FOR OFFICIAL USE ONLY Report No: RES36680 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT RESTRUCTURING PAPER ON A PROPOSED PROGRAM RESTRUCTURING OF ROAD REHABILITATION AND MAINTENANCE PROGRAM APPROVED ON NOVEMBER 13, 2012 TO THE ORIENTAL REPUBLIC OF URUGUAY Transport Global Practice Latin America And Caribbean Region Regional Vice President: Axel van Trotsenburg Country Director: Jordan Z. Schwartz The World Bank Road Rehabilitation and Maintenance Program (P125803) Senior Global Practice Director: Guangzhe Chen Practice Manager: Juan Gaviria Task Team Leader(s): Gregoire F. Gauthier The World Bank Road Rehabilitation and Maintenance Program (P125803) ABBREVIATIONS AND ACRONYMS DLI Disbursement-Linked Indicator DLR Disbursement-Linked Result The World Bank Road Rehabilitation and Maintenance Program (P125803) DATA SHEET (Road Rehabilitation and Maintenance Program - P125803) BASIC DATA Project ID Financing Instrument IPF Component Program-for-Results Financing No Approval Date Current Closing Date 13-Nov-2012 30-Jun-2020 Organizations Borrower Responsible Agency Ministry of Economy and Finances (MEF) Ministry of Transport and Public Works Program Development Objective(s) To improve the condition of the Uruguay National Road network and enhance road sector management. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Approval Effectiveness Closing Ln/Cr/TF Signing Date Commitment Disbursed Undisbursed Date Date Date 24-Mar- IBRD-87330 06-Jul-2017 24-Oct-2017 30-Jun-2020 70.00 22.89 47.11 2017 13-Nov- IBRD-82050 11-Dec-2012 16-Apr-2013 30-Jun-2020 66.00 64.45 1.55 2012 Policy Waiver(s) Does the Program require any waivers of Bank policies applicable to Program-for-Results operations? No Page 1 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) I. PROGRAM STATUS AND RATIONALE FOR RESTRUCTURING 1. The Uruguay Road Rehabilitation and Maintenance Program is co-financed by two IBRD loans: (i) loan 8205-UY, in the amount of US$66 million, approved on November13, 2012; and (ii) loan 8733-UY, additional financing loan, in the amount of US$70 million, approved on March 24, 2017. 2. Under the parent project (loan 8205-UY), all Disbursement-Linked Indicators (DLIs) targets were reached, and related DLIs were fully disbursed, except for DLI-2. DLI-2 is defined as “Number of km of the Uruguay national Road network maintained through performance-based contracts”. The total disbursement amount associated to DLI-2 was US$30 million: US$10 million for Disbursement-Linked Results expected to be achieved in 2013, 2014 and 2015. Actually, the Program failed to fully reach established target values for all three years and, therefore, part of the loan proceeds allocated to DLI-2 were not disbursed: 2013 - DLR 2.1 2014 - DLR 2.2 2015 - DLR 2.3 Target 3,200.00 km 3,250.00 km 3,300.00 km Achieved 3,189.92 km 3,052.02 km 3,000.00 km Allocation $10,000,000 $10,000,000 $10,000,000 Disbursed $9,968,500 $9,391,384 $9,090,909 3. As a result, on September 19th 2018, the Minister of Economy and Finance requested the World Bank to cancel the undisbursed funds of loan 8205-UY and, subsequently, to close this loan. II. DESCRIPTION OF PROPOSED CHANGES 4. The proposed changes are: (i) to cancel the undisbursed balance of loan 8205-UY: US$1,549,207.00 (representing 2.3% of the 8205-UY loan amount); and (ii) to anticipate the 8205-UY loan closing date from June 30, 2020 to September 30, 2019. I. SUMMARY OF CHANGES Changed Not Changed Change in Loan Closing Date(s) ✔ Change in Cancellations Proposed ✔ Reallocation between and/or Change in DLI ✔ Change in Implementing Agency ✔ Change in Program's Development Objectives ✔ The World Bank Road Rehabilitation and Maintenance Program (P125803) Change in Program Scope ✔ Change in Results Framework ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ II. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/TF Status Closing Date Closing(s) Date Closing Date for Withdrawal Applications 31-Mar-2017, 30- IBRD-82050 Effective 30-Jun-2016 30-Sep-2019 30-Sep-2019 Jun-2020 IBRD-87330 Effective 30-Jun-2020 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS PROPOSED Value Current Cancellation New Reason for Ln/Cr/TF Status Currency Date of Amount Amount Amount Cancellation Cancellation P4R DLI IBRD- Disburs 64,450,793.0 CONDITIONS USD 66,000,000.00 1,549,207.00 24-Sep-2018 82050-001 ing 0 NOT ACHIEVED IBRD- Disburs 70,000,000.0 USD 70,000,000.00 0.00 87330-001 ing 0 OPS_DETAILEDCHANGES_EA_TABLE The World Bank Road Rehabilitation and Maintenance Program (P125803) . The World Bank Road Rehabilitation and Maintenance Program (P125803) ANNEX 1: RESULTS FRAMEWORK . . Results framework Program Development Objectives(s) To improve the condition of the Uruguay National Road network and enhance road sector management. Program Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Uruguay National Road Network condition Percentage of the Uruguay National Road network in good or 40.00 55.00 very good condition (Percentage) 1 - At least 35 percent of the Uruguay National Road Network are Yes Yes in good or very good condition (Yes/No) Road program institutional strengthening 2 - Percentage of Program Action Plan actions completed 0.00 100.00 (cumulative) (Percentage) PDO Table SPACE Page 5 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) Intermediate Results Indicators by Result Areas RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Improving the condition of the Uruguay national road network 1 - Cumulative number of km rehabilitated on the National Road Network, at a minimum rating of 85, as measured by the IES. 0.00 1,414.00 (Kilometers) 2 - Number of km of the National Road Network maintained 0.00 3,000.00 through performance-based contracts. (Kilometers) Improving road network management planning 3 - (DLR 3-1): the multimodal plan for the Montevideo seaport No Yes has been approved (Yes/No) 3 - (DLR 3-2): The catalogue for technical solutions of pavement No Yes rehabilitation has been approved. (Yes/No) Improving Program environmental management 3 - (DLR 3-3): DNV environmental manual has been updated and at least 75% of DNV's technical staff with responsibilities related No Yes toworks supervision has been trained. (Yes/No) Improving the climate-resilience of the Uruguay national road network NEW DLR#3.2: (a) a study to assess which areas of the National Road Network are subject to climatic risks has been completed No Yes (Yes/No) NEW DLR #3.2 (b): at least 20 selected bridges have been 0.00 20.00 diagnosed against climatic risks (Number) NEW DLR#3.2 (c) a contingency plan for catastrophic climate No Yes related events has been developed. (Yes/No) Improving the quality of roadworks supervision Page 6 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target NEW DLR#3.1 (a): MTOP’s central laboratory for roadworks quality assurance has carried out at least 5% of the asphalt, No Yes pavement and soil tests required by the work contracts in execution in calendar y (Yes/No) NEW DLR#3.1 (b): MTOP’s central laboratory for roadworks quality assurance has carried out at least 5% of the asphalt, No Yes pavement and soil tests required by the works contracts in execution in calendar (Yes/No) NEW DLR#3.1 (c): MTOP’s central laboratory for roadworks quality assurance has carried out at least 5% of the asphalt, No Yes pavement and soil tests required by the works contracts in execution in calendar (Yes/No) Improving Program social management 3 - (DLR 3-4): The Guidelines for expropriation and social management processes have been approved and an No Yes international workshop onroadworks social management best practices has been carried out. (Yes/No) IO Table SPACE Page 7 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) Disbursement Linked Indicators Matrix DLI IN00741334 ACTION DLI 11 NEW DLR #3.2 (b): at least 20 selected bridges have been diagnosed against climatic risks Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Number 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 January 1, 2017 - December 31, 20.00 1,000,000.00 2019 DLI IN00741335 ACTION NEW DLR#3.2 (a): a study to assess which areas of the National Road Network are subject to climatic risks has been DLI 10 completed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 1,000,000.00 2019 Page 8 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) DLI IN00741336 ACTION NEW DLR#3.1 (c): MTOP’s central laboratory for roadworks quality assurance has carried out at least 5% of the asphalt, DLI 9 pavement and soil tests required by the works contracts in execution in