Benin - Third Highway Project

FILE COPY Report No. 1S06-4EN Appraisal of a Third Highway Project People's Republic of Benin October 25, 1977 Western Africa Projects Department Highways Division FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit: CFA Francs (CFAF) US$1.00 = CFAF 245 CFAF I million = US$4,081 Fiscal Year January 1 - December 31 System of Weights and Measures: Metric Metric US Equivalents I meter (m) 2 3.28 feet (ft) I square meter (! ) 10.76 square feet (sq. ft.) I cubic meter (m ) 35.30 cubic feet (cu ft) 1 kilometer (km) 2 0.62 mile (mi) I square kilometer (km ) 0.39 square mile (sq. mi) 1 hectare (ha) 2.47 acres 1 metric ton (t) 2,205 pounds (lb) Abbreviations and Acronyms BADEA Arab Bank for Economic Development in Africa CEBTP Centre d'Experimentation du Batiment et des Travaux Publics CIDA Canadian International Development Agency CNERTP Centre National d'Essais et de Recherches des Travaux Publics DLT Directorate of Land Transport DRB Directorate of Roads and Bridges DSP Directorate of Studies and Planning EDF European Development Fund FAC Fonds d'Aide et de Cooperation HMCS Highway Maintenance Coordination Service IDA International Development Association ME Ministry of Equipment MT Ministry of Transport NORAD Norwegian Aid Agency OCBN Organization Commune Benin-Niger des Chemins de Fer et des Transports SNWS Studies and New Works Service STI Services des Techniques Industrielles UNDP United Nations Development Programme USAID United States Agency for International Development vpd vehicles per day  FOR OFFICIAL USE ONLY PEOPLE'S REPUBLIC OF BENIN APPRAISAL OF A THIRD HIGHWAY PROJECT TABLE OF CONTENTS Page No. SUMMARY ........................................... . ... ..iV 1. INTRODUCTION ........... ............................... 1 2. THE TRANSPORT SECTOR ...... ...................... . 2 A. Economic Setting ................................. 2 B. The Transport System ........ . . ............................ . 3 C. Transport Administration and Coordination ........ 6 D. Transport Investment and Financing .... ........... 6 3. HIGHWAY SUBSECTOR ........................... . ........... . . . 7 A. The Road Network ................................. 7 B. Vehicle Fleet and Road Traffic ................ .. . 8 C. Administration ...... ....................... . 9 D. Staffing and Training ................. .......... . 9 E. The Road Transport Industry ...................... 10 F. Engineering and Procurement ...................... 11 G. The Road Construction Industry ................ ... 11 H. Maintenance ...................................... 12 I. Financing ........................................ 13 4. THE PROJECT ............... . ..................... . ..... 15 A. Description ...... 99*......0.................... .9496998900....... 15 B. Cost Estimates ........... .. . .......................... 19 C. Execution and Procurement ......... ............... 20 D. Financing and Disbursement ....... ................ 21 E. Project Monitoring ... ..... ......... ..... . . . . . 22 5. ECONOMIC APPRAISAL .................... q*_ *es .... 23 A. General . ................* .................... . 23 B. Rehabilitation of the Godomey-Bohicon-Abomey Road. 23 C. Bituminous Road Resurfacing ...................... 26 D. Resurfacing of Laterite Roads ........... . ......... 27 E. Distribution of Benefits ......................... 28 6. AGREEMENTS REACHED AND RECOMMENDATION .................. 28 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -2- TABLES 1. Fuel Consumption, 1970-1976 2. Transport Investments by Subsector, 1970-1975 and Planned Investments, 1976-1980 3. Highway Network, 1976 4. Motor Vehicle Fleet 1967, 1970 and 1975 5. Expenditures for Roads, 1970-1975, and their Financing 6. Government Revenues from Road Users, 1975 7. Design Standards for Godomey-Bohicon-Abomey Road 8. Bituminous Roads Needing Resurfacing, their Traffic in 1976 and Expected Traffic Growth, 1978-1986 9. Laterite Roads Needing Resurfacing, their Traffic in 1976 and Expected Traffic Growth, 1978-1986 10. Spare Part Requirements for Equipment Rehabilitation and Stock Increase 11. Equipment for Resurfacing Brigades for Laterite Roads 12. Cost Estimates, Net of Taxes, at July 1977 Prices (item by item) 13. Cost Estimates, Net of Taxes, at July 1977 Prices (functional classification) 14. Estimated Schedule of Disbursements 15. Economic Appraisal Godomey-Abomey 16. Bituminous Roads Resurfacing, Cost and Benefit Streams, 1979-1986, Rate of Return and Benefit/Cost Ratio Road by Road 17. Resurfacing of Laterite Roads, Cost and Benefit Streams, 1979-1986, Rate of Return and Benefit/Cost Ratio Road by Road 18. Sensitivity Analysis, Resurfacing of Bituminous and Laterite Roads 19. Estimate of 1976 Traffic on Godomey-Abomey by Category of Vehicle and by Road Section ANNEXES I. Training Program II. Tables on Economic Appraisal: Resurfacing of Bituminous Roads III. Tables on Economic Appraisal: Resurfacing of Laterite Roads CHARTS EXHIBIT I - Organization of DRB, 1976 EXHIBIT II - Traffic by Road Section on Godomey-Abomey, 1976 MAP  PEOPLE'S REPUBLIC OF BENIN APPRAISAL OF A THIRD HIGHWAY PROJECT Summary i. With a per capita gross domestic product (GDP) of about US$130, Benin is ranked as one of the poorest countries in the world. Agricul- ture is the mainstay of Benin's population. Due largely to Benin's role in handling substantial amounts of transit trade for Niger and Nigeria, trade and transport are the most important economic activities. Together with public administration and other services, they contribute more than half of total GNP. Whereas agriculture employs about 70% of the labor force, the rural sector's share of GNP is only about one-third. Aware of this imbalance, the Government has begun to place greater emphasis on agriculture and rural development. ii. The principal transport artery in the country is the Benin route, which consists of the railway linking the port of Cotonou with Parakou (438 km) and a paved road (320 km) stretching from Parakou to Malanville on the Niger border. Transport along this route is managed by the Organisation Commune Benin-Niger des Chemins de Fer et des Transports (OCBN), a financially autonomous agency established in 1959 by the governments of Benin and Niger. OCBN is also responsible for running two other railway lines: the Western Coastal Line (34 km) and the Eastern Coastal Line (107 km). These two lines carry mainly passenger traffic. Under Credit 215-DA, these two coastal lines were scheduled to be closed to traffic within one year after completion of rehabilitation of the highways paralleling the lines. The rehabilitation work has been completed, but the Association has agreed to the lines' remaining open since the rates cover marginal costs and no new investments are being made in the Western line. Since a clinker plant is being built at Onigbolo, the prospects for the future of the Eastern Line will improve. Therefore, the Association and the Government have agreed to waive the provision of section 4.14 of Credit 215-DA. iii. Benin is acting to maintain or improve the competitive advantage of the Benin route over alternative routes through Nigeria, Togo, Ghana and the Ivory Coast. The highway from Cotonou to Parakou is being upgraded under the Association's Second Highway Project and the handling of goods has improved at transfer points (port of Cotonou and Parakou). An extension of the port of Cotonou is envisaged in cooperation with the Association and other foreign sources of financing. iv. Between 1970 and 1975 about CFAF 9.0 billion (US$37 million) was invested in the transport sector. More than double that amount (CFAF 24.1 billion or US$98 million) is planned for investment during 1976-80. The highway sector has absorbed and will continue to absorb a major portion of transport investment. Highway investments averaged CFAF 1.3 billion (US$5 million) in the 1970-1975 period and amounted to CFAF 2.3 billion (US$9 million) in 1975. Expenditures for new roads are estimated to have  - ii - been CFAF 5.5 billion (US$22 million) in 1976 alone, primarily due to con- struction by Nigeria of the first coastal link with Lagos and to IDA and USAID