Document of .J1 E C)

The World Bank

FOR OFFICIAL USE ONLY

Report No. 3019a-MAI

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

December 22, 1980

Regional Projects DepartmentEastern Africa Regional Office

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

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CURRENCY EQUIVALENTS

Currency Units = Malawi Kwacha (MK) and tambalaUS$1.00 = MK 0.80MK 1.00 = 100 tambalas

WEIGHTS AND MEASURES

1 foot (ft) = 0.305 meters (m)

1 mile (mi) 2 = 1.609 kilometers (km) 21 square mile (mi ) = 2.590 square kilometers (km )1 ton (t) = 0.907 metric tons (m ton)

LIST OF ABBREVIATIONS

AfDB (AfDF) - African Development Bank (Fund)DRIMP - District Roads Improvement and Maintenance ProgramEDF - European Development FundEEC - European Economic CommunityEPD - Economic Planning Division

(Office of the President and Cabinet)HDM - Highway Design and Maintenance ModelKfW - Kreditanstalt fur WiederaufbauMTC - Ministry of Transport and CommunicationsMWS - Ministry of Works and SuppliesODA - Overseas Development AdministrationPVHO - Plant and Vehicle Hire OrganizationUNDP - United Nations Development Programmevoc - vehicle operating cost

vpd - vehicles per day

GOVERNMENT OF MALAWI

FISCAL YEAR

April 1 - March 31

FOR OFFICIAL USE ONLY

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

TABLE OF CONTENTS

Page No.

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

A. Effects of Geography and Economic Structure 1B. The Transpcrt System. 2C. Transport Policy and Coordination. 4D. Previous Bank Group Involvement in the Sector 6

II. THE HIGHWAY SUBSECTOR ................................. 7

A. The Network ...................................... 7B. Road Use. 9C. Administration and Training .14D. Planning and Financing .16E. Engineering .18F. Construction .18G. Maintenance .19

III. THE PROJECT .20

A. Objectives .20B. Project Description .21C. Cost Estimates .26D. Financing .27E. Implementation and Procurement .27F. Disbursements .28G. Accounting, Auditing and Reporting Requirements 30

IV. ECONOMIC EVALUATION .30

A. Evaluation of Project Components . . 301. Upgrading of the Jenda-Mzuzu-Ekwendeni Road 312. District Road Improvement and Maintenance

Program .343. Other Pioject Elements .35

B. Risks . .36

V. AGREEMENTS REACHED AND RECOMMENDATION .36

This report was prepared by S. Sigfusson (Engineer) and M. Mason(Economist), who appraised the project in February 1980. The reportwas edited by P. Brereton.

This document has a restricted distributinn s';A may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

TABLE OF CONTENTS (Continued)

ANNEXES Page No.

1 Transport-Related IDA Projects in Malawi ............ 382 Training of Subprofessional Staff of the

Ministry of Works and Supplies .... .............. 423 Road Design Standards Adopted by the MWS ........... 464 DRIMP II: Program for Procurement of Facilities

and Equipment 1981-83 .475 DRIMP II: Program for District Roads

Improvement 1981-84 .576 DRIMP II: Government Financing and Accounting of

DRIMP Maintenance Expenditure .657 Outline Terms of Reference for Technical

Assistance for Transport Planning .... ........... 678 Terms of Reference for the Maintenance Study ....... 709 Project Progress Reporting Requirements .... ........ 77

10 Economic Evaluation of the Jenda-Mzuzu-EkwendeniRoad .81

11 Terms of Reference for the Economic Analysisand Selection Criteria for Improvement ofDistrict Roads under DRIMP .82

12 Related Documents and Data Available in theProject File .86

CHARTS

1 Organization of the Ministry of Works and Supplies2 Project Implementation Schedule

MAPS

1 Malawi - Transport Network (IBRD 15069R)2 Malawi - Project Roads (IBRD 15070)

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

I. THE TRANSPORT SECTOR

A. Effects of Geography and Economic Structure on Transport

1.01 Malawi is a long, narrow, landlocked country situated in the GreatAfrican Rift Valley, with a land area of about 94,300 km and a lake area of24,200 km (see Map 1). A major escarpment runs the length of the country,separating the Lake Malawi plain from the plateau to the west; altitudesrange from about 60 m above sea level in the Shire Valley in the south toover 2,500 m in the northern plateau. Rainfall averages between 750 mm and1,600 mm, but is much heavier in the high plateau areas of Mulanje, Zomba,Viphya and Nyika (4% of land area). The high rainfall and long rainy seasonin the mountainous areas, combined with steep slopes and scarcity of naturallyavailable gravels for road construction and maintenance, render gravel roadsuneconomic in those areas.

1.02 Gross domestic product increased in real terms at the relativelyrapid rate of 6.0% per year over the period 1964-79. Even so, per capitaGNP is an estimated US$200, and Malawi is classified by the United Nationsas one of the least developed countries in the world.

1.03 With a population of about 5.7 million (1978), growing at an averagerate of 2.9% p.a., Malawi has one og the highest population densities per sqkm of agricultural land (140 per km ) in Africa. However, development in thecountry's three administrative regions has been unbalanced. Until independencein 1964, most development was concentrated in the Southern Region, which hadthe only rail link, most of the all-weather roads, the administrative capitalof Zomba and the main commercial center of Blantyre. This fundamentalimbalance, aggravated by the still inadequate road access to the north, hascaused the Central Region and, even more, the Northern Region to remainisolated and undeveloped, and the latter is still sparsely populated. Atpresent, almost three quarters of the total population lives in the southernhalf of the country, and one of Government's main socioeconomic objectives,as set out in the Statement of Development Policies (1971), is the promotionof more balanced regional development. To this end, it has moved the adminis-trative capital some 250 km north from Zomba to Lilongwe, and has initiatedseveral agricultural development projects in the northern half of the country,including major projects at Lilongwe, Salima, Karonga and Viphya, and smallerprojects around Kasungu and Mzimba. The road network is also gradually beingupgraded in the Central and Northern Regions, and further development in theseareas is planned under the National Rural Development Program.

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1.04 Since almost 90% of the population lives in rural areas, and

agriculture contributes over 90% of Malawi's exports, rural development isa primary economic and social objective. In addition to raising agriculturalproductivity, it is seen as an effective vehicle for the Government's policyof redistributing incomes in favor of the rural poor. Although the mostrapid growth in agricultural output in the past has been achieved by privateestates and discrete regional projects, since the start of its National RuralDevelopment Program in the mid-1970s, Government has increasingly supportedagricultural development through minimum package rural development projectswith rather wide geographic coverage. The Bank Group has given considerablesupport to this Program, and is currently preparing for its third phase.

1.05 About 50% of Malawi's total land area is classified as forest land,about 20% of which consists of forest reserves, administered by the ForestryDepartment of the Ministry of Agriculture and Natural Resources as protectedgovernment land. Malawi's forestry sector produces a limited number offorestry products: sawn timber, veneer, plywood, poles and fuelwood.Annual production 3of industrial roundwood from both state and private forestsis about 85,000 m . The wood is locally processed and largely absorbed by thedomestic market, as exports of forest products are negligible and some 20% ofthe softwood requirements are imported. However, the Government is nowstudying the possibility of developing the wood processing industry, includingthe potential of the regional export market.

B. The Transport System

1.06 Malawi's transport system consists of about 11,300 km of roads,645 km of railways, 4 lake harbors and a number of landing points served by alake service, and 4 airfields served by domestic services. The principalfeatures of this system are: a main road network of about 2,900 km, which isfairly well developed south of Lilongwe but undeveloped in the northern halfof the country; the rail system which lies entirely in the southern half ofthe country and is primarily used for export-import and Zambian transittraffic; lake transport which mainly serves the north and compensates to someextent for the undeveloped land transport links; and air transport which isdominated by international passenger traffic. Road transport dominatesinternal transport while most export-import freight is carried by rail. Themain outlet to the sea for Malawi's external trade is by the railway throughMozambique to the ports of Beira and Nacala on the Indian Ocean.

Highways

1.07 The highway network is discussed in Chapter II.

Railways

1.08 The main railway line extends from Salima through Blantyre, to theextreme southern border (443 km) where it connects with the rail line to the

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Mozambique port of Beira. Rehabilitation of the southern part of the linewithin Malawi has been underway during the last few years with British and

Canadian aid and is expected to be completed by 1985. A branch line (101 km),offering an alternative route to the sea, extends eastward from Nkaya toNayuci, and connects with the Mozambique line to the port of Nacala. 1/ An

extension westward from Salima to Lilongwe (101 km), financed by a grant fromthe Canadian Government, has been recently completed and operations commencedin 1979. The Canadian Government is also financing a further extensionwestward from Lilongwe through Mchinji to the Zambian border (109 km), whichis expected to be in operation by 1981-82. The ultimate aim is to link MalawiRailways with the Tanzania-Zambia Railway. 2/

1.09 In 1978, the railway carried about 1.3 million tons of freight or

about 221 million ton-km, about one fifth of which was Zambian transit traffic

trucked to and from railheads in Malawi. Traffic in terms of ton-km has beendeclining by 7% p.a. since 1975 because of the slowdown in imports since 1975and exports since 1977, decreasing Zambian transit traffic, and to a lesserextent increasing road competition. The railway is run efficiently and earnsa modest net operating surplus, although recently it has experienced a shortageof rolling stock which is gradually being corrected with the provision of moreequipment. The number of passengers carried on the railway was 1.1 million in1978, about the same number as carried in 1974; increases in passenger traffichave been absorbed by bus services.

Lake Transport

1.10 Freight and passenger transport on Lake Malawi is provided by LakeServices Limited, a subsidiary of Malawi Railways, and principally servesthe remote northern areas of the country. Twenty-one centers are served bythe Lake Service fleet, which consists of five vessels carrying freight orpassengers, six barges and oil pontoons, five tugs and one timber pontoon.Traffic volumes are relatively light, amounting to about 37,000 tons offreight and some 111,000 passengers in 1978. The main products transportedby lake are petroleum products, rice and fertilizers. At present, nearly 70%of the traffic is northbound, originating at Chipoka which is served by therailway, but this pattern may change in the future as the impact of ongoingrural development projects in the north is felt. After many years of losses,the Lake Service realized a small operating surplus in 1978 because of freighttariff increases in 1977 and 1978 which enabled the company to improve itsfinancial performance.

1/ The condition of the line and equipment as well as operational problemsof the Mozambique railway and at the sea ports have led to frequentinterruptions to traffic and severe problems over the importation ofessential materials, and particularly fuel, in recent years.

2/ This would require construction of an approximately 320 km link in Zambia.

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Air Transport

1.11 Air transport within Malawi is relatively unimportant compared toother modes, and only four airports (Chileka near Blantyre, Lilongwe, Mzuzuand Karonga) have scheduled services. Even air traffic between the north andthe south is quite low, despite the poor roads, because most passengers andgoods are transported by lake and road. Only the Chileka airport can accom-modate long-range jet aircraft, and it therefore serves as the country'sinternational airport in addition to being the most important for domestictraffic due to its proximity to commercial centers. Chileka accounted fornearly 60% of Malawi's 355,000 recorded passenger movements in 1978 and 80% ofpassenger movements at Chileka were international. The Government is nowconstructing a second international airport at Lilongwe at an estimated costof US$62 million with assistance from the African Development Bank (AfDB) andthe Japanese Government. Air Malawi, a Government-owned airline, providesinternational services and all scheduled domestic services. Four foreignairlines also provide international services, and one local company and AirMalawi provide unscheduled domestic services.

1.12 Passenger traffic declined sharply in 1976 because of the cessationof air services between Malawi and Zimbabwe, and the decreased numbers ofmigrant workers going to South Africa; in 1978 traffic was only 80% of the1975 level. Since air traffic between Malawi and Zimbabwe has now resumed,air passenger traffic should increase significantly. Air freight traffic, onthe other hand, sizeably increased during the past few years because of thecongested ports and poor rail service in Mozambique, and difficulty of usingother modes to transport goods between South Africa and Malawi.

C. Transport Policy and Coordination

1.13 Since the beginning of the seventies, Malawi-s transport policy hashad three broad aims: (a) to improve the administrative, social and economicintegration of the country by linking all three regions with reliable all-weather connections; (b) to support rural development by improving access torural areas; and (c) to provide efficient links with transport routes to theIndian Ocean seaports for exports and imports. Substantial progress has beenmade on (a) and (c), and work is now underway to realize (b). The Governmentis undertaking an extensive transport development program; numerous transportstudies have been carried out or are in progress, and investments are eitherplanned or underway in all transport modes.

1.14 Government s overall sector priorities are given in its "Statementof Development Policies 1971-1980," and are determined in more detail in a3-year rolling public sector investment program which is revised annuallyduring budget preparation. Investment in the transport sector has been highduring the last four years, representing an average of 44% of total Governmentcapital expenditure. This has been due to investment in the railway exten-sions and in Lilongwe International Airport. Although the Bank Group expressedreservations about these projects, Government has undertaken them with theassistance of external donors, because of its concern about the vulnerability

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of existing international trade routes, particularly in view of recent eventsin Mozambique which halted transit traffic for three months. For the samereason, Government has requested financing under the proposed project for

upgrading of the North-South road which links Malawi to Tanzania (para. 3.03).In addition, financing has been secured from the European Development Fund(EDF) for a study of the international transport routes available to Malawi;the study will examine the transport constraints to development of the country,future changes in the composition of traffic as well as the direction oftrade, and will make recommendations on the future transport developmentstrategy to employ. UNDP/UNCTAD is financing a regional study 1/ of transittransport is eight southern African countries, including Malawi. The studyis expected to be completed in 1982.

1.15 The 3-year plan 2/ for FY1979-81 had allocated 40% of totalplanned capital expenditures to the transport sector (Table 1.1), mainly forthe railway from Lilongwe to the Zambian border, the Lilongwe InternationalAirport, and main road construction. Although various donors have expressedinterest in most of the new projects proposed to start under the plan, itseems likely that some of these projects will be delayed or scaled down duringthe 3-year period due to Government s probable inability to provide therequired local funds (only 63% of the amount planned for 1979/80 was actuallyallocated) and the lack of completed feasibility studies for many of the newprojects. A cutback in the plan is, in fact, advisable since a significantnumber of the road projects may be quite marginal (para. 2.22).

Table 1.1: Investment in the Transport Sector 1975-1981(MK million)

Financial Year 1975 1976 1977 1978 1979 1980 19811-

Transport 10.7 33.2 21.0 31.4 63.8 46.8 86.8Roads 6.0 11.0 12.3 15.0 21.1 17.1 27.0Total Investment 40.8 70.0 55.9 76.5 130.5 151.4 216.6

% of Total InvestmentRepresented by Transport 26.7 47 38 41 49 31 40

% of Transport Invest.Represented by Roads 56 33 59 48 33 37 31

1/ Planned.

Source: Economic Report 1979 and the Roads Department.

1/ Transit Transport Improvements in the Landlocked Southern African Sub-Region, UNDP/UNCTAD Project RAF/77/017. Countries included are: Zambia,Malawi, Tanzania, Mozambique, Botswana, Lesotho and Swaziland; Zimbabweand South Africa are expected to be included in the Study in due course.

2/ The 3-year plan will be replaced by a 5-year plan starting with FY1981.Details of the Plan will not be available before March 1981, but adraft summary indicates that, over the 5 years, 35% of total plannedcapital expenditures will be allocated to the transport sector.

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1.16 Coordination of transport investment plans is the responsibilityof the Transport Unit of the Economic Planning Division (EPD) of the Officeof the President and Cabinet which reviews proposals put forward by theMinistry of Works and Supplies (MWS) for roads and the Ministry of Transportand Communications (MTC) for all other modes. In practice, however, suchcoordination has been lacking because of EPD's limited staffing (the TransportUnit is presently staffed by one professional only), and as a result thedevelopment of each mode has proceeded almost independently of the others.This is becoming a problem since road transport is beginning to compete withthe railways, and coordination of road and lake transport will be increasinglyneeded. Government has therefore requested assistance in strengthening itstransport planning and coordination capability, and accordingly the projectwould provide EPD with technical assistance for transport planning as well asoverseas training for local staff (para. 3.09 (iv)). The technical assistancewould, inter alia, help Government to define and establish an adequate systemof transport planning and provide on-the-job training for Malawian professionalstaff. Terms of reference for the technical assistance are given in Annex 7.

D. Previous Bank Group Involvement in the Sector

1.17 The Bank Group has been involved in Malawi's transport sector since1966 when Credit S-2-MAI was approved to help finance detailed engineeringof the Zomba-Lilongwe road (290 km). This was followed by the First HighwayProject (Credit 112-MAI, 1968, US$11.5 million) comprising the reconstructionand bituminous paving of that road, the refinancing of Credit S-2-MAI, and aconsultants' study of road transport licensing regulations and road-railcoordination. A Performance Audit of the Project (No. 946, December 15, 1975)concluded that all of the project's objectives were achieved. Constructioncosts were within appraisal estimates, although the road was completed aboutone year behind schedule. 1/ Traffic was about 50% greater than projected atappraisal, and the rate of return was conservatively re-evaluated at 13%,compared with the appraisal estimate of 12%. The consultants' study recom-mended deregulating road transport, raising axle load limits to 9 tons,improving transport statistics, and relating rail tariffs more closely toeconomic factors, all of which have been implemented, although there is scopefor further refinement of rail tariffs. The study expressed misgivings aboutplanned rail projects, but Government did not share IDA-s reservations andproceeded with these investments. Both the consultants' study and the AuditReport agreed that the country might soon have an oversupply of transportservices in the Blantyre-Lilongwe-Zambian border corridor. The major recom-mendations of the Audit called for closer project supervision 2/ and rectify-ing the neglect of lower class roads--although the Audit did not question

1/ The first contractor selected for the Zomba-Lilongwe road sectionwas unsatisfactory and had to be replaced, leading to the delay inproject completion.

2/ The Audit notes that the first IDA supervision mission was some 18months after commencement of works, and that an earlier mission couldhave led to speedier resolution of the problem.

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the composition of the First Highway Project, noting that the "Zomba-Lilongweroad . . . is undoubtedly the most important highway in Malawi." Both of therecommendations made in the Audit Report are being addressed under the Second,Third and the proposed Fourth Highway Projects and in the agricultural projectsfinanced by the Bank Goup (para. 1.20).

1.18 The Second Highway Project (Credit 523-MAI, 1974, US$10 million)originally comprised construction of the Lilongwe-Kasungu road (113 km) anda pilot scheme for the improvement and maintenance of district roads servingrural development in the Kasungu District. Both components have been com-pleted, the construction in March 1978, a few months behind schedule, and thepilot scheme in September 1978. Substantial cost savings were made on theconstruction component which are being used to finance completion of thepilot scheme in Kasungu district and extension of the scheme to three otherdistricts, following the recommendations of a consultants' study which eva-luated the results of the pilot program. The four districts make up the firstphase of a District Roads Improvement and Maintenance Program (DRIMP) plannedto cover all of Malawi's 24 districts in three phases.

1-.19 The Third Highway Project (Credit 758-MAI, 1977, US$10.5 million)comprised construction of the Kasungu-Jenda road (85 km) and a feasibilitystudy and detailed engineering of the Jenda-Mzuzu road. The road constructionwas completed in October 1980, a few months behind schedule, and the detailedengineering is complete.

1.20 Finally, transport components have been included in IDA projectsin other sectors (Annex 1). Credit S-17-MAI, 1974, provided US$2 millionfor planning and engineering of infrastructure for the proposed Viphya timberexploitation scheme. In addition, agricultural projects in the Lower ShireValley (Credits 114, 363 and 823-MAI), the Lilongwe (Credits 113, 244 and550-MAI) and the Karonga (Credit 282 and Loan 1286-MAI) areas, as well asthe more widespread National Rural Development Project (Credit 857-MAI) haveincluded improvement and construction of about 4,000 km of feeder and cropextraction roads, while the Karonga Rural Development Project also includesport improvements at Chilumba and Chipoka on Lake Malawi as well as procurementof a self-propelled barge for the lake service.

