader: Elizabeth Wang COUNTRY POLAND ROAD MAINTENANCE AND REHABILITATION PROJECT III CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Profile 1. Project Context, Development Objectives and Design ................................................... 1 2. Key Factors Affecting Implementation and Outcomes ................................................... 4 3. Assessment of Outcomes .............................................................................................. 10 4. Assessment of Risk to Development Outcome ............................................................. 16 5. Assessment of Bank and Borrower Performance.......................................................... 17 6. Lessons Learned ............................................................................................................ 19 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ............... 20 Annex 1. Project Costs and Financing .............................................................................. 22 Annex 2. Outputs by Component ...................................................................................... 23 Annex 3. Economic and Financial Analysis ..................................................................... 25 Annex 4. Bank Lending and Implementation Support/Supervision Processes ................. 28 Annex 5. Beneficiary Survey Results ............................................................................... 30 Annex 6. Stakeholder Workshop Report and Results ....................................................... 31 Annex 7. Borrower's ICR ................................................................................................. 32 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders .......................... 46 Annex 9. List of Supporting Documents........................................................................... 47 Annex 10. Summary of Consultant‘s Recommendation in May 2005 ............................. 48 MAP IBRD NO. 34634 ..................................................................................................... 49 A. Basic Information ROAD Country: Poland Project Name: MAINTENANCE & REHAB 3 Project ID: P096214 L/C/TF Number(s): IBRD-73840 ICR Date: 03/02/2012 ICR Type: Core ICR Lending Instrument: SIL Borrower: Original Total USD 180.20M Disbursed Amount: USD 194.45M1 Commitment: Revised Amount: USD 180.20M Environmental Category: F Implementing Agencies: Cofinanciers and Other External Partners: European Investment Bank General Directorate for National Roads and Motorways (GDDKiA) Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 01/17/2006 Effectiveness: 07/05/2006 07/05/2006 Appraisal: 03/08/2006 Restructuring(s): 08/15/2011 Approval: 06/06/2006 Mid-term Review: 12/02/2010 12/02/2010 Closing: 09/15/2011 09/15/2011 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Satisfactory Implementing Quality of Supervision: Moderately Satisfactory Moderately Satisfactory Agency/Agencies: 1 Based on data of February 1, 2012. The loan was denominated in EUR. Due to exchange rates changes, the dollar value of the loan at Project close exceeded the appraised amount. i Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 7 7 Roads and highways 93 93 Theme Code (as % of total Bank financing) Administrative and civil service reform 25 40 Infrastructure services for private sector development 50 20 Injuries and non-communicable diseases 25 40 E. Bank Staff Positions At ICR At Approval Vice President: Philippe H. Le Houerou Shigeo Katsu Country Director: Peter C. Harrold Daniela Gressani Sector Manager: Henry G. R. Kerali Motoo Konishi Project Team Leader: Radoslaw Czapski Anca Cristina Dumitrescu ICR Team Leader: Elizabeth C. Wang ICR Primary Author: Elizabeth C. Wang F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The Project Development Objective (PDO) was to improve the effectiveness of Poland's national road rehabilitation and maintenance systems, with an emphasis on quality, efficiency, financial viability, safety, and road-user satisfaction. ii Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Indicator 1 : Percentage of roads in good condition Value quantitative or 49% 60% 59.1% Qualitative) Date achieved 12/31/2005 12/31/2010 12/31/2010 Comments Data as per 31 Dec, 2010; data for 2011 would not be available until early 2012; (incl. % percentage of length of national roads in good condition in relation to total length achievement) of national roads in Poland. Indicator 2 : Length of network designed for 11.5 tons/axle load (km) Value quantitative or 2,191 km 3,300 km 5,897 km Qualitative) Date achieved 12/31/2005 12/31/2010 12/31/2010 Comments (incl. % Data as of 31 Dec 2010. achievement) Indicator 3 : Perceptions of Road Users, based on Road user satisfaction survey Road user survey Survey shows completed in Value improved August 2011, First road users surveys quantitative or satisfaction rating shows increased undertaken by GDDKiA Qualitative) over previous satisfaction of road survey users over the previous one. Date achieved 12/31/2005 12/31/2010 08/31/2011 Comments The perception that the quality of roads is bad or very bad declined by almost (incl. % 50%. In 2005, only 2.5 – 3.0% of the surveyed road users rated the roads to be achievement) rather good or good and in 2011, the percentage increased to 30 – 35%. Indicator 4 : Road safety improvement (number of fatalities/year) Value quantitative or 5,444 <4700 3,907 Qualitative) Date achieved 12/31/2005 12/31/2010 12/31/2010 Comments (incl. % Data as of 31 Dec 2010; improved upon the target by 17%. achievement) Indicator 5 : Road safety improvement (road fatalities/10,000 vehicles) Value quantitative or 3.2 <2.55 1.77 Qualitative) iii Date achieved 12/31/2005 12/31/2010 12/31/2010 Comments Data as per 31 Dec 2010; improved upon the target by 31%. Assuming that the (incl. % number of registered cars is 22 million, based on the data as of 2009. achievement) Indicator 6 : GDDKiA Modernization Action Plan (MAP) Value MAP satisfactory in Implementation Implementation quantitative or progress completed partly completed Qualitative) Date achieved 12/31/2005 12/31/2007 08/31/2011 Comments (incl. % Indicator not defined. See discussion in Section 3.2 of the main text. achievement) Indicator 7 : Effective use of HDM-4 System by GDDKiA Value Yes, without external Yes, (based on No (based on quantitative or advice (old database) refined database) refined database) Qualitative) Date achieved 12/31/2005 12/31/2010 09/30/2011 Comments Operational use of HDM-4 for planning maintenance is limited as economic (incl. % evaluation is not required for maintenance and rehabilitation. HDM-4 is used for achievement) major investments, e.g. new construction or improvements. (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years At least 130 of the 181 contracts for Rehabilitation and Maintenance completed Indicator 1 : in 2006 Value 165 or actual 218 contracts (quantitative None number of implemented or Qualitative) contracts Date achieved 12/31/2005 12/31/2006 08/03/2011 Comments Reallocation of funding and project savings allowed for additional civil work (incl. % contracts to be implemented. achievement) At least one PMMR pilot contract prepared and launched, and an evaluation of Indicator 2 : the pilot contract carried out Value (quantitative None Evaluated Cancelled or Qualitative) Date achieved 12/03/2005 12/31/2010 09/26/2008 The Government requested that PMMR pilot be cancelled because of Comments dissatisfaction with the quality of the consultant report and the impossibility of (incl. % starting the implementation of the pilot within the time frame of the project. achievement) Indicator 3 : GDDKiA Management Information System implemented and operational by the iv end of 2007 Value Implemented and Implementation (quantitative Not yet implemented operational partly completed or Qualitative) Date achieved 12/31/2005 12/31/2007 08/31/2011 Main IT contract fully implemented in GDDKiA HQ and in 1 regional branch. Comments Rollout in remaining 15 branches planned under the original contract delayed but (incl. % expected in 2012. Some subprojects cancelled or postponed. Expected to be achievement) implemented by the GDDKiA. Indicator 4 : Campaign completed by 2008 Value Three major Campaign (quantitative None campaigns completed or Qualitative) completed Date achieved 12/31/2005 12/31/2008 08/31/2011 Near the end of the project, three large road safety campaigns were completed. Comments The topics of the campaign were: (i) driving vehicles under alcoholic influence, (incl. % (ii) driving vehicles at unreasonable speed, and (iii) usage of seatbelts and child achievement) restraint. Studies on Intelligent Transport Systems and the establishment of consolidated Indicator 5 : Polish Road Standards completed Value Studies partly (quantitative Studies not started Studies completed completed or Qualitative) Date achieved 12/31/2005 12/31/2009 08/31/2011 Comments The first phase on ITS was completed and the second phase was dropped. Study (incl. % on standards was cancelled. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 07/26/2006 Satisfactory Satisfactory 0.00 2 01/08/2007 Satisfactory Satisfactory 151.77 3 02/06/2008 Satisfactory Satisfactory 152.03 4 08/27/2008 Satisfactory Satisfactory 153.84 5 04/29/2009 Satisfactory Satisfactory 179.77 6 11/06/2009 Satisfactory Moderately Satisfactory 179.77 7 03/22/2010 Moderately Satisfactory Moderately Satisfactory 186.66 8 12/18/2010 Moderately Satisfactory Moderately Satisfactory 186.66 9 08/21/2011 Moderately Satisfactory Moderately Satisfactory 190.89 10 09/13/2011 Moderately Satisfactory Moderately Satisfactory 195.10 v H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions Level 2 Restructuring approved on August 15, 2011, minor 08/15/2011 N MS MS 190.89 reallocation of funds prior to Project closing for institutional strengthening of the GDDKiA. I. Disbursement Profile vi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal The Third Road Maintenance and Rehabilitation Project (RM&R3) was the continuation of the Bank‘s support for the Polish government‘s five-year (2002-2006) program for the development of the national road network. The Polish road network‘s quality was poor; this was an important factor hampering economic development. Many Polish roads were constructed during the Central Planning era, when traffic volumes were much lower and axle loads lighter. Due to economic growth, the demand for road transport had grown dramatically. However, the quality of infrastructure had not kept pace with the growing demand for road transport. There were substantial economic costs associated with the deteriorated road network. It was estimated that Polish consumers spent the equivalent of about 16% of GDP on vehicle operating costs (vehicles, fuel, wages etc.), and that road accidents cost society an additional 2% of GDP in physical damage, medical costs and lost productivity.2 The Government received substantial revenues related to road transport. In 2005, road revenues reached PLN20.4 billion (approx US$6.2 billion), of which PLN18.6 billion (approx US$5.6 billion) was from excise duties on fuels. However, only a relatively small portion of the revenues accrued to the national roads budget: about 12% in 2005.3 The Bank supported the Government‘s program through: (i) the Road Maintenance and Rehabilitation Project (RM&R1, 2004); and (ii) the Second Road Maintenance and Rehabilitation Project (RM&R2, 2005). During this period, EIB was also active in financing the improvement of Polish roads, separately and in parallel with the World Bank. For RM&R3, the EIB‘s parallel financing amounted EUR 138 million. These efforts led to a significant improvement in the national road network, increasing the percentage of road sections classified as ―good‖ from less than 37% in 2003 to about 50% by the end of 2005. At the time of appraisal, the overall quality and safety of the Polish road network was still far below the standards expected of an EU member state. RM&R3 was the third and last in a series of three loans aimed at co-financing the Government‘s overall program in the road sector. The Bank had a long history of supporting the Polish road sector. Before the RM&R Program, the Bank had supported the sector with a transport loan with a road component and two roads loans—for a total of US$455 million. These loans supported: (i) transport sector restructuring and management reform; (ii) construction of bypasses; (iii) road safety improvement; (iv) road accident black spot eliminations; (v) road rehabilitation-modernization; and (vi) maintenance. The RM&R Program focused on road maintenance and rehabilitation so as to be complementary to the EU support for new investments. The EIB and the Bank co-financed the RM&R Program. The Project was a Sector-wide Approach (SWAp) operation that was financed through a Sector Investment Loan (SIL).4 The Bank co-financed a slice of the General Directorate for National Roads and 2 As cited in the RM&R 3 PAD Annex 1, Section A. 3 Currently about 18% of the excise tax is returned to land transport, which includes the railways and roads. The apportionment of this 18% between rail and roads is done at the discretion of the Minister of Infrastructure. The national roads network is mainly funded through: (i) the State budget, from fuel excise revenues; and (ii) the National Road Fund, which collects a fuel surcharge. The State budget finances the rehabilitation, maintenance and management of the roads network; the National Road Fund covers the bulk of the costs for new investments. 4 Under a SWAp, the Project funds for the Road Maintenance and Rehabilitation component were pooled with those from the national budget, and the other components were implemented using World Bank standard procedures. This SWAp was a hybrid. The civil works financing relied on Government systems, so that the Borrower was not required to create special implementation units or adopt rules and procedures solely for Bank-supported investments. Its objective was quick disbursement with minimal transaction costs to the Borrower—and it had partially pooled funds. 1 Motorways‘ (GDDKiA)5 road maintenance and rehabilitation expenditures for the year. The Project also continued the road sector reform efforts initiated in the RM&R1 that had strong ownership at the senior government level. In terms of dollar amounts, funding for civil works was the bulk of the Project activities. 6 The remaining funds were allocated for technical assistance components for various institution strengthening efforts, such as road safety and the GDDKiA modernization action plan. The civil works activities relied on country systems for environmental and social safeguards and for procurement. The other tasks were implemented using World Bank standard arrangements. The 2005-2007 Country Partnership Strategy (CPS) for Poland aimed to align the World Bank‘s Program with Poland‘s development agenda as a new EU member state. It focused on areas that involved: (i) significant policy or structural issues; (ii) opportunities for the Bank to provide added value; and (iii) opportunities for effective partnership with the EU, the EIB, etc. The RM&R program met these criteria for the following reasons: (i) the road sector was recognized as an important bottleneck to growth; (ii) the Bank had the technical and comparative advantage given its history in the sector; and (iii) the Program was co-financed by the EIB and the Bank. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The Project‘s objective was to improve the effectiveness of Poland‘s national road rehabilitation and maintenance systems, with an emphasis on quality, efficiency, financial viability, safety, and road-user satisfaction.7 Achievement of the PDO was to be confirmed by using the following key indicators:8 Outcome Indicators Percentage of roads in good condition9 Length of network designed for 11.5 tons/axle load (km) Perceptions of Road Users, based on Road User Satisfaction Survey Road safety improvement (number of fatalities/year) Road safety improvement (road fatalities/10,000 vehicles) GDDKiA Modernization Action Plan (MAP) Effective use of the HDM-4 System by the GDDKiA 10 5 The GDDKiA a Central Government agency that was created in 2002, and is responsible for national road management. It is supervised by the Ministry of Infrastructure. The GDDKiA was the main recipient of the financing from the RM&R Program. 6 Component 1 is Road Maintenance and Rehabilitation. RM&R1—93%; RM&R2—96 % and RM&R3—93% . 7 PDO wording from the PAD. In the loan agreement, the word ―safety‖ was omitted. The wording of the PDO is taken from the PAD because it embodies what the Project intended to achieve which included improving road safety in Poland. 8 The exact wordings of the indicators are from table 3 of the main text of the PAD and the Supplemental letter No.2. There are slight discrepancies between these wordings and Annex 3 of the PAD representing the results framework and monitoring but the intents are the same. 9 This refers to the national roads as these roads are under GDDKiA management. 10 The Highway Development and Management Model (HDM-4) is a tool used: (i) to perform the economic evaluation of road works; (ii) to prioritize a program of road works according to economic criteria; and (iii) to evaluate an entire road network for planning purposes in order to determine the maintenance, rehabilitation and improvement needs of the network and the consequences of budget constraints. In Annex 3 of the PAD, this indicator was stated as ―the HDM-4 system used by the GDDKiA as a planning and analytical tool‖. 2 1.3 Revised PDO (as approved by the original approving authority) and Key Indicators, and reasons/justification The Project underwent a level 1 restructuring in August 2011, that did not result in the revision of the PDO or Key Indicators. 1.4 Main Beneficiaries The primary beneficiaries of the Project activities were the road-users; they were expected to benefit from the improved overall quality of the national road network—including aspects of traffic safety. More than 90% of the loan proceeds were spent towards this objective. The secondary beneficiaries of the Project were the GDDKiA and the successor to the Ministry of Transport and Communication (MoTC). They benefited from the upgrade of the management information system and technical assistance in formulating strategies. 1.5 Original Components The Project loan amounted to €150 million—equivalent to US$180.0 million11—and was expected to fund the following four components: Component 1: Road Maintenance and Rehabilitation Program (€139 million) ï‚· Subcomponent 1.1 (€118 million) was expected to follow the same procedures for RM&R1 and RM&R2—the Bank‘s funds were to be pooled with an EIB loan, and to finance a percentage of the national budget allocated to periodic road maintenance and rehabilitation. ï‚· Subcomponent 1.2 (€20 million) was expected to support at least one pilot contract for Performance-based Management and Maintenance of Roads (PMMR). ï‚· Subcomponent 1.3 (€0.9 million) was to be a public awareness campaign based on the communication strategy developed by the GDDKiA in 2005. Component 1 was linked to outcome indicators for road condition, road weight bearing capacity and road- user satisfaction. Component 2: The GDDKiA’s Management Information System (€2.5 million) The design of the management information system (MIS) and the initial phase of its implementation were financed under the RM&R2 Project. This Component was expected to complete the system through two packages including Wide Area Network (WAN) services and a security system. Component 2 was linked to the implementation of the GDDKiA‘s Modernization Action Plan (MAP). Component 3: Road Safety (€5.5 million). This Component was expected to finance road safety campaigns, consultants‘ services to the Secretariat of the NRSC, and training. Component 3 was linked to road safety indicators. Component 4: Technical Assistance to the Ministry of Transport and Communication—which was succeeded by the Ministry of Infrastructure (€3.0 million). This Component was expected to support: (i) an Intelligent Transport System; (ii) TA for the absorption of EU funds; (iii) assistance for improving road technical standards and traffic management; and (iv) an audit. 