disbursements for Parakou-Malanville under the Second Highway Project. Road maintenance expenditures declined from CFAF 474 million in 1972 to an average of CFAF 403 million per year in the 1973-1975 period. In the 1970-76 period, 73% of Government expenditures for roads, including road maintenance, and 89% of road investments were financed from foreign sources (IDA 27%, Nigeria 26%, EDF 18%, USAID 16%, FAC 2%). v. The proposed project, as well as all previous highway projects in the People's Republic of Benin (formerly the Republic of Dahomey), has evolved from the Dahomey Land Transport Study of 1969 financed by UNDP with the Bank Group acting as executing agency. The study was carried out jointly by two Canadian consulting firms. It led to a highway maintenance and engineering project in 1970 (Credit 215-DA, US$3.5 million) and later to a major highway construction project including further technical assistance for highway maintenance (Credit 415-DA, US$11.8 million, 1973, later increased to US$20.8 million to cover cost overruns) with parallel financing from USAID (US$12.0 million). vi. The only other lending operation by the Association involving the transport sector in Benin was the 1972 Zou-Borgou cotton development scheme (Credit 307-DA, US$6.1 million), including US$630,000 for improvement of about 620 km of agricultural feeder roads, only part of which were completed because of cost overruns on other items. A Feeder Road Project, approved by the Board on May 31, 1977, will maintain 1,270 km of feeder roads and set up the finan- cial and institutional framework needed to assure permanent up-keep of those and other feeder roads in the country. The Association is also processing a port extension project in cooperation with other aid agencies. vii. The proposed Third Highway Project consists of: (a) rehabilitation of the Godomey-Bohicon-Abomey road (107 km) including detailed engineering and super- vision of construction; (b) resurfacing of about 195 km of bituminous roads; (c) resurfacing of about 273 km of laterite roads; (d) (i) strengthening of the ongoing routine maintenance program through purchase of small amounts of addi- tional equipment and some spare parts to increase the stock at STI in Cotonou and to improve the utilization rate of existing equipment, and (ii) providing materials for construction of office space for DSP;  - iii - (e) technical assistance and fellowships to the Directorate of Roads and Bridges in the Ministry of Equipment for the preparation of the maintenance elements of the proposed and future projects and for further strengthening of road maintenance planning and staff training; (f) technical assistance and fellowships to the Directorate of Studies and Planning in the Ministry of Transport to enable it to strengthen its organization and to widen the scope of its activities; and (g) preinvestment study of the Ouidah-Allada road (40 km). viii. The Godomey-Bohicon road is a part of the main north-south artery originally constructed between 11 and 16 years ago with FAC financing. It carries from 500 to 1,200 vpd. The road is now badly deteriorated. The resurfacing would contribute to eliminating a substantial maintenance backlog. Bituminous and laterite roads selected for resurfacing have been in service for six or more years and have had neither a new surface treatment nor a new layer of laterite. Patching and repair of shoulders and drainage structures of bituminous roads will be done by force account with the help of a new patching unit. Two resurfacing brigades will be reactivated to carry out the works on the approximately 273 km of laterite roads to be resurfaced. Rehabi- litated and some new equipment will be used. ix. The total cost of the project (net of taxes and duties but includ- ing contingencies) is estimated at about US$21.3 million equivalent, with foreign costs of about US$17.0 million (80%). IDA and the Government are financing items (b) through (g). The total cost of these items is US$11.0 million, of which IDA will provide US$10.0 million and the Government US$1.0 million. The Kuwait Fund, the OPEC Fund and the Government are financing item (a). The total cost of this item is US$10.3 million, of which the Kuwait Fund will provide US$7.0 million, the OPEC Fund US$1.6 million, and the Government US$1.7 million. x. Contractors, selected on the basis of international competitive bidding and in accordance with Bank Group guidelines, will resurface the bituminous roads. Construction works for DSP office in Cotonou (under US$50,000) and materials for the regraveling brigades will be awarded follow- ing local advertising and competitive bidding in accordance with procurement procedures of the Government satisfactory to the Association. Most equipment and spare parts for brigades and workshops will be procured on the basis of international competitive bidding. Items costing under US$10,000 may be procured on the basis of quotations obtained locally; the total amount of such purchases should not exceed US$200,000. xi. The economic rate of return of the rehabilitation of the Godomey- Bohicon-Abomey road is about 35%. The economic return of the resurfacing  - iv - of bituminous roads is 155% with a benefit/cost ratio of 7.3 at a 12% dis- count rate. Resurfacing of laterite roads would yield a rate of return of about 54% and a benefit/cost ratio of 2.1. The overall rate of return on the project will be about 75%. xii. The proposed project is suitable for a Credit to the People's Republic of Benin in the amount of US$10.0 million on standard IDA terms.  PEOPLE'S REPUBLIC OF BENIN APPRAISAL OF A THIR) HIGHWAY PROJECT 1. INTRODUCTION 1.01 The proposed project, as well as all previous highway projects in the People's Republic of Benin (formerly the Republic of Dahomey), has evolved from the Dahomey Land Transport Study of 1969 financed by UNDP with the Bank Group acting as executing agency. The study was carried out jointly by two Canadian consulting firms, Lamarre Valois International Ltd. and N.D. Lea and Associates. It led to a highway maintenance and engineering project in 1970 (Credit 215-DA, US$3.5 million) and later to a major highway construc- tion project including further technical assistance for highway maintenance (Credit 415-DA, US$11.8 million, 1973, later increased to US$20.8 million to cover cost overruns) with parallel financing from USAID (US$12.0 million). The highway maintenance elements of these projects concentrated on maintenance of laterite roads and building the institutions necessary to execute such maintenance efficiently. The other element was engineering and construction of the Parakou-Malanville road, linking the railhead of the Cotonou-Parakou railway with Niger, and two small sections of the Godomey-Bohicon road. The First Highway Project was successfully completed in December 1975. The Project Completion Report was issued June 3, 1976. 1.02 Implementation of the construction work under the Second Highway Project has been generally satisfactory although a supplementary credit of US$9.0 million was required to meet cost overruns due to higher than expected inflation. The institution building elements of the project have also been generally successful. However, since 1974 budgetary problems have plagued the maintenance element of the project. Equipment repairs have often not been made because of lack of spare parts, and equipment in operating order has often been under-utilized because of lack of fuel. Government outlays for maintenance decreased, in spite of rapidly rising costs, because of growing commitments for new construction. The Government has, at times, even had trouble meeting the Directorate of Roads and Bridges (DRB) payroll. 1.03 The only other IDA operations in the transport sector were the 1972 Zou-Borgou cotton development scheme (Credit 307-DA, US$6.1 million), which included US$630,000 for improvement of 620 km of agricultural feeder roads and a feeder roads project approved by the Board on May 31, 1977. Under the latter, the Government intends to maintain 1,270 km of feeder roads and to set up the financial and institutional framework needed to assure permanent upkeep of those and other feeder roads in the country. A port project to expand the capacity of the port of Cotonou is being prepared in cooperation with other co-financers (FAC, CIDA, BADEA, NORAD, African Development Bank, etc.). 