Papua New Guinea - Transport Improvement Project

Dommsa of The World Bank FOR OmCIAL USE ONLY Report No. 6107-PNG STAFF APPRAISAL REPORT PAPUA NEW GUINEA TRANSPORT IMPROVEMENT PROJECT June 3, 1986 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 discloed without World Bank authorization.  CURRENCY EQUIVALENt Currency Unit - Papua New Guinea Kina (K) US$1.00 = K 1.00 K 1.00 = US$ 1.00 (As of December 1985) ABBREVIATIONS AADT - Annual Average Daily Traffic ADAB - Australian Development Assistance Bureau ADB - Asian Development Bank BPC - Budget Priority Committee BRRP - Bridge Rehabilitation and Replacement Program DCAT - Department of Civil Aviation and Tourism DT - Department of Transport DW - Department of Works EER - Economic Rate of Return FA - Force Account ICB - International Competitive Bidding LCB - Local Competitive Bidding NPO - National Planning Office PMFA - Project Managed Force Account PNG - Papua New Guinea PMU - Program Management Unit PTB - Plant and Transport Branch PWMO - Provincial Works Manager Office RMS - Road Maintenance Study RMU - Road Maintenance Unit RWHO - Regional Works Manager Office SDTS - Staff Development Training Section TIPS - Transport Investment Program Study TOPS - Transport Operation Policy Study VOC - Vehicle Operating Cost VPD - Vehicle Per Day FISCAL YEAR January 1 to December 31  FOR OMCLPAL USE ONLY PAPUA NEW GUINEA TRANSPORT IMPROVEMENT PROJECT Loan and Project Summary Borrower: Independent State of Papua New Guinea Amount: US$45.5 million equivalent Terms: Repayable in 20 years, including five years of grace, at the standard variable rate. Project Description: The objectives of the project are to: (a) improve land trans- port through reconstruction, upgrading and maintenance of national roads; (b) enhance improvement of air transport through equipment replacement, improved safety standards and periodic maintenance; (c) improve efficiency of road mainte- nance through provision of road maintenance equipment and materials; and (d) strengthen institution building and improve the domestic construction industry through provision of technical advisory services and training of local staff. The project includes: (a) reconstruction and upgrading of about 80 km of national roads; (b) rehabilitation and replacement of about 50 bridges totaling about 1,100 linear meters; (c) regravelling of about 500 km of national gravel roads; (d) provision of road maintenance equipment and materials; (e) replacement of navigational, meteorological and communication equipment at 14 national airports and resealing/regravelling of runways, taxiways and aprons at 16 airports; (f) technical assistance to Department of Works (DW), Department of Transport (DT) and Department of Civil Aviation and Tourism (DCAT) to implement the proposed project and prepare economic and engineering studies for future projects; and (g) on-the-job, local and overseas training of DW, DT and DCAT staff. The project will reduce vehicle operating costs, improve safety at airports and strengthen DW, DT and DCAT. The main project risks are possible delays in imptementing civil works components because of land acquisition problems and delays in meeting policy and institutional objectives because of slow recruitment of necessary e-.patriate staff. To reduce these risks, the Government agreed to make available the right-of- way prior to the bid invitation. The project coordinator was appointed prior to negotiations to ensure the timely appoint- ments of technical assistance staff and counterparts to be trained. This document has a restricted distribution and may be used by recipients only in the performance of their offcial dutie. Its contents may not otherwise be disclosed without World Bnlk authortion.  - ii - Estimated Costs Local Foreign Total ---US$ million-- A. Civil Works- National road construction and upgrading 4.6 8.7 13.3 Bridge rehabilitation and replacement 2.1 4.9 7.0 National road regravelling 2.0 3.0 5.0 Resealing/regravelling of runways, taxiways and aprons 0.8 2.0 2.8 R. Equipment and Materials Road maintenance equipment and materials - 5.3 5.3 Airport navigation, meteorological and communication equipment /a - 3.1 3.1 C. Technical Assistance and Training 1.5 7.3 8.8 D. Right-of-Way 0.4 - 0.4 Project Base Cost 11.4 34.3 45.7 E. Coatingencies Physical contingencies 1.4 4.2 5.6 Price contingencies 3.3 10.1 13.4 Total Project Cost lb 16.1 48.6 64.7 Financing Plan IBRD 45.5 45.5 ADAB - 3.1 3.1 Government 16.1 - 16.1 Total 16.1 48.6 64.7 Estimated Disbursements: Bank FY 1987 1988 1989 1990 1991 1992 - --- (MS$ million) - - Annual 2.7 7.8 13.4 12.4 7.0 2.2 Cumulative 2.7 10.5 23.9 36.3 43.3 45.5 Rate of Return: 34X Staff Appraisal Report No. 195533 dated June 3, 1986 Mbp: IBRD 19553 /a To be financied by ADAB. /b As of January 1986, and include US$6.6 million for taxes and duties.  - iii - PAPiUA NEW GUINEA TRANSPORT IMPROVEMENT PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I* TRANSPORT SECTOR .............................................. 1 A. Economic Setting .................. * 1 Bo Transport System 2.................. ,. 2 C. Government Expenditures on Transport Infrastructure ....... 4 D. Policy, Planning and Coordination ......................... 4 E. Sector Issues and Bank Strategy ........................... 5 P. Previous Bank Financed Projects ........................... 6 II. THE ROADS ..........ee@99..9990999**ege*9999.9*9ee999*eee9e@e 7 A. Tref Network ...... .......................... .. .............. 7 Be Traffic s