Implementation Completion and Results Report (ICR)...

Document of

The World Bank FOR OFFICIAL USE ONLY

Report No: 133218

IMPLEMENTATION COMPLETION AND RESULTS REPORT

IDA-H5950 ; IDA-H8590

ON A

GRANT

IN THE AMOUNT OF USD 425 MILLION

TO THE

DEMOCRATIC REPUBLIC OF CONGO

FOR THE

DRC MULTI-MODAL TRANSPORT ( P092537 ) ADDITIONAL FINANCING (P129594)

December 31, 2018

Transport Global Practice Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective {Feb 21, 2018})

Currency Unit = US dollars

= US$1

US$ 1.44 = SDR 1

FISCAL YEAR

July 1 - June 30

Regional Vice President: Hafez M. H. Ghanem

Country Director: Jean-Christophe Carret

Senior Global Practice Director: Guangzhe Chen

Practice Manager: Nicolas Peltier-Thiberge

Task Team Leader(s): Tojoarofenitra Ramanankirahina

ICR Main Author: Bertrand Murguet

ABBREVIATIONS AND ACRONYMS

AAC Autorité de l’Aviation Civile (Civil Aviation Authority) ADS-B Automated Dependent Surveillance -Broadcast AF Additional Financing ATS Air Traffic System CAS Country Assistance Strategy CEPTM Cellule d’Execution du Projet de Transport Multimodal (Multimodal

Transport Project Implementation Unit) COPIREP Comité de Pilotage de la Réforme des Entreprises du Portefeuille de

l’Etat (Steering Committee for State-Owned Enterprises Reform) CVM Congolaise des Voies Maritime (National Marine Ways Management

Agency) DMVN Direction de la Marine et des Voies Navigables (Directorate of Maritime

Affairs and Waterways, Ministry of Transport and Communication) DRC Democratic Republic of Congo EBITA Earnings before interest, taxes and amortization EMRRP Projet d’Urgence Multisectoriel de réhabilitation et reconstruction

(PMURR) - Emergency Multisector Rehabilitation and Reconstruction Project

ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Impact Management Plan FA Financing Agreement FEC Fédération des Entreprises du Congo (Congolese Federation of

Enterprises) GDRC Government of the Democratic Republic of Congo ICAO International Civil Aviation Organization IDA International Development Association ILS-DME Instrument Landing System – Distance Measuring Equipment MoT/MTVC Ministry of Transport / Ministère des Transports et Voies de

Communication MTP Multimodal Transport Project PAD Project Appraisal Document PDO Project Development Objective PIU Project Implementation Unit PMURR Project Multisectoriel d’Urgence de Rehabilitation et de Reconstruction

(Emergency Multisector Rehabilitation and Reconstruction Project) PPP Public Private Partnership PSDCP Private Sector Development and Competitiveness Project RAP Resettlement Action Plan RPF Resettlement Policy Framework RVA Régie des Voies Aériennes (National Airways Management Agency) RVF Régie des Voies Fluviales (National Waterways Management Agency) SOE State Owned Enterprise SCTP Société Commerciale des Transports et des Ports (Company of

Transports and Ports) SNCC

Société Nationale des Chemins de Fer du Congo (National Railway Company of DRC)

TBA Traverse bi-bloc en béton armé (bi-bloc concrete slipper) TTL Task Team Leader TU Traffic Unit UPK Unité de gestion de projet à Kinshasa – PIU based in Kinshasa UPL Unité de gestion de projet à Lubumbashi – PIU based in Lubumbashi VOR-DME Very High Frequency Omnidirectional Range – Distance Measuring

Equipment

TABLE OF CONTENTS

DATA SHEET ......................................................................................................................... 1

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6

A. CONTEXT AT APPRAISAL .........................................................................................................6

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION .............................................................. 12

II. OUTCOME .................................................................................................................... 16

A. RELEVANCE OF PDOs ............................................................................................................ 16

B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 16

C. EFFICIENCY ........................................................................................................................... 20

D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 21

E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 21

36. No data on poverty was collected at project closing to monitor and discuss potentialoutcome in terms of poverty reduction and shared prosperity. ................................................ 22

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 22

A. KEY FACTORS DURING PREPARATION ................................................................................... 22

B. KEY FACTORS DURING IMPLEMENTATION (how this influences pace, and outcome) you shoulddiscuss efficacy ....................................................................................................................... 24

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 25A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 25

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 26

C. BANK PERFORMANCE ........................................................................................................... 27

D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 29

V. LESSONS AND RECOMMENDATIONS ............................................................................. 29

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 31

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 48

ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 50

ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 52

ANNEX 5. SUMMARY OF BORROWER’S ICR ......................................................................... 52

ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 60

The World Bank DRC Multi-modal Transport ( P092537 )

Page 1 of 62

DATA SHEET

BASIC INFORMATION Product Information Project ID Project Name

P092537 DRC Multi-modal Transport

Country Financing Instrument

Congo, Democratic Republic of Investment Project Financing

Original EA Category Revised EA Category

Partial Assessment (B) Partial Assessment (B)

Related Projects Relationship Project Approval Product Line

Additional Financing P129594-DRC-Multi-Modal Transp Additional Financing

11-Jun-2013 IBRD/IDA

Organizations

Borrower Implementing Agency

CEPTM CEPTM

Project Development Objective (PDO)

Original PDO The Multimodal Transport Project's (MTP) development objectives are: (i) to improve transport connectivityintheDemocracticRepublicof Congo (DRC) so as to support national economic integration, (ii) to restore Société Nationale desCheminsdeFer duCongo (NationalRailway Company of DRC - SNCC) financial and operational viability, and (iii) to implement asectorwidegovernanceplan and strengthen transport state-owned enterprises (SOEs) operational performances.


Page 2 of 62

Revised PDO The Revised Project Development Objectives are: (i) to improve transport connectivity in DRC; (ii) to restore SNCC’s financial and operational viability; and (iii) to strengthen transport SOEs’ operational performance.

FINANCING

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing IDA-H5950 255,000,000 255,000,000 253,274,753

IDA-H8590 180,000,000 156,532,816 132,280,240

Total 435,000,000 411,532,816 385,554,993

Non-World Bank Financing Borrower/Recipient 376,000,000 0 0

Total 376,000,000 0 0

Total Project Cost 811,000,000 411,532,816 385,554,993

KEY DATES

Approval Effectiveness MTR Review Original Closing Actual Closing 29-Jun-2010 15-Apr-2011 11-Nov-2013 31-Dec-2015 30-Jun-2018


Page 3 of 62

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions 13-Apr-2011 0 Change in Legal Covenants 15-May-2013 129.88 Additional Financing

Change in Project Development Objectives Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Reallocation between Disbursement Categories Change in Legal Covenants Change in Implementation Schedule

15-Jul-2014 245.08 Change in Results Framework Change in Components and Cost Reallocation between Disbursement Categories Change in Legal Covenants

29-Nov-2016 348.23 Change in Results Framework Change in Components and Cost Reallocation between Disbursement Categories Change in Legal Covenants

29-Jun-2018 381.55 Change in Components and Cost Cancellation of Financing Reallocation between Disbursement Categories

KEY RATINGS

Outcome Bank Performance M&E Quality

Unsatisfactory Moderately Unsatisfactory Modest

RATINGS OF PROJECT PERFORMANCE IN ISRs

No. Date ISR Archived DO Rating IP Rating Actual

Disbursements (US$M)

01 20-Dec-2010 Moderately Satisfactory Moderately Unsatisfactory 1.16

02 01-Jun-2011 Moderately Satisfactory Moderately Unsatisfactory 21.06

03 05-Jul-2011 Moderately Satisfactory Moderately Satisfactory 23.73

04 26-Dec-2011 Moderately Satisfactory Satisfactory 56.97


Page 4 of 62

05 24-Jun-2012 Moderately Satisfactory Satisfactory 76.52

06 08-Jan-2013 Moderately Satisfactory Satisfactory 105.73

07 18-Sep-2013 Satisfactory Satisfactory 175.62

08 14-Apr-2014 Moderately Satisfactory Moderately Satisfactory 213.15

09 13-Aug-2014 Unsatisfactory Moderately Satisfactory 252.75

10 06-Mar-2015 Unsatisfactory Moderately Satisfactory 282.05

11 21-Dec-2015 Unsatisfactory Moderately Unsatisfactory 324.72

12 30-Jun-2016 Unsatisfactory Moderately Unsatisfactory 339.72

13 08-Feb-2017 Moderately Unsatisfactory Moderately Unsatisfactory 356.57

14 17-Oct-2017 Moderately Unsatisfactory Moderately Unsatisfactory 366.88

SECTORS AND THEMES

Sectors Major Sector/Sector (%)

Transportation 95

Public Administration - Transportation 5 Ports/Waterways 10 Aviation 10 Railways 70

Industry, Trade and Services 5

Public Administration - Industry, Trade and Services 5 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Economic Policy 20

Trade 20 Trade Facilitation 20


Page 5 of 62

Private Sector Development 23 Business Enabling Environment 10

Investment and Business Climate 10

Jobs 3 Job Creation 3

Public Private Partnerships 10

Public Sector Management 60

Public Administration 60 Administrative and Civil Service Reform 10

State-owned Enterprise Reform and Privatization 50

Urban and Rural Development 6

Urban Development 3 Urban Infrastructure and Service Delivery 3

Rural Development 3

Rural Infrastructure and service delivery 3

ADM STAFF

Role At Approval At ICR

Regional Vice President: Obiageli Katryn Ezekwesili Hafez M. H. Ghanem

Country Director: Marie Francoise Marie-Nelly Jean-Christophe Carret

Senior Global Practice Director: Inger Andersen Guangzhe Chen

Practice Manager: C. Sanjivi Rajasingham Nicolas Peltier-Thiberge

Task Team Leader(s): Pierre A. Pozzo di Borgo Tojoarofenitra Ramanankirahina

ICR Contributing Author: Bertrand Murguet

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I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES

A. CONTEXT AT APPRAISAL

Context 1. Country. In 2008, the Democratic Republic of Congo (DRC) was one of the poorest countries in the world, with a per capita gross domestic product (GDP) of about US$3271. The country has been affected by a series of economic and political crises since its independence in 1960, that have culminated in the late 1990s and early 2000s in several years of devastating conflict: that decade was marked by successive looting by the armed forces in 1991 and in 1993, a first conflict in 1997 (with the involvement of seven foreign countries and a number of militias), and a second conflict between 1998 and 2003 during which a reported 3.5 million people died, and many more were displaced. 2. Prior to the conflicts in the decades of 1990 and 2000, the Congolese economy was dominated by extractive and export activities (mining, agriculture, forestry, energy), which fueled a system of poor governance and large-scale corruption. War and civil disturbance have taken a high toll on infrastructure and on the population. Millions of people had lost their assets and the economy was since then centered on subsistence agriculture and informal activities, with a collapse of export and value-adding activities. State-Owned Enterprises (SOEs) have long been the cornerstone of the DRC economy. They dominate the mining sector, control the transport (airports, railways, ports), water and power sectors and represent most of formal employment in the country. Likewise, SOEs are responsible for providing a very large portion of the health and education services. 3. The government has implemented since 2001 a program of economic reforms supported by the Bretton Woods Institutions. Vigorous measures were taken to break hyper-inflation and stabilize the exchange rate but failed at improving public sector management and governance. In 2008, foreign aid accounted for 72% of central government expenses2, and 187% on average between 2001 and 2010. At the time of appraisal, the government’s top two priorities as outlined in the Government’s Poverty Reduction Strategy Paper (PRSP, July 2006) were to build national unity and economic stability. Improving the transport sector’s performance was identified as a vital goal for the GDRC, since most of DRC’s territory is inaccessible by road3. The country is almost entirely landlocked, and the poor conditions of transportation infrastructure aggravate geographical isolation and social and economic inequalities across provinces and between urban and rural areas. 4. Sector context. The transport system was designed during the colonization period as an integrated multimodal network of roads, river, and rail connecting all parts of the country (more details in Box below). The system has deteriorated since the 1970’s due to the physical impact of wars and civil unrests, but most importantly due to the weak policy and institutional capacity, and the limited financial resources allocated to the sector. Transport state-owned enterprises have suffered from chronic mismanagement and corruption by the government officials and management. A culture of extorsion and of rent-seeking both at management and at lower levels of these companies have taken a heavy toll on the capacity to maintain infrastructure and deliver services. At the

1 World Development Indicators, World Bank 2 World Development Indicators, World Bank 3 Out of ten provincial capitals, only one is connected by road (Matadi) with the capital city Kinshasa while three are only accessible by river (Mbandaka, Kisangani and Bandundu) and six only by air (Kananga, Mbuji-Mayi, Lubumbashi, Kindu, Goma, Kisangani and Bukavu).

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time of appraisal, the financial standing of transport SOEs was very low, with most - if not all of them, being technically quasi bankrupt.

Table 1: Brief presentation of waterways, railway and air sectors at the time of appraisal4 :

Maritime and river network. The DRC’s port/maritime sub sector is organized around three ports with sea access – Matadi, Boma and Banana – which are in the mouth of the Congo River. The port of Matadi is the largest of the three and accounts for 95 percent of total traffic (about two million tons in 2007), most of which is linked to the economic activity of the Bas Congo and Kinshasa regions. The river network of DRC is extensive with about 16,238 kilometers of navigable waters and lakes. Consequently, the Congo River and its tributaries provide a vital and low-cost transport access to most of DRC’s hinterland. Both rail and road networks are built for the most part in connection with and to complement the river network. The largest part of DRC’s river transportation services is provided by small, informal, private operators for which activity statistics do not exist.

Railway network. DRC has three separated railway networks with a total length of 5,033 km. The estimated total freight volume transported by rail in 2008 was one million tons translating into about 420 million ton-kilometers. The Chemin de fer Matadi-Kinshasa (Matadi to Kinshasa Railway -CFMK) operated by the Office National des Transports (National Transport Office - ONATRA) is a 366 km long track from Matadi to Kinshasa linking the country’s main port to the capital and the navigable section of the Congo River. The Société Nationale des Chemins de Fer du Congo (National Railway Company of DRC - SNCC) railway network in the south-east of the country is the largest in DRC (3,641km) and part of the only integrated railway network in sub-Saharan Africa. On this interconnected system goods can be transferred by rail from DRC via Zambia to the ports of Durban in South Africa and Dar-es-Salaam in Tanzania. Ninety percent of the overall freight traffic is carried on the section between Kolwezi, Tenke, Lubumbashi and Sakania and is linked for a significant part to the mining traffic generated by DRC’s Copperbelt activities. In 2009, SNCC’s estimated transport volume reached 218 million ton-kilometers or 90 percent below the peak volumes attained in 1975. The third and last railway network in DRC is the Chemin de Fer des Uélés (Uélés Railway - CFU), a 1,026 km long 0.6-meter gauge line in the north of the country (linking the Kilo Moto gold mines to the Congo River). It is currently not operational.

Air transportation. The country has a total of 270 public and private airfields, only four of which are international airports – namely Kinshasa, Lubumbashi, Kisangani and Goma. In 2009, 50 private airlines were registered in DRC while in 2008, 44 and 80 percent of DRC’s total and international airline passenger traffic, respectively, was handled at Kinshasa’s N’Djili airport. Nationwide, total annual number of airline passengers number increased to 1.5 million passengers. Meanwhile, Kinshasa’s N’Djili airport air cargo volume increased in parallel to its passenger traffic reaching nearly 140,000 tons in 2008 versus 40,000 tons in 1999. However, the safety record of air transport sector is currently among the lowest in the world. This poor safety record reflects a lack of enforcement of existing safety and security regulations. It represents a real threat to the sector’s future growth. The government is aware of the problem and has initiated critical steps to try to solve it, including the ongoing adoption of a new civil aviation code and the creation of an autonomous civil aviation agency.

