Togo - Highway Maintenance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 1649 PROJECT PERFORMANCE AUDIT REPORT TOGO HIGHWAY MAINTENANCE PROJECT (CREDIT 131-TO) June 24, 1977 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT TOGO HIGHWAY MAINTENANCE PROJECT (CREDIT 131-TO) TABLE OF CONTENTS Page No. PREFACE PROJECT PERFORMANCE AUDIT BASIC DATA SHEET HIGHLIGHTS PROJECT PERFORMANCE AUDIT MEMORANDUM I. Background ............................................... 1 II. Project Results ................................... ..2......2 III. Main Issues ............................................ 2 IV. Conclusions ........ ......................... 4 ATTACHMENT: PROJECT COMPLETION REPORT 1. Introduction .......................................... A.1 2. The Project . .......................... ..... A.1 3. Project Implementation ......... ............. ....... A.3 4. Economic Re-evaluation .............................. A.10 5. Conclusions ................... .... A.11 Tables 1. List of Equipment Purchased and Rehabilitated 2. Maintenance Staff 3. Technical Assistance for Highway Maintenance Program 4. The Output of Highway Maintenance in 1972 - 1973 5. Estimated and Actual Costs and IDA Participation 6. Appraisal Estimate and Actual Disbursements 7. Vehicle Operating Costs Ma SThis document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT PERFORMANCE AUDIT REPORT TOGO HIGHWAY MAINTENANCE PROJECT (CREDIT 131-TO) Preface This report presents a performance audit of the Togo Highway Maintenance Project, for which Credit 131-TO in the amount of US$3.7 million is scheduled to be closed in June 1977. The memorandum is based on the attached Project Completion Report (PCR) prepared by the Bank's Western Africa Regional Office, discussions with Bank staff, and review of project files and Minutes of the Board of Executive Directors' meeting which con- sidered the project. On that basis, under OED's abbreviated review process, the audit accepts most of the conclusions of the PCR. However, it also expands on questions of insufficient project formulation and the diversion of mainte- nance resources to other work. No mission by OED or Projects Staff was made in connection with this audit.  PROJECT PERFORMANCE AUDIT BASIC DATA SHEET TOGO HIGHWAY MAINTENANCE (CREDIT 131-TO) KEY PROJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 4.4 4.2 Underrun () - 5 Credit Amount (US$ million) 3.7 3.7/1 Disbursed and Outstanding )4/30/77 4.2- Undisbursed ) 0.1 Date Physical Components Completed 12/31/72 11/73 Proportion Completed by Above Date (%) 90 100 Proportion of Time Overrun () - 20 Economic Rate of Return (%) 50 19 OTHER PROJECT DATA Original Actual or Item Plan Revisions Est. Actual First Mention in Files 8/10/66 Government's Application - - 8/31/67 Negotiations 6/68 7/68 8/8-19/68 Board Approval 6/68 10/68 10/08/68 Credit Agreement 6/68 10/68 10/10/68 Effectiveness 12/15/68 1/15/69 1/14/69 Closing Date 12/31/72- Numerous 6/30/77 Borrower Republic of Togo Executing Agency Public Works Department Fiscal Year of Borrower 1/1 - 12/31 Follow-on Project Second Highway Project (Credit 450-TO of December 1973 for US$8.7 million) MISSION DATA Date Sent Month, No. o3 No. of of Full by Year Weeks-- Persons Manweeks- Report Identification PMWA 5/67 n.a. n.a. n.a. 7/67 Appraisal IDA HQ 11/67 .5 2 1 9/68 Supervision I IDA HQ 4-5/69 1 3 3 5/69 Supervision II IDA H.Q 11/69 1 1 1 12/69 Supervision III IDA HQ 3/70 2 2 4 3/70 Supervision IV PMWA 11-12/70 2 4 8 1/71 Supervision V IDA HQ 5/71 1 2 2 6/71 Supervision VI PMWA 10/71 1 1 1 10/71 Supervision VII IDA HQ 5-6/72 1 1 1 6/72 SupervisionVIII IDA HQ 9/72 n.a. 2 n.a. 10/72 Supervision IX IDA HQ 3/74 1 2 2 5/74 COUNTRY EXCHANGE RATES Name of Currency CFA franc (CFAF) Year: 1967 Exchange Rate: US$1 = CFAF 247 1969-73 US$1 = CFAF 249 /1 Includes exchange adjustment of US$600,000. 72 As shown in Credit Agreement. Number of 5-day weeks shown in the mission report plus travel time. -4 Number of weeks times number of persons.  PROJECT PERFORMANCE AUDIT REPORT TOGO HIGHWAY MAINTENANCE PROJECT (CREDIT 131-TO) Highlights This first IDA project for highway development in Togo supported a four-year maintenance program and preinvestment studies for secondary roads. The total project cost was expected to be US$4.4 million, toward which IDA Credit 131-TO provided US$3.7 million. Some progress was made in meeting the objectives of the program: maintenance equipment was provided, maintenance operations were improved, and training was carried out. However, difficulties in implementing the new organization and in procuring equipment delayed completion of the project until about a year later than expected at appraisal. In addition, only half of the expected road maintenance output was achieved. As a result of the delays and lower than expected output, the audit rate of return is considerably lower than the appraisal estimate (19% against 50%) but still satisfactory. Despite these difficulties and others which necessitated additional work on the preinvestment studies, the project provided a basis for the Second Highway Project (Credit 450-TO of December 1973 for US$8.7 million) under which further maintenance improvements are being made and the roads covered by the studies are being constructed. The following points may be of particular interest: Overestimation at appraisal of quality of PWD local staff and availability of counterparts for consultants (para. 7); Insufficient training achievements (para. 8 and PCR, para. 3.07); Unplanned assumption of executive responsibility by consultants (para. 9); Insufficient appreciation of potential agricultural benefits from roads to be studied (para. 10 and PCR, paras. 3.13-3.19); Inappropriate diversion of maintenance resources (para. 11); and Substantial reorganization of maintenance operations and lack of full increase expected in maintenance output (PCR, paras. 3.02- 3.06 and 3.10-3.12).  