Chad - Second Highway Improvement Project

Report No. 381a-CD l FILE COPY Appraisal of a COPY Second Highway Project Chad May 28, 1974 Western Africa Projects Department Highways Division Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for officiai use only by the Bank Group. it may not be published, quoted or cited without Bank Group authonzation. The Bank Croup does not accept responsibihty for the accuracy or completeness ot the report.  Currency Equivalents Currency Unit = CFA franc (CFAF) US$1.00 = CFAF 250 CFAF 1 million = US$4,000. Fiscal Year: January 1 - December 31 System of Weights and Measures: Metric Metric British/US Equivalents 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) 2= 0.62 mile (mi) 1 square kilometer (km ) 0.386 square mile (sq mi) 1 hectare (ha) = 2.47 acres (ac) 1 kilogram (kg) = 2.2 pounds (lb) 1 metric ton (m ton) = 2,204 pounds (lb) 1 liter (1) = 0.26 US gallon (gal) = 0.22 British gallon (imp gal) Abbreviations and Acronyms ATT - Association des Transporteurs Tchadiens CSPC - Caisse de Stabilisation du Prix du Coton DPW - Directorate of Public Works ENTP - Ecole Nationale des Travaux Publics, N'djamena FAC - Fonds d'Aide et de Cooperation FED - Fonds Europeen de Developpement ONDR - Office National du Developpement Rural ORT - Organisation-Reconstruction-Travail (consultants, Saitzerland) USAID - United States Agency for International Development vpd - vehicles per day  CHAD APPRAISAL OF A SECOND HIGHWAY PROJECT Table of Contents Page No. SUMMARY ........... ................................. i - ii 1. INTRODUCTION ....................................... 2. THE TRANSPORT SECTOR ............................... 2 A. Background .................................... 2 B. The Transport System .......................... 2 C. Transport Planning, Policy, and Coordination .. 4 3. HIGHWAYS ............................... . 5 A. The Network ................................... 5 3. Characteristics and Growth of Road Traffic 5 C. The Road Transport Industrv ..... .............. 5 D. Administration ................................ 6 E. Planning and Financing ........................ 7 F. Engineering and Construction .... .............. 9 G. Maintenance ................................... 9 4. THE PROJECT ........................................ 10 A. Description ...... ............................. 10 - Improvement and Maintenance of Feeder Roads.. 10 - Preinvestment Studies for Secondary Roads ... il - Training Program for DPW Staff .... ......... il - Technical Assistance to the Ministry of Transport ................................ 12 - Traffic Counting Program .... ............... 12 - Reconditioning and Three-Year Interim Maintenance of Ferry-Boats .... ............ 12 - Feasibility Study for Replacement of Ferry- Boats and Improvement of Dock Facilities 12 B. Cost Estimates .............. .. ................ 13 C. Execution ................... .................. 14 D. Financing and Disbursements ........ .. ......... 16 This report has been prepared by Messrs. D. Jovanovic (Economist), E. Staffini (Engineer), and M. Iches (Engineer/Economist). The project was appraised in October/November 1973.  TABLE OF CONTENTS (Cont'd) Page No. 5. ECONOMIC EVALUATION ......................................... 17 A. General ................................................ 17 B. Cotton Development Program ............................. 17 C. Cotton Processing and Marketing ........................ 18 D. Impact of Improved Feeder Roads on Vehicle Operating Costs 19 E. Impact of Improved Feeder Roads on Cotton Production ... 19 P. Economic Return ........................................ 20 G. Other Major Project Elements .20 6. AGRFEMENTS REACHED AND REOMM!ENDATION ........................ 21 TABLES 1. Development of the Highway Network, 1970-73 2. Growth of the Vehicle Fleet, 1967-72 3. Expenditures on Highways, 1968-73 4. Government Revenues from Road Users, 1969-73 5. Project Cost Estimates 6. List of Equipment to be Procured, and Cost Estimate 7. Estimated Schedule of Disbursements 8. Cotton Development Plan Production Targets 9. Estimate of Vehicle Operating Costs 10. -Estimated Costs and Benefits of the Feeder Road Program 11. Estimated Economic Return from Improving Cotton Feeder Roads MAPS Chad - Second Highway Project - IBRD 10845 Feeder Roads Project Area - IBRD 10846  GHAD APPRAISAL OF A SECOND HIGHWAY PROJECT SUMMARY i. The Republic of Chad is a vast, landlocked country whach is generally considered one of the poorest in Africa. The economy is based primarily on agriculture which accounts for about 47% of GDP; cotton is the main export commodity, contributing almost three-quarters of total export earnings. Export-import trade depends on long routes outside the country, as the principal economic centers are located at an average dis- tance of 2,000 km from the nearest ocean ports. External transport is therefore an important factor to