Sierra Leone - Road Rehabilitation and Maintenance Project

cgz~ z , / - -A 'L ^ Documwt of The World Bank FOR OMCIAL USE ONLY MICROFICHF CoPY Report No.:P- 5,882 sr, Type: PM) Title: ROAD REHABETLITATION AND MAINTE Author: PANKAJ, T RNa No. P-58$2-SL Ext. :34567 Room:.J6.49 Dept. :AF41N MEI(ORANDUM AND RECOMMEDATION OF TME PRESIDENT OF THE ITERNATIONAL DEVEOPMENT ASSOCIATION TO TIE 5ECUT1VE DIRECTORS ON A PROPOSED CREDIT iN THE AmoUNT EQUIVALENT TO SDR 32.0 ILLION TO THE REPUBLIC OF SIERRA LEONE FOR A ROAD ABILITATION AND MAINTEANCE PROJECT NOVEMBER 25, 1992 Ths documet hk a restricted distribution aWd may be used by recipiekts only in the perforance of their official duties. Its contents may not otherse be disclosed witbout World Bank authorization.  CURRENCY SOUIVALENi S Currency Urit Leao (.e) Le 1.00 = US .002cents US$1.00 Le 500 Le 1.0il iaon US$2,000 WM S AMD MEASMURS: METRIC SYSTEM meter (m) = 3.28 feet (ft) I hectare (bs) = 2.47 acrs 1 klometer (km) = 0.625 mile (mi) I metric ton (t) 2,205 pounds (lb) ABBREVIATIONS AND ACRONYMS AfDB Africa Development Bank ADT Average Daily Traffic CBD Central Business District DOW Departmet of Works DTC Depatment of Transport, Commications and Tourism Dll Dpartmet of Trade and Industry EC European Coimnity FBC Fuoabay Bay College (OSL Government of Sierra Ie ILO kItemational Labor Orgaization IPAM Institute for Public Administaton Management JICA Japan International Cooperation Agency NGO Non Govement Organizio NMT Non-Motorized Transport PPAR Project Performance Audit Report RIC Ronstruction Iport Credit RRMP Road Rehabilitation and Mainean Proect RTC Road Transport Corporation SLA Si-ma Leone Airways SLAA Sierra Leone Airport Authority SLNSC Sierra Leone National Sbipping Company SLPA Sierra Leone Ports Autbority SLPMB Sierra Leone Produce and Marktng Board SLRA Sierra Leone Roads Autority UNCTAD United Nations Confernce for Trade and Development UNDP United Nations Development Progrmme UNDTCD United Nations Department of Technical Cooperation for Development USAID United States Agency for Itrnational Development FISCAL YEAR July 1 to June 30  FOR OFFICIAL UKE ONLY REPWUILUF SRALEON ROAD REEHABILffATION AND MAMMlANCE CJT CRTAND PROECrMR IgJr.owff: Republic of Sierra Leone Sierra Leone Roads Authority (SLRA). Amount: SDR 32.0 million (US$45 million equivalent). Terms: Standard IDA terms with 40 years maturity. Rel k!d:R To-ms.- Grant from Borrower to SLRA. Finane Plan: Do=o US$ million % IDA 45.00 48.5 UNDP 5.69 6.1 JICA 5.00 5.4 EC 11.85 12.8 A.DB 14.35 15.5 GOSL 10 8S 7 Total 92.74 100.0 Eonomic Rate of Rd=: 30% Staff Apprsia Repor: No. 11175-SL IBRD No. 23597 1993-96 Proposed Trunk Road Rehabilitation Project IBRD No. 24003 Freetown CBD Road Rehabilitation Program This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwis be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMEDATION O'P THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE DIECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF SIERRA LEONE FOR A ROAD REHUARAJO AND MAITEANCEPROJECr 1. I submit for your approval the following report and recommendation on a proposed development credit to the Rqeublic of Siefra Leone for SDR 32.0 million, the equivalent of US$45 million, on standard IDA terms with a atryof 40 years to help f ce a road rehabilitation and maintnce project. The project is expected to be cofivanced by UNDP (US$5.69 million), lICA (UJS$5.00 million), EC (US$11.85 million) and Afl)B (US$14.35 million). 2. Backgiound. Sierra Leone is a small country with a relatively simple transport system which prinuaily consists of the road network. Its railway was closed in 1973; there is little inland air or water transport; and it has an intenational airport and a port at Freetown. The country has about 1,300 kms of paved roads, and 10,000 kms of unpaved roads including about 4,200 kms of rural feeder roads. The road network is in a state of near collapse due to prolonged lack of maintean; a good part of the network needs heavy rehablitation or recnruction while the remaining part needs immdiate preventive mainteance. Farming activies, marketing, and exports, all suffer due to the bottlenecks in the road system. 