Rwanda - Transport Sector Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8386-RW STAFF APPRAISAL REPORT RWANDESE REPUBLIC TRANSPORT SECTOR PROJECT APRIL 30, 1990 Infrastructure Operations Division South-Central and Indian Ocean Department Africa Region This document has a resicted distribution and may be used by recipients only in the pertformane Of their officul duties Its contents may not otherwise be disclosed without Woddn u aon.  CURRENCY EQUIVALENTS Currency Unit = Rwandese Franc (FRW) US$1.00 = FRW 80 FRW 100 US$1.25 The U.S. dollar/Rwandese franc rate is subject to change, since the FRW is pegged to the SDR. Conversions in the Staff Appraisal Report were made at US$1.00 = FRW 80, the average exchange rate at the time of appraisal in July 1989. WEIGHTS AND MEASURES 1 meter (m) 3.28 feet (ft) 1 kilometer = 0.62 mile (mi) 1 square kilometer (km2) 0.386 square miles (sq mi) 1 hectare (ha) 2.47 acres I metric ton (m ton) 2,204 pounds (lbs) ACRONYMS AND ABBREVIATIONS BUNEP = National Bureau for the Study of Projects DE = Maintenance Department DPC - General Directorate of Roads and Bridges DSM = Dar-es-Salaam (Tanzania) EDF = European Development Fund EEC - European Economic Community FRG - Federal Republic of Germany HDM-III = Highway Design Model LNTP = Laboratoire National des Travaux Publics MAGERWA = Magasins Generaux du Rwanda MININTER = Ministry of Interior MINITRANSCO Ministry of Transport and Communications MINITRAPE = Ministry of Public Works, Energy and Water NCTA Northern Corridor Transit Agreement NGO = Non-Governmental Organization ONATRACOM Office National des Transports en Commun OPEC = Organization of Petroleum Exporting Countries PPRC = Communal Roads Pilot Program SDC = Swiss Development Cooperation SME = Small and Medium Enterprises STIR - Societe des Transports Internationaux du Rwanda TRC = Tanzania Railways Corporation UNDP - United Nations Development Program VOC = Vehicle operating cost vpd Vehicles per day GOVERNMENT OF RWANDA FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY RWANDA TRANSPORT SECTOR PROJECT STAFF APPRAISAL REPORT Table of contents Page No. Credit and Project Summary ............................ iii I. THE TRANSPORT SECTOR ............................. 1 A. Geographic and Economic Setting .............. 1 B. The Transport System ......................... 1 External Transport ........................... 1 The Road Network ....... ...................... 3 Road Use ......... ............................ 4 Lake Transport ....... ............ . 6 Civil Aviation ............................... 6 C. Planning, Finance and Management .... ......... 7 Institutional Framework and Administration ... 7 Financing of Road Maintenance ............... . 11 II. SECTOR ISSUES AND POLICY INITIATIVES ............ . 12 A. Transport Sector Issues ...................... 12 B. Policy Initiatives. .... ..................... 13 Statement of Sectoral Development Policy ..... 14 Transport Planning (UNDP) ..... ............... 15 Great Lakes Corridor Study .................. . 15 Road Fund .......... .......................... 15 Reclassification of Road Network .... ......... 17 C. Previous Bank Group Assistance in the sector . 17 III. THE PROJECT ...................................... 19 A. Objectives ........ ........................... 19 B. Description .................................. 20 C. Project Costs ................................ 23 D. Financing Plan ............. ....... .. ...... . 25 This report is based on the findings of an appraisal mission to Rwanda in July 1989. Mission members included B. Bostrom (Sr. Economist), 0. Grimes (Principal Economist), M. Benouahi (Financial Analyst), E. Bidaux (Research Assistant) and A. Nickesen (Consultant). Messrs. A. Labeau (Highway Engineer) and T. Thiam (Financial Analyst) visited Rwanda in October 1989. 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.  ii IV. ORGANIZATION AND IMPLEMENTATION .. ................ 26 A. Implementation Arrangements .#* ... ** .......... 26 B. Procurement .................... ...... 29 C. Staffing and Training . ......................... 30 D. Disbursements ............... ....... . . ...... 31 E. Accounting, Auditing and Reporting Requirements .................................. 34 F. Environmental Aspects ... ...................... 35 G. Poverty Alleviation Aspects .. ................ 35 V. ECONOMIC EVALUATION .............................. 36 A. Benefits and Impacts ............... 36 B. Area of Influence and Beneficiaries .# ........ 37 C. Economic Analysis . ........................... 37 D. Risks .................. ... ................... 38 VI. AGREEMENTS REACHED AND RECOMMENDATION .. .......... 40 Annexes 1.1 Traffic distribution for East Africa 1987 1.2 Statistical Motor Vehicle Fleet 1984-1988 1.3 Average daily traffic 1.4 Fuel imports 1982-1987 1.5 Traffic Accidents 1980-1986 1.6 Kigali Airport Traffic 1.7 Summary of investments in the transport sector 1.8 Highway Expenditures 1980-1988 2.1 Letter of Sectoral Development Policy 2.2 Summary of Action Plan 3.1 Financing Plan 1991-1994 4.1 Terms of Reference for Construction Supervision 4.2 Professional Training Program 4.3 Progress Reporting Requirements 4.4 Environmental Assessment 5.1 Vehicle Operating Costs 5.2 Details of Highway Rehabilitation - Gitarama-Kibuye road 5.3 Economic Analysis of Maintenance Program 5.4 Economic Evaluation of Communal Roads 5.5 Economic Returns and Sensitivity Tests 6.1 Selected Documents and Data Available in the Project File Charts 1. Organization of MINITRAPE 2. Project Implementation Schedule Maps IBRD 21189 IBRD 21834R  iii RWANDA TRANSPORT SECTOR PROJECT Credit and Project Summary Borrower: Republic of Rwanda Beneficiaries: Ministry of Public Works, Energy and Water (MINITRAPE) Ministry of Transport and Communications (MINITRANSCO) Amount: SDR 31.1 million (US$40.0 million) Terms: Standard IDA terms, with 40 years maturity Proiect Oblectives: The objectives of the project are to (i) protect capital investment in main roads through improved maintenance; (ii) strengthen institutions in the sector through better planning and resource mobilization; (iii) promote communal development and better economic integration through improved communal roads; (iv) improve access to the Kibuye prefecture; (v) support lake transport; and (vi) improve vehicle safety. This program also has important policy dimensions such as streamlining the regulatory environment, financing of sectoral expenditures, and improving institutional arrangements and responsibilities in the sector. Prolect Description: The project will cover roads and transport for which the responsibility is split between two ministries (MINITRAPE and MINITRANSCO). A comprehensive program of road reconstruction and maintenance, institutional strengthening and transport sector improvements for 1991-1994 was designed to meet the highest priority for the country with support confirmed by donors during appraisal in July 1989. The main project components are as follows: (a) participation with other cofinancing agencies in the upgrading of the Gitarama-Kibuye road; (b) rehabilitation and maintenance of a pilot project of 600 km of communal roads; (c) support to a four-year road maintenance program; (d) institution building, technical assistance and professional training both for the above ministries and road contractors; and (e) a transport sector program including support to lake transport and vehicle inspection.  iv Benefits: Improvement of road maintenance, and selective road upgrading, would reduce vehicle operating costs and reduce the need for costly rehabilitation especially for the paved network in the future. Better access to the Kibuye area will support production of coffee and tea, and tourism to the Kivu lake. The Kibuye road, in particular, has also been subject to an environmental assessment, to provide guidance in the bidding documents for improved safeguards concerning environmental impact, and other aspects such as measures for road safety, plan for any relocation and of tourism development of Kibuye. Improvement of rural roads would also support export crops and more rational food production. Less costly international access and improved transport policy would reduce costs of imports and enhance the competitiveness of exports. The project would also support development of local contractors for road works and further privatization of transport services. Risks: The proposed road components iinder the project wouxld be subject to certain potential risks. Cost overruns on the Gitarama-Kibuye road, delays in implementation of the road maintenance program and cost increases andlor delays with the communal roads pilot program are the main elements of risk. The likely cost overruns for the Kibuye road has been minimized through detailed design, based on recent cost data from ongoing construction works in similar terrain. The main response to the institutional risks of the communal roads project is through intensive project monitoring, and technical assistance, spreading the participation geographically and using different means of implementation (i.e. works partly by administration, partly by contractors). Project Cost: The total cost of the project is estimated at US$148.85 million equivalent with foreign costs of about US$96.61 million and local costs of US$52.24 million. The detailed cost and financing plan are in the following table. Rate of return: 45% over 86% of total project costs.  v RWANDA TRANSPORT SECTOR PROJECT PROJECT COST ESTIMATES AND FINANCING PLAN Projet Cost Estimates 1/ Local Foreign Total Foreign as - -- (USS million)------ % of total Transport Component 1.69 1.94 3.63 532 Road Component Gitarama-Kibuye 11.62 35.41 47.03 75% Periodic maintenance 6.85 14.55 21.40 68% Routine maintenance 7.67 4.96 12.63 39% MINITRAPE services 3.22 5.86 9.08 65% Communal roads 7.05 5.02 12.07 42% Institutional development 0.37 3.41 3.78 90% Base Cost 38.47 71.15 109.62 65% Physical Contingencies 3.85 7.11 10.96 Price Contingencies 9.92 18.35 28.27 Total Project Costs 52.24 96.61 148.85 65% Financing Plan: Local Foreign Total % of total -------(USS million)------ Government 24.90 29.16 54.06 36% EEC/EDF 8.10 24.50 32.60 22% Swiss Cooperation 2.34 7.03 9.37 6% OPEC 1.00 3.00 4.00 3% FRG/KFW 1.52 3.23 4.75 3% IDA - Transport Sector Project 12.70 27.30 40.00 27% Sixth Highway 1.68 2.39 4.07 3% Total 52.24 96.61 148.85 100% 1/ Costs are net of taxes which are estimated at FRW 608 million (US$ 7.6 million equivalent) Estimated IDA Disbursements: IDA Fiscal Year 91 92 93 94 95 96 97 ------------(US$ million)----------- Annual 1.8 5.4 7.4 7.8 8.8 6.8 2.0 Cumulative 1.8 7.2 14.6 22.4 31.2 38.0 40.0  I. THE TRANSPORT SECTOR A. Geoaralhic and Economic Setting 1.01 Rwanda is a small landlocked country situated south of the equator in Eastern Africa between Burundi, Tanzania, Uganda and Zaire, about 1,500 km from the Indian Ocean. The country covers an area of 25,900 square kilometers and its terrain is dominated by a mountain range and Lake Kivu in the west, hilly terrain and valleys in the center and a low-lying plain in the east. The generally rugged terrain, the deuse settlements in large parts of Rwanda as well as its landlocked position have contributed to shape its transport infrastructure. 1.02 With a population of approximately 6.7 million (1988) growing at a high rate of over 3.0% p.a., Rwanda is the most densely populated country in Africa with 260 inhabitants per sq.km (400 inhabitants per sq. km of arable lands). Over 90% of the population live in rural areas as small farmers who depend mainly on subsistence agriculture and on two main cash crops, coffee and tea, which provide the major source of foreign exchange for the country. Gross National Product (GNP) per capita, estimated at US$ 310 in 1988, is among the world's lowest. Agriculture is the main economic activity and provides some 80% of export value. 1.03 The prevailing economic and financial conditions in Rwanda have been taken into consideration in designing the proposed transport sector program and its financing. The program is seen as an integral part of the economic development process and therefore, calls for appropriate policy actions within the trannport sector. A Letter of Sector Development Policy, with an Action Plan, has been prepared by the Government (see para 2.10). Policy actions will aim at more emphasis on maintenance of infrastructure, more reliance on the private sector for road maintenance, better planning and improvement of cost recovery mechanisms as well as more liberalization of transport operations, in order to make exports more competitive and to reduce the costs of imports and internal transport. B. The Transport System 1.04 The transport system in Rwanda consists of about 12,500 km of roads and tracks (of which about 6,000 km are classified and about 3,400 km under responsibility of the Ministry of Public Works, Energy and Water, MINITRAPE). There is an international airport capable of use by long-range aircraft but no railways or navigable rivers. Lake Kivu is mostly used for transport along the lake between Cyangugu, Kibuye and Gisenyi, and very limited traffic to Zaire. As a landlocked country far from ocean ports, Rwanda depends on external transport links, at high cost, for its foreign trade. External transport 1.05 Rwanda's foreign trade is mostly with developed countries and to a lesser extent with its neighbors. It has grown markedly in volume in recent years. However, the external trade volumes are still relatively low: during the 1985-1988 period, imports averaged about 255,000 tons p.a. while exports totalled about 50,000 tons p.a. (of which coffee represented 30,000 tons). The annual external trade growth rate is expected to be in the 5-6% range in the coming years and the trade flow will remain imbalanced.  - 2 - 1.06 As a landlocked country, Rwanda is dependent on transit through neighboring countries. Two main corridors including various routes (see Map IBRD 21189) are now used for external trades (i) the Northern Corridor (all-road route) to Nairobi and Mombasa via Kampala; (ii) the traditional Central Corridor (road/lake/rail route) to Dar-es-Salaam (DSM) via Bujumbura and Kigoma ; and (iii) a recent Central Corridor (all-road route) through Tanzania, in dry season. The Northern Corridor route now accounts for about 65% (petroleum products and general imports) of total international traffic, the Central Corridor routes have increased to 33% since 198i' and direct air transport represents 2% (Annex 1.1). Under these circumstances transport costs are obviously high even in the best conditions. Costs are further increased by other factors including poor transport infrastructure, cumbersome transit procedures, the low efficiency of transport operators and highly imbalanced import (80% of the traffic volume) and export (20%) flows. Overall transport costs are estimated to add about 30-40% to the cost of imports and exports. 