Somalia - Highway Project

R ESTR ICTED Report No. TO-431b ECONQ M I F T'-,;s report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK EOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF A HIGHWAY PROJECT SOMALIA December 10, 1964 ,2partrnent of Technical Operatc,a;s  CURRENCY EQUIVALENTS 1 Somali Shilling (S. sh. ) = U.S. $0. 14 1 U.S. Dollar = S. Sh. 7. 14 Fiscal Year July 1 - June 30  S O M A L I A APPRAISAL OF A HIGHWAY PROJECT Tt.BLE OF CCNiTENTS SU iIIARY Page I, INTRODUCTION 1 IIe BACKO.OUND 2 A. L3nd and People 2 B. Transportation 3 C. Development Plan 4 III, THE HTGSHWAY SYSTEM 5 A. Present Extent and Condition 5 B. The Public Works Department and Highway Section 6 C. The Vehicle Fleet 8 IV, THO PROJECT 10 A. General Descriotion 10 Road Construction 10 Technical Assistance & Maintenance 11 B. Summary of Costs and Financing 14 V. ECONQiEC JUSTIFICATION CF ROAD CONSTRUC"IION'I 16 A. Zone of Influence 16 B. Factors Affecting Agricultural Grorth 16 C. Economic Benefits 18 VI. COINCLIJSIO IS AND RECON EMDATIONS 19 TABLES.: 1. Public Works and Highway Maintenance Expenditures 1961-1964 ?2. Organization of Public Works Department 3. Gasoline Consumption h' 'Anr.. al Revenues from Road-User Taxes 5. Estimates of Project Cost 6, Design Standards MAP   SO3 ALTIA APPRAISAL OF A HI-rC.AY PROJECT SUMRY The Assoc4ation has received a request from the Government of Somalia o assist in financing a hiighlway project comprising:- a) the construction of a main road 200 km. long from Afgoi to Baidoa with a 20 km. feeder road to Uanle Uen, at a total estimated cost of US$8.6 mill'ioIn equivalent, which includes an amount of Us$0.6 million fcr final engineer- ing and supe,-vision of construction; b) the -rchase of highway maintenance and other equipment and the provision of an equipped office building for the Highway Section, at an estimated total cost of IUS$2.75 million equivalent; c) a program of technical assistance involving the organiza- tion and management of the Highway Section for four to five years, the coordination of transport investment, the feasibility studies of new roads, and the techn4cal train- ing of Somalis, estimated to cost a total of US.2.85 million equivalent. ii. The Government can contribute little towards the total project costs of US$14.2 million equivalent, but has been asked to meet certain local costs totalling about US$007 million equivalent and to make adequate financial provision for futuire road maintenance. The Government contribution would aiounlt to about 5 per cent of the total project cost while the balance of 95 per cent *rould be financed jointly by the Assoclation, the European Development Fund (FED) of the European Economic Community (EEC), and the United NationO Special Fund (U31SF). iii. This would be the first Bank/IDA operation in Somalia. A detailed financing plan has been agreed in principle by the participating agencies. The plan provides for an IDA credit of US$6.2 million equivalent which would be applied towards the cost of road construction. The FED contribution would be a grant of US$5015 million equivalent to finance the balance of the road construction and the related engineering services, the purchase of highway maLntenance and other equipment, and the office building. UNSF would provide US$2,15 million equivalent in thie form of a grant to meet the foreign costs of the technical assistance program. The IDa credit would not be effective until the conclusion of firm financing agreernents between the Government and the other participants. iv. 1load construction would be executed on the basis of international competitive bidding, while tne higiway maintenance and office equipment which is to be financed by FED grant would be procured from member countries of the EEC.  -ii- v0 Somalia has a population of some 2> million, 70 per cent of which is nomadic. The raising of livestock md agricultnre are the principal occupa- tions of the people, the majority of whom live at barely subsistence level; annual per capita income is about US$4o-45. vi. The road netwJork of Somalia is in its very early stages of deve- lopment, being about the lowest in density among East African countries. The Public Works Department of the Government contains virtually no highway organization. There are no railroads and no usable inland waterways. vii. T"he project road from Afgoi to Baidoa passes through the most important dry land fanaing areas of the country, producing over half the total sorghum wheat (durra) prodiction of the 6 southern regLons of the couiLtry. Due to a number of inter-related factors including poor transpor- tation facilities, agricultural production within the zone of influence has been stagnating over