Colombia - Highway Sector Project

Document of The World Bank FOR OFFICIAL USE ONLY u_ Report No. 3656b-CO STAFF APPRAISAL REPORT HIGHWAY SECTOR PROJECT COLOMBIA March 10, 1982 Projects Department Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Currency Equivalents Currency Unit = Peso (Col$) US$1 = Col$ 55 (as of July 1981) Col$ 1 = US$0.01818 Fiscal Year .January 1 - December 31 Units of Weight and Measures: Metric System Metric British/US Equivalent 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 kilogram (kg) = 2.20 pounds (lb) 1 metric ton (m ton) = 2,205 pounds Abbreviations ACIC Colombian Association of Contractors ADT Average Daily Traffic CFT Transport Finance Corporation CNR Colombian National Railways COLPUERTOS Colombian Port Authority CONPES Social and Economic Policy Committee DAAC Administrative Department of Civil Aeronautics DNP National Department of Planning ESAP Advanced School for Public Administration FAN National Aeronautics Fund FIDECAFE Coffee Producers' Association FNCV National Rural Roads Fund FVN National Highway Fund GAM Pavement Management Support Group HDM Highway Design and Maintenance Model ICD Inland Container Depot IDB Inter-American Development Bank INCORA Colombian Institute for Agrarian Reform INTRA National Transport Institute MOP Ministry of Public Works (Until 1976) MOPT Ministry of Public Works and Transportation (From 1976 Onward) PIN National Integration Plan SENA National Apprenticeship Training Service STS Selection and Training Section UNDP United Nations Development Program  FOR OFFICIAL USE ONLY STAFF APPRAISAL REPORT HIGHWAY SECTOR PROJECT COLOMBIA TABLE OF CONTENTS Page No. I. THE TRANSPORT SECTOR ............ 1 A. General ............................................... 1 B. The Transport System .................................. 1 C. Transport Planning, Coordination and Investment ....... 4 D. Bank Involvement in the Transport Sector .............. 6 II. THE ROAD TRANSPORT INDUSTRY .............. . ................. 7 A. General ............................................... 7 B. Organization of the Road Transport Industry .... ....... 8 C. Regulation .................................................. o ................ 9 D. Pricing and Road User Charges ........... 10 E. Intermodal Coordination ..... .......................... 11 III. THE HIGHWAY SUBSECTOR ..................................... 12 A. The Highway Network ................................... 12 B. Traffic Characteristics ................................ 13 C. Road Safety ........................................... 13 D. Highway Administration ..... ........................... 14 E. Highway Planning and Financing .... .................... 16 F. Highway Engineering and Construction Supervision ...... 17 G. Highway Maintenance . . ..................... . 17 H. Training ....19 I. The Domestic Construction Industry.. 19 IV. MOPT'S 1982-1986 PROGRAM .20 A. General .20 B. MOPT's 1982-1986 Program and Financing .21 C. Program Components and Their Preparation, Evaluation and Selection .......... .....22 D. Institutional Measures .27 E. Assessment of MOPT's Program and Impact on Sector Policies 28 This report is based on the findings of an appraisal mission which visited Colombia during July/August 1981. The mission comprised Messrs. Lars Nordin (Economist), Jean-Claude Sallier (Engineer), and Pedro Geraldes (YP, Economist). The mission was assisted during shorter periods by Messrs. Carlos F. de Castro (Road Transport Specialist), Jacques Cellier (Economist), Ernesto Henriod (Construction Industry Specialist), Sergio Miquel (Road Safety Specialist), Giuseppe Morra (Training Specialist), and Rene Jarquin (Financial Analyst, Consultant). The report has been edited by Ms. Virginia R. Foster. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii- TABLE OF CONTENTS (Continued) Page No. V. BANK PARTICIPATION ........ ............................ 29 A. General ............................................... 29 B. Conditions and Procedures for Eligibility of Subprojects 30 C. Conditions and Procedures for Procurement and Bank Financing of Contracts ................... . ........ 32 D. Disbursement ............. . ............................. 33 E. Semi-Annual Consultation and Monitoring .............. . 35 F. Bank Review of Subprojects ..... ....................... 36 G. Economic Justification . .. .............. ..... ...... 37 H. Assessment of Risk ................................. 38 VI. AGREEMENTS REACHED AND RECOMMENDATION ..................... 39 TABLES 1.1 - National and International Freight and Passenger Transport (1970-1979) ...................... . 41 1.2 - Public Sector Investment in Transport (1972-1980) ..... 42 1.3 - World Bank Group Involvement in Colombian Transport ... 43 2.1 - Vehicle Registrations and Fleet Capacity (1973-1980) ... 44 2.2 - Classification Standards for Trucking Companies ........ 45 2.3 - Petroleum Products Price Structure and Opportunity Costs ........................................................... 46 2.4 - Road User Taxes and Road Costs .... .................... 47 3.1 - Colombian Road Network (1980) ........ . ................. 48 3.2 - National Highway Network (1965-1980) . . 49 3.3 - Intensity of Use of the Network .... ................... 50 3.4 - National Highway Fund Revenue and Expenditures (1970-1980) ..................... .................... 51 3.5 - Design Standards ................... ................... 52 3.6 - Design Standards for Road Upgrading .. ................. 53 4.1 - MOPT Program 1982-1986 (2 pages) ........... ........... 54-55 4.2 - MOPT 1982 Rehabilitation and Paving Program ........... 56 4.3 - Road Safety Component ............... .. ................ 57 4.4 - Technical Assistance for Road Safety Component ........ 58 4.5 - Estimated Maintenance Personnel to be Trained ......... 59 4.6 - Capital and Technical Assistance Expenditures ......... 60 5.1 - Bank Participation .............. . ...................... 61 5.2 - Estimated Schedule of Disbursements ................... 62 5.3 - MOPT Tender Program for Construction, Rehabilitation and Paving .................... . ...................... 63 5.4 - Bank-Supported Rehabilitation and Paving Subprojects .. 64 5.5 - Status of Subproject Preparation ................. . . .... 65 5.6 - Physical Targets ...... .................. .............. 66  - iii - TABLE OF CONTENTS (Continued) Page No. ANNEXES 1 - Completed and Ongoing Highway Projects .... ........... 67 2 - Application of the Pavement Management System for the Paved National Network...... 72 3 - Outline Terms of Reference for Technical Assistance f.or Training of Road and Mechanical Maintenance Personnel .76 4 - Outline Terms of Reference for a Study of Trucking Rlegulation and Services ............................. 80 5 - Summary Data Sheets for Candidate Subprojects .... ...... 86 6 - Selected Documents and Data Available in the Project File .89 CHART I - MOPT Organization .91 MAP IBRD 12553R- Colombia National Highway Network   I. THE TRANSPORT SECTOR A. General 1.01 Colombia has an area of 1,139,000 km and a population of 26.7 million (mid-1980); during the last decade, the population has grown at a rate of about 2.3% per annum. The country's main cities are in the western part of the country, where the bulk of the economic activity is located. The Andes mountains present formidable barriers to communication between the western and eastern parts of the country and among the main population centers. It was not until the early 1950s that, under the drive toward integration and modernization, the transport network began to evolve into a national network. 1.02 The Magdalena River was the only transport route between the central region and the Atlantic coast until, in the early 1960s, construction and upgrading of the Western Road (Cartagena-Medellin-Cali-Pasto), the Eastern Road (Santa Marta-Bucaramanga-Bogota-Neiva), and the two main transverse roads that connect them in the central region were substantially completed. Since 1961, the Atlantic Railroad has provided a connection between the port of, Santa Marta and the two major urban centers of Bogota and Medellin. During the last 25 years, the country's port capacity and air transport services have also expanded considerably. 1.03 During the period 1950-1980, the transport sector's contribution to GDP grew at an annual rate of 6.0%, which is larger than the annual growth rate of 5.8% of total GDP for the same period. At the same time, the share of the transport sector in GDP rose from 5.1% in 1950 to 9.4% in 1980. 1.04 The Colombian inter-urban transport system moved about 22.5 billion ton-km in 1980, of which about 80% was moved by truck over the national highway network (Table 1.1). Coastal shipping accounted for about 9%, river transport about 6%, railways some 4%, and aviation about 1%. Although agri- cultural output dominates, manufactured goods are becoming an increasing share of Colombian freight. Roads dominate passenger traffic, accounting for almost 73%, while aviation's share is about 25%; railways serve only about 2% of the passenger traffic. 1.05 The Bank has had an active participation in the transport sector during the past decade through a continuous involvement in highways, railways, aviation, rural roads and, lately, ports. As a result, the Bank has played an important role in the development and consolidation of the transportation network. Bank involvement in the sector also supported improvements in sectoral planning, policy formulation and related institutional measures. The proposed Highway Sector Project represents a further strengthening and development of the objectives pursued under the Bank's previous seven highway projects in Colombia (Annex 1). B. The Transport System (i) Highwajs 1.06 The highway subsector and its administration are discussed in detail in Chapter III.  -2- (ii) Railways 1.07 The railway network in service consists of about 2,705 km of single track narrow gauge (0.914 meter) lines owned by the Government. The most important routes, the Atlantic or Trunk Lines, between Santa Marta and Bogota-Medellin, are 1,287 km long and carry over 70% of the total railway traffic. The Pacific Lines serve only the Department Del Valle, linking mainly the port of Buenaventura with the city of Cali. The connection between the Pacific and Atlantic systems was interrupted in 1975 by land- slides along a critical section of about 140 km south of Medellin; the section has never been repaired. In view of potential new container traffic and coal exports through the port of Buenaventura, a study is planned by CNR to determine the feasibility of connecting the two systems by constructing a new railway link between Ibague and Armenia. This would also help to balance the import and export traffic through the port of Buenaventura. 1.08 The railway system is administered by the Colombian National Rail- ways (CNR) created in 1963. Since 1960, the Bank has supported the expansion and the upgrading of the CNR system through six projects (a seventh was approved on February 16, 1982, para 1.10). The improvement of CNR's financial position and of its operational efficiency has been the main objective of the latest projects. During the early implementation of the sixth railway project (Loan 926-CO, US$25.0 million, May 1973), CNR showed good performance. Freight traffic increased from 1,198 million ton-km in 1972 to 1,329 million ton-km in 1974, and passenger traffic increased from 398 million pass-km to 482 million pass-km for the same period. The working and operating ratios surpassed agreed targets, and CNR produced a Col$ 10 million surplus in 1974. After 1974, however, CNR encountered technical, financial and managerial difficulties which caused its performance to deteriorate sharply. Freight traffic also decreased to 1,139 million ton-km in 1975 because of a countrywide economic slowdown which affected imports of wheat and fertilizer which had been transported by CNR. Government interest in the railways appears to have weakened during this period. 1.09 There has,been an upward trend in freight traffic since 1976, yet the overall share of traffic moved by rail has continued to decline because of deterioration in railway services. Although the competition with trucking is increasing, rail freight is somewhat specialized in that the commodities carried by rail are mostly low value bulk commodities moved over comparatively long distances. The average haul is about 460 km. Passenger traffic has been decreasing since 1976 because of the closure of a number of uneconomic services, reductions in frequencies, rationalization of passenger trains and the shortage of locomotives which has caused more cancellations in passenger trains, including some on the Bogota-Santa Marta main line.  1.10 Renewed interest in the long-term viability of the railway has been spurred by increasing energy prices and by the prospect of large-scale haulage of coal from deposits in the central and eastern mountain ranges to the ports. The National Transport Plan (para 1.21), stating that the railways have an important advantage in transporting bulk commodities over long distances, proposes measures to encourage this type of use of the network, including market- ing strategies and rehabilitation of the track. The Bank, on February 16, 1982, approved a Seventh Railway Project addressing the present needs of the railway, focusing on institutional improvements and rehabilitation of CNR's physical assets. (iii) Inland Waterways 1.11 The traditional importance of inland waterway shipping has decreased because of the development of road and rail transport. The Magdalena and Cauca Rivers, together with the man-made Canal del Dique which connects the port of Cartagena with the Magdalena River, constitute a major transport system, totaling 1,366 km of navigable waterways, which accounts for almost all inland shipping. An IDB-financed project supports improvements to the Canal del Dique. The Magdalena River is quite dependable in all seasons to Gamarra (about 470 km from the Barranquilla river-sea terminal); beyond there to Salgar (930 km from Barranquilla), only seasonal navigation is possible. Other river systems (Amazonas, Orinoco, Atrato), although very extensive, serve only intraregional transportation of small magnitude. 1.12 Bulk goods, especially petroleum, fertilizer products and cement, constitute the main freight movement. Total traffic in 1979 was about 1.5 million tons, of which 85% consisted of petroleum products. Freight transport services are mostly in private hands, while the administration and maintenance of the rivers and most ports are under the jurisdiction of the Directorate responsible for inland waterways in the Ministry of Public Works and Transportation (MOPT). Inland shipping has complemented rail traffic to some extent, particularly for goods originating from and destined to the ports of Cartagena and Barranquilla. Transshipments to both rail and road can be effected at a number of river ports further upstream; however, the comparative advantage of road transport relative to the combined river-rail or river-road movements makes these combinations viable for just a few products. (iv) Ports 1.13 The principal seaports of Colombia are Cartagena, Barranquilla and Santa Marta on the Atlantic coast, and Buenaventura and Tumaco on the Pacific coast. They are administered by the Colombian Port Authority (COLPUERTOS), which is an autonomous Government agency. For about a decade, this agency has been improving transit storage and cargo-handling facilities with financing from the Inter-American Development Bank (IDB). About 3 million tons per year move through the ports; of this total, more than 50% is handled by Buenaventura. In all ports except Tumaco, the volume of inbound traffic is more than that of outbound traffic, and only Buenaventura has significant cabotage traffic other than oil, which is transported mainly from Tumaco to Cartagena via the Panama Canal.  - 4 - 1.14 All five seaports are characterized by low labor productivity, inefficient cargo handling and low demurrage charges, resulting in high costs and overall port congestion. Surcharges have consequently been levied on the ports. The use of containers, together with improvements in port management, labor practices, facilities and pricing structure would go a long way toward overcoming these problems. A UNDP-financed study, for wh:Lch the Bank is executing agency in connection with a proposed port project, has addressed these aspects and it is being reviewed by the Bank. Other bottlenecks to evacuating freight from the ports are lack of coordination with road and rail services and insufficient inland bulk storage facilities for grain imports. (v) Aviation 1.15 The aviation subsector developed very early in Colombia as a result of the major problems to surface transportation caused by the topography. Air transport is now a major passenger transport mode for both international and intercity travel. Domestic freight, in terms of ton-km, has remained stable in recent years. International freight traffic, however, has been gaining importance. There are three major national airlines and eleven foreign airlines providing international services, and there are ten additional regularly scheduled domestic carriers. Since 1968, aviation has been governed by the Administrative Department of Civil Aeronautics (DAAC), which is directly responsible to the President of the Republic. The financial arm of DAAC is the National Aeronautics Fund (FAN). 1.16 There are some 70 airports whose standards vary widely. In general, those in the western half of the country are better developed than those in the east. At present, seven of the airports in mainland Colombia and one additional on the Caribbean Island of San Andres are equipped to handle international flights. In view of technological improvements in the aviation field and the inherent difficulties of surface transport, aviation is most likely to play an increasing role in passenger transport among major urban centers. A new airport at Medellin and improvements to Bogota and Cartagena airports are being implemented under a Bank-financed aviation project (Loan 1624-CO). C. Transport Planning, Coordination and Investment 1.17 The effort to complete the basic transport network has required a considerable share of the country's total investments. Transport represented about half of public investments in the late 1950s. In the 1960s, when the trunk highway system and the Atlantic Railways were being completed, that share rose to more than 60%. More recently, however, the transport infrastruc- ture share of total public investments has been declining; in the late 1960s, it was about 35% and, since 1976, it has been about 12%.  - 5 - 1.18 In 1980, about Col$ 19,195 million (about US$430 million) were invested in the transportation sector (Table 1.2). Of this amount, about 86% was for highways and road transport (including national highways and departmental and f'eeder roads), 7% for ports and inland navigation, 5% for airports and 2% for rail transport (not including operating subsidies). The continuous decline in railway investments partly explains the deteriorat- ing performance of CNR. 1.19 The national transport system developed in a relatively short period of time in response to heavy demands by the rest of the economy and to the objectives of successive Governments of integrating regional markets and opening up the economy to foreign trade. By and large, the capability of the transport sector institutions did not keep pace with the rapid growth of their increasingly complex responsibilities. Responsibility for transport policy was distributed among Ministries, regional and local governments and decentralized agencies, each of which played an important role in creating the rules and regu- lations governing its own activities. Consequently, there was little coordination among modes and a lack of regional planning. Until 1966, when, by Decree 3160, an attempt was made to tie in the various entities in charge of transportation with the Ministry of Public Works (MOP), no framework allowing central planning and policy formulation existed. Ministerial control remained limited, and the lack of coordination persisted. 1.20 More recently, however, there has been considerable strengthening of sector institutions, with the establishment of central control of the sector under MOP, which became the Ministry of Public Works and Transport (MOPT). This process involved a restructuring in 1976 and a reorganiza- tion in 1980, with the creation of a Sectoral Planning Office and a National Transport Council respectively (Chart I). The National Planning Department (DNP) also maintains an overall coordinating role and has a transport section in its infrastructure division. The Sectoral Planning Office of MOPT is responsible for carrying out intermodal planning and coordination. In addition, budgets and investment programs for all modes, except pipelines and aviation, require MOPT apprc,val. The National Transport Council, which is an advisory body instituted to achieve sectorwide coordination, is headed by MOPT's Vice Minister and includes representatives of the transport industry and the Colombian Engineering Society. 1.21 The National Transport Plan, prepared by the Sectoral Planning Office of MOPT in 1980, defines the role and goals of each mode and outlines investment programs and their financing. It also establishes guidelines for the distribution of responsibilities for planning, construction and maintenance of the transport network among national and regional agencies. In brief, MOPT's Sectoral Program (Chapter IV) is consistent with the priorities set up in the National Transport Plan and identifies investment requirements, in constant July 1981 prices, of about Col$ 120,000 million (US$2.2 billion) for the period 1982-1986, which would represent a substantial increase in the annual level of expenditure over the late 1970s and would end a period of underinvestment in the sector.  1.22 Future revisions of the Plan would place increased emphasis on (a) sector objectives within the framework of the National Economic Policy, (b) maintenance of infrastructure and equipment, (c) intermodal coordi- nation, (d) transport safety, (e) transport pricing, and (f) energy con- siderations. The Secretariat of the National Transport Council (MOPT's Sectoral Planning Office) would take the initiative of meeting regularly with the representatives of all autonomous institutions related to the transport sector in order to prepare sector policies and programs to be analyzed by the National Transport Council and later incorporated into the National Transport Plan. The long-term goal would be to integrate the programs of the different transport modes into a more comprehensive transport sector framework to efficiently meet Colombia's transport requirements. During negotiations, the Government confirmed that it would regularly review progress made in achieving sectoral objectives and update the National Transport Plan, a first revision of which would be produced by December 31, 1983 (in draft form by September 30, 1983). 1.23 The present administration's development strategy combines expansion of the economic infrastructure, designed to integrate regional markets, with a return to export-led growth and increased emphasis on improving allocation efficiency. The renewed emphasis on transport infrastructure, combined with efforts to accelerate integrated economic growth, seems appropriate at this stage of Colombia's development. Transport costs are high and discourage interregional and external trade. With these costs lowered, transport services made more reli- able, and incentives provided for investments in areas with growth potential, a substantial boost could be given to interregional and external trade and to overall economic growth and employment generation. 1.24 The financing of the transport sector is arranged through a combi- nation of (a) National Funds, e.g., the National Highways Fund, the National Rural Roads Fund, and the National Aeronautics Fund which are supplied by specific tax revenues, Government contributions and external financing; and (b) general revenues collected by the transport entities from their customers, e.g., CNR and COLPUERTOS. The transport sector institutions have a policy of cost recovery, and their pricing policies are generally adequate. However, in practice, its implementation has been weakened, e.g., CNR has had to resort to Government contributions to finance its operating deficits because of manage- ment difficulties and operational inefficiency, in particular lack of motive power. Existing cross-subsidies, e.g., between import and export tariffs in the ports and between freight and passenger tariffs on the railways, are not of major significance. The subsidization of road transport is being reduced with the phased increases in gasoline prices (para 2.17). A remaining problem is the inadequate level of charges on intercity road freight transport (para 2.18). D. Bank Involvement in the Transport Sector 1.25 The Bank has played an important role in the development of Colombia's transport sector. Its involvement dates back to 1949, when a transport sector mission reported the transport system to be in an exceptionally bad condition. Since 1950, the Bank has lent about US$551 million 1/ in 23 loans to the sect:or (Table 1.3). These investments supported the construction of an integrated 1/ Including an IFC operation for pipeline development.  