Dominican Republic - Road Maintenance and Reconstruction Project

Report No. 1216-DO FILE COPY Dominican Republic: Appraisal of a Road Maintenance and Reconstruction Project June 21, 1976 Latin America and Caribbean Projects Department FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Currency Equivalents Currency Unit = Dominican Peso (RD$) US$1 a RD$ 1 Fiscal Year January 1 - December 31 System of Weights and Measures Metric British/US Equivalent 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (sq km) = 0.386 square mile (sq mi) 1 metric ton (m ton) = 0.98 long ton (lg ton) = 1.1 US short ton (sh ton) 1 kilogram (kg) = 2.2 po-unds (lb) Abbreviations and Acronyms AIYr - Average Dail; Traffic GDP - Gross Domestic Product GNP - Gross National Product DB - Inter-American Development Bank LVI - Lamarre Valois International ONP - Oficina Nacional de Planeaci6n SEOPC - Secretar5a de Estado de Obras Pfiblicas y Comunicaciones UNDP - United Nations Development Program  FOR OFFICIAL USE ONLY DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ......... ....................... i-ii 1. INTRODUCTION ........................................... 1 2. THE TRANSPORT SECTOR ...... ............................. 2 A. General ........................................... 2 B. The Transport Modes .... ........................... 2 C. Transport Policy, Planning and Intermodal Coordination ...................... 4 3. THE HIGHWAY SUBSECTOR ............ .. .................... 6 A. The Highway Network ...... ......................... 6 B. Characteristics and Growth of Road Traffic ........ 6 C. Highway Planning and Financing .................... 7 D. Highway Administration ........................... . 8 E. Highway Engineering ...... .............. . 9 F. Highway Construction . ................. . .......... . 9 G. Highway Maintenance .............. .. ............... 10 4. THE PROJECT .............................................. 11 A. General Description ............................... 11 B. Cost Estimates and Financing ................. ... 14 C. Execution ......* . ....................................... . 16 D. Procurement ....................................... 16 E. Disbursements ....... .............................. 17 5. ECONOMIC EVALUATION ........ ..... .... .*o.. ........... 17 A. General ............................................ 17 B. Reconstruction of the Puente Camu-San Francisco de Macoris Road and Bridges ..................... 18 C. The Maintenance Program ............ .. ............. 19 6. AGREEMENTS REACHED AND RECOMMENDATION ............... ... 20 This appraisal report has been prepared by Messrs. R. Rafloski (Economist) and L. Revuelta (Engineer) and has been edited by Miss V. Foster. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTENTS (Continued) TABLES 1. Importation (1967-1971) and Sales (1970-1975) of Gasoline and Diesel Oil 2. Vehicle Fleet Registration - 1962-1974 3. Road User Charges - 1969-1974 4. Highway Expenditures - 1968-1973 5. Standards for the Puente Camu-San Francisco de Macoris Road 6. Puente Camu-San Francisco de Macoris - Cost per Kilometer 7. Average Daily Traffic and Forecast on Puente Camu-San Francisco de Macoris Road (1973-1998) 8. Vehicle Operating Costs Breakdown 9. Sensitivity Analysis of Economic Returns ANNEXES 1. Time Schedule for Bridge Construction 2. Time Schedule for Road Construction 3. Time Schedule for Workshop Construction 4. 1976-1977 Highway Maintenance Services - Terms of Reference 5. Terms of Reference for Supervision of Construction 6. Proposed List of Personnel for Technical Assistance for a Maintenance Program 7. Schedule of Estimated Disbursements CHART IBRD 9236 - Organization of the Secretary of State for Public Works and Communications MAP IBRD 11248R1 - Dominican Republic - Road Maintenance and Reconstruction Project  DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT SUMMARY AND CONCLUSIONS i. The Dominican Republic relies for its transportation mainly upon an extensive road network, several ports, an international airport, a public railway line and various private railway lines. Despite the need to optimize investments and to reduce the overall cost of transport, the Dominican Republic does not have a formal transport sector policy. ii. The transport situation has been aggravated by an accelerated dete- rioration of the highway network, due mainly to lack of, and improper, mainte- nance; by a general decline in port-handling productivity; and by various transport investment decisions not completely justified or of doubtful value. The Government urgently needs to review the organization of the transport sector in order to: (a) establish a more efficient organization for its management; (b) improve the operation and maintenance of the various modes; and (c) optimize transport investment. Transport planning should be strength- ened, and each transport investment should be economically justified. iii. The proposed project would be the Bank's first transportation proj- ect in the Dominican Republic; its main thrust is the improvement of highway maintenance, procedures and planning. The proposed project would provide for: (a) the reconstruction of 19 km of a high priority road; (b) the necessary rehabilitation, widening or reconstruction of the bridges on the road; (c) a highway maintenance program including purchase of highway maintenance equip- ment, equipment spares and workshop tools and equipment, rehabilitation or reconstruction of workshops, and improvement of road maintenance proce- dures and planning; and (d) consulting services for supervision of the road reconstruction and technical assistance for the maintenance program. A mainte- nance program and the project elements for the rehabilitaiton of roads were identified by the consultants Lamarre Valois International (LVI, Canada) in the UNDP-financed study, "Highway Rehabilitation and Administration Study" (1974). The detailed engineering for the project was prepared by Bank- approved local consultants. iv. The need for a transport sector survey, including a transport master plan and a study of the transport sector organization, is recognized by the Government. This survey is not included in the project because the Government has requested the Inter-American Development Bank (IDB) to finance it. Dis- cussions were held between the Government and IDB, with Bank involvement, concerning the general direction of the study and terms of reference. The successful and timely completion of this survey is a prerequisite to an efficient transport system.  - ii - v. Execution of the project is expected to take about three years and would be the responsibility of the Secretariat of Public Works and Communica- tions (SEOPC). 1/ Consultants contracted under terms and conditions accept- able to the Bank would assist in prequalifying bidders and in evaluating bids and would supervise the reconstruction of the Puente Camu-San Francisco de Macoris Road. The civil works contract to be financed by the Bank would be awarded on a unit price basis after international competitive bidding in accordance with Bank Group "Guidelines". The bridges are to be financed by the Government under a separate contract. The procurement of maintenance equipment and workshop tools and equipment would be made through international competitive bidding in accordance with Bank "Guidelines"; equipment spares orders not in excess of US$10,000 equivalent might be awarded directly to the dealers of the equipment up to a maximum of US$200,000 equivalent. For the consulting services for the maintenance program and supervision of the recon- struction of the road, SEOPC has agreed to engage consultants under terms and conditions acceptable to the Bank. vi. Reconstruction of the Puente Camu-San Francisco de Macoris Road is expected to provide quantifiable benefits by reducing vehicle operating costs. These savings would accrue primarily to commercial vehicle operators and other road users; however, since the implemented project would tend to reduce the rate of increase in road transport costs, the general public is also expected to benefit. The economic return for the civil works is 29%. The new maintenance equipment, equipment spares, workshop tools and equip- ment, plus the estimated annual costs for maintenance, would have an economic return in excess of 20%. The economic return for both of these elements is estimated at 24%. vii. The total cost is estimated at US$8.2 million equivalent, with a foreign exchange cost of US$5.3 million (65%). The foreign exchange element for the road is estimated to be 58%. It has been determined on the basis of analysis of unit prices for each type of work, artd it assumes that the recon- struction would be carried out by a foreign firm subcontracting part of the works to, or associated with, a local firm. The foreign exchange cost of maintenance equipment, workshop tools and equipment would be 100% of their cost, insurance and freight, and the equipment spares foreign exchange cost, expected to be purchased locally, is estimated to be 85%. The foreign cost of consulting services is estimated at 63%. viii. It is proposed that, of the estimated foreign exchange cost of US$5.3 million equivalent for the project, US$5.0 million equivalent be covered by a Bank loan. The Government has agreed to meet the additional foreign and local costs of the project in the amount of approximately US$3.2 million equivalent. The loan would be on standard Third Window terms. 1/ Secretaria de Estado de Obras Publicas y Comunicaciones.  DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT 1. INTRODUCTION 1.01 The Government of the Dominican Republic has asked the Bank to help finance a project costing US$8.2 million equivalent, comprising: (a) recon- struction of 19 km of a high priority road; (b) the necessary rehabilitation, widening or reconstruction of the bridges on the road; (c) a highway mainte- nance program including purchase of highway maintenance equipment, equipment spares and workshop tools and equipment, rehabilitation or reconstruction of workshops, and improvement of road maintenance procedures and planning; and (d) consulting services for supervision of the road reconstruction and tech- nical assistance for the maintenance program. The total project cost is estimated to be US$8.2 million equivalent. The estimated foreign exchange cost is US$5.3 million equivalent, of which it is proposed that the Bank would finance US$5.0 million equivalent. The proposed loan does not include the foreign exchange costs for the necessary bridge works (US$0.2 million equivalent) or for the rehabilitation or reconstruction of the workshops (US$0.1 million equivalent), which may be carried out by force account. The balance of US$3.2 million equivalent in foreign and local costs would be provided by the Government. 1.02 This would be the first Bank-financed highway project in the Dominican Republic. A project identification mission visited the Dominican Republic in early 1971, and, after discussions with the Government and the United Nations Development Program (UNDP), a highway maintenance, rehabilita- tion and administration study, to be financed in part by a UJNDP grant of US$400,000, was planned. An agreement for the study was reached with the consulting firm Lamarre Valois International (LVI, Canada), with the Bank acting as Executing Agency. 