1.07 In the late 1970s, the Northern Corridor suffered disruptions in transit from turmoil in Uganda. Since then, the situation has improved with the exception of disruptions due to political troubles in Uganda in 1986. In most countries through which the northern corridor passes (Rwanda, Uganda and Kenya), investments were made to improve maintenance and extend infrastructure. Direct transport costs are up to estimated to have gradually decreased in the northern corridor from US$ 340/ton in 1979, at the peak of war conditions in Uganda, to US$ 200/ton in 1988. Indirect costs have also fallen: transit times fell over the last decade from 35-45 days to 20-30 days in the northern corridor and from several months to 40- 60 days in the central corridor. The central corridor (both the all road and road-rail alternatives) where unit transport costs are about US$ 100/ton lower than via Mombasa would now be the cheapest alternative for Rwanda. Further improvements are necessary on the Tanzania Railway Corporation (TRC), while Dar-Es-Salaam port has markedly improved these last years and is now being preferred to Mombasa. To improve transport conditions further on the Central Corridor route, the Government has agreed with Tanzania to establish an intermodal terminal (rail/route) on the TRC line at Isaka. This would be a third alternative of the Central Corridor to enable the year- around use of the shorter access through Tanzania. Further reductions in costs are both possible and necessary but will require the full and effective implementation of multi-country agreements to facilitate transit procedures, such as the Northern Corridor Transit Agreement (NCTA) signed in 1985 but not yet fully effective (see below). 1.08 Transport security and reliability is a matter for concern. One of the main Government objectives is to increase revenues from exports, and of coffee in particular, through better quality and higher volumes. Therefore, reliability of transport has become a very important objective both within Rwanda and on export routes. Reliability of international transport has traditionally been an acute issue also for imports, with a strong-felt need for alternative access to provide the Government with a rapid solution whenever disruptions occur. In addition to shifts between the two main corridors, alternative transport options also include air transport.  -3- 1.09 Rwanda Is in a relatively favored position in that it has several practical access routes to both Dar-es-Salaam and Mombasa. Given the availability of charter air-freight and over-capacity of the region's trucking fleet, it is clear that more transit routes, without improved management of infrastructure and Letained flexibility by the shippers, will not solve the transit problem. For Rwanda, this means that over-investment, at least within the country, is probably more of a danger than inadequate infrastructure. Any additional road links other than the existing paved roads, including the more direct route via paved road to the new rail/road terminal at Isaka in Tanzania, would not be required for external transport. The Road Network 1.10 Rwanda has a road network totaling about 12,500 km of which some 970 km national roads are paved or being improved to paved standard. nother 1,740 km national and provincial roads are mostly unengineered gravel roads (Table 1.1). In addition there is a network of communal earth roads totaling some 9,800 km. Thus, the coverage of the natwork is largely adequate. However, many of the earth roads are characterized by frequent and narrow _urves, steep grades and uneven surfaces. In the mountainous terrain, .eavy rainfall and poor 80il conditions cause high maintenance costs of gravel and earth roads. Rwanda has concentrated its efforts on improving to paved standards the main international road links between Kigali and neighboring Uganda, Burundi and Tanzania and between its regional centers. The Government has also started to pay more attention to strengthening its road maintenance operations. This effort has resulted in a paved road network in good condition, but a network of earth roads at best in fair condition, largely passable year round, but with rutting and potholes common aftei each rainy season. Table 1.1 Development of the Road Network (in km) 1977 1984 1988 A. Classified Roads National Roads 2,205 2,270 Provincial Roads 1.855 3,575 Total 2,400 4,060 5,845 B. Non-Classified Roads Local Roads 3,900 8,010 6.640 GRAND TOTAL 6,300 12,070 12,486 C. Classified Road Network by Surface Type Bitumen 350 627 971 (*) Gravel 1,050 1,569 1,740 Earth 1.000 1.864 3,134 Total 2,400 4,060 5,845 (*) about 70 km of streets included Source: Ministry of Public Works, Energy and Water  - 4 - 1.11 The general condition of the network is not satisfactory and varies from poor to good. However, the paved road n.twork is relatively new and most of it remains in fair to good condition. Construction and maintenance costs are high due to the country's difficult topography, poor geotechnical conditions and heavy rains. Therefore, road maintenance operations have to be sustained to prevent past road investments from costly repairs and reconstruction in the future and to prevent vehicle operating costs (VOC) from rising excessively. Maintenance efforts, which started under the Second Highway Project, are emphasized under the ongoing Sixth Highway Project and are to continue under the proposed program. Road Use -- Vehicle Fleet and Traffic 1.12 The motor vehicle fleet reached 19,427 vehicles in 1988 (not counting motorcycles), of which about 4,000 were owned by the Government (Table 1.2 and Annex 1.2), and about 6,000 motorcycles. There were 3 vehicles per 1,000 inhabitants which is on the low side for East African countries. The annual growth rate has been decreasing sJnce 1983 and now reaches about 3.0%, after growing at a high average annual rate of 14% over the 1976-1983 period. In 1988, the fleet situated mainly in Kigali, was dominated by passenger cars, making up 33%, with pick-ups and minibuses at 30%, trucks 14%, and tractors and special vehicles making up the difference. The major increases in the period were recorded for mini-buses, pick-up trucks and truck/trailer combination. Table 1.2 Motor Vehicle Fleet 1976 1984 1988 Passenger cars 2,713 6,448 7,986 Pick-up trucks 2,432 5,786 8,268 Minibuses Trucks 858 1,438 1,938 Truck/trailer combinations 471 837 Other 299 225 265 Bus 111 133 Total 6,302 14,476 19,427 1.13 Systematic traffic counts started on the national network in 1982. They now cover about 3,000 km of the road network and are carried out by the General Directorate of Roads and Bridges (DPC) of MINITRAPE. The traffic volumes rarely exceed 500 vehicles per day (vpd). The highest traf::ic volumes are found on paved roads. A significant part of the network (about 500 km) has however traffic volumes of more than 200 vpd (see Annex 1.3).  -- Fuel Consumption and Price 1.14 Over the period 1982-1987 the consumption of fuel increased at an average rate of 6% p.a.. Fuel is imported by several companies, mainly from the refinery in Mombasa. Fuel storage capacity exceeds 20 million liters and is adequate (representing approximately a five-month consumption reserve) (see Annex 1.4). 1.15 The retail fuel prices are high, partly due to the high transport cost caused by the country's distance from the ocean ports. The retail price is US$0.84 per liter or US$3.20 per US gallon for gasolir-e (super) and US$0.80 per liter or US$3.04 per US gallon for diesel fuel. There are no Government price subsidies and the internal taxation on fuel is rather high. Import duties and taxes on fuel are important sources of Government revenue from road users representing about 103% of CIF price for gasoline and 101% for diesel fuel coming from Nairobi. -- Road Transport Industry 1.16 Road transport in Rwanda is dominated by private operators. At the same time as a result of improved road conditions there has been a substantial increase in the vehicle fleet, albeit with a slow down since 1983. About 600 1/ trucks and 133 buses are owned by parastatals and the remainder is privately owned. The vehicle for passenger transport is typically a minibus, which has proven to be faster and more mobile and economical for private operators than large vehicles. More than 85% of the 1,500 buses used for public transport in 1988 were minibuses. The use of small vehicles largely the result of a country with short distances, also prevails for freight transport within Rwanda. Entry into the transport industry is free and domestic routes not regulated except for tariffs for urban passenger transport. The government owns two parastatals for road transport, STIR, mainly for external freight transport and ONATRACOM for internal passenger transport. A decision to privatize STIR has been taken by the Government. The Public Enterprise Reform project recently approved by IDA will include technical assistance to facilitate this process and establish a timetable for actions. 1.17 Concerning the parastatals, tariffs for ONATRACOM have been kept unchanged for too long a time and as a result the revenue collected does not cover operating cost. The government therefore has to subsidize the operations. For urban transport in Kigali, the ONATRACOM tariffs also apply to private operators. A performance contract between ONATRACOM and the Government has been under discussion in 1987-88 but would need to provide more consistency with the general objective of reducing subsidies to the PEs. A tariff increase, to compensate several years of inflationary cost changes, particularly for urban tariffs, is essential for ONATRACOM. 1/ out of 2,500 including truck/trailer combinations.  -- Vehicle Regulations 1.18 There are no major problems with vehicle weight and dimensions in regard to the road network, since trucks as indicated above tend to be small in size on most roads. Where the problem arises is for the long- distance traffic with heavy vehicles, where rules in one country affect the situation in others and the scope of practical enforcement differs between domestic and foreign vehicles. To control the weight, there are scales in Kigali and the two most important border crossings (though not yet in operation) and the customs clearance is done in Kigali. As part of the NCTA, new increased axle weight limits have been agreed between Burundi and Rwanda, Uganda and Kenya. Traffic safety, partly as a result of higher speeds and traffic due to improved roads, is a serious problem, which in part will be addressed through the project (see para. 3.17). An indication of the development of accidents is included in Annex 1.5. Lake Transport 1.19 Lake Kivu allows commercial navigation between the towns of Gisenyi, Kibuye and Cyangugu. The main transport flows consist of beer from Gisenyi to Cyangugu and Kibuye with coffee being carried seasonally on the return journey. The yearly volume of traffic is estimated at some 33,000 tons for goods and 25,000 passengers. The lake fleet, owned by traders/operators, consists of some 60 units (including passenger transport craft and barges) with a carrying capacity of 10-20 tons for the self propelled craft and 50-120 tons for barges. The fleet is old and not well maintained. The berthing facilities are generally rudimentary and in poor condition but could be renovated at relatively low costs. Since lake transport is the most economical method of transportation between communities along the lake, there will be scope for its expansion as and when trade in agricultural and consumer goods increases, or if the methane gas resources under the lake are developed. One of the components under the project would improve vessel maintenance by financing a modest shipyard (see para. 3.16). Some of the jetties for loading lake vessels were improved under an Agriculture Project (1126-RWA). Civil Aviation 1.20 In view of the small size of the country, air transport primarily serves external transport needs. The international airport near Kigali can handle wide-body aircraft and a new terminal building was completed in 1984. Five smaller airfields exist but the only one of some importance is Cyangugu in the south west. Kigali airport is equipped for 24-hour operations and provides service to Europe and the capitals of neighboring African countries. The airport is served by European and African airline companies. In the 1980s, passenger traffic has been slowly increasing, reaching about 73,000 passengers in 1988. Freight traffic has however been severely decreasing since 1982 and reached only close to 15,000 tons in 1988 (from more than 30,000 tons in 1982) (Annex 1.6). Domestic passengers have decreased from a peak of about 29,000 in 1982/83 to about 8,000 in 1988. Under the Action Plan (para. 6.01 and Annex 2.2) a review of responsibility for freight handling at Kigali airport would be done and a restructuring of Air Rwanda undertaken. Both airports and Air Rwanda are under the responsibility of the Ministry of Transport and Communications (MINITRANSCO).  -7 - 1.21 Domestic scheduled flights are assured by Air Rwanda which operates three small aircraft while chartered flights are available from a few private companies. In 1979, to cope with the severe international transportation bottlenecks, Air Rwanda acquired a Boeing 707 cargo aircraft which initially flew to Europe and to Mombasa. Utilization of the aircraft has decreased following the improvement in the performance of the surface routes. Operation of the aircraft is not profitable despite flights to Europe. Its main justification would consist in that it provides diversification and some security in external transport. However, it is costly to operate, not adapted to noise-restrictions in Europe after 1990 and its market potential within Africa is very limited provided the restrictions of goods movement to Mombasa be lifted which is part of the project. MINITRANSCO, with bilateral assistance, is now reviewing the future direction of Air Rwanda after the UNDP-transport planning project (with the Bank as executing agency) has completed a study of air transport and a study of operational improvement is underway. In the Action plan (Annex 2.2), a program of financial restructuring of Air Rwanda is included. C. Planninrt, Finance and Management 1.22 Infrastructure development, particularly in support of road transport, is very closely linked with the production of food and services and marketing of exports. Past expenditures in the sector have therefore been dominated by road infrastructure. The challenge for the future is to keep a relatively developed main network well maintained, improve the condition of many rural roads, and avoid unnecessary investment in extending the main network. With high rainfall and difficult topography, substantial maintenance costs are incurred for unpaved roads. All principal international access routes and links between Kigali and the main centers of each prefecture should be improved to and maintained in paved condition. Future programs ought to ensure that maintenance expenditures do not decline below 25-35% of total road expenditures, to ensure that important parts of the system are not allowed to deteriorate. 