morocco - second national rural roads programme – pnrr2

AFRICAN DEVELOPMENT BANK

MOROCCO

SECOND NATIONAL RURAL ROADS PROGRAMME (PNRR2)

PROJECT COMPLETION REPORT (PCR)

OITC

April 2013

Acronyms and Abbreviations AFD = French Development Agency ADB = African Development Bank EIB = European Investment Bank IDB = Islamic Development Bank WB = World Bank CFR = Road Financing Fund

CNER = National Centre for Studies and Research TD = Tender Documents

DH = Dirham DPET = Provincial Equipment and Transport Department DRET = Regional Equipment and Transport Department DR = Directorate of Roads

DRT = Directorate of Road Transport

AFESD = Arab Fund for Economic and Social Development PEAS = Preliminary Environmental Assessment Sheet KFAED = Kuwaiti Fund for Arab Economic Development SRF = Special Road Fund ADI = Accessibility Differential Index GIF = General Inspectorate of Finance NRRAI = National Rural Roads Accessibility Index INDH = National Human Development Initiative JBIC = Japanese Bank for Investment and Cooperation MAD = Dirham MET = Ministry of Equipment and Transport EIM = Environmental Instructions Manual EW = Engineering works/structures ONCF = National Railway Authority

ONDA = National Airports Authority ONT = National Transport Authority OPEC = Organization of Petroleum Exporting Countries ESDP = Economic and Social Development Plan ESMP = Environmental and Social Management Plan PNRR = National Rural Roads Program (Programme TSRP = Transport Sector Reform Program TSP = Transport Sector Program GNP = Gross National Product TIC = National Petroleum Products Tax (Fuel AADT = Annual Average Daily Traffic ERR = Economic Rate of Return EU = European Union UA = ADB Unit of Account UGP = National Rural Roads Program Management Unit

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PROJECT COMPLETION REPORT P-MA-DB0-004

A. PROJECT DATA AND KEY DATES

I. BASIC INFORMATION

Project Number: P-MA-DB0-004

Project Name: 2nd

National Rural Roads Program (PNRR2)

Country: Kingdom of Morocco

Lending Instrument(s): Lending Agreement No. 2000130002380

Sector: Transport

Environmental Classification: Category II

Initial Commitment Amount: Euros 45 million

Amount Cancelled: 0 Amount Disbursed: Euro 45 million

Disbursed: 100 %

Borrower: Government of Morocco, Road Financing Fund (RFF)

Executing Agency: Ministry of Equipment and Transport, Roads Directorate

Co financers and Other External Partners: Government of Morocco, EIB, ADF, AFESD, OPEC, JBIC

II. KEY DATES

Conception Note Cleared by Ops Com..: NA

Appraisal Report Cleared by Ops Com..: NA

Cleared by Board of Governors: 5 September 2007

Restructuring(s): N.A

Original Date Actual Date Difference in Months

Original effective-date

DATE OF SIGNATURE 23 November 2007

EFFECTIVENESS - 8 March 2008 -

MID-TERM REVIEW NA NA N.A.

CLOSING 31/12/2013 31 December 2013

III. RATINGS SUMMARY

CRITERIA SUB-CRITERIA RATING

PROJECT OUTCOME

Achievement of Outputs 3

Achievement of Outcomes 4

Timeliness 4

OVERALL PROJECT OUTCOME 4

BANK PERFORMANCE

Design and Readiness 4

Supervision 3

OVERALL BANK PERFORMANCE 4

BORROWER PERFORMANCE


Implementation 3

OVERALL BORROWER PERFORMANCE 4

IV. BANK STAFF RESPONSIBLE

FUNCTION AT APPROVAL AT COMPLETION

Regional Director L.B.S. CHAKROUN M.N. MATONDO-FUNDANI

Sector Director G. MBESHERUBUSA A. OUMAROU

Sector Director Manager J. RWAMABUGA A. OUMAROU

Task Manager A. BENDJEBBOUR P. MORE NDONG

PCR Team Leader P. MORE NDONG

PCR Team Members A. RMILI, RFF and UGP

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B. PROJECT CONTEXT

Summarize the rationale for Bank assistance. State:

- what development challenge the project addresses; - Bank activities in this country and sector over the past year and how they performed; and - On-going Bank and other externally financed activities that complement overlap with or

relate to this project. Please cite relevant sources. Comment on the strength and coherence of the rationale. [300 words maximum. Any additional narrative about the project’s origins and history, if needed, must be placed in Appendix 6: Project Narrative ]

(i) The Government of Morocco’ 2020 economic and social development strategy aims at improving f the rural

populations’ living conditions by raising basic infrastructure and social service access rates. The population

concerned represents nearly 66% of Morocco’s poor, living in remote areas without road networks.

(ii) The transport sector plays a central role and contributes to: (a) accessibility of rural areas, (b) regional

balance, (c) job creation, (d) health improvement, and education for all.

(iii) In 1995, the Government launched the First National Rural Roads Program that was completed in 2005,

raising the access rate from 43% in 1995 to 54% in 2005. To strengthen its action, a second program

concerning 15500 km of rural roads was launched in 2005 for completion in 2012.

(vi) Previous Bank intervention in Morocco’s, transport sector, consisted of a loan approved in October 1987 to

finance the Transport Sector Program (TSP) concerning three modes of transport (land, air and sea) and

upgrade and strengthen the sector. The Bank intervened in the road sub-sector, mainly through the Third

Road project in 1994 and the construction of the Marrakech-Agadir motorway in 2006. The implementation of

the proposed Third Road Project was delayed due to procurement difficulties that were overcome by the

Bank’s sustained supervisory missions, fielded to enable the executing agency familiarize itself with the Bank’s

rules and procedures. In addition, the Agadir- Marrakech motorway project was completed to the satisfaction

of the Borrower and the Bank;

(vii) The Bank, given the success in the implementation of previous projects, has been invited to participate in the financing of the Second National Rural Roads program consistent with its 2007-2011 strategy for Morocco’s transport sector, which is based on two pillars: (a) increasing economic growth and improving the investment climate, and (b) promoting human development by reducing social deficits with the ultimate goal of poverty reduction and exclusion.

(vi) Other donors involved in financing the Second National Rural Roads Programme are the World Bank, the

European Investment Bank, the Hassan II Fund for Economic and Social Development, the French

Development Agency, the Italian Government, the Islamic Development Bank (IDB), the Arab Fund for

Economic and Social Development (AFESD), the Kuwait Fund for Economic Development (KFAED), the

OPEC Fund for International Development, the Japanese Bank for Investment and Cooperation (JBIC), and

the European Commission.

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C. PROJECT OBJECTIVES AND LOGICAL FRAMEWORK

1. State the Project Development Objective(s) (as set out in the appraisal report)

The project sector objective is the upgrading of road infrastructure to reduce rural poverty and regional disparities. Its specific objectives are to contribute to improving rural population access and accessibility in the 23 provinces concerned, improving transport provision and helping to reduce the disparities in rural services noted between provinces.

2. Describe the main project components and indicate how each will contribute to achieving the Project Development Objectives

Component A: Construction of 460 km of paved roads and related works.

Component B: Construction of 226 km of tracks.

Components A and B have helped improve transport supply and access to basic services for rural populations, reduced the disparity between provinces and contributed to poverty reduction.

Component C:Works coordination and control/inspection and project auditing

This component includes geotechnical control of all works and of the quality of materials used, to ensure sound project execution, in accordance with the recognized standards for the different works categories, and effectively meet its objectives.

3. Provide a brief assessment (up to two sentences) of the project objectives along the following dimensions: Insert a working score, using the scoring scale provided in Appendix 1.