3. Most of the past failures in the road system occurred due to inadequate Government fwding (meeting only about 5% of maienance needs), and due to weak instions; road mnanagement was the responsibility of the large Ministry of Works (recently renamed as Department of Works (DOW)) which had multiple functions, with inadequate atontion and resoures for road maintenace. Since 1989, GOSL has launched, with interational support, a structura adjustment and economic recovery program, with changes from past policies, focussing on crticat reforms in policies, institutions, financia management and budgetig, icludIng reforms in the road sector. Governm has realized that removing the physical how lime", particuarly through road rehabilitation, is the key to producing the supply response expected from macro-econoz-Uc policies. GOSL has therefre requested fnancial assistance from IDA and other intational agencies to support its program for road and oter t port rehabiitation and for strengthening related instituions. 4. Government has aleady taken, during 1989-92, up-front actions in: (a) setting up a semi-autonomous Sierra Leone Roads Authority (SLRA) to take charge of the road sub-sector for which an Act was passed by Parliament on February 27, 1992, with its Board and Director General appointed in August 1992, and for which other actions to make it fully operational by March 1993 are in progress; (b) establishing a Road Fund dedicated to reguiar road maintenance and fiuded from road user levies, collected in addition to the fuel tax; and (c) ral road useharges sufficiently (thrugh a 100% increase in fud price to about US$1.80 per imperial gallon) to recover finds adequate to maintain the total networl. hese meaures will Improve sector mangement and help prevent a recurrence of the falure of past investments in the road sector. However, the Government requires (a) urgent financa suwort for capital works in road rehabilitation and deferred m tenance for which a swven- year program is envisaged; and (6) technical assistance and other support for planning, supervision, and institutional strengtening and capacity building of the SLRA to improve road sector and maintenance management.  2 S. Pric Objec . The main objectives of the project are: (a) to remove physical bottlenecks in the country's tsport network, in order to promote supply response from the economic recovery program, hough a sustainable road rehabilitatlon and maintenance program; (b) to bufld institutional capacity to better plan and manage the repair and maintenance of roads, and promoting a sustainable system for fimding road maineance; (c) to strengthen taport sector institutions to improve sector management, planning and to foster market-oriented policies; (d) to encourage new methods of infrastructure rehabilitation and maintennce, using appropriate labor-intensive technology and local resources, in order to nrease emplo)ment generation and to provide sustainable maintenance systems; (e) to increase the share of private sector participation in road maintenance, and develop capacity of small-sized contractors to maintain the road network; and (f) to promote the use of non- motorized transport (NMT) to reduce headloading by women and to increase rural mobility, improving transport services available for the rural poor. During implementation the achievement of project objectives and physical targPets will be monitored using appropriate performance indicators already agreed with the Borrower during negotions. 6. Pro Desc . The main project components are: (a) road rehabilitation and maintenance, covering the first four-year time slice of a seven-year program to catch up with past maintenance and rehabilitation backlogs, covering rehabilition of about 490 kms of runk roads and 20 kms of city toads in the Freetown Central Business District, and maintenaince/repaw of 2800 knms of trunk roads (77.2% of total project costs); (b) strengthen- Ing road maintenance institutions by supporting the new SLRA through technical assistance, rain, essental minte equipment and logistical support (15%); (c) office equipment, and ficilities to support DOW (.3%); (d) supporting the Deparnt of Transport, Communications and Tourism to improve tansport planning and policies through technical a;ssistance, trang and key sector studies (.6%); (e) assisting communities, through NGOs, to increase the use of low-cost non-motrized transport (NMI) (mainly bicycles and bicycle- trailers) to improvwe tansport services for the poor (.9%); and (t) technical assistance for project design and supervision (6%). Schedule A gives the summary of estimated costs and financn plan. The amounts and methods of procurement and disbursement, as well as the estimated disbursement schedule are given in Schedule B. A timetable of key project processing events and the status of Bank Group operations are given in Schedules C and D, respectively. A map of Sierra Leone is also attached. The staff Appraisal Report No. 11175- SL, dated November 25, 1992 is being distributed separately. 