1.23 The proposed program (see Annex 1.7) reflects these priorities. Of a total for the road subsector of FRW 19.9 billion for 1989-92, FRW 7.3 billion is for road maintenance, of which about FRW 4.4 billion for the four years supported by the Road Fund and regular budget (para 1.34). About FRW 14.1 billion of the road program is externally financed. The program for the remainder of the transport sector is more modest, FRW 3.3 billion for 1989-92. The focus of the program is on transport terminals, particularly the Isaka terminal (FRW 605 million), new buses for ONATRACOM (FRW 476 million), and a shipyard on Lake Kivu (FRW 350 million). These are all externally financed. Institutional Framework and Administration 1.24 Two ministries are directly involved in transport: (a) the Ministry of Public Works, Energy and Water (MINITRAPE) for road construction and maintenance; and (b) MINITRANSCO for the development of other modes and for utilization of the transport infrastructure in general. MINITRANSCO is also the ministry responsible for parastatal enterprises in the sector such as Onatracom for public passenger transport within Rwanda and Air Rwanda. In addition, the Ministries of Planning, of Finance, and of Interior  - 8 - (MININTER) are indirectly concerned with transport. The first of these is determining sector priorities, the second is influencing the sector through taxation of inputs used in transport, such as fuel, and the third is responsible for the communes and therefore the maintenance of the large network of rural, unclassified roads. Finally the Central Bank has an influence on the functioning of the sector through its role in the allocation of foreign exchange. The Government has only recently begun to perceive the multifaceted character of the sector and the urgent need for improved coordination between the various parts of Government involved in transport. 1.25 MINITRAPE, through the Directorate of Roads and Bridges (DPC), has full responsibility for the design, construction and maintenance of a network of national roads. DPC is divided into the Maintenance Department (DE) which is in charge of new construction by contractor and of road/bridge maintenance and construction by force account and of the mechanical workshop (Chart 1) and a Planning and Programming Department. The organizational structure, which was updated in early 1984 and again in 1989, is adequate to administer the road subsector. The staff numbered some 6,100 in June 1989. Of these 92 were permanent, 1,155 under contract and the remaining were hired ad hoc and paid on a daily basis. Staffing, however, in particular of higher level positions still poses problems. A manpower development plan, particularly for key employees is clearly needed, but would have to be supported by incentives to retain trained staff. Training programs over an extended period, interspersed with long periods of work, may be one solution. To make up for the current shortage of qualified Rwandese higher level staff, DPC has the assistance of several expatriates financed by bilateral and multilateral sources. They are employed as advisors, training instructors or as part of project teams. Because of the lack of local counterparts, coordination of their activities has proven difficult. For middle and lower level staff, the shortages are less severe and certain functional categories are definitely overstaffed. Moreover, qualifications are uneven as the education system does not produce enough skilled workers and technicians and Government often hires employees without any vocational training. 1.26 MINITRAPE is responsible through DPC for planning, construction, and maintenance of the classified road network. Planning capacity remains relatively weak as substantiated in the past by the inadequate balance between new construction and maintenance of existing infrastructure, resulting in the increasing need for rehabilitation of existing paved roads. The Planning Department will be reinforced under the project to strengthen DPC planning capacity. -- Road Maintenance and Equipment ManaRement 1.27 DPC is responsible for planning and executing the maintenance on the network of 2,270 km of national roads and about 1,000 km of provincial roads, while the communes are responsible for the maintenance of some 9,000 km of largely unclassified roads and tracks. Since the latter serve an important function in the transport of agricultural produce, and since the communes lack the funds, equipment and skilled staff to maintain them, DPC occasionally undertakes emergency repair works on these roads. Road maintenance has improved over the past years. This is due to the strengthening of road maintenance operations, increased budgetary  - 9 - allocations and the assistance provided by IDA and other foreign donors, principally the Federal Republic of Germany (FRG). An adequate administrative structure has been set up and procedures for maintaining the country's major network and improving the skills of local staff are in place. Periodic road maintenance is carried out by six mechanized brigades for the main classified gravel roads; routine maintenance operations are performed by 200 labor-intensive road gangs ("cantonniers"), composed of a i'oreman and 12 roadmen with responsibility for about 15 km of roads. In idition, volontary labor by Umuganda is supporting certain activities such as erosion control also on the classified roads. This organization has succeeded in adequately maintaining the road network and keeping it passable year round. Among Sub-saharan African states surveyed by IDA, Rwanda ranks in the most advanced group for road maintenance. However, the mechanized road maintenance brigades do not yet perform to satisfaction, partly due to limited experienced personnel, pending results of continuing training under the Sixth Highway project and other external assistance (UNDP and FRG), and partly due to poor planning and monitoring. 1.28 Equipment maintenance and repair is also the responsibility of DPC. It operates a central mechanical workshop and a spare parts store in Kigali and two regional workshops in Ruhengeri, and Kibuye. Major repairs are carried out at the central workshop and routine maintenance in the regional workshops. These operations are supported by technical assistance provided under IDA and German projects and staffed by local mechanics and helpers. As a result it is now operating satisfactorily. However, it will continue to depend on the assistance of the expatriate mechanics to carry out its operations satisfactorily for several years given the shortage of experienced local mechanics. The proposed project would provide the necessary technical assistance, equipment, materials and supplies for continued improvement of operations and will put emphasis on the training of necessary personnel (para. 4.22). 1.29 Overall, road maintenance is carried out reasonably well, but improvements are needed in the following areas: (i) availability of equipment remains low, mainly due to lack of skilled mechanics and delays in supply of spare parts, and should be increased; (ii) procurement of materials should be better planned and monitored; (iii) costs should be closely monitored and unit costs computed; for instance, fuel consumption although recently reduced remains too high and needs to be better controlled; and (iv) periodic maintenance and in particular grading on gravel roads should receive a greater priority than in the past and should be carried out systematically.  - 10 - These operational issues will be addressed under the project through (a) recourse to gradual contracting out of road activities; (b) assistance to DPC in planning, cost accounting and setting up appropriate management information indicators; and (c) increased budgets for road maintenance, through the Road Fund. 1.30 DPC is responsible for engineering and supervising construction works. Due to limited number of experienced staff, it is supported by technical assistance staff from FRG. DPC can handle only minor engineering design and work supervision tasks. Engineering studies and supervision of major projects are entrusted to foreign consultants and occasionally the National Study Bureau (BUNEP) which is gaining expertise in this field. DPC also operates the Government Soils Laboratory "Laboratoire National des Travaux Publics" (LNTP). LNTP is carrying out most soil and material tests for design and construction supervision of civil works but has now to compete with the University Laboratory for works for the private sector. French and Belgian aid are expected to continue to provide technical assistance and training to LNTP in the next few years. As part of the ongoing program, LNTP's capacity will be expanded to cover certain study and supervision tasks of road maintenance operations and research in the utilization of local materials for road construction and maintenance. Construction projects are executed by contractors, following suitable pre- qualification and tendering procedures. Contracts are generally let on a unit-price basis following international competitive bidding. Rwanda has very few domestic road construction firms due to lack of skilled and experienced personnel, lack of financial resources and a small market for construction works. A few domestic firms work only in small building construction projects and as minor subcontractors to foreign firms for major building construction. The construction industry is dominated by foreign contractors using mostly equipment-based methods and domestic contractors carry out some building construction and minor road works, sometimes through joint venture and subcontracting arrangements. The Government has now decided to open road works to private contractors, besides the local contractors under sub-contract to major international firms. Labor-based methods have been used at times for construction of low traffic volume roads with mixed results, most recently, whereas they are presently encouraged under a UNDP project carried out with ILO support west of Kigali. It is expected that recourse to small and medium local construction firms would stimulate the increased utilization of labor in the construction industry. 1.31 So far, virtually all road maintenance works are carried out by force account by DPC, except resurfacing of paved roads. Regraveling and rehabilitation with spot improvements of earth roads are carried out by the six production brigades, but productivity can still be improved with lower unit costs also feasible. The equipment for the brigades was provided under financing by IDA, the OPEC Fund, United Nations Capital Development Fund and FRG. Patching and resealing works on paved roads are carried out by two brigades. Routine maintenance, including cleaning ditches, culverts and shoulders is carried out unevenly, under labor-based cantonnage explained above. Bridge maintenance is carried out by a bridge brigade.  - 11 - -- Communal Roads 1.32 Institutional responsibility for roads in Rwanda has not always corresponded to actual practice. MINITRAPE is responsible for the construction and maintenance of all roads classified as national (presently some 2,270 km). Responsibility for more than 9,000 km of other unclassified roads is with the local governments (communes). In practice, however, the communes do not generally have the financial and technical resources to undertake regular road maintenance. Especially since the broad category "communal roads" encompasses roads of quite different economic importance, MINITRAPE has tried to lend a hand on a few of the more important of these roads. Overall results have been mixed, however, partly because the capacity of tIINITRAPE on classified roads is already stretched and because the expectation of a MINITRAPE brigade arriving can lessen the communes' incentive to carry out maintenance on their own. The Government has recognized thle need to re-categorize the road network to better reflect the distinction among roads of different types (para. 2.19), increasing the share of roads maintained by MINITRAPE. Financing of Road Maintenance 1.33 Routine and periodic maintenance are financed so far through the recurrent budget and the donor community. New road and bridge construction and some periodic maintenance of paved roads is financed under the investment budget. The budget works as follows: budget proposals are prepared by the DPC during the third quarter and submitted to the Ministries of Finance and Planning during the fourth quarter. They decide jointly on the budget to be presented to the Cabinet for final approval. Budgets are normally approved by the Cabinet and Parliament in January. 1.34 Total annual expenditures for highway maintenance have averaged some FRW 1,400 million in recent years (Annex 1.8). Of these, about 40% was funded through the Government's recurrent budget and the remainder by multilateral and bilateral donors. The recurrent budget allocation to road maintenance has been stable at FRW 570 million in the 1986-1988 period. Total annual expenditures for highway construction have tended to fluctuate strongly over the years, due to the overlapping of major construction works. Construction expenditures have averaged FRW 2.5 billion in the 1986-1988 period. Maintenance needs have been growing steadily and faster than actual maintenance expenditures. The proposed Road Fund (see para 2.13) and other sources (Government and donors) should ensure that the funds available for road maintenance are adequate. Road maintenance costs and productivity are now beginning to be more closely monitored under the Sixth Highway Project through the set up of cost accounting and management information indicators.  - 12 - II. SECTOR ISSUES AND POLICY INITIATIVES A. Transport Sector Issues 2.01 The main issues to improve the overall efficiency of the transport sector can be categorized as follows: (i) flexibility in international transport; (ii) liberalization of transport operations; (iii)expenditure programming; and (iv) other institutional issues. -- flexibility in international transport 2.02 Being a land-locked country, Rwanda has a clear need for continuously selecting the most cost-effective transport routes for exports and imports, while maintaining the security of goods en route and a continuous supply. These objectives are sometimes in conflict and a choice of the most important objectives to pursue has to be made. For external transport, in practice this has led to a desire to maintain several potential route options in parallel. Nevertheless, some of the external routes may be more expensive than others, at least for certain commodities and at certain times of the year. A relatively high degree of flexibility is therefore essential to make the optimum use of the alternatives available. In order to meet the requirement of flexible transport routing for external transport, the mechanism for allocating foreign exchange by the Central Bank needs to be changed. The objective of this would be to provide freedom of choice of the most cost-effective choice of transport mode, carrier and routing at all times. -- liberalization of transport operations 2.03 For the same objective of reducing external transport cost, the Government-owned trucking company STIR ought to be in position to operate freely in a competitive industry on similar terms as other operators. An effective way of achieving this is by increasing the private ownership in the company to a point where 51% or more is privately owned. Under the Public Enterprise Reform Project, assurances were provided by the Government of a plan for privatization of STIR (see earlier discussion under para. 1.16). 