Afghanistan - Second Road Improvement and Maintenance Project

DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use FILE COPY Report No. 238a-AF APPRAISAL OF A SECOND ROAD IMPROVEMENT AND MAINTENANCE PROJECT AFGHANI STAN November 26, 1973 Regional Projects Department Europe, Middle East, and North Africa Regional Office This report was prepared for official use only by the Bank Group. It may not be published, quoted ot cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENTS Currency Unit = Afghani (Af) US$0.0192 = Af 1.00 US$1.00 = Af 52 US$19.230 Af 1 million SYSTEM5 OF WEIGHTS AND MEASURES: METRIC Metric System British/US System .1 meter (n) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (km2) = 0.387 square mile (sq mi) 1 metric ton (m ton) = 2 205 pounds (lb) 1 cubic meter (m)) = 2th.2 gallons (gal) ACRONYMS AND ABBREVIATIONS c.i.f - Cost, insurance and freight included ECAFE - Economic Commission for Asia and the Far East GrTD - General Transport Department ICAO - International Civil Aviation Organization Kamnsax - Kampmann, Kierulff & Saxild PDD - Provincial Development Department RCD - Road Construction Directorate ROND - Road Construction and Maintenance Department RED - Road Maintenance Directorate RMFD - Road Maintenance First Directorate UNDP - United Nations Development Programme UNOTC - United Nations Office for Technical Cooperation US - United States of America USSR - UThior, of Soviet Socialist Republics REPUBLIC OF AFGHANISTAN FISCAL YEAR March 22 to March 21  APPRAISAL OF A SECOND ROAD IKPROVEMENT AND MAINTENANCE PROJECT AFGHANISTAN CONTENTS Page No. SUMMARY AND CONCLUSIONS * . . * .........*............. i-iii Is INT1DDUCTION ...........************* .. ............... 1 II. THE TRANSPORTATION SECTOR .,.................*.......*. 1 A. The Country and-its Economy ........... 1 B. The Modes ......................... ............... ...... 1 C. Planning, Financing and Coordination .............. 3 ITT. HIGHWAYS , ............. .. ,,........... ................... 5 A. The Network **e***.........*.*.e*s*5 B. Characteristics and Growth of Traffic ....... ...... C. AdPinnistration ...... .............................. 7 D. Fiancing * ........................................ 8 Eo Fintancing .......................... 08 F. Engineering ........................................ 9 G. Ponstruction ..................... .............. 9 IV* THE PROJECT 12 As Description .......................... 12 B . Cost Estimates .... ...*......14............... ..... 1l C. Execution . ....... ................................. 16 D. Procurement ............* .... .... ... ... ... ..... ... . 16 E. Financing ........................... I.................... 17 F. Disbursements ......... ...................... . 17 V. ECONOMIC EVALUATION ................... ... 20 A. Main Benefits and Beneficiaries ......... ........... 20 B. Road Improvement and Maintenance ................... 20 VI. RECOMMESDATIONS ................................................. 22 This report was prepared by Messrs. Snorri Hallgrixsson (Engineer) and Nielo Erik Krogh-Poulsen (Economist).  CONTENTS (Continued) TABLES 1. Air Traffic on International and Main Domestic Airports, 1970-72 2. Expenditures in National Development Plan, 1957-76 3. Length of Highway Network, 1957, 1967 and 1972 4. Motor Vehicle Fleet, 1967 and 1970 5. Traffic through Selected Count Stations on Major Roads, 1966-71 6. Highway Revenues and Expenditures, 1967-71 7. Standards for Road Classes B, C, and D 8. Estimated First Year and Economic Returns of Roads in Road Improvement Program 9. Estimated Economic Returns of the Road Maintenance Program 10. Estimated Economic Returns of the Road Improvement Program 11. Estimated Economic Returns of the Road Improvement Program at Altermative Labor/Equipment Mixes ANNEX A. Previous Transportation Projects B. Estimated Schedule of Disbursements C. Basic Data and Assumptions used in the Economic Evaluation CHART Present Organization of the Road Maintenance First Directorate MAP Transportation Infrastructure  APPRAISAL OF A SECOND ROAD IMPROVEMENT AND MAINTENANCE PROJECT AFGHANISTAN SUMMARY AND CONCLUSIONS i. Afghanistan's transport system comprises highways, airports and rivers. The main mode is highways. The roughly circular road linking the main towns of Kabul in the east, Baghlan and Mazar-i-Sharif in the north, Herat in the west and Kandahar in the south is the main ar- tery. Trunk roads radiate from these towns into neighboring countries. Air transport serves all main towns and some isolated communities with no alternative means of transport. River transport is limited to the Amu Darya, which forms part of the border between Afghanistan and the Union of Soviet Socialist Republics (USSR). A 600 m rail line extends between the USSR border and Torghundi in Afghanistan. ii. The highway network, comprising about 20,900 km, has