Document of

The 'World Bank

FOR OFFICIAL USE ONLY FILE COPY

Report No. 1984b-ZR

REPUBLIC OF ZAIRE

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

May 3, 1979

Highways Projects DivisionEastern Africa Regional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Zaire (Z)US$0.65 = z 1.00US$1.00 = Z 1.54

WEIGHTS AND MEASURES

1 meter (m) = 3.28 feet (.ft)1 kilometer (km) = 0.62 miles (mi)1 square kilometer (sq km) = 0.386 square miles (sq mi)

GLOSSARY OF ABBREVIATIONS

ADT - Average Daily TrafficBR - Bureau of RoadsCIDA - Canadian International Development AgencyFAC - Fonds d'Aide et de Cooperation (France)GDP - Gross Domestic ProductGIR - General Interest RoadsLIR - Local Interest RoadsLNTP - Laboratoire National des Travaux Publics (Soils Laboratory)MPW - Ministry of Public WorksONATRA - Office National des TransportsORT - Organization for Rehabilitation and TrainingSGMTP - Service de Gestion du Materiel des Travaux Publics

(Equipment Department)SMB - Service Mecanisation Bacs (Ferry Department)SNCZ - Societe Nationale des Chemins de Fer ZairoisUNDP - United Nations Development ProgrammeUSAID - United States Agency for International Developmentvoc - vehicle operating costsvpd - vehicles per day

REPUBLIC OF ZAIRE

FISCAL YEAR

January 1 -. December 31

FOR OFFICIAL USE ONLY

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Table of Contents

Page No.

1. THE TRANSPORT SECTOR .............................. I ....... * 1

A. Geography, Administration and Economic Activity. 1B. The Transport System .2

C. Transport Objectives and ]'lanning .5

2. THE HIGHWAY SUBSECTOR .......... ............ 6

A. The Network.. 6B. Road Use .. 8C. Administration . . 10D. Training ..................... 11E. Planning ..................... e............................ 12F. Financing ..................... 13G. Engineering ..................... 15H. Construction .................................. 16I. Road Maintenance ................ ...... 16J. Maintenance and Operation of Ferries ... ............... 18K. Past and Ongoing Assistance to the Highway Subsector 18

3. THE PROJECT ................................................ 20

A. Background .... ..................... 20B. Objectives ......................... 21C. Project Description ......................... 21D. Cost Estimates .................. ........ 22E. Financing ......................... 26F. Implementation ......................... 28G. Procurement ......................... 28H. Disbursements ......................................... 29

This report was prepared by Messrs. H. van Helden (Engineer, Consultant),M. Melegari (Engineer), P. Ludwig (Engineer), I.E. Smith (Economist), G. deSelliers (Economist, YP), Ms. P. Donovan (Economist), and Ms. P. Brereton(Editor). It is based on an appraisal mission to Zaire in July-August 1977by Messrs. Melegari and de Selliers and an updating mission in January 1978by Messrs. Ludwig and Melegari.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Page No.

4. ECONOMIC EVALUATION . ....................................... 30

A. Main Benefits and Beneficiaries ................ . 30B. Area of Influence of the Program .......... ..... 30C. Economic Analysis .............................. 31D. Risk ........................................... 35

5. AGREEMENTS REACHED AND RECOMMENDATION ...... ................ 35

ANNEXES

I. Past Bank Group-Financed Transport ProjectsII. Technical Assistance to the Bureau of RoadsIII. Geometric Highway Design Standards Adopted by

the Bureau of RoadsIV. Cost and Financing Tables for Three-Year Maintenance ProgramV. Cost and Benefit StreamsVI. Related Documents and Data Available in Project File

CHARTS

1. Organization of the Bureau of Roads (IBRD 18828)2. Project Implementation Schedule

MAP S

Map 1 (11253R1) Zaire: Transport Connections, Railways and RiversMap 2 (13367R) Zaire: Transportation Network

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

1. THE TRANSPORT SECTOR

A. Geography, Administration and Economic Activity

Topography and Climate

1.01 Zaire (2.4 million sq km), situated astride the equator, is thethird largest country in Africa. It is bordered by nine different countries,and has only a 30 km coast along the Atlantic Ocean. The country's onlydirect access to the sea is through the mouth of the Zaire River, navigable byocean-going ships for about 150 km upstream to the ocean port of Matadi.At this port, transshipment to or from rail or road is necessary becauserapids make direct transshipment between river barges and ocean-going vesselsimpossible.

1.02 The geography is dominated by the Zaire River and its tributaries,which drain virtually the whole country and provide the main traffic arteriesthrough some 15,000 km of navigable waterways. The climate varies greatlybetween the extremes of the rather dry southeastern savanna region to thedense, humid forest of the central basin. About one-half of Zaire is con-sidered arable, the most productive soils being in the eastern highlands andin alluvial lands bordering the rivers. Average annual rainfall rangesfrom 2,100 mm in the north to 1,100 mm in the south.

Population

1.03 Population was estimated at about 26 million in 1977 and has beengrowing at about 2.7% per annum. Average population density is about 11 in-habitants/sq km throughout the count:ry but its distribution is uneven. Thereare two axes of higher density: one axis extends west-east from the coastvia Kinshasa to Kasai Oriental, with an average of 25 inhabitants/sq km; thesecond axis follows the eastern lakes in a south-north direction to the Sudanborder, and has an average of 50 inhabitants/sq km. In half the country,however, the population density is less than 3 inhabitants/sq km. There hasbeen a continuing migration from rural areas to cities where about 25% ofthe total population now reside.

Administration

1.04 Administratively, the country is divided into 9 regions, includingone region for the metropolitan areet of the capital city, Kinshasa. The re-gions are further divided into 32 subregions. Because of huge distances andpoor communications, there is a neecd for administrative decentralization, but,

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because of the continuing limited administrative capabilities of the ruralpopulation, much power is still concentrated in Kinshasa where the centralGovernment is located.

Economic Activity

1.05 Central to Zaire's economy is the mining industry, which in 1976accounted for about 20% of GDP and more than two-thirds of theannual merchandise exports. Total budgetary revenues are extremely dependenton Gecamines, the Government-owned mining company, which primarily producescopper; Gecamines has contributed from 30 to 50% of t:otal budgetary revenuesannually between 1970-1975. The copper mines, located in Zaire's easternShaba and Kivu regions, are distant from either ocean, and because of the highvalue and sizeable volume of copper exports, their efficient transportation tothe sea is especially important.

1.06 Agriculture is the main occupation of about three-quarters of thepopulation, but accounted for only about 16% of GDP in 1975, and subsistencecrops represented about half of the total output. Exports of agriculturalproducts contribute only some 15% to total export earnings. The major exportcrops are palm oil, timber, coffee, and rubber. Total volume of agriculturalexports amounted to some 320,000 tons in 1973.

1.07 In Zaire, transportation conditions exert a very important influ-ence on economic activity. Because of the country's size, distances betweenthe various productive centers are long. Furthermore, Zaire's mining industry,which is the country's most important source of foreign currency earnings, islargely concentrated in the easternmost regions, some 2,600 km from thecountry's only major seaport, Matadi. Consequently, maximizing transportefficienev is and should be a major factor in the Government's strategy foreconomic dee,Lopment. -

1.08 Zaire's transport needs raise some important political considera-tions. On the one hand, Government should strive to use its own transportfacilities to the maximum extent possible both to economize on foreign ex-change spending and to minimize its vulnerability to upheavals in its nineneighboring countries. However, in order to minimize transportation distances,to accommodate peak transport volumes, or to reach certain destinations, Zairemust also use transport routes through other countries and is consequentlydependent upon developments in these countries.

B. The Transport System

General

1.09 The transport modes in Zaire are highly complementary. Zaire's15,000 km of rivers became the main transport arteries only after railwaysmade it possible to bypass rapids which impeded through-traffic. Isolated

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road systems developed in and around settlements located along the rail-river system and still function largely as feeders to and from that system.It was only in the late 1950s that an effort was made to interconnect themany road systems, largely along the country's densely populated east-westand north-south axes (para. 1.03). The highway subsector is further dis-cussed in Chapter 2.

The Rail-River System

1.10 Rail-river transport is provided on three main axes (see Map 1):

(i) the Voie Nationale, extending about 2,600 kmfrom Shaba to the Atlantic, comprising the rail-way from Lubumbashi to Ilebo (1,575 km), theriver from Ilebo to Kinshasa (650 km), and therailway from Kinshasa to Matadi (366 km). Totalfreight carried on this route is about 650,000tons annually;

(ii) the north-west axis, linking the northeasternHaute Zaire region to Kinshasa-Matadi, carryingsome 400,000 tons; and

(iii) the north-south axis, linking the above two net-works via the Kivu resgion, carrying some 60,000tons.

1.11 These axes form a network of about 5,000 km of railway and about15,000 km of navigable water with about 70 river ports. Kinshasa on theZaire River and Ilebo on the Kasai River are the main transshipment portsbetween river, rail and road traffic. Poor organization and a lack of ade-quate and modern equipment for the transshipments have increased currenttransit times from what should be about 15 days to more than 20-25 dayson the Voie Nationale and to sometimes more than a month con the north-westaxis from Kisangani to Kinshasa.

1.12 Three other major, but external, transport routes, all by rail, linkthe country's economically most important Shaba region to the sea: the BenguelaRailway through Angola to the port of Lobito; the Zambia-Tanzania railway toDar es Salaam; and the Zambia-Rhodesia railway to Beira in Mozambique. Becauseof uncertainties in Angola and Mozambique, Zaire has become more committed togreater use of the Voie Nationale, located entirely within the country's terri-tory, which presently carries about 50% of copper exports from Shaba.

1.13 River transport and port operations are the responsibility of theOffice National des Transports (ONATRA); with the exception of the Matadi-Kinshasa line operated by ONATRA, railways are handled by the Societe Nationaledes Chemins de Fer Zairois (SNCZ). Both are autonomnous state agencies underthe Ministry of Transport and Communications. Maintenance of waterways and

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the control of navigation are the responsiblity of two other Governmentagencies, the Regie des Voies Fluviales (RVF) for the inland rivers, and theRegie des Voies Maritimes (RVM) for the Zaire River estuary between Matadi andthe ocean.

1.14 ONATRA operates the river ports and a river fleet of about 265,000deadweight tons which carries about 1 million tons annually. It formerly hada de facto monopoly on river traffic, but private carriers have been increasingtheir share of transported tonnage (about 16% in 1976) due to ONATRA's pooroperational efficiency. ONATRA also operates the sea ports of Matadi and Bomaand, for the time being, the Kinshasa-Matadi railway which is intended toeventually become the responsibility of the SNCZ. Transport conditions onthis important railway line have also suffered from ONATRA's general managementand financial problems, and competing road transport has taken some trafficaway from the railway. This, together with the decrease in traffic due to theeconomic crisis which started in 1974, reduced ONATRA's railway traffic from1.63 million tons in 1974 to about 1.36 million tons in 1978. The Matadi porthandles most of Zaire's direct exports and imports. With a yearly capacity ofabout 1.5 million tons, it now handles about 1.2 million tons annually.

1.15 Except for the Kinshasa-Matadi line, railways are the responsibilityof SNCZ which operates a 3,606 km system in the southeast and central areasand a 1,021 km system in the north. Track and rolling stock are in poorcondition since SNCZ lacks the funds to undertake the necessary rehabilitation,and traffic has fallen sharply from 6.3 million tons in 1974 to 4.6 milliontons in 1977. As a result of this reduction in traffic, SNCZ's financialsituation has worsened. The organization operated at a loss of Z 6.3 millionin 1975 (in current Z), Z 26.6 million in 1976, and Z 16.4 million in 1977despite annual tariff increases. Tariffs have just been further increased byan average of 76%, and SNCZ's financial performance is expected to improve aslong as tariffs are permitted to keep pace with inflation.

Civil Aviation

1.16 Zaire has 33 airports served by scheduled domestic services linkingall major towns. Kinshasa, the main airport, is served by 13 internationalcarriers; some international services also pass through Lubumbashi. About150 additional minor airfields provide the basis for a comprehensive airwaysystem, but operations on these are hampered by the poor condition of runways,buildings and equipment, and a shortage of qualified personnel. Government-owned Air Zaire, the principal domestic carrier, also operates internationalservices.

Pipelines

1.17 Overall annual consumption of oil productS in 1975 was about1 million tons. The bulk of Zaire's petroleum, eitlner imported or locallyrefined in Moanda on the Zaire estuary, is carrie3 via Matadi to Kinshasa by

3two pipelines with annual capacities of 100,000 m and 590,000 m . Before

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the closing of the Angolan border, about 15% of the supply came via alterna-tive routes, mainly via Lobito, providing the supply for Kivu and Shabaregions. Expansion of pipeline capacity is under study, but its economicjustification will depend upon the speed of recovery of the Zairan economy;preliminary estimates have indicated that construction of a new pipeline wouldcost some US$50 million in foreign currency at 1978 prices. Owing to the lim-ited capacity of the pipelines, deliveries through neighboring countries aregaining in importance, but because of poor road conditions, distribution fromriver ports and rail heads to the more inaccessible inland areas is difficult.

C. Transport Objectives and Planning

Transportation Sector Investment Objectives

1.18 Investments in the transportation sector during the coming yearswill focus on the rehabilitation ancl maintenance of existing infrastructuresince these are expected to yield the earliest returns to the economy at thelowest cost. The Government's development policy aims at furthering thediversification of the economy to make it less dependent on copper. Thisstrategy particularly emphasizes the expansion of agriculture, both to reducedependence on food imports and to reduce the share of mineral production inGDP. Since agricultural production is diffused throughout the country (incontrast to mineral production which! is concentrated in pockets), the newemphasis on the agricultural sector implies an increasing need for and de-pendence upon road transport. Accordingly, Government has identified apriority road network of 40,000 km to be maintained by the Bureau of Roads (BR),of which 28,000 km are of particular agricultural interest. The remainderof the vast network will be maintained by local authorities as their resourcespermit.

