Transport. International Development Association. Improving Services for the Poor. Public Disclosure Authorized. Public Disclosure Authorized

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized International Development Association Transport IDA at WORK Improving Services for the Poor September 2009 SUSTAINABLE DEVELOPMENT NETWORK

2 Contents Rural Roads: Linking People to Markets and Services 2 Getting People and Traffic Moving Again in Lagos 12 Access to Markets and Services Increases in Rural Bhutan 14 Nicaragua: Improving and Maintaining Nicaragua s Roads 16 In Ethiopia All Roads Lead to Development 18 Vietnam: Access to All-Weather Roads has Development on the Move 20 d IDA at WORK: Transport

3 Transport IDA at WORK Improving Services for the Poor International Development Association Roads are the arteries that are the lifeblood for a healthy economic development leading the way for improvements in the standard of living for the poor. Rural communities especially, have little opportunity to lift themselves out of poverty without working connections to get their goods and produce to market, their children to schools, and access to health services, while simultaneously safe urban transport encourages economic growth and employment and connects the urban poor with economic opportunity. This booklet describes how the International Development Association (IDA), the concessional lending arm of the World Bank, supports countries as they seek to improve access to all-weather roads and associated infrastructure. It also offers several examples of how poorer countries have focused on sustainable approaches to road building and maintenance and how they have achieved marked improvements in overcoming poverty as a result. The international development community has long recognized the importance of road networks that give people greater access to the services that can help lift them out of poverty. We believe that increased donor support can assist many countries to improve road networks, in particular serving rural communities, and hence achieve the MDGs. The World Bank remains committed to supporting its partner countries in addressing the problem of poor road infrastructure, specifically in rural areas. We look forward to working with others to achieve a greater coverage for those who currently do not enjoy basic access. Meanwhile, in urban areas we are endeavouring to produce sustainable solutions to assist the poorer sections of the community in taking part in economic and social activity Jamal Saghir Director Energy, Transport and Water The World Bank IDA at WORK: Transport 1

4 IDA at WORK Connectivity: Providing Access That Links People to Opportunities of Health, Education, Social Needs, Trade and Services Studies have shown that poverty reduction is more likely to be effective when communities have ready access at all hours and in all weather - to essential services and to markets. Despite this knowledge, an estimated one billion people, or about 40 percent of the rural population in regions served by the International Development Association (IDA), the World Bank s fund for the world s poorest countries, lack direct access to an all-season road. The size of this unmet demand is reflected in the substantial volume of IDA lending for rural roads. Over US$1 billion of IDA funding goes into rural roads each year. Projects completed in the last eight years have built, rehabilitated or maintained some 240,000 km of roads with the resulting improvements benefiting over 75 million people. IDA support for programs designed to reach rural populations have seen road access improve substantially, especially in countries with a clear strategy and well-targeted plans. Analyses point to the significant economic impact of rural roads in Bangladesh, Ethiopia, India, Uganda, and Vietnam, and the social benefits of rural roads have been shown in a study in Morocco. Between 1998 and 2008, 90 percent of rural road projects financed by IDA had outcomes rated satisfactory by the World Bank s Independent Evaluation Group. There is considerable knowledge of the role that the transport sector plays in economic growth at the sub-national, national, regional and global levels, and IDA is facilitating more effective strategies that are needed to harness the sector s contribution to poverty reduction. Every policy change has an impact on both equity and efficiency. Good transport policy contributes to poverty reduction by enhancing both equity and efficiency outcomes. The relationship between transport and poverty reduction is neither straightforward nor automatic. However it is apparent that improvements in transport have the greatest impact on poor people when made in concert with activities in other sectors. It is At a glance Over 1 billion of the world s poorest people do not have access to roads. About US$1 billion of IDA funding goes into rural roads annually (US$540 million in transport sector projects and another US$475 million through projects working across sectors). Of 329 rural road projects ( ) funded by IDA, 45 percent were in Sub-Saharan Africa, followed by South Asia (16 percent) and East Asia Pacific (15 percent). With IDA funding, over eight years, about 240,000 km of roads were constructed, rehabilitated or maintained, benefiting about 75 million people. 2 IDA at WORK: Transport