more than trebled over the last 15 years, and in terms of location and length is now largely adequate to serve expected land transport demand for the near future. However, many roads have substandard characteristics, lack- ing the capacity to handle traffic at reasonable cost. In addition, poor maintenance has caused many roads of originally adequate standards to deteriorate with resulting increases in transport cost. Improvement and proper maintenance of the network is essential if present and future transport requirements are to be met economically. iii. The Fourth Five-Year Development Plan (1972-76) includes an allocation of Af 2.6 billion for the transport sector, or about 6% of total proposed expenditures over the period. About Af 2 billion has been allocated to highways of which Af 0.9 billion, or about 47%, will be for improvement and maintenance works. iv. In early 19711 the Government asked the Association to help finance a road improvement and maintenance project for Eastern, Western and Southern Afghanistan identified through economic and engineering studies by the Danish consultants Kampmann, Kierulff & Saxild A/S (Kampsax). lhe studies were financed by the UNDP with the Bank as 1Sxecuting Agency. The project was appraised in May 1973. It will serve the most urgent needs of the highway sector by providing for improvement of a number of high priority roads; proper maintenance of the network; and strengthen- ing the capability for highway administration in the Ministry of Public 'Works (MPW). As unemployment is considerable, the project has been designed with a large labor input.  - ii - v. The proposed project would be the second credit for highways in Afghanistan and an extension of the first credit (158-AF, June 26, 1969, us$5.0 million) for an initial road maintenance project in Eastern Afghanistan, which provided finance for purchases of highway maintenance and workshop equipment, vehicles, spare parts, tools and materials. The first credit suffered delays from the Government's failure to ensure timely release of local funds, to provide qualified local counterparts and also from cumbersome local procurement methods. The severe droughts in 1970 and 1971, followed by a severe winter in 1971/72, aggravated the situation. Since early 1973, the situation has improved significantly with the appoint- ment of a capable manager of the Road Maintenance First Directorate (EMFD), the executing department. vi. The objectives of the project are to improve 35 road sections, totalling 1,832 km and to properly maintain an additional 2,233 km.. Main project items are: (a) purchase of equipment, spare parts and materials for improvement and maintenance; (b) construction and improvement of work- ahops and acquisition of workshop equipment; (c) technical assistance to the MPW and the Provincial Development Department (PDD), (d) training of personnel; and (e) programming of highway improvement and maintenance works and studies of priorities for Government-proposed highway construction works for the Fifth Five-Tear Development Plan Period (1977-81). vii. Including contingency allowances, taxes, and duties, the project cost is estimated at US$20.1 million with a foreign exchange component of US$10.9 million or 54%. The Association will finance US$9.5 million of the foreign cost 1/ and US$2.0 million of the local cost on the usual terms; the Government wiil finance the balance. The project cost was estimated on the basis of cost experience from similar works carried out by MPW during 1972-73. A project revolving fund to ensure availability of local financing will be established and replenished regularly by the Government; formal establishment of the fund is a condition of credit effectiveness. viii. The MPW will be responsible for carrying out the project, through the RNFD; it will be assisted by consultants and internationally recruited specialists, who will fill posts in the IMFD for which qualified Afghan staff is not available at present. The road improvement and maintenance program and the improvement of district workshops, which will be carried out by RMFD's own forces, is expected to start in March 1974. Purchases of foreign produced materials, except fuel, will be subject to international compe- titive bidding ir. accordance with the Bank Group's "Guidelines for Procurement"i. Construction of a regional workshop at Kabul will be awarded after local competitive bidding as the size (about US$1 million equivalent) and type o'L construction is not appropriate for international competitive bidding. Purchases of fuel and locally produced materials will follow the MNW's current procurement regulations. Training of RMFD staff will take place throughout the project period. 1/ Most fuels are ^|mported from the USSR and will not be financed by the credit.  - iii - ix. The economic analysis of the project was carried out with the