1.04 The total cost of the proposed project is about US$21.3 million, net of taxes, with a foreign exchange cost of about US$17.0 million. The proposed Credit provides US$10.0 million or 47% of the total project cost. The remainder is to be financed by the Kuwait Development Fund (KDF) and the OPEC Special Fund (40%) and the Government (13%).  - 2 - 1.05 This report is based on preparatory work by consultants Lamarre Valois International Ltd. and the Government, and on the findings of appraisal and follow-up missions by Adhemar Byl (economist) and Steven Majtenyi (engineer). The missions visited Benin in July and December 1976. Pierre Sooh (engineer) assisted in the preparation of this report. 2. THE TRANSPORT SECTOR A. Economic Setting 2.01 Benin is a long, narrow country (112,600 km ) on the West Coast of Africa between Togo to the west and Nigeria to the east. On the north it is bordered by Upper Volta and Niger, two landlocked countries. Benin's road and rail network provides the major transit route to the sea for Niger. 2.02 The population, about 3.1 million, is growing at about 2.8% per year. Th average population density is high by2African standards (about 25 per km ), especially in the south (120 per km ), where the road and rail networks are correspondingly densest. 2.03 Benin, with a per capita GDP of about US$130, is classified by the United Nations as one of the world's poorest countries. While about 70% of the labor force is employed in agricultural activities, the rural sector's share of GNP is only about one-third of the total. As a result, the income of the rural population (US$60 per capita) is considerably below the national aver- age. The urban population, with 20% of the labor force, accounted for about 60% of GNP in 1973 and traditionally has been the main beneficiary of public spending. However, the Government, in an effort to balance the distribution of its expenditures, has begun to place greater emphasis on agriculture and rural development, including feeder roads. 2.04 Benin's economy depends predominantly on agriculture (cotton, cocoa, palm oil, karite butter, groundnuts and coffee) and on exceptionally large transport and trade sectors, because of the subtantial transit trade with Niger and Nigeria, for which Benin acts as intermediary and as supplier of warehousing services. Although some further growth in port, warehouse and transport services for Nigeria is likely, the Government expects that the major contributors to renewed economic growth will be increased agricultural production and processing, further import substitution and new industries exploiting domestic raw materials such as clinker. 2.05 The last development plan in Benin, which was called the "interim plan," covered the period 1971-72. Since the "Revolutionary Military Govern- ment" took office in 1972, a considerable amount of reorganization has taken place. The Government is preparing a new development plan but so far no data have been released. The last economic mission of the Bank Group published its report (191a-DA) on August 20, 1973, and consequently there is a lack of economic information on which to base reliable forecasts. An economic mission was scheduled to visit Benin in mid-1977.  -3- B. The Transport System 2.06 The transport system of Benin is simple, but fairly well developed, and centered around Cotonou, where the only seaport and the only international airport are located. The backbone of the system is the Benin route, which consists of a railway linking the deep-water port of Cotonou with Parakou, 438 km to the north, and a 320 km paved road, recently reconstructed to two- lane standard, which links Parakou to Malanville on the Niger border. The rest of Benin's transport network radiates from this main axis. The coastal road linking Cotonou with Lome (Togo) and with Lagos (Nigeria) is the other major paved road in the country. This coastal road runs parallel to the railway lines from Cotonou to Segboroue (the Western Line, 34 km) and from Cotonou via Porto Novo, the official capital and administrative center 1/, to Pobe (the Eastern Line, 107 km, 30 km of which lie along the coast, the remainder running toward the northeast). (a) Highways 2.07 The highway network is briefly described below as part of the Benin Route and in Chapter 3. (b) The Benin Route and Other Railway Lines 2.08 OCBN (Organisation Commune Benin-Niger des Chemins de Fer et des Transports) is a financially autonomous agency, established in 1959 jointly by the Governments of Niger and Benin to manage transport on the Benin Route and on the other railway lines in the country. Its activities consist of operating the Cotonou-Parakou Central Railway Line and the char- tering of trucking services between Parakou and Niger. OCBN is not only a railroad company, but also the major freight charterer in northern Benin, with a monopoly for Niger transit traffic. 2/ It is thus the de facto coordinator of transport. OCBN also operates the Cotonou-Segboroue and Cotonou-Pobe railway lines, which carry mainly passengers and little freight (para. 2.13). It is the largest employer in the country after the Government. Total railway freight traffic is estimated at about 80 million ton-km. 2.09 According to section 4.14 of Credit 215-DA, the two coastal lines were scheduled to be closed to all traffic within one year following the 1/ Cotonou, the major commercial center, is slowly becoming the de facto capital. The presidential palace and many Government departments are already located there. 2/ General cargo is presently apportioned out two-thirds to truckers from Niger and one-third to truckers from Benin (the latter, until recently, were almost all private). Fuel oil products are all carried by truckers from Niger.  -4- completion of rehabilitation of the highways paralleling these lines, except for traffic necessary for the operation of the palm-oil processing plant at Ahozon (4 km beyond the Pahcu branch off), and unless the Government and the Asssociation agreed that a substantial increase in traffic on the Cotonou-Pobe line dictated otherwise. 2.10 Rehabilitation of the highways has been completed, but at the end of 1973 the Association agreed to postpone closure of the Western Coastal Line until January 1, 1976 on condition that no capital expenditures be made on that line and the rates be adjusted to eliminate deficits in its operation. Although the Government, for social reasons, has continued limited service on this line beyond January 1, 1976, it is not investing in it and the rates cover marginal cost. 2.11 The Government intends to extend the Eastern Line to a planned clinker plant in Onigbolo (20 km). The plant will be operated by a multina- tional (Benin-Nigeria) company, the creation of which has been officially announced. The extension of the railway line will permit the transport of clinker to a cement plant in Cotonou and to the port for export. Since the clinker plant is being built, OCBN has been allowed to continue operations on the Eastern Line. OCBN is following a prudent investment policy, its management has improved and the organization is at least covering the marginal costs of its operations. To reflect this new situation the Government and the Association have agreed to waive the provision of Section 4.14 of Credit 215-DA requiring the closure of the western and eastern railway lines. 2.12 According to a recent Regional Transportation Study in countries belonging to the "Conseil de l'Entente" and in Ghana 1/, the present freight rates on the Benin route are still competitive with an alternative route through Togo. This competitive edge is expected to remain intact even after the axis through Togo has been completely paved (expected in early 1980's) and after taxes now levied at the Upper Volta border (3% transit tax and 0.5% fonds de garantie tax, both ad valorem) have been abolished. 