Zambia - Agricultural and rural sector survey (Vol. 3 of 3) : Annexes 12 to 19

Rteport No. 84la ZA CIRCULATING COPY e3 Republic of Zambia TO BE RETURNED TO REPORTS DESK Agricultural and Rural Sector Survey FILE C Y- (In Three Volumes) Volume III: Annexes 12-19 October 20, 1975 General Agriculture Division Eastern Africa Regional Office Not for Public Use N Document of the World Bank This document has a restricted distribution and may be u by recipients only in the Performance of their official duties. Its 'contentsemyd o otherwise be disclosed without World Bank authorizationtsrano  CURRENCY EQUIVALENTS US$1 = Kwacha 0.64 Kwacha 1 (Kl) = US$1.56 Ngwee (n) 100 = Kwacha 1 WEIGHTS AND MEASURES 1 hectare (ha) = 2.471 acres 1 square kilometer (km2) = 100 ha = 247 acres = 0.386 square miles 1 kilometer (km) = 0.621 miles 1 kilogram (kg) = 2.2 lbs 1 metric ton (t) = 2,204.6 lbs 1 liter (1) = 2.116 US pints 1 bag maize = 90 kg 1 bag groundnuts = 80 kg ABBREVIATIONS AFC - Agricultural Finance Corporation CIMMYT - International Maize and Wheat Improvement Center (Centro Interracional de Mejoramiento de Maiz et Trigo) CSB - Cold Storage Board IDZ - Intensive Development Zone LANDSAT - Satellite undertaking program of land resource photography (formerly ERTS) MLNR - Ministry of Lands and Natural Resources MRD - Ministry of Rural Development NAMB - National Agricultural Marketing Board SNDP - Second National Development Plan (1972-76) RGA - Rural Growth Area RGC - Rural Growth Center RRP - Rural Reconstruction Program TAZARA - Tanzania-Zambia Railway UNIP - United National Independence Party ZliS - Zambia National Service This report is based on the findings of two missions which visited Zambia in September/October and November/December 1974 composed of Messrs. J.H.' Cleave, C.R. Blitzer, H.M. Kim, W.A. McCleary, Miss F.F., Johansen, Messrs. G.B. Nkojo, J.F.A. Russell, and M.A. Wolf (of the Bank) and Messrs. R. Ambroggi (UNDP), W.O. Jones, R.C.E. Kapteyn, J.C.D. Lawrance (MOD), and E.H. McCauley (Consultants).  ZAMBIA AGRICULTURAL AND RURAL SECTOR SURVEY VOLUME III TABLE OF CONTENTS ANNEX 12 - Transportation in Agricultural Development Appendix I: Tables Appendix II: Roads Department Organization ANNEX 13 - Performance and Prospects in Crop Agriculture ANNEX 14 - Water Resources: Potential, Use and Development Appendix I: List of Useful Documents Appendix II: Estimated Water Resources Appendix III: Yearly Rainfall Pattern (July 1970-June 1971) Appendix IV: Long-Term Rainfall Distribution Appendix V: Groundwater Occurrence and Discharge Data Appendix VI: Groundwater Extraction Through Boreholes Appendix VII: Theoretical Water Losses Appendix VIII: Hydropower Capacity and Production, 1973 Appendix IX: Domestic Water Supply, 1973 Appendix X: Water Supply Responsibilities by Functions, 1973 Appendix XI: Organization of the Department of Water Affairs, 1973 Appendix XII: Typical Organization of the Provincial W4ater Service within the Department of Water Affairs, 1973 Appendix XIII: 1973 Budget for Water Supply Appendix XIV: Existing Irrigation Schemes by Province, 1974 Appendix XV: Potential Large-Scale Irrigation Development by River Basin Appendix XVI: Capital Cost and Technical Aspects of Large-Scale Irrigation Schemes Appendix XVII: Commercial Farm Medium-Scale Irrigation Appendix XVIII: Government Farm Medium-Scale Irrigat'ion from Chapula River (Copperbelt) Appendix XIX: Community Small-Scale Irrigation Appendix XX: Proposed Irrigation Coordinating Committee (ICC) Appendix XXI: Technical Inventory of the Existing Rural Water Supply Situation for a Rural Water Development Program Appendix XXII: Project Outlines ANNEX 15 - Livestock Development Appendix I: Offtake in Traditional Cattle Keeping Appendix II: Livestock Development Schemes in Progress Appendix III: Outline for Training Programs ANNEX 16 - Fisheries in Zambia ANNEX 17 - Summary of Investment Proposals ANNEX 18 - Development and Income Distribution in a Dual Economy: A Dynamic Simulation Model for Zambia ANNEX 19 - Statistical Annex   ANlN'i IL Page i ZAMBIA AGRICULTURAL AND RURAL SECTOR SURVEY TRANSPORT IN AGRICULTURAL DEVELOPMENT Paragraph(s) INTRODUCTION 1- 3 PART I--SUMMARY 4 - 3L4 Transport Infrastructure 4 - 8 Internal 14 7 International Links to Seaports 8 - 9 Transport Policy 10 - 25 Basic Policy and Related Institutions 10 - 11 Infrastructure Development 12 - 16 Transport Services 17 - 25 Agriculture-Related Transport 26 - 34 Internal 26 - 33 International 34 PART II--CONCLUSIONS AND RECOMMENDATIONS 35 - 43 Transport Policy 35 - 40 General 35 - 36 Infrastructure Development 37 - 38 Transport Services 39 - 40 Agriculture-Related Transport 41 - 43 Internal 41 International 42 - 43 PART III--ROADS AND ROAD TRANSPORT 44 - 103 Roads 44 - 78 Existing Network 44 - 48 Recent Developments 49 - 51 Current Plans 52 - 53 Related Institutions 54 - 78 Road Transport 79 - 103 Regulations 79 - 84 Vehicle Fleet 85 - 86 Road Haulage 87 - 97 Passenger Transportation 98 - 103 PART IV--INTERNATIONAL TRANSPORT ROUTES 104 - 128 Lobito Route 104 - 107 Dar es Salaam Route 108 - 114 Beira Route 115 - 121 Nacala Route 122 - 123  ALNEY 12 Page ii Paragraph(s) Mombasa Route 124 - 125 Other Routes Not Presently Used 126 - 128 Appendix I Tables: 1.1 Road Inverntory, 1974 1.2 MPTW Road Classification and Standards 1.3 Functional Highway Classification 2 Road Densities, 1974 3.1 Vehicle Fleet, 1960-73 3.2 New Registrations of Mbtor Vehicles, 1955-72 3.3 Registration of Vehicles by Main Areas, 1972 h Roads Program (1972-76) 5 SNDP Transport Related Provincial Investment Program 6 Road Transport Fees and Fines 7 Imports and Exports by Route (axcluding Petroleum Fipeline), 1970-74 8 NAMB's Transport Capacity, June 197h 9 Contract Haulage Operating Costs and Tariffs, 1974 10 ZTRS Operating Costs and Tariffs, 1973 11 Roads Departmert Expenditure by Provinces - 1973 12 Motor Omnibus Fares Appendix II: Roads Department Organization  ANNEX 12 Page iii ABBREVIATIONS BCEOM Bureau Central d'Etudes pour les Equipements d'Outre-Mer CARS Central African Road Services CH Contract Haulage CFB Chemins de Fer Benguela CPO Contingency Planning Office EAHC East Africa Harbours Corp. EPTCA Eastern Province Transport Cooperative Association MC Ministry of Commerce MSD Mechanical Services Department of MPTW NIGH Ministry of Local Government and Housir,g MPF Ministry of Planning and Finance MPTW Ministry of Power, Transport and Works M4Rr I- inistry of Rural Development NAMB National Agricultural Marketing Board NTC National Transport Corporation PFWD Public Works Department (of RC) RC Rural Council RD Roads Department (of MPFTW) RRTA Roads and Road Traffic Act RTC Road Traffic Commissioner SNCZ Societe Nationale de Chemins de Fer Zairois TAZARA Tanzania-Zambia Railway Authority T Sh Tanzania Shilling UBZ United Bus Company of Zambia vpd Vehicles Per Day ZR Zambia Railways ZTRS Zambia-Tanzania Road Services   ANNEX 12 Page 1 ZAMBIA AGRICULTURE AND RURAL SECTOR SURVEY TRANSPORT IN AGRICULTURAL DEVELOPMENT INTRODUCTION 1. Zambia, a large landlocked country with a scattered population, de- pends crucially upon its transport networks, not only because of the country's geographic and demographic characteristics, but also because imports and ex- ports amount to about half the value of its GNP. The high cost of bridging distances of more than 2,000 km to the sea is made even higher by the fact that the volume of imports far exceeds exports. This imbalance results in many vehicles going empty during the first half of round trips to the coast. These empty-trip costs are not reflected in the consumer price of imports because the Government grants subsidies to cover them. Even so, about 50% of the CIF Zambia price reflects transport-related costs from port of origin. If subsi- dies were included, in extreme cases transport-related costs would account for as much as 80% of actual CIF prices. 2. Agricultural products account for more than 10% of the value of im- ports, but if volume is considered, agricultural products' share of imports is still larger because of their price and weight-volume ratio, as compared to other imports. Zambia's trade imbalance, in the light of the country's ample potential to expand agricultural production, more than justifies an agricultural policy to produce and substitute local goods for imports and eventuallv to produce an exportable surplus, which would benefit from prac- tically zero additional inland transport costs to the ports. While transport problems are not the main constraint on expanding agricultural production, certain policies and practices which unnecessarily hinder the development of adequate internal transport and, thus the growth of agricultural output, can be improved. 3. This Annex examines those aspects of the Zambian transport sector which are related to agricultural development. The main features of the existing transport infrastructure, of Zambian transport policy, and of agri- culture-related transport are summarized in Part I, and some conclusions and recommendations are given in Part II. Parts III and IV explore in greater detail the most important aspects of transportation, that is, roads and road transport within Zambia and international transport routes. All nlumbered Tables are in Appendix I. PART I -- SUMMARY Transport Infrastructure Internal 4. Zambia's transport infrastructure is relatively well developed by African standards. The network includes more than 34,000 km of road of vari-  ANNEX 12 Page 2 ous standards; two 1.067 m gauge railways, Zambia Railways, with about 1,050 km of track, and Tanzania-Zambia Railways (TAZARA), which is still under construction and totals in both countries about 1,860 km; approximately 120 airfields of various categories; and a few inland navigation facilities (Map IBRD 11509). 5. Road transport is the most important mode for the rural sector. The network has been developed to serve population concentrations and import/ex- port traffic needs. About 4,000 km of roads are paved and 7,400 are gravel, all-weather roads. The rest are ea5th roads or tracks (Table 1.1). National road density averages about 50 m/km and 7 m/person (Table 2), high by African standards. Vehicles in Zambia numbered more than 130,000 in 1973, or 3 per 100 inhabitants on average. About 80% were light vehicles, and 15% trucks and trailers (Table 3.1). Additional details are given in Part III. 6. Zambia Railways has a main line of about 800 km which crosses the central and southern part of the country in a north-south direction. Along this line are grouped most of the country's major economic activities, and there is a complex network of about 250 km of subsidiary lines which serve mines, refineries and other plants, mainly in the Copperbelt area. TAZARA, expected to be completed this year, will connect with the Zambian Railway at Kapiri-Mposhi and after approximately 900 km reach the Tanzanian border at Mwenzo. It is to carry as much of the country's external traffic as the capacity of the Dar es Salaam port allows or as cannot be routed through Lobito. It could also be used for local freight, and should foster rural development along the line-of-rail. 7. As far as other transport modes are concerned, aviation is not pres- ently relevant to rural and agricultural development. Internal water trans- port is also of negligible importance for overall agricultural growth because rivers are navigable only with difficulty and on short sections, and lakes are only suited for minor local transportation. International Links to Seaports 8. Because Zambia is both landlocked and heavily dependent on foreign trade, it is also very dependent on neighboring countries for transport facil- ities. The surface connections which exist between Zambia's infrastructure and seaports are: the Zaire and Angola railway system to Lobito (2,683 km from Lusaka); Rhodesian and Mozambique railways to Loureco Marques and Beira (about 2,040 kn); road and Malawi and Mozambique railways to Beira and Nacala (about 1,655 and 1,750 km respectively); paved road to Dar es Salaam (2,090 km); the TAZARA to be opened this year to the same port (2,040 km); and road to the port of Mombasa (about 2,350 km) 1/ (See Map IBRD 11510 and Part IV for further details.) 