Nepal - Highway Project

(. ;23 FILE COPY C 0 N F I D E N T I A L Report No. PTR-54a To be returned to GENERAL FILES immediately after use. This report is available only to those members of the staff to whose work it relates. Any further release must be authorized by the department head concerned. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF A HIGHWAY PROJECT NEPAL October 27, 1970 Transportation Projects Department  Currency Equivalents Currency Unit - Nepalese Rupee (NRs) US$ 1 - NRs 10.125 NRs 1 - US$0.099 NRs 1 million - US$98,765 Fiscal Year July 15 or 16 - July 14 or 15 System of Weights and Measures: Metric Metric: British/US Equivalents 1 kilometer (km) - 0.62 miles (mi) 1 meter (m) - 3.28 feet (ft) 1 square kilometer (Nm2) - 0.386 square miles (sq. mi) 1 metric ton (m ton) - 0.98 lg. ton 1 metric ton (a ton) - 1.1 US short ton ' maund - 37.5 kg - 82.7 lb Abbreviations MPW - Ministry of Public Works, Transport and Communications DCA - Department of Civil Aviation TCN - Transport Corporation of Nepal UNDP - United Nations Development Programme ADT - Average Daily Traffic RNAC - Royal Nepal Airlines Corporation O/D - Origin and Destination ICAO - International Civil Aviation Organization ADB - Asian Development Bank  NEPAL APPRAISAL OF A HIGHWAY PROJECT Table of Contents Page No. SUMMARY ........................................ 1. INTRODUCTION ...................................1 2. BACKGROUND ....................................1 A. The Country and its Economy ,.1 B. Transport Sector . . 2 C. Transport Coordination . . 4 3. THE HIGHWAY SECTOR ............................ . 5 A. The Highway Network and Trails .......... 5 B. Characteristics and Growth of Road Traffic ................................. 6 C. Highway Administration and Management ... 6 D. Highway Planning and Financing .......... 7 E. Highway Design and Construction ......... 8 F. Highway Maintenance ..................... 9 4. THE PROJECT .................................... 9 A. Description ............................. 9 B. Road Bridges ............................ 10 C. Pedestrian Suspension Bridges ........... 10 D. A Four Year Maintenance Expansion and Improvement Program .11 E. Bridge Engineering Services .12 F. Technical Assistance .................... 12 G. Project Execution and Timing 13 H. Project Cost and Financing .14 5. ECONOMIC EVALUATION .. .................... 17 A. General . .17 B. Road Bridges ............................ 17 C. Pedestrian Suspension Bridges ........... 19 D. Maintenance Equipment and Workshop Facilities . . 19 6. RECOMMENDATIONS ................................ 21 This report was prepared by Messrs. M.W. Dickerson (engineer) and H. Hansen (economist) and was edited by Miss R. Mayes.  Table of Contents - continued TABLES 1. National Highway Network 2. Motor Vehicle Statistics 3. Expenditure on Highways, 1965-70 4. Project Road Bridges 5. Project Pedestrian Suspension Bridges 6. Maintenance Equipment and Workslhop Facilities to be Procured 7. Planned Expenditure under Four Year Maintenance Program 8. Bilateral Aid Road Construction Program 9. Traffic over Kathmandu Project Road Bridges 10. Traffic Growth on Project Road Bridges 11. Annual Traffic Volumes with Costs and Savings 12. Vehicle Operating Costs ANNEX: Economic Evaluation of Pedestrian Suspension Bridges CHART: Roads Department Organizatior MAP: Nepal - Highway Project PLATES 1 AND 2: Photographs of Existing Bridgc-.  NEPAL APPRAISAL OF A HIGHWAY PROJECT SUMMARY i. Nepal, a land-locked country under conscious isolation until 1951, is among the least developed countries in the world. Population is estimated at 11 million with economic development in recent years only keeping pace with population growth. Gross domestic product is currently estimated at US$45-65 per capita, roughly three-quarters that of India. The principal economic activity is agriculture; however, due primarily to poor internal com- munications, the economy is not fully integrated. The Government s strategy is now to give investment priority to agriculture and transportation. In the transportation sector, roads will be the principal mode, and development of a basic network is essential to the Government's goal of expanding and integra- ting the economy. id. The country's extremely difficult terrain, which includes the highest mountains in the world, is a natural obstacle to road construction, and up to 1953, there were no motorable roads outside the Kathmandu Valley. Considerable foreign aid in recent years, however, has made possible some progress in constructing a basic main road network, which now totals about 1,300 km. The Government's highway plans provide for the completion of the East-West Highway running the entire length of the southern part of the country, and a program of north-south feeder roads to complement the main road system. Replacement of several narrow and unsafe bridges on existing roads is also an important part of the plan. iii. Although