Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the Project
Name of the country: Kingdom of Cambodia
Name of the Project: National Road No. 5 Improvement Project (Battambang-SriSophorn Section) (II)Loan Agreement: March 30, 2017
Loan amount: 11,136 million yen
Borrower: The Royal Government of Cambodia
2. Background and Necessity of the Project(1) Present State of Development and Problems of the Road Sector in Cambodia
Cambodia is located between Thailand and Vietnam. The territory is also
located in the heart of the Southern Economic Corridor, where initiatives tostrengthen connectivity are being promoted under the Master Plan on ASEAN
Connectivity approved at the 2010 ASEAN top-level meeting. Because of its
location, Cambodia is expected to become a regional distribution hub. The
Kingdom is making a progress in rehabilitating its transportation infrastructuresince the civil wars ended in 1991 with help of the international community,including the World Bank and the Asian Development Bank. Rehabilitation andconstruction on the core part of its road and bridge infrastructure has almost been
completed for the first time during the post-war period. However, some furtherrehabilitation is still needed due to aged parts and makeshift repairs after the civil
war and the narrowness of the roads in order to cope with the increase indomestic and international logistics in line with expected future economic growthin the country.
In particular, Cambodia’s arterial national road No. 5 is a part of Asian Highway
Route No. 1 and the Southern Economic Corridor, so it is expected to function asa main industrial artery of the Mekong region. The section subject to the National
Road No. 5 Improvement Project (Battambang-Sri Sophorn Section) ("ThisProject") was temporarily rehabilitated. However, the road quality remained poor
with deteriorated pavements and insufficient road width. Even worse, traffic
volume is continuously increasing. To keep pace with ever-increasing domestic
and international cargo volume as a result of economic development in theKingdom and the ASEAN Economic Community, improving transportation
capacity and efficiency of the national road No. 5 – one of the main roads inCambodia, which is part of the Southern Economic Corridor — has become apressing issue.
(2) Development Policies for the Road Sector in Cambodia and the Priority of theProjectThe government of Cambodia has defined rehabilitation and construction ofinfrastructure as one of the four pillars of its 2014-2018 National Strategic
Development Plan (NSDP). In this context, the Cambodian government defined
improvement of traffic networks and the building of intermodal freight transport
networks as priority areas. The improvement of national road No. 5 is defined as
the most important part under the National Road Network Master Plan (M/P)
formulated in 2006 with the help of JICA. Since the project is considered
contributory to national and regional integration as part of the Southern Economic
Corridor, this Project aims to improve a part of it.
(3) Japan and JICA’s Aid Policy/Actual Performance for Road Sector
Japan has defined economic infrastructure development as one of its priority
areas under the Country Assistance Policy for the Kingdom of Cambodia. Japan
also announced their prioritized projects, such as road network development in
the Southern Economic Corridor. Also, an analysis under Country Analytical Workfor the Kingdom of Cambodia revealed that infrastructure development toenhance transportation capacity in Thailand and Vietnam was the priority issue.
The Project is in line with these analyses and policies. As a grant aid program,
JICA implemented a development study titled the Cambodia Nationwide Road
Network Investigation (2006) to formulate the M/P as stated above. Also, JICA
implemented the following projects to strengthen maintenance capacity andinfrastructure development: the National Road No.1 (I) to (IV and urban area)(2005-2017); the Project for Construction of Neak Loeung Bridge (2010-2015); theStrengthening of Construction Quality Control (2009-2012); Project on Capacity
Enhancement of Environmental and Social Considerations for Resettlement(2010-2012); and the Project for Strengthening Capacity for Maintenance ofRoads and Bridges (2015-2018). Based on the M/P described above, JICA iscurrently supporting Cambodia to rehabilitate National Road No. 5 by establishinga yen loan agreement to implement the following: May 2013: National Road No.
5 Improvement Project (Battambang-Sri Sophorn Section); July 2014: National
Road No.5 Improvement Project (Prek Kdam-Thlea Ma’am Section) (I), March
2015: National Road No.5 Improvement Project (Thlea Ma’am-Battambang, andSri Sophorn-Poipoet Sections) (I), and March 2016: National Road No. 5Improvement Project (Prek Kdam-Thlea Ma’am Section) (II).
(4) Other Donor Activities
So far, the Asian Development Bank and World Bank have implemented manyaid programs. Recently, more and more aid programs targeting the road sector
are being offered from China. Major assistances provided to Cambodia are listed
below: ADB: “Road Asset Management Project” (2008-2013), “Northwestern RuralDevelopment Project” (2011-2013)
 WB: “Provincial and Rural Infrastructure Project” (2004-2010), “Road AssetManagement Project” (2008-2013)
China: “Prek Kdam Bridge Construction Project” (2007-2010), “National Road
No. 8 Construction Project” (2007-2012), “Project for Rehabilitation of theSecond Chroy Changwar Bridge” (2011-2014), “National Road No. 5
Improvement Project” (2013-2017)(5) Necessity of the Project
The aims of the project satisfy the development themes and development
policies of the Cambodian government. The M/P defines roads targeted by thisproject as the most critical section for making a contribution to the country’s
economic growth. This project is also in line with Japan’s assistance programs,
while making contributions to strengthening connectivity in the Mekong region
through infrastructure development addressed by Japan, and benefits SDGs Goal
9. Consequently, providing supports for implementing this project is highly
necessary.
3. Project Description(1) Project Objectives
This project rehabilitates and expands width of the existing National Road No. 5(Battambang-Sri Sophorn Section) and constructs a bypass to reroute the roadaround the Battambang and Sri Sophorn city areas. National Road No. 5 connects
the state capital Phnom Penh and the border with Thailand, while it is a part of theSouthern Economic Corridor. The project aims to enhance transportation capacity
and improve traffic efficiency in the target area, and thereby contributes tofacilitating economic growth in Cambodia.
(2) Project Site/Target Area
Battambang and Banteay Meanchey Provinces(3) Project Components
1) Rehabilitation of the existing main roads (about 51.48km in total): Double
bituminous surface treatment or asphalt concrete (AC). Rehabilitation on
pavement Widening traffic lanes (two lanes to four lanes)
2) Bypass construction (about 33.2km long in total, Battambang bypass (about23.9km) and Sri Sophorn bypass (about 9.3 km), and AC pavement (four lanes)3) Construction of a new bridge, replacing and expanding the width of the bridge(12 locations total)
4) Construction of dividers (3 m wide)5) Consultation services (e.g. detailed designs (D/D), bidding assistance, andsupervision of construction)(4) Estimated Project Cost
Estimated Project Cost (Loan Amount): 25.323 billion yen (Loan Amount: 19.988
billion yen)(5) Schedule
Planned between May 2013 and May 2021 (total of 97 months) Projectcompletion is defined as the commencement of the service of the facilities (May2020).
(6) Project Implementation Structure1) Borrower: The Royal Government of Cambodia
2) Guarantor: N/A
3) Executing Agency: Ministry of Public Works and Transport (MPWT)
4) Operation/maintenance/management system: MPWT
(7) Environmental/Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Considerationi) Category: Aii) Reason for categorization: This project targeted the road sector and areas

