Bolivia national transport study (Vol. 5 of 5) : Summary of final report

61812 V5 BOLIVIA NATIONAL TRANSPORT STUDY SUMMARVDF J. ' FINAL REPD~T PREPARED FOI='.. GOVERNMENT OF THE REPUBLIC OF BOLIVIA (MINISTRY OF TRANSPORT AND COMMUNICATIONS) INT.ERNATI'DNAL BANK FOR RECONSTRUCTION ~.NO OEVEJ,...OPMEN1· UNITED NATIONS DEVELOPMENT PROGRAMME PREPARED BY WILBUR SMITH AND ASSOCIATES IN ASSOCIATION WITI-1 CONSA SRL & ECOVIANA SRI_ LA PAZ ,BOLIVIA .JULY 19S1  BOLIVIA NATIONAL TRANSPORT STUDY SUMMARVDF FINAL REPDRT PREPARED FDR GOVERNMENT DF THE REPUBLIC DF BDLIVIA [MINISTRY DF TRANSPDRT AND CDMMUNICATIONS' INTERNATIDNAL BANK FOR RECDNSTRUCTIDN AND DEVELDPMENT UNITED NATIDNS DEVELOPMENT PROGRAMME PREPARED BY WILBUR SMITH AND ASSOCIATES IN ASSOCIATIDN WITH CDNSA SRL & ECOVIANA SRL LA PAZ I BDLIVIA .JULY'19a'1  BANKERS TRUST TOWER CABLE WILSMITH P. O. BOX 92 TELEX 57·3439 COLUMBIA, S. C. 29202 July, 1981 PHONE (803) 771-8844 Senor Cnl DEMA Rene Guzman Fortun Mr. James B. Newman Minister of Transport and Ports, Railways and Aviation Division Communications Latin America and Caribbean Regional La Paz Office Bolivia The World Bank Washington, D.C. U.S.A. Gentlemen: Wilbur Smith and Associates is pleased to submit this Final Report of Phase I of the Bolivia National Transport Study. The Report is in five volumes. Volumes I and II review the situation and present the main analyses, findings and recommendations. Volumes III and IV contain supplementary appendices and the fifth volume is a summary of the Report. The Report represents the conclusion of over two years effort by a professional team made up of consultant's staff and Bolivian nationals. During the course of the Study, several interim reports and technical papers were produced, culminating in a draft Final Report in ~ovember, 1980. The first review period was concluded in December with the final meeting of the Study Steering Committee, when all initial comments on the draft report were pre- sented by Bolivian entities and by the World Bank. A more lengthy review and discussion period followed in which additional valuable contributions were made to the Final Report. The Report presents and supports a recommended National Transport Plan set in the con- text of the expected development of the Bolivian economy over the next ten years, and with consideration for possible developments in the following ten years. It is not intended that the recommendations be taken as a fixed plan; forecasting the future is a hazardous task, and it is impossible to foresee all possible developments. Therefore, it is strongly recommended that the Government set up a permanent transport planning group, utiliz the Bolivian counterpart team involved in this Study, to monitor developments and adapt the Plan to changing circumstances. The first steps have been taken in this direction by selecting a counterpart team for Phase II of this Study. Hopefully, this will form a solid basis for the continuing transport planning process, and for a permanent National Transport Center. The cooperation and assistance we received throughout the Study from officers of the Government and others concerned with transport in Bolivia, is gratefully acknowledged. We also wish to recognize the contributions made by our colleagues on the national counter- part team, and by our local associate consultants, CONSA SRL and ECOVIANA SRL. We appreci- ate the opportunity to have participated in the study effort, and look forward to the imp- lementation of the recommendations. Respectfully submitted WILBUR SMITH AND ASSOCIATES ~r~ ~~~~ma~' smitf ALLIANCE, OH - AMMAN, JORDAN· BRISBANE - CAMDEN, NJ - CHARLESTON, SC - COLUMBIA, SC- FALLS CHURCH, VA· HONG KONG - HOUSTON KUALA LUMPUR, MALA YSIA - KNOXVILLE· LA PAZ, BOL/VIA - LEXINGTON, KY - LOS ANGELES - MELBOURNE - MIAMI - NEW HA VEN NEW YORK - PITTSBURGH - RALEIGH, NC· RICHMOND - ,SAN FRANCISCO· SANTA CRUZ, BOL/VIA -SINGAPORE TORONTO· WASHINGTON, DC  INDEX Page Geographical Background 1 Objectives of Transport Policy 3 Data Collection and Study Methodology 6 The Existing Transport System 9 Transport Costs and Tariffs 14 The Financial Framework of the Transport Modes 18 The Bolivian Economy 22 Resources Available for Transport Investment 24 EXisting and Future Transport Demand 26 Transport Projects Selected for Evaluation 29 Recommendations for Improvement and Maintenance of Existing Highways 31 Recommendations on New Roads and Other Transport Links in Remote Areas 35 RecoTllinendations on Rail Transport 39 Hecomrl'lendations on Air Transport 43 F.eco~i:lmended Improvements to International Transport Links 45 Recommendations on Organizational Aspects of Transport. 47 Recommendations on Future Tariff Policy 49 Pro~osed Transport Investment Plan 52 Conclusions 57 Abbreviations Used in the Study Inside the Back Cover TABLE l~umber Page 1 Investment Program by Mode 55 FIGURES Follows Nur.lber Page 1 Analysis Zones 8 2 Railroad Rehabilitation: Work Completed, Programmed and Planned 10 3 Accessibility for Ground Transport 14 4 1989 Development Pattern 23 5 1989 Daily Road Vehicle r.1ovements 29 b Roads Recommended for the 1980s 31 7 Annual Tonnage Flows by Rail in 1977 and 1989 40 8 Candidate Rail Interconnection projects 40 -;-  FIGURES (Cont. ) Follows Number Page 9 Recommended Airport Improvements to 1989 44 10 Existing Connections with Ocean Ports 45 11 A Possible Transport System for the Year 2000 57 Fold-out Reference Map Inside the Back Cover APPENDICES Number 1 Governmental Institutions and Study Participation 61 2 Reports Issued During the Study 63 3 Contents of the Other Volumes 65 -ii-  NOTE ON CURRENCY AND RATE OF EXCHANGE All costs quoted in this report are expressed in 1977 pesos when $ US 1 = $b 20. Due to inflation, the value of the peso has declined so that approximately $b 1 (1977) $b 1.6 (1981). Also, the exchange rate has changed so that in 1981, $US 1 = $b 25.  SUMMARY OF FINAL REPORT In October 1974, an agreement was signed between the Bolivian Government and the United Nations Development Programme to undertake a national transport study. Two phases were specified. The first phase was to develop a national transport policy and also to identify investment projects suitable for international funding agencies, such as the World Bank. The second phase was to provide technical assistance to the Bolivian Government in implementing the Phase 1 recommendations. The World Bank was appointed executing agency for the pro- ject. In October 1978, the Bank contacted Wi~bur Smith and Associates to carry out Phase 1, and at the same time the Govern- ment formed a team of Bolivian professionals to work with the consultants. The joint team of more than 30 professionals com- pleted Phase 1 in November 1980 and the analyses and findings are presented in this report. A map of Bolivia is provided inside the back cover, which can fold out for ease of reference while reading this report. GEOGRAPHICAL BACKGROUND Bolivia covers an area of over one million square kilorneters--oreater than the size of France and Spain to- gether--but has only five million inhabitants. It is land-locked, and access to the sea requires transit of one of its five neighbors--Peru, Chile, Argentina, Paraguay or Brazil. Bolivia is divided into nine administrative departments. The national administrative capital is La Paz, where all ministries and embassies are located, but the legal capital is Sucre where the Supreme Court sits. The country presents sharp contrasts in terrain. The sparsely populated regions of the north and east consist of vast plains with vegetation ranging from open grassland--sometimes dry, sometimes flooded--to dense rain forests in the north. These plains lie between 200 and 400 meters above sea level and cover almost two thirds of the country. The northern part con- -1- tains large rivers, many of which are navigable and all draining northward into the Madera River, which itself is a major tribu- tary of the Amazon. The eastern part drains southwards to the River Plate basin. Water courses in the east are not well de- fined and only the Paraguay River, which touches the country in the southeastern corner at Puerto Busch, is navigable. The west and south of the country are dominated by the Andes Mountains, with peaks of over 6,000 meters. In Bolivia, the Andes are divided into two ranges, the Eastern and Western Cordilleras, with the Western Cordillera marking the frontier with Chile. Between the two ranges lies the 4,000-meters high plain of the Altiplano. Up to 200 km wide, the Altiplano runs southwards from Lake Titicaca (the highest navigable lake in the World) towards the border with Argentina. The northern end of the Altiplano near Lake Titicaca and La Paz is densely populated but the southern end is desert. Patacamaya - Tambo Quemado Highway on the Altiplano The Eastern Cordillera of the Andes separates the high Altiplano from the northern and eastern lowlands. Up to 300 km wide, with unstable mountains and broken valleys, it presents a formidable barrier to communications. Alignments of railroads and highways are tortuous, and heavy rains ln the wet season often cause land slides, temporarily blocking routes. Transport investment planning in the past has been dominated by the pro- blems of this region since most of Bolivia's population lives in or near the Eastern Cordillera. The important cities of Cochabamba, Sucre and Tarija are located in the larger valleys and the 4,000-meter high mining city of Potosi is situated on the -2- western fringe. The main transport axis of the country--linking the Altiplano cities of La Paz and Oruro with the valley city of Cochabamba and the lowland city of Santa Cruz--passes through the widest section of the Eastern Cordillera. Transport is strongly affected by the wet and dry season cycle. The wet season occurs in the four summer months of December through March when routes can be interrupted by land slides or flooding. In the northern and eastern regions, many communities have ground transport only during the dry season, and consequently depend on services by river and air for the rest of the year. View of the Ichilo River in the Region of Puerto Villarroel OBJECTIVES OF TRANSPORT POLICY The main purpose of the Study was to define a policy to cover all aspects of inter-urban transport--infrastructure, main- tenance, tariffs, subsidies, regulation and administration. Be- fore presenting the analyses and recommendations of the Study, the basic objectives of transport policy as seen by the Study are discussed. Transport policy is concerned with three main areas: i) Use of existing infrastructure ii) Regulation of operators iii) Improvement of transport infrastructure Use of Existing Intrastructure - The use of existing trans- port facilities to best advantage implies: An Economic Maintenance Policy - The method and fre- quency of maintenance should be calculated to minimize the -3- overall cost of transport--the sum of vehicle operating, track maintenance and investment costs--on each link of the network. Optimal Pricing Policies - The volume of traffic and the choice of mode are influenced by tariffs. High tariffs may impede economic development. In Bolivia, where distances are long and transport is inevitably costly, tariff policy, by attracting traffic to the modes with lowest marginal costs, could help to reduce the average costs of transport to the community. Also, since there is The bus station at Sucre ample spare capacity at all times on practically the entire transport infrastructure, it is important not to suppress traffic and the activity that it reflects by tariffs need- lessly higher than the marginal costs attributable to that traffic. Regulation of Vehicles and Drivers - It is universally accepted that questions of safety require regulation of veh- icle design and maintenance, and also of driving standards. It should be considered whether Bolivian regulations are adequate and effectively enforced, particularly in view of the difficult and dangerous nature of many of the roads. Regulation of vehicle size and weight is also generally accepted as desirable in order to prevent undue damage to road surfaces and obstruction by oversize vehicles. Social Subsidies - It may be considered deSirable, for non-economic reasons, to relieve isolated and remote com- munities from some of the costs of transport. This may be -4-  done by remission of taxes or by payment of grants towards the provision of cheap and frequent services by bus, train or plane. Regulation of Operators - The second main area of transport policy concerns the efficient provision of transport services on the available infrastructure, subject to the various charges and regulations discussed. The basic objective is to obtain, as cheaply as possible, services that match consumers' demand in terms of frequency, convenience and reliability. The most important condition is the avoidance of monopoly power and, with it, price-fixing. Where traffic volumes are reasonably large, this is normally not a problem; monopolies are easily broken by allowing free entry into the industry. But where traffic volumes are small, monopoly may flourish, and this seems to be a problem in Bolivia, particularly in the trucking industry. It may be desirable in such cases to control rates and to take action against restrictive practices by operators, as discussed later. There is no way in which a particular policy on competition can be proved the best. One can only put forward the arguments for and against, in the Bolivian situation, and point to experience elsewhere. This is an area where experience and judgement are necessary. Improvement of Transport Infrastructure Only when the existing infrastructure is well managed and the services operating upon it are efficiently organized, is one well placed to consider the third area of transport policy; namely the selection of projects for improving and expanding infrastructure. La Paz - Cotapata Highway at La Cumbre -5- A great deal of improvement is desirable, for both economic and social objectives, but the cost would