El Salvador - Third Highway Project

Ct-3)J RESTRICTED Report No. TO-340a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THIRD HIGHWAY PROJECT EL SALVADOR October 11, 1962 Department of Technical Operations  CURRENCY EQUIVALENTS (Official rate of exchange) U.S. $1 = 2. 50 colones 1 colone = U.S. $0. 40 1 million colones = U. S. $400, 000  EL SALVADOR APPRA-ISAL OP T-IRD iICG+ThAY PROJECT Table of Contents page SUIPMARY i-ii I. I1TTRODUCTION1 1 II. BACKGTROLTTD 1-2 A. The Coastal Highway Project 1 B. The Feeder Road Project 2 C. HighTwray HIeeds 2 D. Tne Status of Liaintenance 3 * III. THE PROJJECT 4 A. Description 4 B. Cost Estimate 5 C. Administration and Execution 6 D. Economic Justification 7 Tne Trunk Roads 8 The Feeder Roads 10 Zaintenance of thne Coastal Highway 11 IV. CONsTCLUSTOIT,S AiD RECOI-LjIENDATIOTQS 11 Appendices Table 1 - List of Roads in the Project Table 2 - Design Standards Table 3 - Cost Estimate of the Project Table 4 - Trunk Roads - Projection of Traffic Volumnes Tabl e 5- Feeder Roads - rxpansion in Cultivation Hap 1 :El Salvador - Third HighwJay Project  M SALVADOR APPRAISAL OF THIRD HIGHWAY PMJECT SUPiNARY i. The "overnment of El Salvador has asked the Association to assist in financing a project consisting of tlo parts: a) construction; and b) main- tenance as follows: a) The design, improvement, construction or reconstruction of eleven roads totaling 364 km in length. b) The reorganizing, equipping and training of the maintenance organization on the Coastal Highway. ii. The Bank has made two highway loans to El Salvador, the first for US$11.1 million equivalent in October 1954 for the Coastal Highway, and the second for us$5.o million equivalent in January 1959 for a feeder road proj- ect. The Coastal Highway was completed in January 1962, while the Feeder Road Project is scheduled for completion early in 1963. iii. As traffic on the existing road system has increased steadily, at- tention must nowi be directed to raising the standards of certain existing roads. Almost all of the roads included in the construction part of the project are parts of the existing highnway system which require improvement. reconstruction or replacement. iv. Field inspections have indicated that the recently-completed Coastal Highway is not being properly maintained because of lack of equipment and lu- familiarity with modern maintenance techniques. The maintenance part of the project is designed to rectify this situation. v. Consultants satisfactory to IDA would be responsible Ifor the overall supervision of the Project. The proposed design standards for the construc- tion part are considered adequate. vi. The design and construction or reconstruction of roads included in the project would be completed within four years. The reorganizing and train- ing of the maintenance organization would be extended over a two-year perioc. vii. The total cost of the Project is estimated at USil3.5 million eauiva lent of which the foreign exchange coiponent is US53.OO million equivalent. The cost estimate for construction is based mainly on aerial surveys, but ap- pears in line with the cost of work presently under way. The cost estimate fo: the maintenance part is based on current costs of equipment and services. Both include a reasonable allowance for contingencies including price increases. viii. The important benefits of the Project would be the lowering of trans nort costs and improved communications between the two major cities of El Salvador and the ports of Acajutla and La Libertad. Communications to the neighboring countries of Guatemala and Honduras wTould also be improved, while agricultural production would be stimulated in the service area of the feeder roads.  ii. ix. Tle improvement in maintenance operations would help preserve the major investment in the Coastal High-vay. The training ifhich would be given to a select group of maintenance engineers should eventually lead to greater efficiency in maintenance operations throughout the country. x. TAe Project provides a suitable basis for a development credit of US38 million to cover its foreign exchange cost.  I. INTRODUCTION 1. The Government of El Salvador has asked the Association to assist in the financing of a road project for: a) the improvement, construction and reconstruction of seven trunk roads and four feeder roads; and b) the re- organizing, eqLipping and training of the maintenance organization on the Coastal Highlway. The total cost of the above project is estimated to be US$l3.5 million equivalent. 2. The Bank has made twTo highway loans to El Salvador, Loan 104-ES, in October 194, for the Coastal Highway and Loan 216-ES, in January 1959, for feeder roads to the Coastal High vay. The first project was completed in January 1962, while the second project is about 80% complete. 3. The proposed project is based on a preliminary engineering study prepared by Tippetts-Abbett-H-fcCarthyy-Stratton (TAh3) early in 1961. The report was submitted to the IDA later that year, but because of the unsettled political situation, an appraisal mission was not sent to El Salvador until early 1962. The mission recommended a number of changes in the project, nost of which were accepted. This report is based on the original study made byr the Consultants and additional information prepared and submitted by the Government and the Consultants after the visit of the mission. II. BACKGROTJND A. The Coastal Highway Pro;ect 4. In October 1954, the Bank made a loan (104-ES) of USpll.l million equivalent for this project. It consisted of the construction of a 320-km high standard paved highway through the Pacific coastal area extending from the Guatemalan border to the Honduran border. One section of the Highway was already in existence when the loan agreement was signed, while another sec- tion Twas under execution. The construction work was let in five sections. * 5. The Highway was completed in January 1962, about three years behind the originally scheduled completion date of late 1958. The delay was mainly caused by the failure of the contractor on one section, which eventually had to be re-bid, and the financial difficulties of another contractor on two other sections which materially slowed his progress. 