II. THE HIGHWAY SUBSECTOR

A. The Network

2.01 The classified road network totals about 11,300 km (Table 2.1) ofwhich some 2,360 km (about 20%) are paved, and 380 km are of engineered gravelstandard; the rest are earth roads and tracks. In addition, there are about2,000 km of as yet unclassified feeder and crop extraction roads constructedto minimum all-weather standard under agricultural development projects andan undetermined length of unclassified earth roads and tracks, includingabout 800 km within forestry plantations and reserves and about 800 kmwithin the national parks. Road density is about 140 km per 1,000 sq km or

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2.3 km per 1,000 inhabitants, which is above average for East African coun-tries. The coverage of the network is adequate for the country's presentneeds, but its standards and conditions are not satisfactory. Although someimprovement has been made, principally by upgrading roads to paved standard(Table 2.2), low standard roads prevail, resulting in high transport costs.Reflecting the general pattern of regional imbalance, 86% of the paved andimproved roads are located in the southern half of the country.

Table 2.1: Highway Network by AdministrativeClassification and Surface Type - 1979

(km)

Main Secondary District Other 1/ AllRoads Roads Roads Roads Roads %

Bitumen 1,591 193 3 574 2,361 21Gravel 143 111 - 127 381 3Earth 1,152 2,066 5,065 286 8,569 76

Total 2,886 2,370 5,068 987 11,311 100

1/ Classified as either branch, estate, township or private roads.

Source: Ministry of Works and Supplies, February 1980.

Table 2.2: Development of the Road Network1972-1979

(km)

1972 1973 1974 1975 1976 1977 1978 1979

Bitumen 977 1,245 1,271 1,448 1,572 1,749 1,870 2,361Gravel 747 507 774 616 594 594 594 381Earth 8,912 9,118 8,846 8,890 8,812 10,267 10,211 8,569

Total 10,636 10,870 10,891 10,954 10,978 12,610 12,675 11,311 I/

1/ Data for 1979 reflect correction of lengths of classified earth andgravel roads.

Source: Economic Planning Division and Ministry of Works and Supplies,February 1980.

2.02 Some 1,590 km, or 55% of the main roads, connecting principalcities and towns, are paved. During the last few years, construction ofpaved roads has been concentrated on the 1,100 km north-south spine road,the most important road in Malawi, running from Bangula in the deep south

to Karonga in the far north (see Map 1). When ongoing projects are completedin 1981, some 940 km of that road will have been paved to a satisfactorystandard. The project would increase this length to about 1,010 km or some92% of the road. Government has also started reconstruction of old, narrowpavements; over 100 km of main roads were reconstructed during 1976/79,and reconstruction of about 110 km of secondary roads is underway. Furtherimprovements of the secondary network are being prepared (para. 2.21), andthe long neglected district roads are also being improved under the firstphase of DRIMP (para. 1.18) while the Program-s second phase and preparationof the third are included in the project (paras. 3.07 and 3.09).

B. Road Use

Vehicle Fleet

2.03 The composition and growth of the vehicle fleet is shown in Table2.3. In 1978, the fleet (excluding motorcycles, farm tractors, trailers andself-propelled, pneumatic-tired construction equipment) totalled just under27,000 or 4.8 vehicles per 1,000 inhabitants, which is above average forEastern Africa but less than half of Kenya's vehicle ownership rate. Thefleet includes about 13,500 passenger cars, 300 buses and 13,100 goodsvehicles, with the balance made up of 4,200 motorcycles and 7,000 othervehicles (mostly trailers). Reflecting the general pattern of economicdevelopment to date (para. 1.03), 75% of all vehicles are registered in theSouthern Region. Over the period 1973-78, the total fleet grew at 9.0% p.a.with the number of goods vehicles growing much faster than cars. One positivedevelopment with regard to fuel efficiency is that motorcycles have becomea popular means of private transportation and have been growing at 10.1% p.a.

2.04 More than two-thirds of the goods vehicles have less than a 3-toncarrying capacity, a large portion of which are 4-wheel drive vehicles. Only3% of the goods vehicles, mainly owned by companies involved in internationalmovement of freight, have more than a 10-ton capacity, but the number oftrailers in Malawi has almost doubled in the last two years, and truck-trailercombinations are common on the main routes. Ninety-seven percent of goodsvehicles over 3 tons have a relatively low average capacity of 7 tons, partlybecause much of the internal freight is agricultural produce, and the loadfactors and poor road conditions make the use of larger trucks uneconomic.

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Table 2.3: Motor Vehicle ReRistrations, 1973-1978 1/

Proportion Growth Rate1973 1974 1975 1976 1977 1978 of Fleet 1973-1978

Passenger Cars 10,218 11,233 10,983 10,222 11,516 13,483 35.4 5.7)

Goods Vehicles 2/ 9,036 9,466 9,S00 10,842 12,124 13,088 34.3 7.7) 6.6

Buses 275 290 277 299 335 318 0.8 3.0

Motorcycles 2,614 2,842 2,903 3,557 4,694 4,235 11.1 10.1

Other 3/ 2,614 3,249 3,556 4,64 7,024 18.4 21.9

24,744 27,080 27,219 29,584 34,490 6 100.0 9.0

1/ Including hoth Government and privately-owned vehicles, which are licensed annually.2i Including trucks, lan8-^"-s and minibuses.3/ Including tractors, trailers and construction equi!yment.

Source: Malawi Statistical Yearbook 1978 and the Economic Planning Division, February 1980

Traffic

2.05 There were no systematic traffic counts in Malawi until 1974 when,following an agreement reached during negotiations of the Second HighwayProject, Government instituted a system of automatic counts supplemented byperiodic annual counts at a number of strategic points on the road network.The counts are conducted by the Transport Unit of the National Statisticaloffice in Zomba, and a national traffic census has been published annuallysince 1974. The census indicates that between 1974 and 1978 traffic increasedby about 7% p.a. However, the census should be used with caution, sinceresults of the automatic and periodic countings are often inconsistent,indicating a need for improved counting operations. Traffic volumes on mainroads vary considerably between the south, where traffic is mostly in therange of 200-600 vehicles per day (vpd) (although parts of the main north-south road and the Lilongwe-Salima road have over 1,000 vpd), and the northwith far lower traffic levels, mostly in the 40-130 vpd range. Trafficon secondary and selected district roads averages about 30 vpd. Overalltraffic on Malawi-s roads is lower than that in Kenya and comparable to thatin Zambia, where traffic on paved roads is about 400 vpd and on earth roadsabout 20 vpd.

Road Transport

2.06 Over the past three years the number of licensed goods vehicleshas been increasing by 10% p.a. Altogether there were about 14,200 goodsvehicles licensed in Malawi in 1979, of which about 3,250 were Governmentvehicles, 8,870 were for private use, and 2,080 were public (for hire) vehicles.Little is known about vehicles owned by private companies, but statistics kepton transport companies hiring out their vehicles show that about 470 companiesoperate a fleet of 1,376 3-ton and over trucks and tankers. Over 60% of thesetrucks are owned by small operators, and 34% by 9 large operators with over30 vehicles each. The average size of the for-hire fleet operated by smalloperators is 3 vehicles with an average capacity of 7 tons, compared to 9 tonsoperated by the large companies.

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2.07 Road transport licenses are awarded by the Road Traffic Commis-sioner's Office within MTC, and are given for specific routes. In theory,freight rates are regulated by MTC, and at present are a minimum of 9.63tambala per ton-km for paved roads to a maximum of 13.98 tambala per ton-kmfor earth and gravel roads; a rate of 9.63 tambala per ton-km for paved roadsand 12.60 tambala per ton-km for earth and gravel roads is set for ADMARCcargo, the main agricultural marketing corporation. 1/ In practice itappears that these rates serve more as maximum tariffs, since on most routescompetition among road transporters leads to charges lower than the regulatedrates. However, the setting of maximum rates is necessary since transporterson a significant number of routes are in a monopoly situation. Governmenttries to ensure that regulated maximum rates are kept at a reasonable levelby periodically revising rates, based on costs kept by one of the largercompanies, United Transport (Malawi), and research into vehicle operatingcosts.

2.08 Road passenger services are provided by United Transport (Malawi),and a few small local operators. Of the total fleet of 221 buses, 176 arelicensed for public service and these operate on over 150 routes, includingurban services. Fares are regulated by MTC, and actual fares generally seemto be close to the regulated level.

Vehicle Regulations

2.09 Vehicle dimension and weight regulations are adequate (maximumallowable axle load being nine tons), but enforcement by MTC-s Road TrafficCommissioner's Office and the national police was generally lax up to 1976when pavement failures noted at that time on the Lilongwe-Zomba road wereattributed to overweight Zambian trucks, then carrying considerable freightto and from the railhead at Balaka. IDA missions thereafter emphasized theimportance of adequate enforcement, as required under the Credit Agreementfor the Second Highway Project. Government subsequently opened three weigh-bridges installed at strategic points, and enforcement has improved consider-ably. While the much reduced Zambian truck traffic now terminates at the newrailhead in Lilongwe and will mostly disappear when the railway line to theZambian border is completed in 1981, Malawian firms are increasingly usinglarge trucks on paved trunk roads. Strong enforcement of axle load limitsshould therefore continue.

Road Safety

2.10 The toll of road accidents in Malawi is heavy and rapidly increasing.Some road accident data, compiled from reports prepared by the Malawi PoliceForce, are given in Table 2.4.

1/ Special rates apply to transport of fuel; these range from 11.25 to 13.75tambala per ton-km.

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Table 2.4: Road Accident Statistics, 1966-1979

1 Road Accidents per 1000Vehicles Road Accident Statistics licensed vehicles

Est. Number of licensedpop.'/ vehicles per 1000 Vehicles Vehicles

Year ('000) licensed persons Accidents Deaths Injuries involved Deaths Injuries involved

1966 4040 16,803 4.16 n.a. 153 1283 3066 9.1 76 182

1967 4159 17,687 4.25 n.a 148 1521 3324 8.4 86 188

1968 4281 18,471 4.31 n.a. 149 1525 3788 8.1 83 205

1969 4408 20,230 4.59 n.a. 184 1882 3993 9.1 84 202

1970 4538 21,467 4.73 n.a. 196 2040 4562 9.1 95 213

1971 4672 23,527 5.04 n.a. 185 1894 4660 7.9 80 198

1972 4809 23,903 4.97 n.a. 218 1921 4993 9.1 80 2'2

1973 4951 24,744 5.00 n.a. 269 2191 5118 10.9 89 210

1974 5097 27,080 5.31 n.a. 271 2370 5242 9.9 88 194

1975 5248 27,219 5.19 3844 278 2324 5397 10.2 85 198

1976 5403 29,474 5.46 3957 268 2339 5632 9.1 79 191

1977 5562 34,490 6.20 3991 305 2342 5702 8.8 68 165

1978 5762 38,148 6.66 4601 582 2402 5649 15.7 63 174

19791i 5895 39.407 6.68 4531 661 2488 6522 16.8 63 166

1/ Estimated on the basis of the 1966 and 1977 census.

2/ Preliminary data for 1979.

Source: Ministry of Transport and Communications

2.11 The available information on road accidents suggests some inconsis-

tencies between the numbers of accidents reported and the numbers which

actually occur. The most reliable of these statistics are those for fatali-

ties, but even these are likely to underrate the actual situation somewhat.

Some general conclusions can be inferred:

(a) in relation to population and road use, the number ofroad fatalities in Malawi is about the norm for thedeveloping countries;

(b) generally, the rate of fatalities per 1,000 vehiclesdecreases with increased vehicle ownership (number ofvehicles per 10,000 inhabitants). In Malawi, however,

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this trend has been reversed, particularly over the last twoyears;

(c) between 1969 and 1979 road use has approximately doubled. Overthis period the number of vehicles reported to be involved inaccidents has increased by less than 50%. But the number ofroad fatalities, a somewhat more reliable statistic, hasincreased by 3-1/2 times; and

(d) the ratio of fatalities to injuries, normally 1:10 ormore in most developing countries, has increased rapidlyover the years; it was about 1 to 10 from 1967 to 1971,increased to 1 to 8 during 1977 and to 1 to 4 during1978 and 1979.

2.12 The rapid increase in the rate of fatal accidents over the lasttwo years is probably due to the rapidly increasing length of the bituminizedroad system. This is of considerable concern to Government, which is plan-ning to address the problem by improved education and enforcement of regula-tions as well as identification of "black spots" (short sections of roadwith high accident occurrence) and the improvement of roads in these areas.

2.13 Road use and traffic regulations are contained in the Road TrafficAct of 1969, with several amendments and expansions of the Act having beenmade over the years. The Act contains the usual regulations on vehicle sizesand axle loads, speed limits, driving instruction schools and licences,insurance, road service permits, regular inspection and testing. Licensingand vehicle inspection, annually for all goods vehicles over 3 tons and forall other vehicles over 10 years old, are the responsibility of MTC's RoadTraffic Commissioner's Office; enforcement of traffic regulations is theresponsibility of the Police Force's Traffic Section who patrol trunk roads,but lack capacity for strict enforcement.

2.14 Government established a National Road Safety Council (NRSC) in1978 to coordinate road safety measures and activities at the national level.Members of NRSC are drawn from the Ministries of Transport and Communications,Trade, Industry and Tourism, Health, Justice, Education and Works and Suppliesas well as from non-governmental organizations. Funds allocated to NRSC havebeen limited, and its activities to date have mainly consisted of twiceweekly radio broadcasts on road safety. The Council is planning increasedpropaganda activities, e.g., seminars and film shows as well as the introduc-tion of traffic education in primary and secondary schools. During supervi-sion of the project, the Association will monitor the situation and maintaina dialogue with Government. If proposed measures do not produce adequateresults, we would seek to define more clearly how IDA resources can be use-fully employed in future projects to assist the Government in reducing thetoll of road accidents.

Road User Revenue

2.15 Road users contribute to Government revenue through taxes andduties on fuel, lubricants, vehicles and spare parts, and through licenseand registration fees. The pump price of petrol is 70.7 tambala per liter

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and of diesel, 64.0 tambala per liter; equivalent import prices are 38.0tambala and 35.6 tambala, respectively. The normal duty on petrol is 5tambala per liter and on diesel, 2 tambala per liter; however, in 1979 duringa period of fuel shortages in Malawi, an additional fuel levy of 14 tambalaper liter was imposed on petrol and diesel, and this levy is still in forcealthough the supply of fuel is back to normal. Duties on vehicles range from5% for buses and trucks up to 40% for high value cars. There is a 24% surtaxon fuel and 18% on all vehicles except buses and trucks over 3 tons. Totalrevenue from road users in 1978 is estimated at about US$15 million. Presentexpenditures on administering and maintaining the road network, including thecosts of the Road Traffic Commissioner's Office, amount to less than US$3.5million. Thus, in addition to covering maintenance expenditures and long-termmarginal costs, including expected increases (para. 2.28), road user revenuesmake a significant contribution to the capital costs of the network.

C. Administration and Training

2.16 MWS is responsible for all classified roads except district roads,which are the responsibility of the District Councils. MWS is also graduallytaking over responsibility for maintenance of 2,000 km of feeder roads beingconstructed under several agricultural development projects; these roads areexpected to become the districts responsibility as the District Councils gainsufficient road maintenance capacity. The Ministry of Agriculture and NationalResources is responsible for the 1,600 km of forestry and national park roadsand tracks. No authority is responsible for the undetermined length of un-classified earth tracks (para. 2.01), but the most important of these tracksare expected to be classified as district roads over the next few years. MWSis organized according to its three functions (see Chart 1): administrationis carried out by well-staffed departments for administration, finance,personnel, stores and auditing; engineering is done by departments for design,building and roads; and development, the most recently established department,still has rather vague responsibilities but will increasingly be concernedwith planning. Road planning and overall supervision are handled by theheadquarters staff at Lilongwe. MWS has divisional offices in each of thethree regions, which are directly responsible for field operations for roadsand other works. In addition, these regional offices have 4 branch offices,14 district depots and 48 subdistrict depots for road maintenance. TheMinistry has a Plant and Vehicle Hire Organization (PVHO) with workshops inall regions and most districts and a central workshop in Blantyre for majorrepairs.

2.17 MWS has some 60 professional staff and about 100 subprofessionaland supervisory staff; its Roads Department has 11 civil engineers and onetransport economist. The Ministry has in the past been administered bysenior expatriate staff who are gradually being replaced by Malawians asthey acquire the education and experience needed. While the present salariedstaff of about 1,200 includes 105 expatriates (in 1977 these numbered 135 andin 1982 the number is expected to be 85), of the 8 most senior posts filled byexpatriates in 1977, 5 are now filled by well qualified Malawians; 4 of the

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Roads Department's 12 professionals are expatriates. While the rate oflocalization has been slow, it has ensured the long-standing high standardof efficiency of all departments of MWS. However, qualified Malawians arestill needed to replace expatriates and to handle the expanded activities ofMWS. The Roads Department has recently increased its number of posts forprofessionals to 25, in preparation for increased emphasis on road maintenanceand planning; the new posts are expected to be filled by Malawians graduatingfrom the Malawi Polytechnic during the next few years or temporarily by

expatriates.

2.18 Although all of the 24 District Councils have a road foreman ontheir staffs and a few have a core of road employees, their administrationfor road improvement and maintenance has been very weak. DRIMP was designedto overcome this problem by providing for the establishment of an organiza-tional framework, training of key staff, and the provision of facilities.The concept was successfully tested under a pilot scheme in Kasungu District(para. 2.29) where the maintenance organization is now fully operational andhas been handed over to the District Council.

Z.19 The Government has an active program for selecting, educating andtraining nationals for professional positions, but the program has still notmet the demand for qualified personnel, mainly because of the scarcity ofqualified candidates. Training abroad is provided with external assistance,mainly from the U.K., the European Economic Community (EEC) and the UnitedNations Development Programme (UNDP). During 1978 about 220 trainees inall categories returned to Malawi, 25 with professional degrees and 30 frompost-graduate training; at the end of 1978 about 600 Malawians were studyingoverseas, 65 for professional degrees and 95 in post-graduate courses.Opportunities for training overseas are sufficient for the number of suitablyqualified candidates, and as the Malawi Polytechnic develops its capacityin the technical fields, the need for overseas training of engineers willgradually diminish except for post-graduate courses. Good progress has alsobeen made in training lower echelon personnel, such as road supervisors,foremen, equipment operators and mechanics, at the Ministry's fully localizedTraining Branch in Zomba (for details, see Annex 2). While the trainingprogram, the quality of training, and the availability of staff to be trainedare adequate, the capacity of the Training Branch is now fully utilized. MWShas concluded that the training center should be relocated in Lilongwebecause expansion possibilities of the existing center in Zomba are limitedand because, subsequent to relocation of MWS's headquarters to Lilongwe,continuous supervision of training activities and the use of MWS's profes-sionals as part-time instructors is impractical and very costly. Relocationwould also permit the use of existing facilities (design and surveyingdivisions, materials and soils laboratory) in Lilongwe for training purposes.Relocation of the center is planned in several steps, starting with theestablishment of facilities for training of road construction and maintenancepersonnel. The project will assist in financing facilities (class-rooms, dormitories, staff housing, teaching aids and equipment) required forthe training of about 50 Roads Department staff annually, i.e., 25 traineesfor each 6-month training course, which is more than twice the number nowbeing trained (para. 3.10).

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D. Planning and Financing

2.20 As stated in para. 1.16, MWS is responsible for road planning buthas limited capacity for this function. All major projects are, however,preceded by feasibility studies carried out by-consultants. Government'sneed for assistance in transport planning, including that for roads, will beaddressed under the proposed project by the provision of technical assistanceand training (para. 3.09).

2.21 A summary of current and planned road projects is presented in Table2.5. Reflecting Government s general strategy of promoting development inthe Central and Northern Regions, over 80% of the projects listed are in thoseregions. Main road projects, accounting for 55% of current and planned roadexpenditure, are mainly devoted to improvement of the north-south and lakeshoreroads, and roads linking Malawi to Mozambique and Zambia. Road improvementswill also be carried out under DRIMP (for district roads), a small Key RuralRoad Program (for all classes of roads), and a proposed Upgrading of SecondaryRoads Program. The latter, probably to be financed by the Canadian Government,will require a study of the secondary road system, which will assess thecondition of the existing system, determine present and future traffic demand,estimate costs of improvement and maintenance, and determine which secondaryroads will be economically justified for improvement. The study is expectedto begin in mid-1981 and should be completed by early 1982.

2.22 As mentioned earlier (para. 1.15), the transport plan is probablyover-ambitious. Although economic analysis for many of the proposed newprojects has not yet been completed, it already appears that a significantnumber of the projects may be found marginal. If the plan is cut back, asseems likely, any marginal projects should be delayed in favor of others foundmore justified.