1.03 LVI reviewed about 2,000 km of primary and secondary roads and iden- tified approximately 1,200 km requiring rehabilitation or upgrading. LVI also reviewed the need for workshops, workshop equipment and tools and road mainte- nance equipment and spare parts; studied the administrative structure of the Highway Department, its practices and procedures; and submitted recommenda- tions on these items as well as on methods and procedures necessary to imple- ment the recommendations. The feasibility studies and recommendations are contained in the report entitled "Highway Rehabilitation and Administration Study" (1974). 1.04 The main thrust of the proposed project would be the much needed improvements in road maintenance procedures and planning. The civil works are also important, aside from the high economic priority of the road, because the Government needs to strengthen the capabilities of the Highway Department for bidding procedures and supervision of civil works contracts.  - 2 - 1.05 Appraisal of the project was based on the work of LVI; on informa- tion provided by the Government; and on the findings of an appraisal mission comprising Messrs. R. Rafloski (Economist) and L. Revuelta (Engineer), which visited the Dominican Republic in June/July 1974, and again, for updating its information, in March 1976. The report has been edited by Miss V. Foster. 2. THE TRANSPORT SECTOR A. General 2.01 The Dominican Republic occupies the eastern two-thirds of the Caribbean island ot Hispaniola, which it shares with Haiti. It has an area of about 48,700 km and a population of about 4.4 million. Its population has been growing at a rate of about 2.9% per annum over the last ten years. 2.02 The Republic is crossed by four mountain ranges separated by fertile valleys; the most important, agriculturally, is known as the Cibao Valley. The Cordillera Central, the principal mountain range and main watershed, trav- erses the country's central region and contains the highest mountain in the West Indies, Pico Duarte (elevation 3,175 meters). 2.03 The country's economy is based primarily on agriculture, with sugar the main crop; the expansion of the latter has been an important factor in recent growth. Per capita GNP reached about US$520 1/ in 1973 as compared to US$480 in 1972. 2.04 Aside from other agricultural products (coffee, cocoa, tobacco, beef, and rice) and mineral products (bauxite, limestone, gypsum, gold and nickel), 2/ the Dominican Republic also has the climate, cultural heritage, and economic assets well suited for tourism development. Large programs for the construc- tion of accommodations and facilities to increase the number of tourists are being undertaken, including the Puerto Plata project, financed by the Bank, and it is expected that the growth of tourism will be high over the next ten years. The full development of this potential is dependent upon an adequate transport system. B. The Transport Modes 2.05 The transportation system essentially comprises an extensive road network, several ports, an international airport, 16 local airports, a public railway line, various private railway lines, and a private pipeline (Map IBRD 11248R1). 1/ World Bank Atlas (1975) basis. 2/ The large Falconbridge ferronickel plant, which the Bank helped to finance, came into operation in 1971.  2.06 Roads are mainly concentrated in the center of the country, around the axis joining the capital, Santo Domingo, with Santiago, the second largest city and center of the richest agricultural area; a dense road network also exists in the east, the sugarcane-producing area. The main highway network comprises the Duarte highway (in the middle of the country), the Mella highway in the east and the Sanchez highway in the west. Railways are mainly in the east of the country. In general, the climate and, in some areas, the topo- graphy make construction and maintenance of land transport facilities rather difficult. 2.07 Due to the relatively small size of the country and its economic structure (industries in Santo Domingo; agriculture in the Cibao Valley; sugarcane in the east; bauxite in the southwest), transport flows are limited, since the main exports (sugar and ferronickel) are transported by rail or road to the nearest ports, involving hauls generally of less than 100 km. Agricul- tural products from the Cibao Valley and industrial products and imports through Santo Domingo constitute the other important transport flows of the country. The average haul distance is 125 km. The short distances have resulted in a great development of road transport, the mode most widely used. Because the borders between Haiti and the Dominican Republic are closed for normal commercial traffic, there is little or no commerce between the two countries. 2.08 There is no specific information available on tons and ton-km carried by the different modes for both passenger and freight traffic; how- ever, LVI estimates that about 95% of the total internal transport moves by road. Railway traffic represents 4% in freight and an insignificant percen- tage in passengers; air traffic represents 1% in freight and 4% in passengers. (i) Highways 2.09 The highway system is described in Chapter 3. (ii) Railways 2.10 The Government owns and operates 112 km of 1-meter gauge line between La Vega and Puerto Sanchez on the northeast coast. A 1.6 meter gauge line, about 100 km long, running from Haina near Santo Domingo northward, is operated by sugar companies. Other private lines, generally in poor condition, are also operated by sugar companies. (iii) Air Transport 2.11 The Dominican Republic has an international airport (Las Americas, located 24 km east of Santo Domingo), capable of handling jumbo jets, and 16 local airports in service. An additional international airport is being constructed in Puerto Plata as part of a program of tourism development on the north coast and will be completed in 1978. International air traffic is increasing rapidly, with about 60,000 passengers in 1973 and with connections to the USA, Venezuela, Curacao and Spain. Domestic traffic is still very  - 4 - limited (25,000 passengers in 1972) because of the small size of the country and the quite extensive road network. There is, however, a demand for domestic air transport because of the poor condition of certain roads and the inaccessi- bility of certain regions. (iv) Ports 2.12 About 90% of the total imports (1.9 million tons per annum) and 20% of the exports (570,000 tons per annum) pass through Santo Domingo (which, in fact has three harbors--Haina, Santo Domingo and Puerto Andres). About 45% of total exports (mineral) pass through the mineral-specialized port of Pedernales in the southwest, close to Haiti. Puerto Plata, in the north (Atlantic Coast), is being improved and will be the terminal for agricultural exports from the Cibao Valley area. In general, the ports are inefficient due to obsolete equipment and a high reliance on unskilled and semi-skilled labor. Further, there appears to be an excessive number of ports for the amount of cargo being handled, requiring much duplication of equipment and facilities. (v) Coastal Shipping 2.13 There is very little coastal shipping. The only movement of signif- icance is that of gypsum, which is carried by barge from Barahona to Santo Domingo. (vi) Pipelines 2.14 At present, there is only one pipeline (private) in the Dominican Republic. It carries oil from the refinery at Haina to the Falconbridge ferronickel mine at Bonao. C. Transport Policy, Planning and Intermodal Coordination 2.15 The transport sector lacks clearly defined policies; its organiza- tion is complex and ineffective, and its planning is weak. Although many Government agencies have "transportation" as their dominant activity, there appears to be a dissipation of development efforts without any apparent coor- dination among these agencies, and most transportation projects seem to be carried out in an ad hoc manner. 2.16 The Oficina Nacional de Planificacion (ONP), under the Secretaria Tecnica de la Presidencia, is responsible for reviewing transport sector plan- ning and intermodal coordination. The Planning Department of the Secretaria de Estado de Obras Publicas y Comunicaciones (SEOPC) prepares an investment plan each year for review by ONP and subsequent approval by the President of the Republic. SEOPC is responsible, inter alia, for programming, plan- ning, designing, building and maintaining primary and secondary roads; regu- lating and policing highway traffic; and operating the Government-owned railway system. Responsibility, including planning, for other transportation- related functions is allocated as follows: (a) The Direccion General de Caminos Vecinales (organizationally under SEOPC but funded directly by the Office of the Presidency) is in charge of local roads;  - 5 - (b) The Direccion General de Aeronautica Civil, directly respon- sible to the Office of the Presidency, is in charge of issuing licenses and controlling air navigation; (c) The Comision Administrativa Aeroportuaria, under the respon- sibility of the Corporacion de Fomento Industrial, is in charge of the administration of commercial airports (currently, only the airport of Las Americas); (d) The Autoridad Portuaria Dominicana, directly under the respon- sibility of the Office of the Presidency, created in 1970 to be in charge of all port operations, has, in fact, no real responsibility. The Secretaria de Estado de Finanzas operates the ports, and SEOPC maintains them; (e) A few other agencies, such as the Secretaria de Estado de las Fuerzas Armadas, Secretaria de Estado de Agricultura, and the Instituto Agropecuario, are responsible for building feeder roads within their jurisdiction and have specific budgets for such purposes. Most of these agencies are allocated very small budgets for capital invest- ments, and most transportation investments are financed directly through the Fondo Especial de la Presidencia, which is entirely under the control of the Office of the Presidency. 2.17 Investment planning for the transport sector,e.g., the Four-Year Transport Investment Plan (1970-1974), has been prepared by ONP, setting forth the main objectives of the sector; the investment plans contain only very tentative figures, however, and are not supported by any economic evaluation. 2.18 Although the Office of the Presidency makes the final decision on most transport investments, the transport agencies which prepare investment plans for consideration are not coordinated. Because of this lack of coordi- nation and the high degree of overlapping responsibilities within the sector, there is a large potential for over-investment among the modes. The country needs a complete restructuring of the organizations responsible for the functions of the transport sector as well as the transport master plan. Any major modification of a single agency's organization, e.g., SEOPC, should await this general reorganization. 