Ghana - Highway Project

DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use FILE COPY Report No. 76a-GN APPRAISAL OF A FIRST HIGHWAY PROJECT GHANA June 29, 1973 Western Africa Projects Department Transportation Division This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. Currency Equivalents Ourrency Unit = Cedi (0) US$1.00 =01.15 01.00 = 100 pesewas 01 million . US$870,000 Fscal Year July 1 - June 30 System of Weights and Neasures: British/US British/YS Metric 1 foot (ft) a 0.305 motor () 1 mile (mi) = 1.61 kilometers (kN) 1 square mile (sq mi) - 2.59 square kilometers (km2 1 ton (long ton) = 1.016 metric tons (a ton) Abbreviations and Acronyms ODA - Overseas Development Administration (UK) FND - Public Works Department StUP- Scott, Wilson, Kirkpatrick and Partners (UK) vpd - vehicles per day GHANA APPRAISAL OF A FIRST HIGHWAY PROJECT TABLE OF CONTENTS Page No. SUMMARY ....................... ................ i i 1. INTRODUCTION .................... 1 2. THE TRANSPORT SECTOR o....... ................... 2 A. General .. .................... ........... 00 2 B. The Transport System ............................ 2 C. Transport Policy and Coordination................ 4 3. . .TGHWAYS *... .. .. .. .. .. .. .. .. .. .. .. ..... 6 A. The Road Network and its Traffic ................ 6 B. Administration ......................... 7 C. Recent Developments and Reorganization of PWD ... 8 D. Financing ..... .................... ..... ......... . 9 E. Planning .............. .. ................. 10 F. Engineering and Construction .................... 10 G. Maintenance .......... ... ...... 11 4. THE PROJECT ......................................... ... . ..... 13 A. General Description ........... o ....... .. 13 - Rehabilitation and Improvement of Trunk Roads . 13 - Supervision of Construction .................... 14 - Pre-Investment Studies for Future Rehabilita- tion and Improvement Projects ................. 14 - Formulation of Highway Maintenance Program .... 15 - Equipment for Traffic Control and Pavement Survey .................... .. ............. 15 B. Cost Estimates ..... e... *. ... .. ............... 15 C. Execution ....................... ................. 17 D. Financing and Disbursement 18 5. ECONOMIC EVALUATION ............................. ........ 19 6. AGREEMENTS REACHED AND RECOMMENDATION ............... 22 This report was initially prepared by "essrs. r. ". "ossberg (Engineer) and B. Shields (Economist) in January 1972, and was subsequently revised and up- dated by Mr. J. Doyen (Engineer/Economist, PMWA) following his re-appraisal mission in November 1972. Table of Contents (Continued) TABLES 1. Estimated Road and Rail Output, 1969 2. Estimates of Budgeted and Actual Highway Expenditures, 1968-72 3. List of Project Roads 4. Cost Estimates and Financing Plan 5. Estimated Schedule of Disbursements 6. Economic Evaluation of Project Roads 7. Savings in Vehicle Operating Costs ANNEXES I. Description of the Project Roads II. Preinvestment Studies: Proposed List of Road Sections PLATE Operating Costs (Financial) for Typical Vehicles at Various Speeds. MAP Second Highway Project - IBRD 3691 RI. GHANA APPRAISAL OF A FIRST HIGHWAY PROJECT SUMMARY i. The national road network of Ghana was at one time probably the best in West Africa. All essential sections have been built, and no major new links are needed at this time. However, the roads have now deteriorated considerably because of poor maintenance, and because construction standards (particularly for the pavements) were too low for present-day loads. Highway investment over the next three or four years is therefore expected to concen- trace on restoring trunk roads and strengthening maintenance; rehabilitation work should be considered as particularly urgent so as to avoid future in- creases in vehicle operating costs and major reconstruction. ii. The Bank Group's first activity in the highway sector in Ghana was an engineering Credit (S7-GH, US$1.5 million, 1969) which helped finance the design of two highways between Accra and Kumasi, and between Kumasi and Takoradi; this design work was completed in 1971. However, in view of the estimated cost of construction being higher, and the rates of traffic growth lower than expected, and because of improvements (proposed or underway) to existing roads along the two corridors, the Government has taken the sound decision to defer construction of the highways for some years. iii. This report appraises a project for rehabilitation of about 345 mi of roads on 13 sections located primarily in the south on main traffic routes between the principal cities. The project is based on feasibility studies and engineering, following terms of reference prepared by the Bank Group, and undertaken by a British firm of consultants with financing by the Government of the United Kingdom (UK). The project also includes preparation of a program to improve highway maintenance, as well as pre-investment studies and engineering for further road rehabilitation. iv. The cost of the project - including consulting services for con- struction supervision and for preparing programs for road maintenance and further rehabilitation - is estimated at US$19.5 million equivalent, with an estimated foreign exchange cost of about US$11 million, or 56%. The proposed Credit of US$13.0 million would finance the foreign exchange costs and about 20% of the local costs of the project. Provision is made for retroactive financing of up to US$25,000 for the foreign cost of the services of consul- tants who would assist the Government in preparing a plan for implementation of the project, and in prequalifying contractors. v. The project is technically and economically sound. The economic return of the different works ranges from 12% to 36%, with a weighted average return of about 22%. - ii - vi. The project will be accompanied by the implementation of measures agreed during negotiations for strengthening highway planning and for better control of road maintenance expenditures, as well as for improving weight control of vehicles. The Government has also agreed to consult with the Association on implementation of the highway maintenance program to be prepared under the project. vii. Construction contracts will be awarded on the basis of international competitive bidding in accordance with Bank/IDA guidelines. Execution of the project is expected to take four years, and will be the responsibility of the Public Works Department (PWD), assisted by the consultants who prepared the engineering. The equipment will be procured following competitive bid- ding in accordance with Bank/IDA guidelines. viii. The project is suitable for a Credit of US$13 million equivalent to the Government of Ghana on conventional IDA terms. GHANA APPRAISAL OF A FIRST HIGHWAY PROJECT 1. INTRODUCTION 1.01 Bank Group missions to Ghana in 1969 and 1970 identified the main problem in the transport sector as the need to restore to serviceable condi- tion many badly deteriorated sections of trunk roads. The Government used financial assistance provided by the Overseas Development Administration (ODA, UK) to retain consultants Scott, Wilson, Kirkpatrick and Partners (SWKP, UK) who undertook economic and engineering studies of about 2,100 mi of trunk roads, following terms of reference prepared by the Bank Group. The consultants recommended a high priority rehabilitation and improvement program covering about 750 mi of these roads, and prepared engieering and contract documents. 1.02 In October/November 1971, the Bank Group used the SWKP study as a basis in appraising a project for rehabilitation and improvement of 20 road sections totalling about 580 mi. With the change of government in Ghana in early 1972, processing of the proposed project was deferred until the invest- ment policy for highways was redefined, and until the country's economic situation was determined. In September 1972, the Government requested that the project be reactivated, and submitted a revised list of about 500 mi of roads which it wished the Association to consider financing. The proposed revisions in the scope of the project and changes in cost estimates neces- sitated re-appraisal of the project in November 1972. 1.03 The revised project now proposed consists of rehabilitation of 13 high priority sections of trunk roads (totalling about 345 mi), consulting services for construction supervision and for formulating a program to improve road maintenance, and procurement of equipment for traffic control and pave- ment survey. The project also provides for economic and engineering studies for further rehabilitation of trunk roads. Most of the proposed road works are on routes which serve the densely populated south of the country, notably on the Accra-Kumasi and Accra-Takoradi highways, Ghana's most important trans- port corridors. 1.04 The project is estimated to cost about US$19.5 million equivalent, of which the foreign exchange cost would be about US$11 million, or 56%. The proposed Credit of US$13 million would finance the entire foreign exchange component, plus about 20% of the local costs of the project; the Government will provide the remaining local costs. -2- 1.05 An engineering Credit (S7-GH) of US$1.5 million equivalent made by the Association in 1969 helped finance detailed design of the new Accra-Kumasi and Takoradi-Kumasi highways, The design work was completed in 1971, but construction of the highways will be deferred for some years because estimated costs of construction are higher and traffic growth rates lower than estimated in the feasibility study. Considering also the improvements to existing roads along these corridors -- some made recently and some included in the present project -- construction of the new highways is not warranted at this time. 1.06 This report is based on the abovementioned SWKP studies (para. 1.01), on the findings of the initial appraisal mission of October/November 1971 comprising Messrs. P.E. Fossberg (Engineer) and B. Shields (Economist), and on those of the re-appraisal mission of November 1972 by Messrs. J.H. Doyen (Engineer/Economist, PMWA) and R. Viapree (Highway Consultant, SWKP). 2. THE TRANSPORT SECTOR A. General 2.01 With an area of just over 92,000 sq mi, the Republic of Ghana is about the size of Great Britain. In the main, the topography is flat or rolling, and presents no major obstacles to transport. High forest in the south-west and poor road-making soils make road construction there expensive. Economic activities and population are concentrated in the southern third of the country where mineral deposits, timber stands, and cocoa plantations are located. The population of Ghana is just under nine million, and currently growing at about 3% p.a. Annual per capita income is about US$260, the same in constant terms as in 1960. B. The Transport System 2.02 The Bank Group's present knowledge of transport in Ghana derives mostly from the Transport Sector Study carried out during 1969-70 by the consultants Robert R. Nathan Associates, Inc. (US) with financing from the United States Agency for International Development (USAID). The Nathan Study was a general exercise which considered all transport modes from the aspects of coordination, management, investment priorities, and budgeting. It did not attempt to assess priorities in road maintenance and improvement, organization and staffing of PWD, and its needs for plant and equipment. To help do this, the Government of Ghana, with financial assistance from the UK, engaged consultants SWKP to undertake a study of highway rehabilitation which has led to the present project; at the same time, the Crown Agents (UK) were commissioned to carry out a study of highway maintenance. 