Burundi - Second Highway Project

Report No. 1656b-RU Appraisal of a Second Highway Project Burundi February 8, 1978 COPY Regional Projects Department FILE COPY Eastern Africa Regional Office 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 = Burundi Franc (FBu) US$0.01111 = FBu 1 US$1.00 = FBu 90 WEIGHT AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (m) I ton (t) 2 2,204 pounds (lb) 2 1 sq km (km ) = 0.386 sq miles (mi ) GLOSSARY OF ABBREVIATIONS ADT Average Daily Traffic AfDB African Development Bank BADEA Banque Arabe pour le Developpement Economique en Afrique (Arab Bank for Economic Development in Africa) BCT Bureau Central Technique (Planning and Design Department) DIWI Dr. Ing. Walter Ingenieurberatung (Consultants- German) DPC Direction des Ponts et Chaussees (Roads Department) dwt dead weight tonnage EDF European Development Fund GDP Gross Domestic Product ICB International Competitive Bidding MTP Ministere des Travaux Publics de l'Equipement et du Logement (Ministry of Public Works) RD Research and Development (Consultants-Belgium) RIG Route d'Interet General (Secondary Road) RN Route Nationale (Primary Road) RP Route Provinciale (Tertiary Road) GOVERNMENT OF BURUNDI FISCAL YEAR January 1 - December 31  BURUNDI FOR OFFICIAL USE ONLY APPRAISAL OF A SECOND HIGHWAY PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS .................................. i - ii 1. INTRODUCTION .................. o.............. ........................ - 2.\ THE TRANSPORT SECTOR ..................................... 2 A. Economic Setting . ............ . ..................... ..a.. 2 B. The Transport System .................................. 2 3. THE HIGHWAY SECTOR ....... ........................ 3 A. Road Network .... ............... ... ........ . 3 B. Characteristics and Growth of Road Transport 4 C. Highway Administration ............... . ...... . 5 D. Planning. 5 E. Financing ..... ............. .. 6 F. Engineering ........ . .... ...... 7 G. Construction ... . .......... .... 7 H1. Maintenance ..... . ... . ... ... . . .. . 9 I. Training .10 4. THE PROJECT .10 A. Objectives ................ .......... - ............ 10 B. Description ............ ...... 11 C. Status of Engineering *.......... .................. 14 D. Cost Estimates ........ ..... ................... 14 E. Financing ... 16 F. Implementaton . . .17 G. Procurement ........ ......... ...... . .17 H. Construction Methods . . .... 18 I. Disbursements ...... . .... ... . ....... ......... 18 5. ECONOMIC EVALUATION .19 A. Benefits and Beneficiaries 9.......... .19 B, Main Road Construction l 9. . ........ 19 C. Improvement of Road Network. 20 D. Continuation of Highway Maintenance Project .20 E. Risk . 21 6. AGREEMENTS REACHED AND RECOMMENDATIONS ......... ...... 21 This report was prepared by Peter Ludwig (Engineer), I.E. Smith (Econo- mist) and P. Brereton (Editor). This document has a restTicted distribution and may be used by recipients only in the performance or their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TABLE OF CONTENTS (continued) TABLES 1. Road Network 2. Government's Road Paving Program 3. Comparison of Highway Densities 4. Vehicle Fleet 1968-1976 5. Revenues from Road Users 6. Annual Highway Expenditures 7. Capital and Recurrent Project Costs 8. Design Standards Bujumbura-Cibitoke-Rugombo Road 9. Bridges Proposed for Reconstruction 10. Stabilization of Steep Grades 11. Investment Program 12. Design Standards Low Standard Gravel Roads 13. Maintenance Equipment 14. Calculation of Physical and Price Contingencies 15. Disbursement Schedule 16. Highway Maintenance Program Economic Costs and Benefits 17. Vehicle Operating Cost Estimates ANNEXES 1. Project Progress Reporting Requirements 2. Project Monitoring Indices CHARTS 1. Organization of Ministry of Works (World Bank - 17448) 2. Project Implementation Schedule MAPS 1. Burundi International Transport Connections (IBRD 11731R) 2. Burundi Road System (IBRD 12905R) 3. Burundi Traffic Flow 1976 (IBRD 12906)  BURUNDI APPRAISAL OF A SECOND HIGHWAY PROJECT SUMMARY AND CONCLUSIONS (i) Internal transport in Burundi depends almost exclusively on high- ways. Although the 5,500 km network reaches most parts of the country, its condition is unsuitable for Burundi's needs, owing mainly to poor construc- tion standards and inadequate maintenance. The situation is aggravated by the rugged terrain which raises construction and maintenance costs. The proposed project, like the ongoing Highway Maintenance Project of March 1974, aims, by supporting the Government's Highway Maintenance Program, at improving Burundi's capacity to maintain and develop its highway network and at reducing the costs of highway transport through selected rehabilitation and upgrading operations on the most economically important roads. (ii) The project comprises: (i) reconstruction of the main 65 km Bujumbura-Cibitoke-Rugombo road to two-lane bituminous standards; (ii) im- provement of the classified road network through the replacement of obsolete bridges, the paving of steeply graded road sections and the upgrading to gravel or improved earth standards of selected key roads; and (iii) con- tinuation of technical assistance and procurement of equipment essential to the ongoing Maintenance Program. Project completion is scheduled for the end of 1981. (iii) It is estimated that the main road reconstruction will yield rates of return on the various sections ranging between 18% and 12% with an overall return of 16% for the road as a whole. The earth roads to be upgraded have been selected from a highway investment program of improvements estimated to produce first-year rates of return in excess of 15%. The bridges to be replaced and the steep grades to be stabilized will be selected from short lists compiled on the basis of traffic volumes; precise rates of return will be calculated in these instances to permit final selection of those with economic returns in excess of 12%. The overall estimated rate of return for the ongoing Maintenance Program for which the project will provide further support is estimated to be in excess of 20%. (iv) The project will be implemented by the Ministry of Works (Ministere des Travaux Publics de l'Equipement et du Logement - MTP). International competitive bidding will be adopted for major works and equipment procurement, but force account and possibly local bidding will be employed for bridge construction and low standard road improvement. Consultants will be employed to undertake supervision and, where necessary, detailed engineering. (v) The total project cost, net of taxes, will be US$24.0 million equivalent, of which US$18.4 million equivalent will be foreign exchange. The proposed IDA credit of US$14.0 million, the estimated US$6.1 million from BADEA, which is also expected to participate in the project, and grants from UNDP, the Federal Republic of Germany amounting to US$0.9 million and US$0.8  - ii - million respectively will cover about 90% of project costs. In addition to meeting foreign exchange costs, therefore, the external funds will cover about 60% of local costs. The remaining US$2.2 million equivalent of local costs (or US$4.7 million inclusive of taxes) will be met by the Government. (vi) The project is suitable for an IDA Credit of US$14.0 million on standard terms to the Republic of Burundi.  BURUNDI APPRAISAL OF A SECOND HIGHWAY PROJECT I. INTRODUCTION 1.01 The proposed Second Highway Project follows up on the ongoing Highway Maintenance Project of 1974. The objective of the earlier project in conjunc- tion with a UNDP-financed technical assistance project was to strengthen Burundi's capacity to administer and maintain its highway network through the provision of highway equipment, training and workshop facilities and to lay the basis for future highway development through the preparation by consul- tants of a highway investment program and selected feasibility studies. Progress under the ongoing project is satisfactory and the composition of the proposed Second Highway Project is based on the studies carried out and the experience gained under the ongoing Project. 