Document of The World Bank FOR OFFICIAL USE ONLY Report No: 25202 IMPLEMENTATION COMPLETION REPORT (CPL-36570; SCL-3657A; SCPD-3657S) ONA LOAN IN THE AMOUNT OF US$100.0 MILLION TO THE BOLIVARIAN REPUBLIC OF VENEZUELA FOR AN URBAN TRANSPORT PROJECT December 24, 2002 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective December 5, 2002) Currency Unit = Bolivars 97.1 Bolivars = US$ 1.00 (9/93) 1317.8 Bolivars US$ 1.00 (12/02) US$ 1 = $0.01030 (9/93) US$ 1 = $0.0008 (12/02) FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS ATI - Intemational Technical Assistance ATN - National Technical Assistance BANDES - Economic and Social Development Bank of Venezuela (Banco Econ6mico y Social de Venezuela) CAMETRO - Caracas Metro Company CAF - Andean Development Corporation Corporaci6n Andina de Fomento CBV - Central Bank of Venezuela CVT - Venezuelan Transport Council CORDIPLAN - Ministry of Coordination and Planning DGSTT - Land Transport Directorate EIRR - Economic Intemal Rate of Retum EBTU - Brazilian Urban Transport Company ESCUVIAL - Road Safety and Surveillance School FIDES - Intergovermental Decentralization Fund (Fondo Intergubemamental para la Decentralizaci6n) FONTUR National Urban Transport Fund (Fondo Nacional de Transporte Urbano) FUDECO - Foundation for the Development of the Midwest Region (Fundaci6n para el Desarollo de la Regi6n Centro - Occidental) FUNDACOMUN - Foundation for Community and Municipal Development (Fundaci6n para el Desarollo de la Comunidad y Fomento Municipal) GOV - Govemment of Venezuela HDM - Highway Development and Management Model IDB - Inter-American Development Bank MINDUR - Ministry of Urban Development MINFRA - Ministry of Infrastructure (formerly MTC) MTC - Ministry of Transport and Communications NPV - Net Present Value PMU - Project Management Unit PNTU - National Urban Transport Program (Programa Nacional de Transporte Urbano) SAR - Staff Appraisal Report SETRA - Autonomous Service for Land Transport (Servicio Aut6nomo de Transporte y Ttinsito Terrestre) VOC - Vehicle Operation Cost Vice President: David de Ferranti Country Manager/Director: Olivier Lafourcade Sector Manager/Director: Danny Leipziger Task Team Leader/Task Manager: Jorge M. Rebelo VENEZUELA VE Urban Transport CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 12 6. Sustainability 14 7. Bank and Borrower Performance 15 8. Lessons Learned 17 9. Partner Comments 20 10. Additional Information 29 Annex 1. Key Performance Indicators/Log Frame Matrix 30 Annex 2. Project Costs and Financing 31 Annex 3. Economic Costs and Benefits 33 Annex 4. Bank Inputs 35 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 38 Annex 6. Ratings of Bank and Borrower Performance 39 Annex 7. List of Supporting Documents 40 Project ID: P008210 Project Name: VE Urban Transport Team Leader: Jorge M. Rebelo TL Unit: LCSFT ICR Type: Core ICR Report Date: December 24, 2002 1. Project Data Name: VE Urban Transport L/C/TF Number: CPL-36570; SCL-3657A; SCPD-3657S Country/Department: VENEZUELA Region: Latin America and Caribbean Region Sector/subsector: General transportation sector (71%); Central government administration (19%); Sub-national government administration (10%) KEY DATES Original Revised/Actual PCD: 11/02/1990 Effective: 01/15/1994 12/27/1994 Appraisal: 09/28/1992 MTR: 01/15/1996 05/29/1997 Approval: 09/30/1993 Closing: 06/30/1999 06/30/2002 Borrower/lImplementing Agency: GOVT OF VENEZUELA ELA/FONTUR(MTC) Other Partners: Inter-American Development Bank STAFF Current At Appraisal Vice President: David de Ferranti Shahid Husein Country Manager: Olivier Lafourcade Orville Grimes Sector Manager: Danny Leipziger Asif Faiz Team Leader at ICR: Jorge Rebelo Jorge Rebelo ICR Primary Author. Albert Amos 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Stustainabilitv: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk-at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The Urban Transport Project aimed at improving the quality and efficiency of urban transport in Venezuelan cities. To assist in achieving this goal, the primary objective of the project was to improve and strengthen national and local institutions engaged in the planning, financing, design, and operation of urban transport systems. Secondary objectives included (i) increasing the efficiency of traffic and transport operations; (ii) preserving the urban transport infrastructure through better maintenance, and consequently, to assist in reducing user costs and deferring new transport investments. The project was also expected to contribute to poverty alleviation by facilitating access to public transport by the poor. 3.2 Revised Objective: Despite a major restructuring of the project which took place during the mid-term review, project objectives were not modified during implementation. 3.3 Original Components: The project consisted of two parts: Part A - an institutional development and policy program and Part B - an infrastructure and equipment investment program at the municipal level. Part A consisted of the following components: (i) an institutional strengthening program for the National Urban Transport Fund, (Fondo Nacional de Transporte Urbano FONTUR); and (ii) an institutional strengthening program at the municipal level; (iii) a national urban transport sector program; (iv) traffic police program; (v) policy studies and (vi) the preparation of city subprojects. Part B was intended to provide resources to individual municipalities for urban transport subprojects. Municipal subprojects included investments in traffic and transport infrastructure, equipment, and associated maintenance programs. 3.4 Revised Components: The first amendment to the Loan Agreement dated April 4, 1997 led to the cancellation of US$20.0 million of the original Loan. A subsequent amendment dated June 20, 1997 formalized the following modifications: (i) included study tours for national and local government officials as part of institutional strengthening activities; (ii) substituted the design and construction of a new training school for traffic police for the refurbishment of an existing school; (iii) raised the threshold amount for local competitive bidding for civil works and goods to $250,000, while reducing the aggregate amount for civil works under C. 1 and C.2 to $83,000,000 and $540,000, respectively; (iv) required the Borrower to prepare a resettlement plan, satisfactory to the Bank, in the event of a population resettlement as a result of project works; and (v) required participating municipalities to develop an action plan for roads, traffic signals, and the maintenance of traffic devices. Additional changes cited in this amendment reflect a trend toward increased decentralization and the subsequent delineation of project responsibilities of participating municipalities. This includes accelerating the timing for implementing a suitable organizational structure, staffing, and budget to undertake works financed by the project. An additional amendment to the Loan Agreement was prepared on November 9, 1999. This amendment was part of a general amendment for a number of ongoing Bank projects in Venezuela at the time, which allowed the Sector Director of Public Finance to submit Bank disbursements requests. An August 28, 2001 amendment to the Loan Agreement, which also affected other ongoing projects in Venezuela, enabled FONTUR to make direct payments to local and foreign contractors through the Economic and Social Development Bank of Venezuela (Banco de Desarrollo Econ6mico y Social de Venezuela, BANDES). 3 S Quality at Entry: The project predates the introduction of the QAG process at the Bank. The ICR finds the quality of entry to be satisfactory. The project is largely consistent with sector needs at appraisal and supported the 1993 -2 - CAS objective of supporting policy reform and priority investments to stimulate economic growth and social development in the context of macroeconomic stability. The CAS report also emphasized: (i) efficient resource allocation; (ii) increased efficiency in the public sector, and (iii) appropriate targeting and delivery of support systems to the poor. The project was consistent with all these objectives by supporting the development of FONTUR, a dedicated sector institution for urban transport, supporting the decentralization of urban transport services, introducing more cost effective measures for the provision of urban transport services, and supporting the expansion of urban transport services to peripheral urban areas. In this manner, the project supported the decentralization agenda set out in the Municipal Law of 1989 (LORM), which transferred responsibility over transport and urban transit operations to local governments. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The achievement of project objectives is rated as being satisfactorv overall. The significant progress achieved in the strengthening of urban transport institutions is balanced with sustainability concerns related to the high staff turnover within FONTUR and in the municipalities and current unsettled political environment. Although the secondary objectives of improved efficiency and maintenance of municipal roads and transit facilities were largely achieved in mostly low-income areas, it is difficult to measure the impact on poverty alleviation. It should be noted that political, technical, and macroeconomic conditions have varied quite considerably during the project implementation period. In particular, there have been 3 changes in goverment administrations, a severe deterioration of the macroeconomic position and subsequent depreciation of the exchange rate, difficulties in obtaining counterpart funds, and significant changes in the relationships between the national government and state-local governments. The level of attainment for each project objective is described in greater detail in the subsequent paragraphs. Improve and strengthen national and local institutions engaged in the planning, financing, design, and operation of urban transport systems The project substantially achieved the goal of supporting the development of urban transport institutions at the federal and local levels of government. In particular, the project served to dramatically increase the technical capacity in urban transport planning and economics, which was practically nonexistent at the start of the project. At appraisal, FONTUR had been in existence for about 2 years with very limited institutional, technical, and managerial capacity. Two cities, Barquisimeto and Maracaibo, had developed urban transport entities prior to the initiation of the decentralization agenda and two other cities, Cuidad Guyana and Merida established urban transport agencies prior to the start of the project. The development of an urban transport agency supported the inclusion of these cities as pilot cities under the project. The establishment of municipal urban transport agencies is summarized in Table 1. Table 1: Year Urban Transport Entity Established in Pro*ect Cities City (Municipal District) Year City (Municipal District) Year Barquisimeto (Iribarren) 1980 San Francisco 1996 Maracaibo 1980 Coro (Miranda) 1996 Cuidad Guyana (Caroni) 1991 Maturin 1996 Merida (Libertador) 1992 Cumana (Sucre) 1996 Isla Margarita (Porlamar, Pampatar, El Valle) 1995 Barinas (Barinas) 1998 Puerto Fijo (Carirubana) 1996 Cuidad Bolivar (Heres) 2001 - 3 - Prior to the project, there was a very limited pool of urban transport professionals in the entire country that could staff the new agencies. Technical assistance was provided to address this need as well as assist in the institutional development of national and local urban transport entities. This program was divided into national and international subcomponents. The International Technical Assistance (ATI) program focused on improving the capacity of sector institutions in urban transport. During the five phases of the program that were jointly financed by the Bank and the Inter-American Development Bank (IDB), over 250 professionals from FONTUR, participating municipalities, and the private sector benefited from a combination of training courses, workshops, and study tours in urban transport economics and planning,, general management, transport engineering, procurement, supervision and monitoring, information systems, and environmental management. However, the ATI program did not provide stand-alone courses in financial management, as had been planned at appraisal. Instead, this activity was combined with the other components of the technical assistance program. The ATI program had the additional benefit of creating an institutional mechanism for coordination between FONTUR and the participating municipalities. The level of coordination between FONTUR and the municipalities remained relatively strong at project end. The PNTU program maintained extensive contacts with local universities, which previously did not have comprehensive urban transport programs until the mid-l 990s. These activities helped to create a nucleus of professionals in urban transport as well as develop and institutionalize planning methods and operational methodologies within sector institutions. Direct support for FONTUR involved the following activities: (i) direct technical assistance and training to its staff; (ii) fnancing of civil works for its new headquarters, as its previous offices were severely overcrowded and lacked adequate resources needed for project implementation, and (iii) the financing of equipment, information systems, and urban transport planning tools for its new headquarters. FONTUR moved into its new headquarters in 1999. At the end of the project, FONTUR has become a viable national agency for urban transport with adequate institutional capacity to oversee an ongoing technical assistance program to rmunicipalities and supervise civil works in urban areas. FONTUR is planning to expand its program to include an additional 26 municipalities. Additional strengthening of urban transport institutions at the municipal level has occurred gradually and has yielded considerable progress given their extremely low starting point. As a condition to participate in the project, municipal governments were required to establish agencies to carry out and oversee urban transport activities. FONTUR assisted in setting up these entities by financing the purchase of office equipment and information systems and by providing technical assistance to support the institutional development of the local government entities. Under the ATI and the National Technical Assistance (ATN) programs, FONTUR provided training and conducted workshops for local governments officials, which achieved the following results: (i) increased the technical capacity in urban transport economics and planning; (ii) strengthened the administrative and managerial capacity to carry out procurement as well as implement and supervise civil works; (iii) strengthen planning and operational activities. During implementation, municipal governments demonstrated adequate capacity to contract out and implement civil works projects in their respective territories. However, high staff turnover after local elections limited the extent that the technical assistance programs could be fully institutionalized within the municipalities. It should be noted that the training provided under the program has, nevertheless, helped to increase the number of qualified professionals in urban transport, whether in the government or in the private sector. -4 - Increase the efficiency of traffic and transport operations The project met this objective by improving the ability of urban transport institutions to plan civil works projects that improved traffic flow, road security, and access to transport services to peripheral urban areas. Since nearly all the completed civil works were along either existing or newly-created public transit routes, the project also improved efficiency of urban