Niger - Transport Sector Project

Document of The World Bank FOR OFFICIAL USE ONLY f -7 Report No. 5980-NIR STAFF APPRAISAL REPORT REPUBLIC OF NIGER TRANSPORT SECTOR PROJECT May 7, 1986 Western Africa Projects Department Transportation Division II This document has a restricted distribution and may be used by recipients on!y in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 360 WEIGHTS AND MEASURES Unless otherwise stated, all weights and measures in this report are in International System (SI) units. 1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 miles 1 kilogramme (kg) = 2.205 pounds 1 ton (t) = 2,205 pounds FISCAL YEAR October 1 - September 30 ABBREVIATIONS AND ACRONYMS AfDF - African Development Fund ABEDA - Arab Bank for Economic Development in Africa BCEAO - Banque Centrale des Etats de l'Afrique de l'Ouest BGR - Bureau de Gestion Routiere (Road Management Unit) CCCE - Caisse Centrale de Cooperation Economique . CFA - Communaute Financiere Africaine (African Financial Community) CILSS - Comite Inter-Etat de Lutte contre la Secheresse au Sahel CIDA - Canadian International Development Agency DTT - Direction des Transports Terrestres (Department of Land Transport) DMTP - Direction du Materiel des Travaux Publics (Department of Equipment) DTP - Direction des Travaux Publics (Department of Public Works) EDF - European Development Fund ERR - Economic Rate bf Return HDM - Highway Design and Maintenance (Model) IDB - Islamic Development Bank MTPH - Ministere des Travaux Publics et de l'Habitat (Ministry of Public Works and Housing) OPEC - Organization of Petroleum Exporting Countries SAF - Special African Facility SAL - Structural Adjustment Lending SJF - Special Joint Financing SNT - Syndicat National des Transporteurs SNTN - Societe Nationale des Transports Nigeriens (Nigerien National Transport Company) UNSO - United Nations Sudano-Sahelian Organization USAID - United States Agency for International Development v.p.d. - vehicles per day  FM emVCIA U. ONLY REPUBLIC OF NIGER TRANSPORT SECTOR PROJECT STAFF APPRAISAL REPORT TABLE OF CONT DTS Page No. DOCUMENTS IN PROJECT FILE ...............*c iii CREDIT AND PROJECT SUMMARY ...................................... ix I. INTRODUCTION ............................................. 1 A. Background ........................................... 1 B. The Economy . ..................................***... 1 C. Structural Adjustment ................................. . 2 II. THE TRANSPORT SECTOR ...... ............................... 3 A. General ......... .... 3 B. Road Network Development and Traffic Patterns ........ 5 C. The Road Transport Industry . .............. ..... 8 D. Public Expenditures and Subsector Financing ........... 10 E. Road Policy Formulation and Planning .............V.... 12 F. Organization, Staffing and Training ........ .......... 13 G. User Charges and Cost Recovery .....................a 14 H. Experience with Past Lending ......................... 15 III. THE ROAD PROGRAM AND THE PROJECT ......................... 17 A. Rationale ........ .......................... ....... .. 17 B. Project Components .................... .... .. ......... 17 C. Costs . .................................................. 24 D. Financing ............................................. 25 This report was prepared by Ms. C. Cook (Transport Economist), Messrs. R. LeBussy (Mechanical Engineer) and P. Long (Senior Highway Engineer) on the basis of an Appraisal Mission in May 1985. Secretarial work was done by Mmes. Marie-Noelle Griest, Kathy Waters-Reed and Monica Sullivan. Thi document ha a rstricted distribution and may be used by recpients only in the pefannmnce of their official duties Its contents may not otherwise be disclosed without Wodd Bonk authoflt_o.  - ii - Table of Contents (continued) Page No. E. Procurement .. ........................................ 27 F. Disbursements and Revolving Funds ..... ............... 29 G. Consultation and Reporting . ........................... 31 H. Accounts and Audit ................................... 31 I. Economic Evaluation .................................. 31 J. Financial Evaluation ................................. 33 K. Risk Assessment ..... ................................. 33 IV. AGREEMENTS REHCHED AND RECOMMENDATIONS .... ............... 35 ANNEXES 2-1 The Priority Road Network .37 2-2 Traffic Count Results .40 2-3 New Vehicle Registration Statistics .44 2-4 Fuel Consumption Trends .45 2-5 Road User Charges ............ .. ............. . .......... 46 2-6 Organization of Ministry of Public Works & Housing .50 2-i Organization of Department of Public Works .51 2-8 Organization of Equipment Department .52 2-9 Training Program .... 53 2-10 Past IDA Involvement in the Sector ....................... 