1.02 The Highway Maintenance Program which the two projects are support- ing has its origin in a 1970 engineering credit (Sll-BU) under which consul- tants (Dr. Ing Walter Ingenieurberatung-DIWI, Germany) carried out a study of Burundi's highway maintenance needs. Provision was made to assist with the recommended maintenance program under a subsequent credit negotiated in April 1972. But in view of the deteriorating political situation in Burundi, the presentation of the project to the Board was deferred. The project was renegotiated at the end of 1973 and the resulting Highway Maintenance Credit (467-BU) signed in March 1974. 1.03 Earlier, in 1957, a Bank loan (165-BE) of US$48 million was made to the Belgian Trust Territory of Rwanda-Urundi for bituminization of the main Bujumbura-Muramvya road and the expansion of the port of Bujumbura. These works were completed in 1959. The proposed project will, thus, be the Fourth Bank Group lending operation in the transport sector of what is now the Republic of Burundi. 1.04 The proposed Second Highway Project will provide for the continua- tion of technical assistance, procurement of maintenance equipment, implemen- tation of selected road betterment and the upgrading of the main Bujumbura- Cibitoke-Rugombo road identified in the feasibility studies included under the Highway Maintenance Project. It is described in further detail in Chapter 4. 1.05 The ongoing highway project has encountered problems in (i) the adequacy and lack of continuity of counterpart staff in project implementa- tion and (ii) a concentration of highway maintenance resources on urban roads in Bujumbura to the detriment of inter-urban roads. The proposed project guards against these difficulties by taking the measures discussed in paras. 3.23 and 4.10. 1.06 This report is based on the above-mentioned studies and the findings of an appraisal mission carried out by P. Ludwig (Engineer) and I.E. Smith (Economist) in February 1977. The report was edited by P. Brereton.  - 2 - 2. THE TRANSPORT SECTOR A. Economic Setting 2 2.01 The Republic of Burundi, a small country of only 27,000 km , is situated astride the Zaire-Nile divide in the center of Africa. One of the most densely populated countries in Africa with 3.8 million inhabitants, it is, at the same time, one of the poorest with a per capita GDP of only about US$120 equivalent. The major economic activity is agriculture with 95% of the population dispersed throughout the rural areas as small farmers. Coffee and, to a lesser extent, cotton and tea are the principal sources of foreign exchange, but the rural population depends mainly on subsistence crops. The equatorial climate and fertile soils would permit a substantial expansion of agricultural output, given adequate institutional and infra- structural support. Exploitation of nickel deposits may alter Burundi's economy, but the commercial feasibility still remains to be established. Bujumbura, the capital and commercial center, is the only town of significant size; situated on Lake Tanganyika, it provides the principal outlet, through the lake shipping services and the railway through Tanzania, to the country's trading markets. B. The Transport System 2.02 Two of the principal factors underlying Burundi's transport prob- lems are the country's landlocked situation, over 1000 km from the coast, and the rugged terrain which makes highway construction and maintenance costly. The 5,500 km road network reaches most parts of the country; never- theless, as virtually the only internal transport mode, it is inadequate for Burundi's needs, mainly because of poor construction standards and inadequate maintenance. The resulting high transport costs and frequent interruptions to service are obstacles to the expansion of agricultural output. The upgrading of some key routes with external financing and the recent improvements in maintenance, in which the ongoing Highway Maintenance Project has played an important part, have alleviated the problems to some extent, but continuing maintenance and rehabilitation will remain a high priority. The highway system is described in more detail in the next section. 2.03 Burundi encounters difficulties on its external transport links (shown on Map-IBRD 11731R). At present, shipments of imports and exports through the principal outlet via Tanzania, totalling some 150,000 tons per year, suffer frequent delays and losses. Travel time between Dar es Salaam and Bujumbura averages 60 days, while 15 days would be considered adequate under normal operating conditions. Capacity is basically not a problem. The port of Bujumbura can handle 450,000 tons per annum, and both the lake fleet and the Central Line of East African Railways from Kigoma to Dar es Salaam have adequate potential for Burundi's foreseeable needs. The problem is, rather, low productivity principally on the railway and in Kigoma Port arising from poor management, inadequate investment and insufficient maintenance. The  - 3 - situation is aggravated by a tendency for Tanzania to concentrate its limited investment and maintenance funds on the rail branch serving Mwanza on Lake Victoria rather than Kigoma on Lake Tanganyika. 2.04 Alternative outlets do not compete effectively with the Tanzania route owing to higher costs and, at present, political difficulties. The link via Rwanda and Uganda to the former East African Railways and the port of Mombasa in Kenya is, however, becoming increasingly attractive with the continuing improvement in national highways between Bujumbura and the rail- head at Kampala. A third possibility via the lake port of Kalemi in Zaire and beyond to the ports of Matadi or Lobito cannot be regarded as a satisfactory alternative at present owing to high costs associated with distance and poor service. Other alternatives such as that via lake Victoria to Kisumu would not be feasible without major highway construction outside Burundi. 2.05 The lake transport between Bujumbura and Kigoma is provided by a private company, ARNOLAC, which operates a fleet of some 20 barges, towed or self-propelled, with capacities ranging between 100 and 1400 dwt, giving a total capacity of some 7,000 dwt. The barges- are old and handling methods cumbersome, but carrying capacity is adequate. 2.06 Air transport plays a small but significant role in Burundi's external transport. Freight volumes fluctuate from year to year, but a representative figure would be around 1,000 tons per annum. The principal airport at Bujumbura is served by regular international flights. There are, in addition, six small airstrips throughout the country, but internal passenger and freight traffic is insignificant. 2.07 There is no formal administrative machinery in Burundi for the coordination and development of the transport sector as a whole. Given the small size of the country and the predominance of road transport, there are few internal coordination problems at present. Still, an appropriate institution should eventually be made responsible for formulating a clear policy on external links and for maintaining an adequate liaison with the neighboring territories through which Burundi's access to the sea lies. 3. THE HIGHWAY SECTOR A. The Road Network 3.01 The road network consists of about 5,500 km of roads and tracks. About 3,000 km have been classified as either primary roads (Routes Nationals - RN), secondary roads (Routes d'Interet General - RIG) or tertiary roads (Routes Provinciales - RP) and are under the authority of the Ministry of Pub- lic Works (Ministere des Travaux Publics - MTP) (see Table 1 and Map 12905R). The RN radiate from Bujumbura to the borders of neighboring countries; the RIG link the provincial capitals with one another and the RP link commercial centers within a province. The remaining 2,500 km of unclassified earth tracks carry little traffic and are maintained by the local authorities.  -4- 3.02 About 200 km of the National Roads are presently paved. Funds for the paving of another 260 km have been secured from the European Devel- opment Fund (EDF), the African Development Bank (AfDB) and the People's Republic of China and start of construction is imminent. Government is actively pursuing financing for the paving of a further 320 km (for details see Table 2). The danger of over-investment and its implications for re- current costs is being discussed with the Burundi Government and potential donors (e.g., Germany). Government agreed that it will prepare and submit before April 30, 1978 to the Association a road investment program covering at least five years and exchange views with the Association thereon, giving the Association the opportunity to comment on any changes in the program's imple- mentation. 