far exceed the resources that could conceivably be obtained for the purpose. The problem of choosing the best projects is not easy. As far as economic objectives are concerned, cost-benefit analysis facilitates sensible conclusions. A more difficult pro- blem is to place values on non-economic objectives, e.g., the connection of isolated communities or assistance to under- privileged sections of society. Projects with such objectives may yield low economic returns. The best approach to the problem is to show (a) the benefits expected in physical terms, e.g., the numbers of people affected and the amount of use they are likely to make of the facilities provided; and (b) the opportunity cost, i.e., the alternative benefits to be sacrificed to make this project possible. It is also important to (c) ensure that cheaper ways of producing the same or similar benefits are not neglected. The final assessment must be a political one, but often a clear statement of the facts will pOint irresistibly towards the right conclusion. DATA COLLECTION AND STUDY METHODOLOGY The Study was divided into three logical and conventional phases: first, collection of data describing the current trans- port situation; secondly, forecasting the ways in which trans- port needs and problems could develop in the next 20 years, and identifying the options for improving the transport system to meet the challenge; and thirdly, an evaluation of those options, subject primarily to economic constraints, leading to recommenda- tions for structural and organizational improvements to the sys- tem. Data Collection - In order to acquire a good knowledge of the transport situation, inventories were compiled of the infra- structure--roads, railroads, airports, ports and pipelines--and surveys were made of transport services and traffic on all modes. Information was collected about the organization, regulation, tariffs, costs and financial position of the state transport authorities, and of private operators of trucks, buses, aircraft and river boats. The principal sources of transport data were as follows: -6-  ITEM PRINCIPAL SOURCE Road Infrastructure National Road Service (SNC) inventories Road Movements Special survey of road users conducted by the Study Road Transport Operations Interviews with bus and truck operators and the regulating agencies Rail Infrastructure National Railroad Company (ENFE) inventories Rail Movements (Freight and ENFE computer tapes Passenger) Air Infrastructure National Airport Administra .... tion (AASANA) inventories Air Passenger Movements Airline records (tAB, TAM) Air Freight Movements Ministry of Transport records of the non-regular air trans- port companies River System Description Hydrographic Service of the Navy (SHN) records River Movements Bolivian Navy (FN) records Pipelines National Hydrocarbons Company (YPFB) inventories and records Foreign Trade National Statistics Institute (INE) COmputer tape~ The major data COllection exercise by the Study was the roadside interview survey; 135,000 interviews of vehicle drivers Interview with a Truck Driver near Sucre -7- were made throughout the country in 1978 during the wet season (February and March) and dry season (June). Forecasting - For forecasting the future demand for trans- port, and to assess the impact of new transport projects, a mathematical computer model was developed. This model can analyze in a systematic manner the many aspects of society and the economy--popu1ation, employment, income, industrial pro- duction, etc.-- and then makes estimates of passenger, freight and vehicle movements for a hypothetical transport system. Thus, it is possible to postulate a set of future conditions--for example, migration to the Beni, fUrther agricultural development near Santa Cruz, a new railroad between Santa Cruz and Cochabamba, new factories in Oruro--and then use the model to predict the transport movements produced by these changes. The model involves over 2,500 separate computing stages and generally takes about three weeks to process on the computer. It was used to forecast traffic under four separate sets of assumptions for the year 1989 and one for the year 1999. To predict transport flows, the model required input para- meters describing the two forecast years selected for the Study, 1989 and 1999. These parameters were prepared from predictions of the transport system, transport costs and, of particular importance, the country's economy. Guidelines on economic growth and possible development patterns were formulated following a workshop organized by the Study in June, 1979, in which repre- sentatives from the main Bolivian institutions participated. Population and income were estimated for each of 77 analysis zones into which the country had been divided, (see Figure 1) as were the production, consumption, imports and exports of goods, categorized by 39 commodity groups. Eyaluation - All transport projects were evaluated on their economic merit, mostly by the conventional cost-saving method whereby benefits to both existing and generated traffic are esti- mated directly from reductions in transport costs brought about by the project. Most of the evaluations were based on model re- sults but some projects, notably international links, were not included in the model and were examined manually. A separate air model was used to generate air passenger flows. Most road pro- jects, including alternative highway maintenance poliCies, were evaluated using the Highway Design and Maintenance Standards Model (HOM) (1). This procedure also made use of traffic pre- dictions from the main model. (1) Highway Design and rl!aintenance Standards ~10de1 (HOM), Transportation, Water and Telecommunications Department, World Bank, Washington, USA, June 1979, revised January 1980. -8-  ! ~ • IO"JE CErln RCIC 50 0 100 200Km. I ! I I 47 N,;MBEP o () 11 l> () () o ./ (//REPeR r ANALYSIS ZONES FIGURE 1  Some projects entailed new extensions to the transport sys- tem, notably penetration roads in the remote northern and eastern regions, on which all or most of the traffic would be newly generated. The cost-saving method was not applicable to such projects and the producer surplus method, which attempts to place a net value directly on the economic activity generated by the new facility, was used instead. Following economic evaluation, questions of regional distri- bution and social policy were considered before an investment program was drawn up. The recommended investment plan takes into account the budget likely to be available for transport invest- ment. THE EXISTING TRANSPORT SYSTEM Bolivia is served by five main modes of transport: rail- road, highway, water (river and lake) pipeline and air. This section describes briefly the principal characteristics of each mode. The disposition of transport infrastructure is shown in the fold-out map at the end of this volume. Railroads - The rail system, operated by the National Rail Company ENFE, is comparatively extensive with 3,643 km of narrow gauge, single track line, divided between the eastern and the Andean systems. Currently, these systems are connected only by means of a long detour passing through Argentina. The rail system was built principally to connect Bolivia with ocean ports and connections are currently in use to ports in Chile, Argentina, Brazil and (via a ferry on Lake Titicaca) Peru. Freight train on the Santa Cruz - Corumba line -9- With the exception of Peru, where standard gauge is used, all these port connections are one meter gauge as in Bolivia. Almost invariably, the railroads were originally built with the minimum possible investment, using light rails and wooden sleepers placed without ballast. As a result, the system is now in poor condition, with the exception of 433 km of track rehabilitated(2) with World Bank help since 1973. Figure 2 shows the scope and progress of the rehabilitation program. For the most part, the track is stable. Three major exceptions are Oruro-Cochabamba, Atocha-Villaz6n and Taperas-Robore (on the Santa Cruz-Corumba line). ENFE equipment can be summarized as follows: • • Diesel-electric locomotives Diesel-hydraulic locomotives 54 9 • Ferrobuses 14 • Passenger cars 187 (98 purchased after 1950} • Freight wagons (general) 1,927 (1,145 purchased after 1973} • Freight wagons (ENFE Use) 140 • Freight wagons (Own account-- mainly YPFB) 192 In 1979, ENFE carried 1,212,000 passengers and 1,196,000 tons of freight. Of the latter, over three-quarters was foreign trade traffic, mainly imports (three-quarters of foreign trade traffic by rail). Highways - The road system is also extensive, but com- paratively primitive, with only 1,289 km of paved roads. In December, 1978, the system was as follows (in kilometers): ROAD CI.!ASa PAVED GEAYEL EAETH TOTAL Primary 1,203 3,209 963 5,375 Secondary 28 1,306 2,936 4,270 Feeder Roads 58 2,Ut3 26 d~42 2~,18.3 TOTAL 1,289 6,798 30,741 38,828 Mainly because of insufficient funding for maintenance, the road system is in poor condition. The older paved roads have (2) At December 1979 -10-  1 LEGEND 50 0 ~ 100 ZOOKm . i>. or ............. ++++++ REHABILITATION COMPLETED (PHASES 1-3) CURRENT PROGRAM TO BE COMPLETED BY 1981 (PHASES 1-3 ) ~ ~ ............... TENTATIVELY PROGRAMMED (PHASE 4) A (;. ++++++- OTHER RAIL LINES ~ <, ... () 11\ ~ 2 0 'TJ ~ () '1\ ~ () 0 ARGENTINA RAILROAD REHABILITATION: WORK COMPLETED, PROGRAMMED AND PLANNED FIGURE 2 UXi""" [lmil/' and AOfWcialeo been allowed to deteriorate badly so that many are now in need of rehabilitation. Gravel roads, although frequently graded, suffer from use of over-sized surface materials while earth roads re- ceive little maintenance. Badly deteriorated section of the Guabira - Yapacanl Highway Almost all the paved roads lie on, or are near, the axis La Paz - Oruro Cochabamba Santa Cruz. Traffic volumes are generally low with only 300 km carrying more than 1,000 vehicles per day in 1977 (all near the main cities). The La Paz - Oruro highway was the only inter-urban connection to exceed 500 vehicles per day throughout its length in 1977. On average, two-thirds of all interurban traffic are trucks or vans and only 15 percent are private passenger vehicles. Freight load factors on trucks are low with 55 percent recorded without load, but many are used to carry passengers. Inter-urban bus load factors are high at 93 percent average. The National Road Service (SNC) is an autonomous agency under the Ministry of Transport and Communications, charged with planning, constructing, maintaining and administering highways in Bolivia. Overall, it employs 5,211 persons of whom 194 are engineers, 501 technicians, 4,329 manual workers and 187 others (1979). Public road transport is largely provided by drivers operating their own vehicle. They must belong to a syndicate and no member may own more than two vehicles. There are 86 syndi- cates for non-urban transport and these are grouped into ten federations, all belonging to the Bolivian Confederation of Drivers. Transport cooperatives and private transport companies -11- are also recognized by the State, but their activities are limited to the domestic transport of passengers and the inter- national transport of passengers and cargo. The Ministry of Transport and Communications fixes transport tariffs and has the legal power to regulate road transport. Water Transport - The country is served by two major river systems. The Beni-Madre de Dios-Orthon, Ichilo-Mamore, and Ite- nez, all located in Northern Bolivia, feed the Madera River which flows into the Amazon. Unfortunately, although some 5,000 km of this 10,000 km system is navigable within Bolivia, access to the Amazon, and also between some of the rivers, is blocked by rap- ids. The main river of this system is the Ichilo-Mamore, which carried about 200,000 tons of goods traffic in 1978. Along the Ichilo-Mamore system, there are three main ports: (i) Puerto Villarroel, which is connected with Cochabamba by a 240 km long road; (ii) Puerto Varador and Puerto Almacen near Trinidad; and (iii) Puerto Guayaramerin. About 82 percent of the recorded goods movements on the Ichilo-Mamore are between these ports: the remaining 18 percent are almost all between the three main ports and other intermediate river ports. Puerto Villarroel on the Ichilo River Southeastern Bolivia drains into the River Plate system and there is access via the Paraguay River from Corumba (in Brazil) and Puerto Busch. This river is currently used for exports of about 100,000 tons of iron ore per year from MutGn, and for about 2,000 tons per year of agricultural traffic, all via Corumba. Barge trains of up to 9,000 ton capacity can be used on this river, compared with boat sizes of only 300 tons on the northern river system. -12-  Lake Titicaca is the highest navigable lake in the World, and there are regular services between Guaqui and Chaguaya (both in Bolivia) and Puno (in Peru). About 120,000 tons were carried on these services in 1977. The Port of Guaqui on Lake Titicaca Pipelines - The country is served by an extensive system of pipelines operated by the National Hydrocarbon Company {YPFB)--about 3,800 km for crude oil and petroleum products and 900 km for gas. Crude oil pipelines are being increasingly used for petroleum products as exports of crude oil ,decline and domestic refining increases. AiL - Due to poor land connections, many of the remote regions are served principally by air. There are over 600 air- ports and airfields in Bolivia but just thirty-three are con- trolled by the National Airports Administration (AASANA). Of these, six have paved runways (La Paz, Cochabamba, Santa Cruz, Sucre, Tarija and Trinidad). The main passenger air services are operated by Lloyd Aereo Boliviano (LAB), but additional services are operated by the Air Force (TAM) and over 100 private air taxi companies. Air freight is mainly carried by 25 non-regular air companies operating 1940s vintage aircraft, principally to carry meat from the Beni to the Altiplano. Overall View - Volumes are generally low on all modes of transport. Only 