5 similarly apparent that development in other sectors will be hampered without attention to transport issues. Well-staffed health clinics, for example, are of little benefit to poor people who cannot get to them. In 2003, the World Bank established the rural access index as one of several key diagnostic measures for the sector. Data from this tool has allowed assessment of access needs and monitoring of progress. In its advice and publications, IDA has encouraged more community ownership of rural roads, more use of local labor, and more resources for road maintenance. Aiming at greater local ownership and lower transaction costs, there is now increasing emphasis on programmatic and sectorwide approaches, where IDA collaborates with both national governments and other donor agencies to support ongoing national programs. The large India and Vietnam programs are examples of this. In practical terms it cannot be expected that all households will have all-season access to their home door. The rural access index measures the number of rural people who live within two kilometres (typically equivalent to a walk of 30 minutes) of an all-season road as a proportion of the total rural population. An all-season road is a road that is accessible all year round by the prevailing means of rural transport (typically a pick-up or a truck which does not have four-wheel-drive). Occasional interruptions of short duration during inclement weather (e.g., heavy rainfall) are accepted, particularly on lightly trafficked roads. But rural access is only part of the solution to enhance trade and welfare opportunities. These roads need to be connected to regional and national routes that supply larger populations and ports. An example of IDA support can be seen in Lao PDR where rehabilitation of some regional routes has proved successful in removing trade and social restraints, whilst using contracting innovations such private/public partnerships and performance based contracting. The Bank s work in the transport sector. The World Bank s Transport Business Strategy for stresses the need for transport to be Safe, Clean, and Affordable. The strategy approaches transport improvements in the context of what is needed to achieve the Millennium Development Goals (MDGs). Improved transport makes five key contributions to sustainable development: It improves trade, which facilitates economic growth and regional integration. It makes cities work better for their citizens, for the environment, and for economic growth. It creates economic opportunity and growth in rural areas through better access to markets. It provides access to health care facilities and schools. It is safer and cleaner for users and the community. Over the last 10 years, IDA s main transport priorities have been the construction, rehabilitation and maintenance of roads and highways, representing approximately 77 percent of commitments for the sector. Within this category, rural roads account for three quarters of the commitments. In money terms from FY , IDA funded US$11.24 billion for transportation, of which US$8.61 billion was provided for roads and highways. Policy objectives for the roads sub-sector have included improved asset management, sustained funding for road maintenance, increased private sector participation in road maintenance, and performance-based contracting. IDA lending has also addressed policy and institutional development as well as urban transport, together accounting for about 12 percent of the total spending. The remaining 11 percent include programs in ports, shipping, railways and air transport IDA at WORK: Transport 3

6 IDA at WORK: Transport The highways sector support. In the highway sector, IDA support has continued to grow. Lao PDR has secured IDA funding as part of a collaborative approach with Swedish and Norwegian donors which supports a US$64 million project to upgrade 200 km of Road 13, the backbone of the road system. The project also aims to introduce a periodic maintenance program using competitive bidding, to and improve the Government s capacity to better manage its national road assets. Road 13 was in serious need of improvement, as its gravel surface limited travel speeds to around 35 km per hour and road maintenance was rarely undertaken across the network. The upgraded section of Road 13 recently completed provides all-season access to important agricultural areas in southern Lao PDR. Travel time for transportation of key commodities to markets has decreased from an average of five hours to less than three, which has boosted local economic activity. Savings in vehicle operating costs have been estimated at US$39 million a year. Through a new cost recovery mechanism the government is now raising close to half the annual funds needed to maintain the road system. The project helped establish the Road Maintenance Fund in 2001 with new methods of road-users funding as a sustainable source of income. The fund represents 40 percent of estimated annual need. Now, 70 percent of routine maintenance and all periodic maintenance is subject to competitive bidding and around 25,000 km of road across the country are now subject to periodic maintenance. The number of private contractors increased from 30 in 1997 to 220 in 2009 (the majority of which are well-performing and financially stable) and their capacity to undertake civil works has dramatically increased. The road sections supported under the project were included in the government s long-term maintenance program, partially funded by follow-up support from IDA s Adaptable Program Loan, the Road Maintenance Program and the government has adopted the project s monitoring approach to oversee all donor-related projects. In Georgia, trade efficiency has been achieved by IDA supporting a US$20 million project, for the government s priority of improving Georgia s major transport corridor, the East West Highway. The First Improvement Project, commenced in 2006 in the amount of US$19 million and the subsequent Second East-West Highway Improvement Project, commenced in 2008 in the amount of US$35 million aim to (i) contribute to the gradual reduction of road transport costs and improve ease of transit and safety along the central part of Georgia s East-West corridor through upgrading a segment of the East- West Highway from Tbilisi to Rikoti; and (ii) to strengthen the capacity of government agencies particularly Road Department of the Ministry of Economic Development to develop and implement a traffic safety program. In Azerbaijan a new project will see a more regional and comprehensive approach with (i) upgrading of the remaining 112 km of the M3 highway between Alat and Masalli which was anticipated but not included in the earlier support and (ii) the reconstruction of the R6 highway Tagiyev - Sahil (41 km) which connects the M3 to the M1 (Baku - Russian border) and bypasses Baku. This additional financing will also support the following activities: (i) rehabilitation of about 200 km of local roads; (ii) technical assistance; and (iii) monitoring and evaluation and financial audits. The main objective is to reduce road transport costs and improve access, transit and road safety within 4 IDA at WORK: Transport

