Sri Lanka - Road Maintenance Project

Document of The World Bank ~CF FOR OFFICIAL USE ONLY Report No. 2334-GE SRI LANKA STAFF APPRAISAL REPORT A ROAD MAINTENANCE PROJECT April 11, 1979 Transportation Division South Asia Projects 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 US$1 Rs 15.8 Rs 1 = US$0.063 Rs 1 million US$63,290 SYSTEM OF WEIGHTS AND MEASURES: BRITISH 1 foot (ft) = 0.305 meters 1 mile (mi) = 1.609 kilometers PRINCIPAL GLOSSARY OF ABBREVIATIONS CGR - Ceylon Government Railways CIDA - Canadian International Development Agency CSC - Ceylon Shipping Corporation CTB - Ceylon Transport Board DME - Department of Machinery and Equipment DOH - Department of Highways GOSL - Government of Sri Lanka MLLD - Ministry of Lands and Land Development MOFP - Ministry of Finance and Planning MOPH - Ministry of Power and Highways MOT - Ministry of Transport MOTS - Ministry of Trade and Shipping RTB - Regional Transport Board SDCC - State Development and Construction Corporation SLCTB - Sri Lanka Central Transport Board TCEO - Territorial Civil Engineering Organization vpd - vehicles per day SRI LANKA FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY SRI LANKA STAFF APPRAISAL REPORT A ROAD MAINTENANCE PROJECT Table of Contents Page No. I. THE TRANSPORT SECTOR ................................... 1 A. Economic Setting .................................. 1 B. Transport System .................................. 2 C. Transport Policy and Planning ..................... 7 II. THE HIGHWAY SECTOR .................................... 8 A. The Highway Network and Highway Traffic .... ....... 8 B. The Administration of Highways .................... 9 C. The Highway Planning and Finance .... .............. 11 D. Technical Aspects of Highway Construction and Maintenance ................................. 12 III. THE PROJECT .14 A. Background .14 B. Objectives .15 C. Description .15 D. Cost Estimates .18 E. Execution of Project .20 F. Project Monitoring and Planning .21 G. Procurement .22 H. Financing and Disbursements .23 IV. ECONOMIC EVALUATION .................................... 23 A. Sources of Benefits and Beneficiaries .... ......... 23 B. Costs and Benefits ................................ 25 C. Conclusions ....................................... 26 V. AGREEMENTS REACHED AND RECOMMENDATIONS ........ ......... 27 This report was prepared by Messrs. Y. Abe (Economist) and S. Thriscutt (Highway Engineer). 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.  Table of Contents (Contd.) TABLES 1. Classification of Roads Maintained by DOH 2. Motor Vehicle Statistics 3. Highway Expenditures: 1972-1979 4. Road Rehabilitation Project Component 5. Bridge Replacement Project Component 6. List of Maintenance Equipment to be Procured 7. Project Costs Estimates by Type of Works 8. Project Costs Estimates by Year 9. Estimated Schedule of Disbursements ANNEXES 1. Draft Terms of Reference for Consultancy Services 2. Project Reporting Requirements 3. Methodology Used in Economic Analysis 4. Related Documents and Data Available in the Project File CHARTS World Bank Chart No. 20260 - DOH Organization Chart 20261 - Technical Assistance 20262 - Implementation Schedule MAPS IBRD Map 14040R This report is based on information provided by the Government of Sri Lanka and collected by past missions in December 1977 and June 1978 and on the findings of an appraisal mission in October 1978 consisting of Messrs. Y. Abe (Economist) and S. Thriscutt (Highway Engineer) and assisted by Mr. A. Mackie (Consultant). Additional reports and data relative to the project available in IDA are listed in Annex 4.  SRI LANKA A ROAD MAINTENANCE PROJECT I. THE TRANSPORT SECTOR A. Economic Setting 1.01 Sri Lanka is an island with an area of about 25,000 square miles. The maximum geographical distances of the island are about 250 miles from north to south and 150 miles from east to west. The topography of the country which is flat in the coastal area and mountainous toward the center of the island, rising to peaks of 7,000-8,000 feet, has influenced the transport infrastruc- ture. Rivers flow in a radial pattern from the mountains and have no navi- gational significance. Total population is about 14.4 million, of which a very high percentage live within the southwest quadrant of the island with densities of over 1,000 people per square mile. Another area of dense settle- ment is the Jaffna peninsula, to the north. The size and topography of the country and the location of population generates large and frequent short distance transport of goods and passengers that can be well met by road trans- port. 1.02 Recent economic growth has been modest; between 1972 and 1977 real gross domestic product (GDP) increased by 3.7% annually. During the same period, passenger and port traffic has been stagnant and freight traffic has increased by about 3.6% per annum: 1972 1973 1974 1975 1976 1977 Passenger Numbers (billions) 1.5 1.5 1.3 1.4 1.5 1.6 Passenger-Miles (billions) 10.6 11.3 9.6 10.2 10.9 11.3 Freight Tons (millions) 17.1 18.3 19.4 20.4 21.4 22.3 Ton-miles (millions) 684 714 736 766 789 813 All Ports tons (million) 2.6 2.5 2.4 2.5 2.4 3.0 1.03 The major commodities involved in freight transport have been, and still are, agricultural commodities such as foodgrains (rice, paddy and wheat) as well as tree crops (tea, rubber and coconut) and other bulk commodities such as cement and POL. Commodity movements are largely dictated by the location of agricultural production and industry and Sri Lanka's orientation toward  -2- export-import economy. The densely populated coastal strip is primarily devoted to coconut and rubber production for export as well as paddy and vege- table production for local consumption. The mountainous interior of the southern half of the country is devoted largely to rubber and tea production. The interior of the northern part (dry zone) has mainly cultivation under irriga- tion. As for the manufacturing industry, about 75% of production is centered in and around the Colombo area. While exports, i.e. tea, rubber and coconut, are collected at the Colombo port from various parts of the country, imported and the bulk of domestically produced goods originate from Colombo and are distributed to various parts of the country. As a result, out of the total freight transported, well over 50% is moved into and out of the Colombo area. 1.04 The Government is preparing an Investment Program for the public sector for the period 1979-83 and its draft aims at an average annual rate of growth in real GDP of 5.5%. It assumes that freight transport demand would grow at about 8% annually during the Plan period and passenger transport demand at about 7.7%. The additional transport capacity within each mode necessary to carry the projected traffic 'volumes would be achieved partly by additional equipment and partly by better utilization of existing facilities. Given their current poor performance, the planned investment in the railways will have to be carefully reviewed during the plan execution. These comments by IDA were passed on to the Government (GOSL) who indicated that a substantial investment for capacity expansion has been curtailed. B. Transport System 1.05 The transport system of Sri Lanka comprises about 25,000 miles of road of all types; about 950 route-miles of railways; one main and two minor ports; and seven airports of which one handles international traffic. The inland transport services are provided by the Ceylon Government Railway (CGR), the Bus Boards consisting of the Sri Lanka Central Transport Board and nine Regional Transport Boards, which are public corporations having a monopoly for the operation of road passenger services throughout the island, and by a number of private road goods operators. Other modes of transport, air and coastal shipping, are relatively minor. A short pipeline is used to transport crude oil from the oil berth at Colombo port to the refinery of Ceylon Petro- leum Corporation in Colombo. Road transport is the most important mode in the country; it carried 85% of total passenger miles and 79% of total freight ton-miles in 1977:  -3- No. of Passengers Passenger Miles (millions) (billions) 1972 1977 1972 1977 Passenger Rail 85 66 1.9 1.7 Bus 1,390 1,529 8.7 9.5 Total 1,475 1,595 10.6 11.2 Tons (millions) Ton Miles (millions) 1972 1977 1972 1977 Freight Rail 1.7 1.7 208 169 Truck 15.4 20.7 476 644 Total 17.1 22.4 684 813 1.06 Transport infrastructure has been deteriorating due to inadequate maintenance and insufficiency of funds and foreign exchange for equipment and spares. The situation is a consequence of the limited economic resources of the country in past years. The severe foreign exchange shortage has led to curtailment of imports essential to maintain the transport infrastructure and equipment. Currently, transport capacity in road and rail is barely meeting the need. Concerning sea transport, whereas the port of Colombo has ample capacity most of its equipment is very old. Transport related agencies and operators will have to adjust to the recent changes in economic policies toward faster economic growth and liberalization of economic controls. (a) Roads and Road Transport 1.07 Details of the highway subsector are discussed in Chapter II. 1.08 Road transport is the most important mode in the country, carrying 85% of total passenger and 79% of total freight in 1977 (para 1.05). As re- gards freight, the road goods transport industry is unregulated (no business licensing, no tariff regulations) and pricing is subject to market forces and local circumstances. Trucking is mainly privately owned with small operators predominating and some trucks are owned by Government Departments, public corporations, Cooperative Societies and agricultural estates for "own account". Because of severe restrictions on import of vehicles, spare parts and materials in the past, the average age of the truck fleet is high. The GOSL estimates that more than 50% of trucks are over 15 years old. Recent changes in Govern- ment policy enable trucks to be imported freely, and truck imports are now increasing substantially. 1.09 The Ceylon Transport Board (CTB), established in 1958, was a public corporation having a monopoly of road passenger service operations throughout the island. The CTB was reorganized in June 1978 and now consists of the Sri Lanka Central Transport Board (SLCTB) and nine Regional Transport Boards (RTBs). The former has control over procurement of imported equipment, materials and spare parts for buses, production of bus equipment components,  - 4 - assembly of buses, the fare structure and operational matters affecting more than two RTBs. The RTBs are responsible for the day-to-day operation of bus services. The Transport Boards are responsible to the Ministry of Trans- port (MOT). They have presently a fleet of about 7,300 buses of which over a third are more than ten years old. This, coupled with a shortage of spares and materials, makes bus operations difficult. Though the workshop facilities have been gradually improved and some incentive schemes have been introduced, there are still arrears of repairs. These difficulties are reflected in the relatively low availability of buses from depots for day-to-day operations - during 1977 the number of buses operated per day were only 5,596 or a 76% of the total fleet. However, with an average daily mileage per bus of 150 miles and a load factor of 72% (average bus capacity of 53 seats), CTB's operational performance is generally good given the circumstances. 1.10 In 1977 CTB carried 1.5 billion passengers for 9.5 billion passenger miles. Passenger miles increased by over 9% annually during 1963-1973, and reached 9.2 billion in 1973. However, in 1974, following the rise in the price of fuels, services were curtailed, a five day work week (in lieu of the previous 5-1/2 days) was adopted and bus fares raised substantially (by about 80%). Passenger miles therefore dropped in 1974 to 7.9 billion. Since then, passenger miles in total have been increasing at about 6% per annum. Passenger traffic carried during the period 1972-1977 is shown below (in millions): Passengers 1972 1973 1974 1975 1976 1977 Numbers 1,390 1,405 1,249 1,336 1,436 1,529 Passenger miles 8,697 9,213 7,905 8,315 9,100 9,507 1.11 The CTB had an operating surplus in 1963. However, following cost increases not compensated by tariff adjustments, its financial situation deteriorated and in 1970 revenues were not adequate to cover working and admin- istrative cash expenses. The small fare surcharge in 1971 and a substantial fare increase effective February 1974 resulted in an improvement in CTB's finances. In 1974 and 1975, it made a small operating surplus. There have been significant cost increases since then and it is estimated that revenues will barely cover working expenses during the period, 1976-1978. (b) Railways 1.12 The railways, which play a relatively minor role in the transport system, are operated by CGR as a Government Department which is a part of MOT. The system comprises 866 miles of broad gauge and 87 miles of narrow gauge lines. The condition of the infrastructure, bridges and track is generally reasonable, although there is a substantial backlog of track renewals. The railway is mostly diesel powered but the availability of locomotives has been poor (65%-70%), due particularly to the lack of spare parts. The rolling stock of the railway is old and availability is quite low. The main workshops at Ratmalana suffer from low productivity due mainly to inadequate change over from steam to diesel locomotive repairs, poor processing of work and deficient material supply. Parallel with the poor operational performance, the working  ratio has increased over the past five years from 110% in 1972 to 142% in 1977. 1.13 Traffic in 1977 amounted to 66 million passengers and 1.8 million tons of freight. Passenger and freight traffic on the railways during the period 1972 to 1977 is shown below (in millions): Traffic 1971/72 1973 1974 1975 1976 1977 (15 months) Freight Tons 2.1 1.8 1.9 1.7 1.5 1.8 Ton miles 257.6 199.6 192.8 184.1 170.0 169.0 Passengers Number 98.5 90.0 69.7 69.1 71.4 65.7 Passenger miles 2,384 2,051 1,726 1,780 1,867 1,735 Total annual rail freight traffic is below 2 million tons and traffic in ton miles has virtually stagnated or is declining. Average freight distance carried has also been declining. Passenger traffic has been stagnant, particularly since 1974 when the five-day work week and the fare increases were introduced. More than a third of passenger miles are accounted for by season ticket traffic, most of it commuter within the Colombo area. 1.14 The physical, economic and sociopolitical environment in which CCR operates has prevented relatively low cost operations because: (a) the physical size of the island and the distribution of population and centers of economic activity results in short traffic hauls; (b) the heavy gradients and sharp curves on the mainline have contributed to low operating speeds vis-a-vis road transport; (c) nearly every section of the railway is paralleled by a road and, despite present poor conditions, road trans- port is generally quicker; (d) the absence of any large volume of bulky, easily load- able rail traffic makes it costlier to spread the terminal costs and overheads over the ton miles involved; and (e) the railway has a large number of stations which forward less than five tons of freight a month. (c) Ports 1.15 There are three ports for deep sea vessels: Colombo (on the west coast) which is now handling more than 90% of the total tonnage through all ports, and the other two ports of Galle (about 75 miles south of Colombo),  - 6 - and Trincomalee (on the east coast) which handle the balance. All the ports are administered by the Ministry of Trade and Shipping through the Colombo Port Commission, while all cargo handling is dealt with by the Port (Cargo) Corporation. A separate dockyard owned jointly by CPC and the Ceylon Shipping Corporation operates ship repair work within the Colombo port area. 1.16 Colombo has the equivalent capacity of 14 deep water berths, together with mooring inside the breakwaters for 22 ships. Development in hand includes construction of a container berth about 850 ft. long which is near completion. Galle has two deep water berths inside a natural bay where there is room to take up to seven ships. Trincomalee has a natural harbor able to provide anchorage for over 100 ships. 