PROJECT PERFORMANCE AUDIT MEMORANDUM TOGO HIGHWAY MAINTENANCE PROJECT (CREDIT 131-TO) I. Background The Transport System 1. Togo's transport system (PCR, Map) consists principally of some 7,400 km of roads, of which about 1,100 km are surfaced. The 717 km south- north highway between Lome and the Upper Volta border forms the spine of the highway system, and the east-west coastal route is a part of the Accra-Lagos highway. Subsidiary routes feed into these two main highways, the network being most dense towards the coast where the population is concentrated. The railways comprise approximately 440 km on three main routes, focussed on Lome. There also is a deepwater port and an international airport at Lome. Little internal air traffic exists, since the small size of the coun- try and its relatively good road system make surface travel between the capital and most parts of the country possible within eight hours for most of the year. Bank Group Support for Roads 2. Three IDA credits totalling US$22.4 million 1/ have been provided since 1968 to assist the development of Togo's highway program. They include preinvestment studies, road construction, purchase of highway maintenance equip- ment, and technical assistance for highway maintenance and transport planning. The Third Highway Project is just starting. The Second Highway Project is near completion. The Highway Maintenance Project (First Project) has been completed and is the subject of this Project Performance Audit Report. The Highway Maintenance Project 3. Credit 131-TO for US$3.7 million was approved by the Executive Directors in October 1968. The project components included a four year maintenance program and preinvestment studies for secondary roads (PCR, para. 2.01). The maintenance program was based on recommendations of a USAID-financed study, of October 1966, by Development Economics Group (DEG), which had followed a 1965/66 USAID grant of US$1 million for maintenance equipment. The studies under the IDA credit were for roads included in the Government's Five Year Development Plan (1966-70). The roads had been selected on the basis of the 1964 Transport Study by SEDES (France) and the 1966 general transportation mission of the Bank's Regional Mission in Western Africa. The formulation of the project is further discussed in Section III, "Main Issues." I/ Highway Maintenance Project, Credit 131-TO of October 1968 for US$3.7 million, Second Highway Project, Credit 450-TO of December 1973 for US$8.7 million, and Third Highway Project, Credit 693-TO of April 1977 for US$10.0 million. - 2 - II. Project Results 4. The overall project was completed in November 1973, or about a year later than expected at appraisal, and with a small cost underrun of 5%. The delay resulted from the late arrival of the maintenance equipment and the slower than expected implementation of the new maintenance operations. The cost underrun resulted mainly from the lower than expected equipment cost. Training as planned at appraisal has been substantially carried out. The original preinvestment studies were not fully satisfactory because they under- estimated costs and overestimated benefits from the project roads; new terms of reference were issued in 1971 and the studies were successfully completed. In addition, the Government was not able to observe all the credit covenants by the end of the project period (PCR, paras. 3.20-3.25) and some of the maintenance resources were diverted to other work. The reasons for the preceding shortfalls in performance are examined in Section III. 5. The economic benefits at appraisal were measured on the basis of ex- pected reduction in vehicle operating costs, and a 50% economic rate of return was forecast. The economic reevaluation in the PCR uses the same assumptions as those at appraisal, but with revised traffic and vehicle operating cost data, and a 19% economic rate of return is estimated. The lower rate of return than at appraisal results from a longer implementation period and the fact that the improvement to road maintenance output was only about half that anticipated (measured in terms of daily output, PCR, Table 4). III. Main Issues Insufficient Project Formulation 6. This project, which evolved from a proposal identified in early 1967 by the Bank's Regional Mission to Western Africa, originally identified for investment a maintenance program, preinvestment studies of 400 km of secondary roads, and paving the Lome-Palime Road (120 km). The Government's formal request for Bank Group assistance, presented in August 1967, was for a mainte- nance program only and this was appraised in November. In March 1968, the Government requested the inclusion of feasibility studies of 454 km of second- ary roads followed by detailed engineering of about 300 km, and this was agreed. Paving of the Lome-Palime road was financed by Fonds Europeen de Developpement (FED). 7. Appraisal of the maintenance program was carried out by one engineer and one economist during three days in November 1967. Despite the availabil- ity of the DEG report and the experience of the previous USAID grant for road maintenance, the appraisal period was too short to arrive at an understanding of the important factors affecting this type of project, unless the mission had intimate prior knowledge of the country. Consequently, the quality of local staff in PWD and the ability of the Department to make them available as counterparts or to support the work of consultants were both overestimated. - 3 - This led to insufficient emphasis being placed on some aspects of training and on improvement of planning, procedures, and management before the arrival of equipment. The project as conceived concentrated heavily upon the provision of mechanical equipment and training of operators and workshop staff, without ensuring that parallel improvement would take place in the other functions of the PWD essential for effective operations. 8. Operators, mechanics, and maintenance staff were trained at the Regional Center for training in Highway Maintenance in Lome, an institution serving a number of countries in the region and sponsored by USAID, Fonds d'Aide et de Cooperation (FAC) and FED. Twenty-two staff were trained over- seas by equipment suppliers and in-service training was given by the consul- tants. In spite of these efforts, however, the improvement in the whole main- tenance operation was below expectations due to a lack of sufficient knowledge and experience in the professional, managerial, and supervisory staff. 