the past few years. With increasing population, the area could possibly revert from being arain surplus noo to becomin- grain deficit in the future unless some stimulus to production is provided. viii. The present road is little more than a track, in bad condition and impassable to traffic during and after the two annual rainy seasons. The new road would be 25 km. shorter, open all the year round, and would reduce vehicle operating costs per km. by over hO0%; it would take about 3l-- years to blild. The feeder road included in the project would link the village of Uanle Uen, which lies on the present road and is of importance as a trading center for nomads, with the new main road alignment. ix. The economic benefits resulting from the new road construction have been based upon conservative forecasts; those benefits which are most easily quantifiable represent a return of about 7-8 per cent on investment o-ver the road's useful life. This return is not high, but taken together with the expected stimulus to agricultural production and with other more intangible social and administrative benefits, it is considered to provide an adequate justification in a country like Somalia, x, The technical assistance program is an integral part of the proposed project; its objectives are (a) to build an efficient higlhway organization, staffed ultimately by trained Somalis, with special emphasis on highwray main- tenance, and (b) to assist the Government in its future planning and coordina- tion of transportation investment. xi. The project is suitable for an IDA credit of US$6.2 million equiva- lent, which would not become effective until firm financing arrangements had been concluded with the other participants.  SOi iALIA APPR.AIS.2L OF A HIGHWAY PROJECT I, INTRODUCTION 1. The Association has received a request from the Government of Somalia to assist, in financing the construction of a road 200 km. lon- from Afgoi to Baidoa with a 20 km. feeder road to Uanle Uen, including design and supervision of construction by consulting engineers. 2. The appraisal mission has recommended, and the Government has agreed, that the project should also include:-. i) a program of technical assistance including the organiza- tion and management of a Highway Section in the Department of Public lorks with emphasis on road maintenance, a study to coordinate short-term transportation investment, engineering feasibility studies of two high priority roads, and the techni- cal training abroad of Somalis for future service in the Highway Section; and ii) the purchase of road maintenance and shop equipment, and the provision of Highway Section offices. 3. This would be the first Bank or IDA operation in Somalia. A Bank/ IDA reconnaissance mission first visited Somalia in July/August, 1963, to study the general prospects for Bank/IDA investment and to identify possible suitable projects; the project road was considered to be of high economic priority. A second Bank mission visited Somalia in January, 1964, and con- firmed the previous mission's findings, although noting that the quaitifiable benefits from the project road were not high. The second mission also in- vestigated areas in which technical assistance might be useful to the Govern- ment, and, to assist in future programming, selected two other roads of apparent high priority for engineering feasibility studies by consulting engineers. The Association, the European Development Fund (FED), and the United Nations Special Fund (UNSF) discussed the possibilities of jointly financing the project, and in October 1964, a third mission, which included representatives of all three participants, checked cost estimates and dis- cussed all aspects of,the project with officials of the Government. Details of the project were further confirmed in November 1964, during credit negotiations in Brussels. 4. This appraisal report is based upon the findings of the three missions, a study of various reports on the Somali economy, and an engineer- ing-feasibility study of the Afgoi-Baidoa road by an Italian consulting engineering firm. Valuable assistance was rendered the second and third missions by agricultural experts engaged in a U1TSF land and water resources study in the general area of the project road.  II. PBWCKrf`OTITD A.. Iand and People 5. The Somali Republic (see Map) covers an area of aDproximately 640o00o sq. im. in the Horn of Africa (aprroxiiately the size of Burma or Spain and Portugal combined) running from 20 lat.itu.de south to 120 latitude north, coaifined to the east by the Indian Oc6an and to the west and south- west by Ethiopia and Kenya. Almost 40/h of the total land area is unusable, about half is generally suitable for raising livestock, ard only some 12% (or 80,000 sq. Ica) is arable. 