expansion of the road network is the primary task, the Governinent is keenly aware of the economic and social importance of the porter trail system in the Himalayas and foothills. To reduce transport costs andl foster a spirit of national unity, the Government is assisting village councils with porter trail improvement and wishes to step up the program for erecting modern pedestrian suspension bridges to replace dan- gerous canoe ferries and existing primitive and unsafe bridges. iv. Difficulties in maintaining communications during heavy rains and melting sno-ws ara not confined to hill trails, and blockage of the main roads is a regular occurence. A significant portion of maintenance resources have been used in keeping main roads open to traffic, and routine road main- tenance activities have, as a consequence, been somewhat neglected. Wich the expansion of the road network and the growth of road traffic, there is now an urgent need to build up both physical resources and the expertise neces- sary to naintain Nepal's highway system.  - ii - V. The proposed project will cover the following prin)rity require- ments: (i) the replacement of five narrow understrength roar. brIdges; (4i) the supplv and erec tlon of five pedestrian suspension bridges for pcrter traffic; (iii) thte implementation of a four-year maintenance program i- cluding the supply of road maintenance equi-pmrnt and workshop faci25.ties: (iv) consulting services to the Roads Department to complete )rildge desin&' and tender documents; and (v) technical assistance to assist in procurement and supervision works under the project, and also to provide advisory serv- ices to the Roads Department. At Government' , recfuest, the UTNM)yT has agreed to finance the technical assistance, Lterm (v). vi. This would be the first lending operation by the Bank Group in the transportation sector in Nepal. In 1964, the Bank made a technical assist- ance grant to finance a transport survey, and some of the survey recommen- dations, particularly those relating to road maintenance, have been incor- porated into the pr.posed oroject. vii. The total project costs amount to US$3.4 million equivalent, in- cluding contingencies. The proposed credit of US$2.5 million would cover 73% of the total p,cliect cost, being equal to the estimated foreign exchange component of all tunis except technical assistance. Contracts would be awarded on the basis or inteniational conpetitive bidding, except for the erection of the suspension bridges and workshops which would be carried out by local contractors; remote location of some suspension bridges may however require *4rit ion by the Roads Department. viii. The principal economic benefits deriving from the project are re- ductions in transportation costs. These result from the replacement of weak road and pedestrian bridges, and from improved road maintenance. The rates of return for the different project elements range from 14% to over 30% with a weighted average for the project of about 20%. ix. The project provides a suitable basis for an IDA credit of US$2.5 million to His Majesty's Government of Nepal.  NEPAL APPRAISAL OF A HIGHWAY PROJECT 1. INTRODUCTION 1.01 His Majesty's Government of Nepal has asked the Association to as- sist in financing a highway project comprising the following elements: (i) the replacement of five understrength road bridges; (ii) the supply and e- rection of five pedestrian suspension bridges for porter traffic; (iii) im- plementation of a four-year maintenance program concentrating on the three divisions of Kathmandu, Hitaura and Pokhara including the supply of road maintenance equipment and the provision of workshop facilities; (iv) consult- ing services to the Roads Department (Department) to complete bridge designs and tender documents; and (v) technical assistance to assist in project exe- cution and carry out general advisory duties (para. 4.14). The cost of the project is estimated at US$3.4 million equivalent; the proposed credit of USS2.5 million equivalent would cover the foreign exchange costs of elements (i) thru (iv) with the technical assistance (v) being financed by the United Nations Development Programme (UNDP). i.02 This would be the first lending operation by the Bank Group in the transportation sector in Nepal. However, as background to the proposed pro - ect, the Bank in 1964 financed a Transport Survey (the Survev) in Nepal wr_ch -incLuded the pri.paration of a five-year transport sector investment plan. So,n.e of the Survey recommendaticas, particularly relating to road maintenance. have been incorporated into the proposed project. 1.03 This report was prepared by Messrs. M. W. Dickerson (engineer) and Hi. Hansen (economist) on the basis of: (i) project preparation work done by the Norwegian consulting firm of Norconsult (the Consultants) and the Gov- ernment; and (ii) the findings of the appraisal mission to Nepal in November- December 1969. 