Haiti - Fourth Highway Project

Report No. 673a-HA Haiti: Appraisal of a FILE COPY Fourth Highway Project May 21, 1975 Latin America and Caribbean Projects Department Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only bv the Bank Group It may not be published, quoted or cited. without Bank Group authonzation The Bank Group does not accept responsiblhty for the accuracy or completeness of the report  Currency Equivalents US$1 = $. 5.00 A. 1.0 TUS$0 .20 j. 1 million = JS$200,000 Weights and Measures: Metric :'etric Rritish/US Equivalent 1 meter (n) 3.28 feet (ft) 1 'ilometer ('Im) 0.62 mile (mi) 1 square kilometer (,o,i2) = 0.386 square mile (sq. mi) 1 metric ton (m ton) = 2,204 pounds (lb) Fiscal Year October 1 to September 30 Abbreviations and Acronyms IDB - Inter-American Development Ban,,. TTCA - Institut Interamerican des Sciences Agricoles de l'O1F O1DBG - Organisation de Developpement de la Plaine de r}onaives ODVA - Organisation de Developpement de la Vallee d'Artibonite SEPRP,T - Service dfEntretien Permanent du Reseau Routier National TPTC - Secretairerie d'Etat des Travaux Publics, Transport et Communications TRDP _- United Nations Development Program USAID - UTnited States Agency for International DeveloDment  liAITI APPPISAL OF A FOURTH HIG11WAY PROJECT TABLE OF CONTENTS SUM.MUARY AND CONCLUSIONS .............................. i-ii 1. INTRODUCTION ........................1......... I...... 1 2. RECENT DEVELOPMENTS IN THE TRANSPORT SECTOR 2 3. RECENT DEVELOPIENTS IN THE iIICHUWAY SUBSECTOR 3 A. The Highway Network and Its Traffic .. 3 B. Highway Financing .................................... 4 C. Highway Planning ............................,.. 5 D. Highway Construction ...........................fi.. 5 E. Highway Maintenance ............................ 6 4. THE PROJECT. 7 A. General Description. 7 B. Reconstruction of the Northern Road. 7 C. Design and Construction of a New Bridge at Sonde 8 D. Technical Assistance 8 E. Cost Estimates, Financing and Disbursements. 9 F. Execution ........................ 11 5. ECONOMIC EVALUATION. 12 A. General .......... 12 B. Reconstruction of the Northern Road. 4 C. Technical Assistance .16 6. AGREEMENTS REACHED AND RECOMFIENDATION ..................... 17 TABLES 1. Highway Expenditures 1972-1974 2. Estimates of Expenditures and Budgetary Allocations for Highway Construction and Maintenance for Fiscal Years 1975-1978 3. Road User Charges 1969-1974 4. Details of Proposed Civil Works This appraisal report has been prepared by M'essrs. J. Varallyay fengineer) and C-H. Mumme (economist), and has been edited byv Mtiss V. Foster.  Table of Contents (Cont'd) TABLES (Cont'd) 5. Design Standards for Northern Road 6. Disbursement Schedule 7. Growth of Principal Towns along Northern Road 8. Actual and Estimated Agricultural Production - Plain of Gonaives 9. Actual and Estimated Agricultural Production - Area North of Estere 10. Average Daily Traffic Forecasts for Northern Road 1978-1997 11. Vehicle Operating Costs on the Northern Road 12. Sensitivity Analyses of Economic Return ANNEX Technical Assistance to the Domestic Contracting Industry MAPS Haiti - Proposed Road Project - IBRD 11482 Sketch Map of Bridge Crossings on Artibonite Plain  HAITI APPRAISAL OF A FOURTH HIGHTNWAY PROJECT SUMMARY AND CONCLUSIONS i. A substantial part of the economic activity in Haiti is centered around Port-au-Prince, the capital, and along the road -- the Northern Road -- which connects the capital with Cap Haitien, the second largest town in the country; specifically this Northern Road serves the Artibonite Plain (the richest agricultural area in Haiti), the Gonaives Plain and the Northern Plain, south of Cap Haitien. As a result of years of neglect, the Northern Road fell into disrepair, and its reconstruction, and that of the other prin- cipal routes, has in recent years become urgent. Following a UNDP-financed feasibility study and detailed engineering, the Association extended a Credit of US$10 million in 1974 (Cr. 478-HA) to help start reconstruction of the road. The Bank Group had already been involved in the highway sector in Haiti on two previous occasions (1956 and 1962), and Credit 478-HA marked, there- fore, the re-entry of the Group Into the transportation sector in Haiti. Because of substantial bid overruns, reconstruction under the Third Project was reduced from about 150 km to about 80 km, i.e., to about one-third of its total length of 250 km. The reconstruction is now in hand and progress- ing satisfactorily. Under a UNDP-financed element of the Third Highway Proj- ect, technical assistance is being provided for transport planning, organiza- tional restructuring of the Ministry of Public Works and development of the domestic civil works industry. ii. Transportation and agriculture still remain the two dominant areas of public investment in Haiti, and the Government has requested the Associa- tion to continue participating in reconstruction of the Northern