Iraq - Road Project

I TTI i L ! R ETPR!TFn jREPORTS DESK| r Report No. TO-516a. | WIITHIN L ONE WEEK L~~ This report was prepoared for use within lhe.Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. L.] TNTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION REAPPRAISAL OF A ROAD PROJECT IN IRAQ June 13, 1966 Projects Departrnent  CURRENCY EQUIVALENTS US $1 = ID 0.357 = 357 fils ID 1 = US $2. 80 ID 1, 000, 000 = US $2, 800, 000 -Fisca]. Yea>r April 1 to M:Varch 31 Units = metrics  IRAQ: ROAD PROJECT Table of Contents Page Summary i- ii I. INTRODUCTION 1 II. BACKGROUND 1 A. General 1 B. The Road Network 2 C. Design Standards 3 D= DirPc tnrat,e (General of Roads and Bridges 3 E. Maintenance 4 F. Gontrol of' VehieTo 5 G. General Conditions of Inland Transportation 5 H, RoadlFinancng 7 TII.T ' T-I DTCT'P8 ALLA . Desripic; 8 'V .~4 1) Construction 8 2) EmpIo.JL'oy,IIiI e n tJ ofJtIL' Cons 1O u I a nU 3) Maintenance Program 10 1J LU1 u Z4 1., ,Liild UE U I utIi I I UQJ tn U - 1 C. Execution of the Project 12 D, rniridxinaig of the ru uoj ec U'1 TTY ,fIlfTlUflrlk-n , Trm ,-- r - nAm rcfl I CU A, General 12 B. Individual Roads and Bridges 13 V. CON CLIPSIOONS AND RECOWIENDATIONS 17 TABLJX3 1. Classification of Highways 20 Organization (hart for the Di Jrtornate Ctneral of Roadn anr Brid ge 3. Yearly Expenditures for Road Maintenance 1| (Gmrowt.h of Veoh:Lele Regitrationsc an flriviir Liene 5. Government Rerenues Collected from the Road Transport Sector 6 Cost Est-mate of Road Project 7, Estimated Operating Costs of a 10-12 ton Capacity Truck in Iraq MAP This appraisal report is based on a Bank H'ission to Iraq in January/ February 1964 consisting of Mr. Bergan and Mr. Baldwin and on a re- appraisal made in October/November 1965, by Mr. Bergan and Mr. Bickers.  TRAG: ROAD PROJECT Summary i. The Government of Iraq has asked the Bank for a loan of U.S.$23 million equivalent to cover the foreign exchange cost of a road project comprising: a) the construction of five roads with a total length of 390 kcm. and a 500 m. lone bridee: b) consultants' services for super- vising this construction, and for a comprehensive road transport study; and c) a maintenance improvement nrogram.. ii This would be the secnrd Bank loan in Tran The first B2nk lc,an for a floocd control scheme,was signed in 1950; it was cancelled by the Government in 1955 hpfnre comnpletion and prepaid0 iii. The road pronec-t was first appnraise in Tnrmqry/Februarv 196)i and negotiated in August 196h, but presentation to the Board was delayed by the isse of cnpenns.-tion to foreign onT.^..ers of nationalized properties in Iraq. This no longer presents an obstacle, but in view of the lapse of time a re- apnrais -f t p. +-,ro W3S ^arried ,ou,+ 4in October,/r 19645 and som changes were made in the roads to be financed by the proposed Bank loan.. ivo l'otal est,imated cost of the revised project is U.S.$54 million estimated at UqS.$23 million equivalent or 42.6 per cent, The local cost of ID 11.1 mil:lion, or U.S.$p31 m.llion equLvalent, will be pro-vided by the Government from yearly allocations of development funds. v. Overall plans for development in Iraq are determined by a Planning Board headed by the Prime Minister, and implemented through the Ministry Of Planning, who delegates the actual execution of projects to the ministry concerned. Responsibility for road construction and maintenance rests with the Ministry of Conmmunications and one of its divisions, the Directorate General of Roads and Bridges (DRB). Vi. Final surveys and designs for the project roads and the bridge have been completed by the DRB or byr foreign consultants wJho will also be respons:ible for supervising construction, Construction and equipment contracts have been awarded on the basis of international competitive bidding, and existing procedures are satisfactory to the Bank. vii. One highway included in the original project has in the meant:ime been completed and is deleted from the revised project; in addition section 1 of the Sharqat-M4osul road was awarded to a firm from a non-member country, and has also been deleted. All ':he other roads, and the Fallujah Bridge, are retained in the revised project, and another road from Safw3an t,o the new port of Unmm (asr has been added.  - ii .. viii. The DRB needs technical assistance in improving maintenance operations,, and funds for procuring additional equipment for maintenancE! and for expanding its repair shops and soil laboratcries. Recent exuend- itures on the upkeep of roads have been Jnsufficient) but the Government has agreed oradluallv tc) increase the appropriations of funds for road mainten- ance. ix. T'he new roads are important as final links in the country's inter- citv highway netwnrk. The nr r economi cal1lv nuctifiPri by low trans- portation costs over these routes, and will undoubtedly stimulate the growth of prduction a comerce n the areas concerned. Direct benefits to r'^ d users alone are est;imated to yield returns enQral1y in the rw.e_o of 12 to pe mr rcent x. 'The project provides a suitable basis for a loan to the Government of UT S.$23 million equivalent, A 20-year ter including a )-y of grace, would be appropriate.  REAPPRAISAL OF A ROAD PROJECT IN IRAQ 1 INTRODUCTION 1. The Government of Iraq has asked the Bank for a loan of U.S.i23 million equlivalent to help finance: a) construction of five asphalt- surfaced roads totaling 390 km., and of a 500 m. bridge; b) consultantst services for the supervision of some of the road sections and the bridge, and f'or an overall transport studv; c) a maintenance improvement program, including procurement of equipment for road maintenance and the cost of consultants to assist in reorganizing maintenance operations. 2. T'his is the first Rank transnortation nroiect in Iraa. The first and only previous Eank loan to Iraq was made in 1950 for a flood-control nrniect T'he *oan w2s c_nonlLrd hv Tran in 1q5 hbefore comnletion of the project and. the amount outstanding was prepaid. 3. T'he road project was first appraised by a Bank Mission in January/ February 16, and loan negotiations tnok nlace in Auiuisit. 1Qo()i r Presentatio n to the Board was held in abeyance pendUng the conclusion of satisfactory arrangements for compensating foreign owners of properties nationalized by the law of 126), EJecause of this delay, and of some changes in the Project, rea-pprais-al wasC -ade i; 1ct(e/Nvmbr96 by M-,5 A D D.H. Bickers. The revised project is based on final survey and design cf all the ~ -- road Vn th bridge complet ed eLh-r by- forig -osl3t I- by--- the- 1+ k Directorate General of Roads and B3ridges (Ministry of Communications), which is rsons.ble for the untry's r0d network, II, BACKGROUND A. General 4. ]:raq covers an area of 172.000 square miles, wqith a population of about 7 million. I'he Euphrates and Tigris rivers flow the length of the! country from north to south, and if properly used their waters can support some of the most productive agricultural areas in the Middle East. The region between the two rivers, the flat and low-lying area of Mesopotomia, depends essentially on irrigation for producing important crops of rice, barley, wheat, dates, and vegetables. To the north, the hilly country re- ceives sufficient rainfall for dry cuLtivation. 5. The oil industry is of paramount importance to the economy of the countrv. In the Dpast ten vears oil exoort earnines. net of investment in- come paymenits to the oil companies, have more than doubled, and in 1964 accoumted for ID 1l10 million (U.S,$390 million), nr about 90 npr cent ot' total foreign exchainge earnings. Government revenue from this source amounted to some ID 130 millinon (USo$36hmilLion), half of which was earmarked for development; purposes.  -2.. 6. The Development Board created in 1950 was, inter alia, in charge of planning and execution of road proJects. In the first years the Board, staffed with foreign experts, was mainly concerned with flood control schemes ancd irrigation projects, but steps were also taken for planning and execution of a network of roads based on modern design standards to link the main towns. 7- The Bnord was not fullv successful in its first attrmnt to get an overall road program underway, due mainly to staffing problems, inadequate designs and inexperienced contra.rtnnq.. Around 1956a however, more con- sultants were called upon to assist in design and supervision and experienced foreig-n contractors were encouraged to submit bids for works, The con- struction of the new roads gradually gained momentum, only to be interrupted for El period after the re-vrolution in 1c958. 8. In 1959 the Development Board was abolished and its functions transferred to a newly created Ministry of Planning, which delegated ex-- ecutior of the + pr eA-+ct +4th r+1, nc1irv e .istries. Roads becam the responsibility of the Directorate General of Roads and Bridges (DRB), Ministry of wu un,catio In 1 .6 a DPla Boar -onsistA f -F' P ~L4Li US J 0 'AIIUILLL4A., U.LLIs L