Colombia - Economic growth : problems and prospects (Vol. 7 of 12) : Transport

RETURN TO IREPORTS.DESK FL Co yRESTRICTED WIPORTH FISS gLE COPY Report No. WH-200a ONE WEEK 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 The report may not be published nor may it be quoted as representing their views.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 ECONOMIC GROWTH OF COLOMBIA PROBLEMS AND PROSPECTS (in XII volumes) VOLUME VII TRANSPORT November 1, 1970 South Arnerica Department  CURRENCY EQUIVALENTS (Certificate Market Selling Rate of Exchange) End 1968 1 US$ = 16.91 Pesos 1 Peso = US$0.05913 End 1969 1 US$ = 17.90 Pesos 1 Peso = us$0.05586 End-March 1970 1 US$ = 18.20 Pesos 1 Peso = US$0.0549h  TABLF OF CONTETITS Page No. I. INTRODUCTION .......................1.................... l A. General ..1 B. Ilighways ..1 C. Railways .. 2 D. Ports . . 2 E. River Transport .. 3 F. Air Services. 3 C. Pipelines .. 4 H. Investment Plans .. 4 II. THE HIGHWAY SECTOR. 5 A. Highway Network ....................................... 5 B. llighway Administration .. 5 C. Hip;hway Planning. and Financing . . 6 D. Highway Engineering ......................... 6 ED Highway Construction ................................. 7 F. Highway Maintenance .. 7 G. Characteristics and Growth of Road Traffic . . 7 H. Taxes on Vehicle Ownership and Use . . 8 I. Tolls on National Highways ..10 J. Records of Highway Traffic ..12 K. Foreign Assistance witth Highways . .13 I. Highway Feasibility Studies, Current and Future ..... 14 M. Colombia Feeder Roads ..16 N. The Highway Investment Program . .17 Ill. RAILWAYS ............1,... 18 A. The Railway System ..18 B. Vehicle Fleet ..20 C. Characteristics of Train Traffic . .21 D. Outlook for Future Traffic ..24 E'. Uneconomic Lines ..25 F. Possible E'xtensions ..27 G. Railroad Costs andi Pricing ..28 -1. General ..31 IV. INLAND WATERWAYS ........................... 33 V. AIR SERVICES .35 A. Introduction .35 B. Forecast of Commercial Air Transportation Activity 35 C. Long Range Aviation Needs .38 1). Air Services Proviled .40  TABLE OF CONTENTS (Continued) Pag.e No. E. The National Airports System .......... .. ............. 41 F. Pricing, Tariffs and User Charges . .42 G. AVIANCA ............... 43 tl. Legislative Changes in Managemenet of Colombian Civil Aviation .................................... 44 I. Feasibility Studies ............... .. ................... 46 VI. PORTS . .. 47 A. Organization .. ................ 47 B. Port Charges .. ................ 47 C. Port Capacity ................. . 47 D. Port Operations ...................................... 49 E. Traffic ................................. 5( F. Investment Program ............... .. .................. 51 ANNEX A Records of highway Traffic ANNEX B Status of Feaisibility and other Highway Preinvestment Stuldies AININX C Inventory Sheets, Preinvestment Stutdies ANNIX U) Preinvestment Study Data Sheets ANNEX E Reference Material TABLES - HIGHWAYS I.1 Anticipated Public Sector Investment in Transport - 1970-1975 II.1 National Highways by District II.2 Departmental Roads II.3 Past and Projected National Highway Expenditure II.4 MOP Highway Design Standards II.5 Vehicle Registrations - 1958-1967 II.6 Motor Fuel Consumption - 1958-1968 II.7 National Investment Program 1969-1972 Highways (million pesos) II.8 Sources of Revenue for 1969-1972 Highway Program TABLES - RAILWAYS III.1 Colombian National Riailroads Derailments III.2 Freight Traffic III.3 Freight Traffic by Commodity - 1969 III.4 Average Length of Haul III.5 Annual Paying Freight - 1962-1969 III.6 Distribution of Rail Freight by Size of Shipment - 1969 III.7 Summary Income Accounts - 1962-1970 III.8 Summary Cash Flow 1968-1970 III.9 Summary Balance Sheets, 1968-1970 TABLES - AIRWAYS V.1 International Diversionary Traffic From Colombia V.2 Balance Sheet (AVIANCA) V.3 AVIANCA Profit and Loss Statement  MAPS Figure II.1 National Highway System II.2 Possible Future Highway Projects III.1 National Colombian Railroads III.2 Republic of Colombia Railroad Gradients III.3 Colombian National Railroads Traffic Density 1969 V.1 Colombian Air Routes   1. INTRODUCTION A. General 1. The Republic of Colombia is situated in the northwestern corner of South America and has coastlines on both the Pacific Ocean and the Carib- bean Sea. This advantage of having two coastlines is offset by the diffi- culty of movement between the coasts and the interior. The three massive ranges of the Andes Mountains which run from south to north present formid- able barriers to communication between the main areas of population, which until recently developed as separate and almost isolated communities. Transport investment policy over the past twenty years has been aimed at national integration and at overcoming the situation imposed by geography. Within the next year or two the task of establishing what might be termed the basic transport -network of the country should be completed. 