Report No. 1729b-ZA E L Appraisal of aThird Highway ProjectZambiaApril 17, 1978

Regional Projects DepartmentEastern Africa Regional Office

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Kwacha (K)

US$1.00 = K 0.8

K 1.00 = US$1.25

WEIGHTS AND MEASURES

1 meter (m) = 3.28 feet (ft)1 kilometer (km) 2 - 0.62 miles (mi)1 square kilometer (km ) 0.386 square miles (sq mi)1 metric ton (m ton) = 2,204 pounds (lb)

GLOSSARY OF ABBREVIATIONS

CIDA - Canadian International Development AgencyMLGH - Ministry of Local Government and HousingMPW - Ministry of Public WorksMSB - Mechanical Services BranchMTPC - Ministry of Transport, Power, and CommunicationsNCDP - National Commission for Development PlanningNTC - National Transport CorporationPRE - Provincial Road EngineerRC - Rural CouncilRD - Roads DepartmentRTC - Road Traffic CommissionerSNDP - Second National Development PlanTAZARA - Tanzania-Zambia Railway AuthorityTNDP - Third National Development Planvpd - vehicles per dayZR - Zambia Railways

ZTRS - Zambia-Tanzania Road Services

GOVERNMENT OF ZAMBIAFISCAL YEAR

January 1 - December 31

OR OFflCIAL USE ONLY

ZAMBIA

APPRAISAL OF A THIRD HIGHWAY PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS . ........................ .i-ii

1. INTRODUCTION .................................. * .......... I

2. THE TRANSPORT SECTOR . ....................... . . ........... I

A. Economic Setting .............. 1....................... B. The Transport System ................................. 2C. Transport Policy, Planning and Coordination .......... 4D. Previous Bank Group Projects in the Transport Sector . 5

3. HIGHWAYS .......... .......... ........... 6

A. The Network ..................................... 6B. Traffic Growth and Characteristics .................. . 7C. Administration ................................... 8D. Training ....... *............................. ... 10

E. Expenditure and Financing ............. ................ 11F. Planning .. **.................... 12G. Engineering and Construction ........................ 13H. Maintenance ..................................... .. *. 13

4. THE PROJECT .14

A. Objectives .14B. Description ............ .. ... 14C. Cost Estimates .................... ....... . 17D. Financing ..................... 19E. Execution and Procurement .. 20F. Disbursements ....... . .. 20

5. ECONOMIC EVALUATION .......... . .21

6. AGREEMENTS REACHED AND RECOMMENDATIONS . . .23

This report was prepared by S. Kathuria (Engineer), M. Mason (Economist),J. Damron (Project Assistant) and P. Brereton (Editor).

This document has a rtrkiced distifbutin smay be usd by rcipients only in the performanceOf their oMCial dutbs. Its contents nmy not otherwie be discsed without World Bank authorization.

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TABLE OF CONTENTS (Continued)

TABLES

1. Zambia's Imports and Exports by Routes (1970-76)2. Road Network Maintained by Roads Department3. New Registration of Motor Vehicles (1970-75)4. Roads Department Training School Courses5. Roads Department Highway Expenditures6. Capital and Recurrent Expenditures7. Roads Included in the Project for Periodic Maintenance8. Road Maintenance Equipment Needs of Roads Department9. Road Maintenance Equipment to be Purchased10. Road Maintenance Equipment to be Rehabilitated11. Workshop Equipment and Tools to be Purchased12. Training Aids to be Purchased13. Technical Assistance to be Provided14. Estimated Schedule of Disbursements

ANNEXES

I Terms of Reference for a Study of MSB ReorganizationII. Terms of Reference for Feasibility Study and Detailed EngineeringIII. Terms of Reference for Technical AssistanceIV. Economic Evaluation

CHARTS

I. Organization of the Roads Department (World Bank 17992)II. Organization of the Rural Councils (World Bank 17993)III. Organization of the Mechanical Services Branch (World Bank 17994)IV. Project Implementation Schedule

MAP

Republic of Zambia - Third Highway Project - Highway Network(IBRD 12934)

ZAMBIA

APPRAISAL OF A THIRD HIGHWAY PROJECT

SUMMARY AND CONCLUSIONS

i. The Government of Zambia has requested Bank Group assistancein financing a project to improve maintenance of the country's rapidly de-teriorating road network in order to safeguard the high level of investmentalready made in roads. The network is essential not only to facilitateinternal and external trade, but also to provide the widely scattered ruralpopulation with access to markets and to health and education facilities.

ii. The project consists of: (i) a maintenance program for the primaryand secondary road network; (ii) procurement of road maintenance and workshopequipment, spare parts, tools and training aids; (iii) rehabilitation ofexisting equipment; (iv) a pilot rural road maintenance program; (v) a feasi-bility study, and if justified, detailed engineering of a road or roads; and(vi) technical assistance needed for project implementation.

iii. The proposed investment is economically sound, yielding a rate ofreturn of 44% for the whole project. Both the routine maintenance and periodicmaintenance programs also have rates of return of 44% each.

iv. The total project cost is estimated at US$26.7 million, with a for-eign exchange component of US$22.5 million. No taxes and duties are involved.The project will be financed by an IDA credit and a Bank loan totalling US$22.5

million (US$11.25 million each) which will cover about 84% of total projectcosts and 100% of foreign costs. The Government will contribute US$4.2 mil-lion which will cover the project's remaining costs.

v. Responsibility for implementing the project will be divided amongthe Roads Department under the Ministry of Public Works, the Mechanical Ser-vices Branch under the Defense Division of the President's Office, and theMinistry of Local Government and Housing, assisted by technical experts to beprovided. Project implementation is expected to begin in mid-1978 and endin mid-1982.

vi. Procurement will be as follows: new road maintenance and workshopequipment, including spare parts, estimated to cost about US$11.6 millionequivalent, excluding contingencies, will be procured through internationalcompetitive bidding in accordance with Bank Group Guidelines; training aidsand spare parts for existing equipment, estimated to cost about US$1.5 mil-lion equivalent, excluding contingencies, will be procured in accordance withGovernment procurement procedures which are satisfactory. Similarly equip-ment, materials and other items required for the pilot rural road maintenanceprogram will also be procured according to normal Government procedures.Consultants will be employed under terms and conditions satisfactory to theBank Group (i) to reorganize MSB; (ii) to assist with preparation of bidding

documents for road maintenance and workshop equipment, tender proceduresand evaluation of bids; and (iii) to undertake feasibility and detailedengineering studies.

vii. With the agreements and under the conditions indicated in paras.6.01 - 6.03, the project is suitable for an IDA credit and a Bank loantotalling US$22.5 million (US$11.25 million each). The IDA credit wouldbe on standard terms and the Bank loan would have a term of 20 years, in-cluding 5 years of grace.

ZAMBIA

APPRAISAL OF A THIRD HIGHWAY PROJECT

1. INTRODUCTION

1.01 The Government of Zambia and the Bank Group have discussed a possibleroad project since the early 1970's but were unable to agree on the project'scontent. This was primarily because the Government favored a constructionprogram while the Bank saw the need to improve road maintenance, particularlysince road maintenance was steadily deteriorating during the 1970's. Morerecently, however, Government has realized the importance of road maintenanceas a means of reducing transport costs, preserving external trade routes, andensuring integrated development for the country by improving transportationinfrastructure. Subsequently, during a preappraisal mission in 1976, anagreement was reached on the urgent need to improve maintenance planning andoperations. The Government of Zambia has consequently requested Bank Groupassistance in financing a project to improve the maintenance of its rapidlydeteriorating road network by strengthening the existing institutions formaintenance through the provision of equipment and technical assistance. TheProject was prepared by the Roads Department (RD) and the Mechanical ServicesBranch (MSB), with the assistance of Bank Group staff.

1.02 The project includes components to (i) strengthen RD's capacity toplan and execute road maintenance; (ii) reorganize and assist MSB in improvingequipment availability; (iii) improve the capacity of Rural Councils (RCs) toplan and carry out road maintenance on rural roads; and (iv) finance a feasi-bility study and, if justified, detailed engineering for the upgrading tobituminous standards of the Mansa-Nchelenge road (240 km) or such other roador roads as may be agreed between Government and the Bank Group.

1.03 This report is based on findings of two appraisal missions whichincluded Satdev Kathuria (Engineer), Melody Mason (Economist) and JanetDamron (Project Assistant). The report was edited by Patricia Brereton.

2. THE TRANSPORT SECTOR

A. Economic Setting

2.01 Zambia, a landlocked country in the southern half of Africa, sharescommon borders with Angola, Zaire, Tanzania, Malawi, Mozambique, Rhodesia,Botswana and Namibia. Covering an area of about 750,000 km , the country ispredominantly a plateau, with swamps and valleys along the Zambezi Riverwhich forms the country's southern border. Although about the size of France,Zambia has a small population of approfimately 5 million, with an av~ragepopulation density of 6 persons per km overall, but only 3.6 per km in

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rural areas. The urban population comprises about 35% of the total popula-tion. Urbanization has been rapidly increasing; although overall populationgrowth is estimated at 3% p.a., population in urban areas increased byalmost 7% p.a. from 1969-74, as compared to a 1% growth in rural areas duringthe same period.

2.02 GNP per capita is about US$440 (1976 estimate); between 1965 and1976 real GDP grew at a rate of only 2.8% p.a., approximately equal to therate of population growth. Copper mining continues to dominate the economy,accounting for more than 90% of exports and about 21% of GDP in 1976. Aggre-gate growth has been slow due to near stagnation in mining and a low growthrate in agriculture. Economic activity is concentrated along the "line-of-rail" a narrow north-south strip, running along the railway through centralZambia.

2.03 Since imports and exports account for about half the value ofZambia's GDP, the country is particularly dependent on its transport networkand its access to ports through neighboring countries. To maintain economicactivity at current levels, about 2.5 million tons of cargo (including oil)mus;I move in and out of the country each year. This has led to an emphasison external trade routes in transport investment, as well as internal trans-port development within the line-of-rail corridor. Recently, however, theGovernment has been focusing increased attention on agriculture and ruraldevelopment and has consequently begun to extend its transport policies todeveloping the transport system in the rest of the country.

B. The Transport System

2.04 The transport system comprises approximately 35,000 km of roads,2,000 km of railways, 150 airports and a 1,700 km oil pipeline from Dares Salaam to Ndola in the copper producing area. To overcome its landlockedsituation, priority in transport development has been given to outlets to thesea. Traditionally, railways carried the bulk of Zambia's external trade,but because of recent political developments resulting in the loss of externalrailway connections in Rhodesia and Angola, a large proportion of trade hasbeen carried by road transport through Tanzania, Malawi and, more recently,Mozambique. The internal transport system has mainly developed along theline-of-rail, since this area contains most of the important mining andindustrial concerns in the country, and nearly all of the urbanized popula-tion. In recent years, however, greater emphasis has been given to provincesaway from the line-of-rail, and in particular to providing paved road accessto provincial centers. Chapter 3 gives more details of the road subsector.

Railways

2.05 Zambia has two railways operated by different entities. ZambiaRailways (ZR) extends from Victoria Falls Bridge on the Rhodesian border tothe Copperbelt area in the north where it links up, via Zaire, with theBenguela railway to the Angolan port of Lobito. The Tanzania-Zambia Railway(TAZARA) links up with ZR at Kapiri Mposhi and extends to the port ofDar es Salaam in Tanzania. A feasibility study is presently underway foranother railway linking Zambia with the Malawi Railway.

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Zambia Railway

2.06 ZR is an independent railway, with a main line of 827 km and sub-sidiary lines of 250 km, principally serving mines, refineries and otherindustries in the Copperbelt area. The railway suffered fr-om serious opera-tional and administrative problems when it separated from Rhodesia Rail-ways in 1967, but its performance improved considerably under the managementof Canadian National Railways (1970-75). Government subsidies for the railwayfrom 1972 to 1975 amounted to K 14.0 million, but after a tariff structurereform in 1975, ZR broke even in 1976. Also, more recently, it has beenattempting to correct one of its major problems, a shortage of rolling stock,by seeking funds from external sources. Freight and passenger traffic havedecreased since 1972. ZR's international freight traffic in 1975 (90 millionton-kilometers) showed a decline of more than 75% from 1972 due to closure ofthe border with Rhodesia in 1973 and the suspension of services on the BenguelaRailway in Angola in 1975. A significant proportion of the external tradelost by ZR has been transported by road. ZR's domestic freight also decreasedby about 40% from 1972 to 1975, when it totalled about 920 million ton-kilo-meters; domestic passenger traffic, amounting to some one million passengersin 1975, dropped by 25% from 1972. Poor internal services have caused somecommodities, like coal, to be transported over comparatively long distancesby road, at higher cost than by rail.

Tanzania-Zambia Railway

2.07 TAZARA is jointly owned by the governments of Zambia and Tanzania.Its construction, financed by a Chinese loan of about K 200 million, startedin 1970 and services began in October of 1975. The railway's route kilometer-age totals some 1,850 km, of which 880 km are inside Zambia. The Chineseassist in managing the railway and are expected to remain in that capacityuntil at least 1980. Freight capacity, which is now 2 million tons p.a.,can eventually be increased to 5 million tons. However, only about 1,240million ton-kilometers (675,000 tons) of freight were transported by TAZARA in1976 due to certain technical problems, which have since been resolved, and moreseriously, a much longer than estimated turnaround time caused by long delaysin ZR's loading operations. Consequently, over 800,000 tons of external tradewas still being moved by road in 1976.

Air Transport

2.08 There are 150 airports in Zambia, 52 of which are Government owned.Lusaka International Airport handles all international traffic. The nationalair transport company, Zambia Airways Corporation, established in 1967, hasreceived assistance from Alitalia, and more recently, Aer Lingus, under man-agement contracts. Operating with three Boeing 707s, one Boeing 737, and fourHawker Siddley 748s, the airline's estimated international passenger trafficin 1976 was 77,000, domestic passenger traffic some 167,000, and about21,000 tons in international air freight traffic. After several years ofoperational losses, ranging from K 1.0 to 3.0 million p.a., Zambia Airwaysincurred only a small loss in 1976 and expects to break even in 1977.

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Pipeline

2.09 A 1,700 km pipeline, completed in 1968 and jointly owned and oper-ated by the Tanzanian and Zambian Governments, carried practically all ofZambia's crude oil imports, amounting to 850,000 tons in 1976, and a further50,000 destined for Zaire.