1/ The lengths for the various railways and route sections between ports and Lusaka differ in various sources.  ANNEX 12 Page 3 9. The route through Rhodesia has not been used since January 9, 11973, as Zambia continues the border closure initiated by Rhodesia. However,lmany other routes are available which have been or are being improved and which increasingly obviate the effects of the border closure. Transport Policy Basic Policy and Related Institutions 10. The Zambian Government's basic transport policy objectives are apparently (a) to provide services which every citizen throughout the country can afford, and also (b) to ensure uninterrupted import-export traffic flow. 11. Various ministries and agencies of the Government share responsi- bility for meeting these objectives. The Ministry of Power, Transport and Works (MPTW) is responsible for carrying out the first objective and part of the second. This is done through planning, developing, and maintaining in- frastructure; regulating transport operations; and controlling parastatal transport organizations. Recently, in line with the decentralization policy, local authorities such as the Rural Councils (RC) may establish and implement investment proposals of local importance. Other ministries, such as the Ministry of Planning and Finance (MPF), are supposed to assist in coordinat- ing plans of the various agencies. Specifically charged with carrying out the second objective, a Contingency Planning Office (CPO) was established under the Prime Minister's office after the Rhodesian border closure to en- sure adequate import-export flows through careful routing plans. To help carry external trade, the CPO has acquired its own 400-vehicle trucking fleet. Infrastructure Development 12. The Second National Development Plan (SNDP) (1972-76) allocated to the transport sector K 335.3 million, or 28% of the total public investment, in order to consolidate the transport network and ensure the country's inte- grated economic development. At an estimated cost of K 134 million, the main priority was the construction of the Tanzania-Zambia Railway (TAZARA) to en- sure the free flow of foreign trade and to reduce its transport costs. Total railway investment accounted for 53% of the transport sector allocation. Construction of roads followed in priority, comprising 33% of the program. Lesser importance was given to the development of other modes. 13. Although later adjustments in the SNDP did not alter priorities, im- plementation has been uneven. From 1972 to 1974, 57% of the railway program was implemented, while only 24% of the roads program was undertaken. Details are shown in the following table:  ANNEX 12 Page 4 ZAMBIA Transport Plans, 1972-76 (millions K) Actual Plans SNDP SNDP at Spent 1972-74 Cost Foreign Revised Add'l Total % of Mode Estim. % Loans Costs Projects (1) Total (1) Railway transport 178.5 53 158.9 205.1 2.9 208.0 118.9 57 Road /1 /2 transport- 93.1/- 28 30.5 123.7 41.3 165.0 40.2 24 Tazama Pipeline 25.0 7 16.7 23.0 30.0 53.0 25.0 47 Air transport 20.9 6 4.4 29.2 5.5 34.7 10.5 30 Water transport 3.1 1 2.2 1.7 - 1.7 0.6 35 Provinc4l __4__ roads- 14.7 5 14.7 14.7 n.a. n.a. Total 335.3 100 212.7 397.4 79.7 447.1 195.2 42 /1 More details are included in Table 4. /2 Including Samfya-Serenje road, not included in the SNDP. 73 Additional details are shown in Table 5. Note: Revised costs are possibly underestimated. Source: SNDP and Mid-term review, MPF, 1974. 14. Until recently road development was focused only upon building all- weather standard main links. Gradually, however, more emphasis is being given to rural low-class road building, even though paved connections among provin- cial capitals and from those capitals to district centers is still a goal. The SNDP indicates that "consideration will be given to studies aimed at ex- amining financial resources for construction and maintenance of roads as well as the need for all-weather roads in Zambia;....and self-help road build- ing..." 1/ Officials are now aware that roads should be upgraded only 1/ See page 13 of Zambia's Second National Development Plan.  Annex 12 Page 5 when the corresponding investment is economically justified, and they will therefore conduct more detailed feasibility studies instead of making deci- sions only on the basis of traffic levels. They are also aware that self-help works can be meaningfully undertaken only after undertaking such studies and after developing a strategy for rural development as a whole. 15. In line with Zambia's decentralization policy, roads of locaL im- portance are planned by local agencies and generally built by the RC iwith funds allocated to them by the Ministry of Local Government and Housing (MLGH); however, no appropriate local road inventory exists so that funds can be prop- erly assigned. 1/ 16. Both the MPTW and the MPF state that road maintenance has high pri- ority, as specified in the SNDP, but allocated funds have been far from adequate and are continuously decreasing. Now they are at about half the required level, even when the need is conservatively estimated. All the agen- cies are struggling with shortages of qualified staff, and training is not being undertaken to the extent necessary to overcome these shortages. Given the ongoing Zambianization policy, these shortages may even worsen at head- quarters. (See Part III for additional details about roads and related insti- tutions.) Transport Services Internal 17. Some commodities, such as foodstuffs, copper and mine inputs, have been classified as essential and are thus favored with low transport fares. Other items are considered non-essential commodities because they have rela- tivelv little effect on the consumption needs of lower-income groups or on the earning of foreign exchange by the country's main export. These are trans- ported at higher rates. Passenger services are supposed to be provided even on low-density routes at rates accessible to all citizens. 18. The parastatal Zambia Railways, one third of whose costs 'are subsi- dized, is being used as much as possible to convey essential commodities, which are given priority. and pay tariffs below financial costs. 'When the TAZARA becomes operational in 1975, it will perform a similar role. The tariff level is still being studied. 19. Since the railwavs have limited coverage, road transport is widely used, both to feed the rail lines and for long distance transportI. The parastatal road transport organization, the National Transport Corporation 1/ Agricultural Offices undertake road construction also. (See Part III-- Roads.)  ANNEX 12 Page 6 (NTC) was established by the Government because it considers it more appropri- ate to rely on parastatal organizations to perform unprofitable services (in- stead of doing without them or directly subsidizing a large number of private operators) and to handle emergency situations, which are more easily dealt with by a central entity. NTC is composed of four subsidiaries: Zambia Tanzania Road Services (ZTRS), Contract Haulage (CH), United Bus Company of Zambia (UBZ), and Bulk Carriers of Zambia. ZTRS is operating efficiently on the route to Dar es Salaam, but it is to stop operating six months after TAZARA starts functioning. CH moves internal freight. Since the border closure, it also carries international traffic both on the Great East Road and sometimes subcontracts services to ZTRS on the Tan-Zam Road. (Further details about NTC are given in Part III--Road Transport.) However, the NTC subsidiaries operate largely by subcontracting private transporters at offi- cially established, profitable tariffs because the Government apparently prefers that private carriers undertake public road services. A large number of these private operators exist and are competitive. 20. The National Agricultural Marketing Board (NAMB) has taken charge of moving agricultural products, as explained in Part I--Agricultural-Related Transport. 21. Commercial vehicles can be imported subject to only a 10% duty, and some kinds of vehicles can be imported duty-free. This may change, though, once the heavy-vehicle assembling plant under construction at Kasama starts production. The Roads and Road Traffic Act and its subsequent ordinances establish the conditions under which road transport can be undertaken. It in- cludes well-defined safety regulations and licensing requirements which are not, however, firmly enforced. Lack of axle load control enforcement is dam- aging the roads. Fees and fines are detailed in Table 6. All public road service license applications have to be processed in Lusaka. The Road Traffic Commissioner (RTC), assisted by a Road Transport Panel, decides to deny or grant licenses and establishes their conditions. The goods road service licenses specify the route/area on which the vehicle can operate, the type of goods it is allowed to carry, and may establish the fares to be charged for the service; the validity period varies from one to five years, although some short-term licenses (for three months) are granted, for instance, for moving agricultural products. Passenger service licenses establish route and time- table, and all bus operators are required to charge a uniform tariff per km, escablished by the RTC independently of the type of road on which the service is to be provided. 22. Internal road transport Is Uiscusseu in 6reater ueptn iin Part III-- Road Transport. International 23. International transport policy is centered on efficient routing of trade in order to balance flows on each route--taking into consideration the capacity of each port--and on subsidizing at least part of the increased costs which have resulted from the border closure. The overall objective is to keep  ANNEX 12 Page 7 prices in the country from rising. The CPO implements this policy by limiting some non-essential imports; by specifying on each import license whichlroute is to be used (generally bulk cargo is directed through Lobito, fertilizer through Ncala, and general cargo through the other ports); and by carrying part of the goods in its own fleet or through parastatal organizations (ZTRS, CH and railways). The Government is also considering linking the Zambia ,railway system to the Malawi system to ease traffic flow to eastern ports. It can, however, do little to improve foreign port conditions, which are generally the main bottleneck. 24. Because of the border closure, Zambia has received considerable sup- port from other nations, including neighboring countries: technical assis- tance, support in kind, and K 10 million grants and K 20 million in soft loans. 18 Diesel locomotives and about 400 wagons were bought with the loans, to enable ZR to fulfill its new role over the Lobito route, and about 400 trucks were acquired by the CPO, to be operated by CH to solve the transport capacity shortage. This emergency expenditure, together with normal capital ihvestment in rolling stock, amounted to more than K 17 million in 1974. 25. In 1974, about 1,016,000 tons were imported and 937,000 exported, a more balanced tonnage flow than in previous years. However, most of the exports were copper, with high specific weight, and most of the imports are general cargo or agricultural products, with only about two-thirds the speci- fic weight of copper. Thus, in terms of volume, imports are as much as 150% of exports, 1/ and export transport capacity, even by air, remains underuti- lized. Traffic flows by surface and air routes since 1970 are shown in Table 7. Note that the congested Lobito port in 1974 was used for about 50% of Zambia's external traffic, compared to a little more than 10% in 1970. Dar es Salaam, also congested, handled about 30%, Mombasa about 10%, and Beira and Nacala the remaining 10%, except for the small proportion shipped by air. The original rerouting plans allocated less traffic than what actually has been carried on the route to Lobito and overestimated the use of aircraft. Agriculture-Related Transport Internal 26. The long distances between agricultural production and conlsumption centers, the latter mainly along the line-of-rail, create a high transport demand, which is heavily seasonal because of the pattern of agriculitural acti- vities. As it is Zambian policy to ensure that all farmers, whereuir located, can sell their crops at uniform proces and obtain inputs, farmers have no 1/ For instance, 20 tons of general cargo or 29 tons of copper constitute a full load for similar trucks.  ANNEX 12 Page 8 incentives to transport their own produce or to buy inputs beyond the nearest NAMB depot. Thus, NAMB itself has to secure transport from there onward for crops and to the depots for inputs. 1/ 27. In remote areas, NAMB is also requested both by small farmers and cooperatives to move products between farm and depot, and it accepts when a full load is ensured. Although about 90% of the commercial farmers carry pro- duce from farm to nearest depot in vehicles they own--either in trucks or tractor-trailers--few small farmers do so (in some places, oxen-drawn rubber- wheeled carts are available). In addition, most of the few agricultural cooperatives that have been formed lack their own transportation. There are few transport cooperatives and almost no local trucking contractors out of the line-of-rail, and most of the latter are unwilling to undertake haulage on the lower-class roads in remote areas because their units are generally too large for these roads. 28. The official policy is that NAMB should use the railway whenever possible because its rates are considerably lower than those for private road- haulage (about 1/10 for essential products) and the economic cost to the country is probably also lower. However, since the track serves only a limit- ed area and services are not always available when needed, 2/ transport by road is more important, in terms of both volume and value, than by rail. (The TAZARA will probably attract freight now carried by road, but the extent is still uncertain.) 29. Each year NAMB estimates its road transport requirement for the next- season and then tries to ensure its availability. Transporters are invited to present proposals, including rates, to a tender in Lusaka. Bids are re- viewed by a Tender Committee chaired by the Minister of Commerce. The Director of Marketing from the MRD and a representative from the MPTW are among its members; the General Manager of NAMB also attends but is not a member. Con- tracts are awarded mainly on the basis of past performance, for one season, for a specific route, and for a certain allocation of tons, at a fixed rate per ton-km. When contracts are issued, transporters and NAMB provincial managers are notified. The latter control the fulfillment of the contracts and may revoke them in case of contravention; about five persons from head- quarters carry out spot checks. 1/ As explained elsewhere, NAMB is the agency responsible for implementing agricultural policy related to essential products and, for that purpose, operates Government uniform pricing system--in simlified terms: the same price for a specific product at any place--and an operational sys- tem with numerous depots. 2/ For example, when input stock replacement is required immediately, and delays of 14 days are probable by ZR, motor vehicles can be used even along the rail route.  ANNEX 12 Page 9 30. At NAMB's depots, only its staff can load or unload the trucks. A waybill is issued upon loading and signed at the unloading place as a receipt. Thereafter, it is submitted to Lusaka headquarters. (Transporters generally present them personally but can mail or deliver them to the NAMB District Man- ager.) The Transport Officer checks and confirms the bills which are then paid by the Freight Officer within two weeks, on two paydays per month. Pay- ment can be mailed upon request. The Freight Section notifies 1/ the Tax Department for income tax control. 31. For the 1973-74 season, contracts were awarded to private trans- porters 2/ at the rates prevailing for the previous seven years. However, in September 1974, NAMB increased the tariffs by 50%, apparently to attract more transporters. The rate level theoretically compensates for an empty return trip, so when the return trip is also a loaded one, only half the rate is paid for it. NAMB rates are: ngwee/ton - km. 1974 - Distance Maize, Fertilizer /2 Cotton (km) Up to 80 7.50 9 From 81 to 160 6.75 9 Over 160 6.00 9) /1 It is interesting to note that the ZTRS rate per ton-km is 2.35 and that CH's rates range from 1.2 to 4.6 (Tables 9 and 10); subcontractors receive 90% of these rates, a level which is still profitable. However, these organizations may have lower operating costs than NAMB's contractors because they use better standard roads wqhich are generally paved, and they also use trucks more efficiently, as measured in loading averages and waiting times. /2 And other products, such as sunflower, beans, groundnuts, insecticides, pesticides. 32. During 1973, NAMB transported about 100 million ton-km, at a cost to the institution of about K 4.6 million. 3/ Handling and storage costs were about 15% of the transport cost. Details are shown in the following table: 1/ We don't know if only upon request, or as a general rule. 2/ In June 1974, NAMB had a total transport capacity of 12,150 tons provided by 545 trucks, owned by 135 contractors. It is interesting to,note that to service the whole country, 69% of the contractors reside in Lusaka, and the remaining in only 20 more localities (Table 8). 3/ This is not necessarily undesirable; it depends on the individual and combined transport and agricultural policy objectives.  ANNEX 12 Page 10 NAMB Transport: Handling and Storage Costs, 1973 ('000 K) Transport Cost Storage & Handling Sundry Crops Sub- (Head Province Maize & Produce Fertilizer Cotton Total Offices) Total Central 830 27 2,661 33 3,551 527 4,078 Copperbelt 394 1 185 - 580 54 634 Eastern 6 - 79 - 85 9 94 Luapula 67 1 69 - 137 21 158 North Western 24 - 6 - 30 8 38 Southern 87 1 74 1 163 31 194 Western 28 - 18 - 46 9 55 Total 1,436 30 3,092 34 4,592 659 5,251 Source: NAMB, 1974. 33. In 1974, with unit transport rates 50% higher, total transport costs must have increased considerably. For instance, for only 15 days during the peak season in mid-November, K 514,173 were paid to 94 transporters. Given the uniform crop and fertilizer pricing system, these steep transport costs have to be absorbed bv NAMB. Products with the heaviest weight-volume ratio or the lowest price receive comparatively the largest cost reduction in transport, a reduction which is not proportionately reflected in crop prices. Consequently, farmers partly lose the incentive to use their land for the crops to which it is most suited and this may result in distorted production patterns. For ex- ample, the transport cost from various places and the percentage of this cost in various crop and fertilizer prices are shown below:  ANNEX 12 Page 11 Transport cost, as % of Crop Price/ Approx. kms Transport Ground- Cotton Fertilizer to Cost1. /3 Province Locality rail line K/ton-1 Maize Y>ht nuts Seed price- E Lundazi 745 44.70 81 34 21 15 56 E Chipata 570 34.20 62 26 16 11 43 E Katete 490 29.40 53 22 14 10 37 E Petauke 410 24.60 45 18 12 8 31 L Kawambwa 415 24.90 45 19 12 8 31 Samfya 260 15.60 28 12 7 5 20 N Mbala 810 48.60 88 37 23 16 61 Kasama 645 38.70 70 29 18 13 48 NW Zambezi 690 41.40 75 31 19 14 52 ICasempa 360 21.60 39 16 10 7 27 Solwezi 175 10.50 19 8 5 3 13 W Senanga 695 41.70 76 31 20 14 52 Mongu 585 35.10 64 26 16 12 44 /1 At 6 n/ton-km. /2 Not all crops are produced in all places; therefore, some relations may be irrelevant. The prices NAMB pays producers are in K/ton: maize, 55; wheat, 133; groundnuts, 213; cotton seed, 300 (1974). /3 Average fertilizer price to farmers in K 80/ton. Source: Author's elaboration of data from various sources, 1975. Fertilizer is provided to farmers far below cost: about 30% of the import- transport cost to the line-of-rail is subsidized (para. 32), and then there is an additional internal distribution cost subsidy. As shown in the previous table, internal transport subsidies amount to as much as 60% of the NAMB fertilizer price. However, because of the distribution system, this percentage is somewhat misleading. If imports were not all taken to the line-of-rail first and subsequently distributed to the various provinces, but were instead sent there directly, then travel distances would be shorter, with correspond- ingly lower costs. For instance, if fertilizer is imported from'Dar es Salaam, then the trip to Lusaka and back to Mbala on the Tan Zam corridor is completely unnecessary. As opposed to transport rates, NAMB retail prices ire different in various locations, and the price differentials seem to reflect differentials in transport costs from origin. International 34. Agricultural food products account for more than 10% of the value of imports and many of the empty trips to the ports are attributable to these imports. Apart from the railway, which is used for priority transport, CH un- dertakes most of the international agricultural haulage with the CPO fleet,  ANNEX 12 Page 12 and the resulting empty trips cost the Government, which subsidizes them, K 750 each. The importance of transport cost in the total product cost can be clearly seen by looking at some examples: 1'/ Wheat Sunflower-oil Fertilizer Imported from: Australia Europe Europe Through the port of: - Lobito Beira Dar es Salaam Total transport time to Zambia, days: 38 - 44 45 - 50 55 K/ton FOB cost 52.90 386.00 62.90 Transport cost - excluding empty truck trip cost: 57.00 101.00 56.41 - including ! 1 87.51 151.00 91.82 CIF cost - subsidized (current): 109.90 467.00 119.31 - if non-subsidized: 140.41 537.00 154.72 Subsidized transport cost, as % of CIF current cost: 52 21 47 Total transport cost, as % of CIF current cost: 80 31 77 Transport subsidy, as %/ of CIF current cost: 28 10 30 /1 Apparently, orienting imports through the port which entails the shortest sea route does not reduce the sea-freight tariff. In the three cases, ports other than the nearest have been used. 1/ As given by CPO, 1974, and author's elaboration. Current 1973 values.  ANNEX 12 Page 13 PART II--CONCLUSIONS AND RECOMMENDATIONS Transport Policy General 35. Even though recommendations about general transport policy may seem out of nlace in this survey, transport policy constitutes a framework for, and strongly affects agriculture and rural development. For this reason, findings related to policy are first presented, followed by transport recom- mendations which are more specifically agricultural-related. 36. Zambia's transport strategy seems consistent with its overall objec- tives policy, but, as in the case of agriculture, some aspects of the strategy should be reviewed and adapted to present and foreseeable conditions and its implementation improved. It must be kept in mind that external factors are given. Zambia has to adapt to some of them, as in the case of seaport avail- ability (and probably one of the best ways of easing trade flows is by conti- nuing its present routing procedure). On the other hand, in dealing with factors such as the border closure, Zambia has an active, decision-making role. The country will sooner or later reach an agreement with Rhodesia about reopen- ing the border, and another rail outlet to the sea will become available. In the meantime, Zambia should avoid building up excess long-term transport capacity. Infrastructure Development 37. Roads. Past and planned network development seems to be in line with the country's needs. Previously, interest was mainly concentrated on developing primary links, but more recently, emphasis is also being given to feeder roads. It is increasingly recognized that additional local rural-road building can be meaningfully undertaken only after an overall agricultural development policy is established (para. 17). When a specific agricultural strategy is agreed upon, planning awareness at headquarters, combined with a more vigorous implementation of the decentralization policy, under which local authorities will participate more in the decision-making and implementation processes in their own regions, should facilitate road work, the need for which is identified in agricultural strategy. However, the following aspects of infrastructure development should be reviewed: (a) Phasing of outstanding SNDP projects (para. 13): About 70% of the Plan remains to be completed. Completing the projects within the plan period would involve tripling the present road construction budget. Even if funds were available, it seems more appropriate to continue the present pace of road construction over a longer period of time. This would avoid wide fluctuations in demand for contrac- tor services, as has been the case in the Dast (Part III--Roads). These fluctuations make it difficult for the contractor to determine  ANNEX 12 Page 14 how much he should invest in equipment. Smaller contractors cannot compete under such conditions, and the market has become increasingly oligopolistic. (b) Capability of local agencies (paras. 15 and 16): Having been given greater responsibilities, local agencies require additional planning skills and coordination. A local road inventory should be undertaken so that funds for road maintenance can be properly assigned. Both the RC and the Agricultural Offices undertake local road works separately, but if these works were instead assigned to only one agency, implementation costs could probably be reduced by pooling resources, and specialized staff and equipment could be used more appropriately and spare parts stock reduced. Agricultural Offices should turn their road works over to the RC. (c) Recurrent funds and staff (para. 16): Solving shortages of recur- rent funds for road maintenance and of qualified staff has been recognized in Zambia as a first priority, but little has been done about it. Funds are not allocated to RC on the basis of estimated road maintenance requirements and are generally less than requested. Given a lack of information about maintenance requirements, even these requests do not necessarily reflect actual needs. Because of obviously insufficient road maintenance allocations, RC is eager to transfer roads to RD for maintenance. However, RD recurrent expenditure for the roads under its jurisdiction--which in 1973 actually decreased K 3.5 million from the 1971 expenditure level-- is so inadequate that road maintenance is endangered. Additional funds for RD maintenance activities are urgently required to prevent further negative consequences of inadequate services. To alleviate the shortage of qualified Zambians in the RD, the major problems that have to be dealt with are lack of technical training and overwhelming competition from the private sector for the services of those Zambians who are technically qualified. More technical training programs and a review of civil service salary level and structure are needed. 38. Railways. Some proposals have been made for building a new section which will link with the Malawi system (para. 23) at the Zambia border at Mchinii. Such a link from Mchiniji to Chipata may be economically justified, but a track further northward than this to link with TAZARA is probably not, since it would have to climb very steep gradients from the Luangwa Valley to the plateau, with high construction and operation costs. A feasibility study seems required. Transport Services 39. Carrving capacity is apparently enough for the country's needs. However, certain policies, regulations, and procedures of some parastatals impede the rendering of adequate services. NAMB transport improvement propo- sals are made in Part II--Agricultural-Related Transport. More general recom- mendations are:  ANNEX 12 Page 15 (a) Parastatal tariff policy (paras. 17 and 18): This is the aspect of transport services which requires most careful attention. Both road and railway tariff levels for various commodity classes should be analyzed. The interrelationships among them, the relation to operating costs and subsidies--if applicable--and immediate and ultimate effect on the overall economy should also be analyzed. This suggests the need for a traffic study, with an evaluation of all parastatal transport organization operations. (b) ZTRS dissolution (para. 19): The rationale for ceasing 7T=S o-er3 tions should be identified in the study mentioned above. However, a decision will certainly be required beforehand, in view of the imminent opening of the Tan-Zam railway. In any case, ZTRS' vehicle fleet will remain available to Zambia, a fact that should be remem- bered when estimating additional trucking capacity requirements. (c) Road traffic regulations (para. 21): All regulations and enforce- ment should be reviewed. Implementation of some of the following suggestions should improve road transport services by private operators: Decentralization: licensing in other places besides Lusaka should ease the procedure. Road Traffic Commissioner's authority: he is allowed to make decisions "as he may think fit," and in license granting it is not clear how much influence the Road Transport Panel has. It should be determined whether this leads to arbitrari- ness, and, if so, the situation should be corrected. Goods road-service licensing conditions: the restrictlveness of these conditions hampers transport activiites. Gradually, freer operations should be permitted. 1/ / For instance, we would suggest deleting the following from licenses: a) License specification of route(s)/area and type of goods: a strict specification does not allow for the operational flexibility that would ease, for instance, seasonal peaks. Neither does it help to ensure services on non-profitable routes because there is 'no incentive to apply for a license to operate on them. A broad specification would have the same effect as no specification. b) Rate specification: the broad influence of the ZTRS, CH and NAMB, which establish their own fares, seems to outweigh the rates established by the RTC for independent operators. However, if other rates were to be the charged, they should be established by free competition. At most, if the RTC thinks that the truckers would overcharge if at limit is not imposed on them, a methodology for determining rates cou]d be set up and the RTC could sample control the rates charged for some services to see that they do not exceed their estimates. c) Short-term license: since subcontractors to parastatal organizations are almost automatically given a license once they have secured a con- tract, the issuance of these licenses represents nothing, more than an administrative burden on the RTC. The regular license and fitness certificate, required anyway, should suffice.  ANNEX 12 Page 16 Bus tariffs: the only established tariff per km does not take into consideration the type of road on which the service is provided. Allowing tariffs to reflect costs would motivate operators to provide services on low-standard roads. 1/ Axle-load control: most operators, including the parastatals, load more than 10 tons per axle in order to maximize benefits per trip. The Roads Department is in charge of operating existing weighbridges, but its staff does not have enforcing capacity and only operates the weighbridges a few hours daily. As a first measure to improve axle-load control, management of the ZTRS, CH and NAMB should ensure operators' compliance with the weight limits at loading points. In addition, the existing weighbridges should be operated by RTC officers 24-hours a day or on an ad hoc basis, and contravening operators should be penalized according to the law. Fees and fines: in order to determine the economic adequacy of these fees and fines, they should be reviewed, taking into account other taxes that vehicle operators pay, including fuel tax, import duties, and income tax. 40. Although to a certain extent Zambia has to accept international transport services as given, the country's approach to providing them seems satisfactory (paras. 23-25). Considering that more than 50% of Zambian traffic went through Rhodesia before 1973, the rerouting effort has been rather successful. In 1973, import tonnage decreased about 40%, partly due to deliberate restrictions on import licenses, while export tonnage continued as previously. Even so, transport costs increased considerably, from about K 67 million to K 87 million, 2/ and the increase has been financed almost entirely by the Government. However, the effects and desirability of the transport subsidy that the Government grants to imports should be reviewed. Its impact on agriculture is discussed in para. 42. 1/ Presumably, in charging the same rate per km the intention is that all passengers be treated equally. But private operators avoid providing services on low-standard roads (unless they operate simultaneously on good and poor routes, cross-subsidizing the latter), with the result that people in remote areas may lack transport services unless UBZ pro- vides them at a loss. People might prefer paying a higher fare which would be attractive to private operators, instead of doing without services. These aspects should be reviewed. 2/ This resulted f rom higher inland transport costs, higher port charges, greater airways utilization, and a change in import origin. Many imports previously bought from the Republic of South Africa are now purchased in Europe, which was the origin of about 55% of Zambian imports in 1972, but of 80% since 1973.  ANNEX 12 Page 17 Agriculture-Related Transport Internal 41. NAMB virtually determines the framework for internal transport, Some deficiencies in its operations, result in a trucking capacity shorltage. Although some officials even suggest that NAMB should have its own fleet, the following recommendations concentrate on improving NAMB effectiveness. If implemented, it seems likely that truck availability will increase and transport needs and costs will decrease. (a) Agricultural pricing policy (para. 26): if uniform product prices were eliminated, production would increasingly reflect the comparative advantage of areas, uneconomic transport of low value crops would be avoided, and total transport requirements reduced. Moreover, with crop returns no longer insulated from transport costs a farmer would be encouraged to seek the lowest cost means of transport and may even feel encouraged to take care of his own transportation needs. Competitive, more efficient and overall lower-cost transportation services would develop. Also, the introduction of a seasonal pricing system would encourage on-farm storage, enhance farmers' incomes, and spread peak transport demand. Simulta- neously, NAMB's burdens would decrease and the agency could then operate as a clearing agent. Regional transport shortages (para. 27) would be alleviated. (b) Planning and coordination (para 29): an improved estimate of local consumption needs would make it possible to avoid exporting more than surplus produce from any area, which requires subsequent imports of the same type. This would eliminate many costly and unnecessary trips. Better coordination in timing loads in both directions (fertilizer and other inputs and crop extraction) would also avoid empty trips. In order to carry out these improvements, depot availability (capacity, type and location) should be reviewed. (c) Trucker contracts (para. 29): NAMB contracts specify the route and tons each truck will carry. Once the operator has obtained a con- tract, he has no incentive to provide services quickly. If, instead, contracts specified only the route, and mentioned the total tonnage to be moved on it by all trucks, the various truckers for that route would have to compete to carry as much as possible of that tonnage and therefore would probably proceed faster. Axle-load control would then become even more important. An arrangement should be worked out with the RTC to eliminate seasonal licensing requirements (but with registration remaining obligatory). (See para. 39, Goods road-service licensing conditions.) Only smaller trucks should be granted the routes on low-standard roads. At present the 30- or more-ton trucks travel on any type of road indiscriminately, which breaks up the lower-standard roads and increases vehicle operating costs and number of breakdowns.  