9. Given counterparts with sufficient basic training, the expatriate consultant is normally able to concentrate on the transfer of expertise, leaving details of execution to the counterpart. Lacking such counterparts in this case, the consultants undertook executive responsibility, although without executive authority. Consequently, they had less time to impart their knowledge of organization and management to local staff who lacked such skills. Had this situation been recognized at appraisal, the consultants could have been appointed to undertake executive responsibility for a period, while specific training, probably overseas, took place to fill the managerial and supervisory gaps which existed. Without this training, results have not been up to expectations, in spite of an extra 58 man-months of con- sultant time in the project and continued technical assistance in the Second Highway Project. 10. In planning the preinvestment studies, it seems that it was not appreciated sufficiently that agricultural development would be a critical factor in the benefits to be derived from investment in improving the roads, and that planning for agricultural development must be undertaken in advance of that for roads. Although the Terms of Reference given to the consultants included details of the agricultural benefits to be evaluated, the consultants were unable to do this satisfactorily in the absence of firm policy decisions from Government, which were not forthcoming at the time they were needed. Therefore, when the roads studies were completed, doubts arose as to whether the agricultural development forecast would, in fact, take place. A review by the Bank of the road feasibility studies indicated that the consultants had underestimated costs and overestimated benefits, thus leading to over- optimistic judgements about viability. During September 1971 meetings with the Government, an agreement was reached on the additional economic work and detailed engineering to be carried out on four selected roads. The original Terms of Reference were revised accordingly. Improvement of these four roads was found justified. Two are being constructed under the Second Highway Project, the third is included in the Third Highway Project, and the fourth has been constructed with funds provided by FED. Diversion of Maintenance Resources to Other Work 11. The Bank supervision mission of September 1972 reported the diver- sion of about half the maintenance equipment supplied under the project to other work, and this issue was raised in a subsequent letter to the Govern- ment. At that time, all maintenance equipment was scattered within the five Territorial Subdivisions of the PWD and the local Prefects felt free to divert it for use on other public infrastructure than the primary and secondary road networks. In 1975, under the Second Highway Project, main- tenance operations were reorganized. All the equipment used for periodic maintenance was put under the direct responsibility of PWD's Road Division, which greatly reduced its diversion by local authorities. IV. Conclusions 12. The Togo Highway Maintenance Project was completed at a cost close to the estimate, but about a year later than expected at appraisal. Although results fell short of expectations, implementation was generally satisfactory insofar as equipment for better road maintenance having been supplied, some improvement in maintenance operations having been realized, and training as planned at appraisal having been substantially carried out. The preinvest- ment studies have yielded results which allowed follow-on investments to be made. 13. The economic reevaluation (PRC, paras. 4.01-4.07) indicates that the investment in this project was sound, although the economic rate of return is substantially lower than originally expected, mainly because of the delay in getting the program started and the less than expected improvement in maintenance operations. ATTACHMENT TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT 1. INTRODUCTION 1.01 In October 1966, the US consultants Development Economic Group (DEG), completed the US-financed "Study on Highway Maintenance Requirements" in Togo. The study concluded that the highway system was of insufficient quality to encourage econ omic growth throughout the country. The consultants found that most of the roads were in very poor condition, resulting from inadequate maintenance caused mainly by shortages of equipment and spare parts, and by insufficient budget allocations for recurrent expenses. Better conditions for road transportation could be provided by improved road maintenance. Up- grading of primary highways was, however, not justified at that time due to the low volume of traffic. 1.02 The Government of Togo prepared a four-year road maintenance program (1969-1972) on the basis of the above study, and in September 1967 applied for IDA assistance in its financing. The project was appraised in November 1967. In January 1968, the Government submitted an additional request for financing of preinvestment studies for high priority secondary roads, and in March 1968, the roads to be studied (about 450 km) were identified. The Credit Agreement was signed on October 10, 1968. This was the Bank Group's first lending operation in Togo. 2. THE PROJECT A. Description 2.01 The project consisted of: (i) a four-year road maintenance program providing for the purchase of road maintenance and shop equipment, improve- ment of road maintenance operations, and training of personnel at all levels, to be implemented with the assistance of consultants; and (ii) feasibility studies of about 450 km of secondary roads and, if justified, the preparation of detailed engineer- ing and bidding documents for about 300 km of the highest priority roads. Road Maintenance Program 2.02 In 1967, the Public Works Department (PWD) was responsible for maintenance of a 1,660 km road network, of which only 204 km were paved, and approximately 1,100 km were gravelled. The condition of the unpaved - A.2 - roads was generally poor. Drainage outlets were clogged and trees were planted along the roadway which obstructed ditches and created a safety hazard. The wearing course of gravel roads had deteriorated. Potholes and ruts were common and most of the roads were impassablt after heavy rains. 