5. Rationale for Bank support. Since re-engaging in DRC after 2001, the World Bank recognized5 that publicenterprise reform was a critical element to ensuring sustainable and equitable economic development. TheGovernment acknowledged in the mid-2000’s that SOEs represented both a burden and a liability to the State. The

4 World Bank 2008, Project Appraisal Document for DRC Multimodal Transport Project, Report No: 53053-ZR 5 Country Assistance Strategy (FY08-FY11), Report No:41474-ZR

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Multimodal Transport Project’s (MTP) design was crafted to support this ongoing reform program initiated by the Government, with support from the World Bank (i.e. through the Private Sector Development and Competitiveness Project- PSDCP – 2003-2014) and targeting DRC’s main SOEs. The main goal of the SOE reform plan put forward in 2008 by the COPIREP (the agency in charge of SOE reform within the government) was, by 2013, to either liquidate or partially or fully privatize the commercial activities of all key SOEs. The Government’s SOE reform program was built around a three prong approach: a) Transform each SOE into a commercial entity to allow necessary labor, financial and operational reform that the preexisting public enterprise status did not permit, b) adopt a Public-Private Partnership (PPP) law (done in 2007) that would enable private sector participation in each SOE commercially viable activities and, c) bring in outside private expertise to manage each SOE during the transition phase leading to actual PPP deals under contracts named “stabilization contracts”. As the PTM was being developed, these stabilization contracts were gradually implemented and other attempted at Gecamines (Public Mining Company), Regideso (State water utility), SNEL (State electricity utility) and RVA (State airport and airspace company). 6. Recent Bank support to transport sector in DRC. The Bank supported the transportation sector through the Emergency Multisector Rehabilitation and Reconstruction Project (PMURR - 2002-2010) with activities to improve river, rail and air transportation6; the High Priority Reopening and Maintenance of Roads Project (P153836)- 2008 – present); and described above through the Private Sector Development and Competitiveness Project (PSDCP) in SOE reform between 2003 and June 2014. The PSDCP financed the cost of the private operator selected through international competitive bidding in 2008 to manage the SNCC under a two-year stabilization contract (August 2008 to August 2010), and financed the retrenchment of 3,886 retirees from SNCC (in 2011 and 2013 for a total cost of US$ 50 millions7). Thus, the MTP would continue and expand the scope of World Bank support to SNCC while also engaging with air, river and maritime transportation. As in other sectors, Bank assistance to SOEs has been tied to a clear reform agenda whereby investment is subordinated to reform steps to ultimately allow for private sector participation. 7. Contribution to CPF/CPS objectives. The objective of the Country Assistance Strategy (FY08-FY11)8 was to lay the foundation for a medium-term poverty reduction effort, with a strong focus on governance and shared growth. The CAS focused on three of the five pillars of the Government’s Poverty Reduction Strategy Paper (PRSP, July 2006), and the MTP contributed to the two following: i) promotion of good governance and consolidation of peace; ii) achievement of sustained and shared economic growth, through infrastructure rehabilitation and expansion; and private sector development to foster economic diversification. The Project’s objectives were aligned with the above CAS’s objectives as it aimed at contributing to the promotion of good governance through the preparation and adoption of a sector-wide governance plan and SOE-specific plans, but also by undertaking annual financial audits to help identify SOE’s assets and other liabilities. The project was also expected to

6 List outputs by sector RAILWAY: for SNCC (49.2km of track renewal between Nouba and Tenke; acquisition and installation of telecommunications equipment and traction equipment maintenance; study in telecommunication and signaling completed; / for SCTP: study completed for the rehabilitation of the Kinshasa-Matadi railway track. WATERWAYS: for SCTP: rehabilitation of ports of Kinshasa and Matadi, reconstruction of quay and wharf of Mbandaka port; / for RVF: rehabilitation of workshops, signaling and hydro-patrol boats; acquisition of topographic and shipyard equipment, buoy ships and patrol boats, a crane; management and computerization studies completed/ for CVM (ex-CVM): acquisition of two hydrographic patrol boats and equipment; acquisition of one buoys control boat; acquisition of GPS equipment; rehabilitation and of dredgers and financing of the dredging channel in Matadi and in Boma; study for the PPP for Maritime transport completed; AVIATION : actualization of the Civil Aviation Code, approved by government and adopted by Parliament; study on the Reorganization of Civil Aviation Department, approved by government. 7 Implementation Completion and Results Report (report ICR3320) – Private Sector Development and Competitiveness Project, December 31, 2014 8 Report No:41474-ZR

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contribute to the second objective of the CAS through the rehabilitation of railway infrastructure and the supply of key equipment to SOEs.

Theory of Change (Results Chain)

8. The theory of change for the intervention is that the provision of equipment and technical assistance would lead to improved operational and financial performance of transport SOEs. The underlying assumptions for the project’s theory of change were that: (i) in the case of SNCC, the implementation of a Technical Assistance (through a private operator) would improve governance and management by refocusing the company on its core business (railway transport and not port operations, river transportation, schools and hospital operation) while physical investments – track rehabilitation and increased rolling stock- would allow the company to transport more freight and passengers, increase turnover and reduce its debt. Both technical assistance and investments would address SNCC’s bad governance and mismanagement practices that are identified in the Project Appraisal Document (PAD)9 as the main reasons for the steady decline and poor performance of operations. (ii) by supporting international trade and transit reforms, trade and transit flows through DRC borders would be facilitated, hence increasing trade volumes and promoting greater economic integration in Central Africa; (iii) the provision of selected equipment to RVA and SCTP10 under component 2, in addition to the adoption of governance plans at RVF, CVM and SNCC would improve the companies’ management and operational performance. Graphical presentation of the Theory of Change 9. The PAD proposed a graphical presentation of the Theory of Change and is showed below (assumptions have been added for this ICR):

9 Project Appraisal Document for DRC Multimodal Transport Project, page 70 10 CVM, RVF would later be recipient of equipment with the Additional Financing of July 2013.

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Key assumptions: (1) Demand for SNCC transport is mostly constrained by poor infrastructure and lack of

powered rolling stock; (2) Financing of operating costs by the Project proceeds is temporary, it will allow SNCC

to continue operations during the time of rolling stock and infrastructure renewal and will not be necessary afterwards;

Activities Outputs PDOs/Outcome Long Term Outcomes

Financial support to SNCC’s retirement plan

Financing of eligible operational costs

Support the implementation of an international trade process reform

RVA: acquisition of air traffic control systems

SCTP: acquisition of locomotives and freight wagons

Support the implementation of a sector wide governance plan

Transport connectivity improved in DRC (to support economic integration)

Simplified international trade procedures

5 ADS-B installed/ 1 ILS installed

Number of locomotives and wagons acquired

SOE performance strengthened and transport sector oversight improved

Increased economic integration of DRC

Adoption of governance plans by individual SOE

Number of staff retired

Gasoil, lubricants, spare parts financed

Track rehabilitation and upgrade

Rehabilitation of equipment and rolling stock

SNCC’s financial and operational viability restored

Improved SNCC infrastructure and management

Reduction of annual costs of Board of Directors of SCTP, RVM, RVA and SNCC

Annual procurement and financial audits of SOEs completed

Length of rehabilitated and upgraded rail track

Number of locomotives rehabilitated

Sector wide governance plan implemented and transport SOEs operational performance strengthened

1

2

3 4

5

6

7

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(3) SNCC’s social debt and additional retrenchment plans will be financed by the Government;

(4) New /rehabilitated rolling stock and infrastructure will be maintained by SNCC; (5) Managing methods and practices brought by technical assistance will be accepted

and mainstreamed in the SNCC management practices after project closing; The Government is committed to SNCC reform.

(6) International trade is constrained by DRC’s international trade procedures (7) Approval of a Governance Plan and yearly financial audits will induce managerial

changes and better governance practices. Project Development Objectives (PDOs)

10. The Legal Agreement, dated July 14, 2010 states that the objectives of the Project are: (i) to improve transport connectivity in the Recipient’s territory to support national economic integration, (ii) to restore SNCC’s financial and operational viability, and (iii) to implement a sector wide governance plan and strengthen transport state owned enterprises’ operational performances.

Key Expected Outcomes and Outcome Indicators 11. Achievement of the Development objectives was to be measured through nine (09) key outcome indicators:

• For PDO 1: improve transport connectivity in the Recipient’s territory to support national economic integration; the two indicators were:

1) Average transit time of mining exports by rail between the Copperbelt region and the Zambian border; and

2) Direct project beneficiaries (number), of which female (percentage).

• For PDO 2: restore SNCC’s financial and operational viability; the four indicators were: 3) SNCC’s total transport volumes in Traffic Units (TU); 4) Mainline locomotives dispatch reliability (breakdowns per 100,000 km); 5) Staff productivity (TU/staff/year); and 6) SNCC’s Cash flow from operations before Interest, Taxes and Amortization (EBITA per year).

• For PDO 3: implement a sector wide governance plan and strengthen transport state owned enterprises’ operational performances; the three indicators were:

7) Transport SOEs achieve improved operational performance targets; 8) SOEs compliance with procurement processes indicators; and 9) Adoption by individual transport SOEs of a governance plan.

Components

12. The project was structured around four components: three components were related to the three parts of the PDO, and the fourth was dedicated to coordination, monitoring and evaluation (M&E) and program management component.

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• Component 1 SNCC recovery plan (Estimated costs: US$218.85 million / actual costs: US $ 365.54 million; ratio: 163%): Component 1 supported the reform of SNCC management and operations through: (i) the signature of a five year management contract with an internationally selected private operator which will replace the existing private operator hired under a stabilization contract which will be extended by a year through August 2011 before project’s effectiveness to ensure continuity of private management of SNCC, (ii) payments of up to 1,675 voluntary retirees’ departing indemnities and social security pension contributions; (iii) financing of track and rolling stock rehabilitation and upgrade, (iv) reimbursement of SNCC eligible operational costs (mainly fuel, electricity and water bills), (v) training of key new and existing personnel, (vi) monitoring of project’s impact, (vii) funding of a study to review SNCC relationship with mining operators and development of a transparent tariff policy in support of mobilizing financing from mining companies, and (viii) funding of financial and procurements audits. • Component 2 Operational performance strengthening and improved governance of the sector (Estimated costs: US$25.45 million / actual costs: US$ 23.10 million; ratio: 91%) : This component supported : (i) the financing the acquisition of urgently needed equipment for selected transport SOEs (CVM (ex-RVM), RVA, SCTP and RVF), (ii) pay for the retirement indemnities of 77 RVF agents using an approach similar to that used for SNCC, (iii) payment for an internal diagnostic of the MoT so as to identify possible reorganizational scenarios, (iv) the financing of MoT’s agents training and MoT equipment, (v) the financing of the annual audits of SOEs procurement and financial activities, and (vi) the development of a sector wide governance plan which will then be tailored for adoption by each individual SOE. • Component 3 International trade procedures simplification (Estimated costs: US$2 million / actual costs: US$ 1.89million; ratio: 95%) : This component was supporting the preparation for the implementation of international trade agreements and was supporting the development of an international trade procedures simplification strategy and the associated action plan in light of the ongoing study on the facilitation of international trade financed by Trade Facilitation Facility Trust Fund, including materials, equipment and basic infrastructure investments designed to facilitate the flow of goods along DRC main international trade transport corridors. • Component 4 (Estimated costs: US$8.70 million / actual costs: US$ 12.41 million; ratio: 143%)– Project management: This component included support for project implementation, communication, reporting, monitoring and evaluation and operating costs of the Project Management Entity (PME) located within the MoT (Cellule d’Exécution du Projet de Transport Multimodal, CEPTM). This PME was composed of two Project Units, one located in Lubumbashi within the SNCC to manage MTP’s Component 1 while the second one was based in Kinshasa to manage Components 2 and 3 of the MTP.

13. The detailed estimated and actual total project costs by component and sources of funds are presented in Annex 3.

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION

14. The project underwent one Level 1 restructuring in 2013 and three Level 2 restructurings in 2014, 2016 and 2018. PDO was revised once (2013), there was one Additional Financing granted (2013), and one closing date extension by 30 months (2013). The table below provides a summary of the changes through the restructurings.

Restructurings/

Date Main changes

Level 1 restructuring & AF June , 2013

Additional Financing: USD 180,000,000 PDO: Changes to part 1 & 3 - (i) “to improve transport connectivity in the Recipient’s territory to support national economic integration” was revised as follows: “to improve transport connectivity in the Recipient’s territory” on the basis that “national economic integration”

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was a higher-level objective that would not be attributable directly to the project. (ii) “restore SNCC’s financial and operational viability” was not modified. (iii) “to implement a sector wide governance plan and strengthen transport state owned enterprises’ operational performances, “was revised as follows: “strengthen transport state owned enterprises’ operational performances”, on the basis that the ‘’implementation of a governance plan” was more an activity than an objective. Revision of legal covenants Closing Date: 30-month extension (to June 30, 2018) Reallocation of proceeds between disbursement categories. Indicators: all indicators’ target dates were deferred by 30 months to reflect delays met in effectiveness and the new closing date. In addition - For PDO 1

• Indicator 1 - Average transit time of mining exports by rail between the Copperbelt region and the Zambian border – dropped, as indicator considered irrelevant in the quasi absence of mining exports by rail at that time of revision

• Indicator 1: Direct project beneficiaries (number), of which female (percentage) was revised to modify the definition of direct project beneficiaries to exclude passenger traffic of SCTP and focus only on SNCC’s passengers traffic. This change was justified by the fact that the investment at SCTP would not be made on passenger transport but on freight. As a result, target values were significantly reduced by 94% from 1,750,000 to 100,000 units.

For PDO 2

• targets of indicator 2: SNCC’s total transport volumes in Traffic Units (TU) were reduced (201 TU instead of 400 TU projected) and lower projections by project closing date (from 700 TU projected by 2015 in the PAD to 600 TU in 2018); due to reduced overall investment (GDRC contribution reduced to zero)

• target values of indicator 3: Mainline locomotives dispatch reliability (breakdowns per 100,000 km) were delayed but end target maintained;

• target values of indicator 4: Staff productivity (TU/staff/year) were delayed but end target maintained; • target values of indicator 5: SNCC’s Cash flow from operations before Interest, Taxes and Amortization (EBITA)

per year ($US million) were reduced; specification was added that the monitoring period is annual. For PDO 3

• Indicator 6: “Transport SOEs achieve improved operational performance targets” end target increased from 3 to 4 SOEs (inclusion of AAC)

• Indicator 7: “SOEs compliance with procurement processes indicators” was dropped because it was not considered necessary and in the light of the fact that “a quantitative framework for measuring compliance is unlikely to be in place soon” (Project Paper, 2013).

• New indicator 7: “Number of individual transport SOEs to adopt a governance plan” – indicator added.

Level 2 restructuring July 2014

Reallocation of proceeds between disbursement categories. Revision of the disbursement category (social plan at SNCC & RVF made consistent) Components: Scope of component 2 revised to reduce the activities; Refocus component 3 and renaming component 3.

Level 2 restructuring 2016 November

Revision of legal covenants (the 2 covenants relative to SCTP dropped) Reallocation of proceeds between disbursement categories. Components: Scope of component 1 increased and component 2 decreased Indicators:

• New indicator: Roadmap established, and technical/legal assistance groundwork completed for preparing transfer of railway services (on SNCC network) to one or several operators

• New indicator: Non-core activities separated from SNCC (number) Level 2 restructuring June 2018

Cancellation of funds (undisbursed proceeds)

Revised PDOs and Outcome Targets

15. The PDO was revised on June 29, 2013 [Amended FA date] with a Level 1 Restructuring and Additional Financing: the original first PDO (i) “to improve transport connectivity in the Recipient’s territory to support national economic integration” was revised as follows: “to improve transport connectivity in the Recipient’s territory” on the basis that “ national economic integration” was a higher level objective that would not result directly for the project

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; the second PDO “restore SNCC’s financial and operational viability” was not modified. The third PDO (iii) “to implement a sector wide governance plan and strengthen transport state owned enterprises’ operational performances “was revised as follows: “strengthen transport state owned enterprises’ operational performances”, on the basis that the ‘’implementation of a governance plan” was more an activity than an objective.

