ICR27 Document of The World Bank Report No:ICR000027 IMPLEMENTATION COMPLETION AND RESULTS REPORT ( IDA-33090 ) ON A CREDIT IN THE AMOUNT OF US$ 11.6 MILLION (SDR 8.5 MILLION) TO Bhutan FOR RURAL ACCESS PROJECT November 29, 2006 South Asia Sustainable Development Department Bhutan Country Unit This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. CURRENCY EQUIVALENTS ( Exchange Rate Effective 11/29/2006 ) Currency Unit = Nu Nu 1.00 = US$ 0.02 US$ 1.00 = Nu 44.54 Fiscal Year July 1 - June 30 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDB Construction Development Board DADM Department of Aid and Debt Management DCA Development Credit Agreement DOR Department of Roads EA Environmental Assessment EFRC Environmentally Friendly Road Construction EMP Environmental Management Plan ERR Economic Rate of Return FY Fiscal Year ICR Implementation Completion and Results Report IDA International Development Association IDD Investigation and Development Division ISR Implementation Status Report M&E Monitoring and Evaluation MOWHS Ministry of Works and Human Settlement NBAD National Budget and Aid Coordination Division NEDA National Economic & Development Authority PAD Project Appraisal Document PDO Project Development Objective PMR Project Management Report PMU Project Management Unit PPD Policy and Planning Division QAG Quality Assessment Group QER Quality at Entry Assessment RAP Rural Access Project RGOB Royal Government of Bhutan RSMP Road Sector Master Plan SA Social Assessment SBD Standard bidding document SNV Netherlands Development Organization TA Technical Assistance Vice President: Praful C. Patel Country Director: Alastair J. McKechnie Sector Manager: Guang Zhe Chen Project Team Leader: Binyam Reja Bhutan RURAL ACCESS PROJECT CONTENTS 1. Basic Information........................................................................................................ 1 2. Key Dates.................................................................................................................... 1 3. Ratings Summary........................................................................................................ 1 4. Sector and Theme Codes ............................................................................................ 2 5. Bank Staff ................................................................................................................... 2 6. Project Context, Development Objectives and Design............................................... 3 7. Key Factors Affecting Implementation and Outcomes .............................................. 6 8. Assessment of Outcomes.......................................................................................... 11 9. Assessment of Risk to Development Outcome......................................................... 16 10. Assessment of Bank and Borrower Performance ................................................... 16 11. Lessons Learned...................................................................................................... 18 12. Comments on Issues Raised by Borrower/Implementing Agencies/Partners......... 19 Annex 1. Results Framework Analysis......................................................................... 21 Annex 2. Restructuring (if any) .................................................................................... 23 Annex 3. Project Costs and Financing.......................................................................... 24 Annex 4. Outputs by Component.................................................................................. 26 Annex 5. Economic and Financial Analysis (including assumptions in the analysis).. 28 Annex 6. Bank Lending and Implementation Support/Supervision Processes............. 39 Annex 7. Detailed Ratings of Bank and Borrower Performance.................................. 41 Annex 8. Beneficiary Survey Results (if any) .............................................................. 42 Annex 9. Stakeholder Workshop Report and Results (if any)...................................... 43 Annex 10. Summary of Borrower's ICR and/or Comments on Draft ICR................... 44 Annex 11. Comments of Cofinanciers and Other Partners/Stakeholders..................... 59 Annex 12. List of Supporting Documents .................................................................... 66 MAP.............................................................................................................................. 67 1. Basic Information Country: Bhutan Project Name: RURAL ACCESS PROJECT Project ID: P059481 L/C/TF Number(s): IDA-33090 ICR Date: 12/21/2006 ICR Type: Core ICR Lending Instrument: SIL Borrower: KINGDOM OF BHUTAN Original Total Commitment: XDR 8.5M Disbursed Amount: XDR 7.5M Environmental Category:B Implementing Agencies Ministry of Communications Cofinanciers and Other External Partners Netherlands Development Organization (SNV Buthan) 2. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/08/1999 Effectiveness: 05/24/2000 05/24/2000 Appraisal: 06/28/1999 Restructuring(s): Approval: 12/21/1999 Mid-term Review: 02/14/2005 06/17/2003 Closing: 04/30/2005 06/30/2006 3. Ratings Summary 3.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory 3.2 Quality at Entry and Implementation Performance Indicators Implementation Performance Indicators QAG Assessments (if any) Rating: Potential Problem Project at any Highly time (Yes/No): No Quality at Entry (QEA): Satisfactory Problem Project at any time (Yes/No): No Quality of Supervision (QSA): None DO rating before Closing/Inactive status: Satisfactory 1 4. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 12 12 Roads and highways 88 88 Original Priority Actual Priority Theme Code (Primary/Secondary) Participation and civic engagement Secondary Secondary Rural policies and institutions Secondary Secondary Rural services and infrastructure Primary Primary 5. Bank Staff Positions At ICR At Approval Vice President: Praful C. Patel Mieko Nishimizu Country Director: Alastair J. McKechnie John W. Wall Sector Manager: Guang Zhe Chen Frannie A. Leautier Project Team Leader: Binyam Reja Thampil Pankaj ICR Team Leader: Surendra Govinda Joshi ICR Primary Author: Natalya Stankevich 2 6. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative) 6.1 Context at Appraisal (brief summary of country macroeconomic and structural/sector background, rationale for Bank assistance) Bhutan 's difficult terrain makes the provision of physical and social infrastructure services an expensive and difficult proposition. Bhutan 's development strategy is guided by the Vision Statement of Royal Government of Bhutan (RGOB) articulated in "Bhutan 2020: A Vision for Peace, Prosperity and Happiness," which puts human happiness, not only economic growth, at the center of the nation's development. Hydropower development and export of power is the main means for financing social and economic infrastructure development. In recent years, Bhutan has been able to develop roads, power supply, telecommunications, and water supply to serve a growing share of its population, and improve the population's access to education and health services. Preserving the cultural heritage, country's forest cover, and its rich biodiversity is at the center of Bhutan 's development strategy. The country has a well-developed community- based participatory planning system, which is the basis to select regional priorities for development, including rural roads. Road accessibility. According to Bhutan 's Population and Housing Census of 2005, 21 percent of rural households live within one to four hours of walking distance from the nearest all-season road, and another 21 percent live within more than four hours and up to three days. Mule transport costs about US$3 per ton per km compared to US$ 0.1 per ton per km by road. The long distance prevents farmers from crop diversification and growing of marketable cash crops, causes damage to perishable crops taken to the market and poor availability of extension services etc., impeding farming output and income. Poor road links reduce access to medical facilities, resulting in more deaths and more sick days out of work. Most important, poor road access leads to low school enrollment and lack of upgrading of school facilities in inaccessible areas, since all construction materials have to be carried on expensive mule-hauls and some construction equipment cannot be so transported. Rural access improvement is critical for the sustainable development of the agricultural economy, connecting the scattered rural communities with the main stream of the national life and improving the quality of life. Management of the Road Sector. Road infrastructure in Bhutan is the responsibility of the Department of Roads (DOR) in the Ministry of Works Human Settlement (MOWHS). The network under DOR management includes some 3,433 km (i.e., 1,579 km of national highways, 459 km of districts roads, 1,270 km of feeder roads and 125 km of urban roads). DANTAK, a border road organization of the Government of India, oversees 595 km of roads which will be gradually transferred to DOR. 571 km of forest roads and 389 km of farm roads are under the responsibility of the Departments of Forest and Ministry of Agriculture. In addition, local and farm roads, and mule tracks are managed by local government agencies. 3 6.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The project development objective (PDO) was to improve the access of rural communities to markets, schools, health centers and other economic and social infrastructure in order to improve the quality of life and productivity of rural communities. The project was also aimed to help strengthen institutional capacity for implementing environmentally friendly approaches to improve rural access, community involvement in rural roads selection and management, and improved infrastructure maintenance. The PDO was to be achieved by financing sustainable maintenance and rehabilitation of feeder roads and construction of economically justifiable feeder roads, subject to the adoption of environmentally sustainable construction and maintenance practices. The PDO was to be monitored by the following indicators: A. Average travel time and transport costs in project areas (to be reduced by a minimum 50%) B. Reduced distance to health and education services; C. Higher enrollment of in primary and junior schools in the corridor of impact; D. Improved road maintenance system through involvement of local communities; E. Dzongkhag (district) rural access master plans prepared using participatory processes and endorsed by people's representatives; F. Wider acceptance of environmental safeguards in construction and maintenance practices. A socioeconomic impact monitoring study was included in the design of the project to assess the achievement of the above outcome indicators, as well as other more indirect impacts of the project on beneficiary groups. The impact study included a baseline survey before project implementation, and two repeat surveys on the same households and communities during and after project works were carried out. 6.3 Revised PDO and Key Indicators (as approved by original approving authority), and reasons/justification The Project Development Objectives and Key Indicators were not revised. 6.4 Main Beneficiaries, original and revised (briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The primary beneficiaries of the project were the isolated rural communities living in five dzonkhags (districts): Zhemgang, Lhuentse, Trasi Yangtse, Trashigang, and Mongar. 4 According to the baseline survey, the project was to benefit 3400 households living in 39 villages of the above districts, and to bring these households within less than half a day walk to the nearest road head. This would in turn help households to be connected with public transport services and have easier access to markets, health and education services. The project had a direct impact on improving agricultural productivity, which in turn supported the diversification of cash crops and increased profitability and income from agriculture. The secondary beneficiaries of the project were the Department of Roads (DOR) headquarter and field staff, and the incipient construction and consulting industry in Bhutan. The institutional strengthening component included training and capacity development program for the introduction and adoption of Environmentally Friendly Road Construction (EFRC) methods in road construction and maintenance. All key stakeholders, including senior policy makers, DOR staff, contractors and consultations, were provided with extensive training on the EFRC concept and its application in road construction and maintenance. 6.5 Original Components (as approved) The project had the following components: Component 1: Construction of New Priority Feeder Roads of 122 km length (Estimated Total Cost: US$12.5 million). Civil works were to be executed following EFRC methods. Component 2: Office and Transport Equipment for DOR (US$0.3 million). This included survey equipment, office equipment and vehicles to provide logistic support for project monitoring and supervision. Component 3: Project management assistance, training and technical assistance (US$1.5 million). These inputs were expected to assist during the introduction and dissemination of environmentally friendly design and implementation practices for rural road construction and maintenance, for institutional capacity building of both public and private sectors (including community contracting), and for project implementation support. All project roads were selected from the priority list included in the Eighth Five-Year Plan, which was prepared through community participation and consultation. Although the project was not a "poverty targeted" operation, the candidate roads were located in some of the poorest areas in the country and served areas with poor road access. Support for the introduction and adoption of EFRC method was to be provided by the Netherlands Development Organization (SNV) Technical Assistance (TA) program, funded from the Government of Netherlands under the Integrated Sustainable Development Program. In addition, SNV TA program provided support for piloting community contracting for the maintenance of the first 15 km of the Dakpai-Buli road. 5 6.6 Revised Components None of the project components was revised. 6.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) There were some changes in the selection of candidate roads. Three small candidate roads tentatively identified at appraisal were dropped because of severe geological problems and unstable slope in some sections of the project areas. Instead, the Yadi ­ Shershong road (7 km) in Mongar Dzongkhag was selected from the road priority list of the Eighth Five-Year Plan. After the changes in candidate roads, the total road length constructed came to 129 km against the appraised length of 122 km. This change was allowed under the provision of the Development Credit Agreement. In addition, the heavy monsoon in 2004 caused landslides, which required remedial works to remove material as well as stabilize slopes to prevent future rock fall. A detailed geo-technical investigation was carried out to develop remedial measures. The study and the remedial works were financed from the savings of the project, which largely came due to the depreciation of the US Dollar against the SDR. With IDA's concurrence, the Credit savings enabled DOR to also procure additional traffic safety barriers for the project roads to improve their safety aspect and additional equipment for the newly- established Investigation and Development Division, which explains the increase in the final expenditures of the equipment component. The Credit closing date was extended by 14 months from April 30, 2005 to June 30, 2006 to accommodate delays in the construction works and implementing remedial geotechnical measures recommended by the geotechnical investigation. 7. Key Factors Affecting Implementation and Outcomes 7.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable) Project Design and Flexibility. This was the first road project financed by the Bank in Bhutan. Therefore, the project design was kept simple and focused, and took into account the unique set of circumstances in Bhutan, including its small country size, good governance, and well-known commitment by the government to preserve the environment and the country& 8217;s cultural heritage. In addition, the project design took into account the lack of public sector experience in contract management and the private sector& 8217;s infant stage in road construction and consultancy. The IDA Guidelines were to be applied with appropriate flexibility to make the project design simple and fit into the unique circumstances of the country. Risks and Mitigation Measures. All risks were properly identified and mitigation 6 measures developed. The main risk identified during appraisal was related to lack of prior experience and familiarity with the new concept, which could have been an impediment to successful introduction and implementation of EFRC in road construction and maintenance. To mitigate this risk, the project developed EFRC-related procedures and guidelines, including Environmental Code of Practice, and provided for close monitoring and evaluation of contract clauses and Environmental Management Plan. RGOB and DOR showed exceptionally high commitment to the EFRC method and mainstreamed it within the country's environmental guidelines and policies (see Section 7.4) Participatory process. The project design reflected RGOB& 8217;s established practices to involve communities in planning, implementation and management of development projects. The identification of the project roads was preceded by a decentralized planning exercise involving communities at geog (block) and dzongkhag (district) levels. The Social and Environmental Assessments were also useful to inform the communities about the project and its impacts (favorable and adverse) and solicit their views on mitigation measures, suggestions and roles they could play. The Borrower followed good participatory procedures in compensating project affected persons and published norms for deciding on compensation, including land-for-land, cash-for-land, or combined options. Quality at Entry. A Quality at Entry Assessment (QEA) of the project carried out by Quality Assurance Group (QAG) in March 2000 rated QEA as "Highly Satisfactory" citing the strengths of government ownership, unique and participatory manner of project participation, inclusion of many elements of the best practice in its social, environmental, and economic evaluations. The ICR broadly concurs with the QAG assessment. The project had very clear objectives, an innovative approach and a simple design. However, it could have had a higher degree of readiness before credit negotiation, including having detailed engineering designs prepared in advance of the start of first-year works. In addition, the project could have benefited from detailed geotechnical investigation and better identification of geological risks associated with the fragile terrain along some of the roads financed. These could have helped avoid delays and geological problems identified during project implementation. 