Burundi - Third Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY EWE AWX Report No. 3228-BU BURUNDI THIRD HIGHWAY PROJECT STAFF APPRAISAL REPORT April 1, 1981 Regional Projects Department Eastern Africa Regional Office 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 I US$1.00 = FBu 90 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) 2 0.62 miles (m) 2 1 square kilometer (km ) = 0.386 square miles (m ) 1 ton (t) = 2,204 pounds (lb) FISCAL YEAR January 1 - December 31 GLOSSARY OF ABBREVIATIONS BCEOM - Bureau Central d'Etudes pour les Equipements d'Outre Mer (Central Bureau for Overseas Studies) DAF - Direction Administrative et Financiere (Directorate of Adminis- tration) DGR - Direction Generale des Routes (Directorate General of Roads) DTE - Direction Technique de l'Exploitation (Directorate of Implementation) DTEC - Direction Technique des Etudes et du Controle (Directorate of Design and Control) EDF - European Development Fund (FED - Fonds Europeen du Developpement) ER - Economic Return FRG - Federal Republic of Germany IDF - Industrial Development and Finance Department INTRACO - International Transport Company ITS - International Technical Services (Servizi Tecnici Internazionali); Consultants, Italy MTP - Ministere des Travaux Publics, de l'Equipement et du Logement (Ministry of Public Works) MTPT - Ministere des Transports, Postes et Telecommunications (Ministry of Transport and Communications) ORT - Organization for Rehabilitation through Training; Consultants, Switzerland OTRABU - Office des Transports du Burundi (Transport Office of Burundi) PPF - Project Preparation Facility R&D - Research and Development; Consultants, Belgium RIG - Route d'Interet General (Secondary Road) RN - Route Nationale (Primary Road) RP - Route Provinciale (Tertiary Road) UNDP - United Nations Development Programme USAID - United States Agency for International Development voc - vehicle operating costs vpd - vehicles per day  FOR OFFICIAL USE ONLY BURUNDI THIRD HIGHWAY PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. I. THE TRANSPORT SECTOR ............... . ................... . I A. Effects of Geography and Economic Structure on Transport ......................... 1 B. The Transport System ................. ......... 3 C. Transport Policy, Planning and Coordination ........ 4 D. Past Bank Group Involvement in the Highway Subsector. 6 II. THE HIGHWAY SUBSECTOR ............... .. ................. 7. A. The Road Network ...... ........................ 7 B. Traffic and Road Transport ................. 8 C. Administration, Staffing and Training .............. 12 D. Planning ..................... ...................... 13 E. Financing ..................... ..................... 14 F. Engineering ................. 16 G. Construction ................... .................... 17 H. Maintenance ..................... .................... 18 III. THE PROJECT ............................................ 19 A. Objectives ....... ................. .... 19 B. Project Description ................ .... 19 C. Cost Estimates ....... .............................. 25 D. Financing ..................., 27 E. Implementation . . ............ 27 F. Procurement . . ............. 30 G. Disbursement .................. . 30 H. Accounting, Auditing and Reporting Requirements ..... 31 I. Environmental Aspects ..... ......................... 32 IV. ECONOMIC EVALUATION .................................... 32 A. Evaluation of Project Components .................... 32 1. Construction of the First Section of the Ngozi- Kobero Road .................................... 33 2. Improvement of Secondary and Tertiary Road Networks .................... ................... 35 3. Manual Maintenance Program ..... ............... 37 4. Consultant Services ............................. 37 B. Risks ....................... ....................... 38 V. AGREEMENTS REACHED AND RECOMMENDATION .... ............... 39 This report was prepared by L. Revuelta (Engineer) and J. Van der Ven (Economist) who appraised the project in June 1980. The report was edited by P. Brereton. 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.  - ii - TABLE OF CONTENTS (Continued) ANNEXES Page No. 1 Status of Government's Compl4ance with Major Covenants in Previous Credit Agreements ..... ......................... 41 2 Equipment to be Provided under the Proposed Project ........ 43 3 Terms of Reference for Consultants R&D (including Terms of Reference for a Paved Road Rehabilitation and Maintenance Study) ............................... 45 4 Terms of Reference for Consultants ORT ............ 55 5 Terms of Reference for Technical Experts Assisting MTP (Minago-Tora Road-RP84) *.......... ........ 59 6 Terms of Reference for Planning Experts at the Ministry of Public Works and the Ministry of Transport and Communications. . ..... 