Revised PDO Indicators

16. At the time of the Level 1 Restructuring (2013), all indicators’ target dates were deferred by 30 monthsto reflect delays met in effectiveness and the new closing date proposed with the restructuring. In addition, somequantitative targets were reduced to account for the reduction of overall investment as the US$ 180 million of AFhas partially offset the cancelling of the initial Chinese loan of US$ 200 million11. The following changes were made:• For PDO 1, the indicator 2) Direct project beneficiaries (number), of which female (percentage) wasrevised to modify the definition of direct project beneficiaries to exclude passenger traffic of SCTP and focus onlyon SNCC’s passengers traffic. This change was justified by the fact that the investment at SCTP would not be madeon passenger transport but on freight. As a result, target values were significantly reduced by 94% from 1,750,000to 100,000 units.• For PDO 2: targets of indicator 3) SNCC’s total transport volumes in Traffic Units (TU) were reduced tolower projections by project closing date (700 TU projected by 2015 in the PAD to 600 TU in 2018) ; target valuesof indicator 4) Mainline locomotives dispatch reliability (breakdowns per 100,000 km) were delayed but end targetmaintained; target values of indicator 5) Staff productivity (TU/staff/year) were delayed but end target maintained; and target values of indicator 6) SNCC’s Cash flow from operations before Interest, Taxes and Amortization (EBITA) per year ($US million) were adjusted (breakeven point project by 2013 in the PAD vs. USD 52 million loss actuallyregistered in 2012).• For PDO 3: indicator 8) “SOEs compliance with procurement processes indicators” was dropped becauseit was not considered necessary and in the light of the fact that “a quantitative framework for measuringcompliance is unlikely to be in place soon” (Project Paper, 2013).

Revised Components

17. Project components were revised in several instances as well as some activities, as follows:

• At the time of the AF (June 2013), the scope of Component 1 and Component 2 were increased:- Component 1: with additional improvement of rail track and infrastructure (US$64.8 million); acquisition

of new locomotives (US$23.1 million); rehabilitation of freight wagons and passenger coaches (US$1.8 million); acquisition and installation of logistics and workshop equipment (US$3.8 million); improvement in telecommunications (US$3.5 million); improvement of facilities and acquisition of miscellaneous equipment (US$2.4 million); studies and technical support; additional Operational support and institutional development (US$47.2 million) including the funding of SNCC eligible operational expenses (mainly fuel, electricity and water bills, locomotive rentals, and materials and spare parts), a management contract with a private operator, and the training of key new and existing personnel; SNCC social plan was expanded to 400 more retirees eligible for retirement in 2013 (US$7.6 million).

11 The project was designed with a parallel-financing by an official credit line from the Government of China of US$ 200 million that did not materialize.

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- Under Component 2, new activities were included in favor of river transport operations and civil aviation regulation. For river transport, the AF added hydrographic and hydrological surveys on Kwilu, Sankuru, Ruki, Busira, Tshuapa, Lukenie and Mfimi rivers and the construction and installation of navigation aids on the Lua, Mongala and Lualaba rivers (US$ 5 million for RVF), equipment for RVF workshop in Kinshasa; as well as consultants services for DMVN (US$ 5 million), including a revision of DRC’s river navigation code, capacity building and training, provision of supplies and equipment for the Directorate and office rehabilitation. Concerning air transport, the AF added the Civil Aviation Authority (Autorité de l’Aviation Civile- AAC) as a new beneficiary. New activities (Us$ 5 million) included consultants’ services for the recertification of DRC’s passenger airlines crews and aircrafts; twinning of the AAC with a foreign civil aviation for a three-year period; technical assistance and training for the implementation of a five-year technical capacity; strengthening plan for AAC; and office rehabilitation and provision of IT and office equipment. • At the time of the second Restructuring (Level 2) dated July 9, 2014, the scope of component 2 was revised to reduce the activities benefiting to DMVN (office rehabilitation, technical supplies, IT and office equipment for DMVN was cancelled), and Component 3 was refocused on the implementation of the recommendation of the studies on international trade facilitation funded under the project and on the physical improvements on the Beach Ngobila passenger terminal in the Congo river. The component 3 “International trade procedures simplification” was renamed “International trade procedures simplification and infrastructure investments”. • At the time of the third Restructuring (Level 2) dated November 29, 2016, the scope of component 1 was increased with additional rail tracks rehabilitation works added. This change of scope was a strategic shift agreed between the World Bank and the Borrower since all parties agreed that the Project would not achieve PDO 2 and that the financial performance of SNCC could not improve despite the massive investment already spent on covering operating costs and on rolling stock. It was therefore decided to focus the remaining USD 27 million towards infrastructure works (no reallocation was needed) and expand the scope of track program (500 km was added to the repair works program). Another important change was to reduce the scope of component 2 with the withdrawal of SCTP as project beneficiary due to noncompliance with legal conditions. An attempt was also made during the last year of the project implementation period to refocus project support on safety and track routine maintenance and small-scale safety interventions to preserve the project rehabilitated tracks and mitigate safety risks.

Other Changes 18. The following additional changes were made: • Additional financing of USD 180 million in June 2013. • Amendments of the original financing agreement to reflect actions taken as of the date of the AF, including an

extension of the date of legal covenants in June 2013. Another revision of the legal covenants was made in November 2016: the two covenants relative to SCTP were dropped with the withdrawal of SCTP from the project.

• Three reallocations of proceeds between disbursement categories in June 2013; in July 2014 and in November 2016.

• Revision of the disbursement category. Section IV.B.1 (iv) of Schedule 2 to the Financing Agreement, stating the disbursement condition 4(b) for the payment of the social plan at RVF, was revised on July 9, 2014 and made consistent with the disbursement condition effective for the payment of the social plan at SNCC.

• Extension of Project Closing Date in June 2013. The original project closing date was extended by thirty months from 30th June 2015 to 30th June 2018 to allow completion of most activities.

• Cancelation of funds in June 2018 of part of undisbursed proceeds before the project closing date, in the amount of USD 23,182,644 (Special Drawing Rights (SDR) 16,429,000). This cancelation was processed with the objective of maintaining the canceled amount in the country’s IDA allocation.

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Rationale for Changes and Their Implication on the Original Theory of Change

19. The AF was designed (i) to cover for an unanticipated financing gap after the cancellation of the expected US$ 200 million contribution of the GDRC to SNCC’s investment plan (to be funded through a Chinese government’s official line of credit). The theory of change relative to SNCC was not modified but rather confirmed since further support was granted to infrastructure, rolling stock and operational support; (ii) to expand the scope of component 2, with a focus on acquisition of equipment for other SOEs (RVF, CVM, RVA) and to include AAC as a new beneficiary. Other changes that occurred before or after the AF in 2013 did not questioned or modified the Theory of Change. Revision of scopes of Components 2 and 3 were designed not to incur changes to the PDO.

II. OUTCOME A. RELEVANCE OF PDOs

Assessment of Relevance of PDOs and Rating 20. The project objectives are highly relevant to the World Bank Group Country Assistance Strategy FY2013-201612. The objectives of the project directly support two strategic objectives of the CAS. Strategic objective 1 aims at increasing state effectiveness and improving good governance and is monitored against CAS Outcome 1.3 “Strengthening governance of the mining sector SOEs and increasing operational performance of other SOEs (REGIDESO, SNEL, SNCC, and RVA)”. Strategic objective 2 aims at boosting competitiveness to accelerate private-sector-led growth and job creation and is monitoring against CAS Outcome 2.2 “Improved connectivity and access to transport infrastructure”. The PDOs are also aligned with the World Bank Group Strategic Country Diagnostic (March 2018)13 that identifies transport connectivity, transport SOE governance and performance as key development issues. 21. Given the current strategic direction, the relevance of the PDO is rated as being high. B. ACHIEVEMENT OF PDOs (EFFICACY)

Assessment of Achievement of Each Objective/Outcome

22. The PDO is broken down into three primary sub-objectives. As described above in paragraph 14, PDO 1 and 3 were revised in 2013 to align the wording with outcomes expected to be achieved and with activities supported by the project. These revisions had no impact on the project expected outcomes. However, key outcome indicators were revised in 2013 and in 2016, which will be assessed in a split evaluation. Out of nine original key PDO indicators, only one has achieved its initial target (adoption of governance plans by SOEs). Performance against revised PDO indicators is substantially better, with three additional indicators having achieved or exceeded their targets (SNCC: Total transport volumes, staff productivity, and EBITA). Project performance under each of the three primary development objectives is discussed below:

Table 3: PDO targets and achievement of outcomes

12 Report No. 66158-ZR. The preparation of the Country Partnership Framework 2018-2021 was suspended, therefore the relevance of PDOs is assessed against the last strategy paper available, the Country Assistance Strategy (CAS) FY13-16. 13 Report No. 112733-ZR

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Development Objective

Result Indicator Actual Result (% of target)

Original target

Revision 2013 Revision 2016 result target result target

Objective 1: to improve transport connectivity in the Recipient’s territory

Average transit time of mining exports by rail between the Copperbelt region and the Zambian border (days)

N/A

<5

N/A

Indicator dropped

Number of direct beneficiary (defined as the number of passengers on SNCC network)

10,120 (1% of original target and 10%

of the 2016 revised target)

1,750,000 19,000 100k 36,000 30,000

Objective 2: Restore SNCC financial and operational viability

Mainline locomotives dispatch reliability (breakdowns per 100,000 km)

25 (77%)

10

N/A

Total transport volumes in traffic units (millions)

152.70 (22% of the initial target and 100% of

the 2016 revised target)

>700 200 600 152 (100%)

152 and above

Staff productivity (TU/staff/year) 28,147 (40% of original

target and 176% of the 2016 revised

target)

>70,000 N/A 16,000 16,000

Cash flow from operations before interests, taxes and amortization (million US$)

-100 (-667% of

original target and 100% of 2016 revised

target)

>15 -52 0 -73 -100

Roadmap established, and technical / legal assistance groundwork completed for preparing transfer of railway services (on SNCC network) to one or several new operators

N/A

N/A

No

(0%)

Yes

Non-core activities separated from SNCC (number)

N/A N/A 0 (0%)

N/A

Objective 3: strengthen transport state owned enterprises’ operational performances

Transport SOEs achieve improved operational performance targets

2 >3 4

Adoption by individual transport SOEs of a governance plan

6 (200% of initial

target and 100% of 2013 revised target)

>3 6 6

SOEs compliance with procurement processes indicators

N/A >95% Indicator dropped

N/A

23. Objective 1: to improve transport connectivity in the Recipient’s territory. This objective is measured against the indicator “number of direct beneficiary” defined as the number of passengers on SNCC network. The target of 100,000 passengers was not met, as SNCC claimed only 10,120 by project closing. The number of SNCC passengers steadily declined over the course of project implementation.

24. Objective 2: Restore SNCC financial and operational viability. SNCC’s financial and operational viability was

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measured against four original indicators and then two new indicators added in 2016. Only one of the four original indicators was achieved, but three of the revised or new 6 indicators were achieved or exceeded.

a) “mainline locomotives dispatch reliability (breakdowns per 100,000 km)”: reached value 25 against a target of 10 (77 %);

b) “total transport volumes in traffic units (millions)”: reached value 152.7014 against a revised target of 152 (100 %);

c) indicator “staff productivity (TU/staff/year)”: reached value 28,147 against a revised target of 16,000 (176%). d) SNCC financial viability was measured against indicator “cash flow from operations before interests, taxes and

amortization (million US$) and achieved value -100 against a revised target of -100 (100%). e) In 2016, a new indicator “Roadmap established, and technical / legal assistance groundwork completed for

preparing transfer of railway services (on SNCC network) to one or several new operators” was added. This activity was not completed.

f) In 2016, the new indicator “Non-core activities separated from SNCC (number)” was added. No activities were separated from SNCC by project closing.

Beyond the achievements directly measured by key or intermediate indicators, the project achieved other significant results. The long list of outputs described in Annex 1-B account for major achievements including a) around 1,300 km of rehabilitated railway tracks; b) building a slippers factory c) the rehabilitation of hundreds of wagons and dozens of locomotives, increasing SNCC transport capacity; d) improving DRC aviation and waterway navigation safety and e) the successful implementation of three retrenchment plan for 4,354 SNCC employees eligible to retirement is a major project achievement. It resulted from negotiation between the Government and more than fifteen regional and national workers unions into an agreement that was validated by Ministerial decree in May 2013. The plan was executed using a detailed payment instruction manual that is setting a standard for good practice and could be replicated to conduct similar operations. The departure without social upheaval and in total financial transparency of the staff who have reached retirement age has eased the cash flow of the company; c) the track repair or rehabilitation works program was done in-house by SNCC and was not outsourced to a foreign company. The private operator implemented an approach tested and already used in Cameroon, Madagascar, Senegal and Mali but at a much smaller scale. It consists in acquiring or rehabilitating in-house the heavy equipment needed for track works, training (or refreshing) the staff operating these machines, producing sleepers locally in a slipper factory, training the supervision staff in-house and recruiting other labor locally, through local small businesses. This approach is cost effective, creates job locally, and entails a transfer of expertise and knowledge from the private operator to SNCC. With this knowledge, equipment and machine, SNCC has the technical capacity to conduct similar works and maintain the infrastructure.

25. Objective 3: strengthen transport state owned enterprises’ operational performances.

• Transport SOEs achieve improved operational performance targets. The original target was to have more than 3 SOEs, but the operational performance targets were defined in the intermediate indicators. For RVA, operational performance was measured by the average number of Air traffic system incidents (baseline of 12 aircraft proximity - AIRPROX and 78 losses of communication – COMMS). In 2018, RVA reported 2 AIRPROX and 12 COMMS. For RVF, performance was measure by the length of waterways with navigational aids and marking installed; target of more than 1,300 km was achieved with 1,424 km. Therefore, RVA and RVF are the two SOEs with improved operational performance. The project had no indicator to monitor CVM’s performance.

14 SNCC traffic volumes are well below the forecasts made in the PAD and at the time when the Additional Financing was approved in June 2013, and only slightly above volumes before project inception (210 million traffic unit per year versus 199 million in 2011).

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MTP’s contribution to improving both RVA and RVF performance was complementary to other donor funded projects. The European Union financed a Fluvial and Lacustrine Navigability Support Project (PANAV) for 60 million Euros at RVF in 2011-2018. This project followed MTP’s steps and supported in-house construction and installation of river markings on river Congo. At RVA, the African Development Bank financed (2010-2018) a US$ 102.86 million Priority Air Safety Project (PPSA), that included 11 ADB-S dependents on the system “Topsky” funded under MTP. Considering that both project supported similar activities that MTP at RVA and RVF, the ICR claims that the performance improvement cannot be attributed solely to MTP. • Adoption by individual transport SOEs of a governance plan. All participating SOEs (SNCC, SCTP, RVF, RVA, CVM, and AAC) approved a governance plan. Therefore, the initial target was exceeded (3) and the revised target (6) achieved. These governance plans included positive principles such as: Internal audit, procedure manual, management dashboard, and had a declarative emphasis on ethics. Yet, the overall scope of these governance plans could have been broader with the inclusion of other topic such as: investments and market; salaries of executives; content of the management report; and accounting and financial information. Also, the plans could have specified production deadlines and inclusion of auditor reports; the designation of external auditors (CAC), and stakeholder engagement. Specific measures, relating to clearly identified governance issues or weaknesses could have been included for each SOE, with a timetable for implementation. Table 5: Rating of achievement of PDO

PDO

Rating Before

Restructuring After 2013

restructuring After 2016

restructuring Relevance of Objective High Efficacy (PDO) PDO 1 to improve transport connectivity in the Recipient’s territory

Negligible

Negligible

Negligible

PDO 2 Restore SNCC financial and operational viability

Negligible

Negligible

Negligible

PDO 3 Strengthen transport state owned enterprises’ operational performances

Negligible

Negligible

Modest

Efficiency 1 Outcome ratings HU HU HU 2 Numerical value of

outcome ratings * 1 1 1

3 Disbursement 129.88 348.23 381.55 4 Share of disbursement 50.9% 80% 87% 5 Weighted value of outcome

rating (Row 2*Row 4) 0.5 0.8 0.87

6 Final Outcome Rating Unsatisfactory 2

(0.5+0.8+0.87=2.17 rounding it to 2) *Note: Highly Unsatisfactory (1); Unsatisfactory (2); Moderately Satisfactory (3); Satisfactory (4); Highly Satisfactory (5).

