Republic of the Philippines

Ex-Post Evaluation of Japanese ODA Loan Project

Metro Cebu Development Project (III)
(Cebu South Reclamation and Cebu South Coastal Road)

External Evaluator: Yasuhiro Kawabata, Sanshu Engineering Consultant

0. Summary
The objectives of the project were to attract enterprises and facilitate smooth traffic flow in
the urban area by reclaiming and developing new land for an industrial zone, and constructing a
coastal road, thereby contributing to promotion of the economic development in Metro Cebu.
The project was not highly relevant with the Philippines’ development plans and needs, and
Japan’s ODA policy. Therefore, its relevance is fair. Regarding construction of a coastal road,
the project has contributed to smoothing the traffic flow in the urban area, since part of traffic
diverts to the coastal road, which was constructed under the project. However, the original idea
to attract foreign capital enterprises through establishing an industrial park in the reclaimed area
was not materialized after the Asian Financial Crisis. Thus, it was changed to invite local
enterprises and industry, and the development work including construction of building of
University of the Philippines, a shopping mall, apartments, and light industry factories has been
undertaken. However, as of today, only part of the area has been developed, and thus,
achievement of project objectives made are at a extremely limited level compared with the
original plans. Therefore, its effectiveness and impact is considered low. Although the project
cost was within the plan, the project period was significantly longer than planned. Therefore,
efficiency of the project is considered fair. Effects achieved by the project were made under the
coastal road project. No major problems have been observed in terms of institutional
management system, and technical and financial aspects for operation and maintenance,
therefore sustainability of the project effect by the coastal road project is high.

In light of above, the project is evaluated to be unsatisfactory.

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1. Project Description

Reclaimed land
Project Location
Note: Buildings in the center are apartments.

1.1 Background
Metro Cebu1 is the center of economy, trade and education in the central and southern
Philippines and the economy has been growing in recent years. Geographically, it has flat plains
expanding to the north and south along the shoreline with the rolling terrain behind it, and flat
plains are relatively narrow. The northern districts including Mandaue, Cebu, and Lapu Lapu,
which are close to an airport and ports, have been developed and spatially congested, while
development in the southern districts including Talisay, which have poor accessibility has been
behind. Thus, disparity between the northern and southern districts has been expanding.
The economy of Metro Cebu has been developing nucleating the 330 ha Mactan Export
Processing Zone. However. since there was a limit to meet the demand from foreign investors, a
new industrial park was needed in order to further the regional economic development. Creating
a new development zone by reclaiming the Cebu south coast was considered to be an
appropriate plan taking into the geographical condition such as accessibility to an airport and
sea ports. It was also expected that it would help alleviate the disparity between the northern and
southern districts, which has been a pending issue for a while. In addition, construction of an
alternative road was considered essential, since more traffic congestion was foreseen without
proper access to the developed area.

1.2 Project Outline

The objectives of the project were to attract enterprises and facilitate smooth traffic flow in
the urban area by reclaiming and developing new land for an industrial zone, and constructing a
coastal road, thereby contributing to promotion of the economic development in Metro Cebu.

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Metro Cebu consists of 7 cities and 6 towns including cities of Cebu, Mandaue, Talisay and Lapu Lapu.

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Figure 1: Location of the Project Site

Loan Approved Amount/ Reclamation : 12,315 million yen /12,292 million yen
Disbursed Amount Coastal Road : 18,391 million yen /18,377 million yen
Exchange of Notes Date/ Reclamation : July 1995 / August 1995
Loan Agreement Signing Date Coastal Road : July 1995 / August 1995
Terms and Conditions (Both Projects)
Civil Work:
Interest Rate:2.70%
Repayment Period: 30 years (Grace Period: 10 years)
Conditions for Procurement: General untied
Consulting Services:
Interest Rate: 2.30%
Repayment Period: 30 years (Grace Period: 10 years)
Conditions for Procurement: General untied
Borrower/ Executing Agency(ies) Reclamation : Land Bank of the Philippines
Coastal Road : The Government of the Republic of the
Philippines
Reclamation : Cebu City Government
Coastal Road : Department of Public Works and
Highways (both projects were managed
by Metro Cebu Development Office)
Final Disbursement Date Reclamation : June 2004
Coastal Road : June 2006
(originally December 2002 / June 2003, respectively)

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Main Contractor Reclamation : Toyo Construction
Coastal Road : Toa Corporation, Taisei Corporation ▪
Marubeni Corporation (JV), Kajima
Corporation
Main Consultant (Both projects) Nippon Koei ▪ OPMAC ▪ Katahira
and Engineers Inc. ▪ Toko Engineering Consultants
Ltd. ▪ CEDCO (Philippine) (JV)
Feasibility Studies, etc. Feasibility Study by the World Bank (Central Visayas
Urban Planning (December 1983), Feasibility Study for
Metro Cebu Development Plan (III) by local funds
(November 1989)
Related Projects Japanese ODA Loan: Metro Cebu Development Project
(I) (L/A signed in May 1989), Metro Cebu Development
Project (II) (L/A signed in February 1990), Engineering
Services for Metro Cebu Development Project (III) (L/A
signed in June 1991), Second Mactan Bridge
Construction Project (L/A signed in August 1993),
Second Mactan Bridge (II) and Metro Cebu Road
Development Project (L/A signed in March 1997)
Grant: Supply of Materials and Construction of Bridges
along Rural Roads (5 times since 1989)