2.19 The Government recognizes the need for, and has requested the Inter-American Development Bank (IDB) to help finance, a transport sector study, including preparation of a transport master plan and a study of the transport sector organization. The study would include: (a) a review of the transport sector policies and the agencies currently responsible for trans- portation; (b) a consideration of whether the centralization of transportation functions within a single agency reporting to the Office of the Presidency is practical; (c) a review of Government agencies for possible reforms, parti- cularly in pay scales and working hours; (d) a determination of the amount and incidence of such charges necessary to provide sufficient revenue for  - 6 - transport investment and maintenance; and (e) a general review of each trans- port mode, with recommendations and suggested methods for improving its operations and maintenance, particularly with regard to the trucking industry. The study would also provide help in establishing a methodology for the economic justification and ranking of projects and would recommend whether such planning should be carried out within a single agency or should be under- taken within each mode and coordinated by a single agency. The Bank has indi- cated the above points to the Government and to IDB and has helped to prepare the terms of reference for the study. The Government has indicated that it would undertake such a study with financing provided by IDB, and an assurance that the study would be carried out by December 31, 1977 was obtained during negotiations. 3. THE HIGHWAY SUBSECTOR A. The Highway Network 3.01 The inter-urban highway network comprises 5,500 km of primary paved roads, about 4,000 km of secondary gravel and improved earth roads and about 1,200 km of farm-to-market earth roads. Since there is no precise administra- tive classification of the roads and no roads inventory, the above figures are approximate. 3.02 The four main roads of the network, all starting at Santo Domingo, are: (a) the Sanchez highway, 193 km, to the west through Azua to Barahona, with an average daily traffic (ADT) ranging from 675 to 1,400; (b) the Mella highway, 75 km, to the east to San Pedro de Macoris with an ADT from 625 to 2,000; (c) the Las Americas highway, also to San Pedro de Macoris, providing access to the airport and running along the coast paralleling the Mella high- way and partly in competition with it, except that heavy truck traffic must use the Mella highway (ADT 3,000); and (d) the Duarte highway, 263 km, through the middle of the country, from Santo Domingo to La Vega, 125 km (ADT 7,000), La Vega to Jose E. Bisono, 55 km (ADT 4,500) and Jose E. Bisono to Monte Cristi, 83 km (ADT 650); this is the most important road in the country, joining the two most populous cities, Santo Domingo and Santiago, and crossing the richest agricultural region, the Cibao Valley. B. Characteristics and Growth of Road Traffic 3.03 In 1973, the Department of Transport of SEOPC conducted numerous traffic counts as a preliminary step to the UNDP-financed study (para. 1.02). LVI supplemented this information with origin-destination surveys and addi- tional traffic counts. Acceptable data on traffic flows are now available for about 2,000 km of the main road network (para. 2.08). SEOPC has received six additional traffic counters and is now in a position to carry out a more complete traffic count program. 3.04 The very limited traffic counts available for the period 1968-1973 (mainly on the Duarte highway) show an average traffic increase of about 12% per annum. Gasoline and diesel oil sales grew, respectively, at 7.5% and  - 7 - 11.4% per annum from 1970 to 1973 (Table 1). As a major indicator of traffic growth, gasoline sales dropped dramatically in 1974, but increased in 1975 to just under the levels existing in 1973 before the oil price increases. 3.05 The total vehicle fleet increased by about 12% per annum over the last 12 years to reach 94,165 vehicles in 1974 (Table 2). It is charac- terized by: (a) a small number of buses (about 2,051) and a large number of taxis (about 22,600); and (b) a large number of pickups (about 15,000). Since almost all buses are used for urban transit in Santo Domingo and Santiago, all intercity passenger traffic has been handled by private or public autos. The newly created bus service between Santo Domingo and Santiago will improve the situation, and it is expected that the transport sector study (para. 2.19) will contain recommendations for the development of an efficient intercity bus service and, hence, discourage the use of public autos in order to reduce their numbers. (Taxis are presently so numerous in Santo Domingo that each taxi is authorized to work only every other day.) 3.06 The origin-destination survey carried out by LVI indicates that much could be done to improve transport fleet organization and, as a result, to reduce transport costs. Road transport is largely carried out by indi- vidual owner-operators, and competition among them is high. The load factor of the truck is abnormally low since the trucks very often are not full even in the "heavy" direction and are, in most cases, empty on their return trip. Nevertheless, overloading has been observed on a small percentage of the trucks, and this increased axle loading is sufficient to cause severe damage to the roads. Moreover, it appears that the size of the vehicle used is not the most economic one. Small pickups and vans carrying less than one-ton capacity make up about 50% of the traffic on main roads. This proliferation of light vehicles may be due to the fact that the customs duty applicable to jeeps and light trucks (25%) 1/ is lower than that applicable to heavier buses (70%) and to trucks (36%). As a consequence of the above-mentioned problems, cars and small vehicles represent more than 85% of the traffic on main roads. This results in traffic congestion and artificially creates a need to upgrade the highway network. The consultants for the transport sector study are expected to analyze the traffic needs and recommend necessary steps to improve the transport of goods and services and reduce the use of uneconomic pickups and vans, if necessary. C. Highway Planning and Financing 3.07 The highway investment program is prepared by the Planning Depart- ment of SEOPC (para. 2.16). After approval of the program by the Office 1/ Law 532, Incentives to Agriculture.  -8- of the Presidency, SEOPC is responsible for its execution. A major planning obstacle is the absence of a transport data collection system; however, the consultant (LVI) for the UNDP-financed highway rehabilitation and adminis- tration study has carried out traffic counts for feasibility studies, in- cluding those in this project, and these counts can be considered as the first systematic traffic data collection in the Dominican Republic. Up to now, road construction has been carried out without feasibility studies, and the UNDP- financed study was a first attempt to use economic evaluation as a tool for decision-making. 3.08 Since the recommendations from the proposed transport sector study (para. 2.19) will not be available until late 1977, and because of the urgent need to strengthen the SEOPC planning activities for both road maintenance and investment and to continue the effort begun by LVI, the proposed project includes technical assistance for a highway maintenance program which would help prepare a road maintenance budget using procedures for proper planning. The specialists would assist SEOPC and the proposed IDB technical assistance (para. 2.19) in the establishment of an adequate road transport data collec- tion system, including continuation of traffic counts and updating of the road inventory, and would train local counterparts. 3.09 Highway revenues from road users in 1973 totaled about RD$ 58.9 million (US$58.9 million, Table 3). This is about 65% more than the amount expended on highways in that year (Table 4). Although expenditures for high- ways have increased at an average of 22% per annum, the increased level of expenditure does not necessarily reflect the requirements since maintenance needs are probably understated, having remained fairly static with construc- tion and reconstruction increasing by about an average of 26% per annum. D. Highway Administration 3.10 SEOPC is responsible, inter alia, for: programming, planning, designing, building and maintaining primary and secondary roads; regulating and policing highway traffic; and controlling the public railway system (para. 2.16). It is divided into two Sub-Secretariats (see Chart): (a) one Sub-Secretariat is responsible for road construction and maintenance, road programming, planning and designing as well as the maintenance of port infra- structure and some airports; and (b) the second Sub-Secretariat is responsible, inter alia, for telecommunications and mail, for highway transit and for operation of the public railways. 3.11 Under the UNDP-financed study (para. 1.02), LVI reviewed SEOPC's responsibilities in the highway subsector and made recommendations regarding reorganization of SEOPC, including the transfer of all highway-related func- tions to the Sub-Secretariat responsible for roads (which was carried out by decree in March 1976), and the reorganization of the Sub-Secretariat; an increase from a 30- to a 40-hour work week and a corresponding increase in salaries; and improvements to accounting and cost reporting procedures.  - 9 - However, it is difficult to try to reorganize one Government agency respon- sible for transport without attempting a total reorganization of all agencies in the transport sector because of the complexity of the existing structure, with overlapping responsibilities among agencies for roads, ports and high- ways (para. 2.16). Such a restructuring should await the recommendations of the proposed transport sector study. 3.12 Several weighing stations have been installed by SEOPC on the Duarte, Mella and Sanchez highways over the last four years, and trucks are inspected for compliance with the requirements for total weight of vehicle, but not for axle load limit or vehicle dimensions. In the absence of a clearly defined permissible axle load, the studies (para. 1.03) were made using a 12-ton axle load for design purposes in recognition of the over- loading of trucks currently using the country's roads. During negotiations, the Government gave an assurance that it would define maximum vehicle axle loads and dimensions by December 31, 1976 and would enforce such legisla- tion as required, based on the recommendations of the consultants (para. 4.10). E. Highway Engineering 3.13 SEOPC has prepared final designs for most primary and secondary road projects and has supervised their construction. Several local consulting firms are active in highway design. 3.14 SEOPC has a set of geometric standards for road construction which takes terrain, soils and traffic into account; in general, these standards are acceptable. Where major construction is to be carried out, the consult- ants have been asked to develop specific design standards. F. Highway Construction 3.15 In the past, highway construction was based on insufficient detailed engineering, and there was little supervision; the results were poor--in many cases, roads were constructed having inadequate base and sub-base construction and poor alignments. During the last five years, the quality of construction has improved substantially; acceptable detailed engineering is now being pre- pared by the Planning Department of SEOPC, and improved supervision has resulted in better road construction. However, the capabilities of the High- way Department for bidding procedures and supervision could be strengthened. 