PROJECT OBJECTIVES DIMENSION ASSESSMENT WORKING SCORE

RELEVANT a) Relevant to the country’s development priorities

The project is part of the Government’s Economic and Social Development Program (ESDP) up to 2020. It aims at curbing poverty especially in rural areas by improving access to basic and social services.

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ACHIEVABLE

b) Objectives could in principle be achieved with project inputs and in the expected timeframe.

The project objectives as defined in the appraisal report are achievable within the original timeframe, given the Bank’s and Morocco’s experience in the sector, as well as recent works undertaken in the country.

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CONSISTENT

c) Consistent with the Bank’s country or regional strategy

The project's objectives are consistent with the Bank's strategy in Morocco aimed at promoting human development by reducing social deficits, to guarantee the reduction of poverty and exclusion.

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d) Consistent with Bank’s overall priorities

The project is consistent with the Bank's transport infrastructure intervention priorities, particularly human development promotion through the reduction of social deficits, poverty and exclusion.

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4. Summarize the log. frame. If a log. frame does not exist, complete the table below. Indicate the overall project development objective, the major components of the project, the major activities of each component and the expected outputs, outcomes, and indicators for measuring the achievement of outcomes. Add additional rows for components, activities, outputs or outcomes, if needed.

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The table below establishes the link between the project’s objectives, activities, outputs and outcomes and provides indicators for measuring the expected outcomes.

The log. frame constituted at appraisal and at completion is given below.

PROJECT LOG FRAME

HIERARCHY OF OBJECTIVES

PERFORMANCE INDICATORS

OBJECTIVELY VERIFIABLE

INDICATORS AT APPRAISAL

OBJECTIVELY VERIFIABLE INDICATORS AT

COMPLETION

1- SECTOR GOAL

1. Contribute to rural poverty reduction by bringing the rural population out of isolation;

2. Contribute to regional imbalance reduction

1 Rural poverty 2 Agricultural production 3 Rural education Sources: National income surveys and populations’ living environment. Accidents statistics –Ministry of Labour and Health reports–international institutions’ reports Methods: Surveys, studies and reports

1 Rural poverty reduction

by 30% in 2015 (that is 0.5 million of the rural population)

2 Income increase from MAD 2000 in 2005 to MAD 3000 in 2015;

3 General enrolment increased in rural areas from a 56% average in 2005 to 70% in 2012.

1. In 2010, the rural poor

made up 14.5% of the population

2. 39% household income increase between 2005 and 2010 (from MAD 2000 to MAD 2919)

3.Girls’ enrollment increased in rural areas by 83% between 2005 and 2012

2- PROJECT OBJECTIVE 1 Contribute to the rural populations’ access and accessibility in the 23 project provinces 2 Improve transport provision and reduce rural road disparities between provinces

1- Populations’ access

to all-weather road 2- Regional Disparities 3- Girls’ enrolment rate 4- Employment

Sources : Statistics, surveys and reports of DRE/DPE different ministries (transport, labour, social affairs, education,…) and international institutions Methods: PNRR2 Monitoring and Evaluation System, surveys and studies

1- Increased

accessibility rate: Rural Roads National Accessibility Index (RRNAI) increases from 54% in 2005 to 60% in 2007 and 67% in 2010;

2- Disparity reduction between provinces: Accessibility Differential Index (ADI) increases from 0.5 in 2005 to 0.6 in 2008 and 0.65 in 2010;

3- Transport supply increased in terms of: (i) 50%.transport time reduction in 2008 and 75% in 2010 and, (ii) transport cost reduction for travellers and agricultural products by 30% in 2008 and 50% in 2010;

4- Overall rural enrolment increase: for girls from 44% in 2005 to 65% in 2010 and for boys from 68% in 2005 to72% in 2010;

5- +14% employment growth and diversification in 2010

1. Accessibility rate:

2008: 65% 2010: 70.1%

2. ADI : 2007: 0.51 2010:0.56

3. Transport time reduction of 23% and transport cost reduction of 45% for travellers and 42% for goods between 2005 and 2012, revealed by an impact study on 13 road samples carried out in the context of PNRR2

4. 11% increase in overall enrolment rate and 83% for girls’ enrolment between 2005 and 2012

5. Employment growth of 1.4% in 2010 and 2.7% in 2011

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ACTIVITIES/INPUTS 1. Preparation of bidding

documents for works and geotechnical control

2. Procurement

3. Paved roads construction

4. Earth track construction

5. Geotechnical works monitoring

6. Acquisition and installation of signalling equipment

7. Related works (travellers’ shelters, water points, schools’ security installations)

8. Rural road design guide update and putting in place of regular monitoring of PNRR2 and rural roads system

9. Technical and financial audit contract service procurement

1. Length of paved roads

constructed 2. Length of tracks

constructed 3. Number of bus stops

(shelters) 4. Number of water points

developed 5. Number of signs put up 6. Design guide 7. Morocco’s rural road

monitoring system 8. Project-created jobs 9. Contracts won by

Moroccan enterprises 10. Annual audit Sources: Executing agency’s quarterly reports – works acceptance reports – NGOs and Associations’ progress reports. Bank’s technical and financial supervision reports. Audit reports. Construction and geotechnical control contracts. Method: survey, studies, reports, signed contracts

1. 460 km of paved

roads constructed 2. 226 km of tracks

constructed 3. 30 bus shelters

constructed 4. 16 water points

developed 5. 580 signs put up 6. New rural roads design guide updated and adapted to Morocco 7. system for real-time monitoring of the state of rural roads 8. 2000 jobs created during the PNRR2 works 9. 104 works and inspection contracts signed 10. Audit contract signed

1. Constructed paved roads:

346.5 km 2. Tracks constructed :

272 km

3. Constructed bus shelters: 0

4. Water points constructed: 0

5. Panels installed: 0 6. New rural roads guide

designed, updated and adapted

7. Ongoing study on system for real-time monitoring of state of rural roads

8. Project -created jobs: 2380

9. Works and inspection contracts signed

10. Audit contracts signed: 2

5. For each dimension of the log. frame, provide a brief assessment (up to two sentences) of the extent to which the log. frame achieved the following. Insert a working score, using the scoring scale provided in Appendix 1. If no log. frame exists, score this section as a 1 (one).

LOG. FRAME DIMENSIONS ASSESSMENT WORKING SCORE

LOGICAL a) provides a logical causal chain for achieving the project development objectives

The activities, outputs and outcomes provided a logical causal chain for achieving the project objective.

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MESURABLE

b) Expresses objectives and outcomes in a way that is measurable and quantifiable.

The log. frame provided measurable and quantifiable indicators for nearly all objectives and outcomes. Nevertheless, employment growth and diversification objectives as well as accessibility differential indicator (ADI) target values were unrealistic.

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THOROUGH c) State risks and key assumptions

Key risks relating to payment of the local authorities’ contributions, the lack of rural road network maintenance and the underestimation of project costs were cited.

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PROJECT P-MA-DB0-004 COMPLETION REPORT

D. OUTPUTS AND OUTCOMES

I. ACHIEVEMENT OF OUTPUTS

In the table below, assess the achievement of actual vs. expected outputs for each major activity. Import the expected outputs from the log. frame in Section C. Score the extent to which the expected outcomes were achieved. Weight the scores by the activities’ approximate share of project costs. Weighted scores are automatically calculated. The overall output score must be calculated as the sum of the weighted scores. Override the calculated score, if desired, and provide justification.