2.03 Transport infrastructure is generally adequate to support a much higher level of economic activity than at present, but considerable renova- tion must be effected, and a greater maintenance effort applied. Highways represent the most important mode, accounting for about 70% of total freight transport, and 90% of passenger movements (Table 1). Railways are used - 3 - almost exclusively for transporting timber, cocoa, and mineral ores. Internal air transport accounts for probably less than one percent of total passenger movements. Coastal shipping and river transport are negligible, and Volta Lake transport is of only local significance. Highways 2.04 Highway infrastructure and administration, as well as the char- acteristics of the road transport industry, are discussed in Chapter 3. Railways 2.05 Railways in Ghana are run by the semi-autonomous Ghana Railway and Ports Corporation, which is responsible to the Ministry of Transport and Communications. The railway network is about 800 mi including 592 mi of main line, all but 19 mi being single-track. The network is essentially a triangle connecting Ghana's three main cities - Accra, Kumasi, and Takoradi - with several branches to mines and to the port of Tena. The longest haul possible is about 200 mi; the average freight haul is 120 mi, and the average passenger journey 40 mi. The physical plant, particularly rolling stock, track, and signalling and telecommunications equipment, is aging and generally in poor condition. 2.06 The railway is specialized, and four commodities - timber, cocoa, manganese ore, and bauxite - constitute 93% of its traffic, of which almost one-half is timber transport. Eighty percent of the railway traffic goes to the port of Takoradi for export. Over the last few years, both freight and passenger traffic have fluctuated considerably. Trends for the period 1964-71 show that passenger traffic increased at an average of more than 6% per annum, but that freight traffic stagnated as a result both of depressed economic conditions and loss of traffic to road transport. 2.07 The real price of both rail freight and passenger movement declined over the sixties because tariffs were not raised to match changes in the cost of living. However, some freight traffic, especially cocoa, is charged far more than the full cost of movement, while passenger services have been heavily subsidized. In July 1971, railway tariffs and fares were raised by 25%, the first increase since 1958. Financial results have deteriorated since 1966, and the annual deficit has reached about 05 million. The railway's reserves, about 030 million only three years ago, are being rapidly depleted. In spite of declining revenues and traffic volumes, however, the railway's labor force has been growing at 5% per annum since 1965, and is now almost 12,000. 2.08 The 1971-75 railway plan focusses heavily on track rehabilitation and rolling stock replacement as recommended in various recent analyses. Recent motive power acquisition and the planned rehabilitation program should enable the railways to reverse the deterioration in services. The structure of the rail network and the prohibitive cost of a complete realignment pro- gram will, however, limit what can be achieved to reduce operating costs by investment. The railway has retained since 1972 the services of a group of experts provided by Transmark (consultant agency of the British Railways) to assist in implementing rationalization measures and in preparing a new investment plan. The railway can be made viable by a program for ration- alization of services which would concentrate on freight traffic, closing down stations which have lost traffic to the improved road system, reducing staff levels, and improving management and operation control. Ports 2.09 Ghana has two major ports, Takoradi and Tema, which together handle about 5 million tons of goods per year. Almost all of the country's bulk exports, such as bauxite, manganese and timber, are shipped through Takoradi, while Tema receives most of Ghana's imports. Tema is a fairly new and modern port, but Takoradi port is over 40 years old. Both are well connected by road and rail to their hinterland, and no port extension is required in the fore- seeable future, fxcept for the development of fishing ports. Inland Waterways 2.10 Ghana's rivers, important before the development of the road and rail systems, now carry negligible traffic. The man-made Volta Lake created by construction of the Bank-financed Volta Dan, has severed main road links, thus causing problems of north-south movement in the country, and of commu- nication for communities surrounding the Lake. The Volta River Authority runs a limited boat service on the Lake. Several more ambitious schemes have been advanced for providing lake transport services, but these have all foundered for lack of demand. The population centers served by the Lake are scattered and competitive rather than complementary, and there is little traffic between them. Air Transport 2.11 The Department of Civil Aviation of the Ministry of Transport and Communications is responsible for maintaining and operatingdLr fields; main- tenance of runways is delegated to PWD. Only the international airport at Accra can accommodate long-distance jets; the airports at Kumasi, Temale, and Takoradi have adequate facilities for medium-sized two-engine turbo prop aircraft. These are the only airports used by scheduled carriers, and their capacity is more than enough for present traffic. C. Transport Policy and Coordination Institutional Responsibilities 2.12 Transport organization and planning involves several Government departments and agencies. The Ministry of Transport and Communications is in charge of transport policy and regulations, and controls the agencies (the Railway and Ports Administration, and the Department of Civil Aviation) and the various state-owned corporations which supply transport services. The -5- Omnibus Services Authority is responsible for inter-city bus transport, and reports to the Ministry of Local Administration; the Volta River Authority reports directly to the Prime Minister's Office. The Public Works Department (PWD) of the Ministry of Works and Housing has charge of the trunk road net- work; responsibility for feeder roads and local roads is shared between PWD, the Ministry of Social Welfare and Rural Development, and local councils. The Government is planning to coordinate the responsibility for trunk and feeder roads at the regional level under PWD, and to reorganize the department's head office to enable the efficient handling of this new function (para. 3.09). Coordination and Planning 2.13 Transport planning is weak at all levels, and suffers from lack of coordination among the various Government agencies and departments. Far more economic analysis is required in the decision-making process. None of the agencies mentioned above (para. 2.12) keeps up-to-date financial and statistical information on its activities. The Infrastructure and Planning Division in the Ministry of Finance and Planning screens budget requests for transport infrastructure, but lacks the capacity for project evalua- tion. As recommended by the Nathan Study (para. 2.02), a Transport Planning and Budget Division was created in the Ministry of Transport and Communica- tions, and is expected in the future to screen budget requests for agencies responsible to the Ministry. This new Division also provides the secretariat for a newly created Transport Planning Committee, one of several secto-ra i planning committees established to assist in preparing a new five-year plan. In order to overcome the lack of trained personnel, the Division has initi- ated a program to send staff abroad for post-graduate training. A senior transport adviser provided by the Canadian International Development Agency (CIDA) will head the Division over a two-year period, pending the avail- ability of qualified Ghanaian staff. The Government has agreed at negotia- tions that it will improve highway planning under the proposed project (paras. 3.09 and 3.15). 2.14 The new Government has not yet formulated an explicit transport policy, but it has acknowledged that the main problems are restoration and better maintenance of the existing infrastructure. The budget estimates for 1972/73 and its accompanying statement reflect the high priority given to rehabilitation and to improved maintenance of existing trunk and feeder roads, as well as the emphasis placed on satisfying transport requirements directly related to agricultural development. The Government has also indicated its intention to improve railway operations, as well as to achieve a sound finan- cial policy for the various state corporations engaged in transport (para. 2.12). Steps are also being taken to encourage investment in commercial passenger transport rather than in private cars (para. 3.02). 2.15 The planning situation should improve markedly in the near future as a result of recent and prospective developments described above. However, there have been several instances in the past of investment decisions being taken in spite of economic analysis demonstrating the low priority of certain projects. It is hoped that Government will soon begin to follow its declared intention to investigate the economic and technical feasibility of all major investment projects, and to evaluate their justification in relation to Ghana%; -6 - development objectives. This question was discussed at negotiations, and the Government agreed that the PWD Planning Unit would in future submit to such an evaluation highway projects which are of major importance (i.e. projects expected to cost about 0 300,000 (US$260,000) or more). 3. HIGHWAYS A. The Road Network and Its Traffic 3.01 The road network in Ghana totals about 20,000 mi, of which about 2,600 mi are paved and 6,300 mi gravel or laterite surfaced; the remainder are earth roads. The rather extensive 'trunk road system has been built over the past 20 years at low cost to standards adequate for that time; but many roads have now reached the end of their service life, are structurally defi- cient for present traffic, and require increasing maintenance and rehabilita- tion. No major expansion of the trunk road network is required for several years, but rehabilitation at this time is important to avoid future increases in vehicle operating costs and major reconstruction. There is, however, a continuing need for expanding the feeder road system to support the develop- ment of agricultural production. To meet this priority, the Government has over the past few years made considerable investments through the National Feeder Road Program; since 1966, more than 2,000 mi of these roads have been constructed or improved. 3.02 Statistics on fuel consumption and available information on the vehicle population indicate that, over the past decade, motor vehicle traf- fic grew only slowly at about 3-4% per annum. The expected low rate of growth of the economy would suggest that this trend will persist at least over the next five years. The motor vehicle fleet now numbers about 56,000 units, of which about 50% are private cars and about 30% trucks (including the typically Ghanaian "mammy wagons" used for combined goods and passenger transport); the rest are buses and special purpose vehicles. The proportion of public conveyance vehicles has increased over the last two years following restrictions imposed on the importation of private cars, and purchases of buses by the Government. 