highway network and, more recently, have contributed to the rehabilitation and maintenance of the national network and to the development of an improved highway organization (Annex 1). They have also contributed to the construction of over 670 km of main line on the Atlantic railroad from Dorada to Fundacion, as well as to the rehabilitation of other lines. The domestic aviation project is helping to improve basic aviation infrastructure and to improve subsector efficiency and planning. 1.26 Bank involvement in Colombia's highways (Annex 1) has gone through three distinct phases. The first covers the years 1951 to 1961, in which four projects which had the basic characteristic of sector loans (one was an IDA credit) supported the country's first Highway Plan. In the second period, from 1961 to 1970, three loans financed the construction and upgrading of limited sections of the trunk system. The move away from sector lending was prompted by the preference prevailing at that time in the Bank for tight and clearly defined projects, with focus on engineering of specific road sections. After a hiatus of seven years awaiting absorptive capacity improvements in MOPT and, in particular, the establishment of a sound pricing policy with respect to hydrocarbons, the Bank resumed lending for highways in 1977 (Loan 1471-CO). At that time, the Bank returned in part to the sector approach since, in addition to financing the improvement of a specified number of kilometers, it tackled the country's deficient highway maintenance efforts by financing technical assistance and a program of acquisitions to improve equipment management. After an initial delay of about two years, the project is now proceeding well. Also, the recent loan for rural roads (Loan 1966-CO) follows a sector approach in that the Bank finances a portion of the program of the Fondo Nacional de Caminos Vecinales (FNCV), the specialized Government agency responsible for rlral roads. The selection criteria for individual subprojects were developed by the Government with Bank assistance. The project covers FNCV planning and programing procedures, and provides that only roads that have a rate of return higher than the estimated opportunity cost of capital are eligible for financing under the loan. It also supports FNCV's maintenance and rehabilitation policies and improves coordination between physical and financial programing. II. THE ROAD TRANSPORT INDUSTRY A. General 2.01 The Colombian transport system moved about 21.5 billion ton-km of intercity freight in 1979. This traffic has been growing at an average 5.0% p.a. over the past ten years. Road transport has continuously increased its share of freight movements, and is now about 81% of the total, at the expense of both rail and river transport (para 1.04). Development of road transport has been influenced by a fairly extensive highway infrastruc- ture in the highlands and by limited modal competition. It has been more important around the main urban areas of the Departments of Cundinamarca, Antioquia, and Valle; these departments account for about 70% of the regis- tered trucking companies and for about 65% of the truck fleet capacity.  - 8 - 2.02 The number of trucks operated for-hire was estimated at almost 60,000 units, yielding an overall capacity of 466,000 tons (Table 2.1). Small trucks are still the norm: 87% of them carry less than 12 tons payload; in general, they are 6 or 8 ton single rear axle trucks. The number of large trucks (over 12 tons), however, has been increasing at an annual rate of 16% over the last seven years, and their transport capacity now accounts for more than one-third of the total. The vehicle fleet operated for public transport of passengers was estimated at 89,000 units in 1980, of which 33,000 were buses or minibuses and 50,000 were passenger cars (urban or inter-urban taxis). 2.03 The total capacity of the fleet of trucks is sufficient to meet the demand under the presently poor operating conditions. Average load factors are low, of the order of 55%, although overloading is a common practice; there is a high proportion of empty truck movements due to the lack of return load. Another factor contributing to low overall efficiency is the composition of the fleet, which includes a high proportion of small trucks. Although they were appropriate for the mountainous portions of the highway network, the small trucks are now aging (many of them are 20-year old models or older) and still gasoline-powered. Nowadays, they cannot compete with larger diesel-powered truck and trailer units on long hauls. 2.04 The present situation of the truck fleet is mainly the result of regulatory measures introduced in the late 1960s and early 1970s (Section C). Although apparently aimed at improving operating efficiency, regulation has led to a restrictive environment in which major companies control the provision of' for-hire public transport (Section B) and has considerably slowed down the renewal of aging trucks and the modernization of the fleet. 2.05 Modal coordination of transport services has not been developed either. There are opportunities for cost savings through intermodal services in major corridors, but they have been hampered by the inefficiency of the railway. Containerization of cargoes will help to foster the development of intermodal transport if adequate facilities are provided for intermodal transfers. B. Organization of the Road Transport Industry 2.06 As of October 1980, there were 405 licensed road freight transport companies. Owner-operators must associate themselves with such companies; this is known as "affiliation." Through affiliation, trucking companies have gathered an average of over 100 trucks each, which is a relatively high level of syndication. The major portion of the fleet (about 92%) is owned and operated by affiliated owner-operators. 2.07 In 1980, there were 617 companies licensed to perform passenger transport services. These companies served 167 urban centers and nominally controlled about 89,000 passenger vehicles, of which about 60% were for urban services and the remaining 40% for inter-urban services. This fleet moved about 12.4 billion passenger-km in 1980. In passenger transport, however, affiliation of independent owner-operators to companies holding licenses has often been made through cooperative membership (87% of the fleet). This type of association links both the vehicle and the individual owner to the cooperative and results in a closer link than simple company affiliation.  -9- C. Regulation 2.08 The regulatory system is complex; it is documented through several laws and decrees, the most important of which is Decree No. 1393 of 1970 which contains the Road Transport Law with subsequent addenda. These regulations: (a) provide standards of qualification for transport companies (freight and passenger); (b) make it compulsory for all vehicles performing freight transport services to use a National Bill of Lading (Planilla Unica de Carga) sold by the National Transport Institute (INTRA) to licensed companies; (c) authorize INTRA to control the growth of the fleet; and (d) authorize the Government to control the weights and dimensions of vehicles. INTRA was created in 1968 as an autonomous agency which reports to MOPT and implements and enforces regulations and Government policies concerning the road transport subsector. 2.09 Transport companies are evaluated by INTRA through a point system rating company capital, transport capacity (company-owned and affiliated), operational efficiency, quality of service, labor conditions, and level of organization. They are licensed for carrying general cargo and/or special services and for operating in specific geographical areas. Licenses are urban, departmentaLl (within the same department), interdepartmental (four or fewer neighboring departments) or national. However, the geographical regulation is of little relevance because about 80% of the companies have a national license. Licensed companies are also classified into three categories - A, B and C - which mainly reflect their size and company-owned transport capacity. Table 2.2 shows these classification standards. The companies at present are roughly equally distributed in the three categories; however, few of them comply with the ratio of company-owned capacity required by law. 2.10 Licensing of trucking companies was aimed at improving the efficiency of the industry and increasing the security of the cargo by discouraging vehicle owners from operating individually. The objective was the gradual integration of owner-operators into small companies. The regulation was aimed at providing owner-operators, through company membership, with the necessary means for commercialization (return load, brokerage services), security (insurance), and access to financing. However, over time, the regulation has led to a restrictive situation where (a) a limited number of companies control the provision of for-hire public transport; (b) these companies set tariffs charged to shippers and rates paid to affiliated owner-operators; (c) owner-operators have no legal status (except through affiliation) and therefore have no access to credit; and (d) a secondary market has developed where brokerage fees can be as high as 40% of the transport price. Easier entry into the industry and direct access to credit would help individual truckers to improve their efficiency. The proposed project includes a study of the impact of the regulation on the efficiency of transport services. A Government commitment to simplify and update the regulatory framework should be the basis for further examination of this issue during project execution. 2.11 The Law requires that goods moved on any public road among two or more Departments be carried under a National Bill bf Lading. It is the document which engages the responsibility of the carrier toward the shipper for the services described. It is issued by INTRA, and sold to licensed companies at a cost of 20 pesos (US$0.40); those companies, in turn, resell the document to their affiliatedl truckers at a high premium. Direct sale of the Bill of Lading to any qualified carrier, including individual owner-operators, would be preferable and would be examined in the study mentioned in paragraph 2.17.  - 10 - 2.12 The National Bill of Lading can be a valuable source of statistical information on the road transport industry. Its use has so far been limited to the evaluation of interdepartmental commodity flows. Joint efforts from INTRA and MOPT's Sectoral Planning Office will be required to make more systematic use of it. 2.13 INTRA is authorized to control additions to the fleet by recom- mending to the Automotive Industry Coordination Committee (in which the Minister of Economic Development, the Superintendent of Industry and Commerce and the Foreign Trade Institute (INCOMEX) are represented) the number of vehicles of various characteristics to be assembled or imported during the year. For 1980-1981, the number of vehicles imported was only 504, mostly large units. These controls are meant to stabilize the industry and avoid excess supply; in practice, however, control of public transport capacity has preserved the market position of existing companies and has affected the quality of trucking services by slowing down modernization. 2.14 Colombia's regulation of vehicle axle weight authorizes maximum loads of 8.2 tons for single axle, 14.5 tons for tandem axles and 31.4 tons for multiple axle groups. This is significantly lower than in the other Andean Group countries, in particular in those which, as Colombia did, signed the Cartagena Agreement of 1970, which specifies maximum loads of 11 and 16 tons for single and tandem axles respectively. In November 1978, MOPT proposed an increase in legal load limits to 9.3 tons for single axles and 17.5 tons for tandem axles. However, since the Andean Pact countries are reviewing the presently agreed limits, no final action has been taken. The Seventh Highway Project (Loan 1471-CO) includes the study and the subsequent implementation of a plan of action to update regulations and to improve enforcement on high traffic routes. MOPT has contracted a consulting firm (TECHNOCONSULTA) which, in December 1981, presented MOPT with recommendations for the setting up of a system of weighing stations. During negotiations, MOPT confirmed that it would install and start operating these stations by December 31, 1983. D. Pricing and Road User Charges 2.15 The Government policy is that the costs of road infrastructure should be recovered mainly through a tax imposed on fuel and partly through tolls on specific roads with sufficient traffic. The costs of administering the road transport industry should be recovered through company licensing, vehicle registration fees, and other charges. Taxation and import quotas on vehicles are aimed at protecting the domestic industry and comply with Andean Group regulations. Domestic assembly quotas also comply with these regulations. 2.16 In 1980, the National Highway Fund (FVN) revenues from taxes on gasoline and gas-oil accounted for about 70% of MOPT's total expenditures for road infra- structure and administration, and net receipts from tolls accounted for almost 2% (para 3.17). Supplementary funding, which was achieved mainly through the Government budget and, to a minor extent, through external financing, was approxi- mately equivalent to the Government revenues from import taxes on vehicles and parts which fall into the Government budget. Total revenues of INTRA from licensing and registration (Col$ 441 million) also covered the costs of road transport administration (Col$ 362 million). In conclusion, the policies of paragraph 2.15 are being implemented, and total charges against vehicles and their operation largely cover MOPT road expenditures.  - 11 - 2.17 Successive Governments in Colombia have taken action to move petroleum- based fuel prices "at the pump" in the direction of international prices. The latest increase, effected on December 5, 1981, has brought the retail price of regular leaded gasoline 1/ (representing the major portion of gasoline sales) virtually to the level of international prices, or the estimated opportunity cost. Table 2.3, which is summarized below, shows the current structures for gasoline and diesel fuel. Gasoline Diesel (USJ per gallon, at Col$ 57.27 = US$1.00; Dec. 81) Retail Price 96 96 International price 100.9 103.8 (c.i.f. Barranquilla) (91) (92.4) (transport cost) (5) (5) (distributor's margin) (4.9) (6.4) Retail price as a percentage of international price equivalent 95% 92% 2.18 Although total fiscal revenue from road user charges corresponds to overall Government highway expenditure, the analysis of charges levied on each category of users shows that trucks and, to a lesser extent, buses are charged less than the infrastructure cost that should be attributed to them (Table 2.4). 2/ Under-taxation of trucks is a source of price dis- tortion in inter-city transport in relation to road-railway competition. It is one objective of the proposed Study of Road Transport Regulation and Modal Alternatives, which is included in the project (para 4.19), to assess charges paid by various categories of users and to examine resulting distor- tions and recommend specific remedial action. 2.19 The revision and updating of the National Transport Plan would also address the issue of road user charges within the framework of policies concerning public financiers, modal coordination and energy conservation and production (para 1.22). During negotiations, the Government confirmed its policy to take, from time to time, necessary actions to adjust charges to cover relevant infrastructure costs by various categories of road users. E. Intermodal Coordination 2.20 At present, the chances of intermodal services being developed either between road and rail or between river and rail would seem remote if rail services are not improved substantially in major corridors and brought 1/ Regular leaded gasoline in Colombia has an estimated octane level of 80, compared to 88 in the United States; leaded premium in Colombia has about 92 octanes, while US premium has 93. 2/ The road user charges paid correspond to only 70% of attributable road cost for trucks and only 50% for truck and trailer units.  - 12 - to a more competitive footing with trucking. On the other hand, a wider use of containers and modal alternatives (freight-consolidation centers, trailer leasing) could increase CNR's efficiency and the efficiency of trucking services, and would foster intermodal coordination with international freight- forwarding services. 2.21 Containerization has been developing quickly at the ports. Betweaen 1975 and 1980, the number of container movements (inbound and outbound) doubled from about 7,900 to about 16,600 TEUs. Clearance of container freight at inland points (unstuffing or stuffing) has been authorized by the customs authorities, but nonetheless over 95% of this work is carried out in the ports, causing congestion, damage, unnecessary expense, and partially defeating thes purpose of the container service. The availability of inland container depots (ICD) would encourage container transport and increase the safety factor. 2.22 Intermodal facilities and systems such as freight consolidation centers and equipment leasing have not yet been developed but their need is perceived. A feasibility study for freight consolidation facilities serv- ing the Cali-Buenaventura corridor is being carried out by CENCAR Ltda at the initiative of the Cauca Valle Corporation (CVC) and with the support of INT]RA and the Transport Finance Corporation (CFT). The purpose of intermodal freight consolidation centers in Colombia would be threefold: first, they would provide a commercial substitute to the legal system of affiliation by providing the trucker with the services (commercialization, maintenance facilities, and insurance) that transport companies are supposed to provide in accordance with the spirit of the Transport Law but, in fact, do not provide; second, they would operate as ICDs and encourage the movement of containers inland; and third, they would concentrate a sufficient amount of transport demand to encourage the development of intermodal services and such services as trailesr leasing and freight forwarding. 2.23 MOPT is aware of the need to update the regulatory framework of the transport industry and to support the development of terminal facilities to improve the efficiency of the industry and to foster intermodal services. MOPT has set up a task force, consisting of staff from INTRA under the supervision of the Vice-Minister, to prepare a detailed plan of action. A study of the trucking regulation and services is included in the proposed project (para 4.19). III. THE HIGHWAY SUBSECTOR A. The Highway Network 3.01 Colombia has a road network totaling about 77,200 km (Table 3.1), of which about 23,100 km constitute the national highway system under the jurisdiction of MOPT. The Secretariats of Public Works of the Departments have approximately 40,400 km and FNCV has approximately 11,400 km of roads. The balance of about 2,300 km of roads are private or in the National Territories. About one-third (7,900 km) of the national system is paved, while only about 2% (900 km) of the departmental roads are paved. The remaining two-thirds of the national network are gravel or unsurfaced roads. The major part of the Departmental or FNCV networks are earth roads.  - 13 - 3.02 The national highway system consists of (a) the primary road network, of about 10,500 km, that connects the main economic centers among themselves and with the seaports and neighboring countries; and (b) secondary roads, of about 12,400 km, that link smaller towns to the primary network and roads that provide access to other transportation modes (e.g., river ports). The regional road system comprises secondary roads that link regions of the departments among themselves, low traffic interdepartmental roads and rural roads that provide access to isolated regions. The national highway network increased in theB period 1965-1980 by some 30%, while, in the same period, the length of its paved fraction increased by some 125% (Table 3.2). The primary road network has reached a stage of development where the main emphasis should be on rehabilitation and maintenance. The secondary road network is still in the course of consolidation; hence, high priority should be assigned to selective upgrading and paving. New construction is presently of lower priority. B. Traffic Characteristics 3.03 The major part of the national highway network is regularly covered by a traffic cotnting system which includes automatic traffic counting stations, supplemented by manual counting. The number of automatic traffic counting stations increased from 19 in 1974 to 34 in 1979. The traffic counting procedures have been modified, starting January 1, 1982, to further disaggregate the traffic by vehicle types. Traffic in vehicle-km (Table 3.3) increased at an average arnual rate of 8.6% in the period 1968-1979; the growth has been around 6% since 1975. It is estimated that, during 1968-1979, 80% of the traffic in vehicle-km was concentrated on 30% of the national network. The corresponding 7,000 km have received priority consideration in the formulation of the Governmernt's highway policy. 3.04 In 1980, 11% of the national highway network had an average daily traffic (ADT) greater than 2,000. Some 1,820 km of unpaved roads, with an ADT greater than 400, are immediate candidates for paving. The breakdown of the national highway network, following the ADT range, is presented in the table below: National Highway Network TOTAL ADT Range 0- 501- 1,001- 2,001- > 4,000 500 1,000 2,000 4,000 4 Paved (km) 843 1,917 2,967 1,812 707 8,246 ADT Range 0- 201- 401- 700 200 400 700 Unpaved (km) 9,214 3,850 1,450 370 14,884 23, 130 C. Road Safety 3.05 Colombia has an adequate Traffic Code integrated into a Transport Ordinance of 1968, entrusting INTRA with the responsibilities of road safety management. The municipalities of Bogota and other major cities exert separate control over road safety matters within their respective jurisdictions.  - 14 - However, public authorities, in the past, have given limited attention to basic aspects of traffic management. Road design does not consistently include safety features; driver licensing and vehicle registration are mere formalities; vehicle inspection is carried out sporadically and superficially; traffic law enforcement is weak; and, finally, statistical information on vehicle fleet and traffic accidents is scattered and inconclusive. According to information available, Colombia ranks as one of the countries with the highest incidence of road traffic accidents. 1/ Public opinion, however, has been aroused by recently well publicized traffic accident statistics, and the Government has indicated its intention to take corrective action. Under the proposed project, MOPT and INTRA would initiate a coordinated program to upgrade road safety features and to strengthen traffic management (para 4.15). D. Highway Administration (i) Subsector Organization 3.06 MOPT is in charge of the construction and maintenance of the national network. Other major entities are also involved in the administration of the road network, reflecting the distribution of responsibilities among National, Departmental and Municipal levels. Twenty-three Departments are in charge of their corresponding secondary and rural roads through their Secretariats of Public Works. FNCV is in charge of the construction, upgrading, and maintenance of rural roads in cooperation with Departmental and other authorities, through its 24 Regional Directorates. Finally, other ministries and institutions are also involved in rural roads, such as the Ministry of Agriculture, the Colombian Institute for Agrarian Reform (INCORA) and the Coffee Producers' Association (FIDECAFE). The organizational arrangements for road administration are thus adequate. However, given the Government's policy of decentralization, the relations between MOPT and FNCV, on the one hand, and the Departments, on the other hand, need to be redefined (para 4.24). (ii) MOPT's Organization 3.07 Recently, organizational changes have strengthened MOPT's administra- tive capacity (Chart I). By Executive Decree dated May 14, 1980, a Technical Secretariat was created, thereby subdividing the central administration into two main units, the other being the General Secretariat. These Secretariats report directly to the Minister or to the Vice Minister in his capacity as advisor or regarding matters which have been delegated by the Minister. The General Secretariat comprises three Directorates: Bidding and Contracting; Commercial and Financial; and Industrial Relations, under which the Personnel Division operates. The Computing Activities Services, the Treasury and the Budget and Accounting System also form part of the General Secretariat. 3.08 The Technical Secretariat comprises the Directorates of National Properties, Navigation and Harbors, and Highways. The Highways Directorate is in charge of MOPT's highway road programs. Four subdirectorates operate under the Highways Directorate: Projects, Supervision, Equipment and Assessment. In addition, the Highways Directorate is responsible for MOPT's 26 Districts which carry out road maintenance (para 3.24) and supervise all MOPT contracts directly. 1/ Three fatalities per year for each thousand vehicles registered, as compared to 1.5 for Spain, 1.0 for Ireland and 0.5 for the United States and the United Kingdom.  - 15 - 3.09 Along with the creation of the Technical Secretariat, other adminis- trative changes have taken place, such as the separation of the Highway Planning Office from the Sectoral Planning Office, thereby enabling the latter to focus its activity on the overall sectoral programs and issues while the Highway Planning Office is concentrating on the highway subsector. Nevertheless, the handling and recording of data related to the technical and financial project execution should be improved by centralizing, within MOPT's Highways Directorate, selected information provided by the Districts and Central offices involved in project administration (para 4.26). Another important development has been the creation of a National Transport Council (para 1.20), which is headed by MOPT's Vice Minister and includes representatives of the transport industry and the Colombian Engineering Society. The Sectoral Planning Office acts as its Secretariat. 3.10 MOPT is also implementing further measures to strengthen some technical and administrative units (para 4.24). The administrative capacity of MOPT and its organizational framework are thus considered adequate to manage a Highway Sector Project. 3.11 MOPT's total personnel of about 13,000 employees, which includes about 11,100 staff in the Districts, is more than enough to carry out its functions and remains high because of staff seniority status and labor union support of its members. MOPT's total professional staff is about 780, divided between the Headquarters in Bogota and the Districts. Officers in the Districts are almost entirely engineers. In Bogota, some 10% of the staff are engineers and the rest are lawyers, economists, accountants and administrators. Most of the professional personnel as well as the senior staff are experienced and capable. MOPT has, over recent years, managed to keep its staffing level constant and will, under the 1982-1986 Program, pursue its policy of contain- ment of payroll expenditures (para 3.24). 3.12 MOPT's employees are public servants, and their remuneration is subject to a salary scale established by law (Decree No. 50 of 1981). The law provides for six categories of salary ranging from the lowest operative category with an average remuneration of Col$ 8,200 per month (US$150) to the highest category with salaries up to Col$ 62,000 monthly (US$1,125). In order to retain high caliber professionals in key positions, MOPT also has the authority to contract experienced engineers/planners at rates above this maximum which are more in line with those of the private sector. (iii) Accounting and Auditing 3.13 MOPT's accounting and financial functions are the responsibility of its Commercial and Financial Directorate consisting of the Budget and Accounting, Treasury, and Commercial Divisions. MOPT's accounting system operates on the basis of the Government's Manual of Accounting applicable to all Public Sector Institutions. The accounts reflect MOPT and FVN (para 3.17) activities separately and provide good control of all the expenditures for project execution. The Accounting Section prepares monthly and annual balance sheets which are submitted to the General Comptroller of the Republic. The present system of accounting meets the basic requirements for budget administration and control. It is a long way from a modern management infor- mation system. The gradual introduction of cost accounting for maintenance activities is part of the current effort to increase the efficiency of main- tenance (para 3.21).  - 16 - 3.14 The Government's annual budget, once approved by the Congress, becomes a law through which the annual appropriations are made for MOPT and FVN, either with ordinary resources or with externally contracted funds. FVN's own budget is included in the national budget as an annex. Budget execution is the responsibility of the Commercial and Financial Directorate through its Budget and Credit Section. The funds are verified by the Accounting Section, as well as by the Internal Auditing and by a delegate of the GeneraLl Comptroller of the Republic. For the execution of FVN's budget, the Minister of Finance assigns a monthly quota based on an "Agreement of Payment," and the corresponding amount is deposited in a special account. In order to meet contractual obligations, Directors of the Executing Units request from the Financial Director the allocation of corresponding funds. 3.15 The Office of the General Comptroller of the Republic, through its International Finance Auditing Division, performs an annual audit of the programs financed with external funds. The scope of the corresponding review is based upon generally accepted rules set up for financial and operative auditing, which include the review of the registers and control system as well as the evaluation of the operative procedures, as needed. During appraisal, an example of an annual audit was reviewed and found satisfactory. It includes the standard requirements plus a review of the statement of invest-- ments, as well as an evaluation of the physical progress and the fulfill- ment of contractual provisions. During negotiations, the Government confirmed that it would cause MOPT to maintain separate accounts for the project and would audit MOPT and the National Highway Fund annually and furnish the audit to the Bank within four months of the end of the fiscal year. E. Highway Planning and Financing 3.16 In the past, overly ambitious programs have been undertaken without considering the overall level of resources, and the real implementation capa- bility of the Administration and of the construction industry. This situatiLon has changed since 1978 in favor of a more comprehensive planning approach. The Government's National Integration Plan (PIN) and the National Transport Plan constitute the basic framework for the definition of objectives in the highway subsector (Chapter IV). The achievement of those objectives requires comprehensive methodologies, which can be used continuously, to identify, analyze and finally select annual programs. Under the Seventh Highway Project (Loan 1471-CO), and in the course of preparation for the proposed project, an extensive set of planning and programing methodolo- gies was introduced, such as the Pavement Management System (para 4.13), the Equipment Management System (para 4.14), a preselection methodology for pav-Lng works, and the Highway Design and Maintenance Model (HDM) (para 4.09). These tools are, after an initial testing stage, being gradually integrated into MOPT's modus operandi. 3.17 The highway subsector is financed by FVN. FVN has three major sources of revenues: (a) incomes generated by the subsector's services and facilit:Les; (b) tax revenues and budgetary allocations; and (c) credits from national and international financial institutions. Most of the annual budget (Table 3.4) is financed by the receipts of the special gasoline/diesel tax and through direct allocations from present Government revenues. During the period 1975 to 1980, Government support to the highway subsector, through the gasoline/diesel tax income,  - 17 - increased steadily from Col$ 1,654 million in 1975 to Col$ 10,754 million (US$227.5 million) in 1980, an increase of 117% in constant terms. These increases reflect the growth of consumption as well as raises in gasoline prices (para 2.17). Over the past five years, the gasoline tax has accounted for over 70% of the National Highway Fund's revenues. F. Highway Engineering and Construction Supervision 3.18 Colombian geometric design standards for new roads (Table 3.5) are well adapted to the various and often difficult Colombian conditions. The geometric design standards are divided into six classes of traffic and four types of terrain, allowing for an adequate choice of geometrical characteristics. Additional geometric design standards were also developed for the specific problems raised by road upgrading (Table 3.6). These additional standards are reasonable and aim at preserving the existing investments without jeopardizing basic capacity requirements. Only limited improvement to geometric design would be permitted for Bank-financed rehabilitation and paving works. 3.19 MOPT does not have a consistent policy for pavement design; also, construction specifications and quality standards need to be adapted to the specific conditions of various regions. The Pavement Management System (para 4.13) and the recommendations of a road materials study financed by Loan 1471-CO are the first steps toward the fulfillment of these goals. The road materials study is being carried out by MOPT in three zones covering the national road network. One study in the northern zone started in February 1981 and is proceeding well with local consultants. Two more consultant firms. have been selected to start the studies in the other two zones by February 1982. The decision to expand the role of the Central Laboratory (para 4.24) and to sponsor university research (para 4.21) would also upgrade MOPT's technological level and induce progress on highway engineering issues. During negotiations, MOPT confirmed that it would, by September 30, 1983, adopt consistent pavement design criteria and materials specifications adapted to the specific conditions of various regions. 3.20 Detailed engineering and construction supervision are usually carried out by local consulting firms. There are over 200 consultants registered with MOPT and the work is generally satisfactory. However, detailed engineering for rehabilitation works has recently been done by MOPT based on road condition inventories compiled by the Districts. The Districts assign an engineer to supervise contracts for design, construction and works supervision under the District engineer, who also has delegated authority to sign payment certificates on behalf of MOPT. MOPT's Directorate of Supervision in Bogota monitors and controls all activities of the Districts through monthly visits by engineers and administrators who are assigned geographical areas. Presently, 19 engineers and 18 administrators (lawyers, accountants, etc.) are performing these tasks. The amount of MOPT supervision and monitoring is adequate, although the manage- ment informationi system would be modernized under the proposed project to provide MOPT with a continually updated status of activities under control of the Districts. G. Highway Maintenance 3.21 In the past, Governmental authorities have considered highway main- tenance as low priority in view of the concentrated effort to complete the  - 18 - national highway network. Faced with the resultant deteriorating condition of the network, however, a more positive attitude has emerged. As a condition of the Seventh Highway Project, annual maintenance expenditures increased by about 50%, in real terms, from 1979 onward. The 1982 budget, at July 1981 prices, corresponds to about US$4,800 per km per annum for routine, periodic and emergency maintenance (excluding equipment purchases). Minor improvement and repair works make up about 10% of the maintenance budget. During the five-year (1982-1986) period, MOPT would increase annual maintenance alloca- tions, in real terms, by about 5%, which is satisfactory. Under the ongoing Seventh Highway Project, a major effort has been made by MOPT, with the assistance of consultants (Ingeroute, France), to switch from an adminis- trative to a managerial approach. Two management systems would be introduced under the proposed project: a Pavement Management System and an Equipment Management System (para 4.12). 3.22 MOPT's policy has been to handle routine maintenance, emergency maintenance and a limited amount of periodic maintenance by force account. In 1977, MOPT experimented with maintenance by contract using a road toll system by concession on about 287 km. The concession experience was dis- appointing, and this system has been abandoned. Road tolls are now collected by a separate agency under contract to MOPT. Toll revenues are used to partly finance periodic maintenance and minor improvement works. Presently, MOPT has about 200-km of such works under contract. MOPT intends to increase periodic maintenance by contract for the highly trafficked sections of the paved network and would aim at increasing the annual length resealed from about 400 km in 1982 to 600 km in 1986. This was confirmed during negotiations. 3.23 In the past, equipment purchases have been sporadic: US$21 million in 1971 and 1972, and US$22 million in 1980, mainly under Loan 1471-CO. The average age of the 34 main equipment types making up the fleet (4,200 units as of February 1981) is over 12 years, and its general condition is critical, half of the units being either obsolete or beyond repair. An equipment renewal policy has been formulated based on the following reasonable ratios: vehicles, seven years or 250,000 km; equipment, seven years or 12,000 hours; and plant, 15 years or 12,000 hours. An important acquisition program is under way, totaling about US$70 million, to replace aged and obsolete units. Tenders have recently been received for about 1,590 units to be delivered in 1982/83. It is estimated that, with these deliveries, combined with scrapping of obsolete units, MOPT's fleet in terms of number of pieces, composition and condition would be broadly adequate, with 60% almost new, to match maintenance needs. Further purchases would be undertaken on the basis of the Equipment Management System, and needs would be assessed within the policy of contracting periodic maintenance. This policy was confirmed during negotiations. 3.24 The territorial and decentralized organization of MOPT (26 Districts, 71 Seccionales, 147 Inspectorias and 336 Quadrillas of 12 laborers each, headled by one foreman) constitutes a good basis for achieving adequate maintenance. Total MOPT district staff amounts to about 11,130 persons, of whom 7,235 (65%) are directly in charge of maintenance works in the field, and 3,895 are support staff (Administration, Workshop, Stores). The number of field workers is adequate; however, the support staff ratio of about one for every two field workers is high. MOPT's personnel policy is not to increase the staff but to  - 19 - improve its professional level. MOPT should contain maintenance personnel and administration expenditures below 50% of total maintenance expenditures as was the case under the Seventh Highway Project; this was confirmed during nego- tiations. H. Training 3.25 MOPT's low and middle level personnel require additional training to enable them to employ more efficient work methods. Recently, maintenance training activities have been carried out by the Selection and Training Section (STS) of the Personnel Division with the assistance of a consultant training specialist. At the professional staff level, an upgrading program has been carried out at headquarters, on a part-time basis, by consultants (Ingeroute, France) to broaden management understanding of road maintenance. In the Districts, a UNIDO advisor carried out practical training courses for equipment operators and foremen. However, technical skills of senior personnel, as well as of road foremen, equipment operators and mechanics, need further strengthening. The training activities developed by MOPT under the Seventh Highway Project would be substantially expanded and strengthened under the proposed project. Since MOPT's Training Section lacks experience, further technical assistance would be needed to initiate a four-year training program (para 4.16). I. The Domestic Construction Industry 3.26 The domestic civil construction industry of Colombia concentrates on road construction and is, therefore, heavily dependent upon the Government's highway program. Its representative institution, the Colombian Association of Contractors (ACIC), is weak, and companies are, as a rule, poorly managed. During the past decade, road-building diminished because Government programs focused on other sectors. The capacity of the industry declined. The road rehabilitation program launched in 1978 initially ran into considerable delays because of the iLnability of the industry to handle the increased volume of work, especially because of the need to renew and modernize its equipment fleet and to recruit and train technical and management personnel. 3.27 A study of the domestic construction industry, carried out by Bank staff in 1980, concluded that the strategy for strengthening the industry should aim at: (a) reducing the industry's vulnerability to fluctuations in the demand for road construction; and (b) improving the managerial and institutional base of the industry. Specific measures to implement the above-mentioned strategy have been agreed with the Government and with industry representatives. They include training, upgrading of management and an evaluation of the need for specialized financing services. These measures are being carried out with funds from the Seventh Highway Project and with direct contributions from MOPT and the contractors. They are part of MOPT's 1982-1986 Program (para 4.20). 3.28 The contractors have increased their capacity and, over the past four years, have reequipped themselves. Colombia has sufficient contractual  - 20 - capacity to carry out MOPT's 1982-1986 Program. MOPT's register of civil contractors includes 86 local firms, each with the capacity to carry out at least US$1.5 million of works per year. In addition, 36 foreign firms are registered with MOPT. Seven recent tenders for rehabilitation works amounting to about US$55 million attracted 97 bids (five foreign). IV. MOPT's 1982-1986 PROGRAM A. General 4.01 Over the past several years, improvements have taken place in MOPT's management of the transport sector, such as the creation of a Sectoral Planning Office in 1976 and a National Transport Council in 1980 (para 3.09). In the highway subsector, the most important developments have been the growing awareness of the need to rehabilitate and maintain the existing network, the creation of a Highway Programing Office in 1980 and the initiation of a Pavement Management System in 1981 (para 4.12). 4.02 MOPT plans to improve further upon these gains. The institution has considerable maturity; recent advances in transport policy formulation and planning need to be consolidated through systematic followup and monitoring (para 4.24). MOPT's rolling five-year plan, which is the basis for the proposed sector loan, would provide the necessary discipline and continuity to achieve lasting results. It would also provide adequate flexibility to adjust annual targets in line with fiscal and economic policy. MOPT's 1982-1986 Program and related planning procedures have been under preparation since the end of 1980. The program and the accompanying institutional measures are docu- mented below and contained in a Memorandum of Understanding dated August 13, 1981 and a subsequent Aide Memoire dated January 21, 1982. 4.03 Major components of the Program (construction, rehabilitation, paving, maintenance) are defined in terms of annual volume of expenditures and physical targets. Other components (studies, road traffic safety, training, support to construction industry, research etc.) are defined as traditional project components. The proposed sector loan is based upon agreements reached with the Government on: (a) the scope and structure of an economically justified and financially feasible highway program covering the period 1982-1986 and agreement on annual updating of such program; (b) criteria and procedures and related organizational arrangements for selection, engineering and implementation of individual subprojects included in MOPT's program; (c) appropriate measures to address selected sectoral issues concern- ing sectoral planning, road transport services and highway adminis- tration; and (d) specifications and procedures for subproject selection, preparation, tendering, disbursement and monitoring. The first three elements are reviewed hereafter while the fourth element, implementation, is developed in Chapter V.  - 21 - B. MOPT's 1982-1986 Program and Financing 4.04 The Program gives priority to works already in execution, in particular ongoing rehabilitation works under the Seventh Highway Project, and embodies a balanced highway policy recognizing the relative priority of its main components in the following order: (a) maintenance; (b) rehabilitation; (c) paving; and (d) new construction. The Program (Table 4.1) is based on reasonably secured financing which is summarized below. The physical targets to be achieved are consistent with resource projections and implementation capacity. The targets will be reviewed annually (para 5.22) as part of the rolling five-year planning exercise. Summary of MOPT's Program 1982-1986 (Col$ Billion at July 1981 Prices) 1982 1983 1984 1985 1986 Total % Highways Non-recurrent 13.12 14.13 11.91 13.28 10.51 62.95 53 Recurrent 7.54 7.99 8.22 8.45 8.69 40.88 35 Subtotal 20.66 22.12 20.13 21.73 19.20 103.83 88 Other non-highways 1.68 2.28 2.66 1.38 1.27 9.27 8 Debt Service - 0.45 0.98 1.62 2.20 5.25 4 Total 22.34 24.85 23.77 24.73 22.67 118.36 100.0 Projected Price Index (108.3) (135.4) (166.5) (203.1) (243.8) Current Col$ billion 24.19 33.64 39.58 50.25 55.25 Projected exchange rate (63.94) (73.98) (84.88) (96.51) (108.54) Current US$ million 378.3 454.7 466.2 520.8 509.1 4.05 The main source of funds (Table 4.1) for MOPT investment and operating budgets is the gasoline/diesel tax, which is estimated to finance about 72% of the 1982-1986 Program. The projections of gasoline/diesel tax revenues are based on an average annual consumption increase of 3.7% and a real tax increase of 3% per year in line with price increases on petroleum products. In view of past trends, both assumptions are conservative. Since 1975, the number of vehicle-km has increased by some 6% a year and consumption by some 4.6%. The 3.7% consump- tion increase assumes that consumption increases will follow GDP growth. The gasoline price increase of 3% per year in real terms assumes that gasoline prices in Colombia will, in line with Government policy, achieve and maintain international levels. Other funding includes Government appropriations 3.4%, existing foreign credit 2.6% and MOPT's own resources of about 8% from road tolls, property assessments, transfers, etc. The proposed loan of US$152.3 mil- lion (para 5.02) would finance about 7% of MOPT's highway program; it would be applied only to non-recurrent expenditures of which it would finance 12%. Finally, other external financing, not yet confirmed, includes suppliers credit for equipment procurement and a possible loan from IDB, mainly for new construction.  - 22 - 4.06 Should MOPT, in the future, have to meet the national highway require- ments under more stringent budgetary constraints than those presently envisaged, reduction in the overall size of the Program would first be effected by reducing the new construction component through postponement or scaling down of subprojects. This was confirmed during negotiations. However, it is more likely that adjustments to the program would be made upward because of the conservative character of revenue projections. The last years of the Program do not take into account the possibility for further, yet unidentified, external financing. C. Program Components and their Preparation, Evaluation and Selection 4.07 The components of MOPT's 1982-1986 Program were reviewed and agresed during appraisal and are presented below. Preselection, evaluation and final selection of MOPT subprojects would follow the methodologies outlined in an Aide Memoire dated March 17, 1981. MOPT has demonstrated its capacity to carry out technical and economic analyses in line with the above methodologies during project preparation. About 1,400 km of rehabilitation works and 700 km of paving works have been preselected and evaluated. Contracts for 655 km of rehabilitation works (seven road sections) have already been awarded, and tenders for two batches of paving contracts - 148 km in eight sections and 553 km in 19 sections - would be invited within the next six months. (i) New Construction 4.08 New construction works have been considerably reduced in terms of their share of MOPT's expenditure; 13% instead of about 30% over the past several years. This is in line with the growing awareness of the Government of the need to consol- idate the existing network. The Program makes provision for about 500 km of new construction, i.e., less than 3% of MOPT's network, which includes urban bypasses and other safety and capacity-increasing works. New construction projects are subject to specific feasibility studies and detailed engineering before being included in MOPT's construction programs. (ii) Rehabilitation and Paving 4.09 During the Program period, rehabilitation of some 3,690 km (16% of MOPT's network) of deteriorated paved roads is planned. Average daily traffic on these roads is above 700 vehicles per day, and truck traffic is high, generally from 35% to 70%. The evaluation and selection of rehabilitation subprojects are based on a survey of the pavement and drainage conditions and terrain stability, followed by a technical diagnosis and an economic feasi- bility analysis through the use of the Highway Design and Maintenance Model (HDM), which has been developed by the Bank and installed in Bogota for use by MOPT. The completion of rehabilitation works included in the Seventh Highway Project is an important part of the rehabilitation program and will be monitored under the Highway Sector Project. 4.10 During the Program period, paving of some 2,780 km (12% of MOPT's network) of highly trafficked secondary roads is envisaged. Average daily traffic on these roads is about 350 and upward, and truck traffic is generally between 20% and 60%. The evaluation and selection of paving subprojects is based on an initial screening operation supported by a specific road inventory review of needed alignment improvements, detailed engineering and traffic analysis, and followed by a more detailed economic feasibility analysis, considering diverted or generated traffic whenever applicable, which can also be car-iel out by using the HDM.  - 23 - 4.11 The minimum economic return for subprojects to be included in the Program is established at 12%, slightly above the opportunity cost of capital in Colombia. The rehabilitation and paving subprojects already evaluated and included in the Program have had economic returns ranging from 35% and upward (Table 4.2). During negotiations, MOPT confirmed that it would continue, throughout the 1982-1986 period, to consistently use methodologies acceptable to the Bank for the evaluation and selection of all subprojects in its Program. (iii) Maintenance 4.12 A Pavement Management System and an Equipment Management System have been developed under the Seventh Highway Project (para 3.21). In developing these systems, due regard has been given to the future development of a compre- hensive highway data bank. Both systems are being tested in four Pilot Districts (Bogota, Cartagena, Palmira, and Tunja) and would be implemented effectively by all MOPT's Districts by January 1, 1984, i.e., after one year of testing in the Pilot Districts. Countrywide coordination would be under- taken by three special working groups within the Highways Directorate (para 4.24). This was confirmed during negotiations. 4.13 The main objective of the Pavement Management System is to optimize the use of funds devoted to maintaining the highway infrastructure. This would be achieved through:. (a) collection of road user and maintenance cost data for different types of roads; (b) assessment of total road users costs (maintenance and vehicle operation) fot different investment strategies and levels; and (c) determination of maintenance strategies economically most advantageous, especially the balance between ad hoc repairs, periodic resealing overlays and strengthening. The Pavement Management System outlined in Annex 2 is based on the concept that preventive maintenance of the paved network is the final target to be reached and that a strict programing with two years lead time is required. It is estimated that a ten-year period is required to reach this target, which aims at decentralization of maintenance operations through a set of standardized technical guidelines and administrative procedures. Annual maintenance programs will be based on the Pavement Management System, which provides for four different categories of maintenance ranging from emergency to preventive maintenance. The entire MOPT road network will eventually be classified and maintained according to these classes. 4.14 The 1982-1986 Program provides no expansion of MOPT's equipment fleet beyond renewal requirements. Under the Program, special attention will be given to monitoring equipment availability and utilization. The Equipment Management System is based on the principle that preventive maintenance and a timely forecast of spare parts requirements are the key factors to increasing the availability of the fleet. Detailed guidelines and procedures have been issued and are being tested in the four pilot districts. The Program will introduce improved management of the spare parts through minicomputerization in order to minimize the volume of stocks. Equipment purchases under the Program will be planned on a periodic basis in accordance with this system. (iv) Road Safety 4.15 The proposed road safety component would include the following actions which are within the present capacity of MOPT, INTRA and other organizations, given the present increased awareness toward road safety matters. The roaLd safety component (Table 4.3) would include:  - 24 - (a) Civil works for road safety including: (i) provision of adequate traffic signs, road markings and guard- rails for 5,400 km of primary roads having ADTs over 1,000; (ii) development of 2four experimental rest areas for truckers, about 10,000 m each, along the country's major highways; (iii) construction of ten vehicle diagnostic centers; and (iv) construction of one safety training facility. (b) Technical Assistance and Scholarship Programs including: (i) engineering of safety-related civil works; (ii) technical assistance for preparation and initial implemen- tation of institutional strengthening described in (c) follow- ing (about 126 man-months of local and 30 man-months of for,eign consultants, Table 4.4); and (iii) scholarship programs to train national personnel abroad (about 40 scholarships with three months duration each). (c) Coordinated measures by MOPT and other institutions including: (i) traffic safety criteria in all highway engineering under- taken by MOPT; (ii) strengthening of INTRA's capacity, particularly in relation to vehicles and driver control and statistics on road accidents; (iii) upgrading of the professional methods for traffic control and policing; (iv) creation of a National Traffic Education Committee to promote and implement traffic education campaigns and introduction of traffic education at primary and secondary school levels, and of traffic professional training in technical institutes; and (v) promotion of Traffic Safety Clubs and School Traffic Brigades. The details of this component were agreed during negotiations. (v) Training of MOPT personnel 4.16 The 1982-1986 Program would continue training activities startedl under the Seventh Highway Project and would aim at improving the skills of about 3,000 MOPT employees, based on a review of human resources and skills required, which was carried out by consultants (Table 4.5). It would include:  - 25 - (a) strengthening of MO]?T's Selection and Training Section (STS) by creating a training advisory unit and issuing a policy statement on training; (b) establishment of a Mobile Road Training Production Unit (RTPU) for the training of road foremen, equipment operators and drivers; (c) establishment of four Mechanical Training Production Units (MTPUs) for the traiining of mechanical personnel; (d) purchase of training equipment and materials; (f) organization of seminars for middle and high level mainte- nance staff; (g) training abroad of some senior staff. Two staff members of the Training Section would receive training abroad in 1982 under the Seventh Highway Project; and (h) recruitment of one training advisor and of three senior instructors. 4.17 The trainees assigned to RTPU would be trained under actual working conditions. Mechanics would be trained at the school workshops (MTPUs) in Bucaramanga, Fontibon, Medellin and Palmira, and would work on the repair of road maintenance equipment. MOPT would provide spare parts for the training of mechanics throughout the duration of the program. Two small training centers would be built at Medellin and Palmira in addition to the two existing centers in Fontibon and Bucaramanga. Seminars on different topics related to maintenance management, accounting and administration would be conducted periodically by experts for middle- and high-level staff. The program would also include short courses abroad for high-level maintenance staff and two staff members of the proposed training division. 4.18 All training activities would be coordinated by STS. MOPT'S counter- parts are expected to take over after the departure of technical assistance personnel. Outline terms of refererLce for technical assistance services for training are given in Annex 3. MOPT would: (a) adopt, by December 31, 1982, a Plan of Action satisfactory to the Bank to carry out all elements of the training component and provide annual funds for its implementation; (b) arrange for the recruitment of Colombian instructors as needed at the beginning of technical assistance services; and (c) make available adequate numbers of personnel to be trained as instructors and release personnel to undertake agreed training courses. Cost estimates for the training component are given in Table 4.6. The details of the training component were agreed during negotiations. 4.19 Study of Trucking Regulation and Services. This study would be carried out in two phases of six months each. Phase one of the study would review Government policies and the regulatory framework for road and intermodal freight transport, assess their implications on transport efficiency, and recommend consolidation of services and facilities. It would also assess  - 26 - the adequacy of road user charges applied to road freight transport and recommend adjustments in line with the established policy of adequate pricirLg (para 2.18). Phase two would develop specific implementation plans for revising the regulations and carry out detailed feasibility studies for developing intermodal services. An outline of terms of reference is given in Annex 4; the study would be contracted by MOPT to experienced consultants, possibly E. joint venture of a Colombian and foreign firms no later than September 1, 1982, and the study would be concluded by September 1, 1983. This was agreed during negotiations. 4.20 Support for the Construction Industry. The Program would also provide continued support to the efforts, initiated under the Seventh Highway Project, to upgrade the capacity of the construction industry. These efforts are being sponsored by MOPT, which has formed a Steering Committee, with participation of the institutions representing the contractors, to organize and supervise its various components and to coordinate with the consultants appointed for the purpose. As mentioned in paragraph 3.27, three action plans outlined below were agreed with the Government and with industry representatives; two dealing with Professional Management Training and with Financing of the Industry are being initiated under the Seventh Highway Project, and the third, which is now being reviewed by the Government, would be supported by the proposed Loan. (a) Training-in Professional Management. This component is aimed at owners and general managers of construction companies. The objective is to train 200 people by March 1983. Foreign exchange costs would be financed under the Seventh Highway Project; local costs would be recovered by charging attendance fees. The method and amount of the charges are being studied by the Steering Committee. (b) Financing the Industry. MOPT will commission and complete, by August 31, 1983, a feasibility study, also financed with funds from the Seventh Highway Project, for the development, through existing private financial institutions, of specialized financial services tailored to the needs of the industry. (c) Technical Training for the Industry. This training would be combined with MOPT training and would aim at two levels of company personnei: (I) senior field and office personnel, who would receive training in specific areas, including estimating, project management and cost control; and (II) field personnel, particularly mechanics and equipment operators. The level (I) training would be organized ard funded internally by the industry's institutions; for level (II), MOPT would initially train private industry operators in the Ministry's own training facilities. This is an interim measure, pending the discussion and establishment, by July 1, 1983, of permanent training arrangements for the construction industry. The proposed Highway Sector Project includes a US$300,000 component to support the technical training programs by financing the services of specialized experts to lecture and provide on-the-job training in major centers throughout the country. During negotiations, the Government confirmed its continuing support to the above actions initiated under the Seventh Highway Project to strengthen the domestic construction industry.  - 27 - 4.21 Upgrading of Road Construction Technology and Highway Administration. MOPT would contract with universities to study the feasibility of introducing alternative pavement construction materials, including asphalt emulsion tech- nology in maintenance and paving activities, and to provide post-graduate courses to update MOPT officials, particularly in evaluation techniques, devel- oping departmental road plans, and creating a highway data bank. During nego- tiations, it was agreed that MOPT would define, by July 1, 1983, the details of its program of research, studies and seminars to be carried out over the period 1983-1986 in road construction technology and highway administration. 4.22 National Transport Plan. A major task to be undertaken by MOPT under the project is the updating of the National Transport Plan (para 1.22), which will deal particularly with port development policies, containerization and development of intermodal services, deregulation of the trucking industry, analysis of freight transport, and decentralization of the highway sector. This work will be closely monitored and coordinated with worlk on the Bank's Transport Sector Memorandum scheduled for FY83 and FY84. D. Institutional Measures 4.23 In order to start implementing its policy of decentralization, the Government would, by March 1, 1982, establish a task force coordinated by MOPT and with representatives from MOPT, DNP, and FNCV. The task force would, by October 31, 1983, prepare recommendations to be initiated in 1984 concerning the distribution of various responsibi:Lities for the entire road network among national, departmental and municipal authorities. The task force would, specifically, review financing arrangements and the coordination of equipment and workshops. This was confirmed during negotiations. 4.24 MOPT is undertaking the following measures to improve subsector management and to strengthen MOPT's planning and implementation capacity: (a) MOPT has established a Highway Evaluation Unit comprising five professionals within the Highway Programing Office. The Unit would be in charge of the progressive use of the HDM model or similar in the evaluation of subprojects. (b) MOPT will, over the project period, increase the capacity of the Central Laboratory of the Engineering Materials Division, both in terms of the infrastructure and of the equipment and human resources required, to involve it as a matter of routine in the control of quality of the materials used in works carried out by contractors or by force account. (c) MOPT has established a support group consisting of at least four qualified engineers ("Grupo de Apoyo de Mantenimiento") within the Division of Engineering Materials. The group's tasks would be to: (i) assist the Districts to implement the Pavement Management System (para 4.12); (ii) develop technical standards for maintenance; and (iii) achieve consistency between the specifications for construction and the maintenance standards. Similarly, MOPT has established a "Grupo de Apoyo de Maquinaria y Equipo" comprising at least three engineers and two technicians to assist in implementing the Equipment Management System (para 4.14), and a group of six professionals to program the acquisition and distribution of spare parts.  - 28 - (d) MOPT has formalized the coordination of internationally financed projects in a separate office under the Minister. Technical coordi- nation of civil works by a contracted engineer presently carried out under the Seventh Highway Project would be continued by this office. The preparation of progress reports and the organization of semi-annual reviews (para 5.22) would be a specific responsibility of this office. The above measures were confirmed during negotiations. E. Assessment of M4OPT's Program and Impact on Sector Policies 4.25 The main objective of MOPT over the period 1982-1986 is to pursue and step up the ongoing efforts to (a) improve road maintenance efficiency, (b) complete the rehabilitation program, (c) upgrade planning and programing of pavement strengthening and resealing, and (d) increase the paving of highly trafficked secondary roads. MOPT's 1982-1986 Program presents a proper balance among its components, focusing on maintenance, rehabilitation and paving. The assumptions on which the financial plan is based are reasonable and consistent with established policies and with current projections concerning the evolution of the overall economic situation. The Program is feasible given the projected resources available and the expected increasing capacity of the construction industry. Toward the latter years of the program, additional foreign credits would be justified. 4.26 MOPT's 1982-1986 Program also develops and supports specific policies to: (a) consolidate recent advances in highway planning and engineering; (b) improve MOPT's management data system and computerization of technical and financial records; (c) improve road traffic safety; (d) increase the efficiency of the domestic construction industry; and (e) assist the decentralization effort through an administrative and financial reclassification of the network and the develop- ment of Departmental Highway plans. 4.27 Within the transport sector, the Program includes studies and subsequent consultations on measures to: (a) update road transport regulation, assess road user charges, set the basis for adequate pricing of transport services and finally stimulate the development of intermodal services (study completed by 1983); (b) carry out regular updating of the National Transport Plan and review progress made in achieving sectoral objectives by December 1983; and  - 29 - (c) improve coordination among the different agencies in the transport sectcr through the Sectoral Planning Office. 4.28 The impact of the Program, and hence of the proposed sector loan, on the modus operandi of MOPT and on the management of the sector would be substan- tial. It would commit MOPT to the three priorities of maintenance, rehabilita- tion and paving and to the development of improved policies on road administra- tion and trucking regulations. Progress in the subsector has not been continuous. Periods of advances have been followed by regression (as in the mid-1970s). The formulation of policies and the development of the necessary consensus would occupy the initial period of the project, say up to 1983. Implementation of the decentralization policy would likely stretch over as long as ten years in view of the complex institutional changes involved and the disparities between regions. Changes in the regulatory framework for the trucking industry and in related user charges would also need up to mid-1980s to take hold. V. BANK PARTICIPATION A. General 5.01 The National Highway Fund (FVN) (para 3.17), created by Legislative Decree No. 64 of 1967, would be the Borrower. FVN is an autonomous legal entity, able to contract financial obligations. FVN has, as its legal repre- sentative, the Minister of Public Works and Transportation and shares the staff and structure of MOPT. Throughout this report, references made to MOPT as entity in charge of project execution should be deemed to be made to FVN in its legal capacity to execute the policies and programs of MOPT, including the project. 5.02 The proposed Highway Sector Project is directed at maintaining the Bank's presence in the subsector to support the implementation of programs and plans developed under the Seventh Highway Project. The loan would finance components of MOPT's 1982-1986 Program. The specific subprojects to be financed under the loan would be defined on the basis of agreed criteria and methods as the Program unfolds. The portfolio of subprojects to be started in 1982 is adequate to ensure prompt initiation of disbursement. 5.03 The major categories of expenditures, i.e., paving, rehabilitation, and equipment, to be financed by the Loan would be defined annually on the basis of agreed criteria and procedures for subproject selection and prepara- tion. The other components, including studies and technical assistance in support of selected sectoral objectives, have been fully defined. The sector format, by which virtually any subproject within MOPT's Program is a potential candidate for financing, would overcome the problems encountered in earlier projects because of lack of flexibility, i.e., drawn-out implementation period, slow disbursement and large inflationary overruns. The projected distribution of the proposed loan of US$1,523 million is shown in Table 5.1.  - 30 - 5.04 Two concepts to be considered in the administration of the loan are the individual subprojects and the contract(s) associated with each subproject. The subproject is the unit considered for purposes of project selection, preparation and evaluation, while contracts associated with the subprojects are the basis for disbursements. Under the timeslice concept, Bank financing would be available for the following: (a) expenditures incurred after Loan Signature for rehabilitation and paving works related to eligible subprojects contracted since September 1, 1981; (b) civil works related to eligible subprojects tendered after Loan Signature, which would have an initial completion date prior to December 31, 1986; (c) purchase of support equipment for maintenance, laboratory equipment, and equipment related to the Safety and Training components contracted after Loan Signature; (d) studies and technical assistance contracted after Loan Signature. 5.05 Full disbursement is expected by December 31, 1986. Early disbursement would be made poss-ible by the fact that a substantial volume of eligible sub- projects would be tendered or contracted during the first half of 1982 (para 5.23). In line with the timeslice concept, it is expected that MOPT would continue to request the Bank to review the eligibility of subprojects and the acceptabiLlity of related contracts beyond what would be necessary to achieve full disburse- ment of the Loan, with the implication that the Bank would finance only the early phase of some contracts. MOPT would undertake to complete the contracted works still under construction in accordance with a schedule defined for each subproject. During negotiations, the Government confirmed that it would carry out all subprojects in accordance with the execution schedule established for each one. B. Conditions and Procedures for Eligibility of Subprojects 5.06 In order to be declared eligible, rehabilitation, paving and construc- tion subprojects would have to be: (a) technically sound; and (b) economically justified (para 4.11). 5.07 Civil works related to the safety and to the training components of the Loan would have to be: (a) technically sound; and (b) consistent with the objectives of these coaponents. 5.08 The purchase of equipment would be limited to: (a) support equipment, tools and machinery to increase the availability and utilization of the highway maintenance fleet; (b) laboratory equipment to improve the capability of the Central Laboratory;  - 31 - (c) equipment for the safety component of the project; and (d) equipment for the traLining component of the project. 5.09 Studies and technical assistance would have to be in direct support of the sectoral objectives (para 4.25). 5.10 The procedure to declare a subproject eligible would be as follows: (a) for -rehabilitation and paving subprojects, MOPT would prepare, for each subproject, a Basic Data Sheet summarizing key data concern- ing engineering, design standards, economic evaluation, cost estimates, and schedule for detailed enginering, tendering and construction, including division into lots. Two sample subprojects proposed for financing are presented in Annex 5; (b) for each construction subproject, MOPT would prepare a fully documented feasibility study; (c) for civil works for safety and training, MOPT would prepare and submit the description of works, their estimated value and the schedule of implementation; (d) for purchase of equipment for highway maintenance, laboratory, safety and training, MOPT would prepare and submit the list, type, and estimated value of the equipment and the scheduled repartition of lots and the justification in relation to the requirements, such as for the Maintenance and Equipment Management systems; and (e) for studies and technical assistance, MOPT would prepare detailed terms of reference, manpower budget, cost estimate and schedule of implementation. 5.11 The Bank would review the specified documentation, request additional information as required, and assess eligibility. Rejected subprojects may be re-submitted for future consideration in light of additional information, or if the subproject scope or standards are amended. Once a subproject has been declared eligible, MOPT would complete the detailed engineering. MOPT would submit an Updated Basic Data Sheet once the detailed engineering has been completed to confirm eligibility. Agreement on the above procedures related to eligibility was confirmed during negotiations. C. Conditions and Procedures for Procurement and Bank Financing of Contracts 5.12 Civil works for rehabilitation, paving, construction, safety, and purchase of equipment eligible for financing under the Loan would be procured through international competitive bidding in accordance with the Bank's guidelines for procurement (July 1980). Civil works for safety and training (estimated at less than US$0.2 million) would be procured under local competitive bidding procedures which are satisfactory.  - 32 - 5.13 Civil works contractors would be subject to prequalification. Prequalification of Colombian contractors is based on MOPT's permanent register of contractors, which is updated biannually; this system was applied satis- factorily in the Seventh Highway Project and would be continued. For foreign contractors, invitations to prequalify have been sent and would be sent to Embassies and published in the "Development Forum." In addition, notices for specific tenders have been and would be advertised locally and sent to Embassies. The Bank would be kept informed concerning the list of prequalified foreign contractors, those refused prequalification, if any, and the reasons therefor. 