Announcement of Ghana to Receive Twenty-Five Million Dollars IDA Credit for Highway Maintenance Project on May 29, 1980

FOR IMMEDIA Tf RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. o Telephone: (202) 477-1234 IDA NEWS ~ELEASE NO. 80/82 May 29, 1980 GHANA TO RECEIVE $25 MILLION IDA CREDIT FOR HIGHWAY MAINTENANCE PROJECT The lnten,ational Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a $25 million credit to Ghana to help finance a third highway project. The credit will enable Ghana to reactivate the road mainte- nance program, which was initiated under the last highway project and whic~ had come to a virtual standstill due to a severe foreign exchange shortage. It will also increase the capacity of the domestic trucking fleet to transport food and other essential commodi- ties. The project, the total cost of whfch is $38.6 mflliun, will provide for routine maintenance ov~r the next two years on all public roads (25,400 kilometers), and periodic maintenance on about 6,000 kilometers of paved, gravel, and feeder roads. Spare parts, lubricant~, bitumen, and tools required by the Ghana Highway Authority and by private domestic road maintenance contractors will be financed. The capacity of these domestic contractors and of related businesses to undertake road maintenance will be increased by providing funds for equipment, spare parts, and material to them through a line of ditto.the.Bank for Housing and Construction. This bank will also administer funds • twill be placed in the Special Import Facility. The funds will be used to purchase spare parts, tires, tools, and lubricants needed by contractors executing road mainte- ndnCB works for the Ghana Highways Authority and by a number of small private trucking firms engaged in agricultural transport. Technical assistance will be provided to the Bank for Housing and Construction to strengthen its management and operations. It will also be provided to improve the operational capacity of domestic private contractors and to strengthen the capacity of the Ghana Highway Authority's central workshop. The project is expected to have immediate and substantial benefits on the economy. It will permit improved flows of cocoa e><ports as well as of foodstuffs and other commodities, alleviating food shortages in urban areas, and helping to restore normal production processes in other sectors dependent on timely delivery of supplies and inputs. Overall agricultural and industrial output is expected to increase. Savings will result from reduced vehicle operating costs, reduced accidents, time savings, and avoidance ,of premature road reconstruction. The $25 million IDA credit to Ghana is for 50 years, including 10 years of grace. It is interest free but will carry a 3/4 of 1% service charge per annum to cover IDA 1 s administrative expenses. ~E: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E C HN I CAL DAT A PROJECT: COUNTRY: TOTAL COST: Third Highway (Emergency Maintenance) Ghana $38 •6 mi 11 i on • IDA FINANCING: $25 million, on standard IDA terms OTHER FINANCING: Government of Ghana, $2.3 million; contractors and truckers, $10.9 million; and Bank for Housing and Construction (BHC), $0.4 million IMPLEMENTING ORGANIZATION: Ghana Highway Authority P. 0. Box 164 1 Accra, Ghana Cable: Highways, Accra, Ghana PROJECT DESC~IPTION: The project will (a) enable Ghana to carry out routine maintenance for the next two years on all public roads (25,400 km) and periodic maintenance on about 6,000 km of paved, gravel, and feeder roads by providing spare parts, lubricants, bitumen, and tools required by the Ghana Highway Authority (GHA) and private domestic contractors engaged in road maintenance; (o) increase the capacity of private domestic ~ontractors and quarry operators to undertake road maintenance works by providing equipment and related spares through a line of credit to the BHC; (c) enable remobilization of part of the domestic trucking fleet by providing spare parts, lubricants, and tools; and (d) strengthen the insti~utional capacity of BHC and the private domestic contractors through technical assista!'!ce. PROCUREMENT: GHA's immediate needs through end 1981 for spare parts and • tires, as well as its lubricant requirements until June 1981 ($5 million), will be procured on the basis of limited international tendering. There- after, through the end of 1982, GHA's requirements for spare parts, tires, and lubricants ($3.7 mfllion) will, to the extent possible, be standardized and purchased in bulk under contracts awarded through international competitive bidding, following World Bank/lDA guidelines. In all cases, the items procured will be subject to prior approval by IDA. Bitumen wil i be procured from the country's only bitumen refinery under a negotiated contract sati~factory to IDA. Spare parts, tires, tools, and lubric~nts for contractors and truckers ui.der the Special Import Facility, estimated to cost $6 million, \•Jill be procured by 1oca1 trading companies, selected by BHC in accordance with the procedures which assure competitiveness and are satisfactory to JOA. The procurement of equipment for contractors and quarry operators, estimated to cost $4 million, will be on the basis of limfted international tendering. Contracts for such items, not exceeding $200,000, will be procured on the basis of quotations received from not Jes~ than three suppliers. CONSULTANTS: Consultant services, totaling 6 man-years, and comprising a financial systems and reporting expert, a project appraisal and supervision expert, and short-term consultants in organizational management» account- ing practices, and various technical/engineering fields will be required by the BHC. In addition, 24 man-months of a technical consultant; based in BHC, will be needed to advise the contracting industry on contracts, bidding, and technical matters, and 9 man- months of-a procurement specialist will be required to assist BHC and Plant Pool Ltd., a wholly owned subsidiary of BHC, in the implementation of the Special Import Facility. The project qlso requires 12 man-months of a technical expert to strengthen t.he operati. of GHA's central workshop. ECONOMIC DATE OF RETURN: 100%+ ESTIMATED COMPLETION DATE: 1982 - 0 -