1.19 In addition, Government aims at eliminating Zaire's dependence onneighboring countries for transport of copper and other minerals, by betterutilizing the potentially much larger capacity of the Voie Nationale. Toincrease that capacity, large investments both in the rail-river system andin port handling facilities as well as improved operations and managementwould be necessary. The sizeable investments under consideration to increasepipeline capacity (para. 1.17) would also help to reduce Zaire's dependenceon neighboring countries.

Previous and Planned Transport Investment Program

1.20 During 1972-76, Government domestic investment in the transportsector was low, averaging only US$12 million equivalent per year. The largestallocations were made for roads (50%) and air transport (21%). There was nomajor domestically financed investment in the rail-river system.

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1.21 A transport investment program for 1977-1980 was prepared andpublished in May 1977. This program, which mainly provides for rehabilitationof a minimum of existing facilities, would: improve important roads inagricultural areas; improve the Voie Nationale; faci:Litate the supply ofpetroleum products to the interior; and develop urban transport. Theseobjectives generally appear sound, particularly since they focus on rehabili-tating and catching up on neglected and deferred maintenance to serve agricul-ture. However, the program failed to establish clear priorities in the lightof continuing financial constraints.

Transport Planning Authorities

1.22 Responsibility for planning is divided between the Ministry ofFinance and the Planning Commissariat which reports to the Office of thePresident. Within the transport sector, intermodal planning is the responsi-bility of the Ministry of Transport and Communications (MTC). MTC has estab-lished a new Economic Study and Planning Group (GEEP) which, with expatriatetechnical assistance, collaborates quite closely with the planning units inthe various government transport agencies. GEEP also studies particulartransport problems in Zaire, and this year will publish its first report onannual transport statistics for 1977.

Bank Group Objectives

1.23 The Bank Group's strategy in Zaire's transport sector continues tobe to assist in the rehabilitation and improved maintenance of key transportarteries and facilities which suffered neglect during the political and eco-nomic dislocation of the 1960s and in building an effective administrationfor the transport entities. In addition, the Bank Group agrees with theGovernment's proposal to increase the capacity and better utilize the VoieNationale, where much can also be achieved by further improvement of manage-ment and operations; a railway project which would assist in the achieve-ment of these objectives was presented to the Board recently. In recogni-tion of the inadequate capacity of the fuel transport system, financing of anew Kinshasa-Matadi pipeline may also be considered once Zaire's economicrecovery gets underway. Past Bank Group-financed transport projects, otherthan those for highways, are presented in Annex I; those for highways arediscussed in Chapter 2 of this report.

2. THE HIGHWAY SUBSECTOR

A. The Network

2.01 Until August of 1978, the country's road network, comprising about145,000 km, was divided into two classes: (i) General Interest Roads (GIR),totalling 69,000 km, comprising about 2,000 km of paved roads, 2,000 km ofgravel roads, and some 65,000 kmn of dirt roads; and (ii) 76,000 km of Local

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Interest Roads (LIR), all dirt roads. This classification was only func-

tional (for administration see para. 2.09), and unrelated to the condition

of roads. On August 30, 1978, Government issued an Ordinance reclassifying

Zaire's road network into about (i) 20,000 km of National Roads (carrying

about 90% of total traffic); (ii) 40,000 km of Regional Roads (carrying about

8% of total traffic); and (iii) 85,000 km of Local Interest Roads. Since the

details of this reclassification are still being worked out by Government,

this report continues to use the o:Ld classification.

The Highway Network 1977

Area General Interest Roads (GIR)of Asphalt Local Interest Roads (LIR)-I/

Region Paved GraveillDirt Total Ferries Dirt Ferries(km2) - Motor Cable Motor Cable Canoe

Bas Zaire 64,166 600 400 2,786 3,786 7 - 4,200 - - -

(includingKinshasa)

Bandundu 295,059 220 400 11,684 12,304 19 14 13,600 12 37 1

Kasai 170,642 130 300 3,255 3,685 4 5 4,100 1 16 4

Oriental

Kasai 153,240 23 100 3,359 3,482 7 2 3,800 1 21 2

Occidental

Equateur 401,342 - 200 12,093 12,293 16 3 13,600 8 1 5

Haut Zaire, 502,242 101 200 13,261 13,562 14 12 14,900 2 5 8

Kivu 258,545 350 300 7,077 7,727 5 4 8,400 2 6 -

Shaba 489,639 503 100 11,443 12,046 5 1 13,300 2 4 4

Total 2,334,875 1,927 2,000 64,95S 68,885 77 41 76,000 28 90 24

Source: Bureau of Roads, January 1978.

2.02 Because of the numerous rivers, the ferry system is an essential

part of the road network. At present, there are 224 established ferry

sites of which 100 are on GIR and 124 on LIR. The present fleet consists

of 105 motorized ferries, 123 cable ferries and 32 canoe-raft (punt) ferries

(some sites having more than one ferry). It is intended to re-open another

86 ferry sites, where ferries formerly existed but are now out of operation.

1/ Rough estimates.

2/ Including 8 canoe-raft (punt) ferries.

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B. Road Use

Vehicle Fleet

2.03 In 1975, the last year for which data are aLvailable, the vehicle

fleet was composed of about 184,000 units; some 96,000 were passenger cars,

70,000 trucks, 3,000 buses, and 15,000 other types of vehicles. There was an

average of about 7 vehicles per 1,000 inhabitants, whidh varied among the

regions from 68 vehicles per 1,000 inhabitants in thet Kinshasa region to 1.2

in Kasai Occidentale.

2.04 As indicated by the following table, from 1969 to 1975 the average

annual growth rate of the vehicle fleet was about 9%, but from 1975 to 1978,

growth has been estimated at only 3%. This slower rate was due to the coun-

try's lack of foreign exchange which reduced vehicle imports.

PassengerYears Cars Trucks Buses Other Total

1969 60,806 38,711 1,661 9,901 111,079

1970 64,222 43,672 1,997 10,577 120,468

1971 71,675 49,884 2,291 12,097 135,947

1972 81,384 54,350 2,491 13,141 151,366

1973 77,852 66,585 2,700 12,055 159,192

1974 84,354 67,815 2,900 14,763 169,832

1975 95,978 69,811 2,988 15,191 183,968

1976 189,(00

1977 195,000

1978 201,000

Source: 1969-75: Institute de Recherche et de Statisque

1976-78: Mission estimates

Fuel Consumption

2.05 Fuel consumption increased at an average amnual rate of about 8%

from 1969 to 1974, and only 2% from 1974 to 1977. B3ecause of the energy

crisis, consumption of both gasoline and diesel oil .in 1974 remained almost

unchanged and in 1975 increased by about 5%. In 1976 and 1977, however,

consumption of gasoline did not increase (probably because of the foreign

currency shortage) whereas that of diesel oil increased by only about 1.5%

and 3% respectively.

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Fuel consumption of road vehicles

Year Gasoline Diesel Oil Total-~~~~~~~~~~~~~~~

----------------(thousand m )--------------

1969 169 80 249

1970 181 96 277

1971 196 109 305

1972 211 116 327

1973 241 130 371

1974 242 131 373

1975 252 138 390

1976 250 140 390

1977 250 144 394

Source: 1969-1976: Petro-Zaire1977 : Mission estimates

Traffic Growth

2.06 The latest complete countrywide traffic count was executed in1959. Thereafter no counts were taken until 1969, and since then traffic hasbeen counted irregularly and only on specific roads, as part of feasibilitystudies for road improvements, or more recently in the case of Bas Zaire andBandundu, as part of the Third Highway Project's maintenance and rehabili-tation pilot schemes. The only available countrywide record of traffic isthe ferries' vehicle registers, which are unreliable. However, a trafficstudy carried out in 1978 by BR under the Association's Third Highway Projectestimates that average daily traffic (ADT) on the GIR network in 1977 was asfollows:

Length % of Total(km) Road Network

- exceeding 100 vehicles per day (vpd) on 2,000 3- between 50 and 100 vpd on 3,000 4- between 10 and 49 vpd on 12,000 17- below 10 vpd on 52,000 76

Total GIR network 692000 100

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Road Transport Industry

2.07 In 1978, the road transport industry was in the hands of one largehaulage firm which operated more than 100 vehicles, and a large number ofsmall operators, many of them driver-owners of a single vehicle. In addition,some government agencies operate vehicle fleets of more than a hundred vehiclesfor carrying their own goods. Only the large company and the Governmentagencies comply with operating regulations (described in para. 2.21). Smalleroperators, who are more adaptable to the conditions prevailing in the sector,have increased their share of the road transport market. Half of all transportin Kinshasa and most transport within rural areas are undertaken by individualcarriers. Inter-urban transport, however, is still dominated by the largercompanies. The Zairanization of the transport industry in 1974 resulted in arapid deterioration of transport services. In 1976 the previous owners werereinstated and transport services have improved somewhat but have not yetreached their pre-1974 level because the lack of foreign currency prevents themodernization and proper maintenance of the vehicle fleet. The situationshould be closely monitored and, if necessary, a project to help the truckingindustry should be considered.

C. Administration

2.08 Before 1971 the responsibility for roads rested with the Departmentof Roads and Bridges in the Ministry of Public Works. The department waspoorly staffed, and the training and experience of most of its staff wereinadequate. The situation was particularly critical in the regions, and thedepartment had virtually ceased to function in many areas, resulting in theprogressive deterioration of the highway network after the country becameinde?endent .

2.09 Under the First Highway Project, consultants recommended thecreation of an autonomous agency, with its own source of funds and independentof the Ministry of Public Works, to assume responsibility for 22,000 km of themost important roads. In 1971, the Government created this agency in the formof the Bureau of Roads (BR) with responsibility for improving and constructing,maintaining and rehabilitating roads, bridges and ferries; recurrent and capi-tal funds continued to be allocated from the national budget. Initially allGIR (69,000 km) were placed under the Bureau's jurisdiction, and in 1972 itsresponsibilities were extended to include all urban roads as well. However,the Bureau's scope was again altered recently, and its responsibility waslimited to 40,000 km of priority roads.

2.10 Under the Second Highway Project, a contract was signed in 1972with the Association Internationale Zaire Routes (AIZR), a consortiumcomposed of three consulting firms, Louis Berger International (USA), BCEOM/SCET (France) and Research and Development (Belgium) to furnish technicalassistance to the Bureau; in all, 47 positions were provided. This assis-tance was supplemented by experts provided under various bilateral aid pro-grams. Despite this substantial technical assistance, progress in creating

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an effective highway administration remained slow as a result of: (i) ashortage of qualified Zairan personnel at all levels; (ii) frequent restruc-turing of BR and changes in the scope of its responsibilities; (iii) theabsence of a consistent highway sector policy and consequent lack of rationalinvestment and operational planning; (iv) insufficient funds for road re-habilitation, maintenance and administration; (v) difficult logistic problemsof road maintenance, aggravated by the delayed arrival of equipment under theSecond Highway Project; and (vi) tlae somewhat unsatisfactory performance of

consultants.

2.11 In 1974, however, the situation in the Bureau began to improve.Almost all maintenance equipment provided under the Second Highway Project hadarrived in Zaire and was being used for maintenance of 20,000 km of priorityroads. In the same year, more than 2,000 km of priority roads were rehabil-itated and more than 700 local highway personnel were trained and assumedfunctions in all branches of the Bureau. These factors, combined with thecloser project supervision made possible by the presence of the Bank's ResidentMission in Kinshasa, made it reasonable to expect continuing improvement inthe Bureau, and there was cause for optimism when the Third Highway Projectwas appraised in mid-1974. Shortly thereafter Zaire's financial crisis began,resulting in shortages of both local and foreign funds needed for the continua-tion of BR's rehabilitation and maintenance activities. In spite of this,however, maintenance has substantially improved in Bas Zaire where the ThirdHighway Project has been concentrated.

2.12 BR's present organization (see Chart 1) is appropriate and it couldmaintain the roads now under its responsibility, if the necessary operationalfunds were provided on a timely basis. However, a law, No. 78-008, issued inJanuary 1978 concerning the decentralization of Government could be interpretedto give the provincial governors authority over the management of BR. Sincethis could adversely affect the efEiciency of BR's operations, it was agreedduring negotiations that as a condition of Credit effectiveness, legislationsatisfactory to the Association would be adopted to assure that BR has fullcontrol over its assets and the management of its day-to-day operations(para. 5.02).

2.13 BR employs about 10,700 local employees: 3,600 permanent employees,of whom 250 are in managerial positions, and 7,100 paid on a daily basis.Among its staff, most of whom still need training, there are about 160 engi-

neers and 120 technicians. During implementation of the proposed project, BRwill also employ 60 expatriate experts, 50 for the maintenance and rehabilita-tion programs, 6 for the ferry program, and 4 for the National Laboratory

(AnnexII). These experts will work in either staff or advisory positions,varying from general manager to mechanic. During the next three years, asnational counterparts become available, Government intends to reduce thenumber of expatriates employed. Agreement was reached with Government thatduring project execution, appointments to senior positions in the BR will beacceptable to the Association (para. 5.01(i)).

D. Training

2.14 Considerable training of BR's highway personnel has been, and still

is, carried out under IDA-financed highway projects, other international andbilateral aid programs, and at various local institutions. Since 1972 about

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1,300 BR employees at all levels have undergone courses in highway admin-

istration and engineering, or on-the-job training for equipment operators

and mechanics. Since 1975, an important part of the technical training has

been carried out within a mechanized road maintenance training unit which was

specially created for this purpose. This unit is supervised by three foreign

experts and two local trainers who provide (i) 3 months of on-the-job training

to engineers and (ii) 9 months of' formal instruction and on-the-job training

to technical staff to be assigned to other mechanized units. Although the

training program has been quite successful, the numbers which have been

trained are still inadequate for BR's needs. Between 1978-81 it is hoped

to train a further 1,500 employees at all levels and about 40 domestic train-

ers; to do so, Government has drawn up a satisfactory training program which

will be carried out at its existing training center at Kasangulu near Kinshasa

and at two centers to be established at Kongolo and Bukavu.

