Pakistan: Road Sector Development Program (Policy Loan)

Date: December 2013
Type: Evaluation Reports
Country:
Subject:
Evaluation; Transport and ICT
Series: Project Performance Evaluation Reports
Project Number: 32058-023

Description

Severe fiscal and external imbalances had dominated the economic policy agenda in Pakistan throughout the 1990s. After the events of 11 September 2001, Pakistan became a quasi-frontline state in the war against terrorism. This added to the problems already existing. The government had expected that the balance-of-payments deficit would widen due to declining exports and the withdrawal of foreign direct investment. To ease the foreign exchange shortage, the government requested ADB consider a quick-disbursing program loan component to the Road Sector Development Program. ADB linked provision of the program loan component to implementation of national road sector reforms, whereby the budgetary support provided by the program loan was to help the government undertake sector reforms by defraying the costs associated with those reforms.

Overall, the program is assessed less than successful. It was rated less than relevant due to inadequacy of the program design and of time allotted to implement the reforms, particularly in the areas of road safety and axle load control. The less than effective rating reflects that some policy conditions had not been met as of the time of evaluation. The program was rated less than efficient in view of the delays encountered in meeting the conditions for the tranche releases. The prospect of the program to be less than likely sustainable resulted from the inadequate outcomes of the reforms in asset preservation.

One the emerging issue in the program is the link between the purpose of program lending as reflected in the policy loan component and its use in practice. The government’s overriding concern was a shift transfer of funds to alleviate foreign exchange imbalance, where the expressed intent of the program was to reform transport policies and institutions. The perceived urgency to provide quick balance-of-payments relief was incompatible with the much longer time horizon needed to successfully implement policy and institutional reforms in the transport sector.

Contents

  • Basic data
  • Executive summary
  • Introduction
  • Design and implementation
  • Policy assessment
  • Other assessments
  • Issues and lessons
  • Appendixes