Oman - Highway Maintenance Project

FILE * Document of COPY The World Bank FOR OFFICIAL USE ONLY Report No0P-2O82-oM REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE SULTANATE OF OMAN FOR A HIGHWAY MAINTENANCE PROJECT May 18, 1977 This document has a restricted distribution and may be used by recipilents only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$ 1 - Omani Rial (OR) 0.345 OR1 - US$ 2.9 OR 1,000 - US$ 2,900 OR 1 million - US$ 2.9 million Fiscal Year January 1 to December 31 ABBREVIATIONS RD Roads Department ICB International Competitive Bidding MC Ministry of Communications PDO Petroleum Development (Oman) Limited ADT Average Daily Traffic TPU Training Production Unit  FOR OFFICIAL USE ONLY SULTANATE OF OMAN - HIGHWAY PROJECT LOAN AND PROJECT SUMMARY Borrower: Sultanate of Oman. Amount: US$15 million equivalent. Terms: Interest rate of 8.20 percent per annum. Fifteen years amortization including three years grace. Proiect Description: In accord with the Government's intentions to protect its heavy concentration of highway investments in recent years and sustain an efficient national transport network to serve the present and forecast transport demand, the project would assist the RD to establish effective and efficient routine highway maintenance procedures. The Government recognizes the significant shortage at all staff levels of suitable trained Omani nationals to participate in the highway maintenance effort. An important project objective would be to help overcome this shortage by both a specific training program and on-job training. The major components are: Hifthway Maintenance i. maintenance equipment and spares; ii. workshop construction; iii. workshop equipment and spares; iv. fuels, oils and lubricants; v. soils laboratory, survey and communications equipment and highway supplies. Training i. construction and equipment of classrooms; ii. overseas and lotal training. Technical Assistance i. consultants for maintenance management and training; ii. consultants for administrative, planning and operational support to the Roads Department. This document has a restricted distribution and may be used by recpients only in the perfomance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Cost: US$ Million Proposed Bank Item Local Foreign Total Participation I. Highway Maintenance a) Maintenance equipment & spares - 5.0 5.0 5.0 b) Workshop construction 0.6 4.4 5.0 4.0 c) Workshop equipment & spares 0.1 0.9 1.0 - d) Fuels, oils and lubricants 3.0 - 3.0 - e) HQ & soil lab.bldg. constr. & eqpmt; survey & communi- cations eqpmt; bldg. mtc., utilities, hwy, office & gen.supplies 0.7 2.7 3.4 - f) Maintenance management expatriate personnel & local staff salaries & allowances 10.0 1.8 11.8 1.8 14.4 14.8 29.2 10.8 II. Training a) Classrooms construction and equipment 0.1 0.3 0.4 0.3 b) Program in Oman 0.4 1.3 1.7 1.3 c) Overseas fellowships - 0.2 0.2 0.2 0.5 1.8 2.3 1.8 III. Technical Assistance 0.3 0.9 1.2 0.9 IV. Total I, II and III 15.2 17.5 32.7 13.5 V. Physical Contingencies (10%) 1.5 1.8 3.3 0.5 VI. Price Escalation 7.5 3.6 11.1 1.0 VII. Estimated Project Cost 24.2 22.9 47.1 15.0 Financing Plan: The proposed loan would finance 32 percent of total project costs and 66 percent of the foreign exchange costs. The Government will finance the balance of project costs, both foreign and local. Estimated Disbursements: (by IBRD fiscal year) FY78 FY79 FY80 FY81 Annual 3.8 4.6 5.0 1.6 Cumulative 3.8 8.4 13.4 15.0  - iii - Procurement The highway maintenance equipment and spares would Arrangements: be procured after international competitive bidding in accordance with the Bank's guidelines. Contracts for the construction of maintenance workshop buildings and classrooms would be procured through local competitive bidding. The purchase of small items of training equipment would follow the normal procedures of the Government. Consultants: About 200 man-months of maintenance management consul- tants' services will be provided to (i) establish and manage the routine maintenance program; (ii) assess training needs, and recommend and implement an agreed training program; (iii) establish cost accounting procedures for highway maintenance operations. About 100 man-months of consultants' services will be provided for administrative, planning and operational support to the Roads Department. Cost per man-month for both groups of consultants is $7,000. Benefit/Cost Ratio: Between 5.8 and 6.2. On the basis of savings in highway user costs, the ERR is over 100 percent. Appraisal Report: No. 1508-OM, dated May 1977   INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE SULTANATE OF OMAN FOR A HIGHWAY MAINTENANCE PROJECT 1. I submit the following report and recommendation on a proposed loan to the Sultanate of Oman for the equivalent of US$15.0 million to help finance a highway maintenance project. The loan would have a term of 15 years, in- cluding 3 years of grace, with interest at 8.20 percent per annum. PART I - THE ECONOMY 2. An economic report entitled "Current Economic Position and Prospects of Oman" dated February 10, 1976 was distributed to the Executive Directors on February 17, 1976. An economic mission visited Oman in November/December 1976 and is preparing its report. Its main findings are summarized below. Country data sheets are attached as Annex I. 3. The Sultanate of Oman occupies most of the southern corner of the Arabian Peninsula covering an area officially estimated at 300,000 square kilometers. Since no reliable population census has been taken in Oman, little is yet known of the size, characteristics or the detailed geographical distribution of its population. Under these circumstances, estimates of total population for 1975 range from 750,000 (based on the UN estimate for 1974) to the Government's official estimate, adopted for planning purposes, of 1.5 million. 4. Oil dominates the economy. Deposits of limestone and natural gas are known to exist in commercially exploitable quantities, but they have not yet been exploited. Deposits of copper, iron, coal and asbestos are also known to exist, but their value remains to be established. The only other natural resource which is currently being tapped in commercial quantities is fisheries. Due to scarce water resources, the total area under cultivation is limited to 36,000 ha, which is less than 0.2 percent of the total area of the country, although nearly 60 percent of the Omanis live in rural areas. Recent Developments 5. When Sultan Qaboos took power from his father in mid-1970, he initiated a series of political and social reforms to transform a medieval society into a modern one, with the principal aim of boosting economic development as rapidly as possible. As part of this process, he undertook a major government reorganization, which resulted in significant power being delegated to individual ministers and the creation of three high-level coun- cils to control and coordinate development activities and expenditures. However, Oman continues to suffer from a serious shortage of trained Omani manpower at both a managerial and worker level; it is thus heavily dependent, and for the foreseeable future will continue to be dependent, on expensive expatriate services in almost all fields.  - 2 - 6. The decade-old guerrilla movement in the southern province of Dhofar, known as the Popular Front for the Liberation of Oman, gave rise to heavy defense expenditures. Following a major offensive launched in late 1975, guerrilla activities seem to have been substantially crushed, if not stopped, but the process of consolidation in Dhofar has not allowed such expenditures to decrease since then. 7. Prior to the commercial exploitation of oil, Oman's economy existed at a subsistence level, based entirely on agriculture, fishing and some minor handicraft activities. Output probably merely kept pace with the growth of the population. Since 1967, with the emergence of oil as a major export, Oman's economy witnessed a period of significant growth as well as structural change. Real GDP is roughly estimated to have increased between 4-6 percent annually between 1967 and 1973, about 40 percent from 1973 to 1974, and 20 percent from 1974 to 1975; a much smaller growth rate is expected in 1976. The growth of oil revenues provided the basis for this exceptionally rapid growth, including public expenditures for development. This, in turn, is reflected in the expansion of construction, public administration and trade. The share of the oil sector in GDP rose from an estimated 30 percent in 1967 to over 67 percent in 1970 and thereafter; the share of construction, almost negligible prior to 1967, grew to 10 percent of GDP in 1970, and subsequently leveled off in the 10-16 percent range. Public administration expenditure has continued to increase in importance, from 2 percent in 1967 to 7 percent in 1975. The agriculture sector stagnated and accounted for only 2 percent of GDP in 1975, in contrast to 37 percent in 1967. 8. Using the 1974 UN population estimate of 750,000, the per capita GNP is estimated at $1,980 in 1975, based on the Bank's Atlas methodology. However, based on the current official Government estimate of 1.5 million people, the per capita GNP would be half that figure. Both figures are mis- leading as a measure of the income and living standards of the average Omani. A high proportion of the income generated in oil, industry, construction, transport and commerce accrues to the foreigners who undertake those activi- ties, although the Government receives most oil revenues. Taking this into account, the average per capita income of an Omani is roughly estimated at around $485 in 1975; but even this does not reveal the true picture of the poverty and backwardness of the bulk of the population. While the average per capita income of Omanis in major urban centers (who make up 25 percent of the total population) is estimated at about $1,250, most of the rural popula- tion (which accounts for approximately 60 percent of the total population, the remaining 15 percent being expatriates), has an average per capita income of less than $200 per year, even including transfer incomes from families working in urban centers and neighboring countries. 9. Oil revenues account for almost all government revenues and foreign exchange earnings. There are two views as to Oman's oil reserves. One, which seems more realistic on the basis of available data, estimates Oman's estab- lished oil reserves at only 1.1 billion barrels as of January 1975, which is equivalent to 9 years production at the 1975 production rate (125 million bar- rels). The other, less plausible, estimate is 3 billion barrels, which would  extend the 1975 level of production up to 24 years. Oman is not a member of OPEC but follows most OPEC decisions. The only company so far producing and exporting oil is Petroleum Development (Oman) Limited (PDO), in which the Government acquired a 60 percent share in 1974. While extensive exploration, both on and offshore, is underway by foreign companies, only two new fields with very limited reserves have so far been found in Dhofar and in the Straits of Hormuz (offshore) near the Musandam Peninsula. Production from these fields will require substantial investments, and hence the companies involved have not yet decided whether to invest the required amounts. The costs of production from these new fields will be considerably higher than that of other oil produced in Oman and in neighboring Gulf countries. Even if these new fields are exploited in the medium-term future, the total volume of oil production will continue to decline for some time from the peak level (135 million bar- rels) reached in 1976, mainly due to technical problems at the existing oil wells. 10. The relatively high level of oil income has enabled the Government to sustain high levels of expenditure in the post-1970 period, when the Gov- ernment launched major investment projects aimed at providing the minimum .amount of economic and social infrastructure, as well as a substantially increased defense effort to combat the guerrilla operations in Dhofar. Gross capital formation increased from 18 to 37 percent of GNP between 1970 and 1975 while the proportion of defense expenditures in GNP grew from 15 to 39 percent over the same period. With the concomitant growth of recurrent expenditure for the maintenance of social infrastructure, the ratio of national savings to gross national product declined from 58 percent in 1970 to 34 percent in 1975, thus requiring external resources to finance part of the capital formation. Over the same period, the ratio of public to total investment increased from around 22 to 78 percent. Most of the private investment has remained in the oil sector. 11. The higher levels of public expenditures since 1970 brought about a marked deterioration in the fiscal situation. The budget, which showed a surplus of OR 25 million in 1970, registered deficits of about OR 18 million in 1972, OR 65 million in 1974, and OR 43 million in 1975. The deterioration took place despite continued increases in revenues resulting from successive upward revisions of oil prices (more or less in line with OPEC prices), as well as of the Government's share of income taxes and royalties and its income from its shares in PDO. While the Government's total revenue increased from OR 45 million in 1970 to OR 459 million in 1975, development expenditures also increased from an estimated OR 2 million to OR 173 million in that period. The overall budgetary deficits since 1972 were financed partly by short-term borrowing from banks at home and abroad, and partly by drawing down Government reserves, as well as by loans and grants from neighboring governments. 