60 7 Project Progress Reporting Requirements ............... .... 67 8 Economic Evaluation of the First 39.4 km Section of Ngozi-Kobero Road . ....... . .. ............ a...... . ......... 70 9 Economic Evaluation of Program of Road Improvements: Vehicle Operating Costs 1980 ............. .................. 71 10 Economic Evaluation of Program of Road Improvements: Equipment Replacement for Existing Brigade ....... .......... 72 11 Economic Evaluation of Program of Road Improvements: Establishment of Additional Brigade ...... .................... 73 12 Related Documents and Data Available in Project File ....... 74 CHARTS 1 Organization of Ministry of Public Works 2 Implementation Schedule MAPS 1 Burundi - International Surface Transport Connections (IBRD 15268) 2 Burundi - Road System (IBRD 15267)  BURUNDI THIRD HIGHWAY PROJECT STAFF APPRAISAL REPORT 1. THE TRANSPORT SECTOR A. Effects of Geography and Economic Structure on Transport It.01 Burundi is a small landlocked country situated just south of the equator in eastern Africa between Zaire and Tanzania on the northern tip of Lake Tanganyika (see Map 1). It covers only 27,820 km and is about 1,400 km from the Indian Ocean. The terrain is varied but is dominated by a hilly central plateau giving way to marshy valleys in the north and east and a Low-lying plain in the west. The climate is equatorial with sufficient rainfall in most areas to support rainfed agriculture. The generally rugged terrain of the country, the scattered settlement patterns as well as its landlocked position have contributed to shaping its transport infrastructure. 1.02 With approximately 4 million inhabitants, growing at a rate which may be as high as 2.7% p.a., Burundi 2s one of the most densely populated countries in the world (142 persons per km ). Ninety-five percent of the population is dispersed throughout the rural areas as small farmers who depend mainly on subsistence farming and on one principal cash crop, coffee, which provides the major source of foreign exchange for the country. Almost half the - population is concentrated in the Bujumbura-Ngozi-'Muyinga-Gitega area which produces most of the country's roughly 20,000 tons of coffee. Although there is scope to diversify agriculture and to increase agricultural production, the type of terrain and the settlement pattern preclude any significant change in the short and medium term, so that coffee will remain the country's main export for some time to come. 1.03 GNP per capita, estimated at US$180 in 1979, is among the world's lowest. GDP increased at about 4.8% from 1975 to 1979, but growth in the agricultural sector was much slower (2.5%) than growth in the industrial, construction and service sectors (9.8%). Mining and industrial activity is very limited (about 10% of GDP), although a nickel exploitation project using the country's peat resources as fuel is being studied. Burundi's export earnings are insufficient to cover the foreign exchange requirements of the economy and have to be supplemented by substantial external aid flows. External Transport 1.04 Burundi's trading partners are primarily the industrial countries and to a much lesser extent its neighbors. Although the country's external trade has grown quite rapidly in recent years, it is still comparatively small, and during 1976-78 imports averaged 109,000 tons p.a. while exports (mainly coffee) averaged 27,000 tons p.a. The marked imbalance between import and export flows is made worse from the point of view of transport by the  -2- highly seasonal nature of coffee exports. External trade is expected to grow at about 4.5% p.a., with volume remaining low and trade flows unbalanced. In the longer term, however, should a nickel mining project be brought on stream, traffic flows would increase substantially and the imbalance between import and export flows would be reduced. 1.05 For its external trade, Burundi is crucially dependent on transport through neighboring countries to Indian Ocean ports. Two main transport corridors are now used: the northern all road or road/rail route via Kigali/ Kampala to Mombasa (1,740 km by road or 1,925 km by road/rail); and the southern lake/rail connection via Bujumbura and Kigoma to Dar es Salaam (1,428 km) (Map 1). The southern route is the more economical and has tradition- ally carried most of Burundi's traffic (some 78% in 1977). However, because of capacity problems and bottlenecks on the Tanzanian Railways and at the Port of Dar es Salaam, the bulk of Burundi's oil imports now comes from Nairobi, and a greater proportion of general cargo imports is also being routed through Mombasa. But even the northern route has its problems. Efficient operations are constrained by cumbersome administrative procedures. The situation in Uganda has also created difficulties. For example, in 1979 Burundi suffered from the disruptive effects of the closing of the Uganda border during the hostilities in that country. As an alternative to the existing routes, another road/rail route connecting north-eastern Burundi to the railhead at Isaka in Tanzania is now being developed, and paving of various road sections of this route is either underway or planned. The proposed project would assist in this development by helping to finance construction of one section of the road link (para. 3.03). 