2.13 To avoid competition with the railway, until recently the Benin Government discouraged the construction of the Bohicon-Parakou road beyond laterite standards and only allowed passenger cars and light trucks to use the two railroad bridges which are sole means of crossing the Zou and Oueme rivers. (Under special circumstances heavier vehicles were allowed to use the bridges after payment of high levies to cover the cost of a protective deck laid down every time they crossed). This kept non-rail traffic to a minimum on the lower portion of the Benin route. Recently, however, the Government decided to alter the railroad bridges to enable them to carry road traffic without special precautions. Also, at the Government's request, the 1/ F.R. Laberge and Associates, Consultants, Montreal, 2 volumes, final report, June 1976.  European Development Fund (EDF) agreed to finance the paving of the first section (Bohicon-Dassa Zoume) of the unpaved road link between Bohicon and Parakou. The agreement with EDF also includes feasibility and final engineer- ing studies of the Dassa Zoume-Parakou section; it is likely that that section will be constructed under the Fifth EDF, i.e. in the early 1980s. This will then complete a bituminous road parallel to the OCBN railroad over its entire length. The terms of reference of the technical assistance to DSP will include the study of the consequences of this new situation (para 4.13). (c) The Seaport of Cotonou and Maritime Shipping 2.14 The deepwater port of Cotonou has an annual capacity of about 500,000 tons of general cargo and almost as much bulk cargo (petroleum, vegetable oil and clinker). The port is managed by an autonomous port authority; cargo handling is entrusted to another autonomous Government-owned agency, the Office Beninois des Manutentions Portuaires (OBEMAP). Port management needs improvement and tariffs need to be reviewed to allow the Port Authority and OBEMAP to take part in the investment effort needed for the port. 2.15 Since the construction of the port in 1965, traffic has increased at an average rate of 8.3% per annum, from 369,000 tons in 1966 to more than 755,000 tons in 1975 (of which more than 85% was imports). Imports of fuel and clinker alone account for more than half. of all port traffic. In the first six months of 1976 traffic reached about 960,000 tons, or about the port's estimated capacity. About 50% of this traffic is for Niger and Nigeria. The Government anticipates being able to continue handling Nigerian transit traffic, and discussions to this effect are being held in the framework of the proposed First Port Project. (d) Air Transport 2.16 The international airport of Cotonou is used by the major air carriers operating in the region. Total passenger traffic has been between 70,000 and 80,000 per year since 1972. Freight traffic is less than 3,500 tons per year. Aviation fuel consumption decreased from 8,000 cubic meters in 1970 to 4,000 cubic meters in 1975 (Table 1). 2.17 Benin has five small secondary airfields but, given the size of the country, domestic air transport is not very important. A US$35 million project to relocate the Cotonou airport and to modernize the airport at Parakou, the most important of the secondary airfields, is envisaged by the Government, but considering its high cost and the lack of financing it is not likely to materialize in the near future. 2.18 Benin is a shareholder in Air Afrique and UTA and has a few small military airplanes, some of which can be chartered by the public. There are also four DC3 flights per week by Air Benin between Parakou and Cotonou with possibility of charter to other destinations.  - 6 - C. Transport Administration and Coordination 2.19 While the Dahomey Land Transport Study of 1969 was being prepared a new Ministry of Transport, Post and Telecommunications was given responsi- bility for transport policy, regulation and planning. The Study advised the Government to keep transport planning within the Directorate of Transport and to entrust this task to one competent advisor at the highest level in the Department. However, the Government created the Directorate of Land Transport (DLT), which has, however, never functioned as a high-level body because of lack of qualified personnel and adequate funds and because of limitations imposed on it. Under the First Highway Project, the Association agreed to finance the hiring of an expert for 22 months to help set up the DLT. The expert was hired but terminated after about 16 months in September 1972 because the agency was unable to take advantage of the consultant's expertise. This assistance was reintroduced in the Second Highway Project (Credit 415-DA) but assigned to the then Ministry of Public Works and Transport's Directorate of Roads and Bridges, because the same problems persisted in DLT and addi- tional assistance was needed in DRB. 2.20 The Government has advised the Association that it would like to give more attention to the Directorate of Studies and Planning (DSP) in the newly re-organized (1976) Ministry of Transport rather than to DLT. The Government has agreed that DSP's task will be to organize and centralize the collection of transport data and analyze transport problems, investment plans, and prospects of all elements of the transport system. The unit could be the basis for coordinating the various transport modes, setting tariff policies, centralizing data collection, reviewing planned investments, and developing transit traffic. The project includes technical assistance for this purpose (para 4.12). D. Transport Investment and Financing 2.21 Data on transport investment and financing are hard to obtain because of the lack of a central, transport planning and data collection unit. The available data are summarized in Table 2. They indicate that between 1970 and 1975 about CFAF 9.0 billion (US$37 million) 1/ was invested in the transport sector, excluding railway investments (mainly rolling stock) because the data on this subsector were not reported. For the period 1976- 1980 roughly two and a half times as much (CFAF 24.1 billion or US$98 million) is planned, including CFAF 2.9 billion for railways but excluding probably small amounts of airport investments. The highway sector has absorbed and will continue to absorb a major portion of transport investments (para. 3.25). 1/ The bulk of the disbursements under the Association's Second Highway Project (US$20.8 million in total) occurred in 1976 and 1977.  - 7 - 2.22 Investments in the port have come from the port authority, with contributions from EDF and other loans. A port extension project has been appraised by the Association acting on behalf of six potential co-financers. From 1976 to 1980, port investments (CFAF 9.9 billion) may rival road invest- ments (CFAF 11.2 billion) if the port project materializes. Lirport invest- ments have been and are expected to remain modest (para. 2.17). 3. HIGHWAY SUBSECTOR A. The Road Network 3.01 Benin's 7,200 km road network (including 300 km of urban roads) is about the same size as the network of neighboring Togo, a somewhat smaller country. About one-tenth of the network (759 km) consists of paved roads and one third (2,592 km) are all-weather laterite roads; the remainder (3,849 km) consists of partly improved earth r2ads and tracks (Table 3). The network density is about 64 km per 1,000 km or 2.3 km per 1,000 inhabitants. The most trafficked roads connect Cotonou with Nigeria and Togo along the coast and with Niger to the north. About half of the network is classified as interstate roads (connecting with neighboring countries) and about half national roads (serving principal towns within Benin). 3.02 Most interstate and national roads once were two traffic lanes wide, but some eroded in the 1960's to mere paths with the wide structures remaining in place at crossings. A six-year effort under two consecutive maintenance projects has not been sufficient to restore all the roads, due to heavy concentration on improvement of the main bituminous network and to severe setbacks of the maintenance effort after the energy crisis. As a result about one-third of the paved road network remains in unsatisfactory condition, marked by potholes, pavement cracks, ravelled edges and erosion of shoulders. Only about half of the laterite roads are well enough main- tained to permit all-weather travel. On the remaining laterite roads, as well as on the earth roads, reliable transport is possible only during the dry season. 