Philippines - Second Rural Roads Improvement Project

Dormm of The World Bank FOR OFMCIUL USE ONLY Report No. 5971-PE STAFF APPRAISAL REPORT PHILIPPINES SECOND RURAL ROADS IMPROVEMENT PROJECT May 15, 1986 East Asia and Pacific Transportation 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 disclsed without World Bank authorization.  CURRENCY EQUIVALENT Currency Unit = Pesos (P) US$ = P 18.70 1! P 1.00 = US$0.05 FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS AADT - Annual Average Daily Traffic ADB - Asian Development Bank BAT - Bureau of Air Transport BOT - Board of Transportation CU - Construction Unit EMK - Equivalent Maintenance Kilometers ERR - Economic Rate of Return CNP - Gross National Product CRT - Gross Register Ton LIM - Labor Intensive Methods MAR - Ministry of Agarian Reform MARINA - Maritime Industry Authority MOTC - Ministry of Transport and Communications MOB - Ministry of Budget MLG - Ministry of Local Government MPWH - Ministry of Public Works and Highways NEDA - National Economic and Development Authority NTPP - National Transportation Planning Project PEO - Provincial Engineers Office PRIP - Philippine Rural Infrastructure Project PPA - The Philippine Port Authority PPDO - Provincial Planning and Development Office PNR - Philippine National Railways RRIP - Rural Roads Improvement Project RRPO - Rural Roads Program Office 1/ As of December 15, 1985.  FOR OMCUIL USE ONLY PHILIPPINES SECOND RURAL ROADS IMPRoVEMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: Republic of the Philippines Amount: US$82 million equivalent. Terms: 20 years including 5 years of grace period at the standard variable rate. Project Description: The objectives of the project are to: (a) alleviate pov- erty in rural areas by providing farmers with access to markets, thereby stimulating food production and employment opportunities through reconstruction, restoration and improved maintenance of rural roads; (b) provide the infra- structure required to support land settlement efforts; (c) facilitate provision of health care and other services to the rural population; and (d) further strengthen insti- tution building efforts in Ministry of Local Government (MLG) and Provincial Governments started under the previous project. The project includes: (a) rehabilitation and improvement of about 1,350 km of national, provincial and barangay roads in 14 provinces and three settlement areas; (b) con- struction and improvement of mechanical workshops and quality control laboratories; (c) procurement of road maintenance and construction equipment, workshop machinery and tools, laboratory and other equipment; (d) technical assistance to MLG, project provinces and MPWH to implement the proposed project, introduce labor intensive road construction and maintenance methods, and prepare feasibility studies for future rural roads improvement projects; and (e) on-the-job, local and overseas training for staff of MLG, the project provinces and MPWH. The project roads will serve areas that are predominantly agricultural, and by providing farmers with opportunities to market their products, stimulate food production and employment. The population served by the project roads generally have per capita incomes below the absolute pov- erty level for the Philippines. The main project risks are possibLe cost-overruns on the civil works component, par- ticularly in the settlement areas, and that the improvement works carried out may not be adequately maintained after completion. The former has been minimized through basing the estimated costs on updated feasibility studies and experience in implementing similar projects, and the latter through measures for improving maintenance initiated by the Government. Thb document has a resicted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclsed without World Bank authoriation.  - ii - Estimated Cost /a Local Foreign Total -- US$ Million A. Implementation through MLG Improvement of Provincial Roads in 14 provinces (750 km) 18.5 20.0 38.5 Construction and Improvement of Workshops and Laboratories 0.3 0.4 0.7 Road Maintenance, Workshop, Laboratory and other Equipment - 8.6 8.6 Consultant Services, Technical Assistance and Training 4.3 2.7 7.0 B. Implementation through MPWH CImprovement of National, Provincial and Barangay Roads in the 3 Settlement Areas (594 km) 9.6 10.4 20.0 Road Maintenance and Construction Equipment - 1.3 1.3 Consultant Services, Technical Assistance and Training 1.4 1.5 2.9 C. Land Acquisition /b 6.9 - 6.9 Project Base Cost 41.0 44.9 85.9 Physical Contingencies 3.6 4.0 7.6 Price Contingencies 13.9 14.8 28.7 Total project Cost 58.5 63.7 122.2 (of which taxes and duties) (12.8) - t12.8) Financing Plan: IBRD 18.4 63.6 82.0 Government 40.2 - 40.2 Total 58.6 63.6 122.2 Estimated Disbursement BANK FY 86 87 88 89 90 91 92 Annual 0 3.5 13.4 19.9 25.2 15.8 4.2 Cumulative 0 3.5 16.9 36.8 62.0 77.8 82.0 Rate of Return: 20Z Staff Appraisal Report: Report No. 5971-PH dated May 15, 1986. Map: fo. IBRD-19287 /a As of December 1985. 7i For all project roads.  PHILIPPINES SECOND RURAL ROADS IMPROVEMENT PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I . THE TRANSPORT SECTOR A. The Transport System ................................... 1 B. Sector Issues. ... . .. ................................ 1 C. Bank Involvement in the Sector ......................... 2 II. THE HIGHWAY SUBSECTOR A. The Network .................. . 3 B. Road User Charges and Highway Expenditures ............. 3 C. Administration and Institutional Aspects ............... 4 D. Planning Design and Construction ....................... 4 E. Maintenance . ........................................... 5 III. THE PROJECT A. Background ...................................... . 6 B. Objectives of the Project .. 6 C. Main Features ... 7 D. Detailed Description .. . 8 E. Estimated Project Cost . . 10 F. Financing .............................................. 12 G. Implementation ................12 H. Procurement and Land Acquisition .. 14 I. Disbursements . . ..... ....................... 16 J. Auditing ............................................... 16 K. Environmental Aspects .. 17 IV. ECONOMIC CVALUATION A. Main Benefits and Beneficiaries ........................ 17 B. Traffic Analysis .. 18 C. Construction and Maintenance Costs ..................... 18 D. Overall Economic Evaluation ............................ 18 E. Project Risks .......................................... 19 V. AGREEMENT TO BE REACHED AND RECOMMENDATIONS ................ 19 This report is based on the findings of a Bank mission which visited the Philippines in July 1985. The mission was composed of Messrs. B. Bjelogrlic (Engineer), L. Nordin (Economist) and J. Maweni (Financial Analyst).  TABLES Page No. 1. Project Road Sections in 13 Provinces . . . 21 2. Project Road Sections in 3 Settlement Areas . . . 23 3. List of Road Maintenance Equipment for HLG .. . 25 4. List of Road Maintenance Equipment for MPWH . . . 26 5. List of Workshop Equipment and Tools ......................... . 27 6. List of Engineering, Office and Other Equipment . . . 29 7. Workshops, Laboratories and Offices . . . 30 8. List of Technical Assistance and Training . . . 31 9. Detailed Cost Estimates . . . 32 10. Composition and Cost Estimates for a Typical Construction Unit . . . 33 11. Schedule of Estimated Disbursements . . . 34 ANNEXES 1. Action Program for Project Implementation ..................... 35 2. Project Implementation Schedule ............................... 42 3. Related Documents and Data Available in the Project File ......44 ,APS 1. IBRD-19287 Location Map for Project Provinces and Settlement Areas  PART I -- THE TRANSPORT SECTOR A. The Transport System 1.01 The Philippines economy grew at 62 a year during the 1970s thereby generating a strong and growing demand for transport services. To meet this demand, the Government undertook investments totalling about P 20 billion (US$1.4 billion) principally in highways. With the majority of the national highways improved, the Government has now turned its attention to improving maintenance, while limiting investments to strengthening bridges and high pri- ority highway sections. During the 1980s, the transport sector is expected to continue to grow but at a somewhat reduced pace in line with the slower grewth rate of the economy. 1.02 The Philippines transport system is a predominantly bimodal system, with road and water transport generally complementing, rather than competing with each other. Road transport handles 80% of the country's passenger move- ments and 60% of freight movements, but the Philippines also depends to a great extent on interisland shipping services. The railways and air transport handle only relatively small volumes of passenger and freight traffic. 