Document of

The World Bank Group

Report No: ICR2661

IMPLEMENTATION COMPLETION AND RESULTS REPORT(IBRD-72280 IBRD-76340)

ON A

LOAN

IN THE AMOUNT OF US$ 71.0 MILLION

TO THE

HASHEMITE KINGDOM OF JORDAN

FOR AN

AMMAN DEVELOPMENT CORRIDOR PROJECT

June 10, 2013

Sustainable Development DepartmentMiddle East and North Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective 04/16/2013)

Currency Unit = Jordanian Dinar (JD)JD 1.00 = US$ 1.41

US$ 1.00 = JD 0.708

FISCAL YEAR; Jan. 1 - Dec. 31

ABBREVIATIONS AND ACRONYMS

ADC Amman Development CorridorADC Area Designated 300 km development area west of ADCAFESD Arab Fund for Economic and Social DevelopmentAMA Amman Metropolitan AreaARR Amman Ring RoadARR-1 Phase 1 of Ring Road: 40-km Zarqa-Airport HwyCEMG Construction Environmental Management GuidelinesCLO Community Liaison Office (of MoPWH)CPCS A consultant firmCRMP Cultural Resources Management PlanEIB European Investment BankEMP Environmental Management PlanGAM Greater Amman MunicipalityGCD General Customs DepartmentJD Jordanian DinarLARP Land Acquisition and Resettlement PlanLSD Lands and Survey DepartmentMoF Ministry of FinanceMoPIC Ministry of Planning & International CooperationMoPWH Ministry of Public Works and HousingMoT Ministry of TransportNPP Negative Performance PointPDO Project Development ObjectivePMT Project Management Team (of MoPWH)QIZ Qualified Industrial Zone (US trade agreement)TA Technical AssistanceTEU Twenty-foot Equivalent Unit (shipping container)

Vice President: Inger Andersen

Country Director: Ferid Belhaj

Sector Manager: Patricia Veevers-Carter

Project Team Leader: Abdelmoula Ghzala

ICR Team Leader: Said Dahdah

ii

Hashemite Kingdom of JORDAN

Amman Development Corridor Project

CONTENTS

Data Sheet

A. Basic Information ................................................... iv

B. Key Dates ........................................................ iv

C. Ratings Summary ................................................... iv

D. Sector and Theme Codes .................................... .............. v

E. Bank Staff........................................................v

F. Results Framework Analysis .............................................. v

G. Ratings of Project Performance in ISRs . ................................... vii

H. Restructuring (if any) ..................................................... viii

I. Disbursement Profile...................................... ............... viii

1. Project Context, Development Objectives and Design........... ................. 1

2. Key Factors Affecting Implementation and Outcomes .................. ........ 3

3. Assessment of Outcomes ................................................... 10

4. Assessment of Risk to Development Outcome.......................... 13

5. Assessment of Bank and Borrower Performance .............................. 13

6. Lessons Learned .................................................... 15

Annex 1. Project Costs and Financing.......................................18

Annex 2. Outputs by Component ................................... ...... 20

Annex 3. Economic and Financial Analysis ............................. ..... 21

Annex 4. Bank Lending and Implementation Support/Supervision Processes.. ........... 26

Annex 5. Environmental and Social Impact and Mitigation....................28

Annex 6. Summary of Borrower's ICRR and Borrower's Comments on the Draft ICRR........31

Annex 7. Pictures of the Project ........................................... 39

Annex 8. List of Supporting Documents ..................................... 40

Non-Bank MAP

111

A. Basic Information

-JO - Amman

Project Name: Development Corridor

IBRD-72280,IBRD-Project ID: P081505 L/C/TF Number(s): 7634 0

ICR Date: 06/10/2013 ICR Type: Core ICR

Lending Instrument: SIL Borrower: eOsR:N

Ministry of Public Works and HousingCofinanciers and Other External Partners:Arab Fund for Social and Economic Development

European Investment Bank (EIB)

B. Key DatesRevised / ActualProcess Date Process Original Date

Concept Review: 12/18/2003 Effectiveness: 12/06/2004 12/06/2004

Appraisal: 02/23/2004 Restructuring(s): 10/25/201 1

Approval: 06/03/2004 Mid-term Review:

Closing: 06/30/2009 12/31/2012

C. Ratings Summary.1 Performance Rating by ICR

Coutces Moderately Unsatisfactory

rabFundfrSocisk ti Developmeubstantial

Boderately Unsatisfactory

orowes roac Mrocess roderately Unsatisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)Bank Ratings Borrower Ratings

ModeratelyQuality at Entry: Moderately Satisfactory Government: Ustsatr

Moderately ImplementingQuality of Supervision: e e Satisfactory

UnsRtngSm a tifcoyrgnyAgnis

Overall Bank Moderately Overall Borrower ModeratelyPerformance: Unsatisfactory Performance: Unsatisfactory

1V

C.3 Quality at Entry and Implementation Performance IndicatorsImplementation Indicators QAG Assessments Rating

Performance (if any)

Potential Problem Project Quality at EntryNo None

at any time (Yes/No): (QEA):

Problem Project at any Quality ofYes S iiNone

time (Yes/No): Supervision (QSA):

DO rating before ModeratelyClosing/Inactive status: Unsatisfactory

D. Sector and Theme CodesOriginal Actual

Sector Code (as % of total Bank financing)

Central government administration 16 14

General transportation sector 8 9

Urban Transport 76 77

Theme Code (as % of total Bank financing)

Infrastructure services for private sector development 40 40

Regional integration 20 20

Trade facilitation and market access 40 40

E. Bank StaffPositions At ICR At Approval

Vice President: Inger Andersen Christiaan J. Poortman

Country Director: Ferid Belhaj Joseph P. Saba

Sector Manager: Patricia Veevers-Carter Hedi Larbi

Project Team Leader: Abdelmoula Ghzala Mohammed D. E. Feghoul

ICR Team Leader: Said Dahdah

ICR Primary Author: Christopher Willoughby

F. Results Framework Analysis

Project Development ObjectivesThe Project's development objectives are to: (i) support more efficient transport andlogistics services by removing key infrastructure transport bottlenecks; and (ii) provideaccess to affordable land for productive investment and urban development purposes.

v

Revised Project Development Objectives

(a) PDO Indicator(s)

Original Target Actual ValueValues (from Fomly Achieved at

Indicator Baseline Value Revised cmpletapproval TreVausCompletion or

documents) Target YearsIndicator 1: Cost to transport one TEU from QIZ to Aqaba Port (Amount(USD))

Valuequantitative or 385 300 300 425Qualitative)Date achieved 04/30/2004 112/31/2009 12/31/2012 04/15/2013

Comments The real value achieved is close to the target if we take into considerations the(incl. % increase in oil prices between 2004 and 2013 ( estimated at about 250% priceachievement) increase)

Indicator 2: Travel Times: QAIA to Zarqa (in minutes)

Valuequantitative or 60 40 40 48Qualitative)Date achieved 04/30/2004 12/31/2009 12/31/2012 04/15/2013

Comments The original target value of this indicator - 40 minutes- should be fully met when(inc. %ac. t the southern half is completed so that the whole road will be open to traffic.achievement)

Indicator 3: Volume of traffic diverted from urban streets to ARR-1 (%)Valuequantitative or 0 10 10 8Qualitative)Date achieved 04/30/2004 {12/31/2009 12/31/2012 04/15/2013

Comments The target value of this indicator - 10 percent- should be fully met when the(inc. %ac. t southern half is completed so that the whole road will be open to traffic.achievement)

Indicator 4: Cargo Traffic Through New Custom Facility (Exports/Imports-Transits) (milliontons)

Valuequantitative or 2.4/0.0 3.5/1.4 3.7/1.6 0.0/0.0Qualitative)Date achieved 04/30/2004 12/31/2009 12/31/2012 12/31/2012Comments The new custom facility has not been built, however the cargo traffic through the(inc. %ac. t existing custom facility has increased by 44% between 2004 and 2012.achievement)

vi

(b) Intermediate Outcome Indicator(s)

Original Target Actual ValueT ~ ~~Formally AcivdaIndicator Baseline Value Values (from Revised cmplet

approval TreVausCompletion ordocuments) Target Years

1t I Completion rate of Amman Ring Road Phase 1 in accordance to Plan(Percentage)

Value(quantitative 0 100 100 84or Qualitative)

Date achieved 04/30/2004 12/31/2009 12/31/2012 12/31/2012Comments(incl. % Sections 2 and 3 are 100% completed, however Section 1 is 65% completed.achievement)

Indicator 2: Customs Depots Completed and in use (Percentage)

Value

(quantitative 0 100 100 0

or Qualitative)Date achieved 04/30/2004 112/31/2009 12/31/2012 112/31/2012Comments(incl. % The new Customs Depot was not builtachievement)

Indicator 3: Master Plan for Amman Ring Road Phase 2 and 3 (Yes/No)Value(quantitative No Yes Yes Yesor Qualitative)Date achieved 04/30/2004 12/31/2007 12/31/2008 12/31/2008Comments(incl. % Financed by an EIB Grant.achievement)

G. Ratings of Project Performance in ISRs

ActualDate ISR Ata

No. Ate DO IP Disbursements(USD millions)

1 06/07/2004 Satisfactory Satisfactory 0.002 12/14/2004 Satisfactory Satisfactory 0.193 04/05/2005 Satisfactory Satisfactory 0.194 06/10/2005 Satisfactory Satisfactory 0.195 12/27/2005 Satisfactory Satisfactory 2.096 07/15/2006 Satisfactory Satisfactory 2.097 12/20/2006 Satisfactory Satisfactory 6.108 06/11/2007 Satisfactory Satisfactory 11.299 11/12/2007 Satisfactory Satisfactory 14.84

10 05/22/2008 Satisfactory Satisfactory 22.16

vii

ll 11/13/2008 Satisfactory Satisfacior 289112 05,19/2009 Satistactory Satisfactory 33,3413 12/03/2009 Satisfactory Satisfaciory 37.9214 06/24/2010 Satislactory Satisfaciory 437915 02/14/2011 Satisfactory Satisfacior 55.6616 07,15/2011 Satistectory Satisfiatory 593317 12/22/20'l Satisfactory Satisfaciory 63.1018 06/27/2012 Satisfactory Satisfaciory 7072

19 12/25/2012 U isfacoy Moderately Satisfactory 70.92unsseisflior

H. Restructuring (if sny)

SR Ratings at Amount

Restructuring Board Restructuring Disbursd at Reason for Restructuring &Dares) Approved Restrueuring Key Changes Made

DOChåge DO lp in IISDInillions

The elesing date forotheadditional loan ( 76340) was

10/25/2011 N s s 63.10 extended fromDec 31, 20'ltillDec 31,2012.No other changeshave been litade-

. Disbursement Profile

Original Formally Revised -- Actual

60-

40-

= 20-

viii

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. Given the country's limited agricultural and mineral resources, Jordan has based itsdevelopment principally on two important other areas of comparative advantage, its strong humancapital base and location at the center of trade routes serving all the surrounding countries togreater or lesser degree. Such strategy required careful attention to keeping ahead of developmentpressures in the country's capital and major commercial and industrial center, the AmmanMetropolitan Area (AMA) and Zarqa Metropolitan Area, which accounted already in 2000 formore than 50% of the country's population and employment, and 80% of its industrial sector.

2. At the beginning of the new century several factors came together to indicate that the timehad come to make a start on building an Amman Ring Road, a concept discussed and developed inever-increasing detail since the early 1980s. Construction of the 40-km section of this road thatwould run down the eastern side of the AMA was expected to help meet three vital needs.

3. First, it would significantly reduce congestion on the existing AMA network, particularlyby providing a direct link from Zarqa, Amman's most important industrial suburb (northeast of thecity), to the south, a by-pass to travel through the city.

4. Second, it would respond to the rising scarcity of sites for commercial and industrialdevelopment within the city by increasing access to the areas to the east, which offered morepotential for such uses than those on the other sides of the city.