7 Azerbaijan s East-West and North-South corridors, through: (i) upgrading the Alat-Masalli road of the Baku-Iran highway (M3); (ii) rehabilitating the Baku- Shamakhi road (M4); (iii) rehabilitating the Kurdemir- Ujar road (M2); and (iv) reconstructing the R6 highway Tagiyev-Sahil which connects the M3 to the M1 and bypasses Baku. Rural roads cannot be considered in isolation from the management of the main road network and the rest of transport sector. National transport issues such as road safety, road maintenance, and the availability and cost of transport services need to be addressed along with the provision of rural roads. Similarly, regional and social development policies strongly influence government programs for rural roads. A focus on maintenance and community-driven initiatives. Sustainable road maintenance is a key concern. IDA has been addressing it by securing adequate and reliable funding; promoting second generation road funds (mainly based on user charges on fuel); supporting efforts to commercialize road maintenance operations; and helping build institutional capacity. As a result, over the past 10 years, road maintenance in most IDA countries has benefited from substantially-improved funding levels and efficiency. Returns from good maintenance are huge, typically many times the returns from road improvement or rehabilitation. Rural roads are an important component of multi-sectoral projects, which are typically community-driven development projects. Rural roads are a priority for communities and naturally fit into projects that support local area development, agriculture, or social objectives. Research shows the synergies among sectors and the strengths of an integrated approach at the local level. New approaches have combined training and capacity-building with local knowledge, labor, and materials to create sustainable value-for-money solutions that include provision for maintenance and future funding. This consultative approach creating ownership by officials and locals of the outcome of funding has seen vast improvement in the viability and longevity of project outputs. A systematic approach to measuring results. IDA s introduction of the rural access index (included in 2005 in the IDA Results Measurement System) has generated interest in investigating the resources and time required to improve rural accessibility and reduce transport costs, in order to help combat poverty and stimulate growth. In 48 countries for which the data has been calculated and which represent 89 percent of the rural population in IDA countries only 58 percent of the rural population had access to an all-season road in 2009 In middle-income countries that borrow from the World Bank s other lending arm, the International Bank for Reconstruction and Development, the comparable figure is 87 percent (based on 31 countries). Hence, it is estimated that nearly 1 billion of the world s poorest people remain marginalized without direct access to an all-season road. Although time series data are limited, there is evidence that the rural access index has improved substantially over time in countries that have a clear strategy for improving rural access and that rely on well-targeted support from IDA and other agencies. In Ghana, rural access has increased from 44 percent in 1997 to 61 percent in 2003, benefiting approximately 1.5 million rural people (13 percent of rural population). Later measurements in 2007 indicated a drop to 53 percent. It has since stabilized. IDA at WORK: Transport 5

8 IDA at WORK: Transport In Vietnam, in 1993, only 30 percent of the population lived within two kilometers of an all-season road. In 1999, the World Bank identified a massive effort to restore the country s rural road network to adequate standards as critical to its development. Rural access grew from 73 percent in 1998 to 84 percent in 2004, connecting an additional 6 million people to markets and services. Comparable measures are being established to determine the ease at which the urban population can travel to their work and engage in social interactions. This level of urban mobility is needed to assess benefits against the costs as a measure of affordability. The former will become increasingly relevant as the number of poor people living in urban areas in IDA countries grows. A Lifeline in Ethiopia The New York Times, November 8, 2004, reported on an IDA road project in Ethiopia: A few months back, Desalegn Godebo s wife descended into a feverish delirium. It was as if she were mad, the farmer said, shuddering at the memory. She was scratching me like a crazy woman. Before a new road was built through this village, Mr. Godebo would have loaded his wife onto his back and hiked six hours along narrow dirt paths to Awasa, a small city. Instead, he lifted her into a truck for the one-hour ride to town. Her condition was diagnosed as malaria and typhoid. She is well now and back home caring for their baby. The dirt-and-gravel road may look like a timeless feature of the Great Rift Valley. But it is, in fact, part of a huge public road-building project that is slowly hauling one of the poorest, hungriest nations on Earth into modernity. A cost-effective path to poverty reduction. Studies in India, Vietnam and Bangladesh, where IDA has had large rural roads programs, show the significant development impact of improved roads. In India, expenditures on roads were found to have by far the largest impact on rural poverty compared with other types of public expenditure. For every 1 million Rupees (US$22,000) invested in rural roads, 163 people were lifted out of poverty. In Vietnam, the level of economic activity was found to relate closely to the extent of the rural road network. After agricultural research, road investment produced the highest return of expenditures among various sectors. For every Dong invested in roads, the value of agricultural production would increase by three Dong. This IDA support improved access to all-season roads for approximately 16 million rural people, and helped lift 210,000 of 950,000 out of poverty over a five year timespan.. In Bangladesh, research found that road improvement projects led to a 27 percent increase in agricultural wages and an 11 percent increase in per capita consumption. The incidence of moderate and extreme poverty fell by between 5 percent and 7 percent. Road improvements also led to an increase in schooling of boys and girls. IDA Contributions IDA s global knowledge and long-standing engagement with both national and local clients have enabled it to address the issues of road maintenance, transport service costs, community ownership, and integrated rural accessibility planning that are critical to the sustained impact of its lending. Because of its work on multiple road programs, IDA has developed a strong capacity for diagnosing bottlenecks and can recommend solutions and encourage institutional innovation (such as secondgeneration road funds) for more successful implementation of new projects and programs. 6 IDA at WORK: Transport