300 km of highway carried more than 1,000 vehicles per day in 1977, and no unpaved road carried more than 350 vehicles per day. The total rail system carried only 1.2 million tons of freight and the same number of passengers. Air movements are similarly light, with the maximum takeoffs and -13- landings per year registered at Trinidad with 38,000 (mainly light aircraft), compared with a capacity of at least 200,000 for a single runway. As shown in Figure 3, it is estimated that 36 percent of the total land area has no land connection with the rest of the country and therefore depends entirely on river and air trans- port. An additional 31 percent is served by land only during the six-month dry season. Hence, only about one-quarter of the country (albeit with 86 percent of the population) can be con- sidered to have land access during the entire year. River crossing on the La Paz - Trinidad Highway, passable only in the dry season It is concluded that it is basic access and the lowering of transport costs, rather than additional capacity, that is mostly required to improve transport conditions. This may imply the construction of roads into currently inaccessible regions, but these must be seen in the light of the migration that is needed to settle such areas. Much more important is the improvement of the existing infrastructure to reduce maintenance and operating costs. TRANSPORT COSTS AND TARIFFS The characteristics of transport infrastructure are re- flected in the costs and tariffs of moving goods and passengers. Transport costs, the reduction of which is the principal benefit from investment in infrastructure, were analyzed in-depth for the various modes. They were defined in terms of economic or re- source costs, in constant 1977 pesos. However, this does not mean constant prices, and relative changes of transport cost com- ponents were taken into account; for example, substantial increases in fuel costs were projected in the analysis of future -14-  l~ NO LAND CONNECTIONS ALTIPLANO WITH DURING ENTIRE YEAR 50 0 100 200 Km . ! ! I a o 11\ ) 2 RAILROAD OPEN ENTIRE YEAR a ~ ) o o o ACCESSIBILITY FOR GROUND TRANSPORT FIGURE 3 transport costs and flows. In general, transport costs are expected to rise by 10 to 20 percent in real terms between 1977 and 1989. The main features of the cost analyses for each mode are discussed below. Tariffs, which vary considerably within each mode, are not discussed further in this summary report. Railroads - The accounts of the National Railroad Company were the basis for an extensive analysis of rail transport costs. Emphasis was placed on the determination of variable and marginal costs of transport. The fixed costs, which are incurred if a line is to be used at all, were also determined for each section of the network. Because of the generally low traffic levels, these fixed costs (together with the costs of central adminis- tration) account for two-thirds of total railroad costs, an unusually high proportion. Costs vary by line, but average costs in 1977 were as follows: ANDEAN EASTERN TRAFFIC , Variable Fixed VariabLe Fixed (1977 pesos) Freight wagon load (per t-km) 0.32 0.64 0.17 0.57 Passenger-Train (per pass.-km) 0.22 0.42 0.19 0.59 -Perrobus (per pass.-km) 0.16 0.27 0.13 0.33 Ferrobus at Oruro -15-  Road Transport - The dispersed nature of the industry made it necessary to perform extensive surveys to obtain reliable information, both on tariffs and on the costs of providing ser- vices. Costs were derived from an analysis of the various com- ponents, such as vehicle depreciation and interest, driver's salary and the expenses for fuel, tires, spare parts, repairs and overhead. Also investigated was vehicle usage, in terms of vehicle life and annual kilometers driven. Together with the costs of road maintenance, these were used in a series of formulae to estimate transport costs as a function of road sur- face type and geometric characteristics. Average costs in 1977 varied by surface type as follows: PAVED GRAVEL EARTH Passenger (pesos per pass.-km) 0.19 0.24 0.30 Freight (pesos per ton-km) 0.90 1.40 1.87 Truck between Santa Cruz and Trinidad Riyer - River costs were derived mainly from the results of a survey of boat owners. Costs vary from $b 0.3 to $b 0.9 per ton-kilometer on the Ichilo-Mamore system depending on length of travel, size of boat and direction of travel. Unit costs on the other rivers of the north were generally higher owing to the smaller boats used. Costs were lower on the Paraguay River, where very much larger boats can be used, at about $b 0.12 per ton km. -16-  Pipelines - Pipeline costs depend on volume of throughput and size of pipe. Typical costs are shown below for petroleum, or petroleum product transport. UNIT COST PIPE SIZE VOLUME Variable Fixed (inches) (Barrels per day) (pesos 'per ton-kilometer) 4 4,500 0.12 0.43 2,000 0.27 0.91 8 25,00Q 0.04 0.18 6,000 0.13 0.61 Pipeline river crossing north of Sucre Air - Costs vary widely depending upon aircraft type, load factor and operating region. In particular, the high altitude of the Altiplano (4000 meters) restricts loads carried. Typical costs are as follows: MODE AIRCRAFT UNIT COSTS (pesos per pass.-km or ton-km offered) Passenger Fairchild F27 1.5 Boeing 727-100 0.7 Freight Boeing 707 2.2 Curtiss C46-Lowland 3.7 -Altiplano 4.4 -17- THE FINANCIAL FRAMEWORK OF THE TRANSPORT MODES As a starting point to the analysis of transport pricing policy, the financial condition of each mode was examined. Recommended policy is discussed later in this report. Railroads - The railroads are unique in that one organization (ENFE) is responsible for investment, maintenance and operation. A stated goal of ENFE is self-sufficiency, but recent figures show that this is not being achieved. 1976 1977 1978 1979 (millions of current pes'Q"'S') ENFE expenditures-operation 484 518 637 696 -other 242 294 330 445 726 812 967 1141 ENFE income-passengers 78 88 92 88 -freight 509 588 666 660 -other 51 67 58 84 638 743 816 832 Deficit 88 69 151 309 ENFE relies heavily on freight (particularly international) for income. Clearly, they are in a position of acute financial difficulty. Traffic receipts in 1979 were disappointing and, un- less something is done, there can be no reason for optimism in Modern train in La Paz Station -18- the next few years. There must soon be either a big change in tariffs, which might not remove the deficit, or a change in ENFE's financial obligations. Recommendations are presented later in this report. Highways - Financially, the roads are the most complex part of the transport system because there is no generally accepted way of charging for their use. The National Road Service (SNC) is the agency responsible for all the roads covered by this Study; recent income and expenditure are summarized below: ITEM 1976 1977 1978 1979 (millionsor current pesos) Expenditure - Maintenance - Improvements 169 65 231 95 270 120 331 151 - Construction Sub-Total 4 8 662 838 1164 - 1143 1533 - 1077 1559 Income - National Treasury 536 864 890 827 - Foreign Credits 134 297 506 581 - User Charges (paid direct to SNC) 14 16 15 17 - Other Sub-Total 5 689 27 1204 137 1548 1484 59 In 1976-79, 63 percent of SNC revenue came from the Treasury and 31 percent from lending agencies. Little more than 1 percent came directly from road users. It is quite reasonable, in view Imports of cars from the Port of Arica (Chile) -19- of the high expenditure on investment, that much of this should be financed by borrowing. The direct contribution from road users comes largely from transit tolls but the revenue of $b 9.83 million in 1979 only just exceeded the cost of running the trans- sit stations. Indirectly, road users pay far more, through fuel tax and customs duties on vehicles and vehicle parts. These pay- ments do not go directly to SNC but are certainly user charges. They amounted to 382, 309, 392 and 590 million pesos for each of the four years 1976 to 1979 respectively, which comfortably covered costs of road maintenance and minor improvements. It is difficult to discover the true financial position of road transport operators. In 1977, it is believed that they realized a loss, but sUbstantial tariff raises in 1979 and 1980 have probably now corrected the situation. Water Transport - As with road transport operators, it is not easy to identify the true financial position of the operators, but the situation on the Mamore may be indicative. Tariffs were fixed in 1974 and remained unchanged until 1980 when, after a petition by boat owners, they were substantially raised. Between 1974 and 1980, the Bolivian retail price index rose by 80 to 90 percent, and it is difficult to see how boat operators survived unless they were making large profits in 1974, or else were receiving tariffs above the official rate. Even at the end of the period, just before the tariffs were raised, there appeared to be excess capacity on the Mamore and no sign that operators were going out of business. In the circumstances it would be difficult without an in-depth study of all relevant factors, to come to a view about the true financial position of this sector. Air Transport - Information is available from Lloyd Aereo Boliviano (LAB) which is summarized below: 1978 1979 (millions of current pesos) Expenditure - Passengers 815 1199 - Debt Service 104 225 - Other 86 (12) Sub-Total I'OlfS" 14I2 Income .... Passengers 694 954 - Other 352 384 SUb-Total TIiTb n3"S' Profit (Deficit) 41 (74) -20-  In order to correct this poor financial situation, domestic fares for LAB were increased in early 1981 by approximately 40 percent (although there were regional variations). This change came too late for detailed analysis by the Study, but it is thought that the increase has corrected LAB's financial position. Boeing jet of Lloyd Aereo Boliviano Financial data for the Airports Administration (AASANA) were available for 1978 only. These show the following: (millions) Operating Costs $b 113 Depreciation and Interest 48 Subtotal $b 161 Income $b 96 Deficit 65 These figures indicate that AASANA was unable to cover even its operating costs. In December, 1979, a 65 percent increase in tariffs was approved but even so, AASANA will find it hard to finance new investment costs out of income. -21- THE BOLIVIAN ECONOMY The future use of transport services depends on a number of socio-economic factors that are behind the generation of trans- port demand. These include population, its distribution between urban and rural areas, income levels, location of industry, de- mand for industrial consumption, imports and exports. To quantify these parameters for each of the 77 analysis zones, it was first necessary to make a general assessment of the national economy and its prospects. Resources ~ Bolivia is rich in natural resources, containing a wide variety of climates, soils, vegetation and geological structure. Some 87 percent of the land is suitable for agricultural production~ 1 percent of the land is used for farming and about 40 percent for extensive cattle raising. Virtually every type of crop, from tropical to temperate, can be grown. There are vast areas suitable for livestock of every kind. Enormous forests contain large supplies of valuable timber and, although the country lacks sea coast, it possesses large rivers and lakes well stocked with fish. Despite the abundance of agricultural potential, Bolivia is better known for her wealth in minerals. Practically every valuable mineral is produced, except coal and bauxite, and even the latter is thought to be available. The lack of coal is com- pensated for by substantial reserves of oil and natural gas. These generous resources are the heritage of a comparatively tiny population--about 5 million. Lack of manpower in some regions is doubtless one reason why the natural potential of the country remains largely untouched. Recent Growth - The gross domestic product (GDP) increased by 51 percent between 1970 and 1978, but this is exaggerated by a shift of many people from subsistence into the cash economy. One twelfth of the GDP was devoted to transport and communications. The value of m1n1ng exports stagnated from 1970 to 1978, de- clining from 89 to 71 percent of recorded foreign currency earn- ings. Natural gas earnings rose from 0 to 11 percent, and agri- cultural products from 3 to 6 percent. This latter trend starts to reflect the potential of the agricultural sector which, over- all, has experienced an impressive growth over the past decades. Having had to import many of its food needs prior to the 1952 -22- revolution, the country is now largely self-sufficient in this aspect, with the notable exception of wheat and SOme other grains. Export crude oil pipeline to Arica (Chile) The Future - After a relatively rapid growth during most of the 1970s, Bolivia now faces severe economic difficulties for a variety of reasons which include the high level of foreign debt, the decline of petroleum production and the general state of the world economy. Anticipating a rise of natural gas exports in the relatively near future, the economy is projected to resume a faster growth rate by the mid-1980s. There exists, however, a wide range of development oppor- tunities, and it is therefore difficult to predict the future economy in the detail required for transport projections. For this reason, it was decided to formulate three alternative development patterns for 1999 (designated A, C and D B was discarded at an early stage), taking into account several levels of GDP, different emphases on the growth of the primary versus the secondary sector, and different regional distributions of development. This was complemented by a single pattern for 1989, (shown in Figure 4) since much of the development of the 1980s is already started or committed. The total GDP was projected to -23- rise by 71 percent from 1977 to 1989, and by between 54 and 106 percent from 1989 to 1999, depending on the development pattern. Goods production and consumption (in tonnage terms) would more than double by 1989, with further