2. BACKGROUND A_ The Counzrv and its Econoiny 2.01 The Kingdom of Nepal ib a land-locked country bordering on Tibet ' n the norch and india, Its main trading partner, in the east, south and desL (see YIap). .Nepal. roughly 800 km long and 170 km wide (about the same total size as Greece), is civided into three distinct physici] regions ex- tending in an east-west direction for the length of the country: (i) the relativelv fertile Terai plains in the south; (ii) the hi1l. country of cen- tral Nepal, including the important Kathmandu Valley; and (iii) the Himala- yas, thte world's highest mountains, in the north. The central and northern  regions are dissected by deep valleys running generally from the north tc south. 2.02 The population of Nepal is estimatee at about 11 million fl968C of which about one-third lives in the Terai, 3% in the Kathmandu Valley and the remainder largely in the hills of central Nepal. The annual population growth is believed to be aoout 2%. Gross domestic nroduct (GDP) per capita is estimated at about US$45-63 equivalent, or roughly three-quarters that of India. In recent vears economic growth has about kept pace with the growth in population. 2.03 For more than a century prior to 1951 Nepal was isolated from the rest of the world. Contacts with other countries were severely limited by the Government. Partly as a result of this and also of the poor internal communications, Nepal is still in the first stages of economic development; it consists of many loosely linked minor valley economies rather than one integrated economy. Over 80% of the population is engaged in agriculture (primarily rice, maize, milk and vegetables), which accounts for about 65% of GDP, the remaining 35% coming primarily from cottage industries, con- struction and trade. Agricultural cash crops come mainly from the fertile eastern Terai. Efforts to develop industry have been largely concentrated in the eastern and central Terai near the Indian border and in the Kathmandu Valley. Most of Nepal's foreign trade (about 90%) is with India. In addi- tion, almost all trade with other countries, except for Mainland China, goes through India. Exports consist principally of food grains, timber, mustard seed, ghee and jute. Imports are largely manufactured goods and primary pro- ducts. 2.04 The Government is now formulating its Fourth Five-Year Plan, cov- ering the period 1970/71 to 1974/75. The basic strategy is to concentrate efforts in a few selected regions and investment priorities will be given to agriculture and transportation. The Bank Group assisted the Government by reviewing and commenting on the draft Plan in mid-1970. B. The Transport Sector 2.05 General: Historically, transport in Nepal has been by means of porters and, to a smaller extent, by pack animals and bullock carts in the Terai. These means of transport are still of great importance, especially in the hills of central Nepal where the majority of the population lives (para. 2.02). 2.06 Topographic and climatic conditions are major obstacles to reli- able, inexpensive transport. The rugged terrain and the large number of rivers and streams, together with heavy monsoon rains create great difficul- ties in the development of the transport system, particularly the construc- tion of roads and all-weather aircraft landing facilities. 2.07 The transport demand is largely concentrated in the north-south direction and is associated with foreign trade and also movements between rural areas and villages.  - 3 - 2.08 Highways: The construction of roads for motor vehicles outside the Kathmandu Valley was only started in 1953, and Nepal still has one of the smallest road networks, either in relation to surface area or to popula- tion, of any country in the world. The network consists of about 2,700 km of road, 660 km of which are paved. In 1968, total motor vehicle registra- tion was about 8,000 units, of which half were jeeps or passenger cars. The highway system is described in more detail in Chapter 3. 2.09 Railways : The Government-owned Transport Corporation of Nepal (TCN), in addition to operating the ropeway (para. 2.10) and some trucks, operates two short railway lines from the Indian border. These run from Raxaul to Birganj (about 10 kma) and from Jaynagar to Bizalpura (about 53 km). Both are extensions of the Indian railway network and do not play a significant role in the overall transport system of Nepal. 2.10 Ropeway: The TCN also operates the 41 km long Hitaura - Kathmandu ropeway which was built in 1964. in 1968/69 the ropeway carried some 35,000 tons of food grains and some 270 tons of construction materials, almost all in the direction up from Hitatira to Kathmandu. TCN estimates that the rope- way now can op,-?rate about 280 days a year, giving an annual capacity up to Kathmandu of about 70,000 tons. Rstes on the ropeway are lower than compar- able trucking .