5. Third, the eastern location of the new road would also make it suitable for handling manyinternational trade movements, to and from Syria, Saudi Arabia, West Bank, Iraq and the Gulfstates, all with significant traffic volumes. This advantage would, moreover, be furtherstrengthened by moving the Customs Depot, through which most international shipments have topass, from its heavily congested location on the southeast edge of the city to a dedicated site at oneof the main intersections on the new highway. There it would have a custom-designed facility inan inland port area accommodating also other relevant services or, alternatively, a spaciouslogistics area of its own. In response to all three reasons this first 40-km section of the Ring Roadwas adopted as the Amman Development Corridor (ADC), and prioritized.

6. As an essential support for the expansion of trade and commerce, and of AMA industrialproduction, the ADC project would contribute to the operational objective emphasized in theJordan Country Assistance Strategy that had been approved in January 2003: enhancingconditions for growth led by the private sector. The government hoped that the Bank'sinvolvement might help attract financing from the other sources which would need also to beinvolved, international agencies initially but probably private investors in addition for follow-onstages of the ring road. The experience that the Bank would bring in the areas of municipalplanning, trade logistics, effective management of land acquisition and environmental monitoring,was also felt to be potentially important.

1

1.2 Original Project Development Objectives (PDO) and Key Indicators

7. The project's development objectives were: (i) to support more efficient transport andlogistics services by removing key infrastructure transport bottlenecks, and (ii) to provide access toaffordable land for productive investment and urban development purposes. Four key indicatorswere selected to measure fulfillment of the first PDO:

- Travel time from Queen Alia International Airport to Zarqa- Cost to transport one TEU from QIZ to Aqaba Port- Volume of traffic diverted from urban streets to ARR- 1- Cargo Traffic through New Customs Facility.

8. No specific key indicators were chosen for the second PDO, but an intermediate indicatorassociated with this PDO was formulated. It was in the form of surveys measuring developmentwithin ADC. Data such as the number and scale of urban and industrial land transactions ofdifferent types in the very large ADC zone - between the new road and the edge of the more built-up areas - were summarized in these annual surveys.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, andreasons/justification

9. The PDOs remained unchanged. During the 2008 additional financing appraisal, the keyindicators were slightly revised for clarity purposes and the dates for achieving the target valueswere updated to reflect the new project closing date in line with the project extension granted withthe additional financing. The table below summarizes the changes to the key indicators.

Original Indicator Original Target Value Revised Indicator Revised Target Value(Date) (Date)

Travel Times: QAIA 40 Average Travel Time 40to Zarqa (in minutes) (Dec 31, 2009) between Queen Alia (Dec 31, 2011)

International Airportand Zarqa (inminutes)

Cost to transport one 300 Cost to transport one 300TEU from QIZ to (Dec 31, 2009) 20 foot equivalent (Dec 31, 2011)Aqaba Port (US$) container from

Amman qualifyingindustrial zone toAgaba Port (US$)

Cargo traffic through 3.5/1.4 Cargo traffic through 3.7/1.6new customs facility (Dec 31, 2009) new customs facility (Dec 31, 2011)(export (exports &&imports/transit in imports/transit)million tons) (million tons)

2

1.4 Main Beneficiaries

10. The main target groups, as foreseen in the PAD were the transport and trade industries, aswell as developers. But it was also expected that the general urban population of the AMA wouldparticipate in first-round benefits, through reduced traffic congestion. The economic analysisreflected the benefits to both groups.

1.5 Original Components

11. The components of the project were divided into three groups, A, B and C, with land

acquisition (required for all main works envisaged) treated as a separate category.

Component A: Construction, and Engineering Supervision, of 40-km Phase 1 of Amman RingRoad (4 lanes to international expressway standard with central concrete divider throughout, plusservice roads on one or both sides on some stretches), in three sections, of which the Bank wouldcontribute to one, 14.5 km in length, and the others would be assisted by the Arab Fund forEconomic and Social Development (AFESD) and by the European Investment Bank (EIB).

Component B: Inland Port and Trucking Industry: planning, plus provision of initial infrastructureand utility connections, for an inland port and a new Customs Depot, and technical assistance forongoing deregulation and reform of the trucking industry, the Bank being responsible mainly forsupport on the trucking reform and infrastructure for the inland port/Customs Depot, and EIB forthe Customs Depot superstructure.

Component C: Project Management and Planning: technical support for urban and transportplanning, traffic engineering and, especially, overall project management, with the Bank mainlyresponsible for the outside support on all parts other than longer-term planning for the ARR, whichwould be supported by EIB.

1.6 Revised Components

12. There was no change in the project components or their activities.

1.7 Other significant changes

13. Following the unanticipated increases in the costs of key inputs and additionalconstruction works required due to technical modifications to the designs during construction, theoverall cost of the project was updated and an additional financing plan was approved by the threefinanciers in 2008. The project closing date was extended 30 months until December 31 2011, andit was ultimately extended again, in 2011, for a further twelve months, to December 31 2012.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

14. The project was exceptionally fast, from Concept Review in December 2003 to Appraisalin February 2004 and Board approval in June, still within the Bank's fiscal year 2004. This rapidtreatment was possible because there was such a large amount of preparatory work by thegovernment and the Bank on the Ring Road concept in earlier years. However, great attention was

3

also given to several aspects to ensuring that long delays would not arise during implementation.In particular, the need for large-scale land acquisition had been announced with much publicitynearly two years before and most of the valuation required was carried out in 2003. The procedureof actually taking over the land, compensating people, and helping those who had to move, hadstarted in March 2004. The experienced consultants hired to assist the Ministry of Public Worksand Housing (MoPWH) in the management of the project were fully in place by the time theBank's loan became effective, in December 2004. The required Environmental Management Planand Cultural Resources Mitigation Plan, given the project's Category A rating, was prepared aheadof time and moved into timely initiation. This quick preparation affected positively the safeguardsbut not the land development aspect which would have benefited from wider discussions amongconcerned local authorities to clarify needed priority step, depending on local circumstances.

15. The combination of road building with work to bring new lands into industrial/commercialuse and relocate the Customs Depot was largely a new ground for the Bank as well as for Jordan.Discussions with a wide range of government officials in Amman, and some representatives of theprivate sector, had indicated very strong support. However, the lack of detailed design for thisproject feature, including absence of a measurable key indicator and the complexity ofimplementation arrangements inevitably involved in land development, proved to impactnegatively the achievement of the development objective emphasizing this dimension of theproject.

16. It had been agreed that an inter-ministerial ADC Steering Committee and an ExecutiveCommittee would be set up and maintained throughout project execution (as emphasized in theLoan Agreements), with membership from concerned ministries and municipalities as well as thePrime Minister's office. The main function of the committees was to ensure that developmentwithin the Corridor area would be planned and undertaken in a comprehensive, unified andcoordinated manner. Their establishment had been agreed in Cabinet decisions, and this structurewas expected to be supported by a Technical Unit, financed by the project, which wouldcollaborate with all municipalities managing lands within the 300 square-km area. Based on theimplementation arrangements which are discussed in the next section, there is evidence that otherarrangements would have been more appropriate to achieve both the land development and theaccessibility objective of the project.

2.2 Implementation

17. Cost overrun: by the time section 1 is completed; the cost of constructing the threesections of the ADC will ultimately reach nearly three times what was estimated in 2004. The costoverrun of 184% results from: (i) price increase of key inputs, (ii) additional works required due tomodifications of project coverage and designs, and (iii) repeated delays in the completion of workssince 2010, additional management costs and unit prices resulting from general inflation.

18. Delays in construction: the construction of the three sections into which ARR-1 wasdivided, each financed by a different international finance institution proceeded much as planned,but with substantial delays. Particularly, serious delays occurred on the southern section (section1) which is now expected at best to be opened to traffic in the later part of 2014. As results, thecomplete 40-km stretch of the ARR-1 will become available five years later than foreseen atoriginal appraisal. Despite the attention given to avoiding delays, virtually all the specific forecastsproved overoptimistic. For instance, the original appraisal aimed at bids being called at the sametime as the corresponding loans became effective, and construction starting about six months later,but those expectations seem to have been unrealistic given the amount of work to be done at eachstage, including initially pre-qualification of bidders, and then the time needed for actual bid

4

preparation, evaluation of bids, selection and finally mobilization. Bids were ultimately calledabout six months after the loan effectiveness, and the construction of the Bank-financed section(section 2) began fifteen months later. The road was opened to traffic about 5 years afterconstruction began, instead of the 4 years as projected at appraisal.

19. The important delays as described in Section 1 result from initial retendering (only twobidders participated in the first round) pushing most of the construction over into the extremelydifficult period that the Jordanian government and economy have been facing since 2010 forreasons largely unrelated to the project but with serious consequences for its implementation,particularly because of government's budgetary constraints. Relatively expansionary fiscal andmonetary policies helped minimize the effects of the international financial problems in 2008-09on Jordan. Since then the country has faced very low growth. Particular problems have: (i)included the repeated sabotage of the Arab Gas Pipeline in the Sinai Peninsula bringing relativelyinexpensive gas from Egypt, and the need to substitute this gas with expensive liquid fuel fromelsewhere to maintain electric power supplies, (ii) lower than expected grants from other Arabgovernments, (iii) rising outlays for hosting Syrian refugees, and (iv) much slower economicgrowth than the country had enjoyed up to mid-2009. There is no doubt that these factors havecontributed to slowing the momentum for gradually bringing lands in the ADC area into higher-productivity industrial or commercial uses.

20. Serious implementation problems of more institutional and technical nature resulted fromthe land development program of the project, which was designed to help meet the needs ofcommercial/industrial sectors for affordable land to expand their activity, and to facilitate andpromote international trade.

21. On the trade side, a study was carried out to identify the best way to structure themanagement of logistics areas between the government and the private sector, and some 500hectares of land (not included in the 2004 project cost estimates) were acquired at the chosenintersection at Madounah for the new customs depot and accompanying inland-port facilities.However, in 2006 the government announced the creation of a Mafraq Special Development Zone,closer to the Syrian border, and works were abruptly suspended on any further conceptualizationand design for an inland port. In 2008, further development of the new Customs Depot wassuspended. No development has occurred on the lands acquired at Madounah beyond the landleveling, advance works and utility bulk supply lines undertaken in 2005-06. Consequently,neither has an inland port been created nor has the Customs Depot been moved from its currentcongested location at the edge of the city to the Madounah site near ADC. The suspensions ofworks to construct the new customs facility at Madounah were driven by a decision taken at thattime by the Army to build a Medical Center at Madounah. However, this plan was never executedand there is evidence that the new customs depot and related logistics platform might still beconstructed at Madounah. This was verbally confirmed by the Ministry of Transport and by theCustoms Department but without an official written decision.

22. The Steering and Executive Committees do not seem to have been maintained beyond thefirst years of the project, in part because the Greater Amman Municipality took over fullresponsibility for planning and zoning throughout the ADC area, reducing the need forcoordination between different government agencies at that level. The Technical Unit which hadbeen expected, with its high-level sponsorship, to play a very crucial role in assisting the localplanning authorities on land development was never created.

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23. One noteworthy feature of the large road investment was the development in 2008 of animproved pavement design, responsive to long-standing local problems of temperature-inducedcracking. This initiative was a direct result of a close cooperation between MoPWH, its engineersand consultants, and Bank staff. Experiments were made in the development of stronger and moreeven base course, pre-mixed and applied by paving finisher machine rather than grader, and harder,less slippery wearing course, using basalt aggregate (instead of local limestone which is subject topolishing) and mixing it with polymer-modified bitumen to yield stiffer end-product more resistantto rutting. Experience showed that the execution of the works had to be managed carefully to getthe best results. Yet the achieved results will yield significant savings on maintenance andrehabilitation. An adjustment of some JD 3 million ($4.2 million) was made to the costs of theARRI-1 project as a whole to enable this design to be used on all three sections. It has since alsobeen applied on other road works in Jordan.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

24. M&E Design: the results framework included adequate key indicators to measure theachievement of the transport objective of the project. However, it did not include a measurable andattributable indicator for the land development objective. On the one hand, annual surveys tomeasure the development within the ADC area were the only proposed intermediate indicator forthis project component. On the other hand, appropriate intermediate indicators which could havehelped indicate whether traffic volumes and costs were moving as expected in the interim were notselected. For example, an intermediate indicator to measure the existing traffic volume betweenZarqa and Queen Alia Airport could have been one useful guide to the level of traffic to bediverted to ADC once constructed.