6. Despite the difficulties noted above, the work was satisfactorily carried out to high standards throughout under the supervision of TANIS. The total cost of the project amounted to approximately US327.l million equivralent, about 70j over the original estimate. The main reasons for the over-run were: i) the Governmentlts decision at time of bidding to collect taxes on payments to contractors; ii) the later inclusion of the cost of housing and feeding of Government supervisory staff; iii) greater than expected quantities of hard rocd and iv) the increased costs of supervision due to the delay in the execution of the project.  2. 7. The construction of a hihTTay through the Pacific Coastal region has opened un the principal remaining area in the country with unused agricultural potential. Before, much of this area was practically inaccessible. Developmeni took place as soon as sections of the highway were onened to traffic; land was cleared and planted, and houses and buildings erected. Today much of the coast- al plain is imder itensive cultivation. Corn and cotton are the most impotar crops while the raising of beef cattle has been greatly expanded. The success- ful development of agricultural production in the area traversed by the Coastal Highway is very encouraging and indicates that lands will be rapidly developed in El Salvador once proper access is provided. B. The Feeder Road Project 8. At the time the Coastal Highway Project wvas conceived, it wTas foresee that a system of feeder roads would be required to obtain full benefit from the Highwjay. A feeder road proiect was prepared in 1958 and a loan (216-ES) for US.05.0 million equivalent was made in January L959. 9. The Feeder Road Project consists of two parts: the construction of 20 feeder roads of which all but three connect directly with the Coastal Highway; and the constraction of three complementary projects to the Coastal Highway. All of the feeder roads are now under construction and are scheduled for com- pletion early in 1963. The three complementary projects have been comiipleted. The quality of the work on some of the feeder roads has been somewhat unsatis- factory but, following a recent Bank field inspection, steps have been taken to obtain better -performance by the contractors. The project is being supervised bv Government forces wTith the assistance of TAMS. 10. It is too early to cite specific benefits resulting from the construc, tion of the feeder road proJect as only six roads have been completed to date, and these only for a short time. It is evident, however, that the benefits would include a further strong stimulus to the development of the coastal regio which be7an wmith the construction of the Coastal Highway. C. Highway NJeeds II11. The gross national product of El Salvador expanded at an annual rate of about 7% during the decade ending in 19584 Since 1958 there has been little growth in the economy largely because of the fall in world coffee prices. The economy remains primarily based on agriculture, although some expans-on has taken place in the industrial sector. Some results of the economic integrat; or of the Central American coumntries noA in process can already be seen, and un- doubtedly El Salvador, with its centrcl location will enjoy further gains as integration proceeds. 12. Unile parts of El Salvador are served by two narrow-gauge railways totaling about 750 km in length, the high m7ay system is playing an increasingly important role in the field of transportation. The total length of thle exist- ing road systemi is 3,390 lou classified as follo-s: 980 km of asphalt roads; 930 lou of all-weather gravel roads; and 1,40 km of unimriproved roads. During the last five years approxim^iiately 350 km of paved roads, 250 km of gravel roads  3. and 40O k-ri of uninproved roads have been constructed. This represents an over- all incre;se of approximately 30%. Vehicle registration in El Salvador is grow- ing at the rate of over l/'O per year while an average annual increase in fuel consumption of approximately cO has taken place from 1950 to 1960. 13. For the past several years highway expenditures have been concentrate on the construction of new roads and little has been done to improve and up'- grade some of the most important existing roads on which traffic has increased steadily. Priority should now be given to rebuilding some of these roads to higher design standards and providing paved surfaces where none presently exist The project submitted in this report is mainly concerned with this type of ork- D. Status of yIaintenance. 14. The Hi-hThay Department has been considered in the past to be a rela- tively efficient organization. Political interference was held to a minimum, and the Department was reason^,.bly well equipped and staffed. However, recent Bank inspections have indicated that maintenance standards have fallen because of extensive use of hand labor and insufficient appropriation of funds, ancd the Department is unfamiliar -vith modern techniques for maintaining high standard paved highways such as the Coastal Highway. 15. A Bank mission which visited El Salvador in October 1961 found that the Coastal Highway had sustained consi.dIerable damage during the rainy season which had just ended. At that time, little effort was being made to repair the damage or carry out necessary routine maintenance. Following representation by the Bank, a major effort was made to restore the highway, and the recent Bank mission to El Salvador found that most of the damage had been repaired. Desnitt this improvement, the mission concluded that maintenance operations on the High- way were inadequate. The Txworkmanship was poor and repairs were being m.ade with inferior matezials. 