Japanese ODA Loan

Ex-Ante Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: Kingdom of Cambodia
Project: National Road No.5 Improvement Project (Prek Kdam-Thlea Ma’am Section)(II)
Loan Agreement: March 31, 2016
Loan Amount: 17,298 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
Due to slow progress in railway network development in Cambodia, roadtransportation plays a central role in domestic transportation. Cambodia is locatedbetween Thailand and Vietnam. The territory is also located in the heart of theSouthern Economic Corridor, where initiatives to strengthen connectivity arebeing promoted under the Master Plan on ASEAN Connectivity approved at the2010 ASEAN top-level meeting. Because of its location, Cambodia is expected tobecome a regional distribution hub. Cambodia is making a progress inrehabilitating its transportation infrastructure since the civil wars ended in 1991
with help of the international community, including Japan, World Bank and AsianDevelopment Bank. Rehabilitation and construction on the core part of its roadand bridge infrastructure has almost been completed for the first time during thepost-war period. However, some further rehabilitation is still needed due to aged
parts and makeshift repairs after the civil war and the narrowness of the roads inorder to cope with the increase in domestic and international logistics in line withexpected future economic growth in 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 as amain industrial artery of the Mekong region. Despite the temporary repairs doneon the project section, road quality is inferior and traffic volume is steadily
increasing. Therefore, enhancing transportation capacity and improving
transportation efficiency have become pressing issues in the race to cope withincreased domestic and international freight given expected future economic
development in Cambodia.
(2) Development Policies for the Road Sector in Cambodia and the Priority of theProject
The 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. Under the National Road Network Master Plan (M/P)
formulated in 2006 with the help of JICA, the improvement of national road No. 5
is defined as a priority project, since the project is considered contributory tonational and regional integration as part of the Southern Economic Corridor.
(3) Japan and JICA’s Aid Policy and Operations in the Road Sector
Japan has defined economic infrastructure development as one of its priority
areas under the Country Assistance Policy for the Kingdom of Cambodia. Japanalso 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. JICA implemented adevelopment study titled the Cambodia Nationwide Road Network Investigation(2006) to formulate the M/P as stated above. Based on the M/P, JICA
implemented the following projects to strengthen maintenance capacity andinfrastructure development: The Project for the Improvement of the National Road
No.1 (I) to (IV) and Urban Section (2005-2017); the Project for Construction ofNeak Loeung Bridge (2010-2015); the Strengthening of Construction QualityControl (2009-2012); Project on Capacity Enhancement of Environmental andSocial Considerations for Resettlement (2010-2012); and the Project forStrengthening Capacity for Maintenance of Roads and Bridges (2015-2018).
Based on the M/P described above, JICA is currently supporting Cambodia torehabilitate National Road No. 5 by establishing a yen loan agreement toimplement the following: May 2013: National Road No. 5 Improvement Project(Battambang-Sisophon); July 2014: National Road No.5 Improvement Project(Prek Kdam-Thlea Ma’am Section) (I), and March 2015: National Road No.5Improvement Project (Thlea Ma’am-Battambang, and Sisophon-Poipoet) (I).
(4) Other Donors’ Activities
So far, the Asian Development Bank and World Bank have implemented many
aid programs. Recently, more and more aid programs targeting the road sector
are being offered from China. Major assistances provided to Cambodia are listed
below:
・ Asian Development Bank:
Project for Enhancing Road Asset Management (2008-2013) and the Projectfor Improvement of Roads in the Northwestern Provinces (2011-2013)
・ World Bank:
Project for Rehabilitating Provincial and Regional Infrastructure (2004-2010)
and Project for Enhancing Road Asset Management (2008-2013)
・ China:
Prek Kdam Bridge Construction Project (2007-2010), National Road No. 8

