Haiti - Third Highway Project

Report No 382a-HA FILE COPY Haiti Appraisal of a Third Highway Project May 6, 1974 Latin America and Caribbean Projects Department Not for Public Use E)ocument of the intemational Bank for Reconstruct3on and Development International Development Association Thes report was prepared for official use orly by the Bank Group It may not be published quoted or citec without Bank Group authoriztron The Bank Group daesr not accept responsibity for the accuracy or completeness of the report  Currency Equivalents US$l = 0. 5.00 . 1= US$0.20 . 1 million = US$200,000i System of Weights and Measures ' Metric British/US Equivalent 1 meter (m) - 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (km2) = 0.386 square mile (sq mi) 1 metric ton (m ton) = 2,204 pounds (lb) Fiscal Year October 1 to September 30 Abbreviations and Acronyms AASHO - American Association of State Highway Officials BNRH - Banque Nationale de la Republique d' Haiti CONADEP - Conseil National du Developpement et de la Planification HASCO - Haitian-American Sugar Company IDB - Inter-American Development Bank IHS - Institut Haitien de Statistique IICA - Institut Interamericain des Sciences Agricoles de l'OEA INGEROUTE - French Consulting Firm OAS - Organization of American States ODPG - Organisation de Developpement de la Plain de Gonaives ADDVA - Organisation du Developpement de la Valley dtArtibonite SEPRPN - Service d'Entretien Permanent du Reseau Routier National TPTC - Secretairie d'Etat des Travaux Publics, Transport et Communications UNDP - United Nations Development Program USAID - United States Agency for International Development  HAITI APPRAISAL OF A THIRD HIGHWAY PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLIJSIONS ........................ i - ii 1. INTRODUCTION .................................... 2. THE TRANSPORT SECTOR.. 2 A. General .... . . . . . . . . . . . . . . . . 2 B. The Transport Modes . . 3 C. Transport Policy and Coordination. 5 3. THE HIGHWAY SUBSECTOR ........6..6 A. The Highway Network ....... *... ..... a.6 B. Characteristics and Growth of Road Traffic 7 C. Highway Financing and Planning .. 8 D. Highway Administration.... 9 E. Highway Engineering ........... 6 10 F. Highway Construction ............. 10 G. Highway Maintenance .................... .... 11 H . Training . . . . . . . . . . . . . ... . .. . . ...... . . . ... . . .. 1 2 4. THE PROJECT ..................... 12 A. General Description .... .............. ..0.. 12 B. Cost Estimates, Financing, and Disbursements. 13 C. Execution .................. . 15 5. ECONOMIC EVALUATION.. ......... ....... .. .... ,17 A. General ........... . . . . . . ...... . . . . . . . . .1 7 B. Reconstruction of the Northern Road .... ..... 17 C. Technical Assistance ........ 6 .......... 20 6. AGREEMENTS REACHED AND RECOMMENDATION ........... 21 This Appraisal Report has been prepared by Messrs. J. Varallyay (Engineer), H. Beenhakker (Consultant Economist), and R. van Wagenen (Training Specialist) and has been edited by Miss V. Foster.  TABLE OF CON TZTS (Contd.) TA3LES 1. Imports and Exports by Ports 1967-1971 2. Public Investment Program 1972-1976 3. Road Network 4. Vehicle Registration 1966-1971 5. Highway Expenditures 1973-1974 6. User Charge Revenues for Road Construction 7. Public Works Organization 8. Maintenance Organization 9. Prograrmed Training by Organization 10. Northern Road Reconstruction Works 11. Design Standards for Northern Road 12. Proposed Technical Assistance in Transport Sector by Major Function 13. Growth of Principal Cities along the Northern Road 14, Agricultural Production - Gonaives 15. Agricultural Production - Estere 16. Rates of Economic Return and Traffic on Sections of the Northern Road 17. Predicted Traffic on Northern Road 1977-1996 18. Vehicle Operating Costs on the Northern Road ANNEX 1. Disbursement Schedule MAP Haiti - Proposed Road Project - IBRD 10823  HAITI APPRAISAL OF A THIRD HIGHWAY PROJECT SUMMARY AND CONCLUSIONS i. A substantial part of the economic activity of Haiti is centered around Port-au-Prince, the capital, and spread along the Northern Road in the Artibonite and the Gonaives Plains as well as in the Northern Plain, south of Cap Haitien. Haiti is one of the most densely populated countries in the world (close to 180 persons per square km), and over 80% of the popula- tion is rural. The prime transport mode is highways, but the road network, comprising a total