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PPER Report – Two international roads in Swaziland

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EQUIVALENTS AND ABBREVIATIONS CURRENCY EQUIVALENTS PPER 1 UA 1 UA 1 ZAR

= SZL 10.7670 = 1.52 USD = 1 SZL (Emalangeni)

PCR

Appraisal

9.75772

4.91514

WEIGHTS AND MEASURES 1.00 meter (m) 1.00 kilometer (km) 1.00 square kilometre 1.00 hectare (ha) 1.00 kilogram (kg)

= = = = =

3.281 foot 0.621 mile 0.386 square mile (mi2) 2.471 acres 2.205 lbs

FISCAL YEAR 1st April – 31st March ABBREVIATIONS ADB ADT CTROM CRE EA EIRR GOS HDM ICB MOF MEPD MPWT NPV NTP RD RMS RSA RSC RTD SADC SATCC SCOT SEA TA VOC VPD ZAR

= = = = = = = = = = = = = = = = = = = = = = = = = = =

African Development Bank Average Daily Traffic Comprehensive Toll Road Operations and Maintenance Chief Roads Engineer Executive Agency Economic Internal Rate of Return Government of the Kingdom of Swaziland Highway Design and Management Model International Competitive Bidding Ministry of Finance Ministry of Economic Planning and Development Ministry of Public Works and Transport Net Present Value National Transport Policy Road Department Road Maintenance System Republic of South Africa Road Safety Council Road Transportation Department Southern Africa Development Community Southern African Transport and Communication Commission Swaziland College of Technology Swaziland Environmental Authority Technical Assistance Vehicle Operating Cost Vehicle per Day South African Rand

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The Project Performance Evaluation Report about Two international roads in Swaziland is supposed to be achieved few years after implementation of the projects The complete process starts with the first appraisal of the project and ends up with the Project Performance Evaluation Loan Process

Project implementation

Outputs

Project Identification

June 1994 November 1994

Appraisal Report 1st loan approval

May 1997

1st loan agreement

October 1999

2nd loan approval

November 2001

Annex 6 : Tolling of the

2nd loan agreement

December 2004 January 2005

PCR PCR Notes

August 2007 October 2007

On site Evaluation PPER

Documents in our possession and missing papers Dates June 1994 29.09.1999

Papers Appraisal of the project (2 international roads) Reappraisal and proposal for supplementary loan of US$ 15.42

a

From African Development Bank

Prepared by

African Development Bank

H. Nyame-Mensah (Chief Transport Economist) A.Rugamba (Principal Transport Eng.)

January 2000

Country Strategy Paper 2000-2005

24.03. 2000 June 2000

Swaziland National Transport Policy

2003-2004 23 August 2004

Transport Sector Bulletin 2003-2004 Implementation Phase of the Tolling of the Ngwenya-Mbabane- Manzini road (MR3)

January 2005

Country Strategy Paper 2005-2009

Toll Advisory Consortium (STAC) in charge of investigating the feasibility of a toll road Operations Department

December 2005

Project Completion Report (PCR)

ONIN.3

PPER Report – Two international roads in Swaziland

African Development Bank Operations Department Ministry of Public Works and Transport

Sampson Consulting with inputs of a Steering Committee Financial and technical assistance given by United Nations Economic Commission for Africa (UNECA) GIBB Africa

Mr K. Mlambo (chief Country Economist) H. Nyame-Mensah, Chief Transport Economist E.R Lawson, ConsultantTransport Engineer and K.S.R Rao-Transport Economist

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Dates 09.10.2006 2007 June 2007

Papers The Draft roads Agency and Road Fund Bill Maintenance and Rehabilitation (M&R) Report

From To be presented at the King and Parliament of Swaziland Swaziland Ministry of Public Works and Transport

Upgrading of the Mbabane-Ngwenya (MR3 road)

BCEOM

Prepared by ED Simelane & Associates (Pty) Ltd in joint venture with Africon Swaziland (Pty) Ltd J.P Dumas (BCEOM)

Other documentation Dates 1995

2006

Papers Swaziland Business year book A commercial Guide Swaziland Railway – Annual Report Swaziland Discovery Swaziland Official Tourist Guide 2006/2007 Swaziland Review 2006

2007

Swaziland Review 2007

2007

Experience the real Swaziland

March 2003 2006/2007

From Swaziland Tourism Authority Swaziland Railway Swaziland Tourism Authority

Prepared by Christina Forsyth-Thompson

Ministry of Enterprise and Employment Ministry of Enterprise and Employment Swaziland Tourism Authority

Swazi review of Commerce and Industry Swazi review of Commerce and Industry Kathy Waddington

Address P.O Box 443, Mbabane H100 Tel : (+268) 404 8145/9 Cell : (+268) 606 3020 Fax : (+268) 404 3187 e-mail : mabuzak@gov.sz

Christina Forsyth-Thompson

Attended Meetings Dates 18.07.2007

Ministry Ministry of Finance Director Budget and Economic Affairs

Name, Surname Khangeziwe G.MABUZA

18.07.2007

Swazi Railways Director of Engineering Corporate Planner Ministry of Public Works and Transport Principal Secretary

M. Timothy T. NDLOVN

Municipal Council of Mbabane Department of Public Works City Engineer (Projects)

Hunter J.DLAMINI

Ministry of Tourism, Environment and Communication Tourism Officer Information & Policy

Hermon S.MOTSA

BCEOM Engineer ESTP Senior Resident Engineer Mbabane Bypass Road

Jean Pierre DUMAS

PPER Report – Two international roads in Swaziland

Khdwaphi DLAMINI Evart M. MADLOPHA

P.O Box 58, Mbabane Tel : (09268) 404 2331 Fax : (09268) 404 2364 e-mail : ps-mopwt@realnet.co.sz Civic Office, Mahlokolha Street P.O. Box 1, Mbabane H100 Tel : (+268) 409-7075 Fax : (+268) 404-2611 Cell : (+268) 628-6204 e-mail : hunter@mbacity.org.sz P.O Box 2652, Mbabane Tel: (0268) 404-4556 Fax: (0268) 404-5415 e-mail : motsahe@gov.sz Motjane – Piggs Peak Junction P.O Box 3825, Mbabane Tel : (+268) 442 4518/19 Fax : (+268) 442 4522 e-mail : bceom@realnet.co.sz

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1. Basic data about Kingdom of Swaziland 1.1 Country and Economic Context Geography and climate Swaziland with a population of about 1.1 million inhabitants in 2002, occupies an area of 17000 km 2 with two third of its borders with South Africa and 1/3 with Mozambique. This leads to a density of approx. 53, 54 people per km2 It is a land locked country without any direct access to the sea and is the smallest country in the Southern hemisphere with distances that do not exceed 193 km from north to south and 145 km from east to west. It has a subtropical climate with temperatures ranging from 15° to 25° C in summer and 15° to 19° C in winter. Only 26,7% of inhabitants are living in urban areas with a rise expectation to 32.7% by 2015. The country is divided in four topographical areas from west to east, varying from 1800 to 400 m above sea level : mountainous highveld (with country’s highest point at 1862m), subtropical middleveld, lowveld and Lubombo, an escarpment witch traverses the eastern length of the lowveld with an average altitude of 600 m. The rainfall at higher altitudes varies from 1000 mm to 1600 mm while in the lower area it is between 500 mm and 600 mm. Arable land is only 11% of the total area, the remaining consisting of permanent pasture, forest and woodland. It possesses a variety of mineral resources including abestos, clay, cassiterite, forest, quarry stones and small gold and diamond deposits.

Major cities Mbabane (population of 60000) was established as the British colonial administration’s headquarters at the 20th century and is actually the base of almost of government ministries and departments, as well as the majority of diplomatic representatives. Manzini (population of 80000) is the largest city in the most densely populated region about 40 km from Mbabane and close to the Matsapha Industrial Estate, largest and most active zone at 10 km from Manzini. The vast majority of manufacturers are based in Matsapha that is linked by rail through a container’s depot. 1.1.1

Institutions

Part of the British Empire from 1903 (Crown Protectorate then High Commission Territory) to 1968, where the country took its independence, Swaziland is actually governed as a modified traditional monarchy with executive, legislative and limited judicial powers ultimately vested in the King. In the last few years, civil society groups have been pressing for democratic pluralism. In a move to introduce greater democracy, the king appointed a Constitutional Drafting Commission in March 2002 to come up with a Constitution acceptable for the Swazis. After consulting widely in the country, the draft has been discussed until 2004 and presented to the Parliament in 2004

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The King appoints the Prime Minister who is head of government, from the House of Assembly and Cabinet from among the members of parliament. The last elections were held in October 2003 and Parliament sits for five years. 1.1.2

Economic activities

Agriculture and agro industry Agriculture plays a major role in the lives of the majority of Swazi since most households rely on agriculture as a major source of income. About 75% of the population is engaged in agricultural activities though its contribution to GDP as fallen over time to reach 13.5% in 2002. Swaziland operates dual land tenure, namely Swazi Nation Land (SNL) and Title Deed Land (TDL). Production on TDL is commercially oriented and consists mainly of sugar cane, pineapples and citrus, as the major crops on SNL are mainly maize (for subsistence) and some cash crops such as cotton, tobacco, and vegetables for supplementary income. Swaziland has a buoyant (38% of GDP in 2003) agro-based manufacturing sector namely sugar processing, clothing and textiles, drinks and foodstuffs. Sugar industry is the biggest industry in Swaziland (turnover of US$ 1.5 billions including $ 637 millions in exports). Economical Trends: Foreign Trade and Investment …a Domino Effect GDP per Capita: 1300 USD (2002) The poor economic performance partly reflects low agricultural productivity, a slowdown in manufacturing output and declining Foreign Direct Investment (FDI) inflows. About one third of the labour force is unemployed. The overall budget deficit increased from 4.8% of GDP in 2002/2003 to 5.8% in 2003/2004. Civil services wages and salaries are by far the largest component of total expenditure, accounting from an average of 11.2% in 2002 to 7.4% in 2003 and a further decline to 4.8% in the first quarter of 2004. In 2006, the continued market slide of Swaziland’s textile and clothing factory had proven to be the prime cause of a decline in total FDI – from an annual average of 4.7% of GDP between 1994 to 2002 to 2.5% reflected in the latest statistics. These adverse events impacted negatively in turn on transport providers, resulting in an overall E140million slump in FID stock within the services sector. Companies closures also led to a 38.7% decline in the investment sector of FDI, while an accident coupled with market unavailability led to mining sector’s stock of FDI falling by 54.4%. TDI stock in the agricultural sector recorded but a marginal decline: restructuring in a major timber operation led to outflows of investment income and disastrous fire dragged figures even lower. Swaziland’s preferential status regarding sugar exports to Europe came to an end in July 2006; under the new regime, prices paid for Swazi exports are expected to fall by 36% cumulatively on a 4 year period. In the trade account surplus had declined by 48% to E 464.5 million. Tourism Tourism is an activity with the potential to spread economic, social and environmental benefits across a wide spectrum of society. It is described in the CSP 2000 to account for less than 2% of GDP, figure that clearly seams far from the level that could be reached taking in account the potential of the country in this matter. Aware of this underestimation of tourism’s contribution to Swaziland economy, a Tourism Master plan has been already engaged and 1st results are expected at the end of 2007 (data from interview with Tourism officer).

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1.1.3

Government development programme

After recording in real GDP growth rates above 7% in the 1980’s, Swaziland is currently facing a serious socio-economic situation characterises by a sluggish economic performance, high levels of poverty and inequality, high HIV/AIDS infection rate, growing unemployment and challenges in the area of governance. In 2003, real GDP increased by 2.9%. The state of public finances is a major concern given the growing budget deficits over the past few years as revenues failed to keep pace with the growing government expenditures. As a result, the country has moved from a budget surplus of E170 million recorder in 1997/1998 to a deficit of E593 million (5.8%) in 2002/2003. Civil service wages and salaries are by far the largest component of expenditure, accounting for more than 50% of current expenditure. GOS financed the deficit by drawing down on its reserves with the Reserve Bank of South Africa and other commercial banks in South Africa. GOS clearly needs to undertake major internal fiscal adjustments bys reducing expenditure and reducing government waste. GOS also requires expending its revenue base and reducing its dependence on the pooled receipts of the Southern African Customs Union (SACU) which accounted for 47.2% of revenue, while taxes on individuals comprised only 14.4%, company taxes 7.6% and sales taxes 14%. The main development agenda of Government is articulated in the Swaziland’s National Development Strategy (1997-2022) whose vision is that by 2022 Swaziland will have moved to the 10 per cent of the medium human development group of countries founded on sustainable economic development, social justice and political stability. The NDS provides a long-term strategic development framework that guides the preparation of the medium and short term development programmes. The medium term implementation tolls are the National Development Plans (NDPs), three year rolling plans as short term tools are Millennium Action Plan (MAP) that is essentially the capital expenditure component of the annual budget and thus revised annually. Along side the NDP and the MAP, the GOS formulated the Poverty Reduction Strategy and Action Plan (PRSAP) … with the objective of reducing the incidence of poverty from its current level of 66 % to 30% by 2015, in line with MDG and eliminate it by 2022. The main pillars of the strategy include rapid acceleration of economic growth based on broad participation empowering the poor to generate their own income and equitable distribution of the benefits through public spending (education, social services, health and nutrition). Public reforms had to be engaged such as Fiscal Restructuring (strengthening the revenue collecting capacity of the tax and customs and exercise departments by creating an autonomous Revenue Authority modelled on the South African Revenue Services and introducing a Value-Added Tax in 2006 and controlling expenditures, especially personnel costs. Reducing Unemployment, enhancing Agricultural Production and Food security, improving access to Basic Services and Infrastructure, enhancing the Quality of Life (Education, Fight against HIV/AIDS, Health sector) … are the key Elements of GOS Development Agenda. In terms of sector distribution, the African Development Bank’s lending activities in Swaziland are concentrated mainly in the transport sector, which account s for close to 60% of the Bank Group portfolio in the country followed by agriculture sector (19%), public utilities (9.8%) and social sector (7%) and then industrial sector (4.2%).

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1.2 Sector and Project context Transport’s contribution to the country’s economic growth is well defined, as it is the major facilitator of foreign trade and international and domestic access. The transport sector in Swaziland, including communications constitutes 5.7% in 2002/2003 of the economy measured as a function of Gross Domestic Product (GDP), totalling E88.8 million. Capital expenditure on transport has been averaging 29.9% of the GOS’s budget, standing at E357.6 million in 2002 and E262.4 million in 2003. The SADC Protocol on Transport, Communications and Meteorology requires that member states promote economically viable, integrated transport services throughout the region. A well-integrated transport system requires that all modes operate as efficiently as possible, both with regard to infrastructure and the regulatory environment. It also requires that all the modes are able to compete fairly without subsidies or other conditions that give a peculiar mode or combination of modes an undue advantage, enabling each mode to fully offer its comparative advantage and efficiently compliment other modes. Inter-modal transportation is defined as the concept of transporting freight and passengers in such a way that all the part of the transportation. 1.2.1

Transport infrastructures and activities (data from Annual Transport Sector Bulletin 2003/2004) Roads take up a major chunk of the total capital budget. Featuring significantly in the budget for the 2004/2005 financial year is the Ngwenya – Mbabane road rehabilitation and upgrading Phase II (Mbabane bypass) estimated at E505.4 million, feeder roads and rehabilitation of Armcos and culverts estimated at E21 million and the Mliba-Mandlangempisi-Tshaneni (MR5) road upgrading and the Mandlangempisi-Msahweni road upgrading (MR6) estimated at E240 million and E303.1 million respectively. The rehabilitation and upgrading of the Ngwenya – Mbabane road Phase I (from Nkoyoyo to Ngwenya Border Post) was completed in April 2004 at a total cost of E353 million while the Luyengo – Sicunusa road was completed at a total cost of E163.4 million in November 2002. The Mantambe – Lavumisa road upgrading was completed in December 2003 at a total cost of E267 million. Government as per the Budget speech in March 2004 is still committed to develop the transport infrastructure in an effort to create an enabling investment climate TABLE 1: CENTRAL GOVERNMENT EXPENDITURE ON TRANSPORT Year Ending 31 March

1. Capital Budget Total

Unit

2000/2001

2001/2002

2002/2003

2003/2004

Av.Share for past 4 Years to 1999/00-2003/04

E'Million E'Million

960.2 296.2

1158.5 415.4

1126.7 357.6

1228.2 262.4

100

% E'Million %

30.8 238.5 24.8

35.9 374.8 32.4

31.7 300.3 26.7

21.3 207.6 16.9

29.9

E'Million E'Million %

2226.3 117.4 5.2

2461.4 133.5 5.4

2903.2 141.5 4.9

2924.5 153.2 5.2

100

Transport % of Total Cap.Budget Roads % of Total Cap.Budget

25.2

2. Recurrent Budget Total Transport % of Total Rec.Budget

5.2

Source: Government Estimates 2000/2001-2003/04

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1.2.2

Railway System (railway map)

Swaziland is linked to the system of its two neighbours South Africa and Mozambique and has a very extensive (if not actually fully utilised) network of 300 km of single track rail system. Swaziland Railways is a parastatal organisation under the administrative control of the Ministry of Public Works and Transport. Its mission is to become the region’s total transportation service of choice and already supports significant tonnes of import-export.

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Interview with Swaziland railways managers History of Swaziland Railways 1964 : Opening of an Iron Ore Mine at Ngwenya and erection of a railway line to Maputo 1996 : Erection of a new line linking north to south. 1997 : Mine iron ore closed down – Contract in volume and quantity ended Ngwenya to Mbabane line section have been stripped of rails to rehabilitate section to Maputo Possibility of reopening the mine anytime and should that case arises line would have to be reopened …as the infrastructure (gravel travel) and bridges, tunnels are still in condition, only new rails would have to be settled again. 2003 : Rehabilitation of eastern part of the line on a loan from government … Government asked for its money back. Characteristics of Swaziland Railways Operational income increased from E 67.55 million (1999) to E 86.6 million (2003) Deficit E27.89 millions (2003) Total Staff employed from 665 employees (1999) to 266 employees (2003) Revenue per Tonne/km from E 0.10 (1999) to E0.12 (2003) Tonne/staff from 5.97 (1999) to 14.66 (2003) Net tonnage from 4.38 (1999) to 3.9 millions of tonnes (2003) No subsidy but discount on fuels (33c off the liter) as the train’s consumption is as high as 7 million liters per year

Freight matters Imported goods are primarily petroleum products, agricultural products, cement packaging containers and general consumer items. Exported goods include various agricultural and industrial products such as sugar, citrus fruit, kraft pulp, coal, timber and containerized items. The rail-transit authorities of Swaziland, South Africa and Mozambique established the first passenger service linking areas which fall under the Lumbobo SDI. Connecting at Mpaka railway station, it is run by South Africa’s main line passengers Services. While effectively eliminating a 600-kilometer detour via Johannesburg, the passenger’s service will provide an ideal platform for successful implementation of a new tourist attraction with a sightseeing railway.

Matsapha Dry Port is a strategic move for a more effective capturing of the burgeoning containers cargo market as a 45-tonne mobile reach taker and 1 road trailers add value to the door-to-door cartage service. The utility is currently being restructured to concentrate on its core business and bring in private sector participation to performance of this sub-sector.