2.03 The program's objectives were to (i) improve maintenance by providing additional equipment, training of maintenance inspectors, operators and mechanics and reorganizing field operations; and (ii) gradually upgrade to gravel standards the remaining 360 km of earth roads in the national network. The program was to be carried out with the assistance of consultants. Preinvestment Studies 2.04 About 450 km of roads were selected for feasibility studies on the basis of the economic significance of the area they served. These studies were in accordance with the objectives of the country's five-year development plan, which aimed at increasing agricultural output and develop- ing livestock production. These roads were (see Map): 1. Natchamba-Kabou-Awandjelo 78 km 2. Lama Kara-K6tao 35 km 3. Sokode-Tchamba-Kanmbol6-Sotouboua 156 km 4. Y6gu6o-Pagala-Langabou 47 km 5. Elavagnon-Kouniohou 55 km 6. Ghana border-Palim6 13 km 7. Agou-Nuatja 70 km 454*km 2.05 The project also provided for the detailed engineering of about 300 km of roads which were to be selected as having the highest priority among those studied. B. Cost Estimates and Financing 2.06 At the time of appraisal, the total capital cost of the project was estimated as follows: 1! US$ Million- A. Maintenance Program 1. Equipment and spare parts 2.16 2. Technical assistance 0.76 3. Contingencies (physical) 0.24 B. Preinvestment Studies 1. Feasibility studies of 450 km 0.88 2. Detailed engineering of 300 km 0.38 TOTAL 4.42 1/ US$1 = CFAF 247 - A.3 - 2.07 The cost of new equipment and spare parts was based on Consultant DEG's estimates, and included a 10% allowance for price escalation. A contingency of 10% was added to cover additional miscellaneous equipment needs which would become apparent once the new equipment was in operation. The cost of technical assistance for the maintenance program and preinvest- ment studies was based on contracts already negotiated by the Government and approved by the Association with Consultants Louis Berger (USA), DIWI (Germany) and Kez and Associates (Canada). 2.08 The project was financed by a Credit of US$3.7 million which was estimated to cover all foreign expenditures, plus US$80,000 for the local cost of the technical assistance. The estimated remaining local expenditures of US$720,000 equivalent were to be borne by the Government, as well as about US$5.90 million equivalent for recurrent expenditures during the four years of the program. 3. PROJECT IMPLEMENTATION A. Road Maintenance Program Phases of Execution 3.01 The program was executed in two phases. The first phase lasted three months (March-May 1969) and consisted of (a) reviewing the main- tenance organization; (b) compiling an inventory of equipment and spare parts; and (c) listing the personnel in terms of education and professional experience. At the end of this period, the inception report provided (a) a reorganization plan for road maintenance; (b) a list of additional equipment needed; and (c) an outline of staff recruitment and personnel training needs. The consultant's recommendations were implemented during the second phase of the program (June 1969-November 1973). This phase is described in the following paragraphs. Maintenance Reorganization 3.02 Consultants recommended creating two sections within the Road Division, one to be responsible for road construction and the other for road maintenance. These changes were not implemented as there were no qualified Togolese engineers to head the sections. Due to this lack of qualified Togolese, the consultants also had to take direct charge of maintenance operations, and were unable to assist in strengthening the Division's administration and unable to train Togolese counterparts. 3.03 Under the previous maintenance organization, the national road network was maintained by the Road Division of PWD through its five Territorial Subdivisions. The Subdivisions were further divided into Sectors composed of gangs assigned to each road section, headed by road inspectors. - A.4 - 3.04 Maintenance in the Territorial Subdivisions was reorganized to operate more efficiently and to increase productivity of staff and equipment. The Road Sectors were made responsible only for manual operations (e.g. cleaning slopes and shoulders, clearing the drainage system, filling in potholes). Within each Subdivision several specialized units were created: one for regravelling, one for re-shaping, and where justified, one for resealing. Another unit was organized under direct Road Division management to improve earth roads. Guidelines for the performance of each task were issued and a performance accounting system was set up. 3.05 Equipment maintenance was redefined on the basis of five operational levels: daily maintenance, periodic maintenance, small repairs, large repairs, and general inspection. The Territorial Subdivisions perform daily and periodic maintenance and small repairs in their workshops. Large repairs and general inspection is carried out by the Equipment Subdivision (either in Lom6, in the southern part of the country, or in Sokodg, the main town in the northern area). To cope with the increase of equipment,a new workshop was constructed in Lomg for the Equipment Subdivision under local financing (January 1970-October 1972). 3.06 Existing equipment was rehabilitated in the Lomg workshop. New equipment and about 10% of the equipment value in spare parts were purchased through international competitive bidding. Most items were delivered in early 1971. A list of major equipment repairs and purchases is given in Table 1. Training of Local Staff 3.07 Field supervision was reinforced to meet the new maintenance objectives. The number of road inspectors was nearly doubled, and unit heads were appointed to direct the new mechanized units. The number of operators, mechanics and clerks was increased (Table 2), with the best workers being promoted to positions of greater responsibility. Vacan- cies were filled either by workers from other PWD services or from out- side. Twenty-two staff members, mostly mechanics, were sent abroad for training by equipment suppliers. Another 109 workers were given USAID- sponsored courses at the Regional Center for Training in Highway Main- tenance in Lom6. Two chief mechanics were enrolled at the National Cen- ter for Professional Training in Lomg. Intensive on-the-job training was also given by the consultants to personnel at all levels. Training of local staff had practically been completed by early 1971 when the bulk of the equipment was delivered. Consultants' Services 3.08 The consultants, Louis Berger (USA), were selected in August 1968 to provide technical assistance to the Government in implementing all phases of the project. Their team (Table 3) consisted of two equipment experts, two equipment inspectors, two highway maintenance experts and one cost accountant (total 183 man-months). They were expected to be in the - A.5 - field from March 1969 to January 1973. Project implementation proved slower than expected, and technical assistance was extended to November 1973 (total 241 man-months); it was continued under the Second Highway Project (Credit 450-TO) and the Third Highway Project (Credit 693-TO). 3.09 The consultants' performance was satisfactory. Staff training was completed on schedule and delivery of most equipment items was only two or three months later than forecast in the inception report. The main problems were in implementing the new maintenance organization, which reduced subdivision authority but increased supervision and inspection by the Division. Since the proposed Road Maintenance Section was not created (para. 3.02), and the consultants had no executive position in the administration, they had no authority over subdivision heads. Consequently, productivity of workers and equipment increased more slowly than estimated at appraisal, calling for an extension of the technical assistance for another 130 man-months under the Second Highway Project, and 77 man-months under the Third Highway Project. Output of the Maintenance Program 3.10 The first 2-1/2 years of the program was dedicated to training, purchasing equipment and reorganizing. The new system began operating in late 1971. Thus, the system was only fully operative for the last two years of the project (1972-73). During this period, about half of the yearly goals were met (Table 4). This output was less than estimated originally due to improper organization of the Road Division (para. 3.02) and a lack of interest on the part of Territorial Subdivision heads (para. 3.29). 3.11 Technical assistance for highway maintenance has been continued under the Second Highway Project to improve the output. At the beginning of 1975, the Government decided to increase the responsibilities of the Road Division by putting it in direct charge of all the regravelling previously supervised by the Subdivisions. 3.12 Output of the workshops is not yet satisfactory, mostly due to difficulties in buying spare parts as well as inefficiency of some mechanics, since the best of them have left to work in the private sector where salaries are much higher. Repairs take two to three times longer than in private shops. Instead of further developing the workshops in Lomd and Sokode, presumably a more satisfactory alternative in future would be to contract certain repairs to private shops. B. Preinvestment Studies 3.13 Government divided the roads into two lots as follows: Northern Area 1. Natchamba-Kabou-Awandjelo 78 km 2. Lama Kara-Kand6 35 km 3. Sokodg-Tchamba-Kanmbole-Sotouboua 156 km 269 km - A.6 - Southern Area 4. Y6gu6o-Pagala-Langabou 47 km 5. Elavagnon-Kouniohou 55 km 6. Ghana border-Palim' 13 km 7. Agou-Nuatja 70 km 185 km 3.14 With the Association's approval, the Government selected Kez and Associates (Canada) for the Northern Area roads and DIWI (Germany) for the Southern Area roads. 3.15 The feasibility studies started in February 1969,were expected to be completed within nine months. DIWI's report was received in December 1969, and Kez' in March 1970. A total of about 270 km of roads was identified for possible Bank Group financing. However, the Association had some doubts as to whether the proposed development program in the service areas of the roads would be implemented. 3.16 After the Association had reviewed the studies, a meeting was held in Washington on September 15 and 16, 1971, with the Minister of Public Works and Transportation, and it was decided to continue with the following items: (i) additional economic work and concurrent detailed engineering of Agou-Nuatja road; (ii) detailed engineering of the Sokode-Tchamba road section (40 km), and of 11 bridges on the Tchamba-Kanmbol' section; (iii) feasibility study followed by detailed engineering of the Blitta-Sokode road; and (iv) update of BCEOM's 1968 feasibility study of the Lama Kara- Kande road, for which detailed engineering was completed. 3.17 DIWI completed the detailed engineering and bidding documents for construction of the Agou-Nuatja road (item (i) above) without further delay. Construction of the road was included in the Second Highway Project (Credit 450-TO) but had to be deleted because of cost overruns on other items of the project. The road is now included in the Third Highway Project. 3.18 Kez and Associates resumed work in September 1972 (scheduled for May), and the detailed engineering of the Sokode-Tchamba-Kanmbol6 improvements (item (ii) above) was completed in June 1973, after an additional three-month delay. The road was completed under the Second Highway Project at end 1976. - A.7 - 3.19 Consultants BCEOM (France) prepared the studies under (iii) and (iv), which were completed in August 1972. Reconstruction of the Blitta- Sokod6 paved road showed a good economic return, and the consultant sub- mitted the draft detailed engineering and bidding documents in March 1973. The road is being reconstructed under the Second Highway Project. Im- provement of the Lama Kara-Kand6 road to a paved standard proved justified. The road was constructed under a grant from the European Development Fund in 1973-1975. C. Covenants of the Credit Agreement 3.20 During negotiations it was agreed that the Government would (i) institute and enforce right-of-way standards for roads (Article IV, Sec. 4.01 (d)); (ii) enforce axle load limits on the road network (e); (iii) ensure the development of adequate statistics for future transport planning (f); (iv) allocate sufficient funds for the maintenance of the national highway network (Sec. 4.03); and (v) phase out two railway branches over a period of 10 years (4.04 (a))and not extend the main railway line 4.04 (b). Right-of-Way Standards for Roads 3.21 On August 20, 1968, the President of Togo signed decrees 68-155, and -156, and -157 which (a) listed the roads belonging to the national highway network; (b) defined a 30 meter wide right-of-way for national roads outside cities, and a 20 meter wide right-of-way for regional roads; and (c) specified the starting points for road kilometrage. The rights- of-way have been enforced since then without any difficulty. Axle Loads 3.22 The axle load limit in Togo is currently 13 tons for the equiv- alent single axle, and the Government intends in the future to follow EEC regulations. The Road Transport Service (RTS), which was decreed in 1969, is in charge, inter alia, of controlling road traffic in liaison with the Road Division (RD) and the Police Department. RTS actually began operating in 1974, and is preparing a presidential decree which sets fines for vehicle overloading. Five mobile weighing scales were bought in 1970 under this project. To control vehicle load, RD and RTS are now planning to use these scales on four locations along the main axis Lome- Upper Volta border, which is presently the only road with heavy inter- national traffic from/to landlocked Upper Volta, Niger and Mali. - A.8 - Statistics Collection 3.23 Manual traffic counts used to be undertaken by the five Sub- divisions of Public Works at about forty locations, at the rate of one full week every month. These data were unreliable and so numerous that they were never processed. In 1974, consultants Louis Berger reorganized manual traffic counts under the Second Highway Project, and the 1975 data seem reasonably accurate. The Government purchased traffic counting equip- ment and started to check the manual counts at specific locations in 1976. Funds for the Maintenance of National Roads 3.24 Funds allocated for maintenance of the national road network have steadily increased since 1969, as shown below (in current prices): --------------In CFAF Millions------------------ 1969 1970 1971 1972 1973 1974 1975 Expenditures for maintenance and betterment by force account 165.3 165.3 226.8 275.3 321.6 327.4 447.0 Personnel and overheadl/ 70 75 88.0 100.8 108.0 100.1 104.6 TOTAL 235.3 240.3 314.8 376.1 429.6 427.5 551.6 Over the 1969-75 period, maintenance funds increased by 134% in current prices, or about 44% in constant prices (inflation is estimated at 60%-65% over the period), while the kilometrage of roads maintained by the Public Works Department increased by only 15%, from 1,887 km to 2,173 km. Thus maintenance allocations per kilometer increased by about 25% in real terms. In 1975, an average of about US$1,000/km was spent for maintenance and improvement by force account of the national road network. This amount should be adequate to achieve a satisfactory condition of the roads. Phasing-out of Two Railway Lines 3.25 The Togolese Railway consists of three lines parallel to existing paved roads, extending from the capital of Lome north to Blitta (276 km), west to Palime (116 km), and east to Aneho (44 km). As a result of competition from road transport, the railways have experienced a continuing decrease in the already low volume of traffic, and have been subsidized by the Government. The Credit Agreement stipulates that the Borrower: (a) shall phase out over a ten-year period the Togolese Railways from Lome to Palime, and from Lome to Aneho after paving of the Lome-Palime and Lome-Aneho roads (1978 and 1981 respectively); and (b) shall not extend the Lome-Blitta railway line north of Blitta, except if a feasibility study, satisfactory to the Association, establishes its economic justification. 1/ Mission estimate. - A.9 - 3.26 The recent economic mission (March 1976) collected the latest data and information on the railway's prospects. This showed that: (a) the Lom4-Palim4 line continues to incur losses (US$400,000 per year); (b) the Lom4-An6ho line, if the proposed fertilizer plant is built, may require additional investments rather than closure because a substantial volume of phosphate-associated bulk traffic would be carried on the line; and (c) the Lome-Blitta line has now become the line liable to incur the largest financial deficits (estimated at US$1.0 million per year). 3.27 During negotiations of the Third Highway Project (December 1976), the Government stated that the three railway lines, although incurring losses, still serve a useful socio-economic role as passenger carriers, and that it would be politically impossible to consider closing them. As the closing of the two branch lines of Lome'-Palime and Lome-Aneho would not substantially reduce the railway deficit and is no longer the main railway issue, the Association accepted deletion of the corresponding covenant of the First Highway Project (para. 3.25(a)), provided that a study be made on ways to help the railway to improve its operations. This study is included in the Third Highway Project, and the Government has committed itself to take appropriate measures for the implementation of a program for the improvement of railway operations, as recommended by the study and approved by the Association. D. Performance of Borrower 3.28 Although it was the first Bank Group project in Togo, in general, the Government executed the project satisfactorily. 