Burundi - Transport Sector Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 7848-BU STAFF APPRAISAL REPORT REPUBLIC OF BURUNDI TRANSPORT SECTOR PROJECT FEBRUARY 28, 1990 Infrastructure Operations Division South-Central and Indian Ocean Department Africa Region 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.  Currency Eqauavlent Currency Unit Burundi Franc (F6u) USS 1 FBu 156 !ejjhte and Measures 1 kilometer (km) = e.62 mile 1 quare kilometer (k*2) a e.a86 sq.ile Oloeary of Abbreovtiotns and Acronym AfDB Aft Scan Development Baitk AGCD Adm. nistration GAn6rale de la Coop6ration au D6veloppoment (Belgian Aid Agency) BEI Budget Extreordinaire et d'Inveetistsment (Investment Budget) sO Budget Ordinaire (Recurrent BudGet) BRB Banque de la R&publique du Burundi (Central Bank) CCCE Caisse Centrale de Coop6ratton Economique (French Aid Agency) CGR Cellule do Gestion Routire (Road Planning Unit) CIF Cost Insurance Fret DAF Direction Administrative et Financi4re (Department of Administration and Finance) DOR Direction G6n6rale des Routes (General Directorate for Roads) DOT Direction On6raledesTransports, Postes etT4l6communications (Gerkeral Directorate for Transport, Posts and Telecommunications) DSm Dar-es-Sa leam DTE Direction Technique do I'Exploitation (Department of Maintenance) DTEC Direction Technique dos Etudes et Contr8l- (Department of Design and Control) EEC European Economic Comiimunity EF Entreprise publique (public enterprise) EPI1 Explo;tation du Port do Bujumbura FAC Fonds d'Aide et de Coop6ration (French Aid Fund) FED Fondo Europeen do Development (European Development Fund) GTZ Aid Agency of the Federal Republic of Germany 14DM Hlghway D"ign and Maintenance Model INTRACO International Transport Company kfW Kreditanstalt fuer Wiederaufbau (Federal Republic of Germany Aid Fund) LNTP Laboratoire National dee Travaux Publics (National Laboratory of Public Works) MAE Ministhre d I Agriculture et de I 'Elevag (Ministry of Agriculture and Livestock) MTPDU Minist&r- dos Travaux Publics et du Dlveloppent Urbain (Ministry of Public Works and Urban Development) MTPT Ministbre dos Transports, Postes et T&lIcommunicotions (Ministry of Transport, Posts and Telecommunications) NCTA Northern Corridor Transit Agrement OTRABU Office des Transports du Burundi (Freight Transport Company) OTRACO Office dos Transports en Commun (Passenger Transport Company) PEP Public Expenditure Program FIU Project Implemntation Unit PTA Pr-fereni.ial Trade Agreement SAL Structural Adjustment Lending SETEtU Municipal Technical Services SME Small- and Medium-Scale Enterprise SOE Statement of Expenditure SRD Soci6ti R6gionale de DHveloppsment (Regional Development Company) TRC Tanzania Railways Corporation VOC Vehicle Operating Cost vpd Vehicle per day Fiscal Year January I - December 31  FOR OMCIAL USE ONLY BURUNDI Transport Sector Proiect STAFF APPRAISAL REPORT Table of Contents Page No. Credit and Project Sunmmary I. THE TRANSPORT SECTOR A. Geographic and Economic Setting ..... ................... B. The Transport Sector ........ . .. . ....... 2 (i) Main Policy Issues and Institutional Constraints.. 2 (ii) The Transport System....... 3 C. The Road Sector. ......... 7 (i) The Network. . . ..... 7 (ii) Road Use. ........ . .. 9 (iii) Organizational Structure, Staffing, Training .... 11 (iv) Financing and Road User Charg es . . 12 (v) Planning. . r. . ..... ... 13 (vi) Engineering, Construction and Maintenance ....... 14 D. Past Bank Group Involvement in the Transport Sector .... 15 TTI THE PROTWVT Objectives ............. ..................................... 18 A. Transport Component ...... ................ . ........... 18 B. Road Component .* .............. ...... ... 19 (a) Road Rehabilitatioa and Maintenance Program ...... 20 (b) Rehabilitation and Maintenance of Coffee Roads ... 21 (c) Institutional Strengthening ........ .............. 22 (d) Feasability Study for an Equipment-Renting Pool ... 25 C. Cost Estimates ................................ ............ 25 D. Economic Justification of the Project .. ............... 2: E. Project Financing . .. .......................... .o ..... 