transit operations. In all, 135 civil works were carried out during project implementation, which covered the following general activities: (i) road rehabilitation, repaving, and maintenance; (ii) road alignment and widening; (iii) improvement of road intersections and crossings; (iv) restoration and the addition of road signs and stoplights to rehabilitated roads; and (v) construction of bus stops and waiting areas. The first works to be implemented were traffic management works, including road signalization and road intersections improvements. These works had a significant impact in reducing traffic congestion by improving traffic flow. However, even better results could have been achieved had the addition of road signs been carried out in conjunction with synchronization works, as had been planned. Project works also supported the rationalization of existing bus routes that improved efficiency by providing wider coverage using fewer overlapping routes. To a lesser extent, dedicated passenger bus areas reduced congestion caused when buses stopped to load and unload passengers. Most completed works were found to be in good condition and most of the project works manifested higher levels of traffic. These activities have improved level of service and time savings to users along certain routes. Although project works also contributed to improved road safety conditions, this parameter is difficult to quantify due to the lack of base data (e.g.. accident and fatalities rates) at the start of the project. However, most cities have claimed that there has been a downward trend in accident and fatality rates. From an institutional perspective, municipal transport entities have begun to appreciate the importance of improving operations and controlling traffic to reduce congestion, while decreasing the reliance on new infrastructure development. Nevertheless, bottlenecks continue to persist regarding traffic roundabouts and bridges, which continue to limit traffic flow. Finally, a computer model developed by FONTUR to estimate public transit tariffs appears to be widely in use among the participating municipalities. Given the need to adjust bus tariff to changing macroeconomic conditions, this has supported revenue estimation and collection. Nevertheless, it is politically very difficult to impose tariff increases along existing routes. Preserve the urban transport infrastructure through better maintenance, and consequently, to assist in reducing user costs and deferring new transport investments The project had a considerable impact in creating and institutionalizing a maintenance culture within the participating municipalities, which was virtually nonexistent prior to the operation. To this end, the project strengthened the capacity of participating cities to carry out the planning and implementation of road maintenance activities. Although there is now a better understanding regarding the need for continued maintenance to prevent the deterioration of road and urban transport works, most municipalities have limited resources for routine and preventatives maintenance activities. Negative growth, inflation, and staff turnover has also reduced the availability of technical and financial resources to carry out maintenance activities. An additional concern is that the continued level of maintenance of works rehabilitated under the project may drop off due to financial constraints, which could hurt sustainability over the medium-term. Due to recent implementation of many works, there is limited information available to accurately determine the impact of the project on reducing transport costs to the user. - 5 - Contribute to poverty alleviation by facilitating access to public transport by the poor The project appears to have had a positive imnpact in alleviating poverty, although it is difficult to estimate the actual benefits since poverty indicators where not completed at appraisal due to the limited data at the national and local levels. FONTUR made it a condition for financing civil works at the local level that new projects either improve existing urban transit routes or that a new route be established along affected areas. As a result, nearly all project works supported improved public transit. This had the largest impact on low-income populations, who are the primary users of public transit. In addition, the project also supported the construction of bus stops, bus terminals, waiting areas, and pedestrian bridges in Barinas, Cuidad Guyana, Cumana, and Maracaibo, which improved access to bus routes. In this manner, residents of peripheral urban areas obtained expanded and improved transit service provision. Urban transit was improved by the addition of traffic signs, which improved traffic flow and reduced accidents. It should also be noted that a pilot project for bicycle lanes in Barinas was implemented. 4.2 Outputs by components: 4.1 Overall implementation of the two project components, institutional development and physical works, are rated satisfactory. A detailed description of the results achieved under each component is listed in the subsequent paragraphs. PART A - Institutional Development The implementation of this component is rated as satisfactory. The evaluation of the technical assistance provided could be divided into the following subcomponents (i) the FONTUR institutional strengthening; (ii) municipality institutional strengthening; (iii) national training program for urban transport; (iv) traffic police; and (v) institutional and policy studies; and (vi) city preparation studies. At appraisal, an estimated US$34 million (roughly 17 percent of expected project cost) was allocated for this component. Part Al - FONTUR Strengthening. FONTUR was established in 1992 with an early mandate to oversee the upgrading of the public transport vehicle fleet and to provide financing for short-term or emergency works in the major municipalities in Venezuela. This experience gave FONTUR extensive interaction with municipal governments, who had only recently in 1989 received responsibility over urban transport activities as part of the decentralization agenda. Based on this experience, FONTUR was selected to manage and supervise the institutional strengthening of large municipalities (over 100,000 inhabitants) financed by the Bank and the IDB. Because of the level of institutional capacity it had developed under the project, FONTUR was given responsibility over the national student transport subsidy program as well as the management and implementation of VIAL III program, which supports decentralization of road activities to state governments. The Bank is financing the latter program under 3553-VE. As a newly created institution, FONTUR experienced numerous diffic;lties at the initial stages of the project as it attempted to quickly hire qualified managerial and technical staff, develop and institutionalize operational procedures, and put in place information systems, and effective monitoring and oversight mechanisms. To support the institutional development of FONTUR, the project supported the move to a larger headquarters as well as financed information systems and office equipment to help transform FONTUR into a well-functioning entity for urban transport. In addition, the project supported the development of an operational manual and the contracting of technical personnel to oversee and mitigate potential social and environment impacts related to the National Urban Transport Program (PNTU). This process was undertaken in the context of designing, coordinating, and monitoring an extremely complex civil works and technical assistance program for 21 municipalities. Several factors affected - 6 - implementation, which include the following: (i) delays in developing transport plans for the participating municipalities; (ii) difficulties in processing tender documents for engineering designs and project works; and (iii) inadequate monitoring and oversight regarding civil works design and inspection contracts. To address some of these difficulties and to streamline operational processes, FONTUR was reorganized in 1998, which divided works implementation into 5 regions, separated out procurement and financing functions, and improved coordination both intemally and with the municipalities. At the suggestion of the Bank, regional "umbrella contracts" for engineering designs were used, which accelerated the preparation and approval of bidding documents and streamlined the tender process for civil works. Part A2 - Municipalitv Strengthening. The project directly supported the decentralization agenda by directly increasing technical, institutional, and managerial capacity in urban transit operations to the 12 cities participating in the project. Specifically, technical assistance provided to the 5 pilot cities (Barquisimeto, Cuidad Guyana, Maracaibo, Maturin, and Merida) and 7 additional cities (Barinas, Ciudad Bolivar, Coro, Cumana, Isla Margarita, Punto Fijo, San Francisco) that entered into the project during implementation. In addition, FONTUR managed a parallel IDB and Andean Development Corporation (CAF) programs covering an additional 12 cities, including the 5 municipal districts within Caracas. At the start of the project, coordination of urban transport management at the local level was practically nonexistent in most cities. In a number of cities, technical and administrative resources for carrying out urban transport programs were shared by other municipal departments and most lacked the physical resources for overseeing urban transport activities. Project municipalities also lacked an adequate inventory of urban road and transit facilities. Through technical assistance and training provided by FONTUR under the project, the participating municipalities were gradually able to increase internal capacity in urban transport planning, transport economics, traffic engineering, road maintenance, and institution building. In addition, FONTUR prepared a number of technical notes as well as the updating of operational and technical manuals to support the institutional development of local institutions. The project assisted in building the capacity of urban transport entities within municipal governments to undertake critical urban transport activities by providing technical assistance under the ATI and ATN programs. Technical assistance activities financed under the project included the following: (i) investment planning; (ii) monitoring and supervision of civil works; (iii) carrying out urban transport studies (e.g. routes, fleet inventory, traffic capacity, and tariffs); (iv) identifying and relieving traffic bottlenecks; and (vi) developing and installing road inventory database. The ATN provided training modules for establishing and strengthening urban transit police at the local level. Roughly 140 officials from the participating municipalities (roughly 53 percent of the total) participated in the technical assistance programs. In addition, the project helped building the administrative and technical capacity to tender, implement, and supervise civil works, which had been extremely weak at the start of the project. Throughout the project, FONTUR provided training and technical assistance to improve the procurement of engineering design, project works, and inspection activities. The project also financed computer equipment, information systems, communication equipment, and vehicles to improve institutional capacity, support works supervision, and improve road safety. Although a few municipalities can carry out these activities largely on their own with limited assistance from FONTUR, capacity tends to differ among municipalities. Staff turnover and restricted financial resources have limited the development of institutional capacity in this regard. Part A3 - National Training Proeram for Urban Transport. Technical assistance and staff training was provided to FONTUR and the municipalities through the International Technical Assistance (ATI) program. The ATI was a multi-year program, designed to increase the understanding and capacity of - 7 - project agencies at all levels in urban transport planning, transport economics, and traffic engineering. In all, 138 transport professionals representing 37 public sector entities and private companies attended this program. In addition, an estimated 7,715 bus operators from 11 municipalities attended training courses on skills improvement, traffic laws, and road safety from the beginning of the project through 2001. Although significant, the number of attendees is relatively small in comparison with the total number of bus operators in the project municipalities that need training, as this profession generally experiences a great deal of staff turnover. Additional financial resources from FONTUR and the municipalities would have helped to provide a wider reach for this program. Part A4. Traffic Police. This component was intended to improve the general training and expertise of the national traffic police as well as that of the participating municipalities. Originally, this objective was to be achieved at the national level by financing technical assistance and equipment to support a new Road Safety and Surveillance School (ESCUVIAL) and through the development of a national training program for local traffic police and other transit security officials. At the mid-term review, the project was revised to support an existing facility rather than support the construction of a new facility and by placing greater emphasis toward the establishment of traffic police units at the municipal level, which was more consistent with the national decentralization agenda. At the national level, these activities were not achieved due to the restructuring of the Land Transport Directorate (DGSTT), the weak capacity of its successor organization, Autonomous Service for Land Transport (SETRA), and the inadequate coordination between the Ministry of Infrastructure (MINFRA), FONTUR, and SETRA. SETRA has become a primarily regulating agency and has shed many of its operational activities. Greater success was achieved at the municipal level regarding the development and oversight of traffic police. Most of the local traffic police units are well functioning and are well staffed. Under the project, the participating municipalities received adequate equipment, including information systems to track accidents, communication equipment, vehicles, and tow trucks. FONTUR recently inspected this equipment and was generally found to be in good condition. Under the ATN, FONTUR provided technical assistance and training to support the development and strengthen the capacity of local urban transit police units. Some of the benefits achieved from these activities include: (i) reduced response time in accident situations (ii) improved traffic safety through the imposition of traffic penalties. Because most of the related equipment and vehicles were delivered to the municipalities toward the end of the project, it is too early to be able to accurately quantify the results achieved. It should be noted, however, that none of the newly created municipal traffic units under the project are integrated within SETRA, which limits coordination of accident prevention measures at the national level. Part A5. Institutional and Policy Studies At appraisal, it was foreseen that a number of institutional and policy studies were to have been carTied out to improve the organizational structure, financing mechanisms, and technical capacity of sector institutions. Notably, the study that mapped out FONTUR's organizational and staffing requirements helped FONTUR to develop into a functioning sector institution. The study regarding the review of the legal and regulatory framework for urban transport was completed. Key elements of the study include: (i) defining the role of the national and local governments in carrying out urban transport activities; (ii) sector modernization and