C. Transport Policy, Planning and Coordination

2.10 Before Rhodesia's Unilateral Declaration of Independence in 1965,practically all of Zambia's external trade passed through Rhodesia and theMozambique port of Beira. After the border closure with Rhodesia in 1973,a Contingency Planning Office was set up under the President's Office inorder to ensure efficient routing of trade. Until 1975, about 50% of externaltrade was rerouted through Angola via the Benguela Railway, about 35-40% wentby road to the port of Dar es Salaam, and the rest was routed through variousother ports and by air (Table 1). In 1975, when events in Angola severelyrestricted and eventually halted the operations of the Benguela Railway,Zambian goods were diverted to TAZARA, while the remaining traffic continuedto go by road to Dar es Salaam and other ports. It has been estimated that,after the border closure in 1973, the average cost per ton of inland transportbetween Zambia and coastal ports rose 55% above the average cost in 1972,mainly because long-distance road transport is more costly than rail service.

2.11 Government seeks to maintain control of external trade through thetwo national railways and through the two companies primarily responsible forinternational road haulage, the parastatal National Transport Corporation(NTC), and the Zambia-Tanzania Road Services (ZTRS), an associate company ofNTC. ZTRS operates on the Dar es Salaam route, and Contract Haulage, a sub-sidiary company of NTC, mainly operates on the Beira (Mozambique) route, viaMalawi.

2.12 Internal road haulage is usually undertaken by private operators(para. 3.05). Road haulage rates vary for different routes and commodities,but the overall level is generally set by the parastatal transport companies.Government has controlled tariff increases by refusing to grant parastatalcompanies permission to raise tariffs. However, although NTC is running ata loss, tariffs still seem to be profitable for private operators.

Planning

2.13 The Ministry of Transport, Power and Communications (MTPC) isresponsible for transport planning, but has little real planning capacity;recent attempts to set up a Transport Planning Unit within the Ministry havenot been successful. The actual process of planning is carried out by thegovernment agencies concerned, and highway planning is undertaken by RD underthe Ministry of Public Works (MPW). An integrated long-term sectoral plan,

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which will be part of the Third National Development Plan (TNDP), is presentlybeing drawn up for 1978-82 by a Transport Coordinating Committee, formed by

the National Commission for Development Planning (NCDP). The Corimsitteeconsists of representatives of the Contingency Planning Office, NCDP, MTPC,the national transport companies and other ministries. The final sector planwill take account of the subsectoral plans recommended by contributing subcom-mittees, including one for roads. The TNDP was meant to have taken effectfrom the beginning of 1978, but has now been indefinitely postponed by theGovernment because of Zambia's uncertain economic: situation.

2.14 The Second National Development Plan (SNDP) (1972-76, later ex-tended to 1977), allocated K 311 million to the transport sector, 28% oftotal public investment. Funds allocated to the transport sector were usedfor: constructioni of TAZARA (40%); ZR, the oil pipeline, and air and watertransport (33%); and road construction (27% or K 83.0 million). The latterappears to have been reasonable given the already extensive length of Zambia'sroad network (para. 3.01). The railway and pipeline projects have beencompleted, but several road projects are unfinished (para. 3.21).

2.15 It is important that investment plans for external transport takeinto account the many transport alternatives which will arise in the future.The reopening of the Benguela Railway and/or the border with Rhodesia willbring about surplus transport capacity since, once in full operation, TAZARAalone can carry all of Zambia's imports and exports:. However, when riskconsiderations are taken into account, it is unlikely that Zambia will dependon any one external route, particularly in view of events that have recentlydisrupted transportation in neighboring countries. Also, an additional factoraffecting external transport will be the availability and capacity of seaportsin those countries.

D. Previous Bank Group Projects in the Transport Sector

2.16 The Bank Group has financed two road projects in Zamrbia. The firstloan (469-ZA) for US$17.5 million was approved in 1966 and financed.

(i) the engineering, reconstruction and bituminous paving ofsections of the Great East Road (251 miles) and GreatNorth Road (122 miles); and

(ii) consultant services for detailed engineering and super-vision of construction.

The project was satisfactorily completed on time in 1969 at a total cost ofUS$23.4 million, lower than the estimated cost of US$29.0 million, The ProjectPerformance Audit Report 1/ (PPAR) did not recalculate the rate of return dueto lack of data on road user costs. However, since there were savings inconstruction costs and increases in traffic volumes above appraisal estimates,the actual economic return should have been higher than tne 11-14% originallyestimated.

1/ One PPAR (December 10, 1973) was done for both projects.

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2.17 A second project, financed by Loan 563-ZA for US$10.7 million andapproved in 1968, provided for:

(i) reconstruction to two-lane bituminous paved standard ofone section (235 miles) of the Great North Road;

(ii) three weighbridges on the Great North Road; and

(iii) consultant services for detailed engineering andsupervision of construction.

This project was also completed on time with a minor cost overrun of US$300,000above appraisal estimates - US$17.8 million against US$17.5 million. A rateof return was not calculated in the PPAR but since traffic levels were higherthan expected, the Report estimated that the 12-15% rate of return forecastat appraisal was realized.

2.18 The PPAR indicates that both projects achieved their main objectivesof providing Zambia with improved alternative routes to the sea and that,given the region's political uncertainties, the Bank had used good judgmentin not developing the internal highway network at that time. The Bank was,however, unsuccessful in its efforts to gain Government compliance with aloan covenant requiring proper maintenance of the road network, and consequentlythe condition of the network has deteriorated, leading to the need for develop-ing the present project. Enforcement of vehicle axle load regulations andZambianization of RD's managerial staff were also described as unsatisfactoryin the PPAR, and both issues are addressed in this project (paras. 3.08 and4.14).

3. HIGHWAYS

A. The Network

3.01 Zambia has about 35,000 km of designated roads. RD maintains about19,000 km of these roads (Table 2) which are designated as International Main(T) and Main (M) roads, forming the primary system linking provincial capitalswith neighboring countries and with one another, as well as District (D) roads,which form the secondary system linking the primary network with districtheadquarters and other centers of economic activity. The road networkadministered by RD comprises about 4,600 km (24%) of paved, about 7,600 km(40%) of gravel all-weather, and about 6,800 km (36%) of earth roads; pavedroads increased from about 4,000 km to 4,600 km between 1972-75.

3.02 RCs administer about 16,000 km of Rural District roads which formthe tertiary system serving local population centers and agricultural areas.These are generally low standard earth roads for which no reliable inventoryexists. The Pilot Rural Road Maintenance Program in the proposed projectwill institute a system for preparing road inventories in the area to beselected for inclusion in the program (para. 4.09).

B. Traffic Growth and Characteristics

3.03 In 1975, the vehicle fleet consisted of about 160,000 vehicles, of

which 59% were automobiles, 18% light commercial vehicles, 11% trucks, and12% other types of vehicles. Overall, the fleet has been growing at 9% p.a.since 1970 (Table 3), although annual registration of new vehicles has gene-rally been decreasing, probably due to the declining economic situation andthe import license restrictions imposed during the late 1960s and 1970s.Most vehicles are licenced in Lusaka, though no fleet statistics are avail-

able by area. Trucks with capacities of 30 tons and more, having axle loadsgreater than the 10 ton limit, became common after 1973 when interruptions inexternal rail connections caused an increase in goods transported by road

(para. 2.04).

3.04 The collection and compilation of traffic data is the responsi-

bility of RD's Statistics and Ordinance Unit which is presently staffed byone senior engineer assistant and a clerk. Counts are taken at 58 traffic

points for 7 days and 2 nights in July of every year, at the peak of the

harvest. According to these counts, traffic on the primary and secondaryroads has been growing at about 7% p.a. since 1969. Fifty percent of inter-national and main roads have over 400 vehicles per day (vpd), and another 25%have between 200-400 vpd. Highest traffic volumes are found in the Copper-belt area and along the line-of-rail to Lusaka. Heavy traffic (over 5 ton

trucks) amounts to 30% of total traffic, although in the Copperbelt it is

often as high as 40%. The traffic counting system is unsatisfactory, andthe reliability of existing traffic data is questionable, particularly on

district roads. Counts are taken by maintenance gangs who do not understandthe significance of the task and receive little instruction or supervision.The project will address this problem (para. 4.11).

3.05 Out of the total number of vehicles engaged in road haulage(approximately 2,500 - 3,000), about 40% are operated by NTC and ZTRS (para.2.11) and the rest by small independent private operators owning an averageof 5-10 trucks each. Lower tonnage vehicles prevail within the privatesector, whereas heavy vehicles prevail within the parastatal organizations.Private operators are primarily engaged in internal transportation althoughNTC and ZTRS also subcontract private transporters on the internationalroutes at officially established tariffs.

3.06 The United Bus Company of Zambia, a subsidiary of NTC, accounts forabout half of total road passenger transport capacity, which includes about75% of total bus and 27% of taxi service capacity. Private operators providethe remaining passenger transport. Passenger transport is hampered by asingle countrywide tariff per km for all bus services which has led privateoperators to avoid providing service on low standard roads since tariffs do

not reflect costs; there is, however, intense competition among privateoperators on long distance routes.

3.07 All vehicles must be registered and licensed. Public servicevehicles require a road service license which is issued by the Road TrafficCommissioner (RTC) after he and a Road Transport Panel have considered the

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application. The RTC decides the conditions of license "as he may thinkfit" which often leads to arbitrary decisions. Licenses for road transportof goods specify the route(s)/area on which the vehicles can operate, thetype of goods to be carried, and may establish the rates to be charged forthe service. The Government needs to review its licensing system sincepresent procedures do not allow for flexibility of operations. One of theduties of the transport economist included in technical assistance underthe project (para. 4.11) will be to review the licensing system and sub-mit recommendations for reform to the Government.

3.08 The Roads and Road Traffic Act, which governs vehicle weightsand dimensions and provides adequate legislation to protect the road network,limits the maximum axle load to 10 tons, and the maximum permissible grossweight of vehicles to 40 tons. Axle loads, 1'owever, are often grossly ex-ceeded, and overweight vehicles are common on Zambia's roads. The situationshould be somewhat alleviated once the bulk of external trade is moved byrail (para. 2.15) and once ZR obtains sufficient rolling stock so that morebulk cargo can be transported by rail on internal routes (para. 2.06). How-ever, although this will mean a reduction in the volume of heavy vehicles,traffic legislation will still need to be enforced for the remaining heavytraffic. Past efforts have been ineffectual because weighbridges are openonly during the day, and RD, which is responsible for operating the sixweighbridges (one of which is inoperative) has not been able to force driversto unload or shift cargo. Although persistent offenders receive warningletters from RD, few are ever prosecuted. However, RD is already seekingassistance from the RTC to improve enforcement. The Government agreed that itwill take all such actions as shall be necessary to ensure enforcement of thelegal dimensions, axle loads, and weight limits of vehicles.

C. Administration

Roads Department

3.09 RD, under MPW, is responsible for construction and maintenance ofthe primary and secondary road network. It has central services in Lusakaand nine provincial divisions, each headed by a Provincial Road Engineer(PRE). The central services include divisions of Planning and Design, Works,and Administration. PREs are responsible for road maintenance and minordesign and construction work in their respective regions. The organizationstructure of RD is shown in Chart I.

3.10 One of the major constraints on RD's activities has been the short-age of qualified staff, both at headquarters and in the provinces, because ofthe departure of technical staff after Zambia's independence and the shortageof qualified Zambian engineers. Only 17 of 29 established posts of Engineer,and 11 of 17 posts of Road Inspector are presently filled. The position ofChief Materials Officer is also vacant, as are a number of subordinate posts(3 Materials Officers, 10 Engineering Assistants). Government is trying toovercome the staff shortage by engaging qualified personnel either locallyor from overseas. Four key posts, three of Senior Executive Engineer andone of Chief Materials Officer, are essential for RD to function adequately;

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agreement has been obtained from Government that these key posts will befilled by September 30, 1978 by employing additional staff with appropriatequalifications and experience.

3.11 Previous Bank Group projects stressed the importance of Zambian-ization of RD staff, and this policy was adopted by Government but withoutmuch success because of competition from the private sector and the limitednumber of Zambian engineering graduates. The situation has, however, improvedin the last two years, and the post of Director of Roads as well as sevenother senior positions are filled by nationals. This effort should continue.The Government agreed that it will prepare, by September 30, 1978, a programsatisfactory to the Bank Group for the career development of local staffin RD, and carry out such program thereafter.

Rural Councils

3.12 RCs under MLGH are responsible for development and maintenance ofrural district roads serving the local population and agricultural areas;34 RCs now exist, and the establishment of 11 more is being considered. EachCouncil has a department for civil works including construction and mainte-nance of rural roads. The organization of RCs and their Public WorksDepartments is shown in Chart II.

3.13 Maintenance of rural roads is practically nonexistent because RCslack the required skills and resources. Because of the lack of skilledmanpower for road maintenance, available equipment and labor are mainlyused for other types of public works, and road maintenance is done onlysporadically. The Pilot Rural Road Maintenance Program included in theproject will assist in determining how maintenance planning and operationsof RC roads can be improved (para. 4.09).

Mechanical Services Branch

3.14 MSB, previously under civilian administration in the former Ministryof Power, Transport and Works (MPTW), was brought under military controlin 1974 under the Defense Division of the President's Office. This did not,however, change MSB's functions which were to procure, maintain and repaironly civilian government vehicles and plant. Although management of MSB isin the hands of the military, most of its staff is civilian. Of the 24senior-level management positions, 10 are held by army personnel, 6 bycivilians and the rest are vacant. MSB has a central workshop in Lusaka and9 provincial and 54 district workshops. (MSB's organization structure isshown in Chart III). While the central and provincial workshops handle heavyrepairs for vehicles and plant, the district workshops take care of lightrepairs and routine servicing. Major overhauls, however, are done only atthe central workshop. About 30% of the overall workload in MSB's workshopsrelate to RD vehicles and plant.

3.15 In spite of the shift to the Defense Division, MSB has not beenfunctioning satisfactorily. MSB suffers from a lack of properly qualifiedand experienced staff. A substantial number of posts in the lower grades

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(mechanical superintendents, engineering assistants) are vacant, particularlythose of mechanics. Only 151 of the 191 established positions for mechanicsare presently filled, and the number of casual daily-employed mechanics isalso below the required level. The proposed project includes technical assis-tance to help alleviate the staffing shortage and to train mechanics (para.4.12). The equipment management, maintenance and repair systems employed inMSB workshops are unsatisfactory; in addition, functional difficulties arisebecause of MSB's position outside the normal civil service lines of communi-cations. To help rectify this situation, the Government agreed that it willreorganize MSB and employ consultants, to be financed under the project, todraw up a plan of action, satisfactory to the Bank Group, to improve itsefficiency. The plan will include specific recommendations for improvingorganizational and operational procedures, and meeting staff requirements ofMSB. The employment of such consultants will be a condition of loan/crediteffectiveness. An agreement with Government was reached that the said plan ofaction will be prepared by December 31, 1978 and its implementation completedwithin another nine months. Agreement was also reached with Government thatMSB will be maintained exclusively for services related to non-military vehi-cles, equipment and plant.

