Colombia - Fourth Highway Project

R E S T R I C T E D Repo r t N o. TO 292b TO (IDA) 8b This report was prepared for use within the Bank and the Association. ht may not be published nor may it be quoted as representing their views. The Soin and the Association accept no responsibility for the accuracy or co@wpI.tensss of the contents of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF A FOURTH HIGHWAY PROJECT COLOMBIA August 7, 1961 Department of Technical Operations  OFFICIAL IMPORT RATE OF EXCHANGE (Currency Equivalenis) US$ = Pa, 6, 7 US$ 1, 000, 000 = Pa. 6. 700, 000 Ps. 1,000,000 = US$ 149, 254  APPRAISAL OF A FOURTH HIG-HWA'Y PROJECT COLOnIA Table of Contents Page SUl1IARY i I. INTRODUCTION 1 II. BACKGROUND 1 A. The Colombian Highwa-y Plan I 1 B. The First Highway Loan (43-CO) 2 C. The Second Highway Loan (84-co) 2 D. The Third Highway Loan (144-CO) 2 E. Progress of the Program 4 F. Transport Survey 5 III. THE PROJECT 6 A. Reappraisal of the Program 6 B. Description of the Project 7 Continuation of the Construction Program 8 Additional Wiork 8 Engineering Studies and Design 8 Appraisal of Maint.enance 8 Maintenance Equipment C. Cost Estimates and Source of Funds 9 D. Administration and Execution 11 E. Economic Justification 12 IV. CONCU3 SIONS AND RECOINE-NDATIONS 15 .PPPNDIK Table 1 - List of Road ~Torks Table 2 - Minimum Design Standards Table 3 - Cost Estimate Chart 1 - Fuel Consumption and Vehicles Registered Map 1 - Colombia : Average Daily Traffic Counts lMap 2 - Colombia : Project Roads  COLOBIA APPRAISAL OF A FOURTH HIGHW>rAY PROJECT SUMAlRY i. The Government of Colombia has asked the ~&ank and the Association to assist in financing a highway project consisting of: Construction Project a) The continluation over a period of four years of construction and reconstruction of 721 km of roads including the completion of the Cali-Medellin-Cartagena road, all of which were pre- viously financed in part under prior Bank loans. b) The construction of eight additional sections of road totaling 526 km, these works to be carried out in four years. c) Engineering services for the above, and for studies and the final designs of further road works. Miaintenance Project a) A study of maintenance administration and operations on the entire highway system, the objective being to introduce needed improvements. b) The purchase of highway maintenance equipment and spare parts. ii. The construction part of the Project includes roads started under earlier Bank projects. The construction of these roads has been adversely affected by many factors which have delayed completion and considerably in- creased the cost. While substantial sums have been invested in the program, and more will be required for its completion, the investment has been worth- while and to the over-all benefit and development of Colombia. iii. The construction part of the Project also includes additional roads which are now considered to be essential to the development of an integrated highway network. The early completion of the Cali-NIedellin-Cartagena road is given high priority because this is the most important road for traffic in Colombia. Highway maintenance has deteriorated in Colombia over the past several years, a.nd the maintenance project therefore includes a reappraisal of maintenance operations and provides for urgently needed equipment. iv, The total cost of the Project is estimated at US$98.8 million equiv- alent, of iwhich the foreign exchange component is about US 39.0 million equiv- alent. The cost estimates are based on actual costs of similar work and in- clude a reasonable allowance for contingencies. v. Recent traffic counts on the roads justify their early completion with a paved surface. The proposed design standards are considered adequate to accommodate growing traffic densities.  - ii - vi. A review of the highway maintena.nce organization and expansion of its facilities are necessary to assure improvements in administration and to enable the Highway Department to carry out its responsibility for the rapidly expanding highway system. vii. As conditions of the loan and credit, the Government of Colombia has undertaken: a) To employ Consultants, (i) to assist in the design and super- vision of construction of roads in the Project; (ii) to assist in the preparation and finalization of studies, plans, specifi- cations and contract documents for further road works; (iii) to prepare a study of maintenance administration and operations; and (iv) to give prior approval to the purchase of maintenance equipment on the basis of a field investigation carried out by Consultants to establish the amount and condition of the exist- ing equipment. b) To submit to I1bRD/IDA for approval the terms of reference and conditions of employment of the Consultants. c) To divide when feasible the major part of the construction works into contracts of a. suitable size to attract bids from substantial contractors. d) To let contracts for construction works and maintenance equip- ment through international competitive bidding. viii, Satisfactory assura.nces have been obtained from the Government of Colombia as follows: a) Design standards agreed upon during negotiation will not be changed during the execution of the Project without the agree- ment of the IBRD/IDA. b) Selection of further roads to be designed will be deferred until the findings of the Transport Survey become available. c) The Project will be given priority in the Government's highway construction program ano funds and other resources therefore will be provided promptly as needed. d) Maintenance equipment ifll not be used for other purposes than maintenance. e) Weight control regulations will be reimposed and strictly enforced. ix. The Project is technically sound and economically justified. The total foreign currency component of US$39.0 million equivalent provides a suitable basis of financing by the Bank and the Association. An appropriate division would be half for each institution. In this event an appropriate teim for the Bank loan would be fifteen years including a period of grace of four years.  I. INTRODUCTION 1. The Government of Colombia has approached the International Bank for Reconstiuction and Development (IBRD) and the International Development Asso- ciation (IDA) for assistance in financing part of the cost of (a) the cont.ir