Sri Lanka: Southern Transport Development Project

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Lessons

Successful implementation of mega road projects requires solid government ownership, strong donor partnership and stakeholder collaboration, and adequate technical knowledge.

This project’s success can be attributed to a mix of factors, including solid government ownership and strategic vision; the long-term partnership between the government and several international development agencies; the persistent advocacy of civil society groups; and a series of well-targeted technical assistance projects that bridged existing knowledge gaps. These factors worked together to enable the project to overcome complex challenges, key of which were (i) the need to upgrade the road design because of rapid socioeconomic changes; (ii) meeting substantial cost increases, which arose from upgrading the highway to four-lane standard and other factors such as cost overruns under the original loan component, price increases, and substantial amounts of contractor claims; and (iii) innovating to ensure compliance to Asian Development Bank safeguards which vary significantly from Sri Lanka’s safeguard system, particularly in terms of land compensation. If it were not for the combination of these factors, project quality may have suffered, and the project would not have been successfully completed. Overall, the project is an invaluable source of lessons for mega road planning and implementation.

Project Cycle Stage:

Preparation

Implementation

The preparation of greenfield mega road projects requires significant time and resources.

As with other mega road projects worldwide, the formulation of this project was long and complex. The process took 7 years, from the 1995−1996 master planning financed by the Japan International Cooperation Agency to concept finalization and detailed engineering that lasted into the first 4 years of project implementation. For a country with no prior experience in expressway development, direct support from ADB and other development partners for detailed project formulation is necessary to ensure quality and ultimate success. Even with such support, the finalization of engineering design took twice the time envisaged at appraisal. ADB’s lending instruments are now more diversified than they were in 1999. For future similar projects, using a TA loan or a project design advance to assist governments in finalizing engineering before loan processing is recommended.

Project Cycle Stage:

Preparation

The time lapse between project preparation and implementation can significantly impact project feasibility and options.

At appraisal in 1999, the project envisaged the Southern Expressway to comprise a 6-lane, high-capacity, limited-access express highway, and a stage-wise construction approach was adopted. However, the fast-paced development and traffic growth in the southern region demanded a high-capacity highway earlier than projected, and this entailed upgrading highway expansion, from a 2-lane to a 4-lane standard. The government and ADB and other funding partners demonstrated great patience and flexibility to allow further development of the project concept during the early stage of implementation. For ADB, this meant adjusting the civil works at a time when earthworks, road structures, and around 10 kilometers of road pavement works had already been completed on 1 of the 2 highway sections it originally agreed to finance. The balance of works in that section was excluded from ADB financing, and the whole section was eventually financed by the Export and Import of China. The process of finalizing the detailed design, while circuitous and lengthy, had not compromised the project’s overall objectives and relevance.

Project Cycle Stage:

Preparation

Implementation

Public relations is an important aspect of project management.

Despite probably the best-ever compensation package in Sri Lanka, this project encountered strong public protest, especially during early implementation stage, because of land acquisition and compensation issues. A communication plan was not prepared during project formulation and early enough during implementation. In response, the executing agency, the Road Development Authority (RDA) developed a project communication plan in 2005 and ran public awareness campaigns. The RDA, as much as the project, eventually gained the support of stakeholders and the general public, highlighting the important role played by communication and good public relations in ensuring project success.

Project Cycle Stage:

Preparation

Implementation

Mega project implementation provides opportunities for improving country safeguard systems.

The land and related assets required by this project were acquired within the framework of Sri Lanka’s Land Acquisition Act of 1950 and its amendments. Since the act did not meet the requirements of the ADB Involuntary Resettlement Policy to pay market value for land and replacement cost for structures, the project established land acquisition and resettlement committees (LARCs), which were the first of their kind in the country. The LARCs were very popular among project affected persons as they played a very constructive role in redressing grievances. They managed a huge number of cases that would have otherwise resulted in legal procedures and thus reduced possible implementation delays. Mainly because of their intermediation, the government had addressed all issues in land acquisition and compensation. It subsequently replicated the LARC system in other sectors and incorporated some of the project’s good practices on land acquisition and compensation into Sri Lanka’s Involuntary Resettlement Safeguards system. Drawing on this project’s experience, it is important for future similar projects not only to ensure compliance to ADB safeguard policy but harness the opportunities offered by large-scale land acquisition accompanying most mega infrastructure projects to improve existing country safeguard systems. Establishment of grievance redress mechanisms at the earliest possible time is a must and so is making stakeholders aware of how they can be availed of