2.23 Highway expenditures are financed from the general budget or, fornew construction, from the development account which is largely made up ofgrants and credits from bilateral and multilateral aid programs. Expenditureson construction have averaged about US$19.0 million equivalent annually overthe past four years, while MWS's maintenance expenditures have averaged US$2.2million (Table 2.6). Maintenance funds were adequate in the past but are nowinsufficient to maintain the aging network (para. 2.28). They will beincreased in the future (para. 3.09 (v)).

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Table 2.5: Current and Planned Road ProJects

Approm. Estimated Cost from ConstructionLength Total Cost 1979/8011981/82 Period Remarks

Current (km) (MK '000) (IWK '000)

1. Lilongwe-Kasungu 113 7,708 1,345 1975/80 Substantially completed 1979 withIDA financing under Cr. 523-MAI.

2. Chiweta-Karongs 106 3,063 150 1976/79 Completed early 1980 with KfW, EDFand local financing.

3. Key Rural Roads (main, secondary n.a. 500/yr. 1,000 1978/81 Under construction with UK finan-and district) cing.

4. District Roads Pilot Project 1,900 3,193 3,000 1979/81 Pilot Schema completed 1978.(Kasungu District) and District Phase I improvements started earlyRoads Improvement and Mainte- 1980. Financed Cr. 523-MAI.nance Program (DRIMP) Phase I.

5. Rumphi-Chiweta 71 22,810 3,600 1976/80 Feasibility and Engineering studies1976/77 contract award early 1977.Completion mid-1980 with Germanfinancial assistance.

6. Ekwendeni-Rumphi 31 8,403 8,403 1980/81 Started early 1980 under AfDBfinancing.

7. Blantyre-Chikwawa 42 6,706 1,270 1977/79 Completion mid-1980 with EDFfinancing.

8. Mangochi-Namwera 23 770 770 1980/81 Reconstruction of selected sectionsto start early 1980 with AfDBfinancial assistance as a part of anagricultural project.

9. Nkhotakota-Dwanga 56 5,600 3,720 1978/81 Under construction with UK aid.

10. Kasongo-Jenda 84 10,535 5,000 1978/80 Completion mid-1980 with IDA finan-cing under Cr. 758-MAI.

11. Lilongwe-Dedza Overlays 9 1,550 1,550 1980 Started March 1980 with OPEC SpecialFPnd financing.

Planned

12. Salima-Benga 53 22,800 11,0001/ 1981/83 Feasibility study updated early 1980with KfW financing, which is alsoexpected to finance construction in1981/83.

13. Chileka-twanza-Mozambique border 80 n.a. - 1981/83 Feasibility and preliminary engineer-ing studies undertaken in 1980 withEDF financing.

14. Viphya prinary roads 84 50,000 - - Primary roads component of theViphya Pulp Mill Project. Designfinanced by IDA Credit S-17-MAI.No cosnitment for construction.

15. Karonga-Chitipa-Zambia border 130 n.a. - - Joint Malawi/Zambia approach in finatcing of feasibility study to includeroute on to Lake Tanganyika.

16. Dwanga-Nkhata-Bay 137 n.a. - 1981 Feasibility and preliminary engineer-ing studies due to start 1980 with UKfinancing.

17. Jenda-Mzuzu-Ekwendeni 163 30,000 11,700 1981/83 Feasibility study completed in 1979and design in 1980. Proposed forIDA financing under Fourth HighwayProject being appraised.

18. Liwonde-Nsanama 31 8,850 8,850 1980/82 Feasibility study completion early1980 with KfW financing which is alsoexpected to finance construction in1981/82.

19. Kasungu-Nkhotakota 109 n.a. - n.a. Financing of feasibility study beingsought through AfDB.

20. Upgrading of Secondary Roads 2,400 20,000 12,000 1980/84 Preparatory road inventories and

traffic counts in hand by Ministryof Works and Supplies. Financingunder consideration by CIDA.

21. Benga-Nkhotakota 53 5,800 5,800 1981 Upgrading of existing pavement.Study report completed early 1980with KfW financing. Rehabilitationfinancing under consideration byRfW.

22. DRIMP-Phase II 1,700 3,500 3,500 1981/83 Proposed for IDA financing underFourth Highway Project.

*Exchange rates approximately Malawi Kwacha 1.00-US51.25.1/ Rough estirate.

Source: Ministry of Works and Supplies, January 1980.

October 1980

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Table 2.6: Annual Highway Expenditures, 1970-79(MK '000 in current prices)

1/ US$ MillionFiscal Year Administration Construction Maintenance Total Equivalent

1970 240 3,684 564 4,488 5.01971 280 7,537 587 8,404 9.41972 330 4,855 1,364 6,549 7.31973 360 3,876 1,334 5,570 6.21974 370 3,959 1,378 5,707 6.41975 440 5,995 1,562 7,997 9.01976 440 10,988 1,882 2/ 13,310 14.91977 520 12,307 2,295 2/ 15,122 17.01978 530 14,934 2,003 17,467 19.61979 550 21,103 2,763 2/ 24,416 29.3

1/ Estimated on the basis of total MWS administrative expenses.2/ Includes amounts allocated retroactively for emergency maintenance,

mostly because of severe flood damages.

Source: Economic Planning Division and Ministry of Works and Supplies,Roads Department, February 1980.

E. Engineering

2.24 The Design Department of MWS is staffed by 12 civil engineers and25 technicians and surveyors. The Department has a well-equipped laboratoryfor materials and soils testing and is primarily engaged in design ofstructures; it carries out preliminary investigations and road and bridgedesigns, but engineering for major road projects is done by consultants.The design standards adopted by the MWS (Annex 3) are appropriate for thecountry's topographic and traffic conditions.

F. Construction

2.25 For major road projects, the Roads Department employs contractors,following suitable prequalification and tendering procedures; contracts aregenerally let on a unit-price basis. In recent years, the Roads Departmenthas undertaken several force account road construction projects (about US$3million equivalent annually); the performance of the units has been satis-factory. Labor-intensive methods are employed for construction of culverts,drains and structural excavation, and are being increasingly used in theimprovement and maintenance of district roads (para. 2.29).

2.26 The developing domestic contracting industry is fully employed onbuildings, small structures, estate and other minor roads, as well as resealing

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of short sections of main roads and of runways of minor airfields. Domesticcontractors lack the capacity for major road works, which are undertaken byforeign contractors who have shown considerable interest in working in Malawi.Private Malawian firms have lately been acquiring holdings (up to 49%) inlocal branches of foreign contracting firms. Senior domestic contractorpersonnel are largely drawn from MWS, whose training facilities (para. 2.19)therefore perform a useful function in indirectly training contractor personnel.Construction supervision is carried out by the Roads Department or by consult-ing engineers acting as its representatives. Supervision is satisfactory andpayment procedures are prompt, and, in general, the experience of MWS in

dealing with contractors has been satisfactory.

G. Maintenance

2.27 The Regional Divisions of the MWS are responsible for maintainingthe classified road system with the exception of district roads. Each ofthe regions has a well trained cadre of maintenance personnel. Maintenanceoperations are largely mechanized, although extensive use is made of labor forroutine maintenance. The Roads Department rents equipment from the Plant andVehicle Hire Organization (also under MWS), which is responsible for procuringand maintaining all Government-owned equipment and vehicles; rental rates arebased on the cost of purchasing and maintaining the equipment. Equipmentavailability and utilization rates are satisfactory.

2.28 Until a few years ago maintenance of main and secondary roads inMalawi was fairly good, much better than in most other East African countries.However, while the funds allocated to MWS for recurrent road maintenancehave increased by about 10% annually, the current high inflation rate andthe rapid increases in the length of the improved network have now causedthe funds to be barely sufficient for routine maintenance. Periodic main-tenance will soon be needed for gravel roads and for about 1,000 km of roadspaved in 1970-77; after about 1985 another 1,000 km, paved in 1978-83, willalso require periodic maintenance. The problem will soon be compounded by ashortage of staff, especially at the road technician, mechanic and operatorlevels. The project therefore includes a comprehensive study of maintenanceneeds, and the technical, financial and manpower resources required to meetthose needs (para. 3.09). The study would be coordinated with related effortsby the Canadian International Development Agency (CIDA) (para. 2.21) and otherdonors. The project also includes some funds to procure equipment for minorrepairs of bituminous pavements and to start building a new training center inLilongwe to facilitate expansion of training of road construction and main-tenance personnel (para. 3.10).

2.29 Although Government has traditionally supplemented the DistrictCouncils limited funds for recurrent maintenance by providing an annual lightgrading to the most important district roads, the major portion of the districtroads network was neglected prior to the start of DRIMP in 1974, under theIDA-financed Second Highway Project. Under an initial pilot project in the

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Kasungu District, an improvement and maintenance unit was established whichassumed responsibility for all maintenance operations of the Kasungu DistrictCouncil and trained its roads staff as well as road foremen from all 24districts. The pilot scheme was successful and was subsequently extendedto three additional districts. This ongoing first phase of DRIMP, alsofinanced under the Second Highway Project, includes the establishment ofmaintenance units in each district, improvement of about 1,100 km of districtroads to a maintainable but minimum all-weather standard, and the training ofkey District Council staff both on-the-job and at the Zomba training center.It also includes the establishment of three improvement units equipped withheavy graders, which will supplement the maintenance units in each districtduring the improvement phase. Improvement works are mostly carried out byintermediate technology but labor-intensive methods have been used on a 50 kmdemonstration project and have proved successful. They will be used in-creasingly as far as is economically and practically feasible. The projectwould help finance the second phase of DRIMP, extending the program to tenadditional districts and improving another 2,600 km of roads (para. 3.07).

2.30 The establishment of DRIMP and the improvement works are beingimplemented by MWS with some assistance from consultants because of MWS'sstaff constraints. When this phase is completed the facilities and trainedstaff will be turned over to the District Councils so that they can improvetheir maintenance operations, which will be mostly labor-intensive. Recurrentmaintenance costs will have to be supplemented by the Government as DistrictCouncils revenues are very limited. The proposed project, however, willassist Government in this respect by providing financing on a declining basisfor the incremental portion of the recurrent maintenance costs during theproject period (para. 3.08).

III. THE PROJECT

A. Objectives

3.01 The main objectives of the project are to assist the Government in(a) its general strategy of developing the economic potential of the northernhalf of the country, particularly the Mzimba, Viphya and Mzuzu areas, whichare the centers of recently initiated and planned rural development projects;(b) achieving a balanced pattern of economic and social growth by providingfor improvements and maintenance of district roads; and (c) promoting mainten-ance of the main and secondary road networks. More specifically, the projectaims at:

(a) continuing the upgrading of sections of the country-s mostimportant road to paved standard;

(b) making a start in redressing the country's deteriorating roadmaintenance performance;

(c) extending DRIMP which was initiated under the Second HighwayProject; and

(d) strengthening the transport planning capacity of EPD.

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B. Project Description

3.02 The project consists of:

(a) construction of a two-lane bituminous-paved road betweenJenda and Luwawa Turnoff (32.2 km), and between Mbowe andEkwendeni (37.2 km);

(b) improvement of the existing road between Luwawa Turnoffand Mbowe (100 km) to a low gravel standard to permitregular maintenance;

(c) the second phase of DRIMP;

(d) consulting services, and training where required, for:

(i) supervision of (a) and (b) above;

(ii) assistance to MWS in preparing and carrying out(c) above;

(iii) assistance to MWS in preparing the third phase ofDRIMP;

(iv) assistance to strengthen EPD's transport planningunit; and

(v) a study of road maintenance needs and the capacityand resources of MWS and the District Councils tomeet maintenance requirements;

(e) provision of road maintenance equipment to MWS's RoadsDepartment; and

(f) facilities for the first phase of MWS's new trainingcenter in Lilongwe.

(a) Road Construction

3.03 The road construction component comprises two sections of thecountry-s main north-south road which will ultimately link the NorthernRegion with the more developed Central and Southern Regions. The road has,during recent years, been constructed from the south with IDA financing underthe First, Second and Third Highway Projects (about 500 km from Zomba throughLilongwe and Kasungu to Jenda), and from the north with financing from theEDF, the Kreditanstalt fur Wiederaufbau (KfW) and the African Development Fund(AfDF) (about 210 km from Karonga through Chiweta and Rumphi to Ekwendeni).Construction of the two sections under the project would leave only about 100km of unpaved road out of a total distance of about 1,100 km between Bangulain the deep south and Karonga in the far north. Drainage on the existing roadis poor, resulting in road closures during the rainy season, and the surfaceis very rough and costly to maintain under present conditions.

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3.04 The alternative of upgrading the road to an engineered gravelstandard was considered but was not found technically or economically feasiblebecause of the steep slopes and scarcity of naturally available gravels in thearea.

3.05 Detailed engineering for the road construction was carried outby the Malawi Branch of Scott Wilson Kirkpatrick and Partners (U.K.) and issatisfactory. The geometric and structural design standards (Annex 3) areconsistent with established standards in Malawi and are appropriate for theterrain and forecast traffic. They are generally based on a design speed of50 m.p.h. (80 km p.h.) and a maximum gradient of 6.5%. The pavement structurewill be a crushed stone basecourse with a double 6.7 m wide bituminous surfacetreatment and a 1.5 m wide shoulder on each side.

(b) Road Improvements

3.06 Paving of the remaining 100 km of road section from Luwawa Turnoffto Mbowe is not recommended at this stage because for the most part it wouldnot be economically justified (see para. 4.10). However, Government iscurrently studying the possibility of developing the wood resources of theViphya forest, and for the scope of development likely to be feasible in thearea, considerable upgrading of the road, in tandem with intensive subsequentmaintenance, would be needed for it to withstand the effects of the forecasttraffic over the next few years, until full reconstruction becomes viable.The project will therefore finance improvement of the Luwawa Turnoff-Kalungulu(42.5 km) and Champhoya-Mbowe (47 km) road sections to a low- all-weathergravel standard by widening of narrow sections, highly improved drainage(including new culverting), reshaping of formation and a 15 cm gravel surface.The Kalungulu-Champhoya section (10.5 km) is already in acceptable conditionand would need only to be gravelled. This would facilitate the carrying outof routine maintenance and intensive grading over the next few years offorecast traffic.

(c) Second Phase of DRIMP

3.07 The project would extend the ongoing first phase of DRIMP to tenadditional districts that have already been agreed with the Government.Selection of roads for improvement and planning for the maintenance units inthese districts were carried out by Scott Wilson Kirkpatrick and Partners.Facilities to be provided and a list of roads to be improved during the firstyear of the project have been agreed with the Government; the work program forsubsequent years will be agreed not later than four months before the beginningof each fiscal year until completion of this project component (para. 5.01(a)).The project would provide for the establishment of maintenance units in eachdistrict including a depot, housing for key staff and light equipment (Annex4). It would also provide for improvement of about 2,600 km of district roadsunder the jurisdiction of the District Councils in those ten districts;lists of roads to be improved are given in Annex 5. Improvement works wouldbe carried out by the three existing improvement units established underPhase I and the ten maintenance units to be established under the proposedsecond phase of DRIMP.

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Implementation of the second phase should start immediately following comple-tion of the first phase in mid-1981. In order to avoid disruptions inimplementing road improvements, construction of depots and housing for keystaff in the first three districts of the second phase should be completed atthat time. As the construction, carried out by local contractors or, iftendering is unsuccessful, by force account, has a long lead time and theconstruction period is about 8-12 months, it is proposed that payments since,July 1, 1980, for the construction of depots and housing in the first threedistricts of DRIMP's second phase, be financed retroactively under theProject up to a maximum of US$350,000.

3.08 Maintenance of the district roads, subsequent to improvements,will be undertaken by the District Councils using the facilities provided,and staff trained, under the project. While Government has provided theDistrict Councils with some assistance for recurrent maintenance (para. 2.29),regular maintenance of the improved network will require substantial andincreasing Government assistance. The Government has agreed to assist theDistrict Councils by providing grants to supplement the Councils revenuesavailable for road maintenance, in amounts sufficient to bring the total up tothe recurrent maintenance cost for each district as annually assessed by MWS.Government disbursements would be tied to output which in turn requiressupervision by MWSs regional offices. Because of the country's difficulteconomic situation and because Government will concurrently need to increaseits allocations for recurrent maintenance of main and secondary roads, it isproposed that during the project period the Credit would provide financing ona declining basis for the incremental portion of the recurrent maintenancecosts of roads to be improved under DRIMP. The system of Government assis-tance, and the allocations needed during the project period have been agreedwith Government (Annex 6); appropriateness of allocations will be discussedannually by Government and IDA on the basis of MWS's updated estimates of thefunds required by the District councils (para. 5.01 (b)).

(d) Consulting Services and Training

3.09 The project provides consulting services, and training where necessary,for the following purposes:

(i) supervision of construction of the Jenda-Luwawa Turnoffand the Mbowe-Ekwendeni road sections and of improvementof the Luwawa Turnoff-Mbowe section;

(ii) technical assistance in planning for and implementing thesecond phase of DRIMP, the establishment of the maintenanceunits, the training of local staff, the road improvementsand the subsequent maintenance, since MWS lacks sufficientstaff for this purpose (para. 2.30). In order for thesecond phase to start immediately following completion ofthe first phase in mid-1981, Government has financed thepreparation of the second phase, carried out by the

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consultants Scott Wilson Kirkpatrick and Partners, who alsoprepared the first phase and are providing technical assistancefor its implementation. It is, therefore, proposed that pay-ments since July 1, 1980 for the preparation of the secondphase be financed retroactively under the project up to amaximum of US$230,000;

(iii) technical assistance in planning for and preparing the thirdphase of DRIMP since MWC lacks sufficient staff for thispurpose (para. 2.30);

(iv) technical assistance to strengthen EPD's transport planning unitwith one transport planner for about three years and overseastraining in transport planning of about three local staff forapproximately two years. Terms of reference for the transportplanner are given in Annex 7. An agreement has been reached withGovernment that by December 31, 1981, a transport economist will beappointed with qualifications and experience and under terms andconditions satisfactory to the Association. It has also been agreedthat by June 1, 1981, Government will select the first of aboutthree candidates for overseas training and the remaining ones byDecember 31, 1981; the trainees qualifications and the proposedtraining program will be satisfactory to the Association (para. 5.01

(c));

(v) in preparation for expanded maintenance operations, a comprehen-sive study of the maintenance needs of all road classes, and ofthe capacity of MWS and the District Councils to meet mainte-nance requirements on a continuing basis. The study would makespecific recommendations covering an initial five-year period,including the expansion of facilities (depots, equipment, etc.),manpower requirements at all levels, and the funding needs forrecurrent maintenance. Terms of reference for the study are givenin Annex 8 and have been agreed with Government. Agreement has alsobeen reached with Government: (1) on maintenance allocations forthe next two years, which will be increased in real terms by 10%each year (a total of 21%); (2) that Government will exchange viewswith the Association on the findings and recommendations of themaintenance study, which is to be completed by May 31, 1982; (3)that Government will establish a rolling 5-year maintenance programsatisfactory to the Association to implement the recommendations ofthe study; and (4) that thereafter, not later than four monthsbefore the beginning of each fiscal year until five years aftercompletion of the project, Government will exchange views with theAssociation on the 5-year rolling program, including each year'smaintenance works and allocations (para. 5.01(d)).