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Justification of Overall Efficacy Rating

26. The overall efficacy is rated Negligible since only a few of the PDO indicators were achieved. The project contributed to physically improve transport conditions in DRC on about 30% of SNCC’s network, fostered safer navigation on 9% of the national waterways network, and helped increase the surveillance of DRC’s airspace. However, SNCC financial situation in 2018 is worse than in 2010. The Government did not take the opportunity offered by the project to undertake railway sector reforms and one may consider that the Project has allowed the Government to delay more radical reforms of SNCC and the railway sector. SNCC’s operational performance has also deteriorated over the course of project implementation, with safety remaining a critical issue with more than one derailment per day on average despite significant investment in rolling stock and infrastructure. The modest achievement of PDO 2, linked to the negligible outcomes under Component 1 that accounts for 86 % of total project financing, weighs negatively on the overall project efficacy rating. C. EFFICIENCY

27. The economic analysis of the project focused on Component 1 as the largest impact was expected from SNCC’s recovery plan. The project did not calculate the economic impact of Components 2 and 3 as they involve activities with several institutions in different sub-sectors. Separate individual financial or economic rates of return for each benefiting SOE was not carried out due to the lack of baseline data (unavailability of certified financial account). 28. For component 1, the analysis was based on the information available at the time of preparation, when copper prices had not plummeted and when mining cargo was the largest and most profitable user of SNCC network. The main assumption of the analysis was that without the Project, SNCC would collapse at latest by the end of 2010, thus causing mining cargo to switch to road. The economic impact was evaluated against savings on road user costs (fuel expenditures), road maintenance costs, CO2 emission costs, reduced transport costs and benefits to the DRC by the increased export potential of mining goods. The total benefits to be generated by an operating and rehabilitated SNCC railway network was estimated equal to US$ 1.22 billion over a 20 years period. Considering that the modal shift of cargo mining was effective in 2010, the expected economic impact of the project was not achieved.

Assessment of Efficiency and Rating

29. Efficiency of the project is rated Negligible. Despite a large investment, MTP’s achievements are below expectations. The use of IDA funds to finance Operating costs (21% of Component 1) has been used in a limited number of other Bank operations (in Madagascar for the railway company MADARAIL) but did not achieve value for money. Considering the complexity of the project, the post-conflict situation, the vast geographic scope of intervention, MTP’s has prevented the collapse of SNCC in 2010 through rehabilitated or upgraded rolling stock and infrastructure that are at the core of SNCC operations and financed the construction of a slipper factory in Lubumbashi. The project has reduced staff by one third and put in place effective tools for management for monitoring operational and financial performance of the company, including accounting system that produce auditable accounts. Last, the project has strengthened SNCC’s staff capacity in workshops and for management infrastructure rehabilitation works. These works have created temporary jobs by employing local workforce who will be available for future works. The project also contributed to improve air safety by reducing the number of air traffic incidents and improved safety navigation over 1,300 km of waterways.

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D. JUSTIFICATION OF OVERALL OUTCOME RATING 30. As indicated earlier, the relevance of PDOs is rated High, given the high relevance of improving SOEs performance and governance in DRC. In addition, the revised PDOs indicators became even more relevant for the reasons explained earlier. Second, efficacy is rated Negligible given the MTP’s track record below expectations based on the PDO indicators and Intermediate Results Indicators. Third, efficiency is rated Negligible. Considering the DRC political context and for the reasons stated, the Overall Outcome is rated Unsatisfactory. E. OTHER OUTCOMES AND IMPACTS (IF ANY)

Gender

31. The original project included no gender gap assessment or activities to address gender-specific issues. Civil works contracts under Component 1 were revised to include GBV risks mitigation measures in December 2017.

Institutional Strengthening

32. SNCC, RVA, CVM, AAC and RVF benefited from capacity building and on-the-job trainings: • The project financed institutional diagnostics at RVF, DMVN and Ministry of Transport and Communication. However, no significant recommendations stemming from these diagnostics was implemented. For DMVN, trainings and equipment were budgeted but were eventually cancelled because the Government did not allocate a building to host DMVN and its staff in Kinshasa. PIU staff benefited from capacity building opportunities (approximatively US$ 200,000 budget per year, over 8 years). • At RVF, the project financed the in-house production and installation of river markings and in-house rehabilitation of river markings/buoy boat Mongala (from the 1930’s). RVF had not produced such equipment for decades and RVF management highlighted that the project allowed older staff to pass on knowledge to junior staff. • RVA and CVM capacity to respectively monitor airspace and monitor the Congolese maritime stretch between Matadi and Kinshasa was improved through the financing of air surveillance system (TopSky and 5 ADS-B) and two hydrographic boats. Staff of both entities were trained by the equipment suppliers. • In 2016, ICAO initiated a 2 years training program for AAC staff with a focus on airport certification. ICAO and AAC only implemented the first 6 months of the training program by the time of project closing. • All SOEs’ accounting department received technical assistance for establishing auditable accounts. • At SNCC, the in-house rehabilitation of rolling stock and to a limited extend of the track rehabilitation program (workforce was composed of temporary workers and not SNCC staff) contributed to put SNCC workshops back to work and build capacity.

33. Overall, the project’s contribution to institutional strengthening is significant but may not be sustainable due to the financial and social fragility of these SOEs. Mobilizing Private Sector Financing 36. MTP included one activity aiming at mobilizing private sector financing but this activity was not carried out. A study was planned with the objective to “review SNCC relationship with mining operators and [develop] a transparent tariff policy in support of mobilizing financing from mining companies. The Bank team consulted representative from the mining sector (Federation des Entreprises du Congo – mining chapter) in 2013 and 2015 in Lubumbashi to gauge

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their interest in investing in SNCC’s infrastructure, rolling stock or to operate parts of the network under concession agreements. Although these consultations did not materialize in mobilizing private capital, SNCC management has later signed agreements with at least two mining companies in the region of Kolwezi. A study on railway sector reforms including identifying PPP options was cancelled due to Government lack of commitment. The significant Bank-supported investment in rail track infrastructure through this project will remain for several decades and could facilitate attracting a sound private operator when a window of opportunity for more radical MFD-based reforms in the railway sector will open in DRC.

Poverty Reduction and Shared Prosperity

34. No data on poverty was collected at project closing to monitor and discuss potential outcome in terms of poverty reduction and shared prosperity. Other Unintended Outcomes and Impacts

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION

35. A five-year preparation phase and excessive delays to meet effectiveness conditions. The Bank and the Government initiated discussions and identification of a multimodal project inclusive of all modes of transport (air, railway, waterways and road) in 2005. During preparation it became clear, however, that: a) Road sub sector was requiring a specific and dedicated road project (i.e. later developed as the Pro Routes project) since the issues it faced were completely different than those other transport sub sectors, b) Among all transport SOEs, SNCC was the only one that could not use a monopolistic market position due to intermodal road/rail competition to extract revenues from captive end user. Accordingly, it could not bankroll the consequences of its excess labor headcount, noncommercial activities (e.g. school and health services) and predatory behavior of its public servants, c) the complexity of the issues faced by SNCC, in addition to its near terminal financial and operational situation, meant that only a “all or nothing” support to the company could be envisaged. Bank’s mission Aides-memoire reflect the challenge to reach an agreement with the Government and stakeholders on the project scope, concept and goals, implementation arrangements, and pre-feasibility documents prepared with delay by COPIREP. 36. Effectiveness conditions were met 270 days after the signing of the Financing Agreement. The effectiveness date was postponed by 6 months through three restructurings, due to serious difficulties the Government encountered to meet effectiveness conditions: signing of Financing Agreement (by way of Presidential Decree); the payment by the Government of US$ 4 million for SNCC retrenchment plan; the payment of US$ 11 million to support SNCC operational costs to be paid in the first quarter of 2011; the written confirmation of the US$ 200 million to be mobilized from the Government of China.

37. During the five-year period of preparation SNCC’s financial and operational situation deteriorated further, making the overall strategy and budget dedicated to SNCC less relevant. SNCC’s loss of mining cargo by 2009 was a critical event: after the 2007 ban to export raw mining products by the Government of Katanga province, followed by the sharp fall of copper price in 2008, mining companies progressively reduced their production targets. In 2009, a strike at SNCC lasted several months and further deteriorated the trust mining companies had. Mining cargo was

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switched to road transport and SNCC lost its largest clients and most profitable traffic.

38. SNCC’s project’s support was designed with the full understanding that it would be a high risk/high reward type of intervention. The Project Team was fully cognizant that the most logical way to support SNCC’s stabilization plan should have been to liquidate it once it had acquired its commercial status. This would have allowed the transfer of SNCC’s commercially viable activities and associated assets to a new commercial public company while legacy issues would have been left to the Government to sort out. This approach was made impossible for three key reasons: a) under the then existing DRC’s commercial law, liquidation could not be used to shield viable commercial assets from its creditors, b) SNCC’s predecessor, SNCZ, had been liquidated in 1997, yet its liquidation process was still underway in 2007/2008, making all but impossible to have a clean transfer of rail assets to a new company and, c) neither the central Government nor the Katanga Province, where 70% of SNCC’s 13,500 employees were located, showed any political will to carry out this drastic solution. With the liquidation solution off the table, the SNCC project component had to be designed holistically to address labor, organizational, governance and transparency issues. This explains the complex list of activities financed as well as associated covenant for this Project’s component. 39. A complex design including several transport SOEs justified by the World Bank’s willingness to participate in the SOE reform agenda. The option of financing small investment activities in the remaining transport SOEs was answering real needs but was also thought as an entry point to address the sector’s inefficiencies and abuse of monopoly. These SOEs associated excessive tariffs made then, and now, DRC’s ports and airports the most expensive to use in the World. Their negative impact on the country’s economic competitiveness and fight against poverty made it essential for the WB to have a “seat at the table” despite the added complexity that the inclusion of these SOEs did have on Project’s complexity.

40. While some incentives and remedies were included in project design, several exit strategies could have been anticipated and discussed more explicitly with the Government in case critical actions or reforms do not materialize during implementation. Considering the high risk of SNCC’s proposed reform agenda and the difficult institutional and business environment, project design could have envisaged more explicitly the triggers needed to provide more leverage to the Bank team during implementation. The original FA did have 25 legal covenants/disbursement conditions. However, some of them were too ambitious or complex given the difficult political economy of implementing SOE reform in DRC. As a result, key covenants were not complied with, including the followings: “The government shall adopt by not later than December 31, 2011 a national plan for the cross-debt annulment of the SOEs, including RVA, RVF, CVM (ex-RVM), ONATRA and SNCC, under terms and conditions satisfactory to IDA and shall cause said agencies to implement the plan thereafter”; “The government shall cause SNCC to carry out by not later than March 31, 2011, a plan for the liquidation of the SNCC salary arrears and social debt, not financed with the financial assistance of IDA, for all its employees and voluntarily departed eligible retirees as of December 31, 2010, under terms satisfactory to IDA”; and ”The government shall throughout the implementation of the Project avoid, and shall cause entities under its authority to avoid, taking any action or omitting to take any action which might jeopardize the financial and operational viability of RVA, RVF, CVM (ex-RVM), ONATRA and SNCC”. 41. Overestimated Government financing capacity. Project design overestimated the Government's capacity to contribute to the financing of the Project. The Government was to contribute US$ 348 million under the original financing and US$ 255 million at the AF15. The Government’s contribution amounted to US$ 111.59 million between

15 For the original financing, the Government was to contribute (i) US $ 200 million for investment in rolling stock and track with the SNCC with Chinese funding, (ii) US $ 44 million for SNCC operational costs, and (iii) US $ 104 million for the SNCC agents' salary arrears; and under the AF these amounts were revised as follows: (i) USD 97 million for investment in rolling stock and track at SNCC, (ii) USD 44 million for SNCC operational costs, and (iii) USD 114 million for SNCC staff salary arrears.

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2010 and 2018 and these payments were irregular and unpredictable. For example, the Bank was informed only with delays of several important acquisitions (such as of 20 locomotives) or payments (eg. salaries or salary arrears for retirees).

B. KEY FACTORS DURING IMPLEMENTATION

42. The project was based on a number of assumptions (see Theory of Change), relative to the Government’s commitment and to SOEs’ behavior, that did not materialize and impacted negatively project implementation. The tools incorporated in the project design, such as legal covenants and disbursement conditions, were not utilized or could not be utilized to correct implementation.

a. Financing of operating costs by the Project proceeds is temporary, it will allow SNCC to continue operations during the time of rolling stock and infrastructure renewal and will not be necessary afterwards (assumptions 2 and 3). Delays for the implementation of the investment program at SNCC and the Government’s failure to pay operating costs and additional retrenchment plans challenged MTP strategy: MTP concept was that the investment program (tracks and rolling stocks) would be implemented in parallel with the financing of operating expenses. This strategy aimed at ensuring the SNCC could operate until its production capacity was restored through the Project. Unfortunately, by the time SNCC benefited from rehabilitated infrastructure and rolling stock (2016-2018), operational support from the Project had run out (2015) and the Government failed at honoring expected payments in support of salaries and operating costs. SNCC was never able to reap the benefits expected from the investment program because it could not finance its operating costs. b. New /rehabilitated rolling stock and infrastructure will be maintained by SNCC (assumption 4). SNCC was also not able to finance the maintenance of its rolling stock and infrastructure to reduce significantly its rate of incidents.

c. Managing methods and practices brought by technical assistance will be accepted and mainstreamed in the SNCC management practices after project closing (assumption 5). There was an excessive optimism in the influence and impact that the external technical and management advisor could have on the financial and operational standing of SNCC. The hiring of a private operator was thought to have sufficient influence and a clear mandate to improve SNCC’s internal processes and managerial practices. However, the private operator’s role and mandate were gradually reduced and did not have a sufficient leverage to change the internal culture, curb the SOE’s vast inefficiencies and implement the cost-saving measures agreed with the Bank.

43. The Additional Financing of 2013 was mostly designed to close a financing gap and not to take corrective actions. The large financing gap in the original project that was expected to be parallel-financed by an official credit line from the Government of China of US$ 200 million that did not materialize. This gap justified the preparation of an additional financing, that increased the amount dedicated mainly to SNCC’s operating costs. When the AF was prepared, although intermediate key indicators targets were not achieved, there was still hope that SNCC production would pick up, once rehabilitation works on tracks and rolling stock would be completed. The project had financed the leasing of locomotives and the AF would finance 20 new locomotives (18 eventually) to increase SNCC transport

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capacity. The global theory of change was not challenged, and the Bank considered it worth pursuing and increasing its support to SNCC and increasing the project’s scope to include AAC and DMVN and expand activities at RVF. 44. Lack of government commitment for advancing sector reforms. Institutional reforms for waterways, and trade facilitation recommendations stemming from studies financed by the project were not taken into consideration by the Government. This mainly due to the weak institutional and technical capacity of the Government and SOEs, and by ministerial rotation (since 2011, DRC had six Governments and five ministers of Transport). Before launching institutional diagnostics (MoT, RVF) or sectoral studies (on trade facilitation), the project should have more carefully assessed the Government’s willingness to reform the sector and built stronger buy-in from the Government when these diagnostics were finalized and validated by stakeholders. The project also failed at garnering support from the Ministry of Transport and of the Ministry of Portfolio behind a roadmap for reforming the railway sector and for refocusing SNCC on its core business. The sensitivity of the reform and the financial stake of such reform was possibly underestimated by the Bank.

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E)

M&E Design 45. The original M&E framework could have been more clearly linked to the PDO. For instance, PDO 1 (to improve transport connectivity in the Recipient’s territory to support national economic integration) could have been measured taking also into account other transport modes, even if a significant part of project financing was going into the railway sector. Indeed, air and river transport are key mobility features of DRC. In addition, indicators for PDO 3 “implement a sector wide governance plan and strengthen transport state owned enterprises’ operational performances” could have been defined more precisely, with explicit targets and baseline to measure SOEs operational performances. 46. Many initial targets values were overestimated. Few of the targets were achieved except the indicator on “cumulative length of rehabilitated and upgraded rail track”, and many had to be reduced through successive restructurings. Key operational and financial performance indicators of SNCC were over-optimistic. As a result, multiple project restructurings had to be processed to set more realistic targets and to align indicators with activities. By the project’s closing date, 2 of the 9 initial PDO indicators had been dropped and replaced by new indicators, 3 of the 8 initial intermediate indicators had been dropped and 4 intermediate indicators had been added.