1.03 The Ministry of Transport and Communications (MOTC) is responsible for transport policy, regulation and administration. Planning for the trans- port sector is, however, the joint responsibility of MOTC (for all modes other than highways), the Ministry of Public Works and Highways (MPWH) for highways and barangay roads, and the Ministry of Local Government (KLG) for provincial, city and municipal roads. The National Economic and Development Authority (NEDA) has a coordinating role. MOTC undertakes overall sectoral planning through the National Transportation Planning Project (NTPP). Sector Issues 1.04 The five major issues facing the transport sector remain those identified in the Transport Sector Report of September 1983 (Report No. 3916-PH). The most urgent problem in virtually all modes is inadequate maintenance. The second is institutional weaknesses, particularly in MOTC, MPWH and MLG, where a major problem is attracting staff of adequate caliber and experience. A third issue concerns government regulations relating to route licensing and tariff setting, particularly in interisland shipping and road transport. The fourth issue relates to the distinction between trucks licensed for hire (TH) and trucks licensed for owner use (T) at Lower fees. This is inadequately enforced, and many T trucks operate for hire, thus depriving the Governmrat of substantial revenues. The final issue concerns the future of the Philippines NationaL Railway (PNR). 1.05 The Government has recognized all of these problems, and is already dealing with most of them. Government now gives the highest priority to the maintenance of the infrastructure. The problem of attracting experienced gov- ernment staff is, however, more intractable because of low government salaries, and the technical agencies may have to continue using consultants (locaL and expatriate) for some years to come to fill critical gaps in  expertise. On the third issue, MOTC has started to review the regulatory framework for road transport and interisland shipping with the help of technical assistance under the Fifth Highway Project (Loan 2418-PH). The recommendations are expected late 1986. On the fourth, MOTC has tightened up procedures for the issue and renewal of licenses for T trucks. As regards PNR, the Government has decided against closure of the railway but has taken steps to strengthen the management in order to improve operations. C. Bank Involvement in the Sector 1.06 The Bank Group has assisted the transport sector through five high- way projects, one rural road project, three port projects and one shipping project. The total lending for highways and rural roads projects has been US$435 million. Two of the highway projects have been satisfactorily comple- ted. The Project Performance Audit Report (No. 2449, of April 4, 1979) for the First Highway Project found that problems during implementation were largely caused by civil disturbances in the project area. The project's rees- timated economic return, however, was satisfactory. The Project Performance Audit Report (No. 4757, October 25, 1983) for the Second Highway Project noted that significant difficulties and delays on one road construction contract coincided with variations from the Bank's procurement procedures (the lack of prequalification of contractors). This was corrected in subsequent projects. The report estimates that the project's economic return will be satisfactory despite some loss in benefits caused by imposition of tolls and a ban on truck traffic on one of the project roads. The ban was to facilitate additional construction work and increase traffic safety. The Government Toll Regulatory Board subsequently instructed that the ban be lifted. 1.07 Implementation of the Third, Fourth and Fifth Highway Projects was seriously delayed because of slow procurement, poor performance of contrac- tors, inadequate budgetary planning and lately financial austerity measures. To improve project implementation, MPWH agreed with the Bank on action pro- grams in 1981 and 1982, and subsequently adhered to these programs. As a result, project implementation improved significantLy. The Third Highway Project was satisfactorily completed in June 1985 and the Fourth Highway Project is expected to be completed by December 1986. The Rural Roads Improvement Project (RRIP) is expected to be completed by June 1987, about two years behind schedule. This delay was caused mainly be earlier difficulties in obtaining inflation adjustments for civil works carried out by contrac- tors. As a result contractors slowed down or stopped working. This problem has since been resolved. There are no other particular problems with RRIP which should lead to modifications of future rural roads projects. 1.08 The Bank has also supported the Government's effort to improve ports (Loans 290-PH, 939-PH and 1855-PH) and shipping subsectors (Loans 1048-PH) with total loans of US$101.6 million. Two port projects have been completed and the Third Ports Project is ongoing. The Bank's first shipping project assisted the Government in modernizing the interisland fleet of vessels. The project was completed in 1981 with a two-year delay. 1.09 A principal objective of the Bank with regard to transport sector lending in the Philippines has been to improve the infrastructure of the coun-  - 3 - try. The Bank has also assisted in strengthening the institutions dealing with the sector, especially in the establishment of an appropriate framework for planning and policy development. As a result, an important component in several recent loans has been technical assistance for national transport planning. Continued assistance in attaining these objectives will be needed in the context of the country's constrained economic conditions. The Bank also expects to continue to assist the Government in formulating sector priorities and investment programs in the context of reviewing the Public Investment Program. II. THE HIGHWAYS SUBSECTOR A. The Network 2.01 The Philippines has an extensive road network of some 157,139 km (1984), of which 25,100 km are national, 28,800 km provincial, 15,900 city and municipal, and 85,200 barangay roads. The network is, in general, quite ade- quate in location and extent, but suffers from many deficiencies. Only about 14% of the total network is paved. The condition of many roads is poor because of lack of maintenance and damage from overloaded vehicles. Missing or weak bridges diminish the usefulness of existing roads, and in some remote areas access roads are scarce. Road classification is often arbitrary as it is not aLways based on function; the Fifth Highway Project includes an overall road classification study, which is expected to lead to correction of this problem. 2.02 Major road improvement activities began in 1969 following completion of the Philippine Transport Survey (PTS). Most of the priority roads identi- fied in the PTS have been improved with local resources, supplemented by assistance from Japan, USAID, ADB and the Bank. Some 10,800 km of national highways are paved, but the rate of road improvement work has not been suffi- cient to keep up with the need for repairing or replacing deteriorating bridges. The Bank financed National Transport Planning Project study, comple- ted in 1982, concluded that the deteriorating condition of the national high- way network is a critical issue, and that inadequate maintenance is the main reason. 2.03 In 1984, there were some 980,000 motor vehicles in the Philip- pines. Overall during the past 14 years the fleet grew by 5.2% per year. Heavy overloading of trucks is quite common and a major cause of concern. The Government has carried out a Pavement and Axle Load Study (October 1985), with Bank financing under the Fourth Highway Project. The Government is reviewing the recommendations of the study to prepare the necessary regulatory changes and enforcement procedures. B. Road User Charges and Highway Expenditure 2.04 Highway expenditures in the Philippines have increased from P 573 million in 1970 to P 7.3 billion in 1983. During this period, new construc- tion averaged 65% of total expenditures, maintenance 25% and administrative costs 10%. Road revenues are obtained from specific road user charges includ-  ing fuel and oil taxes, motor vehicle fees, licenses, tolls and common carrier taxes on gross receipts. 2.05 Currently, road user charges cover expenditures for road mainte- nance, administration and 30Z of road construction. However, some problems remaint with the system of road user charges. First, many truck owners, obtain private-use licenses and pay lower fees and taxes, but then operate mainly for hire. The Government is aware of this problem and MOTC is tighten- ing enforcement of truck licensing to increase the number of trucks licensed for hire. Second, taxes are lower on diesel fuel than on petrol (P 1.67 vs P 3.13 per liter). The Government has been eliminating this differential gradually (as part of the SAL operation, Loan 2266-PH). Third, license fees charged for three-axle trucks are too low. The Government is now considering the recommendations of the Pavement and Axle Load study (completed October 1985) and will take corrective measures. C. Administration and Institutional Aspects 2.06 Responsibility for the public road network in the Philippines is divided, with some overlap between the national government 2nd local govern- ment agencies. In the National Hovernment, MPWH is responsible for national highways. At the local government level, provincial governments and cities, municipalities and barangay councils, under the overall supervision of the MLG, are respectively responsible for the provincial, city, municipal and barangay roads in their area. In addition, other government agencies are involved in planning, programming, design and construction of roads related to projects for which they are responsible. This is particularly the case for the Ministry of Agrarian Reform (MAR) which has constructed about 2,500 km of national, provincial and barangay roads under six agricultural and rural development projects. 