E. Planning

2.15 Highway planning, including the preparation of cost estimates

and economic justification, is the responsibility of an Economic Unit which

was recently attached to BR's Construction Department. The plans prepared by

this unit are first to be submitted to the GEEP (para. 1.22) for intermodal

planning, and subsequently as part of the Transportation Plan are incorporatedinto the National Plan.

2.16 Although the above planning procedure appears satisfactory, there

are serious practical constraints, the most important being (i) the scarcity

of reliable data which renders planning by even the most qualified experts

mere guesswork and (ii) the difficulties of establishing priorities between

road maintenance and construction. The matter is further complicated by the

country's great needs compared to its limited financial and institutional

resources, and the lack of coordination among the various external sources of

financial and technical aid. Moreover, Zaire's present critical economic and

financial situation, and the consequent difficulty in determining the amount

of funds available for roads for the years to come have made budgeting and

execution of programs more and more problematic.

2.17 In view of the recently adopted policy to direct development to

the agricultural sector in particular (para. 1.18) and to improve the eco-

nomic and political integration of the country, Government is giving priority

to road transport over other transport modes, to foster internal trade and

exploitation of national resources other than mining. Government has formu-

lated a broad road maintenance and rehabilitation program for 1979-81, pre-

pared by BR in close cooperation with the Ministries of Planning and Agricul-

ture. The three-year plan provides for:

(i) a capital investment program, including:

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(a) construction of 30 bridges and procurement andinstallation of 11 motor and 54 cable ferries;

(b) rehabilitation of 1,000 km of paved roads;

(c) procurement of highway maintenance equipment;

(ii) a maintenance program for 28,000 km of roads indispensable foragricultural development and 12,000 km of the country's main roadaxes, comprising:

(a) mechanized routine and periodic maintenanceof 2,000 km of paved roads, 2,000 km of gravelroads and 18,000 km of earth roads; 1/

(b) manual routine maintenance of 18,000 km of earthroads; 1/ and

(c) maintenance of bridges and ferries.

This program, which represents the absolute minimum to serve the country'sagricultural needs is effectively the comprehensive highway maintenance planto be submitted by Government according to Section 4.04 (b) of the CreditAgreement for the Third Highway Project. The proposed project will assistGovernment in undertaking this program (para. 3.04). Furthermore, as anaid to future highway maintenance planning, Government has agreed to prepareby September 30, 1980 a plan for road improvement over the period 1982 through1986 (para. 5.01(ii)).

F. Financing

2.18 Sources of financing for the road program are:

(i) BR's own current budget for recurrent expenditures,provided by:

(a) the Ministry of Finance through monthly czontri-butions equal to 1/12 of the annual allocationprovided in the country's ordinary budget; and

(b) quarterly contributions from the fuel taxes col-lected by Petro-Zaire; and

(ii) the investment budget which reflects capital iexpendi-tures from both the Government's own and foreign aidresources.

1/ In some instances includes minimum rehabilitation so that routineand/or periodic maintenance can be undertaken.

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BR has direct control over expenditures from its current budget, and thisarrangement operates satisfactorily. However, it has no control over ex-penditure from the investment budget which is administered directly by theFinance Ministry. This has caused frequent problems for BR when contractorsare not paid on time. The financing of BR's capital costs was discussed withGovernment, and agreement was reached on improved payment procedures forcontractors engaged by BR, through the establishment of a quarterly paymentprocedure similar to that presently provided for BR's current budget (para.5.01(iii)). Agreement was also reached with Government that BR's accounts andfinancial statements for each fiscal year during the project period will beaudited by independent auditors acceptable to the Association. The financialstatements so audited will be submitted to the Association not later than sixmonths after the end of each fiscal year (para. 5.01(iv)).

2.19 Total 1974-78 expenditures on roads are shown below:

Recurrent Capital Total…--------------------…(Z million)--

Current Constant Current Constant Current ConstantPrices 1974 Prices 1/ Prices 1974 Prices1/ Prices 1974 Pricesl/

1974 16.3 16.3 9.0 9.0 25.3 25.3

1975 14.3 13.4 19.6 18.3 33.9 31.7

1976 17.6 10.4 17.0 10.1 34.6 20.5

1977 20.3 8.7 29.8 12.8 50.1 21.5

1978 33.1 10.4 20.6 6.5 53.7 16.9

1/ Based on Bank of Zaire's GDP deflator.

Sources: Bureau of Roads and Bank Estimates, 1979.

These expenditure levels were inadequate for the saitisfactory protection ofBR's investments. Between 1974 and 1977, recurrent expenditurea on roadsdeclined in real terms; although it increased slightly in 1978, it was still36% below the real value of recurrent expenditure in 1974. Real capitalexpenditure, mostly supported by foreign contributions, increased through 1975but subsequently declined. These trends are indicative of Zaire's difficulteconomic climate; the situation is even more serious when the erosion of thecountry's external purchasing power due to the declining value of its currencyis taken into consideration.

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2.20 Road users' contributions were sufficient to cover all of BR's re-current expenditures and about 30% of its capital expenditures in 1976 (seeTable). However, the real value of these contributions declined by about 65%,and in 1976 road user contributions also declined in absolute terms principal-ly because of import restrictions and a consequent drop in import duties.Government is presently considering increasing the real level of road usercontributions in order to ensure that BR receives a direct and regular sourceof finance.

Road Users Contribution (in Z million)

1974 1975 1976Current Constant , Current Constant Current ConstantPrices 1974 prices' Prices 1974 prices- Prices 1974 prices-

Vehicle import duties and related taxes 15.6 13.9 16.2 10.6 7.6 3.1

Spare parts import duties and relatedtaxes 4.7 4.2 6.5 4.3 3.7 1.5

Fuel import duties and related taxes 11.9 10.6 12.5 8.2 12.4 5.1

Fuel consumption cax 2.4 2.1 2.5 1.6 2.5 1.0

Registration tax .2 .2 .2 .1 .1

Circulation tax .9 .8 1.2 .8 .9 .4

35.7 31.8 39.1 25.6 27.2 1l.1

I/ Estimated annual fecail price inflation in Kinshasa: 1974-22%; 1975-32x; 1976-45%.

ource: Ministry of Finance. 1977.

G. Engineering

2.21 BR's Construction Department is responsible for road design, butits own staff carries out only minor work; foreign consultants are employedfor major and complex work. Geometric design standards, which were establishedunder the Second Highway Project, are adequate (Annex III). Traffic regulationspermit axle loads of up to eight tons. However, these regulations are notenforced, and frequent overloading is the case, leading to faster road dete-rioration and making road maintenance more costly. Agreement has thereforebeen reached with Government that a plan of action for the enforcement ofvehicle axle-load limits will be furnished to the Association prior toDecember 31, 1979 (para. 5.01(v)).

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2.22 The National Laboratory (Laboratoire National des Travaux Publics -LNTP) is managed and operated by the French consultants, CEBTP.1/ Its maintask is to test materials and soils for civil works, and in particular forroad construction. At present the Laboratory is focusing on research of localmaterials suitable for use in civil works, especially in r^a c - - -.

maintenance. Because of the Government's lack of foreign exchange, however,the Laboratory, whose earnings are in local currency only, could no longerprocure equipment and pay expatriate staff's salaries. Thus under the ThirdHighway Project, IDA agreed to finance some additional equipment and thecost of four expatriates through 1978. The proposed project would continuefinancing of equipment and technical assistance to permit the National Lab-oratory to carry on its important and necessary task (para. 3.06, item A.V.).

H. Construction

2.23 Foreign contractors generally carry out major construction, andsupervision is usually done by foreign consultants. Although contracts arein accordance with procurement procedures prescribed by the financing agency,administrative procedures for their execution are cumbersome, causing longdelays between award and notification of contracts and thus leading to priceincreases. Agreement was therefore reached that Government will take thenecessary steps to simplify the administrative procedures for contract notifi-cation (para. 5.01(vi)). There are about 15 foreign-owned road constructionfirms, all of them locally registered. The few domestic road builders lackthe experience, skilled staff, and capital for equipment, to execute majorroad work. BR has recently begun to successfully carry out some road improve-ment by force account, where bids by private firms were too high.

2.24 Because of a shortage of funds, there has been little scope formajor road constr;.ction work, and this situation is likely to continue forsome time. Although there is an apparent surplus of contracting capacityin Zaire, which would be expected to result in low unit prices, unit prices inthe country have remained high. This may be partly explained by the fact thatcontractors are sometimes not paid on time (para. 2.18).

I. Road Maintenance

2.25 Road maintenance declined after the country's independence in 1960.Maintenance equipment and vehicles were not available because of militaryaction, and spare parts, tools and skilled personnel were scarce. To overcomethe many organizational and financial difficulties of the first years ofindependence, the Government, with the assistance of the United States Agencyfor International Development (USAID) and the United Nations DevelopmentProgramme (UNDP), introduced the. system of "conventions routieres". Underthis arrangement, maintenance was contracted out to agricultural and industrialenterprises which had a direct interest in maintaining permanent connections

1/ CEBTP - Centre Experimental de Recherches d'Etudes du Batimentet des Travaux Publics.

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to and from markets. About 20,000 km of gravel and earth roads were thusmaintained, largely manually, at a minimum level to keep them open to traffic.The Government also occasionally engaged locally registered contractors formechanized road maintenance. But, because it was difficult to adequatelyspecify the amount of work to be done under recurrent maintenance, disputesbetween BR and the contractors frequently arose about the quality of mainten-ance obtained under the contract. When USAID discontinued its assistance in1972, the Government had begun to rebuild its own mechanized force and relatedservices, with technical assistance provided under the IDA-financed FirstHighway Project, and was able to take over maintenance from those contractorswhose performance was unsatisfactory.

2.26 In 1977, BR programmed road maintenance operations over almost50,000 km of roads, but due to its lack of funds, fuel and spare parts, onlyabout 60% of the program was carried out. BR had a similar experience in1978 when road maintenance operations were carried out on about 28,000 km ofthe network. Even so, the work accomplished by the BR in 1977 and 1978 rep-resents a substantial improvement over maintenance operations in the early1970s.

2.27 BR's maintenance and rehabilitation program particularly emphasizesa pilot scheme in Bas Zaire, and a similar scheme is being prepared forBandundu. Both schemes form part oi. the Third Highway Project. The pilotscheme in Bas Zaire covers 3,200 km, or almost 85% of the region's entireprimary network. It was designed, so that BR could acquire experience in roadmaintenance, including staff training, and then use this experience to expandits activities gradually to the other regions. Bas Zaire was selected firstbecause of (i) its high road density, (ii) social and economic importance,and (iii) easy logistics due to the proximity of the port of Matadi. There hasbeen substantial improvement in Bas Zaire's road network, although executionof the scheme, which began in mid-1975, has progressed slowly because deliveryof equipment was delayed, and Government lacked the foreign exchange for spareparts and fuel.

2.28 At present BR has about US$41 million worth of equipment, which ismaintained and repaired by the Workshop and Warehouse Department (Service deGestion du Materiel des Travaux Publics-SGMTP). Equipment is operated by 38self-contained mechanized units of which 7 are in Bas Zaire, 7 in Bandundu,and 24 in the rest of the country. The composition of the mechanized unitsis adequate in Bas Zaire, but less satisfactory in Bandundu and in the otherregions. Because of the lack of spare parts and fuel, and in the outlyingregions, logistics problems, average utilization of equipment in 1977 and 1978was extremely low. To permit BR and IDA to monitor this situation closely,appropriate targets for equipment utilization were agreed with Government(para. 5.01(vii)).

2.29 In view of Government's financial constraints, BR should not expandits organization and operations, but should concentrate on improving its effi-ciency and productivity by better utilizing what it already has. Therefore,

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the proposed highway project is confined to improving maintenance and reha-bilitation activities initiated under the previous three highway projects,rather than introducing new activities. Furthermore, in view of the contin-uous shortage of spare parts and fuel caused by a lack of foreign currency andthe resulting equipment underutilization, Government wishes to reduce mecha-nized maintenance and to improve its manual road maiintenance operations. Ithas therefore proposed that a position should be created in BR, to be filledby an expatriate provided under technical assistance or a qualified national,who would review present manual road maintenance practices, and recommendimprovements including proposals on appropriate teclnology. Agreement hasbeen reached that such an expert will be appointed by Government and financedunder the project (para. 5.01(viii)).

J. Maintenance and Operation of Ferries

2.30 Zaire's ferry system is an essential part of the road network, andits efficient operation and reliability are necessary if road traffic is tobe assured. This is particularly true for transport of agricultural products,many of which are perishables. Ferry maintenance has declined since indepen-dence, and many ferries have ceased to function. In 1971, when BR was created,only about 180 ferries out of the 330 then existing were in operation.Following the recommendations of a 1976 study carried out by the Organizationfor Rehabilitation and Training (ORT) and financed under the Third HighwayProject, BR decided to reorganize the Ferry Department in order to improveferry operations. The SMB (Service Mecanisation Bacs) was therefore estab-lished to repair, maintain and operate the ferries as well as to constructsimple cable ferries. It presently runs three shipyards and three mobilerepair units and in 1977, it repaired and maintained 60 ferries, replaced fiveengines, and constructed one tug boat. The Third Highway Project is assistingin the fino-71ing of SMB's work program, and the proposed croject v'ould continuethis assistance (para. 3.04(iii)) in order to build ll the capacity of SMB Loanable it to gradually service the entire ferry system. Tn order to monitorutilization of the ferries, agreement was reached with Government on ferryavailability targets (para. 5.01(ix)).