M&E Implementation

47. Data collection instruments were a mix of operational reports prepared by the PIU or by recipient SOEs. Indicators were monitored by two full-time M&E officers assigned in Kinshasa and in Lubumbashi. Only 3 indicators were directly produced by the PIUs while the 15 others were produced by beneficiary SOEs (SCTP, SNCC, RVA). SNCC, with the support of the technical assistance provided data on a timely manner. RVA on the contrary did not share information for

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several years (2013-2018) and allowed M&E officers to complete the Result Framework only a few months before project closing.

M&E Utilization 48. Despite its limitations, the M&E framework highlighted as early as 2013 that the PDOs would most likely not be achieved. However, the measurement of the project’s poor performance status imperfectly informed the discussion on the opportunity to adopt more radical restructurings or to envisage an exit strategy. Some key indicators and targets were revised in a realistic manner only with the 2016 restructuring. This late restructuring redefined the scope and expected outcome of component 3 and introduced indicators for the river marking activity. It however maintained unrealistic targets for Component 1. Moreover, monthly and quarterly reports prepared by UPK and UPL, or documentation prepared by CEPTM prior to Bank supervision missions show a strong focus on monitoring procurement implementation progress rather than on outputs and outcomes.

Justification of Overall Rating of Quality of M&E

49. The overall quality of M&E is rated Modest due to the limitations of M&E design explained above that prevented a more precise and realistic assessment of the project’s objectives and outcomes. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE

Environmental and social compliance

50. Overall safeguards performance was rated Satisfactory during implementation. The project was assigned environmental category B with no significant adverse environmental impacts expected. Safeguards policies triggered include: Environmental Assessment (OP 4.01), Physical Cultural Resources (OP 4.11), Indigenous Peoples (OP 4.10); and Involuntary Resettlement (OP 4.12.). All required safeguards documents were prepared and disclosed (see table 6 below). Table 6: List of safeguards documents and date of disclosure

Document Date of disclosure ISDS [AC1475] Prepared June 30, 2005 and disclosed July 1, 2005 Initial Appraisal ISDS [AC5076] Prepared April 27, 2010 and disclosed July 1,2010

Revised Appraisal ISDS [54597] Prepared May 10, 2010 and disclosed Revised Appraisal ISDS [55100] Prepared June 17, 2010 and disclosed July 1, 2010 ISDS Additional Financing [AC6662] Prepared March 19, 2012 and disclosed March 21, 2012 • Environmental Impact Assessment (Vol 1.) E2998 • Environmental and Social Management Framework

(Vol 1.) E2346 • Resettlement Policy Framework (Vol 2.) RP1279 • Indigenous Peoples Planning Framework (Vol.2); IPP

562, IPP 561 • Cultural Heritage Framework (Vol.2) • HIV/AIDS Framework (Vol.2)

3 volumes dated July 1, 2008, disclosed in country December 31, 2009 and disclosed on Infoshop of March 6, 2012

Environmental and Social Impact Assessment for railways works (ESIA)

Executive summary of ESIA disclosed at the Bank and at the country level on December 4, 2017

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Site-specific Environmental and Social Management Plans (C-ESMPs) for railways works

Each works protocol (N09, N10, N11, N97) included a C-ESMP

Grievance Redress Mechanism GRM included in the Project Implementation Manual prepared at effectiveness. GRM improved in December 2017

Fiduciary Compliance 51. Financial management was overall rated satisfactory by the Bank (moderately satisfactory or satisfactory) in the context of substantial fiduciary risk. CEPTM financial management team was composed of 8 staff (4 in Kinshasa and 4 in Lubumbashi) as follows: 1 Financial Management specialist, 1 treasurer, 1 accountant and 1 internal auditor. Quarterly financial reports were prepared on time and submitted satisfactorily to the Bank. Annual external audits were also processed satisfactorily, and auditors issued unqualified opinions. Considering the complexity of Financial Management, with the number of beneficiaries, of transactions and of disbursement categories, the ICR rates financial management as satisfactory.

52. Procurement management was overall rated satisfactory by the Bank (moderately satisfactory or satisfactory) in the context of substantial fiduciary risk. CEPTM procurement team was composed of 7 staff (3 in Kinshasa and 4 in Lubumbashi) as follows: in Kinshasa, the team included 1 Lead Procurement specialist, 1 Procurement specialist and 1 procurement assistant; in Lubumbashi, the team was composed of 1 Lead Procurement specialist, 2 Procurement specialists and 1 procurement assistant. The preparation of procurement packages and bidding review processes suffered from the lack of technical capacity of SOEs staff but also from delays on the Bank side for clearance. The World Bank Integrity Service (INT) recently concluded two cases of corrupt and fraudulent practices under the Project. The findings also identified potential integrity risks within the Project. Based on the above, the ICR rates procurement management as moderately satisfactory.

C. BANK PERFORMANCE

Quality at Entry 53. The Bank initiated preparation of the MTP in 2005 and held extensive consultations with various stakeholders. Project design evolved significantly during the five years of preparation. Its scope included roads and dredging of Kinshasa ports for instance and was later simplified with a strong focus on SNCC. However, the Bank could have been more selective in the number of SOEs and most importantly on the nature of support provided to them. Implementation arrangement were also too complex with 25 legal covenants and 15 disbursement categories that created implementation challenges for both the Borrower and the Bank (see paragraph 41) and had to be revised several times. 54. During project appraisal, the lack of accurate and reliable economic and financial data available in the participating SOEs, including the SNCC, did not help to have a good understanding of the operational and financial situation. Hence, this has led to set up an unrealistic project development objective such as “restoring the financial and operational viability of SNCC”. Reliable accounting processes were however developed later with the assistance of the private operator and the first auditable account were prepared in 2012. RVF, RVA, AAC and CVM benefited from technical assistance funded under the project to help prepare auditable accounts. The highly ambitious institutional objectives could have been underpinned by a more robust evaluation of SOEs governance or political economy. Institutional diagnostics were left for implementation phase, deferring the identification of concrete action plans.

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55. Choice of instrument: A programmatic using of an APL lending instrument or phased approached would have given leverage and flexibility to the Bank and a possibility to react should the Government failed to honor its commitments. This option was discarded during project preparation because it was perceived as if it would lessen the pressure on the Government to deliver against its financing obligations.

Quality of Supervision

56. There was a high turnover of Task Team Leaders (TTLs) and core team members. The project had 7 TTLs over an 8 years project life. However, these TTLs were all highly seasoned. This turnover created uncertainty for the Client as new TTLs needed some time to command this complex project and context. Participation of core team members during supervision missions could have also been more systematic. A finance specialist, with auditing background supported the team between 2011 and 2015 to review SNCC accounts. Financial Management, Procurement and safeguards World Bank specialists carried out their own mission, joining the TTL only occasionally. 57. While insecurity has affected the ability to visit some project sites, field visits by the World Bank team could have included additional project areas. All TTLs (except at the very end of project implementation) were based in Washington DC. Extensive missions were carried out during preparation until 2013, when the geographic scope has narrowed to PIU offices based in Kinshasa et Lubumbashi and site visits to Beach Ngobila, RVF workshops, Ndjili airport, and SNCC tracks near Lubumbashi. One mission scheduled to visit SNCC network in Kasai was cancelled due to the rapidly deteriorating security conditions in 2016-2017. The Bank only visited Boma (headquarters of CVM) during preparation and for the closing mission and did not visit sites where river markings were installed. 58. High volume of transaction for the fiduciary team. The project had 417 items in the Procurement Plan (211 under UPL, and 206 under UPK). The procurement should have been consolidated in view of economies of scale and efficiency. This large volume of transaction affected the timeliness of Bank’s response.

59. The mid-term review of September 2013 could have offered an opportunity for a more radical project restructuring or even the start of an exit strategy. The mid-term review took place two months after the Restructuring and Additional financing of US$ 180 million (June 2013). In the context of a low project performance, the Bank chose to continue the approach initially envisaged with the hope that the situation could be turned around. This involved difficult trade-offs given the very high developmental role of the railway sector in DRC. Retrospectively, this may have been an overly optimistic course of action and more radical mid-course corrections should possibly have been envisaged. At the time of closing, the railway sector has a clear relevance and future in DRC but that SNCC has become a liability rather than an asset in order to develop the sector.

60. Activation of Bank’s remedies. The MTP had numerous non-complied legal covenant and disbursement conditions that could have led the Bank to suspend or cancel the operation. Although suggested by the project team in 2014 and 2015, suspension of Component 1 did not occur as this would have had negative impact on the Bank-Government relationship. This reflects the complex political economy surrounding the DRC railway sector and the company’s key role in the country’s economy and social integration. The sensitivity around the project was also illustrated by the Government’s insistence on extending the Project closing date beyond June 2018 despite its negative rating.

Justification of Overall Rating of Bank Performance

61. The overall World Bank performance is rated moderately unsatisfactory.

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D. RISK TO DEVELOPMENT OUTCOME 62. The risk to development outcome is rated High. As discussed above, SNCC remains in critical financial condition (bankrupt and insolvent) and is not able to provide safe transport. For project’s outputs and despite the dialogue between the Bank and the Government on this issue, it is uncertain whether the infrastructures - railway tracks and buildings - and equipment will be adequately maintained and whether they will not deteriorate quickly since the project has not been able to incorporate in its design mechanisms to finance the maintenance of equipment beyond the project’s life.

V. LESSONS AND RECOMMENDATIONS 63. Need to keep project design simple in fragile environment. In a post-conflict country, characterized by weak implementation capacity, political inertia, powerful vested interests and predatory behavior, it is critical to manage expectations, limit the scope of intervention and leave space to scale-up only once positive initial results are achieved. 64. Regaining customers confidence was an underestimated challenge. The railway line of business in DRC is predominantly an international mining activity. By project completion, SNCC traffic volumes are six times less than the traffic transported in 1999 (2.0 million tones/year) and there has been no increase in traffic since the start of the project. The high fixed costs of the 3,500 km of track cannot be covered by carrying only 0.4 m tones/year. The increase in traffic remained an essential basic task for the SNCC to survive under the current conditions as the fleet of locomotives and wagons was renewed and the track rehabilitated. In this context, the resumption of the international mining traffic was the most important objective of the SNCC, because the cargo domestic market is limited and not sufficient to reach a satisfactory operational and financial performance. However, the SNCC tariff is three times higher than the road tariff. It is therefore non-competitive, and most mining products are transported by road. There is a derailment/day as much as at the start of the PTM. Regaining the mining sector confidence in this context has proved a challenge due mainly to SNCC poor management performance, operational unreliability and poor safety records. 65. Providing and improving physical investment alone cannot turn around a failing railway business: the project has achieved and sometimes has exceeded (i.e. track rehabilitation) its targeted outputs. However, the assumption that the operational and financial performance of the SNCC would improve as a result of investments in rail assets proved not correct. The problems of the SNCC are much deeper than the non-availability of modern assets and are strongly related to the lack of reform at the SNCC (not necessarily privatization), including the loss of skilled workers, lack of motivation and poor management practices that are widespread among the company. 66. The private operator hired initially under a quasi-management contract16 was reduced to a role of technical assistance. A key project component, the role of the private operator was reduced from a performance contract management to technical assistance. At the start of the project, the technical assistance team has 13 experts including decision level functions17. These arrangements worked till 2015 but could not be sustained as the Government did not commit to structural railway reforms. The private operator team was gradually reduced to 5 experts by the end of the project. The technical assistance proved to be beneficial in supervising track works and to training SNCC staff. However, its new reduced mandate could not influence key management decisions to curb the SOE’s vast inefficiencies and

16 An initial quasi contract management with delegated leadership responsibility/power without linking payments to SNCC performance worked till 2015 but could not be sustained as Government did not commit to structural railway reforms. 17 Director of the Board, Deputy General Director, Secretary General, Financial Director, Director of Management Control and Project Monitoring, Director of Infrastructures; Director of Operations; Deputy Technical Director, Director of accounting, Director of Transport, Director of track works

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implement the cost-saving measures agreed with the Bank. 67. Making good use of the opportunity provided by project restructuring to improving project implementation performance. The project did not make good use of the project restructuring opportunity to address project implementation issues and press for railway reforms. By 2015, it became clear that the project will not achieve its development objectives without major railway reforms, as envisaged by the initial project design (2010). Railway reforms were no longer part of the Government priority agenda. Workshops to initiate and discuss railway reforms were cancelled and studies to inform SNCC restructuring were delayed. The Bank has lost the opportunity to influence government decisions and project implementation performance through project restructuring. 68. In the context of a complex political economy such as DRC, difficult development objectives such as reforming the SNCC must be evaluated with realism and multiple implementation scenarios and exit strategies must be built in project design. DRC had five governments and six transport Ministers during project implementation. Incentives for Government authorities to overcome vested interests and commit to the envisaged reforms must be constantly evaluated and possibly revisited when the project starts to go off-track. If no window of opportunities to conduct critical reforms materialize, more radical exit strategies need to be envisaged at an earlier stage of project implementation. 69. World Bank support to the transport sector in DRC must be underpinned by a national strategy and by a clear commitment from the Government. In the absence of a clear orientation for railway and waterways, except for air transport, MTP eventually financed piece meal activities across sub-sectors. The Government was not in a position (poor technical capacity and lack of willingness) to take ownership of the studies carried out on waterways sector reform and to incorporate the recommendation into a roadmap. The Bank is however actively participating in the preparation of a National Plan for Transport and Logistics financed by the African Development Bank that would serve this purpose. Similarly, for the reform of the railway sector, the absence of support from the Ministry of Transport and of the Ministry of Portfolio behind a roadmap prevented the project from achieving its development objective.

70. As noted in the latest Completion Learning Review of the CAS (2017) this project may illustrate that a judicious combination of instruments could have been more effective in supporting policy changes, including the use of an APL as a lending instrument. A World Bank Group supported program that is almost exclusively composed of Investment Project Financing is not very effective in dealing with policy reforms. IPFs need to be complemented with other instruments that are more effective in facilitating a policy reform agenda. Results-based approaches, where applicable, have proved to be effective tools in galvanizing reform processes and should be encouraged and used as appropriate. .


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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve transport connectivity in DRC

Indicator Name Unit of Measure Baseline Original Target Formally Revised Target

Actual Achieved at Completion

Direct project beneficiaries Number 1500000.00 1750000.00 30000.00 10120.00

31-Dec-2009 15-Apr-2011 29-Nov-2016 30-Jun-2018

Female beneficiaries Percentage 0.00 0.00 0.00 50.00

31-Dec-2009 15-Apr-2011 29-Nov-2016 30-Jun-2018

Comments (achievements against targets): The original target accounted for the total number of rail passengers transported by SNCC and SCTP. The target was revised in 2013 to only monitor SNCC passengers and reduced to "over 100,000" units. Target was again reduced in 2016 to "over 30,000" passengers. Project achieved 33% of end target. There was no baseline data nor any target defined for the share of female beneficiaries in the PAD. The result framework indicated that an NGO would he hired to conduct spot surveys. The project later assumed that 50% of passenger were female, and this assumption was followed until project closing. Objective/Outcome: Restore SNCC's financial and operational viability


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SNCC: Mainline locomotives dispatch reliability (breakdowns per 100,000 km)

Number 75.00 10.00 25.00

31-Dec-2009 15-Apr-2011 30-Jun-2018

Comments (achievements against targets): The reliability of SNCC mainline locomotives significantly improved over the course of project implementation, reaching 25 breakdowns per 100,000kms (77% of target). This positive results was achieved through the leasing of locomotives until 2015 and the purchase of new locomotives put in service in 2017-2018. The end result is below target because, the replacement of old locomotives is progressive and because trains still operate on tracks in poor condition, since track rehabilitation works financed by the Project were covering 35% of SNCC network.



SNCC: Total transport volumes in Traffic Units (TU millions)

Number 185.00 700.00 152.00 152.70

31-Dec-2009 15-Apr-2011 29-Nov-2016 30-Jun-2018

Comments (achievements against targets): Revised end target was reached at 100% at project completion. The total transport volume is lower that the baseline, due to the loss of cargo mining and security conditions in the Kasai since 2015 that negatively impacted transport to this province.