11 Because of exchange rate fluctuation, the US dollar amount disbursed is higher than the US$180 million approved. See Annex 1 for detail. 3 Components 1 and 2 were to be implemented by the GDDKiA, Component 3 by the National Road Safety Council (NRSC)—which is a part of the MoI, and Component 4 by the MoI directly. 1.6 Revised Components The original project components were not revised. 1.7 Other Significant Changes The Project Components were not revised, although there were reallocations of funding. The most significant was the re-direction of funding within Component 1. Subcomponent 1.2 for PMMR was dropped because of implementation delays; and €18.3 million was allocated to Subcomponent 1.1 to support the GDDKiA maintenance budget for 2008. Because this was a reallocation within the same component, a restructuring was not required. Due to Project savings, additional civil works were completed in 2011 under Subcomponent 1.1. On August 15, 2011, a level 2 restructuring was authorized by the Country Director. This was done to shift minor amounts between the components in order to maximize the utilization of funds prior to the Project Closing. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry RM&R3 was the third Project of a programmatic lending series. The PDO and indicators for RM&R3 were different from those of RM&R1 and RM&R2.12 The PDO and the outcome indicators for this loan were more precise and realistic, reflecting lessons learned. The linkage between the Project activities and the indicators could have been stronger. Because RM&R3 was a repeater Project, the review by management during Project preparation was abbreviated. The Project Concept Review was a virtual meeting, and the Quality Enhancement Review (QER) was waived. In retrospect, if Bank management had taken a hard look during the Project preparation, it might have improved the Project design by allowing more time to design the technical assistance activities and additional implementation support for institutional reform. The Team prepared RM&R3 with caution. Soon after the start of RM&R1 implementation, there were red flags indicating that the GDDKiA reform component would encounter difficulties. The MoI‘s strong commitment to road sector reform was the basis for the Bank‘s support for the lending program. For RM&R1, the MoI had put forward an ambitious MAP that the Bank subsequently realized did not reflect the GDDKiA‘s view. In an early 2004 Back to Office Report (BTO),13 it was recorded that the GDDKiA rejected the MoI MAP approach and prepared a one-page MAP of its own. The Bank explained that the GDDKiA‘s proposals were not acceptable. The Development Objective for RM&R1 was rated as ‗marginally satisfactory‘ when RM&R3 was under preparation. The Bank Team‘s analysis of sector issues was on the mark. The sector analysis with some updates still bears relevance to the current situation. RM&R3 incorporated the lessons learned from the two prior projects: the civil work activities were identical, the institutional development component was pared down, and there were modest extensions of activities already initiated (such the MIS investments). The Team did what it could to mitigate the implementation risks for institutional strengthening in the RM&R3 12 The PDOs for RM&R 1 and 2 were “to improve the effectiveness of Poland’s national road rehabilitation and maintenance systems by: (i) significantly increasing the percentage of national roads in good condition; (ii) establishing reliable and stable funding for the national road maintenance and rehabilitation network, and for road safety; and (iii) improving the capacity within the GDDKiA to operate efficiently and effectively and to reflect the views of road-users in developing its programsâ€?. The indicators were different. 13 Ian Heggie, Februrary 2004. 4 Project design. The Project implementation period for RM&R3 was five years; by comparison, the implementation period initially for RM&R1 was two years, and for RM&R2 it was two and a half years.14 The Conditions for appraisal were as follows: (i) the GDDKiA would initiate the core processes of the MAP, including the selection of consultants for the preparation of Performance-based Management and Maintenance of Roads (PMMR); and (ii) the consultants for HDM-4 improvement support would need to be hired. The question concerning the quality of the Project at entry was whether the design adequately addressed the issue of financial viability. Establishing a reliable and stable funding for road maintenance and rehabilitation and traffic safety activities was one of the objectives of the lending program - and this was explicitly stated in the PDOs of RM&R1 and RM&R2. RM&R3‘s answer to financial viability was to improve the efficiency of expenditures by providing technical assistance for the HDM-4 to be used as a planning and analytical tool, and to promote medium-term performance-based maintenance contracts. These were partial technical answers, but not a policy solution. The Bank Team was aware of the financing issues related to the road sector. One of the foremost authorities on road funds was a member of the Bank Team who had participated in several missions. However, the issue of financial viability was ultimately not addressed in the Project design. However, at the time of preparation, Poland was expected to have the resources for adequate road maintenance and rehabilitation. Public expenditures on the national road network were to grow from US$2 billion in 2005, to US$6 billion per year from 2006-2010 - with the bulk of the funding coming from the EU. What was not expected was that the co-financing requirement for accessing EU funds would tap much of the Government‘s financial resources for the road sector.15 The severity and length of the financial crisis that has impacted the Government‘s finances was also a surprise. Because of the financial crisis, the funding for maintenance was reduced in 2010 and 2011, and projected to be at the reduced level over the next few years. The Bank Team had reasons to believe in 2006 that financial viability had been addressed. During 2004- 2005, the Government established a Road Fund. The Road Fund was principally for new road constructions; however, the Road Fund had the flexibility to allocate some resources to other road-related activities. There was an expectation that the Road Fund would finance some maintenance works.16 For road safety, it was reported that ―the NRSC Secretariat is confident that the amended Road Fund Law will make road safety an eligible expenditure that can be financed through the Road Fund, and it is hoped that up to 2 percent of the Road Fund will in the future be set aside for road safety.‖17 For the reasons stated above, financial viability was not considered a major risk at preparation. In 2009, the Road Fund was restructured. In return for assuming the Road Fund‘s debt, the Ministry of Finance (MoF) legally restricted the Road Fund to financing only capital investments. With hindsight, the Bank should have required that the Road Fund earmark a certain percentage of funding for road maintenance and road safety. In sum, the Project activities were mainly to fund road maintenance and rehabilitation, as well as road safety and building capacity of the GDDKiA. However, the PDO aspired to broader sector reform which was not reflected in the other project components. The civil works - 92% of the loan - followed closely 14 The closing date of RMMR1 and RM&M2 was later extended by 1 1/2 years. 15 Besides the co-financing percentage, some of the investment expenses are ineligible for EU funding so often over 30 percentage of the project cost has to come from state budget. 16 Ian Heggie: ―The fund will basically concentrate on financing on-going projects…. And some maintenance (maybe in the proportions of 90:10 respectively…In the next year (2005), it is expected that the fund will re-orient its financing towards the new EU projects…., while in year 3 (2006) it will probably expand its contribution to maintenance and rehabilitation (perhaps with a balance of 50:50 respectively).‖ Ian Heggie BTO, February 2004. 17 Preparation mission - December 2005. A workshop took place in 2006 to support efforts to identify sustainable ways of financing road safety. International resource persons made presentations on experience in other countries in relation to financing road safety through road funds, insurance surcharges, and business sponsorship. 5 the successful model developed for RM&R1 and RM&R2. It was a repeater Project - the PAD documentations were well–prepared, indicating effort and understanding of the issues. The final PMMR design was a scaled down version of the proposed design during project preparation. The implementation of the MIS was modest,18 and was mainly a continuation of previous efforts. Road safety and technical assistance to the MoI were low risk activities. Financial viability was identified as an issue but not addressed. 2.2 Implementation For the most part, the implementation of the civil works component of the Project was on schedule, within budget, and efficient. The implementation of the other activities experienced delays - and some were canceled altogether. A factor that contributed to implementation hurdles was the change in Governments, and the resulting changes to the Ministry responsible for the GDDKiA. At the Project start, the responsible ministry was the Ministry of Transport and Communication, which was subsequently replaced by the MoI - which reverted back to a Ministry of Transport. At the Project close, the responsible ministry was again the MoI. The officials at the Ministries that oversaw the RM&R program stayed at their positions - however, the frequent reorganizations and changes at the political level resulted in changes in policy directions that impacted implementation. There were also frequent changes of top management at the GDDKiA. Project Component Part 1.1: Road Maintenance and Rehabilitation The road works were implemented rapidly and well. The Project was approved in June 2006. By the end of September of the same year, 63% of the total volume of works was completed; by March 2007, 79% of the total loan was disbursed and over 810 km of roads were rehabilitated.19 A technical audit completed in May 2007 concluded that the inspected rehabilitation works were of good quality and were well- managed and that the technologies were adapted to specific traffic conditions to maximize the use of available funds. Due to a reallocation of funds, more road works were completed than had been originally planned. At the Project closing, road works had been implemented on 218 contracts with a total length of 1,103km - which means that 6% of the national road network was repaired with cofinancing through RM&R3 (see Annex 3 for details). In terms of financing, this was the most significant activity of the Project. The implementation was successful, because: (i) it followed the same basic design as the previous two Projects; (ii) the GDDKiA had the technical capability for implementation; and (iii) the activity met an urgent need. The Project design used country systems, which also resulted in efficiencies in procurement and rapid realization of large rehabilitation programs and quick visible results. Project Component Part 1.2: PMMR Pilot PMMR was an important new dimension in the RM&R3. It was hoped that—in addition to being a part of the MAP—wide spread application of PMMR would further financial viability for road maintenance. The preparation of the PMMR was covered under RM&R2, and the implementation of the PMMR pilot was a subcomponent of RM&R3.20 The PMMR initiative experienced delays from the very beginning of the Project: the contract for the preparatory studies was awarded only in March 2007, because there was a serious lack of understanding between the consultant and the GDDKiA about the purpose of the studies. 18 For RM&R3, the MIS components were Wide Area Network and Security. MIS-ERP was originally included in RM&R2 and was carried over to RM&R3. 19 The majority of road works were executed in 2005/2006 (92% of total costs implemented on 162 contracts), and the remainder in 2008 (6%) and 2011 (2%). 20 In fact, during Project preparation, it was anticipated that there would be at least two PMMR pilots to cover different types of roads—totaling between 400 and 700 km. The PMMR sub-component in the final design was scaled-down to at least one pilot. 6 In 2008, the MoI decided to cancel the PMMR pilot subcomponent. The funding that had been intended for PMMR was used for civil works. The reason for the failure of the PMMR pilot was that - although the concept was very much supported by the MoI and by top GDDKiA management - strong resistance came at implementation from GDDKiA operating staff. Deficiencies in the quality of the consultant and frequent changes of top GDDKiA management during the 2006-2008 time period also contributed to this failure. In early 2011, the GDDKiA did procure a 4-year maintenance contract - termed ‗Sustained Standards‘ contract - for 84 km of newly constructed section of the S3 expressway. This was in essence a performance-based medium- term contract. The plan was for all newly constructed highways and upgraded roads to be maintained under ―Sustained Standards‖ contracts. At that time, the GDDKiA also began to outsource all of its rehabilitation activities - because it was found that the cost for in-house rehabilitation was about 80 PLN per 1 sq.m (approx. US$24), whereas a private contractor could achieve the same result with about 30 PLN (approx. US$9). Some routine maintenance work has also been outsourced. In short, the PMMR concept was introduced before the working level at the GDDKiA was ready for a new way of managing its road assets and institutional change takes time. The effort by the Bank to introduce outsourcing and a performance based maintenance approach has yielded results but the Bank‘s estimation of progress was overly optimistic. Project Component Part 1.3: Public Awareness Campaign The implementation of this subcomponent was successfully completed with website design, PR/communication strategies, media awareness, and training and media campaigns. Some of the media campaigns dealt with traffic safety issues. This subcomponent was successful because the RM&R program funded the activity with a consultant who eventually joined the GDDKiA‘s management. The individual was an external hire and was open to new ways. He built up the communication department at the GDDKiA. Project Component Part 2: Implementation of MIS Wide Area Network and MIS Security A specific risk identified under RM&R1 was that the GDDKiA lacked a modern MIS within the organization that could integrate financial accounting information with the contract data, including planning and physical measures. Therefore the MAP included the design of a modern MIS. The GDDKiA approved the Strategy for a Comprehensive Information Technology System in 2004. RM&R2 supported the implementation of the MIS component, which was expected to be completed in about one and one- half years. The MIS component included an Enterprise Resource Planning (ERP), whose development and implementation RM&R3 eventually took over. RM&R3 also funded MIS-Wide Area Network, MIS- Security, and a new IT Strategy. The implementation of the MIS was partially successful - but much delayed from what was planned. The implementation of the Wide Area Network and Security proceeded smoothly, once the GDDKiA had new management in place in 2009. The IT department was established and staff with the necessary technical capability was hired. However due to its novelty and complexity, the ERP encountered a significant amount of implementation problems. For example, since procurement process of the ERP modules involved a strategic decision on the choice technical solution and consequently the vendor, much time was spent reaching an agreement between the Bank and GDDKiA on this; changes in GDDKiA management also contributed to some delays as they resulted in different ideas related to project implementation being put forward. Eventually, the human resources management, accounting and financial management ERP modules were implemented in GDDKiA headquarters - but the Project planning and management module was dropped, because the consultant‘s output did not meet the GDDKiA‘s requirement. At the time of the Project close, the above modules had not been rolled out to 7 the branches - but the implementation of ERP-SAP is now irreversible, so a complete roll out is expected within the next 18 months.21 The reasons for the mixed results were many: an unrealistic time schedule, Bank IT procurement rules that did not reflect market realities – the new IT System requires changing people‘s work habits and was never going to be easy to implement - and only when there is a stable management at the GDDKiA can attention be devoted and progress made. The IT System implementation is now the responsibility of a recently-hired individual who reports directly to the GDDKiA chairman. The GDDKiA is making a tremendous effort to upgrade its MIS, which is expected to continue. Project Component Part 3: Road Safety The Road Safety component was implemented by the NRSC, and had a slow start because of personnel changes. This component continued the Bank‘s support for road safety that started before the RM&R program. Improving road safety was one of the success stories of the Bank‘s involvement in the road sector. (Please refer to Section 3.2). RM&R3 was able to build on the commitment and institutional framework for road safety that was established previously. The minor hiccups due to personnel changes were easily overcome, because the foundation work had been laid. Project Component Part 4: Technical Assistance to the MoTC (now MoI) This was a small component that provided technical assistance to the MoI in areas requested. The Intelligent Transport System (ITS) study was dropped after the first phase, because the consultant‘s output did not meet the GDDKiA‘s requirement, and because the objectives for the study were overly ambitious (all activities were in one terms of reference). The terms of reference for ITS study were also poorly designed. The outcome might have been different if there had been a small initial study to build up understanding of the issue. Just prior to the Project close, this component funded studies on strategic environment assessments for road and transport development, and on the development of an investment program for inland waterways. The beneficiaries provided positive feedback on these studies. The reason for the failed ITS study was that it was a new technical area. The MoI could have had better results if the study had been phased, and if the Ministry staff had attended relevant seminars to build up the knowledge base. One issue pertaining not just to this component but also other non-civil works activities was that while the bulk of the Project (the civil works component) used country systems, the remainder of the activities relied on Bank procedures. The PIU had a staff in the earlier years who was familiar with Bank procedures. Upon this individual‘s departure, the position was not filled due to lack of funding. The MoI staff (and other beneficiaries) who implemented the individual TAs were required to learn the Bank procurement procedures (this being their one and only experience with Bank procurement process). The ITS study might have had better results if there had been better procurement support by the Bank in providing solutions to selecting consultant services that would have been better phased. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization The indicators were appropriate to measure the PDO on the effectiveness of the road rehabilitation and maintenance: ‗quality‘, ‗efficiency‘, ‗safety‘, and ‗road-user satisfaction‘. ‗Financial viability‘ was in the PDO, but there was no Project component that dealt directly with it, and there was no indicator. The implementation of the MAP was an indicator in all three PM&R Projects, and was a subject of intense discussion throughout the 2004-2006 time period. However, the PM&R3 PAD did not define what constituted implementation of the MAP. From the Project Concept Review minutes and related project 21 For awhile, GDDKiA HQ used a dual system (SAP and the old system). As of April 2011, the usage of the old system ended and only the SAP was used. The SAP was supposed to be rolled out to the 16 branches. However, at the time of the Project closing, the SAP had only been introduced in the Warsaw branch - which still had a dual system. The Warsaw branch is expected to end the usage of the old system by December 2011. The roll out to the other branches should take place in the next 12 months. 8 preparation email exchanges, it is reasonable to conclude that the MAP covered a broader agenda22 than merely the activities financed by the Project - namely, the MIS component. The GDDKiA has a thorough data collecting system that supplied the statistical information on road conditions, axle load and traffic safety needed for the indicators. The data on pavement conditions and traffic safety were used for planning purposes - i.e., criteria for budget allocation of road maintenance and rehabilitation, and for traffic blackspot remediation. GDDKiA expects to continue its data collection efforts and with some technical assistance, these data could used to better inform GDDKiA in its planning and decision making process. Road-user surveys can be a good measure of road-user satisfaction, but comparisons can only be made if the questions are similar. The GDDKiA‘s communication department conducted various surveys annually which feed into their future activities. However, these surveys were not comparable to the 2005 and 2006 baseline surveys - except for the final survey in 2011. The implementation of M&E could have been better. If comparable road user surveys were completed annually, the evolution of road users‘ satisfaction could have informed GDDKiA‘s activities. This indicator was not used as intended. The initial entry of indicators into the Project Portal was erroneous. Therefore the indicators in the ISR did not reflect the indicators in the PAD – so reporting and monitoring of the indicators did not fully reflect Project progress. To be fair, the Project Portal was introduced mid way during project implementation but the supervision team should have detected the errors prior to Project completion. 2.4 Safeguard and Fiduciary Compliance Safeguard Compliance was rated as ‘satisfactory’ The Project was classified as ‗Financial Intermediary‘ for purposes of safeguards,23 because it was an SIL targeting a subprogram within the Government‘s road expenditure program. The Project financed maintenance and minor rehabilitation works - it did not finance any new investment. Safeguards were under country systems. During Project safeguards consultation, it was agreed that the Bank definition of B and C categories subproject conformed with the Polish Maintenance and Improvement Standards 1-9.24 Additional due diligence was carried out during Project preparation. Safeguard compliance was never an issue as informed by supervision field visits, and was rated as ‗satisfactory‘. Fiduciary Compliance was rated as ‘satisfactory’. Annual procurement post reviews confirmed that all procurement activities related to works contracts were implemented using country procurement systems, and were carried out satisfactorily. Financial management was rated as ‗moderately satisfactory‘ in the ISRs, principally because the implementation of the SAP financial system was delayed. This rating mixed the implementation of a Project component with fiduciary compliance. In general, FM/disbursement has been satisfactory - there were clean auditors‘ opinions; the audited reports and FMR/IRFs were generally received on time. Disbursement in USD was 22 ―GDDKiA is carrying out the core MAP processes (institutional restructuring, programming and planning; project management and procurement; new classification of roads, use of HDM-4 in establishing road maintenance priorities) within RM&R2. Introduction and implementation of a management information system (MIS) to support GDDKiA‘s core processes … will be continued in the [PM&R3]‖ Implementation of the PMMR was also a part of the MAP. 23 The rationale for the FI rating was that the operation had a lot of characteristics similar to those financed under such projects—i.e., many small investments that cannot be appraised beforehand, but rather on a case-by-case basis. 24 Standard 9 is the most intensive rehabilitation - including minor road widening to standard width within the existing right-of-way. 9 higher than the originally approved amount, because the loan was denominated in EUR - which appreciated against USD. 2.5 Post-completion Operation/Next Phase RM&R3 was the last in the series of three loans aimed at co-financing the Government‘s annual budget in the road sector. As a part of an on-going policy dialogue, the Bank prepared a Transport Policy Note in 2010. The World Bank assistance to the Polish road sector has graduated from lending to more of an advisory support role. The Government plans to direct its financial resources in a way that maximizes the utilization of the EU grants for the road sector - so the emphasis going forward would be on new investments, especially those qualifying for EU funds. The next phase for Polish road sector development should be to focus on whole life costing, defining cost-efficient maintenance standards, providing road asset management, and providing economic analysis for the maintenance program. This is especially important given the volume of new roads being constructed. The annual monitoring of the condition and traffic of the network should continue. However, before contemplating the next phase, the Government must first adequately fund maintenance. Otherwise, it will not be possible to sustain the results of the PM&R program. In addition, the Bank has supported traffic safety from the very beginning of Bank involvement in the road sector, through a series of projects. Poland has very successfully changed behaviors and attitudes toward traffic safety. There is some EU funding for road safety but, with the closing of RM&R3, there is no longer a significant source of financing for national traffic safety campaigns and related activities. The Government should consider some independent source of funding for traffic safety that is outside of the annual budgetary allocation. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation The Project‘s objective still has relevance to Poland‘s development agenda today. The current CPS (2009-2013) is comprised of four pillars: (i) Social and Spatial Inclusion; (ii) Public Sector Reform; (iii) Growth and Competitiveness; and (iv) Regional and Global Public Goods. This Project fits the pillar for growth and competitiveness. The Progress Report states that ―Poland has continued to make progress towards strengthening the environment for private sector growth, including through enhancing transport infrastructure, one of the key bottlenecks to growth, though important challenges remain. Poland has stepped up its road infrastructure investment program, but as noted in the Bank’s Transport Policy Note, it will be important to ensure continued financial sustainability in the road sector.â€? The Project design reflected a proper diagnosis of Poland‘s development priority. Given Poland‘s current level of overall development, the relatively poor quality of the road network remains an important factor hampering economic growth. The financial sustainability of the road sector has yet to be resolved (see Section 4: Assessment of Risk to Development Outcome). The planning and programming capacity at the GDDKiA still needs upgrading, as illustrated by the Project Indicator for effective usage of the HDM-4. The coupling of the financing for physical works with institutional reform was appropriate. The Ministry was interested in the knowledge transfer for reform and in the financing; while GDDKiA would not have been receptive to the Bank without the civil works activities. The weakness of the design was in not addressing financial viability which was a stated project objective. The topics for technical assistance were revised in the latter part of the implementation period based on clients‘ requests. The outputs of the assistance were appreciated by the clients as the studies met the changing demands. The supervision team also restructured the project in the last months of implementation so to fully utilize the available funding. 10 3.2 Achievement of Project Development Objectives The achievement of the PDO was rated as ‘moderately satisfactory’ The PDO for RM&R3 was concise and focused on the appropriate road sector issues. The linkages between the PDO and the outcome indicators were also strong. Sub-Objective 1: To improve the quality of the national road network Sub-objective 1 has been achieved as measured by the outcome indicators: (i) percentage of national roads in good condition and (ii) length of road network designed for 11.5 tons/ axle load. The quality of the road network improved from 48.9 percent ‗good‘ in 2005, to 59.6 percent ‗good‘ in 2009 - it declined slightly to 59.1 percent ‗good‘ in 2010. The Bank support through the RM&R program contributed directly to the improvement of the condition of national roads as the Bank support was approximately 36%, 29% and 24% of GDDKiA‘s road maintenance and rehabilitation budget in the years 2004, 2005 and 2006, respectively. EU funding is for new road investment and does not support GDDKiA‘s maintenance and rehabilitation road activities. The 2009 to 2010 decline of roads in good condition was due primarily to limited funding for rehabilitation works during 2010. A recent GDDKiA simulation indicates that the low level of 2011 budget funding is likely to result in a more significant decline. The load bearing capacity of the road network has improved significantly beyond the target of 3,300 km - from a baseline of 2,191 km, to 5897 km. This is due to the fact that Poland has made significant capital investments in its road network since joining the EU, and thereby gaining access to EU funding and EIB loans. The impact of Bank funding on the improvement of load bearing capacity was not as direct. Sub-Objective 2: To improve the efficiency of the GDDKiA Sub-objective 2 has been partially achieved. The outcome indicators are: (i) implementation of the GDDKia MAP; (ii) effective usage of the HDM-4 system by the GDDKiA. Implementation of the MAP. The MAP indicator was not defined—an assessment of the MAP could be gleaned from the recommendations of a 2005 Modernization Action Plan report.25 (see Annex 10 for details). However, there is no record that the Government accepted all of the recommendations. The following areas were covered in the recommendations: ï‚· GDDKiA reorganization and management. Significant progress has been achieved. When the PM&R Program started, the GDDKiA‘s only focus was on maintenance. With the inflow of EU funding, investment (preparation, implementation, and monitoring of investment projects) became important. In 2010, the GDDKiA was reorganized into three departments that broadly reflected the MAP consultant‘s recommendations. The three departments were: (i) planning; (ii) investment; and (iii) maintenance. A traffic management unit was set up, as well as a technical unit that monitors technical/engineering quality for construction. In addition, the reporting structure from the 16 branches to headquarters has been revised. Previously, branch staff reported only to the branch director. Branch staff now has dual report responsibilities: to the branch director and to the functional supervisor at headquarter. A Quality Management System has been implemented that is audited annually and recertified periodically. The GDDKiA meets the requirements of ISO 9001. ï‚· Planning and programming. Progress has been moderate. An effort for functional re- classification of the road system was undertaken. However, because the political dimension in reclassification would have resulted in a budget reallocation, the reclassification effort did not proceed further. However, there is now a more rational allocation of funds. Previously, funds for 25 Finnroad Ltd Phase 1 Report, May 10, 2005. See Annex 10. 11 routine maintenance were allocated to each branch office based on km under management. In 2010, the allocation of funds for rehabilitation was revised from a branch basis, to a system based on priority of rehabilitation works.26 The GDDKiA does not have a road master-plan to guide long-term strategic decisions. For the medium-term, the plan is to implement the Multi-year Program, which consists mostly of EU-funded projects. The Project called for the introduction of a SAP module for project planning and management. This SAP module was dropped.27 Given the on-going capital investments, the need for a MIS for planning and programming is even greater. ï‚· Revision of Procurement Rule. Substantial progress has been made. In order to implement new investments for highways and bridges, a special law was passed in 2008 to allow these activities to be procured as exceptions to the regular procurement law. This allowed the procurement of 2000 km of new highway investments in 2009, worth about 60 billion PLN - with an average procurement processing time of 6-8 months. The major change was that tendering and civil works could proceed in parallel with compensation negotiation for land acquisition and resettlement. The land is expropriated once the alignment is fixed. ï‚· Introduction of Customer Services Concept. Substantial progress has been made. The GDDKiA has become a more service-oriented organization. The communication unit has increased from one staff plus one consultant to ten headquarters‘ staff and at least one field staff in each of the 16 branches. The communication unit deals with external and internal communications. In addition, traffic management is a stand-alone unit on par with maintenance of roads and bridges. ï‚· Modernization of Human Resources Management. Some progress has been made. There have been two across the board pay raises in the past five years, to increase the pay scale of the staff. Job descriptions have been written for positions, with grade levels and annual performance reviews instituted. Some of the managers encountered during the ICR mission have been hired within the last five years. The Project supported the implementation of the SAP module for human resources and payroll. ï‚· Financing and financial management. Financing remains an issue. By contrast, financial management - with the implementation of the SAP - has taken a significant step forward. The GDDKiA receives its funding from the fuel excise tax - 18% of the excise tax goes to land transport (road and rail). The MoI apportions that 18%. Once the funds have been allocated, the GDDKiA has discretion on how to manage their usage. However, the allocation of this 18% is a Ministerial decision - and the funding from the Road Fund and the excise tax cannot be co- mingled. Electronic tolling has been introduced. The revenues from tolling go to the Road Fund, which is just for capital investment. The Project has supported the implementation of the SAP for accounting and financial management. ï‚· Information management and data services. Substantial progress has been made. See Section 2.2 on Implementation. 26 Planning and programming for capital investments by the Road Fund is less structured. There is a medium-term Program currently for 2011-2015, for investments funded through the Road Fund. The selection of projects is a Ministerial decision, and the GDDKiA is the implementing entity. Most of the activities (80%) are co-financed with the EU and the rest are solely State-funded. The EU projects underwent an economic evaluation prior to inclusion in the Program. There is no requirement for economic evaluation for State-funded projects prior to inclusion into the Program. 27 The initial consultant proposal did not match the GDDKiA‘s expectations. See Section 2.2: Implementation. 12 In summary, the GDDKiA has now become a very different organization from what it was in 2004 when the RM&R program first commenced. It is a State agency with an accountable and modern organization structure; its planning function and MIS have been upgraded, and it has become a more client- than engineering-oriented entity. The GDDKiA did not make much progress at implementing the MAP during the first two years of the Project. This indicator did not meet the 2007 target date set in the results framework. Much of the organizational reform has taken place during the past three years, after the current management was appointed. By the Project closing in 2011, substantial progress had been made in implementing the MAP. Effective usage of the HDM-4 system by the GDDKiA. Prior to the commencement of RM&R3, the Bank had already introduced the HDM-428 to Poland and had financed activities designed to facilitate its use by the GDDKiA. The network data can easily be imported into the HDM-4, there is an HDM-4 workspace configured to Polish conditions - and a number of GDDKIA professionals are proficient in its use. In 13 out of the 16 branches, there is staff capable of running the HDM-4 model. An economic evaluation of investment road works is required; however, there is no such requirement for the economic evaluation of maintenance and rehabilitation road works, as long as they are financed with local funds.29 The main focus of the evaluation and prioritization of road works in Poland is still a technical evaluation based on road condition, traffic, and safety considerations with road work costs and road-user costs being considered less important. This technical approach is satisfactory in the case of no budget constraints, but it does not optimize the allocation of resources under budget constraints. In addition, the planning and analytical function of the HDM-4 has not been fully utilized, because the model is not being used to compare Project-alternatives at the Project level - and it is not being used for the strategic planning of road works at the network level.30 The data required for various evaluations is readily available; therefore, what is needed is a desire on the part of the GDDKiA to perform such evaluations, and some guidelines on how to perform them. Sub-Objective 3: To improve the financial viability of the national road network There is no component directly supporting this sub-objective, and there is no indicator. The GDDKiA receives a portion of the fuel excise tax for its operations. The Road Fund is legally restricted to new investment, and cannot be tapped for maintenance or GDDKiA administrative expenses. Financial viability was identified as an issue. The matter was analyzed, but not addressed. At present, GDDKiA does not have a reliable and stable source of funding for maintenance and rehabilitation of the national roads network. Annual maintenance and rehabilitation plans are devised based on budgetary financing so a systematic program for road repairs is difficult to plan and implement. Sub-Objective 4: To Improve Traffic Safety The safety indicators are: (i) road fatalities per year less than 4,700 - the actual value achieved was 3907; and (ii) road fatalities per 10,000 vehicles less than 2.55 - the actual value achieved was 1.77. These two indicators have been fully met. Improving traffic safety in Poland has been a success story of Bank assistance in the road sector. The Bank support for traffic safety included: (i) expert support through the funding of individual and institutional consultants, (ii) road safety studies and analyses, (iii) soft measures 28 The Highway Development and Management Model (HDM-4) is a tool to perform the economic evaluation of road works, prioritize a program of road works according to economic criteria, and evaluate an entire road network for planning purposes to determining the maintenance. 