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COMPARATIVE STATEMENT OF TONNAGES FINANCIAL YEARS 2000/ 01 - 2004/ 05 COMMODITY Import / Export

NET TONNAGE (,000) 2004/05

Sugar Pulp Coal Molasses Fertiliser P.O.L/ TC Cement Citrus Fruit Canned Fruit Timber General Goods I.C.D. Wheat Cross-border traffic

2003/04

2002/03

2001/02

2000/01

187 97 74 4 0 77 106 0 16 78 3 55 43 740

229 74 83 20 5 65 99 0 19 113 11 44 46 808

232 72 144 21 2 53 114 0 18 139 8 47 51 901

177 55 133 18 1 43 95 0 19 107 11 32 30 721

313 6 249 25 9 59 113 3 13 109 3 47 38 987

NRL Rock Phosphate NRL Phosphoric Acid NRL Copper Concentrate NRL Container South Bound NRL Container North Bound NRL Vermiculite Ore NRL Citrus Fruits NRL General Goods NRL Timber NRL Sugar NRL Asbestos NRL Coal Transit traffic

1 736 103 86 151 123 175 27 561 270 31 5 3 3 271

1 663 224 107 140 76 129 80 386 276 0 16 0 3 097

1 402 284 70 162 101 172 75 386 242 10 27 68 2 999

1 499 283 111 208 104 138 100 426 180 0 51 0 3 100

1 638 379 63 186 130 137 111 361 183 19 88 0 3 295

TOTAL

4 011

3 905

3 900

3 821

4 282

458 227 55 3 271 4 011

538 226 44 3 097 3 905

629 224 47 3 000 3 900

519 175 32 3 095 3 821

713 226 47 3 296 4 282

Made up of Exports Imports I.C.D. Transit traffic TOTAL

1.2.3

Air Transport

Matsapha International airport is located near the industrial hub of Manzini. The number of passengers on scheduled flights at Mastsapha airport increased steadily by 12% from 53 975 in 1996 to 60 270 in 1997. Aircraft movements were 7185 in 1997. A new substantially bigger international airport is Sikhuphe is on track (construction of runway is reported completed in 2006) 1.2.4

Freight transport on roads

There less than ten large operators in Swaziland, operating 15 trucks or more, who dominate the goods transport services and estimated 150 local operators with three vehicles or less. In addition, several large companies use their own vehicles to transport their products. At January 2000, there were 210 road freight companies registered and an additional 238 “for hire bakkies” with valid permits. 1.2.5

Public Transport and Bus network (Swaziland Business Year Book - 1995)

This sector is regulated by the Road Transport Board which falls under the authority of the Ministry of Transport.

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Buses provide the major source of transport for the majority of Swazis and the sector is run entirely by private operators with permits to serve specific routes granted annually. Operators receive no subsidy either by government or municipalities and are entirely responsible for maintaining their vehicle in a fit and safe condition. Buses are checked on a regular basis by a government vehicle examiner and if found deficient, removed from service until repaired. Efficient and reliable bus services are essential given the large number of people that rely on them. Swaziland National Transport Policy (diagnostic) and Annual Transport Bulletin (2003-2004) In 1990, there were 991 commercial buses registered in the country. Some 200 privately owned taxis possess Road Transportation Board permits and these play a smaller but important part in the public sector. In January 2000, 650 large busses, 56 midi-buses, 838 mini-bus (kombi taxis) and 393 sedan taxis had valid operating permits. In 2003, there were 1131 buses, 1395 midi-buses and 1825 kombi operating. Route statistics related to demand patterns, vehicle kilometres, schedule frequencies, journey times and quality of service indicators are unavailable. In June 1997, a sample of five major bus terminals was surveyed covering all the regions of Swaziland. These were Manzini, Mbabane, Nhalangano, Piggs Peak and Siteki. The results from the survey represented the first step in the provision of reliable data to be incorporated into the data base of road public transport and passenger information. The main conclusions from the survey were: . Manzini’s dominance as a focal point for road vehicle and passenger movements in the Kingdom; . The development of “hub and spoke” network of public road transportation in the Kingdom; . The dominance of small vehicle transit, e.g. the mini-bus along short-distance, densely populated routes.

Buses routes (public transportation map)

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1.3 Sector – road network, data on car equipment rate and traffic The settlement patterns in Swaziland, especially in the rural areas where the households are spread out all over the country in homesteads rather than in concentrated villages, poses a challenge to the provision of essential infrastructure services such as roads, telecommunications, water and electricity. 1.3.1

General network

In 2007, Swaziland has a classified road network of 3277 km, a third of which 45% is paved (1171 km to be compared to 1000 km in 1999). Ratio Population/km of 290 is ‌. compared to other countries Of the paved network, 60% is in good conditions and 25% in fair conditions. The paving program aimed at improving the rural feeder-road network continues to make strides in line with the developments already achieved.

In December 1997 and January 1998, the Road Department carried out a survey of all its designated road network. The survey showed that at the current levels of expenditure, the network is not in a very good condition and that the rate of deterioration was increasing annually. It has been estimated at that time that a 300% increase in overall periodic maintenance budget will be required to redress the maintenance backlog.

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1.3.2

Planning of road projects (From Swaziland Review 2007)

Survey of the past projects 1992: The three phase rehabilitation of the 45 km Mbabane/Manzini road, a key arterial route, into an international highway started in 1992. This E125 million venture has being carried out over five years, financed by various international development agencies and some local money. 1993: Reconstruction of the 38 km Lukhula to Big bend road, an important tourist and trade road. 1995: Completion of the Hhlehhele/Big Bend/Tshaneni/Mlawula route (starting in 1992 and completed in 1995). 2002: Reconstruction of Luyengo-Sicunusa road for a total cost of E163.4 million 2004: The rehabilitation and upgrading of the Ngwenya-Mbabane road Phase 1 (from Nkoyoyo to the Ngwenya Border Post) was completed in April 2004 at a total cost of E163 million (November 2002 cost appraisal). Transport infrastructure development features prominently in the government’s budget averaging 29.9 percent over the past four years (2000-2004). Projects on track • MR5/MR6 northern heading north from centrally situated Mliba to access the far northwest Matsamo and northeast Mananga border posts (project funded by government with assistance from Japan Bank for International Cooperation). • MR3 Ngwenya-Mbabane-Manzini corridor (financed by government in collaboration with AfDB object of the present PPER) that will include a by pass road linking Manzini-bound traffic directly with the Mbabane-Manzini highway. Construction started during the third quarter of 2004 and is still in progress. • Government has been launching feasibility studies regarding a revenue-generating toll on MR3 to ensure the timely maintenance and safe operation of the country’s more important transport corridor; as the proposed user-pays system is new to Swaziland, government continues to interact with various sectors of the community likely to be impacted upon by the planned introduction of toll-boths.

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Upgrading roads had been estimated at approximately E 2.0 billion for the 2004-2006 1.3.3

Registration of motor vehicles (from Swaziland Review 2007)

Sales of new vehicles to March 2006 remained steady across all three classifications used for statistic purposes : Passenger Car, Light Commercial and Heavy Commercial, Buses. Consumer demand continues to support imports from South Africa, Japan and Middle East. Used vehicles for Dubai for general are more affordable than second hand cars. Durban’s specialized roll on-roll off vehicle terminal remains the primary point of arrival of these second hand cars, but South Africa is a step nearer to a re-assessing its «other destination» temporary licence scheme and Maputo may yet become the preferred arrival point. (Based on Meeting with Road Department) it appears that the large scale importation of cheap used cars means that there has been a substantial increase in the car population during recent years. From Swaziland National Transport Policy (2000) In 1998, Registered motored vehicles accounts for 92 200 in 1998, this is to say 96.3 vehicules/1000 persons (Swaziland National Transport Policy). An improvement has been realised in the number of vehicle registration which rose by 17 percent from 4141 in 2001 to 4847 in 2003. Death rate per 10 000 vehicles was between 30 and 40 per year which is high in both regional and international terms. The current of accidents was estimated at about E400 million per annum which represents 25 to 30% of GDP, this representing an unacceptable high cost for Swaziland In 2006, the number of death casualty is of 292 including 209 road users and 92 pedestrians. Since 2004, number of fatalities is decreasing. It is assumed that the deaths per 10 000 are likely to reduce significantly due to increased attention being paid to road safety through increased press awareness and press coverage, school and publicity work.

1.3.4

Cost escalation of gasoline/diesel in Swaziland

Inflationary pressures remained low throughout 2003. In part this is due to the fact that oil prices were fairly stable – contrary to expectations of an increase due to the Iraq war. The situation didn’t last long. As you may see on the following scheme, the gasoline cost almost doubled between 2002 and 2007 from 0.45 $ to 0.85 $, due to rapid demand increases, constrained OPEC capacity,… Despite the huge increases, real prices have not reached the highs of the early 1980s (Iran-Irak war). Cost escalation of gasoline/diesel in Swaziland 90

US cent per liter

80 70 60 50

Super Gasoline

40

Diesel

30 20 10 20 06

20 04

20 02

20 00

19 98

19 95

19 93

19 91

0

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Ratio of taxes and Levy is around 30% of the selling price, very good ratio compared to European countries Wholesale selling price Customs Duty Excise Duty Less: - Total Customs & Excise Duty - Fuel Tax (Impost) - Fuel Oil Levy (Impost) - Sales Tax (14% of Import Parity + Customs Duty) - Depot Storage & Handling - Road Delivery - Import Parity Matsapa ( as above) - Industry Margins - MVA Unit Over/(Under) Recovery c/litre (BFP Basis)

(a) (b) (a+b)

543,000 0,091 3,909 4,000 40,000 20,000 44,284 2,900 8,000 312,317 32,000 24,000 55,499 Mogas 95 LRP

523,000 0,091 3,909 4,000 40,000 10,000 44,284 2,900 8,000 312,317 32,000 24,000 45,499 Mogas 95 ULP

0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 Gasoil 0.3% S

558,000 0,183 3,817 4,000 40,000 10,000 50,603 2,900 8,000 357,449 32,000 24,000 29,048 Gasoil 0.05% S

425,000

0,000

2,900 8,000 354,143 30,500 0,000 29,457 Illum Para.

In 1998, the gasoline selling price was of 36 US cents compared to 12 US cents in Egypt and 72 US cents in Rwanda (at an average level)

1.3.5

Road traffic and safety measures

The Roads Department maintains a programme of manual traffic counts on the majority of the country’s roads. Statistics reveal that on average, main roads carry 1960 vehicles per day (vpd), with growth rates in the vehicle population averaging 34% per annum. With regard to traffic on district roads, figures reveal that there are 368 vpd representing 3.9 percent of total traffic. The proportion of heavy goods vehicles (HGVs) on both types of road is approximately 15-20%. The Mbabane-Manzini Road continues to have the highest number of traffic volumes in the country at 19 870 vpd, yielding a growth rate of 6.3 percent compared to the 18 613 in the previous year. The Mbabane District has the highest ADT (average daily traffic) and maintains about a third of the country’s roads. PPER Report – Two international roads in Swaziland

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24% (772 km) of the entire road network has traffic volumes in excess of 1000 vehicles per day of which 9% (282 km) of the network carries in excess of 2500 vehicles per day. Overloading Control of Heavy vehicles The construction of the first permanent weighbridge station at Matsapha for the control of overloaded heavy vehicle is proving beneficial sine it started operating in 2003. Previously spot checks were carried out using portable weighbridges. This control measure helps in reducing the incidents of overloading and damage of the country’s roads. On average, approximately 65 percent of vehicles over the period (July to November 2003) were complying with load limits as opposed to the 33 percent recorded in the previous years. The percentage ratio of the total number of vehicles overloaded also decreased from 52 percent to 37 percent and this is quite an improvement. Despite this improvement, there is still much ground that has to be covered in changing the behaviour of most freight companies with regard to overloading. It is therefore along these lines that government has seen it important to increase the number of weighbridges at strategic points around the country. Mobile weighbridges are used to screen the other routes such as the Sugar Belts, Bhunya, Piggs Peak, Sandlane, Ngwenya and Mbabane. The overall objective is to minimize the extent of the damage on the country’s road network by overloaded heavy vehicles thereby increasing the network’s durability and also minimizes road accidents. In 2003, fines for the overloaded offender vary between E60 to E450 (US$10 to US$75). These figures have been revised upwards. Vehicle Road – Worthiness Testing Centres Government has fully recognised the importance of keeping all vehicles in a roadworthy condition in order to improve the road safety situation in the country’s road network. The roadworthiness testing centre has been moved out of the Central Transport Administration (CTA) to the Road Transportation Department for strengthening the regulation and enforcement. The testing centre has been moved to the new site at Matsapha for upgrading to SADC standards.

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New equipment has been installed and testing is now improved. The objective is to minimise the number of accidents caused by unroad-worthy vehicles. Driver Testing and Licensing Centres Government constructed driver testing centres and licences centre in all the four regions of the country. The centres have been equipped with all the testing facilities in line with the requirements of the SADC Protocol and the National Transport Policy. The centres include computerised testing system to ensure safe record keeping, enhanced driver testing and eradication of corruption especially in the issuance of licences and the relevant documentation. The computerised system also facilitates the implementation of the SADC Licences of which Swaziland is a signatory. 1.4. Institutional and Legislative framework (p 20 of CSP 2005-2009) Swaziland national transport policy Vision for Transport and overall goals, objectives and strategies The overall vision for transport in Swaziland is: “To establish a transport system that provides a safe, efficient, cot-effective and fully integrated infrastructure and operations to best meet the needs of customers, promotes economic and social development and is environmentally and economically sustainable� In line with the Vision for Transport in Swaziland, the overall goals, objectives and strategies are the following : . To meet the economic demands and socio-political needs of the country; the strategy will be to enable and encourage each mode of transport to perform its role in an effective and efficient manner; . To ensure responsible and independent decision making with public accountability; . To recognize the role of the public sector in promoting private sector investment and operations where possible, with a more commercial approach by the public sector body; . To achieve co-ordination and synergy between the activities of the public and private sectors: Numerous public and private organisations and individuals are active in the transport sector. Consequently, ongoing consultations and co-ordination between all the interested parties will be required to maximise the benefits from the sector. . To promote and ensure safety in the sector; . To ensure that transport authorities and operators are properly constituted and organised with sufficient resources to perform their functions; . To base decisions on public investments on socio-economic criteria wherever possible; . To promote integrated and fair competition within and between modes; With regard to unfair competition between modes, the strategy will be for Government to subject all operators to some type of regulatory controls (including environmental and safety controls). . To take due consideration of environmental influences on sector activities and to minimise negative aspects on the environment; . To obtain maximum national, regional and international benefit from co-operation within the region and their transport sectors including participation in the Southern Africa Customs Union (SACU) and the Common Market for Eastern and Southern Africa (COMESA); . To develop effective transport chains and efficient transhipment centres at both national and international levels; . To promote, facilitate and enhance the expansion of trade in tourism

In the transport sector, the GOS policy implementation is focused on the restructuring of the Ministry of Public works and Transport (MOPWT) by separation of policy and regulatory functions from the executive function of planning, construction, maintenance and management of the road network. The other issue is the sustainability of investment in the sub-sector by an ensuring flow of funds for maintenance, which is the greatest constraint as maintenance budget only meets 70% of maintenance needs. To this effect, Cabinet has approved for presentation to Parliament draft legislations with respect to the establishment of a Road Authority, Road Board, Road Fund and the introduction of tolls for heavily trafficked roads.

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Successful implementation of the reform agenda in the road sub-sector would improve the level of service and insure sustainability of investment. To enhance private sector participation and financing of road maintenance, the tolling of heavily trafficked Ngwenya-Mbabane-Manzini road has been announced by the Government and would form a basis for BOT arrangements in the future (end of 2007 or beginning in 2008) End of 2007 or beginning of 2008 Obligations of the Roads Agency Based on the Draft Roads Agency and Road Fund Bill (2006)The Road Agency shall : . Plan, design, construct, maintain and protect the national road network and carry out supporting research; . Draft a national roads programme which describes and justifies the Agency’s activities; . Establish and maintain strategic national road resources (human and other) and may outsource non-strategic activities; . Ensure the achievement of road related standards as laid down by the Minister; . Establish and maintain information systems to describe roads system, record progress and provide supporting management information; . Perform any function assigned to it or under any law which is necessary to achieve the objectives of this Act or for any purpose relating road traffic or road transportation. Establishment of the Road Fund The relatives resources will by affected: . Moneys collected in respect of road user charges . Moneys appropriated by Parliament; . Moneys accruing to the Fund through the sale of any assets of the Fund; . Any capital gains made and interests in respect of any project or programme; . Any donation or grand made in respect of any project or programme; . .. Determination of road user charges The Fund may from time to time after consultation with the Ministry of Finance and such parties as the Ministry of Finances may direct, … impose any one or more of the following road user charges: . A charge on any motor vehicle whether registered in Swaziland or not, in respect of the travelling distance in the course of operating such motor vehicle on a road and which may be based on the mass, length, width or height of the vehicle, or its loading or the number of axles of such vehicle, or any combination of such factors; . Entry fees in respect of motor vehicles not registered in Swaziland that temporary enter Swaziland; . Registration and annual fees in respect of motor vehicles registered in Swaziland; . A levy on every litre of petrol or diesel sold by any undertaking at any point in Swaziland and which is to be included in any determination of the selling price of petrol or diesel, as the case may be, and under any law relating to petroleum products. The Fund may impose any road user charge at different rates in respect of different classes of motor vehicles, different roads, different categories of road-users or any other basis of differentiation as the Fund may determine.

1.4.1

Technical framework (rehabilitation and maintenance)

The planning, construction, upgrading and maintenance of the roads fall within the ambit of the Roads department of the Ministry of Public Works and Transport. Urban roads fall within the ambit of the relevant city and town councils. Projects design had to conform to SADC regulations since …. The Roads department (RD) has its own maintenance units (mainly for the fixing of potholes), but more and more of the maintenance work is being outsourced to private contractors. Even routine maintenance is now outsourced to small private contractors. Private contractors (large and small) have sufficient skills and capacity to undertake large and small works. Maintenance is done through RD headquarters in Mbabane, four districts depots (one of each in Mbabane, Nhlangano, Siteki and Lubuli), fourteen road camps throughout the country and four construction units (based in Mbabane, Manzini, Nhangano and Siteki).

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The RD supervises several small, specialised operations such as a road sign shop and a pipe factory. In 2000, there are approximately 800 people employed by the RD, supported with construction equipment, transport and office facilities. The annual cost of the employees in combination with their support is between E30 to E40 million each year on contracted out maintenance activities such as resealing of paved roads, re-gravelling unpaved roads, road marking and maintenance of selected road reserves.

Paved and unpaved Road Conditions (M&R Report 2007)

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Strategic analysis (M&R Report 2007) Different funding levels (budgets scenarios) were examined to compare the various outcomes. The budget scenarios used during the analysis are described in the following table.

The funding levels investigated during the strategic analysis include only the maintenance, repair and upgrading actions that can be modelled according to stress and or traffic and/or climate.

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1.4.2

Environment management

Environmental management in Swaziland is governed by the Environmental Management Act (EMA) N°5 of 2002. The EMA establishes the Environmental Authority as a body corporate and successor of the Swaziland Environment Authority (SEA) established by the Swaziland Environment Act n°15 of 1992. The mission of the Swaziland’s development is to « ensure that Swaziland development is environmentally, economical and socially sustainable, by means of promoting sound environmental policies, practices and development, which meets appropriate national and international environmental standards ». The main function of the Authority is to provide for and promote the protection, conservation and enhancement of the environment and the sustainable management of natural resources trough the enforcement of environmental legislations. It is to ensure the incorporation of all environmental issues into Swaziland process for the purpose of achieving sustainable development. In addition to this the Authority has a wide range of powers and responsibilities which include but are not limited to: . Developing environmental policies and strategies . Monitoring trends in environmental quality . Developing and enforcing environmental assessment reports In 1997, the Authority developed the Swaziland Environment Action Plan (SEAP). This plan was developed through a consultative and participatory process. An official statement issued during the first quarter of 2006 revealed that the invasion of Chromoleana odorata – known locally as the Sandanzwa plant – was now threatening more than half of the Swaziland’s 17000 km2

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2. The Evaluation 2.1 Evaluation Methodology and Approach The Project Performance Evaluation Report about Two international roads in Swaziland is supposed to be achieved few years after implementation of the projects The complete process starts with the first appraisal of the project and ends up with the Project Performance Evaluation

Project Appraisal

Appraisal report

Project Completion

Project Completion report (PCR) PCR Note

Project Performance Evaluation

Project Performance Evaluation Report (PPER)

The PPER was based on the standard evaluation benchmarks such as relevance, efficiency, quality at the entry, efficacy, sustainability and institutional development impact.