vulnerable to the features and impacts defined in the JICA Guidelines forEnvironmental and Social Considerations (Promulgated in April 2010).
iii) Environmental permission and authorization: Preparation of an Environmental
Impact Assessment (EIA) report for this project is not required under domestic
law. However, since the project is categorized as “A”, the report was completedon July, 2012. Meanwhile, JICA carried out an Initial Environmental Impact
Assessment (IEIA), that is simpler than the EIA (preparation is required by
Cambodian law). The EIA was approved by the Ministry of Environment,Cambodia in October 2015. The Ministry of Environment, Cambodia does not
require re-approval of the IEIA due to changes in design through the detailed
design process.
iv) Anti-Pollution measures: During construction, measures will be taken toaddress air quality, noise, vibration, and similar factors. Measures will include
setting a limit on work hours and periodic maintenance on construction
machines. Once the facilities are in use, impact will be minimized by limiting
driving speed as a way to mitigate noise and vibration. During construction,measures will be taken to prevent oil leakage and ensure water quality by
installing cofferdams.
v) Natural environment: The project site is not located in sensitive areas such as
national parks. However, the project site has wild animals including theSoutheast Asian Softshell Turtle (Amyda cartilaginea), which is listed on theInternational Union for Conservation of Nature and Natural Resources (IUCN)Red List of Threatened Species as Category II “Vulnerable”. Adequate
measures and monitoring will therefore be carried out.
vi) Social environment: The project will involve 4,170 households in total, including
901 involuntary resettlements (including setback. 57 households out of the 901
need to be relocated to replacement land, etc.), which will be carried out inaccordance with the nation’s domestic procedures and the resettlement action
program. Around 177 hectares of land will be acquired for the project. The
resettlement plan based on the detailed design results has been revised. The
government of Cambodia has stipulated that compensation for the loss ofproperty should be carried out in the form of reacquisition costs, while loss of
income should be counteracted by recovery assistance. At this time, theCambodian government has prioritized major construction sections for landacquisition and resettlement to ensure the smooth progress of the project.
vii) Other / Monitoring: During the construction period, the MPWT will monitor landacquisition, involuntary resettlement, air quality, waste emission, and theecosystem. After the handover, the MPWT will continue monitoring air quality,
noise, vibration, waste emission, ecosystems, and the like. A third-party
consultant hired by MPWT will also monitor compensation payment status andresident living conditions after resettlement. (JICA will receive a quarterly reportduring construction and a yearly report for two years after handover).
2) Promotion of Poverty Reduction:
The poverty rate in Banteay Meanchey Province, one of the project sites, ishigher than the national average. We can expect that implementing this projectwill contribute to the creation of new jobs for local residents, economic
development, and poverty reduction in the project areas.
3) Promotion of Social Development:i) Gender Perspective
The MPWT defined a gender mainstreaming strategy to create employment
opportunities and make efforts to carry out capacity building for women. TheMPWT is expected to implement this project under a gender mainstreaming
framework. Additional compensation will be offered to vulnerable households
such as those led by widows under the resettlement action plan.
ii) Measures to Prevent Infectious Diseases Including HIV/AIDS
For construction work, a large external labor force other than local residents
is likely to gather in certain places over a long period of time. To mitigate therisk of HIV/AIDS, the MPWT will provide educational activities as a part ofhealth management for the laborers.
(8) Collaboration with Other Donors: N/A4. Targeted Outcomes(1) Quantitative Effects
1) Outcomes (Indicators of operation/effect)
Performance
Indicators