1.17 Freight traffic loaded and unloaded at all ports during 1972-77 is shown below (in thousand tons): 1972 1973 1974 1975 1976 1977 Colombo export 891 865 845 918 1,000 1,010 import 1,535 1,487 1,477 1,363 1,245 1,722 Subtotal 2,426 2,352 2,322 2,281 2,245 2,732 Galle 26 34 15 52 53 109 Trincomalee 167 158 112 145 127 135 Total 2,619 2,544 2,449 2,478 2,425 2,995 Port traffic was declining until 1976: cargo handled at Colombo declined from about 3.1 million tons in 1966 to 2.2 million tons in 1976. In 1977 port traffic increased by about a half million tons due mainly to increased imports. The indications of the first few months of 1978 are that the tonnage will con- tinue to rise due to a higher level of economic development. There is still ample port capacity and substantially more traffic could be handled if nec- essary. However, there is a need to replace and augment cargo handling equipment, improve workshop facilities and replace old equipment in order to cater for the increasing cargo volumes. (d) Ocean Shipping 1.18 The state owned Ceylon Shipping Corporation (CSC) was set up in 1971. CSC had only one freighter (14,600 DWT) in 1971; it now has eight cargo vessels with a total dead weight tonnage of about 116,000. CSC is a member of 13 Conference and Rate Agreements. CSC's major route is between Sri Lanka and the UK, as well as other European countries. In 1977, CSC carried 47% of the total export cargo, 77% of import cargo from the UK and nearly 33% from the other European countries. The Government estimates that the foreign exchange savings during the last six years would amount to US$16 million. CSC has three subsidiary companies, the Ceylon Port Services Limited (operating  bonded stores), Colombo Dockyard Limited (for ship repairs) and Lanka Tankers Limited (for carrying imported crude oil). The last two started their opera- tions in 1974. Lanka Tankers has an old 30,000 DWT vessel which imports crude oil from the Persian Gulf - 25% of Sri Lanka's crude oil import is carried by this vessel. 1.19 GOSL also established the Central Freight Bureau in 1973 to provide a central trade booking office to allocate all export freight space on ocean- going vessels, to ensure the aggregation of goods to obtain economic loads, to rationalize the sailing schedule of vessels and to obtain favorable freight rates and terms for export cargoes. Due to the streamlining of export cargo handling in this manner, GOSL estimates that significant foreign ex- change savings have been achieved. C. Transport Policy and Planning 1.20 Highway planning and construction is the responsibility of the Department of Highways (DOH) in the Ministry of Power and Highways (MOPH). The MOT is responsible for railways and road transport; the Ministry of Trade and Shipping (MOTS), for ports and shipping; and the Ministry of Defense, for civil aviation. Thus, responsibility for transport planning and policy execution is scattered. The Ministry of Finance and Planning (MOFP) could coordinate transport investments and policy, but it has not the staff for this purpose. 1.21 Planning has in practice meant the putting together of the programs and proposals of different agencies with only limited coordination when the need is obvious. Consideration of alternatives, and economic analyses, are rare. In particular, the problems of road-rail alternatives and definition of the future role of the railway have yet to be tackled. There has been also a tendency to spread limited funds thinly over various modes and various works in a particular mode of transport. The Government will, with the help of technical assistance, have to determine a strategy and select investment priorities to stem the possible deterioration in transport capacity and to provide sufficient capacity for the increasing transport demand arising from economic development. Since the island is relatively small, the railways can have only a limited economic role to play in some areas, such as commuter passenger traffic in and around Colombo and the transport of a few bulk commodities. Canada has been assisting CGR to improve its operational effi- ciency through provision of technical assistance and has financed a study in order to define the role of CGR. Bus transport is currently being reviewed by IDA with a view to assisting SLCTB to improve operations and financial position. The ports are being studied by consultants financed by the Japanese Government with a view to improving operational efficiency and providing equipment for replacement. 1.22 GOSL regulates passenger fares of both rail and bus services. Pricing changes in CGR and the Bus Boards require ministerial approval and there is always a tendency to restrict or delay increases. The Government did allow CGR and the Bus Boards to raise tariffs in 1974 and again in 1978 for RTBs, bringing transport charges somewhat closer to costs. In the case of  - 8- freight traffic, while road tariffs are unregulated, rail tariffs are regu- lated by GOSL and there has been a reluctance to adopt pricing policies which reflect costs. 1.23 The GOSL's current economic objectives are incorporated into the Medium-Term Development Program, 1979-83. The Plan represents an attempt at realizing an expansion in employment, high average economic growth and pro- gressive improvement in the balance-of-payments by increasing emphasis on agriculture and industry. Of the total public investment in the Plan, 15% is allocated to transportation, and about half of this amount is for highway and road transport investments. In view of the insufficient maintenance and investment expenditures in the transport sector during past 10 years, the plan allocation to the highway subsector can be considered modest. II. THE HIGHWAY SECTOR A. The Highway Network and Highway Traffic 2.01 Compared to the other countries of South Asia, Sri Lanka has a relatively extensive and well-developed highway network, evolved largely to serve the needs of plantations by bringing their produce to the ports. The highway system maintained bv DOH amounts to 15,479 miles, of which 11,200 miles are paved (Table 1). There are also some 10,000 miles not maintained by DOH which were built for specific estates and irrigation schemes. 2.02 Most highways were built many years ago and have since had few improvements, while roadside development has encroached into the original right-of-way over long sections. A number of bridges are structurally unsound as well as too narrow for traffic, and there are lengths of highway throughout the country where pavement failure is imminent. Maintenance of both pavement and bridges has been insufficient for a number of years. These factors com- bine to cause low average traffic speeds, high operating costs and frequently dangerous conditions. The road network now requires sound maintenance and substantial rehabilitation to prevent further serious deterioration. 2.03 The motor vehicle fleet at the end of July 1978 as estimated by the Commissioner of Motor Vehicles in MOT totalled about 218,000 made up of about 100,000 automobiles, 40,000 trucks and 10,000 buses with the remainder being tractors and trailers used mainly on tea, rubber and other agricultural estates (Table 2). Present vehicle fleet is equivalent to an average of one vehicle for 66 persons. Because of severe restrictions on import of vehicles, spare parts and materials in the past, the vehicle fleet is on average very old. Statistics of capacity of trucks are not available. However, most trucks are 5-7 ton capacity and the maximum permitted gross weight of vehicles throughout the country is 15 tons. The import of trucks for private operators was almost nil for several years, but after the liberalization of imports in 1977, truck imports are increasing at a rapid rate. 2.04 There are no motor vehicle manufacturers in Sri Lanka, but several private industries assemble a wide range of motor vehicles and SLCTB also  - 9 - assembles buses with a capacity of 1,000 annually. Imports of vehicles are only limited by legal size maxima but substantial custom duties are levied on vehicle imports, duty rates ranging between 40% - 50% of CIF values. 2.05 There are 27 traffic counting stations on National Roads island- wide. The sporadic counts carried out since 1961 indicate only that average traffic growth was practically zero up to 1975 when some counts were last taken. The proportion of heavy vehicles in the traffic stream has increased from about 39% in 1962 to 55% in 1978, indicating a decreased usage of cars since registration figures do not show a corresponding change in fleet compo- sition. However, these data are derived from GOSL returns, which may not take proper account of vehicle mortalities. For the future, the forecast GNP growth rate of about 5% per annum in real terms can be expected to produce average annual traffic growth rates of 7 to 8%, with a relatively more rapid growth for cars than for other vehicle types. Given the present condition of the highway network, this rate of growth will soon lead to a noticeable deteriora- tion in road travel standards. B. The Administration of Highways 2.06 In 1969, the highways and buildings functions of the Public Works Department were separated to form DOH and a Buildings Department. In the following year, DOH was placed under the Ministry of Irrigation, Power and Highways (MIPH) where it acted as an administrative and planning headquarters. Construction and maintenance work relating to highways was carried out by other departments within the same Ministry, who also dealt with irrigation and power projects. These departments were: The State Development and Construction Corporation (SDCC) which undertook construction of most bridges for DOH: The Department of Machinery and Equipment (DME) which operated central and a number of regional workshops and purchased, allocated, operated and maintained all vehicles, plant and equipment in MIPH; and The Territorial Civil Engineering Organization (TCEO) which, through a number of regional chief engineers, maintained the highway system and built minor bridges and offices, stores, etc., connected with highways. 2.07 After reorganization in 1978, TCEO was divided between DOH and the Department of Irrigation in the Ministry of Lands and Land Development (MLLD); DOH itself was placed under the Ministry of Power and Highways (MOPH). DME was also divided, eight regional and one central workshops coming to DOH, temporarily with their existing staff, the remainder going to MLLD. The future of SDCC was not decided at the time of appraisal, but GOSL has since stated that SDCC will be placed under MLLD. This means that DOH will have to rebuild a Bridge Section, similar to that from which SDCC was originally  - 10 - formed. The effect of these changes is that DOH is required to adopt an executive responsibility for which it is unprepared. It will have to carry out its work through institutions which have recently undergone radical changes in make up, function and control and which, in the case of DME (as transferred to DOH), lack a central organization for major overhauls, spares control, procurement, records and costing. In these circumstances, DOH will require substantial technical assistance, and the workload it can carry can be increased only very gradually. In the meantime, GOSL will have to make arrangements to augment the capabilities of DOH by providing some services from DME and SDCC during the period when DOH is building up its own facilites. It has been agreed that GOSL will prepare a plan specifying the role of DME and SDCC in respect of DOH and will implement the plan from December 31, 1979. The present structure of DOH headquarters is illustrated in World Bank Chart No. 20260. 2.08 DOH has no shortage of clerical staff, but suffers, with the rest of Government, from a continuing drain of professional staff to other coun- tries where salaries are many times higher and prospects are judged to be better. Thus, of the approved establishment of 200 engineers of all grades in DOH, at the time of appraisal, only 108 posts were filled by qualified engineers, and a further 36 executive engineers' positions were occupied, generally adequately, by senior techical officers who have experience but are not professionally qualified. There were, therefore 56 posts unfilled from those of Deputy Directors downwards. There are similar shortages at technician levels where high-grade experienced staff are hard to find. In some Districts, the attraction of higher wages paid on the Mahaweli project is causing a shortage of even unskilled labor. The situation has been alle- viated to some extent by the recent decision that civil servants shall be exempt from paying income tax on government salaries. However, there is a need to review manpower situations and requirements in DOH, where some sec- tions are at present undermanned while others appear to have surplus. With the help of technical assistance to be provided under the credit, GOSL should prepare a timetable for strengthening DOH staff through training, systematic rotation of experienced staff and inhouse training of foreman. It has been agreed that GOSL will review staffing of DOH by December 31, 1979 with a time table and specific program for strengthening DOH agreed between GOSL and IDA. Earlier review is not possible for the reasons discussed in para 2.07. 2.09 The Deputy Director (Engineering Services) has responsibility in DOH for management and training. There are no formal arrangements for staff training, and the practice followed until 1970 of putting new road supervisors through a six-month familiarization course has fallen into disuse. Univer- sities in Sri Lanka turn out about 250 professional engineers a year, and they will normally work for government only for as long as it takes them to acquire reasonable practical experience. Of the 145 graduate engineers turned out from one center in 1969, only seven are said still to be in Sri Lanka. The situation with technicians is similar, although not so acute. At present, even at maximum government salary rates many technicians with some experience take the first opportunity to leave government service for commercial employ- ment or an overseas post. There is a need to strengthen training activities and a training specialist, to be financed under the credit, would assist DOH to identify and implement needed training programs which will allow, so far as possible, for the staff turnover caused by rival employment opportunities.  - 11 - C. Highway Planning and Finance 2.10 Planning, project appraisal, design and research are handled in DOH by the Deputy Director of Engineering Services. For construction projects, a technical report is prepared and submitted to the Ministry of Finance and Planning so that the project can be approved and included in the budget esti- mates. In the absence of detailed traffic data and vehicle operating costs, project appraisal cannot be considered rigorous. There is no firm long-term highway development plan, and most projects originate from an expression of need or desire from the public, usually channelled through Ministers or Members of Parliament. Planning of highway maintenance is based on past patterns and obvious needs without reference to traffic loads experienced or expected on particular routes. There is a need for strengthening highway planning and preparing a medium-term investment program for highways. The technical assistance team will assist in these areas. It has been agreed that GOSL will furnish to IDA, by December 31, 1982, a 5 year highway invest- ment program designed to follow the present Medium Term Plan. This draft investment program will be reviewed by IDA with a view to agreeing on an overall investment plan for the highway sector in Sri Lanka. 2.11 The past and present expenditures on roads have not kept pace with requirements (Table 3). At present, annual maintenance allocations are about Rs 5,500 or US$360 equivalent per annum per mile of road maintained by DOH (Tables 1 and 3). Allowing for the fact that very little routine maintenance is, in fact, carried on Class D and E roads, the annual allocation is effec- tively about US$500 equivalent per mile on main routes, which is barely sufficient to cover the costs of proper routine maintenance aInd makes little allowance for periodic maintenance or weather damage. To ensure correct standards of maintenance, GOSL should aim to double the present allocation per mile (in terms of 1978 prices) as soon as DOH is able to undertake the extra work involved, so as to allow minimal correct routine and periodic maintenance of all roads. The technical assistance team should assist DOH to produce a logical highway maintenance improvement program designed to achieve this objective within five years. It has been agreed that such a road maintenance program for the period 1981-85 be submitted to IDA by June 30, 1980 and that the necessary extra funds will be made available to carry out the program. 2.12 Funds for construction and improvement of Class C, D and E roads are provided through the so-called decentralized budget, which is distributed by District Ministers (previously by government agents), in each district. Hence, district Chief Engineers receive demands for work to be done, and funds for its execution, from both MOPH and from District Ministers. Selec- tion of work by District Ministers may be influenced by immediate and local considerations which inhibits implementation of long-term general planning. Furthermore, there is often pressure for such work to be completed quickly. Hence, with the shortages of equipment and staff experienced by district Chief Engineers, progress in the planned work program risks being affected by the introduction of unplanned projects. There is the need for all parties to accept that a work program must be fixed for about a year ahead, to be altered only in cases of real emergency. The task of Chief Engineers and executive  - 12 - engineers is made more complex by the fact that DOH districts and adminis- trative districts do not always coincide, so one engineer may find himself dealing with more than one District Minister. Assurances have been received from GOSL that progress of the project will not be affected by diversion of limited resources of equipment, materials and manpower to other works, except in the event of emergencies. 2.13 GOSL's revenue from road users was estimated to be about half the amount spent on the road system. By far the greatest source of revenue comes from import duties on vehicles and spares (Rs 55 million or US$3.5 million equivalent in 1977). With other taxes such as license fees and sales tax, the total revenue for 1977 was estimated at Rs 90 million or US$5.7 million equivalent. By comparison, total road expenditures in 1977 was about Rs 172 million or US$10.9 equivalent. There is no fuel tax levied on gasoline and diesel oil. GOSL will investigate present road user costs, as a part of the preparation of the 5 year road maintenance program referred to in para 2.11, with the object of proposing suitable means to bring revenue from road users approximately into line with highway expenditures, and review the results of the investigation with IDA. D. Technical Aspects of Highway Construction and Maintenance 2.14 Apart from poor alignment and narrow widths, pavement thicknesses on highwavs are zenerallv insufficient for modern traffic flows. There has been no collection of data on axle weights, but the impression is that severe overloading is not common. 1/ However, the need to move construction traffic associated with several large irrigation schemes is likely to alter this picture. Even forecast traffic growth without any increase in average axle loading will cause pavement failures to become more common. The average main road pavement is about 6 ins thick, made up of a compacted stone layer with bituminous surface treatment. Roadside drainage is generally incomplete or entirely absent, often due to roadside development which has obliterated whatever may have existed originally. Bridges are often narrow, and the steel deck members, commonly used, show signs of severe or dangerous cor- rosion, especially near the seacoast. Piers, abutments and foundations are often entirely sound, but usually cannot be reused due to being too narrow or on bad alignments. Current practice is to use heavy abutments on caisson foundations. This is unnecessarily expensive, takes a long time to build and restricts the waterway area. On many bridges, piled foundations and open abutments would be as cheap or cheaper, could be built more rapidly and would give a much larger waterway area for similar cost. These matters will be fol- lowed up during supervision missions and by the technical assistance to be provided under 'the project. 2.15 Over much of the island, an extra 4 to 6 ins of compacted stone base would probably give enough pavement strength for a further 10 or more years of life. However, this must be checked by proper subgrade soil testing 1/ A limited survey by UK technical assistance showed 5-ton trucks commonly carrying about 5.4 tons, which does not constitute serious overloading.  - 13 - and equipment is held in the central testing laboratory in Colombo, suffi- cient to set up nine regional laboratories able to handle this work. Such regional laboratories should be established to coincide with the start of any highway investment/maintenance program. DOH plans to establish and equip all regional laboratories by December 1980, and subgrade soil testing has commenced on those sections of road planned for early improvements. The expected traffic flows on most roads do not warrant any heavier surfacing than double bituminous surfacing over a prime coat. However, on some routes, a 2 in. premix bituminous surface will be required, and this has been allowed for in the estimates. DOH has some old premix surfacing equipment, at present operating in the South of the island, but a replacement will be financed under the credit. 2.16 At present, nominal 80/100 penetration bitumen is used for surfac- ing works and repairs. Heating and application rates are poorly controlled, and wet conditions make good work impossible for several months of each year. Repair of potholes and small areas of failure is badly carried out so that within a very short time the repair must be done again. The necessity to heat the bitumen in wood-fired boilers or even directly in drums reduces the amount of patching work that can be completed each day, and shortage of fire- wood is reducing outputs still further. Bituminous emulsion is produced locally, and it is intended to use this in place of straight bitumen at least for patching in order to improve outputs and the standard of work done. Engineers and laborers will have to be trained in the correct use of this material in order to obtain good results. GOSL will examine how the supply of bituminous emulsion can best be increased sufficiently to meet the antici- pated demand from the project, and technical assistance will suggest suitable specifications for its use in the project. 2.17 Sri Lanka is fortunate in having an abundance of good road-making materials in granite outcrops except in the extreme north around Jaffna. Quarry sites with little or no overburden can usually be found within a few miles, and the natural soils are usually reasonably strong and stable. Tradi- tionally, broken stone for roadbase has been produced by hand drilling, blast- ing and hand knapping to size. Hand knapping is satisfactory for larger sizes, but is very slow and expensive for surfacing size stone; i.e., below about one-inch size. In order to produce well shaped small sized stone in reason- able quantity, mobile granulators are required to supplement hand labor. These granulators must be small enough to be easily portable since large sized equip- ment would involve higher transport costs and require more labor in quarries than can usually be found within walking distance. Localized labor shortages may cause difficulties in obtaining even larger sized stone in some areas, and there would then be a reason to introduce primary crushing equipment. For the same reason, compressors and air drills may be needed in some regions. Small commercial quarries exist over most of the island, and although the increase in construction work has caused a threefold price rise around Colombo, com- mercial prices are often competitive with the cost of force account stone production elsewhere. Equipment to be supplied under the project includes a range of quarrying and crushing plant sufficient to give DOH an independent ability to produce stone for the project.  - 14 - 2.18 Obstruction of side drains is causing pavement deterioration in most built-up areas, and the severe side friction to traffic caused by intense development right up to the carriageway edge is bringing about high economic costs which cannot easily be reduced. If the value of investments in highway improvements are to be realized, Government will have to tackle the whole problem of encroachment onto the right-of-way and control access from road- side properties. In some cases, such as the Colombo-Galle road and parts of the Colombo-Kandy road, the only satisfactory solution now will be relocation of sections of the road to bypass built-up areas. Any move to improve con- ditions will, in the end, be ineffective unless the encroachment by roadside development onto the right of way can be halted. Legislation to control encroachment exists but has fallen into disuse and is not being enforced. GOSL is currently drafting new legislation designed to tackle the problem more effectively than at present, and it is hoped that this new legislation will be in effect by June 1980. 2.19 The commercial engineering contracting industry in Sri Lanka has been moribund for the last decade, and its present abilities are uncertain. However, in view of the amount of work that requires to be done in all areas, quite apart from highways, its revival would be beneficial, a fact which Gov- ernment now recognizes. For reasons already discussed, the capacity of DOH itself to undertake work will be severely limited for several years. Commer- cial firms have shown an interest to take part in highway projects, but it must be realized that contractors' output and work standards will be uncertain at the start. A few overseas contractors have made bids for housing develop- ment contracts, possibly as a means to establish themselves for other work they expect will come. A practical method of restarting domestic contractors would be to encourage associations with overseas firms as a means of introduc- ing expertise and equipment suited to the environment of Sri Lanka. DOH is circulating notices inviting contractors to prequalify, and the response to this invitation should be known by mid 1979. IDA has started discussions w.ith GOSL proposing a study with a view to developing the construction industry in the country. III. THE PROJECT A. Background 3.01 Over the past two decades, the road network has been steadily deteriorating. Based on the IDA transport sector review of 1966, the First Highway Project was formulated and was approved in 1968 but was later can- celled due to a changed Government which advocated changing the emphasis of the project towards new construction rather than rehabilitation. At the Government's request, the 1966 sector review was updated by an IDA mission in 1976 which concluded that there might be a high priority requirement for improved maintenance in the road sector. The project was identified in December 1977 and appraised in October 1978 with the help of two engineers financed by CIDA.  - 15 - B. Objectives 3.02 The main project objectives are to facilitate the transport of goods and passengers and to reduce road transport costs. The project is designed to: (a) restore portions of the road network and some bridges where deterioration is such that further maintenance efforts are fruitless, and arrest further general deterioration by a pro- gram of enhanced routine and perodic maintenance, utilizing limited mechanical equipment with proper quality control to give technically improved results; and (b) lay the foundation for improved planning of highway maintenance and execution of works in the future, based on better collection and analysis of traffic and cost data. C. Description 3.03 The project consists of: (a) rehabilitation and limited improvement of about 112 miles of road and resealing or resurfacing of about a further 150 miles; (b) improvement of routine and periodic highway maintenance; (c) strengthening, repair or replacement of about 30 bridges; (d) procurement of road maintenance and workshop equipment and spares; and (e) technical assistance. The locations of the road sections proposed for rehabilitation and of the bridges proposed for repair are shown on IBRD Map 14040. These sections were selected from a larger program proposed by DOH, on the criteria of obvious risk of complete failure and highest economic returns, overall size being limited by resources available. (a) Road Rehabilitation 3.04 Road rehabilitation is planned over about 112 miles of main routes in seven locations spread over the island. The work comprises selective widen- ing or realignment over short distances (except in one case where general relocation is to be investigated), provision of extra stone base over a total length of 66 miles with new surfacing, general improvement of shoulders and  - 16 - roadside drainage and repair of failed areas and single bituminous seal over 46 miles. It is proposed that 29 miles of extra stone base with associated surfacing and 46 miles of single bituminous seal will be completed by DOH, the remainder being done by contractors. Details of the work proposed are given in Table 4 and of equipment to be supplied in Table 6. Detailed pavement design will be completed by DOH, with the help of technical assistance to be provided under the project, and design work is in hand for about half the length of road proposed for rehabilitation. (b) Improvement of Routine and Periodic Maintenance 3.05 It would not be possible to reorganize routine maintenance country- wide and completely within the period of one project, but the capability of DOH to repair potholes and local pavement failures can and should be improved. A start has already been made by procuring small vibrating rollers which are used to compact pavement repairs. It is proposed to speed the process by financing training, light equipment and some materials so that material for pavement repairs can be produced on site and used more efficiently than by present methods. Enough equipment is proposed so that all 74 executive engineers' divisions and suboffices can be equipped with mobile hand sprayers and tampers before project completion, and staff will be trained in their correct use. In order to improve periodic maintenance practice, the Colombo- Kalutara district will be re-equipped and, with the help of technical assist- ance, reorganized to be able to carry out resealing and resurfacing correctly. The district will then act as a demonstration district to train staff from other parts of the country in improved work methods of periodic maintenance. Details of equipment to be supplied are given in Table 6. (c) Bridge Strengthening, Repair or Replacement 3.06 Thirty bridges have been identified where there is a danger of structural failure, often due to corrosion of metal deck parts, or where the structure is weak and so narrow or badly aligned that the bridge con- stitutes a significant traffic hazard. It is proposed that these will be repaired or replaced, usually using precast, prestressed units produced by SDCC. For most of the bridges in the program, DOH standard designs can be used, and design is complete for nine of the thirty bridges and in progress for most of the remainder. Design will be completed by the DOH Bridge Design Section, with the help of technical assistance to be provided under the project. Implementation of the bridge program will depend on the build-up of a new bridge construction section within DOH, and equipment is being provided under the project to speed this process (Table 6). Some bridges in the early part of the program will be constructed by SDCC, and those proposed for construction by contract later in the program will be offered to private contractors if the other commitments of SDCC limit its capacity for bridge works. (d) Procurement of Road Maintenance and Workshop Equipment and Spares 3.07 Operations of DOH are restricted by the fact that the vehicle and equipment fleet is old and in constant need of repairs. At present, workshops and depots operated by DOH are congested by many obsolete vehicles  - 17 - and items of plant which cannot be repaired or for which spares are no longer available. Their presence hinders work and restricts the covered space in workshops so that new items of equipment are often stored or repaired in the open. It has been agreed that all DOH equipment and vehicles beyond hope of economic repair will be disposed of by December 31, 1980. The work of DME is made more difficult by the great number of different makes and models in use so that lack of spares causes delays in repair completion of up to several years. Apart from equipment for routine highway maintenance, the project will re-equip one district (Colombo-Kalutara) with enough vehicles and plant to allow correct routine and periodic maintenance to be carried on. This will release the present plant and vehicles for use in other districts. The Colombo-Kalutara District does not have a workshop at present, and it is proposed to provide and equip suitable premises for a regional workshop on a site to be provided by GOSL. The site should be inland to avoid excessive corrosion of equipment and materials, and GOSL has confirmed that a suitable site for the regional workshop will be available by December 31, 1979. Details of the equipment items to be provided under the project are given in Table 6. 3.08 With the division of DME between DOH and DLLD, the present central workshops at Ratmalana will no longer be available for DOH use, but premises for a new DOH central workshop are available at Angulana, near Colombo. At present, there is a suitable building but without any equipment, there are no spares holdings, and there is no staff or control organization. It is proposed to provide some equipment and spares sufficient for initial servicing and repair of items procured under the project. Details of the items to be provided are given in Table 6. Spares for the existing fleet will be provided from the present stocks at Ratmalana, but these are inadequate, and approxi- mately US$200,000 has been allowed under spares and supplies to provide a larger spares stock at Angulana for the part of the existing fleet used in the project. (e) Technical Assistance 3.09 The changes in DOH and its executive arms which took place in the past several months make a substantial amount of technical assistance neces- sary if the project is to have a significant impact. A total of about 182 manmonths is proposed, at an estimated average cost of US$6,300 per man-month, including all allowances, and external travel. The team consists of a highway planning engineer (team leader), a highway and bridge design engineer, a mechanical engineer, a highway maintenance engineer (training specialist), a contracts engineer, a management and accounting specialist who will be a Sri Lankan national and a mechanical superintendent. The draft Terms of Reference given in Annex 1 have been agreed with GOSL. The team is designed to help DOH's transition from a planning and administrative body to an executive organization. The technical assistance will also help to bridge the staff shortage referred to in para 2.08. Of the 182 manmonths proposed, it is intended to provide up to 20 manmonths at a cost of US$140,000 to be retro- actively financed under the project, in order that work on preparation of contract documents and equipment procurement can be expedited. In the  - 18 - event that the response from contractors is not sufficient to carry out the rehabilitation work proposed for them (para. 3.04), it will be necessary to increase the work done by force account, which may involve an extension of the project period and will require extra equipment and technical assistance. The latter would comprise two site engineers and two mechanical superinten- dents, but the extra budget costs involved would be offset by the lower budget costs of carrying out work by force account. Details of the technical assist- ance proposed, as shown in World Bank Chart No. 20261, have been agreed with GOSL. 3.10 DOH is in the process of selecting a technical assistance team, and a condition of credit effectiveness should be that DOH will retain a suitable team, under terms and conditions satisfactory to IDA, for the successful imple- mentation of the project. D. Cost Estimates 3.11 The total cost of the project, is estimated at US$28.8 million equivalent with a foreign exchange cost of US$13.4 million equivalent (47%) and including a total for taxes and duties of US$3.8 million equivalent. Details are given in Table 7 and by year in Table 8. The following is a summary of costs:  - 19 - (SLRs million) (US$ millions) Item Local Foreign Total Local Foreign Total I. Equipment & Tools 5.55 74.06 79.61 0.35 4.69 5.04 II. Spares & Supplies 0.65 9.47 10.12 0.04 0.60 0.64 III. Materials 9.84 21.94 31.78 0.62 1.39 2.01 III. Local Staff 60.94 - 60.94 3.85 - 3.85 IV. Technical Assistance 1.75 16.45 18.20 0.11 1.04 1.15 V. Contract Works 51.82 50.98 102.80 3.28 3.23 6.51 Total I-V 130.55 172.90 303.45 8.25 10.95 19.20 Contingencies: (a) Physical 12.80 13.75 26.55 0.81 0.87 1.68 (b) Provision for Price increases: 39.98 25.12 65.10 2.53 1.59 4.12 TOTAL 183.33 211.77 395.10 11.59 13.41 25.00 Taxes and Duty: 59.20 - 59.20 3.75 - 3.75 GRAND TOTAL 242.53 211.77 454.30 15.34 13.41 28.75 3.12 A quantity contingency of 5% has been allowed on equipment and spares and 10% on all other items. For price increases, the following contin- gencies have been allowed: Local Costs Plant and Equipment Other Items 1978 not applicable 7.5% 9% 1979-80 15% 6% 7% 1980-83 10% 6% 7% Estimates for equipment and tools are based on mid-1978 bid prices received, updated to March 1979. Unit prices for works are based on DOH schedules of rates and analysis of items but revised where appropriate after comparison with other cost data and to allow for higher wage rates which have become necessary in many areas to give estimated March 1978 prices. In addition, a 25% allowance for marginal overheads and supervision costs has been added. Costs for plant and tools are made up of the cost of new equipment to be provided for the project plus an allowance of 2% of job cost for hand tools. Cost of spares similarly allow for the spares to be provided for new equip- ment plus an allowance for extra spares for the existing fleet to be used on  - 20 - the project (para 3.08). Cost of fuel is included in the materials element of unit rates. The estimated cost of contract work is based on unit rates, estimated as for DOH work but with a 100% allowance for overhead, plant depreciation and profit. Unit cost data has been built up from input costs and estimated productivities, as assessed by the CIDA technical assistance team and the appraisal mission, but since cost data for contract work is almost non-existent in Sri Lanka, there is a probability of error in this element. Should it become necessary to carry out all work by DOH, the budget- ary decrease (about US$2.0 million) would be largely used up in extra technical assistance required (approximately US$0.8 million) and extra equipment amount- ing to about US$0.9 million, and there would then be some reallocation as between local and foreign costs. E. Execution of the Project 3.13 Execution of the project will be the responsibility of DOH assisted by the technical assistance team. DOH will operate through district chief engineers for force account highway rehabilitation, for minor bridge works and for general supervision of contract works. Major bridge works will be done by SDCC initially and thereafter by DOH's reconstituted bridge section or by contract supervised by chief engineers, while a part of road rehabili- tation will be done by contract (Tables 4 and 5). Equipment operation and repair will be handled by DME initially until DOH has equipped and set up its own organization. The project represents an additional workload on DOH and chief engineers of about 20% over that which has been carried in recent years, assuming the the Government budget for highways continues at its present level. As the individual rehabilitation works and bridge constructions are each of relatively low value and as individual works are scattered, the work would probably not be attractive to international contractors. Furthermore, the relatively simple nature of the work means that joint ventures are also unlikely. As far as the domestic construction industry is concerned, private contractors have been largely inactive during the last decade except for a small amount of building work. There are still some half dozen large firms, plus a number of smaller ones, who wish to become active again, but they now lack modern equipment and recent experience. Invitations to prequalify are being circulated by DOH, and there has been an initial response from about 35 firms of various sizes. However, if there is not sufficient response from competent contracting firms, tOrCe dCCUUnlL uy DOll wiii iladve LO be useu ior the part of the road rehabilitation now proposed for contract. It is expected that a proposed UNDP financed study into the Sri Lanka construction industry may encourage a better response to bid invitations. 3.14 The physical execution of the project is planned to commence in the last quarter of 1979 and to be completed in four years. The first year will be spent in engaging technical assistance, ordering equipment, completing design of project works, inviting, receiving and evaluating contractors' bids for rehabilitation works, setting up mechanical workshops and training. Some preparatory force account highway rehabilitation will commence, principally the production of crushed stone, and SDCC will continue with their bridge replace- ment program, including some bridges under the project.  - 21 - 3.15 In the second year of the project, equipment will have arrived; and force account rehabilitation work in Anuradhapura, Trincomalee and Ratnapura districts can commence. Contract work will also commence in Year Two, details of location and contract sizes having been decided during Year One with the help of the technical assistance team. The demonstration highway maintenance district at Colombo-Kalutara will have been set up by this time, and the resealing and resurfacing program will commence. 3.16 The main construction and rehabilitation program will extend over about three years. At the end of the project period, two major works (the Bentota bypass and improvement of about 5 miles of the Colombo-Kandy road at Kadugannuwa) will have been investigated and designed, and a sum has been allowed in the cost estimates to be used either for land acquisition and preliminary works on a new alignment, or for improvement of the existing road. Should new alignments prove feasible, their construction would form suitable components for financing under a follow-on project which would include, inter alia, continuation of road and bridge rehabilitation and the extension of improved maintenance to other parts of the island. 3.17 As a first step towards better maintenance islandwide, it is in- tended to provide sufficient equipment to allow improved repairs of potholes and local failures in all regions. The equipment will consist of small plate compactors and bituminous emulsion handsprayers, pick-up trucks to give better coverage of the road network and portable granulators to provide sufficient small-sized crushed stone for routine repairs. Training at region level will be given in correct methods of pavement repair, and it is expected that the improved methods introduced will help to arrest further deterioration until complete rehabilitation becomes possible. An outline implementation schedule, which has been discussed and agreed with DOH, is shown in World Bank Chart No. 20262. F. Project Monitoring and Planning 3.18 Institution building is of primary importance to the project and is made even more urgent by the recent changes in DOH organization. It is planned within the project to create a capability for DOH to: (a) monitor the economic, engineering and social aspects of the project; (b) plan and design highway and bridge rehabilitation and improvement effectively and efficiently; (c) set up and run its own mechanical equipment and spares organization; (d) plan and operate highway maintenance according to the needs of traffic and highways, to include logical budget programming; and  - 22 - (e) improve costing and cost control procedures as an aid to better forecasting of expenditures. Initially, these tasks including monitoring will be principally undertaken by the technical assistance team together with their Sri Lankan counterparts. Close liaison will be necessary with other Ministries, upon whom reliance must be placed during the first part of the project, at least, for servicing mechanical equipment and for bridge construction. GOSL will arrange that the services and resources necessary for the project from sections of Government other than DOH will be forthcoming as required (para 2.07). 