Peru - Lima - Amazon Transport Corridor Project

The World Bank FO1R OMCLAL USE ONLY Report No. 6111 PROJECT COMPLETION REPORT PERU LIMA-AMAZON TRANSPORT CORRIDOR PROJECT (LOAN 1196-PE) March 24, 1986 Latin America and Caribbean Regional Office Transportation 2 Division This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TIE WORLD BANK WahIngton D.C. 20433 USA. 0 d O dtwGnua Opswm bivgm March 24, 1986 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Peru Lima-Amazon Transport Corridor Prolect (Loan 1196-PE) Attached, for information, is a copy of a report entitled "Project Completion Report on Peru Lima-Amazon Transport Corridor Project (Loan 1196-PE)" prepared by the Latin America and Caribbean Regional Office. Under the modified system for project performance auditing, further evaluation of this project by the Operations Evaluation Department has not been made. Attachment This document has a icted distibution and may be used by ripents only in the peformance of thiur offica dutis Its contents may not otherwie be dislosed without World Baek autboriation.  FOR OFFICIAL US ONLY PERU PROJECT COMPLETION REPORT LIMA-AMAZON TRANSPORT CORRIDOR PROJECT (LOAN 1196-PE) TABLE OF CONTENTS Page No. PREFACE i BASIC DATA SHEET Ii HIGHLIGHTS v I. INTRODUCTION I II. PROJECT PREPARATION, APPRAISAL AND NEGOTIATIONS 2 III. PROJECT IMPLEMENTATION 3 IV. COST ESTIMATES AND DISBURSEMENTS 15 V. FINANCIAL PERFORMANCE: PORT COMPONENT 16 VI. INSTITUTIONAL DEVELOPMENT 19 VII* ECONOMIC REEVALUATION 21 VIII. ROLE OF THE BANK 22 IX. CONCLUSIONS 22 TABLES 1. Estimated Costs of the Project 25 2. Road Component: Actual, Appraisal and Reformulation Costs 26 3. Road Component: Contract and Cost Data 27 4. Port Component: Actual, Appraisal and Reformulation 28 Estimates of Project Costs 5. ENAPU - Forecast and Actual Port Traffic 29 6. ENAPU - Forecast and Actual Income Statements, 1976-1982 30 7. ENAPU - Forecast and Actual Balance Sheets as of 31 December 31, 1975-1082 8. Forecast and Actual Project Ports Traffic 32 9. Forecast and Actual Income Statements and Project Ports, 33 1978-1982 10. Lima-Pucallpa Road Traffic Flows 34 11. Representative Vehicle Operating Costs .35 12. Economic Rates of Return: Appraisal Estimates 36 ANNEX I. Implementation of Oroya-Huanuco Road Works 37 MAP IBRD 11304 (PCR) This document ha a stricted distibution and may be used by .Iplnts only in the pefomnce of their oici dutis Its contents may not otberwise be discokd without World dUnk authorlhtion.  PM PROJECT COMPLETION REPORT LIMA-AMAZON TRANSPORT CORRIDOR PROJECT (LOAN 1196-PE) PREFACE The following Is a Project Completion Report on Peru's Lima-Amazon Transport Corridor Project for which Loan 1196-PR in the amount of US$76.5 million was approved by the Executive Directors on December 30, 1975. The loan closed on February 28, 1985. Some 93% of the loan amount (US$70.8 million) had been disbursed from the loan account at its closure. This Completion Report was prepared by the Bank's Latin America and the Car".bbean Reglonal Offlce and is based on Information obtained from LAC Information Center, Staff Appraisal Report No. 659a-PE, staff supervision reports, and data on project costs collected from the Ministry of Transport and Comunications. In accordance with the revised project performance reporting procedures this report has been read in the Operations Evaluation Department COED) but the project was not audited by OED staff. The draft Completion Report was sent to the Borrower for comments; however, none were received.  - ii - PROJECT COMPLETION REPORT LIMA-AMAZON TRANSPORT cORRIDOR PROJECT (LOAN 1196-PE) BASIC DATA SHEET Actual/ Cirreat Item Original Plan Estimate Total Project Cost (USSmillion) 128.7 126.1 1/ Overrun (%) -2 Loan Amount (US$ million) 76.5 76.5 Disbursed (US$ million) 70.8 Cancelled 2/ 3.2 Outstanding to cancel 2.5 Economic Rate of Return Road Component (Z) 23 20 Port Component (2) 22 12 Dates Physical Components Completed Road Compo'nent June 1980 June 1985 Port Component December 1978 March 1982 Financial Performance Below Target Institutional Performance Below Target Other Project Data First mention on Files August 1973 Appraisal May/June 1974 Negotiations June 1975 Board Approval December 30, 1975 Loan and Project Agreements May 27, 1976 Effectiveness August 18, 1976 Closing Date December 31, 1980 February 28, 1984 Borrower Republic of Peru Executing Agency Ministry of Transport and Communications Fiscal Year of Borrower January 1 - December 31 1/ Cost of scaled down project. 2/ As of February 28, 1984.  - iii - PERU PROJECT COMPLETION REPORT LIMA-AMAZON TRANSPORT MISSION DATA No. of Man/ Date of Item Month/Year No. of Days Persons Days Report Identification August 1973 8 1 8 10/26/73 Preparation June 1974 10 6 60 5/6/74 Preappraisal January 1975 10 2 20 2/7175 Appraisal March 1975 10 2 20 5t22/75 (Grey Cover) 12/15/75 Total 108 Supervision I July 1976 10 3 30 816/76 Supervision II September 1976 7 2 20 9/21/76 Supervision III October 1976 4 1 4 11/5/76 Supervision IV January 1977 7 2 4 1/21/77 Supervision V February 1977 5 4 20 4/14/77 Supervision VI Junn 1977 11 4 44 7/14/77 Supervision VII August 1977 5 1 5 8/26/77 Supervision VIII September 1977 10 1 10 10/13/77 Supervision IX October 1977 10 3 30 1/5/78 Supervision X March 1978 13 3 39 4/27/78 Supervision XI April 1j78 10 2 20 5/8/78 Supervision XII May 1978 11 4 44 9/15/78 Supervision XIII June 1978 3 1 3 7/12/78 Supervision XIV September 1978 11 3 33 11/16/78 Supervision XV November 1978 14 2 28 1/8/79 Supervision XVI January 1979 10 2 20 2/27/79 Supervision XVII March 1979 15 3 45 7/23/79 Supervision XVIII July 1979 5 2 10 10/25/79 Supervision XIX October 1979 4 4 40 12/15/79 Supervision XX November 1979 8 3 24 1/7/80 Supervision XXI April 1980 3 1 3 5/12/80 Supervision XXII May 1980 8 2 16 Supervision XXIII September 1980 10 2 20 1/28/81 Supervision XXIV November 1980 10 4 40 12/29/81 Supervision XXV May 1981 11 6 66 7/15/81 Supervision XXVI November 1981 5 1 5 1/6/82 Supervision XXVII June 22, 1982 10 1 10 8/23/82 Supervision XXVIII August.1982 3 1 3 9/17/82 Supervision XXIX October 1982 8 2 16 12/6/82 Supervision XXX February 6, 1983 5 2 10 3/30/83 Supervision XXXI August 1983 4 2 8 9/14/83 Supervision XXXII November 1983 3 1 3 11/18/83 Supervision XXXIII April 1984 3 3 9 5/11/84 Total Tff  - iv - PERU PROJECT COMPLETION REPORT LIMA-AMAZON TRAEPORT CORRIDOR PROJECT (LOAN 1196-PE) COUNTRY EXCEANGE RATES Name of Currency (Abbreviation) Soles (SI.) Year Exchange Rate Appraisal Year 1975 US$1 S/. 45 1976 56 1977 84 1978 156 1979 225 1980 289 1981 422 1982 698 1983 1,629 1984 3,404  PERU PROJECT COMPLETION REPORT LIMA-AMAZON TRANSPORT CORRIDOR PROJECT (LOAN 1196-PE) HIGHLIGHTS The main objective of the project was to improve access along the Lima-Amazon transport corridor through the improvement of several sections along the Central Highway, construction of feeder roads, and construction or Improvement of three amazon river ports. The project, after considerable delays in initiating the road works, was reformulated in 1979, with the scope of the road works reduced and a road maintenance component added. The project was largely completed some five years behind schedule. The project experienced extremely difficult implementation problems linked to deficient engineering; progressively weakening MTC technical and managerial capacity, resulting from low compensation and professional staff leaving government service; lack of counterpart funds, exacerbated by difficult economic conditions experienced over the course of the project; complex bureaucratic procedures which hampered procurement of goods and services, and later, the resolution of contractual disputes; and, in the latter years of the project, redirection of MTCts efforts to areas affected by the natural disasters of 1983. Because of these problems, work on some sections of the Central Highway are still under execution. Despite these problems, the project did succeed in significantly Improving access to the very important corridor from the coast to the central mountains and the Amazon region beyond. The ex-post economic evaluation indicates that the road component, with an overall economic rate of return of 201, was well justified. The port component, though still justified, had a lower reestimated rate of return thaa expected at appraisal (12% as compared to a 22% appraisal estimate) because of higher costs than anticipated. The institution-building components of the project were not fully successful. The road maintenance component was not given the attention it deserved by the Government, which was busy tackling problems in its road construction program. The port financial performance was below target. While studies related to institutional and financial reform in the port subsector were completed successfully, the recovmendations have not been fully implemented. Future projects should use the progress made under this project as a stepping-stone to full implementation of these reforms.  PERU LIMA-AMAZON TRANSPORT CORRIDOR PROJECT - (Loan 1196-n.) PROJECT COMPLETION REPORT -. INTRODUCTION 1.01 Peru's topographical, geological and climatic cond.'tions make the provision of transport facilities extremely difficult. The transport net- work reflects these difficulties and has shaped the country's geographic development accordingly. In the nineteentb century, several isolated railways were built by private interests to connect mining areas in the Sierra with coastal ports. Even today, railways and ports are highly specialized and operate mainly as transport systems for the export of minerals. Highways, coastal and river navigation and, much more recently, civil aviation have played a more important role in integrating the country, but the lack of an adequate transport network remains one of the most difficult problems confronting Peru. 1.02 The highway network totals close to 64,500 km of which about 7,000 km are paved and 12,600 km have gravel surfacing. Road development has, since 1970, been concentrated on pavti- and improving some of the more heavily used roads and gradually extending the system. The backbone of the Peruvian road network is the Pan-American Highway, an all-weather asphalt :-oad 2,675 km long, running the entire length of the country along the coast (MAP IBRD 11304 (PCR)). The highway system is still in a very early stage of development, and the few roads connecting the coast with inland areas are generally low standard, unpaved and sometimes, particularly in the Central Andes and Selva regions, little more than rudimentary dry weather tracks. The importance for the country's economic integration of the major road connection from the coast to the inland areas, and the Amazon basin navigable river network, can scarcely be exaggerated. This road, some 800 km in length, is the Central Highway, which starts from Lima, crosses the highest range of the Andes to La Oroya, continues across a high plateau and other mountain ranges, and eventually emerges from the Andean foothills to reach Pucallpa on the headwaters of the Amazon river system. The main elements of the project reviewed in this report consisted of paving the section of. the Central Highway between La Oroya and Huanuco, rehabilitating a paved section between San Mateo and Morococha, and improving the river ports at Iquitos, Pucallpa and Yurimaguas. 