Increase the focus on sustaining transport infrastructure and services in project design
- The World Bank should increase the focus on sustained transport in projects with sector reform objectives and components through measures to adopt or strengthen the financial arrangements for and enhance institutional capability to plan and carry out operations and maintenance.
- World Bank-supported projects for the intercity highways and rural roads subsector should: (i) systematically carry out exante risk analysis and mitigation with regards to operation and maintenance and funding shortfalls (ii) conduct sensitivity analysis on the effect of inadequate maintenance on net benefit flows resulting from the transport infrastructure and services and (iii) systematically evaluate the entire network or sub-network managed by the road agency to seek cost-effective rehabilitation and maintenance solutions.
- World Bank-supported projects that finance transport components and are managed by other sectors should ensure that transport components are integrated into the operations and maintenance of transport sector plans and strategies.
Sustained Transport in World Bank Group operations Sustained transport has been a longstanding concern in World Bank Group sector and a large share of the country strategies, yet the share of Bank operations with explicit objectives to sustain transport is low and declining. Further, nearly a third of Bank transport operations identified lack of maintenance funding as a risk at project appraisal.
World Bank projects with objectives to sustain transport and those that identify maintenance funding risks are more likely to support measures to improve financial viability or institutional capability, and more likely to be sustained in the long run.
Transport is less likely to be sustained in low- and lower-middle- income countries, and in projects managed by sectors other than the transport sector.
Ex ante economic analysis rarely takes into account the effect of underfunding maintenance on the benefit flows.
Highway projects, which usually depend on constrained public resources for maintenance, are not being designed to minimize maintenance needs.
Original Response: Agreed: We will enhance our focus on sustained transport, within the purview of a country-based model, by continuing to remain engaged in the Country Assistance Strategy (CAS) process, and pursuing the dialogue with client countries on sector reform. Transport projects will apply the HDM-4 (Highway Development and Management Model), with a focus on the road financing and road funds model, as well as contracting maintenance model, whenever possible.
A guidance note will be developed and endorsed by the Sector Board to establish criteria for the application of network analysis with focus on rural and urban transport. An internal review process will be established to check and report on the inclusion of risk and sensitivity analysis as well as network analysis for projects going beyond local level.
The Transport Sector Board will put in place a mechanism to review non-transport projects including significant transport components.
WB Action 1.A: When identifying transport projects, review existing maintenance policies and budgets, and include improvement actions in project design as needed.
Indicator: Percentage of PADs systematically addressing maintenance needs and policies in objectives/components.
Baseline: To be determined in FY14
Target: 80 percent of the PADs systematically addressing maintenance needs and policies by FY15.
Timeline: Annual portfolio review by the sector board /Global Practice starting in FY14.
WB Action 1.B: Corporate reviews of project documents will include checks for application of risk and sensitivity analysis
Indicator: Percentage of projects where analysis is applied
Baseline: To be determined in FY14
Target: 100 % for highway projects, 100 % for projects with spillover effects by FY15
Timeline: Monitored by Transport/ICT Global Practice annually, starting with FY15.
WB Action 1.C: Following reorganization of TWITR within the Global Practice Transport/ICT, a guidance note will be issued on how to manage transport components in non-transport projects, and disseminate it to relevant Global Practices.
Indicator: Percentage of non-transport projects including transport components which include maintenance plans.
Baseline: 30 percent
Target: 100 percent of non-transport projects including transport components (related to highway projects and projects with spillover effects) that will be reviewed by the Transport/ICT Global Practice have maintenance plans by FY15
Timeline: Annual portfolio review by the Transport Sector Board /Global Practice starting with FY14.
Regarding IA, IEG takes note that all the projects mapped to T&I GP and approved in FY17 discussed maintenance issue with 60 percent of them addressed the maintenance issue through the projects.
Regarding 1B, IEG notices that nearly 90 percent of roads projects approved applied HDM model or similar methodology on road financing issues including sensitivity analysis.
Regarding 1C, all the four non-transport projects approved in FY17 with more than 35% of funds committed to transport activities involved transport staff at different capacity, e.g., co-TTL, team member or peer reviewer. While transport staff were involved on the day to day operations of these projects, it was not clear whether these four non-transport operations included maintenance plan in their design.
