Roads Evaluations and Economic Analysis: Mongolia

Status: Ongoing

On September 28, 2017, the Millennium Challenge Corporation (MCC) issued a contract to International IDG to conduct an Economic Analysis and Independent Evaluation Services in Support of the Mongolia North-South (N-S) Road Project. The N-S Road Project was intended to improve a 176.4 km road section from Choir to the railway crossing outside the city of Sainshand, a segment of the N-S corridor connecting Russia at the northern border and China at the southern border. The evaluation, designed to understand the impact of the MCC-funded N-S Road Project on Mongolia’s economic growth, is an independent performance evaluation.

IDG conducted an independent performance evaluation of MCC’s N-S Road Project in Mongolia six years after the road completion. This performance evaluation adopted a mixed-methods approach with both quantitative and qualitative data collection. Primary data collection included a manual traffic count, an origin-destination survey, an axle load survey, a public transportation user survey, a vehicle operating costs survey, roadside establishment interviews, and a road roughness study. Additionally, key informant interviews were conducted with road maintenance stakeholders and transportation market stakeholders.

Region

  • Asia

Country / Countries

  • Mongolia
Asia

The evaluation is comprised of five Evaluation Areas:

  • Project design and implementation (EA 0): Review the initial design and the implementation process to inform the evaluation regarding how the project was implemented.
  • Engineering analysis and economic model (EA 1): Conduct a cost-benefit analysis and estimate the economic rate of return (ERR) and net present value (NPV) using Highway Development and Management (HDM-4).
  • Maintenance (EA 2): Update the road maintenance assumptions and understand the organizational factors of road maintenance practices and the effect of MCC’s efforts to improve the practices.
  • Road usage patterns (EA 3): Identify changes in road usage patterns by analyzing expanded origin-destination (O-D) survey data.
  • Transportation market structure (EA 4): Analyze the market structure to understand whether road improvements cost savings are passed onto transport consumers.

The evaluation used a mixed-methods approach, employing both quantitative and qualitative methods for the performance evaluation. The evaluation also used three different data methodologies. The evaluation team employed an economic modelling methods using HDM-4, a software system developed by the World Bank for road management, to model the Economic Rate of Return (ERR) on MCC’s investment in the N-S Road Project. The evaluation team also employed ex-post methodology to gather information about current conditions after the project intervention had been completed, referred to as the endline. Finally, pre-post methodology was used to generate a retroactive baseline and create a comparison with endline conditions at the time of data collection.

Areas of Expertise

Public Financial Management

IDG conducted a cost-benefit analysis of MCC’s investment in the N-S Road Project allowing MCC to compare the return on road investments consistently across countries and over time within. The evaluation is designed to better inform future road investment decisions for MCC.

Cost-benefit Analysis (CBA)

IDG conducted a cost-benefit analysis of MCC’s investment in the N-S Road Project to model the Economic Rate of Return (ERR) on using Highway Development and Management (HDM-4), a software system developed by the World Bank for road management.

Monitoring, Evaluation, and Learning

IDG conducted an independent performance evaluation of MCC’s N-S Road Project in Mongolia six years after the road completion. This performance evaluation adopted a mixed-methods approach with both quantitative and qualitative data collection.

Knowledge Management and Learning

To maximize learning from the evaluation, IDG prepared a briefing note based on the evaluation findings report in English and Mongolian. In addition to the presentations, the brief was aimed at targeting decision-makers within MCC and the Mongolian government and informing their decisions on future investments.