7.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) Project implementation was satisfactory, with very little disruption. The strong ownership by DOR and RGOB ensured effective project implementation. There were, however, some unavoidable issues related to the fact this project was the first major road project funded by IDA in Bhutan. Four factors that adversely affected project implementation are: · Weak Contractor Capacity. The project was the first major roads project executed by contractors. Prior to this project, most road works were carried out by 7 DANTAK (a border road organization of the Government of India) or using the force account arrangements. Because of their infant stage, most of the contractors faced technical capacity constraints and lacked proper construction management skills and experience in resources planning. As a result, some contractors had fallen behind schedule and required contract time extensions. During project implementation, a Construction Industry Capacity Assessment was carried out in close consultation with the Bhutan Construction Development Board and the Construction Association of Bhutan to identify the weaknesses of the contracting industry and develop a set of recommendations and an action plan. DOR has started implementing the study recommendations to enhance the technical capacity and organization of the local contractors. · Vertically Disintegrated System of Contracting. At the initial implementation stage, DOR followed a vertically disintegrated system of contracting, whereby four separate contracts were awarded for opening the road, building structures, surfacing and bioengineering to different contractors on the same stretch of the road. The main reasons for choosing this system were (i) technical considerations due to uncertainty of future construction requirements and (ii) weak capacity of the emerging local construction industry. However, this system did not enable the contractors to use resources efficiently and resulted in the PMU incurring high transaction costs to administer a large number of contracts of small sizes. Later this system was changed to a more conventional integrated contracting system, whereby all works were awarded in one package for the same stretch of the road. · Geotechnical Problems in Project Roads. During the heavy monsoon rains of 2004, a number of landslides and geological problems surfaced in some sections of the project roads. This required extensive mitigation measures that could have been much less extensive if better up-front geo-technical investigations had taken place and reflected in the design. The international consultant hired by DOR prepared detailed recommendations, including engineering designs and cost estimates, for mitigation of the landslides and other geo-technical problems. Local contractors were hired to execute these works. · Ineffective structure of the implementation arrangements. The project site engineers reported to the Executive Engineers of the respective field offices, but the Executive Engineers were not part of the project management team and did not report to the Project Manager in Thimphu. These resulted in poor communication between HQ and field staff, and diluted the responsibility and accountability arrangements for quality assurance and implementation progress. During the early period of the project implementation, the PMU had very little 8 field presence, feeling that supervision of works rested only with field offices. However, during the latter part of the project implementation, the PMU staff were adequately empowered by DOR and made numerous site visits, which helped to expedite project implementation and compliance with the quality assurance provisions. 7.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization The primary monitoring and evaluation system was well established for the project. It was primarily focused on the use of the socio-economic impact monitoring study, which included a baseline survey and two repeat surveys during the project implementation of the project. In addition, the project had monitoring indicators for outputs and inputs. However, the outcome indicators proposed in the PAD were not fully measurable, and the socio-economic monitoring study was adjusted to focus the surveys on the indicators that are measurable, and whose impacts could be attributed to the project. The results of the socio-economic impact monitoring study are summarized in Annex 5. 7.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable) Safeguard compliance is rated satisfactory. Environmental aspects. The project was Category B for environmental safeguard requirements. During project preparation a comprehensive Environmental Assessment (EA) was prepared for the Lhuntse-Dungkhar road and was taken as a model for the remainder of the project roads. Prior to undertaking any civil works, DOR, with the help from SNV TA program, carried out EA and developed Environmental Management Plans (EMP). In addition, DOR developed Environmental Code of Practice (ECOP) for managing environmental impacts for road construction design and implementation. Given the good track record in environment impact management, Bhutan has been selected as a pilot country to adopt the country system for environment management . A Bank team has completed its gap assessment, and has recommended to use Bhutan's own environment policies and procedures for the proposed Second Rural Access Project. Social aspects. A Social Assessment (SA) was carried out as part of the project preparation using participatory and survey methodologies in the project areas of Zhemgang, Lhuentse, Trashi Yangtse and Trashigang Dzonkhags. The SA indicated an enthusiastic and overwhelming positive response from the communities for the project. A Resettlement Action Plan was prepared for the Dakpai-Buli road as a model study and all other project roads were required to develop a similar plan. By the closure of the project, all social mitigation measures including land acquisition and resettlement were completed in accordance with the agreed Resettlement Action Plan. 9 Fiduciary compliance is rated moderately satisfactory. Disbursement. Similar to other projects in the Bhutan lending portfolio, credit disbursement was slow and lagged behind physical completion. The delays were in part due to the de-concentrated nature of the project implementation arrangements, wherein DOR field offices did not adequately follow through with the submission of claims. There was a lack of effective communication among RGOB specialists on financial management and procurement, delays in certification of works by the project site engineers and delays in the submission of claims by contractors. Replenishment of the Special Account was sometimes affected by the Department of Aid and Debt Management's (DADM) delays in submitting disbursement claims because the field project implementation units often provided DADM with inadequate or incorrect information. Accountants at the project sites faced capacity constraints to handle project reporting requirements. The Bank's disbursement staff often traveled to Bhutan to provide training to RGOB and DOR staff on Bank disbursement procedures and requirement. With respect to audit compliance, the project did establish a good track record for submitting quarterly Financial Management Reports (FMRs) on a timely basis. Audit reports generally did not include significant auditor observations. As of September 30, 2006, the disbursements stood at SDR 7,926,092.42against the original credit of SDR 8.5 million or 94 percent. The undisbursed balance of SDR 573,907.58 is cancelled effective November 24, 2006. Procurement. Procurement of works, goods and services was carried out in accordance with Bank guidelines. The bidding process was arranged in a competitive and transparent manner. Since the local construction industry was in its infant stage, the qualification criteria set by the Bank were higher than the industry was capable of meeting in order to qualify for the bidding. As a result, some qualification requirements had to be relaxed to attract bids from local contractors, and the Bank provided a number of exceptions in issuing no objection letters for the award of contracts. DOR's procurement capacity improved significantly during the implementation of the project. DOR staff handled procurement tasks efficiently and proved proficient in preparing tenders and evaluation of bids. However, the procurement procedures, which require multiple reviews and approval at the highest level, even for small size contracts, caused significant delays in contract evaluation and award. RGOB is currently reviewing the various thresholds for contract review and approval. 7.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) Maintenance of the newly built feeder roads. Maintenance and operation of completed road is handled by the National Workforce under DOR's force account and the pilot community contracting for the first 15 km of the Dakpai-Buli road. The follow-up project will support community contracting on the two RAP road corridors - Gomkora- 10 Tomzanhangtsen and Bartsam-Ramjar - where communities have sufficient labor willing and able to work in road maintenance. The only difference in this contracting model in the follow-up project will be that the communities will have to register as petty contractors to have the same rights and obligations as other private contractors.Therefore, the maintenance of completed roads will continue to be carried out under the National Work Force and through community contracting. Follow-up operation . Considering the positive economic and social impacts of the RAP, RGOB has requested the Bank to support a follow-up project. The proposed Second Rural Access Project is currently under preparation and will be processed as a 'repeater' following a more streamlined procedure. The proposed RAP II will have the same objectives as RAP I, and will expand rural access improvements in three additional dzongkhags, which are ranked as high priority in the Road Master Plan of 2004. RAP II, which is expected to be approved by the Board in FY07, will follow EFRC approach and continue the capacity development program for DOR and the local construction industry. 8. Assessment of Outcomes 8.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) The project's relevance is rated highly satisfactory. The project remains highly relevant to RGOB's current Ninth Five-Year Plan (FYP) and the IDA Country Assistance Strategy (CAS) for Bhutan for 2006-09 (endorsed by the Board in November 2005). Both RGOB's Ninth FYP and the CAS make improving rural accessibility a defining development issue and give high priority to support improvements in rural road expansions. The RAP is also in line with RGOB's policy to preserve the environment and promote private sector development. The project development objectives are also aligned with global priorities, including the Millennium Development Goals related to poverty eradication, access to education and health services, and environmental sustainability. 8.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 4) The achievement of the PDO is rated highly satisfactory. The project achieved its objectives to improve access, and in doing so, improved the quality of life of the rural communities and productivity of the agricultural sector. The Socioeconomic Impact Monitoring Study has documented many of the project's achievements and results, and the study's main findings are summarized in Annex 5 and highlighted below. (A) Improved access of previously isolated rural communities to markets, schools, health centers and other economic and social infrastructure (Achieved). Shift from head loading and animal transport to motorized transport. Access to 11 economic and social services centers has become easier, faster and cheaper for residents of 39 villages in the five project dzongkhags. 3,771 households (compared to 3,400 projected at appraisal) are in half a day walk to the nearest roads compared to 1-3 days before the road was open. Motorized transport services (by taxi, truck or bus) are available on most of the roads. The Department of Transportation and Safety in the Ministry of Communication has started providing scheduled bus services on the Dakpai- Buli road (five times a week) and planed to do the same in other project roads, where the private sector is currently providing services. Most beneficiaries now use motorized transport services, rather than portering or animal transport for transport of goods and supplies to the markets. The modal shift has resulted in preventing damage and loss of farmers' produce during transportation. Porters and animal transport can lead to up to 50 percent loss or damage. Significant reduction in travel time and transport costs. Travel time to reach hospitals and markets has been reduced by 76 percent (versus 50 percent as set at appraisal), on average, and transport costs has declined by 75 percent (versus 50 percent as set at appraisal). The travel time to school in the neighboring villages has declined from more than six hours to around one hour. While RGOB gives priority to increasing access to basic education in remote areas, largely through the establishment of new community schools, the construction of new roads is important as a means of supporting increased enrollment, particularly at the post-primary levels of education when children are older and can travel more independently. This is particularly the case for girl students who way be less inclined to continue their studies if they require boarding facilities. Reduced distance to economic and social services. Many shops (e.g., 12 shops in Buli, one shop in Gomphu) have been opened in the project areas and households do not need to travel outside their village to purchase some essential commodities. Rural credit services have also come to the project villages. Representatives of the rural credit agency make monthly visits to the villages to collect and process credit requests. (B) Improved quality of life of the rural communities (Achieved). Improvement in social services. Medical supplies and food rations are now delivered on time right to the door of the basic health units and schools. Ambulances easily reach villages to transport sick patients to the hospitals. Most of the schools in the project villages are either renovating or expanding their facilities. Three have been upgraded from primary to junior high schools, two more are to be upgraded and a few new schools are to be built in the project areas. Improvement in the quality of housing. With availability of motorized transport service to bring construction materials, many beneficiaries have started renovating their houses and improving sanitary conditions, including replacement of banana leaf roofs with corrugated galvanized iron (CGI) sheets and installation of water standpipes and latrines. Reduction in prices for consumption commodities in villages accessible by roads. Prices for consumption commodities have been significantly reduced in the villages 12 connected by roads. Residents of connected villages pay 4-14 percent more than in the town, where they used to go before the project, while residents of control villages (not connected by roads) pay 14-30 percent more than in town. (C) Improvement in the productivity of the rural communities (Achieved). The improved access to markets has created an incentive for villagers to invest in upgrading their tools and improvement of agricultural outputs. Many of the beneficiaries have applied for farmer's credit and started approaching the Renewable Natural Resources (RNR/agriculture extension) centers more frequently for professional agricultural advice. According to the socio-economic impact monitoring study, visits to the RNR centers have more than doubled in the project areas since the roads were opened. Diversification of crops. Most of the farmers have diversified their agricultural products from mostly cereal and rice to high-valued vegetables (e.g., broccoli, cauliflower), cash crops (e.g. chili pepper, potato) and fruit (e.g., walnut, orange). Some farmers have reduced land areas under cereal and expanded orchards and new cash crops, which are in higher demand in neighboring markets. Most farmers have increased the number of fruit trees and introduced new seeds (e.g., orange, pear, peach, walnut, and apple). Increase in income from the sale of agricultural and farm produce. With the improved road access, farmers are able to take their harvest and produce to markets in a shorter period of time and without damaging their products while traveling. This has enabled farmers to increase the volume of their products and earn higher revenues from the sale of their produce. According to the socioeconomic impact monitoring study, project beneficiaries have enjoyed 64 percent increase in income from the sale of agricultural produce. Revenues have increased by more than 100 percent, particularly from the sale of maize and different sorts of vegetables. In addition, sales of newly introduced cash crops (e.g. chilli, potato) have also significantly contributed to increases in farmers' incomes. Revenues from the sale of butter have increased 29 and 60 percent, respectively, in the Yadi-Shershong and Gomphu road corridors; revenues from the sale of cheese have increased by 43 and 140 percent, respectively, in the same corridors. (D) Wider acceptance of environmental safeguards in construction and maintenance practices (Achieved). This project has succeeded in raising considerable awareness regarding the need to adopt environmentally sustainable construction practices. Many important generic outputs have been generated to promote EFRC, such as Environmental Codes of Practice (ECOPS) and EFRC guidelines, standard bidding documents, etc., which have found a wider application in road development projects in Bhutan . The National Environmental Commission has now mandated EFRC application in all road projects under the responsibilities of different agencies, including DOR, Ministries of Forestry and Agriculture, and dzongkhag administrations. 