3.03 Since 1974 the Government has been carrying out a program of recon- struction and pavement strengthening of the most deteriorated paved roads. The Bank Group, EDF, the United States Agency for International Development (USAID), FAC and the Government of Nigeria were the principal sponsors of this road improvement program (para. 3.25). For the betterment of laterite roads, the Government, with financing from the Association under the First and Second Highway Projects (para. 3.22), established resurfacing brigades, but this program remains to be completed and will be expanded to include bituminous roads under the proposed project. 3.04 Feeder roads have also received increased attention. As a first step, two feeder road brigades were established under the Zou-Borgou Cotton Project (Credit 307-DA) for the improvement of 620 km of cotton feeder roads,  -8- of which 425 km were built. An ongoing Feeder Road Project provides for the construction of the remaining cotton feeder roads and an additional set of other argicultural feeder roads up to a total of 1,270 km and for maintenance of these and the cotton feeder roads. The Government will maintain another 600 km with its own resources. It will focus on the creation of an efficient and sufficiently endowed feeder road maintenance organization and on efforts to employ labor intensive techniques where practicable. B. Vehicle Fleet and Road Traffic 3.05 Statistics on the evolution of the vehicle fleet between 1971 and 1976 are not available. However, after the name of the country was changed from Dahomey to Benin at the end of 1975, all vehicles had to be issued new license plates. About 12,000 vehicles were registered or 4 per 1,000 inhabi- tants. Compared with 10,849 vehicles in 1970, this shows an average annual compound growth rate of 2%. Judging from the fuel consumption data analyzed below, the average growth rate may well hide a decline in 1973 and 1974 (Table 4). Based on 1970 figures, about 35% of the vehicle fleet should consist of trucks. 3.06 Data on fuel consumption (Table 1) show that consumption by road vehicles increased by about 14% per year between 1970 and 1972, then declined in 1973 and 1974 and returned to 1972 consumption levels in 1975. Incomplete 1976 data indicate a substantial upswing over 1975. 3.07 The Directorate of Roads and Bridges (DRB) carried out limited traffic counts intermittently over the last seven years during implementa- tion of the highway maintenance program. These data show that traffic volumes range from 5,800 vehicles per day (vpd) between Cotonou and Porto Novo (about 500-1,000 vpd in the vicinity of other major cities) to between 50 and 150 vpd on the remainder of the interstate and national networks. About 70% of the total domestic freight volume, estimated at 1.5 million tons per year, is carried by road (150 million ton-km) of which about one- third is transit traffic for Niger and Nigeria. Consultants have forecast a growth rate of 7.5% for the 1977-1979 period on the main arteries, because they expected an increase in the vehicle fleet and return to normal economic conditions prevailing before 1973. A more conservative estimate is used in this report. An annual traffic increase of about 4% to 5% is expected on the principal roads and a somewhat slower increase on the rest of the network (except on the coastal roads: Cotonou-Lagos 10% per annum and Cotonou-Lome 6%) over the next seven years because the agricultural sector may need a somewhat longer recovery time than other sectors. 3.08 Vehicle safety regulations are adequate, and enforcement is reason- ably good, although the lack of trained personnel is still a problem. Respon- sibility for vehicle inspection was recently transferred from DLT to DRB. Maximum legal vehicle axle loads have been increased from 11.5 tons to 13.0 tons. The Government is starting to enforce these regulations on the Cotonou- Malanville axis, where two existing weighing stations were rehabilitated under  - 9 - the ongoing highway project. The Government is planning to expand and strengthen the enforcement of these regulations. C. Administration 3.09 The Ministry of Equipment (ME) through the Directorate of Roads and Bridges (DRB) is responsible for the administration of the highway sub- sector. The technical work is carried out by DRB's Studies and New Works Service (SNWS), its Highway Maintenance Coordination Service (HMCS), and a central workshop, Service des Techniques Industrielles (STI). At the regional level DRB is represented by three district offices and ten subdivisions, three or four in each district. Subdivisions are further subdivided into two or three sectors. Specialized units for feeder road construction and main- tenance and for regraveling of laterite roads are attached to two of the districts (Exhibit I). An additional district office is now being planned in Natitingou in the North. The present organization appears adequate. 3.10 The SNWS supervises new construction works through temporary offices attached to the subdivisions for minor works and through the use of foreign consultants for major ones. It is also responsible for reviewing all engineer- ing studies and occasionally executes minor engineering design work and field surveying (para 3.17). The HMCS plans and supervises the highway maintenance program. 3.11 STI's operations are of two kinds: (i) management and maintenance of the highway maintenance equipment fleet, and (ii) vehicle repair for Gov- ernmental agencies and industry. The volume of non-government work is relatively small (10%) and separately accounted for. STI has an autonomous accounting system. The Minister of Equipment reviews STI's budget and ac- counts, and the Minister of Finance approves. These auditing and control procedures appear adequate. 3.12 The Centre National d'Essais et de Recherches des Travaux Publics (CNERTP), under the supervision of the Minister of Equipment, is in charge of executing soil and materials testing for roads. The Minister of Equipment also reviews CNERTP's budget and accounts. Otherwise CNERTP operates as a state-owned firm performing laboratory and field tests for civil works for the Government and private enterprises. D. Staffing and Training 3.13 DRB has 12 university-level local engineers in upper and mid-level administrative positions. Four of them are assigned to district offices. Other mid-level administrative positions are filled with 16 engineering tech- nicians (trained at the Polytechnical College of Bamako, Mali). The office support staff consists of about 82 persons, 50 of whom are assigned to field offices. The labor force assigned to maintenance operations amounts to 400 skilled and 900 unskilled workers. The number of engineers in DRB is still insufficient to meet normal operational requirements. Therefore, DRB will have to continue relying on foreign technical assistance to execute thle proposed project. STI and CNERTP are adequately staffed and equipped.  - 10 - 3.14 The director of DRB and all division chiefs are university educated engineers. The director of CNERTP was trained by the French Centre d'Expe- rimentation du Batiment et des Travaux Publics (CEBTP). The director of STI was trained in Belgium in mechanical engineering, and has acquired prac- tical and managerial experience through on-the-job training by consultants during the implementation of the Second Highway Project. FAC has supplied training to DRB's STI in the past and such training will continue to be provided under this project. Field engineers and technicians also need more training as many of them take their positions immediately after leaving school. In order to assure the efficient functioning of field maintenance operations, foremen, drivers, mechanics and equipment operators also need additional training; however, a core is already developed that has proven capabilities. 