Dewuoma of

The World Bank

FOR OMCAL USE ONLY

Report No. 5921a-CO

STAFF APPRAISAL REPORT

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

February 19, 1986

Projects DepartmentLatin America and the Caribbean Regional Office

This document has a restricted dsribution 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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CURRENCY EQUIVALENTS

Currency Unit Peso (Col$)US$1 ColS 168.32Col$ 1 million US$5,941

WEIGHTS AND MEASURES

Metric System

ABBREVIATIONS

CIDA Canadian International Development AgencyCNR Colombian National RailwayCOLPUERTOS Colombian Port AuthorityDAAC Administrative Department of Civil AviationDNP National Planning DepartmentFONADE National Fund for Development ProjectsFNCV Fondo Nacional de Caminos VecinalesFVN National Highway FundGRC Government of the Republic of ColombiaIDB Inter-American Development BankINCORA Colombian Institute of Agrarian ReformMOPT Ministry of Public Works and TransportSENA National Training ServiceUSAID United States Agency for International Development

FISCAL YEAR

January 1 - December 31

FOI OF-IKL KUSE ONLY

STAFF APPRAISAL REPORT

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

TAKLE OF CONTENTS

Page No.

I. R R *.............................................. 1

II. THE TRANSPORT SECTOR AND RURAL TRANSPORT.... ................ 3

A. Characteristics Os ...... ..........................e..c.... 3B. Infrastructure ............ *........ ................... 3

C. Transport Planning, Coordination and Investment * ......... 4D. Fuel Pricing ........... e.. ................................ 5

E. Rhral Development and Transport ........ ..... ... Se......... 5F. Fonda Nacional de Caminos Vecinales ....... ................ 6

Wi) Organization ........ o............................... 6

(ii) Rural Road Activities ............................... 7(a) Construction cceccececccccccece.ece.ccc......... 7

(b) M7intenance .. cececcecccce...ce.eec..eceec.e 7Ciii) Financing and Budgeting cecceeeecceeeecee e........... 7

G. Bank Involvement in the Sector and Lending Strategy ...... 8

(i) Background ...........................eeccccseeccce.e 8

(Li) Sector Strategy .......... ccc a eec .................... 8(iii) Sector Lending .e........ ............................. 9

(iv) Experience with Past Lending ................ ........ 9

This project was prepared by the Fondo Nacional de Caminos Vecinales (FNCV)and appraised by a Bank team consisting of Messrs. Sergio Miquel (SeniorEngineer/Consultant) and Kuldeep Ohbi (Economist) in July 1985. The reporthas been edited by Ms. Virginia Foster.

Th. doAuent ha a ,rktd diutributon an my be uud by mclpinut ony n the peffribmaceof thur okicd dum. In contesn way not orwiuw be dbckwd wtbht Word DBnk raotlon.

TAMLE OF CONTENTS (continued) -ii -

III. PNCV'S IMNESTENT AND C PROAM AND THE PROJECT .... 10

A. Project Origin ............................. 10B. Project Objectives and Description ..... 10C. Rationale for Bank Involvement 11D. FNCV's Rural Roads Investment and Maintenance Program

(1986-1992 Program) ...n......e e e..... 11E. Costs and Financing ;..........e.e.oosgeoeoeee.e-ee 12F. Execution and Procurement 15G. Disbursoemets and Auditing 16H. Economic Justification 17I. Assessment of Risks 18

Wv. RECHZNDATIONS 19

TABLES

2.1 Road Network .geeee.e.eeee.eeeeeeee.Ce.eee.eeeeeeeeeee 202.2 Growth of Non-Interstate Roads, 1975-1985 ............... 212.3 FNCV's Headquarters and Regional Staff ...... o............ 222.4 Sources of PNCV's 1985 Budget .. ......................... 232.5 Projection of FNCV's Funds from Domestic Sources ...... o 242.6 Sources and Applications of PNCV's Funds, 1980 .......... 252.7 , Sources and Applications of FNCV's Funds, 1981 *......... 262.8 Sources and Applications of PNCV's Funds, 1982 gooeeeegeo 272.9 Sources and Applications of FNCV's Funds, 1983 o......... 282.10 Sources and Applications of PNCV's Funds, 1984 o......... 292.11 Sources and Applications of FNCV's Funds, 1985 oeeee.e..e 30

3.1 Actual FNCV Expenditures 1981-1984 and 1985 Budget andtheir Financing goeoeee.ogoeee oeee oeooeee og.gegoeo 31

3.2 Planned (1986-1992) Rural Road Expenditures and theirn gsCee..eoeeoooeo.oeg ooeeg.e.. oee ooeoeegeeoe 32

3.3 FNCV Rural Roads Investmet and Maintenance Program1986-1992 g.e.ee.e.eoe....eeoo..eo.o.e.eooessoeoeeggoe*e33

3.4 Past (1981-1985) and Planned (1986-1992) Rural RoadsConstruction and Deferred Maintenance Programs ... e.... 34

3.5 Schedule for Consulting Services.....e.o.eue..eoo. ego.eg 353.6 Key Equipment to be Procured under Project g....... oeo*oo 363.7 Estimated Schedule of Disbursements 7Y1986-1993 eoeoo.ooe 373.8 Economic Evaluation of FNCV's First-Year Program (1986) . 38

TABLE OF CONTENTS (continued) - iii -

ANNEXS

1 Main Agencies Involved in Rural Development and Transport 392 smll Domestic Construction Industry 403 FNCV Equipmn ent .e.e .. 424 Past and Ongoing Operations in Transport 455 Detailed Project Description 466 Project Execution, Auditing and Monitoring 507 Departmental Rural Roads Study and Term of Reference ... 538 Terms of Reference for Technical Assistance for

Institutional Efficiency Improvenents .... .............. 559 Outlined Methodology for Economic Evaluation ............ 5810 Selected Documents and Data Available in the Project File 65

CHR1 PNCV's Organizational Structure ........ 66

MAPSIBRD 19296 - Location of Road Works 67IBRD 19297 - Location of Waterways Improvements .................. 68

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

I. PROJECT SUMMARY

Borrower: Fondo Nacional de Caminos Vecinales (FNCV)

Guarantor: Republic of Colombia

Amount: US$62 million equivalent

Terms: 17 years, including four years of grace, at the standardvariable interest rate.

Project The project objectives are to: (i) support the Government'sDescription efforts on agricultural development, diversification andand Benefits: export promotion, and to integrate less developed areas into

the mainstresm economy; (ii) improve efficiency and reducecosts of rural transport; (iii) upgrade FNCV's institutionalperformance; and (iv) develop, or a pilot basis, moreefficient conditions for small-scale water transportation in aselected coastal area. The project consists of a subsectoroperation to support FNCV'a 1986-1992 Investment andMaintenance Program (FNCV's Program) and comprisesconstruction, deferred and periodic maintenance of ruralroads, imnprovement of minor waterways, equipment procurementand. technical assistance for institutional upgrading andpreparation of a study on departmental road maintenance.Specific work programs for financing under the loan would beselected annually out of FNCV's Program, in accordance withagreed criteria. Major benefits are expected from value addedto. agricultural production and lower rural transport costs.Direct beneficiaries would be: (i) small farmers, for whomaccess to markets would be improved and modernized; and(ii) the isolated communities in the Pacific coastal region,for which small scale water transportation would be made saferand cost effective.

Risks: The project faces no major technical risks. Other risks arerelated to FNCV's relative inexperience with construction andrehabilitation of minor waterways, the possibility of slowimplementation of measures to improve the institutionalefficiency of FNCV and timely availability of counterpartfunds. Strict monitoring of the waterways and TechnicalAssistance components are deemed sufficient to keep the firsttwo risks at acceptable levels. Timely availability ofcounterpart funding, which had been a recurrent problem in theprevious project with FNCV, is being dealt with in this loanthrough specific arrangements to ensure consistent release ofcounterpart funds through a Project Account.

2

Costs and The total cost of FNCV's Program is estimated at US$362 millionFinancing: equivalent with a foreign exchange component of US$182 million

equivalent. The proposed loan of US$62 million would finance 17Z ofthe total Program and 34Z of its foreign exchange component.

FNCV's Investment and Maintenance Program 1986-1992 and the Bank Project(in current US$ million equivalent)

FNCV 1986-1992 Program Bank ProlectTotal Local Foreign Total Local Foreign

Component:Investments 123.0 63.7 59.3 33.0 15.4 17.6Maintenance of which: 137.5 75.9 61.6 44.1 23.4 20.7Deferred and Periodic 109.5 56.2 53.3 44.1 23.4 20.7Routine 28.0 19.7 8.3 - - -

Equipment 9.6 0.8 8.8 7.1 0.6 6.5Technical Assistance 1.0 0.5 0.5 1.0 0.6 0.4Base Cost 271.1 140.9 130.2 85.2 40.0 45.2

Contingencies 90.8 39.2 51.6 27.3 10.5 16.8

Total 361.9 180.1 181.8 112.5 50.5 62.0

Financing PlAn:FNCV 223.9 171.7 52.2 50.5 50.5 -IDB Loans 20.4 - 20.4 - -DRI Program 22.4 8.4 14.0 - -

IBRD Loan 1966-CO 8.4 - 8.4 - --

Proposed Loan 62.0 - 62.0 62.0 - 62.0Loans to be Arranged 24.8 - 24.8 - -

Total 361.9 180.1 181.8 112.5 50.5 62.0

Disbursements 1987 1988 1989 1990 1991 1992 1993(IBRD FY in US$ million)

Anrual 6.0 10.0 12.5 12.0 10.6 7.6 3.3Cumulative 6.0 16.0 28.5 40.5 51.1 58.7 62.0

Economic The construction and deferred maintenance components of the annualEvaluation: work programs would be evaluated according to agreed economic and

technical criteria and yield a mininum 12X economic rate of return.The periodic maintenance component of the annual work progrm wouldbe approved based upon technical evaluation of road conditions,population served and traffic level. The estimated ERL for theroad construction, deferred maintenance and canals included in thefirst year program (1986) is 211.

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II. THE TRANSPORT SECTOR AND RURAL TRANSPORT

A. Characteristics

2.01 Colombia's advantage of having coast lines on both the PacificOcean and the Caribbean Sea is largely offset by the difficulty of movementbetween the coasts and the interior. The three massive ranges of the AndeanMountains running the length of two-thirds of the country present formidableobstacles to comunication among its main population centers, which, untilrecently, developed as separate and somewhat isolated regions. The MagdalenaRiver, until the mid-century, provided the only overland route between theCentral region and the Caribbean coast and, even so, with serious navigation-al problems during the dry season. In the 1950s, however, under a drivetoward integration and modernization, the transport system began to evolveinto a national network. The developmaent of the country's railways, trunkhighways and civil aviation has greatly improved inter-regional coiunicationand national integration but rural transport remins relativelyunderdeveloped.

2.02 The effort to establish the basic transport infrastructure absorbeda considerable proportion of the country's public investment. Transportrepresented about half of the Central Government's investment in the late19509. More recently, with the basic infrastructure in place, transport'sshare has declined, and, since the late 1970s, it has been around 132. In1984, the transport sector accounted for some 8Z of the GDP, compared toabout 5Z in 1950. In the same year, the country's domestic surface transportsystem moved 25.4 billion ton-kI of freight, of which 88S by road, 5Z byinland navigation, 41 by coastal shipping and 3Z by railways. Roads andaviation dominate passenger traffic, accounting respectively for 712 and 27Zof total demand, estimated at 17,250 million passenger/km in 1984.

B. Infrastructure

2.03 Colombia has a road network of about 100,000 km (10,500 km paved),of which 25,100 km comprise the national highway system, 48,500 km aredepartmental roads and 24,400 km are rural roads (Table 2.1). Nearly 2,000km are private roads used mainly for timber and mining operations. Theplanning, construction and maintenance of the national roads network areperformed under the Ministry of Public Works and Trassport (MOPT) through itsNational Highway Fund (FVN) and National Rural Roads Fund (FNCV), in charge,respectively, of the national highways and the rural roads. The departmentsconstruct and maintain their own roads through their Secretariats of PublicWorks. In practice, however, departmental road maintenance is generally poorand varies considerably from department to department.

2.04 The railways system consists of 3,403 km (2,822 km currently inservice) of single track narrow gauge (0.914 meters) lines administered bythe Colombian National Railways (CNR), a semi-autonomous state-owned agency.The trunk line between the Caribbean port of Santa Marta and Medellin-Bogotain the central highlands is 1,287 km long and carries over 70S of the totalrailway traffic. The Pacific line (187 km) serves only the Department ofValle, connecting the port of Buenaventura to the city of Cali.

2.05 The Magdalena and Cauca rivers, together with the man-_mde Canaldel Dique (connecting the Caribbean port of Cartagena with the Nagdalena

river), constitute a major transport system totaling 1,366 km of navigablewaterways, which account for almost all inland shipping. The traditionalimportance of inland waterway shipping, however, has decreased with thedevelopment of road and rail transport; the remaining river traffic is mainlyhydrocarbons and other bulk commodities, such as cement and fertilizers,which originates at, or is destined for, the ports of Cartagena andBarranquilla. River transport moved about 2 million tons of freight in 1984,roughly the same volume as 30 years ago. Administration and maintenance ofinland waterways are under the jurisdiction of MDPT. Freight services areprivately operated.

2.06 Aviation in Colombia developed early in the 1920s, induced by theadverse topography and the inherent difficulties of surface transport. Airtraffic is now a major passenger transport mode for both international anddomestic traveling. There are presently -in the Colombian territory 70airports whose standards vary widely. Seven of the airports in mainlandColombia and one on the Caribbean Island of San Andres are equipped forinternational flights. Aviation is governed by the Administrative Departmentof Civil Aeronautics (DAAC), which is directly responsible-to the Presidentof the Republic. DAAC is financed by the National Aeronautics Fund (FAN),whose revenues originate mainly from user charges.

2.07 Shipping supports most of Colombia's foreign trade. EmpresaPuertos de Colombia (COLPUERTOS), the National Port Authority responsible toMOPT, controls all the public ports, namely Buenaventura and Tumaco on thePacific coast, Cartagena, Barranquilla and Santa Marta on the Caribbean Coastand Leticia on the Amazonas River. Total traffic at the public portsamounted to 9.7 million tons in 1984. Most of Colombia's seaborne trade is,and will likely remain, with the U.S., the industrialized European countriesand Japan.

C. Transport Planning, Coordination and Investment

2.08 MOPT is responsible for sector planning, including the preparationof the National Transport Plan, which defines the role of individual trans-port modes based upon demand projections in each subsector. The NationalTransport Plan also outlines investment programs and the correspondingfinancing sources ,-or each subsector. The objectives of the Plan are formu-lated and updated periodically in accordance with the broader goalsestablished by the National Planning Department (DNP) in the NationalDevelopment Plan. DNP also coordinates with MOPT and the subsector agenciesthe programing and budgeting processes for investments in all transportmodes, except pipelines which are the responsibility of the nationalpetroleum company (ECOPETROL).

2.09 The current sector policies, largely shaped to accommodate thetransport investment needs with the constraints arising from the reducedinflow of external resources, the tight fiscal situation and the macro-economic priorities being addressed in the country's economic adjustment pro-gram, emphasize rehabilitation and maintenance of existing infrastructure andequipment, motor fuel substitution, transport safety and intermodal coordina-tion to reduce transport costs and improve efficiency. They also call forinvestment policies consistent with supporting productive and external tradeoriented activities and cost-based pricing policies to mobilize resourcesthrough recovery of investments.

:- ~ ~ ~ ~ ~ ~ 5

2.10 The overall sector financing has showed, in recent years, asonethat stable combination of (a) operating revenues (38Z); (b) earmarkedtaxes on oil products (35Z); (c) budgetary contributions (13%); td) domesticand external credit (71); and (e) other sources (7X). Overall, sectorfunding policy emphasizes financial self-sufficiency for each subsector. Inpractice, however, the implementation of this policy has been weakened,particularly in the case of the railways (which have had to resort tobudgetary contributions to finance operating deficits caused by decliningoperational efficiency) and the existing cross-subsidies between freight andpassenger tariffs in the railways, user charges on light and heavy vehiclesin the highways and import and export-tariffs in the ports. These issues arein the core of the ongoing sector dialogue and are being addressed at theoperational level in the context of the Bank loans for RailwaysRehabilitation (2090-CO), Highway Sector (2121-CO) and Ports Rehabilitation(2635-CO). Also as part of the Highway Sector Project (Loan 2121-CO), acomprehensive study of road-user charges is being finalized. That study willbe reviewed with the Government by June 1986 and an action plan to implementits conclusions will be developed.