3.16 SEOPC has undertaken construction by force account, on a limited scale, for minor road improvements as well as for some feeder roads; however, the largest percentage of construction work is carried out by local contrac- tors, many of whom are affiliated with international firms. There are three or four firms representing international firms capable of undertaking between US$6 and US$7 million of work per year and more than ten internationally affiliated as well as local firms which can handle civil works of about US$3 million per year. The total capacity of the contracting industry is  - 10 - about US$40 million per year. Contracts are normally awarded without compe- titive bidding, prices are fixed by SEOPC, and selection of the construc- tion firm is made by the Office of the Presidency. G. Highway Maintenance 3.17 Routine maintenance is carried out by force account through four districts and 18 ayudantias. 1/ Each district office and each ayudantia has its own technical and administrative staff, equipment, workshops and service facilities. The organizational structure for road maintenance appears adequate. 3.18 The majority of the country's highways suffer either from a complete lack of maintenance or a lack of proper maintenance. The maintenance budget appears insufficient; the amounts allocated have been about half of what LVI's analyses indicated were required (about US$600/km/year). About 70% of the total maintenance expenditures go to pay some 7,000 persons working for SEOPC, either on a full-time or a part-time basis. It is difficult to determine the present true costs of maintenance since cost accounting procedures for the field operations and workshops are inadequate. This problem is further compounded by the lack of a well-defined maintenance program. There is an irrational variation in expenditures for maintenance, and, therefore, during negotiations, the Government gave an assurance that it would allocate not less than US$4 million equivalent each fiscal year starting with FY1977. This allocation would be revised, taking into account the recommendations of the consultants (para. 4.10) in agreement with the Bank. 3.19 The workshops, including the main ones at Santo Domingo and Santiago, are in very poor condition and need rehabilitation or reconstruc- tion. The one at Santiago should be relocated. Preventive maintenance of equipment on a systematic basis is not carried out, and equipment is generally brought into the shops for routine maintenance only when repairs are required. Spare parts control is practically non-existent, and it is common to see new spare parts lying on the ground among old pieces of equipment. Cannibalizing of working equipment as spares for other equipment is currently practiced due to the lack of spare parts. 3.20 The present road maintenance equipment fleet consists of hetero- geneous equipment of different makes, types, models and years and is inade- quate for maintaining the present road system. A great part of the existing equipment is old, out of order and needs to be replaced. The workshops are not capable of handling normal equipment maintenance or even minor repair- work; they need new workshop equipment and tools. 1/ The ayudantia is a subdivision of a road maintenance district, respon- sible for maintenance of primary and secondary roads, normally limited to a single province. The four road maintenance districts are located at Santo Domingo, Santiago, La Vega and Azua.  - 11 - 3.21 Training is done almost entirely on-the-job, and little effort is made to formalize the procedures or standards of work. There is no career development system, and this situation creates a serious shortage of skilled workers and managers. The situation for the Government agencies is further aggravated by the fact that the few workers who become competent often move to the private sector because of better opportunities and higher salaries. 3.22 LVI has indicated that SEOPC could carry out its maintenance operations with substantially fewer personnel than it employs at present. Any major reduction in a country where unemployment is high would be drastic, but some labor/equipment mix commensurate with the current underemployment and the need to improve the highway organization's efficiency would be investi- gated under the proposed project (para. 4.08). During negotiations, the Bank obtained an assurance from the Government that it would recruit no further staff for the Highway Maintenance Department except to fill existing positions for which present employees cannot be trained, and that this ban on recruit- ment would be put into effect upon signing of the loan and remain in effect until the Bank and the Government agree on the overall maintenance budget and an appropriate labor force for road maintenance. 3.23 In order to improve the above situation, the proposed project con- tains a highway maintenance program which includes provisions for maintenance as indicated in paragraphs 4.06 to 4.08. 4. THE PROJECT A. General Description 4.01 The project consists of: (i) Civil works: (a) reconstruction of 19 km of a high priority road; and (b) rehabilitation, widening, or reconstruction of bridges on this road. (ii) A highway maintenance program comprising: (a) purchase of highway maintenance equipment and workshop tools and equipment; (b) purchase of spare parts; (c) rehabilitation or reconstruction of workshops; and (d) improvement of road maintenance planning and procedures.  - 12 - (iii) Consulting services for: (a) supervision of item (1); and (b) technical assistance for item (ii). The project is expected to take about three years. (i) Civil Works 4.02 The need for, and the economic feasibility of, rehabilitating and reconstructing 1,200 km of roads were demonstrated in the IJNDP-financed study prepared by LVI (para. 1.03); from this study, 389 km of roads were selected for urgent rehabilitation or reconstruction. LVI indicated that road construction practices in the Dominican Republic were inefficient and costly. Although these practices had improved, SEOPC recognized the need to further improve road design and construction practices, and had requested the Bank to finance 189 km of these roads. 4.03 The Government, then, decided against a Bank loan for the whole project, choosing to finance most of the roads with its own resources and limited its request to include in the project one of the higher priority road links, Puente Camu-San Francisco de Macoris, 19 km, contained in the original project. Detailed engineering, including the preparation of bidding docu- ments, was completed in April 1976 by Bank-approved consultants. 4.04 The reconstruction of these 19 km will consist of a new pavement (asphalt concrete carpet 5 cm thick, base and sub-base, and shoulders) following the present profile and alignment and minor corrections of curves (Table 5). There are some nine bridges (about 190 m total) on this section which require rehabilitation, widening or reconstruction. The cost per kilo- meter for these works, including bridges, is RD$ 136,800 (Table 6). The Government wishes to carry out the necessary works for bridges, as well as their supervision, under separate contracts from the road element and has agreed to finance the total cost of them; during negotiations, assurances were obtained from the Government that the necessary rehabilitation, widening or reconstruction of the bridges would be carried out by the time of the com- pletion of the reconstruction of the road section in accordance with an agreed schedule (Annexes I and 2). The actual starting dates, for both components, are dependent on the signing of the Loan Agreement. It would be a condition of disbursement that no withdrawals would be approved for the road reconstruction element until the borrower has furnished bridge designs and specifications which meet those of the road section to the Bank. 4.05 The Government prefers an equipment-intensive mix for projects of this type because of the higher financial costs and lower quality work which it has experienced with labor-intensive techniques. In the Bank's opinion, the urgency of the reconstruction requires an equipment-intensive mix. However, the Government's policy for reducing the high unemployment rate has been to provide temporary employment in Government agencies such as SEOPC,  - 13 - and it is expected that routine maintenance of the roads will be carried out by more labor-intensive methods than previously. The proposed project will help to determine the appropriate labor-intensive methods (para. 4.08). (ii) Highway Maintenance Program 4.06 LVI recommended, and the proposed project includes, a maintenance program which would require purchase of new maintenance equipment to replace old equipment in order to bring the fleet up to its previous acceptable operating level. LVI also recommended the procurement of equipment spare parts to rehabilitate the useful units of the existing fleet and the purchase of workshop tools and equipment to provide the necessary restoration and level of maintenance required for the fleet. Therefore, purchase of spare parts is also included in the project. The SEOPC budget devoted to materials and spare parts would be increased within the framework of the overall improvement program for maintenance procedures and budgeting (para. 4.08). During nego- tiations, the lists of equipment, equipment spares, workshop equipment and tools were agreed between the Government and the Bank. 4.07 The two main district workshops, Santo Domingo and Santiago, are in poor condition. The workshop at Santo Domingo can be rehabilitated; the one at Santiago is in the city and should be relocated and reconstructed. For the immediate future, the workshop at La Vega, about 30 km from Santiago, can substitute for that at Santiago, but requires some rehabilitation. In general, the ayudantias 1/ require some rehabilitation, and some of them require relocation to provide more adequate facilities for the consultants' proposed maintenance program. The Government and the Bank defined the nature of the work to be carried out in all the workshops, based on engineering designs submitted to the Bank for review by the Government, and it is a condition of disbursement for the maintenance equipment that the Government would complete the necessary work for the workshops (other than the Santiago workshop) and that adequate progress on the works has been made for the Santiago workshop, It is expected that the works would be completed within three months after signing of the loan agreement, except for the workshop at Santiago, which would be completed one year from that date (Annex 3). 4.08 LVI reviewed the Highway Department's maintenance procedures and planning and made recommendations for the improvement of road maintenance (paras. 3.17-3.22). The proposals for an improved maintenance program are satisfactory and are the basis for the Government's improvement of its pro- cedures for road maintenance and planning. The specific proposals for im- proved maintenance planning and procedures are set out in the terms of reference for required technical assistance, which were agreed with the Government during negotiations (Annex 4). Furthermore, during negotiations, the Bank obtained an assurance from the Government that it would determine, not later than July 31, 1977, or such other date as shall be agreed with the 1/ See footnote to paragraph 3.17 on page 10.  - 14 - Bank, the appropriate combination of labor and equipment for maintenance of its roads and the necessary increases in the maintenance budget, taking into account the recommendations of the consultants and in agreement with the Bank. (iii) Consulting Services 4.09 Consulting services in the proposed project would be provided, on terms and conditions acceptable to the Bank, for: (a) supervision of rehabilitation of the 19 km of high priority road (Annex 5). The estimated number of man-months required to carry out this assignment is 100, at an average cost of RD$ 2,000 per man-month excluding contingencies (a prorated average for a wide range of technical expertise); and (b) technical assistance for the maintenance program. The esti- mated number of man-months required to carry out this assign- ment is 80, at an average cost of RD$ 7,500 per month excluding contingencies. The latter figure is high because of the spe- cialized nature of the maintenance consultants who are expected to be hired from abroad. 4.10 The project provides for the financing of technical assistance for the highway maintenance proRram, Renerally along the lines recommended by LVI, which would include counterpart training. The terms of reference (Annex 4), the specific expertise required, and the timing of the experts' services (Annex 6), were agreed with the Government during negotiations. It was also agreed that the employment of consultants for technical assistance is a condition of effectiveness of the loan. In order that a local followup team might be ready to take over the full equipment maintenance load at the end of the assistance program, an assurance was obtained from the Government during negotiations that it would assign competent local counterpart staff in a timely fashion. B. Cost Estimates and Financing 4.11 The total cost of the project is estimated at US$8.2 million, in- cluding contingency allowances; the proposed loan would finance US$5.0 mil- lion equivalent of the estimated foreign exchange component of US$5.3 million equivalent. Costs were estimated on a unit cost basis for the reconstruction and maintenance equipment. Costs for the maintenance program were estimated on a unit cost based on the LVI study and brought up to date as of May 1976. Costs for consulting services were based on the LVI study. Costs for the maintenance program were based on the experience of the LVI study. A summary of project cost is shown on the next page. 4.12 A quantity contingency allowance of 10% of the construction costs for reconstruction has been included and is considered adequate for this  - 15 - RD$Million2/ Local Foreign Bank Currency Currency Total Particiation Amount(% l. Civil Works a. Reconstruction of a Road 0.8 1.2 1.9 1.1 (58) b. Rehabilitation, Widening, or Reconstruction of Bridges 0.3 0.2 0 0.0 (0) Sub-Total 7 1.3 2.4 1.1 2. Maintenance Program a. Purchase of Maintenance Equipment and Workshop Tools and Equipment 0.3 2.6 2.9 2.6 (90) b. Purchase- of Spare Parts 0.1 0.3 0.4 0.3 (85) c. Rehabilitation or Reconstruction of Workshops o.5 0.1 0.6 0.0 (O) d. Improvement of RDad Maintenance Planning and Procedures (cost included under 3(c) below) - Sub-Total O.9 77 3.9 2.9 3. Consulting Services a. Supervision of Reconstruction of a Road (Item l(a) above) 0.1 0.1 0.2 0.1 (50) b. Supervision of rehabilitation, Widening or Reconstruction of Bridges 0.2/ (Item l(b) above) 010 010 0.0 (O) c. Technical Assistance (Item 2 above) 0.2 004 o.6 0.4 (67) Sub-Total 0.3 0.5 0.8 0 (63) Total Base Costs 2.3 4.8 7.1 4.5 (63) 4. Contingencies-_ a. Reconstruction of a Road (i) Physical (10%) of 1(a) above 0.1 0.1 0.2 0.1 (ii) Price (21%) of 1(a) above 0.2 0.2 0o4 0.2 b. Rehabilitation, Widening or feconstruction of Bridges (i) Physical (10%) of 1(b) above 0.1 0o/ O.l 0.0 (ii) Price (21%) of 1(b) above 00.1 0.0 0.1 0.0 c. Maintenance Equipment, Equipment Spare Parts, Workshops Tools and 2' Equipment (5%) of 2(a) & (b) above4/ 00- 0.1 0.1 0.1 d. Rehabilitation or Reconstruction of Workshops (10%) of 2(c) above 0.1 O.OJ/ o.1 o.o e. Consulting Services of 3 above 2/. (Local 1I%; Foreign 11%) .01 0.1 0.1 Sub-Total 1 .1 0.5 TOTAL 2.9 5.3 8.2 5.0 (61) j Because of the parity of the US$ and RD$, costs expressed in US$ yould be identical numerically. / Less than RD$ 50,000. / Based on CPS guidelines. Based on expected short procurement lead time.  - 16 - type of civil works. A further contingency of 21% has been included for price escalation of construction costs on the basis of an increase of 6.5% in prices in the second half of 1976 and 12% per year thereafter. A 5% price contingency has been used for maintenance equipment, equipment spares and workshop tools and equipment. A 10% physical contingency has been included for the rehabi- litation or reconstruction of workshops. A 14% price contingency for local costs and an 11% price contingency for foreign costs have been included for consulting services to cover possible price increases of these services during the project execution period. Price escalation contingencies have been estimated from the time of negotiations (May 1976) until completion of the project (June 30, 1979). 4.13 The foreign exchange for the reconstruction of the 19 km has been estimated at 58%, based on the assumption that construction would be carried out by foreign firms in joint venture with local firms or by subcontracting part of the works to local firms. For the purchase of maintenance equipment and workshop tools and equipment, a foreign component of 90% has been used. Equipment spares, which are expected to be purchased locally, have an esti- mated foreign exchange cost of 85%. The foreign exchange component for con- sulting services has been estimated at 63% on the basis of the expected mix of local and foreign consultants. 4.14 The total estimated foreign exchange cost of the project is US$5.3 million equivalent. The Bank would finance US$5.0 million equivalent (94% of the total) and the Government would finance the remainder (US$0.3 million equivalent) of the estimated foreign exchange component as well as the local costs; an assurance was obtained from the Government during negotiations that adequate funds would be provided to meet the local costs and the foreign exchange component not covered by the proposed loan. C. Execution 4.15 Execution of the project would be the responsibility of SEOPC, with the Directorate of Roads in charge of reconstruction and of the mainte- nance program. D. Procurement 4.16 The prequalification of bidders, evaluation and tendering is being carried out in accordance with the Bank's "Guidelines"; the Government would abide by the Bank's "Guidelines" and accept international competitive bidding for civil works to be financed by the Bank (para. 3.16). Civil works contracts would be awarded on a unit price basis after international competitive bidding. The procedures for this were discussed and agreed with the Government during negotiations. 4.17 The procurement of maintenance equipment, equipment spares and workshop tools and equipment would be made after international competitive  - 17 - bidding in accordance with the Bank's "Guidelines", except that contracts for groups of spare parts for maintenance equipment involving expenditures up to US$10,000 for each group, not exceeding US$200,000 equivalent in total, might be awarded directly to the dealers of the spare parts. This is par- ticularly important because the Government should encourage the local avail- ability of spare parts for its maintenance equipment. This procedute would also ensure that the Government would not have to procure unneeded equipment spares. These procedures were agreed during negotiations. 4.18 Consultants would be selected in accordance with normal Bank procedures. During negotiations, these procedures and terms of reference were agreed with the Government (Annexes 4 and 5). E. Disbursements 4.19 For civil works, disbursements would be made on the basis of 58% of the total expenditure for civil works, excluding bridges. Disbursement for maintenance equipment and workshop tools and equipment would be made for 100% of the foreign exchange cost; for spare parts purchased locally, an estimate of the actual foreign exchange component is 85%, and this percentage would be used for disbursement. The disbursements for consulting services would be 63% of total expenditures (representing foreign exchange component). The schedule of estimated disbursements is given in Annex 7. Loan funds, if any, remaining at the completion of the project may be used to finance items related to the project, to be agreed between the Government and the Bank. 5. ECONOMIC EVALUATION A. General 5.01 Road transportation has been aggravated by an accelerated deteriora- tion of the highway network, due mainly to lack of, and improper, maintenance. Although construction practices have improved, the capabilities of the High- way Department for bidding procedures and supervision could be strengthened. 5.02 To overcome these deficiencies, the Government has requested that the proposed project include an important road for reconstruction and a main- tenance program based on LVI's recommendations. 5.03 The economic evaluation made for the road (which would represent about 37% of the estimated project cost (excluding price contingencies)) gave an economic return (ER) of 29%; the maintenance program (55% of the estimated project cost (excluding price contingencies)) was made based on available data. This analysis gave an economic return in excess of 20%. The estimated ER for both elements is 24%. Benefits for consulting services (8%) for the maintenance program were not quantified.  - 18 - B. Reconstruction of the Puente Camu-San Francisco de Macoris Road and Bridges 5.04 This road lies in an area of important agricultural (particularly rice) and beef production. It leads to San Francisco de Macoris, a city of 44,000 inhabitants and the capital of the province of Duarte. While agri- cultural produce destined for export will exit through Salcedo to the port at Puerto Plata, the link to Puente Camu is part of the road joining the region to the Carretera Duarte and Santo Domingo. The present high level of traffic (2,092 ADT) is an indication of the importance of the road to the regional and national economy. (i) Traffic 5.05 In spite of the deterioration of the Puente Camu-San Francisco de Macoris Road, traffic has continued to grow; the consultants' 1973 estimate was some 1,600 vehicles per day (vpd). Counts taken in March 1976 by SEOPC gave an average of 2,092 vpd. This would indicate that traffic is growing about 11% per annum average rate. LVI estimates show that traffic on the road link could be represented by an annual average growth rate of 6.5% per annum (Table 7). This rate seems reasonable, considering, inter alia, the uncertainty of future petroleum prices, and it has been used in the economic evaluation. (ii) Benefits 5.06 Quantifiable benefits from the proposed reconstruction would con- sist of savings in vehicle operating costs. These benefits were calculated for the total projected traffic throughout the economic life of the proposed investment, beginning in 1979, the scheduled opening year for the proposed works, and extending through 1998 inclusive. Vehicle operating cost savings would accrue primarily to commercial vehicles and other road users; however, since the implemented project would tend to reduce the rate of increase in road transport cost, the general public is also expected to benefit. 