organizational structure; and (iii) defining operational and financial parameters. Parts of these recommendations were incorporated in the 2001 Transport and Transit Law. Table 2 summarizes the studies proposed at appraisal, current status, and results achieved. Despite the recommendation of the Bank, tariff policy and others important aspects of an urban policy were not included in the final draft of the sector law. However, FONTUR has prepared a National Transportation Policy, which has helped set the course for sector development. -8 - Table 2: Status and Outcome of Proposed Studies Study Status Outcome/Comments National Level FONTUR organization and staffing Completed FONTUR reorganized after mid-term review to improve coordination, provision of TA programs, and oversight. DGSTT organization and function Not completed DGSTT was reorganized into SETRA is now primarily a policy-making entity. Local governments starting to carry out policing traffic and related training activities. Revision of National Transit Law Completed Recommendations partially incorporated in the new Law. Resource mobilization and allocation In progress Study was intended to examine vehicle operating costs, income, traffic patterns, and user fees. Modifications in design led to delays. Current study focusing on financial mechanisms in the urban transport sector. National transport subsidies In progress Implemented under sector financial mechanisms study Local Level Targeted public transport subsidies in a Not completed Required completion of national study on subsidies pilot city (Maturin) Legal framework for urban transport level In progress Under review Caracas MTA coordination study In progress Implementation is being carried out under IDB loan. Coordination difficulties among the 5 area municipalities slowed implementation. Motor vehicle emissions study for Caracas Completed. Coordination difficulties required change in scope to Valencia, a city with similar topographic characteristics. Management information system (MIS) ir Completed MIS installed in pilot city, Maracay, in the latter half of pilot city 2000. System includes mechanisms for counting traffic and preparing economic analyses. Staff training provided. MIS will be scaled up to cover an additional 5 _ cities. Information system for road safety Completed Completed in mid-2002. PART A6 - City Preparation and Studies Component The project required that municipal governments prepare general urban transit plans to evaluate existing needs, future investments, and sector arrangements. This activity was largely achieved, as the following studies were completed during implementation: (i) Ciudad Guyana, Cumana, and Margarita completed integrated urban transport studies; (ii) Barquisimeto, Maracaibo, and Merida completed public transport reviews; and (iii) Barinas, Coro, and Punto Fijo completed operational and institutional reviews for urban transport. Only 2 municipalities (Ciudad Bolivar and Maturin) did not complete an urban transport study as planned. PART B - Infrastructure and Equipment Investment Progress Overall, the implementation of this component is rated as satisfactory. At appraisal, thls component was expected to constitute 83 percent of total project costs (US$166.0 million) and included a traffic and transport infrastructure and equipment, maintenance, and Caracas subcomponents. -9- Part B1. Traffic and TransDort Infrastructure and Eguivrment. This subcomponent focused on the following activities: (a) purchase and installation of traffic systems; (b) rehabilitation of road infrastructure; and (c) investment in public transport facilities. There was a delay of over one-year in loan signing and effectiveness, which pushed back the implementation of civil works financed by the project until early 1995. Implementation was subsequently slowed as a result of difficulties in obtaining counterpart funds and the transfer of external resources to the project. Another factor was the initial lack of adequate coordination between FONTUR and the respective municipalities regarding preparation of engineering designs for project works. Due to the volume of works financed by the project, it was extremely difficult to tender and review the engineering designs given the limited resources within FONTUR. In addition, a significant percentage of initial designs were found to be inadequate. To address these issues, FONTUR contracted out firms to carry out "umbrella contracts" for engineering designs, representing three distinct regions (Central-West, West, and East). This approach achieved greater economies of scale in the contract tender process and design preparation, encouraged better adaptation to local characteristics, and promoted technology transfer at the local level. In all, the project financed roughly 135 works in the 12 participating municipalities. Barinas, Barquisimeto, Cumana, Maracaibo, Maturin, and Punto Fijo did reasonably well in developing and implementing their respective infrastructure works programs under the project. The project covered the following activities: (i) road rehabilitation, re-pavement, and maintenance; (ii) road alignment and widening; (iii) improvement of road intersections and crossings; (iv) restoration and addition of road signs and stoplights to rehabilitated roads; and (v) development and rehabilitation of bus stops and waiting areas. The first works to be implemented were traffic management works, including road signalization and improvement of road intersections. Nearly all the project works have been completed with most project works in good condition. Resettlement was required to implement works along Carrera 21 and Calle Uruguay in Barquisimeto, which was undertaken in accordance with the Bank's safeguard policies on resetdement. These two civil works subprojects were not financed by the loan by project end. The project also assisted in financing the equipment needed to transform FONTUJR into a properly functioning agency for urban transport (e.g. computers, vehicles, etc). The equipment purchased under the project included information systems to improve the compilation of urban transport statistics and road sign inventories. In addition, the project financed the purchase of equipment that improved the institutional capacity and operational activities in Ciudad Guyana, Maracaibo, Merida and Punto Fijo. At the initial stages of the project, supervision of civil works was found to be weak. FONTUR progressively improved supervision activities as it built up its internal capacity, hired enough technical staff, and developed an adequate organizational structure to effectively supervise a program that covered 21 municipalities throughout the entire country. Supervision of project works improved by: (i) designing 5 distinct geographic regions to improve the coverage of monitoring and supervision activities; (ii) appointing a separate task manager for each participating municipality to oversee works supervision and maintain quality control; (iii) creating a specialized procurement division; (iv) providing technical assistance to municipalities to carrying out procurement activities to ensure improved quality at entry; and (v) imposing noncompliance penalties on civil works contractors for delayed or incomplete implementation. Nevertheless, the slow pace of implementation and the constraints on the absorptive capacity of the municipalities and FONTUR led to the cancellation of the US$20.0 million of the loan in 1997 and reduced the total number of planned works. -1 0 - Part B2. Maintenance. The project was intended to finance routine and periodic maintenance activities of roads, traffic signals, and other traffic devices at the municipal level, which had historically been deferred for long periods. Most of the maintenance works were carried out in conjunction with road rehabilitation works. An estimated 360 km of roads were maintained under the project. About 70 percent of these works were carried out in Barquisimeto, Cuidad Guyana, and Maracaibo. Road maintenance projects were either implemented in conjunction with road rehabilitation and pavement works or in isolation. Most of the road maintenance works financed under the loan were in relatively good condition at project end. Road maintenance activities were also supported by the institutional strengthening component of the loan. Part B3. Caracas. At appraisal, the goal of this subcomponent was to improve coordination between the 5 municipalities comprising the metropolitan Caracas area to develop a unified policy for public transport subsidies, determine the role of Metrobus system, reduce traffic congestion, and improve the delivery of transport services to low-income groups. During project implementation, responsibility for this component was effectively shifted to the IDB program, which was overseeing the institutional development and works implementation within Caracas as part of a commensurate loan. 4.3 Net Present Value/Economic rate ofreturn: An ex-post cost-benefit evaluation was carried out for 6 representative subprojects in 5 project cities. This sample included both pilot cities and newer participants as well as a complete range of infrastructure activities financed under the Bank-project. Based on this sample, the average economic intemal rate of (EIRR) return was estimated at 29.5 percent with time savings included, which is slightly below the 32 percent average anticipated at appraisal. Without time savings, the EIRR is around 12.1 percent, which is slightly below the 14 percent anticipated for the same sample ex-ante using the methodology delineated at appraisal. 4.4 Financial rate of return: N/A 4.5 Institutional development impact: The project has had a substantial institutional development impact. As a newly created entity within the Ministry of Transport and Communications (later restructured into the Ministry of Infrastructure or MINFRA), FONTUR lacked administrative and technical capacity, experience in transport planning and traffic management, and familiarity with the monitoring, oversight, and supervision of civil works. The lack of qualified technical staff, especially civil engineers, was a critical bottleneck in the early stage of project implementation. Technical capacity was increased through intensive training courses on urban transport planning, transport economics, and traffic engineering. This training was also provided to representatives from the municipal govermments. The technical assistance program had a secondary impact of creating a nucleus of qualified professionals in urban transport, which previously did not exist in Venezuela. This experience is reminiscent of the very successful preparation of EBTU (Empresa Brasileira de Transporte Urbano) in Brazil in the early seventies. Technical assistance was also provided to FONTUR and local governments in the areas of institution building, monitoring, oversight, and supervision. An important indication of the increased institutional capacity was the fact that FONTUR was asked to manage the Highway Management Project (Ln. 3553-VE) after the restructuring of the Ministry of Transport and Communications (MTC) in April 1998. - 1 1 - 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control ofgovernment or implementing agency: Political Instability. Loan signing and effectiveness was delayed nearly 1 year as a result of political instability related to coup attempts and a presidential impeachment. Effectiveness did not take place until December 27, 1994. There were three changes in government administrations between 1993 and 1999, which often led to turnover in staff, especially at the managerial level. Finally, political instability related to the events of April 11, 2002 paralyzed government activities and slowed the project during final months of implementation. Macroeconomic factors. The steep depreciation of the Bolivar in 1995-96 and 2001-2002 resulted in sharp decreases in the appropriation of government counterpart funds and disrupted project activities. The most recent depreciation unexpectedly reduced total project disbursements, as project activities were denominated in Bolivars, and increased the unused portion of the loan by roughly $9.0 million (from an expected $3.0 million to nearly $12.0 million). The sudden and steep decline in the currency during the final months of the project did not give FONTUR sufficient time to plan additional project-related activities to expend the remaining unused portion of the loan. Another impact on the project was on the procurement and implementation of project civil works contracts, which required the addition of inflation indexation mechanisms. Force Majure events. The heavy rains and subsequent flooding in 1999, which lead to severe loss of life, temporarily diverted FONTUR's resources in an effort to provide access to the most heavily affected areas. This had an impact in delaying implementation. 5.2 Factors generally subject to government control: Changes in the legal framework for procurement. In 1999, the GOV enacted new procurement guidelines, which contradicted the Bank's procurement guidelines. The Contracts Law (Ley de Contrataci6n) required all firms to become part of a national registry to be eligible for goverunent contracts. This requirement effectively excluded most foreign finms. Moreover, the Ley de Licitaciones (Procurement Law 73/1999), modified the evaluation process and the amount of information required, which raised transparency and efficiency concerns. The enactment of the national procurement law led to a dramatic slowdown in new project procurement and the overall pace of project implementation during 2000, while this dispute remained ongoing between multilateral agencies and the GOV. This issue was resolved when the Government revised the Ley de Licitaciones to include key provisions of the Bank's procurement guidelines. Inadequate allocation of financial resources. The Ley Paraguas, which governs the appropriation of external funds, was a bottleneck for a number of Bank-financed projects in Venezuela. Under the Ley Paraguas, project funds are approved annually and are linked to government borrowing needs and the annual external debt ceiling. As a result, appropriations required ministerial and Congressional review and approval, which was often lengthy and highly subject to political conditions. The complexity of this process reduced access to external funding resources as well as impeded continuity in planning and implementation. If in a given year, project funds remained unused, these funds could not be fully rolled over to the next year. Moreover, dramatic changes in the macroeconomic environment led to large decreases in real terms in external project funds, as approved amounts were not sufficiently adjusted to inflation. In addition, there were also delays in improving the annual budgets of FONTUR and the FIDES, which assisted the municipalities in financing their respective contributions for civil works projects. - 12 - 5.3 Factors generally subject to implementing agency control: Weak management during the early stages of implementation. The project was impacted by ineffective management, limited implementation experience, and a small number of technical resources at the onset. These risks were properly identified during appraisal. The project not only represented the first Bank project in the urban transport sector in Venezuela, but implementation was carried out by newly-created government agency, FONTUR. FONTUR faced the initial challenge of building its internal capacity, hiring qualified managerial and technical staff, installing site operations and information systems, while simultaneously trying to develop the capacity of urban transport entities at the municipal level. The situation was compounded by the inconsistent sector data derived from a number of sources as well as the lack of integrated information systems both within FONTUR and linking FONTUR with local