3.29 More could have been achieved under the Project, however, had the Ministry of Public Works displayed more interest in (i) procedures for reorganizing the Road Division; and (ii) providing adequate counter- parts to be trained by the consultants in charge of road maintenance. The lack of interest of Territorial Subdivision heads also considerably slowed down implementation of new maintenance operations, and they were reluc- tant to adapt to the new organization. As a result, the maintenance units created in the Territorial Subdivisions did not have the proper support and guidance to maintain high productivity. E. Time Schedule, Costs and Disbursements 3.30 Training of personnel and purchase of equipment was completed as scheduled in the consultants' inception report. However, improvement of maintenance operations had to be extended by ten months, and was continued under the Second Highway Project for another three years. There was a delay of 1-1/2 years between receipt of the feasibility studies and the start of detailed engineering, as the economic evaluation had to be improved. 3.31 Actual project costs were in line with appraisal estimates (see Table 5). Costs of consultants' services for road maintenance totaled US$998,000, an increase of 23%, with an additional ten-months - A.10 - worked. Procurement costs for maintenance equipment and spare parts totaled US$1.8 million, 23% less than originally estimated. Preinvest- ment studies totaled US$1.4 million, only 8% more than estimated, since the cost for preparing the additional economic evaluation requested by the Association was nearly balanced by the savings of the reduced engineer- ing kilometrage (172 km vs. 300 km estimated). An undisbursed amount, US$277,000 (7% of the Credit) remained at project completion which will be used to cover partial costs of technical assistance for road maintenance under the Second Highway Project. 3.32 Disbursements were far behind schedule (See Table 6). It was estimated that all equipment purchases would be fully paid in less than six months after the effective date of the Credit, and that all funds would be exhausted six months before the end of the four-year main- tenance program. 4. ECONOMIC RE-EVALUATION 4.01 This project was appraised eight years ago; the economic data were not presented in sufficient detail to permit now more than a general review of the B/C ratio and economic return. In addition, accurate data on total capital expenditures in maintenance operations, recurrent maintenance expenditures, and actual maintenance output carried out are not available. 4.02 However, the data available on the execution of the maintenance program reveal the achievements and shortfalls of the project. The Final Report prepared in 1975 by consultants Louis Berger is the main source of this information, although the report does not provide necessary data for a detailed economic analysis. 4.03 The targets and annual output of the maintenance program were not clearly defined in the appraisal. It was envisaged that regular and better maintenance would be carried out and that the road network would be gradually upgraded during the coming years, including the earth road portion of about 360 km of the national road system which would become surfaced with gravel. 4.04 The maintenance program was scheduled to be carried out between 1969-1972. However, due to the delays in the start up of the program (equipment arrived in early 1971), full scale execution of road main- tenance actually began only at the beginning of 1972. According to the original time schedule the program would yield 50% of benefits in 1970, 75% in 1971, and full benefits would materialize starting from 1972. The targets of the maintenance operations were set by the technical assistance team in accordance with the Association, since they were not prepared at the time of appraisal. The results of maintenance output are only available for 1972 and 1973 (Table 4). On average, only about 50% of the planned targets were actually carried out in regravelling, reshaping, and pothole filling, etc. - A.11 - 4.05 The Appraisal Report assumed that after 1969 average traffic growth would be 6-8% annually, a realistic assumption according to the data produced by consultants. In the period 1970-1974, the PWD carried out traffic counts on major roads.l/ Annual average traffic growth on these roads was between 10-12%. Since the counts were carried out on important trunk roads, the average traffic growth on the overall primary road network (2,000 km) in the period 1969-1975 could reasonably be assumed to be in the vicinity of 8%. In 1974, on the gravel/earth road part (1,100 km) of the project network about 600 km had an average daily traffic of more than 40 vpd. 4.06 Assuming savings in vehicle operating costs only during the economic life (1969-1976) the Appraisal Report estimated that the project would have a benefit/cost ratio of 2.1:1 discounted at 10% with corres- ponding economic return of 50%. The economic re-evaluation, done in 1972 prices, was based on the estimate of capital expenditure and recurrent maintenance expenditures, reassessed traffic growth of 8% annually and savings in vehicle operating costs (Table 7) for earth/gravel road net- work only (about 1,100 km). The project also produced the benefits from maintaining the paved network (particularly in delaying new reconstruction costs), but they have not been taken into account; therefore, the results of the re-evaluation of the project should be considered as conservative. Based on the new economic life (1970-1977), a plausible benefit/cost ratio could be determined. Taking into account the available data, the best estimate of the benefit/cost ratio is about 1.2:1 discounted at 12% with the corresponding economic return of 19%. 4.07 Even though the program started later than expected and was not carried out to the extent originally anticipated, the condition of the primary road network has been improving. Moreover, the continuation of the technical assistance under the Second Highway Project (Credit 450-TO) is expected to complete the training and organization changes required for an efficient operation. Taking into account non-quantifiable benefits as well, it could be concluded that the overall economic viability of the maintenance program is confirmed by the re-evaluation. 