3.03 Traffic volumes in the country are generally low: the highest levels are reached in the Accra-Kumasi-Takoradi area (Golden Triangle) where figures of 1,000 to 3,500 vehicles per day (vpd) have been recorded. Only 10% of PWD's network (about 600 mi) carries more than 600 vpd, and practically no road outside the main interurban routes in the south of the country carries more than 350 vpd. The Nathan Study showed that although much of the trunk road network is paved, road user costs in Ghana are still quite high; this is attributable mainly to the considerable deterioration of the condition of the network. 3.04 Most goods vehicles are of five-ton payload capacity, but there is a tendency toward heavier vehicles. The Road Traffic Regulations introduced in December 1970,provided for revision of the then 9-ton limit on axle load. The maximum grosb weight now permitted for any motor vehicle or trailer is 16 tons, for vehicles on three axles 22 tons, and for those on more than three axels, 28 tons; for articulated vehicles, the maximum on three axles -7- is 24 tons, and on four or more axles, 32 tons. The new regulations do not specify maximum permissible axle loads, and under the above overall weight limitations, these may reach 12 tons on single axle and 20 tons on tandem axles, levels which are clearly excessive for Ghana's present highway system. The problem of vehicle weight limitation was reviewed during nego- tiations, and the Government agreed that: (i) the existing vehicle weight regulation would be supplemented by a provision to impose a reasonable limit on axle loading - 10 tons for single axle would be adequate; and (ii) mea- sures will be taken to assure implementation of these regulations. Weighing scales will be provided under the project to assist in the enforcement of weight limit regulations (para. 4.10). B. Administration 3.05 The highway network can be divided into three categories, accord- ing to the importance of the roads and the agencies responsible for their construction and maintenance, as follows: (i) trunk roads; (ii) secondary and feeder 1/roads; and (iii) local roads. PWD is in charge of trunk roads (totalling about 6,300 mi, of which about 2,600 mi are paved), the only category for which responsibilities are clearly defined, and which receive continuing attention. Secondary and feeder roads (about 7,000 mi) are the concern of regional authorities, the Department of Social Welfare and Rural Development 2/, and local councils. Some lesser responsibility for secondary roads is also assigned to the following agencies: The Ministries of Agriculture and of Forestry, the Volta River Authority, the Cocoa Marketing Board, and private timber companies. Local roads are mostly unimproved tracks and village roads. 3.06 Although other agencies are involved in administering the road network, PWD is clearly the controlling body. Until three years ago, the organization of the Department followed the classic pattern of centralization: a strong Head Office which included the usual departments for engineering, construction, maintenance, and administration; and a pyramidal field orga- nization of regional and district offices. The regional offices carried out the annual maintenance program, and were responsible for execution of small projects; larger projects were the responsibility of Headquarters. PWD's administrative structure was satisfactory, but its capacity was seri- ously hindered by a shortage of qualified personnel at all levels. 1/ In the context of Ghana, the designation "feeder road' applies in a strict sense to roads built under the National Feeder Road Program (para. 3.01), and more generally to all secondary roads serving areas of agricultural production. 2/ Formerly the Ministry of Youth and Rural Development. -8- C. Recent Developments and Reorganization of PWD 3.07 In 1969, the Government undertook to decentralize several agencies, among them PWD. The Dpartment's nine regional offices, each headed by an engineer, were strengthened and given some autonomy; regional engineers were placed administratively under the Regional Chief Executive, but were expected to take technical advice from PWD Headquarters. Proper control of expendi- tures by PWD Headquarters was difficult since funds are channeled through the Regional Administration. Generally speaking, the decentralization as proposed had no clearly defined objectives. Feeder roads suffered particularly from this situation, as responsibility for their construction and maintenance was assigned to various agencies which did not necessarily have the required com- petence or capacity. 3.08 While the feeder road program was underway, the Government also allocated in 1969/70 increased amounts for maintenance and rehabilitation of the deteriorating trunk road network. Overall, however, results were disappointing, and did not reflect the amount of money expended. PWD lacked the staff and equipment neccessary for much of the deferred maintenance on the trunk roads, and had to resort increasingly to using small local contractors who operated without enough technical and financial control. For the feeder road program, too, the problems were the same; some of the roads, inadequately maintained to withstand heavy rains and flooding, were washed away within two or three years of construction. 3.09 The new military Government which came to power in January 1972 is anxious to see the large allocations for highways used effectively, and has undertaken extensive reorganization of PWD. The main lines of thrust of the reorganization now underway are: (i) continuing the decentralization policy, and regrouping all highway responsibilities within each region under the PWD regional office; (ii) establishing the present Engineering Department of PWD as an autonomous National Consultancy Corporation; and (iii)concentrating PWD activities on the planning, construction, and maintenance of highways, and divesting the Department of most of its non-highway responsibilities (building maintenance, housing, hydrology, etc.). The Government is consider- ing as a long-range plan the establishment of PWD as an autonomous Highway Authority. 3.10 The proposed reorganization would lead to a strengthening of PWD's role in highways, and as such, it appears to be a move in the right direction. It is not yet possible, however, to assess with any certainty the impact it would have on the Government's capacity to plan the road network, and to build and maintain it adequately. During execution of the proposed project, the Association will review the soundness of the new organizational arrangements, and will consult with the Government on apparent deficiencies and possible corrective measures. In this respect, particular attention will be paid to: (i) improving the planning and supervision of highway investment; (ii) clari- fying the allocation of responsibilities for secondary and feeder roads; (iii) maintaining sufficient central authority to coordinate and supervise highway maintenance and plant management; and (iv) exercising sufficient financial and technical control over the regions' highway maintenance opera- tions. -9- 3.11 PWD's operations are hindered by a serious shortage of qualified personnel at all levels. The professional staff establishment is about 300, of which more than a third of the posts are vacant. The main reasons for this shortage are the short supply of engineers and technicians, and the fact that salaries offered by PWD compare poorly with those outside the public sector. Aware of thig, the Government has undertaken, as part of the reorganization of PWD, a review of the general policy concerning working conditions and com- pensation for engineers and other technical staff. 1/ In order to allow PWD and other Government departments to retain qualified and experienced staff, the Government has directed the Income Commission to set reasonable limits on the possible disparity between compensation offered to Government personnel, and that offered by other public sector employers, e.g. state corporations and autonomous agencies. D. Financing 3.12 Funds for highway purposes are met mainly from the central Govern- ment budget. For pre-investment studies, larger construction projects, and for central workshop and equipment purchases, funds are allocated to the PWD central administration; for small projects and for maintenance work, allocation is direct to the regional administrations. Funds for the feeder road program have until now been administered by various agencies, but as the PWD regional offices take over this responsibility, future allocations will be made to them. Budgeting procedures appear acceptable, but control of expenditures, especially for maintenance, has been inadequate, and is further aggravated by the regionalization. 3.13 To accommodate the priority given to maintenance and rehabilitation and to feeder roads, budget allocations for highways have increased substan- tially over the past few years from a low 0 8.5 million in 1968/69 to about 0 30 million at present (Table 2). For maintenance alone, the allocation was raised from about 0 2.1 million in 1968/69 to roughly 0 10.5 million in 1969/70, and to about 0 16 million in 1972/73. Actual expenditures were approxi- mately as budgeted, except in 1971/72 when they were only about 70% of the unrealistically high budgeted allocation. 3.14 Taxes on vehicle ownership and use are levied mainly through import duties, purchase and sales taxes on equipment, fuel, spares, etc., and regis- tration fees. A new regulation which came into effect in January 1973 1/ There are now about 300 Ghanaian civil engineers, and an annual addition of about 20-30. Although these figures are high in comparison with other African countries, civil engineers remain in short supply. - 10 - requires that all vehicles have a roadworthiness certificate, the fixed fee for which includes an element of taxation similar to the license fee abol- ished in July 1971. Road user charges have in the past considerably exceeded the amounts spent on highways, especially during the period 1963-68 when re- venues more than doubled expenditures. The recent increase in road invest- ment, combined with declining revenues, has narrowed this gap, and a balance was achieved in 1970/71. This situation is likely to prevail over the next few years. E. Planning 3.15 The highway planning normally undertaken by PWD has been insuf- ficient for the substantial increase in highway operations over the past three years (para. 3.13). The "Ghana Highway Study Unit" established within PWD Headquarters to follow the recent highway rehabilitation and maintenance studies (para. 1.01) can form the nucleus of a planning group. This unit will be strengthened under the project, and will be made responsible for plan- ning highway expenditures, establishing and maintaining an inventory of all roads administered by NWD, and collecting and analyzing regularly the informa- tion necessary to follow development of the road network and of its traffic. The specific responsibilities of the PWD Planning Unit, and the deadline for its full establishment (July 31, 1974) were agreed upon during negotiations. The Government has requested CIDA to provide two experts for a period of about two years to assist the PWD Planning Unit; CIDA is reported to be con-- sidering this request favorably. In connection with transport planning, the Government also agreed to complete an inventory of all PWD-administered roads, and to keep it up-to-date in the future. 