transport entities. Despite the project launch missions, FONTUR also encountered numerous difficulties in understanding and implementing the Bank's procurement and disbursement procedures, with led to frequent implementation delays. These issues were eventually ameliorated through the technical assistance programs financed under the project, which increased institutional and technical capacity as well as provided training in the disbursement and procurement procedures to FONTUR staff and the municipal officials. Weak oversight and supervision during the early stages of implementation. At first, there were numerous implementation delays regarding the level of monitoring, oversight, and supervision. These delays were caused by difficulties in contracting out consulting firms to carry out engineering designs and the lack of adequate communication and coordination between FONTUR and the respective municipalities in the supervision of engineering design and project works. The latter issue was later resolved with the appointment within FONTUR of a separate task manager for each participating municipality, who were responsible for carrying out works supervision and maintaining quality and by the preparation of umbrella contracts for engineering designs. FONTUR also initially experienced difficulties in supervising project works. Monitoring and supervision activities improved gradually through technical assistance provided under the project. At the Bank's insistence, FONTUR established a specialized division within the PMU to oversee procurement activities. FONTUR also reorganized itself to supervise infrastructure works along geographic lines in order to improve overall coverage. FONTUR also provided technical assistance to municipalities to improve monitoring and supervision controls, which had been extremely weak at the start of the project. Staff Turnover. During implementation, there was considerable staff turnover of technical and managerial staff, especially after changes in government. Staff turnover at the municipal level was also extensive after the local elections in 1995, 1998, and 2000. To some extent, staff turnover limited the effectiveness of the technical assistance provided, as the knowledge gained was not fully institutionalized, especially at the local level. A mitigating factor was the continuous nature of the technical assistance program for municipal officials, which remained in place after each election and was specifically designed to increase the capacity of staff without extensive experience in urban transport. Implementation through multi-municipal entities. It should be noted that FONTUR faced greater difficulties in the implementation of a complementary IDB program that formed part of the larger urban transport program. The designation of project implementation activities at the local level through mancomunidades, coordinating entities that represent two or more neighboring municipalities, proved to be a major factor in these delays. Political disagreements regarding the sharing of project responsibilities as well as the allocation of project resources for civil works often prevented the mancomunidades from becoming effective implementation entities. FONTUR bears some responsibility, as the institutional development of these entities has not been fully achieved in line with the primary project objective. - 13 - 5.4 Costs and financing: The original loan amount of US$100 million was reduced by US$20 million in April 1997. An estimated US$68.7 million (roughly 85 percent) of the planned US$80.0 million was disbursed by project end. The remaining unused portion of the loan was cancelled by the Bank. Of the total amount disbursed, US$26.7 million financed consultant services (39 percent) and US$41.1 million financed civil works and goods (63 percent). The higher percentage of consultant services reflects the emphasis on achieving the primary objective of the project of strengthening sector institutions, the costs associated with the umbrella contracts for engineering design, and the effect of staff turnover. An estimated US$20.0 million was cancelled from the original loan in 1997. For local civil works, municipal governments were required to provide 25 percent of the total cost of the subproject. Although a number of municipalities were able to finance their respective contributions, FONTUR ended up financing the local contribution of financially strapped municipalities, particularly in the final years of the project. This action was necessary due to the deterioration of the fiscal position of the municipalities, which had worsened during the severe macroeconomic crisis impacting the country. In order to finance the municipal government's contribution, FONTUR was required to complete an extensive analysis that verified their financial situation. In all, participating municipalities provided an estimated $9.1 million, or 11.2 percent of the total value of civil works carried out under Part B of the project. 6. Sustainability 6.1 Rationalefor sustainability rating: Sustainability is rated as likelv. This rating is based on the underlying legal and regulatory framework and budgetary resources of FONTUR and of the participating municipalities and takes into account the current political and economic volality in the country. FONTUR's budgetary position is relatively strong. Decree #142 provides FONTUR with the formal mandate to indefinitely continue its mandate regarding its primary activities-supporting municipalities in urban transport activities, student subsidies, and vehicle fleet rehabilitation and maintenance. These activities have received strong political and popular support at all levels of government to date. Moreover, the PNTU program is financed through a 0.50 BS per liter domestic gas tax. Although this funding source has not been adjusted for inflation and has been greatly reduced as a result of the severe depreciation of the national currency, the high volume of gas usage still provides for a stable source of funds. FONTUR is been allowed to keep unused funds from its budgetary resources in a contingency fund, which are invested in capital market instruments. FONTUR estimates that it has roughly 3 years of reserves even without additional budgetary allocations. This mechanism effectively insulates FONTUR from the vagaries associated with determining annual discretionary budget spending, ensuring the existence of secure source of funds for its operations. Nevertheless, there are a number of mitigating factors that may negatively impact project sustainability in the medium-term. These include: (i) high level of staff turnover at technical and managerial levels at the national levels; and (ii) political changes in management staff in mid-stream. These changes have impeded continuity in planning and implementation and have also led to a partial "brain drain" that slowed down project implementation. It should be noted that a strong depth of internal capacity as well as close connections with local universities have permitted FONTUR to resume operations at relatively normal levels after periods of interruption. At the municipal level, institutional capacity has been harder to rebuild after staff changes after municipal elections. It should also be noted that the continued unsettled political and economic enviromnent may affect sector performance in the areas supported by the project. - 14 - Furthermore, the level of institutional capacity and financial resources tend to differ from among municipalities. In general, municipal governments obtain funding from the following three main resources: (i) taxes and user fees; (ii) FIDES (Inter-Govermmental Decentralization Fund); and (iii) government appropriations based on demographic and similar criteria. Local user fees and taxes, include a gasoline tax that assist in financing a variety of municipal services. However, a number of municipalities were unable to obtain the necessary funding to carry out project civil works as the macroeconomic situation deteriorated in Venezuela during the latter years of implementation and required financial assistance from FONTUR. Due to the lack of local funding resources, not all urban transport agencies have adequate staff and equipment for the regular provision of urban transport services. This limited availability of financial and technical resources has affected the maintenance of some completed project works, which could affect the sustainability in the medium-term. 6.2 Transition arrangement to regular operations: A strong level of institutional capacity, technical resources, and relatively stable budgetary resources supports FONTUR's ability to complete the transition to regular operations in the absence of another Bank intervention. FONTUR has embarked on an initiative to increase the coverage of the PNTU program and is revising the eligibility criteria to include municipalities with less than 100,000 inhabitants. In this manner, fast-growing cities with expanding urban transport needs can benefit from the program. At present, FONTUR is reviewing the possibility of adding 26 municipalities into the PNTU program. FONTUR appears to have the technical and institutional capacity in place to expand this program. 7. Bank and Borrower Performance Bank 7.1 Lending: Bank performance during lending is rated as, satisfactorv. The project responded to the GoV's request to support decentralization and improve urban services. Project preparation began in 1991 under the Pre-Investment and Institutional Development Loan (3225-VE), which financed sector studies. The Staff Appraisal Report (SAR) for the project prepared in 1993 was comprehensive, as it covered numerous sector issues and key issues related to project design and implementation. In particular, project design placed top priority on the strengthening of sector institutions, which was critical to achieving physical improvements. The selection of pilot cities focused on medium-sized cities. This decision helped to avoid the implementation difficulties associated with the mancomunidades, which beleaguered a parallel IDB operation in Venezuela. Project structure was also flexible enough to accommodate an additional 7 eligible municipalities. The SAR included a suitable and very detailed action plan for the implementation of project civil works in the five pilot cities, and most of the anticipated project works were carried out by project end. While some of the proposed project activities, particularly the Caracas and the traffic police subcomponents ended up being less relevant than anticipated, the need to carry out deferred maintenance proved to be more important, in hindsight. Although the SAR correctly identified the risks associated with having the newly-created FONTUR implement the project and delineated the need for technical assistance to mitigate these risks, it could not have foreseen the delays in effectiveness and implementation caused by political instability. Nevertheless, the initial size and scope of the project may have been large for FONTUJR's capabilities at the time. The cancellation of US$20 million in 1997 was the proper corrective step. The SAR also properly identified the risk of counterpart funding at the municipal level, but failed to fully anticipate similar difficulties at the national level. In the early part of the project, political changes related to the presidential impeachment led to a period of budget problems that lasted over a year. Later difficulties - 15- were related to the legal framework under the Ley Paraguas that restricted the availability of external funds, changes in government administration, and the severe macroeconomic difficulties in Venezuela. 7.2 Supervision: Bank supervision is rated as satisfactory. Bank oversight and supervision was adequate with regular visits to Venezuela. In addition, a number of "reverse missions" were also conducted, which focused on general implementation and financing issues and allowed for increased supervision of local work sites during in-country missions. The Bank supervision team did a very good job overall of focusing project implementation on the primary objective of strengthening of sector institutions, resolving difficult implementation issues, responding to continually evolving political and macroeconomic conditions in Venezuela, and maintaining a dialogue with the Borrower. The project mid-term review took place in mid-1997. The mid-termn review was effective in pushing forward the following actions: (i) defined the general framework for reorganizing FONTUR to improve the implementation and supervision of project works; (ii) established indicators to evaluate progress regarding the implementation of the institutional development component; (iii) reduced the total size of the loan by US$20.0 million to better match the project to the absorptive capacity of the country. The Bank also insisted that FONTUR designate a separate coordinator for the project in 1997 to improve internal coordination and the channeling of project funds. Previously, this managerial function was placed within the Financing Unit within FONTUR, which limited internal coordination. The amendments to the loan around the time of the mid-term review created a more flexible project framework for FONTUR and the participating municipalities. At the Bank's recommnendation, FONTUR set up a "monitoring committee" to address weakness that the implementing had in monitoring and overseeing by the project for the execution of works and studies. These actions helped to accelerate implementation, especially during 1998-2000. Later changes to the project involved the reallocation of roughly US$9.9 million from the traffic police component to support road maintenance activities and institutional strengthening activities. To reduce delays in the implementation of civil works subprojects, the Bank suggested the use of umbrella contracts for engineering design, which were divided into three geographic regions (Central Western, Western and Eastem). This approach helped to streamline procurement and lowered transaction costs by reducing the amount of the contracts tendered. In varying degrees, this approach also assisted in supporting the transfer of technology to the municipalities. During implementation, the Bank largely stayed away from the requiring implementation of civil works through mancomunidades, as there were 2 mancomunidad arrangements under the Bank projects in Barquisimeto and the Isla Margarita. The latter involved 3 municipalities and demonstrated the least amount of institutional development. 7.3 Overall Bank performance. Bank performance is rated as being satisfactorv overall. Borrower 7.4 Preparation: Borrower performnance during preparation is rated as satisfactory overall. This rating takes into account the fact that the Borrower was simultaneously commencing a large investment program with the Bank after many years of inactivity as well as supporting the decentralization of infrastructure services to the states and cities. In general terms, the Borrower adequately identified its investment needs and institutional weaknesses in the sector within the decentrlization agenda. It should be noted, however, that the Borrower overestimated its own absorptive capacity. The total size of the original loan, US$100.0 million, probably exceeded the ability of the newly created agencies at the national and local level to use these funds within the original implementation time frame. - 16 - 7.5 Government implementation performance: The overall performance of the government is rated as marginally satisfactorv. Delays in loan signing and effectiveness and later difficulties in the approval of counterpart and external funds in a timely manner had a strong negative impact on early project performance, resulted in implementation delays, and put the project "at risk." The enactment of the National Procurement Law (Ley Licitaciones) without initial consideration of the procurement guidelines of multilateral institutions not only slowed the project implementation, but also led to a deterioration of the Bank's dialogue with the GOV. These problems were later resolved, but the resulting delays had a negative impact on implementation. 