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Due to the difficulty of gathering all necessary information about the overall context evolution including parameters such as economical development, increase of population transportation needs, new housing settlements … it has be preferred a “Before and after” approach as opposed to a “with and without” approach. The overall outcome of the project is rated in terms of benchmarks and targets that were set either at appraisal or in retrospect during evaluation. The Bank and Borrower performance are assessed through the project cycle, i.e from 1 st Project feasibility study, at appraisal and PCR (Project Contract Report). Different benchmarks definitions are explicated here below: Relevance of Project goals and objectives

Consistency with the Bank’s Country Strategy (BCS) and Bank’s policies on poverty reduction, environmental sustainability, gender equality, institutional building capacity, private sector expansion and regional integration promotion … both at the time of approval and at the time of PPER. The rational and linkages between policy and structural goals as well as project objectives need to be assessed using a retrospective logical framework

Quality at the Entry

Relevance of Project objectives and outputs in correspondence to Development Priorities and borrower’s circumstances. Questioning: Are project objectives clear, realistic, responsive to the borrower’s circumstances?

Efficacy (outcomes)

Efficacy describes the extent to which the project had achieved its stated goals, objectives and outputs and the effects of the delay on the service provider on one hand and the beneficiaries on the other end. In addition, any operational and technical difficulties encountered should be highlighted to respond to problems associated to financial, institutional or environmental aspects that may have direct or indirect impact on the benefits to the ultimate users of services. Goals and objectives have to be clearly formulated at appraisal in order to be able to make a reasonable appraisal of the project efficacy. Retrospective targets can then be set based on expected outcomes at appraisal. Assessment of the following items . Physical characteristics . Financial targets . Institutional objectives . Human resources development . Private sector development . Environmental Impact

Efficiency (outputs)

The socio-economic and environmental impacts of the project need to be factored in both qualitatively and quantitatively (if possible) so as to measure the extent of efficiency in delivering or servicing the project. Assessment of the following items . Implementation Cost and Time . Project Benefits . Economic Performance . Financial performance of the project . Sensibility analysis . Institutional development impact

Institutional Development

Critical exam of the evolution of the institutions of the sector and the executing agency.

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Sustainability

The sustainability of the executing agency as it relates to cost recovery, affordability, financial and operational viability and efficiency need to be examined. The consultant determines whether complementary measures have been taken, follow-up actions have been implemented and whether these have sustained the operations and financial performance of the executing agency. With respect to the project, an assessment needs to be made on the likehood that the project could be sustained over the intended useful life of the project. Assessment of following items . Technical soundness and maintenance . Continued Borrower Commitment . Socio-economic sustainability . Financial sustainability . Institutional, organizational and management effectiveness . Environmental impact . Resilience to exogenous factors

Bank’s Performance

Quality of services provided by the Bank during all the project phases requires evaluation. Main focus should be on the Bank’s role ensuring project quality at entry and effective services for satisfactory implementation. The adequacy of the monitoring and follow up activities of the Bank needs to be examined and particularly its contribution to the sector’s evaluation.

Borrower’s Performance

Adequacy of Borrower’s responsibilities during all project phases requires evaluation. Main focus should be on effective measures taken by the Borrower to establish a basis for project sustainability, especially and right from the identification stage, through fostering participation by the project stakeholders, in addition to its own sustained support. The level of autonomy given to the executive agency and the government commitment and support need to be critically reviewed.

The objectives and scope of the indicators are discussed in subsequent sections. The quantifiable indicators considered in the Appraisal Report are shown in the retrospective project matrix set out in Annex 4. For convenience as the 2 roads are extremely different in patterns, we will dedicate a chapter for each of the roads.

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3. Evaluation and ratings ( Ngwenya- Mbabane Road Project) 3.0 Loan Effectiveness (for the two roads) The original loan for the project was approved in November 1994 and the loan agreement was signed in May 1997. The delay in loan signature of about 24 month above the statutory limit of 180 days was due principally to GOS desire to secure other concessionary funds since they were not eligible to AfDB resources. The loan however, was made effective within four months of loan signature. Also a supplementary loan approved in October 1999 was signed in October 2001, a delay of 20 month after approval. The loan was declared effective in November 2001, one month after signature. The delay in loan signature was due to Government’s negotiations with the Bank to convert the AfDB loan from UA to a rand dominated loan.

3.1 Formulation, Implementation and reporting 3.1.1 Formulation The MR3 road (including the Ngwenya-Mbabane section located in the north west of Swaziland) is economically and strategically the most important road in The Kingdom of Swaziland. The road is an important transport corridor linking the Gauteng Region (Johannesbourg) to the Mozambique (Lomahasha border post) through Mbabane (60,000 people) and Manzini (80,000 people). Originally constructed in the 1960’s, the road necessitated rehabilitation and upgrading as it has to accommodate the vehicle mix of heavy trucks currently using the road and the anticipated future traffic. A major factor is that motorists become impatient when following the slower moving heavy goods vehicles and tend to overtake at dangerous spots. In addition, frequent heavy mists and lack of climbing lanes have resulted in several accidents. There were 39 accidents reported in 1998 of which 8 were fatal and 24 very serious. In 1992, GOS commissioned a study to carry on economic and preliminary engineering investigations to upgrade the road. The study recommended that the capacity of the road should be raised through the construction of a dual carriageway for a length of 11 km from SCOT Junction to Moshane and rehabilitation of the remaining section of the road to the border post including the provision for climbing lanes where appropriate. The objective of the project is to improve reduce vehicle operating costs (VOC) as well as reducing accidents and congestion thereby improving safety, as the goal is to stimulate tourism and agricultural production. 3.1.2 Implementation and changes in the scope of the project The commencement of the civil works contract for the Mbabane-Ngwenya Raod (section of MR3) upgrading was 1 July 1999, a delay of about 36 months compared to the original forecast date of June 1996. Consulting services for pre-contract work and supervision commenced in October 1997, a delay about 27 months compared to the original appraisal forecast date of June 1995. These activities were ongoing at the time of the supplementary loan approval.

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Three occurrences of changes had arisen in the scope of the project: .

. .

During appraisal, was highlighted the inaccuracy of original designs, tender documents and construction cost estimates which were produced by the original consultants (Danish team Carl Bro) prior to 1992. The new appointed design and supervisory consultants BCEOM reviewed the original documents in 1992. The estimates for civil works quantities, setting out, site information, geological conditions, horizontal and vertical alignments and structural components were not satisfactory, During reviews of design and tender documents, During Project civil works, when GOS decided to establish a new industrial township (Nkoyoyo) on the left and right hand sides of Mbabane- Ngwenya road between km 15 and km 18. The expected increase in traffic of heavy goods on the Motshane-Ngwenya section of the road justified the modifications of the design of this section. Consequently, it became necessary to upgrade the entire 19.3 km from Mbabane to Ngwenya to a dual carriageway instead of only 11.5 km initially forecast. The original civil works contract could not be implemented as foreseen since the works were redesigned during the tendering of the contract but fortunately before the award of the contract. Thus, the GOS requested and the Bank approved in 1999 under special circumstances that the same contractor would undertake the extra works without further re-tendering and at the same costs units. The Bank was particularly accommodative and receptive in the changes in the scope of civil works and in modifications in contracts and procurement processes in order to speed up the implementation of the works.

3.1.3 Implementation schedule After re-appraisal of the project in March 1999, completion of physical works was re-scheduled for January 2001. A delay of about 27 months occurred due to significant increase in the project scope after reapproval, continuous change in scope as the works progressed (read above paragraph) and bad weather. Substantial completion was settled on 26 April 2003 and end of defects liability period and ends of defect liability period on 26 April 2004. In 2004, it was decided to extend the project with the completion of Mbabane by-pass. In 2007, 14.3 km are completed on a total project of 19.3 km (to Maduma GSI); Ngwenya Nkoyoyo MR3 14,3

1. Actual km Completed 2. No. of Footbridges

7

3. Service Roads

21,7

4. Major Structures: bridges 5. Actual Construction Costs: Contractor Consultants 6. Routine Maintenance in average /km/year

5 E353 Million E28.417 Million

7. No. of interchanges

4

Actualized data issued from the road department

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In order to explain the progress with implementation the road could be divided into the following three sections:  Section 1 from the Ngwenya Border post up to the Nkoyoyo junction.  Section 2 from the Nkoyoyo Junction to the SCOT junction.  Section 3 from the SCOT junction to the Mountain View junction where it joins the existing freeway west of Mbabane (this section is the so-called Bypass Road). Sections 1 and 2 were supposed to have been funded under the Two International Roads project, whilst Section 3 was funded by the Bank under a separate lending operation which was approved much later. However, due to the extensive redesign of the road, the scope of the road works changed to such an extent that only Section 1 could be completed under the Two International Roads project. (This is despite the fact that the reappraisal of the project which resulted in an increase in the loan amount stipulated that the road had to be completed up to SCOT junction.) Although some of the earthworks for Section 2 were completed with funding from the Two International Roads project, the majority of the funding for this section came from the Bypass Road lending operation. Construction of Sections 2 and 3 are currently being undertaken by the same contractor (WBHO) under a different contract. A site visit confirmed that the road works on Section 2 are still not completed up to SCOT junction and that construction of a major interchange at this junction has not started. Section 2 and Section 3 (Nkoyoyo to Scot) have been subject to a reappraisal by BCEOM in 1998 thus presented to the AfDB. A delay of about 27 months in completion occurred despite reappraisal of the project and agreeing to new target dates with GOS. The delay was due to significant increase in the project scope of the project, continuous changes in scope as the works progressed and bad weather. For example rock fill quantity increased from 3,600 m3 to 143,963 m3. Mbabane

SCOT

1992

Nkoyoyo

Moshane

4 lanes carriageway 2x2 on 11.5 km

Ngwenya Single carriageway with climbing lanes

Decision in 1998: 2 lanes carriageway on 19.3 km 1998

4 lanes carriageway

Dual carriageway (7.8 km)

Based on information given by Jean Pierre Dumas, Senior Resident Engineer, BCEOM Consulting company, the project has its planning rescheduled as it appears that Section 1 of the project between Ngwenya and Nkoyoyo was about to be completed, it appeared necessary to “freeze” its 2nd section (Nkoyoyo to Scot Junction) as new design of this section of the road looked necessary (realignment, earth filling, new interchanges, …). In grey, completed sections 2003

Section 3

2007

4 lanes carriageway Section 2

Section 1

Section 1

Mbabane-by pass

In red : on a new contract signed in 2004

3.1.4 Project management, reporting, monitoring and evaluation The Projects were executed by the Ministry of Works and Construction through its Roads Department. A qualified and experienced engineer was designated to act full time as Project Coordinator. Separate consulting firms did the supervision of construction works on the project.

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The implementation of the project was monitored through monthly progress reports prepared by the consultants and quarterly progress reports prepared by the GOS in the Bank’s format. In addition, the project was monitored through regular Bank supervision missions. Pursuant to the General Conditions of Bank loans, GOS was to prepare a Project Completion Report (PCR) within 6 months on completion of the Project. Also, the project was audited by the GOS Audit Department. 3.2. Performance Evaluation and Ratings 3.2.1 Relevance of Road Project Mbabane-Ngwenya Objectives “Project objectives of the project are to reduce road transport costs by rehabilitation and upgrading roads which carry high traffic volumes in the country, reducing road maintenance and vehicle operating costs and further (goal) supporting national efforts to stimulate Private sector, tourism and agricultural production”. On the whole the project’s goals and objectives were found to be consistent with Swaziland’s National Development Strategy (1997-2022), with National Development Plans (NDPs), and with Millennium Action Plan (MAP) that is essentially the capital expenditure component of the annual budget and thus revised annually mainly on defined strategy “Improving access to Basic Services and Infrastructure”. GOS recognises that dynamic private sector is crucial for promoting growth and reducing poverty. Improving transport conditions helps strengthen the business environment, improve competitiveness of infrastructure services and further lower barriers to business activity Establishment of a Road Authority, Road Board and Road Fund may reinforce later sustainability of the project Project objectives are also consistent with the Bank’s policies on poverty reduction, environmental sustainability, gender equality, institutional capacity building, private sector expansion and regional integration promotion (fig IV : Bank Group Strategy for Swaziland page 29 CSP 2005-2009)

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In terms of sector distribution, the Bank’s lending activities in Swaziland are concentrated mainly in the transport sector, which account s for close to 60% of the Bank Group portfolio in the country followed by agriculture sector (19%), public utilities (9.8%) and social sector (7%) and then industrial sector (4.2%). The road project Mbabane-Ngwenya can be seen as one action that is servicing long term Outcome of “Providing adequate infrastructure for Poverty Reduction” servicing CSP Strategic Pillar 1 “Promoting sustainable pro-poor private sector-led economic growth”.

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3.2.2 Quality at Entry (data from the MPDE Project Matrix in 1999 – Proposal for a supplementary loan of UA 11.47 million to finance the rehabilitation and upgrading of the 2 international roads project) Physical projects objectives and outputs have probably been defined on the Appraisal report; as we haven’t been able to localise the appraisal report (dislocation of the African Development Bank from Abidjan to Tunis), we are relying on data from the re-appraisal mission (and corresponding report) undertaken in 1999 and from the PCR report in 2004) In June 1999, the MPDE Matrix (Reappraisal stage) mentioned (Annexe 1): . VOC to be reduced by at least 50% . Maintenance budgets to be reduced by 50% by 2002. . Accidents to be reduced by 50-60% Narrative description of social objectives and targets has been mentioned by no specific targets were set regarding: . Stimulate Private sector, . Stimulate tourism and agricultural production.

Definition of the project in itself is not mentioned with enough accuracy. . Characteristics of the road have been changed many times along the process – from design to works implementation … in 1997, the road project was considered as at first a simple road rehabilitation (11 km) to become, step by step a major freeway (19,3 km) from Ngwenya to Mbabane, . New SADC construction specifications weren’t considered at that time … and it happens that the consequences on road budget were significant, . As the main components of traffic (buses, heavy carriage and light vehicles) have been taken in account, apparently a complete scheme of integrated transportation system had not been conceived and is lacking … it might be important to take in account possible links between railway system and road system, . Aspects of relocation of people have not been taken in account at a correct level. Some basic data are missing, so it is impossible to run an in-depth evaluation: . The Mbabane-Ngwenya project is mainly in agricultural and livestock areas serving a population of about …. How many people within the project corridor? 255 000 including the urban poor of the Ngwenya-Mbabane corridor . The project area of influence has some established institutions of primary, secondary and technical schools and colleges. Other commercial activities to women include running and managing small farms gardening and managing stores and shops along the road project which benefit through improved delivery times of their supplies and improved access to markets…. It has been possible to detect commercial activities at the border, but the “before picture” is lacking 3.3 Achievement of Objectives and Outputs: “Efficacy” 3.3.1 Physical characteristics of Ngwenya – Mbabane (19.3 km) Design features . Road is designed to an excellent standard (1.5 m shoulders with two 2.7 m lanes in each direction) with a design speed of 120 km/h. . More expensive crushed stone (in stead of natural gravel) and premix surface (rather than asphalt) was used. This means that the maintenance cost will in the long run be much lower and the road will have a much longer service life than if cheaper materials were used. . There are newly constructed access roads along a large section of the road. These are linked to the freeway by means of interchanges. Bus stops are provided along the service roads. . Pedestrian bridges and cattle creeps are provided at frequent intervals. . The two carriageways of the entire section of the freeway are separated by a concrete New Jerseytype barrier.

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. Street lighting is provided along the entire length of the road. Usage . There are continuous settlements and industrial areas along almost the entire length of the road. . Service roads and cattle creeps appear to be popular car wash facilities. This reduces the usefulness of these facilities. Maintenance . Steel ARMCO barriers have steel instead of wooden poles. It should therefore not experience the same problems of the wooden poles. . One of the main maintenance problems are theft of fences. This means that cattle stray onto the road. . In one case a cattle grid was completely filled up with soil. This could have been done deliberately to allow cattle to cross onto the service road. If this was not done deliberately, there appears to be a maintenance problem with these. . Drainage channels are all in a good condition and appear to be kept clean of sand and debris. . Slopes are generally well stabilised and a failure was only observed in one case. This was however repaired satisfactorily. . Grass is cut well and the road surface is kept clean. (These are done by small private contractors.) Environmental issues . The same quarry and borrow pit that was used for this road is used for the construction of the Bypass Road (funded by the Bank) which is currently under construction. These facilities are now much bigger than anticipated. In the case of the borrow pit the parts that was used for the completed section has been rehabilitated. . One issue which involves a complaint by a business that its bypass clientele has reduced significantly remains unresolved. . There seem to be a traffic safety problem at the end of the freeway where it terminates at a roundabout. . Although the roundabout appears to be designed to a sufficiently large diameter, vehicles travelling at speed along the road in the direction of the border post do not anticipate an end to the freeway. Appropriate traffic calming well before the roundabout, combined with appropriate warning signs should address this problem . There are no visual evidence of damage to the road as a result of spillage of diesel and molasses. 3.3.2 Financial Targets Sub component rated highly Unsatisfactory (1.5) GOS fulfilled its commitments but African Development Bank has to restructure its initial loan: - First appraisal in 1992 (UA 11.78 millions) - Reappraisal in 1999 (UA 21.35 millions) - Cost escalation at completion in 2005 (UA 35.19 millions) - Actual construction costs for 14.3 km: E353 millions (UA 32.81 millions) - Consulting costs: E 28.41 millions The cost overrun in the project in 2005 between real cost and reappraisal cost (13.84 UA millions and about 39.3% of the project) was financed entirely by the GOS from its own funds. The cost overrun of the project is in relation with large increase in the scope of the civil works which included bridges at each of the above interchanges; additional bridges; extra service and slip roads to tie into the interchanges; extra drainage works and single slope median barrier and street lightings for the entire project; construction of cattle creeps under the new road to allow cattle easy access from one side to the other without danger to traffic.

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However, due to the extensive redesign of the road, the scope of the road works changed to such an extent that only Section 1 could be completed under the Two International Roads project. (This is despite the fact that the reappraisal of the project which resulted in an increase in the loan amount stipulated that the road had to be completed up to SCOT junction.) Although some of the earthworks for Section 2 were completed with funding from the Two International Roads project, the majority of the funding for this section came from the Bypass Road lending operation. In the life of the project, coverage of capital and maintenance costs may be achieved 3.3.3 Institutional objectives The sub-component is rated Satisfactory (3) Apparently, the logical framework did not mention specific institutional development objectives. As the maintenance of the national road assets (which includes the two international roads) is a crucial element of the operations of the Roads Department and has a significant impact on the economy of the country. To improve the selection process of economically viable road maintenance and rehabilitation projects, the Roads Department has established through the ADB financed Transport Sector Project, a computerized Road Management system (RMS). Trained assessors carry out the annual visual condition surveys for both the surfaced and un-surfaced road networks. The MPWT commissioned two studies at the beginning of 2000.The studies proposed wide-ranging reforms in road infrastructure management and financing in Swaziland. Implementation of the project commenced in April 2004 and focused on establishing the Roads Agency (RA), Roads Fund (RF), Pilot Contractor and Pipe and Sign Factory. 3.3.4 Human Resources Development The sub-component is rated highly Satisfactory (4) During the construction phase, the project provided construction related employment opportunities Under the Transport Sector Project financed by ADB, 35 candidates graduated in engineering and road transport planning Aside the project, Strategy of Roads Maintenance and Rehabilitation is at very high standards 3.3.5 Private sector development The sub-component is rated Satisfactory (4) About 20,000 people currently employed in about 650 industrial establishments in the Mastsapha industrial are greatly benefited by the improved transport services. As it is fairly uncommon, the project was redesigned taking in account the upcoming two major industrial projects in the area i.e. Makholokholo Township development (MTD) and the Ngwenya Industrial Estate (NIE) Development which will have both social impact and improve the quality of life for women. To promote decentralisation and encourage industry to locate at Ngwenya, a large-scale Factory Park is under construction as part of Government’s visionary Millennium Programme. The targeted industries are light manufacturing and processing (300 factories expected to employ 60,000 people. On problem of development must be remembered … unfortunately, the targeted textile industry is not doing well in Swaziland (competition with Asia, India, Maurice Island, …) A nearby glass-making factory is the only of its kind in the southern hemisphere, specialising in the hand-blowing of recycled glass.