2.07 There is a shortage of experienced middle-level technical staff. Bank support has been provided in the past for advanced technical training overseas for MPWH/MLC staff. This program has been quite successful, and the present project would continue this assistance. D. Planning, Design and Construction 2.08 Planning for national highways, including those in Metro Manila, is initiated in MPWH, and the design and supervision of their construction are also carried out by MPWH, either directly or through consultants. MLG has an overall responsibility for planning, design, construction and maintenance of provincial, city and municipal roads. MLG's field organization consists of 76 provincial governments, each headed by a Provincial Governor, 55 city councils and 1,440 municipal councils, each headed by a mayor. Each provincial, city and municipal government has an engineering office responsible for all types of planning, design, construction and maintenance. In 1980, MLG estabLished a Rural Road Program Office (RRPO). Over the last four years RRPO was strengthened, expanded, and local staff were trained, to enable RRPO to handle all provincial road projects regardless of the source of funding. Accordingly, three separate divisions were established to handle projects financed by IBRD, ADB and the Government. However, with expansion of  - 5 - the rural roads program, RRPO will need to be further strengthened, through recruitment and training of additional staff. MLG has drawn up a reorganization plan for this purpose. 2.09 With help from the technical assistance staff provided under the Rural Roads Improvement Project (RRIP), manuals and guidelines for road design, construction supervision, road maintenance, and equipment management and specifications were developed and are now being used in six pilot provinces. Most design work is carried out by consultants and only for small projects is design wurk done by provincial offices. Design of provincial roads is based on revised design standards which are considered generally adequate for various types of terrain and traffic volumes. During negotia- tions it was agreed that design standards would be continuously reviewed and economized as much as possible, taking into account the use of low cost materials. 2.10 Most of the construction work for national and provincial roads is carried out by contract. Some minor projects, particularly for barangay roads, are executed by force account, in many cases utilizing Labor-intensive methods of construction and employing village labor. Local contractors are quite com- petitive with foreign contractors and have succeeded in getting most of the contracts under ICB. E. Maintenance 2.11 The greatest weakness in the Philippine highway sector has been ina- dequate maintenance. Since the Bank's involvement in the highway sector in the early L970s, it has observed a serious lack of attention to road mainte- nance in the field. The reasons were many, ranging from inadequate organiza- tional setup to shortages of funds and equipment. Years of neglected road maintenance have thus resulted in the deterioration of a large part of the network to a point where it cannot be maintained by normal methods; restora- tion works are needed to put the roads in a maintainable condition. 2.12 The Bank has provided assistance to strengthen the maintenance in previous road projects with some success. In general, routine maintenance operations on national highways are now usually being carried out to a reason- able extent, but periodic maintenance is neglected in most regions. in 1982, MPWH began implementing highway maintenance programs in four pilot regions which established physical targets and resource requirements. MPWH is now introducing this system in all 14 regions. These changes, however, will take several years to produce results in the form of improved maintenance opera- tions. Similarly MLG, with assistance under RRIP, has improved maintenance operations in six pilot provinces and will expand this effort to 14 more prov- inces under the project. 2.13 In 1971, MPWH developed a system for the allocation of maintenance funds for nacional highways based on the concept of an equivalent maintenance kilometer (EMK), and has been using this formula since. Maintenance funds for provincial roads are provided partly from the local government budget and partly through grants from the National Government and channelled to local governments through MPWH. The EMK allocations have been increased several  -6- times to cover price escalation. However, the last increase was in 1983 when the allocations of P 11,342 for national roads, P 8,506 for provincial roads and P 4,500 for barangay roads were established. The Government, realizing that these allocations were inadequate, revised the EMK formula in 1984 and subsequently increased the allocations by 38% as of January 1, 1986. However, this increase will not fully reflect inflation since 1983. Agreement was reached during negotiations on an adequate base Level and appropriate infla- tion adjustments for the EMK formula. III. THE PROJECT A. Background 3.01 The proposed project was initiated under the ongoing Rural Road Improvement Project (Loan 1860-PH) in 1980. Under this project consuLtants undertook f asibility studies for rural roads improvements in 22 priority provinces.1 The studies were completed in 1982. Based on these studies, ADB agreed in 1983 to finance improvement of rural roads in nine provinces. The Government has requested the Bank to finance construction and improvement of rural roads in the remaining 13 provinces. During negotiations the Government requested the inclusion of an additional province. In addition, the Ministry of Agrarian Reform (MAR) had undertaken feasibility studies for the road component of a proposed second land settlement project. These studies were completed in 1981 and updated in 1985, but for various reasons, the remaining components of the project were delayed in preparation and the project has been dropped. However, since the rural roads component enjoys the highest priority in Lhe Government's regional planning, the Bank agreed with the Government to include it under this project. B. Objectives and Rationale 3.02 The Government is giving high priority to the economic development of rural areas and is complementing its economic programs with actions designed to reduce regional disparities. In particular, the emphasis is on transport investments that support countrywide attempts to stimulate agricul- tural production and increase rural incomes. The investment program is grad- ually shifting away from new construction and replacement, and is focusing more on maintenance, rehabilitation and improvement of transportation infra- structure. In particular, the Government views rural roads and tertiary ports as a means of further integrating remote rural areas with the national econ- omy. Through improved maintenance, the Government expects to extend the econ- omic life of existing assets as well as to reduce transport operating costs. Rehabilitation will be undertaken to restore delapidated assets, when regular maintenance is not sufficient and selective improvements will be made to the basic network of roads, ports and airports to eliminate bottlenecks and reduce transport costs. 1/ After these provinces have been covered, 45 provinces still remain to be covered in future programs.  - 7 - 3.03 The proposed project would continue the Bank's efforts, begun under the first Rural Roads Improvement Project, to (a) alleviate poverty in rural areas by providing farmers with easy access to markets, thereby stimulating food production and employment opportunities; (b) provide the infrastructure require.d to support land settlement efforts; (c) faciLitate provisionl of health care and other services to the rural population; and (d) further strengthen institution-building efforts in MLG and the provircial governments started under the previous project. The specific contribuition of the Bank would include continued expansion of development activities to additional provinces, strengthening of maintenance, and emphasis on labor-intensive civil works. C. Main Features 3.04 The project would consist of two separate components: (a) rehabilitation, upgrading and improvement of about 750 km of high priority provincial roads, including bridges in the following 14 provinces; Abra, Agusan del Norte, Agusan del Sur, Bohol, Cagayan, Catanduanes, Davao del Sur, Ilocos Norte, Marinduque, Misamis Orien- tal Southern Leyte, Surigao del Sur, Surigao del Norte, and Samar. This project component would be implemented by MLG and the provincial governments; and (b) improvement of about 590 km of rural roads (national, provincial and barangay) including bridges in the following three settlement areas: Kabankalan, Sultan Kudarat-South Cotabato and Wao- Banisilan. This project component would be implemented by MPWH. 3.05 Provincial Roads (MLG). This project componenc covering 14 prov- inces would consist of: (a) rehabilitation, upgrading and spot improvement of about 750 km of high priority provincial roads; (b) provision of road maintenance equipment, construction of mechanical workshops and quality control laboratories, and procurement of work- shop, laboratories, and office equipment and tools; (c) consultant services for detailed engineering and road construction supervision of the above roads; (d) technical assistance to MLG and the provincial road authorities to improve their capability to implement the project, to prepare feasi- bility studies for additional 10 provinceq and to train local staff; and (e) overseas training and special courses and seminars for senior staff selected from MLG and the 14 project provinces. 