Colombia - Second National Highways Sector Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6646-CO STAFF APPRAISAL REPORT COLOMBIA SECOND NATIONAL HIGHWAYS SECTOR PROJECT May 13, !987 Pro jec ts Department Lat in America and the Caribbean Regional Office T his document has a restricted distribution and may be used by recipients only in the performance ot tbidr official duties. Its -ontents may not otherwise be disclosed without World Bank authorization.  Currency Equivalents Currency Unit - Colombian Peso (Col$) US$1 - Col$ 225.0 (mid-February 1987) Col$ 1,000 - US$4.44 Fiscal Year January 1 - December 31 Units of Weight and Measures: Metric System Metric British/US Equivalent 1 meter (m) = 3.28 feet (ft) ) kilometer (km) = 0.62 mile (mi) 1 kilogram (kg) = 2.20 pounds (lb) 1 metric ton (m ton) = 2,205 pounds Abbreviations AADT Average Annual Daily Traffic CFT Transport Finance Corporation COLPUERTOS Colombian Port Authority CONPES National Council for Economic and Social Policy CUTMA Colombian Association of Transport Users DAAC Administrative Department of Civil Aviation DNP National Planning Department ERR Economic Rate of Return FAN National Aviation Fund FIDECAFE Coffee Producers Association FONADE National Develonment Fund FNCV National Rural Roads Fund FNC Colombian National Railways FVN National Highway Fund HDM Highway Design and Maintenanc, Model IDB Inter-American Development Bar-k INCOMEX Foreign Trade Institute INCORA Colombian Institute for Agrarian Reform INTRA National Transport Institute IRI International Roughness Index MOP Ministry of Public Works (until 1976) MOPT Ministry of Public Works and Transport (from 1976 onward) SENA National Apprenticeship Training Service SPWs Secretariats of Public Works (Departmental)  FOR OMCIAL UsR ONLY SAFF APPRAISAL 3P0 SCOND NATIONAL NIOIVAS SBCTR PROJLCT TANS OF CONTEM Page No. I. PROJECT SUMMARY oooeoooooooooo.oo...oo......,... 1 II. THE TRANSPORT SECTOR ......*,.......,.......................... 3 A. Transport Development and the Economy ...................... 3 Be Main Issueq...... . s wv *...4 (i) Fuel Pricing and Cost Recovery from Road Users .... 4 (ii) Road Transport Regulation and Trade Facilitation 4 (iii) MOPT's Internal Efficiency ..............,............... 5 (iv) Transport Programing and Budgeting 7 C Bank Involvement in the Sector ********..........e,... 8 D. Sector Strategy ........... 0g..... .................0.0. 9 III. MOPT'S HIGHWAY PROGRAM, THE PROJECT AND THE ACTION PLAN ........ 1) A. Project Origin and Objectives ..............e............... 10 B. Rationale for Bank Involvement ......................t.... 10 C. MOPT Highway Expenditure and Funding Program 10 D. Economic Evaluation of the Investment and Maintenance Program 0.. 12 E. Project Description and Costs 13 F. Policy Reform and Institutional Development Action Plan 15 G. Assessment of R!4k ......17 IV. PROJECT IMPLEMENTATION ........ 18 A. Subproject Selection *.o*..o...*....*o.v.e................ 18 B. Project Execution ........o............oo....o............ 19 C. Procurement ***00000 *o ............................... 20 D. Disbursement, Special Account and Audits ................ 22 E. Semi-Annual Consultations and Project Monitoring 23 V. AGREEMENTS REACHED AND RECOMMENDATIONS ..o .................. 24 This .eport is based on the findings of an appraisal mission which visited Colombia during September/October 1986. The mission comprised Messrs. Pedro Geraldes (Mission Leader and Transport Economist) and Sergio Miquel (Highway Englneer, Consultant). The mission has been assisted during shorter periods by Messrs. Luis Pisan4 (Vocational Training Specialist), Jorge Duarte (Financial Analyst), Humberto Petrei (Public Sector Economist, Consultant), Anil Bandhdri (Highway Planner, Coan4lltant) and Ms. Theodora Underhill (Systems Analyst, Consultant). The report has bees edited by Ms. Virginia Foster. This documnt ha a nesttd distribution and may be used by moints cy in the pefwmane of their oMcW duties. 1ts contents may not otherwise be dclosed without Wor Blanuk autholtion.  - ili- Page No. TABLES 2.1 Colombian Road Network (1986) ............... .,.. 26 2.2 Transport Demand for Freight and Passengers (1975-1985) ............ 21 2.3 Public Exp,'nditure and Funding in Transport (1982-1986) ............ 28 2.4 Price Structure of Petroleum Automotive Fuels (June 1986) .......... 29 2.5 Revenues from Taxes Levied on Users of the National Highway Network and HOPT Highway Expenditures (1986)......................... 30 2.6 Registered Trucks and Fleet Composition (1983-1985) ................ 31 3.1 National Highway Network (1970-1986) ....... 32 3.2 MOPT's Pluriannual Expenditure and Funding Program (2 pages) ....... 33 3.3 Summary of Recommended Highway Maintenance and Paving Strategy *.... 35 3.4 Equipment and Spare Parts to be Flnanced under the Loan ............ 36 4.1 Ongoing Highway Subprojects Eligible for Bank Financing ............ 37 4.2 Allocation of Loan Proceeds o.....,...................... 38 4.3 Estimated Schedule of Disbursements ......,........................ 39 ANNEXS I. Transport Sector Background ........................... 40 2. Economic Assessment of Cost Recovery from Road Users ............... 46 3. Transport Regulation and Trade Facilitation.....,,.................. 48 4. Highway Administration ......... .......... .. 51 5. Public Inveetment Programing and Budgeting in the Transport Sector .................. 58 6. Bank Assistance to the Highway Subs2ctor ........................,.. 63 7. National Highway Fund ..................... .* 68 8. Economic Analysis of the Road Maintenance and Paving Programs ...... 69 9* Training Program .. ... ...... ................... .... 76 10. Studies under the Technical Assistance Program ..................... 83 11. Actions Already Taken During Project Preparation . ..... ............ 86 12. MOPT's Action Plan (1987-1993) ....... 88 13. MOPT's Program Targets (1987-1993) ................................. 97 14. Eligibility Criteria **v*v*e*******v*v**