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The road from Ngwenya to Mbabane eases transportation conditions for the following activities: . (Exports) Trucks to Matsapha terminal from plantations around Mbabane . (Imports) goods from South Africa Other freight: Cotton from Middleveld and Sugar from Big Bend either for Durban or Maputo by rail 3.3.5 Environmental Impact The sub-component is rated Satisfactory (3) The Swaziland Environmental Authority has qualified personnel who are implementing the policies of the Authority. An environmental impact Assessment (EIA) study carried in 1997/98 examined the environmental characteristics of the area of influence of the road and assessed impacts on biological, cultural, socioeconomic, noise, air and water environment. The recommendations of the study were incorporated into the contract into the contract documents and implemented during the rehabilitation and upgrading of the roads. The project has greatly improved safety conditions on the project roads compared to the situation prior to rehabilitation. 3.4. Efficiency 3.4.1 Project benefits Unsatisfactory (1) Private sector There are continuous settlements and industrial areas along almost the entire length of the road. Traffic The traffic raised from 4,117 vpd (1998) to 5,018 vpd (2003) that corresponds to an average increase of almost 5% per year. No data for the following period between 2003 and 2007 have been available. Reduction of number of accidents One of the main objectives of the road upgrading is the reduction of accidents. During the 2001-2003, the number of accidents per year on Mbabane-Ngwenya road has decreased from 120 to 47 (about 60%). On the Swaziland network, the number of fatalities was reduced from 355 to 229 on the same period. 3.4.2 Economic Performance Sub-component is rated Satisfactory At appraisal, the investment on upgrading the road was conducted using 1999 prices, assuming a 2 years construction period followed by 12-month defects liability period. A twenty-year analysis period (2002-2021) and a residual value of 40% by the end of 2021 were assumed. The project cost included cost of upgrading the road and user benefits emanated from savings in vehicle operating cost (VOC, reduction in travel time and fewer occurrences of accidents. Based on the comparison of economic costs and user benefits under “with” and “without” project scenarios, Economic Internal Rates of Return (EIRRs) was estimated as 37.4% for the MbabaneNgwenya Road. EIRR Recalculation at PCR (2005) In 2002, ADT on Moshane-Ngwenya road section was 4342 vehicles/day with 83% light vehicles and 17% heavy vehicles. PPER Report – Two international roads in Swaziland

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In 2003, on Moshane-Ngwenya road section, the MWPT latest traffic count was 5081 vehicles per day comprising 84% light vehicle, and 16% heavy vehicle. While the current traffic level on Mbabane-Motshane road section is almost the same as the one projected at reappraisal, the current traffic level on Moshane-Ngwenya exceeds the projected at reappraisal by about 70%. This additional traffic on the last section is attributable to the development activities associated with the incoming industrial estate in Ngwenya and the new township at Makholokholo. The available historical traffic count data on these road sections, though do not reveal any consistently increasing trend, indicate an average growth ranging between 8 and 13% per year. Based on the above, the revised EIRR works out to 20.2%, which indicates that the project is still economically viable. The main reason of this EIRR much lower is attributable to the 65% cost overrun in relation with the drastic changes in the scope of work. EIRR Recalculation at Post Project Evaluation (2007) Re-computation of the EIRR of the project based on an actualisation of the cost project at E 447 million gives an EIRR of 19.43% (less than 20%). Based on the figure, the appraisal of the socio-economic impact doesn’t look so attractive, but we may highlight those costs of reducing the road accident rate and eluded time may have used conservative appraisal methods. 3.4.3 Financial Performance of the Project FIRR to be estimated 3.5 Sustainability 3.5.1 Technical soundness (including O&M facilitation, availability of recurrent funding, spare parts, …) Sub component is highly satisfactory (4) Road is designed to an excellent standard (1.5 m shoulders with two 2.7 m lanes in each direction) with a design speed of 120 km/h. More expensive crushed stone (in stead of natural gravel) and premix surface (rather than asphalt) was used. This means that the maintenance cost will in the long run be much lower and the road will have a much longer service life than if cheaper materials were used. There are newly constructed access roads along a large section of the road. These are linked to the freeway by means of interchanges. Bus stops are provided along the service roads. Pedestrian bridges and cattle creeps are provided at frequent intervals. The two carriageways of the entire section of the freeway are separated by a concrete New Jersey-type barrier. Street lighting is provided along the entire length of the road. Drainage channels are all in a good condition and appear to be kept clean of sand and debris. Slopes are generally well stabilised and a failure was only observed in one case. This was however repaired satisfactorily. Grass is cut well and the road surface is kept clean. (These are done by small private contractors.) Maintenance in the long run The maintenance of the national road network assets is a crucial element of the operations of the road Department.

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GOS is aware of the insufficiency of maintenance and has focused on reform in the road sector (Constitution of a Road Authority and a road Fund) 3277 km of road network of which 1171 km is paved, 110 km is in the process of being paved and 1996 km is gravel roads. 84% of the maintenance budget is directed towards the gravel roads There is a shortfall in funding allocated to recurrent maintenance. One of the main problems with the maintenance of roads is that there is not a uniform allocation from year to year. The large fluctuation in the amount that is allocated makes the planning of road maintenance very difficult. It also happens that some of the allocated amount will be redirected for other purposes. Maintenance and rehabilitation Strategy has been defined (2007 M&R Report) Trained assessors conduct visual conditions surveys annually at the end of the rainy season. 3.5.2 Environmental Impact Sub component is rated unsatisfactory (2) General Environmental audits are done informally by in-house SEA personnel. It is usually done at the end of a contract when the contractor is still on sight. During civil works The main areas of concern in respect to noise and vibrations were along the entire road project, crushing plant, asphalt plant, entrance to Royal Residence and schools (Nykoyoyo, Moshane and Ngwenya Village). These concerns were due to blasting and/or compaction of earth works and layer works. The contractor took measures to minimize noise and vibrations due to blasting by recorder, which was placed near the blast and energy and recorder the sound pressure, which were below 120 decibels. Impacts of changes in the project design Substantial changes in the project design meant that the nature and scope of the project changed fundamentally. The original EIA was based on a single carriageway road that followed a particular alignment. The road was eventually constructed as a dual carriageway freeway which in places followed a completely different alignment. As a result of this the EIA could no longer be regarded as applicable, but construction nevertheless proceeded without further environmental assessment. The main environmental issue was the fact that the changes in design meant that people who were not previously affected by the road, had to be relocated, or were cut off from direct access to the road. Relocation is done in accordance of a Comprehensive Mitigation Plan. Affected people were compensated in accordance with the government’s compensation policy, but because the project had already started it proved to be a lot more difficult to compensate people who previously were not affected. This meant that the relocation cost was substantially higher than what would have been the case had compensation been negotiated during the EIA process. There were also a substantial number of complaints by people whose access were cut off during construction. It is believed that this was a result of the fact that the design was changed “on-the-run” without due consideration to all the affects that it might have. Rehabilitation of quarry and borrow pit The fact that the change in the scope of the project required a much larger volume of construction material meant that the quarry and borrow pit became much larger than what was originally PPER Report – Two international roads in Swaziland

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anticipated. In addition, the same quarry and borrow bit are being used for the further extension of the road (the so called Bypass Road which is also financed by the Bank). This meant that these facilities became much larger than what was originally anticipated. Loss of clientele One issue which involves a complaint by a business that its bypass clientele has reduced significantly remains unresolved. 3.6. Bank Performance Sub component rated Very Unsatisfactory (1.5) The Bank didn’t insure a good quality at the entry of the project approving a fairly week appraisal of the preliminary design and feasibility study of the road project. The initial preliminary design and feasibility study of the project was conducted by a Danish firm, Carl Bro, who designed the road as a single carriageway. The preliminary design did not provide adequate guidance for the detail design. BCEOM had been appointed to undertake the detail design and the construction supervision. The detail design was also for a single carriageway road, but with climbing lanes. We have been unable to identify engineering standards this design was based on, i.e. whether the design standards were provided by the GOS or whether “international” (apparently from Europe) standards were used. These two factors mainly contributed to the fact that major portions of the road had to be redesigned after the construction tender had been awarded, most of it after construction had already been started. Based on our visit on site, it appears clearly that the detailed design provides high standards equipments such as 21.7 km service roads, 4 interchanges, 7 footbridges and 5 major bridges. Insufficient follow-up (Bank and Consultant) for a project of this importance and high pressure (numerous claims) of the main constructor may have led to the observed huge budget overruns. It seems that the Bank procedure (PCR) didn’t pay enough attention to technical soundness of the project. Insincere information about the degree of project achievement giving to the Bank the feeling that the project was about to be achieved in 2005 – lead the Bank to give a new loan for construction of section 3, that is supposed to be already erected. A persistent doubt is about the relevance of the road characteristics and budget in relation with the role that is supposed to be attached with this road (corridor to South Africa). As the main burden of the road system in Swaziland is maintenance, a substantial amount of attributed loan might have been dedicated to this aspect. 3.7. Continued borrower Commitment (GOS and its executing agency MPWT) Sub component is rated Satisfactory (3) Borrower has been financing extra cost due to delays and makes constant efforts to improve the concertation process; this process - characteristic of democratic governance- is time consuming and needs a strong involvement of officials and Road Department officials. Regarding Project Management MPWT is relying on a too large extent on the consultants that did not give enough of their time for validation of choices in profiles and routes. Insufficient weight of the consultants in front of the contractor that has a natural tendency for proposing options that may give his company the best return. PPER Report – Two international roads in Swaziland

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Lack of data regarding “how much the project will end up at the completion” after all the changes; some of them don’t have yet a defined/approved cost. Regarding the process of building competences within the executing agency (MPWT) 40 engineers have been trained abroad in order to align a better scope of competences in road design and roads project management. Regarding Project Sustainability MPWT is concerned by project sustainability and make substantial efforts:  Identification of technical and financial aspects of maintenance through the implementation of the World Bank’s HDM pavement performance prediction models, while the Southern African Unpaved Road Deterioration Models are used for unpaved network.  Implementation of regular visual inspections of the roads  In 2000 Swaziland Toll Advisory Consortium (STAC) was appointed by the Ministry of Public Works and Transport to investigate the feasibility of tolling the Ngwenya-Mbabane-Manzini Road, the MR3 (project road). It was found that the project is feasible if operated as a Comprehensive Toll Road Operations and Maintenance (CTROM) contract. The feasibility of operating the MR3 as a toll road is a function of technical considerations, the legal framework requirements, financing arrangements, socio-economic conditions and institutional requirements.  GIBB Africa has been appointed by the Ministry of Public Works and Transport to commence with the procurement of tolling on the project road in accordance with the recommendations of the study which was concluded in 2001. A consortium was identified  In addition, the previously proposed drafting of the necessary legislation needs review, as does the MoPWT procurement and implementation strategy. The approval by GOS Parliament of the above is necessary to ensure that tolling is undertaken within the appropriate legal and financial environment.  GOS is in the process of preparing the final draft legislation for the establishment of the Road Fund and the Roads Agency. The toll road legislation is worthless without this legislation, as there would be no Road Fund to manage the toll income.

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4. Performance Evaluation and ratings ( Luyengo-Sicunusa Road Project (47 km) 4.1 Loan Effectiveness (for the two roads) The original loan for the project was approved in November 1994 and the loan agreement was signed in May 1997. The delay in loan signature of about 24 month above the statutory limit of 180 days was due principally to GOS desire to secure other concessionary funds since they were not eligible to AfDB resources. The loan however, was made effective within four months of loan signature. Also a supplementary loan approved in October 1999 was signed in October 2001, a delay of 20 month after approval. The loan was declared effective in November 2001, one month after signature. The delay in loan signature was due to Government’s negotiations with the Bank to convert the AfDB loan from UA to a rand dominated loan. 4.2 Formulation, Implementation and reporting 4.2.1 Formulation The Luyengo-Sicunusa road (MR4) traverses Swaziland’s wet, mountainous and is crossed by three major rivers: the Usutu (Lusutfu) River, the Ngwempsi River and Tsawela River as well as the smaller Mhalatane River. Prior to upgrading, the road was a gravel road in a poor condition with two single lane low level because of which the road used to be cut off during rainy season causing traffic disruption. The feasibility and preliminary engineering were completed in September 1990 and detailed design study completed in 1992. In conclusion of the studies, the road should to be improved to bitumen standard to reduce vehicleoperating costs, improve road safety and thereby stimulate and promote agricultural production in the area. The upgraded road with high level bridges is planned to be open all year around improving accessibility to the south-east region of the country. 4.2.2 Changes and implementation of the project Consulting services for review of design and pre-contract commenced in January 1998, a delay about 29 months when compared to the appraisal forecast date of July 1995. Commencement of the civil works was in November 1999 due to the delay in loan signature, 1 month before re-appraisal forecast The project comprises the civil works for the upgrading to bitumen standard of the 47.2 km LuyengoSicunusa road. The road will take a new alignment for the first 8 kilometres through some very steep areas. Thereafter, the route follows the existing alignment of the road where the vertical alignment is smoother, but still rolling. The new road was initially designed as a single carriageway with 3.65 m lanes, 3.5 wide climbing lanes and 2 m paved shoulders. The pavement is constituted with a double surface seal, 150 mm of crushed stone base course, 200 mm of stabilised subbed and an improved sub grade of 2x 150 mm in selected granular material. As for the MR3 road project, the estimates for civil works quantities, setting out, site information, geological conditions, horizontal and vertical alignments and structural components were not satisfactory. Additional works for the road project involved the construction of a structure to carry the grade separation where the new road crossed the old road in Manahan.

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The structure had not been included in the original design. It was a cast in situ concrete structure about 18m long and 7x4 meters in cross section. Other additional works included structural modifications of barrier protection for pedestrians, a change to the bridge beams from pre-tensioned to pre-stressed, the handrails changed from steel to pre-cast concrete, pedestrian bridge across the new MR4 on the Bhunya-Manzini road for easy and safe access for children attending the primary school and some Arrester beds to increase safety on the long steep downhill sections of the road. A delay of about 6 months occurred in Luyengo-Sinacusa road upgrading project completion. The delay to project completion relate to the increase in the scope of the civil works which included a major realignment for the road at the northern end near of Luyengo that reduced the road length by approximately 5.9 km and avoid some of the steepest terrain traversed by the old road. Completion of the project was 25 July 2002. MR4 47

1. Actual km Completed 2. No. of Footbridges

2

3. Service Roads

None

4. Major Structures: bridges

3

5. Actual Construction Costs: Contractor Consultants 6. Routine Maintenance in average /km/year

7. No. of interchanges

E163 Million E8.1 Million E15 000 None except for 1 round about

Actualized data issued from the road department

4.3 Achievement of Objectives and Outputs: “Efficacy” 4.3.1 Physical characteristics of Nguyengo-Sinucusa Road (visit on July 11th 2007) All the stated physical outputs of the project at appraisal were either met or exceeded. This component is therefore rated very satisfactory (4) A summary of the specific outputs is provided here-below Design features (visit to the project site in July 2007) . Road is designed to an excellent standard (1.5 m shoulders with 2.7 m lanes) with a design speed of 120 km/h. The road narrows down across bridges (even the new ones) where the shoulders are dropped. . More expensive crushed stone (in stead of natural gravel) and premix surface (rather than asphalt) was used. This means that the maintenance cost will in the long run be much lower and the road will have a much longer service life than if cheaper materials were used. . There is ample provision for bus stops. These have brick shelters and stopping lanes for buses. In some cases pedestrian bridges are provided (e.g. near school). . There are a number of arrester beds at the end of steep downhill sections. . The road through the town of Mankayane was not part of the project, but it was surfaced later by the roads department. Maintenance . Steel ARMCO barriers seem to fall over by themselves. This is due to poor quality locally sourced poles. The treatment is not good enough and the poles rot where they are planted in the ground (see Slide 1 and 2). This problem is being addressed by replacing wooden poles with steel (however not on this road). See slide 3.

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.

One of the main maintenance problems are theft of fences. This means that cattle stray onto the road. . The fence around the quarry was also stolen, which means that it poses a safety risk to people and animals that venture to close. The quarry is however situated in a planted forest and there should be little reason for people and animals to be there. . In some cases gates to adjacent properties are left open, with the result that animals stray onto the road. There are cattle grids in stead of gates in some instances. . Drainage channels are all in a good condition and appear to be kept clean of sand and debris. . Grass is cut well and the road surface is kept clean. (These are done by small private contractors.) . At some of the minor entrance roads the bell mouth was take surfaced far enough. It was apparent that this creates problems with drainage as the water runs down the gravel road onto the surfaced road. It also deposits gravel onto the road, which could pose a safety hazard. The engineer also confirms that mud is deposited onto the road as heavy vehicles from the forests turn directly from the gravel road onto the surfaced road. There is thus no opportunity for them to clean their wheels on a surfaced section of the side road. . There seem to be a problem with theft of gravel from the arrester beds (we were told this by the engineer and when we visited the site all the arrester beds were fully operational). In one instance a truck driver who lost the brakes on his vehicle tried to use an arrester bed which was not operational. This led to a considerable loss in livestock and serious injury. He is now suing the government for not properly maintaining the facility. Environnemental issues .

The representative of the roads department indicated that the SEA did inspect the quarry when the contractor was on sight and indicated that no further work is required to the quarry. After the contractor had left someone else from SEA indicated that rehabilitation is required.

.

After a visual inspection of the quarry the concerns expressed by to Director of SEA about the state of the quarry seem to be unfounded. The quarry is not visible from the road and therefore has minimal visual intrusion. The quarry is surrounded by planted forests and is completely surrounded by trees. There are no settlements nearby. Unlike borrow puts it is almost impossible to do more to rehabilitate the quarry.

.

A major concern at the quarry was that the entire fence was apparently stolen. This means that the quarry could pose a safety hazard to people and animals (although this is not a major problem due to their absence).

.

Even though the road has been open for a number of years there are still unresolved claims from residents whose houses have cracked. This seems to be a thorny issue because houses are often of a poor built quality and therefore it is common for cracks to appear naturally or from the slightest disturbance. Due to the fact that these claims were made after the contractor has left the site, it cannot be covered by the contractor’s insurance. In some cases the contractor’s insurance refused to pay claims during construction because they were not valid. However, this can easily become a political dilemma and the roads Department have few options but to compensate residents. They have agreed that only residents within 300m of the road will be considered for compensation.

4.3.2 Financial Targets The real cost of the project at re-appraisal matches the cost estimate at appraisal of the road project (minus 3.96 UA millions) due to the choice of a shorter route for the road project. Therefore, this sub-component is rated Satisfactory (3).

