Chad - Highway Maintenance Project

FILE COPY RESTRICTED Report No. TO-645a This 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 The report may not be published nor may it be quoted as representing their views.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 FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF A HIGHWAY MAINTENANCE AND ENGINEERING PROJECT CHAD July 3, 1968 Projects Department  CURRENCY EQUIVALENTS Currency Unit - CFA Franc (CFAF) US$1 = CFAF 247 CFAF 1 - US 0.4 CFAF 1 million = US$4, 050 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES - Metric Metric: British/US Equivalents 1 Kilometer (Km) = 0. 62 miles (mi) 1 Meter (m) = 3.28 feet (ft) 1 Hec1are (ha) = 2. 47 acres (ac) 1 Liter (1) = 0. 22 imp. gallons = 0. 26 gallons (US) 1 Metric ton (m ton) = 2204 pounds (lb)  CTHAD APPRAISAL OF A HIGHWAY 1iAINTENANCE AND ENGINEERING PROJECT TABLE OF CCNTENTS Page No. SU3IARY 1. INTRODUCTION 1 2. BACKGROIThiD 2 A. General 2 B. The Transport System 2 C. Transport Coordination 3 3. THE HIGHWAY SECTOR 4 A. The Highway Network 4 B. Characteristics and Growth of Road Traffic 4 C. Highwfay Administration 5 D. Highway Financing and Planning 6 E. Highway Construction 6 F. Highway Maintenance 7 G. Highway I4aintenance Equipment 7 4. THE PROJECT 9 A. Description 9 B. Cost Estimates and Financing 11 C. Execution 13 5. ECONOMIC EVALUATION 15 A. Highway l4aintenance Program 15 B. Djermaya-Djimtilo Road 16 6. CONCLUSIONS AND RECOY1MNDATIONS 18 This report was prepared by Messrs. B. Irion and A. Pusar.  TABLE OF CONTENTS (CONTINUED) TABLE 1. Highway Classification for Southern Chad 2. Motor Vehicle Registration 3. Expenditures on Highways 4. Motor Fuel Imports and Road Fund Receipts 5. Target Current Expenditure Per Road of the Five-Year Maintenance Program 6. List of Equipment to be Procured and Cost Estimates 7. Personnel Requirements 8. Cost Estimates 9. Estimate of Recurrent Expenditure on.Highuay Maintenance and its Financing fro'm the Road Fund and Equipment Replacement Account 10. Estimated Vehicle COerating Costs CHART Organization of the Directorate of Public Works MAP CHAD: Highway System (Schematic Layout) CHAD AND ADJOINING CCIJNTRIES: Transportation Network  CHAD APPRAISAL OF A HIGH, TAY MINTETA70TCE AMD ENGINEERING PROJECT SY4AY i. The Government of Chad has asked IDA to help finance a project consisting of (i) a five-year program to improve highway maintenance, (ii) a feasibility study, including detailed engineering, of the Djermaya- Djimtilo road (82 km) and complementary lakeside facilities, and (iii) the establishment of a traffic data collection system for the main road network. The project would be the first for the Bank or EDA in Chad. ii. The five-year maintenance program includes the provision of equip- ment, spare parts, and materials, the extension and improvement of existing shops, and the training of operators and mechanics. The program is scheduled to start in mid-1968. IDA would finance the foreign exchange component, estimated at 85 percent or US$3.8 million of the total capital expenditure of US$h.4 million during the first three years of the maintenance program. The Government would meet the local costs of the capital expenditure of these three years, the total cost of equipment replacement in the last two years of the program (1971 and 1972), as well as the recurrent highway maintenance expenditures over the five-year period, these various items amounting to a total Government contribution of US$5.7 million equivalent. iii. The estimated benefits of the maintenance program, primarily savings in vehicle operating costs, yield an economic return of 11 percent on invest- ment which is satisfactory. In addition, there are administrative and other benefits which are not readily quantifiable. iv. An all-weather road linking Djermaya with Djimtilo, together with improved lakeside facilities, would markedly assist the transportation of fish and other products from Lake Chad to Fort Lamy. Consultants would carry out a feasibility study of improving these transport facilities, the detailed engineering of any necessary works,should their economic justifica- tion be confirmed, and initiate a program for collection of traffic data. The cost of these consulting services is estimated at US$0.4 million, of which IDA would finance the foreign component estimated at US$0.3 million. v. Responsibility for the project would be with the Directorate of Public Works (DPW), which is capable of executing the project satisfactorily. vi. The project constitutes a suitable basis for an IDA credit in the amount of US$4.1 million.  CHAD APPRAISAL OF A HIGHWAY MAINTENANCE AMD ENGINEERING PROJECT 1. INTRODUCTION 1.01 In May 1966, the Bank's Permanent Mission in Wlest Africa (PMWA) sent a project identification mission to Chad. It recommended that a feasibility study be made of the Djermaya-Djimtilo road (82 km), between Fort Lamy and Lake Chad (see map), and that road maintenance be improved. In February 1967, the Government submitted a request to the DA for assistance in financing: (i) a five-year program to improve road maintenance, and (ii) a feasibility study of the Djermaya-Djintilo road including complementary lakeside facilities, to be followed by detailed engineering if, as expected, the study proves the road to be technically and economically justified. During credit negotiations, a one-year program for establishing a system of traffic data collection was added to the project. The proposed credit would be the first undertaking in Chad by the Bank or IDA. 1.02 This appraisal report is based on the findings of an IDA appraisal mission consisting of Messrs. Irion and Pusar, assisted by Mr. Brochet from the PMWA, which visited Chad in February 1967. It includes information supplied by the Chad Directorate of Public Works (DPW) and its consultants, BCEOM, some of which was only recently received.  