D. Training

Roads Department

3.16 RD has a well-organized training school in Lusaka for lower-levelstaff (plant operators, road gangers/foremen and road superintendents), withgood lodging and boarding arrangements for 48 students at a time, althougha larger number can be accommodated if necesssary. The school is well equippedwith modern plant, equipment and tools used for practical and classroominstruction. At present, courses vary from driver education, plant and equip-ment operation, and routine servicing to courses geared toward improving thesupervisory capabilities of road gangers/foremen and superintendents. Since1971, approximately 1,200 employees have been trained-retrained (Table 4).The school's output has been sufficient to cover the Department's demand forthis category of staff, and career progress for staff trained at the schoolhas been adequate. The school has three full-time instructors, but at presentRD is unable to assign more because of its staff shortages (para. 3.10). Thisproblem will be addressed by providing technical assistance under the project(para. 4.11) to assist in improving present curricula and to teach all formsof road maintenance including those operations which can be performed by labor-intensive techniques. About 150 plant operators, 120 road gangers/foremen,and 30 road superintendents will be trained under the project under programssatisfactory to the Bank Group.

Rural Councils

3.17 NLGH operates a Training Institute in Chilimbama (20 km outsideof Lusaka) which has facilities for approximately 100 students. Most coursesare geared to secretarial and administrative personnel; there are also twofive-month courses per year for Public Works Officers. Road foremen areadmitted to the courses, but since the curriculum mainly stresses other types

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of civil works, the benefits for road foremen are limited. The Institutealso provides training for Plant Operators, but available training equipmentis mostly obsolete, and the results are not adequate. In order to improvethe quality of road maintenance staff in the Councils, Road Foremen and PlantOperators should be sent for training to RD's training school. The Governmentagreed that RC's road maintenance staff will be trained in the RD trainingschool.

Mechanical Services Branch

3.18 Although MSB currently has the necessary facilities, training equip-ment (such as models, charts, etc), and lodging arrangements for trainees atthe Central Workshop in Lusaka, its lack of qualified instructors has pre-vented any regularly organized training program for employees. In someinstances the suppliers of construction equipment have given classroom in-struction and on-the-job training in the maintenance and repair of theirequipment, but this effort is insufficient. The two instructors to beprovided under the project (para. 4.12) will be responsible for organizinga comprehensive training program, satisfactory to the Bank Group, coveringabout 300 of MSB's mechanical staff.

E. Expenditure and Financing

3.19 Total expenditure on roads increased from K 9.78 million (US$12.22million equivalent) in 1973 to K 24.13 million (US$30.16 million equivalent)in 1976 (Table 5). The amount budgeted for 1977 is K 29.87 million (US$37.34million equivalent). There has been a decline in real terms of the alloca-tion of funds for road maintenance during 1970s, and present allocations arefar below requirements. The 1976 allocation was K 5.36 million althoughK 13.75 million was requested by RD, and the amount allocated for 1977,K 6.56 million, is similarly far short of the K 18 million requested. Amajor portion of the amount allocated is spent on the wages of staff who arenot fully utilized for lack of plant and vehicles (para. 3.27). The fundsrequested vis-a-vis those allocated during the period 1972-77 are shownbelow:

K million1972 1973 1974 1975 1976 1977

Funds requested 12.25 10.25 10.50 10.00 13.75 18.00

Funds allocated 5.38 5.45 5.75 6.29 5.36 6.56

The amounts requested by RD were based on estimates for routine and periodicmaintenance of the entire road network which would have required substantialcomplementary investment in road maintenance equipment. Under the projectthe estimated recurrent expenditure at current prices (Table 6) for routinemaintenance of the entire road network and periodic maintenance of selectedroads amounts to K 9.5 million (US$12.0 million equivalent) for 1979, K 15.7million (US$19.5 million equivalent) for 1980, K 17 million (US$21.0 million

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equivalent) for 1981 and K 14.7 million (US$18.5 million equivalent) for 1982.Similarly, funds required for maintenance and repairs of equipment and MSBworkshops amount to K 1.4 million (US$1.7 million equivalent) for 1979, K 2.2million (US$2.7 million equivalent) for 1980, K 3.0 million (US$3.8 millionequivalent) for 1981 and K 3.2 million (US$4.0 million equivalent) for 1982.The Government agreed that such funds will be provided and that the Govern-ment and the Bank will annually discuss the appropriateness of maintenancefunds allocated to RD and MSB.

3.20 Road users contribute to general Government revenues through taxesand duties on vehicles, fuel, lubricants and spare parts, and through licenseand registration fees. Total revenues collected from license fees and importduties on vehicles are currently estimated to be about K 10 million annually.In addition, in 1975 total tax revenue from the sale of gas was K 19.3 millionand diesel fuel K 7.3 million. Most of the taxes on gas and some tax revenuesfrom diesel fuel are collected from road users; it is apparent that theserevenues plus those from license fees and import duties, contributed by roadusers, have covered road maintenance expenditures in the past and havecontributed to new road construction. Although road maintenance expenditureswill increase under the project (para. 3.19), revenues from road users willstill be sufficient to cover the increased costs.

F. Planning

3.21 Of the K 83.0 million allocated for roads in the SNDP, an estimatedK 80.0 million has been disbursed and a further K 15.0 million has beenallocated for ongoing projects, resulting in a K 12.0 million increase in theroad construction program. While a large part of the road construction planhas been completed, one project, the Solwezi-Mwinilunga road is still ongoing;another, the Samfya-Serenje road, is about to start; and a third, the Ndola-Kitwe road, has not yet started. Also, two roads not included in the SNDP arenow under construction, the Katete-Mozambique border road and the Chipata-Lundazi road. Most of the construction has been financed by local and Chinesefunds. Many projects were selected in accordance with Government's policy ofconnecting provincial capitals to the trunk network with paved roads. Morerecently the policy has been expanded to connect provincial capitals withone another, even though many of these roads do not appear economicallyjustified.

3.22 The TNDP is still being drafted, and the subcommittee for highwayand air transport planning has submitted its proposal to the Transport De-velopment Committee. No economic studies have been undertaken for theprojects being considered for inclusion in the highway investment program,and in the past, road construction projects have not been subject to detailedeconomic evaluation. RD, however, is now anxious to improve its planning andto expand the Planning Unit; the proposed project will assist by providing atransport economist to develop economic criteria (para. 4.11) and by financinga feasibility study for one of the roads proposed for inclusion in the TNDP(para. 4.10).

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G. Engineering and Construction

3.23 RD's Planning and Design Division carries out minor road and bridgedesign using its own staff, while major design is done by foreign consultants.Design standards, based mainly on American Association of State HighwayOfficials (AASHO) standards and adapted to local conditions, are adequate.

3.24 Major construction works are put out to contract after competitivebidding and are supervised by consultants. RD maintains a roster of contract-ing firms, local and foreign, eligible to bid for works up to a particularvalue depending upon capability and financial status. The constructionindustry is dominated by local expatriates, and few Zambian contractorsare capable of undertaking large road works. Government is, however, anxiousto increase the capacity of the construction industry, and to this end hasrequested Bank assistance to undertake a survey which would provide guidanceon how to promote a viable industry; a special study in this regard is inclu-ded in the Fourth Education Project (Credit 1356-ZA). Meanwhile, RD has takensteps to set up four force account units with construction equipment worthabout i 3 million supplied under a British grant. These units are initiallyintended for the development of certain roads as part of a Provincial FeederRoad Development Program.

H. Maintenance

3.25 RD's road maintenance organization is basically sound althoughplanning and coordination are virtually nonexistent. Routine maintenanceis carried out by zonal crews (122 zones in the whole network), each zonehaving an average of 150 km of roads. Road camps located in each zone includehousing for the workers and their families, facilities for keeping equipment,as well as small offices and stores for tools and essential materials. Eachzone is headed by a Road Ganger/Foreman, and four to five zones form a roaddistrict (29 districts in all) supervised by a Road Superintendent. The RoadSuperintendents (3 to 4 in a province) are responsible to a Road Inspectorstationed at provincial headquarters. Periodic maintenance such as regravel-ling/ resealing and heavy maintenance work is carried out through specialcrews (18 in all) under the Road Inspectors.

3.26 The quantity and quality of road maintenance is unsatisfactory andhas not kept pace with the expanding road network. There are no regularprograms for routine and periodic maintenance, and the road network hasconsequently deteriorated. No proper records are maintained of mainte-nance carried out, and data collected from PREs indicate that over 2,000 km(44%) of bitumen-surfaced roads and 4,900 km (64%) of gravelled roads havenot been resealed/regravelled for some seven years or more. The more heavilytrafficked roads show pronounced deterioration; paved roads have developedpot holes and surface cracks over long lengths while many gravel roads havecompletely lost their gravel. Maintenance of earth roads has been grosslyneglected, rendering the drainage ineffective, making roads impassableduring rains.

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3.27 RD's ability to maintain roads is primarily constrained by lackof adequate equipment and an insufficient allocation of funds. Much of theexisting plant and vehicles are old and unserviceable; of 445 pieces ofplant, 239 (54%) are over 10 years old and beyond economic repair, and of 524vehicles, 374 (71%) are over 7 years old and unserviceable. The situationhas been only partially alleviated by the provision of 121 graders for bothRD and the RCs from the Canadian Government. RD also lacks facilities forservicing or day-to-day repairs of its equipment and relies entirely on MSB.MSB's workshops suffer from lack of adequate equipment, tools and spare parts,besides a shortage of properly qualified and experienced staff and trainedmechanics (para 3.15); as a result, RD's vehicles and plant wait for monthsand, in some cases, years for repair. Consequently, equipment availabilityfor road maintenance is very low, around 25-30%.

3.28 The shortage of equipment coupled with the lack of adequate funds(para. 3419) has resulted in a substantial backlog of road maintenance.There is an urgent need for increased and improved maintenance operations,and the proposed project is designed to aid in this task (paras. 4.04 - 4.06).

4. THE PROJECT

A. Objectives

4.01 The objectives of the proposed project are to improve the mainte-nance of the rapidly deteriorating road network and plan for future extensionof the network.

B. Description

4.02 The project comprises:

(i) a program to improve maintenance of the primary andsecondary road network;

(ii) a pilot rural road maintenance program;

(iii) a feasibility study and, if justified, detailed engineer-ing of the Mansa-Kawambwa-Nchelenge road (240 km) or suchother road(s) as may be agreed between the Government andthe Bank Group; and

(iv) technical assistance to RD, MSB and MLGH for operations andtraining.

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(i) Highway Maintenance Program

4.03 The program, to be implemented over a 3-year period, will helpimprove routine maintenance of the road network (19,000 km) administered byRD as well as periodic maintenance of certain priority routes. It is notpossible to improve periodic maintenance simultaneously on all roads due tothe present large backlog of work and the limited availability of funds andmanpower. The project will cover the first phase of a periodic maintenanceprogram which will include 2,000 km of bitumen-surfaced roads and 750 km ofgravel roads that are in urgent need of resealing/regravelling; the roadswere identified by RD, with the assistance of Bank Group staff, as highpriority (Table 7). The Road Maintenance Engineers and the Transport Econo-mist included in the technical assistance for RD (para. 4.11) will review theselected routes and establish priorities. A second phase extending to therest of the network could follow in a future project. Routine maintenance ofroads will be carried out by the existing 122 zonal crews functioning under29 road districts; heavy maintenance and resealing/regravelling will be doneby the existing 18 special crews.

4.04 To assist in carrying out the program, the project includes:

- procurement of road maintenance equipment;

- rehabilitation of existing equipment;

- provision of spare parts for existing equipment;

- procurement of workshop equipment and tools as wellas training aids;

- assistance in reorganizing MSB; and

- technical assistance (see paras. 4.11 - 4.12)

Equipment

4.05 Much of RD's existing road maintenance equipment is old and un-serviceable (para. 3.27). To help correct this situation, the projectprovides for the purchase of new equipment (Table 9) and the rehabilitationof existing equipment, where economical (Table 10). The amount of equipmentto be purchased is based on the requirement of equipping present crews forroutine, heavy and periodic maintenance, determined by RD with the assist-ance of Bank Group staff. Available equipment in serviceable condition andthat which is economically repairable have been taken into account in thisassessment (Table 8). The project also provides an initial stock of spareparts for new equipment, spare parts for existing equipment, and a numberof mobile workshops, one for each province, for servicing and day-to-dayequipment repairs by RD.

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Workshops

4.06 MSB's workshops have inadequate equipment and tools for servicingand repair of vehicles and plant (para. 3.27). The project therefore providessupplementary equipment and tools (Table 11). The project also includes sometraining aids (Table 12) to assist with training of mechanics.

Consultant Services

4.07 Consultants will be engaged to assist Government in drawing up aplan for the reorganization of MSB. Terms of reference were reviewed andagreed with Government and are detailed in Annex I.

4.08 Consultants will be also engaged to prepare specifications and bid-ding documents for road maintenance and workshop equipment and to assist inbid evaluation. In order not to delay the project, assistance in reorganiz-ing MSB and the preparation of bid documents will commence before loan/crediteffectiveness.

(ii) Pilot Rural Road Maintenance Program

4.09 RCs lack both the skills and resources to adequately develop andmaintain rural roads (para. 3.13); as a result the roads are in poor shape,generally without proper formation or drainage, and receive little, if any,maintenance. Government therefore wishes to undertake a pilot program todetermine how maintenance planning and operations of RC roads can be improved.The Rural Road Maintenance Engineer included in the technical assistance(para. 4.13) will assist MLGH in selecting a suitable area, covering two RCs,in which to implement the program. A notional provision has been made in theproject for setting up a few small workshops/offices, key staff housing, roadcamps and basic equipment and tools. This pilot program will be prepared byGovernment with Bank Group assistance and expenditure from the provision willbe on the basis of agreement on the program and its implementation.

(iii) Feasibility Study and Detailed Engineering

4.10 Prorosals for the TNDP include upgrading to bituminous standardthe exiisting road between Mansa-Kawambwa and Nchelenge (240 km). Thlis isa poorly engineered gravel road, in places narrow and lacking adequate drain-age. The horizontal and vertical profile of the road is generally unsatisfac-tory. The road is important in connecting Mansa, the provincial capital, andthe rest of the country with rich fishing and agricultural areas in the north-west of the province. The Canadian International Development Agency (CIDA)will be financing a feeder road scheme to the north of Nchelenge in order tofacilitate the collection of fish in the area. The project provides fundingfor consultants to carry out a feasibility study and, if justified, detailedengineering of the road. Terms of reference for the study are detailed inAnnex II. During negotiations, the Government indicated that there was apossibility that certain other road or roads might be accorded higher priorityfor development i-n the TNDP which had not yet been finalized. In such anevent, the proiect will finance studies of such other road(s) as may be agreedbetween Government and the Bank Group.

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(iv) Technical Assistance

4.11 Quantity and quality of road maintenance is unsatisfactory in theabsence of regular maintenance programs (para. 3.26). To help correct thisproblem, the project will include three Road Maintenance Engineers to assistin planning, coordinating and implementing a maintenance program, training ofcounterparts, and improving the traffic count system. The project will alsoprovide one transport economist to assist with highway planning, projectevaluation, maintenance programming and reviewing the country's road haulagelicensing system (paras. 3.07, 3.22 and 4.03), and two training experts forRD's training school who will help alleviate the shortage of instructors(para. 3.16).

4.12 The project also includes technical assistance for MSB. Basedon present needs, 22 positions have been identified for technical assistanceto help alleviate the staffing shortage in MSB's workshops; these include 20mechanical superintendents and 2 training experts. Two of the experts willassist at the headquarters workshop; each of the nine provincial workshopswill also be assisted by two experts, one of whom will assist in the opera-tion of 5-6 district workshops supervised by each province. The two trainingexperts will develop specific courses of instruction, prepare curricula andhelp impart on-the-job training and classroom instruction to mechanics.

4.13 The project will also provide one expert for MLGH to assist withthe preparation and implementation of the Pilot Road Maintenance Program(para. 4.09).

4.14 Technical assistance to be provided in the project (Table 13) iscrucial to the project's progress and success. Government agreed that itwill employ by September 30, 1978, suitably qualified experts, under termsand conditions satisfactory to the Bank Group and in accordance with theproject time schedule. Terms of Reference for the experts are given inAnnex III. In view of the current housing shortage, Government undertookto take all reasonable action required to make available adequate livingaccommodations to experts financed under the proiect. Finally, an agreementwith Government was reached that it will prepare by September 30, 1978 aprogram satisfactory to the Bank Group for the career development of localstaff in RD, and carry out such program thereafter.

C. Cost Estimates

4.15 Total project cost, including contingencies, is estimated atUS$26.7 million. The foreign exchange component is estimated at US$22.5milllion or 84% of the total cost. No taxes and duties are involved in theproject. A breakdown of costs (in November 1977 prices) is shown below.

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ForeignLocal Foreign Total Local Foreign Total Exchange----- (K million)--- ---(US$ million)---- %

Item

a) Road Maintenance Equipmenti) Procurement of new equip-

ment including spare parts 0.61 7.71 8.32 0.76 9.64 10.40 93ii) Rehabilitation of existing

existing equipment 0.12 0.37 0.49 0.15 0.46 0.61 75iii) Spare parts for existing

equipment 0.08 0.62 0.70 0.10 0.77 0.87 88b) Workshop Equipment and

Tools, and Training Aidsi) Workshop equipment and

tools 0.08 0.90 0.98 0.10 1.12 1.22 92ii) Training aids 0.01 0.06 0.07 0.01 0.08 0.09 89c) Consultant Servicesi) Assistance in reorganiz-

ing MSB 0.03 0.11 0.14 0.04 0.14 0.18 80ii) Preparation of bid documents

for road maintenance andworkshop equipment 0.01 0.03 0.04 0.01 0.04 0.05 80

iii) Feasibility study and,if justified, detailedengineering of road(s) 0.13 0.51 0.64 0.16 0.64 0.80 80

d) Pilot Rural Road MaintenanceProgram 0.40 0.40 0.80 0.50 0.50 1.00 50

e) Technical Assistance 0.83 3.33 4.16 1.04 4.16 5.20 80Subtotal 2.30 14.04 16.34 2.87 17.55 20.42 86

f) Contingencies /ai) Physical 10% 0.23 1.40 1.63 0.29 1.75 2.04ii) Price: (17% foreign,

33% local) 0.83 2.56 3.39 1.04 3.20 4.24

Total Project Cost: 3.36 18.00 21.36 4.20 22.50 26.70 84

/a Physical contingencies, to cover unforeseen quantity increases, are equivalent to 10%of items a-e. Price contingencies to provide for anticipated cost increases overthe implementation period are equivalent to an overall 19% (17% foreign, 33% local) ofthe cost of items a-e, including physical contingencies, and were derived as follows:

1977 1978 1979 1980 1981Foreign Costs:

Items a-b 7.5% 7.5% 7.5% - -Items c-e 8% 8% 8% 8% 8%

Local Costs:Items a-e 15% 15% 15% 8% 8%

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4.16 Project costs have been arrived at as follows:

(a) Road Maintenance and Workshop Equipment, Tools, Training Aidsand Spare Parts: based on MSB estimates and recent quota-tionc by Zambian suppliers which reflect c.i.f. Lusaka pricesin November 1977, and have been found reasonable;

(b) Consultant Services: based on man-months required and on costsof such services in Zambia and other similar countries, and arefound reasonable;

(i) Assistance in Reorganizing MSB: includes 20 man-months,a net average of US$6,000 per man-month;

(ii) Preparation of Bid Documents for Road Maintenance andWorkshop Equipment, Tender Procedures and Bid Evaluation:includes 6 man-months, a net average of US$6,000per man-month;

(iii) Feasibility Study and Detailed Engineering of Mansa-Kawambwa-Nchelenge Road or the road(s) to be agreedbetween Government and the Bank Group: includes 105man-months over a 1-3/4 year period, a net averageof US$6,000 per man-month, plus needed vehicles andequipment;

(c) Technical Assistance: based on costs of such services in Zambiaand other similar countries, and are found reasonable. Costs cover1,032 man-months (Table 13) over a 3-year period, a net average ofUS$5,000 per man-month; and

(d) Rural Road Maintenance Program: a notional amount has been in-cluded for setting up a few small workshops/offices, key staffhousing, road camps, and basic equipment and tools to meet theneeds of two Rural Councils.

D. Financing

4.17 The total project cost is estimated at US$26.7 million, with a for-eign exchange component of US$22.5 million. The project will be financedby an IDA credit and a Bank loan totalling US$22.5 million (US$11.25 millioneach) which will cover 100% of the foreign exchange component of the proj-ect's cost. The Government will contribute US$4.2 million which will coverthe remaining costs of the project. The Government will also finance recur-rent expenditures needed to carry out the project, estimated at about US$65million equivalent over the project period (see Table 6, notes 5 and 6).

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E. Execution and Procurement

4.18 RD under MPW, MSB under the Defense Division of the President'soffice and MLGH, assisted by technical experts to be provided, will be res-ponsible for project execution. The Government agreed that suitably quali-fied consultants will be engaged on terms and conditions acceptable to theBank Group, to assist Government in reorganizing MSB, to prepare bid docu-ments, tender procedures and bid evaluation for road maintenance and workshopequipment, the feasibility study, and detailed engineering. Detailed engineer-ing will be undertaken if the proposed road(s) included for study is consideredeconomically justified by both the Government and the Bank Group. The projectis scheduled to begin in mid-1978 and end in mid-1982. The project implemen-tation schedule, the details of which were confirmed with Government, is shownin Chart IV. Also agreed were arrangements for quarterly reporting on progressof project implementation and the requirement of preparing an evaluationreport promptly after project completion.

4.19 The new road maintenance and workshop equipment, including a supplyof spare parts, estimated to cost about US$11.6 million equivalent, excludingcontingencies, will be procured on the basis of international competitivebidding in accordance with Bank Group Guidelines with separate contracts foreach type or group of similar types of equipment. The contracts will providefor delivery of 75% of the equipment in 1979 and that remaining in 1980. Sup-pliers of equipment not already represented in the country will be requiredto provide training of mechanics and plant operators. The suppliers will alsobe required to provide an adequate organization and maintain a reasonableinventory of spare parts in Zambia. The spare parts required for rehabilita-ting equipment and those required for keeping existing equipment in workingorder, and training aids, estimated to cost about US$1.5 million equivalent,excluding contingencies, would involve a wide range of items of various makesand are unlikely to attract international competition. These will be procured,after calling competitive quotations from established suppliers within thecountry and abroad, in accordance with Government procurement procedures whichare satisfactory. Similarly, equipment, materials and other items requiredfor the pilot rural road maintenance program are unlikely to attract inter-national competition and will be procured according to normal Government pro-cedures. The Government agreed that orders for road maintenance and workshopequipment, spare parts, tools and training aids will be placed only afterrequisite technical experts for RD and MSB are employed.

F. Disbursements

4.20 Bank Group funds will be disbursed on the following basis:

(i) 100% of foreign expenditures for road maintenanceand workshop equipment, tools, training aids and spareparts imported directly from abroad;

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(ii) 70% of expenditures on road maintenance and workshop

equipment, tools, training aids and spare parts importedand procured locally;

(iii) 50% of expenditures for Pilot Rural Road Maintenance

Program;

(iv) 80% of expenditures for consultant services and tech-nical assistance; and

(v) retroactive financing of US$180,000 will be required tomeet consultants' fees for assistance in reorganizingMSB and preparing bidding documents and evaluating bids(para. 4.08).

A schedule of estimated disbursements is shown in Table 14.

5. ECONOMIC EVALUATION

Introduction

5.01 The road network in Zambia is rapidly deteriorating because ofinadequate maintenance. This means that investment already made on theroads is being lost, particularly on bitumen roads which, if not properlymaintained, will need costly remedial work in a few years. Many of thebitumen roads serve important mining and industrial areas, and have trafficlevels in excess of 400 vpd. Traffic on these roads is projected to increase

at 7% p.a. during the next ten years. The international routes to the northand east have played a particularly vital role since the closure of theRhodesian border in 1973, as substantial volumes of imports and exports have

had to be transported by road, resulting in higher traffic levels and a higherpercentage of heavy traffic. Many gravel roads are deteriorating into earthroads because they are not being regravelled as required. This could even-tually impede economic growth since about 65% of the population live in ruralareas and depend on such roads to market their produce, purchase agriculturalinputs, and reach health, education and other government facilities.

Selection of Roads for the Project

5.02 Owing to the limited availability of local funds for road mainte-nance, it is not possible to improve maintenance simultaneously over the wholeroad network. Therefore, RD and the Bank Group have tentatively identifiedpriority roads to receive maintenance under the project, which will form partof Phase I of a maintenance program (para 4.03). Maintenance priorities havebeen identified as (i) routine maintenance of the whole road network, (ii) re-sealing of about 2,000 km of bitumen roads, and (iii) regravelling of 750 kmof heavily trafficked gravel roads (Table 7). The 2,000 km of bitumen roads

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selected have not been resealed for some seven or more years, and if reseal-ing does not take place shortly, many of the roads will need major restora-tion, involving far greater costs than those incurred for regular routine andperiodic maintenance. These roads are some of the most heavily trafficked inZambia with an average level of 380 vpd, rising to as high as 3,260 vpd. The750 km of gravel roads selected are in poor condition and are economicallyimportant since they provide access to mining and agricultural areas; theirtraffic levels, averaging 200 vpd to as high as 400 vpd on certain roads, aresome of the highest in the country for gravel roads. Many of the roads aredue for upgrading, but none of them appear to have been included in proposalsfor the TNPD (para. 3.22) since Government is concentrating on its policy ofconnecting provincial capitals with paved roads. Where RD was unable toprovide data, information on road conditions and traffic levels was obtainedfrom PREs, and substantiated whenever possible by Bank Group staff. Undertechnical assistance included in the proposed project, one of the duties ofthe transport economist and road maintenance engineers (para. 4.11) will beto review the roads included in the project, to establish priorities forexecution, and to draw-up economic criteria for levels of both routine andperiodic maintenance.

Benefits

5.03 Benefits from routine and periodic maintenance of the 2,000 km ofbitumen roads, and 750 km of gravel roads have been calculated. These bene-fits include cost savings arising from resealing the bitumen roads which,if not resealed during the project period, will need costlier treatment, suchas bituminous overlays, much earlier than if resealing takes place. Benefitshave also been calculated for the remaining 2,890 km of bitumen roads, 6,530km of gravel roads and 6,850 km of earth roads which will receive routine,but not periodic, maintenance. The main benefits estimated will accrue to(i) road users as savings in vehicle operating costs resulting from improvedroutine and periodic maintenance, and (ii) Government in the form of costsavings on bitumen roads.

5.04 No detailed study has been carried out in Zambia during the last fewyears on vehicle operating costs for different surface types of road. TheBank has therefore made estimates based on data collected from Zambia, andcomparable data from other countries. Unit user costs without the project,increasing over time because of further deterioration of the selected roads,were compared with unit user costs after improved maintenance, which shouldremain at approximately the same level during the life of the project (AnnexIV), Thus unit benefits gradually increase over the life of the project,

Economic Rate of Return

5.05 After comparing project costs and benefits, net of taxes andduties, with the continuation of presently inadequate maintenance efforts,the rate of return on the entire project is 44%. The rate of return for boththe roads included in the periodic maintenance program and the remaining roadswhich will receive only routine maintenance is also 44%. These estimates

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are based on the shadow rate of exchange of K1.0 = US1.0. Using the currentrate of exchange, KO.80 = US$1.0 the rates of return are 41% for the periodicmaintenance program and 43% for the routine maintenance program. The dif-ference of 25% between the actual and shadow exchange rate reflects theinfluence of existing tariffs, quotas and export subsidies; however, thedifference has little effect on the project's rate of return as both costsand benefits have similar foreign cost components. The first year benefit forboth the routine and periodic maintenance programs is 26%, discounted at arate of 12%.

5.06 The benefit cost ratio discounted at 12% for the entire project is1.98:1; for the periodic maintenance program, it is 1.65:1 and for routinemaintenance 2.29:1.

Sensitivity Analysis

5.07 While the project as defined is economically sound, there are tworisks which could affect its progress. One possible risk is that there willbe a delay in filling essential posts in RD and MSB, which will mean a con-sequant delay in ordering equipment and implementing the maintenance programs.Nevertheless, by delaying implementation of road maintenance, the economy willsuffer because of further deterioration of the road network and consequentincrease in vehicle operating costs, earlier failure of bitumen roads involv-ing costly remedial work, and more gravel roads reverting to earth roadstatus. Another risk is that, even if technical assistance is in place, MSB'sperformance may improve more slowly than expected. This could mean delays inrepairing RD's vehicles and equipment, forcing curtailment of the routine andperiodic maintenance programs. However, the rate of return would still be 12%for both programs even if only 45% of the periodic maintenance program and 40%of the routine maintenance is carried out during the project period; however,this is not regarded as likely. Therefore, the project is still economicallysound.