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4.3.3 Institutional objectives The sub-component is rated Satisfactory (3) Apparently, the logical framework did not mention specific institutional development objectives. As the maintenance of the national road assets (which includes the two international roads) is a crucial element of the operations of the Roads Department and has a significant impact on the economy of the country. To improve the selection process of economically viable road maintenance and rehabilitation projects, the Roads Department has established through the ADB financed Transport Sector Project, a computerized Road Management system (RMS). Trained assessors carry out the annual visual condition surveys for both the surfaced and un-surfaced road networks. The MPWT commissioned two studies at the beginning of 2000.The studies proposed wide-ranging reforms in road infrastructure management and financing in Swaziland. Implementation of the project commenced in April 2004 and focused on establishing the Roads Agency (RA), Roads Fund (RF), Pilot Contractor and Pipe and Sign Factory. 4.3.4 Human Resources Development The sub-component is rated highly Satisfactory (4) During the construction phase, the project provided construction related employment opportunities Under the Transport Sector Project financed by ADB, 35 candidates graduated in engineering and road transport planning Aside the project, Strategy of Roads Maintenance and Rehabilitation is at very high standards 4.3.5 Private sector development Very unsatisfactory (1) No clear strategy of private sector development No implementation of measures regarding private development objectives (either industrial or linked to tourism) About Tourism More than 70% of the tourists come by road either by self driving or shared minivans Road improvement contributes to tourism attraction (security of the roads, access to tourism offers or products): 1st road : Ngwenya-Mbabane . Great majority of tourism offers settled around Mbabane-Manzini 2nd road : Sicinusa-Manzini (existing) . Scenic drive . Settlement of tourism offers: naturalism project with restaurant facilities and Swazi village . Constraints: Border gate closes at 6.00 PM necessity of enlarging open hours (7.00 AM to 22.00 PM) To be done: . The road may benefit from the forecast extension from Sicunusa to Nhalango . Implementation of scenic spots with facilities to have rest and craft shops that guaranty revenues to local communities . Communication about circular roads - Sicunusa-Manzini-Mahamba from Piet Retief - Manzini Sicunusa- Nhalangano- Manzini - Sicunusa as an entrance to Kruger Park via Swaziland PPER Report – Two international roads in Swaziland

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At a larger scale, as Tourism Policy is concerned . Tourism as a major actor in Road Planning . Definition of a Tourism State Account in collecting information from Customs, Central Bank of Swaziland, Statistics, ‌ . Try to enlarge the time of stay in Swaziland of Tourists . Necessity of preparing a Tourism Masterplan including : - Marketing of new products - Definition of Tour routes, - Tourism signage, - Guides training - Improve offers to domestic tourism

S O U T H A F R IC A

M O Z A M B IQ U E

N gw enya

Anne

L uyen go

S W A Z IL A N D I n te r n a tio n a l b o u n d a r y D is tric t b o u n d a ry N a tio n a l c a p ita l D is tric t c a p it a l R a ilro a d Road

P r oje c t R o a d s

S O U T H A F R IC A

K ilo m e te rs M ile s

Richards Bay or Durban

In the case of

T h is m a p h a s b e e n d r a w n b y th e A fr ic a n D e v e l o p m e n t B a n k G r o u p e x c lu s iv e ly f o r th e u s e o f th e r e a d e rs o f th e re p o rt to w h ic h it i s a tta c h e d . T h e n a m e s u s e d a n d th e b o r d e r s s h o w n d o n o t im p ly o n th e p a rt o f th e B a n k a n d its m e m b e rs a n y ju d g e m e n t c o n c e rn in g t h e le g a l s ta tu s o f a te r r ito ry n o r a n y a p p ro v a l o r a c c e p ta n c e o f th e s e b o rd e rs .

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Impact on agriculture The project influence area (PIA) of the road which is an important agricultural area in Swaziland has greatly benefited from the availability of an all-weather road for transport of its agricultural produce and inputs. Production of maize has increased from 10,872 tonnes in 1994 (appraisal year) to 18,432 tonnes in 2003. The upgraded road provides efficient transport (all-weather road with about 50% reduction in travel time) for moving maize to markets in Matsapha/Manzini and milk collected by the Swaziland Dairy Board for processing at Matsapha. Vegetable grown in the small scale farms (mainly by women) are finding better markets in Matsapha/Manzini, thereby increasing the income level of rural poor. Impact on agro-industry Other impacts of the Lugenyo – Sicanusa road are better transportation conditions for exports and imports: . (Exports) Pine logs or pine pulp from Usutu pulp company (nb of trucks per day, nb tons per year ?) Final destinations are either Richards Bay or Durban; The Company formerly owned by CDC is actually owned by SABI; . (Exports) At a smaller scale, Eucalyptus used for mining timber, poles or pulp … same destinations . (Imports) Goods from Piet Retief to Manzini or Mbabane. It appears that major constraint for these activities is due to Border gate closing at 6.00 PM and opening at 8.00 AM, so trucks are going to Mahamba’s border post (7.00 AM-10.00 PM). There is a need to increase opening hours => improvement of border’s post infrastructure on Swazi side. It appears that the 2 border posts could effectively gathers in one.

S O U T H A F R IC A

M O Z A M B IQ U E

N gw enya

Pine for pulp Usutu pulp company

Maputo

L uyen go

Goods from Piet Retief Richards Bay or Durban

S W A Z IL A N D I n te r n a tio n a l b o u n d a ry D is tric t b o u n d a ry N a tio n a l c a p ita l D is tric t c a p ita l R a ilro a d R oad

P rojec t R o a d s

S O U T H A F R IC A

K ilo m e te rs M ile s

Richards Bay or Durban

T h is m a p h a s b e e n d r a w n b y th e A fr ic a n D e v e l o p m e n t B a n k G ro u p e x c lu s iv e ly f o r th e u s e o f th e re a d e r s o f th e re p o r t to w h ic h it is a tta c h e d . T h e n a m e s u s e d a n d th e b o r d e rs s h o w n d o n o t i m p l y o n th e p a rt o f th e B a n k a n d its m e m b e rs a n y ju d g e m e n t c o n c e r n i n g t h e le g a l s ta tu s o f a te rr i to ry n o r a n y a p p ro v a l o r a c c e p ta n c e o f th e s e b o rd e rs.

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4.3.5 Environmental Impact The sub-component is rated Satisfactory (3) The Swaziland Environmental Authority has qualified personnel who are implementing the policies of the Authority. An environmental impact Assessment (EIA) study carried in 1997/98 examined the environmental characteristics of the area of influence of the road and assessed impacts on biological, cultural, socioeconomic, noise, air and water environment. The recommendations of the study were incorporated into the contract into the contract documents and implemented during the rehabilitation and upgrading of the roads. The project has greatly improved safety conditions on the project roads compared to the situation prior to rehabilitation. 4.4. Efficiency 4.4.1 Project benefits Unsatisfactory (1) Private sector Settlements are small and scattered. There is only one significant town (Mankayane) along the road. Not many pedestrians and cyclists were observed along the road. A large portion of the road is abutted by planted forests. Apparently these are privately owned. Logs are taken to across the border to South Africa for milling. Agriculture appears to be mainly pastoral land. No evidence of large scale commercial vegetable or crop farming. Traffic The average number of vehicles passing through the border post is about 500 per day. On exceptional days there could be double that amount. There are negotiations underway to open the border post for longer hours (currently open between 08:00 and 18:00). This will increase tourism as many South Africans depart after work from Gauteng for weekend trips. They are therefore not in time to go through the border post and may as a result chose other destinations. Reduction in road accidents One of the main objectives of the road objectives was reduction in road accidents. During the period 2001-2003, the number of accidents on Luyengo-Sicunusa road has decreased from 147 (2001) to 54 (2003) indicating 63% reduction. 4.4.2 Economic Performance Sub-component is rated Satisfactory At appraisal, the investment on upgrading the road was conducted using 1999 prices, assuming a 2 years construction period followed by 12-month defects liability period. A twenty-year analysis period (2002-2021) and a residual value of 40% by the end of 2021 were assumed. The project cost included cost of upgrading the road and user benefits emanated from savings in vehicle operating cost (VOC, reduction in travel time and fewer occurrences of accidents. Based on the comparison of economic costs and user benefits under “with” and “without” project scenarios, Economic Internal Rates of Return (EIRRs) was estimated as 18.2% for the LuyengoSicunusa Road.

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EIRR Recalculation at PCR (2005) In 2004, the MWPT latest traffic count is 1046 vehicle per day comprising 92% light vehicle, 3% medium vehicle and 5% heavy vehicle. This indicated more than a 2-fold increase in traffic as compared to 1998 ADT (at reappraisal) which translates to about 17% average growth in traffic during the period 1998 to 2004. However, discussions with the officials of MPWT indicated that this high growth in traffic observed during 4-5 years after opening of the upgraded road would slow down and stabilise around national average of 4% per year witch would be appropriate for making long term projections. The revised EIRR is 31.3% which is much higher than the reappraisal EIRR of 18.2% due to very high growth in traffic. EIRR Recalculation at Post Project Evaluation (2007) As traffic data are in full line with expected, the EIRR stays at the same level. 4.4.3 Financial Performance of the Project FIRR to be calculated 4.5 Sustainability 4.5.1 Technical soundness (including O&M facilitation, availability of recurrent funding, spare parts, ‌) Sub component is highly satisfactory (4) Road is designed to an excellent standard (1.5 m shoulders with 2.7 m lanes) with a design speed of 120 km/h. The road narrows down across bridges (even the new ones) where the shoulders are dropped. More expensive crushed stone (in stead of natural gravel) and premix surface (rather than asphalt) was used. This means that the maintenance cost will in the long run be much lower and the road will have a much longer service life than if cheaper materials were used. There is ample provision for bus stops. These have brick shelters and stopping lanes for buses. In some cases pedestrian bridges are provided (e.g. near school). There are a number of arrester beds at the end of steep downhill sections. The road through the town of Mankayane was not part of the project, but it was surfaced later by the roads department. Drainage channels are all in a good condition and appear to be kept clean of sand and debris. Slopes are generally well stabilised and a failure was only observed in one case. This was however repaired satisfactorily. Grass is cut well and the road surface is kept clean. (These are done by small private contractors.) Maintenance in the long run The maintenance of the national road network assets is a crucial element of the operations of the road Department. Maintenance and rehabilitation Strategy has been defined (2007 M&R Report) Trained assessors conduct visual conditions surveys annually at the end of the rainy season.

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4.5.2 Continued borrower Commitment Sub component is rated unsatisfactory (2) GOS is aware of the insufficiency of maintenance and has focused on reform in the road sector (Constitution of a Road Authority and a road Fund) 3277 km of road network of which 1171 km is paved, 110 km is in the process of being paved and 1996 km is gravel roads. 84% of the maintenance budget is directed towards the gravel roads There is a shortfall in funding allocated to recurrent maintenance. One of the main problems with the maintenance of roads is that there is not a uniform allocation from year to year. The large fluctuation in the amount that is allocated makes the planning of road maintenance very difficult. It also happens that some of the allocated amount will be redirected for other purposes. 4.5.3 Environmental Impact Sub component is rated very satisfactory (4) This road is designed to an excellent standard (1.5 m shoulders with 2.7 m lanes) with a design speed of 120 km/h and can be defined as a scenic road (planted forests, pastoral landscapes, some crop and vegetables farming‌) This road might be of great utility in case of forest fires as it allows fire fighters to improve substantially access conditions. There are negotiations underway to open the border post for longer hours (currently open between 08:00 and 18:00), measure that might increase tourism as many South Africans depart after work from Gauteng for weekend trips. They are therefore not in time to go through the border post and may -as a result- chose other destinations.

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5. Main Findings and lessons 5.1 Projects are extremely different in objectives and characteristics Ngwenya-Mbabane road can be qualified on a main road in the corridor linking South Africa to Mozambique. Its design allows this freeway to fulfil its role during the new 30 years to come, as it could cope with double fold traffic (10.000 vpd). It is, in many ways, a very astonishing road project in Africa, as it can be considered as an outstanding equipment, even on American or European standards. Sinunusa-Luyengo road has the common features of rural roads, but it was designed at very high standards levels. 5.2 Necessity of a multimodal transportation Scheme (General Transportation Master plan including rail and airports) Swaziland National Transport Policy (2001) “Inter-modal transportation is defined as the concept of transporting freight and passengers in such a way that all the parts of the transportation process, including information exchange are efficiently connected and co-ordinated, and offer flexibility. As such, intermodal transportation should not be considered as just a matter of the hardware and software involved in transportation movements. It is more a process of applying a systems approach to the business of transportation. This will, however, require an appreciation by the transport operators and user groups of the advantages of logistics management, and a degree of skills and knowledge of the transportation and logistics management process. A prerequisite to the integration of transport is that all components of the transportation process are reliable and operate efficiently, that links between the different modes work well, and that flexibility exists to accommodate changes in routing all modes when alternative business opportunities arise. It also requires that the transfer between modes operate smoothly to minimise cost and inconvenience. While the concept of inter-modalism is relatively new, world wide, it is very much in its infancy in southern Africa. The reason being, those necessary and sufficient conditions do not exist to permit easy development. Major contraints fall into two main categories: • Lack of suitable infrastructure and facilities; and • Lack of appropriate documentary/administrative structure, including legislation. This situation is especially true with regard to Swaziland where the concept of integrated transport has previously not been considered”. Actually there is no plan to transfer freight from road to rail as many agro-industrial products may benefit or rail transportation such as Pulp, Sugar, Wood, Citrus … with terminal either in Durban or Richards bay or Port Elisabeth It seems very important to design connecting facilities between rail and road system either for freight or people transportation. The design of MR3 road and huge dedicated budget give the feeling that a Multimodal transportation Scheme might be of some use for Swaziland.

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5.3 Needs of coherent measures that could reinforce implemented road projects Road projects impacts can be reinforced by launching economic development projects at the same time. As it is fairly uncommon, Ngwenya-Mbabane road project was redesigned taking in account the upcoming two major industrial projects in the area i.e Makholokholo Township development (MTD) and the Ngwenya Industrial Estate (NIE) Development which will have both social impact and improve the quality of life for women. The targeted industries are light manufacturing and processing (300 factories expected to employ 60,000 people) The other road project demonstrates a lack of coherent measures as one of the main constraints is the early closing hour of the Sicunusa border post. This restricts the number of weekend and even day visitors. Negotiations are underway with South Africa to operate a 24 hour border post at Ngwenya. There are, however, a number of internal, i.e. between Swazi ministries, issues that have to be resolved before South Africa could be approached to increase the operating hours at the Sicunusa border post. The road can be consider as a scenic road and still now no facilities are offered to the tourists for rest, have a diner, camp or visit local nearby villages. 5.3 Necessity of improving the first steps of design of the projects

Necessity of pre-design studies at an early stage It appears that a lot of overrun costs and projects defects could be avoided or at least reduced by reinforcement of impact studies and pre-design studies at an early stage. At the contrary, when projects are at the work stage, all changes lead to planning delays, claims from the Contractor and budgets overruns. Project management should be organised so that environmental matters are considered, gathered, analysed, and weighed and have a timely influence on the planning, budget and design of the road project. PPER Report – Two international roads in Swaziland

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Just as good road project planning, management and execution requires well trained professional transportation engineers, technically credible and environmentally sensitive, road EA's require experienced environmental professionals supporting the engineering team. Such personnel should be brought into the project development process at a very early stage. Impact of SADC road construction norms It could be noticed that SADC new construction norms had a drastic impact in redesign of the roads with integration of new security levels. Nevertheless, road design integrated an ample provision for bus stops with brick shelters and stopping lanes for buses. In some cases pedestrian bridges have been provided (e.g. near school) and there are a number of arrester beds at the end of steep downhill sections. Taking in consideration these buses stops and lanes, Ngwenya-Mbabane road deserves a good rank on the best designed roads in Southern Africa. Changes in design and impact on number of people to be relocated The main environmental issue was the fact that the changes in design meant that people who was previously not affected by the road, had to be relocated, or were cut off from direct access to the road. Relocation is done in accordance of a Comprehensive Mitigation Plan. Affected people were compensated in accordance with the government’s compensation policy, but because the project had already started it proved to be a lot more difficult to compensate people who previously were not affected. This meant that the relocation cost was substantially higher than what would have been the case had compensation been negotiated during the EIA process. There were also a substantial number of complaints by people whose access were cut off during construction. It is believed that this was a result of the fact that the design was changed “on-therun” without due consideration to all the affects that it might have. Consultation of people Consultation is important for both urban and rural location. It enables road project proponents to identify potential impacts as well as local sources of information and knowledge, to highlight community concerns about the effects of road changes on lifestyles and welfare, and to encourage public participation in the development of workable solutions. Taking in account of urban sections within the project If the urban areas at the end of the road are in fact an integral part of the project they should be included in any EA. For various practical reasons, however, urban areas are often excluded from projects. This is unfortunate as later there may be traffic problems which are the result of a larger capacity road feeding into a lower capacity urban arterial (congestion, road safety, restricted access, etc.) which requires remedial actions that are far more costlier than earlier, preventative measures would have been, provided there had been a thorough examination of these urban nodes. A recent example of this sort of problem in Swaziland is the identification for the need to upgrade the By-pass Road within Mbabane to cater for the expected increase in traffic generated by the increased capacity of the new Mbabane-Ngwenya road (MR3). A similar problem exists in Manzini, where traffic from Matsapha flowing into Manzini from the dual carriageway becomes congested within Manzini itself. There are many cases where it is desirable to include all urban sections in a road project through which a road passes and in which it ends.

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EA and road project development A growing number of development planners and managers now recognise that EA is an excellent preventative planning tool, provided it is implemented early in the project development sequence. EA does generally have three objectives:  To present managers and decision makers with a clear assessment of potential impacts which a project may have on the overall environment  To apply to a project a methodology which assesses and predicts impacts and provides: (a) The means for impact prevention and mitigation, (b) The enhancement of project benefits, (c) The minimisation of long-term impacts,  To provide a specific forum in which consultation is systematically undertaken in a manner that allows stakeholders to have a direct input to the environmental management process. EA is a legal requirement in Swaziland for all large construction projects and should therefore be provided for from the outset in the budget and planning of all road projects. Take the new Ngwenya-Mbabane road. Much has been said in the press over the tendering procedure to appoint a contractor for the works, yet nothing is mentioned about the totally inadequate environmental impact assessment and unusable and very costly mitigation plan that has been done for that project. This project will no doubt be delayed by the need to correct the EA and its mitigation plan and the "environmentalists" will be blamed for the delay. Yet all this could have been avoided by following an EA process with consultation and the involvement of specialists. Stricter monitoring of compliance is needed if road projects are to achieve the long term aims of the National Development Strategy - sustainable economic development. Where is the sense in constructing multi-million Emalangeni roads if the negative environmental impacts have to borne by the affected communities, users and eventually central government to rehabilitate, at their own expense, the mistakes of the designers and contractors?