D. Fuel Pricing

2611 Colombia has maintained in recent years a policy of annualincreases in fuel prices to reflect corresponding opportunity costs. At theend of 1984 domestic prices of oil products were in line with the relevantinternational levels. However, the accelerated devaluation during 1985 (51%,compared to a domestic inflation estimated at 22Z in the period) created agap that will require two price adjustments during 1986 to realign localprices to international levels. Following a 20% increase on January 1, 1986,diesel and regular gasoline were priced at US$0.61 (equivalent) per gallon,thus about 13% and 20Z, respectively, below equivalent international levels.If this difference is not offset by the current downward trend in interna-tional oil prices, a further increase should be expected in the course ofthis year. Fuel price developments in Colombia are being monitored throughspecific provisions in a Bank loan (2476-CO) to ECOPETROL.

E. Rural Development and Transport

2.12 The expansion of rural transport programs to isolated regions is acentral item of the Government's efforts to extend public services and tointegrate less developed areas into the mainstream economy, increaseagricultural productivity and raise income levels of small farmers. Overone-third of the 27 million Colombian population lives in rural areas anddepends upon agricultural activities. Agriculture provides about a quarterof all the employment and accounts for 20% of the GDP and about 67% of thecountry's total exports. A number of public agencies are involved in makingagricultural support accessible to rural comounities (Annex 1). TheiraCtivities Are coordinated by DNP at the planning level and by the Ministriesof Agriculture and Public Works and Transport at the implementation level.Fondo Nacional de Caminos Vecinales (FNCV) is the public agency responsiblefor the rural transport infrastructure.

2.13 Because the large transport programs to expand and modernize theroad infrastructure during the last 30 years gave priority to developing thetrunk highway system, rural transport in Colombia still remains relativelyunderdeveloped. Only in the wid-1970s did FNCV start systematicimplementation of rural road programs, and, since then, transport access in

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rural areas has increased notably at an annual rate of about 10% (Table 2.2).Notwithstanding the almost trifold expansion of the rural roads networkduring the last decade, the importance of agriculture to the Colombianeconomy requires substantial additional efforts to maintain and improvefarm-to-market accesses.

F. Fondo Nacional de Caminos Vecinales (FNCV)

(i) Organization

2.14 FNCV was created in 1960, and, until the early 1970s it functionedas a secondary entity in MOPT's structure. In 1972, FNCV was reorganized asan autonomous organization under MOPT and charged with planning,construction, and rehabilitation of rural roads. It is directed by aseven-member Board in which the Ninistries of Agriculture and Interior andthe Federation of Coffee Growers are represented under the chairmanship ofthe Minister of Public Works and Transport. FNCV is managed by a DirectorGeneral appointed by the President of the Republic. FNCV's staff of 2,230(Table 2.3) includes 100 engineers, several economists and other specializedprofessionals. The institution enjoys a reputation for efficiency and soundmanagement, which is confirmed by the good performance of the ongoing RuralRoads Project (1966-CO). FNCV has its main office in Bogota and 25 regionaloffices, located in each of Colombia's Departments. FNCV's fiscal audits areperformed by the Controller General of the Republic.

2.15 Most of the existing rural road system has been constructed eithertotally or partially by FNCV. The typical road is about 9 km in length,built to all-weather gravel standard with a riding surface 4.5 m wide. Civilworks are usually contracted to small, local firms which, in general, performsatisfactorily (Annex 2). The quality of the rural road construction hasbeen good. Only a minor portion of rural roads are built by force accountusing FNCV's relatively old equipment fleet (para. 2.17). Despite ENCV'soverall good performance, insufficient planning and inconsistent availabilityof counterpart funds have occasioned interruptions and delays to theconstruction schedules in the recent past. FNCV's planning and programingcapacity would be strengthened under the proposed project (para. 3.12).Chart I presents FNCV's organizational structure.

2.16 FNCV's Sub-Directorate of Engineering is responsible for theprograming and execution of construction and maintenance activities. It iscomposed of three divisions: Projects, Procurements and Contracts, andConstruction and Supervision, which directly supervises works executed by the25 regional directorates. The Sub-Directorate of Administration and Financeis responsible for administrative (personnel policies, training, staffassistance, purchases and supplies) and financial matters (budgetimplementation, financial management, general accounting). It is composed ofthree divisions: Finance, Industrial Relations and Administrative Services.Among the supporting offices, the most important is the Planning Office,which is responsible for preparing FNCV's operational plans, coordinatingthe budget preparation process, evaluating implementation of plans andconducting special studies. FNCV has recently created an Organization andSystems Office to lend support to, and improve the performance of, thePlanning Office and the Engineering Department.

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2.17 FNCV's equipment fleet of 711 units (Annex 3) is used for forceaccount operations to complement the capacity of the construction industry,particularly in remote regions. It is characterized by the old age of mostunits (average 7.5 years) and by the variety of makes and types.Notwithstanding, FNCV's system of assigning to operators the responsibilityfor basic maintenance of the equipment they use and contracting externilservices for major repairs has proved efficient, and its fleet is generallywell kept.

(ii) Rural Roads Activities

(a) Construction

2.18 Since the early 1970s, FNCV has undertaken 10 road constructionprograms that have added, to date, about 19,000 km to the rural roadsnetwork. Five of these programs constituted the major part of FNCV'sactivities in the period: (a) the Ordinary Program, financed entirely withlocal resources, is the largest of FNCV's programs and consists of itsregular and continuous activities of expansion and rehabilitation of therural network. It has been gradually losing its relative importance in favorof other programs with external technical assistance and financing, and wasdown to about one-third of FNCV's total investment program in 1984; (b) theIDB Program, executed during 1970-1978, in which 50 secondary roads weresuccessfully completed; (c) the Pico y Pala labor-intensive program initiatedin 1972 (Ist phase), partly financed by the US Agency for InternationalDevelopment, which was extended in 1981 (2nd Ongoing Phase) with supportfrom IDB; (d) the road component of the ongoing DRI Program (Integrated RuralDevelopment Program I and II) with joint financing of IDB, the CanadianInternational Development Agency (CIDA) and Bank (Loans 1352-CO and 2174-CO),which is expected to have completed about 900 km of rural roads by 1988; and(e) the ongoing Rural Roads Project (Loan 1966-CO), which will haveconstructed about 840 km and rehabilitated about 780 km by its expectedcompletion in mid-1986.

Cb) Maintenance

2.19 According to its statutes, FNCV's mandate had been to maintain theroads it constructed only until the time that the roads could be transferredto Departmental jurisdiction, and, accordingly, FNCV's focus and budget wereoriented mostly to construction. However, because of the additional burdenthat rural road maintenance would bring to their limited resources, mostDepartments have been reluctant to take jurisdiction over the roads. FNCVhas, therefore, been compelled to assume greater responsibility formaintenance, but previous budgetary commitments have prevented a fasterdeployment of adequate amounts and physical resources to this task. FNCVestimates that resources made available in 1985 will permit proper routinemaintenance of about 2,500 km of the network (10% of the total) during theyear, but further reorientation of priorities in the context of the proposedloan should enable FNCV tc catch up in a few more years (para. 3.08).

(iii) Financing and Budgeting

2.20 FNCV's activities are funded through a combination of (a) transfersfrom the National budget on account of earmarked taxes on oil products (53.1Z

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of FNCV's 1985 budget), and special budgetary appropriations (14.8% in 1985);(b) own resources derived from contracts to build roads on behalf ofDepartments or other entities (2.71 in 1985), a portion of the tax on beerconsumption (1Z in 1985) and nominal levies on land improvements broughtabout by rural roads (0.2% in 1985); and (c) multilateral loans and bilateralaid (28.2% in 1985). Table 2.4 presents FNCV's financing sources in 1985 andTable 2.5 shows projections of domestic sources to FNCV's 1986-1990 budget.

2.21 Although the major portion of the transfers from the nationalbudget to FNCV are binding through earmarking, the actual release ofresources by the Treasury, in recent years, has been inconsistent with thecorresponding budget appropriations (Tables 2.6 to 2.11), which disturbed theprograming of FNCV's investments, particularly the ongoing Rural RoadsProject. The inconsistency between the approved budget and the actualrelease of funds for FNCV, largely due to the tight fiscal situation of thelast three years, has hampered FNCV's ability to comply with executionschedules. The project presented in the next chapter contemplatesdisbursement mechanisms for both local and loan funds (Project and SpecialAccounts) to minimize the risks of insufficient or untimely project funding.

G. Bank Involvement in the Sector and Lending Strategy

(i) Background

2.22 The Bank has played an important role in the development ofColombia's transport sector. Its involvement dates back to 1949, when atransport sector mission reported the transport system to be in anexceptionally bad condition. Since 1950, the Bank has lent about US$755million in 26 loans to the sector (Annex 4). These investments supported theconstruction of an integrated higbway network and, more recently, havecontributed to the rehabilitation and maintenance of the national network andto the development of improved highway and rural roads organizations. Theyhave also contributed to the construction of over 670 km of the main railroadline, as well as to the rehabilitation of other lines. A domestic aviationproject helped to improve basic aviation infrastructure and subsectorefficiency and planning. A ports rehabilitation project is helping to ensureadequate productivity and services of existing port infrastructure. Theproposed project would be the second Bank intervention in rural transport.

(iU) Sector Strategy

2.23 The Bank strategy for the transport sector emphasizes policy reformand institution-building objectives, including: (a) policies targeted atachieving a more balanced use of existing transport alternatives, throughadequate price signals to consumers and improvements in marketing anddistribution arrangements for key commodities; (b) equitable treatment of thetransport modes, by pursuing cost-based pricing policies; (c) reduction oftotal transport costs, by improving modal interfaces and the efficiency ofoperations within each mode; (d) funding and expenditure mechanisms toreflect the costs of use of existing infrastructure and facilities;(e) investment planning to give adequate priority to export development,agricultural diversification, and energy conservation and substitution, with

emphasis on maintenance and rehabilitation programs; (f) further integrationof the public planning, budgeting and programing processes and strengtheningof the financial and personnel management practices of sector agencies; and(g) Institutional and human resources development, through comprehensivetraining programs at the upper and middle management and operating levels.

(Mi) Sector Lending

2.24 At the project level, the sector strategy is being implementedthrough:

(a) the Rural Roads Project (Loan 1966-C., 1981, US$33.0 million)for construction, rehabilitation and maintenance of ruralroads; institutional objectives of the project include thestrengthening of FNCV's technical and economic capability foridentifying, programing and implementing rural roadssubprojects;

(b) the Seventh Railway Project (Loan 2090-CO, 1982, US$77.0million) for rehabilitation and modernization of the railways;the project supports the implementation of the ColombianNational Railways' (CNR) 1983-1987 investment program and theimprovement of its financial and operational management;

(c) the Highway Sector Project (Loan 2121-CO, 1982, US$152.3million) for rehabilitation, paving and maintenance of theprimary road network; the project pursues sectorwideoperational improvement including the development of abalanced pluriannual highway expenditure program, thesystematic use of economic appraisal methodologies, theimplementation of a pavement management system, training atthe ua- eerial and operational levels and a comprehensivestudy of road user charges; and

(d) the Ports Rehabilitation Project (Loan 2635-C0, 1985, US$42.8million) for reconstruction, repair and raequipping of portfacilities, and substantial institutional and operationalstrengthening components; t1b project includes major reformsto rationalize financial and personnel manag2ment of the PortAuthority.

(iv) Experience with Past Lending

2.25 The performance of these projects so far has been mixed. While theresults with the Rural Roads and B:ghways Projects have been positive and therespective loans have contributed significantly to sector managementimprovements, such as building up of investment appraisal capabilities andmore efficient institutional performance, as well as expansion and bettermaintenance of the transport network, activities involving the Railwayssubsector have fallen short of expectation. The capacity of CNR to overcomeoperational and institutional deficiencie.s arS thus, to recuperatecredibility with users of cargo servicea has not yet materialized. The mainconstraints have been lack of firm vvernment commitment to the necessaryinstitutional reforms, compounded by CNR's poor operational planning and

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insufficient Government counterpart funding for critical capitalinvestments. The fiscal constraints in the last three years have preventedthe Government from making a significant financial contribution to projectinvestments and have limited its financial support to covering CNR's mountingpension payments, which are not backed by any funding provision. Arestructuring or cancellation of the Railways Project is presently beingdiscussed with the Government. The Ports Rehabilitation Project is in itsinitial phase of execution.

III. FNCV'S INVESTMEN1 AND MAINTENANCE PROGRAM AND THE PROJECT

A. Project Origin

3.01 The proposed project builds upon the results achieved under theongoing Rural Roads Project (Loan 1966-CO). It was prepared by FNCV withBank assistance and was appraised in July 1985. The detailed programing forthe road construction, deferred and periodic maintenance components for thefirst year of FNCV's Program has been completed. The waterways component issubstantially prepared with minor engineering details being attended to byFNCV's expert in dredging operations (para. 3.32). Procurement arrangementswere discussed with FNCV and confirmed during negotiations (para. 3.21).Negotiations were held in Washington, D.C. on February 10-11, 1986. TheColombian delegation was headed by Dr. Edgar Urrea Perez, Director General ofFNCV.

B. Project Objectives and Description

3.02 The project objectives are to: (a) support the Government'sagricultural development efforts, diversification and export promotion, andto integrate less developed areas into the mainstream economy throughreducing the backlog of deferred maintenance and expansion of rural roads;(b) improve efficiency and reduce costs of rural transport through adequatemaintenance of the rural roads network; (c) upgrade subsector managementthrough improving the institutional performance of FNCV; and (d) develop, ona pilot basis, more efficient conditions for small-scale water transportationin the Pacific coastal region through rehabilitation and construction ofminor canals linking rivers and estuaries in the area.

3.03 The project (para. 3.12) consists of a subsector operation tosupport FNCV's 1986-1992 Investment and Maintenance Program (FNCV'sProgram). It would finance a slice of FNCV's Program and includeconstruction, deferred and periodic maintenance of rural roads, improvementof minor waterways, procurement of equipment, and technical assistance forinstitutional strengthening and preparation of a study on departmental roadmaintenance. Annex 5 contains a detailed project description and Annex 6shows details of project execution and physical targets.

3.04 Based on the experience under the ongoing Rural Roads Project,technical assistance contemplated under the project would, inter alia, assistFNCV in streamlining the administrative and contracting procedures forroutine maintenance. FNCV would be expected to contract the technicalassistance and provide appropriate counterpart staff in accordance with anagreed timetable (para. 3.31).

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3.05 Since 1982, FNCV has been updating, at irregular intervals, theinventory of roads under its responsibility. Under the proposed project, theinventory would be updated regularly, and e rural road maintenance managementsystem would be implemented to control the deferred maintenance backlog andto institute a regular cycle of periodic maintenance (para. 3.08).

3.06 The proposed project also provides for a study to define a plan ofaction to resolve the serious problem of departmental roads' maintenance.The study will be financed and executed by the National Fund for DevelopmentProjects (FONADE). A preliminary analysis prepared by a Bank consultant,based upon a sample of three representative departments, identified keydeficiencies as follows: (a) lack of trained personnel to administer theoperations of the departmental road systems; (b) insufficient funding andinefficient use of available resources; (c) frequent turnover of keypersonnel; and (d) inadequate financial and technical control over theoperations of the departmental roads. Further details on the status of thedepartmental roads are presented in Annex 7. It was agreed duringnegotiations that the departmental roads maintenance study would be executedaccording to terms of reference, schedule and employment of consultantsacceptable to the Bank.

C. Rationale for Bank Involvement

3.07 The Bank's involvement in rural transport in Colombia has focusedon institutional building and upgrading subsector management. The proposedoperation would consolidate the institutional and operational improvementsinitiated under the ongoing Rural Roads Project, now in its completion stage(mid-1986), develop further FNCV's investment planning, programing andimplementation capacity, and deepen FNCV's policy focus upon enhancingproductivity of existing infrastructure (Annex 8) through adequatemaintenance of rural transport infrastructure and preservation of pastinvestments (para. 3.12).