increases thereafter. A summary of the socio-economic variables derived for 1977 and projected to 1989 and 1999 are summarized below. ---.Y!.12 population (1 ) 5,156 7,165 9,577 9,682 9,682 (1) Dispersed population 2,556 3,038 3,486 3,522 3,450 (1) Economically active population 1,660 2,401 3,354 3,391 3,391 GDP ($b million) (2) 68,800 117,BOO 181,300 203,400 241,700 (2 ) GDP per head, overall 13,350 16,440 18,930 21,000 24,960 (2) GDP per head, dispersed 3,320 4,370 5,870 6,510 7,810 c;:;1' per head, non-dispersed (2) 23,200 25,330 26,400 29,300 34,460 Gooda production and consumption (3}17,500 41,048 55,738 60,614 70,117 (1) Thousands. (2) At 1977 prices. (3) Thousands of tons, including imports and exports. The relationships established between production, con- sumption, imports and exports are summarized below. PRODUCTION IMPORTS TOTAL EXPORTS CONSUMP. GDP ("thousands of tons) ($bmmion) 1977 16,811 689 17,500 3,173 14,327 68,800 1989 39,386 1,661 41,047 11,685 29,362 117,800 1999 A 52,251 3,487 55,738 15,071 40,667 181,300 1999 C 56,475 4,139 60,614 15,528 45,086 201,400 1999 D 64,748 5,369 70,117 16,404 53,713 241,700 RESOURCES AVAILABLE FOR TRANSPORT INVESTMENT While a great number of worthwhile transport investments may be formulated, it is evident that there is a limit to the funds that can be allocated for this purpose, within a given period. As this Study is investigating the transport sector as a whole rather than only individual projects, an estimate had to be made of the overall investment budget that might be available. -24-  j • LEG E NO PRINCI PAL GROWTH CENTER ~ • SECONDARY GROWTH CENTER • INDUSTRIAL CENTER • MINERAL PROCESSING 50 0 100 200Km. II NATURAL GAS PRODUCTION I I I I (~X> FOREST PRODUCTS AGRICULTURAL DEVELOPMENT _ 'MPROVEMENT OF AGRICULTURE 1111I PRODUCTiON AND PROCESSING OF CATTLE MINERAL PRODUCTION . • ~ 1­ L___ ~ \, o 1'1\ ) ,r----- -------........... , 2 ) o ,, c o 1989 DEVELOPMENT PATTERN tJ)f,."u,* [lm,.I" and cAooocialeo FIGURE 4  The ratio of total national investment to GDP has grown steadily from 16.7 percent in 1973 to 20.0 percent in 1979; con- tinued growth is expected, and a ratio of 21.5 percent was pro- jected for 1989. The public sector accounts for about 57 percent of total investment, and the basic question is how this will be divided between such items as industrial development, agri- culture, mining, transport, education, defense and health ser- vices. Transport's share of public investment rose from 14.7 per- cent in 1973 to 35.0 percent in 1978 (30 percent in 1978 if LAB aircraft investments are excluded), but fell back in 1979 to 19.3 percent. Future allocations to the transport sector are likely to fall within a similar range.In order to cover a reasonable range of possibilties, both low and high estimates of the trans- port budget were prepared, corresponding to 20 and 30 percent respectively of total public investment. In addition, a pro- portion was allocated for urban transport investment--5 percent for 1981-1990 and 10 percent for 1991-2000. The estimated inter-urban transport budgets are summarized below by development strategy (A, C and D -- see previous section): TRANSPORT BUDGET IN MILLIONS OF PESOS Low High 1981 - 1990 A C 22,410 D A C 33,620 -- D 1991 - 2000 28,500 37,530 50,800 43,100 56,430 75,800 The railroad rehabilitation program started in 1973 -25- EXISTING AND FUTURE TRANSPORT DEMAND Forecasts of domestic freight demand were made using the transport model. The forecasts for 1989 and 1999 are compared with 1977 as follows: 1977 1989 1999 ( 1) tons t-km tons t-kiii tons t-km (thous) (mn. ) (thous) (mn. ) (thous) (mn. ) Air 41 (2 ) 69 (2) 110 (2) Road 12,821 1,171 22,136 2,335 33,105 3,581 Rail 241 86 1,574 717 4,871 3,340 River (3) 200 159 135 109 116 95 Pipeline (4 ) 438 122 1,015 280 1,774 597 TOTAL 13,731 1,538 24,929 3,441 39,976 7,613 (1) Assuming development pattern C. (2) Not estimated. (3) Refined petroleum products only. (4 ) The Ichilo-Mamore river system only. Road transport dominates in 1977 with 93 percent of tonnages and over 75 percent of ton-kilometers. Both river and pipelines are more important in terms of ton-kilometers than rail. The situation changes dramatically in future years with a very large The vehicle ferry at Tiquina on Lake Titicaca -26- forecast increase in rail traffic. This is brought about mainly by a change in rail tariff policy, which would charge nearer marginal cost, instead of the current average costs. In 1999, additional traffic is due to the rail interconnection. Although road still dominates in tonnage by 1999, rail is closely approaching the road total in ton-kilometers. Pipeline transport is expected to increase, but river is expected to decline with increased competition from road and rail. Trends in foreign trade are shown below: 1977 1989 1999 ImEorts EXEorts ImEorts Exports ImEorts EXEorts (thousands of tons) Road 89 136 146 379 270 6.28 Rail 552 303 607 702 603 1,457 Water 42 80 54 827 67 929 TOTAL 683 519 807 1,908 940 3,014 NOTE: Excluding pipelines and air, and also agricultural products on the Paraguay River. Rail is the dominant non-pipeline mode for 1977 and this is not expected to change greatly, although both road and water be- come more important. Water transport is mainly by Lake Titicaca in 1977 but the large increase forecast is for iron ore and iron pellet exports on the Paraguay River. Road transport is expected to increase with the gradual improvement of the currently very poor road communications with neighboring countries. International freight transit traffic was recorded as 42,000 ton in 1979; much of this was an unusual movement of flour and cereals between Argentina and Chile, but 13,000 tons were metals between Brazil and both Peru and Chile. Total traffic could rise to as much as 400,000 tons by 1989 and 900,000 tons by 1999, but much depends on the growth rates of the economies of the countries concerned, and the costs by other routes, principally by sea. Transit traffic is of crucial importance in evaluating a rail interconnection. -27-  Unloading international cargo at Guaqui About 50,000 interurban passenger movements were recorded in 1977, of which 96 percent moved by road. Of these, about one-third travelled in trucks, and only 15 percent were in cars. Land passenger travel is expected to increase by about 2 percent per year, but travel by air is forecast to increase much faster, perhaps up to 20 percent per year. At present, less than 2 per- cent of passenger travel is by this mode. Interdepartmental bus between Cochabamba and Santa Cruz -28-  Road traffic volumes forecast for 1989 are shown in Figure 5. Both freight and passenger demands are currently concentrated in the central east-west corridor linking the largest cities of La Paz, Oruro, Cochabarnba and Santa Cruz. North and south of this corridor, road volumes rarely exceed 150 vehicles per day, except near large communities. With the development of the transport system, two corridors--Oruro-Potosi-Tarija-Bermejo and Santa Cruz-Yacuiba--are expected to grow in importance, with volumes reaching six hundred to eight hundred vehicles per day by One of the busiest highways: Santa Cruz - Montero 1999. Rail volumes (shown later in Figure 7) are currently evenly distributed. Construction of the rail interconnection would emphasize the central east-west corridor, and so would a large increase on the Santa Cruz-Corumba line due to transport of products from MutGn. TRANSPORT PROJECTS SELECTED FOR EVALUATION Infrastructure capacity is generally adequate for the low volumes prevailing, both current and forecast, so that candidate improvement projects selected by the Study aimed more at reducing transport costs or at providing connections with areas of poor accessibility. Some projects are already under construction or are otherwise firmly committed with financing assured, and these pro- -29- jects were not evaluated by Study. They include an extension of the railroad line from Yapacani to the Rio Grande, the third phase of the railroad rehabilitation program, new airports at Santa Cruz (Viru-Viru), Cobija, Riberalta and Puerto Suarez, a new gravel road from Santa Cruz to Trinidad, and new paved roads between Chimore and Yapacani, Cochabamba and Oruro, and La Paz and Santa Barbara (in the Yungas Valleys). The Quillacollo - Confital highway in construction To complement this committed program, more than 200 can- didate projects were defined for evaluation. They include four different possibilities to interconnect the Andean and the Eastern rail systems, a further rail extension to Trinidad, and rehabilitation of more existing existing railroad lines. Highway candidate projects range from regravelling to reconstruction and paving of existing roads, and also include many entirely new roads into the remote regions. Many air transport projects were defined as well as several improvements to the pipeline and river transport system, including alternative port sites on the Paraguay River. Based on the definition of these projects, alternative future transport systems were defined. The 1989 Committed Net- work consisted only of existing facilities and committed pro- jects. The 1989 and 1999 Test Networks, however, included a great number of candidate projects, selected through an initial screening process. The computer transport model was used to make forecasts of traffic on each transport network, and these fore- casts provided the basis for the economic evaluation of the can- -30-  48 96 Salinas de Gorci Men Cerro Toroni Villa _'C,--~-aio:""-'i;",-- 50n Pedro Juloca Palmar Bermejo 1989 DAILY ROAD VEHICLE MOVEMENTS FIGURE 5 didate projects. A final set of traffic forecasts was made for the transport system recommended for 1989. RECOMMENDATIONS FOR IMPROVEMENT AND MAINTENANCE OF EXISTING HIGHWAYS There are nearly 39,000 km of interurban roads of which less than 1,300 km are paved (at the end of 1978). Most highways are in poor condition. Paved surfaces have not been maintained so that many of them now require reconstruction or overlaying. About 6,800 km have gravel surfaces, but because of the coarse gravel used, the surfaces are rough and difficult to maintain adequately. The 31,000 km of earth roads receive little main- tenance and many are interrupted in the wet season. Figure 6 shows the road projects recommended by the Study, including penetration roads and international links discussed later in this report. Projects for paving 765 km of unpaved roads and for major gravelling of a further 3,643 km are recommended in the central regions of the country for the next decade. To a large extent, the projects recommended will mean a change in emphasis in road planning. Apart from committed new highway projects ($b 5905 million) and the Machacamarca-Challapata highway (96 km at $b 439 million), no new paved highways are recommended. All the remaining paving pro- jects are for betterment (669 km at $b 1051 million), where the road is improved on the existing alignment. The existing Machacamarca - Challapata highway -31-  Betterment includes widening, improved drainage, improvement of sharp curves and provision of a 6-meter pavement. Major gravelling consists of improvements to drainage and placing a new surface of selected and compacted gravel. In addition, several new highways are recommended in the re- mote regions (see next section), but these are generally low volume penetration and feeder roads with gravel or earth surface. Also, a paved highway is recommended for Santa Barbara-Bella Vista (99 km at $b 1250 million) which will be part of the high- way designed to link La Paz with the remote northern regions. However, it is recommended that this road is built to lower design standards than currently envisaged. The emphasis has been given to such relatively low level improvements because in 1977, there were no unpaved roads in Bolivia with volumes higher than 300-400 vehicles per day, and only 527 km had volumes higher than 200 vehicles per day. High capacity routes are not required for some time to come and the emphasis in the 1980s must be on improving surfaces; improve- ments to alignment should take second place. Also recommended is an extensive program of improvements to existing paved roads, some of which have deteriorated badly. It is considered that 791 km will require treatment in the next ten years at an estimated cost of $b 985 million with 211 km of over- laying ($b 144 million) recommended for the first three years. Single-rear-axle truck with capacity greater than legal axle loads permit -32-  1 EXIST I NG LEGEND PAVE 0 ROAD COMMITTED PAVED ROAD 50 0 ~ 100 200Km . COMMIT TED GRAVEL ROAD RECOMME NDED PAVED ROAD I I I RECOMMENDED NEW GRAVEL ROAD RECOMMENDED MAJOR GRAVELLING ~ , L__.;': \, o 2 () () ROADS RECOMMENDED FOR THE 1980s FIGURE 6  Overloaded trucks are a principal cause of paved road dam- age, and a regular program of axle load measurements is recom- mended. It is recommended later in this report ("Recommendations on Future Tariff Policy") that the Transito toll system be abol- ished and it is suggested that these stations be converted to permanent vehicle weigh stations. It is recommended that the current program of improvements to existing feeder roads (financed by USAID) be continued at about the current levels, costing about $b 655 million over the ten years, 1981-1990. An improvement in maintenance standards is also stron9 ly recommended. The new gravel surfaces (recommended as maJor gravelling) will require improved maintenance techniques, and benefits can also be obtained by placing better gravel on the existing poor surfaces. On paved roads, patching should be in- creased from the present negligible levels and routine surface dressing introduced. For gravel roads, better graded gravel should be used together with watering and compacting every third grading. With these improvements, frequency of grading could be reduced from current levels. On the other hand, more intensive grading and spot gravelling is required on earth roads. Gravel Road Grading By 1990 if