27 F. Implementation and Procurement ............ ............. 28 G. Disbursement ........................................... 30 H. Accounting, Auditing and Reporting Requirements ........ 31 I. Environmental Aspects .................... o............. 32 J. Poverty Alleviation Aspects ....................... . 33 This report is based on the findings of an appraisal mission which visited Burundi in January/February 1989; members of the missions were J.J. Raoul (Highway Engineer), E. Bidaux (Research Assistant), B. Bostrom (Sr. Transport Economist), J.M. Lantran (Sr. Construction Industry Specialist), C. Lyle (Financial Analyst) and P. Taborga (Sr. Urban Economist). C. Tran-Luu (Consultant - Training Specialist) and J. Bui (Research Assistant) also contributed to the report. B. Chatelin (Sr. Economist) was lead Advisor for the appraisal team. This document has a restricted distribution and may be used by reciDients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Paste No. III. ECONOMIC EVALUATION A. General ................... oo 34 B. Area of Influence of the Project, Benefits and Beneficiaries ........* ......***............. 34 C. Economic Analysis of the Project ...................... 35 D. Risks o*oo.***o. o**.o***... ..... .o.... ..o..o.- 36 IV. AGREEMENTS REACHED AND RECOMMENDATIONS ......................... 38 Annexes I. Transport Statistics 1. Distribution of International Traffic by Route 2. Traffic in the Port of Bujumbura 3. Traffic of Air Burundi and at the Bujumbura International Airport 4. Statistical Motor Vehicle Fleet 5. Fuel Consumption and Prices 6. Estimated Road Traffic Volumes II. Regional Distribution of the Road Network III. Transport Sector Expenditures 1. Expenditures in the Highway Subsector 2. Expenditures in the Transport Sector (Roads excluded) 3. Transport Sector Debt vs External Public Debt 4. Public Expenditure Program for the Highway Subsector (1989-1991) IV. Revenues from Road User Charges V. Rehabilitation of Earth/Gravel Roads - List of Roads VI. Periodic Maintenance of Paved Roads - List of Roads VII. List of Road Equipment Requirements and Acquisition VIII.TORs for Technical Assistance for Management of Road Operations and Training in DGR IX. TORs for Technical Assistance in DGT X. TORs for the Road Planning Unit XI. TORs for Technical Assistance to the Control Unit XII. TOREs for the Feasability Study of an Equipment-Renting Pool XIII.TORs for studies in DGT XIV. Economic Analysis 1, Estimated Vehicle Operating Costs .. Summary Table of the Economic Evaluation of the Road Project XV. Project Progress Reporting Requirements XVI. Statement of Sectoral Policy XVII.Related Documents and Data Available In Project File Charts 1. Organization of MTPDU 2. Organization of MTPT 3. Project Implementation Schedule Mapn IBRD 21189: Great Lakes Region International Surface Transport Connections IBRD 21660R Burundi, Transport Sector Project, Road System  - iii - BURUNDI TRANSPORT SECTOR PROJECT Credit and Project Summary Borrower: Republic of Burundi Beneficlaries: Ministry of Public Works asid Urban Developmerst (MTPDU) and Ministry of Transport, Posts and Telecommunications (MTPT) AMunt:s SDR 32.7 million (US$ 43.2 million) Termss Standard IDA Terms Prolect Objectives: The project'l objectives are to: (i) reform transport sector policies to promote greater competition and price liberalization; (ii) develop planning capabilities within MTPDU and MTPT; (iii) consolidate, expand and improve maintenance practices, institutions and funding in the road sector including support for starting up the participation of the private sector in road maintenance activities and upgrading a selected road to paved standards; and (iv) provide support to coffee production en-d marketing through re-hablitnt4tn ar"d maintenance of acces& roads to the coffee production areas. These objectives are fully consistent with the Government's adjustment program implemented with IDA support. Proiect Description: The project will cover roads and transport, the responsibility of which is split between two ministries: MTPDU and MTPT. At appraisal, a four-year