3.15 Some training of lower and middle level personnel for highway maintenance operations has been provided by consultants under the technical assistance program of the First and Second Highway Projects. Additional on-the-job training will be provided by consultants under the proposed project, and this task has received special emphasis in the consultants' agreed terms of reference (para. 4.10). Part of the more formal training needs will be satisfied by more frequent use of the regional training center, Centre Regional de Formation en Entretien Routier (CERFER) in Lome, Togo, and by three local training centers. About 20 specialized technicians are study- ing or have recently completed training at CERFER. The Centre de Formation de Genie Rurale (CFGR) and the Lycee Technique of Cotonou prepare about 20 road technicians per year who usually enter the administration at the supervisory level. The College Polytechnique Universitaire du Benin (CPUB) opened in November 1976 in Cotonou with about 50 students in its three-year program of "technicien superieur en Genie Civil." Several of them may apply to the civil service when their program is completed. Government officials also expect to be able to attract about 10 engineers and engineering technicians every year as they return from their studies abroad. E. The Road Transport Industry 3.16 The road transport industry in Benin has consisted of about 350 small operators with less than four trucks on the average, organized since 1960 in the Syndicat des Transporteurs Routiers. Many truckers work most of the year on contract to OCBN for transit traffic between Parakou and Niger. To handle the growing transit traffic to Nigeria, plans are being finalized for the creation of a national transport company, TRANSBENIN, with state and private participation and credit from the Compagnie Francaise d'Assurance du Commerce Exterieur (COFACE) for the purchase of 180 trucks. Recently the Government also approved CFAF 360 million and 330 million respectively (about US$3.0 million) for the creation of local and provincial transport companies to handle national traffic. Some of the provincial companies (Maritime and Borgou) are taking over equipment from larger private expatriate transporters  - 11 - who have left the country. As in other cases of nationalization in Benin, compensation has been assured. The creation of new companies, if not co- ordinated and properly planned, may lead to over-capacity in the trucking industry. The Government has agreed that DSP will study the supply and demand situation in the road transport industry. F. Engineering and Procurement 3.17 Major design works and supervision of construction are performed by foreign consultants under supervision of DRB's SNWS. There are no domes- tic consultants yet, but the Government intends to create a General Studies Service in the Ministry of Equipment, which could become the nucleus of a small state consulting firm. Design standards, derived from French practice and adapted to local conditions, are usually used on new roads. The pavement width is generally 6 meters with a platform width of 9 meters for interstate and 8 meters for national paved roads and 7 meters for all laterite roads. Feeder roads are constructed with a 4 meter surface width and a 6 meter platform. 3.18 Contracts for major highway projects are awarded on the basis of competitive bidding. SNWS is in charge of calling and evaluating bids, which is usually done with the assistance of consultants. A representa- tive of the President of the Republic must by law participate in evaluation of bids. Bid openings are public. Signature of contracts is the respon- sibility of the Minister of Equipment and a countersignature of the Minister of Finance is required if a foreign credit is to be used for financing. G. The Road Construction Industry 3.19 Turnover in the country's construction industry, including building and civil works, is estimated at about CFAF 6.5 billion (US$27 million) in 1976. Road construction accounted for 90% of total turnover and building con- struction accounted for the remaining 10%. Turnover was exceptionally high in 1976. During the period 1971 the annual average was about CFAF 2 billion (US$8 million). The large increase in the volume of works in 1976 was mainly due to the contruction of a coastal road linking Cotonou with Lagos in Nigeria and rehabilitation of the Parakou-Malanville road. 3.20 All major civil works have been executed by foreign contractors (about 95% of annual turnover). Domestic contractors have only very limited capacity and are engaged primarily in the housing sector. A Government commission is studying their status with the intention of recommending for- mation of an association of all domestic and possibly even the major foreign contractors. There are three locally registered foreign firms, all French: Grands Travaux de l'Est (GTE), les Entreprises du Benin of the group Societe Francaise d'Entreprise de Dragages et de Travaux Publics, and Colas. 3.21 The Government is concerned about the slow development and foreign domination of the civil works industry. Therefore in June 1976 it established  - 12 - a state-owned construction company, Societe Nationale de Construction et des Travaux Publics (SONACOTRAP), which in its first year of operation had a turnover of CFAF 83 million (US$340,000), the major part of it in building construction. SONACOTRAP cannot at the moment execute large civil works contracts; the company needs adequate equipment and experienced personnel, including skilled workmen, foremen, field engineers and business managers. The Government is preparing to make a major purchase of highway construction equipment for the company and is investigating participation by a French firm. SONACOTRAP will, alone or in joint venture, participate in competitive bidd- ing for the resurfacing of some sections of the 195 km of bituminous roads financed under the proposed project and will be granted IDA's 7.5% margin of preference to eligible domestic contractors bidding for civil works. H. Maintenance 3.22 Routine and periodic maintenance of the highway network is carried out mainly by DRB's subdivisions and sectors; about 2,000 km of feeder roads and tracks and some 300 km of urban roads are the responsibility of the Ministry of the Interior and local authorities. The latter have recently started a campaign for voluntary efforts in the cities and in the country. DRB's execution has improved considerably, qualitatively and quantitatively, since implementation of the four-year maintenance program under the First Highway Project, followed up by a two-year extended technical assistance program under the Second Highway Project. Under the first project, which started in 1971, DRB was organized and a central maintenance division was created. Regular routine maintenance interventions were made over more than 80% of the network allocated to DRB as of 1973. Maintenance programming and budgeting techniques were introduced, and Government personnel received training in equipment maintenance. In addition the STI workshop facility in Cotonou was enlarged and properly equipped, existing highway maintenance equipment was repaired and new equipment purchased. Under the Second Highway Project, improvements made under the preceding program have been carried further, with emphasis on the planning of routine and periodic maintenance of laterite roads and proper servicing of the highway maintenance equipment. However, in addition to expanding the program to bituminous roads, technical (para. 4.07) as well as financial improvements (paras 3.26 and 3.27) in the ongoing operations are necessary. 