Benin - Transport Sector Project

Report No. PID533 Project Name Benin-Transport Sector Project Region Africa Sector Transportation Project ID BJPA117 Implementing Agency Government of the Republic of Benin Ministry of Public Works and Transport (MTPT) B.P. 08-1159 Cotonou, Benin Phone: 229 - 31 46 64; 31 32 04 Fax: 229 - 31 28 51 Date Initial PID Prepared August 2, 1994 Date This PID Prepared November 28, 1995 Project Appraisal Date March 1995 Projected Board Date October 31, 1996 1. Background: Strategically positioned between Nigeria and the former French colonies on the Gulf of Guinea, Benin is a small, narrow country with a long history as a regional trading center. A natural transport corridor for landlocked Niger and western Nigeria, Benin+s highly open economy and low transport costs give it unquestionable advantages in the transit trade to and from the Sahel in spite of facilitation difficulties within Benin. Beninese traders are also well placed to play the intermediary between the huge Nigerian market and Benin's francophone neighbors. 2. Benin's prosperity depends heavily on trade and transport, and its transport sector is a major contributor to national income. The formal transport sector accounted for 8 percent of GDP in 1993. The transport sector is organized to meet three principal aspects of demand: domestic cotton exports, transit traffic and trade with neighboring countries, and internal trade between towns and rural areas. The emergence of a new political and economic environment beginning in 1990 created new opportunities to pursue and deepen reforms in the transport sector, and to reinforce its ability to meet economic challenges. These opportunities were reflected in studies carried out in 1992 by MTPT, completed in April 1993, which formed the basis for a new transport strategy, focusing primarily on facilitation, fiscal/financial and capacity building issues. 3. Project Objectives. In light of the objectives of Government+s reinforced overall adjustment strategy as supported by IDA+s SAL III, the proposed project focuses on infrastructure maintenance and rehabilitation, supporting rural production, encouraging private sector supply response, mobilizing domestic resources through user charges, and building institutional capacity. The proposed project would support activities required to ensure that existing road and port infrastructure function well at full capacity through the end of the century. The project also supports relatively new Government policies to increase  user participation in road maintenance finance and management, as in the case of rural road maintenance, and to facilitate private sector construction industry participation in maintenance works contracting, in particular for small urban improvements. 4. Project Description: The main components of the project are: (a) Port Operations and Management: civil works to decongest the port and support to the port authority; (b) Road repair, maintenance, safety and network management: priority civil works on inter-urban roads, primarily periodic maintenance and elimination of all trouble spots on the earth network, plus support to the MTPW; (c) Rural road rehabilitation and management; (d) Urban traffic management: road works required to improve road safety and traffic conditions in the city of Cotonou. 5. Project Financing: The total Project Cost is estimated at US$45.4 million. The proposed IDA credit of US$40 million will finance 88 percent of project cost net of taxes and duties. The local counterpart share of US$5.4 million will be financed as follows: (a) US$4.4 million by Government; (b) US$0.6 million by project beneficiaries; and (c) US$.4 by PAC. 6. Project Implementation: The project is expected to take about five years to implement and is scheduled for completion by June 30, 2000. Its implementation is linked to the implementation the five-year priority transport program of which it is a part, to be managed by an interministerial committee chaired by the Planning Ministry, and to be reviewed during biannual donor meetings that the committee would organize. Overall management of the proposed IDA project would be carried out by the Cabinet Director of the Ministry of Transport and Public Works. Individual components would be implemented as follows: the port component by the port authority, and all other components by the Ministry of Transport and Public Works through its Road Directorate, DROA. The urban works agency, AGETUR, created under the ongoing urban project (Cr. 2338-BEN), would be hired to carry out most works in the urban component. The municipality of Cotonou would finance and manage the Traffic Management Unit to be established under the proposed project. 7. Project Sustainability: Benin+s record of success in transport sector operations has now brought it to a position close to independence from external assistance, except for major capacity expansions. A major factor contributing to this record of success has been the unusual degree of continuity of Government technical managers through a number of changes of government. Provided there is no major disruption of technical management staff, project improvements should be sustainable. 8. Lessons Learned from Past Operations: Main lessons learned from past operations are as follows: (a) road maintenance must be funded by broad-based user charges, not general taxation, because the latter does not capture any revenue from the large number of informal sector operators; (b) a single sector strategy must be followed by all actors and donors; and (c) the involvement of users and operators is a major factor for the improvement of transport facilitation and efficiency. - 2 -  9. Poverty Category: To support the country