1.06 The bottlenecks on the external access routes serving Burundi have increased both the time and cost of transport, but Burundi itself cannot appreciably improve the efficiency of either route since (a) only a small portion of the transport facilities are within Burundi's control; and (b) the volume of Burundi's traffic is quite low in both absolute terms and relative to the total traffic using the same routes, so that Burundi has very little leverage over transport decisions made by the transit countries. Burundi has, however, attempted to improve transport on the northern route by constructing a paved road to the Rwandese border and by expanding its vehicle fleet for road transport; on the southern route, it is considering improvements to Bujumbura Port and modernization of lake transport facilities. In order to further assist Burundi as well as Rwanda in assessing the relative advantages of existing and potential external transport routes and in identifying the actions and investments required to improve the efficiency of these routes, the Bank Group prepared a study on the external transport connections of the two landlocked countries. 1/ The conclusions of the study were that: (a) the two existing surface routes now serving Rwanda and Burundi will continue to offer these countries the least-cost access to Indian Ocean ports, at least in the medium term; and (b) transport on these routes would be markedly improved by a number of measures (e.g., simplified customs and border regulations) and by projects which either have recently begun or are about to begin. The Governments of Rwanda and Burundi as well as some of the transit countries khave reviewed the report a-m a sssed its ViniLngs wiLth the Saw& Gtop- P more extensive study, to be completed in early 1981, is also being carried out by the United Nations Conference on Trade and Development (UNCTAD) on the 1/ "A Report on the International Transportation Bottlenecks Affecting Rwanda and Burundi," December 1980, No. 3224-EAF.  - 3 - international transport connections of Rwanda, Burundi, Uganda and eastern Zaire. These studies should assist the countries involved and the donor agencies to agree on a plan of action and priority investments for the medium and longer term. The parties involved are considering holding a conference under the auspices of UNCTAD to follow up on the recommendations of these studies. B. The Transport System 1.07 Burundi's transport infrastructure is limited to a network of 5,500 km of roads and tracks; Bujumbura Port on Lake Tanganyika; and an international airport at Bujumbura. There are no railways or navigable rivers. Internal transport is therefore entirely dependent on the highway network which is discussed in more detail in Chapter II. Lake Transport 1.08 Lake transport links Bujumbura to ports in Tanzania, Zaire and Zambia. Transport operations are handled by ARNOLAC, a private company in wlich Government is an important shareholder. The fleet, consisting of three self-propelled barges and eight tow barges, is old and unsuited to modern transport and handling methods. Although Government-set tariffs would not be sufficient to cover major overhauls or replacement of the fleet, Government is nevertheless considering investments in new barges to prevent any possible loss of capacity or higher costs on the external transport route to Dar es Salaam. The transport planning expert to be provided under the proposed project (para. 3.17) will develop a clear policy to promote efficient lake transport operations. ]..09 Fixed installations at Bujumbura Port are state-owned, while the lhandling facilities and most of the warehouses are privately owned by the "Fxploitation du Port de Bujumbura," which Government will gradually take over by 1997. The port's fixed installations have an estimated capacity of 300,000 to 400,000 tons p.a. and are more than adequate for current (about 150,000 tons p.a.) and projected traffic levels. For the immediate future, the port quays are scheduled to be resurfaced with financing from Government, and improvement of the container-handling capacity and the installation of a ship-repairing capacity are now being studied. In view of the proposed transfer of port operations from private to public ownership and the past poor performance of public sector companies, there is a risk that port opera- tions will deteriorate during the transfer period and thereafter. The Govern- ment is