ANNEX 12 Page 18 (d) Decentralization (paras. 29 and 30): most contractors have to go to Lusaka to get contracts and collect subsequent payments, and this causes unnecessary trips for contractors who serve remote areas locally. The possibility of contracting and paying in re- gional NAMB headquarters should be investigated. Many international agricultural exports have to be arranged through NAMB. Generally, they are first sent to Lusaka and subsequently exported. This involves excessive trips, since some products have to come and go over the same route. The possibility of avoiding this should be examined. Both these problems could be solved by effective decentralization of administration and financial control. (e) Loading/unloading (para. 30): these operations can be under taken only by NAMB staff, are performed slowly, and result in truck queues and corresponding delays and costs, which worsen seasonal peaks, and raise trucking costs by as much as 100%. In addition, trucks are loaded with more weight than the RTC has authorized them to carry. NAMB staff should be properly trained and supervised, and perhaps some operations should be mechanized in order to accelerate the operation. The staff should be responsible for loading no more than the bags equivalent to the truck's net load-weight limit. (See para. 38, Axle-load control). Simultaneously, truckers could perhaps be authorized to assist with loading and unloading. (f) Transport tariffs (para. 31): Present NAMB tariff levels seem unrelated to operational costs and are not differentiated by the type of road on which services have to be provided. Adequate finan- cial operating cost estimates should be obtained for various sizes of trucks on different road surfaces and tariffs established for trips on earth, gravel, and paved roads. Differentiation by type of product does not reflect the weight-volume relation. Thus maize transport is the most profitable to, and preferred by truckers, who try to avoid hauling cotton, for instance. Therefore, the weight-volume ratio should also be taken into account for fixing tariff differentials. International 42. At present, import transport costs are partially subsidized by the Government in order to keep internal prices as low as possible. This policy to protect consumer prices means that, at the same time, an artifically low import opportunity cost reduces incentives to produce local substitutes. For instance, the wheat import subsidy of about 30% (para. 32) is probably enough to offset interest in exploiting local potential. Even worse, NAMB producer prices are even lower than border prices. 43. If a policy of subsidizing consumer prices is to be continued, Zambia may be better off subsidizing its own agricultural activities rather than imports. Even if agricultural imports are replaced by local production, a considerably underutilized export capacity remains available, including  ANNEX 12 Page 19 air services, and the possibility of agricultural exports, at almost no additional transportation cost to the country, should be considered. In order to encourage production for export, agricultural exports could be granted a subsidy, perhaps by reducing transport costs. Even a reduced tariff would decrease Government's overall subsidy cost. However, real costs of inputs and outputs should be calculated in order to evaluate the net effect of the subsidies, at various levels, on the producers. An effort should also be made to optimize coordination of transport and agriculture policies. PART III--ROADS AND ROAD TRANSPORT Roads Existing Network 44. Zambia's road network is one of the most developed in Africa, both in density per km2 or per inhabitant, and in quality. It comprises about 34,500 km of roads, of which about 4,000 km are paved, 7,400 km are gravel all-weather roads and 7,200 km are classified earth roads. These roads are maintained by the Roads Department (RD) of the MPTW. The remaining 15,900 km are unclassified earth roads and are maintained by the Rural Councils (RC). No updated and reliable inventory exists for these roads, and the 15,900 km figure is merely an RD estimate. Although there are also local tracks, no details are available about them. 45. The Roads and Road Traffic Act (RRTA) 1/ classifies the roads as interterritorial, main territorial, district, branch, rural, and estate roads. The Minister of .IPTW designates the roads and assigns each to a corresponding highway authority. A summary of the designated network length by type of road and by province is given in Table 1.1; the corresponding standards are shown in Table 1.2, and the generally accepted functional definitions of roads are given in Table 1.3. 46. The network has been developed and upgraded according to traffic requirements. Thus, the three provinces along the line-of-rail, with the highest population density and, until recently, the only main line for inter- national traffic, have the highest density of roads per km2 and the lowest length of road per capita. The provinces with more scattered populations have lower ratios of m/km2. Their roads are also largely lower standar!d, but the relative length per inhabitant is longer. The national averages are about 50 m/km2 2/ and 7 m/person. Densities by province are shown in Table 2. 1/ Chapter 766 of the Laws of Zambia. 2 Compared with 630 m/km in USA, 70 in Kenya, 20 in Tanzania, 30 in Zaire, 190 in Rhodesia.  ANNEX 12 Page 20 47. The main paved network includes the north-south road, which runs from the Rhodesia border at Livingstone to the Zaire border at Chingola (885 km) and is parallel to the line-of-rail; the Great North Road which branches off from the north-south at Kapiri Mposhi and reaches the Tanzania border at Tunduma (810 km); the Great East Road which extends from Lusaka to the Malawi border near Chipata (590 km); three western links, one from Lusaka to Mongu (585 km), another from Chingola to Solwezi in the north (180 km), a third from Livingstone to Shesheke in the south (180 km); and, finally, a southern link to Rhodesia (80 km) and a paved section in the Luapula Province, from Mansa to Chembe (80 km) (Map IBRD 11509). 48. Traffic density on the highways increases near urban regional centers, especially close to Lusaka. The main north-south road carries the highest traf- fic volume, in some sections about 3,500 vpd, 80% of which is light vehicles, and circulates in congested flow conditions. The other main roads generally carry not more than 600 vpd, but on these roads heavy vehicles account for 50% to 80% of the total. On the all-weather gravel roads, traffic is usually below 200 vpd. Unclassified roads serve few vehicles but reflect heavy sea- sonal variation as they are mainly related to agricultural activities. Road standards are generally adequate for traffic requirements, but the lack of maintenance endangers continued adequacy. Recent Developments 49. Zambia's authorities previously focused their attention on develop- ing the primary network first, and only now is emphasis shifting to improving or opening local lower-class rural roads. During the 10 years since independ- ence, the considerable amount of K 170 million has been spent on road construc- tion and about 2,750 km of the existing 4,000 km of paved roads have been built, 800 km of them in the first three years (1972-1974) of the SNDP. In addition, 2,200 km of gravel roads have been constructed or reconstructed. 50. The SNDP is very ambitious and includes main road projects (includ- ing some begun previously) at an estimated cost of K 67 million, excluding the cost of the externally-financed Samfya-Serenje Road. Actual cost esti- mates for the road program vary from K 86 million (MPF) to K 118 million (MPTW4). However, the former fast pace of road improvement has steadily slowed, and only about 25% of the SNDP was implemented by 1974 when 60% of the plan period had elapsed, as shown in Table 4. The SNDP also includes K 23 million in its Provincial Investment Program for district roads, bridges, and buildings (Table 5), but no information on implementation status was forthcoming. Short road sections, not under the SNDP, have also been initiated and completed. 51. Since 1962. traffic on this improved network has been increasing at an average of 7%/annum. and at about 20%/annum on the main roads, even before the border was closed. The size of heavy vehicles has also gradually increased, and units up to 50 tons use the network.  ANNEX 12 Page 21 Current Plans 52. Although only two years of the plan period are left, about 75% of the SNDP remains to be carried out. Furthermore, the MPF has added new main road sections to be upgraded and expects about 30% of the program to be carried out after 1976. Because this implies annual 1975 and 1976 budgets at about 3-times previous levels, the implementation rate will probably be slower than MPF expects. 53. Mainly, the plans call for the upgrading to paved standards of main-road extensions and branches in areas not in the line-of-rail. These extensions and branch roads are required for agricultural development as much as the local feeder roads which are provided for under the Provincial Investment Program, in order to facilitate transport of required inputs and access to markets over the long distances between production and consumption centers. The most important roads to be upgraded are links to the Great North Road, from Serenje to Samfya and from Mpika to Kasama and to Mbala; the extension of the main road near the Zaire border from Solwezi to Ikelenge in the North Western Province; the extension of the Great East Road from Chipata to Chama following the Malawi border, and a connection from Mongu to Senanga in the Western Province. The direct link between the Copperbelt and Luapula, in Zaire, is also being paved. The MPTW has additionally indicated the advantages of paving several road sections branching off from the main north-south road, some short access roads that carry about 150 vpd, and the sections from Mansa to Kawambwa and from Mansa to Samfya in the Luapuia Province (Table 4). In addition to the SNDP, the RC prepare plans on an annual basis for roads of local importance. Related Institutions 54. Several institutions deal with road construction and maintenance: the MPTW, through its Roads Department (RD), the Rural Councils through the Public Works Department (PWD), and, to a lesser extent, the Ministry of Rural Development (MRD). The Minister of the MPTW allocates roads to RD and RC. The Mechanical Services Department (MSD) of the MPTW is in charge of purchas- ing, maintaining and repairing all Government-owned equipment, but the agen- cies can utilize private services instead of MSD, and the agencies, especially the RC, do so, since in the past the MSD has not been very efficeint The Government has taken action to improve this department and better services should be forthcoming. 55. Roads Department of MPTW. This Department is responsible for main- taining all the roads, bridges, airfields, and harbors supervised by the Ministry, that is, maintenance of 18,600 km of designated roads and of minor harbor installations such as Mongu, Mpulungu, and Samfya; it is also responsible for the implementation of national public-works construction plans. Maintenance and construction of airfields is carried out on behalf of the Department of Civil Aviation, from whom funds are warranted. This sec- tion will deal only with those aspects of RD that pertain to roads.  ANNEX 12 Page 22 Staff and Training 56. RD organization is shown in Chart 1. The Department has a total of about 4,900 employees. The approximately 4,400 daily-paid posts, as well as about 400 industrial and administrative posts are generally filled, but at times as much as 50% of the 175 technical and engineering positions remain vacant; there is, for example, no engineer in the design office. This situa- tion seriously hampers the activities of the Department. 