9 Investment projects Over the last 10 years, IDA lending for rural roads has averaged about US$1 billion per year, or 14 percent of total IDA lending. In the last ten years, there were 283 projects in the roads and highways sector of which 46 percent were in sub-saharan Africa, 12 percent in East Asia and Pacific, 14 percent in Eastern and Central Asia, 7 percent in Latin and Caribbean region, 4 percent in Middle East and North Africa, and 17 percent in the South Asia region. Results on the ground IDA credits supporting the building and maintenance of rural roads under the Indian government s PMGSY (A Prime Minister Rural Roads Program) and in many rural development projects have yielded wide-ranging benefits of road connectivity including: increase in average yield of paddy from 0.6 tons/acre to 1.7 tons/ acre; % increase in house-hold income; increase in land prices from 60 80%; modernization of agriculture and animal husbandry practices including introduction of cash crops in previously isolated areas and use of improved seeds, fertilizers, and veterinary services; reduced spoilage of perishable agricultural products; better access to jobs and increased direct and induced employment; better prices for agriculture products due to better access to markets; increase in dairy farming due to direct access of milk collection vans to the villages; 10% increase in literacy rate and narrowing down of gender literacy gap; better availability of school teachers; timely availability of medical help in pregnancy and other medical emergency cases reducing the death in such cases; and increase in new businesses and diversification of rural economy. The experiences under the above projects showed that: the client gets better value for money; the quality of construction improves; investment decisions are more rational; the business procedures and road engineering practices of road agencies improve; and there is closer attention to key sector issues like maintenance. For example, through the above projects (i) a rural road policy framework has been adopted in many states addressing key sector issues; (ii) a core rural roads network has been established in the entire country to focus investment on priority roads and to introduce rational and transparent criteria for investment decisions; (iii) cost-effective engineering designs have been introduced reducing the unit costs by about 15 percent; (iv) a maintenance management system has been established in many states and innovative methods of execution of maintenance works have been introduced; (v) private sector capacities have been used for engineering designs and supervision and capacity building of the implementing agency; and (vi) about 18,000 engineers have been trained and 400 district laboratories have been established significantly improving the implementation of the PMGSY. Some of the results of IDA operations are institutional. In a sample of 37 IDA projects implemented between 2002 and 2006, about two-thirds had a significant institutional development component. In India s state of Andhra Pradesh for example, a rural roads program, together with an economic restructuring project financed jointly by IDA and the International Bank for Reconstruction and Development, spurred the state government to adopt a policy framework for rural roads and update planning practices, construction standards, and maintenance management systems. Other results are vividly tangible. Also in Andhra Pradesh, an IDA roads project was linked to substantial growth in crop yields, cultivated land, seasonal work opportunities, and literacy rates. It also reduced spoilage of perishable agricultural products and generated better prices for farmers, as well as increased attendance at schools and health clinics. In Vietnam, IDA supported the Second Rural Transport Project completed in 2006 provided lowest IDA at WORK: Transport 7

10 IDA at WORK: Transport cost, basic road access to all communes and rehabilitate other district and commune roads in 40 project provinces; build the capacity of provinces, districts and local communes to plan and implement rural road maintenance for the long term; train private contractors; help the Ministry of Transport formulate and implement rural transport policies. The third rural transport project has now commenced. RT2, the US$103 million project supported the rehabilitation of some 7,600 kilometers of roads and 26 kilometers of bridges. Usage increased by 70 percent between 2002 and 2004 with an accompanying 12 percent drop in travel time. The roads contributed to more frequent health visits, higher school attendance and greater access to local government. The project also helped develop the private sector by allowing small private contractors to construct and rehabilitate roads. Participation of small private contractors increased from 35 percent of contracts awarded in the first year to 100 percent in the final year. Technical assistance has helped increase the effectiveness of public spending in the transport sector and helped the government to make the best use of the US$3 billion of investment expected in the sector over the years IDA is supporting the implementation of RT3 in collaboration with an initiative from the U.K. s Department for International Development that introduces evidence-based research outputs to optimize value-for money approaches using local resources and sustainable components, such as low maintenance locally sourced solutions that include for example, local aggregates. In Bhutan, an IDA rural roads project reduced the average travel time and travel costs to hospitals and markets by some 75 percent in five of Bhutan s 20 districts. Reduced travel time means villagers now send their children to non-community schools, which used to be too far to be easily reached on-foot but have become easily accessible by bus. Once a new road turned a six-hour trek into a one-hour commute, families in Kikhar sent 32 children off to school instead of just the four that had gone in the past. Local commerce, construction methods and agricultural practices have all been galvanized and transformed by villagers new proximity to markets and goods. Corrugated iron roofs are replacing banana leaf roofs, and income from sales of agricultural produce has grown on average, by 64 percent. The Second Rural Access Project in Bhutan, which built upon the success of the first project, was agreed in October It is funded from IDA Grant of US$10 million. On review of the first project the opportunity to realize similar benefits for other regions was planned. The objective of this project therefore was for the Dzongkhags communities to benefit from improved rural transport infrastructure and services. To achieve this goal the project includes the following components: 1. The Road Access Component (around US$8.7 million), which includes construction of 65 km new feeder roads and upgrading of about 24 km of existing roads to all-season, feeder road standards; and 2. The Capacity Development and Implementation Support Component (US$ 0.67 million). The target beneficiaries are about 12,000 rural residents in several geogs (blocks of villages) of Wangdue, Dagana, and Pemagtsel Dzongkhags, which have the highest demand for rural road access in Bhutan. Villagers in these geogs live within hrs or 4-62 km from an all-season road. It is expected that 60 percent of rural residents in the project targeted geogs will live within 2 km or 30 minutes of walking distance to an all-season road. The project is supporting 65 km new construction of feeder roads and improvement of 24 km of existing feeder roads, to be constructed in two phases. The project is satisfactorily running in its second year of implementation and all phase I works have been 8 IDA at WORK: Transport