aware of the weaknesses in the public sector companies and requested Bank assistance to help it design and carry out the necessary reforms. With support provided under the Second Technical Assistance Credit (Credit 917-BU), work has begun on preparing reforms affecting the public sector companies. In view of the importance of the port of Bujumbura for the country's external transport, it is expected that the formulation of a suitable institutional and operational framework for the port will be addressed on a priority basis in the following stages of the program for reform. Air Transport 1.10 Buztndi has an international airport located near Bujumbura, c.apwble of handling aircraft of the B-707 and B-727 type. Another small airport serves Gitega but does not provide scheduled flights. Bujumbura airport is  -4- equipped for 24-hour operations, and provides service to Europe and the capitals of neighboring African countries. Passenger traffic amounts to some 15,000 to 20,000 arrivals and departures per year. Freight traffic increased sharply from about 500 tons p.a. during 1974-77 to 3,200 tons in 1979, but in absolute terms the volume remains small. Air Burundi, the national airline company, operates flights to Nairobi via Kigali and to Kigoma and Bukavu. 1.11 In view of the small size of the country, air transport primarily serves Burundi's external transport needs, and in times of crisis offers the only alternative to the two dominant surface routes. In mid-1979, for example, Government organized a.special.airlift for much of its essential imports, which were caught in a.severe backlog of freight at Dar es Salaam Port. The Government plans to expand the airport's storage and handling facilities and to strengthen the runways in order to receive the much heavier wide-bodied aircraft and to handle increased traffic over the coming years. The report on the international transportation problems of Rwanda and Burundi (para. 1.06) concluded that an all-air route to Europe would be economical for only a small proportion of Burundi's total traffic, so that the planned investments in air transport infrastructure might be questionable from a strictly economic point of view. The expanded facilities are, however, in line with Government's policy of developing alternative external transport connections in order to reduce dependence on the existing routes (para. 1.13). C. Transport Policy, Planning and Coordination 1.12 Three ministries have responsibilities in the transport sector: (a) the Ministry of Public Works (Ministere des Travaux Publics, de l'Equipement et du Logement - MTP) for roads; (b) the Ministry of Transport and Communica- tions (Ministere des Transports, Postes et Telecommunications - MTPT) for the other modes and for transport operations; and (c) the Ministry of Planning (Ministere du Plan), the central planning body responsible for the coordination of all investments. The Ministries of Public Works and Transport have in the past been closely involved in the preparation of transport sector policies and planning, but neither Ministry has a formal planning unit. Overall planning responsibility is vested with the Ministry of Planning which also coordinates all external financing. The Ministry is currently being helped in overall planning activities by a technical assistance team provided under the Second Technical Assistance Credit; however, no transport planner was included in the team. 1.13 The current Third National Plan (1978-82) was based more firmly on economic criteria and on extensive cooperation between the Ministry of Planning and the technical ministries than were the previous plans. The Plan has two particular socioeconomic goals: (a) the reduction of the economy's dependence on coffee production by diversifying the agricultural sector and developing mining and industry; and (b) the decentralization of economic and social activity away from Bujumbura by promoting the development of regional economic centetrs. U3nderlying these obojectives are the counttxy's lanilocked 'positio-l a-nd its natated exort-ipoQtttXows. Ovear alA, GovexnmTert' s transport investments and policies respond to the objecti-ves of the five-year plan and generally to the needs of the economy by aiming at: (a) improving  -5 the existing internal road network to support the productive sectors and to facilitate decentralization; (b) improving alternative external connections to reduce the country-s dependence on the unreliable lake/rail connection to Dar es Salaam; and (c) building up a road transport industry for domestic and international transport. 