5.14 Once the detailed engineering for an eligible subproject has been satisfactorily completed, MOPT would proceed with the procurement process. Colombian procedures for procurement consist of the following seven steps: Step 1 - Prepare tender documents; Step 2 - Establish official cost estimate; Step 3 - Advertise, tender, and open bids; Step 4 - Evaluate proposals and prepare award recommendation; Step 5 - Award contracts; Step 6 - Sign contracts; and Step 7 - Legalize contracts. The procedures leading to acceptance, by the Bank, of civil works contracts for financing would be as follows: Procedure A: Proposed civil works contracts with a nominal value of US$3 million equivalent or more would be subject to prior Bank approval. After completion of Step 4, MOPT would send to the Bank the tender documents, the documentation relating to Step 3, and the evaluation of tenders and the award recommendation (Step 4). After obtaining the agreement of the Bank, MOPT would proceed with Steps 5, 6 and 7 and send to the Bank two copies of the legalized contract. Procedure B: Prior Bank review would not be required for civil works contracts with a nominal value of less than US$3 million equivalent. After completion of the entire process, MOPT would send to the Bank two copies of the legalized contract (Step 7) and the documentation relating to Steps 3, 4 and 5. MOPT would have the option of seeking prior Bank approval under procedure A for these contracts. 5.15 The Bank would review the documentation submitted according to procedures A or B, and, if satisfied, would indicate no objection. The above procedures were reviewed and confirmed during negotiations. 5.16 The procurement program for equipment and parts, indicating lot size, estimated cost and proposed exception to ICB, would be subject to prior approval by the Bank. Similar items would be grouped to the extent possible for bidding purposes. Contracts for equipment, vehicles, parts and tools with an estimated cost below US$50,000 and within an overall ceiling of US$500,000 would be procured from suppliers under contracts awarded in accordance with local procurement procedures, which are satisfactory. Purchases of spare parts for existing equipment and for proprietary equipment may be procured directly from established dealers. Procedures for procure- ment of equipment were reviewed and confirmed during negotiations.  - 33 - 5.17 Consultant services for technical assistance and studies would be contracted in accordance with the relevant Bank guidelines dated September 1981. Shortlists of qualified firms would be submitted for the prior approval of the Bank. Subsequently, the evaluation of proposal and the recommendation for selection of a firm as well as the related draft contract would also be submitted for prior review and approval by the Bank. Concerning local consultant services for supervision of civil works, the Bank would review ex-ante the standard terms of reference and form of contract. MOPT would then proceed with selection and contracting following local procedures, which are satisfactory, and would send to the Bank copies of signed contracts for all subprojects financed under the Loan. These arrangements were confirmed at the time of negotiations. 5.18 The Bank would have the right to request further information related to the tendering, award, and signature of any contract related to an eligible subproject. Should the Bank determine that a contract related to the imple- mentation of a subproject which has been declared eligible was awarded in a manner not in conformity with the procedures defined above, it would have the right to reject this contract and to cancel the corresponding amount from the Loan. D. Disbursement 5.19 Disbursement would be made against full documentation on the following basis: (a) 50% of total expenditures for civil works and related supervision services; (b) 100% of foreign expenditures for imported equipment or 90% of local expenditures for locally procured equipment, tools or machinery; (c) 100% of foreign expenditures for technical assistance or consulting services carried out by foreign consultant firms or individuals; and (d) 50% of total expenditures for technical assistance or con- sultirng services carried out by local consultant firm, Colombian individual, or Colombian university. During negotiations, it was agreed that no withdrawals of the proceeds of the Loan would be made with respect to civil works for expenditures which exceed more than 50% of the estimated detailed engineering cost on which the con- firmation of the eligibility was based (para 5.11). 5.20 The foreign exchange component of the civil works has been estimated at 50% on the basis of an analysis prepared by MOPT. The analysis has been reviewed by the Bank and is acceptable. In the 1976 appraisal report for the Seventh Highway Project, the foreign exchange component was also estimated to be 50%, and the 1981 appraisal report for the Rural Road Project estimated the foreign exchange component to be 45% for the construction of gravel roads, i.e., without asphalt, of which Colombia is a net importer.  - 34 - 5.21 Studies and technical assistance financed under the loan would not deal with usual feasibility and engineering matters but with problems of planning, transport coordination, methods, research, safety, and training. As such, they would require the participation of foreign experts or foreign consulting firms (estimated US$10,000 equivalent on average per man-month). While it is the Government's policy to encourage the use of local consultants, some specialized foreign consultants would be needed because the required expertise is not found in Colombia. It is estimated that about 30% of the studies and supervision would be carried out by foreign consultants and 70% by Colombian firms. The foreign exchange costs of such studies carried out by Colombian firms would vary, depending upon whether or not local consulting firms would be associated or subcontracting with foreign firms; there is likely to be a wide range in the foreign exchange component of such studies, estimated to be between 20% and 80%. The proposed disbursement percentage of 50% would, on the average, broadly reflect the foreign exchange component of such studies. 5.22 Standard disbursement profiles indicate that, in the LAC Region and in Colombia, a 7.5-year period has been required to obtain full disbursement on highway loans. None of these were sector loans. The experience with the only similar project which has been under execution for several years, i.e., the Mexico Highway Sector Project (Loan 1671-ME, US$120 million, August 1979) indicates that, once the portfolio of eligible subprojects has built up, disbursements accelerate. (The pattern of the Mexico project is shown for comparison in Table 5.2.) The pattern projected for the proposed Sector Loan assumes full disbursement in four years, reflecting the following specific factors: (a) contracts for seven eligible subprojects were awarded before the end of 1981 (amounting to about US$55 million), upon which disbursement: would start immediately after effectiveness of the loan for expendi- tures incurred after signing of the loan (para 5.23); and (b) the potential disbursement basis (foreign exchange component) of construction, rehabilitation and paving expenditures over the period mid-1982 to end-1985 totals over US$200 million, which is well above the US$131 million available for civil works under the loan. Contractual payments can, therefore, reasonably be expected.by the end of 1985. Estimates of disbursements are given in the following tabulation and in Table 5.2.  - 35 - ----------(US$ million; calendar year)--------- Disbursement for: 1982 1983 1984 1985 1986 Total 1. Civil Works Construction, Rehabilitation, and paving 7.5 28.8 41.0 43.7 10.0 131.0 Safety -- 1.0 2.0 1.8 -- 4.8 Training -- 0.2 -- -- -- 0.2 2. Equipment Maintenance and Laboratory -- 4.0 1.0 -- -- 5.0 Safety -- 1.0 1.0 -- -- 2.0 Training -- 1.0 -- -- -- 1.0 3. Studies, Technical Assistance 0.5 2.0 2.0 1.0 0.5 6.0 4. Front-end Fee 2.3 -- -- __ __ 2.3 TOTAL DISBIJRSEMENT 10.3 38.0 47.0 46.5 10.5 152.3 5.23 The above progression of disbursement is based on a portfolio of eligible subprojects which has reached a total value of US$113 million and a volume of accepted contracts related to these subprojects totaling US$55 million. The tender program (Table 5.3), the progress of the works and the rate of disbursement (Table 5.4), and the status of subproject preparation (Table 5.5) would be reviewed during the semi-annual consultations (para 5.24). This was agreed during negotiations. E. Semi-Annual Consultation and Monitoring 5.24 With regard to monitoring of the loan, the Government confirmed at negotiations that it would prepare quarterly reports for the Bank providing: the listing of eligible subprojects; the listing of contracts related to eligible subprojects; the progress of execution of Bank-financed subprojects; the status of disbursement requests; the schedule of estimated withdrawals of the proceeds of the Loan and the Project's physical targets (Table 5.6). Furthermore, in order to monitor the progress of MOPT's Five-Year Program and related policy objectives, the Government confirmed that it would hold semi-annual meetings in March and September of each year of the Project. The Government would prepare reports on the following in accordance with the indicated schedule and any other reports as the Bank may reasonably request from time to time: (a) By March 15 of each year, MOPT would report on: - level of completion during previous year of subprojects in MOPT's Program;  - 36 - - breakdown of recurrent budget expenditures for previous year; - summary of financial status of the Fondo Vial at end of previous year; - report on maintenance operations during previous year; - composition and status of portfolio of subprojects with financing under the loan including the various steps of preparation or implementation; - implementation of institutional strengthening measures in MOPT; and - enforcement of vehicle weight regulations. (b) By September 15 of each year, MOPT would report on: - proposed update of four-year investment program; - proposed recurrent budget for upcoming year; - financial forecast for FVN for upcoming year; - progress of road safety program; and - status of selection and execution of Bank-financed subprojects. F. Bank Review of Subprojects 5.25 The requirements for Bank review would be similar to those adopted for ongoing similar projects. As mentioned in paragraph 5.04, two distinct steps are recognized: first, the Bank declares a specific element of MOPT's Program (a subproject) as eligible for financing under the loan; second, specific contract(s) related to the execution of eligible subprojects are accepted and become part of the disbursement basis. The focal point of Bank super- vision would be to review eligibility for which ex-ante approval would be required for all subprojects. The documentation necessary to establish eligibility for civil works and equipment (paras 5.06 to 5.11) is generated by MOPT's own planning and programing systems. Bank reviews, normally carried out at the time of biannual consultations, would be a key instru- ment in monitoring the performance of these systems. 5.26 For civil work subprojects at the stage of engineering, ex-ante review would be requested only for construction subprojects which would account for a small portion of the civil work component. Engineering for rehabilita- tion and paving subprojects would be reviewed ex-post on a sample basis: 20% in terms of length for rehabilitation subprojects and 30% for paving subprojects. For civil works related to the safety and training components, a sample of final engineering covering at least 20% of the total values of such work would be reviewed ex-post. As mentioned in paragraph 5.14, award decisions would be reviewed ex-ante for civil works contracts in excess of US$3 million equivalent and ex-post for contracts of lesser amount; US$3 million equivalent is the limit presently used under the Seventh Highway Project.  - 37 - 5.27 Concerning equipment purchases, both specifications and award decision would 'be reviewed ex-ante whenever ICB is required (contracts with an estimated cost of US$50,000 or more). Equipment contracts tendered through local procedures would be reviewed ex-post. MOPT has a standard set of tender documents and specifications developed for the Seventh Highway Project. 5.28 Selection of consultants for technical assistance and studies and related contract would be reviewed ex-ante. The Bank would review ex-post a sample of 20%, in terms of length of road involved, of contracts for supervision of civil works financed under the loan. 5.29 MOPT would keep records of all tenders, contractual documents and official decisions pertaining to each eligible subproject, showing total expenditures to date, monthly payments and administrative data. At the end of the implementation of the project, MOPT would prepare a Project Completion Report. The Bank would reserve the right to inspect and review the documentation maintained by MOPT and the right to receive specific portions of the detailed records. This arrangement was confirmed during negotiations. G. Economic Justification 5.30 The components of MOPT's Program that lend themselves to straight- forward economic analysis, i.e., new construction, rehabilitation and paving, make up 48% of the Program. The cost estimates are based on detailed engineer- ing and the benefits, depending on the specific subproject being analyzed, consist of savings in vehicle operating costs, maintenance cost savings, and diverted or generated traffic benefits whenever applicable. Time savings are not included in the base case but would be calculated as optional information. The vehicle operating cost savings are based on the terrain in which a particular subproject is located and on the vehicle composition and traffic growth as estab- lished by a countrywide system of traffic counting stations supplemented by specific traffic counts if required. MOPT maintains periodically updated vehicle operating cost tables and will, with the introduction of HDM, be able to further refine the analysis. The minimum economic return for subprojects to be included in the Program is established at 12%, slightly above the opportunity cost of capital in Colombia (para 4.11). The broad geographic distribution of subprojects ensures that the benefits of road improvements would be widely distributed. The roads already evaluated and included in the 1982 program (Table 4.2) havet had a weighted average economic return of 75%. 5.31 The maintenance component constitutes 31% of the program and ensures that the roads will continue to have the standards for which they were evaluated; the road maintenance costs have been included in the economic evaluation of subprojects. Experience from similar programs in Latin America suggests that coordinated measures to increase the efficiency of maintenance operations have a high return. 5.32 The economic assessment of the other components which make up MOPT's program and which account for 2.5%, i.e. road safety, training and special components, is more complex and, by necessity, of a qualitative rather than a quantitative nature.  - 38 - 5.33 The road safety component draws on experiences from other countries and is expected to achieve, as its principal benefit, a reduction in traffic accidents and fatalities. 5.34 The training component is expected to yield a higher efficiency in MOPT's operation, but a quantitative measurement of this improvement is not possible. Instead, this component has been tailored along the lines of proven results in other countries. 5.35 The special components include some items that are well defined and straightforward, such as the study of trucking regulation and modal alternatives and the support for the construction industry but also some items that are developed only at the conceptual stage and would be further defined under the project. The benefits expected from the first two items are improved service levels and competitive environment in the transport sector and improved performance of the construction industry respectively. The other items are all aimed at achieving either an increased understanding of the transport sector or an improved operation of the same. The benefit of having certain funds available on a flexible basis to support relevant new developments in the transport sector cannot be overestimated. Under the Seventh Highway Project, for instance, the Bank has been able, on a limitedL scale, to support studies of the access to the new airport in Medellin and a training program for the construction industry, both of which were not known at the time of appraisal of that project. H. Assessment of Risk 5.36 MOPT's budget estimates for its 1982-1986 Program have been carefully reviewed and are reasonable considering, on the one hand, the financial resources available for the subsector and, on the other hand, the absorptive capacity of MOPT and of the construction industry. The amount of the loan has been set prudently below the potential disbursement basis. There is no serious risk that MOPT's Program would not provide sufficient basis to commit and disburse the loan as scheduled. The wide range of subprojects and the flexibility afforded in the commitment of loan funds should prevent a situation wherein the loan would be tied to a relatively small number of large subprojects stretching over an extended completion period. 5.37 One uncertainty is the extent to which the Bank would be able to influence sector policies. The Bank's strategy has been to help develop, through the financing of MOPT, a Government institution with the in-house capability and sectorwide perspective needed to direct transport policy. While the first phase has been largely achieved by the preparation of the project and the development of methodological tools (para 3.16), the next phase of policy design and implementation, with a new MOPT top management team in late 1982, would require an intensive open and constructive dialogue. The project is designed to maintain the Bank's involvement and to ensure policy and institution-building continuity through consultation, financing of technical assistance and emphasizing the need for MOPT to switch from an administrative to a managerial approach to its tasks.  - 39 - VI. AGREEMENTS REACHED AND RECOMMENDATION 6.01 During negotiations, agreement was reached with the Government on the following: (a) the Government to review progress made in achieving sectoral objectives and to update the National Transport Plan by December 31, 1983 (in draft form by September 30, 1983) (para 1.22); (b) MOPT to take, from time to time, all action necessary to adjust specific and related road user charges, to cover the cost of use of the road infrastructure (para 2.19); (c) the Government to cause MOPT to maintain separate accounts for the project, and to audit MOPT and the National Highway Fund annually and furnish the audit to the Bank within four months of the end of the fiscal year (para 3.15); (d) MOPT to adopt, by September 30, 1983, consistent pavement design criteria and materials specifications adapted to the specific conditions of various regions (para 3.19); (e) MOPT to confirm its policy of increased reliance on contractors for maintenance activities, increasing the annual length resealed from about 400 km in 1982 to 600 km in 1986 (para 3.22); (f) MOPT to procure future maintenance equipment in accordance with the Equipment Management System, taking into account maintenance by contractors (para 3.23); (g) MOPT to keep maintenance personnel and administration expendi- tures below 50% of total maintenance expenditures (para 3.24); (h) MOPT to follow a policy such that, in case of budgetary constraints, new construction works would be reduced or delayed correspondingly (paras 4.04 and 4.06); (i) MOPT to continue, throughout the 1982-1986 period, to consistently use methodologies acceptable to the Bank for the evaluation and selection of future subprojects (para 4.11); (j) MOPT to implement in all Districts, by January 1, 1984, the Pave- ment and Equipment Management Systems developed under the ongoing Seventh Highway Project (Loan 1471-CO) (para 4.12); -(k) MOPT to confirm details of the road safety component (para 4.15); (1) MOPT to carry out all elements of the training component (para 4.18); (m) MOPT to contract, by September 1, 1982, with experienced consultants, a study to examine, by September 1, 1983, the regulation of the road transport industry and the potential for intermodal coordination (para 4.19);  - 40 - (n) MOPT to continue its support to the actions initiated under the Seventh Highway Project (Loan 1471-CO) to strengthen the domestic construction industry (para 4.20); (o) MOPT to define, by July 1, 1983, the details of its program of research, studies and seminars to be carried out over the period 1983-1986 in road construction technology and highway administrat:Lon (para 4.21); (p) the Government to establish, by March 1, 1983, a task force which would recommend, by October 31, 1983, a plan for the distribution of various responsibilities for the entire road network among national, departmental and municipal administrative levels (para 4.23); (q) the Government to take, or have taken, steps to further improve the overall sector management and MOPT's planning and implementat:Lon capacity (para 4.24); (r) MOPT to carry out all subprojects in accordance with the execution schedule established for each one (para 5.05); (s) MOPT to follow the procedures for subproject eligibility (para 5.11); (t) MOPT to follow the procedures related to procurement and Bank financing (paras 5.15 and 5.16); (u) MOPT to follow the procedures related to contracting consultant services (para 5.17); (v) no disbursements for civil works to be made when total cost exceeds the detailed engineering cost by more than 50% (para 5.19); (w) MOPT to monitor the progress of the proposed Sector Project and (i) issue quarterly reports and (ii) hold semi-annual meetings with the Bank (paras 5.24 and 5.25); and (x) MOPT to agree that the Bank would reserve the right to inspect and review all the documentation pertaining to each eligible subproject and the right to receive specific portions of the detailed records (para 5.29). 6.02 Subject to the above, the project provides a suitable basis for a Bank loan of US$152.3 million. The terms would be 17 years, including a four-year grace period. March 10, 1982  COLOMBIA HIGHWAY SECTOR PROJECT National and International Freight and Passenger Transport (1970-1980) International Freight National Freight Transport Transport National Passenger Transport International Ton/km (millions) Ton (thousands) Pass/km (millions) Passenger Coastal 1/ Transport Year Road Rail River Shipping Air Subtotal Sea- Air Subtotal Road Rail River Air Subtotal Pass (thousand) 1970 10,285 1,173 1,545 786 85 13,874 2,599 20 2,619 7,637 249 1 2,067 9,954 467 1971 10,879 1,150 1,319 843 79 14,270 2,709 25 2,734 8,055 281 7 1,953 10,296 524 1972 11,726 1,198 1,451 2,116 121 16,612 2,652 28 2,680 8,114 398 4 2,273 10,789 596 1973 12,559 1,331 2,003 2,482 124 18,499 3,068 31 3,099 9,223 427 4 2,539 12,193 685 1974 13,316 1,329 2,585 3,240 152 20,622 3,227 46 3,273 9,735 482 4 2,702 12,923 815 1975 13,824 1,139 2,400 2,398 144 19,905 2,864 48 2,912 10,179 523 4 2,870 13,576 891 1976 14,461 1,159 1,609 2,535 136 19,900 2,696 51 2,747 10,199 511 5 3,181 13,896 966 1977 15,158 1,215 1,820 2,650 185 21,028 3,500 71 3,571 10,709 392 4 3,649 14,754 1,041 1978 16,507 1,232 1,402 2,195 267 21,603 3,808 93 3,900 11,244 342 4 4,048 15,638 1,140 1979 17,332 1,105 1,166 1,584 268 21,455 4,689 89 4,778 11,807 322 4 4,488 16,621 1,265 1980 18,025 882 1,287 2,0454/ 276k/ 22,515 4,934 94 5,028 12,412-/ 315 4 4,357- 17,088 1,261 1/ Excludes freight handled in private ports. 