7. P. The project cost is esdmated at US$92.74 million equivalent, of which US$74.68 million is in foreign costs. The following financing p'an is expected: IDA US$45.0 million; African Development Bank US$14.35 million; European Community US$11.85 million; Japan (JICA) US$5.0 million; UNDP US$5.69 million; and Government of Sierra Leone US$10.85 million equivalent Cofinancing arrangements are in progress, and are expected to be finalized by June 1993. The road componen are discrete items and any delay in their cofinancing arrangements will not adversely affect the IDA-funded cmponents. The main Jointy-fuded component is instittional and logistical support to SLRA which is expected to be financed by IDA, EC and UNDP. EC and UNDP have already provided some intial inputs, and their formal commitment to finance the remaining inputs to these ponents is to be obtined by Government by January 1993. 8. Project Implemeno. MmThe project will be managed and coordinated by the SIRA, assisted by a team of experts, including a project coordinator. Training of local contracors will be achieved in collaboration with ILO. The Freetown roads component will be  3 implemented by the SLRA In consultation with Freetown City Council whose capacity will be built up under the project. Selected NGOs, mainly Plan Internatonal, an internationa NGO In Sierra Leone, wi Implement the component on support to loca communities for NMT, under SLRIA coordination. lhe Depatment of TranspoRt, Commnications and Tourism will implement the transport sector planning and studies component In coordination with SLRA. Project preparation is well advanced with detailed engineering for road works recendy completed under a Japanese Grant and PPF Advance. Bids for major wotks are planned to be invited in January 1993, and award of main contracts expected in June 1993. 9. Pjt Sustainabir. Improved orgizational structure, assured funding and greater involvement of the private sector for road maintenance are the three key factors that are being addressed by the project to enhance sustainaility. The SLRA has been set-up and a Road Fund has been established, funded from road user levies. The project will further strengthen the Roads Authority and help ensure regular flow of funds for maintenance. The development and taining of domestic contractors and promotion of labor-intensive technology wiUl enhance efficiency, sustainabiity and the cost-effectiveness of road maintenance operations in the future. 10. Lessons from Previous Bank Involvement. Bank has finamced only two operations in the roads sector in the past. The First Highway Project (1971) involved mainly the construction of new roads, while the Second Highway Prtoject (1981) focused on rehabilitation and maintenance of 800 km of trunk roads. Two types of problems affected performance and caused partial failure of these projects: weak institutions and inadequate funding for Govermnent counerpart expenditure and for follow-up maintenance. The proposed project and its funding and imple tion aements (establishing and strengthening of the semi- autonomous roads authority, Road Fund, and maintenance by contract) are designed to prevent a recurrence of these problems (paras 9 and 12). 11. Ri fgr IDA . The project will strengthen the country's economic recovery progam, which IDA is supporting through a Reconstuction Import Credit (RIC), Credit No. 2352-SL, which became effective on April 15, 1992. The country strategy recognized that imprement in the condition of the road network is crucial to economic recovery and development. The transport sector needs support from many external donors, and the proposed project would provide a basis for agreement on investment priorities. It would also play a catalytic role In attracting cofinancing. The proposed project is, therefore, flly consiste with the Country Asistance Strategy discussed by the Board in April 1992. 12. Aed Actions As noted, Government has already taken actions during the preparation of the project in reorganizing road sector institutions, making appropriate management and finding arrangements, through the establishment of the SLRA, setting up a Road Fund with assured flow of funds and raising road user charges to adequate levels. Major macroeconomic policy changes and public enterprise reforms have been agreed under the RIC. D e g _ further agreemens were obtaied from Government and SLRA on the folowing key items: (a) to ensure a smooth flow of a core level of funds to the project and to the maitenan program, the share of the collected road user charges would be automatically assigned on a weekly basis to the Road Fund in the form of a Road Fund fee, and its value would be maintained in real tems (n December 1992 prices), at the level of at leat 20 US cents equivalent per imperial gallon of gasoline and diesel up to December 1998; (b) agreed amounts would be provided to SLRA every quarter, (amounts were agreed during negotations and would be reviewed annually in April/May), as topping up from budget, to  4 spplement the Road Fund to adequately cover al road mintenance, rehabiitatlio and SL;RA recurrent expediture; (c) an adequate level of recovery of road user charges to meet ftis maintenCOe needs (estfmated at US$20 million in 1992 costs) would be maintine; (d) six monthly fcial and work verification audits of Road Fund and other SLRA funds would be conducted by Independent auditors acceptable to IMA; (e) guidelines for use of Road Fund prceeds will be agreed before January 31, 1993; (t) the share of road maintenance through pdve contracting would be progressively increased to at least 50% by 1996; (g) studies to review functionslreorganization of the Road Transport Corporation (RTC) would be conducted by June 30, 1994, and reviewed with IDA before September 30, 1994, and agreed actions would be implemented according to an agreed schedule; (h) annual transport sector investment would be agreed with IDA, and IDA would be consulted on any Pew transport projects cosdng individually more than US$3 million outside the agreed plan; (i) SLRA wil appoint by March 31, 1993, on its staff, an engineer in charge of assessing and monitoring environmenal lmpac f road projects; d) Government will obta by January 31, 1993, letters of commitmentitent from EC and UNDP to finance technical assisteace to SLIA; and (k) a mid-term review of the project would be conducted before June 30, 1995. Conditions for credit effectvns include: (a) completion of key appointments (Department Heads and 250 staf, including appointment of chief financial adviser and accountant; (b) appointmen of exteral auditors to audit the accou and works under the Road Fund and other SLRA fumds from July 1992 to June 1993; (c) appointment of a project coordinator, and of engineering consultants for supervision of works; and (d) payment of an initial amount of Leones 200 million into the ProjAc Account 174 . EwfiuPnme nw AMM. Since the project consists mainly of rehabiliat exisng romIs, there are no major concerns for environmental impacts. Potential concerns Involve temporary disruPti during constuction, improper revegetaton of embakments and borrow pits, and soil erosion and gdly formaions resulting from poor design of drainage. These aspects are being taken into consideration during the design and construction phase of the rehabilitation works, and a midgation plan has been agreed. Positve environmental effects are epected to result from improveme in city street drainage and traffic flows. An evionmental has been completed recendy (Category B). To enhance institonal capacity for dealing with roads related environmental issues, the project will support training of an SLJRA engineer in environmental impact studies and help establish an enironmental unit within SLRA. 14. Progm OWective Ceg s The whole project would help reduce poverty by Imrving tanort services for people and goods, and components (c) and (e) (para 6), in particlar wil help improve employment and incom3 of the poore sections of society and women. In addition, the project would contibute to development of the private sector in road construction and mainenance through training of domestic conactors and through incresing the share of road works undern by contrc. 