of 3,100 km, is poorly developed and in very bad condition. Only a 50-km private railway line exists in the country. Coastline shipping is negligible, and inland water transportation is non-existent. The major port of the country is located in Port-au-Prince, and it handles more than 90%, by weight, of imports. Air transport is limited to passengers within Haiti, but the international airport of Port-au-Prince services cargo as well as passengers. ii. The five-year National Development Plan (1972-1976) of the Govern- ment totaled US$147 million, allocating approximately 28% of these development expenditures to transport. This allocation was not based on economic project evaluations or sectoral planning i'aput, and the plan was subsequently replaced by annual expenditure programs. In fact, there is no transport planning. This is one of the reasons why an important part of the proposed programs has slipped and, for instance, less than half of the proposed development ex- penditures were invested during the first two years of the plan. The trans- port investments proposed within this plan would be devoted to highway re- habilitation, port improvements and expansion of airport facilities. iii. The main element of the proposed project comprises the most urgent reconstruction works along the Northern Road connecting Port-au-Prince and Cap Haitien (249 km). The project road serves two of the most important agricultural production areas of the country in and around the Artibonite Valley, and it connects the second largest town to the capital. The exist- ing road is not suitable for present and future traffic needs, especially since May 1973, when one of the major bridges (over the Estere River) col- lapsed. Also, passage of vehicles is not guaranteed during the rainy season at several critical areas. The feasibility study and the final engineering for the rehabilitation works along the full length of the Northern Road were prepared by the French consultant INGEROUTE and financed by the UNDP, with the Bank as executing agency. iv. The proposed project also would provide several components of tech- nical assistance in the areas of transport planning and reorganization of the Secretariat de Travaux Publics, Transports et Communications (TPTC); assistance is envisaged for domestic contractors.  - ii- -. The oroposed project- would take about two years and would be execu-,ed under TPTC. Consultan^ts contracted under termis and conditions accep,i'ale to the Bark would assist in prequalifying bidders and evaluating bids and would supervise construction. Construction contracts would be awarded on a unit price basis after international competitive bidding, follow-i- ing usual Bank GTroup procedures. Consulting services for technical assis-ance 4 the areas mentioned above would also be procured by Governmenu on the basis of terms and contract conditions acceptable to the Bank. vi. Major benefits resulting fron the reconstruction works proposed in the project would be derived from savings in road maintenance and vehicle operating costs. The economic return from these works (which are spread along 150 km of the Northern Road)is above 25%; this project enjoys the highest priority of transportation projects presently being considered for implementa- tion. Improved road transport from the Artibonite Valley and from Cap Haitien to Port-au-Prince would generate important development benefits in the agri- cultural sector and socio-political benefits through the closer integration of Cap Haitien with the rest of the country and Port-au-Prince. Also. the proposed technical assistance would contribute to institutional improvements within the transport sector. vii. The total cost of the project is estimated at US$13.3 million, with an estimated foreign exchange component of US$10 million (75%) to be financed by the proposed credit. The usual contingencies for possible increases in quantities and prices are included. A special contingency of 20% of the engineer's estimate has been included in the project to cover the risk of bid prices being higher than estimated; the lowest bid for the relatively small works of the Estere Bridge reconstruction in December 1973 was more than 80% above the engineer's estimate, but it may not be indicative, and, therefore, a much lower percentage was considered appropriate for the road construction works, The project includes an amount of US$400,000 for retro- active financing to cover costs of the urgently needed reconstruction of the Estere Bridge and IJS$100,000 for consultant services prior to credit signature. viii. The project provides a suitable basis for an IDA credit of US$10 million; standard IDA credit conditions are appropriate.  