3.16 The 1972/73 budget reflects the continuing emphasis on maintenance and rehabilitation of trunk roads. Government policy in respect of feeder roads is to stress maintenance of existing ones, and to slow down new construc- tion. At the suggestion of the Bank Group, the Government has comissioned the Building and Road Research Institute (BRRI) at the University of Sciences and Technology at Kumasi to undertake a study of future requirements for maintenance and construction of feeder roads. The findings of this study would be used as a basis to formulate a highway maintenance program as pro- posed under the project (paras. 4.08 and 4.09), and to define the feeder road requirements for planned agricultural development projects in rice and oil- palm production which are now under consideration by the Association. F. Engineering and Construction 3.17 Pre-investment studies for major highway projects are normally done by international consultants, the notable exception being the feeder road studies undertaken by BRRI (para 3.16). In line with its policy of self- reliance, the Government is anxious to develop a local consulting organiza- tion which can handle large projects, and hopes that the proposed National Consultancy Corporation will satisfy this need. The Government does recog- nize, however, that specialized foreign expertise will be required for some years to carry out the feasibility studies, engineering, and supervision of major highway projects. - 11 - 3.18 The design of smaller road projects has been undertaken by local consulting firms established mainly in structural engineering, and whose capacity is limited at present to the simplest aspects of highway engineer- ing. These firms have also provided field supervision of small- and medium- sized construction contracts, notably for feeder roads, but the experience in this field has been disappointing. Generally, the Government has not worked towards grooming this infant industry. Selection of consultants is not always related to their past performance, and PWD has in several instances been lax in supervising them and in providing the necessary guidance and technical quality control. Following the discussions on this matter held during negotiations, the Government indicated that it will direct the Ministry of Works and Housing and the Ghana Institute of Engineers to investigate the procedures of selection, engagement, supervision, and remuneration of consult- ants, with a view to proposing improvements which would create a proper setting for the sound development of local consulting firms. 3.19 PWD does practically no force account construction work. Major contracts are normally awarded after competitive bidding on the basis of bills of quantities. To be eligible to tender for Government works, con- tractors are required to register with the Government. Nearly 200 contrac- tors are registered to do road works in one of four classes, namely: (i) exceeding 0 250,000; (ii) 0 100,000 - 0 250,000; (iii) 0 25,000 - 0 100,000; and (iv) below 0 25,000. 1/ There are seven or eight indigenous firms in the highest class (the largest being the autonomous State Construction Corpora- tion), and six or seven foreign contractors, only one of which is active. Most contractors in the other classes are mainly building contractors who are not equipped for high quality roadworks, and whose activity is thus limited to regravelling and construction of small drainage structures. 3.20 PWD has supervised the most recent road construction jobs, but its control is seriously hampered by inadequate staffing and equipment. Workman- ship bas been poor on the repair and maintenance works done recently. To remedy this, more effective control is required, including proper authority of the controlling agency to reject sub-standard work. G. Maintenance 3.21 Soon after independence in 1957, the highway network was improved by a major paving and upgrading program which made Ghana's road system one of the best in West Africa. Some new roads were built or improved during the 1960's, but the system as a whole deteriorated because of low budget allo- cations for maintenance, late release of approved funds, lack of equipment and spare parts, and understaffing of PWD. These problems were aggravated by the combined effects of inadequate drainage structures, severe floods (especially in 1968), and roads built to standards unsuited for present tratfic. 1/ In US$ equivalents: (i) exceeding US$217,500; (ii) US$87,000 - US$217,500; (iii) US$21,750 - US$87,000; and (iv) below US$21,750. - 12 - 3.22 Since 1970/71, the allocations for highway maintenance have been restored to a level which could be considered satisfactory under normal conditions, i.e., if there were no accumulated backlog of equipment renewal and deferred maintenance. The condition of the network, however, has hardly improved in relation to these increases, primarily because PWD has been unable to use the funds effectively. The main reasons for these shortcomings have been: (i) insufficient personnel, particularly qualified staff; (ii) lack of central control, both technical and financial, over expenditures; and (iii) low efficiency of the now largely obsolete equipment fleet. 3.23 The Crown Agents completed in October 1972 the draft final report of the highway maintenance study (para. 2.02). They recommend a four-year highway maintenance program including: (i) measures for increasing staff levels and training the labor force necessary to carry out a sufficient volume of work; (ii) renewal and expansion of the equipment fleet, and reconditioning of workshops and stores as necessary; and (iii) elimination of the existing backlog of deferred maintenance of gravel roads. The Govern- ment has confirmed its intention to prepare and implement such a program. Additional preparation work will be required to define adequately the proposed highway maintenance program, notably to adapt the Crown Agents' recommenda- tions to the proposed new organization, and to take into account the require- ments for maintenance of feeder roads. 3.24 The additional work necessary to formulate a highway maintenance program on the basis of the Crown Agents' study and of the BRRI Feeder Road study will be undertaken under the project (paras. 4.08 and 4.09). The time- table and the scope for preparation of the proposed maintenance program have been discussed and agreed during negotiations. The Government has confirmed that upon completion of the above preparation work, it will consult with the Association on the scope and the timetable for implementing the proposed highway maintenance program. The present project emphasizes rehabilitation, together with the proposed program to improve maintenance of primary, secondary, and feeder roads; as such, it will provide over the next four years the essentials of a sound highway policy. The proposed maintenance program could possibly form the basis for a future Bank Group operation. 3.25 The Crown Agents' study also confirmed the assessment of several Bank Group missions that central control over highway maintenance expenditures should be strengthened. Although the funds voted centrally for maintenance could be adequate, they are sometimes diverted to other uses, and PD Headquarters is powerless to prevent this. This problem was discussed at negotiations, and the Government agreed that it would strengthen the control of highway maintenance funds administered by PWD regional offices, and would direct these offices to account to PWD Headquarters for the use of such funds. - 13 - 4. THE PROJECT A. General Description 4.01 The proposed project consists of: (i) a three-year program for rehabilitation and improvement of 13 sections of trunk roads (totalling about 345 mi), including consulting services for supervision of these works; (ii) pre-investment studies to prepare future projects for reha- bilitation and improvement of trunk roads; (iii) formulation of a program to improve the maintenance of trunk, secondary, and feeder roads; and (iv) acquisition of equipment for traffic control and pavement survey. Rehabilitation and Improvement of Trunk Roads 4.02 The proposed project includes road rehabilitation or improvement works along the major transport corridors as follows: (a) Accra - Takoradi, (b) Accra - Kumasi, and (c) Accra - Ho. It also provides for similar works on some roads south of Kumasi, and in the rich agricultural region northwest of Accra. The project roads and the works proposed are described in Annex I a-nd summarized in Table 3. 4.03 The proposed project is based on economic and engineering studies carried out in 1970/71 by SWKP (para. 1.01), and their recommendation of a rehabilitation and improvement program for about 750 mi of roads. Of these, the Government has with its own resources undertaken, directly or under con- tract, the required works on about 215 mi; the 345 mi of roads now included under the present project are those,of the remainder of the proposed program which have highest priority. The other roads (190 mi) left over from the initial program comprise: (i) about 170 mi whose improvement could be postponed for three or four years without the risk of irreparable deterioration, and (ii) an isolated section of about 20 mi of timber road which the Govern- ment prefers to consider later as part of a more comprehensive project, including a link with the main road network. 4.04 SWKP has prepared for the project roads drawings and specifications, as well as contract documents; these were all reviewed during appraisal, and were found satisfactory for the works envisaged. Physical quantities for rehabilitation and improvement works are based on engineers' estimates, and are adequate to allow preparation of reliable cost estimates for all sections included in the project. In the case of partial reconstruction - Winneba- Swedru (11.3 mi) and Accra-Nsawam (19.4 mi)- some further detailed engineer- ing is required to prepare final bill of quantities and tender documents, and this will be carried out by the supervising consultants under the pro--- ject. The consultants will also re-assess the scope of pavement repair works - 14 - required on the section Winneba Junction - Mankesia (28.5 mi) which has re- ceived some emergency repairs since completion of the SWKP engineering studies in 1971. Supervision of Construction 4.05 The Government is planning to retain SWKP, the consultants who prepared the project, to supervise the proposed highway rehabilitation pro- gram, and to carry out the necessary complementary engineering. To take ad- vantage of on-the-job training opportunities offered under the project, while at the same time maintaining the necessary performance standards, the follow- ing procedure will be used. SWKP would have full responsibility for the staff to be employed for supervision, and would, to the extent possible, em- ploy Ghanaian personnel at both professional and non-professional levels. SWKP would organize on-the-job training for inspectors of works. The proposed arrangements for employment and training of Ghanaian personnel are reflected in the consultants' Terms of Reference and in their contract; final drafts of these documents were reviewed and approved at negotiations. 