Afghanistan - Highway Maintenance Project

RESTR ICTED RETURN TO FILE COPY Report No. PTR-18a RFTURN TO REPORTS DESK WITs 1 WE EEK 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 The report may not be published nor may it be quoted as representing their views.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 PROJECT AFGHANISTAN May 28, 1969 Transportation Projects Department  Currency Equivalents Unit of Currency in Use: Afghanis (Afs) Official Rate (since 1963) Afs 1.0 = US$0.022 Afs 45.0 = US$1.0 Afs 1.0 million = US$22,222 Approximate Free Rate* Afs 1.0 = US$0.013 Afs 75.0 = US$1.0 Afs 1.0 million = US$13,333 Units of Weights and Measures: Metric Metric: British/US Equivalent 1 kilometer = 0.62 miles 1 meter = 3.28 feet 1 square kilometer = 0.386 square miles 1 metric ton = 2,204 lbs. Fiscal Year March 21 - March 20 Abbreviations - Acronyrs BANK - International Bank for Reconstruction and Development GDP - Gross DbMeStic Product IDA - Internrational Development Association KAMPSAX - Kampmann, Kierulff and Saxild A.S. MW - Ministry of Public Works RCMD - Road Construction and Nhintenance Department RMc - Road Maintenance Directorate UNDP - United Nations Development Program * Used in the report except where otherwise indicated.  AFGHANISTAN APPRAISAL OF A HIGHWAY NAINTENAINCE PROJECT Table of Contents Page SUMIARY i 1. INTRODUCTION 1 2. BACKGROUND 2 A. The Country 2 B. The Economy 2 C. The Transport Sector 3 D. Transport Coordination 4 3. THE HIGHWIAY SECTOR 5 A. The Highway Network 5 B. Vehicle Fleet and Traffic Volumes 5 C. Highway Transport Industry 6 D. Highway Adniinistration 6 E. Highway Planning and Financing 7 F. Highway Design and Construction 8 G. Highway iHaintenance 8 41. THE PROJECT 10 A. Description 10 B. Background 10 C. Reouirelments 11 D. Execution 13 E. Cost Estimates and Financing 14 5. ECOOIOMIC JUSTIFICATIO-N 16 A. Introduction 16 B. Traffic 17 C. Benefits of the Project 17 6. RECOMMEIDATIONS 21 This report was prepared by Messrs. W. Hughes (economist) and H. Kaden (engineer).  Table of Contents (continued) TABLES 1. Development of the Highway iNetwork 2. User Contributions and Highwfay Expenditures 3. Roads to Which Credit Proceeds will be Applied 4. Cost Estimates of Equipment, Vehicles, Spare Parts and Materials to be Procured 5. Cost Estimates 6. Requirements of Personnel and Laborers CHART Organizational Structure of the Road Maintenance Directorate MAP AFGHANISTAN: Main Highway System and Traffic Generation Sources  AFGIIAIESTN APPRASAL OF A 1lIGI-AY MAINTEN[NCE PROJECT SUMMARY i. The Royal Government of Afghanistan has asked IDA, to help finance a four-year program to improve highway maintenance. The proposed project would be the first provided by either the Bank or IDA for highways in Afghanistan and is the direct outcome of a Bank technical assistance grant which financed consulting services to study road maintenance requirements and recommend improvements in highway administration and operations. ii. The project consists of a four-year program: (i) to reorganize the Road Maintenance Directorate and (ii) to improve road maintenance on (a) selected paved primary highways throughout -the country and (b) selected other roads in the Eastern Region as a pilot program, later to be extended to other parts of the country. The proposed credit would be used to finanice equipment, spare parts, workshop facilities, and certain materials required for the program, which is scheduled to commence in mid 1969. iii, The project includes associated advisory services which the Gov- ernment has asked the UNDP to finance. The UNDP has agreed to make available preliminary operational funds to meet the costs of an initial group of con- sultarts for the first six months and to consider recemmlending the full amount for these services to the Governing Council for approval in January 1970) with the Bank as the Executing Agency. iv. T3- project is important for the country in that it will protect exi+t.iTg i-,-restrMents in higlhways as well as considerably reducing transport- ati:7xi cos,i thus substantially aiding Afghanistan's foreign and domestic trade v v. IDA would finance the foreign exchange component of the goods in-- cluded for procurement in the project, estimated at about US$5.0 million equi-alent out of a total expenditure of about US$10.8 million equivalent. The UNDP has been asked to pay the foreign currency cost and part of the local currency expenditures of the advisory services. Its total contribu- tion would amount to about US$1.72 million equiralent. Funds for the re- naining costs would be provided by the Government through its regular budgets. vi. The estimated benefits of the maintenance program, primarily sav- ings in vehicle operating costs, would yield an economic return of about 26%, which is satisfactory. In addition there are administrative and other benefits which are not easily quantifiable. vii. Responsibility for the project would rest with the Ministry of Public Works assisted by the consultants. viii. The project provides a suitable basis for an IDA credit in the amount of US,$5.0 million equivalent and for a UNDP grant of about US$1.7 million.  