-ates between Fltaura and Katlhmandu (roughly NRs 2.00 per maund (37.5 kg) for foodstuffs on the ropeway as compared with NRs 3.00 by truck). There are no plans for expanding the present facilities. 2.11 Air Transpor2: Air transoort started in 1950 and the Government- owned Royal Nepal Airlines Corporation (RNAC) now serves 15 airports in Nepal and four abroad (New Delhi, Calcutta, Patna and filacca). The volume of domestic passenger traffic, which reached 164,090 passengers in 1969, in- creased by almost 30% annually during the previous three years. In 1969, some 84,000 passengers arrived in or left Nepal on international flights and these services are expanding. Freight carried by RNAC totalled some 3,000 tons in 1969. Although the tonnage has fluctuated from year to year, there hias been no significant change in the overall annual tonnage during the last six years. 2.12 AccordJng to a recently completed study b' the International Civi. AviaticAn Organisation and the Asian Development bank (ICA0/ADB), ef- .ectr-ve operatiorss of domestic air transport have: been handicapped by obso- lete equ-pmnent, izne hign cost of flight oDerations inadequate and unreli- ahie rav gational aids anr conrurunations, lack of airport facilities and che insufficient availabilii'y of trained staff. The Government is aware of these problems and has taken steps to improve air transport. In August 1969, the Government signed aa agreement with Australia for assistance in imnrovang- navigazional aids and communications. In December 1969, the .overnaent also obtained a loan of USS6.36 million equivalent from the ADB rorA (i) imarovir.g the airports at Kathmandu, Pokiara, Blhairawa, Simra and i :-tna t ra (ii) navigational aids and communicaticn o azclities; (-iii) work- Thi;c cqatL3entr. passeng er buses, a pilot navigatioisal trainer; and (iv) rechnical assistance to .(NAC and the Department of C-ivil Aviation (DCA).  - 4- 2.13 Waterways: rhe use of waterways within Nepal is limited. Rivers are used for some movement of rice and mrchandise to and from India during the wet season and for f1oatin, logs froma the hWll_s wn central Nepal. Canoe ferry operations also exist at many nlaces aJonq the riv?rs, but these are partially or completely interrupted during the wet seslson. C. Transport Coorfi nation 2.14 In order to obtain a proper basis for the development of a real- istic and integrated transport system. the Government in 1964 asked the Bank for assistance in organizing and financing. a Transport Survey. Tne Survey report was submitted in June 1965 and included a review of the existing transport system, a 30-year transport development plan and a more detailed five-year transport investment progran for inclusion in the Third Five-Year Plan of Nepal, 1965/66 - 1969/70. The Survey concluded that the lack cf adequate transport was a limiting factor to econor.ic development in Nepal and that transport investment should receive bigh priority. The Survey also concluded that roads would provide the lowest cost of transport in Nepal and should, therefore, be the prime mode. The report also recommended that air transport should be developed. The nroposed five-year investment program totalled NRs 517 million (US$68 million equiv ,ent' ) .iCh NRs 424 million was for roads, NRs 84 million for air and NRs 9 militL.n for railways. 2.15 Most development expenditures including investment in transport have in recent years been financed almost wholly by bilateral assistance from Mainland China, India, U.S.S.R., the United Kingdom and the United States. Although this bilateral assistance has been essential for the development of thie infrastructure, it has made the preparation and imple- mentation of coordinated and consistent investment plans more difficult. 2.16 All matters relating to transport policy and operations are the responsibility of the Ministry of Public Works, Transport and Communications (MPW). However, transport planning has, in the past, been weak and dispersed amongst several separate agencies within the MPW. The Government is anxious to improve this planning and the preparation and execution of projects. In addition to the technical assistance for aviation (para. 2.12), the Govern- ment asked the UNDP for financial assistance for feasibility studies of about 1,000 km of roads with primary emphasis on north-south feeder roads. These studies commenced in mid-1970. Also with financial assistance from the UNDP, the Government, in mid-1970, obtained the services of a transport economist. This expert is reviewing the present organization, responsibilities and func- tions of the various agencies concerned with transport with a view to improv- ing coordination, planning and policies for transport development.  - 5 - 3. THE HIGHWAY SECTOR A. The Highway Network and Trails 3.01 Highway Network (Table 1 and Map): The highway network in Nepal is limited in extent. The main artery of the country is the 128 km road from the Indian border to Kathmandu which was completed in 1956 by the Indian Government. It is paved and carries all road traffic from India to the cap- tal. In the Kathmandu Valley, there is also a picturesque but limited net- work of roads connecting the smaller satellite towns with the capital. Other principal roads are shown on the Map. 3.02 The present road system consists of about 2,700 km of road divided into four classes - international routes, trunk routes, local roads and feed- er roads. The international and trunk routes (paved and gravelled) and the local roads (principally in the Kathmandu Valley) comprise the national sys- tem which is under the authority of the Department, while the feeder roads are looked after by the village councils (panchayats). With a coverage of 1 km of road per 4,000 people (and 1 km per 50 kim2), Nepal is poorly served compared with countries having a similar per capita income; the same ratio for Afghanistan is 1 km per 1,000 people (and 1 km per 38 km2) and for Malawi 1 km per 400 people (and 1 km per 12 km2). 3.03 The network is, however, expanding rapidly. International and trunk routes are under construction by bilateral agencies with village self- help schemes tackling the minor roads. The East-West Highway planned for the whole length of the country is currently under construction by three bi- lateral agencies (India, U.S.S.R. and the U.K.). The total length of this road (1,040 kn) is scheduled for completion by l985 with the eastern two- thirds expected to be fully open for traffic by 1975. Also, within the next 2 years, the UNDP feasibility studies (para. 2.16) will identify a first priority group of north-south feeder roads for early construction. 3.04 Trails: The Himalayas and its foothills, which cover two-thirds of Nepal, are laced with narrow steep trails used by porters and animals laden w'th the neers and products of isolated valleys and villages. These trails not only "ink the many minor valley economies but also play a vital role in unifying the country. The total length of Nepal's trails has been put at a6out 10,000 k, and several small but interesting studies have indicated that up to 40,000 tons per year may pass over the more important routes. The ter- rain is rugged resulting in steep trails winding down to rivers of melting snow, the main obstacle in .his system of trails. The Department is taking an active interest in trail improvement, both by widening existing trails and also by a progran for the supply of modern suspension bridges. These bridges will replace either small dangerous canoe ferries or existing primitive sus- pension bridges. That transport in the hills over porter trails will conti- nue for decades to come is certain, and the Government, therefore, plans to step up its panchayat assistance program to improve this historic system. The proposed project will help in this respect (paras. 4.04 to 4.05).  -- 6- B. Characteristics and Growth of Road Traffic 3.05 Data on present road traffic in Nepal are scarce and even less in- formation exists on past trends. Total vehicle registration as of 1968 was about 8,200 (5,120 light vehicles-62%, 2,520 trucks-31% and 560 buses-7%). Of these, about 65% were registered in the Kathmandu Valley (Table 2). The gross annual increase in vehicle registration was 20% during 1964-1968. Information on scrapped vehicles is not available, hence the present fleet and net growth are not known. However, even on the basis of gross vehicle registration there would be about 1,350 persons per vehicle as comDared with about 700 in India, 500 in Afghanistan and 250 in Malawi. 3.06 Past traffic data are available from one check point on the impor- tant Indian border-Kathmandu road. Traffic here increased by about 13% an- nually since 1963/64 and in, 1968/69 reached about 230 vehicles per day, al- most all trucks. The Department in 1969 recognized the need for traffic in- formation and started additional traffic counts on some of the more imnor- tant highways. It is expected that the UNDP financed transport economist (para. 2.16) will assist the Department in expanding the present counting program. Assurances were obtained during negotiations that the Government will prepare and implement a program of regular traffic counts and improve the collection of traffic data generally. Traffic iegulat'.ons limiting ve- hicle weights and dimensions, which are inadequately enforced, requrre re- vision. During negotiations assurances were obtained that revised vehicle size and weight regulations consistent with the capacity of the road net- work would be introduced and that these regulations would be enforced. C. Highwa Administration and Management (see Chart 3.07 Responsibility for the national road network lies with the Roads Department of the MPW. A Chief Roads Engineer is in charge of the Department with senior engineers heading each section. The present headquarters organi- zation evolved from a merger of three independent highway offices and, having been reorganized on lines recommended by both the Bank Survey (in 1965) and UNDP advisors, is now generally satisfactory. In the field, however, a separation of the buildings and roads departments left the latter with only one field divisional office at Hitaura, and liaison offices on bilateral projects. Due to the lack of adequate field facilities road maintenance has suffered. 