3.23 The First and Second Highway projects concentrated in building up DRB capacity in maintenance of laterite and earth roads (90% of the network), and the rehabilitation of major roads of the network. Periodic maintenance of bituminous roads was let to contractors, and routine maintenance was limited to filling of potholes. This project will expand DRB maintenance capacity to bituminous roads. For the periodic maintenance of laterite roads four re- surfacing brigades were established under the First Project. Due to insuf- ficient funds and equipment breakdowns, management problems and lack of trained personnel, the initial four brigades were consolidated in two in 1975 under the Second Project. Further cutbacks in funds reduced the number of  - 13 - operating brigades to one in 1976. This brigade completed the Pobe-Ketou road and has moved to the Djougou-Assarade road. However, this brigade is still inadequately equipped in spite of a special budget allocation of CFAF 32 million (US$131,000) in 1976 for equipment rehabilitation (para. 4.07). A total of 680 km of laterite roads were resurfaced by the brigades and some repairs on bridges and structures were performed. I. Financing 3.24 Expenditures for roads in Benin tripled between 1970, whyp they were CFAF 0.9 billion (US$3.7 million), and 1975, when they amounted to about CFAF 2.7 billion (US$11 million). They are estimated to have more than doubled again to CFAF 5.9 billion (US$24 million) in 1976, primarily due to construction by Nigeria of the first coastal link with Lagos (Seme-Gbadagri, CFAF 2.3 billion) and IDA and USAID disbursements for Parakou-Malanville under the Second Highway Project. Road maintenance expenditures alone, on the other hand, appear to have declined from a maximum of CFAF 474 million in 1972 to an average of CFAF 403 million per year in 1973-1975, a period, when road maintenance costs rose considerably due to worldwide inflation (Table 5). 3.25 In the 1970-76 period, 73% of Government expenditures for roads, including road maintenance, and 89% of road investments were financed from foreign sources (IDA 27%, Nigeria 26%, EDF 18%, USAID 16%, FAC 2%). Recur- rent maintenance expenditures for equipment have been financed from regular budget allocations and from the Road Fund, which was reactived in 1970 to supplement the regular budget and supplied with funds from an earmarked tax of CFAF 4 per liter on sales of diesel oil and gasoline. Road Fund revenues were all used for road maintenance. They accounted for about 62% of all maintenance expenditures financed by the Government over the period. 3.26 In accordance with the conditions of the Association's First High- way Project, the Government undertook to provide increased amounts of main- tenance funds in the period 1970-73. During appraisal of the Second Highway Project a road maintenance financing plan for the period 1973-1976 based on requirements assessed by consultants assisting DRB was discussed, and a gradual increase over the 1972 amounts was agreed upon. However, as shown in the table below, circumstances since the end of 1973 have been such that actual budget allocations are still considerably below what is necessary for adequate maintenance, and local funds are increasingly used for road invest- ments. This trend may well continue through 1979 because of Government commitments of about CFAF 600 million (US$2.5 million) per year for a new bridge in Cotonou and smaller amounts for other bridge and highway projects.  - 14 - 1970 1971 1972 1973 1974 1975 ---------(in millions of CFAF) -------- (at current prices) Expenditures for Roads Financed from Local Sources 343 588 660 561 674 713 Road Maintenance Expenditures 288 401 474 402 401 404 Investment Expenditures 55 187 186 159 273 309 3.27 The expenditures for road maintenance by DRB reached a maximum of CFAF 474 million in 1972 or almost CFAF 100,000 (US$400) per km of major road. The Government would be justified in spending CFAF 1.3 billion on routine and periodic maintenance of its road network (US$2,000 per km of paved roads, US$1,000 per km of laterite road, and US$300 per km of earth road), of which CFAF 400 million of foreign financing would be provided from ongoing mainten- ance projects. This target, however, can most probably not be reached before 1980 because of Government commitments to other investment projects and Benin's poor economic condition. The Government has therefore agreed with the Association on an annual budget allocation for highway maintenance increasing from CFAF 750 million in 1978 to CFAF 900 million in 1980 as indicated in the table below. This will provide sufficient funds for routine and periodic maintenance. 1976 1977 1978 1979 1980 - ----(in millions of CFAF) ---- (at constant 1976 prices) Road Maintenance Expenditures 427 600 750 830 900 Network Maintained by DRB 417 580 718 788 850 Network Maintained by Ministry of Interior and Local Authorities 10 20 32 42 50 3.28 This target could be attained either by a significant increase in budgetary contributions to maintenance or by an increase in fuel taxes or road user taxes which would then be earmarked for the Road Fund. Revenues from road user taxes, until 1973, more than covered all expenditures for roads including investment expenditures financed from abroad. This was no longer the case in 1974 and 1975. In 1975 revenues from road users amounted to 82% of expenditures (Tables 5 and 6). In 1976 coverage must have decreased further to about 50%. The options available when only fuel taxes are con- sidered range from the current CFAF 4 per liter, which would still require ordinary budget contributions to maintenance of between approximately CFAF 400 million in 1977 and CFAF 650 million in 1980, to CFAF 13 per liter, which might eliminate contributions by the general budget altogether, assuming a 4% per year increase in traffic (para. 3.07) and an identical collec-tion ratio (62.5%). This may, however, be impossible because it might bring fuel prices out of line with those in neighbouring countries. Other road user charges such as taxes on vehicle purchase may therefore have to be considered. The Government has agreed to consider these options and any other means available to implement the above financing schedule.  - 15 - 4. THE PROJECT A. Description 4.01 The proposed project consists of: (a) rehabilitation of the Godomey-Bohicon-Abomey road (107 km), including detailed engineering and super- vision of construction; (b) execution of a program to eliminate backlog main- tenance by resurfacing about 195 km of heavily trafficked bituminous roads; (c) execution of a program to eliminate the backlog of periodic maintenance of laterite roads by resurfacing about 273 km of interstate and national roads; (d) (i) strengthening of the ongoing routine maintenance program through purchase of small amounts of addi- tional equipment and some spare parts to increase the stock at STI in Cotonou and to improve the utilization rate of existing equipment; and (ii) providing materials for construction of office space for DSP; (e) technical assistance and fellowships to the Direc- torate of Roads and Bridges in the Ministry of Equipment for the preparation of the maintenance elements of the proposed and future projects and for further strengthening of DRB's road maintenance planning and staff training; (f) technical assistance and fellowships to the Direc- torate of Studies and Planning in the Ministry of Transport for improvement the Ministry's organization and widening of the scope of its activities; and (g) preinvestment study of the Ouidah-Allada road (40 km). (a) Rehabilitation of the Godomey-Bohicon-Abomey Road 4.02 This road forms up to Bohicon part of the country's main north- south artery connecting the capital Cotonou with the central and northern regions of the country. Abomey, 5 km to the west of Bohicon, is a historic city and one of the country's major population centers. The existing road is a two-lane paved road that was built to marginal standards 11 to 16 years ago. It now carries traffic volumes ranging from 500 to 1,200 vpd and is  - 16 - badly deteriorated. As a result of the marginal standards and lack of adequate maintenance, cracks are showing in the uneven road surface and poor drainage of the roadbed has led to rutting on the sides of the pavement and reduction of the pavement width. A section of 6 km between Godomey and Abomey Calavi and a section of 11 km between Sehoue and Zakpo have already been reconstructed and repaved under the Second Highway Project. 