29 An economic evaluation is only needed for maintenance and rehabilitation works financed by IFIs, and HDM-4 was used for the PM&R program. 30 At project level, the model could be use to compare different maintenance and rehabilitation standards for a given road to be able to identify the standard that minimized total transport costs over an evaluation period. At network level, the model could be used to evaluate the entire national roads network to support the allocation of resources among branches and road types, to determinate the funding needs for maintenance and rehabilitation works that minimize total transport cots, present an optimal work program under budget constraints, and show the consequences of budget constraints to GDDKiA, the road-users, the economy and the infrastructure. 13 in the form of public relations activities and awareness campaigns, and (iv) support for investments and implementation of safety equipment and facilities. Near the end of the Project, three large road safety campaigns were launched by the National Road Safety Council under the Ministry of Infrastructure. The aim of the campaigns was to modify behavior to promote road safety. The topics of the campaign were: (i) driving vehicles under alcoholic influence, (ii) driving vehicles at unreasonable speed, and (iii) usage of seatbelts and child restraint. To change public attitude, a comprehensive concept, logo and umbrella brand were adopted during the campaigns by all key participants involved. The goals of the campaigns were to: (i) attract public attention to the problem, (ii) make drivers aware that accidents are a consequence of their behavior on the road, (iii) create public debate on how to reduce the number of accidents, and (iv) trigger public disapproval for harmful behavior on the roads. The Project‘s consultant support in the implementation and supervision of Blackspots Elimination Program on regional roads resulted in unexpectedly good results in road safety parameters. The reaction from the public and regional authorities to the program was very positive and on some road sections, no major accident was reported since the program‘s completion. The Bank support on traffic safety through the National Road Safety Council Secretariat included expert technical assistance, project management, social campaigns implementation and institutional coordination. This was a ten year effort by the Bank in its support of the Council through Roads II Project and the RM&R program. All of the Council‘s activities largely supported by Bank funds had improved the road safety parameters and accelerated the introduction of modern technologies. Sub-Objective 5: To Improve Road–Users’ Satisfaction This indicator calls for an annual road-user survey. The baseline road-user survey was completed for 2005. In subsequent years, surveys were conducted, but unfortunately, the questions were not adequately comparable - the exception being the 2011 survey. The latter demonstrated significant progress in users‘ perceptions of the quality of roads - noticeable improvement was observed by road-users over the past 5-6 years. In 2005, about 75-80 percent of road-users assessed overall quality of road infrastructure as bad or very bad (only 2.5-3 percent assessed it as rather good or good, and about 20 percent was undecided). By contrast, in 2011, about 35-40 percent of road-users assessed overall quality of road infrastructure as bad or very bad (30-35 percent assessed it as rather good or good, and about 25-30 percent was undecided). In 2005, about 75-80 percent of road-users assessed road pavement condition as bad or very bad (only 4 percent assessed it as rather good or good and about 15 percent undecided). By contrast, in 2011, about 45 percent of road-users assessed road pavement condition as bad or very bad (about 25 percent assessed it as rather good or good, and about 25-30 percent was undecided). The intent of this indicator was not on measuring the impact of the Bank‘s activities but on changing the culture of GDDKiA to one more responsive to road users‘ needs. While annual comparable surveys were not completed, GDDKiA now undertakes regular surveys, the results of which are incorporated into its activities. 3.3 Efficiency Efficiency in achieving the PDO in terms of EIRR31 was rated as ‘satisfactory’ The appraisal document presented only a sample economic analysis for one typical maintenance/rehabilitation task planned to be carried out in 2006. Furthermore, it did not describe in detail the main assumptions of the evaluation, such as the traffic growth rate, the traffic composition, or the economic cost factor. The appraisal document also stated that every road maintenance and/or 31 About 92% of the total Project funding was for civil works for which the calculation of EIRR was possible. The reminder of the funding was for technical assistance. 14 rehabilitation contract would guarantee a minimal economic internal rate of return (EIRR) of 20%,32 most likely to ensure that only projects with very high returns were financed by the Project. The GDDKiA computed the EIRR for 186 contracts for the 2005-2006 timeframe. A review of those contracts shows that 26% have an EIRR lower than 20%, and 5% have an EIRR lower than 12%. The review shows that the minimum per contract EIRR threshold (20%) was not followed - although it is also true that the Project ex post EIRR wound up being substantially above that 20% threshold. The GDDKiA computed - with the HDM-4 - the EIRR of 95% of the 2005-2006 contracts, because it was required by the World Bank. However, the GDDKiA only computed 17% of the 2008 and 2011 contracts, because the Polish Government does not require an economic evaluation for periodic maintenance and rehabilitation works financed with local funds - and because the Bank-financed 2008 and 2011 Road Projects had already been prepared according to local requirements. The table below shows the median EIRRs - in percentage - per road type of the aforementioned 186 contracts.33 The overall ex-ante EIRR is 37%, which is satisfactory and expected for such high traffic roads. Road Works Ex-Ante EIRR (%) Road Works Road Works EIRR Class Type (%) Periodic Overlay 30 to 50 mm 43% Maintenance Rehabilitation Strengthening 38% Reconstruction 19% Improvement Widening to 7.0 meters 28% Overall 37% The ex-post economic evaluation considered the actual traffic growth rate from 2005 to 2010, and the average price increases impacting the contracts. The overall traffic annual traffic growth rate adopted at appraisal from 2005 to 2010 was 5.2% (6.5% for cars, 3.3% for delivery vehicles, 2.4% for medium trucks, and 4.0% for articulated trucks), whereas the actual annual traffic growth rate from 2005 to 2010 on the Project roads was 3.4%. For the ex-post evaluation, the actual traffic growth rate was used. The actual road work costs for maintenance and rehabilitation works in Poland do not differ much from the contract costs, due to the fact that the parameters of the road works do not change very much, and in recent times the contract prices are lower than the estimated costs. For the ex-post evaluation, an increase of 3% on Project costs was assumed. The ex-post evaluation EIRR for the representative Project is 33.4%; therefore, the actual traffic and costs reduced the EIRR by 10% as compared to the ex-ante EIRR of 37.0%. Nevertheless, an ex-post EIRR of 33.4% indicates that the economic justification of the program was satisfactory. In terms of traffic safety and public awareness campaigns, safety activities implemented by both the GDDKiA and the NRSC changed attitudes and behaviors and technical assistance for the Blackspots Elimination program eliminated major accidents in some sections completely. Traffic fatalities during the Project period were reduced by 27.9%. Public reactions to the traffic safety activities have been very positive. The efficacy of these activities - while difficult to measure - are highly satisfactory as they have resulted in behavior changes among Government officials and the public on traffic safety issues (see Annex 7 for details). 32 During RM&R1 and RM&R2, the minimum EIRRs per contract were 25%. All the roads under consideration had a classification according to local technical conditions for a pavement rating of ―D‖. The EIRR was reduced to 20% for RM&R3—and a pavement rating of ―D‖ or ‖C‖ was eligible. By the third Project, the roads in the worst condition had probably been rehabilitated. 33 These were contracts for civil works for which EIRRs were calculated. In total, over 200 civil works contracts were financed under the Project. 15 3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory The rating derives from the relevance of the Project objectives in supporting the civil works activities and the institutional-building components, and from the moderately satisfactory achievements of the PDO and the satisfactory efficiency in terms of the EIRR. The results were better and safer roads. The condition and safety of the national road network met or exceeded the outcome indicators though it should be acknowledged that the World Bank‘s support was part of the broader program towards achieving this success. However, the rating took into account that if the PMMR had been implemented as scheduled, the results of the pilot would have been available to guide future implementation. The usage of the HDM- 4 was only moderately satisfactory, and the GDDKiA still needs to improve its planning and programming activities. More importantly, the financial viability of the national road network is under question. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development The social impact of the Project involves the change in road-users‘ attitudes and behaviors regarding traffic safety. During the Project period - when motorization increased significantly in Poland - the number of fatalities on national roads fell by 27.9% from 2005 to 2010. This translated to a reduction of 500 deaths. In terms of the poverty impact, the Project helped to strengthen the contractor market, especially those contractors implementing smaller maintenance schemes. The latter are implemented mainly by small and medium-sized companies that are domestically-owned. (b) Institutional Change/Strengthening The MAP recommendations have not been completely implemented. Nevertheless, the GDDKiA is for the most part transforming into a modern organization—in terms of organization and reporting structure, service and customer orientation, traffic safety emphasis, quality management, and the usage of information technology. The Project‘s pilot performance-based maintenance contract was cancelled (see Sections 1.7 and 2.2). However, the GDDKiA is implementing something substantially equivalent, and the direction is for more performance-based contracts for the maintenance of newly constructed roads. Rehabilitation is completely outsourced, and routine maintenance is increasingly contracted out. The ability of the GDDKiA to implement a large volume of new works in the last few years has demonstrated that the procurement procedures and land acquisitions have been successfully modified. The change in attitude towards road safety is in large part the work of the National Road Safety Council. The establishment of a traffic management unit in the GDDKiA is the type of outcome that further indicates the road-user orientation of the GDDKiA. (c) Other Unintended Outcomes and Impacts (positive or negative) One positive result is that reform at the GDDKiA has probably contributed to Poland‘s ability to prepare and implement EU-funded road projects. The Polish absorption rate in the road sector is one of the highest among the new EU member states. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops A beneficiary survey was not carried out. 4. Assessment of Risk to Development Outcome Rating: Substantial 16 Although the MAP has not been fully achieved, the institutional transformation of the GDDKiA has taken place. The GDDKiA has the organizational structure and the reform momentum such that the risk to most of the development outcomes is low. The risk to the development outcome concerns the adequacy of financing for the national road rehabilitation and maintenance. If funding were to remain at its current level, this would put at risk what has been achieved in the RM&R Program. Maintenance and rehabilitation expenditures increased substantially from 2004 to 2008. However, they decreased somewhat in 2009; and they decreased substantially in 2010 - by 44% to PLN 1,719 million (approx. US$513 million) - due to financial constraints arising from the struggling global economy. From 2005 to 2009, the percentage of the network in good condition increased from 49% to 60%. However, it decreased to 59% in 2010, because the impact of the reduced funding was already evident. The maintenance and rehabilitation expenditures in 2011 are at a level similar to 2010 - this compromises the long-term sustainability of the network. An analysis of budget requirements indicates that maintaining the national roads in their current condition would require expenditures of about PLN 2,142 million (approx. US$640 million) per year. In contrast, the 2010 expenditures on maintenance and rehabilitation works were PLN 1,719 million (US$513 million). This highlights the fact that more resources (about 25% more) are needed for maintenance and rehabilitation works to at least maintain the current network condition over time. If the maintenance and rehabilitation budget is not restored to a sustainable level soon, the cost for road repairs will become exponentially higher later on. The window of opportunity for performing periodic maintenance works is small. A failure to perform periodic maintenance works has financial consequences: (i) to the road agency, with the high costs for rehabilitation works; and (ii) to the road-users, with the increase in road-user costs due to the deterioration of the road. The risk to the Project Development Outcome was rated as ‗substantial‘, because a significant increase in the road maintenance budget in the current economic environment in Europe appears difficult, and because it is also unlikely that the Government will be able to revise the Road Fund legislation to cover maintenance expenditures. Given the likeliness that the road maintenance budget will continue at the current reduced level, deterioration to the road conditions is expected.34 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory The Project preparation was thorough and effective, because the Bank had an in-depth knowledge of the country needs. The institutional development component reflected the lessons learned from previous Projects. Nevertheless, it was overly optimistic in terms of: (i) evaluating the commitment of the GDDKiA and its capability to implement institutional reform; and (ii) evaluating the acceptability of modern asset management techniques such as PMMR and HDM4. The Bank might have missed an opportunity to engage with the MoF at that time to improve the financial viability for maintenance and traffic safety activities by ensuring some level of funding outside of the annual budget allocation. The monitoring indicators on pavement conditions and road safety were strong. However, it was difficult to make an assessment of the indicator for GDDKiA institutional reform results due to the fact that the description of the MAP was missing. From a substantive point of view, the Project was well thought out and each of its components addressed the needs of the sector. 34 Incidentally, in a financially-constrained environment, a better use of the HDM-4 would help identify the optimal package of roads to be repaired, and the level of repair. 17 (b) Quality of Supervision Rating: Moderately Satisfactory The frequency of supervision of at least two missions each year was adequate. In the last few years, the Project was task-managed from the Warsaw office. This allowed for closer implementation support, for which several beneficiaries voiced appreciation. The supervision teams used relevant skills from HQ and from the Warsaw office in a cost-effective way. There were procurement, financial management, and technical audits. The Project was restructured a few months prior to the Project closing, which allowed the Government to reallocate funds between components for additional civil works and some additional technical assistance. The supervision teams were proactive: (i) in ensuring that the technical assistance activities moved forward during a period of frequent managerial changes at the GDDKiA; and (ii) in subsequently updating the allocation of funds for technical assistance activities, in order to meet changing needs. The rating reflects two failings. While a Mid-Term Review was completed, the team did not restructure the Project given the evident implementation issues. Due in part to the Project design, the supervision team focused on pushing the implementation forward. Its efforts might have been better spent on policy dialogue at an appropriate Governmental level on the financial viability issue. Given the Bank‘s fiscal support to the Polish Government during the past few years, an effort was worth making. In addition, the indicators in the Project Portal do not address financial sustainability which is one of the project objectives. While this was probably an initial input shortage, which was not properly addressed during mid-term review financial sustainability was verified regularly during supervision and reported in Aide Memoires. But the result of this oversight was that ISRs did not address as explicitly this part of the project objective. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory The moderately satisfactory rating for overall Bank performance resulted from: (i) a moderately satisfactory rating for the quality at entry; and (ii) a moderately satisfactory rating for Project supervision that provided substantial technical support to the Government to implement the institutional-building component. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory The rating for overall Government performance resulted from: (i) a satisfactory rating for the quality at entry, because it fulfilled all of its obligations in Project preparation; and (ii) a satisfactory rating during Project implementation for its continued support in institutional-strengthening activities and for complying with its obligations regarding financial management and reporting. However, the Government‘s inability to provide counterpart funding to fully utilize the Project‘s available funding near the Project close somewhat marred its overall good effort. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory The implementing agency completed the civil works on time and according to budget. The delay in the implementation of the technical assistance activities was partly the result of the frequent changes in Government, and related changes in the GDDKiA‘s management and priorities during the first half of the implementation period. Much of the progress in technical assistance activities - in traffic safety, MIS implementation, and organizational reform at the GDDKiA - was achieved with the current GDDKiA‘s management, which has been in place for the last three years. The implementing agency rating was 18 moderately satisfactory, because the PMMR that was dropped had been considered an important feature of RM&R3 during Project preparation. In addition, the delay and incomplete implementation of the MIS35 and the limited use of the HDM-4 as an analytical tool were areas that were within the control of the GDDKiA, and the results could have been better. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory The overall Borrower performance was rated as ‗moderately satisfactory‘, because of the satisfactory Government performance and the moderately satisfactory Implementing Agency performance. 6. Lessons Learned The RM&R3 was the last road Project in Poland under the Sector Wide Approach (SWAp) concept. It would have been more precise to categorize it as ‗Program Based‘, because it was focused wholly on the road sector. The SWAp was a flexible and cost-effective way to support middle-income countries with acceptable country systems. However, the mixing of fast disbursing operations with more labor- and time-intensive institutional-building activities resulted in inefficiencies. As soon as the civil works that followed country systems were completed, the implementing agency became less focused on the institutional-building component. The non-civil works component used Bank systems, and many beneficiaries had difficulties following the Bank procurement rules once the PIU staff who was familiar with Bank procedures left and this position was not filled due to lack of funding. The use of country systems for civil works was appropriate based on the results. It allowed the GDDKiA to procure rapidly, and to realize large rehabilitation programs with quick visible results. The problems encountered in implementing the MIS and the ITS components suggest that a transport infrastructure team might not be best suited to provide implementation support in technological areas, however relevant the need. Overall, the Project design for the technical assistance components was overly optimistic. Modernization reform could wind up taking as much as an entire decade to implement. The GDDKiA MAP was conceived before 2004—when RM&R1 was in preparation, and when there was commitment at the MoI and with senior management at the GDDKiA. However, reform could take hold only if it was accepted on a working level—and this takes time, and a gradual change over of personnel. One example is the PMMR. The GDDKiA is now moving in the direction of outsourcing for maintenance and rehabilitation and performance-based contracting. When the PMMR was introduced, the GDDKiA was not ready to take that step. Much was accomplished in Poland, but the progress did not meet the timeline of the indicators. A lesson that could be drawn from this Project is that while a Project beneficiary such as GDDKiA was much more interested in the funding for civil works, the lasting impact of this Project would probably be the institutional reform and the resultant change. However, without the funding for works a partnership with GDDKiA would be hard, if not impossible, to establish. The lesson for the Bank is the importance of policy dialogue outside of the technical and road specific issues. Bank transport teams tend to work closely with the MoI or the MoT, but less so with the MoF. Prior to the commencement of the program, it might have been possible for the Bank team to come to an agreement with the MoF that sustainability for maintenance requires a stable source of funding and some provision made in the Road Fund. Similarly, the lessons learned from the HDM-4 implementation in Poland are: (i) training on the use of the model should be a continuous process due to staff turnover; and (ii) the HDM-4 or any economic evaluation should only be done if there is a policy requirement for economic evaluation before funding a 35 The Project planning and management module was dropped. 19 rehabilitation activity. Training alone is not sufficient. The HDM-4 was utilized for a rehabilitation investment analysis when IFI funding was involved, but fell into disuse once it was no longer required.36 Last, the success of the traffic safety activities was the culmination of technical support through a series of Projects. Institutional change takes time and is often beyond the span of one Project. In moving forward, though the project successfully rehabilitated roads, given availability of other financial instruments and sophistication of the client, the time may have come for the World Bank in Poland to turn increasingly towards transfer of knowledge and experience in this sector. It should be noted that EU supports road capital investments and does not support road maintenance and most rehabilitation activities. However, Bank support in this area has to be preceded or accompanied by fundamental sector financing reform. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies A summary of the Borrower‘s ICR is as follows: (i) the funds from the Project enabled the refurbishment of 1,103 km of roads, and contributed significantly to increasing the percentage of roads that are in good condition; (ii) it is a serious concern that the GDDKiA does not have a reliable and stable source of funding for maintenance and rehabilitation of the national road network; (iii) the technical assistance for public relations and for the traffic safety program have been very satisfactory, (iv) the outputs of the MIS for Wide Area Network and for Information Security Management have met expectations—but the implementation of Enterprise Resource Planning has not achieved all the expected results, because of the complex information management required at each organizational level of the GDDKiA; (v) it is noted that there has been professional training for 13 engineers, and general skills training for over 2000 employees of the GDDKiA and the MoI; and (vi) results from road-user surveys were integrated into the policymaking process of road administration and surveys will be performed regularly to support the actions delivered by the GDDKiA. The beneficiaries appreciated: (i) that the Bank was one of the main advocates for a balanced road policy; (ii) that there was an emphasis on the management of existing assets,; (iii) that the Project was flexible in the application of procurement procedures for works; (iv) that the supervision team provided technical knowledge and support in preparing complex Terms of References; and (v) that the Bank contributed indirectly to a better absorption of EU funds for the national road investment program (See Annex 7 for details). (b) Co-financiers There is no co-financier. EIB provided a parallel loan. See Annex 8 for EIB‘s comments. EIB activities were complementary to the Project by providing significant amount of funding for road rehabilitation works. There was good cooperation and coordination with EIB through regular meetings with EIB representatives. For example the scope of monitoring reports related to road rehabilitation works financed from both loan sources were agreed jointly, which helped GDDKiA to streamline reporting. In summary, EIB concluded that the road maintenance component was most successful but noted the problems surrounding the PMMR pilot. The implementation of HDM4 benefitted EIB supported financing but there have been difficulties in its continued implementation. EIB noted the success in implementing the road safety component and had been involved, primarily in funding several "black spot" elimination road upgrades. In the construction of motorways, Road Safety Audits are mandatory for all EIB financed projects. The EIB had had some issues with personnel changes at the National Road Safety Council and 36 Incidentally, economic analysis is conducted on EU-funded investment projects prior to project selection, but economic analysis is completed for State-funded projects after the project is already included in the Investment Program. 20 the timely implementation of some of EIB‘s safety components on projects. In terms of technical assistance, EIB, through technical assistance improved the project reporting capacity of the Ministry and reporting is now done in-house. However the economic analysis area still needs more resources for capacity building. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) 21 37 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Actual/Latest Appraisal Estimate Percentage of Components Estimate (USD (USD millions) Appraisal millions) Road Maintenance & Rehab 167.0 181.92 108.93% Implementation of MIS 3.0 4.40 146.67% Road Safety 6.6 6.85 103.79% TA to MoTC 3.6 1.28 35.56% Total Baseline Cost 180.20 194.45 Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs 180.20 194.45 107.91% Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.00 0.00 0.00 Total Financing Required 180.20 194.45 107.91% (b) Financing Appraisal Actual/Latest Type of Co- Percentage of Source of Funds Estimate Estimate financing Appraisal (USD millions) (USD millions) Borrower38 30.00 55.17 183.90% EC: European Investment Bank 166.00 202.77 122.15% International Bank for Reconstruction 180.20 194.45 107.91% and Development 37 Based on data of February 1, 2012. The loan was denominated in EUR. Due to exchange rates changes, the dollar value of the loan at Project close exceeded the appraised amount. 38 The Borrower‘s financing was denominated in PLN. 22 Annex 2. Outputs by Component Component/ Expected Outputs (from Actual Delivered Remarks Subcomponent PAD/Original Implementation Outputs Plan) Component A : The Road Maintenance and Rehabilitation Program Periodic Maintenance Improvement of the National Road The majority of road The Project accomplished its & Rehabilitation of Network. works were original scope in 2006, but National Road executed in was able to deliver more civil Network. (2006 2005/2006 (92% of works than originally Program). total costs planned. The funds from the implemented on 162 cancellation of the PMMR contracts), and the were reallocated to the civil remainder in 2008 works in 2008. Given the (6%) and 2011 shortage of funding for road (2%). rehabilitation, the Project supported the 2011 rehabilitation works from the remaining loan funds. PMMR pilot contract - A modern results-based maintenance Canceled in 2008. The Government procured in pilot civil works and approach delivered by the private early 2011 a 4-year TA to PMMR sector. maintenance contract termed implementation. ―Sustained Standards‖ contract that contained output-based performance criteria. Public awareness Implementation of 2005 Development of PR GDDKiA PR dept started campaign - consultants, communication strategy. strategy, public with program funding and internet-based awareness, media now has a full functioning PR solutions, media relations, intranet, dept, with internal and relations. and road-user external communication awareness traffic instruments and PR staff safety campaign. based in each of the 16 branches. Component B: GDDKiA Management Information System Wide Area Network Completion of the MIS system completed implementation initiated under RM&R2. Security System Same as above completed Enterprise Resource The ERP subcomponent was SAP was selected to Implementation of SAP has Processing System. originally initiated under RM&R2, be the platform for senior GDDKiA‘s but because of implementation delay the ERP system. 3 management support and full was carried over under this Project. of the 4 packages implementation is expected. The funds were obtained from (human resource It is unfortunate that the reallocation or savings from RM&R1 management, Project management package and RM&R2 Projects. accounting and was dropped, especially given financial GDDKiA‘s on-going management) were investment program. partially implemented. They are being rolled out to the GDDKiA branches at this time. Various TA for The RM&R program supports the An updated IT The new IT strategy Implementation of MAP, and various TAs were planned strategy was completed prior to Project 23 Modernization Action but most were cancelled. Strategy delivered. closing would support the Plan (MAP). Development – HR consultant, GDDKiA to continue its IT economic strategy and management PPP consultants development. of national roads, effectiveness of (economic, maintenance, maintenance analysis, engineering, etc) widening standards. were hired. Development of technical design for road safety facilities was completed. Component C: Road Safety Road Safety Campaign Continuation of the Bank‘s support Three nationwide Poland has reduced its traffic (campaign research, for road safety that started even road safety safety fatality rates to within creation and before the RM&R Program. awareness EU norms. More importantly, production, media Reduction in traffic fatalities. campaigns on seat there have been institutional campaign). belts, speed, and changes, such as the drunk driving were GDDKiA has a traffic completed. management unit and also conducts traffic safety campaigns and heightens social awareness of the issue. Consultants to NRSC Several consultants were hired and they were hired by the MoI at Project close. Training to NRSC staff TA service to Regional Black Spot Treatment Program. Component D: TA to MoTC ITS Study The study would have established the The study was The TOR for the study was standards for gathering and cancelled after the difficult to design, because transferring information. first stage. there was minimal understanding of the topic within the MoI. It would have been more efficient if the study had been phased-in with an initial exploratory study to scope out the issues. Absorption of EU dropped regional funds Roads technical, Assessments for The TA to the MoI was revised standards, traffic National Roads because of changing needs and management etc. Investment Program interests. for 2008-2012 completed; Strategic Environment Assessment for Road Development; Development of Program for Inland waterways; training and hiring of consultants for the MoI. 24 Annex 3. Economic and Financial Analysis The Project financed a portion of the GDDKiA periodic maintenance and rehabilitation program from 2005/2006, 2008 and 2011 for national roads. The road works were ultimately implemented on 218 contracts with a total length of 1,103 km, which represents 6% of the national roads network (18,608 km), with a total cost of PLN 1,511 million, including preparation and supervision costs. The majority of road works were executed in 2005/2006 (92% of total civil work costs implemented on 162 contracts), and the remainder in 2008 (6%) and 2011 (2%). The total Project funding for civil works was €138 million (92% of Project), or approximately US$ 180 million. The following table presents the road works distribution per GDDKiA branch—it shows a broadly even distribution per branch, with a higher percentage going to the Warsaw branch (18.3% of total costs). Road Works Distribution per Branch Road Works Length Road Works Cost Branch (km) (%) (PLN Million) (%) BiaÅ‚ystok 23 2.1% 70 4.7% OddziaÅ‚ Å?ódź 86 7.8% 125 8.2% DziaÅ‚ Lublin 23 2.1% 46 3.1% ZiaÅ‚ Rzeszów 59 5.3% 62 4.1% Zielona Góra 30 2.7% 48 3.2% IaÅ‚ Bydgoszcz 62 5.6% 133 8.8% DdziaÅ‚ GdaÅ„sk 68 6.2% 83 5.5% ZiaÅ‚ Katowice 52 4.7% 65 4.3% DdziaÅ‚ Kielce 57 5.1% 89 5.9% DdziaÅ‚ Kraków 50 4.5% 93 6.1% DziaÅ‚ Olsztyn 95 8.6% 136 9.0% OddziaÅ‚ Opole 24 2.1% 36 2.4% DdziaÅ‚ PoznaÅ„ 98 8.9% 112 7.4% ZiaÅ‚ Szczecin 53 4.8% 87 5.8% ZiaÅ‚ Warszawa 259 23.4% 276 18.3% ZiaÅ‚ WrocÅ‚aw 65 5.9% 51 3.4% Total 1,103 100.0% 1,511 100.0% The table below shows the road works distribution per road works type. The majority of the Project funds were used for rehabilitation works (88%), with the remainder of the funds used for periodic maintenance works (6%) and improvement works (7%). Periodic maintenance works comprised mostly resurfacing with 30-50 mm overlays. Rehabilitation works comprised strengthening with thick overlays (80-270 mm) or mill and replace works, and reconstruction works. Improvement works widened roads to 7.0 meters to meet required technical standards. Road Works Distribution per Road Works Class Road Works Road Works Cost Length Class Type (%) (%) Periodic Overlay 30-50 mm 6% 12% Maintenance Rehabilitation Strengthening 55% 61% Reconstruction 33% 24% Improvement Widening to 7.0 meters 7% 4% Total 100% 100% The table below shows the median unit costs of road works, in US Dollars per km, per road works type. The median unit cost for periodic maintenance works was around US$135,000 per km, while the 25 rehabilitation works were 3.5-4.5 times more costly—which is in line with international experience, and highlights the importance of doing timely periodic maintenance. Road Works Unit Costs Road Works Road Works Unit Cost Class Type (US$/km) Periodic Overlay 30-50 mm 135,000 Maintenance Rehabilitation Strengthening 470,000 Reconstruction 610,000 Widening to 7.0 Improvement meters 810,000 The table below shows the 2010 average traffic, in vehicles per day, per road work type. The overall average traffic was 9,605 vehicles per day. Road works requiring widening to 7.0 meters had the lowest average traffic (6,966 vehicles per day), while rehabilitation works had the highest traffic. Road Works Average 2010 Annual Daily Traffic (vehicles/day) Road Works Road Works AADT Class Type (vpd) Periodic Overlay 30-50 mm 7,229 Maintenance Rehabilitation Strengthening 10,056 Reconstruction 9,752 Improvement Widening to 7.0 meters 6,966 Overall 9,605 The average traffic of Project roads (9,605 vehicles per day) was similar to the average traffic of all national roads (9,888 vehicles per day), as given in the table below. The average traffic on national roads increased 3.5% per year from 2000 to 2005 and from 2005 to 2010. The average traffic on Project roads increased 3.4% per year from 2005 to 2010. The GDP increased on average by 3.2% per year from 2000 to 2005, and by 4.7% from 2005 to 2010. National Roads Average Traffic (vehicles/day) Vehicle Category 2000 2005 2010 Motorcycles 15 20 41 Passenger car 4,931 5,878 6,914 Van 800 833 939 Truck 428 442 426 Heavy truck 700 1,005 1,463 Bus 116 120 93 Tractor 19 14 12 Total 7,009 8,312 9,888 The appraisal document presented only a sample economic analysis for one typical maintenance/rehabilitation task planned to be carried out in 2006. Furthermore, it did not describe in detail the main assumptions of the evaluation, such as the traffic growth rate, the traffic composition, or the economic cost factor. The appraisal document indicated that: (i) the GDDKiA would perform the economic evaluation of all maintenance/rehabilitation contracts using the Highway Development and Management model (HDM-4), which is a computerized tool supporting planning and programming of road maintenance and rehabilitation works; and (ii) the GDDKiA clearly has the capacity to undertake 26 such an analysis. The appraisal document stated that every road maintenance and/or rehabilitation contract would guarantee a minimal economic internal rate of return (EIRR) of 20%, without elaborating on the reason for the definition of this high threshold. Most likely, the objective was to ensure that only projects with very