57. There is a shortage of qualified Zambians. Only one of the 20 top technical positions is filled by a Zambian executive engineer, but there are 6 national engineering assistants. The Department runs a fully-equipped Roads Training School that can accommodate up to 50 students per course. A variety of subjects at various levels are taught, and courses normally last from one to three months. The school has been operating for more than 10 years and has gradually increased the number of graduates from 61 in 1965 to about 170 a year since 1972. Further training is encouraged and already a number of the engineering assistants have attended diploma courses at the Zambia Institute of Technology at Kitwe, and some Zambian technical staff are studying for an engineering degree at the University of Zambia. 58. The Government intends to progressively Zambianize the Department, but the present situation is likely to continue for several years, even if training programs are accelerated, because the private sector attracts most graduates (after they have served a few years in Civil Service) and resident expatriates, due to the Zambian Civil Service salary structure and level. In addition, inadequate overseas advertisement makes expatriate recruitment difficult. Another complicating factor is that expatriate recruitment has to proceed continuously due to, among other factors, the short contracts offered. A housing shortage also imposes restrictions. Financing 59. Funds for capital works (new construction or improvements) are gen- erally allocated directly to the Department, although certain projects are carried out on behalf of, and financed by, other Ministries or on behalf of provincial administrations using Development of Feeder-Road Funds. The latter funds, however, generally remain directly under the control of the respective Provincial Permanent Secretaries. Authorized funds for this purpose amounted to approximately K 2 million in 1974.  ANNEX 12 Page 23 60. For recent years, funds spent by RD have been as follows: Roads (K million) Capital Recurrent Total 1971 15.3 8.3 23.6 1972 12.3 5.3 17.6 1973 4.3 4.8 9.1 1974 (authorized) 8.3 5.6 13.9 61. Detailed expenditures for 1973 are shown in Table 11. Of the low capital budget of K 6.2 million, only K 4.3 million was spent, surprisingly low compared to previous years' levels. Planned expenditures comprised 42% of the MPTW capital budget, or 6% of the national budget. In 1974, the RD had 37% of the MPTW authorized capital expenditure, or 5% of the total. The recurrent expenditure is so far below requirements that road maintenance is endangered. Planning and Design 62. The planning unit undertakes feasibility studies, which have been primarily technical up to now, with economic considerations limited largely to traffic counts. When a road reaches the upper-limit traffic design level (Table 1.2), it becomes a priority for upgrading, and the work is undertaken as funds are available. Traffic counts are conducted periodically on the roads that the RD maintains, and new counting stations are installed on those low-class roads where traffic apparently justifies road upgrading. In 1969, a transport survey covering all modes was carried out by BCEOM, which made recommendations for an investment plan, but no similar survey has been carried out since the border closure. Little planning coordination exists among the several ministries involved or affected by road construction. 63. The design office prepares the designs for smaller works, stuch as widening or upgrading. Most feeder road projects, aerodrome improvements, and minor bridges are prepared by the RD when possible. There has been a growing trend for other ministries to request designs, but the RD lacks the staff necessary to execute them. Important projects are designed and super- vised by consultants. Road standards are specified in Table 1.2. Construction 64. Expenditures for construction by force account are almost as high as those for work done by contractors. Capital funds allocated in 1974 amounted to K 8.3 million, 2 million more than in 1973 but still low compared to the K 15.4 million allocated in 1971. This is reflected in a widely varying volume of ongoing works. As a result, the number of contractors has actually decreased in past years and the market has become increasingly dominated by those few who can risk investing in equipment beyond average requirements. To finish the SNDP on schedule, the rate of work would have to be tripled.  ANNEX 12 Page 24 65. According to the RD annual reports, the construction rate has been as follows: Construction (km) Class I ~II III By Contract 1971 301 - 103 1972 459 - 200 1973 150 15 97 By Force Account 1971 33 23 86 1972 - 11 109 1973 155 66 Maintenance 66. The RD is supposed to maintain about 18,600 km of rural roads and, in addition, roads within major urban areas, such as Lusaka, Ndola, and Kitwe. The RC can request that the RD take over feeder roads on which traffic has increased or which have been upgraded, but this is only done to the extent that funds are available and is generally avoided. Maintenance is implemented on a decentralized basis, with headquarters in each province. 67. For routine maintenance, the areas are split up into 125 zones, each including approximately 180 km of road. Road camps are located about 80 km apart on main roads and are provided with a minimum of a grader and a lorry and about 20 persons under a Road Foreman. (A Road Superintendent is responsible for the supervision of four road camps and he reports to a Road Inspector under the Provincial Road Engineer.) Present yearly maintenance cost estimates 1/ per km are K 230 for paved roads, K 190 for gravel roads and K 60 for earth roads. 68. Periodic regravelling, on an average of every four years, is some- times carried out departmentally, using provincial regravelling units if sufficient equipment is available, or is alternatively handled by contract. An individual contract rarely costs more than K 150,000. All paved roads are designed to be resealed in three- to six-year intervals, depending on road standards and traffic wear, or to be covered with at least 5 cm of premix within ten years of construction. In practice, however, only when resealing becomes urgent are funds made available for this purpose. The work is generally carried out under contract, with RD design, documentation and super- vision. Periodic maintenance has taken place as follows: 1/ November 1974.  ANNEX 12 Page 25 Betterment (km) Resealing Regravelling Other By Contract 1971 - 947 - 1972 30 201 173 1973 57 175 56 By Force Account 1971 165 144 - 1972 80 356 4 1973 - 207 36 69. Despite awareness of the importance of maintenance both in the MPTW and in the MPF and the increasing traffic volume and length of roads to be maintained, authorized expenditure has decreased continuously and is now only about half the required level, or K 5.6 million in 1974 compared with a requirement of K 11 million (based on apparently low unit costs). Continuing maintenance activities at this inadequate level threatens the capital invested in the road network. 70. A serious shortage of plant and vehicles, intensified by a lack of spare parts, hampers RD activities, especially maintenance. According to the decentralization policy, the provinces are to become self-sufficient in the supply of vehicles, spare parts, and adequate maintenance. Although each maintenance zone should ideally be equipped with 1 Land Rover, 1 flat truck or tipper, 1 grader, 1 front/end loader, and 1 water tanker, only 167 vehicles are serviceable. The RD evaluated its additional needs at 270 vehicles and more funds will have to be made available to achieve this. The RD generally has to hire vehicles from private firms and from the MSD, which further reduces funds available for maintenance. Normally, only the MSD should repair and maintain RD vehicles. 71. Besides poor maintenance, the roads suffer from the effects of overloaded trucks. To control weights, RD has installed 6 weighbridges since 1971, at Kafulafuta, Kapiri Mposhi, Mpika, Tunduma, Mwami, and Solwezi, and another is planned for Mumbwa. However, these weighbridges operate only during working hours and when offending drivers are detected, the RD agents can do little about it since they are not law-enforcing agents and thus cannot order drivers to offload. Public Works Department of Rural Councils 72. The Public Works Departments (PWD) of the RC are responsibie for all types of works of local importance in their districts, including construc- tion and maintenance of the roads for which they are designated authiority by the MPTW. Staff 73. The PWD generally has a Works Officer, an Assistant Senior Works Officer, an Assistant Works Officer and a variable number of Works Foremen,  ANNEX 12 Page 26 on a permanent basis, and equipment operators. People with the broad experi- ence required to carry out all kinds of works are usually unavailable or dif- ficult to attract due to low salary levels. So, to carry out the road works, a contract is generally made with an experienced man in the district who, on a temporary basis, subhires and supervises required unskilled labor. Financing 74. The RC budget is about K 5 million per year. About 75% of this revenue is collected from the beer surtax. In theory, the MLGH is to allocate half the resources according to population in each district. The other half is to be distributed according to deficits remaining after the population allocation, that is, the most active in presenting projects would obtain more funds. But in fact, funds are actually allocated on the basis of the 1969 budget, increased by about 5% each year. About 20% of the total is assigned to roads. This means that there is little relationship between needs and resources, and funds are generally less than RC requests. So the RC is then eager to transfer roads to the RD for maintenance. The MLGH has prepared an estimate for feeder roads maintenance per district for 1974, but the lack of information about km of roads maintained makes this exercise of dubious validity. Obtaining approved funds from headquarters has apparently presented no difficulties. The RC even have some flexibility; for instance, if a budget surplus results, it can be reserved for the following year, which prevents interruption of works at the beginning of the year when the new bud- get may still be awaiting approval. Planning and Design 75. As much as possible, the planning process follows the theoretical procedure, which starts at the local level, in accordance with decentraliza- tion policy. Local Village Productivity Committees, meeting twice a month, review proposals and then make recommendations to the Ward Committee, which meets monthly. Projects approved by the Ward Committee are reviewed by the District Development Committee (2.5 meetings/month) and then by the Provincial Development Committee (1 meeting/quarter), which recommends to Parliament which projects should be included in next year's budget. There is almost no coordination with other local agencies which may be undertaking road works in the districts. No designs are made. In most cases, new roads follow old paths or connect population centers. Sometimes, RD branch assistance is requested, but this has proven ineffective since the recommendations they give tend to be of such a high standard that they are beyond RC implementation possibilities. Works 76. Due to the low standard of the roads under the RC, no clear differ- entiation exists between construction and maintenance, and both are really a sort of upgrading. Costs differ from district to district, but they are usually low: about K 120/km for clearing, K 150/km for stumping, or K 230 for  ANNEX 12 Page 27 opening a km of road. Generally, the work is done with minimum equipment. Maintenance costs vary from K 20 to K 50 per km for unskilled labor. Even so, the resulting roads seem quite satisfactory in some regions and aie used even by heavy vehicles, which the RC has no authority to stop or to deny circulation rights. Provincial Agricultural Offices of MRD 77. Extension workers travel in their areas, noting where farmers are beginning to produce enough to justify a new access road. When a nes,' road is opened, it is generally done on a self-help basis or with a grader from the Land Use Services Division under the Provincial Agricultural Office. New roads should be maintained by the Rural Councils, but in practice, because the RCs are short of funds, they are frequently assisted with MRD equipment. No information of how many km these offices are maintaining is available. Mechanical Services Department of MPTW 78. This Department buys and repairs all the Government equipment and vehicles, and is highly centralized even when its depots are located in the provinces. It has not been functioning well, mostly because of staffing and funding constraints. MSD has the same kind of staffing problems as RD, and, in addition, its apprentice system has been discontinued, so MSD now depends on graduates from other institutes. In 1973, MSD requested K 6.2 million for maintenance and repairs, but only K 5 million was authorized. The inadequate funding of MSD has produced a shortage of spare parts, made it imp, ossible to subcontract major overhauls to dealers, and virtually precluded the buying of equipment since 1971. For example, only K 3 million was authorized for pur- chasing new vehicles in 1973, as compared to the K 15 million requested. As a result, vehicles operating uneconomically have been kept in service. Road Transport Regulations 79. The Roads and Road Traffic Act, plus subsidiary regulat,lons, are very comprehensive. 