2/ Estimate. Source: MOPT January 1982  COLOMBIA HIGHWAY SECTOR PROJECT Public Sector Investments in Transport (1972-1980) (millions of current Col$) 1/ Inland Year Roads- (% Rail ( Water (%) Airports M Seaports (7) Total (%) 1972 2,576.7 (81.7) 289.4 ( 9.1) 65.6 (2.1) 172.5 ( 5.5) 50.9 (1.6) 3,155.1 (100) 1973 2,746.8 (81.1) 299.2 ( 8.8) 78.7 (2.3) 211.0 ( 6.2) 49.5 (1.5) 3,385.2 (100) 1974 3,363.2 (73.6) 343.8 ( 7.5) 123.9 (2.7) 660.1 (14.5) 77.0 (1.7) 4,568.0 (100) 1975 3,335.7 (68.9) 540.5 (11.2) 162.7 (3.4) 651.9 (13.5) 153.8 (3.2) 4,844.6 (100) 1976 4,752.2 (80.1) 465.2 ( 7.8) 277.4 (4.7) 169.1 ( 2.8) 271.8 (4.6) 5,935.7 (100) 1977 6,016.3 (83.2) 382.3 ( 5.3) 231.4 (3.2) 433.6 ( 8.0) 169.7 (2.3) 7,233.3 (100) 1978 6,439.7 (83.1) 271.7 ( 3.5) 216.8 (2.8) 506.0 ( 6.5) 315.1 (4.1) 7,749.3 (100) 1979 9,482.4 (78.2) 79.9 ( 0.6) 420.0 (3.5) 1,531.3 (12.6) 619.7 (5.1) 12,133.3 (100) 1980 16,460.1 (85.8) 467.7 ( 2.4) 747.7 (3.9) 1,039.8 ( 5.4) 480.0 (2.5) 19,195.3 (100) 1/ Includes national highways, departmental and rural roads. Source: MOPT > August 1981  - 43 - TABLE 1.3 COLOMBIA HIGHWAY SECTOR PROJECT World Bank Group Involvement in Colombian Transport Highways Loan 43-CO 1951 US$ 16.50 First Highway Project Loan 84-CO 1953 US$ 14.35 Second Highway Project Loan 144-CO 1956 US$ 16.50 Third Highway Project Credit 05-CO) 1961 US$ 19.50) Fourth Highway Project Loan 295-CO) US$ 19.50) Loan 550-CO 1968 US$ 17.20 Fifth Highway Project Loan 680-CO 1970 US$ 32.00 Sixth Highway Project Loan 1471-CO 1977 US$ 90.00 Seventh Highway Project Loan 1966-CO 1981 US$ 33.00 Rural Roads Project Js$ 258.5_ Rural Roads Components of Agriculture Projects Loan 739-CO 1971 US$ 3.80 Caqueta I Project Loan 849-CO 1972 US$ 1.60 Second Atlantico Project Loan 1118-CO 1975 US$ 5.90 Caqueta II Project Loan 1163-CO 1975 US$ 5.10 Cordoba II Project Loan 1352-CO 1976 US$ 3.50 Integrated Rural Dev. Project US$ 19.90 Railways Loan 68-CO 1952 US$ 25.00 First Railway Project Loan 119-CO 1955 US$ 15.90 Second Railway Project Loan 267-CO 1960 US$ 5.40 Third Railway Project Loan 343-CO 1963 US$ 30.00 Fourth Railway Project Loan 551-CO 1968 US$ 18.30 Fifth Railway Project Loan 926-CO 1973 US$ 25.00 Sixth Railway Project Loan 1/ .1982 US$ 77.UU Seventh Railway Project US 196.60 Aviation Loan 1624-CO 1978 US$ 61.00 Domestic Aviation Project Pipelines IFC-R76-66 1976 US$ 13.00 Loan to PROMIGAS, S.A. US$ 2.00 Equity in PROMIGAS, S.A. US$ 15.00 TOTAL US$ 474.05 1/1 Approved on February 16, 1982 Source: IBRD, Transport Sector Survey, 1979 March 1982  - 44 - TABLE 2.1 COLOMBIA HIGHWAY SECTOR PROJECT Vehicle Registration and Fleet Capacity (1973-1980) A. Number of New Vehicles Registrations Total up to 5t. 5-12 t. 12-20 t. over 20 t. up to 1973 41,145 18,942 19,403 1,551 1,249 1974 1,803 ; 427 1,044 115 216 1975 2,101 353 874 225 649 1976 1,435 229 922 178 106 1077 1,159 170 767 146 76 1978 3,918 532 2,582 609 195 1979 5,101 904 2,716 1,057 424 1980 2,780 479 1,201 502 598 TOTAL 59,442 22,036 29,509 4,384 3,513 distribution% 1.00 .37 .50 .07 .06 increase 73-80,%p. a. 5.4 2.2 6.2 16.0 15.9 B. Evolution of fleet capacity (000 tons) Total up to 5 t. 5-12 t. 12-20 t. over 20 t. up to 1973 2/3 64 150 24 35 1974 291 66 158 2o 41 1975 320 67 165 29 59 1976 334 68 172 32 62 1977 345 69 178 34 64 1978 378 70 196 43 69 1979 426 72 216 58 80 1980 466 80 224 65 97 distri- bution % 1.0C .17 .48 .14 .21 increase 73-80,% 7.9 3.2 5.9 15.3 15.7 p.a. Source: INTRA, "Analisis sobre la situacion actual del transporte publico de carga" August 1981  - 45 - COLOMBIA TABLE 2.2 HIGHWAY SECTOR PROJECT Classification Standards for Trucking Companies _C T G TRANSPORT CAPACITY Type Geographic-. A Paid of level E Capital Total COMPANY OWNED Service of operation G ('000 Col $) Minimum R (Tons) % Not less than y of Total (Tons) G NATIONAL A 1.600 250 5 37.5 E B 800 250 5 25.0 N ________ C 400 250 5 12.5 E INTERDEPAR"- A 800 150 5 22.5 R MENTAL B 400 150 5 15.0 A C 200 150 5 7.5 L INTERMUNIC][- A 400 100 5 15.0 C PAL OR B 200 100 5 10.0 A DEPARTMENTAL C 100 100 5 5.0 R _ G URBAN A 200 50 5 5.0 0 B 100 50 5 3.0 C 50 50 5 2.5 NATIONAL A 1.600 50 10 10.0 S B 800 50 10 7.5 P C 400 50 10 5.0 C INTERDEPART- A 800 30 10 6.0 I MENTAL B 400 30 10 4.5 A _ C 200 30 10 3.0 L DEPARTMENTAL A 400 20 10 4.0 AND URBAN B 200 20 10 3.0 C 100 20 10 2.5 Source: Resolucion o253/79 de Agosto 22 de 1979 August 1981  - 46 - COLOMBIA TABLE 2.3 HIGHWAY SECTOR PROJECT Price Structure of Petroleum Products (Col$ per gallon) A. Price Structure (Col.$ per gallon) retail retail wholesale dept. sales highway refinery date price distrib. distrib. trspt. tax tax fund pricE! 1. REGULAR GASOLINE Dec. 1975 4.75 .26 .34 .29 .04 .26 1.57 1.69 Aug. 1976 8.50 .38 .44 1.48 .04 .50 2.99 2.67 Dec. 1977 12.00 .50 .57 2.82 .04 .73 3.88 3.46 Oct. 1978 16.00 .61 .65 3.04 .04 .92 5.69 5.06 Jul. 1979 26.00 .75 .97 11.65 .04 1.84 5.69 5.06 Oct. 1980 44.00 1.16 1.54 14.97 .04 2.87 12.42 11.00 nec. 1981 55.00 - - - - - 13.50 - 2. GAS-OIL (DIESEL) Dec. 1975 4.25 .31 .63 .29 - .08 1.05 1.89 Aug. 1976 8.05 .49 .73 1.48 - .13 1.86 3.36 Dec. 1977 11.55 .61 .86 2.82 - .18 2.53 4.55 Oct. 1978 15.00 .72 .98 1.58 - .29 4.08 7.35 Jul. 1979 24.50 .87 1.30 10.61 - .29 4.08 7.35 Oct. 1980 44.00 1.41 2.11 7.11 - .84 11.61 20.92 Dec. 1981 55.00 - - - - - 13050 - Source: MOPT January 1982  - 47 - COLOMBIA TABLE 2.4 HIGHWAY SECTOR PROJECT Road User Taxes and Road Costs a. Typical Vehicle Operating Characteristics- passenger car bus truck truck and trailer type Renault 6 P600 D600 CNT900 capacity 5 passengers 34 passengers 6 tons 25 tons speed (km/h) 70 70 65 46 annual mileage (km) 20,000 100,000 65,000 80,000 lifetime (years) 9 6 8 8 vehicle prices (US$) 9,700 28,500 25,400 103,500 (of which taxes) (4,400) (5,600) (4,400) (15,700) b. Financial Vehicle Operating Costs and Taxes2- (December 1980, US$/100 km) costs taxes costs taxes costs taxes costs taxes fuel 1.49 .52 7.04 2.45 7.93 2.76 16.78 4.75 lubricant .30 .10 1.76 .61 1.19 .41 1.26 .36 tires .67 - 3.90 - 3.90 - 10.38 - maintenance 1.64 .16 8.47 .85 7.81 .78 12.18 1.22 depreciation/ interest 10.73 4.98 7.34 1.50 8.84 1.59 29.22 4.58 fixed costs 2.82 .28 11.34 1.13 14.26 1.42 19.09 1.91 Total 17.65 6.04 39.85 6.54 43.93 6.96 88.91 12.82 (total tax percentage) 34% 16% 16% 14% c. Specific Rad User Tar-es (December-1980, US$ /100 km) - fuel 3/ .42 1.98 2.24 4.43 - import and sales tax 4/ 2.83 - - - Total 3.25 1.98 2.24 4.43 index (base = passenger 100 61 69 136 car) d. Road Maintenance Costs (variable costs) Index - periodic maintenance (75% of total) (axle weight index) - 0.3 1.4 4.7 - routine maintenance (25% of total) (equal) 1.0 1.0 1.0 1.0 average index 1.0 1.9 5.2 15.1 l/ on paved roads in good condition and flat terrain. 2/ as of December 1980. 3/ highway fund and departmental taxes. 4/ portion of import and- sales taxes above the average 20%. Source: vehicle operating costs "Plan Nacional de Transporte, anexo II", updated to December 1980; exchange rate as of December 1980: 1 US$ = 50 Col. pesos. August 1981  COLOMBIA HIGHWAY SECTOR PROJECT Colombian Road Network (1980) (Estimated Length, km.) Primary Secondary and Rural Roads Total Paved Unpaved Total Paved Unpaved Total Paved Unpaved Total National 8,200 2,300 10,500 12,600 12,600 8,200 14,900 23,100 Departmental -- -- -- 900 39,500 40,400 900 39,500 40,400 FNCV -- -- -- -- 11,400 11,400 -- 11,400 11,400 Private -- -- -- -- 2,300 2,300 -- 2,300 2,300 TOTAL 8,200 2,300 10,500 900 65,800 66,700 9,100 68,100 77,200 0 Source: MOPT January 1982  -49 TABLE 3.2 COLOMBIA HIGHWAY SECTOR PROJECT National Highway Network (1965 - 1980) Paved Unpaved Total % Paved 1965 3,497 13,982 17,479 20 1966 3,572 13,992 17,564 20 1967 3,853 14,144 17,997 21 1968 4,235 14,607 18,842 22 1969 4,499 14,768 19,267 23 1970 4,821 15,094 19,915 24 1971 5,023 14,994 20,017 25 1972 5,957 14,319 20,276 29 1973 6,446 13,692 20,138 32 1974 6,768 14,075 20,843 32 1975 6,947 14,007 20,954 33 1976 7,344 14,494 21,838 34 1977 7,594 15,226 22,820 33 1978 7,635 15,215 22,850 33 1979 7,900 15,100 23,000 34 1980 8,246 14,884 23,130 36 Source: MOPT January 1982  - 50 - TABLE 3.3 COLOMBIA HIGHWAY SECTOR PROJECT Intensity of Use of the Network Network Corre- sponding to % of Total Upper 80% of National Vehicle-km. Vehicle-km. Network (km) 1968 7,769,575 5,718 30 1969 7,958,500 6,644 34 1970 8,475,525 7,171 36 1971 11,102,225 6,670 33 1972 11,932,950 6,999 35 1973 12,929,800 6,270 31 1974 14,428,150 5,921 28 1975 15,036,325 5,435 26 1976 16,449,950 6,043 28 1977 17,457,325 6,336 28 1978 n.a. n,a. n.a. 1979 19,168,700 6,561 29 Source: MOPT and Mission Estimates August 1981  COLOMBIA HIGHWAY SECTOR PROJECT National Eighway Fuud Revenues (1970-1980) |Thousan 0s of Col9I 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 Gasoline Tax 767,382 932,700 1,200,400 1,188,927 1,207,394 1,654,494 2,614,785 3,351,971 4,708,407 8,095,292 10,754,012 Government Contribution 313,641 280,249 101,870 94,759 55,013 684,251 178,017 920,786 629,293 1,915,701 2,684,425 IBRD Projects 53,739 200,686 163,828 93,958 22,426 19,996 230 -- -- 3,276 133,429 IDB Projects 60,970 131,841 179,963 143,601 128,737 23,657 35,526 38,364 188,646 23,171 161,761 FONADE Contracts -- -- 1,303 18,292 28,317 29,136 15,602 -- - US Coverrmset Donation for Inter-American Highway - 1,580 253 __ 3,014 -- -- -- Own Resources 47,737 49,800 98,795 67,068 78,229 111,848 117,845 161,442 182,883 216,935 563,045 Previous Balance Carry-over 125,140 45,886 -- 278,325 266,459 43,583 -- 25,284 26,517 48,042 1,826,554 Dutch Government Credit -- -- -- -- - 111,642 -- Subtotal 1,368,609 1,641,162 1,746,159 1,886,510 1,786,828 2,566,965 3,076,661 4,497,847 5,735,746 10,302,417 16,123,226 Unappropriated Revenues - 186,044 315,643 400,139 295,129 888,759 158,103 610,568 197,434 883,369 (33,045) 1,110,897 TOTAL 1,554,653 1,956,805 2,146,298 2,181,639 2,675,587 2,725,068 3,687,229 4,695,281 6,619,115 10,269,372 17,234,123 National Highway Fund Expenditures (1970-1980) (Thousands of Col$) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 Studies and Technical Services 26,759 27,301 27,921 55,837 85,123 60,508 119,261 93,951 49,809 68,393 242,972 Bridges 67,062 86,475 72,850 84,844 86,124 132,688 100,841 85,166 97,265 183,033 279,330 Trunk Highways (North-South) 461,577 492,101 500,724 486,828 482,047 410,160 696,871 899,611 708,554 850,603 1,690,018 Trunk Highways (East-West) 132,236 187,630 214,446 288,018 367,134 368,829 379,506 483,661 1,024,510 1,031,619 3,043,257 Other Highways 107,608 103,273 131,953 153,646 196,508 233,148 164,515 326,552 590,445 660,049 976,099 Access to Cities 21,052 47,992 57,982 57,936 107,868 23,918 53,232 252,645 269,476 265,564 408,356 Paving Program 133,023 220,526 277,295 178,680 107,782 223,348 414,182 245,622 416,360 581,569 1,259,216 Hydraulic Works 42,118 44,740 65,552 78,671 123,868 162,732 277,416 231,360 216,816 419,905 526,318 Rehabilitation -- -- -- -- 92,792 216,938 383,980 958,791 2,362,502 Highway Maintenance 425,788 515,210 561,354 538,984 780,225 871,887 966,112 1,352,351- 2,354,794 3,935,009 4,698,335 H Other Expenditures 13,930 62,865 32,117 8 129 56,246 39,564 249,141 156,689 73,433 433,126 332,170 ; Subtotal 1,431,153 1,788,114 1,942,194 1,932,173 2,492,925 2,526,782 3,513,869 4,344,546 6,185,442 9,387,751 15,818,573 Contribution to National Feeder Roads Fund 123,500 168,691 _204,104 249,466 182,662 198,286 173,360 350,735 433,673 881,621 1,415,550 TOTAL 1,554,653 1,956,805 2,146,298 2,181,639 2,675,587 2,725,068 3,687,229 4,695,281 6,619,115 10,269,372 17,234,123 1/ Difference between appropriated revenues and actual expenditures normally financed with subsequent year's budgetary appropriations. Source: MOPT August 1981  - 52 - TABLE 3.5 COLOMBIA HIGHWAY SECTOR PROJECT Design Standards for New Roads (main parameters) ADT Year 10 <250 250/500 500/1000 1000/2000 2000/5000 >5000 Terrain E M E M E M E M E _ F N Design Speed (km/h) 40 50 40 50 40 60 ,40 60 60 80 60 80 Carriageway (m) 6.00 6.00 7.00 7.00 7.00 2 x 7.00 Shoulder (m) 0.5 1.0 1.0 1.0 1.5 2.50 2.50 Maximum Gradient () 8 7 7 6 6 5 6 5 5 4 5 5 Minimum H. Radius (m) 50 80 50 80 50 120 50 120 120 250 120 250 Stopping Distance (m) 40 60 40 60 40 70 40 70 70 110 70 110 Bridge Width (m) 7 8 8 8 9 9 9 9 10 10 2x 9 Terrain2/ 0 P 0 P 0 P 0 P 0 P 0 P Design Speed (km/h) 60 70 60 70 80 100 80 100 80 100 100 120 Carriageway (m) 6.00 6.00 7.00 7.00 7.00 2 x 7.00 Shoulder (m) 1.0 1.5 1.0 1.5 1.5 2.0 2.0 2.5 2.5 3.0 3.0 3.0 Maximum Gradient (1) 6 5 5 4 4 3 4 3 4 3 4 3 Minimum H. Radius (m) 120 180 120 180 250 450 250 450 250 450 250 450 Stopping Distance (m) 70 90 70 90 110 200 110 200 110 200 110 160 Bridge Width (m) 8 8 8 8 9 9 9 9 10 10 2x 9 1/ E = Alpine-Type Terrain M = Mountainous Terrain 2/ 0 = Hilly-Type Terrain P = Rolling Flat Terrain Source: MOPT, Manual de Diseno, 1970, page II-41 November 1981  TABLE 3.6 COLOMBIA HIGHWAY S,ECTOR PROJECT Design Standards for Road Upgrading (main parameters) ADT Year 10 250 250/500 500/1000 1000/2000 Terrain E M E M E M E M Operating Speed (km/h) 30 40 30 40 30 40 30 40 Carriageway (m) 5.0 5.0 5.0 5.0 6.0 6.0 6.0 6.0 Shoulder (m) 0.5 0.5 0.5 0.5 1.0 1.0 1.0 1.0 Maximum Gradient (%) 12 10 12 10 12 10 10 8 Minimum H. Radius (m) 25 40 25 40 25 40 25 40 Stopping Distance (m) 30 50 30 50 30 50 30 50 Bridge Width (m) 6 6 6 6 8 8 8 8 Teran2/ 0 P 0 P. 0 P o Terrain -O PO p. O PO P Operating Speed (km/h) 50 60 50 60 60 80 60 80 Carriageway (m) 5.0 5.0 5.0 5.0 6.0 6.0 6.0 6.0 Shoulder (m) 0.5 1.0 1.0 1.0 1.5 1.5 1.5 1.5 Maximum Gradient (x) 8 6 8 6 8 6 6 4 Minimum H. Radius (m) 80 120 80 120 120 220 120 220 Stopping Distance (m) 60 80 60 80 80 140 80 140 Bridge Width (m) 6 6 6 6 8 8 8 8 1/ E = Alpine-Type Terrain M = Mountainous Terrain 2/ 0 = Hilly-Type Terrain P - Rolling Flat Terrain Source: MOPT, Manual de Diseino, 1970, page III-42 November-1981  COLOMBIA HIGHWAY SECTOR PROJECT M4OPT's Program 1982-1986 (Col$ million at July 1981 prices) Total 1981 1982 1983 1984 1985 1986 (1982-1986) (estimated execution) SOURCE OF FUNDS Government Appropriations 506.5 497.2 286.9 815.8 2.010.5 1,032.4 4,642.8 Gasoline Tax Revenues 16,226.5 15,217.0 15,643.0 16,716.0 17,958.0 19,282.0 84,816.0 Fxisting Foreign Credit 3,299.5 1,400.6 1,342.4 317.1 - - 3,060.1 Road To]ls 1,307.8 1,472.3 1,622.0 1,705.4 1,791.9 1,883.6 8,475.0 Transfers 2,034.1 700.0 247.0 - - - 947.2 Proposed Sector Loan - 472.3 2,076.3 2,396.0 2,209.6 467.5 7,621.7 Other New Foreign Credit - 2,579.5 3,635.5 1,820.5 764.5 - 8,800.0 TOTAL 23,374.3 22,338.9 24,853.1 23,770.8 24,734.5 22,665.5 118,362.8 > APPLTt(>''ION'r OV FITNDS HIghw.l,;s Non-recurrent New Construction 8,451.4 3,990.8 3,802.7 3,169.6 2,749.0 1,859.1 15,571.2 Rehabilitation 3,924.2 3,373.4 4,932.9 4,136.2 4,384.9 2,350.0 19,177.4 Paving 985.5 3,317.2 3,119.4 4,084.4 5,500.0 5,500.0 21,521.0 Equipment 1/ 760.3 1,815.0 1,815.0 - - - 3,630.0 Road Safety 48.8 154.2 185.0 240.5 312.6 406.4 1,298.7 Training - 27.7 27.7 27.7 36.9 41.5 161.5 Studies 458.8 447.4 247.2 250.0 300.0 350.0 1,594.6 Subtotal 14,629.0 13,124.8 14,129.9 11,908.4 13,283.4 10,507.0 62,954.4 Recurrent Maintenance 5,868.7 6,121.0 6,549.5 6,745.9 6,948.3 7,156.8 33,521.5 Administration 1,362.8 1,414.6 1,442.9 1,471.7 1,501.2 1,531.2 7,361.6 Subtotal 7,231.5 7,535.6 7,992.4 8,217.6 8,449.5 8,688.0 40,883.1 X H Othier non-highways 1,513.8 1,677.6 2,280.6 2,664.0 1,381.0 1,271.4 9,274.6 v Debt Service - - 450.2 980.8 1,620.6 2,199.1 5,250.7 Total 23,374.3 22,338.9 24,853.1 23,770.8 24,734.5 22,665.5 118,362.8 1' The requirements for 1984-1986 will be reviewed in accordance with the Equipment Management System. Source: MOPT March 1982  COLOMBIA HIGHWAY SECTOR PROJECT MOPT's Program 1982-1986 (Current Col$ millions) l/ Total 1982 1983 1984 1985 1986 1982-1986 SOURCE OF FUNDS Government Appropriations 538.5 387.9 1,358.6 4,085.2 2,516.4 8,886.8 Gasoline Tax Revenues 16,480.0 21,176.7 27,834.0 36,480.5 47,004.2 148,975.4 Existing Foreign Credit 1,516.8 1,817.3 528.0 - - 3,862.1 Road Tolls 1,594.5 2,195.8 2,839.7 3,640.1 4,591.7 14,861.8 Transfers 758.1 334.4 - - - 1,092.5 Proposed Sector Loan 511.5 2,811.2 3,989.4 4,487.7 1,139.7 12,939.5 Other New Foreign Credit 2,793.6 4,921.6 3,031.3 1,553.0 - 12,299.5 TOTAL 24,193.0 33,644.9 39,581.0 50,246.5 55,252.2 202,917.6 APPLICATION OF FUNDS Highways Non-recurrent New Construction 4,322.0 5,147.9 5,277.9 5,584.4 4,532.0 24,864.0 Rehabilitation 3,653.4 6,677.9 6,887.2 8,907.6 5,728.6 31,854.7 Paving 3,592.5 4,222.9 6,801.0 11,172.9 13,407.5 39,196.8 Equipment 1,965.6 2,457.1 - - - 4,422.7 Road Safety 167.0 250.4 400.5 635.0 990.7 2,443.6 Training 30.0 37.5 46.1 75.0 101.2 289.8 Studies 484.5 334.6 416.3 609.4 853.2 2 698.0 Subtotal 14,215.0 19,128.3 19,828.8 26,984.3 ZJ,613.2 1053/ 7.T Recurrent Maintenance 6,629.0 8,866.4 11,232.7 14,115.0 17,446.3 58,289.4 Administration 1,532.2 1,953.3 2,450.5 3,050.0 3,732.6 12,718.6 Subtotal 8,161.2 10,819.7 13,683.2 17,165.0 21,178.9 71,008.0 Other non-highways 1,816.8 3,087.4 4,435.9 2,805.4 3,099.3 15,244.8 Debt Service - 609.5 1,633.1 3,291.8 5,360.8 10,895.2 Total 24,193.0 33,644.9 39,581.0 50,246.5 55,252.2 202,917.6 Projected Exchange Rate 63.94 73.98 84.88 96.51 108.54 H Current US$ million 378.3 454.7 466.2 520.8 509.1 2,329.2 1/ As per January 1st. of each year and assuming a projected price index of: 10.3 135.4 166.5 203.1 243.8 Source: IBRD March 1982  COLOMBIA H1CIIWAY SECTOR PROJECT NMOPT 19S2 Rehabilitation and Paving Program co XRUAB1LITATION T E R - 32 / Section Length Traffic (A __T No. of 8.2T Base SeRsR (Ref. No.) Section_ (Em) Car Bus lrucks Total Eq. axles 6 case tivity Tender 1 Puerto Valdivia - Taraza 41.0 282 94 965 13L1 2010 99 77 7 2 Taraza - km 262.05 52.0 284 116 891 1291 1860 8.0 99 77/ 3 Km 262.05 - Caucasia 9.0 283 116 891 1290 1860 J 99 77 5/29/81 4 Caucasia - km 18.60 18.6 580 145 1087 1812 2270 5.6 54 47 5 ICm 18.60 - Planeta Rica 49.3 425 152 941 1518 1970 J 99 77 9 Planeta Rica - La Ye 53.0 351 138 766 1255 1610 6.1 99 77 6 Planeta Rica - ki 15.00 15.0 561 89 240 890 520 1.9 78 547 7 km 15.00 - km 38.00 23.0 937 146 381 1464 820 1.7 119 90 5/29/81 8 km 38.00 - Monteria 14.0 3293 320 960 4573 1130 0.8 188 173) 50 Oiba - Vado Real * 29.0 378 157- 988 1523 1730 2.6 228 165 5/29/81 35 Neiva-Pitalito 187.0 389 105 255 749 531 30 0 43 32 12/81 47 Bucaramanga - Concova 24.0 493 95 360 948 770 48 Concova - Laguna 64.0 390 86 390 866 830 r 19.8 50 38 6/22/81 49 Laguna - Pamplona 35.0 431 116 350 897 640 31 lHonda - Mariquita 20.0 1355 143 878 2376 -1300 2.0 42 326 32 Mariquita Fresno 24.0 505 92 321 918 690 3.0 61 461 7/17/81 c 33a Fresno - Mesones 25.6 356 91 312 759 680 3.3 60 46) 34 Chusaca - Silvana - Girardot 156.0 2700 713 1482 489 28W0 16.8 79 55 Aug/81 TOTAL 839.5 101.6 PAVING 4/45 Puenta Boyaea - E1 Infierno 22 97 24 225 346 345 1.98 35 18 5/7A Aranzazu - Salamina 23 276 39 117 432 186 1.95 38 20 Early 6/25A Popayan Patico 14 250 60 233 543 3f:8 1.10 50 29 1982 7/15A Lorica - Mamil 17 511 43 167 721 263 1.31 59 34 12/21 tlamato - Minca 10 499 216 226 941 404 0.43 108 66 13/24 Villavicencio - Indostan 33 272 6 339 617 509 2.59 60 36 Barboza - Velez 17 251 113 232 596 383 1.27 60 34 16/35A Cornejo - Santiago 12 587 160 142 889 261 n.- 96 60 35 11.59 TOTAL 148 1/ 1979 values for rehabilitation, and 1980 values for paving 0- 2/ July 1981 costs 3/ For rehtabilitation a 50% cost increase; for paving a 20% traffic decrease and a 50% cc',t increase  - 57 - 'ABLE 4.3 COLOMBIA HIGHWAY SECTOR PROJECT Road Safety Component Project Cost (US$ thousands) Civil Works Total F.E.C. Road Signs (for .5,400 km) 3,331 1,990 Road Markings (for 5,400 km) 5,146 4,812 Guard Rails (100 km) 3,909 3,000 Rest Areas (4) 200 -- 12,586 9,802 (78%) Institutional Strengthening Traffic Police 4,464 2,350 Control and Communication Equipment 500 500 Educational Campaign 727 -- Diagnostic Centers 2,000 1,000 Driver Testing Equipment 100 100 7, 791 3,950 (50%) Technical Assistance and Scholarships Engineering Studies 1,260 -- C.onsultants 740 260 Scholarships 440 440 2,440 700 (29%) Total 22,817 14,452 (63%) Source: MOPT and Mission Estimates August 1981  COLOMBIA EIGHTH HIGHWAY PROJECT Technical Assistance for Road Safety Component Man-Months of Consulting Services LOCAL CONSULTANTS FOREIGN CONSULTAN''TS Cu 4.J~~~~~~~~~~~~~~~~~ .-1~~~~~~~~~~~~4 0)444 4 U C 0)W O S + Q Q .O .H *e X Q 0)4. 4 . '- 0S of INTRA 06 0 w cuH pi.11 4 4.4 d 4-, coL Cu I '- National 0Traffic 0a 0 Education~~~~~~~~~~~~~~ - Capag 2. 2 6u 40.2 24 18 4 24 6 U 2 44 270 4-4 34 346 |-i 0)i4-4 0 *d Cu 44 4TA 24 10 44 Costs (US$): Schlarhi Consultans 0 Fr H c Co 0 El co TASKS,000 1 x0 10 En 0 ' EJ 0 Strengthening of INTRA 6 6 6 12 2 40 72 3 3 Assistance for Road Accident Control 6 6 6 6 12 2 44 82 3 3 3 6 15 Traffic Police 6 6 6 6 2 30 56 3 9 12 National Traffic Education Committee 2 2 6 10 20 Education Campaign 2 2 6 10 20 Publicity Campaign 2 2 6 10 20 Subtotal 21862 6 4 4 4 2 0 9 3 3 6 93 TOTAL 24 102 144 270 costs (US$): Scholarship Program Local Consultants Foreign Consultants Airfare 4 0 x 2, 000 80, 000 24 x 2,800- 67,200 30 x 10,000 = 300,000 Living Allowance 40 x 3 x 3,000 =360,000 102 x 2,200= 224,400 AA,n 144 xl1,000 = 14p00 Source: MOPT and Mission Estimates 435, 600 MOPT - August 1981  - 59 - TABLE 4.5 COLOMBIA HIGHWAY SECTOR PROJECT Estimated Maintenance Personnel to be Trained (1982-1986) Description Existing Personnel Personnel to be Trainet A. Mechanical Personnel Assistant Mechanic 400 280 Diesel Mechanic 337 236 Gas Mechanic 228 160 Industrial Mechanic 77 56 Electro Mechanic 100 72 Welder 121 84 Sub-Total 1,263 Assistant Equipment Operator 203 140 Heavy Equipment Operator 1,152 808 Driver 1,454 1,020 Sub-Total 2,809 1,968 B. Maintenance/Construction Road Inspector 175 123 Equipment Inspector 50 35 Lab. Technician 50 35 Surveyor 75 53 Sub-Total 350 246 C. Administration Storekeeper 75 53 Procurement (Chiefs) 50 35 Asst. Accountant 150 35 Section Chief 75 53 Sub-Total 350 176 Total 4,772 Source: Consultant August 1981  - 60 - COLO-BIA TABLE 4.6 COLOMBIA HIGHWAY SECTOR PROJECT Capital and Technical Assistance Expenditures (US$) Description Local Foreign Total (a) Physical Training Facilities Civil Works 125,000 125,000 250,000 Workshop Equipment and Tools - 452,000 452,000 Sub-Total 125,000 577,000 702,000 (b) Technical Assistance 1 Training Advisor - 240,000 240,000 3 Senior Instructors - 216,000 216,000 Fellowships - 70,000 70,000 Sub-Total - 526,000 526,000 *c) Transportation Vehicles Sub-Total - 75,000 75,000 td) Support of Tasks to be Accomplished by RTPU Road Maintenance Equipment - (500,000)-/ (500,000)-L (e) Training of Mechanics (Equipment Overhaul) 1/ (/ Spare Parts Sub-Total _300,000)- _(300,000)- Total 125,000 1,178,000 1,303,000 1/ To be provided by MOPT. Source: Consultant and Mission August 1981  HIGHWAY SECTOR PROJECT Bank Participation US$ Million Rehabilitation Special I Schedule 1 Paving Maintenance Safety Training ponent Total Bank Participation l Category of Expenditure I Civil Works - Rehabilitation 131.0 _- _ 131.0 and Paving 1 - Safety - 4.8 - - 4.8 - Training _ _ - 0.2 _ 0.2 | Subtotal 136.0 50% Total cost 0 J Equipment 4- aS - Maintenance _ 5.0 - _ _ 5.0 - Safety _ - 2.0 - 2.0 P4 - Training _ _ - 1.0 _ 1.0 X) Subtotal 8.0 100% CIF 0', ` Studies and Technical Assistance 0 - National Transport Plan - Departmental Highway Plans l - Road Transportation - Highway Data Bank - Construction Industry _ _ 0.7 0.3 5.0 6 - University Research 6 50% Total Cost - Safety and 100% Foreign - Traiming l H I Unidentified Irasport l Matters . Front end fee 2_ _ ____Z_1; . Total 131.0 5.0 7.5 1.5 5.0 152.3  - 62 - TABLE 5.2 COLOMBIA HIGHWAY SECTOR PROJECT Estimated Schedule of Disbursements (US$ million) Cumulative Disbursements Mexico 1/ IBRD Fiscal Year at end of Semester x Loan 1671-ME 1983 December 31, 1982 10.3 18% Year 1 June 30, 1983 28.3 8% 1984 December 31, 1983 48.3 Year 2 June 30, 1984 70.3 46% 30% 1985 December 31, 1984 95.3 Year 3 June 30, 1985 122.3 80% 75% 1986 December 31, 1985 142.3 Year 4 June 30, 1986 153.3 100% 100% 1/ The buildup of the portfolio of eligible subprojects and accepted contracts in the initial face of the Mexico Highway Sector Project lagged more than one year behind the present situation in Colombia. Source: Mission Estimates March 1982  HIGHWAY SECTOR PROJECT MOPT Tender Program for Construction, Rehabilitation and Paving Schedule of implementation of works (Col$ million) -/ I. Tender Programs Total 1982 1983 1984 1985 1986 Post 1986 Ongoing Works 16,523 11,140 5,383 Tender 1981 16,500 2,700 6,600 7,200 Tender 1982 17,820 2,970 6,032 8,818 Tender 1983 19,245 3,267 4,338 11,640 Tender 1984 18,593 3,593 5,000 10,000 Tender 1985 .. 8,121 1,219 6,902 TOTAL Col$ million 96,802 13,840 14,953 16,499 16,849 17,859 16,902 79,900 II. Potential Eligible Subprojects 2/ a Tender 1981 5,588 915 2,235 2,438 Tender 1982 6.961 1,160 2,356 3.445 Tender 1983 5,060 859 1,167 3,034 Tender 1984 4,650 930 1,260 2,460 Tender 1985 4,060 812 3,248 TOTAL Col$ million 26,319 .915 3,395 5,653 5,542 5,106 5,708 1/ US$1 = Col$55 (July 1981 prices) 2/ Rehabilitation and Paving only. About 65% of these potential subprojects were identified and sub- mitted to a technical review and prefeasibility analysis. The major part of Bank-supported sub- . projects would belong to this category II. Source: MOPT and Bank estimates March 1982  COLOMBIA HIGUWAY SECTOR PROJECT Bank-Supported Rehabilitation and Paving Subprojects Schedule of Implementation, Schedule of Disbursement Schedule of implementation of works (Col$ million)-/ I. Financial Terms Total Tender 1982 1983 1984 1985 1986 Tender 1981 5,588 915 2,235 2,438 Tender 1982 6.961 1,160 2,356 3,445 Tender 1983 5,060 859 1,167 3,034 TOTAL Col$ million 17,609 915 3,395 5,653 4,612 3,034 US$ million equivalent Total US$ million 320 17 62 103 84 55 Current US$ million 442 19 75 137 123-. 88 Bank participation - 131 9.5 37.5 68.5 15.5 Cumulated Bank 3/ Participation - 4/ 131 9.5 47 115.5 131 Disbursement Schedule - 131 7.5 36.3 77.3 121 131 a% Rehabilitation j Paving 1/ 4 II. Physicali Terms Length (Km) Col$ million Length (Km) Col$ million - Tender 1981 5,588 -- Tender 1982 584 3,811 700 3,150 Tender 1983 304 1,910 700 3,150 TOTAL 11,30* 1,400 6,300 1/ US$ - Col$ 55 (July 1981) 2/ Assuming 10% annual increase 3 50% 4/ Assuming 6 months slippage against works implementation Source: MOPT and Bank estimates March 1982 u  COLOMBIA HIGHWAY SECTOR PROJECT Status of Subproject Preparation Cumulative Length (km ) I. New Construction 1981 1982 1983 1984 1985 Feasibility 200 500 767 1,000 1,300 Final design 200 500 767 900 1,100 II. Rehabilitation Pavement Defections 1,450 2,600 3,750 Diagnosis 1,450 2,600 3,750 According to Pre-Feasibility 800 2,600 3,750 Pavement Management Final Engineering 800 2,300 3,750 System Final Feasibility 800 2,300 3,750 0 III. Paving Screening 1,500 2,400 3,386 4,500 5,500 Pre-Feasibility 600 1,500 3,386 4,000 5,000 Final Engineering 150 1,500 3,386 4,000 5,000 Final Feasibility 150 1,000 3,386 4,000 5,000 Source: MOPT (Period 1981/1983) and Bank estimates (1984/1985), March 1982 - Ln~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I~  - 66 - TABLE 5.6 COLOMBIA HIGHWAY SECTOR PROJECT Physical Targets 1982 1983 1984 1985 1986 Total Rehabilitation (km) 650 950 800 840 450 3,690 Paving (km) 310 410 500 760 800 2,780 Resealing (km) 400 450 500 550 600 2,500 Paved Road Condition Inventory l/(km) 1,000 2,000 3,000 3,000 3,000 12,000 Maintenance Fleet- availability (%) 2/ 60 65 70 80 80 utilization (hrs) 3/ 800 900 1,000 1,200 1,200 Mini-Computers Ins- talled in MOPT Districts (u) - 8 8 9 25 1/ The condition inventory would follow the criteria being established under the ongoing technical assistance. 