12. The increased level of economic activity brought about a substantial increase in the money supply, which grew from OR 7.6 million in 1970 to an estimated OR 94 million in 1976, an average annual increase of 54 percent. With an expanded money supply and the economy's limited production capacity together with the limited import capacity due to severe port congestion,  -4- inflationary pressures were exerted on prices, particularly during 1974 and 1975. In 1976 however, due to declining growth of both Government expenditure and money supply, as well as increased imports following improvements in port facilities, inflationary pressures seem to have lightened significantly, although no reliable domestic price data are available. 13. Since the private sector plays only a minor role in the economy and all goods and services are imported under liberal trade and exchange regimes, Oman's balance of payments closely reflects developments in the public sector. Like the budget, the balance of payments has registered deficits since 1972. Due to increased Government spending, imports of goods and services increased by 88 percent per year in current prices during 1970-75, and reached OR 360 million in 1975, resulting in commensurate increases in current account deficits, even though oil exports rose sharply from OR 44 million in 1970 to OR 373 million in 1975. Non-oil exports amounted to less than OR 1 million annually in recent years. Increased imports of services reflected Oman's increasing reliance on expatriate labor and foreign construction companies. Compared to a surplus of OR 28 million in 1970 the current account balance registered a deficit of OR 25 million in 1972 and increased to OR 116 million in 1975. However, a smaller deficit is projected for 1976, mainly due to stabilized commodity imports accompanied by an increase in oil exports by about OR 100 million. 14. These current account deficits were financed partly by grants, mainly from Saudi Arabia, Abu Dhabi and Qatar, and partly by external commercial loans. Private foreign capital investment appears to have contributed little to financing these deficits, mainly because of Oman's unfavorable resource endowment, including a small domestic market and a shortage of trained man- power, rather than to inadequate incentives. Use of accumulated foreign ex- change reserves was necessary in every year since 1972, to fill the gap in the current account. Thus, Oman's net reserves fell from OR 82 million at the end of 1970 to OR 33 million at the end of 1975, and declined further to OR 8 mil- lion by the end of September, 1976, representing approximately one month of commodity imports. 15. Oman had no foreign debts outstanding until 1972. Since then, it has acquired sizeable debts. They totalled OR 78 million (outstanding and disbursed) as of December 1975. The structure of Oman's officially re- ported external debts is heavily biased toward commercial loans. Some 20 per- cent of outstanding debt was in supliers' credits, 60 percent in commercial bank credits, and the remainder in governments' and Bank loans. Thus, most of the debt has medium-term maturities of 3-7 years, and interest rates of 6-9 percent. Debt service payments on existing loans amounted to OR 13 million in 1975, about 3.5 percent of Oman's export earnings. These debt service payments were stable for 1975, but are projected to rise slightly in 1976 with a similar debt service ratio. The Five-Year Plan and Prospects of the Economy 16. One of the striking features of the Plan, which was prepared under a Technical Assistance Project which the Bank helped to finance in 1974, is  - 5 - a sharp decline in the volume of public investment by about 20 percent per annum between 1976-80, directly reflecting the prospect of falling oil revenues. The Plan also projects a 3 percent per annum increase in GNP (1.5 percent in GDP), despite a decrease in the value added in the oil sector by 2 percent per annum. While construction is expected to decline by 11 percent per annum, mainly due to declining Government development expenditures, agriculture and manufacturing are projected to increase by 14 percent and 70 percent per annum respectively. The Plan also projects a sharp decline in the share of economic and social infrastructure investments in overall public investment: from 84 percent in 1976 to 60 percent in 1980. In the context of declining oil reve- nues, it is important that in the next few years Oman's investment be con- centrated in directly productive sectors, including fisheries. The Plan therefore envisages investments in such projects as cement manufacture, a gas pipeline, oil refining, fisheries development, a flour mill, and sponge iron production. 17. Most of the macro targets of the Plan were projected on the basis of fairly rudimentary assumptions, and the projects, apart from a few major ones, are mere concepts not yet supported by feasibility studies. The economic growth targets, therefore, will probably be difficult to achieve. The situation both in the presently exploited oil fields, and with regard to new exploration activites, suggests that oil production will decline at a somewhat faster rate than envisaged in the Plan. Similarly, slower growth is expected in agriculture and manufacturing. Targets in manufacturing also seem high and are unlikely to be achieved, due to delays in major public and private projects and perhaps over-optimistic targets for private investment. 18. With this background, GDP is at best likely to stagnate over the Plan period, 1976-80. "Omanization" of the existing labor force will probably not progress as fast as the Plan forecasts, due to limited training and other educational shortcomings. The Plan also envisages a sharp decline in loans and grants from OR 155 million in 1976 to OR 19 million in 1980 (in constant prices), based mainly on the assumption that military expenditures will fall. If they do not decline as fast as expected in the Plan, or if recurrent ex- penditures grow faster than projected because of the operating and maintenance costs associated with the large investment program in recent years, external assistance requiremments are likely to be substantially higher than projected; part of these requirements may continue to come as grants from neighboring Arab countries. However, given its present low debt service ratio of 3.5 percent, Oman has the capacity to service conventional debt at much higher levels of borrowing than projected in the Plan, and remains creditworthy for Bank financing. PART II - BANK GROUP OPERATIONS IN OMAN 19. The Bank has made only two loans totalling $8.4 million to Oman, both in FY74. The details are provided in Annex II. The education project, for which a loan of $5.7 million was made in April 1974, was part of an integrated program of assistance by the Bank, UNDP and the United Kingdom.  - 6 - Bank funds are financing two basic education and skill training centers, a primary teacher training institute and an agricultural secondary school; the United Kingdom and UNDP/UNESCO are financing technical assistance and overseas fellowships. 20. The second Bank loan, made in May 1974, provided $2.7 million for a Technical Assistance Project to help finance three specialist teams for (i) economic planning and management, (ii) agriculture and fisheries, and (iii) transport. The work of these teams has been of considerable value to the Government. The leader of the economic team and his colleagues were largely responsible for the content of the country's first Five-Year Development Plan, published in mid-1976. The team continues to play a central role in the economic management of the country. It not only introduced an awareness of the financial constraints likely to be faced, but shaped most of the budgetary and fiscal procedures being followed by the Government. The transport team has provided valuable advice to the Ministry of Communications in all areas of road transport and development, and did feasibility studies which formed the basis of the proposed highway maintenance project. The agriculture team, after a slow start, is now helping the Government to identify and prepare a .future project in rural development for Bank financing, and has provided agricultural research data to the Government. 21. These two projects, as well as likely future projects in fields such as education, non-oil industrial development (cement), fisheries, telecommuni- cations, rural development, and development finance companies, are designed to help Oman to develop despite the following serious constraints it faces: the acute shortage of trained manpower; the absence of a non-oil productive re- source base; and the lack of an institutional framework within which economic development benefitting all Omanis can be approached on the basis of economic priorities, technical feasibility and least-cost solutions. The Government is becoming increasingly aware of the need for selective development, made all the more imperative by the prospect of declining oil revenues in the early 1980s; an example of this was its recent request to the Bank to organize and monitor studies to determine short and long-term priority power and urban water needs in the country, and how these can be met on a least cost basis. A Bank loan of $1.5 million to finance these studies is being proposed. 22. IFC has made no investments in Oman, but has expressed an interest in helping to finance industrial development in the private sector. Oman has purchased almost $40 million of Bank bonds, of which $30 million consisted of 15-year bonds purchased in 1974. PART III - THE TRANSPORT SECTOR 23. Until 1970 there was no transport system as such in Oman. The road network consisted of only 10 km of paved roadway and an unknown length of earthen tracks; there was no railway, no internal water-borne and little sea-borne domestic traffic and very limited air communication. Now, the country's basic transport system includes an extensive and rapidly growing road network of about 1,000 km of asphalted roads and perhaps six times that  - 7 - length in graded but unpaved roads, one modern deep-water port and another one under construction, an oil port, an international airport and several civilian and military airstrips. Highways 24. The national road network is under the jurisdiction of the Roads Department (RD) within the Ministry of Communications. It includes 1,287 km of paved roads, completed or under construction; 2,564 km of maintained earth roads; and 714 km of tracks which only 4-wheel drive vehicles can negotiate. In addition, there are 952 km of well maintained gravel roads belonging to the Ministry of Defense, and 908 km of Ministry of Communica- tions tracks which will be handed over to the RD in January 1978. 25. The RD is a well conceived organization, but because it was only established in 1972, it is very short of trained staff at all levels. The transport team, provided under the Bank's Technical Assistance Project (para 20), provides much of the technical and administrative input for the RD, together with other consultants and expatriate staff hired directly by the Ministry of Communications. One of the objectives of the training component of the proposed loan is to help upgrade the technical and managerial skills of Omanis in the RD. 26. Highway planning, design, construction, and maintenance are largely carried out by expatriate staff, consultants, and foreign contractors. To the extent that they are available, Omani nationals are assigned as counterparts to the foreign experts, but there are not enough to fill all the counterpart positions. 27. Highway expenditures are financed from the general budget, and for- eign sources when available. Direct and indirect taxes on road users are in the form of taxation on vehicles, spare parts, tires and petroleum products. However, these taxes consist of only a 2 percent tax on the c.i.f. value of imports, a circulation tax based on the weight of the vehicle, and a modest fuel tax. These taxes are not earmarked for highway expenditure but go into the general fund. Investment in highway infrastructure was the equivalent of about US$95 million in 1975, and recurrent expenditures in 1976 were almost the equivalent of US$4.3 million. 28. Traffic data in Oman is sketchy, but over the past two years there has clearly been a very high rate of growth. Increases of well over 100 per- cent have been recorded on some main roads. The vehicle fleet has grown from 1,000 in 1970 to over 31,000 at the end of 1975. There is virtually no Government regulation of transportation (although police enforcement of traffic rules in the major towns is very strict), and there is considerable competition between small operators. There are no axle load limits, but a study will be initiated shortly under the existing Technical Assistance Project (para 37). Ports, Civil Aviation, and Railways 29. Oman has a number of natural harbors, including the historically important small port at Muscat. The completion of Port Qaboos in 1975, very close to the capital city of Muscat, provided the country with a modern  - 8 - deep-water port with a capacity of 1.5 million tons of cargo per year. The port has eleven berths, ten transit sheds, a cement silo, fish canning and general deep-freezing facilities, and will soon have a grain silo. A nearby oil port serves as the export terminus for Oman's oil. In the southern town of Salalah, the present port is being expanded to handle one million tons a year, which will entail substantial excess capacity for some time to come. There are also several natural coastal harbors for dhow traffic. 30. Civil air transport is still in an early stage of development. The mostly hot, dry climate and subsoils with good bearing capacities allow for numerous natural landing places for light aircraft, and rudimentary airstrips exist in many parts of the country. Regular domestic service is limited to flights between Muscat, the capital, and Salalah in the south. Seeb International Airport, 32 km west of Muscat, opened in late 1972 and can handle the largest commercial airplanes, although some expansion of the repair and hangar facilities will be needed soon. 31. There are no railways in Oman, and none are planned or necessary. PART IV - THE PROJECT Project History 32. Because of the very recent expansion of Oman's paved and gravel highway network to connect all the major areas of the country, additional highway construction ic not of high priority in the next few years. The preservation of these recent heavy investments in road construction through adequate maintenance, however, has high economic priority. The proposed project was prepared by consultants provided under the Bank's Technical Assis- tance Project (Loan No. 985-OM), in close collaboration with the Roads Depart- ment. It was appraised in January 1977. Negotiations were held in Washington in April 1977. The Omani delegation was headed by Mr. Abdullah Bakatheer, Director General, Ministry of Communications. Description of the Project 33. The proposed project covers the first three years (1978-80) of a five-year routine highway maintenance program, together with related training, and technical assistance. The project includes: (i) the purchase of highway maintenance equipment and spares; (ii) the construction of six highway work- shops and one training center; (iii) equipment and spares for these workshops and one existing one; (iv) fuel, oil and lubricants for the highway maintenance program; (v) soils laboratory, survey and communications equipment and highway supplies; (vi) technical assistance to the RD to establish and manage the routine highway maintenance program over the three-year period 1978-80; (vii) a three-year, all-level staff training program for Omani highway maintenance personnel; and (viii) general technical assistance to the RD following the completion of the present program under Loan 985-OM. The project's details are provided in the report entitled "Appraisal of a Highway Maintenance Proj- ect, Oman" No. 1508-OM dated May 1977, which is being distributed separately to the Executive Directors, and in a Loan and Project Summary.  - 9 - 34. The Highway Maintenance Program. Under the current Technical Assis- tance Loan, transport consultants to the RD prepared a five-year routine and periodic maintenance program for the highway network. The Government has approved this overall program in principle, and the detailed scope of the program has been discussed with the Bank. The project to be financed by the proposed loan relates specifically to the first three year time slice of the routine (excluding the periodic) maintenance program. Because the paved road network is new and of high design standard, periodic maintenance requirements (rehabilitation, resealing, pavement reinforcement) are not likely to occur frequently within the next five years; if and when necessary, this work will be done by contractors. 35. For highway maintenance purposes, the country has been divided into seven regions. In each region, a maintenance workshop would be operated to service and repair equipment (Loan Agreement, Section 3.05). Major repairs, such as engine overhauls, would be carried out at two major workshops near the capital, Muscat, and in the south at Salalah. 36. Under the routine maintenance program, specialized force account units in each of seven maintenance regions would regularly replenish gravel and reshape earth road surfaces, carry out minor patching of asphalt surfaces, and maintain shoulders, drainage, side slopes, signs and markings. A list of equipment and machinery to be procured under this program has been pro- visionally identified and discussed with the Bank; it is subject to a later review of requirements by maintenance consultants as organized highway maintenance gets under way. 37. To help preserve the existing pavement and not jeopardize the work to be performed under the maintenance program, an axle loading study will be carried out by consultants under the ongoing Technical Assistance Project. The Government has agreed that the legal limits with respect to the dimensions and axle loads of vehicles will be observed and enforced (Loan Agreement, Sec- tion 4.03). 38. Technical Assistance: Under the proposed project two forms of tech- nical assistance will be provided. Firstly, about 200 man-months of maintenance management consultants services will be provided to establish and manage the routine maintenance program according to agreed terms of reference. These consultants would also be responsible for the training program, and for the establishment and performance of cost accounting procedures to monitor and control the costs of different highway maintenance operations (Loan Agreement, Section 3.02). 39. Secondly, about 100 man-months of consultants' services have been included in the project for general administrative, planning and operational support to the RD, including the continuation of highway and traffic data collection. Terms of reference for these services have also been agreed (Loan Agreement, Section 3.02). As explained earlier, this kind of technical assistance is already being provided under the ongoing Bank Technical Assis- tance Project, and has been very valuable to the RD. The Government has therefore requested that similar services be included in this project.  - 10 - Man-month rates for consultants average $7,000 including all overheads, air transportation and escalation. 40. Training: The lack of trained manpower at all levels of economic activity is perhaps the single most pressing problem faced by the country. The RD is no exception, with many of its authorized positions vacant, and many others occupied by partly qualified personnel. 41. To strengthen the RD's capability to administer, control and undertake highway maintenance work, the proposed project includes a compre- hensive training program for all staff levels in a training center to be constructed as part of the project, and in field units for on-the-job training. This will supplement training in engineering trades provided at an existing vocational training center, where some courses relevant to highway maintenance are given. Initially, the program would concentrate on upgrading those semi-skilled nationals already working for the RD, and eventually it would enable unskilled Omanis to be trained for work in the maintenance program. 