Construction Project (2007-2012), Project for Rehabilitation of the Second Chroy
Changwar Bridge (2011-2014)(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. Therefore, JICA'ssupport for implementing this project is highly necessary and relevant.
3. Project Description(1) Project Objectives
This project rehabilitates and expands the existing National Road No. 5 (PrekKdam-Thlea Ma’am Section) and constructs a bypass to reroute the road aroundthe Kampong Chhnang and Oudong city areas. National Road No. 5 connects thestate 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
Kandal Province, Kampong Speu Province, Kampong Chhnang Province, andPursat Province(3) Project Components
1) Rehabilitation (from Double Bituminous Surface Treatment pavement to Asphalt
Concrete pavement) of the existing main road (total length of 118.7 km) androad widening (from two lanes to four lanes)2) Construction of a bypass (about 16.7 km long in total, Kampong Chhnang
bypass (about 11.8 km) and Oudong bypass (about 54.9 km), and Asphalt
Concrete pavement (four lanes)
3) Rehabilitation of bridges (30 locations): 13 new construction, 3 replacement
bridges, and widening 14 bridges
4) Construction of median strip (3 m wide)5) Consultation services (e.g. detailed designs (D/D), bidding assistance, andsupervision of construction)(4) Estimated Project Cost (Loan Amount)
Estimated Project Cost (Loan Amount): 34.945 billion yen (Loan Amount: 28.238
billion yen)(5) Schedule
From July 2014 to October 2020 (total of 76 months). Project completion isdefined as the commencement of the service of the facilities (October 2019)(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 and Maintenance System: MPWT
(7) Environmental and Social Considerations/Poverty Reduction/Social Development
1) Environmental and Social Considerationi. Category: A
ii. Category: A. This project targeted the road sector and areas vulnerable tothe features and impacts defined in the JICA Guidelines for Environmentaland Social Considerations (Promulgated in April 2010).
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Environmental Permit: Preparation of an Environmental Impact Assessment(EIA) report for this project has already been approved by the Ministry ofEnvironment on November 26, 2013.
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 beminimized by limiting driving speed as a way to mitigate noise and vibration.
Natural Environment: The project site is not located in sensitive areas suchas national parks, and adverse impact on the natural environment isassumed to be minimal. However, the project site is near the border of theTonlé Sap Biosphere Reserve. During construction, measures will be taken
to minimize tree cutting and implement a five-year monitoring plan on thesurrounding ecosystem after handover.
Social Environment: The project will involve the acquisition of 60.9 hectares
and involuntary resettlement of 1,079 households (including setback.111
households out of the 1,079 need to be relocated to replacement lands, etc.),
which will be carried out in accordance with the nation’s domestic
procedures and the resettlement action program. No particular objection
from the residents that will be affected was heard during the resident
discussion on the project.

Other / Monitoring: During the construction period, MPWT will monitor landacquisition, involuntary resettlement, air quality, waste emission, and theecosystem. After the handover, MPWT will continue monitoring air quality,
noise, vibration, waste emission, ecosystems, and the like. Also, a third party
consultant hired by MPWT will monitor payment status of compensation andliving conditions of residents after resettlement.
2) Promotion of Poverty Reduction

The poverty rate in Kampong Speu Province, one of the project sites, is higher
than the national average. We can expect that implementing this project willcontribute 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
MPWT defined a gender mainstreaming strategy to create employment
opportunities and make efforts to carry out capacity building for women. MPWTis 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, MPWT will provide educational activities as a part of healthmanagement for the laborers.
(8) Collaboration with Other Donors: N/A
4. Targeted Outcomes(1) Quantitative benefits
1) Outcomes (Operation and Effect Indicator)
Performance

Target roadsIndicators

Main road No. 5
Passenger Car

Kampong

Unit (PCUs per day)

Chhnang bypass
Oudong bypass

Baseline (ActualValue in 2012)

Target (2021) (Expectedvalue 2 years after projectcompletion)

7,306

13,817-

14,586-

19,363

135

126

Time required(min.)
Prek Kdam-Thlea
Ma’am Section(2) Qualitative Effects:
Promoting Cambodia’s economy and improving the investment climate(3) Internal Rate of Return (IRR):
Based on the conditions below, the Economic Internal Rate of Return (EIRR) of
this project was calculated as 20.7%. 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
Benefit: Shortening time required and cost savings for vehicle traffic
Project Life: 30 years

5. External Risk Factors and Risk Control
N/A
6. 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 Construction
Project for Pakistan demonstrated that the traffic accidents caused by recklessdriving and overloading increased. Therefore, construction of ancillary roads
facilities and measures to eliminate overloaded vehicles are necessary for theproject to ensure safety.
(2) Lessons for the Project
Based on the above, the project will construct 3-meter wide median strip as asafety measure in the hopes of reducing traffic accidents. To combat overloadedvehicles, the scope of the National Road No. 5 Improvement Project (Thlea
Ma’am-Battambang and Sisophon-Poipoet sections) (I) includes the constructionof 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:
Two years after project completion