Nepal - Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2016 FILE COPY THE WORLD BANK PROJECT PERFORMANCE AUDIT REPORT NEPAL - FIRST HIGHWAY PROJECT (CREDIT 223-NEP) April 7, 1978 Operations Evaluation Department This document has a restricted distribution and may be used by reciplents only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT NEPAL - FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Table of Contents Page No. PREFACE PROJECT PERFORMANCE AUDIT BASIC DATA SHEET HIGHLIGHTS PROJECT PERFORMANCE AUDIT MEMORANDUM I. Background 1 II. Project Results 2 III. The Issues 3 IV. Conclusions 5 ATTACHMENT: PROJECT COMPLETION REPORT I. Introduction A.1 II. Project Preparation and Appraisal A.1 III. Project Implementation A.2 IV. Costs A.5 V. Procurement and Disbursements A.6 VI. Institutional Development A.6 VII. Covenants A.7 VIII. Economic Reevaluation A.8 IX. Role of the Association A.9 Tables 1. Actual and Expected Project Implementation 2. Road Maintenance Equipment 3. Equipment Rehabilitated with Project Spare Parts 4. Project Costs 5. Accumulated Disbursements 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- 6. Road Maintenance Funding 7. Actual and Forecasted Traffic in 1976 (Average Daily Traffic) 8. Ex Post and Appraisal Estimates of Economic Rates of Return 9. Ex Post Benefit and Cost Streams 10. Ex Post Pedestrian Suspension Bridge Benefit and Cost Streams PROJECT PERFORMANCE AUDIT REPORT NEPAL - FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Preface This report presents a performance audit of the First Highway Project in Nepal, for which Credit 223-NEP for US$2.5 million was closed in February 1978 with cancellation of US$343,000. The memorandum is based on the attached Project Completion Report (PCR) prepared by the Bank's Regional Office, discussion with Bank staff, and a review of proj- ect files and the transcript of the Executive Directors' meeting which considered the project. OED staff visited Nepal in February 1978 to review the project results and to discuss with the Government an earlier draft of this report. The Government's comments have been taken into account in preparing the present version. The assistance provided to OED staff by the Government during the visit is gratefully acknowledged. On the basis described above, the audit accepts the principal conclusions of the PCR. However, it expands on the long delays in proj- ect execution and the unsatisfactory results of the technical assistance program. PROJECT PERFORMANCE AUDIT BASIC DATA SHEET NEPAL: FIRST HIGHWAY PROJECT (223-NEP) KEY PROJECT DATA Original Actual or Item Plan Current Estimate Total Project Cost (US$ million) 3.4 4.6 Overrun () 35% Credit Amount (US$ Million) 2.5 Disbursed - 2.2 Cancelled .3 Date Physical Components Completed 12/74 7/77 Portion Completed by Above Date (%) 50% 99% Portion of Time Overrun (%) - 65% Economic Rate of Return (%) 22% 29% Institutional Performance Average Below average OTHER PROJECT DATA Original Actual or Item Plan Revisions Est. Actual First Mention in Files or Timetable 3/69 Government's Application - - n/a Negotiations 5/70 6/07/70 10/70 Board Approval 6/70 7/70 11/10/70 Credit Agreement 7/70 12102/70 Effectiveness 2/03/71 Closing Date 6/30/75 6/30/77 2/03/78 Borrower Government of Nepal Executing Agency Department of Roads Fiscal Year of Borrower Mid-July to Mid-July Follow-on Project Name Second Highway Project Credit Number 730-NEP Amount US$17.0 million Credit Agreement 10/19/77 MISSION DATA Sent Months, No. of-! No. of Date of Item B Year Weeks Persons Manweeks- Report Identification 3/69 1 1 1 6/69 Preappraisal 9/69 2 2 4 10/69 Appraisal 12/69 3 2 6 11/70 Total 6 11 Supervision 12/71 2 1 2 1/14/72 7/72 2 1 2 8/04/72 4/73 3 1 3 5/25/73 11/73 2 1 2 11/30/73 4/74 3 2 6 5/06/74 11/74 2 1 2 12/03/74 4/75 1 1 1 6/18/75 11/75 1 1 1 11/10/75 4/76 3 2 5 4/27/76 10/76 1 1 1 10/19/76 11/76 3 2 6 Completion 7/77 1 1 1 9/77 Total 24 32 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Rupee (NR) Appraisal Year Average - 1970 US$ 1 = 10.125 Intervening Years Average US$ 1 - 11.00 Completion Year - 1977 US$ 1 = 12.45 1/ Number of 5-day weeks shown in the mission report plus travel time. 2/ Number of weeks times number of persons. PROJECT PERFORMANCE AUDIT REPORT NEPAL - FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Highlights IDA Credit 223-NEP was to support Nepal's highway development by implementing the Government's four-year maintenance program and con- struction of bridges. The credit provided US$2.5 million to finance the foreign exchange cost of the total cost of the project of US$3.4 million. UNDP financed the foreign cost of technical assistance of US$200,000, which was carried out as a part of the project; 70% of the credit was used for acquisition of maintenance equipment and most of the balance for the construction of bridges. The physical component of the project was completed with 2 to 4 years' delay with a total cost overrun of 30% due mainly to inadequate preparation of the project. The technical assistance program was not fully effective due to inefficient administrative arrangements and the lack of Government support. As a result, achievements in institution- building have.been insignificant. The reestimated rate of return for the project as a whole is 29% and compares favorably with the appraisal estimate of 22%. The higher return in spite of the large cost overrun is due to the rise in vehicle operating costs resulting from increased oil prices since 1973. The following points may be of particular interest: - inadequate preparation for the bridge construction program and the deficient engineering design which led to slow progress in construction (para. 6, PCR, paras 3.02-3.04). - difficulties with contractors, which led to com- pleting workshop construction by force account (para. 7 and PCR, para. 3.09). - the difficulties in the procurement of maintenance equipment resulting in delays and cost overrun (para. 7 and PCR, paras 3.06-3.08). - insignificant achievement of maintenance target (para. 8, PCR, paras 3.08 and 3.12). - inadequate results of the technical assistance program and the lack of institutional development (paras 9, 15, 16, and PCR, paras 3.11-3.13, 6.01). PROJECT PERFORMANCE AUDIT MEMORANDUM NEPAL - FIRST HIGHWAY PROJECT (CREDIT 223-NEP) I. Background The Transport System 1. The Kingdom of Nepal is a landlocked country bordered by China (Tibet) and India, which has a land area of about 141,400 sq km (about the size of Greece) and an estimated population of about 12.6 million (1975). The topographic and climatic conditions of the country, the site of the world's highest mountain, pose major ob- stacles to providing reliable and economical transport, making the Government's efforts to develop its economy and improve communication with the outside world difficult. The countryts nearest accessible ocean port is Calcutta in India which is over 1,000 km away. 2. Until the early 1950s, road transport was limited to the Kathmandu Valley, near the capital city. Since then, the Government's efforts to connect other regions of the country with the capital re- sulted in a road network of about 4,200 km, of which about 1,600 km are paved. 