42. A training center would be constructed at the headquarters region in Azaiba, near Muscat, where existing RD staff and new recruits would receive six to eight weeks of training before being assigned to regional workshops or Training Production Units for further on-the-job training. Senior staff would receive overseas training in maintenance program management. Agreement has been reached that sufficient numbers of Omanis would be made available for training and that details of the senior staff training program would be sub- mitted to the Bank for prior approval (Loan Agreement, Section 3.07). A comprehensive training policy would be promulgated by the Government and a training unit would be established in the RD to supervise the training program (Loan Agreement, Section 3.06). It is expected that each Training Production Unit will be able to train not less than 200 personnel per year, consisting of overseers, equipment operators, truck drivers and mechanics. Project Cost and Financing 43. A detailed breakdown of the cost of the proposed project is given in Annex III. The total cost of the three-year routine maintenance program, with related training and technical assistance, is estimated at the equiva- lent of $47.1 million (including contingencies). The foreign exchange cost is estimated at about $22.9 million. The proposed Bank loan of $15 million would therefore cover 66 percent of the foreign exchange cost and 32 percent of the total cost, with the balance to be provided either by the Government from its own resources, or to be arranged from other foreign sources. The Government would provide the local cost equivalent of $24.2 million from the general budget. The Government will also finance the total costs of the last two years of the five-year routine maintenance program (Loan Agreement, Section 4.04). Project Implementation 44. The RD will have overall responsibility for the execution and implementation of the maintenance and training programs, with the assistance of consultants.  Procurement and Disbursement 45. The highway maintenance equipment and spares would be procured after international competitive bidding in accordance with the Bank's guide- lines. Contracts for the construction of maintenance workshop buildings and classrooms would be procured after local competitive bidding. The presence of a large number of foreign and local contractors in Oman would assure adequate competition. The purchase of small items of training equipment would follow the normal procedures of the Government, which are satisfactory. 46. The proposed loan would be disbursed against the foreign exchange costs of imported equipment and spares; 80 percent of the total costs of workshop construction and training equipment; the foreign exchange costs of consultants; and the foreign exchange costs of overseas fellowships. Economic Justification 47. The standard of maintenance on unpaved roads now under the jurisdic- tion of the RD is poor, and no efficient organization exists to adequately maintain the paved network. The proposed project would protect the sub- stantial investment in highways and would improve Omani highway maintenance capabilities to match the increasing demands of growing traffic on an expand- ing highway network. 48. The economic benefits of the project would accrue directly to (i) the country, which would preserve its investment and ultimately lower its maintenance costs as Omani nationals are trained to take the place of expa- triates; (ii) the trucking industry through reduced vehicle operating costs which would be passed down to consumers because the trucking industry is currently freely competitive; and (iii) the wide range of income groups who use highway passenger transport. 49. The only quantifiable element in the project is the routine main- tenance program, which represents 90 percent of the project costs. The economic rate of return for the program was obtained by comparing the economic costs with the economic benefits resulting from savings in operating costs, using six surface and Average Daily Traffic categories and calculating a single, composite vehicle operating cost from the weighted average of the traffic composition observed in traffic surveys. These calculations showed Benefit/Cost ratios of 6.2 and 5.8 when allowing both 15 percent and 20 per- cent, respectively, as the opportunity cost of capital in Oman. On the basis of savings in highway user costs the maintenance component of the project shows an overall economic rate of return of over 100 percent. 50. Project risks are associated mainly with whether a sufficient number of Omanis would be made available for training under the proposed project to take over, in due course, the highway maintenance functions currently being carried out by expatriates.  - 12 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 51. The draft Loan Agreement between the Sultanate of Oman and the Bank, the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement and the text of the Resolution approving the pro- posed loan are being distributed to the Executive Directors separately. Special conditions of the project are listed in Section III of Annex III. 52. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 53. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Attachments May 18, 1977  4> S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 0 00 0 CC Z- 4 0 Cal - N ~~~~~~~~~~~~~~~~l-- I, -1 ~ ~ -. Z*S-.W 0 04I I'l 0W0 .O . . . .. ONI -. Z. 0 0 0 I ZN7O W#4 5 N 05404 I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1: 0- 5 5~~~~ws2!f - 5 41,01 el3a ~~~0 OS -h--I Ii S~~~~~~~~~~~~~~~~~~~~~~~~I  Page 2 Of 4 pagem NOTES unless otherwise noted, date for 1960 refer to any year between 1959 end 1961, for 1970 betwee 1968 and 1970, and for Host Recen.t Retimate betowe 1975 end 1975. * In the absence of population cenoue, population estimates for 1973 range fron 0.77 million (based o )N sR timate for 1974) to 1.5 million, (g-ovrnment ostimate for pleoning purpoece). nO Although Iraq is to the per capita GNP group halm, Onwn, it hoe been selected since it is am Arab ae el aae il-producing country, which akee rho comporson, more m.eonigfu1 than with other higher income countries. ... Trinidad and Tobago s.a been selected as oo objective country sinte the diversifioction of Ite economic atrcture wkche it en appropriate target for futoro development of Ownc. neaW MOST RLECENT ESTIMATE: /- Ratio Of population under 15 end 65 end over to total labor force: /b Encluding police end armd forces parseonnel; / Including midwivee and assistant nursee; /d 1971. SAUDE ARABIA 1970 /0 Ratio Of popuiction under 15 and 65 and over to tota1 labor force; lb Gooerxsont only; jc 1964466. IPAl 1970 fl Rotio of population, under 15 and 65 and over to total lobor force; lb 1964-66. TRDdIDAD A TOBAGO 1970 /a Due to meigretico popoletion growth rate is lower than the rote of netural increase; /b 15-64 year.; Ic Including nidwiv-; / 1964-66; /e Government maintained end aided schools only~; /f Total, urban and rural; La Inside on ly: /h 1966. R4, March 23, 1977 DEFINITIONIS Op NOCIAIL INDBICArGOS Lend urea ;thu kn,7; Population Par Pacrin oron - Pop.latim, divded by number of practicing Totl Tonal curfere erna comprising lend cr00004 inland natero. male and fowole graduate usa, trained or 'certified' naro, co. .d or ic- Mo.t r....n.t ant Icto ofogciu ralre used toopororily or pera- anm-iliary paro-ne w ith training or enpertnn nontly for -ropa, pactoree, cachet A bitchen gardens or to Ho faille. poPulation eec h-PnitaB bed - population dtvdnd by eunbor of hospital beds avilabla in publit and pri-tco generl1 and opacialised hospital aed GNP coc c-polt (Us0) - GNc par capita eat-etn -toorroct cacht prio- rehabilitation centere ; occludes nuccig bone cod ..cb.. l,ntefor calclatd by aa- -oesc nthod as Wcrid Benk Atla.. (1973-75 bacon;; -otodia1 and pr-evotiv care. 1960; 1970 Iaod 1975 data. for ceeitta aunPY of ceoce fTOf ceuCnt) -Coputed from energy P.p.I.tioa ..d ~~~~~~~~~~~~~~ -~quivalent of mast food eapplias avilablo in coontry par capita Par day; Pplto anvital otatieic: available supplie- comprion domnotic prnd-ctin,n, imports lees enporto, end Popu1ation (aid-yea.r million; do- of July fircr: if not -vilable, a-cga changea in atnob; net suPPline -ocldn aocal fond, seds, q-atitBen ucad of tw ond-yaor r bre;1:60, 1970 and 1971 data. in fond proca-ing and o-nas in diatribation; requicnte onra n.acited by FAS baeed on phyein1ngical neada for norma activiy end health nonaid- Pooc1atbon dencle - ear goo- kce - Mid-yea populoci on Per oquare kilometeorLacig eairooenal teopecrues., body neighta, age and oem distributions of (lOB hnctarac) of tornl r.a. pepulattion , and allowing 10% for weate at houoehold level. Populotbom d...eity -poreq ocre Ik of acric. i.ed - Conputnd an above for Per capita eanple of protein foam ner day) - Protoim content of Par capita ogricoltural lend only. net eupply Of food par day; mar aupply of food is defined as bovo; roqoire- mecca for all ooutrine oatabliahed by USDA toonomic R...aroh Sorvi.en virat aarecr provide for a inim allowance of 60 grna of total Protein per day, and Crude birth crnr pr th-nond,.,aorago - Annal lion biciho par rhoceand of 20 grow of an1Ima end pulese Protein, Of which 10 grn should ha animal old-year pupolotion; ton-yealriat i tneic --ergon ending in 1960 end 1970, proteie; these stondarda ace lower then tboan of 75 Sran of total protein end fio-y-a aIorai ending ie 1975 for neat recen.t not- tm.i. and 23 gr-n of animal protein on navrano for the verld, prop-ed by FAO Crudedeor ratenor hocead. uoroo- AnnualI deotha pep thoucand of mid-year in the Third World Food Survy. poPulation; te-year arirheetic a--rgf nding in 1960 and 1970 and five- Per cait roen oply fromaomI-al and puiao - Protein eupply of food year a.rag eingte in 1975 for cost cocoon -tonriat. derive from Ini-ae and plisea in grmn per day. Infav or tarl7ly",t con /th.o) A-IAna dnothn of tofonte ncder one year of ag labrt /thou) aces 1-4 - Annal doatho Per thousnd in age group 1-4 pc hounund lion bicrhe. years, to children is this ego group; nnggectndaaa indicator of Lieaor ooat birrb (yin) A-Avrage etobor of yoaro of lifo rnaming at malnutrition. btcth; unua11Y fiv-yeo eerfn ending in 1960. 1970 cod 1971 for deenlnP- inf coutrion. Education, ir...ernnr-d-otiooralte--Avregn ob-r of live d-oghtnroanIomn will bear Adloated.enrollment ratio-nim.sh - - ErolmntOf all "P. as par- in her cocoa; roproduotive poriod if abe -oprinnoen pr ...nt ge-ep-cific _otag f pemryohro-ago9 pop lato;p nlu c,I.hildm agd 6-11 ynere fotuitycco usalyfv-Year a--rgne endinf in 1960, 1970 end 1975 bat adjuatad far diffrIt lngtho of primar edoct io; for countries ith for dovolping -ontri-os- u Ivra education, enrllment may nnoned 1007. nioc .- Pu$ls are bel1n ,Populaion or-th rate (7. - toto1 - Compumd a.-o.l growth cacao of mid-ymar or above the official sohool age. populettno for 1950-An. 1960-70 end 1970-75. Adjusted snnlet rati ..-onodarc aobol - Computed as bhv;anodr PoPulation oroih rain ()-orbac - Computed lihe grouch rato Of total edcto eurea ea ou ar fapoe rmr imtrttOn;. popoletion; diffnren dofinilton of orban amen ma yffnot comaparbility uf providte general, -ontiona1 Or teacher traiing inat-utioma for pupils dataanog countIo. of 12 to 17 years of age; -occ-pondaos cor g a .. gnrally -oluded. Urben po Moto 1%f total - Ratio of orban to totl1 population; difforont Yeare of a-hoolina nrovided (fOnt and seond 1avel) - Total yearn Of defieitiono of urban areas may offort cup-cbility of data .omg -outriae. schoolieg; at aecocdary leve, voctional iarrution may ho partially or 00 crctuo Percet) - Child-o (0-IA yac-) , -rkini-ote (15-64 yearn), Moaio ncolmon CT of necondary) - Vonati-na 11tica.ciona include an e cd(5yrac ad over a dpcenor of d-yrar popolaion technical, indutria1 or other Progr-u ohich op-rte lcape.dndtlp ccra hot dreid ..oy cctc-croof pOPulatIon onder 1 end 65 ed overto those deper alnte of necondaryiniuio. ofogc I th-ogh 64. Adul, i rv rat CT()t- Lil rtectedo1te (ebl cc read cod write) anper- fc'nlc deocod-o-rai -i RatIo of popula-lon undor 15 cod AS and over to Ietg f oa doi Popalaion gnod ) y..art and over. rola'1bor foruc ocoguP of 15-64 Tce Fanil, p Ian .. -ur ou(utoal thou o-Colatic- number of a-Ptcre go-eina of blith-coo:ro1 dvlui un...der aunpioc of cationa1 fooily pl-annig progoom Pea.-o mr room (orbap) - Av-rago v,abhr of p-roun Per roo in -oopind Plr n oftn.cnerna ivlig turbacrnn;de-11inic noclode o-ecnn Fooill plann.in-u oeC.of uartied 0me - ocoae fmrritd c-mn ofV- cutura ad..n...uplod partn. child-bearng ag (1)-At. y-ar) abc1 cue birhth-conrol1dIv... to all carried Oropied- dwlIIno aitbout piod cater T) - Ocpied --cotion..l d-ellimge o,cccolcvooo age group. in~~~~~~~~~~~~~~~ uran andruaaenctht incide or-utide Piped cao fcltin aspercentage of al oopied doolige. fool c_nro Ac.o.. to electricit M of alld-ellimon -Conv-ticne1 dvnl1ingn It cola; labor foro (ihlcu..nd) -uomiayacion ,1peraon, including armed eletri.ciy in 1.iong quater npreto oa dnl ni ra n foo -cd uncplovd bu .....lcdilo in boasiv_,ounnn t. deinition r,.ratornee vuclu contrio ar notopr abl eti. cRal jdeo1Iinca cononoid to elecrktricty ( C)-Coputed a about for rura LaborOctonIv aclcaltrn CT -A8ritultcral laborfr- t faruIcc, foretry, delings only. hbuvito and fiobiog) anp-coarrge of total lbor fot., Unn .oe (2 f labor force)I - neployd ar uc ally defined on promona abe Conomption are able and "ello to tamajb otn j obc gIeda.cnaodcu ai reo snc (per thou eOn) - All typon of rne-o-re for radio brcad-aut of a job, aod aneln I cochr for a -eifind minimum period no -o ding one to general public Per ib...and ofpopultion; -1cldencoienn r-ce-er we;ma nor ho "op-rblo betZ.nnoc0untrina doe it different definitioe in coutries and to year when rngpiotrarbon Of radio. sect can to effect; of --ooPlndad e-reo ac .. el etofc tariatice, eamfis data for recet yearn may no ha g-parble ainon coot roctri-o obolnhed .cr_.Y., compuloory c_ploy-ant Ine.re. a - icening. loc ditribuice-pecentae of ptoatninotm (both ic cash and kind) leonR teniht pn, eons; e-oldoc ombule-o, hbe....e and military sca"Iled by ritheot 5%, ricbhc 2%, Pocreot 207., and poorcot 407% of bhone- -ohicle.. boldo. tlnt~~~~~~~~~~~~~~~.Ifrioitry Ikeb/yr Pc capS - Anul..I coneumPtion of toduatria.1 -onrrial Di.tri.ti..of 1.d -rsip - .-nt.g of 1nd -. by -1thi- 107,public end private electrinity in Ail-eit hours Per topita. gssal Ilairbutin oflandcsaerehl-fscentagc oflaodowno by ealttent10,ba...d on production date, nith-ut alanefor Icnein gridc hut allow- and Poorest 10%. Of land -.era. iag for imp nrneand smporta of n1-tcritp,. NewsPrin.tt(ho/or er can) - Per capita a.nnul cnup Ionn kAllogra Health and guccritieninin from dometic Production pIca net importa of n-wprint. P"nultin Ec hytan - Population divided by ntaber of practicing phyalin lqclffed from a eadiral echoul at uninerefty meal.  