1A - The review of all T&I projects approved in FY 17 indicate that of the 33 Transport projects approved, 22 were in the road sector (one of which - Nicaragua included urban roads), 4 were urban transport projects and the remaining 7 included waterways projects, logistics or aviation projects. Of the total 33 projects approved, 30 discussed maintenance needs in the sector, (with 18 explicitly addressing maintenance issues either in the objectives or project components). The remaining 3 projects that did not discussed maintenance needs in the sector because two were logistic TA and the other an additional financing covering financing gaps.
1B- The review of all roads projects approved in FY 17 indicate that of the 22 roads projects approved, 20 applied the HDM model or similar methodology focusing on the road financing issues and included sensitivity analysis that looked at the impact of variation of costs.
1C-The review of all projects approved in FY17 indicate that 4 projects not managed by T&I had transport as a sector code with 35% of more as the total commitment. The mechanism used to ensure every single of these 4 projects approved, that is 100%, had a T&I staff either as a co-TTL, a team member or a peer reviewer. T&I are intrinsically involved on the day to day operations of these projects. As the staff responsible for the transport component, the activities carried out by T&I staff include, inter alia: co-authoring project documentation and drafting the transport related matters in the PAD, identifying and defining the scope of works for transport component under project, preparing the initial project, reviewing tender documents, improving the safeguard information, designing the transport component and its implementation schedule, and monitoring the progress during supervision missions, supervising maintenance contracts for the improved infrastructure, providing transport technical advice/ guidance to Client as well as piloting new apps (like DRIVER).
IEG takes note that the establishment of the Road Asset Management and Rural Accessibility GSG and the actions that this specific GSG has been taken to enhance the financial sustainability risk identification and the improvement of project design. In making the assessment of the implementation progress of the agreed action plans, IEG would need the following information: 1) the percentage of transport projects systematically identifying risks associated with financial sustainability, having components addressing such risks, and carrying out sensitivity analysis related to the variation of the maintenance cost 2) the percentage of non-transport projects including transport components, reviewed by the Transport GP. and, 3) the mechanism for Transport GP to review the non-transport projects with transport components. While we acknowledge that the GSG Portal for Road Asset Management and Rural Accessibility, was regularly updated with the latest analysis and guidance, we would also need the management to share with us the specific guidance note which will establish criteria for the application of network analysis with focus on rural and urban transport.
IEG noticed that majority of the transport projects approved in FY16 addressed maintenance needs and used economic analysis tool to analyze the implication of maintenance cost variation. According to the additional information provided by the management, IEG understood that some of the non-transport projects involved transport staff either as co-TTLs or team members, however, it is not clear what specific support that the transport staff provided for those non-transport projects.
While FY15 saw the establishment of the Global Solutions Groups (GSGs), FY16 was a time to expand resources and deepen roles. The GSGs, together with Communities of Practices (CoPs) carried out three specific tasks related to this IEG recommendation and Management commitment for action:
1a. T&I created a dedicated GSG Portal for Road Asset Management and Rural Accessibility, regularly updated with the latest analysis and guidance. The site includes analytics, research and policy papers, as well as an operations database to inform project design and keep staff up to date on sector knowledge and related events. We expect the resources and databases available on the site to continue to expand. The GSG has also begun to review PADs that address maintenance issues, becoming involved when appropriate. We estimate that 80% of our Transport projects include some capacity building activities on asset management and planning.
Link to GSG Portal:
http://globalpractices.worldbank.org/gsg/RAMRA/Pages/en/GSGSolutionHome…
1b. Frequent and thorough portfolio review has become an increasing focus of T&I, with risk being an important component. T&I participates in the Bankwide Risk advisory group, and the Systematic Operations Risk-rating Tool (SORT) is utilized in all projects and has become part of the discussion throughout the project cycle. Almost all Transport projects utilize HDM-4 (Highway Development and Management Model) evaluation which has now been expanded to include Green House Gases analysis. HDM-4 is a critical tool used in carrying out sensitivity analysis. During Transport Learning Week (May 2016), training sessions on HDM-4 were included and the GP estimates that all technical staff are now familiar and versed in HDM-4 and its usage in carrying out risk and sensitivity analysis.
Link to Learning Week Agenda: http://globalpractices.worldbank.org/transportict/Documents/Event Materials/2016 Learning Forum Agenda.pdf
1.c Through the Road Asset Management GSA, T&I is able to advise, peer review and support, as needed, non-transport projects that include areas such as rural roads and highway maintenance.