Road. The main item of this proposed project comprises, therefore, reconstruction of those sections, totalling 170 km, not included in the Third Project. The works also include construction of a new bridge over the Artibonite River -- the largest waterway on the Northern Road -- close to the existing bridge, which is almost 100 years old. A crossing over the Artibonite is crucial for the northern half of the country since the Northern Road is currently the only practicable land access between the northern part and the capital. If the existing bridge were to collapse without a new bridge being in place, the results would be disastrous for the economy. iii. Fu'therjnore, the project includes an element of technical assistance to continue the transport planning process by focusing explicitly on individual project planni-ng and design; the projects will be identified as part of the transport study being carried out under the Third Project-. The technical assistance element will also continue practical assistance to the domestic Construction industry. iv. The project will take about two and one-half years to complete, and execution wi bl he the responsibility of the Secretairie d?Etat des Travaux Publics, Transport et Communications (TPTC), the Ministry of Public  - ii - Works. Consultants contracted under terms and conditions acceptable to the Bank will assist in prequalifying bidders and evaluiating bids and will supervise construction. Construction contracts will be awarded on a unit price basis after international competitive bidding, following usual Bank Group procedures. Consulting services for technical assistance in the areas mentioned above will also be procured on terms and contract conditions acceptable to the Association. v. Improvement in the condition of the road should generate agricul- tural development, particularly in the Gonaives Plain and the Artibonite Valley; it should also generate development in tourism along the whole length of the road. Major quantifiable benefits will arise from the proposed proj- ect, as in the case of the Third Highway Project, from savings in vehicle operating costs, including those from the generated traffic, and from savings in road maintenance costs. Since the road transport industry is competitive, a major portion of the benefits will likely be passed on to farmers, manu- facturers, passengers and, ultimately, to consumers. The economic return on investment in reconstruction (which represents about 97% of the estimated project cost) varies from about 26% to 35%, depending on the assumption made regarding the remaining life of the existing Sonde Bridge. Sensitivity analyses indicate that, even with significant cost increases and benefit decreases, the project remains justifiable. Non-quantifiable benefits in- clude the important socio-political effect of integrating the second largest town, Cap Haitien, more closely with the rest of the country and the capital than it is at present. vi. The total cost of the project is estimated at US$26.3 million, with an estimated foreign exchange component of US$20 million, the latter recom- mended for financing by the proposed Credit. Appropriate contingencies for increases in quantity and price escalation are included. A sum of US$100,000 is recommended for retroactive financing from the Credit to cover the foreign exchange costs of the engineering for the new Sonde Bridge and of the pavement reevaluation. vii. The project provides a suitable basis for an IDA Credit of US$20 million on the standard conditions for IDA Credits.  HAITI APPRAISAL OF A FOURTH HIGHWAY PROJECT 1. INTRODUCTION 1.01 The Republic of Haiti has requested IDA assistance to help finance completion of reconstruction of the Northern Road. The project will comprise (a) reconstruction of about 170 km of the road, including a new bridge over the Artibonite River; (b) design and supervision of item (a); and (c) techni- cal assistance for preparation of future projects in the transport sector and for further assistance to the domestic civil works industry. The project is expected to cost US$26.3 million equivalent: the foreign exchange compo- nent, US$20.0 million, is proposed for financing through an IDA credit, and the balance of US$6.3 million in loc7al currency will be provided by the Govermnent. 1.02 The proposed project complements the Third Highway Project (Credit 478-HA, US$10 million, June 1974). During preparation of the Third Project, it was envisaged to finance urgent reconstruction of the 250 km of road between Port-au-Prince and Cap Haitien. Subsequently, due to the limited availability of IDA funds, the project was reformulated during appraisal to include only 150 km of road. Because bids were appreciably higher than estimated, the project was later reduced, by agreement between the Government and the Association, to include only some 80 km of road, limited to those sections most urgently in need of reconstruction. 1.03 The proposed project arises, as did the Third Highway Project, from the UNDP-financed feasibility studies and detailed engineering carried out for the whole length of the Northern Road by INGEROUTE (France) in 1972/73. The major element of the proposed project will be reconstruction of those lengths of the road, totalling about 170 km, not included in the Third Project. The other elements will comprise (a) construction of a new bridge over the Artibonite River adjacent to the existing aging bridge as an "insurance" against the economic damage that would result to the country if the existing bridge were to collapse without a replacement being available, and (b) a tech- nical assistance element for project preparation and for continuing institu- tional improvements started under the Third Project, both in Government and in the private sector. 1.04 Progress to date under the ammended Third Project is encouraging: (a) a vital bridge, over the Estere River in the Artibonite Plain, has been constructed, replacing an old metal bridge which had partially collapsed; (b) the main civil works have been contracted and are under way; and (c) the con- sultants for the technical assistance have been contracted and started in the field in April 1975. Additionally, road maintenance -- a matter of grave concern for all agencies involved in the transport sector in Haiti -- has begun to improve.  - 2 - 1.05 This appraisal is therefore essentially an updating of that carried out in 1974 in connection with the Third Highway Project, and, in effect, up- dates the report (May 1974) relating to that project. It is based on the findings of a mission comprising Messrs. J. Varallyay (Engineer) and C.H. Mumme (Economist), which visited Haiti in December 1974. The report has been edited by Miss V. Foster. 2. RECENT DEVELOPMENTS IN THE TRANSPORT SECTOR 2.01 Road transport continues to be the dominant transport mode, and this dominance is being reinforced by the substantial road construction and rehabilitation program which has started within the last nine months (para. 3.01). In aviation, 1974 marked the re-entry into the domestic market of COHATA (Haitien Air Transport), and domestic services are being provided through this firm's subsidiary, Haiti Air-Inter; both companies are wholly owned by the Government. Haiti Air-Inter, in turn, has subcontracted domestic services between Port-au-Prince, Cap Xaitien, Port-de-Paix, Jacmel and Les Cayes. Movement by air, both of passenger and freight, remains extremely low, and internal aviation poses no threat to road transport. 2.02 The sector is still characterized by the involvement of a number of international agencies -- IDB, UNDP, and IDA -- and by bilateral assistance from France and USAID. The obvious possibility, and danger, of overlapping and of inefficient working of such agencies has been minimized by the estab- lishment of inter-agency meetifigs at approximately six-month intervals, chaired by the Secretaire d'Etat des Travaux Publics, de Transport et Communi- cations (TPTC, the Ministry of Public Works). All agencies participate in these meetings, the second of which was held in January 1975. 2.03 Government policy is to continue to give priority to transportation and agriculture, and a large share of development financing under the current Five-Year Development Plan (1972-1976) is being devoted to these sectors. Some 28% of total expenditure under the Plan is solely for investment in transport. 2.04 The 1972-1976 Plan was prepared without the benefit of sectoral plans; specifically as regards the transport sector, it was prepared without identifying the transport demand of other sectors. TPTC, although charged with responsibility for the sector, did not previously prepare a sectoral plan, and, indeed, at the time the national plan was prepared, did not have the capability to do so. The Government recognized the deficienci>es in transport planning and decided to take action to correct them. As a result, the Government, as part of the Third Highway Project, agreed (a) to establish a transport sector planning unit under TPTC; (b) to initiate collection of data in the highway subsector on a regular basis, and (c' to undertake a study of the sector and the training of necessary counterpart personnel. Technical assistance in these three areas, and also in the area of assistance for development of the domestic civil works industry (para. 3.09), is being  provided as part of the Third Highiway Project, financed by UNDP with the Bank as Executing Agency. The consultants (Louis Berger, US) providing this technical assistance started in the field in April 1975. Because of the importance of action taken by the Government in these areas for improving the tranisport sector's performance, assurances were obtained during negotiations for the proposed project reconfirming those obtained in connection with the Third Highway Project with respect to the establishment of a transport sector planning unit under TPTC and to highway traffic counts and origin/destination surveys. 2.05 The transport study should provide a detailed investment plan for the sector for the 1977-1981 period and an indicative plan for the following five years. Preliminary results should be available by November/December 1975, at which time TPTC should review them in order to make available an ade- quate sectoral plan for presentation to the national planners in early 1976. An assurance was obtained during negotiations that the Government will con- sult with the Association (a) regarding recommendations of the study of the transport sector with a view toward formulating an investment plan in the transport sector and (b) before making any major investments in the trans- port sector prior to completion of the investment plan under (a) above. 3. RECENT DEVELOPMENTS IN THE HIGHWAY SUBSECTOR a A. Tihe Highw-ay Network and its Traffic 3.01 After a decade or so during which the condition of the national road network deteriorated badly, the major roads, at least, are now being im- proved. Under the ongoing Third Highway Project, a start has been made on rehabilitating the Northern Road, which connects Port-au-Prince with Cap Haitien, and which serves, en route, the most important agricultural area of the country, the Artifbnite Plain. Under an IDB-financed project, a start has recently been made on rehabilitating the other major highway of the country -- the Southern Road connecting Port-au-Prince with Les Cayes on the south- ern peninsula. With French bilateral assistance, work will shortly commence on improving and paving a third major road, that from Port-au-Prince to Jacmel. These three projects, together with completion of rehabilitation of the Northern Road under the proposed project, would, in large measure, rehabili- tate the main road network. Still remaining would be rehabilitation and, in part, new construction of the Central Road, which provides an alternative route between Port-au-Prince and Cap Haitien through the east-central part of the country, and which seirves the country's main hydroelectric scheme (at Peligre) and the agricultural area centered on Hiinche. 3.02 Information on traffic levels continues to be scanty, and such in- formation as is available has been collected in connection with studies for the major rehabilitation works now under way. A more systematic collection of information on road transport should materialize under the Third Highway Project (para. 2.04).  - 4 - 3.03 lbad transport is still not regulated in Haiti, and there are no import restrictions on source, value, weight or dimensions of new vehicles. Because of the absence of regulation, trucks and buses are free to operate, and their tariffs are set by bargaining; as a result, tariffs are generally competitive. As regards vehicle weight and dimensions, recommendations based on standards of the American Association of State Highway Officials were made in a UNDP study, in 1971-1973. The IDB-financed Southern Road Project includes technical assistance to help introduce axle weight regulation and control on the Southern Road and to help prepare necessary legislation; this represents the first serious step toward limiting axle loads and, if properly implemented, would help realize significant savings in pavement construction and mainte- nance costs. Under the Credit Agreement of the Third Highway Project, the Government undertook to adopt and enforce on all roads, not later than December 31, 1976, measures to ensure that the dimensions and axle loads of vehicles would not exceed limits corbsistent with the structural and geometric design standards of the roads. Under the same agreement, vehicle weighing scales would be introduced not later than June 30, "978. During negotiations for the proposed projects the above two agreements and the timing were recon- firmed with the Government. B. Hii y Financing 3.04 Highway expenditures continue to be financed from both the general and development budgets, although possibly in a somewhat unusual manner since, for example, highway maintenance is funded from the development budget. Be- cause of a complicated accounting procedure and occasional confusion between recurrent and capital expenditures, it is difficult to determine accurately the expenditures on highway design, construction, maintenance and administra- tion. Estimates of such expenditures for the years 1972-1974 are given in Table 1. 3.05 Highway-related expenditures from the development budget are funded partly from user charges 1/ and partly from other funds allocated by the Gov- ernmant for development, in the form of counterpart funds for externally financed projects. As an example, the Government, in early 1974, allocated one-half of the Matching Fund 2/ (equivalent to 2.5% of total fiscal revenues) for highway construction, and indicated that it would also allocate US$2 rillion per year for road construction in general from increased bauxite revenues. 