The Emergency Transport and Mine Clearing Project, approved in 1996, covered the first phase of a larger reconstruction program following the breakup of the former Yugoslavia, ensuing hostilities, and the subsequent Dayton peace agreement (signed in December 1995). The project objectives were to (i)repair and reconstruct the surface transport networks within Croatia, especially those leading to Bosnia and Herzegovina (BiH), and (ii)clear landmines specifically in areas of high economic priority for reconstruction, starting with the transport networks. While the transport component was straightforward with established agencies, mine clearing was complex because no established organization existed to handle the work in a civilian reconstruction context.
An undisbursed amount of US$0.1 million was cancelled. The Emergency Transport and Mine Clearing Project (Loan 4104-CR) was approved for a loan of US$102 million equivalent on November 21, 1996, and closed on December 31, 2001, 18 months behind schedule. The loan was fully disbursed.
The audit differs from the Implementation Completion Report ratings as follows: the Highway Sector Project (HSP) outcome is rated unsatisfactory contrary to the ICR satisfactory rating, yet concurs with both ratings of likely sustainability, and modest institutional impacts, but downgrades Bank performance from highly satisfactory to satisfactory, and the Borrower performance from satisfactory to unsatisfactory; and, regarding the Emergency Transport and Mine Clearing Project (ETMCP), it concurs with satisfactory project outcome, likely sustainability, and satisfactory performances by both the Bank and Borrower, but upgrades institutional development impacts from high to substantial. Lessons emerging from these projects suggest highway ' sector ' projects need to take a comprehensive view of the sector, and include appropriate sector-wide performance indicators; although separation of agencies and funding sources for the maintenance, and improvement of the national road network, and for the construction of motorways, as Croatia did in 2001, can be effective to ensure funding for road maintenance, but stringent operating rules are necessary to ensure resources are used efficiently; it should be reinforced that Bank-financed projects, by requiring competitive procurement and exemplifying its advantages, can lead to the establishment of competitive procurement throughout a whole industry, and to the development of qualified domestic contractors, thus the need to improve transparency of its public procurement process, an important issue in Croatia's public policy.