5.07 The operating costs for the five vehicle categories considered, and for the levels of surface condition, were calculated by means and methods which are standard for highway projects. Time savings for passenger vehicle driver, passengers, and equipment were not considered, nor was the possible reduction in the number of accidents. Operating unit costs are shown in Table 8. 5.08 The existing 19-km road has an intermittently rough surface, full of potholes, with base, pavement width (6 m) and shoulders (less than 1 m) insufficient for modern axle loadings and traffic levels. Due to the low grade, the road is often flooded by rains and becomes impassable. The reconstruction of the road, involving minor changes in alignment, base better- ment, higher level and 5 cm of bituminous concrete carpet, would cost RD$ 2.5 million, 1/ including bridges, resulting in an appropriate design on this flat and straight road section. 1/ The estimated construction cost prepared by SEOPC was increased by 10% for physical contingencies and by 8% for supervision; this cost was then reduced 9% to exclude the estimate for local taxes.  - 19 - 5.09 The consultants (LVI) stated in their report (1974) that the Puente Camu-San Francisco de Macoris section had a road surface type of between 2 and 3 based on a scale of 1 to 6. Road surface type 1 was described as being "new or relatively new asphalt or concrete surface". Type 6 was described as a pavement completely or partially destroyed, leaving a very rough bumpy surface. In March 1976, the Bank and SEOPC staff reevaluated the section, using the same criteria described by the consultant. The evaluation of the type was more between 4 and 5--the road showed no signs of maintenance, and a recent flood had completely destroyed some sections. (iii) Economic Returns 5.10 For the computation of the economic return for the road, the initial investment cost was taken as the estimated reconstruction cost, together with the contingency allowance for quantity increase (10%), right-of-way, where applicable, and supervision, less all taxes (RD$ 2.5 million). Reconstruction was assumed to commence in 1976 and be completed by 1978. 5.11 The ER was computed on the basis of the full stream of benefits netted of initial investment and maintenance costs. The full return, given in Table 9, shows that the reconstruction works would have an ER of 29%. Sensi- tivity analyses were applied to the two investment costs by decreasing and increasing the traffic growth rate by 50%. The lowest ER, 19%, was for the 25% increase in construction costs and a 50% decrease in traffic (Table 9). The ER is not particularly sensitive to the initially low traffic growth rate assumed. 5.12 These tests, and the conservative assumption that there would be no further deterioration of the road without the project, indicate that the in- vestment for reconstructing the road element is economically justified. Also, although the area serviced by the road is developed, some increased production can be expected with the reduction of vehicle operating costs. This increased production is considered marginal and would not significantly increase the economic feasibility of the project road. Because of the marginal nature of this production and the limited effect on the project road's feasibility, these benefits have not been considered in the quantita- tive analysis. C. The Maintenance Program 5.13 The roads in the Dominican Republic have received little or no maintenance over the past several years; because of this, they are deterior- ating at an increasing pace. Maintenance equipment is almost non-existent, and the workshops are run-down and poorly equipped. Maintenance practices are poor, and the maintenance organization, although adequately structured, is weak. On the other hand, many roads were originally underdesigned for the traffic that they now carry or have deteriorated to such a point that they cannot be properly maintained and must instead be rehabilitated. The consultants' (LVI) report agrees that many sections of roads do require rehabilitation, but that this need is mainly due to poor maintenance prac- tices in the past.  - 20 - 5.14 In 1973, SEOPC carried out numerous traffic counts in connection with the study financed by UNDP. LVI completed this information with a few origin-destination surveys and additional traffic counts. These studies showed that about 90% of the country's road network had less than 3,000 vehicles per day and some 50% had less than 500 vehicles per day. 5.15 The very limited traffic counts available for the period 1968-1973 (mainly for the Duarte highway) show an average traffic increase of about 12% per year. During approximately the same period (1968-1972), the vehicle fleet grew at about 12% per annum (Table 2), gasoline sales at 7.5% per annum and diesel sales at about 11.4% per annum (Table 1). 5.16 Because the Bank's knowledge of actual road conditions is limited to some 2,000 km of the 10,700 km of the network and the traffic on these 2,000 km, only a rough estimate of the potential savings accruing from improved maintenance is possible. The analysis, assuming a 10% saving on fuel only with improved surface conditions, indicates that the savings accruing from the investment for the new maintenance equipment, equipment spares, workshop tools and equipment, plus the estimated annual costs for maintenance (about RD$ 6.0 million per annum), would have an ER in excess of 20%. This is a conservative estimate considering that increased maintenance would reduce the need for the high cost of future rehabilitation. Consulting services are considered justi- fied since they would permit increased efficiency in highway maintenance planning and administration and in the necessary improvement and maintenance of the highway network. 5.17 In addition to the quantifiable benefits, important indirect bene- fits are also expected. These comprise mainly social and political benefits, not directly associated with the project, in other sectors of the economy, occasioned by improved transportation over the better maintained roads. The improved transportation would have a positive effect upon integrating many areas difficult to reach because of the current poor condition of the roads and would also improve communications, particularly on the Puente Camu-San Francisco de Macoris Road during the rainy season when much of the road is impassable due to heavy flooding. 6. AGREEMENTS REACHED AND RECOMMENDATION 6.01 During negotiations, agreement was reached with the Government on the following: (a) lists of equipment, equipment spares, workshop equipment and tools (para. 4.06); (b) specific proposals to be included in the project for improved maintenance planning and procedures (para. 4.08); (c) terms of reference, specific expertise required and the timing of the services for the technical assistance for the highway maintenance program (para. 4.10 and Annex 6);  - 21 - (d) procedures for awarding the civil works contract (para. 4.16); (e) procedures for procurement of maintenance equipment, equipment spares, and workshop tools and equipment (para. 4.17); and (f) selection procedures and terms of reference for consulting services (para. 4.18). 6.02 During negotiations, assurances were obtained from the Government on the following: (a) that a transport sector study would be carried out by December 31, 1977 (para. 2.19); (b) that it would enact, by December 31, 1976, regulations defining maximum vehicle axle loads and dimensions and would ensure permanent and consistent enforcement of these regulations (para. 3.12); (c) that it would allocate not less than the equivalent of US$4 million to its road maintenance budget per fiscal year, starting in fiscal year 1977, until an appropriate budget has been established (para. 3.18); (d) that it would not recruit any further staff for the Highway Maintenance Department of SEOPC until an appropriate labor force and budget for road maintenance has been established (para. 3.22); (e) that the necessary rehabilitation, widening or reconstruction of bridges on the Puente Camu-San Francisco de Macoris road section would be carried out by the time of the completion of the reconstruction of that road section (para. 4.04 and Annex 6); (f) that it would determine, not later than July 31, 1977, the proper combination of labor and equipment necessary for maintenance of its roads and the necessary increases in the maintenance budget (para. 4.08); (g) that it would assign competent local counterpart staff in a timely fashion (para. 4.10); and (h) that adequate funds would be provided to meet the local costs and the foreign exchange component not covered by the proposed loan (para. 4.14). 6.03 The following are conditions for the project: (a) a condition of effectiveness is that the Borrower has employed consultants to assist in carrying out the maintenance program (para. 4.10);  - 22 - (b) conditions of disbursement are: (i) no withdrawals would be approved for the road reconstruction element of the project until the Borrower has furnished to the Bank designs and specifications of the bridges for that road section (para. 4.04);and (ii) no withdrawals would be approved for maintenance equipment, workshop tools and equipment, and spare parts until the Borrower has furnished satisfactory evidence to the Bank that the workshops (other than Santiago) have been rehabilitated or reconstructed; and that satisfactory progress in the construction works for the Santiago workshop has been made (para. 4.07). 6.04 Subject to the above, the project constitutes a suitable basis for Bank lending in a total amount of US$5.0 million equivalent on standard Third Window terms. June 21, 1976  TABLE 1 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROlJECT Importation (1967-1971) and Sales (1970-1975) of Gasoline andfDiesel Oil (000's Barrels) Importation /1 Gasoline Diesel Oil 1 967 1 ,443 723 1968 1,505 838 1969 1,707 1,035 1970 1,619 1,001 1971 2,003 1,664 Average Annual Growth Rate 1967-1971 Gasoline: 8.5% p.a. Diesel Oil: 23% p.a. Sales /2 Gasoline Diesel Oil 13 1970 1,634 92 1971 1,796 338 1972 1,894 397 1973 2,181 450 1974 1,411 n.a. 1975 2,096 n.a. Average Annual Growth Rate 1970-1 973 Gasoline: 7.5% p.a. Diesel Oil: 11 .4i /4 197)4-1975 Gasoline: 48.5% p.a. Diesel Oil: n.a. /1 Shell-Government owned refinery started operations in 1970. Statistics on imports by product were not available after 1971. /2 Sales at retail station level. D3 Does not include diesel oil wholesale sales. /4 Growth rate more accurately reflects sales to diesel oil powered vehicles as other figure (23i p.a.) includes imports for the power plants, the ferronickel plant (Falconbridge) and sugar refinprips onprations. n.a. = not available. Source: SEOPC, Refineria Dominicana de Petr6oleo S.A. and Mission Estimates. Maye 1 976  TABLE 2 DOM1N IGAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Vehicle Fleet Registr ation - 1 962-1 974 /1 Passenger Trucks and Cars Jeeps Buses Pickups Total 1962 14,044 1,470 398 6,968 22,880 1963 19,680 1 ,367 546 8,388 29,981 1 964 26,o4o 1 ,501 899 10,633 39,073 1965 28,982 1,213 933 8,283 39,417 1966 25,334 1,254 382 11,226 38,856 1967 26,888 1 ,051 973 12,403 41,315 1968 29,033 1,129 1,014 14,892 46,128 1969 31,351 1,563 1,103 16,567 50,584 1970 38,010. 1,323 1,146 19,285 63,516 1 971 43,o89 1 ,703 1,306 22,497 68,595 1972 48,736 1,788 1,332 22,707 74,563 1973 54,657 1,911 1,485 25,496 83,549 1974 61,652 12 2,434 2,051 28,028 94,165 1 These figures are the only available on vehicle fleet. 