7.6 Implementing Agency: The performance of FONTUR is rated as satisfactory. The project constituted the first Bank lending operation in the urban transport in Venezuela. FONTUR experienced several institutional growing pains stemming from the lack of qualified staff and had numerous difficulties with Bank procurement and disbursement practices. The project was also undertaken in the context of the implementation of the decentralization agenda, which suffered from numerous fits and starts. Given this initial starting point, FONTUR did a commendable job in project implementation. Key factors supporting this rating include: (i) satisfactory implementation of the technical assistance program that supported the institutional development of FONTUR and of the participating municipalities; and (ii) the implementation of 135 civil works subprojects in the 12 municipalities. It should be noted that FONTUR experienced delays in submitting its annual audit reports to the Bank. Nevertheless, FONTUR was a competent implementation agency despite the poor working environment difficulties associated with getting budgets approved and the passage of the procurement law that did not accommodate the multilateral Bank's guidelines. 7.7 Overall Borrower performance: Borrower performance is rated as satisfactory, overall. This rating balances the strong performance demonstrated by FONTUR with the unsatisfactory rating of the Government. In particular, the Government created several obstacles that hindered implementation, instead of creating an enabling environment for resolving these issues 8. Lessons Learned Better aligning investment operations with the national legal and regulatory Improved linkage of multilateral interventions with the legal and regulatory structure in place in Venezuela to avoid potential timing and implementation mismatches. In particular, this would have to be done regarding the allocation of budgetary resources for the implementing agency and counterpart funds. The allocation of government resources should be approved every two or three years to be consistent with multi-year investment plans and provide better continuity in planning. There were additional timing mismatches between project implementation and municipal election cycles. To the extent possible, future interventions should examine various approaches to limit the extent that the provision of infrastructure services, including the urban transport, are impacted by political influences and election cycles. After each successive election, there was a dramatic turnover of managerial and technical staff, which not only slowed implementation but required additional provision of technical assistance to municipalities so that new staff could get up to speed. -17 - Developing adequate capacity and improving coordination to minimize the learning curve in implementing paraflel institutional strengthening programs at the national and local levels The management of a multi-year decentralization project requires strong government commitment to decentralization, adequate resources so that the implementing agency has sufficient capacity and credibility to oversee the technical assistance and investment programs, and effective coordination among sector agencies. During initial stages of project execution, FONTUR lacked sufficient administrative and managerial capacity to provide technical assistance to municipal governments, which had even less expertise and fewer financial resources. This situation was exacerbated by the insufficient number of specialists within FONTUR staff that could work directly with the ATI consultants. The elaboration of staff targets by the Bank helped to ensure than an adequate number of specialists were eventually brought on board. Once FONTUR achieved a sufficient critical mass intemally, it was able to improve the coordination of the ATI program as well as better target, intensify, and improve the delivery of technical assistance activities. FONTUR also carried out the following activities: (i) strengthened the management and oversight within municipalities in the implementation of project works; (ii) prepared technical manuals; and (iii) disseminated technical knowledge. Despite turnover at technical and managerial staff during the later stages of the project, FONTUR had developed adequate internal capacity by that point to continue the implementation of the technical assistance program at nearly comparable levels. Knowledge management and sharing mechanisms could have been developed and institutionalized ex-ante to potentially reduce some of the early growing pains that initially slowed project implementation. Nevertheless, the technical assistance and investment programs became de facto coordination mechanisms between FONTUR and the municipalities. This was later formalized through the 1998 reorganization of FONTUR, which led to the development of an organizational structure that was better aligned for local capacity building activities, improved coordination with municipal governments, and improved supervision and oversight of project works. As a result, coordination with the participating municipalities remains relatively strong at project end. The introduction of better information systems financed by the project also facilitated knowledge management and led to the development of improved sharing mechanisms with the participating municipalities. It is important to ensure adequate distribution of project resources An important lesson in interventions designed to facilitate decentralization is sometimes there is an unequal distribution of financial resources in favor of local government agencies that are either: (i) early entrants to the program; and/or (ii) municipalities that demonstrate the necessary institutional and managerial capacity at an early stage to manage and carry out investment subprojects. Case in point, Maracaibo and Barquisimeto formed urban transport units back in the 1 980s prior to tne enactment of the Municipal Law (LORM), and were among the first project participants. These municipalities received a significant percentage of project resources. Although supporting local entities with strongest institutional capacity provides immediate and often the most favorable results, there are fewer resources for the local governments that need the most assistance. This approach can be biased against municipalities that have early implementation difficulties and can exclude fast-growing municipalities with growing urban transport needs and attention must be paid to creating the right incentives for non-established municipalities to be eligible. -18 - Developing adequate implementation mechanisms for multi-municipal projects The PNTU program demonstrated much greater success in cities in which urban transport subprojects could be managed by a single municipal entity. A single entity makes it easier to forecast traffic volume, implement civil works that improve traffic flow throughout the entire length of the street corridor, examine and mitigate the peripheral impact on adjoining streets, and establish urban transit systems with the widest possible reach. This model, however, is more difficult to employ for street corridors that traverse multiple municipal districts with varying degrees of institutional capacity and financial resources. To get around political distinctions and uneven growth that have led to the development of multi-jurisdictional urban transport corridors, the PNTU supported the establishment of mancomunidades. The mancomunidades were intended to operate as semi-autonomous entities to oversee the development and implementation of urban tamnsport works across more than one municipality. In practice, these entities proved to be extremely unwieldy, as political infighting often delayed the selection and implementation of project works. Additional difficulties ensued after local elections, in which turnover ended or slowed coordination. In extreme cases, neighboring municipalities were led by governments from opposing political parties and agendas, which caused gridlock in the selection and implementation of civil works projects covered under the PNTU program. Moreover, works selection tended to be linked to political affiliations and financial resources of a single municipality rather than determined through a coordinated and consultative process. In a few extreme cases, civil works subprojects were begun in one municipality, but were not planned or carried out in another. In the situations in which multi-jurisdictional entities were successful in planning and implementing civil works projects, there was a higher degree of coordination and less politicization in works selection. Although it may be unavoidable to involve multi-jurisdictional entities, future interventions should ensure that these entities are formally established and have suitable coordination mechanisms prior to inclusion in the larger program. Moreover, fostering the participation of user's associations may be a way of forcing vested interests into developing effective mancomunidades. Establishing a balance between a predefined investment framework and local project selection As in most decentralization projects, it is difficult to find the right balance between a rigid determination of investment programs and allowing local governments to select projects based on an assessment of its respective investment needs. On one hand, local governments, especially when the project was appraised, lacked sufficient institutional and technical capacity as well as a reliable road and urban transport inventory to adequately prepare their respective investment programs. Conversely allowing municipalities greater flexibility in selecting and prioritizing their investment needs creates stronger ownership of project activities and increases institutional capacity. The participation of local communities in the preparation of transport investment plans might also be sought in the future. - 19 - 9. Partner Comments (a) Borrower/implementing agency: Evaluaci6n del Objetivo de Desarrollo del Proyecto y de Ia Calidad al Inicio Objetivos Iniciales A comienzos de 1990, como parte de una reforma econ6mica general, el Gobiemo Nacional de Venezuela comenz6 a revisar sus politicas en transporte urbano, estableciendo a un grupo rector en julio de ese mismo aiio bajo la denominaci6n de Consejo Venezolano de Transporte (CVT). Su misi6n fue la de definir los objetivos y prioridades del sector, revisar su marco institucional y regulatorio y hacer recomendaciones de reforma, evaluar politicas sectoriales y formular estrategias a corto y mediano plazo con la asistencia de agencias internacionales. Es asi como a finales del aino 1991 el Consejo Nacional de Transporte define una nueva Politica Nacional de Transporte orientada a la reforma estructural del sistema, el mejoramiento gradual y pernanente de los servicios y de la operaci6n de la infraestructura vial en general. La Politica de Transporte Urbano propuso garantizar un sistema de transporte eficiente y de buena calidad, en crecimiento y diversificaci6n continua y a un costo que generara los mayores beneficios a los usuarios y los operadores. Para ello se plantearon cuatro estrategias o lineamientos sobre los cuales se fundamenta la instrumentaci6n de planes de acci6n: * La Municipalizaci6n del Transporte Urbano: Este lineamiento plantea el fortalecimiento de las capacidades de los municipios para asumir la planificaci6n, la direcci6n, organizaci6n supervisi6n, mantenimiento y control del transporte urbano dentro del imbito jurisdiccional. * La asistencia financiera del Estado: Este lineamiento tiene como objetivo la instrumentaci6n de politicas de financiamiento integrales y dinamicas, para la adquisici6n de unidades de transporte pulblico. Complementariamente la politica tarifaria del transporte puiblico se fundamentara en criterios de equilibrio financiero de los operadores, sobre la base de los costos reales de operaci6n. * La creaci6n de infraestructura de apoyo al transporte urbano: El objetivo de esta estrategia es el de desarrollar mecanismos de apoyo que permitan instrumentar, a traves de las Alcaldias, mejoras tecnicas para incrementar y mejorar la movilizaci6n de personas y hacer mas fluido el trinsito vehicular en las ciudades, con enfasis en el trinsito de vehiculos de transporte putblico. Igualmente se tomarAn las medidas necesarias para garantizar el estricto cumplimiento de la legislaci6n de transito. * Modernizaci6n del Transporte Urbano: Se propiciati la creaci6n de organizaciones s6lidas de transporte publico, integrados en un sistema local. Esto se haru a traves de los Municipios, que propiciarin la conformaci6n de entes operadores con pricticas tecnicas, administrativas y operativas adecuadas, a traves de la modernizaci6n del sistema de otorgamiento de concesiones. La instrumentaci6n de estos lineamientos dio paso al desarrollo de tres importantes programas que representan la base sobre la que se sustenta el Programa Nacional de Transporte Urbano, cuyo horizonte de aplicaci6n establece acciones a corto, mediano y largo plazo. Este Programa Nacional de Transporte se apoya en un documento elaborado por el personal tecnico del Banco Interamericano de Reconstrucci6n y Fomento (BIRF) que contiene un diagn6stico de las condiciones y caracteristicas del sector del transporte y trinsito urbano en diferentes zonas de Venezuela. Dicho documento, conocido como Proyecto de Transporte Urbano (Septiembre, 1993), tenia como Objetivo Principal melorar v fortalecer a las instituciones nacionales v locales que se dedican a la planificaci6n_ financiamiento. diseiio v operaci6n de sistemas de Transporte Urbano. Adicionalmente este proyecto ayudaria a i) aumentar la eficiencia de las operaciones de tr-ansito y transporte; ii) preservar la infraestructura de transporte urbano a traves de un mejor mantenimiento. Bajo estas premisas, el Programa Nacional de Transporte Urbano busca mejorar el trinsito y transporte pufblico urbano, a fin de contribuir a elevar la calidad de vida de la poblaci6n urbana, especialmente de los grupos de bajos recursos econ6micos. Debido a la necesidad de contar con un ente encargado de llevar adelante este programa, en el afio 1991 se crea y designa a la Fundaci6n Fondo Nacional de Transporte Urbano, FONTUR, como el organismo -20 - responsable de la implantaci6n de este. Objetivos Revisados El prop6sito general y los objetivos del proyecto se mantuvieron a lo largo de la ejecuci6n del mismo. Sin embargo, en el afio 1997 se redujo el monto original del Prestamo, pasando de 100 millones de US$ a 80 millones. En el afno 2000 se detect6 la necesidad de definir una nueva Politica Nacional de Transporte Urbano, para darle continuidad al PNTU, dado los procesos de cambio vividos y resultados obtenidos en el marco de su misma ejecuci6n, aunado a los profundos cambios institucionales que se iniciaron en el pais en el anio 1998, teniendo como premisas el complementar el proceso de descentralizaci6n. En tales circunstancias se procedi6 es la revisi6n de las politicas nacionales vigentes, reformulandolas de manera de potenciar los exitos alcanzados, rectificar en aquellos objetivos que no pudieron ser logrados y atender los actuales problemas del sector, al tiempo de ajustarla a la organizaci6n y funcionamiento del estado definidos en la nueva constituci6n de la Repuiblica Bolivariana de Venezuela (1999). Componentes Originales El Proyecto tuvo dos Subprogramas: Fortalecimiento Institucional y Mejoras Fisicas a la Infraestructura. Subvrourama Fortalecimiento Institucional El subprograma Fortalecimiento Institucional tiene como objetivo fortalecer la capacidad gerencial y tecnica de los organismos municipales, de FONTUR y otros organismos y dependencias del Gobiemo Nacional relacionados con el sector. Originalmente se tenia previsto un 17% del costo del Proyecto. Comprende: 4 Asistencia Tecnica: A traves de consultores nacionales e intemacionales de apoyo a FONTUR y a las oficinas locales de transporte para la preparaci6n y revisi6n de los proyectos. 