Project Cycle Stage:

Implementation

Background

The Southern Transport Development Project, which aimed to catalyze the development of the socioeconomically deprived southern region and improve road safety nationwide, is the largest greenfield road project ever implemented in Sri Lanka. It has been declared a milestone in the country’s development history, and with a total cost of almost $900 million, may well be regarded as a mega project. In addition to the investment cost, it was also mega because of the challenges involved in planning and implementation. It received a high level of public attention, galvanized by substantial direct and indirect impacts on the community, environment, and budgets. Its expected substantial impact on both the regional economy and that of Sri Lanka is important, and so is the significant capacity building and knowledge impact it created during implementation.

The project, financed by the government and five development partners, had two components, Southern Highway and road safety. The Southern Highway, originally envisaged to be constructed in stages, was divided into 4 sections for financing purposes. The Asian Development Bank (ADB) and the Japan Bank for International Cooperation now known as the Japan International Cooperation Agency (JICA) were each to finance 2 sections of the highway, with JICA taking care of the first 2 sections comprising 66.6 kilometers (km) and ADB covering the last 2 sections with a total length of 59.6 km. The road safety component was mainly to implement the road safety Action Plan II, developed under the previous ADB-funded Third Road Improvement Project in Sri Lanka.

To finance its original part in the project, ADB approved a loan of $90 million equivalent in November 1999. The stage construction approach planned at appraisal designated ADB’s sections to be constructed under stage 1 to a two-lane standard but upgraded in 2010 to a four-lane standard. The contract for the ADB-financed civil works was awarded in January 2003. However, in 2007, the government decided to upgrade the two-lane highway to a four-lane expressway to meet the greater-than-anticipated traffic growth in the southern and western provinces in 2000−2005. At the time, earthworks, road structures, and around 10 km of road pavement works had already been completed in 1 of the 2 sections funded by ADB. The balance of works in that section were excluded from the ADB finance, with the Export and Import Bank of China (CEXIM) subsequently financing that whole section.

ADB approved a supplementary loan of another $90 million in March 2008 to complete the other road section it committed to finance as four lanes. The civil works contract was restructured accordingly. The ADB- and JICA-funded expressway sections were substantially completed by November 2011 and opened to traffic on 26 November 2011, while the CEXIM-financed section was opened on 15 March 2014.

For component 2, ADB financed civil works for reducing safety hazards at specific locations in national highways as a pilot model on how to prioritize black spot location and the management of technical and other aspects of black spots. Black spot improvements in 20 areas in several ADB-financed roads in Sri Lanka were completed by April 2007.

All the expected project outputs were delivered. Increase in scope due to the upgrading of the road design to a high capacity expressway and the addition of road safety equipment and control vehicles required to operate the expressway, as well as other factors such as cost overruns under the original loan component, price increases, and substantial amounts of contractor claims, led to substantial increases in the total project costs from an estimated $295.9 million equivalent at appraisal in 1999 to $906.5 million at project completion in 2014. Similarly, it took 13 years to complete the project compared to the originally expected implementation period of 6 years.

Successful project completion and subsequent operation of the Southern Expressway increased the economic opportunities for the people in the southern region. Travel time between Colombo and Matara had been reduced to 1.5 hours as of March 2014. The accident rate on the Galle Road decreased from 25 per 1 million vehicles in 2010 to 21 per 1 million vehicles in 2011, and further to 16 per 1 million vehicles in 2012. Two new industrial estates, 1 port, and 1 international airport had been built in the southern region after the project started. The social and economic investments made under the project have been private sector investment to the region.

The project had two initial executing agencies: the Road Development Authority (RDA) for the construction of the Southern Expressway and the Ministry of Transport for the road safety component. However, after the approval of the ADB and JICA supplementary loans, the Ministry of Highways and Road Development became the executing agency for the civil works with the RDA assuming the role of implementing agency.

Project Information

Project Name:

Southern Transport Development Project

Report Date:

August, 2014

Main Sector:

Transport

Country:

Sri Lanka

Project Number:

26522

Report Type: