Senegal - Fourth Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY Ft L E CO P Y Report No. 2515a-SE SENEGAL FOURTH HIGHWAY PROJECT STAFF APPRAISAL REPORT February 26, 1980 Western Africa Projects Department Highways Division This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = CFA franc (CFAF) US$1.00 = CFAF 210 CFAF 1 million = US$4,762 WEIGHTS AND MEASURES Metric US Equivalents 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 square kilometer (km2) = 0.386 square miles (sq mi) 1 metric ton (m ton) = 2,204 pounds (lb) ABBREVIATIONS AND ACRONYMS CEBTP - Centre Experimental de Recherches et d'Etudes du Batiment et des Travaux Publics CEREEQ - Centre Experimental de Recherches et d'Etudes pour l'Equipement GDOT - General Directorate of Transport DER - Maintenance Division DRC - Directorate of Road Construction DRME - Directorate of Road Maintenance and Equipment DSP - Directorate of Studies and Programming FED - European Development Fund GDPW - General Directorate of Public Works GNP - Gross National Product ME - Ministry of Equipment MOF - Ministry of Finance and Economic Affairs MOP - Ministry of Planning and Cooperation OECF - Overseas Economic Cooperation Fund (Japan) ONCAD - Office National de Cooperation et d'Assistance au Developpement ORT - Organization for Rehabilitation through Training (Switzerland) PCM - Central Equipment Division UNDP - United Nations Development Program vpd - vehicles per day FISCAL YEAR July 1 - June 30  FOR OFFICIAL USE ONLY SENEGAL FOURTH HIGHWAY PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Paxe No. I. THE TRANSPORT SECTOR ...... A. The Land and the Economy ....*......* ................... 1 B. The Transport System ....... *.......................... 2 C. Transport Policy, Sector Management and Investments .*.. 3 D. Bank Assistance to the Transport Sector ................ 4 II. THE HIGHWAY SUBSECTOR ...................*.. ............ 6 A. The Network ............................................ 6 B. Characteristics and Growth of Road Traffic ............. 7 C. The Road Transport Industry ............................ 8 D. Road Maintenance .o.o. ....... .... . . .. . . ...... ... . . ....... .. . * 9 E. Administration ....9. ... . .. .. . * ..*. .. * .. . .. .... .... .0. .. . 10 F. Staffing and Training . ....... ............ .... . ........... 11 G. Investment and Financing ...... ooo.. o....... ............ 11 H. Engineering and Construction ........................... 13 III. THE PROJECT .......*... .. ......... . . . ... ... ....... ..*.. ... . ... ..*. 14 A. Project Objectives ..* ..... . o. oo........ 14 B. Project Description ... ................... .......... 14 C. Project Cost and Financing ............ ................. 19 D. Implementation ...... . .... . .. . . ............. *...... *- ...- 21 E. Procurement .............. ...*..o.. .. ... .. . .......- ..- ... 23 F. Disbursements ......... . .. ......... ......4.0.0 ... ... ...... 24 IV. ECONOMIC EVALUATION ............... ........................ 25 < ~~~A. General ..o.......... ....... ... 00........... 00... O............... 25 B. Maintenance Program ....o .....*...oo .................... 26 C. Road Strengthening and Rehabilitation . ................ 27 D. Construction of the Louga-Dahra Road ....... o.o..o....o. 29 V. RECOMMENDATIONS ..... . ... .....o....... . .......... oo . .....o...... .-. 31 This report was prepared by Pierre Sooh (Highway Engineer), Peter Parker (Economist), and Frida Johansen (Economist) on the basis of an appraisal mission in November-December 1978. It was edited by Charles W. Applegate. 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.  -2- ANNEXES 1. Annual Highway Expenditures, FY1971-79 2. Road Design Standards 3. Equipment to be Procured 4. Technical Assistance for the Training Program - Outline Terms of Reference 5. Consultants Services for Technical Assistance to the DRME Maintenance Program - Outline Terms of Reference 6. Study for Design of Pavement Maintenance and Strengthening Programs - Outline Terms of Reference 7. Description of Paved Roads to be Strengthened and Rehabilitated 8. Project Costs 9. Highlights of the Economic Evaluation of Strengthening Paved Roads 10. Related Documents and Data Available in the Project File CHART - Organization of the Ministry of Equipment MAP - IBRD 11900R1  SENEGAL FOURTH HIGHWAY PROJECT STAFF APPRAISAL REPORT I. The Transport Sector A. The Land and the Economy 1.01 Senegal is a small (196,000 km2) coastal country located at the extreme west of the Sahelian zone of Africa. It has only limited natural re- sources. Soils are generally poor, and droughts cause periodic crop failures and severe food shortages. The large river basins have been only marginally exploited to date. Population is about 5 million and is growing at about 2.7% p.a. About 70% of the inhabitants derive their livelihood from agriculture, mostly small scale rainfed farming. Farming is concentrated in the Cap Vert peninsula and the surrounding "groundnut basin". The modern sector of the economy is concentrated in Dakar, the national capital and former capital of French West Africa, where industrial activity is growing. 1.02 Agriculture contributes about 35% of gross domestic product (GDP); groundnuts alone account for about 20% and sometimes more than half the value of exports. Fluctuations in rainfall and world prices, therefore, have a considerable impact on the Senegalese economy. Phosphate mining, the second most important economic activity, is equally subject to wide price fluctua- tions which further aggravate economic instability. Industries, mainly import substituting, are being developed in Dakar under Government protection and participation. During the 1970s, public and private investment increased from 10 to 15% of gross national product (GNP). Per capita GNP was estimated at US$420 in 1977, but average income in Dakar is roughly five times as high as in the countryside despite recent producer price increases. 1.03 Senegal's prospects for rapid economic development are limited, given the few available natural resources and the country's dependence on exports. The Government's long-range development strategy remains based on promotion of agriculture and export-oriented activities, with a view to reducing the impact of uncertain weather and prices. The agricultural program calls for development of areas less affected by rainfall fluctuations where cash crops other than groundnuts can be grown. Irrigated cereal production is being developed in the arid northern p-rt of the country along the Senegal River. The Government also aims at a mcdi 3t expansion of phosphate mining and development of light export industries and tourism. However, many of the areas suitable for rainfed agriculture are already being exploited, and insti- tutional and, to a lesser extent, marketing constraints will limit the rate of development of irrigation-based agriculture. Further, given the Government's limited financial capability and the risks it will have to assume, only a cautious view of the rate of future economic development is warranted.  -2- B. The Transport System 1.04 Senegal's transport system is quite extensive, consisting of a 1,034 km railway network; a 13,740 km road network, including 2,800 km of paved and 5,550 km of all-weather roads; a deep-water protected port at Dakar (the only one with such characteristics in the Sahel zone) plus three secondary ports; and an international airport at Dakar and several smaller domestic airports. All modes perform an important international function, supporting Senegal's role as a regional center and transit country. Apart from The Gambia (see Map), there are no major barriers to the development of transport within Senegal. 1.05 The railway comprises about 660 km of mainline between Dakar and the Mali border, forming part of the international line linking Dakar with Bamako (Mali), and 374 km of branch lines. The railway has traditionally been the dominant carrier of domestic freight but has lost its position over the past decade due to deteriorating service and efficiency. Rail passenger traffic also declined substantially following the expansion of the road network and the vehicle fleet, particularly for short-haul traffic. The railway has recently started to regain freight traffic as a result of strong managerial action, and the technical assistance and training program implemented under the Third Railway Project (Loan 1518-SE, US$11 million, 1978). In FY1978 the railway carried about 1.7 million tons of freight, the bulk of which was shorthaul phosphates from the mine to the Dakar port, and Mali transit traffic. 1.06 The road network is generally well-developed relative to the size and growth of the national economy. It is concentrated in the more heavily populated coastal regions and groundnut-producing areas with a number of main roads running parallel to the railway. The highway subsector is discussed in Chapter 2. 1.07 Senegal's port and waterway system consists of major port facili- ties at Dakar, supplemented by secondary ports at St. Louis, Kaolack and Ziguinchor. Cargo through Dakar port doubled in the last decade and now totals about 6 million tons p.a. The most important traffic includes petro- leum (for the national refinery, the port's bunkering services and aircraft refueling), international traffic for Mali and Mauritania, and phosphates. Traffic through the secondary ports, generally domestic, has been declining due to increased competition from road transport. The Bank's Dakar Fishing Port Project (Cr. 1405-T-SE, US$6 million, 1977) is directed at developing the domestic fishing industry by financing facilities and technical assistance for the port of Dakar. 1.08 Dakar airport serves as a strategic stopover on routes between Europe and South America, and between New York and West and East Africa. Dakar airport plus secondary airports constitute a basically adequate infra- structure. The Bank is assisting the development of the Dakar airport and two secondary airports as part of the Second Aviation Project (Ln. 1665-SE, US$7 million, 1979).  - 3 - C. Transport Policy, Sector Management and Investments 1.09 Prior to independence in 1960, Senegal's transport system was designed primarily to carry the significant volume of import/export traffic exchanged between France and all of French West Africa. Comprehensive port facilities were developed at Dakar, and the railway was constructed to provide access to the interior and to Mali and Mauritania. Following independence, Senegal emphasized the development of its road network, primarily paved roads radiating from Dakar, to support the growth of groundnut exports and to rein- force Dakar's role as the capital city. Recently, the Government slightly reduced transport's share of the development program and now places more emphasis on (i) secondary and feeder roads in support of agriculture, mining, industry and tourism projects and (ii) opening peripheral regions and provid- ing more interregional links. The existing infrastructure, which has been largely neglected, still needs to be properly maintained and fully used. 1.10 Senegal's development policy is translated into five-year plans. In principle, the investment plan is based on proposals from the technical ministries and is reviewed by interministerial committees and the Ministry of Planning within financial guidelines specified by the Ministry of Finance. In practice, however, there are insufficient basic planning data and too few trained personnel, and a coordinated transport policy is still lacking. To overcome these constraints, the United Nations Development Programme (UNDP) provided a team of experts, including a transport specialist, who helped prepare the Fourth and Fifth Development Plans, and the Ministry of Equipment subsequently created a Directorate of Studies and Programming (DSP), which is supported with technical assistance financed under the Third Highway Project. The technical ministries are only now becoming more involved in the technical and economic feasibility analyses of proposed projects. 1.11 During the Fourth Plan, Senegal spent about 15% of public invest- ments (CFAF 31 billion) in the transport sector, and two-thirds of that in the highway subsector. CFAF 38 billion has already been spent on transport under the Fifth Plan (FYs1978-81) of which CFAF 21 billion has been for roads. Investment in the transport sector in FYs1978-81 is expected to amount to CFAF 59 billion, a 20% increase in real terms. Given the present economic difficulties, the Government has stated its intention to slow down investment and to concentrate on completing ongoing works in the sector. Past and planned investments are as follows:  Actual and Planned Investments in the Transport Sector, FYs1965-81 (CFAF billion) Actual Planned Fiscal Years 1965-69 1970-73 1974-77 1978-81 Roads 4.4 n.a. 20.0 39.6 Rail 2.8 4.2 4.3 5.2 Ports and Rivers 1.6 n.a. 3.2 11.6 Aviation 0.2 n.a. 3.5 3.0 Total 9.0 14.1 31.0 59.4 Source: Ministry of Planning 1.12 The proposed levels of transport investment are generally reasonable at this stage of development, given the country's priority need to support the directly productive sectors, with the exception of investment in paved roads (Chapter 2). Proposed investments in the railway represent a declining proportion of the total but are needed to enable the railway to fulfill its long-term economic role, under assumptions of reasonable efficiency, of pro- viding the principal outlet for landlocked Mali, carrying phosphate traffic, and of supporting Dakar's role as a regional center. Railway investment mainly covers the purchase of rolling stock and training. Ongoing investments in ports include the fishing ports