Cameroon - Fourth Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY F!tF CQ Report No. 2225-CM UNITED REPUBLIC OF CAMEROON FOURTH HIGHWAY PROJECT STAFF APPRAISAL REPORT May 18, 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 = CFA franc (CFAF) US$1 = CFAF 220 CFAF 1 million = US$4,545 Fiscal Year July 1 - June 30 SYSTEM OF WEIGHTS AND MEASURES Metric Metric British/US Equivalents 1 meter (m) 3 3.28 feet (ft) 1 cubic meter (m ) = 1.31 cubic yards (cu yd) 1 kilometer (km) 2 = 0.62 mile (mi) 1 square kilometer (km ) = 0.386 square mile (sq mi) 1 metric ton (ton) = 2,204 pounds (lb) ABBREVIATIONS AND ACRONYMS CAE - Central African Empire DH - Department of Highways DHM - Division of Highway Maintenance DOT - Department of Transport FAC - Fonds d'Aide et de Cooperation (France) MINEH - Ministry of Equipment and Housing MINEP - Ministry of Economic Affairs and Planning MOT - Ministry of Transport NCEEP - National Civil Engineering Equipment Pool RPU - Road Planning Unit TPB - Training Production Brigade TPCU - Transport Planning and Coordination Unit VOC - Vehicle Operating Costs VPD - Vehicles per Day  FOR OFFICIAL USE ONLY UNITED REPUBLIC OF CAMEROON FOURTH HICHWAY PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. 1. THE TRANSPORT SECTOR ...................................... 1 A. General .............................................. I B. The Transport System ................................. 2 C. Transport Policy, Planning and Coordination .... ..... 4 2. THE ROAD SUBSECTOR ....................... 5 A. The Network ......................................... 5 B. Road Transport Characteristics ...................... 7 C. Road Transport Industry ............................. 9 D. Administration ...................................... 10 E. Staffing and Training ............................... 12 F. Financing ........................................... 13 G. Planning ............................................ 14 H. Engineering ......................................... 15 I. Construction ........................................ 15 J. Maintenance ......................................... 16 K. Use of Appropriate Technology ....................... 18 L. Past Bank Group Assistance .......................... 18 3. THE PROJECT .............................................. 20 A. Project Description ................................. 21 B. Project Costs and Financing ......................... 28 C. Implementation ....................................... 32 D. Procurement ......................................... 34 E. Disbursements ........................................ 35 This report is based on the findings of an appraisal mission which visited Cameroon in April 1978. The members of the mission were Mr. P. Ostenc (Sr. Engineer) and Mrs. G. Finne (Economist). This document has a restricted distribution and may be used by recipients only in the performance of their omcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTENTS (Continued) Page No. 4. ECONOMIC EVALUATION ....................................... 37 A. Main Benefits and Beneficiaries ...... ............... 37 B. Economic Analysis ................................... 38 C. Project Risks ....................................... 41 5. AGREEMENTS REACHED AND RECOMMENDATION .................... 44 ANNEXES I. Plan of Action II. Capital Cost Breakdown III. Composition, Cost and Expected Output of Maintenance Units and Rehabilitation Brigades IV. Outline Terms of Reference for a Road Planning Unit V. Outline Terms of Reference for Technical Assistance for the Training Program of Road Maintenance Staff VI. Outline Terms of Reference for Technical Assistance for the Road Maintenance and Rehabilitation Program VII. Outline Terms of Reference for Technical Assistance for Promotion of Domestic Contracting Industry VIII. Procedure for Disbursements against Statements of Expenditures IX. Documents and Data Available in the Project File CHART Project Implementation Schedule MAP IBRD 13733  UNITED REPUIBLIC OF CAMEROON FOURTH HIGHWAY PROJECT STAFF APPRAISAL REPORT 1. THE TRANSPORT SECTOR A. General 1.01 Cameroon covers a roughly triangular area of 475,000 km with a coastline of about 280 km. It borders on six countries--Nigeria, Chad, Central African Empire (C.A.E.), Congo, Gabon and Equatorial Guinea--and occupies a strategic position for transit traffic of landlocked Chad and C.A.E. 1.02 Cameroon has mountains in the west and in the center, dry savannah plains in the north and extensive forest areas in the south and southeast. Along the coast, the rainy season latsts 220 days with an annual rainfall of 5,000-6,000 mm. In the central mountainous areas, the annual rainfall is about 1,500 mm during a rainy seasorL of about 135 days. By contrast, the rainy season in the north lasts 50-75 days, with an average annual rainfall of only 850 mm. The variety of topography, climate and soil types creates different technical problems for road construction and maintenance from region to region. 