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Changes in the scope of work (Budget Director) To be done (lessons) . Planning of the project at a country level . Extensive consultation of people potentially impacted . Taking in account of forecasts and needs of Tourism, Agriculture, Small business, … . Cost escalation … may double the forecast investment but at least “get value for the invested money” . Problem of maintenance: left behind . (François Botes) Necessity of having a General Transportation Master plan including roads, rail and airports …. Actually there is no plan to transfer freight from road to rail as many agro-industrial products may benefit or rail transportation such as Pulp, Sugar, Wood, Citrus … with terminal either in Durban or Richards bay or Port Elisabeth To be implemented . A road management plan It is necessary that Budget may be informed of the maintenance programme to be able to take it in account in the country’s budget. It is thought that the road department might not inform the Budget on purpose . Two different budgets have to clearly separated: Road Investment and Road Maintenance . Road Fund may gather resources from Toll fees, Fines (drivers that bump central rails or New Jersey barriers), Truck stops fees. Possibility of using a percentage of taxes on diesel, gasoline mentioned but without any commitment of the Budget Director. Issue of cost . Proper costing is critical (Quantum and quality) . Swazi qualified engineers are necessary => in the contract, 20 engineers had to be trained … almost all of them depart either for private companies or other government department. . Pay the greatest attention to the content of preliminary design Issue of project design Complexity of the project has been underestimated (it appears that the project might be difficult to run even in a very developed country):  Take in account of the global project as it may be shaped in medium or long run … alignments, adapted radii in relation to authorized speed, space between interchanges, SADC road norms are more stringent than European road norms …more similar to US road norms.  Identify all poaches of people to be resettled and evaluate the cost of a Comprehensive Relocation Plan … define and communicate the rules to be observed to compensate the relocated people Settlement issues . Problem of land tenure in Swaziland . Extensive consulting of people . Problem of preventing homestead mushrooming . Richmond development plans for an organized mapping of zones Potential CBD (?) Usage of the road . Lack of maintenance plan . Swazi Project site manager not there . Forecast and monitoring of the project (objectives for Tourism, Agriculture …) PPER Report – Two international roads in Swaziland

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Annex 0 Two International Roads in Swaziland Basic data on road projects

Basic data about Mbabane- Ngwenya road project Project changes

1998 Project at appraisal

1999 Project at reappraisal

idem

idem

June 1995 June 1996 June 1998 + 12 months

October 1997 (+ 27 months) 1 July 1999 (+ 36 months) 26 April 2003 + 12 months

Scot Junction to Moshane

Ngwenya - Mbabane

Ngwenya - Mbabane

Length of the project

11 km

19.3 km

19.3 km

Ngwenya Border Post to Motshane

Dual carriageway Provision for Climbing lanes Dual carriage-way

Two lane-carriageway

Four-lane carriageway

Four-lane carriageway

Four-lane carriageway

none

none

Five grade separated interchanges With slip roads to tie into the interchanges Bridges over the interchanges Additional bridges over Motshane river and Railway bridge

Objectives Planning of the project Consulting services Start End of construction End of defect liability General Description Fromm -- to

Moshane to Scot Scot to Mbabane Interchanges

1988 Economic feasibility and preliminary engineering study Increase in the capacity of the road

Bridges

. Parking bays for commuter vehicules . Street lighting Project Costs and Efficiency Civil works Supervision Total Traffic data EIRR

Not available data

. Paved sidewalks . Pedestrian footbridges . Cattle creeps . New jersey barriers

Non available data

. Pavement

Not defined at this stage

Construction Caracteristics . Lanes description

3.7 m width and 2m wide paved shoulders 50 mm asphalt concrete on 150-200 mm crushed stone base in the urban section of Mbabane 6 at strategic locations 3

Ngwenya- Mbabane Section 1 completed from Ngwenya to Scot 14,3 km 5 km are to be completed completed completed To be completed 21,7 km of service roads 5 bridges 4 interchanges 2 idem idem 7 footbridges

x

Decision made at works stage x

x

x

UA 40.58 million UA 2.51 million UA 43.09 million

UA 49.15 million UA 3.82 million UA 52.97 million

4117 vpd 37.4 %

20.2%

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2007

E 381 Million assumed to raise at 447 E million > 5081 vpd (2003) 19.43%

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Basic data about Project road 2: Luyengo-Sicunusa road Projects changes

Objectives Planning of the project Start End of construction End of defect liability General Description From -- to Length of the project

1992 Economic feasability and preliminary engineering study Road upgraded to bitumen standard with a view of reducing VOC

1999 Project at appraisal

2004 Project at reappraisal (PCR)

idem

idem

January 1998 25 July 2002 (+29 months) 25 July 2003 Luyengo-Sicunusa 47.2 km

idem 47.2 km

. Lanes description . Climbing lanes . Paved shoulders . Pavement

3.65m wide 3.5 m wide 2 m wide

. Pedestrian footbridges . Underpass . Street lighting . Arresterbeds . Cattle creeps Costs and Efficiency Civil works Supervision Total Traffic data EIRR

Not avaiable data

2 lanes bitumen road none Post-stressed bridge beams Handrails in steel

Not available data

Nb of lanes 2 lanes bitumen road Interchanges none Bridge Handrails Construction Caracteristics

UA 40.58 million UA 2.51 million UA 43.09 million 18 .2%

31.3%

PPER Report – Two international roads in Swaziland

idem 41.3 km New alignment for the first 8 km => minus 5.9 km 2 lanes bitumen road none Prestressed bridge beams Handrails in precast concrete

idem idem idem double bituminous surface treatment 150 mm crushed stone base Improved subgrade of 2x150 mm in granular material Across the new MR4 on the BhunyaManzini road At Mankayane with highest populated settlement At Mankayane and at Luyengo Increase of security on long steep downhill sections x E163 million E8.1 million E171 millio 600 vdp instead or 400 vdp 35.19%

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Annex 1 Two International Roads in Swaziland PCR Report October 2004

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ANNEX 2.1 : PROJECT PERFORMANCE RATINGS (1/3) Project Loan n° Country: Swaziland Road Project: Mbabane-Ngwenya road (19,3 km) N°

Component indicators

1 i)

Relevance and quality at entry assessment Consistency with country overall development strategy (CSP 2000-2005) (CSP 2005-2009 page 26 : Mbabane by pass)

ii) iii)

Consistency with Bank Assistance Strategy Macro-economic Policy

4 4

iv)

Transport Sector Policy

2

v) vi)

Public Policy Reform Poverty Reduction

4 4

vii) viii) ix) x) xi)

Social and Gender equality Environmental Concerns Institutional Development including Restructuring Private Sector Development Regional Economic Integration

4 3 3 3 4

xii)

Quality at the entry (including demandingness, complexity, riskyness, ect, ..)

2

PPER Report – Two international roads in Swaziland

Rating (1 to 4) 3.33 3

Remarks/comments Out of the scope of this project performance evaluation, missing data Satisfactory Goals are consistent with overall development strategy (CSP,SNDS, SNDP) CSP 2000-2005 : No available data CSP 2005-2009 : Evaluation of the overall strategy is out of the scope of this project performance evaluation Objectives : Improving the network and contributing to poverty reduction and private sector promotion Outputs :Efficient and cost-effective Outcomes : Increase in the upgraded roads in Swaziland by 10% in 2006 (achieved) Overall growth in traffic by 4 % (could be checked through an analysis of the2007 M&R Report) Conforms to assistance strategy of CSP 2005-2009 .. (CSP 2000-2005 not available) In support to macro-economic and poverty reduction policy . The project contributes towards providing an efficient and cost effective transport for both national and internal traffic within the country. Apparently comprehensive description of sector goals and objectives is lacking The project reached some of the sector goals mentioned in National Transport Policy (March 2000) : . Meet the economic demands and socio-political needs of the country . Ensure safety in the sector, . Facilitate and enhance the expansion of trade and tourism, But not reached the following objectives : . Be part of and integrated transport system, . Bring fair competition within and between modes … In coherence with the public policy reform (Road Authority, Road Board, Road Fund) In line with PRSP Restructuration of informal settlements in the road corridor Better access to education in using the new road infrastructure Defined as an objective in the CSP , NDP and PRSAP Apparently, lack of environmental specifications during the first project definition Institutional components helped to sustain and manage the project (Road Authority, Road Board, Road Fund) Infrastructure supports private sector during construction and later in maintenance Defined in Swaziland Transport Policy Upgrading part of the main road to South Africa and Mozambique with positive impacts on development of trades between the 3 countries Failed in understanding of the project (+) Good integration of heavy and light vehicles at reappraisal (new lines for heavy vehicles) (--) Failed to define appropriate road characteristics … starting with a simple road rehabilitation and ending with a magnificent freeway (-) Failed to integrate (foresee) the technical and financial constrains of new SADC construction specifications (-) Failed to recognise clearly environmental concerns and problems of people relocation needs. (-) Doubts about content of Environmental Impact Assessment (EIA) in 1997/1998 or about the way that its recommendations were incorporated in the contracts documents or integrated by the Road Department (to be checked)

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ANNEX 2.1 : PROJECT PERFORMANCE RATINGS (2/3) Road Project: Mbabane-Ngwenya road (19,3 km) N°

Component indicators

2 i)

ii)

Achievement of objectives & outcomes (« efficacy ») Policy Goals - Increase the total length of roads carrying high traffic volumes - Overall growth in traffic - Socio-economic welfare improved in the project areas - Reduction in congestions and accidents Physical objectives (outputs)

iii)

Outcome Performance

iv)

v)

- reducing VOC by at least 50% - increase in the traffic volume - reduction in maintenance cost (minus 50% by 2002) - reduction in congestions and accidents (50-60%) Financial Targets - Financial viability - Cost recovery - Restructuring - Other (specify) Institutional objectives Government and Road Department

Rating (1 to 4) 3 3 3 3 3 4 3

3 3 3 4 3 1.5 2 1 3

vi)

Social objectives and targets

3

vii)

Human Resources Development

4

viii)

Private sector Development objectives

4

xi)

Environment objectives

2

PPER Report – Two international roads in Swaziland

Remarks/comments Out of the scope of this project performance evaluation Satisfactory Satisfactory - Contribute with only 14,3 km of MR3 (19,3 km at reappraisal) - Traffic statistics - Goal reached -… Satisfactory As the physical objectives were changed along the project life, physical objectives are far better that the ones defined at appraisal and reappraisal with a cost overrun of 65%. The road project is not achieved (14,3 km instead of 19,3 km) Satisfactory The project met most of its quantitative and qualitative objectives. It achieved its stated objectives - VOC : reduced by 20%-40% instead of 20%-50%, - Traffic volume is 5000 vpd ( 84% light vehicles and 17% heavy vehicles instead of 3000 vpd - As design features of the road presented good qualities, it is expected costs of maintenance to be reduced Highly Unsatisfactory - GOS fulfilled its commitments but necessity of 2 financial plan in a row (Reappraisal in 1999 and new financing for Mbabane By-Pass that allows financing of final works of Ngwenya-Mbabane project) - In the life of the project, coverage of capital and maintenance costs Satisfactory Implementation in 2004 of a project focused on establishing the Roads Agency (RA), Roads Fund (RF) . Based on recommendations of the technical assistance to Transport Sector Project, the Roads Department was restructured 53% of the project’s area are women; the upgraded road benefited women workers employed especially in Mbabane, Matsapha and Manzini. Large numbers of women are employed in Government offices in Mbabane, the hotels, tourist and hospitality industry in the Ezulwini Valley. The project road increases the mobility of women Reduction in roads accidents (minus 60% between 2001 et 2003) During the construction phase, the project provided construction related employment opportunities Under the Transport Sector Project financed by ADB, 35 candidates graduated in engineering and road transport planning Due to necessity of managing this huge project, Road Department Managers improved their competences Aside the project, Strategy of Maintenance and Rehabilitation is at very high standards About 20,000 people currently employed in about 650 industrial establishments in the Mastsapha industrial are greatly benefited by the improved transport services. The project is providing a big boost to the upcoming two major projects in the area i.e Makholokholo Township development (MTD) and the Ngwenya Industrial Estate (NIE) Development which will have both social impact and improve the quality of life for women. The targeted industries are light manufacturing and processing (300 factories expected to employ 60,0000 people. Pb … the targeted textile industry is not doing well in Swaziland (competition with Asia, India, Maurice, …) Problems regarding Borrow pits location and rehabilitation … As time goes by , they become larger and deeper Problem emphasized by the Environment Officer … Rehabilitation operations have to be defined

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ANNEX 2.1 : PROJECT PERFORMANCE RATINGS (3/3) Road Project: Mbabane-Ngwenya road (19,3 km) N°

Component indicators

3

Efficiency (outputs) Economic Rate of Return - Appraisal - Reappraisal (PCR) - PPER

Rating (1 to 4) ? 2.5

Remarks/comments Comment Satisfactory With HDM-4 model 37.4% 20.2% because of 65% cost overrun of the project 19,27 % due to increase in the budget (E380 million to expected E 447 million) … This value integrated impacts of time travel reduction and car accidents costs.

Financial Rate of Return - Appraisal Estimate - PCR estimate - PPER estimate Cost Effectiveness Indicators

?

4

Institutional Development objectives - Legal system - Natural Resource Management - Ministry of Public works and Transport

4

5

Project Sustainability Technical Soudness (including M&R facilitation, workshop facilities, …)

4

Road is designed to en excellent standard. (+) More expensive crushed stone (instead of natural gravel) and premix surface was used; this means that the maintenance cost will be much lower in the long run. (+) Service roads will help for access for maintenance works (+) The maintenance of the national road network assets is a crucial element of the operations of the road Department. (+) Maintenance and rehabilitation Strategy has been defined (2007 M&R Report) Trained assessors conduct visual conditions surveys annually at the end of the rainy season

Socio-political support Economic resilience Environmental impact

4 2 2

Institutional components helped to sustain and manage the project (Road Authority, Road Board, Road Fund) Situation might been helped by implementing a toll road (-) Before the project implementation : Environmental audits are done informally by in house SEA personnel. It is usually one at the end of the contract when the contractor is still on sight. (-) During civil works : Concerns with noise and blasting (-) Impacts of changes in the Project Design : The Environmental Impact Assessment (EIA) was based on a single carriageway and could not be regarded as applicable. People were not previously affected by the road had to be relocated. (-) Rehabilitation of huge Quarry and Borrow pits is necessary

PPER Report – Two international roads in Swaziland

1

No indicator of cost efficiency ... it might be expected to have some kind of Cost indicator of a road project based such as …a Cost per km based on the number of lanes and the type of geography crossed by the road (flat, hilly, number of exchanges, …) An another indicator might be “accessibility of the people to the road”: number of people in the corridor at x km or y mn. There were no definition of institutional development objectives Satisfactory Implementation of environmental policy Investigation of the feasibility of tolling the Ngwenya-Manzini Road (MR3). Legal work to review and update previously statutory reforms

65


Component indicators

6

Continued Borrower Performance Regarding Project Management

7

Rating (1 to 4) 3 2

Regarding Project Sustainibility

3

Regarding Financial “remedies”

4

Bank Performance Quality at the entry

1.5 2 2 1

1

PPER Report – Two international roads in Swaziland

Remarks/comments Comment (-) MPWT is relying on a too large extent on the consultants that did not give enough of their time for validation of choices in profiles and routes. Lack of data regarding “how much the project will end up at the completion” after all the changes. (+) MPWT is concerned by project sustainability and make substantial efforts : Identification of technical and financial aspects of maintenance through the implementation of WB HDM pavement performance prediction models. GOS is aware of the insufficiency of maintenance and has focused on reform in the road sector (Constitution of a Road Authority and a road Fund) 3277 km of road network of which 1171 km is paved, 110 km is in the process of being paved and 1996 km is gravel roads. 84% of the maintenance budget is directed towards the gravel roads There is a shortfall in funding allocated to recurrent maintenance. One of the main problems with the maintenance of roads is that there is not a uniform allocation from year to year. The large fluctuation in the amount that is allocated makes the planning of road maintenance very difficult. It also happens that some of the allocated amount will be redirected for other purposes (+) Technical and Financial Feasibility study of operating MR3 as a toll road. (+) Drafting of necessary legislation (to be approved by GOS Parliament (-) The Bank did not insure a good quality at the entry of the project approving a fairly week appraisal of the preliminary design and feasibility study of the road project. (-) Insufficient follow-up (Bank and Consultant) for a project of such importance and high pressure (numerous claims) of the main contractor may have led to the observed huge project overruns. (-) At the PCR phase, it was not paid enough attention to technical soudness of the project Insincere information about the degree of achievement gave to the Bank the feeling that the project was about to be achieved in 2005 and lead the Bank to give a new loan for construction of section 3, that is supposed to be already financed by the second loan. (--) Persistent doubts about the relevance of the road characteristics and budget in relation with the role attached to it (Corridor from Mozambique to South Africa)

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ANNEX 2.2 : PROJECT PERFORMANCE RATINGS (1/3) Project Loan n° Country: Swaziland Road Project: Luyengo-Sicunusa (47 km) N°

Component indicators

1 i)

Relevance and quality at entry assessment Consistency with country overall development strategy (CSP 2000-2005) (CSP 2005-2009 page 26 : Mbabane by pass)

ii) iii)

Consistency with Bank Assistance Strategy Macro-economic Policy

4 4

iv)

Transport Sector Policy

3

v) vi)

Public Policy Reform Poverty Reduction

4 4

vii) viii) ix) x)

Social and Gender equality Environmental Concerns Institutional Development including Restructuring Private Sector Development

4 3 3 3

xi)

Regional Economic Integration

4

xii)

Quality at the entry (including demandingness, complexity, riskyness, ect, ..)

3

PPER Report – Two international roads in Swaziland

Rating (1 to 4) 3.33 3

Remarks/comments Out of the scope of this project performance evaluation, missing data Satisfactory Goals are consistent with overall development strategy (CSP,SNDS, SNDP) CSP 2000-2005 : No available data CSP 2005-2009 : Evaluation of the overall strategy is out of the scope of this project performance evaluation Outcomes : Increase in the upgraded roads in Swaziland by 10% in 2006 (achieved) Overall growth in traffic by 4 % (could be checked trough an analysis of the2007 M&R Report) Conforms to assistance strategy of CSP 2005-2009 … CSP 2000-2005 not available In support to macro-economic and poverty reduction policy. The project contributes towards providing an efficient and cost effective transport for both national and internal traffic within the country. Apparently comprehensive description of sector goals and objectives is lacking The project reached some of the sector goals mentioned in National Transport Policy (March 2000) : . Meet the economic demands and socio-political needs of the country . Ensure safety in the sector, . Facilitate and enhance the expansion of trade and tourism (MR4 can be used as a by-pass for Kruger Park) No indication of further linkages between roads (either with South Africa or other internal roads) In coherence with the public policy reform (Road Authority, Road Board, Road Fund) In line with PRSP Restructuration of informal settlements in the road corridor Better access to education in using the new road infrastructure Defined as an objective in the CSP , NDP and PRSAP Apparently, lack of environmental specifications during the first project definition Institutional components helped to sustain and manage the project (Road Authority, Road Board, Road Fund) Infrastructure supports private sector during construction and later in maintenance It facilitates goods and equipments transportation namely timbers, paper pulp and fruit (lemons, …) It may create new opportunities of new tourism facilities developments along the scenic road, that may give jobs to village people Defined in Swaziland Transport Policy Possibility of increasing tourism as many South Africans depart after work from Gauteng for weekend trips. The project has clearly less demanding objectives that the other project (+) Good integration of heavy and light vehicles since the very first stage of project definition (--) Failed in appraising the importance of the tourism importance of the road and measures that are necessary to attract tourism

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ANNEX 2.2 : PROJECT PERFORMANCE RATINGS (2/3) Road Project: Luyengo-Sicunusa (47 km) N°

Component indicators

2 i)

ii)

Achievement of objectives & outcomes (« efficacy ») Policy Goals - Increase the total length of roads carrying high traffic volumes - Overall growth in traffic - Socio-economic welfare improved in the project areas - Reduction in congestions and accidents Physical objectives (outputs)

iii)

Outcome Performance - reducing VOC by at least 50% - increase in the traffic volume

Rating (1 to 4) 2.97 2.75 3 3 2 3 4

3 3 3 4 3

- reduction in maintenance cost (minus 50% by 2002) - reduction in congestions and accidents (50-60%) iv)

3 3 2 1

v)

Financial Targets - Financial viability - Cost recovery - Restructuring - Other (specify) Institutional objectives

vi) vii)

Social objectives and targets Human Resources Development

3 4

viii)

Private sector Development objectives

1

xi)

Environment objectives

3

3

Remarks/comments Out of the scope of this project performance evaluation Satisfactory Satisfactory - 47 km of new road … but carrying scarce traffic - Average of 500 vpd crossing the border (exceptionally 1000), 2170 vpd on section close to Manzini - Low impact -… Very satisfactory - Excellent standard (1.5 m shoulders with 2.7 m lanes) with a design speed of 120 km/h. - More expensive crushed stone (in stead of natural gravel) and premix surface (rather than asphalt) was used. - Ample provision for bus stop with brick shelters and stopping lanes for buses. - In some cases pedestrian bridges are provided (e.g. near school). - Arrester beds at the end of steep downhill sections. Satisfactory The project met most of its quantitative and qualitative objectives. It achieved its stated objectives - VOC : to be checked - Traffic volume is 200% higher in 2004 (1046 vpd) compared to 1998 (506 vpd) In 1998 : Luyengo-Mankayane and Mankayane-Sicunusa respectively 400 and 250. In 2007: On the same sections, ADT are respectively 606 and 317 - Maintenance cost will in the long run be much lower and the road will have a much longer service life than if cheaper materials were used. Satisfactory - UA17.78 million in 2005 (PCR) compared to 1st evaluation of UA 17.66 millions in 1998 (Appraisal) - In the life of the project, coverage of capital and maintenance costs Satisfactory Implementation in 2004 of a project focused on establishing the Roads Agency (RA), Roads Fund (RF) . Based on recommendations of the technical assistance to Transport Sector Project, the Roads Department was restructuredBased on recommendations of the technical assistance to Transport Sector Project, the Roads Department was restructured Highly satisfactory During the construction phase, the project provided construction related employment opportunities Under the Transport Sector Project financed by ADB, 35 candidates graduated in engineering and road transport planning Aside the project, Strategy of Maintenance and Rehabilitation is at very high standards Unsatisfactory No clear strategy of private sector development No implementation of measures regarding private development objectives (either industrial or linked to tourism)

Satisfactory The Swaziland Environmental Authority have qualified personnel who are implementing the policies of the Authority One of the main constraints is the early closing hour of the Sicunusa border post. This restricts the number of weekend and even day visitors. Negotiations are underway with South Africa to operate a 24 hour border post at Ngwenya. There are, however, a number of internal, i.e. between Swazi ministries, issues that have to be resolved before South Africa could be approached to increase the operating hours at the Sicunusa border post.

