Chad - Second and Third Highway Projects

DocUmet of The World Bank FOR OMCIAL USE ONLY .RcPNoe 5608 . PROJECT COMPLETION REPORT CHAD SECOND AND THIRD HIGHWAY PROJECTS (CREDITS 490 AND 840-CD) April 19, 1985 West Africa Projects Transportation II I hs docmet has a reticted distibdooi nd may be used by recpiens only im the paformance of dwir offwic dutie Its cotents y not othlrwise be disced without World Bank thori |  FOR OMCIAL USE ONLY PROJECT COMPlETION REPORT CEAD SECOCD AND THIRD HIGHIWAY PROJECTS (CREDITS 490 and 840-CD) TABLE OF CONTENTS SECOND HIGHWAY PROJECT Page No. Preface ~~~.....................................................i sic Dta Sheet .................................................... ii Highlights . .... .. ......... , ... I. INTRODUCTION .**... *...................9......... 1 II. PROJECT FORMULATION AND APPRAISAL .............. .......... 1 III. IMPLEMENTATION ...................... ........ e.9 ......... 2 IV. DISBURSEMENTS ............................................. 4 THIRD HIGHWAY PROJECT Preface .7......... 7 Basic Data Sheet ................................................ 9 Highlights ...................................................... 11 I. INTRODUCTION ............................................. 13 II. PROJECT PREPARATION ... ...... 13 III. OBJECTIVES AND CONTENT OF THE PROJECT .................... 14 IV. IMPLEMENTATION ........................................... 14 V. CONCLUSION ............................................... 14 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.  a PROJECT COMPLETION REPORT CHAD SECOND HIGHWAY PROJECT (CREDIT 490-CD) April 19, 1985 0 West Africa Projects Transportation II  PROJECT COMPLETION REPORT CHAD: SECOND HIGHWAY PROJECT (CREDIT 490-CD) Preface 1. This report reviews experience with the second highway project in Chad, supported by Credit No. 490-CD for US$ 3.5 million approved in May 1974. The Credit closed, almost fully disbursed, on June 30, 1980. 2. The report was prepared by the West Africa Projects Department, Transportation II with assistance from West Africa Programs II Department staff on the basis of a review of the project files, Appraisal Report and Credit documents. 3. In accordance with the revised procedures for project performance audit reporting, this Project Completion Report was read by the. Operations Evaluation Department (OED) but the project was not audited by OED staff. The draft report was sent to the Borrower for comments; however, none were received.  - ii - PROJECT COMPLETION REPORT C-IAD SECnNn HTrWAY PROJECT (CREDIT 490-CD) BASIC DATA SHEET KEY PROJECT DATA Aopraisal Actual Total Project Cost (USS million) 3.5 n.a. Credit Amount (USS million) 3.5 _ * Disbursed (USS million) - 3.415 Cancelled (USS million) - 0.085 Other Financing (US$ million): 00 00 Date for Completion of Physical Components 1980 n.a. * Proportion Completed by Above Date - 97Z (in cost) Incremental Economic Rate of Return: Road Maintenance 18Z n.a. Total Project 1iz n.a. CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS (USS million) FY75 FY76 FY77 FY78 FY79 FY80 Appraisal Estimate 0.80 2.00 2.70 2.90 3.10 3.50 Actual -- 0.64 2.00 2.97 3.35 3.40 Actual as Z of Estimate 00 32 74 102 108 97 OTHER PROJECT DATA Original Plan Revision Actual Negotiations 04/15/74 04/29/74 04/29/74 Board Approval 05/15/74 06/11/74 05/30/74 Signature - - 06/28/74 Effectiveness - 01/28/75 03/07/75 Borrower: Republic of Chad. Executing Agency: Directorate of Public Works. Countrv Exchanee Rates. Name of Currency (abreviation): CFA Franc (CFAF) Rate at Appraisal: USSI - CFAF 250 Rate during Project's Implementation: Calendar Year: 1975 1976 1977 1978 1979 1980 Average Rate: CFAF 214 239 245 225 212 211 MISSION DATA * Month/ No. of No. of Man- Date of Mission Organization Year Weeks Persons Weeks Report Identification IDA + 12/71 to n.a. n.a. - - Consultant 06/73 Preparation Consultant: 02 to n.a. n.a. - 07/73 06/73 Appraisal IDA 10173 3 1/2 3 10 05i28/74 Surervisions IDA 11/74 1 1 1 -'J2/07/75 06/75 1/2 1 1/2 07/21/75 11/75 1 1 1 03/05/76 07/76 1 1/2 2 3 11/04/77 12/76 1/2 3 1 1/2 03/10/77 04/77 1/2 3 1 1/2 05/24/77 02/78 1 2 2 03/02/78 09/78 1 2 2 10/05/78 Exploratory MDA 02/80 1/2 1 1/2 03/11180  - iii - PROJECT COHPIETION REPORT CMAD SECOND HIGHWAY PROJECT (CREDIT 490-CD) -- HIGHLIGHTS i. The project evolved from a Government req'.est for IDA linancing for improvement and maintenance of feeder roads