MAJOR ACTIVITIES

WORKING

SCORE

Share of project costs in

percentage (as stated in

the Appraisal Report)

Weighted Score

(Automatically

generated) Expected Outputs

Actual Ouputs

460 km of paved roads constructed Construction of 346.47 km of

paved roads 3 82.2 % 2.5

226 km of tracks of 272.03 km of tracks constructed

4 17.8% 0.7

104 works and inspection contracts signed

Audit contract awarded

85 works and inspection contracts signed

2 audit contracts awarded

4 0% 0.0

30 bus stops (shelters) constructed

16 water points developed

580 signs put up

New design guide updated and adapted to Moroccan context

Real- time monitoring of state of rural roads

2000 PNRR2 jobs created during site phase

Nothing done New design guide updated and adapted to Morocco On-going study on rural road network follow-up system 2380 project jobs created during site phase

0 4 2 4

0% 0.0

OVERALL OUTPUT SCORE [Score is calculated as the sum of weighted scores] 3.2

X Check here to override the calculated score

Provide justification for overriding the calculated score

Insert the new score or re-enter the calculated score 3

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II. ACHIEVEMENT OF OUTCOMES

1. Using available monitoring data, assess the achievement of expected outcomes. Import the expected outcomes from the log. frame in Section C. Score the extent to which the expected outcomes where achieved. The overall outcome score must be calculated as an average of the working scores. Override the calculated score, if desired, and provide justification.

OUTCOMES Working

score Projections Outcomes

Rural road accessibility rate increasing from 54% in 2005 to 60% in 2007 and 67% in 2010

Disparity reduction between provinces: ADI increasing from 0.5 in 2005 to 0.6 in 2008 and 0.65 in 2010;

Accessibility rate increased from 54% in 2005 to 65% in 2008, 67.6% in 2009 and 70.1 % in 2010. ADI increased from 0.5% in 2005 to 0.51% in 2007 and 0. 56% in 2010 (values obtained are realistic and satisfactory given the values targeted for overall completion of PNRR20.6 by 2015)

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Transport supply increase with: (i) transport time reduction of 50% in 2008 and 75% in 2010 and, (ii) transport cost reduction for travellers and agricultural products by 30% in 2008 and 50% in 2010;

The 2010 impact study shows: (i) 23% transport time reduction; and (ii) Transport cost reduction of 45% for

travellers and 42% for goods.

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Overall rural enrolment rate increase: for girls from 44% in 2005 to 65% in 2010 and for boys from 68% in 2005 to72% in 2010;

The impact study on pilot roads shows:

Overall school enrolment increased from 67% before the project to 78% after the project.

Girls’ enrolment increased to 83%

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+14% employment growth and diversification in 2010 Employment growth from 2008 of +1.4% in 2010 and +2.7% in 2011

2

OVERALL OUTCOMES[Score is calculated as the sum of weighted scores] 4

Insert the new score or re-enter the calculated score 4

2. Other Outcomes: Comment on the project’s additional outcomes not captured in the log. frame, including cross-cutting issues (e.g. gender).

According to the 2011 PNRR2 impact study results, the project achievement enabled:

(i) Elimination of traffic flow blockage points on rural roads;

(ii) Improved commercial outlets;

(iii) Better access to health and veterinary services (increase in numbers of sheep by 23.7%, cattle by 45% and goats by 31%);

(iv) Increased value of land in the project area;

(v) 39% increase in household income; and

(vi) 14% drop in the prices of basic commodities (sugar, tea, flour, gas).

3. Risks to sustained achievements of outcomes. State the factors that affect, or could affect, long-term or sustained achievement of project outcomes. Mention if any new activity or institutional change is recommended to help sustain outcomes. The analysis should draw upon the sensitivity analysis in Annex 3, where appropriate.

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Project sustainability depended on the technical and financial capacities of the Roads Directorate and the municipalities to carry out regular, timely routine and periodic maintenance of roads constructed. The budget for classified network maintenance, under the responsibility of the State and specifically the Directorate of Roads, showed an inconsistent trend, as seen in the table below and failed to meet maintenance needs:

Year 2004 2005 2006 2007 2008 2009 2010 2011 2012

Road maintenance (Dh Million)

762 630 652 789 936 1117 1100 900 1000

ES (Reconstruction) 145 130 87 170 140 240 190 250 250

Maintenance total 907 760 739 959 1076 1357 1290 1150 1250

Variation (%) -16% -3% 29.7% 12.2% 26% -5% -11% 8.7%

The unclassified network, in the absence of a specific maintenance budget, is currently under-maintained. In this regard, a tripartite commission representing the Ministry of Equipment and Transport, the Ministry of Finance and the Ministry of the Interior has been set up to brainstorm over sustainable network investments. Its goal is to define the unclassified network intervention strategy, identify funding needs and organize maintenance work completion.


E. PROJECT DESIGN AND READINESS FOR IMPLEMENTATION

1. Indicate the extent to which the Bank and the Borrower ensured the project was commensurate to the Borrower’s capacity to implement by designing the project appropriately and by putting in place the necessary implementation arrangements. Consider all major design aspects, such as extent to which project design took into account lessons learned from previous PCRs in the sector or the country (please cite key PCRs); whether the project was informed by robust analytical work (please cite key documents); how well Bank and Borrower assessed the capacity of the implementing agencies and/or Project Implementation Unit; scope of consultations and partnerships; economic rationale of project; and provisions made for technical assistance. [250 words maximum.] [Any additional narrative about lessons learned should be included in Annex 6: Project Narrative]

The Government funded the technical, economic, environmental and social studies for the project. In February 2007, a Bank mission allowed for effective assessment of the project component and the positive impacts. Documents required for project execution were available before appraisal. Moreover, several donors funded PNRR2 and the executing agency produced model procurement dossiers validated by all the donors, including the Bank. The implementation capacity was properly assessed, in light of the Executing Agency’s experience in previous projects funded by the Bank or the other donors.

2. For each dimension of project design and readiness for implementation, provide a brief assessment (up to two sentences). Insert a working score, using the scoring scale provided in Appendix 1.

PROJECT DESIGN AND READINESS FOR IMPLEMENTATION DIMENSIONS

ASSESSMENT WORKING SCORE

REALISM a) Project complexity is matched with country capacity and political commitment

Considering the nature of works, project implementation did not face technical and management problems.

4

RISK ASSESSMENT AND MITIGATION

b) Project design includes adequate risk analysis.

The project design incorporated the major risks.

4

USE OF COUNTRY SYSTEMS

c) Project procurement, financial management, monitoring and/or other systems are based on those already in use by government and/or other partners.

CFR model TDs approved by the Bank, were used for procurement. The national system was used for bids evaluation and contract awards.

4

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For the following dimensions, provide separate working scores for Bank performance and Borrower performance:

WORKING SCORE

Bank Borrower

CLARITY d) Responsibilities for project implementation were clearly defined

The appraisal report clearly defined responsibility.

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PROCUREMENT READINESS

e) Necessary implementation documents (e.g. specifications, design, procurement documents) were ready at appraisal

Given the previous project experience, the project management team had most of the required documents at appraisal. However, technical studies on the operations financed were not yet available and related works had not clearly defined.

2 2

MONITORING READINESS

f) Indicators and monitoring plan adopted

The project implementation team made sure to own the project monitoring indicators.

4 4

BASE LINE h) Baseline data were available or were collected during project design.

Baseline data required for project appraisal were available. 4 4

PROJECT P-MA-DB0-004 COMPLETION REPORT

F. IMPLEMENTATION

State the major characteristics of project implementation with reference to: adherence to schedules, quality of construction or other work, performance of consultants, effectiveness of Bank supervision and effectiveness of Borrower oversight. Access how well the Bank and Borrower ensured compliance with safeguards. [300 words maximum] [Any other narrative about implementation should be included in Annex 6: Project Narrative]

The project was approved by ADB Board of Directors on 5 September 2007. The loan agreement was signed on 23 November 2007, less than three (3) months later, and entered into force on 16 July 2008, less than eight (8) months after signature.

