Document of

The World Bank

FOR OFFICIAL USk ONLY

Report No. 4804-IND

STAFF APPRAISAL REPORT

TNDONESIA

HIGHWAY BETTERMENT PROJECT

March 23, 1984

East Asia and PacificTransportation Division 2

This document has a restricted dtitribution anJ may be used by recipients only in the performance oftheir official duties. Its contents may otot otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit Rupiah (Rp)

US$1.00 Rp 1,000Rp 1,000 US$1.00Rp 1,000,000 US$1,000

FISCAL YEAR

April 1 - Marclh 31

PRINCIPAIL ABBREVIATIONS AND ACRONYMS USED

AMC - Asphalt Mixing CenterAsbuton - Natural 7rOck asphalt from Buton IslandASEAN - Associatlon of South-East Asian NationsC7PTA KARYA - Directorate General of Housing, Building, Planning

and Urban DevelopmentBAPPENAS -- National Planning AgencyDBM - Provincial Highway DirectorateDGH - Directorate General of HighwaysDGs - Directorates General of the Ministry of Public WorksDPMJ - Ir.donesian Road Research Laboratory (of DGH)DPUK - Zocal government departnment of public worksDPPUP - Provincial government department of public worksDWT - Deadweight tonsGenmerri - Generalized Model for the Evaluation of Rural Road ImprovementsGOI - Government of IndonesiaHRS - Hot rolled sheet (type of pavement overlay)[IRTS - Highway and Road Transport StudyINPRES - Special programs governed by presidential decreesITB - Institute of Technology, BandungJasa Marga - Indonesian Toll Road CorporationMHA - Ministry of Home AffairsMO0U - Ministry of CommunicationsMOF - Ministry of FinanceMPW - Ministry of Public WorksNacas - Non-aggregated cold asbuton sheetOECF - Japanese aid agencyPAN - Indonesian State Asr,.alt CorporationPERJAN - Semi-autonomous goNernnent entityPUSDIKLAT - Ministry of Public Works Training DepartmentRBO - Regional Betterment Office (of DGH)Repelita - Indonesian National Five Year Development PlanSEP - Sufficiency Engineering ProposalSFO - Screening Feasibility Office (of DGH)SOE - State Owned Enterprise, and Statement of ExpendituresSPN - Transport sector development guidetJCL - University College of LondonUNDP - United Nations Development ProgrammeUNIDO - UN Industrial Development OrganizationVpd - vehicles per day

FOR OFFICIAL USE ONLY

ItNDONESIA

HIGHWAY BETTERMENT PROJECT

Table of Contents

Page No.

I. THE TRANSPORT SECTOR

A. Transport and National Develop3ent ...................... 1B. The Transport System2..................... .*.*...... . 2C. Transport Development Programs and Financinl......e... 2D. Sector Management 3E. Transport Sector Issues in the 19808.................... 5F. Bank Sector Support Strategy............................ 6

II. THE HIGHWAY SUBSECTOR

Ao The Ntok, .......... 6B. Traffic and Road Transport............................. 7C. Highway Mainagement and Operations...................... 10D. Highway Engineering. .o..o..o..... ... .*...*. **...... . 17E. Highway Development Programs and Financing...0.....,.. 18F. Previous Bank Financed Highway Projects................. 21

III. THE PROJECT

A. Objectiveso..**.*e..e.oge..ge..*..o eo** . * e.....* 0ee 0 22B. Project Scope. ... ................. 22C. Project Desription 23D. Cost Estimates.o.i..*.................eseeceeeecg..0 ege. 27Eo Financing........oe........o...eo..og.ee.....ecg.... .. , 29F. Implementation apd Procurement.........e............,, ,, 29G. Disbursements . g e .* e ec .e.c e.ee.ee. . g..g.e.. c, 32H. Accounts, Auditing and Reporting 32I. Status of Preparation. .. eec o.... a oqo.... .eece. ee. 33J. Environmental Aspects. ..... ... oo o,.eo,ecc..e.*g..oo 33

The report is based on findings of an appraisal mission consisting of Messrs.S.O. Sigfusson (Senior Engineer), H. Peters (Economist/Deputy Division Chief),W. Hoehenwarter (Financial Analyst), R. S. Millard (Consultant Engineer) andMrs. J. Wishart (Economist) which visited Indonesia in May/June 19836Mr. M. S. Parthasarathi (Senior Economist) participated in writing the report.

