Mali - Road Maintenance Project

i~~~~~~~~FL copyf Document of The World Bank FOR OFFICIAL USE ONLY Report No. 2597a-MLI MALI ROAD MATNTENANCE PROJECT STAFF APPRAISAL REPORT February 6, 1981 Western Africa Projects Department Highways Division This document has a restricted distribution and may be used by recipients only in the performance of I their official duties. Its contents may not otherwise be disclosed without World Bank authorization. |  CURRENCY EQUIVALENTS Currency Unit = Malian Franc (MF) US$ = 420 MF MF 1 million = US$2,381 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES: Metric System Metric British/US Equivalent 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (km2) 0.386 square mile (sq mi) 1 hectare (ha) = 2.47 acres 1 kilogram (kg) = 2.2 pounds (lb) 1 metric ton (ton) = 2,204 pounds (lb) ABBREVIATIONS AND ACRONYMS CFM - Chemin de Fer du Mali CMTR - Compagnie Malienne de Transports Routiers CPTP - Centre de Perfectionnement des Transports et des Travaux Publics (Training Center) EDF - European Development Fund FAC - Fonds d'Aide et de Cooperation (France) GSPD - General Study and Programming Division MP - Ministry of Planning MTPW - Ministry of Transport and Public Works NDPW - National Directorate of Public Works NWS - New Works Service ONT - Office National des Transports PWES - Public Works Equipment Service PWREC - Public Works Research and Experiment Center RAN - Regie Abidjan-Niger RDPW - Regional Directorate of Public Works RSS - Road Strengthening Service TSWD - Technical Studies and Works Division  MALI FOR OFFICIAL USE ONLY ROAD MAINTENANCE PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I. THE TRANSPORT SECTOR ....................................... 1 A. General Setting ....................1................... B. Transport Infrastructure and Industry ................. 2 C. Access Routes to the Sea ..... .............. . 3 D. Transport Coordination and Planning .... ........... 5 II. THE ROAD SUBSECTOR ......................................... 6 A. Road Network .......................................... 6 B. Road Transport Characteristics .... ................... 7 C. Road Transport Industry ..... ..................... 9 D. Administration ....................................... 10 E. Staffing and Training ................................. 10 F. Planning .............................................. 11 G. Financing ............................................. 11 H. Engineering and Construction ..... ..................... 16 I. Maintenance ........................................... 16 J. Technology Choices .................................... 17 K. Past Bank Group Assistance ..... ....................... 18 III. THE PROJECT ................................................ 19 A. Introduction ..................... ..................... 19 B. Project Description ............... .. .................. 20 C. Routine Maintenance Program ........... .. .............. 21 D. Strengthening PWES .................................... 22 E. Training ..................... O.. 22 F. Periodic Maintenance ................. ................. 23 G. Transport Data Collection Unit . . 24 H. Vehicle Axle-Load Control ............ .. ............... 24 I. Technical Assistance ................. ................. 25 J. Project Cost ........ ............. ..................... 25 K. Project Financing ....... ........... ................... 27 L. Recurrent Costs ................... .................... 28 M. Execution ...................... ....................... 30 N. Procurement ........................................... 30 0. Disbursements .................... ..................... 31 This report is based on the findings of appraisal missions which visited Mali in October 1978 and March 1979. Members of the mission were Messrs. E. Staffini (senior highway engineer), A. Byl (economist) and A. Foures (training consultant). 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 - Page No. IV. ECONOMIC EVALUATION ........................................ 33 A. Main Benefits and Beneficiaries ....................... 33 B. Economic Analysis ..................................... 34 C. Project Risks ......................................... 37 V. RECOMMENDATIONS ...................... ...................... 38 TABLES 1. Road Investments, 1974-1978 ................................ 40 2. Road Maintenance Equipment - Cost Estimates . ............... 41 3. Training Center (CPTP) - Construction of Buildings, Purchase of Furniture and Equipment - Cost Estimates ....... 42 4. Periodic Maintenance of Bituminous Roads .... ............... 43 5. Periodic Maintenance of Gravel Roads - Design Standards .... 44 6. Project Costs Estimates .................................... 45 7. Unit Cost of Individual Road Maintenance Operations ... ..... 46 8. Vehicle Operating Costs .............. .. .................... 47 9. Road Maintenance - Summary Benefit/Costs ................... 48 10. Benefit/Cost Analysis - Road Maintenance Program .... ....... 49 11. Benefit/Cost Analysis - Periodic Maintenance of Bamako-Kangaba Road ........................................ 50 12. Benefit/Cost Analysi$ - Periodic Maintenance of Koulikoro Banamba Road ..................................... 51 13. Benefit/Cost Analysis - Periodic Maintenance of Fana-Dioila Road ........................................... 52 ANNEXES I. Plan of Action ............................................. 53 II. Technical Assistance to Public Works Equipment Service - Outline Terms of Reference ................................. 55 III. Audit of Accounts - Outline Terms of Reference .... ......... 58 IV. Procedure of Disbursements Against Statements of Expenditures ............................................... 60 V. Documents and Data Available in the Project File .... ....... 62 CHARTS A. Organization of the Ministry of Transport and Public Works B. Project Implementation Schedule MAP IBRD 14147R  MALI ROAD MAINTENANCE PROJECT STAFF APPRAISAL REPORT I. THE TRANSPORT SECTOR A. General Setting 1.01 Mali is a large landlocked country in Africa's Sahel region covering 1.24 million km2. It is sparsely populated, particularly in the northern desert areas (almost two-thirds of the country), with a population of 6.3 million increasing at a rate of about 2.5% per year. About 90% of the popula- tion lives in rural areas. Gross Domestic Product (GDP) grew at about 6% per year during 1974-78 was only US$120 per capita in 1978. Economic activity is concentrated in the south of the country, where there is sufficient rain- fall for rainfed agriculture. 1.02 Agriculture, including livestock raising and fishing, is the main- stay of the economy and accounts for nearly half of GDP and for virtually all foreign exchange earnings. Staple foods, such as sorghum and millet, and drought tolerant export crops, such as cotton and groundnuts, are the most important crops. In the Niger River Valley, particularly around Mopti, there is some irrigated and flood recession cropping of rice. About 85% of the 2 million hectares of land under cultivation are devoted to food crops; cotton and groundnuts occupy about 100,000 and 250,000 hectares respectively. 1.03 In recent years, performance of the agricultural sector has suffered from fluctuations in weather, particularly drought followed by occasional flash flooding. The 1972-74 drought was catastrophic for animal husbandry: the cattle population fell from 5.5 to 3.5 million. Cereal and export crops also declined. However, production of export crops recovered rapidly and is now substantially above pre-drought levels; the same is true for cereals, but to a lesser extent. The catch of freshwater fish also exceeds pre-drought levels. 