3.03 A comparison with other developing countries (Table 3) shows that Burundi's highway2network is relatively dense in relation to the surface covered (210 m/km ), but below average in relation to the population served (1.4 m/habitant). Although it appears that the length of the network is ade- quate, its condition is certainly not. The bulk of the network consists of unengineered earth roads and tracks. The roads are narrow, with widths rang- ing from 4 to 7 meters; their alignment is often poor, and lack of systematic regravelling (see para. 3.22) has caused deterioration of the running surface. Obsolete wooden bridges are frequently carried away by floods, interrupting traffic for several days. Heavy erosion by rain on steeply graded road sec- tions impedes traffic during the rainy season, when maintenance crews are unable to keep abreast of the rapid and continuous deterioration. Apart from these deficiencies, which the present project will help to rectify (paras. 4.05-4.07), most of the roads are usable throughout the year because many of the soils, particularly in the mountainous areas, consist of gravel and other well-draining materials. B. Characteristics and Growth of Road Transport 3.04 The vehicle fleet increased at an annual rate of 6.5% over the eight-year period 1968-1976 to a total of 6,840 vehicles (see Table 4). This trend was, however, biased by a sharp decline in the number of vehicles in use in 1974 and 1975 reflecting the political situation of the period; a more reliable long-term growth figure would be about 7%. The structure of the fleet remained essentially the same throughout the period with a slight bias towards passenger cars and four-wheel drive vehicles; in 1976 cars and four-wheel drive vehicles constituted 68%, trucks and vans 30%, and buses 1%. Trucks tend to be small in size, vehicles with carrying capacities in excess of 4 tons constituting only 11% of the trucking fleet. There are therefore at present no problems with overloaded vehicles causing damage to the road system. However, further development has to be monitored once the road from Bujumbura to Mombasa is paved over its whole length, which may induce long-haul traffic. 3.05 Traffic volumes are light throughout the country. In 1976 only 11% of the entire 5,500 km road network was carrying more than 50 vehicles per day. The traffic is concentrated largely on the principal roads radiating from Bujumbura (see Map -IBRD 12906).  -5- 3.06 Road transport is subject to neither quantitative restrictions nor tariff controls. Entry into the industry is unrestricted, but most freight is conveyed in producers' and merchants' own vehicles. There are very few independent trucking firms, except in transport of petroleum products where two companies predominate. The Government provides a limited bus service in Bujumbura and on the principal bituminized roads serving the city, but the great majority of passengers are carried by trucks and vans. C. Highway Administration 3.07 MTP has responsibility for the design, construction and main- tenance of all classified roads (see Chart 1). The Department of Planning and Design (Bureau Central Technique - BCT) within the Ministry supervises feasibility studies and detailed engineering carried out by consultants and administers all construction contracts; the Department of Roads and Bridges (Direction des Ponts et Chaussees - DPC) within the Ministry executes minor construction works and is responsible for all aspects of road maintenance. 3.08 All activities are directed from Ministry headquarters in Bujumbura. This centralized type of administration is well suited for Burundi in view of its small size, the shortage of technically-trained personnel and the prepon- derance of economic activity near the capital. At present, only the Minister, the Director of BCT, the Director of DPC and the roads' superintendent have a formal education in engineering. Eleven of the more important positions in the highway organization are filled by expatriates provided by UNDP, Germany and France. Government, assisted by the Association, is making efforts to overcome the shortage of Burundi nationals among higher level staff (see para. 3.25), but will continue to depend on expatriates for several years. 3.09 The organization of MTP is sound except in one respect: respon- sibility for the maintenance of the Bujumbura township roads and for the national road network should be vested in two separate services (para. 3.23). Government has agreed to establish by June 30, 1978 a program for a progressive separation into two services responsible for (i) Bujumbura's township roads, and (ii) the national road network, each to be provided with a specific amount of personnel and equipment and with distinctive departmental allocations in the Government's budget of current expenditures. A first step has already been taken by Government in this direction, by establishing in the 1978 recurrent budget separate headings for the maintenance of Bujumbura's township roads and the national road network. D. Planning 3.10 The Ministry of Planning, in cooperation with MTP, plans invest- ments in the highway sector. Whereas the first Five-Year Plan (1968-72) concentrated on improving Burundi's road links with neighboring countries  - 6 - in order to become more independent of the lake-rail connection to Dar es Salaam, with its frequent interruptions, the Second Five-Year Plan (1973-77) emphasizes the need for improving internal road maintenance. Implementa- tion of the first plan has fallen far behind schedule, and some of the road construction listed therein 1/ is not yet completed or has not even been started. Implementation of the Second Plan has made good progress mainly due to the ongoing Highway Maintenance Project. 3.11 There is no planning unit within the MTP and the objectives of the two Five-Year Plans concerning the highway sector were given only in general terms without being founded on detailed economic, technical or financial con- siderations. In 1975, therefore, MTP with IDA assistance (Credit 467-BU), hired consultants (Berger/BCEOM-France) to draw up a 10-year road investment program (1978-87). The consultants' draft final report has been submitted recently and is being reviewed by Government and the Association. Preliminary zonclusions are that once Government has completed its road paving program (Table 2), only about 14 km should receive major upgrading within the next 10 years and about 600 km should be upgraded from earth track to low-standard gravel and improved earth roads. The present project will help finance the road improvement (see para. 4.07). However, its successful implementation will require the establishment of a planning or coordination post to follow up on the consultants' recommendations, and to coordinate construction work carried out by contractor or force account units. In case of a shift in transport patterns, reflecting a change in Government's development policy, it would also be the responsibility of this post to adapt, in coordination with all Ministries involved, the proposed road investment program. Govern- ment has recently vested responsiblity for this function in the position of the Director General of MTP and has agreed to maintain this arrangement and to employ a competent and experienced person for the position of Director General. E. Financing 3.12 Road users contribute to Government revenues through import duties and taxes on vehicles, spare parts and fuel, and through registration and licensing fees (Table 5). Total revenues collected were about US$2.5 million in 1976, which exceeded Government's annual highway expendi'tures' though remain- ing below total expenditures on roads including foreign-aided development projects. While most of these funds are fed into the Government's general budget, the surtax on gasoline and diesel oil is allocated directly to the National Road Fund, established in 1969 to help finance capital expenditures in the highway sector. The surtax was raised from FBu 1 (UJs1. 