25. M&E Implementation: There is very little indication that either the Bank, or theMoPWH which was officially responsible under the loan for all M&E, gave any priority to theeconomic and results monitoring - or comparison with evaluation model results - which theappraisal team recommended. The work of the local research institution on the land developmentdimensions of the project focused solely on region-wide aggregation of data that might possiblybecome useful in the longer term, yet showing no linkage with progress of the project roadbuilding, as emphasized by researchers' report. Unfortunately, this work did not tackle all thecritical start-up issues related to the initiatives to be taken by the public authorities and responsiblefor areas nearest to the new highway to begin the necessary rezoning, reservations of routes forlocal roads, or other measures, such as encouragement of utility-company interest to facilitateaction by investors seeking sites for establishing productive activities.

26. M&E Utilization: Little reference was made during implementation to the key indicatorsselected, mainly because they apply mostly to the situation when the investments reached theoperational stage. MoPWH and its consultants did of course make extensive and effective use ofmonitoring and evaluation systems at more microeconomic levels, and particularly in connectionwith the environmental aspects of the construction and road operations, as discussed below.

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2.4 Safeguard and Fiduciary Compliance

27. Given the project's assignment to Category A, a detailed environmental assessment wasprepared and made available to the public. An Environmental and Management Plan (EMP) wasalso produced. The assessment indicated that the main adverse environmental impacts would beconnected with the construction period. They could be minimized through careful planning andsupervision of construction activities, together with sound monitoring. The EMP stressed the needfor environmental supervision of the contractors as well as other actions to ensure environmentalprotection during construction. Responsibility for this work was clearly assigned to PMT assistedby the construction supervision consultants. In addition, the project paid for a training program inenvironmental management reaching a much wider range of participants. PMT, with the help ofits consultants Dar Al-Handasah, developed a scheme that was notably thorough, and perhapsfairly original, to closely monitor each contractor's performance and apply temporary financialpenalties until shortfalls were rectified (see Annex 5). This is considered to have made asignificant positive difference to the quality of environmental performance attained.

28. The scale of land acquisition required for the project was far greater than any landacquisition program implemented previously in Jordan. The number of people ultimately affected(i.e., owners/occupants who lost some of their land, housing or other physical assets) was 3,028,and compensation payments have amounted to about US$ 160 million equivalent. Three-quartersof the compensation (440 ha, 850 plots and 2250 PAPs) was for the 40-km ARR- 1 route and onequarter (500 ha, 240 plots and 778 PAPs) was for areas at Madounah which were selected in 2006for the Customs Depot and the Inland Port. A Land Acquisition and Resettlement Plan (LARP)was prepared in 2004, and the responsibility for its implementation assigned to joint effortbetween the MoPWH (and particularly its Community Liaison Office) and the Department ofLands and Surveys, which had been working together since early 2003. Their work was stronglybacked and closely followed by members of the PMT team. Particular attention was given topeople affected who were considered vulnerable, including female landowners, tenants and peopledependent on customary rights (e.g., herders) and the 300 or so owners/occupants who had to findnew places for their dependents and themselves to live.

29. An innovative feature, compared with previous practice in Jordan, was to include as earlyas possible in the execution of the program, a year or so before the project's Mid-Term Review, athorough assessment by an independent monitor. She carried out some physical and manytelephone interviews, and reached broadly positive conclusions. The situation was complicated bythe happenstance that the land acquisition finally occurred in a period of rapid increases in landvalues and costs of building. Fortunately, in recognition of the fact that the road to be built wouldbe a limited-access facility (the first in the country), the government agreed to pay each owner forall the land taken (rather than 75% of it, as permitted under Jordanian law and applied in previousrequisitions of land for public purposes). The way the land acquisition was handled appears tohave given some degree of satisfaction to most of those who had to give up part or all of theirlands. In addition, there is no evidence of people seriously hurt and without recourse.

7

30. Fiduciary responsibility was largely in the hands of the MoPWH and exercised mainly bythe PMT and the Ministry's Finance Department in coordination with the Ministry of Planning andInternational Cooperation (MoPIC). The Ministries had extensive experience of work with theBank's procurement, accounting and auditing standards and reporting requirements. Themanagement consultants hired by the PMT brought additional international experience, especiallyon procurement. The work proceeded without incident.

2.5 Post-completion Operation/Next Phase

31. The large delays that have arisen on the institutional side with regard to management anduse of the Corridor lands, and on the road infrastructure side with respect to full completion ofARR-1, mean that much has yet to be done to bring substantial benefits to Jordan from the verylarge effort made. On the road construction side this will be mostly a matter of timely fulfillmentof the final stages of construction, followed by good management and maintenance of the high-grade stretch of road added to the network. On the land development side, the Customs Depotmay yet be confirmed as the future occupant of the site near Madounah Interchange that had beenidentified and part-prepared for it in 2006, but decisions do not appear to be imminent on this oron responsibilities for management of the logistics platform around the Depot or any widerdevelopment, such as an inland port.

32. For the road itself the key issue will be the assurance of good maintenance and avoidanceof right of way encroachments which have reduced capacities of some other main roads in thecountry. Engineering designs have been adjusted to rule out such intrusions, but continuingenforcement will be needed. Important work has also been done under the project to develop thehigh-grade, smoother road surface (para. 20), but routine and periodic maintenance will beessential. The Bank's appraisal suggested that it might be desirable to tender a contract for privateoperation and maintenance of the road once completed, preferably using performance basedmaintenance contracting or an adapted form suitable for Jordan. The International FinanceCorporation (IFC), which has been very active in the country in recent years, has promoted theconcept of road concessions for tolled operation, thereby directly raising the funding needed formaintenance, and possibly combining responsibility for operation of the ARR-1 stretch with thatfor construction and subsequent operation of Phases 2 and 3 of the Ring Road in simultaneous orunified contracts, as has been done in a few Latin American cities. A serious immediate problemto be resolved due to the unfortunately lengthy period of partial operation, and consequentlylimited night-time traffic, is the repeated stealing by robbers of large lengths of the copper cablefeeding the overhead arc lighting installed down the center of the highway sections alreadycompleted.

33. As regards broader road transport issues, high priority still attaches to improvement ofboth the efficiency and the quality/safety of Jordan's long-distance freight transport services.Funds included in the 2004 loan to finance technical assistance for this purpose were substitutedby other sources and freed for other uses, but the projections of improved performance remainedan element of the project. Reform efforts, aimed at gradually eliminating the large excess capacityin the country's heavy trucking fleet and securing better quality-price combinations byderegulation and competition, have had some success - especially on the crucial Amman-Aqabaroute following major reform in 2006. The severely over-age share of the heavy truck fleet (over15 years old) was also brought down from nearly two-thirds in 2003 to less than a third by 2009.But there is still a large excess of heavy long-distance freight vehicles, many of them in poorcondition and owned by individuals rather than companies, exerting important depressive effectson prices for services but also on quality and safety of services.

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34. Government's capacities for effective regulation of the industry have been strengthened bycreation in 2010 of the Land Transport Regulatory Commission (LTRC). The pace at which theseefforts can progress nonetheless depends to significant extent on private-sector progress ingenerating enough alternative employment opportunities for ex-drivers. Provided reasonableprogress on this front continues, top priorities in the trucking sector at this stage are continuedtight restriction on imports of heavy vehicles more than one year old, much more effectiveenforcement of existing regulations (such as driver licenses, vehicle condition, dangerous goods,and securing of loads) and introduction of stronger safety programs, limitations on driver hoursbehind the wheel, higher registration fees for older trucks. It is worthwhile noting the recentdecision taken by the Minister of Transport to establish new units within LTRC, including atransport safety unit.

35. Whether directly adjacent to the Customs Depot or on a larger scale, as in an inland port,logistic facilities were always foreseen to be matters for private investment and management. Yet,overall management of an estate devoted to this purpose, especially for international trade, mightstill be better left in public hands, as in the landlord port-authority formula that has been adoptedin so many countries for running their seaports. Final decisions are urgently needed on thesematters in Jordan to enable private investors to be effectively mobilized and to give them enoughconfidence in the scheme to participate.

36. Important work remains to be carried out to improve the capacities of the local authoritiesresponsible for the different parts of the ADC area to manage their areas to best advantage of theirinhabitants for the long-term. Land planning responsibility was centralized with Greater AmmanMunicipality (GAM) in 2008. However, some of the local authorities found GAM's charges underthe unified set-up too high and took back fuller control of their areas in 2011. By the interchangesand overpasses it provides, ARR-1 helps to set a strong framework for development of the trunkroutes across the area. Agreement was reached gradually to upgrade an existing North-South roadrunning up the center of the ADC area. Yet, responsibility for all collector and smaller roadsremains with the local planning authorities, whether GAM or the municipalities themselves.

37. The authorities responsible for each area have to adjust the zoning of their lands in tunewith emerging opportunities and possibilities, apply those provisions once agreed and approved,and attract potential users, often including in the first stage the utility companies to bring trunkconnections. Lands must be reserved for local roads and links with neighboring towns. The extentof action required will clearly vary greatly across the region, depending principally on suitabilityof sites for meeting the near-term needs that the economic progress of Greater Amman creates.Current indications indicate that the earliest substantial rezoning of areas for denser developmentmay occur in the northeastern part of the ADC area, closest to Zarqa, where the responsibilityremains in the hands of GAM. However, because of lack of funds for local road building mean, itis expected that progress will be slow.

38. Given the delays that have accumulated and the large amount of leeway to be caught up, itwould be highly desirable that the Government commit itself today to a full economic re-evaluation of the Amman Development Corridor project in about four or five years' time, say 2018.The purpose of such announcement would be to give the Jordanian public and authorities everyincentive to build the consensus and compromises that are needed to reach firm decisions aroundlarge infrastructure investments and enable effective actions to implement them.

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3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

39. The ADC project remains very relevant to Jordan's current national developmentobjectives, for the same triple purposes of de-congestion, international trade facilitation, andincreasing the space available for commercial/industrial investments, for which it was originallyapproved. The Bank's most recent strategy paper for its work with Jordan, reviewed by the Boardin February 2012, gives great emphasis to the reinforcement of the country's growth performance,finding better ways to get more benefit from the comparative advantages highlighted here. As oneof the three specific ways in which it proposes to help, the Bank will seek to strengthen thefoundation for sustainable growth with a focus on competitiveness and support priorityinfrastructure, including by leveraging private-sector investment. It refers to the ADC project asone from which the country should be drawing significant fruit in the coming years.

40. Quite apart from the major upgrade brought about in one of the most important pieces ofthe country's infrastructure - corresponding to the large scale of the capital investment carried out- a big investment has also been made in the discussion and review of alternative ways ofmanaging the future development of transport, foreign trade movements and land development inthe Amman area, some of it reflected in the project outputs listed in Annex 2. Promising solutionswere identified and were first implemented but had to be suspended. Today, those solutions andplans need to be dusted off, double-checked for the extent to which they will attract, and contributeto, a genuinely competitive private sector (in the provision of transport and logistical services andin development and supply of land and buildings). As new issues and disagreements betweendifferent public authorities will certainly come up in the course of bringing these arrangements tolife, it is important to find ways of resolving such disagreements for these institutions morequickly than during the first five years of this project's life.

41. For this new stage of the project, directly serving a mainly business clientele, whether onthe transport infrastructure or in the Corridor lands, the needs for a more practical and usefulmonitoring system will be very much the same as described for the higher management level inparas. 19-21 above: specific year by year targets for the particular service/s being offered butcomparable with the soundest figures that can be generated for the clientele that is going tocompetitors or simply being missed.