4.06 Due to the special nature of the works and the large area to be covered, the cost of supervision will be somewhat higher than for normal road construction contracts. Although Ghanaian engineers and technicians will be employed to the extent possible, a large contingent of foreign person- nel will be required. The estimated manpower requirements are 19 engineers, and 14 qualified technicians, of whom p)robably one-third would be Ghanaians. Total requirements would be about 670 1han-months over three years, with Ghanaian personnel accounting for about 30-35% of this total. Pre-Investment Studies for Future Rehabilitation and Improvement Projects 4.07 By the time the present road rehabilitation and improvement program is completed, many other roads will have become due for similar works. The project includes economic and engineering studies to evaluate and, if justi- fied, to prepare the rehabilitation and improvement of 14 Lections of trunk roads totalMlg i_bout 750 mi (see Annex II). These roads offer prima fade evidence of being econoically justified over the period 1977-79. The list comprises the remainder from the initial SWKP program (para. 4.03), several projects not found immediately justified at the time of the SWKP study, and some reconstruction projects from Government's investment program. It is anticipated that engineering and bidding documents will be prepared for about 500 of the 750 mi of roads selected for feasibility study. The total length of roads to be engineered for rehabilitation, improvement, or recon- struction works, will be determined by the Government in agreement with the Association; this determination will be made on the basis of conclusions of the feasibility studies, and in relation to the amount of resources expected to be made available for highways from both internal and external sources over the period 1977-79. - 15 - Formulation of Highway Maintenance Program 4.08 As mentioned previously (paras. 3.24 and 3.25), there is need for a program to strengthen the highway maintenance organization and to eliminate a backlog of deferred maintenance. Such a program has been recommended by the Crown Agents, and is of high economic priority. _The additional prepara- tion work necessary to define in detail the scope of each of the components of the proposed maintenance program will be carried out under the project. ThiCrown Akents' proposals will have to be revised and :p,hded to take into account the additional maintenance requirements of secondary and feeder roads added to ke resWo6siblrifQf xegional offices. Complementary prepara- tion will also be required on the economic justification of the r program, as well as on itsc 2 BC]$$ $A.d4cis, The scope if the proposed preparation works has been discussed and agreed during nego- tiations, and the Government has undertaken to complete this part of the project by May 31, 1974. 4.09 The proposed preparation of a highway maintenance program will be as much as possible an in-house effort by PWD. It will be carried out by a special maintenance task force established within PWD, and headed by an experienced engineer of the Department. The proposed task force will be assisted as necessary by individual consultants. The organizational arrange- ments for establishment of the proposed task force and the scope and duration of the necessary advisory services (five experts for three months, i.e. 15 man- months) were discussed and agreed during negotiations. In view of possible future CIDA assistance for purchase of highway maintenance equipment and for staff training, the Government has requested that agency to provide the neces- sary advisory services to assist the proposed task force. Although not in a position to react officially to the Government's request, CIDA representatives who met with the Ghana and Association delegations during negotiations indicated that the request would be considered favorably, and an answer communicated promptly. As CIDA assistance is not yet sure, however, a provision of US$100,000 is included in the proposed Credit to finance the foreign exchange cost of advisory services to assist the proposed task force. Equipment for Traffic Control and Pavement Survey 4.10 As outlined previously (para. 3.15), the Government will proceed to strengthen the existing WD Planning Unit, to complete and maintain a road inventory, and to establish systematic procedures to collect and analyze the information necessary for monitoring evolution of the road network. To assist in all this, the project will provide traffic counters and equipment for testing the structural strength of existing pavements, as well as weighing scales to assist in enforcing weight limit regulations (para. 3.04). The detailed purchase program proposed by the Government is expected to be sub- mitted to the Association by September/October 1973. B. Cost Estimates 4.11 The project is estimated to cost approximately US$20 million equiv- alent, including foreign exchange costs of about US$11 million. Estimates - 16 - of project costs (based on prices at end-1972) are detailed in Table 4 and summarized below: '000 US$ '000 equivalent Foreign Local Foreign Total Local Foreign Total Component (%) (a) Rehabilitation and improve- ment of about 345 mi of trunk roads 6,660 8,140 14,800 5,790 7,080 12,870 55 (b) Construction supervision 410 1,05 1,435 380 890 1,270 70 (c) Pre-investment studies 360 360 720 310 310 620 50 (d) Advisory services for preparation of a highway maintenance program 20 110 130 15 100 115 85 (e) Equipment for traffic control and pavement survey 40 385 425 35 335 370 90 (f) Contingencies: Physical 710 915 1,625 615 800 1,415 Price Escalation 1,700 1,570 3,270 1,480 1,365 2,845 TOTAL 9,900 12,505 22,405 8,625 10,880 19,505 56 (rounded)(10,000) (12,500) (22,500) (8,500)(11,000) (19,500) 4.12 The cost estimates for rehabilitation and improvement works are based on the SWKP studies, and revised to reflect changes in the parity of the cedi,and price inflation over the period from mid-1971 to end-1972. A quantity contingency allocation of 10% has been provided. The price es- calation contingency has been estimated on the basis of an annual increase of 6% for the foreign exchange component of the project, and 12% for local cost; this takes account of the high rate of price escalation over the period 1971/72. 4.13 Cost estimates for consulting services for construction supervision and for advisory services for the maintenance task force are based on average man-month rates for various levels of professional qualifications, and take account of the higher cost of foreign personnel. Cost estimates for pre- investment studies are based on an estimate of man-month requirements of engineers and economists, and on per-mile estimates of the cost of specialized - 17 - technical works such as aerial photography, topographic surveys, and geotech- nical tests. For the per-mile estimates, the low average figure of about US$600 is adequate, because most of the projects consist of upgrading and rehabilitation of existing roads, some of which have already been studied. Most of the technical services will be provided locally (para. 4.19). 4.14 The foreign exchange component of road construction works is estimated to be 47% for contracts executed by local contractors, and 62% in the case of foreign contractors. Assuming that about half of the contracts will be awarded locally, the overall foreign exchange component is about 55%. For consulting services, the estimated foreign exchange component takes into account the anticipated participation of Ghanaian firms and personnel, and is estimated at 70% for supervision, and at 50% for pre-investment studies. The tax element of the rehabilitation works is estimated at 12%. C. Execution 4.15 The Ministry of Works and Housing will be responsible for exe- cuting the project through the PWD, with consultants SWKP providing direct field supervision. SWKP will also establish a central project unit to support the resident staff, to coordinate execution of the proposed rehabilitation and improvement program, and to organize and implement on-the-job training of field supervisors. The Government will assign a qualified engineer to follow the program and to provide the necessary liaison. This arrangement, and the requirement that consultants be employed under terms and conditions acceptable to the Association, was confirmed during negotiations; at that time also, the draft supervision contract between the Government and SWKP was reviewed and agreed (para. 4.05). 4.16 SWKP has already assisted the Government in preparation of prequali- fication documents, and additional services may be required prior to signature of the proposed Credit for processing and evaluating prequalification appli- cants. Retroactive financing in the amount of US$25,000 is provided to cover the foreign exchange cost of these services from March 1, 1973. 4.17 Contracts for rehabilitation works will be awarded after prequal- ification, on the basis of international competitive bidding following Bank/ IDA guidelines. The program includes contracts of various sizes ranging from about US$400,000 to US$3 million, and with completion periods of between 9 and 21 months. The Government is now being assisted by SWKP in preparing final proposals for appropriate phasing and grouping of contracts into pack- ages. The "packaging" will permit firms to bid at contract sizes which fit their capacity. Contractors will be allowed to bid for a single road section or for combinations; some of the contracts will enable local contractors to compete. The preparation of prequalification documents has been completed, and invitations to tender for the first "package" will be issued by November 1973. Construction is scheduled to start by early 1974. The Government has confirmed that in accordance with the relevant existing laws and regulations, it will arrange to facilitate contractors' registration, mobilizing of foreign personnel, importing of equipment and materials, and transfer abroad of foreign exchange necessary for project execution. - 18 - 4.18 The proposed rehabilitation and improvement works are spread widely over the densely populated area of the country, which will facilitate con- struction methods implying a high labor content. Because of heavy taxes imposed on imported equipment, and the scarcity of foreign exchange, the methods used by Ghana's road construction industry have been developed over the past ten years under conditions favorable to the use of labor. Another reason favoring such use is the fact that the construction industry includes a large number of small contractors who have limited capacity for capital investments in plant. Works under the project will provide employment for about 1,000 persons over its three-year execution period. 4.19 The Government is planning to entrust the pre-investment studies to the proposed National Consultancy Corporation (para. 3.09), but final arrangements will be possible only after the Corporation has been established. A judgment is not yet possible on whether the proposed Corporation will have the capacity to carry out this assignment, particularly in economic analysis and in pavement design, and the Corporation might seek cooperation with a foreign consulting firm. As is usual with large pre-investment studies, the Association and the Government would first agree on terms of reference, and the Corporation would then be expected to submit a detailed proposal, includ- ing staffing arrangements, for approval by the Association. 