D. FNCV's Rural Roads Investment and Maintenance Program (1986-1992

3.08 Analysis of FNCV's expenditures from 1981 through 1984 (in constant1984 prices, Table 3.1), indicates that road investments increased by 8Zfrom Col$ 2.77 billion to Col$ 5.09 billion, while recurrent expenditures onroutine maintenance rose fourteen times from Col$ 11 million to Col$ 162million. Considering that the size of the network increased from 18,177 kmto 22,892 km during the same period, maintenance expenditures per km roseeight times from about Col$ 610 to Col$ 7,081 (equivalent to about US$70 perkm). Past expenditures on routine maintenance were clearly belowrequirements. Mainly to compensate for the results of inadequate routinemaintenance, an estimated 30% of the 1981-1984 investments were oriented torehabilitation. Under FNCV's 1986-1992 Program, routine maintenance would bestrengthened, and regular cycles of periodic maintenance would be implementedto control presature and excessive road degradation. Outlays for maintenancewould improve under FNCV's Program, with maintenance expenditures per kmincreasing from the current US$70 to about US$200 by 1992. While the shiftto greater emphasis upon routine maintenance corresponds to sectoralpriorities, FNCV would ensure that the funds for programed routinemaintenance are appropriated to execute the agreed physical targets. Inorder to facilitate monitoring of these targets, FNCV agreed duringnegotiations to adopt, by December 1986, an adequate system for measuring

- 12 -

progress of civil works, and to update the rural roads inventory accordingly,by December 1987, and annually thereafter.

3.09 Base cost estimates for FNCV's Program are shown in constantDecember 1985 prices in Table 3.2. The table includes expenditures foradministration and debt service, representing, respectively, 13Z and 16S ofthe total. This reflects a significant overhead cost reduction as comparedwith the 1970s, when administrative expenditures amounted to around 40S ofthe annual budgets. Out of about US$271 million programed for constructionand maintenance, about 451 goes to construction of rural roads and waterways(including engineering and supervision);, about 511 for deferred, periodic androutine saintenance; less than 41-for equipment procurement and 0.35S forconsulting services. The amounts programed for rural roads constructionwould decrease progressively from 451 in 1986 to 41S in 1992. During thisperiod, vhile expenditures for deferred maintenance would decrease slightlyas the existing backlog is brought under control, expenditures for periodicand routine maintenance would ore than double in real terms.

3.10 The relationship between the Bank project and FNCV's Program isdetailed In Table 3.3. FNCV's Program foresees, on average, about US$51.7million equivalent in annual outlays compared to an average of US$47.7million during the last three years. While the higher average amounts ofannual investments do not represent a dramtic increase, the differentcomposition of FNCV's Program (Table 3.4)-less emphasis on relatively morecapital intensive construction and a substantial increase in deferred andperiodic maintenance works-will demand significantly more planning,management and monitoring capacity on the part of FNCV. Based on theexperience under the ongoing Rural Roads Project, FNCV's overallInstitutional capacity has proven satisfactory and demonstrated a sound basisupon which to develop further its works execution capabilities. Theproject's institutional upgrading component (para. 3.12(g)) has been designedand timed to permit FNCV to develop in the early years of the Programexecution sufficient capacity to carry it through completion. Duringnegotiations, FNCV: (a) confirmed the composition and amounts of annualinvestment and maintenance targets in FNCV's Program; and (b) agreed on thescope and timing of the semi-annual reviews of the Program, includingachievement of the Program's targets.

E. Costs and Financing

3.11 The total cost of the FNCV'a Program is estimated at US$362million, with a foreign exchange component of US$182 million. The proposedloan of US$62 million would represent 17% of the total cost of FNCV'sProgram and 34Z of its foreign costs (Table 3.3). The balance of theforeign costs would be met by the ongoing Bank Loans 1966-CO and 2174-CO (DRIprogram) and the IDB Pico y Pala (2nd Phase) loan. The small remainingportion (141) of the foreign costs would be met by additional external loansto be secured in due course during implementation of FNCV's Program. It wasagreed during negotiations to retroactively finance US$0.9 million worth ofurgent works on two roads included in the first year program. These roadswere destroyed during the November 13, 1985 eruption of the Nevado del Ruizvolcano.

3.12 The main components of the proposed project would be:

(a) rural roads construction comprising of engineering, execution andsupervision of about 251 of FNCV's Program to provide access toisolated agricultural areas;

- 13 -

(b) deferred maintenance comprising of engineering, execution andsupervision of about 24Z of FNCV's Program to restore neglected roads tonor-al maintenance standards;

(c) periodic maintenance comprising of engineering, execution andsupervision of about 61X of FNCV's Program to bring up the roadmaintenance backlog to satisfactory standards;

(d) waterways iuprovements comprising of engineering, execution andsupervision of works to improve efficiency and safety of sa-ll cabotageoperations and coastal navigation in the Pacific coastal region, in twophases: about 26 km of minor canals in Phase I (Map IBID 19297) in theDepartment of Cauca, and depending upon its results, another 34 km inPhase II to complete a rudimentary network of protected waterways in theregion;

(e) equipment comprising of about 74% of FNCV's equipment procurementprogram and mainly consisting of: equipment units and spare parts tocomplete and rationalize the maintenance equipment fleet; a helicop-ter 1/ for supervision of works and surveys in areas with difficultaccess; and units to equip the Planning Office and to implement themaintenance and management system in the Engineering Department;

'f) departmental roads maintenance study to be financed by FONADE, wouldevaluate the uinntenance needs of roads in selected departments 2,propose a plan of action for organizing the delivery of maintenanceservices, together with the quantity and quality controls, financial andappropriate funding mechanisms (Annex 7); and

(g) institutional upgrading comprising of technical assistance to:(i) develop technical capacity of the Planning Office; (ii) implement arural roads maintenance system in the Engineering Department forplanning, scheduling, executing and costing maintenance operations; anequipment management system; and strengthen contract administration andwork supervision (Annex 8); and (iii) develop on-the-job training forFNCV's staff.

For costing purposes, the project components are grouped into: (a) investment;(b) maintenance; (c) equipment procurement; and (d) consulting services.

3.13 The estimated cost of the Bank project is about US$112.4 millionequivalent, with the local and foreign costs divided into broad categories shownon the following page.

1/ The inclusion of the helicopter in equipment procurement is based on theanalyses and comparison of the net present values of the various rental vs.ownership options taking into consideration full ownership costs and the variousfeasible helicopter usage projections.2/ The study would concentrate on the following representative departments:Atlantico, Boyaca, Cordoba, Cundinamarca and Valle. They reflect the typicalclimatic and topographic conditions as well as the range of technical, financialand institutional characteristic of the departments in the country.

- 14 -

- - Foreign CostZ of Z Foreign Cost

Totall/ Local Loan Total of 1986-1992Cost Cost Amount Cost Program

(US$ -mllion at constant December 1985 prices)

1. Investment 33.0 15.4 17.6 53 30Rural Roads Construction 29.0 13.3 15.7 54 28Waterways Improvements 1.7 1.0 0.7 44 100Engineering and Supervision 2/ 2.3 1.1 1.2 50 39

2. Maintenance 44.1 23.4 20.7 47 34Deferred Maintenance 14.4 6.9 7.5 52 24Periodic Maintenance 28.6 16.0 12.6 44 69Engineering and Supervision 21 1.1 0.5 0.6 50 100

3. Equipment 7.1 0.6 6.5 92 74

4. Technical Assistance 1.0 0.6 0.4 50 100Institutional Efficiency 0.7 0.3 0.4 50 100Dept. Roads Maint. Study 31 0.3 0.3 0.0 50 100

5. Base Cost 85.2 40.0 45.2 53 35

Physical Contingencies 7.7 3.9 3.8 50 31Price Contingencies 19.6 6.6 13.0 66 33

6. Total 112.5 50.5 62.0 55 34

1/ Amounts rounded to the nearest US$100,000./ Engineering 2.5Z and supervision 5Z of rural roads construction, waterways

improvement and deferred maintenance.3/ To be financed by FONADE.

3.14 The foreign exchange component of civil works was estimated consideringthe cost of imported equipment, fuel and materials required for the execution ofeach type of operation. Because of the upward adjustment in the real exchangerate during the last two years, the foreign cost in this project is slightlyhigher than the one observed in the previous rural roads loan. The estimated costof foreidgn goods to be procured under the project reflects the exemption of customduties granted to FNCV and the real costs of customs clearances for Governmentinstitutions. The foreign cost of consulting services was estimated at 50S,taking into account that the income and remittal taxes on foreign consultants'fees (to be paid by FNCV) amount roughly to 50% of the gross fees.

3.15 Physical contingencies of 1OZ have been considered for all civil works,engineering, execution and supervision costs of FNCV s Program and the project.Price contingencies, based on December 1985 prices, were calculated according tothe following projections:

Adjustment Indexes 1986 1987 1988 1989 1990 1991 1992

Foreign Costs (MUV) 0.07 0.07 0.075 0.077 0.076 0.045 0.045Domestic Costs 0.20 0.18 0.18 0.18 0.18 0.15 0.15

- 15 -

3.16 FNCV prepared the cost estimates for civil works based upon currentcosts for such operations by force account and by contract. Cost estimatesfor equipment and vehicles were prepared based on FNCV-suppliedmanufacturers' quotations and real costs of port and customs clearances coststo be paid by FNCV. The cost for consulting services was estimated based onmarket rates for local and foreign consultants. Intended deployment ofconsultants is shown in Table 3.5.

F. Execution and Procurement

3.17 Execution of the project would be under direct responsibility ofFNCV, except for the Departmental roads maintenance study, which would beexecuted by FONADE. During negotiations, it was agreed that: FONADE wouldcomplete the financial arrangements for the execution of the Departmentalroads maintenance study by June 30, 1986; and (ii) FONADE would mDbilizeconsultants to execute the Departmental roads maintenance study by November1, 1986. Details on project execution are given in Annex 6.

3.18 Procurement of items to be financed under the proposed loan wouldbe as follows:

Procurement Method 1/(US$ million)

YCB LCB Other Total CostCivil Works - 87.7 11.4 99.1

- (47.4) (5.0) (52.4)Equipment 7.4 0.5 - 7.9

(6.7) (0.4) - (7.1)Tech. Assistance and ConsultantServices (Engineering and Superv.) - - 5.5 5.5

- - (2.5) (2.5)

Total 7.4 88.2 16.9 112.5

(6.7) (47.8) (7.5) (62.0)

1/ Amounts in parentheses show the allocations from the proceeds of the loan.

3.19 Civil works for construction and deferred maintenance of roads andfor construction and rehabilitation of waterways, totaling US$61 million(including contingencies), would be carried out through about 160 contractswith an average cost of less than US$400,000 and none of them exceeding US$1million. Because of the small size and limited scope of these contracts andtheir distribution in space and time (unlikely to attract foreign bidders),they are expected to be let through locally advertised competitive biddingprocedures, on terms satisfactory to the Bank and in accordance with thearrangements in use for the ongoing project with FNCV. About 70% of periodicmaintenance, representing some US$26.7 million would be executed throughabout 400 contracts averaging US$70,000 and none of them exceedingUS$150,000. These contracts would be awarded based on competitive localbidding (without advertising) satisfactory to the Bank, on the basis ofevaluation and comparison of bids invited from a list of at least threequalified contractors. FNCV would ensure a wide distribution of biddingopportunities. About 30% of periodic maintenance, representing some US$11.4million (including contingencies), would be executed by force account,comprising small works scattered in isolated regions, for which studies haveindicated that force account is more economical than contracting. Theseforce account works would represent about 10% of the project cost. During

- 16 -

project implementation, FNCV would improve its contracting procedures forperiodic maintenance, and force account operations would not increase in thefuture. The efficiency of force account in periodic maintenance operationswould be monitored closely during project supervision (Annex 8).

3.20 Equipment amounting to about US$7.4 million (includingcontingencies) would be procured through international competitive biddLng inaccordance with Bank guidelines for procurement subject to prior approval bythe Bank of all contracts exceeding US$50,000. The procurement program forequipment, indicating lot size and estimated cost, is shown in Table 3.6.Contracts for laboratory and office support equipment, and parts with anestimated cost below US$50,000 up to an aggregate amount of US$500,000, wouldbe procured by locally advertised competitive bidding procedures on termssatisfactory to the Bank.

3.21 Specific agreements were confirmed during negotiations along thelines of the recommendations of the recent review of LCB in Colombia: (a)awards would be to the lowest evaluated bidders; (b) bids for goods would beevaluated on a CIF basis, with freight costs quoted freely by each bidder;and (c) procurement of consultant services would be in accordance with therelevant Bank guidelines and would provide for free and independentparticipation of foreign consultants.

3.22 Procurement of components financed exclusively by FNCV would be asfollows: about 15% of construction and 25% of deferred maintenance consistingof small works scattered in remote areas with difficult access and thereforedifficult to contract, would be executed by force account according toprocedures which, under these conditions, have proven to be morecost-effective than contracting. Thirty-three percent of the routinemaintenance would be executed by force account and 67% by contract (roadmenand microenterprises) under procedures which have proved effective under theongoing project. These procedures would be improved further and expandedunder the proposed project. Force account routine maintenance would diminishfrom 40% to 30% during implementation of FNCV's Program. Some of thereplacement equipment units as well as minor equipment and spare parts wouldbe procured in dispersed purchases spread over seven years under localcompetitive procedures satisfactory to the Bank.

G. Disbursements and Auditing

3.23 The proposed project is expected to be disbursed by December 1992.The disbursement schedule (Table 3.7) of seven years for the proposed loan isabout 18 months faster than the regional disbursement profiles for highwayprojects. It is, however, possible that efficient project implementationwith adequate counterpart financing could reduce the implementation period ofthe project from six-and-a-helf to four-and-a-half years, resulting in lowercontingencies and in a r2duction of the project's cost from US$112 million toUS$106 million. In this case, the loan amount required would decrease toUS$58 million, but the required annual provision of local funds would beUS$11.9 million higher corresponding to US$1.7, 3.5, 3.6, and 3.1 millionequivalent for year 1986 through 1989 respectively.

3.24 Project execution would require disbursements against a largenumber of small contracts and against some periodic maintenance works carriedout by force account. Considering FNCV's satisfactory contracting anddisbursement procedures under the ongoing loan 1966-CO, simple and quickdisbursement procedures would be adopted. Withdrawals would be based onperiodic statements of expenditures. The statements would comprise

- 17 -

expenditures for works executed by contract and for periodic maintenanceexecuted by force account, as vell as expenditures for equipmentprocurement. Expenditures on force account works would be determined byimltiplying the actual physical production by the unit costs for eachoperation with the unit costs being updated from time to time. FNCV'sEngineering Department, with consultant assistance provided *.nder theproposed loan, would prepare the monthly statements of expendiMures andmonitor force account works. These arrangements were confirmed duringnegotiations. Supporting documentation would not be submitted to the Bank,but would be retained by FNCV and made available for review during theproject supervision process and audits.

3.25 In order to reduce the interval during which FNCV would finance theBank's share of project costs with its own resources, a Special Account(revolving fund) in US dollars with an authorized allocation of US$4 million(sufficient for about four months of financeable expenditures) would beestablished in Banco de la Republica. FNCV would be entitled to wiakeperiodic withdrawals from the Special Account at the exchange rate applicableon the day the Special Account is debited. The Bank would replenish theSpecial Account for the amount of withdrawals on account of eligibleexpenditures at the request of the Borrower. To ensure consistentavailability of counterpart funds, a Project Account (revolving fund) inpesos would be established in a local commercial bank, which should maintaina revolving balance sufficient for three months of project expenditures. Theestablishment of the Project Account with an initial deposit equivalent toUS$2.5 million would be a condition of loan effectiveness.

3.26 Withdrawals from the Special Account would be on the followingbases:

(a) 50X of total expenditures for eligible civil works;

(b) 100% of foreign expenditures for the procurement of goods and 90Zof locally procured imported goods; and

(c) OOZ of foreign expenditures for expatriate consultants andtraining fellowships abroad, and 50% of total expenditures forlocal consultants and for the training component.

3.27 FNCV's general accounts and the project's Special and ProjectAccounts would be audited by the Controller General of the Republic. Auditreports would be required annually within four months of the closing of theaudited period.