57 3-1 Sectoral Strategy Statement .61 3-2 Four-Year Program - Composition and Expenditures .62 3-3 List of Road Selected for Periodic Maintenance .68 3-4 List of Secondary and Rural Roads Selected for Construction .70 3-5 Road Maintenance and Workshop Equipment .72 3-6 Technical Assistance Component .73 3-7 Four-Year Program (1985/86-1988/89) - Financing Plan 75 3-8 Disbursement Schedule .76 3-9 HDM Application .......................................... 77 3-10 Rural Road Evaluation .................................... 89 HAP IBRD No. 19198 - Transport Sector Project WAPT2 April 1986  - iii - REPUBLIC OF NIGER TRANSPORT SECTOR PROJECT DOCUMENTS IN PROJECT FILE WAIC No. Item Date Author Doc. No. 1. Esquisse pour le 5eme Projet Mar. 85 MTPH 223.120 2. Esquisse pour les routes rurales Apr. 85 MTPH 223.121 3. Programme d'entretien routier May 85 MTPH 223.123 4. Programme d'ajustement stracturel - Apr. 85 NTPH 224.194 Secteur batiment, travaux publics et transports 5. Plan de transport - marche (Cr. 886) 128.039 6. Analyse de l'impact socio-economique des Jan. 84 BCEON 220.097 routes terminees (Rural Roads)(Cr. 886) (A-D) 7. Transaharan Road Project Description Apr. 78 L. Berger 123.542 (Cr. 1394) 121.536P 8. Arrete No. 043/MF portant rigfIne fiscal Jan. 85 Govt. 223.933 des aides exterieures (Cr. 1394) 9. Decret No. 67-071/MTO/MF fixant les regles June 67 Govt. 227.032 de fonctionnement du Fonds Special d'Etudes et de Contr6le (Cr. 1394) 10. Loi No. 671017 portant cr6ation d'un Fonds Mar. 67 Govt. 227.132 Sp6cial d'Etudes et de Contr6le (Cr. 1394) 11. Paiement des indemnites de personnel - Govt. 227.031 des Offices et Etablissements Publics (Cr. 1493) 12. Mesures d'Uni a l'APL25 (Cr.1394) May 85 BGR 223.125 (1-2) 13. Etude de 1'Uni du reseau nigerien, - Ducros 223.935 Rapport No. 1 - Exploitation des mesures relevees (Cr. 1394) 14. Plan de transports. Termes de reference Dec. 84 Govt. 221.776 (Cr. 1394)  - iv - WAIC No. Item Date Author Doc. No. 15. Etude sur lea routes revetues. crit4res de -- ISTED 223.122 comporteuent du rtseau re4etu d'enduits superficiels (Cr. 1394) 16. Route Zinder-Agadez. Etude de factibilite Apr. 82 BCEOM 222.327 (Cr. 1394) 17. Actualisation de l'etude 6conomique de la July 85 BCEOM 225.224 route Agadez-Zinder (Cr. 1394) 18. Etude diagnostique du Parc Materiel des Sept. 85 BCEOM 227.372 Travaux Publics (Cr. 1394) 19. Route Niamey-Say. Dossier d'appel d'offres June 82 Sahel 128.181 (Cr. 1394) Consult (A-D) 20. Route RNIW. Travaux de retablissement Aug. 85 DTP 227.369 au PK88.037. Dossier d'appel d'offres (Cr. 1394) 21. Route Niamey Say, construction du dalot Aug. 85 DTP 227.370 au PK52.051. Dossier d'appel d'offres (Cr. 1394) 22. Projet de decret: Reclassement des routes -- 85 DTP 223.119 nationales 23. Diagnostic d'Air Niger (Cr. 1493) Oct. 83 IDET-CEGOS 223.499 (6) 24. Projet de creation d'un centre de formation CFPTP 129.735 et de perfectionnement des travaux publics (Cr. 1394) 25. Esquisse du 5eme Projet: Annexe A Routes Rurales Jan. 85 DTP 228.148 26. Esquisse du 5eme Projet: Annexe B Kilometrage du Reseau et co6t de Jan. 85 DTP 227.955 1'entretien 27. Esquisse du 5eme Projet: Annexe C Situation du Parc et besoin en mat6riel Jan. 85 DTP 227.956 28. Investissements routiers: Impact sur la dette Jan. 85 DTP 227.960 29. Potentialite de financement de l'entretien Jan. 85 DTP 227.961 30. HDM run printout Dec. 85 IDA 228.149 31. The HDM model, Vol. 14, 1985 Aug. 85 TRP none World Bank 32. Analvses visuelles Oct. 85 BGR/DTP 227.957  WAIC No. Item Date Author Doc. No. 33. Traffic Counts, 1st campaign 1985 Oct. 85 BGR/DTP 227.958 34. Traffic Counts, 2nd campaign 1985 Dec. 85 BGR/DTP 227.959 35. Working Paper on Public Works Equipment Aug. 85 Le Bussy 228.150 Department 36. Budget 86. Situation Actuelle Aug. 85 DTP 228.151 37. Budget 86. Recurrent Budget; Aug. 85 DTP YBR 86 (Cr. 1394) 38. Budget 85. BAEMPT; Aug. 84 DTP YBR 85 (Cr. 1394) 39. Projet de construction des routes rurales May 85 DTP 223-124 par des unites a haute intensite de main-d'oeuvre 40. Programme d'urgence pour l'entretien routier Sept. 85 DTP 228.152 41. Proposition pour l'Informatisation du Sept. 85 DTP 228.153 Ministere des Travaux Publics et de l'Urbanisme 42. Entretien periodique Feb. 85 DTP 228.154 43. Planification de l'entretien routier 1985 Aug. 84 DTP 228.155 44. Project Expenditures, CR. 1394-NIG June 85 DTP YBR 1985-1988 45. Document Programme, 1985-88 Sept. 85 DTP 227.963 46. Projet de texte regissant le CFPTP Aug. 85 DTP 228.127 47. Programme de Stages, 1986 Aug. 85 DTP 227.964 48. Programme de formation, 1986 Aug. 85 DTP 227.965 49. Arrete No. 10/MTP/U portant attribution Aug. 85 Govt. 227.966 et organisation de la DTP 50. Plan de Transport (8 vols.' 1978 BCEOM Niger 800 51. Costab run Nov. 85 IDA 228.157 52. Dossier d'Appal d'Offres 85/26 pour Dec. 20/85 227.447 de materiel destine au Centre de Formation et de Perfectionnement des Travaux Publics du Niger.  - vi - WAIC No. Item Date Author Doc. No. 53. Details of pavement condition and proposed Mar. 86 DTP/BGR 228.986 works, by road section, for periodic maintenance 54. Proposed Periodic Maintenance Program Mar. 86 DTP/BGR 228.987 (Paved Roads) 55. Economic rates of return for periodic Mar. 86 DTP/BGR 228.988 maintenance program (Paved Roads) 56. Entretien periodique, RN27 Niamey-Say. Sept. 85 DTP 228.989 Rapport d'Activite No. 1 57. Entretien periodique, RN27 Niamey-Say, Jan. 86 DTP 228.990 RN4 Bac Farie-Tera 58. Pont de Gaya-Malanville, Estimation Oct. 85 BCEOM/DTP 228.991 Confidentielle 59. Previsions des debourses (Canadian Jul. 85 CIDA 228.992 Projects) 60. Planning Financier Takieta-Zinder-Bakin Jan. 86 Beller-Golsen 228.993 Birji Consult 61. Budget for UNSO roads Dec. 85 UNDP 228.994 62. Reflexions sur l'avenir du BGR Feb. 86 BCEOM 228.995 63. Classification qualitative des routes Feb. 86 BGR 228.996 bitumees (Note) 64. Rapport de presentation, Proposition de Feb. 86 DMTP 228.997 renouvellement de materiel 65. Entretien per'odique des routes bitumees Feb. 86 BGR 228.998 quantites de travaux d'apras l'analyse visuelle de 1985 66. Liste definitive pour le 2eme programme Feb. 86 DRR 228.999 des routes rurales 67. Proposition pour la 1lre campagne des Feb. 86 Comite 229.000 routes rurales Inter- ministeriel 68. Routes secondaires au Niger, Dossier de Jun. 83 UNSO n.a. presentation 69. Transports Publics urbains, Niamey, Phase II Nov. 85 BCEOM n.a.  - vii - WAIC No. Item Date Author Doc. No. 70. DeuxiZrme programme des routes rurales au Jan. 86 BCEOM n.a. Niger, Evaluation economique 71. List of National Roads Sections Oct. 85 DTP/BGR 229.001 72. Economic Analysis of Paved Roads Proposed Mar. 86 DTP/BGR 220.002 for Periodic Maintenance 73. Program for Computing Life Cycle Costs and Feb. 86 W. Paterson 229.003 Economic Indicators by Project for BGR: Flow Chart Outline 74. Echeancier des depenses previsionelles Mar. 86 DTP/DET 229.004 WAPT2 April 1986  NIGER TRANSPORT SECTOR PROJECT CREDIT AND PROJECT SUnMARY Borrower: Republic of Niger. Beneficiary: Ministry of Public Works and Housing. IDA Credit Amount: SDR 13 million (US$15 million equivalent). Special African Facility Amount: SDR 13 million (US$15 million equivalent). Terms: Standard IDA terms. Project Description: The main objective of the project is to assist the Government in implementing its transport sector stra- tegy which was developed as part of its Structural Adjustment Program. This strategy aims at the fol- loving objectives: (a) redirecting public expendi- tures to highest priority activities; (b) increasing user cost recovery; and (c) consolidating the insti- tution building initiated under previous IDA proj- ects. To achieve these objectives, the project will sup- port: (a) Policy actions by the Government including: (i) adoption of a detailed four-year expend- iture program for the sector, including both investment and recurrent costs; (ii) adoption of economic selection criteria for new subprojects to be implemented through this program; (iii) annual implementation reviews and adop- tion of agreed annual work programs; (iv) annual revision of equipment rental rates; and (v) implementation of an agreed action plan to improve cost recovery; (b) Financing of priority civil works on the highway network consisting of:  x (i) annual resurfacing and strengthening pro- grams on paved roads; (ii) annual regravelling programs on unpaved roads; (iii) rural and secondary road construction; (iv) construction of major high priority roads and bridges; (v) routine maintenance of the whole network; and (vi) consultant services for the preparation of pre-investment studies, detailed engi- neering, and supervision of items (i), (iii), and (iv) above; Cc) Procurement of road maintenance equipment, work- shop equipment and workshop rehabilitation; and (d) Institutional development, including technical assistance, support for operating costs, and studies. Rate of Return: With the exception of ongoing activities, no construc- tion or rehabilitation projects would be included in the program unless they can be shown to have rates of return exceeding those calculated for periodic mainte- nance, which range from 14% to 130%. Secondary and rural road construction would be limited to roads with rates of return not less than 10%. Project Benefits: Policy changes to be implemented under the project would improve revenue performance and resource allo- cation; in particular, they would bring allocations for road maintenance into line with future needs. The institution building component would enhance the capacity of the Ministry of Public Works in road man- agement, equipment management, and staff development. The project's economic benefits are principally de- rived from a reduction in vehicle operating costs on the present road network. Additional, non-quantified benefits would be derived from the project's contri- bution to road safety and reduction in travel time. Timely replacement of the Gaya Bridge over the Niger river would assure the country's continued access to its principal external supply route from the coast. Secondary and rural road improvements would encourage additional agricultural activity