1.03 The Bank has been closely involved with the highway subsector in Peru since 1955. Highway development has to date been' promoted by eight loans totalling US$185.5 million. Five of these loans (Loans 271-PE, US$5.5 million, 425-PE, US$33 million, 1025-PE, JSA26 million, 1196-PE, US$76 million and US$93 million, 2091-PE) have supported construction and improvement of different sections of the Central Highway. All the loans have helped-Lo finance feasibility studies and detailed engineering designs, as well as providing for studies, technical assistance and equipment with the objective of increasing efficiency in the highway subsector.  -2- II. PROJECT PREPARATION, APPRAISAL AMiD NEGOTIATIONS 2.01 A Bank transport sector missioa visited Peru In September-October 1972 to update information on the sector and to review Government strategy for development of the transport system. The content of the proposed project was based on the findings of that mission. 2.02 Previous Bank loans in 1960 and 1965 had each financed the cons- tructlon of sections of the Lima-La Oroya-Pucallpa road. During implementa- tion of the Oroya-Aguaytia Road Project (Loan 425-PE, 196X), extraordinarily difficult geological and climatic conditions caused large cost overruns, and the Borrower and the Bank agreed in 1969 to reduce the scope of the original project to match available funds. These works were divided tnto three phases: Phase I: works to gravel standard under Loan 425--PE; Phase II: paving of the Huanuco-Aguaytia and resealing of the Neshuya-Pucallpa sections under the Loan 1025-PE (1974); and Phase III: paving of the La Oroya-Huanuco and Aguaytia-Neshuya sections and rehabilitation of the San 1Mateo-Morococha sections under the Lima-Amazon Transport Corridor Project (Loan 1196-PE). 2.03 Under Loan 1196-PE, in addition to these main road improvements (about 384 km), 110 km of feeeer roads leading into the corridor were to be constnucted, road maintenance equipment purchased and consultants engaged for construction supervision. 2.04 The project also included complementary construction of port facilities in the river ports of Pucallpa and Yurimaguas, the expansion of the port of Iquitos and purchase of port cargo-handling equipment, improvement of street access to the port, and procurement of hydrological craft and equipment to establish a number of measuring stations in the Amazon River system. Financing was provided for consulting services, the preparation of feasibility studies and detailed engineering of transport facilities which could form the basis for future projects, and a regional development study in the Selva Central area. 2.05 The total project cost, including contingencies, was estimated at US$128.7 million equivalent. The proposed loan would finance an estimated foreign exchange component of US$69.4 million (54%). The remaining costs were to be met by the Government. The proposed loan also included some retroactive financing of studies required to complete the preparation of the project and US$7.1 million to cover interest during construction (Table 1). 2.06 Execution of the project was expected to take about four years. Responsibility for the road component was placed under the General Directorate of Land Transport (GDLT). The General Directorate of Water Transport (GDWT) was responsible for port construction and improvement. Both Directorates belong to the MTC. After construction, road maintenance would be done by GDLT, but river port maintenance and operation were to be  -3- carried out by Empresa Nacional de Puertos (ENAPU), an autonomous agency reporting to the NTC. For this reason, in addition to the Loan Agreement with the Government, there was a Project Agreement wlth ENAPU. Administra- tive and organizational problems in both directorates required the appoint- ment of a special coordinator to ensure -the efficient execution of this project. 2.07 The project was the thirte-.th Bank transport project in Peru. It was appraised in May/June 1974, and subsequent to completion of the complementary studies recommended by the appraisal mission, was negotiated in Washington, D.C. on June 9-13, 1975. A loan of US$76.5 million was approved on December 30, 1975, was signed on May 27, 1976 and became effective on August 18, 1976. The original closing date was December 31, 1980. III. PROJECT IMPLEMENTATION 3.01 The principal points affecting project implementation are treated In this report under four main subheadings (i) highway construction and con- struction supervision, (ii) highway maintenance equipment and technical assistance; (iii) river port construction and hydrological equipment; and (iv) other consulting services and studies. Since the scope of the work to have been executed under (i), (ii) and (iv) above was markedly affected by the 1978-1979 reformulation of the project, at a time when work had barely started, the reformulation is treated as a preface to the implementation history. A. Reformulation of the Scope of the Project 3.02 The start of road work contracts financed under Loan 1025-PE was barely startiog when the project was appraised. Work on Loan 1025-PE was delayed by about a year, and execution of the contracted works were completed about two years later than scheduled, with a 76X increase in cost. The delays and the cost increases affected the initiation of roadworks under this project since MTC did not have the capacity or funds to undertake additional work concurrently with the then ongoing works. Only the port element made any progress. Not until mid-1978 was the first roadwork, the 40 km San Mateo - Morococha road section, contracted, by which time the need to reformulate the project had already become apparent and discussions with the Government were underway. 3.03 The 1978 investment budget was insufficient to finance local counterpart costs for more than a limited portion of project's unstarted roadworks, with little prospect of increasing investment budget levels in the following few years. Under these conditions it was estimated that the project roadworks would not be completed before 1985. Road maintenance was also seriously under-budgeted and needed first call on any additional funds which might become available. It was, in consequence, agreed with NTC and the Government that the scope of road improvement would be reduced by dropping the lowest priority road section and that funds thua released would be used to provide interim support for road maintenance (especially with regard to equipment) as well as covering the increased costs (due to inflation) of the construction of the remaining civil works. In addition,  -4- as a step towards eventually preparing another project for financing by the Bank, which would provide more extensive support for road maintenance, the preparation of a nationwide study of road rehabilitation needs and provision of technical assistance to MTC's Equipment Service (SEM). The specifics of the reformulation and actions required of MTC and the Government are listed below, d comparison of estimated costs of the project as appraised and as redefined is shown in Table 1. B. Reformulated Project Components and Required Actions (i) Roads 3.04 The reduced construction component of the project required post- poning the upgrading of the Aguaytia-Neshuya road. Only reconstruction of tbree decrepit single-lane bridges in this road were retained under the reformulated project. The Borrower agreed to prepare and carry out a pro- gram of routine and periodic maintenance of this road, pending its eventual upgrading. The road works that remained ir the project after reformulation were: gi) rehabilitation and strengthening of San Mateo-Morococha road; (ii) improvement of La Oroya-Cerro de Pasco-Huanuco road; (iii) construction of the Pucallpa port access and streets; and (iv) minimum essential improvements of the feeder roads. (ii) River Ports 3.05 The construction and Improvement of the river ports continued under the project with Increased costs to be covered by part of the funds made available by the elimination of the Neshuya-Aguaytia road component. (iii) Road Maintenance Program 3.06 With the exception of supporting cost increases in remaining civil work' and the costs of additional studies (para 3.07), the funds released by the reformulation of the project were to be dedicated to support the road maintenance program for the years 1979-1982, which had been prepared under the two previous highway projects. This program contained specific measures to strengchen the management practices of MTC and SEM; and en estimate of funds needed to provide SEM with an adequate budget to cover the costs of operation, maintenance and repair of a balanced equipment fleet, and to carry out the Road Maintenance Program. Under the reformulated project, key improvements necessary to strengthen maintenance and equipment management and to assure the availability of resources needed for the program, were confirmed. They included, in particular: (a) Equipment and spare parts. The Project included a program for replacement and overhaul of existing equipment and the addition of some new units needed for road maintenance. The reformulated project also included the acquisition of spare parts necessary for overhaul of salvageable units, for major repairs and to set up stocks and tools and repairs to workshops. (b) Budgetary and Ornanizational Requirements. Specific estimates of recurrent budgetary requirements for the duration of the Road Maintenance Program (1979-1982), including provisions for SEM's  -5- materials, labor and overhead expenses were agreed with MTC and the Government. Agreement was also reached on measures to adequately segregate, at the departmental level, maintenance respcnsibilities from other MTC responsibllities. Strengthening of central planning, programming and monitoring of NTC's maintenance activities was also agreed. (iv) Technical Assistance 3.07 The ref6rmulated project also provided technical assistance for additional engineering studies and for strengthening SEM's management practices. Specif$cally: (a) the preparation of final engineering design for the Morococha-La Oroyn road, an extension of the San Nateo Morococha road which had deteriorated and which urgently needed reinforcement and reconstruction; (b) the identification and preparation of a nationwide road rehabilitation program, for the period 1981-1985, which would include the accumulated backlog of deferred periodic maintenance; and (c) the provision of consulting services to assist SEM in planning the rehabilitation, maintenance and renewal of its equipment fleet, as well as organizing the warehousing of spare parts stocks, and improving Its accounting and equipment leasing systems. C. Project ESxecution History 3.08 Execution of the project after the 1978 reformulation was affected by three significant events: (a) two changes in MTC's top management; the first in July 1979 when the Minister was replaced, followed in a few months by the resignation of the vice-minister; the second a year later when national elections returned a new government to power. In each case the changes caused delays in the start of contracts; (b) the floating of the Peruvien "Sol de Oro" in the last quarter of 1978, which resulted in rapid devaluation and inflation, for which provision had not been made under the ongoing contracts. This, at a later date (1980-81) was aggravated by.overvaluation of the sol which led to artificially high construction prices, in dollar terms, which in turn affected decisions regarding the sufficiency of loan funds; and (c) severe financial problems and inability of MTC to meet payments due to its contractors, starting in mid-1982, as a result of financial mismanagement and overspending of its budget during the first half of CY82.  -6- (i) Highway Construction and Supervision 3.09 The following paragraphs provide a summary of the timing and dura- tion of contract execution, the problems encountered and the factors which affected contract costs. (a) San Mateo-Morococha Road 3.10 The first roadwork to be contracted in September, 1978 was 40 kilometers of pavement reconstruction on the San Mateo-Morococha section of the Central Highway. The section includes the highpoint of the road (elevation 4,843 m) at the Ticlio pass. A joint venture of international and local consultants was selected in November 1976 and contracted in May 1977 to update the design of the road (Phase I) and supervise construction (Phase II). The engineering and design update focussed, in particular, on the reasons why existing pavement had suffered rapid deterioration and on providing in the design of the new pavement structure for the almost daily freeze and thaw conditions in the area. The time allowed to the consultant for the update, as well as the budget, were Insufficient to allow for as painstaking geotechnical and soils studies as are needed in the difficult conditions which can occur in the high Andes. Inadequate provision for subterranean water conditions along 6 km of the highest sections of the road certainly contributed to the failure of pavement, that to date has not been successfully repaired. In addition, the time allowed to resurvey the road was not provided for. The updated design was made on existing plans which later frequently proved to be inaccurate. For paving work this normally would not have been of major importance, but when cost increases required an addition In the contract ceiling amount, Peruvian Government requirements necessitated considerable additional survey work to accurately locate both new and existing road elements. This led to delay in obtaining an authorized contract Increase, which also delayed work. 3.11 Inoitations to bid for the road reconstruction work were published in April 1978, the award was made in August 1978 and the contract signed in September 1978. Work which officially started in November 1978 was scheduled to be finished by June 1980. The completion date was later extended to January 1981. 3.12 The main problems which arose during construction came late In the course of this contract. In late 1979 two problems developed on the upper reaches of the road: (i) groundwater seepage from the road bed and sideslopes required the addition of permeable rock fill under the subbase; and (ii) low temperatures, frequent temperature changes and bad weather slowed paving operations. When work should have resumed after the 1980 rainy season, the contractor put forward a proposal to change the pavement to Portland Cement Concrete and delayed remobilization for paving until July/August when MTC decided in favor of the Consultant's recommendation to complete the bituminous pavement. Only one of the two asphalt finishers, however, returned to the project in sound operating condition, causing jointing problems at-the center line of the road. Meanwhile, the only borrow pit for base material on the project, was running out of suitable material. Mechanical stabilization of base material, failed to keep up with rate at which pit and run material was changing, and about 4 km of sub-standard base was placed. The first course of pavement constructed on  -7- this base soon failed under traffic. An improved base-mix was used between Morococha and Abra Anticona, which performed better, while the failed base was re-excavated, and additional crushed stone was added prior to recompaction. However, too much time had been lost to complete paving work In 1980 before the start of the wet season. About 4.5 km remained to be paved. 3.13 MTC informed the Bank in December 1980, that with the concurrence of both the contractor and the consultant, the contract would be terminated, to avoid standby costs, and that the 4,5 km would be completed by force account in 1981. MTC also failed to complete construction however. MTC'e efforts were stopped by diversion of personnel and equipment to cope wlth serious slide damage along the same highway closer to Lima. The slides were triggered by unusually heavy rains on the western slopes of the mountain range but once the equipment was removed, MTC's efforts were never restarted. The road section remains passable but in poor condition. 3.14 The supervison of this contract was not entirely satisfactory. The consultant's contract contained no provision for cost escalation since the Sol exchange rate, at the time, was officially controlled and the Inflation rate was lower. When the Sol exchange control was lifted, in the fall of 1977, rapid devaluation and high inflation ensued. MTC was a long time finding any mechanism to increase payments to the consultant, In consequence project supervision staff was kept minimal and even with adjustmeuts the consultant's remuneration remained low. MTC's management of the consultants also was generally negative in nature with too much effort devoted to establishing fault on the part of the firms and/or contractor, and too little effort in helping solve the technical problems. (b) Huacamayo, Huipoca and Chio Bridges 3.15 The next work to be contracted was the replacement of the three old bridges on the Aguaytia-Nashuya road. In January 1979 the Bank agreed to direct contracting of these structures with the contractor who was still working near Aguaytia on the last road contract financed under the preceding loan (1025-PE). The negotiated prices were reviewed by comparison with prices on similar bridges constructed as part of the improvement of the Huanuco to Aguaytia road section, and found to be satisfactory. 3.16 The bridge construction contracts were signed in February 1979. Construction proceeded on schedule and work was completed by September 1979. Contracts for the bridge approaches were signed in August 1979 and work was concluded by the end of September. Supervision was performed by MTC departmental staff. 3.17 The only problem in connection with the bridge replacement occurred after construction when erosion due to rainfall runoff began to eat away the appproach fills behind some of the abutment winpgalls and threatened to encroach on the paved roadway. In spite of a request by a Bank mission for corrective measures, no action was taken by MTC. On a second visit while passing the site, the Bank mission was told that the needed repairs were no longer MTC's responsibility since a recent reorganization had decentralized maintenance responsibility and the road had passed to the jurisdiction of ORDELORETO. The contractor undertook the repair on his own account.  -8- (c) Pucallpa Streets 3.18 A design for street improvements in the town of Pucallpa, including the proposed ring road for heavy traffic to the port area, was prepared in early 1977, by a local consultant to the Ministry of Housing. A Bank mission reviewed the design In Peru in July 1977, found it far too costly and requested MTC to review the proposed standards. No further work on the project was undertaken for a period of about one year while MTC's attention was focussed on problems related to ongoing works and other project components. In November 1978 a revised desigu was reviewed in the field and again a number of modifications were requested by the Bank as well as a thorough review of the proposed drainage provisions. 3.19 In early 1979, MTC requested, and the Bank agreed, to the work being performed by force account, since the Ministry of Housing was simultaneously starting a program of urban improvements (including a water distribution system and sanitary sewers) which could give rise to delays of a contract for pavement construction. As part of the agreement, MTC engaged a supervising consultant for quality control and certification of work performed. Payment was based on established unit prices which were reviewed by the consultant. 3.20 Actual work did not start until November 1979. The project duration had been estimated at 12 months, but actually lasted two years and three months. The major cause of delay was in obtaining roadway with utility installation completed and therefore in condition to be paved. Work was completely halted, several times, for lengthy periods. Bank missions served to promote contacts between the ministers of MTC and Housing, so as to obtain some cooperation and coordination between work being performed. 3.21 The local consultant, supervising the works, performed well but was inadequately supported by MTC. MTC support was largely delegated to the departmental engineer who had no authority over the activities or priorities assigned by Ministry of Housing work supervisors. MTC and the Ministry of Housing never did succeed in defining and establishing a practical system of coordination at the field level or some other subordinate level in the two Ministries. (d) La Oroya - Huanuco Road 3.22 The major portion of the civil works retained in the reformulated project consisted of completing and paving the La Oroya to Huanuco section (240 km) of the Central Highway. The original detailed engineering for this road had been prepared in the early 1960's and most of the road platform had been constructed under a previous Bank financed project (Loan 425-PE). 