4 Capacitaci6n: Cursos tecnicos a nivel de post-grado para profesionales del sector; cursos a operadores de transporte; entrenamiento continuo en materias de mantenimiento vial, semiforos, gerencia y planificaci6n del transporte. 4 Equipamiento: Adquisici6n de equipos de apoyo para la gesti6n y administraci6n del trinsito. 4 Vigilancia de Transito: Entrenamiento al cuerpo de vigilantes de transito, equipos de comunicaci6n, vehiculos y mejoras de las practicas operativas. 4 Contrataci6n de Estudios: Para la preparaci6n de proyectos en las areas de administraci6n de transito, mantenimiento vial, transporte putblico y desarrollo institucional. Subprograma de Meioras a la lnfraestructura El subprograma Mejoras a la Infraestructura tiene como objetivo incrementar la eficiencia y la calidad del sistema de transito, reduciendo los costos de operaci6n de los vehiculos y aumentando la eficiencia y el desempefio del transporte publico, mediante la aplicaci6n de medidas de administraci6n del transito, operativas y de vigilancia, dirigidas al uso mas efectivo y eficiente de la red vial existente y sus instalaciones conexas. Originalmente se tenia previsto un 85% del costo del Proyecto. Las mejoras son: 4 A la Infraestructura: Construcci6n de vias o tramos, viaductos, puentes, aceras, pasarelas, calles y paseos peatonales. 4 Calidad de la Vialidad: Repavimentaci6n; sefializaci6n y demarcaci6n; ajustes de alineaci6n; modificaci6n de secciones transversales; iluminaci6n y drenaje. 4 Capacidad Vial: Ensanche de vias y canalizaci6n de flujos en cruces. + Semaforizaci6n: Coordinaci6n de semaforos (onda verde, por area, aislado simple y actuados). + Medidas Pnioritarias al Transporte Colectivo: Canales exclusivos, en contrasentido y vias exclusivas. 4 Infraestructura al Transporte Colectivo: Terminales, refugios y paradas de transporte publico. 4 Sefializaci6n e informaci6n: Senializaci6n al Sistema de Transporte Publico e informaci6n al usuario. Calidad al Inicio del Proyecto Se deben mencionar las variables tomadas en consideraci6n para su valoraci6n, consideradas para la fecha: a) una franja importante de beneficiarios del Proyecto serian los estratos pobres de la poblaci6n urbana del pais; - 21 - b) el Proyecto se gest6 a partir de la definici6n, a fines de 1991, de la Politica Nacional de Transporte Urbano; c) simultAneamente se habia creado FONTUR, una agencia puiblica dedicada a promover, financiar y ejecutar proyectos y obras de TU, dar asistencia tecnica a las agencias locales promoviendo su fortalecimiento institucional en lo relativo al TU; e implantar tecnicas y metodologias para racionalizar la inversi6n en TU. d) Se incorpora al proyecto propuesto la experiencia obtenida y las lecciones aprendidas de proyectos de transporte urbano asistidos por el Banco Mundial en otros paises. Logro de los objetivos y metas Resultado y logro de los objetivos La Unidad Ejecutora considera que el proyecto PNTU ha sido Muy Satisfactorio, ya que se ha apreciado un fuerte avance en el tratamiento local y nacional de la gesti6n del transporte urbano, a pesar de las condiciones iniciales del proyecto y los diversos factores que a lo largo de su ejecuci6n influyeron, en mayor o menor grado, sobre los resultados obtenidos. Es importante mencionar que ha finales del Proyecto, la Unidad Ejecutora contrat6 una empresa para realizar el Estudio "Indicadores del PNTU", cuyo objetivo principal fue recolectar informaci6n y datos del Programa para evaluar los beneficios alcanzados en materia de Fortalecimiento Institucional y de Mejoras Fisicas a la Infraestructura (a partir de una muestra del total de obras ejecutadas), a fin de formular indicadores que conformen una base para la evaluaci6n constante de los proyectos implantados. Se considera al proyecto complejo por la amplitud de sus objetivos y el numero de ciudades beneficiadas, por lo cual el logro de los objetivos se evidencian en mayor o menor grado en las ciudades beneficiadas. Se realiz6 una revisi6n exhaustiva de toda la documentaci6n existente referida a la formulaci6n y ejecuci6n del proyecto, sin embargo en algunos casos fue imposible obtener la informaci6n lo que no permiti6 disponer de conclusiones validas sobre algunos temas. El objetivo primario del Proyecto, "mejorar y fortalecer las instituciones nacionales y locales competentes en el planeamiento, financiamiento, disenio y operaci6n de sistemas de transporte urbano" fue conseguido satisfactoriamente, aunque no en forna homogenea. En el nivel nacional FONTUR, entidad creada en 1991 para promover y financiar proyectos de transporte urbano, se consolid6 como ente ejecutor de la Politica Nacional de Transporte Urbano, administrando eficazmente los lineamientos que esta defini6. Este logro FONTUR lo alcanza en un contexto politico e institucional complejo e inestable que, sin embargo, no cambi6 la orientaci6n de la Politica de Transporte Urbano; y la existencia y eficacia de FONTUR fueron una valiosa contribuci6n en mantener los objetivos originales. FONTUR tuvo un gran exito en la form aci6n profesional en transporte urbano y, parcialmente, en el de realizaci6n de los estudios de politica de TU. En cambio, la parte del Programa relativa a la vigilancia del transito tuvo un desarrollo menos satisfactorio en el nivel nacional, porque FONTUR y SETRA no consiguieron establecer una fluida colaboraci6n en todo lo relativo al mejoramiento de la ESCUVIAL. En el nivel municipal el fortalecimiento institucional tuvo una excelente ejecuci6n, donde se implantaron o consolidaron las dependencias tecnicas dedicadas a la gesti6n del trinsito y transporte puiblico urbanos y al mantenimiento de la infraestructura. Se incorpor6 personal formado en la disciplina del transporte urbano, fueron dotadas de mobiliario y equipamiento informAtico y se otorg6 asistencia tecnica intemacional y nacional. El programa de infraestructura abarc6 11 ciudades (15 municipios) con aproximadamente 490,79 km de vias intervenidas. Las actuaciones han atendido mayoritariamente a las propuestas desarrolladas en los estudios financiados por FONTUR y aquellas propuestas de los munciipios para atender problemas puntuales de transito y/o mantenimiento sobre sus ejes viales principales. -22 - Hacia el final del proyecto, una nueva politica de transporte urbano qued6 definida, sustentada en los estudios realizados dentro del Programa y tomando en cuenta los carnbios institucionales, los exitos alcanzados por la Politica de 1991 y los aspectos en los que los objetivos de 6sta no se consiguieron. Los lineamientos propuestos hacen enfasis en aspectos diferentes y relevantes de acuerdo a las necesidades actuales. En este sentido se propone la organizaci6n de los poderes puiblicos para el apoyo a la municipalizaci6n, la asistencia financiera al sector de distintos origenes, no solo del estado; aumento de la calidad del transporte urbano que, aun cuando esto estuvo implicito en los lineamientos del 91 se propone destacarlo, reforzarlo e iniciar acciones concretas para su logro. Se considera tambien reforzar el elemento de la capacitaci6n a todo nivel gubemamental, y del sector privado es decir los operadores, como elemento que garantice el mejoramiento del sector. La propuesta fue desarrollada a nivel de lineamientos estrategicos, objetivos asociados a cada lineamiento, y a su vez acciones asociadas a cada objetivo con sus metas. Todo ello para llegar a un nivel detallado de la Politica. A diferencia de la politica del 91, a traves de esta metodologia, se podran medir su grado de alcance al evaluar la situaci6n de eada uno de los programas contra sus metas establecidas, y de esta manera medir el impacto de la nueva politica en el desarrollo del sector. Resultados por componentes Se examinan a continuaci6n con mayor detalle los resultados de los componentes del Programa. Subprograma A, Fortalecimiento Institucional Asistencia Tecnica Internacional Durante el periodo en el cual se mantuvo contratada la ATI se pudo evidenciar el significativo aporte dejado por esta en materia de conocimientos de Transporte, Infraestructura Vial e Ingenieria de Transito, incluso Fortalecimiento Institucional, a los profesionales de FONTUR y a los representantes de los Municipios que firmaron convenio con la Fundaci6n. Se observaron avances en cuanto a la creaci6n de unidades locales de Transporte lo cual se convirti6 en una exigencia indispensable para fortalecer a los municipios con acciones id6neas y para ejecutar las recomendadas por la misma Asistencia. El Asesoramiento en obras de envergadura para las principales ciudades de Venezuela ha sido otro de los aspectos que merece especial menci6n entre los logros derivados de la aplicaci6n de este subcomponente. La presencia continua de loa Asesores Tecnicos Intemacionales en los Municipios incorporados al programa, ha permitido la transferencia de conocimiento de primera linea hacia las unidades locales, facilitando la consolidaci6n de estas reparandolas para enfrentar los problemas propios de la gesti6n de trinsito y transporte en sus comunidades. Es necesario enfatizar que la ATI ha dejado huella tambien con los distintos talleres e inducciones que en todas las areas del transporte fueron dictados y con la elaboraci6n de manuales y lineamientos que se encuentran actualmente en uso. A pesar de todo lo antes seflalado es importante destacar que la Asistencia Tecnica Intemacional podria haber sido aprovechada en mayor grado, pero la alta rotaci6n de personal en los municipios y en algunos casos en FONTUR, no ha permitido avanzar en el proceso de transferencia situaci6n esta que hubiese sido deseable para esta Fundaci6n. Asistencia Tecnica Nacional La Asistencia Tecnica Nacional es el subcomponente de Fortalecimiento Institucional que conjuntamente con el Curso Intensivo ha evidenciado mayor continuidad a lo largo de la ejecuci6n del Proyecto, y en cierta medida, el que menor rotaci6n de su personal ha tenido, lo cual constituyen una fuente importante de informaci6n hist6rica para el Programa. De acuerdo a la programaci6n originalmente prevista se ha ejecutado un poco mas de la mitad de los meses - profesional previstos en aquel momento. -23 - Cabe senialar que la programaci6n original de costos preveia un monto promedio de US$ 2.000 mensuales por profesional, sin embargo, debido al proceso de devaluaci6n que sufri6 la moneda venezolana con respecto a la divisa norteamericana en los afios de ejecuci6n del prestamo, estos recursos han tenido anualmente economias significativas. Al comparar el estimado del ejecutado de cerca de US$ 924 mil hasta el afio 2000, con lo originalmente valorado de aproximadamente US$ 2,6 millones, se obtiene que la asistencia nacional fue cubierta hasta ese anio con apenas 36% de los recursos. (No se pudo identificar con precisi6n los recursos aplicados por persona y ciudad, y la cifra se desprende del estimado calculado por la Gerencia de Planificaci6n de FONTUR en Bolivares por afio para el subcomponente). Entre los aspectos mas notables observados en la operatividad de la asistencia tecnica se encuentra el hecho que las ciudades con mayor pernanencia de asistencia tecnica han logrado constituir los equipos mas s6lidos y con continuidad de sus profesionales en la gesti6n local del transporte al tiempo que han realizado un seguimiento mas continuo el proyectos y obras. Asimismo, estos profesionales se han constituido en los principales colaboradores en la planificaci6n de requerimientos de equipamiento de las unidades de gesti6n local ante FONTUR y los entes multilaterales, estableciendose una mejor comunicaci6n y conexi6n con el personal encargado de FONTUR de tramitar las dotaciones. Capacitacidn Capacitaci6n a Operadores de Transporte Publico Este subcomponente se ha venido ejecutando sin interrupci6n alguna desde 1993.Se han capacitado un total de 7715 conductores, de los cuales casi el 100% pertenecen al plan local de los Municipios. El Programa fue reducido de 48 horas a 32 horas debido a la alta deserci6n que estaban presentando los cursos en cuanto la asistencia de los conductores. Es bueno acotar que a traves de estos cursos se ha logrado capacitar paralelamente un numnero importante de facilitadores que se han convertido en multiplicadores, lo que se ha constituido en un importante canal de transferencia de conocimiento hacia los Municipios. Capacitaci6n de Profesionales y Tecnicos El Programa de Capacitaci6n de Profesionales y Tecnicos, ha venido desarrollandose desde 1993 de manera ininterrumpida, formando practicamente a la mayoria de los profesionales asociados al transporte municipal en Venezuela. En esta materia se han desarrollado 9 Cursos Intensivos de Transporte Urbano. Estos ofrecieron una formaci6n integral y general sobre el transporte como hecho econ6mico y social, asi como el suministro de herramientas y tecnicas de ingenieria para la planificaci6n y soluci6n de problemas de trinsito. Su caracter de intensivo lo da el tiempo de dedicaci6n exclusiva y la dinamica de capacitaci6n establecida. Desde 1995 hasta la fecha se han formado en promedio 28 profesionales en cada curso intensivo, para un gran total de 255 egresados, en ocho ainos de aplicaci6n de este evento de formaci6n. La cifra de 28 profesionales por afio que aprueban un curso de capacitaci6n de 800 horas, es una cifra importante que certifica el logro del objetivo de especializaci6n que buscaba el Curso Intensivo. Tal objetivo dificilmente puede ser alcanzado en el mismo tiempo a traves de la formaci6n tradicional de cuarto nivel que ofrecen las universidades. Por otra parte, se ha atendido a los Municipios y a FONTUR en el desarrollo de Cursos Tecnicos, que ofrecen un entrenamiento a corto plazo en las diferentes areas del transporte urbano y van dirigidos a profesionales del sector transporte. Desarrollando la capacidad para disefiar, acometer e implantar mejoras efectivas en el sistema local de transporte urbano. Estudios de Postgrado: Se ha apoyado financieramente una plantilla significativa de profesionales de FONTUR y de los Municipios en los distintos post-grados que ofrecen las Universidades Nacionales en el irea de transporte. Estudios en el exterior, para profesionales del sector y t&enicos de FONTUR. Por otra parte, se han fomentado Giras Tecnicas al exterior para aprovechar las experiencias de otros paises en esta materia y transferir conocimientos y experiencias en profesionales y gerentes del transporte del pais. -24 - Programa de Mejoras a la Policia de Transito Mejoras en la operatividad de las policias de circulaci6n de los municipios atendidos en el marco del PNTU. Es evidente, que despues de haber entrado en operaci6n las policias de circulaci6n de los municipios, el nivel de criticidad de las zonas urbanas afectadas por congesti6n y accidentes de transito disminuy6 considerablemente, siendo importante destacar que la presencia de los funcionarios en las calles motiv6 el cumplimiento y el respeto a las normas de circulaci6n por parte de los conductores, en especial los de transporte publico. El efecto de autoridad, identificado en la conducta respetuosa pero inflexible de los funcionarios al exigir el cumplimiento de la Ley y su Reglamento, ha impactado favorablemente desde sus inicios a la poblaci6n de los municipios atendidos por el programa. Otra muestra de los beneficios obtenidos con la implantaci6n de las organizaciones municipales de circulaci6n, esta relacionado con el tiempo de respuesta en caso de ocurrencia de accidentes de transito en las areas urbanas. El promedio de espera que se encontraba alrededor de tres horas, mejor6 sustancialmente en aquellas ciudades donde han sido ejecutadas las dotaciones