2. BACKGROUND A. General 2.01 Chad is a large landlocked country in the southeast part of the Sahara Desert and adjoining Savannahs in Africa. It has an area of approximately 1.25 million km2, or about twice the size of France. It is bounded by Libya on the north, Sudan on the east, and the Central African Republic on its south; its western neighbors are Cameroon, Nigeria and Niger. Its population, estimated at about 3.5 million, is growing at the rate of about 1.4 percent per annum. 2.02 The northern two-thirds of the country is desert with an annual rainfall of about 10 to 20 mm and is sparsely populated. The southern part has a rainfall of about 1,200 mm per year and supports most of the population. The country is mainly dependent on agricultural production, principally livestock, groundnuts and cotton. Seasonal flooding in the southern area impedes communications. 2.03 Chad's Gross National Product (GNP) was estimated in l965 at US$240 million equivalent, representing a per capita income of only about US$70. For the past few years there has been little growth in the GNP mainly because of a low rate of investment and a decline in world market prices of cotton. There is a large deficit in foreign trade. B. The Transport System a. General 2.04 Fort Lamyy, the capital of Chad, lies about 2,000 km from the sea and external transport problems dominate the economy of the country. Transport costs of gasoline and cement account for more than 35 percent and 80 percent of the retail price respectively, and for cotton more than 20 percent of its FOB export price. Recently, the fighting in Nigeria has increased the cost of Chad imports through Nigeria, affecting particularly fuel imports. On the other hand, improvements to several other routes out of Chad are either underway or contemplated. On the Cameroon route, the existing Regie des Chemins de Fer Camerounais Railway is being extended about 600 km further north, with the help of FED, FAC and USAID, and construction of a 150 km long all-weather road in North Cameroon is being financed by a German loan; the Bank is also financing engineering studies of the improvement of another 280 km long road section (Engineering Credit No. S 3-CM) on the same route. These improvements will be completed by early 1972 and will bring major savings in the costs of transport between Chad and the sea.  2.05 Internal transport is inadequate due to poor, insufficiently maintained highways and seasonal variations of water transport. There is no railway in the country. b. Highways 2.06 The highway system consists largely of tracks which were created under French colonial rule. These have been gradually inproved for vehi- cular traffic, Out of a total network of more than 30,000 km of roads or tracks, only 2,500 km are maintained regularly; the riding quality is generally poor. c. W 1aterways 2.07 W4ater transport, although seasonal, was more important in the past when the roads were primitive. It is now concentrated on the river Chari between Lake Chad, Fort Lamy and Fort Archambault, and accounts for about 5 percent of the total transport activity in the country. d. Arwa,yIs 2.08 Fort Lamy, the capital, has an international airport suitable for commercial jets. A local airline company operates a scheduled service between the four principal towns in the country. C. Trsport Coordination 2.09 The principal modes of transport for goods in Chad are highways and waterways. Due to a scarcity of capital, the available funds for investment in transport have to be carefully allocated between these two modes. The waterways, consisting primarily of the river Chari and its tributaries, meet the limited present needs of bulk transport on a seasonal basis but do not provide for the continuous movement of cargo traffic. Consequently, during the past few years the Government has concentrated investments in the transport sector on improving the Fort Lamy-Fort Archambault road. Future investments will continue to be concentrated on the improvement of the road network. The feasibility study of the Djermaya-Djimtilo road, to be financed under the proposed IDA credit, is a continuation of this transport policy.  3. THE HIGHWAY SECTOR A. The Highway Network 3.01 The highway network (for schematic layout, see map) consists of approximately 11,000 km of roads and 20,000 km of tracks. The northern part of the country is served mainly by tracks. There are about 8,500 km of classified roads in the southern part (Table 1) of which about 40 percent are all-weather and the remainder are passable only during the eight months of the dry season. 