1.14 Under the current five-year plan, US$103 million in constant 1976 prices (25% of the public sector investment program) was allocated during the 1978-82 period for improvement of the road infrastructure, and another US$31 million was earmarked for road, lake and air transport operations (see Table 1.1). In line with the Government-s aim to improve road connections, the plan placed strong emphasis on road paving--some 550 km over the five-year period. Table 1.1: National Investment Plan, 1978-82 (in 1976 constant prices) FBu millions US$ millions Total Investments under Plan 67,580 750 Total Public Sector Investments 37,850 420 Road Infrastructure 9,290 103 - of which road paving 7,140 77 Road, lake and air transport operations 2,760 31 1.15 Implementation of the transport plan is dependent on the availability of external financing. The Government has, however, been able to obtain financing for most of the road infrastructure investments. Implementation is progressing relatively well although delays and cost increases have inevitably occurred, to a large extent due to the disruption in international transport ito and from Burundi during 1979. L.16 Investments in transport operations have thus far been directed toward road transport through the creation in January 1978 of a semi-public International Transport Company (INTRACO) for road transport to and from Mombasa to help reduce Burundi's dependence on the transport route through Tanzania. A parastatal domestic transport company, Office des Transports du Burundi (OTRABU), was also established in May 1978. The Bank Group assisted INTRACO under an Industrial Development Finance Credit (Cr. 731-BU, US$3.4 million, 1978), which provided funds to purchase trucks. Both companies expanded their vehicle fleets rapidly and experienced difficulties in running their operations and in covering operating expenses from revenues. INTRACO became insolvent in late 1980 due to difficulties with transit through Uganda and weak management. The Government decided to liquidate the company and established a new international transport division within OTRABU which acquired part of INTRACO's assets.  -6- 1.17 Although Government's limited transport planning and coordination capacity and arrangements were largely adequate in the past, serious planning questions and policy issues are beginning to arise with regard to the external supply and evacuation routes as well as the development of the domestic road infrastructure. Disruptions of flow on the external routes have demonstrated the need for a capacity to formulate policies for the development and utiliza- tion of existing and potential routes to gain relatively secure access to export markets and import sources at minimum cost. As regards further develop- ment of the road infrastructure, the current road investment program will provide the country with a basic network of national and interregional roads. Thereafter, road investments should be carefully prepared with a view to the hierarchy of different road sections in the network, the timing and level of proposed improvements, and the network implications. Furthermore, programs developed on this basis should be periodically updated. Responding to these needs, the Government has requested technical assistance under the proposed project to establish a planning capability for the transport sector within the MTPT and for the highway subsector at the MTP (para. 3.17). During negotia- tions agreement was reached with Government that by March 31, 1982 planning units will be created within these two-ministries (para. 5.01 (a)). D. Past Bank Group Involvement in the Highways Subsector 1.18 The Association's two previous road projects in Burundi have assisted Government in training Roads Department staff, in.stitution building parti- cularly for maintenance activities, and improving the road network. The Highway Maintenance Project (Credit 467-BU, US$5.0 million, 1974) had its origin in a 1970 engineering credit (Sll-BU) which financed consultants to carry out a study of Burundi's highway maintenance needs. The project helped finance the preparation and implementation of a four-year maintenance program, including the establishment of a manual road maintenance organization and one mechanized maintenance brigade, and the provision of technical assistance for these activities and for the training of local staff. The project also included studies for future highway development which was carried out under the Second Highway Project. The Maintenance Project, completed in September 1980, significantly improved the manual road maintenance organization. The project's objectives in mechanical maintenance and technical assistance were satisfactorily achieved to the extent that the project initiated actions in these areas. Support for these activities was continued in the Second Highway Project and results will be consolidated under the proposed project. The Maintenance Project also provided an impetus to the Government to allocate adequate funds for maintenance. A project completion report for this project is being prepared. 