2. Outline of the Evaluation Study

2.1 External Evaluator
Yasuhiro Kawabata, Sanshu Engineering Consultant

2.2 Duration of Evaluation Study

Duration of the Study: October 2012 - September 2013
Duration of the Field Study: January 24 - February 13, 2013, April 14 - 27, 2013

3. Results of the Evaluation (Overall Rating: D2)

3.1 Relevance (Rating: ②3)
3.1.1 Relevance with the Development Plan of Philippine
Under the Mid-Term Development Plan 1993-1998, the following strategies were established:
1) attraction of foreign capital and investment through development of infrastructure and
investment related system; 2) alleviation of poverty; 3) enhancement of people’s quality of life;
4) promotion of decentralization based on the new Local Autonomy Act (1990); 5)
strengthening of rural development by establishing President Office-run regional offices in
Visayas, focusing on Cebu island and in Mindanao; and 6) reform of financial system.

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A: Highly satisfactory, B: Satisfactory, C: Partially satisfactory, D: Unsatisfactory
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③: High, ② Fair, ① Low

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Objectives of the project matched with two strategies including 1) and 5) among above
mentioned 6 strategies.
Under the current Philippine Mid-Term Development Plan 2011-2016, in order to achieve the
inclusive growth, the government would address the following agendas: enhancement of
governance, attraction of investment, infrastructure development by the PPP scheme, reforms of
social security, strengthening of tax collection, and peace building/stable national security. With
respect to the transport sector, improvement of quality of existing transport infrastructure, and
development of transport networks and logistics are considered to be issues and challenges, and
the following strategies are employed: provision of access to major tourism destinations and
strategic production areas, identification and development of strategic logistics corridors,
improvement of the road RORO4 transport system, exploration of ASEAN connectivity through
RORO and others.

3.1.2 Relevance with the Development Needs of Philippine

Since numerous foreign enterprises moved into the existing Mactan Export Processing Zones,
the zones became too cramped and it became difficult to respond to the increasing demand for
investment by foreign investors. Thus, it was noted that there was a need to develop a new
industrial park in order to further the regional economic development. The Cebu south coastal
district was considered to be an ideal location taking into account the geographical condition
such as the accessibility to an airport and sea ports. However, it was considered that it was
needed to construct a new alternative road in order to avoid more traffic congestion in Cebu city
without improvement of accessibility in the district if an industrial park should be established by
reclaiming.
Even now, the well balanced development and growth between the northern and southern
districts is essential in order to promote the development of Cebu city. Since the project aims
at developing the less developed southern district, it matches with the development needs for
Cebu city. However, since the original development objective by reclaiming was to develop an
industrial park and promote attracting foreign enterprises, the current land use plan (industries
to be invited were changed to commercial sector, light industry, and other service business) is
substantially different from the original plan. In the reclaimed land, buildings of University of
the Philippines, residential complexes and light industry factories have been partly completed
and a shopping mall is being constructed. The South Coastal Road under the project has
contributed to alleviate the traffic congestion in the central Cebu city by diverting partly the
traffic on the congested Cebu South Road to South Coastal Road. The project matches with the

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Roll-on/roll-off ships are vessels designed to carry wheeled cargo such as automobiles, and large trucks, that are
driven on and off the ship on their own wheels.

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development needs in Cebu city.

3.1.3 Relevance with Japan’s ODA Policy

Under the Country Assistance Policy for the Philippines (established in December 1993), the
assistance was to be given to sustainable economic development, poverty alleviation,
environmental protection and improvement, rural development, reconstruction of damages
caused by disaster/disaster prevention. Among these agendas, regarding the economic
infrastructure, the following were considered to be priority assistance agendas: i) fundamental
economic infrastructure for industry development (roads, rivers, ports); ii) reconstruction of
economic infrastructure in the disaster-stricken areas; iii) development of disaster prevention
system.

Among two projects, the Coastal Road Project matches with the Philippine development
policies and the high priority agendas in the Japan’s ODA Policy, and the development need is
high. Regarding the Reclamation Project, since attraction of enterprises consisting of export
processing producers was not materialized, the implementation of the project did not necessarily
match with the Philippine development policies and needs, and the high priority agendas in the
Japan’s ODA Policy. The overall relevance of two projects is considered fair.

3.2 Effectiveness5 (Rating: ①)

3.2.1 Quantitative Effects (Operation and Effect Indicators)
This ex-post evaluation is related to two projects including both Metro Cebu Development
Project (III) Reclamation and Coastal Road. Although an export processing zone was to be
originally established in the completed reclaimed land, attraction of foreign capital enterprises
was not achieved because of the Asian Financial Crisis in 1997. Thus, Cebu City changed the
targeted industries to commercial business, light industry, service business and others, and
submitted the concept plan to JICA in mid 2009. As of today, residential complexes and light
industry factories have been partly completed and a shopping mall is being constructed. The
remaining 1/3 of the land area has been for sale in lots. Thus, it is difficult to examine the
development impact on the reclamation project at this moment. The quantitative impacts
by Coastal Road Project are examined herein after.

(1) Average Daily Traffic (South Coastal Road)

The average daily traffic after completion of the project is shown in Table 1.