3.2 Achievement of Project Development Objectives

42. There is every reason to expect that the 40-km first phase of the Amman Ring Road willdeliver substantially on its transport objectives once it is finally opened all the way from Zarqa tothe Airport Highway, but the funds needed to fulfill outstanding commitments to the contractor ofSection 1 and to enable him to complete the project have not yet been finally committed, so that nofirm target date for completion can yet be given. The latest indications, showing the effects of thehalf of the road that has been in full operation since early 2012, demonstrate significant progresstoward the achievement of the PDO targets most directly reflective of the road's performance.Surveys in April 2013 show that travel time from Queen Alia International Airport to Zarqa hasnow fallen from 60 minutes to 48 minutes and that as much as 8% of traffic volumes on relevanturban streets has been diverted to the part of the road now open. The original target values ofthese two indicators - 40 minutes and 10% of urban traffic diverted - should be fully met when thesouthern half is completed so that the whole road will be open to traffic.

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43. Trends have also been quite positive on the other two indicators that are related to thetransport objectives of the Development Corridor but largely independent of its construction.Current indications are that the cost to transport a twenty-foot container from the Zarqa QIZ toAqaba Port is US$ 425 equivalent, which is a little less than the current value of the US$ 300target set in 2004, which is estimated at US$ 450, if we take into consideration that the currentprice of oil in Jordan is about 250% above 2004 levels. Broader indications about thedevelopment of the country's trucking services are also that some progress has been made inreducing excess capacities and raising service standards thanks to the liberalization andderegulation that had already been started when the Bank's loan was made.

44. As regards traffic passing through Amman Customs, despite the non-existence of theplanned new Customs Facility, it has grown at rates quite similar to those projected in 2004.Definitions have changed somewhat and Amman Customs have not been handling transit trade atall, but the total volume of imports and exports passing through the Amman Depot rose some 44%between 2004 and 2012, compared with the 53% targeted in the Bank's indicator. The increaseachieved by 2011 was in fact 53 %, but volume fell substantially between 2011 and 2012 due to thedifficult political and economic situation confronting the region. While Customs have done theirbest to adapt their facilities and procedures to cope with the expansion of traffic, they, their clients,and the latter's transporters feel the need for more spacious and convenient facilities much moreseriously now than ten years ago.

45. How long it may take to generate results convincingly meeting the project's other mainobjective, regarding access to affordable land, is more difficult to say because a valid answer willanyway be much more judgmental and the market being assessed is a lot more complicated than inthe case of specific transport services. But equally it is very certain that the road will befacilitating access to more affordable land, exactly as intended, and that its full opening will befollowed by increased development of sites for industries, enterprises and apartment buildings.Broader developments in Jordan and the economic situation of the region, and in the expansion ofinternational trade even more widely, will also obviously be important in determining the growthof demand for space - in Jordan, in Amman and in the Corridor. To conclude, the second PDOwas not achieved to date and it is as yet unclear when the access that the road provides to moreaffordable sites for industrial/commercial activity will become a significant factor in AMA'sdevelopment.

3.3 Efficiency

46. The Mid-Term Review in March 2008 indicated that dollar costs of the project had morethan doubled since the original appraisal in 2004. The principal increase was in the costs of theroad construction works. It was mainly attributable to rapid increase in prices of oil-based andenergy-intensive inputs (changes in world prices, further magnified in Jordan by simultaneousdecisions of government to abandon some earlier subsidization policies) since the 2004engineering estimates. Adjustments to the physical content of contracts, in the course of theirexecution, had been significant but not greater than normal for such a project. All the originalfinanciers contributed substantially to covering the cost increases. Despite the very large costoverruns and long delays incurred, the ARR Phase 1 road has continued to promise an EconomicInternal Rate of Return marginally above a 12% opportunity cost of capital. This is disappointingcompared with the original appraisal which estimated a return of 17%, based however on totalinvestment costs which do seem to have been on the low side in an increasingly unstable regionalsituation. All the economic analyses, from those carried out at appraisal in 2003 to the current(2013) re-estimate have followed exactly the same methodology, updating simply for revisedestimates of investment costs and updated figures for the standard vehicle operating costs and for

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commercial drivers' wage-costs (see Annex 3). Traffic forecasts for ARR-1 have been keptbasically the same for the coming years as projected in the original appraisal, an assumption whosevalidity is to some degree confirmed by the first actual traffic counts, of April 2013.

47. The main reason for the current analysis (indicating rate of return of 12.7% and NPV ofJD 11.7 million) to continue to yield results closely similar to those of 2008 is the further build-upof traffic demand with the passage of time, now demonstrated on the road itself in the form of thehigh flows on the completed northern portion that was opened in 2012. However, further delay incompleting the southern portion, and hence the whole link from Zarqa to the south of Amman,could still undermine these positive results. It should be noted, however, that the road was, andstill is, expected to yield some non-quantifiable benefits in the form of significant improvements inenvironmental conditions on the streets (in generally heavily populated areas) from which thefreight vehicles as well as many cars would be transferring to the new road. Air quality and safetyon those streets should in particular be notably improved. To conclude, the project was efficientdespite the lower rate of return achieved.

3.4 Justification of Overall Outcome Rating

Rating: Moderately Unsatisfactory

48. Based on the combination of relevance, efficiency and the fact that objective 1 has not yetbeen fully achieved (although likely) and objective 2 was not achieved and is unlikely to be fullyachieved in the near future, the overall outcome for this project is rated Moderately Unsatisfactory.The centerpiece of the project remains uncertain of reaching the operational stage even now whennearly twice the expected construction time has passed. Supporting pieces of the project, such asCustoms Depot, inland port and strong support to local governments towards land developmenthave gradually been dropped without significant explanation or evident rationale.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

49. The project was focused toward economic growth and efficiency, and it succeeded inadding to Jordan's land acquisition procedures significant steps to ensure that female land-ownersreceived equal rights and treatment with those given to males. One key step was to ensure thatsome of the Community Liaison Officers were females. A second was to include all female PAPsautomatically in the 'vulnerable group' requiring more than standard attention. A third was toprovide any financial compensation due to female PAPs in a form that could be accessed by no-one other than the women themselves: they had to pick up their own checks made out in theirnames as affected persons.

(b) Institutional Change/Strengthening

50. The most significant capacity building may have been accomplished (by consultants, butwith support from World Bank staff) on project management and land acquisition, including theclose inter-agency cooperation required (MoPWH, LSD and MoF), and on environmentalsupervision in public works operations, including contractor execution of major construction ormaintenance contracts (see Annex 5). This kind of contribution may have extended to zoning andland-use planning and development in a few local authorities in the ADC area.

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4. Assessment of Risk to Development Outcome

Rating: Substantial

51. The history of the project to date combined with the exceptional financial difficulties thatthe government has confronted over the last three years and continues to face, indicate high risksof further delays, especially on completing Section 1 and the construction of the new CustomsDepot and land development issues. Yet, there was a confirmation from the Ministry of Planningand International Cooperation that a portion of the United Arab Emirate (UAE) grant to Jordanapproved on May 14, 2013 will be used to cover the remaining cost of Section 1. At the same time,the Ministry of Transport and the Customs Department seemed optimistic on the construction ofthe new customs depot and logistics platform at Madounah site as originally planned.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

52. The Bank had given much attention to the preparation of this project and was enterprisingand thoughtful in contributing to the multi-sectoral formulation of it, including logistics and land-access dimensions. Outstandingly good work had been done on land-acquisition andenvironmental aspects of the project, and effective arrangements were made to ensure timely andhigh-quality handling of these vital aspects. The Bank may, however, have misread the degree ofsupport for the multi-sectoral formulation across the government as a whole, or allowedinsufficient time for real consensus to develop. However, it also built in provisions in the loanagreement, such as the formulation and maintenance of a Steering Committee, ExecutiveCommittee and Technical Unit, to facilitate continued discussion and learning between variousagencies, assisted by consultants with direct experience of the way the issues were being handledin other countries. A weakness which had even more serious medium-term consequences thanexpected was the reliance on cost estimates that proved to be insufficiently updated, along withprice contingencies of only 4%. More attention should have been given to the development of aMonitoring and Evaluation (M&E) framework during preparation which could have been bettersuited to the different purposes and dimensions of the project.

(b) Quality of Supervision

Rating: Moderately Unsatisfactory

53. Bank's supervision efforts through to the period following the Mid-Term Review madeimportant contributions to project achievements, especially in several specific areas, for example,in the large land acquisition and the research and experimentation to develop a pavement designbetter suited to local conditions. But whether for reasons of lack of time, absence of interest, ordoubt about the likelihood of real improvement, supervision was not able to give the attention thatwould have been required to secure greater progress on the 'access to affordable land' PDO.Supervision appears normally to have been taken by surprise when the government progressivelyjettisoned components: Technical Unit (never recruited), Steering Committee (no meeting since2006), Inland Port (dropped when Mafraq scheme was announced), and Customs Depot (no

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progress since 2008 despite continuing frequent reference to alternative possible sites). Optimismthat progress would still occur, so that it was appropriate to rate the project 'Satisfactory' on ISRs,proved justified on occasion, for example trucking reform efforts. Yet, it proved persistentlyinappropriate on some others, most seriously the Customs Depot transfer to the ADC area.

54. Although the full extent of Government's financial constraints since 2010 would not havebeen foreseeable, it would probably have been worthwhile to undertake a restructuring exercise ofthe project in 2009, after the Mid-Term Review in order to re-focus the objectives more precisely,including 'post-completion' actions and to adopt more appropriate key indicators and firm upfinancing arrangements.

Justification of Rating for Overall Bank Performance

Rating: Moderately Unsatisfactory

55. The Overall Bank performance is rated Moderately Unsatisfactory based on a combinationof: (i) Moderately satisfactory rating for Bank performance in ensuring quality at entry, (ii)Moderately unsatisfactory rating for quality of supervision, and (iii) Moderately unsatisfactoryrating for overall outcome of the project.

5.2 Borrower Performance

(a) Government Performance

Rating: Moderately Unsatisfactory

56. The government succeeded in delivering, in a timely manner, the financial resourcesrequired for a land acquisition program far larger than it had ever previously undertaken. It alsocarried, from its own resources, nearly one-half of the $300 million cost overrun incurred by theproject, a contributory cause of the acute financial stringencies the government has suffered since2011. Nonetheless, the inconsistency of its own actions, sudden reversals of its earlier decisionswithout explanation and failures to deliver decisions promised on outstanding issues, have beenthe main reasons for weak and much delayed achievement of the potential benefits of the project.

(b) Implementing Agency or Agencies Performance

Rating: Satisfactory

57. The Ministry of Public Works and Housing devoted much thought and effort to the projectat all stages, particularly basic conception, coordination with other government bodies, selectionand management of effective consultants and contractors. Greater attention to the adequacy ofcost estimates when the original tenders were floated in 2005, and to the packaging of requestedbids, would probably have enabled the Ministry to avoid the rebidding required for ARR- 1 Section1, which had such dire eventual consequences, extending the contract into the period ofgovernment's extreme financial stringency since 2011.

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Justification of Rating for Overall Borrower Performance

Rating: Moderately Unsatisfactory

58. The Bank's ICRR guidelines consider that a combination of mixed (satisfactory andunsatisfactory) ratings for Government and Implementing Agency on the one hand, with a"Moderately Unsatisfactory" outcome rating for the project on the other hand, results in a"Moderately Unsatisfactory" rating for the overall Borrower performance.

6. Lessons Learned

59. The three-dimensional concept of the Amman Development Corridor project (transport,land and trade) was an imaginative response to Amman's needs, but the lead agency fordeveloping the needed consensus and coordination would probably better have been the Ministryof Municipalities and Greater Amman Municipality (GAM) - with which the Bank was alreadycollaborating quite successfully on other subjects. The MoPWH would still have been brought into take full responsibility for implementation of the agreed design of the centerpiece road, since itwould necessarily be a national highway rather than a municipal road. Nevertheless, the GAM,and the small municipality authorities which are responsible for much of the land area included inthe Corridor, would together have taken a more active lead role in bringing the other dimensionsof the project to reality in ways that would best serve the interests of their populations. MasterPlanning would have proceeded much as it did with GAM's efforts for Amman and then morebroadly for ADC area but there would have been more activity at the local level to contribute tothat planning and move gradually towards the measures by which the plans would becomeeffective. A strong coalition of all the local authorities might also have been able to work withtrade interests to enable the government to stick to its commitment for the more efficient (and lesspolluting) arrangements for handling international trade in the Amman area.