at Dakar and Saint Louis and dredging the Dakar and Sine Saloum canals. The Government has also proposed improving two secondary fishing ports. Investments for air transport include strength- ening the runway for international traffic and aprons at Dakar, buying equipment for Ziguinchor and Cap Skirring airports, and buying additional aircraft for the domestic airline. The Government is preparing a Comprehensive Transport Plan with assistance provided under the Third Highway Project. The plan will provide useful recommendations for the appropriate level and composition of investments in the transport sector and will assist in the preparation of the Sixth Five Year Plan. D. Bank Assistance to the Transport Sector 1.13 The Bank Group has been a major contributor to the development of the transport sector. Over the past 12 years, the Bank Group has invested US$89.7 million in the sector under 11 loans/credits (three railway, two port, two aviation, one feeder road and three highway projects) plus feeder roads under agricultural projects. 1.14 Execution of the first two railway projects, which were primarily designed to rehabilitate the track and provide rolling stock, was hampered by delays mainly stemming from misunderstanding of bidding procedures and lack of experience in mechanized track-laying, and from changes in scope mostly due to a shortage of local funds for spare parts. In addition, the railway's operating performance was less than satisfactory due to a shortage of ade- quately trained personnel. Despite this, the projects, together with parallel  - 5 - projects for the connecting Mali railway, helped prevent a collapse of opera- tions on the Mali-Senegal railway system. The ongoing Third Railway Project is designed to improve operational performance through a technical assistance effort and strong measures to strengthen management. 1.15 The First Dakar Port Project was designed to restore and expand general cargo handling facilities and included important institutional objec- tives. It was satisfactorily implemented. The ongoing Second Port Project is designed to increase the fishing port's capacity and efficiency through civil works and technical assistance; the project also provides for a study of the development of container traffic and required port facilities. Project implementation is satisfactory. 1.16 The First Aviation Project comprised extending the runway of Dakar's international airport, enlarging aircraft parking aprons and related works to make the airport suitable for large aircraft thus enabling Senegal to maintain its position as a staging point for transatlantic flights. The project was satisfactorily implemented. The recently approved Second Aviation Project aims at maintaining the attractiveness of Dakar for international air traffic through the strengthening of the main runway and taxiways and at modernizing navigational equipment at Senegal's two busiest domestic airports, Ziguinchor and Cap Skirring. 1.17 The First Highway Project (Cr. 198-SE, US$2.1 million, 1970) provided for the construction of 78 km of feeder roads, the purchase of maintenance equipment, consultant services and preinvestment studies. The project was completed satisfactorily except that the economic return was lower than expected due to the impact of successive droughts on agricultural production and traffic. 1/ 1.18 The Second Highway Project (Cr. 366-SE, US$8.0 million, 1973) pro- vided for the strengthening of 34 km (reduced from 110 km) of paved roads; a four-year program to improve highway maintenance, including organizational improvements, workshop construction, training, and procurement of equipment and spare parts; and consultant services and preinvestment studies. The reduced pavement strengthening was completed satisfactorily. The Third High- way Project (Ln. 1222-SE, US$15 million, 1976), a follow-up on the operations under the Second, provides for the strengthening of an additional 199 km of paved roads, technical assistance and consulting services to continue the maintenance program and improve transport planning through DSP, preinvestment studies, and a study of the domestic contracting industry. Implementation of the strengthening program has been satisfactory. However, the execution of the maintenance component is beset by difficulties as explained in para. 2.12. The technical assistance to DSP was not well utilized at the beginning of the project, but efforts are now concentrated on the execution of a comprehensive transport study which is proceeding more satisfactorily. The studies financed under the project have been satisfactorily completed. Since funds remained under the Loan, it was agreed in early 1979 to finance further improvements to regional workshops and to the training center in Dakar. 1/ See Project Performance Audit Report, Senegal First Highway Project, September 20, 1977.  - 6 - 1.19 The Feeder Roads Project (Loan 1221-SE, US$6.6 million, 1976) pro- vides for a three-year program for improvement and/or maintenance of 1,250 km of feeder roads, technical assistance, and procurement of equipment and sup- plies. Project implementation has been seriously hampered by lack of local staffing and funding. However, the Government has recently given the project high priority in support of its rural development policy and is taking appro- priate steps to improve implementation. 1.20 The strategy for future investment in the transport sector is seen as: (i) assuring the efficient operation, maintenance, and necessary rehabili- tation of existing transport facilities; and (ii) making selective investments in new capacity where justified on the basis of traffic demand or complementary investments. The proposed project seeks to implement this strategy by assur- ing that the road network is adequately maintained and rehabilitated when required. II. THE HIGHWAY SUBSECTOR A. The Network 2.01 Senegal has a relatively well developed road network compared to other, larger African countries whose GNP's are about double Senegal's: including roads under construction Senegal will have about 50% more paved roads than Cameroon which has a comparable GNP, and about 10% more paved roads than Ivory Coast or 70% more than Zaire. The country's classified road network totals about 13,740 km, including 2,840 km of paved roads and 5,550 km of all-weather gravel and earth roads; the rest of the system (5,350 km) con- sists of tracks. 2.02 While the paved network has grown by about 25% since 1972, the length of the lower standard roads increased by 61% due in part to the re- classification of the network. The development of the network is shown below: 1972 1974 1978 Paved roads 2,256 2,586 2,836 Engineered gravel and earth roads 645 456 448 Other all-weather gravel and earth roads 1,640 2,794 5,108 Tracks 4,480 7,435 5.350 Total 9,021 13,271 13,742 Source: General Directorate of Public Works.  -7- 2.03 This rapid growth in the classified network has not been matched by a corresponding increase in maintenance capability, either in terms of personnel or finance. In addition, many roads built before independence in 1960 are nearing the end of their economic life. As a result, the condition of the network has deteriorated significantly and only the new roads remain in good condition. It is estimated that as many as half the paved roads are showing such signs of deterioration as uneven surfaces, potholes, pavement cracks, ravelled edges, and washed-away shoulders. A similar situation exists on gravel and earth roads, which are passable during part of the year only. In 1978, after a continuous dialogue with the Bank, the Government began addressing the basic problems. Earlier, the Second and Third Highway Projects provided for organizational improvements and maintenance programs, but their implementation was only partly successful. The proposed project will assist the Government in solving these problems and help to bring the road network up to standard. These improvements are a prerequisite to achieving the country's development objectives (para. 1.03). B. Characteristics and Growth of Road Traffic 2.04 Statistics on the vehicle fleet are collected by the Directorate of Transport (DOT) of the Ministry of Equipment (ME). DOT registers new vehicles, collects some information on withdrawals, and estimates the size of the fleet. DOT estimated that the fleet totaled 80,488 at the end of 1977, or about one for every 60 inhabitants. This is relatively high compared to neighboring coastal countries: 1/80 in Ivory Coast and 1/180 in Nigeria. The overall fleet, about two-thirds of which is passenger cars, has grown at about 4% p.a. since 1970. The number of buses and heavy vehicles, however, has increased almost twice as quickly, as well as having increased in size and weight. The legal maximum axle load was recently increased from 10 to 13 tons. 2.05 The table below shows the growth and composition of the vehicle fleet: Estimated Vehicle Fleet, 1970-77 Passenger Special Road Year Cars Buses Trucks Vehicles Tractors Total 1970 38,235 3,407 17,481 688 532 60,343 1971 40,380 3,485 18,078 691 563 63,197 1972 42,734 3,716 18,821 715 593 66,579 1973 44,218 3,939 19,624 748 642 69,729 1975 47,493 4,168 12,115 827 722 74,325 1976 49,257 4,326 22,071 865 803 77,322 1977 50,875 5,622 22,145 992 854 80,488 Growth Rate (X) 4.2 7.4 3.4 7.5 7.0 4.2 Source: General Directorate of Transport.  -8- 2.06 Traffic data is collected by the General Directorate of Public Works. Traffic volumes are highest in the Cap Vert region, especially in and around Dakar where they reach an average of 6,000 to 10,000 vehicles per day (vpd). Outside this region, traffic decreases rapidly, averaging a maximum of about 2,000 vpd on the main road between Dakar and Kaolack, about 150 km to the east. Traffic on the remainder of the paved road network ranges from about 50 vpd to about 1,000 vpd. 2.07 The increases observed in the fleet and the traffic flows are broadly corroborated by fuel consumption statistics. Gasoline consumption grew at about 7% p.a. since 1970 as shown in the following table: Road Vehicle Fuel Consumption, 1970-77 (in thousands of cubic meters) Growth Rate 1970 1971 1972 1973 1974 1975 1976 1977 X Gasoline 105 112 120 124 125 140 159 167 7 Diesel Fuel 28 35 40 51 88 90 99 112 22 Total 133 147 160 175 213 230 258 279 11 C. The Road Transport Industry 2.08 The road transport industry comprises three major segments: (i) a modern, private sector, generally with significant foreign ownership; (ii) a traditional private sector of owner-drivers and small firms; and (iii) vehicles owned by public and semi-public agencies such as the Office National de Cooperation et d'Assistance au Developpement (ONCAD), which is responsible for most groundnut transport, partly through subcontracting arrangements. The modern sector is made up of a few large firms, which have their own maintenance and repair facilities and generally have new vehicles. They carry the products of trading companies and modern businesses (petroleum, logs, refrigerated products, etc.) at economic rates. Some trading companies also have their own fleets. The traditional sector is made up of owner- drivers or small firms carrying primarily groundnuts, foodstuffs, cattle and small loads, generally in small, older trucks. Most of its income is earned from the seasonal transport of groundnuts; off season, competition is fierce for the decreased volume of traffic. Tariffs charged by the traditional sector appear to be low but are sustained by frequently over-loading vehicles, neglecting maintenance and insurance, and deferring vehicle replacement. This, in turn, accentuates the differences between the modern and the traditional sector and prevents small firms from gaining access to more lucrative modern markets. 2.09 The regulation of the road transport industry is satisfactory under the Directorate of Transport (DOT) which was created in part for this purpose in 1963. The regulations have not inhibited the development of the industry, as evidenced by the rapid growth of the vehicle fleet. The Government limited entry into the trucking industry to Senegalese nationals in 1973, which strengthened local control over the industry. Some road transport tariffs are  - 9 - regulated and some are not. Groundnut tariffs, for example, are set by ONCAD and vary widely according to type of road travelled. ONCAD's system ade- quately reflects relative differences in vehicle operating cost, travel time, and the need to use small vehicles on poor roads. Official tariffs tend to be respected by the traditional trucking sector only when hauling for public and semi-public agencies. Inter-urban bus and taxi fares are also regulated and respected, as they are well known to the public. * 2.10 Regulations limiting vehicle weights and dimensions are also satis- factory, with the maximum axle load having recently been increased to 13 tons. However, the regulations are not enforced. In a 1974 survey, from 30 to 40% (according to the road) of all trucks checked were overloaded. This was particularly prevalent among phosphate trucks travelling from Taiba to Dakar and for sugar transport between Richard Toll and Dakar, and has resulted in considerable damage to these roads. Enforcement of axle-load regulations is considered a sine qua non for the proposed project if investments are to last. Although a vehicle scale was provided under the Second Highway Project, it is still not operational. The Government has agreed to prepare an action program by December 1980 and take effective steps to enforce axle load limits and restrict the importation of vehicles to those that fall within the legal weight and dimensions. The DSP with technical assistance provided under the Third