Target roads

Passenger car unitper day(PCU/day)

Main road No. 5
Battambang
bypassSri SophornbypassTime required(minutes)(Battambang-SriSophorn)

8,491

Target value (2022) [2years after completion ofthe project]
22,500-16,700-7,600103(Existing nationalroad No. 5)

86(Bypass and nationalroad No. 5 after
rehabilitation)

Reference value(value in 2011)(2) Qualitative Effects: Facilitating improvement in the investment climate byimproving physical distribution between Thailand and Cambodia,
and bringing benefits to Japan-owned corporations in Cambodia.
Strengthening connectivity and facilitating regional integration.
Enhancing transportation capacity and improving transportation
efficiency by rehabilitating existing national roads. Promoting traffic
safety by constructing dividers.
(3) Internal Rate of Return (IRR)
Based on the conditions below, the Economic Internal Rate of Return (EIRR) of
this project was calculated as 17.4%. Since this project constructs roads that willcollect no fees, the Financial Internal Rate of Return (FIRR) will not be calculated.
Cost: Project cost (excluding tax), operation and maintenance expenses
Benefits: Shortening time required and cost savings for vehicle traffic
Project Life: 30 years
5. External Risk Factors and Risk Control
N/A
6. Evaluation of Similar Projects and Lessons Learned from Past Projects(1) Lessons learned from similar projects
Ex-post evaluations of the Project for Improvement of the National Highway
Route 6 (Siem Reap section) for Cambodia and the Indus Highway Project for
Pakistan demonstrated that the traffic accidents caused by reckless driving andoverloading increased. Therefore, construction of ancillary roads facilities toensure traffic safety and measures to eliminate overloading to ensure safety arenecessary for the project to ensure safety.
(2) Lessons for the Project
Based on the above, the project will construct 3-meter wide dividers as a safetymeasure in the hopes of reducing traffic accidents. To combat overloaded vehicles,the scope of the National Road No. 5 Improvement Project (ThleaMa’am-Battambang and Sri Sophorn-Poipoet sections) includes the construction

of facilities to weigh vehicles throughout the length of National Road No. 5.
Therefore, specific measures for eliminating overloaded vehicles are expected tobe taken for the sections targeted by this project.
7. Plan for Future Evaluation(1) Indicators to be Used:
1) Passenger Car Unit (PCU/day)2) Time required (min.)3) Economic Internal Rate of Return (EIRR) (%)(2) Timing of Next Evaluation:
Two years after completion of the project