2. The World Bank has been closely involved in the improvement of Colombia's transport facilities since 1951. Six loans and an IDA credit totalling US$136 million have been made for highway construction and re- conEtruction. Five loans totalling US$94.6 million have been made for railways1 primarily for the construction of the Atlantic line of the national railroad and for a program of rehabilitation of the entire network. 3. The sixth highway project, consisting of about 1,600 km of paving, construction of a major bridge over the River Magdalena and the construction of a port access highway at Buenaventura commenced in June 1970. 4. The Inter-American Development Bank has made loans for the Caribbean trunk highway and for roads supporting colonization schemes in the Meta and Arauca. Two loans of US$28 million to finance the construc- tion of 2,000 km of feeder roads have recently been granted and the IDB is expected to provide another US$30 million in loans for major highways in 1970. Altogether the IDB has lent about $70 million for road develop- ment schemes in the past three years. Except in regard to ports. where IDB have provided some financial assistance, the contribution of international lending agencies to other transport sub-sectors has been insignificant. B. Highways 5. Colombia has some 45,000 km of roads, of which about 5,000 km are paved. The total number of road vehicles - 260,000 in 1968 - has been in- creasing by about 6% p.a. in recent years, and trucks by about 4% p.a. This is a fairly slow rate of growth compared with that in other countries at a similar stage of development. However, since there has been a slight trend towards larger vehicles, total trucking capacity has been expanding at a somewhat faster rate. Now that the Government is exercising control over the importation of heavy vehicles in order to protect the highway system from excessive loads, this trend may not continue. On the main trunk highways, truck traffic predominates.  6. About two-thirds of public investment in the transport sector is being devoted to highway construction and reconstruction. To a large extent the development of the highway network has been complementary to the railway system rathier than competing with it. Transport between Bogota-Medellin and Santa Marta, for example, is essentially the province of the railway; on the other hand, the large rural areas in the northwest between Medellin and Cartagena depend ,almost entirely on the trunk highway between these two cities as their main artery. The provision of modern highways has neverthe- less resulted in considerable diversions of traffic from rail to road in some areas.. In some cases this is due to the present rundown condition of parts of the railways system; where good services can be provided with ade- quate equipment, the railway is under much less competitive pressure. On the Paz del Rio-Bogota route, for example, it seems likely that most of the steel traffic is returning to rail now that a reasonable service can be offered. In other cases, particularly the routes Bogota-Espinal-Ibague, Cali-Medellin and, in future, Cali-Buenaventura, due primarily to the difficult operating conditions imposed by the terrain, road transport is likely'to offer suffi- cient advantages for. many types of traffic to attract it away from the rail- way. Development of communications in Southern and Eastern Colombia will be in the form of highways and the government has prepared an ambitious feeder road system as a complement to the primary and secondary highway program now underway. C. Railways 7. The Colombian National Railways (CNR) operate a unified network of lines totalling 3,436 route km. The system has access to the Pacific at Buenaventura and to the Atlantic at Santa Marta. Traffic from the other Atlantic ports of Cartagena and Barranquille is transferred to the railway through road and water routes. The Atlantic line is the most important. 