This document has a restricted distribution and may be used by recipients only in the performance ofthe.r oMncial duties. Its coltents may not otherwise be disclosed without World Bank authorization,

Page No.

TV. ECON(ThIGC EVALUATION

B Betterment Program. . . .. .. . .*. ., ,. ,. .O. ...Oa *V , . * 34C. Upgrading/Rehabilitation Program.. .................... . 35D. Bridge Replacement Program..................... . , * * , * . .. 35E. Economic Returns and Risks................ ......... 36F. Beneficiaries.......*...... .......... ., . 38

V. AGREEIIENTS AND RECOfENDATIONS .................... . 38

ANNEXES

1. Standards for Betterment Works- ,........ 402, Project Implementation Schedule..,. ..................... 413. Selected Documents and Data Available in the Project File... 44

SUPPORTING FABLES

2.1 Length of Roads by Administrative Categories, 1982.......... 472.2 Summary of the Type and Condition of Pavements.............. 482.3 Condition of and Traffic on Arterial and Collector Roads in

Marcb 1982 ........ 0...-.. ,0 . 492.4 Vehicles Registered, 1969-81.............. .................. . 502.5 Traffic Growth by Province, .. 0 , ....... ................. . 512.6 DGH Geometric Design Standards..+ .............. ....... 522.7 Gross Domestic Product and Central Government Budget,*......

;.xpenditures by Type, 1977-81 ....................... 532,8 Central Government Highway Expenditures By Type of Road

and Expenditure, 1977-81 ................. ........ 542.9 Provincial Government Highway Expenditures By Type of

Road and Expenditure, 1919-81 ............................ 552.10 DGR Highway Development Programs , 563,1 Betterment Program, Phase I................................. 573.2 Upgrading/Rehabilitation Program of Key Roads,

First Year Program (1984/85) ............... 583.3 Bridge Replacement Program 593.4 Cost Esiae..........+603.5 Schedule of Estimated Dishursements........................... 614.1 Road User Costs on Improved Road in South Sumatra..........s 624,2 Basic Road User Costs by Region ............................ 634.3 Road User Savings on a Sample Road Section 644.4 Sample Test on Economic Returns............................ 65

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Page No.

CHARTS

1. Central and Provincial Public Works Organizations inRelation to Highway Administratln ....................... 66

2. Provincial Department of Public Works (DPUP),Organization Chart for West Sumr,tra ........ '............. 67

3. Typical Organization Chart of Kabupaten Public WorksDepartment (DPLIK)Q**, ...... 7*********** 68

4. Source and Plow of Funds for Road Maintenace and Development. 69

MAYS

IBRD i7532 : Transportation NetworkIBRD 17533 : Highway Bettermei;t Project; SumateraIBRD 17534 : Highway Betterment Project; Java and Bali.IBRD 17535R: Highway Betterment Project; Kalimantan and Sulawesi

INDONESI A

HTGHWAY BETTERENT PROJECT

I. THE TRANSPORT SECTOR

A. Transport and NationaL Develoment

1.01 Indonesia, the world's largest archipelago nation, ranks fifth inpopulation with over 150 million people. The archipelago extends some5,000 km across the equator from northwestern Sumatra to Irian Jaya and com-prises more than 13,000 islands of which Java, Sutmatra, Kalimantan andSulawesi are the largest. Indonesia has a total land area of 2 millionsq km. The extent of the country and its archipelagic nature imply diverseclimatic conditions, resource endowments and growth potential. Economic andpolitical integration of the different regions in the midst of such diversityis an important policy objective of the Government of Indonesia (GOI), andtransportation has a crucial role in this effort. Between 1971 and 1980 thecountry's gross domestic product (GDP) rose from Rp 5,454 billion to10,954 billion in real terms, an averc'Ze annual growth rate of almost 8%. Thetransport sector is estimated to have grown about 12% per annum during thisperiod and its contribution to GDP is now around 5%. GOl planners expect thesector's share to increase to around 6% of GDP by the end of the century,which implies an annual growth of around 10%.