previstas de vehiculos para patrullaje (motocicletas policiales y autopatrullas), equipos de comunicaciones y redes de informatica. Estudios de Politica de Transporte Urbano Dando cumplimiento a las condicones establecidas en el SAR Fontur ejecut6 los siguientes estudios: Reorganizaci6n de FONTUR, revisi6n de la Ley de Transito, revisi6n de la Politica en Transporte Urbano, Sistema de Informaci6n en Transporte Urbano y ciudad piloto para su implantaci6n e indicadores del PNTU. Actualmente, esta por iniciar el Estudio Integral del Area Metropolitana de Caracas Actividades de Preparaci6n de Proyectos Los estudios de preparaci6n de proyectos tuvieron lugar en nueve de las once ciudades beneficiadas por el Prestamo. Se trat6 de estudios integrales de transporte urbano (EITU) en Ciudad Guayana, Cumana y Margarita; estudios de transporte piiblico (ETP) en Barquisimeto, Maracaibo y Merida; y estudios operacionales e institucionales (EIO) en Barinas, Coro y Punto Fijo. S6lo Maturin y Ciudad Bolivar no contaron con esta actividad. A la fecha, FONTUR evaluia el plan de inversi6n de los municipios participantes tomando como base las propuestas de estos estudios. Subprograma B, Mejoras Fisicas a la Infraestructura Al inicio, este Subprograma present6 un bajo rendimiento debido, principalmente, a la falta de un banco de proyectos ajustado a los requerimientos tecnicos minimos previstos en fase inicial y al proceso de adaptaci6n requerido para la puesta en prictica de los procedimientos exigidos por el BIRF en lo referente a tramites administrativos, procesos de procura, trimites financieros y coordinaciones interinstitucionales. Esta situaci6n fue superada en forma progresiva a medida que los Municipios y FONTUR fueron adquiriendo capacidad tecnica y experiencia en el manejo del proyecto. El desarrollo del Subprograma de Inversiones en Infraestructura demostr6 fortalezas en lo relacionado a la adaptaci6n de los Municipios Participantes al proceso de ejecuci6n de obras bajo un concepto de calidad y apego a los procedimientos establecidos en los pliegos de Licitaci6n, principalmente a partir del afio 1999, momento en el cual se evidencia un pronunciado incremento en el numero de intervenciones realizadas en los Municipios participantes. Estas intervenciones se efectuaron sobre la base de los estudios integrales desarrollados para cada ciudad a traves del programa de Fortalecimiento Institucional, lo que evidencia la interrelaci6n entre ambos programas. Adicionalmente las Alcaldias cuentan en la actualidad con personal capacitado por el programa de Fortalecimiento Institucional, los cuales son los responsables de la ejecuci6n de las obras financiadas por FONTUR y sirven de enlace entre sus Municipios y la gerencia responsable de la ejecuci6n del Programa de Inversiones en Infraestructura. - 25 - Es importante destacar que en a actualidad existen Municipios que tienen la capacidad financiera para la contrataci6n de proyectos de gran magnitud y que, adicionalmente, cuentan con personal tecnico capacitado egresado de los cursos intensivos para la revisi6n de los mismos, lo que ha pernitido una mayor fluidez para la ejecuci6n de las obras y una mayor participaci6n de los Municipios en la fase preliminar de las obras. Valor Presente Neto / Tasa de Retorno Econifmica En el momento de formulaci6n del proyecto se establecieron 5 ciudades pilotos, a saber: Barquisimeto, Maracaibo, Ciudad Guayana, Maturin y Merida. Para cada una de ellas se plantearon una serie de proyectos de infraestructura, esencialmente corredores de transporte puiblico y programas de pavimentaci6n y mantenimiento, sobre los cuales se realiz6 una evaluaci6n socio-econ6mica a objeto de estimar los beneficios obtenidos al ser objeto de intervenciones fisicas. En ese momento se analizaron las relaciones beneficio/costo, valor presente neto y la tasa intema de retomo, comparando valores por reducci6n de costos operacionales y valores por reducci6n de tiempos de viaje mas costos operacionales. En el Anexo 11 del SAR se aprecia en detalle los proyectos evaluados. Para el momento de la formulaci6n del Proyecto se estim6 una Tasa Interna de Retomo del 32%, llegando a 79% si se incluian los beneficios por ahorros en tiempos de viaje. Durante la fase de cierre del proyecto, con la contrataci6n referida al Estudio "Indicadores del PNTU" se realiz6 una evaluaci6n socioecon6mica de proyectos implantados en los municipios participantes, tomando una muestra de nueve (9) proyectos, se compar6 la situaci6n antes de implantar el proyecto (ex - antes) y despues de implantado (ex - post) a objeto de evaluar los beneficios obtenidos y compararlos con las estimaciones realizadas al inicio. La evaluaci6n de los proyectos seleccionados arroj6 una TIR ex antes de aproximadamente del 14% sin considerar los beneficios por reducci6n de costos por ahorros en tiempos de viajes y de aproximadamente de 38% incluyendo estos. En cuanto a la evaluaci6n ex post se obtuvieron tasas intemas de retorno de aproximadamente del 12% sin considerar los beneficios por reducci6n de costos por ahorros en tiempos de viajes y de 29,5% incluyendo estos. Como se puede apreciar comparando ambas situaciones. Estos valores se consideran apropiados en las situaciones ex post dado que, aunque hubo aumentos en los costos de obra, el incremento de los volumenes de transito y las velocidades de operaci6n en las redes intervenidas (segun se constat6 en campo) fueron determinantes para mantener la proporci6n de los rendimientos inicialmente previstos. Ahora bien, al comparar estos valores obtenidos en la evaluaci6n ex post con los previamente estimados en el SAR evidenciamos que son mucho menores, sin embargo es importante acotar que los costos inicialmente estimados para las intervenciones resultaron mucho menor a los realmente invertidos en la ejecuci6n de las obras y la tipologia de los proyectos estuvo destinada a mejoras operativas en los corredores de transporte. Principales factores que afectaron la implementaci6n del proyecto Los factores que se mencionan a continuaci6n son los que se consideran de mayor impacto sobre la ejecuci6n del proyecto. Cambios de gobiemo: Durante la marcha del Proyecto tuvieron lugar en Venezuela importantes cambios politicos. En particular, las elecciones del ano 2000 produjeron el cambio de autoridades en la mayoria de las ciudades, induciendo asimismo un cambio de los elencos tecnicos. En algunas ciudades las nuevas autoridades no adoptaron las recomendaciones de los Planes de Transporte Integral, y esto hizo que FONTUR debiera a sumir tiempo en volver a presentar el programa ante las nuevas autoridades, causando su generalizado retraso. Cambio en la legislaci6n: Otra consecuencia de los cambios institucionales fue la sanci6n de una nueva Ley de Contrataci6n, aplicable a las obras publicas del pais, algunas de cuyas disposiciones resultaban no compatibles con los procedimientos estindar que aplica el Banco para las obras que financia. Esta situaci6n fue adecuadamente resuelta por el Gobiemo, al establecer para esos casos la prevalencia de las normas de licitaci6n de los organismos financieros intemacionales. -26 - Emergencia del Estado Vargas en diciembre de 1999 y otras regiones del pais: Esta situaci6n trajo como consecuencia que la Fundaci6n tuvo que destinar recursos humanos y financieros para mitigar los efectos de esta catAstrofe natural. Factores macroecon6micos: la fuerte depreciaci6n del bolivar entre los afnos 2001 y 2002 produjo en terminos generales que el saldo del prestamo fuese superior a los esperado, ya que la mayoria de los proyectos fueron financiados en bolivares. Sostenibilidad El PNTU se considera un programa de "muy probable sostenibilidad", ya que independientemente de la culminaci6n de las fuentes multilaterales de recursos para el financiamiento de las inversiones, FONTUR cuenta, para el PNTU, con recursos propios que ingresan directamente a la Fundaci6n a traves de la Resoluci6n 142 del Ministerio de Energia y Minas. Estos recursos son los que hasta la fecha se han utilizado como contrapartida local, respaldando asi el programa de inversiones para los municipios. En este sentido se considera un proyecto de Muy Probable Transici6n a operaciones normales de la Unidad Ejecutora, y es asi como a partir de julio del aiio 2001 se realiz6 una revisi6n de las inversiones a seguir apoyando con los recursos del prestamo, dado que para ese momento se tenia previsto el cierre del prestamo para el 31 de diciembre de 2001. En este sentido, se analizaron los proyectos factibles en todos los municipios y se agilizaron los procesos de licitaci6n a objeto de tener el mayor nuimero de contratados a mas tardar en octubre de 2001. Aquellas proyectos que se detectaron que no podian cumplir este requisito FONTUR los apoy6 con recursos netamente propios. Es asi como en Septiembre se comenzaron a firmar Convenios de Cooperaci6n No Reembolsables con algunos municipios del PNTU como marco institucional de apoyo a las nuevas inversiones y para dar continuidad al programa. Es importante acotar que en terminos generales, FONTUR administra a valores actuales la cantidad de aproximadamente 11,5 millones de d6lares anuales provenientes de la resoluci6n 142. Desempefio del Prestatario y del Banco El Banco Durante la ejecuci6n del proyecto se considera "satisfactorio" el desempefio del banco, ya que el seguimiento Ilevado adelante a traves de las continuas misiones de supervisi6n en las que el BIRF propiciaba el compromiso de la Fundaci6n para el cumplimiento de determinados hitos del proyecto, permiti6 que la unidad ejecutora generase un ritmo de respuesta mas fuerte que el inicialmente evidenciado, en especial entre los afios 1997 y 1999. Tambien es importante mencionar que muchas de las exigencias del banco involucraban grandes esfuerzos institucionales que no fueron exitosos en muchos casos, dado el grado de consolidaci6n de los entes municipales encargados de la gesti6n del transporte. No hay que olvidar que el proceso de descentralizaci6n hacia los municipios es "muy joven", dado que es a partir del ano 1989 cuando se establecen las bases legales mas no el soporte econ6mico para gestionar el tema transporte en los municipios. Debemos resaltar que los cambios del equipo de seguimiento del BIRF, encargado del realizar la supervisi6n del proyecto, gener6 retrasos en los procesos, ya que en muchos casos la continuidad se vio interrumpida hasta que los nuevos representantes se enteraran de los avances del proyecto y de las medidas incorporadas a objeto de dar fluidez al mismo. -27 - El Prestatario Se considera el desempefio de la Unidad Ejecutora como Altamente Satisfactoria. Una vez que fueron subsanadas las fallas iniciales del proyecto relacionadas esencialmente con la capacitaci6n del personal de FONTUR y Alcaldias e identificados y desarrollados los proyectos de inversi6n, la unidad ejecutora tuvo un alto desempefio en la ejecuci6n del prestamo, hecho que se evidencia fuertemente a partir del ado 1998. Lecciones Aprendidas A continuaci6n se describen una serie defactores que resultan relevantes de considerar en el momento de realizar una evaluaci6n del Proyecto, a saber: * El proceso de descentralizaci6n hacia los municipios se considera "muyjoven", ya que fue a partir de la decada de los 90 cuando a estos se le confieren por ley (LORM) sus competencias en materia de transporte. Este factor ocasion6 demoras en el tiempo para la definici6n y apoyo de inversiones. Cuando se inici6 el proyecto, en diciembre de 1994, la gran mayoria de las municipalidades no contaban con una oficina local de transporte las cuales se fueron creando por exigencia de los convenios. Adicionalmente, se evidencia aun que no todas las autoridades locales han internalizado que su misi6n, como gestores del desarrollo local, consiste en prestar mas y mejores servicios en sintonia con las preferencias de la ciudadania. * Los responsables locales tienden a actuar discrecionalmente en funci6n de su visi6n particular del problema, por lo cual sus actuaciones no necesariamente responden a las reales necesidades de la poblaci6n. En este sentido, la unidad ejecutora se ha visto en la necesidad de establecer mecanismos de condicionamiento que obliguen a los responsables locales a realizar actuaciones prioritarias y coordinadas dentro del sistema de transporte. * Inicialmente, la mayoria de los municipios se limitaban a atender la demanda social de urgencia y asumian como competencia bisica el transporte puiblico de pasajeros a nivel de permisos o prestaci6n con fines sociales del servicio, pero sin atender las actividades de planificaci6n y fiscalizaci6n del sistema. Actualmente, se puede constatar que las oficinas municipales del transporte han asumido, en terminos generales, todas sus competencia en materia de transporte urbano. * Tanto los Municipios como FONTUR carecian de suficiente personal t6cnico capacitado para la ejecuci6n adecuada del proyecto y de todas las actividades que este implicaba, lo que se tradujo en mayor tiempo requerido para poder iniciar la ejecuci6n del proyecto de acuerdo a lo previsto. El desconocimiento de la normativa BIRF para los procesos de licitaci6n de obras y adquisiciones gener6 procesos tardios o fallidos. En tal sentido, se ejecutaron los cursos intensivos.en transporte urbano, cursos y talleres en las areas tecnicas de mantenimiento vial, demarcaci6n, sefializaci6n, semaforizaci6n, planes de acci6n inmediata, licitaciones, etc., coordinados por la Gerencia de Desarrollo Institucional de FONTUR, los cuales influyeron en forma contundente en el desarrollo de habilidades y capacidades tecnicas en el personal, tanto de las Alcaldias como de FONTUR. A medida que se increment6 el personal tecnico capacitado en los Municipios y en la Fundaci6n, fue aumentando el nivel de aceptaci6n y de adaptaci6n a las normas y procedimientos exigidos por el proyecto, principalmente por su nivel de transparencia, equidad y visi6n integradora. * No se disponia de mecanismos de seguimiento y control continuos para poder hacer cumplir los terminos establecidos para la ejecuci6n del proyecto debido a su nivel de complejidad. * Existia poca receptividad y falta de disposici6n a los cambios requeridos por parte de los entes Municipales debido a la falta de experiencia, falta de personal capacitado y resistencia al cambio en los procesos que en forma rutinaria se ejecutaban en dichos entes. * Falta de continuidad en el desarrollo de las actividades previstas en los convenios entre FONTUR y las Alcaldias, principalmente durante los periodos subsiguientes a los procesos electorales nacionales y regionales. El proceso de transici6n entre las autoridades salientes y entrantes requeria de una intensa dedicaci6n por parte del personal de la Fundaci6n para la explicaci6n y reactivaci6n de los procesos en ejecuci6n cada vez que era asumida la direcci6n por una nueva autoridad Municipal o Nacional. Una vez concluidos los procesos electorales realizados en el pais, la Fundaci6n desarroll6 reuniones de informaci6n dirigidas a los entes Nacionales y Municipales a fin de facilitar el proceso de transici6n y propiciar la continuidad de las inversiones en proceso. -28 - * Incumplimiento de las metas fisicas previstas en el plan operativo anual debido a la falta de disponibilidad presupuestaria de los Municipios, requerimientos adicionales en los proyectos, ajustes o actualizaciones, expropiaciones o intervenci6n de terceros (CANTV, HIDROCAPITAL, PDVSA, etc.) en las areas de influencia de las obras por ejecutar durante periodos largos. Es importante recalcar la escasez de recursos municipales para la colocaci6n de contrapartida local a objeto de apoyar las obras de infraestructura. En muchos caso FONTUR tuvo que asumir la contraparte local para poder ejecutarlos. * En algunos proyectos fue necesario el financiamiento por parte de FONTUR en un 100% del monto del contrato debido a la falta de disponibilidad de algunos Municipios para la ejecuci6n de obra de vital importancia. * Otro factor importante de comentar es que la presencia de una representaci6n local (oficinas en Venezuela) facilit6 la toma de decisiones sobre los procesos en la medida que se cont6 con este apoyo. * La experiencia adquirida por la Fundaci6n en la ejecuci6n del proyecto fortaleci6 todas las areas operativas de la misma, siendo hoy dia una instituci6n con alta capacidad tecnica para gestionar y ejecutar proyectos similares. En resumen se pueden establecer tres factores determinantes que afectaron en mayor o menor grado la ejecuci6n del proyecto: * Sobredimensionamiento de las capacidades institucionales de los actores involucrados (Municipios y FONTUR). Hubo que realizar un fuerte esfuerzo en el Fortalecimiento Institucional de los municipios a objeto de dotar a los entes locales del transporte y capacitar al personal tecnico, aunado al hecho de elaborar un banco de proyectos de inversi6n para proceder a las mejoras en infraestructura vial. * Sobredimensionamiento financiero del compromiso. Durante la ejecuci6n se evidencia la insuficiencia presupuestaria de los municipios para disponer de contrapartidas locales, inconsistencia entre la dinamica presupuestaria de FONTUR y las autorizaciones de credito extemo, segun las leyes paraguas. * Falta de interes de los municipios para cumplir con los acuerdos de los convenios de participaci6n a objeto de agilizar la etapa de preparaci6n de proyectos y posteriormente su ejecuci6n. (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information -29 - Annex 1. Key Performance Itndicators/Log Frame Matrix Outcome / Impact Indicators: Irnr3lcolorrffi.1e@1 , PoJQcl:du In t !