The first disbursement was made on 5/8/2008 following compliance with the relevant condition: "provide the Bank with evidence of opening a bank account at the General Treasury of the Kingdom of Morocco".

In addition to adjustments made during works execution, four successive amendments were made to the initial list of operations appraised. 18 of the 50 operations carried out were identified at appraisal and 32 approved by the Bank during execution.

The total road length of determined at appraisal (687 km) could not be fully achieved, due to the increase in actual work cost in relation to the estimated cost. 90% of the envisaged length of road to be constructed was realized. The project implementation period was marked by the oil crisis of 2008 which had an immediate impact on road material costs.

The project involved 50 operations for a total stretch of 618.50 kilometres as follows: (i) 346.47 km of paved roads and (ii) 272.03 km of unpaved tracks. At 31 May 2012, 35 operations were completed, seven were ongoing and eight were awarded.

Related works (construction of 30 bus stops (shelters), development of 16 water points and installation of 580 road signs) were not achieved within the programme framework. In view of the limited bus traffic in the area, the bus shelter construction was delayed. Conversely, a specific framework was defined for water point development and the signposting taken over by the road maintenance program.

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CFR submitted 6 project progress reports and 3 project audit reports to the Bank. Audit reports for fiscal years 2009 and 2010 were not submitted in time to the Bank, due to some confusion with regard to the content and scope of audit reports.

As at 31 May 2012, payments amounted to MAD 447 750 000, representing a utilization rate of 89% and the special account balance stood at MAD 55 218 631.93. The review of the procurement situation at this date reveals an estimated amount of MAD 13 million available for commitment.

The CFR carried out the procurement process and project monitoring was assigned to the external services of the Ministry of Equipment and Transport in accordance with quality requirements.

The post evaluation mission made comments and recommendations concerning the procurement process that have not been brought to the knowledge of the CFR.

The Moroccan Government fulfilled all its commitments regarding its counterpart funding.

Bank supervision was conducted through nine missions with an average of 1 to 2 missions per Fiscal Year.

2. Comment on the role of other partners (donors, NGOs, companies, etc.). Assess the effectiveness of co-financing arrangements and donor coordination, if applicable.

PNRR2 has been financed in parallel with other donors, and, the Bank has worked with all these parties, including the World Bank and AFD, during the various project preparation and implementation phases. During the various Bank missions, the coordination entailed several technical meetings and information and documents exchange on various project aspects.

3. Harmonization. State whether the Bank made explicit efforts to harmonize instruments, systems and/or approaches with other partners.

The Bank approved CFR model TDs to harmonize the procurement procedure with other donors and also consulted PNRR2 audit reports made available to all co-financers.

4. For each dimension of projection implementation, assess the extent to which to the project achieved the following. Provide a brief assessment (up to two sentences) and insert a working score, using the scoring scale provided in Appendix 1.

PROJECT IMPLEMENTATION DIMENSION ASSESSMENT WORKING

SCORE

TIMELINESS

a) Extent of project adherence to the original closing date. If number on the right is: : below 12, “4” is scored between 12.1 and 24, “3” is score between 24.1 and 36, “2” is scored beyond 36.1,”1” is scored

Difference in months between original closing date and actual closing date or date of 98% disb. rate. (generated automatically)

The loan was 100% disbursed on 5/12/2011

4

0

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BANK PERFORMANCE

b) Bank complied with:

Environmental safeguards

Project category II. Mitigating measures were stated in the Environmental and Social Management Plan (ESMP) but they were inadequately monitored because environment experts were not included in supervision missions.

3

Fiduciary Requirements The Bank’s commitments were fulfilled.

4

Project Covenants The lending agreement entered into force 2 months after project approval.

4

c) Bank provided quality supervision in the form of skills mix and practicality of solutions.

Overall, Bank supervision was satisfactory, ensured work timeliness and resolved technical and financial problems arising. However, the Bank did not mobilize the necessary resources for project environmental monitoring.

3

d) Bank provided quality management oversight.

The yearly supervisory rate was1.8, following the actual project start-up. The Bank did not provide project environmental oversight.

3


e) Borrower complied with:

Environmental safeguards

The borrower incorporated environmental safeguards in project design, particularly on the basis of studies, and provided for an ESMP under the works procurement. Contracts. However, environmental monitoring at the works execution phase was inadequate and progress reports overlooked the environmental component.

3

Fiduciary Requirements

The Government mobilized resources needed to finance the contracts entailing services under its responsibility in a timely manner; however, project audit reports were not submitted to the Bank on schedule.

2

Project Covenants The period between the signing of the lending agreement and project implementation was less than 6 months.

4

f) Borrower was responsive to Bank supervision findings and recommendations

The Borrower was responsive to most Bank comments made during supervisory missions but did not produce the initial project progress report and audit reports on schedule.

3

g) Borrower collected and used monitoring information for decision making

The Borrower collected and used information for the project monitoring process. However, some data on objective project indicators were not compiled (traffic at completion, accessibility differential indicator, jobs created ...).

3

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PROJECT P-MA-DB0-004-COMPLETION REPORT

G. COMPLETION

1. IS THE PCR DELIVERED ON A TIMELY BASIS, IN COMPLIANCE WITH BANK POLICY?

Date project reached 98% disb. Rate (or closing date, if applicable)(automatically generated)

Date PCR was sent to [email protected]

Difference in months (automatically generated)

WORKING SCORE (automatically generated) If the difference is 6 months or less, a 4 is scored. If the difference is 6.1 or more, a 1 is scored. 1.

5/12/2011 28/12/2012 12 1

Briefly describe the PCR Process. Describe the Borrower’s and co-financier’s participation in producing the document. Highlight any major differences of opinion concerning the assessments made in this PCR. Describe the team composition and confirm whether a site visit was undertaken. Mention any major from other development partners. State the extent of field office involvement in producing the report. Indicate whether comments from Peer Reviewers were received on time (provide names and positions of Peer Reviewers). [150 words maximum]

This completion report has been prepared on the basis of a mission to the CFR and the Roads Directorate in Morocco, from 23 April to 15 May 2012. The mission team conducted field visits and met with officials and DR departments and units involved in the project implementation. The Bank mission comprised the Task Manager and a transport consultant.

The CFR and the DR collaborated effectively in preparing the completion report, including collecting the required data and calculating the project’s economic benefits at completion.

Some difficulties were encountered in reconstituting the project’s cost at completion, including the part financed by the Government, and assessing some project performance indicators, such as employment growth and diversification.

Project stakeholders welcomed its outputs and recommended measures to ensure their sustainability.

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H. LESSONS LEARNED

Summarize main lessons for the Bank and the Borrower suggested by the project’s outcomes. [300 words maximum.] [Any additional narrative about lessons learned should be included in Annex 6: Project Narrative]

H.1 Conclusions and Lessons Learned

H.1.1 Conclusions

(i) The project was implemented to the satisfaction of the Borrower and the Bank;

(ii) The project objectives were achieved and indicators measured reveal its actual contribution to improving the living conditions of rural populations concerned; and

(iii) Lack of planned maintenance operations is a major risk to project sustainability. H.1.2. Lessons Learned

(i) The Bank’s flexibility in accepting the use of a posteriori procurement monitoring was most welcomed and helped in reducing project execution timeframe;

(ii) The Bank’s flexibility in adapting operations to be funded, adopting model files used by other donors and accepting the overall program audit report (PNRR2 ) helped in harmonizing project procedures; and

(iii) Audit delays will be closely monitored to avoid obstacles to project disbursements.