1.02 With the country's wide geographic dimensions and large population,attempts to cope with the necessarily diverse nature of transport demandsefficiently and equitably face a difficult tas'k compounded by the need to con-stantly address newly emerging demands, resulting from: developments in theoil sector, the start-up of agricultural intensification programs, establisni-ment of new domestic industries and iacreasing attention being paid by GOI toregional development. Over the past decade, both domestic trade and tradewith the outside world have shown steady growth and these trends are expectedto continue. All these developments signify growing pressure on the country'stransport system. In addition, studies have revealed that there are consider-able unfulfilled transport needs In many parts of the country.

1.03 Despite remarkable improvements both in area coverage and quality oftransport infrastructure and services in recent years, there is still a gapbetween demand for and supply of transport facilities and services. Theczountry's dimensions and the uneven distributi'mn of income within the nationalpopulation make it difficult and expensive for GOI to pursue a transportstrategy aimed at providing both equal transport facilities to all segments ofthe population and transport investments required by expanding economic activ-ities. This difficulty is compounded by a high percentage of existing trans-port infrastructure being in a deteriorated condition and needing rehabilita-tion and soae upgrading to effectively fulfill its function. There are alsoshortcomings in the management and operation of existing transport infrastruc-ture and services. Revision of transport regulations in the light of

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structural changes ir. the national economy and developments in the sectorItself has been slow. As a result, existing transport resources are often naotutilized to thuir full potential. The wide variations in the availabiLity oftransport infrastructure and services in the different regions of the countryaggravate these problems.

B. The Transport System

1.04 Within the Indonesian transport system road transport is the princi-pal mode. In terms of volumes, about 90% of all goods and more than 95% ofall passengers transported in Indonesia go by road. The road network expandedfrom 85,000 kem to 148,000 km between 1971 and 1983, while the annual growth ofroad vehicles was 25-30% for commercial vehicles, 13% for cars and welL above20% for motorcycles. In 1982 there were about 4.6 million vehicles onIndonesia's roads. Further details on highways and road traffic are given inChapter II.

1.05 Maritime transport, although a distant second to roads in the over-all transport picture, is very Important in inter-island transport, handlingabout 95% of all freight movements and roughly 75% of all passenger travelbetween the islands. In 1980, the domestic shipping fleet incLuded some 6,600units with a total capacity of aoout 1.7 million DWT. Domestic marine drycargo traffic has increased by roughly 15% annually during the past decade.Approximately 400 ports and numerous landing points constitute the basicinfrastru_ture for maritime transport. The maritime sector is presentLyundergoing significant changes in fleet composition and port infrastructure inresponse to modern developments in technology; these will improve efficiencyIn cargo and passenger handling.

1.06 Indonesia has inherited an extensive railway system from pre-independence days, comprising some 5,500 route-Kn and covering all of Java andparts of Sumatra. As elsewhere in the world, the Indonesian State RaiLways(PJKA) have experienced significant decline in traffic during thie 1970s;passenger and freight traffic declined by 45% and 20%, respectively. Since1978, however, there has been some slight recovery, and in 1980 PJKA carried42.8 million passengers and 4.7 million tons of goods.

1.07 Domestic air transport increased rapidlyl during the 1970s; theaverage annual growth rate for passenger traffic was 22% and the volume ofcargo carried in 1980 was seven times higher than in 1970. In 1980, a fleetof about 550 aircraft carried about four million domestic passengers. Thereare several thousand km of niavigable waterways amcng Indonesia's riversystems, and river transport has a potentially important role in the movementof people and goods.