4.20 The equipment will be procured following competitive bidding in accordance with Bank/IDA guidelines. D. Financing and Disbursement 4.21 Financing of the project will be as follows: (a) IDA will finance: (i) 65% of the total cost of rehabilitation and improvement works; this represents about 74% of the cost of this item net of taxes, and covers the entire foreign exchange component and about 22% of local costs; (ii) 70% of the total cost of consulting services. For the supervision contract, this proportion represents the entire foreign exchange component; for the pre-investment studies, it represents the foreign component and about 40% of local costs; and (iii) the actual foreign exchange cost of equipment purchases, and of advisory services for assistance in preparation of the highway maintenance program. (b) Ghana will finance: (i) 35% of the cost of rehabilitation and improvement works; (ii) 30% of the cost of consulting services; and - 19 - (iii) the local cost of equipment purchases and of advisory services for preparation of the highway maintenance program. 4.22 In the case of construction and consultant contracts, disbursement will be based on a fixed percentage of 65% and 70% respectively of the cer- tified monthly statements. Payment for the acquisition of equipment will be based on the CIF cost. 4.23 It is expected that construction work will start by early 1974, and will take three years to complete. Table 4 shows the financing plan for the project, and Table 5 the estimated schedule of quarterly disbursements from the Credit, With the prior agreement of the Association, any surplus funds under the Credit Account would be allocated to further rehabilitation works. 5. ECONOMIC EVALUATION 5.01 When the project was initially evaluated in November 1971, the economic rates of return for individual improvements included in the present project were found to range from 12% to 42%, with first-year benefits in excess of 10%, indicating that the timing of construction over the period 1973-75 was appropriate. The November 1972 re-appraisal showed that the conclusions of the initial analysis have essentially not been affected by recent developments. Table 6 gives for each road section its traffic, brief information on its economic context, and the economic return and first-year benefit. Traffic 5.02 Since the economy of Ghana is expected to grow slowly over the next few years, similarly slow growth can be expected in the demand for road transport. For passenger transport, this demand will rise more rapidly than for goods transport, because of rapid population growth in the main urban centers. On average, passenger traffic is expected to grow by 3% p.a. up to 1976, and by 4% p.a. thereafter. 5.03 The figures on traffic growth of cars and small buses used for the economic analysis of the project roads varies from 1.5 - 5.5% p.a. between 1972-76, and from 2.0 - 6.5% between 1976-81. The higher rates were adopted only for the main Accra-Kumasi route (Sections 20 B and 46, Table 3), and reflected both the anticipated growth in inter-urban passenger movement, and the fact that demand for truck transport is expected to grow at only 1% p.a. as people use part of their increased income to pay for greater comfort in travel, and switch from "mammy-wagons" to buses. The annual rate of growth of goods traffic is expected to be between 1.5 - 2.0% up to 1976, and 3% thereafter. Passenger traffic is expected to grow much more slowly in the north of the country than in the south; the reverse is true for goods traffic, as the north will be the main source of future increases in production of - 20 - basic foodstuffs. Spot-checks conducted in November 1972 indicated increases in daily traffic of 5% or more on selected important routes over the period 1971/72, suggesting that the above projections are conservative. Level of Improvement 5.04 The project works will reduce high operating costs incurred by ve- hicles using the project roads which are now in a poor state of repair. For each road, two levels of rehabilitation were analyzed: the lower level con- sists of repairing failures, and removing the causes of the failures; the upper level includes upgrading roads to somewhat higher engineering standards. The consultants selected for each road section the level of rehabilitation which would minimize the net present value of total transport expenditures (comprising for a given road section the vehicle operating costs, and expenditures for improvement, repair, and maintenance) over the expected economic life of the improvement and rehabilitation works proposed for each section. 5.05 The review conducted in November 1972 has indicated the various levels of improvement initially selected to be still appropriate, except for the Accra-Nsawam road (Section 46, Table 3) which justifies a higher level of improvement in view of the permanent rerouting to this road of most of the traffic between Accra and Kumasi (see Annex I). The revised rate of return for this road was estimated on the basis of the SWKP study, with simplified assumptions to take account of the higher traffic levels. It was also necessary to re-evaluate on the basis of simplified assumptions the scope of works and the economic return to rehabilitation of the section Mankesim - Winneba Junction (28.5 mi) which has received some emergency pavement repairs since completion of the SWKP study. 5.06 The economic costs of rehabilitation used in the economic analysis are the estimated costs of the work, including physical contingencies and supervision. A ten-year economic life of the projects has been assumed, and all periodic costs to be incurred during that time have been included in the analysis. This duration of economic life is considered reasonable for the rehabilitation work which comprises the bulk of the project, but appears rather conservative for improvement and upgrading. Benefits 5.07 The benefits of the proposed project have been quantified in terms of cost savings, and have not been related directly to increases in produc- tion; there is no doubt, however, that less expensive and more reliable road transport on major primary roads will facilitate the development of trade, and allow more efficient and increased production. The project roads serve zones with relatively high agricultural activity and population den- sity. Many of the roads are part of inter-regional transport routes. Table 6 provides qualitative information on the nature of traffic carried by the project roads, and thereby gives an idea of the economic activities which are likely to benefit from the project. Passenger traffic plays a dominant role on most of the roads which are part of inter-city corridors. Important com- modities by tonnage are petroleum products, foodstuffs, cocoa, and timber. - 21 - Given the fair degree of competition prevailing in the road transport in- dustry, it can be reasonably assumed that the transport cost savings resulting from the project will be passed on to farmers, consumers, and passengers. 5.08 Directly quantifiable benefits from the improvements works consist of savings in road transport costs and reductions in maintenance and repair expenditures. To estimate these benefits, the consultants undertook extensive field work, and costed the operation of four typical kinds of vehicles in Ghana under different conditions with respect to surface type, road condition, and alignment. Because of the relatively low traffic volume on the roads in question (only five sections carry more than 1,000 vpd - Table 6), costs due to congestion are not relevant. The effect on operating costs of varia- tions in operating speeds resulting from the road condition on each section has been computed, and is shown graphically in the Plate. The savings in vehicle operating costs for each of the project roads for various classes of vehicles are shown in Table 7. 5.09 In addition to savings in vehicle operating costs, the consultants calculated the savings in costs for recurrent and periodic maintenance which the restoring of the project sections to good standards should allow. Sensitivity Tests 5.10 The economic evaluation of each of the project roads relies on a number of inputs which have been quantified with varying degrees of certainty. The estimates of future traffic growth-and savings in future road transport costs appear well-founded and conservative. The estimates of the cost of civil works proposed under the project appear, however, to include some elements of uncertainty, due to the fact that there is in Ghana no recent experience of large road construction contracts awarded on the basis of int6rnational competition. The economic net rate of return of the various project roads have therefore been tested for a 10% increase in road con- struction costs (see Table 6). 5.11 It was not found necessary to use a shadow price for labor costs, as wage rates for skilled and semi-skilled workers appear to reflect oppor- tunity costs. The opportunity costs of unskilled labor in some parts of the country is below the existing PWD rate, but the extent is unknown. No study has been made to estimate the differential between total real income of PWD's and other unskilled labor. A shadow rate for this labor would probably have led to slightly higher estimates of the returns for each road section. 5.12 Another source of uncertainty arises from the difficulty in assessing the equivalence between the local and foreign exchange components of the pro- ject cost. The conclusions of the economic analysis were therefore tested for values of the exchange rate up to 140% of the official rate of the cedi. This sensitivity analysis showed that variations in the exchange rate af- fected the rate of return of the different road sections only slightly, as in- creases in benefits were very nearly compensated by increases in costs. The structure of the construction cost (foreign exchange content and labor) is largely similar to the structure of the benefits considered, namely reduced vehicle operating costs, and savings in road maintenance expenditures. - 22 - Conclusion 5.13 The estimated rates of return for each road section resulting from the analysis outlined above are conservative figures which provide a sound basis for evaluating the economic justification of the project. The returns on individual sections of the project range between 12% and 36%, to be com- pared with an estimated opportunity cost of capital in Ghana of about 10%; the weighted average return of the project is estimated at about 22%. The average return of the project with a 10% increase in road construction costs is about 19.5%, with individual returns ranging between 10% and 33%. The project is therefore economically justified. 6. AGREEMENTS REACHED AND RECOMMENDATION 6.01 During Credit negotiations between the Government and the Association, the following principal items were discussed and agreed: (i) the need for economic and technical evaluation by PWD of all future highway projects of major importance, and for its assessing the justification of such projects in relations to Ghana's development objectives (para. 2.15); (ii) supplementing the existing regulation on vehicle weight control by a provision to impose a reasonable limit on axle-loading (para. 3.04); (iii) a time-table for formal establishment of a Planning Unit within PWD, including details of its specific responsibilities (para. 3.15); and (iv) measures to be taken by the Government to ensure a proper setting for sound development of the local consulting industry (para. 3.18); and (v) strengthening the control by PWD Headquarters of the use of highway maintenance funds administered by its regional offices (para. 3.25). 