1.03 Cameroon's population is currently 8.0 million inhabitants, growing at2an estimated 2.3% per year. While the average density is 17 persons per km , the distribution is uneven. The hiPhest concentration is found in the western highlandf with 75 persons per km and the lowest in the east with only 4 persons per km . About 18 major ethnic groups inhabit distinct regions. The transport system is of paramount importance in promoting a sense of national unity among them. Urban areas are growing rapidly: the commercial center and port of Douala has more than 550,000 inhabitants compared to 190,000 in 1965. Nearly 400,000 persons live in the capital of Yaounde, a threefold increase in ten years. Urbanization creates a strong demand for passenger transport, since urban dwellers tend to keep their ties with families in rural villages. 1.04 Gross domestic product (GDP) at market prices was estimated at CFAF 618 billion or US$2.8 billion in 1976. Between 1971 and 1976, although GDP in real terms grew about 2.5% per year, GDP per capita remained practi- cally unchanged at US$330. GDP per capita was estimated at US$340 in 1977. The Fourth Development Plan (FYs 1977-81) has set a target growth rate of 7.1% per annum. Agriculture is the most important sector and provides the liveli- hood for about 75% of the population. Growth is expected in agro-industries and agricultural production spurred by relatively favorable prices predicted for the main export crops, cocoa and coffee. In addition, forestry exploit- ation should increase with the opening of new areas at Deng Deng near Belabo. An oil refinery and tanker terminal are being planned at Port Limboh, close to Victoria, while off-shore oil exploration has begun nearby.  - 2 - B. The Transport System 1.05 The transport infrastructure in Cameroon comprises 59,000 km of roads, of which about 42,000 km are feeder roads and tracks; 1,153 km of railways; and one principal port at Douala, two minor ports at Victoria and Kribi and one seasonal river port at Garoua. There is an international airport at Douala and 13 smaller airports. The transport system is export- import oriented and focused on Douala. Foreign trade through the port of Douala flows principally along the Douala-Bafoussam corridor and the Trans- cameroon route, Douala-Yaounde-Ngaoundere-Maroua-Chad border. 1.06 Cotton bales from north Cameroon are transported more than 1,500 km by road and rail for export through the port of Douala. Cocoa and coffee from the western highlands and the central mountain areas are carried by trucks or by railway about 200-300 km to Douala. Palm oil, rubber and tropical fruits are produced in the coastal area and require only a short transport haul to be exported. In 1977, log exports amounted to 497,000 tons of which 67% went through Douala and 33% through Kribi. The average rail distance for log exports through Douala is 375 km. Further expansion of log exports depends on road improvements in the main forest belt which stretches from the Atlantic coast to the eastern frontier and covers 37% of Cameroon's area. Roads 1.07 Details of the road sub-sector are given in Chapter II. Railways 1.08 The railways, whose principal lines are the Transcameroon line (Douala-Ngaoundere, 913 km) and the western line (Douala-Nkongsamba, 160 km), are operated by Regie Nationale des Chemins de Fer du Cameroon (REGIFERCAM), an autonomous state agency. In 1976 traffic totalled 1.9 million passengers or 228 million pass.-km and 1.3 million tons of freight or 437 million ton-km. Principal commodities carried were timber, petroleum products, manufactured imports, cotton and cocoa. Freight traffic grew at an annual rate of 4% between 1969 and 1976. 