K. Past and Ongoing Assistance tothe Highway Subsector

Past Assistance

2.31 Since Zaire became independent in 1960, the Association has helpedfinance three highway projects. In 1969, the First Highway Project assistedthe Government to prepare a program for improvement of the highway administra-tion, and executed an emergency maintenance and rehabilitation program. The

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project cost of US$9.6 million was fi'nanced by IDA Credit 152-CK (US$6 mil-lion), UNDP (US$1.6 million), and Government (US$2 million). The Creditfinanced technical assistance to the highway administration, procurement ofequipment, spare parts, and tools, and some maintenance and rehabilitationwork. According to the Project Completion Report of this project (1976), onlypart of the expected objectives were satisfactorily achieved. The creationof the Bureau of Roads as an autonomous agency has resulted in a visibleimprovement of highway administration. Rehabilitation and maintenance work,however, did not produce the expected results mainly because of an overly-optimistic project timetable, the Bank Group's lack of knowledge of thecountry, the prevailing disorder of Zaire's administration, and its lack offamiliarity with Bank Group procedures. The project was completed in 1976,four years after the planned closing date. A Bank Group audit of this projecthas been completed which supported the conclusions of the Project CompletionReport.

2.32 The goal of the Second Highway Project, approved in 1972 and nowsubstantially completed, was to help the Government strengthen the Bureauof Roads, to train local staff, and to rehabilitate about 1,900 km of gravelroads. The Project cost, originally estimated at US$46.4 million, and laterincreased to US$59 million, was financed by IDA Credit 292-CK (US$19 million),UNDP (US$2.2 million), USAID (US$9.8 million), the Canadian InternationalDevelopment Agency (CIDA) (US$4 million), Fonds d'Aide et de Cooperation(FAC) (US$1 million) and Government (US$23 million). The IDA Credit financedtechnical assistance to BR and rehabilitation work. Further strengthening ofBR has been achieved, notwithstanding some rather unsatisfactory performanceof the consultants. Rehabilitation work, however, has progressed very slowly;work has encountered many difficulties such as cost increases, shortage ofGovernment's funds, and Zairanization of contractors. As a result, only about1,000 km were rehabilitated to planned standards; 600 km were finished tostandards lower than originally envisioned, and the remaining 300 km weredeleted from the project.

2.33 The Third Highway Project, approved in 1975, is mainly intended tocontinue strengthening BR and developing local expertise in highway adminis-tration and to rehabilitate about 600 km of gravel roads. The project alsoprovides for the implementation of a pilot scheme in the Bas Zaire regionwith later extension to the other regions (para. 2.27). The project cost,estimated at US$40.3 million, is financed by IDA Credit 536--ZR (US$26 mil-lion), UNDP (US$0.9 million), FAC (US$0.7 million), Belgium (US$0.2 million),and Government (US$12.5 million). The IDA Credit finances (i) procurement ofequipment, tools, and spare parts; (ii) road rehabilitation, including super-vision of these works; (iii) construction of workshops, (iv) technical assist-ance, and (v) feasibility studies for future road construction. The maintenanceand rehabilitation pilot scheme in Bas Zaire, started in mid-1975, progressedwell after delivery of the new equipment. The pilot scheme in Bandundubegan last year. As intended, old equipment has been transferred to Bandundufrom Bas Zaire, and an organization to maintain and repair this equipment hasbeen set up.

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2.34 As a result of Zaire's financial crisis of 1974 the Third HighwayProject, like other Bank Group-financed transport projects in Zaire, en-countered significant problems because of shortages of both local funds andforeign currency for capital and recurrent expenditures. Because of theMarch 1976 devaluation of the Zaire from Z 1.00 = US$2.00 to about US$1.16, 1/the domestic cost of all foreign currency expenditure nearly doubled, and fuelcosts increased even more. Implementation of the project, which requires alarge Government-financed current budget for maintenance and rehabilitation,placed an especially heavy burden on the Government"s overall budget. Inresponse to these unforeseen financial difficulties, project amendmentsto the Third Highway Project were proposed in the President's memorandum tothe Board dated March 20, 1978 (ref. IDA R78-25). The amendments reduce theproject component for road rehabilitation and feasibility studies and concen-trate upon financing the most essential road improvements, fuel, spare parts,and the introduction of a ferry maintenance program. The amendments alsoensure that the extension of intensive road maintenance to the Bandundu areacan proceed as envisaged. This will help to continue the gradual improvementof Zaire's highway maintenance operations.

3. THE PROJECT

A. Background

3.01 Because of Zaire's difficult financial situation which will con-tinue for se-eral years to come, and because the Government's emphasis uponagricultural development calls for a comprehensive approach to maintainingand rehabilitating the road network, it would be desirable if the FourthHighway Project could constitute the total 3-year program of BR's maintenanceand rehabilitation activities. With this approach the estimated cost of theproject would include BR's total capital and current expenditure over thisperiod, in both local and foreign currency as itemized in Annex IV.

3.02 However, the available cofinancing is inadequate to finance thefull three-year program. It is therefore proposed to finance a two and ahalf year time slice of this program, to follow on the Third Highway Projectwhich is almost completed. Due to the delay in finalizing the agreementwith Government concerning the proposed project, IDA approved an advance ofUS$1.0 million under the Project Preparation Facility to enable the technicalassistance to BR to continue without costly interruptions in the technicalassistance contract.

1/ Further devaluations have occurred since 1976; the present exchange rateis about Z 1.0 = US$0.65.

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B. Objectives

3.03 The objectives of the proposed project support Government's overalltransport objectives and are a continuation of those of the three previousIDA-financed highway projects, namely: strengthening of highway administration;improvement of road maintenance, rehabilitation and betterment work; andfurther development of local expertise and experience at a:Ll levels. Becauseof Zaire's difficult economic and financial conditions, the project emphasizesthe protection of existing investment by maintaining roads at a reasonablelevel of serviceability, as opposed to an emphasis on upgrading or expansionof the road network.

C. Project Description

3.04 On the basis of the above considerations, the proposed project isa two and a half year time slice of BR's three-year Road Maintenance andRehabilitation Program (para. 2.17), and covers:

(i) Routine and periodic maintenance and, where necessary,rehabilitation of 28,000 kma of roads indispensable foragricultural development, and of the most important12,000 km of the country's main road axes with particularfocus on the road networks of the Bas Zaire and Bandunduregions; this entails:

(a) construction and equipping of two workshops andwarehouses;

(b) procurement of equipment to permit BR tocarry out maintenance itself where main-tenance by contractor has proven to beunsatisfactory;

(c) replacement of worn-out existing equipment;

(d) procurement of spare parts and fuel forrehabilitation and maintenance work; and

(e) technical assistance to the BR and the SGMTP,and related training.

(ii) Rehabilitation and strengthening of about 800 km ofpaved roads;

(iii) Repair and replacement of ferries comprising:

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(a) the procurement of materials to construct 11motor ferries and 45 cable ferries, and pro-curement of 48 ferry motors, 51 ouI:board motors,spare parts and tools;

(b) the construction of workshops and warehouses;

(c) the construction of 11 ferry access ramps; and

(d) technical assistance to the SMB for the trainingof mechanics and SMB operators.

(iv) Strengthening and where necessary replacement of about25 bridges, which will replace inadequate ferrycrossings, or obsolete or weakened bridges.

(v) Improvement of the LNTP by providing needed equipment andtechnical assistance.

D. Cost Estimates

3.05 The total cost (capital and recurrent) of the road maintenance programamounts to about US$231.3 million equivalent, of which US$44.8 million equivalentis needed in 1979, US$95 million equivalent in 1980 and US$91.5 million equivLlentin 1981. Capital costs amount to about US$143.3 milliLon (US$136.5 million net oftaxes) with a foreign exchange cost component of aboul: US$102.7 mnillion. Recurrentcosts over the period total some US$88 million, with al foreign exchange costcomponent of about US$23.8 million.

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COST ESTIMATES

TWO AND A HALF-YEAR PROGRAM

Local Foreign Total °---------- US$ Thousands---------- Foreign

A. Capital CostI. Continuation of Maintenance and Rehabilitation Program

(i) 2 workshops and warehouses- construction 175 325 500 65

- tools 65 435 500 87

- vehicles 40 260 300 87(ii) additional equipment 975 6,525 7,500 87

(iii) equipment replacement 3,705 24,795 28,500 87(iv) spares for:

- rehabilitation work 170 1,130 1,300 87- incremental maintenance 235 1,565 1,800 87

(v) fuel for:- rehabilitation work 225 1,175 1,400 84

- incremental maintenance 305 1,595 1,900 84

(vi) materials for:- rehabilitation work 420 630 1,050 60- incremental maintenance 560 840 1,400 60

(vii) salaries for:- rehabilitation work 3,500 - 3,500 -0-- incremental maintenance 4,050 - 4,050 -0-

(viii) technical assistance and training (1,175 man-moniths) 1,295 8,655 9,950 87

Subtotal I 15,720 47,930 63,650

II. Rehabilitation of paved roads 7.245 13,455 20,700 65

III. Ferry Program(i) 11 motor ferries 2,500 4,650 7,150 65

(ii) 45 cable ferries 645 1,205 1,850 65(iii) 48 ferry motors 240 1,610 1,850 87(iv) 51 outboard motors 105 695 800 87

(v) vehicles 180 1,220 1,400 87(vi) spares, tools, radio equipment 240 1,610 1,850 87

(vii) construction of workshops and warehouses 245 455 700 65(viii) construction of 11 access ramps 1,065 1,985 3,050 65

(ix) training 105 245 350 70(x) technical assistance (88 man-months) 90 610 700 87

Subtotal III 5 14,285 19,700

IV. Bridge Program(i) steel structures 480 2,720 3,200 85

(ii) abutments 4,680 5,720 10,400 55

Subtotal IV 5&160 8,440 13,600

V. Laboratory(i) equipment 45 305 350 87

(ii) technical assistance (88 man-months) 90 610 700 87

Subtotal V 135 915 1,050

SUBTOTAL I - V 33,675 85,025 118.700

VI. Contingencies:(i) quantity 3,365 8,505 11,870

(ii) price 3,610 9,120 12,730

Subtotal VI 6,975 17,625 24,600

TOTAL CAPITAL COST 40_650 102_650 143_300 72

(NET OF TAXES) (33,826) (102,650) (136,476)

B. Recurrent CostI. Salaries 52,250 - 52,250 -0-

II. Spares 1,080 7,220 8,300 87III. Tools 260 1,740 2,000 87

IV. Fuel 1,410 7,390 8,880 84

V. Materials 1,680 2,520 4,200 60VI. Maintenance by Contractor 1.470 2,730 4.200 65

Subtotal I - VI 58,150 21,600 79,750

VII. Price Contingencies 5,985 2,215 8.200 27

TOTAL RECURRENT COST 64,135 23,815 87,950 27(NET OF TAXES) (59,947) (23,815) (83,762)

May 1979

CALCULATION OF PRICE CONTINGENCIES

---------- US$ Thousands-----------

July I-Dec. 31, 1979 1980 1981 Total

Item Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total

A. Capital Cost

I. Maintenance Program 2,930 8,920 li,850 6,395 19,505 25,900 6,395 19,505 25,900 15,720 47,930 63,650

IT. Rehabilitation Paved Roads 1,505 2,795 4,300 3,010 5,590 8,600 2,730 5,070 7,800 7,245 13,455 20,700

III. Ferry Program 1,905 5,095 7,000 2,705 7,095 9,800 805 2,095 2,900 5,415 14,285 19,700

IV. Bridge Program 1,025 1,675 2,700 2,085 3,415 5,550 2,050 3,350 5,400 5,160 8,840 13,600

V. Laboratory 30 220 250 80 520 600 25 175 200 135 915 1,050

Subtotal I - V 7,395 18,705 26,100 14,275 36,125 50,400 30195 42,200 33,675 85,025 118,700

VI. Quantity Contingency 10% 740 1,870 2,610 1,425 3,615 5.040 1,200 3,020 4,220 3,365 8,505 11,870

VII. Price Contingency 165 425 590 1.295 ' A 4,560 92150 5,430 7,580 3,610 9,120 12,730

TOTAL CAPITAL COST 8300 02 16, 43,005 15,355 40,650 102,650 143300

B. Recurrent Cost

I. Salaries 10,000 -0- 10,000 21,000 -0- 21,000 21,250 -0- 21,250 52,250 -0- 52,250

II. Spares 195 1,305 1,500 425 2,825 3,250 460 3,090 3,550 1,080 7,220 8,300

ITI. Tools 60 390 450 110 740 850 90 610 700 260 1,740 2,000

IV. Fuel 255 1,345 1,600 610 3,190 3,800 545 2,855 3,400 1,410 7,390 8,800

V. Materials 300 450 750 700 1,050 1,750 680 1,020 1,700 1,680 2,520 4,200

VI. Maintenanice by Contractor 300 550 850 610 1,140 1,750 560 1,040 1,600 2,730 4,200

Subtotal I - VI 11,110 4,040 15,150 23,455 8,945 32,400 23.585 8.615 32,200 58;150 21,6nn 79,750

VII. Price Contingency 220 80 300 1,935 715 2,650 3,830 1,420 5,250 5,985 2,21 8,200

TOTAL RECURRENT COST 11,330 4,120 15,450 25,390 9,660 35,050 27,415 10,035 37,450 64,135 23,815

Note: This table is based on the document Road Maintenance and Rehabilitation Program of Bureau of Roads for 1979-1981," prepared by BR in December 977. The following

modifications have been made: (i) the BR January 1977 prices have been updated to June 1979 prices by increasing the foreign currency componenr by 30% and the

local currency by 60% which correspond to the amount of inflation experienced by BR for its specific activities; (ii) the percentages of foreig cost have been

increased to show the foreign cost to the Zaire economy instead of to the BR only; (iii) the 10% quantity contingency included in the BR progra is shown separately

for the capital cost; and (iv) for future years, the same inflation percentages for local and foreign currency have been used, assuming that th depreciation rate

of the zaire will closely follow the local inflation rate. The following average percentages were applied to all project components:

1978 1979 1980 1981

8% 8% 8,, 7%

May 1979

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3.06 Cost estimates are based on estimates provided by BR and are givenin June 1979 prices. A 10% physical contingency included in BR's capitalcost program is shown separately in the cost table. The cost estimatesprepared by BR have been examined by the mission and found to be realistic.They are derived as follows:

A. Capital Investment:

I. Maintenance and Rehabilitation Program

(i) Construction of two workshops and warehouses:estimates of local, foreign and total costs arebased on unit prices for similar work in Zaire;

(ii) procurement of equipment, machine/hand tools,vehicles, spare parts, and fuel: estimatesare based on recent bid prices. The foreigncomponent is based on the c.i.f. cost (Matadi),and the local component includes local handlingand transport costs; and

(iii) technical assistance: estimates are basedon actual costs for the same services renderedunder the Third Highway Project. The averagebilling rate, estimated at US$8,100 per man-month, including salary, housing, internal andexternal transport, and insurance, is reasonable.