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Sub-rating for Effectiveness is to be put with consideration of Impact

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Table 1: Average Daily Traffic (South Coastal Road) )
unit: vehicles/day
2010 2011
Annual Average Daily Traffic 20,300 21,300
(29,000) (30,900)
Source: DPWH
Note 1: Counting station: between Rafael Rabaya -Road San Roque Road along Talisay section
Note 2: Numbers in ( ) are traffic volume including motorcycles
Note 3: Data on the projected traffic volume not available

Considering that Talisay section and the connecting road, Sergio Osmena Blvd Road at
the Cebu city are both at-grade 4-lane roads, traffic congestion likely occurs during
peak hours in some sections. The traffic volume of the parallel Cebu South Road for the
past three years are as shown below.

Table 2: Average Daily Traffic (Cebu South Road)

unit: vehicles/day
2010 2011 2012
Annual Average Daily Traffic
38,552 38,340 40,412
Source: DPWH
Note 1: Counting station: around Lawaan I
Note 2: Traffic volume included motorcycles

Considering that Cebu South Road is also an at-grade 4-lane road, traffic congestion
likely occurs during peak hours in some sections.

(2) Travel Time

The travel time required to pass the old road and South Coastal Road (the project road)
between Lawaan I (intersection with the Talisay section) in the south along Cebu South
Road and Cerreta Cemetery in Cebu city was measured. The result indicated that the
travel time by South Coastal Road (the project road) is shortened by 14 minutes.

3.2.2 Qualitative Effects

Reclamation Project:
The original plan to attract foreign capital was not materialized, and the plan was
changed to attracting local enterprises and industry. The development work in the
reclaimed land commenced in 2010. However, at this moment only part of development
plan (apartments and light industry factories) has been completed, and the development
effects have not been achieved.

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Coastal Road Project:
Upon completion of South Coastal Road, the route from the southern Cebu districts (Naga)
to Mactan Island, where an Mactan International Airport, Mactan Economic Special Zones I
and II, and resorts in the eastern shoreline are located, makes a detour around central Cebu
city, and it reaches and crosses Mactan bridges. The travel time was shortened and it also
contributes to alleviation of traffic congestion in the central Cebu city.

Since the reclaimed land has been being developed, it was considered difficult to
examine the development effects at this moment. Thus, beneficial surveys to examine
the effects were undertaken on the Coastal Road project (Talisay section)6. Beneficial
survey results are shown below.

A) Was traffic congestion in the project area improved after the project? (%)

Yes No
79 21

Among respondents, who answered "Yes", 48% answered that the improvement was
substantial, and 45% answered that it was fairly improved. Only 7% responded that it
was a little improved.

B) Was travel time shortened after the project? (%)

Yes No
71 29

The degree of shortened travel time differs depending on the travel purpose and
destinations. However, generally about 70% answered that the travel time was shortened.

C) Was accessibility to each facility improved after the project? (%)

Facility %
Markets, shops, trade centers 61
Social services 45
Hospitals 21
Government/public agencies 10
Cebu Port 94
Mactan Airport 58

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Surveys undertaken: January 2013, Number of samples: 210 (residents along the project road and road users,
Male 40%, Female 60%) , Survey method: interviews using a questionnaire.

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As expected at the planning stage, many people admit that the accessibility to Cebu
ports and Mactan International airports was improved. In addition, quite a number of
respondents recognize the improvement of accessibility to markets, shops, and trade
centers.

D) Was highway safety on national roads in the project area improved after the project? (%)

Very Fairly Improved Not so much Not improved

3 12 62 14 9

About 80% of respondents admit that the highway safety was also improved.

According to the results of beneficiary surveys, about 80% of respondents admit that the
traffic congestion in the project area was improved after the project and that about 70%
answered that the travel time was shortened. People conceive that the accessibility to
each facility was improved, particularly to Cebu Port (94%) and Mactan Airport (58%)
as expected at the planning stage.

3.3 Impact
3.3.1 Intended Impacts
The results of beneficiary surveys on impacts are shown below.

A) Do you think that the regional economic activities were promoted after the project? (%)

Yes No
83 17

B) Do you think that the business chances were increased after the project? (%)

Yes No
83 17

About 80% respondents gave the positive answers to promotion of regional economic
activities and increase of business chances. The impact due to provision of an arterial
road from the Talisay district to the coastal district appears.

C) Was the transported amount of commercial products to markets increased after the
project? (%)

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Increased Decreased
80 20

About 56% conceive that the most increased commercial product is processed food,
followed by agricultural products (44%), manufactured goods (41%) and electronics
products (30%) among the increased products.

D) Was the household income increased after the project? (%)

Yes No
45 55

Regarding the direct contribution of the project to the increase of household income,
only 45% respondents conceive its direct benefits (increase of household income).

3.3.2 Other Impacts

Under the project, resettlement of directly affected 520 households and informal settlers of
400 households took place due to construction of an access road to the reclaimed land
(Mambaling Road) and the coastal road. According to the executing agency, about 80% among
resettled households moved to the designated land by the executing agency, and the rest (about
20%) resettled to other locations. Compensation was paid by Department of Welfare of the
Urban Poor of the Cebu City Government.
On the other hand, the implementation of the project generated a series of complaints on
impacts on the livelihood due to deterioration of the living environment by the project, and also
demonstrations by the fisherfolks who live on the opposite shore facing the SRP and their allied
NGOs and Community Based Organizations (CBO).
During preparation stage of the project, an Environmental Impact Assessment (EIA) was
prepared and approved by the Philippines Government. However, regarding the impacts to the
residents who live on the opposite shore facing the reclaimed land, issues are briefly discussed
in the report stating that the marine resources along the shore has been deteriorated and that
major impacts are not foreseen. There is no section in which impacts on the socioeconomic
aspects of the residents on the opposite shore are well analyzed, and they are not listed as a risk
item. Hearings with residents in the communities revealed that the disclosure of relevant project
information was not made, nor public hearing was systematically made through posting in
conspicuous public places and publication in newspaper. Lack of view points on impacts to
residents who live on the opposite side is considered to be one of factors for less attention to
socioeconopmic aspects. .
Cognizant of the above mentioned complaints and based on the discussion made between