4.03 The proposed project item includes the construction of a new base course on about 57 km of the road, improvement of the drainage structures, a double surface treatment, regraveling of shoulders for the whole 107 km and detailed engineering of the road (21 man-months) and supervision of construc- tion (56 man-months). DRB will be assisted by consultants in supervising the rehabilitation works. Design standards can be found in Table 7. (b) Elimination of Maintenance Backlog on Bituminous Roads 4.04 As the country does not have bituminous road maintenance capability, the paved road system has deteriorated at a rapid rate. Several paved roads have had to be reconstructed, and the remainder of the network needs to be taken care of urgently, or it, too, will have to be reconstructed. The pro- posed project provides for the elimination of a maintenance backlog on 195 km of paved roads during 1978, 1979 and 1980. The work consists of clearing and rehabilitating the shoulders, ditches and drainage structures, patching the road surface, and placing 135 km of single and 60 km of double surface treatment. In 1980 or later, another 100 km of resurfacing will have to be executed. Then there will be a period of rest before the approximately 450 km being reconstructed under the Second and this Highway Project will need a new surface dressing. The selected roads (Table 8) have been in service for six or more years and have never had a new surface dressing. 4.05 Labor intensive methods will be used for clearing the vegetation and rehabilitating shoulders, ditches and drainage structures. These and a small amount of equipment will be provided by DRB from the stock of the subdivisions. A new unit will patch the roads. The equipment of this unit will also be provided by DRB from the existing equipment fleet and will consist of a specially adapted 7-ton truck for materials, tools and personnel and a small water tank trailer. The project will provide small tools, materials (gravel, emulsified asphalt), fuel, spares and salaries for personnel. The period of intensive patching activity during the execution of this project will be used to train the nucleus of workers for patching units to be established in all three districts. The patching units will thus become part of the normal DRB maintenance organization. After completion of these preparatory works, the single and double surface treatments will be applied by contractors. (c) Resurfacing of Laterite Roads 4.06 Under the two previous projects almost one quarter of the laterite roads have been resurfaced (680 km). Under this project, two brigades will be reactivated (para. 3.22) to resurface a further 273 km of interstate and  - 17 - national laterite roads, which have not been resurfaced with laterite for the last 10 years. The selected roads can be found in Table 9. Changes in the selected roads will be subject to the Association's approval. The ideal solution would be to re-establish three brigades, one in each district. They could resurface the 2,592 km of laterite roads every 7 to 8 years, as every brigade can handle about 100 to 125 km per year. This ideal solution can only be achieved in stages. The proposed project will revive one brigade in Parakou and supply additional equipment to the second, now operating in the Bohicon district, and keep both operational for two years. A laterite layer of an average thickness of about 12 cm will be placed over a width of 6 m for the selected roads. (d) Equipment and Materials 4.07 The proposed project continues efforts begun under the First and Second Highway Projects to strengthen routine road maintenance (Paras. 3.21 and 3.22). The use of equipment procured under these projects was signifi- cantly curtailed by the lack of spare parts at repair facilities. The exist- ing stock of spare parts is only 3% of the replacement value of the equipment fleet, and this is not enough to run an efficient workshop in a country with few local supply facilities. A large part of the equipment necessary for road maintenance (routine and periodic) is already available in the country but needs rehabilitation. The spare parts necessary for this rehabilitation are listed in Table 10, part A. The spare parts stock of the STI in Cotonou will be increased to 12% of the replacement value of the equipment (Table 10, Part B). There is also still need for some essential pieces of equipment to com- plement existing equipment. This new equipment is listed in Table 11. 4.08 The project also provides materials for construction of an office and for the purchase of some office furniture and equipment for DSP. (e) Technical Assistance Program and Fellowships to DRB 4.09 The proposed project continues efforts begun under the First and Second Highway Projects to strengthen the management capability of DRB and consolidate the improvements realized under these two previous projects. The proposed project thus provides for about 55 man-months of consulting services to assist DRB in dealing with management, budget and procurment problems. The project also provides a few short-term fellowships for the training of DRB personnel. 4.10 Highly qualified specialists (two highway engineers and a mechanical expert) will assist DRB. The experts' terms of reference have been agreed upon and emphasize the following: (i) execution and monitoring of resurfacing of laterite, and bituminous roads; (ii) monitoring of repair shops, strengthening STI's stock accounting system, and execution of maintenance of equipment;  - 18 - (iii) on-the-job training of key DRB and STI personnel (Annex I); (iv) preparation of a future maintenance project; and (v) preparation of a comprehensive permanent program for staff training, personnel development and management. (f) Technical Assistance and Fellowships to DSP 4.11 The project provides for technical assistance (30 man-months) to the Directorate of Studies and Planning (DSP) in the Ministry of Transport for (i) strengthening its organization and widening its scope of activities to include collection of data, coordination of all modes of transport, and preparation of transport planning and policy, and (ii) for training of key personnel. The project also provides a few short-term fellowships for the training of DSP personnel. 4.12 To create the capacity for better transport administration and coordination, the project provides for the services of highly qualified transport specialists (an economist and an engineer), up to a total of 30 man-months to help DSP with the following tasks: (i) reviewing the current organization and operations; (ii) developing a data collection system and analysis program for the transportation sector; (iii) developing and implementing a training program for DSP personnel (Annex I); and (iv) helping the Government to prepare the transport development program and to formulate transport policy. The experts' terms of reference, emphasizing the above tasks, have been agreed upon. (g) Preinvestment Study 4.13 The proposed project includes a feasibility and detailed engineer- ing study of the Ouidah-Allada road (40 km). This two-lane gravel road connects the coastal road in the south with the Godomey-Bohicon road at Allada, thereby considerably reducing travel time for traffic from the south- western coastal area, which at present often detours via Cotonou. Traffic on this road is expected to be about 200 vpd. Maintenance costs on this road are high and the Government proposes improving this road to paved standard. The feasibility study would determine the type of improvements economically justified. It will be followed by detailed engineering if justified. Terms of reference for this study have been agreed upon.  - 19 - B. Cost Estimates 4.14 The total cost of the project (net of taxes and duties but includ- ing contingencies) is estimated at about US$21.3 million equivalent, with foreign costs of about US$17.0 million (80%). The Government has agreed as it has done under the Second Highway Project, that the proceeds of the credit for the project should not be used to finance taxes and duties. The table below (which summarizes Table 12) shows each project item, including its contingencies, for co-financing purposes. Table 13 presents a more conventional approach, dividing the project into civil works, equipment and material purchases, consultant services and contingencies. Cost Estimates, Net of Taxes, at July 1977 Prices Local Foreign Total Local Foreign Total Foreign as -----CFAF million-- -