~S; i'.CCV!iIL'3I lt P.2 1. Number of professionals having graduated 255 255 from the National Training Program. 2. Number of institubons having benefted 37 37 from the National Training Program; number of municipalities having benefited from the Technical Assistance program. 3. Number of urban transport (bus) 7500 7715 conductors and operators attended training sessions from the beginning of the project Output Indicators: 4. Number of municipalities benefiting from 12 12 the Infrastructure component' 5. Km of road widened and improved 20.1 km 20.1 km alignment 6 Km of roads rehabilitated 60.8 km 60.8 km 7. Total km rehabilitated and maintained 357.5 357.5 8 Number of bus stops rehabilitated or 184 184 constructed 9. Number of bus terminals rehabilitated or 1 1 constructed 10. Number of road Intersections 10 10 rehabilitated II1. Number of road sign/stopright works 39 139 End of project Output indicators represent an evaluation of 77 civil works project out of an estimated 135 subprojects (57 percent) completed m the 12 project municipalities. -30 - Annex 2. Project Costs and Financing Project Cost by Component (in US$ mnillion equivalent) Appraisal Actualllates t Percentage of Estimate E stimate Appraisal Projeot Cast By Cormiponent US$ mnilion USi linlliion Part A: Institutional Development and Policy Part Al. FONTUR Strengthening 3.84 7.87 205 Part A2. Municipal Strengthening 4.95 11.60 234 Part A3. National Training Program 7.22 2.20 31 Part A4. Traffic Police Program 11.17 0.37 3 Part A5. Policy Studies 2.63 0.00 0 Part A6. Project Preparation 5.00 11.17 223 Part B: Infiastructure and Equipment Part Bl. Traffic and Infrastructure 105.43 65.40 62 Part B2. Deferred Maintenance 18.45 15.97 87 Total Basolino Coot 158.69 114.58 Physlcl Contrngencles 15.65 0.00 Price Contlngoncies 25.66 0.00 Total Project CostG 200.00 114.58 Total Financing Required 200.00 114.58 POect Costs by Procuremont Arrangements (Appralsal Estimate) (US$ million equivalent) Procurement Methiod xpenuiturs itfl tlOs'( (CB NCB Other N ELF-, Total Cost 1. Works 38.98 91.61 2.00 1.21 133.80 (19.49) (45.80) (1.00) (0.00) (66.29) 2. Goods 10.14 7.56 0.27 0.00 17.97 (5.06) (3.78) (0.14) (0.00) (8.98) 3. Servlces 0.00 0.00 48.23 0.00 48.23 (0.00) (0.00) (24.73) (0.00) (24.73) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) S. MIlsCeCanonus 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Mlscollaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 49.12 99.17 50.50 1.21 200.00 (24.55) (49.58) (25.87) (0.00) (100.00) -31 - Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equival nt) . ~~~~~~Procurement Method Expenditure Cdtogory ICEIh N-O.F. Total Cos3t ics ~ NCB Other2 ______ _____ 1. Works 25.25 56.12 0.00 0.00 81.37 (12.75) (28.34) (0.00) (0.00) (41.09) 2. Goods 1.07 1.07 0.00 0.00 2.14 (0.47) (0.47) (0.00) (0.00) (0.94) 3. Services 0.00 0.00 31.08 0.00 31.08 (0.00) (0.00) (25.78) (0.00) (25.78) 4. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Misceilaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 26.32 57.19 31.08 0.00 114.59 1 (13.22) (28.81) (25.78) (0.00) (67.81) "Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 21Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. P ject Financing bY Component in US$ million equivalent) Percentage of Appraisal Compnlonent , \ ,u,-it ;,[sal -imifatc . ....... Acta31/fatest Estimate Bank Govt. Cot . Bank t"F.-. C F. Bnk Govt. CoF. Part A - lnstItutdonal 24.76 23.50 26.71 6.50 107.9 27.7 Development and Policy Part B- Infrastructure 75.27 76.50 41.09 40.28 54.6 52.7 and Equipment* Total 100.03 100.00 67.80 46.77 67.8 46.8 m Government financing amounts includes an estmated $9.1 million provided by the participating municipalities. -32- Annex 3. Economic Costs and Benefits Methodology An ex-post economic analysis was carried out for 6 representative subprojects in 5 project cities, which are listed in the table below. This sample included both pilot cities and newer participants as well as a complete range of infrastructure activities financed under the Bank-project. The total value of the selected works is roughly $17.2 million, or roughly 15 percent of the total project amount. The economic analysis was based on information gathered through traffic counts and public transit vehicles along subproject roads and intersections, estimates of traffic flow, and an inventory of road signs and stoplights, and user surveys. The latter entailed survey responses of roughly 1000 respondents regarding the benefits achieved as a result of civil works subprojects completed in their respective communities. List of civil works subprojects included in the economic analysis Pilot Municipality Civil Work Type Cost Date Completed cities US$M Cumana Road rehabilitation works 3.2 11/01 Maracaibo Road rehabilitation and maintenance 6.3 11/99 Later Punto Fijo Road widening, rehabilitation, and 0.7 6/00 entrants maintenance Punto Fijo Rehabilitation of traffic signals 0.6 9/99 Cuidad Guyana Road rehabilitation 5.0 3/02 Bannas Road rehabilitation 1.4 4/01 TOTAL 17.2 The economic analysis was based on an evaluation of the project before and after the implementation of the above civil works. Estimates of the benefits, Net Present Value (NPV) and the Economic Internal Rate of Return (EIRR) were based on the following factors: (i) vehicle operating costs, e.g. in relation to goods transport and public transit, etc.; and (ii) travel time. The analysis estimated the benefits and costs of the evaluated subprojects independently of the potential economic impact on adjoining roads or on the municipal road network. These estimates were listed in dollars have been adjusted for local inflation as well as changes in the Bolivar/$ exchange rate. Costs. Defined as the after-tax financial costs incurred as part of implementation of the listed subprojects and includes the estimates of recurrent costs (e.g. maintenance and operating costs) estimated during the productive life of the project. As a general rule of thumb, maintenance costs were estimated at 2 percent of the initial investment and assumed a 15-year productive life. Benefits. The benefits achieved through lower operating costs and travel times were quantified into financial values to individual user. In estimating these benefits, it also was necessary to forecast traffic growth throughout the productive life of the each of the civil works subprojects. This included forecasts of average daily and annual changes in aggregate traffic levels and by vehicle type. Residual Value. This parameter was estimated at 20 percent of the total initial investment and assumes a 15-year productive life for road civil works projects and 5-year productive life for stop signs and stoplights subprojects. Net Present Value. This parameter was estimated for the entire productive life of the project using a discount rate of 12 percent. The EIRR is the discount rate when the NPV = 0. - 33 - Sensitivity Analysis. This analysis involved the comparison of the following scenarios against the base case: (i) reductions in vehicle operating costs plus time savings (TS); (ii) 25 percent decrease in estimated benefits and a 25 percent cost increase; and (iii) maintaining the benefits achieved during the first year of implementation throughout the life of the project. In preparing this analysis, the following aspects were also considered. 0 Physical, including the condition of the road pavement based on the Intemational Rugosity Index (IRI) and passenger facilities as well as improvements relating to user accessibility; * Technical, including estimated and actual construction costs, estimated and actual implementation periods, and * Traffic, including traffic volume (vehicles/hour) during peak and non-peak periods, average daily traffic levels (vehicles/day), road and intersection capacity (vehicles/hour), level of service, average speed traveled by vehicle type (km/hour), and traffic delays. Results An ex-post cost-benefit evaluation was carried out for 9 representative subprojects in 6 project cities. This sample included both pilot cities and newer participants as well as a complete range of infrastructure activities financed under the Bank-project. Based on this sample, the average economic internal rate of (EIRR) return was conservatively estimated at 29.5 percent with time savings included, which is slightly below the 32 percent average anticipated at appraisal. Without time savings, the EIRR is around 12.1 percent, which is slightly below the 14 percent anticipated for the same sample ex-ante using the methodology delineated at appraisal. The ex-post evaluation is very conservative in that it did not include savings relating to accident reduction and environmental benefits. In addition, the economic analysis substantiated that all the reviewed civil works subprojects achieved minimum economic efficiencies based on the methodology set out at appraisal. Estimated NPV and EIRR for the subprojects evaluated are listed in the table below. Municipality Civil Work Subproject B/C EIRR (%) EIRR + EIRR EIRR first year (USMS) TS ()) Cost +25%, benefits only Benefit - 25% Cumana Road rehabilitation works 2.7 25.1 16.6 13.0 20.6 Maracaibo Road rehabilitation and 6.9 32.7 8.8 16.9 27.8 maintenance Punto Fijo Road widening, 1.5 47.2 14.2 27.8 36.2 rehabilitation, and maintenance Punto Fijo Rehabilitation of traffic 1.8 53.5 23.7 32.9 39.3 signals Cuidad Guyana Road rehabilitation 9.9 31.5 18.4 20.3 20.9 Barmas Road rehabilitation 0.7 20.9 4.2 9.7 20.4 Total 29.5 12.1 16.2 23.3 -34 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 06/1992 4 URBAN PLANNER, S S SR. TRANSPORT PLANNER, TRANSPORT ECONOMIST, TRAFFIC ENGINEER 09/1992 6 URBAN PLANNER, S S TRANSPORT PLANNER, TRANSPORT ECONOMIST, PROCUREMENT ENGINEER, FINANCIAL ANALYST, TRAFFIC HIGHWAY ENGINEER Appraisal/Negotiation 09/1992 6 URBAN PLANNER, S S TRANSPORT PLANNER, TRANSPORT ECONOMIST, PROCUREMENT ENGINEER, FINANCIAL ANALYST, TRAFFIC HIGHWAY ENGINEER 03/1993 8 URBAN PLANNER, S S TRANSPORT PLANNER, TRANSPORT ECONOMIST, PROCUREMENT ENGINEER, FINANCIAL ANALYST, TRAFFIC HIGHWAY ENGINEER, LAWYER, DISBURSEMENT SPECIALIST Supervision 10/27/1993 1 SR. TRANSPORT S S PLANNER 11/27/1993 1 OPERATIONS ASSISTANT (1) 1 1 03/23/1994 1 SR. TRANSPORT PLANNER I I (1) 07/01/1994 1 OPERATIONS ANALYST (1) 1 2 10/29/1994 1 URBAN TRANSPORT (1) S S 02/24/1995 2 SR FINANCIAL ANALYST (1); S S URBAN TRANSPORT ENG. (1) 07/14/1995 1 URBAN TRANSPORT ENG. (1) S S 11/03/1995 2 URBAN TRANSPORT ENG. S S (1); SR. HIGHWAY ENG. (I) 03/29/1996 1 URBAN TRANSPORT ENG. (1) S S 06/21/1996 1 URBAN TRANSPORT ENG. (I) S S 09/26/1996 1 URBAN TRANSPORT ENG. (1) S U -35- 09/04/1997 2 URBAN TRSPT SPECIALIST S S (1); ENGINEER (1) 01/21/1998 2 TASK MANAGER (1); S S CONSULTANT (1) 07/04/1998 3 TASK MANAGER (1); S S PROCUREMENT SPECIALIST (1); TRANSPORT ENGINEER (I) 01/28/1999 3 TASK MANAGER (1); S S TRANSPORT ENGINEER (1); PROCUREMENT SPECIALIST (1) 09/23/1999 1 ECONOMIST (1) S S 12/03/1999 3 TRANSPORT SPECIALIST (1); S S ECONOMIST (1); ROAD ENGINEER (1) 03/17/2000 2 TRANSPORT PLANNER (1); S S HIGHWAY ENGINEER (1) 06/30/2000 2 TRANSPORT PLANNER (1); S S TRANSPORT SPECIALIST (1) 09/15/2000 4 TRANSPORT SPECIALIST (2); S S SECTOR LEADER (1); PROCUREMENT SPECIALIST (1) 12/14/2000 2 TRANSPORT PLANNER (1); S S TRANSPORT SPECIALIST (1) 01/26/2001 1 FINANCIAL MGMT. SPEC. (1) S S 02/23/2001 6 TRANSPORT SPECIALIST (1); S S SECTOR MANAGER (1); PROCUREMENT ASSISTANT (1); DISBURSEMENT ASSISTANT (1); DISBURSEMENT OFFICER (1); FIN. MGMT. SPECIALIST (1) 04/27/2001 2 TRANSPORT SPECIALIST (1); S S TRANSPORT PLANNER (1) 10/05/2001 2 TRANSPORT SPECIALIST (I); S S TRANSPORT PLANNER (1) ICR 11/2002 2 TRANSPORT PLANNER; S S TRANSPORT CONSULTANT -36 - (b) Staff. Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 58.8 152.1 Appraisal/Negotiation 10.84 30.3 Supervision 162.26 363.0 ICR 8.2 20.0 Total 240.1 565.4 - 37 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating 3Macro policies O H OSU*M O N O NA 3Sector Policies OH *SUOM ON O NA 3 Physical O H *SUOM O N O NA 3 Financial O H *SUOM O N O NA X Institutional Development O H * SU O M 0 N 0 NA 3Environmental O H OSUOM * N O NA Social O Poverty Reduction O H OSU*M ON O NA 3Gender OH OSUOM ON * NA O Other (Please specify) O H OSUOM O N O NA O Private sector development 0 H O SU O M 0 N 0 NA 3 Public sector management 0 H O SU O M 0 N 0 NA O Other (Please specify) O H OSUOM O N O NA - 38- Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bankperformance Rating 3 Lending OHS*S Ou OHU • Supervision OHS OS O u O HU Z Overall OHS OS O U Q HU 6.2 Borrowerperformance Rating Z Preparation OHS OS O U O HU %3Government implementation performance OHS * S 0 U 0 HU s Implementation agency performance O HS O S 0 U 0 HU Z Overall OHSS OU OHU - 39 - Annex 7. List of Supporting Documents Staff Appraisal Report, Venezuela: Urban Transport Project, September 30 ,1993. Loan Agreement (Urban Transport Project) between the Republic of Venezuela and the International Bank for Reconstruction and Development, September 28, 1994. Project Agreement (Urban Transport Project) between the Republic of Venezuela and the International Bank for Reconstruction and Development, September 28, 1994. Amendment I to the Loan Agreement and the Project Agreement between the Republic of Venezuela and the International Bank for Reconstruction and Development, April 4, 1997 Amendment 2 to the Loan Agreement and the Project Agreement between the Republic of Venezuela and the International Bank for Reconstruction and Development, June 20, 1997. Manual de Operaciones, Guia de Procedimientos para la Ejecucion del Program Local de Inversion (PLI) de Transport Urbano. June 1997 Amendment 3 to the Loan Agreement and the Project Agreement between the Republic of Venezuela the International Bank for Reconstruction and Development, November 9, 1999. Amendment 4 to the Loan Agreement and the Project Agreement between the Bolivarian Republic of Venezuela the International Bank for Reconstruction and Development, August 28, 2001. Planservi Engenharia, LTDA. Disefio e Implantaci6n del Sistema de Informaci6n en Transporte Urbano y Evaluaci6n del Programa Nacional de Transporte Urbano (P.N.T.U), June 2002. Ospina, German, Proyecto de Transporte Urbano de Venezuela, Seguimiento y Analisis de Resultados, June 2002. -40 - IMAGING Report No.: 25202 Type: iCR