2.04 The other Government-owned transport company, ONATRACOM, is operating in the passenger transport market, which is dominated by private operators. As part of the development of a performance contract between the government and ONATRACOM (i) a clear separation will be made between regular commercial services, which should cover all operating costs, and services for which for social or other reasons there may be a case for subsidy; and (ii) ONATRACOM tariffs will be increased and subsequently liberalized. Signature of this performance contract is included in the Action Plan (para 6.01).  - 13 - -- expenditure programming 2.05 Beginning in 1987 under the Sixth Highway project, MINITRAPE has undertaken regular expenditure programming for a three-year period for road maintenance operations. Even though the balance between maintenance and capital expenditures has improved, a substantial increase in maintenance funding is still required to meet the country's needs. As Rwanda finances only a part of total road maintenance expenditures, a target of FRW 1.1 billion per year for road maintenance (see para. 1.34) is realistic. 2.06 In 1988, the MINITRAPE expenditure programming process was extended to include other government expenditures in the transport sector. This was analyzed by the IDA Public Expenditure Review mission (Report 7717- RW). Annual preparation and review with IDA of a three-year program of expenditures for the sector for MINITRAPE and MINITRANSCO (para. 6.01) has been agreed. -- other institutional issues 2.07 There is a need for staff with better planning skills who would be able to influence the design of the transport sector program by focusing more on the management of maintenance programs. In order to make the Government's commitment to road maintenance more effective in practice, the newly established Road Fund will also need to be effectively administered. A manpower development plan and a better focus on equipment management are also important requirements. These issues would be addressed in the proposed project. B. Policy Initiatives 2.08 The Government's latest development plans have assigned an important role to transport in the development of the economy. Transport investments and policies as stated in these plans have aimed in particular at: (a) improvement of international transport connections; (b) upgrading to paved standard of the main road network to facilitate the country's development and its social and administrative integration; (c) improving the wider (primary, secondary and more recently communal) road network through better maintenance of existing roads; and (d) lowering transport rates and improving transport services in rural areas. These objectives correspond broadly to the priority tasks of the sector. Major achievements have been made in each area, and in the first two in particular. For the future, these broad objectives remain appropriate with more emphasis on the latter two. More attention will need to be given to translating the objectives into programs with better balance between maintenance and investment and more regard to policy and implementation aspects. In particular, cost recovery and the financial and budgetary capacity to maintain the network, which has been built up, need to be given high priority. This issue is being considered in the yearly preparation of maintenance programs and since 1988 in the PER review. 2.09 International transport and liberalization issues (para. 2.01 (i) and (ii)) would be addressed primarily through the enactment of policy reforms such as those outlined in the Statement of Sectoral Development Policy (Annex 2.1). Expenditure programming and other issues would be addressed through credit covenants and the design of the project which will  - 14 - provide direct financial assistance to some road maintenance activities as well as assistance to improve planning and training capacity, together with special areas of concern such as road safety. In addition, the project would provide institutional support through technical assistance and training to strengthen the MINITRAPE and MINITRANSCO capacity for planning, monitoring of transport activities and preparation of improved transport policies. Statement of Sectoral Development Policy 2.10 One important initiative under the project is the Statement of Sectoral Development Policy (see Annex 2.1). This is accompanied by an Action Plan (see Annex 2.2), which together with the Statement has been agreed. The Policy has been based on and summarizes the government sector strategies under the Fourth five-year plan for roads and transport. These in turn have been founded to a large extent on the studies done under the UNDP-Transport Planning project (para 2.11) and the Great Lakes Corridor Study (para 2.12). The main objectives of this sectoral policy are to increase flexibility in international transport and to further liberalize transport operations. To achieve these goals, the Government plans to change legislation which would: (i) limit the level of price protection given to domestic trucking companies; (ii) reduce the minimum required size for a truck fleet to operate independent international transport; this would increase competition in the road transport industry; (iii)change the regulations concerning consular clearance (now used to give preferential treatment to Rwandese trucks) for transport from Kenya to statistical data collection only; and (iv) remove the present obligation to use air transport to or from Mombasa for certain products. This would allow traders to use the most advantageous route and mode at any given time for their products and in particular for high value coffee. These issues were included in the Action Plan (para. 6.01). It has also been agreed that the Action Plan be reviewed on an annual basis and updated or modified as necessary (para. 6.01). Transport Planning (UNDP) 2.11 Planning and coordination of the sector has been incomplete partly as a result of fragmented responsibilities among ministries in the sector. This has been recognized by the Bank and other external aid agencies like UNDP. The latest, and so far most effective response, is a transport planning project financed by UNDP (RWA/86/005), for which the Bank has been Executing Agency. This project, initiated in 1986, in turn built upon previous UNDP projects, such as the assistance to prepare the Northern Corridor Transit Agreement (see para 1.07). In addition to ad hoc  - 15 - assistance to both the ministry responsible for the project, MINITRANSCO and MINITRAPE for various planning tasks, training of counterparts and seminars, a number of studies have been carried out. These studies have proved quite useful for preparation of the proposed project, especially those dealing with communal roads, internal transport and air transport. Great Lakes Corridor Study 2.12 The problems of external transport access to Rwanda have much in common with the problems of other landlocked countries and regions, such as Burundi, Uganda and the eastern part of Zaire. The Great Lakes Corridor Study, carried out by the Bank in 1988, analyzes international transport problems in the Great Lakes area around the large lakes Victoria and Tanganyika as well as in the main transit countries (Kenya and Tanzania), and defines the issues and policies required to develop a coherent international transport-transit strategy for East and Central Africa. After reviewing the existing and proposed main routes, the study identified the major issues within the northern and central corridors (infrastructure problems, transport facilitation and transit regulation); reviewed how each national policy affects the efficiency of international transport; reviewed the costs and revenues for the transit countries resulting from international traffic; identified factors affecting routing decisions; and described a scenario of traffic flows in 1995 that could result from these factors. Many of the policy issues identified by the study are addressed under this IDA transport sector project. Road Fund 2.13 The first attempt to establish a Road Fund in Rwanda was a Law approved on August 23, 1963. This law created the "Fonds Routier du Rwanda", but was never applied because of the complexity of the legal framework and the Ministry of Finance opposition to the Fund operatiiig outside its control. 2.14 The Government has now moved ahead and prepared legislation for a revamped Road Fund (Law and Presidential Decree). The Law has already been approved by the Rwandese parliament. The Presidential Decree is being prepared by the Presidency, together with the Ministries of Finance and Public Works. The Road Fund as presently envisaged would be a small unit, with a limited number of staff (5 people at most) under the control of both Ministries (Finance and Public Works). Management of the Road Fund would be monitored by a committee representing all interested branches of Government and the road transport industry. 2.15 The Committee would examine maintenance programs and annual budgets presented by the "Direction Generale des Ponts et Chaussees" responsible for carrying out the programs. A direct link would be established with the Public Expenditures exercise to ensure consistency with the country's macroeconomic objectives. Once the programs are approved by the management committee, the Ministries of Finance and Public Works would make funds available, on a timely and regular basis, to road maintenance operations. To ensure a proper level of transparency and accountability,  - 16 - the disbursement procedures would include a double signature of Ministry of Finance and MINITRAPE. Annual audits would also be instituted (see para. 4.29). In addition, a decentralised procedure to make funds available at the level of the 'Prefectures" or even the communes needs to be implemented. Finally, the committee should make sure that the Road Fund receives a proper level of funding. 2.16 The Road Fund will be externally financed by fuel taxes, axle taxes and an international road toll and internally by transfers from the General Budget. External revenues generated under the Road Fund are estimated at FRW 885 million (US$11 million) annually. The breakdown of these revenues is as follows: Fuel taxes FRW 780 million Axle taxes FRW 100 million International road toll FRW 5 million Total FRW 885 million This is not sufficient to cover the portion of road maintenance costs which is financed by Rwanda. Those costs are estimated at: Periodic maintenance FRW 580 million Routine Maintenance FRW 340 million Equipment renewal FRW 128 million Salaries FRW 64 million Total FRW 1,112 million Moreover this amount covers only national roads and does not include programs such as communal roads. A financing gap of about FRW 400 million per year will be covered under the general budget transfers to the Road Fund. 2.17 In 1986 the Ministry of Finance instituted by Ministerial decree a petroleum tax that is collected by MAGERWA (Magasins Generaux du Rwanda). The proceeds of this tax, about US$10 million per annum, have since been regularly deposited into an account held with the Central Bank (BNR) in order to finance the Road Fund. That money (FRW 2,383 million or US$29.8 million as of August 31, 1989) has not yet been used directly for road maintenance, but only through the regular budget. 2.13 The Government would take steps to ensure so that the Road Fund would function properly during the project period under new legislation. It has also been agreed that the Government would take all necessary measures to ensure that at least FRW 640 million (SDR6.0 million) annually from the Road Fund is used for road maintenance. In addition, at least 10 percent of total Road Fund resources would be devoted to maintenance of regional and communal roads (see also para. 4.07). Reclassification of Road Network 2.19 The present road classification system, established by Presidential Decree in 1964, contains only 31 roads whereas there are now over 100 (see also para. 1.32). Aware of the need for a reordering of the present system, the Government is considering a new classification which would improve upon the current one in two respects. As a first change,  - 17 - distinctions within the former "communal roads" category are recognized by identifying a new category "National Roads of Communal Interest" (those linking administrative centers of communes with adjacent communes in addition to the purely 'communal roads" (smaller roads or tracks between localities within a commune but not crossing communal borders). Other National and International roads retain their present definition as roads which link a major urban center to another or to an international border. The new system is summarized below and promulgation of this Presidential Decree is a condition of effectiveness (para. 6.02): -- National Roads of International Interest (RNI) -- National Roads of National Interest (RNN) -- National Roads of Communal Interest (RNC) 2.20 A second change increases local responsibility for roads vital to the local economy. While the administrative and technical responsibility for RNI, RNN and RNC will remain with MINITRAPE, the local authorities, will be in charge of other communal roads. This change would be made by Presidential Decree. Subsequently, redesigning of the numbering system based on an inventory of the present network. This inventory allows a ranking of maintenance needs to be made and a budget prepared, as part of the national road maintenance strategy supported by the proposed project. C. Previous Bank Group Assistance in the Sector 2.21 The Bank Group has so far provided US$107.4 million for six highway projects since 1970 in Rwanda. The First Highway Project (Credit 196-RW, US$18.8 million, 1970), the Third Highway Project (Credit 475-RW, US$6.3 million, 1974), and the Fifth Highway Project (Credit 1250-RW, US$25.9 million, 1982) primarily financed construction of almost 200 km of the main roads of the country. The results of these projects have been mixed. Excessive delays and cost overruns occurred during the improvement works on the Kigali-Gatuna road (80 km) and Ruhengeri-Gisenyi road (60 km). These difficulties were due to inadequate engineering and construction techniques, and instability in Uganda causing interruption in the supply of equipment and materials. The PPAR's, however, concluded that the improvement works were still justified, as the increases in construction costs were offset by higher than anticipated traffic growth and greater savings in vehicle operating costs. The Kigali-Gatuna road later deteriorated to the point where reconstruction became necessary. This was financed under the Fifth and Sixth Highway Projects. Reconstruction is completed, except for a short section crossing one of the marshes. In view of the difficulties encountered in the first two road construction projects, the improvement of the Butare-Kitabi road (53.5 km) under the Fifth Highway Project was designed with particular attention to soils problems, alignment and drainage. The supervision team was also provided with an expert in soils engineering. The final cost of this now successfully completed project allowed a reallocation of US$5.0 million for completing the reconstruction of the Kigali-Gatuna road. 2.22 The other highway projects have concentrated on improvement of road maintenance operations and on institution building. The Second Highway Project (Credit 299-RW, US$5.4 million, 1971), the Fourth Highway Project (Credit 769-RW, US$15.0 million, 1977), and the Sixth Highway Project  - 18 - (Credits 1641-RW and A8-RW, 26.0 million, 1986 and supplement US$10.0 million, 1988) have all supported the road maintenance and reconstruction program. The first two projects were designed to carry out periodic and routine maintenance on both paved and earth roads. At the closing of the Second Highway Project, however, only 50% of targeted works were cor,leted successfully, mostly due to overly optimistic targets and inadequately trained personnel. The Fourth Highway Project was designed with more consideration to the limitations of the Roads Branch, and lack of qualified staff. The execution of this project was better and by its Closing Date in 1984, 90% of the works had been completed. The successful organization of labor-intensive teams of "cantonnage" is playing a key role in keeping the main network passable all year round, accompanied by Umuganda activities (para 1.27). The condition of most of the paved roads is also better than for most of Sub-saharan Africa. The lack of qualified candidates and losses of trained staff to the private sector were taken into consideration in the Sixth Highway Project, which gave increased attention to staff development, but also by the use of contractors for certain aspects of highway maintenance. Nevertheless, technical assistance will still be needed in the medium term to carry out effective road maintenance operations. Although most of the initiatives under the Sixth Highway project are still ongoing (some 56% disbursed), conditions for main roads have clearly improved, while the Rwandese private sector has been allowed an expanded role.  - 19 - III. THE PROJECT A. Obiectives 3.01 The proposed project, in the form of a transport sector operation, would be in line with the Government's Letter of Sectoral Development Policy (see Annex 2.1). It would cover not only the requirements of the roads sub-sector but also other needs the transport sector as a whole will be facing in the early 1990s. 3.02 The specific objectives of the road components would be: (a) to protect capital investment and to increase the service life of international and national roads through a countrywide routine and periodic road maintenance program; (b) to implement cost effective approaches to design, construction, supervision, and maintenance of these components within resource constraints; (c) to strengthen the institutions responsible for implementing road components through improvement of maintenance planning and operations; (d) to promote communal development and ensure a better economic integration of the country through the reconstruction and maintenance of regional and communal roads in selected sub-prefectures; (e) to provide the Kibuye prefecture and especially the town of Kibuye with permanent access to the rest of the country through the upgrading and paving of the Gitarama - Kibuye road; (f) to improve resource mobilization to support international and national as well as regional and communal road maintenance activities through a newly created Road Fund; and (g) to consolidate and improve overall road maintenance practices and achieve a better balance between road maintenance and construction. 3.03 The objectives of the transport component in support of the sector development would be: (a) to improve general policy of the sector as outlined in a Statement of Sectoral Development Policy; (b) to support lake transport, vessel maintenance and access to the shore on Lake Kivu; and (c) to assist in improved road safety by means of a regular system of vehicle inspection.  - 20 - B. Description 3.04 A comprehensive program of road reconstruction and maintenance activities, institutional strengthening, and transport sector improvements has been prepared by the Government and submitted to the donor community. The program comprises: (a) participation with other cofinancing agencies in the upgrading and paving of the 75.5 km Gitarama - Kibuye road; (b) assistance to rehabilitation and maintenance of a pilot project of some 600 km of regional and communal roads in six selected sub-prefectures, also in support of agricultural programs in the Cyangugu prefecture (see Map IBRD 21834); (c) support to a four-year national road maintenance program (1991-1994) consisting of: (i) resurfacing of 197 km of paved international roads with single- or double-surface treatment and regravelling of 1,140 km of unpaved (gravel) national roads, as well as periodic bridge maintenance; (ii) patching of the entire paved road network (1,107 km); grading of 2,640 km of unpaved roads; and labor-based routine maintenance on 2,254 km of gravel roads and on 1,796 km of earth roads; (iii)regular maintenance of large embankments and of urban roads as well as of traffic signalling and markings; and (iv) supply of new construction equipment, logistical support to MINITRAPE, laboratory supply, equipment and software for a pavement management system. (d) institution building and support in the form of technical assistance and professional training to MINITRAPE and MINITRANSCO as well as to small- and medium-scale road construction and maintenance contractors; and (e) a transport sector program including poli^y actions (see para. 2.10) complementing ongoing or planned ac.ivities by financing selected civil works and equipment. -- Uparadina and Paving of Gitarama - Kibuve Road 3.05 The road linking the Gitarama - Mukamira/Ruhengeri road close to Gitarama with Kibuye on Lake Kivu is one of the last unpaved main roads in Rwanda. Kibuye is the last prefectural capital which has to be linked to the rest of the country by a paved road. The Government had obtained assistance from EEC/EDF for the preparation of a feasibility study and of detailed engineering including tender documentation for the Gitarama- Kibuye  - 21 - road. Presently, engineering design work is completed, but tender documentation needs to be finalized, and will be issued in 1990. 3.06 The present road has a total length of about 86 km and is of semi-engineered gravel standard in rather unsatisfactory condition. Narrow shoulders cr no shoulders at all, insufficient lateral drainage, eroded slopes, as well as potholir.g and rutting of the gravel surface are common. Pipe culverts are frequently cracked or otherwise damaged; small bridges have one lane only, and their concrete or masonry substructures and timber decks are generally in bad condition. Timber on deckings is placed longitudinally making crossing of bridges dangerous especially when timber is slippery. Year-round passability of the road cannot be secured for passenger cars, buses, and trucks. Only four-wheel drive vehicles can pass safely during rainy seasons. 3.07 Since the road follows the existing topography in very mountainous terrain, the present alignment is unacceptable and needs major modifications in terms of reductions in curviness as well as in rise and fall. The proposed new alignment generally remains on the existing road, however, major earthworks will be necessary in order to adhere to minimum horizontal and vertical geometric design standards. This in turn raises some environmental concerns, which have been subject to a special assessment (see para. 4.34). The new road will have a total length of 71.5 km after some 4 km have recently been constructed outside Gitarama. In addition, some 4 km of side and access roads (e.g. to Kibuye port) have been designed. Total base cost of road construction including construction supervision have been estimated at FRW 3.76 billion or about US $ 47.0 million equivalent. This yields FRW 49.8 million or US$623,000 equivalent per km., compatible with recent similar road works in Rwanda. Some 50 % of total base cost are due for earthworks only. -- Communal Roads Rehabilitation and Maintenance Pilot Pro1ect 3.08 The project would support a Communal Roads Pilot Program (PPRC) to improve maintenance capacity and road conditions in 6 sub-prefectures, representing 19 of the country's 143 communes. The Government selected the sub-prefectures for their wide diversity of topographic and soil conditions and for the prospect of carrying out some of the works by small and medium enterprises (SMEs). In addition, two PPRC areas, in Cyangugu Prefecture, were selected jointly with the Ministry of Agriculture (MINAGRI) to develop areas with proven agricultural potential. 3.09 The PPRC would extend over an initial four year period and would aim at establishing a sustainable maintenance structure at the sub- prefecture level while carrying out works on about 300 km of regional roads (roughly 15% of all regional roads) and an equal amount of communal roads representing about 32 of the total. Maintenance Units would be established at the sub-prefecture levels to carry out the program. HINITRAPE would provide technical support and would ensure consistency of the PPRC with national maintenance strategies (see also para 4.06). 3.10 With a view to this eventual extension of the program, different methods of implementing maintenance works would be tested locally. Most of these roads, built to unengineered earth standards, are presently in poor condition and will require rehabilitation or reconstruction before the  - 22 - maintenance program begins. The bulk of this rehabilitation would be carried out by SMEs under the guidance of the Maintenance Units. Later, routine and periodic maintenance would be done largely by work gangs hired by the Maintenance Unit, although an effort will also be made to group road segments and use multi-year contracts as means of attracting SMEs to bid on road maintenance. For the communal roads the existing community labor system (Umuganda) will continue to be used, but with strengthened management from the Maintenance Units, better tools, and training. The base cost of the PPRC is estimated at FRW 963 million (US$12.1 million), or some US$20,000 per km which is in line with costs for similar roads elsewhere. -- The 1991-1994 NatJonal Road Maintenance Program 3.11 The four-year national road maintenance program would concentrate on maintenance of priority roads for economic development and on the expanded use of private firms for maintenance of the main road network. MINITRAPE will continue to carry out (i) resurfacing of paved roads; (ii) regravelling of unpaved roads; (iii) patching of the entire paved road; and to the extent resources permit, labor-based routine maintenance on all gravel and some priority earth roads. A bridge maintenance program costing FRW 200 million (US$2.5 million) would also be carried out. Use of force account brigades would be reduced, and reliance on private firms would increase, as this maintenance program is carried out. 3.12 Periodic maintenance cost for paved roads will come to FRw 708.5 million (about US $ 8.9 million) while the proposed periodic maintenance operations for unpaved roads are estimated to be FRw 802.9 million (US $ 10.0 million). All routine road maintenance on paved and unpaved (gravel and earth) roads will come to Frw 636.3 million (US $ 8.0 million). In addition, regular maintenance of large embankments (estimated at FRW 80 million or US$1.0 million), of urban roads (estimated at FRW 120 million or US$1.5 million) and of traffic signaling and markings (estimated at FRw 26.0 million or US$0.3 million) will be executed. 3.13 The proposed national road maintenance program will also include the supply of new road maintenance equipment amounting to FRW 375.5 million (US $ 4.7 million), logistical support of FRW 100 million (US$1.25 million), laboratory support (FRW 31.2 million or US$0.4 million), software, etc. for a pavement management system including a road data base (FRW 30 million or US$0.4 million). -- Technical Assistance and Manpower Development 3.14 The multi-year road maintenance program has a significant component for supporting institutional development in the subsector, including technical assistance and professional training. The latter two have been conceived with a view to coordinate the various donors' interventions. The technical assistance program has been designed to support development of planning, budgeting, and implementation capacities of maintenance activities including the establishment and operation of a pavement management system (such as on the basis of the Bank's HDM-III model), and to further strengthen general managerial capacities. The proposed training part of the manpower development program is basically a continuation of the successful actions undertaken under the Sixth Highway Project.  - 23 - 3.15 Expatriates for a total of 72 man-months have been foreseen for the technical assistance component under the road maintenance program. Estimated cost are at FRW 79.2 million (US$1.0 million). An allowance has also been made within this category for any studies required for future road works. For the professional training program there will also be expatriates for a total of 120 man-months. Estimated cost are at FRW 131.2 million (US$1.6 million). In additian che proposed regional and communal roads pilot project will need technical assistance which has beer. estimated at 24 man-months of expatriate services costing FRW 26.4 million (US$0.3 million). -- Transport Sector Program 3.16 For improved lake transport the project would include funds for selected civil works and equipment. A first step in establishing improved ship maintenance, is a modest shipyard, including construction of a slipway and additional quays for vessels up to 100 tons. The slipway would be equipped with a marine railway capable of lifting lake vessels, barges and motorized craft, up to 100 tons carrving capacity, i.e. up to about 50 tons weight of the vessel. This will be managed by one of the vessel operators on the Lake Kivu. 3.17 A regular system of vehicle inspection for public passenger transport has already started. The project would therefore support efforts by the Government and the insurance industry, to establish and equip an inspection station in the Kigali area. This would include funds for civil works, equipment, technical assistance, and logistical support (data processing equipment) to integrate the new system with the already existing system for vehicle registration. This will also include the development of enforcement measures covering other aspects such as vehicle weight limitations. C. Project Costs 3.18 The project consists of a transport program for 1991-1994, financed by various sources and described in more detail below. This includes the MINITRAPE road program, with some participation from various donors under earlier projects (IDA under the Sixth Highway project, KfW, EDF); which will continue also in 1991-1994. The total cost, net of taxes and duties but including contingencies, is estimated at US$148.85 million with a foreign component of US$96.61 million (65%) and local costs of US$52.24 million (35%). Taxes are estimated at FRW 608 million (US$7.6 million). Base costs are expressed in terms of prices as of the end of 1989. Physical contingencies of 10 % have been added to base costs. Price contingencies have been added to base costs and physical contingencies. Price contingencies, for both local and foreign costs, are based on recent estimates of international inflation of 7.2 % in 1990 and 4.4 % from 1991 onwards. The detailed project costs are shown in Table 3.1.  - 24 - RWANDA Table 3.1 TRANSPORT SECTOR PROJECT Project Cost Estimates US $ million FRW million Foreign Local Foreign Total Local Foreign Total as 2 of total A. TRANSPORT COMPONENT Lake transport 1.24 0.89 2.13 99.20 71.20 170.40 41.78 Vehicle inspect. & safety 0.45 1.05 1.50 36.00 84.00 120.00 70.00 Total base cost transport 1.69 1.94 3.63 135.20 155.20 290.40 53.44 B. ROAD COMPONENT Gitarama-Kibuye construction: Road construction 11.08 33.24 44.32 886.40 2659.20 3545.60 75.00 Construction supervision 0.54 2.17 2.71 43.20 173.60 216.80 80.07 Sub-total 11.62 35.41 47.03 929.60 2832.80 3762.40 75.29 Periodic maintenance: Resurfacing paved roads 2.21 6.64 8.85 176.80 531.20 708.00 75.03 Regravelling gravel roads 3.01 7.03 10.04 240.80 562.40 803.20 70.02 Bridge maintenance 1.63 0.88 2.51 130.40 70.40 200.80 35.06 Sub-total 6.85 14.55 21.40 548.00 1164.00 1712.00 67.99 Routine maintenance: 7.67 4.96 12.63 613.60 396.80 1010.40 39.27 Other Minitrape services: New road equipment 0.47 4.23 4.70 37.60 338.40 376.00 90.00 Laboratory & support 0.50 1.51 2.01 40.00 120.80 160.80 75.12 Salary cost 2.25 0.12 2.37 180.00 9.60 189.60 5.06 Sub-total 3.22 5.86 9.08 257.60 468.80 726.40 64.54 Communal roads pilot project: Road rehab. by SME 2.08 2.08 4.16 166.40 166.40 332.80 50.00 Road rehab. force account 4.27 1.83 6.10 341.60 146.40 488.00 30.00 Equipment & vehicles 0.10 0.90 1.00 8.00 72.00 80.00 90.00 Supporting services 0.60 0.21 0.81 48.00 16.80 64.80 25.93 Sub-total 7.05 5.02 12.07 564.00 401.60 965.60 41.59 Institutional development: TA Road maintenance 0.10 0.89 0.99 8.00 71.20 79.20 89.90 TA Professional training 0.16 1.48 1.64 12.80 118.40 131.20 90.24 TA Communal Roads pilot 0.03 0.30 0.33 2.40 24.00 26.40 90.91 Training & Studies 0.08 0.74 0.82 6.40 59.20 65.60 90.24 Sub-total 0.37 3.41 3.78 29.60 272.80 302.40 90.21 Total base cost roads 36.78 69.21 105.99 2942.40 5536.80 8479.20 65.30 Total project base cost 38.47 71.15 109.62 3077.60 5692.00 8769.60 64.91 Contingencies: Physical 3.85 7.11 10.96 307.76 569.20 876.96 Price 9.92 18.35 28.27 793.60 1468.00 2261.60 PROJECT GRAND TOTAL 52.24 96.61 148.85 4178.96 7729.20 11908.16 64.91  _ 25 - 3.19 The base costs of works on paved roads are estimated at US$43,750/km for resurfacing (periodic maintenance), and on unpaved (gravel) roads at US$8,800/km for regravelling (periodic maintenance) and at US$625tkm for grading (routine maintenance). Labor-based routine maintenance on gravel roads comes to US$1,600/km per year while the same type of maintenance on earth roads amounts to US$400/km per year. Patching on paved roads comes to US$1,750/km per year. These unit costs are based on those of ongoing works under the Sixth Highway Project. 3.20 The man-month cost of technical assistance services, including salaries, overhead (home office expenses, expatriate allowance, social cost and other expenditures) and reimbursable expenses (travel, telecommunications, housing, local transfers, other miscellaneous items) have been estimated in line with similar and presently ongoing services in Rwanda. D. Financing Plan 3.22 Five institutions have indicated interest in a total of US$94.3 million equivalent of ready financing, including IDA (US$40.0 million credit and US$4.1 million from an existing balance of credit under the Sixth Highway Project), EEC/EDF (US$32.6 million), SDC (US$9.4 million), OPEC (US$4.0 million), and FRG/KFW (US$4.7 million). Government contributions are estimated to be US$54.1 million with the newly created Road Fund to contribute US$42.4 million (28%). The balance amounting to US$11.7 million will be provided by the Government's ordinary budget (US$5.0 million or 40% and its development budget (US$6.7 million or some 3%). The proposed IDA Credit does not constitute a self-contained project but will contribute 27% of the overall cost of the program. 3.23 A summary financing plan is given below, details are shown in Annex 3.1 Table 3.2 Financing Plan US $ million Local Foreign Total % of Total ------------------------------------------------------------ IDA - Transp. Sector Project 12.70 27.30 40.00 26.9 % - Sixth Highway Project 1.68 2.39 4.07 2.7 % EEC/EDF 8.10 24.50 32.60 21.9 % SDC 2.34 7.03 9.37 6.2 2 OPEP 1.00 3.00 4.00 2.7 2 FRG/KFW 1.52 3.23 4.75 3.2 2 Government - Road Fund 18.05 24.32 42.37 28.5 2 - Development Budget 2.53 4.18 6.71 4.5 % - Ordinary Budget 4.32 0.66 4.98 3.3 S Total-------52.24------96.61------148.85-------100.0-------- Total 52.24 96.61 148.85 100.0 %  - 26 - IV. ORGANIZATION AND IMPLEMENTATION A. Implementation ArranRements 4.01 The project would be implemented by MINTTRANSCO for the transport component, and by MINITRAPE for the national road maintenance and Gitarama - Kibuye road construction components and the communal roads pilot project component. The expected implementation schedule for major activitiee of each project component is shown in Cbart 1. This schedule was discussed and agreed upon during negotiations. The project would in principle cover a four-year period starting in January 1991. Yearly discontinuation of certain project elements should that be required. -- Gitarama-Kibuve Road 4.02 During a donors' meeting held in Kigali in July 1989 it was agreed that EEC/EDF would finance the first section of the Gitarama - Kibuye road from km 0.0 to km 40.6 while OPEC, SDC, and IDA would jointly finance the remaining road section from km 40.6 to km 75.5. The estimated base cost of section 1 come to PRW 2.12 billion (US$26.5 million) while section 2 would cost FRW 1.64 billion (US$20.5 million). It is anticipated that construction would start in late 1990/early 1991 and would extend over two years. Fulfillment of conditions precedent to signature of financing agreements between the Government and EDF, OPEC, and Swiss Development Cooperation for the Gitarama-Kibuye road would be a condition of disbursement for the IDA contribution to this component (para. 6.03). To the extent possible, one supervising consultant for all roadworks would be selected (see draft terms of reference for construction supervision consultants in Annex 4.1), but under separate contracts for the two sections. If this cannot be achieved a coordinator for supervision will be nominated. -- Maintenance Program 4.03 Most routine maintenance operations on international and national roads under the proposed four-year program would be executed by force account, but the use of private contractors, begun under the Sixth Highway project for certain works would continue. The Directorate of Roads and Bridges (DPC) in Minitrape would be responsible for its overall organization, work planning and execution. DPC would be supported by a technical assistance team consisting of five experts in the fields of maintenance organization and planning, supervision of maintenance works and equipment maintenance, general cost accounting, analytical cost accounting as well as laboratory operations. (see para 3.15) 4.04 To carry out the maintenance works, MINITRAPE would continue to run (i) its resurfacing and two patching brigades for paved roads; (ii) its grading and regravelling brigades for unpaved roads, and (iii) its brigade for traffic signalling and markings. In addition (i) two special work gangs for large embankment maintenance; (il) two gangs for bridge maintenance; (iii) two gangs for the production of crusher-run surfacing material, and (iv) five gangs for urban road maintenance would be used. Minitrape would also continue to employ some 2,700 workers (cantonniers), and its 225 foremen (capita) for labor-based routine maintenance under the supervision  - 27 - of its 20 road supervisors who are located in the 10 prefectures and presently 10 sub-prefectures. -- Communal Roads Pilot Program 4.05 To supervise execatior. of the Communal Roads Pilot Program (PPRC), the DPC at MINITRAPE would coordinate technical aspects of program execution; supervisior of procuremenit, bid evaluatien, and contract award to ensure compliance with IDA guidelines; annual consultations with the sub- prefectures on work programs; and monitoring and evaluation of results. 4.06 Although DPC would coordinate the program, the day-to-day management responsibility will be with the Maintenance Units at the sub- prefecture level. Composed generally of 2-4 communes, the sub-prefecture would represent the collective interest of the communes to improve and maintain the regional roads crossing them, while at the same time deploying resources in each commune to address local needs with support of Umuganda (see para 1.27). It is expected that maintenance would be carried out by work gangs hired directly in two of the sub-prefectures, and by SMEs in the others where the works are likely to be carried out more economically by private contractors. The chief of each Maintenance Unit would be a qualified road technician made available by MINITRAPE on transfer or secondment. Additional technical advice would be given by the MINITRAPE staff (surveillant) posted at the sub-prefecture or prefecture. This combination would ensure adequate technical input to the program and consistency with national maintenance strategies. 4.07 The Maintenance Units should be able to draw on support beyond that provided by MINITRAPE. A fixed percentage of Road Fund receipts would finance expenditures, including hired labor, incurred in exe:ution of the program. Priorities, especially between rehabilitation of regional roads and the ongoing needs of communal roads through umuganda, would be decided by the Sub-Prefect in consultation with the commune administrators (bourgmestres). Several NGOs active in the construction sector are also expected to support the program. As a condition of disbursements, agreements between the MINITRAPE and each Maintenance Unit would specify the terms under which the program in that sub-prefecture would be carried out (para. 6.03). 4.08 The willingness and capacity of Rwandese SMEs to undertake road reconstruction and maintenance was examined during preparation. On the basis of this analysis, 8 medium-sized Rwandese construction firms were seen as having sufficient capacity to carry out the works efficiently and economically. In addition, over 50 smaller construction enterprises could also participate, although their capabilities would need to be assessed in the same manner. A UNDP/ILO-project has been actively training contractors for small road works for a few years in western Rwanda. Actions to encourage adequate competition among SMEs would include grouping of works into larger-sized contracts, and awarding a multi-year contract where appropriate. Each unit would be supplied with a minimum amount of equipment, including a 7-ton truck, tractor-trailer combination, some compaction equipment, and 2-3 bicycles or motorbikes. It would be possible for SMEs to r^nt or hire-purchase some of this equipment as the program proceeds. Prequalification would be done for the entire program at its  - 28 - outset, and all prequalified contractors would be eligible during the four- year program period. 4.09 Maintenance Units assisted by MINITRAPE would develop and test a maintenance management system based on three elements: planning and scheduling9, controlled execution, and evaluation of results. In this manner the Units should be able to decide on the work that should tfke precedence given the available resources. and to determine which method to use. Local consultants would be responsible for monitoring the physical progress of the program and the performance of contractors and hired labor. The PPRC would also collaborate with a unit in MININTER, assisted by the above ILO-project, which has acquired considerable experience in supporting labor-based maintenance of local roads. An impact study of the program would be carried out during the fourth year, to help the Government decide on possible future expansion. 4.10 Both the proposed national road maintenance program and the PPRC would involve substantial financing through the newly created Road Fund. While the overall maintenance program would cost US$58.6 million, US$37.2 million (64 2) would be financed out of Road Fund resources. As regards the proposed communal roads pilot project, costing US$16.2 million, US$3.9 million (24 2) would be contributed by the Road Fund. Road Fund resources would be used primarily for the execution of road maintenance works (US$34.6 million) while IDA would largely contribute to the purchase of new road maintenance equipment (US$7.0 million). The Rwandese Government would pay MINITRAPE's permanent staff for the program from its ordinary budget. -- Transport Program 4.11 The transport program, to be implemented by MINITRANSCO, would need close coordination with the main users. For Lake transport the main users are ONATRACOM for passenger traffic and two main operators for freight traffic. For the operation of the Lake Kivu shipyard, an agreement between the Government and an opsrator, acceptable to IDA, is a condition of disbursements (para. 6.03). For vehicle inspection the two main insurance companies have collaborated with MINITRANSCO and ought to continue to assist in the development of a traffic safety program.  - 29 - B. Procurement 4.12 Procurement arrangements are summarized in the following Table. Table 4.1 Transport Sector Project (1991-1994) Procurement Arrangements (US $ million) Project Element ICB LCB Other Not Appi. Total --------------------_--------------------------------------- a) b) Civil Works 29.65 c) 7.47 51.68 30.62 119.42 (10.56) (5.16) (6.21) - (21.93) Equipment, d) Materials, 13.57 - 7.05 - 20.62 Supplies, and (11.24) - (0.50) - (11.74) Support Service e) Consultant - - 8.81 - 8.81 Services - - (6.33) - (6.33) ------------------------------------------------------------ Total 43.22 7.47 67.54 30.62 148.85 (21.80) (5.16) (13.04) - (40.00) a) Force account civil works; b) Procurement rules of EEC/EDF; c) Figures in parenthesis are amounts financed by IDA; d) Including support services and Minitrape overhead cost; international or local shopping based on at least 3 quotations; e) IDA Guidelines. The consultant services for construction supervision on the Gitarama - Kibuye road will be procured under EECIEDF Guidelines, for section 1. 4.13 Construction of the Gitarama - Kibuye road would be carried out by contractors under unit price contracts on the basis of international competitive bidding (ICB) after suitable prequalification process. While section 1 of the road would be tendered and awarded in accordance with EEC/ EDF procurement rules, ICB on section 2 would be in accordance with the 1985 Bank Group Guidelines (IDA $10.56 million, Swiss Cooperation $9.37 million and OPEC $4.0 million). These guidelines also apply to the Swiss and OPEC financing which is managed by the Bank. During the July 1989 donors' meeting in Kigali a detailed time schedule was established regarding prequalification of contractors, preparation of bidding documents, timing of tendering and bid evaluation as well as earliest possible contract award. 