6.02 The project is suitable for a Credit of US$13 million equivalent to the Government of Ghana on conventional IDA terms. June 29, 1973 TABLE 1 GHANA FIRST HIGHWAY PROJECT Estimated Road and Rail Output, 1969 (million ton-miles) Road % Rail % Total Timber 83 53 75 47 158 Cocoa 38 56 28 44 66 Manganese - 0 18 100 18 Bauxite - 0 39 100 39 Agricultural 86 97 3 3 89 Building Materials 61 95 3 5 64 Petroleum 50 96 2 4 52 Other 103 96 4 4 107 TOTAL 421 71 172 29 593 Sogrce Transport Sector Study by Nathan Consortium, May 1970. December 1971. GHANA FIRST HIGHWAY PROJECT Estimates of Budgeted and Actual Highway Expenditure 1968-72 (million cedis) 1968/69 1969/70 1970/71 1971/72 1972/73 Budgeted Actual Budgeted Actual Budge Actual BudgetedActual Budgete Trunk Road Construction 3.5 2.3 5.1 .2 7.2 9.3 15.d (9.)e-41 10.1 Feeder Road Construction 1.5 2.5 4.0 5.7 5.0 4.8 11.8 (7.1)e 2.8 Road Maintenance and Rehabilitation 2.1 2.0 10.5 9.7 11.8 10.7 17.7 (13.3)e 16.1 Technical Services (Consultants) 0.1 0.1 1.3 1.2 0.1 - 2.0 (2.0)e 0.4 Other Road Tr nsport Investnent2' 1.3 1.1 2.1 1.6 2.9 2.5 2.7 (2.7)e n.a. TOTAL 8.5 8.0 23.0 23.4 27.0 27.3 50.0 (34.6)e 29.4 1/ This includes ferry services, hydrological works,and community development programs. 2/ Preliminary estimates based on rough evaluation of overall percentage of amounts spent compared with initial budget. Source : PWD, Novenber 1971 December 1971. r-0 GHANA FIST HIGHWAY PROJECT List of Project Roads, Proposed Design Standards for Rehabilitation Works and Construction Cost Estimates Overall~ Desige Stand1rds Construction Cost- Length Width Width Design Speed (0 000, Nov. 1972 values) Sub-Project Number Road Name (mi.) Scope of Proposed Improvements of formation Pavement (when appropriate) Total Average per mile 11 A Techiman to Chira 25.7 Improvement and paving of 32 ft 22 ft 60 mph 1,012 35.0 existing gravel road 20 B Anyinam to Kumasi 81.0 Improvement of vertical alignment, 36 ft 24 ft - 4,216 47.3 widening and partial reconstruc- tion of pavement 21 Kumasi to Anviankwanta 15.3 Widening of formation improvement 36 ft 24 ft - 745 44.4 of vertical alignment and draina- ge widening of pavement 22 Anviankwanta to Bekwai .0 Same as 21 34 ft 24 ft - 228 40.5 35 Yamoransa to Sekondi Jot 46.1 Reconstruction of shoulder and 36 ft 24 ft - 2,213 43.6 widening and repair of pavement 36 Mankesim to Yamoransa 16.5 Same as 35 36 ft 24 ft - 510 28.1 37 Winneba Jet to Mankesim 28.5 Same as 35. Scope of pavement 36 ft 29 ft - 798 28 repair to be re-assessed under the project 38 Accra to Winneba Jet 34.0 Same as 35 36 ft 24 ft - 1,100 29.1 39 Winneba to Winneba Jet 2.5 Widening of the formation and 36 it 24 ft - 138 50 widening and strengthening of pavement 41 Winneba Jet to Swedru 11.3 Reconstruction on the basis of 36 ft 24 ft 60-70 mph 1,088 87.5 detailed engineering to be carried under the project 45 Adaiso to Kade 37.4 Reconstruction of the shoulders 36-30 ft 24-22 ft - 818 19.9 and widening and strengthening of pavement 46 Accra to Nsawam 19.4 Reconstruction on the basis of 36 ft 24 ft 70 mph 1,557 72.9 detailed engineering to be carried out under the project 50 Trom Jet to Kpong 9.8 Reconstruction of shoulders and 30 ft min. 22 ft - 515 47.7 widening and strengthening of pavement 51 Kpong to Anyirawasi 36.2 Sames 0 30 ft min. 20-22 ft - 860 21.6 TOTAL 340.3 hLx 1/ hot including agineering, supervision and contingacies. f/ Estirates based on updating of initial SlfKP estimates (037,700 per mi) to take into account more limited scope of Pavement strengthening and repair. Source: SWP Road Rehabilitation Program, September 1971 Mission estimates, November 1971 and November 1972 May 1973 GHANA FIRST HIGHWAY PROJECT Cost Estimates and Financing Plan -------------- Cost Estimates-------------------- Foreign --------Financing Plan-------- ------ (0 r000) -------(US$ '000)------- Exchange --(z '000)--- -(LEE '000)-- IDA as % Local Foreign Total Local Foreign Total Component Govt. IDA Govt. IDA of Total (a) Rehabilitation and improvement of about 3h5 miles of trunk roads 6,660 8,ih0 1,800 5,790 7,080 12,870 55% 5,180 9,620 4,505 8,365 65% (b) Consulting services for constmction suoervision b10 1,025 1,435 380 89C 1,270 70% 1L0 1,025 380 890 70% (c) Consulting services for pre-investment studies for improvement of about 700 miles of roads 360 360 720 310 310 620 50% 215 505 185 135 70% (d) Advisory services for preparation of a highway maintenance program 20 110 130 15 100 115 85% 2G 110 15 100 85% (e) Equipment for traffic control and pavement survey 40 385 825 35 335 370 90% 40 385 35 335 90% (f) Contingency provisions for: (I) increases in physical quantities -- 10% on (a) and (b) 710 915 1,625 615 800 1,15 560 1,065 185 930 65% (ii) increases in prices -(a) 10% p.a. local 7.5% p.a. foreign 1,655 1,70 3,125 1,40 1,280 2,720 1,095 2,030 -(b), (c), (d), and (e) 5% 85 100 145 40 85 125 35 10 Subtotal (ii) 1,700 1,70 1,865 65% Subtotal contingencies (f) 2,9L 2,485 L,9 2,095 2,165 2 1,690 L 0 1,865 2,7 5 TOTAL 9,900 1205 22 0 8,625 0880 19,55 56% 7,515 1L,845 6,585 12,920 66% (Rounded) 10,000 120 22,500 8,500 11,000 19,50( 7,500 LL200 6,00 _0' Sources: SWKP Road Rehabilitation Program, September 1971 Mission estimates, November 1971 and November 1972 June 1973 TABLE S GHANA FIRST HIGHWAY PROJECT Estimated Schedule of Disbursements IBRD/IDA Fiscal Year Cumulative Disbursements and Quarter Ending at end of Quarter 1973/74 December 31, 1973 50 March 31, 19745 June 30, 1974 700 1974/75 September 30, 1974 1,350 December 31, 1974 2,1050 March 31, 1975 3,500 June 30, 1975 5,000 1975/76 September 30, 1975 6,500 December 31, 1975 8,000 March 31, 1976 9,500 June 30, 1976 10,500 1976/77 September 30, 1976 11,500 December 31, 1976 12,300 March 31, 1977 13 ,000 Clos1g Date: December 31, 1977 Source., Mission estimates, November 1972. June 1973. GHANA FIRST HiGHwAY PROJECT Economic Evaluation of Project Roads Sub Projects Traffic _ Ec1onic Analysis _ Economic Context Sensitivity 10% Increase in Traffic Structure of Traffiel/ Constircti costi Length 1971 by Vehicle Ciasses %F Economic Corst Veer Economic Main Traffic u No. Road Name (.* y.p.d Ja 1 (3) (4) Rate of Return% Benefits % Rate of Return % Economic Role Connodities (tonnags) 20B Anyina to Kumasi 81.0 940 61 8 23 8 22.5 19.3 20.4 Aecra-Kumani corridor; Manufactured goods, 000.0, inter-regional trade. foodstuff. timber produce collection 21 Kumasi to Anwiankanta 15.3 1,060 58 15 21 6 12.1 13.2 10.3 Kumasi-Cape Coast- Passengers. tnber, cocon, Takoradi corridor, inner foodstuft regional trade, produce 22 Anwiankwanra to Bekwai 5.1 540 50 17 26 7 27.3 24 24.5 collection 35 Yamoronsa to Sekondi Junction 46.1 1,170 54 9 27 10 19.2 8 17.1 Acra-Cape Coast- Passengers, petroleum products 36 Mankesim to Yamoronsa 16.5 1,250 57 14 25 4 36.3 27 33.5 Takoradi corridor, inter manufactured goods,timber, 37 Winneba Jet. to Mankesim 28.5 960 57 T 2 25 b 15.6 1L.5 12.5 cer mmuntiatidos, foodstoff 38 Accra to Winneba Jet. 34.0 1,700 58 18 31 3 30.3 23 27.2 39 Winneba to Winneba Jet 2.5 1,053 69 17 13 1 17.3 17 15.1 Linking Wieneba wth Passengerc, petroloum products Accra-Cape Coast-Takoradi manufactred goods.timber corridor foodstuff, fish 41 Winneba Jet to Swedra 13.3 810 54 28 15 3 13.8 14 11.8 Regional link with Accra- Passengers, cocoa, foodstuff Takoradi corridor, produce collection 45 Adaiso to Kade 37.4 430 51 30 14 5 17.8 19 15.4 Produce collection Cocoa, maie, other foodstuff; in the future, palm oil from proposed IDA-financed project srond Kw 46 Accra ta Nsavam 19.4 3,400 61 16 18 5 26.8 25 24 Accra-Koforidua-Kumasi Passengers, petroleum producis, corridor; inte-regionsl manufactured goods, foouff trade, supply of Accra S0 Teen Jet To Kpong 9.8 620 51 34 14 1 23.4 21 21 Link between Accra and Manufactured goods, foodstuff Volta region and Akonombo Dan, inter-regional trade, produce collection 31 Kpong to Anyiraasti 36.2 610 58 10 28 4 23.1 24 20.32 Same as 50 Same as project no. 50 in addition, petroleum products 1/ See Table 7, footn 1/. 2/ Updating df initial SWKP ectimates. 2cr of wock te Sere-uscefaed uider thE c t roc. Source: SWKP boad Rehabilitation Program,Se-tembor 1971 Miosion estimtes,Nanber 1971 and Noveber 192 May 1971 GHANA TABLE 7 FIRST HIGHdAY PROJ,,CT Savings in Vehicle Operating Costs (cedis per vehicle-mile per year, 1971 values) 1/ Class of Vehicles/ Road Section No. Class 1 Class 2 Class 3 Class 4 11 A 15.33 13.97 28.10 50.37 20 B 4.38 2.19 5.84- 10.22 21 2.19 1.09 2.92 4.74 22 11.31 3.65 14.96 16.73 35 3.65 1.83 4.74 7.66 36 3.65 1.83 4.74 7.60 /2 37-' 2.19 1.09 2.92 4.74 38 2.19 1.09 2.92 4.74 39 4.01 2.64 6.93 11.68 41 11.31 3.65 14.96 16.78 45 6.20 2.64 6.93 12.04 46 4.38 2.64 5.84 12.04 50 11.31 3.65 14.96 16.78 51 4.38 2.69 5.84 10.22 1/ Class 1: (a) private cars, hire cars, and taxis; (b) light buses with capacity of less than 22 people; (c) light goods vehicles with two axles and single rear tires, including pick-ups and vans. Class 2: Mammy-wagons; 3-ton trucks with wooden bodies used for carrying passengers, or mixed goods and passengers. Class 3: Medium vehicles including: (a) heavy buses with a capacity of more than 22 people; (b) medium goods vehicles 5-ton and above. Class 4: Heavy vehicles: goods vehicles with 3 or more axles,timber trucks, tractors, trailers, assembly tankers, etc. 2/ Updating of initial SWKP estimates on basis of simplified assumptions. See Note 2/ in Table 3. Source: SWKP Road Rehabilitation Program, September 1971. Mission estimates, November 1971. May 1973.  ANNEX I Page 1 GHANA FIRST HIGHWAY PROJECT Description of the Project Roads A. Accra - Kumasi 1. The project includes two sections on the routes between Accra and Kumasi: Section 46 Accra - Nsawam 19.4 mi Section 20B Anyinam - Kumasi 81.0 mi Total 100.4 mi 2. A new high-standard road has recently been constructed between Nsawam and Bunso; similar works are underway between Bunso and Anyinam. With the proposed rehabilitation works, the link between Accra and Kumasi via NRawam will be of a satisfactory standard. The opening of the new route bet- ween Naawam and Bunso has increased the traffic flow along the Accra - Nsawam section. On the basis of two-day moving car observer count in November 1972, this traffic is estimated at about 3,500 vehicles per day (vpd), as compared with a mid-1971 SWKP estimate of about 2,150 vpd. 3. The Accra - Nsawam road has a fair horizontal alignment and gen- erally adequate drainage, but poor vertical alignment and a weak pavement. The road width is 22-24 ft over a 30 ft foundation. Initially, a lower level of rehabilitation was considered the most economic solution. However, with the considerable increase in traffic over the past 12 months, and the result- ant more rapid pavement deterioration than envisaged, the higher level of rehabilitation would now be the optimum solution. The original computation indicated that there would be a positive net present value for this solution. The higher level of rehabilitation basically involves widening the platform and constructing of a new 24 ft pavement, together with some re-alignments. In view of the broader scope of works, full detailed engineering will be carried out under the project prior to tendering. 