Sri Lanka: Road Sector Development Project (1986-SRI[SF])


The Road Sector Development Project aimed to improve transport efficiency, thus contributing to the expansion of economic opportunities and the reduction of poverty. The project was to develop capacity in the road sector and improve the road infrastructure in the country. ADB approved the project on 19 December 2002.

The project has two major components—the Reform Program and investment. The Reform Program aimed to strengthen the performance and capacity of public sector institutions—the Road Development Authority through implementation of agreed reengineering action plans, and provincial road administrations through the implementation of the institutional development program. The investment component comprised of civil works for the rehabilitation of about 980 kilometers (km) of roads and bridges; improvement of about 40 km of community access roads; and consulting services for the design of national highway development that would result in detailed engineering designs for 411 km of national highways, including a topographic survey, tender documents, resettlement and utility relocation plans, and environmental and social studies. The project also included advisory technical assistance for the Passenger Transport Services Improvement Project.

This project performance evaluation report provides assessment of the project's performance and provides inputs to the sector assessment for ADB assistance to the transport sector in Sri Lanka.

Overall assessment

The project is assessed partly successful.

The project is rated relevant. The general design of the reform plan and the physical investment was consistent with the country’s development priorities and ADB’s country and sector strategies, both at appraisal and at project completion. However, the design of the project is complex. Numerous components and subcomponents are not clearly linked with the project’s objective and the selection of the 980 km of provincial roads created some issues.

The project is rated less effective. The project improved 780 km of roads, compared with about 980 km expected at appraisal, 22% less than planned. The number of bridges was reduced from 125 to 74. A shortage of funds meant that 40 km of community roads were dropped or cancelled from the scope of the project.

The project is rated efficient. At appraisal, the estimated economic internal rate of return (EIRR) of the overall project was 26.1%. However, there are weaknesses in the economic analysis at appraisal: the validity of the analyzed data and the assumptions of the economic evaluation.

The project is rated less likely sustainable. The actual funding for maintenance of provincial roads has remained at about 40%–70% of the required budget. The road maintenance trust fund was established, but there is yet no arrangement for direct contribution to the fund from a fuel levy. The trust fund operates only as a separate budget item, and the intended outcome of establishing a road fund has not materialized.

Key issues and lessons

  • At appraisal, the difficulty of implementing the Reform Program could have been foreseen and special measures for monitoring and supervision should have been proposed in the report and recommendations to the President, and specific milestone requirements to check the progress of the Reform Program should have been set.
  • Necessary data should be collected for the project roads at appraisal, and the selection methodology should have been a sound logical and scientific tool to shield it from political pressure.
  • An appropriate method for economic justification should be carefully examined at appraisal. The economic analysis should have used observed data instead of the desktop estimation, and should be assessed based on sound assumptions.
  • More careful monitoring and supervision should have been required to review the progress of the program, to understand its key issues, and to propose alternative approaches where necessary. The design of the Reform Program with its numerous components was complex, so efforts in monitoring and guidance should have been made during project implementation.
  • The requirements, key issues, terms of reference, selection criteria including qualification of consultants, implementation structure, and understanding and ownership of the TA by the implementing agencies should have been described carefully according to the requirements of technical assistance. If poor performance was observed, prompt action could have been required to minimize the loss of time and funds. The Road Development Authority also should have developed a well-maintained performance recording system.

Follow-up actions

Selection methodology. Since rehabilitation of provincial roads is still a priority in Sri Lanka, ADB should review the selection methodology to ensure its soundness before financing the next provincial roads.

Economic reevaluation. After project completion, no traffic volumes or road roughness data were collected. Traffic and road roughness data should be recorded periodically to provide information for future investment in provincial roads. Traffic counts and road roughness measurements should be carried out as soon as possible, so that economic reevaluation can be fully performed. This reevaluation should also be taken as feedback for the review of the selection methodology, and the data can be used for road maintenance as well.

Reform plan. Many targets of the reengineering action plans and the institutional development program were not accomplished. ADB should review the current status of the institutional capacity of the Road Development Authority and the provincial road administrations, and propose follow-up actions regarding the unmet targets.