3.08 The Department recognized these administrative weaknesses and has embarked on a strengthening of the field organization and an expansion of facilities. A separate division was created in 1969 to maintain the roads in the Kathmandu Valley and the Department has now proposed a tentative long-range plan to expand the maintenance organization to three regional offices (Eastern, Central and Western), each controlling three divisions. This program is geared to the anticipated hand-over of aid constructed roads. Several buildings are expected to be transferred from the bilateral agencies and will be incorporated into the future organization.  - 7 - 3.09 As part of the reorganization program, a new division will be created at Pokhara in 1971 when the Department takes over responsibility of the Indian constructed Pokhara-Sunauli road. This division, situated as it is near the Annapurna mountain range, will also maintain light construction equipment used by the Department and the village panchayats to improve hill trails. Similarly, a small road maintenance depot will be built on the Kodari road after hand-over by the Mainland Chinese construction agency. 3.10 The Department staff of 23 senior engineers, 70 assistant engineers and 109 overseers, is adequate for the immediate expansion plans. Many of the staff are gaining experience on bilateral projects, but there is, at pre- sent, a shortage of foremen and trained artisans. This shortage should be relieved by the Vocational Training Scheme to be conducted by the Engineering Institute of Nepal, in conjunction with the UNDP (para. 4.14). D. Highway Planning and Financing 3.11 Planning is the responsibility of the Department Planning Section, but the establishment of construction priorities has not always been based on economic criteria. Priorities have been influenced by the offers of the several bilateral aid programs in Ncpal, and attem.pts to coordinate and standardize these programs have not always been successful. 3.12 A five-year road plan waE first produced in 1964 but was not pro- mulgated by the Government. rn 1965, ti,e Bank Survey recommended a 30-7ea- plan designed to provide the country with a basic road network. The Govern- ment, however, wanted a faster rate of network expansion and modified the Survey recommendations to form the present 20-year Plan (1966-1985). Most items included in the first five-year period of this Plan were projects al- ready committed under foreign aid. The Government, however, recognized that comprehensive feasibility studies are required to reassess relative priorities, and therefore asked the UNDP for assistance to carry out these studies. This two-year study, from which further projects suitable for Bank Group financing might emerge, comrmenced in mid-1970. 3.13 Hig.hway investments are met largely from foreign aid. This aid is provided ini the form of foreign staffed construction units and donated con- sumer goods subsequently soid locally by the Nepalese Government. The total aannual value of Investment in road constructfor4 has increased from about NRs 24 million to NRs 110 miliion in the last five years. As can be seen frormi Table 3, the planned investment by Government (including foreign aid) for FY 1970 of NRs 217 million (0S%$21 million equivalent) represents a s?ectacular Jump over previotu years and is supportea by the roticeable in- crease in bilateral road conszruction (by the British, USA and Mainland Chinese). T.he total investment for the current five year highways plan (1966-1970) will be about NRs 534 million (about US$53 million) with a tenLatively planned investment for the next five years (1971-1.976) of NRs 820 million (about US$81 million).  3.14 For FY 1970, revenue from road user charges (license fees together with import duties and surcharges on fuel, vehicles and spare parts) is es- timated at about NRs 30 million compared with estimated Government expendi- tures on roads (both capital and recurrent but excluding foreign aid) of NRs 25 million. The recurrent maintenance budget, although having increased over the past six years, has not kept pace with the expanding road network. There has also been a tendency not to provide adequate funds for equipment replacement and repair. However, on the basis of the Department's mainte- nance improvement plan (para. 4.06), the Government intends tc increase mi.n- tenance allocations (para. 4.25). E. highway Design and Construction 3.15 The Department includes two sections which are responsible for design and construction. The Design Section has an able and experienced engineer in charge but with a staff of only 6-8 junior engineers. The