3/ Projections of all Government counterpart funds for highways for 1975-1978 were discussed during negotiations and appear in Table 2. 1! The Government allocates all the sales tax on gasoline, equivalent to US$0.19/gallon, to highway development, the allocation being to separate earmarked funds for (a) construction and (b) maintenance. 2// The Matching Fund was created in 1966 and represents 5% of total fiscal revenues; this fund is reserved exclusively for use as a source of counterpart funds for externally financed development projects. 3/ In late 1974, the Government renegotiated its agreement with Reynolds Co. for bauxite exports, substantially increasing such revenues as of January 1, 1975.  -5- 3.06 Road user charges for the period 1969-1974 are shown in Table 3. The study of the transport sector, to be carried out under the Third Highway Project (para. 2.04), will review user charges for roads, and, indeed, for all modes of transport, with a view toward rationalizing allocation of resources within the sector. C. Highway Planning 3.07 Until 1974, TPTC had not been seriously engaged in highway planning, mainly because no capital investments were being made and even maintenance had come to a standstill. With the present and proposed surge of activity in the highway subsector, planning is now obviously necessary; therefore, tech- nical assistance in this area is being provided under the UNDP-financed ele- ment of the Third Highway Project. The setting up of a sectoral planning unit and the training of counterpart personnel (para. 2.04) should ensure a permanent capability for highway plaiining within TPTC. 3.08 The technical assistance provided under the Southern Road Project (para. 3.03) and under the Third Highway Project covers many areas such as planning, construction supervision, project administration, and vehicle weight and dimension legislation and enforcement, but does not specifically cover detailed preparation of highway projects -- a further area in which TPTC is weak. An element of technical assistance for project preparation (such as preparation of feasibility studies and detailed design, cost estimating and preparation of bid documents) has therefore been included in the proposed project (para. 4.07). Although present indications are that such projects would probably be in the highway subsector, the project provides for the possibility that they may be in other modes. The projects to be prepared will be identified as part of the sectoral study being carried out under the Third Highway Project. D. Highway Construction 3.09 Before the current intense activity in the highway sector began in early 1974, there had been no major work since construction of the Northern Road in 1952-1954. Therefore, there had been no opportunity for local firms to develop, and all construction now under way (para. 3.01) is being carried out by foreign firms (French and Canadian). Some small local firms do exist, however, and, to strengthen this infant domestic construction industry, tech- nical assistance is being provided under the Third Highway Project; the greater part of this assistance should be provided during 1975. 3.10 Highway construction began on a large scale in 1974 when civil works were contracted for reconstruction of the Northern Road (Cr. 478-HA), and the Southern Road, this latter financed under an IDB loan. Physical progress under the reduced, ongoing IDA-financed project (para. 1.02) has been notably good; the Estere Bridge has been reconstructed and road works were contracted and are on schedule.  -6- E. Highway Maintenance 3.11 In June 1974, and subsequent to signing of the Credit Agreement for the Third Highway Project, the agencies chiefly concerned with maintenance -- USAID and the Association -- signed with Government a tripartite "Memorandum of Understanding". This Memorandum sets out the action envisaged for the Northern Road under the USAID-financed road maintenance project, which started in October 1973, and the action required by the Government, specifically by the Service d'Entretien Permanent du Reseau Routier National (SEPRRN), the Government agency responsible for road maintenance. 3.12 Developments in highway maintenance since mid-1974 are as follows: (a) Maintenance equipment and spares to the value of US$375,000 have recently arrived in Haiti, financed under the USAID project; with some equipment on which to operate, the USAID consultants (Hoskins, Western, Sonderegger, US) should now be able to exert a significant influence on maintenance. (b) SEPRRN has mobilized maintenance crews along the Northern Road in substantial compliance with the Memorandum of Understanding. (c) USAID has authorized two additional positions (road maintenance specialists) in the consultants' team for on-site training of staff. 