(e) and (f) Maintenance Equipment and Training Center Facilities

3.10 While any large-scale effort to strengthen MWS's maintenance depart-ment must await the conclusion of the maintenance study, the proposed projectwould begin to correct the country's deteriorating road maintenance perform-ance by providing for (i) equipment to complement and expand existing plantfor minor repair of bituminous pavements; it has been agreed with Government

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Table 3.1: Cost Estimates

MK million USS million %Local Foreign Total Local Foreign Total Foreign

(a) Road Construction

(i) Jenda-Luwawa Turnoff 1.83 4.25 6.08 2.29 5.31 7.60 70(ii) Mbowe-Ekwendeni 2.25 5.24 7.49 2.81 6.55 9.36 70

Subtotal (a) 4.08 9.49 13.57 5.10 11.8f 16.96

(b) Road Improvements

(i) Luwawa Turnoff-Champhoya 0.64 1.01 1.65 0.80 1.26 2.06 61(ii) Champhoya-Mbowe 0.60 0.95 1.55 0.75 1.19 1.94 61

Subtotal (b) 1.24 1.96 3.20 1.55 2.4 4.00

(c) DRIMP, Second Phase

(i) Facilities and Improvements 2.45 1.93 4.38 3.06 2.41 5.47 44(ii) Maintenance Operations 0.88 0.59 1.47 1_ial .0.74 I.R. 40

Subtotal (c) 3.33 2.52 5.85 4.16 3.15 7.31

(d) Consulting Services and Training

(i) Supervision of a(i) 0.06 0.31 0.37 0.07 0.39 0.46 85(ii) Supervision of a(ii) 0.08 0.46 0.54 0.10 0.58 0.68 85

(iii) Supervision of b(i) 0.01 0.05 0.06 0.01 0.06 0.07 . 85(iv) Supervision of b(ii) 0.01 0.04 0.05 0.01 0.05 0.06 85(v) Technical Assistance for (c) & training 0.14 0.78 0.92 0.18 0.97 0.15 85(vi) Preparation of DRIMP, Third Phase 0.03 0.17 0.20 0.04 0.21 0.25 85

(vii) Technical Assistance to EPD & training 0.04 0.25 0.29 0.05 0.31 0.36 85(viii) Maintenance Study 0.08 0.42 0.50 0.10 0.53 0.63 85

Subtotal (d) 0.45 2.48 2.93 0.56 3.10 3.66

teF Mdinfenance Equipment for MWS 0.01 0.10 0.11 0.01 0.13 0.14 90

(f) New Training Center 0.30 0.20 0.50 0.38 0.25 0.63 40

Subtotal (a-f) 9.41 16.75 26.16 11.76 20.94 32.70

(g) Contingencies

(i) Physical (10%) 0.94 1.68 2.62 1.17 2.10 3.27(ii) Pricel/ 2.08 2.90 4.98 2.60 3.63 6.23

Subtotal (g) am2 4.58 7.60 3.77 5.73 9.50

Total Project Cost 12.43 21.33 33.76 15.53 26.67 42.20 63Total Project Cost excluding = -- -

taxes and duties 10.03 21.33 31.36 12.53 26.67 39.20 68

l/ Expected price increases are the following, expressed as a

1980 1981 1982 1983

For civil works and equipment - foreign component 10.5 9.0 8.0 7.0- local component 12.0 12.0 10.0 10.0

For consulting services 10.0 10.0 10.0 10.0

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that the following equipment would be procured under the project (para.5.01(e)): 3 bitumen minibatch mixers/spreaders, 3 vibrating rollers (hand),3 small bitumen heaters and 3 pick-up vehicles (1-1/2 tons); and (ii) thefirst phase of MWS's new training center in Lilongwe; facilities (classroomsand dormitories for 25 trainees, staff housing) to be provided to the centerhave been agreed with Government (Annex 2, Attachment 1) (para. 5.01(f)).

C. Cost Estimates

3.11 The total project cost including contingencies is currently esti-mated at US$42.2 million, with a foreign exchange component of US$26.7 millionor 63% of total project costs. Excluding taxes and duties, the total cost isabout US$39.2 million. Details are provided in Table 3.1.

3.12 The base costs are estimated as of mid-1980 and have been derivedas follows:

(a) Road Construction: The cost estimates for construction of theJenda-Luwawa Turnoff and the Mbowe-Ekwendeni road sections, to becarried out in 1981/82, were derived from consultants' estimatesbased on final design quantities. Estimated costs averagebetween US$200,000 and US$250,000 per km which appear reasonablein the light of bids recently received for similar works. In adetailed analysis, the consultants estimate the foreign exchangecomponent of construction at 70% of total costs. This componentincludes depreciation of equipment, imported materials, fuel,spare parts, the foreign expense of expatriate personnel, over-head costs and profits. The local component mainly compriseslabor and taxes.

(b) Road Improvements: The cost of improvements for the LuwawaTurnoff-Mbowe road section, to be carried out in 1982, isderived from consultants' estimates based on a road inventory.Estimated costs average about US$40,000 per km.

(c) DRIMP: The costs of establishing the maintenance units and ofimprovement works and subsequent maintenance are based on actualcosts incurred for such units under DRIMP's first phase. Theimplementation period would extend from mid-1981 to about mid-1984.

(d) Consulting Services: The supervision of construction and improve-ments will require about 130 man-months of consulting services;the technical assistance for preparation and implementation ofDRIMP's second phase will require about 90 man-months; technicalassistance for preparation of DRIMP's third phase, about 15man-months; technical assistance to strengthen EPD's transportplanning unit, about 30 man-months; and the maintenance study,about 55 man-months. Estimated total costs are US$1,270,000,

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US$1,150,000, US$250,000, US$300,000, and US$630,000, respectively.The average man-month cost, including salary, costs, fees, inter-national travel and subsistence is estimated at about US$8,200for the construction supervision, US$9,000 for the technicalassistance to DRIMP-s second phase, US$10,000 for the technicalassistance to prepare DRIMP's third phase, and US$9,500 for thetechnical assistance to EPD and for the maintenance study;these costs are in line with recent experience in Malawi. Inaddition to these personnel costs, the contract costs includethe costs of local transportation, local office operatingexpenses, printing of reports and some other minor expenses.The estimated costs for the maintenance study, which should becompleted by mid-1982, also include the cost of equipment forpavement roughness and strength evaluation.

(e) Assistance to MWS Maintenance Operations: Cost of equipment wasassessed at US$140,000, on the basis of existing market prices inMalawi. The cost of MWS's new training center was estimated by MWSon the basis of current prices in Malawi.

D. Financing

3.13 The project cost net of taxes and duties is US$39.2 million. TheIDA Credit of SDR 25.9 million (about US$33.0 million equivalent) will finance100% of the foreign cost and about 51% of the local cost (about 84% of thetotal cost net of taxes and duties) of the project. Government will financethe remaining US$6.2 million (about 16% of total cost net of taxes and duties).

E. Implementation and Procurement

3.14 MWS will be responsible for project execution apart from the tech-nical assistance for transport planning, for which EPD will be responsible.Road construction and improvements totalling about US$21.0 million, will beexecuted under two unit price contracts awarded after international competi-tive bidding (ICB) in accordance with Bank Group guidelines.

3.15 Because of the small scope and scattered location of works, thedepots and housing for the second phase of DRIMP and MWS's new trainingcenter, totalling about US$2.5 million, will be constructed by local con-tractors, following local competitive bidding procedures satisfactory tothe Association or, if this proves unsuccessful, by force account as underDRIMP's first phase. In order to train local staff in the ten districts,improvement and maintenance works under DRIMP's second phase, amounting to atotal of US$4.5 million, will be by force account, with consultants providingtechnical assistance in line with experience under the Program's first phase.

3.16 Supervision of road construction and improvements, as well astechnical assistance for the second phase of DRIMP, the preparation of

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DRIMP's third phase, the technical assistance to EPD's transport planningunit, and the carrying out of the maintenance study will be by consultantsemployed under terms and conditions satisfactory to the Association at atotal cost of about US$3.7 million; this has been agreed with Government(para. 5.01(g)).

3.17 In view of the diversity of types and the few numbers of each typeof equipment for maintenance of bituminous pavements, costing a total of aboutUS$140,000, procurement of these items will be through local shopping. Tomaintain standardization and interchangeability between districts as well aswith MWS's PVH0, which will undertake repairs and overhauls, equipment for thedistricts' maintenance units, costing a total of about US$940,000 (includingabout US$190,000 for equipment to strengthen the existing improvement units)would be purchased either from manufacturers supplying equipment for the firstphase of DRIMP, by extending existing contracts if still in effect at the timeof Credit signing, or by local shopping.

3.18 An implementation schedule is presented in Chart 2, the detailsof which have been agreed with Government (para. 5.01 (h)).

F. Disbursements

3.19 The Credit funds would be disbursed on the following basis:

(a) 80% of total expenditures for construction and improvementson the Jenda-Ekwendeni road;

(b) 100% of foreign expenditures and 90% of local expendituresfor equipment, vehicles and spare parts;

(c) 70% of expenditures on civil works (depots and housing) for DRIMP'ssecond phase and on civil works for MWS's new training center;

(d) 60% of expenditures on civil works for district roads' improve-ments under DRIMP's second phase;

(e) 85% of total expenditures for consultants' services;

(f) for incremental maintenance expenditures on district roads:for each district being brought into the maintenance program,subsequent to completion of road improvements, 75% of incre-mental costs during the first year of maintenance; 50%during the second year of maintenance; and 25% during thethird year of maintenance; and

(g) 100% of foreign expenditures for overseas training of EPD staff.

It is recommended that IDA finance retroactively up to US$350,000 to meet 70%of total costs of depots and housing for the first three districts of DRIMP-s

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second phase (para. 3.07) and up to US$230,000 to meet the foreign exchangecomponent of consultants' fees for the preparation of DRIMP's second phase(para. 3.09 (ii)). IDA financing of the incremental total cost of maintenance,declining from 75% for the first year of maintenance to 50% for the secondyear and 25% fozr the third year, would be matched to Government's financialassistance to the District Councils in accordance with targets agreed withGovernment (para. 5.01(b)).

3.20 All disbursements will be fully documented except for expendituresunder force account for civil works included in Parts c and f of Table 3.1which will be made against certificates of work performed, to be issued bythe technical assistance consultants. The documents supporting these state-ments of expenditure will not be submitted for review but will be retainedby MWS for inspection by the Association during project supervision missions.

3.21 An estimated schedule of disbursements is given in Table 3.2.

Table 3.2: Estimated Schedule of Disbursements

IDA Fiscal Year Cumulative Disbursementsand End of Quarter at End of Quarter

(US$'000)

1981

June 30, 1981 1,000

1982

September 30, 1981 6,200December 31, 1981 10,600March 31, 1982 14,900June 30, 1982 19,500

1983

September 30, 1982 24,700December 31, 1982 27,600March 31, 1983 28,500June 30, 1983 29,600

1984

September 30, 1983 30,500December 31, 1983 31,900March 30, 1984 32,400June 30, 1984 32,700

1985

September 30, 1984 33,000

Closing Date: December 31, 1984

Source: Mission Estimates, December 1980.

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G. Accounting, Auditing and Reporting Requirements

3.22 Project accounts, including statements of expenditures, will bemaintained by MWS with separate accounts for each component. In previousIDA projects, accounts have been audited by the Auditor General; as thisarrangement has proved satisfactory, it would also be followed for theproposed project. Government has agreed that all project accounts will be

audited by the Auditor General and that the audited accounts together with theauditors' report will be submitted to IDA not later than six months after theend of the fiscal year (para. 5.01(i)). Government has also agreed on progressreporting requirements (Annex 9), which should include indices for measuringimplementation, and the submission of a project completion report, in a formsatisfactory to the Association, not later than six months after the closingdate (para. 5.01(h)).

IV. ECONOMIC EVALUATION

A. Evaluation of Project Components

General

4.01 The Government of Malawi's Statement of Development Policies (1971)lists the following as main socioeconomic objectives: (a) rural development;(b) increasing real GDP through the development of smallholder output, estateagriculture and industry; and (c) promoting development of its Northern Regionwhich had heretofore been isolated from the rest of the country. The proposedproject continues the work done under previous IDA projects to assist Govern-ment in attaining these objectives. The project includes upgrading of theJenda-Mzuzu-Ekwendeni road (169 km), part to paved standard (69.4 km) and partto all-weather gravel standard (100 km); this would only leave unpaved 100 kmof the 1,100 km north-south spine road linking the Northern Region with therailway and population centers to the south. In addition, the road sectionsto be constructed and improved under the project would support Government-sspecific development goals for the Mzimba, Viphya and Mzuzu areas, which arethe centers of recently initiated or planned rural development projects. Atpresent, access to the north is provided only by air, lake transport andlow-standard earth roads. The project component to help improve and maintainthe district road network will support rural development efforts by facilitat-ing the provision of agricultural inputs and extension services, and allowingthe expansion of distribution and marketing systems. Finally, the project-smaintenance component, which will lay the groundwork for improving Government shighway maintenance organization and execution of works, is a necessaryadjunct to all three of the development goals mentioned above.

4.02 The construction and improvement of the road is justified andexpected to yield an economic return (ER) of about 19%. District roads

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to be improved under the project are selected in accordance with socio-economic criteria and have a rate of return of at least 12%. No ER hasbeen calculated for the maintenance study and equipment provided under theproject, although if implemented, the study-s recommendations are expected toresult in substantial benefits deriving from Government-s increased capacityto maintain the road network.

1. Upgrading of the Jenda-Mzuzu-Ekwendeni Road (169 km)

(a) Main Benefits and Beneficiaries

4.03 The main project benefits from these works are related to reducedvehicle operating and maintenance costs. Benefits deriving from the impact ofthe road on the north in terms of increased agricultural production have onlypartially been allowed for in estimates of generated traffic in the economicanalysis. Benefits from accident reduction have not been included in thecomputation of the economic returns.

4.04 In the first instance, the major beneficiaries of transport costreductions will be the local truck owners and operators. However, in view ofthe competitive nature of the road transport industry (para. 2.07) and thefact that Government-prescribed rates, when observed, take account of roadconditions, it can be expected that the savings in operating costs and timewill be passed on in the form of lower freight rates to the farmers and othershippers in the zone of road influence. Consumers are also expected tobenefit from reduced transport costs, particularly those living in the northwhere prices are substantially higher than in the south, partly because oftransport costs.

(b) Area of Influence of the Project Road

4.05 The Jenda-Mzuzu-Ekwendeni road forms part of the Bangula-Karongahighway, the backbone of the country's road network. The main road will havenational importance by serving to unify the entire country and will eventuallyform part of an international route to Dar es Salaam via Karonga-Chitipa-Tunduma. The Mbowe-Ekwendeni section to be constructed under the project willrun through Mzuzu, the administrative and commercial center for the wholeNorthern Region, while the Jenda-Mbowe road section will serve the Mzimba andViphya areas, which are now either being developed or are planned for develop-ment. Furthermore, the road will provide an outlet for feeder roads carryingcash crops for export, as well as production from estate and smallholderfarming.

4.06 A number of development projects have already started within theproject road's direct and indirect zone of influence. The Association isinvolved in two of these projects: the Second Karonga Rural DevelopmentProject and a Wood Energy Project to help establish forestry plantationand farmers- woodlots in the districts of Karonga, Chitipa, Mzimba andRumphi. Tobacco, rice and tea cultivation schemes would also be indirectlyserved by the road. In addition, Government is presently studying the

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possibilities for developing the Viphya forest; consultants financed by theOverseas Development Administration (ODA) and KfW are studying various woodprocessing industries for sawed wood, particle boards, block wood, wood-based energy products, and pulp and paper products. The economic analysisdoes not take into account the traffic which will be generated by suchindustries (probably to be situated near the project road), as there arecurrently no firm plans to develop the wood resources. However, when theplans are finalized and the wood-processing industries established, theeconomic justification for paving the remaining unpaved sections of theproject road should be evaluated, given the substantial benefits expectedfrom savings in vehicle operating and maintenance costs which will arisefrom the traffic generated by the wood-processing industries.

(c) Economic Analysis

(i) Traffic

4.07 Traffic on the road is assumed to grow at 7% p.a. in accordancewith recent traffic count (Table 4.1). By 1983, when construction of the roadis completed, traffic will vary from 83 vpd on the Luwawa Turnoff-Kalungulusection to 395 vpd on the Mzuzu-Ekwendeni section; this includes normal anddiverted traffic, plus traffic generated from agricultural projects at thenorthern and southern ends of the road. Generated traffic equivalent to10% of the 1983 traffic level has also been included in the evaluation ofthe paved road sections (Jenda-Luwawa Turnoff and Mbowe-Ekwendeni).

Table 4.1: Projected Traffic Levels in 1983(vpd)

Normal and 1/ 2/ 3/Diverted Generated Agricultural Total

Jenda-Luwawa Turnoff (32 km) 105 10 16 131 (55)Luwawa T.off-Kalungulu (42.5 km) 76 - 7 83 (28)Kalungulu-Champhoya (10.5 km) 115 - 15 130 (49)Champhoya-Mbowe (47 km) 83 - 14 97 (26)Mbowe-Mzuzu (17 km) 160 16 1 177 (53)Mzuzu-Ekwendeni (20 km) 353 34 8 395 (133)

1/ Generated traffic benefits are only valued at half the unit rate appliedto normal traffic in the economic analysis.

2/ From both ongoing and planned agricultural development projects in areaof road and Mazamba sawmill.

3/ Figures in brackets represent heavy traffic, i.e, all trucks and buses.

Sources: Scott Wilson Kirkpatrick and Partners, Feasibility Study ofJenda-Mzuzu Road and mission estimates.

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(ii) Vehicle Operating Costs

4.08 Vehicle operating costs (voc) for the road section to be gravelled(Luwawa Turnoff-Mbowe) were estimated by IDA staff while voc for other roadsections were determined by the Highway Design and Maintenance Model (HDM).According to the HDM model, voc will increase significantly on earth (aswell as gravel) roads as traffic increases, particularly when traffic exceeds100 vpd. This occurs even with a modest increase in maintenance expendituressince the roads were not originally designed and constructed for a high levelof traffic. Table 4.2 gives voc for representative vehicles on roads carryingabout 115 vpd.

Table 4.2: Vehicle Operating Costs 1/(MK per km)

Vehicle Type Earth Gravel Bitumen

Car 0.37 0.25 0.19Landrover 0.84 0.53 0.35Bus 1.19 0.90 0.75Truck (7 ton) 0.53 0.45 0.41Truck (14 ton) 1.04 0.96 0.76Truck (27.5 ton) 1.50 1.19 1.01

1/ Net of taxes and duties in mid-1980 prices.

Sources: Derived from Scott Wilson Kirkpatrick and Partner sapplication of HDM model in Feasibility Study of theJenda-Mzuzu Road.

(iii) Costs of Construction, Improvement and Maintenance

4.09 Annex 10 shows cost estimates of the road construction and improve-ment; these are net of taxes at mid-1980 prices and include the cost ofsupervision and physical contingencies of 10%. Costs for the Jenda-LuwawaTurnoff, Mbowe-Mzuzu and Mzuzu-Ekwendeni sections cover construction ofthe road to paved standard, to be built by contract. Improvement costs ofthe Luwawa Turnoff-Kalungulu and Champhoya-Mbowe sections include costs forwidening the road, improving the drainage, and gravelling. Costs for theKalungulu-Champhoya section only include gravelling as this road is inacceptable condition.

(iv) Economic Return

4.10 Economic analysis of the abovementioned costs and benefits showsthat upgrading of the Jenda-Mzuzu-Ekwendeni road is well justified. Theoverall economic return is estimated at 19% under the traffic growth estimate.A separate analysis has also been carried out for each section of the road.On the three road sections to be improved to paved standard the ER rangesfrom 13% to 30% (Table 4.3), while the three sections to be improved to

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gravel standard show rates of return between 11% and 55%. Details of theeconomic evaluation are given in Annex 10. The sections to be paved werealso considered for improvement to engineered gravel standard, but this wasnot found justified due to the very high cost of regravelling (gravelsources in the area are scarce and rock crushing would be necessary) andthe eventual need to construct the road to paved standard. The economicanalysis of the other three sections showed that paving was not justifiedat this time, except for the Kalungulu-Champhoya section (10.5 km) which istoo short a section to pave. The three sections will be gravelled onlyonce because of the inadequate supply of gravel in the area. The economicviability of paving these three sections should be re-evaluated followingestablishment of the wood-processing industries.

Table 4.3: Estimated Rates of Return

Rate of Return

Total Project (169 km) 19%Jenda-Luwawa T.off (32 km) 13%Luwawa T.off-Kalungulu (42.5 km) 11%Kalungulu-Champhoya (10.5 km) 55%Champhoya-Mbowe (47 km) 18%Mbowe-Mzuzu (17 km) 16%Mzuzu-Ekwendeni (20 km) 30%

(v) Sensitivity

4.11 The various components of the economic evaluation have not beenestimated with equal degrees of reliability. To determine the sensitivityof the ER to variations in the estimated costs and benefits, an analysis wascarried out, assuming an overall increase in costs and decrease in benefits,both separately and individually. The results of this analysis indicate thatwith either a 20% increase in costs or only a 5% growth in traffic, the ERwould be 16%. A combination of the two would yield an ER of 13%, which isstill above 12%, the estimated opportunity cost of capital in Malawi.

2. District Road Improvement and Maintenance Program (DRIMP)

(a) Main Benefits and Beneficiaries

4.12 Under the proposed extension of DRIMP to ten additional districts,maintenance units would be established in all ten districts and about 2,600km of district roads would be improved and subsequently maintained. Benefitsfrom the works to be undertaken are expected in the form of:

(a) vehicle operating cost savings to nonagricultural traffic,although traffic will not be sufficiently high to alonejustify improvement for many of the roads, and

(b) increases in agricultural production made possible byeasier access to farms and markets.