13 (E) Involvement of local communities in road planning and maintenance activities (Partially Achieved). As the planning process in Bhutan is organized from bottom to top, local communities were involved in identifying priority feeder roads, which were later included in the National Transport Master Plan. The RAP piloted a community contract on the first 15 km of the Dakpai-Buli road. The pilot was successful and the contract was renewed for another year. Although DOR plans a scaling-up of the community contracting module on other roads, this may be difficult because of the shortage of labor in the countryside. (See Annex 4 for Outputs by Components and Annex 5 for more details on Outcomes of the Project.) 8.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return) Efficiency in achieving the project objectives in terms of economic rate of return is highly satisfactory. The ICR followed the PAD methodology in calculating the economic rate of return and investment per capita for all project roads. The PAD established a cost-effectiveness threshold of US$ 560 per beneficiary corresponding to an ERR of 12 percent for economic viability of the project roads. The ICR analysis determined that the actual average investment per beneficiary in all the project roads was much lower - at US$365, which means that the delivered ERR was higher than the ERR estimated at appraisal. The per beneficiary investment in the roads ranged from US$210 up to US$ 603. The Lhuentse-Dungkhar road had the highest investment per beneficiary (US$603) due to escalation of costs and additional civil works which were undertaken as a result of the geological and geotechnical problems caused by the heavy monsoon season in 2004. However, per beneficiary investment in the Lhuentse-Dungkhar road was still above the norm suggested for exceptional cases in the PAD: US$650 corresponding to ERR of 10 percent. Length, Latest Estimate Number of Investment per km Nu US$ Beneficiaries* beneficiary, US$** Civil Works 128.76 557,802,736 12,569,352.75 34,434 365 Construction of Dakpal- 36.6 Buli Road 124,411,717 2,803,454.79 7,840 358 Construction of Lhuentse 39.8 Dungkhar Road 208,612,168 4,700,801.47 7,801 603 Construction of other 32.38 feeder roads 134,167,019 3,023,277.73 14,366 210 Construction of Trashi 19.98 Yangste Road 90,611,833 2,041,818.76 4,427 461 Notes: * The number of beneficiaries is equal to the number of residents from the project affected villages plus 10% to include other beneficiaries who directly benefited from trade or visits to the newly accessible areas. This is in accordance with the PAD methodology. ** Exchange rate: US$1=Nu 44 8.4 Justification of Overall Outcome Rating 14 (combining relevance, achievement of PDOs, and efficiency) Rating: Satisfactory The overall outcome is rated satisfactory given the high relevance and efficiency of the project, and achievement of the project objectives. The project remains highly relevant to the RGOB's and the CAS development priorities for improving rural access. Achievement of the project was successful: all targets were either met or exceeded, and secondary impacts, as established by the monitoring study, were substantial and include: (i) diversification of the rural economy; (ii) increase in agricultural productivity and farmers' incomes; (iii) reduction in prices for consumption commodities; and (iv) improvement in the welfare of the rural beneficiaries. The project was highly efficient, as the actual investment per beneficiary of US$365 was significantly lower than the projected US$560. 8.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development Poverty Impacts, Gender Aspects, and Social Development are rated satisfactory. See Annex 5, Socioeconomic Impact Monitoring Study . (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) Strengthened institutional capacity of the DOR in EFRC implementation, contract management and road infrastructure maintenance (Achieved). The institutional component helped DOR and its field offices in the five dzongkhags build and strengthen their capacity to implement EFRC to improve rural access, promote community involvement in rural road selection and management, and ensure sustainable rural road maintenance in road projects. The new Investigation and Development Division consisting of Environmental and Geotechnical Units was established with the responsibilities of development of standard specifications and quality assurance requirements, field investigations for the compliance with the standards, geotechnical investigation and support and environmental safeguard aspects. Training programs, including post-graduate studies, short-term courses, study tours and local workshops, were organized and delivered to train DOR staff in contract and construction management, procurement, financial management, and environmentally friendly construction methods. (c) Other Unintended Outcomes and Impacts (positive or negative, if any) None. 8.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 15 (optional for Core ICR, required for ILI, details in annexes) The socio-economic monitoring study conducted beneficiary surveys at three stage of the project life: during preparation, implementation and after completion. Brief findings of these beneficiary surveys are provided in Section 8.2 and more details are given in Annex 5. 9. Assessment of Risk to Development Outcome Rating: Low or Negligible The risk to the development outcome is assessed as low. Risk to the conditions of the new roads is low as the roads were built following the EFRC methods and mitigation measures recommended by the geotechnical studies were implemented to minimize landslide hazards. Routine maintenance, which is one of the top priorities of RGOB, is regularly executed through the National Workforce and community contractors on the entire road network and is funded from the budget specially designed for this purpose. The monsoon damage restoration budget is also available to address damage to roads stemming from the annual monsoon rains. With the support and commitment of RGOB to EFRC, the institutional capacity of DOR and other road agencies continues to be strengthened to mainstream environmentally sustainable approach in the construction of roads, including forest and farm roads. However, DOR needs to improve its technical and resource capacities in order to enforce quality assurance in future road projects. Risk to the sustainability of the community-based road maintenance contracting is moderate. Communities increasingly are experiencing a shortage of labor as they have to contribute to the implementation of many development activities being implemented at the community level ­ many of which have been made possible through increased access using new roads. 10. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) 10.1 Bank (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Satisfactory IDA's performance at the identification and preparation stage is rated satisfactory. Since the project was IDA's first rural access project in Bhutan , the team conducted rigorous preparations. The project design took into consideration not only lessons from rural road projects supported by the Bank in other countries, but also the unique set of circumstances in Bhutan, and RGOB's environmental and rural infrastructure policies and commitment to the preservation of the natural and cultural environment. While the project design was simple and realistic, a more rigorous geo-technical risk analysis could have been carried out before effectiveness. This would have led to implementing geological works at the start of the civil works, and delays in works completion on some of the road stretches could have been avoided. 16 (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory IDA's performance during the project supervision is rated satisfactory. The team acted proactively in identifying problems that hindered project implementation and developing solutions. Such a proactive approach as well as close collaboration with the other parties concerned (Borrower, implementing agency, partner ( SNV) and contractors) allowed for the prompt addressing of delays in works, improved progress and quality of work, and the introduction and use of a geotechnical study as a pre-requisite for the start of road construction. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory The overall performance of IDA is rated satisfactory, considering the above assessment with the outcome ratings given in Section 10.1. 10.2 Borrower (a) Government Performance Rating: Satisfactory The Borrower's performance during the preparation and implementation is rated satisfactory . The project development objectives were in close alignment with the priorities of RGOB. The Government's ownership of and commitment to the project was strong. The Borrower promoted the establishment of an environment to foster growth and increased capacity of the private construction sector, and supported the adoption of the EFRC methods as a mandatory requirement for road construction in its environmental policy. Senior officials of the Ministry made frequent site visits to oversee the progress of work. (b) Implementing Agency or Agencies Performance Rating: Satisfactory Implementing Agency Performance The performance of the implementing agency - the Department of Roads - is rated satisfactory. DOR management and staff implemented the project professionally and with high quality standards. Despite the fact that many of the approaches in the project were new, including Ministry of Communications EFRC and contracting, DOR made significant strides to mainstream these approaches in their work procedures. DOR engineers were sufficiently competent to address technical issues. Environmental management capacity continues to improve with the establishment of the Investigation and Development Division together with its 17 Environmental and Geotechnical Units. Earlier lax supervision by the PMU staff was later rectified by frequent site visits and proactive supervision by DOR staff. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory The overall performance of the Borrower is rated satisfactory, considering the above assessment with the outcome rating given in Section 10.2 11. Lessons Learned (both project-specific and of wide general application) 11.1. Development of the rural road network in Bhutan is an expensive, but unavoidable, undertaking needed to facilitate economic development and poverty reduction. The scarce and scattered population and mountainous terrain in Bhutan make investments in feeder roads an expensive and costly proposition. However, the socio-economic impact monitoring study of the RAP has revealed significant positive impacts on much of the previously isolated rural population. Roads are crucial for boosting the rural economy and improving the welfare of rural populations. Road access facilitates other development programs and services. Thus, such a costly investment is unavoidable in order to achieve the country's poverty reduction goals. 11.2. The Bank and development partners can play an effective catalytic role in mainstreaming environmentally sustainable road construction approaches if there is demonstrated commitment of government. The success of EFRC introduction and implementation in the RAP is due, in part, to RGOB's demonstrated commitment to environmental protection and stringent policies which were in place when the project started. The Country Systems Assessment conducted by the Bank recognized the comprehensiveness of RGOB's environmental policies, and concluded that they would be used to support the effective use of environmental safeguards in future Bank-supported projects. 11.3. Geotechnical surveys (hazard spots assessments) should be carried out prior to the start of construction. Geological surveys should be a prerequisite for each road construction project in a mountainous country impacted by annual monsoon rains. It is important to identify potential geological problems prior to the start of construction to avoid costly remedial efforts later. Mitigation measures and other recommendations suggested by the geotechnical survey should be fully integrated in the detailed design of future roads. 11.4. A project should have a sufficient level of readiness for implementation before being negotiated. At the onset, RAP suffered from a relatively low level of readiness, as not all roads to be financed under the project had been fully designed by the time of negotiations and subsequent Credit effectiveness. 18 11.5. Quality assurance requires establishment of accountability mechanisms and empowerment for decision-making. Responsibilities and roles should be clearly defined and reporting linkages precisely determined and established between all concerned parties (e.g., DOR Head Office, field offices, PMU and project site engineers). In particular, de-concentrated implementation arrangements, as used in RAP, require that project site engineers are empowered to make project-related decisions on site. 11.6. A vertically disintegrated system of contracting proved to be inefficient. The PMU started with cumbersome contracting and awarded four separate contracts (opening of the road, building of the structures, surfacing, and bioengineering) for the same stretch of road. However, this resulted in increase in transaction costs to manage multiple contracts and inefficient use of resources by contractors working on the same stretch. In subsequent civil works, DOR decided to drop this approach and use an integrated contracting system. 11.7. Project-related financial and accounting systems should strive to use country systems when feasible. For accounting and reporting on project expenditures, DOR was required to use a computerized financial management system designed to meet the Bank's financial reporting requirements. However, its application was impeded by several major problems, including the absence of IT support in the country, a lack of system connection between DOR Headquarters and field offices, and frequent power outages. Later, RGOB developed and introduced its own accounting system, which has required a second level of data entry and additional tasks for DOR accountants. The follow-up RAP-II will use RGOB's system, which has been reconciled with that of the Bank. 12. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies DOR has prepared and submitted the implementation completion report on the RAP to IDA team (enclosed in Annex 10). The Implementing Agency's ratings of almost all aspects are one level above the World Bank ICR's ratings. As this was the first rural road project implemented by DOR with the financial support of the World Bank, the implementing agency analyzed the project outcomes and experience from the historical progression point of view, while the Bank ICR team compared it with its experience in other transport projects and other countries. The Borrower's comments received on the ICR generally concur with the ICR team's findings. (b) Cofinanciers Not applicable. 19 (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) The SNV, that provided TA to the project, has prepared and submitted its input for the ICR (enclosed in Annex 11). It did not rate the project outcome, the performances of the Bank and Borrower/Implementing Agency. Overall, the SNV considers the project experience positive as "the cooperation between the Department of Roads, SNV and the World Bank has been very fruitful". 20 Annex 1. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective (PDO) was to improve the access of rural communities to markets, schools, health centers and other economic and social infrastructure in order to improve the quality of life and productivity of rural communities. The project was also aimed to help strengthen institutional capacity for implementing environmentally friendly approaches to improve rural access, community involvement in rural roads selection and management, and improved infrastructure maintenance. The PDO was to be achieved by financing sustainable maintenance and rehabilitation of feeder roads and construction of economically justifiable feeder roads, subject to the adoption of environmentally sustainable construction and maintenance practices. The PDO was to be monitored by the following indicators: A. Average travel time and transport costs in project areas (to be reduced by a minimum 50%) B. Reduced distance to health and education services; C. Higher enrollment of in primary and junior schools in the corridor of impact; D. Improved road maintenance system through involvement of local communities; E. Dzongkhag (district) rural access master plans prepared using participatory processes and endorsed by people's representatives; F. Wider acceptance of environmental safeguards in construction and maintenance practices. A socioeconomic impact monitoring study was included in the design of the project to assess the achievement of the above outcome indicators, as well as other more indirect impacts of the project on beneficiary groups. The impact study included a baseline survey before project implementation, and two repeat surveys on the same households and communities during and after project works were carried out. Revised Project Development Objectives (as approved by original approving authority) The Project Development Objectives and Key Indicators were not revised. (a) PDO Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Revised Achieved at approval Target Completion or documents) Values Target Years Indicator 1 : Increase in the number of people within half-day walk to a motorable road. Value Beneficiary households 3400 beneficiary Not 3,188 beneficiary (quantitative Beneficiary households households are applicable. households. 21 or are within 1 to 3 days of within half-day walk Qualitative) walking to the nearest to motorable road by road head. EOP. Date achieved 05/01/2003 06/30/2006 05/01/2003 06/30/2006 Comments (incl. % The target is achieved for 94%. Additional 583 households have been provided achievement) with access of a slightly more than half a day walk to the all-season roads. Indicator 2 : Increase use of motorized transport, resulting in reduction in transport cost and travel time to key social and economic centers. Value Portaging and animal 50-75% reduction (quantitative transport only -- very 50% reduction in Not in transport costs or high transport costs and transport costs and applicable. and 75% reduction Qualitative) travel time. travel time. in travel time. Date achieved 05/01/2003 06/30/2006 05/01/2003 06/30/2006 Comments (incl. % The transport cost reduction target is achieved for 125%. The travel time achievement) reduction target is achieved for 150%. (b) Intermediate Outcome Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Revised Achieved at approval documents) Target Completion or Target Values Years Indicator 1 : Construction of 129 km of feeder roads. Value Adding 122 km of (quantitative feeder roads to the 122 km of feeder Not or Bhutan road roads. applicable. 