1/ A Road Traffic Commissioner, assisted by a Deputy and an Assistant, all appointed by the Minister of the MPTW, is in charge of enforcing the regulations 2/ and appointing other officers (driving examiners, vehicle examiners and road traffic inspectors) as required. Licensing officers for specific areas are designated by the Minister. 1/ These are stated in Chapter 766 of the laws of Zambia. 2/ Axle-load limit compliance is not verified by the RTC staff, but by the RD.  ANNEX 12 Page 28 80. Only those aspects of traffic regulations which are directly related to the transport of goods and passengers, excluding safety requirements, will be considered below. Vehicle Licensing 81. All vehicles must be registered and licensed. Initial applications for registration are made to the RTC by the owner of the vehicle and include a certificate by the manufacturer or customstating that the vehicle conforms to the specifications of the Act. After a fee is paid, a registration number and a registration book are issued. The officer may request an examination of the vehicle, and afterwards a test certificate is issued. Change of ownership also has to be registered within 14 days. The Director of Roads may exempt certain vehicles from licensing requirements. Vehicle licenses last 12, 6 or 3 months, and the owner pays respectively 100%, 50% or 30% of the established fees. The RTC may remit short-term license fees, such as those granted for carrying maize or farm produce from rural areas to collection centers. This can be done without a public sitting but the specified roads/areas must be published in the Gazette. Exclusive passenger-service concessions may be granted by the Minister. Revenues from fees and fines, which are assigned to General Revenues, are listed in Table 6. 82. Public service vehicles require a road service license. An inter- ested party presents an application to the Road Transport Panel.1/ The appli- cation is published in the Gazette at least 40 days before a decision is taken to allow any objections to be presented. Then the RTC and two members of the RTP decide on it during a public sitting in the Lusaka City Council chambers. (This group can issue licenses for Zambian citizens, but the Minister's approval is required for non-Zambians.) Several factors are considered in deciding whether or not to issue the license: the suitability of the proposed route(s); 1/ The application form for a road service license has to state: 1) Type of service to be provided, that is, "letting vehicles on hire" or "service of conveying for reward"; 2) Particulars of the road(s) or area it proposed to serve; 3) Various financial statements; 4) Reasons for alleging that existing transport on the road(s) or in the area proposed to be served, is inadequate; 5) Detail for each vehicle to be used: registration number; year of make; type and maximum tonnage/passengers it is desired to carry. Indication also of which vehicles should be used exclusively as replacement for a break-down of any other listed; 6) If a bus service, time-table or frequency of the service and the time to be taken by it should be given; 7) Rates to be charged for the proposed service (may be withheld from public inspection.  ANNEX 12 Page 29 the adequacy of existing transport services on the route in question and the extent to which they may be adversely affected; whether the proposed service is in the public interest; the applicant's qualifications; any objections raised by those already providing services, by the authorities of the affected zone, or by the probable public; and, receipt of a certificate of vehicle fitness which is valid on the day the license goes into effect. 1/ Finally, the RTC decides the conditions of the license "as he may think fit". 2/ A license usually takes three months to be processed. When granted, a notice is pub- lished in the Gazette. Licenses are valid from one to five years, are not transferable, except by the Minister's authorization and may be revoked or changed if the RTC verifies that the specifications have not been complied with. The RTC keeps a register of all valid road service licenses, which is open to the public. If a license is not granted, appeals can be submitted within 30 days of the decision to the Road Service Appeal Tribunal and afterwards to the High Court. Any person operating a public service vehicle is supposed to keep related accounts as prescribed by the RTC and produce these for in- spection when requested. No goods vehicle or trailer licensed as private may be rented or used for commercial hauling. Vehicle Weights 83. The MPTW is responsible for fixing the maximum weight that may travel on the roads. 3/ The Minister issues regulations prescribing the maximum laden weight and the maximum axle weight, although the Director of Roads may grant exemptions. 4/ Part III, Section 12 of the Construction, Equipment and Use Regulations prescribe that: 1/ Fitness certificates are valid for 4 or 12 months when passenger or goods, vehicle, respectively. (It seems that the procedure for obtaininig them is slow.) 2/ The license contains: 1) Type of service; 2) Period of validity of the license; 3) Route(s) or areas where the service may be provided; 4) Base from which the service is to be operated; 5) Goods that may be carried; 6) Other uses for which the vehicle(s) may be let on hire; 7) Identification of each vehicle: registration mark, licensEd carrying capacity of the tractor or trailer if any, authorization date, number and date of expiring identify certificate, and if it is a "replace- ment" unit; 8) Conditions: that any rates that may be fixed for the letting of vehicles on hire be adhered to, as well as RRTA and its regulations; 9) For passenger services: frequency and/or time-table(s). 3/ The Act also prescribes that local authorities be consulted; this should probably be deleted because only a uniform weight limit throughout the country should be allowed. 4/ For instance, the CPO has allowed overloads in order to solve rerouting problems with the existing trucking fleet.  ANNEX 12 Page 30 a) "the maximum laden weight of a vehicle shall not exceed the manufacturer's permitted gross weight of the vehicle, or 14,000 lbs. whichever is less," and b) "the maximum weight carried on any axle of a vehicle shall not exceed the manufacturer's permitted axle weight, or 10,000 lbs. 1/ whichever is less." 84. The gross weight--the maximum weight of goods or maximum number of passengers--authorized by the vehicle examiner during the fitness tests has to be conspicuously shown on the vehicle. If the limits are exceeded, "the operator is guilty of an offense." Actually, the ten-ton axle weights are often exceeded, but the Regulations do not give the vehicle examiner the authority to force the operator to unload or to pay the established fines. Vehicle Fleet 85. In 1973, there were 132,000 licensed vehicles in Zambia, or 3 per 100 inhabitants on average. This is a high ratio for an African country 2/ and reflects the relatively high income per capita. About 80% of this fleet consisted of light vehicles and less than 1% of buses. Trucks and trailers accounted for 15% of the total, or about 19,450 vehicles. From 1968-72, the fleet increased almost 9%/annum, with only slight variations by types (Table 3.1). Most vehicles are licensed in Lusaka, and no fleet statistics were available by area. Trucks added to the fleet are increasingly larger, but very few small units suitable for feeder roads are available. Yearly new registrations are considerable, about 12% of the fleet (Table 3.2). Although 85% of the new registrations are recorded in offices located along the line- of-rail (Table 3.3), this may not reflect regional vehicle availability. Vehicles outside the line-of-rail are probably not registered. 86. An important problem encountered by both private and public sectors is the difficulty of obtaining spare parts. Road Haulage 87. Trucks and trailers may be licensed for private use or for commercial purposes. Trucks with private licenses are theoretically not allowed to per- form any public road service. 88. As mentioned earlier, the Government prefers that public road services be performed by private operators but considers it to be its duty to deal with emergency situations to assure continuity of import-export flows 1/ This allowance seems very low. It may have been increased by subsequent amendments, since the RD considers the axle-load limit to be ten tons. This has to be verified. 2/ The vehicle-per-100-persons ratio is about I in Kenya, .5 Tanzania, 3 in Rhodesia, 1.4 in Zaire, and 53 in the USA.  ANNEX 12 Page 31 at transportation costs similar to those in effect before the border closure and to ensure passenger services which private operators would probably not undertake. This continuity is maintained through the parastatal National Transport Corporation (NTC) composed of 4 subsidiaries: CH, ZTRS, UBZ and Bulk Carriers of Zambia. About 70% of the heavy vehicles in Zambia have private licenses. There is a large number 1/ of private trucking companies which perform public services, many of which operate as subcontractors to ZTRS and CH (which secure a license for the operator if he does not have one). Apparently there are only two transport cooperatives and no trucking union. 89. The extent to which truckers set their own tariffs is not clear, but ZTRS, CH and especially NAMB determine the overall level by contracting transport at their established rates. Contract Haulage (CH) 90. In 1970, the Transport Holdings of Zambia Company, initially called Central African Road Services (CARS), became a subsidiary of, and wholly- owned by NTC. Re-named Contract Haulage (CH), its functions are internal freight distribution and haulage in connection with the Republic of South Africa and Rhodesia. When the border was closed, the CPO purchased 400 30-ton trucks and gave them to CH for operation to assist in the emergency. 