II. Rehabilitation of about 800 km of Paved Roads

Estimates are based on quantities resulting from astudy carried out by the LNTP and on unit-pricesreceived on recent bids.

III. Ferry Program

(i) Construction of ferries: procurement ofengines, steel plates, angle iron, timnber,materials for assembling, and labor:estimates are based on unit costs and quanti-ties developed by BR's Ferry Section, whichtook into consideration current prices ofmaterials and labor and recent bids. Theforeign component of all items, except forlabor and for timber produced locally, isbased on the c.i.f. cost (Matadi);

(ii) Procurement of outboard motors, engines, spareparts, machines and tools, vehicles, radioequipment: estimates are based on unitprices quoted by suppliers in Kinshasa, andon recent bids. The foreign componentis based on the c.i.f. cost (Matadi), and thelocal component includes handling and trans-port costs;

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(iii) Construction of workshops and warehouses:

estimates of local, foreign and total costs

are based on prices quoted by local builders

for similar work; and

(iv) Technical Assistance: estimates are based

on actual costs for the same services rendered

under the Third Highway Project.

IV. Bridge Program

(i) Estimates for bridge elements are based on

recent supplier quotations. The foreign

cost element covers c.i.f. cost to Matadi; the

local cost element covers local transport and

assemblage.

(ii) estimates for abutments are based on approximate quantities

and on unit prices received on recent bids.

V. Laboratory

(i) Procurement of equipment: estimates are based

on unit prices quoted by suppliers in Kinshasa,

and on recent bids. The foreign component is

based on the c.i.f. cost (Matadi), and the local

component includes local handling and transport

costs; and

(ii) Technical Assistance: estimates are based

on actual costs for the same services renderedunn.er the Third Highway Project.

R.RecT_rrent EYxtend:ture

Estimates are based on an assessment of quantities of materials,

fuel, etc. required for the maintenance program. Unit prices are

derived from recent supplier quotations, and, in the case of

salaries, on BR's actual salaries paid in 1977 and updated to 1979.

The cost of contractor maintenance is based on contractor rates

updated to 1979.

E. Financing

3.07 The financing plan for the project is shown on page 27. The total

foreign currency cost of the project is US$126.5 million equivalent. In

addition to the proposed IDA Credit of US$26.0 million, and the US$0.6 million

included in Credit 660-ZR (Cotton Rehabilitation Program, 1976), cofinancing

totalling US$82.7 million is potentially available from the Saudi Fund (US$33.9

million), KfW (US$23.6 million), the EEC Special Action Fund (US$15.5 million),

CIDA (US$6.5 million), ODM (US$2.2 million), USAID (US$0.7 million), FAC

(US$0.2 million) and AGCD (US$0.1 million). 1/ The co-financing from all

1/ KfW - Kreditanstaltfuer Wiederaufbau; EEC- European Economic Community;

ODM - Overseas Development Ministry (UK); and AGCD - Agence Generale de

la Cooperation au Developpement (Belgium).

FINANCING PLAN FOR TWO AND A HALF-YEAR PROGRAM 1979-81 OF BUTREAU OF ROARS

FUNDS PRESENTLY CONMMTTED OR AGREES TN PRINCIPLE

Zaire IDA EEC USAD5 CIDA ODM tWFAT/dASCS Sadi TotalL F T I F I T F T L FL F FTIF F L F T L F1 T L F T

I. Maintenance. Progra(i) Workshops 0.4 - 0.4 - 0.9 0.9- 0.2 0.2 0.4 1.1 1.5(ii) Additionl iqaipasent 1.1 - 1.1 - 0.6 0.6 - 0.8 0.8 - 0.9 0.0 1.0 1.5- 4.6 4.6 1.1 8.0 9.1(iii) Equipment Renewa 4.5 - 4.5 -- 2.4 2.4- 6.0 6.0- 7.7 7.7- 13.9 13.9 4.5 30.0 34.5(iv) Spore -1.7 5.4 7.1 - 1.2 1.2 - 0.5 0.5 - 4.1 4.1 1.7 11.2 4.

()Tools 0.3 1,4 1.7 - 0.5~ 0.5 0.3 1.9 2.2(vi) Pad 2.2 7.2 9.4 - 3.3 3.3- 1.0 1.0 2.2 11.5 13.7(vii) Materials 3.0 3.4 6.4 - 1.1 1.1 3.0 4.3 7.5(viii) Salaries 66.7 - 66.7 66.7 - 66.7(i.) Technical Assintanc 1.6 1.2 2.68 3.4 3.4 - 0.0 0.0- 0.5 0.) 0.3 0.3 1.6 10.4 12.0

-o -ftnane by lontrarra- 1.5 3.7 4.7 15 32 4.7

IT. Paved Roads 4.3 - 4.3 - 3.0 3.9 4.5 - 4.5- 4.6 4.6 - 7.7 7.7 8.8 16.2 25.0

III. Forty Froero(i) Mater Feries 3.1 0.3 3.4 - 5.2 5.2 3.1 5.5 8.6(ii) Cable Ferries 0.6 0.1 0.09 1.3 1.3 0.8 1.4 2.2

(iii) Ferry Motors 0.3 - 0.3 0.5 0.3 1.4 0.4 0.3 1.9 2.2(iv) Ostboar.d Mo~tors 0.1 0.1 0.2 - 0.6 0.8 0.1 0.9 1.0(v) ipore, Tools 0.8 - 0.8 - 2.1 2.1- 0.1 0.1- 1.8 1.8 0.8 4.0 4.8(vi) Access Ramps 1.3 - 1.3 - 2.4 2.4 1.3 2.4 3.7(vii) Traiciog 0.1 0.1 - 0.3 0.3 0.1 0.3 0.4(viii) Tech.icol A-nintasc 0.1 - 0.1 - 0.8 0.8 0.1 0.8 0.9

TV.SAePrga(I) steel Srct- res 0.6 0.7 1.3 - 2.2 2.2 - 0.4 0.4 0.6 3.3 3.9(ii) Ahatne..ts 3.3 1.0 4.3 - 5.0 5.0 2.3- 2.- 0.9 0.9 5.6 6.9 12.5

V- Labortor(i) Equip-anc 0.1 - 0.1 - 0.3 0.3 0.1 0.3 4(ii) T-hrical A-sistance 0.1 - 0.1 - 0.8 0.6 0.1 0.8 0.9

TOTAL 2 1/2 TEAR FROGRAM 08.0 24.0 022.0 26.6 36.6 6.0 8.7 53.3 0.7 0.7 6.5 6.3 2.2 2.2 23.6 23.6 0.3 0.3 23.9 33.9 104.8 126.5 231.3

May 1570

- 28 -

aid agencies and Governments with the exception of US$7.0 million from KfW,

US$3.0 million from CIDA and US$33.9 million from the Saudi Fund is already

secured. Credit effectiveness will be conditional upon the effectiveness of

the Saudi Fund Loan Agreement and the EEC Special Action Fund Credit (para.

5.02).

3.08 Government's contribution to project financing is estimated at

US$98 million in local currency and US$24 million in foreign currency. During

the remainder of 1979, its contribution to the projec:t will amount to US$22.2

million equivalent of which US$4.1 million will be required for foreign

expenditures. For 1980 Government's contribution will total US$48.0 million

with US$9.7 million for foreign expenditures, and finally for 1981, Govern-

ment's contribution will total US$51.8 million with US$10.2 million for

foreign expenditures. Government has agreed to provide no less than US$40

million equivalent for BR's recurrent expenditures of which US$3 million willbe in convertible currency during each year of project execution and, by October 31

of each year during project execution, to exchange v:iews with the Association on the

adequacy of proposed budgetary allocations to BR for the followiLng fiscal year

(para. 5.01(x)).

3.09 A large part of the existing equipment fleet is presently either

immobilized or ineffectively utilized because of a shortage of spare parts and

fuel. Financing of the year-by-year increments in foreign exchange expendi-

tures for fuel and spare parts will be conditional upon the Government in-

creasing its maintenance expenditures as agreed.

F. Implementation

3.10 BR will be responsible for project implementation. Agreement was

reached with Government on a work program for the first year of the three-

year program (para. 5.01 (xi)). The work program lists the roads to be

maintained, the paved roads chosen for rehabilitation and the bridges and

ferries chosen for rehabilitation or replacement. A rate of return of 15% is

the minimum overall economic return which will be acceptable for the project

items. Agreement was also reached with Government that similar work programs

for the second and third years of the program will be prepared and submitted

to the Association for consideration prior to the be;ginnng of each year's

program (para. 5.01 (xi)). A project implementation schedule (Chart 2) and

project reporting procedures, including the submission of a project completion

report not later than six months after the Closing Date, were also discussed

and agreed upon (para. 5.01(xii)). BR has been requested to report progress

of project implementation on a quarterly basis. BR, with the proposed amount

of technical assistance, should be able to execute the project satisfactorily.

G. Procurement

3.11 The following procuremebnt procedures will be applied to those

project elements for which IDA-financing is provided. Construction of the

workshops and warehouses as well as ferry access ramps and bridges will be

entrusted to local contractors under unit price contracts through competitive

- 29 -

bidding advertised locally because the construction sites iare located through-

out the country and each individual contract amounts to less than US$400,000

and is therefore not suitable for International Competitiv,e Bidding (ICB).

Machine/ handtools, vehicles, spare parts, all materials, engines and equipment

will be procured through ICB if the items can be combined in lots exceeding

US$100,000. Otherwise such items will be procured locally through comparative

shopping. Strengthening of paved roads will be entrusted to contractors under

unit price contracts through ICB. Fuel will be procured from private suppliers

at the rates set by Government. Technical assistance will be procured through

renewal of existing contracts which the Government has with ORT for the

Workshop and Warehouse Department and Ferry Section, and with individual

experts for the other positions. 1/ Procurement of those items to be financed

under the EEC Special Action Fund Credit will be carried out in accordance

with EEC procurement guidelines.

H. Disbursements

3.12 Disbursement of the IDA Credit would be made as follows: 100% of

foreign cost for spare parts, fuel, materials, ferry equipment and technical

assistance; and 65% of total cost of road rehabilitation and construction of

workshops, ferry access ramps, and bridge abutments. The proceeds of the EEC

Special Action Fund Credit will be disbursed as follows: 100% of foreign cost

for spare parts, equipment and technical assistance and 80% of local cost for

road rehabilitation and bridge abutments.

3.13 With the disbursement percentages outlined above, disbursements for

the two and a half year time slice would be as follows:

Estimated Schedule of Disbursements

IDAFiscal Year Cumulative Disbursement

and Quarter at end of Quarter(US$ thousand)

IDA Credit EEC Credit

1980Third 1,500 3,100Fourth 2,700 5,000

1981First 4,200 8,300

Second 5,900 11,500Third 8,300 13,700

Fourth 11,100 15,500

1982First 15,500

Second 20,000Third 23,000Fourth 26,000

Source: Mission estimate

1/ Terms and conditions of all these contracts are satisfactory to theAssociation.

- 30 -

4. ECONOMIC EVALUATION

A. Main Benefits and Beneficiaries

4.01 About three-quarters of Zaire's population of over 26 million dependson agriculture for its livelihood, principally through small-holdings widelydispersed throughout the country. Largely due to poor transport facilities,over 50% of the agricultural outpult is subsistence crops. Adequate roadtransport for the evacuation of produce is necessary for the achievement ofthe Government's policy objective of (i) increasing agriculture's share of GDPby sustaining and expanding cash crop production both for internal and externalmarkets; and (ii) reducing imports of foodstuffs.

4.02 The current poor condition of the road network not only leadsto high vehicle operating costs but, in many cases, renders roads impassablefor long periods during the rainy season. Unserviceable and unreliableferries greatly aggravate the problem. Thus production of cash crops isdiscouraged, not only through high transport costs but even more so becausefrequently impassable roads and unreliable ferry services cause supply routesto be unreliable. Better road maintenance and improvement of ferry servicesto be financed under the program would reduce these obstacles to cash cropproduction. The rural population in general and farmers in particular wouldbe the principal beneficiaries.

4.03 Even before Independence, Zaire's road system was of a low standard.In the decade following Independence, lack of human and financial resourcesresulted in neglect of road maintenance, and caused serious deterioration ofthe road network. Although in the early 1970s the situation started to improvewith the creation of BR, the 1974 economic decline and the resulting financialcrisis has caused the maintenance effort to slow down through inability toprocure essential spare parts, fuel and materials, and deterioration of thehighway network has accelerated. The present situation, therefore, is thatBR has a significant quantity of maintenance equipment immobilized for wantof essential spare parts, which in turn has an adverse effect on the efficientutilization of costly foreign technical assistance.