8. Traffic on'the main trunk lines averages about 500,000 ton-km per route km p.a., and in 1969, total traffic achieved a record 1,159 million ton-km. However, completion of some major highway projects, particularly the new Buenaventura-Cali highway in 1970, is expected to result in substan- tial diversion of traffic from some routes. Passenger travel had been de- clining at 6% p.a. for several years, and in 1969 the CNR carried one million, or 28% fewer passengers than in 1968. About 260 km of apparently uneconomic line are being studied for possible closure. Improved operating ratios for the period 1968--1976 have been forecast and in 1969 the CNR broke even on operating account for the second time in its history. Consultants (SOFRERAIL of France) have been assisting the CNR since 1967 in advising on and implementing a track rehabilitation and maintenance program and training technical personnel. D. Ports 9. Most foreign trade dry cargo is handled by four ports, Buenaventura on the Pacific and the Caribbean ports of Barranquilla, Santa Marta, and  Cartagena. Total exports grew at a rate of 5.4% p.a. during 1956-68 while imports have in recent years been substantially less than in the mid-1950's, reflecting both foreign exchange difficulties and import substitution effects. When the expansions being made at Buenaventura and Santa Marta are completed and in use, the country as a whole will probably have adequate port capacity for the next ten years. The Government and COLPUERTOS which administers the major ports are trying to remedy deficiencies in operation of'the ports arising from low labor productivity, poor timing of arrival of bulk imports, such as foodstuffs and other agricultural products, and failure to cooperate with the railway and highway authorities in planning improved access to the ports. E. River Transport 10. There are several navigable rivers in Colombia, but 96% of the inland shipping takes place on the Magdalena and most of the rest operates on the Cauca. River shipping is possible in all seasons on the lower re- gions of the Magdalena. Upriver from Gamarra, 473 km from the mouth, how- ever, the river is not navigable on a 24-hour basis and travel becomes ex- trenmely hazardous and unreliable in the dry season. In favorable seasons, the river is navigable for 930 km to La Dorada; at other times only 600 km. The volume of traffic varies from year to year according to the condition of the river, and in recent years there has been competition from the At- lantic line of the railroad over the whole length but especially in the northern reaches of the river. Yet, the absolute level of cargo traffic on it has been continuing to grow; a record 2.8 million tons or 1.3 billion ton km of traffic was transported on the river in 1968. Passenger traffic has suffered much more from the improvement of road and rail services in the Magdalena Valley. In 1956, 363,000 passengers were carried on the river; in 1966, the last year of record, only 6,979 travelled by this mode. F. Air Services 11. Colombia's very difficult terrain encouraged the early development of air services for internal as well as international transportation. There are about 700 aircraft landing facilities in the country. These are seven with jet services. Internal passenger traffic has increased by 4.6% p.a. between 1964 and 1968 and internal air freight movement is more or less static. In 1968, only about 103,000 tons of traffic, generating 72 million ton kmi, were handled. There are evidences of recent over-expansion of investment in airport facilities. In 1967, Avianca cancelled its Bogota- Popayan jet flight and the new airport at Popayan is almost unused as a good road now connects Popayan to Cali. Other recent improvements in surface tratisport facilities have led to a decline in traffic on certain routes.  -4- G. Pipelines 12. Petroleum products. Colombia's second largest foreign exchange earner after coffee, are mainly transported by pipeline. Crude oil pipelines supply five refineries, including one at Cartagena, which ships refined pro- ducts via the Panama Canal to Buenaventura for distribution to western Colom- bia. Another line supplies crude to Santa Matta for export. Refined pro- ducts are also moved by pipeline from refineries in the north to Bogota, Medellin and the Cauca Valley, and from Buenaventura to the Cauca Valley. H. Investment Plans 13. During the period 1970-72 the Government intends to increase public investment in most sectors, including Transport, substantially. The best estimate of current plans for investment in the transport sector is given in Table 1.1, together with a tentative extrapolation for 1973- 75. However, the Mission's conclusion is that, in spite of increased absorptive capacity, the investment targets are unlikely to be fully realized, particularly if final investment decisions are based on careful appraisal of economic merit.  - 4a - Cable I-i. ANTICIPATED PUBLIC SECTOR INVESTME1NT IN TRANSPORT - 1970-1975 1970 1 971 1972 1973 1971- 1__) Roads 2494 2429 2722 2800 2900 3070 Railways 240 28( 235 120 4h) 160 Rtiver Transport 40 47 95 100 107 14 Seaports 126 174 82 83 20 35 Civil Aviation 284 122 125 119 128 126 Total 3184 3061 3259 3222 3295 3505 Notes: 1. In current pesos with an assuaed 7% p.a. price increase included. 2. Some of these figures, particularly roads, include maintenance estimates. 3. These figures differ from the sub-sector totals discussed in the various chapters because they include estimates for local government and a small element of private investment.   II. THE HIGHWAY SECTOR A. Highway Network 14. Colombia has a road network totaling about 45,000 km in length, of which about 19,000 km form the national highway system, a further 19,000 km are departmental, and the balance are municipal (linking towns with outlying cotmunities and farms) and private (such as to oil concessions). The De- partmental system includes about 3,000 km of "caminos vecinales", which are low standard feeder roads built under a national program established in 19450; materials and labor for these are furnished by the local communities. Ag-ricultural produce boards and departmental and central authorities all contribute to this program. About 20% of the national system is paved, whereas less than 5% of the departmental roads are paved (Tables II.1 and 11.2). The national highway network over the years 1962 to 1969 increased from 16,500 km to about 19,000 km. 15. The difficult terrain (which leads to high construction costs) was a major factor in the isolation and traditional independence of the various regional centers. Only in the last two decades hias there been any real ef- fo:rt to link the main population and economic centers of the country by good roads. 16. The national highway system includes the basic trunk network which connects the main centers of population and a number of secondary roads link- ing the smaller towns to the primary network, as well as some minor roads of at present purely local importance, but which may in future form part of new long distance routes (Map I.1). B. Highway Administration 17. The Ministry of Public Works (MOP) is responsible for planning, constructing and maintaining the national highway network. The national highway system accounts for about 90% of MOP's activities. Efforts to create a modern transport system started in the early 1950's but limitations were imposed by lack of funds and by organizational difficulties within the MOP which operated with archaic procedures and systems. In 1966, the Government engaged management consultants to review the Ministry's operations, to make recommendations for improvement and subsequently to help implement these recommendations. The implementation phase is still in progress. Pro- gress has been achieved in almost all the Ministry's activities, and partic- ularly in maintenance, but not at the pace which the Government hiad foreseen when the Bank Fifth Highway Loan (550-CO) was made in 1968. The main reason for this has been the difficulty of recruiting and retaining sufficient staff of high calibre, government salaries generally being unattractive and not competitive with the private sector.   Table II-1. NATIONAL HIGHWAYS BY DISTRICT DISTRICT H.Q. PAVEI GRAVEL TOTAL MEDELLIN 320 1,345 1,665 C(ARTAGENA 396 309 705 TUNJA 261 1,720 1,981 MANILALES 530 606 1.,136 POPAYAN 116 891 1,007 M?NTERIA 168 329 497 BOGOTA 513 518 1,031 QUIBO 225 225 RIOHACGA 435 1435 NEIVA 226 803 1,029 VALLED.UPAR 319 957 1,276 VILLAVICENCIO 58 878 936 PASTO 20 1,316 1,336 BUCARAMPN)GA 345 1,150 1,1495 WUCUTA 188 1, 666 1,8514 IBAGUE 352 909 1,261 PALMIRA 413 141 827 FORENCIA 66 198 264 SAN ANDRE 12 48 60 TOTAl 4,303 14,717 19,020 mggmw=xt W=a===_ =I===In HISTORIC COMPOSITION OF NATIONAL HIGHWAY NETWORK Year Length (Km) %Paved 1962 16,512 11.5 1963 16,692 13.7 1964 17,054 14.6 1965 17,1479 15.0 1966 17,564 15.4 1967 17,997 16.6 1968 18,842 22.5 1969 19,020 22.6 Source: MOP, Planning Office, Deoember 1969  Tabl e II-2'. DEPARTKFvThPNT-I, I<,ADS DEI'Awrl