3. Even with the development of the roads, the main transport means today is still the traditional hill trails (estimated to range between 15,000 and 20,000 km) over which porters and pack animals carry traffic. These trails not only link the many minor village economies but also play a vital role in unifying the country since often there is no other means of access. 4. Due to the inadequate overland transport, civil aviation plays a vital role for communication to remote and inaccessible parts of the country. There are 25 airfields which are served by scheduled flights. The domestic passenger traffic reached 17,000 passengers in 1975-76, and it is growing at about 25% p.a. in recent years. There are three short railway lines which are extensions of the Indian railroad and do not play a significant role in the overall transport system of Nepal. The Project 5. The First Highway Project for which a Credit Agreement was signed in December 1970 was to improve the maintenance capability of the Department of Roads and to improve bridges. The credit financed US$2.5 million of the total cost of the project of US$3.4 million and included the following components: (i) the replacement of five narrow, understrength road bridges; (ii) the supply and erection of five pedestrian suspension bridges for porter traffic; - 2 - (iii) the implementation of a four-year maintenance program, including the supply of road main- tenance equipment and the construction of workshop facilities; (iv) consulting services to the Department of Roads to complete bridge design and tender documents; and (v) technical assistance (financed separately by the UNDP) to assist in procurement and super- vision works under the project, and also to provide advisory services to the Department of Roads. II. Project Results 6. The physical components were completed with 2 to 4 years' delay (PCR, paras.3.02 and 3.04) and with a 30% cost overrun (PCR, paras 4.01-4.02). The work was done partly by contract and partly by force account under the supervision of the Department of Roads which was assisted by UNDP-financed experts. The bridge construc- tion program experienced delay due to slow acquisition of right-of- way, non-availability and difficulties in transport of materials, in- adequate design and problems connected to Government administration and to contractor performance (PCR, paras 3.02-3.04). 7. Procurement of maintenance equipment and spare parts was also delayed 2 years due to the long period of time required to evaluate bids, and the Government's unfamiliarity with the Bank's procurement guide- lines. Partly because the Government had difficulty in preparing a list of required spare parts, procurement of spare parts was done separately from equipment purchase which resulted in an underutilization of the equipment financed under the project. Construction of workshop facil- ities was also delayed by some 3 years because designs had to be revised to cope with the unavailability of foreign-supplied materials and change of contractors which led to completion of the work by force account (PCR, para. 3.09). 8. The delays in securing equipment and constructing workshops have meant slower progress in road maintenance. It was only in 1977, in connection with the Second Highway Project, that the maintenance program started to move in high gear. Despite the undertaking by the Government during credit negotiations to increase budgetary funds, the annual maintenance budget fell short of the estimated requirement by as much as 40%. Other than the acquisition of assets, i.e., equipment and workshops, actual road maintenance during the project period was con- siderably below appraisal expectation. 9. The technical assistance program under the project for both supervision of work and advisory service to the Department of Roads has achieved far less than expected at appraisal, because of inadequate set- up of the program and the Government's unwillingness to accept the ex- perts' recommendations (PCR, paras 3.12-3.14). This is discussed in some detail under Issues. This, together with the Department of Roads' lack of leadership (PCR, para. 6.01), resulted in insignificant achieve- ment in institution-building. The lack of institutional development meant an inadequate utilization of skills acquired by staff through train- ing under the technical assistance program. Credit covenants have gener- ally been observed, albeit with some delays in implementation in most cases (PCR, paras 7.01-7.05). Economic Reevaluation 10. For the project as a whole, the recalculated post project rate of return is 29% compared with the appraisal estimate of 22%. A more timely and efficient execution of the project would have produced even better results. The rate of return on the bridge construction program of 31% compares favorably with the appraisal estimate of 20%. As reli- able current traffic information for the pedestrian bridges is not avail- able due to remoteness of their location, the rate of return calculation was based on the appraisal traffic forecast and actual construction costs. On this basis, the rates of return on pedestrian bridges range between 12 and 24%, which are lower than the appraisal estimates of 18 to 33%. The maintenance program shows a reestimated rate of return of 31% vs. the ap- praisal estimate of 23%, assuming the improvement in maintenance under the Second Highway Project will be maintained. The adverse effects of higher costs and delayed project execution were more than offset by the rise in vehicle operating cost savings due to increased oil prices since 1973. III. The Issues 11. The major issues related to the project are: the long delays in project execution; and the unsatisfactory results of the technical assistance program. Delays in Project Execution 12. As already discussed, the execution of the project was delayed between 2 and 4 years. Although some of the factors responsible for the delays (as well as cost rise) were those that could not have been anti- cipated (e.g., the cement shortage in 1974-75), many of them could have been identified during project preparation and measures devised to pre- vent them. This raises the question of how well the project had been prepared at the time of appraisal, and whether it would have been wiser to delay processing the project pending investigation of these problems. Could a few months of additional time devoted to project preparation have substantially reduced the project delay, if not eliminate it? The discus- sion below would seem to affirm this possibility. 