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The economic analysis assumes that improved access to agricultural extensionservices and marketing facilities will induce farmers not only to increasethe productivity of the land already cultivated, but also to put more avail-able land under cultivation. Evidence from the IDA-financed Lilongwe LandDevelopment Program (Crs. 113, 244, and 550-MAI) would tend to support theabove assumptions, since the program's success in promoting the use of bothimproved seeds and fertilizer primarily hinged on the road network, whichallowed the timely and adequate provision of inputs.

4.13 Significant benefits are also expected from institution building,since training as well as equipment and depots will be provided to theDistrict Councils so that they may gradually be able to expand their roadmaintenance capacity. There will also be benefits from reduced spoilage ofproduce and improved access to health, education and other social and adminis-trative facilities for those residing in the influence area of the projectroads.

4.14 Most of the benefits from the reduction in transport costs willaccrue to (a) the road transporters, since ADMARC pays them fixed rates fortransportation of goods to and from rural markets, and (b) the farmers livingwithin the roads influence area, assuming reduced transport costs are passedon to them. The main beneficiaries from the increased agricultural productionand improved access to social amenities will be those residing in the vicinityof the roads.

(b) Economic Analysis

4.15 Selection of the district roads to be improved during the 3-yearperiod covered by the second phase of DRIMP will be based on socioeconomiccriteria, and all roads will have an estimated rate of return of at least 12%.The economic analysis of the roads include an estimate of benefits not onlyfrom vehicle operating cost savings, but also from incremental agricul-tural production, the latter based on farm models representative of theareas of influence of the roads proposed for improvement. Details of themethodology employed are included in Annex 11. The selection criteriaand methodology for calculating the rate of return were agreed with Governmentduring appraisal. In May 1980, Government appointed consultants to selectall roads to be included in the program. Government and the Association haveagreed on roads to be improved during the first year of the program, and roadsto be improved in subsequent years will be agreed annually not later than fourmonths before the beginning of each fiscal year (para. 5.01(b)).

3. Other Project Elements

4.16 The remaining project components include the comprehensive studyof maintenance needs in preparation for a 5-year maintenance program, tech-nical assistance to prepare the third phase of DRIMP and to strengthentransport planning and coordination, and the provision of some maintenanceequipment as well as facilities for MWS's new training center in Lilongwe.All five components will help to reverse the country's deteriorating road

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maintenance performance and are justified on those grounds; the technicalassistance for transport planning will also assist in improving budgetmanagement, thus reducing the risk of misallocating scarce funds. Themaintenance study is particularly important by assisting Government to _

plan for the technical, financial and manpower requirements for the main-tenance of its rapidly increasing road network and could pave the way forfurther IDA lending for maintenance. At present the project-funded mainte-nance equipment and training facilities will begin to address some of thecountry's needs.

B. Risks

4.17 Other than the risks already discussed in the sensitivity analysis(para. 4.11), there are no major risks associated with the upgrading ofthe Jenda-Mzuzu-Ekwendeni road. However, the major risk threatening bothDRIMP and the maintenance program to be agreed under the project is theavailability of Government's financial resources for maintenance of both thenational and district road networks. To minimize the risk, agreement has beenreached on Government financing of maintenance costs. The Association wouldhelp to cushion the burden by financing the incremental maintenance costs forDRIMP on a declining basis. However, the Government's eventual ability touphold these agreements will depend on the strength of its economy and itscontinued responsiveness to the needs of the road subsector.

V. AGREEMENTS REACHED AND RECOMMENDATION

5.01 Agreement has been reached with Government:

(a) on a list of facilities (depots, housing, equipment, tools) to beprovided and on a list of district roads to be improved during thefirst year of the second phase of DRIMP; the work program forsubsequent years will be agreed not later than four months beforethe beginning of each fiscal year until completion of this projectcomponent (para. 3.07);

(b) on a system of financial assistance for recurrent maintenanceto be provided by Government to the District Councils and theallocations needed during the project period. The appropriate-ness of allocations will be discussed annually, not later than fourmonths before the beginning of each fiscal year, by Governmentand IDA on the basis of MWS's updated estimates of the funds requiredby the District Councils (para. 3.08);

(c) that by December 31, 1981, a transport economist will be appointedto assist EPD, having qualifications and experience and under termsand conditions satisfactory to the Association. It has also beenagreed that by June 1, 1981, Government will select the first ofabout three candidates for overseas training in transport planningand the remaining ones by December 31, 1981; the trainees quali-fications and the proposed training program will be satisfactory tothe Association (para. 3.09);

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(d) (i) on maintenance allocations for the next two years; (ii)that Government will exchange views with the Association on thefindings and recommendations of the maintenance study, which is tobe completed by May 31, 1982; (iii) that Government will establish arolling 5-year maintenance program satisfactory to the Associationto implement the recommendations of the study; and (iv) that there-after not later than four months before the beginning of each fiscalyear until five years after completion of the project, Governmentwill exchange views with the Association on the 5-year rollingprogram, including each year's maintenance works and allocations(para. 3.09);

(e) on the number and types of equipment to be procured for MWS(paras. 3.10 and 3.17);

(f) on facilities to be provided for MWS's new training center inLilongwe (para. 3.10);

(g) that consultants will be employed on terms and conditionssatisfactory to the Association (para. 3.16);

(h) on a project implementation schedule (para. 3.18) as wellas progress reporting requirements, and the submission ofa project completion report (para. 3.22); and

(i) that all project accounts will be audited by the AuditorGeneral and that the audited accounts together with theauditor's report will be submitted to IDA not later thansix months after the end of the fiscal year (para. 3.22).

5.02 The proposed project is suitable for an IDA Credit of SDR 25.9million (US$33.0 million equivalent) to the Government of Malawi on standardterms.

December 22, 1980

-38-ANNEX 1Page 1 of 4

MALAWI

FOURTH HIGHWAY PROJECT

Transport-Related IDA Projects in Malawi

A. HIGHWAY PROJECTS

Approximate StatusYear Credit Amount Main Purpose LengLh (% complete)

(US$ Mil) (km)

1966 S-2-MAI 0.49 Detailed engineering for - 100main roads.

1968 112-MAI 11.5 Main roads construction; 290 100study of road transportregulations and road/railcoordination. Refundingof Credit S-2-MAI.

1974 523-MAI 10.5 Main roads construction; 113 100pilot scheme for theDistrict Roads Mainte-nance and ImprovementProgram (DRIMP); 300 100First Phase extension ofDRIMP. 1,100 65

1974 S-17-MAI 2.0 Design of infrastructure - 95requirements for exploit-ation of the Viphyaforest resources.

1977 758-MAI 10.5 Main roads construction; 85 100feasibility study anddetailed engineering ofmain roads.

B. AGRICULTURAL PROJECTS

1968 113-MAI 6.0 The Lilongwe Land Develop- 1,900 1001971 244-MAI 7.3 ment Program included a1975 550-MAT 8.5 component for construction

of feeder roads.

1968 114-MAI 3.7 The Shire Valley Develop- 430 70363-MAI 10.5 ment Project included a

1978 823-MAI minor component for con-struction and rehabilita-of main, secondary andfeeder roads.

-39-ANNEX 1Page 2 of 4

Approximate StatusYear Credit Amount Main Purpose Length (% complete)

(US$ Mil) (km)

1971 282-MAI 6.6 Karonga Development 130 50 (roads)1976 1286-T-MA-i/ 9.2 Project included a minor 100 (ports)

component for rehabili-tation of freight serviceson Lake Malawi, includingport facilities.

1978 857-MAI 22.0 National Rural Development 1,600 10Project includes a roadcomponent, cofinanced byEDF, to construct andrehabilitate roads inproject areas.

1/ Third Window Loan.

Source: IDA appraisal reports and department files.

December 1980

\

-40- ANNEX 1Page 3 of 4

MALAWI

FOURTH HIGHWAY PROJECT

Status of Government's Compliance withMajor Covenants in Previous Credits

Credit 523-MAI, Second Highway Project

Section of CreditAgreement Commitment Action

Section 3.01 (b) Consult with IDA from time to Has been done during alltime on the desirability of supervision missions. Construc-using a cement stabilized base tion is complete and no stabili-for highway construction. zation was needed.

Section 3.07 By December 31, 1976, discuss Report has been submitted andwith IDA, the Borrowers' eva- discussed in connection withluation report on district proposed extension of program toroad maintenance pilot pro- other districts.gram.

Section 4.01 Keep records to adequately Has been complied with.reflect operations, resourcesand expenditures of the Project.

Section 4.02 Take necessary stps to ensure Weighbridges in three strategicthat dimensions and axle loads locations have recently been madeof vehicles shall be consistent operative. Existing legislationwith structural and geometric is being enforced; amendments tostandards of national highways. increase penalties are under

preparation.

Section 4.03 Establish and maintain a suit- Program of periodic countingsable traffic survey system. covering all of the country

started in 1974. Continuouscounting in selected locationsalso started in 1974.

Section 4.04 Adequately maintain national Maintenance of main and secondaryroads in accordance with sound roads has been adequate over theengineering and financial last few years. Budget alloca-practices and provide funds tions have increased by 10% annuallyand other resources as needed. (grants to District Counc"v.w s for

maintenance of district roadSincreased by 50% in the 1<978/79budget), while allocations to publicworks ir general have been stag-nant or decreased. However,budget for 1980/81 does neither takefull account of inflation nor of rapidroad development and maintenance,particularly periodic maintenance,.is deteriorating.

Ai aEX P6 a7e 4 o f Z;

Credit 758-MAI hi a rt

Section of CreditAgreement Comrtmnent Action

Section 3.04 (b) Report to Association quarterly Has not been complied with bt. t

(revised to semi-annually) on preparation of reports undenwaa^progress of project includingmonitoring indices.

Section 4.02 Construct Kasungu-Jenda road Design of both roads co;i-.

and improve sections of Zomba- with covenant. Const tuct on r.

Lilongwe road to standards in Kasungu-Jenda road @%'oSchedule 4 of Agreement. complies. Impyovement-- c ,

Lilongwe road (85% omp.l

Section 4.03 Employ contractors for Has been complied withi.vconstruction and improvementswhose qualifications and termsof employment are satisfactoryto the Association.

Section 4.04 Take measures to regulate Weighbridges operated ir thareedimensions and axle loads of strategic locations. Exisrincvehicles in conformity with legislation being enforcead a-m-,

structural and geometric ments to increase perialtis '

standards of road network. preparation.

Section 4.05 Maintain suitable traffic data is being complied with on acollection system. continuing basis.

Section 4.06 a) Continue to maintain main See under Action for Sectios :>and secondary roads in of Second Highway Projectc.accordance with sound engi-neering practices and providenecessary funds and resourcesrequired for that purpose.b) From time to time exchange Is being complied with on a

views with Association on continuing basis.programs and budget for main-tenance of other classifiedroads.

Section 4.07 Consult and exchange views with Has been complied witb.Association on results offeasibility study of Jenda-Mzuzu corridor prior to start-ing detailed engineering.

December 1980

- 42 -ANNEX 2Page 1 of 3

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Training of Subprofessional Staff of the Ministry of Works and Supplies

1. The Ministry of Works and Supplies (MWS) currently conducts avariety of training courses for technicians and other subprofessionals atits training center at Zomba. These courses are directed at foremen andsupervisors who deal with buildings, roads and equipment; short coursesare also offered to drivers and upgrading courses to mechanics and theirsupervisors. Although MWS is not responsible for water supply services,during the last few years the center has offered a course for water worksforemen and a short upgrading course for their supervisors. In the future,the center may also offer courses for draftsmen as well as architecturaland landscape assistants. The 1980/81 budget includes MK320,000 for thetraining center's operating expenses.

2. The training center has two main training methods:

(a) Residential Instruction: Trainees reside at the centerfor the duration of their course and are taught theoryand practical work. After successfully completing thecourse, trainees are presented with certificates and,re posted to various department of the Ministryaccording to their specialization.

(b) In-Service Instruction: After completing the residentialcourse, trainees are sent to the field for practicaltraining under the guidance of a senior member of theMinistry.

3. The following personnel took residential courses at the trainingcenter in 1978 and 1979.

Basic Courses 1978 1979

Building Foremen 17 20Mechanical Foremen 19 21Road Foremen 9 16Electrical Foremen 9 -

54 57

- 43 -ANNEX 2Page 2 of 3

Upgrading Courses

Building Supervisors 8 4Mechanical Apprentices 18 -Refrigeration Apprentices 23 21Bricklayers and Carpenters 8 5Mechanical Supervisors 5 8Forestry Supervisors 4 4Welders 5 -Plant Operators 47 48Drivers 66 79Electrical Foremen 9 -Water Project Staff - 32Water Plant Operators - 14

193 215

Total 247 272

4. The 15 instructors of the training center are former subprofessionalstaff who have had a substantial amount of practical experience in thevarious fields concerned and have been given additional training overseas.The local instructors are also assisted by a team of volunteers under theJapanese Overseas Corporation Volunteers Scheme who teach specializedcourses for mechanics. In addition, equipment manufacturers sponsor coursesto train operators and foremen in the use of graders, dozers, loaders, etc.

5. Most courses can accommodate a maximum of 15 trainees, althoughsome courses for electrical foremen, mechanical apprentices and upgradingcourses in various trades are being included without the provision ofextra facilities.

6. The existing training center in Zomba has adequate instructors,training equipment and training aids for MWS's current staffing requirements,but is not expected to meet the future training needs of the various depart-ments, including that for roads. As more main and secondary roads areimproved and bituminized and the District Roads Improvement and MaintenanceProgram is extended throughout the country, road maintenance requirements, andtherefore Roads Department staffing needs, will increase appreciably. Toprovide an expanded staff, subprofessional personnel will have to be trainedfor higher positions, while more lower-level staff would be trained in high-ways operations. The increased need for staff is also exacerbated by Govern-ment s low retirement age -- 50 years.

7. In preparation for the expanded training effort, the trainingcenter building, its equipment and instructors will also need expansion.However, since the existing training center in Zomba is located in the midstof a built-up area, any substantial expansion at the present location is

- 44 -ANNEX 2Page 3 of 3

impossible. It has therefore been proposed to move the center from Zombato Lilongwe where the Ministry's main activities are now concentrated (allministries were previously located in Zomba) and where, because of itsgreater convenience, the Ministry's professional staff will be able togive supplementary lectures to the trainees. The new training center inLilongwe would be built on a phased basis, and would comprise a classroomblock, student dormitory facilities, and staff housing. As presently con-ceived by MWS, total facilities required for the new center and associatedcosts, are as follows:

Estimated CostNo. Type in MK

6 Classroom 160,0002 Dormitory 110,0001 Kitchen 30,0001 Dining room 41,0001 Common room 30,0001 Library 56,00010 Offices 80,0002 Workshop 61,00010 Staff houses 500,0002 Drawing office 54,0005 Garage 40,000

1,162,000

Site Works 118,000Furniture, appliances,utensils, workshop andoffice equipment andtraining aids 200,000

Total 1,480,000

The first phase of this development, outlined in Attachment 1 hereto (i.e.,facilities to accommodate 25 trainees in road construction and maintenance),would be financed under the project. This would allow the training of about50 road personnel annually, more than twice the current number.

December 1980

- 45 -ANNEX 2Attachment 1

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Lilongue Training Center: Facilities to be provided under theproject:

Estimated CostNo. Type in MK

2 Classroom 54,0001 Dormitory 55,0001 Kitchen 30,0001 Dining room 25,0001 Common room 15,0001 Library 19,00040 Offices 40,0001 Workshop 20,00030 Staff houses 100,000

358,000

Site Works 42,000Furniture, appliances,utensils, workshop andoffice equipment andtraining aids 100,000

Total 500,000

December 1980

- 46 -ANNEX 3

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Road Design Standards Adopted by the MS

1. Speed mph

TerrainType of Road Normal Nountainous

Desirable Mininum Desirable Minimum

Class I 60 50 50 40Class II 60 50 40 30Class III Each project treated individually

2. Sight Distance, Minimum Radius, Maximum GradientSpeed (mph)

30 40 50 60

Stopping visibility (ft) 200 275 350 475Passing visibility (ft) 800 1,300 1,700 2,000Minimm radius (ft) 239 477 716 1,146Maximm gradient normal 6% 5.0% 4.5% 4.0%Maximum gradient mountainous 9% 7.0% 6.5% 6.0%

3. Cross Section

Type of Road Roadway Width (ft)Carriageway plus shoulders

Class I 22 + 2x5 - 32Class II 18 + 2x7 = 32Class III 16 + 2x4 = 24

h. Pavement Structure Design TRRL Road Note 31

5. Construction Materials

Layer Description Specifications

Subgrade Top 6 in depth (cut) Pi - 30, 95% mod.Top 12 in depth (fill) AASHO - Compaction

Subbase Natural gravel or 10 < Pi-< 15crushed stone CBR 25% at 95%

mod. AASHO compactionafter 48 hrs. soaking

Natural gravel Pi<.6 LL -30CBR 85% at 98% modAASHO compaction after48 hours soaking

Base Crushed stone Aggregate crushingvalue< 30

Stabilised gravel PI < 15 LL < 40Unconfined compressivestrength 250 lbs/sq in

Surfacing material depends on traffic volume and general conditions.

6. Bridges

Bridge width = Carriageway widthFootpath = 2 x 2 feetLoading: according to BS 153 with 0.8 HA

Source: Ministry of Works and -5pplies, Roads Department, February 1980

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

DRIMP II: Program for Procurement of Facilities and Equipment 1981-831/

(Costs in HK '000)

1981 _ _ _ _ _ _ _ _ 1982 __ _ _ _1983 __ _ _ _ _ _ _ _ _ _ TOTAL _ _ _ _ _

Cost of Cost of Cost of Cost of Cost of Coto Cost of COaT fHousing Maintenance Total Housing Maintenance Total Housing Maintenance Total Housing Maintenance Total

District and Depots Equipment Cost and Depots Equipment Cost and Depots Equipment Cost and Depots Equipmnt Cost

Lilongwe 104.1 82.6 186.7 104.1 82.6 186.7

Chikwawa 146.9 59.7 206.6 146.9 59.7 206.6

Karonga 165.3 59.7 225.0 165.3 59.7 225.0

Mangochi 197.0 60.4 257.4 197.0 60.4 257.4

Chitipa 202.3 59.7 262.0 202.3 59.7 262.0

Dedza 196.6 61.2 257.8 196.6 61.2 257.8

Dowa 148.1 59.7 207.8 148.1 59.7 207.8

Machinga 158.5 59.7 218.2 158.5 59.7 218.2

Thyolo 164.7 59.7 224.4 164.7 59.7 224-4

Ntcheu 132.6 59.7 192.3 132.6 59.7 192.6

416.3 202.0 618.3 595.9 181.3 777.2 603.9 238.8 842.7 1,616.1 622.1 ,238.5

I/ Program for 1982 and 1983 will be revieved with Association not later than four months before beginning of each fiscal year. b c

Source: Scott Wilson Kirkpatrick and Partners, December 1980 X0 4

8

- 48 - ANNEX 4Page 2 of 10

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

DRIMP II: Facilities to be Provided under theProject for the ten District Maintenance Units

(a) Summary

Number Type Costs in MK '000

11 Tractors 140,80011 Towed Graders 77,00010 Four-Wheel Drive Vehicles 130,00010 Pick-up Vehicles 141,80010 Tractor Trailers 50,00027 Motorcycles 21,49510 Pipe Holds 6,00010 Workshop Equipment 20,00010 Vehicle Spares 35,000

Subtotal 622,095

Depots and Housing

10 Depots (Workshops, Stores,Offices) 639,729

16 Sub-Depots 334,05310 Supervisor's Houses 192,90312 Foreman's Houses 108,67210 Operators'/Mechanics' Houses 223,962

Subtotal 1,499,119

10 Fencing and Paving of Yards 55,00010 Office Equipment 37,70010 Hand Tools 24,555

Subtotal 117,285

TOTAL 2,238,499

-49 - ANNEX 4Page 3 of 10

(b) Lilongwe District

Depots and Housing

Costs in MKNumber Type-

1 Depots (Workshops, Stores, Offices) 11,5005 Sub-depots 39,3001 Supervisor's Houses 13,3002 Foreman's Houses 11,4001 Operators'/Mechanics' Houses 15,500