high returns were financed by the Project. The discount rate used traditionally by the World Bank in developing countries is 12%; the discount rate used in developed countries is lower than 8%; and the EU-recommended discount rate for road works in Poland is 5%. Thus, the 20% discount rate adopted for the Project is a rigorous threshold. The GDDKiA computed the EIRR for 186 contracts. A review of those contracts shows that 26% have an EIRR lower than 20%, and 5% have an EIRR lower than 12%. The review shows that the minimum per contract EIRR threshold (20%) was not followed during Project implementation. The minimum EIRR is 10.6%, which is satisfactory considering that the EU-recommended discount rate for road projects in Poland is 5%. The GDDKiA computed—with the HDM-4—the EIRR of 95% of the 2005-2006 contracts, because it was required by the World Bank. However, the GDDKiA only computed 17% of the 2008 and 2011 contracts, because the Polish Government does not require an economic evaluation for periodic maintenance and rehabilitation works financed with local funds—and because the Bank-financed 2008 and 2011 Road Projects had already been prepared according to local requirements. The table below shows the median EIRRs—in percentage—per road type of the aforementioned 186 contracts. Periodic maintenance works have higher economic returns (43%) than rehabilitation and improvement works (19%-38%), which is in line with international experience. The overall ex-ante EIRR is 37%, which is satisfactory and expected for such high traffic roads. Road Works Ex-Ante EIRR (%) Road Works Road Works EIRR Class Type (%) Periodic Overlay 30 to 50 mm 43% Maintenance Rehabilitation Strengthening 38% Reconstruction 19% Improvement Widening to 7.0 meters 28% Overall 37% The ex-post economic evaluation considered the actual traffic growth rate from 2005 to 2010, and the average price increases found on the program road works. The ex-post evaluation was done for a representative rehabilitation Project with an ex-ante EIRR of 37.0%, the ex-ante overall Project EIRR, and representative traffic and unit costs of road works. The overall traffic annual traffic growth rate adopted at appraisal from 2005 to 2010 was 5.2% (6.5% for cars, 3.3% for delivery vehicles, 2.4% for medium trucks, and 4.0% for articulated trucks), whereas the actual annual traffic growth rate from 2005 to 2010 on the Project roads was 3.4%. For the ex-post evaluation, the actual traffic growth rate was used. The actual road work costs for maintenance and rehabilitation works in Poland do not differ much from the contract costs, due to the fact that the parameters of the road works do not change very much. For the ex-post evaluation, actual costs were considered to be 2% higher than contract costs, based on an examination of 46 sample contracts in which the average cost increase was 2%. The ex-post evaluation EIRR for the representative Project was 33.4%; therefore, the actual traffic and costs reduced the EIRR by 10% as compared to the ex-ante EIRR of 37.0%. Despite this EIRR reduction, an ex-post EIRR of 33.6% indicates that the economic justification of the program was highly satisfactory. 27 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Michel Audige Sector Manager, Transport SASDT Program Team Leader Transport and Radoslaw Czapski Sr. Infrastructure Specialist ECSS5 Operational Support Anca Cristina Dumitrescu Sr. Transport. Spec. AFTTR TTL for Preparation Daria Goldstein Sr. Counsel LEGAF Lawyer Marie Antoinette Laygo Program Assistant ECSSD Team Assistant Environment and Barbara Letachowicz Operations Officer ECSS3 Safeguards Karina Mostipan Sr. Procurement Specialist ECSO2 Procurement Jan Pakulski Sr. Social Development & Civil ECSS4 Social Safeguards Iwona Warzecha Sr. Financial Management Specialist ECSO3 Financial Management Supervision/ICR Michel Audige Sector Manager, Transport SASDT Program TL Radoslaw Czapski Sr. Infrastructure Specialist ECSS5 TTL May 2008 - Andreas Schliessler Lead Transport. Spec. ECSS5 TTL2006- May 2008 Jaroslaw Giemza Consultant ECSS5 Road Safety Expert Galina S. Kuznetsova Sr. Financial Management Spec. ECSO3 Financial Management Marie Antoinette Laygo Program Assistant ECSSD Team Assistant Environment and Barbara Letachowicz Operations Officer ECSS3 Safeguards Malgorzata Michnowska Program Assistant ECCPL Local Team Assistant Karina Mostipan Sr. Procurement Specialist ECSO2 Procurement Audit Social Safeguards and Jan Pakulski Sr. Social Development & Civil ECSS4 Communications Expert Ireneusz M. Smolewski Senior Procurement Specialist ECSO2 Procurement Antti P. Talvitie Consultant MNSTR Road Sector Spec. Iwona Warzecha Sr. Financial Management Spec. ECSO3 Financial Management Barbara Ziolkowska Procurement Analyst ECSO2 Procurement Coral Bird Program Assistant ECSS5 Team Assistant 28 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY06 33.52 119.81 FY07 00.00 134.94 Total: 33.52 254.75 Supervision/ICR FY07 28.53 79.35 FY08 23.28 98.22 FY09 23.23 92.03 FY10 26.57 92.27 FY11 47.91 109.93 FY12 13.83 67.60 Total: 163.35 539.40 29 Annex 5. Beneficiary Survey Results Not required. 30 Annex 6. Stakeholder Workshop Report and Results Not required. 31 Annex 7. Borrower's ICR I. Introduction Third Road Maintenance and Rehabilitation Project (RMRIII) is a continuation of the activities implemented by the subsequent governments on the basis of ―Transport Development Strategy for 2004- 2006 and following years‖ and the ―National Road Development Programme for 2008-2012‖. The Strategy and programme assumed, inter alia, to restrain the degradation of fixed assets in transport, by a significant increase in public spending, bank loans and EU funds to tackle the backlog in maintenance and rehabilitation of the road network. The main aim was to perform deep structural changes in the first period of Polish membership in the European Union. Accession involved the necessity of increasing capacity of international routes to 115 kN per axle, in accordance with EU standards. As its name suggests, this was the third World Bank loan of EUR 150 million, which together with the First (IBRD loan of EUR 100 million signed on 7 April 2004) and Second (IBRD loan of EUR 100 million signed on 26 April 2005), Road Maintenance and Rehabilitation Project provided total World Bank contribution of EUR 350 million to a large-scale programme for the national roads quality improvement in Poland. In accordance with their objectives, the Polish government intended to spend about EUR 1 billion to improve the network in the years 2004-2008, of which European Investment Bank loans for EUR 450 million, the World Bank loans accounted for EUR 350 million, while national state budget resources totalled EUR 200 million. Therefore, a major part of the loan obtained under the Third Road Maintenance and Rehabilitation Project was used to fund annual maintenance and rehabilitation programmes of the national road network performed by GDDKiA. Component value at signing of the contract amounted to EUR 118.325 million. Moreover, Word Bank loans provided significant resources to the implementation of other activities, whose main task was to support and modernise the road administration for the efficient management and absorption of funds. For this purpose, in each of the World Bank loans Technical Assistance programmes for General Directorate of Roads and Motorways and the Ministry of Infrastructure were established. Technical assistance for the GDDKiA was conceived as an analysis and results implementation of the modernising measures: (i) improving capacity of the road administration with regard to road asset management and (ii) enhancing organization and institutional changes, supported by advanced IT projects. Therefore, the remaining part of the road maintenance and rehabilitation component, in the amount of EUR 20.875 million was allocated to finance pilot long-term contracts for area maintenance of roads based on the results (PBC- performance based contracts). Due to the lack of implementation of relevant studies for preparing a model contract in Road Maintenance and Rehabilitation Project RMRI (7223– POL), this task was cancelled and funds were relocated to: (i) national roads maintenance and rehabilitation, and (ii) Technical Assistance for GDDKiA. In the area of support for the modernisation measures in GDDKiA, a number of actions was planned, based on results from recommendations formulated by the Finnish consultant (company Finnroad), hired for that purpose from RMRI. It was a crucial element of the GDDKiA modernisation process, to be divided under the following areas: ï‚· public relations and marketing, including social campaigns, ï‚· IT actions, including ERP-class integrating platform implementation, ï‚· road assets management and other modules. Ministry of Infrastructure was the second beneficiary of World Bank loan. Road safety in a broad obtained a long-term organisational and financial support from the World Bank. The Bank has always paid attention to issues related to the safety of the road network users. Part of the loan (EUR 5.5 million) 32 was earmarked for the continuation of activities related to road safety, which at various levels is coordinated and implemented by Secretariat of the National Road Safety Council (SKRBRD), including in particular media campaigns. The component also included, as in previous years, SKRBRD institutional strengthening in order to implement the aforementioned tasks. The remaining part of the loan (EUR 2.8 million) financed technical assistance component, including enhanced absorption of EU funds and the implementation of intelligent transport systems. The purpose of this component was to support the activities of the Ministry of Infrastructure in the implementation of strategic transport policies. The final value of this component was fixed at the amount of EUR 1.2 million, while the unused funds were earmarked for the a/m GDDKiA tasks of public relations and marketing, including public awareness campaigns. The table below show the allocation of loan amounts between the various components at the beginning (2006) and at the end (2011) of the loan implementation period. Categories Initial status Final status (1) Road Maintenance and Rehabilitation 118.325 136.625 (2) Works and Technical Assistance under Parts 1 20.875 2.375 (ii) and (iii) of the Project (3) Implementation of the MIS under Part 2 of the 2.5 4.3 Project, including expenditures to finance the user fee for rhe wide –area network under Part 2 of the Project (4) Road Safety Assistance under Part 3 of the 5.5 5.5 Project (5) Technical Assistance to the MoTC under Part 4 2.8 1.2 of the Project Total Loan 150 150 Table 1: Word Bank RMR III loan categories: 2006-2011 Word Bank as a partner, was not only limiting himself to provide funds, but also provided for the improvement of the organizational culture of the Polish administration. Thanks to the budget dedicated for technical assistance, it was possible to conduct trainings, and to implement programs significantly raising personnel qualifications, thus the efficiency of performed tasks. Polish administration also welcomed the possibility of using assistance and expertise of the Bank, which has successfully implemented similar projects throughout the world. II. General Directorate for National Roads and Motorways Component A – Road Maintenance and Rehabilitation Road Maintenance and Rehabilitation Programme constituted the major part of the loan. The primary objective of the Programme was to improve efficiency of the Polish national road network maintenance and rehabilitation system through: ï‚· increasing the percentage of roads in good condition, ï‚· creating a stable and sustainable source of financing for the national road network maintenance and rehabilitation. 33 Programme implementation procedures have been designed to allow loan payments in shortest possible time, in accordance with the Polish budget cycle as well as Polish public procurement, environmental protection and management of allocated funds procedures. Share of the World Bank financing in Programme realisation amounted to 48%, while the share of borrowers own funds equalled 52%. At the end of 2003 it became necessary to restrain the progressive degradation of road network arising from the lack of maintenance funding. It was implemented through substantial increase of public, EU and borrowed funds spending to tackle the backlog in maintenance and rehabilitation. Therefore, negotiations with the World Bank and subsequently the European Investment Bank were held to grant financing for the Polish road network rehabilitation. A financial agreement with the World Bank called ―Third Road Maintenance and Rehabilitation Project‖ (RMRIII) that was concluded in 2006, was the third loan with WB following similar contracts that were signed in 2004 and 2005. At the end of 2005, only 48.9 % of roads were in good condition, while 24.9% were in bad condition, and 6.2% were estimated unsatisfactory. The length of roads which required immediate repairs exceeded 4200 km. Total repair needs that is such amount that could make possible the elimination of bad and unsatisfactory road sections occurrence, were calculated at PLN 6.4 billion. This figure did not include the construction of road hard shoulders, bypasses, second carriageway, as well as maintenance and modernisation of engineering structures, shoulders and drainage elements. This amount also did not include the natural degradation of the pavement and the destructive impact of increased heavy vehicles share in the traffic (measured by type of vehicles). A comparison of the results of the General Traffic Census (GPR) from 2000, with preliminary results obtained from GPR in 2005, showed that the increase in truck with trailer traffic was about 44%, which had to impact on acceleration of degradation processes. A group of contracts to the value of EUR 10 million (below this value, the Bank does not use ex-ante control) were implemented. The following works were performed within the right of way: ï‚· repairs ï‚· reconstructions ï‚· widening the road pavement and platform ï‚· strengthening the pavement structure ï‚· improving the drainage of the road Engineering solutions and traffic organisation were implemented with an aim to improve the road safety, especially in urbanised areas crossings and also repairs of engineering structures. The method of tasks selection to be realised by GDDKiA was agreed with the World Bank. The process was based on indications of systems: Highway Development Model – 4 (HDM-4) and Pavement Condition Assessment System (SOSN). Both systems allowed for an objective selection of tasks to be implemented in particular years of the Project duration. The draft plan of road repairs for a given year included the tasks proposed by GDDKiA Branches, which were on the list of sections designated by the HDM-4 system, and of bad pavement parameters confirmed by the SOSN system. Tasks were reviewed and approved for implementation in the Head Office. 34 Total World Bank funds, which participated in the Programme for Rehabilitation of Roads Maintenance and RMR III amounted to PLN 523,989,253. Year WB Funds (thousands of PLN) 2006 454 067,05 2008 55 047,20 2011 13 875,00 TOTAL 523 989,25 Table 2: Share of Word Bank RMR III loan: 2006-2011 228 tasks with a total value of PLN 1,511,207.57 were implemented within the loan. Funds of the World Bank enabled the refurbishment of 1.103,1 km of roads. Conclusions The primary objective of the Programme was to improve the efficiency of the Polish system of maintenance and rehabilitation on national roads, by increasing the percentage of roads that are in good condition, to achieve rate of 85% roads in good condition at the end of 2015 and to create of a reliable, stable and long-term road maintenance and repair financing system. Implementation of the Project has contributed significantly to the aim of increasing the percentage of roads that are in good condition. According to the Pavement Condition Assessment System (SOSN) data, at the end of 2006 the percentage of roads in good condition increased from 48.9% to 53.2%. At the end of 2010 the level was at 59.1% and it was mostly due to the completion of new road connections. It is a result of insufficient resources for repairs of the road network. Unfortunately, the second objective of the Project has not been achieved. Resources of GDDKiA for the renovation of the road in the following years does not allow to achieve the objective, which was set up by GDDKiA in 2004 – 85% of roads in good condition at the end of 2015 r. To the present day, GDDKiA doesn‘t have a reliable and stable source of funding for maintenance and rehabilitation of the national roads network. Plans created in an annual perspective based only on the budgetary financing, prevent GDDKiA from implementing a maintenance policy in a satisfactory manner. Bringing the existing national road network to a good condition, regardless of the construction and upgrade of particular sections, requires GDDKiA to perform systematic repairs, maintain all elements of road infrastructures (drainage of roads, roadsides, trees, etc.) in good technical condition, protect roads, traffic safety devices and other road related equipment , and also traffic engineering facilities. Component B – Technical Assistance GDDKiA has also allocated a portion of the funds to the implementation of Technical Assistance schemes. Within the Project, following tasks were identified: ï‚· Public Relations, aimed at raising the social awareness about the safety on national roads, ï‚· Skills development for GDDKiA staff, ï‚· IT network development, ï‚· Technical and economic assistance to the Public-Private Partnership Department. All the indicated TA schemes were implemented according to the World Bank rules. The overall cost was approx. MEUR 6, with the important credit contribution. 