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JICA and the Philippine Government, in 2004 JICA conducted a study to clarify the alleged
negative impacts of the project. Based on the study results, the study team recognized that the
project had impacts on about 1,400 households including resettled households in 13 barangays
in Cebu City facing the reclaimed land, and recommended a comprehensive social development
plan covering livelihood, education, environment and others to urban poor communities in 13
barangays. Responding to the study conclusion, Cebu City has conducted the social
compensation program to the identified communities since 2005. However, since it was
considered difficult to identify the residents who were affected solely by the project, and Cebu
City considered that it was more appropriate to provide assistance to the district as a whole,
rather than solely to the identified residents. Cebu City identified 3,700 households, who lived
in within 100 meters from the shorelines as the program beneficiaries. Cebu City originally
planned a five-year Program ending in 2010. However, it decided to continue the Program even
after 2011 and it has been still under implementation. The average budget allocated to the
Program for the past 7 years was 3.5 million peso. (Although in addition to the budget for the
Program, there is also general budget allocated to the programs to be implemented by relevant
divisions of the City Government. However, the exact amount allocated to each program could
not be clarified.) The Program, which still has been continued, is not funded solely by the City
Government, but also by other sources of support including NGO, CBO and private sector as
well. The Program includes: 1) assistance for livelihood projects (massage, rag sewing, meat
processing and others); 2) education, health services and environmental programs including
mangrove planting; and 3) sharing good practice, and showcasing of livelihood products.
The survey of 130 sample household-beneficiaries conducted by JICA, inviting a professor of
Ateneo de Manila University in 2012 revealed that the quality/status of education and health has
been improved. Residents were highly satisfied with efforts made on education and health services.
On the other hand, regarding the assistance for livelihood projects, the share of residents who
admitted they were either highly benefited (15%) or only slightly benefited (38%) was 53% and
the remaining 47% said they did not enjoy the benefits. Reasons for not-benefited are that they
could not yield a profit or that activities could not be maintained. Backgrounds for these negative
outcome are: lack of funds; they used the funds for daily life activities; the interest rate for loans is
high; and they could not collect sales proceeds. Although it is considered that the livelihood
assistance to the urban poor is not easy and the outcome cannot be easily achieved, it is expected
that the Cebu City Government would continue to improve the assistance program including
livelihood assistance taking into account the current situation and problems.
The task team visited the project sites to inspect some of on-going social compensation
programs. Among the livelihood assistance programs, under the crab raising business, about
1,000 baby crabs were initially put in the ponds and some grown up crabs were sent to the fish
markets. However, since most of crabs later died, currently crabs were replaced by bangus fish

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(popular fish in the Philippines) and they have been cultured. As one of successful programs, the
massage therapy/finger pressure service at Wellness Center is listed. The Center has trained
about 40 therapists, and 5 of them are now regularly working with the Center. About 20
therapists out of 40 have continued pursuing the livelihood as a physical therapist in other
districts. Earnings at the Center collected from customers who have therapy services are 10,000
- 15,000 pesos per month, and they are used to operational expenses and labor costs. Regarding
the sustainability of each program, the presence of a leader who has business
operational/management skills is considered a key factor, together with enhancement and
development of technical skills of individual employee, who participates in each program. As a
health service assistance, health nutrition posts built in some of barangays could be good
examples. Health nurses and nurses are regularly dispatched to the posts, and simple
treatment/consultation is provided to the low income residents who cannot afford to go to a
health center. According to a counselor of some barangay, expanding health posts and provision
of sanitation facilities (e.g. waterless toilets) are still considered crucial.

At this moment, only part of the development plans (apartments and light industry factories)
has been completed, and the development effects have not been achieved. The coastal road
contributes to alleviation of traffic congestion in the central district of Cebu city. However, one
of original objectives was to secure the accessibility under the plan in which the export
processing zone was to be constructed in the reclaimed land. Judging the effectiveness made by
both reclamation and coastal projects comprehensibly, the project has achieved its objectives at
a limited level, and therefore its effectiveness and impact is low.

3.4 Efficiency (Rating: ②)

3.4.1 Project Outputs
The original and actual output of the project is shown in Table 3.
Table 3: Output (original and actual)
Major Scope of Work at appraisal Major Scope of Work at completion
Reclamation
Civil work: 1) Reclamation work for about 330 ha 1)Reclaimed area: about 296 ha
including revetment work of about (among which the area for a coastal
10.3km with a reclamation volume road is about 24 ha. Since a 61 ha
of 13.6 million m3 pond is included in the area, the
actual reclaimed area is about 235
ha. The length of revetment work is
about 9.2 km. The reclaimed soil
volume was about 9 million m3)
2) Additional work (a management
office in the reclaimed area,
roads/bridges, a sewage treatment
plant, a desalination plant, major
electric facilities and others)