4.14 Communal road rehabilitation and reconstruction works under the pilot project, totalling about US$5.48 million (IDA US$3.89 million), as well as works under the transport component (IDA US$1.27 million), are too small (lots of US$100,000 to US$500,000) and scattered to attract the interest of international contractors. Therefore, LCB would be the most appropriate procedure. It is expected that Rwandese SMEs (see para. 3.08) would undertake these works. These contractors would be prequalified on the basis of assessed capacity to undertake the works.  - 30 - 4.15 In the MINITRAPE road program for 1991-94 is included routine maintenance works on paved and unpaved national roads. This maintenance totalling US$46.27 million (supported by IDA by US$2.89 million for spare parts) would continue to be executed by MINITRAPE already existing brigades. These brigades for periodic and routine maintenance will be gradually replaced by contractors as Indicated above (para. 3.11). Since maintenance works on some communal roads are so scattered and spaced in time in certain communes, that no local contractors are avtailable, or for which works no outside contractors can be found at a reasonable price, work by force account is proposed. Therefore, under Communal Roads Pilot Program such minor works totalling US$8.3 million (IDA US$6.21 million) would be executed by maintenance units in the sub-prefectures in addition to works by the SME above. 4.16 Equipment, spare parts, materials and supplies would be grouped into suitable lots and procured through ICB in general on a year-by-year basis. Miscellaneous items of equipment, spare parts, materials and supplies in lots of less than US$50,000 and totalling no more than US$500,000 may be procured by international or local shopping on the basis of at least three quotations. 4.17 Consultants for technical assistance, studies and other services would be selected following the 1981 Bank Group Guidelines. Their terms of reference and conditions of employment would be discussed and agreed upon during negotiations. Construction supervision consultants for Gitarama - Kibuye road would be shortlisted and selected in accordance with EECIEDP guidelines, for section 1 and Bank group guidelines for section 2 (see para. 4.02. If possible, one consultant would be selected for both sections. 4.18 IDA's prior review of invitations to bid will be limited to contracts estimated to cost US$100,000 equivalent or more. These undertakings were also agreed upon as part of the covenants of the credit. C. Staffina and Training 4.20 The shortage of qualified engineers and technicians is the principal cause for the lack of qualified staff in the ministries concerned. Two additional reasons have contributed to the present situation, i.e. low salaries in Government services and the lack of serious manpower planning in the past. Especially the latter is apparent from the fact that in the ministries concerned the personnel and training functions have not been given appropriate weight in their organizational structures. To make up for the shortage of qualified Rwandese higher level staff, MINITRAPE draws upon the services of several expatriates who are financed from bilateral and multilateral sources. 4.21 These experts are employed as technical advisors, training instructors, or as part of project teams. Due to the frequent lack of sufficiently qualified local counterparts coordination of expatriate activities has, however, proven difficult in the recent past. As regards middle and lower level staff the shortages are less severe and certain functional categories are even overstaffed. A general problem of the education system in Rwanda is that it leads to uneven qualifications. This has the severe implication for MINITRAPE that all too often employees for  - 31 - the middle and lower grades are hired who do not have any vocational training. 4.22 To overcome MINITRAPE's present personnel needs, a technical manpower development program has been prepared. In this program, special attention needs to be given to incentives for key staff in the form of phased training (see para 1.25). In large part, this would be a continuation of training activities already started under the Bank's Sixth Highway Project. A total of 120 man-months of expatriate technical servizes would be provided relating to training in civil engineering (especially road maintenance management), data processing (on personal computers), administration management, personnel management, and management and maintenance of public works equipment. Some 730 staff would receive training in these areas at MINITRAPE's training school. Only limited overseas training (some 60 staff) has been foreseen. A detailed description of the technical training program is contained in Annex 4.2. Agreement has been reached on preparing manpower development program for key staff of this Ministry and MINITRANSCO before the end of 1990 (para. 6.01). 4.23 As regards the proposed communal roads pilot project training would be limited to training on-the-job, as a continuation of an ongoing UNDP/ILO project. Given that this project would represent a new approach to regional and communal road maintenance a sustainable maintenance structure would first have to be be conceived and field-tested before any formal training at the MINITRAPE training school would be undertaken. This would relate to the organization, overall planning, and scheduling of maintenance works on the sub-prefectural level, to the technical supervision of works including quality and cost controls, and to the care of road maintenance equipment. D. Disbursements 4.24 The proposed IDA credit of SDR 31.1 (US$40.0 million) would be disbursed on the following basis: (a) 35% of total expenditures for civil works carried out by contract for construction of section 2 of Gitarama - Kibuye road, and 90% of total expenditures for civil works for the rehabilitation of regional and communal roads by SME, construction of a vehicle safety and inspection station in Kigali, and construction of lake vessel facilities on Lake Kivu; (b) 90% of total expenditures for civil works carried out by force account for routine and periodic maintenance on regional and communal roads; (c) 100% of foreign expenditures or 90% of local expenditures for equipment, spare parts, materials and supplies; and (d) 100% of foreign expenditures or 90% of local expenditures for consultant services and technical assistance.  - 32 - 4.25 The project is expected to be fully disbursed by December 31, 1996 in accordance with the most relevant standard disbursements table, and the credit closing date would be June 30, 1997. The estimated schedule of disbursements, given below, is based on the project implementation schedule and the disbursement profile of past transport projects in Rwanda. It also allows for a one year delay from the end of the physical execution of the project and the last payment to allow for delays in determining price variations in contracts. 4.26 In order to expedite disbursements, a Special Account would be opened at an institution acceptable to IDA. An initial deposit of US$900,000, representing about three months of expenditures for contractors, consultants, equipment, materials and supplies would be paid at credit effectiveness. The Special Account for MINITRAPE would serve as a revolving fund for all IDA eligible expenditures. 4.27 All expenditures from the special account would be reimbursed on a net-of-tax basis. Reimbursement applications would be grouped into packages of at least US$20,000 equivalent and would be fully documented. All expenditures related to the communal roads pilot project would be reimbursed against certified statements of expenditures for which documentation would be retained for review by IDA.  - 33 - 4.28 The estimated schedule of disbursements (in U' $ '000) looks as follows: Bank Group Fiscal Year Cumulative Disbursements and Quarters Ending at end of Quarter as 2 of Total 1991 March 31, 1991 900 June 30, 1991 1,800 1992 Sept. 30, 1991 2,700 Dec. 31, 1991 3,600 9 X March 31, 1992 5,400 June 30, 1992 7,200 1993 Sept. 30, 1992 9,000 Dec. 31, 1992 10,800 27 X March 31, 1993 12,700 June 30, 1993 14,600 1994 Sept. 30, 1993 16,500 Dec. 31, 1993 18,400 46 S March 31, 1994 20,400 June 30, 1994 22,400 1995 Sept. 30, 1994 24,400 Dec. 31, 1994 26,400 66 2 March 31, 1995 28,800 June 30, 1995 31,200 1996 Sept. 30, 1995 33,600 Dec. 31, 1995 36,000 90 S March 31, 1996 37,000 June 30, 1996 38,000 1997 Sept. 30, 1996 39,000 Dec. 31, 1996 40,000 100 2 Closing Date: June 30, 1997  - 34 - E. Accountint, Auditing, and Reportint Requirements 4.29 The accounting unit which was created under the Fifth Highway Project will be maintained for carrying out the following responsibilities: (i) keeping separate general accounts for the project financed by IDA; (ii) maintaining adequate accounts of all expenditures and operations with respect to road maintenance and the Road Fund to permit cost accounting of DE's operations and the determination of unit costs; and (iii) keeping separate accounts reflecting the expenditures made under the investment budget of the DPC. Separate accounts also need to be established by MINITRANSCO for the transport components. 4.30 Agreements have been reached (para. 6.01) that, (i) project accounts for the two Ministries and the Road Fund would be audited by independent auditors acceptable to the Association; (ii) such audits will be extended to the accounting procedures and principles applied for the preparation of DE's general accounts, its cost accounting and to an assessment of the adequacy of costs reported and operations of the Road Fund; (iii) the audited project and Road Fund accounts and the auditors' report on the general accounts the Road Fund and cost accounting referred to under (ii) will be submitted to the Association not later than six months after the end of each fiscal year during project implementation. 4.31 Every year, concurrently with the preparation of the annual budget, the DE will prepare a detailed road maintenance work program for the following year for the Road Fund Management Committee review and IDA for comments, taking into consideration the overall maintenance targets set for the program period. This program will describe the type of activities to be carried out by each brigade; indicate the estimated output of the brigades by major activity and the corresponding inputs required in terms of personnel and equipment, equipment utilization, fuel and lubricants, materials and spare parts. 4.32 Progress of implementation will be reported by DE on the basis of the same indicators used in the preparation of the work program. DE will ensure that the cost accounting system and different management tools which currently exist in the Prefectures periodic reports are maintained and improved under the project. These reports should be the basis for adequate financial management. DE will prepare a quarterly progress report for all its activities and specifically for the Project and the Road Fund operations showing targets and achievements by major activity and explaining significant discrepancies. An annual implementation report will consolidate this information and provide details on inputs used in the execution of the program, productivity developments and units costs of the various activities. For details see Annex 4.3. The quarterly report will be submitted one month after the end of the period and the annual report two months after the end of the year. DE will be responsible for monitoring the quantity and quality of the works carried out by the sub-prefecture and by contractors. It will outline its findings and recommendations in a note to be issued jointly with the annual implementation report.  - 35 - F. Envirommental Aspects 4.33 Most of the project is not likely to have any significant adverse effect on the environment. As part of the national road maintenance program and the communal roads pilot project road drainage would generally be repaired and improved thus substantially reducing erosion potential on the affected roads. In addition, all rehabilitation and improvement works on project roads under the maintenance program and the PPRC would remain on the existing alignments. The technical assistance teams to MINITRAPE would also assist in developing local capacity to review and evaluate the potential environmental impacts of road works eithet carried out under contract or by force account and to conceive and field-test appropriate mitigation measures if needed. 4.34 The improvement and paving of Gitarama - Kibuye road would require substantial earthworks amounting to some 7 million cubic meters (about 93,000 m3/km) and costing (in terms of base cost) US$25.5 million (52 X of total construction cost including supervision). This would include US$4.07 million to cover base cost for the transport of 100 2 of surplus excavation material to properly selected deposit sites. In addition to this, suitable safeguards would be incorporated into bidding documents and contracts to minimize potential environmental damage caused by hillside excavation, embankment compaction, erosion, lateral and cross-drainage facility, and to provide treatment of quarries, borrow and deposit pits after construction, and anti-erosion protection such as plantations. This road has been the subject of a special environmental evaluation carried out in early 1990, to ensure that these concerns have been adequately met in the project design (Annex 4.4); actions required have been agreed. Furthermore, such a resettlement and expropriation plan would be prepared for any families which would need to be relocated as a result of their loss of agricultural land. Submission of a satisfactory plan would be a condition of disbursement for this component (para. 6.05). G. Poverty Alleviation Aspects 4.35 The proposed Communal Roads Pilot Project (PPRC) would improve road conditions in selected rural areas and would make markets for agricultural products more easily accessible. It would have a beneficial impact on the rural poor through lower prices for inputs and consumer goods. The proposed utilization of local SME and the establishment of maintenance work gangs under the maintenance cells in the selected sub-prefectures and their use on routine and periodic maintenance operations is expected to increase overall employment in the concerned areas. The Pilot Project has been designed for replicability on a countrywide basis in the medium-term future. 4.36 Labor-based routine maintenance under the proposed national road maintenance program would be undertaken over the entire network of inter stional and national roads which are largely traversing low-income areas. The project would thus contribute to poverty alleviation on a countrywide basis in the short-term future. Finally, the improvement and paving of Gitarama - Kibuye road would provide the Kibuye prefecture and areas along Lake Kivu with a permanent access which would enable year-round transport of passengers and commodities and substantially reduce transport cost.  - 36 - V. ECONOMIC EVALUATION A. Benefits and Impacts 5.01 Reducing overall transport costs, for external trade as well as for internal movements of goods and passengers, would have an important role in the Government's strategy to reduce external imbalances. Other general policy objectives are to ensure better economic integration of the country and, by encouraging the private sector, through both transport operators and construction firms, more cost-effective services could be provided. This would lead to a reduction of Government expenditures and a more balanced budget. Nevertheless, the overall reduction of transport cost is potentially the most important of these aims and also the most directly perceived effect of improved transport infrastructure and policy. 