35 Each scheme, notified by GDDKiA during credit lifetime was necessary for improvement of the institution, contributing to the fulfilment of the loan goals. WB loan allowed GDDKiA to implement many interesting and innovative tasks. All the scope of activities concentrated on aspects: with regard to external communication, of raising the public awareness about the road safety and within the internal communication of enhancing the exchange of information and integration of the staff with the structure. A fundamental importance was given to the actions directed to the national roads-users in order to reduce the number of road fatalities in Poland. These roads concentrate the interregional and international traffic and at the same time are used frequently by the local traffic. They constitute only 6% of the total public roads in Poland but no less than 37% of the total fatalities numbers are registered thereat. Communication efforts were addressed to these users, indicating the change in traffic organization and potential threats that may appear during construction phase and at the time the benefits arising from the implemented changes. The purpose of the campaign was to model rational and durable attitude of the users about the safety aspect. Planned actions in the Communication strategy in 2006 could be implemented thanks to the WB involvement. During 2010-2011 the following actions, under the communication campaign National Safety Experiment, were planned: i. Weekend without Casualties, focusing on the important number of fatalities during weekend travels, and aiming at having at least one weekend during summer, when no fatality will be identified on a national road. ii. Cyclic TV programme ―To the Goal‖ (―Do celu‖), showing to the road-users how to drive safely on roads, inform about the news about the road infrastructure and the road safety, notify about the obstructions occurring on the network. iii. Content team, formed to create reliable and complex information about the GDDKiA undertakings on the road network within the external communication policy of the institution. The entire external and internal communication actions were implemented and supported by external WB financed Consultants. It also included supervision over preparation and implementation in 2009 of an internet platform with extended intranet optionality for the whole institution across Poland. As a part of WB loan, GDDKiA has also realised projects related to the development of IT infrastructure, which enabled implementation of many essential informatics systems in GDDKiA and helped to expand the functionality of the system to the regional branches: WAN – Wide Area Network – network using MPLS technology, securing backup connections. Project consisted in creating a complex outsourced WAN network between: ï‚· Headquarters, ï‚· 16 branches in Voivodships (Regions), ï‚· 109 Regions, ï‚· and to provide for it, backup connections in case of breakdowns. Establishing WAN may also result in some savings, ie., transfer of traditional communication channels like mail and telephone by the IT network. Before, the network didn‘t function in many cases and many locations the connection parameters were not appropriate, precluding the usage of modern IT solutions on the organization scale. The Project was implemented over three years until the Project closure. The financing of the service and maintenance was afterwards handed over by the local budget. Information Security Management System (SZBI) - regulations and procedures for the information security management and all monitoring, securing and monitoring measures set into place. As a result a procedure manual describing the security management in all areas taking into account type and class of information. Also was included in this Project a preparation of risk assessment measures. The main reason driving the implementation of such system was development and integration of existing IT 36 networks, which resulted in an increase of information and data flow between all localisations. Therefore, there was a need of establishing a complex policy for GDDKiA focused on following areas: IT (internet access, anti-virus and password systems), organisation (security backup rules, physical access rules, technical facilities working parameters), legal (IT infrastructure usage regulations, statements for compliance with declared norms, access levels to the specific content information), etc… ERP class system SAP – the goal was to set into place an integrated IT system in GDDKiA, that will encompass all activity areas of the organization and to provide full data process at all levels. Implementation of SAP had to provide information necessary to the effective realisation of GDDKiA tasks (including technical, financial, human resources and contract related data, and also data on maintenance, investment and budget) and to support all the key functions and processes concerning maintenance of roads and bridges. The purpose of implementation was to deliver all the information required by GDDKiA and the Ministry. The need of establishing such a system was determined by external consultants in 2004 (Finnroad) and confirmed by the control of NIK (Supreme Control Chamber) in the area of unit management. Until then GDDKiA owned several distinctive, independent IT systems. Some of them were considered as outdated at the time of assessment (systems working in DOS operating system). Other systems owned by GDDKiA were poorly intergrated, majority of them had no automated possibility of data transfer. None of the system could be considered as standardised and the implemented solutions were inefficient. WB financed consultants were procured to implement following areas of activity: financial accountancy (SAP/FI), budget accountancy (SAP/FM), fixed assets (SAP/AA), human resources (SAP/HR) as the basis for further development concept of the existing SAP module and adaptation to the Ministry of Finance resolution on the detailed accounting requirements. The implementation of the road assets management component (SAP/PS) was not achieved. The initial consultant proposal did not match the expectations of the Client, thus the Project was abandoned. Works on the platform implementation were divided into four (4) phases. Final assumed result was a platform implemented in the Headquarters and one branch, then rolled out to all other GDDKiA branches. Due to discrepancies in the consultant results and Consultant refusal to further implement the Project, GDDKiA had to terminate the contract and to revise the component goals. All the aforementioned information management information systems were a considerable part of a larger GDDKiA IT strategy prepared in 2004. The different level of subcomponents implementation, lack of optimalisation of management information processes and existing sectoral IT systems for particular areas located in the organisational units resulted in a need for preparing one integrated IT system including SAP under GDDKIA Informatisation. This task consisted in a preparation of complex concept to be implemented with the further help of EU funds GDDKiA also applied for the funds to develop staff skills. 13 professional trainings for the engineers working in Roads and Bridges Management Department and Traffic Management Department were organised. Moreover, basing on the identification of training needs, skills development plans for the staff were prepared. Over 1000 employees were trained. This task permitted not only to upgrade staff skills and broadened the staff professional horizons, but also allowed to motivate and integrate all the employees. One of the primary components of the loan was the support of Public-Private Partnership Department. This was due to the implementation of large motorway projects in a concessionaire mechanism. As a result GDDKiA has hired highly qualifies technical (2010-2011) and economic (2007-2011) consultant. 37 Conclusions GDDKiA, throughout the life time of the credit implementation has requested and applied for many projects. Each of the completed projects was procured under WB regime and has brought several considerable benefits to GDDKiA and also Ministry of Infrastructure. In the PR area 14 projects were implemented by consultancy companies : out of which 11 outputs were judged very good, one (1) good and last two (2) satisfactory due to consultant engagement in too many areas. For the MIS component 5 large tasks were implemented where only one (1) performance was inadequate and thus contract was terminated. Other four (4) consultants performed accordingly to the Client expectations. The training component was successfully implemented. The performance of consultants to the PPP Department was overall satisfactory. In general GDDKiA has proposed to implement 41 different components in the TA component, out of which 16 were never realised. These uncompleted tasks were mainly related to the management of roads. The main reasons were: unsuccessful negotiations with procured contractors, lack of interest on the market, formal issues and discrepancies between Client procurement procedures Bank‘s ones, internal approval processes of GDDKiA. Implementation of the 25 components has allowed GDDKiA to somehow partially achieve the assumed outputs, as the implemented concepts, systems, tasks and campaigns have provided GDDKiA a possibility to establish and follow the development of a complex modernisation strategy. In 2006 GDDKIA, has prepared with the help of one of the previous WB loans (RMR I) a communication strategy, which implementation enhanced the communication between headquarters and 16 branches. Additionally individual consultants were hired, who at the beginning phase of the strategy implementation have supported the administration in the identified areas (internal magazine ―Kurier Drogowy‖, website, intranet service, external communication development). These steps resulted in a preparation of large-scale PR campaigns to raise the national roads-users‘ awareness, establishment of an internal communication in GDDKiA and staff identification with the company. In terms of effectiveness, statistics prove that campaigns financed through RMR III were needed, fatalities on national roads in 2010 in comparison with 2005 fell by 27,9%. This means the reduction by 500 deaths during lifetime of the Project, which brings considerable economic benefits to the state treasury. With regard to the MIS component the following results were observed: ï‚· WAN implementation successfully increased the share of modern technologies and IT solutions implemented in the road administration and enhanced network related cooperation mechanisms. ï‚· Security (SZBI) has set up (i) a flexible security management system taking into account the future network development currently being implemented throughout the organization (ii) legal framework of the information security and management procedures. The final results are expected at the end of 2012, after several months of system operation. ï‚· Although ERP has not met all the expected result of implementing the complex management of the information at each level of the organization, GDDKiA has undertaken relevant actions to reorient the Project and assure the Project success and what is more important to assure in the future the initial assumptions. The crucial part is the migration of the SAP system (FI/FM/HR modules) to the outstanding 15 branches and thereafter regions, following the strategy prepared in the headquarters. 38 ï‚· GDDKiA informatisation strategy has formulated long-term vision of the technical and organisational solutions and also integrated support of the processes with the guidelines for developing organisation architecture. Finally, the prepared staff skills upgrade programme was also subject to some constructive evaluation which helped to prepare an overall personal skills development of the employees. III. Ministry of Infrastructure Component C – Road safety programme As a part of the RMR III a Road safety component was implemented in the Ministry of Infrastructure and coordinated at various levels by the National Road Safety Council Secretariat (NRSC – SKRBRD). NRSC is an intergovernmental council formed to coordinate and promote the idea of road safety throughout the country. WB has always strongly emphasised on the users safety issues and the cooperation between Poland and WB has already taken effect in the form of: (i) expert support of individual and institutional consultants, (ii) road safety studies and analyses, (iii) soft measures in the form of PR actions and awareness campaigns, (iv) support for the investments and implementation of safety equipment and facilities. The importance which is brought by both parties to the idea of spreading the information and raising the public awareness to the issue of overscaled road accident and fatalities costs resulted in a preparation of long-term support during all RMR Project implementation since 2004, gradually increasing the WB contribution throughout the Project lifetime. In RMR III Project the following tasks were implemented: ï‚· Individual consultant employment. Since the beginning of the Project in 2006 four (4) individual consultants were hired by NRSC to support various activities of the Secretariat: expertise and road safety technical knowledge, Project management, social campaigns implementation and institutional coordination. This was continuation of a long-term WB financed support for the last ten (10) years (RMR I and RMR II and even II Roads Project). ï‚· Consultant support for the implementation and supervision of Blackspots Elimination Programme on Regional Roads. The programme itself was a continuation of a programme cofinanced form the II Roads Project and its envelope amounted to 100 MEUR, out of which 50% (50 MEUR) were co-financed form the European Investment Bank credits. WB has granted financing for the employment of a consultant that was monitoring two editions of the programme. The programme was founded to address a large number of road accidents, injuries and fatalities on the network that is managed regionally (voivodships, counties, communes and municipalities) as a part of the National Road Safety Programme called GAMBIT 2005. Road safety campaigns. Finally as a conclusion of all the efforts, three large road safety campaigns were launched. Topics of the campaign were three main problems that are linked with human factor when promoting road safety: ï‚· Driving vehicles after alcohol drinking, ï‚· Driving vehicles at the unreasonable speed, ï‚· Usage of seatbelts and child restraints. The main reasons for accidents in Poland are invariably hazardous attitudes of the traffic participants such as excessive speed, intoxication, aggression and disrespect for other participants, reluctance to use safety facilities and equipment. Taking as an example the countries that are leaders in enforcing road safety 39 measures (Great Britain, Netherlands), synchronized and uniformed campaigns for road safety promotion were implemented in Poland. To provide for durable change of public attitude and approach, a comprehensive concept, logo and umbrella brand (―Turn on thinking‖ – ―WÅ‚Ä…cz myÅ›lenie‖) were adopted during campaigns by all key factors involved. Principal goals assumed for these campaigns were: (i) attract public attention to the problem; (ii) make drivers aware that accidents are a consequence of their behaviour on the road (iii) create public debate on how to durably reduce the number of accidents (iv) trigger off public disapproval for life harming attitudes on roads. All the campaigns were implemented during the last year of the Project. All the campaigns were coupled with quantitative and qualitative surveys that have assessed the public attitudes and measured the campaign effectiveness in reaching target groups. Conclusions In general the cooperation with all procured consultants proved to be very successful and no concerns were expressed by the Client Turing the execution of services. Works were done according to the timetable and expectations. With regard to the technical assistance, Ministry highly appreciates the performance and support of the Secretariat in promoting road safety message. Individual consultants were kept within the organisation and their contracts are at present financed from the state budget. Institutional consultant has helped in the quality assurance of the investment programmes. It must be underlined that these consultants have strongly contributed to the implementation and completion of all the programmes, strategies and campaigns financed form WB funds during last ten years. Technical and legal expertise was crucial for introducing many different actions and initiatives The investment blackspot programme has brought unexpectedly good results in road safety parameters. After completion of each edition a complex monitoring was executed based on the effectiveness method for the road safety schemes. Regular reports were prepared by the consultant and used for Project evaluation. It must be somehow noticed, that when reporting and evaluating the results of the NRSC efforts, only one third of road collisions is presumed to be noticed as there is no legal obligation to report such occurrence. Much is to be done in the road safety monitoring when there is no regular data collection on the impact of the changes in traffic flows on the road safety, impact of the investment on the shift of traffic during construction period, etc. It was observed that the public reaction to the undertaken actions is very positive. The blackspot programme was very popular among regional authorities and was presented on the local press as a perfect example for reducing fatalities and dangers. On some of the sections, no major accident was reported since its completion. Public reaction to the campaigns promoting good practices is also very positive. Even those traffic participants that infringe regulations on safety admit that regular campaigns promoting safe and reliable actions and behaviour are a good idea. The need for long-term planned actions is strongly supported by the enforcement services. Much interest is put on youth education as a leverage to influence parents and future young drivers. The public campaigns raised awareness of all road traffic actors in the context of road safety and required attitude when driving. In general all the NRSC activity largely supported by WB funds has improved to the road safety parameters and accelerated the introduction of modern technologies. Component D –Technical Assistance Component D has been subject to numerous changes which were driven by the changes implemented in GDDKiA components. Starting from 2006, two key areas were identified: 40 ï‚· Intelligent Transport Systems Strategy (ITS) ï‚· technical standards for the national and public roads Out of which only first was executed. This task was identified as key study to be developed following the new European strategy formulated by the communiqué and the directive on ITS implementation framework in the road transport and interfaces with other transport modes. These documents provided for an accelerated and coordinated implementation of ITS across all EU. The study was divided into stages, where the 1st stage was the identification of TIS technologies and systems, assessment of the sector and presentation of guidelines for national ITS designing. Unfortunately the output delivered by the Consultant was judged insufficient by the Client and the contract has to be terminated. Another strategy that was prepared and implemented with the help of WB funds was Inland Transport Strategy. Local condition and regulatory framework created an environment with shared responsibility between many actors. The actual situation made this sector of land transport as most neglected and underinvested in Poland. MoI has undertaken a difficult task to streamline the interest of all parties and to present a comprehensive strategy for the future implementation. The first report involved: (i) inventarisation of existing infrastructure (ii) management effectiveness analysis (iii) economic, legal and operation determinants for the inland transport. After the first part was accepted consultant prepared the second implementation and strategy part of the part that included: (i) rehabilitation programme proposal (ii) legal framework amendments proposal (iii) analysis of the infrastructure development and adaptation to the European requirements and intermodal transport system. Another import ant key area identified with WB staff was the support to introduce requirements for the strategic environmental assessments (SEA). The notion for the strategic approach was introduced in practise only in 2008 and with the help of credit funds two large strategic environmental assessments were prepared in the Ministry. First was related to the implementation of Road Construction Programme on the national network for the years 2011-2015 (valued at approx. 