3.02 The four major towns of the country, Fort Lamy, Moundou, Fort Archambault and Abeche, are linked by the road network; the area around Moundou is important for cotton growing. There are also international road links with Cameroon, CAR and Sudan, (see map). All roads are either earth or laterite surfaced; FED is financing the first bituminous surfacing of about 230 km of the two most important roads serving Fort Lamy, namely Fort Lamy-Massaguet and Fort Lamy-Gelengdeng. B. Characteristics and Growth of Road Traffic 3.03 Highway transport, although still at relatively low levels, has expanded rapidly in the last decade and the vehicle fleet has more than doubled; in 1966 there were approximately 9,000 vehicles registered in the country. Table 2 gives the motor vehicle registration figures for cars, buses and trucks. Vehicles are mainly concentrated in Fort Lamy, Moundou and Fort Archambault. There are about 1,000 trucks owned by professional truckers; in 1966 these trucks carried about 300,000 tons of goods for an average haul of nearly 400 km. 3.04 The load factor for trucks is about 65 percent, which is reasonable given the volume of traffic and goods carried. Vehicle operating costs are relatively high because of poor road conditions, particularly in the wet season. Average costs per ton/km vary from US 5 cents equivalent on low standard earth roads to US 3 cents on good laterite or gravel roads. 3.05 No regular traffic counts have been carried out since 1963. At that time volumes were well below 100 vehicles per day. The map indicates the traffic distribution in 1963, which is also representative of the present traffic pattern although volumes have since increased by some 30-40 percent. Included in the project is a country-wide traffic count to be made by consultants in 1968/69. These counts would subsequently be updated on a regular basis, to provide a suitable basis for planning of highway maintenance and improvement. Traffic figures used in the preparation and evaluation of the proposed project have been estimated by assuming a 5 percent uniform growth rate based on the 1963 traffic figures, an assumption which appears realistic and which is supported by trends in fuel consumption, vehicle population, and local traffic.  C. Highway Administration 3.06 Responsibility for developing and maintaining the highway system rests with three public agencies. The DPW (see Chart) is responsible for most of the important roads in the southwest part of the country. The Fort Lamy-CAR border road (684 km) falls under the jurisdiction of the Agence Transequatoriale des Communications (ATEC), an international organization created by Corgo-Brazzaville, Gabon, CAR and Chad in 1961 for the specific purpose of being responsible for transport on the international route between Chad and Congo. The maintenance of this road is financed by government contributions as well as by tolls levied on water transport and profits derived by ATEC from port and railway operations in the Congo. Maintenance of the remaining roads and tracks is the responsibility of local adminis- trative authorities. 3.07 The DPW is the principal authority for highway administration in Chad. It is well organized, operates satisfactorily and is capable of executing the project. Most of the senior posts are held by French engineers under a Technical Assistance Agreement signed in 1960 between Chad and the French Aid agency (FAC). A college of civil engineering was created in Fort Lamy in 1964 to train Chad and Central African Republic engineers, but the first class of 13 students will not graduate before the end of 1968. It will take some time before experienced Chad engineers are available, and since the senior posts in the DPW require an adequate standard of education and experience, assurances have been obtained from the Government that these posts will be filled, either through technical assistance or by direct hire, with personnel possessing the appropriate qualifications. 3.08 New, time-consuming administrative procedures established late in 1966 have created delays in ordering materials and spare parts for mainte- nance equipment. These delays are prejudicial to the sound management of highway maintenance andthe Government has given its assurance that it will reduce them. Moreover, payments to suppliers in 1966 were often late because of a shortage of cash. This shortage, which has now been corrected, originated from delayed transfers of custom duties levied for the first time by Cameroon and Congo-Brazzaville under a new custom union formed early in 1966. ThepDssibility that shortages might again occur cannot be ruled out; therefore assurances have been obtained that payments will be made on time to suppliers of materials, equipment and spare parts required for the project.  - 6 - 3.09 Vehicle size and weight regulations are the same as in the other French-speaking countries of Africa and are satisfactory. The maximum permissible axle load is 10 tons which conforms with practices in West Africa. All vehicles are subject to inspection every six months. The movement of heavy vehicles on unsurfaced all-weather roads is forbidden during and for a few hours after heavy rains. The present strict enforcement of these regulations brings about savings in maintenance costs which exceed the cost of immobilizing traffic for short periods. D. Highway Financing and Planning 3.10 As shown in Table 3, annual highway expenditures,which include depreciation of equipment,have been increasing since 1960, largely as a result of increased foreign aid for new construction. A Road Fund was established in 1960, financed by gasoline and diesel fuel taxes earmarked for the maintenance and improvement of the road network. Annual proceeds since its creation are indicated in Table 4. The Government contemplates increasing fuel taxes to meet the recurrent charges of the proposed maintenance program included in this project (see para. 4.15). Other taxes are levied on vehicles, spare parts and tire imports, etc. As a whole, total revenues from road users have, over the last three years, roughly met the expenditures for administration and maintenance of the highway network, i.e., about 40 percent of total highway expenditure. As a result of the tax increase contemplated by the Government, revenues from road users will be more than doubled in 1972. 3.11 The Planning Commission has drawn up a Five-year Economic Development Plan for the years 1966-1970 which, somewhat optimistically, contemplates investing about US$40 million on 2,000 km of roads over the period. Since local funds are scarce, most of this program would have to be financed by foreign aid. The Government is now having discussions on this subject with FED and FAC. Improvement of highway maintenance and of the Djermaya-Djimtilo road are considered of high priority in the Plan. E. Highway Construction 3.12 Highway construction works costing about US$16 million and financed by FED and FAC are underway or are being contemplated in the near future. Works are concentrated mainly around Fort Lamy and on the Fort Archambault-Moundou-Cameroon border road. A subsequent step should be to improve to all-weather standard either the Fort Lamy-Fort Archambault or the Fort Lamy-Moundou road and to provide a link Fort Lamy-Abeche. However, these construction works are expensive and are difficult to justify economically because of low traffic volumes.  -7- F. Highway Maintenance 3.13 As stated previously (see para. 3.6) road maintenance is carried out by three different organizations. Each organization performs the work by its own forces. Maintenance operations by the DPW and ATEC are costed in detail; no costing is carried out by the local administrative authorities. 3.14 Maintenance operations consist of reshaping, regravelling, local patching and miscellaneous works such as grass cutting, maintenance of drainage sumps etc. Labor is unevenly distributed but is used in road maintenance in those areas where it is available; reshaping and regravel- ling are carried out by mechanized units. Climatic conditions dictate the work schedule; reshaping and regravelling are impossible during the rainy season (June to October) because floods preclude the use of machines, and reshaping is difficult during the dry season (January to May) because of poor soil cohesion; as a result equipment utilization is low. With the improvement of drainage resulting from the project, the duration of floods will be reduced over some road sections, thereby increasing somewhat equipment utilization. 3.15 Total funds available for maintenance are inadequate and as a result the total length of roads regularly maintained is limited (see Table 1). Furthermore, the condition of the roads for which the DPW is responsible has deteriorated. ATEC is in a much better financial position, and the Fort Lamy-Fort Archambault-Central African Republic border road is in good condition. The roads or tracks being maintained by the local administrative authorities are in very bad condition but, apart from those which will be taken over by the DPW under the proposed project, they are considered to be adequate for present traffic needs. G. Highway Maintenance Equipment 3.16 The existing equipment owned by DPW is standardized on a few French and US makes and is well suited to the type of highway maintenance needed in the country; it was procured under FAC and USAID grants and has been partially renewed through periodic purchases financed through an Equipment Replacement Account. This account is credited with depreciation charges levied on equipment used for highway maintenance, it being intended that in normal circumstances an equivalent sum in cash should be set aside and earmarked for replacement of road maintenance equipment. Purchases for renewal were held up in 1966 and 1967, pending clarification of the new equipment to be purchased under the proposed project, so that the account shows at present a balance of about CFAF 90 million.  - 8 - 3.17 District and divisional shops carry out minor repairs to maintenance equipment while major overhauls are done in the central shop at Fort Lamy. Equipment is reasonably well maintained by the shops but there is need for improvement in the daily maintenance carried out by operators; this situation is being remedied by a training program for operators and mechanics run by US AID in Fort Larmy (see para. 4.7).  _ 9 _ 4. THE PROJECT A. Description (see map) 4.01 The project consists of: (i) a five-year maintenance program to be executed by the DPW, including the provision of equipment and spare parts, materials, extension and improvement of shops, and the training of operators and mechanics; (ii) a feasibility study for improving the 82 km long Djermaya- Djimtilo road (see map) and lakeside facilities in Djimtilo and Bol and, if the justification of the construction works is confirmed, the completion of detailed engineering and bidding documents; and (iii) establishment of a country-wide system to collect traffic data on the main road network. (1) Five-Year Maintenance Program (a) ObJectives 4.02 The DPW at present maintains about 1,700 km of roads. Under the proposed five-year maintenance plan, the DPW would maintain an increasing length per year and be responsible by 1971 for a network of about 3,700 km (see Table 5) linking the four major cities, Fort Lamy, Fort Archambault, Moundou and Abeche, and adequately serving the southwestern part of the country. 4.03 The present condition of the additional roads that would be main- tained by DPW is generally poor. Road beds are not properly shaped, ditches and drainage outlets are clogged, gravel or selected soil wearing courses are worn away, pot holes and ruts are common. Most of the roads, except in lateritic soils in the southwest area around Moundou, are impassable during the rainy season. 4.04 With equipment and facilities provided under the project, the roads would be improved so that regular and better maintenance could be carried out and the roads kept at the standard of good, dry weather earth roads. Where suitable lateritic gravel is available, they would be kept open during most of the rainy season with the enforcement of appropriate controls. Roads in other areas would be passable in all but very wet weather. (b) Equipment and Personnel Needs 4.05 The quantities of equipment to be purchased per type, in 1968, 1969 and 1970 are shown in Table 6. Total equipment purchases consist of 24 graders, 49 tractors, 44 rubber tired rollers, 98 trucks and other pieces of equipment as detailed in the table. The requirements were realistically  - 10 - estimated on the basis of a study by the DPW which took account of the volume of traffic, number of possible working days, and the output of the equipment under average conditions. 4.06 An initial stock of spare parts, amounting to about 10 percent of the value of the equipment, would be financed under the project. Addi- tional spare parts would be supplied through local agents who would have to be established as part of the purchase conditions; provision for enlarging existing shops and warehouses of the DPW in Fort Lamy has been included in the project. An initial stock of steel culverts amounting to about US$120,000 equivalent would also be procured under the project for use on the additional roads to be maintained. 4.07 Personnel requirements for the program are listed in Table 7. Familiarization training for the operators and maintenance personnel would be carried out by the equipment suppliers' local agents in Fort Lamy as a condition of the purchase. Additional training would be provided at a US AID-financed Regional Training Center in Lome, Togo. The Chad Govern- ment is presently discussing with the Center the practical arrangements for sending a relatively large number of trainees to Lome. The preliminary outcome of these discussions is that while the Center would accept the trainees, it might not support their travel and subsistence cost; therefore, at the request of the Government, a provision to cover these expenditures is included in the project. A small US AID-financed Center run by two American experts has been training DPW operators and mechanics in Fort Lamy since 1965. Under existing arrangements between US AID and Chad, the experts are scheduled to leave the country by the end of 1968, and US AID has informed IDA that this assistance to Chad would not be resumed. The Center should be operated on reduced scale after 1968 to meet the day-to-day training needs of the DPW: the Chad Government is contemplating retaining for that purpose the services of one of the above experts, or of an expert of similar qualifications, until 1971; a provision to cover the corresponding cost for 1969, 1970 and 1971 has been included in the project. (2) Feasibility Study and Detailed Engineering of the Djermaya-Djimtilo Road and Collection of Traffic Data 4.08 The small village of Djimtilo near the mouth of the Chari river on Lake Chad is a loading point for boats on the Lake. It is served at present by a 82 km track, branching off the all-weather Fort Lamy-Massaguet Road at Djermaya. This track provides excellent transportation during the dry season but is impassable from August to December, when it is flooded by the Chari. Its alignment is generally good, the terrain is flat with very little vegetation and good materials for road construction are available in the area. 4.09 The Government is considering improving this track to an all-weather standard to provide permanent access from Fort Lamy to Lake Chad so that fish caught on the lake, and other agricultural products from rapidly  expanding reclaimed zones along the lake, could be transported throughout the year. Improvement requires the construction of