AFGHANISTAN APPRAISAL OF A HIGHWAY MAINTENANCE PROJECT 1. INTRODUCTION 1.01 The Royal Government of Afghanistan has asked IDA and the UNDP to help finance a program to improve road maintenance in the country, arisinig from a studSy of highway maintenarnce by consultants. A project suitable for IDA and UNDP participation would comprise- a four-year program (i) to re- organize the Road Maintence Directorate (RIMD) and (ii) to improve road mairn- tenance on (a) selected paved primary highways through the country, and (b) selected other roads in the Eastern Region as a pilot program later to be extended to other parts of the country. The credit would be used to finance equipment, spare parts, workshop facilities, and certain materials, while the funds for advisory services by corsultants required for the pro- gram would be provided by a UNDP grant. 1.02 In November 1968 the Government requested the UNDP (Special Fund) to provide the advisory services required to carry out the program. The UNDP has indicated that it is prepared to authorize preliminary operations on this project during 1969. The remaining funds are expected to be author- ized by the UNDP Governing Council in January 1970. 1.03 The maintenance study was carried out in 1967 by KAMPSAX, a Danish firm of consultants. This study was financed by the Bank under a technical assistance grant. The consultants found that the Road Maintenance Direc- torate requires reorganization and strengthening, They recommended that steps be taken to (i) improve the organization and operations of the Road Maintenance Directorate, (ii) increase the utilization of existing highway maintenance equipment, (iii) purchase additional equipment and spare parts and (iv) expand workshop facilities. The consultants proposed that the re- commended maintenance program be executed in two stages. This project would be the first stage; the second stage could follow wrhen the first has been satisfactorily implemented. The two-stage approach will make the pro- ject more manageable. 1.04 This appraisal report is based on the findings of an IDA appraisa:L mission, consisting of Messrs. Hughes (economist) and Kaden (engineer) which visited Afghanistan in December 1967 when it was proposed that the advisory services would be considered for financing by IDA. Subsequently, Mr. Kaden discussed the proposed consultant's assignment in Mlarch 1968. After the Government decided to request UNIDP financing of the advisory services, the project was re-examined by Mr. Hughes in November 1968 folloued by Mr. Kaden in M,hrch 1969, in order to ascertain the final scope of the project.  - 2 - 2. BACKGROUND A. The Country (See map) 2.01 Afghanistan is a land-locked country in Central Asia bounded by the USSR on the north, Iran on the west and Pakistan on the south and east, with short borders with mainland China and Kashmir in the northeast. It has an area of about 650,000 km2, about the size of Texas. The topography is generally extremely mountainous; the b50-mile long Hindu Kush range run- ning northeast to southwest separates the fertile northern agricultural plains from the southern nart of the country which is mostly arid desert. 2.02 An official estimate made in 1966 placed the country's population at about 16 million, of which about one-sixth is nomadic. The rate of popu- lation growth is a little under 2% a year. About 85% of the population is engaged in agriculture and sheep rearing, while about 14>o is in commerce, administration and services. The remainder, less than 1%, is employed in industry. B. The Economy 2.03 The econoMr of Afghanistan consists mainly of subsistence agri- culture, wheat being the principal crop and sheep rearing the most important pastoral activity. Agricultural production is largely dependent on irriga- tion and is, therefore, limited to river basins, the chief being the Kunduz in the north, the Kabul in the east, the Hari Rud in the west and the Helmand in the south, all connected by a well-developed primary highwzay system. The prospects for further agricultural development in these areas are promising; livestock production can also be improved through the development of forage crops and extension programs. The Government is devoting an increasing part of its resources to agriculture. 