H.2 Recommendations

(i) Encourage a posteriori procurement dossier control whenever an executing agency proves its worth;

(ii) Take appropriate measures to ensure timely accounts auditing; and

(iii) Ensure the establishment of a rural roads maintenance system for project sustainability.

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I. PROJECT RATINGS SUMMARY

CRITERIA SUB-CRITERIA WORKING

SCORE

PROJECT OUTCOME

Achievement of outputs 3

Achievement of outcomes 4

Timeliness 4

OVERALL OUTCOME PROJECT SCORE 4

BANK PERFORMANCE

Design and Readiness

Project Objectives are relevant to country development priorities. 4

Project Objectives could in principle be achieved with the project inputs and in the expected time frame.

4

Project Objectives were consistent with the Bank’s country or regional strategy.

4

Project Objectives were consistent with Bank’s corporate priorities. 4

The log. frame presents a logical causal chain for achieving the project development objectives.

4

The log. frame present objectives and outcomes in a way that is measurable and quantifiable.

3

The log. frame states the risks and key assumptions. 4

Project capacity complexity was matched with country capacity and political commitment. 4

Project design includes adequate risk analysis. 4

Project procurement, financial management, monitoring and/or other systems were based on those already in use by government and/or other partners.

4

Responsibilities for project implementation were clearly defined 4

Necessary implementation documents (e.g. specifications, design, procurement documents) were ready at appraisal.

2

Monitoring indicators and the monitoring plan were agreed upon during design. 4

Baseline data was available or were collected during design. 4

PROJECT DESIGN AND READINESS SUB-SCORE 4

Supervision:

Bank complied with:

Environmental safeguards 3

Fiduciary Requirements 4

Project Covenants 4

Bank provided quality supervision in the form of skills mix provided and practicability of solutions.

3

Bank provided quality management oversight. 3

PCR was delivered on a timely basis 4

SUPERVISION SUB-SCORE 3

OVERALL BANK PERFORMANCE SCORE 4

15


J. PROCESSING

STEP SIGNATURE AND COMMENTS DATE

Sector Manager Clearance

Regional Director Clearance

Sector Director Approval


Design and Readiness

Responsibilities for project implementation are clearly defined. 4

Necessary implementation documents (e.g. specifications, design, procurement documents) were ready at appraisal.

2

Monitoring indicators and monitoring plan are agreed upon and baseline data are available or are being collected.

4


Responsibilities for project implementation are clearly defined. 4

PROJECT DESIGN AND READINESS SCORE

Implementation

Borrower complied with: 3

Environmental safeguards 2

Fiduciary Requirements 4

Project Covenants 3

Borrower was responsive to Bank supervision findings and recommendations.

3

IMPLEMENTATION SUB-SCORE 3

OVERALL BORROWER PERFORMANCE SCORE 4

Annex 1

I

Project Cost at Appraisal and at Completion

Components

List of Goods and Services at Appraisal List of Goods and Services at Completion

MAD Million Euros Million MAD Million Euros Million

FC LC Total FC LC Total FC LC Total FC LC Total

A- Construction

A1- Construction of 460 km of paved roads

245.10 105.04 350.14 22.16 9.50 31.66 263.58 112.99 376.54 23.59 10.11 33.71

A2- construction of 266 km of tracks 53.38 22.88 76.26 4.83 2.07 6.90 105.45 45.20 150.65 9.44 4.05 13.49

A3- Geotechnical control 0 14.92 14.92 0 1.35 1.35 0.00 5.60 5.60 0.00 0.50 0.50

Works Total 298.48 142.84 441.32 26.99 12.92 39.91 369.03 163.78 532.79 33.03 14.60 47.69

B- Management

B1- Works coordination and supervision 0 27.84 27.84 0 2.52 2.52 0.00 18.05 18.05 0.00 1.62 1.62

B2- Technical and financial audit 0.28 0.19 0.47 0.02 0.02 0.04 8.20 5.56 13.76 0.92 0.31 1.23

Total B 0.28 28.03 28.31 0.02 2.54 2.56 8.20 23.62 31.81 0.92 1.93 2.85

Total A+B 298.76 170.87 469.63 27.01 15.46 42.47 377.23 187.40 564.60 33.96 16.59 50.54

Physical contingencies 29.86 17.07 46.93 2.70 1.54 4.24

Financial contingencies 16.42 9.39 25.81 1.48 0.85 2.33

Total Contingencies 46.28 26.46 72.74 4.18 2.39 6.57

Overall Total 345.04 197.33 542.37 31.19 17.85 49.04 377.23 187.40 564.60 33.96 16.59 50.54

Annex 2

II

List of Missions

Dates Type of Mission

Number of

Persons

Composition

10-25 November 2005 Pre-identification Mission 3 2 Engineers, 1 Economist, 1 Environmental expert

17 February-9 March 2007

Appraisal Mission 4 1 Civil engineer, 1 Transport economist 1 Financial analyst, 1 Environmental expert

11-12 December 2007 Launching 3 1 Engineer , 1 Disbursement assistant, 1 Procurement assistant

5-19 April 2008 Supervision 3 1 Engineer, 1 Disbursement assistant, 1 Procurement assistant

1-8 December 2008 Supervision 3 1 Engineer, 1 Disbursement assistant, 1 Procurement assistant

23-27 February 2009 Financial Supervision 2 1 Financial Expert, 1 Disbursement assistant

15-19 June 2009 Supervision 3 1 Engineer, 1 Disbursement assistant 1 Procurement assistant

23-26 November 2009 Supervision 3 1 Engineer, 1 Disbursement assistant,

1 Procurement assistant

7-10 May 2010 PNRR2 Audit 3

26 June- 2 July 2010 Supervision 3 1 Engineer, 1 Disbursement assistant,

1 Procurement assistant

16-19 August 2010 Post Review 2 1 Regional procurement coordinator , 1 Procurement assistant

1-13 November 2010 Supervision 3 1 Engineer, 1 Disbursement assistant 1 Procurement assistant

11-19 July 2011 Supervision 3 1 Engineer, 1 Disbursement assistant 1 Procurement assistant

23 April-31 May 2012 Completion Report

Preparation 2 2 Transport engineers

Annex 3

III

Project’s Economic Analysis at Completion A- Model used and outcomes of evaluation 1- The project has, in addition to improving rural populations’ accessibility, produced the following effects: (i) increased traffic generated by growth in economic and social activities, (ii) significant reduction in travel time, (iii) reduction in transport costs and (iv) improvement of users’ comfort and safety. 2- The project economic benefits evaluated stem mainly from savings in vehicle operating costs and reduced maintenance costs. These savings were calculated at completion with the same model, used at project appraisal, the “Road Evaluation Design” (RED), developed by the World Bank to assess the PNRRP2 and used by the Bank for project evaluation. Costs and benefits relating to the past years of the project are the actual amounts, while benefits for the remainder of the project period have been reviewed. The project was expected to be commissioned in 2009, for duration of 15 years. An investment residual value of 10% was decided for this period. 3- The economic rate of return (ERR) analysis resulting from the economic analysis based on the RED model shows that: (i) the rates of return at completion are between 6% and 66% with an average of 24%, whereas at appraisal, they ranged between 15% and 136% with an average of 35%; (ii) the rate of return, at completion, declined in the cases of 32 operations, for which works costs increased significantly compared to the estimated cost at appraisal; (iii) three of these operations, involving tracks construction in mountain areas showed rates of return below 12%. Detailed outcomes for each project tranche are presented in Table 3 ahead. 4- The project’s economic performance is therefore satisfactory. 5- The assumptions underlying the economic analysis and details of the outcomes of the calculation of returns are described below. B- Economic Evaluation Assumptions 1- Works Standards Given the experience gained through PNRR1implementation, two works standards are considered in the PNRR2 formulation:

- elaborate road construction consisting in the laying out of the roadway, sanitation works and possibly the surfacing layer; and

- construction of paved road.