SNCC: Staff productivity Number 17700.00 70000.00 16000.00 28147.00


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(TU/staff/year) 31-Dec-2009 15-Apr-2011 29-Nov-2016 30-Jun-2018

Comments (achievements against targets): Based on transport volume of 201 million TU and a staff of 7,141 (as of Mai 2018), the staff productivity reached in 2018 is 28,147 TU/staff/year. This indicators reached 40% of target, but illustrates the positive impact of the retrenchment plans that allowed 4,354 staff to retire.



SNCC: Cash flow from operations before Interests, Taxes and Amortization (million US$)

Amount(USD) -35.00 15.00 -100.00 -100.00

31-Dec-2009 15-Apr-2011 29-Nov-2016 30-Jun-2018

Comments (achievements against targets): EBITA did not improve but has stabilized around USD -100 million since 2015. Objective/Outcome: Strengthen transport SOEs' operational performance



Number of transport SOEs to achieve improvement of operational performance targets

Number 0.00 3.00 4.00 2.00

31-Dec-2009 15-Apr-2011 15-May-2013 30-Jun-2018

Comments (achievements against targets): Operational performance targets were defined in the intermediate indicators. For RVA, operational performance was measure by the average number of Air traffic system incidents (baseline of 12 aircraft proximity - AIRPROX and 78 losses of communication – COMMS). In 2018, RVA reported 2 AIRPROX and 12 COMMS. For RVF, performance was measure by the length of waterways with navigational aids and marking installed; target of more than 1,300 km was achieved with 1,424 km. Therefore, RVA and RVF


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are the two SOEs with improved operational performance. No indicator was designed to monitor performance of CVM or AAC.



Number of individual transport SOEs to adopt a governance plan

Number 0.00 3.00 6.00 6.00

31-Dec-2009 15-Apr-2011 15-May-2013 30-Jun-2018

Comments (achievements against targets): Target was achieved with all entities (SNCC, RVA, RVF, CVM, SCTP, AAC) having adopted a governance plan: SNCC, CVM, SCTP and RVA in March 2013, RVF in April 2013, and AAC in July 2015.

A.2 Intermediate Results Indicators

Component: Component 1: SNCC recovery plan



SNCC: Cumulative length of rehabilitated and upgraded rail track

Kilometers 0.00 600.00 1300.00 1262.00

31-Dec-2009 31-Dec-2015 09-Nov-2016 30-Jun-2018

Comments (achievements against targets): Original target was exceeded by 210% and revised target of 1,300 km was almost achieved (97%) with rehabilitation of 1,262 km of tracks and including 108km of complete renewal.



SNCC: Cumulative number of Number 0.00 3500.00 3500.00 4354.00


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staff taking retirement 31-Dec-2009 31-Dec-2015 31-Dec-2017 31-Mar-2017

Comments (achievements against targets): Target is exceeded at 124%. This successful completion of complex retrenchment plan of approximatively one third of SNCC's staff is one the most significant achievement of the project, that helped SNCC reduce its social debt. Component: Component 2: Operational performance strengthening and improved governance of the sector



RVA: Cumulative number of ADS-B systems installed

Number 0.00 5.00 5.00

31-Dec-2009 31-Dec-2015 31-Mar-2017

Comments (achievements against targets): The 5 Automated Dependent Surveillance-Broadcast (ADS-B) were installed in Kinshasa, Lubumbashi, Kisangani, Mbandaka, and Ilebo. The two latest were not functional at project closing due to unreliable access to power.



RVA: Average annual number of Air Traffic System (ATS) incidents (airprox)

Number 12.00 5.00 3.00 2.00

31-Dec-2009 31-Dec-2015 15-May-2013 30-Jun-2018

Comments (achievements against targets): Average number aircraft proximity traffic incidents - AIRPROX - was reduced significantly from 12 to 2 incidents reported yearly. This result can be attributed to improved surveillance of airspace through the use of ADS-B and TopSky system and the availability of precise GPS-derived data for controllers. MTP contributed with 5 ADB-S and a project financed by the African Development Bank installed 16 ADB-S.


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RVA: Average annual number of Air Traffic System (ATS) incidents (comms)

Number 78.00 20.00 15.00 12.00

31-Dec-2009 31-Dec-2015 15-May-2013 30-Jun-2018

Comments (achievements against targets): Average number of losses of communication – COMMS - was reduced significantly from 78 to 12 per year. Revised target of 15 COMMS was exceeded by 104%.



Completion of annual procurement and financial audits of SOEs

Yes/No N Y Y

31-Dec-2009 31-Dec-2015 31-Mar-2017

Comments (achievements against targets): Originally, annual procurement and financial audits were planned for RVA, CVM, SCTP. This activity was extended to AAC and RVF in 2013, and cancelled for SCTP when the SOE withdrew from project. Overall, target is achieved, with four SOE completing annual audits between 2012 and 2017 (audits could not be completed in 2018 since the project closed before the end of the fiscal year.



Length of waterways with Navigational aids and markings installed by RVF

Kilometers 0.00 1500.00 1424.00

01-Nov-2016 30-Jun-2018 30-Jun-2018

Comments (achievements against targets): This indicator was added in 2016 to address the lack of indicator monitoring RVF's achievements.


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Target can be considered fully achieved (95%). Component: Component 3: International trade procedures simplification



Average passenger transit time at Beach Ngobila passenger terminal

Hours 1.00 0.50 5.00

09-Jul-2014 30-Jun-2018 31-Mar-2017

Comments (achievements against targets): New Indicator added in 2014. Beach Ngobila terminal was not operational at the time of project closing, and performance could not be measured. Target is considered not achieved.



The National Committee on Transport and Trade Facilitation is in place and effective

Yes/No N Y N

09-Jul-2014 30-Jun-2018 30-Jun-2018

Comments (achievements against targets): New indicator added in 2014. The National Committee was not created. The Government considered this Committee redundant and would not support its operating costs. Target is considered not achieved.


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c B. KEY OUTPUTS BY COMPONENT

Objective/Outcome 1 Improve transport connectivity in the Recipient’s territory

Outcome Indicators 1. Direct project beneficiaries (number), of which female (percentage)

Intermediate Results Indicators

1. Average passenger transit time at Beach Ngobila passenger terminal 2. The National Committee on Transport and Trade Facilitation is in place and effective

Key Outputs by Component (linked to the achievement of the Objective/Outcome 1)

Component 1 SNCC recovery plan 1. See outputs detailed under Outcome 2. Outputs under Component 1 contribute indistinctly to outcome

1 (direct project beneficiaries, defined as SNCC passengers) and outcome 2. Component 2: Operational performance strengthening and improved governance of the sector N/A Component 3: International trade procedures simplification and infrastructure investments

• Study « Obstacles au commerce international le long des principaux axes de la RDC », August 2013 – financed by Trade Facilitation Facility Trust Fund (Fonds pour la Facilitation des Echanges)

• Workshop on Trade facilitation January 22-24, 2014 in Kinshasa • The project helped prepare an action plan for the improvement of international trade. The

Government has not followed up the action plan. • A Trade facilitation committee was created but has no clear road map nor budget. • The project financed the construction of a passenger terminal for the river ferry crossing between

Kinshasa and Brazzaville. This terminal is completed and fully equipped since July 2017 but is not operated by SCTP (Société Commerciale des Transports et des Ports). The building has been deteriorating since.


39

Objective/Outcome 2 Restore SNCC’s financial and operational viability

Outcome Indicators

1. SNCC’s total transport volumes in Traffic Units (TU); 2. Mainline locomotives dispatch reliability (breakdowns per 100,000 km) 3. Staff productivity (TU/staff/year) 4. SNCC’s Cash flow from operations before Interest, Taxes and Amortization (EBITA per year)

Intermediate Results Indicators 1. Cumulative length of rehabilitated and upgraded rail tracks (km) 2. Length of track under maintenance 3. Cumulative number of staff retired

Key Outputs by Component (linked to the achievement of the Objective/Outcome 2)

Component 1 SNCC recovery plan 1. Works: the rehabilitation of 1,262 km of tracks, against a target of 1,300 km; and including 108km of

complete renewal (see details in table page 40 below); the construction of a slipper factory and the production of 168 487 bi-bloc concrete slippers;

2. Rolling stock: the rehabilitation of 732 freight wagons (against a target of 600), 10 passengers’ wagons (against a target of 50), 52 wagons for ballast (against a target of 60). The project increased SNCC powered capacity, the rehabilitation of 8 locomotives and 5 switch locomotives and the purchase of 18 new locomotives in 2015 and put into service in 2017;

3. Operational costs (US$ 127 million): between September 2011 and July 2015, the MTP financed US$ 45 million of fuel, lubricants, the leasing of 20 locomotives between 2012 and 2016, spare parts;

4. Other equipment: acquisition 8 dump-trucks (2013), 18 vehicles (cars and ambulances) and 3 backhoe loaders (2014) and 7 vans (2015); acquisition and installation of 3 weigh bridges in Kolwezi (operational), Fungurume and Ilebo in 2016 (under maintenance) and two weighing systems for Kalemie and Kananga (still in workshops in Lubumbashi)

5. 3 Retrenchment plans (US$ 50,96 million): allowed to retire 4,354 SNCC employees eligible for retirement (nearly a third of the permanent staff of SNCC at the time of project appraisal);

6. Maintenance program established in 2017 on 6 high risk area to reduce derailment risk. 7. Technical assistance contract of VECTURIS (2011-2018). Assistance to the Government and SNCC

consisted in providing permanent experts in the fields of operation, renewal and rehabilitation of the track, rehabilitation of rolling stock, finance management, cost control, and project monitoring. In 2011-2013, the technical assistance was composed of a team of 13 experts with the following charge: Director of the Board, Deputy General Director, Secretary General, Financial Director, Director of Management


40

Control and Project Monitoring, Director of Infrastructures; Director of Operations; Deputy Technical Director, Director of accounting, Director of Transport, Director of track works. The technical assistant also provided two experts (Financial Management specialist and Procurement specialist at the PIU based in Lubumbashi) for the whole project duration. The team composition was progressively reduced to 7 (5 SNCC + 2 UPL) in 2015-2017 and to 5 (3+2) at project closing.

Component 2: Operational performance strengthening and improved governance of the sector 8. Adoption of SNCC governance plan in March 2013 Component 3: International trade procedures simplification and infrastructure investments N/A

Objective/Outcome 3 To strengthen transport state owned enterprises’ operational performances

Outcome Indicators 1. Transport SOEs achieve improved operational performance targets 2. Adoption by individual transport SOEs of a governance plan

Intermediate Results Indicators

1. RVA: Number of ADS-B systems installed 2. RVA: Average annual number of Air Traffic System (ATS) incidents 3. Annual procurement and financial audits of SOEs completed 4. Length (km) of waterways with Navigational Aids and markings installed by RVF

Key Outputs by Component

Component 1 SNCC recovery plan N/A Component 2: Operational performance strengthening and improved governance of the sector

1. Preparation of Governance plans by COPIREP and adoption by the Boards of SNCC, RVA, RVF, CVM, SCTP

To the benefit of RVF


41

2. Institutional diagnostic of RVF (US$ 194,880, completed in October 2014); action plan was not implemented

3. Study on the creation of a Waterways Maintenance Fund (US$ 144,100, completed in August 2013); No funding mechanisms had been established by project closing.

4. RVF social plan: 70 employees eligible to retirement were able to retire in 2016, and an additional 18 employees retired in 2017 (US$ 2.0 million)

5. Rehabilitation of river marking boat Mongala (2014 – 2018; initial budget of US$ 400,000; final cost of US$ 874, 287

6. River markings construction: a total of 1,172 fixed and 33 floating navigation aids built 7. River markings installation over 1,424 km:

• Mongala river – 329 km completed in September 2017; 4 water gauges (Akula, Binga, Likimi, Businga)

• Lua river 141km completed in February 2018; 4 water gauges (Dongo, Ekuta, Mogalo, Maindombe)

• Lualaba river, between Kongolo and Bukama (646km) completed in February 2018, 16 water gauges (ecrire les localites)

• Lualaba river, between Ubundu and Kindu (308km) completed in February 2018, 13 water gauges

8. Hydrographic studies completed, and navigation album updated over 2,804 km for the following rivers: Kwilu (329 km), Sankuru (575km), Haut-Kasai (180km); M’Fimi (166km), Lukénie (729km) completed in March 2016, rivers Ruki (103 km), Busira (202 km) and Tshuapa (520 km) completed in March 2017.

9. Acquisition of two navigation aids tenders (USD$ 4,9 m): contract signed in December 2016 and boats were delivered in kit in Kongolo and Kindu but not fully assembled (48%) and operational by project closing date. The Government is financing assembly.

10. Training of boat operators (20 on Ubundu-Kindu and 20 on Kongolo- Bukama) – cancelled. To the benefit of CVM

11. Acquisition of two hydrographic boats (US$ 2 million); Equipment shipped to Boma in 2013 and operational in 2017;


42

To the benefit of DMVN 12. National Conference on Waterways, August 27-29, 2012 13. Equipment and capacity building for 60 staff: activities cancelled due to the unavailability of office

spaces 14. Update of the Waterways Navigation Code: activity cancelled in 2017 after bidding process for

consultant services was unsuccessful. To the benefit of Ministry of Transport and Communication

15. Institutional diagnostic completed in 2014. Trainings of 20 inspectors for waterways navigation completed in 2017

16. Rehabilitation of the Minister office completed in 2013. To the benefit of AAC

17. Certification campaign of 5 air companies completed in 2016 with 3 companies (FlyCAA, Air Tropique et Kin Avia) out of 5 passing certification. Certificate of Air Carrier was not issued.

18. Technical assistance/ training program by ICAO. USD 2.6 million, over 24 months). After 18 months of implementation only 50% of the program was completed.

To the benefit of RVA

19. supply and installation of air navigation and control system at Kinshasa (Topsky, completed in 2016) 5 Automated Dependent Surveillance-Broadcast (ADS-B) in Kinshasa, Lubumbashi, Kisangani, Mbandaka, Ilebo and training of 25 ATC. Equipment was not in operation at the time of project closing due to the insufficient number of trained personnel. Originally the ADS-B were to be installed in Kinshasa, Lubumbashi, Buta, Mbandaka and Kikwit.

20. Supply and installation of Instrument Landing System/ Distance Measuring Equipment (ILS/DME) at Kinshasa/ N’Djili airport installed in 2016 and calibrated in 2017. Originally, a new VOR/DME was planned for Kinshasa airport. This equipment was eventually installed in Kalemie in 2018.

21. Training of 176 RVA staff on air traffic control, airport rescue and firefighters. Activity cancelled. 22. Study for a new freight terminal at Kinshasa/N’Dijli airport (completed in 2013) 23. Study of a national development plan for the secondary airports (completed in 2018)


43

To the benefit of SCTP – only financial and procurement audit completed in 2012, no other activity implemented, sub-component cancelled in 2016. Beach Ngobila passenger terminal (see component 3 below). Component 3: International trade procedures simplification and infrastructure investments N/A


44

Detailed achievement of original and revised railway rehabilitation works program at SNCC: The project financed Four types of rehabilitation work: Reconstruction (renewal of platform and tracks with new bi-bloc concrete slippers); Strengthening (weeding, replacing of rails and of metallic slippers, ballasting); Repair (injection of new or used sleepers or rails in a deteriorated section); Securing (manual weeding, ditch cleaning, ballasting).

