Sri Lanka - Colombo Urban Transport Project

Docamt of The World Bank FOR OFFICIAL USE ONLY Rmt No. P-5939-CE IN WIIRD SAND RE TMHNDATIOK OF THE PRESIDENT OF T'fi IUENMTTIONAL DEVELOPMT ASSOCIATION TO THIE EXECUTIVE DIRCTORS ONA PROPOSED CREDIT OF SDR 14.4 MILLION TO THE DE(OCRATIC SOCIALIST REPUBLIC OF SRI LIAN FOR A COLOMBO 1RBA TRANSPORT PROJECT APRL 22, 1993 *~~ . Tiis document has a restricted distribution and may be used by recipients oly In the performnsCe of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EOUIVALEITS (as of December 1992) Currene.y Unit - Sri Lankan Rupee SR. 1 Rupee (SRs) - 100 cents - US$0.023 SR. 44.0 - US$1.00 0 WEIGHTS AND MEASURES 1 m - water (lumetcr - 3.28 feet) 1 mt m metric tone (1,000 kg - 2,205 lb.) 1 km - kilometer (1 kilometer - 0.62 miles) kM2 s square kilometer (1 km2 - 0.368 square miles) 1 kg - kilogram (2.2 lb.) ABBREVIATIONS AND ACRONYMS CEA - Central Envirormental Authority CIDA - Canadian International Development Agency CMC - Colombo Municipal Council 0CMKA - Greater Colombo Metropolitan Area GOSL - Government of Sri Lanka MTH - Ministry of Transport and Highways ETC - National Transport Commission SLR - Sri Lanka Railways TSM - Traffic System Management TSPC - Transport Studies and Planning Center UDA - Urban Development Authority UNDP - United Nations Development Program FISCA EAR January 1 to December 31  FOR OMCLAL USE ONLY SRII COLOMBO URBAN TRANSPORT PROJECT Credit and Project Sumary Borrower: Democratic Socialist Republic of Sri Lanka (GOSL) Beneficiaries: Ministry of Transport and Highways (NTH) Colombo Municipal Council (CMC) Sri Lanka Railways (SLR) Central Environmental Authority (CEA) Amount: SDR 14.4 million (US$20.0 million equivalent) Terms: Standard, with 40 years maturity Onlendina Terms: From GOSL to the beneficiaries on a grant basis Financinz Plan: Local Foreign Currency Currency Total Z --(US$ million)------- IDA 5.5 14.5 20.0 79.0 UNDP 0.2 0.3 0.5 2.0 CANADA 0.0 0.5 0.5 2.0 GOSL 4.3 0.0 4.3 17.0 TOTAL 10.0 15.3 25.3 100.0 Economic Rate of Return: 26% Staff Appraisal Report: Report No. 11375-CE Maps: Colombo Transport Network - IBRD No. 24659 Colombo Project Area - IBRD No. 24660 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. [ts contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AN4 RECOIOENDATION OF THE PRESIDENT OF THE INTERNAi'ORAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA FOR A COLONBO URBAN TRANSPORT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed development credit to the Democratic Socialist Republic of Sri Lanka for SDR 14.4 million (US$20.0 million equivalent) on standard IDA terms with a maturity of 40 years to help finance a Colombo Urban Transport Project. The proposed credit would be passed on from the Government of Sri Lanka (GOSL) to the Ministry of Transport and Highways (MTI), Colombo Municipal Council (CNC), Sri Lanka Railways (SLR) and Central Environmental Authority (CEA) on a grant basis. The Government will bear the foreign exchange risks on the credit. 2. Sector Backaround. The Greater Colombo Metropolitan Area (GCNA) contains about four million inhabitants, comprising a quarter of Sri Lanka's total population. Although not reflected in official statistics, which do not count suburbanization of Colombo as urban growth, the a:nual population growth rate for the GCMA during the 1980. is estimatGd at 5Z. As a part of GGSL's liberalized growth strategy, two large Export Processing Zones outside Colombo were established in 1978, reinforcing the primacy of the GCMA. Agglomeration economies, including the presence of Goveranent offices and the country's only international port contiguous to the city center, have fueled demand for urban transport, acting both as traffic generators and attractors. With expanding industrial activities, growing population and rising incomes, traffic volumes in GCNA are increasing at 6-8Z per annum. This growth has led to severe strain on already run-down transport infrastructure and the emergence of traffic bottlenecks and acute congestion in Central Colombo. However, funding constraints have deterred new infrastructure investments that are needed to keep pace with rising urban travel demand, and also have adversely affected the maintenance and rehabilitation of roads, railway lines, buses and other related service facilities. The road surfaces are in a poor state of repair, sidewalks almost non-existent and traffic movements constrained by infringement on road space by shops, slow moving push-carts, teaming pedestrian flows, inadequate intersection designs, primitive traffic control devices and disorganized bus passenger loading and discharging. The railway could play a larger role in providing efficient commuter services in the GCMA, thereby reducing the pressure on road passenger services if it could shed its cuimbersome bureaucratic management structure and modernize its archaic operating methods. 