3.23 Selection of consultants to update detailed engineering and thereafter supervise construction for both this section of road and for the Aguaytia to Neshuya road section was started in 1977 (pre-reformulation). Proposals were received from six international/national consulting engineering consortiums in Jv'y 1977. MTC evaluated the proposals, made public the results of the evaluation, then disqualified the selected consortium on an alleged technicality. The disqualified consortium began seeking a legal injunction. MTC revised its position and annulled the  -9- proceedings on the grounds of an irregularity in the request for proposals. The Bank expressed its concern regarding the delay which was inevitably resulting from this process and its effect on final construction costs in view of the accelerating rate of inflation in Peru. 3.24 Revised versions of requests for proposals and terms of reference were sent to the Bank in February 1978. Bank comments regarding terms of reference were given to MTC's chief of design in March 1978, after a joint field inspection. These stressed the need for greater emphasis on geotechnical, soils and drainage aspects to avoid construction problems which had arisen under the previous project. The timing for contracting consultants remained uncertain while the project was being reformulated. 3.25 After the reformulation in 1979, MTC proposed that rather than requesting new proposals, the contracts be negotiated with the same consortium of international and local consultants who were completing supervision of work under the previous loan and with a group of local consultants who had all had previous supervisory experience on internationally financed roadworks. The Bank agreed to this proposal and two contracts were negotiated. 3.26 The period allowed for design review was again too short even though at the insistence of the Bank it was lengthened from 3 to 5 months. Problems arose when the international/national consortium began proposing extensive construction of tunnel-shelters designed to pass mud flows (huaycos) over the tunnels so as to avoid road blockage when these phenomena occurred. These and numerous additional bridges were estimated to almost double the resulting cost of construction and could not be justified at the level of traffic using the roads, completely disregarding recommendations for less costly solutions prepared as part of a Geotechnical Study, financed under the previous loans. MTC's engineering department, however, supported the consultant's proposal. The Bank insisted that the original design concepts be retained. MTC senior engineers reviewed the situation and reduced the tunnel and bridge sites to four. The Bank agreed to finance only one tunnel as a pilot model to determine how effectively they would perform and to see what difficulties might be encountered. TIhe tunnel actually has performed well but was lengthened to twice the original length designed. 3.27 The start of prequalification of contractors was also subject to lengthy delays due to a requirement in Peruvian regulations governing civil works contracting which required international firms to joint venture with local firms or sub-contract at least 51% of the contracted work to Peruvian firms. Since this requirement had been introduced after the date of the loan agreement, MTC legal advisors said that it overruled the provisions of the loan agreement. Discussions on this matter and a search for a solution lasted throughout 1978. It was eventually decided to issue the requested prequalification internationally without stipulating this condition, with the Ministry of Economy and Finance engaging to support MTC In obtaining an exception to the regulation, should qualified foreign firms present themselves, unassociated. Invitations to prequalify were issued in June 1979. Only one foreign firm expressed interest and presented their documents in joint venture with their own Peruvian subsidiary. Ten groups of associated contractors were prequalified by the end of July 1978.  - 10 - 3.28 Bids were invited on four lots in October 1979. Awards were made to low bidders in January 1980 but the signing of the contracts were delayed until April 1980 by an Internal investigation and review ordered by the new Minister, which eventually confirmed that the bidding and evaluation procedures were in order. Notice to proceed was given in May 1980. Bids on the remaining two lots (V ald VI) were invited as soon as the review of the earlier bid awards had been concluded, and awards on these lots were made in October 1980 with notice to proceed being given in the same month (Lot V) and in mid-September (Lot VI). 3.29 A number of problems arose during construction due to (a) technical difficulties related to site conditions and high altitude (about 75 km of the road runs at elevations of over 4,000 meters above sea level); (b) design defects; (c) failures in contract management and supervision; and (d) lack of timely payments to the contractors. The main problems are summarized, by contract, below. Further details are given in Annex 1. 3.30 Problems encountered on Lots I, II and V were relatively minor. Delays were mainly attributed to design deficiencies, resulting in changes during construction. Lots III, IV and VI were more problematic, and in fact the later two are still not completed. 3.31 Lot III ran into serious technical problems resulting in failure of the initial sections paved. This failure was attributed to deficient design and quality of work, and insufficient control by the contractor and supervisor. The contract experienced considerable delays as the problem was debated between MTC, the supervisory consultant and the contractor. The Bank responded by twice sending a pavement specialist to analyze the problem. Nevertheless, agreement was not reached on how to proceed until July 1982. Once the work was reinitiated, it proceeded well, and the revised pavement mix design resulted in good quality pavement. This Lot was complete seven months behind schedule. 3.32 Work on Lot IV was started in May 1980 and was incomplete as of February 1985, when the Loan closed. Work on this section progressed well until mid-1981. Then work was stopped until a pavement solution was found for Lot III, and never restarted at full rate. The contractor blamed the poor progress in delays in receiving from MTC technical solutions for problems which arose and arrears in payment by MTC, including compensation for the time lost when paving was halted. The problem was exacerbated by the fact that the contractor's bid prices had been low as the job had been bid when work was scarce. The contractor's work programming was poor and insufficient personnel were assigned. Then in 1981, many new road projects were initiated and the contractor received more lucrative contracts elsewhere. By mid-1982, MTC began to have trouble making payments, the contractors on this and other jobs exhausted their credit. The contract disputes led to eventual paralysis of work on this lot. In 1983 a solution was found and work resumed. However, payments continued to be delayed and the work progressed only sporadically. By February 1985 all but 2 km of the road was completed. The remaining works ar- to be completed by force account. 3.33 Lot VI experienced difficulties similar to those experienced under the other contracts. Problems were initially linked to slow mobilization on the part of the contractor, and then to MTC's financial difficulties which  - 11 - resulted in payment delays. By the end of 1983 the eontract was only 80% complete, and virtually no progress has been made since then. Work stopped completely in December 1984 due to a shortage of funds. The remaining works (estimated at about US$1.5 million) may be included under a revised Loan 2091-PE. This revision Is currently under discussion between the Government and the Bank. (e) Construction Supervision 3.34 Supervision of construction of Lots I and II by the consortium of local consulting firms, started weakly. The firms eventually replaced the director with one of the resident engineers and cooperation between the contractors and consultants improved. With this, inspection and quality control also improved as joint efforts were made to resolve problems. 3.35 On the other lots the inspection by the international/national consortium was of mixed quality. Although the consortium was directed by the team leader of the international firm, who had considerable previous field experience on works financed under earlier Bank loans, the organization which was adopted did not function well. The international firm staffed the inspection for Lots V and VI, with each local firm staffing one of the other projects. Back-up provided to the local firms was mainly administrative. The lack of adequate materials control staff and facilities on Lot III was never covered by the international firm, when their local partner was unable to find suitably qualified staff who were willing to work in the zone. On Lots V and VI, the first resident engineer used the authority delegated to him to make changes up to 5% of contract value, to order construction of additional retaining walls. Many of these had been eliminated from the plans as a result of an inspection by a MTC commission which reviewed the differences between the recommendations of the Geotechni- cal study and the solutions proposed by the consultants. As a result, when additional work was really needed later, his successor had difficulty in obtaining timely approval of changes from MTC and eventually from the Controller General's office, who have to approve increases of item over 10% (no credit being allowed for reductions in other work items). 3.36 The relationships between MTC and their supervising consultants were in general less than satisfactory. MTC appointed a field coordinator, to work with the cot.sultants so as to avoid delays in making decisions which had given trouble on previous loans. The objective had been to have a MTC representative who could join with the supervising consultants and th'e contractors in the process of resolving problems, and who could take decisions and give approvals on the behalf of MTC. Unfortunately, the engineer selected for this post did not make a constructive contribution. (f) Feeder Roads 3.37 The two feeder roads under the project were never improved. In late 1981 a verification of the rate of cost escalation on the project construction contracts was made in connection with the preparation of the Eighth Highway Project (Loan 2091-PE). In US dollar terms prices had escalated 30% in the previous 12 months. Even under an apparently conservative assumption that the future rates of escalation would decrease, it appeared that loan funds would barely suffice to continue participation  - 12 - in the-ongoing contracts. In consultation with MTC it was agreed that MTC would improve the feeder roads using force account and its own funds, leaving the loan funds for the payment of contracted works. As a result of the ensuing financial crisis, MTC never started this work. (iii) Highway Maintenance Equipment end Technical Assistance (a) Procurement 3.38 Purchases of maintenance equipment, spare parts and workshop tools were made under the project in four tranches. The first purchase made in August 1977 was in the amount of US$150,000 for spare parts for dump-trucks. The second tranche was to cover procurement of 46 vehicles, 35 equipment units, and workshop tools. Bids were invited in October 1977, received in December 1977 and the evaluation was completed in March 1978. All bids were rejected for 5 types of vehicles, when 4 of the 5 dealers failed to meet several legal/administrative bid requirements, and no awards were made on 4 types of equipment due to insufficient or non-responsive bids. The remaining equipment was awarded to nine suppliers for about $2.6 million. The bids for worlshop tools were also rejected as the proposals were far too costly (about 30% in excess of estimated cost), generally because the suppliers were quoting on substantially better tools than required. The third tranche consisted of rebidding of items not awarded in 1978. Four suppliers were awarded contracts in the total amount of US$1.4 million, in April 1979. Workshop tools were also rebid and 6 contracts were awarded in October 1980, in the total amount of US$675,000. A fourth tranche of maintenance equipment was agreed with the Bank and bids were invited in 1980 resulting in awards to two suppliers in December 1980, in the amount of US$1.9 million. 