Section Distance (km)

Contrat Number and amount

Start date

Completion

date

Duration (month)

Longueur (km) Actual a project closing

N Amount (US$)

forecast actual

forecast actual % Km

Original work program

1 Strengthening Sakania - Baya

222 10 1 561 170 19/05/14 29/2/2016 10 21,5 73 222 100% 222

2 Strengthening Luena - Kamina

170 10 1 089 340 19/07/14 31/7/2016 8 24 59,5 170 100% 170

3 Reconstruction Tenke – Kisanfu

35 9 1 384 163 01/01/15 30/05/2016 11 21 35 35 100%

35

4 Repair Mushoshi-Lumata

7,5 11 26 356 01/12/14 1/10/2014 2 2 7,5 7,5 100% 7,5

5 Repair Bukama-Kilenge

9 11 17 171 01/08/14 1/12/2014 2 1 9 9,7 100% 9,7

6 Securing Baya - Luambo

165 11 500 619 01/08/13 31/12/14 12 18 165 165 100% 165

7 Reconstruction Baya-Chilatembo

73 9 2 920 000 01/04/16 20/06/2018 21 18 73 78 106% 78

8 Strengthening Kisamba-MewneDitu

93

11

373 307

31/03/16

20/06/2018

16

19

93

93

100%

93

9 Strengthening MweneDitu-Mutefu

173

11

Not started

N/A

173

0

0%

0

10

Repair Kisanfu - Luilu

77 11 70 891 01/06/16 20/06/2018 7 15 77 77 100% 77

TOTAL Original plan (a)

1024,5 11 120 243 796 1030.2

80% 857.2

Additional work program after 2016

Upgrading sections already strengthened by MTP 1 Sakania – Baya

200 11 400,000 1/9/2017 28/2/2018 6 200 0 0 0

4 Luena – Kamina

180 11 360,000 1/9/2017 31/1/2018 5 180 0 0 0

6 Kisamba-Mutefu

206

97 532,000 31/9/2018* 13 206 0 0 0

Strengthening of sections already secured by MTP

2 Chilatembo – Luambo

106 97 212,000 1/10/2017 28/4/2018 7 3 106 132 49% 66

Repair 3 Tenke - Luena

184 97 644,000 1/03/2017 28/02/2018 9 18 184 184 100% 184

Strengthening of new sections


45

5 Kimanda -Kisamba 62 97 372,000 1/8/2017 31/5/2018 7 2 62 62 100% 62

7 Kamina - Kabongo 201

97 964,800 1/8/2017 30/10/2018 15 201 0 0

TOTAL additional plan (b)

1,139

3,484,800

1,139 312 27% 312

GRAND TOTAL (a+b)

1,169.2

Monitoring of the manufacturing of bi-bloc concrete slippers (traverses bi-bloc en béton armé-TBA)

Manufacturing of 45 000 TBA 302 346 01/08/13 2014 45k 45k 100% -

Manufacturing of 128 000 TBA 858 880 16/04/16 31/07/17 14 128k 124,160

97% -

TOTAL TBA 1 161 226 173k 169160

98% -


46

SNCC detailed financial and operational performance (2011-2018)

2011 2012 2013 2014 2015 2016 2017 2018 (6months)

37 36 37 38 44 58 53 53

13 15 17 20 11 2 0 0

31 21 21 19 24 36 32 28

985,951 1,027,788 1,073,886 1,054,829 812,288 1,085,595 965,410 395,455

4,672 4,672 4,672 4,672 1,230 1,175 1,122 1,272

1,760 1,691 1,544 1,190 989 1,028 931 982

208 217 215 216 216 216 216 216

68 71 52 53 62 65 62 53

9,785 9,612 8,038 7,531 7,344 7,321 7,227 7,141

2,260 2,260 2,260 2,310 2,310 2,310

Domestic mining cargo 201,221 207,216 130,128 63,947 156,186 42,602 37,981 28,027

other domestic freight 231,581 248,445 244,156 224,677 166,735 202,637 228,018 97,502

international traffic 139,883 74,970 87,151 103,763 101,049 111,991 149,376 66,614

tota l 572,685 530,631 461,435 392,387 423,970 357,230 415,375 192,143

Domestic mining cargo 15,846,871 20,721,914 13,200,946 9,613,532 7,508,553 8,782,034 1,953,688 2,702,553

other domestic freight 114,675,097 133,402,007 122,828,310 125,593,580 97,125,011 117,144,535 125,557,447 53,247,093

international traffic 56,497,716 35,556,816 41,732,488 41,647,680 45,617,144 48,017,734 66,296,899 24,043,729

tota l 187,019,684 189,680,737 177,761,744 176,854,792 150,250,708 173,944,303 193,808,034 79,993,375

46,002 40,880 82,249 44,220 23,469 45,000 39,492 22,736

24,649,634 22,242,204 30,167,166 22,209,884 16,659,262 28,397,202 22,723,529 12,729,548

187,638,371 86

Tra in-km 111,255 129,575 131,089 132,203 125,357 165,439 133,435 55,855

Net tonnage per tra in 212 208 203 194 201 220 240 235

Average number of cars per tra in 11 12 12 11 11 12 14 14

Tra in-km 724,814 764,068 746,715 812,008 620,281 671,429 605,808 247,943

Net tonnage per tra in 212 208 203 210 209 230 259 260

Average number of cars per tra in 13 13 12 12 11 12 13 12

Passengers 128,770 89,078 145,668 110,618 96,271 222,938 170,498 77,043

2,141,119 1,995,587 3,978,337 5,033,955 2,369,855 3,672,885 4,292,336 725,783

29,007,119 33,837,377 33,219,006 42,484,379 19,780,274 23,662,335 22,369,433 11,034,364

4,845,662 3,442,477 3,854,828 2,135,757 3,257,012 4,014,690 6,087,233 1,391,017

4,268,618 3,425,789 2,213,755 2,423,899 3,323,410 2,370,036 2,159,419 1,638,737

38,121,399 40,705,643 39,287,589 47,044,035 26,360,696 30,047,061 30,616,085 14,064,118

2,794,783 3,566,790 3,170,378 2,588,443 3,067,438 2,659,569 2,560,766 1,986,134

43,057,600 46,268,020 46,436,304 54,666,433 31,797,989 36,379,515 37,469,187 16,776,035

3,500,000 10,965,350 9,969,175 1,644,570 9,429,279 7,518,040 3,090,000

8,633,265 20,708,611 27,002,065 20,431,862 31,142,318 39,094,168 32,713,885

1,795,662 13,868,105 7,539,737 10,908,900 10,344,395 15,634,275 5,685,050

13,648,296 12,165,760 13,005,677 12,281,427 9,972,603 12,212,915 11,791,147

7,282,224 2,472,028 2,957,584 2,340,000 2,692,212 2,103,786 2,197,449

1,347,874 474,029 290,720 221,769 396,048 342,048 349,908

4,592,902 5,629,652 8,810,984 8,430,660 10 0 0

SNCC s taff sa laries 42,619,199 43,441,148 41,207,255 43,249,208 34,991,329 39,038,205 28,914,925

costs of external workforce 4,013,921 4,025,271 4,536,391 6,481,488 6,109,234 4,056,593

Tota l cost of Human ressources 46,633,121 47,466,419 45,743,646 43,249,208 41,472,817 45,147,439 32,971,518

10,222,608 9,354,737 12,123,836 16,083,369 6,851,684 4,045,090 5,300,477

57,058,488 95,220,208 98,673,450 98,673,450 60,125,724 42,799,391 66,105,685

142,581,175 186,650,937 189,145,634 192,188,783 131,855,494 122,285,027 124,401,233

34,764,586 39,701,401 37,240,287 106,160,400 77,880,865 74,558,831

177,345,761 226,352,338 226,385,921 238,015,894 200,165,892 198,960,064

7,707,141 7,133,390 8,970,447

185,052,902 233,485,728 235,356,368 238,015,894 200,165,892 198,960,064

-133,362,037 -163,009,097 -150,952,469 -173,431,016 -115,262,930 -121,258,952

-141,995,302 -187,217,708 -188,920,064 -206,217,905 -163,786,377 -161,490,877

Tra ins

Total Passengers transport services

Revenue (USD)

Data non ava i lable

Expenses of other sectors (hospi ta ls , schools )

Tota l Expenses

Passengers and freight transport services

Expenses (USD)

Including subs idies

Excluding subs idiesFinancia l resul ts

Locomotives renta l

other expenses

Depreciation

Total operating costs / d'exploitation

non-operating expenses

Tota l expenses freight and passengers

Revenues from other sectors (hospi ta ls , schools )

Tota l revenus d'exploi tation

Government contribution to operations (exc. CAPEX, arrears )

Other contribution to operations (exc. CAPEX, arrears )

World Bank contribution to operations (exc. CAPEX, arrears )

Cost of human resources

materia ls and suppl ies

Gazoi l and lubricants

Electrici ty

Water

operated for own use

operated for cl ients

Freight tra ins

Freight transport services

Domestic

Export

Import

Total Freight transport services

tra in-km

Net ton

Net ton-km

Freight

Traffic data

Passengers

Tota l traffic

Passengers

Passengers -km

Average number of operational

Average tota l number

Av. Dis tance (km)


Average number of renta ls


Locomotives

Fret car

Passenger car

Indicator/ year

SNCC s taff

Non-staff personnel (da i ly workers/consul tants )




47


48

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION

A. TASK TEAM MEMBERS Name Role

Preparation

Supervision/ICR

Tojoarofenitra Ramanankirahina Task Team Leader(s)

Lanssina Traore, Cheick Traore, Clement Tukeba Lessa Kimpuni

Procurement Specialist(s)

Saidou Diop Financial Management Specialist

Charles E. Schlumberger Team Member

Bella Diallo Team Member

Mustapha Benmaamar Team Member

Peter F. B. A. Lafere Social Safeguards Specialist

Lucie Lufiauluisu Bobola Team Member

Veronique Mboyekunda Okito Team Member

Bertrand Murguet Team Member

Abdoulaye Gadiere Environmental Safeguards Specialist

Koho Francine Takoy Team Member

B. STAFF TIME AND COST

Stage of Project Cycle Staff Time and Cost

No. of staff weeks US$ (including travel and consultant costs)

Preparation FY05 12.332 100,551.69

FY06 17.660 212,418.73

FY07 12.487 86,238.76


49

FY08 24.661 130,445.34

FY09 22.286 149,173.69

FY10 66.260 376,803.86

FY11 0 9,255.08

FY12 0 0.00

Total 155.69 1,064,887.15

Supervision/ICR

FY11 73.008 429,961.55

FY12 50.666 574,373.18

FY13 46.955 462,875.34

FY14 28.700 602,209.18

FY15 13.038 165,140.80

FY16 22.675 267,667.06

FY17 28.605 309,334.33

FY18 52.909 331,548.96

FY19 6.875 28,662.33

Total 323.43 3,171,772.73

50

ANNEX 3. PROJECT COST BY COMPONENT

Components Amount at Approval (US$M)

Revised Allocation after

Restructuring (US$M)

Actual at Project Closing (US$M)*

Percentage of Approval (US$M)

Component 1: SNCC recovery plan 218.85 378.85 356.54 163%

Component 2: Operational performance strengthening and improved governance of the sector

25.45 40.45 23.10 91%

Component 3: International trade procedures simplification and infrastructure investment

2.00 2.00 1.89 95%

Component 4: Project management 8.70 13.70 12.41 143%

Total 255.00 435.00 393.94 154% * This amount includes the cancellation of funds in the amount of USD 23,182,644 operated in June 2018 of part of undisbursed proceeds before the project closing date.

51

Project costs by beneficiary:

Beneficiary Original Financing Additional Financing Total SNCC 218.85 160.00 378.85 SCTP 8.40 0.00 8.40 RVA 10.00 0.00 10.00 RVF 3.85 5.00 8.85 CVM 1.40 0.00 1.40 MoT 1.80 0.00 1.80 DMVN 0.00 5.00 5.00 AAC 0.00 5.00 5.00 Trade (MoT) 2.00 0.00 2.00 CPETM 8.70 5.00 13.70 Total 255.00 180.00 435.00

52

ANNEX 4. EFFICIENCY ANALYSIS

ANNEX 5. SUMMARY OF BORROWER’S ICR

I. Assessment of project results

1. Project design:

The essential observations are as follows: - An inequitable distribution of project funding, with 88% allocation to the SNCCs recovery plan, and the 12% shared among the other seven beneficiary entities; - Under-estimation of costs and timeframes (including time to restore the financial and operational viability of SNCC); - Overestimation of the Government's financial capacity; - Underestimation of the risk that the political environment may not be conducive for the envisaged reforms; - Excess of confidence in the private railway operator of SNCC established under the Competitiveness and Private Sector Development Project (PCDSP) and recruited by direct procurement to manage the TMP, while the government wanted a to open the bid to competition; - Several changes occurred during the project implementation: (i) Activities deleted, (ii) Activities modified, then abandoned, (iii) activities added, (iv) Several reallocations of funds (see detailed report) and (v) several changes of the Project TTL at the World Bank level, the latest occurring only four months before the project closing date.

2. Project Implementation: Because of multiple conditionalities, some of which should have been prepared upstream, the signing of the financing agreement of the original financing took place on the last day of the third implementation period of 90 days, i.e. 270 days since the signing of the agreement on July 14, 2010. For the additional financing, as the conditionalities were lightened, the implementation came into effect 9 days before the expiration of the time limit granted. 3. Setting up the institutional system: The Ministry of Transport, which was responsible for the implementation of the institutional framework for the implementation of the project, created the project execution cell long before, during the project preparation period (PPF). Its establishing decree, organization and operation was adapted twice: A first time for the implementation of the Original Financing and a second time for the implementation of Goma Airport Safety Improvement Project (PASAG). 4. Overall project Management: The management of the project by the CEPTM was overall evaluated, after some difficulties at inception satisfactory from 2012 to 2018. 5. Financial and accounting management of the project: The two project delivery units (PUK and UPL) were all endowed with full financial management staff, namely: an administrative and financial officer, a treasurer, an accountant and an internal auditor as required in the Funding. They also had the software Tompro recommended and a handbook of financial, accounting and administrative management, procurement and monitoring and evaluation procedures.

53

Financial and accounting management has regularly submitted Quarterly Interim Financial Reports (IFRs) and forwarded to the World Bank within 45 days of the end of each quarter, as required by the funding agreements. Similarly, the audit missions of the annual financial statements were regularly carried out on time and each time, the auditors expressed their opinion approving the unreserved financial statements. Finally, at the close of the project, the disbursement rate was 91%. 6. Contracting Management: Contracting was carried out by a team consisting of a contracting officer, a contracting officer and an assistant at UPK; a procurement officer, two procurement officers and a Secretary of Contracting and archiving for the UPL. The RPM's were responsible for establishing and updating Procurement and ensured that the procurement process was well executed by ensuring compliance with the procedures and guidelines for the award of markets. The evaluations of the contracting management are in one of the tables in the detailed report. 7. The physical and non-physical achievements of the project at the SNCC: To implement its recovery plan, the DCS has received four funding: (i) the World Bank (348,850,000 USD), (ii) the Government (111, 630 million USD), (iii) the European Development Fund (7,080,000 USD) and (iv) SNCC (2 million USD). At the DCs, we can retain the following achievements:

- Acquisition of 18 new electric diesel locomotives on financing from the World Bank and 20 others on government funding;

- Rehabilitation of 8 electric diesel locomotives with spare parts acquired by the project; - Rehabilitation of 5 maneuvering locomotives with spare parts acquired by the project; - Rehabilitation of 822 commercial wagons; - Rehabilitation of 50 passenger cars; - Rehabilitation of 60 ballast wagons; - Renewal of 110.533 KM track; - Rehabilitation (comfort, repair and securing) of 1 237 km of railway line; - Retirement of 4 358 agents.

It is all this that makes the government and the SNCC say that the MTP is a success because the bases for a railway operation are thrown; Unlike the World Bank, which considers that the MTP is a failure because the recovery of financial and operational viability is not achieved by project closing date.

8. Physical and non-physical achievements of the project at the SCTP. SCTP component was cancelled following the non-satisfaction of legal conditions. The USD 8.4 million was reallocated to other project beneficiary entities. Nevertheless, under Component 3 "Facilitation of international trade", SCTP is the end user of the passenger terminal at the Beach Ngobila in Kinshasa equipped with furniture and other control equipment (portable scanners and a baggage scanner).