5. CONCLUSIONS 5.01 In retrospect, it appears right that in the road subsector first priority was given to the improvement of highway maintenance. The mainte- nance program met most of its objectives, in the sense that it adequately trained local staff and started building a strong maintenance organization. The Government, however, lacked adequate motivation to persevere in building up strong maintenance management. Even though the consultants had developed 1/ Traffic counts carried out by PWD were concentrated on three major directions: Lom6-Atakpam6-Palim6-Lom6; Lom6-An6ho-Tabligbo-Ts6vi6- Lomg; Lom-Sokod6-Upper Volta Border. - A.12 - the framework, there was reluctance to enforce decisions at the Subdivision level. Also, the project schedule was optimistic on the Government's ability to provide adequate engineers to take over maintenance operations and on the time necessary to implement more rational working methods. 5.02 In spite of shortcomings, the project was in general successful; it also provided the basis for the Second Highway Project regarding further improvements of highway maintenance and construction of roads for which feasibility studies and detailed engineering were carried out under this project. TABLE 1 TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT List of Equipment Purchased and Rehabilitated Carried Out Total Requirement Under the Project Appraisal Revised Item Estimate Estimatel/Rehabilitated Purchased Graders 24 20 8 11 Bulldozers 9 7 2 4 Traxcavators 7 9 3 6 Rollers (rubber tires) 3 1 0 1 Rollers (steel) 4 10 7 3 Rollers (towed) 10 3 0 3 Tractors 15 23 1 22 Dump Trucks 51 61 11 50 Water Tankers 9 13 2 11 Fuel Tankers 2 1 1 0 Semi-trailers 2 2 0 2 Concrete Mixers 4 5 0 5 Compressors 2 5 0 5 Shredders 0 11 2 9 Patching Unit Trucks 0 5 1 4 Pick-up Trucks 0 54 14 40 Jeeps 0 6 0 6 Trailers 0 32 0 32 Crane Truck 0 1 1 0 Maintenance Truck 0 1 1 0 Generators 0 2 2 0 Lift Truck 0 1 0 1 1/ Prepared by consultants during project execution. Source: Consultants Louis Berger. TABLE 2 TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Maintenance Staff (Excluding Laborers) - - - - - - - - - - -Staff Number- - - - - - --- - - Total Requirement Appraisal Revised Qualified Staff Additional Staff Description Estimate Estimatel/ on-the-job trained under Project Sector Heads n.a. 16 9 7 Unit Heads n.a. 15 0 15 Drivers 105 117 55 62 Operators 83 n.a. n.a. n.a. Chief Mechanics 25 20 1 19 Mechanics 149 99 85 14 Clerks n.a. 33 10 23 1/ Prepared by Consultants during project execution. Source: Consultants Louis Berger. TABLE 3 TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETTON REPORT Technical Assistance for Highway Maintenance Program (provided by Louis Berger) ----------Man-Months------- Appraisal Estimate Actual Mission Head (equipment expert at Lom6) 44 47 Equipment expert at Sokode 35 34 Equipment inspector at Lom6 15 45 Equipment inspector at Sokod6 15 22 Maintenance expert at Lome 33 55 Maintenance expert at Sokod6 20 20 Cost Accountant 16 14 Others 5 4 Total 183 241 Source: Consultants Louis Berger TABLE 4 TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT The Output of Highway Maintenance in 1972 - 1973 Percentage Type of Work Planned Targets Actual Output of Goals Achieved A. Manual Road Maintenance (per man-day) Cutting and clearing grass 125 to 350 meters 105 to 300 meters 80% Pothole filling 3 m3 0.7 m3 23% Ditch clearing 2.5 m3 0.8 m3 32% B. Mechanical Maintenance Cutting and clearing grass 12 km/day 5 km/day 42% Re-shaping 25 km/day 12 km/day 48% Re-shaping with compaction 3 km/day 1.5 km/day 50% Light regravelling 350 m3 per day 150 m3 per day 42% Heavy regravelling 420 m3 per day 215 m3 per day 50% Source: Final Report on the Road Maintenance Program, 'Consultants Louis Berger TABLE 5 TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Estimated and Actual Costs and IDA Participation (us$'000) Percentage of Actual Appraisal Estimate total cost IDA Total financed by IDA Totall/ Category Participation Costs Association Participation Costs A. Consultant's Advisory Services (1) Salaries, air fares, 520 520 100% 631 631 transport, office furnishings, reports and bidding documents (2) Subsistence Allowances 80 240 33% 110 367 Subtotal 600 760 741 998 B. Procurement of Maintenance Equipment and Spare Parts 2,100 2,400 88% 1,606 1,825 C. Preinvestment Studies (1) Feasibility Studies 700 880 79% 953 1,205 (2) Detailed Engineering 300 380 79% 123 156 and Bidding Documents Subtotal 1,000 1,260 1,076 1,360 TOTAL 3,700 4,420 3,423?/ 4,184 Assuming actual percentages of IDA participation was the same as those assumed in the appraisal estimate. 2/ See footnote of Table 6. TABLE 6 TOGO CREDIT 131-TO - HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Appraisal Estimate and Actual Disbursements IDA ACCUMULATED DISBURSEMENTS CUMULATIVE ACTUAL FISCAL US$'000 EQUIVALENT DISBURSEMENTS AS A YEAR END APPRAISAL ACTUAL TOTAL PERCENTAGE OF SEMESTER ESTIMATE DISBURSEMENTS APPRAISAL ESTIMATE 1969 2nd 2,100 285 14 1970 1st 803 2nd 3,200 1,173 37 1971 1st 1,894 2nd 3,600 2,352 65 1972 1st 2,536 2nd 3,700 2,913 79 1973 1st 3,115 2nd 3,700 3,241 88 1974 1st 3,315 2nd 3,700 3,323 90 1975 1st 3,393 2nd 3,700 3,423±- 93 The remaining US$277,000 will be used in FY77 and 78 to cover part of the costs of technical assistance for-road maintenance continued under the Second Highway Project. Table 7 TOGO CREDIT 131-TO HIGHWAY MAINTENANCE PROJECT PROJECT COMPLETION REPORT Vehicle Operating Costs11 (CFAF per km in 1972 prices) Paved Road Earth Road Improved Fair Poor Light Vehicles 3] 14.1 17.1 23.2 30.1 Heavy Vehicles 2/ 53.7 60.4 81.3 97.0 Source: Consultants BCEOM (France) 1/ Net of Taxes 2/ Passenger cars and pick-ups 3/ Trucks  IBRD 22,3R U APRIL 1977 DAPANGO i S A V A N N A TOGO REGION TRANSPORTATION "'9 SANSANNE- NETWORK MANGO - Fr KANDE R E 1 O N NIAMTOGOU KETAO zAAKARA <ABOUI No chomm,bo> > N.6.-b BASSARI C E N R A L SOKODE R E G l O N Knbi 5010UBOUA - ASPHALT ROADS - LATERITE ROADS BLITTA - - - M RAILWAYS YEGU b 10 20 40 60 Pagalo Longoou KitoME T -ERS -- --INTERNATIONAL BOUNDAR \ Z P L A T E A U KOUINIO HOU IL BADOU ATAKPAME o Kpeo. B-n Elavg R E G l O N The bouka, h,-n nfis maP dt, npl, eno ,rsement or accept,ce b, the World Yank an «t affiWtev ADET A TOHOUN PALIMEi GOU GARE M A R l T IM E TABt.IGBO R E GI N ýMAURITANIA sENEG A L1 / N l G E R ASSAHOU u,vI T5EVIE GUINAk NGA VOGAN ANFOUIN LE N OE N ANEHO L1BERA JCOASTý ATANicOCAN EQUN0LME f OF LI GABO,J