11 substantially completed. The target beneficiaries have started realizing the benefits on completed stretches in terms of improvement in access to social services including education, health. The establishment of a road fund in Ethiopia in 1997 substantially increased maintenance funding. The condition of road work improved significantly. The overall proportion of roads in poor condition dropped from 53 percent in 1995 to 40 percent in 2002 and 28 per cent in 2008 that share fell from 60 percent to 37 percent for regional roads alone. In Ethiopia, since the start of the Government s Road Sector Development Program in 1997, the classified road network increased to 44,400 km in 2008 from 24,970 km in As a result of the investment, the share of federal paved roads (6,000 km in 2008) in good condition improved from 17 percent in 1997 to 68 Road Funds Road funds have emerged as one of the more popular forms of financing road sector funding gaps by pooling fuel taxes, toll fees and other resources under various institutional arrangements and oversight rules. Commercially-managed funds with financial discipline and minimum adverse impact on the state budget are considered good practice and are called second-generation funds. The Road Maintenance Initiative, one of the central components of the Sub-Saharan Africa Transport Program, a joint undertaking of the United Nations Economic Commission for Africa and several development agencies coordinated by the World Bank, as well as the establishment of road funds have helped increase maintenance funding and its stability throughout Africa. Since 1994, 26 new road funds have been set up in African IDA countries. Although the lion s share of funds from this source has gone into main roads, rural roads have also benefited. percent, and the share of the overall classified roads in good condition improved from 22 percent to 52 percent. The Road Fund, also established in 1997, substantially increased maintenance funding, and its annual revenue reached close to US$100 million in The new road funds have also helped the development of small-scale contractors. A good example is found in Tanzania where such a fund helped establish more than 2,000 new small-scale contractors. Road funds have also helped improve contract management. It now takes African road funds in Tanzania an average of 32 days to pay undisputed contractor bills, whereas in Burundi, which does not have a road fund, it takes one year. Road building can also help improve governance. IDA s rural road upgrading program in Vietnam was found to have a dramatic effect on transparency, accountability, and equity. This resulted from a combination of training provision and better means of transport, which increased the ease and opportunities for feedback and gave women better access to training. Overall, IDA s rural road projects have had strong outcomes: 90 percent of the 156 rural road projects that closed between 1994 and 2006 were rated satisfactory (well above the 70 percent average for all IDA projects), including 8 percent rated highly satisfactory. However, as most projects span several sectors, it is difficult to attribute outcomes to roads alone. Progress is typically the product of a combination of factors that include rural infrastructure, community development, and local governance. A good example of this is the IDA-supported rural infrastructure project can be found in a project in Senegal, which included substantial road improvements, strengthened decentralization, and financed micro-projects covering water, schools, and livestock, among other things. Beneficiary households in the 110 participating rural communities reported a 25 percent increase in incomes. Fiscal revenues for rural communi- IDA at WORK: Transport 9

12 IDA at WORK: Transport ties in the project area almost tripled. Markets, schools, and health facilities are now more accessible (children now typically spend 10 minutes going to school instead of 30), and the weight and height of children under three years of age has improved. Planning tools and analysis In addition to lending, the Bank has helped to develop and support the Highway Development and Management system, the most commonly-used computerized planning tool for the appraisal of road investment in developing countries. In 2004, a Bank team released the Roads Economic Decision model, Version 3.2, an easy-to-use tool for lower-volume rural roads based on the Highway Development and Management system, which is now widely-used for rural road appraisal in IDA countries. Other planning tools have been developed for calculating appropriate road user charges and databases of road construction costs and vehicle operating costs have also been assembled. Recently, a Bank team released the Road Network Evaluation Tools Model, which computes network monitoring indicators, performs an assessment of the network maintenance and rehabilitation needs, and evaluates road user charges and revenues. These have made the appraisal of rural road projects easier and better. Extensive documentation has been prepared on road funds, public-private partnerships, rural road design, rural transport planning, and rural road administration. A report on the design and appraisal of rural infrastructure has had a significant impact on the design of lowvolume traffic roads and the adoption of suitable, low-cost solutions. Officials in IDA countries have also received training courses on such topics relevant to transport as competition and regulation. IDA cooperated with external training providers such as the International Roads Union (for vehicle driver training) and the University of Birmingham (for roads management). Drawing on the World Bank s strengths IDA s strengths in supporting rural roads projects are similar to those in other sectors. They stem from IDA s global reach and experience, the synergies with other parts of the World Bank Group, and the ability to work across disciplines and across different modes of transport. Because of its convening power, its strong financial management (particularly of complex trust funds), and its linkage with investment programs, IDA is able to play a formative and leading role in global partnerships such as the Global Facilitation Partnership for Transportation and Trade, the Global Road Safety Partnership and the Sub-Saharan Africa Transport Program. The World Bank has the largest concentration of full-time transport professionals of any donor organization. Its extensive research capacity, institutional knowledge and experience put IDA it in a good position to understand the transport challenges of most countries. The multidisciplinary capabilities of IDA provide for initiatives that cut across economic sectors and include community-driven initiatives in rural areas. These comparative advantages are recognized in a number of specific areas: helping governments formulate national and rural transport policy, strategy and programs; preparing terms of reference and using technical expertise for policy analysis and project formulation; preparing, financing, and managing the implementation of investment projects that are demanding, either because of their size or complexity; 10 IDA at WORK: Transport