Highway Project, intends to investigate ways to assist and educate the domestic trucking industry in traffic laws and safety, as part of a compre- hensive transport plan. This issue is being actively pursued in connection with the supervision of the Third Highway Project. D. Road Maintenance 2.11 Road maintenance is the main problem affecting the sector. The paved road network is showing signs of deteriorating or weakening on about 1,600 km. Depending on weather conditions, transport on some gravel and earth roads is possible only during part of the year. 2.12 Efforts to improve road maintenance began under the First Highway Project, when, in 1972, consultants Louis Berger International, Inc. (USA) recommended establishing a centrally administered road maintenance system. Under the Second and Third Highway Projects, equipment and technical assis- tance were provided, and 233 km of paved roads were rehabilitated and strengthened. These projects have significantly improved the road network. The overall objective of achieving proper maintenance on the entire network, however, has not yet been attained. Equipment has been purchased, a cost accounting system partly implemented, a road inventory completed, the regions have prepared annual work programs, and some personnel have been trained and are in place. Actual maintenance operations are not yet satisfactory, bri- gades do not operate efficiently, performance budgeting data is generally not evaluated, equipment repair is slow, and operating funds insufficient and late. The main problems impeding proper maintenance can be summarized as: (i) cumbersome organizational set-up, as discussed below; (ii) the shortage of qualified road maintenance technicians; and (iii) the inadequate funds for road maintenance.  - 10 - 2.13 To improve road maintenance operations, the Government is taking four major steps: First, the road maintenance structure has been reorganized, the purpose of which is to (a) make the regions responsible for maintenance, (b) have contractors carry out periodic maintenance, (c) execute routine maintenance by force account and (d) simplify procedures (para. 2.17). Second, a permanent training program for road maintenance will re established (para. 2.20). Third, road maintenance will be adequately financed from the Road Fund (para. 2.26). Fourth, to protect past and future investments the Government will be asked to tighten and strictly enforce its regulations on axle-load limits (para. 2.10). The proposed project will assist the Govern- ment in solving these problems by continuing efforts begun under previous projects in conjunction with new measures to improve organization, training and financing. E. Administration 2.14 The Ministry of Equipment's Public Works Department (DPW), which was in charge of road construction and maintenance, became the General Directorate of Public Works (GDPW) in March 1979. The organization of the former DPW was one of the problems impeding road maintenance. 2.15 Before its reorganization, DPW carried out road maintenance through a central Maintenance Division, an Equipment Division, two mobile regravelling brigades, and eight regional divisions. The Maintenance Division was ineffec- tive because it was not able to exercise control over the regions. The Equipment Division operated independently and did not coordinate its work with that of the Maintenance Division; in addition its equipment was poorly maintained and was not delivered to the regions on time. The mobile brigades did not execute the regional regravelling programs on schedule, and the quality and quantity of their work was inadequate. 2.16 During supervision of the Second and Third Highway Projects, the Bank and the Government discussed the best means to achieve effective road maintenance. In 1978 they agreed on a new set up, the main features of which are the following: (a) Road maintenance operations were to be decentralized--brigades, personnel, equipment and workshops to be under the direct authority of regional offices; (b) Regions were to concentrate on routine road maintenance, main- tain and make minor repairs on its equipment and supervise periodic maintenance works (regravelling and resurfacing) which was to be done by contractors; and (c) The Maintenance and Equipment Divisions were to be merged into a Directorate of Road Maintenance and Equipment (DRME) located in Dakar. It was to monitor regional programs through a per- formance accounting system and to provide logistical equipment support to the regions by operating a central workshop for major equipment repairs and overhauls and by setting up a central depot for spare parts.  - 11 - 2.17 The Government has incorporated these ideas into the new organiza- tion, GDPW. GDPW includes DRME, the Directorate of Study and Planning (DSP) which previously reported directly to the Minister, a Directorate of Road Construction (DRC), and eight regional divisions corresponding to the eight administrative regions of the country (see organization chart). F. Staffing and Training 2.18 GDPW has about 1,300 employees among whom are 50 engineers ; 120 technicians; 670 mechanics, operators and drivers; 160 administrative em- ployees; and 300 skilled and unskilled laborers. Most of the engineers and technicians were trained in French professional schools and a few were trained in Senegal's Ecole Polytechnique de Thies and Institut Universitaire de Technologie de Dakar. Senegalese technical schools offer only basic training with no specialized training in public works. A study by consultants Organi- zation for Rehabilitation through Training (ORT), carried out in June 1978, showed that out of 1,300 GDPW positions 880 required skills which are only partially or not taught at all in Senegalese schools. 2.19 The ORT study further showed that, except for engineers and tech- nicians, 80% of the employees are over 40 years old and that a third will retire in five years when they reach 55. As a result of the Government's policy to slow down the growth of the civil service work force, only about 15% of GDPW's employees was hired within the last 10 years. According to the study, 55% of the technicians and 90% of the mechanics, operators and drivers have an inadequate level of professional training and about 46% of the employees excluding engineers and technicians, especially the younger ones, are illiterate. It is estimated that in the next five years GDPW will need to recruit and train 600 employees, including 5 engineers, 90 technicians, 465 mechanics, operators and drivers, 30 accountants and 10 storekeepers, and retrain about 600 existing employees. 