by providing trans- port links between food producing and consuming  - xi - areas. A pilot program in labor-based construction would also strengthen community self-help capacity. Project Risks: The main risk is that the Government may not be able to provide sufficient local funds for routine road maintenance or for counterpart funding for foreign- financed investments. Specific cost recovery meas- ures to minimize this risk have been included in the project as well as in the Structural Adjustment Pro- gram. Other risks include inadequate revenues from equipment rental, and failure to implement the pro- posed action plan to raise road user charge revenues. Particular attention, however, would be paid to these aspects during project supervision. Planned Investments and Recurrent Expenditures (1985/86 - 1988/89) Million USS Local Foreign Total Construction: Primary Roads 12.7 38.1 50.8 Secondary Roads 3.6 10.8 14.4 Rural Roads 2.9 8.9 11.8 Rehabilitation and Periodic Maintenance 16.2 48.7 64.9 Equipment and Workshops 0.8 7.1 7.9 Consulting Services 1.8 3.5 5.3 Investment Sub-Total 38.0 117.1 155.1 Routine Maintenance 7.3 13.8 21.1 Program Sub-Total 45.3 130.9 176.2 Price Contingencies 9.4 27.3 36.7 Total Program Expenditures 54.7 158.2 212.9 == =_ ==  - xii - Suimary Financing Plan US$ million Government 27.6 IDA/SAF Transport Sector 30.0 Special Joint Financing (Japan) 20.0 IDA Feeder Roads 1.7 IDA Fourth Highway 3.0 Confirmed Finsincirg EDF 39.4 AfDF 16.8 IDB, Saudi Fund, ABEDA, OPEC Fund 24.2 CIDA 19.6 CCCE 7.8 UNSO/Norway/Italy 11.4 UNDP 0.5 Financing to be identified: 10.9 212.9 Estimated Disbursements (US$ million equivalent) FY1987 FY1988 FY1989 FY1990 FY1991 FY1992 FY1993 IDA Credit Annual 0 0 0 0.5 8.0 5.0 1.5 Cumulative 0 0 0 0.5 8.5 13.5 15.0 SAF Credit Annual 3.0 10.0 2.0 -- -- - - Cumulative 3.0 13.0 15.0 - -- - Staff Appraisal Report No.: 5980-NIR Maps: IBRD 19198 - Transport Sector Project WAPT2 April 1986  NIGER TRANSPORT SECTOR PROJECT STAFF APPRAISAL REPORT I. INTRODUCTION A. Background 1.01 Niger is a landlocked country in sub-Saharan Africa, located in the Saharan and Sahelian climatic zones. It is a large country (1.3 mil- lion km2) with a small, relatively mobile, and rapidly growing population estimated at 6.5 million in 1985. Most of the population lives in the southern part of the country where rainfall is normally sufficient to sup- port agriculture. Rainfall is limited (150-750 mm) and often irregular even in tie agricultural zone, and soil fertility is low and declining due to intensive use. Per capita GNP was estimated at US$190 in 1984. Niger's social indicators are among the lowest in the world. Life expectancy at birth, which is only 43 years, is low even by African standards. In 1984, the adult literacy rate was only 14% (8% for women), and the primary enrollment ratio not more than 25%, the lowest in Africa. B. The Economy 1.02 Like other Sahelian economies, Niger's is dominated by subsist- ence agriculture, with millet and sorghum accounting for 80% of the culti- *.ated area. Livestock is also an important source of income for a large segment of the population and is one of the country's major export commo- dities. Despite its meager agricultural resource base, Niger has tradi- tionally been self-sufficient in food production except during the Sahelian drought in the early 1970s and again in recent years. The discovery of large uranium deposits in the late sixties and their development propelled the mining sector into an important position in Niger's economy. The sector is now the country's principal foreign exchange earner and an important source of Government revenues. 1.03 Niger belongs to the West African Monetary Union which provides its members with a common currency (the CFA franc) fully convertible into French francs. The full convertibility of the CFA franc and the liberal foreign trade policies pursued by the Monetary Union members have kept the Nigerien economy very open in the past. In addition, participation in the Union has helped Niger to maintain discipline over monetary and fiscal policies. Its position has been further strengthened by the strong trade links that have always existed between Niger and its southern neighbors, particularly Nigeria. 1.04 Since 1980 however, a decline in world prices for uranium, com- bined with recurring drought conditions, has created a situation of  - 2 - economic crisis. Revenues from uranium production have fallen drastically just as Niger is beginning to face the recurrent cost consequences of ear- lier investment programs. Agricultural production has also declined. forc- ing Niger to supplement its domestic food supply with increasing quantities of grain imports. Production in the livestock sector, an important source of export earnings, has also been seriously affected by the drought. Niger's financial position is further complicated by a large external debt, nearly half of which was contracted on commercial terms. 