15. jet Bofits and Risks. The main benefit from ihe project would be a more efficient and ost-effective hihway sector that permits a higher level of economic activity. Economic returns for individual road improvements are esmated to range between 18-98%, and the composite weighted average ERR for all project components is 30%. A 10% incase in project cos or a 10% decrease in benefits would reduce the ERR to about 27% i each ce. Ihe main rik is a repettion of the Govemets past faure In prov g regular couxQn funding and adequat project management. These risks have been mimized by (a) settig up a semi-autonomous SLRA to manage the road sector in gene and such  S projecs in partialar, and (b) legislation seting up a Road Fund and the increase In fuel taxes which should provide reguiar fAdig from the point of collection to the Road Fund account. The propose provision of tehnical assistance and training to SLRA will help build up a strong proiect management capacity. However, a thorough supervision and monitoring of ptoject progress iS called for, and will be provided. 16. Recoendao. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve it. Lewis T. Preston President Attacments Washingt, D.C. November 25, 19  6 SdheduleA REPUBLIC OF SIERR EN ROAI BEHABU_TATION AND MAINTENANCE PRO. ESIMATED C0S'" AND FINANCIAL P ESTIMATED PROJECT COSIS Loca Fign Total (US$ million) Road Rehabilitation & Maintenance 11.26 48.69 59.95 Institutional Stengthening (Roads Sector) 1.36 11.01 12.37 Support to Department of Works 0.01 0.26 0.27 support to Transport Sector 0.05 0.46 0.51 Pilot Program for Promoting Non-Motorized Transport 0.07 0.64 0.71 Project Design and Supervision 0 4Q 4.44 A4M9 Base Cost (mid-1992) 13.25 5.0 2L7 Physical Contingencies 1.23 6.25 7.48 Price Contingencies 3.58 2.93 6.51 Total (1) IL%~ 74.6 92.74 (1) Includes US$6.02 million in taxes and duties. FINANCING PLAN Lal Foreign ToI L(US$ million) IDA 5.95 39.05 45.OC UNDP 0.10 5.59 5.69 JICA 0.00 5.00 5.00 EC 0.50 11.35 11.85 AfDB 0.66 13.69 14.35 SLRAIGOSL 1S0. Total  7 P*p lof2 RlOAD 1EUATA= ND MNMNIAZi PROJC A. Summ= of tlWoM rocurnentA=g= JM Shm n.rthesesll ZUSS ufia Component lCDB LCB Other N.B.P. (a) Total 1. civil Work 35.2 7.7 26.5 69.4 33.1) (4-7X e7.8 2. Bquimmt and Vehes 0.S 0.5 0.9 6.7 8.6 (0.4) (0.3) (0.8) (1) 3. Tchal Assitac --Po Impumait 4.7 2.0 6.7 (4.4) (4.4) - Capmy Duid 0.9 5.3 6.2 (0.8) (0.8) 4. TninigandC Otr Suppos 0.6 1.2 1.8 (0.5) (0.5) Tot Project 35.7 8.2 7.1 41.7 92.7 (33.5) (5.0) (6.5) (45.0) (a) Not Bank manced.  8 Page 2 of 2 B D isbursent by Ctgo IDA Amout % of xpenctu C.Jegory (USoa( =ml ) to be lAwnei 1. Road RbgUlnMi asmw (icludinag isutitut suppotto DOWJSLRA) (a) Civil works 34.12 100% of foren costs and 85% of local Coas (b) Equipment and mateials, inoluing vehicles 0.90 100% of foei and 90% of lodal cost (c) Consul services, auditing services, studu 3.15 100% and ovesas tnIng (d) Locl traiaig 0.2 100% (e) Incre_me recurnt costs I . 0.08 100% Id $uDDo to Tnulsort Szor imom MMTC (a) Office equipmec, failities, matedials, 0.05 100% of freig ihuding vehicles - ad 90% of local cos (b) Consul nt , stbdies and taining 0.41 100% (a) Equipmen mew'", icluding vdeils 0.55 100% O) Tch asisnc and taiig, ancluding demonstation progams and program manamt svies 0.07 100% (a) Support to NMO 0.05 100% (d) b_neal recrr cost 0.02 100% IV.RWofPPPA 0.90 V. U 4.50 TOTAL 45.00 J _Incremental unt cos of project unit, vehicle opeaing costs, offc supe, Offic operating coos; and prcjet reated tavel cxpen and sAff aeqess, but cwluding sai to Govenme officials. V Inremenad reurnt cost rIeaed to piot progam u aL. ;u including vehicle operding costs, office opatin cost, offic supplies, and ff expnes, but excluding saries to Goveamen offcish. C. Etmated IMA DisbursementSdauh (USS moon) Fiscal Year (July-June) E-1Y9 EYI FY199S FY1996 EY1997 FlY1 Anmua 0.80 5.40 11.50 11.40 10.10 5.80 Cumulative 0.80 6.20 17.70 29.10 39.20 45.00  9 Schedule C RWIB OF K SIERRA I3NE ROA RERABLlTAl=O AND MADUNME POlC (a) ?Sme taken to prepare the project: one year (b) Preparod by: Government with IDA assistance (c) First IDA mission: September 1991 (d) Appraisal mission 1: April 1992 (e) Negotiat,