2 Public - 22,587, Private - 39,065 Source: Direccion General de Renta Interna and SEOPC. May 1976  TABLE 3 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Road User Charges - 1_69-1974 (Millions of RD$) 1969 1970 1971 1972 1973 1974 Tag Fee 1 .1 1.4 1 .6 0.7 n.a. n.a. Vehicle Transit 3.8 4.7 5.1 6.2 7.9 8.9 Driving Licenses 0.4 0.4 0.7 0.8 0.7 0.8 Toll - - - 1.1 1.8 1.8 Fines - - 0.1 0.1 0.1 0.1 Gasoline Tax 14.2 13.5 16.7 18.4 25.2 25.1 (E) Diesel Tax 2.4 2.3 3.9 4.2 5.3 8.0 (E) Import tax on vehicles 6.5 9.8 11 .0 12.0 18.0 (E) 23.0 (E) TOTAL 28.4 32.1 39.1 43.5 58.9 67.7 (E) - Estimated n.a. - not available Source: SEOPC, ONP and Bank Estimates. May 1976  DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Highway Expenditures - 1968-1973 /1 (millions of RD$) 1968 % 1969 % 1970 % 1971 % 1972 1 1973 _ Construction and Reconstruction 8.3 62.4 10.7 54.3 14.4 62.3 22.1 66.8 23.9 72.0 26.3 73.7 Maintenance 2.9 21 .8 4.o 20.3 3.8 16.5 3.6 10.3 2.4 7.2 3.2 9.0 Feeder Road 2 1.5 11 .3 2.1 10.7 2.5 10.8 2.6 7.8 1 .8 5.4 1.9 5.3 Bridges o.6 4.5 2.9 14-7 2.4 10.4 4.8 14.5 5.1 15.4 4.3 12.0 TOTAL 13.3 100.0 19.7 100.0 23.1 100.0 33.1 100.0 33.2 100.0 35.7 100.0 L Includes "Administration". /2 Separate budget to the Direcci6n General de Caminos Vecinales. Source: SEOPC M March 1 976 t  DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Standards for the Puente Camu-San Francisco de Macoris Road (19.0 '-m) Standard Axle Width Width Width Minimnum Stopping Type Load Design of of of Radium of Maximum light of Pavement Speed Roadwa Surfacing Shoulders Curvature Grade Distance Surface Design (n) ( (m) (m) (m) -- ( m tons 80.00 10.60 6.60 2.00 200.00 4.00 130.00 Asphalt concrete 12.00 carpet 5cm thick Source: SEOPC May 1976  TABLE 6 DOMINICAN REPUBLIC APPRAISAL OF A RDAD MAINTIVANCE AND RECONSTRUCTION PROJECT Puente Camu-San Francisco de Macoris (19.0 1km) Cost per Kilometer (RD$ 000) Length Construction km Cost /1 Cost/km Puente Camu - San Francisco de Macoris 19.0 2,600.0 136.8 Li Financial cost of road including cost for necessary bridge betterment works, plus physical contingency (lO%). Source: SEOPC June 1976  TABLE 7 DOMI1TICAN REPUBLIC APPRAISAL OF A ROAD MAINTEN1ANCE AND RECONSTRUCTION PROJECT Average Daily Traffic and Forecast on Puente Camu-San Francisco de Macoris Road (1973-1998) Annual Average Lth /973L 1/28 Growth Rate Length 1973 1976/ 97 1988 1998 1976-1998 km) --) 19.0 1,600 2,092 2,527 4,454 8,360 6.5 /1 Actual traffic counts. Actual growth is about 11% p.a., from October 1973 traffic counts to those taken in March 1976. /2 Expected opening year. Source: (1) Dominican Republic - "Highway Rehabilitation and Adrainistration Study" Lamarre Valois International, Ltd., 1974. (2) SEOPC March 1 976 May 1976  TABLE 8 DOM:IN CAN REPUBLIC APPRAISAL OF A ROAD MAINT12NANCE AND RECONSTRUCTICN PROJECT Vehicle Operating Costs Breakdown, RD$/1000 Km /1 Guagua Light Heavy Item Car Bus Pickup Truck Truck Speed (kph) 90 80 80 80 70 Depreciation 15.3 97.8 18.1 26.8 54.0 Interest 5.4 31.0 6.5 8.8 18.2 Tires 3.1 23.6 2.0 10.9 19.0 Fuel 16.4 26.8 18.4 31.8 28.3 Oil 0.7 1.1 0.8 0.8 1.1 Maintenance 8.6 48.0 11 .9 32.7 50.0 Others (Insurance, etc.) 7.2 54.2 7.8 29.0 42.8 Sub-Total 56.7 282.5 65.5 140.8 213.4 Crew Wages 11 .1 /2 25.0 12.5 18.8 27.1 Total 67.8 307.5 78.0 159.6 240.5 A2 On good paved roads in level terrain, at optimum operating speed. /2 For those cars used as taxis. Source: Consultants (Lamarre Valois International, Ltd). September 1974  TABLE 9 DO1vLaNICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Sensitivity Analysis of Economic Returns for the Road Link Puente Camu - San Francisco de Macoris (19.0 kin) Economic Return for Road Link with Marginal Economic Estimated Better- Return of Bridge ment Costs for Bridges Betterment Estimated Economic Construci4on Cost-'2 (OOOts) RD$2,521 RD$3,2630 RD85h3 First Yej Return" 28% 22'o 10% Basic ERW 29% 2 4 1 3% Low Growth/ 24% l9 High Growthy 34h% 29% 2/ The estimated construction cost prepared by SEOPC was increased by 10% for physi- cal contingencies and by 8% for supervision; this cost was then reduced by 9% to exclude the estimate for local taxes. g/ Estimated Economic Construction cost plus 25%. y/ The First Year Return is based on the estimate for basic traffic growth (6.5% p.a.). v The Basic Economic Return is based on a 6.5% p.a. growth rate of traffic estimated for this road link by the consultants, Lamarre Valois, International. i/ The Low Growth ER is 3.25% p.a. growth for traffic. i/ The High Growth ER is 9.75% p.a. growth for traffic. Source: SEOPC and mission estimates June 1976  ANNEX 1 DOMINICAN REPUdLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Time Schedule 1/ for Bridge Construction 1. Bridge design 120 days 2. Bank review of specifications 15 days 3. Advertisement for works and prequalifications 30 days 4. Review of qualifications 15 days 5. Invitation to bid to prequalified firms 30 days 6. Bids received 7. Review of tenders 15 days 8. Award of contract 30 days 9. Mobilization 10. Construction 18 months 26i months / Dates are additive and start immediately after signing of Loan Agreement. June 1976  ANNEX, 2 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Time Schedule 21for Road Construction Duration 1. Advertisement for works and prequalificatior 60 days 2. Review of qualifications 15 days 3. Invitations to bid to prequalified firms 45 days 4. Bids received 5. Review of tenders 30 days 6. Award of contract 30 days 7. Mobilization 30 days 6. Construction ) Earth Movement ) Cuulverts ) 24 months Pavements ) Completion of Construction ) 32 months / Dates are additive and start immediately after signing of Loan Agreement. June 1976  ANNEX 3 DOKINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Time Schedule for Workshop Construction These works will be carried out by force account by SEOPC in a term of three months from date of signing of loan agreement with the exception of Santiago workshop which will be carried out in one year from that date. June 1976  ANNEX 4 Page 1 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT 1976-1977 Highway Maintenance Services Terms of Reference I. Introduction 1. In 1973, the Government of the Dominican Republic commissioned a study and definition of the most urgent highway rehabilitation needs with a simultaneous examination of the highway administration. The consultants reviewed about 2,000 km of primary and secondary roads (of the country's some 10,000 km), including basic economic indicators, traffic data, road inventory results and construction costs. From these data the consultants developed a prima facie justified four-year road rehabilitation program. Based upon further economic and technical feasibility studies, they selected about 300 km of roads for immediate rehabilitation. Concurrent with this, they reviewed the need for workshops, maintenance equipment and spare parts and identified the more urgently required equipment and spare parts and the present adminis- trative structure of the Highway Department, its present practices and pro- cedures and submitted recommendations for their improvement. Their report, "Highway Rehabilitation and Administration Study" January 1974, contained the results and recommendations of this effort and forms the basis for the proposed highway maintenance services. II. Objectives 2. The purpose of this assignment is to assist the Government in implementing a highway maintenance program. To this end, the services shall provide: (a) Advice and assistance to the Secretaria de Estado de Obras Publicas y Communicacions (SEOPC), at all levels of the Sub-Secretary, in the organization, administration and technical development of a highway maintenance program including: (i) Purchase of highway maintenance equipment and equipment spares, and workshop tools and equipment; (ii) Rehabilitation and reconstruction of workshops; and (iii) Improvement of road maintenance procedures and planning; (b) Training of SEOPC administrative and tecbnical personnel in all operations related to highway maintenance. 3. The highway maintenance program and training activities for which assistance and advisory services are to be provided shall be based on recommendations given in the report to the Government entitled "Highway Rehabilitation and Administration Study" dated January 1974 and prepared by the consultants, Lamarre Valois International, Limited, Canada.  ANNEX a Page 2 III. Scope of Consulting Services A. General 4. The assistance, advisory services and training to be provided by the consultants shall cover routine, periodic and emergency maintenance activities. 5. The consultants shall perform all engineering, technical analyses, financial investigations, administrative and training services, and related work herein described, as required to attain the objectives given in Section II hereof. In the conduct of this work the consultants shall cooperate fully with the Government, which is to provide the data, services and facilities outlined in Section IV hereof; the consultants shall be solely responsible, however, for the analysis and interpretation of all data received and for the findings, conclusions and recommendations contained in their reports. 6. All reports, specifications, instructions and other documents to be prepared by the consultants and all ccrrespondence relating to the services shall be in Spanish with English translations and the metric system shall be used. B. Advisory Services 7. The consultants shall provide advisory services in the fields of administration, traffic engineering, highway engineering and mechanical engineering as described below: 1. Administration 8. (a) the preparation of a five-year (1977-1981) maintenance program with the necessary budgetary requirements by year recommending, inter alia, an appropriate labor-equipment mix considering the country's current high unemployment rate; (b) the administrative work to be carried out by the maintenance organization including the design of forms, preparation of instructions, and keeping of inventories and registers; (c) budgeting, efficiency measurement and project control; (d) the establishment of a system of cost accounting for the Sub- Secretary of Roads, to provide cost data for the various types of maintenance for specific highways, including equipment and workshop operating costs; (e) the purchasing and the issuing of equipment and materials and in the installation of a system of stores accounting; (f) the establishment of staff requirements, of personnel histories, and of procedures for the recruiting, selection and training of personnel;  ANNEX h Page 3 (g) determining the location, layout, staffing and organization of the district and ayudantias offices and workshops; (h) the preparation of a manual on proper road maintenance practices for all levels of staff engaged in road maintenance; and (i) the preparation of a procedure manual covering the maintenance operations for the equipment fleet. 2. Traffic Engineering 9. In the field of traffic engineering, the consultants shall advise and assist in: (a) the implementation of a traffic counting system for the country's highway network and origin-destination surveys; (b) the analysis and evaluation of the traffic data to be collected; and (c) the establishment of a maximum vehicle axle load for the country and a system for the control of vehicle axle loads, gross vehicle weights and vehicle dimensions and safety devices. 