20 bln EUR), which was the first such assessment in the sector. The experienced gained was used for the preparation if the relevant SEA for the whole Transport Sector Strategy, which the key document regulating the government transport policy in the medium and long term (one of the nine main national strategies in Poland). In both cases consultants had not only to produce SEA document but also together with the Ministry to start a public debate and consult the document with the public, which results had to be introduced into the final version of the document. Other two components were introduced: ï‚· large training component – specialised trainings for the staff responsible for the land infrastructure over 1000 Ministry employees were trained in four main defined areas. ï‚· audit – according with the WB Guidelines and Policies. Conclusions The concept for this component was since beginning was very wide-spread. It had to encompass all various actions undertaken at the level of the Ministry responsible for the land transport sector supervision and also strategy and programming actor for the development of the whole sector. The Bank took an active role in supporting the efforts of the Ministry to pursue an important task to codify and structure the actions into medium and long term comprehensive action plan summarised by the creation of Transport Sector Strategy. The work on the Intelligent Transport Systems was considered when establishing a strategy framework for the country as an important element, which placed in the Transport Sector Strategy, had also many applications in the Innovative Economy and Human Capital Strategies. Although enduring difficulties in 41 achieving primary goals, and taking into account a very labile environment, the results were used for the strategies preparations, road administration projects implementation and further developments of scientific transport institutes. The Inland Transport Strategy, even if distant functionally for the road sector, has been a very crucial supplement of the sector development. First of all it has for the first time presented the advantages and costs that the sector will face in reducing huge backlog for all the actors actively involved in the preparation of this strategy. Second of all, the results of such report made the transport sector strategy a fully comprehensive document which included all modes of transport, making more reliable the provisions for the development scenarios of the transport sector as a whole, adequately addressing the issue of interoperability, intermodality and innovativeness of the sector. The third main area was preparation of Strategic Environment Assessments (SEA), prepared for very complex programmes and sectoral strategies. The scale of the road construction programme and different aspects and issues in preparation and execution of large infrastructure projects made an excellent opportunity to implement in practise the relevant environmental and social policies. IV. Indicators Several performance indicators were agreed and set as to measure the effectiveness of the introduced components of the Loan. The fixed parameters can be categorised into three groups: ï‚· physical parameters, related to the actions performed on the national roads network, ï‚· road safety parameters, ï‚· organizational parameters, resulting from the implemented Modernisation Action Plan mainly in the road administration. Indicators Basic value (2005) Final value Share of roads in good condition 49% 62% Length of network in the standard of 11,5 t/axle 2 191 3 500 Public survey Survey by GDDKiA Improvement of each year public opinion each year (in comparison with the previous year) Improvement in road safety (number of 5 444 < 4 400 fatalities/year) Improvement in road safety (number of 3,20 <2,30 fatalities/10,000 vehicles) GDDKiA Modernisation Action Plan Satisfactory MAP completed implementation of MAP Utilization of HDM-4 system by GDDKiA Yes (old database)Yes (updated database) Table 3: Quality and road safety monitoring indicators The main assumption for introducing the whole package of the Road Maintenance and Rehabilitation Project was the cumulative experience of the World Bank with regard to the previous Bank‘s 42 interventions like the First and Second Roads Project. Bank was always one of the main advocates for the balanced road policy and the emphasis on the management of the existing assets. Unfortunately, the situation of national roads in Poland was for the decade preceding the Project introduction far from positive. Restricted access to the budgetary funds and priority given to the investments and development of the motorway network development, have seriously worsened the status of the existing network. Based on pavement assessment system (SOSN – itself developed with WB assistance), the ratio of roads in good condition was around 30%. In the beginning of the Project the percentage of roads has already raised to 40% due to large motorway investments (i.a. A4 motorway) and implementation of previous WB Projects. The Polish government has invited WB and European Investment Bank to cofinance a rehabilitation improvement programme at unprecedented scale of 1 bln EUR: Pavement Condition of National Roads (%) 2003 2004 2005 2006 2007 2008 2009 2010 Good 40,1 45,5 48,9 53,2 54,9 53,6 59,6 59,1 Unsatisfactory 30,3 28,7 26,2 23,4 22,6 25,1 21,5 22,0 Bad 29,6 25,8 24,9 23,4 22,5 21,3 18,9 18,9 Table 4: Pavement improvement indicators in the years 2003-2010 By the end of 2010 assumed rate of 62% of roads in good condition has been nearly achieved (59.1%). It is a result of insufficient resources for repairs of the road network. Despite the development of road network action plan for 2011-2013 by the GDDKiA – the maintenance programme doesn‘t have a secured financing. Funds available in the 2011 state budget represent 10.3% of the needs, while funds projected for 2012 will constitute 10% of needs identified by the GDDKiA. Another important aspect of the Project was the improvement of the road safety parameters. Investment implementation followed WB agreed standards to adequately measure achieved outputs compared to allocated expenditures. Large variation of sot measures and actions were introduced to raise drivers‘ awareness and create incentives for safer behaviour both be GDDKiA in the Technical Assistance Component ad NRSC in the Road Safety Components. Data available on national roads indicate that in 2010 the fatalities number dropped by 27.9% and number of accidents by over 20%. When looking at number of lives saved it results in 500 lives saved each year of the Project implementation, when looking for the economics perspectives it brought serious benefits and savings to the national budget. Surveys were a partial success where during Project implementation, especially in the midterm there was no continuation in the public surveys performed by GDDKiA. This may be explained by the implementation of the new information policy of GDDKiA and important organisational shift within the unit organisation. After new structures were uniformised and set in place, the surveys were integrated in the policy making process of the road administration and will be performed regularly to support the actions delivered by GDDKiA and assessing feedback from the public opinion. The results presented in the surveys showed a constant improvement of the public awareness of the road issues implementation and the effort put during last years in network improvements and especially development was much welcomed by the public. There is still much to do in raising public awareness with respect to the driving culture and road safety aspects. As presented in the report the Modernisation Action plan was a complex programme for the modernisation of the road administration, driven by the report prepared by the consultant on the current GDDKiA status in the RMR I Project (Finnroad). In such context all the Technical Assistance components that were implemented in all RMR Project with respect to the road administration were contributing to the final observations that were presented in detail in the relevant report chapter. The overall conclusions can be summarised as follows: ï‚· The final implementation results differ from the action plan set at the beginning. The process of putting into place all elements of the strategy apparently was more complex than it was 43 expected at the beginning. Also, worth to notice were organisational changes of the management that also introduced changes into the overall action plan execution ï‚· The road administration has put much effort in standardising all organisation in the Headquarters and branches, introducing gradually one information policy and structure, backed by the implemented IT components. ï‚· Even if in some aspects, much delay can be observed in the components execution (especially SAP), the overall process is somehow continued. The road administration adapted to the new situation, redesigned the assumptions for the IT strategy implementation and is willing to continue the efforts in achieving the goals presented at the beginning of the Project. Some components that were not implemented with WB contribution will be afterwards executed with budget and EU funds support. ï‚· GDDKiA is still facing the reorganisation of the core business functions that is management of the road assets. It must be underlined that GDDKiA has a clear picture and assessment of the situation and is gradually implementing new components to the road management, especially during last two years of implementation. ï‚· Much effort must be also put in the support and continuation of the already implemented new policies and instruments. Especially much emphasis must be put due to the important staff rotation to the trainings of new employees (esp. ERP and HDM-4). V. Summary The cooperation with the World Bank shall be judged as satisfactory. It must be underlined, that with respect to the implementation of relevant components, EB has always supported the implementing units with the relevant knowledge, has assisted in the preparation of various complex Terms of Reference. Republic of Poland must with satisfaction admit that WB has never refused any request for assistance from the beneficiaries. In the context of high complexity of some technical and IT components, the beneficiaries themselves turned and asked Bank staff to assist and support them in the preparation of the documentation and addressing some urgent issues arising during the work on such components. Together with Coordination Unit, the overall management of the Project was maintained with the overall goal to provide the possible maximum realisation of the assumed outcomes and parameters. The Project has considerably reduced the backlog in implementation, has considerably increased the value of road assets managed by GDDKiA and help in modernising structure and organisation of the transport sector programming and investment management, streamlined the policy dialogue with the users and public opinion. It has indirectly contributed to a better absorption of funds allocated not to maintenance but also EU grants contribution for national programme investments. The cooperation was especially well acknowledged in the maintenance tasks implementation. GDDKiA and contractors recognised that even if procedures were different than local ones, they were equally affordable to implement in practise. It has helped to strengthen the market of contractors, especially these implementing smaller maintenance schemes, who are mainly smaller and medium companies which are domestically owned. By introducing new road safety facilities in the commissioned contracts, it has increased the security of all road-users. What is very important to say, the WB has flexibly approached and considered utilisation of the procurement procedures, putting often emphasis other different thresholds and parameters than only price which is a common practise in Poland, both when contracting works and intellectual services. For works, usage of local procurement rules has shown the openness of the Bank to rely on national standards and regulations if they comply with the overall procedures, policies and guidelines. It has allowed GDDKiA to rapidly procure and realise large rehabilitation yearly programmes with short term contracts and quickly visible results. In technical assistance, where the situation is Bank has maintained its procedures, intellectual scale, the situation was more complex. The beneficiaries that implemented the Projects, presented mixed judgements and opinions. In the conclusions and opinions provided to the Coordinating Unit, some 44 admitted they were reluctant to use the WB procurement procedures for goods or consultants, other important share of beneficiaries observed important benefits from the WB rules utilisation. Based on collected opinions, it can be considered that the presented options are mainly driven by: ï‚· specificity of the Project implemented, ï‚· internal organisational culture of relevant units, ï‚· WB procurement procedures acquaintance. It must be observed that during the implementation of the Project, an important part of beneficiaries faced a constant staff rotation, where the people that were familiarised with WB procedures, were replaced by new employees. Thus, much emphasis was put by the Coordinating Unit and supported by the WB staff on training and transmitting knowledge to the beneficiaries. Depending on the beneficiary top management support and presented opinion, the implementation of components by the beneficiaries much differed. It must be also added with respect to the intellectual services that in the local, national procurement legislation there are no specific provisions for using other parameters than price. Even if there is no limitation in using other parameters, the actual practise in implementing units of using quality indicators in procurement is rather weak and is influenced especially by the control authorities proceedings that are preferring the simplest solution as the easiest to be assessed and monitored by them. 45 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders EIB provided a parallel loan. EIB‘s comments on the implementation of the components of the Project are as follows: Component 1: Road maintenance component. This component was most successful with some 6% of the national network rehabilitated. It would be useful to receive a listing of the roads rehabilitated to see which ones were done amounting to 218 contracts. This would help EIB in its internal accounting. The EIB concurs with the World Bank in the efficiency of the GDDKiA as an implementing agency but also noted the problems surrounding the PMMR pilot. Component 2: MIS system. EIB noted this component was partially successful. The EIB has benefited from the implementation of the HDM model but there have been some difficulties in its continued implementation. Component 3: Road safety. EIB noted the success in implementing this component. The EIB has also been involved, primarily in the engineering aspects of road safety. It funded several "black spot" elimination road upgrades. In the construction of motorways which involves EIB, Road Safety Audits are mandatory. The EIB has had some issues with personnel changes in the National Road Safety Council and the timely implementation of some of EIB‘s safety components on projects. Component 4: Technical assistance. The EIB noted the difficulties surrounding the ITS element of the component. One aspect that the EIB has been struggling with, but with some success, has been reporting requirements on projects. After extending some technical assistance, the project reporting is now being done in-house. However the economic analysis area still needs more resources for capacity building. 46 Annex 9. List of Supporting Documents 1. Aide Memoires, Back-to-Office Reports, and Implementation Status Reports 2. Project Appraisal Documents (Nos. 27577 POL, 31324 POL and 35324-PL) 3. Loan Agreement (Loan Number 7384 POL) 4. Implementation Completion and Results Reports (ICR0000540, ICR 0000541) 5. Consultant Evaluation Report, Technical Audit of Third Road Maintenance and Rehabilitation Project, April 15, 2010 6. Procurement Post Review, Supervision Mission Report, March 2009 7. Country Partnership Strategy for 2009-2012 Progress Report May 2011 (No. 61315-PL) 8. Poland: Transport Policy Note – Towards a Sustainable Land Transport Sector, February 2011 (No 59715-PL) 9. Restructuring Paper July 2011 (No. 63638-PL) 10. Procurement Plan August 15, 2011 47 Annex 10. Summary of Consultant’s Recommendation in May 2005 Management Process GDDKIA reorganization and management ï‚· The GDDKiA’s mission statement and strategic directions ï‚· Reorganization of the GDDKiA and its Headquarters ï‚· Articulation of the road sector policies and performance indicators, including Performance Agreements for the GDDKiA and its Regional Offices Core Processes that Run through the Organization Planning and programming ï‚· Functional classification of the road system ï‚· Restructuring the planning process to establish annual planning cycle ï‚· Land Acquisition Procurement ï‚· Revision of the Project preparation process ï‚· Review the procurement law and identification of new procurement methods ï‚· Simplification of tender documents Customer services ï‚· Definition of GDDKiA outputs ï‚· Development of citizen participation process in the GDDKiA Human resources ï‚· Graded job descriptions with (increased) salary structure ï‚· Professional development and training program to support key persons ï‚· Review staff resources with a view to outputs and services intended Support Processes Located at the Headquarters Financing and financial management ï‚· Managerial autonomy of the GDDKiA ï‚· Eligibility of expenditures for disbursement from all financing sources ï‚· Allocation and control of funds from different financing sources Information management and data services ï‚· Institutionalization of risk management ï‚· Management information system and data services to support decision-making and monitoring 48 14 16 18 20 22 24 RUSSIAN POLAND Baltic Sea FEDERATION LITHUANIA Slupsk 6 Gulf of Gdansk THIRD ROAD POMORSKIE Gdansk 54 MAINTENANCE AND 11 21 7 65 Koszalin REHABILITATION 22 Elblag Suwalki 54 54 51 57 25 16 3 6 22 55 7 WARMINSKO- MAZURSKIE 59 63 I I I I I I PROJECT I I I I I . 25 I 57 R ZACHODNIOPOMORSKIE 16 59 Vistula 51 Olsztyn 58 8 EXISTING MOTORWAYS AND 10 20 7 53 EXPRESSWAYS 58 63 65 Szczecin 25 10 6 NATIONAL ROADS KUJAWSKO- 10 56 53 PODLASKIE POMORSKIE Lomza Bialystok 3 22 Pila Bydgoszcz 15 64 8 65 SELECTED CITIES AND TOWNS R. 10 57 63 26 ˆ Notec R. Torun 7 Ostroleka NATIONAL CAPITAL rew O Ciechanow R. dr 31 5 25 Narew Na a 23 11 15 PROVINCE (VOIVODSHIP) R. Gorzow Wa 1 10 60 61 8 66 Wielkopolski rta 67 BOUNDARIES R. 50 Wloclawek 66 22 24 62 10 MAZOWIECKIE 50 63 INTERNATIONAL BOUNDARIES 31 2 62 Plock 62 3 5 7 LUBUSKIE Bug R. BELARUS Y 50 62 Poznan 15 Vis 61 tu la R Warsaw N . 29 32 WIELKOPOLSKIE Konin 2 2 (Warszawa) 2 Siedlce 19 Odra R. 60 2 A 17 2 52 52 32 8 Zielona 50 Biala M Gora Lezsno 11 50 76 I I I IPodlaska I 27 3 LÓDZKIE Skierniewice 17 63 I I 15 Kalisz 72 I63 R 79 I Lodz Vi 18 83 tu I I I Ne 36 la s is 12 R. I I I I I E 48 3 Sieradz 12 14 8 ie prz R. 17 W se 36 48 Radom R. G 25 14 DOLNOSLASKIE 82 I I I I I I I Piotrkow Warta R. 36 12 4 45 8 1 Tr ybunalski 8 7 Lublin Legnica 79 12 39 LUBELSKIE I I 30 Jelenia 3 Wroclaw 41 42 Chelm 42 19 17 Gora 5 42 74 3 35 Od 43 91 34 ra Kielce 5 Zamosc 0 25 50 75 Kilometers Walbrzych R. 45 74 Opole Czestochowa 79 SWIETOKRZYSKIE 74 46 46 SLASKIE 78 Tarnobrzeg 17 0 25 50 75 Miles . aR OPOLSKIE 78 tul Vis 77 33 40 7 Katowice 9 19 NORWAY ESTONIA Sa 94 SWEDEN RUSSIAN C Z E C H n 73 FEDERATION 78 Rzeszow LATVIA R. 79 50 50 R E P U B L I C 1 75 Tarnow North Sea DENMARK Baltic Sea PODKARPACKIE 4 LITHUANIA 44 Krakow RUSSIAN 73 Przemysl FED. 52 Bielsko- MALOPOLSKIE Krosno BELARUS 75 77 Biala 28 UKRAINE This map was produced by the Map Design Unit of The World Bank. Nowy Sacz Warsaw 69 28 The boundaries, colors, denominations and any other information POLAND 47 87 75 GERMANY shown on this map do not imply, on the part of The World Bank IBRD 34634 Group, any judgment on the legal status of any territory, or any 84 UKRAINE 49 endorsement or acceptance of such boundaries. CZECH APRIL 2006 REP. SLOVAK AUSTRIA REP. M LIECHT. O LD S L O VA K REPUBLIC OV 16 18 20 22 AUSTRIA HUNGARY ROMANIA SWITZ. A