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Consulting 1) Review of detail designs As planned
services 2) Assistance in bidding activities
3) Construction supervision
4) Market research, management study
and investment promotion study of
the Cebu Export Processing Zone
Foreign :201 M/M Foreign :206 M/M
Local : 834 M/M Local : 839M/M
Coastal Road
Civil work: Construction of Cebu Coastal Road Construction of Cebu Coastal Road
(totaling 7.75km) (totaling 7.75km)
1) Causeway Section(Segment 2): 1) Causeway Section(Segment 2):
construction of a 6-lane 4.02 km construction of a 6-lane 4.02km
highway with two bridges with a highway and a 4-lane 0.84 km
total length of 174m and a highway with a total length of 4.86
revetment work of 7.2km km
2) Central Business District 2) Central Business District Section
Section(Segment 3): construction of (Segment 3): construction of a
a 4-lane 3.73 km highway including 4-lane 2.89 km highway including
the viaduct section with a total the viaduct section with a total
length of 2.8km length of 1.62km
Segment 3 was divided into 3A
(viaduct section), 3B1 (approach
section), and 3B2 (tunnel section),
procurement of works was made by
3 packages. However, 3B2 (tunnel
section) was completed with the
own funds after the loan was
expired. (commenced the work in
June 2006 and completed in
October 2010.
3) Development of resettlement sites 3)Development of resettlement sites
Consulting 1) Review of detail designs 1)Review of detail designs
services 2) Assistance in bidding activities 2) Assistance in bidding activities
3) Construction supervision 3) Construction supervision
Consulting services on the above 4) Feasibility Study and the Detailed
services Design of structures for Segment
3B2.
Foreign :292 M/M Foreign :470 M/M
Local : 1,260 M/M Local : 2,294.5 M/M
Source: JICA appraisal documents
Note: During the appraisal for the Coastal Road, the Talisay section (5.3 km) of the Coastal Road was included in
the project. Since it was later judged that it was essential to give more time to handle the resettlement of
squatters (illegal occupants), this component was dropped from the project. The component was added to
the Second Mactan Bridge Project (II) as Metro Cebu Development Project. The Second Mactan Bridge
Project (II) and the part of Metro Cebu Development Project (Talisay section) were combined as a project,
and it was approved as Second Mandau - Mactan Bridge (Phase II) and Metro Cebu Road Project. The loan
agreement was signed in March 1997.

Major changes made on the Scope of Work are as follows:

Reclamation Project:
1. Because of change of policy of the Cebu City Government, the original plan for

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reclamation was changed to the one with a pond within the reclaimed land, resulting in
reduction of reclaimed area by about 60 ha.
2. Originally, the filling materials were to be transported from off Maasin of southern
Leyte. However, since a clearance was not secured from environmental viewpoints,
materials were sourced out from quarries in Cebu Island.
3. Since savings were expected to accrue in the loan amount because of variation of
foreign exchange rates, additional work was implemented. (the exchange rate at
appraisal in January 1995 was 1 Peso = 4.13 yen. The rate at bidding for additional work
in June 2002 was 1 Peso = 2.39 yen)

Coastal Road Project:

The project road length at the planning and completion stages is both 7.75 km. However,
the number of contract packages for bidding was changed from original 2 to 4 packages.
Particularly, the central business district section (Segment 3) was divided into 3A
(viaduct section), 3B1 (approach section) and 3B2 (tunnel section) and bidding was
made. Since 3B2 section was changed from the original flyover structure to a tunnel, a
feasibility study and detailed designs were needed to be done, and thus the
implementation period was substantially extended. At commencement of civil work (in
2006), about 1.7 billion yen (about 65% of the civil work cost) was disbursed. The
project was completed with own funds spent for the remaining project cost. (The project
commenced in June 2006 and was completed in October 2010). Since the 3B2 section
was changed to a tunnel, undertaking of a feasibility study and detailed designs was
added to the scope of work for consultants.

3.4.2 Project Inputs

3.4.2.1 Project Cost
The originally estimated project cost of Metro Cebu Development Project (III) - Reclamation
at appraisal was 16,420 million yen, of which the total Japanese ODA loan was 12,315 million
yen. The actual project cost at completion was 12,860 million yen, which is equivalent to 78%
of the planned cost, and the Japanese ODA loan disbursed was 12,292 million yen.
The originally estimated project cost of Metro Cebu Development Project (III) - Coastal Road
at appraisal was 24,521 million yen, of which the total Japanese ODA loan was 18,391 million
yen. The actual project cost at completion was 24,795 million yen, which is equivalent to 101%
of the planned cost, and the Japanese ODA loan disbursed was 18,377 million yen.
The originally estimated total project cost of both projects at appraisal was 40,941 million
yen, of which the total Japanese ODA loan was 30,706 million yen. The actual project cost at
completion was 37,655 million yen, which is equivalent to 92% of the planned cost, and the

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Japanese ODA loan disbursed was 30,669 million yen.
However, if the project cost was compared in peso, since the Japanese yen appreciated double
compared with the exchange rate used at appraisal (1 peso = 4.13 yen), the actual project cost is
likely much higher than the planned cost7.