3.19 The assumptions used in pavement design, cost estimates and eco- nomic analysis must be monitored and confirmed, with the help of technical assistance. In particular, recent traffic counts are necessary to confirm the economic analysis results, subgrade testing must be continued to confirm the depth of extra base or overlay required, and updated local cost data used to refine estimates of project costs. As there has been very little useful cost experience for highway construction in Sri Lanka over the past ten years especially in regard to contract work, it is to be expected that bids will be subject to wide variations of price. 3.20 In the context of Sri Lanka, one of the main benefits of project monitoring will be the opportunity to improve highway maintenance planning and to reduce the risks presently associated with this operation. Project monitoring and reporting requirements, as shown in Annex 2, together with the need for GOSL to prepare a Completion Report not later than six months after the Closing Date of the Credit have been agreed. G. Procurement 3.21 Equipment, materials and supplies will be procured on the basis of international competitive bidding procedures with a 15% preference, or the import tariff amount, whichever is the less, allowed on locally assembled items in accordance with IDA's "Guidelines for Procurement." Items costing under US$50,000 equivalent and with a total not exceeding US$200,000 would be procured with GOSL's normal procedures after bids have been received from at least three suppliers. IDA will review all contracts and related documentation for goods and civil works estimated to cost US$100,000 equivalent or more before an award is made. Contracts for construction or rehabilitation work should be awarded on the basis of international competitive bidding procedures with a 7-1/2% preference allowed to local contractors in accordance with IDA's guidelines. However, contracts for civil works costing less than US$50,000 equivalent each may be awarded on the basis of local competitive bidding in accordance with procedures acceptable to IDA. Conditions of contract for the construction of civil work and specifications will require to be modernized and revised. Improved general conditions of contract, such as those proposed by FIDIC, should be adopted as the basis for use in Sri Lanka and existing specifications for works be reviewed and revised by Government, assisted by  - 23 - the technical assistance team. It has been agreed that the form of contract and specifications for works in a form acceptable to IDA will be finalized by December 31, 1979 for contract works. Other construction and rehabilitation works will be carried out under DOH procedures. Selection of consultants for technical assistance will be in accordance with IDA'S "Guidelines for the Use of Consul'ants." H. Financing and Disbursements 3.22 The proposed credit of US$16.5 million will finance about 57% of total project costs, that is, all foreign costs and about US$3.1 million of local costs. The remaining local costs, amounting to about US$8.5 million equivalent, plus taxes and duties of about US$3.75 million equivalent, would be met by GOSL. GOSL has agreed that adequate and timely releases of funds will be made in accordance with the implementation schedule for the successful completion of the project and that any increase in the cost of the project, foreign or local would be borne by GOSL. Disbursements from the proceeds of the Credit account will be made on the following basis: (a) 100% of foreign expenditure and 50% of local expenditures for equipment, tools, spares and supplies and construction materials; (b) 100% of expenditure for technical assistance;and (c) 100% of foreign costs or 75% of total costs for civil works done by contractors. Expenditures on technical assistance, subsequent to March 1, 1979 are to be retroactively financed by IDA in the first year of the project and would amount to, at maximum, US$140,000. Based on the Implementation Schedule (World Bank Chart 19872), a Schedule of Estimated Disbursements (Table 9) has been prepared. IV. ECONOMIC EVALUATION A. Sources of Benefits and Beneficiaries 4.01 The proposed project will stop and reverse the deterioration of the road network. In the past, the road network has been steadily deteriorating due to insufficient allocations for maintenance and improvements, and it has now reached the stage at which many sections of road require rehabilitation and improvement and maintenance work methods require reassessments. Further deterioration of roads would result in serious transport capacity constraints  - 24 - as the principal means of transport in the country is by road. The objectives of the project (para 3.02) aim to facilitate the transport of goods and passengers and reduce transport costs. The benefits of the project will arise from: (a) improvement of the road surface and avoidance of further deterioration as a result of road rehabilitation, plus protection of the investment already made in roads; (b) improvement of the road surface and reduction in main- tenance costs as a result of improved routine main- tenance; (c) avoidance of bridge closures and possibly of catastrophic accidents due to bridge failures, plus some reduced vehicle operating costs as a result of bridge replacement and repairs; (d) improved periodic maintenance as a result of the proposed demonstration district, leading to similar benefits to those of (a) above; (e) higher availability and utilization of equipment as a result of provision and equipping of workshops; and (f) improvement of DOH planning and management, as a result of the technical assistance which will also ensure quicker implementation, leading to earlier accrual of benefits. The benefits arising from road and bridge rehabilitation and improved mainte- nance (a) through (d) above have been estimated, although results must be considered approximate in view of the lack of reliable historic data on costs, traffic and economic parameters in Sri Lanka. Benefits from workshops and technical assistance are more difficult to estimate although no less real. Their costs have been added to other project costs but without ascribing any direct benefits, when estimating rate of return of the project as a whole, on the grounds that without them, project implementation would be less likely. 4.02 Since the trucking industry is important for distributing industrial raw materials, collecting tree crops for exports and transporting imported foodgrains, benefits from the project execution would be shared by the general public. It is a characteristic of the population in Sri Lanka that all classes are highly mobile and that the dominant mode of passenger transport is by SLCTB. GOSL recognizes this fact and has endeavoured to keep bus fares dowrn to a level that can be afforded by almost the entire population. Buses typically make up about 25% of the total traffic flow, and to that extent, benefits in the form of reduced vehicle operating costs accrue to SLCTB and hence to the population in general. The emphasis in the road and bridge rehabilitation program is on rural, rather than urban, routes, which have been selected on the basis of highest relative priorities in all parts of the island in order to reach as  - 25 - large a proportion of the population as possible and to increase economic activity at the national level. B. Costs and Benefits 4.03 Traffic volumes and growth on the road network are estimated on the basis of traffic counts carried out in 1972 and 1975. Based on the above counts, average daily traffic in 1978 on individual road sections are esti- mated. Average traffic composition is assumed as 40% cars, 35% trucks and 25% buses on the basis of DOH and mission's observation. Average annual traffic growth is estimated at 7% based on anticipated economic growth and increased availability of vehicles. Costs of construction and rehabilitation have been estimated as outlined in para. 3.12. Although these costs are estimated net of direct taxes and duties, unit costs used in the economic analysis have been reduced by 10% to allow for the effects of indirect taxes. Vehicle operating costs and savings are estimated on the assumption that as a result of road rehabilitation and improved maintenance there will be no increase in speeds and no change in fuel consumption, but only a reduction in costs of repairs and tirewear due to improved surface condition. Benefits from the bridge re- building program are estimated as the costs which will not be incurred if a planned program of repair and replacement takes place rather than unplanned replacement following closure or collapse of existing bridges. Analysis methodology is outlined in Annex 3. 4.04 The road rehabilitation program covers 262 miles of road of which 112 miles would be rehabilitated and improved and further 150 miles would be resealed or resurfaced in order to accomodate present and future traffic. Traffic on road sections is 100-3,000 vpd depending upon the location. The work would be carried out during the period from 1980-1982. Benefits would be savings in transport costs from improved road conditions. Economic eval- uation shows that the rehabilitation program would be well justified. Based on a program period of four years and an economic life of 10 years, this project component would yield economic returns of 15-86% for individual works and a weighted average economic return of 29%. 4.05 The maintenance program consists of routine maintenance concentrat- ing on the reduction in the amount of potholing and edge ravelling over roads spread island-wide plus resealing and resurfacing. Assuming average traffic flows on roads affected and an economic life of 10 years, this project com- ponent would yield average economic returns of 40 to 56% for the various components. The maintenance program would be well justified. 4.06 The bridge replacement program covers replacement or major repair on about 30 bridges. The estimated cost of this component is Rs 47.6 million, or an average of Rs 1.6 million per bridge. The alternative to replacing the bridges in a planned manner is to wait until they collapse or have to be closed, thus requiring traffic diversion involving an extra distance of, say, 20 miles prior to construction of temporary bridges (Bailey) for six months. Assuming average traffic to be 400 vpd over these bridges, giving additional  - 26 - vehicle operating cost of Rs 224,000 per bridge and that 10 of the 30 bridges would collapse within the first three years, a further 10 within the next two years and the remainder within five years after that (requiring stock of cor- responding number of Bailey bridges for each year), the extra costs of the Bailey bridges would amount to Rs 110,000 per bridge. In addition, it is assumed that there is 10% chance with each bridge of a serious accident, costing Rs 600,000 per accident, due to unexpected collapse. On this basis, over a ten-year analysis period, the bridge replacement program would yield an economic return of about 45%. C. Conclusions 4.07 Overall economic evaluation incorporating costs of workshop equip- ment and technical assistant components, to which no specific benefits have been ascribed, shows implementation of all project component is well justified and appropriately timed. The overall project rate of return is estimated at 36%. The economic returns for each major project component and their sensi- tivity to variations in costs and benefits are shown below: Internal Rates of Return (%) 15% Cost 15% Cost Increase Component Best Estimate Increase 25% Benefit Decrease Road Rehabilitation 29 25 18 Maintenance operations Routine 56 50 30 Resealing 51 43 34 Premix Carpet 40 32 26 Bridges 45 13 -1 Weighted Average 36 30 21 4.08 The principal risks associated with the project execution concern DOH's administrative caoabilitv and the nossihilitv of poor aualitv workman- ship, especially with new methods, which would lead to failure or quicker than estimated deterioration of new work, with consequent reductions in benefits. Technical assistance has been planned to remove these risks as far as possible. Errors in analysis may arise from incorrect assumptions of present average daily traffic flows and cost estimates due to the scarcity of data. It is intended to carry out traffic counts on all project roads and reassessment of cost estimates in advance of major works to check that no serious overesti- mates have been made. In view of the high sensitivity of the bridge component to cost fluctuations, each structure will be subjected to reanalysis before work is finally planned.  - 27 - V. AGREEMENTS REACHED AND RECOMMENDATIONS 5.01 During negotiations, agreement was reached on the following prin- cipal matters: (a) Review DOH staffing, and provide IDA by December 31, 1979, with a specific program and timetable for its strengthening, and thereafter carry out the said plan (para 2.08); (b) Preparation by December 31, 1982, of a five year highway investment program acceptable to the Association (para 2.10); (c) Preparation of a logical highway maintenance improvement program by June 30, 1980, with agreed increased highway maintenance funds (para 2.11); (d) Disposal of all unserviceable DOH vehicles and equipment which are beyond hope of economic repair by December 31, 1980 (para 3.07); and (e) General conditions of contract and specifications to be modernized, revised and agreed by December 31, 1979 (para 3.21); (f) Timely release of funds to DOH for the project, and any increases in cost to be borne by GOSL (para 3.22). 5.02 A condition of credit effectiveness will be that DOH will retain the services of a technical assistance team (para 3.10). 5.03 The project provides a suitable basis for an IDA Credit of US$16.5 million equivalent to GOSL.  - 28- ANNEX 1 Page 1 SRI LANKA A ROAD MAINTENANCE PROJECT Draft Terms of Reference for Consultancy Services I. Introduction and Background 1. The Government of Sri Lanka intends to carry out a highway and bridge maintenance and rehabilitation project of four years' duration. Appli- cation has been made to the International Development Association (IDA) of the World Bank for financial assistance with the project, and appraisal has taken place. In order to assist implementation of the works planned under the project, Government wishes to retain the services of properly qualified and experienced consultants to carry out certain works, as described herein. The principal components of the proposed IDA credit would be: (i) rehabilitation and limited improvement of about 112 miles of main roads and resealing or resurfacing of about a further 150 miles; (ii) improvement of routine and periodic highway maintenance; (iii) strengthening, repair or replacement of about 30 bridges; (iv) procurement of road maintenance and workshop equipment and spares; and (v) technical assistance. The work to be done under such a project is distributed throughout the island of Sri Lanka. Terms of Reference for Consultancy Services 2. Sri Lanka has had for a number of years a relatively extensive high- way network, developed originally to serve the needs of the plantations and to bring produce to the ports. The road system now totals about 15,500 miles, of which about 11,200 miles are paved. There are also about a further 10,000 miles of road built and maintained by and for specific irrigation and estate schemes. Most roads were built many years ago and have since had few im- provements and until recently very limited maintenance. Hence, the roads are characterized by narrow widths, sharp curves, steep gradients in parts, poor sight distances and uneven surfaces. Many bridges are narrow and sometimes their structural condition is poor. Although matters are now improving, the present vehicle fleet is on the average old. Average traffic speeds are low due to intense roadside development in many areas and to very mixed traffic composition.  - 29 - ANNEX 1 Page 2 3. Roads and bridges are built and maintained by the Department of Highways (DOH) in the Ministry of Power and Highways. Recent reorganizations have left DOH short of adequate professional staff and with the need to re-establish a bridge construction section and a headquarters workshop, spares supply and administrative organization to service the vehicle and equipment fleet of DOH. Vehicles and equipment are in short supply, and the fleet is mostly old, consisting of a variety of makes and models. II. Objective and Scope of the Consultancy Services 4. The objective of the consultancy services is to assist DOH with implementation of the project. In order to attain this objective, the con- sultants shall cooperate fully with Government in all respects and will work with the counterparts to be provided by Government. Government will also provide the data and services outlined in Section V hereof. The duties of the consultants will include, but will not necessarily be limited to, the work detailed in paragraphs 5 to 16 following. 5. Review of contract documents and specifications for road works. Contract documents and specifications for road works have been little used in Sri Lanka for the past decade, and now require review and possible revi- sion before road works can be carried out by private contractors. The con- sultants are to examine existing contract documents and specifications and, in agreement with DOH, prepare revised versions suitable for use under the proposed project. 6. Prequalification and review of contractors. There has been no road works carried out by private contractors recently, all work having been done by the State organizations. However, there are a number of domestic firms who previously had the ability to carry out civil engineering construction works and who wish to do so again, given the opportunity. It is expected that prequalification questionnaires will have been issued to interested firms, and the consultant will be required to review the responses to the questionnaires, advise on suitable prequalification criteria and suggest measures (if necessary) that will be needed in order to revitalize the domestic contracting industry. 7. Assistance with bridge and pavement design. The DOH bridge design practices favor generally solid mass concrete abutments on caisson founda- tions, usually with precast prestressed deck beams. There is the possibility to revise design methods so as to produce more economical pier and abutment designs and shorter construction periods. Soil subgrade testing is little used at present, although there is a reasonably well equipped central soils and materials laboratory near Colombo and enough equipment to set up a number of smaller regional laboratories. The consultants will be expected to advise the bridge design section on possible improved bridge design methods, organize and assist in supervision of soil foundation testing bridge foundations and pavement design, assist with commissioning of regional soils laboratories and with the training of laboratory staff and assist with quality control during construction.  -30- ANNEX 1 Page 3 8. Vehicle and equipment procurement. The proposed project will include a component for the procurement of vehicles, construction and road maintenance plant, workshop equipment and spares. At present, DOH does not have a fully equipped central workshop to support its regional workshops, and the proposed project will equip such a central workshop and set up a stores and administrative organization within DOH to service the fleet. The consul- tants will advise DOH on details of the appropriate vehicles and equipment to be procured, compile specifications for supply, advise on suitable spares holdings and procurement, prepare invitations to bid and advise on the evalua- tion of bids received. 9. Improvement of workshop facilities. As well as equipping the central workshops, it is intended to construct and equip a smaller regional workshop to service the proposed demonstration road maintenance district. The consultants will advise and assist DOH in the design of the regional workshop, assist with the installation and commissioning of the equipment procured, advise on the organization of workshop and stores procedures and implement a suitable staff training program. 10. Preparation of road rehabilitation contracts. After consideration of contractors' prequalifications, the consultants will advise on suitable sizes of contract lots for bidding, review designs, finalize contract doc- uments and specifications, produce invitations to bid and advise on the evaluation of bids received. In the event that there is insufficient response from contractors, domestic or overseas, the consultants may be asked to advise and assist with suitable alternative methods to carry out the work necessary and to suggest resources necessary to do this. The consultants will advise on contract supervision and monitoring of progress of the works. 11. Assistance with force account work. A portion of the road and bridge rehabilitation program will be carried out by force account. The road work will consist mainly of improvement to drainage, provision of additional base and surfacing. Although DOH has experience of this type of work, the consultants will be required to review designs and assist with the organiza- tion and management of the works, to include the improvement of work methods and use of mechanical equipment, detailed pavement design procedures and introduction of effective quality control. In the bridge rehabilitation program, the consultants will be required to review designs, including giving advice on the techniques of piled foundations, assist with organization and supervision of construction and assist in setting up and operating a new casting yard to produce spun pipes and precast, prestressed bridge beams. 12. Planning and organization of a demonstration road maintenance dis- trict. The proposed project would includes a component setting up and equip- ping one district to carry out periodic maintenance (resealing and resurfac- ing) in a satisfactory manner, this district to act as a training focus from which improved periodic work methods can spread to other districts. It is also intended to introduce better work methods in routine maintenance through- out the island to the extent of providing equipment to allow proper repair of potholes and local failed areas, probably using bituminous emulsion in place of straight bitumen. The consultants will be required to advise on  , I ZA - 31 - Page 4 the organization and setting up of these operations, suitable specifications, the scale and types of equipment to be procured, and suitable training methods to reach all levels of the labor force, and to assist in the general implemen- tation of the program. 13. Assistance with highway investment planning and maintenance plan- ning. The consultants will be required to assist with preparat-in of a highway investment program. The program will probably cover a five year period and is to be prepared by December 1982. The consultants will also be required to assist DOH to prepare, by June 1980, a logical highway main- tenance improvement plan, including cost estimates, which will be designed to bring highway maintenance in Sri Lanka to reasonable levels within a period of five years. 14. Improvement to DOH planning capabilities. Although a planning section exists in DOH, there have been very few traffic surveys carried out recently, and data for analysis of projects is scanty. The consultants will advise and assist DOH to improve their traffic counting program, to carry out traffic surveys for specific projects where necessary (including those pro- posed for this project), to collect reliable cost and economic data relevant to highway projects and to analyze suggested projects as a means to improve overall highway planning. The consultants will assist DOH in the development of costing and cost control procedures for use in budget preparation, estimat- ing and economic analysis. 15. Review of regulations affecting highways. Movement of traffic on many roads in Sri Lanka is hindered by encroachment on the right-of-way and by many aspects of traffic behavior. The consultants will be prepared to assess the present legislation affecting highways and highway traffic and make suitable suggestions for its amendment or for improved enforcement. 16. Assistance with progress and completion reports. The consultants will assist DOH with the production of progress and completion reports in respect of the project. These reports will be designed to monitor the engi- neering, economic, and environmental effects of the works performed, and the consultants will assist in the evaluation of these effects. III. The Project Team 17. It is expected that the project team will include the following: (i) Team Leader who will be an experienced professional highway engineer with a wide knowledge of highway planning, design, construction and maintenance under conditions similar to those found in Sri Lanka. He should have experience of setting up and running a highway organization and be familiar with general administrative and financial procedures;  - 32- ANNEX 1 Page 5 (ii) Mechanical Engineer who will have sound professional training and will have had experience of organizing and running mechan- ical equipment workshops under conditions similar to those found in Sri Lanka. He should have also had experience in equipment procurement so as to be able to advise on suitable specifica- tions for new plant and equipment to be procured. He should have had some experience of training mechanics and operators under working conditions; (iii) Mechanical Superintendent to assist the mechanical engineer in the setting up and operation of the workshops and spares control systems. He should be experienced in work of a similar nature and have a background of workshop organization and administration dealing with vehicles and heavy equipment; (iv) Highway Maintenance Engineer who will be professionally qual- ified engineer having sound experience of the organization and operation of highway maintenance under tropical conditions. As an important part of his work will deal with training and the introduction of new methods to the work force, he should have had experience of and an interest in education and train- ing, especially in-service training of middle- and lower-level management. He will be responsible for the introduction of suitable training methods, with training aids as necessary, to spread knowlege of new work methods to highway maintenance staff throughout Sri Lanka. (v) Pavement and Bridge Design Engineer who will assist and advise with the introduction of more effective materials testing as an aid to pavement and bridge foundation design, advise on bridge foundation and pavement design procedures, and maintain correct quality control throughout construction. He should have had experiecne in the organization and running of materials laboratories under tropical conditions and also have had prac- tical experience of pavement design and highway and bridge construction methods; (vi) Contracts Engineer who will be required to advise on necessary revisions to the Pyiting c,nftrnet dner,mpTntq snd ,npci fcations for works to be done under the contract, and later to assist and advise DOH Chief Engineers, who will supervise contract works, in the running and control of these works. He should have had experience in drafting contract documents for works of a similar nature and have been engaged in contract super- vision under conditions similar to those in Sri Lanka. It may be possible to combine these activities with those of the pavement and bridge design engineer or of the team leader if these members of the team are suitably qualified.  33A ANNEX 1 Page 6 (vii) Management and Accounting Specialist who will probably be locally recruited. He should be professionally qualified and be familiar with local accounting and managerial pro- cedures both within and outside Government. He will be required to suggest suitable means to improve and simplify coi:trol of works progress and costs so that causes of delays can be quickly identified and cost data become available in time to highlight possible cost overruns and for use in compiling budget estimates. 18. The consultancy services are expected to cover a period of about four years overall, but all team members will not be required for the entire period, total coverage being in the region of 180 manmonths. The consultants should plan to replace their services with those of local staff as quickly as possible, consistent with effective project implementation, and should be prepared to revise their coverage accordingly, whenever, after consultation with DOH, it is decided that DOH staff are able to undertake the work. The consultants' staff will be expected to operate full time on the project while they are in Sri Lanka. IV. Reports 19. Progress reports (10 copies to Government, 4 copies to IDA) will be submitted at monthly intervais, covering the previous month's activities. These progress reports will be kept short and factual, highlighting the progress made and difficulties encountered in the various parts of the assign- ment detailed in Section II hereof. At the end of the third month, the pro- gress report will include a summary of the assignment to date, a review of any unexpected difficulties met and suggestions for any changes considered desirable in the terms of reference or the work program as previously planned. At the conclusion of the assignment, the consultants will submit a brief final report outlining the progress made and making suggestions for any future technical assistance program. V. Data, Local Services and Facilities to be Provided by the Government 20. The Government will provide the consultants with all available data and information held by DOH and considered necessary for the consultants' work. DOH will also use their best endeavors to obtain data held by other organiza- tions, whether Government or not, which it is considered necessary and desir- able for the consultants to use. 21. The Government will assign a full time project coordinator to liaise between the Government and consultants, and will assign counterpart staff to work with the consultants' team as possible and necessary.  ANNEX 1 - 34 - Page 7 22. The Government is to provide the following facilities to enable the consultants to carry out the assignment: (i) suitably furnished office accommodations including utilities and a telephone, but consultants will be expected to provide office equipment and supplies; and (ii) office support staff, but not including an office manager or accountant. The Government will assist and guide the consultants in locating satisfactory and appropriate living accommodations for their staff.  