2/ Availability of 100% means that equipment would be available for maintenance work 220 days per year. 3/ Utilization of heavy equipment and dump trucks. Source: MOPT and mission estimates January 1982  - 67 - ANNEX 1 Page 1 COLOMBIA HIGHWAY SECTOR PROJECT Completed and Ongoing Bank Assistance to Highways A. Highway Projects (i) Completed Projects 1.01 From the early fifties to the mid-sixties, the Bank Group contributed to the highway subsector through four projects (three loans and one credit) assisting in the expansion of the primary network and the introduction of modern road engineering and construction techniques. The First Highway Plan was chaneled through the First Highway Project, which was originally intended to be completed in three years as an emergency program, and eventually extended beyond ten years. Successive loans financed unfinished parts of the preceding ones and included some new works for which only preliminary engineering was available. Since 1961, feasibility studies, including engineering, have preceded the execution of projects, and international bidding for unit-priced contracts was introduced. 1.02 The first four highway projects (Loan 43-CO, US16.5 million, 1951; Loan 84-CO, US$14.35 million, 1953; Loan 144-CO, US$16.50 million, 1956; and Loan 295-CO, US$19.50 million, and Credit 05-CO, US$19.5 million, 1961) eventually resulted in the construction or upgrading of 3,200 km of trunk roads. They contributed to the development of Colombia's trunk road system and to the emergence of road transport as the main means of communication. The growing importance of highway planning, construction and maintenance required reorgan- ization and strengthening of the Ministry. In 1965, as a condition for extend- ing the Closing Date of the Loan and Credit for the Fourth Highway Project, the Government agreed to employ a joint venture of management consultants, Comec-Harris (Mexico/USA), to study the organization of the Ministry of Public Works (MOP). 1.03 The Fifth Highway Project (Loan 550-CO, US$17.2 million) was made in July 1968 for (a) the construction or reconstruction (with paving) of about 510 km of four national highways; (b) the construction of a major highway bridge at La Virginia; (c) consulting services for supervising (a) and (b) above, for preinvestment studies, for detailed engineering of further priority roads, and for assisting the reorganization of MOP based on the Comec/Harris report; and (d) the purchase of equipment needed to effect the reorganization. The greater length of the reconstruction works was located on the western trunk road; the seven sections included in the project completed the paving of the road from Cali to the North coast. 1.04 Progress was slow because of: (a) unusually heavy rains during the years 1969 to 1972; (b) the awarding of contracts to inexperienced and financially weak local firms; and (c) the fact that drainage and earthworks were underestimated because of inadequate design. The resulting cost overruns caused two contracts to be rebid because the legal ceiling of 150% of the bid price (including price escalation) had been reached. Another section had to be  - 68 - ANNEX I Page 2 rebid after the initial contract was terminated for lack of progress. All works were eventually completed in 1975, three years after the original comple- tion date. The overall construction cost exceeded the appraisaf estimate by 32% and averaged US$75,000/km, which, nevertheless, was reasonable considering the type of terrain and conditions encountered. The assistance provided under the project to implement the reorganization of the Ministry achieved only partial results. 1/ Road maintenance in the district was reorganized following the principles of the Comec/Harris study. The Fifth Highway Project, despite its shortcomings, was an important phase in the development of Colombia's trunk road system and contributed to the establishment of better engineering practices and improved contractual procedures. 2/. 1.05 The Sixth Highway Project (Loan 680-GO, US$32.0 million, May 1970) provided continuity to the Bank's involvement in the construction and paving of main roads. The project initially provided for: (a) construction of the 1,483 meter Barranquilla bridge and its approaches; (b) construction, improvement and paving of the remaining 9.5 km of the Buga-Buenaventura Highway; (c) improve- ment and paving of 1,618 km of primary and secondary highway; and (d) technical assistance for supervision of the three above components by consultants. 1.06 The first two components were completed with a delay of about a year at a cost slightly below appraisal estimates. The improvement and paving program, however, suffered lengthy delays and large cost overruns. Design revisions to allow for stronger pavements caused delays in project implementation, and sub- stantial increases in quantities and in costs. Additional delays were due to lack of local funds, poor contract management and inadequate supervision and coordination by MOP. In 1974, it had become evident that the project was out of step with the priorities of the sector and the level of funding available to it. Resources were much more scarce, and MOP was facing a mounting backlog of rehabilitation works on its trunk network. In January 1975, the Bank agreed to reduce the scope of the paving program from 1,618 to 874 km. Because of the continuing cost increase, Bank disbursement was lowered to 30% in January 1S77 and subsequently to 20% in July 1979. The loan was fully disbursed on July 15, 1980, at which date 88% of the 864 km had been fully paved. The real cost over- run of the paving program amounted to 102%, the weighted final cost per km being about US$59,000, which was still reasonable considering the scope of the works and terrain conditions. 1.07 The project met the objectives of improving vehicle access to the port of Buenaventura by completing the Buga-Buenaventura Highway and of facilitating transport across the Magdalena River via the Barranquilla Bridge. However, the objective of the paving program to improve communications between the Atlantic ports of Barranquilla, Cartagena and Santa Marta and the major commercial and 1/ It was only after completion of this project, in January 1976, however, that MOP was reorganized into the Ministry of Public Works and Transport (MOPT) in line with the principal recommendations of the Comec/Harris 'Study. MOPT also proceeded to establish a Sectoral Planning Office (1976) and, subsequently, a separate Highway Planning Office (1980). 2/ Project Completion Report dated September 14, 1977; Project Performance Audit Report dated February 27, 1978.  - 69-- ANNEX 1 Page 3 industrial centers of the country was not fully met since nearly half of the intended paving works were not completed under the loan. Supervision missions for the Fifth and Sixth Highway Projects had pointed out repeatedly the need to improve maintenance to meet general covenants under the loan agreements for these two projects. Although MOPT had the basic organization necessary to discharge its maintenance responsibilities, it lacked the capacity to carry out ad hoc repairs. The development of a program of coordinated measures to improve the efficiency of MOPT's maintenance operations soon became the focal point of the preparation of the Seventh Highway Project. 1/ (ii) Ongoing Projects 1.08 The Seventh Highway Project (Loan 1471-CO, US$90 million, June 1977) shifted the Bank's involvement in the highway subsector to road rehabilitation and maintenance, and related institutional development. It comprises: (a) the rehabilitation of about 978 km of paved trunk roads; (b) the preparation and implementation of a vehicle weight control program including installation of weighing stations on trunk roads; and (c) a highway maintenance program (1978-1982), focused on the renewal and better management of MOPT's equipment fleet and on the introduction of upgraded planning and management methods and procedures for maintenance activities. The project provides equipment, spare parts, expansion and equipping of workshops and warehouses, and technical assistance. Finally, the project also includes studies related to the updating of the national trans- port plan, and the preparation of an inventory of local road materials. 1.09 Project startup was delayed for two years because of the changes in administration (August 1978) and subsequent inquiries into MOPT's practices, which paralyzed most procurement actions until February 1979. The new adminis- tration had difificulties in reorganizing MOPT and restarting the project. Key consultants, in particular for maintenance planning and equipment management, became involved only in early 1980. Some of the civil works contracted during the first two years encountered administrative and financial problems and failed; new contracts had to be negotiated or tendered. It was not until the end of 1979 that project execution really got under way with the full support of MOPT. 1.10 About 70% of the rehabilitation works has been completed by December 31, 1981. The entire program will be completed by 1983, with all but seven sections expected to be completed by the end of 1982. Its final cost is expected to be 63% above appraisal estimates because of a combination of: (a) increases in quantities due to the nature of the work and the additional deterioration between the time when engineering was completed back in 1974 and the time of construction; and (b) inflation which was higher than anticipated over a longer period than estimated, thus causing a 160% increase in price contingencies. Disbursements will be reduced to 20% of expenditures after January 1, 1982. The works are now being carried out efficiently; they repre- sent a major upgrading of the Colombian network and are economically well justified. 1/ Project Completion Report of Sixth Highway Project dated October 29, 1980; the Project Performance Audit Report has not been yet prepared.  - 70 70 - ANNEX 1 Page 4 1.11 The technical assistance for highway maintenance by consultants INGEROUTE (France) has developed and initiated the implementation of systems for: (a) Pavement Management; (b) Equipment and Spare Parts Management; and (c) Training. Maintenance equipment for a total of US$25 million is being procured under the project. Road marking, pavement evaluation and laboratory equipment for about US$1.0 million are also being procured. In addition, MOPT procured maintenance equipment in 1979 for US$5.3 million with own funding and is presently reviewing equipment proposals for US$66 million. This important replacement operation will enable MOPT to match maintenance needs. Further equipment acquisition will be limited and will be carried out on the basis of the Equipment Management System after review of the alterna- tive of contracting routine and periodic maintenance. MOPT's budget is conferring top priority to maintenance expenditures, which have almost doubled in real terms from 1976 to 1980, reaching, for the whole network, a satisfactory average level of US$2,180 per km. A Maintenance Management System has been established. The real needs for maintenance personnel have been established, and expenditures for maintenance administration and personnel are being kept below 50% of total maintenance expenditures. The Equipment and the Maintenance Management Systems and the Training System are being tested in four pilot districts and will be extended countrywide under the proposed project. 1.12 AftL- L[ay had presented a Plan of Action for Vehicle Weight Control, MOPT contracted local consultants TECNOCONSULTA LTDA in November 1980 to evaluate the economic, technical, financial and legal problems raised by vehicle weight control. The consultants presented, in December 1981, their recommendations on the number, type and location of the weighing stations. MOPT agreed to adopt a plan of action for implementation of vehicle weight control before negotiations of the proposed project and to carry it out under the Seventh Highway Project. 1.13 The National Transport Plan was finalized and discussed with the Bank by mid-1980, leading to the preparation of the proposed project. One contract for the study of locally available road materials was awarded, in February 1981, to a local consultant firm and is proceeding well; two further contracts are being awarded. In April 1981, the scope of the project was modified to include two Phases of Professional Management Training for contractors, to be further developed under the proposed project. Despite the two-year delay in its implementation, the Seventh Highway Project has had a notable impact upon the institutional strengthening of MOPT. B. Feeder Roads Project and Road Components of Agricultural Projects 1.14 The Rural Roads Project (Loan 1966-CO, US$33.0 million, March 1981) aims at strengthening the planning, managerial and control capability of the National Rural Roads Fund (FNCV) in the rural roads subsector with the purpose of developing this organization into an efficient planning and funding agency for rural roads programs carried out by the departmental agencies. It assists FNCV's 1981-1984 program for: construction of about 2,000 km, rehabilitation of about 1,800 km and maintenance of about 4,600 km of feeder roads, and pro- vides technical assistance to upgrade the management of the institution. Project implementation started satistactorily in the last quarter of 1981.  - 71 - ANNEX 1 Page 5 1.15 Bank participation in rural road construction was initiated through rural development projects. The First Caqueta Project (1971) involved construction and improvement of 124 km of low standard roads; the Second Caqueta Rural Settlement Project (1975) included construction of about 200 km of penetration roads and complementary road works; and the Second Cordoba Agricultural Development Project (1975) included construction of 168 km of all-weather roads as well as culverts, bridges and other structures. The experience gained under these projects indicated that special consideration had to be given to road selection, timely funding and proper maintenance of constructed roads. More recently, the Integrated Rural Development Project (Loan 1352-CO, 1976) includes 440 km of rural roads, which are being success- fully implemented by FNCV. The proposed Second Integrated Rural Development Project would include construction and improvement of about 540 km of rural roads. February 1982  - 72 - ANNEX 2 Page 1 COLOMBIA HIGHWAY SECTOR PROJECT Application of the Pavement Management System for the Paved National Network A. Classification of Traffic 1. The level of service and the level of maintenance of a road should be adapted to the volume of traffic. Pavement design is a function of the (equivalent 8.2-ton) cumulative axle load traffic and subgrade CBR. When the risk of pavement failure is considered due to financial constraints, it appears that one should take less design risk on highly trafficked roads than on roads with little traffic. Drainage requirements should be adequately designed for all roads. The design life of a road (period of time for which no pavement strengthening is required) should reflect the level of risk accepted. 2. For flexible pavements (97% of the Colombian paved network), the following classes of traffic may be selected for two-lane highways: 0 - 676 - 1351 - 2801- More than ADT (expressed in 8.2-ton 675 1350 2800 5800 5800 equivalent axles) Class T4 T3 T2 Tl TO Design period (years) 10 12 14 16 20 3. Based on a survey (March 1978) carried out by Consultants (Techno-Consulta/ Colombia), the typical loading characteristics are tentatively indicated below: Type of Truck C2 C3 C4 C5 C6 B3us Number of equivalent 8.2-ton axles 1.4 2.4 3.7 4.7 5.0 0.3 This means, for instance, that a typical two-axle truck (C2) is equivalent to 1.4 axle of 8.2 ton. Since the truck conposition varies widely 1/ over the roads, any pavement design should consider the specific truck composition to determine the class of traffic (para 2). At least a full three-days' traffic survey should be carried out to approximate the traffic composition. 1/ The average truck factor is 1.5, but some roads present a truck factor of 2.5 and others of 0.7.  - 73 - ANNEX 2 Page 2 4. When the Highway Design and Maintenance Model (HDM) is used to test the various policy alternatives, the concept of link (sections of road with the same level of traffic) should be refined to consider sections of roads with not only the same traffic but also with about the same number of 8.2-ton equivalent axles, i.e., the same class of traffic (TO, Tl, T2, T3, T4). B. Classification of Highway Condition 5. Four c:Lasses of highway condition are defined. - Class A means a good condition with no structural problems, good running surface, and well adapted design (shoulders, slopes, drainage, signalization), i.e., a good level of comfort; - Class B is close to Class A, but already exhibiting some surface defects (although without structural problems) and a less well adapted design; - Class C is related to roads with structural deficiencies and sur- face problems, often accompanied by inadequate drainage and other design deficiencies; and - Class D corresponds to roads with serious structural problems and a critical surface condition, always associated with design deficiencies of which the most important and frequent is inade- quate drainage. 6. To determine the condition of a road, a set of criteria is established and standardized: (a) visual observation based on the density of typical surface defects and failures; (b) identification and nature of drainage problems; conditions of the - shoulders and slopes; (c) measurement of the deflection to detect potential structural problems (to be identified by field and laboratory tests) according to the class of traffic; and (d) roughness measurements to further estimate the vehicle operating costs of road users. The execution of the above activities would be programed and coordinated by GAM. 7. The classification of the condition of a road would be supported by a diagnosis considering the various criteria (para 6) and by the class of traffic (para 2). At this stage, and before a design solution is decided, a technical explanation of the observed failures would be provided.  - 74 - ANNEX7 Page 3 C. Maintenance Policy 8. Preventive maintenance is the long-term (10 years) maintenance policy objective. Preventive maintenance is based on the assumptions that: (a) it is less expensive to prevent than to cure (maintenance is expensive in the long run when it is not done in a timely manner); and that (b) adequate maintenance is always economically justified (adequate means that the level of maintenance is adapted to the class of traffic). The use of HDM would assist in refining the concept of adequacy. 9. Four types of maintenance are scheduled: (a) Preventive maintenance is addressed to Class A roads (good condition) and is based on a high level of routine maintenance plus periodic overlay or resealing (i.e., when the surface condition is likely to go down to Class B), at about seven years frequency. Class B roads are also eligible for preventive maintenance but they should first receive, at least, a strengthening overlay. (b) Rehabilitation would be required for Class C and Class D to upgrade them to Class A. In the long-term, rehabilitation should be consid- ered as exceptional. (c) Curative maintenance is addressed to Class C roads to avoid them going down to Class D when, because of budgetary constraints, reha- bilitation is postponed. Curative maintenance means a minimum level of routine maintenance with emphasis on pot hole patching and drainage cleaning. (d) Special maintenance means interventions to resolve emergency problems, such as removing heavy landslides, reopening roads to traffic, and minimum actions on Class D roads to keep them open to traffic until they can be rehabilitated. D. Planning and Programing 10. A typical plan of action has been established to implement the main- tenance policy: Year N-2 The district engineers will present their proposals for year N, based on the highway condition (para 6), per section of about 25 km; they will be assisted by GAM (Grupo de Apoyo de Mantenimiento). MOPT's Highway Directorate will review the proposals and prepare a draft plan for year N.  - 75 - ANNEX 2 Page 4 Year N-1 The district engineers will prepare the technical projects and programing i.e., (i) for routine maintenance by force account: needs in materials, equipment, timing, etc.; and (ii) for rehabilitation or overlays by contract: final design and specifications. MOPT's Highway Directorate and GAM will assist them and will prepare a draft programing and budgeting for year N. HDM may be used by the Highway Evaluation Unit (Highway Programing Division) to analyze the various maintenance policies, taking into account, particularly, budget constraints. Year N Implementation of the scheduled program. Year N+ 1 etc. Preventive maintenance by force account or contract. 11. The annual planning of maintenance will also take into account the following five categories: Category I - Roads under construction for which preventive maintenance will be required upon completion. Category II - Existing roads for which new alignment or major improve- ments are scheduled within two years, for instance gravel roads to be paved. Category III - Existing paved roads that will receive preventive mainte- nance, or rehabilitation or curative maintenance. Category IV - Other paved roads. Category V - Unpaved roads. The identification of Category II related to year N will be established by year N-2 by the -Highway Directorate and forwarded to the Districts. 