13. The initial cause of delay in the bridge construction program was the slow acquisition of the right-of-way by the Government, an under- taking for which a firm program of implementation should have been pre- pared before or at the time of appraisal. After this, there were problems of redesign of the bridges, partly because of inaccurate survey and partly because of unavailability of construction material (structural steel). Project elements were changed during execution, which may also have had adversely affected an orderly execution of the project. For example, a small maintenance depot was eliminated at an early stage of the project. Then a major workshop was also eliminated from the project as an existing facility was found to be adequate if some improvement were to be made (PCR, para. 3.09).l/ These changes in project elements as well as design changes and the problem with the right-of-way acquisition seem to suggest that, at the time of project appraisal, the Government had not yet established a firm investment program for roads. While the Bank's transport and econ- omic missions of 1965 and 1969 concluded that the road sector had high priority, efforts to translate these general findings into a concrete program before this project was appraised were inadequate. In this sense, the project's appraisal was premature. 14. The first contribution which the Bank normally makes in a new country which is unfamiliar with the Bank's practice of project prepara- tion, such as Nepal at that time, is to demonstrate the importance of adequate preparatory work which precedes actual physical construction. The Bank's efforts in this regard did not seem to have been sufficient in the case of the project under review. By nearly doubling the length of the execution period, the result in the present case was a slower high- way development than might otherwise have been possible. Technical Assistance 15. Technical assistance to the Department of Roads, which was financed by UNDP and executed by UN, was an integral part of the project. The program included six experts for an initial period of two years which was later extended to six years with a total manpower expenditure of 173 man-months. The experts assisted project supervision (in lieu of a firm of consultants, normally retained in Bank projects) and provided assis- tance for the strengthening of the maintenance organization. In spite of the evident willingness on the part of the UNDP and UN to cooperate closely with the Bank, the fact that the Bank was not the executing agency for the technical assistance program appears to have adversely affected the Bank's effectiveness in supervising the project. More fundamental fac- tors that adversely affected the program were the lack of continuity in in- dividual experts' services and the lack of cooperation of the Government to make the technical assistance program work.2/ 1/ The South Asia Regional Office considers that the deletion, during proj- ect execution, speeded up the project and that the main cause of delay was the Government's cumbersome administrative procedures. 2/ PCR (para. 3.13) offered the view that the fact that the experts were hired individually rather than as members of a team organized by a con- sulting firm might have contributed to the unsatisfactory outcome. While there may be some validity in this view, the fact that individually hired experts are frequently more easily integrated with local personnel shows that there are also advantages of individual hiring. The deter- mining factor in a successful advisory service appears to be not on what basis the experts were hired but how the agency responsible for the proj- ect organized and supervised the experts' services. - 5 - 16. Responsibility for project supervision rested with the Depart- ment of Roads, and the techncial assistance experts had the role of only assisting the Department. Perhaps, because of this special arrangement, the technical assistance project manager devoted only half of his time to supervision and the remaining time to completing feasibility studies outside the Bank project. Moreover, frequent changes of technical as- sistance personnel appeared to have caused, for considerable periods of time, vacant positions between the departure of one expert and the ar- rival of his replacement. In retrospect, it would have been more de- sirable to have independent consultants supervise works. 17. The Government's attitude toward the technical assistance program appears to have been ambivalent. The Government seems to have felt that the outside experts did not understand the aspirations of the Nepalese and, justifiably or otherwise, it also felt that the skills which the experts brought with them were already available within the Government organization. As a result, the experts' study and its recom- mendations did not receive the attention they deserved. It was not until after the departure of the experts that the Department of Roads implemented some of the experts' recommendations, while the terms of reference of the experts were to help implement the recommendations accepted by the Govern- ment (PCR, para. 7.05). The PCR concludes that the Government did not fully utilize the technical assistance team's services (para. 3.12). 18. The Government felt that it could use outside assistance in the area of high level general planning which would take into account non- economic, national aspirations, and not the "nuts and bolts" of feasi- bility investigations or project supervision as provided under the proj- ect. While some high level general advisory function may have proven to be useful, the absence of such advisors does not render the technical as- sistance useless; maintenance improvement to which a major part of the technical assistance was devoted, was the most pressing task in the road sector. The impression remains that the Government was not convinced of the need for technical assistance as provided, but accepted it because it was a requirement of the project. 19. The Government may have overestimated its capacity in considering that it could both prepare and supervise projects. It may not have fully appreciated the difficulties of maintaining on its regular staff the man- power for feasibility studies and project supervision. The Government's view that non-economic factors are important in infrastructure planning is legitimate; to the extent, however, that economic resources are re- quired for the realization of non-economic goals, the inclusion of these goals in its development program does not render economic considerations redundant. IV. Conclusions 20. The project has been executed at considerably higher cost than estimated at appraisal and with an exceptionally long delay. While the project is considered to have been a viable one, and the reestimated rates of return are generally higher than the appraisal estimates, the results - 6 - could have been better with more careful preparation preceding the ap- praisal. Many factors which interfered with project execution could have been identified through careful investigation before appraisal and the necessary measures to deal with them taken. 21. The technical assistance program has proven to be an inadequate substitute for independent consultants' supervision of the project. As- sistance to the maintenance organization as part of the technical assis- tance program has also turned out to be much less effective than antici- pated. In retrospect, the technical assistance under the project could have been more effective if the Bank had been acting as executing agency for the program, if more active Borrower assistance had been obtained, and if it had been possible to minimize the frequent change of individual experts. ATTACHMENT NEPAL First Highway Project (Cr. 223-NEP) Project Completion Report I. INTRODUCTION 1.01 On December 21, 1970, the Agreement (223-NEP) for the First Highway Project credit of US$2.5 million was signed between the Association and the Government of Nepal. This covered essentially the estimated foreign exchange component for a project totaling US$3.4 million equivalent including contingencies. The principal objectives of the project were to improve the maintenance capabilities of the Department of Roads and to undertake bridge improvements. 