Table 4: Comparison of Project Cost (Planned and Actual)

unit: million yen
Planned Actual
Item ODA loan Local Local ODA loan Local Total
(foreign) Own fund ODA loan Total ODA loan (foreign) Own fund ODA loan Total ODA loan
Reclamation
1) Civil work 7,727 14,117 10,676 10,448 10,027
2) Consulting services 883 892 866 1,467 1,320
3) Physical contingency 773 1,412 30
4) Interest during
743 945 945
construction
Total 9,333 16,420 12,315 12,860 12,292
Coastal Road
1) Civil work 9,997 2,904 5,885 18,286 15,382 12,481 5,303 3,571 21,355 16,052
2) Consulting Services 1,269 37 58 1,364 1,327 1,836 407 489 2,732 2,325
3) Development for
254 66 128 448 382
resettlement areas
4) Contingency 1,000 529 300 1,829 1,300
5) Land acquisition/
0 2,594 0 2,594 0 708 708
Compensation
12,520 6,130 5,871 24,521 18,391
Total 14,317 6,418 4,060 24,795 18,377
(3,031) (1,484) (1,422) (5,937) (4,453)
Total
1) Civil work 17,724 29,329 31,803 26,079
2) Consulting services 2,152 2,185 4,199 3,645
3) Development of
254 448
resettlement areas
4) Contingency 1,773 3,241
5) Land acquisition/
0 2,594 708
Compensation
6) Interest during
945 945
construction
Total 21,853 40,941 30,706 37,655 30,669
Source: JICA appraisal documents, PCR, Final Reports prepared by supervision consultants
Exchange rates:
Reclamation: At appraisal (January 1995), 1 US$ = 100 yen, 1 Peso = 4.13 yen; At contract signing (1997.10 -
2000.10), 1 Peso=4.64 yen by Oanda; Average during the project implementation (1997.4 -
2000.10), 1 Peso=2.24 yen by Oanda; Average during civil work implementation (2003.2 - 2004.5),
1 Peso=1.85 yen by Oanda.
Coastal Road: At appraisal (January 1995), 1 US$ = 100 yen, 1 Peso = 4.13 yen
Note 1: Numbers in ( ) are in million peso.
Note 2: The loan handling charge of 18 million yen is included in the cost for civil work (Coastal Road).

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Comparison between the planned and actual project costs should be made in Japanese yen. However, time has
quite passed since the appraisal time (almost 18 years). During this period, the exchange rates have substantially
floated. In addition, the exchange rates used for payment in Japanese yen under the contract made in peso, and the
payment mode/conditions are not clear. Thus, project costs were converted into Japanese yen by using simple
average exchange rates during the contract period.

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Reclaimed land (Sea Channel) Coastal Road Viaduct Section

3.4.2.2 Project Period

Reclamation Project:
The original project period planned at appraisal was from August 1995 (signing of the
Loan Agreement) to June 2000 (civil work completion) with a total period of 59 months.
The actual project period was from August 1995 (signing of the Loan Agreement) to
December 2004 (civil work completion) with a total period of 113 months, or equivalent
to 192% of the plan. The main reason for delay is: although the originally planned
reclamation work was completed as planned, the additional work was implemented
during March 2003 - December 2004, and thus, the overall work was completed with
delay by 54 months (equivalent to 192% of the plan).

Coastal Road Project:

The original project period planned at appraisal was from August 1995 (signing of the
Loan Agreement) to December 2000 (civil work completion) with a total period of 65
months. The actual project period was from August 1995 to October 2010 (completion
of the tunnel section at the Cebu city side) with a total period of 183 months, or
equivalent to 282% of the plan. The main reasons for delay are as shown below, and the
implementation period was substantially delayed with combined reasons mentioned
below.

1. Delay of effectiveness of the Loan Agreement (L/A was signed on August 30, 1995, and
became effective on June 28, 1996)
2. The reclamation work was originally planned to be commenced in July 1997, ahead of
road work, and to be completed in June 2000. The implementation plan, in which the
road work (particularly causeway section) was to be commenced in July 1997 and
completed in December 2000, is considered to be not pragmatic.

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3. Delay of selection of contractors by half a year.
4. The ambush incident against engineers of a Japanese contractor occurred in
February 2001, and construction was practically suspended until January 2002.
5. Due to problems on land acquisition occurred in the viaduct section in the central
business district section (3A), the alignment needed to be changed and it took a long
time to prepare detailed designs.
6. Similarly, at the connecting section from the coastal road to the existing city road in
Cebu city (3B2), designs needed to be revised (from a viaduct structure in the city to a
tunnel), and it took a long time to undertake a feasibility study and prepare new detailed
designs.

3.4.3 Results of Calculations of Internal Rates of Return (IRR) (reference only)

(1) Financial Internal Rate of Return (FIRR)
FIRR for the reclamation project, calculated at the appraisal time was 14.8%. Since the
objective of the reclaimed land was changed upon completion of reclamation work,
recalculation of FIRR is not applicable.

(2) Economic Internal Rate of Return (EIRR)

EIRR for the coastal road project, calculated at the appraisal time was 19.1%. Since the
scope of work was partially revised and the implementation period was substantially
extended, recalculation of EIRR is difficult.

Regarding the reclamation project, although the project cost was within the plan, the project
period significantly exceeded the plan. Therefore, efficiency of the project is considered fair.
With respect to the coastal road project, although the project cost was almost as planned, the
project period significantly exceeded the plan. Therefore, efficiency of the project is considered
fair. The overall rating for efficiency combining two projects is considered fair.

3.5 Sustainability (Rating: ③)

3.5.1 Institutional Aspects of Operation and Maintenance
Since the reclamation project has not achieved its objectives, the sustainability on the coastal
road project is hereinafter discussed.