11) per liter to FBu 3 (USd3.3) per liter in 1973. Revenues from the surtax amounted 1/ RN 6: Ngozi-Muyinga-Kobero-Tanzanian Border RN 1: Bujumbura-Kayanza-Rwandese Border RN 3: Bujumbura-Mutambara-Nyanza Lac RN 5: Bujumbura-Cibitoke-Rwandese Border  -7- to about US$600,000 in 1976. Total revenues from road users are expected to be sufficient to cover all recurrent highway expenditures in the future. 3.13 Recurrent expenditures for road maintenance are financed from Gov- ernment's recurrent budget (budget ordinaire). Budget provisions for road maintenance have been consistently below requirements (see Table 6) and Government has used the funds provided for the expansion of highway mainte- nance capacity under Credit 467-BU to finance day-to-day maintenance expendi- tures, such as fuel, construction materials and spare parts, instead of building up a sufficient stock of these items which would permit continuous maintenance operations even in times of supply difficulties. Since Government revenues from road users are adequate to cover all recurrent expenditures, and since no increase of maintenance capacity is now proposed (para. 4.11) no provision has been made to finance fuel, materials and spare parts for road maintenance under the proposed credit. Agreement has been reached with Gov- ernment on the amount of 1978 maintenance allocation (US$2.5 million equiva- lent) and on the principle that budget provisions for future years will not be lower than the 1978 allocation and will be discussed annually with the Association, taking into consideration price variations and changes in traffic patterns and the highway network. Estimated recurrent costs for future years are given in Table 7. 3.14 Road construction is financed from the development budget (budget extraordinaire) which draws its resources mainly from taxes on coffee export and from foreign aid. Government's program for the construction of paved roads together with the source of financing is listed in Table 2. Total expenditures over the next eight years are estimated at US$100 million with a foreign aid component of US$80 million. This program was discussed with Government and the agreements set out in para. 3.02 were reached. F. Engineering 3.15 BCT is responsible for the design of highway construction and for controlling work carried out by contractors. The department's staff, headed by a Burundi engineer, consists of several expatriates pro- vided through bilateral and EDF assistance and Burundi technicians. Its design capacity is limited to small-scale projects and is unlikely to in- crease significantly until the shortage of skilled technicians is overcome (see para. 3.25). The training program included in the Road Maintenance Project (Credit 467-BU) is helping to alleviate this problem. BCT will continue in the foreseeable future to depend upon the assistance of foreign consultants to carry out feasibility studies and detailed engineering. G. Construction 3.16 Major contracts are of the unit-price type, and contract conditions conform to international standards. They include provisions covering bid  -8- bonds, performance guarantees, price escalation, advance payments, retention money, arbitration and first-year road maintenance by contractor. 3.17 There is no major domestic road construction industry because of a lack of trained professionals, subprofessionals and managers and because of the rather limited market, in the long run, for major construction works. One European firm (AMSAR) has established affiliates in Zaire, Rwanda and Burundi; the Burundi Government holds 40% of the shares of the Burundi af- filiate's capital. Road construction contracts are let after international competitive bidding, but, due to the relatively small jobs tendered so far and the lower overheads and mobilization costs that AMSAR incurs by being located in Burundi, competition is rather weak and AMSAR regularly receives the contract award. However, in view of the upcoming major road contracts, more foreign contractors might be interested in installing themselves temporarily in Burundi, and competition may grow. 3.18 Minor works for drainage and structures are either carried out by the Roads Department's force account units or subcontracted to the few small- scale domestic contractors which normally do not employ more than twenty laborers. A Bank mission visited Burundi in late 1977 to assess the develop- ment potential and needs of the domestic contracting industry. Government expressed interest in the mission, and this matter will be further pursued by the Bank. 3.19 A study carried out in 1973 by the consultants DIWI concluded that in a major road project, due to the abundance of labor and low wage rates, labor could, for some operations, be substituted for equipment. But given equal quality, financial costs would be higher for the more labor-intensive construction, although the economic costs of the project reflecting shadow prices would be lower. Government has so far not specifically encouraged contractors to execute major road construction in Burundi by labor-intensive methods, and in view of the higher financial cost and the logistical and administrative problems arising from the organization of a large labor force, contractors are probably not willing to abandon the established equipment- intensive methods without appropriate incentives. Furthermore, a report prepared in 1974 by ILO concludes that the use of labor-intensive methods for major road construction projects is rather limited in Burundi and does not propose a pilot program for this purpose. However, Government's attitude is very open to this question, which is best reflected in the more than 100% increase of the labor force for manual road maintenance between 1975 and 1977 in connection with the ongoing road maintenance project. The consultants engaged to prepare the specifications for the road improvement program (para. 4.09) will further help to implement labor-intensive methods, by determining the appropriate mix of labor and equipment and by ensuring that the design and the specifications are not biased towards equipment-intensive methods. 3.20 Due to BCT's limited capacity, expatriate consulting firms super- vise major road construction and will supervise construction of the proposed project road (para 4.08). A further bottleneck, limiting BCT's capacity in construction supervision, is the lack of an adequate soils and materials laboratory. The project therefore provides financing to improve the existing laboratory (para. 4.12).  -9- H. Maintenance 3.21 DPC is responsible for the maintenance of the classified road net- work and the Bujumbura township roads. Under the current Highway Maintenance XO Project, technical assistance is provided to reorganize and strengthen the DPC 'IV road maintenance organization. The consultants, Research and Development (RD-Belgium), financed by UNDP and engaged under the ongoing project with the Bank as Executing Agency, have so far reorganized manual road maintenance by setting up 10-man crews, each responsible for a road length of 6 to 10 km, depending upon the terrain, the soil conditions and the traffic. There are about 5 road lengths to a section (canton) which is headed by a section foreman. Five to eight sections constitute a district (chantier), headed by a district foreman who is supervised by a road superintendent with headquarters in Bujumbura. Separate crews have been set up for the maintenance of struc- tures. This organization of manual road maintenance, together with a strict control of the daily tasks assigned to the maintenance crews, has improved the quality of maintenance substantially and will remain the backbone of road maintenance in Burundi. 3.22 Procurement of maintenance equipment under the ongoing project has, until recently, been delayed by a tendering issue; consequently, mechanized road maintenance has so far been limited to the use of about 4 pieces of equipment and 3 trucks on the entire classified road network of 3,000 km. The lack of periodic regravelling, however, which is best carried out by partly mechanized units in view of long hauling distances between road and quarry, has led to a rapid deterioration of some of the roads. With the recent settlement of the procurement dispute, Government is actively estab- lishing these mechanized units. Still, most of the equipment presently operating in the DPC, will have reached the end of its economic life by 1979 and should be replaced at that time to assure an adequate level of mechanized road maintenance. The proposed project will provide financing for this purpose (para. 4.11). 