35 ANNEX 2 SRI LANKA A ROAD MAINTENANCE PROJECT Project Reporting Requirements 1. At the conclusion of each three month period, the Government will prepare a progress report covering the work done on each of the components of the project to date and detailing actual and anticipated progress, actual and estimated costs for the work completed and disbursements from the credit com- pared with those estimated in Table 9 of the appraisal report. The report will highlight causes for delays, if any, with measures proposed to overcome them, and it will anticipate any changes that appear to be necessary in the project competion date, the credit closing date or the project costs. The reports will also include the results of traffic counts and pavement and soils surveys taken to confirm designs and design estimates and economic evaluation, and will detail any changes in design, cost estimates or economic evaluation that result. Details will be given of plant, vehicles and equipment that has been ordered or received during the reporting period, with reasons for any changes that have been made in the project estimates of items to be ordered, and data will be given on the location, utilization and availability of vehicles and equipment supplied under the project. Two copies of the quarterly report will be sent to IDA through the Bank's office in Colombo within six weeks of the end of each reporting period. 2. Within six months of the completion of the project, Government will submit to the Association, a Project Completion Report on the execution and initial operation of the project, its costs and the benefits derived or expected to be derived from it, an assessment of the performance by Government and by the Association of their respective obligations under the Credit Agreement and the accomplishment of the purpose of the credit. Details of the contents and requirements of the Project Completion Report will be discussed and agreed during negotiations.  ANNEX 3 Page 1 SRI LANKA A ROAD MAINTENANCE PROJECT Methodology Used in Economic Analysis 1. In carrying out analyses, the following assumptions were used: (a) Average traffic composition is 25% buses, 35% trucks and 40% cars, with a uniform 7% per annum growth rate; (b) Cost of the average car is SLRs 75,000 and average age is 80,000 km; cost of the average truck is SLRs 166,000 and average age is 250,000 km; cost of the average bus is SLRs 200,000 and average age is 400,000 km; (c) After resealing and pothole repairs, the surface roughness 'r' 1/ will reduce to and remain at 2,400 mms/km. If work is not done, it is assumed that 'r' will rise to 5,000 mms/km, with an average value of 4,000 mm/km; (d) After addition of new base, there will similarly be a reduc- tion from an average 'r' of 7,000 mms/km to 2,400 mms/km; (e) Use of a premix carpet in place of double bituminous surface treatment (DBST) will reduce the 'r' value to 2,000 mms/km in either case; (f) Resealing will be necessary after 500,000 vehicles or seven years life, whichever is less; (g) The maintenance operations proposed will cause no increase in average speeds. Benefits will accrue only from reductions in costs of parts and labor used in maintenance and in tire wear, as estimated from UK TRRL LR 723, Tables 41 through 48; and (h) Benefits will be the same for all road widths; cost will differ according to road width. 1/ 'r' is a measure of the total vertical movement of a standard wheel relative to its frame when towed at 30 Kph over a section of road. The values given here are typical for the conditions described. Metric units are used to correspond with UK Transport and Road Research Labora- tory (TRRL) publications.  ANNEX 3 Page 2 2. On these assumptions, the following tables are calculated: Changes in Vehicle Operating Costs with Surface Roughness (in SLRs Per Mile) 'rl Parts Labor Tires Cars (Rs 75,000 New Cost) (@ Rs 4/hr) (@ Rs 1,200) 2,000 1.26 0.873 0.033 2,400 1.84 1.190 0.056 4,000 4.14 2.229 0.149 7,000 8.46 3.239 0.323 Trucks (Rs 166,000 New Cost) (@ Rs 4/hr) (@ Rs 1,600) 2,000 3.05 8.60 0.105 2,400 3.42 9.52 0.110 4,000 4.90 13.05 0.128 7,000 7.68 19.24 0.161 Buses (Rs 200,000 New Cost) (@ Rs 4/hr) (@ Rs 1,600) 2,000 0.34 0.83 0.105 2,400 0.52 1.19 0.110 4,000 1.09 2.55 0.128 7,000 2.23 4.85 0.161 Whence: For Resealing ('r' 4,000 to 2,400) Benefit for Average Vehicle = 0.25 x 0.148 + 0.35 x 0.284 + 0.40 x 0.289 = Ks 0.406 per mile For Extra Base with DBST ('r' 7,000 - 2,400) Benefit for Average Vehicle = 0.25 x 0.438 + 0.35 x 0.828 + 0.40 x 0.899 = Rs 1.214 per mile For Extra Base with Premix Carpet ('r' 7,000 to 2,000) Benefit for Average Vehicle = 0.25 x 0.486 + 0.35 x 0.910 + 0.40 x 0.980 = Rs 1.331 per mile Hence, for various widths and operations, the following are derived, all costs and benefits in SLRs 1,000s: Reseal and Repair Potholes ('r' 4,000 to 2,400): Annual benefits at Rs 148.2 per mile for each vehicle per day of average traffic, with 7% annual traffic growth:  - 38 - ANNEX 3 Page 3 Capital Benefits at Vehicles per Day (vpd) Year Cost per mile 50 100 200 300 400 600 0 12' wide: 47.52 16' wide: 63.36 18' wide: 71.28 22' wide: 87.12 1 7.41 14.82 29.64 44.46 59.28 88.92 2 7.93 15.86 31.72 47.58 63.44 95.16 *Allow cost of first reseal 3 8.48 16.97 33.94 50.91 67.88 101.82 4 9.08 18.16 36.32 54.48 72.64 08.96MAllow cost of second reseal 5 9.72 19.43 38.86 58.29 77.72 116.58 Allow cost of 6 10.40 20.79 41.58 62.3 83.16 24.74)pthird reseal 7 11.12 22.24 44.48 66.72 88.96 133.44 Allow cost of 8 - 11.90-23.80'47.60 71.40 -95.20 42.80fourth reseal 9 12.73 25.46 50.92 76.38 101.84 152.76 10 13.63 27.25 54.50 81.75 109.00 63.50 Residual Value: (as 50% 50% 50% 0% 50% 0% percent of capital cost) Internal Rate of Return: 12' wide 7.5 t 32.2 67.8 98.9 127.0 168.1 16' wide negative 20.9 50.8 74.2 93.0 125.5 18' wide negative 16.5 44.8 65.8 82.4 111.5 22' wide negative 9.1 35.5 53.0 65.5 91.5 non-viable viable No annual routine maintenance costs are included, as it is estimated they will be similar with and without the operation. Similarly, for other operations over a 10-year analysis period, internal rates of return for various road widths are estimated as follows (in percent): Provide 4" Stone Base and DBST with Shoulder Improvement Cost (Rs 1,000/mile) 100 200 300 400 vpd 12' wide 237.6 15.7 41.6 57.2 79.7 16' wide 291.6 10.1 33.5 46.2 65.1 18' wide 317.6 7.9 30.5 42.2 59.8 22' wide 372.6 3.9 25.1 35.2 50.7 24' wide 398.7 2.3 23.0 32.6 47.1  ANNEX 3 -39 - Page 4 Provide 4" Stone Base and Premix Surface with Shoulder Improvement Cost (Rs 1,000/mile) vpd: 100 200 400 1,000 1,500 3,000 12' wide Rs 556 5.4 18.5 39.7 94.2 138.0 369 16' wide Rs 686 1.9 13.6 32.0 77.4 113.1 219 18' wide Rs 748 0.6 11.7 29.2 71.3 104.2 202 22' wide Rs 882 -ve 8.4 24.2 61.2 89.3 172 24' wide Rs 945 -ve 7.1 22.3 57.3 83.8 161 Taking weighted averages for the components of the various operations in the road sections proposed for rehabilitation (weighted according to cost), the Internal Rates of Return for the different sections, shown as Map 14040, are: Road Section No. IRR (%) (from Table 4) 1 38 2 13 3 38 4 66 5 77 6 58 7 (depends on design and alignment) The weighted average of all rehabilitation sections is estimated at 29%. For routine maintenance, repair of potholes and edge ravelling is estimated to reduce surface roughness from 4,000 to 2,400 mms/km. Average traffic on all rural roads is assumed at 100 vpd. With a total cost of US$3.2 million for this component, the estimated rate of return is 56%. Costs and benefits for the proposed bridge repair program are estimated as outlined in para 4.06 of the appraisal report, and the economic analysis is as follows, giving an estimated IRR of 45%:  - 40 ANNEX 3 Page 5 Erection Planned Bailey Bridge & Traffic Bridge Total Program Capital Maint. Accident Diversion Rebuilding Cash Year Costs Cost Cost Cost Cost Cost Flow (1) (2) (3) (4) (5) (6) (7) (8) 1 15.7 13.6 0.4 0.28 0.75 6.20 +5.53 2 20 0.4 0.28 0.75 6.20 -12.65 3 20 0.4 0.28 0.75 6.20 -12.65 4 6.8 0.6 0.37 1.12 7.48 16.33 5 0.6 0.37 1.12 7.48 9.53 6 -5.44 /a 0.4 0.28 0.75 6.20 2.19 7 0.4 0.28 0.75 6.20 5,63 8 0.4 0.28 0.75 6.20 5.63 Q n AL n.8 93 05 6.20 5.63 10 -3.00 /a 0.4 0.28 0.75 6.20 1.84 New or Repaired Bridge Residual Values (difference +85% - 90%) -2.79 Net Present Value at 10% discount rate = Rs 13 million 1. R. R. = 45% Coloums (3) - (7) represent costs avoided by undertaking the planned program of bridge repair and replacement. /a Residual Value of Bailey Bridging.  ANNEX 3 - 41 - Page 6 Whence, weighted rate of return for the whole project is as follows: Rehabiliation : IRR 29% *cost: US$7.1 million Improved maintenance : IRR 56% cost: US$4.9 million Bridge program : IRR 45% cost: US$4.6 million Equipment : No direct benefits ascribed cost: US$1.05 million Technical Assistance : No direct benefits ascribed cost: US$1.55 million US$19.2 million Weighted average IRR for project = 36% *From Table 7.  - 42 - ANNEX 4 Related Documents and Data Available in the Project File International Bank for Reconstruction and Development, Report of a Bank Transportation Mission, November 1966 Wilbur Smith and Associates, Ceylon Traffic and Planning Study, 1966 International Bank for Reconstruction and Development, Appraisal of a Highway Project: Ceylon, October 1, 1968 Wilbur Smith and Associates, Ceylon Highway Planning and Maintenance Study, April 1969 United Nations Economic Commission for Asia and the Far East, Report of The ECAFE Transport and Communications Group Mission to Ceylon, October-December 1971 Central Bank of Ceylon, Annual Report for the Year 1974, April 30, 1975 Government of Sri Lanka, Ministry of Irrigation, Power and Highways, Progress 1970-75, November 27, 1975 Trimac, Sri Lanka Railway Assessment Study, 1976 Government of Sri Lanka, Department of Highways, Analysis of Rates and Highway Schedule of Rates, 1978 Government of Sri Lanka, Department of Highways, New Highway Project 1979-81 Project Report, 1978 International Bank for Reconstruction and Development, Development of Sri Laka, Issues and Prospects, 1978  Table 1 - 43 - SRI LANKA A ROAD MAINTENANCE PROJECT Classification of Roads Maintained by DOH Length of Road (miles) Class Description 1961 1967 1971 1976 1977 1978 A. National Roads 1,850 2,178 2.201 2,221 2,211 2,427 B. Provincial Roads 2,412 2,957 3,100 3,241 3,218 3,026 C. /1 District Roads 3,905 4,236 4,488 5,698 5,776 6,121 D. /1 Access Roads 2,556 3,054 2,972 4,357 /2 4,257 3,458 E. /1 Minor Access Roads 853 545 590 878 1,213 L2 447 TOTAL 11,576 12,970 13,351 16,395 16,675 15,479 Source: DOH Note: /1 Improvement funds for road classes C, D, and E. are channeled through district ministers. /2 Some class D and E roads handed back to the Irrigation Department for maintenance in 1977 and 1978. March 1979  SRI LANKA A ROAD MAI1tTENANCE PROJECT Motor Vehicle Statistics YEAR CARS BtlSES LORRIES MOTORCYCLES TRACTORS 1/ TRAILERS 1! OTHER TOTAL 1965 82,466 8,051. 30,497 17,516 7,293 2,686 251 148,760 1970 87,h82 10,433 37,264 20,239 14,243 6,594 354 176,792 1975 91,728 12.815 38,593 22,773 19,900 8,742 421 194,972 1976 93,769 13,142 38,845 23,384 20,930 9,156 434 199,660 1977 97,060 14,123 39,729 24,435 22,450 9,834 445 208,076 1978(Jul.y)99,979 14,598 41,700 26,636 24,138 10,406 450 217,907 ComposLtton of Total Fleet 1.ight Veliicles Heavy Vehicles (buses & trucks) 1950 61% 39% 1960 71% 29% 1970 64% 36% 1977 64% 36% I/ These are for agricultural use. m Source: Commissioner of Motor Vehicles January 1.979  - 45 - Table 3 SRI LANKA A ROAD MAINTENANCE PROJECT Highway Expenditures 1972-77 and Estimates for 1978-79 (millions of S.L.Rs) General Capital /1 Research and Expenditure on Year Administration Expenditure Laboratory Services Maintenance /2 Total 1972 14.97 24.51 0.18 54.17 93.82 1973 10.81 75.39 0.37 34.63 121.20 1974 12.45 46.30 0.44 43.81 103.00 1975 14.05 81.71 0.46 49.71 145.93 1976 14.79 114.54 0.46 50.03 179.82 1977 15.27 100.36 0.60 55.52 171.76 1978 15.75 80.41 0.69 56.05 153.09 /3 (Estimated) Approved 17.28 113.50 0.76 63.85 195.39 Source: Estimates of Revenue and Expenditure Notes: /1 Includes new work and improvements for roads and bridges on Class A and B roads. /2 Includes maintenance on all DOH maintained roads, Class A - E /3 In addition, an estimated Rs6O.07 million will be spent on work for district ministers from decentralized budget funds. March 1979  - 46 - SRI LANKA A ROAD MAINTENANCE PROJECT FABLE 4 SCHEDULE OF PROPOSED ROAD REHABILITATION AND MAINTENANCE WORK 1. ROAD REEANILITAI'ON Prio,rity Location Description of Works 3 ymMt Estimated Cost (Rs Millions) Estimated Coot of Xiiii) 3V Cooltract By DOH Major MoLoriailI , bcr 1. PuttEali District Roote A3, Mile 46 Reconstrect approx. 10 nile of -oistieg road to Puttal1n where serioc ly sobstaodard or failed to givo 22' roodcay on 32' f-rmation, 6" stone booe oner e-isting road as sob-base & DBST sorface. Minor If 12.8 alignoent improvement on soon coVes affects about 2D cc lefgth. Soil and pavement ser-eys in progress. Cootract docanents to be prepared by tochnical assistan-e. 2. P1onoa.r..e District i)Rfo.te A.11, Hab.rana Widen foroation to 24' hebre necessary. Provide to nile 47 6" steno base over noiating 16' wide roadnay with DBST sorface 00er 12 oil.o; einor relign- 32 7.3 2.2 4.5 ment on iioleted bends. Patcbh ad res.al remainin 20 nii-. Soil and pavenont sorvoy in pro.eese. cii)focte A.ii, nile 47 faiso road appron. 6' throughout(above avrage to 50 Maoampitiya ilood Ieoais)to giVo 24' formation end 22' prenix sueface. Provide siope protection and approeinateiy 2,000 ft of standard bridginE to 3 35.4 take Mahae-i flood -eter-. Inveetigation & designs to be done by DOH and technical asIsE- tencc oinclding possible inprovement of coin Mbahaeli crqfOing. Work conmenciig Year 2. 3. Nuwara Eliya District Roote A. 7 Aviss. Add 6" of stone base over eoistinf panennt, _ella-_Htton-Nuwaraoideoingebernecossary to give 20' roadnay Eiiya Road miles minimom 00 28' formation. Miner realig9sents 0 5.6 1.S 3.4 :4-78 t 106-111 tc improve visibility. Provide DbST sorface. Soil and pa-ement sorney in progress 4. Ratoopora District Roote A.4 P. lmadulia Provide extra 4" stone base over approx. 8 to Beragalla miles with DBST sorfare. Patch and reseal 26 oilee. Provide approx 2000' of oasonry 34 6.0 2.0 3.b reteining calls. Soil and peveonotf .rey -nd retaining wall dosigo to be no,plEted doe- fog Year 1 cork to comence in Year 2. ;. n-d K iotrict ci)A.S. Peradeniya to Raise rood by provision of extra 6" stooe Ga-pola RDyd Mile base over eointiog panvemt wide.i.g to 4 - 13 22' roadwey whero possible. Provide 2" previx ourface thIroghout. P-xevemt and - 9 !0.2 soil sorneys a-d desigo to be coopleted by *J0 and technical assistance in Y-sr I for work commeoncemeot in Year 2. 6. Kaody District A. I Colombo-KRady Gie-re1 betteement end pavement strengthen- food, Kacdoganno. o ing over pprvo. 5 nile to enoe grades and area inmprone nisibility. Detailed denign to be 5 5.0 carried ouc during the project for comple- tion during possible fotere project. Allow for prelivinery orks 7. Galle Dintrict Colohbo-Galle Rd. onestigece poosible reeligomno of aboet 10 Bentota by-paso nile- to avoid confe6ted orban area; 24' road- way aith 8N' sboldern. Reconstrc tion of major bridge included io bridge schedole. Allo- for land acqoisition, minor bridges & 10 6.4 4.0 (Laod Acqoicitc-) occeos roods -E-- t29.R 22.9 5.7 11.5 11. iMPROVEP PERIODIC (:olombo and Kalet.ra Districts) MAINTENA1ICE Renea1 roads after repair of local failoren. 