5.02 Another priority for the transport sector in Rwanda is to maintain past investments, particularly when the resources available for the sector are scarce, and to alleviate constraints in the movement, marketing and export of agricultural products (mainly coffee and tea). The proposed four-year road investment and maintenance program, which includes components to be financed under the proposed IDA credit, has been designed to meet the above objectives. The periodic maintenance program for paved roads (197 kms) and main earth roads (2,640 kms) should allow the saving of greater rehabilitation costs in the medium term. In addition, about 600 km of regional and communal roads, in PPRC covering five sub-prefectures, would be improved and adequate road maintenance would be carried out on the whole main network (4,100 km). The program, for only road rehabilitation works and maintenance, is expected to yield an overall ERR of about 70Z. 5.03 Three features in this maintenance program are more emphasized than in previous highway programs. One is the setup of a program of systematic maintenance of the communal network, the second is an increased reliance on private contractors for highway maintenance and the third strong institutional development components within the sector. The economic evaluation does not consider the last two aspects individually and separately from the overall evaluation. Nevertheless the institutional development thus promoted would provide advantages well beyond what is traditionally measured by the economic evaluation. 5.04 The program also includes the participation by IDA for upgrading to paved standards of the road linking Kibuye on Lake Kivu with the remainder of the paved main road network. The Gitarama-Kibuye road serves a population in its zone of influence of almost 700,000 (4% of the Rwanda total) and the most important area for production of arabica coffee in Rwanda. Improved access to the Lake shore area of Lake Kivu has been supported by earlier IDA projects, the latest being the rehabilitation of the main road along the shore from North (Gisenyi) to the South (Cyangugu) through Kibuye and improved jetties for lake transport under an earlier agriculture project (Credit 1126-RW), and will continue to receive support under the recently approved Agricultural Services (Credit 2026-RW). One of the sub-prefectures for communal roads selected as part of the pilot project includes 3 communes directly in the zone of influence of the Gitarama- Kibuye road. Improved access to one of the most spectacular parts of Lake Kivu will also benefit tourism development of Rwanda. This road therefore  - 37 - has an important regional development dimension, enhancing other support provided under IDA financing. B. Area of Influence of the Proaram and Beneficiaries 5.05 The roads selected for periodic maintenance and for upgrading (Gitarama-Kibuye) directly serve densely populated areas in the northern and western parts of the country and in the main coffee-growing areas. The maintenance program will have a positive impact on virtually all parts of the country. The main immediate benefit of the rehabilitation/improvement and maintenance program will be its impact in reducing vehicle operating costs (VOCs) (see Annex 5.1 for VOC, Annex 5.2 for the Gitarama-Kibuye road and Annex 5.3 for the maintenance program). Improved road conditions will allow better access to productive areas, provide cheaper and more reliable transport, arrest deterioration of road conditions and improve maintenance capability. Important benefits not quantified in the economic evaluation include reduced freight damage, accidents and travel time as well as better access to social and medical facilities. Except for the institutional development and transport components and for routine maintenance operations and supporting MINITRAPE services for which no separate rate of return have been calculated, all the other program components (covering about 86% of the program) have been subjected to economic analysis. 5.06 The major direct beneficiaries of the reduced transport costs will be the owners and operators of cars, buses and trucks. Since internal freight transport is essentially free of regulation, it is expected that transport users and consumers alike would benefit from the resulting reduced transport costs. Avoiding rapid deterioration will prolong the lives of both the vehicles and the roads. Reduced fuel consumption would also result in savings, mostly in foreign exchange. The Government will also benefit (i) from savings through its ownership of vehicles and from deferred costly reconstruction and repairs, and (ii) from additional foreign exchange earnings with the improvement of the communal (rural) roads allowing the country to commercialize and export more coffee and tea at better prices. Lastly, by developing a local road construction and maintenence industry of SMEs, one can expect an increase in the utilization of labor in road works and therefore an increase in employment in this sector. C. Economic Analysis 5.07 For the maintenance (including resurfacing) of the main roads, including earth roads, the road sections of the program have been analyzed by groups of roads. The economic analysis of the road program is based on an assessment of costs and benefits "with" and "without" the proposed works. Both "with" and "without project cases assume basic routine maintenance is adequately carried out. Various scenarios for the level of main road maintenance have been developed. The analysis takes progressive deterioration of the road surface into account, resulting in an increase in VOCs (though at a slower pace in the "with" project case). Only savings in VOCs have been quantified for the analysis, except for the communal roads below, following the general methodology of the highway design model (HDM). Savings in road maintenance cost for the Kibuye Gitarama road have also been included. Benefits not quantified such as savings in time and reductions in potential freight damage represent substantial benefits which, if  - 38 - quantified, would increase the rates of return. The economic evaluation therefore underestimates the expected rates of return. 5.08 The economic analysis of the communal roads program is based on a different methodology. The pilot project for rural road maintenance and improvement will gradually improve the road network within each of the communes included under the project by providing a small unit with equipment and other external support. With this support and communal labor, upgrading and maintenance of a number of kilometers each year is fer3ible. A detailed work plan will be developed annually, or biannually. The economic case for this project component rests on the traffic and cost patterns of the roads in one of the prefectures (Kibuye) for which detailed traffic and cost data were developed. This information is representative of the situation in most of Western Rwanda, where many of the pilot project roads are located. The benefits for these roads are derived as the difference in transport cost between the current transport cost, including partial transport by head- loading, and use in the future by motorized transport after the project roads have been improved. The details of this analysis are in Annex 5.4. 5.09 In 1987, traffic volumes were mainly in the 200-1,000 vpd range for the paved network and in the 20-100 vpd range for the earthlgravel network. Traffic growth has been estimated at 4% p.a. for the road sections on the main highway system, on the basis of past traffic, vehicle fleet growth (Annex 1.1), fuel consumption (Annex 1.3) and population growth. 5.10 The economic analysis was carried out with costs in 1989 prices, net of taxes and duties. It was carried out over a 15-year period for rehabilitation/improvement works (both on the paved and earth/gravel network) as well as for resurfacing, and over a 6-year period for regravelling. The costs included in the economic evaluation comprise civil works, supervision and 10% physical contingencies. 5.11 The cost/benefit analysis which is detailed in Annexes 5.2 - 5.4 and based upon the above assumptions shows that the proposed program is economically justified. The ERR for the Gitarama-Kibuye road is 132 and the combined ERR for resurfacing and maintenance of the main roads is about 70% with the lowest ERR for these individual groups of road sections at 14%. The combined ERR for the improvement program of communal roads is expected to be about 13%. For the overall program of road improvements and maintenance, the ERR is 45%. Various sensitivity tests have been carried out, with returns ranging from 10 to 59% (see Annex 5.5). D. Risks 5.12 The proposed road components under the project would be subject to a number of potential sources of risk: Cost overruns on the construction of Gitarama-Kibuye road, delays in implementation of the road maintenance program, implementation problems associated with the communal roads pilot project, and some institutional and technical risks. As regards the transport components there would only be the minor risk of slight cost overruns for civil works.  - 39 - 5.13 The risk of cost overruns on Gitarama-Kibuye road has been minimized due to a properly done engineering design study and the availability of recent unit cost data from ongoing construction works on similar roads. 5.14 The proposed communal roads pilot project constitutes a risk in itself because as yet unknown terrain would be entered. However, this risk would be minimized by providing sufficient technical assistance for overall project implementation, by operating in five selected pilot sub-prefectures thus spreading the risk geographically, and by limiting the amount of resources available to the minimum needed in order to establish and field- test a new approach to communal road maintenance. The success of this project would also be subject to some institutional and technical uncertainties. The institutional uncertainties concern the future allocation of responsibilities for road maintenance, and the level of funding available for this purpose (Road Fund resources for national road maintenance vis-a-vis communal road maintenance needs). Technical uncertainties would concern optimal road surface treatments on national and communal roads, optimal periodicity of periodic and routine maintenance operations, and the extent of traffic growth and the benefits associated with it. 5.15 The most important measures in response to these risks would be: (a) intensive project monitoring and evaluation; (b) conditioning of disbursements on satisfactory prior performance and actions regarding maintenance on national and commur.al roads in particular; and (c) a possible mid-term review which would provide a formal mechanism for an orderly restructuring or discontinuation of certain project elements should that be required.  - 40 - Vi. AGREEMENTS REACHED AND RECONKENDATION 6.01 During negotiations assurances were obtained from the Government that: a. an annual PEP for the sector for the next three years be prepared and annually updated in consultation with IDA (para. 2.06). b. an Action Plan be prepared covering particularly the following: (para. 2.10) - remove obligation for certain products to use air transport to or from Mombasa (para 2.10); - new legislation concerning international transport (para. 2.10); - regulations changed so that consular clearance for truck transport from Kenya only be used for statistical registration (para 2.10); - a review of freight handling at Kigali airport be undertaken (para 1.20); - restructuring of Air Rwanda (para. 1.20); - a plan for privatization of STIR be undertaken (para 2.03); - signature of a performance contract for ONATRACOM (para. 2.04); C. the Action Plan be reviewed on an annual basis and updated or modified as necessary (para 2.10); d. a Manpower Development program for MINITRAPE and MINITRANSCO would be developed before the end of 1990 (para 4.22); e. arrangements for auditing are undertaken including the road fund (para. 4.30). f. resources from the Road Fund amounting to at least PRW 640 million (SDR6 million) annually would be used for road maintenance, with at least 10 percent for communal roads (para. 2.18). 6.02 Promulgation by the Government of the Presidential Decree on road reclassification (para. 2.19) would be a condition of credit effectiveness.  - 41 - 6.03 The following conditions of disbursements of funds against related expenditures would also apply: a. For the Gitarama-Kibuye road: that conditions precedent to the signature of financing agreements between the Government and EDF, OPEC, and Swiss Development Cooperation for this road have been fulfilled (para. 4.02); and a resettlement and expropriation plan (para. 4.34); b. for the transport component: that a contract, between the Government and an agency, acceptable to IDA, be made for operation of the shipyard on Lake Kivu (para. 4.11); and c. for the Communal Roads Pilot Program: that operating agreements have been concluded between the communes affected and MINITRAPE (para. 4.07). 6.06 With the assurances and conditions '!dicated above, the project is suitable for an IDA credit of SDR31.1 mill! a (US$40.0 million) to the Government of Rwanda.  - 42 - RWANDA Annex 1 1 TRANSPORT SECTOR PROJECT Traffic distribution for East Africa - 1987 (000) tons NORTHERN CORRIDOR Imports From From Oil Total Modal distribution Mombasa Region Imports rmports Road Rail Air To: Rwanda 84 48 82 214 210 4 Uganda 171 125 188 484 346 138 Burundi 17 5 46 68 68 Zaire 18 18 49 85 85 Sub-total 290 196 365 851 709 138 4 Exports To To Total Road Rail Air From: Mombasa Region Exports Rwanda 46 3 49 44 5 Uganda 125 125 13 112 Burundi 4 4 4 Zaire 43 43 43 Sub-total 218 3 221 104 112 5 Total corridor 1072 813 250 9 CENTRAL CORRIDOR Imports Dar-es- From Oil Total Salaam Region imports Imports Road Rail To: Rwanda 35 35 35 Uganda 36 12 48 48 Burundi 73 11 5 89 20 69 Zaire 14 14 5 9 Sub-total 158 11 17 186 60 126 Exports Total From: Exports Road Rail Rwanda 1 1 1 Uganda 48 48 48 Burundi 37 37 8 29 Zaire 46 46 11 35 Sub-total 132 132 20 112 Total corridor 318 80 238 SOtrHERN CORRIDOR Lake Imports Total transport To: Rwanda 6 6 Burundi 87 87 Total 93 93 Source: Great Lakes Corridor Study  RM)A Anmes 1.2 Trogwrt Soctor Project STATITICAL MOTOR VEHICLE FLEET iS4-im6 Averao Annual ---~-------------------------9---------------------------------------------1 Growth note Vehiclo Type 164 1986 1966 too? 1096 I (1964-199W) P"Gooe r Cars and Jepo 1 0,448 7,144 7,391 7,617 7,906 5.651 Pick-UPC and Mirnibue. 6,706 6.468 7,692 e,536 6,286 1 9.81 Truck* I 1,488 1,829 1,767 1,68 1,9369 7.7x Track/Traileo Ceobintio 1 471 57 00" 746 637 1 16.65 Bu"s 111 so e6 1 133 1 4.6% Special Vehicles 225 257 286 266 26 1 4.21 TOTAL t 14,479 10,143 17,733 16,054 19,427 t 7.63 I I Of which privately oeae I 11,6l1 12,941 14,296 16,0S9 16,490 t 7.6% Of which publicly oned I 2,60S 8,202 8,485 8,706 8,937 I 6.21