Coastal Road Project:

Cebu City District Engineering Office under DPWH Regional Office VII (with about
230 regular staff) has been responsible for maintenance of the coastal road after the
project was completed. Cebu City District Engineering Office has about 55 regular staffs,

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and among those 8-9 staffs are responsible for maintenance work, with additional about
35 roadside maintenance workers. In addition, the Office employs about a few dozen
temporary staffs. A maintenance worker is assigned every 3.5km for routine
maintenance work of roads.
Regarding the coastal road, each office in charge of operation and maintenance of the
project sections and districts is well staffed and no particular problem was observed.

3.5.2 Technical Aspects of Operation and Maintenance

Coastal Road Project:
DPWH has developed and possesses various manuals including those for road
repair/maintenance, road maintenance activity, and road safety. For a newly employed staff,
training is undertaken using DPWH’s manuals and he is assigned to the field work. The routine
maintenance work has been undertaken by force account, and technicians and workers have
sufficient technical skills. The periodic maintenance work (such as replacement of expansion
joints) and major rehabilitation (such as overlay), which require special equipment and skills are
undertaken by contractors, who were selected through the competitive bidding process. The
District Engineering Office, in charge of the project sections and district, has regularly
undertaken training and prepared required manuals, and thus, there are no technical issue to
sustain the effects of the project.

Coastal Road (Causeway section) Coastal Road (Tunnel section)

3.5.3 Financial Aspects of Operation and Maintenance

Coastal Road Project:
The maintenance budget for routine maintenance of national roads including roads
constructed under the project is provided directly to a District Engineering Office
following the DPWH’s standard norm and formula. Concerning the 2013 budget, 67,387
peso/km/year from the DPWH general budget, and additional 24,745 peso /km/year
from the vehicle user charges, totaling about 92,000 peso/km/year is to be allocated to

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the roadway section. Budget of 30,700 peso/km/year is allocated to the bridge/viaduct
section (e.g. for old bridges). The maintenance cost spent by Cebu City District
Engineering Office for the project section for the past five years is shown in Table 5.

Table 5: Operation and Maintenance Cost (Coastal Road)

unit : peso
Operation and 2008 2009 2010 2011 2012
Maintenance Cost 45,773 196,334 438,988 469,195 149,960,270
Source: DPWH Regional Office VII
Note: Except in 2012, the work undertaken is repair of pavement and marking. Rehabilitation and improvement of
the causeway section was undertaken in 2012.

During ocular inspection in the field, no clacks on the pavement surface was observed, and
the pavement condition looked fine.

3.5.4 Current Status of Operation and Maintenance

Coastal Road Project:
Maintenance work has been undertaken at the following frequency.
▪ Repair of potholes: as potholes were identified.
▪ Repainting of markings: when the marking became indistinct.
▪ Grass cutting, road surface cleaning, and clearing ditches: undertaken regularly

Routine and periodic maintenance for roads constructed under the project has been properly
undertaken according to the maintenance manuals, and no issue was observed. As about ten
years have passed since the pavement of the coastal road was completed, roughness and
irregularity due to settlement became evident. In 2012, rehabilitation and improvement work
was implemented.

As mentioned above, since the reclamation project has not achieved its objectives, the
sustainability only on the coastal road project was discussed above. Regarding the coastal road
project, no major problems have been observed in institutional, technical and financial aspects
of the maintenance system. Therefore, sustainability of the project effect is considered high.

4. Conclusion, Lessons Learned and Recommendations

4.1 Conclusion
The objectives of the project were to attract enterprises and facilitate smooth traffic flow in
the urban area by reclaiming and developing new land for an industrial zone, and constructing a
coastal road, thereby contributing to promotion of the economic development in Metro Cebu.
The project was not highly relevant with the Philippines’ development plans and needs, and

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Japan’s ODA policy. Therefore, its relevance is fair. Regarding construction of a coastal road,
the project has contributed to smoothing the traffic flow in the urban area, since part of traffic
diverts to the coastal road, which was constructed under the project. However, the original idea
to attract foreign capital enterprises through establishing an industrial park in the reclaimed area
was not materialized after the Asian Financial Crisis. Thus, it was changed to invite local
enterprises and industry, and the development work including construction of building of
University of the Philippines, a shopping mall, apartments, and light industry factories has been
undertaken. However, as of today, only part of the area has been developed, and thus,
achievements of project objectives made are at a extremely limited level compared with the
original plans. Therefore, its effectiveness and impact is considered low. Although the project
cost was within the plan, the project period was significantly longer than planned. Therefore,
efficiency of the project is considered fair. Effects achieved by the project were made under the
coastal road project. No major problems have been observed in terms of institutional
management system, and technical and financial aspects for operation and maintenance,
therefore sustainability of the project effect by the coastal road project is high.

In light of above, the project is evaluated to be unsatisfactory.

4.2 Recommendations
4.2.1 Recommendations to the Executing Agency
In order to continue the social compensation program, it is essential to focus on the
development of the operational management capacity including business operation and
personnel management in addition to enhancement and development of technical capacity of
individual participants in each program. Particularly, under the group type programs such as the
livelihood assistance program, it is important to cultivate leaders who have business operational
management capacity (management, financing, personnel management, technical skills,
management vision and organizational skills).

