Mexico - State Roads Project

Report No. PID8079 Project Name Mexico-State Roads Project Region Latin America and the Caribbean Sector Transport Project ID MXPE52439 Borrower Government of Mexico Executing Agency Secretaria de Comunicaciones y Transporte (SCT) National Feeder Roads Agency (CONACAL) State Road Agencies (SRAS) Financing Plan IBRD US$150.0 million Government US$50.0 million Total Cost US$200.0 million Year in Lending Program FY99 Date this PID revised April 27, 1998 Tentative Appraisal Date February 1999 Tentative Board Date June 1999 1. Background. Mexico's highway system consists of about 302,000 km of roads, of which about 49,000 km are classified as federal roads and for which the SecretarUa de Comunicaciones y Transporte (SCT) has primary responsibility. The states have full jurisdictional responsibility for some 83,000 km of roads; these are often called the state feeder highways. Control and responsibility for the approximately 170,000 km remainder, classified as rural roads, is shared by the municipalities, the states, CONACAL (the National Feeder Road and Airstrip Commission Trust), and the federal Government. However, the federal Government intends to transfer responsibility for this rural road network fully to the states and municipalities. These two segments of the road network, feeder highways and rural roads, total 253,000 km and are collectively labeled here as the 'state roads' network. 2. The state roads network is located predominantly in the rural areas. It can be characterized by the somewhat disadvantageous combination that it offers -- too limited a coverage in most states and too little of it (45% on average) in good condition. It certainly cannot provide the efficient, least cost surface transport linkages needed in Mexico today. Chiapas, for example, is similarly underprovided with roads (0.8km /000 persons) that are in poor condition (85%) as some Central American countries. Economic growth can not be sustained if key needs in the transport sector, especially in road transport, are not addressed now. 3. Program and Project Objectives. The main objectives of the program and the project are to improve the management of the road network by state and local agencies by promoting a decentralized framework for transport development. More specifically, the project would increase the quantity and quality of states' road networks and improve the access to the main economic centers for the agriculture dependent and other populations of the rural municipios of the project states by : (i) improving the systems  and procedures for road maintenance and ensuring that the maintainable network in all project assisted states is satisfactorily maintained; (ii) rehabilitating/improving the existing roads; (iii) improving the quality and capability of staff involved in the subsector nationwide at all levels; (iv) strengthening institutional arrangements and improving the procedures for planning, programming and budgeting; (v) developing sectoral environmental assessment techniques and institutionalizing them at state and federal levels; and (vi) improving the technical environment for planning and improving the quality of state roads, including the adaptation and dissemination of more appropriate road technologies. 4. Project Description. The project's total cost would be about $200.0 million including contingencies, and it would be implemented during 1999- 2002. It includes (i) the improvement of about 500 km of secondary (non- federal) roads that have been accorded high priority in the State's 5 year road improvement programs; (ii) the design and implementation of a program of routine and periodic maintenance for all non-federal roads in the State; (iii) training, studies, consulting services, institutional strengthening, especially in the social and environmental aspects of road programs; and (iv) feasibility studies and the preparation of detailed engineering. 5. Project Implementation. The project would be implemented by the Secretaria de Comunicaciones y Transporte (SCT), the national feeder roads agency (CONACAL), and the road agencies in selected states. Project monitoring indicators would be agreed during project preparation. Annual and mid-term reviews would be conducted. 6. Sustainability. Implementation of this project will lead to the practicing of better planning, organization, and management procedures and techniques. Important too would be the improved provision of funds for road maintenance and the encouragement of greater participation by the private sector in activities that have so far been reserved for government agencies. The changes in practices and procedures are sustainable individually and taken together, they can promote lasting and highly beneficial changes in the road sector. 7. Lessons Learned. The main lessons learned, from ongoing projects in Mexico and relevant operations in other countries and that have been applied in this project, were that: (i) planning and programming procedures, especially for road maintenance need to be accorded a high priority; (ii) frequent supervision is needed due to the limited experience of sub-national agencies; (iii) sustainable institutional improvements require significant efforts from the Government and support from Donors over a long period of time; (iv) unless dealt with continuously, the inconsistent and inadequate provision of counterpart funds could reduce project implementation rates well below existing SRA implementation capacity; and (v) frequent changes in administration and key staff can adversely affect the implementation of technical assistance and institutional strengthening programs. 8. Poverty Category. It is expected that the project will not be included in the Program of Targeted Interventions. 9. Participation: The project does not entail formal participation of -2 -  stakeholders either in its preparation or implementation. This is because the roads would be rehabilitated to previous standards and within long established rights-of-way. 10. Environmental Aspects. A category "B" rating will be assigned largely because the project is for the restoration of roads to pre-existing standards. The project will also be implemented in a manner that is consistent with Mexican and Bank policies. Also, only road sub-projects with a "B" rating will be included in this project. 11. Program Objective Categories. The main contribution of the project will be to basic infrastructure upgrading and to public sector management through the improvements expected in road network quality, in the sector's institutional and technical framework, and in the capabilities of SRA and SCT staff. The project belongs to the economic management category. 12. Contact Points: The InfoShop The World Bank 1818 H Street NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Note: This is information on an evolving project. Certain activities and/or components may not be included in the final project. Processed by the InfoShop week ending August 27, 1999. - 3 -