6. AGREEMENTS REACHED AND RECOMMENDATIONS

6.01 Agreement with Government was reached that:

(i) all such actions as shall be necessary will be taken toensure enforcement of the legal dimensions, axle loadsand weight limits of vehicles (para. 3.08);

(ii) vacant posts of the three Senior Executive Engineers andone Chief Materials Officer in RD will be filled bySeptember 30, 1978, by employing additional staff withappropriate qualifications and experience (para. 3.10);

(iii) to promote Zambianization a program, satisfactory to theBank Group, for the career development of local staff inRD will be prepared by September 30, 1978, and such programcarried out thereafter (paras. 3.11 and 4.14);

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(iv) a plan of action, satisfactory to the Bank Group, will bedrawn up by December 31, 1978 to reorganize MSB, such planto include specific recommendations for improving organiza-tional and operational procedures and meeting staff require-ments of MSB. Implementation of the plan will be completedwithin another nine months. Further, MSB will be maintainedexclusively for services related to non-military vehicles,equipment and plant (para. 3.15);

(v) training programs for RD and MSB will be satisfactory tothe Bank Group (paras. 3.16, 3.18);

(vi) RC's road maintenance staff will be trained in the RDtraining school (para. 3.17);

(vii) funds required for the maintenance of roads administeredby RD:, estimated at current prices to aggregate the equiva-lent of US$71 million, and those for maintenance and re-pairs of equipment and MSB workshops, estimated to aggre-gate the equivalent of US$12.2 million for the years 1979through 1982, will be provided by Government; in additionthe Government and the Bank Group will annually discuss theappropriateness of maintenance funds allocated to RD andMSB (para. 3.19);

(viii) technical assistance for RD, MSB and MLGH will be employedby September 30, 1978, under terms and conditions satis-factory to the Bank Group (para. 4.14);

(ix) all reasonable action required will be taken to makeavailable adequate living accomodations to expertsfinanced under the project (para. 4.14);

(x) the progress of project implementation will be re-ported to the Bank Group on a quarterly basis and anevaluation report will be prepared promptly afterproject comppletion (para, 4.18);

(xi) suitably qualified consultants for assistance in re-organization MSB, preparing bid documents for roadmaintenance and workshop equipment, the feasibilitystudy and detailed engineering will be engaged onterms and conditions acceptable to the Bank Group.Detailed engineering will be undertaken if the pro-posed road(s) included for study is considered eco-nomically justified by both the Government and theBank Group (para. 4.18); and

(xii) orders for road maintenance and workshop equipment,spare parts, tools and training aids will be placedonly after requisite technical experts for RD and MSBare employed (para. 4.19)e

- 25 -

6.02 Also confirmed with Government was the project implementationschedule shown in Chart IV (para. 4.18).

6.03 The employment of consultants for drawing up a plan of action toimprove the efficiency of MSB is a condition of loan/credit effect 9eness(para. 3.15).

6.04 With the agreements and under the conditions indicated above, theproject is suitable for an IDA credit and a Bank loan totalling US$22.5 mil-lion (US$11.25 million each) to the Government of Zambia. The IDA creditwould be on standard terms and the Bank loan would have a term of 20 yearsincluding 5 years of grace.

April 17, 1978

ZAMBIA

THIRD HIGHWAY PROJECT

Zambia's Imports and Exports by Routes (1970-76)('000 tons)

Lobito Dar es Salaam Mombasa Malawi 1 Mozambique Rhodesia(Rail) Road Rail Road Road/Rail Road/Rail Rail Air Other Total

Imports 118 248 18 1,293 4 1,6811970Export 187 253 6 398 4 848

Imports 269 295 29 1,048 7 1,6481971Exports 176 221 9 390 2 798

Imports 144 202 39 864 8 1,2571972Exports 170 210 7 467 854

Imports 418 200 68 109 35 25 4 8591973Export 389 284 45 41 5 49 813

Imports 438 271 86 125 29 33 9821974Exports 509 319 86 10 924

Imports 257 311 69 22 129 30 20 41 8791975Exports 309 349 46 2 66 10 782

Imports 4 248 326 22 71 58 9 21 7591976Exports 131 323 349 12 48 35 898

1/ By road through Zambia to ahd from the Malawi and Mozambique railways.

Source: MPTC and CPO, June 1977

April 1978

TABLE 2

ZAMBIA

THIRD HIGHWAY PROJECT

'.oad Network Maintained by Roads Department(Km)

A. By Administrative Classification

International Main District TotalMain (T) (M) (D)

Class I Bitumen 2,677 1,384 500 4,561

Class II Gravel 88 1,760 925 2,773

Class III Gravel 127 447 4,263 4,837

TJnclassified Earth 175 18 6,655 6,848

Total 3,067 3,609 12,343 19,019

B. By Surface Type

1972 1973 1974 1975 1976

Class I Bitumen 3,976 4,099 4,456 4,561 4,561

Class II Gravel )) 7,434 7,391 7,513 7,610 7,610

Class III Gravel )

Unclassified Earth 7,149 7,281 6,992 6,848 6,848

Total 18..559 18,771 18,961 19,019 19 019

Source: Roads Department, June 1977

April 1978

ZAMBIA

THIRD HIGHWAY PROJECT

New Registration of Motor Vehicles (1970-75)

Commercial Vehicles Vehicles 1/Passenger Vans and Construction Motor Cycles/ Total new Used

Year Cars Buses Vanettes Trucks Vehicles Scooters Vehicles Elsewhere Total

1970 5,984 54 3,743 1,470 622 1,657 13,530 1,851 15,3811971 6,165 152 5,042 2,349 854 1,618 16,180 1,389 17,569

1972 5,539 274 4,321 1,747 836 1,824 14,541 507 15,048

1973 5,221 304 3,505 1,654 707 1,313 12,704 653 13,3571974 6,667 279 4,870 2,165 1,100 1,332 16,413 596 17,0091975 5,577 331 3,786 1,175 669 1,192 12,730 435 13,165

1/ Re-registration of vehicles previously registered outside Zambia and brought into the country.

Vehicle Fleet

Passenger Vans and Construction Motor Cycles/

Year Cars Buses Vanettes Trucks Vehicles Tractors Scooters Total Trailers

1970 63,317 668 17,589 11,626 645 4,053 6,835 104,734 4,807

1971 67,173 690 19,672 12,696 713 4,804 7,589 113,337 5,4981972 78,852 769 22,402 13,850 1,019 5,381 8,889 131,16? 5,866

1973 85,315 780 25,214 14,511 1,129 5,986 9,114 142,049 6,075

1974 89,770 814 27,257 15,865 1,279 6,304 9,722 151,011 6,5191975 1/ 94,259 855 29,438 17,293 1,484 6,777 10,208 160,314 6,845

1/ Estimated

Source: Central Statistical Office, June 1977

April 1978

TABLE 4

ZAMBIA

THIRD HIGHWAY PROJECT

Roads Department Training School Courses

1971-1976

Staff Category/Course Title Total Number of Students Total1971-1972 1973-1974 1975-1976

Drivers

Vehicle Driving 9 33 71 113

Plant Operators

Basic Course 44 11 43 98Grader Operation 18 43 33 94Front-End Loader Operation 20 13 29 62Tractor Operation 28 21 22 71Plant Operator Refresher Course 46 61 33 140Maintenance of Plant and Vehicles 19 37 56

Subtotal 156 168 197 521

Road Gangers/Foremen

Road Gangers Basic 40 - - 40Road Gangers Part I 16 32 23 71Road Gangers Part II 13 30 30 73Road Gangers Advanced - 27 13 40Work Supervision 7 9 48 64Repair and Maintenance of Roads - 28 37 65Road Administration - - 48 48Plant and Vehicle Maintenance - 8 37 45Concreting - - 29 29Simple Survey - - 8 8

Subtotal 76 134 273 483Road Superintendents

Bailey Bridge Construction - 13 18 31Supervisory Course 7 9 16 32Simple Road Construction - - 10 10Plant and Vehicle Inspection 10 6 - 16

Subtotal 17 28 44 89

Total 258 363 585 1,206

Source: Roads Department Training School, June 1977

April 1978

TABLE 5

ZAMBIA

THIRD HIGHWAY PROJECT

Roads Department Highway Expenditures(K million)

Year New Construction Road Maintenance Total

1972 12.33 5.38 17.71

1973 4.33 5.45 9.78

1974 5.22 5.75 10.97

1975 14.67 6.29 20.96

1976 18.77 5.36 24.13

1977 (Authorized) 23.31 6.56 29.87

Source: Roads Department, June 1977

April 1978

3>0/304 AAL 6

TH110IH I GT[WA 2/R022E2T

K '903

03/H _____ 1979 09 '30~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~19, T.2 't at

'9.~~~~~~~~~~~~~~~~ -R -ii-1Z,i 'o 1 I .11 wy Trr T -" F.-12 1112

P.,s 6 1.2 3, 78,53 '4/1 /3 5'7 1928.3 2',02.2 ] . 8,329,9

erg 1.9 lipoelIt -1 / ~~~~~~~~~~~~~~~~~~~'73.- 3/1 3 39.7 31.,I9 32 3. - 127.6 377.5 493.1

./u/p/t-t-er - - - 1~~~~~~~~~~~ ~~~~~ ~~0.3 ~ -.93,4 325.2 72,3 125.0 175. - -- -- 6.0 121.0 712H.30

+/_le - - .1 731,- 08. i 2252 2424. - - 75.2 902.2 973.2

99/, '/93 ~~~~~~~~~29,' I1"12.094.0 - - 9. 99 llo.6 t49.l

q01ip9-5 19.01 in5.9 40.0 -- --- 10.9 39.0 40.0frusibllits 99/dy, -`060justifIed,' detIld

0t/90-c- otla-naa-0

/ 261 I90) 173. 66.7 84,0 72,7 263.3 5162.6 316. 0 134.0 194.9 i217.0 510 640

9t.990-1 load'obt,dr'99 90+ ~ ~ ~ ~ ~ ~ ~~~~~~- - - '09, 26m '0. '02 9. 400.0 - -- 08.0 409.0 890.9

ctt- hoD oosisoaaco - - '~~~~~~~~~~~~~~~20.9. i1123.2. /,?.2 /j, 12". 1,404.3 272.2 /901.,2 1,221.4 8 32.0 3,328.0 4,199.0

r9t9 a-~~~~ /197) 9.9~~i / 0.9 261, 8'? / 661 .2,/ 9 / .' 39H. air3. 27.9 199.1 133,1 -229.8 9,494.6 1,634.4

Tra -c I/ 7. 140 7. 132.7 '22.03 1387,0 22~c 3 5 322 275.1 '6 39. 7a-- 369.3 1,369.1 1,877.47_ _ 1__ _2_6 3~ _b. __7__ -13e 38 2 529, 978.H 1,309 7

j ,S. ~44.4 3i 3 0 i ___ iL__4__- _b__ - ,.I,59. 2,i. 17.998.5 _21,365.2

r09. 362/9R2N 2290l1T21R1

1,ao stf ,001.0 - 0,04, 0,395.9g - 4,096.9 4t, .06.,9 4,0446.9 3,221.9 2,721.6 11,576,7 - 15,376.7

90000, 0780-ets ast-/- 11'66.7 2,172.2 / 112,5 3 4,2,0 ,2. 12. 3,492.0 6,269.3 - .346.7 2,902.9 3,/9 ' I 05,7. 2 11,168.3, 21,733.7

.,., a/i/-Ill) 193 - - - 310,'~~~~~~~~~~~~5I 6/ 6,33. /"I 343,2 1,036.6 721.4 3 .' ,0.o 60L .2 a,,, 9 99 2,360.2 1.1. o,H.

.9 001 91,1 1' - -- .22' 6 /1,3 'A2LO~~~~~~~ 2/222,2 911.3 4,000 9 )0j,20 9 1 ,a./ 1 ,/ 3~~~~4 _ 3 33/9. foOl.' 3,134.7 29-l5,1707 .3 _ ,71' 3 .2112 ,4400o

ry prs89. 20 0' "6.0I 600.0 1,509.0 ac. 1,222.0 2,20020 036. 3, ,5 ) 9 //

9c , . 9200.2 6.360,0~~~~~~~20

IIo - -o,l/I/0I3- 0, a1 2,b 9'.0 600 150. ' 9.0 I ' 1 0 a2 fi'2 2, 12n/ /10 2 33I,0 /2o ,' 6323

taot I .' ,! )6 LI7' LO " _IP) 1 1/3 20711, aO2.

06,' - 2.0. "~~ 0 /6_.1) a!I

a a T--7aFre 80/ , lao-1 12; 1980-02 '1 /',)It. /09 /ta.19t i- _ t--

90 1/It-,, 92.0-I15 190309L, lo -; 2.4- to doa aE' 9' ,c .9c O -. 911 /' /Oa/c69jcae

-9/i 197832

TABLE 7

ZAMBIA

THIRD HIGHWAY PROJECT

Roads Included in the Project for Periodic Maintenance

The kilometerage indicated is a tentative estimate of the road lengthsthat require resealing/regravelling during project implementation.

A. Bitumen roads to be resealed

Route Length Included in the Pro2ject(km)

Livingstone - Kafue - Kafue Dam 230Rhodesian border - Tunduma (Tanzanian border) 575Kapiri Mposhi - Zaire border 175Lusaka - Mchinji 220Chingola - Solwezi 90Mbala - Mpulungu 40

Ndola - Mufulira - Kalu)ushi 60

Masaiti - Luanshya 20

Kitwe - Kalulushi 10

Lusaka - Mongu 250 1/Livingstone - Sesheke 80 1/Bitumen length of M 18, from Kalulushi 20Bitumen length of D55, from Chinsali 15Batoka - Mamba Mine 90Miscellaenous short district roads 125

Total 2,000

1/ Constructed early 1970s, but some sections will need resealing duringimplementation period of project.

