Nicaragua Compact

Nicaragua Transportation Project Evaluation

Project Description

The five-year, $175 million Nicaragua compact seeks to reduce transportation costs and improve rural communities’ access to markets, increase wages and profits from farming and related enterprises in the region and increase investments by strengthening property rights.  The compact included three Projects, a Property Regularization Project, a Rural Business Development Project and a Transportation Project. 

Political conditions leading up to, during, and following municipal elections of November 2008 in Nicaragua were inconsistent with MCC’s eligibility criteria. In June 2009, the MCC Board decided to terminate a portion of the Nicaragua compact, ceasing to fund assistance for the Property Regularization Project and for activities not already contracted under the Transportation Project. MCC has reduced the amount of funding available under the compact from $175 million to $113.5 million.

Post-termination, the Transportation Project was reduced to upgrading one primary road and two secondary roads. The total cost is $49.2 million to upgrade 71 kilometers in three road sections that will benefit approximately 97,110 beneficiaries living within 5 kilometers of the three upgraded roads.

Evaluation Description

The impact evaluation of the Transportation Project will seek to answer the following questions:

  • Does a reduction in transport costs and travel times lead to increased movement of goods and people on roads and increased access to goods and decreased costs of consumption, services and inputs?
  • Was the project cost effective, as analyzed through re-estimated economic rates of return, comparisons to original estimates, and assessment of impact?

A summary of the evaluation strategy is shown in the table below.

Data Collection

The evaluation will use price surveys.  Fundación Internacional para el Desafío Económico Global (FIDEG) conducted a survey of multiple market establishments in 33 communities in the summer of 2008 before road construction.  Construction was completed in January-March of 2010.  A follow up survey will be conducted in late 2010.  Some of these communities are near the 3 roads that were upgraded while others were not.  The price survey includes questions on access to and prices of basic products.