129 km. Qualitative) network. Date achieved 05/01/2000 06/30/2006 05/01/2000 06/30/2006 Comments (incl. % The target is achieved for 108%. achievement) Indicator 2 : Capacity development for environment-friendly road construction (EFRC) method. Value Wider acceptance and Wider acceptance of (quantitative EFRC-method not adoption of EFRC Not and adoption of EFRC or used in road method as RGOB applicable. method as RGOB Qualitative) construction. policy for all road policy for all road construction. construction. Date achieved 05/01/2000 06/30/2006 05/01/2000 06/30/2006 Comments The target is achieved for 90%, because the EFRC method is adopted as the (incl. % RGOB policy, and the country is starting mainstreaming it in other road projects, achievement) including farm and forest roads. 22 Annex 2. Restructuring (if any) Not Applicable 23 Annex 3. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Appraisal Components Estimate (USD Actual/Latest Percentage of M) Estimate (USD M) Appraisal Feeder Road Construction 12.50 12.60 100.80 Office & Transport Equipment 0.26 0.72 276.92 Project Management Assistance & Training & Institutional Strengthening & 2.10 1.40 66.67 Studies Incremental Operating Costs 0.00 0.06 Total Baseline Cost 14.86 14.78 Physical Contingencies 0.00 Price Contingencies 0.00 Total Project Costs 14.86 Project Preparation Facility (PPF) 0.00 0.00 0.00 Front-end fee IBRD 0.00 0.00 0.00 Total Financing Required 14.86 14.78 (b) Financing Appraisal Actual/Latest Source of Funds Type of Percentage of Cofinancing Estimate Estimate (USD (USD M) M) Appraisal Borrower 2.32 2.45 105.60 INTERNATIONAL DEVELOPMENT 11.60 11.33 97.67 ASSOCIATION NETHERLANDS: NETHERLANDS DEVELOPMENT 1.00 1.00 100.00 ASSOCIATION (c) Disbursement Profile 24 25 Annex 4. Outputs by Component The project consisted of three components and the following outputs were delivered under each of the components: A) The Construction of 8 New Priority Feeder Roads following Environmentally Friendly Road Construction (EFRC) methods (US$12.6 million): 1) The construction of Dakpai-Buli Road feeder road of 36.6 km length in Zhemgang Dzongkhag was completed in April 2005. The road has linked villages, which had been about two-day walking distance from the nearest road before the project, and has benefited 792 households (7,128 people). Community maintenance contracting was piloted on the first 15 km of the road. The contract was awarded to the Kikhar community that lives along this road. The contract has been renewed for another year and is to expire in November 2006. 2) The construction of Praling-Gomphu School road of 8.7 km length in Zhemgang Dzongkhag was completed in October 2005. The road has connected Gomphu village with Trongsa-Gelephu national highway and has benefited 263 houesholds (2,367 people). 3) The construction of Lhuentse-Dungkhar road of 39.8 km length Lhuentse Dzongkhag was completed in April 2006. It has linked Lhuentse and Dungkhar villages and benefited 788 households (7,092 people). 4) The construction of Gomkora-Tomizangtsa road of 12.4 km length in Trashi Yangtse Dzongkhag was completed in February 2006. The road has benefited 403 households (2,821 people). 5) The construction of Bartsam-Ramjar road of 7. 6 km length in Trashi Yangtse Dzongkhag was completed in May 2006. The road has benefited 151 households (1,204 people). 6) The construction of Bartsam-Bidung road of 9 km length in Trashigang Dzongkhag was completed in May 2006. It has benefited 855 households (6,840 people). 7) The construction of Mukazor-Tshogonpa road of 7.4 km length in Trashigang Dzongkhag was completed in June 2006. It has benefited 220 households (1,760 people). 8) The construction of Yadi-Shershong road of 7.2 km length in Mongar Dzongkhag was completed in March 2006. It has benefited 299 households (2,093 people). All these project roads were selected from the priority list included in the 8th Five Year Plan, based on extensive community-level consultation and analysis of overall economic importance. After the construction completion, the contractors handed over the roads to the DOR for 26 routine maintenance, which is arranged through the National Workforce, petty contractors and community contractor (first 15 km of Dakpai-Buli road). B) Office and Transport Equipment for DOR (US$0.72 million). This included procurement of survey and laboratory equipment, office equipment and vehicles to provide logistic support for project monitoring and supervision. Additional safety barriers were procured using the project savings. The installation of these barriers is being funded from RGOB's budget. C) Project management assistance, training and institutional strengthening (technical assistance) (US$1.4 million). This component introduced an Environmentally Friendly Road Construction (EFRC) concept and built the capacity of DOR to implement more environmentally friendly approaches to improve rural access, promote community involvement in rural road selection and management, and ensure sustainable rural road maintenance. DOR has established a new division - Investigation and Development Division (IDD), which consists of Environmental and Geotechnical Units. The main responsibilities of the IDD include (i) undertaking the development of standard specifications and quality assurance requirements, (ii) field investigations for the compliance with the standards, (iii) geotechnical investigation and support, and (iv) environmental safeguard aspects. All training programs were completed, including post- graduate studies, short-term courses, and study tours. The training course covered contract and construction management, procurement, financial management, and environmentally friendly construction methods. This component also supported the pilot community contracting on the first 15 km of Dakpai-Buli road. 27 Annex 5. Economic and Financial Analysis (including assumptions in the analysis) The economic analysis of the project involved two approaches: cost effectiveness and socioeconomic Impact Monitoring Study. This annex repeats the cost-effectiveness analyses carried out during appraisal, and summarizes the main finding of the socioeconomic impact monitoring studies. Cost-Effectiveness Analysis At the preparation stage, the project team recognized that collecting socio-economic data for each project rural road for estimating its economic rate of return (ERR) would be difficult and expensive and the project roads would be low-volume roads with fewer than 30 vehicles per day. Thus, the team decided to use only one road - Dakpai-Buli - as a model to estimate needed investment per capita (per beneficiary) into a road to deliver a 12 percent ERR, in view of the difficulty of repeating such detailed studies for all project roads and the access problems and economic conditions being similar in the service areas of the other project roads. When estimating an ERR of the project, the team also included quantifiable social and economic benefits: transport cost savings, improved agricultural production and net additional agricultural income, improved enrolment levels in schools and related net incremental life-time income of the additional persons receiving education, and health benefits (reduced number of sick days and deaths) from improved access to health centers. The direct beneficiaries were estimated using the population of directly benefiting villages and increasing this number by about 10 percent to include other beneficiaries who would directly benefit from trade with or visits to the newly-accessible areas. The PAD estimated that Dakpai-Buli road (37 km costing about US3.6 million with about 8,000 direct beneficiaries) would produce an ERR of above 15 percent, which amounted to an investment of about US$ 450 per capita. Based on the Dakpai-Buli road analysis, the investment of US$560 per beneficiary corresponding to an ERR of 12 percent was accepted as the threshold for economic viability of the project roads. The appraisal suggested using in exceptional cases a norm of US$650 per beneficiary (corresponding to 10 percent ERR) since a minimum of 10 percent ERR was acceptable for such project investments, in view of their many social and economic benefits which had not been quantified (such as keeping the rural population from migrating away from rural farms to towns). The ICR calculations show that actual average investment per beneficiary for all project roads was US$365, which means that the delivered ERR was higher than the ERR estimated at appraisal. The per beneficiary investment ranged from US$210 to US$603 (Table 1). The Lhuentse-Dungkhar road had the highest investment per beneficiary (US$603) due to escalation of costs and additional civil works which were undertaken to address geological and geotechnical problems caused by the heavy monsoon season in 2004. However, the investment was still within the norm suggested for exceptional cases - US$650 per beneficiary - and the ERR for this road is estimated at around 11 percent. Table 1. Investment per beneficiary into the project roads Length, Latest Estimate Number of Investment per km Nu US$ Beneficiaries beneficiary, US$ Civil Works 128.76 557,802,736 12,569,352.75 34,434 365 28 Construction of Dakpal-Buli 36.6 Road 124,411,717 2,803,454.79 7,840 358 Construction of Lhuentse 39.8 Dungkhar Road 208,612,168 4,700,801.47 7,801 603 Construction of other feeder 32.38 roads 134,167,019 3,023,277.73 14,366 210 Construction of Trashi 19.98 Yangste Road 90,611,833 2,041,818.76 4,427 461 Note: Exchange rate: US$1=Nu 44 Summary of Socio-Economic Impact Monitoring Study This section is based on the findings of the socio-economic monitoring study conducted by the Social Consultant and the findings of the World Bank ICR mission team. The ICR team visited the Dakpai-Buli and Gomphu road corridors and held discussions with the rural beneficiaries on the project outcomes. The socioeconomic impact study reports are in project files. The Social Consultant conducted a baseline, intermediate and final monitoring surveys of the project impacts in the eight project road corridors. The comparison of the monitoring results before and after the project implementation allow identifying the RAP induced impacts, as well as determining the extent of these impacts on the project beneficiaries. For some of the indicators, the monitoring study covered not only the project affected villages, but also two control villages, which were not affected by the project. This approach enabled determining whether the identified changes were induced by the RAP solely or by the RAP in combination with other factors. Overall, it was recognized by both the ICR mission team and the social consultant that the RAP has brought significant benefits to the rural communities, which are described in detail below. Transport Benefits Emergence of motorized transport services. The newly-constructed roads under the RAP facilitated the emergence of public and private transport services by buses, trucks and taxis for the project-affected beneficiaries. Before the construction of these roads, farmers had to rely either on porters or horses/mules to transport their produce to the markets. Often they had incurred losses of up to 50 percent of their produce by the time they reached the market. In addition, rural residents, especially housewives and schoolchildren, were often disrupted during agricultural seasons, as they were required to contribute free labor for the transportation of rations to schools and supplies to basic health units. Porterage and horse/mule transportation did not guarantee timely and safe delivery of supplies, which in turn affected the provision of health and school services. Motorized transport services (by taxi, truck, or bus) are now available on most of the roads; regular bus services - 5 times a day - have been arranged on Dakpai-Buli. A majority of the project beneficiaries prefer using taxi, truck or bus to carry goods and supplies, as they have recognized motorized transport as more time and cost efficient than animal transport or porterage. However, some of the rural residents continue hiring horses/mules or porters where motorized transport services are not available yet. A significant growth of motorized vehicle ownership was reported in the six out of the eight project road corridors by the closure of the RAP. Before the project only 2 cars and 4 two- 29 wheelers had been registered in these project areas, while now there are 1 DCM truck, 8 cars, 13 two-wheelers and 1mahindra pick-up truck are registered in the same project areas. Since 2003-04, the motorized traffic volume has increased by 25 percent, transportation of goods by motorized vehicles has increased by 39 percent and transportation of passengers by 45 percent, on average, on Dakpai-Buli, Lhuentse-Dungkar, and Gomkora-Tomijangsa roads (Table 2). Table 2. Traffic volume in 2003-04 and its growth rate by 2006 2003-2004 2006 Increase, % Traffic Tonnage Traffic Tonnage Traffic Tonnage per day (Kg)/day Passengers/day per day (Kg)/day Passengers/day per Passengers/day day (Kg)/day Dakpai-Buli 14 14537 41 16 21890 70 13 34 41 Lhuntse- Dungkar 13 12667 17 20 21946 46 35 42 63 Gomkora- Tomijangsa 6 4540 13 8 8100 13 25 44 0 Total 33 31744 71 44 51936 129 25 39 45 Reduction in travel time. As a result of the road accessibility and transport service availability, the travel time has been recorded declining by 76 percent on average. The travel time to reach markets and hospitals has fallen down by 73 percent and 79 percent, correspondingly (Table 3 and Table 4). Before the construction of the new feeder roads, residents of Buli had to spend a day to reach town markets in Dakpai, while now it takes only 2 hours by bus or taxi to get to Dakpai. In addition, Buli residents do not need to go to the market in Dakpai, as 12 new shops have opened in their village and most of the needed commodities are available, with very little difference in prices with Dapkpai. The travel time of children to schools has not significantly been affected in most of the project villages. The primary reason is that the RGOB built schools in almost every village, regardless the road accessibility. The second reason is that children, who do not have school in their home village and have to go to school in another village, cannot afford bus services to that village on a daily basis and typically take a bus at the start and end of the week. However, the project has benefited children from Kikhar village, who go to school in Buli. These children take a bus to Buli at the beginning of the week, stay at the boarding school there for 6 days and come back home by bus for the weekend. Earlier they had to walk around 6 or more hours to reach school in Buli, now it takes them around an hour to get there. Table 3. Travel time from the project and control villages to the market before and after the project From the village to the market Travel time Before the Travel time After the project Reduction in project (on foot) (by motorized transport) travel time, % From Buli to Dakpai 6 hrs 2 hrs 67% From Kikhar to Dakpai 2 hrs 45 min 63% From Gangzoor to Lhuentse 1 hr 10 min 83% From Thimyul to Lhuentse 4 hrs 45 min 81% From Rotpa to Lhuentse 5 hrs 1 hr 60% From Ramjar to Duksum 2 hrs 1.5 hrs 25% From Tomizangtsa to Duksum 2 hrs 30 min 75% From Pang to Duksum 3 hrs 30 min 83% From Kenmong to Duksum 3 hrs 30 min 83% From Muktankhar to Trashigang 2 hrs 25 min 79% From Bartsham to Trashigang 3 hrs 35 min 81% From Bidung to Rangjung 2 hrs 1 hr 50% 30 From Dorey to Rangjung 2 hrs 1 hr 50% From Thrumming to Wamrong 3.30 hrs 30 min 85% From Tshogonpa to Wamrong 3 hrs 30 min 83% From Khaimanma to Wamrong 3 hrs 30 min 83% From Panthangzor to Wamrong 3.30 hrs 30 min 85% From Gomphu to Praling 2 hrs 20 min 83% From Shoenakhar to Yadi 5 hrs 30 min 90% From Shershong to Yadi 4 hrs 30 min 88% From Muhung to Yadi 4 hrs 15 min 94% From Jabgang to Yadi 5 hrs 30 min 90% Average reduction in travel time to the market 73% Table 4. Travel time to the Basic Health Units (BHUs) and hospitals before and after the project Before the project After the project Reduction in From the village to BHU and hospital (on foot) (by motorized transport) travel time, % From Thimyul to Hospital in Lhuentse 4 hrs 45 min 81% From Rotpa to Hospital in Lhuentse 5 hrs 1 hr 80% From Ramjar to Hospital in Trashi Yangtse 1.5 days* 30 min 96% From Tomizangtsa to Hospital in Trashi Yangtse 1.5 days* 2 hrs 83% From Thrumming to BHU in Moshi 1.30 hr 15 min 83% From Khaimanma to BHU in Moshi 1.30 hrs 15 min 83% From Tshogonpa to BHU in Moshi 1.30 hr 15 min 83% From Panthangzor to BHU in Moshi 2 hrs 20 min 83% From Pang to Hospital in Trashi Yangtse 1 day* 2 hrs 75% From Kenmong to Hospital in Trashi Yangtse 1 day* 2 hrs 83% From Muktankhar to Hospital in Trashigang 2 hrs 25 min 79% From Bartsham to Hospital in Trashigang 3 hrs 35 min 81% From Bidung to Hospital in Trashigang 5 hrs 1 hr 80% From Dorey to Hospital in Trashigang 5 hrs 1 hr 80% From Gomphu to Hospital in Yebilepcha 7 hrs 2 hrs 71% From Thrumming to Hospital in Riserboo 3.10 hr 25 min 87% From Tshogonpa to Hospital in Riserboo 2.40 hr 25 min 83% From Khaimanma to Hospital in Riserboo 2.40 hrs 25 min 83% From Panthangzor to Hospital in Riserboo 3 hrs 25 min 86% From Shoenakhar to Hospital in Mongar 1 day* 3 hrs 63% From Shershong to Hospital in Mongar 1 day* 3 hrs 63% From Muhung to Hospital in Mongar 1 day* 2 hrs 75% From Jabgang to Hospital in Mongar 1 day* 3 hrs 63% Average reduction in travel time to BHUs 83% Average reduction in travel time to Hospitals 79% * Note: For the calculation purpose, 1 day of walking on foot was estimated at 8 hours. Reduction in transport cost. The road accessibility and emergence of motorized transport have led to a significant decline in transport costs in the project areas. Table 5 shows that transport costs for different supplies and products has been reduced by 75 percent on the Lhuentse-Dhunkhar and Dakpai-Buli corridors before the opening of the roads in 2002 and after in 2004/ 2006. (Tariffs for bus and taxi services are regulated by the government, and even if more competing transport service providers emerge on these corridors, tariffs may not be affected immediately). The survey respondents in other project areas have also confirmed that "transport expenses have been reduced since it is cheaper and faster to transport goods by vehicle". For instance, before Gomkora-Tomizangtsen road was constructed it cost Nu. 100 to haul a load of about 30-35 kg from Duksum to Tomijansa, while now the taxi or bus charges only Nu. 300 to transport a load of 400 kg, which is 4 times (or 75 percent) less than before. Another example is Bartsam-Bidung road, where the transport cost of school supplies has reduced by about 50 percent. Before it cost Nu. 35,000 to transport one-truck load from Ranjung to Bidung using porters and horses, while 31 now it