3.06 Rural Roads (MPWH). This project component covering the three set- tlement areas would consist of:  -8- (a) improvement of about 80 km of national roads, 225 km of provincial roads and about 280 km of barangay roads; (b) provision of road maintenance equipment to enable MPWH and provin- cial governments to maintain the above roads; (c) consultant services for detailed engineering and road construction supervision of the above roads; (d) technical assistance to MPWH to assist in implementing road con- struction by labor intensive methods and to provide on-the-job training for local supervisory staff and overseas study tours for senior staff. D. Detailed Description (a) Rehabilitation, Upgrading and Spot Improvement of Provincial Roads in Project Provinces 3.07 The proposed roads have extremely rough and narrow surfaces and are impassable for part of the year. Inadequate drainage, poor original design and construction and little or no maintenance have caused rapid deterioration of the surfaces even under light traffic. Under the project, about 750 km of the highest priority roads, including bridges, would be improved by rehabili- tation, upgrading or spot improvement (Table 1). The bridges would be strengthened or replaced and embankments would be raised to reduce damage dur- ing floods, where necessary. The roads will have improved drainage and cross- drainage structures; subgrades will be properly drained using appropriate materials; an4 roadway surfacing will be protected by roadside berms or shoul- ders. Some of the more heavily traveled road sections will have bituminous- treated surfaces. (b) Improvement of Rural Roads in Settlement Areas. 3.08 The project roads (Table 2) totaling about 80 km of national roads, 225 km of provincial roads and about 280 km of barangay roads, including 76 bridges totaling 1,483 m, were identified by consultants under feasibility studies financed under the Second Land Settlement Project. Roads incLuded in the project within each of the settlements have been selected on the basis of the existing population concentrations and the need to provide reliable linkages between them, main access routes, market centers, :ownships and agri- culturally developed areas. Existing gravel surfaced roads and trucks are in poor condition and inadequately maintained. Several cross-drainage points are unbridged and the larger proportion of existing bridges are made of timber and are in poor condition. The poor quality of those roads, combined with high rainfall, frequently render them unserviceable and seriously disrupt traffic flows during the rainy season. Under the project, national and provincial roads will be upgraded to the gravel engineered standards and barangay roads will be improved to all weather gravel standard with 4 m carriageway.  (c) Road Maintenance an. Other Equipment 3.09 The ongoing RRIP (Loan 1860-PH) focuses on proper maintenance of provincial roads, which are the responsibility of MLG. However, these eff3rts are currently limited to the six Bank-financed pilot provinces and the nine ADB financed provinces. Under the proposed project, these efforts will be expanded to cover 14 new project provinces. At present these provinces do not have the essential road maintenance equipment and workshop facilities to ser- vice and repair equipment, and in some provinces quality control laboratories are nonexistent. In addition, both MLG and the Provincial Planning and Devel- opment Offices (PPDO) and Provincial Engineers' Offices (PED) do not have ade- quate office ecquipment, technical tools and training equipment. To rectify these problems the project includes: (a) provision of road maintenance equip- ment for MLG (Table 3) and MPWH (Table 4), workshop equipment and tools (Table 5) materials testing, surveying, office and other equipment (Table 6); (b) construction and improvement of workshops and quality control laboratories (Table 7); and (c) technical assistance, to aid MLG and the provinces with maintenance, planning and programming, management practices, operations, workshops and equipment management and spare parts control. (d) Consultant Services 3.10 Detailed Engineering and Construction Supervision. PEOs, assisted by consultant will undertake detailed engineering and construction supervision for provincial roads, mechanicaL workshops, and testing laboratories in the project provinces. MLG will provide overall supervision and guidance. Simi- larly, MPWH, with the assistance of consultants will undertake detailed engi- neering and construction supervision for provincial and barangay roads in set- tlement areas. For these purposes, MLG and MPWH will employ consultants whose qualifications, experience and terms of reference are acceptable to the Bank. (e) Technical Assistance 3.11 MLG with technical assistance staff, will undertake feasibility stu- dies for the rema.ning roads in the 1988-1990 road program in the 14 project provinces as well as for rural roads in 10 additional provinces. Furthermore, rural roads planning and programming will be developed and tested with empha- sis on institutional improvements begun under the ongoing project, RRIP (Loan 1860-PH)- For this purpose, rILG will employ consultants totaling 102 man- months whose qualifications, experience and terms of reference are acceptable to the Bank (Table 8). 3.12 MLG has the major responsibility for providing guidance for and monitoring of development activities by the local authorities. The increased emphasis placed on decentralization by the Government puts MLG in a key posi- tion to implement this objective in provincial road improvement and mainte- nance. Over the past four years, MLG has been strengthened through recruit- ment and training of local staff. With the exception of the managerial staff, the majority of professionals are young and inexperienced. However, they are gradually taking a more active role so that outside experts mainly fulfill a cz ordinating and advisory function. In order to ensure that the project is implemented uniformly in all provinces, and in accordance with MLG's manuals  - 10 - and guidelines, technical advisory staff will assist MLG in coordinating implementation of the project particularly with regard to design, contract management and construction supervision, road maintenance and equipment man- agement. In addition, the advisors will provide on-the-job training to MLG and provincial staff so that in future they can operate independently without, or with only minimal., technical assistance. To achieve this, the project includes 168 man-months of technical advisory services (Table 8) of which 72 man-months will be expatriate and 96 man-months will be local staff. 3.13 Technical advisory services will also be provided by International Labor Organization (ILO) to MPWH to assist it in implementing the land settle- ment roads component of the project, particularly for construction and maintenance of barangay roads using labor intensive methods (LIM). In addition, the technical advisors will provide assistance and on-the-job training in areas of design, contract management and supervision, road maintenance and equipment management. To achieve these aims, 72 man-months of technical advisory services will be provided (Table 8): 36 man-months are expected to be expatriate staff and 36 man-months are expected to be local staff. For these purposes, MLG and MPWH will employ advisors whose qualifica- tions, experience and terms of reference are satisfactory to the Bank. (f) Training 3.14 As part of the efforts to further strengthen MLG and the provincial governments, the project will extend to 14 new provinces the training program started under the ongoing RRIP. To achieve this objective, the project includes advanced technical training and overseas study tours for selected permanent staff from MLG and the 14 provinces (Table 8). In addition, on-the- job training in design, contract management, construction supervision, road maintenance and equipment management and monitoring, etc., will be carried out by technical advisors to be provided under the project (para. 3.12). With regard to labor based techniques, the project provides for overseas study tours for senior project staff. Moreover, the staff will receive on-the-job training from technical advisors included in the project (para. 3.13) E. Estimated Project Cost 3.15 The total project cost, including land acquisition, is estimated at P 2.9 billion or US $122.2 million equivalent. This includes physical contin- gencies of 9% and price contingencies of 34Z of the project base cost. Price contingencies were calculated on the basis of international inflation which was estimated at 7% for 1986 and 1987, 7.5Z for 1988, 7.7% for 1989, 7.6% for 1990, and 4.5% thereafter. Overall physical and price contigencies combined represent 30Z of the total project cost. The foreign exchange cost is estima- ted at US$63.6 million, or about 52% of the total project cost; the remaining US$58.6 million represent local costs, of which US$12.8 million, or about 10.3% of total project costs are local taxes and duties. The cost estimates are shown in Table 9 and are summarized in Table 3.1 below. 