2.20 The shortage of trained manpower is one of the reasons why Senegal lacks well-maintained roads. The Second and Third Highway Projects provided for on-the-job training of mechanics and operators and training of cost accountants; these projects also financed improvements to GDPW's training center and the purchase of training equipment. The proposed project will reinforce this effort and introduce training as a permanent institution within GDPW. The training component will include the first three years of an upgraded training program, run by a Senegalese manager assisted by consultants. It is expected that at the end of the project, training will be carried on by Senegalese. G. Investment and Financing 2.21 Senegal has invested substantially in the development of its road network. The paved road network increased from 1,047 km in 1956 to 2,836 km in 1978. Contracts have been signed or projects are underway to increase it by an additional 500 km in the next four years, all of which are prefinanced at relatively high cost. All this road construction may not be economically justified. The Government has stated its intention to de-emphasize new road  - 12 - construction, which is in line with what the country can afford to invest outside of the primary sectors. It is also consistent with the recently adopted policy of fiscal restraint, including reducing commercial borrowing, which was partly a result of discussions with the IMF and the Bank Group in 1978 and 1979. 2.22 Highway expenditures, exclusive of foreign financing, increased from about CFAF 2.5 billion (US$11.9 million) in FY1971 to CFAF 4.0 billion (US$19.0 million) in FY1979 (Annex 1). Almost one-half of this has gone toward new construction and the other half to maintenance and administration. An additional CFAF 2.7 billion (US$12.9 million) in new construction was financed annually from foreign borrowing during FYs1970-77; the Bank Group, European Development Fund and the Arab Bank for Economic Developmint in Africa were the principal donors. 2.23 Road maintenance is financed from the general budget, while new construction is financed from external sources and/or from the Road Fund (through the investment budget). Coming from the general budget, funds for road maintenance (and administration) are subject to debate and cuts in the legislature with the result that funds are less than needed and are not made available until late in the maintenance season, delaying the maintenance program. Funds for new construction, on the other hand, were not subject to the same review process. The result has been that while maintenance funding has been inadequate, there has been overinvestment in new paved roads. 2.24 The Road Fund, a special account established in 1953, is allocated an earmarked portion of fuel taxes. The Road Fund is used for construction both directly and for paying prefinancing by contractors. Because of the ease of obtaining funds, road construction has commonly been prefinanced by con- tractors in recent years. This practice has resulted in construction costs that are about 30% higher than would have been the case under competitive bidding. The debt service on prefinanced construction alone will average CFAF 5.9 billion (US$28.1 million) p.a. during FYs 1980-82. 2.25 In addition to fuel taxes, road user taxes include vehicle entry duties and miscellaneous fees. It is estimated that, at present, total road user revenues are more than double the total amount spent on roads. Revenues from import duties and miscellaneous fees were estimated by consultants Berenchott-Bosboom to total CFAF 3.3 billion (US$14.8 million) in 1972, the only year for which statistics are available. The Government collected CFAF 13.1 billion (US$59.5 million) in fuel taxes in 1975, the most recent year for which data are available, as shown below: Revenue from Fuel Taxes, 1975 Tax Rate Consumption Revenues (CFAF/litre) (million litres) (CFAF million) Regular Gasoline 44 74.5 3,278 Premium Gasoline 60 112.6 6,756 Diesel Fuel 29 107.9 3,129 Total 295.0 13,163  - 13 - 2.26 The Government and the Bank have discussed the dual problem of under- investment in maintenance and over-investment in construction and have arrived at a tentative solution. The Road Fund will be used to finance maintenance and the investment budget to finance all new road construction. Under this solution, the Road Fund would finance both routine and periodic maintenance, including road rehabilitation and strengthening and equipment renewal and will be provided with about CFAF 3.0 billion (US$14.3 million) starting in FY1981. This allocation will increase in following years in accordance with increases in the road network and inflation. The Road Fund would also be used to finance small construction works ("Fonds de travaux et bretelles") costing up to CFAF 300 million p.a. In addition the Government will create a special account ("caisse d'avance") in the Treasury to finance small, local road maintenance expenses totaling not more than CFAF 700 million (US$3.3 million) a year; the special account will be replenished from the Road Fund. 2.27 As a prerequisite to negotiations, the Government has provided the Bank with an acceptable draft decree specifying the sources of funds to be allocated to and the uses and amounts of disbursements from the Road Fund. As conditions of effectiveness, the Government will have to issue and publish (i) a decree reorganizing the Road Fund, and (ii) an arrete establishing the special account (caisse d'avance). 2.28 The Government has agreed to delete road maintenance funds from the general budget, to include road construction in the investment budget and to transfer the debt service on roads already built from the Road Fund to the national debt. In addition, to keep a rein on new construction expenditures, the Government has agreed to consult with the Bank before undertaking a new road investment program. H. Engineering and Construction 2.29 DSP is responsible for feasibility studies and final engineering for road construction, and DRC for road construction. Engineering studies for road construction and supervision of construction works are carried out mainly by foreign consultants; local consultants, including the Government-owned Societe Nationale des Etudes de Developpement (SONED), have been successfully acting as subcontractors. Contracts for road projects are normally awarded on the basis of competitive bidding. DRC calls bids and evaluates bids. Approval and signature of contracts are the responsibility of the National Tender Board and either the Minister of Finance or the Prime Minister, the latter if the contract amount exceeds US$250,000. The construction industry is dominated by foreign contractors (75% of the business), but the domestic construction industry is making determined progress. Two major Senegalese construction firms are competitive in all sectors of the industry, and 110 small- and medium-sized firms are engaged primarily in the housing sector.  - 14 - 2.30 The Government wants to promote the local consulting and construction capability. The proposed project will support this objective by enabling local consultants, either in joint ventures with or as subcontractors to foreign firms, to participate in studies and supervision under the project, and by grouping the civil works into medium-sized lots of about US$10 million to accommodate domestic contractors. 2.31 The national soils laboratory, Centre Experimental de Recherches et d'Etudes pour l'Equipement (CEREEQ) satisfactorily carries out all soils studies for design and construction supervision of all civil engineering structures, technological research, and construction materials with the assistance of the French Centre d'Experimentation du Batiment et des Travaux Publics. From its financial statements, CEREEQ appears sound. However, it has had difficulty in carrying out its work on time, because it must depend on advances from the general treasury. The Government has agreed to grant CEREEQ sufficient financial autonomy, including if necessary a caisse d'avance, to enable more efficient operations. III. THE PROJECT A. Project Objectives 3.01 The main road network of Senegal is now approaching a form which meets the country's economic and social needs, but the roads have not been kept in good repair. The lack of regular maintenance on all roads and of timely strengthening of more heavily trafficked roads has meant that road pavements have deteriorated to the extent that vehicle-operating costs are grossly inflated. Efforts have already begun under previous Bank projects to improve the planning and execution of road maintenance and to strengthen and rehabilitate some of the more heavily trafficked roads. The major objective of this project is to continue to increase the Government's capacity to keep the road system in adequate condition, particularly reducing the acute shortage of trained technicians and other skilled workers; to improve the Government's capacity to plan road maintenance and strengthening and rehabil- itation works in the most economical way; to rehabilitate 200 km of heavily trafficked roads; and provide for the construction of the Louga-Dahra road. B. Project Description 3.02 To achieve the above objectives, the proposed project includes: (a) the first three years of a training program, with classroom instruction and a training production brigade for road main- tenance personnel, including:  - 15 - (i) procurement of materials and supplies; and (ii) technical assistance and fellowships for local trainees and for training of consultants' counterparts abroad; (b) a two and a half year technical assistance program for execution of road maintenance; (c) procurement of equipment and construction of offices for the Government soils laboratory (CEREEQ) to enable it to participate in the preparation and supervision of road maintenance programs; (d) design of proper and systematic pavement maintenance and strengthening programs through the introduction of appropriate technologies; (e) strengthening and rehabilitation of 200 km of primary paved roads; and (f) construction of the Louga-Dahra road (85 km) to two-lane, paved standards. Training Program 3.03 One of the major problems impeding the efficient execution of road maintenance is the lack of trained personnel at all levels of the road maintenance organization (para. 2.19). The training program envisaged under the project should provide needed personnel for the next five years to carry out proper and timely road maintenance operations. During the three-year program, about 360 existing employees should be retrained, including 30 engineers, 35 technicians, 280 mechanics, operators and drivers, 10 accountants and 5 storekeepers. Another 360 employees should be recruited and trained, including 3 engineers, 50 technicians, 280 mechanics, operators and drivers, 20 accountants and 7 storekeepers. The training program as prepared by consultants ORT would combine classroom instruction with field training, greater emphasis being placed on the latter. A mechanized brigade will be used for field training, which, in addition to its training functions, is to maintain trunk roads in the Cap Vert and Thies regions assigned to it by GDPW. 3.04 The Third Highway Project provided improvements to the training center building and construction of an annex at the central workshop in Dakar; procurement of equipment for the training center, the annex, and for the training/production brigade; and six man-months of technical assistance. The proposed project will provide technical assistance (210 man-months) to  - 16 - implement the three-year training program, including the selection of trainees and the operation of the training/production brigade; and procurement of supplies for the operation of the training program. About 20 fellowships will be granted to GDPW personnel to enable them to study abroad for 6 to 12 months. During their training period, GDPW personnel will receive daily allowances in addition to their normal salaries. These should serve as an incentive to prospective trainees and should attract existing GDPW personnel from distant GDPW divisions. The training center will be headed and run by a competent Senegalese professional with the help of consultants. Senegalese instructors will receive on-the-job training in the center and additional training abroad. As designed, the proposed training package is the most cost-effective means of providing specific skills in road construction and maintenance to GDPW personnel after their formal training in the Senegalese schools. The training program will be reviewed every twelve months by the Government and the Bank. Details on consultants' qualifications, team com- position, length of service and terms of reference are given in Annex 4. Consultants' terms of reference have been agreed upon at negotiations. Technical Assistance for Road Maintenance 3.05 Consultants' services for improvement of road maintenance were pro- vided under the First and Second Highway Projects and are continuing under the Third. Consultants were expected to assist in: (i) planning and organiz- ing the annual maintenance program; (ii) supervising and training maintenance brigades in the field; (iii) training DPW personnel in cost accounting pro- cedures; and (iv) organizing and supervising equipment repair at the central equipment division and local workshops, and training local personnel in all these activities. 3.06 Under these projects, consultants have started road maintenance brigades in each region, conducted on-the-job training of road technicians and mechanics, and helped the regions execute their annual road maintenance programs. They were successful in introducing to reluctant GDPW personnel cost accounting as a tool for management of road maintenance programs. Their work was hampered by institutional and financial difficulties experienced by the country. The new organizational set-up (para. 2.17), the financing of road maintenance through the Road Fund and the creation of a special account for minor expenses (para. 2.27) should help solve these problems. 