these recommendations are adopted, overall costs of road maintenance would more than double from present values, from about $b 214 million in 1979 to about $b 480 million in 1990. Paved and earth road maintenance costs should increase sharply but gravel road costs per kilometer are expected to -33- change little. Although unit costs for gravel roads would rise with more sophisticated techniques, maintenance frequencies could then be reduced from the current high levels. Construction of a total of 103 bridges costing $b 487 million is recommended over the next ten years in addition to bridges required for new highway projects. Thirty-four of these bridges are required as replacements for existing deficient structures. New bridge in construction near Caranavj In addition, a feasibility study is recommended for a new bridge over the Rfo Grande at Puerto Banegas near Santa Cruz. It is estimated that such a bridge could be economically feasible by 1987, at a cost of $b 130 million. All projects recommended by the Study will require more detailed feasibility studies, and a program of such studies is recommended. Such studies should consider all engineering and economic aspects, and should also re-examine the conclusions of this Study on modal competition between rail and road. In particular, more detailed studies are required of the concept of betterment (see above) and it is recommended that two pilot studies be undertaken, one in flat terrain and the other in undulating to mountainous terrain. -34- RECOMMENDATIONS ON NEW ROADS AND OTHER TRANSPORT LINKS IN REMOTE AREAS The technology of our time makes it inevitable that roads should be the leading form of transport for opening up new regions. Air transport has a pioneering role to play but is too expensive and restrictive to remain the sole, or dominant means of transport. Railroads, to be economic, need large, concen- trated volumes of traffic, which are difficult to foresee in the remote regions. Rivers offer the cheapest, but much the slowest, form of transport, since the beginning of history they have pro- vided impressive natural transport systems, particularly in the Amazon basin, but they have generated little development along their banks and little traffic. It is roads, of simple construc- tion, offering cheap, reasonably fast and convenient transport by truck, bus and car, that give the best chance of opening up new areas. The essential requirements for a penetration road are: (i) it must give access to areas of productive potential; (ii) it must also give access to a market where the output of the area can be sold; (iii) market prices must offer an attractive profit over and above costs of production and transport; (iv) the size of the market must be sufficient to absorb the new source of supply without prices being forced down to an unprofitable level. Three other conditions which may, in the case of Bolivia, be equally essential, are: (v) substantial investment may be needed in production facilities; roads are not likely to be worthwhile if they generate only primitive, extensive farming, espec- ially for livestock, producing very low yields per hec- tare; if the value of the road depends on more inten- sive farming methods, requiring some capital invest- ment, there must be good reason to believe that this will be achieved; (vi) there must be sufficient supply of immigrant labor; -35-  (vii) adequate living conditions must be provided to attract the migrants, i.e., homes, schools, medical facilities, shops, etc. If the right conditions prevail, there are three reasons why it could be in the national interest to open up new areas of agriculture, including livestock, forestry and fish: first, to reduce imports of commodities like wheat that could be produced in Bolivia; secondly, to create new sources of exports; and thirdly, to enable part of the population to move from areas of low productivity to areas wher~ it could be much higher. There is in Bolivia another reason for penetration roads. Some areas have already been partly opened up by means of air transport. These areas are mainly in the Beni and depend on the production of meat for La Paz and the Altiplano. Without roads, The existing highway from Santa Cruz to Trinidad the economic and social development of these areas is strictly limited. Several of the roads evaluated by the Study are of this sort; they are designed, not to open up virgin territory, but to stimulate a fuller and more efficient development of areas al- ready under production. -36-  Penetration Road Analysis - A total of 16 penetration roads were identified and analyzed in detail, ranging in length from 45 to 560 km. The producer surplus potential from agriculture was estimated, taking into account the likely start-up period for the development to occur. The projects were then rated according to a point scoring system in order to assess the likelihood for development to be successful. Besides potential agricultural productivity, other criteria were taken into account such as market size, distance from market and probability of sufficient migration taking place to the area in question. It was concluded that several penetration roads in northern La Paz, Beni, Pando and eastern Santa Cruz should be built. Their construction, and that of the associated feeder roads, should be coordinated with agricultural colonization schemes and proceed in stages. The speed with which these roads are extended into new areas should be gauged according to the success of each scheme. Some of the roads might be extended faster to achieve strategic or integrationa1 objectives. The principal routes recommended are as follows: FEEDER ROUTE LENGTH ROADS COST (km) (km) ($b million-1977) Trinidad-San Ram6n (1) (2) 191 580 761 Guayaramer!n-puerto Siles (2) 215 240 543 Tumupasa-Ixiamas-Chive 264 37 883 Puerto Suarez-Quitunquifia (3) 80 86 187 Ribera lta-Humai ta 50 36 116 Santa Rosa-Ribera1ta (4) 270 22 (1) The San Ram6n to the north of Trinidad. (2) San Ram6n and Puerto Siles are being linked by a project now under construction. (3) Initial construction of only 80 km in the Tucavaca valley in Santa Cruz Department. (4) Only recommended if current very low construction costs can be maintained. -37-  Feeder Road near Trinidad Other Projects in Remote Regions - Apart from penetration roads, numerous projects to improve land connections with Trini- dad (capital of Beni Department) were evaluated, partly based on results from the transport model. A road from Santa Cruz is now nearing completion, and another road connection from La Paz is steadily being improved. Further improvements are justified to the road from La Paz costing Sb 1550 million, as well as a major new road connection from Cochabamba, costing Sb 1116 million. However, no economic justification could be found for extending the railroad from Santa Cruz beyond the Rio Grande. Puerto Varador on the Mamore River -38-  A project costing $b 20 million to clear the Ichilo-Mamore of sand bars and embedded tree trunks is also recommended to- gether with $b 6 million for new equipment in the Ichilo-Mamore river ports of Puerto Villarreal, Trinidad, Guayaramerln and at the terminus of the Yapacanl-Rlo Grande railroad now under con- struction. RECOMMENDATIONS ON RAIL TRANSPORT Rail has traditionally been associated with Bolivian foreign trade carrying, in 1978, 81 percent of all exports and 58 percent of all imports by weight. The rail share of domestic transport has by contrast been low -- 2 percent by tonnage and 6 percent by ton-kilometers. The Study forecasts a sharp change from these patterns combining a steady increase in foreign trade traffic and a very high increase in domestic traffic. This projected in- crease can be attributed to three assumptions: a change in tariff policy to encourage more domestic traffic in commodities where demand is elastic, an increase in traffic associated with the development of the Mutun iron ore reserves in eastern Santa Cruz Department, and (for the 1990s) the opening of a rail system interconnection within Bolivia(3). Thus total traffic is fore- cast to increase from 600 million ton-kilometers in 1979 to 1,500 million ton-kilometers by 1989 and possibly to 5000 million Imports for Bolivia at Arica (Chile) (3) Based on data available to the Study, construction is not recommended to start in the 1980s, but fUrther studies could modify this conclusion -- see later. -39- ton-kilometers by 1999. The forecast traffic for 1989 is con- trasted with 1977 volumes in Figure 7. The major project evaluated by the Study was a rail system interconnection between Cochabamba and Santa Cruz. Several alternative alignments were studied and these are shown in Figure 8. The best alignment of those examined would link Cochabamba with Santa Cruz via Aiquile and Mataral, at an estimated cost of between $b 12,000 million and $b 15,000 million. It was con- cluded that it would probably not be justified economically until the 1990s, but more studies are recommended to evaluate a possibly cheaper northern alignment, and the potential for tran- sit traffic. If these studies prove favorable, the project could be brought forward, although financial limitations will probably limit construction in the 1980s. A number of other new rail projects were evaluated but only two Mutun-Motacucito ($b 183 million) and Guaqui-Desaguadero ($b 186 million) -- were found to be economically feasible. Both depend on other factors~ the rate of development of Mutun for the former and the completion of the Peruvian line from Puno to Desaguadero for the latter. Reconstruction of the Taperas-Robore section of Santa Cruz-Corumba, damaged by floods in 1979, is recommended on the existing alignment at a cost of $b 400 million, with works spread over ten years. Re-construction of sections of Oruro-Cochabamba, which are subject to annual interruptions by earth slides, is not recommended at current traffic volumes; it is more economical to continue with the current program of defense and repair works each year. Flood damage on the Santa Cruz - Corumb& line -40-  o TRINIDAD \ 119771 LEGEND ( ,.(,_yo_ INTERNATIONAL AND TRANSIT TONNAGE DOMESTIC TONNAGE \,GlJAQUI .../ \ ! '~.­ STA_ ROSA ~/' ,/ MATARAL '''-., "OU'LE \, 0 '~ \ L; '''-v"---'-''- __( ,) SUCRE \~\rt. \ AVAROA o 50 100 150 200 km Imm I~OPOO ton' LEGEND WA!!I INTERNATIONAL AND TRANSIT TONNAGE Illiglumj!!l DOMESTIC TONNAGE ,.-./' ( , I !~ ! 50 100 I SO lOO 11M I I ... :. 150,000 tons ANNUAL TONNAGE FLOWS BY RAIL IN 1977 AND 1989 FIGURE 7  1 ~ LEGEND 50 0 100 200Km . l' 11111111 EXISTING LINES ~ I ~ If II 1111 INTERCONNECT ION LINKS COMPLETED OR PARTLY COMPLETED & 11111111 POSSIBLE INT ERCONNECTIONS ~ ~ ~ < d ----­ -----, / " ' , BA LC ARC [ \ ,....,.... ->"Il l AZON ,­ \ L--! / ~J 1'1 o ~./ r REP TIN A CANDIDATE RAil INTERCONNECTION PROJECTS Ci)f,.IIU1 [lm,.I" ana .Aooocealeo FIGURE 8  Three lines should be considered for closure; Cochabamba-Aiquile, Machacamarca-Uncla and PotosI-Sucre, although the latter could be viable, given an increase in freight traffic and better exploitation of tourist traffic. Retention of the re- mainder of the system can be justified easily for foreign traffic alone; the large increase forecast in domestic traffic rein- forces this conclusion. On the basis of cost data supplied to the Study, the current railroad rehabilitation program does not seem to be particularly worthwhile, either with the current low volumes of traffic, or even, in most cases, with the higher traffic volumes forecast by the Study. Use of a lower standard of rehabilitation than cur- rently practiced would improve the evaluation results but, in general, it would appear to be more economic to continue with an unrehabilitated track and associated higher routine maintenance costs. There are two factors which modify this pessimistic con- clusion on rehabilitation. The first is that many investments have already been made in rehabilitation -- in equipment, ballast production facilities, crew training, etc. and it is possible that the unit costs of rehabilitation supplied to the Study do Rehabilitated rail track Oruro - Cochabamba -41- not reflect this properly. Secondly, although higher routine maintenance on unrehabilitated tracks may in theory appear to be better than rehabilitation, in practice funds for maintenance are vulnerable to cutbacks in times of economic stringency, without proper regard for their importance. Therefore, rehabilitation is probably better justified than the bare facts of the economic evaluation seem to indicate and it is tentatively recommended that the rehabilitation program continues. However, it is recommended that the proposed fourth phase be delayed until the period of 1984-1986, completing the third phase in the meantime, and that no more than about 1,100 km be included in the fourth phase in the 1980s at a cost of $b 1,000 million. It is also recommended that further investigation be made of rehabilitation costs and benefits, which could change these conclusions. Current levels of track maintenance are too low and higher levels of maintenance (considered as desirable in a recent study of ENFE) are recommended on unrehabilitated lines. Maintenance costs are estimated as follows: ALTIPLANO MOUNTAINS EASTERN (thousands of 1979 pesos per km per year) Current (without rehabilitation) 43 58 51 Desirable Level (without rehabilitation) 80 185 69 After Rehabilitation 22 30 26 There is much interest in ENFE in the electrification of the Bolivian Railroad System. However, even with high future in- creases in petroleum costs, electrification is very unlikely to be justified in the 1980s. Accompanying the forecast in freight traffic, substantial equipment purchases are recommended in the 1980s, totalling 49 locomotives and 2,383 wagons for an estimated cost of $b 2,300 million. Purchases should be dependent on traffic growth, but timed so that equipment shortage does not constrict growth. Rail passenger services are economic on the Eastern System where road services are almost non-existent. On the Andean Sys- tem, road