4. The Anyinam - Kumasi road which crosses undulating terrain is of low construction standard, and has a bituminous surface that needs excessive maintenance to keep it in fair condition. The horizontal alignment is reason- able, but the vertical alignment requires some improvement. The formation is narrovy in places, and additions or replacements to the drainage structures are advisable. The pavement is generally badly deformed and requires strengthening. The design for the road entails the addition of 6 inches of new sub-base in some places, re-surfacing to a width of 24 ft, widening of the formation where required, and some improvement to the vertical alignment and the drainage system. The deterioration of the pavement over the past 12-18 months has been more rapid than anticipated by SWKP. ANNEX I Page 2 B. Accra - Takoradi The prolect includes three sections of this coastal road as follows: Section 35 Sekondi Junction - Yamoransa 46.1 mi Section 36 Yamoransa - Mankesim 16.5 mi Section 38 Winneba Junction - Accra 34.0 mi Total 96.6 mi The whole of the coastal road is of similar characteristics, standard and condition. Its average width is 22 ft, with 3-6 ft wide verges on either side. It is bituminous surfaced, with good alignment, generally adequate earth- works and drainage, and acceptable pavement over most of its length. The road is under continuous maintenance. However, failures and some deformation of the pavement along its outer edges have been caused by soft and constantly wet verges in the rainy season, by drainage inadequacies, and by the narrow formation width in places. 7. For the purpose of the economic analysis, only one level of reha- bilitation was considered for all sections. The verges will be replaced with suitable material, the pavement strengthened, and the formation widened as required. In addition, a few small drainage structures will be added, and resurfacing 24 ft wide, with minor improvements made to the vertical align- ment by raising low-lying sections. 8. SKWP initially recommended rehabilitation of the road Winneba Junction-Mankesiv (Section 37, 28.5 mi), along with the rest of the coastal highway between Accra and Sekondi. Field inspection carried out during the November 1972 re-appraisal mission showed that this section had received emergency pavement repair, and that as a result its condition had not deteriorated as rapidly as anticipated. The re-appraisal mission suggested that rehabilitation of Winneba Junction-Mankesim should be postponed for three to four years. During negotiations, the Government requested that this section be included in the project in lieu of paving of the Techiman-Chira road (25.7 mi) 1/. 9. The Government would like to have all sections of the coastal highway brought to common standards. This objective is sound. It will be necessary to redefine the scope of the rehabilitation works initially pro- posed by SWKP to take into account the emergency pavement repairs carried out since 1970-71. SWKP will supervise construction, and will carry out the proposed re-assessment of this section and revise the engineering documents accordingly prior to tendering. The works to be undertaken for this section 1/ Paving of Techiman-Chira was initially included in the present project, but the Government indicated at negotiations that it would prefer to undertake this work with its own funds as a follow-up job for the con- tractor who has just completed paving of the Sunyani-Tamale section. ANNEX I Page 3 would mainly include reconditioning of shoulders, and strengthening and widening of the pavement edges to standard width. A simplified economic analysis based on an updating of the initial SWKP evaluation showed that such work would be well justified. 10, Another section (Section 34, Sekondi Junction - Takoradi, 10.4 mi) was investigated by the consultants, but rehabilitation was not found econom- ically viable at this stage. C. Accra - Ho 11. The project includes two road sections: Section 50 Trom Junction - Kpong 9.8 mi Section 51 Kpong - Anyirawasi 36.2 mi Total 46.0 mi 12. For the section extending 6.3 mi out of Accra, rehabilitation was found to be economically justified; this work is to be financed from the Government's own resources. For the next 24 mi section to Trom Junction, the road is of only mediocre standard, but traffic density does not justify rehabilitation at this stage. The remaining section Anyirawasi - Ho (11.7 mi) is in good condition and needs no rehabilitation. 13. The section Trom Junction - Kpong is a bituminous surfaced road on a bad alignment, with poor earthworks and inadequate drainage. It is a narrow road - 18 ft pavement width with 2 ft soft verges - whose surface ia deformed and potholed. It passes through many built--up areas and is frequently congested. The proposed design calls for replacing the verges with suitable material, improving the vertical alignment, formation width and drainage, strengthening the pavement, and surface dressing to a width of 22 ft. 14. The road Kpong - Anyirawasi is bituminized, but several sections contain deformations which require repair. The average width of the surfac- ing is 20 ft, with some sections now partially reconstructed. The proposed design entails strengthening the base where this reconstruction has failed, widening the formation to 30 ft minimum where required, and resealing throughout. ). Auxiliary Roads north-west of Accra 15. The project includes three road sections in the region Mankesim - Winneba - Swedru - Adaiso - Kade, as follows: ANNEX I Page 4 Section 41 Swedru - Winneba Jct. 11.3 mi Section 39 Winneba Jct. - Winneba 2.5 mi Section 45 Adaiso - Kade 37.4 mi Total 51.2 mi 16. The Swedru - Winneba road, the most expensive rehabilitation section in the project, is bituminous surfaced, with reasonable horizontal alignment but poor vertical alignment. It crosses undulating terrain with light to medium forest vegetation, and passes through several villages and towns at its northern end. The weak pavement, poor vertical alignment and narrow formation width - 20 ft bitumen surface on 22 to 24 ft formation -- have caused deformation and deterioration of the road surface. The rehabil- itation proposed includes widening the formation to 36 ft., improving the vertical alignment and drainage, realigning three short sections of the road, and constructing a new pavement, surface-dressed to 24 ft. In view of the substantial alignment corrections, both vertical and horizontal detailed engineering will be prepared under the project prior to tendering. 17. The Adaiso - Kade section is a bituminous surfaced road with reason- able alignment and drainage, but with a narrow formation width varying from 22 ft to 26 ft. The pavement deterioration has been more rapid than antici- pated, and the deformation has developed into potholes. This road is the main route for the exportation of products from the proposed palm oil project centered at Kwae. Two levels of improvement were considered, but the lower level proved the more economic. This entails replacing the soft verges with suitable materials, reshaping and strengthening the pavement where deformed, and resealing throughout. 18. The initial project had also included the improvement of two addi- tional sections, Mankesim - Swedru (Section 40, 37.8 mi) and Swedru - Adaiso (Section 42, 24.8 mi) which have poor alignment and inadequate drainage. The pavement, though deformed, is quite sound; it is 18 ft wide, with 2-3 ft soft shoulders on either side. Although the lower level of rehabilitation proved economically justified, it is felt that this work, although improving the pavement, would leave a low-standard alignment. It was found preferable to postpone rehabilitation of these two roads until traffic has increased, and until a higher level of improvement is warranted. E. Kumasi - Takoradi - Roads south of Kumasi 19. The project includes two sections, viz.: Section 21 Kumasi - Anwiankwanta 15.3 mi Section 22 Anwiankwanta - Bekwai 5.1 mi Total 20.4 mi ANNEX I Page 5 20. The consultants SWKP carried out a study of highway priorities in the Kumasi - Takoradi corridor, considering what improvements, if any, should be made on the existing two alternative links via Tarkwa and via Cape Coast, and whether construction of a new direct road between Dunkwa and Takoradi was justified. They concluded that, at the estimated construction cost, a new Dunkwa - Takoradi link was of low priority. It was determined that improvjement of the existing route via Tarkwa, particularly upgrading the bad gravel road between Ayenfuri and Bawdia, would attract sufficient traffic to make the latter an economically feasible solution. The Ghana Government will now finance rehabilitation of the sections Ayenfuri - Bawdia - Tarkwa, but has requested IDA financing for two other sections totalling 20.4 mi: Kumasi - Anwiankwanta (15.3 mi) and Anwiankwanta - Bekwai (5.1 mi). The remaining sections of the route are in satisfactory condition. 21, The first 9 mi of the Kumasi - Anwiankwanta road are of low con- struction standard, 22 ft wide with 4 ft verges; the remaining 6.3 mi have a 24 ft wide pavement with 6 ft verges. Only one level of rehabilitation has been considered. On the first section, this would involve widening the formation, improving the vertical alignment and drainage, constructing 6 inches of new base, and surface dressing. The second section requires some repairs to the pavement and replacement of the soft verges with suitable material. The Obuasi - Dunkwa section is a bituminous surfaced road with good alignment, adequate earthworks and drainage, and a 24 ft pavement in good to fair condition. SWKP found, however, that the pavement was showing signs of deterioration on the Obuasi - Dunkwa section which had not been as rapid as anticipated by SWKP, and the minor potholing and deterioration of the bituminous surface appears to have been adequately taken care of by maintenance operations. This section was therefore omitted from the project. 22. The Anwiankwanta - Bekwai road (Section 22, 5.1 mi) has been added to the original project. The existing road crosses undulating terrain and has a reasonable alignment, but with poor earthworks and drainage, and a deformed pavement. It forms the cross-link between the corridors Kumasi - Tarkwa - Takoradi and Kumasi - Fosso - Yamoransa. The proposed rehabilitation would include widening the formation to 34 ft, replacing the verges with sub-base material, improving the vertical alignment and drainage, adding 6 inches of new base material, and resurfacing to 24 ft wide. 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'is a%ri . e -> s5 550 03 >5>55>5>t50 4 e000--- eoa 0- 0oo01 - 0o00o > o > 0- 0 a su 0000- 000 00 - : 0> .00 , i .0 0 0-00>> 00 - 00000•' 00-0-00.0-.O0-i( MN100 0-0>% 00> 0 - - 0-0- 3101^0 0 > '- Co ou 0 0» 0 00- o-' 0- ¯ on' 0-H 00-00-0 - e o-o U doa 00 1000-> 0 - 5 00V 0 0000 000-0-00T Q R 0 0>0 .r50 r. >0-0 . el. e00000o-00e o0 .: oe s eae ooeeoe -p.0-> e oso -00- 0-0010 N0.0" p000 00-- 0 0 '0-0-10 0000-0-0-|o 0 00y d>00 0 >0-0-Ooa , . -0 0 00110000--> 0>0 >00- 0000000C>- 001> |000> 00000 -.0- 0.0>-0 0 0 0 0>0O O O - 0-0000 u -0 -0 >0 0- 000 0 00 00 010>0-0001011 1 000 0 O 4 0-'0 00 oOrO O > 0 001 0 00 -0 0o 5>>r> 0 0 00 1 00 -- .e--0~ 5-0-055 .01>0 >>>'' > 0.0->0-0.0-.' '00- 1 0 00 > 5'> -01 --- 0-00o .  PLATE GHANA FIRST HIGHWAY PROJECT operating Costs (financial) for Typical Vehicles at Various Speeds 70 Vehicle type 4, rA6 Heavy Trucks 60 0e 50 0 0 Vehicle type 3, 43 Medium Trucks 0 0 30 *r-1 4) 00 20 Vehicle type 2, Passenger/ Freight Trucks 10 Vehicle type 1, Light Vehicles 10 20 30 40 50 Vehicle Speed, mph December 1972.  ! 1 I V- O \9 JJ. 151 r ..I' ..0 I. A' -' 8 .13 d d n .