1.02 The project included the following components: (i) the replacement of five narrow, understrength road bridges; (ii) the supply and erection of five pedestrian suspension bridges for porter traffic; (iii) the implementation of a four-year maintenance program including the supply of road maintenance equipment and the construction of workshop facilities; (iv) consulting services to the Roads Department to complete bridge design and tender documents; and (v) technical assistance, financed separately by the UNDP, to assist in procurement and supervision works under the project, and also to provide advisory services to the Department of Roads. 1.03 This completion report is based on information gathered from government officials during mission July 10 to 14, 1977, discussion with Bank staff, and review of project files. II. PROJECT PREPARATION AND APPRAISAL 2.01 In 1965 the Bank conducted a transport survey which concluded that transport should be given high priority and that roads should be the prime mode. During an economic survey in March 1969, the First Highway Project was identified. In order to assist with the preparation of the project, consultants, NORCONSULT A.S. (Norway), were engaged first by the Bank and then later by the government. The project was appraised in December 1969 and Board presentation took place in November 1970. 2.02 Relatively little change was made in the project design from the time it was identified until the Credit Agreement was signed. Originally, the project consisted of a maintenance program, improvement to eight road bridges and technical assistance. During a preappraisal mission in August, 1969, the mission was requested to add the construction of pedestrian suspension - A.2 - bridges. Since historically all transport in the hills had been done by porter and pack animal, the mission concluded that this project element had sufficient priority to be included. They also indicated that it would be necessary for consultants to investigate the design of the suspension bridges as proposed by the Department of Roads and the economic feasibility of indi- vidual bridges. Subsequently three of the eight road bridges originally proposed were dropped on the basis of economic criteria. 2.03 Originally it was expected that the project would have been presented in FY70; and until the appraisal mission in December 1969, project preparation proceeded on schedule. The first delay developed when government requested after the appraisal that a large bridge over the Narayani River on the East-West highway be included in the project. This request was not accepted by the Association as preparation studies were not ready and there were some doubts concerning the economic merits of the bridge. Later on, negotiations scheduled for the beginning of June had to be postponed since the appropriate Nepalese officials could not leave the country because they were involved in the preparation of government budgets. The negotiations were later re-scheduled for October to coincide with their trip to the USA for other purposes. 2.04 During the preparation of the project, the main issues centered around the provision of adequate local maintenance funds and the provision of technical assistance. From the beginning it was agreed with government that the project would require technical assistance and during appraisal it was agreed that UNDP would finance the services of individual experts. Besides providing for technical assistance, the Credit Agreement indicated that the Bank would be consulted about the recommendations forthcoming from a technical assistance team and about the need for further technical assistance. During negotiations it was also agreed in a side letter that the allocation of annual maintenance funds would be based on the increase in traffic and road length and on the estimate of funds required as recommended by the technical assistance team. 2.05 In retrospect, the emphasis on maintenance appears to have been justified since Nepal has received considerable bilateral assistance for the construction of highways, but little provision has been made for their main- tenance. The project did not include an element for the financing of any road improvements. At the time, road feasibility studies to be executed by the United Nations and financed by UNDP were shortly to be initiated and it was decided to wait for the results of these studies. It was proposed that indi- cated improvement priorities might be included in a second highway project. III. PROJECT IMPLEMENTATION A. Road Bridges 3.01 The five road bridges were constructed by two contractors: the National Construction in Nepal Ltd. (a government corporation) for two bridges in Kathmandu, and Nepal Construction Company (private) for three bridges in the Terai. Supervision was carried out by the Department of Roads with assistance from a UNDP bridge engineer advisor. The standard of workmanship on the Kathmandu bridges is fair, but irregular beam soffits and some honey-combing are visible. In addition, the approaches to the bridges are only in fair condition. Nevertheless, the bridges are functioning - A.3 - satisfactorily and the approaches, with regular maintenance, should be adequate. The workmanship on the Terai bridges is considerably better than that on the Kathmandu bridges. 3.02 The construction of the five bridges was completed about two and a half years behind schedule (Table 1). Delays were initially due to the slow acquisition of rights-of-way in Kathmandu and the non-availability of structural steel which required changing the bridge design to reinforced concrete. Also, there were some design problems because of inaccurate survey data taken by the Roads Department. Later, with the start of work in 1973, the supply of steel for reinforcement became insufficient and in 1974 there was a shortage of cement with supply becoming quite irregular and unreliable. In addition to the above factors, the supervision reports indicated that lack of initiative on the part of both government and the contractors was responsible for a significant part of the project delay. B. Pedestrian Suspension Bridges 3.03 The fabrication of the pedestrian suspension bridges was undertaken by Martin Burn, Calcutta Ltd. and the erection of the bridges was undertaken by the Department of Roads. A suspension bridge engineer, supplied by SATA,1 assisted the Suspension Bridges Department in the erection of the project bridges. Although several of the government's site surveys proved inaccurate, with ingenuity the procured bridges were made to fit their intended sites and are now open to traffic. 