4.2.2 Recommendations to JICA

None

4.3 Lessons Learned

1. Signing of loan agreements for two projects (reclamation and coastal road) was made in
1995. Thus, the ex-post evaluation is being done in 18 years after the loan signing date.
Under the project with the long implementation period, filing and archiving the relevant
project documents is quite often improperly managed by the implementing agency. JICA
needs to keep all the project documents in order, and to supervise so that a well spelled

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out project completion report is timely submitted upon loan expiration by the executing
agency. Moreover, JICA should provide more advice on preparation of the project
completion report and review more thoroughly so that the submitted report covers all the
information and data required.

2. It is likely that the weakness on viewpoints from the residents who live on the other side
facing the SRP affected quality of an EIA report, lack of consultation with residents and
improper monitoring during the operational stage. Thus, in preparation of an EIA, the
scope of analysis on potential impact items needs to be well studied. Moreover, even if
the impacts are not foreseen with proper countermeasures, risks should be well defined
and these risks needs to be monitored during the project implementation. JICA should
pay attention to these risks and request the project executing agency to monitor potential
risks which might take place during implementation.

3. At commencement of the project, the unreasonable/ unpragmatic changes and plans in

designs and implementation schedule were made including the following: i) reduction of
reclaimed area (due to construction of a pond) and change of borrow pits for sand for
reclamation (from sea sand to the soils/sand in Cebu Island) under the reclamation
project, and ii) the inappropriate/unpractical implementation schedule in which
construction of the coastal road was to be undertaken while reclamation work was under
implementation under the reclamation project. Moreover, during the project
implementation, changes on routes and type of roadway structures at the connecting
section with the existing city road were made under the coastal road project. Since these
changes are fundamental problems in terms of the project scope, it would be
questionable whether or not the technical review (including environmental aspects) at
the appraisal stage was adequate. Thus, it is considered that more thorough technical
appraisal should have been done at the appraisal stage inviting experts in each sector
(expertise required for this project includes environment, road, dredging/reclamation,
and construction management/planning).

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Comparison of the Original and Actual Scope of the Project
Reclamation Project
Item Original Actual
1. Project Output 1) Reclamation work for about 1)Reclaimed area: about 296ha
330 ha including revetment (among which the area for a
work of about 10.3km with a coastal road is about 24 ha.
reclamation volume of 13.6 Since a 61 ha pond is included
million m3 in the area, the actual
reclaimed area is about 235
ha. The length of revetment
work is about 9.2 km. The
reclaimed soil volume was
about 9 million m3.)
2) Additional work (a
management office in the
reclaimed area. roads/bridges,
a sewage treatment plant. a
desalination plant, major
electric facilities and others)
Consulting services 1) Review of detail designs as planned
2) Assistance in bidding activities
3) Construction supervision
4) Market research, management
study and investment
promotion study of the Cebu
Export Processing Zone

Foreign : 201 M/M Foreign : 206 M/M

Local : 834 M/M Local : 839 M/M
2. Project Period August 1995 -June 2000 August 1995 -December
(59 Months) 2004
(113 Months)
3. Project Cost
Amount paid in 9,333 million yen Unknown
Foreign currency
Amount paid in 7,087 million yen Unknown
Local currency
Total 16,420 million yen 12,860 million yen
Japanese ODA loan 12,315 million yen 12,292 million yen
portion
Exchange rate 1 Peso = 4.13 yen 1 Peso=1.85-2.24yen
(as of January 1995) (average between April 1997
and May 2004)

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Coastal Road Project
Item Original Actual
1. Project Output Construction of Cebu South Construction of Cebu South
Coastal Road (totaling 7.75km) Coastal Road (totaling 7.75km)
1) Causeway Section: construction 1) Causeway Section(Segment
of a 6-lane 4.02km highway 2): construction of a 6-lane
with two bridges with a total 4.02km highway and a 4-lane
length of 174m and a revetment 0.84 km highway with a total
work of 7.2km length of 4.86 km
2) Central Business District 2) Central Business District Section
Section (segment 3): (Segment 3): construction of a
construction of a 4-lane 4-lane 2.89 km highway
highway with a total length of including the viaduct section
3.73km including the viaduct with a total length of 1.62km
section with a total length of Segment 3 was divided into 3A
2.8km (viaduct section), 3B1
(approach section), and 3B2
(tunnel section), procurement
of works was made by 3
packages. However, 3B2
(tunnel section) was completed
with the own funds after the
loan was closed. (commenced
the work in June 2006 and
completed in October 2010.
3) Development of resettlement 3) Development of resettlement
sites sites
Consulting services 1) Review of detail designs 1)Review of detail designs
2) Assistance in bidding activities 2) Assistance in bidding activities
3) Construction supervision 3) Construction supervision
Consulting services on the 4) Feasibility Study and the
above services Detailed Design of structures
for Segment 3B2.

Foreign : 292 M/M Foreign : 470 M/M

Local : 1,260 M/M Local :2,294.5 M/M
2. Project Period August 1995-December 2000 August 1995 -October 2010
(65 Months) (183 Months)
3. Project Cost
Amount paid in 12,520 million yen 14,317 million yen
Foreign currency
Amount paid in 12,001 million yen 10,478 million yen
Local currency
Total 24,521 million yen 24,795 million yen
Japanese ODA loan 18,391 million yen 18,377 million yen
portion
Exchange rate 1 Peso = 4.13 yen 1 Peso = approx.1.9 yen
(as of January 1995) (average between January 1998-
October 2010)

Total of 2 projects (Reclamation and Coastal Road)

Project Cost
Total 40,941 million yen 37,655 million yen
Japanese ODA loan 30,706 million yen 30,669 million yen
portion

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