calendar Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Yes/No 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 1,000,000.00 2019 DLI IN00741337 ACTION NEW DLR#3.1 (b): MTOP’s central laboratory for roadworks quality assurance has carried out at least 5% of the asphalt, DLI 8 pavement and soil tests required by the works contracts in execution in calendar Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Yes/No 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 1,000,000.00 2019 Page 9 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) DLI IN00741338 ACTION DLI 13 NEW DLI#4: Number of km of the National road network that benefitted from road safety improvements Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Kilometers 20,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 January 1, 2017 - December 31, 263.00 20,000,000.00 2019 DLI IN00741339 ACTION NEW DLR#3.1 (a): MTOP’s central laboratory for roadworks quality assurance has carried out at least 5% of the asphalt, DLI 7 pavement and soil tests required by the work contracts in execution in calendar y Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Yes/No 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 1,000,000.00 2019 DLI IN00741340 ACTION DLI 12 NEW DLR#3.2 (c) a contingency plan for catastrophic climate related events has been developed. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Page 10 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) Baseline No January 1, 2017 - December 31, Yes 1,000,000.00 2019 DLI IN00741341 ACTION DLI-1: Cumulative number of km rehabilitated on the National Road Network, at a minimum rating of 85, as measured by DLI 1 the IES. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Kilometers 49,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 January 1, 2017 - December 31, 1,414.00 49,000,000.00 2019 DLI IN00741342 ACTION DLI 2 DLI-2: Number of km of the National Road Network maintained through performance-based contracts. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Kilometers 51,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 January 1, 2017 - December 31, 3,000.00 51,000,000.00 2019 Page 11 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) DLI IN00741343 ACTION DLI 3 DLR 3-1: The multimodal plan for Montevideo seaport land access has been approved. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 2,500,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 2,500,000.00 2019 DLI IN00741344 ACTION DLI 4 DLR 3-2: The catalogue for technical solutions of pavement rehabilitation has been approved. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 2,500,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 2,500,000.00 2019 DLI IN00741345 ACTION DLR 3-3: DNV Environmental Manual has been updated and at least 75% of DNV’s technical staff with responsibilities DLI 5 related to works supervision have been trained under terms of reference acceptab Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Yes/No 2,500,000.00 100.00 Period Value Allocated Amount (USD) Formula Page 12 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) Baseline No January 1, 2017 - December 31, Yes 2,500,000.00 2019 DLI IN00741346 ACTION DLR 3-4: The guidelines for expropriation and social management processes have been approved and an international DLI 6 workshop on best practices for road works social management has been carried out. Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 2,500,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline No January 1, 2017 - December 31, Yes 2,500,000.00 2019 Page 13 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) ANNEX 2: PROGRAM ACTION PLAN . . PAP_NOT_CHANGE_TBL Action Description Source DLI# Responsibility Timing Completion Measurement NEW WITH AF - A. Works Planning Carry out yearly IRI surveys on at least 1/3 of the Uruguay national network. Technical Client Recurrent Yearly Copy of the IRI surveys. NEW WITH AF - B. Works supervision Update of the works supervision manual, based on lessons learned and three years of implementation, and train supervision staff to the new Copy of the updated manual. manual. Technical Client Due Date 31-Dec-2019 Proof of training. NEW WITH AF - C. Road safety Develop road safety audits, covering at least yearly 200 km of the National Road Network, and