the economy, since the high costs of transport make exports less competitive, and also inflate the domestic prices of imports. ii. The transport system is a simple one, with roads by far the pre- dominant mode; air and water transport have only minor local significance. The road network consists of about 7,200 km of classified roads (only 240 km are paved), and about 25,000 km cf earth tracks which provide connections to agricultural areas. The distribution of the network is quite uneven, covering mainly the south and south-west where almost all the cotton is produced and where economic activity is located. The condition of the net- work is generally poor; inadequate budget allocations allow maintenance only of primary roads, leaving important feeder roads in the cotton-growing areas not even minimally maintained. iii. The Bank Group's first lending to Chad for transport (Credit 125-CD, US$4.1 million, August 1968) helped finance a project directed at improving road maintenance. It consisted of: (i) a five-year maintenance program, including provision for purchase of equipment and training of operators and mechanics, (ii) a feasibility study of the Djermaya-Djimtilo road (82 km) with detailed engineering if justified, and (iii) a program of road traffic counts. Some difficulties were encountered in executing the maintenance program, primarily due to delays in procuring equipment, and the Government's inability to make adequate local funds available, but it was completed in December 1973. The training program was not implemented as planned, however, because the consultants' proposal exceeded the amount provided in the Credit, and the Government requested that it be dropped from the project. The other two items were executed satisfactorily, but detailed engineering for the Djermaya-Djimtilo road was considered premature. iv. The Second Highway Project now proposed consists of: (i) a five- year program for improvement and maintenance of about 800 km of feeder roads in cotton-growing areas; (ii) preinvestment studies for about 120 km of sec- ondary roads; (iii) a two-year training program for staff of the Directorate of Public Works (DPW); (iv) technical assistance to the Ministry of Transport for reorganization of the road transport industry; (v) a two-year traffic  - ji - count on about 2,000 km of the most important roads; and (vi) the reconditioning and three-year interim maintenance of nine ferry-boats serving the cotton areas, and a feasibility study for eventual replacement of these boats and for improve- ments of dock facilities. The total cost of the project, net of taxes, is esti- mated at US$3.5 million equivalent, with foreign costs of about US$2.65 million (76%). In view of the severe budgetaiy constraints and general economic prob- lems of the country which are being aggravated by the continuing severe drought, it is proposed that the Association finance 100% of the project cost, net of taxes. v. Execution of the project will be primarily the responsibility of DPW assisted by consultants, most likely BOEOM (France) for the preinvestment studies, and ORT (Switzerland) for the training program. Since both consul- tants had been employed for these items under the first project and have done the necessary preparation work, the Government is planning, and the Associa- tion agrees, that they should be retained for the present project. The Ministry of Transport will be responsible for the technical assistance to study the road transport industry. Traffic counts will be carried out by DPW. An outside expert will be in charge of the improvement and maintenance of feeder roads for the first two years of the project; this responsibility will then be gradually turned over to a Chadian counterpart technician who will take over the expert's duties for the remainder of the project period. Reconditioning and maintenance of ferry-boats will be carried out by DPW, and the feasibility study by a consultant expert over a three-month period. vi. Direct responsibility for project execution of improvement and maintenance work on the 800 km of cotton feeder roads will be entrusted to COTONTCHAD, a Government-controlled company with mixed capital which has the monopoly for processing and marketing of cotton. COTONTCHAD and DPW vill be expected to enter into a management contract which would specify their respective duties and responsibilities. Essentially, DPW will own and supply the equip- ment purchased under the project, while COTONTCHAD will provide the personnel needed for the work teams and for equipment maintenance. The amount of equip- ment to be purchased will be consistent with the scope of work to be carried out. Road maintenance and ferry-boat equipment will be procured on the basis of international competitive bidding in accordance with Bank Group guidelines; in addition to the bid price, bid evaluation will take into consideration the compatibility of the