B. Gravel roads to be regravelledLength Included in the Project

Route (km)

Mutanda Turnoff - Kalengwa Mine Turnoff 105Choma - Namwala 95

Kalulushi - Mutanda Turnoff 145Landless Corner - Mumbwa 110Mansa - Samfya 80

Malalika - Kabulonga 30Choma - Musutu Mission 56Monze - junction Choma - Namwala road 74

Nampunde Mine - Blue Lagoon Ranch 55

Total 750

Source: RD and mission estimates , June 1977

April 1978

ZAMBIA

THIRD HIGHWAY PROJECT

Road Maintenance Equipment Needs of Roads Department(Units)

Routine Maintenance Units Heavy Total AvailableZone District Province Maintenance Regravelling Resealing Require- in Working Economically Balance

Type of Equipment x122 x29 x9 Unit x9 Unit x4 Unit x5 ment Condition Repairable Required

Bitumen heater-sprayer (1000 gal) - - - - - 1 5 - - 5Bitumen heater-sprayer (250 gal) - - - 1 - - 9 - - 9Bitumen preheater-storage (1500 gal) - - - - 1 5 - - 5Bulldozer (D4) - - - 1 - - 9 8 1 -Bulldozer (D6/D7) - - - - 1 - 4 11 - -Chip spreader, towed - - - - - 1 5 - - 5Concrete mixer - 1 - - - - 29 33 - -Caravan trailer - - 1 - - - 9 6 - 3Front-end loader, wheeled (1.5 cyd) - 1 - 1 1 1 47 17 14 16Flat truck (7-9 ton) I _ 2 1 1 1 158 40 20 98Fuel tanker (12-1500 gallon) - - 1 - - - 9 - - 9Low loader (30 ton) - - 1 - - - 9 1 - 8Motor grader (125 hp) 1 1 2 3 - 161 180 1/ - -Mini batch heating and mixing

plant (5-7t/hr) - - - - - 1 5 - - 5Mobile workshop - - 1 - - - 9 - - 9Pneumatic tired roller (8-10 ton) - I - 1 1 1 47 15 4 28Plate Compactor - 1 - 2 2 - 55 46 - 9Pick-up truck/vannette - 1 2 1 1 1 65 54 20 -Steel wheeled vibratory roller

(8-10 ton) - - - I - - 9 5 - 4Tractor (120 hp) - - - 2 1 1 27 46 - -Trailer (4 ton) - - - 2 1 1 27 16 - 11Tipper truck (7-9 ton) - 2 2 5 7 2 159 46 - 113Water tanker (12-1500 zallon) - 1 1 2 2 - 64 8 2 54Water pump - 1 1 2 2 - 64 81 - -

1/ Includes 87 new graders purchased from Canadian commodity credit.Source: Roads Department, Mechanical Services Branch and mission estimates, June 1977.

April 1978

TABLE 9ZAMBIA

THIRD HIGHWAY PROJECT

Road Maintenance Equipment to be Purchased

Unit Cost Total CostType of Equipment Units Local Foreign Local Foreign

- ________----K '000.---_________

Bitumen heater-sprayer 5 2.5 25.0 12.5 125.0(1000 gallon )

Bitumen heater-sprayer 9 0.8 6.5 7.2 58.5(250 gallon )

Bitumen preheater-storage(1500 -allon ) 5 0.8 6.2 4.0 31.0

Chip spreau&r, towed 5 0.4 4.2 2.0 21.0Caravan trailer 3 0.7 6.5 2.1 19.5Front-end loader, wheeled

(1.5 cyd) 16 5.1 40.7 81.6 651.2Flat truck (7-9 ton) 2x2 76 0.9 16.1 68.4 1,223.6Flat truck (7-9 ton) 2x4 22 0.9 18.5 19.8 407.0Fuel tanker(12-1500 gallon ) 9 0.9 16.5 8.1 148.5Low loader (30 ton) 8 4.6 46.6 36.8 372.8Mini batch heating andmixing plant (5-7 ton/hour) 5 1.8 16.0 9.0 80.0

Mobile workshop 9 4.0 40.0 36.0 360.0Pneumatic tired roller

(8-10 ton) 28 2.6 27.3 72.8 764.4Plate Compactor 9 0.1 0.8 0.9 7.2Steel wheeled vibratoryroller (8-10 ton) 4 3.4 35.2 13.6 140.8

Trailer (4 ton) 11 2.6 - 28.6 -Tipper truck (7-9 ton) 113 0.9 15.0 101.7 1,695.0Water tanker (12-1500 54 1.0 16.8 54.0 907.2

gallon )

559.1 7,012.7Spare parts (10%) 55.9 701.3

Total 615.0 7,714.0

Source: Mechanical Services Branch and mission estimates, June 1977.

April 1978

TABLE 10

ZAMBIA

THIRD HIGHWAY 'PROJECT

Road Maintenance Equipment to be Rehabilitated

Unit Cost Total CostType of Equipment Manufacturer Units Local Foreign Local Foreign

…___________---- K '000…-----------

Bulldozer Caterpillar, D4 1 3.5 10.5 3.5 10.5Front-end loader Caterpillar 13 4.7 13.2 61.1 171.6

Volvo 1 4.7 13.2 4.7 13.2Flat truck Austin/Leyland 15 1.2 4.8 18.0 72.0Flat truck Fuso 5 1.5 5.6 7.5 28.0Pneumatic tired roller Aveling Barford 4 3.2 8.6 12.8 34.4Pick-up truck Landrover 10 0.7 1.8 7.0 18.0Vannette Bedford 7 0.5 1.3 3.5 9.1Vannette Peugeot 3 0.5 1.5 1.5 4.5Water tanker Austin 2 1.5 5.6 3.0 11.2

Total 122.6 372.5

Source: Mechanical Services Branch and Mission estimates, June 1977.

April 1978

TABLE 11

ZAMBIA Page 1 of 2

THIRD HIGHWAY PROJECT

Workshop Equipment and Tools to be Purchased

Total Foreign…__----…K '000…----

A. Servicing and Test Equipment 280.8 260.4

20 Trailer mounted servicing units20 high pressure cold water wash units10 automatic air cooled two state compressors20 automatic air cooled two state compressors,

trolley mounted20 pneuflators(electric) portable tire

inflation units, trolley mounted20 pneuflators, portable tire inflation units,

engine driven20 tire inflators with built-in air reservoir20 battery chargers and engine starters (elec.)30 auto boost battery chargers (electric)20 nozzle poptesters with adaptors10 hand operated nozzle test masters20 diesel pump attendant tool kits20 compression testers, 700 psi40 compression testers, 200 psi10 vernier calipers5 universal dial test indicators10 cylinder gauges, up to 6-1/2"5 crank shaft gauges, up to 20"10 depth gauges10 micrometers20 vacuum gauges10 power flash timing lights10 pole shoe screw-drivers10 dual scale voltmeters10 ammeter dynamo testers10 armature testing growlers10 hydroload battery testers

B. Machine shop Equipment 502.5 461.3

30 pedestal grinders30 bench grinders20 valve refacers10 cylinder block boring & polishing

machine, up to 6.6" bore20 all purpose 4 speed hand drills10 precision lathe machines, center height

230 mm, bed length 2000 mm10 heavy duty precision lathe machines

with automatic lubrication arrangement3 universal horizontal milling machines

TABLE 11Machine Shop Equipment (cont'd) Page 2 of 2

10 hydraulic presses, 50 ton capacity10 radial drilling machines, medium10 vertical drilling machines, medium10 heavy duty precision shapers10 high speed automatic cycle thread

cutting lathe10 power hacksaw machines10 pipe thread cutting machines

C. Welding Equipment 49.1 45.8

10 arc welding machines, trolley mountedCsingle phase)

10 arc welding machines, trolley mounted(three phase)

10 arc welding machines portable, enginedriven, trolley mounted

D. Tools 142.8 132.5

50 trolley jacks - long reach (5 ton)20 trolley jacks - long reach (20 ton)20 hydraulic hand jacks, bottle type

(50 ton capacity)40 hydraulic hand jacks, bottle type

(20 ton capacity)80 hydraoAic hand jacks, bottle type,

(10 ton capacity)20 chain blocks (10 ton capacity)10 chain blocks (20 ton capacity)10 multi purpose gantry hoists (8 ton capacity)10 multi purpose gantry hoists (3 ton capacity)40 hydraulic sprockets & gear pullers 9 1/2"20 hydraulic 3 arm gear pullers, 8 1/2" reach10 hydraulic 3 arm gear pullers, 6" reach10 gear puller combination sets10 sprocket removers set up to 6"10 wheel hub pullers10 brake adjusting tool kits100 mechanics' tool kits25 electricians' tool kits20 socket sets20 plant mechanics' tool kits20 panel beating auxiliary body sets

Total 975.2 900.0

Source: Mechanical Services Branch and mission estimates, June 1977.

ADril 1978

TABLE 12

ZAMBIA

THIRD HIGHWAY PROJECT

Training Aids to be Purchased

Unit Cost Total CostType Units Local Foreign Local Foreign

…K 000…----------------

Audiovisual aids 10 sets 0.1 0.8 1.0 8.0Film projector 10 0.4 4.0 4.0 40.0Slide projector 10 0.1 0.3 1.0 3.0Epidiascope 3 0.3 2.5 0.9 7.5

6.9 58.5

Source: Mechanical Services Branch and Mission estimates, June 1977

April 1978

TABLE 13

ZAMBIA

THIRD HIGHWAY PROJECT

Technical Assistance to be Provided

A. Roads Department No. Man-months

Road Maintenance Engineers 3 108

Transport Economist 1 36

Instructors 2 726 216

B. Mechanical Services Branch

Chief Mechanical Superintendents 10 360

Senior Mechanical Superintendents 10 360

Instructors 2 7222 792

C. Ministry of Local Government and Housing

Rural Road Maintenance Engineer 1 241 24

Total 29 1,032

Source: Roads Department, Mechanical Services Branch and mission estimates, June 1977.

April 1978

TABLE 14

ZAMBIA

THIRD HIGHWAY PROJECT

Estimated Schedule of Disbursements

IBRD Fiscal Year Cumulative Disbursementand End of Quarter at End of Quarter

(US$ VOOO)

1978/79

December 31, 1978 100March 31, 1979 200June 30, 1979 400

1979/80

September 30, 1979 1,000December 31, 1979 2,000March 31, 1980 6,500June 30, 1980 12,000

1980/81

September 30, 1980 14,500December 31, 1980 16,500March 31, 1981 18,000June 30, 1981 19,000

1981/82

September 30, 1981 20,000December 31, 1981 21,000March 31, 1982 22,000June 30, 1982 22,500

Source: Mission estimates

April 1978

ANNEX IPage 1 of 6

ZAMBIA

APPRAISAL OF A THIRD HIGHWAY PROJECT

Terms of Reference for a Study of MSB Reorganization

I. INTRODUCTION

II. OBJECTIVES

III. SCOPE OF-CONSULTING SERVICES

A. GeneralB. Review of Present OrganizationC. Action Program

IV. DATA, LOCAL SERVICES AND FACILITIES TO BE PROVIDED BY THE GOVERNMENT

A. DataB. Cooperation of Government AgenciesC. Facilities and Supporting Staff

V. TIME SCHEDULE FOR CONSULTING SERVICES AND REPORTS

ANNEX IPage 2 of 6

ZAMBIA

APPRAISAL OF A THIRD HIGHWAY PROJECT

Terms of Reference for a Study of MSB Reorganization

I. INTRODUCTION

1. Zambia's highway network comprises about 7,000 km of primary roads,12,000 km of secondary roads and about 16,000 km of tertiary roads. While theprimary and secondary road network is administered by the Roads Department (RD)under the Ministry of Public Works (MPW), the remainder is the responsibilityof local Rural Councils. RD's ability to maintain roads is constrained by thevery low rate, around 25-30%, of equipment availability for road maintenance.

2. - For its equipment needs, RD relies entirely on the MechanicalServices Branch (MSB) which is responsible for procurement, maintenance andrepairs of all civilian Government vehicles, equipment and plant. MSB, pre-viously under civilian administration in the former Ministry of Power, Trans-port and Works, was brought under military control in 1974 under the DefenseDivision of the President's Office. It has a central workshop at Lusaka, 9provincial workshops and 54 district workshops. While the central and provincialworkshops handle heavy repairs for vehicles and plant, the district workshopstake care of light repairs and routine servicing. Major overhauls, however, aredone only at the central workshop. About 30% of the overall workload in MSB'sworkshops relate to RD's vehicles and plant.

3. In spite of the shift to the Defense Division, MSB has not been func-tioning satisfactorily. Its limited workshop capacity and lack of adequatestaff and training facilities have resulted in low equipment availabilityfor user departments. To help rectify this situation, the Government of Zambiaintends to employ consultants to review the present MSB organization and todraw up a plan for its reorganization. The World Bank Group will participate infinancing these services.

II. OBJECTIVES

4. The purpose of the study is to assist the Government in drawing upa plan of action to improve the organizational and operational efficiencyof MSB.

ANNEX IPage 3 of 6

III. SCOPE OF CONSULTING SERVICES

A. General

5. The Consultants shall perform all services, field investigationsand organizational studies, reviews and related work, as required to attainthe objectives in Section II hereof. They shall cooperate fully with theGovernment Ministries and departments involved; the Government will providethem with the data, services and facilities outlined in Section IV hereof.The Consultants shall be solely responsible for the interpretation of all dataand for the conclusions and recommendations presented in their reports.

B. Review of Present Organization

6. To assist the Government in improving organization and operationalefficiency in MSB, the Consultants shall:

(i) review the existing organization; its line of authority;personnel structure; employment policies and training programs.This shall include a review of the general qualifications andexperience of the present managerial as well as technical staff;

(ii) review the planning, budgeting, accountancy and managementinformation systems employed;

(iii) examine the present system of equipment procurement, itsmanagement and control;

(iv) examine equipment maintenance and repair system employed;

(v) review the functional relationship at different levels between MSBand other departments involved;

(vi) inspect existing workshops, offices, stores and other relatedfacilities used for repairs and storage of equipment and spareparts; and

(vii) determine repair workload of equipment belonging to various departmentsin each of the MSB workshops.

C. Action Program

7. On the basis of the analysis of the above findings, the consultantsshall make recommendations on:

ANNEX IPage 4 of 6

(i) the establishment of an appropriate organizational framework forvarious headquarter, provincial and district workshops;

(ii) the staffing required for the proposed organization, inc)-idingjob descriptions, qualifications and educational requirements,salary grades etc., and possible sources for the recruitment ofrequired additional staff in various categories;

(iii) the setting up of a practical system of cost accounting andbudgetary control;

(iv) the establishment of an efficient system of equipment procurement,management, and of stocking, distribution and control of spareparts;

(v) the measures necessary to improve equipment maintenance and repairoperations in MSB workshops;

(vi) the measures necessary to improve coordination between userdepartments and various headquarter, provincial and districtworkshops;

(vii) the setting up of an equipment replacement program based on theneed for scrapping existing units that are beyond economic repairs;

(viii) the overall training needs of the proposed organization and theestablishment of associated facilities, including design of incentiveswhich would induce staff to remain in service after completion oftraining; and

(ix) the overall needs of workshop equipment, offices, stores and relatedfacilities.

These recommendations shall be accompanied by a detailed time schedule ofimplementation, including specific targets for meeting staff requirements.

8. The consultants shall also prepare estimates of capital and recurrentcosts, broken down into local and foreign components, involved in the proposedreorganization over the implementation period.

IV. DATA, LOCAL SERVICES AND FACILITIES TO BE PROVIDED BY GOVERNMENT

A. Data

9. The Government shall provide the Consultants with any availableinformation and studies required for the services. The Government will, in

ANNEX IPage 5 of 6

particular, allow access to MSB workshops, offices, stores and other relatedfacilities used for repairs and storage of equipment and spare parts.