3. In Central Colombo, traffic congestion has greatly increased travel times, vehicle operating costs and accidents. The increase in traffic density has also raised air pollution levels in the city, posing a potential threat to public health. Transport bottlenecks impose high costs on commercial and industrial establishments located in the GCMA, reducing their competitiveness and productivity in relation to units located in other major production and export centers of Asia. Because the GCMA generates about 421 of the country's GNP, and the GOSL's export- oriented industrial strategy reinforces the pro-eminence of the GCMA, the limitations of the transport sector have large economic and social cost implications for the country as a whole. Thus, the rehabilitation of existing deteriorated infrastructure and implementation of well-conceived traffic management schemes require immediate action for short-term relief. In the long-term, GOSL needs to formulate a viable urban transport strategy in order to avoid Colombo's  - 2 - traffic congestion reaching the levels experienced in cities like Bangkok or Manila. IDA's strategy is to support these actions through the proposee project which is an important first step. 4. Lessons from Previous Bank/IDA Operations. The proposed project would be the first IDA-financed urban transport project. Howevers IDA has financed operations in both the urban and transport sectors."1 The relevant lessons from these projects are: (a) detailed engineering and designs should be completed for all relevant project components to avoid large cost overruns, and ensure sufficient funds for completion of works; (b) the project design and procurement methods should not be overly complex in order to prevent a long implementation period and delays in procurement; and (c) the establishment of a clear functional, organizational and management structure with adequate autonomy is a prerequisite for encouraging operational efficiency and improved performance in the transport sector. The proposed project has been designed with these lessons in mind. 'i. Prolect Objectives. The main objectives of the project are to: (a) remove transport bottlenecks and traffic congestion in Central Colombo that impose high costs on commercial and industrial establishments; (b) develop long-term transport plans for the GCMA and strengthen institutions concerned with urban transport; (c) strengthen the managerial capabilities of the National Transport Commission (NTC); (d) increase the efficiency of the STR; and (e) promote adequate air quality standards and emission control measures. 6. Prolect Descrintion. To achieve the above objectives, the project includes: (a) Immediate Action Plan. (i) Transport System Management (TSM) Program for three areas: Fort, Pettah and Olcott Mawatha. Implementation of short-term, cost-effective measures of the TSM program comprising junction improvements (signals, channelisation), bus passenger facilities (terminal improvements), bus lanes, sidewalks, footbridges and off-street parking and rehabilitation of road pavement in the Pettah and adjoining Olcott Mawatha areas where traffic conditions are most chaotic; (ii) Maradana Junction Improvements. Construction of a gyratory consisting of an additional bridge, parallel to the existing bridge over the railway tracks, improvements of the approach roads to the new gyratory and the provision of inter-linked signalization to increase capacity and reduce vehicle-to- vehicle and vehicle/pedestrian conflicts at this intersection where severe congestion and delays occur, with a daily traffic volume exceeding 44,000 vehicles and large passenger flows from the nearby railway station; and (iii) Implementation Support. Consultancy services to supervise the TSM and Maradana Junction improvement schemes; (b) Lona-Term Urban TransDort Planning. Consultants to: (i) carry out the Colombo Urban Transport Study to address the transport infrastructure, service and management deficiencies and prepare comprehensive policy actions and associated investment plans for the long-term period; and (ii) provide on-the-job training of the counterpart staffs from the agencies involved in urban transport planning. Personal computers, office equipment and software would be procured as part of this component; and (c) Institutional Strengthening. Completed projects: Road Maintenance I (Cr. 900-CE, PCR No. 8000, 8/89); Road Passenger Transport (Cr. 994-CE, PCR No. 8011, 8/89); and Roads II (Ln. 2517- CE, PCR in draft). Ongoing projects: Municipal Management (Cr. 1697-CE); Roads III (Cr. 2183-CE); and the Economic Restructuring Credit (Cr. 2128-CE) under which the publicly owned bus industry is being privatized.  (i) Transport Regulation. Consultancy services to train the NTC and the Provincial Councii