60. An alternative and perhaps more promising approach to securing a better combinationbetween capacities for transport and urban development - in the country and in the Bank - wouldhave been to depart more radically from the perhaps overly complex and ambitious single-projectconcept and to seek instead a programmatic approach, with a broad vision jointly developed bytransport and urban authorities with the support of respective Bank units and a series of perhaps 3or even 5 follow-on projects each focused on a clearly delineated component set in such a way asto make an important contribution to effective realization of the agreed overall vision. With strongsupport from the central leaders of government, a programmatic approach might have been able toachieve more over the last ten years in Jordan than what was possible for GAM or any singleauthority, given the stresses to which all have been subject.

61. Especially when the implementation of a major project will depend on timely completionof a number of large and complex independent contracts, it is vital to precede the eventual launchof bidding with (a) double-check that cost estimates are fully up-to-date with latest information onprices of major inputs and current market conditions, so that sufficient funds are in hand toproceed immediately with the project, and (b) experienced and knowledgeable packaging of thebids - including division of the works amongst different packages - so that they do succeed inattracting enough offers to enable a sound decision in favor of one bidder for each package and,consequently, timely commitment of all the contracts required for implementation of the project.While the bidding stage is particularly key to any project, there are of course many facets offinancing agencies' work that are important to the pace and success of development efforts.

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62. The development objectives should be attributable to the specific interventionsimplemented by the project. They should focus on the outcomes for which the project can be heldaccountable given its duration, resources, and design be clear and precise, and not encompassambitious higher level objectives that depend on other efforts outside the project scope. The resultschain should be clearly identified for this type of projects and SMART (Specific, Measurable,Adequate, Realistic, Time bound) indicators should be adopted for every aspect of thedevelopment objective. A step which might interest the increasing number of partnerscontributing to the financing of parallel parts of a project/program, like ADC, would be to agree inadvance, and to monitor, key performance indicators capturing the work and the contribution ofeach financier, as a help to the sharing of experience and lessons.

63. One contributor to the difficulties that the MoPWH has had in bringing to conclusionconstruction of ARR-1 is the spending cap that the Ministry of Finance has introduced to avoidproblems of excessive indebtedness. Caps have been set on the aggregate spending by each lineministry, and within that cap, the line ministry prioritizes expenditures. Over the past severalyears, disbursements on projects financed by the Bank have been restricted in order to stay withinthe ceilings, and this has delayed implementation and compromised the achievement of projectoutputs and outcomes. This situation has affected all sectors and many other IFIs beyond the Bank.To prevent such situations in the future, line Ministries and the Ministry of Finance would beadvised to ensure that Bank (and other IFIs) projects are reflected in the Government's spendingplan for the fiscal year. The Bank's country management unit is working closely with thegovernment to find the best ways of adjusting the management of sectoral capital investmentprograms to fit within the constraints of the government's fiscal and public-debt situation.

64. As regards land acquisition activities, government's agreement to pay for the first time forall land requisitioned was obviously crucial, but the package of arrangements introduced to ensuregood implementation on the ground, sensitive to the needs of the different people directly affected,was an important factor in the overall success and the basis it establishes for future landacquisition programs. Key elements to the package were: early development within the executingagency (MoPWH), of the Community Liaison Office for active linkage with PAPs throughout theprocess; inclusion of female as well as male staff in the Community Liaison Office; earlydevelopment of strong collaboration between CLO and DPS; provision from the beginning forspecial attention to vulnerable categories among the PAPs and to ways of easing their adaptationto the new situation; establishment of direct lines of communication between the authorities andfamilies which had to re-establish themselves in new locations; and, of course, development andmaintenance of a very strong central data base on all concerned land owners/occupants, preferablyincluding brief note of all contacts (not only those on financial compensation) that occur; andsound mechanisms to ensure female owners/occupants do receive the compensation intended forthem.

65. Systematic environmental monitoring, reinforced by small monetary incentives, can makea worthwhile difference to contractors' adherence to good environmental standards throughouttheir work. For the ADC project, bid winners were provided very detailed lists of the standards(Jordanian and international) required to be fulfilled in each phase of the work and guidance on theways performance would be monitored and graded by thorough independent inspection eachmonth. They were required to sign a statement of commitment to these standards. All thecontractors on the project became subject to withholdings at various times for different matters -most frequently, poor management of borrow pits, excessively high stacking of loose material inthem, and insanitary conditions in worker camps, but also many other individual items. Thesystem brought about useful improvements over the course of time in adherence to desiredstandards.

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66. Initiatives taken by Amman in connection with air-quality aspects of transport andconstruction will also merit replication in other projects and countries. Jordan signed theEmissions Reduction Purchase Agreement and several of the activities for which it hoped to earncredit were supported by the ADC project, including the ARR-I itself (for reduction of congestionon the urban routes from which traffic would be diverted) and planned fixed-rail lines. Asystematic Environmental Quality Monitoring (EQM) program was also started in 2006 for regularmonthly monitoring of noise and five key air-quality measures (Lead, PM1O, N02, S02 and CO)in the peak traffic hour at 13 sampling locations chosen for proximity to project construction sitesnear roads offering different kinds of traffic conditions. The results showed that, despite visibleeffects, construction was seldom a major problem but that traffic sometimes was. The system willtherefore be of great value for measuring the real difference to urban air quality that is made byARR-1 once fully open, although it is now felt that coverage of a larger number of sites, morerepresentative of the roads from which traffic would divert, should have been maintained.MoPWH's staff were fully trained to take over this system and the special measuring equipmentinvolved from their consultants who had developed it, and to maintain regular monthly readings.

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Annex 1. Project Costs and Financing

Project Cost by Component (in US$ Million equivalent)Appraisal Additional Financing Actual Estimateb Percentage

Components Estimate Appraisal (March 15, 2013) of 20082004 Estimate Appraisal

2008aA. Amman Ring Road 106.92 220.99 279.87 127Phase 1 ConstructionAl: Section 1 (18.5 km) 43.60 89.63 116.10 130A2: Section 2 (14.5 km) 34.16 62.94 77.00 122A3: Section 3 (7.0 km) 29.16 68.42 86.77 127B. Inland Port, Customs 8.07 40.35 3.01 7Depot, TruckingBl: Access and 4.91 16.79 2.62 16InfrastructureB2: Building & 2.84 23.24 -- --

SuperstructureB3: Port/Depot Planning, 0.32 0.32 0.39 122Trucking ReformC. Project Management 4.71 11.84 14.66 124& PlanningC1: ADC Area Master 0.79 0.79 3.12 395Plan, Dev. PromotionC2: AMA Transport 0.15 2.00 0.50 25Planning, Traffic Eng.C3: ARR Phases 2 & 3 0.50 3.10 2.22 72Planning & DesignC4: Project Management 3.27 5.95 8.82 148& Tech. SupportLand Acquisition 40.90 70.00 158.43 169(Expropriation)

Total Project Cost 160.60 343.18 455.97 132Physical Contingencies 8.55includedPrice Contingencies 4.27includedFront-end fee IBRD 0.38 0.46 0.27 59

Total Financing 160.98 343.64 456.24 133Required

(a) Financing

'World Bank Project Paper on Additional Financing for US$ 33 million, November 6, 2008.b The actual estimate includes US$ 42 million to cover payments after December 31 2012 to close final bills for Sections 2 and 3 of

ARRI ($12 million) and to bring Section I to full completion ($30 million)

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Appraisal Revised Actual PercentageSource of Funds Estimate Estimate Estimate' of 2008

(2004) (2008) (2013) AppraisalBorrower 51.08 110.97 194.63 175Arab Fund for Econ. & 39.40 80.84 78.16 97Social DevelopmentEuropean Investment Bank 32.50 80.83 82.87d 103International Bank forReconstruction and 38.00 71.00 71.00 100Development

3Financing in the amount of US$ 29.58 million equivalent has yet to be obtained.d Including grants, in the amount of US$ 4.92 equivalent, for ADC Master Plan and ARR Phases 2 and 3 studies.

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Annex 2. Outputs by Component

Component Outputs Delivered Current Status/CommentsA. Amman Ring Road 1 Construction and Supervision

Al. Section 1 1 Interchange 18.5 kms of 2-lane dualcarriageway,2 major interchanges and 4overpasses, by October 2014

A2. Section 2 13.4 kms of 2-lane dual carriageway,1 interchange,l overpass

A3. Section 3 8 km, two short sections of 2-lane dualcarriageway, 2 major interchanges, 3overpasses

B. Inland Port and Trucking IndustryBl. Port/Depot - 8 km of roads up to sub-grade Access and infrastructure to beAccess and Infra- level finalized once the new customsStructure - 27 hectares of parking depot and logistics platform/inland

- Drainage facilities port will be built together at this- Laying 400 mm water pipe from Madounah site

Hizam road- Electrical cable connection ( 2*33

kv) from Sahab sub-StationB2.Customs Depot No outputs Final decision to construct a newBuilding and customs depot and logisticsSuperstructure platform/inland port at this

Madounah site is still pendingB3.Trucking & - Technical Assistance on The Trucking Sector review wasPort Planning Trucking Sector Review financed by an EU grant

- Technical Assistance on Port &Depot Planning

C. Project Ma agement and PlanningCl. ADC Master - ADC Master Plan - ADC Master Plan financedPlan & Develop- - Monitoring Development Report by an EIB grantment Promotion (land values, building permits,

licensed areas and businesslicense)

C2. AMA Trans- - Feasibility and preliminary design - Detailed design andport Planning & study of public transport bidding documents yet toTraffic development, focusing on rail- be preparedEngineering based mass transit alternativesC3. ARR Phase 2 - feasibility for ARR 2 & 3 ( 80 - Feasibility study Financedand 3 Planning & km) by EIB grantDesign - PPP study to construct ARR 2 & - PPP study financed by IFC

3C4. Project Mana- Project Management Consultant retainedgement and Tech- from 2004-2012 for overall management,nical Support monitoring progress, backing environment

and resettlement

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Annex 3. Economic and Financial Analysis

1. The Amman Development Corridor will replace, and/or alleviate overload on, the existinglink between the south and the northeast of Amman. The existing route (Airport Road to Zarqa viaHizam Road) runs through urbanized areas and is becoming heavily congested as it handlessubstantial volumes of freight traffic.

2. The Bank's 2004 PAD included an economic evaluation of the Corridor projectshowing:

* Economic Internal Rate of Return (EIRR) = 17.5%* Economic Net Present Value (ENPV) = JD 86.3 million

3. Updated evaluations were prepared in December 2007, May 2008, July 2008, and August2008, yielding the following results:

Table 3.1 Results of Previous Economic AnalysisDate of Analysis EIRR ENPVDecember 2007 15.89% JD 57.46 millionMay 2008 12.94% JD 16.64 millionJuly 2008 13.01% JD 17.52 millionAugust 2008 12.73% JD 12.81 million

4. The economic evaluation compares the costs to society of a proposed project (the with-project case) and the alternative costs to a society if this proposed project is not implemented (thewithout-project case). The comparison between the two cases leads to the estimation of the projectbenefits to society as a whole. The benefits in the case of road projects will be time savings andlower vehicle operating costs, for both normal and diverted traffic.

5. Consistent with the previous studies done on the ADC project, the following are the mainparameters used in this economic evaluation:

* Investment costs are adapted to economic costs using a Standard Conversion Factor (SCF)of 0.93 (based on value of imports less taxes).

* The 2004 update study used a discount rate of 12% and this rate is retained for the currentexercise.

* The project evaluation period is 25 years, starting in the year 2004, when the firstexpenditure took place, and finishing in the year 2028.

* All costs used in the economic analysis are in Jordanian Dinars, in constant 2007 prices.* Residual values are estimated for the investment, based on a life of 40 years.

6. The economic evaluation identifies costs and benefits in each year of the evaluation period,and calculates the net benefits to estimate the Economic Internal Rate of Return and, usingdiscounting techniques, the Economic Net Present Value. The previous evaluations of the ADChave all used this approach.