HAITI APPRAISAL OF A THIRD H1GEIWAY PROJECT 1. INTRODUCTION 1.0)1 The Republic of Haiti has requested IDA assistance to help finance reconstruction of the main road connecting Port-au-?r4nce (the capital) and Cap Haitien on the norths coast - the Northerri Road. The project would consist of the most urgent rehabilitation works; consultinlg services for supervision of construction; and consultirig services for technical assistance covering transport planning, reorganization of the Ministry of Public Works, Transport and Communications (TPTC), and assistance for domestic contractors. The total cost of the proposed project is estimated at about US$13.3 million equivalent. The foreign exchange component, US$10 million equivalent, is proposed for financing through an IDA credit; the balance of US$3.3 million equivalent in local currency would be provided by the Government. 1.02 This would be the third highway project for Haiti financed by the Bank Group. In 1956, a Bank loan of US$2.6 million was made to finance a highway project comprising reorganization and expansion of the maintenance organization and rehabilitation and intensive maintenance of about 1 ,000 km of roads. In 1962, an IDA credit of US$350,000 was made to finance the foreign cost of completing road maintenance and rehabilitation works started under the 1956 project. 1.03 In spite of these earlier Bank Group-financed projects, the highway maintenance organization practically disintegrated after 1963, a factor that is largely responsible for the current bad road conditions in the country. 1.04 In addition to the abovementioned financing by the Bank Group, Haiti has recently received external financing for a highway maintenance project from USAID (US$3.7 million) and for rehabilitation of the Southern Road (para. 3.01) from the Inter-American Development Bank (IDB) (US$22.8 million); addi- tionally, the Jacmel Road project is under preparation with bilateral assist- ance from the French Government. 1.05 The proposed project would be the first operation of the Bank Group in Haiti since that financed by the IDA credit in 1962. The proposed recon- struction on the Northern Road would concentrate on the worst sections, thus eliminating existing bottlenecks on one of the two major highways; further- more, through technical assistance, the proposed project would bring about sorelv needed improvements in transport planning and in the organization of TPTC, and should make an important contribution to the domestic contracting industry.  1.06 Appraisal of the project was based on UNDP-financed economic and technical studies and detailed engineering prepared by consultants INGEROUTE (France), on information provided by the Government, and on the findings of an appraisal mission, comprising Messrs. J. Varallyay (Engineer), H. Beenhakker (Consultant Economist), and R. van Wagenen (Training Specialist), which visited Taiti in Septeisber/October 1973. The report has been edited by Mies V. Foster. 2. THE TRANSPORT SECTOR A. General 2.01 Haiti occupies the western third of the island of Hispaniola; the eastern two-thirds are occupied by the Dominican Republic. With an area of 27?750 square km, 1/ Haiti is almost equivalent in size to the State of Mary- land. The topography is characterized by hills and intermont valleys or low- lands communicating with the sea on the northwestern and southwestern penin- sulas, and by a large plateau in the central portion of the country. The two relatively large peninsulas result in a coastline that is disproportionately long in relation to the area of the countrY, causing distances between the capital and the extreme north and south to be much shorter by road than by coastal shipping. 2,02 The population of Haiti increased from 3.1 million inhabitants in 1950 to 4.3 million inhabitants in 1971, reflecting an average annual growth rate of 1.6%, which is low compared with those recorded in other developing nations having similar economic and social characteristics. Haiti is one of the most densely populated countries in the world (about 180 people per square over 80% of the Dopulation iS rural. The major population centers are Pa.