H. Economic Justification

3.28 All the works included in the first year of the work program (1986)have been subjected to economic evaluation (Table 3.8). The overall economicrate of return on the road construction, deferred maintenance of roads andimprovements of minor waterways (canals) is estimated at 21%. The ERRs onindividual road components vary from 12Z to over 70%. For the canals, theERR is 17% based on distance savings.

3.29 The detailed program for each subsequent year for financing underthe loan will be evaluated in accordance with the procedures and criteria(Annex 9) confirmed during negotiations and would be required to yield aminimum 12% ERR. For portions of the annual work programs to be financedentirely by national resources, at least 85Z of the works would be selected

- 18 -

also based upon the economic and technical criteria confirmed duringnegotiations. Of the remaining 15X, works with estimated costs of overUS$200,000 or over 5 km in length would also be selected based on theforegoing.

3.30 Direct beneficiaries would be: (a) small farmers, for whom accessto uarkets would be improved and modernized; and (b) the isolated communitiesIn the coastal region of Cauca, for which small scale cabotage operationswould be ade safer and cost effective. Project benefits would accrue from:(a) the incremental value added derived from increases in agriculturalproduction and avoidance of crop losses ihich could not be marketed for lackof reasonable faru-to-market access; (b) reduction in transport costs; and(c) safer small scale cabotage operations. Agricultural production increaseswould arise from inputs of extension services and additional lands broughtunder cultivation with the aid of improved, all weather farm-to-marketaccess. Reduction in transport costs would derive from: (a) improved roadconditions; and (b) shortening of transport distances through theconstruction and rehabilitation of minor canals to interconnect protectedwaterways in the Pacific coastal region. The rural transport industry beingcompetitive, the reductions in transport costs are expected to be passedalong to consumers.

I. Assessment of Risks

3.31 The project faces no abnormal technical risks. 'Other risks arerelated to the possibility of slow implementation of measures to improveFNCV's institutional efficiency, FNCV8s relative inexperience with theconstruction and rehabilitation of minor waterways as provided for in thepilot waterways component, and tilely availability of counterpart funds tothe project. To minimize delays in implementing institutional efficiencymessures and enhance project sustainability, FNCV agreed during negotiationsto: (a) contract the technical assistance and provide the appropriatecounterpart staff to strengthen the Planning Office and the EngineeringDepartment by November 1, 1986; (b) complete the design phases of the systemsfor rural road maintenance management, management of the equipment fleet andthe module to improve contract management, including administration andsupervision of works, by September 30, 1987; and, (c) start implementing thesysteim in (b) preceding by March 31, 1988.

3.32 To ensure smooth implementation of the pilot waterways componentand the use of appropriate construction technology in order to, interalia,minimize adverse environmental impact, FNCV has set up an ad hoc office inthe Engineering Department for supervision, monitoring and control ofprogress of works under phase I. An engineer experienced in dredgingoperations heads the office. A part-time marine ecologist is to be recruitedshortly to assist the engineer, and experienced resident dredge operatorswould control the onsite field operations. This arrangement was confirmedduring negotiations. Execution of phase II would be contingent uponsatisfactory experience under phase I and the incorporation of thearrangements for the supervision and monitoring of works into the EngineeringDepartment.

3.33 To ensure timely availability of counterpart funds to the project,which had been a recurrent problem in past years of implementation of theongoing Rural Roads Project, the following measures would be implemented:(a) FNCV's investment program would be reviewed semi-annually; (b) Bankagreement on the annual program would be contingent upon evidence ofsufficient budget appropriation of local funds for expenditures during the

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year; and (c) sufficient counterpart funds to meet three months worth ofapproved works are to be maintained, on a continuing basis, in the ProjectAccount (revolving fund) referred to in paragraph 3.25.

IV. RECONMENDATIONS

4.01 During negotiations, the following were agreed upon:

(a) (i) the departmental roads maintenance study to be executed inaccordance with the terms of reference, schedule and employment ofconsultants acceptable to the Bank (para. 3.06); (ii) FONADE tocomplete the financial arrangements for the execution of thepreceding by June 30, 1986; and (iii) FONADE to uoDilizeconsultants to execute the study by November 1, 1986 (pars. 3.17);

(b) adoption, by December 31, 1986, of an adequate system for measuringprogress of civil works and updating of the rural roads inventoryaccordingly by December 31, 1987, and annually thereafter(para. 3.08);

(c) the scope and timing of the semi-annual reviews of FNCV's 1986-1992Program including achievement of the Program's targets(para. 3.10); and

Cd) (i) contracting of the technical assistance and provision ofappropriate counterpart staff to strengthen FNCV's Planning Officeand the Engineering Department by November 1, 1986; (ii) completionof the design phases of the systems for rural road maintenancemanagement, management of the equipment fleet and the module toimprove contract management including administration andsupervision of works, by September 30, 1987; and (iii) implemen-tation of rural road maintenance management, management ofequipment fleet and improvement of contract management to start byMarch 31, 1988 (para. 3.31).

4.02 During negotiations, the following were confirmed: (a) thecomposition and amounts of annual investment and maintenance targets in the1986-1992 program (para. 3.10); (b) local competitive bidding procedures(para. 3.21); (c) arrangements for disbursements, updating of force accountmaintenance unit costs, preparation of monthly statement of expenditures andmonitoring of force account works (para. 3.24); (d) economic and technicalcriteria for the appraisal of annual work programs (para. 3.29); and (e) thearrangements for supervision, monitoring and control of vorks for the pilotwaterways component (para. 3.32).

4.03 Suitable agreements and assurances having been reached on thesubstance of paragraphs 4.01 and 4.02, the proposed project is recommendedfor a Bank loan in the amount of US$62 million on standard terms andconditions at variable rates including retroactive financing for urgent worksnot to exceed US$0.9 million in total (para. 3.11).

4.04 Loan effectiveness would be contingent upon FNCV's opening of aProject Account (para. 3.25) with an initial deposit of US$2.5 millionequivalent.

February 1986

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TABLE 2.1

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Road Network (km)(1985, excluding Municipal Roads)

Pdy See.ay ad Iul Totuln Uaed Tdal Be Ud Total b eed Td l

Natlionl 9,394 15,681 25,075 9,394 15,681 25,075

1 tuta1 . 1,000 47,503 48,503 1,000 47,503 48,5D

dW 24,441 24,449 - 24,449 24,449

Pdvate i/ 2,000 2,000 - 2,000 2000

Total 9,394 15,681 25,075 1,OOD 73,952 74,952 10,394 89,66a 100,027

M; Mtitly for tibr and wl.urg.

Sm,ce: MWT and MU

December 1985

- 2 - TABLE 2.2

COLOMBIA

RIRAL TRANSPORT SECTOR PROJECT

Growth of Non-Interstate Roads (1975-1985)

(kin)

ad

- X

E-

_ ~~ -T - - W - - " _

Kilometers of Roads

Year Departanent Municipal Rural Roads 1I/

1975 32,398 3,210 9,0201976 21,184 4,826 10,0881977 30,582 4,023 14,6851978 33,875 3,525 15,3871979 40,315 4,456 16,2851980) 46,312 7,319 17,1371981 46,709 8,410 18,1771982 46,820 9,509 19,7741983 46,933 9,937 21,0071984 47,045 10,384 22,8921985 48,503 10,851 24,49

11 Under the resporsibility of Fondo Nacional. de Caminos Vecinales.

Source: KOPT and FNCV

December 1985

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TABLE 2.3

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

FNCV's Headquarters and Regional Staff

Number

Director General 1Secretary General 1Assistant Directors 2

Subtotal 4

Regional Directors 25Chiefs (Section or Office) 71

Subtotal 96

Specialized Profeasionals 122Technicians 119Temporary Professionals 122

Subtotal 363

Secretarial and Clerical 324Others 1,443

Subtotal 1,767

TOTAL 2,230

Source: FNCV

December 1985

-23- TABLE 2.4

COLOMBIA

RuA TRANSPORT SECROR PROJECT

Sources of FNCV9 1985 Budget(Col S uillou)

Own kQsources (3.9Z)Other 14ultiiational 31.2Z

Rural Roads ProJect (17. 1Z)

National Budget (67.8Z)

Source Co! million

Own Resources 255.0

Beer Tax 68.2Land Improvement Levy 10.5Other 176.3

Contribution from National Budget 4,397.0

Fuel Tax 3,440.0Other 957.0

Multilateral Resources 1,829.0

Rural Roads Project 1,107.0IDB 690.0Other 32.0

TOTAL 6,481.0

Source: FNCV and Bank estimates.February 1986

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TABLE 2.5

COLOMPTE

RURAL TRANSPORT SECTOR PRIECT

Projection of FNCV's Funds from Selected Domestic Sources

Contribu-Land Contract tion of Total in

Tax on Improvement with National Col $Year Beer Levy Santander 1/ Fuel Tax Million 2/

Percent

1986 32.60 0.15 2.64 64.61 7,238

1987 31.10 0.17 4.90 63.83 8,702

1988 29.40 0.18 5.67 64.75 10,570

1989 29.34 0.19 6.58 63.89 12,183

1990 28.01 0.19 4.19 67.61 14,673

1/ Long-term contract with Department of Santander.

21 Rounded to the nearest Cal $ million.

Source: FNCV

December 1985

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TABLE 2.6

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Sources and AppIlcatlons of FNCV's Funds (CoIS million)(1960)

Approved Appropriated Approprlated Total ApproprTatedSOURCES: Budget In 1980 In 1981 as of approved

Own Resources 1/ 216.92 83.38 45.15 59

Contribution from Natlonal Budget 1,835.95 1,096.49 568.86 91

Tax on Fuel 1,194.90 663.70 405.05 89Other 641.05 432.79 163.81 93

Loans and Other Sources 1,447.42 1,191is .8- 82

iOTAL 3,500.29 2,371.76 614.01 85

Executed Ex cuted Total ExecutedAPPLICATIONS: Budgeted In 1960 In 1981 as I of Budgeted

Administration 424.32 348.60 7.55 84

Specific Programs 2,853.00 1,299.19 669.57 69

1. Ordinwrlo 815.08 480.02 147.89 772. Integrated Rural Developrent 930.78 474.12 185.08 713. Pico y Pala 207.10 121.80 29.87 734. Auxilles Necionales 34.88 10.59 8.21 545. Mainteanoee 21.34 7.35 2931 456. Special ProJects 843.82 205.30 296-20 597. Rural Roads 2 / - - -

8. Studies - -

Other Invest.n ts 192.04 32.27 144.75 92

Debt Service 30.92 23.50 - 76

TOTAL 3,500.28 1,703.56 821.87 72

I/ Taves on Beer and Land lmprovement Levy_I Loan 1966-00

Source: FNCV

Decmber 1985

- 26 -

TABLE 2.7

CMLOSIA

RURAL lRANSPT SECTO PROJECT

Sourn and Appllcations of FNCV's Funds (CoIS oiliton)

Approvd Apprcprtated Appreproated Total ApproprietedSOURCES: Budget to 1981 In 1962 as S of approved

Own ReSces 1/ 149.27 197.67 - 133

Contribution from Nnationl Budget 2,592.28 1,632.57 847.14 96

Tax on Fuel 1,973.03 1,338.26 557.96 97O"er 619.25 294.32 289.18 95

Loas and Other Sources 541.98 541.88 - 100

TOTAL 3,293.43 2,372.12 847.14 9B--- - --Total

ExecutedEus d Executed as S of

APPLICATIONS: Bu d In 1981 In 1992 Not Used Budgetd

Adslnistration 417.69 366.12 21.05 30.52 93

SpecIfic Progras 2,670.38 954.57 1,255.41 460.40 83

1. Ordinarlo 1,018.60 629.81 289.77 99.03 912. Interated Rural Oaelop_nt 686.46 105.82 474.83 105.81 853. Pica y Pala 162.90 - 39.63 99.98 23.28 864. Auxillos Nacionales 1l.42 3.11 7.52 0.78 945. Malntenance 6.35 4.20 1.04 1.11 836. Auxilio a las Comunidadas 9.70 5.73 2.95 1.02 907. Special Project 612.45 164.11 276.11 172.23 72B. Rural Roads 2 154.50 2.16 103.21 49.13 699. Studies 8.00 - - 8.00 -

Otr Invesents 1M.22 60.15 82.76 5.31 97

Deb+ ervice 47.14 25.20 - 21.94 54

TOTAL 3,293.43 1,406.04 1,359.22 518.17 85

I/ Taxes on Bar and Land loprovvemnt Levy2J Loan 1966-CO

Source: FNCV

October 1985

- 27 -

TAILE 2.8

COLOMBIA

RURAL TRANSPORT SECIOR PROJECT

Sources and Appilcatlons of FNCV's Funds Colt S million)(1962)

TotalAppropriated

Approved Appropriated Appropriated Appropriated as I ofWS0UFCES: Budpwt In 1962 In 1963 In 1984 "ppoVd

Own R orces 1 / 75.55 60.10 - - to.

Contribution from National Budgwt 2,50.16 1 ,916.09 547.18 - 9_

Tax on Fuel 2,192.91 1,811.21 368.35 - 100Other 370.25 104.88 178.63 - 77

Loans and Other Sources 1,4863.9 175.43 1,072.36 22.21 96

TOTAL 4,122.60 2,171.62 1,619.54 22.21 93

Total Ex -Ex cuted Executed cuted as S

APPLICATIONS: Budp td In 1982 In 1983 Not Used of 8udt

Ad tnistration 434.85 390.78 12.50 31.57 93

SpecifIc Programs 2,960. 1,367.86 1,290.55 302.36 90

1. Ordtnarto 760.99 672.48 61.20 27.31 972. Integrated Rural Developmet 377.01 125.77 205.02 46.25 8B

3. Pico y Pala 744.35 296.54 35.62 92.00 6B

4. Mainteance 62.32 44.69 13.93 3.70 945. Auxillo a las Ccmunidades 0.71 0.15 0.56 - 99.96. Special Projectss 162.71 61.14 90.11 11.46 937. Rural Roads 2J 804.48 161.29 529.11 114.08 86

8. Studies 46.16 5.J0 34.60 7.56 85

Other I nvestents 669.73 78.16 465.14 126.43 82

Debt Service 57.26 47.35 - 9.92 83

TOTAL 4,122.61 1,684.15 1,768.19 470.28 89

-~~~

1/ Taxes on 8eer and Land lmprovement LevyV Loan 1966-0C

Source: FNCY

December 1983

- 28 -TALE 2.9

COL0,eIA

RURAL TRANSPIT SECTOR PROJECT

So5rs and Appllcatots of FNCVts Funds (Col S mIillon)(196311

Approved Appreoprlatd Appreprlated Total AppreprlatedSoIRCES: lludp In 1963 In 1964 as S of approved

Own Resroas 1/ 69.16 74.27 - 108

Contribution frm Natlonal Budgat 5,153.00 2,660.31 1,761.33 a6

Tax on Fuel 2,514.80 2,026.60 454.77 99Ofer 2,638.20 631.70 1,306.56 74

Loans and Otbar Soures 849.61 38.53 758.17 94

TOTAL 6.071.77 2,773.11 2,519.50 8BTotal

ExecutedExecuted Executed as S of

PLICATIONS: Budgd In 1983 In 1994 Not used Budpeed

AclInistration 670.74 586.U 62.43 21.87 97

Specificc Proeras 5,182.36 1,888.23 2.901 .81 392.30 93

1. Ordinarlo 856.66 812.32 27.35 16.99 982. integrated Rural Development 1,759.74 182.11 1,364.62 212.01 a83. Pico y Pala 597.48 296.22 286.17 25.09 964. Aux!lios Noclonales 25.76 9.63 15.96 .15 995. Naintenano 177.19 79.51 33.07 4.61 966. SpecIal PrJets 771.22 144.22 539.56 97.43 897. Rural Roads 2/ 1,040.32 370.39 626.99 43.04 969. Studles 15.00 3.85 8.17 2.99 s0

Other Inv tesvevts 132.00 93.82 24.60 13.58 90

Odebt Servlce 96.67 72.29 - 14.37 84

TOTAL 6,071.76 2,640.78 2,986.84 442.12 93

1/ Taxes on Beer and Land Improwvment Levy2/ Loan 1966-CO

Source: FNCV

Oecember 1985

- 29 -TABLE 2.10

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Sources and Appilcatfons of FNCV's Funds (ColS million)(1984)