in cotton-growing areas in Southern Chad and followed on from the first highway project, Credit No. 125-CD. It was appraised in October 1973, signed in June 1974, and became effective in January 1975. ii. The objective of the second higbhway project was to support the Government's five-year Cotton Development Program through: (a) a five-year improvement and maintenance program for about 800 km of feeder roads, including purchase of equipment and spare parts; (b) a two-year traffic counting campaign; tc) a training program for specialized public works personnel; (d) a feasibility study for reconstruction of about 120 km of cotton export roads; (e) reconditioning and maintenance of nine ferry-boats and a feasibility study for their replacement; and (f) experts' services for reorganization of the transport industry. iii. The project started about 10 months behind schedule because of delays in contract finalizing. These delays, coupled with Inflation, increased costs significantly and the roads improvement and maintenance program had to be curtailed to three years. The traffic counting program was also curtailed, to one year. The training program was seriously delayed by slowness in building the training facilities. iv. All studies financed under the project were satisfactorily carried out and at the time of the last supervision in September 1978, project implementation was thought to have been generally satisfactory despite Government failure to comply with the provision of the Covenant concerning the establishment of a Road Fund (para. 3.03). v. Because of the political situation in the country, no supervision was possible after September 1978. For this reason, information on the physical status of the project is lacking and it has not been possible to make any economic evaluation in this report. vi. A follow-up third highway project. Credit No. 840-CD was approved in July 1978.  PROJECT COMPLETION REPORT CHAD SECOND HIGHWAY PROJECT (CREDIT 490-CD) I. INTRODUCTION 1.01 The transport sector in Chad relies essentially on the roads network since road hauling accounts for nearly 85Z of total freight transportation. Due to the low average daily traffic, no road paving would be economically justified and, therefore, the Bank Group has so far placed emphasis on road maintenance and regraveling in order to establish all-weather liaisons between N'Djamena and the different parts of the country, mainly the potentially rich agricultural southern region. 1.02 The Bank Group assistance to Chad's transport sector thus far has been confined to one highway project. The First Highway Project (Credit 125-CD, US$4.1 million, August 1968) was geared to improving road maintenance. This road maintenance program was completed in 1973 but physical targets were only partially achieved due to severe budget- ary constra5nts. 1.03 Under Credit 125-CD, it was envisaged that the Government would finance all the recurrent expenditures of the five-year mainte- nance program from 1968 to 1972, as well as the total cost of equipment renewal in the last two years of the program. To this effect, two special funds -the Road Fund and the Equipment Renewal Fund- were created with the provision that some revenues from fuel taxes would be earmarked for these special funds. Although fuel taxes were increased as agreed in the Credit Agreement, the Government allocated only 50% of the estimated revenues from the fuel taxes to these two special funds due to overall budgetary constraints. II. PROJECT FORMULATION AND APPRAISAL A. Background 2.01 The Project has evolved from a Government request for a contribution to a five year Cotton Development Program in Southern Chad. IDA, the European Development Fund (EDF) and the French "Fonds d'Aide a  -2 la Cooperation (FAC) were involved in the preliminary evaluation of this program, whose cost was estimated to amount to US$44 million and which finally was financed by EDP and FAC without IDA contribution. However# the Government decided then to request IDA financing for the improvement and maintenance of feeder roads in those cotton growing areas. 