B. Cooperation of Government Agencies

10. The Government shall provide for the cooperation of GovernmentMinistries, departments and other agencies as required for carrying out thework, liaise as necessary for this purpose, and shall give the Consultantsfull access to all information required for the completion of the study.

C. Facilities and Supporting Staff

11. The Consultants will make their own arrangements for all necessaryoffice and living accommodation, local transportation, supplies etc. in con-nection with the services to be provided.

V. TIME SCHEDULE FOR CONSULTING SERVICES AND REPORTS

12. The study is expected to require 8 months; the consultants shallcommence work within 30 calendar days of the effective date of the contractand shall prepare and submit the following reports (all in English) to theGovernment:

(i) Progress Report (3 copies at bi-monthly intervals) summarizingprogress made during the reporting period and total progress sincethe start of the work and tentatively summarizing the findingsand recommendations of the Consultants and identifying any majordelays or problems encountered in the work with recommendationsfor corrective action;

(ii) Inception Report (5 copies within 1 month of starting date)summarizing initial findings of the consultants and givingproposals for the conduct of the study;

(iii) Draft Final Report (5 copies within 6 months of starting date ofthe study) summarizing all work performed and the findings andrecommendations of the Consultants. This report shall includeall material to be presented in the Final Report for comment bythe Government and the Bank Group; and

(iv) Final Report (number of copies to be decided by Government, within30 days of receipt of the Government's comments on the draft FinalReport) incorporating all revisions deemed appropriate.

ANNEX IPage 6 of 6

13. Finally, 3 copies of each of the reports listed in para. 12 shall be

submitted to the International Bank for Reconstruction and Development.

April 1978

ANNEX IIPage 1 of 8

ZANBIA

THIRD HIGHWAY PROJECT

FEASIBILITY STUDY AND DETAILED ENGINEERING

OF MANSA - KAWAMBWA - NCHELENGE ROAD

Terms of Reference

I. OBJECTIVES

II. SCOPE OF CONSULTING SERVICES

A. Feasibility StudyB. Detailed Engineering

III. DATA, LOCAL SERVICES AND FACILITIES TO BE PROVIDED BY THE GOVERNMENT

A. DataB. Cooperation of Government Agencies and CounterpartsC. Facilities and Supporting Staff

IV. TIME SCHEDULE FOR CONSULTING SERVICES AND REPORTS

ANNEX IIPage 2 of 8

I. OBJECTIVES

1. The purpose of the studies is to determine the technical and eco-nomic feasibility of upgrading the existing road between Mansa and Nchelengevia Kawambwa (approximately 240 km), and to undertake detailed engineeringdepending on the results of the feasibility study.

II. SCOPE OF CONSULTING SERVICES

2. The consultants shall perform all engineering work, economicstudies, field investigations and related work, as required to attain theobjectives in Section I hereof.

3. In the conduct of their work, the consultants shall cooperatefully with the Government Ministries and Departments responsible for trans-port and development planning; the Government will provide the consultantswith the data and services outlined in Section III hereof. The consultantsshall be solely responsible, however, for the analysis and interpretationof all data received and for the conclusions and recommendations in theirreports.

A. Feasibility Study

Selection of Alignment and Design Standards

4. The consultants shall consider alternative design standards andalignments including, if desirable, relocation of sections of the routes, asa basis for the economic evaluation described in para. 9. Studies of alter-native alignments shall commence with an evaluation of the existing roadslinking the points mentioned above, and shall include the possibility ofupgrading the present road by relocating short sections and improving drain-age, widths, curvature and grades. The consultants shall first review anyavailable investigations of possible alignments and designs for the road.The consultants may recommend improvements to a specific standard over theentire road length or improvements to different standards over differentsections of roads.

5. The consultants shall prepare financial and economic cost estimatesfor the alternative alignments and geometric and pavement design standardsconsidered appropriate to the traffic forecasts. In selecting route andstandards, the consultants may base their cost estimates for road sectionson typical construction costs per km.

ANNEX IIPage 3 of 8

6. In considering standards of construction, the consultants shalltake into account the possibilities for staged construction of various sec-tions suggested by the traffic forecasts.

7. The cost estimates shall be broken down into foreign and local costcomponents and all taxes and duties shall be identified separately. Theforeign cost component shall include such items as depreciation of importedplant and equipment, imported materials and supplies, the foreign componentof wages and overheads, profits of foreign firms, locally procured goods offoreign manufccture, and the principal foreign cost elements of locallyproduced goods and materials incorporated in the works.

8. The consultants' Feasibility Report on Mansa-Kawambwa-NchelengeRoad shall include plans, typical cross-sections, and preliminary engineeringdesigns for the proposed construction, at appropriate scales.

Economic Analyses

9. The economic analyses of alternative alignments and design standardsfor the road shall include estimates of:

(i) the types and volumes of forecast traffic for each of thealternatives under paras. 4 and 5. These forecasts shallform the basis for the selection of appropriate designstandards and the estimation of potential savings invehicle operating costs. The consultants shall analyzeall existing statistical data on traffic relevant to theproposed alignments. If the consultants find that addi-tional traffic counts or origin and destination data arerequired for their study, they shall undertake the neces-sary field studies with the assistance of the Government.The forecasts shall take into account the effects ofexisting and potential traffic-generating activity andthe possibilities of traffic diversion to and from compet-ing modes;

(ii) vehicle operating costs for the types and sizes of ve-hicles forecast under (i) above for both the existingand proposed alignments and standards. Savings throughincreased speeds shall be quantified when relevant. Theseestimates, in conjunction with the forecasts of trafficwith and without the proposed construction, shall form thebasis for estimating potential vehicle operating costs andtime savings;

(iii) road maintenance costs for both existing and proposedalternatives, having regard to the respective trafficforecasts under (i) above. The estimates shall be used toassess the net savings or increases in total maintenancecosts likely to result from the proposed improvements; and

ANNEX IIPage 4 of 8

(iv) the net benefits of the proposed improvements assessedunder (1) to (iii) above. These shall be compared withthe costs determined by the methods described in para. 5,taking account of opportunities for staged construction.For each alternative, the net present value, discountedat 12%, the internal rate of return, and the first yearbenefit shall be calculated. On the basis of thesecalculations, the optimum alignment, design standards,starting date and staging schedule shall be determined.

B. Detailed Engineering

10. Depending on the results of the feasibility study, the consultantsshall undertake detailed engineering of the road, as outlined below, subjectto prior approval of the Government.

11. The consultant services in this regard shall include, but not belimited to:

(i) detailed engineering design, preparation of estimateof quantities, plans, drawings and bidding documentsfor the project suitable for international competitivebidding;

(ii) preparation of cost estimates of the proposed work witha break-down into foreign and local currency costs; and

(iii) assistance in the prequalification of contracting firmsand in the analysis and evaluation of bids, if requestedby Government.

12. The scope of the engineering investigations, design and related workshall include:

(a) Detailed Engineering

Engineering work will be carried out as necessary tocomplete the detailed engineering and preparation ofbidding documents and will include necessary topographicsurveys; location and adequate marking of center line,levelling of profile and cross sections; soils and mate-rials survey including identification and testing of soiltype, rock, etc., for estimating the types of excavationand foundations; selection of soils for borrow; the designof sub-base, base and wearing course thicknesses and thelocation and testing of sources of gravel and rock requiredfor construction. The work will also include the location

ANNEX IIPage 5 of 8

and design of drainage and other structures including thecalculation of waterways, site and foundation investiga-tions and structural design. Bidding Documents suitablefor international competitive bidding will be prepared,including corditions of contract, specifications, drawings(to an appropriate scale), bills of quantities and formsfor bid and performance bonds/bank guarantee. The designstandards u 11 be in accordance with the recommendationscontained in the feasibility report on the road as may beamended.

(b) Cost Estimates

Estimates for the cost of construction will be preparedbased on reliable and full engineering information anddetailed bills of quantities. The foreign exchange andlocal currency costs will be computed in detail for eachitem in the Bill of Quantities. The foreign exchangecompo,nent of cost shall include such items as depreciationof imported plant and equipment, imported materials andsuppl:ies, locally procured goods of foreign manufacture,wages of foreign personnel, foreign component of wagesand overheads, profits of foreign firms, and also theprincipa" foreign cost elements of locally produced goodsand materiais icorporated in the works. The local costcomponent shall identify all local costs; tax and dutyelements shall be identified separately.

(c) Prequal&ification. of Bidders

The consultants shall:

(i) prepare all necessary documents for the prequal-:Lflcation of contractors, including abbreviatedspecifications of the work to be performed,forms, invitaticns t.o prequalify, draft adver-tiseementsc etc.;

(ii) review and evaluate proposals for prequalifi-cations and prepare a list of qualified firmsh.ich should be permitted to bid.

LII. i A ,,L__OCA L SERIVICES AND FACILITIES TO BEPROVIDED BY THE GOVERNMENT

A. Data

13. The Government shall provide the consultants with:

(i) reports of previous studies on routes to link the townsmentioned above;

ANNEX IIPage 6 of 8

(ii) the Third National Development Plan;

(iii) appropriate highway traffic counts and origin and des-tination surveys;

(iv) assistance in undertaking additional highway traffic

counts and origin and destination surveys;

(v) available cost information for all modes of transports;

(vi) cost of recent road construction and maintenance for

various types of roads;

(vii) topographical, meteorological and geological maps of

area, as available; and

(viii) any available aerial photography.

B. Cooperation of Government Agencies and Counterparts

14. The Government will provide for the cooperation of Government

Ministries, departments and other agencies as required for carrying out the

work, liaison as necessary for this purpose, and will give the Consultants

full access to all information required for the completion of the studies.

15. The Government will assign suitable counterparts to work with

the key personnel of the consultants.

C. Facilities and Supporting Staff

16. The consultants will make their own arrangements for all necessary

office and living accommodation, local transportation, supplies, etc., in

connection with the services to be provided.

IV. TIME SCHEDULE FOR CONSULTING SERVICES AND REPORTS

17. The feasibility study is expected to require 9 months; the detailed

engineering, 12 months. The consultants shall prepare and submit the follow-

ing reports (all in English) to the Government:

(a) Progress Reports (3 copies at bi-monthly intervals)

summarizing progress made during the reporting period

and total progress since the start of the work and ten-

tatively summarizing the findings and recommendations

ANNEX IIPage 7 of 8

of the consultants and identifying any major delays orproblems encountered in the work with recommendationsfor corrective action;

(b) Feasibility Study

(i) Draft Final Report (5 copies within 7 monthsof Starting Date of the Study) summarizing allwork performed and the findings and recommenda-tions of the consultants. This report will bepresented including maps, plans and diagramsto be included in the Final Report.

(ii) Final Report (number of copies to be decided bythe Government, within 60 days of receipt of theGovernment's comments on the Draft Final Report)incorporating all revisions deemed appropriateby the consultants after receipt of comments onthe Draft Final Report of the study from theGovernment. Such comments will be made by theGovernment within two months of receipt of theDraft Final Report.

(c) Detailed Engineering

(i) Draft Final Report (5 copies within 10 monthsof Starting Date of the work) consisting ofroadway plan and profile drawings, drawings oftypical roadway sections, drainage plans,design of drainage and other structures, spe-cifications, bills of quantities, biddingdocuments and estimates of construction costswith an appropriate breakdown into foreign andlocal costs. The report shall be accompaniedby complete pavement design calculations andsupporting material and an outline of proceduresused and calculations made for drainage andstructural design.

(ii) Final Report (number of copies to be decided bythe Government, within 60 days of receipt of theGovernment's comments on the Draft Final Report)complete with plans and documents incorporatingall revisions considered appropriate by the con-sultants after receipt of comments from the Gov-ernment on the Draft Final Report. Such commentswill be made by the Government within two monthsof receipt of the Draft Final Report.

ANNEX IIPage 8 of 8

18. Finally, 3 copies of the reports listed in para. 17 (a) and 5copies of each of the reports outlined in para. 17 (b) and (c) shall besubmitted to the International Bank for Reconstruction and Development.

19. The originals of all design, quantity, and other calculationswould be bound and suitably indexed and submitted to the Roads Departmentof the Ministry of Public Works as parts of the Final Reports.

April 1978

ANNEX IIIPage 1 of 7

ZANBIA

THIRD HIGHWAY PROJECT

Terms of Reference for Technical Assistance

I. OBJECTIVE

The purpose of the technical assistance is to assist with improvingroad maintenance planning and operations, including equipment management andcontrol and highway planning, improve local skills in these fields, and assistwith project implementation.

II. SCOPE OF TECHNICAL ASSISTANCE

The project will provide a technical assistance team consisting of 3Road Maintenance Engineers, 2 Instructors and an Economist for the RD for aperiod of 3 years each, a team consisting of 10 Chief Mechanical Superinten-dents, 10 Senior Mechanical Superintendents and 2 Instructors for the MSB fora period of 3 years each and one Rural Road Maintenance Engineer for MLGH fora period of 2 years. The individuals will assist and advise the RD, the MSBand the MLGH in their respective fields, in addition to carrying out counter-part training of Zambian staff. The required qualifications and job descrip-tions of the individuals are described below:

INDIVIDUAL JOB DESCRIPTION

A. Road Maintenance Engineers (3)

Qualifications:

The Road Maintenance Engineers should be qualified professionalcivil engineers with 10-15 years of experience in highway planning, design,construction and maintenance of bituminous-surfaced, gravel and earth roads,including the design and use of bituminous mixes and the testing of soils andmaterials; should have experience in operational and administrative aspectsof highway maintenance in a government highway/roads organization and shouldbe conversant with unit costing and similar management systems and controlsand have suitable experience in equipment usage and control. Fluency inwritten and spoken English and the ability to communicate ideas easily arealso required.

ANNEX IIIPage 2 of 7

Duties:

The Road Maintenance Engineers will report to the Director of the RDand will assist and advise him on all aspects of highway maintenance, planningand implementation, including but not limited to:

(i) reviewing and evaluating existing inventories, recordsand other data and carrying out additional surveys andinvestigations for preparing detailed and updated in-ventories for the road network;

(ii) collecting and compiling data such as highway trafficcounts, freight moved, axle loads, etc.;

(iii) determining suitable levels of road maintenance fordifferent road conditions and traffic levels;

(iv) identifying for each road section the type and amountof work required for adequate maintenance and translatingsuch works into specific tasks in terms of routine andperiodic maintenance;

(v) together with the RD's transport economist reviewing routesincluded in the first phase of the periodic maintenance program,establishing priorities and identifying roads for inclusion infurther phases of the program;

(vi) installing a system of cost accounting procedures tofacilitate determining the cost of individual road re-habilitation and maintenance operations and the total costof maintaining individual road sections, relating coststo physical environments and traffic;

(vii) operating a highway maintenance organization, includingequipment management and control, work scheduling andbudgeting;

(viii) establishing performance standards and procedures forroutine and periodic maintenance involving an appropriatemix of labor and equipment;

(ix) directing and controlling the deployment of equipmentassigned to areas of operation;

(x) selecting key road maintenance staff, including staffconcerned with equipment operation and maintenance, fortraining at the Roads Training School; and

(xi) training counterpart staff.