3.23 Road maintenance is more mechanized within Bujumbura. According to broad estimates, about 65% of the equipment available at DPC is presently used to maintain the township roads, and maintenance expenditures for these roads amount to about 60% of the entire road maintenance budget. To prevent the favoring of Bujumbura's roads to the detriment of the national roads, which has occurred during the ongoing project period, agreement has been reached on measures to progressively separate equipment, personnel, account- ing and budget matters into two services. 3.24 Highway maintenance equipment is maintained by DPC's central mechanical workshop, supported by German-financed technical assistance to improve workshop efficiency and to train mechanics and drivers. The German Government has recently reviewed the progress made under the technical assist- ance program and has agreed to its extension for about two more years beyond its originally scheduled end in late 1977.  - 10 - I. Training 3.25 The current road maintenance project (Credit 467-BU) assists uovernment in training road overseers, road foremen, equipment operators and road superintendents. In addition, German bilateral aid provides training for mechanics and truck drivers. A study to determine training needs has been carried out under the project by World ORT Union (Switzerland), a consulting firm specialized in training, and its recommendations are now being implemented. The consultants, Research and Development, who assist Government in improving road maintenance operations, give practical on-the-job training to overseers, foremen and superintendents. The training of mechanics and truck drivers through the German technical assistance has been going on since 1968 and is showing good but slow results. Under the current Highway Maintenance Project Government has recruited through World ORT Union for a period of two years one instructor for the theoretical training of overseers and foremen, one instructor for the training of equipment operators and two teachers for the Ministry's technical school (Ecole des Travaux Publics) which turns out 4 to 6 technicians per year at the superintendent level among technicians of other disciplines. Once in full operation, this training program should provide adequately trained personnel and eventually Burundi instructors who will carry on the training program. Therefore, with the exception of training of technicians for the Ministry's soils laboratory and the continuation of training in the maintenance field, no training component is included in the proposed project. 3.26 Qualified graduates from the Ministry's technical school are sent abroad under bilaterally-financed fellowships to receive further technical education ranging from on-the-job experience to engineering studies in uni- versities. Those who returned were not bound by contract to serve in the Admin- istration and were, therefore, frequently absorbed by the private sector, i.e. AMSAR. To mitigate the problem which makes Government dependent on expatriates, Government issued a decree in August 1977 by which students who have completed studies at Government expense have to serve in the administration for a minimum of ten years. 4. THE PROJECT A. Objectives 4.01 The objectives of the proposed project are to assist the Govern- ment in reconstructing an economically important road and to improve Burundi's classified road network by betterment of selected road sections and continua- tion of the road maintenance program, which began in 1974 under the current Highway Maintenance Project (Credit 467-BU).  - 11 - B. Description 4.02 The project consists of: (i) construction of the Bujumbura-Cibitoke-Rugombo road (65 km) to two-lane bituminous standards; (ii) improvement of the classified road network through: (a) replacement of selected obsolete wooden bridges; (b) stabilization of selected steep road sections; and (c) implementation of the road investment program pro- posed in the Berger/BCEOM study; (iii) consultant services to: (a) supervise construction of (i); (b) prepare detailed engineering studies and supervise construction of (ii); and (c) continue the ongoing technical assistance to improve the Borrower's road maintenance operations; (iv) procurement of road maintenance equipment to replace existing equipment near the end of its economic life and to provide adequate capacity for mechanized road maintenance; and (v) improvement of the MTP's soils and materials laboratory by: (a) providing technical assistance to train local laboratory personnel; (b) procuring laboratory equipment and vehicles; and (c) reconstructing the laboratory building. (i) Bujumbura-Cibitoke-Rugombo Road Construction 4.03 The project road is situated within the Ruzizi Valley, which, due to its fertile soil, supports extensive agricultural activity, generating an Average Daily Traffic (ADT) of between 300 and 80 vehicles depending on the road section. The alignment of the existing road is generally satisfactory. However, its surface condition is poor. The absence of suitable gravel in the  - 12 - vicinity of the road makes proper maintenance difficult. The sunken profile, frequent flooding of the valley and the- impossibility of adequate drainage without major earthworks and replacement of structures make the road i:- sable after heavy rains, in particular, on its first 25 km. Under the proj- ect the road will be reconstructed to two-lane bituminous paved standards, and several alignment improvements will shorten the road from 68 to 65 km. 4.04 The proposed design standards for the road improvement (Table 8) are consistent with the standards used for other paved roads in Burundi and are appropriate for forecast traffic. They are based on a design speed of 80 km/h and a maximum gradient of 7%. The pavement will be composed of a natural gravel subbase and a cement stabilized base course with a double bituminous surface treatment on a 5.50 m width and a 1.50 m shoulder on each side. (ii) Improvement of Classified Road Network 4.05 Bridge Replacement: Government has prepared a list of about 40 defective wooden bridges with spans exceeding 4 m to be replaced by concrete structures to avoid damage to vehicles and interruption of traffic after complete disintegration of the wooden bridges. The 21 bridges tentatively selected by the appraisal mission from Government's list are those with an ADT of 20 or more vehicles (Table 9). Final selection of the bridges will be subject to a more detailed analysis to be carried out by the consultants engaged for the engineering and supervision of the road network improvements (para. 4.09). Design standards correspond to those given for the main road construction (Table 8). 4.06 Stabilization of Steep Grades: Government has prepared a similar list for steeply graded sections of the national road network, where frequent erosion of the gravel surface makes maintenance costly. Stabilization of these road sections by applying a single bituminous surface treatment on a natural gravel, stabilized soil or crushed stone base course would substan- tially reduce vehicle operating and maintenance costs. The road sections tentatively selected to be stabilized, listed in Table 10, have grades of 12% or more and 1976 ADT in excess of 20 vehicles. Again, final selection of the sections to be stabilized will be made on the basis of an analysis to be carried out by the consultants referred to in para. 4.09. 4.07 Investment Program: A study, financed under the current IDA Credit and carried out by the consultants Berger/BCEOM, concluded that, apart from its proposed investments in paved roads, Government should, over the next ten years, concentrate on the improvement of about 600 km of earth tracks to low-standard gravel and improved earth roads. The roads included in the project are those scheduled for improvement within the first four years of the program, yielding a first-year rate of return above 15% (see Table 11). To upgrade the earth tracks, two types of road improvement are proposed: the low standard gravel road (57 km) and the improved earth road (370 km). Design standards for the low standard gravel road shown in Table 12 are adequate to accommodate forecast traffic. Betterment works for the improved earth road are limited to the improvement of drainage facilities and the road surface, and do not involve any major earthworks.  - 13 - (iii) Consultant Services 4.08 Supervision of Main Road Construction: Since BCT lacks the super- visory capacity, consultants will be engaged under terms and conditions ac- ceptable to the Association to supervise the construction of the Bujumbura- Cibitoke-Rugombo Road. 4.09 Engineering and Superviion of Road Network Improvements: The replacement of bridges and the stabilization and improvement of road sections will need more detailed studies. Consultants will be engaged under terms and conditions acceptable to the Association to determine the final selection of the improvements, carry out basic and, if necessary, detailed design and to supervise subsequent execution of the betterment works. They will also analyze the appropriate technology for the execution of these works. 4.10 Technical Assistance: UNDP funds allocated for the continuation of the ongoing technical assistance program for road maintenance are insuffi- cient. Supplemental funds, to permit the successful completion of the program by the end of 1980, would be provided under the project. Furthermore, the Federal Republic of Germany has agreed to continue its technical assistance to the mechanical workshop in Bujumbura for the duration of the program. The program's main objectives are the strengthening of MTP's road maintenance capacity by training counterparts in all levels of maintenance activities until maintenance operations have become efficient and independent of expa- triate assistance. Government has agreed to appoint adequate local counterpart staff to the consultants, lack of which has impeded the effectiveness of training during the ongoing project. (iv) Maintenance Equipment 4.11 Government has submitted for procurement a reasonable list of road maintenance equipment (Table 13). Government's primary intention in procuring this equipment is not to increase the capacity of mechanized road mainte- nance, but by replacement to maintain this capacity at the adequate level determined during the appraisal of the Highway Maintenance Project. (v) Soils and Materials Laborator? 4.12 MTP's soils and materials laboratory is not of an adequate standard to permit satisfactory soil and material tests, and the Ministry has to rely on contractors' laboratories to control the quality of road or building construction. The Burundi technicians presently operating the lab- oratory lack experience, the appropriate equipment and adequate premises to perform most of the basic tests required for quality control. The project, therefore, provides financing for about 2 man-years of technical assistance for the training of Burundi staff; the procurement of laboratory equipment and 3 vehicles enabling the laboratory personnel to visit construction sites and to collect test samples; and, finally, the reconstruction of the obsolete laboratory building, the present location of which obstructs urban develop- ment plans. It has therefore been decided that, instead of rehabilitating the building, it will be reconstructed at a more appropriate location.  - 14 - C. Status of Engineering 4.13 Detailed engineering for road construction from Bujumbura to the Rwandese Border was prepared by the consultants DIWI and financed by the Government from local funds. The corresponding tender documents were also prepared by DIWI and adjusted by Government to take into account that the road is now only constructed as far as Rugombo. Detailed engineering and tender documents are satisfactory. D. Cost Estimates 4.14 Total project costs are estimated at US$26.5 million (US$24.0 mil- lion net of taxes) with a foreign exchange component of US$18.4 million or 70%. Detailed costs are as follows: Local Foreign Tctal Local Foreitn Total Foreign --PBu million -------- ------US$ thousand------- 2 A. ain Road Construction (i) Bujumbura-Kihanga (14 km) 73 137 210 817 1,517 2,334 65 (ii) Kihanga-Cibitske (41 km) 229 426 655 2,547 4,731 7,278 65 (iii) Cibitoke-Rugorbo (10 kn) 57 106 163 632 1,174 1,806 65 Subtotal A 359 669 1.028 3.996 7,422 11,418 B. Improvement of Road Network (i) Replacement of selected obsolete wooden bridges 26 38 64 284 426 710 60 (it) Stabilifatton of selected road sections with steep grades 31 59 90 350 650 1l000 65 (iii) Implementation of investment program for secondary roads 70 130 200 778 1.444 2.222 65 Subtotal B 127 227 354 1,412 2,520 3,932 C. Consulting Services (i) Supervision of A 12 48 60 133 52Z 665 80 (ii) Study and supervision of B 9 34 43 94 '-782 472 80 (iii) Continuation of technical assistance 45 182 227 505 2.021 2.526 80 Subtotal C 66 264 330 732 2.931 3.663 D. Maintenance Equipment 14 121 135 150 1.350 1.500 90 E. Improvement of MTP Laboratory (i) Technical assistance 2 7 9 20 80 100 80 (ii) Equipment and vehicles 1 5 6 7 60 67 90 (iii) Reconstruction of building 3 6 9 35 65 100 65 Subtotal E 6 18 24 62 205 267 TOTAL A-E 572 69 6352 1 6428 203780 P. Contingencies (i) Physical:- 102 on A-E 57 130 187 635 1.443 2.078 (1i) Price: (a) 152 on A 60 110 170 659 1.225 1,884 (b) 2a7 on B 27 51 78 300 565 865 (c) 171 on C 12 49 61 137 548 685 (d) 122 on D-E 2 19 21 28 205 _23 Subtotal F 158 359 517 1,759 3,986 5,745 TOTAL INCLUDING TAXES 730 1.658 2.388 8.111 18,414 26,525 70 TOTAL NET OF TAXES 499 1,658 2.157 5.556 18,414 23,970 77  - 15 - 4.15 The base costs are estimated as of January 1978 and have been derived as follows: (i) Main Road Construction The cost of construction of the Bujumbura-Rugombo Road has been estimated by the consultants Berger/ BCEOM on the basis of final design quantities and a survey of 1974 unit prices for construction in Burundi. These estimates have been updated by the appraisal mission to reflect price increases and the devaluation of the Burundi Franc in May 1976. (ii) Improvement of Road Network Costs for bridges are estimated by the consultants RD on the basis of updated unit-prices and average quantities per linear meter of bridge and are reasonable (see Table 9). The costs of stabilization of steep grades are like- wise based on updated unit-prices and an estimate made by RD of the area of road surface to be stabil- ized (see Table 10). Costs for the investment program were estimated adequately by the consultants Berger/BCEOM on a per km basis and average US$23,000 per km for the low standard gravel road and US$2,500 for the improved earth road (see Table 11). (iii) Consultant Services Supervision of main road construction is estimated by the appraisal mission at 5.8% of construction cost. Engineering and supervision of the road network improvements are estimated by the appraisal mission at 12% of total costs of improvements which would correspond to about 65 man-months at US$7,300 per man-month, judged adequate to cover the costs of the consultants' double function. Costs of technical assistance reflect the average yearly costs of the consultant team and the German technical assistance team presently working in Burundi. Some ten positions are filled by expatriates totalling about 360 man-months over the project period, at an average rate of US$7,000 per man-month.  - 16 - (iv) Maintenance Equipment Costs are based on updated recent supplier quotations and on updated bid prices received under the current maintenance project. (v) Laboratory Improvement This includes US$100,000 for technical assistance esti- mated on the basis of 20 man-months, at US$5,000 per month; US$70,000 for laboratory equipment and vehicles estimated on the basis of supplier quotations; and US$100,000 for the reconstruction of the laboratory building. (vi) Contingencies Details for the calculation of contingencies are given in Table 14. E. Financing 4.16 The project will be financed by an IDA Credit of US$14.0 million, an anticipated loan from BADEA of US$6.1 million, a grant from the Federal Republic of Germany amounting to US$0.80 million and a UNDP grant of US$0.9 million. These would cover 100% of the project's foreign costs and about 60% of the project's local cost net of taxes. The remaining 40% of local cost or US$2.2 million (US$4.7 million inclusive of taxes) will be covered by Government funds. In addition Government will have to meet the recurrent cost of road maintenance amounting to US$11.9 million (FBu 1,070 million) for the four-year period of project-implementation (see Table 7). The financing plan for the capital cost, net of taxes, would be: Cov.r~ent Carr.ny 1lDP BADEA IDA TWAL S o S. o f s off %.f Sof xof S of S of ,.tsl bori.. Tot-l Frseign Total foreign Total Yoreilg Total Foraiu mouot Cost Cost oat coat Cost ount Cost Cont lout Cost Cost AMont Cost Coat ------------- --~~-~~~~~~~~ ----------------------------- ds ullo -----_____________________________________________________,_________ ain road ostretio. 0.70 5 - - - t 5.81 45.0 u 6.39 50.0 52 12.90 I.proveynat of road Met" 0.92 20 - - - - - - 3.68 80 100 4.60 Coosnlt.,t asroic. 0.36 8 0.75 17 20 0.90 21 21 0.29 7.0 7 2 00 47 52 4.30 0q.idPent 0.18 10 - - - - - - - - - 1.67 90 100 1.85 laboratory 0.06 20 _ - _ _ _ _ 0.26 *0 100 0.52 LUz 0.75 o10 1s4o.00 23.97  - 17 - The exact amount and the conditions of the financing to be provided by BADEA are not yet known, but it is likely that the BADEA money will only be used for the financing of the main road construction and its supervision by consult- ants. The effectiveness of the BADEA loan is made a condition of disbursement for construction and supervision of main road construction. However if the Burundi Government should fail to obtain BADEA funds, IDA should be prepared to finance the first 45 km of the road corresponding to the availability of IDA financing. F. Implementation 4.17 Responsibility; MTP will be responsible for the implementation of all project components. Within the Ministry, the Department of Planning and Design (BCT) will have the responsibility for all construction work carried out by contractor and the improvement of the soils and materials laboratory, and the Roads Department (DPC) for the work carried out by force account and the procurement of maintenance equipment. Both departments will be assisted by consultants (paras. 4.08-4.10) during the execution of the project. 4.18 Scheduling: Main road construction and related supervision will start in the third quarter of 1978 and will take about 30 months with an estimated 25% of the works to be carried out in 1978, 45% in 1979 and 30% in 1980. Improvement of the road network will be spread over a period of 3-1/2 years, starting in mid-1978. Procurement of maintenance and laboratory equipment will take about two years, with the bulk of the equipment arriving in 1979. The project is expected to be completed by the end of 1981. An implementation schedule, which was agreed with Government, is shown in Chart 2. Reporting requirements including the preparation of a project completion report and indices for measuring implementation progress (Annexes I and II) have also been agreed. G. Procurement 4.19 Main Road Construction: The contract for the construction of the main road will be subject to International Competitive Bidding (ICB), according to Bank/IDA procurement guidelines. In view of Burundi's ongoing construction program, competition should be keen. Prequalification of con- tractors is presently being carried out by the Burundi Government. Should the list of prequalified contractors be acceptable to both IDA and BADEA, construction could be carried out under one contract only, and joint fi- nancing would be possible. Otherwise two separate contracts and parallel financing for distinct road sections might be necessary.  - 18 - 4.20 Improvement of Road Network: (i) Construction of the 21 bridges and culverts will be carried out under force account by DPC, which has proved its capa- bility for this type of construction under the current project. However, to alleviate staff constraints and to permit a shorter construction period, DPC will have the authority to subcontract some of the bridge work locally to Burundi contractors. Betterment of 370 km of tracks to improved earth roads (total cost US$ 0.9 million) will likewise be carried out under force account. This opera- tion would also be executed by DPC departmental forces which have adequate capability for this type of work; and (ii) Stabilization of steep grades and upgrading of 57 km of earth tracks to low standard gravel roads will be let to contractors after ICB on the basis of estimated quantities. Standard designs and, where necessary, detailed engineering would be carried out as construction proceeds. 4.21 Equipment: All equipment financed under the project can be grouped into major lots and will therefore be procured by ICB in accordance with Bank/IDA procurement guidelines. H. Construction Methods 4.22 Contractors are likely to use more equipment intensive methods for the construction of the road, in view of the conclusions of the ILO study referred to in para. 3.19 which specifically excluded the Bujumbura-Cibitoke road as a worthwhile candidate for labor-intensive construction since most of the available labor in the Ruzizi valley is already employed under existing agricultural schemes. The specifications for the stabilization of steep grades and the low standard road construction being situated in areas with higher unemployment will, however, encourage the use of labor-intensive methods. DPC force account will, when utilized under the project, feature its customary high proportion of labor. I. Disbursements 4.23 Disbursements will be on the basis of 45% of main road construction costs (including taxes) pending final financing arrangements between Burundi and BADEA. Disbursements for road improvement works will be 80% of total costs, and those for consulting services and equipment 100% of foreign costs and 65% and 80% of local costs, respectively. A disbursement schedule is shown in Table 15.  - 19 - 5. ECONOMIC EVALUATION A- Benefits and Beneficiaries 5.01 The combined effect of the implementation of the above project components would be to lower internal road transport costs and ensure all- season access between agricultural areas and markets, particularly Bujumbura, the main outlet for Burundi's exports. The principal beneficiaries would, therefore, be the rural farming population, The weighted average economic return of all project components would, even on conservative assumptions, exceed 17%. B. Main Road Construction 5.02 The Map of 1976 Burundi Traffic Flows (IBRD 12906) indicates that the Bujumbura-Cibitoke-Rugombo road supports the densest traffic of the Burundi unpaved road system. Present ADT varies between 300 and 80 vehicles depending on the road section. The Burundi Government therefore attaches highest priority to the reconstruction of this road to paved standards. The Berger/BCEOM feasibility study which was financed under the ongoing Highway Maintenance Project and which has been reviewed by the appraisal mission demonstrates that the upgrading of the 65 km Bujumbura-Kihanga-Cibitoke- Rugombo road to bitumen standards would yield satisfactory economic returns of 18%, 16% and 12%, respectively. The return for the road as a whole would be 16%. The consultants have assumed an average annual 5.5% growth of normal traffic for all vehicles over the project's twenty year lifetime; a 25% in- crease of light vehicle traffic in the road's opening year (1980) represent- ing induced traffic; and a 1% annual growth of heavy vehicle traffic, also representing induced traffic. These assumptions are reasonable. The return drops to 15% if induced traffic is not taken into account, to 13% if con- struction costs are increased by 20% and to 10.5% if vehicle operating cost savings are reduced by 30%. 5.03 The Bujumbura-Kihanga and Kihanga-Cibitoke sections would be clearly justified on the basis of savings in vehicle operating costs of normal and induced traffic serving the fertile agricultural areas of the Ruzizi Valley. The upgrading of the Cibitoke-Rugombo section, although yielding an overall 12% rate of return, would not show a satisfactory first year rate of return until 1984. However, since the construction cost involved is small and econ- omies will be achieved by concurrent construction with the other sections, construction of the entire road has been scheduled to start in late 1978, ending in 1980.  