Guinea - Second Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE CUPY Report No. 2363-GUI REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA PROPOSED SECOND HIGHWAY PROJECT STAFF APPRAISAL REPORT August 20, 1979 Western Africa Projects Department Highways Division 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.  CURRENCY EQUIVALENTS Currency Unit = Guinean Syli (GSy) US$1.00 = GSy 20 GSy 1 = US$0.05 GSy 1,000,000 = US$50,000 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES Metric US Equivalents 1 kilometer (km) = 0.62 miles (mi) 1 meter (m) 2 = 3.28 feet (ft) 1 square kilometer (km ) = 0.386 square miles (sq mi) 1 hectare (ha) = 2.47 acres 1 liter (1) = 0.22 Imp. gallons = 0.26 US gallons 1 kilogram (kg) = 2.205 pounds I ton = 2,205 pounds ABBREVIATIONS AND ACRONYMS adt average daily traffic BADEA Arab Bank for Economic Development in Africa BGCE Guinean Bank for External Trade CEBTP Centre Experimental de Recherches et d'Etudes du Batiment et des Travaux Publics COTRA Road Transport Company DGRB Directorate General of Roads and Bridges EDF European Development Fund MEF Ministry of Economy and Finance MOT Ministry of Transport MPW Ministry of Public Works ONAH National Fuels Office ONCGF Office of Guinean National Railways ONRR Road-Rail Office PRL Pouvoirs Revolutionnaires Locaux RCG Revolutionary Commissariat-General (Province) TUC Conakry Urban Transport  FOR OFFIC [AL USE ONLY REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA PROPOSED SECOND HIGHWAY PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. I. THE TRANSPORT SECTOR . ......................................... 1 A. The Land and the Economy ................................ 1 B. The Transport Network ................................... 2 C. Transport Policy ...... ...................... . 3 D. Sector Management and Planning Issues ................... 4 E. Role of the World Bank .................................. 7 II. THE HIGHWAY SUB-SECTOR ...................................... 9 A. Road Infrastructure .............................................. 9 B. Characteristics and Growth of Road Traffic ........... ... 9 C. Road Transport . .................................. 10 D. Administration .................................... .............. . il E Staffing and Training . ............ . ...................... . 12 F. Engineering and Construction ............................ 12 G. Road Rehabilitation and Maintenance ..................... 13 H. Highway Investment Program .............................. 13 t. Financing and Revenues from Road Users .................. 15 IIl. THE PROJECT .................................................. 18 A. Project Objectives and Description ...................... 18 B. Project Cost and Financing ................. .. ....... 22 C. Implementation ................................... ............. 25 D. Procurement .............................................. 27 E. Disbursements ... . . . . .. . . .. . . . ......................................... . 27 F. Project Monitoring ....... ........................ ... ............. 29 IV. ECONOMIC APPRAISAL . ............ ...... ........ ............... 30 A. General . .................................... 30 B. Economic Rate of Return and its Sensitivity ............. 31 C. Road Rehabilitation . ........... .. .............. ... ...... 31 D. Maintenance . ....... ... ....... ............ ............. . 33 E. Project Beneficiaries ................................... 33 F. Project Risks ......... .. ...... . ... .. . .... ... ... . 34 V. RECOMMENDATIONS ............................................................ 34 This report was prepared by Messrs. P. M. Cadario (Economist) and P. Sooh (Highway Engineer) on the basis of an appraisal mission in October 1978. I This document has a restricted distribution and may be used by recipients only in the performance j of their officiai duties. Its contents may not otherwise be disclosed without Worid Bank authorization.  ANNEXES 1. Cost Estimate 2. Highway Rehabilitation and Maintenance Program - Outline Terms of Reference for Consulting Services 3. Equipment 4. Road Rehabilitation and Maintenance: Teams, `Equipment and Costs 5. Outline Terms of Reference: Conakry-Mamou Road Pre-investment Study 6. Design Standards for Classified Roads 7. National Public Works Laboratory - Outline Terms of Reference for Consultants' Services 8. Training 9. Economic Appraisal RELATED DOCUMENTS AND DATA AVAILABLE IN THE PROJECT FILE MAP: IBRD 14070  REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA PROPOSED SECOND HIGHWAY PROJECT STAFF APPRAISAL REPORT I. THE TRANSPORT SECTOR A. The Land and the Economy 1.01 Guinea has an area of about 246,000 km2 and a population of about 5.0 million growing at 2.9% p.a.. Its excellent natural resources in mining, for agriculture and for hydro-electric power make it potentially one of the richest countries in West Africa. The broad range of eco-climatic zones enables production of a variety of agricultural commodities. Mineral deposits include bauxite, of which the country is estimated to possess the world's largest known reserves (about 8 billion tons), and high grade iron ore, estimated to be over 2 billion tons. Prospects for diamond and uranium mining and offshore oil exploration are being actively investigated. 1.02 Despite this potential, economic growth has been slow. After independence (1958) the Government placed emphasis on developing infrastruc- ture and mining at the expense of agriculture. Except mining, in which foreign companies own shares, the Government has nationalized all activities including commerce, trade and transport. During the period 1967-72, GNP increased by less than 2.5% p.a. and, because population increased at a faster rate, per capita GNP decreased slightly. After the start of operations of two large bauxite mines in 1974, the long period of economic stagnation ended. Since then, real per capita incomes have increased at an average annual rate of nearly 7.5%, although they have still not yet reached pre- independence levels in real terms. By 1977 annual per capita GNP is estimated to have reached about US$230 but during 1978, growth stagnated because of the severe drought in 1977-78 and the levelling off of mining output as production reached full capacity. 1.03 Since independence, the development and the role of the transport sector in Guinea have been affected by the overall economic stagnation. The problems and development of the transport system in Guinea must also be viewed in the socio-political framework where the only political party (Parti Democratique de Guinee) plays a decisive role, and decisions are often made on political grounds, irrespective of economic considerations. Reliable informa- tion on the transport system and commodity flows in Guinea is very limited and it is therefore difficult to make a comprehensive assessment of the sector. 1.04 Past investments in the transport sector have accounted for about 30% of total public and semi-public expenditure, with efforts concentrated mainly on developing rail infrastructure to serve mining activities and the paving of primary roads leading to Conakry, the capital and principal port. Developing and maintaining the road network to support agricultural and rural development have suffered. This pattern of development, coupled with an absence of maintenance of existing infrastructure, left isolated the peri- pheral areas and the interior from the more devel