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Infrastructure Restoration Project (Loan 946-PHI[SF])

Infrastructure Restoration Project (Loan 946-PHI[SF])

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12/13/2013

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ASIAN DEVELOPMENT BANK
PPA:PHI 22187
PROJECT PERFORMANCE AUDIT REPORTON THEINFRASTRUCTURE RESTORATION PROJECT(Loan No. 946-PHI[SF])IN THEPHILIPPINES
November 1996
 
CURRENCY EQUIVALENTS
Currency Unit – Philippine Peso
At Appraisal At Project Completion At Postevaluation
P1.00 = $0.0467 $ 0.0362 $ 0.0400$ 1.00 = P21.393 P 27.650 P 25.000
ABBREVIATIONS
BOM - Bureau of MaintenanceDBM - Department of Budget and ManagementDILG - Department of Interior and Local GovernmentDOF - Department of FinanceDPWH - Department of Public Works and HighwaysEIRR - Economic Internal rate of ReturnLGU - Local Government UnitO&M - Operation and MaintenancePCR - Project Completion ReportPI - Project InspectoratePPAR - Project Performance Audit ReportRRP - Report and Recommendation of the PresidentSDR - Special Drawing RightsVOC - Vehicle Operating Cost
WEIGHTS AND MEASURES
hectare - hakilometer - kmmeter - msquare meter - sq m
NOTES
(i) The fiscal year (FY) of the Government ends on 30 June.(ii) In this Report, “$” refers to US dollars.
 
 
I. HIGHLIGHTS
1
. Objectives and Scope.
In 1988 the Bank introduced a new policy of lending for rehabilitationafter disasters. The Infrastructure Restoration Project was the Bank's first under the new policyand was intended to help the Philippines cope with the aftereffects of a series of unusually severetyphoons. The aim was to promptly restore damaged schools, flood control structures, ports androads which were essential to local communities or economies. The loan funded the selection,design, and implementation of a range of small-scale rehabilitation civil works under an emergencysector loan approach.2.
Cost, Financing, and Schedule.
The Bank provided a loan from its Special Fund resources of SDR14.72 million ($20 million equivalent) towards a total Project cost of $25 million, including a $5million component in Government funds. The actual Project cost amounted to $27.08 millionequivalent with Bank financing of $20.23 million. The slight increment of the Bank loan was due tothe depreciation of the US dollar against the Special Drawing Rights (SDR). Implementation of theProject took 34 months longer than expected because of delay in completing detailed design andthe expansion of the scope of the Project.3.
Implementation.
The Project was implemented to a Department of Public Works and Highways(DPWH) technical standard which was accepted by the Bank. The Project included moresubprojects than had originally been expected. As the Loan Agreement did not bind theGovernment's fiscal agencies responsible for budgetary allocations to adhere to the emergencyschedule, their procedures for fund release had to be followed by DPWH and this slowedconstruction. The quality of work completed was generally satisfactory but reflected the larger number of subprojects and a shortage of engineering skills among implementing staff. Completedstructures generally just met DPWH minimum service-life standard. The Bank's objective of restoring structures to conditions which would minimize the risk of future typhoon damage was notfully achieved.4.
Institutional Aspects.
The organizational and coordination arrangements adopted wereadhered to and generally benefited the Project. The creation of a project inspectorate (Pl) of consultants was useful and justified its funding from the loan amount. The lack of an interagencysteering body to oversee implementation as an emergency project, however, exposed the Projectto major delays.5.
Environmental Aspects.
Lack of post-construction maintenance and casual use of some floodcontrol structures as garbage dumps poses a public health hazard; no other significantenvironmental impacts were observed. However, the Project experience illustrated that thegrowing threat of floods and landslides to coastal communities in central Philippines continuesbecause of deforestation of nearby uplands. The Government should have a long-term plan topromote afforestation and watershed protection.6.
Cost/Benefit Assessment.
 A survey of selected subprojects confirmed that the Project wassocially and economically beneficial. The 53 surveyed subproject clusters showed economic ratesof return (EIRR) ranging from negative to 75 percent. The (Project cost) weighted average of therates of all surveyed subprojects approximates 23 percent. Although no rates of return werecalculated at appraisal or completion, this bears out the Project justification at appraisal. TheProject is economically viable.7.
Overall Performance and Sustainability.
The Project helped to restore essential physicalfacilities damaged by typhoons, thereby enabling the affected communities to maintain normallevels of economic and social activities in the aftermath of the calamities. Most subprojects

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