road and bridge design standards used by this Section come from different sources and, although generally satisfootory, require review and consolidation. Un- der the proposed UNDP technical assistance project (para. 4.14), these stan- dards, together with the Section's organization will be studied and appro- priate recommendations made. 3.16 Contract supervision is the responsibility of the Construction Section of the Department. Contracts are supervised by resident engineers trained on bilateral aid projects, who are also responsible for the quality control of the works. There is, however, a serious shortage in the Depart- ment of the materials testing equipment necessary to control construction works. This shortage will be remedied by equipment to be supplied by the Economic Commission for Asia and the Far East (ECAFE) and under the project bridge contracts. 3.17 The local contracting industry is small and engaged on building and some civil works. In addition, a Government-owned contracting firm has re- cently carried out some moderate sized road and bridge contracts in the Kathmandu Valley. In other parts of the country, Indian firms are undertak- ing works on contract to the Indian aid agencv. 3.18 At present, Government contracts are awarded on a competitive basis or by negotiation with a single contractor. Due to the small scale of Government works being carried out by contract, the Department's experi- ence in contract administration is limited. Following preparatory work carried out by the Consultants, the Department is now revising its contract procedures together with associated documents.  -9- F. Highway Maintenance 3.19 Maintenance of the national highways is the responsibility of the Maintenance Section of the Department with, at present, 862 km of road under its authority. In addition, there are presently 433 km of national highway being maintained by bilateral construction agencies and an estimated 1,400 km of feeder and minor roads under partial maintenance by panchayats. All bi- lateral financed roads, both completed and under construction, and also some panchayat roads will eventually be transferred to the Department for mainte- nance. The Government estimates that by 1976 the Department will be maintain- ing about 3,000 km of road - an increase of about 250% in 6 years. 3.20 Due principally to the weak field organization and lack of suit- able equipment, the maintenance of existing roads is not satisfactory. Maintenance Section staff require training in modern techniques, and there is a shortage of foremen and artisans in the field. Little planning of maintenance operations has taken place and work has been concentrated on keeping mountainous road sections, which are prone to landslides, open during the rainy season. This emphasis on emergency work has meant that routine and periodic maintenance activities have been somewhat neglected. 3.21 Funds for road maintenance are presently inadequate. Requests for increased funds have not been supported by maintenance plans nor by up-to- date accounts of actual expenditure. Similarly, cost accounting is not e-"- ployed to measure the efficiency of maintenance operations. The Government is understandably reluctanc to meet the demands for increased funds until a system of road maintenance planning, programming and cost accounting is adopted by the Department. 3.22 The Department is aware of these deficiencies both in organiza- tion and operations and has drawn up a tentative expansion and improvement program to meet the needs of the present and future road network. The pro- gram covers, among other items, the improvement and expansion of workshop facilities, participation in UNDP and other training schemes and the purchase of necessary road maintenance equipment. Implementation of the program will require financinl and technical assistance, and is the basis of the maintenance element of the proposed credit. 4. ThE PROJECT A. Descrtptipn 4.01 The project consists of five elements: (i, replacement of five narrow understrength road bridges; (ii) bupply and erection of five pedestrian suspension bridges for port2r traffic;  - 10 - (iii) a four-year maintenance progran concentrating on the three divisions of Kathmandu, Hitaura and Pokhara including the purchase of road maintenance equipment and the provision of workshop facilities; (iv) consulting services to complete bridge designs and tender documents; and (v) technical assistance in the execution of items (i) through (iii) above and ir highwav admiristration, pianninr e"^ maintenance. B. Road Bridges 4.02 There are three single lane steel bridges on the Indian border to Kathmandu road (Nos. 3, 4 and 5 in Table 4 and on the Map) which the Con- sultants considered to be unsafe even for current tratfic. Under the project, these bridges will be replaced by modern two-lane structures and the approach roads will be improved. 4.03 The two existing timber bridges in the Kathmandu Valley vb