3.13 The start made by SEPRRN on maintenance of the Northern Road, although small, is nevertheless encouraging. However, this maintenance pro- gram is precarious since it depends upon continuing and permanent improvement in the support which the field'teams receive -- both in terms of equipment and funding -- from SEPRRN's organization; this, in turn, is dependent upon the management of SEPRRN. Currently, management is reinforced by the USAID consultants, but this assistance is scheduled to end by 1976, and it is likely that further assistance, although possibly on a reduced scale, may be needed by SEPRRN thereafter. The Government should now be looking ahead and planning SEPRRN's work program and budget for, say, the next five years, and defining SEPRRN's medium and long term training needs, both in Haiti and abroad. The Association is concerned that maintenance of the road network in general is adequate and, in particular, that the significant investment it is pro- viding for reconstruction of the Northern Road will be preserved. During negotiations, therefore, the Association discussed the principal points that the Government would consider in preparing: (a) A five-year plan for SEPRRN, including specifications for maintenance on the Northern Road and the associated budgetary requirements; and (b) SEPRRN's training program for the same period. It was agreed during negotiations that agreement between the Government and the Association on the above five-year plan and training program would be a condition of effectiveness of the proposed credit.  - 7 - 4. THE PROJECT A. General Description 4.01 The proposed project would consist of: (a) Reconstruction of ten sections of the Northern Road (Table 4) be- tween Port-au-Prince and Cap Haitien, totalling about 170 km. fb) Re-evaluation of the pavement design of the work in (a) above. (c) Design and construction of a new bridge across the Artibonite River at Sonde, adjacent to the existing bridge. (d) Supervision of the construction elements of (a) and (c) above. (e) Technical assistance, amounting to about 60 man/months, for: (i) preparing future projects in the transport sector; and (ii) improving, further, the capabilities of the domestic civil works industry. B. Reconstruction of the Northern Road 4.02 Approximately 80 km pf the Northern Road are being reconstructed under the ongoing Third Highway Project; the work includes construction of the new Estere Bridge -- one of two sizable bridges on that section of the Northern Road which crosses the Artibonite Plain, about halfway between Port-au-Prince and Cap Haitien. Because the existing bridge had virtually collapsed, a contract for construction of the new bridge was let separately and in advance of the main works. The contract for construction of the new bridge was awarded to DUMEZ (France) in February 1974; work commenced in Harch 1974, and the new bridge was completed by December 1974. DUMEZ, in joint venture with COLAS (France), was subsequently awarded the road construc- tion contract in the latter half of 1974, and work is now well under way. 4.03 The road sections selected for inclusion in the Third Hiighway Proj- ect (Map IBRD 11482) were those most urgently in need of reconstruction. The ten sections selected for inclusion in this proposed project constitute all the road excluded from the Third Project. Feasibility studies and final design for these ten sections were made, along with the others, by INGEROUTE (France) during 1973/74 as part of a study of the Northern Road financed by UNDP, for which the Bank was Executing Agency. The geometrical and structu- ral design standards are shown in Table 5. Because the original pavement design for these ten sections was carried out in 1973, both TPTC and the Association considered it prudent to re-examine certain sections in the light of (a) the recent behavior of the pavements and (b) current traffic. In consultation with the Association, TPTC awarded a contract to the consultants  - 8 - Ewart, Lea and Tremblay (Canada), in late 1974, to review the pavement design. Preliminary results from the consultants' work were reviewed in the Bank prior to negotiations, and estimates of cost now reflect the revised design standards. 4.04 The proposed civil works lend themselves to a blend of labor-inten- sive and equipment-intensive working. The major items -- earthworks (includ- ing rock excavation) and pavement work -- are appropriately carried out by machine. Other items, particularly small structures and drainage works, are more appropriately executed by labor-intensive methods. The cost estimates have been built up accordingly. C. Design and Construction of a New Bridge at Sonde 4.05 The bridge over the Artibonite River at Sonde is the larger of the two bridges in the Artibonite Plain section of the Northern Road (the other is over the Estere). The existing Sonde Bridge is a metal truss structure some 97 years old; considering its age, it is in remarkably good condition. However, its replacement should not be too long delayed. When the Estere Bridge failed structurally in 1973, a detour requiring some 20 km of