6. Terrain and climate present a gradual progression from the high- Lands and nea.r desert of the iiort-Lern couitry to the com7aratively arable soils, gently sloping pla ns and more temperate climate in the south0 The country's location on the Equator and the monsoon winds prevailing over most of the year result in a climate of high mean temperatures, intense solar radiation, rapid evaporation, and two rainy seasons with an annual rain-fall frona 600 mm. to less than 100 mm. according to the region, with w'de and irregular seasonal and local variations. Groumd water supplies are moderate and often brackish, soils are subject to serious erosion from wind and water, and soil fertility is generally low except for land between the lower reaches of the Giuba and Scebeli rivers. 7^. A brief review of the economy of Somalia follows; for greater detail the reader is referred to Bankr Report Mo. AS-19a, dated 'lay 28, 1964. The basic geology of the country has offered little promise so far Of abundant ground-water or of mineral wealth. Iron ore deposits west and south of Baidoa are under investigation and the exoloitation of a large deposit of gypsum anhydrite in northern Sormalia near the port of Berbera is under consideration. Oil prospecting has been in progress for over 10 years but no comnercially exploitable deposits have been found as yet. 8. The country is sparsely populated; a total of approximately 21 million Somalis is unevenly distributed with the highest density around the capital, Mogadiscio, and the inter-river area. Although no accurate population census has been made, a figure of 1.5% net annual growth of population is generally considered reliable. The poDulation, unlilce that in many other countries of Africa, is largely homogenous in race, culture, language and religion. 9. Animal husbandry is the principal occupation of an es-timated 70%, of the total populatiion wiho are nomadic, covering large expanses of territory, mainly in the nortnern re,-ion, in search of pasturage and water for their livestock. The remaining 30a/ are engaged primarily in agricul- ture, mixed farming, and to a more limited extent in administration, small industries and commerce. The available labor force for large construction works, such as the project road, is limited.  lOo Town population, which is rising rapidly, totals perhaps 250,000 half of which is in the capital city. Education in the country is in the early stages of development. Schools are few, and 95% of the People are illiterate. The average per capita income is about U,140-45 equivalent. 11. The combination of unfavorable topography and climate has con- centrated population and economic activities in and around Hiogadiscio in the center, in the Hargheisa-Burao-3erbera triangle in the north, and in the Giuba Valley around Chisimaio in the south. These three almost inde- pendent economic coiinmulities and their hinterlands are widely separated iath little need for surface communication between them at this stage in the country's development, There is a need,however, for good transportation facilities within the three areas. B. Transportation General 12. Hlost of the people of Somalia still live in an initial stage of primitive transport which traditionally remains the camel, donkey and man. Roads are few and poor; air transport ns in its infancy; there are no railroads; and the country is singularly lacking in good natural ports. During the two seasons of rainfall each year, many rural areas, villages and towns may be completely isolated due to impassable roads. In the long dry periods, earth and gravel roads become so corrugated and dusty that normal transport is severely hampered. Existing Transport Facilities Roads 13. Soil conditions and periodic heavy rains make road facilities difficult to build and maintain in Somalia. The present road system, which is described in greater detail in section IIIA., totals about 12,000 km., half this length consisting of unmaintained earth tracks. HIotor vehicles totalled about 5,5oo-6,ooo in 1963, about L0%0 of which were trucks. Air Transport 1h0 Three international airline companies operate scheduled flights to Somalia (Alitalia, Aden Airways and United Arab Airlines); two small foreign companies operate charter fliglts. An agreement was signed recent- ly, between the Government, Alitalia and the Italian Government, creating the Somali Airlines Co;mpany which has now started small-scale domestic operations using three reconditioned DC3 aircraft. All airports and navi- Zational facilities, except for the airport of Hargheisa, are maintained and operated by the military forces. Only the airports