PPER Report – Two international roads in Swaziland

68


ANNEX 2.2 : PROJECT PERFORMANCE RATINGS (3/3) Road Project: Luyengo-Sicunusa (47 km) N°

Component indicators

3

Efficiency (outputs) Economic Rate of Return - Appraisal - Reappraisal (PCR) - PPER Financial Rate of Return - Appraisal Estimate - PCR estimate - PPER estimate Cost Effectiveness Indicators Institutional Development objectives - Legal system - Natural Resource Management - Ministry of Public works and Transport

4

5

Rating (1 to 4) 3

With HDM-4 model 18.2 % 31.3 % attributable to high growth in traffic Idem PCR

?

4 Satisfactory Implementation of environmental policy

Project Sustainability Technical soudness (including M&R facilitation, workshop facilities, …)

4

Continued borrower Comitment

2

Socio-political support Private sector Development impacts

3 4

Environment impacts

3

PPER Report – Two international roads in Swaziland

Remarks/comments Comment

The maintenance of the national road network assets is a crucial element of the operations of the road Department. Maintenance and rehabilitation Strategy has been defined (2007 M&R Report) Trained assessors conduct visual conditions surveys annually at the end of the rainy season GOS is aware of the insufficiency of maintenance and has focused on reform in the road sector (Constitution of a Road Authority and a road Fund) 3277 km of road network of which 1171 km is paved, 110 km is in the process of being paved and 1996 km is gravel roads. 84% of the maintenance budget is directed towards the gravel roads There is a shortfall in funding allocated to recurrent maintenance. One of the main problems with the maintenance of roads is that there is not a uniform allocation from year to year. The large fluctuation in the amount that is allocated makes the planning of road maintenance very difficult. It also happens that some of the allocated amount will be redirected for other purposes Institutional components helped to sustain and manage the project (Road Authority, Road Board, Road Fund) Luyengo-Sicunusa : corridor with a high tourist potential; It is a very scenic route with many tourist opportunities. Interest has been shown in developing tourist sites along the route. Community tourism project of developing a traditional Swazi village near Sicunusa. This could also form a link in a number of other circular tourist routes from the popular Mbabane-Manzini resort area. The road design allowed a number of stop and rest facilities to be placed along the road. (The site visit shown that the only facilities at these places are concrete tables and benches. No shade or other amenities are supplied.) One of the main problems is the poor information signage along roads to designate tourist areas. Borrow pit rehabilitation is acceptable … Enclosure has to fixed to prevent people from falling in the pit. Problem emphasized by the Environment Officer …

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ANNEX 3 : RETROSPECTIVE LOGICAL MATRIX Project Loan n° …..

Country: Swaziland

Hierarchy of objectives

At appraisal (no available file) or re-appraisal (1999) 1. Sector Goals and other Developmental Objectives 1.1 Overall transport Goals In 2000, 50% share of crossborder freight transport between road and rail.

Road Project: Mbabane-Ngwenya road Objective Verifiable indicators At PCR (December 2005) No mention of sector goal

Relevance of three transport corridors (to South Africa and Mozambique)

1.2

Road sector’s goals

1.2.0 Improving the network

1.2.1 Providing an efficient and cost effective transport system for both national and international traffic 1.2.2 Overall growth in traffic 1.2.3 Socio-economic welfare in the project areas 1.2.4 Transport safety : Reduction in congestion and accidents 1.3

Financial objectives

1.4

Institutional and Development objectives

At PPER (August 2007)

Necessity of having a complete integrate transport master plan

Data from Annual Transport Bulletin

331 km to be rehabilitated

(From M&R Report 2007) Between 2000 and 2002, the paved road length increased with 20%. Since 2002, it remains constant

Further increase of paved road length of 9% Approval of the Mbabane Bypass + 10% km in 2006

900 million vehicule km on network Total VOC > 1000 million Problem of overloading

Road maintenance budgets increased . E69.7 million (2001-2002) . E 80.8 million (2003-2004)

66% (762 km) of paved roads has traffic volumes> 1000 veh. per day of which 25% carries more than 2500 veh. per day

30 deaths/10000 veh. per year

6238 accidents in 2002 6467 accidents in 2003 229 deaths in 2003 No mention in the PCR 5.7% of GDP and contribution to performance of other majors sectors of economy In 2004, project of establishing a Road Agency, a Road Fund with revenues from tolls on MR3

2000-2005

PPER Report – Two international roads in Swaziland

Means of verification

No mention of general road sector goal

Not available data Data from NSTP (2000) 3500 km (1000 paved and 2500 unpaved)

No available data Lack of CSP Report

Prepared by Olivier Crouzier and F.Botes

No available integrated transport master plan

Assumptions and critical risks factors

The SADC Protocol on Transport, Communications and Meteorology requires that member states promote economically viable, integrated transport services throughout the Region. Lack of general transport Masterplan of all the modes Road projects don’t take in account other modes

Data from M&R Report (2007) 3277 km (1171 paved)

Training of road engineers but some of then have been hired by other companies

Annual road construction statistics from MOPWT Roads

CSP 2005-2009

(From M&R Report 2007) The average paved road condition has been improving since 2002, but it seems to have reached the turning point. The average gravel thickness of unpaved roads has continuously decreased from 2002 and is at low in 2007.

Traffic statistics

Project at approval of a road fund by the Parliament Difficulties of approval by GOS

70


Hierarchy of objectives

At appraisal Reappraisal (1999)

1.5 Social objectives 1.6 Environmental objectives

No available data No available data

1.7

Support national efforts to stimulate tourism and agricultural production

Private sector development objective

1.7 Regional Integration objective

2. Project objectives 2.1.1Improve road transport service in the area served by the road

At PCR (2005)

At PPER (2007)

No available data

Guidelines given by Environment officer

CSP 2005-2009 “Road infrastructures are critical to stimulate economic growth, improve competitiveness and reduce poverty”

Idem than in 2005

MR3 = part of the corridors developed in the Region Facilitation of movements of tourists between Swaziland, Mozambique and South Africa ADT : 2107 by 1998 ADT : 3000 by 2002 Expected to grow at an average growth of 7.4%

Assumptions and critical risks factors Soil conservation in drought affected areas, collection and recycling of solid waste CSP 2005-2009 While maintaining its support to the road sector, the Bank will also provide support in others areas of infrastructure including energy, water and sanitation, ..

Traffic counts at the borders of South Africa and Mozambique (that has to be done)

Mbabane-Ngwenya : 5081 veh/day (2003) compared to 4342 veh/day (2002) … projection of +5% growth per year

(CSP 2005-2009) Mbabane Pass leads a overall growth in traffic by 4% in 2006

2.1.2 Reduce cost of maintenance (HDM model)

No available data

2.1.3 Reduce VOC 2.1.4 Reduce accident and congestion thereby improve safety 3. Outcomes (« efficacy ») 3.1 Physical objectives (outputs)

Minus 50% Accident to be reduced by 50% by 2002

Reduced by 20 to 40% Minus 40%

Remained the same, but consistency of the project changed (page 31)

14 km dual carriage way from Mbabane to Ngwenya with about 19 km of service roads

Section 1 between Ngwenya and Moshane completed Project between Scot and Moshane still in progress

Small local contractors training developed in 2003

Il appears that relocation of displaced people was not clearly prepared at the beginning of the project

3.2 Financial Targets 3.3 Institutional objectives 3.3 Social objectives and targets

Means of verification

Regular traffic counts

Could be achieved through the appraisal of eluded maintenance operations

As the design of the road changed radically, the work progress is slower than previously foresees

3.4 Environment Objectives 3.5 Private sector Development objectives

PPER Report – Two international roads in Swaziland

71


Hierarchy of objectives 4. Efficiency (outputs) 4.1 Economic Rate of Return

At appraisal (no available file) or re-appraisal (1999) Recalculated based on 1999 costs as 37.4%

4.2 Financial Rate of Return 4.3 Cost Effectiveness Indicators 5. Institutional Development Impact

6. Project Sustainability 6.1 Technical soudness

Objective Verifiable indicators At PCR (December 2005)

At PPER (August 2007)

Means of verification

Assumptions and critical risks factors

Revised EIRR : 20.2% because of 65% cost overrun attributable to change in the scope of work No Toll road yet In 2004, project of establishing a Road Agency, a Road Fund with revenues from tolls on MR3

Appraisal UA 11.78 Re-appraisal UA 21.35 million USD 28.79 million

Project at approval from Parliament

UA 35.19

6.2 Continued borrower Comitment 6.3 Socio-political support 6.4 Economic resilience 6.5 Financial resilience

PPER Report – Two international roads in Swaziland

72


Annex 4 : Traffic data Mbabane-Ngwenya Road (19.3 km) Localisation of Traffic census station and Traffic volume escalation along time (from 1992 to 2003). The stations are located as follows: • Directly west of the circle at Ngwenya (on the border post side) • Directly west/north (on the Mbabane side) of the Mvutjini interchange • East of the Matshapha circle interchange between Matshapa and Manzini Traffic at MR3/1 - Section Moshane-Ngwenya

Heavy vehicles

01

00

99

98

97

96

95

94

93

92

02 20

20

20

19

19

19

19

19

19

19

19

91

Light vehicles

19

19

90

5000 4500 4000 3500 3000 ADT (vpd) 2500 2000 1500 1000 500 0

Escalation of traffic

Annex 6 : Tolling of the Ngwenya-Mbabane-Manzini Road

PPER Report – Two international roads in Swaziland

73


Traffic (1998) Vehicles Cars LDV Sub-total: light Buses 2 axle 3 axle 4 axle 5 + axles Sub-total heavy Total

SCOTT to Nkoyoyo Number % Growt h 42.45 3,092 5.7 47.21 3,439 5.7 89.66 6,531 5.7 1.91 139 5.7 3.03 221 5.7 0.37 27 5.7 0.44 32 5.7 4.59 334 5.7 10.34 753 5.7 100.00 7,284 5.7 %

Nkoyoyo to Motshane % % Number Growt h 38.26 1,575 5.3 48.58 2,000 5.3 86.81 3,574 5.3 3.25 134 5.3 3.57 147 5.3 0.44 18 5.3 0.53 22 5.3 5.39 222 5.3 13.19 543 5.3 100.00 4,117 5.3

Motsane to Ngwenya %

Number

% Growth p.

39.11 44.80 83.91 3.37 4.56 0.57 0.66 6.93 16.09 100.00

824 944 1,768 71 96 12 14 146 339 2,107

5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0

Reduction in travel time The travel time from Mbabane to Ngwenya has been reduced from 45 minutes to 25 minutes. Decrease of number of accidents During the 2001-2003, the number of accidents per year on Mbabane-Ngwenya road has decreased from 120 to 47 (about 60%). On the Swaziland network, the number of fatalities was reduced from 355 to 229 on the same period

Traffic (2002- 2003) Vehicles

%

SCOTT to Nkoyoyo Number % Growt h

Cars LDV Sub-total: light Big Buses Med goods Heavy goods Sub-Total heavy Total

Nkoyoyo to Motshane % % Number Growt h 1,476 2,748 83 4,224 156 360 341 17 857 100.00 5,080

Motsane to Ngwenya %

84

16 100.00

Number

% Growth p.

1980 1655 3,635 58 302 347 707 4,341

The ADT variation from 2000/1 to 2004 is reflected in following table for three key locations along the MR3. 2001 estimates

2004 counts

AADT

AADT

1401

2231

16.8%

MR3 @ Ezulwini (w)

7300

15157

27.6%

MR3 @ Manzini

19750

26196

9.9%

Station MR3 @ Ngwenya border

PPER Report – Two international roads in Swaziland

Annual growth (%)

74


TOTAL

28451

PPER Report – Two international roads in Swaziland

43584

15.3%

75


Computation of vehicle operating cost (VOC) before and after the project (Maintenance and Rehabilitation Report (2007)) Before The average cost per vehicle kilometer traveled on the paved roads is E 2.58; it is expected the vehicle operating cost will decrease slightly over the next 5 years and then increase sightly for the next 5 years. This is due to the optimization process aiming to achieve the desired minimum standards rather than aiming to minimize total transportation costs on the network.

After Richards Bay or Durban

In the case of our MR3, the VOC before was above E 2.58 in the beginning of the project and it is actually around E 1.60 as the road is in perfect conditions

The potential savings of users due to roads that are upgraded during this period are included.

PPER Report – Two international roads in Swaziland

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Luyengo-Sicunusa Road (47 km) Traffic (1998) Vehicles Cars LDV Sub-Total: Light Vehicles Buses MGV HGV Sub-total: Heavy Vehicles Total

Luyengo to Mankayane % Number 24.5 57.0 81.5 4.9 9.1 4.5 13.6 100

98 228 326 20 36 18 54 400

Mankayane to Sicunusa % Number 34.8 43.2 78.0 3.7 9.3 9.0 18.3 100

87 108 195 9 23 23 46 250

Traffic 2007 Vehicles Cars LDV Sub-Total: Light Vehicles Buses MGV HGV Sub-total: Heavy Vehicles Total

Luyengo to Mankayane % Number

22 100

240 235 475 11 61 59 131 606

Mankayane to Sicunusa % Number

6 100

211 223 434 7 11 8 26 460

Localisation of Traffic census station and Traffic volume escalation along time (from 1990 to 2007). Average Daily Traffic (ADT) is expressed in vehicle per day.

PPER Report – Two international roads in Swaziland

77


Traffic at the border (Census 3) 700 600

ADT

500 400 hight vehicles

300

light vehicles

200 100

20 07

20 06

20 05

20 04

20 03

20 02

20 01

20 00

19 99

19 98

19 97

19 96

19 95

0

Traffic at MR4/2 450 400 350 300 250 200 150 100 50 0

2006

2004

2002

2000

1998

1500

Light vehicles

1996

1990

AVT (vpd)

2000

heavy vehicles

1994

2500

1992

Traffic at Census MR4/1

1000 Heavy vehicles

500

Light vehicles

78 2006

2004

2002

2000

1998

1996

1994

1992

1990

0 – Two international roads in Swaziland PPER Report


Traffic The average number of vehicles passing through the border post is about 500 per day. On exceptional days there could be double that amount. There are negotiations underway to open the border post for longer hours (currently open between 08:00 and 18:00). This will increase tourism as many South Africans depart after work from Gauteng for weekend trips. They are therefore not in time to go through the border post and may as a result chose other destinations Reduction in travel time is 45 mn ( from 1 hour 30 mn to 45 mn) Reduction on traffic accidents One of the main objectives of the road objectives was reduction in road accidents. During the period 2001-2003, the number of accidents on LuyengoSicunusa road has decreased from 147 (2001) to 54 (2003) indicating 63% reduction.

PPER Report – Two international roads in Swaziland

79


Annex 5 Computation of EEIR in 2007 of Mbabane Road Project

With the Project Year

Capital Cost (a) (1) 17,92 39,05 89,41 43,25 27,73 57,41 57,41 57,41 57,41

Recurrent Cost (b) (2)

Without the Project VOC (c) (3)

1999 2000 2001 2002 2003 0,29 64,41 2004 0,30 67,64 2005 0,31 71,02 2006 0,32 74,57 2007 0,33 78,30 2008 0,34 82,21 12,57 2009 0,35 86,32 2010 0,36 90,64 2011 0,37 95,17 2012 0,38 99,93 2013 0,39 104,93 2014 0,40 110,17 2015 0,41 115,68 2016 0,43 121,46 12,57 2017 0,44 127,54 2018 0,45 133,91 2019 0,46 140,61 2020 0,48 147,64 2021 0,49 155,02 -80,355 2022 Estimated cost of the project : E 447 million

PPER Report – Two international roads in Swaziland

Total (4= 1+2+3) 17,92 39,05 89,41 43,25 92,43 125,34 128,73 132,29 136,03 82,55 99,24 90,99 95,54 100,31 105,31 110,57 116,09 121,89 140,55 134,36 141,07 148,12 155,52 -80,36

Recurrent Cost (b) (5)

VOC © (6)

0,29 0,30 0,31 0,32 0,33 0,34 0,35 0,36 5,095 0,37 0,38 0,38 0,39 0,39 0,40 0,40 5,095 0,43 0,44 0,45

107,36 113,80 120,63 127,87 135,54 143,67 152,29 161,43 171,11 181,38 192,26 203,80 216,03 228,99 242,73 257,29 272,73 289,09 306,44 324,82

Without-with Other Costs Other Costs (eluded time) (accident (d) costs) (e) (7) (8)

10,34 10,55 10,76 10,97 11,19 11,42 11,65 11,88 12,12 12,36 12,61 12,86 13,12 13,38 13,65 13,92 14,20 14,48 14,77 15,07

5,85 5,96 6,02 6,08 6,14 6,21 6,27 6,33 6,39 6,46 6,52 6,59 6,65 6,72 6,79 6,85 6,92 6,99 7,06 7,13

Total

Net benefits

(8=5+6+7)

(9=8-4) -17,92 -39,05 -89,41 -43,25 31,40 5,27 8,98 12,94 17,17 79,08 71,31 89,00 99,18 100,26 106,45 113,05 120,09 127,58 123,01 144,10 157,87 162,87 173,19 427,83 1981,01 19,27%

123,84 130,61 137,72 145,24 153,20 161,63 170,55 179,99 194,72 200,56 211,77 223,62 236,18 249,47 263,56 278,46 298,94 310,99 328,71 347,47

80


Salvage Value Assumed to be of 40% of initial investment

(a) Overall Mbabane-Ngwenya project cost In 2007, total cost of the current project is E 381 million, corresponding to completion of 14.3 km. On a pro-rata base, the real cost of the project – assuming that the missing works requested only 50% of cost per km (ground works already completed – is around 381 + (381*0.5)* 5/14.3 = E 447 million

Cost of periodic maintenance (Swaziland 2007 M&R Report page 27) Periodic maintenance of the new road Based on the Units Costs of Intervention Treatments in the 2007 M&R Report, Reseal has to be done after 8 years and is estimated at 44.00 per m2. Imput data: . Length: 19.3 km; . Number of lanes: 4 . Lane width : 3.7 m Maintenance cost : 44x4x3.7 x19,300 = E12.568 million in 2009 and 2017

(b) Cost of current maintenance It is assumed that the routine maintenance costs are of E 15000 per km and may double in the case of the new road Escalation of current maintenance cost is considered to be around 3% per year.