7. The updated cost of the construction and supervision elements of the Project, includingland acquisition for the road and related technical assistance, are shown in Table 3.2 below (in2007 prices for comparison with previous evaluations):

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Table 3.2 Project Costs by ComponentsComponent Total Costs (JD millions)

@2007 prices @ Prices paidA. Construction and Supervision 181.65 198.31B. Inland Port and Customs Depot 2.12 2.12C. Project and ADC Management 5.18 6.15D-G Land Acquisition and Financial Charges 75.30 83.70Total 264.28 290.40

8. The investment costs taken into account in the economic analysis are the same as thoselisted in Annex 1 except for three items excluded here: the US$ 40.43 million (JD 29 million) ofland acquisition costs that were used to acquire land for the Customs Depot/inland port which havenot gone ahead, and the two EU grant-funded studies (ADC Master Plan and Amman Ring RoadPhases 2 and 3), together costing US$ 4.92.

9. The 2003-04 Amman Development Corridor study was based on the 1999 Greater AmmanUrban Transport Study (GAUTS) model. The Consultant built a base-year model using SATURNsoftware, from the 1999 GAUTS with the aid of information from additional traffic counts. Thenby employing matrix estimation techniques, the base-year 2003-04 was produced. The forecast oftraffic from the base year 2003 took into account the general growth of traffic in Greater Ammanand the proposed land use expansion program to the east of Amman, between Hizam Road and theproposed ADC.

10. Based on the traffic model developed for the 2003-04 ADC study, traffic volumes wereestimated for various flow groups for both the Do Minimum (DM) without-project case and theDo Something (DS) with-project case for three forecast horizon years of 2008, 2018 and 2028.The economic viability of the ADC was analyzed using the 2003-2004 ADC traffic model results.

Table 3.3 Average Forecast Daily Traffic

Average Forecast Daily Traffic

Section ADC Section Name 2014 2018 20281. Airport Rd-Sahab Rd. 19,708 41,654 82,7791/2 Sahab Rd.-Madouna Rd. 29,527 43,700 71,2002 Madouna Rd.-Zarqa Highway 21,945 33,000 60,8003 Zarqa Through Route-1st . section 14,248 23,800 50,2003 Zarga Through Route-final section 14,861 18,500 27,2003 Zarga Eastern Bypass 6,211 7,700 9,700

11. As Section 1 of ADC will not be completed before mid-2014, while Sections 2 and 3 havealready been completed and opened to traffic since February 2012; a limited traffic count wasconducted on April 2013 to measure the actual current traffic volumes on the opened sections ofthe road and to give an indication of the current benefit and the amount of traffic being divertedalong these opened parts of the ADC. This exercise was not meant to replace the original trafficmodel and its forecasted traffic volumes for the horizon years but to get a sense of the level oftraffic that is currently on sections 2 and 3 of ADC.

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12. The traffic at 2 peak periods covering the morning and evening peaks (2-hour periods)were measured with the following results:

AM Peak period (0600-0800) = 1610 veh/2hrsPM Peak period (1500-1700) = 1386 veh/2hrs

13. From these counts, the two-way peak hour traffic and ADT in 2013 were estimated as1047 veh/hr and 16,400 veh/day respectively. These counts were conducted "manually" on apartially opened road (section 2), representing approximately 75-80% of the eventual traffic thatwas originally forecasted for section 2. This means that the 2014 forecast will likely be met andeven exceeded once the corridor has been fully open to traffic.

14. The breakdown of 2014 traffic forecast daily traffic has been conducted using observed2007 vehicle composition during three peak periods along the existing North-South corridor. Theresultant 2014 daily traffic split is given below.

Table 3.4 Breakdown of the Dail Traffic (2014 forecast)ADC Section Name Cars Trucks Buses Small Pick-ups/

Buses VansAirport Rd.-Sahab Rd. 10,839 1,577 197 788 6,307Sahab Rd.-Madouna Rd. 16,240 2,362 295 1,181 9,449Madouna Rd.-Zarga Highway 12,070 1,756 219 878 7,022Zarqa Through Route-1s t . section 7,837 1,140 142 570 4,559Zarqa Through Route-final section 8,174 1,189 149 594 4,756Zarga Eastern Bypass 3,416 497 62 248 1,988

15. Vehicle Operating Costs have been derived for each of the vehicle types expected. Thesecosts are composed of the following items: Fuel, Oil, Tires, Capital cost, Maintenance, and Time(of commercial vehicle drivers and assistants). The actual investment cost for the projectcomponents are presented in Table 3.5.

16. The economic analysis has been re-evaluated using the actual project costs and benefits.The traffic projections used in the 2008 analysis have been kept the same with the exception of theyears 2011, 2012 and 2013 where actual traffic volumes have been used.

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Table 3.5 Actual Project C sts by Co ponents (JD million)Year Component Cost (in Cost Paid

2007 prices) (including fullprice increases

"6escalation"

A B C D-G

2004 0.00 0.00 0.00 4.40 4.40 4.40

2005 0.00 0.00 0.05 6.90 6.95 6.95

2006 6.20 1.42 0.32 2.71 10.65 10.65

2007 17.94 0.70 0.46 8.57 27.67 27.67

2008 26.325 0.00 0.73 7.19 34.25 38.62

2009 23.75 0.00 0.63 26.3 50.68 57.11

2010 42.07 0.00 1.16 3.70 46.94 49.09

2011 17.69 0.00 0.51 12.8 31.00 39.58

2012 17.67 0.00 0.60 2.75 21.02 25.16

2013 15.00 0.00 0.72 0.00 15.72 16.02

2014 15.00 0.00 0.00 0.00 15.00 15.00

Total 181.65 2.12 5.18 75.32 264.28 290.25

17. Based on the input data outlined in the preceding section (the actual investment cost andthe traffic volumes output from the original traffic model), the Economic Internal Rate of Return(EIRR) and the Economic Net Present Value (ENPV) have been calculated. The results aresummarized in table 3.6 below.

18. It should be noted that a shadow conversion factor (0.93) has been applied to thefinancial construction costs (table 3.5) to give the economic construction costs used in table 3.6.The results of the economic analysis indicate that the viability of the ADC project is still positive,with an EIRR of 12.710%, despite the increase in investment costs since the original evaluation andthe delay in completion.

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Table 3.6 Economic Evaluation Results (JD million, in 2007 Prices)Year Invest Maint. Benefits Undis B-C Disc B-C2004 4.40 -4.40 -4.40

2005 6.95 -6.95 -6.212006 10.12 -10.12 -8.072007 26.37 -26.37 -18.772008 32.40 -32.40 -20.592009 49.02 -49.02 -27.822010 43.99 -43.99 -22.292011 29.76 0.00 0.00 -29.76 -13.462012 19.78 0.00 6.12 -13.66 -5.522013 14.67 1.82 7.68 -8.81 -3.182014 13.95 3.63 23.80 6.22 2.002015 3.63 28.05 24.42 7.022016 3.63 33.05 29.42 7.552017 3.63 38.95 35.32 8.092018 3.63 45.89 42.26 8.652019 3.63 54.08 50.45 9.222020 18.17 61.78 43.61 7.112021 3.63 70.57 66.94 9.752022 3.63 80.62 76.99 10.012023 3.63 92.10 88.47 10.272024 3.63 105.21 101.58 10.532025 3.63 118.16 114.53 10.602026 3.63 132.71 129.08 10.672027 3.63 149.05 145.42 10.732028 -151.91 18.17 167.4 301.14 19.84

Total 99.50 85.35 1215.22 1030.37 11.75

EIRR: 12.71%ENPV (JDm): 11.76

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(1) Task Team membersResponsibility/Names Title Unit specilty

SpecialtyLending

Supervision/ICRAbdelmoula Ghzala Lead Infrastructure Specialist MNSTR Supervision TTLSaid Dahdah Transport Specialist MNSTR ICR TTLNazaneen Ismail Ali Senior Procurement Specialist MNAPCFatiha Amar Program Assistant MNSSDRobert Bou Jaoude Program Coordinator SACPKIbrahim Khalil Dajani Senior Operations Officer MNSTRDiana C. El Masri Consultant MNAFMMohammed D. E. Feghoul Consultant MNSTRSepehr Fotovat Ahmadi Senior Procurement Specialist MNAPCRima Abdul-Amir Koteiche Sr Financial Management Specialist MNAFMJerome Leyvigne ET Consultant MNSSDJad Raji Mazahreh Sr. Financial Management Specialist MNAFMAhmed Merzouk Senior Procurement Specialist SARPS

Francois Noisette Senior Urban Management____________IMNCO2___Specialist

Knut Opsal Sr. Social Scientist EASERJames A. Reichert Senior Infrastructure Specialist EASNSKingsley 0. Robotham Consultant MNSSDImad Saleh Operations Adviser LCSDETerje Wolden Consultant MNSTR

Christopher Willoughby Consultant MNSTR

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(2) Staff Time and CostStaff Time and Cost (Bank Budget Only)

Stage of Project Cycle USD Thousands (includingtravel and consultant costs)

LendingFY04 121.99FY05 0.00FY06 0.00FY07 0.00FY08 2.76FY09 51.04

Total: 175.79

Supervision/ICRFY04 0.00FY05 116.48FY06 63.71FY07 109.50FY08 99.62FY09 75.24

FY10 77.01FY11 95.28FY12 110.71

FY13 126.00Total: 873.55

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Annex 5. Environmental and Social Impact and Mitigation

1. The scale and significance of the Amman Development Corridor project in Jordan'sdevelopment efforts, as well as the expectation that it would be followed gradually by furtherprojects to extend the Ring Road, led the Jordanian authorities to give particular attention to waysof minimizing adverse side effects. Among the many measures adopted, relatively unusual andinnovative steps were taken to monitor and follow up on the possible emergence of such negativeeffects and bring additional remedial actions into play. This annex focuses on these aspects.

2. Social and environmental safeguard arrangements for the project benefited from the largeamount of work carried out in earlier years on the possible Ring Road more generally. With theassistance of a qualified international consulting firm, MoPWH had prepared already in 1999 a fullEnvironmental Assessment, a Resettlement Action Plan, and a Cultural Resources ImpactAssessment. It had also mounted a proactive Information, Participation and Consultation Program.The work was carried out by an interdisciplinary team of national, regional and internationalspecialists, which was mobilized again in 2003 to update the work and contribute to formulation ofsubstantial key documents - Environmental Management Plan (EMP), its associated CulturalResources Management Plan (CRMP), and Land Acquisition and Resettlement Plan (LARP) -which all had to be completed before the project could go ahead with World Bank and otherinternational financing.

Contractors' Environmental Performance

3. The Environmental Assessment had found that the greatest potential environmentalimpacts would occur during the construction phase: disruptions in communications and utilities,drainage problems, imbalance of Cut and Fill, noise and air pollution, deficiencies in borrow pitsand sites used for disposal of surplus materials, side-effects and residues from construction camps.As much as possible had been done in the course of detailed design to reduce environmental risksby adjustments in alignment, provision for underpasses and culverts, additional fencing andsuchlike. The key next step was therefore to try to ensure full recognition and observance ofenvironmental standards by the contractors and their subordinates and employees.

4. The monitoring system developed had two main components. Contractors who woncontracts had been required to sign a statement committing themselves to comply with the contentsof the project's Construction Environmental Management Guidelines (CEMG). The CEMG alsorequired that contract sites be visited by the PMT on a regular basis during construction. Theprimary mechanism for ensuring compliance was therefore systematic application, in the course ofsuch visits, of the checklists included in CEMG and of the negative points specified there for eachweakness that might be found - 15, for example, for serious infringements, down to more nominalfor minor deficiencies. The other, supplementary source of monitoring information was the outputfrom systematic monitoring of air-quality and other ambient effects at key points distributedthroughout the construction area, 23 to establish relevant baselines and 13 for regular monthlyfollow-up.