train DNV staff Copy of the audit reports. accordingly. Technical Client Recurrent Yearly Proof of training. NEW WITH AF - D. Resilience of road infrastructure networks Develop a methodology to analyze climate- sensitive areas of the National Road Network and prepare an engineering designs addressing at least one high- Copy of the methodology. risk situation. Technical Client Due Date 31-Dec-2019 Copy of engineering designs. Page 14 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) NEW WITH AF - E. Procurement Prepare a manual to streamline procurement processes and train relevant people Copy of the updated manual. accordingly. Fiduciary Systems Client Due Date 31-Dec-2019 Proof of training. NEW WITH AF - F. Financial Management: Risk-based audits Continue strengthening MTOP’s Internal Audit Unit (IAU) by supporting the Yearly verification of the implementation of application of the risk matrix in the risk-based the audits carried out by the audit model. Fiduciary Systems Client Recurrent Yearly MTOP. Categorize the National Road Network. Define a new categorization of the National Road Network that matches the Borrower’s current needs in terms of transport. Said categorization should factor in maintenance resources and define the basic characteri Client Due Date 30-Dec-2016 Strengthen analytical capacity transport modeling. Design and implement a National freight transport model to evaluate the Borrower’ s long term requirements in terms of core infrastructure needs. Client Due Date 30-Dec-2016 Page 15 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) Road safety: improve critical points design: Carry out a road safety assessment of at least 3,000 km of key national highway corridors using the IRAP’s Methodology. Client Due Date 30-Dec-2016 Consolidate processes for works supervision. Finalize the roadworks supervision manual, including a section on maintenance contracts and result-based contracts Client Due Date 30-Dec-2016 Improve MTOP’s Internal Audit Unit capacity. Develop MTOP’s internal audit unit capacity on risk-based auditing. Fiduciary Systems Client Due Date 30-Dec-2016 - Reduce bidding processes duration. Carry out a detailed diagnostic of intermediate instances between bid evaluation and contract awa rd, to identify bottlenecks and opportunities to improve efficiency and performance. Client Due Date 30-Dec-2016 Develop environmental audit for works. Carry out an environmental audit every 6 months in selected contracts of the Program. Client Due Date 30-Dec-2016 Page 16 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) Improve complaints and grievance handling mechanism. Establish and implement a citizen attention center, within MTOP, to handle complaints, grievances, questions and suggestions related to Program implementation and MTOP duties. Client Due Date 30-Dec-2016 Strengthen the communication with the civil society. Update MTOP internet portal to include information on road rehabilitation activities under the Program. Client Due Date 30-Dec-2016 NEW WITH AF - G. Financial Management: Training Training in the three lines of defense model with emphasis of enhancing the coordination of said lines of defense within the MTOP. Fiduciary Systems Client Due Date 31-Dec-2019 Proof of training NEW WITH AF - H. Environmental management: environmental audits Implement an environmental audit every 6 Bi-yearly environmental audit months in a reports available for a sample selected contracts Environmental and Social (30%) of the ongoing works of the Program Systems Client Recurrent Yearly contracts. Page 17 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) NEW WITH AF - I. Environmental management: Human resources Recruitment of two permanent professionals (not Consultants), with training and environmental experience (environmental sciences, forestry, biology, etc.) who are both graduates of the Environmental and Social Memo to the Bank and copy of Univer Systems Client Due Date 31-Dec-2019 contracts NEW WITH AF - J. Environmental management: Data management Improve existing remote access, via internet, to the central database Environmental and Social of projects. Systems Client Due Date 31-Dec-2019 Audit report verifying operation. NEW WITH AF - K. Environmental management: Training Conduct 9 workshops, of