B. Area of Influence of the Program

4.04 The provision of spare parts, fuel and technical assistance isintended to assist Zaire's highway maintenance program as a whole, and is notdirected towards any particular locality. However, one project component,the rehabilitation of paved roads, will particularly influence the BasZaire and Bandundu regions, since practically all of Zaire's older paved roadsare located in these regions. The paved roads proposed for rehabilitationconstitute the principal axes linking the seaport of Matadi with Kinshasa atthe terminus of the navigable river system, and from there with the interior

- 31 -

of the country. The rehabilitation of these main axes will permit the alloca-tion of spare parts and fuel to other regions where these are indispensablefor the continuation of a minimum maintenance program. Such a program isnecessary to protect the basic road infrastructure, essential to the economyof the regions, against further deterioration, which in many cases could leadto total closure of the roads.

4.05 Bridges and ferries are widely dispersed throughout Zaire andbenefits from the improvements to river crossings will theriefore also bewidespread. The bridges and ferries in the regions provide essential transportlinks for local traffic over extensive areas as well as for longer-distancethrough-traffic. Moreover, for transport of agricultural produce, particular-ly perishables, they are absolute necessities.

C. Economic Analysis 1/

Rehabilitation and Strengthening of Bitumen Roads

4.06 Most of the 2,000 km of paved roads in Zaire have not had anyperiodic maintenance for many years, and are in very bad condition. If therehabilitation proposed under the project is not undertaken soon, many roadswill be completely closed. It should be recognized that, unlike earth andgravel roads, bitumen paved roads cannot be kept passable by graders, andvehicle operating costs on a paved road in poor condition may be even higherthan on an earth road. Furthermore, since these roads carry much heaviertraffic, this results in a substantial economic loss.

4.07 The 94 km Kibangu-Tshela ro.ad with traffic of 340 vpd and in anadvanced state of deterioration illustrates the type of road rehabilitationwhich is required over the paved road network. The benefits would arise fromvoc savings since it is estimated thalt, without the project, voc on this roadwould rise to the equivalent of those on a poor earth road over the life of theproposed project. Traffic, which on paved roads is assumed to be comprised oftwo-thirds heavy vehicles and one-third light vehicles, is forecast to grow at5% per annum. VOC on these roads are as follows:

Vehicle Operating CostIight Vehicle Heavy Vehicle

(US$ equivalent per km)

Bitumen roads - current condition .28 .52

Bitumen roads - deteriorated condition .35 .65

Earth roads - good condition .53 1.00

1/ Because of incomplete data, the economic evaluation of the projectcomponents is based on illustrative examples.

- 32 -

4.08 The investment costs represent the rehabilitation to be carried

out under the project and light resealing after seven years.

4.09 The streams of costs and benefits, set down in Annex V, Table 1

indicate a benefit/cost ratio oI about 4.i:i for the Kibatu6u--sneLa roac, WIt.

discounted at 15%. The corresponding economic return is 53%. Sensitivity

analysis indicates that if costs are 20% higher and benefits 20% lower thail

assumed in this case, economic returns still do not fall below 39%. Due to

the high traffic levels and deteriorated condition along most cf the paved

network, it is expected that any road selected for rehabilitation will be

similarly justified.

Spare Parts and Materials for Highway Maintenance Program

4.10 The economic return on the financing of additional equipment, spare

parts, materials, and fuel will, owing to its incremental nature, be substan-

tial. In the absence of detailecl traffic data, the evaluation has been carried

out assuming both 15 and 20 vehicles per day (vpd). Traffic comprising

two-thirds heavy vehicles and one-third light vehicles is estimated to increase

at 5% per annum. Incremental annual maintenance costs include both capital

and recurrent expenditures. Additional equipment is estimated to have a

useful life of six years under normal use and maintenance. Therefore the

evaluation period corresponds to this 6-year life. BR's past performanceindicates that in the absence of the project it could maintain about 28,000 km

of earth roads. However, with the project a further 10,000 km of earth roads

will be maintained. Benefits from the project are therefore calculated as the

voc savings due to the improvement to "good" condition of 10,000 km of dirt

roads now in "poor" condition.

4.11 Because of lack of data as to what may be expected with respect

to generated traffic, it is further conservatively assumed that benefits

will consist exclusively of savings in vehicle operating costs (voc) for

normal traffic which yields weighted average voc savings of US$0.22 per

vehicle-km calculated on the basis of the following voc:

Vehicle Operating CostLight Vehicle Heavy Vehicle

(US$ equivalent per km)

Earth road - good condition .53 1.00

Earth road - bad condition .60 ].29

4.12 In addition there will be considerable time savings, which have

not been quantified for lack of basic data, as well as unquantifiable social

benefits resulting from better administration, health services, etc.

- 33 -

4.13 The resulting streams of quantifiable costs and benefits havebeen discounted at 15%, the estimated opportunity cost of capital in Zaire, togive a benefit/cost ratio of 1.4:1 for only 15 vpd. The corresponding economicreturn for 15 vpd would be about 67% (see Annex V, Table 2).

Replacement of Ferries

4.14 The motorized ferries to be selected for renewal will replaceobsolete ferries. They are to be located on main highway axes and thus arepart of interregional links. Failure to replace these ferries would necessi-tate the diversion of interregional traffic by indirect routes, often viapoorly maintained roads, resulting in higher journey costs. Where suchalternative routes do not exist, a decline in economic activity in the areaserved by the ferry would result. Therefore, these ferries are to be justi-fied either on the basis of the distance saved by having a shorter routebetween centers, or by avoidance of loss of economic output. Where alter-native routes do exist, it is estimated that, as an average, savings of atotal of 550 vehicle-km per day would be sufficient to justify a ferry re-placement based on the assumption that standards on the alternative diversionroute are equivalent to those of a good earth road. Ferry operating costsinclude replacement of engines after 8 years, careening after 10 years, andrecurrent maintenance and cost of operations.

4.15 The evaluation of specific ferry replacements will, of course,depend on whether the ferry is already out of service, or the date at whichit is estimated that the existing ferry will become unserviceable. An exampleis taken of Isangi ferry in the Haut Zaire Region, where prompt replacementis necessary. Benefits would arise from avoiding extra voc on the alternativeearth road to Kisangani which is 60 km longer than the direct route viathe ferry. Given a conservative estimate of 12 vpd at the ferry, potentialdaily distance savings are 720 km. Traffic comprising two-t:hirds heavyvehicles and one-third light vehicles is estimated to grow at 5% per annum.Other operating assumptions are as in para. 4.14 above.

4.16 If it is assumed that some traffic would have been deterred by theadditional length of the journey, potential voc savings would be correspond-ingly less. But on the other hand, benefits equivalent to the value ofeconomic output foregone would be lost. In the case of the Isangi ferry,a variety of assumptions are made as to the proportion of traffic thatwould be deterred if the ferry were to go out of service, ranging from zero to50%.

4.17 The cost and benefit streams are shown in Annex V, Table 3. Theestimated benefit/cost ratio varies between 2.1:1 and 2.7:1 and the correspond-ing economic returns between 37% and 55%, depending on the assumed proportionof deterred traffic. Sensitivity analysis showed that, even with increasedcosts of 20% and decreased benefits of 20%, the economic rate of return forthe ferry ranges between 23% and 32%. The Isangi ferry can probably beregarded as an extreme case in view of' the low vpd and relatively smallpotential distance saving. The economic justification for other ferrieslikely to be selected for inclusion in the project can be expected to exceedthis level.

- 34 -

4.18 Motorized ferries and cable ferries also have a very importantlocal economic and social role to play. Many towns are traversed by rivers,making ferries the indispensable internal link for the homogenous communitysettled on both banks of the river. In the rural areas, cable ferries areindispensable elements of the road network, and thus essential to the market-ing and processing of agricultural products over extensive areas. Failureto replace obsolete cable ferries will therefore discourage production ofmarket crops, and conversely induced production can be expected to resultfrom installing ferries at new sites. The economic effects, as well as thesocial benefits, vary from one ferry to the other and can only be evaluatedafter an individual study of each case. Considering the poor conditionof most ferries, timing of decisions as to repair or replacement is likely tobe determined more by actual breakdowns, rather than hypothetical prioritycalculations.

Bridge Program

4.19 The United Kingdom and the Federal Republic of Germany have givena grant of about US$2.2 million and a loan of about US$1.1 million respectivelyfor the procurement of Bailey bridge elements to enable Government to carryout a bridge program as part of its 1979-1981 highway maintenance plan.

4.20 The program will inclucde the replacement or strengthening ofobsolete or weakened bridges. The economic rate of return for one suchbridge which averages 20 vpd is shown in Annex V, Table 4. The detour inthe absence of the bridge in this case is 140 km. Assuming a 50% trafficdeterrent rate and a good earth road, the rate of return is still about 95%.In many cases, the detour routes are longer and either of much lower standardsor even impassable.

4.21 The program further includes the replacement of either motor orcable ferries by bridges. Rate of return calculations for representativemotor and cable ferry replacements are presented in Annex V, Tables 5 and 6showing economic returns of 39% and 35% respectively. An important benefitdue to the replacement of these ferries is the increiased reliability ofriver crossing. The vehicle cost savings shown in the case of the motorferry assume that the ferry cannot operate 10% of the time and that 50% ofdeterred traffic detours and takes a good earth roacd. In the case of thecable ferry, a 20% out of operation rate is assumed., This may be due toa combination of weather or tidal conditions as well as mechanical andtechnical factors. Again, it is assumed that 50% of' the traffic detourson to good earth roads. As the ferries to be replaced are amongst the leastreliable and/or most heavily used, these assumptions are at least realisticif not conservative.

Laboratory

4.22 The economic benefits of the investments for technical assistanceand equipment for LNTP have not been quantified. However, by providing

- 35 -

information on the location and suitability of road construction and road main-tenance materials, the laboratory plays an important role in reducing thecost of construction and maintenance operations. The economic benefits ofthe relatively small investment will therefore be substantial.

Aggregate Economic Rate of Return

4.23 The aggregate economic reLte of return for the maintenance, pavedroad, motor ferry and bridge components is 55%. The rate of return for eachcomponent was considerably increased when a shadow exchange rate of US$1=Z 2was used. This aggregate rate of return excludes the laboratory componentamounting to under US$1 million, equipment renewal (US$28.5 million), and theprovision of ferry access ramps, equipment, workshops and motors as well astechnical assistance and training amounting to about US$21 million, for whichthe benefits could not be meaningfuLlly quantified.

D. Risk

4.24 In view of the very high economic rates of return for most of the com-ponents, the risk of misallocation of resources is minimal. The major riskswhich could obstruct the successful completion of the project would be thefailure of Government to provide its share of the funds. However, Governmentis strongly committed to improvement of the road network and has alreadyundertaken to provide its share of the funds needed to carry out the project.Should it become apparent that insufficient funds are available for projectcompletion, a balanced reduction in project scope will have to occur. However,even in this case the returns on the individual components which are carriedout will still greatly exceed the opportunity cost of capital.

5. AGREEMENTS REACHED AND RECOMMENDATION

5.01 Agreement was reached with Government on the foLlowing:

(i) during execution of the project, appointments to seniorpositions in the BR will be acceptable to the Associa-tion (para. 2.13);

(ii) preparation by Government by September 30, 1980 of aplan for road improvement over the period 1982 through1986 (para. 2.17).

(iii) Government will set up an improved payment procedurefor contractors engaged by BR, through the establishmentof a quarterly payment procedure into BR's capital fundsimilar to that presently provided for BR's currentbudget (para. 2.18);

- 36 -

(iv) BR's accounts and financial statements for each fiscalyear during the project period will be audited by inde-pendent auditors acceptable to the Association. Thefinancial statements so audited will be submitted tothe Association not later than six months after the endof each fiscal year (para. 2.18);

(v) a plan of action for the enforcement of vehicle axle-load limits will be furnished to the Association priorto December 31, 1979 (para. 2.21);

(vi) procedures for notification of contracts will be simpli-fied (para. 2.23);

(vii) appropriate targets for equipment utilization (para. 2.28);

(viii) an expert will be appointed by Government to review presentmanual road maintenance practices and recommend improvementsincluding proposals on appropriate technology (para.2.29);

(ix) ferry availability targets (para. 2.30);

(x) Government will provide no less than US$40 million equivalent forBR's recurrent expenditures of which US$3 million will be inconvertible currency during each year of project execution and,by October 31 of each year during project execution, Government andthe Association will exchange views on the adequacy of proposedbudgetary allocations to BR for the following fiscal year (para.3.08);

(xi) the agreed work program for the first year of thethree-year program will be carried out and similarwork programs for the second and third years ofthe program will be prepared and submitted to theAssociation for consideration prior to the begin-ning of each year's program (para. 3.10); and

(xii) a project implementation schedule and project re-porting procedures including the submission of aproject completion report not later than SiX monthsafter the Closing Date (para 3.10).

5.02 Credit effectiveness will be conditional upon the adoption of thelegislation referred to in para. 2.12, and the effectiveness of the SaudiFund Loan Agreement and the EEC Special Action Fund Credit (para. 3.07).

5.03 With the agreements outlined above, the project is suitable for anIDA Credit of US$26.0 million on standard terms to the Government of Zaire andan EEC Special Action Fund Credit of about US$15.5 million.

May 3, 1979

- 37 -ANNEX I

Page 1 of 2

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPIJBLIC OF ZAIRE

Past Bank Group-Fvinanced Transport Projlects

1. Bank Group involvement in the transport sector has so far beenlimited to the highway (see Chapter 2) and the rail-river subsectors. Twoprojects have been financed in the rail-river subsector and are still undersupervision.