project (1990-1993) was designed to meet the country's priorities with pledges confirmed by donors during a Round Table held in Bujumbura in April 1989. It would have two components as follows: (i) institutional support to the General Directorate for Transport (DGT) including (a) technical assistance to assist in creating a transport data base, monitoring international transport, preparing adequate sector policies and reforming transport parastatals; (b) training; and (c) subsector-related studies and a provision to finance priority transport investments to be identified during the above studies. (ii) a four-year road rehabilitation and maintenance program including (a) periodic and routine maintenance of paved roads; (b) limited upgrading, rehabilitation and maintenance of unpaved roads of the main network, an increasing portion of which will be contracted out; (c) rehabilitation and maintenance of coffee roads; (d) subsector-related studies; and (e) institutional strengthening through the creation  - iv - within the General Directorate for Roads (DOR) of a Road Planning Unit and of a Control Unit for Maintenance Works, technical assistance and training. The proposed Transport Sector Project supports the Government's macroeconomic development strategy and structural adjustment program and conforms to its Public Investment and Public Expenditure Programs defined in coordination with IDA. It is also consistent with and supportive to IDA's following operations: the Small Scale Enterprises/APEX Project (Cr. 1889-BU), the Agricultural Services Sector Project (Cr. 2024-BU) and the Coffee Project under preparation. Benefits: Improvement in road maintenance and upgrading of selected main roads would facilitate transport of goods and persons countrywide, reduce vehicle operating costs and the need for costly rehabilitation in the future. Improvement of coffee roads would support coffee production and marketing, and contribute to the increase in foreign exchange earnings and farmers' revenues. Improving the institutional framework would ensure better planning and management practices in the sector. Improving external transport conditions through better road access and transport policies would lower overall transport costs for both imports and exports. The promotion of small-and*-medium-scale domestic contractors who will mostly carry out labor-based road maintenance operations would provide employment to the rural poor. Risks: Possible risks include the limited capabilities of the private sector for executing road maintenance works and possible shortage of local counterpart funds for the road maintenance components. These risks will be minimized by (i) the project providing for support to and gradual involvement of the private sector and (ii) the sectoral PEP review mechanism. Proiect Cost: The total cost of the project is estimated at USS 90.8 million equivalent with foreign costs of about US$ 57.5 million and local costs of US$ 33.3 million. The detailed cost and financing plan are in the following table.  - V - B5RIJNDI Transport Sector Project PROJECT COSTS ESTIMATES AND FINANCING PLAN (US$ million) Project Cost Estimates 11 Fozreign as Local Foreign Total X of total A. TRANSPORT CONPONENT 0.4 4.5 4.9 92% I. Institutional Strengthening 0.4 2.4 2.8 87% II. Investments 0.0 2.1 2.1 100% B. ROAD COMPONENT 25.5 38.6 64.1 60% I. Road Upgrading to Paved Standards 1.9 4.3 6.2 70% II. Road Rehabilitation 4.0 3.7 7.7 48% III.Periodic Maintenance 4.6 9.3 13.9 67% IV. Routine Maintenance 8.4 10.9 19.3 57% V. Coffee Roads 4.4 0.2 4.6 5% VI. Institutional Stengthening 2.3 10.0 12.3 81% TOTAL BASE COSTS 25.9 43.1 69.0 62% ===== ===;. ===- Contingencies (32% base costs) Physical (10% base costs) 2.6 4.3 6.9 62% Price 4.8 10.1 14.9 68% GRAND TOTAL 33.3 57.5 90.8 63% Financina Plan IDA 7.7 35.5 43.2 48% AfDB 0.8 6.0 6.8 8% AGCD 2.9 2.1 5.0 6% GTZ - 1.8 1.8 2% FAC - 1.4 1.4 22 OPEC, Japan, Italy 0.7 6.3 7.0 8% Government 21.3 4.3 25.6 28% Total 33.3 57.5 90.8 100% 1/ Costs are net of taxes which are estimated at FBu 473 million (US$ 3.05 million equivalent).  I. THE TRANSPORT SECTOR A. G