5. PMT site inspections used the CEMG assessment packages corresponding to the stage ofwork reached and hence the type of main activities underway. The supervising ConsultantEngineers for each contract were also responsible for carrying out site inspections using theCEMG checklists. Performance points given by the PMT and Supervising Consultants were thenused to measure contractor compliance. The incentive to compliance took the form of a standardstructure of responses to the aggregate score prevailing for each contractor at any moment: formalrequests for corrective action for Negative Performance Point (NPP) scores of less than 30,

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warning of issuance of an order to stop work for any score above 30, and, at 60 points, the right forthe owner to issue a 'Stop Work' order until remediation or corrective measures were taken.Following the site visits, the scores could be corrected, but only after the contractor had satisfiedPMT that the issue/s had been dealt with in a timely and environmentally acceptable manner.

6. After a few rounds applying this procedure failed to generate the kinds of improvementefforts by the contractors that had been hoped for, MoPWH's consultants recommended adoptionof a more incentivized system which did indeed prove more effective. The performance ratingsystem described above was directly linked with a system of financial penalties, withholding onepercent of the monthly payment due to a contractor in the first month inspection awarded him 60negative points, rising by an additional 1% each month that the score for these matters remainedabove 60. Amounts withheld could mount rapidly if new sets of problems were identified andbegan earning withholdings while the monthly retentions were still growing for failure to remedythe problems identified earlier. All the contractors on the project had periods when they exceeded60 NPPs but they managed to remedy them quickly enough that withholdings did not become toogreat.

7. More importantly, the system did help to bring about improvements on many issues ofcontractor performance, especially in connection with such issues as siting and management ofborrow pits and refuse areas, dumping of oil, temporary traffic signaling and maintenance ofconstruction camps. Some of the contractors adopted similar approaches for the management oftheir sub-contractors. The system was considered to have proved its worth in securing an overallimprovement in the quality of work delivered.

Land Acquisition and Resettlement

8. A socio-economic survey and census of Project-Affected Persons (PAPs) had already beencarried out, also in 1999, as part of the Environmental Impact Assessment. An update of theownership status of lands required for the ADC part of the Ring Road was carried out in August2002, and an updated land acquisition analysis was issued in November 2003. A draft LandAcquisition and Resettlement Plan (LARP) for the project was submitted to the World Bank anddisclosed for public inspection in February 2004. It indicated that the road project would impactabout 500 plots, with about 1,900 identified owners, the very large majority being private parties.An important adjustment to standard Jordanian practice up until that time was provision for post-compensation monitoring of PAPs, as required under World Bank guidelines. And a crucialelement in the smooth implementation of the large-scale expropriation required foraccomplishment of the project was the close cooperation that had begun already in 2003 betweenthe two bodies mainly responsible: MoPWH (PMT and the Community Liaison Officers) and theDepartment of Lands and Survey (DLS).

9. Special attention in the planning and management of the land acquisition was given togroups considered more vulnerable, and especially to women who accounted for about one third ofthe owners identified, so that particular efforts were needed to ensure that they were properlyinformed, enabled to make their own decisions, and would actually receive the compensation andany other assistance offered. A particularly important measure was recruitment into CLO, the unitresponsible for direct contacts with PAPs throughout project implementation, of high-qualityfemale staff. Another much smaller group of PAPs that was also considered potentially vulnerableand in need of special attention was the users of customary rights, with livelihood almost totallydependent on the rangelands through which most of the project runs.

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10. Three forms of monitoring were envisaged at the stage of project design and applied:internal, independent and external. Internal monitoring was to be carried out principally by theCommunity Liaison Officers, MoPWH staff members. Independent monitoring of compensationprocesses and negotiations was to be carried out by an independent, neutral individual of highstanding, appointed by the Ministry and reporting to it and to the funding agencies. Externalmonitoring would be by staff of the World Bank and other funding agencies as part of theirsupervision missions and other reviews.

11. The independent monitor review - another innovation relative to past practice in Jordan -took place at the turn of the year 2006/07, before the mid-term review of the project as a whole butlater than had been intended due to difficulties encountered in locating and recruiting anappropriate expert. . On the basis of wide discussions in the Ministry and many interviews, bytelephone and on the ground, the monitor concluded that the land acquisition effort had setambitious goals and worked up "an exemplary approach to be pursued in similar future projects."The expert monitor also identified several areas for further improvement, perhaps mostimportantly greater follow-up with PAPs after their lands have been given up, and better recordingof the substance of contacts between them and concerned officials over time.

12. Responding to these suggestions, the CLO/PMT carried out a series of interviews with asample of PAPs, especially women and those physically resettled. The individual interviewreports record widespread concern particularly about the slow payment of compensation - witheight months seeming to be found often acceptable, but not periods well in excess of one year asseem to have arisen not too often but nonetheless more frequently than expected. An importantproblem was that the period of compensation payment and resettlement (2004-08) happened to beone dominated by major increases in the cost of building materials and prices of land, especially inthe early years due to combined effects of multiple pressures including oil price rises and reductionof earlier subsidies, and influx of people fleeing the fighting in Iraq.

13. But there were also interviews which revealed concrete instances of flexible response bythe Ministry to cases that risked severely negative social impact. Major effort was made tomaintain an open door and help ease hardships that arose. Initiatives taken ranged from smallactions such as systematic watering to reduce the dust that had been damaging olive harvests toconstruction, as in several cases, of additional animal underpasses to re-unite herders' grazinglands and even small modifications of road alignment to eliminate the need to take small pieces ofproperties. Measures were taken in several cases to accelerate financial compensation to PAPswho had run into exceptional difficulties.

14. The conclusion drawn from the first application of independent monitoring to landacquisition programs in Jordan was positive, with special emphasis on early timing, preferablywell before the half-way point in a major program of land acquisition activities, so that freshlessons, based on living reality, could be identified at moments when improvements could stillhave rapid impact. Other concepts which had been talked about in Jordan, such as that of a full-time independent monitor staying with a program throughout its life or an independent review atcompletion, were considered to have much more limited constructive potential. Specialist Bankstaff gave strong and focused support on both environmental and land acquisition issues, by meansof brief visits throughout the period from preparation to completion of the ADC project and thesubstantive advice and comment provided. The Bank's land acquisition/resettlement expert for theMENA region himself made more more than a dozen visits during project implementation.

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Annex 6. Summary of Borrower's ICRR and Borrower's Comments on the DraftICRR

Achievement of Project Development Objectives

1. The main objective to support the transport system and remove the bottleneck from theexisting road network has been achieved through the implementation and construction of ARR- 1 thatwill provide alternative route to bypass the congested areas within the city of Amman. In this respect,Sections 2 and 3 of ARR-1 are now complete and fully open to traffic, while Section 1 is still underconstruction with anticipated completion in Mid. 2014. Currently, the through traffic on the opensections of the new road traverses from the two northern ends of Section 3 to Madounah Interchange(within 1 Km from the start of Section 2) where the traffic has being diverted to existing local roads toreach respective destinations. Once Section 1 is complete, the traffic will continue the journey alongthat section of the road all the way to the Airport Road.

2. The objective for accessibility to affordable land for investment and urban development wasthe focus of the Project through the undertaking of a Master Plan for the development of 300 sq.km,which is the area bounded by the new Ring Road-I and Hizam Road. This study provides the strategicframework that will guide the respective Municipalities, including GAM, for any future developmentin that area.

3. Concentric effort for the establishment of a modem inland port and relocating the CustomsDepot to the Madounah site has been carried out at the start of the Project, based on therecommendations of previous detailed assessment and feasibility studies. This included detailedadvisory services that were provided by a specialized international consultant to validate theinstitutional arrangements and establish the framework with detailed requirements for such task.However, the relocation of the Customs Depot to its new location at Madounah and the new inlandport could not be implemented by the time of the preparation of this ICR due to problems associatedwith the availability of the site at Madounah. Continuous efforts are still ongoing to search for newsuitable location.

4. The support for on-going reforms to restructure the trucking industry was part of anotherGovernment assignment being carried out under a different project. Henceforth, it was decided early inthe Project not to duplicate the effort and to drop this sub component from the Project.Feasibility study and final design for the two remaining stretches of Amman Ring Road along thewestern and northern perimeters of Amman (ARR-phases 2 & 3) were carried out and completed, withthe total length of the ring road being 120km (40 Km for Phase 1 "under construction" and 80 Km forPhases 2 and 3).

Key Performance Indicators

5. The Project development objective of diverting the traffic from the locally congested areas ofAmman to the Ring Road was largely achieved, even though Section 1 of the ADC is still notcomplete and only Sections 2 and 3 are currently complete and open to traffic. This is illustrated in thefollowing indicators:

- The actual measured travel time from Zarqa to the Airport along the open sections of the ADC up toMadounah Interchange and then using the local roads is 48 minutes. This represent a 12 minutessaving on the original baseline of 60 minutes and only 8 minutes longer than the target of 40 minutes,which is expected to be easily achieved once the full ADC is open to traffic.

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- Traffic count that was carried out in April 2013 on the completed section of the ADC gave arepresentative value of the current traffic along that stretch of the road of 1047 V/h (AM peak). Thisindicates a level of diversion of approx.8% from urban streets has been achieved to date in comparisonwith the eventual projected target of 10% that will be easily achieved once the full length of the ADCis open to traffic.

6. Additionally, the following indicators are also relevant to the Project Objectives:- The current value for the cost to transport one TEU from (Qualified Industrial Zone at Zarqa (QIZ) toAqaba Port is 425 US Dollar.- Saving on the cost of transporting a container along roads improved through the Project is expectedto be 5.83JD/trip for heavy trucks and 5.3 JD/trip for articulated trucks; based on estimated 20mintravel saving.- The current available statistical data shows that the total tonnage of cargo being handled by existingAmman Customs Depot (export and import) has increased from 2.07 M tons in 2004 to 2.99 M Tonsin 2012; marking an increase of approx.45%.

Institutional Management and Development

Environmental Safeguard

7. Environmental considerations were an integral part of the design and construction of ARR-1,highlighted with the preparation and provision of Construction Environment Management Guidelines(CEMG) that provided the framework for ensuring and monitoring the fulfillment of the CEMG.

8. Environmental Quality Monitoring (EQM) program was developed and baseline surveys werecarried out at 23 selected sites. Regular air and noise quality measurements were taken periodically tomonitor their respective quality against the baseline measurements and mitigate any impact. No majorabnormalities were recorded, and any minor problems were mitigated immediately. Post constructionquality measurements shall be carried out by trained Ministry's staff based on detailed program as setout in the guidelines.

Social Safeguards

9. Land Acquisition and Resettlement Plan was performed in full compliance with the Bank'soperational procedure for this task. The Work on this task was initiated at early stages in the Project toensure smooth operation and monitoring with adequate mitigations to any social impact. The task wasperformed under the supervision of qualified and dedicated personnel based on pre-defined guidelines.Vulnerable groups of land and property owners were particularly targeted with special attention andtheir social status was carefully monitored throughout to ensure minimum impacts.

10. This land acquisition process is considered the largest in scale in the history of infrastructureprojects in Jordan, requiring very elaborate methodology and approach to ensure compensationfairness, successful implementation and social justice. The elimination of the 250% land acquisition rulefrom this Project with 100% compensation paid to the land / property owners was the highlight of theprocess. This was implemented for the first time in Jordan, to minimize the impact on the owners,although, at higher cost and burden to the Government.

11. Every single case was individually analyzed and relevant details entered into interactivedatabase. The following steps were implemented:

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Monitoring the historic sequence of the operation from notification of land acquisitionrequirement to the final stages of compensation,

Conducting interviews with affected persons, assessing their social impacts, and identification ofmitigation measures,

Post compensation and relocation impacts assessmentFollow up and determination of lessons learned from each case

Institutional Arrangement

12. Various parties and ministerial bodies have been involved in the Project implementation, withthe Ministry of Public Works and Housing (MPWH) having the overall responsibility forimplementation and coordination. The MPWH has been assisted by a dedicated Project ManagementTeam (PMT) who was given the task of monitoring the Project execution to ensure full compliancewith all technical, financial, contractual and managerial related matters.

