Uganda - Third Highway Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE CP Report No. P-3729-UG REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 56.1 MILLION TO THE REPUBLIC OF UGANDA FOR A THIRD HIGHWAY PROJECT February 22, 1984 [ 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 (as of December 31, 1983) Currency Unit Uganda Shillings (USh) US$ 1.00 5 USh 240 (First Window) US$ 1.00 USh 297.6 (Second Window) USh 1.00 = US$ 0.0042 (First Window) USh 1.00 US$ 0.0034 (Second Window) From October 1975 to May 1981, the Ugandan shilling was tied to the Special Drawing Right (SDR) of the IMF (SDR 1.00 = USh 9.66). However, the Ugandan shilling was devalued by 90% in June 1981 and has subsequently been float- ing in relation to a basket of currencies. Since August 1982, the Bank of Uganda has operated a dual exchange rate system, including a second window at which foreign exchange is traded wmre freely. The first and second window exchange rates are expected to approach each other and merge in the near future; therefore, an exchange rate of USh 250 to the US dollar has been used for cost and benefit estimates in the Staff Appraisal Report. FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS EAC = East African Community ICB = International Competitive Bidding MOT = Ministry of Transport MOW = Ministry of Works MPED = Ministry of Planning and Economic Development PTC People's Transport Company RMTC = Road Maintenance Training Center URC = Uganda Railway Corporation UTC = Uganda Transport Company UTCU = Uganda Transport Cooperative Union  FOR OFFICIAL USE ONLY UGANDA THIRD HIGHWAY PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Uganda Amount: SDR 56.1 million (US$58.0 million) equivalent Terms: Standard Project The proposed project is designed to help improve the main- Objectives and tenance of Uganda's rapidly deteriorating classified road Description: network, train the Ministry of Work's (MOW's) road main- tenance personnel, re-establish MOW's capability for road maintenance, develop local construction industry, improve the country's transport sector management, and improve and enforce vehicle weight and traffic safety regulations. The project would comprise programs, to be implemented over a four-year period [1984-87, including one year (1984) of tendering and mobilization], for resealing and regraveling of about 600 km of bitumen-surfaced and about 1,000 km of gravel roads, and for routine maintenance of the country's 7,540 km classified road network. Technical assistance to MOW and to the Ministry of Transport (MOT), a pilot program for the development of the local construction industry, and preparation work for a future road maintenance program would also be included in the proposed project. Risks: The project has been designed so as to reduce implementa- tion risks as much as possible. The remaining main risk is the still unsettled political and security situation in the country. Under prevailing conditions, the project as designed is feasible. A deterioration, however, could have adverse effects on project implementation, both in terms of cost and completion, and in a severe case may even require some revision of the project scope. Other risks, such as MOW's lack of familiarity with Bank Group procurement procedures, poor staff morale in MOW due to low salaries, and possible shortages of local funds to carry out the project, are being minimized as far as possible by using contractors for all resealing and regraveling work, and by intensive implementation supervision particularly during the first years of project execution, including continuous checks on budget allocations. 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 - Estimated Local Foreign Total Costs: (US$ million)- Resealing and Regraveling of Roads 10.0 20.9 30.9 Equipment, Spare Parts and Tools 1.2 11.1 12.3 Fuel and Bitumen 3.9 8.1 12.0 Road Maintenance Training Center and Workshop Improvement 1.1 0.4 1.5 Consultant Services 0.7 3.0 3.7 Pilot Program for Development of Local Construction Industry 0.4 1.6 2.0 Base Cost 17.3 45.1 62.4 Physical Contingencies 1.7 4.3 6.0 Price Contingencies 4.0 8.6 12.6 Total Project Cost 23.0a/ 58.0 81.Oa/ a/ Including US$7.0 million equivalent of taxes and duties. Financing Local Foreign Total Plan: (US$ million)