Subtotal 91,000

1 Fencing and paving of yards 5,5001 Office Equipment 3,7701 Hand Tools 3,878

Subtotal 13,148

Equipment

2 Tractors 25,6002 Towed Graders 14,0001 Four-wheel Drive Vehicles 13,0001 Pick-up Vehicle 14,1801 Tractor Trailer 5,0006 Motorcycles 4,7101 Pipe Molds 6001 Workshop Equipment 2,0001 Vehicle Spares 3,500

Subtotal 82,590

Total 186,738

(c) Chikwawa District

Depots and Housing

1 Depots (Workshops, Stores, Offices) 54,6561 Sub-depots 29,2531 Supervisor's Houses 18,9601 Foreman's Houses 8,6601 Operators'/Mechanics' Iouses 24,098

Subtotal 135,627

- 50 -ANNEX 4Page 4 of 10

Number Type Costs in MK

1 Fencing and paving of yards 5,5001 Office Equipment 3,7701 Hand Tools 1,968

Subtotal 11,238

Equipment

1 Tractors 12,8001 Towed Graders 7,0001 Four-wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5701. Pipe Molds 6001 Workshop Equipment 2,0001 Vehicle Spares 3,500

Subtotal 59,650

Total 206,515

(d) For Karonga District

Depots and Housing

1 Depots (Workshops, Stores, Offices) 86,5731 Sub-depots 20,0001 Supervisor's Houses 21,6431 Foreman's Houses 8,6121 Operators'/Mechanics' Houses 18,164

Subtotal 154,992

1 Fencing and paving of yards 5,5001 Office Equipment 3,770

--1 Hand Tools 1,025

Subtotal 10,295

Equipment

1 Tractors 12,8001 Towed Graders 7,0001 Four-wheel Drive Vehicles 13,000

- 51 - ANNEX 4

Page 5 of 10

Number Type Costs in MK '000

1 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5701 Pipe Molds 6001 Workshop Equipment 2,0001 Vehicle Spares 3,500

Subtotal 59,600

TOTAL 224,937

(e) For Mangochi District

Depots and Housing

Number Type Costs in MK ' 000

1 Depots (Workshops, Stores,Offices) 71,000

2 Sub-depots 56,0001 Supervisor's Houses 19,0001 Foreman's Houses 10,0001 Operators'/Mechanics' Houses 28,000

Subtotal 184,000

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 3,372

Subtotal 12,642

Equipment

Number Type Costs in MK '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0003 Motorcycles 2,3551 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 60,435

TOTAL 257,077

- 52 - ANNEX 4Page 6 of 10

(f) For Chitipa District

Depots and Housing

Number Type Costs in MK '0000

1 Depots (Workshops, Stores,Offices) 93,000

1 Sub-depots 33,0001 Supervisor's Houses 22,5001 Foreman's Houses 12,0001 Operators'/Mechanics Houses 30,000

Subtotal 190,500

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 2,442

Subtotal 11,712

Equipment

Number Type Costs in MK '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5701 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 59,650

TOTAL 261,862

(g) For Dedza District

Depots and Housing

Number Type Costs in MK '000

1 Depots (Workshops, Stores,Offices) 63,000

3 Sub-depots 72,0001 Supervisor's Houses 19,5001 Foremen's Houses 9,5001 Operators'/Mechanics' Houses 20,000

Subtotal 184,000

- 53 - ANNEX 4Page 7 of 10

Number Type Costs in MK '000

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 3,162

Subtotal 12,432

Equipment

Number Type Costs in MK '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractors Trailers 5,0004 Motorcycles 3,1401 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 61,220

TOTAL 257,652

(h) For Dowa District

Depots and Housing

Number Type Costs in MK '000

1 Depots (Workshops, Stores,Offices) 63,000

1 Sub-depots 24,5001 Supervisor's Houses 19,5001 Foreman's Houses 9,5001 Operators'/Mechanics' Houses 20,000

Subtotal 136,500

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 2,378

Subtotal 11,648

- 54 - ANNEX 4eage 8 of Io

Number Type Costs in MK '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5701 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 59,650

TOTAL 207,798

(i) For Machinga District

Depots and Housing

Number Type Costs in MK '000

1 Depots (Workshops, Stores,Offices) 63,000

1 Sub-depots 30,0001 Supervisor's Houses 19,0001 Foreman's Houses 9,0001 Operators'/Mechanics' Houses 26,000

Subtotal 147,000

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 2,214

Subtotal 11,484

Equipment

Number Type Costs in MK '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5901 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 59,670

TOTAL 218,134

- 55 - ANNEX 4Page 9 o-f

(j) For Thyolo District

Depots and HousIng

Number Type Costs in MK '000

1 Depots (Workshops, Stores,Offices) 71,000

1 Sub-depots 30,0001 Supervisor's Houses 20,0001 Foreman's Houses 11,0001 Operators'/Mechanics' Houses 22,000

Subtotal 154,000

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 1,476

Subtotal 10,746

Equipment

Number Type Costs in MK '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5901 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 59,670

TOTAL 224,396

(k) For Ntcheu District

Number Type Costs in MK '000

1 Depots (Workshops, Stores,Offices) 63,000

Nil Sub-depots -1 Supervisor's Houses 19,5002 Foreman's Houses 19,0001 Operators'/Mechanics' Houses 20,000

Subtotal 121,500

ANNEX 4- 56 - Page 10 of 10

Number Type Costs in MK '000

1 Fencing and Paving of Yards 5,5001 Office Equipment (sets) 3,7701 Hand Tools (sets) 2,670

Subtotal 10,940

Equipment

Number Type Costs in 'NI '000

1 Tractors 12,8001 Towed Graders 7,0001 Four-Wheel Drive Vehicles 13,0001 Pick-up Vehicles 14,1801 Tractor Trailers 5,0002 Motorcycles 1,5701 Pipe Molds 6001 Workshop Equipment (sets) 2,0001 Vehicle Spares (sets) 3,500

Subtotal 59,650

TOTAL 193,090

_ 57 _KANNEX 5- 57 - Page 1 of 8

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

DRIMP II: Program for District Roads Improvement 1981-19841/

1981 19821/ 19831/ 19841' TOTAL

L Improve- Improve- Improve- Improve- Improve-District Km ment Costs ment Costs ment Costs ment Costs ment Costs

Lilongwe 467 174.5 174.5

Chikwawa 190 128.8 128.8

Karonga 128 218.0 218.0

Mangochi 279 295.1 295.1

Chitipa 270 369.5 369.5

Dedza 326 257.8 257.8

Dowa 291 151.9 151.9

Machinga 237 212.9 212.9

Thyolo 180 146.6 146.6

Ntcheu 276 107.1 107.1

Total 2,644 521.3 664.6 622.6 253.7 2,062.2

1/ Program for 1982, 1983 and 1984 will be reviewed with Association notlater than four months before beginning of each fiscal year.

Source: Scott Wilson Kirkpatrick and Partners, December 1980

December 1980

DR1MP 11: Roads to beImprved (Costsin eK)

(a) I

Equipment Total 1/ Present Discounted Net PresentRoad Length Improve- Supervision Depot & Housing Economic .EconomiL Value of Traffic Value at 12%No. Km ment Costs Costs Amortization Costs Cost/Km Benefits Discotint Rate 2/

D20 19 16,800 6,932 1,640 25,373 1,335 3,586 1,302D21 18 20,438 8,433 2,319 31,190 1,733 15,322 12,640D22 66 14,884 6,141 3,218 24,244 367 44,662 43,346D23 17 3,861 1,593 1,020 6,473 381 2,282 952D24 20 4,983 2,019 1,043 7,955 398 7,498 6,151D25 26 2,029 837 849 3,715 143 3,912 2,820D26 28 4,811 1,985 1,426 8,223 294 2,282 1,039D27 13 1,717 709 520 2,946 227 5,868 4,692D28 22 3,973 1,639 874 6,486 295 6,846 5,602D29 17 9,098 3,754 1,414 14,267 839 20,212 18,424D30 3 145 60 86 291 97 2,608 1,562D31 24 6,700 2,765 1,260 10,724 447 21,190 19,794D32 4 1,782 735 376 2,894 724 9,780 8,107D43 9 2,111 871 434 3,417 380 2,934 1,605D46 53 4,106 1,694 1,653 7,453 141 3,260 2,170D55 3 341 141 102 584 195 3,912 2,768D284 23 819 338 397 1,553 68 1,630 613 mD285 2 1,551 640 233 2,424 1,212 7,172 5,011 3UD/A 35 34,499 14,235 4,533 53,268 1,522 2,608 137UD/B 5 3,210 1,324 575 5,109 1,022 8,476 6,505UD/C 9 3,694 1,524 863 6,081 676 978UD/D 17 7,086 2,924 1,168 P1,178 658 2,934 1,327UD/E 11 6,103 2,518 1,186 9,807 892 0 309 3/LD/F 23 19,844 8,188 3,064 31,095 1,352 2,804 503

467 174,495 72,000 30,253 276,749 593

1>t

o xD01/ Economic cost excludes maintenance cost; however calculation of NPV does take the PDV of

increased maintenance costs (949 K/km) into account. X2/ Figures without superscripts denote NPV based on savings in Vehicle ODeratina Costs only , all are per km.3/ Including induced agricultural benefits.

(b) In Chikwawa District

Equipment Total 1/ Present Discounted Net Present

Road Length Improve- Supervision Depot & Housing Economic Economic Value of Traffic Value at 12% 2

No. KKm ment Costs Costs Amortization Costs Cost/Km Benefits _ Discount Rate -2

D134 77 59,076 27,514 7,958 94,548 1,228 3,423 1,246

D135 18 10,622 4,947 1,423 16,993 944 2,608 715

D136 15 7,705 3,589 1,090 12,384 826 1,620 3,975 3/

D139 4.5 199 92 130 421 94 978 -65 4/

D14ON 15 1,454 677 395 2,527 168 3,260 2,143

D140S 21 4,788 2,230 1,165 8,183 390 3,390 2,051

D142 22 31,532 13,193 3,569 45,089 2,147 650 284 3/

D143 2.5 834 388 233 1,455 582 330 209 3/

TiD /A 10 11,547 5,378 1,696 18,620 1,862 980 (-231)5/

UD/B 5 1,065 496 372 1,932 386 980 2125

190 128,82 2 58,504 18,031 202,152 1,064

(c) In Karonga District

Dl 16 41,382 7,340 2,014 53,798 3,362 1,960 4,489 3/ °

D6 31 41,968 7,444 3,163 55,677 1,796 330 (-685) 6/

UD/A 5 10,632 1,886 687 13,991 2,798 0 6,513 37

UD/C 10 4,294 762 772 6,145 615 0 1,216 3/

UD/D 8 1,140 202 40 1,467 183 2,282 1,150

UD/K 5.5 801 142 164 1,167 212 0 . 1,359 3/

UD/M 4 7,064 t ,253 499 9,338 2,334 0- 5,327 3/

UD/N 1 2,839 504 126 3,678 3,678 0 11,333 3/

UD/P 4 10,844 1,923 633 14,200 3,550 2,930 18,441 3/

UD/T 11.5 12,976 2,302 832 17,069 1,484 5,501 3,068

UD/U 8.5 20,377 3,614 760 26,257 3,089 3,260 7,912 3/

UD/W 20 48,645 8,628 1,726 62,594 3,130 680 7,111 3/

127.5 217,961 36,000 11,416 265,377 2,081

1/ Economic cost exclude;i maintenance cost; however calculation of NPV does take the PDV of ' J

increased maintenance costs (949 K/km) into account. °

2/ Figures without superscripts denote LPV based on savings in Vehicle 0neratin2 Costs only, all are per km. X

3/ Including induced agricultural benefits.

4/ Road will be included only if agriculture benefits, currently not quantified, produces positive net

present worth.5/ High population level in area of influence of the road coupled with only slight shortfall in benefits

leads to inclusion of road in program.

6/ Quantified benefits very conservative. Road is vital to two large fice schemes.

(d) In Mangochi District

Equipment Total 1/ Present Discounted Net PresentRoad Length Improve- Supervision Depot & Housing Economic Economic Value of Traffic Value at 12,° 2%No. Km ment Costs Costs Amortization Costs Cost/Km Benefits Discount Rate -

D117 51 34,343 6,935 3,222 44,500 873 8,150 6,328D226 14 5,429 1,096 901 7,426 530 3,260 1,781D227 6 4,448 898 552 5,898 983 980 5,408 3/D228 69 88,341 17,839 6,333 112,513 1,631 13,040 10,460D230 53 48,861 9,867 3,374 62,102 1,172 8,150 6,029D231 22 22,377 4,923 2,126 31,425 1,428 980 4,683 3/UD/A 21 58,736 11,861 3,674 74,271 3,537 1,630 6,164 3/UD/B 18 17,197 3,473 1,811 22,480 1,249 2,608 410S58 25 15,398 3,109 19,761 790 919560 17ij5_

279 295,130 23,247 380,376 1,363

(e) Ir. Chitipa District

D3W 29.0 15,664 2,956 2,203 20,823 718 4,173 2,506D3E 21.4 21,286 4,017 2,093 27,396 1,280 1,270 1,691 3/D4W 11.0 25,562 4,824 1,647 32,034 2,912 0 1,619 3/ sD4E 19.5 19,058 3,597 1,934 24,589 1,261 1,500 10,970 3/ 1D5 76.4 47,899 9,040 5,379 62,318 816 2,412 647UD/C 12.3 23,999 4,529 1,675 30,203 2,456 330 1,155 -3/UD/D 2.3 2,377 449 239 3,064 1,332 4,238 1,957UD/E 16.5 23,119 4,363 1,902 29,384 1,781 650 (-110)4/UD/G 11.9 23,966 4,523 1,649 30,137 2,533 330 788 3/UD/H 13.8 44,001 8,305 2,517 54,822 3,973 2,610 2,288 3/UD/J 14.1 41,100 7,757 2,431 51,289 3,638 o 5/ 163 3/UD/L 28.2 81,483 15,379 4,824 101.685 3.606 5/ 115 3/

256.4 369,514 71,643 28,493 467,744 1,824

_ _ t~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~D IM

l/ Economic cost excludes maintenance cost; however,calculation of NPV does take the PDV of o( Jincreased maintenance costs (949 K/km) into account.

2/ Figures without superscripts denote NPV based on savings in Vehicle Operating Costs only, all are per kme m

3/ Including induced agricultural benefits.4/ High popuia.¾v> level in area of influence of road coupLed with only slight shortfall in benefiLs

leads to inclu.sion of road in program.

5/ New roads to serve agricultural schemes under preparation.

*(f) In Dedza DistrictEquipmentDepot & Total 1j/ Present Discounted Net Present

Road Length Improve- Supervision Housing Economic Economic- Value of Traffic Value at 12% 2/N'o. Km ment Costs Costs Amortization Costs Cost/Km Benefits Discount Rate -

D21 12.3 17,491 6,743 2,118 26,351 24142 4,238 1,147

D45 11.2 6,916 2,666 1,227 10,809 965 0 4,916 3/D47 26.4 21,032 8,108 3,259 32,398 1,227 2,608 432D48 12.0 7,202 2,776 1,299 11,277 940 18,908 17,019D49 14.3 26,291 10,135 2,920 39,345 2,751 5,216 1,516D53 12.8 4,543 1,751 1,144 7,438 581 3,912 2,382D54 11.6 24,402 9,407 2,389 36,199 3,121 6,846 2,776D55 32.2 26,442 5,974 2,807 35,224 1,094 6,846 4,803D56 11.0 4,. 1,636 811 6,692 608 3,260 1,703D57 6.3 2,336 901 577 3,814 605 4,238 2,684D58 18.4 8,295 3,198 1,260 12,753 693 4,238 2,596D60 18.7 13,017 5,018 2,170 20,204 1,080 2,608 579 1D62 18.4 13,111 5,054 2,152 20,316 1,104 2,934 881D64 7.2 9,416 3,630 1,172 14,219 1,975 1,630 11,596 3/D66 3.4 2,577 993 410 3,980 1,171 1,960 20,170 3/D68 9.0 9,024 3,479 1,254 13,757 1,529 4,238 1,760D69 15.8 8,405 3,240 1,628 13,273 840 650 9,241 3/D70 2.6 1,662 641 289 2,592 997 330 11,964 3/D71 10.4 8,311 3,204 1,286 12,800 1,231 330 7,670 3/D72 3.2 861 332 202 1,396 436 14,996 13,611D73 4.9 2,958 1,140 538 4,636 946 3,216 1,321D76 5.4 1,968 759 288 3,015 558 3,912 2,405D77 4.0 1,824 703 389 2,916 729 1,630 (-48)3/D78 16.8 10,465 4,034 1,539 16,037 955 4,238 2,334D79 6.4 2,980 1,149 503 4,631 724 2,282 609 OQP

DBO 8.3 7,709 2,972 1,115 11,796 1,421 330 8,430 3/ x

D81 4.3 1,720 663 319 2,702 628 6,194 4,617 oUD/A 10.6 6,350 2,448 1,147 9,944 938 2,282 395 h

UD/B 5.0 4,023 1,551 620 6,194 1,239 0 1,882 3/ xUD/C 3.2 2,272 876 373 3,521 1,100 0 1,321 3/

326.1 257,849 95,178 37,205 390,229 1,129

1/ Economic cost excludes maintenance cost; however, calculation of NPV does take the PDV ofincreased maintenance costs (949 K/km) into ir okunrt.

2/ Figures without superscripts denote NPV basf-d Ol- savings in Vehicle Operating Costs only ,all are per km.3/ Including induced agricultural benefits.

(g) I_ Dowa District

Equipment Total Present Discounted Net PresentRoad Length Improve- Supervision Depot & hlousing Economic Economic Value of Traffic VaJue at 12%No. Km ment costs Costs Amor tzation _ Costs Cost/Km __ Benefits Discount Rate -

D25 7.5 5,394 2,343 903 8,640 1,152 3,912 1,811D82 23.5 5,733 2,490 858 9,081 386 1,630 295

D83-282 28.5 6,547 2,844 1,896 11,287 396 1,080 22,535 3/D85 16.2 10,321 4,484 1,901 16,706 1,031 2,282 302D89 8.2 8,225 4,363 1,381 15,786 1,925 980 13,306 3/D90 24.0 11,912 5,175 2,486 19,572 816 0 21,985 3D91 10.4 8,824 3,833 1,300 13,957 1,342 2,608 317D92 6.0 2,657 1,154 603 4,414- 736 0 48,665 3/D93 3.3 832 405 242 1,578 478 14,344 12,917D94 8.7 3,879 2,057 957 7,751 891 650 1,470 3/D95 7.5 2,289 1,214 714 4,723 63 2,282 1,270D1C4 10.4 4,657 2.023 1,050 7;730 743 1,6^ /9688 3!D107 8.8 5,654 2,456 1,037 9,148 1,040 330 5,661 3/ .Dlll 19.8 12,582 5,466 2,321 20,369 1,029 2,608 630D112 23.3 7,520 3,267 1,930 12?717 546 3,586 2;09ID113 16.4 16,690 7,250 2,368 26,308 1,604 650 28,497 3/D290 12.1 2,078 903 578 3,559 294 11,736 10,493UD/A 31.1 21,254 9,233 3,781 34,268 1,102 0 6,499 3/UD/B 5.2 4,016 1,745 671 6,432 1,237 650 48,814 3/UD/C 2.0 756 328 153 1,237 618 6,520 4,953D87 9.6 2,868 1,246 844 4,958 517 1,300 -13,134 3UD/D 8.8 3,963 1,722 890 6,575 747 1,630 35,084 3/

291.3 151,933 66,000 28,864 246,796 847

1/ Economic cost excludes maintenance cost; however, calculation of NPV does take the PDV of 1 increased ulaintenance costs (949 K/km) into account. a,

2/ Figures without superscripts denote NPV based on savings in Vehicle Operating Costs only, all are per km. 03/ Including induced agricultural benefits.

