Learning Curves

OED
September 2007

FocusingonResultsinthe TransportSectorofIndia

Transportconnectsresourcesandmarkets,diversifiesproduction,developstrade,andinso doingfacilitateseconomicgrowth.Ruralroadscanalsobenefitthepoor. TheGovernmentofIndiahasmadeeffortstomodernize,expand,andintegratetransportin India.Notwithstandingtherobustdevelopmentoutlook,billionsofdollarsareneededto sustaintheseefforts.Asitimprovespublicsectorperformanceandaccountabilityandactsas enablerratherthanproducer,theGovernmentcanmobilizeprivatesectorparticipationto bridgetheresourcegapandincreaseoperationalandmanagerialefficiency. ADBsinfrastructureoperationsareindemandandADBandIndiahaveworkedon transportfortwentyyears.Asofend2006,ADBhadmade25loanstotaling$5.28billionto thetransportsectorofIndia,oraboutonethirdofADBslendingtothecountry.Howhas ADBsassistanceperformed?Whatstrategicpositioningshoulditadoptnow?
Background TheAsianDevelopmentBank(ADB)hasassisted thetransportsectorofIndiasincethestartofits operationstherein1987.Roadsandhighwaysatthe national,state,andrurallevelshavemadeup75%of lending,butADBhasalsoinvestedinrailwaysand ports.Asofend2006,ithadextended27advisory technicalassistancegrantsforsectorrestructuring, institutionalcapacitybuilding,systemplanning,tariff setting,andassetrevaluation;and31technical assistancegrantsforprojectpreparation. In2006,theOperationsEvaluationDepartment conductedaSectorAssistanceProgramEvaluationof theTransportSectorinIndia. 1 Itassessedthe performanceofADBsassistanceandidentifiedareas wherekeystakeholderscouldmanagebetterfor developmenteffectivenessandresults.WiththeSector AssistanceProgramEvaluationofthePowerSector, thisaimedtoinformtheCountryAssistanceProgram EvaluationforIndiatobecompletedaheadofthenew countrypartnershipstrategyforIndia. Thestudyexaminedtheoperationsapprovedin 19872005.ItfollowedbroadlytheGuidelinesforthe PreparationofCountryAssistanceProgram EvaluationReportsandusedanalysisframeworks
Operations Evaluation Department Asian Development Bank

basedontopdownandbottomupassessments.The firstassessmentintegratedsectorpositioningand qualityofsectorentry,contributiontodevelopment results,andADBsperformance.Thesecondassessment lookedattherelevance,effectiveness,efficiency, sustainability,andimpactofoperations. SummaryofFindings Combiningthebottomupandtopdown assessments,thestudyratedADBssectorassistanceas partlysuccessfuloverall,butonthehigherside.This ratingisbasedonconcernsaboutimplementation efficiencyandsustainability.Sinceongoingprojects werealsoreviewed,theratingmightchange.Although thecompletedprojectshadachievedtheirexpected outputswithsatisfactoryquality,theyfaceddelaysin implementation,timeoverruns,andreductionsinscope. Allongoingprojectscontinuetosufferimplementation problems.Itremainstobeseenifeffortstoaddress implementationproblemswillsucceed.Upon completion,theprojectswereexpectedtoprovidethe intendedbenefits.Policychangesinfinancingnational highwayscouldhelpaddresssustainabilityconcerns. Takingintoconsiderationthesizeofthecountryand therelativecontributionofADBsassistance,theoverall

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impacthasbeenmodestwithruralroadsprovidingthe highestpotentialimpactonpovertyreduction. BottomUpAssessmentofSectorAssistanceProgram

Item Relevance Likely Effectiveness Efficiency Likely Sustainability LikelyImpact National Highways Relevant Effective Less efficient Lesslikely Modest State Highways Relevant Effective Less efficient Likely Modest Rural Roads Highly relevant Effective Less efficient Lesslikely Substantial Railways Relevant Less effective Less efficient Less likely Modest

ADBmustfindwaystomatchthenumberand qualityofstafftotheincreasingleveloftransport operationsandensurethattheyhaveadequateand appropriateexperienceandskills. Qualityatentrymustbeimproved.Projectdesigns musttakeintoaccountlocalvariationsin implementationcapabilitiesandmakebetteruseof pastexperiencetoimprovethedesignoffuture projects.Inparticular,implementationschedules shouldbebetterestimated. Thestudyalsomaderecommendationsfor prioritizingADBsstrategicpositioning: ADBsupportforreformsthatpromoteprivate sectorinvolvementshouldcontinue,atahigher level.Contractarrangementscouldbedevelopedto maximizethebenefitsofprivatesectorparticipation suchthatitnotonlyreplacespublicfinancingbut improvesthequalityofservices. Therailwaypolicyreformprogramwasformulated in20022003.Whileitsbasicgoalsaresound,the approachtoachievingtheseisyettoachievethe desiredresults.ADBshouldengagetheGovernment andIndianRailwaysinpolicydialoguetorework theagendaandidentifyaroadmapfordeveloping furthercommercialorientationinoperations. ADBshouldconductmoreintensivepolicydialogue on,andworkwiththeGovernmenttodevelop actionplansfor,(i)roadsafety,(ii)sector governanceandcorruption,(iii)institutional coordination,(iv)climatechange,and(v)socially inclusiveobjectives.Roadmapsshouldreferto socialparameters,tobemainstreamedintoproject designswithindicators.Advisorytechnical assistancecouldbeleveragedtosupporteachtheme. Feedback

ADBssupportwasdeemedtohavebeenrelevantto thecountrysneedsandtohaveaddressednationaland stateconcerns.ThestudyfoundthatADBsstrategic positioningandselectionofpriorityareashadbeen significant.ADBsassistancehadimprovedthequality oftheroadandrailwayinfrastructure.ADBsvalue addedcontributedtopromotingpolicydevelopment, institutionalstrengthening,privatesectorparticipation, andcomplianceandpublicawarenessofsocial safeguards.Themainweaknessesidentifiedwerepoor projectdesign,delaysinenforcementofsafeguards, andlackofprogressinaddressingsomekeypolicy issues,particularlyintherailwayssector. TopDownAssessmentofStrategicPerformance
Item SectorPositioningandQualityof SectorEntry ContributiontoDevelopment Results ADBsPerformance OverallTopDownRating Rating Substantial Modestbutonthehigherside Modest Successful

Recommendations Thestudyadvocatedcontinuedsupporttotheroads andhighwaysprojectsandmaderecommendationsfor improvingprojectimplementation:

AtthetimeofpreparationoftheseLearningCurves, ADBManagementsResponseandtheChairs ADBmustworkcloselywithexecutingagenciesto SummaryoftheDevelopmentEffectiveness resolveproblemsthatleadtoimplementationdelays, CommitteeDiscussionswerenotyetavailablefor bothinindividualprojectsandatthestrategiclevel. disclosuretothepublic.Thestudywascompletedin June2007. ADBshouldgiveatleastequalemphasistogood portfoliomanagementandvolumeofloanapproval. 1 ADB.2007.SectorAssistanceProgramEvaluationofthe ADBsprojectadministrationinthetransportsector TransportSectorinIndia.Manila.Available: mustimproveinfrequencyandquality.

http://www.adb.org/Documents/Reports/SAPE/IND/SAP IND200709.pdf

Learning Curves available @ www.adb.org/evaluation/ Team Leader: Narendra Singru; Tel +63 2 632 4256; nsingru@adb.org