1.09 REGIFERCAM has a small operational deficit. Its financial situa- tion is slowly improving as tariffs were increased in 1977 and 1978 and their structure modified to discourage hauls of less than 100 km. REGIFERCAM is taking steps to upgrade railway infrastructure and solve operational and managerial problems. Many external donors are involved in the partial re- alignment of the rail track between Douala and Yaounde, the oldest and most heavily used section. External aid is also financing purchase of locomotives and rolling stock. The proposed Fourth Railway Project, scheduled for FY 1979, would provide substantial training and technical assistance, construc- tion of a marshalling yard in Douala and expansion of locomotive and rolling stock maintenance facilities.  - 3- Ports, Waterways and Shipping 1.10 Douala is the principal port, handling about 90% of Cameroon's foreign and transit trade. The port operated at full capacity in 1977 with a total throughput of 2.5 million tons. Imports totalled 1.7 million tons, including 0.5 million tons of petroleum products. Exports amounted to 0.8 million tons: timber accounted for about 0.4 million tons; and agricultural products for 0.3 million tons, mainly coffee, bananas, cocoa and cotton. Since 1969 traffic has grown 6% per year, with imports increasing at 8% p.a. and exports at 1% p.a. The port's capacity will be expanded to about 4.0 million tons by the ongoing Second Douala Port Project (Loan 1321/Credit 657 CM, US$250 million, 1976) due to be completed in 1981. The port of Victoria has been losing traffic to Douala; in 1977, it handled 23,000 tons of exports and no imports. The same year, the lighterage port of Kribi handled 179,000 tons of exports, mainly logs from nearby areas, and 9,800 tons of imports. A small river port is located at Garoua on the Benoue river, navigable below Garoua from mid-July to mid-October. In 1977, Garoua handled 9,000 tons of exports, mainly cotton, and 5,000 tons of imports, mainly fertilizers. 1.11 The Cameroon National Port Authority, an autonomous public corpora- tion, is in charge of all port operations in Cameroon. The Port Authority is financially self supporting: in FY 1977 its cash flow (capacity for self- financing) was CFAF 1.2 billion (US$5.5 million). Air Transport 1.12 Cameroon Airlines (CAMAIR) provides domestic services between Douala, Yaounde and 12 other domestic airports, and international services between Douala, West and East Africa, and Europe. The fleet consists of one Boeing 707, three Boeing 737's, and one de Havilland Twin-Otter. On domestic services CAMAIR carries about 75,000 passengers annually with traffic concen- trated between Douala and Yaounde. Modal Distribution of Traffic 1.13 On a country-wide basis road transport is the dominant transport mode, linking Yaounde with provincial centers and serving regional and local trade. While in the Douala-Bafoussam corridor road transport predominates, in the Douala-Yaounde corridor the railway carries about three-fourths of the through traffic of goods. Road transport takes over where the railway ends to serve northern Cameroon and Chad along the Transcameroon route, which consists of 913 km of railway and 800 km of road. 1.14 The distribution of traffic between modes in the Yaounde-Douala corridor reflects the poor state of the road as well as tariff competition between the railroad and trucks. During the rainy season, the unpaved road section from Edea to Yaounde is frequently closed to traffic; even in the dry season this road is in poor condition and can be used only by light vehicles and medium-sized trucks. At about CFAF 25/ton-km railroad rates for general merchandise are at a level where truck rates are competitive. An increased volume of general merchandise is likely to be transported by road after  - 4 - construction of a paved road between Douala and Yaounde. For transport of low-value commodities such as salt, sugar and fertilizers, rail tariffs range from CFAF 12.5 to 14.8/ton-km. Trucking rates are not competitive at this level and these cargoes are likely to continue to be transported by rail. With regard to passenger traffic, third class railroad fares are below bus fares of CFAF 6.0/pass.