Financial Management

13. In close coordination with the MPWH Finance Department and the Ministry of Planning andInternational Cooperation (MoPIC) the PMT undertook the task of financial management through-outthe Project implementation that included processing financial statements issued by the variouscontractors and consultants and reporting through the quarterly financial reports on the Projectfinancial status. All financial monitoring reports were satisfactory and in compliance with the Banksguideline.

14. Three financiers have been involved in financing this Project. The World Bank financed theconstruction and supervision of ARR-1 Section 2, the management services of the Project as well asthe preparatory construction works at the original site of new inland port and customs at Madounah.

15. The European Investment Bank (EIB) financed the construction and supervision of ARR-1Section 3 as well as the studies related to ARR- Phases 2 and 3, and the ADC master plan.The Arab Fund for Economic and Social Development (AFESD) financed the construction andsupervision of ARR-I Section 1. Iv.

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Procurement Management

16. Procurement management was performed in full compliance with each financier guidelinesand standards with respect to their related financed contracts. The World Bank procurementprocedures, as set out in the Loan Agreement, were adopted for the Bank's financed Works andServices.

Significant Changes and Key Factors Affecting Implementation

17. No major changes to the objectives, general design, scope and implementation modalities ofthe project were undertaken. However, to preserve the developing need of the local expandingcommunities certain modifications/upgrading were necessary on Amman Ring Road -Phase 1. Theseincluded a number of new underpasses and side road connections to facilitate better trafficmaneuverability and provide accessibility to newly developed areas. Furthermore, certain qualityenhancement measures were introduced to improve quality and sustain durability of the road. Theseincluded:

Economic Evaluation

18. The ADC will replace and/or alleviate the existing link between the south and the north east ofAmman. This existing route (Airport Road to Zarqa via Hizam Road) follows an urban area that isbecoming heavily congested as it handles substantial volumes of freight traffic.

19. The initial "2003-2004" economic evaluation of the Project resulted in a value for theEconomic Internal Rate of Return (EIRR) of 17.5% and for the Economic Net Present Value (ENPV)of 86.3 JD million; both based on the financial plan and investment cost as estimated at that time.With the current update of construction costs and vehicle operating costs and using traffic volumestaken from the existing traffic model, an update of the economic evaluation has been undertaken;taking into consideration the current status of completion, whereby, Sections 2 and 3 were fully opento traffic in February 2012, while Section 1 is still under construction with anticipated completion inmid-2014.

20. The revised Economic Internal Rate of Return (EIRR) is 13.07% and the Economic NetPresent Value (ENPV) is 17.47 JD million; concluding with the continuing positive viability of theProject even though the investment costs have increased since the original study.

Overall Rating and Assessment of Bank and Borrower Performance

21. The implementation and execution of the Loan was the result of combination of effort of allstakeholders, including the Mission Project Managers at the Bank, the Ministry of Public Works andHousing and the Ministry of Planning and international Cooperation. The World Bank team (allMission /Task Project Managers) have been very cooperative and responsive throughout the Projectimplementation v.

22. The Bank has also been very responsive when submitting the application for additionalfinance, and extending the loan closing date.

23. On the execution of the Loan, the evaluation of the implementing agency's performance issatisfactory in all aspects, namely:- Application of procurement procedure- Application of financial procedure

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- Execution of Project objectives- Responding to the Bank's queries and data requirements- Reporting

Lessons Learned from the Project

24. The implementation of this Project has provided the following main lessons to be learned:

V Coordination between all stakeholders.A team-work is an absolute necessity for the success of any project. In this Project theteam spirit that prevailed throughout its implementation has provided the framework andthe path for its eventual success.

V Institutional arrangement, management control and monitoring.The introduction of a dedicated project management team that managed and monitoredthe Project throughout, was a successful development in the project management,particularly in controlling the implementation of various project components,monitoring financial transaction and budgeting, reaching resolutions on claims incompliance with conditions of contract, and standardization of activities between allsections.

/ Quality control and enhancement in the construction.The introduction of a number of quality enhancement measures in the implementationof ARR- 1 were highly beneficial for the durability and quality of the construction, andtheir use on this Project was the focus of continuous utilization of all projects to come.

Project Safeguards

V The Environment Construction Management guidelines have been very useful tool tomonitor contractors' compliance and ensure full adherence; particularly with theimplementation of the penalty clauses that gave the contractors the incentive toimprove their performance so as to minimize the negative points that could trigger thepenalty.

V Environment quality monitoring was useful in controlling air quality and noiseemission. This to be continued after the construction completion to reflect the actualimpact of the road on the various parameters included in the EQM

V The introduction of Land Acquisition Resettlement Plan at the initial stages in theProject was a paramount factor that added to the smooth operation of itsimplementation. Social impact mitigation measures were applied in a constructive andsystematic way with visible benefits. However, certain additional measures could beconsidered for future projects to enhance and optimize this process. These include theprompt payment as early as possible, particularly to vulnerable and economicallydisadvantaged groups to reduce any adverse impact, and starting personalcommunication and interviews with affected parsons as early as possible to ensuresmooth operation and minimum social impact with continuous follow up.

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Capacity building

V The involvement of the Ministry's staff in the Project as PMT members and workingclosely with the PMT Consultant was very useful in ensuring efficient technologytransfer. This should be put to full use during the implementation of all future projects;with particular emphasis on quality enhancement, the application of environmentquality and construction guidelines, and the efficient management of land acquisitionand resettlement plans.

Sustainability

V The successful implementation of the Project has to be sustained through theformulation and introduction of an elaborate follow up policy to preserve the integrityof what has been constructed and to make useful application of what has beenproduced and studied. For the ARR-1, the constructed facility has to be maintainedthroughout its projected life span, supported with adequate maintenance contracts andprogramming.

V The various produced reports and studies related to the ADC Master Planning,relocation of Customs Depot and establishment of Inland Port are to be used asstrategic and well documented studies for the implementation of any future planningin the area.

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MPWH's Comments on Bank's Draft Implementation Completion Report

2.2 Implementation

pp. 8, Item 14.: correct "section 3.." in the 1st sentence to read "section 1..."pp.8, Item 15 : correct "since 2001...." in the last sentence to read "since 2010...."

3.2 Achievement of Project Development Objectives

pp.14, Item 37: correct the sentence " ... but the funds needed to fulfill outstanding commitments tothe contractor and to enable him to complete the project have not yet been finally committed" to read:"but the funds needed to fulfill outstanding commitments to the contractor of Section Ito enable .... "ppl5, Item 40: Comment: the last sentence of this item concludes that the Second PDO (to provideaccess to affordable land for productive investment and urban development purposes) was notachieved to date and the prospects of achieving it remains unclear. In this respect, the Borrowerhighlights that the prospect of achieving this objective is still high even-though it could not bematerialized yet due the recent opening to traffic of only two sections of the road and section 1 is stillunder construction; noting that certain period of time is needed, after construction completion andopening the full length of the road to traffic, for the development market to get acquainted with thenew norm and patterns in the area which is a major factor in attracting any new investment anddevelopment. The newly completed master plan study for the ADC area was intended as a strategicplan for the respective authorities to implement in due course and in line with their prioritized program.Such implementation and business attraction requires time but the prospect, in our opinion, isoptimistic with due consideration to the traffic already being diverted on the opened sections of theroad which will eventually attract business development.

3.3 Efficiency

pp.15, Item 41: comment: it is stated under this item that "the updated EIRR is marginally above 12%,and this is disappointing compared with the initial estimate of 17%". In this respect, the Borrower,highlights that the attributing factor to this lower EIRR is the cost of price escalation that was dulypaid to the contractors in full compliance with the conditions of each contract, notwithstanding as wellthe additional cost that resulted from introducing and applying the quality enhancement measures andadditional quantities, as coordinated, assessed and introduced to the Project jointly with the WorldBank during the various World Bank Missions, aiming at the construction of a facility to the higheststandard serving best the need of local inhabitants. This added technical and social benefits shouldoffset any negative impact due to increase in cost or decrease in the economic returns.

3.4 Justification of Overall Outcome Rating

pp.15, Item 43: comment: the statement in the 2 nd line that "objective 2 was not achieved and isunlikely to be achieved in the near future", is somewhat premature, as commented on above underItem 40.

MOPIC's Comments on Draft Bank's Implementation Completion and Results Report

pp.5, Item 1: correct the sentence "the Amman Metropolitan Area (AMA), which accounted alreadyin 2000 for more than 50% of the country's population and employment, and 80% of its industrialsector". to read " the Amman Metropolitan Area (AMA) and Zarqa Metropolitan Area , which

37

accounted already in 2000 for more than 50% of the country's population and employment, and 80%of its industrial sector".

pp.27, Item 12: correct the sentence "is the repeated stealing by heavily armed robbers of largelengths of the copper cable ... " to read "is the repeated stealing by robbers of large lengths of thecopper cable ... "pp.16, Item 47: the statement "this would still need a final approval from the UAE".comment: MOPIC received the approval from the UAE in May 14, 2013

GAM's Comments on Draft Bank's Implementation Completion Report

Section 3.2. Suggested clarification/addition regarding land development/zoning:

Given the current budget structure, progress on land development is largely dependent on apatite ofinvestors as GAM does not have the resources to develop the needed infrastructure for a vast areawithout an indication of the level of demand. Based on the requests for rezoning at present, this northeast area stands to be developed in the short to medium term.

Additionally, the current arrangement whereby utility providers follow a more passive rather thanactive approach towards construction of utilities in newly developed areas, means GAM alone cannotbuild new road structures while risking these same roads be compromised later for utility work. This ofcourse is an over-arching issue that affects the quality of roads under GAM's jurisdiction in Amman.This supports the report's conclusions about the need to establish a coalition of not only of authoritiesbut also utility providers and land developers.Also related to this issue is the fact that the relocation of the Customs Depot and the planneddevelopment of the Madhouneh area played a key role in developing complementary land use plans forthe area by GAM.

Finally, it is important to note that the MPWH had indeed involved GAM in the master planning studydone for the corridor. This provided a valuable link between the Amman master plan and later theTransport and Mobility Master Plan which took into consideration development impacts of the ADCas well as potential internal links from/to the ADC.The same comments apply to #55 in Section 6 - Lessons Learned.

38

Annex 7. Pictures of the Project

ADC Section 2 by Night

Madounah Interchange

39

Annex 8. List of Supporting Documents

CPCS Transcom International Ltd & Interdisciplinary Research Consultants 2011. For Ministry ofTransport, The Hashemite Kingdom of Jordan: Trucking Sector Review: Final Report (2 June 2011CPCS Ref. 09248)

Dar Al-Handasah 2012. Amman Development Corridor: Land Acquisition and Resettlement Plan(LARP) Final Report. J0541-Report No.17-December 2012Leen Fakhoury 2007. Amman Development Corridor Project Land Acquisition and Resettlement Plan,Independent Monitor Specialist Report (Final)

Lotti, C./Engicon 2009. Feasibility Study for Phases 2 and 3 of the Amman Ring Road: Stage - FinalDesign, Draft Report (February 2009) for MoPWH

Royal Haskoning 2004. For Ministry of Public Works and Housing, Hashemite Kingdom of Jordan:Assessment of the Feasibility of the Inland Port and Customs Depot in the Amman DevelopmentCorridor Project: Final Report (December 2004)

Urban Workshop 2011. ADC: Monitoring Developments in the ADC Area - Indicator Report IV(April 2011)

World Bank 2004. Project Appraisal Document on Proposed Loan to Hashemite Kingdom of Jordanfor the Amman Development Corridor Project.

World Bank 2004. Loan Agreement, Amman Development Corridor Project, September 17 2004.

World Bank. Supervision Missions' Aide-Memoires, Amman Development Corridor Project 2004-2012.

World Bank 2008. Project Paper on Proposed Additional Loan to Hashemite Kingdom of Jordan forthe Amman Development Corridor Project.

World Bank 2011. Restructuring Paper on a Proposed Restructuring of Amman DevelopmentCorridor Project Loan.

WSP/CC 2009. Amman Development Corridor Strategic Master Plan Study: Final Scenario Report,for Ministry of Public Works and Housing, Jordan (EIB).

40

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