(h) In MachLn_g DistrictEquipment Total 1/ Present Discounted Net Present

Road Length Improve- Supervision Depot & Housing Economic Economfe Value of Traffic Value at 12% 2/No. Km ment Costs. Costs Amortisation Costs Cost/Km Benefits Discount Rate -

D217 22.4 35,684 10,060 3,277 49,026 2,188 1,630 13,053 3/D218 10.6 1,688 475 504 2,667 252 6,846 5,645D219 1.5 618 173 122 913 609 1,630 72D220 7.9 3,202 902 651 4,755 602 3,260 1,709D222 5.4 2,511 708 477 3,696 684 980 141,827 3/D223 35.2 33,267 9,377 3,958 46,602 1,324 2,282 9D224 15.9 9,325 2,628 1,444 13,397 843 2,608 816D225 10.4 3,590 1,013 637 5,240 504 1,956 503D226 16.2 5,903 1,663 1,114 8,680 536 2,608 1,123U230 18.9 11,514 3,245 1,356 16,115 853 980 3,828 3/D264 8.5 4,452 1,255 635 6,342 746 4,564 2,869UD/A 28.4 44,937 12,667 4,046 61,650 2,171 980 36,220 3/UD/B 22.4 33,111 9,336 3,144 45,591 2,035 0 114,836 T/UD/C 23.8 18,745 5,284 2,533 26,562 1,116 2,315 250UD/D 9.4 4,308 1,214 7_7_ 5 6,297 670 650 16,951 3/

236.9 212,860 60,000 24,673 297,533 1,256

(i) In Thyolo District

D41 7.4 3,532 1,156 591 5,279 713 13,692 12,030D43 14.3 3,411 1,444 835 6,690 468 2,282 865D45 10.5 3,872 1,268 676 5,815 554 2,608 1,105D46 9.8 6,763 2,214 976 9,953 1,016 6,194 4,229D47 7.7 3,033 993 571 4,596 597 14,344 12,798D48 6.0 879 288 294 1,460 243 8,802 7,610D66 16.6 5,183 1,697 847 7,728 466 1,630 215D67 4.8 4,959 1,624 623 7,204 1,501 6,846 4,396D68 11.1 2,718 890 662 4,269 385 1,630 296L1 2.3 1,526 500 199 2,2 967 11,084 9,168UD/A 15.6 21,496 7,039 2,375 30,909 1,981 4,564 1,634UD/B 10.8 15,768 5,163 1,603 22,535 2,087 980 20,290 J/UD/D 20.5 11,757 3,850 2,035 17,642 861 1,300 227UD/E 7.5 39,076 12,795 2,881 54,753 7,300 8,476 1,4 >

UD/F 7.8 9,381 3,072 1,098 13,551 1,737 0 14,718 3/ 3UD/G 16.0 10,505 3,440 1,457 15,402 963 1,630 11,718 B2 10.8 1,730 566 547 2,844 263 11,084 9,872

179.5 146 529 5201 00 18,270 212,859 1,l.6

1/ Economic cost excludes maintenance cost; however, calculation of NPV does take the PDV ofincreased maintenance costs (949 K/km) into accotnt.

2/ Figures without superscripts denote NPV based on savings in Vehicle Operating Costs only, all are per km.3/ Including induced agricultural benefits.

Ci) In Ntcheu DistrictRoa Length Improve- Equipment Total 1/ Present Discounted Net Present

Road Length Improve- X Supervision Depot & Housing Economic Economic Value of Traffic Value at 12%

No. Km ment Costs Costs Amortization Costs Cost/Km Benefits Discount Rate

D116 57.6 15,017 8,411 3,790 27,218 473 11,736 10,314

DllS 11.9 4,293 2,404 878 7,575 637 5,216 3,630

D119 22.7 11,161 6,811 2,652 21,623 953 1,630 37,528 3/

D123 66.6 17,187 9,626 5,000 31,813 478 8,476 7,049

D124 33.9 16,317 9,138 3,750 29,205 861 2,217 407

Di25 11.4 3,826 2,143 1,012 6,9f:0 612 1,630 69

L-26 20.3 8,704 4,875 2,178 15,757 776 1,956 231

D;27 5.6 2,125 1,190 560 3,875 692 2,934 1,293

D286 4.8 3,869 2,167 731 6,767 1,410 0 30,041 3/

UD/A 8.3 7,620 4,268 1,375 13,262 1,598 2,608 61

UD3/ 16.7 8,939 5,034 2,048 16,071 962 1,630 28,619 3/

UD/C 15.9 7,024 3,934 1,779 12,737 801 1,630 16,030 3/

275.7 107,132 60,001 25,753 192,886 700

0'

1/ Economic cost excludes maintenance cost; however, calculation of NPV does take the PDV ofincreased maintenance costs (949 K/km) into account.

2/ Figures without superscripts denote NPV based on savings in Vehi.cle Operating Costs only, all aye per km.3/ Including induced agricultural benefits.

Source: Scott Wilson Kirkpatrick and Partners, December 1980

m mtD (D

oOx

Go

L-n0

- 65 -ANNEX 6

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

DRIMP II: Government Financing and Accounting ofDRIMP Maintenance Expenditure

The procedure to be used for making available funds to District Councilsfor maintenance, for keeping the necessary records and for preparingclaims for reimbursement will be as follows:

(a) As soon as possible after the beginning of the fiscalyear and in any case no later than 30th April, theGovernment will pay to each District Council 75% of thefull amount to be made available in that fiscal year(including the funds required to prefinance expenditureseligible for reimbursement out of the proceeds of theCredit (see Attachment)) for the maintenance of roadsand no later than 30th September will pay the balance.

(b) Each District Council will maintain full records ofall road maintenance expenditures and will submitrecords of such expenditures, including those financedout of the District Council's own resources, with fullsupporting documents to the Ministry of Works andSupplies at the end of each month.

(c) At the end of each quarter the Ministry of Works andSupplies will prepare a claim for reimbursement basedon the records submitted by the District Council. Thisclaim for reimbursement will show the full amount spentby the District Council, the agreed input by the DistrictCouncil and the amount eligible for reimbursement fromIDA calculated in accordance with the Credit Agreement,and will be accompanied by a certificate from the MOWSwhich will state that the claim is correct and that aphysical inspection has shown the maintenance work tohave been carried out.

(d) The MOWS will retain the records of expenditure andcertificates referred to in (b) and (c) above andthese documents will be subject to inspection by theInternational Development Association.

December 1980

?4A1AWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

DRIlIP II: Program for District Roads Maintenance 1981.831-1(costs in MK '000)

1980 Incre- 1981 198211 198311 Tot1 1981-83Total Maintenance mental Maint nance Allocations Maint Lance AVlocation. _ MaiLn enance Allocations hainto.nane Alloeations

Mot te- 00 Kainte- 2/~~~~~~~~~~~~~~~~~~~~ Govern- Eligibla±2/ Gover- Eigiblei,einte- Expenditure Minte- Govern Eligibl,/ Goern Eligible-rL nence ltrict overn nonce District aent for Credit District mant for Credit District went for Credit Diattict cent for Credit Grand

Distr ict E Coste Councils *ent Costs Councils * rant, n Financing Councils Grants Financing Councils Grants Financing Counctile Grnta Financing Total

Kesungu 422 86.5 4.0 77.0 5.5 4.0 78.4 4.1 4.0 79.7 2.8 4.0 81.1 1.4 12.0 239.2 8.3 259.5

Mzimba 382 78.3 3.5 - 74.8 3.5 18.7 56.1 3.5 37.4 37.4 3.5 56.1 18.7 10.5 112.2 112.2 234.9

Salime 392 80.4 1.2 - 79.2 1.2 19.8 59.4 1.2 39.6 39.6 1.2 59.4 19.8 3.6 118.8 118.8 241.2

Mulanje 279 56.9 1.5 - 55.4 1.5 13.8 41.6 1.5 27.7 27.7 1.5 41.5 13.9 4.5 83.0 83.2 170.7

Lilongwe 473 97.0 4.0 - 93.0 4.0 23.2 69.8 4.0 46.5 46.5 8.0 69.7 116.3 194.0

Kearonga 128 26.2 0.5 _ 25.7 0.5 6.4 19.3 0.5 12.8 12.9 1.0 19.2 32.2 52.4

Chikw.sa 240 49.2 2.3 - 46.9 2.3 11.7 35.2 2.3 23.4 23.5 4.6 35.1 58.7 98.4

Mangochi 460 94.3 4.7 - 89.6 4.7 22.4 67.2 4.7 22.4 67.2 94.3

Chitip- 349 71.5 1.5 - 70.0 1.5 17.5 52.5 1.5 17.5 52.5 71.5

Dedza 235 48.2 2.2 - 46.0 2.2 11.5 34.5 2.2 11.7 34.5 48.2

Dedza, coot. 235 48.2 2.2 - 46.0

Dowv 291 59.7 2.7 _ 57.0

Machinge 237 48.6 2.1 - 46.5

Thyolo 180 36.9 1.0 - 35.9

Ntcbhu 276 56.6 2.9 _ 53.7

4,579 1,715.1 63.5 77.0 1,574.6 10.2 130.7 161.2 17.0 225.7 231.8 25.4 367.7 290.9 52.6 728.6 683.9 1,465.1

1/ Program for 1982 end 1983 will be r.vieo,d with Association not later than four monthe before beginning of each fiscal year.

2/ Eligibility amounts to 75% of incrmental costs for first year of maintenance, 502 for second year and 252 for third year.

Source, Ministry of Works and Supplies, December 1980, and mission estimates.

- 67 -ANNEX 7Page 1 of 3

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Technical Assistance for Transport Planning

Outline of Terms of Reference

A. Objective

1. Technical assistance to the Economic Planning Division (EPD) ofthe Office of the President and Cabinet for transport planning will beprovided by a Consultant over a period of about three years; he will beresponsible to EPD's Chief Economist. The general objective is to enable theGovernment to improve and expand its transport planning capabilities through:

(a) effective organization and operation of a transportplanning unit (TPU) in the EPD;

(b) preparation of guidelines for transport planningactivities, including feasibility studies; and

(c) provision of on-the-job training of local professionalstaff to ensure that, by the end of the three-year period,the TPU will be capable of carrying on its functionwithout further technical assistance.

B. Scope of Service

2. The Consultant will assist EPD in the following general areas:

(a) planning and organization of the transport modes;

(b) transport policies, particularly those relating toeffective coordination of transport modes;

(c) formulation of a detailed program of transport invest-ments; and

(d) recruiting and training of Government personnel fortransport planning and coordination.

C. Activities

3. Initial Activities: During an initial period of about 6 months theConsultant shall:

- 68 -ANNEX 7Page 2 of 3

(a) review existing study reports and investment plans;

(b) advise on the coordination of ongoing transportationstudies;

(c) review available transportation data and identify majorinformation deficiencies; and

(d) establish a plan of action for the TPU for 1982-84;identify local staff requirements; assist in therecruitment of professional personnel.

4. Following these initial activities, the Consultant will undertakethe following:

Review of Sectoral Economics and Multimodal Planning

(a) the review, compilation and updating of data on trafficflow and generating sources and the preparation of trafficforecasts;

(b) the determination of financial and economic operatingcosts for the several modes of transport under variousoperating conditions;

(c) the analysis of economic benefits to be derived fromrecommended transport programs and the determination ofeconomic priorities of major programs;

(d) the review and analysis of current and proposed Governmentlaws, regulations and procedures relating to transportpricing, entry and route permits, determining to whatextent these are effectively implemented; analyzing theeconomic and social objectives of these regulations andtheir effectiveness;

(e) the determination and analysis of total distribution costsfor major commodities by each of the various modes fordomestic and international traffic, examining the trade-offbetween service, time and cost and the effect that userchoices for various transport services have on the finalcost of the commodity to the consumer;

(f) the review and analysis of the present structure and levelof user charges in the various transport modes and therelationship between charges and economic costs; and

(g) the formulation of criteria to evaluate and select trans-port investments and the recommendation of proceduresfor reviewing and updating transport investment programs,determining their economic feasibility and priority, takingbudgetary constraints into account.

- 69 -ANNEX 7Page 3 of 3

5. Review of Sectoral Statistics and Information Systems

(a) the revision and evaluation of existing transport data,identifying areas where additional and more reliable dataare required; and

(b) the type of data to be collected, the format for presentingthe data for analysis and the methods of storage, as well asthe preparation of forms for the collection of data and themethods of collection, all at the lowest cost sufficient tomeet planning requirements.

6. Modal Reviews and Evaluation: Regarding the various transportmodes, such as railways, highways, ports and shipping, airports and civilaviation, the Consultant will:

(a) review and evaluate existing infrastructure and transportcapacity, identifying problem areas and making recommendationsfor improvements, in order that services adequately meetingconsumer demand can be provided at reasonable prices;

(b) review traffic data collecting systems, traffic countingprograms, and origin and destination surveys, includinginternational and domestic traffic;

(c) analyze and evaluate transport costs (financial and economic)and tariffs of the several modes and the financial situationof the modes, and recommend policies and systems of tariffsconsistent with economic development;

(d) assess the policies and regulations governing the various modes,determining the extent to which these policies and regulationsare effective in furthering economic development; and

(e) formulate criteria to evaluate investments in the variousmodes and establish procedures for reviewing and updatinginvestment programs and determining their feasibility andpriority.

7. Counterpart Training: Through his day-to-day assistance andadvisory services, the Consultant shall train the staff of the TPU in theirrespective disciplines. Also, the Consultant shall assist the TPU inselecting professional personnel, in preparing their job descriptions andadvising on training needs.

December 1980

- 70 -ANNEX 8Page 1 of 7

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Terms of Reference for the Maintenance Study

I. OBJECTIVES

II. SCOPE OF CONSULTING SERVICES

A. GeneralB. Review of the Present SituationC. Road Maintenance Program

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

IV. TIME SCHEDULE FOR CONSULTING SERVICES AND REPORTS

- 71 -AN-NEX 8Page 2 of 7

I. OBJECTIVES

The purpose of the study is to (i) provide the Ministry of Worksand Supplies (MWS) of the Government of Malawi with a 5-year comprehensiveroad maintenance program for the highway system of the country includingrecommendations for urgent action as necessary, particularly in the procure-ment of additional maintenance equipment, and (ii) make recommendationsfor the improvement of the highway maintenance organizations and for advisoryservices, if needed, to cope with the implementation of the recommendedmaintenance program.

II. SCOPE OF CONSULTING SERVICES

A. General

The Consultants shall carry out all engineering, organizational,economic and financial studies required to achieve the above objectives.In the execution of their assignment, the Consultants shall work closelyand cooperate fully with MWS, which will provide the data, services andfacilities outlined in Section II hereof. The Consultants shall also coor-dinate their work with other studies and surveys being carried out by otherconsultants and agencies. The Consultants, however, shall have sole respon-sibility for the analysis and interpretation of all data established andreceived,,and for the conclusions and recommendations contained in theirreports.

The Consultants shall base the recommendations fo- fnievin theabove objectives on considerations of economic feasibility with due regardto financial and other conditions prevailing in Malawi and shall presenttheir findings and recommendations in the reports as listed in Section IVhereof. The presentation shall be sufficiently detailed to permit checkingof calculations without recourse to other documents.

B. Review of Present Situation

The Consultants shall review and evaluate the present conditionof the classified road network. To this end they shall:

(i) establish an inventory system and carry out a completeinventory of the road network to be maintained by the MWS(main and secondary roads), the District Councils (districtroads) of the country's 24 districts, and the main andsecondary roads maintained by the "urban highway authorities"in Blantyre, Zomba, Lilongwe and Mzuzu, including measurementof roughness for all main and secondary roads as well as, forpaved roads: approximate measurements of areas subject tomoderate and heavy cracking, strength parameters by deflectionmeasurements and where possible, calculation of the AASHTOmodified structural number. From this work a summary will beprepared to:

- 72 -ANNEX 8Page 3 of 7

(a) indicate the present level of traffic and of trafficserviceability by section and by season, grouping sectionsof approximately uniform maintenance characteristics;

(b) identify sections where major rehabilitation effortsare needed before normal cycles of routine and periodicmaintenance can provide a satisfactory year-round levelof serviceability taking Government's road improvementprogram as well as the ongoing District Roads Improve-ment and Maintenance Program into account;

(ii) review present maintenance operations, including assessmentsof:

(a) the volume of maintenance work carried out at present;

(b) present procedures for main work items; and

(iii) review the present maintenance organizations, including:

(a) the present division of responsibility for road main-tenance among MWS, the District Councils, and the urbanhighway authorities;

(b) the present organization, staffing, employmentpolicies, training facilities and training programsand lines of command employed in MWS, the DistrictCouncils, and the urban highway authorities;

(c) the nature, level and structure of incentives formore efficient performance at every grade;

(d) the planning, budgetary, accountancy and managementinformation systems employed for road maintenance;

(e) the employment by the MWS of contractors and suppliersfor road maintenance;

(f) the road maintenance equipment fleet of MWS's Plant andVehicle Hire Organization (PVHO), including the pre-paration of an inventory of the fleet and related spareparts stocks and the availability and utilization ofmajor items of equipment;

(g) PVHO's manpower and workshop facilities available forrepair and servicing of road maintenance equipment; and

(iv) establish an inventory of known resources suitable for roadconstruction and maintenance, including such resources dis-covered by the Consultans in the course of their work.

- 73 -ANNEX 8Page 4 of 7

C. RLad Maintenance Program

- the basis of the analysis of findings of Section B and otherconsidera:ions described in this section, the Consultants shall draw up aroad rehabilitation and maintenance program to be carried out by MWS, theDistri.it Counciis and the urban highway authorities over the period 1963through 1987. The program, which shall differentiate between rehabiLitationworks, routine and periodic maintenance works, shall be based on technical andeconomic criteria and shall take into account Government's, the DistrictCouncils' and the urban highway authorities' plans for the improvement andexpansion of the road system, as well as growth of traffic during the programperiod. The Consultants shall also identify all investment, operational,organizational, budgetary and other raquirements necessary to implement theprogram. The Consultants' report shall include:

(a) recommendationE of the road network to be maintainedby MWS, the District Counc_Is and the urban highwayauthorities; in addition to summarized inventories,the networks, classified as agreed with MWS, shall beshown on reproducible maps, countrywide at a scale of1:1,000,000, in a form suitable as a basis for a roadmap, and for each district separately at a scale of1:250,000;

(b) recommendations on improvements in operation and pro-cedures of maintenance works that could lead to betterutilization of equipment, facilities, manpower, andmaterials, including recommendations on the most appro-priate mix of labor and equipment for the differentmaintenance operations;

(c) determination of the level of rehabilitation and main-tenance for different road types and traffic levels,incorporating an assessment of the effect of differentlevels of maintenance on vehicle operating costs aswell as subsequent maintenance and rehabilitationcosts. If the economically optimal level of programis not considered feasible due to financial, managerialor other intractable constraints, a "constrained optimum"program which is feasible and practicable will bedeveloped in accordance with the principles of incre-mental cost-benefit analysis. 1/ The economic analysisshall include an assessment of the sensitivity of the

1/ See, for example, T. Watanatada and C. Harral, "Determination of Eco-nomically Balanced Highway Expenditure Programs under Budget Constraints:A Practical Approach," paper presented to the World Conference on Trans-port Research (London, April 1980).

- 74 -ANNEX 8Page 5 of 7

main results to possible variations in the scale or effi-ciency of the program, and an assessment of the major risksin achieving the proposed program.

(d) delineation of the proposed program of maintenance andrehabilitation, including a timetable and associated resourcerequirements for those road sections requiring rehabilitation;quality and quantity standards for each major maintenanceoperation for principal classes of road types and trafficvolumes; performance standards and input coefficients; workquantities, and associated labor, equipment and materialrequirements;

(e) determination of the annual financial and economic costs ofthe recommended rehabilitation and maintenance programs. Costsof items included in the programs shall be broken down intolocal and foreign currency elements;

(f) recommendations on methods of execution of rehabilitationand periodic maintenance works (contract, force account orcombination thereof) with a view to the capacity of thelocal and resident contracting industry;

(g) determination of MWS's and the urban highway authoritiestotal needs for road maintenance equipment, spare parts andworkshop facilities in each year to carry out their partof the program and determination of MWS's purchase require-ments for the above items as the balance of total needsand of available stock;

(h) recommendations for possible improvements in road maintenanceorganization and operations, including:

(i) the organization and administration of road main-tenance at the headquarters, regional, districtand subdistrict levels;

(ii) the nature, level and structure of incentives formore efficient performance at every grade;

(iii) the location and road network assigned to each main-tenance center and the internal organization of thesecenters;

(iv) the labor, staff, equipment and materials assigned toeach center;

(v) possible greater use of more labor-intensive technologieswhere this is appropriate;

- 75 -

ANNEX 8Page 6 of 7

(vi) the organizational and operational practices of thePVHO;

(vii) present practices for repair and servicing of main-tenance equipment, location of workshops, theirequipment and staffing;

(viii) management of spare parts stocks of PVHO;

(ix) present systems for programming, budgeting and accounting,particularly the allocation of funds and the control ofexpenditures for equipment depreciation;

(x) policies for regulation of traffic and roads (axle loadsand dimensions of vehicles, road safety measures) inaccordance with established road design standards, andadministrative arrangements for their implementation;

(i) recommendations for required expansion of training facilitiesand for the training of the permanent road maintenance staff,including the staff concerned with equipment operations andmaintenance, cost accounting, storekeeping and managementinformation, as required to successfully implement theprogram.