13 Raising awareness of the need for a comprehensive approach to improving transport services, road safety, and road maintenance, rather than just rehabilitating rural roads; providing results frameworks and metrics (such as the Rural Access Index) for rural transport investment and linking this with human and social development issues; encouraging community participation and privatesector involvement in rural roads projects; sharing global knowledge and lessons learned on institutional and financial arrangements in rural transport; developing sector-wide approaches and multi-donor cooperation for rural transport investment involving the combination of aid coordination, policy advice, and selective financial support; and assisting in locally sustainable, value-for-money solutions. to approaches that support broader government programs and policy reform. The experience in rural transport in particular has shown how important it is for transport staff to engage effectively with other disciplines in order to better achieve the Millennium Development Goals and ensure that there are equitable and sustained benefits to the poor. Going forward, key and enduring areas of IDA attention will be to ensure the financial and technical sustainability of rural and inter-urban road infrastructure, to look towards a greener infrastructure, and to encourage affordable rural transport to improve accessibility and reduce poverty. Looking Ahead In responding to the needs of IDA countries during the mid-1990s, the World Bank s transport sector tended to focus on issues related to highways, rural roads and road maintenance. Since the mid-1990s, many IDA countries have made steady progress in improving road network maintenance, which is vital for sustainability. In addition to technical support, institutional reform and capacity building have been crucial. IDA will continue to assist borrowing countries with governance issues and institutional strengthening that foster ownership and accountability. IDA is looking towards a broader framework of support. From project support for financing rural roads IDA at WORK: Transport 11

14 IDA at WORK: Transport Getting People and Traffic Moving Again in Lagos Challenge As the sixth-largest and one of the fastest-growing cities in the world, Lagos badly needed a fast, safe, and affordable public transportation system. In this teeming city of 17 million people, most of the transport services are delivered by some 75,000 individual and ragtag minibus operators in danfos (minibuses carrying 8 to 25 passengers) and molues (larger minibuses carrying 30 to 50 passengers) along with taxi motorcycles known as okadas. Most of these vehicles are unreliable and unsafe, and they add greatly to the city s pollution and chaotic traffic flow. They also present a danger to passengers and other road users because of their operators penchant for reckless driving. Yet, they remain a vital part of Lagos s transport network, and Lagosians use them for nearly 16 million trips daily in the city. Worse, public transportation costs to users in the lowest income quintile amount to over 20 percent of their disposable income. The lack of planning and management capacity contributed to the poor level of urban transport services. Improving capacity of the public transport system to cope with the population growth is clearly of critical importance for Lagos. Approach In 2002, IDA approved an Urban Transport Project for US$150 million to improve the state government s capacity to manage the transport sector in the Lagos Metropolitan Area. The project drew from best practice in Bogota (Colombia) and Curitiba (Brazil) and aimed to transform the operations of urban transport to make it safe, clean, reliable, and affordable. Within the project, IDA supported several capacity building programs in transport policy planning, and financed a study to test the feasibility of a Bus Rapid Transit scheme along a priority corridor. At the same time the Lagos state government took important steps: It created the Lagos Metropolitan Transport Authority (LAMATA), an agency with a mission to transform the state transport system. Supported the implementation of a Bus Rapid Transit (BRT) system along a 20 km priority corridor. The BRT is a bus-based mass transit system that delivers fast, comfortable and costeffective service. Through the provision of exclusive right-of-way lanes and excellence in customer service, BRT essentially emulates the performance and amenity characteristics of a modern rail-based transit system, but at a fraction of the cost; Created a dedicated funding mechanism to enable LAMATA to carry out its functions; and Offered to co-finance a major part of the infrastructure investment in the amount of about US $35 million. Results Launched in March 2008, the project provides Lagos commuters with a clean, affordable and reliable means of getting around in the city. Preliminary studies suggest that over 200,000 commuters use this bus system, which exceeds expected usage by over 100 percent. It has attracted enthusiastic new patronage, even from those who previously avoided public transport namely, the car-owning middle class, the elderly and less able, and children. The implementation of BRT system in Lagos is the first example of a comprehensive and integrated approach to improving public transport in sub-saharan Africa. Highlights In addition to safe, clean, and reliable transport, BRT passengers also enjoy a 30 percent decrease in average fares from 140 Naira (US$1.20) in 2003 to 100 Naira (US$0.80). 12 IDA at WORK: Transport