an embankment over the major part of the alignment, the provision of drainage and an adequate pavement. The DPW has estimated the cost of the proposed improvement works at US$20,000 per km or US$1.6 million in total, of which US$1.2 million would be the foreign component. The Association considers that this estimate is low and that a cost of about US$30,000 per km is more realistic. The traffic expected is about 40,000 tons per year after completion of the road and would increase rapidly thereafter. A feasibility study by consultants is needed to determine the appropriate design standards and to provide a reliable construction cost estimate. The study would include an analysis of floods, to determine the variation in the level of Lake Chad. 4.10 Improvement of the existing primitive lakeside terminal port and storage facilities in Djimtilo and Bol (see map) would be required. The traffic to be handled at these facilities would be of the same order of mag- nitude as the expected road traffic. The Association estimates the cost of improving both facilities at about US$0.8 million, of which US$0.6 million would be in foreign exchange. The consultants would study these and prepare preliminary cost estimates for their improvement and operation. 4.11 Detailed engineering and preparation of bidding documents for constructing the prcposed road and improving the lakeside facilities would be carried out only if, as anticipated, their economic justification is estab- lished to the satisfaction of the Government and the Association. 4.12 The project also provides for the services of consultants to carry out a country-wide traffic count covering the main road network and to establish suitable facilities for the continuing collection of traffic data. B. Cost Estimates and Financing (1) Five-Year Maintenance Program 4.13 Estimates are given in Table 8 for the capital expenditures for three years, and in Table 9 for the recurrent expenditures over the five-year period of the maintenance program, 1968-1972. IDA would finance the foreign exchange component (about 85 percent) of the capital expenditure of the first three years of the maintenance program; the Government would finance the local costs of the capital expenditure of these three years, which consist primarily of taxes and customs duties. The Government would also finance the total cost (both foreign and local) of equipment replacement in the last two years of the program, and all the recurrent expenditures over the five-year period. The cost of the new equipment, shown in Table 6, is based on recent equipment purchases by Chad and includes about 13 percent custom and import duties which would not be financed under the proposed credit. A contingency allowance of about 10 percent has been added for price escalation over the three-year equipment supply period. A further contingency allowance of about 10 percent has been added to cover miscellaneous additional needs of main- tenance equipment, shop modernization and operator and mechanic training, which may become apparent after the first two years.  - 12 - 4.14 The list of roads to be maintained with the 1972 target for recurrent expenditures under the program is given in Table 5, and has been confirmed by the Government during credit negotiations. These estimates provide for the cost of labor and materials as well as for regular provision for equipment depreciation. High costs for importing equipment and materials, long haul distance for laterite and a relatively low equipment utilization (see para. 3.14) require that this target expenditure be higher than the usual maintenance cost per kilometer of low trafficked roads in most other countries. 4.15 It is proposed that IDA will finance CFAF 215 million (US$870,000 equivalent) for equipment replacements in 1968, 1969 and 1970 because the Government does not have sufficient funds available through the Equipment Replacement Account to purchase the items required. Assurance has been obtained that the Equipment Replacement Account will continue to be regularly credited with adequate provisions for equipment renewal, that the cash held for the account will be used solely to finance highway equipment replacements and that if at any time the cash so held should prove to be insufficient for the purpose, the deficiency will be made good by Government from its general revenues. 4.16 To help finance the projected increase in expenditure on highway maintenance, including the provision for equipment depreciation involved in the five-year program, the Government confirmed during negotiations that it will raise motor fuel taxes in three steps, on July 1, 1969, July 1, 1970 and July 1, 1972. An assurance was obtained that sufficient local funds will be available from alternative sources should the Government have difficulty in raising extra fuel revenue to the extent needed. The estimated effect of the proposed increases in fuel taxes is shown in Table 9. (2) Feasibility Study and Detailed Engineering of the Djermaya-Djimtilo Road and Collection of Traffic Data 4.17 The estimated cost of the feasibility study and detailed engineering of the Djermaya-Djimtilo road, as well as the cost for establishing a country- wide traffic counting system, are based on cost