2.02 A prelimlnary selection of the most important roads to be included in the project was made by a team of the Regional Mission for Western Africa assisted by a FAC specialist acting as a consultant. The feasibility study, financed by FAC, was carried out by consultants from February to July 1973. B. Appraisal and Project Description 2.03 The project was appraised in October 1973. Agreement was reached with the Government on all technical aspects. However two issues were discussed at the issues meeting: (a) the capacity of the Government to participate in the local cost financing and (b) the low economic return (llZ) for the feeder roads program. It was agreed that, to support the Cotton Development Program, the project was important and, in view of Chad's deteriorating financial situation, the credit would finance all the project costs. 2.04 The Project provided for: (a) a five-year improvement and maintenance program for about 800 km of feeder roads, including purchase of equipment and spare parts; tb) a two-year traffic counting campaign; Cc) a training program for the DPW's specialized personnel; (d) a feasibility study for reconstruction of about 120 km of cotton export roads; (e) reconditioning and maintenance of 9 ferry-boats and a fea- sibility study for their replacement and (f) experts' services for reorganization of the road transport industry. C. Project Cost and Financing Arrangements 2.05 The project cost was estimated at US$3.5 million with a foreign exchange component of 76% and the Association accepted to finance 100% of all components. In order not to disburse for taxes included in some operating costs, the percentage of expenditure to be financed for these operating costs was limited to 84% and 88% depending of the different natures of the components to be financed. III_ IIMPLEMENTATION 3.01 The Credit Agreement was signed on June 28, 1974 and the project was expected to become effective in January 1975. This date was delayed by 3 months. However, in the meantime, the Government submit- ted, and the Association approved the draft contracts for the training program, preinvestment studies and the feeder roads maintenance program, which had to be implemented by the Government controlled semi-public company COTONCHAD.  -3- 3.02 Nevertheless, the slowness of the Government in finalizing these contracts increased the delay. At the beginning of its implementa- tion the Project was about 10 months behind schedule. Because of this delay and the higher than anticipated rate of inflation (about 30X vi 152 estimated at appraisal), it became rapidly evident that large cost overruns in the amount of about US$1.5 should be expected. It was decided to reduce from 5 to 3 years the feeder roads maintenance program under the Project. A possible Third Highway Project then under preparation would have included a component to complete the implement- ation of the five-year program. 3.03 To ensure adequate funds for recurrent maintenance, the Government agreed to establish a separate Road Fund account in the Central Bank. This provision of the Credit Agreement has not been satisfied, although in 1976 all earmarked fuel tax revenues were al- located to the Road Fund in the Treasury. 3.04 The feeder roads maintenance and improvement program was satisfactorily implemented on all the roads included in the Project during the period in which project supervision was possible. Owing to that performance and to the fact that some adjustments had to be made in the selection of the roads to be maintained, the Government requested and the Association agreed that the list of these roads be revised. Accordingly, an amendment to the Credit Agreement was signed on June 18, 1977. The new list comprised 760 km of feeder roads. 3.05 The traffic counting program was correctly executed during the first year of implementation. But it appeared then that the Government had only scheduled a one-year traffic counting program instead of two years as originally planned. After review of the first year results, and in light of the necessity to pursue the feeder roads maintenance program within the limits of the credit, the Association finally agreed to limit to one year these traffic counts. The Government agreed to implement a second year later under the Third Highway Project then under preparation. 3.06 The training program suffered delays due to slowness in construction of the training center and procurement of equipment and unavailability of road maintenance equipment for on-the-job training. The Government requested, and the Association agreed, that the contract with the Consultant in charge of the training program be extended in order to provide continuity with the USAID-financed training program under the proposed Third Highway Project. 