near Berbera and Hargheisa (suitable for DC3 operation) and the airport near Mogadiscio, (suitable for DC7 operation) have all-weather runwaysr but none have night  landing fccilities,, Some 20 airstrips are scattered throughout the country, but nonc; of them are equiniped with navigaLional aids and all are inoperable during rainy weather. The number of passengers transported by air service on internal air routes is small and tlhe limited goods traffic is almost ex- clusively postal. Cca2tal ad -O-erseas Shipping 15. Of the four ports and 18 minor landing facilities which lie along the 1,800 Ian. coastline of Soralia, none can presently rece-ve ocean-going vessels along quays. Ships must anchor in the open seas, and all loading and unloading is done by lighterage. The four major ports - Mogadiscio, viIerca, Chisimaio, and Berbera - collectively handled about 350,000.tons of cargo in 1963, or 90% of the total import-export traffic. Particularly large have been the increases in cargo handled by iMogadiscio and the export of livestock through Berbera, some 10 and 20 respectively per year recently. Chisimaio and kIerca handle mainly bananas. 16. Except for native dhows and a smaall motorship, Somnalia does not have a merchant fleet as such. At the present time, the country is served by tramps, and on a regular schedule by three Italian Ehipping lines, one Dutch and one British East African line. Inland Waterways 17. The Giuba River in the southern region of Somalia flowJs the year round and offers some possibilities for the development of barge traffic on a small scale. Prospects for the economic transport of large quantities of freight on the river seem remote, however, inasmuch as a continuously dredged channel would have to be maintained over a substantial length of the river, the course of the river is extremely tortuous, and no port faci- lities exist at its mouth (Chisimaio port is located 20 km. south of the mouth of the Giuba River). Animal Transport 18. More than half of all trade in Somalia still movres on the backs of camels, donkeys and men. TTsually, the camel carries about 100 lcg. of assorted baggage about '30 km. per day. Trained burden camels are absolutely essential for transDorting the huts and baggage of the nomads as they move their sheep and goats to new pastures, and for fetching water from distant wells. A nomad family may own 10-20 camels on average. The donkey is a beast of burden used in townships and small permanent settlements and in tlhe difficult hill country inaccessible to loaded camels. C. Development Plan 19. A five-year develoxment plan was adopted in 1963 by the Somali Government, New investment in productive sectors as well as for basic economic and social services is envisaged at S. sh. 1,1O00 million (US$200 million) for the period 1963-1967, an annual average of some US$h0 million  - 5 - equivalent. Foreign aid is expected to finance the entire development pro- gram and Somalia has already secured commitments from abroad for financing over half the planned investment, maiily from the USSR, USA, anc gEC coun- tries. The following table gives the investment targets by main sectors:- Millions % ofTs. sh. of Total Transport )dO 30 Agriculture and Livestock 353 25 Agricultural Orocessing and Industry 200 1l Health and Education 122 9 Housingj Urban Development and Water Supply 115 8 Commerce and Banking 75 5 Surveys and Studies 46 3 Telecommunications and Power 41 3 Other 38 3 1400 100 20. The construction or improvement of about 2,700 km. of road is proi ided for in the five-year plan, including the construction of the project road from .h.fgoi to Baidoa. The plan also proposer a country-wide transportation study to establish a long-term policy for the development cf the country's overall transportation system. 21. Improvement of the airports at HIogadiscio and Hargheisa is included in the plan and work is already under vay. Six regional airports will also be built at Chisimaio, Baidoa, 3elet Ueny Galcaio, Bosaso and Burao at an estitated cost of US`7 million equivalent. The plan provides also for a substantial improvement of the three seaports at ?Togadiscio, Chisimaio and Berbera at an estimated cost of about US$24 million equivalent; work is already under way at Chisimaio, and is expected to commence shortly at Berbera. 