1.05 In 1982/83 the Government of Niger instituted an austerity pro- gram to meet the financial crisis. Demand management measures were insti- tuted in the 1982/83 budget including a freeze in wages and salaries, cut- backs in supplies and investment expenditures, and tighter control on foreign borrowings. The Government's stabilization program was subsequent- ly supported by three IMF Standby Credits, the last of which was negotiated in August 1985. 1.06 The Government's initial efforts have effected a significant re- duction in the deficit through cutting back sharply on investment expendi- tures and limiting the growth of recurrent expenditures. However, due mainly to continuing drought conditions, real Gross Domestic Product (GDP) fell sharply in 1984. Poor harvests are estimated to have resulted in a record cereal deficit of about 500,000 tons for the crop year 1984/85. In comparison, the total magnitude of Niger's international trade was only about 350,000 tons per year before the drought. The outlook for 1985-86 is somewhat better. GDP is projected to recover some of its earlier decline and to grow by about 6%, due mainly to a strong recovery of the rural sec- tor following recent abundant rainfall. C. Structural Adjustment 1.07 Continued austerity will severely constrain Niger's development in the coming years unless accompanied by policy measures that will allow the country to restore and maintain at least a minimum level of growth in the medium term. The Government requested the assistance of the World Bank to formulate a program of structural adjustment. Intensive preparation work was undertaken by the Government, involving high level staff from all sectors. The resulting set of policy reforms and planned public expenditures formed the basis for a structural adjustment program, which was appraised in September 1985 and for which IDA and SAF credits were negotiated in December 1985 (PR No. 1485-NIR). 1.08 The first phase of the structural adjustment program focuses on policy reforms in areas in which inefficiencies are most acute and where policy improvements would have the greatest beneficial impact on the coun- try's budgetary and balance of payments position: (a) public resource ma- nagement; (b) the parastatal sector; and (c) agricultural policy. The principal reform measure so far has been the preparation by the Government of a three-year budget program (1985/86-1987/88) which reflects policy im- provements in four important areas: (a) restructured recurrent expendi- tures; (b) a rolling investment planning process; (c) expanded domestic resource mobilization; and (d) improved external debt management. The  - 3 - Government has also adopted sectoral strategy statements as a basis for making future investment decisions within each sector. 1.09 The policy reforms, public investment and recurrent expenditure progr.ms which will be undertaken under the structural adjustment program are the result of an intensive dialogue within the Government over national development objectives and priorities, as well as discussions between the Government, the Bank and the IMF concerning the most efficient means of achieving those objectives. Difficult choices have had to be made, and a high degree of continued commitment will be required to carry them out in a country with an increasingly fragile ecological base and a rapidly growing population. 1.10 While structural adjustment is essential in Niger to permit the economy to realize its productive potential, it is, in itself, not a suffi- cient condition to achieve sustainable long-term growth. A concerted de- velopment effort is required to reduce the country's severe resource con- straints and to expand the productive base of the economy. Primarily, this will involve further development of the agricultural sector and, to a less- er extent, of the energy and mining sectors. It will also require the ac- celerated development of Niger's human resources in combination with an active program to slow population growth. Consequently, investment in the transport sector is expected to represent a smaller share of the total public investment program in the future. II. THE TRANSPORT SECTOR A. General 2.01 Adequate transportation is critical to Niger's current economy as well as to its future development. Niger is a landlocked country whose closest access to the sea is 600 km from its southern border. Internally, there are vast stretches of nearly empty land between major population centers, particularly those to the north. High transportation costs, among other things, constrain the competitiveness of Niger's products on the world market and limit its capacity to develop its resources using techno- logies based on imported equipment and raw materials. They also add to the costs of delivering services to far-flung urban centers and to a sparse and scattered rural population. 