1.19 The Second Highway Project (Credit 773-BU, US$14 million, 1978) provided for the paving of a major national road, Bujumbura-Rugombo (65 km), ( the start-up phase of an improvement program for selected secondary roads and bridges, the construction of a new central laboratory, strengthening of the mec.kianizec maintenance brigade and tne provision ot tecbnical assistance and equipment for the ongoing maintenance program. The quality of the road construction works is good, but progress has been seriously affected by the  -7- disruption in international transport through neighboring countries in 1979 (para. 1.11) which caused a six-month halt in construction. Final costs are expected to be 50% higher than estimated. The maintenance and technical asEsistance components are generally meeting their institution-building objec- tives; however, due to a lack of local counterparts and problems in retaining local staff in service once they are trained, it has not beea possible to reduce technical assistance as expected. Measures to avoid the latter problem will be taken under the proposed project (para. 3.13). Government's compliance with major covenants agreed under the previous Credits is satisfactory (Annex 1). 1.20 As mentioned in para. 1.16, the Government's goal of diversifying its supply routes was also assisted with funds made available under an Industrial Development Finance Credit, part of which was onlent to INTRACO which was established as an international trucking company. 1b21 Finally, Burundi's problems with supply and evacuation routes were the subject of a Bank Group study (para. 1.06). It is expected that the recommendations of the study on measures to eliminate transport constraints and its analysis of the relative costs and advantages of the various access routes should assist future donors in identifying uwat assistance is needed. II. THE HIGHWAY SUBSECTOR A. The Road Network 2.01 The classified road network totals about 3,000 km (Table 2.1), of which 280 km (9.5%) are paved, and 90 km are of engineered low gravel standard; the rest are earth roads and tracks. In addition, there are about 2,500 km of unclassified earth tracks. Some 160 km of paved roads are under construction, and detailed engineering has been 2completed or is under way for another 400 km. Road density is about 200 m/km or 1.4 km per 1,000 inhabit- ants, the latter being below the average for East African countries.  -8- Table 2.1: Classified Highway Network by Administrative Category and Surface Type - 1979 Primary Roads Secondary Roads Tertiary Roads (Routes (Routes d'Interet (Routes Pro- Nationales-RN) General-RIG) vinciales-RP) All Roads Bitumen 280 - 280 Gravel 45 45 - 90 Earth 220 1,120 1,200 2,540 Total 545 1,165 1,200 2,910 Source: Roads Department, June 1980 2.02 The network is adequate in length for the country's current needs, but its condition is not satisfactory. The network consists mainly of unengineered earth roads and tracks which have a poor alignment and are narrow, with widths ranging from 4 to 7 m. Due to the country's difficult terrain and heavy rains, maintenance costs are high. Better engineered roads and the paving of steeply graded road sections are therefore required to prevent maintenance costs and/or vehicle operating costs from rising exces- sively. In addition, the network is dependent on a large number of small bridges, many of which are in very poor condition. These problems are cur- rently being addressed under a road improvement and bridge replacement progtam, which was initiated under the Second Highway Project.with financing from the Kreditanstalt fur Wiederaufbau (KfW) and IDA. The program would be continued under the proposed project (paras. 3.07 and 3.13). B. Traffic and Road Transport 2.03 Traffic volumes are light throughout the country. In 1976 only 10% of the entire 5,500 km road network carried more than 50 vehicles per day (vpd). The highest traffic levels (150 vpd and above) are found on the principal roads radiating from Bujumbura. Since detailed countrywide counts were taken in 1976 as part of the highway development study under the Highway Maintenance Project, only a few selective traffic counts have been carried out, mostly for road feasibility studies. One of the major tasks of the planning unit to be created in MTP (para. 1.17) will be to introduce system- atic traffic counts. 2.04 The composition and growth of the vehicle fleet is shown in Table 2.2. In 1978, the fleet totalled about 10,150 (of which some 1,400 were in the public sector) or 2.5 vehicles per 1,000 inhabitants. The private vehicle fleet includes about 5,300 passenger cars, mainly in Bujumbura, 1,900 pickups, 925 trucks and 95 buses, with the balance made up of four-wheel drive vehicles, station wagons and trailers. Over the period 1974-78, the growth in pickups and trucks has been. fastet than. tn. te ethexr vwicle catego-izres (L 5.5