3. Highway Engineering 10. In the field of highway engineering, the consultants shall advise and assist in: (a) the preparation of plans and procedures for carrying out a highway maintenance program; and (b) the establishment of methods and instructions for highway maintenance. 4. Mechanical Engineering 11. In the field of mechanical engineering, the consultants shall: (a) prepare specifications for the purchase of highway maintenance equipment, spare parts and tools to be financed under the Loan Agreement; (b) prepare contract documents for the items mentioned in (a) above suitable for procurement or international competitive bidding; (c) assist in the prequalification of suppliers, if required, and in inviting tenders;  ANNEX 4s Page 4 (d) assist in the evaluation of tenders received and make recommendations for the placing of orders; (e) assist in supervising (1) the assembly and/or installation of new (mobile and stationary) equipment, (2) the acceptance of these items from suppliers and (3) the training of operators and mechanics by suppliers; (f) advise on the appropriate utilization of workshops and ware- houses, check and supply, when required, all necessary data on equipment and machinery characteristics (power, weights, etc.) and suggest, if required, appropriate layouts for workshops and warehouses for highway maintenance; (g) prepare instructions for and assist in the carrying out of maintenance and repair work of highway maintenance equipment; (h) assist in assessing spare part requirements for the existing highway maintenance equipment; and (i) inspect the manner in which highway maintenance equipment is being operated and prepare instructions for the efficient use and repair of the equipment. C. Supplementary Studies 12. The consultants shall carry out supplementary studies required for the planning of highway maintenance, as outlined in 1 through 3 below. 1. Traffic Forecasts 13. On the basis of data to be provided to the consultants in accord- ance with Section III hereof and the traffic counts mentioned in III-B-2 above, the consultants shall determine the annual traffic growth rates (various classes of vehicles) and forecast the traffic volumes on the highways expected to carry significant movements for the next ten years. 2. Highway Classification 14. On the basis of their analysis of present traffic and the fore- casts of future traffic, the consultants shall classify all existing highways by function and provide a tolerable standard of present roads by classifi- cation. The classification shall comprise the highway network included in the inventory prepared by the Government and the consultants during the "Highway Rehabilitation and Administration Study" and such additional inventory as may be required. 3. Highway Cost and Revenue Analysis 15. The consultants shall review all available data on Government expenditures for highways, examine the methods of collecting highway user charges, including tools, review the total revenues obtained by the Government  ANINEX4 Page 5 from such charges and determine their adequacy to cover highway mainten- ance and construction costs. This shall result in specific recommendations by the consultants on improvements in methods of collection and on the structure and level of highway user charges in the country. D. Training Program 16. For the entire period of the Services in the Dominican Republic, the consultants shall conduct a training program for personnel to be designated by the Road Maintenance Directorate at all operational levels. 17. Through their day-to-day assistance and advisory services, the consultants shall train the staff of the Sub-Secretary of Roads in the methods of highway maintenance planning, execution and supervision. This shall include direct instructions to operating personnel by advice and demonstration on (a) maintenance and operation procedures with work crews in the field, (b) equipment maintenance and repair methods and (c) warehousing and storekeeping. 18. In addition to the above on-the-job training, the consultants shall conduct a series of lecture courses on the following subjects: (1) Administration: management procedures and cost accounting. (2) Traffic Engineering: (a) traffic counting methods, (b) origin and destination surveys, and (c) evaluation of traffic data. (3) Highway Engineering: (a) methods, planning and supervision of highway maintenance, (b) field execution of highway main- tenance and (c) bearing value investigations and pavement design. (4) Mechanical Engineering: (a) utilization and performance of maintenance equipment, (b) maintenance and repair of road maintenance equipment, and (c) basic procedures for mechanics and their supervisors employed in maintenance shop. June 1976  ANNEX 5 Page 1 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Terms of Reference for Supervision of Construction 1. The Secretaria de Estado de Obras Publicas y Comunicaciones (SEOPC) has agreed to employ consulting services for the civil works described in the Loan Agreement negotiated between the Government of the Dominican Republic and the International Bank for Reconstruction and Development (hereinafter called the Bank). The consultant will agree to act as consulting engineer on this work on the terms and conditions herein set forth. 2. The consultant will assist SEOPC in the supervision of construction for the upgrading and paving of the following section of highway in the national road network: Puente Camu-San Francisco de Macoris: length 18.980 km. The work is expected to take about 30 months. 3. The scope of work to be performed by the consultant will be dictated by normal engineering and management practices for projects of this nature, including the assignment of the personnel required to perform ade- quately, but not necessarily limited to, the following functions: (a) review bids received from contractors and make recommendations to SEOPC regarding award of the contract; (b) review proposed schedules and procedures and make recommenda- tions for inspection and construction, quality control, measure- ment of partial and final construction quantities, payments to contractors, and acceptance of the completed works; (c) furnish technical advice and assistance to SEOPC inspection personnel; (d) review work certifications amd make recommendations to SEOPC for payment to the contractor; (e) perform adequate check tests on the general fill, subgrade, sub-base, base and pavement courses as well as the concrete work related to bridges and drainage structures; and (f) prepare monthly reports on the work progress for transmittal to the Bank. 4. Description of work--Puente Rio Camu-San Francisco de Macoris pavement: bituminous concrete - 5 cm thickness 6.6 meter width; shoulders: single surface treatment 3 cm thickness 2.00 meter width each side; base  ANNEX 5 Page 2 course: crushed stone (Rio Jima gravel) maximum size 1-1/2 inch-0.15 meter thickness; sub-base course: screened gravel (Rio Jima gravel) maximum size 2 inch-0.20 meter thickness; improved subgrade: where indicated screened gravel (Rio Jima) maximum size 2-1/2 inch-0.20 meter thickness; general fill material: where indicated on cross-sections, use Rio Jima gravel 3-inch maximum size; drainage structures: widen nine bridges, lengthen 34; culverts: details to be placed in list of quantities. 5. Personnel required for the supervision must include the following minimum qualified staff: (a) one project engineer with at least 10 years of combined field and office experience in the inspection of highway construction. Background must include soils, pavement and drainage structures as well as experience related to the evaluation and review of contractor capability, awards, schedules, payments, technical assistance and the periodic report writing which is necessary; (b) one resident engineer with at least five years of field experience in the inspection of highway construction, including soils, pavements, and concrete related to drainage structures; (c) one soils laboratory technician qualified to run and analyze the required tests listed in basic tests to be performed; (d) two qualified laboratory assistants to sample and run the required tests listed in basic tests to be performed. 6. Personnel noted in (a), (b) and (c) should be fluent in Spanish. 7. The consultant will furnish adequate transportation for the person- nel involved and maintain a field soils laboratory (such laboratory equipment to be supplied by the consultant) properly equipped to do the necessary test- ing. An office with secretarial capability and communications service is required. 8. Before final acceptance of the work, the consultant will perform a roughness survey and Benkleman Beam deflections properly documented and evaluated as a requisite for the termination of the consulting work. 9. Basic testing required by the consultant supplementing regular testing by SEOPC as follows: Review: (a) weekly work schedule and comment thereon; (b) job mix formulas--all courses--weekly; (c) gradation and density of aggregates--all courses at 200 meter intervals;  ANNEX 5 Page 3 Obtain: (d) stabilization tests--all courses if and when necessary; (e) concrete job mix formulas for headwalls, wing walls, footing walls, and slabs in culverts; (f) review results of concrete compression testing, water cement ratio, and slump tests; (g) review of job mix formula and Marshall method pavement testing-- percent bituminous material, stability, flow, and voids relationships. Carry out: (h) periodic check on the possible hydrophilic nature of aggregates and use of anti-stripping agent in bituminous mixes; and (i) any other tests necessary for the acceptability of aggregates such as hardness, soundness, and deleterious content that may be required. 10. It is the responsibility of the consultant to assist in the for- mulation of an efficient and sound inspection policy. It is desirable to report on practices that require correction or reconstruction immediately in order to effectively process the work without delays. 11. No field changes will be permitted without written authorization from SEOPC. 12. Under advice by the consultant, claims by the contractor must be reported in writing within 30 days of the occurrence to SEOPC and the action taken by SEOPC must be prompt, providing that the deciding factors such as testing are completed. 13. A flow sheet must accompany each contractor's list of equipment and personnel to indicate that the contractor understands the work and obli- gations involved. June 1976  ANNEX 6 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Proposed List of Personnel for Technical Assistance for a Maintenance Program 1. Road Maintenance Engineer 2. Mechanical Engineer 3. Traffic Engineer 4,. Master Mechanic 5. Eqaipment Inspector 6. Cost Accountant The assistance is expected to ast 18 months and require about 80-man months of effort. June 1976  ANNEX 7 DOMINICAN REPUBLIC APPRAISAL OF A ROAD MAINTENANCE AND RECONSTRUCTION PROJECT Schedule of Estimated Disoursements IBRD/IDA Fiscal Year Cumulative Disburse- and Semester hnding ment at end of Semester (US $ Thousands) 1977 December 31, 1976 1,500 June 30, 1977 3,000 1978 December 31, 1977 3,500 June 30, 1978 4,000 1979 December 31, 1978 4,500 June 30, 1979 4,800 1980 December 31, 1979 5,000 June 1976  e~~~~~~~~~~~~~~~~~~~~~~~~ -- AT AR AIITAITA,AAAAA RARRTAAIAAA A CAA|AAA III.L .RAATLADA - TARA- TACARIARATA ARC TRAIA|C