2.02 Niger's transport infrastructure consists of about 18,500 km of roads and tracks, five domestic airports, and the Niger River which is used only for small amounts of local traffic. Roads are the most important mode of transport and have absorbed a significant share of public investment since the country's independence. Roads account for 99% of planned govern- ment expenditures in the transport sector during the next three years. Government's planned investments in air transport are limited to improving navigation and safety. The country has no railway or ports. Plans to de- velop river transport have been indefinitely postponed. 2.03 Niger's access to the sea follows three main routes, large parts of which lie outside the country's direct control:  (a) the Nigeria route (about 1,450 km from Zinder to the sea) which connects the central and eastern regions of Niger by road to Kano and thence by rail or road to the ports of Lagos or Port Harcourt; (b) the Benin route (about 1,100 km from Niamey, Niger's ca- pital, to the sea) which connects Gaya by road to Parakou, and thence by road or rail to Cotonou; and (c) the Togo route (about 1,350 km from Niamey to the sea) which connects Niamey by road through Burkina Faso to the port of Lome in Togo. The Benin route is generally preferred for bulk cargo, but the Togo route provides an acceptable alternative for high value equipment and consumer goods. The Nigeria route has declined in importance as a link to the coast, but trade flows between Niger and northern Nigeria continue to gen- erate substantial traffic despite the official border closing in 1985. All three of the main routes are currently being used to deliver emergency food aid to Niger. Theoretically, there are two other routes which could pro- vide access to the sea. One connects Niamey by road to Ouagadougou in Burkina Faso and thence by road or rail to the port of Abidjan. Ivory Coast (about 1,715 km). The other links Agadez to the north through Tamanrasset and Ghardaia in Algeria to the port of Algiers (2,900 km). Due to the greater distances and consequently higher transport costs, these routes are little used at the present time. 2.04 Through an extensive program of transport sector investment which has been supported by the Bank through a series of credits, the Government has substantially fulfilled its initial objectives of creating a road net- work that would link the couatry's main centers of production and consump- tion, and setting up a road management and maintenance system. As part of its financial stabilization progran in recent years (see para. 1.05), the Government revised its sectoral objectives to: (a) complete ongoing opera- tions; (b) conserve existing infrastructure; and (c) integrate isolated areas into the economy. Under the Government's structural adjustment program, these objectives remain substantially the same, but with an even greater emphasis on the preservation of the existing network. 2.05 Basic policies are formulated and decisions on transport invest- ment are made in principle by the kMinistry of Planning, which also coordi- nates the necessary external financing. These proposals are subject to the approval of the National Council for Development. ULntil recently, all planning for transport development took place within the then Ministry of Public Works, Transport and Urban Development, which controlled the Depart- ment of Public Works (DTP), the Department of Land Transport (DTT), and the Department of Civil Aviation. In 1983, however, the DTT was transferred to the Ministry of Commerce, which became the Ministry of Commerce and Trans- port. Although legally responsible for transport sector planning, DTT has been chronically short of staff and resources and has barely been able to fulfill its routine responsibilities. Under the Fourth Highway Project, the Bank has supported the development of capacity for the planning, management and maintenance of the road network within DTP (see para. 2.31).  2.06 A National Transport Plan was prepared in 1977/78 and formed the basis for the identification of priority projects in subsequent years. The need for updating this Plan was identified under the Fourth Highway Proj- ect. Terms of Reference for this study, which will be financed under the Bank's Technical Assistance Project (Credit 1493, July 1984), have been agreed with the Bank and the consultant has been selected. The study is expected to start in April 1986 and will be completed by March 1987. 2.07 Present transport capacity appears to be adequate to meet normal needs for passenger and freight traffic. However, the vehicle fleet is aging and the current balance of payments situation is making it difficult for vehicle owners to obtain credit with which to repair or replace them. In addition, the recent extraordinary transport demand arising out of the need to distribute imported food is placing a severe strain on current capacity. This demand, which may be a temporary phenomenon, helps to account for the persistence of high traffic growth rates in spite of stagnating agricultural activity. 