1.04 The secondary sector, though small, has expanded more rapidly than other sectors of the economy. Simple processing of agricultural products, such as rice milling, cotton ginning, oil seed crushing, and the production of agro-based factories such as textile mills and a sugar plant, account for about half of the secondary sector. The remaining half comprises mainly production of small import substitution and public utility goods. 1.05 Mali continues to suffer from several important development cons- traints: (i) a weak agricultural base, because of poor soils and low, ill- distributed rainfall; (ii) limited natural resources (identified mineral  resources are insignificant); (iii) a shortage of capital and skilled tech- nical and managerial manpower; (iv) distance to the sea: Mali's principal outlets to the sea, Dakar (by rail) and Abidjan (by road/rail), are 1,000 to 1,300 km from Bamako respectively; and (v) poor internal communications due to the country's large size and its widely dispersed population. B. Transport Infrastructure and Industry 1.06 Mali has a simple transport infrastructure with road and rail by far the most important modes. The network consists of about 14,300 km of roads and tracks; a 642 km single-track railway linking Koulikoro on the Niger river with Bamako, Kayes (Mali's second largest town), and the Senegalese border, where it joins the Senegalese railway (paras. 1.08 and 1.09); more than 1,000 km of sparsely used inland waterways, navigable at best seven months a year (para 1.10); and two international airports (para 1.11), and several domestic airfields open to commercial traffic. Road 'rransport 1.07 Road transport accounts for more than half of total freight trans- port, including imports and exports, and probably 80% of all passenger transport. Details of the road sub-sector are given in Chapter II. Railway Transport 1.08 Chemin de Fer du Mali (CFM), the Mali Railway, a state-owned com- pany, transports some 230,000 tons of freight per year or about half of Mali's imports and exports (para 1.14) and almost all domestic freight and passenger traffic west of Bamako. It was once part of the Dakar-Niger Railway, which operated under a single management until 1960, when it was dissolved and the assets were divided between CFM (38%) and the Senegalese railway (62%). 1.09 During the severe 1972-1974 drought, railway traffic increased sub- stantially because large quantities of food were imported. After a decline in 1975 and 1976, mainly caused by substantially reduced food imports signal- ling the end of the drought, traffic increased in 1977 and 1978 by 3.2% and 4.2% respectively but still remains substantially below former expectation because of a shift in traffic from rail to road (para. 1.13). Water Transport 1.10 Water transport is only about 32,000 tons per year because the two major rivers, the Niger and Senegal, which flow through the country over a length of about 2,000 km, provide poor navigation conditions. The Niger river constitutes the principal access route for the vast area northeast of Mopti, which has about one million inhabitants. The period of navigability extends from June/July to December from Koulikoro, near Bamako, east to Mopti, and from August to October further east to Gao. Further navigation is impeded  - 3 - by rapids about 150 km downstream from Gao. The Senegal river is navigable from the sea up to Kayes, near the western border, only from August to October which considerably limits its usefulness. A purpose of the proposed Manan- thali Dam is to allow fuller utilization of the Senegal river. The only company plying the Niger river is the state-owned Compagnie Malienne de Navigation (COMANAV). On the Senegal river, transport is by private canoes. Air Transport 1.11 Mali has two international airports: at Senou near Bamako and at Gao. The former was recently improved and can accommodate Boeing 707-type aircraft. Thirty other airports are open to domestic traffic--but only seven have regular commercial traffic: Kenieba, Kayes, Nioro, Nara, Mopti, Goundam and Tombouctou. Air Mali, a state-owned company, carries all domestic and about half the international passenger traffic. 1.12 Mali's air traffic statistics show a steady increase in interna- tional air transport and a decrease in domestic air transport. Average annual increases in international traffic during the years 1973-77 were about 13% for passengers and 9% for freight. Domestic freight traffic, about 150 tons in 1973, dropped to only 6 tons in 1977. This is mainly the result of operational problems experienced by Air Mali. In a large, sparsely inhabited country such as Mali, air transport may be a cost effective transport mode for some parts of the country. A recently completed draft Transport Plan Study (para 1.23) found that air transport could play a more important role and recommended that the fleet of Air Mali, now obsolete, be renewed. This, however, should be carried out with a major reorganization-- technical and administrative--of the airline, which involves large invest- ments. The study indicated that cooperation with foreign international airlines could be a first step toward an improved service. C. Access Routes to the Sea 1.13 Mali's international traffic to and from the sea moves over two major routes: the Senegal route and the Ivory Coast route. The Senegal route consists of the rail line (1,280 km) from the port of Dakar to Koulikoro. The Ivory Coast route consists of a 610 km section between the port of Abidjan and Ouangolodougou on the Abidjan-Ouagadougou rail line (Regie Abidjan-Niger, RAN) and a 580 km road section between Ouangolodougou and Bamako. At present, the Malian traffic from Abidjan is carried mostly by road because the railway station at Bobo-Dioulasso (Upper Volta), further north on the line, is no longer used for political reasons, and Ouangolodougou has no storage facili- ties. Alternative routes to the sea through Conakry (Guinea), Buchanan (Liberia) and San Pedro (Ivory Coast) are shorter than through Dakar or Abidjan, but have not been developed. 1.14 International traffic is almost evenly divided between the two most important routes. As shown below, however, the Abidjan route has increased its share of total foreign traffic from 38% in 1966 to 55% in 1977 in spite of a clear cost disadvantage for goods whose origin or destination is the Bamako area (about two-thirds of total exports-imports).  -4- Foreign Trade by Routes, 1966 and 1972-1978 (in thousands of tons) 1966 1972 1973 1974 1975 1976 1977 1978 Imports 259 210 370 441 367 299 349 n.a. Via Dakar 179 141 206 242 175 145 152 216 Via Abidjan 80 69 164 199 192 154 197 n.a. Exports 74 79 94 92 128 168 189 n.a. Via Dakar 29 64 53 52 78 93 92 66 Via Abidjan 45 15 41 40 50 75 97 n.a. Total 333 289 464 533 498 467 538 n.a. Via Dakar 208 205 259 294 256 238 244 282 Via Abidjan 125 84 205 239 242 229 294 n.a. 1.15 The major reason for the imbalance in traffic is operational difficulties on the Senegal and Mali railways and in the port of Dakar. Slow mainline and terminal operations and lack of resources to complete railway rehabilitation have been aggravated by poor operational management and staff discipline, inadequate staff training, and poor coordination between the two railway organizations. 1.16 As the Bamako-Dakar railway remains the in the short run least cost means of transport from an economic standpoint, Mali should rely on the Bamako-Dakar rail route to transport most of its imports and about half of its exports. The Abidjan road and road/rail routes should be mainly used for imports destined for Mali's eastern regions, exports of cotton products, and contingencies when the Mali and Senegal railways are unable to meet demand. However, allocation of traffic between the Senegal and the Ivory Coast routes is not always made on sound economic criteria nor with sufficient knowledge of all relevant data. 1.17 The Dakar-Bamako route has not always been able to meet demand despite past efforts to improve both railways and. the transit through the port of Dakar. However, two ongoing projects should arrest deterioration and lead to improvements in management, operations, and capacity. At the same time, the poor condition of 366 km of track in Senegal is going to require a massive investment (US$70 million to US$120 million at 1978 prices) over a period of 10 to 15 years. Before such an investment is made, alternatives must be carefully considered.  -5- 1.18 The most important alternative is a road linking Dakar with Bamako. A paved road from Dakar to the Mali border will, in all likelihood, be com- pleted by 1985. Once this road is completed, Mali will have to face the dilemma of whether it will: (i) build a short road from the Senegalese border to Kayes, possibly diverting traffic from the Dakar-Kayes section of the railway and incurring transfer costs at Kayes; or (ii) build a much longer road from the Senegalese border to Bamako, which could ultimately lead to the diversion of the vast bulk of CMF's traffic to road transport. 1.19 Well before critical decisions are made, studies will have to be undertaken to develop medium- and long-term strategies. These strategies will need to be coordinated on a regional level in the light of plans to complete a paved road system between Dakar and Kayes, Kayes and Bamako, San Pedro and Bamako, and Conakry and Bamako. The Bank is studying the problem of Mali's international corridors and is expected to discuss shortly with the Government a work program which would assist Mali in arriving at a clear understanding of the least-cost alternatives. D. Transport Coordination and Planning 1.20 The Ministry of Planning (MP) is in charge of overall transport policy and planning. Major transport companies are publicly owned: CFM, COMANAV, Air Mali, and CMTR, a trucking company (para. 2.09). The Office National des Transports (ONT) is a semi-autonomous Government agency res- ponsible to the Ministry of Transport and Public Works (MTPW), through which the Government allocates freight to different companies, including private truckers. The Government sets all domestic rail, air, river and trucking tariffs. 1.21 There is no formal unit in MTPW to carry out transport planning and coordination: individual advisors counsel the minister. The recently completed draft Transport Plan Study recommends the creation of a unit to continue to collect and process regularly transport data. This unit would be staffed with Malian professionals who participated in the Transport Plan Study and temporarily assisted by expatriate technical assistants. 1.22 The 1974-78 Economic and Social Development Plan, implicitly extended to 1979, started in the middle of the drought and world-wide infla- tion. Its long-term objectives were to ensure rising real incomes for the entire population and to build a national economy insulated from adverse climatic and external factors. The plan outlined over-ambitious transport investments. Out of forecasted investments for all sectors of almost MF 400 billion (US$900 million) at 1972 prices, about 20% or MF 80 billion (US$180 million) was for transport, of which 75% or MF 60 billion was for roads. By end-1978 the total cost of the revised transport investments was MF 87 billion at current prices, but only about MF 19.4 billion had been disbursed, mostly for roads. Road investments (Table 1) have been primarily financed with foreign aid, with a small local contribution to project costs (about 20%).  -6- 1.23 The ongoing discussion on the Transport Plan Study should help the Government come to grips with the fact that there is a limit to the growth of transport infrastructure and that emphasis must be put on better use of the existing infrastructure. Isolated areas may have less expensive transport links than roads, such as airfields, river ports or simple tracks. Construction of other modal links duplicating existing infrastructure may have to be postponed. Planned road expenditures of MF 100 billion for the 1979-83 period are somewhat lower in real terms than the MF 60 billion during the 1974-79 period, but a realistic figure should probably not exceed MF 10 billion per year, at current prices, or about half of the total now being considered. The Government is examining the comprehensive report on the transport plan and a synthesis highlighting the most critical features is expected to be prepared by mid-1981. 11. THE ROAD SUBSECTOR A. Road Network 2.01 Mali has about 14,300 km of roads and tracks, of which about 13,000 km are classified as national, regional or local, according to the importance of the centers they serve and the traffic they carry. A summary presentation of the road network follows. Road Network, March 1979 (in km) Technical Classification _ Administrative Paved Unpaved Feeder Roads & Tracks Classification Roads Roads Improved Seasonal Total Classified 1,612 1,647 1,924 7,831 13,004 National Roads 1,506 1,104 1,117 1,969 5,696 Regional Roads 97 543 767 4,188 5,595 Local Roads 9 - 40 1,664 1,713 Non-Classified 56 - 713 a/ 510 1,279 TOTAL 1,668 1,647 2,637 8,331 14,306 a/ Feeder roads constructed under previous projects which need to be classified.  - 7 - 2.02 The road network is concentrated in the south where population density is highest. The main axes are Bamako-Faladie-Bougouni-Sikasso-Zegoua, L.ie import-export route to Abidjan, and Faladie-Segou-Mopti, which serves the eastern part of the country. Paving the Sikasso-Koutiaia link under financing from the European Development Fund (EDF) will complete the direct road link between the border with the Ivory Coast and Mopti. Construction to paved standards of Sevare-Gao road (556 km) has started in 1980 under financing from Germany and several Arab development banks. Existing paved roads were constructed between 1955 and 1965 and are rapidly deteriorating because of the increase in traffic and vehicle weight, and insufficient maintenance. Faladie-Segou has been reconstructed under the Second Highway Project (para 2.32). Bamako-Bougouni urgently needs reconstruction. Bougouni-Sikasso- Zegoua is receiving emergency maintenance under the Third Highway Project. Other paved roads badly need maintenance. The main unpaved roads have rarely been regravelled except for sporadic operations. B. Road Transport Characteristics Vehicle Fleet 2.03 The Office National des Transports registers new vehicles, but does not record vehicles retired from service. The following table show the vehicle fleet estimates from 1971 to 1978, the latest date for which statistics are available. The vehicle fleet was estimated at 23,300 in 1978, and is probably about 24,000 now. Estimated Vehicle Fleet at End of Years 1971 and 1973-78 1/ (in number of vehicles) Type of Vehicle 1971 1973 1974 1975 1976 1977 1978 Passenger Cars 9,675 11,093 11,870 12,510 13,123 13,953 14,268 Vans, pick-ups 3,672 3,720 3,968 4,560 5,073 4,999 5,804 Trucks 2,845 2,482 2,620 2,837 2,810 2,633 2,410 Road Tractors 256 396 406 532 527 481 504 Buses 89 117 113 170 184 258 171 Special Vehicles 100 81 98 90 90 126 148 Total 16,637 17,889 19,075 20,699 21,807 22,450 23,305 Trailers and Semi-Trailers 271 356 419 558 599 434 408 1/ Military vehicles not included.  - 8 - 2.04 Passenger vehicles constitute a rising percentage (58% in 1971 and 62% in 1978) of the vehicle fleet. Vans, trucks and heavy road tractors decreased from 41% to 37% of the total fleet from 1971 to 1978, but transport capacity increased considerably due to a shift from relatively small trucks to large semi-trailers. The growth rate of the vehicle fleet, which averaged almost 10% per annum between 1965 and 1971 and 7% between 1971 and 1975, was only about 4% in 1976-78, but this rate may hide a substantial renewal of the vehicle fleet. Fuel Consumption 2.05 The following table shows the best estimate of fuel consumption by road users as derived from data supplied by several sources. Fuel Consumption by Road Vehicles, 1971-78 (in millions of liters) 1971 1972 1973 1974 1975 1976 1977 1978 Taxed Consumption 1/ Gasoline 43.3 45.9 46.7 41.5 43.3 60.7 66.7 73.0 Diesel fuel 19.4 19.6 22.9 21.8 25.8 34.2 34.2 38.3 Total 62.7 65.5 69.6 63.3 69.1 91.7- 100.9 111.3. Yearly increase in % - 4.5 6.3 -9.0 9.2 32.7 10.0 10.3 Total Consumption Gasoline n.a. n.a. 50.3 51.3 58.9 65.2 71.7 79.0 Diesel fuel n.a. n.a. 29.8 32.0 37.7 40.3 43.4 47.2 Total n.a. n.a. 80.1 83.3 96.6 105.5 115.1 126.2 Yearly increase in % n.a. n.a. n.a. 4.0 16.0 9.2 9.1 9.6 Taxed consumption, which decreased in 1974 during the Sahelian drought, increased in the 1975-1977 period with a peak in 1976 when concessions for tax-free use of fuel were curtailed. The increase in diesel fuel con- sumption has been more rapid than that of gasoline, which may reflect a shift in the composition of the vehicle fleet towards heavier diesel trucks. Fuel taxes are discussed in para 2.17. 1/ Military vehicles and a limited number of public services are exempted from fuel taxes.  -9- Traffic 2.06 During a two-week period in January (crop season) and in June (end of the dry season), the subdivisions of the National Directorate or iubiic Works (NDPW, para 2.10) take manual traffic counts, assess the quantities of goods and passengers transported, and make an origin/destination survey. The data should be analyzed by the General Studies and Programming Division (GSPD) of NDPW but GSPD has not been able to process and verify data since 1976 because it is short of qualified staff. 2.07 The following table shows average traffic in 1976, the most recent year for which processed data are available. Based on the increase in the vehicle fleet and fuel consumption, road traffic is estimated to have increased about 8% per year between 1975 and 1978. Average Daily Traffic by Class of Road, 1976 (in number of vehicles) Hlaj or Paved Unpaved Feeder Roads and Tracks Roads Roads Improved Seasonal 151 32 17 10 C. Road Transport Industry 2.08 M4ali's road transport industry consists of about 500 private truckers who own about 70% of the fleet of trucks above 5 tons, or about 1,080 trucks. State-owned companies manage the rest, but they carry less than 30% of traffic because of their vehicles' lower capacity. Except about 20 larger firms in Bamako, private truckers belong to regional cooperatives which are loosely organized in the Union Nationale des Cooperatives de Transporteurs Routiers (UNCTR). The cooperatives act mainly as lobby and mutual aid organi- zations, and cover their costs by a small, variable levy. A proposal to set this levy to 5% of the transport cost and to use these funds to organize workshops in the regions is being discussed. Private taxis and minibuses handle passenger transport. 2.09 The other components of the road transport industry are the Government-owned Compagnie Malienne de Transports Routiers (CMTR), and agri- cultural, commercial and industrial agencies possessing their own vehicle fleets. CMTR is becoming less important in the road transport industry; its fleet had gradually been reduced from 250 vehicles to about 60 vehicles by IMarch 1976. Between 1976 and 1978 nearly 600 heavy trucks and semi-trailers were added to the private trucking fleet, partly to replace obsolete vehicles. The effect was to increase capacity beyond demand thereby creating irregulari- ties in the allocation of freight. This was soon eliminated by the shift of traffic from rail to road on the Abidjan route (para. 1.13); this is costly and needs to be looked into urgently. The Bank study of Mali's corridors (para 1.19) includes this issue.  - 10 - D. Administration 2.10 The National Directorate of Public Works (NDPW) within the Ministry of Transport and Public Works (MTPW), plans, designs, constructs and maintains roads, and supervises technical studies for railways, river ports and airports. NDPW has two divisions and three technical services (Chart A): the General Studies and Programming Division (GSPD), in charge of preparing investment and maintenance programs and budgets, and con- trolling expenditures; the Technical Studies and Works Division (TSWD), responsible for dealing with the study of projects and supervision of works; the New Works Service (NWS), carrying out gravel road construction and improvement; the Road Strengthening Service (RSS), dealing with major maintenance of paved roads; and the Public Works Equipment Service (PWES), which purchases and repairs road equipment. NDPW's eight Regional Direc- torates of Public Works (RDPW) carry out road maintenance and other public works activities through 18 subdivisions. An Accounting Office, supervised by an Administrative and Financial Unit, performs accounting work. Other MTPW branches relating to roads are: the Public Works Research and Experi- ment Center (PWREC), which performs laboratory tests; the Surveying Insti- tute (SI); and the Transport and Public Works' Training Center (Centre de Perfectionnement des Transports et des Travaux Publics, CPTP). E. Staffing and Training 2.11 NDPW's professional staff is composed of about 20 engineers and 60 technicians, all Malian. Generally, engineers have received adequate training but many of the lower echelon technicians have only on-the-job training. There is no permanent technical assistance, except one mechanical engineer in PWES financed by the Fonds d-Aide et de Cooperation (FAC, France). There are about 1,100 permanent workers. Temporary laborers vary between 300 and 500 according to seasonal requirements. 2.12 Training began under the First Highway Project (para 2.31). Consultants in charge of training performed well but the tasks were too large to be carried out in only three years. Therefore, technical assis- tance was extended about one year under the Second Highway Project (para 2.32). Although road personnel was trained in basic skills, the reduced maintenance activity over the past several years has had a detrimental effect, and most old and new employees need further training. A training center, CPTP, was created and facilities built under the Second Highway Project, and equipment and technical assistance to train local instructors were financed under the Third Highway Project. Little training has been carried out at CPTP because the first instructors and monitors were not appointed until October 1977 and then in insufficient number. At end-1979, however, all instructors and monitors were appointed, and the Government has extended a technical assistance contract for their training (para. 2.33) under the Third Highway Project.  - 11 - F. Planning 2.13 GSPD plans road construction, which is reviewed by the Ministry of Planning, and road maintenance. Data collection and process- ing have deteriorated during past years, but the Malian counterparts who participated in the Transport Plan Study have acquired sufficient experience to continue the data collection and processing effort generated by the study. A transport data collection unit, which will be assisted by the proposed project, would improve the situation (para. 3.21). G. Financing 2.14 Road user charges comprise taxes levied on fuel and lubricants, imported vehicles and spare parts, vehicle registration fees and duties, and taxes on insurance and freight vehicles. Import taxes and customs duty on gasoline and diesel fuel are the only user charges earmarked for the Road Fund (para 2.15) and were raised in November 1979 (para. 2.17); these taxes had remained constant since 1972, therefore the Road Fund could not keep pace with inflation. Other road user charges go to the Treasury for general budgetary purposes. As shown below, revenues from fuel were practically constant during the 1971-75 period, then increased substantially in 1976 and were practically stagnant since then. Revenues from Road User Charges, 1971 and 1973-1978 (in millions of MF) 1/ Year 1971 1973 1974 1975 1976 1977 1978 1979 Taxes on Fuel 1,960 2,150 2,308 2,066 3,025 2,913 3,296 3,301 Taxes on Vehicles and Spare Parts 820 1,220 1,823 3,061 2,285 2,540 n.a. n.a. Vehicle Registration 490 530 194 222 249 268 539 n.a. Taxes on Insur- ance and Goods 2/ 2/ 2/ 2/ 2/ Vehicles 1,200 1,300 1,450 1,600 1,760 1,940 n.a. n.a. TOTAL 4,470 5,200 5,775 6,949 7,319 7,661 n.a. n.a. 1/ As of December 31, 1979. Due taxes continue to be deposited after the end of the year. 2/ Estimated.  - 12 - 2.15 Government expenditures for roads are financed from the national budget, the Road Fund and foreign aid. The national budget finances part of administration costs and occasionally urgent investment work. The Road Fund finances (i) road maintenance including equipment renewal; (ii) road studies and investment; (iii) the Public Works Research and Experiment Center; (iv) urban street improvements; and (v) the debt servicing of loans for roads. The following table shows road expenditures between 1971-78. Foreign con- tribution represented about 56% of total road expenditures and 73% of invest- ment expenditures. A comparison with the table in para. 2.14 indicates that overall road user charges were on average 20 to 30% above total current road expenditures during the years 1971-1977. Road Maintenance and Investment Expenditures and Financing (in millions of MF) 1971 1972 1973 1974 1975 1976 1977 1978 I. Expenditures A. Current Expenditure 697 906 1,123 1,726 1,259 1,158 1,354 1,946 Road maintenance 540 730 914 1,282 841 730 961 1,519 Administration 157 176 209 278 357 348 323 380 PWREC n.a. n.a. - 41 36 45 42 - Urban streets n.a. n.a. n.a. 125 25 35 28 47 B. Investment Expenditure 2,734 5,194 2,036 3,012 4,904 4,458 4,792 6,396 TOTAL 3,431 6,100 3,159 4,738 6,163 5,616 6,146 8,342 II. Financing A. National Sources 1,557 2,097 2,202 2,666 2,439 2,414 2,919 3,065 Road Fund 1,400 1,921 1,933 2,388 1,882 1,884 2,446 2,685 of which investment (736) (956)(1,050) (940)(1,180)(1,073)(1,415)(1,119) National Budget 157 176 209 278 557 530 473 380 B. External Sources 1,874 4,003 957 2,072 3,724 3,202 3,227 5,277 TOTAL 3,431 6,100 3,159 4,738 6,163 5,616 6,146 8,342  - 13 - 2.16 During past years road maintenance was limited to about 50% of the total network as most revenues originating in the sector were allocated to the treasury, and the Malian contribution to foreign financed road invest- ment absorbed a large part of revenues earmarked for roads (para. 2.19). Had a full maintenance program been undertaken, expenditures for road would have far exceeded the allocated revenues for the 1971-1978 period. Given the present limited revenue, the Government will not be able to finance both routine and periodic maintenance of the entire network in the near future. The Association, therefore, has recommended that the Government concentrate on routine maintenance, leaving the backlog of periodic maintenance to be financed from foreign aid. Since the Government has indicated that it welcomed Bank Group advice in identifying new road user charges or other sources of revenue for road expenditures, a Bank transport economist visited Mali in February 1979 for this purpose. His final report sent to the Govern- ment in April 1979 recommended additional taxes on fuels, imported vehicles, and vehicle axle-load. 2.17 As a result of this study, the Government increased fuel taxes in November 1979 by MF 10 per liter or 30% above the previous tax level for gasoline and 53% for diesel fuel. Present fuel taxes, MF 43 per liter on gasoline and MF 29 per liter on diesel fuel, represent about 12% of the selling price (average of gasoline and diesel fuel) while they were about 17% of mid-1979 prices. In addition to the increase in taxes, fuel prices were raised in June and November 1979, and February and July 1980 because of increased oil cost. Between June 1979 and July 1980 fuel prices increased by 93%. Regular gasoline now costs MF 350 per liter (US$0.83 per liter) and diesel fuel MF 250 per liter (US$0.60 per liter). These price increases caused a reduction in growth of fuel consumption to an estimated 5% in 1979 from about 8% in previous years. Austerity measures taken by the Government to limit the use of official vehicles for private purposes is expected to further reduce fuel consumption. 2.18 The following table shows that the Road Fund would still be insufficient, at the present level of fuel taxes and despite a foreign contribution to recurrent cost financing under the project (para 2.22), to finance both road maintenance and the Government's contribution to the large investment program planned for the coming years. The inadequacy of Road Fund revenues would be further aggravated if, contrary to the assumption made in preparing the table below, road construction contracts were not exempted from all taxes. The proposed project aims at providing a mechanism to assure adequate funds for a minimum maintenance program.  - 14 - Road Fund Revenues and Expenditures Forecast, 1980-1984 (in millions of MF at current prices) 1/ 1980 1981 1982 1983 1984 Fuel Consumption Estimates (m3) Gasoline 77,438 79,762 82,952 87,100 91,455 Estimated Growth 2% 3% 4% 5% 5% (Tax: MF 43/1) Diesel Fuel 42,222 44,333 46,993 50,283 53,802 Estimated Growth 4% 5% 6% 7% 7% (Tax: MF 29/1) A. Revenues 2/ 4,554 4,715 4,929 5,203 5,493 B. Expenditures 3,656 5,770 6,783 5,303 5,582 1. Road Maintenance 2,310 2,127 3/ 2,441 3/ 2,979 3/ 4,358 a. Routine maintenance 1,890 1,746 1,921 2,319 3,390 b. Equipment renewal 420 381 520 660 968 2. Debt Service. 550 600 250 250 250 3. City Streets 240 220 240 265 290 4. Road Investment 4/ 556 2,823 3,852 1,809 684 a. Sevare-Gao (556 km) 206 810 1,466 1,600 538 b. Sikasso-Koutiala (120 km) 50 50 - - - c. Kersedougou-Sevare (105 km) - 67 143 76 - d. Markala-Niono (74 km) 5/ - 1,786 2,122 - - e. Feeder Roads 100 - - - - f. Paparah Bridge (Kayes) 100 - - - - g. Studies and Research 100 110 121 133 146 C. Balance 898 -1,055 -1,854 -100 -89 D. Cumulated Balance 6/ 898 -157 -2,011 -2,111 -2,200 1/ Assumes an annual 10% inflation. 2/ Assumes no further increase in fuel taxes. 3/ Net of foreign contribution under the project (para 3.31). Includes 5% physi- cal contingency. 4/ Includes only investments for which external financing has been secured, and represents a Malian contribution of 10% to road construction costs except for Markala-Niono road. All road investment contracts free of taxes. 5/ Balance to an ADF loan of about US$10.5 million. 6/ Does not include Road Fund balance at end-1979, which amounts at about MF 600 million held in the Postal Checking System.  - 15 - 2.19 In 1976, as a covenant to the Third Highway Project, the Govern- ment agreed that it would meet all road maintenance expenses out of the Road Fund before allocating funds for investment. This condition, however, has not been fulfilled since contractual obligations to foreign-financed road projects compelled the Government to use a large part of Road Fund revenues for road investment. Although Road Fund revenues increased by about 26% from 1974 to 1977 (para. 2.14), funds allocated to road maintenance and administration decreased from about 55% of total Road Fund in 1974 to about 35% in 1977. In 1978, expenditures for road maintenance increased about 60% to MF 1,519 million, most of which appears to be spent for salaries and settlement of outstanding debts. Although detailed figures for 1979 are not fully available, it appears that expenditures for road maintenance exceeded the amounts spent in 1978. 