91. CH has its headquarters and a central workshop at Lusaka. It has its own fleet but hires subcontractors if necessary, paying them 90% of the fares received. Workshop services and fuel are made available to the subcontractors and these costs are deducted from payments due them. CH has three divisions, Freight South, Malawi Division and Northern Division. All carry internal freight at rates proposed by the company and approved by the MPTW 2/ and agricultural products for NAMB at its rates. The NortherrL Division also provides services to ZTRS and is supposed to make the empty trips from Zambia to Dar es Salaam, the cost of which is borne by CPO. The Malawi Division operates on the Great East Road particularly. Under an agreement with United Transport of Malawi, each company carries 50% of the international traffic in both directions, at tariffs agreed to by both Gov- ernments. CH has 4 mobile workshops operating on this route. 92. Since 1973, CH has operated at a profit. Operating costs anld tariffs are shown in Table 9, which indicates the high level of profits, especially at NAMB's rates. Zambia-Tanzania Road Services (ZTRS) 93. This company was started in 1966, and is 35% owned by the Zambia Government, 35% by the Tanzania Government and 30% by an Italian private company. It was set up to move Zambian cargo, especially copper, on the 1/ In 1968, 165. 2/ The rates are based on those established by Transport Holdings, and have not been revised to reflect subsequent road upgradings on various routes.  ANNEX 12 Page 32 Tan Zam Road until the TAZARA becomes operational. The border closure has increased demand for its services, so it has continued to increase its vehicle fleet even though the railway is expected to start operations in 1975. 94. The company operates efficiently, with headquarters at Lusaka and its own workshops and depots along the route. The staff includes about 2,300 persons, some of whom work in Tanzania. The fleet is composed of about 520 32- or 35-ton trucks 1/ and a similar number of trailers, with which more than 300,000 tons a year were carried even before the border closure. In addition, ZTRS generally has more than 400 trucks under sub- contract, more than 200 of them from CH and the remaining from only seven contractors who may in turn have subcontracted them. ZTRS trucks, both its own and subcontracted, average only four-days travel time between Lusaka and Dar es Salaam. Terminal operations have been greatly improved since 1973. They previously took 5.5 days in Dar es Salaam and 7.9 days in Zambia (13.4 days total), which was reduced to 1.6 and 6 (7.6 days total), respectively, in 1974. As a result, each vehicle can manage four single trips per month. 95. A shortage of qualified drivers seems one of the company's major difficulties. In an attempt to overcome it, ZTRS has established a training school and a payment incentive system, which can add up to K 34 per single trip, by efficiency, express and/or no-breakdown bonuses. 96. ZTRS' immediate subcontractors receive 90% of the tariffs. In 1974, for the first time since its establishment, ZTRS increased its tariffs to K 49/ton of general cargo from Dar es Salaam to Zambia (K 45 to contractors, who in turn are paid within 60 days upon receipt of documentation). ZTRS average revenue (not including commission on contractors) and cost per trip and per km are shown in Table 10. Cooperatives 97. The mission was informed of the existence of only one transport cooperative and one agricultural cooperative with transport facilities. Other agricultural cooperatives rely mainly on NAMB for transport. The Eastern Province Transport Cooperative Association (EPTCA), which consists mostly of people with one or two 40-ton or smaller trucks, operates in the Eastern Province. The second, the Luapula Cooperative Union, assisted by FAO/SIDA, has about 1,300 members (small farmers with one or two ha each), grouped in 9 affiliated societies. The cooperative has its own workshop and one 7-ton lorry for traffic between its headquarters at Mansa and the nine societies, for which K 1/bag is charged. With 12 Land Rovers, about 40 tractors and 15 trailers, it also provides transportation between the nine societies and the farmers. Transport is satisfactory, according to management. Passenger Transportation 98. Any Zambian can apply for a license to provide passenger transport services. According to RRTA regulations, these services can be provided 1i/ They carrv about 30 tons of copper or-25 tons of general cargo.  ANNEX 12 Page 33 only after a license has been granted. But in practice there are many con- traventions. The RTC establishes the fare applicable to each service, which is determined according to distance but without differentiation by type of road on which the service is provided (Table 2). Fares have remained unchanged since 1971. 99. In 1974, besides the parastatal UBZ which accounted for about 51% of total passenger transport capacity, there were many private operators: 52 bus operators for long- and 16 for short-distance runs, and 87 taxi opera- tors for long and 200 for short distances. The Rural Councils are entitled to establish and maintain passenger transport services, but no information on such activities was to be found. Some industrial companies provide trans- port for their employees. 100. Road passenger transportation has increased enormously. For in- stance, there were 20% more passengers and 38% more km travelled in 1973 than in 1974, an effect of favorable economic development, rapid population growth, and increasing urban concentration. However, services provided have also improved as a result of a considerable expansion of carrying capacity. Zambia Railways is also a competitor for passenger transport, but its traffic decreased by 20% from 1971 to 1973. United Bus Co. of Zambia (UBZ) 101. In 1970, UBZ started taking over from CARS the providing of services throughout Zambia. Since June 1974, the company has been divided into two divisions, the Northern Region and the Southern, with headquarters at Kitwe and Lusaka, respectively. Its staff numbers about 4,700 employees ancl the fleet about 600 large buses of various makes. Both are double the 1972 figures. In 1974, approximately 81 million passengers were carried and 46 million km travelled. For vehicle maintenance, UBZ has a main workshop in each headquarters and 12 minor ones. In important cities, branches have been established and managers propose routes to regional headquarters. At present, the company is operating on about 86 local service routes in 10 major cities and on 60 long-distance routes. 102. UBZ is currently operating at a deficit. On the average, ilts cost per km is 30.8, but its revenue is only 30.4. In 1973, taxi services, which also operate at a loss, were introduced. Up to now these deficits have been made up by Zambian commercial bank loans, but the Government may have to pro- vide subsidies for UBZ to repay the loans. 1/ 103. A complete development study of the company was done in 1974 by a MPTW specialist, 2/ which made recommendations for its improvement, such as review operations on unprofitable routes, improve staff (including drivers, maintenance specialists, and management), study the possibility of further expansion, and improve terminal facilities. 1/ Due to persistent losses the service was suspended in September 1975. 2/ M. Hromic, "UBZ Development Study," (Lusaka, 1974).  ANNEX 12 Page 34 PART IV--INTERNATIONAL TRANSPORT ROUTES Lobito Route Port 104. Up to 1970 the port of Lobito, operated by the Angolan Government, handled about 1.8 million tons of cargo yearly. 1/ Of this total, Zambian traffic accounted for 17%, or 305,000 tons comprising 7% of Zambian imports and 22% of its exports. In 1973, a UN team estimated that Lobito's share could easily be increased, since the port did not have capacity constraints at this level. In fact, in 1974 the port surpassed UN estimates and handled for Zambia approximately 453,000 tons of imports and 517,000 tons of exports, corresponding to 44% and 55% of Zambia's total import and export traffic respectively. Although in July 1974, the port ship waiting time was ten days, and a congestion charge of 70% was added to the shipping rates, the delay seemed to originate in labor problems rather than in physical port- capacity constraints. 105. The distance by sea from Europe or America to Lobito is about 4,000 km shorter (or about 10 days less travel time) than to East African ports. Therefore, use of Lobito port represents a considerable overall time and cost saving, even though fares to it are not significantly different from those to other ports. Inland Transport 106. The only operating surface transport from Lobito to Zambia is the all-rail route with a 1.067 m gauge. Thus transshipments are not necessary and the route is therefore preferred for bulk commodities and other heavy items. It is composed of: The Chemins de Fer Benguela (CFB), with 1,350 km of track to the Zaire border at Dilolo; the Societe Nationale de Chemins de Fer Zairois (SNCZ) (previously the KDL network), which runs 757 km by electric power to Lubumbashi and 255 km by diesel power to Sakania; and the Zambia Railways which is used for internal distribution and collection. In all, there are 2,362 km of transport to the Zambian border. All three com- panies have working arrangements that allow free international movement. 107. Previously, there was a major bottleneck on this route, the Benguela escarpment section. Within about 386 km from Lobito, the line climbed to its highest point (1,854 m) in very steep gradients that were badly aligned. For instance, there was a 900 m sudden rise between Catumbela and Cubal, and the 60-lb. track could only handle a few cars at a time. However, the Cubal variant, a 128-km track-relocation designed to avoid the problem, was built with heavy duty 90-lb. rail on a gentle alignment. It was finished 1/ No later data are available.  ANNEX 12 Page 35 in 1974 and will enable the CFB to handle considerably more traffic. In 1974, 12 additional diesels were ordered and this will help even more to facilitate transport. Furthermore, the rest of the track is to be gradually replaced and the whole line dieselized by 1985. Further to the east, the SNCZ apparently has no transport constraints. 108. Zambia has no influence on the tariff rates but enjoys progressive rate reductions with increased freight. Zairian and Zambia traffic account for more than half the cargo handled. The total capacity in one direction was estimated as 2 million tons a year. With the Cubal variant, its capacity is even larger than this. This route, like the others, carries more import than export volume, which results in empty outward trips. 109. Transport takes 10-14 days from Lobito to the Copperbelt or to Lusaka. Prior to the complete disruption of the route in mid '75, the CPO routed most bulk imports, including all wheat, and most copper exports this way, because it resulted in the lowest possible transport costs. When political stability is restored in Angola, given the advantage of the newly built Cubal variant and provided that the port labor problems are overcome (para. 104), more tonnage should be carried this way. Dar es Salaam Route Port 110. The port of Dar es Salaam, operated by the East African Harbours Corporation (EAHC), has been handling continuously-increasing tonnage. About 1 million tons were forwarded in 1965 and 2.8 million tons in 1970, of which approximately 400,000 tons or 14% was Zambian cargo. In 1974, about 300,000 tons of imports and 320,000 tons of exports were handled for Zambia through this port. This represented 29% and 34% of Zambia's total import and export traffic respectively, a remarkably-balanced flow causing low empty- running. (These figures can be compared to 37% and 28% respectively, which were predicted by earlier rerouting studies.) 111. An ongoing project of the EAHC investment plan for 1973-76 (whose foreign cost of about $52 million is financed by IBRD and CIDA) provides for construction of three deep-water berths, the modernization of existinlg facilities, and for new equipment. The purpose is to enable the port' to meet estimated requirements through 1980, as estimated in the IBRD apIpraisal. The projection includes a provision for exporting 440,000 tons of Zambian copper in 1975 and up to 640,000 tons in 1980. These amounts could easily be increased, since port import tonnage continues to be about double'that of exports: 1975 1980