3.07 The additional technical assistance (106 man-months) will be provided to DRME under the project to assist the regional services in: (i) setting up the new organization; (ii) planning and supervising the execution of mainte- nance operations; and (iii) consolidating performance accounting as a tool for management of maintenance programs. Details on consultants' qualifications, team composition, length of services and terms of reference are given in Annex 5. Consultants' terms of reference have been agreed upon at negotiations.  - 17 - Equipment and Offices for Soils Laboratory 3.08 CEREEQ, the national soils laboratory, carries out research on the utilization of construction materials and conducts soils investigations for the design and construction supervision of civil engineering structures including roads, bridges and buildings. As required by GDPW, CEREEQ will expand its activities to road maintenance and assist DRME in the systematic planning and supervision of road maintenance operations and pavement strengthen- ing programs (para 3.09). Under the Third Highway Project, soils testing equipment was provided to CEREEQ. The proposed project will provide for construction of a new wing to the existing building and the procurement of pavement testing and soils exploration equipment. Details on items to be purchased are given in Annex 3. Design of Pavement Maintenance and Strengthening Programs 3.09 One of the aims of the proposed project is to introduce appropriate methodologies to carry out proper and systematic pavement maintenance and strengthening programs to prevent premature road reconstruction. The proposed project thus includes a study to develop a systematic approach to pavement maintenance and strengthening. It will cover about 1,600 km of the paved network, including about 1,100 km of roads built in the 1960's and early 1970's, which are showing early signs of deterioration or pavement weakening. The proposed study will include: (i) a systematic pavement testing program on the critical primary road network; (ii) a study of appropriate road mainte- nance operations and techniques; (iii) design of appropriate seasonal routine road maintenance programs; (iv) establishment of a long-range resurfacing program; and (v) pre-investment studies and final engineering for pavement strengthening works on roads that can no longer be maintained by the routine maintenance and resurfacing programs, as will be agreed upon between the Government and the Bank at the studies' review stage. The study's terms of reference, given in Annex 6, have been agreed upon at negotiations. Strengthening and Rehabilitation of Paved Roads 3.10 A 1971 Louis Berger study, carried out under the First Highway Project, identified about 1,000 km of primary roads whose pavement needed strengthening. Most of these roads (900 km) were built before Senegal's independence in 1960. Under the Second and Third Highway Projects, pave- ment strengthening works were successfully carried out on 233 km. 3.11 The proposed project will continue previous efforts and provide for strengthening and rehabilitation of an additional 200 km of paved roads which were proposed by consultants Louis Berger as part of the Third Highway Proj- ect. Improvement works will be carried out on the following ten road sections:  Road Section Length 1977 Traffic km (vpd) Dakar-Rufisque 4.6 9,500 Diam Niadio-Ndiass 15.0 2,150 Nguekokh-Mbour 4.6 2,150 Sebikotane-Thies 21.7 4,500 Fatick-Kaolack 42.0 1,750 Kaolack-Passy 8.1 570 Passy-Sokone 17.5 500 Sokone-Karang 11.4 430 Kaffrine-Mbacke 35.3 200 St. Louis-Ross Bethio 40.0 960 200.2 3.12 These roads were built between 13 and 30 years ago; they now carry up to 10,000 vpd with axle loads frequently exceeding the present permissible single axle load of 13 tons. The pavements have not been regularly maintained and strengthened. On some lengths, mainly those carrying lighter traffic, the pavements can be restored to adequate condition by repairing potholes and by providing new running surfaces, i.e., by strengthening the existing pavements. But over much of the lengths, the condition has deteriorated to the extent that reconstruction of the pavement is necessary, and some lengths of pavement need to be widened to accommodate the traffic flows. As proposed under consultant Louis Berger's June 1978 study of a pavement strengthening program, the improvements consist of: (i) rebuilding subgrades, (ii) construction of a new base course and a double surface treatment or a 3 cm to 4 cm asphalt concrete wearing course; (iii) regravelling of shoulders; (iv) improvement of drainage structures; and (v) widening of the roadway to 8.5-13 m and of the pavement to 6-10 m on sections now below these standards. The road design is based on a maximum single axle-load of 13 tons. It is expected that resurfac- ing will be required after 7-8 years. A description of each of the road sections and of the improvements proposed is given in Annex 7. Construction of the Louga-Dahra Road 3.13 The Louga-Dahra corridor, which provides access to a groundnut- producing area and several villages, is now served by a rail branch line and a sand track. The line is laid directly on sand and is no longer being maintained. The Government has been subsidizing operation of the line and intends to dismantle it as soon as a road is built. The sand track, running parallel to the rail line is passable only during the dry season and only to four-wheel drive vehicles and light trucks.  - 19 - 3.14 The proposed project provides for the construction of the Louga- Dahra road to two-lane paved standards, as per consultants SETEC in their November 1978 study carried out under the Third Highway Project. The pro- jected road (85 km) will be north of the rail line and crosses a flat terrain studded with rolling sand dunes. The road is designed for a speed of 80 km/h and a maximum single axle-load of 13 tons. The road alignment will be straight on 67 km or 79% of its total length, with grades below 2% and 1,500 m minimum radius for horizontal curves. The roadway will be 9 m wide and paved on 6 m. The pavement will consist of a subbase and a 20 cm laterite or 15 cm cement stabilized soil base course and a double surface treatment wearing course. C. Project Cost and Financing 3.15 The total cost of the project, net of taxes and duties, is estimated at US$59.5 million equivalent, with local costs of US$15.0 million equivalent (25%) and foreign costs of about US$44.5 million equivalent (75%). Government has agreed to exonerate the project from taxes and duties which would have totaled about US$12.6 million equivalent. Project costs, detailed in Annex 8, are summarized below:  - 20 - Cost Estimate (January 1980)