3.39 Bids for Geotechnical equipment, after long delays due to the low priority accorded to geotechnical work by MTC management, were taken in 1982. All bids were rejected due to insufficient bids being received. It was agreed with the Bank to use international shopping which required a special resolution from Government. This was obtained in late 1982 but with the heavy flooding in northern Peru in early 1983, all MTC's funds and efforts were concentrated on the emergency requirements. In late 1983, with the loan closing date approaching the matter resurfaced. A legal opinion was required as to the validity of the 1982 resolution in 1983. By the time this was obtained, the fiscal year was over and no spending authority had teen provided in the 1984 budget. 3.40 A final tl.-anche of spare part and workshop tool procurement also fell victim to lack of spending authority. Bids were evaluated in December 1983 but MTC management elected to try to purchase vehicles rather than spares with the small amount in the 1984 budget allocated to equipment. Bids for additional workshop tools were received in October 1983 but had to be rejected as none complied with the short delivery date allowed by NTC in order to try to receive the tools before the loan closing date. It was then proposed that funds from 1196-PE be used to finance spare parts and tools bid under Loan 2091-PE which were essentially the same as those which were to have been included In the final tranche of Loan 1196-PE. The loan was to be extended to February 28, 1985 to allow for the time needed to receive legislative approval to utilize funds from 1196-PE to finance items bid  - 13 - under 2091-PE, for contraction of these items and delivery. By the time the legislative approval was received and the Bank extension of the closing date approved, it was too late to order the spare parts in the 1984 budget year. As a result, the spare parts and workshop tools were not ordered. They will be rebid and financed under 2091-PE. (b) Equipmeut Overhaul 3.41 Lists of equipment selected for overhaul were reviewed by technical assistance consultants to SEM and Bank consultants. The program repaired and overhauled 43 units of equipment and 40 dump-trucks, but work went slowly for lack of sufficient mechanics. Various measures were discussed with MTC management regarding contracting additional mechanics but there was a fear that disparity in pay between contracted mechanics and SEM's mechstnics would lead to morale problems and loss of SEM staff. 3.42 The second phase of the overhaul program of another 55 units never started due to spare parts acquisition being halted (3.50). In addition, after the change in Government in 1980, a reorganization of MTC resulted in disbandment of the equipment service with its role changed to a staff function. Control of equipment and workshops was assigned to individual departments. Central spare parts stocks were distributed to the departments but no clear guidelines were formulated to clarify how the workshop system would function or what level repairs can be undertaken in which departments. Only 7 of the departmental workshops have space and facilities for major repair. (c) Technical Assistance 3.43 As part of the reformulation, technical assistance was provided to SEM to help organize and control equipment overhaul, improve management and accounting for spare parts procurement, storage and distribution, as well as to improve management of the equipment fleet. An international consultant was contracted and started work in July 1980. The technical assistance lasted 18 months and produced a number of recommendations but made little progress in having them implemented. In the latter six months internal disagreements in the consulting firm led to removal of the project manager and no suitable replacement was provided, prompting termination of the contract in January 1982. It was agreed between MTC and the Bank that a new firm would be contracted to assist with implementing recommended procedures and adapting them to the revised organization, but although terms of reference were agreed, there was no further action taken by MTC. (ill) River Ports 3.44 The original completion date for the river ports was 1978. The works, however, did not get started until mid-1977, almost a year after lcan effectiveness. Iquitos was the first port to be undertaken, but due to some design changes for the floating dock, completion was postponed several times. Another delaying factor was a large quantity of unsuitable material which had to be removed before foundations fo- %.ie land-side installations could be made. The work was finally Inaugurated in May 1980, but was not formally taken over by ENAPU until much later due to a dispute concerning extra costs and problems with the decking. Due to the high temperature in  - 14 - this area, the original asphalt paving had to be substituted by timber decking on the floating steel dock. Additional portable conveyors and a separate mooring buoy also provided for additional through-put capacity. The final cost of work at this port was US$12.3 million which was 50% greater than the appraisal estimate. 3.45 Conceptual design changes for Pucallpa and some design changes for Yurimaguas also delayed the start of these ports until December 1979 and November 1979 respectively. The design changes for Pucallpa essentially concerned the access bridges and the number of pontoons in the dock which initially was three and ultimately was increased to five. Despite this, the lowest bid was only 5% above the engineers' estimate for Pucallpa. The Naval Shipyard, SIMA, was subcontractor for all floating pontoons, the large ones made in Iquitos and the smaller ones for Pucallpa brought in by road from Lima. The work in the Pucallpa port was finished in March 1982 without further major problems, but at much higher cost due to inflation. These works cost a total of US$10.8 million, 157% and 93% greater than the appraisal estimate. 3.46 The Yurimaguas floating dock was based on reconditioned surplus pontoons from the previous dock in Iquitos. Unfortunately, the reconditioning required more steel than expected and the lowest bid was 26% higher than the consultant's estimate. In part, those bids also reflected the perception of contractors that working at Yurimaguas was likely to be more difficult and expensive due to its isolated location and lack of facilities. The final cost (US$4.0 million) was 122% higher than the appraisal estimates. The work was finished in March of 1981. Due to the lack of equipment and administrative staff, actual operations did not start until October 1981. Of concern is the fact that the port is isolated from the main Huallaga river part of the year. The port was located on the quiet tributary Paranapura instead of the Huallaga river since the fast-flowing Huallaga would create hazards for mooring of river craft. Unfortunately, at times a sandbar builds up by the Huallaga partly blocking the Paranapura- Erosion on the Huallaga river bank is so rapid, however, that this prob: a may be alleviated in a few years time. The problem is currently being studied by MTC. 3.47 Concerning cargo handling and floating equipment, an inordinate amount of time passed between Bank approval of awards and final procurement due to MTC procurement procedures. In addition, for work boats, delays in awards were so long that finally a new bidding had to be carried out after major redesign of the boats, reducing cost from about US$229,000 to US$89,000. Some of the hydrological equipment could not be purchased for similar reasons. After much delay, cargo handling equipment was received more or less in line with original cost estimates. (iv) Consulting Services 3.48 In addition to construction supervision, this loan originally included funds for several studies: Aguaytia-Neshuya detailed engineering; a study of the strategy for coastal transport; Ambo-Huacho feasibility study; Selva Central rural development study; a study of the investment planning for ENAPU S.A.; and a feasibility study of six airports along the Lima-Iquitos corridor. At the time of reformulation of the project, the  - 15 - major additions were the road rehabilitation study and the technical assistance to SEM. In addition, final design for the Morococha-La Oroya road was included. 3.49 Of these various consulting services, the Aguaytia-Neshuya detailed engineering was quickly finished. The feasibility study for the Ambo-Huacho road was originally intended to be financed as part of this loan. However, following a request by MTC to carry out the study with Its own forces, the Bank agreed to make the funds, previously alloted for financing of the study, available for financing of detailed engineering instead. Similarly, the study of the feasibility of various alternatives of coastal traffic was completed largely by MTC'a own staff. This Coastal Corrido,r Study proceeded slowly with individual foreign consultants giving some assistance. 3.50 The Regional Study of the Selva Central was carried out in several stages. The prefeasibility stage was carried out largely by MTC staff. The prefeasibility stage was completed in May 1980 and the feasibility stage was largely completed in 1983. Five specialized consultants on the subjects of soils, forestry, ecological Impact, airships and shallow river transport were provided on short term basis. The river transport consultancy, although selected, was never contracted due to administrative and financial problems. The Regional Study of the Selva Central became a basis for several projects to be financed by International lenders, including the Bank, KfW, USAID and IDB. 3.51 The ENAPU study carried out by CENIP (para 6.01) faced no major problems but has so far had limited impact. The airport feasibility study was the foundation for the Aviation Development Project (Loan 1963-PE). 