Total

AppropriatedApproved Appropriated Appropriated To be as S of

SOURCES: Budget In 1984 In 1985 Appropriated approved

own Resources I/ 200.95 138.86 41.63 20.47 70

Contribution from National Budget 4,661.79 2,950.80 625.80 1,085.19 64

Tax on Fuel 3,152.40 2,810.48 198.52 143.40 90Other 1,509.39 140.32 427.28 941.79 10

Loans and Other Sources 1,144.18 350.47 411.13 382.56 31

TOTAL 6,006.92 3,440.13 1,078.56 1,488.24 58

Total Ews-Executed Executed cuted as S

APPLICATIONS: Budgeted In 1984 In 1985 Not Used of Budgeted

Admlnistratlon 770.06 723.48 37.3-

Specific Programs 4,810.06 2,348.70 2,386.27 70.39 49

1. Ordinarlo 1,012.67 862.42 133.15 12.09 862. Integrated Rural Development 959.27 157.66 762.15 39.46 173. Pico y Pala 639.44 338.79 299.83 .82 534. Auxillos Parlamentarlos 20.10 1.48 18.62 - 8

5. Maintenance 241.15 129.06 109.28 2.82 546. Special Projects 543-24 177.16 355.49 10.58 337. Rural Raods 2/ 1,386.63 680.21 701.91 4.52 49

8. Studies 7.56 1.72 5.84 - 23

Other 1nvestlents 231.69 75.20 156.45 .04 33

Debt Service 195.11 179.60 - 15.52 92

TOTAL 6,006.92 3,326.78 2,580.09 95.16

1/ Taxes on Beer and Land Improvement Levy2/ Loan 1966-CO

Source: FNWV

December 1985

30 -0T 2.11

RO -7ASR ucKMR WRJ

SOurcan APPUcatiLcm of i'V!'s Funds (0ol$ million)(1985)

SORCS: _uy

O 0. Resources 255.0

Oitrlhitixt fimm Neatfnal Budget 4,397.0

'D a Rii 3,440.0Ot. 957.0

Tl and mi Ott.r Sources 1,829.0

~FAL 6,481.0

APPLI M: _ _

A__dn_strat_m 1,030.0

SoKdfic P=grm 4,174.48

1. Ordinario 1,386.02. Integrated Rual Depmeot 832.03. PXCo y Pala 69O.04. ALidios Na1o.u2es5. 123.0am6. Special Proj 438.07. Pia1 2/ 1,1o7.08. Studies 120.0

0tr I 83.0

DEbt Service 657.0

,TAL 6,481.0

'/ al m Ber anrd Land lovsnt IevyI= T1966-CK

Source: FNV

December 1985

- 31 -TABLE 3.1

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Actual FNCV Expenditures 1981-1984 and 1985 Budget and their Financing

(In millilon of ColS)

1/ Funds 2/Actual Expenditures Available

1981 1982 1983 1984 1985

A. EXPENDITURES 3,811.9 4,479.5 5,215.8 6,315.6 7,916.6_ _- _ _ _ _ _

1) DEBT SERVICE 43.1 65.9 86.1 179.6 526.0

EXPENDITURES NETOF DEBT SERVICE 3,768.8 4,413.7 5,129.7 6,136.0 7,390.6

2) ADMINISTRATION 639,5 568,7 708.5 785.9 1.030.0

3) SPECIFIC PROGRAMS 3,129.4 3,845.0 4,421.2 5,350.1 6,360.6

a) Investment 3/ 2.767.7 3,559,7 3,649.4 5.088.2 5,917.6

Pico y Pala 118.9 547.6 759.5 625.0 841.8DRI Program 497.7 829.4 457.9 1,522.3 1,428.0

Program 1966-CO 4/ 3.8 365.3 1,064.1 1,307.1 1,587.5

Ordinary Program 1,330.6 1,328.9 1,033.4 889.8 1,242.0

Others 5/ 816.7 488.5 334.5 744.1 818.3

b) Routine Maintenance _11_1j6 110.5 162.1 220.0

c) Ot her Investments 6/ 350.6 222,2 661,3 99.8 223.0

B. FINANCING 3,811.9 4,479.5 5,215.8 6,315.6 7,916.6__ __ _0 __ __

Own Resources 413.7 111.2 87.9 138.9 255.0

National Budget 7! 2,471.0 4,126.3 3,813.7 5,068.1 5,832.6

Loans and Others 927.2 242.2 1,314.2 1,108.6 1,829.C

C. EQUIVALENT AMOUNTS IN

MILLION US DOLLARS

Total Expenditures 37.6 44.2 51.5 62.5 57.1

Specific Programs 30.9 38.9 43.7 53.0 45.9

1/ Considering overflow of funds from year to year, In constant 1984 prices,

2/ Provisory figures, !n 1985 prices.

3/ Includes about 70% for constructlon and 30% for deferred maintenance.

4/ Includes additional 150 million for periodic malntenance In 1985.5/ Specially funded emergency and community development programs.

6/ Acquisition of physical faIliltIes and equipment.

7/ Includes tax on fuel.

Source: FNCV and Bank estlmales

December 1985

- 32 - TABLE 3.2

3L 3Ms E

nlm~ (11492 d Mowft~m adtiar ?Smuim ifan anobau *a u= a =am bo 1m Pam)

196 57 190 U 191 33

A. D _5J131 57-Sa1 534M SL3L3 SX23.3 SlAM.J W,OEL MUM5

L , su, m 6,69.7 7ID5 7,1.0 8.5A 9.33.A 1031.0 SD% 8 9

or____s___ 3B.3.29 M 45,786A 84476.9 45,9799 47.63.7 48U,4.1 21, 6- - - - - - --

2. 6 3 6.ZLf 6,4n12 6.77L2 7,123.A 7 5 7J175.8 8227 30.1646

3. MEL 8U1 1NflUrAm Wt' A 1 1.5 39.014.2 .3S3.5 351JOA. 39.749 40,1 27IP93

) 15,12J 1.7 EC2 17.957.1 18=3.5 UJ111 2. D 9 D ,37MJ

m Munilak 140.7 VAP.402 16M91 16.52.1 16,83.3 16J.1712 16 115.147D0PICO y bPA I 2,07 1,710.4 - - - - - 4.5611

r1M y PAM H - 4211.7 5,46.8 6750 6357. 6,MD16 6,636 M.6465MM 1 ,811l.9 2,174.3 2.17.3 1.057.1 - - - 7.247.6

E fml 19i6SE 5,426.7 2,103 - - - - - 7,5W.1PI! Pr qO IL= 1,449.5 4,348.50 ,75. 5,7960 5.798. 4.3485 1.49.5 25.2ft_ Pau= T - - - 1815.5 3,63.2 5,435.7 10,1.3

gEinY P a 2.901.9 2,901.9 2,501.9 2,501.9 2,5019 2,591.9 2,811.6 20.2932

* Im.niny 142.5 427.8 5i0.5 570.3 _ _ _ 1.711.0

_ Ia S qpsm 619.5 9752 1,0C7.6 1I,.2 1,.l 791. 666 6 130.1im y Pau I 32. 574.2 574.2 574.2 574.2 574.2 534.2

?. P Tom 236.7 401.0 473.4 467.0 43L.9 217. 72.4 3.<L

b) IM 16.713.0 17,89.2 19,030,1 88.M9 20.42L9 21.914.0 22749.0 137.1

De ln mdm_ 9.713.2 9.1 9.1L 7 9=959 8,1.9 =8.L 7 =2569 6U.M.31 ApX 4.971.7 4511.7 4,X5.7 2,30.9 - - -RO.

: 7 L 16aD 2,91.3 1,0t7.B - - - - - 374.1-7 P - TM 719.7 2,159.1 28.8 28.8 2.878 2.159.1 719.7 11.38.1

-. g Pau= La= - - - - 2.6.8,9 3.59.9 4,5017 10795.6ai- p 1 1,797.5 1,797.5 2.137.5 2,526.2 2.M.2 2,701.3 2,70.3 16.3

Pa~fr bdiina 4,067.3 4.9*.3 5,721.8 6,744.0 7,7657 8.359A 9,401.8 47,30.iW TM 1966 2,8613 - - - - - - 2,861.3

Pnom I TAI 612.3 4,08.7 4,50.2 5,722.5 5,72Z.5 5.77rs 1,O99. 3,632.5Etu Pala 3x_ - - - 817.2 1.C.2 61U.4 8,Mf8okdl- 7 ft 613.7 817.6 817.6 1,011.5 1.6.0 1.228.0 1,430.6 7,.1

- ~ 2JIS6 3,716.8 3,574.3 3,1.1 4.3M. 6.763,9 5S395.5 * ,7

By FM 1,331.1 1521.3 1,711.6 ,6 2,00.9 2,2.2 2,661.9 13,4.Ao§ 67.2 83.1 921.8 1.016.9 1,1J.7 1,202. 1,24.5 7.02.7Ob 111M_m 82.2 8S6 937.9 967.7 1,33 1.210.3 1.429.2 7443,6

Dazw ad _ O 108.0D 15D.0 215.9 215.9 215. 18D.0 35.9 1,7.

c3 196.7 7.0D.6 1 198.1 198.1 13B. ll.l 9.6P y PAU ih - 1,096.2 - - - - -

Pznat 7 7iam i Tm_- 5.768.3 1_4.3 - _ _ 7,136.6y 7 _ 196.7 196.1 198.L 16.1 9.I M15.1 191 1.23

d) CMll511C l5 2/ - 3DI.5 4.6 2.0 - - - 957.11._7 _ - 20L.0 268.0 201 - - -

_wa i -9 biw. S - 103s 186.6 - - - - 27.1

B. C 45.0316 57.6 53, 52,3 5.3 39,630.7 e 3

in low 1.C07.8 55S.1 - - - - - ,9p t no TOM 135.3 2,691.2 21L3" 2,576.7 2,4M65 2,32L2 2.19.9 14,9SL6m P.,B 50.9 5,30.8 5,310.8 2,9U. _ - - 18,605,T1 1966'W 4,169.0 1.621 - - - - 5. 3P TM 1,66.0 11,20.0 8,g98 7,83.8 7,430.2 6179.3 2,0.92 4 4.3Pmlhia 7 1 - - - - 2,743.4 4,223.1 7,85.3 14,A3

33..6 36,0787 37.03.50 38,93.4 42,59.2 45 4 37 20,41.2

I= DIals k&-i W St i d ns ft-l ayt 1MM7n Vmmi WMM, MLt 'A I=aM ad beam 8 .

__ ad 3m y

33 - TABLE 3.3

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

FNCV Rural Roads Investment and Maintenance Program 1986-1992(in millions of US dollars, base cost in December 1985 prices)

Total Local Foreign Cost Proposed LoanCost Cost As Z of As % of Total

Amount Amount Amount Total Amount Foreign Cost

1. Investment 123.0 63.7 59.3 48 17.6 30Rural Roads Construction 115.2 59.8 55.4 48 1/ 15.7 23Waterways Construction 1.7 0.9 0.8 44 0.7 100Studies and Supervision 6.1 3.0 3.1 51 1.2 39

2. Maitenance 137.5 75.9 61.6 45 20.7 34Deferred Maintenance 61.2 29.3 31.9 51 7.5 24Periodic Maintenance 47.2 26.4 20.8 44 12.6 61Routine Maintenance 28.0 19.7 8.3 30 - -Studies and Supervision 1.1 0.5 0.6 50 0.6 100

3. Equipment 9.6 0.8 8.8 91 6.5 74

4. Consulting Services 1.0 0.5 0.5 50 0.4 80Institutional Strengthening 0.7 0.3 0.4 50 0.4 100Dept. Roads Maint. Study 2/ 0.3 0.2 0.1 50 0.0 0

5. Subtotal Program 271.1 140.9 130.2 48 45.2 35

Physical Contingencies 26.0 13.9 12.1 46 3.8 31Price Contingencies 64.8 25.3 39.5 61 13.0 33

6. Total Program 361.9 180.1 181.8 50 62.0 34

Sources of Financing

FNCV Financing 223.9 171.7 52.2 - -Foreign Financing 138.0 - 129.6 - 62.0Ongoing IDB Loan 1.8 - 1.8 - -Proposed IDB Loan 18.6 - 18.6 - -DRI Program 22.4 8.4 14.0 - -IERD 1966-CO Loan 8.4 - 8.4 - -Proposed Loan 62.0 - 62.0 - 62.0Possible Future Loans 24.8 - 24.8 - -

Total Financing 361.9 180.1 181.8 - 62.0

1/ Includes labor intensive construction financed by IDB.2/ The departmental roads maintenance study entirely financed by FONADE.Source: FNCV and Bank estimates.February 1986

QJ4~~~~~~~~~~~~31A~~~* Wi

RRLTR m SElIX P

Past (1981-1985) md Plmued (1986-1992) Rural Roads Crstructio ani Deferred Md nte e g(km)

~~ ~196199 Progrm

1981 1902 1980 1984 1 M TM ta 1986 1987 1988 1989 1990 1991 1992 Total

Pico y Pala 1 48 90 158 116 235 647 90 54 - - - - - 144

Pim y Pala 2 - - - - - - - 118 155 188 178 168 193 1,000

MRI Progam 139 210 49 350 90 838 - - - - - - - -

RI Program - 82 17 406 330 835 300 310 310 180 - - - 1,100

Program Loan 1966-03 - 163 343 335 440 1,281 300 116 - - - - - 416

Program Proposed lam - - - - - - 80 240 320 320 320 240 80 1,600

PEmograz Future lioen - - - - - - - - - - 200 300 400 900

ordimrxy Program 3/ 818 972 783 619 _80 4,072 18D 180 200 220 22D 230 230 1,460

1,005 1,517 1,350 1,826 1,975 7,673 950 1,018 985 908 918 938 903 6,620

/ Soam of the past FEXV records do not distinguish beteem conatruction and deferred maintenance works~/Provlaoy estjmutes.

3/ Exating FNCV force aocount capacity will be tmusfered to periodic and routine maintenamce

Souroe: PNCV and Bs* estlmtes

Deembter 1985

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Schedule for Consulting Services

1986 1987

Man- Months |J P M A M J J A S O N D J F M A M J J A S 0 N D

a b c d e f

Institutional Efficiency Improvements -

Economist, Local 10 F- …------------…------------4Economist, Foreign 6 iSystem Analyst, Local 8 …---------------- -----Road Construction Engineer, Local 10 I---------------- -…----------Road Construction Engineer, Foreign 6 IRoad Maintenance Engineer, Local 10 ----------------------------- wRoad Maintenance Engineer, Foregin 6 I-Equipment Specialist, Local 10 e---------------------------- 4Equipment Specialist, Foreign 6 -

a b c d eDepartmental Road Maintenance Study -

Economist, Local 8 ----------------- -Economist, Foreign 4 1 4Highway Engineer, Local (Two) 12 -------- IHighway Engineer, Foreign 4 -Mechanical Engineer, Local 4 ----------4Public Administrator, Local 6 I--- …

38

a) Selection of Consultants, b) Invitation to Bid, c) Presentation of Proposals,d) Contract Award, e) Start of Program, f) End of Program,

Sourcet FNCY and Bank EstimatesDecember 1985

- 36 - TABLE 3.6

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Key Equipment to be Procured under Project(in units and in thousands of US Dollars)

Equipment for Require- To be Unit TotalCivil Works mients Available Procured Costs (CIF) Cost

Dump-Truck, 4m3 276 186 90 25.0 2,250.0Small Bulldozers, 100 HP 88 68 20 60.0 1,200.0Four Wheel Drive Vehicles 96 64 32 5.0 160.0Lubricating Trucks 24 - 24 30.0 720.0Workshop Trucks 4 - 4 50.0 200.0

Spare Parts, about 10% 450.0

Subtotal 4,980.0

Support Equipment

Office Support Equipment Global 500.0Laboratory Equipment Global 400.0Helicopter 50.0 650.0

Subtotal 1,550.0

Total CIF Cost 6,530.0

Source: FNCV estimates.