Link to database of non-transport projects with transport components: d%20Asset%20Management%20GSG/1.%20Projects%20and%20ASA/Analytics%20and%20Research/Projects%20with%20Trade%20and%20Transport%20component/2015%2008%2026%20-%20Projects%20with%20Trade%20and%20Transport%20Component.xlsx&action=default"> http://globalpractices.worldbank.org/transportict/_layouts/15/WopiFrame…
See additional information attached
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1A
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"The review of all T&I projects approved in FY 16 indicate that of the 33 Transport projects approved, 27 discussed maintenance needs in the sector. Of those, 25 address maintenance issues either in the objectives or project components.
IEG takes note that the establishment of the GSGs. IEG also understands that sensitivity analysis is normally included in the economic analysis of the road projects and risk assessment is typically done at project preparation stage. IEG notes however that the annual portfolio review was not carried out and the guidance note was also delayed possibly because of the transition to the new GP structure. IEG seeks to get more information on the specific actions being taken by GSGs to enhance the quality of the project design, and the timelines for implementing the remaining action items, to achieve the set targets.
WB Action 1.A: FY 15 was a transition year as the GP structure was established, which included the creation of Global Solutions Group and Communities of Practice (including a Road Asset Management and Rural Accessibility GSG, an Urban Mobility GSG and a railways CoP) that will lead technical discussions in these areas. The creation of these GSG/CoP are a step in the right direction as they are expected to provide technical support to teams designing new projects to ensure alignment with best practices on the subject. The annual portfolio review has been delayed due to the transition arrangements for FY 15 as the relevant GSG and CoP will play a key role in establishing a monitoring framework (with support from the PMSO) for this purpose.
WB Action 1.B: FY 15 was a transition year as the GP structure was established, which included the creation of Global Solutions Group and Communities of Practice (including a Road Asset Management and Rural Accessibility GSG, an Urban Mobility GSG and a railways CoP) that will lead technical discussions in these areas. The creation of these GSG/CoP are a step in the right direction as they are expected to provide technical support to teams designing new projects to ensure alignment with best practices on the subject. In addition, projects under preparation include a risk assessment of different variables that could impact the achievement of the PDOs using the corporate tool (SORT) whereby these type of issues would be considered and taken into consideration. In particular, in the case of roads projects the economic analysis that is normally carried out with the HDM would consider this risk and sensitivity analysis. The review has been delayed due to the transition arrangements for FY 15 as the relevant GSG and CoP will play a key role in establishing a monitoring framework for this purpose (with support from the PMSO).
WB Action 1.C: FY 15 was a transition year as the GP structure was established, which included the creation of Global Solutions Group and Communities of Practice (including a Road Asset Management and Rural Accessibility GSG, an Urban Mobility GSG and a railways CoP) that will lead technical discussions in these areas. The creation of these GSG/CoP are a step in the right direction as they are expected to provide technical support to teams designing new projects to ensure alignment with best practices on the subject. The guidance has been delayed due to the transition arrangements for FY 15 as the relevant GSG and CoP will play a key role in assessing this need and carrying out such activity.
IEG acknowledges that the newly established transport and ICT Global Practice is setting up thematic groups that will be mandated to increase the focus on sustaining transport infrastructure and services in project design. While this initiative is welcome, IEG seeks to understand how the performance of the thematic groups would be assessed in carrying out their tasks to increase the sustainability focus in the transport project portfolio. This would require the collection of baseline information, which could be extracted from the recent IEG evaluation, or the practice could collect a new baseline as of its establishment. Progress against the pre-defined targets in terms of "percentage of PADs systematically addressing maintenance needs and policies in objectives/components", "percentage of projects where risk analysis is applied", and "percentage of non-transport projects including transport components which include maintenance plansâ would need to be reported in future MARs.
The management response to the original MAR included its commitment to develop a guidance note to establish criteria for the application of network analysis with focus on rural and urban transport. Furthermore, an internal review process was to be established to check and report on the inclusion of risk and sensitivity analysis as well as network analysis for projects going beyond local level. IEG seeks to receive progress update on these activities.
As part of the new Global Practices setting, a Thematic Group on Road Asset Management and Rural Roads will be established within the Transport and ICT Global Practice. Part of its mandate will be to carry on strengthening roads and highways projects in terms of operational and financial sustainability. Systematic use of the HDM sotware is alreasy well mainstreamed and the Bank is starting working, with the World Road Association (PIARC), on further developments of the HDM tool that will enhance its ability to devise cost-effective maintenance planning.