2.04 IMineral resources are known to exist, though at present only gas, salt and coal are being exploited to any significant extent. About 60% of the energy derived from domestic sources is supplied by wood and other dry combustibles, 25% from coal and the remainder from water power. 2.05 Manufacturing is limited, consisting mainly of the processing of agricultural products. Cement is produced and some metal work done; prac- tically all other manufactured goods are imported. The principal exports are, in order of valae, fruit and nuts, karakul sheep skins, cotton, wool, carpets and rugs. 2.06 Altogether, agriculture and animal husbandry constitute the most important productive sectors of the country's economy contributing about 53% of the gross domestic product (GDP). Services constitute an equally large sector, while handicrafts and factory industry make relativrely small contri- butions. The GDP in 1967/68 is roughly estimated to be about US$1.3 billion equivalent (at the official rate of exchange), or at about US$80 equivalent on a per capita basis. During the six years ending March 1968, the GDP grew at about 2%, a year in real terms.  2.07 In M4arch 1967, the Government launched the Third Five-Year Plan with a view to realizing a h.25 anrnual growth in the GDP. The actual growth rate has fallen far short of this target and has barely kept up with in- creases in population. If the Government succeeds, as planned, to devote a larger proportion of the development outlay to the production sector, it is reasonable to expect an annual increase in GDP of 4% to 1972. This rate can only be reached, however, if the necessary public savings are forthcom- ing, and expectations regarding foreign assistance are realized. C. The Transport Sector 2.08 There are no railways; the mountainous terrain would make railwayr construction very expensive and there are no large-volume bulk products re- quiring haulage over long distances. Highways provide the principal means of transportation for both internal and international traffic with air trans- port playing a complementaryr role. A considerable amount of traffic is car- ried by animals, mostly camels, even over long distances and on routes not yet served by the highway network. 2.09 Kabul, the capital, serves as the focus of both domestic and inter- national traffic, with highways radiating east to Pakistan, north to Kunduz and Mazar-i-Sharif and to the USSR, southwest to Kandahar and thence south- east to Spin Boldak and Pakistan and northwest to Herat and Iran. The pri- mary highway system (see map) is roughly circular in shape, with Kabul in the eastern segment, and connects most of the important population, agri- cultural and industrial centers to the capital, with branches leading to neighboring countries. 2.10 Afghanistan depends on her neighbors for access to international markets; traffic moves largely byr road, though same traffic is transferred to railways of Pakistan and the USSR at the borders. Part of the trade with the USSR is by barge on the Amu Darya River on the boundary between the USSR and Afghanistan; the most important port on the river on the Afghan side is Shirkam and altogether about 150,000 tons of Afghan traffic per year move on the river. There is no other river trade of any importance. 2.11 There are seven principal airports in the country, of which two, Kabul and Kandahar, are international airports. Domestic commercial air services are operated by Ariana Afghan Airlines, of which the Government owns 51% and Pan Arerican Airlines 49%. International services are provided by Ariana, Aeroflot, Iran Airlines, Pakistan International Airlines and Indian Airlines. A wholly Government-owned airline, (BHAKTAR), was recently set up to operate Short Take-Off and Landing (STOL) aircraft services to the remote regions of the country, especially in the northeast; the justifica- tion for the STOL services appears to be social and administrative, rather than economic. Two Canadian STOL aircraft have been purchased as a pilot scheme; technical advice and training is being provided by UNDP with ICAO acting as the Executing Agencvr.  - l; - 2.12 One pipeline exports gas to the USSR and another is being constructed to supply a proposed fertilizer factory near Mazar-i-Sharif. These pipelines are fully integrated with the gas exploitation operation and the works are being carried out with Soviet technical and financial assistance. D. Transport Coordination 2.13 Afghanistan has no transport coordination problems, mainly because of the absence of railways. No serious coordination problems will arise in the near future since highways appear adequate to provide all the overland transport services that may be required; no investment in railways is con- templated, apart from a short connection with the West Pakistan Railways at the border. Aviation services generally provide for special needs for which highways are not a possible alternative. 