C. Transport Development Programs and Financing

1.08 In 1969, GOI initiated its first five-year national developmentplan, Repelita I, covering the period through March 1974. About 15% of theRepelita I investment total was allocated to the transport sector, represent-ing Rp 342 billion. Only Rp 297 billion was actually spent, and roughLy 55%of this was in road development. Repelita II, spanning the period between

1974 and 1979, initially provided Rp 500 bilLion to _he transport sector,which constituted 16% of the total development outlays; Rp 753 billion wasactually spent. This sizeable increase was due to the extra revenue accruingto GOI after the 1973 oil price increase. Road developmasut accounted forabout 42% of all outlays in the transport sector during Repelita I1. GOt'spolicy for the sector during the period 1969-79 emphasized rehabilitation andimprovement of existing transport infrastructure and services rather thanextension of the network and expantvion nf services. Repetita III, coveringthe period between 1979 and 1984, provides for Rp 2,998 billion (about 14% ofthe total plan budget) to be invested in transport development, with roadinfrastructure getting more than half of the allocation. The increased sharefor roads (over Repelita II) is partly attributable to G01's new emphasis onrural roads as an explicit component of the broader rural development8trategy.

1.09 In drawing up the fourth five-year development plan (Repelita IV),covering 1984-1989, GOl institutions have to address the problems associatedwith reduced foreign exchange earnings and ircreasingly severe budget limita-tions. Several downward revisions of early plan drafts have already takenplace. The performance of Repelita III in the last two years was also influ-enced by fiscal constraints. Of considerable burden to the Government'sfinances are the costs of various subsidy schemes in the transport sectorwhich have been devised over time to offset apparent inequalities and also tocover the difference between the costs and revenues of state transport corpo-rations. The aggregate of all direct and indirect cash subsidies in thetransport sector amounted to Rp 821 million in 1980 (roughly 2% of GDP). Non-cash subsidies were probably substantially higher: for petroleum derivativesused in the transport sector alone (which were priced below ruling inter-national prices) they were Rp 750 billion in 1980. But in early 1982 andagain in early 1983 and 1984, GOI increased the pump prices of fuel consider-ably. Today the Pump prices of both gasoline and diesel fuel are well abovethe world market prices. As a result, there are no longer any indirect non-cash subsidies for petroleam derivatives used in the transport sector.

D. Sector Management

1.10 Three government agencies have prime responsibility for developingthe transport system and organizing its operations. The Ministry of Communi-cations (HOC) plans, regulates and controls all transport modes. Detailedplanning for highways is under the Ministry of Public Works (MPW), through itsDirectorate General of Highways (DGH). The national planning agency BadanPerencaltaan Masional (BAPPENAS), reviews sectoral investment plans drawn up by140C and MPW and approves, jointly with the Ministry of Finance (MOF), invest-ment plans under the development budget. Both MOC and MPW are large bureau-cracies, whereas BAPPENAS is a small organization with less than 10 profes-sionals for transport. MPW's organization is replicated at the provincial andkabupaten (district) levels by integrated public works organizations, whichreport directly to the chiefs of the provincial and kabupaten governments,which in turn are under the Ministry of Home Affairs (MHA).

1.11 In the past, planning and programming transpL-rt development has beenundertaken by the individual lir. agencies without effective coordination.