(k) recommendations for any technical assistance which might berequired for implementing the recommended maintenance programand other findings of the study;

(1) estimates of the annual budget allocations (by major recurrentand capital expenditure items) required to implement theprogram.

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

The MWS is to make available to the Consultants:

(i) free access to all information, data and previous studiescarried out in the transport sector and public administrationin Malawi;

(ii) existing equipment (excluding transport) and staff fordeflection measurements;

(iii) traffic counts as required to establish the forecasts ofroad traffic;

In connection with work by the Consultants which requires thecooperation of Government, district or other public agencies, the Government

- 76 -ANNEX 8Page 7 of 7

is to provide liaison and is to ensure that the Consultants have access toall information required for the Study.

The Government is free to assign qualified counterparts to workwith the key personnel of the Consultants. Such counterparts should beassigned on a full time basis for the purpose of training, and review of thefindings and recommendations of the Consultants.

IV. TIME SCHEDULE FOR CONSULTING SERVICE AND REPORTS

The Consultants shall prepare and submit the following reports (allin English) within the time limits stated below:

(i) Inception Report: three months after Starting Date, presentingand reviewing the Consultants' findings as under Section II Bhereof, and proposed methodology for establishing the maintenanceprogram;

(ii) Progress Report: three months after submission of theInception Report, stating progress of work to reportingdate, identifying delays in work, if any, and proposingremedial action; and

(iii) Draft Final Report: not later than May 31, 1982,stating the Consultants' recommended road maintenanceprogram and all reviews, analyses and recommendationslisted under Section II hereof. The report shall containa concise first chapter summarizing all major findings andrecommendations of the Consultants.

(iv) Final Report: 30 days after receipt by the Consultants ofcomments on the Draft Final Report by the Government andthe International Development Association, incorporatingall revisions to the Draft Final Report deemed necessaryby the Consultants and Government.

All reports shall be submitted to the Government in 30 copies andto the Association in 6 copies. Further, the Consultants shall submit to theGovernment 30 copies of the summary chapter of the Final Report, separatelybound, and a further 6 copies of the complete Final Report to the InternationalDevelopment Association.

The draft Final Report shall be carefully edited and complete sothat the production of the Final Report may proceed without delay upon receiptof the Government-s and the Association's comments on the Draft Final Report.

December 1980

- 77 -ANNEX 9Page 1 of 3

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Project Progress Reporting Requirements

A. Project Progress Reports

1. The borrower will prepare Progress Reports that should be submitted

quarterly in triplicate, no later than one calendar month after the end of

the quarter. The first report should cover the quarter ending June 30,

1981.

2. The information that Progress Reports should contain is described

below:

(a) General information: this section should refer toProject Monitoring indices (Attachment) in reportingthe following:

(i) the physical progress accomplished during thereporting period;

(ii) actual or expected deviations from the projectimplementation schedule;

(iii) actual or expected difficulties or delays andtheir effects on the implementation schedule,and the steps planned or taken to overcomethe difficulties and avoid further delay;

(iv) expected changes in the completion date of theproject;

(v) key personnel changes in the staffs of the MWS'sRoads Department, consultants or contractor;

(vi) matters which may affect the cost of the project;and

(vii) any development activity likely to affect theeconomic viability of project components.

(b) A bar-type progress chart, based on the project implementation

scheduled, should show the progress in each project component.

- 78 -ANNEX 9Page 2 of 3

(c) A financial statement should be set out in tabular formand indicate for each project component:

(i) original estimated cost;

(ii) revised cost, if appropriate;

(iii) actual expenditure;

(iv) projected expenditure; and

(v) actual and projected withdrawals from the CreditAccount.

(d) Finally, Progress Reports should state the status of actionon each covenant of the Credit Agreement.

3, Progress Reports will be an important input in the preparation ofthe Project Completion Report.

B. Project Completion Report

4. The borrower will prepare a Project Completion Report (PCR), to besubmitted to the Association not later than six (6) months after the ClosingDate.

5. The primary objective of the PCR is to reinforce self-evaluation bythe Borrower and the Association's operating departments and to facilitatedissemination of lessons learned through the project:

(a) the performance by the Borrower and the Associationof their respective obligations under the CreditAgreement and whether the Association could have beenmore helpful;

(b) the results that can be expected from the project, ascompared with expectations at appraisal, and whetherthe original expectations were realistic; and

(c) whether in retrospect the project was worth doing orcould have been done better.

6. For those components of the project for which a rate of returnwas estimated during appraisal, the PCR should contain a new estimate of thereturn the project is now likely to yield and analyze the reasons for physicalor economic deviations. However, the new rate of return calculation shouldbe as simple as possible under the circumstances and should absorb only aminor portion of the time devoted to the preparation of the PCR. An annexwith the relevant information supporting this analysis should be included.

- 79 -ANNEX 9Page 3 of 3

7. The basic documents to be referred to are:

Credit application.

Feasibility studies, preappraisal report, project brief.

Appraisal report.

Credit Agreement documents, supplementary letters, etc.

Supervision Reports.

Quarterly Progress Reports.

Project Correspondence Files.

Miscellaneous evaluation reports.

8. The Highways Division, Eastern Africa Projects Department, willreview and comment on the PCR in consultation with the Programs Department.After approval by the Highway Division Chief, the PCR is sent to the BankGroup's Operations Evaluation Department (OED) which is responsible forconducting an audit of the project subsequent to the PCR exercise. Thisaudit can lead to suggestions for changes or additions in the PCR as OEDprepares the Project Performance Audit Report (PPAR) for submission to theBank Group's Board of Directors. Before going to the Board, the draft PPARwhich includes the PCR, is sent to various Bank Group divisions, to theGovernment and occasionally to consultants (especially if they have beencriticized).

December 1980

- 80 -Attachment

Project tonitoring ledics.as of

Indicesi actual vs astimatepi absolute and %.where activity level, as msasured by a*pecific index, is balw .sti.atas, thsreason should be ascertained. If . lowerthan anticipated activity level is theresult of an outstanding problem retomendcorrective action.

Actual as % ieaeosc for Rtec_end CorretIveistiated Actual of Estimated Diverasnca Action. if &nV

1. Construction Work for each contract

1. Preliminarie. to mobilization (month.)2. Volume of earthwork (3m)3. Length of subbase (ki)4. Length of baae (km)5. Length of shoulders (ko)6. Length of surfacing (km)7. Pipe culvert. (no..)8. Bo. culverts (nos.)9. Length of bridge. (m)

10. Ancillary works (km)11. Construction work completed (date)12. Cotractor certificate for payment (XK)13. Payments to contractor (HK)

II. Road Improvement Work.

1. Widening (km)2. Culverting (ko)3. Side drainage (kh)4. Formation (kh)5. Gravelling (kh)6. Improvement works complte (dat.)7. Contractor's certificate for paymsnt. (He)8. Payments to contractor (14K)

III. Suprvi.ion of Construction and Improvmentsfor each contract:

1. Prelioinari.s to start (month.)2. Supervision (ma-.montha)3. Cumulative monthly invoice. from consultants (1K)4. Payments to consultants (}IK)

IV. DRIMP (for each district):

A. BuildingsI. Praliminarie. to start (months)2. Construction of depot. ( completed)3. Con.tructton of housing (% completed)4. Payment. for construction (NK)

B. Equipment and Tools1. Preliminaries to ordering (month.)2. Arrival of equipment and tools (date, by type)3. Payment to suppliers (11K)

C. Improvement Work.1. Preliminarie, to start (months)2. Improvement works (kh)3. Payment for improvement .orks (hit)

D. Technical Asaistance1. Preliminaries to start (months)2. Appointment of counterparts (datea)3. Techical aasistance work (montha)4. Cumulative monthly invoice. (NI)5. Paynts for technical assistance (Hl)

V. Consulting Services for haintenance Study:

1. Preliminaries to start (montha)2. Inception report (dat.)3. Draft final report (date)4. Final report (date)5. Cumulative monthly invoices from consultante (MK)6. Payments to consultant. (hK)

VI. haintenance Equipment for MWS

1. Prelisinari.o to ordering (month.)2. Arrival of Equipment (dates, by typo)3. Payments to Suppliers (h1X)

VII. Expansion of Training Center

A. Buildings1. Preliminere. to start (month,)2. Construction (7 completed)3. Paymsnts for construction (HK)

B. Trinina Aids1. Prelietniries to ordering (months)2. Arriv-l of equipment nd tool (dates, by typo)3. Payments for training aide (Nit)

VIII. Covenants of Credit Agreement

1.2.3.4.5.

MALAWI

FOURTH HIGHWAY PROJECT

Economic Evaluation of Jenda-Mzuzu-Ekwendeni Road -

Whole Jenda- Luwawa T.off- Kalungulu- Champhoya- Hbowe- Mzuzu_iarameter Unit Road LuwEwa T .off Kaluntulu Chafphoys Mbowe Mzuzu Ekwendeni

LENGTH km 169 32.2 42.5 10.5 47 17.7 19.5

TRAFFIC

(i) Volume

1983 2_ - light AADT _ 76 55 81 71 124 262

- heavy AADT - 55 28 49 26 53 133

- total AADT - 131 83 130 97 177 395

(ii) Annual Growth

1983-2002 I 7 7 7 7 7 7 7

Economic Cost of Construc-tion and Improvement 3/

- civil works per km 1KC000 102 193 34 21 33 201 215- total HK'000 17,200 6,220 1,443 220 1,557 3,564 4,196

Vehicle OperatinRCosts 4/

1983: Savings in voc HRK000 2,041 399 189 110 284 296 785

Road Maintenance

1983: savings MHO000 - 17 - - - 8 11

1983: addit'1 costs MK'000 - - 12 2 12 - -

Life of Project years - 20 10 10 10 20 20

First Year Return 5/ 7 11 7 11 70 16 8 18

Economic Return 1 19 14 11 55 18 17 30

I/ Mid-1980 prices, net of taxes.2/ Year when whole length of road open to traffic.3/ Including supervision cost and 10% physical contingencies.4/ Savings in voc for normal and generated traffic.51 Using 127 discount rate.

- 82 -ANNEX 11Page 1 of 4

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Terms of Reference for the Economic Analysis and SelectionCriteria for Improvement of District Roads under DRIMP

Introduction

1. The second phase of DRIMP provides for improvement of all districtroads in the ten districts proposed for inclusion in the program. However,since improvement of some of these roads will not be justified, at leastduring the program period, a selection process is necessary to eliminatethose roads not justified on socioeconomic grounds. This will leavecapacity under the program to improve important rural roads which are notdesignated as district roads, but which have already been identified by theDistrict Councils as high priority roads in need of improvement.

2. All district and other rural roads will be screened as outlinedbelow and, if they pass the screening criteria, will be subject to economicevaluation. In addition, some roads will be subject to further social evalua-tion procedures. Although all roads to be improved will be identified beforePhase II of DRIMP begins, the program will be flexible and provide forupdating of the list of roads whenever necessary.

Screening

3. It is important to screen the list of district and other roadsrecommended for inclusion in the program at an early stage in order to avoidcostly and unnecessary project preparation work. The screening criteriaoutlined below will be applied after all the roads proposed for the programhave been marked on an appropriately large-scale map of the area (in itself ascreening device):

(a) all roads to be improved should connect with: existing roadsin good and maintainable condition; roads to be constructed atabout the same time as the proposed roads are to be improved;or with a facility such as a local market;

(b) there should be no other economically viable transport alter-native within a distance of about 2 km of the proposed roador other reasonable distance in the case of physical barriers,such as a river;

- 83 -ANNEX 11Page 2 of 4

(c) the area to be served by the proposed road should be coveredby a development program, such as an agricultural extensionservice, credit facilities, or an agricultural cooperativeprogram. The program should preferably have already beenestablished; however, if there is a definite commitmentby Government to a planned program which is already at anadvanced stage of preparation, the proposed road shouldnot be excluded from the program; and

(d) all roads should be below a maximum per kilometer costunless above-average benefits are expected from improvementof the road. One of the first tasks of consultants carryingout the selection process will be to determine the perkilometer maximum cost, after estimating the maximum numberof kilometers to be improved with the given resources avail-able. The inclusion of roads with significantly highercosts than average will mean that the total length of roadsto be improved under the program would be reduced; only ifthe benefits of such roads are particularly high will it bejustified to include them.

Those roads that pass screening should be subject to the following evaluationprocess.

Evaluation

4. The initial pilot study indicates that a significant proportion ofdistrict roads will have traffic levels of over 10 vpd, although this willvary from one district to another. A number of roads may therefore meet theminimum rate of return criteria on the basis of vehicle operating cost savingsalone, without the need for further analysis of other benefits. It willtherefore be very important to obtain reliable traffic counts on such roads.

5. For other roads it will be necessary to estimate the increase inagricultural producer surplus due to improvement of the road and associateddevelopment programs. It is a common practice to evaluate agriculturalprojects on the basis of farm models which are typical of the local crop-ping patterns and representative of the area. Similar models should bedeveloped for the areas of influence of the proposed roads. More than onefarm model may apply in any given district, depending on the variety ofcropping patterns. The farm models should not only be based on patternsof production but also on the developmental level of the area (subsistencefarming, level of farm technology and market orientation, etc.), and anassessment of the capacity of the population to develop the potential foragricultural development. Once the farm models have been developed, theirsuitability will be reviewed and revised, if necessary, by the appropriateagricultural agencies, as this will not be within the purview of the RoadsDepartment.

- 84 -ANNEX 11Page 3 of 4

6. Each area of influence of the proposed road (estimated at approxi-mately 4 km) should be examined to determine the following:

(a) the area of cultivated and cultivable land;

(b) the fertility and suitability of the land, taking intoaccount such factors as soil characteristics, climate,topography, water availability, etc.; and

(c) the farm model which is most representative of the area.

When the above data have been collected, the increase in agricultural produc-tion after improvement of the proposed road can be estimated on the basis ofapplication of the farm models. Some indication of the magnitude of suchbenefits can be obtained from at least one evaluation study, which has beencarried out in Malawi's Lilongwe District, where the increase in producersurplus has been estimated after roads have been improved, without expansionof agricultural extension programs. All costs associated with realizing thepotential benefits should be estimated and included in the economic analysis;this should include not only incremental costs of improved inputs but alsothe costs of improved methods, i.e., labor and extension service costs.The potential incremental producer surplus that will result from improvementof the road should then be correlated with development potential, cultivatedand cultivable land, and fertility/suitability of the land, to arrive at areasonable estimate of benefits given the above factors. This may mean thatwhere the development potential or fertility/suitability of the land is low,only half of the potential increase in producer surplus will be realized, orwhere they are high, nearly all potential benefits will be realized.

7. It will not be necessary to calculate economic rates of return forevery road, but rather for representative roads serving reasonably homogenousareas. The level of benefits yielding a 12% rate of return should be deter-mined, using the average cost of road improvements in each area, so that roadsfalling below this rate can be excluded from the program unless justified onother grounds (para. 8). For roads with improvement costs above the average,minimum rates of return can be estimated for each band of costs, i.e., 1-25%,26-50%, 51-75%, etc., over the average cost. Roads which are marginal can beexamined in more detail. All benefits should be net of incremental costs, notonly for increased inputs such as fertilizers and seeds, but also additionalagricultural extension costs or the costs of extending credit facilities,cooperative or mechanization programs, etc.

8. The distribution of project benefits between farmers, middlemen(including transporters) and consumers needs to be examined to ensure thatfarmers will recoup at least a significant portion of the benefits. Also,there should be an indication of the size of farms to be served by the road,so as to ensure that most of the benefits of the program are going to thesmaller farmers. In addition to size of landholding, such social criteriaas income level of inhabitants within the area of influence of the road, andaverage distance to educational, health, and other social and administrative

- 85 -ANNEX 1 1Page 4 of 4

facilities should be evaluated for roads that are economically marginal.The importance of social considerations and improved accessibility shouldbe given in as quantified terms as possible (e.g., estimated change in schoolattendance ratios, delivery of health services in terms of visits to healthclinics, etc.). Where the social indicators show a significant impact on thecommunity as a result of improving the road, but the economic evaluation ismarginal, a separate case can be made for including the proposed road in theprogram.

December 1980

- 86 -

ANNEX 12Page 1 of 2

MALAWI

FOURTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Related Documents and Data Available in Project File

I. Reports Related to Transportation

A. Government of Malawi, Statement of Development Policies 1971-1980

B. Government of Malawi, Development Programme 1979/80-1981/82

C. Government of Malawi, Economic Reports 1974-1979

D. Government of Malawi, Malawi Statistical Yearbooks 1970-1978,Transport Statistics

E. Government of Malawi, National Statistical Office, Reports onNational Traffic Census 1974-1979, Road Traffic

F. Transport and Road Research Laboratory, 1976, Origin-DestinationSurvey in Malawi

[I. Reports and Studies Related to the Project

A. Study of the Lilongwe-Mchinji-Border Road and Lilongwe -MzimbaRoad of March 1975 and Feasibility of Mzuzu-Muhuju Road ofFebruary 1976, both by Scott Wilson Kirkpatrick and Partners

B. Jenda-Mzuzu Road Feasibility Study of March 1979 by Scott WilsonKirkpatrick and Partners

C. District Roads Development and Maintenance Study, November 1978,Scott Wilson Kirkpatrick and Partners

D. District Roads Improvement and Maintenance Project, An EconomicAppraisal of District Roads in Mangochi District (Pilot Study)January 1980; Scott Wilson Kirkpatrick and Partners and Coopersand Lybrand

-. 87 -ANNEX 12Page 2 of 2

E. Design Report and Tender Documents for the Jenda-Mzuzu Road,Scott Wilson Kirkpatrick and Partners (final documents willbe available in November 1980)

F. DRIMP, An Economic Appraisal of District Roads in Nine Districts,SWKP and Coopers and Lybrand (final report will be availablein November 1980)

III. Project Working Papers

December 1980

MALAWIAPPRAISAL OF FOURTH HIGHWAY PROJECT

ORGANIZATION OF THEMINISTRY OF WORKS AND SUPPLIES

CAPITAL CITYDEVELOPMENTPRANTCORPORATION SCRAR

AND AIRPORTDEVELOPMENT LTD.

SENIORDEPUTY SECRETARY

ENGINEER

ADMINISTRATION IN-CHIEF

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MALAWIFOURTH HIGHWAY PROJECT

PROJECT IMPLEMENTATION SCHEDULE

MAIN ACTIVITIES Responsible 1980 1981 1982 1983 4 9<

3 4 1 213 4 1 2 3 4 1 2 3- 4 T 2

Board Presentation IDA *

Sigcing of Cedit Agreemn- t Goyt. & IDA

Effective Date of Credit Govt

I Rood Co-str-ctiol- and Improvements

Preparation of Bid Donuments Coosoltants

Review and Approval MWS & IDA _

Preqoalificerioo of Cetractors MWS & Coosult.

Biddiog C-ntractt

Bid Eoaluation Coonsltants

Review atd Appro-al MWS & IDA a

Award of Contract MWS

Mobiliration Contractor

Constroction Contractor*_

11 Construction Supervision

Selection of Consultants MWS

Sup-rvisinn Consultants

III Second Phase of DRIMP

Selection of District Roads MWS & Cosolt.

Cnt-roton of Depots and Procurementof Eqruipent MWS

Road Impro-e-ents MWS * _ -_

Road Maintenance MWS & Dist.Co-nils

Technical Assistance Counciltnt

IV Ttchnical Assistance to EPD

Selection of Consultant EPD

R-niew and Aper-ca IDA

Work of Consoltant EPD & Consult.

V Procurement of Maintanance Eqoipmet

Drdering MWS

Delicecy Soppliers

VI New Training Center

Planning a-d Detign MWS

Construction MWS_ _ _ _ _

VII Main.tenace Study

Incite Prpsals MWS

Eculuate Proposals MWS

R-ulow an,d Appr-c1 IDAN

Award of Contract MWS

FieId and Office Work Consoltants

Review cf Draft Final Report MWS & IDA mm

Final Report Consultants

VIII Slttion- t Rcds fcr DRIMP II MWS & C-oIt

Dece--er 1980 VV,ld Bank 22127

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