3.07 All studies have been satisfactorily completed. The feasibi- lity study for replacement of 9 ferry-boats pointed out that the re- placement of four of these ferries was economically justified. This replacement, therefore, was included as a component of the Third Highway Project. Because the reconstruction of the cotton export road was not found out economically justified, no further detailed engineering study was carried out.  - 4- IV. Disbursoments 4.01 At the time of the last supervision in September 1978, the actual disbursements amounted to 102Z of the appraisal estimate for that time. This was mainly due to large cost overruns. Neverthelesa, taking into account the 10 month delay before the start of the project, .his result shows that the general performance of the Government remained satisfactory until the end of 1978. .3  PROJECT COMPLETION REPORT CHAD THIRD HIGHWAY PROJECT (CREDIT 840-CD) April 19, 1985 t West Africa Projects Transportation II  =~~~~~~~~~~~~ 7-. PROJECT COMPLETION REPORT CHAD: THIRD HIGHW'AY PROJECT (CREDIT 840-CD) Preface 1. This report reviews experience with the third highway project in Chad, supported by Credit No. 840-CD for US$ 7.6 million approved in September 1978. 2. The report was prepared by the West Africa Projects Department. Transportation II with assistance from West Africa Programs II Department staff on the basis of a review of the project files, Appraisal Report and Credit documents. 3. In accordance with the revised procedures for project performance audit reporting, this Project Completion Report was read by the Operations Evaluation Department (OED) but the project was not audited by OED staff. The draft report was sent to the Borrower for comments; however, none were received.  PROJECr CgPEON REPORT CHAD THIRD HIGHWAY PROJECT (CREDIT 840-CD) BASIC DATA SHEEr KEY PROJECr DATA Appraisal Actual Total Project Cost (US$ million) 21.9 n.a. Credit Amount CUS$ million) 7.6 . a Disbursed CUS$ million) 00 Cancelled (USS million) - 7.6 ' Other Financing (US$ million): USATD 9.0 n.a. ADF 5.1 a.a. Government 0.2 n.a. Date for Completion of Physical Compouents 12J82 - Proportion of the Project no Completed - OZ Incremental Economic Rate of Return: Routine Maintenance 75Z n.a. RegraveLing 17% n.a. Replacement of Ferries 44% n.a. Total Project 502 n.a. OTHER PROJECT DATA 0rXginal Plan Revision Actual Negotiations 10/77 03106/78 05/78 Board Approval 12/77 04125/78 07125/78 Signature - - 09119/78 Effectiveness 12118/78 - Borrower: Republic of Chad. Executing Agency: Niuiist4re du Genie Civil, des Mines et de la G"ologie. Countrv exchange rate at appraisal: US$1 - CFAF 245 MISSION DATA Mouth/ No. of No. of Man- Date of Mission Organization Year Weeks Persons Weeks Report Preappraisal I IDA 07/76 1 1/2 2 3 11/16/76 Preappraisal II IDA 12/76 1 3 3 01/03/77 Preparation Consultant 10/76-02/77 - - - Appraisal. IDA/USAID 03/04/77 5 5 25 05/13/77 Post Appraisal IDA/USAID 06/07/77 2 1 2 07/28/77 Exploratory Mission IDA 02/80 1 1 1 03/11/80  - -n - PROJECr COMPLEON REPORT QAD TERD IGHWAY PROJECT (CREDIT 840-CD) HIGHLIGHTS i. The project was identified during supervision of the second highway project (Credit No. 490-CD). Preparatory studies were done by consultants financed underthat project. ii. The objective of the third project was to improve roads maintenarce and to strengthen transport planning and operations. Its principal components were: (a) a four-year maintenance program on approximately 5,300 km of unpaved roads and tracks; (b) regravelling of about 400 km of main roads; (c) construction of four ferry boats; and d) training, including fellowships, and technical assistance to strengthen sector institutions. iii. Because of the difficult political situation in Chad at the time, the Credit never became effective and, in accordance with the limit date for effectiveness specified in the Credit Agreement. lapsed in October 1980.  - .L- PROJECT COMPLETION REPORT CHAD THIRD HIGHWAY PROJECT b (CREDIT 840-CD) A. Introduction 1. The transport sector in Chad relies essentially on the roads network since road hauling accounts for nearly 85Z of total freight transportation. Due to the low average daily traffic, no road paving would be economically justified and, therefore, the Bank group has so far placed emphasis on road maintenance and regraveling in order to establish all-weather liaisons between N'Djamfina and the different parts of the country, mainly the potentially very agricultural southern region. 