figures contained in two separate contracts negotiated with the French firm BCEOM, who will be retained as consultants. IDA would finance the foreign exchange component as determined in the contracts. A condition of the effectiveness of the credit is the signature of both contracts between the Government and the consultants. Should the detailed engineering, including preparation of bidding documents, not be carried out because of an unfavorable conclusion of the feasibility study (see para. 4.11), this item would be cancelled. (3) Cost Summary 4.18 A summary of the cost estimates of the proposed project, indicating  - 13 - IDA participation and the Government's contribution, is as follows: - ------------ Financing -------------- IDA Government Total (US$ Million Equivalent) Capital expenditure of the maintenance program, 1968-70 Additional equipment 2.17 .32 2.49 Replacement equipment .87 .13 1.00 Extension of shops, training and miscellaneous .76 .15 .91 Engineering and collection of traffic data .30 .10 .40 Capital expenditure of the maintenance program 1971/72 Replacement equipment - .57 57 Total 4.10 1.27 5.37 In addition, the Government would finance all of the recurrent highway maintenance costs, estimated to total US$4.51 million equivalent over the five-year period. (4) Disbursements 4.19 Credit funds would be disbursed on the basis of the active foreign currency costs of the project items to be financed. If any sur- pluses in the credit account occur they would be cancelled. On the assumption that the credit would be signed in mid-1968, IDA disbursements are estimated as follows: 1968 1969 1970 1971 Total Forecast IDA disbursements (US$ Million) o.6 1.8 1.5 0.2 4.1 C. Execution (1) Five-Year Maintenance Program 4.20 Responsibility for the program would rest with the DPW. Equipment would be procured on the basis of international competitive bidding through separate contracts for each type or each group of similar types of equipment. The contracts would provide for delivery of about half of the equipment in 1969 and the other half in 1970. The size of the orders would vary from about US$800,000 for 24 graders and 52 trucks to some $20,000 for small items such as cars and pumps. Equipment suppliers would be required to set up a short  training program to familiarize drivers, operators and mechanics with the new equipment. They would also be required to provide an adequate servicing organization, particularly for spare part supplies and for periodic inspection of the equipment operating in the field. The contracts would be awarded on the basis of the lowest evaluated bids in terms of equipment purchase price as well as spare parts prices. Bidding documents have been prepared by the DPW and approved by the Association. The DPW is contemplating regrouping its present equipment, mainly of French and US origin, into two maintenance divisions; the equipment purchased under the project would be used in the other two divisions. 4.21 The steel culverts would be procured on the basis of international competitive bidding through a single contract. Bidding documents are being prepared by the DPW and will be reviewed by the Association. 4.22 It is inappropriate to request international competitive bidding for carrying out the extension of the workshops and warehouses because of the small amount (US$70,000 equivalent) that is involved. The capacity of Chad contractors, most of whom are subsidiaries of foreign firms, is suffi- cient to carry out these works; they would be awarded after local competitive bidding in accordance with procedures acceptable to IDA. (2) Feasibility Study and Detailed Engineering of the Djermaya-Djimtilo Road 4.23 The study would be carried out by a French firm of consulting engineers, BCEOM, selected in February 1968 after proposals had been reviewed from five invited firms. The selection is acceptable to IDA. Contract negotiations have been completed. The study would comprise two phases, the first phase of preliminary engineering and economic analysis, the second phase of detailed engineering and preparation of bidding documents. Because the terrain is flat and subject to flooding, field surveys needed for the preliminary engineering are more detailed than usual, and only a small amount of additional field work would be required for the final design. To reduce the consultants' mobilization expenses, all field work needed for both preliminary and detailed engineering would be undertaken as one operation in the firstphase of the study. Completion of detailed engineering and pre- paration of bidding documents (second phase) would be carried out by the consultants in their home office. The duration of the study would be about 12 months, plus 5 months for the detailed engineering and preparation of bidding documents. (3) Collection of Traffic Data 4.24 A contract has been negotiated with BCEOM for a country-wide traffic count comprising the main road network. The count will extend over a period of 18 months and will result in establishing a system for future collection of traffic data, to be continued by DPW. The systematic traffic count will provide a basis for planning of highway maintenance and improvement.  5. ECC`OT_OC JUSTIFICATION A. Highway Yaintenance Program 5