3.04 As with the road bridges, the execution of the pedestrian suspension bridges was considerably delayed, about 3 to 4 years behind the appraisal estimate. Initially the award of the fabrication contract was delayed nearly a year because the first round of bidding had to be canceled due to lack of response on the part of suppliers. Although the bridge fabrication was completed within one year according to schedule, later problems arose with the shortage of cement and the transport of materials. At first the Department awarded a transport contract to a single contractor. However, it was not possible for one contractor to know local transport conditions in each area and he was soon not able to fulfill his obligations. Later delays occurred because the porters were unwilling to work at the rates established by the government. Also, as a result of the deficiencies in communications and the isolated nature of the bridges, their erection was considerably more difficult than originally contemplated. C. Maintenance Program 3.05 The maintenance program included the procurement of maintenance equipment (Table 2), spare parts for both new equipment and rehabilitated equipment (Table 3), workshop tools, materials and the construction of workshops. Equipment and Spare Parts Procurement 3.06 After minor delays in the writing of specifications and in the preparation for international competitive bidding procedures, bids were received in October 1971. Because of a prolonged evaluation period, contracts 1/ Swiss Technical Assistance (this financing was not included in the First Highway Project). - A.4 - for most equipment were not awarded by Government until August 1972. Most shipments arrived by the end of 1973. Some difficulties were caused by shipping damages and defective equipment, but suppliers eventually did resolve these problems. 3.07 Once arrived, most of the equipment selected (Table 2) was put to good use. For instance, the acquisition of trucks has greatly increased the Road Department's mobility and the smaller vehicles have increased the Department's ability to supervise work. The quality of base and sub-base materials has improved with the use of stone crushers and better compaction has been obtained with the vibrating rollers. The front end loaders have allowed the Department to rapidly clear and open the roads after landslides, which frequently occur in the mountainous terrain during the rainy season. 3.08 In contrast with the equipment, major problems developed with the procurement of spares. Although it was originally contemplated that the awards for spares would be made at the same time as the awards for the equipment, many manufacturers did not include lists of recommended spare parts in their bid and ordering of spares was left to a later date. Because of lack of manual,experience and initiative, the Department had a great deal of difficulty in finalizing the spare equipment list. Also, delays were incurred because of the interpretation of the Bank's procurement requirements. As a result, the full utilization of some of the new equipment was held up because of the lack of spares. This situation was rectified only in 1976. Workshop Construction 3.09 The construction of the workshops was attended by serious problems. The original project included four workshops: Kathmandu, Hetaura, Pokhara, and Kodari. The latter, which was intended only as a small depot, was deleted at an early stage in the project. Near the end of the project, the Pokhara workshop was also dropped because the Department was not sure that Pokhara would be the proper location for a workshop; and in the meantime, it felt that it could make do with minor improvements of an existing facility. The work- shops in Kathmandu and Hetaura were to be constructed by contract. The problems in the construction of the Kathmandu and Hetaura workshops first began when the supplier failed to comply with the delivery requirements for steel framing and cladding. After terminating the supplier's contract, a new design was then undertaken so that the steel work could be fabricated locally and the roof sheeting obtained from local dealers. Then, after the new design was ready, the shortage of cement in 1974-75 appeared. In addition, at Hetaura, because of contractual difficulties, primarily due to lack of a price escalation clause, work progress was slow and the Department finally terminated the contract and appointed a second contractor. However, the second contractor proved incom- petent and the work finally had to be completed by the Department. These de- lays meant that temporary workshop facilities had to be arranged in order to service and maintain newly arrived equipment, a situation which was far from ideal. D. Bridge Engineering Services 3.10 In April 1970, the government retained the services of two bridge engineers (supplied by NORCONSULT) to assist in the preparation of the detailed engineering cost estimates and bidding documents for the project bridges. Their work was generally satisfactory; however, the fact that the final design for the 1/ After the manuals did arrive, translation problems often developed. - A.5 - Terai road bridges had to be changed later because of shortage of structural steel raised the question of how well the design was adopted to the local environment. Also, the inaccuracy of the survey data prepared by the Depart- ment of Roads for the design of the pedestrian suspension bridges raised a question of the limits of the responsibility of the consultants as advisors in reviewing the designs. E. Technical Assistance 3.11 Provision for technical assistance was included in the original formulation of the project (para. 2.02). Before the start of the project, arrangements had been made for the UNDP to initially finance a six-man tech- nical assistance team (individual service contracts) over a two-year period. After the initial period the need for further assistance was to be reviewed. The services actuallylyrovided extended over a six year period and totaled about 173 man-months.-- The experts included a project manager, mechanical engineer, bridge engineer, road maintenance engineer and highway engineer. While the team provided assistance in bridge design, supervision and procure- ment to the Department of Roads, its main task was to provide assistance for the strengthening of the maintenance organization. 3.12 Originally it was contemplated that the technical assistance team would, after an initial study period, make recommendations for the improvement of the maintenance organization and then assist in their implementation. Unfortunately, the team's recommendations for the maintenance department were never implemented during the period of its service. Delays first occurred when the recommendations were lost in a fire which took place in a government office. Even after the recommendations were rewritten, delays still occurred and it was not until 1976, during the preparation of the second highway project, that the team's main recommendations concerning reorganization and financing started to be put into effect. Thus, the technical assistance team was not fully utilized. 