Annex 3

IV

The maintenance standards associated with these works entail:

- periodic maintenance consisting of structure strengthening; and

- routine maintenance with part-time workers and maintenance of road ancillary structures

Unit maintenance financial costs applied in economic evaluation are summarized below:

- Track construction: 9800 DH/km; and - Paved road construction: 28000 DH/km.

2- Traffic composition Vehicle categories and traffic volumes are summarized below:

Table 1 Vehicle Categories and Traffic volume (in %) used for the Evaluation

Traffic Private Vehicle Commercial

Vehicle

Jeep

(Four Wheel drivel)

Average Truck

Multi-axle Truck

< 50 v/d 26 26 19 22 7

50< <100 v/d 53 23 11 10 3

>100 v/d 51 29 6 11 3

The mean traffic growth rate is fixed at 5% over the project’s duration and a multiplier factor taken into account for the project’s initial years. This coefficient corresponds to the traffic "scalability" (or built-up) effect over time, from the commissioning to the point in time where this effect is no longer seen to scale up; after five years on average.

Annex 3

V

The multiplier factor mean values were compared to those of the 2001 study conducted by Setec-Economie, concerning a model of economic evaluation for the construction of new roads (Etude d’élaboration d’un modèle d’évaluation économique de construction des routes neuves). These values are presented in the table below:

Table 2

Multiplier factor-Mean values

Initial AADT

(Before works)

Construction works

Build up (Years)

Construction Build up (Years)

Below 30 v/d 1.93 5 4.3 5

Between 30 and 60 v/d 1.73 5 3.4 5

Between 60 and 200 v/d 1.43 5 2.2 5

Above 200 v/d 1.34 10 1.9 10

The table below contains economic evaluation outcomes

Annex 3

VI

Project’s Economic Rate of Return

DRET/ DPET

Road No.

Liaison Section Distance

launched (km)

Nature of

Works

Initial estimated

Cost (KDH)

Initial AADT

Initial ERR (%)

Final Cost (KDH)

Final AADT

Final ERR final (%)

PKD PKF

Al Haouz NC ABADOU / TAMESOULT (AIT IKTEL)

0 9.5 9.50 C 10 000 50 21% 13 930 55 14%

Azilal P3113 Arbâa - Tifert - Boutfarda 13 26 13.00 C 13 000 100 24% 30 996 128 16%

Benslimane P3336 Bir guettara- mediona 0 15 15.00 C 12 000 50 27% 13 854 60 24%

Benslimane P3311 S.Laghlimi-BGE OD mallah 4 7.4 3.40 C 3 200 250 65% 3 277 280 63%

El Kelâa 5847+C Laararcha-N'zalt laadam 0 15.046 15.046 C 12 660 200 46% 11 878 46%

El Kelâa 5847+C Laararcha-N'zalt laadam 15.046 33.27 18.224 C 15 340 200 46% 13 355 46%

El Kelâa 1608 Attaouia -RP 2121 through ouled arrad

0 12.788 12.79 C 8 400 50 31% 9 229 55 28%

El Kelâa P2103 El Q'liaâ-Mabared 15 33.194 18.19 C 12 810 200 59% 17 550 221 52%

Guelmim P1303 Elâïn-L.Assa 10.00 33.00 23.00 C 12 800 30 19% 25 703 38 18%

Ifrane P7058 P7048 - Limite province 29.7 34.264 4.56 C 3,200 30 19% 7 776 35 12%

Khémisset P4322 Zhiligua - Ain Lahmira 0 12.72 12.72 C 16 900 30 12% 21 676 50 13%

Khénifra NC El Borj-Oulghass 0.00 11.50 11.50 C 9 500 50 25% 16 858 58 16%

Khouribga P3500 Gnadiz - O.Ftata 10 20 10.00 C 5 000 50 27% 7 550 58 28%

Larache NC RR415 -O jmil-O.boujnoun-O Mouns

11 19.476 8.48 C 5 000 100 24% 19 909 120 18%

Méknès P5021 BITTIT - IMOUZER 4 8.241 4.24 C 2 400 50 34% 4 245 58 23%

Méknès NC Oued el Jadida - KANOUFA 0 6 6.00 C 3 000 300 111% 9 575 331 43%

Annex 3

VII

DRET/ DPET

Road No.

Liaison

Section Distance launched(

km)

Nature of

Works

Initial Estimated

Cost (KDH)

Initial AADT

Initial ERR (%)

Final Cost (KDH)

Final AADT

Final ERR (%)

PKD PKF

Safi P (2319+

2109+ 2110)

Laamamra-Ighoud 0 13 13.00 C 7,685 50 33% 11 465 55 23%

Settat P2115 Beni Khlough- Ouled M'rah 74.16 94 19.84 C 16 000 150 45% 17 307 170 45%

Settat P3633 Ben Ahmed-M'riziq 0 26.575 26.58 C 21 768 250 59% 25 188 319 60%

Settat P3333 Aïn Madnat- Sidi Sbaa 61.342 77.015 15.673 C 11 200 100 29% 26 145 120 21%

Tan tan NC Tilemzoune- Winmakdour-Tarmast

0 12 12 C 12 000 30 16% 21 782 50 13%

Tan tan NC Tilemzoune- Winmakdour-Tarmast

12 24.96 12.96 C 18 000 30 16% 20 634 50 14%

Tangiers NC RN16-Oued El Mersa 0 6.2 6.20 C 6 000 50 22% 10 789 55 12%

Tangiers NC NC

Melloussa (RP4613)- Khmis Anjra par Zemmij RN16-Dar Foual via el Hassana

0 0

3,096 3,4

6.50 C 12 000 50 70

20% 22%

17 608 200 100

12% 18%

Tangiers NC8107 Assilah-Dar seid 0 4.717 4.72 C 4 700 50 22% 6,363 58 17%

Tangiers NC Melloussa (RP4613)- Khmis Anjra via Zemmij

3.096 7.73 4.63 C 4 090 50 20% 16 735 200 14%

Kénitra(1) P4222 RP4219-RP4220 12 21.178 9.18 C 6 560 250 68% 7 472 319 81%

Khouribga P3506 P3509 P3505

O.Abdoune -Beni Ikhlef Bni Ikhlef -Boujniba N11-les écoles

0.00 8 13 6 382 5 032

19.5 C 19 100 100 50 50

27% 20% 20%

18 981 27% 20% 20%

Al Hoceima NC RN8- Had Mdawad 0 12.6 12.60 A 9 000 50 16% 25 727 100 9%

Boulemane P5121 RN15- Boussalem 0 47.713 47.71 A 12 950 40 27% 20 314 44 24%

Annex 3

VIII

Boulemane P5125 Oulad Ali - Limite Taza 15 25 10.00 A 5 250 40 28% 26n 003 100

6%

DRET/ DPET

Road No.