(c) VOC In the road socio-economic model such as HDM IV, the cost associated with vehicle ownership and operation is by far the greatest contributor to the total transportation costs experimented on a road network. As the pavement deteriorates, the road users incur higher vehicle operating costs (VOC).

Periodic Maintenance of the former road Imput data . Length : 19,3 km . Number of lanes : 2 . Lane width: 3 m Maintenance cost: 44 x2 x3x 19,300 = E 5.095 million in 2011 and 2019

PPER Report – Two international roads in Swaziland

81


(E2, 829 per month and thus expressed on an hourly basis … E17 per hour). In 2003, Eluded time accounts for 17*20*5080*365/(60*1000000) = E 10,5 million per year. Salary escalation is considered to be around 3 % per year

(e) Cost of accident Theory The gross output approach sums the following components: . An estimate of the lost output (from the accident victims, . The cost of medical treatments, . The damage to vehicles and other property . Administrative and police costs.

It is assumed that the VOC is above E2.58 per km and as low as E1.60 per km with the new road. In 2007, computation with the former road and the new one are presented here below: Nab vehicles: 5080 vapid in 2003 – with an average increase of 5% per year Nab vehicles: 6798 vapid in 2007 VOC (former road): 3 x 6,798 x 365 x19.3 = E 135.54 million VOC (new road): 1.6 x 6798 x 365x 19.3 = E 78.3 million

(d) Eluded time Assuming that 40% of the workers have salaries as low as UDS 400 per month

PPER Report – Two international roads in Swaziland

Lost output is usually estimated by applying wage rates to estimates of the number of working days lost as a result of road accidents.

82


Depending on the detail and accuracy of data available, wage rates can be applied by sex, age group, socio-economic class, but is rare for such data to be available. In general, national average wages are applied to give a crude estimate and hospital surveys reveal that road accident victims have incomes above national average suggesting that road car accident costs may be underestimated if national average wages rates are used. Fouracle and Jacobs (1976) calculated that for any country, the cost of road accidents is equivalent to approximately 1% of its national gross product (GNP)

PPER Report – Two international roads in Swaziland

Application on the MR3 case MR3 accounts for 120 deaths on a total of 230 deaths for Swaziland in 2003. Car accidents decreased from 120 (2001) to 47 (2003) As it is though that the cost relating to road accidents is assumed to account for 1.5% of GDP (E 1228 millions in 2003), the cost of car accidents can be computed – in 2003- as: 1.5%x (120-47)/230 x 1,228 = E 5.85 million per year

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With the Project Year

Capital Cost (a) (1) 21,18 41,95 55,88 4,82

Recurrent Cost (b) (2)

Without the Project VOC (c) (3)

1999 2000 2001 2002 2003 0,71 17,16 2004 0,73 18,01 2005 0,75 18,91 2006 0,77 19,86 2007 0,79 20,59 14,48 2008 0,82 21,62 2009 0,84 22,70 2010 0,87 23,83 2011 0,89 25,02 2012 0,92 26,27 2013 0,95 27,59 2014 0,98 28,97 2015 1,01 30,41 14,48 2016 1,04 31,94 2017 1,07 33,53 2018 1,10 35,21 2019 1,13 36,97 2020 1,17 38,82 2021 1,20 40,76 -49,53 2022 Estimated cost of the project : E 171 million

PPER Report – Two international roads in Swaziland

Total (4= 1+2+3) 21,18 41,95 55,88 4,82 17,86 18,74 19,66 20,63 21,38 36,91 23,54 24,70 25,92 27,19 28,53 29,94 31,42 47,45 34,60 36,31 38,10 39,98 41,96 -49,53

Recurrent Cost (b) (5)

VOC Š (6)

0,71 0,73 0,75 0,77 0,79 5,64 0,84 0,87 0,89 0,89 0,92 5,64 0,98 1,01 1,04 1,07 1,10 5,64 1,17 5,98

58,67 62,19 64,06 66,62 69,28 72,05 74,94 77,93 81,05 84,29 87,67 91,17 94,82 98,61 102,56 106,66 110,92 115,36 119,98 124,77

Without-with Other Costs Other Costs (eluded time) (accident (d) costs) (e) (7) (8)

2,33 2,37 2,42 2,47 2,52 2,57 2,62 2,67 2,73 2,78 2,84 2,89 2,95 3,01 3,07 3,13 3,19 3,26 3,32 3,39

7,45 7,60 7,67 7,75 7,83 7,91 7,98 8,06 8,15 8,23 8,31 8,39 8,48 8,56 8,65 8,73 8,82 8,91 9,00 9,09

Total

Net benefits

(8=5+6+7)

(9=8-4) -21,18 -41,95 -55,88 -4,82 51,29 54,15 55,24 56,98 59,04 51,26 62,85 64,84 66,90 69,00 71,20 78,15 75,80 63,74 80,71 83,28 85,94 93,18 91,50 192,77 1383,98 35,19%

69,15 72,89 74,90 77,61 80,42 88,17 86,38 89,54 92,82 96,19 99,73 108,10 107,22 111,19 115,31 119,59 124,04 133,17 133,46 143,24

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(a) Overall Luyengo-Sicunusa Road Project cost In 2007, total cost of the current project is E 171 million, corresponding to completion of 47 km.

It is assumed that the routine maintenance costs are of E 15000 per km and may double in the case of the new road Escalation of current maintenance cost is considered to be around 3% per year.

Cost of periodic maintenance (Swaziland 2007 M&R Report page 27) Periodic maintenance of the new road Based on the Units Costs of Intervention Treatments in the 2007 M&R Report, Reseal has to be done after 8 years and is estimated at 44.00 per m2. Input data: . Length: 47 km in graved road; . Number of lanes: 2 . Lane width: 3.55 m Maintenance cost: 44x2x3.55 x47000 = E12.57 million in 2008 and 2014 Periodic Maintenance of the former road Input data . Length: 47 km . Number of lanes: 2 . Lane width: 3 m Maintenance cost: 15000*47/1000000= 5.64 million in 2008, 2014 and 2020

Salvage Value Assumed to be of 40% of initial investment

(b) Cost of current maintenance

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(c) VOC In the road socio-economic model such as HDM IV, the cost associated with vehicle ownership and operation is by far the greatest contributor to the total transportation costs experimented on a road network. As the pavement deteriorates, the road users incur higher vehicle operating costs (VOC).

Nb vehicles: 600 vpd in 2007 VOC (former road): 8, 55*400*365*47/1000000= E 58.67 million VOC (new road): 2*500*47*365/1000000= E 17.16 million

(d) Eluded time Assuming that 40% of the workers have salaries as low as UDS 400 per month (E2, 829 per month and thus expressed on an hourly basis ‌ E17 per hour). In 2003, Eluded time accounts for 17*45*500*365/(60*1000000) = E 2.33 million per year. Salary escalation is considered to be around 3 % per year.

(e) Cost of accident Theory The gross output approach sums the following components: . An estimate of the lost output (from the accident victims, . The cost of medical treatments, . The damage to vehicles and other property . Administrative and police costs.

It is assumed that the VOC is above E9.58 per km and as low as E2.00 per km with the new road. In 2007, computation with the former road and the new one are presented here below: Nb vehicles: 400 vpd in 2003 with the former road and 500 vapid in 2003 with the new road with an average increase of 5% per year

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Lost output is usually estimated by applying wage rates to estimates of the number of working days lost as a result of road accidents. Depending on the detail and accuracy of data available, wage rates can be applied by sex, age group, socio-economic class, but is rare for such data to be available. In general, national average wages are applied to give a crude estimate and hospital surveys reveal that road accident victims have incomes above national average suggesting that road car accident costs may be underestimated if national average wages rates are used. Fouracle and Jacobs (1976) calculated that for any country, the cost of road accidents is equivalent to approximately 1% of its national gross product (GNP)

Application on the MR4 case MR3 accounts for 54 deaths on a total of 230 deaths for Swaziland in 2003. Car accidents decreased on MR4 from 120 (2001) to 47 (2003) As it is though that the cost relating to road accidents is assumed to account for 1.5% of GDP (E 1228 millions in 2003), the cost of car accidents can be computed – in 2003- as : 0,015*1228*(147-54)/230= E 7.45 million per year

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Annex 6 : Tolling of the Ngwenya-Mbabane-Manzini Road

1. Toll tariffs The new 2004 tariffs are to be considered as average tariffs and not necessarily posted implementation tariffs. These are the averages after the application of frequent user discounts and after any other concessions granted. Posted tariffs should be set at practical levels for collection efficiency purposes. As before, in South Africa standard practise is for tariffs up to R 10.00 to be rounded up to the nearest 50 cents and tariffs above R10.00 to be rounded up to the nearest R1.00 in order to achieve efficient toll collection The base tariffs, as recommended in the 2001 feasibility study are summarised in Table 1 below. The tariffs are averages, and assume two-way tolling at both locations. Base toll tariffs (2001) – Two way Plaza Ngwenya Ezulwini

Class 1 E 12.50 E 3.75

Class 2 E 20.00 E 7.50

Class 3 E 37.50 E 15.00

Class 4 E 50.00 E 25.00

Recommended toll tariffs (2004) – Two ways Plaza Ngwenya Ezulwini

Class 1 E 15.00 E 5.00

Class 2 E 24.00 E 10.00

Class 3 E 45.00 E 20.00

Class 4 E 60.00 E 33.33

The tariff/km is indicated in Table 3 is based upon these “new tariffs ”.

Table 3: Tariff per km

Class 1 Class 2 Class 3 Class 4

Ezulwini tariffs (E) - new 5.00 10.00 20.00 33.33

Ezulwini Length (km) 32.5 32.5 32.5 32.5

Ngwenya tariff/km Ngwenya Length tariff/km (cents) tariffs (E) – (km) (cents) new 15.38 15.00 52.5 28.57 30.77 24.00 52.5 45.71 61.54 45.00 52.5 85.71 102.56 60.00 52.5 114.29

Tariff levels at increments of 5%, and up to 20% for Ngwenya and up to 33.3% for Ezulwini, above the base tariffs, were tested in order to achieve similar revenues as those modelled in 2001.

These tariff structures, averaged over the full road length, are in line with the generally accepted regional norms, with downward adjustments to reduce the impact on daily commuter traffic being balanced by upward adjustments for cross border traffic.

These were also compared on a per km basis with the regional averages that the public has become accustomed to.

Local versus cross border traffic splits at Ngwenya Plaza

Recommended average tariffs, as a result of all of the above analysis, are summarised in following table 2

Given the location of the Ngwenya Plaza it is expected that there will be some nominal traffic volumes going through the plaza, but not crossing the border. It is thought that this traffic should not be charged the full "cross-border" tariff.

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The traffic not travelling across the border, which would have to pass through the toll plaza, is expected to primarily be the staffs who work at the border post and service and delivery vehicles to the border post. A summary of estimated local versus cross border traffic volumes are summarised in Table 4 here-after.

Table 4: Local and cross border traffic volume estimates at Ngwenya % Cross border Class 1 Class 2 Class 3 Class 4 Total

98.0% 98.0% 99.0% 100.0%

Local Traffic Class 1 Class 2 Class 3 Class 4 Total All Traffic Class 1 Class 2 Class 3 Class 4 Total

Cross border Total (vet/day) 1949 119 55 65 2188

% Class

Local Total (vet/day) 40 2 1 0 43

%Class

Total (vet/day) 1989 121 56 65 2231

89.1% 5.4% 2.5% 3.0% 100.0%

93.0% 5.7% 1.3% 0.0% 100.0%

Daily tolled volume 1949 119 55 65 2188

35 2 1 0 37

%Class 89.2% 5.4% 2.5% 2.9% 100.0%

1984 121 56 65 2226

Hence further revenue adjustment is required to cater for this local traffic at the Ngwenya Plaza that does not cross the border, and hence should not be charged the full tariff.

2

Toll revenue estimates Gross toll revenue estimates over the project period assume that tariff increases will be at CPI levels and that there will be no real increases or decreases in tariffs over the project life span. The base year gross toll revenue estimate is provided in Table 5 below.

Table 5: Estimate of gross toll revenue in 2004 Ave Tariff Tolled daily Annual Revenue (E) volume 2004 (366 days)

Class 1 Class 2 Class 3 Class 4 Sub Total

5.00 10.00 20.00 33.33

Class 1 Class 2 Class 3 Class 4 Sub Total Total

15.0 24.0 45.0 60.0

Ezulwini Plaza 13684 25,042,138 443 1,622,501 203 1,486,659 126 1,536,224 14457 29,687,523 Ngwenya Plaza (total) 1984 10,891,068 121 1,061,464 56 916,569 65 1,434,866 2226 14,303,968 43,991,490

Revenue split by class

Revenue split by plaza

84.4% 5.5% 5.0% 5.2% 100.0%

67.5%

76.1% 7.4% 6.4% 10.0% 100.0%

32.5%

The gross toll revenue estimate for 2004 is about E44 million The revenue stream assumes constant real tariffs and traffic growth as reported earlier.

3. Pavement and structure requirements and costs The review of pavement and structures requirements and cost streams is based upon: •

New traffic volume and composition, and changed E80 estimates

•

Critical first principals re-analysis of pavement and structure requirements over project life-span, and comparison with earlier work

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An assessment was undertaken of the previous work carried out on structures. This included a site visit to establish the current relevance of previous work. Structures related costs are nominal compared to pavement related costs. An assessment of previous pavement requirements and cost stream was also undertaken. This portion of the cost is substantial in the project and exceeds any other single cost component. The project implementation delay does mean that the pavement requirements occur at relatively earlier dates in the project life, which necessitates careful consideration from a cash flow, NPV and concessionaire risk perspective.

a) Structures Structures related work and expenditure is nominal relative to other cost items such as pavement maintenance and rehabilitation. Nevertheless, the 2001 estimates were reassessed. A reduction in expenditure of approximately E3m (2000 Emalangeni) can be achieved by omitting nonessential cost elements such as concrete surface cleaning.

b) Road pavement and other elements Pavement rehabilitation and periodic maintenance Pavement rehabilitation and periodic maintenance are outside of the scope of the operating contract (CTROM contract), but are very material in terms of analysing overall project financial feasibility and NPV. Timing of major works is of critical importance in the project cash flow analysis, especially given the desire for the road to become self-sustaining into the future. Due to the reduction in the volume of heavy vehicles a substantial reduction in E80s over the project life span can be expected. The implications are that the maintenance and rehabilitation actions programmed previously can be carried out at later dates, coupled with minor

holding actions in between. The expenditure of the project life span can thus be reduced. This is balanced by the later than anticipated project start, with some 4 years of pavement usage having already occurred, and hence the relative advance of the previously programmed maintenance and rehabilitation dates. The process of re-estimating E80s and revised cost streams is currently well advanced and will be incorporated in the final version of the report. In the meantime previous cost estimates used in the previous financial model, have been used in the updated financial model. These estimates are thought to be conservative as they do not yet account for reduced E80s and extended time periods between programmed actions, and this is thought to outweigh the delayed start effects

c) Routine road maintenance Routine road maintenance costs are generally included in the CTROM contract. Included in routine road maintenance are the following actions: •

Crack sealing and patching of road surface

Control of vegetation

Cleaning of drains and culverts

Removal of debris and dead animals on and adjacent to the road surface

• • • • • • •

Inspection / reporting of road furniture Guard rail repairs Repair / replacement of fencing Reinstatement of tarred/block/concrete walkway Inspection / reporting of streetlights Inspection / reporting of traffic signals Road marking

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A detailed cost estimate of routine road maintenance was made previously, which would remain relevant, and which has been cross-checked against current CTROM operator tender costs of SANRAL. This cost has been included in the CTROM tender cost estimate, which is reported on in a later section of the report.

4. Future Plaza capacity requirements Should the 2020 requirement be considered the ultimate scenario, preliminary design of the plaza footprint should account for 4 lanes at Ngwenya and 14 lanes at Ezulwini. However, toll collection technology is constantly advancing in such a way that toll collection efficiency is being improved and higher service levels are being achieved. The implication is that it may not be necessary in the future to allow for a large physical plaza with as many lanes as currently estimated - dependent on the development of technology and the adoption of this technology by the Ministry over the medium to long term. Therefore, at some future date, when the capacity of the Ezulwini Plaza is being approached it will have to be expanded and/or alternative technology employed to increase service rates. Electronic Toll Collection (ETC) is typically such a technology. Other alternatives include the implementation of tandem booths. Various options can be considered at the appropriate time.

The evaluated option will enable the raising of the required funding (estimated at E56,036,150) to pay for the procurement and construction of the plaza building, tolling lanes, tolling equipment, the CTROM operator, and all related financing costs. The funding raised will be repayable over 6 years, a period well within the initial 7-year CTROM Operator contract period. Following the end of this period, the Swaziland Government may opt to evaluate the feasibility of a full concession, or to proceed with further CTROM contracts. The obvious benefit with the CTROM contract approach is to obtain efficiencies, risk transfer and ring fencing associated with the private sector toll collection, while avoiding the punitive financial penalties associated with the perceived risk of a concession in an as yet untested environment. The CTROM contract approach will also enhance the ability for the raising of the debt requirements, especially with the framework proposed in section 8.2 where debt will be repaid before periodic maintenance costs are incurred. While this option might create a ‘backlog’ in un-funded periodic maintenance, various solutions are to hand, ranging from a Swazi Government intervention, through to the Lenders being requested to consider a bridging facility. These options will be looked at in detail after the final maintenance scheduling is complete, and during the arranging phase.

5. Financial Performance of the Project From an economic point of view, tolling the Mbabane-Manzini highway without concessioning but opting for a private operator to collect the tolls and perform all of the routine maintenance is financially feasible. The project has a Nett Present Value (NPV) after all costs, including the future anticipated rehabilitation and maintenance requirements, of in excess of E228 million, which constitutes an effective addition to the fiscus of the Government of Swaziland. Most importantly, the project is self funding into the future, thereby securing this vital economic artery for the Kingdom of Swaziland.

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About Sustainibility How to finance Preventive and Current Maintenance ?

Mozambique South Africa

Ngwenya

Moshane Nkoyoyo Scot Junction

2230 vpd 3 lanes Plaza Toll revenue : E14.3 million

Mbabane

Manzini

Mbabane By Pass

15160 vpd

26196 vpd (1.23 % HV) 10 lanes Plaza (2 reversible Toll revenue : E29.7 million

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About Sustainibility How to finance Preventive and Current Maintenance ? Investment costs Ezulwini : E264 million Ngwenya : E10.4 million Total : E56 million . Lane construction : E 2.2 m/lane . Plaza control building : E1.5m/building . Initial lane equipment : E 75000/lane . Establishment cost : E 2m per plaza

Ngwenya

Contract : 7 year management contract with a Private entity (“CTROM Operator�) Tasks : Toll collection and routine maintenance works Capital : No equity contribution as the contract will not be a concession. Revenues per year : E53,776,538 (2006) Net revenue (gross toll revenue less CTROM Operator contract fee) : service the debt raised and pay all other funding and administration related costs, with the remaining cash periodically transferred to a Toll Road Maintenance Account (TRMA), which account is to hold funds for undertaking the scheduled Periodic Rehabilitation & Expansion maintenance, after ensuring the Debt Service Reserve Account (DSRA) is fully funded. Cash available in the TRMA will be used to pay for scheduled Periodic Rehabilitation & Expansion maintenance costs.

Moshane Nkoyoyo Scot Junction Mbabane

Manzini

Mbabane By Pass

Nett Present Value (NPV) : E228 million after all costs, including the future anticipated rehabilitation and maintenance requirements

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