2.08 For the present, public expenditures in the transport sector should give priority to routine and periodic maintenance of the existing road network, followed by repair or rehabilitation of critical sections and structures on primary roads. the rehabilitation of secondary roads serving populated areas, and the construction of feeder roads in connection with well defined agricultural projects. B. Road Network Development and Traffic Patterns Road Network 2.09 Niger's classified road network, defined in 1968/69, consists of 6,758 km of national roads. There are, in addition, some 12,000 km of unclassified roads and tracks. Since 1969, the main road network has been continuously expanded and upgraded. In 1984 the road network for which DTP is responsible stood at 9,637 km. Operation and maintenance of the 697 km Tahoua-Arlit road has been contracted out to a subsidiary of the uranium mining consortium. The following graph shows the evolution of the network since 1968. More details are given in Annex 2-1.  - 6 - Niger - Evolution of the Road Network (in km) 10000 9000 8000 Total Network -. 7000_ 6000_ 5000_ 4000 3000 I.- 2000. 1000 .- 0 ~_ *,, . * - *Paved Roads I I T an I 1 r- 1 1 % a1 d 1 i 1 ao r~~~~~~~~~0 0-e e~ ('1 bXa - Mu un an so O %D %DC Nof rb 1- r- r - rh r- f-X 0, X~ X X a 0% 0% 0%o 0 0%0%0% 0% Co% cr% 0% 0't 00% 0% 0% 0% c a - -_ - _ -_ _ -- _ _ .4-- _ - _ _ -_ _ - Presently, DTP directly maintains a "priority network" of about 7,000 km, including 2,609 km of paved roads, 3.760 km of gravel roads, and approxi- mately 600 km of improved rural roads. Priority Road Network (in km) Bituminized Unpaved Rural Roads Total Classified 2,579 a/ 2,310 b/ -- 4.889 Unclassified 30 1,450 600 2,080 Total 2.602 3 760 600 6X969 a/ Includes Zinder-Tanout, 140 km, under construction. bl Includes Tanout-Agadez, 290 km. Does not include classified, unmaintained tracks. 2.10 The network is concentrated in the south where the majority of the population and most of the economic activity are found. The nearly uninhabited areas of the north are only sparsely served (Map IBRD 19198). Niger's terrain is mostly flat or undulating and, apart from the River  Niger, normally presents no major physical barrier to land transport. Rainfall, though scarce, can be intensive, and rapid runoff leads to occa- sional flash flooding which may cause serious damage to structures. The generally sandy soils provide a good foundation for road construction, but in some areas base course material is scarce or must be moved over long distances (and sources of water found) in order to build or resurface roads. Loose, blowing sand has recently become a problem north of Tahoua, adding considerably to the costs of routine road maintenance. Traffic 2.11 Traffic counts have been carried out on the road network in three campaigns since independence. Traffic volumes were originally very low and are still modest. Between 1964/65 and 1976/77, traffic growth averaged about 8% per year. However, based on recent traffic counts on links pro- grammed for periodic maintenance, it appears that traffic has grown rapidly in recent years (Map IBRD 19198). On those links, preliminary results indicate an average growth rate of 22% per year on paved roads and 20% on unpaved roads from 1976/77 to 1984/85. Even so, traffic levels are still relatively low; the most heavily trafficked roads have less than 1,000 vehicles per day. Light vehicle traffic (automobiles, vans, small buses, and light trucks) has, in general, grown faster than heavy vehicle traffic. Annex 2-2 contains further details on the results of the traffic survey. 2.12 The following graph and Annex 2-3 show vehicle registration sta- tistics for 1970-1984. Niger - New Vehicle Registrations. 1970-1984 (excludes motorcycles) 4000_ 3000_ 2000_ 1000 _ I T I I I I I I I I I r l I 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 From 1970 to 1976 the vehicle fleet exhibited a steady growth rate of about 10% per year. This rate rose to around 14% in 1977-1980 but has since de- clined to less than its 1976 level.  - 8 - 2.13 The graph below and Annex 2-4 show the historical pattern of fuel consumption for gasoline and diesel fuel. Niger - Fuel Consumption, 1970-1984 (in '000m ) ('000 ml) 150 135_ 120 . 