2. The Bank Group assistance to Chad's transport sector thus far has been confined to two highway projects and transport components in two other credits. The First Highway Project (Credit 125-CD, US$4.1 million, August 1968) was geared to improving road maintenance. This road maintenance program was completed in 1973 but physical targets were only partially achieved due to severe budgetary constraints. The Second Highway Project (Credit 490-CD, US$3.5 million, June 1974) included: (a) a five-year program of improvement and maintenance of cotton feeder roads; (b) a three-year interim maintenance program for ferry-boats; (c) a training program; (d) a program ot traffic counts; and (e) pre- investment and road transport industry studies. This project has not been fully implemented due to the severe economic and political diffi- culties with which the country was confronted in the late 1970s. Two other IDA-financed projects also had small transport-related components: (a) the Rural Fund Project (Credit 664-CD, US$12 million, December 1976) included maintenance operations on selected feeder roads sections and (b) the Sahelian Zone Project (Credit 730-CD, US$1.9 million, October 1977) included rehabilitation of six airstrips. B. Project Preparation 3. The identification of the Third Highway Project took place in the years 1975-76 during the supervision missions of the First and Second Highway Projects. Preparatory studies were carried out by consultants and financed by the Second Highway Project (Credit 490-CD). The scope of the project, initially estimated at US$52 million, has been progressively reduced by elimination of a road construction component and a reduction of the operating costs for the road maintenance program.  -14- 4. During the period of preparation, the United States Agency for International Development (USAID), the African Development Bank (ADF), the Swiss Technical Cooperation (STC), the Canadian International Development Agency (CIDA) and the Arab Bank for Development in Africa (BADEA) indicated their interest in co-financing the Project. At Appraisal, only USAID and ADF made a firm commitment for parallel co-financing. USAID financed, with the Government's participation, the training program, the fellowships and the technical assistance to the J Directorate of Transport. ADF took in charge the road maintenance program. IDA was financing 100% of all other components except a small one related to feeder roads improvement (US$350,000) for which the percentage was limited to 90% in order not to disburse for taxes. C. Objectives and Content of the Project 5. The Third Highway Project was designed to improve road main- tenance and to strengthen transport planning and operations. It was expected to help improve accessibility to administrative and commercial centers and to some of the main agricultural production areas. The project was likely to benefit some of the poorest inhabitants as a result of the maintenance of 1,300 km of roads and tracks in the Sahelian zone. Reduced transportation costs would also benefit the cotton industry, which is the main contributor to Chad's exports, and the economy as a whole. 6. The project's main components were: support of a four-year maintenance program covering approximately 5,300 km of unpaved roads and tracks; regravelling of about 400 km of main roads by a production brigade, which would also serve as a vehicle for on-the-job training; a traluing program for staff of the Directorate of Public Works; cons- truction by force of four ferry boats; technical assistance and fellow- ships to strengthen: (a) the Directorate of Public Works; (b) transport planning in the Directorate of Transport; and (c) operations of the trucking industry; a study to prepare a rural roads project; and com- pletion of the improv.ment program for cotton feeder roads, started under the Second Highway Project. D. Implementation ) 7. Because of the political situation, the Project appraised in April 1977 and signed in September 1978 never became effective. The Credit 840-CD lapsed in October 1980 when the limit date for effect- iveness was not further extended. E. Conclusion 8. Lack of road maintenance during the civil war resulted in the deterioration of the network which is now a severe constraint for .he economic rehabilitaton of the country.