costs only Nu.17,000 to transport the same load by truck. During the visit of the Kikhar and Buli villages on the Dakpai-Buli road corridor, the ICR mission team was informed that the cost for Kikhar residents to carry a sack of potato to Dakpai declined from Nu. 150 to Nu. 10 and for Buli residents it declined from Nu. 300 to Nu. 50. Table 5. Transport costs before and after the construction of the new roads (a) Lhuentse-Dungkhar road, Lhuentse 2002 2004 Transport costs per 1 Ton, Nu. Transport costs per 1 Ton, Nu. Decline in transport costs, % Construction materials 2,857 643 78 Fertilizers & Pesticides 2,857 600 79 Seed Potato 2,862 364 87 Rice 2,862 1231 57 Average 75% (b) Dakpai-Buli road, Zhemgang 2002 2006 Transport costs per 1 Ton, Nu. Transport costs per 1 Ton, Nu. Decline in transport costs, % Ration (WFP) for schools 15,696 6,000 62 School supplies 12,280 765 94 Medical supplies 2,873 526 82 Construction materials 2,888 731 75 Fertilizers & Pesticides 2,875 818 72 Seed Potato 2,864 1,000 65 Average 75% Increase in frequency of trips. The increasing trend in frequency of visits to the social and economic services centers has been noticed in both the project affected and control villages, which (Table 6). suggests that the improved rural accessibility was not the only factor contributing to villagers' decision of making more frequent trips. However, the rate of increase for traveling to markets and BHUs have been higher in project affected villages than in control ones. This shows that the roads have been a key factor influencing households' decisions for traveling more often to these places of destination. The monitoring study also indicates that markets have been the most frequently visited places, as they have witnessed the highest increase in visits rate: 2.9%. Table 6. Average frequency of visits by an average household to social and economic services places before and after the project Number of trips in project Increase in Number of trips in control Increase in villages frequency of villages frequency of Before the After the trips in project Before the After the trips in control Places of visit project project villages, times project project villages, times Markets 8 22 2.9 4 9.5 2.4 BHU (Basic Health Units) 4.5 9 2 5 8.5 1.7 Hospitals 4 7 1.7 3.5 7 2 District Headquarters 4 9 2.3 5.5 12.5 2.3 RNR Centers 4.6 10.6 2.3 - - - Social Benefits Increase in school enrolment. During the visit of to the communities on the Dakpai-Buli and 32 Gomphu road corridors, the ICR mission team was informed that overall school enrolment in school did not increase as more schools are being built in neighboring villages in accordance with the RGOB's policy. However, it was indicated that school enrolment has increased in the villages that do not have schools as the new roads enabled families to send their children to schools in other villages. For example, only 3-5 children from Kikhar village used to attend school in Buli before the construction of Dakpai-Buli road, now 32 children from this village attend school, as the access to school has become easier because of the availability of bus services between Kikhar and Buli. Improvement in social services and upgrading of infrastructure facilities. With the opening of the new feeder roads, the social services institutions have been able to improve their services and upgrade their facilities. Linked by roads, the BHUs receive medical supplies and upgraded equipment in a timely manner. Before the roads were constructed, the BHUs had to hire porters to carry the load from the nearest village where the delivery from the general hospital would be left. That implied transport expenses for BHUs. Now the trucks deliver the medical supplies and equipment right to the door of the BHUand the delivery does not incur any transport expenses for the BHU. Another key benefit the roads have brought is timely transportation of critical patients to general/referral hospitals, as ambulances can easily access the villages by the newly-built feeder roads. The monitoring study reports the reduced number of sick days and fewer incidences of maternity and other deaths, which are attributable to improved delivery of health care services and easier access to health facilities. Similar to the BHUs, schools have also benefited from the improved rural accessibility. The roads have enabled transportation of construction materials and many of the schools have started or plan upgrading and expanding their facilities. For instance, Gomphu school (on the Gomphu road corridor) has replaced banana leaf roof with CGI sheets; Tshogonpa Primary School on the Mukazor-Tshogonpa road corridor is constructing additional four classrooms. Overall, the new roads enabled to upgrade three schools out of total nine in the project areas from primary to low secondary schools: two on Gomkora-Tomizangtsa and one on Bartsam-Ramjar road corridor. There are also plans to upgrade additional two schools from primary to low secondary on Dakpai- Buli and Lhuentse-Dungkar road corridors, build a new primary school, a middle secondary school and a pre-college school on Lhuentse-Dungkar road corridor. Agricultural Benefits Change in the cropping pattern. With improved access to the markets and loan services, farmers have been able to upgrade their tools, purchase new machinery and agricultural input materials (e.g., fertilizers, new seeds, seedlings). As a result, they have diversified their agricultural products, from mostly cereal and rice production, to high-valued vegetables (e.g., broccoli, cauliflower), fruits (e.g., walnut, orange), cash crops, e.g. chili pepper, citrus, potatoes. In some project affected villages, farmers have reduced land areas under cereal and expanded for orchards and new cash crops, which are in higher demand at the neighboring markets. Most of the farmers have increased the number of fruit trees and even introduced new sorts of fruit trees (e.g., orange, pear, peach, walnut, apple). Displacement of porters and increase in the number of full-time farmers. The monitoring study has 33 recorded the declining trend in hiring porters or animal transport to carry agricultural and farm produce to the markets and a growing trend in transporting the produce by a motorized vehicle. This implies the displacement of porters. Although this may be considered as a negative impact of the improved rural accessibility at first glance, the local residents consider this as a positive impact, because former porters have turned to farming and agriculture activities on a full-time basis and enjoy increase in crop yields and annual income. Overall, the results of the monitoring study indicate that the proportion of farmers has grown from 47% before the construction of the roads up to 51% since the opening of the roads in the project areas. Economic Benefits Growth of trade. The new roads have opened more marketing opportunities for farmers and contributed to the growth of the number of consumers, which in turn has led to an increase in demand for agricultural produce. The farmers have started selling their produce along the roads to travelers, contractors, laborers, school staff and geog officials. Specifically, the sale of maize, fruits, potato, and other vegetables has increased and the demand for these products continues growing. Farmers have shared their plans of expanding areas for these crops, purchasing more improved sorts of vegetable seeds, fruit tree seedlings (peach, pear, citrus, walnuts, others), and fertilizers. The sale of cheese and butter has also gone up, particularly in the areas where farmers acquired more lactating cows of improved breeds. Overall, the proportion of businessmen/traders has increased from 1% to 2% since the opening of the new roads (Table 7). 12 new shops have been operating on Dakpai-Buli corridor, while there was only one on this corridor before the road construction. Gomphu had no shop at all earlier; now it has already one shop. Table 7. Professional profile of the sample respondents that participated in the socio-economic monitoring survey before and after the project implementation Total, No Total, % Occupation Before After Before After Farmers 990 883 47 51 Students 658 511 31 29 Civil Servants 238 139 11 8 Housewives 138 79 7 5 Businessmen/traders 21 29 1 2 Army servants 27 29 1 2 Monks 59 67 3 4 Total 2131 1737 100* 100* *Because of rounding the numbers, the total may not be equal to 100. Increase in revenues from home-grown agricultural produce. Although the prices for certain produce remained the same or have dropped down slightly (e.g., maize) in some of the project areas, the overall volume and income from the sale of the home-grown produce have increased (Table 8 ). Table 8. Revenue (per year) from the sale of home-grown produce before and after the project Gomphu Lhuentse-Dungkhar Bartsam-Bidung Commodities Revenue Increase, Revenue Increase, Revenue Increase, Before After % Before After % Before After % 34 Maize, kg 160 3500 2088 4000 9520 138 11340 41650 267 Rice, kg 0 52375 Potato, kg 9000 53900 0 26200 Chilli, kg 37500 43600 1000 24090 2309 Vegetables, kg 9000 198000 2100 15600 19786 70050 254 Butter, kg 3000 4800 60 5400 Cheese, No 2500 6000 140 5620 9672.5 72 Fruits, No (walnuts) 990 1200 21 Gomkora-Tomizangtsa Bartsam-Ramjar Yadi-Shershong Commodities Revenue Increase, Revenue Increase, Revenue Increase, Before After % Before After % Before After % Maize, kg 10008 15000 50 11200 22950 105 7900 18200 130 Rice, kg 0 0 5000 37500 Potato, kg 90300 162800 80 378900 Chilli, kg 41340 44000 132000 Vegetables, kg 60000 88250 47 45900 43750 -5 33535 84000 150 Butter, kg 93100 120000 29 Cheese, No 21000 30000 43 Fruits, No (oranges) 8450 121400 1337 Reduction in prices for consumption commodities at the beneficiary villages. The rural road accessibility has contributed to a reduction in prices for commodities in the beneficiary villages and made them more affordable to the rural residents living far away from the main town markets. The prices in the project villages are very close to the prices in the town market - within 10 percent range, on average. However, the prices for commodities in the villages, which are not connected by road, are significantly higher than in the connected villages or at the main town market. For instance, residents of Buli, which is now linked by road with the town of Dakpai, pay 4 percent more for rice than at the town market, while the residents of the control village Nymshong pay 10 percent more than in Buli or 14 percent more than at the town market (Table 9). Table 9. Prices for commodities in the town market, project village and control village Price Price in Price in Price difference Commodities Unit Price in Buli/ Nyim- difference between Price difference Dakpai Tali shong between Dakpai & between (main (project (control Dakpai & Nyimshong, Buli/Tali & market) village) village) Buli/Tali, % % Nyimshong, % Rice Kg 14 14.5 16 4 14 10 Cooking oil Liters 46 50 55 9 20 10 Sugar Kg 22 25 28 14 27 12 Fish Kg 72 78 82 8 14 5 Salt Kg 6 7 9 17 50 29 Soap Piece 6 7 8 17 33 14 Dry chilli Kg 56 60 65 7 16 8 Tea leaves Kg 112 120 130 7 16 8 Torch cell Pairs 20 22 25 10 25 14 50 kg Cement bag 220 225 - 2 - - 35 Increase in income from sale of produce and trade, and decrease in income from porterage and animal transportation. The animal transportation and portage has almost completely been replaced by motorized transportation and income from these activities has tremendously declined, especially for the portage - by 75%, on average (Table 10). However, the sale of agricultural produce and trade have grown and have contributed enormously to a significant increase in the household income. As the monitoring study results show an income from sale of agricultural produce has risen by 64% and an income from trade by 40%. In addition, because of improved rural accessibility, income from remittances has also increased by almost 50%. Table 10. Average annual income from certain economic activities in the project affected areas before and after the project Sources of income Average total Average Before After increase/decline* Sale of agriculture produce 28,77.25 7,888.88 64% Business/trade 14,296.38 23,910 40% Remittances 5,481 10,532.25 48% Horse transportation of goods 2,850.13 2,387.5 16%* Porterage 2,375.57 593.57 75%* Increase in annual household income. According to the data collected during the impact monitoring study, an annual household income has increased by 25%, on average, in the project affected areas. (Table 11). The minimum increase was recorded in the Gomkora-Tonizangtsen and Gomphu road corridor: 11% and 12%, accordingly. The impact monitoring study reports a slight increase in the proportion of households whose annual income passed the Nu. 20,000 threshold and whose annual income is within the Nu.5001-10,000 range, while the proportion of households whose income is below Nu.5,000 has slightly declined. Before the project, 26% of the surveyed households earned more than Nu.20,000 and 24% earned between Nu.5,000-10,000 per year, while now 28 percent of the surveyed households has an annual income over Nu.20,000 and 25 percent has between Nu. Nu.5,000-10,000. The proportion of surveyed households whose income is below Nu.5,000 has declined from 17 percent to 13 percent. Table 11. Average annual household income before and after the project and number of households belonging to different income categories before and after the project Income, Nu Proportion of the surveyed HHs belonging to different income categories Before After increase, Nu. 0- 5001- 10001- Nu. 0- 5001- 10001- Before After % 5000 10000 20000 >20000 5000 10000 20000 >20000 Dakpai-Buli 17,116 21,262 24 29 40 29 3 32 32 22 15 Lhuentse-Dungkhar 12,359 19,138 55 29 21 24 26 14 34 29 23 Gomkora-Tomizangtsen 27,762 30,811 11 21 21 24 34 14 14 28 45 Bartsam & 8211; Bidung 16,250 21,362 31 27 22 33 18 22 27 29 22 Mukazor-Tshogonpa 13,745 18,533 35 2 14 36 48 0 11 50 39 Yadi-Shershong 19,147 23,939 25 11 35 32 22 10 37 29 25 Gomphu 15,203 17,053 12 3 6 63 28 3 9 56 31 Average 17,369 21,728 25 17 24 34 26 13 25 34 28 Note: Bartsam-Ramjar road data was excluded from the analysis due to the data inaccuracy in that road corridor. 36 Contribution to poverty alleviation in the project affected areas. The results of the socio-economic monitoring study presented in Table 12 confirm that this project has contributed to poverty reduction in the areas of its influence. After the villages were connected by the feeder roads the proportion of income spent on food has declined, while the income of households has increased. Before the project, food expenditures constituted 23% of an average annual household income, while now they represent only 13%, on average. Table 12. Food expenditures per year as a share of average annual household income Before the project After the project Average Average Average annual food Average annual food Average annual food Average annual food annual HH expenditures, expenditures, as % annual HH expenditures, expenditures, as % income, Nu Nu of income income, Nu Nu of income Dakpai-Buli 17,116 3,546 21 21,262 4,046 19 Gomphu 15,203 3,969 26 17,053 3,697 22 Lhuentse-Dungkhar 12,359 2,395 19 19,138 1,977 10 Bartsam & 8211; Bidung 16,250 6,479 40 21,362 3,418 16 Mukazor-Tshogonpa 13,745 2,844 21 18,533 3,309 18 Gomkora-Tomizangtsa 27,762 2,370 09 30,811 2,374 08 Yadi-Shershong 19,147 2,732 14 23,939 2,671 11 Average 16,676 3,598 23 26,093 2,891 13 Note: Bartsam-Ramjar road data was excluded from the analysis due to the data inaccuracy in that road corridor. Transport costs as a proportion of annual household income has also fallen down. Before the roads were constructed, the rural residents along the Dakpai-Buli and Lhuentse-Dungkhar road corridors had to spend around 23 percent of their annual income to transport one ton of construction materials, fertilizers, seed potatoes or rice (Table 13 (a) and (b)). With the road opening, costs for transporting one tone of any of these commodities now represent around 5 percent of annual household income. Table 13. Transport costs for some commodities as a proportion of average annual household income (a) Dakpai-Buli road, Zhemgang Before After Transport Transport Transport costs Annual HH Transport costs per costs as % of Annual HH costs per 1 as % of HH income 1 Ton, Nu. HH income income Ton, Nu. income Lhuentse- Dungkhar road, Lhuentse 12,359 19138 Construction materials 2,857 23 643 3 Fertilizers & Pesticides 2,857 23 600 3 Seed Potato 2,862 23 364 2 Rice 2,862 23 1231 6 (b) Lhuentse-Dungkhar road, Lhuentse Before After Annual HH Transport costs Transport costs as Annual HH Transport costs Transport costs as income per 1 Ton, Nu. % of HH income income per 1 Ton, Nu. % of HH income Dakpai-Buli, Zhemgang 17,116 21,262 37 Construction materials 2,888 23 731 4 Fertilizers & Pesticides 2,875 23 818 4 Seed Potato 2,864 23 1,000 5 Conclusions. The newly-constructed feeder roads have provided many benefits. They include: (i) easier access to social service facilities (schools, Basic Health Units and general hospitals), improved social services and upgraded social facilities; (ii) faster and cheaper access to the markets through provision of motorized transport services and reduction in transport costs, (iii) opportunity of transporting construction materials (which porters and animal transport could not handle) to upgrade and improve houses, school and health facilities; (iv) improvement of marketability of perishable goods through timely and cheaper transport and a growing incentive for more market-oriented agriculture, with more profitable cash crops, and (v) an increase in the rural beneficiaries' income and employment. 38 Annex 6. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/Specialty Lending Supervision/ICR Sita Ramakrishna Addepalli Environmental Spec. SASES Madhavan Financial Management Balachandran Specialis SARFM Debabrata Chakraborti Sr Procurement Spec. SARPS Jaswant S. Channe Consultant SASEI Surendra Govinda Joshi Sr Transport. Spec. SASEI Zarafshan H. Khawaja Sr Social Scientist SASES Manvinder Mamak Sr Financial Management Specia SARFM Binyam Reja Sr Transport. Econ. SASEI Kirtan Chandra Sahoo Environmental Spec. SASES Narayan D. Sharma Consultant SASEI Natalya Stankevich E T Consultant SASEI (b) Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD M) 1 05/09/2000 Satisfactory Satisfactory 0.00 2 06/29/2000 Satisfactory Satisfactory 0.00 3 12/19/2000 Satisfactory Satisfactory 0.50 4 06/20/2001 Satisfactory Satisfactory 0.82 5 06/26/2001 Satisfactory Satisfactory 1.06 6 12/13/2001 Satisfactory Satisfactory 1.56 7 03/07/2002 Satisfactory Satisfactory 1.56 8 10/01/2002 Satisfactory Satisfactory 2.38 9 05/14/2003 Satisfactory Satisfactory 3.29 10 07/29/2003 Satisfactory Satisfactory 4.10 11 01/28/2004 Satisfactory Satisfactory 5.05 12 08/02/2004 Satisfactory Satisfactory 6.03 13 05/12/2005 Satisfactory Satisfactory 8.42 14 12/12/2005 Satisfactory Satisfactory 9.76 15 05/17/2006 Satisfactory Satisfactory 10.41 (c) Staff Time and Cost Stage of Project Cycle Staff Time and Cost (Bank Budget Only) 39 USD Thousands No. of staff weeks (including travel and consultant costs) Lending FY98 28.40 FY99 122.86 FY00 29 108.06 FY01 -0.07 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 Total: 29 259.25 Supervision/ICR FY98 0.00 FY99 0.00 FY00 7 42.14 FY01 10 51.33 FY02 4 50.38 FY03 9 61.33 FY04 15 90.62 FY05 15 73.46 FY06 17 81.89 FY07 15 41.33 Total: 92 492.48 40 Annex 7. Detailed Ratings of Bank and Borrower Performance Bank Ratings Borrower Ratings Ensuring Quality at Entry: Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Overall Borrower Performance: Satisfactory Performance: Satisfactory 41 Annex 8. Beneficiary Survey Results (if any) See summary of Socio-economic Impact Monitoring Study in Annex 5 (Economic Analysis). 