Liaison

Section Distance Launched

(km)

Nature of

Works

Initial Estimated

Cost (KDH)

Initial AADT

Initial ERR (%)

Final Cost (KDH)

Final AADT

Final ERR (%)

PKD PKF

El jadida NC2290 p3440 KODIA ET OLAD JERRAR-SIDI M AMLIH

0 13.623 13.62 A 4 000 150 66% 2 579 66%

El jadida NC8028 P3433

Had Aounate Olad Boubker chaabat -P3438 P3433-P3431

0 5 542

9 024 6 908

10.39 A 3,200 120 70

85% 29%

2 965 66%

El Kelâa P2102 Skhour R'hamna - Bge. Massira

0 29.5 29.50 A 8 850 200 84% 18 301 221 52%

Ifrane NC Berkite-El mers ou Ali 0 6 6.00 A 1 800 50 41% 5 584 60 14%

Khénifra NC7630 Ait Boulmane-Ait Bouali 0.00 16.53 16.53 A 9 750 50 35% 16 145 64 14%

Khénifra NC2679 Had Oued Ifrane-Bouchebel 0.00 11.71 11.71 A 8 500 50 36% 9 290 58 17%

Kénitra P4202 My bousselham-RP4217 0 22.413 22.41 A 7 070 50 25% 5 834 25%

Khouribga P3523

812 O.Zem - O.Aissa RP 3523- Braksa

2 0

7 24 12 4

17.64 A 5 400 50 70

37% 26%

6 244 58

81 34% 41%

Safi NC P2305 (PK16) - P2306 (PK30)

0 14.2 14.20 A 2 970 50 40% 3.770 55 41%

Settat P3625 Dar Ouled M'hamed-Sidi Hajjaj

32 63.305 31.31 A 12 465 150 62% 5 732 62%

Khouribga 876 P3500-P3502 0 14.165 14.17 A 3 900 30 24% 4 444 38 31%

Khémisset NC Oulmès - Zguit 1.29 7.721 6.43 A 5 282 50 15% 17 145 100 6%

Khémisset NC Oulmès - Zguit 7.721 15.529 7.81 A 6 218 50 15% 10 939 100 15%

Annex 4

IX

PROCUREMENT PLAN i) At Appraisal Provisions relating to works, goods and services procurement at appraisal are given in the table below. ii) At Completion The project’s financial resources were used for the procurement of goods and services required to carry through the project, in compliance with the lists of goods and services as and when approved by national authorities and the Bank. The goods and services procurement methods used by the project were compliant with those specified in the project appraisal report. The following table summarizes these provisions.

Source: RFF/ADB

( ) ADB’s Contribution

The verification of Bank-financed procurement was conducted on an a posteriori basis. 29 procurements were verified during two Bank supervision missions from 5 to 19 April 2008 and from 15 to 19 June 2009. Neither mission gave rise to specific comments on the procurement process. The Bank organized a specific a post review mission from 16 to 19 August 2010, during which it verified a sample comprising12 procurement contracts out of the 40 awarded, and noted that certain practices allowed by CFR rules were contrary to the Bank’s. It made relevant comments on contract management and proposed an action plan to redress inadequacies. The mission concluded that the overall project risk level was moderate, taking into account various specific risks relating to the: (i) procurement system (weak); (ii) processes adopted (moderate); and (iii) contract management (substantial). The mission’s observations and recommendations should be brought to CFR’s knowledge for necessary measures to be taken to improve the procurement process

Categories

At Appraisal (UA Million ) At Completion (UA Million)

Number of

Contracts AON

Fin other than ADB

Total

Number of

Contracts AON

Fin other than ADB

Total

A) Works

A1- Construction of 460km of paved roads

39 3179

(31.79)

31.79 (31.79)

29 28.81

(28.81)

28.81 (28.81)

A2 Construction of 226km of earth tracks

19 6.92

(6.92)

6.92 (6.92)

16 11.53 (9.65)

11.53 (9.65)

B- Management

B1- Works Control and Supervision

2.53 2.53 1.38 1.38

B2- Geotechnical Control of works and Specific Studies

55 1.35 1.35 40 0.43 0.43

B3- Audit 1 0.04 0.04 2 1.05 1.05

Total 104 38.71

(38.71) 3.92

42.63 (38.71)

87 40.34

(38.46) 2.86

43.20 (38.46)

Annex 5

X

LIST OF DOCUMENTS CONSULTED

Project Appraisal Report Lending Agreement and Protocol Agreement Supervisory Mission Checklists Project Progress Reports Project Audit Report Bank’s Ledger

Annex 6

XI

PROJECT IMPLEMENTATION DESCRIPTION

1- Entry into force and works start-up 1.1 The project was approved by the ADB Board of Directors on 5 September 2007. The lending agreement was signed on 23 November 2007, less than three (3) months later, and entered into force on 16 July 2008, less than eight (8) months after signature. Implementation started once the borrower had satisfied the provisions of Section 5.01 of the General Conditions. The first disbursement was on 5/8/2008, after complying with the relevant condition, to: "provide the Bank with evidence of an account opened at the General Treasury of the Kingdom of Morocco". 1.2 The “other conditions” relate to sending quarterly project implementation progress reports, the first of which, should reach the Bank not later than the end of September 2008 For fulfilment of these conditions, the Bank received 6 progress reports provided by the CFR on the following dates:

No. Period Covered Date Sent to Bank

1 Up to December 2008 5/12/2008

2 January –June 2009 9/11/2009

3 July–December 2009 12/3/2010

4 January–June 2010 30/9/2010


6 January –June 2011 13/7/2011


The first progress report was sent in two months after the due date stipulated in the lending agreement. The other reports were sent on schedule. RFF sent 4 audit reports to the Bank, as follows:

No. Fiscal Year Date Sent to Bank Date accepted by Bank

1 2008 24/6/2009

2 2009 18/10/2010 interim version 11/3/2011 final version

Accepted by Bank on 28/04/2011

3 2010

15/7/2011 interim version 18/10/2011 final version

Accepted by Bank on 18/11/2011

4 2011 10/7/2012 final version Pending Bank review

Annex 6

XII

The Fiscal Year 2009 audit report was sent to the Bank more than 9 months after the end of the that year. Overall, the audit reports covered the different aspects of the project’s financial implementation and were approved by the Bank. 2. Project Adjustments: 2.1 In addition to adjustments made during works execution, the list of operations, initially determined at appraisal was amended four times successively:

• 8 June 2008: adoption of a new list of operations to be financed by ADB to replace transactions already initiated in 2007 by new operations;

• 25 June, 2008: replacement of 4 roads (P2339, P2314, P3628 and NC at Tan Tan)

for a total length of 99km, with 4 other roads; (P1608, P2103, NC to Tan Tan and P6034) for a total of 105.3 km;

• 3 September 2008: replacement of two roads (NC107 and RP5014) for a total of

34km, with one road (Laarcha-Nzalat Laadam) for total of 36 km; and • 16 June 2011: introducing six new operations totalling 57 km.

Evolution of Project Features

Component

At Appraisal At Completion

Difference (%)

Number of Operations

Distance (km)

Number of Operations

Distance (km)

Paved Roads Construction 39 460.21 32 346.43 75%

Track construction 16 226.71 18 272.03 120%

Total 55 686.92 50 618.46 90%

18 of the 55 operations identified at appraisal were maintained in the project-funded list. 2.2 These changes were appropriate. The overall project cost was unaffected and the changes did not impact on the overall project timeframe 2.3 The overall length of road to be constructed road as determined at appraisal (687 km) could not be fully achieved, due to the increase in actual work cost over the estimated cost. The constructed road/ projected road ratio is 0.90%. 2.4 Several factors account for the increase in the final cost of most operations,’ compared to the cost estimated at appraisal (costs more than tripled for six operations), including: (i) inadequate initial estimates, for lack of studies; (ii) the mountainous environment for some operations; (iii) hike of road materials cost as a result of the 2008 petroleum crisis. 3. Works and services procurement 3.1 The project's financial resources were used for goods and service procurement and in accordance with different goods and services lists approved by national authorities and the Bank. The project goods and services procurement methods were consistent with those identified in the project appraisal report. Annex 4 contains comparison of the procurement plan at appraisal and at completion.