services are competitive and are likely to become more so as the paved road system is extended. ENFE is currently gain- ing traffic by holding fares below economic levels but this is not in the economic interests of the Nation. Therefore, it is -42- recommended that fares should be revised immediately so that at least variable costs are covered. In the long run, ENFE might consider withdrawing from passenger services on the Andean Sys- tem. The operational record of ENFE is not particularly good in terms of equipment utilization, especially for locomotives. Im- provements are required in equipment maintenance, spare parts ac- quisition and employee productivity. Some centralization of overall ENFE functions (such as long-term planning), is required, combined with a decentral- ization of operational aspects. The planning department must acquire expertise in economic evaluation of projects~ useful subjects for immediate study are the rehabilitation program and the rail interconnection. RECOMMENDATIONS ON AIR TRANSPORT The National Airport Administation (AASANA) administers 33 airports out of a total of over 600 airports and landing strips. Six of the AASANA airports have paved runways--La Paz, Sucre airport Cochabamba, Santa Cruz, Sucre, Tarija and Trinidad--and regular jet passenger services are operated between them. Many of the other AASANA airports are in poor condition and an Airport Rehabilitation Plan is recommended to improve runways and terminals at 16 of these smaller airports. This plan (estimated to cost $b 250 million), would allow improved F27 -43- turboprop operations, and also (at six of the airports) opera- tions of the new F28 passenger jets on order by LAB. The recom- mendations on airports are summarized in Figure 9. It is recommended strongly that the committed Air Navigation and Communication Equipment Plan ($b 200 million) be implemented with no further delay. There are committed projects for new airports with paved runways at Santa Cruz (Viru-Viru), Cobija, Puerto Suarez (all in construction) and Riberalta. Two projects for new airports at San Borja and Santa Ana de Yacuma are no longer considered to be committed. This is partly because estimated costs have risen 4 to 5 times since initial estimates in 1978, partly because road construction into these regions is well underway reducing the need for such airports, and partly because of other priorities in the air sector. Other airport investments which are committed include runway repairs at Trinidad ($b 70 million), completion of a World Bank funded project at Tarija for $b 50 million and improvements at Potosi ($b 50 million). Improvements are recommended at Cochabamba (runway extension at $b 90 million) and La Paz ($b 590 million). A sum of $b 1200 millions has been allocated to Cocha- bamba for the end of the 1980s, representing about 85 percent of the cost of a new terminal and runway, the remaining funds to be allocated in the 1990s. This project is said to be required for urban safety reasons and, as such, was not evaluated by the Study being outside the Terms of Reference. Vintage aircraft of the non-regular airlines -44-  1 LEGE ND ~ COMMITTEO PROJECTS 50 0 100 200Km . "i' • 0 NEW AIRPORT (PAVED RUNWAY) OTHER I I I e ~ RECOM MENDED IMPROVEM E NTS 6 ~ • 0 REHAB I LITATION REHABILITATION PLAN (F - 2 7) PLAN ( F- 2 8) <. • NEW RUNWAY AND TERMINAL ; OTHER IMPROVEMENTS * (> ., , , ..p CONCEPCION \ SAN MATIA~ ~ SAN 'GhC'O- - - _ « 'Y DE VELASCO ( (J>",. '~ -( 0 III - -------~ ) 2 /---­ " 0 1> C )I \. \.> () ~ <> 'l \.> ~ ~ il " !II ~ () \) '- \ ~ 0 t-­ 0 ." "'l A r RECOMMENDED AIRPORT IMPROVEMENTS TO 1989 6)fillu.. flmill. and .Aooocialed FIGURE 9 recommended that this latter project, which would cost $b 400 million, is phased over the next ten years, with most expenditure concentated in the next six years. Only two 40 km sections of the Santa Cruz-Corumb§ Highway are recommended in order to start exploiting the agricultural potential of the Tucavaca Valley. It is recommended that the Santa Cruz-Yacuiba road be sub- ject to major gravelling at a cost of $b 272 million. Paving to the standard of betterment (see "Recommendations for Improvement and Maintenance of Existing Highways") could be justified for sections of this road but funding is unlikely to be available. Rehabilitation of the rail line in this corridor is not generally recommended, although it could be worthwhile in some sections. It is considered that the Guayaramer!n-Porto Velho-Belem corridor could be profitably exploited by Bolivia, particularly for exporting cattle products from the Beni to Europe. Improve- ments to this corridor, which lies mainly in Brazil, are programmed, including paving of the Guajara Mirim-Porto Velho Highway. It is recommended that Bolivia negotiate with Brazil regarding the provision of refrigerated container handling facilities at Port Velho. Several projects proposed in Northern Argentina could be exploited by Bolivia if completed, including a rail line from Or an to Bermejo and various canal and river projects. None would be worth developing for Bolivian trade alone. Construction of the Guaqui-Desaguadero railroad is recommended at a cost of $b 186 million, timed to coincide with Rail access to the quay at Guaqui -46-  J I J I I I - - - - LEGEND -- II International Bound)..,v • I I I I I I ExlstinC) Railroad .~" - - - - ExlstlnCJ Paved Road - - - - ExlstlnCJ Unpaved Road _ _ River "'1\••,111111 " ' Rapids PERU BRAZIL t...::=---'"- I/II/ALLY II/PAllA« E ~( ~ ,~ (,) l I \, I ( , I \ I I ( I ARGENTINA I EXISTING CONNECTIONS WITH OCEAN PORTS FIGURE 10 completion of the Puno-Desaguadero railroad in Peru. A design study is recommended immediately. Paving of the Rio Seco-Desaguadero road is recommended to the standard of better- ment at a cost of $b 134 million (with bridges) and encouragement should be given to the Desaguadero-I10 and Desaguadero-Puno highway projects in Peru. It is concluded that the Viacha-Arica railroad is worth keeping in operation, but the low volumes of traffic (restricted by Chile to 7,000 tons per month) do not justify rehabilitation at the present time. Higher routine maintenance levels on this railroad are recommended. As a complementary project, major gravelling and bridge building is recommended on the Patacamaya-Tambo Quemado highway at a total cost of $b 121 million. On foreign trade by air, it is recommended that LAB expand their international and freight services by the purchase of an additional cargo Boeing 707. The proposal to purchase Boeing 747s for foreign trade is not recommended at the present time. RECOMMENDATIONS ON ORGANIZATIONAL ASPECTS OF TRANSPORT Except for the rail sector, transport operations are in the hands of numerous small enterprises, with the state empowered to intervene as a controlling agent. Air passenger transport is dominated by a single carrier, as a result of the technical dic- tates of the mode and the need to operate internationally. How- ever, many small airlines have evolved to serve the air cargo sector. Road transport is provided by syndicated truckers grouped into a national confederation. Government control is exercised by the Ministry of Transport's General Directorate of Road Trans- port (DGTA). This agency, however, has not been given sufficient capacity to effectively perform its function, so that real power lies in the hands of the syndicates. While providing an acceptable and financially self-supporting service, truckers are seen to engage occasionally in monopolistic practices: this raises the question whether the current legal and organizational framework of the road transport industry should be modified to better serve the needs of the economy. Several alternatives to the existing structure of road transport were therefore considered, ranging from complete free- dom of competition to the nationalization of all trucking ser- Vlces. It was concluded to stay with the existing system, at least initially, but to strengthen substantially DGTA's capacity -47-  Truck transport of passengers and their cargo as a controlling agent. If this recommendation proves to be ineffective, consideration should be given to the repeal of the Supreme Decree which restricts provision of road transport to the syndicates. It is recommended that a more effective system of register- ing vehicles is initiated, which takes proper account of vehicles going out of service. At present, it is not possible to arrive at a credible estimate of the vehicle fleet in the nation. The road infrastructure is mostly provided and maintained by the National Road Service (SNC), which has grown to over 5,000 employees. Its organization is highly centralized both with regard to the relation between headquarters and district offices, and with regard to the staff organization at headquarters. To improve SNC's effectiveness, it is proposed to give greater decision power to the district offices and to group the eleven existing headquarters departments into three subdirectorates. In the air transport sector, the recent creation of an Aeronautics Ministry is likely to call for a reorganization of the various entities involved. It is suggested that the National Airport Administration be strengthened and that the various commercial air operations be put on the same basis with regard to such items as insurance and airport landing fees. Moreover, a conSUltative council is recommended, which would combine repre- sentatives of government, airport administration and air trans- port operators. River transport in northern Bolivia is provided by a large number of boat operators. Until recently, tariffs were fixed by -48- the General Directorate of the Merchant Marine (DGMM) while other government control over river transport lay in the hands of the Bolivian Navy. This duplication of State functions proved to be inefficient. On January 8, 1981, Supreme Decrees 17918 and 17919 established a new Subsecretariat of Maritime, River and Lake Interests under the control of the Ministry of Defense. The functions of the new subsecretariat were not fully defined at the time of the Study but it is hoped that this change will resolve the problem of control of river transport. The Study also pro- poses that the maintenance and operation of the river ports of the northern river system be delegated to the local level, essentially to the departmental development corporations. Puerto Villarroel on the Ichilo River RECOMMENDATIONS ON FUTURE TARIFF POLICY The main aim of tariff policy in Bolivia should be to charge low tariffs for infrastructure where this might encourage traffic, but on no account should the tariff be less than the marginal costs attributable to the traffic. Where demand is highly inelastic, it is reasonable to charge tariffs above average costs in order to offset the deficit on other, low tariff traffic. To ensure coordination between competing modes, the difference in their tariffs should equal the difference in their marginal costs, thereby exercising an appropriate influence on modal choice. -49-  Railroad Tariffs - A lower tariff policy, charging somewhere between marginal costs and the currently charged average costs, is recommended in order to encourage fuller use of the railroad system. Higher tariffs should be imposed on traffic insensitive to the tariff level (principally international traffic), in order to subsidize low tariff traffic (principally domestic traffic). The policy goal of ENFE earning sufficient revenues to cover current expenditures, including the servicing of capital, should continue. Estimates by the Study indicate that this should still be possible, even with lower tariffs for some domestic traffic as recommended by the Study. If it does become necessary to provide subsidies, they should be in the form of a bonus per ton carried of specific goods on specific routes, and similarly for pas- sengers; or as grants for specific capital improvements. To carry out this tariff policy, the marketing department of ENFE should make a complete study of demand elasticities of all relevant commodity movements. Using the findings of this study, ENFE should reduce tariffs for internal traffic in steps expand- ing the fleet as necessary as soon as demands begin to approach the capacity of available rolling stock. Road User Charges - These include the taxation of vehiCles as a charge for using the roads. Marginal costs of road use in Bolivia comprise variable road maintenance costs and the costs of improvements associated with marginal increases in traffic. Com- parisons of the level of direct taxes on vehicles (fuel, oil, tires, spare parts) with marginal costs of road use by vehicle class using 1979 values indicate that large buses and trucks cur- rently pay substantially less than their costs, while small and medium trucks pay appreciably more. However, these marginal (variable) costs are less than one-third of total road system infrastructure costs: fixed main- tenance costs account for about 15 percent and new construction over 50 percent. If it is accepted that present road users should pay for full maintenance costs and the construction costs of new highways which reduce travel costs in corridors already served by roads, substantial increases in road user taxation are warranted, particularly for large trucks but also for buses. The payment of these additional costs by road users, with minimum deterrent effect on road use, should be achieved by increases in purchase tax or custom duties. Except for special cases, such as the Autopista in La Paz, the current Transito toll system is considered as unsuitable for the collection of road charges. In 1979, revenues collected barely exceeded costs of running the toll stations. If charges -50- were to be increased sufficiently to provide a substantial in- come, problems of control and security would increase greatly. Also, as traffic volumes rise, the delays at transito stations will become intolerable. It is therefore recommended that the system be abolished. A better use of both the stations and staff would be for the purpose of