3.52 The road rehabilitation study did not start until November 1981 due to a lengthy process of preparing terms nf reference for a type of study which was an entirely new concept to MTC. The delay was aggravated by the change of Ministers in 1980. Prequalification of international/local consultant joint ventures and selection of a firm took most of 1981. The services were delayed when NTC decided to purchase special pavement testing equipment rather than having the consultant do so, which resulted in equipment not being available when needed (some never was purchased). The consultant adapted his work program well and succeeded in introducing the computer programs as well as other technical innovations. IV. COST ESTIMATES AND DISBURSEMENTS 4.01 A summary comparison between appraisal estimates and actual or final estimated costs is shown in Tables I through 4, and is summarized below. Table I shows the changes as a result of the 1978 reformulation of the project; Tables 2 and 3 give details regarding the road component while Table 4 gives details on the river port costs.  - 16 - SAR Actual Cost or Actual as a Road Construction Estimate 1/ Current Estimate 2/ Percent of SAR (US$ millIon) --(X- San Mateo-Morococha 5.9 9.0 153 La Oroya-Huanuco 51.2 64.2 125 Pucallpa Streets 3.2 2.1 66 Feeder Roads 2.0 0.0 - Aguaytia-Neshuya 29.7 0.6 2 Road Maintenance Equipment 5.5 8.7 158 Consulting Services 11.3 11.0 97 River Ports & Equipment 19.8 30.5 154 Total 128.6 126.1 98 1/ Including Price and Physical Contingencies. -/ Excludes works dropped from the project. 4.02 Loan funds were reallocated twice, as follows: Original Reallocated Loan Agreement M 1~979 January 1981 (US$ thousands) (1) Civil Works 35,100 30,300 47,000 (2) Road Equipment 4,000 9,900 10,500 (3) Soils Laboratory 200 300 (4) Cargo Handling Equipment 4,200 4,200 4,200 (5) Hydrological Equipment 500 500 600 (6) Consulting Services 5,400 7,200 6,800 (7) Interest 7,100 7,100 7,100 (8) Unallocated 20,200 17,100 0 76,500 76,500 76,500 4.03 The loan closing date has been extended three times, first from December 31, 1980 to December 31, 1982 and then to December 31, 1983. In December 1984, US$3.2 was cancelled and the loan extended to February 28, 1985 to cover equipment and spare parts purchases. As of February 28, 1985, US$70.8 million had been disbursed, or 93% of the original loan amount. V P FINANCIAL PERFORMANCE PORT -COMPONENT 5.01 The Empresa Nacional de Puertos (ENAPU) is in charge of maintenance and operations of existing facilities while the Direccion General de Transporte Acuatico (DGTA) is responsible for port construction and improvements. The project objectives regarding port financial policies went beyond the three river ports and extended to the overall financial situation of ENAPU.  - 17 - 5.02 There were three financial covenants in the Project Agreement: (a) ENAPU, by December 31, 1976, to revise, on the basis of an ongoing costing study, its tariff structure so as to enable it to earn an annual rate of return of at least 6%; (b) Iquitos, to achieve a working ratio of 140 in 1976, 120 In 1977 and 100 in 1978, a~nd thereafter; (c) the three project ports, as a whole, to achieve a working ratio of 100 in 1979 and improve-thereafter. None of the targets agreed upon have been met, and it is unlikely that the conditions (b) and (c) will be met in the foreseable future. The following paragraphs outline the financial performance of ENAPU as a whole and the three project ports. A. ENAPU 5.03 ENAPU's financial position varies significantly from the appraisal forecast, with shortfalls in the financial results experienced in every year except 1979. The main reasons behind the shortfalls as compared to appraisal expectations are (a) lower than expected port traffic; and (b) inadequate tariff adjustments to offset the effects of inflation. Traffic peaked in 1975, and then fell dramatically until 1980. Dry cargo fell by 40% between 1975 and 1980, totalling only 58% of forecast levels by 1980. Liquid cargo in that year reached only 44% of forecast levels. Traffic improved after 1980, then fell again in 1983 (Table 5). 5.04 ENAPU'a failure to meet the financial targets set out at appraisal was also due to the failure to make needed tariff adjustments in a timely manner. The Bank relied on an UNDP advisor, at that time employed by ENAPU, to improve the cost accounting system, and to relate more closely costs and tariffs. Despite the Bank's insistence, proposals made by ENAPU to adjust tariffs periodically in relation to the increase of expenditures (resulting mainly from inflation) were not always approved by Government, which seemed convinced that any significant increase in port charges, particularly on cargo imports, would have an immediate effect on consumer prices. Nor have efforts to relate tariffs more closely to costs been fully successful. 5.05 The above factors are reflected in ENAPU's income statements for the period 1975-80, given in Table 6. Except when tariffs were ddjusted, the financial results were less favorable than anticipated. The operating and working ratios targets were generally not met, and the rate of return target was met only in 1979. In 1982 and 1983, ENAPU's financial position improved somewhat. Table 7 shows ENAPU's balance sheets as of December 31, 1975-1983, comparing forecast and actual figures. Notwithstanding its weak earnings' position, ENAPU's financial situation is still basically sound. 5.06 In response to unclear port financial policies and in the unwieldy relationship between Government and ENAPU (e.g., the separation of re.ponsibility for construction and operations), it was agreed at loan negotiations that a study would be carried out, not later than December 31, 1976, to determine the appropriate financial policies for ENAPU, including  - 18 - payment of dividends to the Government, use of concession fees from private ports aud servicing of debt incurred by Government for port construction. The etudy was carried out by ENAPU and completed i. July 1978. No action on the study was taken, and consequently the practical effect of the study has so far been very limited. This ts regretable since ENAPU's Institutional framework was amended in 1981 and the opportunity to streamline the financial relationship between Government and ENAPU has been missed. By Legislative Decree in 98 dated May 29, 1981, ENAPU became ENAPU-Peru, S.A., a Sociedad Anonima, subjected to private corporate law, although fully Government owned (para 6.02). B. PROJECT PORTS 5.07 Contrary to the overall trend affecting ENAPU over the period 1977-1983, traffic at Iquitos and Pucallpa have generally exceeded the appraisal forecast; a comparison of appraisal projections and actual traffic volumes is given in Table 8. ENAPU only started handling traffic at Yurimaguas in late 1981, and has only kept sporadic tr&ffic statistics for that port with only one full year of traffic statistics available. 5.08 Notwithstanding a favorable traffic trend, the financial results at Iquitos and Pucallpa are most disappointing. Details of the income accounts for the project ports are in Table 9. Section 3.03(a) of the Project Agreement provides for Iquitos to acbieve a working ratio of 140 in 1976, 120 in 1977, and 100 in 1978 and thereafter. Actual performance was substantially worse than forecast, as shown below: ACTUAL 1975 1976 1978 1979 1980 1982 1983 Working Ratio 164 - 443 579 578 357 172 Operating Ratio 176 428 502 635 714 441 205 For 1983, compliance with Section 3.03(a) of the Project Agreement would have required a 70% increase in Iquitos' operating revenue. Such an increase would have been unlikely as it conflicted with government policy of assistance to the Selva Region. 5.09 The Project Agreement also provides for the three project ports, as a whole, to achieve, as from 1979, a working ratio of 100, and improving thereafter. Actual performance has been below appraisal expectations, and if current trends continue, this target will not be met in the future. 5.10 At a management meeting preceeding loan negotiations, the financial covenant to be applied to the project ports was discussed in detail. The consensus was that, notwithstanding the Government's policy to subsidize public services in the Selva Region, financial objectives should be set and quantified. It was nevertheless accepted that such objectives would be lower than those usually required for port operations by the Bank; hence, the covenant was based on the working ratio. Actual results now show that, although modest, the objectives were too ambitioQs, as they ran counter the political determination to continue subsidizing the port services in the Selva Region.  4-. C. AUDIT 5.11 Section 3.02 of the Project Agreement makes provision for ENAPU to have Its accounts audited annually, by independent auditors acceptable to the Bank, by not later than four months after the end of each year. The accounts for 1975, 1976 and 1977 were audited in a timely manner while there were delays with accounts for 1978, 1979 and 1980. VI. INSTITUTIONAL DEVELOP1ENT A. Port Institutional Development 6.01 In 1968, with the abolishment of the National Port Authority, the Government divided responsibilities in the port sub-sector; DGWT in MTC became responsible for port planning, design and construction, while ENAPU kept responsibility for port operations and maintenance. This division, a common feature in the transport sector in Latin America, always raises a problem of coordination. While accepting the institutional set-up, the Bank felt that It would serve a useful purnose for the Government to study the ways and means to increase the participation of ENAPU in port planning, design, and construction. The Government agreed, and Section 4.07(a) of the Loat Agreement made provision for: (a) the carrying out of the study by June 30, 1976; (b) exchange of views between the Government and the Bank on the conclusions of the study; and (e) the carrying out of a plan of action prepared on the basis of such conclusions. There was strong opposition to the study In some Government spheres and delays were incurred. To strengthen the case and overcome resistance, the Bank agreed to finance 100t of the cost of the study. After substantial delay, the study was carried out in 1979 by CENIP (Centro Nacional de Productividad). The study was of high professional quality; its main conclusion was that ENAPU should be given direct responsibility for port investment, while MTC should deal with policy issues, inter-sectoral coordination and review of ENAPU's planning and implementation decisions. In April 1980, the Bank informed the Government and ENAPU that it supported CENIP's conclusions and requested their comments. This request has since been repeatedly addressed to Government and ENAPU but to no avail; MTC is awaiting ENAPU's comments and vice-versa. The issues are politically - sensitive and none of the institutions involved wants to take a stand. It Is obviously difficult for them to comment on proposals which may curtail their functions and responsibilities. No clear-cut decision has emerged so far from the CENIP study. 