15 Reduction in travel time along the 20-km corridor from 90 minutes to 50 minutes over this period. Reduction in average waiting time from 20 minutes in 2003 to 10 minutes in Finally, the plan has created direct employment for 1,000 people, mostly graduates, and indirect employment for over 500,000 people in the state. It has also shown that local operators can run successful public transport operations, sparking keen interest about other BRT projects from local banks and financiers, as well as vehicle suppliers. IDA Contribution IDA provided financing for technical support and up-front system planning, along with investments in infrastructure. In addition, IDA support contributed to: providing confidence to the private sector and minimizing its perceived risks in undertaking Public-Private Partnerships related to investments in public transport; utilizing technical expertise for policy analyses and project formulation, coordination, and leveraging financing from other development partners (aid harmonization); and supporting Nigeria s contribution to the global efforts on climate change mitigation. In addition to safe, clean, and reliable transport, BRT passengers also enjoy a 30 percent decrease in average fares; and a reduction in average waiting time from 20 minutes in 2003 to 10 minutes in Next Steps The success of the pilot BRT project has raised expectations among city residents to extend BRT services to other parts of the city. As a result, IDA, along with the Agence Française de Développement (AFD), is developing a $300 million project to extend the BRT services along a 40 km corridor in the city, which would serve about half-million daily person trips. The project can now be held up as a good practice model for other BRT systems under preparation in SSA, including Ghana, Tanzania, Kenya, and Uganda. IDA at WORK: Transport 13

16 IDA at WORK: Transport Access to Markets and Services Increases in Rural Bhutan Challenge Of Bhutan s rural population, 42 percent live more than one-hour by foot from the nearest all-season road and half of those live between a half-day to a three-day walk from such roads. These isolated communities depend on animals and people to carry loads and have poor access to medical care and post-primary schools. Transportation costs in remote areas are between 50 and 70 times higher than in areas with motorized transport access. The high transportation costs keep farmers from diversifying crops or growing marketable crops, cause damage to perishable crops taken to the market, and limit availability of extension services, thus impeding farming output and income. Approach Construction of eight new priority feeder roads (total length of 129 km) in five of Bhutan s 20 districts, where isolated rural communities had to walk one to three days to reach all-season roads or markets, schools, health clinics, hospitals, district headquarters. Technical assistance to support the introduction and implementation of environmentally friendly road construction (EFRC) practices in rural road construction and maintenance. Institutional capacity building of both public and private sector. Results 3,771 households have been provided easier access (about half-a-day walk) to all-season roads and important socio-economic places in five districts. Travel time to important socioeconomic places and transport costs have both declined by around 75 percent. Highlights: 28 percent of the total 13,500 households (40 villages) that are in need of all-season road access in these five districts were connected by the new feeder roads. Most beneficiaries now use motorized transport services, rather than portering or animal transport for taking goods to and from markets. Transport costs have been reduced by 75 percent. Economic activity has improved: many shops have opened in the project areas and residents do not need to travel as far to purchase essential commodities. Representatives of the rural credit agency now make monthly visits to connected villages to collect and process credit requests. Residents of connected villages pay only 4-14 percent more for locally-traded goods than at the town market, while residents of control villages pay percent more than at the town market. Farmers have started purchasing new tools and new seeds to diversify their agricultural produce from mostly cereal and rice to high-valued vegetables, cash crops and fruit trees which are in higher demand than cereals at the neighboring markets. On average, income from the sale of agricultural produce has increased by 64 percent. School enrollment has increased in villages now connected to non-community schools by roads. Medical supplies and food rations are now delivered on time right to the door of the basic health units and schools. Ambulances and cars are now able to transport sick patients to district hospitals. Villagers can now use motorized transport to carry heavy construction materials, which mules and porters are not able to. Many houses, school and health unit buildings are under renovation. 14 IDA at WORK: Transport

17 IDA Contribution Total project cost was US$14.78 million. IDA contributed US$11.33 million, the Royal government of Bhutan US$2.45 million, and the Netherlands US$1 million. IDA enabled the introduction and implementation of environment-friendly approaches in road construction and maintenance. EFRC has now been adopted as a national policy, including in the forest and agriculture sectors. Next Steps A follow-up Second Rural Access Project will continue this work. In addition, it will support scaling up of community-based maintenance contracting in other districts. A socioeconomic impact monitoring study will be conducted to monitor the progress and outcomes of the project. 3,771 households have been provided easier access (about half-a-day walk) to all-season roads and important socioeconomic places in five districts. Travel time to important socio-economic places and transport costs have both declined by around 75 percent. IDA at WORK: Transport 15