February 1986

- 37 - TABLE 3.7

COLOtBIA

RUDAL T3*NSPORL SECTOR PROJECT

Estiusted Schedule of Disburoe nte nt 1986-1993(in millions of US dollars)

r! and quarter Disbursed In CumwlativEndins QuaEr ny Disburvement Z

1987 6.0

Septmber 30, 1986 4.0 a/ 4.0 6.5December 31, 1986 0.5 - 4.5 7.3March 31, 1987 0.7 5.2 8.4June 30, 1987 0.8 6.0 9.7

1986 10.0

Septmber 30, 1987 2.0 8.0 12.9Decmber 31. 1987 2.4 10.4 16.8March 31, 1988 2.7 13.1 21.1June 30, 1988 2.9 16.0 75.9

1989 12.5

Septmber 30, 1988 3.0 19.0 30.6December 31. 1988 3.1 22.1 35.6March 31, 1989 3.2 25.3 40.8June 30, 1989 3.2 28.5 46.0

1990 12.0

September 30, 1989 3.0 31.5 50.8December 31, 1989 3.0 34.5 55.6March 31. 1990 3.0 37.5 60.5June 30. 1990 3.0 40.5 65.3

1991 10.6

September 30, 1990 2.8 43.3 69.8December 31, 1990 2.8 46.1 74.4March 31. 1991 2.6 48.7 78.5June 31, 1991 2.4 51.1 82.4

1992 7.6

September 30, 1991 2.2 53.3 86.0Decemoer 31, 1991 2.0 55.3 89.2March 31. 1992 1.8 57.1 92.1June 31. 1992 1.6 58.7 94.7

1993 3.3

September 30. 1992 1.3 60.0 96.8December 31, 1992 1.0 61.0 98.4March 31, 1993 0.6 61.6 99.4June 31, 1993 0.4 62.0 100.0

Completion of Works: December 1992

a/ US$4.00 for special account

Source: FUCV and Bank estimatesDecember 1985

I I ~ ''I : 'p jiiit In

1 51 l' iii ' Pti55X 5^,Ill11f'"''i iIjl11-lll 5I{gI Iw5iXlllli5i

H I I I ~~~~~~~~~~~~~~~IIII1e ; - ,. . .,.... .,,,,,, ......... X

U4 hv eM 55 -h I"Uh-- f-C f1 5aa UlM5l3.5hlIfll.5 11 3UUS33 1UUN " aUhUUU5U~hUU

{{ sgstts3#tda#ssls#6ts#s#3tz s§3hls{sdz iiXisS4issi4sisisss j

- 39 -

-. -ANNEX I

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Main Agencies Involved in Rural Development and Transport

1. A special unit of DNP adinisters a comprehensive, Bank-assistedintegrated rural development program (DRI) and coordinates supply of creditto farmers, extension services, reforestation, rural electrification, healthand education, and feeder roads. DRI is in its second phase and, as underthe first phase, is funded by The Canadian International Development Agency(CIDA), IBRD (Loans 1352-CO and 2174-CO), IDB and the National Budget.Feeder roads are a minor part of DRI, and their construction is executed byFNCV. By end 1984, about 700 km of roads had been coDstructed under thefirst DRI and 400 km under the second DRI.

2. The major extension and research organization officially involvedin rural developments is the Instituto Colombiano Agropecuario (ICA), whichis responsible for agriculture and livestock deveLopment. ICA participatesin DRI, but its agronomic advice has not always reflected the economicfactors. There are, nevertheless, numerous Government-certified agents inColombia who provide basic extension services.

3. The main agricultural credit institution in Colombia is the Caja deCredito Agrario Industrial y Minero (Caja Agraria), a mixed enterprise withGIC as the major shareholder. Caja Agraria's services to small farmersinclude credit, extension and distribution of agricultural inputs; itimplements the credit component of DRI.

4. Other agencies concerned with rural development and, to a limitedextent, with rural roads include the Instituto Colombiano de Ridrologia,Metereologia y Adecuacion de Tierras (HIMAT), the Instituto Colombiano de laReforma Agraria (INCORA) and the well managed Federacion Nacional deCafeteres (FEDECAFE). ERMAT's rural road activities are minor and areconfined to small, designated areas. INCORA also plays an ancillary note inrural roads in support of its land reform beneficiaries. INCORA has beenfocusing upon the Departments of Caceta and Meta, where it has been titlingpublic lands in designated colonization areas. FEDECAFE, for the benefit ofits members in the coffee-growing areas, contracts rural road constructionwith private contractors or FNCV. The foregoing agencies play a mainly adhoc role in rural roads. Rural roads being ancillary to their mandates, theplans and programs of these agencies address liited needs. To incorporatethe broader national perspective in systematically addressing rural transportneeds, GRC has been developing FNCV since 1960.

December 1985

-40 ANNEX 2

Page 1 of 2

COLONBIA

RURAL TRANSPORT SECTOR PROJECT

Small Domestic Construction Industry

1. There were 1,765 contractors registered with FNCV as of July 1985who can bid for rural road construction contracts. Contractors areclassified by their financial and equipment capability into four classes:45% of the contractors fall into Class I, capable of handling small works upto Col$ 20 million in value, compared with another 45% falling into ClassesII and III, capable of handling works varying between Col$ 20 and Col$ 100million. The remaining contractors are capable of handling large works worthover Col$ 100 million, as indicated by the following figure:

over Cal$ 100 dllion

Ca1l 40-100I§Uon C23. lsUp to ColS 20 -lIUon

(451)

Co1l 20-40 Mlilo(

2. Although data are not up to date, FNCV estimates that the averagecontractor owns approximately US$200,000 worth of equipment and is capable ofbuilding about 5 to 10 km of rural roads per year. It is estimated that theoverall capability of the small contracting industry is equivalent to about3,000 to 4,000 km per year, and that about 50% of this potential is presentlyidle. It is also estimated that about 95Z of the construction actuallycarried out by these contractors is financed equally by FNCV and by thedepartments, with the remaining 5S undertaken by the private sector, e.g.,FEDECAFE. Because of their small size, the contractors are dependent uponregular payments. Otherwise, they suffer a financial burden which may resultin insolvency and disruption of construction.

- 41 -ANNER 2Page 2 of 2

3. The small contractors are not evenly distributed around thecountry; it is estimated that the majority of them are located in a radius of100 km from Bogota. These contractors have little mobility, which producesan unbalanced situation where any bidding for works to be executed in theBogota area attracts about 20 proposals against an average of three to fivefor similar projects in the rest of the country. This situation my producebottlenecks for an ambitious construction program :n all the country. Forthis reason, FNCV has considered complementary alternatives, such as (a) thepico y pala program, which would be used for works located in mountainousterrain with soft material and when there is an abundance of unemployedlabor, and which would represent about 25Z of the 1981-1984 constructionprogram and (b) force account construction in remote areas where contractorsare not available. FNCV's 1986-1992 program would encourage smallcontractors to work in new regions of the country, through better programingand regular payments. Under the proposed project, FNCV would be assisted inimproving the programing of works. Periodic maintenance financed under theproject would be done 701 on contract.

Small Domestic Construction Industry a/

Average ValueFinancial Capacity No. of Contractors Percent of of Contract

(Col$ million) in Category Total (Col$ million)

Up to 20 794 45.0 10.7520 - 40 388 22.0 21.4340 - 100 417 23.6 37.23Over 100 166 9.4 85.75

Total 1765 100.0

a/ Contractors registered with FNCV.

Source: FNCV, Bogota, October 1985

December 1985

-%2 - ANNEX 3Page 1 of 2

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

FNCV Equipment Manageament

A. Equipment Fleet

1. FICV's equipment fleet of 711 units (Table 1 of this annex) isassigned to the Regional Directorates for the execution of force accountoperations for construction, deferred, periodic, routine and emergencymaintengnce of rural roads in their respective areas. These force accountoperations complemnt the capacity of the construction industry, and arecarried out particularly in remote regions. The equipment fleet ischaracterized by the old age and the variety of makes and types because overthe years, FNCV bas acquired equipment in a haphazard way (a) by taking overbatches of equipment financed by other agricultural or rural developmentinstitutions and departmental or mnicipal governments and (b) by coffeebarter agreements, mainly with east Buropean Governments. Only in the lastthree years has INCV been in a position to procure 290 units of equipmentthrough ICB under the ongoing Bank loan. Of the total fleet, 197 units (282)are in satisfactory operating condition, 234 (33Z) are under repair and 280(39Z) should be scrapped, as well as some very old units in good condition orunder repair that demand extremely expensive maintenance. The scrappingprogram for 304 units is shown in the bottom of Table 1.

D. Liuipmsnt Administration

2. The ezisting structure for equipment administration is minimal.There is only one mechanical engineer or technician and a few mechanics ineach regional directorate, physical facilities are scarce or non-existent,and lnveantory and control of spare parts is poor. Beyond the simple, routinerequirements, FNCV has no facillities to do any major equipment repairs. Thearrangements agreed under the ongoing loan for execution of major repair ofFNCV's equipment in NDPT's workshops have not been satisfactory becauseMOPT's facilities are inadequate even for repair of its own equipment.

3. Despite these bleak circumstances, FNCV's equlpment is surprisinglywell kept and performs far beyond average useful life because of thefollowing: (a) each equipment unit is assigned to a specific operator who isfully responsible for its operatLon and maintenance; (b) the ingenuity anddedication of PNCVY' personnel have been able to overcome many of thenegative circumstances described above; and (c) uost of the equlpment repairis done efficiently and at low coat by contract mecanLics under arrangementsin which FNCY provides the spare parts and supplies, and the contractmechanic provides his labor for speciflc tasks and guarantLes the quality of

- 43 -AMNEX 3Page 2 of 2

his labor. This repair contracting systes has the additional advantages ofpreventing the expansion of YNCV staff bound by rigid regulations of theColombian trade union and to allow each specific task to be contracted with amechanic specialized In the corresponding skill. The repair contractingsystem would be further expanded and strengthened under the proposed project.

December 1985

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

FNCV's Equipment Fleet as of June 30, 1985

Age (Years) 27.5 17.5 12.5 7.5 2.5 TotalCondition L/ G R B G R B G R B G R B G R B G R B

Dumptruck I 0 0 0 0 0 8 22 30 30 30 127 45 50 5 84 102 162

Loader 0 1 1 0 1 0 3 4 10 5 5 4 13 16 8 21 27 23

Bulldozer 4 10 8 1 0 0 2 4 7 11 12 6 17 18 3 35 44 24

Agr. Tractor 0 00 00 0 1 2 15 0 0 0 0 0 0 1 2 15

Grader O 0 2 0 0 0 5 5 9. 4 4 35 15 15 5 24 24 51

Compactor 00 O0 00 0 6 6 3 0 0 0 9 11 0 15 17 3

Compresor 0 1 0 1 1 0 0 0 2 0 0 0 16 16 0 17 18 2

5 12 11 2 2 0 25 43 76 50 51 172 115 126 21 197 234 280

Total as of June 1985 28 4 144 273 262 711

1986 Scrapping 28 4 76 42 0 150

1987 Scrapping 3 130 -21 154

Total Scrapping 28 4 79 172 21 304 I1) G - Good R - Under Repair B - Bad

Sources PNCV

December 1985

- 45 -

ANNEX 4

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Past and Ongoing Operations.in Transport

AmountSub-Sector Loan/Credit Year (US$ million) Name

Highways 43-C0 1951 16.50 First Highway84-CO 1953 14.35 Second Highway144-CO 1956 16.50 Third Highway05-C0/295-CO 1961 39.00 Fourth Highway550-CD 1968 17.20 Fifth Highway680-CO 1970 32.00 Sixth Highway

1471-CO 1977 90.00 Seventh Highway2121-CO 1982 152.30 Highway Sector

Sub-Total 377-55

Rural Roads 1966-CO 1981 33.00 Rural Roads

Rural Road Componentsin Agriculture Projects

739-CO 1971 3.80 Caqueta I849-CO 1972 1.60 Second Atlantico1118-C0 1975 5.90 Caqueta II1163-CO 1975 5.10 Cordoba II1352-C0 1976 3.50 Integrated Rural Dev. I2174-CO 1982 9.00 Integrated Rural Dev. II

Sub-Total 28.90

Railways 68-CO 1952 25.00 First Railway119-CO 1955 15.90 Second Railway267-00 1960 5.40 Third Railway343-CO 1963 30.00 Fourth Railway551-CO 1968 18.30 Fifth Railway926-CO 1973 25.00 Sixth Railway2090-CO 1981 77.00 Seventh Railway

Sub-Total 196.60

Aviation 1624-CO 1978 61.00 Domestic Aviation

Pipeline IFC-R76-66 1976 13.00 Loans to PRONIGAS, S.A.2.00 Equity in PROMIGAS, S.A.

Sub-Total 15.00

Ports 2635-CO 1985 42.80 Ports Rehabilitation*

TOTAL 754.85

*Approved November 26, 1985.December 1985

- 46 -ANNEX 5Page 1 of 4

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Detailed Project Description

1. This annex explains the context of the components included in theBank project and listed in paragraph 3.08 of the SAR.

2. The context of components in the Bank project design is as follows:

(a) Rural Road Construction - The proposed project provides for theconstruction of about 800 km of roads in support of the Government's ruraland agricultural development efforts. Access to markets remains difficultand costly for numerous communities. The project roads would link some ofthese farming comunities to markets and consuming centers.

(b) Deferred Maintenance of Rural Roads - About 800 km of roads from alarger FNCV program would be rehabilitated under the proposed project.Rehabilitation is a necessity because, in the past, FNCV concentrated uponconstruction while maintenance received insufficient attention. Thishappened because FNCV was to band over the roads after completion ofconstruction to the departments (States) and, hence, did not develop.uufficient maintenance capacity. With the exception of a few of the moredeveloped departments, the handover of the roads has not occurred. Thedepartments generally do not have the capacity or the resources to mintainthese roads. FNCV's charter, on the other hand, did not, until recently,oblige it to maintain the roads that it could not hand over to thedepartments. Under the ongoing project, some progress has been made inreducing the backlog of maintenance. Under the proposed project, a ruralroads maintenance system would be implemented. Nevertheless, before theroads can be maintained on a regular basis, they have to be brought up to amaintainable standard which would entail minor improvements, construction orcompletion of adequate drainage systems, deep patching and shaping, andregraveling of surfaces. Improved programing and execution of remedial worksshould bring the volume of deferred maintenance under control.

(c) Periodic Maintenance - To keep user costs at acceptable levels andto maximize use of the existing roads over their normal lives, FNCV needs toinstitute a cycle of periodic maintenance by executing minor additionaldrainage works and by reshaping and regraveling surfaces as needed.Depending upon such factors as climate and terrain, a five- to eight-yearinterval between regravelings is an acceptable target for FNCV. Thisimplies that, ideally, between 3,000 km and 5,000 km should be regraveled ayear. Under the proposed project, regraveling of about 5,000 km would befinanced, while PNCV regravels about 2,200 km on its own and develops acapacity to manage regraveling of larger volumes in the future. The use ofprivate contractors for regraveling is being encouraged under the project.About 3,500 km are proposed to be regraveled by contractors and the remaining1,500 km by force account. Although a detailed breakdown of costs is not

- 47 -ANNEX 5Page 2 of 4

available, it is likely that regraveling on contract would be morecost-effective than regraveling through force account.

(d) Waterway Improvements - There is scope for developing efficienttransportation on minor waterways in areas where road building is costly andwater transport is used traditionally as a means of communications and movingfreight. Under the proposed project, a pilot program to improve the use ofexisting waterways will be tested in line with the sector objective ofencouraging optimim utilization of existing facilities. The pilot programwill improve cabotage and navigation safety in the Cauca Region by enablingsmall seafaring craft to make fuller use of protected waters over smaller

transport distances (instead of venturing out to the often rough open seas).The program will rehabilitate existing canals and provide for construction ofa few additional ones to allow passage through protected waters. Localcommunities in the region have, in the past, dug a number of such canals onan artisanal scale; these are in use but need to be scoured and rehabilitatedto modest engineering standards. The program will be implemented in twophases. Phase 1 will be monitored closely to assess the conditions and thecosts under which phase 2 could be executed to complete a rudimentary systemof canals and to assess the feasibility of implementing similar schemes inother parts of the country, particularly in the Choco or the Amazon regions.

The works proposed under the pilot program are well within FNZV'scapacity to supervise/execute. Consultant services are provided to reinforceFNCV's Engineering Department in implementing and monitoring this component.Beyond the aceptable risks associated with the excavation and disposal ofwaterlogged materials in brackish waters, no adverse environmental impactsare expected. The ecological system is not expected to be traumatized by themodest scale of works under the program. Preparation of this component istaking into account the possible environmental implications. Additionally,FNCV has created an ad hoc office headed by an engineer experienced indredging operations. A part-time marine ecologist would assist theengineer. Field operations are to be supervised by experienced residentdredge operators.