Annex 6

XIII

3.2 Overall, the project entailed 87 contracts, including 45 under the components financed by

the Bank. One (1) of them (concerning works for construction of the RP3625 as a 31 km unpaved road at Settat) was rescinded by the company's fault. Bidding procedures were initiated for completion of these works and the corresponding amount committed under the CFR budget. No contract amendments were issued during the project implementation period. 3.3 Geotechnical works control contracts were launched on the basis of competitive bidding and funded by the Directorate of Roads. 3.4 Two contracts for PNRR2 account audits, were awarded to the CAE Baker Tilly - Sofreco and KPMG - Team Morocco group, and both were funded by AFD, 3.5 Missions were fielded for post review of Bank-financed procurement. 29 contracts were thus reviewed through two Bank supervision missions: 5 to 9 April 2008 and 15 to 19 June 2009. In addition, the Bank organized a specific mission post review mission from 16 to 19 August 2010. It focused on a sample comprising12 procurement contracts out of the 40 awarded, and made relevant comments on contract management as well as recommendations to remedy the weaknesses noted, which were however not communicated to the CFR 4. Project’s physical achievements 4.1 To ensure project realization in optimal timeframes, some operations were merged in order to have contracts that would attract major companies. To that end, the 50 operations were covered by 45 contracts. 4.2 The project involved 50 operations over a total road length of 618.50 km divided into (i) 346.47 km of paved roads and (ii) 272.03 km of unpaved tracks. At 31 May 2012, 35 operations had been completed, 7 were nearing completion and contracts had been awarded in respect of 8. 4.3 The project included related works (construction of 30 bus shelters, 16 water points and installation of 580 road signs ), which have not been identified by the executing agency and therefore have not been initiated. 4.4 With regard to the project’s institutional measures, the rural roads design guide has been developed and the rural roads maintenance implementation monitoring system is still being studied. Environmental and social aspects: 4.5 Because the Bank intervened in the program after other donors, it adopted the process underway for the integration of environmental aspects in rural road construction. 4.6 An environmental Instructions Manual (EIM), prepared in September 2004, defined a procedure for integrating environmental assessment in rural road implementation projects. The Manual entailed a process for taking the environmental aspects into account in the three operations stages: design, construction and operation. Documents analysing these aspects were to be produced at each stage:

At the study phase, a Preliminary Environmental Assessment Sheet (PEAS) is filled in by the consulting firm responsible for the design studies, based on a field visit and further consultations, as necessary. PEAS provides information on potential project impacts affecting the physical, biological and human environment. When completed, the PEAS is analysed using an evaluation grid included in the EIM, to determine the need for a more detailed environmental study.

Annex 6

XIV

At the works phase, EIM provides a chapter on environmental requirements to be included in the specifications, to determine the need for preparation of the environmental monitoring report; and

In anticipation of the operational phase, EIM lays the basis for programme definition and the formulation of the environmental monitoring report.

While the above study phase procedures were fully complied with, works implementation monitoring was inadequate. 5 Project management and monitoring The CFR, as the executing agency, carried out the procurement process and project implementation monitoring in compliance with the quality requirements, through the external services of the Ministry of Equipment and Transport. UGP coordinated the monitoring activities. 6 Costs and funding sources Project costs 6.1 The overall project cost, excluding taxes, at completion was MAD 564.6 million at an initial estimated cost of MAD 542 million. The detailed cost at appraisal and completion of the various components of the part financed by the ADB are summarized in Annex 1. 7. Project Financing 7.1 The project has been jointly funded by the ADB and the Government of Morocco. At appraisal, the Bank was to finance 90.8% of the tax exclusive project cost, that is 45 Million Euros, the AFD was to finance the project audit corresponding to 0.09% of tax exclusive project cost and the Government, 9.11% of the tax exclusive project cost as well as taxes. The Government has covered geotechnical and material quality control costs as well as those related to project management. The table below shows the financing plan at appraisal and completion.

Financing Plan in Millions of Euros

Financing Source

At Appraisal (ET) As at 31/05/2012 (ET)

FC LC Total (%) FC LC Total (%)

ADB 31.17 13.36 44.53 90.8% 31.50 13.50 45 89%

ADF 0.03 0.01 0.04 0.09% 0.92 0.31 1.23 2.5%

GVT 0.00 4.47 4.47 9.11% 0.00 4.31 4.31 85%

Total 31.20 17.84 49.04 100% 32.42 18.12 50.54 100%

8. Disbursements

8.1 Disbursements were made from the special project account opened at the Bank of Morocco and at 12/12/2011, the Euro 45 million loan amount was fully disbursed through 6 transfers to the special account and 1 reimbursement. The following table provides details of the Bank disbursements.

Annex 6

XV

Disbursement Table

No. Request Date

Value Date

Euro Amount MAD Amount

% Comments

1 1/7/2008 5/08/2008 5 271 460.62 58 855 857.78 11.71%

1b 20/11/2008 3/12/2008 150 894.82 1 666 633.33 0.34% Direct reimbursement that did not transit through the special account

2 7/4/2009 28/5/2009 16 340 687.00 183 391 530.20 36.31%

3 7/10/2009 30/11/2009 5 336 059.00 60 676 326.89 11.86%

4 10/02/2010 12/05/2010 9 147 700.00 100 926 574.10 20.33%

Forms A1 and A3 corrected by CFR and Bank delay with regard to processing of contracts

5 29/7/2010 8/12/2010 6 001 959.00 66 753 788.00 13.34%

Justifications below 50% and belated 2009 audit report

6 11/5/2011 5/12/2011 2 751 239.56 30 695 579.77 6.11% final version of 2010 audit report delayed

Total 45 000 000.00 502 966 290.07 100 %

Processing time of applications for disbursements 4, 5 and 6 was inordinately long. The two last applications were delayed because of tardy audit report. To avoid blocking contractors’ payments, CFR replenished the special account, with the Bank’s approval, from the local authorities’ accounts and then remitted the corresponding amount after disbursement. 8.2 As at 31 May 2012, expenditure from the amount mobilized at the Bank of Morocco stood at MAD 447.75 representing an 89% utilization rate. The special account balance at that date was MAD 55 218 631.93. The review of the contracts awarded highlights an outstanding payment of about MAD 41.93 million, leaving about MAD 13 million available for commitment, ensuing both from the rescinding of the contract for the development of RP3625 (DRET, Settat), and the bankruptcy of the company, recently awarded the contract for the development of the Oulmès-Zguit road link (DPET, Khémisset). .

Annex 7

XVI

SCORES FROM LAST SUPERVISION (2011)

INDICATORS

Score of 11.07.2011

A. PROJECT IMPLEMENTATION

Compliance with loan conditions precedent to entry into force 3

Compliance with General Conditions 3

Compliance with Other Conditions 3

B. PROCUREMENT PERFORMANCE

Procurement of Consultancy Services 3

Procurement of Goods and Works 3

C. FINANCIAL PERFORMANCE

Availability of Foreign Exchange 3

Availability of Local Currency 3

Disbursement Flows 3

Cost Management 2

Performance of Co-Financiers 3

D. ACTIVITIES AND WORKS

Adherence to implementation schedule 3

Performance of Consultants or Technical Assistance 3

Performance of Contractors 2

Performance of Project Management 3

E. IMPACT ON DEVELOPMENT

Likelihood of achieving development Objectives 3

Likelihood that benefits will be realized and sustained beyond 3

Likely contribution of the project towards an increase in 3

Current Rate of Return 3

F. OVERALL PROJECT ASSESMENT

Current Supervision Average

Current Trend over time RATINGS: 3 = Highly Satisfactory, 2 = Satisfactory, 1 = Unsatisfactory, 0 = Highly Unsatisfactory, ‘NA ‘= Not applicable