addi- tional travel was possible, although it was extremely difficult for traffic. If the Sonde Bridge were to collapse, either from old age or from a critical structural member being damaged by traffic, the effect on the economy of Haiti would be calamitous since all traffic between the northern part of the coun- try and Port-au-Prince would have to use part of the Central Road, crossing the Artibonite River, some 70 km upstream of Sonde, near the Peligre Dam (see sketch map). This would be extremely costly because the condition of this de- tour, totalling about 180 km, is far worse than that of the Northern Road. 4.06 The existing bridge at Sonde will need to be replaced before long; it is not possible to predict with accuracy when its useful life would end but, in view of the economic consequences of a collapse without a replacement bridge being in place, TPTC and the Association considered it wise to include the design and construction of the bridge, and the associated minor road works, in the proposed project. The design was done by Ewart, Lea and Tremblay within the contract for pavement re-evaluation (para. 4.03). D. Technical Assistance 4.07 As mentioned earlier (para. 3.08), technical assistance under the Third Highway Project includes general planning assistance, but not specific assistance in project preparation. In the proposed project, therefore, pro- vision is made for consultant services to help prepare specific projects which will be identified during the course of the study of the transport sector. During negotiations, an assurance was obtained from the Government that TPTC will use this assistance to help prepare the transport projects of high- est priority taking into account the recommendations of the study and in agreement with the Association; in addition, TPTC will furnish the necessary counterpart personnel and funds.  - 9 - 4.08 Continued technical assistance would also be furnished to the domestic civil works industry, which is receiving assistance under the Third Highway Project where the focus is on evaluating existing contractors' capacity, Government 's role in the industry, and the essentials of con- tracting -- in the area of works management, costing, budgeting, and pre- paration of bids, as well as in the engineering field. Under the proposed project, the assistance to contractors would concentrate furtlier on the managerial and engineering fields, and on in-service training of their personnel. Thus, this assistance would enhance the possibility of active participation by local firms in major civil works in the country (see Annex). E. Cost Estimates, Financing and Disbtirsements 4.09 The proposed project is estimated to cost about US$26.3 million equivalent, 1/ including contingency allowances, as shown in the table on page 10 following. 4.10 Bidding in accordance with the Bank Group Guidelines for about 85% of the reconstruction (in fact, lots C and D, Table 4) was initiated in early 1975, and bids were received in Mlarch 1975 (although contracts have not been awarded). The lowest evaluated bid was slightly below estimate. The estimate for all the reconstruction work has been based on this bidding experience. 4.11 The cost estimate for the new Sonde Bridge has been based on an extrapolation of the actual cost of the recently completed Estere Bridge. The cost estimate of consultant services for supervision and technical assist- ance has been based on experience under the ongoing Third Highway Project. Input by foreign consultants has been assumed at a rate of about US$5,000/ man-month. The cost of the reevaluation of the pavement design and the de- sign of the new Sonde Bridge has been based on the signed contract. 4.12 A quantity contingency of 10% of the estimated cost of the civil works has been adopted. This is considered adequate in view of the predomi- nance of paving in the reconstruction works; it is unlikely that the founda- tion for the new Sonde Bridge (one of the less predictable items) would require any unexpectedly large variation in type or quantity from that cur- rently envisaged. Price contingencies are generally in line with estimated projection of inflation and results of bidding experience, and are con- sidered adequate. 2/ 1/ This figure has no tax element since only foreign contractors are expected to bid, and the Government has agreed to exempt them from local taxes. 2/ See footnote 4 on following page.  Gord.es vAillicn TJS8 `4illion Base Cost Foreigr Local Fgg-o regn Ta Local I oreif :Er La Estimate x_ ar Hec- sotnr-ction 0 r uorther- Road 21.0 614.0 85-0 4.2 12 .8 17.0 1/ 86 7 2/ Construction of cT;de bridge h. 14. 6.C 0.3 0.9 1.2 6 75 2/ 7'ub-lo al 2?. 68. 91.0 14.5 13.7 18.2 92 75 C,onsuiting qe-rr:ces Construction fupervision 1.0 3.5 14.5 0.2 0.7 0.9 5 80 Re-evaluation of pavement design and design o0 Sonde bridge 3/ 0.5 .5 3/ 0.1 0.2 - 8 Technical assistance for project prepara- tion and further as- sistance to contract- i ng industry 0