ANNEX I ECONOMIC DEVELOPMENT DATA Page 3 of 4 Actual Projection Annual Percentage Changes 1975 19761/ 1977 1978 1979 1980 1975-76 1976-80 A. NATIONAL ACCOUNTS (1976 OR Million) GDP (m.p.) 812.7 846.3 791.4 755.8 727.0 701.3 -4.6 Gains from Terms of Trade -10.0 - 5.1 4.3 3.5 1.9 - - Gross Domestic Income 802.7 846.3 796.5 760.1 730.5 703.2 5.4 -4.5 Exports (g + *;fs)_./ 527.8 556.0 513.7 482.4 453.0 427.3 5.3 -6.4 Imports (g + nfs)!/ -398.6 -400.1 -383.1 -362.1 -356.7 -346.9 0.4 -3.5 Resource Balance 129.2 156.0 130.6 120.3 96.3 80.4 - - Investment 245.4 247.0 239.0 232.0 215.0 193.0 0.7 -5.9 Consumption 428.1 443.6 426.9 407.8 419.2 429.8 3.6 -0.7 Gross National Income 662.1 674.1 628.3 601.3 591.8 576.9 1.8 -3.8 National Savings 234.0 230.6 201.3 193.5 172.7 147.1 -1.5 -10.6 B. SECTORAL VALUE ADDED Percent of GDP (m.p.) at 1976 Prices Agriculture 2 2 3 3 3 3 Oil (mining) 65 67 67 66 65 63 Construction 12 12 12 12 12 11 Others 21 19 18 19 20 23 C. PUBLIC FINANCE Percent of GDP (m.p.) at Current Prices Revenue from Oil 51 56 56 55 54 52 Other Revenues (incl. grants) 12 5 8 9 10 11 Current Expenditure 44 44 46 46 51 56 Defense Expenditure 33 31 29 27 28 29 Government Savings 19 17 18 18 13 7 Capital Expenditures 24 22 23 24 23 21 1/ Estimates based on January-September actual outturn. 2! Oil sector is treated as resident.  ANNEX I Page 4 of 4 BALANCE OF PAYMENTS AND EXTEBNAL ASSISTANCE (In Current USS Millions) Actual Projection 1973 1974 1975 19761. 1977 1978 1980 I. BALANCE OF PAYMENTS SUMKARY A. Oil Sector 177.7 681.1 1004,6 1281.1 1275.4 1292.2 1317.4 Government revenue 177.7 844.9 1081.4 1362.3 1369.6 1389.0 1415.1 Government share of oil Company expenses - -59.7 - 76,8 -81.2 -94.2 -96.8 -97.7 Other - -104.1 - - - - - B. Non-Oil Current Accounts -289.0 -799,9 -1339.6 -1441.3 -1491.0 -1484.9 -1470.0 Non-oil exports 1.7 1.2 3.2 2.9 2.9 2.9 11.6 Imports -222,6 -588.4 -1044.6 -1072.7 -1123.2 -1099.1 -1139.1 Private sector (-129.6) (-360.9) (-696.8) (-618.0) (-749,9) (-746.1) (-787.8) Public sector ( -93.0) (-227.5) (-347.8) (-454.7) (-373.3) (-353.0) (-351.3) Workers remittances -51.3 -108.1 -156.8 -190.4 -196.5 -193.6 -153.9 Profit remittances -25.8 -111.3 -136.2 -165.2 -145.2 -152.8 -141.4 Interest earnings (net) 9.0 6.7 -5.2 -15.9 -29.0 -42.3 -47.2 C. Current Account Balance (A+B)-111.3 -118.8 -335.0 -160.2 -215.6 -192.7 -152.6 Official grants 10.1 24.1 207.5 58.0 110.0 135.7 156.1 M + LT loans 30.7 139.1 195.4 88.1 190.2 153.9 142.3 Short-term loans_/ - 29,0 - 27.5 117.6 40,4 66.7 Amortizations - -36.2 -33.6 -33.0 -93.5 -141,4 -209.9 Others -14.1 -48.5 -71.6 -1.0 - - - D. Changes-in-Reserves (-- increase) 84.6 11.3 37.3 20.6 II. LOAN COMMIThENTS A. M + LT loans 60.0 243.1 92.9 192.2 IBRD - 8.5 - - Governments - 78.7 _ 17.4 Other 60.0 155.9 92.9 174.8 B. Short-term loans - 29.0 - 27.5 III. PUBLIC EXTERNAL DEBT-/ A. Public DO&D 10,0 138,3 225.9 308.5 B. Total Debt-Service - 29.6 38.8 48.9 Amortization - 36.3 33.6 33.0 Interest (Net) - -6.7 5.2 15.9 C. Debt Service Ratio - 3.5 3.5 3.7 D. Terms Interest on Total DO&D/ Total DO&D - -4.8 2.3 5.2 Total Debt Service/ Total DO&D - 21.4 17.2 15.9 E. IBRD Loans DOBD - - - 1.1 Percentage of Total DO&D - - - 0.4 Debt Service as Y of Total Debt Service - - F. PUBLIC EXTERNAL DEBT (Disbursed only) Outstanding Dec. 1976 Amount Percent 1. IBRD 1.1 0.4 2. Other Multilateral - - 3. Governments 42.7 13.8 4. Financial Institutions 219.7 71.2 5. Suppliers Credits 45.0 14.6 6. Others Total 308.5 100.0 1/ Estimates based on Jan.-Sept. actual . rturn. 2/ Loans with less than 3 years of maturit es for historical data and gapfill financing for projected years. 3/ Including short-term borrowing for gap-f' ancing. EMENA Region CPD IJ-A  ANNEX II STATUS OF BANK GROUP OPERATIONS IN OMAN A. STATEMENT OF BANK LOANS (As of March 31, 1977) US$ Millions Amounts Loan Net of Number Year Borrower Purpose Cancellations Undisbursed 980-OM 1974 Sultanate of Oman Education 5.70 5.5 985-OM 1974 Sultanate of Oman Technical 2.75 1.8 Assistance Total 8.45 of which has been repaid - Total now outstanding 8.45 Amount sold .3 of which has been repaid - (.30) Total now held by Bank 8.15 Total undisbursed 7.3 STATUS OF IFC INVESTMENTS IN OMAN B. STATEMENT OF IFC INVESTMENTS There are no IFC Investments in Oman. C. PROJECTS IN EXECUTION Ln. No. 980 Education Proiect: US$5.7 million Loan of April 25, 1974. Effective Date: March 31, 1975; Closing Date: June 30, 1980. Progress in the implementation of this project is satisfactory. Disbursements are behind schedule but with the start of construction in the summer of 1977 disbursements are expected to show significant improvement. Ln. No. 985 Technical Assistance Project: US$2.75 million Loan of May 15, 1974. Effective Date: December 11, 1974; Closing Date: June 30, 1980. This project has three components: agriculture, transport and economic planning. The agricultural technical assistance team is now performing useful services for the Government after a period of being underutilized, and the transport and economic planning teams are continuing to perform well.  ANNEX III OMAN HIGHWAY PROJECT SUPPLEMENTAL PROJECT DATA SHEET SECTION I Timetable of Key Events (a) Pre-appraisal November 5-20, 1976 (b) Appraisal January 14-27, 1977 (c) Negotiations Completed April 19, 1977 (d) Loan Effectiveness Planned September 30, 1977 SECTION II Special Bank Implementation Actions None. SECTION III Special Conditions (a) Observance of findings of axle loading study (para 37). (b) Government to make available a sufficient number of Omanis for training (para 42). (c) Support of the training program by a policy statement and estab- lishment of a Training Unit (para 42). (d) Government to provide sufficient funds to carry out the agreed overall 5-year maintenance program (para 43).  5? Set 515/e' c/Hccc \%l So r 4 r Pv << /7 e r;siao n GCve/ f 6 - - * ~ ( I R A N S &, 7~~~~~~~~~\ ~~~PAKISTAN O/ATARfDoh= Sse2rL2he / 1 Ihr,= r 27~~ \ r , (4 {<\hmos G / f o f CJ r~~~~~~~~~~~U/ I' (- 7 n \ L-n fi l , 244 N U N I T E D A R A B E M I R A T E S < fi '. ~~ _ |Lekhwar,. ; r 6_Xi1 W ~~~~~~~~~~~~~~A r a 6 0 n S A'0 U' DA IMAuR A B I A / ' ' r-- , 1 ,d 22t b / /) / / ~~~~~~~~~~~Approisal of a H'ighway Maintemance Prbject i /lHccc wc H ccTRANSPORTATION SYSTEM SA U DI A R A BIA -- Sands~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-----PEdas.d, ostt0 ~~ ~~ -/ / ~~~~~ t < \ h; / _Grav~~~~~~~~Gei, amamoed roods 2 - 'hoo 0 b .- , - - . ),2 @ Internoton.i oirport 5' / 'I *, r il - - . ' '~ Od helds ( : Fosod , XDowqq . J - v. ~~~~~~~~~~~~~~ X C7=jElevotLons fOOmelersondabOve ES,to- , 01cle Fle \\ , / <, D' t - l O , M < - gjJ _ _- ~~~~~~~~~~~~~~~~~~~~~~~hternolionol b-ud-res cc 5 SULTANAT~~~~~~~~~~~~~~~~~~~~~~~~~~~~IRKE OIOA X~~~~~~~~~ 4- Arpaia df a Hiha MdihtendnX 4 ke -Prbject C E M EN 0 r -R I R A IRAO I R A OF YEMEN~ ~ ~ ~ ~~~~~~~~~~~0SI~ RNSOTTONSSE ~Dso Heim Pace.D rLoereds ede; IAr Aceecte_u.tice a , orced, maintained r n A Xgecds ', 'a, ?S -2 D SA eh W Add5c+ 22dP5f{K M E R D~~~~~~~- / - ~ ( ____ at,cmirie ed LES~ ~ ~ ~~~4 at M'~~~~ C-< ~ ~ ~ ~ ~ ~ trrernerieeal airpent~~~~~~~~~~~~~SLT-T