6.02 By Legislative Decree of May 29, 1981, ENAPU became ENAFU-Peru, S.A., subject to private corporate law. The decree confirms the responsibilities of ENAPU as being the administration, operationas, equipment and maintenance of ports, but adds that ENAPU can undertake port construction, If so authorized. This change, which is a timid implementation of the CENIP  - 20 - study's conclusions, is encouraging but It requires to be better defined. Indeed the new institutional set-up now provides for two organizations - MTC and ENAPU - to construct ports, and unless their respective responshillity is clearly set, confusion, and ensuing waste, is unavoidable. Progress of the project under review was already adversely affected by infrequent and inadequate interaction between DOWT and ENAPU; the situation would be worse should both organizations have overlapping respotsibiLity in port construction. 6.03 Section 4.08 of the Loan Agreement made provision for the Government to appoint, within MTC, a project coordinator to coordinate all project activities. An office for coordination and supervision was established with adequate secretarial staff; the project coordinator was given high ranking administrative status. Five coordinators have been successively appointed during project execution, but not always of adequate professional level and their action has been for all practical purposes limited to monitoring progress of the projects. Section 4.08(c) of the Loan Agreement requires preparation of a report containing an evaluation of the position of project coordinator and the need of such position for the sufficient execution of the project. Such a report was completed but it did not have any significant impact. B. Highway Maintenance 6.04 An important objective of the Lima-Amazon Corridor Project was to continue the process of improving highway maintenance started under earlier loans. The Loan Agreement contained specific covenants requiring the Borrower to carry out a special nationwide road maintenance program based on the recommendations of a consultant's study financed under the two previous loans, including the prompt provision of funds, facilities, services and other resources required. Another covenant required the Borrower to prepare and carry out a plan of action to revise existing practices regarding the rental of maintenance equipment. The project reformulation expanded the project's emphasis on improving road maintenance by including an equipment overhaul and replacement program and specific actions to be taken to improve management of maentenance activities (para 3.07). 6.05 The progress made in introducing improved maintenance management and carrying out improved maintenance has been below expectations, limited by the few staff available to work on introducing recommended procedural improvements, Insufficient budget allocations and lack of serviceable equipment. Only the first phase of the overhaul program was carried out. Additional complications arose from frequent institutional chauges, replacement or reassignment of staff trained In new procedures; attempted decentralization without clear delineation of responsibilities and continuing depletion of technical and managerial expertise due to low compensation levels and uncertain career prospects. The dismantling of SEM in 1981 was a regressive move rather than an advantage. At the same time, it must be noted that the latter part of the project implementation period coincided with a series of emergencies (flooding, landslides on major highways) which required diverting scar-e human and financial resources from the implementation of the planned maintenance program.  - 21 - VII. ECONOMIC REEVALUATION A. Road Component 7.01 The road component was justified at appraisal on the basis of quantifiable benefits accruing to road users, primarily reduced vehicle operating costs. The appraisal estimate of the economic rate of return (ERR), not including time savings, was over 30% for the San Mateo-Morococha road section, and 23% for the La Oroya-Huanuco road section. The estimated ERR for the Pucallpa street improvements was 18%, and for the feeder roads 10-18%. Finally, the Aguaytia-Neshuya section had an estimated ERR of 9%. During project reformulation, the scope of works on this latter section was changed to provide only for construction of three critical bridges. 7.02 In the ex-post economic reevaluation, only vehicle operating costs were considered. For those sections of the La Oroya-Huanuco road not yet complete, it was assumed that these would be finished by end 1985. On the San Mateo-Morococha road, some 4.5 km of road which was never properly finished was considered to be in poor condition both with and without the project (para 3.13). Average traffic on most of the road sections is lower than projected at appraisal, due to the difficult economic situation which Peru has faced since 1977 (Table 10). For the purposes of the reevaluation, a lower rate of traffic growth was assumed (4% p.a.) as compared to appraisal estimates (6-8.5% p.a.). In the reevaluation, the real cost increases caused by construction delays and design changes were compensated by the fact that the latest available vehicle operating costs estimates for Peru are higher In real terms than the appraisal estimates (Table 11). The estimated ex-post economic rates of return for the road components are 35% for the San Mateo Morococha road, 18% for the La Oroya-Ruanuco road and 24% for the Pucallpa street improvements (Table 12). B. River Ports 7.03 At appraisal, the main benefits included In the economic analysis of the river ports were (a) reductions in shipping costs because of better utilization of barges and other river craft; (b) reduced labor costs; and (c) reductions in cargo damages. The appraisal estimated ERRs were 24% for Iquitos and Pucallpa and 17% for Yurimaguas. These same types of benefits were considered In the ex-post evaluation. Port traffic was assumed to grow at 6X p.a., as compared to appraisal estimate of 6.4-7.2% p.a. While still acceptable, the ex-post economic rates of return for the Pucallpa and Iquitos Ports are at 13% and 12%, respectively, below appraisal estimates, despite the fact that traffic has generally met appraisal expectations (Table 8). The lower than expected results are attributed to higher real costs of these works. Traffic at the Yurimaguas port, based on very weak data base (only one full year of statistics are available) appears to be below appraisal estimates. This, combined with real cost increases, led to shortfalls at that port, with an ex-post ERR of only 6%. Nevertheless, because the Yurimaguas port represents only 14% of total river port costs (and 3% of total project costs) the overall port ex-post ERR is still an acceptable 12% (Table 12). 7.04 With the high proportion of buses and particularly trucks on the project roads and the competitive nature of transport industry, it is likely  -22- that the transport cost savings will be reasonably well distributed between truck and bus operations on one hand and the travellers and shippers on the other. Since this Central Highway is one of the main transport links of the country, transport cost reduction and reduction of road closures is lmportant for consumer prices for certain commodities in Lima as well as for the agricultural development of the Eastern Piedmont and the large areas served by the Amazon River system through Pucallpa. VIII. ROLE OF THE BANK 8.01 The Bank made important contributions in the identification and preparation of this project, advocating the merger of what essentially started as separate projects in two different subsectors. The fact that virtually all subsectors, except railways, were influenced by the project led to better coordination of transport investment. The multi-modal nature of the project, along with difficulties resulting from weak MTC management, inadequate counterpart funds and technical problems, required, however, a major supervision effort over some seven years, with an average of 100 staffdays per year. 8.02 The Bank responded to the difficult implementation problems with flexibility, as evidenced by the reformulation of the project in 1979. The Bank was also instrumental in expanding the project's focus with regard to road maintenance. Even though that aspect of the project ultimately proved to be less successful than had been anticipated, the emphasis on road maintenance was, and continues to be, of high priority in the sector. 8.03 In its supervision of the project, the Bank took an active interest in assisting MTC solve the numerous technical problems encountered. For example, the Bank engaged pavement specialists to assist in the problems which arose in the La Oroya-Huanuco road. Even though the Bank's advice was not always acted upon in a timely manner, the Bank's intervention was ultimately useful. The Bank also persisted in urging the adaptation of more flexible and less costly designs in Peru's geologically unstable areas. In addition, the Bank played a useful role in breaking impasses in project execution by working with the highest levels in MTC and other government entities to simplify extremely complex bureaucratic procedures. 8.04 Although Bank supervision of the institution-building aspects of the project was also relatively intense, the impact of Bank dialogue on these issues was below target, particularly with regard to development of road maintenance, and strengthening of ENAPU's role in port infrastructure planning. In this regard, it appears that the weakness of these i=qtitutions was underestimated. IX. CONCLUSIONS A. Achievement of Project Objectives 9.01 This project, despite the considerable difficulties in its implementation, represents an important contribution to the provision of access from the coastal region to the Central mountains and finally to the  - 23 - large tropical rain forest areas of Peru. The project suffered from its Inception from lack of counterpart funds and implementation capacity, exacerbated by the extremely difficult economic conditions experienced over the course of the project. Nevertheless, the ex-post economic evaluation of the project indicates that the project was justified, even taking into account the long implementation delays and cost increases. The road component has an estimated ex-post economic rate of return of 20% and the port component 12%. 