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While BAPPENAS has tried to balance modal investment programs, the lack of anoverall transport development strategy has hampered rational decision-makingconcerning the desirable, i.e. most cost-effective, roles of each mode in thetransport system. To remedy this situation MOC is preparing a broad transportsector develoment guide, the Sistem Perhubutngan Nasional (SPN), taking intoaccount regional development plans and comparative advantages of each trans-port mode. Parallel to the preparation of SPN, MOC's Directorates General ofLand and Sea Communications are drawing up comprehensive development plans forland and maritime transport, with technical assistance under ongoing Bank-financed projects, with Bank staff devoting a substantial proportion of trans-port sector work to assisting in the preparation of these plans. Also, untilrecently, transport planning was strongly centralized with limited participa-tion of provincial and district authorities in the process. As a result,regional problems and concerns were not properly reflected in the transportdevelopment plans. This situation is gradually changing and central govern-ment Iihue agencies are increasingly obtaining regional inputs into transportsector planning.

1.12 Except for roads, MOC has the overall responsibility for managingthe transport system, including the railways. PJKA is organized as a Perjan(a semi.-autonomous government entity) and is as such a special branch ofMOC. All other state-owned enterprises (SOEs) in the transport sector aredirectly under the supervision of MOC. MOC is still among the least developedline agencies in GOI and consequently arrangements for managing and operatingtransport services are in many cases inadequate, There are cri-ical shortagesof experienced managers and professionals; manifestations of MOC's limitedsector management capabilities are cumbersome port operation practices andgenerally inefficient SOEs in the transport sector. These problems areincreased by GOI's subsidy policy as subsidies often mask the inefficienciesin the system and impede innovation and the search for low-cost solutions.The Bank is assisting GOI in addressing problems and issues with SOEs in thetransport sector through technical assistance under ongoing projects. As afirst step, a corporate plan will be established for each SOE in the maritimesector as part of the Maritime Sector Development Program.

1.13 GOI's pricing and taxation policies in the transport sector have notonly generated substantial subsidy requirements but also distortions in theprovision of transport services. Prices charged for the use of transportinfrastructure and services are often not cost-based. Distortions induced byregulations are particularly severe in the maritime sector where port opera-tions and shipping services are heavily controlled. The regulatory frameworkwhich governs the transport sector has thus been a major impediment to theevolution of an efficient system. Under the land and maritime transportdevelopment programs, the Bank is helping MOC to address these issues and todraw up an action plan for required regulatory reform.

1.14 Many transport related taxes have not been adjusted in line withrecent price movements and GOI's explicit economic, social and fiscal poli-cies, and technology changes in the sector. In several instances taxes hadnot been modified for more than ten years, as in road transport. As a result,existing taxes often promote non-optimal transport arrangements and contributeto government revenues in a much more modest way than they potentially

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could. There is an urgent need to review all taxes in the transport sector todetermine their effectiveness in contributing to GOI's economic, soci.al andfiscal policies; substantial elements of the transport taxation system mayhave to be restructured. Another problem is inadequate tax collection! onlyabout 55% of all collectable road transport taxes are in fact collected. Theproposed project would assist in efforts to improve the situation in thesematters (see also para. 2.43).

E. Transport Sector Issues in the 1980s

1.15 During 1982 and 1983 the present condition and future prospects ofthe Indonesian economy changed dramatically as a result of the worldwiderecession and tlhe softening in oil prices. The latter is serious forIndonesia, as 60% of government revenues are derived from *axes on oilcompanies and 70% of export earnings come from oil products. The deficit inIndonesia's balance of payments current account was equivalent to about 8% ofGNP in early 1983. A, deficit of this size is not sustainable. GOI recognizesthat, in a conditioni of resource shortage, changes will be necessary tomcbilize private sector funds if the rate of economic growth is not to falltoo steeply. The principal change needed is relaxation of government controlover sectors of the economy that are potentially suitable for commercial typeoperation.

1.16 Rather than changing the policy direction in the transport sector,the recession has, in general, made more evident the need to reduce andeventually eliminate subsidies and deficit financing and to move the trat2sportsector towards commercial viability. Centralized planning of transportservices needs to be rea,'.aced by a system, more oriented and responsive tochanges in the volume and structure of demand. In practice, this is likely tomean that the public sector should concentrate on the provision and mainte-nance of infrastructure, leaving the private sector to supply the services,with GOI monitoring rather than setting tariffs. Such a division of functionscan be economically viable only if the users are charged the opportunity costof providing and maintaining the infrastructure. The present situation isstill far from that condition.