20 - C. Improvement of Road Network (i) Replacement of Wooden Bridges 5.04 Many of the dilapidated wooden bridges lie on routes with signifi- cant traffic flows. Early replacement by permanent structures would permit savings in maintenance and renewal costs and would eliminate the customary traffic dislocation following frequent bridge failures. Replacement by con- crete bridges will, in any case, probably be unavoidable in the long run with the progressive exhaustion of the country's timber resources. Traffic flow estimates are available for most of the individual bridge sites, and the economic feasibility of each replacement will be evaluated by the consultants carrying out the technical studies (see paragraph 4.09). Bridges located on routes carrying more than an estimated 20 vehicles per day in 1976 are listed in Table 9. Those finally selected will yield economic returns in excess of 12%. (ii) Stabilization of Road Gradients 5.05 The sLrfacing of the more steeply graded road sections would, by preventing excessive erosion and wear, reduce road maintenance costs and seasoral traffic delays. Again, the economic justification of the individ- ual improvements would be assessed on the basis of available traffic esti- mates by the specialists engaged to determine the appropriate means of sta- bilization and to carry out the necessary engineering. Sections proposed for stabilization with grades of 12% or more and 1976 ADT flows in excess of 20 vehicles are listed in Table 10. The threshold for their final selection will be an economic return of more than 12%. (iii) 11.i.gYay Investment Program 5.06 The highway investment program formulated by the consultants under the Highway Maintenance Project includes several secondary roads, the improve- ment of which to gravel or improved earth standards in 1978 would yield very high economic returns through potential vehicle operating cost savings to ncrmal and induced traffic. This recommended first phase of the program is shown in Table 11. Improvements equivalent to some 430 km of earth and gravel roads, with economic returns exceeding 15%, are proposed for financing under the project. D. Continuation of Highway Maintenance Project 5.07 The proposed financing of technical assistance and highway and laboratory equipment would be, essentially, a continuation of the Highway Maintenance Program initiated at the time of the Highway Maintenance Project in 1974. The evaluation of the Program contained in the Appraisal Report for the project has been updated on the basis of revised costs, traffic forecasts  - 21 - and actual expenditures, indicating an economic return on the program as a whole in excess of 20% (see Table 16). Most of the requisite capital equipment has been procured under the ongoing project and the program is now under way. Consequently, the incremental return on the renewal of technical assistance and additional equipment, which are essential constituents of the program, would be of a high order substantially in excess of the original 20% for the program as a whole. E. Risk 5.08 The only major risk would be the failure of the Government to provide adequate funds for the recurrent maintenance of the roads constructed or rehabilitated under the project. This would lead to a rapid deterioration of these roads, diminishing savings in transport cost and eventually nullifying the economic return on the investment. The continuing dialogue with Government on the adequate level of budget provisions for road maintenance (see para. 3.13) should help to minimize this risk. 6. AGREEMENTS REACHED AND RECOMMENDATIONS 6.01 Agreement has been reached with Government on the following: (i) the submission of a road investment program to be re- viewed by IDA (para. 3.02); (ii) the submission and adoption of a program for the pro- gressive creation of two separate services to maintain Bujumbura's township roads and the national road network respectively (para. 3.09); (iii) the maintenance of a position within MTP to coordinate the implementation of the road investment program (para. 3.11); (iv) adequate 1978 budget provisions for road maintenance and annual consultations between Government and IDA on budget allocations for future years (para. 3.13); (v) the terms and conditions of consultants' employment (paras. 4.08 and 4.09); (vi) the continuity and adequacy of counterpart staff (para. 4.10); and  - 22 - (vii) the implementation schedule, reporting requirements, including the preparation of a project completion report, and indices for measuring implementation progress (para. 4.18). 6.02 The effectiveness of the BADEA loan is a condition of disbursement for the main road construction and its supervision. 6.03 The proposed project is suitable for an IDA Credit of US$14.0 million on standard terms to the Republic of Burundi. February 8, 1978  TABLE 1 BURUNDI APPRAISAL OF A SECOND HIGHWAY PROJECT Road Network A. According to Administrative Classification Approximate Length (km) 1971 1977 Primary Roads (Routes Nationales) 570 545 Secondary Roads (Routes d'Interet General) 1,200 1,165 Tertiary Roads (Routes Provinciales) 1,230 1,274 Total Classified Network 3,000 2,984 Unclassified Roads 2,500 2,516 TOTAL 5,500 5,500 B. According to Surface Type Paved 70 200 Gravel 380 350 Earth 2,550 2,450 Track 2,500 2,500 TOTAL 5,500 5,500 Source: Appraisal Report No. PTR-109a and Berger-BCEOM Report "Road Investment Program 1978-1987" February 1977 February 1978  TABLE 2 BURUNDI APPRAISAL OF A SECOND HIGHWAY PROJECT Government's Road Paving Program Road Estimated CoBt Present Status Present Status Road ffi Length of Engineering of Financing (km) (FBu million) (US$ million) Gitega-Gihofi 93 1,350 15.0 Feasibility study com- Financing through pleted. Detailed German bilateral aid engineering proceeding. possible. Bujumbura-Rutovu 134 2,000-1. 22.2 Detailed engineering Financing agreed with completed. People's Republic of China. Bujumbura-Cibitoke-Rugombo- 75 1,310 14.5 Detailed engineering Proposed financing of Rwandese Border completed. Bujumbura-Rugombo section through IDA and BADEA. Bujumbura-Mutambara 76 1,310 14.6 Detailed engineering Financing agreed with completed. Prequali- African Development fication of contractors Fund and Kuwait Fund. completed. Mutambara-Nyanza Lac 45 780 8.7 Feasibility study Proposed to Kuwait completed Fund. Kayanza-Rwandese Border 21 340 3.8 Detailed engineering Financing agreed with completed. European Development Fund. Kayanza-Ngozi 32 510 5.7 Detailed engineering Financing agreed with completed. European Development Fund. Ngozi-Muyinga-Kobero 100 1,250 13.9 Feasibility studies Proposed to Saudi Fund. completed. Total 576 8,850 98.4 1/ No detailed estimates available. Source: Appraisal Mission estimates and feasibility studies for respective roads. February 1978  TABLE 3 BURUNDI APPRAISAL OF A SECOND HIGHWAY PROJECT Comparison of Highway Densities km of road km of road per 1,000 km2 per 1,000 habitants Burundi 210 1.4 Rwanda 231 1.6 Tanzania 36 2.6 Uganda . 103 2.9 Tunisia 95 3.0 Ivory Coast 107 6.7 France 1,100 14.3 Source: Bank Reports and Berger-BCEOM Study "Road Investment Program 1978-1987" February 1977 February 1978  TABLE 4 BURUNDI SECOND HIGHWAY PROJECT Vehicle Fleet 1968-1976 1968 1969 1970 1971 1972 1973 1974 1975 1976 Private Cars 2,594 2,866 2,932 3,219 3,788 4,164 3,347 3,867 4,404 4-Wheel Drive Vehicles 129 161 168 186 196 216 196 216 249 Station Wagons 143 153 149 157 164 170 87 108 122 Light Trucks & Vans 662 780 812 923 1,086 1,201 881 1,057 1,300 Heavy Trucks 545 586 533 555 621 673 528 567 636 Buses 7 7 10 10 10 23 37 45 64 Special Vehicles 44 48 46 46 51 56 57 63 66 4,124 4,601 4,650 5,096 5,916 6,503 5,433 5.923 6,841 Vehicles 247 225 195 252 2801/ 3051/ 3101/ 3101' 3201' 4,371 4,826 4,845 5,348 6,196 6,808 5,443 6,233 7,161 1/ Mission estimates Source: Burundi Highway Maintenance Project Appraisal Report, January 1974 Berger/BCEOM Highway Investment Program 1978-87 Draft Final Report, February 1977 February 1978  TABLE 5 BURUNDI APPRAISAL OF A SECOND HIGHWAY PROJECT Revenues from Road Users National Import Registra- Year Road Fund Duties tion Tax Total -----------------------------