42 Annex 9. Stakeholder Workshop Report and Results (if any) 43 Annex 10. Summary of Borrower's ICR and/or Comments on Draft ICR Royal Government of Bhutan MINISTRY OF WORKS & HUMAN SETTLEMENT DEPARTMENT OF ROADS RURAL ACCESS PROJECT IDA: BHU 3309 THIMPHU: BHUTAN Final Draft IMPLEMENTATION COMPLETION REPORT JUNE 2006 TABLE OF CONTENTS 1. Project Data 2. Principal Performance Ratings 3. Assessment of Development Objective and Design, and of 44 Quality at the entry 4. Achievement of Objective and Outputs 5. Major Factors Affecting Implementation and Outcome 6. Sustainability 7. Bank and Borrower Performance 8. Lessons Learned 9. Partner Comments 10. Additional Information 3. Assessment of Development Objective, Design and of Quality at Entry 3.1Original objective 3.1.1 Background Bhutan's development has been rapid and broadly shared. Up until the 1950s Bhutan was isolated from the rest of the world, and its dispersed rural population was entirely dependent upon subsistence agriculture. Once it opened up to the outside world in the 1960s, Bhutan embarked upon a far reaching development strategy that has been articulated in successive five year plans. On the basis of the development strategy articulated in these five year plans, Bhutan has developed physical infrastructure of roads, power supply, telecommunications, and water supply that now serves a growing shares of the population. At the same time the Government has developed a social infrastructure of education and health services which have, despite the difficult terrain and scattered population, greatly improved access to education and health services. The Rural Access Project was conceived with the following Development Objectives. 3.1.2 Project Development Objectives The development objective of the project is to improve the access of rural communities to markets, schools, health centers and other economic and social infrastructure, in order to improve the quality of life and productivity of rural communities. The project will also help strength institutional capacity for implementing environmentally friendly approaches to improve rural access, community involvement in rural roads selection and management, and improved infrastructure maintenance. These objectives reflect RGOB's policy of balanced regional development and decentralization, and its dedication to environmentally sustainable development. The project will initially focus on three selected Dzongkhags (districts), where rural access problems are more acute. The project will promote a program approach; accordingly, in addition to or in lieu of the initial list of roads selected and appraised, other investments will be considered during the project according to RGoB's priorities as reflected in their Five Year Plans, subject to their conforming to social, environmental and economic criteria agreed between RGoB and IDA. 3.1.3 Clarity of Project Development Objectives The project objectives will be monitored by the following indicators: 45 · Average travel time and transport costs in project area (to be reduced by a minimum 50%), · Reduced distance to health and education services; · Higher enrollment of boys and girls in primary and junior high schools in corridor of impact, · Improved road maintenance system through involvement of local communities; · Dzongkhag rural access master plans prepared using participatory processes and endorsed by people's representatives; and · Wider acceptance of environmental safeguards in construction and maintenance practices. The main objectives of the Department of Roads are to develop a regionally balanced network that is safe, convenient and economical to use, and to preserve the past capital investment in roads, reduce cost of vehicle operation and travel time of road users and develop road construction and maintenance (resurfacing) capabilities in the private sector. The main strategies include: · developing guidelines and practices for road design, construction and maintenance which cause minimum adverse impact to environment; · promoting larger private sector role in road construction maintenance through contracting; · development of a long term comprehensive road master plan; · developing a suitable pavement maintenance management system; · improving maintenance systems for rural road; · improving geometric features of roads to reduce accidents; · timely resurfacing of existing roads to reduce vehicle operating costs; · strengthening institutional capacity through further training and · Utilizing locally available materials and resources wherever possible. 3.2 Original Component: 3.2.1 Construction of 122 Km New Priority Feeder Roads : 1. Construction of a feeder road of about 37 Km (Dakpai-Buli road) in Zhemgang Dzongkhag (linking village which are about 2 days walking distance from the nearest road) to be designed as a model for environmentally friendly road construction in Bhutan. The road will help integrate rural road development with the on-going Integrated Sustainable Development Program (ISDP funded by NEDA/RGoB), and with the proposed construction of a junior high school in the road area following road construction. The road will also support integration of mule trails for the more remote villages to the new road. It will also introduce community maintenance commitments for road stretches near beneficiary villages 2. Construction of about 37 Km of feeder roads to link Lhuentse and Dungkhar villages, in the Lhuentse district using EFRC method. 3. Construction of about 20 Km of feeder roads to link Gomkora-Tomzhangtsen, 46 Tsenkharla-Kheni and Bartsham-Ramjar villages, in Trashi Yangtse district using EFRC method; 4. The tentative list provided (which is subject to change) include: Bartsham-Bidung Phongmey School (10 Km); Thrimshing Dungkhag Office-Tshangpo School (3 Km); Mukazor-Tshogonpa School (5 km); Pangthang-Yechhen BHU (2Km); feeder road to Gomphu village (8 Km) using EFRC method; of these, the last falls in Zhemgang district, and the rest in Trashigang district. All these project roads were from the priority list included in the 8th Five Year Plan, based on extensive community-level consultation and overall economic importance. Consistent with the program approach, the roads currently described in (i) through (iii) above were also subject to change, and different roads may be selected based on the economic, social and environmental criteria agreed between RGoB and IDA. 3.2 .2 Office and Transport Equipment Survey, office equipment, laboratory equipments and vehicles were procured as planned. Management savings from civil works enabled the Project to purchase road safety equipment (mainly crash barriers to enhance the safety of Project roads). The reallocation of budget for Bailey bridge parts was made under IDA guidance. The office equipment& vehicle provided logistic support for Project Monitoring& Supervision. 3.2.3 Project Management Assistance, Training and Technical Assistance: These inputs would assist during the introduction and dissemination of environmentally friendly design and implementation practices for rural road construction and maintenance, for institutional capacity building both in the public and private sector and for project implementation support. All the requirements stated in the Project Appraisal Document as main loan conditions were fulfilled. The project management staffs were trained in the areas of financial management, environmental safeguards, procurement, project management and administration. In addition to the above training, the DoR and contractor's site engineers were trained in bio-engineering techniques, control blasting, quality control, contract management, construction management etc. 3.3 Revised Component: During the implementation of the project, the components were revised as follows: 3.3.1 Construction of 128.71 Km of New Prioritized Feeder Roads including: 1. 36.57 Km 47 2. Construction of Lhuentse ­ Dungkhar road in Lhuentse Dzongkhag ­ 39.78 Km 3. Construction of Gomkora-Tomzhangtsen road ­ 12.43 Km and Bartsham-Ramjar road 7.55 Km, in Trashi Yangtse Dzongkhag; 4. Construction of Bartsham-Bidung road ­ 9.01 Km and Mukazor-Tshogonpa road ­ 7.43 Km, in Trashigang Dzongkhag; Yadi ­ Sershong road ­ 7.22 Km, in Mongar Dzongkhag, Praling - Gomphu School. ­ 8.72 Km, in Zhemgang Dzongkhag. The EFRC method of construction was adopted in all the roads. 3.4Quality at Entry: The DoR rates QAE satisfactory on account of the project objectives, consistency of the design of the project component and arrangement made to handle the complexity of the project. 3.4.1 Risk and Mitigation measures: The project was assessed as "medium" risk project. No high risks were encountered during the project life time. The following were identified as moderate risks in the PAD. Risk Mitigation Comment Government to follow The Environmental EFRC concept has been introduced and mainstream Code of Practice amongst all road constructing agencies environmentally (Roads) adopted, close in Bhutan friendly methods of monitoring and The EFRC concept is incorporated in road construction. evaluation of contract the curriculum of the Royal Bhutan clauses and Institute of Technology, to ensure environment understanding by the future engineers management plan. and for the sustainability of EFRC. Carrying out project Attention to improving Project delay as noted. components procurement Delay in credit effectiveness date expeditiously capabilities in DoR Qualified TA, DoR and contractor limited required capacity strengthening. This resulted in staggered packaging of the contracts. Geotechnical difficulties faced on one identified road. Requiring complete selection, survey, design and procurement of the new road Security issues in South caused delay of materials transportation. The following additional risks have been identified at project end. Risk Comment Motivation of Gaining commitment and interest has been an obstacle. The stakeholders outside inability to liaise with GoI on the EFRC concepts is perceived by DoR, e.g. DANTAK, all to cause barrier to full acceptance and development of the BRO technique. 48 Decentralization Ongoing RGOB decentralization possesses a risk, detracting attention and commitment from implementation of Project procedures and concepts. Eg. Lack of clarity / changes to role and responsibility of personnel / divisions / Department. Maintenance funding Security / revenue stream for maintenance funding related to Road Act implementation to ensure sustainability of infrastructure. Regional security and Security issues in south Bhutan caused increase in cost and stability(Dakpai ­ Buli availability issues for materials and impacted personnel road, Gomphu road, movement. Resulting in project capital cost increases and EOT Lhuentse ­ Dungkhar (LDs) road) Force majeure on Outburst of lake causing road block for almost two months Lhuentse Dungkhar road 4. Achievement of Objective and Outputs 4.1 Outcome / Achievement of objectives Summary: The output of the project is highly satisfactory. The Socio-Economic Impact Assessment study indicates that the average travel time in project area had reduced from 2 days to 2 hours especially in Dakpai- Buli road and Lhuentse ­ Dungkhar road. And transport cost had reduced sufficiently to lower commodities cost by 40 % to 60 % The beneficiary communities now have better access to health and education services due to reduced travel time and cost. The road has improved the likely hood of qualified health workers and teachers being recruited to these areas. The increase in enrolment of boys and girls in primary and junior high schools is evident. The development of community routine maintenance was successful on the piloted road. Extension to other roads will be depended on the population density and community willingness for each specific location. The RSMP is the finalized. The environmental safeguards in the construction and maintenance practices were committed with the enactment of Road Act. 4.2 Output by components 4.2.1 Construction of 128.71 Km of New Prioritized Feeder Roads including: The civil work component for the construction of 128.71 Km of feeder roads in five Dzongkhags of Zhemgang, Lhuentse, Trashigang, Trashiyangtse and Mongar is completed successfully as against the targeted plan of 122 Km in four Dzongkhag. These eight project roads have directly benefited rural population of five Dzongkhags 49 (Socio-economic impact monitoring study done by M/s. Kyinkhor Consultancy) 4.2.2 Office and Transport Equipment. Completed; details in Annex. 1 4.2.3 Project Management Assistance, Training and Technical Assistance: Completed; details in Annex. 2 5. Major Factors Affecting Implementation and Outcome The traditional methods of road design and construction (using bull dozer and pushing materials down the mountain slopes) was considered and abandoned. This traditional method, which has since been evaluated as cheaper by 20-30% capital cost, would damage farm areas and the environment. However RGoB consider that it would be more expensive in overall costs in the long run, due to increase environmental damage and anticipated maintenance. It was decided therefore to adopt environmentally friendly road construction methods involving optimization of cut and fill, avoid indiscriminate spillage of excavated material and haul the excavated materials. Subsequently, it should combine with proactive Bio- Engineering methods for slope stabilization. Further, when selecting alignments, geological conditions were carefully assessed to selected alternatives which are more geologically stable, and less likely to landslides. The EFRC concept developed was process driven as part of RAP Implementation, supported by SNV in terms of sourcing required expertise while EFRC support was instrumental for widely introducing/desimination of EFRC concept. 5.1.1 Factors outside the control of government or implementation agency The factors outside the control of the government / implementation agency are · EFRC concept new to Royal Government of Bhutan (RGoB). · Hostile geographical location of the project roads- particularly for survey, Design and construction. · Geotechnical difficulties faced on the project roads due to heavy monsoon · Lack of familiarity and clarity with World Bank procurement procedures and financial obligations · Lack of capacity of public and private sector to carryout the preinvestment studies such as social, environmental and geotechnical studies · Young Construction Industries to take up Donor Funded Projects for Contracts & Consultancies 5.2Factors generally subject to government control(RGoB and DADM) 50 Factors generally subject to government control are: · Clearances ( environmental) · Fund release procedures · 2 formats in reporting requirements- physical and financial report in WB and RGoB format · Difficulty in following WB and RGoB procurement guidelines in disbursement & decision making requiring approval of MOWHS& WB. 5.3 Factors generally subject to implementation agency control (MoWHS & DoR) Factors generally subject to implementation agency control are: o Changes of the Project Management Staff ( Study leave , Official transfers) o Failure to allocate support staff in PIU ( Lab technician, work supervisors, surveyors) o Insufficient transport facilities at PMU and PIU. o Inadequate knowledge of the interpretation of WB contract, contract management and enforcement. o Decision making (technical, contractual& financial) for WB&RGOB. 5.4 Cost and financing The cost and financing component had no detrimental effect on the implementation of the project. Project management decisions have resulted in cost savings in comparison to original project cost forecast. 6 Sustainability The project's sustainability relates to the sustainability of improved rural access, environmentally friendly technologies and institutional capacity developed under the project. EFRC has been mainstreamed in all road Constructing agencies. 6.1 Rationale for sustainable rating The rationale for sustainability rating is that by focusing on EFRC concept the project will create district road with reduced future maintenance requirement. The community participation piloted under the project will provide income and skills to the project beneficiaries 6.2Transition arrangement to regular operations The Road Sector Master Plan (RSMP) is finalized. The Department of Roads is working on the rule and guideline for the implementation of the Road Act 7 Bank and Borrower Performance 51 Bank 7.1 Lending Bank performance during lending preparation is rated highly satisfactory. IDA team took rigorous project identification, preparation and appraisal of the project. The policy dialogue during project preparation was focused on agreeing on a shared framework on the project concept and on the maintenance modality once the roads are constructed. The EFRC concept of road construction was new to the RGoB, the limited capacity in implementing EFRC concept by DoR and contractors during the initial stage of project lead to non ­ funding of the first 5 km of Dakpai ­ Buli road. However, as the capacity in implementing EFRC concept developed within DoR and Contractors, the performance improved and is rated highly satisfactory. 7.2 Supervision The DoR rates Bank supervision highly satisfactory. The IDA team made a solid effort to ensure the project was implemented effectively, and achieved its development objectives. The task team was focused on overcoming problems that hindered implementation progress and achievement of the objectives. Supervision was well organized and timed to handle a wide range of activities in the project. 