2.20 A major problem of the Road Fund is that almost all its revenue comes from checks drawn on the Postal Checking System (PCS) managed by the Postal Service, which is having increasing difficulty remaining liquid. Since 1975, the Road Fund-s liquid revenues have been more and more used to finance the Malian contribution to road investments which were financed from foreign sources. The illiquid part was mostly left for road maintenance but could not be fully utilized and was a main factor in the reduction of road maintenance operations. To avoid this problem, the Government promised to take adequate measures to rehabilitate the PCS using funds from the intended drawings on the International Monetary Fund (IMF) and requested that the Bank and IMF provide technical assistance to help prepare a plan for such rehabilitation. The Government, however, delayed taking action on this matter while discussing with IMF the feasibility and legality of using IMF funds for such rehabilitation. A joint Bank/IMF mission visited Mali in August 1980 to initiate discussions on comprehensive macro-economic reforms, but a solution to the PCS problem is not expected in the near future. The Road Fund, therefore, will continue to be alimented with illiquid postal checks, making it unlikely that it can finance timely and effectively all recurrent costs of routine maintenance. 2.21 To ensure that the local share of recurrent costs for road mainte- nance will be met before allocating funds for investment, a share of Road Fund revenues will be allocated each year to routine road maintenance, based on requirements for minimum maintenance operations. The amounts to devote to routine road maintenance are indicated in para. 3.33. 2.22 Recognizing that a large part of the Road Fund's resources will remain illiquid until resolution of the PCS problem, and that further delay will cause serious network deterioration through lack of routine and periodic maintenance, the proposed project will provide funds to help the Government meet most of the foreign exchange component of recurrent costs of routine maintenance for a limited period and on a decreasing basis (paras 3.04 and 3.31).  - 16 - H. Engineering and Construction 2.23 NDPW's Technical Studies and Works Division is responsible for engineering and supervision of road construction and carries out small engineering studies and supervises minor projects. TSWD uses foreign consult- ants, frequently assisted by its own engineers, for major engineering studies and supervision of works. Since TSWD engineers have gained experience, EDF is having TSWD supervise construction of the Sikasso-Koutiala road (135 km) to paved standards with only a small advisory staff from a foreign consultant. TSWD is helped in its engineering activity by the Surveying Institute for topographical surveys, and the Public Works Research and Experimentation Center for laboratory tests. PWREC is well-equipped and can perform all regular soil and construction material tests required for road design and construction. The Societe d'Etudes du Mali (SEMA), a state-owned consulting firm, has also carried out road feasibility studies and detailed engineering, often jointly with foreign consultants. 2.24 Foreign contractors, one of whom has a long-established Malian branch, have constructed all major roads. NDPW's New Works Service has acquired skill in feeder road constrution and improvement under IDA projects. The army also executes some road works. There are no major domestic road contractors in Mali, but some are able to undertake minor works such as surface dressing. Several private Malian contractors build small buildings; major building contracts are executed by the state-owned SONETRA and foreign contractors. Given the Government s inclination to execute minor road works and road maintenance by force account, the lack of continuous programs and the limited scope of major road works, there is little short-term prospect that domestic contractors would be able to expand to the civil works field. I. Maintenance 2.25 NDPW, through its eight regional directorates and 18 subdivisions, is responsible for maintaining about 11,600 km of roads including the total classified network with the exception of local roads classified as tracks (table, para 2.01). Routine and periodic maintenance is carried out entirely by force account. Because of the lack of materials and equipment, NDPW has been able to execute only scattered and ad hoc maintenance on the most important roads (5,000-6,000 km). The subdivisions lease road maintenance equipment from the Public Works Equipment Service which carries out major equipment repair at its central workshop in Bamako; routine maintenance and minor repairs are made in subdivision workshops. Equipment lease charges have been updated recently to cover 1979 costs. The personnel was trained and the workshops were constructed or improved and equipped under the First and Second Highway Projects; the staff now needs substantial additional training, and the central workshop needs minor building improvement.  - 17 - 2.26 At the end of the First and Second Highway Projects (paras 2.31- 2.32) during which road maintenance was strengthened, technical assistance was phased out on the assumption that a smooth road maintenance program was in place. The Third Highway Project, therefore, was directed to periodic maintenance of paved roads (para. 2.33) but, because of poor management and a lack of funds, the equipment was immobilized and materials were unavailable causing road maintenance to deteriorate and the personnel skills previously acquired to erode. The proposed project will address these issues. Addi- tional training will improve personnel performance while funds for road maintenance will be provided through adequate allocations under the Road Fund (para. 3.33) and an external contribution to recurrent costs (para 3.31). 2.27 A major problem was also PWES- poor performance which was identi- fied several years ago, but remained unresolved for political reasons. A 1978 study financed under the Third Highway Project cited poor management, lack of funds and inadequately trained personnel as major factors contributing to PWES unsatisfactory output. It concluded that technical assistance was needed to retrain PWES management and personnel and to help eliminate the substantial backlog of equipment repair. These operations will require at least three years because, out of 625 pieces of equipment existing at the time of appraisal, only 288 were in working condition (although 232 still needed minor repair), 125 required major repair and 212 could only be scrapped. A new PWES director, with a satisfactory management background in other NDPW services, was appointed in February 1979, and, after a period under his management, PWES has shown some improvement. 2.28 The proposed project will help PWES management to overcome re- maining shortcomings by (a) ensuring funds for equipment renewal and maintenance, (b) providing technical assistance and spare parts to eliminate the backlog of equipment repair, and (c) training staff. To give an early start to improving PWES efficiency, the composition of the Third Highway Project has been changed to provide early technical assistance (about 50 man-months) and the purchase of spare parts for equipment repair (about US$0.7 million) needed until the proposed project is effective. J. Technology Choices 2.29 An optimal balance in the use of labor and equipment for the proposed project has been thoroughly studied in light of Mali's geographical and economic situation, and the availability of labor. Manual labor will be used when available for light maintenance operations ("cantonnage"), such as filling pot-holes, cutting grass, clearing ditches and culverts and loading small trucks whose capacity has been chosen for this purpose (para 3.08). A mix of labor and equipment will be used for patching, spot and emergency repair and regravelling of shoulders. Maintenance operations which cannot be carried out by hand, such as grading, compacting and brush dragging, will continue to be carried out with equipment. The use of manual labor under the project, for which appropriate hand tools and simple equipment are provided, will better utilize NDPW's unskilled staff.  - 18 - K. Past Bank Group Assistance 2.30 Bank-Group involvement in Mali's road subsector started in 1967-68 when it acted as executing agency for a countrywide transport survey financed by the United Nations Development Programme. The survey concluded that, with the exception of a few trunk roads, the main road system could serve the transport needs of the country without heavy investment, but highway mainte- nance needed to be improved and agricultural feeder roads constructed. Three highway projects have been aimed at these objectives. 2.31 The First Highway Project (Credit 187-MLI, US$7.7 million, June 1970) included the purchase of road maintenance equipment, spare parts for equipment overhaul, construction and expansion of workshops, betterment of feeder roads and pre-investment studies for the Bamako-Faladie-Bougouni (160 km) and Faladie-Segou (222 km) roads. The project also included tech- nical assistance to NDPW. This project was completed in March 1976. A Project Performance Audit Report (PPAR) issued in February 1978 concluded that institution building objectives were mostly achieved as NDPW was par- tially reorganized and the Road Fund was reactivated. Road maintenance, however, could not be fully implemented because of a shortage of local funds, due to the drought and inflation. The PPAR also pointed out that a low 3% economic rate of return for the betterment of feeder roads was mainly due to higher-than-estimated construction cost and reduced construction output (470 km instead of 1450 km). 2.32 The Second Highway Project (Credit 383-MLI, US$17.8 million as amended in June 1975 to cover the Association's share of increased road construction cost) included rehabilitation of the Bamako-Bougouni and Faladie- Segou roads, procurement of additional road maintenance equipment, extended technical assistance to NDPW, preinvestment studies for the Bamako-Kolokani road, and a trucking industry study. Construction of the main facilities for a training center (CPTP) was added to the project in 1975. The Bamako-Bougouni road was not reconstructed because bids were much higher than the available USAID co-financing. At the Government's request, USAID reduced its loan to US$3.25 million to finance the procurement of road maintenance equipment and spare parts. All other project items have been satisfactorily completed. 2.33 The ongoing Third Highway Project (Credit 599-MLI, US$10.0 million, January 1976) consists of improvement of about 1,000 km of feeder roads, periodic maintenance on about 950 km of paved roads, purchase of spare parts, equipment for workshops in two new subdivisions, office and teaching equipment for the training center, and the study of a country-wide transport plan. The project was amended in 1977 to include a new detailed engineering for the Bamako-Bougouni road which had further deteriorated since the 1972 engineering study, and a study on how to make PWES more efficient. It has been further modified in 1979 to provide technical assistance to PWES and additional spare parts, and training to CPTP's Malian instructors and monitors. Construction of feeder roads, being carried out at a lower cost than estimated at appraisal,  - 19 - is expected to yield a satisfactory rate of return. Because of late delivery of equipment for the force account brigade for bituminous roads and the increased road deterioration, only about 200 km of paved roads will receive periodic maintenance under the project. The remaining works will be continued under the proposed project. III. THE PROJECT A. Introduction 3.01 Over the past ten years, improving road maintenance has been one of the Association's goals in the road subsector. Under the First and Second Highway Projects the road maintenance organization was strengthened, but physical targets of road maintenance were only partly achieved due to the chronic lack of local funds worsened by inflation and, during the last five years, by the illiquidity of the Road Fund (para. 2.20). Originally, the proposed project was conceived as a four-ycar step in a long-term program to strengthen NDPW enabling it to carry out adequate and proper routine road maintenance, and to eliminate the periodic maintenance backlog on bituminous and gravel roads. A major feature of the project was the creation of a reliable means for financing recurrent costs of road mainte- nance. Achievement of this goal, however, was mainly dependent on the reform of PCS. 3.02 The present project was created by scaling down to an acceptable minimum the larger maintenance project when it became apparent that PCS reform was not immediately forthcoming. The decision to proceed and to provide special assistance by financing a share of recurrent costs was made because the already poor condition of the network was further deteriorating and some roads would have required complete rehabilitation if no action was taken shortly. In addition, the road maintenance equipment, mostly financed under previous IDA projects and whose replacement value was about US$20 million in 1978, would deteriorate to a non-repairable condition if the overhaul program started under the Third Highway Project was not completed. 3.03 The proposed project, which will last two and a half years (the minimum period which can yield tangible results), is conceived as an interim project aimed at ensuring that the results obtained by the institution- building efforts made under previous highway projects are not wasted. During this period, the Government will have sufficient time, in consultation with the Association and IMF, to implement a plan for the rehabilitation of PCS. 3.04 A main objective of the proposed project is to ensure that road main- tenance is carried out by securing, through a contribution to financing recur- rent costs, liquid funds for imported goods such as spare parts, the lack of which was a major cause of insufficient road maintenance. However, given the  - 20 - Government's budgetary constraints, the routine road maintenance program is reduced to the minimum admissible to ensure the serviceability of the road network. 3.05 Periodic maintenance is essential to ensure a normal life span for paved roads and to allow all-weather use of unpaved roads. An important part of the proposed project is therefore devoted to reducing a considerable backlog of periodic maintenance after which routine maintenance can be carried out effectively. This covers critical portions of the paved network and some important unpaved secondary roads. B. Project Description 3.06 To attain its objectives the proposed project includes: (a) a two and a half year (July 1981-December 1983) program of routine maintenance covering about 6,600 km of national, regional and feeder roads, including strengthening PWES and CPTP to consolidate efforts initiated under previous highway projects; (b) periodic maintenance on about 680 km of paved roads and 220 km of gravel roads by force account and contractor; (c) a program of vehicle axle-load control; and (d) assistance to ONT in setting up a transport data collection unit. 3.07 To implement the project, IDA and Switzerland will assist in financing the following items: (a) road maintenance and workshop equipment, spare parts, and minor improvements to PWES central workshop; (b) expansion of CPTP's facilities, purchase of training equipment, and travel expenditures for instructors; (c) operating costs for periodic maintenance by force account; (d) periodic maintenance by contractor; (e) recurrent costs of routine maintenance; (f) fellowships for PWES and road maintenance personnel; (g) mobile weighing scales; and (h) consulting services for: (i) technical assistance to PWES and ONT; (ii) auditing expenditures under (c), (e), and the Road Fund expenditures for road maintenance; and (iii) updating the engineer- ing and economic studies of the Bamako-Bougouni road (160 km).  - 21 - C. Routine Maintenance Program 3.08 The routine maintenance program will cover about 6,600 km of roads; all paved, unpaved, feeder roads and improved tracks are included in the program, but only 7% of seasonal tracks. To limit the recurrent expendi- tures, routine maintenance operations have been set at minimum standards compatible with the type of road and level of traffic. Spot regravelling and emergency repairs will be carried out where required to ensure road serviceability. Maintenance operations, such as grading, compacting, and anti-corrugation brushing, will mainly use mechanical equipment; spot maintenance, pot-holes filling, emergency repairs and shoulder and struc- ture clearing, will be by manual labor. The proposed project will provide hand tools and small 2-3 m3 trucks which can be handloaded without a long standing time. During negotiations the Government should agree on the network to be maintained and the strategy for routine road maintenance shown in the following table. Strategy for Routine Maintenance (Annual Output) Paved Unpaved Roads Improved Seasonal Road Type Older Newer Tracks and Tracks Roads Roads Feeder Roads less more more less 20 more less more less Average Vehicles than than than than to than than than than per Day 100 100 220 20 40 40 20 20 10 Length (km) 1/ 412 898 358 624 499 524 1758 879 616 Clearing shoulders & shaping ditches (km) 500 1200 600 500 700 800 500 Patching (% of surface) 2 3 1.5 Light maintenance (km/unit) 150 100 75 300 225 300 Dry grading (frequency) 1 2 2 1 1 0.5 Grading-compacting (frequency) 1 Emergency repairs (m3/km) 50 65 80 30 40 30 Brush dragging (frequency) 20 30 40 10 1! Full network except for seasonal tracks, of which only 7% is included.  - 22 - D. Strengthening PWES 3.09 Technical assistance to PWES has started in March 1980 under the Third Highway Project (para. 2.27) and will continue in this project to assist and train the new manager and help specialized personnel eliminate the backlog of equipment repair while retraining the staff. Additional project inputs will be (i) the purchase of spare parts to complete the overhaul of existing road maintenance equipment, (ii) the procurement of complementary workshop equipment and tools, (iii) minor improvements to PWES' central workshop, and (iv) fellowships for PWES personnel. The Government agreed at negotiations to send to the Association for approval (a) the detailed list of workshop equip- ment and tools and a description of the proposed improvement to the central workshop before preparing bidding documents, and (b) the name, background, and details of proposed fellowship for each candidate before sending its employee abroad. 3.10 Most road maintenance equipment purchased under the First and Second Highway Projects is usable but needs extensive repairs. Some equipment is at the end of its life or beyond economic repair and should be replaced. The pro- posed project provides for the purchase of additional equipment (Table 2), required for maintenance operations. During negotiations, agreement was reached with the Government on this list. E. Training 3.11 NDPW has enough personnel to carry out road maintenance. Most employees need additional training or updating in basic skills (para. 2.12) for which only rather short retraining cycles are required. Assuming a turnover and drop-out rate of about 20%, it is estimated that about 800 employees need to be trained or retrained by Malian instructors. It is expected that about 600 of these employees will be trained under the proposed project. 3.12 The training program already started in 1980, though on a reduced scale, will be carried out between 1981-83 at CPTP in Bamako, the subdivisions and PWES. Courses will last from three months for unit and sector chiefs to two weeks for accountants. Theoretical courses will be held at CPTP in Bamako for chiefs of subdivisions and workshops, chief mechanics, etc. Courses for skilled personel at lower levels, i.e. operators, mechanics, time-keepers, etc., will be carried out in each subdivision using the subdivisions own equipment so that on-the-job training can be done while solving day-to-day problems. This approach avoids a relatively large investment in training equipment and keeps several hundred persons at their regular working place. Mechanics and other specialized personnel of the central workshop will be trained on the job at PWES. 3.13 Five Malian instructors and six monitors will carry out the training program at CPTP and in the field. In December 1979 they were all assigned to CPTP. Since they will need training before undertaking their tasks, the Government requested, and the Association approved, an extension of technical assistance to CPTP under the Third Highway Project for this purpose (para. 2.33).  - 23 - 3.14 The Government has prepared the following documents: (i) a preliminary training program for road maintenance personnel; (ii) the categories and number of staff to be trained during 1981-83; (iii) a proposal for the training program at CPTP and in the subdivisions; and (iv) a provisional list of personnel proposed for fellowship. 3.15 To implement the training program, and then to continue as a permanent training center, CPTP will need more space and additional equip- ment. The proposed project includes construction of living quarters for trainees and the expansion of technical facilities, procurement of furni- ture, workshop and field equipment, and vehicles for itinerant training staff (Table 3). The Government agreed at negotiations to send to the Association for its approval, before their construction or purchase, a description of the proposed facilities, a list of furniture, workshop and field equipment, and vehicles. The proposed project will also provide travel expenditures for Malian instructors and monitors--displacement allowance and vehicle operating costs. This allowance will help the training at the subdivisions since a major drawback in the past was the lack of incentive for leaving the place of regular employment. In addition, the project includes fellowships abroad for key personnel of road maintenance to complete their training. The Government agreed at negotiations that it will send to the Associations for approval, the name, background and details of proposed fellowship for each candidate before sending its personnel abroad. F. Periodic Maintenance 3.16 The program of periodic maintenance will (i) restore road surfaces to make routine maintenance effective, thus reducing vehicle operating costs, and (ii) postpone pavement failure on paved roads. The works will be carried out by existing force account brigades and contractors to allow completion of the program within the project period. 3.17 Under the ongoing Third Highway Project about 200 km of bituminous roads are receiving periodic maintenance. The proposed project includes an additional 680 km which badly need periodic maintenance. These roads were defined at negotiations out of about 1,150 km which still need maintenance to eliminate the accumulated backlog (Table 4). In addition to about 30,000 m2 of simple patching, RSS-s bituminous road brigade is expected to perform the following work: about 95 km of seal coat, 115 km of single surface treatment, and 5 km of double surface treatment. The remaining work--about 62,000 m2 of patching, 180 km of seal coat, 75 km of single- and 5 km of double surface treatment--will be executed by contractor. Regravelling of shoulders, estimated at about 80,000 m3 of gravel in place, will be carried out by the bituminous brigade with some assistance from the subdivisions. 3.18 Only a small amount of equipment will be procured for the bitumi- nous road brigade under the proposed project (Table 2). It has been esti- mated that the brigade will be able to execute 400 m2 per day of patching over 180 days per year, 3,000 m2 per day of seal coat and 1,300 m2 per day of single-surface or 800 m2 per day of double-surface treatment over  - 24 - 160 days per year. Since it is critical that the deferred periodic ma