River Transport Credit (Credit 255--ZR, June 1971, US$7.0 million)

2. The project consists of urgent rehabilitation works (for the rivernavigational infrastructure and for ONATRA's river fleet), and provision ofexperts needed for the reorganization of the river agencies. The main institu-tional reforms, which were requirecd as a condition of the Credit were initi-ated, and the two autonomous agencies, RVM (Regie des Voies Maritimes) and RVF(Regie des Voies Fluviales), were set up to maintain water ways and controlnavigation. In spite of continuing difficulties, the agencies are fulfillingtheir functions and carrying out rehabilitation of the principal waterways,although at a rate less than anticipated. The third beneficiary agency of theCredit, ONATRA has performed poorly with respect to project objectives due tothe general ineffectiveness of its management. With the recent infusion ofnew management, it is now expected that performance will be improved, princi-pally under the follow-on Credit 57'1-ZR, Railway and River Transport Project.

Railway and River Transport Project (Credit 571-ZR, July 1975, US$26.0 million)

3. This second project was aimed at improving ONATRA's efficiency andproductivity and continuing support of RVF. Finance was mainly provided forcontinuing rehabilitation of navigation aids, technical assistance, training,provision of river transport equipment (buoy tender, shop boat, and barges),railway equipment, and preliminary engineering studies for the proposedKinshasa-Ilebo railway link. Results thus far are disappointing, and theproject is behind schedule in many respects. Considerable delays have beenincurred in filling the technical assistance positions, and in procurement ofriver craft. Although the procurement of other equipment is progressingsatisfactorily, no improvement in operations effectiveness has yet beenachieved. The financial position of ONATRA has been stabilized and improvedunder the new management. With the ongoing buildup of an increased managementteam, provided by Belgian Technical Assistance in addition to technicalassistance under the Credit, improvements are now expected in the operationalareas, particularly river transport and the supporting shipyard.

- 38 -ANNEX I

Page 2 of 2

Railway Transport Project (Board Presentation May 1979 - US$20.0 million)

4. This project will assist Government in carrying out its long-rangeprogram of track rehabilitation and operational improvements, and includes:

(i) the renewal and upgrading of 210 km and ballastinga further 285 km;

(ii) the purchasing of new wagons, shunting locomotivesand passenger coaches;

(iii) improvement of Ilebo port facilities;

(iv) provision of spare parts for existing equipment; and

(v) technical assistance and training.

Total project cost is estimated at US$161.5 million and cofinancing has beensecured from the Saudi Fund, KfW, ADB and the OPEC Special Fund.

May 1979

ANNEX II

-39-

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Technical Assistance to the Bureau of Roads

Financing SourcesDepartment Function IDA USAID CIDA AGCD FAC GTAL/ Total

A. Maintenance and RehabilitationProgram

Central Office General Manager 1 1General Adviser 1 1

Budget and Accounting Adviser 1 1

Road Construction Technical Adviser 1Economic Adviser 1 1Construction Adviser 1* 1

Road Maintenance and Director 1 1Rehabilitation Adviser Manual Maint. 1 1

Coord. Inter. Finan. 1 1Operations Advisers Technical Adviser 1 1

SGMTP Director 1 1Workshop Head Kinsh. 1 1Procurement Officer 1 1 2Financial Adviser 1 ITechnical Director 1 1Workshop Heads 4 2 1 7Mechanics 3 1 2 1* 1* 1 9

Training Coordinators 2 2Kasangulu Center 2 1 3Kongolo Center 2* 1* 3Bukavu 2* 2

Regional Administration Advisers 7 1 8

Sub-total A 30 3 5 4 5 3 50

B. Ferry Program

Ferry Service Director 1 1Technical Director 1 1

SMB Procurement Officer 1 1Workshop Heads 1 2 3

Sub-total B 3 1 2 6

C. National Laboratory

LNTP Adviser 1 1

Research and Training Advisers 3* 3

Sub-total C 1 3 4

TOTAL 34 3 5 5 8 5 60

1/ GTA - German Technical Assistance.* Proposed for financing.

May 1979

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Geometric Highway Design Standards Adopted by the Bureau of Roads

ROADS OF GENERAL INTEREST(routes d'int ret general) LOCAL ROADS

Priority Other (routes d'int6r9t local)Terrain Flat Rolling J_Mountainous Flat Roll in Mountainous

Design Speed (km/h) 80-110 55-80 40-55 60-80 50-60 35-50 50-60 35-50 25-35

Minimum HorizontalRadius of Curvature (m) 190-360 90-190 50-90 110-190 75-110 35-75 75-110 35-75 30-35

Maximum Grade (%) 4 5-7 7-9 5 5-7 7-9 7 7-9 9-12

Maximum Length of Grade_ (m) __ _ _600 400 _ - 700 - - 1000

Width of Pavement (m) 6.6 6.6 6.0 6.0 6.0 6.0 6.0 6.0 5.0-6.0

Width of Shoulder (m) 2.2 2.2 1.0-1.5 1.5 1.5 1.0 - _ _

Right-of-Way (m) 100 100 100 50 50 50 30 30 20

Source: Bureau of Roads, June 1974.

May 1979

-41- ANNEX IV

Table 1

COSr ESTIMATES

THREE YEAR PROCRAM

Local Foreign Total %-- 8- US$ Thousands ------ g-- n

A. Capital CostI. Continuation of Maintenance and Rehabilitation Program

(i) 2 workshops and warehouses- constru,ction 175 325 500 65- tools 77 517 594 87- vehicles 46 301 347 87

(ii) additional equipment 1,153 7,716 8,869 87(iii) equipment replacement 4,387 29,359 33,746 87

(iv) spares tor:- rehabili:ation work 201 1,335 1,536 87- incremental maintenance 281 1,873 2,154 87

v) fuel for:- rehabilitation work 272 1,423 1,695 84- incremen-al maintenance 367 1,922 2,289 84

vi) mater.als fCr-- rehabilitat on work 510 764 1,274 60- incremental mjintenance 611 1,108 1,719 60

vii) salaries for- rehabiliraci,n work 4,267 - 4,267 -0-- incremental 2v.intenance 4,994 - 4,994 -0-

(viii) technical assistance and training (1,175 nan-months) 1,540 10,298 11,838 87

Subtotal 1 18,881 56,941 75822

II. Rehabilitation of paved roads 8,484 15,756 24,240 65

III. Ferrv Program(i) 11 motor ferries 2,500 4,650 7.150 65

(ii) 54 cable ferries 781 1,458 2,239 65iii) 58 ferry motors 289 1,939 2,228 87(iv) 51 outboard motors 105 695 800 87

(v) vehicles 237 1,600 1,837 87(vi) spares, tools, radio equipment 323 2,164 2,487 87

(vii) construction of workshops and warehouses 295 547 842 65(viii) construction of 11 access ramps 1,148 2,138 3,286 65

(in) training 140 328 468 70(x) technical assistance (88 man-months) 111 754 865 87

Subtotal Ill 5,929 16,273 22,202

IV. Bridge Program(i) steel structures 542 3,071 3,613 85

(ii) abutments 5&6 7,050 12,819 55

Subtotal IV 6,311 10,121 16,432

V. Laboratory ,(i) equipment 60 408 468 87

(ii) technical assistance (88 man-months) 111 754 865 87

Subtotal V 171 1,162 1,333

SUBTOTAL I-V 39.776 1025 140,029

Vi. tontiagencies:

(i) quantity 3,975 10,028 14,003(ii) price 4,952 12,470 17,422

Subtotal VI 8,927 22,498 31,425

TOTAL CAPITAL COST 48,703 122,751 171,454 72(NET OF TAXES) (40,130) (122,751) (162,881)

B. Recurrent Cost "I. Salaries 63,460 - 63,460 -0-

- II. Spares 1,302 8,709 10,011 87III. Tools 309 2,069 2,378 87IV. Fuel 1,701 8,928 10,629 84V. Materials 2,034 3,051 5,085 60

VI. Maintenance by Contractor 1,743 3,236 4,979 65

Subtotal I-VI 70,549 25_993 96,542

VIl. Price Contingencies 8J713 3,181 11,894 27

TOTAL RECURRENT COST 79,262 29_174 108,436 27(NET OF TAXES) (73,713) (29,174) (102.887)

May 1979

CALCULATION OF PRICE CONTINGENCIES

--------- Us$ Thousands------------

July I-Dec. 31, 1979 1980 1981 Jan. I-June 30, 1982 TotalItem Local Foreig Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total

A. Capital Cost

I. Maintenance Program 2,930 8,920 11,850 6,395 19,505 25,900 6,395 19,505 25,900 3,161 9,011 12,172 18,881 56,941 75,822II. Rehabilitation Paved Roads 1,505 2,795 4,300 3,010 5,590 8,600 2,730 5,070 7,800 1,239 2,301 3,540 8,484 15,756 24,240

III. Ferry Program 1,905 5,095 7,000 2, 705 7,095 9,800 805 2,095 2,900 514 1,988 2,502 5,929 16,273 22,202IV. Bridge Program 1,025 1,675 2,700 2,085 3,415 5,500 2,050 3,350 5,400 1,151 1,681 2,832 6,311 10,121 16,432V, Laboratory 30 220 250 80 520 600 25 175 200 36 247 283 171 1,162 1_333

Subtotal I-V 7,395 18 705 26.100 14.275 36.125 50,400 12,005 30,195 42,200 6,101 15,228 21,329 39,776 100,253 140,029

VI. Quantity Contingency 107, 740 1,870 2,610 1,425 3,615 5,040 1,200 3,020 4,220 610 1,523 2,133 3,975 10_028 14,003

VII. Price Contingency 165 425 590 1 ,295 3 ,26 5 4,560 2,150 5,430 7,580 1,342 3,350 4,692 4, 952 12,470 17,422

TOTAL CAPITAL COST 8,300 21,000 29_300 16,995 43,005 60,000 15,355 38_645 54_000 8,053 20_101 28_154 48,703 1222751 1711454

B. Recurrent Cost

I. Salaries 10,000 -0- 10,000 21,000 -0- 21,000 21,250 -0- 21,250 11,210 -0- 11,210 63,460 -0- 63,460II. Spares 195 1,305 1,500 425 2,825 3,250 460 3,090 3,550 222 1,489 1,711 1,302 8,709 10,011

III. Tools 60 390 450 110 740 850 90 610 700 49 329 378 309 2,069 2,378IV. Fuel 255 1,345 1,600 610 3,190 3,800 545 2,855 3,400 293 1,536 1,829 1,701 8,928 10,629V, Materials 300 450 750 700 1,050 1,750 680 1,020 1,700 354 531 885 2,034 3,051 5,085

VI. Maintenance by Contractor 300 550 850 610 1,140 1,750 560 1 040 1 600 273 506 779 1.743 3 236 4,979

Subtotal I-VI 11,110 4,040 15_150 23,455 8,945 32,40Q 23,585 8,615 32,200 1_3401 4,391 16,792 70_549 25,993 96,542

VII. Price Contingency 220 80 300 1,935 715 2,650 3,830 1,420 5,250 9 ,728 966 3,694 8_7 13 3,181 11,894

TOTAL RECURRENT COST 11,330 41 J i4 0 25,320 965, 354_50 2715, 399,05 37,450 315,129 5,357 20,486 79.262 29_174 108,436

Note: This table is based on the document "goad Mainrenance and KehaDilitation Program of Buredu of Roads 1'9719l," prcpared by L'R in Deet.ber 1977. The follcving modifiationshave been made: (i) the BR January 1977 prices have been updated to June 1979 prices by increasing the foreign currency component by 307% and the local currency by 607c whichcorrespond to the amount of inflation experienced by BR for its specific activities; (ii) the,percentages of foreign cost have been increased to show the foreign cost to theZaire economy instead of to the BR onlly; (iii) the 107 quantitv contingency included in the BR program is shown separately for the capital cost; and (iv) for fulture years, thesame inflation percentages for local and foreign currency have been used, assuming that the depreciatios rate of the zaire will closCly follow the local inflation rate. Thefollowing average percentages were applied to all project co.ponents:

1979 1980 1981 1982

Ma 8 7 717

May 1979

FINANCIING FLAN FOR THREE-YEAR FRORGRAM MID-1979-MID-1982 OF BORRAFOF ROADS

FFN00 FRESENTLY COMOITTED OR AGRREDRINO PRINCIFLE

Zaire- IDA ___EC USAID COlA FA_C/AGCD/ODM fW5 R.do Unidentified TotalL . FTL F T F T I F F I F T L F TT F T I 1

F. MitnneForn

(0) Wo-kshaps 0.4 - 0.4 - 0.9 0.9- 0.2 0.2 - 0.2 0.2 0.4 0.3 1.7(ii) Additionl Eqeip-ten 1.1 - 1.1 - 0.6 0.6 - 0.0 0.0 0.5 0.5 1.5 1.5 - 4.6 4.6 0.2 1.6 1.8 1.3 9.6 10.9(iii) EqnipraniRnea 4.5 - 4.5 -- 2.4 2.4- 6.0 6.0- 7.7 7.7 - 13.9 13.9 0.9 6.0 6.9 5.4 36.0 41.4(iv) Spare 1.7 5.4 7.1 - 1.2 1.2 - 0.1 0.5 - 4.1 4.1 0.4 2.5 2.9 2.1 13.7 15.8(c) Tents 0.5 1.4 1.7 - 0.5 0.5 0.1 0.4 0.5 0.4 2.3 2.7(ci) Feel 2.2 7.2 9.4 3 .5 5.3- 1.0 1.0 0.5 2.6 3.1 2.7 14.1 16.(vii) Materials 3.0 5.4 6.4 . 1.1 1.1 -. 0.7 1.1 1.8 3.7 5.6 9.3(viii) salaies 66.7 - 66.7 '5.9 - s1- a ac. -6(is) Techeical Assistance 1.6 1.2 2.0 3,54 5.4 - 5.0 5.0- 0.5 0.5 - 0.5 0.3 0.3 2.2 2.5 1.9 12.6 14.5(a) Maiecta-- by Ceeactar- 0.5 5.2 4.7 .0.3 0.6 0.9 1.8 3.8 5.6