equipment, and the availability of service and spare parts. Materials and workshop equipment and tools will be purchased following local advertisement only, since this procedure is considered more efficient to enable continuous execution of the project. The improvement and maintenance works will be carried out by force account, since it has been determined that this method will provide the least-cost solution. The basis for the management con- tract has been discussed and agreed with the Government; the Association will review and approve the contract before it is signed. vii. The proposed project is not only an operation in the transport sector, since the feeder roads proposed for improvement and maintenance are a component of a broader program for agricultural development in southern Chad. The economic analysis therefore takes into account the probable impact of these  - iii - roads on cotton production in the project area, and on this basis, the best estimate of the economic return is about 18%. Other project items are consist- ent with priorities set by the Government and the Association. viii. The project is suitable for a Credit of US$3.5 million equivalent to the Government of Chad on standard IDA terms.   CHAD APPRAISAL OF A SECOND HIGHWAY PROJECT 1. INTRODUCTION 1.01 The proposed project has evolved from a Covernment request to the Association for a contribution to a five-year (1973-77) Cotton Development Program in southern Chad; the financial participation of the Fonds Europeen de Developpement (FED) and the Fonds d'Aide et de Cooperation (FAC) has already been assured. Terms of reference for a FAC-financed feasibility study of roads in the cotton-growing areas were prepared by the Bank's Permanent Mission in West Africa (PMWA), and the study was completed in 1973 by consultants BCEOM (France). 1.02 This Second Highway Project is intended to support the cotton program, and consists of: (a) a five-year program for improvement and main- tenance of about 800 km of feeder roads in cotton-growing areas; (b) preinvest- ment studies for improvement of about 120 km of secondary roads; (c) a two-year training program for staff of the Directorate of Public Works (DPW); (d) tech- nical assistance to the Ministry of Transport for reorganization of the road transport industry; (e) a two-year program of traffic counts on about 2,000 km of the most important roads; and (f) the reconditioning and three-year interim maintenance of nine ferry-boats, and a feasibility study for ferry-boat replacement and improvements of dock facilities. The total cost of the pro- posed project, excluding taxes, is estimated at about US$3.5 million equivalent, with foreign costs of about US$2.65 million (76%). IDA financing is proposed to cover 100% of the total cost of the project, net of taxes. 1.03 The only other Bank Group lending operation in Chad's transport sector was a Credit (125-CD, US$4.1 million, August 1968) which helped finance: (a) a five-year highway maintenance program, including provision for purchase of equipment and training of operators and mechanics; (b) a feasibility study of the Djermaya-Djimtilo road (82 km), with detailed engineering if justified: and (c) a program of road traffic counts. There was an initial delay in procuring equipment for the maintenance program, but since then progress was fairly satisfactory despite the effects of the present drought and the reduced availability of maintenance funds forced by Government budgetary constraints. The five-year program was completed in December 1973, but the Closing Date of the project has been extended to December 31, 1974 to allow payment of some outstanding disbursements and use of the Credit balance for procurement of some additional equipment. The training program proposed by consultants ORT (Switzerland) was a costly one which exceeded the amount provided in the Credit, especially in view of the adverse impact of currency realignments; this program was therefore dropped from the project at the Oovernment's request. The feasibility study for the Djermaya-Djimtilo road was completed satisfactorilv, but detailed engineering was considered premature. Traffic counts were carried out in 1970 by DPW with BCEOM assistance as envisaged; these counts will be continued under the proposed project.  - 2 - 1.04 This report is based on the feasibility study mentioned in para. 1.01, and on the findings of an appraisal mission composed of Messrs. D. Jovanovic (Economist), E. Staffini (Engineer), and M. Iches (Engineer/ Economist) which visited Chad in October/November 1973 and of a follow-up mission by Mr. Staffini in March 1974. 2. THE TRANSPORT SECTOR A. Background 2.01 Chad is a vast (1.3 million km2) landlocked country In central Africa. The entire north and east, about 90% of the total area, is mainly Sahelian grassland and desert; agriculture is therefore concentrated in the south and in the basin of the Chari and Logon