conducting regular truck axle load measurements, as recommended earlier in this report. Tariffs for Road Transport - This focuses on the question of controlling tariffs charged by bus and truck operators. In Bolivia, truck operators are not permitted to expand their fleets and by law must join syndicates. To control the tendency of syndicates to charge excessive tariffs, the central government controls tariff levels. This system eliminates free tariff negotiation based on competition, and imposes an undesirable rigidity and excessive uniformity of tariffs. Modifications in the regulatory system are proposed (see previous section) to reduce the syndicates' monopoly power, thereby permitting a freer tariff policy. A system of fork tariffs, i.e., a system where maximum and minimum tariffs are set, should be introduced. When a state of healthy competition is attained, the range of the fork may be widened until eventually it becomes irrelevant. As roads are improved, the lower operating costs must be re- flected in lower tariffs so that the benefits will be passed on to consumers and full developmental potentials realized. While the same principles apply to buses, published fares reflecting maximum rates must be available to passengers. Where there is competition, a range of tariffs should be permitted, facilitating development of different levels of service and thereby providing passengers with more choice. Air Transport Char~es - Marginal costs of accommodating air traffic tend to be much higher, relative to average costs, than with railroads and roads. A comparatively small volume of traffic, in terms of passengers and freight tons, requires improvements to the runway, airport buildings, navigational aids, maintenance facilities, etc. Therefore, tariffs should recover costs of operation, maintenance and routine improvements, except at very small airports where temporary subsidies may be desirable until traffic growth is sufficient to cover full-cost tariffs. Such subsidies could be provided at Riberalta, Puerto Su~rez, Apolo, Robore and San Joaquin. Where airports provide the only access to a region, social subsidies are in order. Candidates for such subsidies include -51- Cobija, Guayaramerfn, San Matias, Ixiamas, Santa Ana de Yacuma, San Borja, San Ignacio de Velasco and Ascension de Guarayos. An increase of one-third in AASANA's charges would amount to only 2 percent of airline operating costs. AASANA charges should cover normal operating costs and service capital costs for routine small-scale investments. A general increase in airport charges to generate the necessary revenues is needed and is recommended. The increased charges should be based on a thorough analysis of the costs of runways, aircraft servicing, air navi- gation, passenger and freight handling and administration, attributable to different classes of aircraft. Large projects, such as the new Viru Viru airport, and economic and social sub- sidies should corne from government treasury funds. Lloyd Aereo Boliviano - Each route should meet its total annual costs including operations, depreciation and interest pay- ments. Special fares should be introduced to even out passenger flow during peak periods, and discount fares used to raise load factors. LAB indicates historic tariff adjustments have resulted in some inconsistencies~ a revised full-cost rate structure should reflect the appropriate allocation of costs among forecast passengers using each route. With continuing increases in fuel and other costs, a flexible tariff policy is recommended to keep costs and tariffs in close relationship. Subsidies for certain routes serving development areas or remote communities should be designed to increase frequency of service; they should not reflect subnormal tariffs. PROPOSED TRANSPORT INVESTMENT PLAN The Investment Plan proposed by the Study brings together all the recommendations on equipment and infrastructure presented in this report. It is prepared in two parts; a detailed plan for the period 1981-1990, followed by an outline plan for the period 1991-2000. All costs are quoted in 1977 pesos when $ US 1 = $b20. Due to inflation, the value of the peso 'has declined so that approxi- mately $b 1 (1977) = $b 1.6 (1981). Also, the exchange rate has changed so that in 1981, $ US 1 = $b 25. Transport Budgets and Previous Committments - There are two serious constraints in preparing an investment plan. These are first, the likely limits on funds available for transport invest- ment and secondly, the large number of already committed trans- port projects. Both these constraints are likely to be particularly severe in the early 1980s. -52-  Possible budgets are compared with previous commitments below (in millions of 1977 pesos): PEIUOD Hi.gb hOW CO~ITTEO 198);:-1983 8,460 5,640 6,6()5 1984,.1986 . ~h.600 6,400 4,459 1987-1990 1,.$,$6.0 101.370 1,. ,£11.6. .U!OTAL ·33,620 22,410 l2~940 The major committed expenditures are for new road projects, which account for nearly half the total commitment. Other important projects committing relatively large sums are the new airports at Santa Cruz (Viru Viru $b 1,290 million), Cobija ($b 260 million), Puerto Suarez ($b 250 million), Riberalta ($b 427 million), the railroad Yapacani-Rlo Grande ($b 550 million) and the railroad rehabilitation program (completion of Phase III - $b 250 million). Committed projects will account for 38 percent of all pro- jected transport investments in the 1980s, and for 79 percent of transport investments in the period 1981-1983. This assumes that the high budget will be available. If only the low budget is available (as in 1979), then committed projects will account for 92 percent of all available funds until 1987, and many of the "commitments" of the first three years would have to be post- poned. These are startling figures, and indicate that the scope for effective planning of new investments is limited, especially in the immediate future. It can be argued that a number of the currently committed projects have been chosen on weak grounds: it is difficult to support the evaluation of the new airport at Santa Cruz (Viru Viru); the rail line from Yapacanf to Rio Grande was never formally evaluated (and benefits are dubious); the design standards (and therefore the costs) for the La paz-Cotapata-santa Barbara and the Quillacollo-Confital highways are probably too high. There are those who will argue to the contrary: who say that such projects are essential to develop the country, and that to build to lower standards is, in some way, inferior. The reply must be that while funds are concentrated on a few expensive pro- jects, with low benefits compared with costs, the transport sys- tem in general will remain in its present primitive condition for many more years. -53-  The Investment Program - The details of the Investment Pro- gram are set out in Table 1 and expenditure by mode is summarized below. 1981-1983 1987-1990 Committed ~ Committed Total 1977 pesos) - - Rail 639 1,113 320 1,570 400 3,169 1,359 5,852 Water 0 26 0 200 0 1,400 0 1,626 Air 2,070 2,294 607 835 60 1,976 2,737 5,105 highway 3,956 5,034 3,532 7,018 1,356 8,996 8,844 21,048 TOTAL 6,665 8,467 4,459 9,623 1,816 -- 15,541 12,940 33,631 Recommended expenditures together with funds for committed projects, take up the entire high budget, although it is unlikely that such sums will be available. Therefore, priorities have been specified in the event that only the medium or low budgets are avail able. For rail, priority should be given to increased track maintenance and to purchases of new equipment. The very severe low budget would require postponement of most of the fourth phase of the rehabilitation program, part of the Taperas-Robore recon- struction and all new construction until the 1990s. The medium budget would permit about two-thirds of the fourth phase of the rehabilitation program and most of the Taperas-Robor~ reconstruction, but new projects would still have to be postponed until the 1990s. Modern ballast wagons at Viacha - 54-  Table 1 INVESTMENT PROGRAM BY MODE (Millions of 1977 pesos) blOPE AND STI'tTUS Iga'l-I~a6 l~al~1'f90 'l'O~1U, Rai1 .... Cornmi tted Rehabilitation (~th:ird phase) 250 Yapacani-R1Q 220 s5il P-e:Sign Study: j'o.lotac\lcito""puer~o Busch 9 ENFE General 100 40a 550 Subtotal 639 ,2.0 400 1~J' 359 -Projects 1,4flO 2,300 2;';0 100 400 La3 18,3 lE6 18.6 4 20ll 300 1,l}QO subtotal 2,769 4,493 Water-Pl'ojects 'torrAL para~y River Fleet River Port }'!amor§ River Cleaning: 20 - ),16S. 4{)O'Ul 1,009(1) 5~ 1,000 20 6Q<J: - f'ort J;rnprovanents {2) 6 & Air . . . CpProi tted TOTAL Air Navigation and Coro..'llu,fiicatf-.on ;q:uipment Plan - 200 1,.400 ~ 200 Santp. Cruz (Viru Viru) 140 1,290 Tarija 50 'I'rin;ldad 70 Cohija 200 2St) Potosi 50 pueX'to SuArez 250 Riberalta 427 AASANA General 60 140 Subtotal 607 60 2,737 Additional Airport Maintenance 66 201 i.,R Paz .5'10 Cocr.abamna 1, 1,290 Airport Rehabilitation Plan {16 ai.r;PQrte} 150 250 Design Studies 12 20 37 Subtotal 22l! I,SHi 2,l66 TO'r-Ai:. -- 1,976 JUJ ,Hi ~ 1,;t90 ~';O 1.11 11 2:>3 155 l~~ 74,5 200 1,600 £00 ;WO 1,96-0 40 100 Hll Subtotal 2,,5. ,356 8 t 844 Addit;ional Road Maintenance U·U£) 1,OS8 1,632 Feeder Reads- 300 St)(} Bridge~ <except. projects 1,-1sted belQw) l5Q 187 487 San~a Barpa~a-Bella VLsta (ipcl~ brid~es) 1,250 lr450 San Borja~Trini.dad (includ.:t119 brid-qes) 70 160 3000) Eteram~zarna-San IgnaCio {inc~uding hridgea) 1,116 1., 116 Machacamarca-Challapata (including bridgesl 439 Carre-ras-Iscayachi (including: bridgJ:!s) lEO Penetration/Feeder Roads 1,577 2,512 to santa Cruz-Cochabeunba 21B paved road improvements no 767 Unpaved road improvements - Betterment 552 1,!J5J ~ Major gravelling l23 B7S 1.314 RIo Grande Bridge 130 Axle Load Measurement Program 6 10 Oesign Studies llCS) {9 ) 150 298 Subtotal 1,01S J,4.86 7,640 20. '!'OTAL 5 034 7,01e 8,996 ~ -(-1-) ------th~!~ ~taTe~T~p!;;~ ~and ~~1"Y:i'ter feet f,lif 11,$'<1 '3'}.l't depend upon growth cf 1 (2) , Trinidad~ Guayaramer1r. and at the terminal new rail line from Yapacan.'l ( 3) - renainrler is for completion the early 1990$. (This project was Pilot Maintenance Study. as committed wi th the Pilot for two motorized ponto-one for the crossing west of Trinidad. included in Pilot Maintenance Study. inoluded in Pilot Maintenance Study~ -55-  Highway priorities should be for paved road rehabilitation, upgrading of routine road maintenance and the axle load enforce- ment program. With the very restrictive low budget, about half the program for new projects would have to be postponed until the 1990s, including Santa B~rbara-Bella Vista, Eteramazama-San Ignacio, the Rio Grande bridge and much of the program for new penetration and feeder roads. All other projects would be de- layed. Under the medium budget, all except Santa Barbara-Bella Vista, Eteramazama-San Ignacio and about one-third of the new penetration and feeder road program, could be completed in the 1980s, but later than programmed under the high budget. Air priorities should be for the Airport Rehabilitation Plan and for improved maintenance. Under the low budget, the new run- way and terminal at Cochabamba and part of the improvements at La Paz would have to be postponed until the 1990s. Under the medium budget, only the Cochabamba project would thus be affected, although all other projects would be delayed until later in the 1980 s. For water transport, the second stage of the Paraguay River port would have to be postponed until the 1990s under the low budget, but it is recommended that the water investment program remain unchanged with the medium budget. The Investment Program 1991-2000 - Investment limits are not expected to be so stringent in the 1990s. Investments by mode have been estimated approximately as follows (although these can- not be taken as recommendations for a period so far ahead): MODE TOTAL IBYESTMENT PERCENT ($b million) Rail 20,000 38 Highway 23,500 44 Air 7,500 14 Water 2,000 4 TOTAL 53,000 100 Rail expenditures in the 1990s include the rail inter- connection (dependent on further studies, which could also bring the project forward to the late 1980s) at about $b 12,000 million. Road investments include 3,600 km of paving and about 1,500 km of new penetration and feeder roads. Air investments -56- include paving at San Ignacio de Velasco, Yacuiba, San Borja and Santa Ana de Yacuma, as well as possible airport relocations for La Paz, Oruro, Potosi, Trinidad and Cochabamba. The river investments include a third stage of a Paraquay River Port and a major expansion of the Paraguay River fleet. A possible transport system for the year 2000 is shown in Figure 11. CONCLUSIONS Likely restriction on funds for transport investment, coupled with many previous commitments to transport projects, limit the scope for planning new projects in the immediate future. Therefore the Study's recommendations for the near future address improvements to the existing infrastructure, and the organization of the services using it, rather than proposals for major new projects. For example, the highest priority recommendations in the highway sector are for strengthening and rebuilding 820 km of existing paved highways and initiating a better program of road maintenance. There is little sense in continuing the building of new paved highways, and then letting them deteriorate to the point where reconstruction is required, as has happened in the past. Similarly for rail, it is recommended that levels of main- tenance be increased and that the railroad track rehabilitation continue. Most important is the proposal for a radically new tariff policy intended to attract more freight traffic to rail and thereby spurring use of the existing rail lines. These lines represent past investments which are used less than appears to be in the national interest. Some entirely new projects are recommended for later in the 1980s, including a road from Cochabamba to Trinidad and a new port in the east to give Bolivia access to the Paraguay River. New penetration roads in the lowlands are also proposed, and these