3.13 The way in which the technical assistance team was organized also had some shortcomings. First of all, the UN project manager had to split his time between the first highway project and a large road feasibility study which was taking place during the same period. Also, since team members were contracted individually and arrived at different times, they were somewhat difficult to coordinate and work as a unit. The position of the bridge engineer was held by three different individuals and the performance of some of them was not satisfactory. In retrospect, some individuals believe that, in this partic- ular case, more success might have been obtained from the technical assistance if an organization, rather than individual experts, had been retained. IV. COSTS 4.01 The total project costs, excluding the UNDP technical assistance, exceeded the appraisal estimate, including contingencies, by about 30% and amounted to US$4.1 million (Table 4). Considering the world inflation which took place during the project execution period and the rate of inflation within Nepal of 54% (Consumer Price Index), the increase in cost is not 1/ The project engineer is counted at half time since he was also responsible for a separate highway feasibility study. - A.6 - surprising. The original contingency allowance (both price and quantity) was only about 10%. Since, except for the construction of one small maintenance workshop and the one depot, the project was executed as origin- ally planned, the increase in costs is mainly due to rises in prices. The equipment list was modified after being reviewed by the technical assistance team; but as can be seen on Table 2, the total quantity of equipment actually acquired in terms of appraisal prices was even slightly greater than that originally envisaged. 4.02 Large overruns occurred principally in two project components: suspension bridges and maintenance workshops. The long, drawn out construction period no doubt increased material costs; for instance, cement increased from NR's 18 per bag in 1970 to NR's 60 in 1975. In addition, for the suspension bridges, the transport cost involved with the isolated bridge sites greatly exceeded expectations. For the maintenance workshops, since designs were not available at the time of appraisal, only rough estimates were made. In addition, the workshops constructed were larger than those contemplated during the appraisal. V. PROCUREMENT AND DISBURSEMENTS 5.01 Since ICB procedures were new to the Department, delays occurred in the procurement of most project items. Particular problems were experienced with the procurement of spare parts where initially ICB procedures were being followed even for the purchase of low value items. Some difficulties also took place in the evaluation of bids since the Nepal government regulations provided that the lowest bid was to be accepted rather than the lowest evaluated bid. Also, many items which were in short supply might have been obtained more readily if the government considered imports from India as a foreign exchange component payable in hard currency rather than in Indian rupees. While IDA did provide procurement assistance, some delays might have been avoided if the assistance had come at an earlier date. 5.02 Because of the slow project implementation, disbursements lagged far behind appraisal estimates (Table 5). Some disbursements also have been held up because of contractual disputes and an order for additional spares has recently been placed. Taking into account outstanding transactions, it appears unlikely that the credit will be completely disbursed. Although total project costs increased, foreign exchange costs slightly declined and it is estimated that US$2.3 million of the US$2.5 million credit will be disbursed. Underruns in foreign exchange appear for the construction of the pedestrian suspension bridges and the workshops (Table 4). VI. INSTITUTIONAL DEVELOPMENT 6.01 There is no doubt that the Department of Roads has been strengthened by the experience gained in the execution of the project. Procurement procedures and road and equipment maintenance have improved. Overall however, the institution building aspects of the project are considered less successful. The UNDP Technical Assistance team made a number of recommendations for the improve- ment of the maintenance organization. However, as explained in paragraph 3.13, delays occurred in the implementation of a new maintenance organization and full advantage was not taken of the technical assistance provided under the project. Training opportunities were limited since no formal programs were established - A.7 - and without the new organization, on-the-job training lost most of its effec- tiveness. Institution-building efforts were also adversely affected by the frequent changes at the top levels of the Department, i.e., the position of the chief engineer of the Department of Roads was held by three individuals during the life of the project. VII. COVENANTS 7.01 The Credit Agreement included covenants on (a) the collection of information, (b) weight restrictions, (c) adequate maintenance, and (d) tech- nical assistance. In addition, a side letter was written concerning mainten- ance funding during negotiations. In most cases, the covenants are general in nature and because of the lack of quantitative goals, implementation success is difficult to measure. Collection of Information 7.02 During the project, information has been collected concerning road traffic and construction and road maintenance costs. In particular, an inventory system has been established for maintaining records on the Department's equipment, and recently an equipment rental charge system has been introduced. While the frequency and quality of road traffic counts has improved, a traffic ,counting program on a systematic basis has not yet been established. Weight Restrictions 7.03 In order to realize benefits from the replacement of road bridges, weight regulations have been revised. The maximum load per vehicle on the Kathmandu-Birganj highway has been increased from five tons to eight tons. While there are no vehicle size regulations and the load limits are difficult to enforce, the rugged nature of the terrain precludes the operation of ve- hicles much larger than the present five to seven-ton capacity trucks. The Department is now buying weighing scales. Adequate Maintenance 7.04 With the arrival of equipment and technical assistance, the level of maintenance has improved. Since the origin of the project, the provision of adequate maintenance funding has been of concern to the Association, and a separate side letter was written during negotiations concerning this point. During the early years of the project, while maintenance funding did increase, it did not fully take into account the expanding road network and rising costs (Table 6). In 1977, however, maintenance funding sharply increased, doubling the 1976 expenditure. Technical Assistance 7.05 Technical assistance financed by UNDP was engaged to assist with the project implementation (para. 3.12). However, not until the latter part of the project, after the technical assistance team had left in 1976, did the Department of Roads start to implement some of the team's recommendations concerning reorganization and financing (paras. 