12. To achieve a consistent highway maintenance policy and to initiate the creation of a data bank, the identification of highway sections, through a systematic referencing, is required. A draft regulation (following Regulations 12866 and 4550 dated December 11, 1979 and May 14, 1980 establishing the Highway coding system) will be adopted and followed by the installation of concrete reference posts. February 1982  - 76 - ANNEX 3 Page 1 COLOMBIA HIGHWAY SECTOR PROJECT Outline Terms of Reference for Technical Assistance for Training of Road and Mechanical Maintenance Personnel I. OBJECTIVES 1. The objectives of the technical assistance for training will consist of assisting MOPT in: (a) strengthening the existing Training Section within MOPT; (b) implementing a training program aimed at producing qualified personnel required to carry out road maintenance operations; and (c) determining training courses and programs which can be con- ducted by other institutions and ensuring their implementation. II. SCOPE AND SERVICES A. General 2. Technical assistance will consist of a training adviser (expatriate). responsible for implementing and supervising all elements of the training component. He will coordinate his work with MOPT senior staff responsible for road and equipment maintenance and will be accountable to the Director of Highways. The program, which aims at improving the productivity of some 3,000 personnel, would strengthen and expand ongoing training activities and would be especially addressed to road supervisors, equipment operators, drivers, mechanics, storekeepers and certain administrative staff. B. Expansion of Existing Training Organization and Physical Training Facilities 3. After reviewing and consolidating training activities recently carried out by INGEROUTE's specialist, the training adviser will: (a) assist MOPT in developing training policies and in upgrading the Selection and Training Section to enable it to carry out planning, implementation and supervision of present and future training activities;  - 77 - ANNEX 3 Page 2 (b) review plans for physical training facilities tentatively agreed between MOPT and IBRD and suggest appropriate changes, if any; and (c) estimate costs of setting up and running two regional training centers (Medellin and Palmira), including payment of per diem for trainees and/or instructors. C. Training Program 4. Upon completion of the review under paragraph 3, expected to take about 10 to 12 weeks, the training adviser will prepare a detailed training program to meet personnel needs and will, inter alia: (a) agree with MOPT upon a list of personnel requiring training, retraining and upgrading for a four-year program. This list should be broken down by Districts, categories/levels, year and priority; (b) develop a phased-program for different categories and levels of personnel, taking into consideration MOPT's manpower require- ments and budgetary constraints. The program could be presented along the following lines: (i) a two-year Priority Program to start as soon as resources become available under tha Highway Sector Project; and (ii) a Regular Program which would follow and consolidate action taken during the Priority Program. The programs would be updated annually in consultation with MOPT and the Bank; (c) prepare the syllabi and relevant courses and procure suitable already made courses, especially self-instructional and audio-visual ones; (d) assist in selecting instructors required (MOPT and technical assistance), bearing in mind that MOPT instructors would have to carry out most of the training activities starting the second (or third) year of the program; (e) assist in purchasing training equipment and materials (including heavy equipment and audio visual aids) required; (f) determine training courses/programs to be carried out by "others" (SENA, Suppliers, ESAP, etc.) and, provided they fit into the overall agreed program, ensure their implementation;  - 78 - ANNEX 3 Page 3 (g) design a system to monitor training programs while they are being carried out and, later, to evaluate them after they have been completed; (h) recommend any other action considered necessary for the satisfactory implementation of training; and (i) estimate annual recurrent expenditures for program implementation. D. Implementation of the Training Program 5. Following MOPT's agreement on the training program which should be prepared within eight weeks, the training adviser will: (a) assist in implementing the agreed phased program and, at the same time, ensure on-the-job training for MOPT's counterparts; (b) organize and supervise training programs carried out by "others" (SENA, Suppliers, ESAP, etc.); (c) conduct periodic seminars on training in general and, more specifically,-on the programs proposed for MOPT maintenance personnel. Headquarters senior staff, district engineers and other field supervisors are expected to participate in these seminars; and (d) carry out any other action considered necessary for the satisfactory implementation of training. III. SCHEDULE FOR REPORTING 6. The training adviser will be responsible for preparing the following reports (in Spanish) within the time limits specified: (a) a short inception report within four months of the starting date, detailing training needs and recommendations for a four- year program to meet these needs, including resources required to implement the program. The report will contain a concise first chapter summarizing the contents; (b) quarterly progress reports describing the work carried out during the previous three months; the progress report will identify actual and anticipated difficulties and delays in implementing the training program and suggest remedies; (c) a brief report on personnel policies and recommended improvements;  - 79 - ANNEX 3 Page 4 (d) two months prior to the training adviser's completion of service, a short draft final report will be prepared summarizing (i) work program; (ii) progress made; (iii) initial benefits from training program; (iv) areas where progress bas been unsatisfactory; and (v) recommendations for further action; (e) a final report within one month of receipt of comments on the draft final report from MOPT; and (f) other reports as may be reasonably requested by MOPT. Two copies of all reports will be sent to the Bank as soon as issued for information. IV. MOPT CONTRIBUTION 7. MOPT will: (a) provide adequate number of qualified personnel to be assigned as counterparts to Colombian instructors to be recruited outside MOPT; (b) make adequate arrangements for the selection of suitable staff to be trained as instructors; (c) make adequate arrangements for releasing existing and future staff, in a timely manner, to attend agreed training programs; (d) provide classrooms and school workshops for the training of mechanical staff at Bucaramanga, Fontinbon, Medellin and Palmira; and (e) provide training equipment and materials and spare parts as required for program implementation. October 1981  - 80 - ANNEX 4 Page 1 COLOMBIA HIGHWAY SECTOR PROJECT Outline Terms of Reference for a Study of Trucking Regulation and Services I. INTRODUCTION 1. Colombia's transport system moves over 21.5 billion ton-km of inter-city freight annually. This traffic has been growing at an average rate of 5.0% p.a. over the last 10 years. Road transport continuously in- creased its share, which is now about 80% of the total, at the expense of both rail and river transport. The trucking industry is in the hands of only 400 licensed companies, most of which own very few trucks and sub- contract to affiliated owner-operators. The restrictive regulation, together with the high capital cost of vehicles and their inefficient utilization, have resulted in current high transport costs. 2. The Study will review Government policies and regulation for road and intermodal freight transport, assess their impact on the efficiency of freight transport and propose a comprehensive program, including regulatory, operational, investment and possibly institutional measures, to increase the efficiency of the road freight transport industry and to foster, where appropriate, development of intermodal freight transport services. Among the various strategies possible, emphasis will be put on the simplification of the regulation and promotion of commercial alternatives, particularly the development of a system of intermodal freight terminals aimed at improved consolidation of freight and better coordination between modes, and at providing trucking companies and owner-operators with the services they require. II. ORGANIZATION OF THE STUDY 3. The study will be carried out in two phases. Phase one of the Study will review Government policies and the regulatory framework of road and intermodal freight transport and define the above-mentioned program of measures in sufficient detail to propose a preliminary economic justifi- cation of the proposed investments and an assessment of the impact of other proposed measures. It will also provide a detailed action plan for their implementation. Phase two will carry out detailed feasibility studies for the proposed alternatives. The present Terms of Reference refer to Phase one only; the Terms of Reference for Phase two of the study will be prepared on the basis of the findings of Phase one. 4. The Study will be contracted by MOPT to a consulting firm with a high level of international experience in transport planning, management and organization and particularly in the trucking industry. Responsibility for its supervision is vested in a task force under the leadership of the Head of MOPT' Sector Planning Office, also acting as permanent secretariat to the National Transport Council (NTC).  -81- ANNEX 4 Page 2 5. The Study will be ccmplemented by a program of document facilitation. MOPT will seek the expertise of the United Nations Document Facilitation Program (FALPRO) of Geneva, Switzerland, to carry out this program, under sepa- rate Terms of Reference, but under the supervision of the same task force. In the course of the Study, the Consultant will coordinate his work with the above program and should advise the Head of the task force on any divergencies which may arise. III. OBJECTIVE AND SCOPE OF PHASE ONE 6. The main objective of Phase One of the Study would be to recommend measures for improving trucking services and increasing the efficiency of road transportation in Colombia. 7. The scope of Phase One would cover the following: (a) review the regulation of road freight transport, in particular the role of INTRA, the role of the national bill of lading (Planilla Unica de Carga), the entry into the industry (company licensing and affil- iation of owner-operators) and the limitations on the growth of the vehicle fleet, and recommend measures for improvements or changes; (b) review the pricing of road freight transport services, in partic- ular the current system of road user charges and its impact on modal distributionj and propose solutions to reduce existing distortions; (c) assess current transport services for major inter-city commodity movements, identifying inefficiencies and potential, and recommend improvements in their efficiency by, inter alia, investigating the possi- bility of consolidation and unitization of cargoes to achieve better truck utilization and greater competition, and, in a longer term, develop intermodal services where appropriate; and (d) determine the needs for freight consolidation and other services to the trucking industry, in particular to the owner-operators, identify the necessary investments and other measures required and assess, on a preliminary basis, their economic justification. 8. The Consultant shall make recommendations for an overall policy and for specific strategies in the above-mentioned areas, and prepare a detailed action plan for the implementation of the overall program of measures, including financing and institutional arrangements as required. IV. OUTLINE OF THE SCOPE OF WORK OF PHASE ONE A. Review of the Regulation of Road Freight Transport 9. The Consultant shall analyze in depth the regulatory framework of road freight transport in Colombia, the role of INTRA, and the impact of the re- gulation on the present situation of the road freight transport industry.  -82 - ANNEX 4 Page 3 10. When analyzing the regulatory framework, the Consultant shall: (a) examine the impact on the road transport industry of the licensing system for companies (company qualification system) developed by INTRA, assess the need for such a system and define potential com-- mercial alternatives as a substitute to the legal form of "affilia- tion," keeping in mind the need for greater competition among truckers; (b) analyze the function and purpose of the National Bill of Lading and its present role in the road freight transport market, and evaluaite the statistical potential of the National Bill of Lading; and (c) analyze the present condition and age of the truck fleet and the adequacy between existing capacity and transport demand, and evaluate the impact of INTRA's control of fleet growth (vehicle imports). 11. When analyzing the role of INTRA, the Consultant shall: (a) review the purpose and role of this institution; (b) review the adequacy of its functions; (c) review the efficiency of its operations; (d) analyze INTRA's overheads, administration and finances. 12. When reviewing the impact of the regulation on the organization of road freight transport in Colombia, the Consultant will propose alternative measures aiming at replacing the legal controls, through private sector initiative, within the overall scope and spirit of the Transport Law of 1970. B. Review of road user charges and transport pricing policy 13. The Consultant shall review the system of road user charges and cur- rent transport pricing policy, emphasizing their implications on intermodal distribution of freight in the corridors studied (para 14). Economic distor- tions are to be identified and evaluated, and recommendations made for corrective actions to be taken. The main areas of study will be: (a) the efficiency of the road user tax system in covering at least short run marginal costs attributable to each category of users (both macro-economic approach through total taxes paid per traffic unit and micro-economic approach through vehicle operating costs should bes considered). (b) the pricing of petroleum products, and possibly of other major imputs to the transport sector, compared to their opportunity costs; C. Evaluation of current transport services and potential improvements 14. The Consultant shall first review the basic tables of inter-depart- mental commodity movements prepared by SPO, and the national transport system, to  - 83- ANNEX 4 Page 4 determine what commodities and which transport corridors should be studied in evaluating the potential for improving the efficiency of transport services. Existing transport services on the selected corridors shall then be carefully analyzed in terms of equipment characteristics and operating ratios, transit time and reliability, tariffs and operating costs. This analysis will be based on the information available from various sources, mainly in SPO, INTRA and CFT, to be consolidated and supplemented, as necessary, by the Consultant's field interviews and complementary surveys. This analysis should lead to a detailed assessment of capacity constraints, operational inefficiencies, technological deficiencies, organizational and regulatory constraints for commodity movements in specific corridors and nationwide, and to a clear under- standing of current modal distribution of cargoes. 15. The Consultant shall then evaluate the potential for improved consol- idation of cargoes and better unitization, and assess implications on the ef- ficiency of road freight transport services. The assessment will cover both shippers' costs (including time savings and reduced losses and damages) which determine modal choice, and economic benefits (in particular foreign exchange and energy savings), which could accrue to the country through proper use of the truck fleet and intermodal technology. Among unitization possibilities, consideration should be given to the development of inland transport of containerized cargoes (the consultant will find a useful analysis of container- ization of external trade in the recent Colombia Port Modernization Study). Other appropriate technologies should also be investigated and evaluated. D. Identification of necessary services to the trucking industry 16. On the basis of the above analysis, the Consultant shall determine the needs for consolidation/breakdown and unitization services and for modal inter- changes. These will be quantified in terms of commodity volumes at every mode of the transport system where they are expected to be sufficient to justify the development of a freight-consolidation center. 17. At each of the selected locations, the Consultant will, through appropriate field investigations, make a preliminary analysis of the market of the services to be offered to the trucking industry, such as: cargo warehousing and handling, truck parking and maintenance facilities to drivers and to transport companies, insurance, freight-forwarding, return load centers, leasing services (especially trailers), radio-telecommunications, etc. This preliminary market analysis will allow the Consultant to identify a system of services to the trucking industry, predimension the required facilities, determine alternative locations, draw preliminary development schemes of the system and the facilities and estimate investment and operating costs in sufficient detail to carry out a prefeasibility study. 18. Against the economic costs for developing and operating the above system, the economic benefits to be computed shall cover, in particular:  - 84 - ANNEX 4 Page 5 (a) the improved efficiency of the road transport industry to be achieved through higher load factors and better turnarounds of the vehicles by facilitation of return load availability for the line-haul portion of the movement, by use of appropriate vehicles for pickup and delivery in urban areas, and by provision of adequate services to trucks, drivers and companies; (b) the improved efficiency and consequent development of above- identified intermodal transport services, resulting from freight consolidation and unitization, availability of modal interchange facilities and simplification of documentation; and (c) the impact of relocalizing transport installations and related services outside city centers on urban congestion and urban growth. In addition, social benefits to the road transport industry, to accrue through supporting installations to truckers, should be clearly identified. 19. The prefeasibility study shall cover the entire proposed system of services and will be aimed at recommending the most appropriate investment program. In all cases, economic criteria (benefit-cost ratios, net present values of the investment and economic internal rate of return) shall be computed and savings on fuel and foreign exchange identified. Their sensitivity to such uncertain variables as vehicle load factors, traffic diversions to the railway and reduced urban congestion shall also be assessed. 20. Institutional and financing alternatives for development of the proposed system and for their management shall be defined and discussed. It: is anticipated that the Government will receive a significant support from the private sector and from municipal and departmental agencies for freight- consolidation projects in areas where the needs are more acute. The Consultant shall recommend, for each category of investment, the appropriate funding and cost recovery system. The Consultant shall determine the forms of participation of the public entities and private industry in the management of the facilities with the aim of achieving efficient operation. 21. The municipalities of Cali and Buenaventura, supported by central Government agencies and private companies, are well advanced in the prepara-- tion of a feasibility study for a freight terminal in Cali with an accessoriLal facility in Buenaventura. So far, the study has focused on relocalizing trans- port facilities and activities outside the congested urban centers and, for Cali, on providing ample warehousing space to the industry and trade sectors. The potential for freight consolidation, unitization, and freight-forwarding, and for modal interchanges has not been sufficiently analyzed. The design of the project, its financing and management will have to be revised in line with the findings of the above analyses. The Consultant shall, through SP0, make detailed recommendations for CENCAR, S.A., a semi-public company created to study, promote snd develop these facilities, to review the project accordingly.  - 85- ANNEX 4 Page 6 22. The Consultant shall finally recommend the preparation of each separate subproject. He shall propose terms of reference for carrying out the necessary traffic and market surveys, and for planning and preliminary designs of the necessary facilities. He shall define the methodology to be followed for the economic and financial evaluations of the subprojects and propose formats Eor the presentation of the feasibility study reports to be prepared in Phase Two. V. RFPORTING REQUIREMENTS 23. The Consultant shall be responsible for preparing the following reports: (a) Inception Report: The inception report will summarize the Consultant's findings on the identification of pertinent commodity movements and transport corridors on which the study will focus (para 13), and list the supplementary data required for the subsequent tasks; this report is to be submitted at the end of the second month. (b) Interim Report: The interim report will summarize the Consultant's findings on the review of the regulation and road user charges and on the evaluation of current transport services and possible technology improvements (para 14); this report will be submitted at the end of the third month. (c) Recommendations on CENCAR Report: The Consultant will make detailed recommendations to SPO, focusing on integrating the Cali-Buenaventura project within an overall intermodal strategy; this report should be submitted at the end of the fourth month. (d) Draft Final Report: The draft final report will present the Consultant's analyses and findings, the proposed overall policy, strategies, investment program and other measures covered in the above scope of work, a detailed plan of action for their implementa- tion and draft teams of reference for the Phase Two study. This report is to be submitted at the end of the sixth month. (e) Final Report: The Final Report will be a revised version of the draft final report to include the Government's comments; it is to be submitted one month after receiving the Government's comments. VI. COST ESTIMATE 24. Phase One of the study is estimated to require about 20 man-months at an average monthly rate of US$10,000 and an amount of about US$100,000 for operational expenses; the total cost of Phase One is therefore estimated at US$300,000. The extent of Phase Two is not clearly defined yet; its cost is tentatively estimated at the same amount.  - 86 - ANNEX 5 Page 1 COLOMBIA HIGHWAY SECTOR PROJECT Summary Data Sheets for Candidate Subproject 1. Basic Data Road OIBA - VADO REAL Existing Proposed Rehabilitation x Length (km) 29.0 29.0 Paving Cross section: Riding surface (m) 7.2 7.2 Shoulders (m) 1.0 1.0 Pavement A.C A.C + 5 cm 2. Traffic car bus C2 C3 C5 Total Base Year (1979) 378 157 692 148 148 1523 Growth/Year 5% until 1986 and 4% onwards 3. Vehicle Operating Cost 1/ (US$/km) 2/ (1985) car bus C2 C3 C5 Roughness Without works 0.251 0.342 0.664 1.278 1.848 9000 With works 0.131 0.246 0.418 0.754 1.048 2098 4. Cost Estimates US$2.6 million 2/ (July 1981) 5. Economic Data Economic Rate of Return: 228% ERR with 50% Increase in Cost: 165% 6. Tender Tender May 1981 Completion Time 18 months Tentative Budget Allocation 1982 0.42 1983 1.68 1984 0.50 2.60 1/ Economic VOC excluding passengers time values 2/ US$1 = Col$ 55  - 87 - ANNEX 5 Page 2 7. Technical Description The existing road located in hilly terrain already has a danger- 7% surface cracking, a deflection of about 61/100 mm, and a poor drainage system. The work consists of improving superficial and deep drainage, carrying out an overlay ranging from 0 to 12 cm (average 5 cm), and completing reconstruction of short sections of the existing pavement. February 1982  88 ANNEX 5 Page 3 COLOMBIA HIGHWAY SECTOR PROJECT Summary Data Sheets for Candidate Subproject 1. Basic Data Road 4-45 Puente Boyaca - El Infierno Existing Proposed Rehabilitation Length (km) 22.0 22.0 Paving x Cross Section: Riding Surface (m) 6.9 6.0 Shoulders (m) - 0.5 Pavement GR CA 2. Traffic car bus C2 C3 C5 Total Base Year (1980) 97 24 202 23 __ 346 Growth/Year 5% until 1986 and 4% onwards 3. Vehicle Operating Cost 1/ (US$/km) 2/ (1985) car bus C2 C3 C5 Roughness Without works 0.197 0.337 0.579 1.075 1.525 5870 (aver.) With works 0.128 0.258 0.434 0.793 1.097 2010 4. Cost Estimates US$1.98 million 2/ (July 1981) 5. Economic Data Economic Rate of Return 35% EER with 20% Traffic Decrease (Base Year) and 50% Increase in Investment Cost 18% 6. Tender Tentative Tender March 1982 Completion Time 22 months Tentative Budget Allocation 1982 0.30 1983 1.00 1984 0.68 1.98 7. Technical Description Road located in mountainous terrain (alti- tude 2,950 m) average gradient: 4% 1/ Economic VOC excluding passengers time values 2/ US$1 - Col$ 55  - 89 - ANNEX 6 Page 1 COLOMBIA HIGHWAY SECTOR PROJECT Selected Documents and Data Available in the Project File A. General Reports and Studies on the Sector and Subsector A.1 Analysis of the Energy Sector, MME, 1980 A.2 National Transport Plan (Main Report), MOPT, 1980 A.3 Projections of Gasoline Tax Revenues for the National Highway Fund MOPT, 1981 A.4 Report of Activities 1978/1979, Institute for Public Works, Boyaca, 1979 A.5 Colombia - Appraisal of Highway Maintenance by Contract, MOPT, October 1980 A.6 Highway Toll System in Colombia, MOPT, January 1980 A.7 Automatic Traffic Counting, MOPT, 1979 A.8 Traffic Counting, MOPT, 1979 A.9 Traffic Counting, MOPT, 1980 B. General Reports and Studies Related to the Project B.1 Pavement Management System (Detailed Guidelines, Aug. 1981) B.2 MOPT's Districts, Elements for a Diagnostic (1980) B.3 Preventive Maintenance (Guidelines Dec. 4, 1980) B.4 Highway Maintenance Organization (Nov. 19, 1980) B.5 National Highway Network (Maps per District, March 1980) B.6 Equipment Management System Volume 1, 2 and 3, (Draft, Dec. 1980) B.7 Spare Parts Coding System B.8 Organization of the Store Houses (draft, Dec. 1980) B.9 The Methodology for a Comprehensive Referencing System, January 12, 1981  - 90 - ANNEX 6 Page 2 B.10 MOPT Training Organization (3 volumes) Nov., 1980; Dec., 1980; Jan. 1981 B.ll Road Safety, MOPT 1981 B.12 Proposal for a Research and Postgraduate Program, National University of Colombia at Bogota, July 1981 B.13 Proposal for the Establishment of a Transport Studies Center, Pedagogic and Technological University of Colombia at Tunja, Aug. 1981 B.14 Aide Memoire March 14, 1981 B.15 Memorandum of Understanding, August 13, 1981 B.16 Working Paper on Road Traffic Safety B.17 Gasoline Tax Projections, January 1982 B.18 Aide Memoire January 21, 1982 C. Highway Design and Maintenance Model C.1 Characteristics of the New Computer System to be Installed at MOPT, Bogota, IHM, May 20, 1980. C.2 Preliminary HDM Runs - Paving, Bogota, June 5, 1981 - Rehabilitation, Bogota, June 4, 1981 C.3 Revised HDM Runs - Paving, Bogota, June 12, 1981 - Rehabilitation, Bogota, June 12, 1981 - Rehabilitation (Special), Bogota, June 12, 1981 C.4 Appraisal HDM Runs - Paving, Bogota, July 30, 1981 - Rehabilitation (Low Maintenance), Bogota, July 30, 1981 - Rehabilitation (High Maintenance), Bogota, July 30, 1981 C.5 Magnetic Tape - data files for C.3 recorded by MOPT, July 1981 C.6 Summary of INPUT/OUTPUT of HDM Appraisal Runs, Bogota, Aug. 1981 Table 1 - Link Descriptions Table 2 - Summary of Evaluation Table 3 - Existing Link Characteristics Table 4 - Project Descriptions Table 5 - Traffic Composition Table 6 - Maintenance Standards Table 7 - Unit Costs of Maintenance Table 8 - Vehicle Characteristics Table 9 - Examples of Vehicle Operating Costs Table 10 - Results of the Evaluation Table 11 - Composition of Rehabilitation Runs Table 12 - Rehabilitation - Roughness Values without Project Table 13 - Project Costs Vs. NPV Comments on the Tables C.7 Report by Stephen Stares - Wilbur Smith and Associates (Preliminary HDM Runs), June 15, 1981.  MINISTE RIO DE OBRAS PUBLICAS Y TRANSPORTE OPGAOSMOS DESCENTRALIZACOS ORNNi"AMA I~~~~~~~~~~~~ E I r---MItII~~~-~~-,__-- --- - -___~ UU11STRO c..~~~ 5*5S00555 SE 005p0S5j500 ML TRONNSPOfSICMEO~IALELA ONE 55a:V~~SE ClillLEMN LAFTROI LI EIE~~~~~~~~~~~~~~~~~~~~~~~55Mse. .0,sm scnsIo,. 5 sti. 55555 sICCImS .DC [1c5in sr^oo~~~~~~~~~~~~~~~~~~~5 |5 50" 54 co - _5 I6 SC 0.~~~~~~~~~~~~~~~~~~~~~ 1.0YECT 0 S lcciom Tl 0-.cr0o1170 daMoy.14 do1980 R IEO^Out dO AutOrud,o I _CEiid I STR0 RO 6~d.ATCMISCI i -- ------ -- 'Uru,I.d do trnbO, do -60.K rnstrr