Location:

The individuals will be stationed in either Lusaka or one of theprovincial headquarters depending on the area to which assigned.

ANNEX IIIPage 3 of 7

B. Road Training School Instructors (2)

Qualifications:

The Road Training School Instructors should be technologists having10 to 15 years experience in road construction and maintenance of bituminous-surfaced, gravel and earth roads; should be familiar with the selection anduse of soils and materials, and of equipment used and be familiar with methodsusing an appropriate mix of labor and equipment on such works; should have abackground in curriculum development and be able to train road maintenancepersonnel, including plant and vehicle operators, on-the-job and in theclassroom; must be fluent in English and be able to communicate with tradesmenand technicians.

Duties:

Will report to the officer-in-charge of the Road Training School andwill assist him in imparting on-the-job training and classroom instruction toroad maintenance staff, including plant and vehicle operators.

Location:

Will be stationed in Lusaka but will travel to field stations asrequired.

C. Transport Economist

Qualifications:

The Transport Economist should be a qualified economist, preferablywith a postgraduate qualification in transport economics, with 5-10 yearsexperience in transport planning, including project evaluation and justifica-tion, highway planning, road maintenance programming and traffic forecasting.Fluency in written and spoken English and the ability to communicate ideaseasily are also required.

Duties:

The Transport Economist will report to the head of the PlanningUnit of RD and will assist and advise him on all aspects of highway planningand project justification. His duties will include:

(i) setting up an effective highway planning system;

(ii) identification and evaluation of specific road projectsfor inclusion in RD's road construction program;

ANNEX IIIPage 4 of 7

(iii) developing criteria for levels of both routine and periodicmaintenance, reviewing routes included in the first phase ofthe periodic maintenance program, and identifying roads forinclusion in future phases of the program;

(iv) analysis of traffic data and forecasting traffic volumes;

(v) making recommendations on any additional staffing thatmay be necessary in order to set up an effective highwayplanning system;

(vi) reviewing the road haulage licensing system in Zambiaand making recommendations for its reform to theGovernment; and

(vii) liaising with the Ministry of Transport, Power and Com-munications in order to ensure that highway planning iscoordinated with planning of transport modes.

Locations:

Will be stationed in Lusaka but will make field trips as required.

D. Chief Mechanical Superintendents (10)

Qualifications:

The Chief Mechanical Superintendents should be qualified profes-sional mechanical engineers with 10-15 years experience in the operation andmanagement of equipment fleets, including road construction/maintenanceplant and vehicles, scaling, stocking and distribution of spares; should have

sufficient experience in workshop management in a government highway/roadsorganization and be able to carry out on-the-job training of workshop staff.Fluency in written and spoken English and the ability to communicate ideaseasily are also required.

Duties:

Will report to the officer-in-charge at the Lusaka Central Workshopor the Provincial Mechanical Engineer of MSB and will assist and advise himon all matters concerning workshop management and control, including but notlimited to:

(i) reviewing and updating of existing inventories of equip-ment and spare parts and establishing a continuous stockverification system;

(ii) preparing specifications and bid documents for procuringroad maintenance and workshop equipment, tools and spareparts, evaluating bids and inspecting equipment, spareparts and tools upon delivery;

MXNEX IIIPage 5 of 7

(iii) establishing preventive maintenance parts and componentsrequirements (maximum-minimum stock levels);

(iv) establishing an efficient system for spare parts distri-bution and control;

(v) setting up a preventive maintenance schedule for roadmaintenance equipment and instituting standard equipmentrepair and overhaul procedures; and

(vi) carrying out on-the-job training of workshops staff.

Location:

The individuals will be stationed in either Lusaka or one of theprovincial headquarters depending on the workshop to which assigned.

E. Senior Mechanical Superintendents (10)

Qualifications:

Should be technologists qualified in the mechanical field, with10-15 years experience in the operation and management of equipment fleets,including road construction/maintenance plant and vehicles and have theability to organize and direct work; must be able to train mechanics, plantand vehicle operators and have a good knowledge of written and spoken English.

Duties:

Will report to the officer-in-charge at Lusaka Central Workshop/Provincial Mechanical Engineer and will assist and advise him on all mattersconcerning management and control of district workshops in the province,including but not limited to:

(i) setting up a preventive maintenance schedule for roadmaintenance equipment and instituting standard equipmentrepair procedures;

(ii) procuring spare parts and establishing an efficientsystem for their distribution and control; and

(iii) carrying out on-the-job training of mechanics and plantand vehicle operators.

Location:

The individuals will be stationed in Lusaka or one of the provin-cial headquarters depending on the area to which assigned.

ANNEX IIIPage 6 of 7

F. MSB School Instructors (2)

Qualifications:

Should be technologists qualified in the mechanical field, with10-15 years experience in the operation and management of road construction/maintenance plant and vehicles; should have background in practical train-ing in either Government or private industry and be able to train personnelon-the-job and in classroom; must be fluent in English and be able to com-municate with tradesmen and technicians.

Duties:

Will report to the officer-in-charge Lusaka Central Workshop andwill develop specific courses of instruction, prepare curricula and imparton-the-job training and classroom instruction to mechanics.

Location:

The individuals will be stationed in Lusaka but will travel tofield stations as required.

G. Rural Road Maintenance Engineer

Qualifications:

The Rural Road Maintenance Engineer should be a qualified profes-sional engineer with 10-15 years experience in the planning, design, andconstruction of rural roads, including the testing of soils and materials;should have experience in operational and administrative aspects of ruralroad maintenance in a government highway/roads organization and should havesuitable experience in equipment usage and control. Fluency in written andspoken English and the ability to communicate ideas easily are also required.

Duties:

Will report to MLGH and will assist in the preparation and imple-mentation of a "Pilot Rural Road Maintenance Program" in the most appropriatearea to be selected, including but not limited to:

(i) establishing a system for preparing inventories of roadnetworks maintained by RCs, providing information in broadterms on geometric design standards, adequacy of drainage,soil conditions and topography;

ANNEX IIIPage 7 of 7

(ii) reviewing and developing a road maintenance set up includ-ing planning, budgeting and cost accounting procedures;

(iii) determining suitable methods of road maintenance in termsof labor and equipment combinations;

(iv) reviewing and updating of existing inventories of roadmaintenance equipment and spare parts;

(v) determining a minimum requirement for road maintenanceequipment and establishing preventive maintenance partsand components requirements;

(vi) setting up a preventive maintenance schedule for roadmaintenance equipment repair and overhaul procedures;

(vii) setting up small workshops/offices, key staff housing,road camps at selected locations, to meet RCs roadmaintenance needs;

(viii) preparing specifications and bid documents for civil workconstruction and for procuring road maintenance and workshopequipment and tools, evaluating bids and inspecting goodsupon delivery; and

(ix) carrying out on-the-job training of works foremen, me-chanics, vehicle and plant operators.

The Rural Road Maintenance Engineer shall prepare and submit thefollowing reports to the MLGH:

(i) Inception Report: (within one month of his startingwork) summarizing his initial findings and giving broadproposals for setting up the program; and

(ii) Full Report: (within four months of his starting work)stating his findings and the recommended road maintenanceprogram, together with cost estimates broken down intoforeign and local costs.

Location:

The individual will be stationed in Lusaka but will make fieldtrips as required.

April 1978

ANNEX IVPage 1 of 4

ZAMBIA

THIRD HIGHWAY PROJECT

Economic Evaluation

Length of Roads Included in ProjectTable I

Bitumen Gravel (km) Earth

Routine Maintenance Program 2,890 1/ 6,530 1/ 6,850

Periodic Maintenance Program 2,000 750 -

Footnote: _/ Includes 330 km in process of being upgraded from gravel to

bitumen standard.

Table II

Composition of Traffic

% of Traffic

Vehicles Bitumen Roads Gravel Roads Earth Roads

Passenger Car 70 70 70

7-ton truck 20 23 30

24-ton truck 10 7 -

Traffic is expected to grow at 7% p.a. on bitumen and gravel roads and 5% p.a. on

earth roads.

ANNEX IVPage 2 of 4

Table III

Vehicle Operating Costs 1/

Passenger 7-ton 24-tonCars trucks trucks

Type of Roads Condition (K per 100 vehicles/km)

Bitumen Good 10.0 33.0 62.0

Fair 10.5 34.5 64.5

Poor 11.0 36.0 67.0

Gravel Good 11.0 42.0 80.0

Fair (i)2/ 15.0 50.5 92.0

(ii)3/ 16.0 53.5 97.5

Poor 18.0 61.5 111.5

Very Poor 4/ 20.0 78.0 143.0

Earth Good 13.0 49.0

Poor 20.0 78.0

_/ Net of taxes and duties in November 1977 prices.

2/ Roads receiving adequate level of routine maintenance but noperiodic maintenance

3/ Roads receiving low level of routine maintenance and noperiodic maintenance

4/ Reverting to earth road status

Source: Mission estimates

ANNEX IVPage 3 of 4

Table IV

Economic Costs and Benefits of the Routine Maintenance Program

-- K million--------------------------------

Capital Increased 1/ Savings in VehicleYear Costs Recurrent Costs Operating Costs Net Benefits

1977 5.2 - -- (5.2)

1978 0.1 0.7 - (0.8)

1979 7.4 0.9 3.4 (4.9)

1980 3.2 1.4 5.0 0.4

1981 1.1 2.4 7.4 3.9

1982 2.6 16.9 14.3

1983 2.6 18.2 15.6

1984 2.6 19.4 16.8

1985 2.6 20.7 18.1

1986 2.6 22.2 19.6

Economic rate of return: 44%

Benefit/cost ratio 2.29: 1 3/

Shadow foreign exchange rate US$ 1.0 = K 1.0

1/ Includes increased costs for both RD and MSB

2/ Graders purchased from Canadian commodity credit

3/ Benefits include savings in vehicle operating costs and costs includecapital and increased recurrent costs.

So.uce: Mission estimates in November 1977 prices.

ANNEX IVPage 4 of 4

Table V

Economic Costs and Benefits of the Periodic Maintenance Program

------------------------------K million --------------------------------Capital Increased 1/ Savings in Vehicle Cost 2/ Net Benefits

Year Costs Recurrent Costs Operating Costs Savings

3/1977 1.0 - (1.0)

1978 0.1 - (0.1)

1979 5.0 0.8 - (5.8)

1980 2.1 5.6 0.1 (7.6)

1981 0.7 5.9 4.1 (2.5)

1982 3.1 9.0 5.9

1983 3.1 7.5 34.0 38.4

1984 3.1 5.2 34.0 36.1

1985 3.1 8.4 5e3

1986 3.1 9.0 (45.0) 4/ (39.1)

Economic rate of return: 44%

Benefit/Cost Ratio: 1.65: 1 5/

Shadow foreign exchange rate US$ 1.0 = K 1.0

1/ Includes increased costs for both RD and MSB

2/ Without the project assumed that bituminous overlay necessary for 1,600 km ofbitumen roads between 1983 and 1984.

3/ Graders purchased from Canadian commodity credit

4/ Salvage value of overlays

5/ Benefits include savings in vehicle operating costs and costs savings fromresealing bitumen roads with the Drolect a.s compared to rehabilitating themat a-later date without the project; costs include capital and increasedrecurrent costs.

Source: Mission estimates in November 1977 prices.

April 1978

ZAMBiATHIRD HIGHWAY PROJECT

Organization of Roads Department

Under Ministry of Public Works

|Permanent Secretary|

l l|artmenprtenst

|DRoadsoDepartments

Deut Director of Roads

VWorks Division| Planning and Design Division Senior Executive Engineer

| Senior Executive Enginleer | | (vacant)

Ord tinnce Planning Survey & Drawing esigns ontra ing School |SiOrd Egne euieEinneenCheeernior Executive Laboratory Maneac dmnsrto

S , Executie Executive Executive Executive Executive Executive _ Executive Executive Executive

Engineer Engineer Engineer Esgineer Engineer Engineer Engineer Engineer Engineer

Source. Roads Department, June 1977Rj._

World Bank - 17992

CHART II

ZAMBIATHIRD HIGHWAY PROJECT

Organization of Rural Councils Under Ministryof Local Government and Housing

Permanent Secretary l

|Provincial Local Governmn|| ProvinciallFinance Officer Local Government Office

Rural Councilss

Finance and General Works and DevelopmentPurposes Committee Committee

Treasury Administrativ Health Public WorksDepartment Department Department Department

Public Works OfficerAssistant Public Works

OfficerWorks ForemenPlant Operators

Source: Ministry of Local Government and Housing, June 1977

World Bank - 17993

CHART TTI

ZAMBIATHIRD HIGHWAY PROJECT

Organization of Mechanical Services Branch UnderDefense Division of President's Office

| Permianent Secretary |

I l

|Copperbelt e Luapula ll Eastern l etr otwsen CnrlLsk otenNrhr

Source: Mechanical Services Branch. June 1977. World Bank -17994

ZAMBIA

THIRD HIGHWAY PROJECT

PROJECT IMPLEMENTATION SCHEDULE

AUTHORITY 1978 1979 1980 1981 1982MAIN ACTIVITIES RESPONSIBLE J A= D J F M A M J J A S A N D J :M A M J J A S N D J F M A M J J A S O N D J F M A M J J A S O N D

A. Bank/Association Approval *

B. Signing Loan/Credit Agreement *

C. Loan/Credit Agreement Effective

D. Reorganization of MSBSelection of Consultant GovernmentPlanning Govt/Consult.Implementationi Government

E. Procurement of Road Maintenance andWorkshop Equipment, Spare Parts,

Tools, Training AidsSelection of Consultant MSBPreparation of Procurement

Documents ConsultantTender Arrangements to Award

of Contract MSB/ConsultantiDelivery Supplier

F. Rehabilitation of Equipment MSB

C. Execution of Road Maintenance RD i

H. Feasibility Study of Road(s)

Selection of Consultant RDExecution of Study Consultant

I. Detailed Engineering of Road(s) Consultant

J. Rural Road Maintenance Program MLGH

K. Technical Assistancoi

Road Maintenance Engineers (3)Instructors (2) ) RDEconomist

Chief Mechanical Superintendents (10))Senior Mechanical ) MSB

i_iSuperintendents (10)

Instructors (2)

Rural Road Maintenance Engineer NLGH

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