-km. However, bus services are more frequent on intermediate distances in the corridor and serve more villages. With the projected paved road between Douala and Yaounde more passengers are likely to travel by bus because of time saving and improved comfort. C. Transport Policy, Planning and Coordination 1.15 The Ministry of Transport (MOT), created in 1970, is responsible for transport sector management, including (a) reviewing, coordinating and screening transport investment proposals prepared by other ministries and public agencies, (b) formulating transport policies, and (c) approving the tariffs of REGIFERCAM, the National Port Authority and CAMAIR. However, the Ministry has neither the qualified staff nor the authority to perform its functions adequately. The Ministry of Economic Affairs and Planning (MINEP) has carried out some transport planning in the framework of overall develop- ment planning, but its limited resources, sufficient when investment decisions consisted mainly of ranking high-priority projects on the principal transport routes, are inadequate for the more sophisticated investment choices between competing corridors and between road/rail in the same corridor. The Ministry of Equipment and Housing (MINEH) is responsible for road planning and has just started to direct its attention to this task (para. 2.23). 1.16 The Bank has had a continuing dialogue with the Government on the need for strengthening transport sector management. At first, attempts to reinforce the organization and machinery for transport planning and policy- making met with limited success. Recent developments imply a change in the Government's attitude. A Transport Planning and Coordination Unit (TPCU) has been created within MOT and two economists are being recruited for three years each under the Technical Assistance Project (Credit 673 CM, US$4.5 million, June 1977). One economist will be seconded to MINEP to help ensure coordina- tion and integration of investment decisions in transport with closely related sectors such as agriculture and forestry. The other economist has been sec- onded to MOT to stimulate and coordinate the work of the TPCU. The Third Highway Project (para. 2.39) provides TPCU with another economist/statisti- cian for three years and four fellowships. Furthermore, the Government has requested advice from the Bank on carrying out an overall transport sector study. The study would be undertaken by Cameroonian professionals and ex- patriate experts financed under ongoing transport projects, with Bank staff providing technical assistance during field missions. 1.17 So far, however, the Government has been unable to develop a system- atic, long-term strategy for transport development and has taken a project-by- project approach to investment. The result is an ambitious road program to the detriment of road maintenance, and a lack of clear strategy for railway  - 5 - investments. This has also sometimes led to a tendency to favor high-cost investments as in the Douala-Yaounde corridor. In late 1976, a study of feasible transport improvements in the corridor, carried out under the Second and Third Railway Projects, denonstrated that both partial realign- ment of the railway and construction of a two-lane paved road were economi- cally justified. However, for a time the Government envisaged the immediate construction of an expressway instead of a two-lane road. The Bank had repeated discussions with the Government on the matter, and the Government has now agreed to reduce to a two-lane road its first-stage plans for highway investment in the corridor. The proposed project includes the completion of the ongoing study being carried out under Government financing for the economic feasibility and detailed engineering of a two-lane paved road between Douala and Yaounde. 1.18 In addition to agriculture, the Government is giving priority to transportation under the Fourth Development Plan in order to promote interna- tional and regional trade, expand access to agricultural areas and facilitate food marketing. This policy is basically sound as large areas are still isolated and others are served only by rudimentary infrastructure. The plan aims at a transport infrastructure investment of CFAF 175 billion in 1976 constant prices or about one-fourth of the public investment target. Compared to the CFAF 99 billion actually invested in the transport sector during the Third Development Plan (FYs 1972-76), the current investment target for the transport sector is overly ambitious. Achievement of this investment target will, in the end, depend on the availability of foreign financing, which is projected to cover 62% of total costs. (Under the Third Development Plan foreign participation in transport investment was about 60%). Another con- straint is the generally slower work progress than anticipated at the planning stage. Many transport projects included in the Fourth Plan have been carried forward from the Third Plan because cost escalation, particularly during the 1974-75 period, created financial difficulties and because lead time for project preparation was longer than expected. 