16. The maintenance budget has not been increased for several years al- though as pointed out in paragraph 12, the highway- system has expanded at a rapid rate. Furthermore, the Government has recently adopted a policy of using hand labor on maintenance to relieve unemployment, and has discouraged the use of equipment. Worn out equipment is not being replaced and equipment needing repairs is being:-kept idle because of the lack of spare parts. Equipment is considered essential on such maintenance operations as compacting materials, repairing pavement surfaces and transporting suitable materials fromn appropriat sources of supply, which may be some distance from the place of use. 17. 'he maintenance of the 320-km long Coastal Hi-.hway, parts of which ar, located through the most rugged type of terrain, andc the whole of which is sub- ject to heavy seasonal rains, is an operation of considerable magnitude. If thf investment in the Coastal Hisghway is to be preserved, it is essential that step be taken to strenathen the present maintenance organization by building Up its equipment and training personnel in modern maintenance techniques. To provide for this, the new project includes a program of maintenance for the Coastal Highway, the countryts mnost i=oortant high standard road.  - 4 - III. THE PROJECT A. Description 18. Lhe project consists of two parts: a) construction; and b) maintenance as follows: a) The design, improvement, construction or reconstruction of seven trunk roads and four feeder roads totaling 364 km in length. b) The reorganizing, equipping and training of the maintenance organization on the Coastal Highway. 19. The eleven roads in the construction part of the project (see Table 1) may be classified as a) those wihich primarily serve internal traffic (Nos. 1-h); b) those leading to the road systems of adjoining countries (Nos. 5-7); and c) agricultural feeder roads (Nos. 8-11). All but one of the roads are located in the wlestern half of the country (see map). 20. The improvement of roads Nos. 1-3 would better the existing connec- tions between San Salvador and Santa Ana, and the Pacific Coast ports of Aca- jutla and La Libertad. The work would consist mainly of upgrading sub-standard sections in mountainous terrain. A small amount of realignment would. also be required, mostly on Road No. 2. The worL on Road No. 1 would include the re- placement of a number of small structures, the strengthening of the base on sections Ywhere almost continuous maintenance is noT required and the upgrading of onre1hort section to the standards generally existing elsewhere on the road. 21. Road No. 4 provides a bhpass around San Salvador for through traffic between the north andl the w-estern part of the countryc The earthllorks of this road have recently been completed by the Department of Public xJorks so that only the base and paving of this road is included. 22. The remaining three trunk roads would improve existing connections to the highway systems of neighboring Guatemala and Honduras. On Road No. 5 the work consists mainly of i;iproving the vertical aligment and the paving of an existing road. The Inter- merican HighwTay in Honduras, which connects with this road, was recently reconstructed and paved. 23. Some reconstruction and the paving of Road No. 6 would improve the only connection between El Salvador and the western region of Honduras. A trunk road, known as the Western Hi-hway Extension, is now under construction through this region of Honduras whrich will provide a direct connection from El Salvador to Puerto Cortes on the Caribbean coast. The Extension is partly financed by IDA funds (Credit No. 1) and is scheduled for cormnletion in 1964. 24. Only the paving of Road 1Ho. 7 is included in the project as the earth- works are being carried out by the Pubolic Works Department. The road will pro- vide another cnnnection to Guatemala. A suitable bridge across the Rio Paz at the border already exists, and the Guntemalan Government has indicated its in- tention of improvina the connecting road in its territory.  -5- 25. The four feeder roads (Ios. 8-11) are located in the highly productive west-central mountainous region. 'To would serve the Lake Llopango area just east of San Salvador, while tie remaining twJo would feed the Coastal highlIway and one of thle trunk roads (;o. 4) in the project. Tne i-Tork on thlese four roads woul-d involve newf construction. 26. The project includes primary (L), secondary (3), and tertiary (4) roads. Tuesign standards have been establlshed in accordance with anticipated traffic volumes, and include provision -,for all-weather surface as shown in 7able 2. 27. The maintenance part of thae project consists of reorganizing the maintenance of tle Coastal lighway and providing sufficient equipment, spare parts and supplies so that the Highwav will be effectively and efficiently maintained. As modern maintenance techaniques can best be demonstrated on a high-standard hiilhwa7y of modern design, it is proposed to concentrate the maintenance efforts on the Coastal Highway. Tle lessons learned here vould eventually be reflected on the maintenance practice throughout tlhe country's highway system. T7ne hiinistry of Public Works has agreed to make available for sacps some of tne buildings used during the construction of the Highway. 28. The project includes a provision for a maintenance engineer for a two-year period to train local forces in modern maintenance techaniques includinefl the operation, scheduling and maintenance of equipment, the selection of suitable materials for repair work, and tre application of seal coats to preserve the existing pavement. B. Cost lQstimates 29. The total estimated cost of the Turoject including thle construction and maintenance parts is US ;8.0 million equivalent in foreign emchange and USV5.5 million eauivalent in local currency, a total of USf'P13.5 million equivalent. Tne foreign currency con.^ponent for thne construction part amounts to 60.3-,, w'nile for the -maintenance part it is 50.Q01 or an average of 59.3,. 30. The detailed estimate, which is given in Table 3, is summarized below: Foreign Local Cost Currency Cost Total Cost (inr.illions of US dollars equivalent)- Constru.ction 4..8 7.3 12.1