18 IDA at WORK: Transport Nicaragua: Improving and Maintaining Nicaragua s Roads Challenge: Nicaragua s poor road infrastructure has long hindered access of farmers to markets and created a bottle-neck for neighboring countries to the north (Honduras) and south (Costa Rica). Hurricane Mitch in 1998 also had a devastating effect on the country s roads and trade links with the rest of Central America. Approach: The Third Road Rehabilitation and Maintenance project is one of a series of projects aimed at rehabilitating highways, improving the secondary road network, stabilizing rural roads, consolidating road maintenance and boosting participation of the private sector. The project continued the innovative use of cement blocks, introduced in a previous project, as a cost-effective, environmentally-sound alternative to asphalt, that generates significant employment for unskilled laborers. Results: About 3 million inhabitants benefited from the rehabilitation of the Managua-Izapa and Muhan El Rama highways. Over 150 km of roads were improved, resulting in lower vehicle operation costs. Highlights Rehabilitation or construction of approximately 287 km of rural roads, of which 204 km were paved using hexagonal cement blocks, with the remaining 83 km improved by means of leveling and grading of roads in selected rural areas. Improvements had a direct impact on rural transport services: fares became cheaper and the number of public transport vehicles using the roads increased. Road works generated employment in 12 departments and 24 municipalities with 23,205 direct and 8,126 indirect jobs. Direct beneficiaries included another 298,739 inhabitants living along these improved roads. 387 km of roads received routine maintenance from the newly created Road Maintenance Fund (FOMAV) and the Road Conservation Directorate at the Ministry of Transport and Infrastructure (MTI). Promoted the creation of 30 microenterprises, trained by FOMAV and later given routine maintenance contracts for secondary roads totaling 2,164 km. Private sector participation was encouraged. Rehabilitation works were implemented by international companies, including design, supervision and construction. Rural road stabilization was carried out by national companies who relied for the first time on construction crews assembled by local unemployed workers. Anecdotal evidence suggests that paving roads (for example Susucayán El Jícaro) has made transporting staple foods to market much easier, breathing life into agricultural sector microenterprises, for whose operations they are a source of manual labor. The periodic road maintenance program, directly managed by FOMAV and MIT, helped strengthen these institutions and train young Nicaraguan professionals in the transport sector. This expertise will help ensure the sustainability of the overall road system in the future. 16 IDA at WORK: Transport

19 IDA Contribution: US$ 75 million credit from IDA, complemented with US$ 7.1 million co-financing from the Government of Nicaragua. Next Steps: Project continuity has been assured with the approval in 2006 of a Fourth Road Rehabilitation and Maintenance Project (US$ 60 million) and an upcoming Fifth project envisaged in the World Bank s Country Partnership Strategy for Nicaragua. About 3 million inhabitants benefited from the rehabilitation of the Managua-Izapa and Muhan El Rama highways. Over 150 km of roads were improved, resulting in lower vehicle operation costs. IDA at WORK: Transport 17

20 IDA at WORK: Transport In Ethiopia All Roads Lead to Development Challenge: In the 1990s, the government of Ethiopia knew that a major expansion of the road network was necessary to reach its development goals, namely, (a) advance the private sector; (b) upgrade and expand essential infrastructure; and (c) conserve the environment. It needed to formulate a comprehensive, long-term strategy that would help meet its ambitious objectives. Approach: With this is mind, Ethiopia s leaders formulated the 10-year Road Sector Development Program (RSDP ), a two-phased integrated package of investments, sectoral reforms, and institutional reorganization, which was later extended to a third phase up to the end of June As the first step of a phased participation in a sector investment program, the IDA Board approved the Road Sector Development Program Support Project (RSDPSP) to help implement the government s ambitious program. The project planners first looked at the overall road sector issues, then defined policy and institutional reforms, as well as the levels of interventions that would help achieve their objectives. Eventually, RSDSP would achieve the following: Improve trunk and regional rural road access to meet the agricultural and other economic development needs; Build institutional capacity in both the public and private sectors for sustainable road development and maintenance; and Provide economic opportunity for the rural poor both through increased employment in rural road works and affordable transport and services. Results: Eleven years from the launch of RSDP I and now through the implementation of RSDP II and III, there have been some remarkable changes in both Ethiopia s road conditions and the road sector. During RSDP I, 8,709 km of roads were constructed or rehabilitated. During RSDP II, 988 km of roads were rehabilitated, 1,758 km upgraded, and 628 km constructed as new gravel roads. Meanwhile, as of September 2008, heavy or emergency maintenance was completed on 4,199 km of asphalt and gravel roads, and some 70,000 km of community roads were constructed. Now, the proportion of federal and regional roads in good condition far outweighs the proportion of roads in fair and poor condition. For the road user, this means an extended, better built and maintained road network. For the rural population it means secured access to greater resources and opportunities in the way of better markets, faster access to health services, lighter transport burdens, and more employment. Highlights The road fund annual revenue amount increased more than six-fold. The share of the annual total contract price awarded to local contractors has substantially increased, reaching 58 percent in Rural populations report smaller transport tariffs and less travel time. Opportunities for women have increased through income from labor-based works and a smaller domestic transport burden. 18 IDA at WORK: Transport

21 There has been a wider range of alternative income and diversification of agriculture, translating to higher prices for commercial sales of agricultural produce and decreased agricultural inputs. IDA Contribution: IDA s contribution to this project was in the form of an IDA credit for US$ million. IDA, with other donors, has been providing grant and credits to Ethiopia s Road Sector Development Program since So far, total Bank support is over $1.1 billion. IDA s participation has therefore been vital to the implementation of the long-term national program. PARTNERS Since the launch of the RSDP in 1997, donor coordination for the government s RSDP Phase I, II and III has been implemented through the Ethiopian Roads Authority. Partners include: the European Union, African Development Fund, Department of International Development, UK (DFID), Norwegian Development Fund, Deutsche Gesellshaft für Technische Zusammenarbeit (GTZ), (Kreditanstalt für Wiederaufbau (German Bilateral Aid), Japan, Italy, and the Netherlands. Next Steps: The government is committed to improving and extending the main road network under its Road Sector Development Program, and Phase III is scheduled for closing in June For the rural population it means secured access to greater resources and opportunities in the way of better markets, faster access to health services, lighter transport burdens, and more employment. IDA at WORK: Transport 19