120 8.4 3.1 5.1 Provide premix carpet hebre o-rranted by traffic floes 30 17.5 5.4 10.7 ill. IMPROVED ROUTINE (All Dintrictn) MAINTENANCE S itti i p % d Systematic re pair of pooboles and edge ravelling and c _rfaee faileren using bituninoos emolnion and equipment nupplied ooder the project. 28.0 9.0 17.1 Tot.ls for contract eork, enrials and labor carried to Table 7, Items I & 11 150 53.9 17.50 32.9 _ March 1979  - 47 - TABLE S SRI LMIRA ROAD MAINTENANCE PROJECT SCHEDULE OF PROPOSED BRIDGE WORK Priority Location Decription of Work Estimated Cost Remarks (R isiJlliose) 1. Colombo Galle Rd. Replace existeng steel Design complete. Bridge 69/3 span 6 madonry abutments 1.1 Constr. by DOH & widen 2. Udugaea-Hinidusa Replace existing 5x23' 1.8 Design complete. Rd. Bridge 614 steel bridge with snb- Constr. by DON mersible structure 3. Kandy-Jaffna Rd. Replace & viden existing 1.0 Design complete. Bridge 74/2 15' wide corroded struc- Conntr. by DON ture 4. Ratnapura- Replace A relocate 3 span Design complete. KErawita Rd. bridge, sive northuardo 1.8 Construction Bridge 6/5 to improve spproaches planned for SDCC 5. Pssedurs-Ratna- Reconstroct 6 Widen 1.0 Design complete. pure Rd. Bridge bridge A allow for over- Constr. by DOH 4017 topping during floodn 6. Colombo-Kandy Rd. Provide new perched abut- Design complete. Bridge 48/8 sects A 60-65' npan 1.1 Constr. by DOH 7. C.R.W.B. Road Reconstruct existing 2.7 Design complete. Bridge 148/7 narrow bridge Constr. by DOH 8. C.R.W.B. Road Reconstruct existing 3.4 Design complete. Bridge 235/5 badly corroded bridge Constr. by DOH 9. Kombueuoitiya- Reconstract collapsed 0.6 Design complete. Mulstiyama Rd. bridge spans. Constr. by DOB Bridge 3113 10.- 14.Ddugsma-Hinidsma Replace five oub- 6.0 Design to be completed Rd. Bridges 2/5, standard bridges by DOE. Constr. by 2/14, 5/3, 6/8 Contcset. A 24/11 15. C.R.W.B. Road Replace existing two- 1.2 Design to be con- Bridge 171/2 sps. bridge A widen ploted by DON. Co..tr. by DON 16-17. Colombo-Galle Rd. Etisting major bridge Design to be com- Bridges 39/3 6 badly corroded. Pos- pleted by DOE. 39/4 sible sew aligoment to 14.5 Con..t. by Contract. be investigated 18. C.R.W.B. Road Replace emisting 0.7 Design to be coo- Bridge 30/2 narrow bridge pletod by DON. Constr. by DO0 19. Mtadawachchlya- intend causeway 5 pro- 3.5 Design to be completed Manoer Rd. vide 130' central by DOH. Corstr. Bridge 147/3 sp.. by Contract. 20. Teunek-ambuc- Replace existing 0.7 Design in pc-gr-e.. 2 Weradantota Rd. bridge Construction by Bridge 17/13 Contract. 21. ColoG bo-Kandy Rd. Replace existing Design alnont co Bridge at bridge 2.0 piote. Conntr. by Nanuoya Contract. 22. Kadudannawa- Replace existing Design almost con- Kanikdiwala Rd. bridge 1.5 ploete. Constr. by Contract. 23. Negeobo-Giriulla Replace ecisting Design in prngrecc. Rd. Dridgo at bridge 1.0 Construction by Negeobo over Contract. Dutch canal 24. Nogambo-Voyandeda Replace existing Denign in progress. Rd. Bcidge 13/5 bridge 0.9 Coonst. by Contract. 25-28. Rajswola-Madawela Widen and re-dack Design to be done by Rd. Bridges 7/9, eaisting bridges 0.5 DOH before contte. 8/2, 9/7, 12/7 by Contract. 29, 30. Kurunegla- Replaen ecisti,g Design to be done by Narummela Rd. brLdges 0.6 DO. Constr. by Bridges 33/2 Contract end 33/3 Total Rs 47.6 million By DOH: 14.6 By Co-tract: 33.0 47.6 Contract cost carried to Table 7, Item III. DOB materials end lubor cens. estimated an percentage of total cost; =aterials costs to be verified froe denign Bills of Quantities when conpleted. Marbh 1979  - 48 - SRI LANEA TABLE 6 A ROAD i4AINTENANCE PROJECT Schedule of Plant and Equipment No. Unit c.i.f. Item No. Dee.riptie- Required Price Totat Cost Cost of Spares Remarks US$ UE$ US$ Foreign cost 1. For Road Rehabilitetia- 1. lOt/hr primary crushers 2 61,500 123,000 20,900 Equipment 1,074,800 2. 7t/hr granulatore 5 22,400 112,000 19,040 Initial spares stock (17%) 182i 750 3. 6,000 litre bitumem preheater 2 43,700 87,400 14,860 1,257,550 4. 6,000 litre bitumen distributor and heater 2 59,300 110,600 20,160 Local 5. 4-10t self-propelled p.eumatic rollers 2 22,000 44,000 7,500 Local Fqoip-mit costs (5;:) 63,900 6. 8-10t steel wheeled tandem rollers 6 45,000- 270,000 45,900 Tools @ 2% of works cost 24,000 7. 7t dump tru,ck 12 21,400 256,800 43,670 87.900 8. Chip spreaders, tail mounted 6 4,500 27,000 4,600 9. 3/4t pick-up trucks 4 9,000 36.000 6.120 1.074.800 182.750 II. Improved Maintenance For Improved Routime Mbintenance 10. Emclsion sprayers 76 560 42,560 7,240 Foreign costs 11. Vibrating plate compactors 76 2,250 171,000 29,070 Equipment 1,322,060 12. 7t/hr granulators 12 22,500 270,000 45,900 Initial spares 224,750 13. 3/4t pick-up trucks 20 9,000 180,000 30,600 1,546,810 14, 10t/hr primary crushers 2 61,500 123,000 20.900 Local 786,560 133,710 Local equipment costs 77,300 For Demonstration Distiict Tools @ 2% sf wo,-'s cost b8.240 Periodic Mlaintenance 145,540 1I. lOt/hr asphalt mixer 1 61,600 61,600 10,470 16. Asphalt paver 1 56,000 56,000 9,520 17. 6,000 litre bitumen pr-heater 1 43,700 43,700 7,430 180 6,000 litre bitumen distributor and heater 1 59,300 59,300 10,080 19. 4-10t self-propelled pneumatic roller 1 22,500 22,500 3,830 20. Self-propelled chip spreader and compactor 1 56,000 56,000 9,520 21. 7t dump truck 6 21,400 128,400 21,830 22. 3/4t. pick-up truck 2 9,000 18,000 3,060 23. 8-lOt steel-wheeled tar iem rollers 2 45,000 90.000 15i300 535,500 91,040 Ill. FPr DCOH Bridge Section 24. Pipc spinner and goolds up to 72"0 2 67,200 134,400 22,850 Foreign costs 25. 20t/hr concrete batch ylant 2 89,500 179,000 30,430 Equipment 1,080,000 26. 3 c.y. mobile concrete mimer 16 19,200 307,200 52,200 Initial spares 167740 27, 1 c.y. dumper 16 5,600 89,600 15,230 1,247,740 28. Piling frame and crane (lOt) self-propel 2 78,500 157,000 26,700 Local 29. Pile hammers 2 39,500 79,000 13,430 Local 62,400 30. Air compressor (towed) 200 cfo 2 20,300 40,600 6,900 Tools 4 4% of cost 18,500 31. Low bed trailer and trrtcor 1 59,000 59,000 10,000 80,900 32. Boring equipment 1 35,000 35,000 6.000 1,080,000 167,740 IV. Workshop Equipment (Angulana and Kalutara - Colombo District) 33. Tools and equipment 314,700 Foreign costs 391,700 34. Racks and storage bins 49,400 Local costs 19,600 35. Installation and services 27.600 391,700 Nlte: Consumablo materials such as welding materials, lubricants, drill steels and crusher jaws are included under the Sitres and Supplies item. This item also includes US$200,000 to restock the spare parts store. Maarch 1979 Surce: 0OH and mission estimates  SRI LANKA A ROAD MAINTENANCE PROJECT Pr-oect Costs Equipment & Tools 'pares & Zupnlies Materials Local Staff Technical Assistance Contracts Works Sub-Total 1. Roa, Rehabilitation Local Fore. Total local Fore. Total Local Fore. Total L,cal Fore. Total Local Fore. Total Local Fore. Total Local Fore. Total tlSS 0.09 1.26 1.35 (.01 0.22 0.23 0.11 0.25 0.36 0,73 - 0.73 2.23 2.19 4,42 3.17 3.92 7.09 S. L RN 1.42 19.91 21.33 (.16 3.47 3.63 1.75 3.95 5.70 11.50 - 11.50 35.19 34.61 69.80 50.02 61.04 111.96 IT, Imp ,ved Maintenance (Ro, ine & Periodic) I'SS 0.15 1.54 1.69 (.00 0,04 0.04 0.33 0.78 1.11 2.08 - 2.08 2.56 2.36 4.92 S. i RN 2. 25 24.13 26.38 (.02 0,60 0.62 5.18 12.32 17.50 32.90 - 32.90 40.35 37.05 77,40 III. BriG.e Repairs t:SS 0.08 1.25 1.33 (.0. 0.03 0 03 0.13 0.31 0,44 0o;'0 - 0.70 1.05 1.04 2 09 1.96 2.63 4.59 S. L Rs 1.39 19.91 21.30 (.02 0.45 0 47 2.13 4.84 6.97 11. 0 - 11.10 16.63 16.37 33.00 31.27 41.57 72.84 IV. Wor ,hops and Spares US$ 0.02 0.39 0.41 (,02 0.28 0.30 0.03 0.02 0.05 0.29 - 0.29 0.36 0.69 1.05 S. I Rs 0.32 6.16 6.48 1.30 4.45 4.75 0.48 0.32 0.80 4.65 - 4.65 5.75 10,93 16.68 r> V. Tec, ical Assistance US$ 0.01 '.25 0.26 C.01 0.03 0.04 0.02 0.03 0.05 0,05 - 0.05 0.11 1.04 1.15 0.20 1,35 1.55 S. t Rs 0.17 3.95 4.12 C.15 0.50 O.65 0.30 U.51 0.81 0,79 - 0.79 1.75 16.45 18.20 _ _ 3.16 21.41 24.57 Sub- otals US1 0.35 4.69 5,04 0.04 0.60 0.64 0.62 1.39 2.01 3.85 - 3.85 M,ll 1.04 1.15 3.28 3.23 6.51 8.25 10.95 19.20 S. 1. RN 5.55 74.06 79.61 0.65 9.47 10.12 9.84 21.94 31.78 60.94 - 60.94 1.75 16.45 18,20 51.82 50.98 102M80 30,55 172,90 303.45 Lont ogencies (USS) /1 (Quan ity Increase 0.02 0.24 0.26 0 00 0.06 0.06 0.06 0.14 0.20 0.39 0.39 0.01 0.11 0,12 0.33 0.32 0.65 0.81 0.87 1.68 Infl tion 0.12 0.69 0.81 0.01 0.09 0.10 0.19 0.20 0.39 1.19 - 1.19 0.00 0.15 0,15 1.02 0.46 1.48 2.53 1.59 4.12 Lont Onenries lota1 0.14 0.93 1.07 0.01 0.15 0.16 0.25 0.34 0.59 1.58 - 1.58 0.01 0.26 0,27 1.35 0.78 2.13 3.34 2.46 5.80 To-v 0.49 5.62 6 11 0,05 0.75 0.80 0.87 1.73 2.60. 5.42 - 5.43 0.12 1.30 1,42 4.63 4.01 8.64 11.59 13,41 25.00 laxe, and Dlay 1.22 - 1.22 0.30 _ 0,30 0.26 - 0.26 0.54 - 0.54 0.14 - 0.14 1.29 - 1.29 3.75 - 3.75 Grar,i Total with To asnd Duty 1.71 5.62 7.33 0.35 0.75 1.10 1.13 1.73 2.86 5.97 - 5.97 0.26 1.30 1.56 5.92 4.01 9.93 15.34 13.41 2827. I : or eq, ipoent and tools; 10, on others : ar' item i thro,gli IV is made up from the cost estimates ir -Ies 4, 5 and 6. item V is derived Irom (Tart 19871 S .... J: I! and Mts0ion llstimates  SRI IANKA A ROAI) MAINTENANCE PROJEICT I'roject Costs by Year (Net of 'lax and Duty: UIS.$ millions) YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTAL Local rForeign 'rotal Local Foreign Total Local Foreign 'I'otal l.ocal Foreign 'Total Local Foreign Total I. E'qujipment and Tools 0.15 2.25 2.40 0.10 1.23 1.33 0.06 0.76 0.82 0.04 0.45 (.49 0.35 4.69 5.04 II. Spares and Supplies 0.02 0. 32 0.34 0.01 0.10 0.11 0.01 (.09 0.10 0.00 0.09 0.09 0.04 11.60 0.64 III. Materials 0.05 0.11 0.16 0.24 0.53 0.77 0.24 0.53 0.77 0.09 0.22 0.31 0.62 1.39 2.01 IV. Iocal Staff 0.34 - 0.34 1.17 - 1.17 1.17 - 1.17 1.17 - 1.17 3.85 - 3.85 V. Technical Assistance 0.04 0.63 0.67 0.04 0.28 0.32 0.02 0.09 0.11 0.01 0.04 0.05 0.11 1.04 1.15 V'I. Contract Work _ 1.09 1.07 2.16 1.38 1.37 2.75 0.81 0.79 1.60 3.28 3.23 6.51 Sub-'otals 0.60 3.31 3.91 2.65 3.21 5.86 2.88 2.84 5.72 2.12 1.59 3.71 8.25 10.95 19.20 Quantity Increases 57. on 1, 107. on 11 - VI 0.05 0.22 0.27 0.26 0.26 0.52 0.29 0.25 0.54 0.21 0.14 0.35 0.81 0.87 1.68 0.65 3.53 4.18 2.91 3.47 6.38 3.17 3.09 6.26 2.33 1.73 4.06 9.06 11.82 20.88 Price Increases Year 1 Local: (1.075-1)= + 7.57. 0.05 0.05 Ioreign: (1.04-1)= + 4'Z 0.14 0.19 0.14 0.19 Year 2 Local (1.075 x 1.1-1) +18.257. 0.53 0.53 Foreign (1.04x1.07-1)= + 11.287. 0.39 0.92 0.39 0.92 Year 3 2 Local (1.075xl.l -)= + 30.17. 0.96 0.96 Foreign (1.04x1.07-1)= + 19.17. 0.59 1.55 0.59 1.55 Year 4 Local (1.075xl.1 3) = + 43.1'. 0.99 0.99 Ioreign (1.04xl.073-1)= +27.44 - - - 0.47 1.46 0.47 1.46 0.70 3.67 4.37 3.44 3.86 7.30 4.13 3.68 7.81 3.32 2.20 5.52 11.59 13.41 25.00 110H and Mission E,stimates March 1979  SRI LANKA A ROAD MAINTENANCE PROJECT Structure of DOH as of March 1979 | M-nite of Powe a,,d H,qh..y D|recto Dretor Dir r D Secretary | H,ghways) D,rect., Highw ays | DepJty l l Deputy l | Deputy l l ~~~~~~ ~ ~~~~~~~ ~ ~~~~~~~~~~~Deputy Deputy Deputy Deputy Dlrector Director Dlrector~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~D Drector D-rctor D, rect.r olrect.r INorthern Zone ) (Southern Zone) ( Central Zone ) Pan (roramminP Engi neering Ser vices (Cosructioe t) ( Mechanical) I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~lge ms Ctr [l A A-itChfheChief En `geer Chief En gieer Establ|shment Chief EngineertAs Chsif tA- nt Chief Cheef Engie For Bridge to be Directorngi s Diectr E,,gin Director En s P P & P C. i Highay Design, Cotruc Decided ii) an,dg, Desig Traffic & Planeing iv) Reseach & Tra,inig Dpty Chef Executive 25 Executive ue c cotune a 32 Ex cutive an Executivat e 25 Executivet Engineer ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~_ {Fyn Sud Engineers Engnee Eniner Engineer EninersEgiee Deputy Chieftosrcin En,gin,eers Planning & Pln Sapplies Asstan E~~g.~~~e., ~Director Chief (Spec.iI (Ad,,i-rtrat,.,,l Accoutant Accountant ~Adminstrativ- Estimates (Flying Sguadl Ass,stant i)Suppl-e Iii Salaries & SpecIa 3 E,,~~~~~~-,r, ~ ~ v)Paymets S-~r, MOPH Moe,,, 1979 World Bah-1, 20260  SRI LANKA A ROAD MAINTENANCE PROJECT Technical Assistance Preproject Total Prepara- Year 1 Year 2 Year 3 Year 4 Months tion Mnh (3 Months Maximum) TEAM 1. Team Leader 27 (Highway Planning Engineer) 2. Design Engineer 15 (Highways and Bridges) 3. Mechanical Engineer - _ 39 4. Maintenance Engineer 38 5. Contracts Engineer 9 6. Management/Accountant Specialist 15 7. Mechanical Superintendent 39 PROVISIONAL 8. Site Engineers (2) 25 28 9. Mechanical Superintendents (2) 37 21 Provisional technical assistance will be required only if there is an unsatisfactory response from contractors. The estimated cost: Team Leader (1) 27 months @ S 6,700 US S 180,900 Team (2)-(5) 101 months @ S 5,700 575,700 53 mnonths @ $ 5,000 US $ 265,000 Team (6) 15 months @ S 1,250 18,750 56 months @ $ 4,800 268,000 Team (7) 39 months @ $ 4,800 187 200 Air Fares and Freight 90,000 Air Fares and Freight 95,000 Internal Travel, 111 months @ $ 700 77,700 Internal Travel, 182 months @ S 500 91,000 Local Staff, 480 months @ $ 70 33,600 Local Allowances,1 67 months @ S 600 100,200 Office Supplies 65,000 Local Staff, 900 months @ S 60 54,000 TOTAL US $ 800,000 Office Supplies 48,000 Training Aids 200,000 will be met from the financial savings made by carrying out the TOTAL LUS S 1,550,750 work by DOH, rather than contract. World Bank - 20261  SRI LANKA A ROAD MAINTENANCE PROJECT Implementation Schedule Year 1 Year 2 Year 3 Year 4 1. Credit Effective c 2. Receive Bids fot Equipment and Trucks 3. Prequalify Cont actors for Highway Rehabilitation 4. Train DOH Staf in Improved Maintenance Methods: Set up Demonst-ation District _ 5. Set up DOH Hec.dquarters Workshop, Install Equipment, Tra n Staff 6. Improve Costinc and Cost Control; Review Stores F,olding and Control 7. Complete Desigr s and Estimates for Project Works _ - _ _ 8. Contract Rehab istation of Roads. _ _ _ _ 9. Force A/C Reha ilitation. Nuuwara Eliya District - _ _ _ I - - Pollonaruwa District - _ - _ r Ratnapura District 1 l _ _ - r i 10. Operate Demonstration Maintenatnce District - - i - _ (Resealing and Resurfacing) T 11. Bridge Reconstruction and Repairs _ Na,ch 1979 World Bank 20262   IBRED 14040R I10~ r,'o js'SRI LANKA 32- APRIL19/9 Kankes-nturai ROAD MAINTENANCE PROJECT erJcf . iBRD PROJECT ROADS . \PROPOSED ROADS BY GOVERNMENT ~ '< a iRn = IBRD PROJECT BRIDGES PROPOSED BRIDGES BY GOVERNMENT A EXISTING DOH WORKSHOPS ,____ .BSEXISTING ROADS RAILWAYS 4 J A FX FN A -- DISTRICT BOUNDARIES ulrlrrsnrsa /1 -\ J Mahln : 0 2) AvUNI YA \ 1 2 M vA N N A 10 RIL OAmETORS +,~~~~~~~~~~~~~~~~~~~~~~~~I Mr--/ 3p 4p 5 g _ A / TR NCO 2 , r \>< < t \< t\Tr m~~~~~~~~~~~~rico.alee Say of Bengal ;t 1< ~~~~~~g ~ - BMedowachch ya\ /woo a4mB orJXowfBen / A N U R -AtD A PU/ A 1 \ A n Auradhap F :0PUTTALAM / /' / n dJ o n /T N P0LONNAR,6WA i \ [L r ~~~~~I t (;A4as}_\\i 0cea n ( Cnu \ E ALA MAYA E (, IIBATT CALOA* -K i<orunee'tI I Mt e--, -4 r \l OMB _ ( K'E G I A L A A PA/ o AI COLDMB -trrE3 .N~~~ ThA nar h,R n he \ ' )vil Wyorld Rankssrofjt rasois'nr for lon I \ u < ,h.r OPrtoAw R,t,ollaroOdb I e J -a Th de-oO-,n,- o-uoOand d10 M World Book so ;eo ffihs-nan anyi r, 0w or w any sPdoerdun .c\ orc:tn-h{UeOrse;s _-m > q nake KalutorU tS~~~A T N PU RA/ Ir PAKISTANI )N BReotB . ,1'0 I N D I A , \\ Elpitlya 17X-gFl 4y ~ ~ H A M B A T O T A I .N\ I I I MAtAE A flAor9ota You I Sbrrga/ h A N, 8yt( ~~~~~=~~~ /da'ian C7cean / SRI LANKA / e d, a n -, 0c 7an aso'aRI 92' 1