MCC Has Opportunities to Enhance Guidance and Tools for Sustaining Results of Road Infrastructure Compacts

Audit Report
Report Number
M-MCC-20-001-P

Recognizing the importance of navigable roads to economic development, MCC has invested approximately $2.7 billion in developing countries’ transportation sectors, 97 percent of it for roads. Because the sustainability of MCC road infrastructure projects is essential to their long-term impact, we assessed MCC’s processes for identifying and addressing risks to the sustainability of road projects.

Our audit of selected past MCC road infrastructure compacts that were initiated between 2006 and 2010 found that MCC identified risks to the sustainability of its road projects, but its efforts to mitigate or track the risks were inadequate in some cases. At the time MCC designed and developed the four compacts we reviewed, the agency did not have comprehensive guidance for staff on how to develop, implement, and track risk mitigation measures to ensure sustainability of road projects. Further, post-compact road inspections revealed roads in a variety of conditions. Some sections were in good to excellent condition, while other road sections were in poor condition. In addition, MCC had not fully developed guidelines to promote consistent application of economic analysis tools across road projects—a lesson from its review of past projects. MCC updated its guidance and tools to address risks to sustainability and require verification and tracking of data, but the guidance was still in draft. Until MCC finalizes its guidance, MCC staff will continue to face challenges in collecting quality information across all road projects and promoting the sustainability of road investments, project goals, and economic growth in partner countries. We made two recommendations to improve MCC’s ability to address risks to sustainability.

Recommendations

Recommendation 1

MCC - based on the lessons learned from MCC's "Principles into Practice: Lessons from MCC's Investments in Roads," develop guidelines to promote consistent application of economic analysis tools across road projects, and incorporate those guidelines into agency guidance.

Questioned Cost:
$0
Recommendation 2

MCC - finalize and officially issue "Road Development and Implementation Guidelines."

Questioned Cost:
$0