105 90 75_ Diesel ~ 60- 30- 15 Gaso (including Super) _- _ | | W ]X_l T 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 This graph also shows a distinct declining trend since 1980 corresponding to the general decline in economic activity during this period. A further explanation of this trend lies in the ready availability of cheaper fuel from northern Nigeria, the consumption of which is not included in official statistics. C. The Road Transport Industry 2.14 Niger has an active and diversified trucking industry which has benefited substantially from past improvements in the road network. Of the roughly 1,000 trucks engaged in public freight transport, about half are owned and operated by the parastatal Societe Nationale des Transports Nigeriens (SNTN) and the rest by small private truckers, most of whom own only one or two vehicles. SNTN handles much of the long-distance freight traffic, including all of the uranium-related imports and exports. It also operates urban and intercity bus lines. SNTN's performance was reviewed by IDA consultants in 1984 and it was found to be well managed, efficient and financially sound. SNTN is fully autonomous and obtains most of its work through contracts in competition with the active private sector. As part of the Goverment effort to reduce its direct involvement in economic activity, the Government is committed to reduce its equity share in SNTN, a commercially viable organization with mixed public/private ownership.  .9- 2.15 There are some 350 smaller truckers, most of whom are grouped in the National Union of Transporters (SNT). During peak periods SNTN will subcontract some of its business to small, individual truckers through SNT. Public passenger transport witbin and between urban areas is largely pro- vided by private operators of taxis, vans and minibuses. Rural areas are served, where roads exist, by "bush taxi" and trucks. Pedestrian and ani- mal transport are also significant. 2.16 The Government does not enforce tariffs for road transport, ex- cept for the transport of petroleum products. However, it does provide official rates which serve as a ceiling on actual charges. Some types of long-dibtance freight originating at the railhead in Parakou (Benin) are subject to tariffs imposed by the bi-national organization that operates the Cotonou-Parakou railway. For domestic freight, tariffs are usually ne- gotiated on a case by case basis. The prevailing competition among truck- ers means that most of the savings in vehicle operating costs due to road maintenance will be passed on to consumers. This is also true for passen- ger transport. 2.17 Authorizations for public transport operators are issued by DTT upon presentation of appropriate documentation, including proof of payment of commercial license fees and taxes which are collected at the municipal level. (See Annex 2-5 for details of charges pertaining to the road trans- port industry.) In principle, only Nigerien citizens are allowed to form public transport companies; however, foreigners may do so with special authorization. Freight transport vehicles are required to be inspected twice a year, and passenger transport vehicles four times a yea.:. 2.18 In the past two years, a severe strain has been placed on Niger's private and public trucking capacity by the need to transport large volumes of imported food grains on a regular basis to remote areas of the country. At times the distribution effort has completely absorbed private capacity and military and other Government vehicles have been pressed into service, including those assigned to development projects. The direct and indirect cost to the country has been staggerirn. In mid 1985 it was estimated that over 200,000 tons of food aid needed to be distributed before the rainy season, at a global transport cost of nearly CFAF 2 billion. Annual trans- port costs associated with the distribution of all food imports, including purchased food grains, are therefore probably on the order of CFAF 5 bil- lion. However, the Government projects decreasing volumes of food imports for the future. Any plans for renewing or expanding the vehicle fleet should therefore be carefully evaluated in the light of alternative sce- narios for food grain supply in the future.  - 10 - D. Public Expenditures and Subsector Financing 2.19 The past and projected growth of public investment in the roads subsector is shown below. Niger - Past and Projected Public Investment in the Roads Subsector (in billion CFAF) Investment (billion CFAF) 30 24_ 18 12 6_ 0 __ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ = I I i I 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 The peak in 1979-80 corresponds to the major construction program under- taken when uranium revenues swelled the National Investment Fund. Periodic maintenance of both paved and gravel roads is included in the investment program rather than in recurrent expenditures for national budgeting pur- poses, and is financed from the government investment budget and external assistance. Details of past and planned levels of investment are given in Annex 2-1. 2.20 The following graph shows the evolution of recurrent maintenance expenditures in relation to projected needs.  - 11 - Niger - Recurrent Maintenance Expenditures in Relation to Needs (billion CFAF) 4. 00_ 3.00, JS ,."",' 2.00 Needs -~ _ ' sProjected A { ~~~~Expenditures 1.00 ~~~~~~Actual Expenditures 0.00~~~~~~&A ____________________ ____________ 01, oo i I - I I I p I I I p I Years 7172 737475767778798081823848586878889 - 0 es e -.D .0 .0W-. _n 0 l UP r- M .0 0 1- P- eW o - es t eP IS X 0 as (q e, O Needs . . ! ! :