3.16 The average construction cost per km of provincial and national roads (excluding contingencies) is estimated at about US$47,600 including bridges. The average construction cost of bridges is estimated at US$3,600  - 11 - Table 3.1: SUMMARY OF PROJECT COST ESTIMATE (USs million) Foreign Local Foreign TotaL exchange as Z of total A. Executive Agency MLG - Improvement of about 750 km of provincial roads 18.5 20.0 38.5 52 - Construction and improvement of 5 workshops and testing labor- atories 0.3 0.4 0.7 51 - Procurement of road maintenance and other equipment - 8.6 8.6 100 - Consultant services, technical assistance and training 4.3 2.7 7.0 32 B. Executive Agency MPWH - Improvement of about 590 km of national, provincial and barangay roads 9.6 10.4 20.0 52 - Procurement of road main- tenance equipment - 1.3 1.3 100 - Consultant services, technical assistance and training 1.4 1.5 2.9 43 C. Land Acquisition 6.9 - 6.9 0 Base Cost /a 41.0 44.9 85.9 52 D. Contingencies b - Physical 3.6 4.0 7.6 - Price 13.9 14.8 28.7 Total Project Cost 58.5 63.7 122.2 52 Project Cost ExcLuding Taxes /c 45.8 63.6 109.4 57 /a December 1985 prices. 7T Details are given in Table 18. 7i Total taxes and duties estimated at US$12.8 million per meter. These cost estimates are based on updated feasibility studies and on recent bids for _-:.ilar works in the country and are therefore considered reasonable and realistic. The average construction cost per km of barangay roads to be constructed by labor-intensive methods (LIM) is estimated at about US$15,400, excluding bridges over 10.0 m which are to be constructed by  - 12 - contract. These costs are computed on the basis of various related items of works and prevailing cost of those works carried out by LIM in the Philippines. 3.17 Consultant services for detailed engineering including prepaiation of bid documents, and construction supervision is estimated at 11% of total construction costs. In addition, the project includes 342 man-months of tech- nical assistance, of which 120 man-months are for expatriate staff and 222 man-months are for local staff. 3.18 Cost estimates for mechanical workshops and quality control labora- tories are based on recent similar works in the country, and the estimates for equipment are based on suppliers' recent quotations. F. Financing 3.19 The proposed Bank loan of US$82 million would finance the project's foreign exchange costs, estimated at US$63.6 million, and US$18.4 million of local costs. Local cost financing is justified in view of the project's focus on poverty alleviation and the Government's constrained financial position despite their best efforts at resource mobilization. The loan would thus finance 75% of the total estimated project cost, excluding taxes and duties, and the Government would finance the remaining US$40.2 million equivalent through annuaL budgetary allocations to MLG for provincial roads and MPWH for roads in settlement areas. Except for roads in settlement areas, the cost of provincial roads, workshops and laboratories will continue to be shared between national and provincial governments in accordance with the different fiscal capabilities of the participating provinces; a system that is already working satisfactorily. G. Project Implementation (a) Provincial Roads in Project Provinces 3.20 MLG will be the executive agency for this project component since the provinces lack the capabilities to plan, design, construct, supervise and monitor project implementation satisfactorily. Most of the project roads will be designed with the help of consultants, constructed by contract and super- vised by consultants under overall supervision and monitoring by MLG. In addition, MLG, with the participation of the provinces, will be responsible for procurement of equipment and machinery, consulting services and technical assistance, and for making arrangements for overseas training and study tours. Since most of the civil works are in the nature of rehabilitation and spot improvement of existing roads, relatively short lead times are required. Engineering for the first year roads will be completed by mid 1985, financed under the ongoing RRIP, thus enabling bidding during 1986 and construction to start early in 1987. 3.21 During negotiations, the list of the roads to be included in the first year work program was agreed. During negotiations assurance was also obtained that the Government will submit to the Bank for comments by July 1 of each year a list of the roads to be included in the next year's work program.  - 13 - (b) Rural Roads in Settlement Areas 3.22 MPWH will be the executive agency for this component. Detailed engineering, construction supervision, and procurement of equipment will be undertaken by MPWH. Improvements of about 80 km of national roads and 225 km of provincial roads will be done by contract. Approximately 290 km of baran- gay rorAs excluding bridges over 10 m will be improved by force account over a period of 3-1/2 years using LIM. For this purpose 5 construction units (CUs) consisting of 280 workers each will be established and will be managed by MPWH's engineers trained in LIM under the ongoing Philippines Rural Infra- structure Project (Credit 790-PH). The composition and cost estimates of a typical construction unit are shown in Table 10. The basic equi 7ent required for -t- s work, estimated at P 2.6 million per construction unit,- will be pur. . d. The remaining 30 km of barangay roads will be improved on a pilot basis, by contractors who will be required to use LIM. MPWH will select three contractors, one for each settlement area, on the following criteria: (a) contractor's willingness to employ LIM; and (b) possession of equipment for compaction and vehicles for transportation of materials. These criteria will be reflected in the contract agreements with the contractors. The work will be supervised by MPWH under the overall direction and supervision of one LIM expert, to be provided under the project (para. 3.13). In addition the lengthman system for maintenance of barangay roads using LIM will be intro- duced during the project period. LIM is expected to provide a viable techni- cal and economic alternative to equipment intensive methods and will create job opportunities in the settlement areas. The bridges over 10 m long will be constructed by local contractors. 3.23 The project would be implemented over a five-year period, including preparatory work in 1986 financed under RRIP (Loan 1860-PH) and should be com- pleted by June 30, 1991. Contractors would be responsible for maintaining their respective works for a 12-month period after completion, after which provincial governments would assume this responsibility for provincial roads and MPWH for barangay roads. An action program for project implementation and a project implementation schedule (Annex 1) were prepared and agreed during appraisal. In summary, the action program calls for preparatory work, includ- ing bidding, for first year roads to be completed by the end of 1986. Con- struction works would start early 1987. Economic evaluation of future year project roads would be completed by the end of 1987. Procurement of mainte- nance equipment and feasibility studies for possible future rural roads proj- ects would be completed by the end of 1990. Civil works would be completed by mid 1991. Institutional strengthening and training would start in 1986 and will continue throughout the project implementation period. During negotia- tions assurance was obtained that the Government would adhere to the agreed action program and implementation schedule. 2/ Excluding trucks rented for transport of gravel.  - 14 - H. Procurement and Land Acquisition 3.24 Civil Works. Civil works for MPWH's improvement of national and provincial roads in the three settlement areas estimated at US$20.1 million would be procured under contract packages through ICE in accordance with the Bank's guidelines for procurement under IBRD Loans and IDA CRedits, May 1985. Procurement of remaining HLG civil works by international competitive bidding would not be appropriate because the contracts or contract packages involved will be relatively small (US$0.2-2.0 million), scattered over 14 provinces, and will be phased over a period of 4 years. Therefore, contracts for the construction of MLG provincial roads, mechanical workshops and quality control laboratories, totaling US$55.9 million equivalent, will be awarded to prequal- ified contractors on the basis of local competitive bidding under procedures satisfactory to the Bank. Construction of barangay roads in the 3 settlement areas, totaling US$8.4 million, will be carried out by MPWH force a:.count using labor-based techniques. These techniques will also be used for the construction of other rural roads where feasible. lable 3.2 below summarizes the key procurement information. All procurement documents for works over US$0.3 million equivalent will be subject to the Bank's prior review, which will cover about 95Z of the proposed Loan. 3.25 The sizes of the contract pac ages are designed to ensure economies of scale and to provide opportunities to local contractors. These contractors have been very active in bidding for small contracts on previous Bank-financed road construction projects in the Philippines. It is therefore expected that they will bid for all contract packages included in the project. All contrac- tors will be prequalified, and many are expected to seek prequalification and to bid on one or several contract packages. The Government has agreed that executing agencies will institute a detailed system for careful evaluation of prequalification application, employing procedures adopted under the Fifth Highway Project (Loan 2418-PH). 3.26 Equipment. Road maintenance equipment, workshop equipment and machinery, tools and materials testing equipment and other equipment estimated at about US$13.8 million equivalent would be procured on the basis of interna- tional competitive bidding in accordance with the Bank's guidelines for "Pro- curement under IBRD Loans and IDA Credits" May, 1985. A preference limited to 15% of the c.i.f. price of imported goods or the customs duty, whichever is lower would be extended to local manufacturers in the evaluation of bids. All procurement documents for equipment would be subject to the Bank's prior review. Procurement of hand tools for construction and maintenance of barangy roads and off-the-shelf items, each costing less than US$12,000 equivalent would be done by shopping in accordance with the Bank's Guidelines. The total amount of such purchases should not exceed US$400,000 equivalent. 3.27 Consultant Services and Technical Assistance. Consultant services for detailed engineering, construction supervision, studies and technical assistance would be obtained in accordance with the relevant Bank Guidelines. 3.28 Land Acquisition. The Government acquires right-of-way by negotia- tion when possible, although it has adequate compulsory powers if needed.  - 15 - Table 3.2: PROCUREMENT SUMMARY (USS million) Procurement method Total Project elements ICB LCB Other cost Civil Works Rehabilitation and improvement 20.1 54.9 75.0 of national and provincial roads (12.8) (35.1) (47.9) Improvement of Barangay roads 8.4 8.4 (5.4) (5.4) Construction and improvement 1.0 1.0 of workshops and laboratories (0.6) (0.6) Subtotal 20.1 55.9 8.4 84.4 (12.8) (35.7) (5.4) (53.9) Equipment and Machinery Road maintenance and construction 12.4 12.4 equipment and spare parts (12.4) (12.4) Workshop equipment machinery, 1.4 0.5 1.9 laboratory, office and other (1.4) (0.5) (1.9) equipment Subtotal 13.8 0.5 14.3 (13.8) (0.5) (14.3) Services Consulting services, technical 13.8 13.8 assistance and training (13.8) (13.8) Land Acquisition 9.7 9.7 C-) C-) Total 33.9 55.9 32.4 122.2 (26.6) (35.7) (19.7) (82.0) Notes: 1. Amounts shown for each project component include physical and price contingencies. 2. Figures in parentheses are the respective amounts financed by the Bank Loan including a prorated share of unallocated funds. There have been isolated cases in previous projects where delay in acquiring right-of-way has caused disruption of scheduling. Assurance was obtained during negotiations that the Government will take timely action to make  - 16 - available right-of-way on each road section and the land required for each workshop or laboratory. I. Disbursements 3.29 The loan proceeds will be disbursed on the following bases: (a) Civil works: 64Z of the total expenditures for civil works; (b) Equipment: 100% of the c.i.f. cost of all equipment procured directly from abroad, 65% of the actual cost of imported equipment procured locally, and 100% of the ex-factory cost of equipment manti- factured locally; and (c) Technical assistance and training: 100% of total expenditures on consulting and technical assistance services and training. 3.30 Except for the first year program, disbursements for expenditures on construction and improvement of provincial roads and bridges will be made only after the size and scheduling of the corresponding years work program has been reviewed by the Bank and agreed upon with the Government. Disbursements for civil works contracts under US$100,000 and works executed by force account (construction and improvement of barangay roads) will be made on the basis of withdrawal applications supported by statements of expenditures on work performed and duly certified by MPWH. MPWH will also maintain and make available to the Bank's representatives all relevant documentation in support of the statements of expenditures as and when required. 3.31 Table 11 gives a schedule of the estimated disbursements of the loan. The disbursement period for the project is about one year shorter than the actual di:bursement profile of the ongoing RRIP. This is justified for three reasons. First, engineering for the first year project roads will be completed by October 1986 and will be financed under ongoing RRIP (Loan 1860- PH), thus enabling construction to start early in 1987. Second, most of the project activities will be concentrated ii the first three years. Third, the implementing capabilities of MLG have improved as a result of actions initia- ted under previous projects. 3.32 To facilitate implementation of the project, the Bank would make advance payment into a special account to cover the estimated Bank share of expenditures. The special account would be in US dollars in the Central Bank of Philippines. The amount on deposit in the special account would at no time exceed US$5.0 million, which is the estimated average quarterly Bank share of expenditures including a 20% margin. Before replenishing the account, the Bank would review the withdrawal applications justifying expenditures from the account. During negotiations it was agreed that a special account would be established. J. Auditing 3.33 MLC's and MPWH's accounting procedures are broadly satisfactory and are subject to a continous external audit by the Government's Commission on  - 17 - Audit (COA). Although the COA auditors are resident in MLC and MPWH they report directly to the COA office, an arrangement that is designed to safe- guard their independence. During negotiations it was agreed that the Govern- ment will furnish to the Bank, within six months after the end of each fiscal year, a certified copy of the audit report for the project and the special account. K. Environmental Aspects 3.34 No environmental or ecological problems are anticipated as a result of the project because there would basically be no changes in the alignment of project roads to be improved; therefore the requirements for additional land and disturbance to property would be minimal. The improvement works include such features as bridge and drainage improvements, raising embankments, con- struction of wider and better shoulders and some alignment improvements. These would improve not only environmental conditions along the roads but also road safety. IV. ECONOMIC EVALUATION A. Main Benefits and Beneficiaries 4.01 The project roads, whether provincial roads or land settlement roads, will serve areas that are predominantly agricultural. The local popu- lation is expected to benefit from: (a) improved quality and quantity of yields through prompt and cheaper delivery of agricultural inputs; (b) intensified land use; (c) improved bargaining position vis-a-vis truckers, traders and mer- chants and thereby higher net prices for farm products; (d) more efficient use of existing agricultural extension staff; (e) lower transport costs for passengers and freight; and (f) improved personal travel. 4.02 Detailed studies have been carried out for all the roads in the 13 provinces included in the project as well as for the three land settlement areas. The socioeconomic characteristics of each road's influence area have been documented to analyze and forecast agricultural production and land use, population, the volume and type of traffic, marketing system, credit avail- ability, transport prices, farm-gate and market prices of agricultural commo- dities, and production costs. The population served by the project roads generally have per capita incomes below the absolute poverty threshhold for the Philippines.  - 18 - 4.03 The most important of the quantifiable project benefits are based on projected increase in the net value of farm produce including better ex-farm prices of inputs and crops. Increased production is expected to result from improved agricultural inputs, diversified production and multicropping, and cultivation of idle land as the project provides remote rural areas with low cost transport and easy access to agricultural extension workers. 4.04 Adoption of new farming techniques would normaLly result in increased production of food crops and bananas in about three years while new hybrid coconuts would require five to ten years. Once roads are improved, the cultivated areas for cash crops are expected to expand more rapidly than that for food crops, as farmers would be encouraged to grow perishable, but highly profitable, crops such as fruits. Other income-generating activities would also expand such as cassava production for animal feed and production of tapioca, peanuts, vegetables etc. 4.05 Several studies in the Philippines have demonstrated a close correlation between improved road standard on the one hand and increased transfer of modern farming techniques and higher farmgate prices on the other hand. In the Philippines, there is a high degree of competition among transport operators, and reduced transport costs resulting from improved road conditions are generally passed on to the farmers. Improved roads would thus benefit primarily farmers, followed by the local population and the transport operators in the road influence areas. 4.06 The second group of quantifiable benefits is based on the reduction in transport costs of: (i) nonagricultural commodities, such as consumer goods and minerals; and (ii) passengers. Road user savings for these two types of traffic not directly related to agricultural production have been quantified to supplement the benefit component of the net value added on incremental output resulting from the road construction. B. Traffic Analysis 4.07 Traffic counts and origin-destination surveys have been carried out on all roads proposed by the Government and the results have been analyzed to obtain traffic estimates. The range in the level of existing traffic on the project roads varied greatly from an average annual daily traffic of 4 to 190 vehicles. Traffic on these roads is expected to grow at about 4-6% per year. Vehicle operating costs on the project roads have been estimated by vehicle and by road type. C. Construction and Maintenance Costs 4.08 Construction costs have been calculated net-of-taxes for the econo- mic evaluation. The foreign exchange component has not been shadow priced. The construction costs have been spread over the implementation period for each road with typically 10% falling in the first year, 40% in the second, and 50% in the third. The maintenance costs were used as estimated by the consultants.  - 19 - D. Overall Economic Evaluation 4.09 An economic analysis has been carried out for 57 individual roads in the project provinces totalling 964 km of which 29 roads totaling 523 km have an economic rate of return (ERR) above 12% (Table 1). ERRs range from 12% to 372. During negotiations it was agreed that future project roads in the 14 provinces would be evaluated according to the same methodology and would be included in the project if their ERRs exceed 12%. The road networks in the three settlement areas totalling 590 km were also evaluated and have ERRs between 25% and 27%. The weighted ERR for all project roads is 20%. No rates of return have been calculated for road maintenance equipment, workshops and related equipment and machinery, and technical assistance. The benefits of the maintenance components have not been quantified but experience from this type of investment elsewhere suggests high returns giving this type of investment the highest priority in road development programs. 4.10 Sensitivity tests carried out for the project roads showed that an increase of 20% in investment costs reduce the overall ERR from 20% to 17%; a reduction of benefits by 20Z lowers ERR to 17%, while a simultaneous increase in costs and reduction of benefits by 20% results in a drop in ERR to 15%. E. Project Risks 4.11 The princi?al project risk is that the cost of civil works, particu- larly in settlement areas, would be higher than estimated. Although the works are relatively small scale and their costs are based on updated feasibility studies and on experience in implementing similar projccts in the country there may be some risks of cost overruns. As noted above, a 20% increase in costs would still yield an overall ERR of 17%. 4.12 Another major risk is that improvement works carried out under the project may not be adequately maintained after completion. However, some mea- sures for improving maintenance have been initiated by the Government. Responsibilities of the maintenance of barangay roads have been transferred from local authorities to MPWH and budgetary allocations for road maintenance have been increased by 38% as of January 1, 1986. The risk will be further reduced through strengthening of MPWH's and MLG's maintenance capabilities by providing road maintenance equipment and technical assistance under the project. V. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS 5.01 During loan negotiations agreement was reached with the Government on the foilowing: (a) review and economize design standards, takirg into account the use of low cost materials (para. 2.09); (b) secure an adequate base level and regular inflation adjustments of the EMK formula for road maintenance allocation (para. 2.13);  - 20 - (c) list of first year roads to be constructed (para. ^-R21); (d) list of roads to be constructed in later years to be submitted with their economic analysis to the Bank for comments by July 1 of each year (para. 3.21); (e) action program and implementation schedule (para 3.23) (f) timely acquisition of land for each road section and workshop or laboratory site (para. 3.28); (g) establishment of a special account (para 3.32); (h) submission of audit reports on the project and the special account within six months of the end of each fiscaL year (para. 3.33) and (i) roads to be constructred in later years to be economically justified according to the same methodology that was used for the first year roads and included in the project only if their ERRs is 12% or higher (para. 4.09). 5.02 On the basis of these agreements and conditions the project is suitable for a Bank loan of US$82 million equivalent (representing about 75% of the total project cost excluding taxes and duties) for a period of 20 years, including 5 years of grace. The Borrower would be the Republic of the Philippines.  Table 1 -21 - Page 1 PHNLIPPINES SECOND RURAL ROADS PROJECT Rehabilitation, Upgrading and Spot Improvement of Provincial Road in Project Provinces Project Road Sections Road Bridges Estimated Internal Province/ length no/length cost rate of road no. (km) Project name (m) (P'000) return C!) ABRA WI7M - Malanas Irish Crossing 1/300 7,132 20 4.18C - Canan-La Paz-Lagayan 2/30 1,765 17 4.A5 14.9 Jct. Sinalang-Penarubia-Bucay 1/15 10,096 19 Subtotal 14.9 4/395 18,993 AGUSAN DEL NORTE 58.04C 1.n Tubay Jct.-Abucay Bridge 1/96 2,917 21 58.01I 6.4 Jabonga-Magdagooc - 5,042 18 58.n5 22.IaBaan-Magallanes-Cabadbaran 2/27 4R,139 16 58.04D - Dona rosaario Bridge 1172 1,705 16 58.06 7.8 Agay-Jct. Ralangbalang-San Antonio I/Inn 2,368 18 Subtotal 37.3 6/410 64,378 AGUSAN DEL STJR 54.18 7.0 San Teodoro-Old Runawan-Mambalili 1/88 8,948 37 54.163 3.2 Ebro-New Visayas - 2,817 23 54.17 4.3 Patindog-Caimpugan 1/24 3,8on 22 54.24 4.3 Crossing Luna-Jet. Supas-San Luis 9/157 31,938 20 54.06 18.1 Lucena-San Joaquin-San Jose 2/48 15,796 16 54.07 - Taglatawan-Jct. Panaytay-Maritula 4/64 5,136 19 Subtotal 62.2 17/381 6R,435 BOHOL 4/.1Z 7.9 San Miguel-Tomoc - 5,402 20 47.131 12.0 San Miguel-San Pascual - 6,197 19 47.067 - Corella-Balilihan 4/141 4,744 19 Subtotal 19.9 4/141 16,343 CATANDUANES Z5.:7-- 68.4 BARAS-CITMOTO-VIrA 3/40 33,799 13 CAGAYAN T2-.UT1 - Mabanguc-San Lorenzo 2/54 3,495 16 02.031 - Sto. Nino-Dingao 4/144 6,937 16 02.n4 15.7n San Jose-Sta. Margarits 6/229 21,960 14 02.07 29.6 NRJ-Baggao-San Jose - 42,721 15 02.12 28.6 NRJ-Sampaguita-Tamban 2/28 22,599 22 Subtotal 73.9 14/455 97,712  -22- Table 1 Page 2 Road Bridges Estimated Internal Province/ length no/length cost rate of road no. (km) Project name (m) (P'OOO) return tX) DAVAO DEL SUR bZ.18 7.8 Sinavilan-New Visavas-Madanao - 5,965 23 62.11 6.5 Hatti-Balabag - 2,782 22 62.39 33.2 Kiblawan-Tagaytay+Bunot 6/132 25,202 22 62.22 8.2 Bangalan-Magsaysay 3/110 13,954 20 62.95 21.0 Cogon-Kapatagan - 17,838 18 62.29 11.4 Matanao-Bangkal 4/165 12,856 17 Subtotal 88.1 13/407 78,597 ILOCOS NORTE 3.O5ABC 21.6 Bacarra-Paninaan Network 2/3n 15,n33 16 3.59ADCE 23.3 Pasuquin Road Network 3/40 16,593 14 Subtotal 44.9 5/70 31,626 MARINDUQUE 30.07 8.60 Matalaba-Pantayan-Deveila 1/3n 10,314 14 SAMAR 36u-.TJT 20.4 Gandara-Matuguinao 7/153 19,669 i0 36.06 10.9 Bulugo-Tarangnan - 6,588 24 36.04 