at least 1 day and with at least 5 DNV and CVU Project Managers, DEGAC staff and other departments, and for relevant workshops, private sector 3 workshops per year. Copy of participation to Environmental and Social training material and attendance address issues Systems Client Due Date 31-Dec-2019 log. NEW WITH AF - L. Environmental management: Webpage Include a window within the DNV website, which Environmental and Social describes the Systems Client Due Date 31-Dec-2019 Direct Bank verification Page 18 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) characteristics of the Program, its progress, and the activities that are implemented for its environmental management. NEW WITH AF - M. Environmental management: Environmental manual Officialization of the current Environmental Manual by the authorities. Review of the Manual factoring in lessons learned from program Environmental and Social Copy of presidential decree. implementation. Systems Client Due Date 31-Dec-2019 Minute of the updated Manual. NEW WITH AF - N. Social management: Human resources Set-up a resolution between DNTop and DGS to provide ad-hoc and part-time support from a social specialist to accompany roadworks as needed. Provide the necessary Copy of the DNTop / DGS training to the Environmental and Social resolution. Proof of training. specialist. Systems Client Due Date 31-Dec-2017 Social specialist annual report. NEW WITH AF - O. Social management: Expropriation manual Integrate into the Expropriation records the traceability of the expropriation process and review, ex-post, Environmental and Social compliance with Systems Client Due Date 31-Dec-2019 Ex-post review reports. Page 19 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) the Expropriation Manual. . Page 20 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) ANNEX 3: UPDATED DISBURSEMENT TABLE Disbursement Linked Indicator Disbursement Linked Result Amount of the Loan Allocated (expressed in USD) (1) First DLI: Cumulative number of kilometers of the National Road Network DLR#1: Each kilometer $26,000,000, of which rehabilitated at a minimum rating of $49,620 for each DLR 85, as measured by the IES for the first Loan withdrawal under this Category; and at least 50 additional kilometers rehabilitated on the terms stipulated herein in respect of each subsequent Loan withdrawal. (2) Second DLI: Number of kilometers of the National Road Network maintained through DLR#2.1: at least 3,200 km in DLR#2.1: $ 9,968,500 Performance-based Contracts. calendar year 2013. DLR#2.2: at least 3,250 km (in the aggregate from a baseline of DLR#2.2: $9,391,384 3,200 km) in calendar year 2014. DLR#2.3: at least 3,300 (in the aggregate from a baseline of 3,250 km) km in calendar year 2015 DLR#2.3: 9,090,909 Page 21 of 22 The World Bank Road Rehabilitation and Maintenance Program (P125803) (3) Third DLI 3.1 Strengthen the Borrower’s 3.1: The multimodal plan for DLR# 3.1: $2,500,000 capacity in multimodal transport Montevideo seaport land access planning through the approval of has been approved. appropriate instruments. 3.2 Improve the design of the Borrower’s pavement rehabilitation 3.2 The catalogue for technical works. solutions of pavement DLR# 3.2: $2,500,000 rehabilitation has been approved. 3.3: DNV Environmental Manual 3.3 Increase the Borrower’s has been updated and at least 75% environmental supervision efficiency of DNV’s technical staff with DLR# 3.3: $2,500,000 on road rehabilitation and responsibilities related to works maintenance works. supervision have been trained under terms of reference acceptable to the Bank, including a training on the description of the features of the updated DNV Environmental Manual. 3.4: The guidelines for expropriation and social management processes have been approved and an international 3.4 Consolidate expropriation and workshop on best practices for social management processes related road works social management to civil works on the National Road has been carried out. DLR# 3.4: $2,500,000 Network. DLR#2.1: $31,500 Cancellation effective as of September 24, 2018 DLR#2.2: $608,616 DLR#2.3: $909,091 TOTAL AMOUNT $66,000,000 Note: DLRs in the second column are initial target values. Amounts in the third column show allocated amounts based on actual DLI values. Page 22 of 22