22. Among the more important industrial projects to be established under the Government's development proc-ram are a new sugar mill at Giohar, a meat caninery at Chisimaio, a fish cannery at Las Khoreh, a milk process- ing, plt at iMogadiscio, and a cotton textile factory near Mogadiscio, with ,ri annual capacity of 8 million yards of grey, bleached and dyed cloth. k-ese five projects are expected to be in operation by 1966. III. THE HIGHIWA!Y SYSTEM ;. Present 7xtent and Condition 23. The ropK retwork of Somalia is in its very early stages of v-:l'rprent, t.e average density per sq. km. being about the lowest among East, A,fican countries. There are about 3000 km. of low standard main roads (of which only 600 km. are asphalt-paved), a further 3000 km. of  6- poor ;-avel and earLh seconda7,r, roads, and about 6000 km. of immaintained .n~h tracks. The riding qualities of all classes of road and track are -. he majority being imnassable during rainstorms. Most of the paved road- serve the larger towns such as 11ogadiscio and Hargheisa. Tio new asphal Q-r-aved roads are currently under construction. -.e 63 'ck. long f-om I fgoi to Scialambot, is being financed with a grant - .'c the Furope;r. EconoTnic CoiTiunity (EEC), and is being built by an -!-ian contractor. It will cost about S. sh. 25 million (NS$3.5 mil.lion) -:;er cc7pleted tc _.ids the end of thlis year, The relatively high cost for -:c ci-,ss of road and type of terrain (US$52,000 per km.) results partly from. -,.e need to adopt a line-stabilized-soil. method of construction because of the non-availability of conventional road-stone material. The cost also includes research expenditure into different types of surfacing and various treatments of shoulders anid side-s'Lopes. 250 The second new road is in the south, running 120 km. from the port of Chisimaio to Gelib, and is being finainced with a 3%, 20-year, German credit of DM 18.5 million and a S. sh. 1 million contribution from the Banana Infrastructure Fund 1/ The road is being built by a German contractor and should be completed by the end of 1965. Final costs are likely to be about DM 20.5 million (US$5rl million) or US$0R.000 o er km. 26. Miaintenance of the road system is bad due to lack of Government organization, poor management and inadequate equipment. A few enterprising private individuals have taken advantage of the situation and make a daily living by maintaining bad stretches of road, relying upon the benevolence of passing truck drivers for remuneration. D. The Public Works Department and Highway Section 27. The Public Works Department (R[JD), which is the largest depart- ment in the Miistry of Public WTorks, Conmmunications and Civil Aviation, is responsible for the construction and maintenance of Dublic buildirgs, water sunply and electric power, as well as public roads, Building acti- vities have increased rapidly in recent years and now absorb by far the bulk of the Department's technical resources. The Department has a total complement of about 50-60 clerical and 10 higher technical staff, only two of whom are graduated university engineers. Tw'o lower technical grade European surveyor-engineers provide some assistance on highways. 28. Excluding foreign aid, the past level of annual expenditures on public works (mostly on administration and maintenance activities) has been around S. sh. 27 million (US$4 million equivalent), less than 10% of this being spent on highways, mainly for maintenance (see Table 1). 2/ A' fund, made up mainly of contributions frqm banana growers used to - finance development works (including roads) which are intended to improve banana production.  - 7 - 29. Foreign aid projects are accounted separately in a special capi- tal budget. As mentioned above, two new roads are currently under con- struction costing a total of around S. sh. 61 million (US$8.6 million), and involving an annual expenditure of roughly S. sh. 20 million (US$3 million). Their design, construction and supervision is being carried out by foreign firms, and causes little drain on the technical resources of RED. 30. On the otlher hand, twelve major building projects with a total estimated cost of around S. sh. 200 million (US$28 million) including machinery and equipment are currently under construction or soon to be started as part of the Soviet-aid program. The Soviet s-istem involves contracting the Government, through the Public Works DejArtment, to execute the projects by force account. Advice is given by a few Soviet experts, and the PRJD is paid the cost of labor, materials, transport and overheads with local funds generated by the sale in Somalia of Soviet products such as cement, wheat, flour, steel, etc. Participation by PWD in the various projects averages about 2c; financially; in fiscal 1963, force account work to an estimated amount of S. sh. 1h-15 million (US$2 million) will be executed. This system of project execution is absorbing most of the limited technical resources of the AHD. 31. The HighwTay Section of the Public Works Department exists in name only for all practical Purposes; there is virtually no headquarter organiza- tion in Mogadiscio and only a few uncoordinated, poorly-equipped, inadequately staffed field offices, the latter forming part of the regional public works offices. The public works offices in the northern regions appear somewhat better organized and equipped than those in the central and southern regions. Highway activities are confined to elementary maintenance or construction of short access roads to foreign aid projects. 