(e) Departmental Roads Maintenance Study - In theory, the departmentsdo their own maintenance through their Secretariats of Public Works. Inreality, overall maintenance of departmental roads is deficient. Many of thedepartments lack the resources and capacity to maintain the departmentalroads. MOPT was expected to review the responsibilities for, and theadequacy of, the maintenance organization of departmental roads, but MOPTappears reluctant in assuming leadership to assist the departments topreserve the infrastructure assets and minimize user costs on the sizablesystem of departmental roads. MOPT's reluctance seems to be based upon thepolitical sensitivities and the varying levels of technical andadministrative maturity of the departments.

(f) Procurement of Maintenance and Data Processing Equipment - Tocomplete and rationalize the maintenance fleet; procure a helicopter topermit timely supervision of works; rationalize the parts inventory andimplement the maintenance and management systems in FNCV's EngineeringDepartment and equip the Planning Office; and

- 48 -ANNEX 5a ge 3 of 4

(g) Institutional Efficiency Improvements - FNCV's responsibilitieshave grown significantly and become more complex over the years. These nowinclude the more abstract tasks of planning and programing investments inrural transport infrastructure and its maintenance. However, investmentplanning and programing have not received sufficient attention.Additionally, since 1983, FNCV has been formally responsible for themaintenance of the rural roads. While the volume of work has grown (and willcontinue to grow in amount and complexity), it is unlikely that FNCV'sresources will grow much in the foreseeable future. In an environmentconstrained by the need to increase output with correspondingly fewerresources, FNCV ' management strategy has to rely upon improvinginstitutional efficiency and increasing productivity. Improved planning,programing and effective supervision are essential in this context:

(i) to improve its general administration and planning capacity, FNCVwould carry out the recommendations of the mnagement consultantsunder the ongoing loan and hire additional staff. The proposedproject would provide for consultant service., to assist FNCV inimplementing improved 4investment planning, p.ograming andbudgeting procedures in FNCV'a Planning Office and strengtheningits management information system.

*ii) to improve programing, engineering, contracting and supervision ofcivil works, FNCV is in the process of restructuring and expandingits Engineering Sub-Directorate; this process would be strengthenedfurther under the proposed loan and would benefit from the improvedinformation system above. The Programing Division is beingorganized into separate groups to be specifically responsible foreach one of FNCV's civil works programs under a strong leadershipto ensure satisfactory coordination. The Technical Divisionlspresent achievements in preparing simplified guidelines forengineering of works and streamlining (in coordination with theBidding Committee, the Legal Office and the Financial Division) thebidding, contracting and payment procedures for civil works wouldbe further tested and refined under the proposed project. TheSupervision and Control Division is being reorganized into sevenzones, each one responsible for three to five regiona offices.Satisfactory provisions are being made and and would be furtherstrengthened under the proposed project to streamline the line ofcommand and responsibilities to make works supervision expeditiousand effective. Additionally, under the proposed project, FNCVwould substantially increase the contracting of consulting firmsfor the supervision of works.

(iii) Administration and execution of maintenance would be strengthenedunder the project by FNCV with consultants' assistance throughseveral steps: utilization of the information system to beestablished under the project to provide basic information forefficient programing, monitoring and costing of maintenance

-49- ANNEX 5Page 4 of 4

operations, and for satisfactory equipment management; expansion ofFNCV's improved capability for administration of civil workspreceding the administration of maintenance; improvement of theefficiency of periodic and routine force account operations throughtraining of FNCV's field personnel and participation of FNCV'sequipment operators and mechanics in the training courses beingorganized by MOPT and SENA; expansion and improvement of thecontracting and supervision of the execution of periodicmaintenance by contracting firms and of routine maintenance byroadmen and micro-enterprises; and streamlining of equipmentadministration.

(iv) FNCV's equipment management information system is based uponpartially applied recommendations prepared in the late 1970s by aUnited Nations team for NOPT. However, this system is not applieduniformly in all Regional Directorates, and, therefore, countrywideinformation is not consistent. The master equipment registry issatisfactory, however, monthly equipment control reports areincomplete and vary from region to region, information on equipmentavailability and utilization is unreliable, and spare partsinventory and cost accounting are extremely deficient. Thetechnical assistance to be provided under the loan would assistFNCV to strengthen its equipment management system according toterms of reference described in Annex 10.

December 1985

- 50- ANNEX 6Page 1 of 2

COLOMBIA

RURAL TI NSPORT SECTOR PROJECT

ProJect Execution, Auditing and Monitoring

1. Execution of the project would be the responsibility of FNCV,with the exception of the 'Departmental Roads Maintenance Study,' for whichFONADE would be responsible. This latter study would be carried outaccording to term of reference agreed during negotiations and shown inAnnez 7. FNCV would execute its 1986-1992 Program according to theindividual progrm agread with the corresponding international lendinginstitutions Involved and complying at least with the physical targets shownin Table 1 of this annex. These programs and their execution would bereviewed semi-annually with the Bank. Particular attention will be glven tothe compliance with annual targets for routine and periodic maintenance,which have been set considering the gradual increase of FNCV'a capability,and, in the future, gradual transfer of responsibilities for maintenance offeeder roads from FNCV to the secretariats of Public Works in thedepartments. The corresponding annual budgets will be monitored on the basisof figures indicated in Table 3.2 of this SAR.

2. As a condition of the approval of the relevant components of PNCV'sProgram to be financed under the proposed loan, FNCV would submit to the Bankannual programs based upon agreed economic and technical criteria. Once aprogram has been declared eligible, FNCV would tender and award contractssubject to ex-post review by the Bank. The time allowed for preparation ofbids would be 30 days for tenders having an estimated contract amount aboveUS$0.2 million and 15 days for smaller contracts. A copy of each contract,together with the tender evaluation indicating the award decision, would befiled by FNCV, to be made available for random review by project supervisionmissions. If this review would show that, in a specific case, agreed tenderprocedures were not followed, the Bank would have the right to reject thecontract and to cancel the corresponding amount.

3. For project monitoring, FNCV would prepare quarterly reports forthe Bank providing information on its umintenance and investment budget,including a breakdown by category of expenditures, and by force account andcontract. Force account expenditures should be further broken down by theircost components; unit costs by force account and by contract would becompared; productivity of force account operations would be assessed; length.of roads being saintained and level of maintenance would be documented, andcompliance with agreed project implementation targets, status of selectionand execution of deferred maintenance, and general evaluations of thecondition of the network would be reviewed in the quarterly reports. Thedisbursement schedule also would be reviewed and recommendations made foreventual modifications of the programs and as needed, of the reportingrequirements.

4. In order to monitor progress of the sector project's objectives,FNCV would, at least semi-annually, meet with representatives of the Bari todiscuss and reach pertinent agreements on the following:

- 51 - ANNEX 6Fage 2 of 2

(a) During the first semester of each year, revicef of the results ofthe previous year's program including but not lilited to:

- financial su_mary of implementation of FNCV's Program;

- compliance with agreed construction and maintenance targets forworks financed under the loan;

- economic evaluation of works included in the annual program;

- use and deployment of consulting services;

- review of audit reports and consolidation of disbursementsagainst actual expenditures; and

- comparison of projected and actual loan disbursements.

(b) During the second sesester of each year, the program forthe next year would be reviewed based upon lessons learned in theprevious year and include:

- updated targets and objectives of FNCV's Program;

- proposed investuent and maintenance budget;

- detailed investment and maintenance program for thefollowing year;

- maintenance targets for the following year;

- status of selection of Bank-financed components;

- budget for consulting services; operating costs of helicopter andreview of the operations of the Project Account; and

- the proposed disbursement schedule.

February 1986

-52- ANNEX 6

Table 1

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Annual Physical TArgets of the FNCV Rural RoadsInvestment and Maintenance Program 1986-1992

(_= km)

1986 1987 1988 1989 1990 1991 1992 Total

ConstrurtionRural Roads 410 490 455 458 468 468 463 3,212Pico y Pala 1 g9 -5-- 144Pico y Pala 2 118 155 188 178 168 193 1,000DRI Program 50 60 60 30 - - - 200Loan 1966-CO 150 58 - - - - - 208Proposed Loan 40 120 160 160 160 120 40 800Other Possible Loans - - - - .50 100 150 300Ordinary 80 80 80 80 80 80 80 560

Waterways 5 15 20 20 - - - 60

Deferred Maintenance 540 528 530 450 450 470 440 3,408DRI Program 250 250 250 150 - - - 900Loan 1966-CO 150 58 - - - - - 208Proposed Loan 40 120 160 160 160 120 40 800Other Possible Loans - - - - 150 200 250 600Ordinary 100 100 120 140 140 150 150 900

Periodic Maintenance 1,000 1,200 1,400 1,650 1,900 2,100 2,300 11,550Loan 1966-CO 700 - - - - - - 700P. )posed Loan 150 1,000 1,200 1,400 1,400 1,400 450 7,000OtLr Fossible Loans - - - - 200 400 1,500 2,100Ordinary 150 200 200 250 300 300 350 1,750

Routine Maintenance 5,800 7,060 7,900 9,160 10,420 11,400 12,880 64,700By Force Account 3,500 4,000 4,500 5,000 5,500 6,000 7,000 35,500By Roadmen 1,400 1,800 2,000 2,200 2,400 2,600 2,800 15,200By Microenterprises 980 1,260 1,400 1,960 2,520 2,800 3,080 14,000

December 1985

-53- ANNEX7Page 1 of 2

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Departmental Rural Roads Studyand Terms of Reference

A. General

1. Responsibility for the maintenance of departmental (state) roads inColombia devolves upon the Secretariats of Public Works (SPW) In each of the23 departments. The SPWs, organized along sisilar lines as the Ministry ofPublic Works and Transport (MOPT), are also responsible for the planning,construction and administration of the departmental roads. HDPT is obligedto furnish the departments with technical advice and also transfers a part ofthe proceeds from the Fondo Vial - the National Highway Trust Fund - to thedepartments. The Yondo Vial 's source of revenues is the earmarked tax onmotor fuels. Maintenance of the departmental roads varies with the adminis-trative and financial development of the departments, but is generally poor.

2. A consultant's study of three departments, carried out in July of1985, sbows wide disparities in their organizational, financial and technicalcapabilities for maintaining the roads under their responsibilityeffectively. With the exception of three or four developed departments, theyare generally deficient in organization and financial and technicalcapability. This was recognized by the appraisal mission for the ongoingRural Roads Project (Loan 1966-CO), and the Loan Agreement for the projectincluded provisions for MOPT to review the organization and adequacy of thedepartments to handle maintenance of the roads under their charge. NOPT' sreview has not tackled the problem adequately on possible grounds ofpolitical sensitivities and the varying degrees of administrative maturity ofthe departments. In the meantime, the inadequacy of maintenance of thedepartmental roads appears to have assumed greater dieansion considering theover 4X annual growth in the network for which the departments areresponsible and the tight domestic finances. The departmental road network,which totaled some 3,200 km in 1975, is about 48,500 km at present.

3. Under the proposed project, The National Fund for DevelopmentProjects (FONADE) would finance a study to tasess the feasibility ofassisting selected departments to organize maintenance of their roadsefftectively. The selected departuents are: Atlantico, Boyaca, Cordoba,Cundinsaarca and Valle.

B. ObJectives

4. The objectives of the study are to:

(a) diagnose and propose solutions to the administrative, financial andtechnical deficiencies of selected SPWs to execute road

(b) review the legislation and organizat'onal structure of thedepartments vis-a-vis other Governmental agencies for maintainingdepartmental roae'.;

-54 - ANNE 7Page 2 of 2

(c) evaluate the human, financial and managerial resources needed tostrengthen the selected departments;

(d) assess the equipment requirements of the selected departments tomaintain their roads;

(e) determine the economically optimal ex.tent of the departmental roadnetwork which should be maintained; and

(f) prepare, based upon in-depth technical and economic feasibilitystudies, an action plan to implement cost-effective maintenancestrategies in the departments.

C. Executing Agency

5. PONADE would finalize the financial arrangesents for executing thestudy by June 30, 1986. PONADE also will be responsible for executing thestudy and oobilize qualified consultants on terms and conditions acceptableto the Bank by November 1, 1986. DNP and the Bank will supervise executionof the study.

D. Staf fing

6. The estimated professional staff requirements are as follows:

Foreign Local

Economist, experienced in evaluation of roadconstruction rehabilitation and maintenance works. 4 8

Highway Engineers, experienced in design,costing, construction and maintenance of secondaryand feeder roads (two locals). 4 12

Mechanical engineer, experienced in assessmentof construction equipment and organization. - 4

Public Administrator, experienced in assessmentof road administration organizations. - 6

8 30

E. Reporting

7. Four months after FONADE gives the order to proceed, consultantswill produce an interim report in Spanish for the lank's and PONADE'sreview. Within 30 calendar days of the receipt of the interil report, theBank and PONADE will provide their commentary to the consultants. Within onemonth from the receipt of the Bank's and FONADE's comments, the consultantswill produce a final report in Spanish upon their findings. FONADE willforward three copies of the final report to the Bank within three weeks afterthe consultants produce the final report.

February 1986

-55- AN=C 8Page 1 of 3

r

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Terms of Reference for Technical Assistancefor Institutional Efficiency Improvements

1. ObJectives

The technical assistance for FNCV's 1986-1992 Program would havethe following ob_ectives:

(a) implement and strengthen FNCV's mwnagement system, andimprove its investment plaaning, programiug and budgeting procedures inaccordance with the recovmendations of the technical assistance providedunder Loan 1966-CO;

(b) strengthen the management system for contract administration, andImprove coordinatioz ecvil vorks execution between headquarters andthe regional directorates; and

(c) assist FNCV in the establishment of a system for maintenancemgnagement and equipment administration.

2. Scope of Consulting Services

The technical assistance program would be carried out during thefirst two years of the program, under the authority of FNCV's EngineeringSub-Directorate in close coordination with the Planning Office and theSub-Directorate of Administration and Finance. It would comprise, but notnecessarily be limited to, the following functional areas:

(a) Planning

(i) assist FNCV in the implementation of an information systemsto provide basic information for efficient programing,monitoring and costing construction and maintenanceoperations, and for satisfactory equipment management; and

(ii) review and improve present investment planning, programidg,budgeting and monitoring procedures.

(b) Civil Works Execution

(i) review and strengthen recent Improvements of the guidelinesfor engineering of works and of the bidding, contracting andpaymeut procedures for civil works; and

-56-ANNEX 8Page 2 of 3

(ii) strengthen the structural arrangements for supervision andmonitoring of civil works, streamlining the line of comandand responsibilities to tmke works supervision expeditious andeffective.

(c) Maintenance Administration

(i) strengthen FNCV's procedures for planning, budgeting,programing, controlling and reporting meintenance activities;

(ii) strengthen the organizational framework at headquarters, atthe regional offices, and in the field, for effectiveexecution of usintenance of rural roads; and

(lli) develop and implement improved general accounting practices,and establish a cost accounting system arpropriate to supportmaintenance management systems, distinguishing between costsfor routine, periodic, deferred nud emergency maintenanceactivities and separating them from capital expenditures forconstruction; the costs for force account operatiors to bedisaggregated into individual components for labor, materials,equipment, parts, fuel, administration and contract works.

(d) Maintenance Program

(i) assist FNCV in the preparation of economic analyses todetermine appropriate maintenauce levels of service andpriorities to be assigned to different roads;

(i1) assist in the preparation of annual maintenance programs andcorresponding budgets and in the review of the programs'execution; and

(iLL) assist FNCV in monitoring the project's progress throughindicators such as agreed maintenance targets, FNCV equipmentavailability and utilization, and scope and funding ofmaintenance programs.

(e) Equipment Administration

(i) assist FNCV in updating maintenance fleet condition andutilization inventory, and in preparing programs for equipmentoverhaul and scrapping;

(ii) assist in the development of an effective and standardizedequipment management and cost reporting system;

(iii) assist in the strengthening and refining of FNCV's presentpreventive iiintenance program, and equipment maintenance andrepair contracting system; and

-57 - ANNE 8Page 3 of 3

(vi) assist in the preparation of bidding documents and evaluationof proposals from suppliers of vehicles, equipment and spareparts.