2. THE ROAD SUBSECTOR A. The Network 2.01 The road network totals about 59,000 km, of which about 2,300 km are paved and 7,000 km are gravel or laterite roads. The remainder are earth roads (about 7,400 km) and feeder roads (42,000 km). About 29,000 km of roads are classified into paved roads and five classes (A to E) of unpaved roads mainly according to traffic levels for maintenance budgeting purposes. The developnent of the road network is given below.  Development of the Road Network (km) 1972 1974 1976 1978 Classified Network Paved roads 1,417 1,610 1,977 2,277 Gravel and earth roads Class A 996 1,195 1,021 2,002 Class B 2,339 2,468 2,822 3,915 Class C 2,152 3,064 5,716 6,312 Class D 1/ 6,084 6,196 5,526 4,171 Class E 1/ 7,959 9,315 9,240 10,004 TOTAL 20,947 23,848 26,302 28,681 Unclassified Network Earth tracks 1/ (estimated) 22,000 25,000 28,000 30,000 GRAND TOTAL 42,947 48,4854,30258 I/ Part of class D roads, class E roads and earth tracks constitute the feeder roads network. The Government is studying a more functional classification which would take into account geographic and socio-economic criteria in addition to traffic levels. This new classification would comprise national (6,400 km), pro- vincial (5,100 km), district (5,400 km) and local (11,800 km) roads. 2.02 While the density of the road network averages 0.12 km per km 2 which is similar to that of Ghana, Nigeria and Ivory Coast, it varies con- siderably within the country. It is greatest in densely populated areas of high economic activity: the coastal/southwestern region along the Douala- Bafoussam corridor, the central region around Yaounde, and the northern region around Maroua. The most important trunk roads -- the Douala-Bafoussam-Foumban road and the northern section of the Transcameroon route -- have recently been paved. 2.03 Although there has been a great effort to build and rehabilitate paved roads, in recent years the overall condition of the road network has deteriorated somewhat due to low initial construction standards, insufficient maintenance and increasing traffic. Gravel and earth roads, which account for 92% of the classified road network, are frequently impassable during the rainy season. In the dry season, corrugated and stony road surfaces and deep potholes cause excessive wear to vehicles. Consequently, the Government is now giving a higher priority to improving road maintenance than in the past.  -7- B. Road Transport Characteristics Vehicle Fleet 2.04 The Ministry of Transport registers new vehicles but does not record retirement of vehicles from service. The fleet is estimated at about 63,000 vehicles, of which about 55% are cars, 35% trucks and vans, 6% buses and 4% specialized vehicles. From 1971 to 1975, new vehicle registrations increased at an average of about 6% p.a. The table below lists new vehicle registrations (1971-75) and the estimated vehicle fleet (1971-77). New Motor Vehicle Registrations Average Annual 1971 1972 1973 1974 1975 Growth Passenger cars 3,697 3,955 4,153 4,402 4,622 5.6% Vans 1,352 1,462 1,396 1,508 1,659 5.2% Buses 406 334 469 493 527 6.7% Trucks 1,021 1,103 1,202 1,262 1,350 7.2% Special purpose vehicles 250 363 350 290 313 5.8% TOTAL 6,726 7,217 7,570 7,955 8,471 6.0% Estimated Motor Vehicle Fleet Average 1971 1972 1973 1974 1975 1976 1977 Annual Growth Total number of vehicles 47,000 50,000 52,000 55,000 59,000 59,000 63,000 6% /1 Mission estimates. Fuel Consumption by Road Users 2.05 As shown in the following table, during FYs 1971-77 fuel consumption by road users grew at an average of 6% p.a. Premium gasoline and diesel oil increased more rapidly than regular gasoline.  - 8 - Fuel Consumption by Road Users (in m 3 ---------------------Fiscal Year