II. Facd Roads 4.3 - 4.3 3 .9 5.9 4.5 - 4.5 4.6 4.6 - 7.7 7.7 1.7 3.0 4.7 10.5 19.2 29.7

Ill. FryFers

(0) Macar Ferries 5.1 0.3 3.4 . 5.2 5.2 3.1 5.5 8.6(ii) Cable Feries 0.0 0.1 0.9 1.3 1.5 0.2 0.3 0.3 1.0 1.7 2.7(iii) Ferry Macace 0.5 . 0.3 0.5 0.5 1.4 1.4 3.1 0.4 0.5 0.4 2.3 2.7(ic) Ontbaad Mtcar 0.0 0.1 0.2 0.0 0.0 0.1 0.9 1.0

(v( Fhiel-s, Warkehaps,O1p-ra, Tan1s 0.0 . 0.0 2.1 2.1 0.1 0.1 . 1.0 1.0 0.2 1.4 1.6 1.0 5.4 6.4

(ci) Access Raipe 1.53 1.3 2.4 2.4 0.1 0.2 0.3 1.4 2.6 4.0(vii) Trainini 0.1 . 0.1 - 0.5 0.5 0.1 0.1 0.2 0.2 0.4 0.6(Viii) Te-hni-al Aasisat- 0.0.1 .1 . 0.0 0.6 0.2 0.2 0.1 1.0 1.1

IV. Redg Faia

(i) heel Octeccee 0.6 0.7 1.53 2.2 2.2 0.4 0.4 0.1 0.4 0.5 0.7 3.7 4.4(ii) Abunneti 3.3 1.0 4.3 . 5.0 5.0 2.5 2.3 0.9 0.9 1.4 1.0 5.2 7.0 0.7 15.7

V. Labercr

(0 iqeipe..nt 0.1 0 .0 0.5 0.53 0.2 0.2 0.1 0.5 0.(ii) Technical A-siscan- 0.1 - .1 - 0.0 0.0 0.2 0.2 0.1 1.0 1.1

TOTAL 3.YEAy FROGRAM 00.0 24.0 122. 26.6 26.6 6. 0.7 15.5 0.7 0.7 6.5 6.5 2.5 2.5 25.6 23.6 55.9 55.9 25.2 25.4 40.6 120.0 151.9 279.9

May 1979

-44-

ANNEX VTable 1

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Cost and Benefit Stream due to

Paving Kibangu-Tshela Road (94 Icm)

ADT = 340-----------US$ millions------------

BenefitsYear Cost VOC Savings

1 5.72 3.83 5 .94 - 6.35 - 6.86 - 7.27 - 7.78 _ 8.39 1.1 8.8

10 - 9.411 - 10.112 - 10.813 - 11.514 - 12.315 - 12.9

ERR = 53%

Benefit Cost Ratio discounted at 15% 4.14:1

ERR using Shadow Rate of US$1 = Z2 = 67%

May 1979

-45-

ANNEX VTable 2

STAFF AP'PRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUB:LIC OF ZAIRE

Cost and Benefit Streams due to Incremental

Mechanized Maintenance on Earth Roads------------US$ millions-------------

Costs ofIncremental Benefits

Year Maintenance 20 VPD 15 VPD

1 14.40 8.00 6.00

2 6.70 16.00 12.00

3 6.70 17.00 13.00

4 6.70 18.00 13.00

5 6.70 19.00 14.00

6 6.70 19.00 15.00

ERR > 100% 67%

Benefit Cost Ratio at 15% interest 1.8:1 1.4:1

ERR with Shadow ExchangeRate of US$1 = Z2 100% 94%

May 1979

-46-

ANITEX VTab'le 3

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPIJBLIC OF ZAIRE

Cost and Benefit Streams due to Replacing the Isangi Ferry

ADT - 12 Detour Route - 60 klm…---------US$ -000 … --

Benefit StreamVehicle Operating Savings

Total Ferry Deterred TrafficYear Cost None 25% 50%

1 747 221 193 1662 67 232 203 1743 67 244 213 1834 67 256 223 1925 67 269 235 2026 67 282 246 2127 67 296 259 2228 155 311 272 23L9 67 327 285 24510 197 343 299 25811 67 360 314 2712 67 378 330 28413 67 397 347 29814 67 417 364 31315 67 438 382 32916 155 459 401 345?7 67 482 421 362i8 67 507 442 38019 67 532 465 40020 67 559 48F 419

ERR 55% 45% 37%

Benefit Cost Ratio 2.7:1 2.3:1 2.1:1

ERR using Shadow ExchangeRate of US$1 - Z2 66% 54% 44%

May 1979

-47- ANNEX V

Table 4

STAFF APPFAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Cost and Benefit Streams due to

Replacing Obsolete Bridge at Ruzizi Crossing

ADT = 20 Detour - 140 km-------…US '000---------

BenefitsVehicle Operating Savings

Total Deterred TrafficYear Cost of Bridge None 25% 50%

1 712 - -2 - 858 743 6443 - 901 780 6764 - 946 819 7105 - 993 860 7466 6 1,043 903 7837 - 1,095 948 8228 - 1,150 99,6 8639 - 1,207 1,045 90610 - 1,268 1,098 95111 6 1,331 1,153 99912 - 1,398 1,21.0 1,04913 - 1,467 1,271 1,10114 - 1,541 1,334 1,15715 - 1,618 1,401 1,21516 6 1,699 1,471 1,27517 - 1,784 1,545 1,33918 - 1,873 1,622 1,40619 - 1,967 1,7C03 1,47620 - 2,065 1,788 1,550

ERR = >100% >100% 95%

Benefit Cost Ratio at 15% discount 9.8:1 8.5:1 7.4:1

ERR using Shadow Exchange Rate ofUS$1 = Z2 = > 100% --loCi% w10o%

May 1979

-48-

ANNEX VTable 5

STAFF APPRAISAL REPORT

FOURTH .HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Cost and Benefit Streams due to

Replacing Motor Ferry at Kwenga River with Bridge

ADT = 50 Detour - 250 km--…----…S$ 000…--------

Savings in VehicleOperating Costs

Cost of 50% of Traffic Detoured Savings in Ferry Costs

Year Bridge 10% of Time Recurrent Capital

1 1,510 - - -

2 - 287 67 680

3 - 301 67 -

4 - 316 67 -

5 - 332 67 -

6 14 349 67 -

7 - 366 67 -

8 - 385 67 -

9 - 404 67 -

10 - 424 67 130

11 14 445 67 -

12 - 467 67 88

13 - 491 67 -

14 - 515 67 -

15 - 541 67 -

16 14 568 67 -

17 - 597 67 -

18 - 626 67 130

19 - 658 67

20 - 691 67

ERR = 39%

Benefit Cost Ratio at 15% interest = 2.3:1

ERR using Shadow Exchange Rate ofUS$1 = Z2 = 47%

May 1979

-49-

ANNEX VTable 6

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Cost and Benefit Streams due to

Bridge Replacing Cable Ferry at Binko Musese

ADT = 18 Detour = 300 km------- US$ '000----------

Cost of Vehicle Operating Savings inYear Bridge Savings Ferry Costs

1 8972 - 248 973 - 260 134 - 273 135 - 287 136 8 301 137 - 317 138 - 332 139 _ 349 1310 - 366 13

11 8 385 9712 - 404 1313 - 424 1314 - 445 1315 - 468 1316 8 491 1317 - 516 1318 - 541 1319 - 568 1320 - 599 13

ERR = 35%

Benefit Cost Ratio at 15 % discount 2.5:1

ERR using Shadow Exchange Rate of US$1 = Z2 = 44%

May 1979

-50-ANNEX VI

STAFF APPRAISAL REPORT

FOURTH HIGHWAY PROJECT

REPUBLIC OF ZAIRE

Related Documents and Data Available in Project File

(1) IDA: Zaire Transport Sector Memorandum. April 1977.

(2) IDA: Economic Conditions and Prospects of Zaire. Report No.1407-ZR, April 13, 1977.

(3) Zaire: National University: Atlas des Collectivites du Zaire.Kinshasa, 1976.

(4) Zaire: Departement du Plan: Programme d'Ec[uipement 1977-1980Secteur Transport. Rapport Preliminaire, May 1977.

(5) Zaire-BR: Road Maintenance and RehabilitatiLon Program for the Period1979-1981. Office des Routes, December 1977.

(6) Zaire-BR: Summary of Agricultural Roads MaiLntained by BR. November1977.

(7) Zaire-BR: Departement Exploitation: Annual Report 1976.

(8) Zaire-BR: Three Year Ferry Program 1979-1981. November 1977.

(9) Zaire-BR: Supplemental Information on Ferry Program. November 1977.

(10) Zaire-BR: Rehabilitation of Asphalted Roads. September 1977.

(11) Zaire-BR: Bandundu Pilot Program. 1977.

May 1979

FOURTH HIGHWAY PROJECTORGANIZATION OF THE BUREAU OF ROADS

REPUBLIC OF ZAIRE

Mionisterof

Public Works

Di,ectu, Generdlof

Bmreau of Roads

Administrative Techtical Regio;alDepartments Departments O|gani'ation

VWotkshl, Manager abtid, tillg Ferry New National ~~~~~~ald -' anedi.Assistarnce

and Department~~~~~~~~~~~~~~~~~~~~nCoristrocion Laboftury vWarehiouses adto

Ild a|,on B|.kkewnq D | | C i LNbatPry i L |SGMTP) Rehiabilitation Mechan Units

_~~~~~~~~~~~~~~~~~~~~~~~

| eoo,l || Supplyl Technicalillg Adnim,:;SaIvices ~~Services Services Selvices |

alit1 S,plvp)A i quipmenit mecha"waiFitiancidl Seblvlces Proc.'emlenlt Services l

- i3e:Ul )r).sl ~~~~~~~~~~~~~~~~~~~~~~~~~~RegirUlidl L 38 Me hamized _ 8 Depots

W- kWhups VVl kshimps thi.ts 5 swbdep ots

VV,,,l 1, B ,.k -1 8 828

APPRAISAL OP A FOURTR R_6gWAX POJCT 2

REPUBLIC OF ZAICE

PROJCIT IMPLUBINTATIBN SCHEMULE

asae nelble 19'S 1979 1980 1981 1982

Mahin AcCijictin Athority 1 2 3 4 1 2 3 4 1 2 3 4 1 2 4 3 4

Board PrtsentationSifting of Credit Agree--enEffective D-te of Credit

1. Consruction of Workshop and Wareho-ae

- Preparation, review ppro-l of layout and biddingdononet. BR, IDA

- Local bidding, ovalation, approval BR, IDA- Avard of oontra-ts and execution of work BR, Cocer tor_.

2. Procurement of Eauipmnt. Spare Parts and Fuel

- Prep-retion, review, approval of bidding don.ment BR, IDA

- Icterrational Conpetitive Bidding, evaluation,approvl BR, IDA

- Award and nexeution of contrnct. BR, SuPpliers -

3. T.Chnici1 Axslntan-e

- Renewal of existing -entr-cte and execution BR, Rmpecrixtes, IMA _ - . _ _ _ -_ _

A4. Rehabilitation of Peved Roade

- Prepation, revie, approval of biddingdonuectc SR, IDA

1- Tternatio-al Coapecitive Rddding, evaluation,opproval BR, IDA

A-ard and execution of con-r-nto BR, ContraCtors

B Ferry proAra|

CoT Pronureelent of tatoriola enoice. creilers,| etc. for conatruntion, repairs, and nointenanceof terries- Preparation, review, approvi of bidding

do-uete BR, IDA

- International Competitive bidding, IDaloacion,approval BR, IDA

-Contrant award, and program execution .R . . -_ - - -t(b) ConstruncioB of Roxes. Samoa

| F-reparartion, revie. appr-vai of biddingdoc-ets SR. IDA

- Lan bidding, eval- ation, approv-i SR, IDA

- Award and execution of noncrocta sa, Contractors i

C() Technical BstanancaII

- Ren wal of e-iating contronts cod e-ecution - - - - -i i - i

86 Bridee Progrr|

-a) Procurement of steel structures BR, BKl, PR6

(b) -Abutmentspreparation, review, approval of bidding

do-uet. BR. IDA

| Local bidding, ev-lution *nd

pprova BR, IDA

Award and enecurion of contract BR, Contrecto-e I

7. ASnist.n.e to the National Laborator-

(a) Pronuremest of eqcipment* Preparation, review, approval of bidding

Id n-ens BR. IDA| International Coepetitise Bidding, evaluation,

appr-al SR. IDA

- Award and ax-cution of contract bR. SuppliDra

(b) Technical AssistanceRenewal of aioting contract, ad .e..ution

May 1979

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ B RRD 11 2 5 3 RR

MARCHA 197N1f;Lj; ;:;: t 0 X Q r \~ ; QQ;t R ;- X [ ;- 00 - 0 V V Q 2 1 § REPUBLiC OF ZAIRECEI ; T .RAL AFRICAN EMPIRE CON ECTIONS

<iY CAMEROOF ta 0 2; l X :0 0 0 l; V RAILWAYS AND RIVERS, < 0 E 4 5 ft r t t ~~~~~~~~~~~~~~~~~~~~~~PRQPOSED RAILWAYS 0

~--RAILWAYS

EOUAT< > 0$ 0 t; ;2j5S- 3 \ f~~~~~~~~~~~~~~~~~~~~~ITENAIONtRAL BONA RISUu eEQUAT RIAL j " 11 IG A ,Ao I A el~frgv!Ne g/ 2 PEOqp P K ran fKQaeK ENYA

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