2.13 and 7.04). Only recently, during the preparation of the Second Highway Project, has the Department ac- cepted the need for further technical assistance. - A.8 - VIII. ECONOMIC RE-EVALUATION 8.01 During the appraisal, most project benefits were quantified in terms of user cost savings and the same basic approach has been adopted in the ex post evaluation. In order to adjust costs for general inflation, the Consumer Price Index (which is the only index available) has been used and all costs have been deflated into 1970 prices. During the execution of the project, the oil crisis occurred which significantly increased fuel prices and in turn increased vehicle operating cost and reduced transport demand. In 1970, the truck user cost was estimated to be about NR's 1.10/km. while in 1976 it was nearly double at NR's 2.10/km. Since this price increase was an important exogenous factor, not directly related to the project, the ex post analyses were done with user cost prices both before and after the oil crisis. Road Bridges 8.02 Initial heavy traffic in 1976 (550 and 360/day) on the two bridges located in Kathmandu was more than double that estimated at the time of the appraisal (Table 7). Bus traffic in particular was significantly higher. Appraisal estimates tried to take into account the expected loss of traffic to other roads and bridges which were being constructed nearby, but the actual traffic counts show that the construction of the nearby projects had relatively little effect on the bus routes. As a result of the higher traffic and the increase in fuel prices, rates of return for the two projects (34% and 39%) were more than double those estimated during the appraisal (Table 8). Even excluding the effect of the oil crisis, the ex post estimate (27% and 33%) is still significantly higher than the appraisal estimate. 8.03 In 1976, the bridges in the Terai also had considerably higher heavy truck traffic than the appraisal estimate (222 versus 48/day). During the appraisal, benefits were taken only for truck traffic going to the ropeway at Hetaura, since it was not known if weight restrictions would be lifted for the majority of traffic going past Hetaura to Kathmandu. Weight restrictions, however, have been lifted for the entire route from 5 tons to 8 tons and the proportion of the traffic which can take advantage of the relaxation in weight restrictions is more than quadruple that of the appraisal estimate. In the ex post analysis it is estimated that with the change in maximum weight limit, the average load of trucks increased by about 30%. The ex post economic rate of return for the project is estimated to be 31% versus 20% at the time of appraisal. Pedestrian Suspension Bridges 8.04 Because of the isolated nature of the pedestrian suspension bridges, traffic counts since the completion of the project have not yet been taken. Ex post economic rates of return have therefore been based on the projections included in the appraisal report together with the actual costs and timing of the project. Although construction cost increased by about 75% over the appraisal estimate, the effect on the rates of return was mitigated by two factors. First, the construction of the bridges was delayed and in the mean- time pedestrian traffic was projected to have increased. Secondly, the construction costs were deflated to eliminate the effects of general inflation. Only.in the case of the Ranighat bridge, where the costs were about 3 times higher than the appraisal estimate, did the rates of return drastically decline (from 25% to 12%). The expected economic returns for the other bridges, while - A.9 - lower than those estimated at appraisal, ranged from 12% to 24%. Maintenance Program 8.05 Maintenance benefits were measured using the same methodology as in the appraisal report. However, the following adjustments were made: (a) Actual costs were used. (b) No growth in traffic was assumed during the oil crisis in 1973-75 and for 1976 a 3% rate was esti- mated to reflect the gradual adjustment of traffic to higher fuel prices. Thereafter a 5% growth rate was projected. (c) The start of the benefit stream from the maintenance program was delayed a year because of the equipment procurement delays. (d) In addition, total benefits projected in the appraisal for 1973 to 1976 were reduced by 20% because of initial program delays and difficulties. Because of the relative increase in fuel prices and user costs, the ex post economic return of the maintenance program was higher than that estimated at appraisal (31% vs. 23%). Excluding the relative price increase in user costs because of the oil crisis, the economic return is estimated to be 13%. IX. ROLE OF THE ASSOCIATION 9.01 In this project, IDA provided technical support and financing for the improvement of highway maintenance, and area which, because of its unglamorous nature, is often neglected by both government and external assist- ance programs. Particularly in light of the recent rapid development of the road system, mainly through bilateral assistance, emphasis on road maintenance has been well placed. With the oil crisis and the rise in road user costs, the project is now expected to yield an economic return which is greater than that estimated at the time of appraisal. 9.02 Throughout the life of the project, supervision missions at regular intervals of about six months have been carried out. Besides assistance in technical and administrative matters, the Association has drawn the government's attention to the need to reorganize the highway department, increase maintenance funds and accept further technical assistance. Although progress has been delayed, government has recently responded to these needs. 9.03 In retrospect, implementation of the project might have been improved if IDA had (a) insisted on a more thorough design preparation for the bridges and the maintenance workshops, (b) insisted that spare parts be ordered at the same time that equipment orders were placed, (c) provided assistance in procurement and disbursement at an earlier date, (d) reviewed and approved the contract documents for the construction of the workshops, and (e) taken a firmer stand at an earlier date regarding the need to implement the reorganization of the maintenance department and to continue with further technical assistance. PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Actual and Expected Project Implementation Contractor/ Beginning of Completion of Consultant Bid Receipt Contract Award Work Work Project and Component Nationality Actual Expected Actual Expected Actual Expected Actual Expected Three Terai Nepal Constr- Road Bridges uction (Nepal) 4/71 3/71 9/71 7/71 2/72 9/71 4/76 1973 Two Kathmandu Nat'l Constr- 4/71 3/71 8/71 7/71 10/73 9/71 2/76 1973 Road Bridges uction Co. (Nepal) Fabrication Martin Burn 5/71 3/72 1971 3/72 3/73 3/72 Five Suspen- Ltd. (India sion Bridges Erection Five Department 1973 2/77 3/73 Suspension of Roads Bridges Purchase of Various 10/71 8/72 3/75 3/73 Maintenance Equipment Kathmandu Department 5/74 7/77 1974 Workshop of Roads Hitaura Department 7/77 1974 Workshop of Roads H Table 2 PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Road Maintenance Equipment (Units) Appraisal Actually Item Estimate Procured Air compressor 3 1 Air compressor, portable (complete with tools) 6 Bitumen heater, 1000 gallons 4 Bitumen distributor, 1000 gallons 2 2 Bitumen transfer pump 1 Concrete mixers 3 Concrete vibrator 4 Culvert mould (sets of three) 6 Crane, mobile 5 ton 1 Fuel tank, skid mounted 4 4 Gritter attachment 6 2 Gritters, towed 2 Grader, medium (110-115 h.p.) 5 5 Pick-up truck 6 12 Pump, non clog type 2" 4 Pump, non clog type 4" 2 Road roller, 3 wheel, 6/8 ton 4 7 Road roller, pneumatic self propelled 2 5 Road roller, vibrating hand control 4 12 Stone crusher (approximately 25 ton/hr) 2 5 Stone granulator 30" x 6" 4 Rock drill, hoses, fitments, etc. 12 12 Rock drill, portable 12 12 Station wagon, jeep type 1 1 Lowloading trailer 3 Truck, tipping, 5 ton 24 25 Front end loader 1-1/2 cu.yds., tracked 2 1 Front end loader 1-1/2 cu.yds., wheeled (with dozer attachment 4 7 Tractor industrial 3 Water truck 3 3 Water tank, towed 5 Motor cycle 16 Total Costs Using Appraisal Prices US$ 945,300 US$ 998,300 Actual Costs US$ 892,100 Table 3 PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Equipment Rehabilitated with Project Spare Parts Item No. Description ty 1. McDonald Road Roller 1 2. LW Dozers 3 3. WIBAU Bitumen Heater Blower 2 4. Steam Cleaner 1 5. D/D Motor Grader 1 6. Land Rovers 4 7. TL 12D Loader 2 8. Rock Drills 12 9. Bosch Nozzle Tester 1 10. Vibratory Roller (Deuz Engine) 2 11. Bitumen Heater 2 12. CPT Air Compressor 1 13. Hobart Welding Generator 1 14. Caterpillar Dozer 2 15. HD 16 Dozer 4 16. M 100 Grader 1 17. TMB Truck 9 18. Nissan Pick Up 1 19. Aveling Barford Dumper 1 20. Kemna Roller 4 21. VW Pick-Up 1 22. Vibratory Roller (Natz Engine) 1 TOTAL COST - US$180,000 PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Project Costs US Dollar Equivalent (millions) 1/ 2/ Overrun Appraisal Estimates- Actual Costs- (Underrun) Local Foreign Total Local Foreign Total I Road Bridges .41 .59 1.00 .53 .52 1.05 5 II Pedestrian Suspension Bridges .15 .26 .41 .55 .17 .72 76 III Maintenance Program (total) .07 .1.62 1.69 .61 1.64 2.25 33 Purchase of Equipment (.96) (.96) (.89) (.89) Equipment Rehabilitation (.16) (.16) (.18) (.18) Spare Parts (.17) (.17) (.28) (.28) Maintenance Workshops ) (.27) (.27) (.56) (.13) (.69) Workshop Tools ) (.10) (.10) Materials (.06) (.06) (.06) (.06) Undistributed (.07) (.07) (.05) (.05) IV Consultant Services .01 .03 .04 .01 .02 .03 (25) Sub-Total I - IV .64 2.50 3.14 1.70 2.35 4.05 29 V Technical Assistance .06 .20 .26 .10 .40 .50 92 Financed by UNDP _ TOTAL .70 2.70 3.40 1.80 2.75 4.55 34 1/ $1 = NR10.125 - Includes Contingencies 2/ Average estimated $1 = NR11.0 Table 5 PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Accumulated Disbursements (US$ million) Disbursements as IDA Fiscal Year Actual Total Appraisal Disbursement a Percentage of and Quarter Disbursement Estimate 1! Estimate Appraisal Estimates 1971 0.1 1972 1 0.02 2 0.02 3 0.02 4 0.02 1.40 1% 1973 1 0.02 2 0.07 3 0.30 4 0.49 2.20 22% 1974 1 0.82 2 0.86 3 0.91 4 1.03 2.50 41% 1975 1 1.22 2 1.23 3 1.32 4 1.40 2.50 56% 1976 1 1.40 2 1.50 3 1.67 4 1.80 2.50 72% 1977 1 1.90 2 1.90 3 2.00 4 2.00 2.50 80% 1978 1 2.00 2 2.14 3 2.16 4 2.50 86% Closing Dates 6/30/75 2/03/78 2/ 1/ Quarterly estimates not included in Appraisal Report. 2/ Final disbursement date. Table 6 PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Road Maintenance Funding (millions of NR's) Estimated Requirement Actual % 1970 5.0 3.5 70 1971 6.4 4.0 63 1972 8.2 6.0 73 1973 14.0 8.0 57 1974 16.8 14.7 87 1975 24.7 19.5 79 1976 29.9 22.3 75 1977 43.0 1978 40.0-2/ 1/ Includes funds for rehabilitation work. 2/ Estimated. PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223) Actual and Forecasted Traffic in 1976 (Average Daily Traffic) Bridge Trucks Buses Total (T + B) Forecasted Actual Forecasted Actual Forecasted Actual 1. Dhobi Khola 88 68 161 482 249 550 2. Bhisnumati 83 187 74 173 157 360 3. Terai Bridges 481/ 222 24 222 1/ Assumes traffic to ropeway only (70,000 tons - 8 tons per trip x 2) Table 8 PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Ex-Post and Appraisal Estimates of Economic Rates of Return Proportion Rate of Return of Total Appraisal Ex Post Item Investment Estimate Estimate Pre Oil Post Oil Crisis Crisis User Costs User Costs Road Bridges Dhobikhola 4.7 17 27 34 Bishnumati 4.9 14 33 39 Terai (3 bridges) 13.8 20 26 31 Pedestrian Suspension Bridges Kabeli 2.8 18 16 16 Tamor 2.4 22 16 16 Purtighat 2.6 23 19 19 Ranighat 5.5 25 12 12 Badighat 2.6 33 24 24 Maintenance Program 60.7 23 13 31 Weighted Average 100 22 16 29 PROJECT ODMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Ex Post: Benefit and Cost Streams (Millions of Rupees in Constant 1970 Prices) Dhobiknola Road Bridge Bishni Mati Road Bridge Terai Road Bridges Maintenance Program Additional 2/ 3/ 4/ Recurrent Capital Benefits7 Costs Benefits" Costs Benefits' Costs Benefits Costs Costs 1971 1972 1.28 2,8 1973 .39 .41 .57 .1 1.7 2.5 1974 .16 .17 .95 5.2 4.7 4.2 1975 .88 .91 2.17 7.0 3.1 5.7 1976 .55 .15 .71 .16 1.89 .06 9.6 1.8 3.9 1977 .58 .75 1.98 11.1 3.9 1.9 1978 .61 .78 2.08 12.6 3.9 1979 .64 .82 2.19 14.3 3.9 1980 .67 .86 2.30 16.1 3.9 1981 .70 .90 2.41 1982 .74 .95 2.53 1983 .77 1.00 2.66 1984 .81 1.05 2.79 1985 .85 1.10 2.93 1986 .90 1.15 3.08 1987 .94 1.21 3.23 1988 .99 1.28 3.39 1989 1.04 1.34 3.56 1990 1.09 1.41 3.74 1991 1.14 1.48 3.93 1992 1.20 1.55 4.13 1993 1.26 1.63 4.33 1994 1.32 1.70 4.55 1995 1.39 1.79 4.78 1/ Adjusted by Consumer Price Index-. 1976 = 154; 1975 157; 1974 - 142; 1973 - 118; 1972 - 106. 2/ 1976 Heavy traffic - 550 ADP; user cost savings per vehicle (km) = NR1.36 (2.10/1.54); distance savings = 2 kms.; growth rate - 57. 3/ 1976 Heavy traffic - 360 ADT; user cost savings per vehicle (km) = NR1.36 (2.10/1.54); distance savings = 4 kms.; growth rate - 5%. / 1976 Heavy traffic - 222 ADT: user cost savings per vehicle (km) - NR .41 (.63/1.54); distance savings - 57 kms.; growth rate - 5%. PROJECT COMPLETION REPORT NEPAL: FIRST HIGHWAY PROJECT (CREDIT 223-NEP) Ex Post Pedestrian Suspension Bridge Benefit and Cost Streams (Millions of Rupees in Constant 1970 Prices) KABELI TAMOR PURTIGHAT RANIGHAT BADIGHAT Benefital7 Costs BenefitaICosts Benefitah-Costs Benefita4rCosts Benefit; / Costs 1973 .12 .10 .11 .45 .22 1974 .20 .25 .09 .95 .46 1975 .40 .38 .17 .10 .51 .10 .25 1976 .23 .11 .08 .42 .21 .21 1977 .15 .12 .15 .22 .22 1978 .16 .12 .16 .23 .23 1979 .17 .13 .17 .24 .24 1980 .17 .13 .17 .26 .26 1981 .18 .14 .18 .27 .27 1982 .19 .15 .19 .28 .28 1983 .20 .15 .20 .30 .30 1984 .21 .16 .21 .31 .31 1985 .22 .17 .22 .33 .33 1986 .23 .18 .23 .34 .34 1987 .24 .19 .24 .36 .36 1988 .25 .20 .26 .38 .38 1989 .27 .21 .27 .40 .40 1990 .28 .22 .28 .42 .42 1991 .30 .23 .30 .44 .44 1992 .31 .24 .31 .46 .46 1993 .33 .25 .33 .48 .48 1994 .34 .26 .34 .51 .51 1995 .36 .28 .36 1996 .37 .38 Note: Benefit Growth Rate = 5% and Daily Wage Rate = NR12.5; Number of Days per Year = 120 Cost Deflated by Consumer Price Index: 1970 = 100, 1971 = 98, 1972 = 106, 1973 = 118, 1974 = 142, 1975 = 157, 1976 = 154 Time Savings Traffic in 1969 (professional Porters) 1/ 1 day 65 2/ 1day 50 3/ .5 day 140 4/ 1 day 100 5/ 1 day 100 M C>