9. Physical and non-physical achievements of the project at RVA. At RVA, the following outputs were completed:

- Study on the setting up of a cargo area at the Kinshasa-Ndjili International Airport; - Study of the Development Plan for secondary airports (twenty airports); - Acquisition of Equipment for airspace surveillance and management (TopSky ATC) and

acquisition and installation of five ADS-B; - Acquisition and installation of NAVAIDS equipment: ILS-DME/DVOR-DME category II at

Kinshasa-Ndjili International Airport. With these achievements, the air traffic control-van believes that the accomplishments of the TMP at

54

the van have made significant improvements both to aviation safety and to human factors, which has a positive impact on the increase in traffic and on economic integration which was one of the objectives of the project.

10. Physical and non-physical achievements of the project at the RVF. At the RVF, we can retain the following accomplishments:

- The study for the creation of an inland waterway maintenance fund; - The RVF Institutional Diagnostic study; - Technical studies (bathymetric and others) on the rehabilitation of fixed and mobile Buoyage on

4 050 km total inland waterways with production of albums; - Waterway beaconing work on 1 424 km (1 172 fixed and 33 floating signals); - Rehabilitation of the Mongala beacon equipped with a crane for the desnagage; - Acquisition of hydro-topographic equipment and materials; - Acquisition of two canoes for Kindu and Kaushik; - 85% construction of two buoyant type boats for Kindu and Kaushik.

With these achievements, the RVF believes that its capacity to respond to inland waterways has been strengthened and that it has begun to carry out the tagging work which is its essential social object, which it will continue after the project as a continuation of its achievements.

11. The physical achievements of the project to the CVM. At the CVM, we only had the acquisition of two hydrographic stars that enhanced the operational capability of the CVM in dredging.

12. The physical and non-physical achievements of the project in the Ministry of Transport and Communications. At the Department of Transport and Communications, main outputs and outcomes are:

- The Institutional audit of the Department; - The General states of inland waterways; - The Strategy Note for the air transport sub-sector; - The mission of technical assistance for the establishment of an urban transport organizing

authority (AOTU) and the setting up of a partnership between the state and the private operators for the renewal of their minibus fleet in Kinshasa (Minibuses Esprit de Vie);

- The acquisition of equipment for the Ministry: Computer hardware, generator, furniture and rehabilitation works;

- The institution of governance plans in the transport sector companies benefiting from the project; - The HIV/AIDS component: (i) CAP surveys (knowledge, Attitude and practice on HIV/AIDS) and (ii)

action plans for the entire transport sector and for each beneficiary entity of the project; - Simplification of international Trade procedures which unfortunately did not result in the

establishment of a Permanent National Committee for Trade Facilitation (CNPFE), in the absence of a budget.

13. Physical and non-physical achievements of the project at the DMVN: At the DMVN, we have only the study on the empowerment of this directorate; The other activities were not carried out because the prerequisite was not achieved.

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14. Non-physical accomplishments of the project to AAC. At AAC, we can retain the following accomplishments:

- The certification mission of the airlines; - ICAO technical assistance to train inspectors in the various areas of aviation safety supervision.

AAC notes that the project has triggered an irreversible process of improving the supervision of aviation safety.

II. Evaluation of stakeholders:

15. Evaluation of the World Bank.

The Positive key players recognized at the World Bank are: - The development objectives of the MTP were relevant, with the exception of the recovery of the

financial balance of the DCs that could not be achieved until the end of the project originally fixed in 2015, then postponed to 2018, because it takes more than five years for investments to produce effects; - MTP prevented the cessation of activities at the SNCC; - In an exceptional way, the World Bank has accepted the assumption of operational costs at SNCC,

precisely to avoid the cessation of railway activities; - The bank also funded social plans at SNCC and RVF; - The investments have improved the operational capabilities of the beneficiary entities; - The participation of the beneficiary entities in the implementation of the project allowed them to

root in their breasts the good management and governance practices that did not exist before; - The granting of additional funding and its extension to the DMVN and AAFC has been well

appreciated; - The cancellation and reallocation of the remainder of the project funding to the DRC was also well-

praised. The project beneficiary entities note the following shortcomings:

- An inequitable distribution of project funding, with 88% allocation to the SNCC recovery plan, and the 12% shared among the other seven beneficiary entities;

- A multitude of conditionalities for the implementation of the first financing which required 270 days, and which thus caused a delay of six months for the start of the implementation of the project; Some of these conditionalities should have been prepared during the financing of the Project Preparation Advance;

- The rigidity of conditionalities requiring the pure and simple accession of beneficiary undertakings;

- Under-estimation of costs and timeframes (including time to restore the financial and operational viability of SNCC;

- Overestimation of the Government's financial capacity; - Not considering the unfavorable political context for the envisaged reforms; - Excessive confidence in the private railway operator found at DCs under the financing of the

competitiveness and private sector development (PCDSP) project and recruited by direct agreement to execute the TMP, while the government wanted a new competitive bidding process;

- L' Requirement of Maintenance of private railway operator at DCs as a condition of suspension of financing has led to maintaining this operator despite Its negative balance sheet found in the audit report carried out by the Consultant Nodalis in 2014, because a recruitment revival during the

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cruise phase of the project execution would cause the suspension of disbursements for all components and entities beneficiaries, what the Government avoided reluctantly by simply replacing the management contract with a technical assistance contract;

- Not considering the social conditions of the staff of certain beneficiary entities (insufficiently or irregularly paid) responsible for participating in the execution of the project;

- Slow administration of the Bank In the execution of the procedure both of contracting and disbursement of funds;

- Successive changes in project managers who have not been able to keep the same vision and organization in the execution of the project.

16. Evaluation of Government performance

Concerning the Government’s performance, the beneficiary entities have noted the following positive achievements:

- The establishment of a Focal Point in the office of the Minister of Transport and Communications; - The project supervision by the Ministry of Finance; - The support of the Ministry of the Portfolio through COPIREP; - The financing of rolling stock for SNCC (20 new locomotives, 8 second-hand locomotives,

rehabilitation of barges, etc.); - Support to operational costs and logistical support (diesel and lubricants) for SNCC; - The payment of arrears of wages 329,000 USD for the 88 retirees of RVF; and the granting of

subsidies for operating costs; - Support from MoT in seeking solutions for the satisfaction of disbursement conditionalities

relative to DMVN; - The establishment of AAC; - The establishment of a logistic fee to finance the rehabilitation of SCTP railways.

The project beneficiary entities note the following shortcomings:

- Failure to respect its commitment For Financial support within the framework of the Social peace pact (ending the ambitions of strikes) For the revival of production at the DCs;

- The conclusion of a contract with the private railway operator whose remuneration is not based on the principle of the result (However, this was foreseen in the first contract of April 9, 2011, page 19); This negated any spirit of emulation on the part of this operator to the DCS;

- The non-mobilization of alternative funds to replace the Chinese financing; - The lack of appropriate government response to the systematic theft of catenary cables and

other SNCC track equipment, as well as the repeated sabotage of the track by people; - The insensitivity of the Government to its lack of fairness in the distribution of the project

envelope with little interest in the West Corridor; - The actual non-availability of the vessel for the Direction of the Navy and waterways which

constituted the sine qua none of its effective empowerment; - The Permanent National Committee for Trade Facilitation was not established and funded; - the recommended inland waterway maintenance fund was not established; - the recommendations adopted from the institutional Study of the Ministry of Transport and

Communications were not implemented; - Misunderstanding between the IDA Experts and the Ministry of the portfolio and the COPIREP on

the SCTP reform strategy note, which was adopted in the Council of Ministers on 17 December 2010;

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- Issues of import tax exemption that resulted in delays for the procedure of emergency removal of goods; and

- Absence of durable solutions for the problem of settlements of the airport right-of-way in N’Djili, which led to the decommissioning of the DVOR/DME to be installed.

17. Evaluation of the SNCC.

The contribution of SNCC in achieving the results of the project was found to be overall satisfactory. The company has provided technical assistance to the project management team in accordance with the funding and project agreements. In the implementation of the project, the company maintained the social peace in 2015 and 2016, rehabilitated with own funds from wagons, passenger cars, certain sections of the track not funded by the TMP and some of the station's operating buildings. Negative factors in the implementation of the project were identified, namely: (i) the irregularity of the pay, (ii) the unintentional stoppages of 2013-2014 and May 2017, (iii) the theft of catenary cables and other equipment and (iv) the sabotage of the track, (v) the difficult recovery by SNCC of debts from FARDC, Angélique and Gécamines.

18. Evaluation of the SCTP. This beneficiary entity was not able to access the financial envelope allocated to it because it had not fulfilled the disbursement conditionalities. The company evokes among other things as reasons:

- The absence of a SCTP focal point which was to play the role of interface between the CEPTM And The company

- A poor appreciation on the part of the SCTP of the conditionalities of the agreement of the subsidiary donation following the lack of communication around the programmes of the World Bank.

19. Evaluation of the RVA.

The contribution of RVA in achieving the results of the project was found to be overall satisfactory. Through its project and public procurement Management Unit, the company has provided technical assistance to the project management team in accordance with the funding and project agreements. However, the main weakness of the air traffic control remains the realization of the prerequisites prior to the installation of the equipment. This weakness made the realization of certain activities elastic and totally annihilated the others.

20. Evaluation of the RVF. The participation of RVF in achieving the results of the project was found to be generally satisfactory. The RVF has set up a cell dedicated to projects (World Bank and European Union) and has thus provided its expertise in the implementation of the project in accordance with the financing and project agreements. In fact, the technical staff of this beneficiary entity has been mobilized in the realization of the main activities (technical studies, transport and installation of river markings). However, it was noted:

- Lack of experience of technical staff Observed in the estimation of the needs that drag the records of the activities and

- The delay in the delivery of certain inputs.

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21. Evaluation of the CVM.

The participation of the CVM was also considered satisfactory for this beneficiary entity which provided technical assistance in the implementation of the project. The acquisition of the two hydrographic stars allowed the structure to:

- The real-time monitoring of the evolutions of the bottom of the river with the result of the significant increase of the lengths inspected, and more efficient and efficient dredging work;

- Real-time production of financial statements and good bookkeeping. Nevertheless, failure to comply with the recommendations contained in the report of the Expert from ALUMARINE SHIPYARD SAS for the supplementary supply of spare parts in order to ensure the proper functioning of the said stars may not help Sustainability of the project to the CVM.

22. Evaluation of the Department of Transport and Communications. As the project's Department of Guardianship, the Ministry of Transport and Communications has been involved in regularly monitoring the implementation of the project through its Focal Point and other Cabinet members. It has fulfilled the conditions for the implementation of the financing agreements and the disbursement conditions which were within its competence (decrees of creation, reorganization and operation of the CEPTM). The Ministry has always been prepared to discuss with the World Bank experts the conclusions of their missions to support the implementation of the project. Finally, the Department operated the project Steering Committee whenever necessary. As a Ministry of Guardianship of the project, the Ministry of Transport and Communications has not been able to transform into results (Outcome) recommendations made by several studies:

- The institutional study of the Department which was to lead to its reorganization; - The institutional diagnostic study of the RVF; - The study on the establishment of an inland waterway maintenance fund; - The study of the empowerment of the Direction of the Navy and the waterways-DMVN.

Moreover, the lack of a framework for coordinating and monitoring the activities carried out by international donors and development partners in the transport sector was another key negative factor. In fact, with each mission to support the implementation of the project, World Bank experts met with, In Closed Circle, The other donors involved in the DRC and did not report these exchanges to the meetings of the return of their missions to the Ministry of Transport and Communications which was supposed to have such a framework for coordination and monitoring which, at a certain time was entrusted to the Transport Study Group-GET. Finally, as a beneficiary entity, the Department limited the benefit of the project to its Cabinet and the General Secretariat of its Administration did not benefit from it.

23. Evaluation of the DMVN. The Experts of the DMVN, interested in the perspective of empowering their leadership, were dedicated and have provided technical assistance in the implementation of the project. However Political constraints have not allowed this Direction of the Ministry of Transport and Communication to take advantage of all its financing and above all not to achieve the intended objective, namely: that of its empowerment.

24. Evaluation of the AAC. The contribution of the AAC/RDC in the implementation of the project is also considered satisfactory.

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The experts of this structure have actively participated to the realization of the project.

25. Evaluation of the COPIREP. The COPIREP oversaw the activities relative to SOE reforms. As such, the COPIREP carried out the following activities:

1 Oversight of the management and technical assistance contracts of the private operator at SNCC;

2 Management of the private operator's contract at RVA; 3 The role of contracting authority of the Mission to develop a strategy for the restructuring and

implementation of PPPs at the SCTP; 4 The role of owner of the specific plans of governance of the public enterprises beneficiaries of

the project. Finally, the COPIREP shares with the Government the responsibility of concluding the management contract with the private operator of SNCC that was not based on performance.

26. Evaluation of the CEPTM. The evaluation of the CEPTM is found in paragraphs 3 to 6 above.

III. Lessons learned and recommendations for future projects

27. The essential lessons learned are: At the government level:

1) The absence of a transport master plan did not allow prioritization; 2) The active involvement of the Government in the preparation and negotiation of funding. The

latter should be assisted by experts in the sector during the negotiations for a better assembly of the project;

At the World Bank level: 3) Underestimation of the political economy context leads to the design of the project using an

unrealistic approach; 4) During project design, it is absolutely necessary to consult with all stakeholders in order to know

their requirements, and their attitudes towards projects (favorable, hostile, indifferent, powerful, weak), including parties that are not actors in the project. There is a need to involve the beneficiary (Government) In the assembly and the very choice of projects to be financed. There is also a need to shorten the time limit de Preparation of the project as it had taken more than three years before it was decided to be financed and, in the meantime, the macroeconomic parameters had changed significantly;

5) Underestimating the costs of the project activities. As part of the TMP, most of the activities were undervalued in the project evaluation document;

6) Project design should set more realistic objectives; 7) Overestimation of the absorption capacity and the institutional fragility of beneficiary entities; 8) It was not realistic to expect to carry out a project well in companies whose agents were paid

irregularly, human capital must be considered; 9) Funding conditionalities and prerequisites should be eased. At the limit, to lift the

conditionalities of the project before the agreements are signed so that they do not encroach on the proper conduct of the activities at the risk of also affecting the duration of the project;

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10) It is better to integrate the requested prerequisites to the beneficiary entities in the cost of the project;

11) Deadlines for the implementation of documentary letters of credit are longer in DRC than elsewhere;

12) Long delays in the delivery of imported goods should be well assessed and integrated into the duration of the project implementation;

At the level of the beneficiary entities: 13) Lack of knowledge of the World Bank's procedures among the chief of officers and executives of

the beneficiary companies was found to be a critical negative factor in the appropriation of the project implementation in these companies;

14) The setting up of focal points at the level of each beneficiary entity for better monitoring of the markets. Project management and public procurement units staffed with experts trained, motivated and endowed with the means to respond effectively for monitoring and accompaniment of the markets. The support of the beneficiary entities by experienced experts in their field of activities to accompany them in the preparation of tenders and follow up of important technical dossiers to facilitate at the same time their upgrading for the sustainability of projects;

15) Required the capacity building of beneficiary entities to effectively meet project expectations and ensure sustainability.

16) The importance of the participation of beneficiary entities in the procurement process and their accountability, especially in the context of the governing markets for which they had the opportunity to carry out the procurement themselves according to the bank's procedures.

ANNEX 6. SUPPORTING DOCUMENTS (IF ANY)

1. World Bank 2008, Project Appraisal Document for DRC Multimodal Transport Project, Report No: 53053-ZR

2. World Bank 2008, original Financing Agreement, Grant Number H595-ZR

3. World Bank 2013, Financing Agreement, Grant Number H595-ZR, AF Grant Number H859-ZR

4. Identification, Preparation and Implementation Support Mission Aide-Mémoires, and Implementation Status Reports (2005-2018)

5. World Bank 2007, Country Assistance Strategy for DRC FY08-FY11. Report No:41474-ZR

6. World Bank 2013, Country Assistance Strategy for DRC FY13-FY16. Report No:66158-ZR

7. World Bank 2014, Private Sector Development and Competitiveness Project (P071144), Implementation Completion and Results Report. Report No: 3320

8. Governement of the Democratic Republic of Congo, Rapport d’achèvement du Projet de Transport Multimodal, CEPTM, December 2018

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Annex 7: Project Map (from PAD)

Implementation Completion and Results Report (ICR)...

Documents

Transcript of Implementation Completion and Results Report (ICR)...