7.3 Overall Bank performance The overall performance of IDA is rated highly satisfactory, considering the above assessment. Borrower 7.4 Preparation The performance of the Borrower during the project preparation stage is rated highly satisfactory. The project was a high priority for RGoB in poverty reduction, socio-economic development, reducing travel time of the targeted beneficiaries, and this was demonstrated by the good ownership the RGoB shown during project preparation. RGoB quickly organized itself and the project preparatory fund was secured from the Japanese government and carried out the preparatory study. The policy dialogue with IDA during project preparation was productive, and resulted in a well ­ thought out project, and a commonly shared project concept. The technical assistances for the implementation of EFRC concept was secured under the funding by NEDA through SNV Bhutan. 7.5Government implementation performance The RGoB's performance during the project implementation is rated highly satisfactory. 52 Despite the fact the RGoB has to follow its own governing financial rules and regulation, RGoB has followed the entire loan covenant as stipulated in the Development Credit Agreement, such as World Bank procurement procedures, financial and physical reporting systems and EFRC concept development through the TA. RGoB has considered the privatization of road construction a priority and all the civil works contracts are executed through private contractors. To make the road construction and maintenance sustainable, pilot community routine maintenance and petty contracting of routine maintenance works were tested on selected project roads. 7.6Implementing Agency The performance of the implementation agency, DoR was rated highly satisfactory. The Project Management Unit (PMU) and Project Implementing Unit (PIU) competently implemented the project with sound and transparent procurement methods, timely monitoring and reporting systems as per the DCA. The PMU and PIUs were staffed with competent personnel, which lead to the successful achievement of the project goals. With the sound management by the PMU and PIUs, substantial savings of the project cost had been achieved, which lead to the increase in construction of road length from 122 km to 128.71 km. On top of the civil work component, saving from the project was used for the procurement of road safety equipment for the project roads and national highways worth nearly Nu. 20 million. The PMU and PIUs had taken active interest in implementing the project incorporating the comments by the World Bank mission in solving the l difficulties of geotechnical, Procurement of works, goods & services &Contractual issues faced on the Project roads. The recommended remedial measures on the project roads were implemented timely and problems fixed. All the project activities were completed and payment made to the contractors and suppliers on or before the project closing date of June 30, 2006, thus achieving the physical and financial targets as per the DCA. 7.7Overall Borrower performance The overall performance of the Borrower is rated highly satisfactory, considering the above assessment. 8.Lessons Learnt 8.1Readiness of the project must be there before the start of the IDA. The selection of road, pre- feasibility studies such as environmental, social, and geological and geotechnical etc., various clearances, acquisition of land, and survey and design must be completed before the start of the IDA. In other words, the project must be ready at least 50 % before the effective start of the IDA. When the RAP started very limited pre-feasibility studies were completed, which lead to simultaneous preparation and execution of the project. The consultancies studies took much of the time and PMU did not have the capacity to comment and review the reports. The project should be ready at least 50 % before the 53 effective start date of IDA & therefore more time needed for planning& pre-Project studies. 8.2Project management staff must be fully trained in World Bank procurement and financial management systems RAP was the first project funded by the World Bank in the road sector. Though the Department of Roads has experiences in the field of road construction, it was a Herculean task to the PMU to manage and implement the project as per the guidelines imposed by the World Bank both in procurement, and financial and physical reporting obligations. Training of PMU staff on the World Bank systems were not readily available on the shelves, and could obtain the experience and training only when the project was midway. Therefore, for the successful management and implementation of the project, the staff must be fully trained in the required field. 8.3 Delegation of authority for project management should be clearly defined and should be independent from Field Division. The clear delegation of authority for the project management was not defined and the project was not set up independent. Besides the World Bank policies and guidelines, the project management had to harmonize the RGoB policies and guidelines which contradicted at times. It must be made clear in the DCA as to the adherence of RGOB procedures during the Project implementation. Involvement of the Field Division offices further diluted the chain of communication, and reporting and monitoring obligations. PIUs were accountable directly to the Field Division offices and not directly to the PMU. The project finance personnel were accountable directly to the Administration and Finance Division of the Ministry and not to the PMU, which led to complication in the working environment. Therefore, for the successful implementation of the project, the project setup must be independent and the PIUs and finance personnel should be directly accountable to the PMU. 8.4 TA objectives and component must be defined in the bidding document Technical Assistance (TA) objectives and component must be defined clearly and designed fully for the project purposes and cover till the completion of project. The TA component for RAP under NEDA ended midway and the support came in from EFRC Support Project, which had mandates beyond RAP. Though RAP got uninterrupted support under EFRC - SP, the time allocation of the TA got diverted to other stakeholders such as MoA, FDCL, RBIT, CAB, CDB, SQCA as per the mandate of the EFRC SP and efforts were diluted and focus was lost. Further, it was learnt that in the bidding document, which forms the contract between the client and contractor, the mandates of the TA were not mentioned clearly. The TA provided technical advices which had financial implication though for the betterment of the project execution in term of quality, but it had been difficult for the client and the contractor to take in the advice easily. Therefore, clear objective and mandates for roles and responsibilities of the TA must be incorporated in the bidding document. 54 8.5 EFRC concept must be clearly defined and documented, policy and decision makers informed and appraised. When RAP started EFRC concept was in infant stage with no clear definition and documentation. The concept was initiated in RAP with little in house experiences and from neighboring countries. Neither the TA nor PMU/PIU were fully equipped with the technology, and everything had to be started from scratch. Though awareness was created in the country on the concept, it was not easily convincing for the policy and decision makers to agree on investment. Under RAP, the concept is still in the process of development and refinement and all the available documentation must be circulated to the relevant stakeholders for mass awareness of the EFRC concept. RAP was considered as the vehicle for the development of the EFRC concept and greatest achievement of RAP was the adoption of the policy by RGoB that all road construction in the country will follow EFRC method. 8.6 Contractors and client must be trained in executing and implementing the contract. When the RAP started there were very limited knowledge on the part of the PMU/PIU and the contractors in implementing the contract. Though awareness and training were imparted before the start of the project, it was just not sufficient to fully understand and interpret correctly. These lapses and shortages in understanding and interpreting the contract terms& conditions by both the parties led to various contractual problems such as variations, deviations, time extension, non- compliances of technical specifications etc. which could had been avoided and minimized if taken care as per the contract clauses. Unjustified claims and poor recording of risks and obligations of the parties led to delay in decision making by the competent authority resulting in exchange of undue dialogues between the parties. Therefore, for the successful implementation of the project, the parties in the contract must be trained and made to understand individual's risks and obligations. 8.7 Incentive must be paid to the project management and project implementing staff The success of the project depends largely on the recognition and incentives the project staff received for their hard work. No doubt the project staff had to work under harsh circumstances with lots of activities to monitor within the limited resources and capacities, coupled by inexperienced contractors, a need is felt for recognition of their good services. The principle of management tools such as incentives and motivating mechanism need to be incorporated in the Project design. The project staff had to work under extremely stretched time frame with lot of conditions on the quality control, quality assurances, and technical specifications to be imposed on the inexperienced contractors. They had to walk along the hostile terrain and thick jungle innumerable times accompanying the visitors from the Dzongkhag, PMU, Government officials, World Bank mission, technical advisors etc. and it had been learnt that with repeated assignment Mission no incentives for the hard work is demotivating. Therefore, in order to maintain the unwavering interest and motivation of the project staff, incentives and recognition in the form of trainings and project allowance must be incorporated in the Project design. 55 9. Partner Comments The Rural Access Project is a tri-partite project between RGoB, World Bank and Netherlands Development Agency (NEDA). The stakeholders and beneficiaries of the Project are the five Dzongkhags of Zhemgang, Lhuentse, Trashigang, Trashiyangtse and Monger. The comment received from the NEDA, SNV is attached separately and the following are the comments received from the project beneficiaries and stakeholders. 9.1 Zhemgang Dzongkhag Dakpai-Buli & Gomphu Village Road 1. Dakpai-Buli Road With the successful completion of Dakpai-Buli road, now two new roads are coming up. Farm road from Buli to Tshaidang is ongoing and from Buli to Nimshong road the survey has been completed. The public transport service from Gelephu to Buli is in operational for the local people. Moreover, the walking distance for the far-flung villages have drastically reduced and has improved the living standard of the local communities. 2. Gomphu feeder road: With the connection of road to Gomphu, the Gomphu Community Primary School is to be upgraded to Lower Secondary School during the 10th FYP that will benefit a number of villages under Trong Geog. The people of lower Kheng used to grow cash crops only for their consumption, because there were no means of transporting the crops. But now there is public transport service. Since the Geogs of lower Kheng are fertile and has potential to grow any kind of cash crops, the Dzongkhag Administration is encouraging them for income generations as the road has come near to them and also the main route from Dzongkhag Headquarter to most of the Geog Center are through Gomphu. Today, the area has become one of the major marketing centers for lower Zhemgang. 9.2 Lhuentse Dzongkhag Lhuentse-Dungkhar Road (39.78 Km) · Two days journey on difficult terrain, steep slope and slushy areas reduced to 2 hours by vehicle. · Public have more access to market for their surplus agricultural products. This will also encourage farmers to go grow surplus and enhance the income generation. · The problem of rural ­ urban migration can be reduced. · Improvement of accessibility to health. Serious patients can be referred to Dzongkhag Hospital. · Enhancement of development activities as there is lot of time saved from transportation/travel. · Improvement in communication between the Dzongkhag Headquarter and the public. 56 · Scope of tourism and pilgrimage is also foreseen in future. 9.3 Trashi Yangtse Dzongkhag 1. Gomkora-Tomeyzhangtsen road(12.45 Km) The construction of Gomkora-Tongmeyzhangtse road has very great impact on the people of the Tongshang geog. Prior to the construction of the road, the people had to carry the daily needs on their back from the Duksum town and had to climb a very steep slope in the very scorching sun. Like wise, the school and BHU had to carry the books, rations, medicine etc. from the Duksum town. With the construction of this road, the living standard of the people have greatly increased with so many development activities coming up in a very short time such as school, electricity, and water supply. In the earlier days it used to take at least 2 ­ 3 hours to reach to the Tongmeyzhangtse, but now it is just a matter of 20 ­ 30 minutes. Because of this road the farmers have access to many other facilities such as easy access for vegetable markets to the town & other places, Hospitals and bank and post office, RNR centers & others. 2. Bartsham-Ramjar Road (7.55 Km) The feeder road from Bartsham to Ramjar is beneficial for the upper public of Ramjar travelling to Tashigang. It is also useful for the transportation of construction materials, rations, stationery etc. The people have now easy access to gups office, school, BHU & to the monastery after the construction of road. It has helped integration of far flung villages. Though, there is impact on the people, it is relatively less beneficial as compared to Gomkora-Tongmeyzhangtse road since Bartsham-Ramjar road is connected only to the upper village of Ramjar Geog. 9.4 Trashigang Dzongkhag Bartsham-Bidung road & Mukazor-Tshogonpa road · Easier delivery of goods like agricultural inputs and other technical services to Geog · Encourage more farm produces like cash crops( potato) due to easy access to market · Reduce walking distance · Quick and faster access to health services · Reduction on internal transportation cost(for school and health centers) · Likely to encourage farm mechanization in near future · Timely monitoring and evaluation of plan activities · Reduction of rural-urban migration · More social interaction. 9.5 Mongar Dzongkhag Yadi-Sershong Road Socio-economic development: The road has boosted the socio-economic development in the geog. With the road at their geog, a few more shops have come-up. People have bought some private cars. The local product that was shelved for a long period can now easily be marketed. Transport: The road has eased a day long walking journey to Yadi to mere thirty minutes drive. The geog is also facilitated by the taxi services. The potter age of the government 57 and private goods has been reduced. Religious and cultural development: One of the most sacred religious sites in the east Aja -Ney had a very few visitors in the past. With the opening of the road, there are more visitors on pilgrimage to the sacred Aja-Ney. The three day walking has been reduced to two days. Health improvement: There is a BHU-II in the geog. The patient can be easily reached to Mongar Regional Hospital as the ambulance is accessible. Exposure: People in the geog are more exposed to the modern amenities. The living habits, hygiene and over all status of the people are changed as they are proud owner of the road in their geog. Eco-cultural Tours: With the completion of the road, the Eco-cultural tours to Aja-Ney, can be proposed and developed. 10. Additional Information N/A 58 Annex 11. Comments of Cofinanciers and Other Partners/Stakeholders SNV INPUT FOR ICR RAP 1 Version 21 July 2006 Technical Assistance in RAP1 (2000-2006) Introduction The Technical Assistance to the Rural Access Project is provided through SNV ­ Bhutan (Netherlands Development Organisation) SNV has chosen to provide technical assistance as rural access is one of pillars of poverty alleviation. Providing access to rural communities is one of the highest priorities of the Royal Government of Bhutan, which SNV supports. Bhutan has wisely chosen the "middle path" with regard to economic development, ensuring that preservation of natural resources and preventing environmental degradation is a priority. However, the mountainous terrain and the scattered settlement patterns make the construction and maintenance of roads in Bhutan difficult and costly; hence environmental friendly techniques and efficient construction management have been promoted. SNV's Technical Assistance component has focused on capacity building and learning, to support the Department of Roads and other stakeholders, so that all future road construction in Bhutan will be environmental friendly, efficient and of high quality. The Technical Assistance took place in two phases: 1. RAP TA from January 2000 till February 2003 2. EFRC-SP from March 2003 till June 2006 Objectives and approach RAP TA The Department of Roads and SNV started with a cooperation agreement (RAP-TA) stating that SNV would provide a variety of technical assistance which included bringing in experts for surveying, design, supervision and execution of the project. The main objective was the efficient implementation of the Rural Access Project in an environmental friendly manner. The manpower component included one international team leader who was a road engineer, two national road engineers and one national environmental specialist, all long-term positions. There were also a variety of short term national and international experts called upon on an as-needed basis such as bio-engineers, engineering geologists, road engineers and machine operator experts. The approach in the first years focused on technical issues which could be improved and bringing in technical expertise when needed. EFRC-SP 59 In 2002 DoR and SNV Bhutan, with support from the Sustainable Development Secretariat (bi-lateral funding from The Netherlands), agreed to continue its support to further develop and introduce the EFRC concept and to further strengthen the capacity of the Department of Roads (DoR) and other stakeholders (including training institutes, the private construction industry and the districts). To this end the EFRC Support Project started in March 2003. The support from SNV Bhutan in the EFRC Support Project was focused on strengthening the organisational and institutional capabilities of the Department of Roads and other stakeholders involved in road construction and ultimately to create sufficient in-house capacity within the client organisations to achieve sustainability. The (technical) advisory services included expertise for planning, surveying, design, supervision, execution, quality assurance and maintenance of road construction projects and strategy development for different stakeholders including CAB, CDB and SQCA. The Technical Assistance team comprised of two international road engineering experts, five national road engineers, one environmental specialist, one construction development specialist and one community maintenance specialist. A variety of more than 20 short term national and international experts were made available during the project in the areas like: quality assurance, bio-engineering, engineering geology, RBIT curriculum development, equipment management, transport economy, community organisation development and construction sector development. (see annex 1 ­ list of training provided) Implementation Technical Traditional road construction techniques caused major damage to the mountainous environment. The aim of the EFRC method is to prevent and mitigate environmental damage as much as possible. The selection of the road alignment tries to avoid geologically, environmentally and socially sensitive areas, and are selected from the MoWHS Road Master Plan (PPD). Lower categories of roads (including farm roads and power tiller tracks) are increasingly based on District Rural Access Plans, to optimise community driven access solutions. Detailed survey data is collected, including; but not limited to; forest cover, soil classification, slope steepness, water sources, cultural heritage, walking distances. The final design and contract drawings include locations of spoil deposits, barriers, walls, drainage points and other structures such as crib walls, gabion walls and bio-engineering. Cuts into mountain slopes are minimised and especially where the slopes are fragile and prone to landslides, part of the road width is made in fill, by constructing retaining walls. The number of trees felled is minimised where possible and bulldozers have been 60 replaced by excavators during first cut. Excavated materials are no longer thrown down the slope, avoiding severe damage to the vegetation cover and preventing fragile slopes being exposed to monsoon rains. Instead, excavated material is segregated for re-use and the surplus is transported by tippers to selected spoil disposal sites. Trenches and barriers constructed from logs or boulders immediately below the road are used to catch falling materials and in some cases to allow for the controlled dumping of excavated materials. Controlled blasting has been adopted in order to minimise damage to the surrounding hill environment and to prevent the slopes from being destabilised. Environmental management plans and quality assurance plans are used to optimise the construction. Social and Economic Community based maintenance has been introduced to create ownership and opportunities for direct income amongst the rural populations. As well as providing wages, there is also a skills enhancement regarding both road maintenance and financial management activities. Historically the high risk of landslides due to the construction method, coupled with the lack of consideration given to water management, led ultimately to high repair and maintenance costs in the lifecycle of the road. Using EFRC methods the initial investment during initial construction is higher than those constructed by means of traditional methods. However, the higher level of investment is reflected by higher road standards and quality. This means that maintenance and monsoon restoration costs are substantially lower over the total lifetime of the road. The improved quality of the road also leads to lower vehicle operation costs, which has a significant positive impact on the economic benefits derived from the roads. Other economic benefits include fewer road blockages, less stocking of essential supplies by communities, less damage to flora and fauna and less damage to property and cultural heritage sites. In summary, based on whole life costs and benefits, it is estimated that EFRC roads become economically cheaper than the 'traditionally' constructed roads after approximately nine years. SNV inputs The Rural Access Project Technical Assistance Component (RAP TA) has supported DoR with the development and introduction of the EFRC concept over the period January 2000 until December 2002. The RAP TA was funded by the Royal Netherlands Embassy in Delhi and was managed by SNV Netherlands Development Organisation. SNV has continued to support EFRC under the EFRC Support Project (EFRC SP). The EFRC-SP was cooperation between RGoB, SDS and SNV. The purpose of EFRC-SP was to assist DoR in implementation of Environmental Friendly Road Construction in 61 Bhutan. EFRC will only be sustainable if, in addition to being adopted by the road agencies, issues related to policy, community maintenance, technical training and education and private construction industry development are also addressed. The project aimed to achieve this by simultaneously implementing the following 8 components: 1. Rural Access Project implementation support; 2. EFRC concept further development within the RAP; 3. EFRC adoption by DoR; 4. Sustainable EFRC policy development; 5. Introduction EFRC concept to other road agencies; 6. Capacity building Dzongkhags and communities; 7. Capacity building for private construction sector; 8. EFRC introduction to technical training/education institutes. The eight components under the EFRC SP have been implemented by different agencies and were developed to ensure sustainability and to ensure a general qualitative improvement of the construction industry in Bhutan. The main Agencies who agreed to actively participate in the EFRC Support Project were: Department of Roads, Standards and Quality Control Authority, Policy and Planning Department Ministry of Communications (later MoWHS), National Environmental Commission Secretariat, RNR Engineering Cell, Forestry Development Cooperation, National Technical Training Authority (later BVQA), Royal Bhutan Institute of Technology, Construction Association of Bhutan, Construction Development Board and the Dzongkhags of Zhemgang, Lhuentse, Trashigang and Trashi Yangtse. Achievements The main achievement of the Technical Assistance is the holistic and balanced strengthening of the entire road construction sector and the institutionalisation of EFRC methods. The capacity of all stakeholders in the road sector (including Department of Roads, training institutes, contractors, Contractors Association of Bhutan and Standard and Quality Assurance Authority) has been strengthened through guidance, strategy development, advice, and on the job and class room training. Partnerships between these different stakeholders were built up through the establishment of a committee as well as combined workshops and study tours. Improvements in road construction have been made at all stages, including: A. At planning stage District Rural Access Planning was introduced B. At survey and design stage social, environmental and geotechnical assessments were improved and further incorporated and environmental friendly technical standards were endorsed; 62 C. At contracting phase standard bidding documents have been introduced and evaluation methods improved; D. During the construction phase quality assurance and environmental management plans have become mandatory and environmental friendly techniques are being applied; E. In the maintenance stage community maintenance contracts have introduced. The technical assistance team produced over 50 documents (including manuals, guidelines, handbooks, teaching materials and strategies) which are widely used by the different partners in the road sector. More than 1,000 employees of Government and contractors and community members received in country training on the job and through workshops. About 100 persons participated in study tours and trainings abroad. Environmentally Friendly Road Construction has been mainstreamed through the incorporation in the Ninth Five Year Plan, Road Act and in the Technical Specifications and Bidding Document. Cooperation DoR-SNV-World Bank The cooperation between Department of Roads, SNV and the World Bank has been very fruitful. There has been an intense cooperation between SNV and DoR. The DoR clearly indicated their needs in capacity strengthening modalities throughout the programme. DoR amended the mandate of the National Road Engineers (TA) in the field in order to make them more directly accountable. Due to lack of man power the Department could sometimes not provide sufficient counterparts which resulted in gap filling by SNV's TA. The Department sometimes felt that the EFRC-SP requirement to work with all the relevant stakeholders and on many different aspects in the road construction diverted the TA focus. However the partnership building and flexibility in support was appreciated. The cooperation of SNV with the World Bank in the implementation of the Rural Access Project has provided a unique opportunity to promote EFRC. It was not always easy as the WB team leaders and team members in the various missions differed, as this sometimes caused a diversion of earlier given advice. However different inputs also led to the identification of many improvement possibilities in the road sector which were often taken up by the Department and SNV. The missions and Aide Memoirs often gave a push to new and existing initiatives to make road construction in Bhutan more effective and efficient. 63 Lessons learned 1. The technical assistance has always focused on priorities of the Government, for example- the middle path philosophy and quality assurance which ensured commitment from the side of the government 2. The holistic approach of the Technical Assistance focusing involving all stakeholders in the road sector, all stages of the project cycle and on institutionalizing environmental friendly road construction ensured a balanced improvement. 3. The wide range of activities and shortage of counterparts made the internalisation and enforcement of some procedures and systems difficult. 4. EFRC promotion materials have greatly increased the awareness and understanding of EFRC and have enhanced ownership of EFRC 5. The role of the TA in creating an enabling environment for DoR and EFRC was essential to facilitate the change process of DoR. 6. The introduction of a technical innovation like EFRC facilitates the capacity strengthening process, since it makes the steps more concrete and acceptable. 7. The combination of long-term and short-term TA was highly effective. Short- term TA missions were well planned and contributed also to the capacity strengthening process. 8. The advisory rather than implementation role of the TA has created ownership for EFRC within DoR and has enabled DoR to strengthen its capacity. 9. Permanent placement of long term TA on the road project site can lead to role confusion and a too high dependence on the availability of the TA. 10. RAP TA proved that EFRC is economically and technically feasible and EFRC- SP ensured further development and dissemination. Annex 1 Short term training in country · 1 Community Maintenance Training ­ Kikhar · 3 Control Blasting training ­ Bidung(2), Mukazor(1) · 2 Material Testing & Quality Control Training -Bidung & Zhemgang · 2 Survey & Design workshops­ Thimphu · 2 Bio-Engineering Training ­ Trashigang, Zhemgang · 1 EFRC Introduction ­ Thimphu · 2 Quality Assurance Strategy ­ Bumthang, Thimphu · 1 Study Tour to RAP site for Stakeholders, EFRC Introduction & EFRC in Project Cycle ­ All RAP sites · 1 Stakeholders Workshop ­ Thimphu · 1 Modern Office Administration & Management ­ CMI P/ling · 1 Construction Management Training - Thimphu · 2 Community Road Maintenance Training - Trashiyangtse, Lhuentse · 1 Control Blasting Training ­ Yadi ­ Shershong · 1 Study Tours to Stakeholders to RAP Sites 64 · 2 Bio ­ Engineering Training ­ RAP Sites · 3 Quality Assurance Plan Training ­ Eastern, Central & Western Region · 1 Briefing on EFRC Experiences & Methods ­ DoR Quarterly Meeting · 3 EFRC Awareness Workshop ­ Eastern, Central & Western Region · 1 Survey & Design Training - Thimphu o Training of Trainers o 2 Monitoring & Reporting Training - Thimphu o 1 Contract Management - DoR, RNR & RAP Engineers o 1 Contract Management & Quality Assurance ­ Thimphu o 1 Workshop on Private Sector Development o 1 Workshop on Design & TS for farm roads o 1 Environmental Monitoring System o 3 Site Supervision & Procedures Workshop (Eastern, Central & Western region) Short term training ex country · Road & Bridge Maintenance Management ­ AIT Thailand (12 DoR Engineers) · Quality Management in Construction Works ­ AIT, Thailand (11 DoR Engineers) · Sub-Soil Investigation & Pavement Design ­ AIT Thailand (6 DoR Engineers) · Bio-Engineering Study Tour ­ AIT Thailand ( 13 Stakeholders) · Mtc. Mgt. of Const. Machinery, Procurement, Inventory Management ­ Sri Lanka (two batches (5 + 7 )DoR Mechanical Engineers) · Training on Non-Destructive & Bldg. Instrument Test ­ Switzerland (2 SQCA Engineers) · Training on testing of bitumen/emulsion & pavement works ­ CRRI New Delhi (5 SQCA & DoR Engineers) · Workshop/Seminar ­ AIT Thailand (1 DoR Senior Engineer) · Environmental Risk Management: Participants ­ 3 DoR Staff for 3 weeks · Contract Management: Participants ­ 8 DoR Staff & 2 RNR Engineering for 3 weeks · Study Tour to Thailand/India/Nepal: Participants ­ 13 from DoR and Stakeholders · Study Tour to Region: Participants ­ 6 DoR Engineers, 10 Stakeholders Long term training ex country: · Master in Transport Engineering ­ AIT Thailand (1 DoR Engineer) · Master in Environmental Engineering ­ Queensland, Australia (1 DoR Engineer) · Master in Structural Engineer ­ Sydney, Australia (1 DoR Engineer) · Master in Engineering Geology ­ Australia (1 DoR Engineer) 65 Annex 12. List of Supporting Documents 1.Aide Memoires, preparation missions for Bhutan RAP, by World Bank 1998-1999. 2.Aide Memoires, supervision missions for Bhutan RAP, by World Bank 2000-2006. 3.Bhutan Transport Sector Note, by World Bank, August 16, 2004 4.Borrower's Project Implementation Completion Report, by DOR, August 2006 5.SNV Input for ICR RAP-I, July 2006. 6.Development Credit Agreement (Bhutan Rural Access Project) between Kingdom of Bhutan and International Development Assoc iation, 1999 7.Country Assistance Strategy for Bhutan, by World Bank, November 29, 1999 8.Country Assistance Strategy for Bhutan, by World Bank, November 18, 2005 9.Royal Government of Bhutan. "Poverty Reduction Strategy Paper. A Cover Note to the Ninth Plan Main Document." Department of Planning, Ministry of Finance. 2004 10.ICR Mission Note, September 10-22, 2006 11.Project Status/Implementation Status Reports, 2000-2005 12.Project Appraisal Document for a Rural Access Project, November 19, 1999 13.Road Sector Development and Environmental Friendly Roads in Bhutan, by DOR and SNV, June 2004 14.Quality at Entry Assessment Report (QEA 3), by World Bank, 2000 15.Mid-term Review Report, Bhutan Rural Access Project, June 2003 16.Kyingkhor Consultancy Services. "Socio-Economic Impact Monitoring. Baseline Survey Report." Prepared for Royal Governme nt of Bhutan, Ministry of Works and Human Settlement, Department of Roads. January 1999 17.Kyingkhor Consultancy Services. "Socio-Economic Impact Monitoring. First Annual Report 2003." Prepared for Royal Govern ment of Bhutan, Ministry of Works and Human Settlement, Department of Roads. January 2004 18.Kyingkhor Consultancy Services. "Socio-Economic Impact Monitoring. Final Monitoring Report 2006. Bhutan Rural Access Pr oject." Prepared for Royal Government of Bhutan, Ministry of Works and Human Settlement, Department of Roads. August 13, 2006. 19.Scott Wilson. "Geotechnical Study for the Rural Access Programme." Volume 1: Report and Volume 2: Appendices. Prepared for Royal Government of Bhutan, SNV and World Bank. December 2004 and March 2005 66 MAP 67 IBRD 30466R 90°00' 90°30' 91°00' 91°30' 92°00' ELEVATION IN METERS: CHINA BHUTAN 5000 28°30' H I M A L A Y A 28°30' RURAL ACCESS PROJECT 3000 H G 1000 I PROJECT ROADS AS CONSTRUCTED PROJECT ROADS PLANNED TO BE PAVED ROADS H AT COMPLETION CONSTRUCTED AT APPRAISAL UNPAVED ROADS 1. Lhuentse-Dungkhar 40 km 1. Lhuntse-Dungkhar 37 km H I M A L A Y A 2. Dakpai-Buli 37 km 2. Dakpai-Buli 37 km NATIONAL PROTECTED AREAS N E R 3. Bartsam-Ramjar 8 km 3. Bartsam-Ramjar 8 km RIVERS I N 4. Gomkora-Tomzhangtsen 12 km 4. Tsengkharla-Kheni 7 km AIRPORT 5. Bartsam-Bidung 9 km 5. Gomkora-Tomzhangtsen 5 km H I M A L A Y A F O O T H I L L S 6. Mukozor-Tshogonpa 7 km 6. Bartsam-Bidung-Phongme School 10 km NATIONAL CAPITAL INDIA 7. Praling-Gomphu 9 km 7. Mukozor-Tshogonpa School 3 km DISTRICT CAPITALS 8. Yadi-Shershong 7 km 8. Thimsing Dungkhag Office-Tshangpo School 5 km OTHER TOWNS TOTAL 129 km 9. Feeder road to Yechhen 2 km 89°00' 89°30' 10. Feeder road to Gomphu Village 8 km DZONGKHAG BOUNDARIES TOTAL 122 km INTERNATIONAL BOUNDARIES GASAGASA JIGME JIGME DORJI DORJI 28°00' NATIONAL NATIONAL PARK ARK 28°00' Chu Gasa Pho Chamka BHUTAN Chu 0 10 20 30 40 50 KULONGCHHU KULONGCHHU u WILDLIFEWILDLIFE KILOMETERS Ch LHUENTSE LHUENTSE SANCTUASANCTUARY SANCTUARY Mo BUMTHANGBUMTHANG Tashithang TA TASHI PUNAKHA PUNAKHA Lhuentse YANGTSEYA THIMPHUTHIMPHU Tang Shengana WANGDUE NGDUE 1- 1-1 1-1 Trashi Paro Tango Punakha PHODRANG PHODRANG Kurjey Chari Tangmachhu 'Yangtse ChuPARO ARO Samtengang Kulong Jakar Chu Changkhala 27°30' Drukgye THIMPHU u Chu 27°30' Bumthang THRUMSHINGLATHRUMSHINGLA Haa Wangdue Trongsa Kur Yangnyer 4 3 - 3 Damthang Chu Paro NAT'L.T'L. PARPARK NAT'L. PARK 4 - 5 Bartsam TORSATORSA Phubjikha 5 - 6 STRICTSTRICT Haa TRONGSA TRONGSA Drametse Phongme SAKTENGSAKTENG NATURENATURE Sankosh 8 RESERVERESERVE WILDLIFEWILDLIFE BLACK BLACK MTNS. MTNS. Trashigang HAAHAA SANCTUASANCTUARY SANCTUARY NAT'L.T'L. NAT'L. PARPARK PARK Manas Zhemgang Mongar TRASHIGANG TRASHIGANG Tendru Torsa DAGANA DAGANA 2 - 2 ZHEMGANG MONGARMONGAR 6 - 7 Thrimshing Chhukha Daga SAMCHISAMCHI Wang Gomphu Pemagatshel 9 8 SAMDRUP SAMDRUP Sipsu Dorokha DungnaCHHUKHA CHHUKHA Chu Damphu 27°00' Tongsa7 - 10 10 PEMA- PEMA- JONGKHARJONGKHAR 27°00' SARPANGSARP NG GATSHELGATSHEL Samrang Daifam Mirchim Gelephu ROYAL MANAS ROYAL MANAS ROYAL Chu Panbang Dalim Samtse Manas Pagli Phuentsholing TSIRANG Sarpang NAT'L.T'L. PARPARK NAT'L. PARK Nganglam Singhi Lalai Bhangtar Samdrup Jongkha KHALINGKHALING This map was produced by the Map Design Unit of The World Bank. WILDLIFE SANCTUA WILDLIFE SANCTUARY SANCTUARY The boundaries, colors, denominations and any other information Raidak Phibseo shown on this map do not imply, on the part of The World Bank Kalikhola Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. PHIPSOO PHIPSOO WILDLIFE SANCTUAR WILDLIFE SANCTUARY 89°00' 89°30' 90°00' 90°30' 91°00' 91°30' 92°00' DECEMBER 2006