3. Staffing

The professional staff required would be the following:

MonthsForeign Local

Economist experienced in management informationsystems, planning and budgeting 6 10

System Analyst, programmer. - 8

Engineer with at least 15 years contractmanagement experience 6 10

Maintenance Engineer, specialist in programingand execution of and accounting for maintenanceactivities 6 10

Equipment Specialist experienced in all phases ofequipment management and repair 6 10

24 48

4. FNCV would provide adequate counterpart staff to work with theconsultants and to carry on execution of the seven-year program afterexpiration of the consultants' contract. FNCV would provide supportingstaff, offices, vehicles and miscellaneous requirements for the consultants.

5. Schedule and Reporting

This component will be executed in conjunction with the studieseither completed or about to be completed by FNCV under Loan 1966-CO. Thestaffing requirements will be reviewed periodically in light of theforegoing. Reports will be prepared quarterly in Spanish to FNCV,sumarizing past accomplishments as well as operational problems Identifiedto permit a formulation of measures necessary to overcome them and to proceedwith the scheduled implementation. A final report will be issued at thecompletion of the assignment summarizing all findings, progress achieved andrecommendations for future action.

February 1986

-58- gaflE9

Page 1 of 3

COLOKBIA

RURAL TRANSPORT SECTOR PROJECT

Outlined Methodology for Economic Evaluation

1. * NCV has compiled a list of long term rural road construction anddeferred maintenance nees in a draft Plan Vial; the estimated cost is about

Col$ 77.9 billion. This annex describes the selection and evaluationprocedures for the roads, which will be grouped into ennual work programs.FNCV would select the contents of the annual work program for the followingyear and present it for Sank approval at the time of the semi-annual reviewduring the second semester of each year. The selection and evaluationcriteria described below will be incorporated in FNCV's manual 'Ietodologia yCriterios para la Seleccion de Caminos, Document O.P. No. 031 datedSeptember 1980.

Selection of Roads

2. Roads included for construction in the draft Plan Vial satisfy atleast one of the following conditions:

(a) link two existing roads;

(b) link two population centers;

(c) link a population center to a commuoity; and

(d) link a rural road to another transport mode.

3. Uased upon the petitions of the comunnities, roads to be includedIn the annual work program would be selected from the list in the PlanVial.* Etimated costs in the Plan Vial for each of the roads would beupdated and the roads subjected to an Initial screening by the PlanningOffice of FYCY. Roads that pass the initial screening test (minimum economicrate of return of 12Z) would be retained in the tentative work program. Forroads which do not pass the first stage screening (based upon minival benefitassumptions), a more detailed analysis would be conducted. Because of itscomprehensive geographic coverage, the types of benefits to be generated bythe project would vary, depending upon the particular needs of thecomunities to be served. For sost of the roads, the benefits from lowertransport costs, sore reliability, and better access to services, technicalassistance and farm inputs would be realized through the following:

(a) losses avoided in present production of cash crops which cannot becoimercialized because of transport constraints;

(b) Increase of yield and/or area planted in present crops;

(c) shifte, where appropriate, in production patterns toward truckfarlng, i.ee., more perishable crops, notably fruit andvegetables;

*59-ANNEX 9Page 2 of 3

(d) increased commercial exploitation of livestock resaurces, notablydairy products; and

(e) transport cost savings to non-freight and "through traffic.

4. The first stage screening methodology involves the calculation ofbenefits of the net value of production in the zone of Influence 1/ throughreduced production losses and increased new production. Benefits would becalculated for the first year and held corstant for the evaluation perlod of10 years. If the estimated rate of return, using the economic construction,maintenance and rehabilitation costs for the period, is over 122, theestimated opportunity cost of capital, the works would be consideredeligible, and no further economic evaluation would be made. The roads whichpass on this simplified methodology would generally be In areas withsubstantial existing production and/or would have relatively low constructioncosts. It is reasonable to assume that agricultural output would expand inthese areas when access IS improved. Adequate supplies of fertilizer wouldbe avallable, and the input distribution and marketing system would beresponsive. As the results of the socio-econouic impact study carried out toassess the development impact of 28 roads totaling 250 km under the ongoingRural Roads Project (see Table 1 of this annex) Indicatv, credit andextension services are available, and there appears to be no major culturalconstraint upon delivery of such services to farmers.

5. The second-stage screening methodology requires more detail on thespecific potential benefits in terms of increased yields and cultivatedhectares for current types of grops as well as improved livestock output.Estimates are made for each subproject's zone of influence, and theincremental net value of production is calculated for year 10, when thepotential is expected to be reached. The investment costs include roadcosts, as well as agricultural development costs. If the estimated economicrate of return 2/ is greater than 12%, no further evaluation is made, and theroad is considered eligible for inclusion in the work program.

Size of the Annual Work Programs

6. It is likely that more roads would yield the minimal 12S economic rateof return than could be financed under the program each year because of thelimitations on the amount of counterpart funds which are likely to beavailable. Therefore, the selection committee - composed of representativesfrom MOPT, FNCV and the Departments - would observe the following Inselecting the roads to be included in the work program submitted for Bankapproval at the tine of the semi-annual reviews:

1/ Five km along the roadside, but may be shorter depending upon the localterrain conditions.

2/ Calculated by applying Method lItI from Economic Appraisal of RuralRoads: Simplified Operational Procedures for Screening and Appraisal,Beenhakker and Lago, SWi 610, October 1983.

-60- ANX= 9Page 3 of 3

(a) within the limitation of available counterpart funds, no more thana maximum of IOX of each year's lnvestwent program would be.concentrated in any one department in line with the guiZelines setby DNP - the National Planning Department; and

(b) only those roads with the highest economic rates of return would beincluded In the work program.

The priorities for periodic maintenance would be established based upontechnical criteria set out in the attachment to this annex. They include thephysical deterioration of the road, the traffic and the population served bythe road, as shown in Attachment I of this annex.

7. All roads financed under the project loan would be selected basedupon their economic and technical feasibility. Technical criteria developedby FNCV in 1980 in association with the Bank and IDB are satisfactory andwill apply to works financed under the project (Attachment 2 of this annex).Additionally, since FNCV's 1986-1992 program also includes financing fromdouestic resources and other multilateral sources:

(a) at least 85Z of investments financed from domestic resources wouldbe selected based on the foregoing procedures;

(b) of the remaining 15X, all works 5 km or over in length, or with anestimated cost of US$200,000 equivalent or bigher, financed under(a) preceding would be selected based upon foregoing evaluationprocedures; and

Cc) works financed through other multilateral resources would beevaluated based upon criteria acceptable to the Bank.

Data Requirements

8. Standard. The physical condition of the roads would be updatedregularly as part of the inventory updating which FNCV would perform onceevery year. Included in the inventory would be the physical features such asculverts, ditches, erosion, the riding surface, et al, which need to bemaintained.

February 1986

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Finding of the Socio Economtc Study(Cal $ Thousand)

I. II. 111.Value of

Incremental Transport First Year Estimated 2Constriaction Produetlon In Savings in Benefit Rate of

No. Length Name of Road Cost First Year Firat Year (1-I1) Return X

1. 12 Reys Patria-El lntierno 28,675 2,110 10,995 .07 782. 6 Piedras de Candela-Carbonera 8,063 1,662 3,982 .21 973. 9 Patlo Bonito-Alto Ranito 18,113 5,446 - .30 1244. 6 Santa Rosa-La Cuchilla 15,314 1,453 225 .09 635. 8 Pri.avera-Parcelaclono-l Tigre 14,736 3,140 891 .21 105h. 20 La Y-Loe Casinos de Tamcal 23,963 4,153 - .17 877. 10 Cantagallo-Las Piedras 19,624 1,174 - .06 438. 6 San Andreas-Plaxa Bonita 17,603 1,261 1898 .07 589. 13 Paso Nuevo-Honitos 63,151 8,052 12,307 .13 8910. 9.9 Vereda 81 Salture-Llano Grande 17,577 1,121.3 - .06 45It, 12 Factativa-San Rafael-Pte. Kola 14,670 2,106 - .14 7812. 6 San Ceronilo-La Maria 13,064 610 - .05 3611. 4.5 Las Brisas-Puente Ibanez 21,643 882 - .04 341S. 10.4 Tutuendo-San Francisco de Icho 14,179 874 - .06 4215. 4.5 H)raflores-Loa Medios 5,891 1,146 - .19 9416. 13' Santana-Palacio-San Emilio 50,479 2,531 - .05 4417. 10 Cienaga-Sevillana 30,632 18,114 - .59 10018. 8 San Sebssttan-Los Calvis 29,213 365 739 .01 719. 6 La Piedra-El Placer 10,490 4,608 418 .44 100211. 11.8 La Floresta-El Salado 28,763 2,784 - .10 6321. 12.5 Cucutilla-San Jose-La Montana 16,725 4,323 - .26 10022. 9.0 Kata de Enea-Cartagena 14,523 2,015 - .14 7723. 5.5 La Virgen-La Palmera-Santa Rita 7,591 3,256 339 .43 10024. 6.2 Tambores-Esparta 11,082 453 - .04 3025. 6.0 Otba-San Vtcente-Barro Blanco 18,210 1,838 652 .10 6726. 12.0 La Ceiba-Chengue 15,188 2,049 4,060 .13 9127. 9.6 Puerto Yuca-Hoyo Negro 14,170 2,283 - .16 8428. 8.0 Poteritom-La Carbonera 22,623 5,599 2,214 .25 100

F lw

1/ Excluding tramuport cost savings2/ Rounded to nearest whole percentage

Source: Oficina de Planeacion, FNCV, Bogota (varlouo dates).

December 1985

-62 ANE 9Attachment 1Page 1 of 2

COLOMBIA

RURAL TRANSOT SECTOR PROJECT

Inventor_ Format for !nMPeriodic maintenance Priorities

A. Gcneral Inforxation

Road:______________Tpe:_______________

Leagh:_ _ Popultio Sore:

Yar of Construction: __ thoad of Contrution:_

REtimated Traffic (veles /ek):

Cars:

Light Trucks (14es than 6 tons):

Heavy Truckslluseu:

Maintennce Carried Out (current pesos for past three years):*

1983 1984 1985

Routine

Periodic

Total

Status at last Inventory (year/points):

Existing level of access:

(1) year-round access for anl vetileas:

(2) year-round access except for

hh"vy trucks durin and after rains:

(3) Poor access:

*Past three years on a roUling basis.

- 63 -ANNE* 9

Attachment 1Page 2 of 2

*. Xtdns of Cmosltu

0 1 2 3 4 3 6 7 S 9 10 it 12 13 14 15 16 17 Is 19 20

Lateel Ktdl

Left

Culverts

ft"let.

steep norem

leopem Diteha

Left

ewosti.ct or

Ceestit Culverts

leeo_tuct or

Cestmuce Fed"

lacesestruet pSldm

Commu at Cuitice_ LAt

- 64 -- " - ~~~~~ANNEX 9

Attacblent 2

COLOMBIA

RURAL TRANSPORT SECTOR PROJECT

Design Stasndards

Specification Type of Terrain Class I Class II

Fifth year traffic (ADT) 50/100 0/50

F to H l/ 55 40Design Speed (km/h) H to M 1/ 40 35

M to A l/ 25 20

F to H 88 38Minimum Radius (m) H to M 38 27

M to A 12 12

F to H 4 7Maximum Gradient (Z) H to M 7 10

M to A 9 12

F to H 300 -Passing Sight distance (i) H to M 200

M to A 145 -

F to H 65 40Stopping Sight distance (m) H to M 40 34

M to A 22 16

Right of Way (m) 30 30

F to H 6-7 4.5-5Roadway Width (m)2/ H to H 6-7 4.5-5

M to A 5.5-6.5 4.5-5

F to H 5-6 3.5-4Carriageway width (m) H to M 5-6 3.5-4

M to A 3.5-4.5 3.5-4

Bridge design to be determined

Pavement gravel spot gravel

1/ F to H means from Flat to Hilly terrainH to M means from HiUy to Mountainous terrainH to A means from Mountainous to Alpine type terrain

2/ Including lateral drainage ditches

Source: FNCV

December 1985

- 65 -

ANNEX 10

COLOKBIA

RURAL TRANSPORT SECTOR PROJECT

Selected Documents and Data Available In the Project File

Selected Documents

1. Overseas Construction Company 'Equipment Component"2. Joaquin Caraballo: Estudio de Factibilidad de la Sistematizacion del

Mantenimiento Vial3. Pablo Bocarejo: Mantenimiento de Caminos departamentales de Colombia4. FNCV Estudio de Selecci8n 'Estero Currupi. Estero del Coco"5. FNCV Division de Supervision y Control6. FNCV Especificaciones de Trazado, Tarifas y Especiales de Construccion7. FNCV Sample Contracts8. FNCV Documentos para ConsideraciEn del Banco Mundial -

9. FNCV Programa PIR FASE .I, Proyecto Inversion10. FNCV Estado Actual del EquipoII. FNCV Planta de Empleados12. FNCV Adquisici6n de Helicoptero136 FNCV Plan Vial Nacional - Caminos Vecinales14. ESAP Estudio de la Planta de Personal15. ESAP Manual de Funciones por Cargo16. ESAP Programa de Asesorla Administrativa al Fondo Nacional de Caminos

Vecinales17. FNCV Estudio de Prefactibilidad para el Cobro de Valorizaci6n18. Pablo Bocarejo: Anteproyecto de I* Propuesta de Metodologfa para la

Evaluaci6n Socio-Econ6mica de Caminos Vecinales (Borrador)19. FNCV Socio Economic Impact Study20. FNCV Programa Conservacion Rutinaria, 198621. FNCV Plan de Conservacion, 198622. FNCV Informe "Actividades Programa Construccion de Canalcs en la costa del

Pacifico"

Working Papers

1. Estimates of Foreign Exchange Component2. Price Escalation and Exchange Rate Indexes3. Estimates of FNCV's Requirements for Force Account Operation4. COSTAB Printout, FNCV Program 1986-19925 COSTAB Printout, the Project 1986-19926. COSTAB Printout, the Project 1986-1990

February 1986

- 66 -

CHART 1

FONDO NAC10NAL DE CAMN06KCINALES

L________ __. Qi~CIst -d- __ _ ____

9dQS C&WuIkJtI& "Wftm"I_of Coa"sw- aUIwm

OM_n L DMn 02,, Moon ~

I~~~~~~Einw bige Lu~v

c__ .~~iUS AcSM

A j q m| *_

-~~~~~~~~~~~~~~~~~~~~~ WA305

W( -* :. : i L i ! D. ,

! ' .L.., ...:ORTSECTOR ECTsQ

navdWoad ILr 190A;AlN>iit

OF-T RON OF RKOADWORjS

Ma~ -Internatlnae Coundrs ( truction // ;

Cd,ibbeon S .,o

0 0 iN 0 Ef;je e.cobai

Prtop6WProgram fo#itre iesW 16 lgas

- Paved Trunk Roads 6SACIANOu 7 lCogn

Paved Roads ATLANT 72'Unpaved Roads M MA~ALENA

(D FNcV Directoratess ea CAr:A

j9 River PortsNavigable RiveirsElevations Above 1400 Metors

W1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1

- Dpeprtment BoundariesI0International Boundaries

00~ ~ 0

*; S'~nAtN&., -ANtIOQUIA~. 0\ LoA4uu huE E A E A N A

b~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Tb

SAN~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~T

S I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r APC t08

. ~~~. .:. ~~~. t .. i.~~~~~g.'.. ~1ARAUCA

I Vout.1M4

A~0RE ~ * . . .. , CASANARE

oFPcds;c Ocean

4 4.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

m~~~~~~~~~

11.8.0.0m wa ~ ~ ~ ~ ~ ~ ~ a oo a6 60m

J~~~~~~~~~~~~~~~~~~~~~~~~~~~I

IBRD 1

-~~~~~

COLOMBIA LOPEZ

RURALTRANSPORTSECTOR PROJECT ,Minor Wbterway Improvements

RF* Year PMugr:

To be Con*udted

- - - To be ReahItate

'4''

U.

S -

PACIFIC

OCEAN

0

r~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ OA . of , ,*

a 5 iG 20

7r 74* VNQBr\__ =

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