32. Central office accommodation in Iiogadiscio is cramped, the Ministry of Public Works sharing a small ancient building with two other Ministries. Any scheme to irprove the highway organization in Somalia should essentially include the construction and equipping of modern cen- tral highway offices with proper facilities for designing, drawing, account- ing and laboratory testing. Some improvement in regional field offices, shops and warehouses is also desirable, barticularly in the south. 33. Staffing a Highway Section would be a major problem due to:- (i) the present gross shortage of trained Somali technical personnel; and (ii) the limited availability of people having a minimum basic education for further training. 3h. Educational facilities are being expanded with the assistance of UNESCO under the Government's development program. Three new technical schools, sponsored by the USMR, Germany, and Czechoslovakia, are scheduled to be operational this year or early next year, and many scholarships are  -8._ being offered annually by various countries. Only five civil engineering graduates will be returning to Somalia during the next four years, however, and they will be free to select employment outside the Government service. A special technical training program abroad is essential, therefore, to train selected Somali personnel for future obligatory service in senior positions in the Highway Section. In the interim, it would be necessary to appoint foreign experts, preferably in the form of a consulting engineer- ing firm, to manage and be responsible for highway affairs. The Government has expressed its agreement to such an arrangement, and the U.N. Special Fund has agreed in Drinciple to assist in financing the training of Somali engineers and to employment of a consulting firmE, 35. The Civil Service Law and the organizational structure and estab- lishment of all MTinistries have recently been revised with the assistance of UNTAB. The proposed organizational chart of the Public Works Department seems satisfactory (see Table 2) but staffing allotments to the IHighway Sec- tion (Civil Ehgineering Service) are low, The Government has agreed to increase the Highway Section establishment to seven professional posts, with the final staffing being decided upon after review by the consulting engineer- ing firm appointed to manage highway affairs. C. The Vehicle Fleet 36. The low level of economic activity and poor roads in Somalia result in a small number of road vehicles - approximately 5,9OO - and a low vehicle density of 2.3 per 1000 inhabitants (compared to 6 per 1000 in the U.A.R. and 90 per 1000 average in EEC countries). The estinated composition of the vehicle fleet, excluding military vehicles, was as follows in 1963:- Central and Northern Southern Regions Region Total Passenger cars 2,800 500 3,300 Trucks 1.,472 550 2,022 Special trucks, (tankers etc.) and buses 152 50 202 Total motor vehicles 4,424 l,lOO 5,524 Truck trailers 360 n.a. 360 Total road vehicles 4,784 1,100 5,884 About 255 of the trucks are heavy trucks with a carrying capacity of about 6-7 tons, and capable of drawing a trailer carrying about 8 tons. In the northern region, trailers are not used with trucks because of the mountain- ous terrain. 37. The relative impprtance of transportation services performed in the different regions of the country, and the growth of road traffic in the central and southern areas can be seen from Table 3. It will be noted that  -9... the greatest transport activity is in the regions served by the project roads, and that the rate of gasoline consumption has increased by about 10U per annum in the past 7 years. 38. In central and southern Somalia, the majority of truck owners are members of cooperative trucking societies. Four such cooperatives control about half of all mediuim and heavy trucks in the country. The cooperatives assist their members in locating work, setting adequate rates, reducing unfair practices, and financing new acquisitions. Competition between the trucking cooperatives is quite keen. There seems to be no strong measure of government control and trucking rates find their level through the compe- titive forces of free enterprise. 39. The average price of gasoline in Somalia is US.49