10.8 National Highway-Sta. Rita 2/45 5,781 24 36.031 8.5 National Highway-Villareal - 5,250 22 26.032 3.3 Villareal-Talalora 2/40 11,R62 15 Subtotal 63.9 11/218 49,150 SOUTHERN LEYTE 45.35 ---11.5 CAMBITF-HINGATIKAN 1/1n 7,324 21 SURIGAO DEL NORTE 48.021 10.5 Mainit-Mansayao 6/103 13,424 18 48.03 Mainit-Sison Network 4/109 5,385 (Bridge work) Subtotal 1C.5 0/212 1g,gm SURIAGO DEL SIlR 55.01 13.5 Teleje-Maticdum/San Isidro-Maitum 2/30 1n,438 1R 55.07 5.5 NRJ-Bayan-San Isidro 1/15 3,982 15 Subtotal 19.n 3/45 14,42n MISAMIS ORIENTAL .AND OTHER ROADS Z25.0 To be identified 40/1,2nn 210,000 Total 748.0 132/3,964 720,no Dource: MLG/Mission. December 1985  Table 2 - 23 - Page I PHILIPPINES SECOND RURAL ROADS IMPROVEMENT PROJECT Road Construction and Improvement on Settlement Areas Project Road Sections Internal Settlement Road Bridges Estimated rate of area length Road section No. /length cost return (km) W) (rPOOO) (Z) A. Kabankalan (M) Hatimal Roads 20.0 babankalan - Tapi - 8.720 (ii) Provtncial Roads 29.4 Bantayan Nursery Mill - 1log river 2/48 15.991 7.0 Tabugon - Project boundary - 3,317 Subtotal 31.4 2/48 19.208 (iii) Barangay Roads 6.6 Tago - Sition Na6alayan - 1,566 4.5 Tabugan - Pinaguinpinan - 945 7.8 Tabugon - Sition Marangis - 2,106 3.1 N. Boundary - Ahian - 651 5.0 N.W. project boundary - Tagoc - 1,434 7.3 Tagoc - Inapoy 1/30 2,883 9.6 Langka - Pinaguinpinan - 2,016 2.8 Sitio - Tabla river - 708 6.0 Bantayan - Villa progresso - 1,260 2.3 Sagumayon - Baray Diotay - 759 5.0 Connecting links - 1,650 Subtotal 66.0 1/30 15.978 Total 116.4 3/78 43,906 26.7 B. Sultan Kudarat (t) Provincial Poads 19.0 Bagumbayan - NE project boundary L 78 17.318 45.0 NE project boundary - Kulaman 8/175 36,674 9.0 ulaman - Ludo 2V30 9,150 12.0 Gapok - South Cotabato boundary 1120 11,550 Subtotal R5.0 15/303 75.392 (ii) Barangay Roads 1.5 Kulasrn - link to provincial road - 315 0.5 Bugso - lick to provincial road - 2,577 5.4 Buenaflores - link to provincial road 1/12 3.862 0.5 Sevod - link to provincial road - 165 4.8 Langal - link to provincial road 1/24 2,188 3.8 Basag - link to provincial road - 1,834 0.5 Maniag - link to provincial road - 165 0.5 Seguya - link to provincial road - 165 4.2 Nalum - link to provincial road - 1,906 0.5 Gapok - link to provincial road - 165 3.0 South Cotabato 1 - link to provincial road 1/12 1,995 3.2 South Cotabato 2 - 1,156  - 24 - Table 2 Page 2 Internal Settlement Road Bridges Estimated rate of area length Road section No. /length cost return Sultan Kudarat Barangay Roads (Cont'd) 5.3 Langal - Sewod 1/12 1,735 4.5 Buenaflores barangay road - S.W. Barangay boundary - 1,485 4.3 Langgae Buenaflores boundary - Langgal - 2,168 9.4 Langgal-Basag barangay road - 3,202 7.5 Basag-South Cotabato provincial boundary - 3,202 8.4 South Cotabato 1 - Seguya - 2,872 10.3 South Cotabato 2 - Malum 2/16 4,939 6.0 Nasiag provincial road - West - 2,860 0.5 Capok provincial road - Nursery - 265 5.0 Connecting links - 1,850 Subtotal 94.5 6/92 39,266 Total 8 179.5 21/395 114,658 26.3 C. Wnao-Banistlan (i) Hatimal Roads 35.0 Maramag - Kilikili 3/20 19,085 6.0 Xilikili - Seram 3/42 6,454 7.0 Seram - Wao 2/36 6,413 13.0 Uao - Banisilan 9/36 19,085 Subtotal 61.0 16/270 51,017 (ii) Provincial Roads 1.1 Kilikili road 1/18 1,644 17.3 Kilikili - Aparfort 61120 21,640 49.9 Banisilan - Xitub 13/168 50,840 35.0 Kitub - Libungan 5/20 35.100 Subtotal 103.3 25/406 109,124 (iii) Barangay Roads 4.5 Aparfort barangay road 1/12 2,025 1.4 Frankfort barangay road - 462 5.9 Sumugot barangay road - 1,948 8.4 Kilikili barangay road - 2,328 5.4 North Park Area - National Road 2/24 3,942 4.6 South Park Area - North Park Area - 2,598 1.3 Wao barangay road - 429 3.8 Wao-Christian village - 1,254 7.9 Wao-Malaigang - 2,607 4.2 Muscrap - National Road - 1,386 3.5 Kadingilan - National Road - 1,155 5.0 Kanipisan - National Road - 1,650 16.1 National Road - Milaya 2/18 6,933 9.7 Kabatangan - Amoyong - 3,210 4.0 Paradise - Malinao - 1,320 6.0 Malinao - Kapayangan - 1,980 5.0 Wadia Tombao Kamalig - 1,650 20.9 Little Thailand - Little Panter 6/54 9,327 1.2 Tinambacan - link to provincial road - 396 10.0 Banisilan - Taunan 2/40 6,900 5.0 Connecting links - 1,650 Subtotal 133.8 13/148 55,140 Total C 298.1 54/824 215,301 25.7 GRAND TOTAL 594.1 79/1,403 373,865 Source MPWH/Mission. December 1985  P14IytPPTNFq sFrnNn RIIRAI. RnADc LXRflVFvPWrIT PRnJFr' UIqst of Rna$ Uafntenance Rnuiriment for MlIX Itni t ARUisan ARusan navan cost Iteri Rel Rel raapn- ratAn- de, llncns '4arin- 14patern qourhern Surigan SurtgAn Manila Total no. 'leacription Abra Norte Sur Rohol van diunnc SRur Norte dciule Sanar leyte del llorte del Stir Total c.i.f. enat - '!jRVOfln I lhmp truick 7 2 7 12 A h R 16 1. 4 A A A Rn 33 2,44n 2 itter truck I - 2 1 I I I I 1 - II - 13 1 447 1 Stake triuck - I I I - - 7 - I I -I 1 9 72 IqR 4 Low-hed tratler with primre mover I I I _ _ _ 1 I I I q 4 6 414 i Mntor grader 2 1 7 7 I I I I .7 - 23 53 1,219 6 Ionder front ensi 2 - I 4 _ I 1 2 1 1 1 1 17 4b 7I1 7 Road rollers - - I I I I 7 1 _- -_ F 31 264 q Rulldnzers 2 1 1 4 I I 2 2 1 1 - I I Ip S I,nnR 9 Pick-up tr.ek 4 1 1 4 6 2 S I ? 2 2 4 1 37 11 Af7M In Asphalt kittles - - - - 2 - - _ 2 ] IA Total (Cost 7-319 Source: MLA:, Provineial C.nvernments and Mlssinn. llecerher 1I8RS  -26- Table 4 PHILIPPINES SECOND RURAL ROADS IMPROVEMENT PROJECT List of Road Maintenance and Construction Equipment for MPWH Settlement area Item Kaban- Sultan Kudarat- Wao- Total Cost (P 000) go. Description Kalan South Cotabato Banisilan no. Unit Total A. Road Maintenance Equipment 1. Dump truck, 6 m3 2 3 4 9 600 4,200 2. Motor grader, 125 hp 1 1 1 3 960 2,800 3. Wheel loader, 1.75 yd I I 1 3 650 1,950 4. Road roller, 8-10 t 1 1 1 3 600 1,800 5. Water tanker, 1,500 gal 1 1 1 3 60n 1,800 6. Pickup truck, 0.5 t 1 I 1 3 150 450 7. Motorcycles 1 1 1 3 25 75 Subtotal 13,155 B. Construction Equipment 8. 4-u drive vehicle (diesel) 1 3 3 7 180 1,260 9. Pickup truck, 0.5 t 2 1 1 4 150 600 10. Motorcycles 2 2 4 8 25 20n 11. Road roller, 8-10 tons 1 2 2 5 600 3,000 12. Concrete mixer, 0.25 yd3 2 3 4 9 30 270 13. Concrete vibrator 3 2 3 4 9 12 108 14. Water pumps, 10/15 m 1 2 2 5 3n 150 15. Pedestrian-operated vibratory roller 2 3 3 R Rn 640 16. Medium-size farm tractor 1 2 2 5 200 1,000 17. Tractor trailer 1 2 2 5 50 250 18. Towed light roller 1 2 2 5 40 200 19. Towed water bowser 1 2 2 5 40 200 20. Rand tools (lump sum) 1,670 21. Light drilling equipment 1 2 2 5 40 200 22. Stone crusher (medium size) - - 1 1 600 600 23. Office survey equipment (LS) 1,400 Subtotal 11,748 Total 24,903 Source: MPWH. December 1985  PHILIPPINES SECO"D RURAL ROADS IMPROVEMENT PROJECT List of Workshop Equipment and Tools Number of Items Required by Provinces Unit Agusan Agusen Devao cost, Item del del Catan- del llocos Hartn- Southern Surigao Surigao Mantla total no. Description Abra Norte Sur Bohol Cagayan duanes Sur Norte duque Samar LAyte del Norte del Sur Total elf cost (US$1 (US$) I Hydraulic floor, jack 10 ton I 1 2 1 1 I 3 I I - I I 1 13 1,152 14,976 2 Hydraulic Jack, 10 ton - I I I I 1 2 - I 2 - 2 2 14 215 3,010 3 Transmission Jack I I I I I 1 I I I I I I 13 261 3,393 4 Drill press, 1/2 HP, 220 V, 60 cycle single phase, 1/2 chuck capacity I - I I I I I I I - 1 3 I 11 308 3,388 5 Portable electric drill, 22n V (metric) I III I III I I I I 1 13 242 3,146 6 Portable electric drill, 220 V (SAE) I I I I I I I I i I I I - 12 242 2,904 7 Bench grinder, 220V, 60 cycle 1/2 IIP I I I 1 I 3 I I - 1 I - In 264 2,640 8 Arbor press lever, 3 tons I - I I I I I - I I I I it 359 3,949 9 Valve refacer I I I I I I I I 1 I 1 10 154 1,540 10 Combustion leak toster (gas & I diesel engine) I - I I I I I I - I I I I 11 461 S,071 11 Valve lifter I - I I I I - I I I I 10 44 440 12 Expanding hand reaser set adjustable I I I I I I I - -I I I 11 82 902 13 Multipurpose puller sec I I I I I I I I I I I I 1 13 144 1,872 14 Tube pipe, flaring and cutting set I I I I I I I I - I I I 1 12 55 660 15 Taps & dice, metric I I I I I I I - - I I I I 11 31 341 16 Taps & dice SAE I I I I I I I - I I I 3 11 31 341 17 Clutch aligning tool set I I I I I I I I I I I I 1 13 86 1,11S l8 Nut splitter I I I I I I I - I I I I 11 21 231 19 Track pin press I I I I I 1 I 1 I I - I 12 1,474 17,688 20 Arc welder engine driver I - I I I I I I I I I I - 11 8,045 88,495 21 Welding unit static I 3 - I I 1 3 I I I - I 10 457 4,570 22 Anvil 2 - I - I I I 1 2 1 1 1 - 12 51 612 23 Bench vise I I I I I I I I I I I 1 13 S2 1,066 24 A ptpe vender heavy duty I I I I I I I I I I I I - 12 143 1,716 25 Air compressor, electric 220V, 60 cycle, 175 FS 1, single, l 20PH I - I - I - I I I I - - - 7 564 3,948 26 Air compressors, portable engine Drivers, 40 CEM, 200 PSI I - 1 - I I I I I I I I - 10 7,072 70,720 27 Battery charger, 220V vac, 6) IIP, Heavy duty booster cables (500 Amp) and Battery tooter I - I - I I I I I I I I I i1 457 5,027  Table 5 -28- page 2 - - e n ctewle_c e..o-. -ss--a__r z * .m am , m C .e. a-ra_fl..m.a.0.al_fe IcC a a_:^o_ ;: _; " - - -- _-- --- ------- ------- -. - n.ccoCcaCn-tc.e. CceCCVc .-<N r.CC... c a... c_ n"_se- c s<se-F ..fl -ecar.-e C - Os- a - nc' V,. 015 : - CC a, E >t w -------"---------------------- - 2c C~~~~~~~~~~C e