-nu-Prince, the capital (507,000); Cap Haitien (55,000); Gonaives (37,000); Jere.mie (25,000) 9 and St. Marc (21,000). 2/ ,,, , 3 H.aiti'3 economy slumped during the period 1960-1968, 'out, in the last five years, the position has improved, a.nd GDP has been growing at about ,.5 rBer arnnm. in view of the relatively low rate of growth of population, ,hns reflects a moderate recovery. Even so, GNP per capita in 1972 (US$120 Der annum) barely reached the 1960 figure, and is still the lowest in the semisp',he. ^',fii)4 The leading industries are sugar refining in Port-au-Prince, cement and flour production near Duvalierville and textiles in Gonaives. Port-au- Printce is the main center for small basic industries producing shoes, cloth, baseballs, mattresses, cooking utensils, plastic materials, soft drinks, cigarettes, cooking oils, perfumes, and soap. 1/ This excludes outlying islands with a total area of about 1,000 square kilometers. 2/ 1971 population statistics.  -3- 2.05 Until recently, there were two mining operations in Haiti: a bauxite mine near Miragoane in the southern peninsul.i and a copper mine near Gonaives. The copper mine has now been closed, but the,bauxite mine is still in pro- duction. Its operation, however, has little effect on the road system since the ore is exported through the nearby port. 2.06 Agriculture is the largest single element of the national economy, and production has increased somewhat during recent years; the national accounts for agriculture show an increase of only 2.5% in real value added between 1970 and 1973. This increase is primarily due to increased crop production for domestic consumption. Development plans for the Artibonite Plain, for the area northeast of Gonaives and for the area north of the Estere Rivrer near the Estere Bridge call for a substantial increase in agricultural production for domestic consumption and exports (para. 5.04), but it may be difficult to achieve the goals of these agricultural develop- ment plans without improving the Northern Road. B. The Transport Modes 2.07 Despite the poor state of the road network, most transport in Haiti is carried by road. This is due to the relatively short overland distances between centers of production, consumption, imports, and exports. 2.08 Agricultural products lead in the demand for transport, followed by cement and construction materials. Present capacity of the port of Port- au-Prince and of both the main road network and the feeder roads is inade- quate to satisfy the demand. 2.09 The sector is currently characterized by the involvement of a number of international agencies -- IDB, UNDP - and of bilateral assistance from France and USAID. The structure and working of the institutions in the sector need improvement, and meetings with Government's participation,are now being arranged between the agencies involved. The first such meeting should take place in August 1974. (i) Railways 2.10 There is no public railway in Haiti. The only railway still func- tioning is the narrow-gauge, single-track line, extending 51 miles east from Leogane via Port-au-Prince to Manneville, owned by the Haitian-American Sugar Company. It is in poor condition and will be reduced in length when a new sugar refinery comes into operation shortly. (ii) Highways 2.11 The highway system and its administration are described in detail in Chapter 3.  (iii) Air Transport 2.12 Although international air transport of passengers and freight has recently undergonie rapid development, domrestic air traffic is growing much more slowly. COHATA (Hait-Ian Air Trarsport Conpan-y) which provided domestic air service until 1972, has isuspended its activities, but expects to operate again in the near fu.ture, 'Meanwhile, domestic passenger traffic Ls carrie.d by a foreign com-pany (T urks a-Id $Ccs, Ahways) under a short-term agreement. This company maintains regular fl gbts banieen Port-au-Prince, Cap Haitian, Port-de-Paix, Jacmel and Les 'Caves wi tC- a-IrcrafE 11-aving capacity for a dozeni passengers. The num3er of air passengers is very ,iw',,T, despite a considerable time advantage, because of the lowq incwo-.e levels i`n Haiti. Air Haiti is another domestic carrier lir4ted to cargo transport to and frocm the USA. 