2.1 The principal problem of planning in the transport sector is the choice between new investments and maintenance of the existing network. The project under consideration is designed to emphasize the importance of the latter, in order to preserve the considerable investment which has been made in the primary highway system, and to improve the condition of the other roads, first in the Eastern Region under a pilot scheme.  3. THE HIGHKAY SECTOR A. Ithe Highway Network (See map) 3.01 Ten years ago there were only about 6,200 km of roads, none of which p.: p-ced and only some 3j700 kra w3:e aLl-weatllr. Today tha7 C, are approximately 17,300 km of roads and motorable tracks (see Table 1) with about 2,000 km of paved highways. The primary network, of about 3,200 ki,% is a roughly circular route, running almost parallel with the boundaries of the country and connecting the principal cities, with links to neighboring countries. 3.02 For the foreseeable future the network requires orly minor addi- tions to serve the needs of the country. However, traffic flow is impeded sometimes after sudden rain downpours when sections of road are washed away or surfaces eroded. On these occasions it is only because of present low traffic volumes and the inherent strength of the natural soil that traffic is able to pass with difficulty over the damaged sections. Maintenance pro- cedures are primitive and in the light of anticipated increases in traffic volume and weight, proper maintenance procedures are needed to prevent the roads fron. becoring impassable. B. Vehicle Fleet and Traffic Volumes 3.03 Systematic registration of motor vehicles in Afghanistan began only in 1967. In March 1969, it was estimated that there were about 32,000 vehicles of which 20,000 were trucks and buses and 12,000 were light vehicles. Of the total, some 55% were in Kabul Province and another 15% in Kandahar. In 1961, the total number of vehicles wfas estimated at about 13,8005 the growth between 1961 and 1967 would thus appear to be about 11% per annum. 3.04 The present vehicle fleet represents an average of one vehicle for 500 persons, compared with one for 330 persons in West Pakistan and one for 600 in India. The situation, however, is less satisfactory in Afghanistan than the comparative figures suggest because of the complete absence of rail transportation which plays a very important role in the other two countries. 3.05 Trucks range in capacity fron 41h tons to 12 tons, with 60% of about six tons. Although a number of very old vehicles exist, the average age of the vehicle fleet is probably under eight years. 3.06 Data on traffic volumes available from the toll stations, operated by the IMinistry of Finance, indicate that average daily traffic on primary roads is about 450 vehicles on the Kabul-Torlham Road, 00 on the Kabul- Kunduz Road, 80 on the Kandahar-Herat Road, ard 70 on the Kandahar-Spin Boldak Road (see map). The proportion of trucks and buses is around 80%, except on the first road on which it is about 60%. 3.07 Available data for the Kabul-Torkham Road suggest that truck traf- fic growth between 1962 and 1965 was about 11% per annum. however, statis- tics are fragmentary and unreliable. The project includes the supply of  - 6 - traffic counting equipment and training by the advisory consultants in col- lecting and analysing traffic data. C. Highway Transport Industry 3.08 Most of the bus companies are joint enterprises of provincial gov- ernments and private parties, whereas trucks are mostly privately owned, either by individuals or by small companies. The Monopoly Bureau, an in- dependent agency of the Government, has a small truck fleet of its own to transport the commodities it imports; however, its fleet is often inade- quate and the Bureau supplements it by hiring private trucks. Foreign vehicles bringing goods into the country are allowed to operate to Kabul and Kandahar, but cannot pick up traffic in Afghanistan. 3.09 Imports of trucks and buses are controlled by the Monopoly Bureau which charges a fee of 12% of the import price to cover administrative ex- penses. However, anyone mayr import cars, tires and spare parts for all types of motor vehicles by paying a 5% fee to the Bureau in foreign exchange. The Bureau also handles imports of petroleum products, which it sells to the pub- lic at cost plus a 12% fee. 3.10 Maximum freight rates are not imposed except for Government traffic on the primary highways. These are very low, US