should be built with complementary networks of feeder roads, and match the pace of land settlements and exploitation induced by the new road. Most infrastructure projects are for improvements on the existing alignment, including nearly 700 km of road betterment with paving and just over 3,600 km of major gravelling. All projects recommended by the Study should be the subject of detailed feasibility studies, considering in detail engineering, economic and other aspects. In addition, these -57- feasibility studies should re-examine the conclusions on inter-modal competition presented in this report, with the aim of avoiding unnecessary duplication of facilities in the same corridor. This is not to say that parallel facilities should be avoided--indeed, most corridors today contain both a railroad and a highway, but for the most part serving different types of traffic. However, before major improvements for one mode can be contemplated, the capacity and performance of an existing alter- native mode must first be examined. Examples are the advisability of improving the Santa Cruz-Yacuiba highway parallel The existing vehicle ferry at Puerto Banegas near Santa Cruz. A detailed study of a bridge is recommended. to the existing railroad, and the real requirement for a rail interconnection in a corridor already served by one paved road, and shortly to be provided with another (with the construction of the Chimore-Yapacanf project). More new projects are envisaged for the 1990s, when the country's economy is expected to permit a higher level of infra- structure investment. The largest among these would be the rail interconnection Santa Cruz-Cochabamba; however, the justifica- tion of that project has yet to be established. In addition, an extensive system of paved highways should be in place by the end of this century, reaching some of the currently more isolated parts of the country, including Yacuiba, Trinidad and Guayaramerin. Some restructuring is recommended for all the main organizations concerned with transport infrastructure and ser- vices, including ENFE, SNC and the organizations charged with the control of water transport. Also, it is proposed to strengthen the Ministry of Transport's General Directorate of Road Transport -58-  1 50 0 ~ 100 200 Km . • . . . . I •• LEGEND RAILROAD !!ol~~!iiiiiiiiiiii~~~!!!1 PAVED ROAD - - - - - - OTHER IMPORTANT ROAD 1:1 PAVED AIRPORT .t NEW RIVER PORT ............ .... ... . ...... .. ..,, \\ \ \ \ \ I o () III ~ '2 LOCATION OF NEW PORr AND ~EOUIREMENTS FOR ROAO o AND RAI L ACCESS TO BE DEFINED c \AVAROA ~ \, ~ ~ '\> \. J .' ~ <l '\> ~ L.. J:!~ 0 \) I'" () /j / \ --...., " ~ ~ o /" " rJ R E .\ R 0 E N TIN A , A POSSIBLE TRANSPORT SYSTEM FOR THE YEAR 2000 ux,t'"'* fl'millr: and cA06ociale6 FIGURE 11 to become more effective in controlling the provision of truck and bus services. Yapacanf The recommendations made by this Study are the result of a massive analytical effort, using criteria of economic evaluation. However, the proposed transport plan will require updating in the future, as unforeseen developments take place or as the nation's priorities change. Transport planning is a continuing process which has been launched with this Study. To reap the full bene- fit from the investment made the Study, the continuing transport planning process must now be firmly established. To achieve this, the creation of a National Transport Center has been proposed as an autonomous agency under the Ministry of Transport. Its staff would largely consist of this Study's counterpart team who have now acquired knowledge of the tech- niques of comprehensive transport planning. It would be unfortunate indeed if this accumulated knowledge were dispersed and thereby lost. The function of the Center would be to act as an advisory group to the Government with regard to overall transport policy. It would also act as a body coordinating the implementation of the transport plan. This latter function has already been defined under Phase II of the National Transport Study which is planned to commence upon completion of this report. -59-  APPENDIX ONE GOVERNMENT INSTITUTIONS AND STUDY PARTICIPATION  BOLIVIA NATIONAL TRANSPORT STUDY Government Agency Ministry of Transport, Communi- cations and Civil Aeronautics (I) International Cooperation United Nations Development Programme Agency Executing Agency International Bank for Reconstruction and Development (IBRD) Consultants Wilbur Smith and Associates Consa SRL Ecoviana SRL GOVERNMENT TRANSPORT AUTHORITIES AT THE TIME OF COMPLETION OF THE FINAL REPORT Ministry of Transport Minister Colonel Rene Guzman Fortun Subsecretary Engineer Gerardo Jordan Barrera Ministry of Aeronautics Minister General Waldo Bernal Pereira Subsecretary General (r) Federico Casanovas Valderrama Ministry of Defence Minister General Armando Reyes Villa Command of the Navy Commander Rear-admiral Oscar Pammo Rodriguez Subsecretariat of Maritime, River and Lake Interests SUbsecretary Rear-admiral Rene Torrez Saavedra (I) Now the Ministry of Transport and Communications. -61-  AGENCIES COOPERATING IN THE STUDY AGENCY EXECUTIVE REPRESENTATIVES Ministry of Transport, Communications and Colonel Renf Gusm'n FortQn Mr. Jos~ Luis Pereira Civil Aeronautics (MTCCA) Eng. Waldo Rocabado National Railroad Company (ENFE) En9. Carlos Azurduy Tri90 Eng. Fernando Solares Eng. Oscar Silva Mr~ Ram6n Claure Eng. Jorge Otero Lic. Abel Martinez Nutional Airport Administration (AASANA) Cln. Raimundo Moscoso Mr. Fed~cico Tejerina National ROud Service (SNC) Eng. Jorge Jauregui C. Eng. I~es Chumacero Eng~ C~sar Sologuren Eng. Martin Guzm4n Ceneral Directorate of Air Transport Gen. Jaime Ayala Mr. Roger Pelia dnd Aerial Works (DGTTA) Lloyd Alire<> llol1viano (LAll) Cln. Mario Equia Mr. Jos~ Rico N. MInistry of Planning and Coordination General Oscar Larrain Gen. Federico Casanovas (1) Frontanilla Cap. Roger Guzman Eng. Armando Strauss The llolivian Navy (FNll) Rear-admiral Oscar Pammo Rodriguez Hydrographic Service of the Navy (SHN) Cap. Gildo Angulo Customs Administration (AADAA) Cln. Rolando S4nchez LOpez Mr. Ren~ Peila BOLIVIA NATIONAL TRANSPORT STUDY STAFF CONSULTANT STAFF COUNTERPART STAFF NAME POSITION NAME POSITION Technical Personnel! Gerhard Menckhoff Study Director Josl! VlIsque: B. Counterpart Director Stephen Stares Transpcrt Planning Engineer(and Oscar zapata Z. Specialist in National and Deputy Study Director) Regional Planning Michael C. Clark Computer Systems Analyst Oscar Espinosa G. Transport Planning Engineer N&stor Dalen~ M. Specialist in Transport Infrastructure Cfsar lleyer A. Specialist in Transport Regulations J. Michael Thomson Transport Economist Gerardo Jord~n B. Specialist in Transport Infra- structure David S. Jarvis Transport Economist Gonzalo Barrientos T. Computer Systems Analyst John M. Thompson Transport Economist Edgar Monje L. Transport Economist Duane A. Milstead Specialist in National and Regional Hugo Saravia L. Specialist in Data Collection Development Planning Robert Davis Transport Engineer Mario zabala o~ Transport Engineer Francisco Munoz de Escalona Specialist in Agricultural Development Manuel Posnansky L. Specialist in Development and AgriCUlture Dr~Antonl0 CrespI Gonzales Railroad Engineer Mario Castrillo T. Specialist in Water Transport Dr.Antonio G6mez Fungairino Specialist in Transport Regulations Emilio Claro. N. Transport Economist Dr.Carl H. Plumlee Specialist in Ports and Water Transport Sonia de Portugal Assistant Economist George ~. Stanbrough Highway Engineer Johnny Sanjinfz A. Assistant Engineer Clarence H. Carlson Highway Engineer Germ'n Segales S. Assistant Engineer Sexton A. Olin Highway Engineer Primitivo Condarco A. Assistant Engineer General (r) Federico Casanovas Specialist in Air Transport Administrative Personnel Hugh Dead"'Yler Specialist in Air Transport Gon.alo GarrOn C. Head of Administration John E. Green Pipeline Engineer Abel Morales R. Accountant Rolf Annecke Specialist in Transport Regulations Nancy Sarmiento R. Bilingual Secretary Hector Revue 1 ta Highway Engineer Evelyn G6mez T llilingual Secretary Dr. Merrill J. Roberts Transport Economist Consuela L. de Noya Bilingual Secretary Dr.CorneliuB H.Zondag Development Economist Sylvia R. de castellanos 11ilingual Secretary Robert J. Zuelsdorf Transport Economist Carmen Vel'squez Q. Bilingual Secretary Or. Wilbur S.Smith Consultant Manager M.!lena D.de Guz~n Secretary Robert A. Hubbard Consultant Manager Enri9ue Balboa C. Draftsman Paul E. Conrad Consultant Manager Ingrid Carola Centellas G. Draftswoman John W. llonniville Consultant Manager (l) General Federico Casanovas had various responsibility at different stages of the Study. -62-  APPENDIX TWO REPORTS ISSUED DURING THE STUDY  REPORTS ISSUED DURING THE STUDY TITLE DATE Inception Report December, 1978 Progress Report September, 1979 First Interim Report December, 1979 Second Interim Report July, 1980 Draft Final Report November, 1980 -63-  APPENDIX THREE CONTENTS OF THE OTHER VOLUMES  CONTENTS OF THE OTHER VOLUMES VOLUME CHAPTER 1 1 Introduction 2 Objectives of Transport Policy 3 Data Collection and Study Methodology 4 Existing Transport System 5 Transport Costs and Tariffs 6 The Financial Framework of the Transport Modes 7 The Bolivian Economy 8 Resources Available for Transport Investment 9 Existing and Future Transport D~fiands 10 Transport Projects Selected for Evaluation 2 11 Improvements and Maintenance of Existing Highways 12 New Penetration Roads and Other Transport Links in Remote Areas 13 Rail Transport 14 Air Transport 15 Improvements to International Transport Links 16 Organizational Aspects of Transport 17 Future Tariff Policy and Financial Prospects 18 Investment Program 19 Future Transport Planning 20 Conclusions and Recommendations VOLUME APPENDIX 3 1A Available Working Papers 3A Roadside Interview Surveys 3B Collection of Other Transport Data 3C Socio-Economic Data Collection 3D Definition of Analysis Zones 3E Definition of Commodity Classifications 3F The Transport Model 3G Case Study of Project Evaluation 3H Evaluation of New Modes on Existing Links 4A Existing Characteristics of Railroad Transport 4B Principal Results of Roadside Origin-Destination Survey 4C Existing Characteristics of Waterborne Transport 4D Existing Pipeline Characteristics 4E Existing Characteristics of Air Transport -65-  CONTENTS OF THE OTHER VOLUMES VOLW1E APPENDIX 3 5A Costs of Railroad Transport 5B Costs Related to Road Transport 5C Costs of River Transport 5D Costs of Air Transport 5E Other Aspects of Transport Costs 6A Road User Charges 6B Financial Analysis of AASANA 6C Financial Analysis of Rail Transport 4 7A Overall View of the Bolivian Economy 7B Definition of Alternative Development Patterns 7C Forecast and Distribution of Socio-Economic Variables 7D Socio-Economic Projections by Zone 9A Internal Traffic projections 9B Forecasts of Foreign Trade Movements by Mode 9C Potential Transit Traffic Through Bolivia IDA List of Candidate Projects IIA Vehicle Axle Load Measurement program lIB Costs of Betterment of Unpaved Roads IIC Highway Design Standards lID Highway Capacity and Congestion lIE Summary of Evaluations of Unpaved Roads IIF Birdge Analysis IIG The R!o Seco-Desaguadero Highway 12A Analysis of New Penetration and Feeder Roads 12B Evaluation of the Santa Barbara-Bella Vista Highway 12C Evaluation of the Highway Eteramazama-San Ignacio de Moxos 12D Evaluation of the Ichilo-Mamore River System Cleaning Project 12E Evaluation of the Railroad from R!o Grande to Trinidad 13A Assumptions on the Costs of Railroad Rehabili- tation Projects 13B Evaluation of Railroad Rehabilitation Projects 16A Analysis of Regulations on Road Transport 16B Organizational Structure and Regulation of Water Transport 17A Projections of ENFE's Freight Operating Costs and Revenues IBA Committed Highway Investments -66-  TABLE OF ABBREVIATIONS $b Bolivian Pesos- SUS 1.00 = $b 25.00 (1981) SUS 1.00 = $b 20.00 (1977) ADT Average Daily Traffic AADAA Customs Administration AASANA National Airport Administration ADEPTA Association of Private Air Transport Firms COMIBOL National Mining Company COMIXTA Bolivian-Argentinian Joint Commission CNT National Transport Center CEPAL Economic Commission for Latin America CODETAR Tarij~ Department Development Corporation COFADENA National Development Corporation of the Armed Forces CORDEBENI Beni Department Development Corporation CORDECO Cochabamba Department Development Corporation CORDECH Chuquisaca Department Development Corporation CORDECRUZ Santa Cruz Department Development Corporation CORDEOR Oruro Department Development Corporation CORDEPANDO Pando Department Development Corporation CORDEPAZ La Paz Department Development Corporation CORDEPO Potosl Department Development Corporation DGCP General Directorate of Port Captaincies DGMM General Directorate of Merchant Marine DGTA General Directorate of Road Transport DGTTA General Directorate of Air Transport and Aerial Works DPC Directorate of Planning and Coordination ENFE National Railroad Company FNB Bolivian Navy GNP Gross National Product GEOBOL Bolivian Geological Service GDP Gross Domestic Product HDM Highway Design and Maintenance Standards Model IBRD International Bank for Reconstruction and Development (The World Bank) IBTA Bolivian Institute of Agricultural Technology IDB Interamerican Development Bank INE National Statistics Institute INALCO National Cooperatives Institute INTAL Institute of Latin American Integration IRR Internal Rate of Return LAB Lloyd Aereo Boliviano LAC Llneas Aereas Canedo LAI Llnea Aerea Imperial LPG Liquid Petroleum Gas LINABOL Bolivian Shipping Line MTCCA Ministry of Transport, Communications and Civil Aeronautics NPV Net Present Value NTS National Transport Study SHN Hydrographic Service of the Navy SN Structural Number (Used in Road Pavement Design) SN Modified Structural Number SNC National Road Service SNT National Transit Service TAM Transportes Aereos Militares UNDP United Nations Development Programme USAID United States Agency for International Development YPFB National Hydrocarbons Company