'The international airport of Port-au- Prince is capable of handling Boeing 707-type jet aircraft in all weather conditions ardc servlc:; ng passengers and cargo ae well. This major a-irport is admainistered and operated 'oy a semi-autonomaous Airport Authority; it receives managerial assistanc.e fromr Pan American World Airways. (iv) Maritime Transport 2.13 There are 25 harbors along the 5,530 krm of coastline; in most of themn, onerations are conducted in open waters, oftea under hazardous condi- tions. Besides Gonaives and Miragoane, where there are private wharves specializing in the loading of ore, foreign trade is concentrated, in accord- ance with Government policy, in the ports of Port-au-Prince and Cap Haitien, both equinped for loading ocean-going vessels. 2.14 The 1967-lQ071 imports and exports by port, shown in Table 1, reflect the predominance of Port-au-Prince. This predovdinant role should continue to increase in the coming years, with the planned enlargement of port facilities there and improvement of the road.network. The Admdinistration Portuaire (Port Administration Authority) ol Port-au-Prince port is directly under the Jurisdiction of the Minister of Finance, and it is responsible for the finances and ooeration of the port, including the setting of service charges and tariffs. A two-phase expansion progrwL began in 1968, and the second phase, financed by an IDB loan, is expacted to begin in 1974. Container facilities already exist and will be lmproved. The major Government wharf will have an extension, and the port will be dredged to 40 feet. 2.15 Coastal shipping, mainly by seSLling boat, is significant only along the northern coast of the southern peninsula. There is practically no traffic between Port-au-Prince and Cap Haitien, due mainly to the fact that the over- land distances are considerably shorter than that by sea (para. 2.01). Salt is shipped from Gonaives to various locations in the country, while a small quantity of goods, mostly construction material, is Shipped from Port-au-Prince to Gonaives. This small trade will probaoly continue to be conducted by sea in spite of the improvement of the Northern Road. The transport survey to be carried out under the proposed technical assistance should indicate the appropriate role for coastal shipping (para. 2.19).  -5- C. Transport Policy and Coordination 2.16 The overall policy of the Government is to give priority to trans- portation and agricultural development within a five-year national development plan that was prepared by the Conseil National du Developpement et de la Plani- fication (CONADEP) for the period 1972 through 1976, envisaging a total in- vestment of US$147 million equiva'Lent, of which 28.1% would be invested in the transport sector (Table 2). 'This plan was apparently prepared without the benefit of sectoral plans, and, specifically as regards transport, with- ouit identifying the demand from the other sectors. TPTC, although charged with the responsibility of the transport sector, does not prepare a sectoral plan and, indeed, does not have the capability to do so (para. 2.17). TPTC's input to the national plan has therefore been limited to commenting on a list of transportation projects compiled by CONADEP. 2.17 Sectoral planning should be carried out within TPTC. However, this cannot be done at present because: (a) there is no planning unit within TPTC; even if there were, planning would be hampered by: (1) lack of experienced professional staff (currently, in CONADEP, there is no transportation specialist among the 13 economists); (2) insufficient transport statistics in general and highway traffic data in particular; (3) the fact that economic evaluation has not traditionally been applied to transportation projects; (4) the difficulty in obtaining accurate data on user charges because of the accounting methods used within the Ministry of Finance; and (5) the apparent arbitrariness with which user charges are set by the different agencies and the Ministry of Finance. (b) some of the agencies responsible for transport modes are not directly subject to the coordination of TPTC, e.g., (1) the major airport (Port-au-Prince) is operated by a semi- autonomous agency (para. 2.12); (2) the major international port (Port-au-Prince) is operated by an agency of the Ministry of Finance (para. 2.14); and (3) coastal shipping is not administered by any central Government agency.  2.18 The Govern-ment should iaddress itself to the deficiencies in trans- port nlanning, currently bei ng carrie out by CO!ALEP parar. 2.16), but which, preferablv, should be a function or T'7' s