9.02 The project has been less successful in achieving its institution- building objectives. With regards to port issues, the studies which were to lead to the rationalization of responsibilities for port planning and construction and of ENAPU's financial policies were successfully completed. However, the recommendations of the studies were only partially implemented. While the 1981 changes on ENAPU's institutional framework set the stage for a more rational approach to port planning and operations, an unwieldy relationship between ENAPU and MTC persists. In the road component, progress in strengthening road maintenance under the project was disappointing. The road maintenance program suffered from inadequate staffing, frequent institutional and personnel changes, and insufficient budget authorizations. Indeed, MTC's management capacity overall declined over the course of the project as declining real compensation levels resulted in high level technical staff leaving MTC. It should be noted that these largely exogenous problems were common to all components of the project. 9.03 The financial performance of the port project was also below target, both in terms of ENAPU's financial results and those of the project ports. The shortfall in ENAPU's performance was caused in part by traffic shortfalls which would have been difficult to foresee at appraisal, but also was due to failure to raise tariffs in a timely manner. In retrospect, the Bank's ability to engage in constructive dialogue through this project regarding ENAPU's performance was limited by the fact that ENAPU was not the borrower, and that the project ports were, from ENAPUt's perspective, a fairly minor part of its operations. With regard to the project ports, the Bank was aware of, but probably underestimated, the Government's resistance to raising tariffs at the project ports in order to meet the financial targets. 9.04 Under the project, studies regarding infrastructure requirements were successfully completed. One has led to a Bank rural development project and a second, on road rehabilitation, will form the basis for the next roads project. Lessons 9.05 Several lessons can be drawn from this project. These have already been useful for the design and implementation of the Eighth Highway Project, Loan 2091-PE. These are: (a) institutional capacity: MTC's capacity (financial, technical, managerial) to implement the project, particularly the road component, should have been more carefully assessed. Given the difficult experience in earlier projects on the Central Highway, this project should have been delayed until works under Loan 1025-PE were well underway. Future Bank projects have, and should  - 24 - continue to have as a primary objective, institutional and compensation reform which is essential if MTC Is to overcome the decline in capacity experienced over the course of the project; (b) Status of Proje:t Preparation. Even though the final engineering for the road components had been completed before project appraisal, it had to be updated. Given the known techuieal difficulties involved in the construction of the Central Highway, this updating should have been completed prior to loan approval, in liue with current practice. Final engineering should also have been completed for the ports prior to loan approval. The tlme allowed for updating of the studies was insufficient, and this led to design deficiencies. These factors contributed to time and cost overruns and eventually to the contract disputes; and (c) Port Institutional and Financial Improvements foreseen under the project may not have been realistic, given the relatively minor role played by ENAPU. While increasing ENAPU's role would most likely not have been possible at the time, the 1981 institutlonal reforms will make it possible for ENAPU to be a borrower in future port projects, thereby greatly increasing the opportunity to engage in a constructive dialogue with it on port issues.  PEBU PROJECT coPLIo RBEPOB LIMA-A0AZO1 TRANSPORT CORRID0R PROJECT (LOAN 1196-PE) Eatimted Costs of the ProJect (US5 millions) erolect as Appraised I1975) Reformulated Project (1979) Local For. Total Part Local For. Total Part S A. Civil Works (i) Improvemenct of the Lima Pucallpa Road fIncludiag Pucailpa streets loading to the port) 31.1 28.4 59.5 28.4 23.0 21.0 44.0 21.0 48 (ii) Feeder road improvements 1.1 1.2 2.3 1.2 0.8 0.7 1.5 0.7 48 (iii) Comstructiom: Pucallpa and lurimaguas Ports 2.2 2.0 4.2 2.0 2.9 2.8 5.7 2.8 49 (iv) Improvement:.Iqnitos Port 2.1 3.5 5.6 3.5 6.2 5.8 12.0 5.8 48 Sub-Total-Civil Works 36.5 35.1 lF 35.6 3. 3 2.9 30. 63.2 3.3 48 B. Equipment (i) Road maintenance equipment and spare parts 0.4 4.0 4.4 4.0 1.0 9.9 10.9 9.9 91 (i-a) Soils exploration: laboratory equipment - . - - - 0.2 0.2 0.2 100 (ii) Cargo handling. fire fighting and dredging equipment - 4.2 4.2 4.2 _ 4.2 4.2 4.2 100 (iii) Hydrological equipment t 0.5 0.5 0.5 - 0.5 0.5 0.5 100 Sub-Total - Equipment 4 8.7 9.1 8.7 1.0 14.8 15.8 14.8 94 C. Consulting Services (1) Feasibility study and engineering of Neshuys to Aguaytia Road (115 oss) 0.2 0.3 0.5 0.3 0.1 - 0.1 - 0 (1i) Supervision of items A(i) and (ii) above 1.5 1.8 3.3 1.8 1.7 1.9 3.6 1.9 53 (iii) Econouie and financial study for A(iii) and (iv) above) 0.3 0.4 0.7 0.4 (iv) Supervision of items A(iit) and (iv) above) 1.6 1.5 3.1 1.5 48 (v) Hydrological study 0.2 0.3 0.5 0.3 m (vi) Feasibility studies htaebo-hAbo Road, Coastal Corridor and regional developmaet study 1.6 2.3 3.9 2.3 1.o 2.3 3.9 2.3 59 (vii) Preinvestment study for airports 0.2 0.3 0.5 0.3 0.2 0.3 0.5 0.3 60 (viii)Pinal design and feasibility analysis of Morococha to La Oroya Road (including La Oroya bypass) - - - 0.2 - 0.2 0.1 50 (ix) Batiovride road rehabilitation study - - - - 0. 2 0.8 1.0 0.8 80 (x) Technical assistance to the Mechanical Equipment Service - - 0.1 0.3 0.4 0.3 75 Sub-Total - Consulting Services 4.0 5.4 9.4 5.4 5.7 7.1 12.8 7.2 56 D. Contingencies (a) Phyaical Roadvorks (items A(i) sad (ii)) 4.8 4.4 9.2 4.4 7.1 6.5 13.6 6.5 48 River port works (items A(iii) and (iv)) 0.4 0.6 1.0 0.6 2.5 2.3 4.8 2.3 48 (b) ExPected Price Iereases Civil works (itemes A(i) and (ii)) 1 1 5.7 11 8 S.7 48 (items A(iii) and (iv)) 12.5 12.0 24.5 12.0 1.1 1.1 2.2 5.7 48 Equipment (Items B(i) and (i-a)) 0.1 0.7 0.8 0.7 88 (items B(1) and (iii)) 0.2 1.7 1.9 1.- - - - - Consulting Services 0.5 1.5 2.0 1.5 0.8 0.8 1.6 0.8 50 Sub-Total - Contingencaies 18.4 20.2 38.6 20.2 19.5 17.1 36.6 17.1 47 PROJECe TOTAL 59.3 69.4 128.7 69.4 59.1 69.3 128.4 69.4 54 502 Interest during construction 7.1 7.1 Loan Amount 76.5 76.5  IERU FJWECf aOMUvriN ReE wor-mmm mw w aXRIvam Rx0EC (Loan 1196-WE) Road CnPoent: Actual, Appasal ad Refwulation Pro ject Costs C~$ milons) a/ 1/ E b/ Atual as a rcent of Act-al Costs Appraise] ml atesm Refonlti Esae Total Costs Esttmated at vRoject 2MMM local Forel Total Local Farei Total Loal Foreign Total 1 Piroject Refo_ 1. Civil wrks (a) LimEa-PcaUlpa Road c/ 39.5 34.4 73.9 46.4 42.5 88.9 .1 32.6 68.7 83 108 (b) Feeder Roads 1.1 0.9 2.0 1.7 1.5 3.2 1.2 1.1 2.3 63 87 Sub-Total 40.6 35.1 75.9 48.1 44.0 92.1 37.3 33.7 71.0 82 107 2. Rod MIntenave &jupietnt 0.4 8.3 8.7 0.5 5.0 5.5 1.1 10.8 11.9 158 73 3. Conaltitg Services (a) &nimerIng ard Supervison 2.6 2.7 5.3 2.1 2 .7 4.8 2.0 2.2 4.2 110 126 (b) Selva Ontral Study 0.2 0.1 0.3 2.0 2.9 4.9 1.9 2.7 4.6 6 7 (c) Airport Stady 0.2 0.2 0.4 0.3 0.4 0.7 0.3 0.3 0.6 57 67 (d) Ibr _ h-0royaStudy 0.1 0.0 0.1 - - - 0.2 - 0.2 - 50 (e) Rad el a Stay 0.1 0.5 0.6 - - - 0.2 1.0 1.2 - 83 (f) SM TechdcalAsdstance 0.1 0.5 0.6 - - - 0.1 0.3 0.4 - 150 Sub-Total 3.3 4.0 7.3 4.4 6.0 10.4 4.7 6.5 11.2 70 65 m FA!. P XJSCo 44.3 47.4 91.9 53.0 55.0 108.0 43.1 51.0 94.1 85 98 _ _ _=_ - = _ _=r a/ Estimates for road sections twt yet complete; see TaW 3. R I1dies yiWcal wad price nrti . ' s c/ nzldrgRAp streets.  pEu FR03c COULEIOE SEP0? LIMA- O OUAS0 0ORR20 P3033 (tLOWAN 19Pn) go" c _nomat Contract and coat Data (All tount. in VSttC0) Contractor Completion Data Aooraiel Ratleee. atuated or project Itw oot eor Con pat lot. Original 1/ Refor. (1979) Contract Actual Coat &=k Cos, Coneeanat CSd ontr ct Actual (1976) tota Bank Value local ForelPn TotAl Coner. R1.1. CIvIl vowS (l4pu" load) San sleteo- _c@cocU Z.C.C.C.-Villosa Aaoc. 9/05/78 6/02/80 4/01 4.170 7,00 (3,390) 5,250 5.49B 3.474 8,972 3.474 94 1. oroye-LS Cus cacerae4ruce Aoc. 4130180 5S21/82 3/83 6.05 6,003 4,643 20.64 4*43 10 U. 88k Cte10,mpre twiertt-816o AaeOc. 4130/80 5/21/82 12182 18.000 15,500 (7.440) 6.632 6,496 5.009 11,505 5uAJ I0t0 111. dayre-Cerro da Paco Comap$-Me taco. 4/30/00 S/21/J2 12162 7.854 5.032 4.101 9.13 I C 0 V. Cmt de ?& c.* aoA Txom-Villasal Oc. 4/30150 S/21/82 12185 9,607 6.653 sA620 12.473 ,.620 es V. eaa-_ctc Vera Outerre1/ 10/16180 10/25/82 2/83 IS,590 17,500 (8,400) 6 731 4.015 3.255 7.270 3.255 It0 VI. I.C.C.Q.-Calulto-4N Us. 10/16/80 10/25/82 12/85 9,495 7.321 5.33 13,154 5.033 Sl 5-k 48tb epprochs Ve 9attarre, 0216-23/79 0/31/79 10/79 - 1.000 (480) 617 362 273 635 273 100 aln Steteate 3LT.C. 11/15/79 11115/80 9181 1,370 3.0O0 (1.440) 2.173 1.043 1,09B 2,141 1.098 10D let lloa IbR r Coulated - - - 2.300 1.500 -V) - CiVow ub-TOrAL 44.430 45.500 (21.840) 42,623 33,306 75,929 35.306 WD -_ wm let fpre Pat. el.g Rap. S.A. 08/10/77 - 2/78 ISO 7 IS0 157 I50 100 lot e isW t Tbane8 9 Suppller 07/25/78-08/04/78 - 2/79 4.400 4.400 (4.400) 2,610 104 2.610 2.714 2.610 100 2ad Uquitnt Trulis 4 SuppltAra 04/24/79 - 12/79 1.412 57 1.412 1.469 1,412 100 3rd 3qudp t _tao0w Diin.l del " era S.A. 07/23/SO - 2/81 - 6.500 (5.900) 919 37 919 956 919 1O0 2nd SOa" Paxt" 2 Suppliers 12/ /8O - 6/81 2.257 Jo0 1.062 1.970 1,062 )O0 lot WorliaSp Toole 6 SuplI9r 10/ /82 - - - - 25 675 700 675 LO1 totoehical 3qupmnet Not cpleted - - 200 (200) - 0 2nd Uorkap Toole I tot compl*eted o Not"Oof 891-TOAL 4.400 11,100 (10,100) 338 7.628 7f968 7,628 - couatno Sion od Son lotao-Noocooba Cia. S1lsttt*r 05/19/77 11/19/79 /1lo0s/ 430 226 247 473 247 100 0roytaOy C.R.C. 07/02/79 10/81 5/82 t1239 646 762 1.40B 762 zoo Nhmyre-Somc, C.t.C. 07/16/79 I0/S] 10/82 3.300 3,600 (1.900) 3,061 1.076 a.360 2,456 123o0 10o P lpa Street. .O.S. 11/05/79 11/S0 10/83 120 104 132 236 132 ItO Food= oa. - - - 150 50 200 0 0 ro ea-Nar C.N.C. 04/11/79 8f79 8/79 Included Il Superiion 203 126 42 168 86 too Noabrta-o co C.I.C. O4/19 9/79 12/79 tncluded JA Suervialun 471 293 12 488 26s 100 Cbtln-0pon L8AC 10/t0/78 5/79 7/79 63 35 12 47 28 100 81o seoo.AYM 5O.. 10/10/78 5/79 7/79 3.90 3.900 (2.300) 45 2S 10 38 20 100 Sealv Central St18 tC/Coo.lt. 10/79 - 12/81 - 195 74 249 52 g0 Arport St"ids CAIN-APS-LAO-UX 5/23/77 4178 2/80 seo sc0 (300) 436 221 205 426 205 100 ococe.ory Study C.P.s. 6/15/8so 2/8 3/8I - 200 (200) 130 63 21 84 10 1oo g"d 2ahmbilittattoan Sy - - 12/81 - 1.00o (800) - 130 471 600 471 2o0 go8 Toceca AS ai.tance lanardet 6/10/80 3/82 4/82 - 400 (300) 928 87 520 607 520 ID UT.Tl SWF-S4. 7 600 (5 700) 3,380 4.121 7?.Y0 4,178 A W 56,530 66.200 (37.6W) 45.112 70WJW Casy WM 9 9 9 co"tnpml" ~~~~~~~~~~~~~~~~~~25.000 27.400 (15,510) 6.524 " aOc.t 81 C )25,00e2.530 93.60 (5150) 46.341 45,064 S 1.405 513645 Project Tota (tned C _onet) 21.290 34,800 (18.200) 16.020 18.710 34.730 17.755 tntert 0o4r Coeetructmn_ (7,100) - - lAR 1196-l TlotA 102,820 128,400 (76,450) 62.361 63,774 126.tS5 76.500 If no" omly te costa of project elemnts retained to the reformiaeted loa Wtth contaSgencia. allocated on a percentas bet.  U**-wm 1