1.17 The complete removal or reduction of implicit (and explicit)subsidies in the transport sector will result in tariff iacreases, but itshuuld stimulate greater efficiency in the long run and therefore moreeconomic transport operations and services. GOI has already taken severalmeasures which are aimed at reducing subsidy payment:s and at increasingprivate sector financing of transport investments. Following the announcementof the sector budget for 1983, domestic oil prices were raised, and again in1984, to eliminate practically all oil subsidies. GOI i8 also encouragingstate institutions to rely less on government budgetary funds and to tapmarket funds directly through the issues of domestic rupiah bonds. P.T. JasaMarga, the Indonesian Toll Road Corporation, was the first in two decades tofloat bonds for this purpose (in 1983 and 1984). Also, tolls on toll roadswere raised by over 100% in July 1983.

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F. Bi3nk Sector Su jort Strategy

1.18 In Lts general approach the Bank's strategy to support transportdevelopment in Indonesia is geared to assist GO[ In carryinlg out the necessaryadjustments in the sector in line wich economic development trends. Adjust-mnents are required noL only in phlystcal faciLLtLes but also in sector policiesand management arrangements. The aim is Lo gradually establish an efficienttransport system which is demand-responsive and financially self-supporting.This should help to remove the many internal as well as external factors whichimpede the transport system's performance.

1.19 The Bank's ongoing and proposed sector assistance program is three-pronged, i.e. in (a) general sector development policies and management;(b) highway development; and (c) maritime transport development. As anintegral part of all ongoing and proposed future transport lending operations,the Bank will assist MOC in revising existing transport development andregulatory policies and related arrangements, in support of GOI's overalleconomic, fiscal and social policies. Substantial assistance will also beprovided to improve MOC's sector management capabilities.

1.20 The Bank's highway sector support strat-Agy concentrates on requirednetwork development and improving road maintenance in accordance with cost-effective technical standards and operational arrangements. Special emphasisis on increasing regionalization of highway management functions. Substantialsupport has already been provided in training highway administrators andprofessionals, and in developing the capacities of local highway consultantsand contractors. There have been encouraging improvements in highway manage-ment recently ana further assistance is included in the proposed project tocontinue the process.

1.21 The maritime sector is a key element in attempts to improve externaland local trade, particularly in the context of GOI's policy to diversify thecountry's export base. The Bank is assisting GOI in establishing a maritimesector development program wl-ch will set the stage for required regulatoryand sector management reforms to improve systemn performance. Two maritimelending operations are scheduled over the next four years; they would includethe implementation of regulatory and management reforms and investmentsrequired for system expansion in line with projected growth in sea transportrequirements.

II. THE HIGHWAY SUBSHCTOR

A. The Network

2.01 Indonesia has a relatively limited road network of some 148,000 kmof classified highways. Roads are classified according to an administrativesystem into national (11,800 km), provincial (34,000 km), and district roads(101,700 km), mostly reflecting financial responsibilities for constructionand maintenance of the networks. Table 2.1 shows length of roads by majorregion and by administrative classification as well as relative distribution

of the road network, population, vehicle fleet and land area between majorregions of thie country in 1982. A functional classification system, intro-duced by the tew road law of 1980, will replace the adIministrative system forplanning purposes when reclassification is completed in about five years. Thesystem has three categories of roads: (a) arterial, linking major regionaldevelopment centers; (b) collector, linking centers of secondary importancewith each other and/or with the arterial network; and (c) local, linking minorcenters of development with each other and/or with the collector network.

2.02 The classified nietwork has grown considerably over the lastdecade: some 50,000 km of unclassified roads have been included in the dis-trict roads network, an increase of about 100%, and reclassification hasresulted in the length of the national and provincial roads network increasingby some 13,000 km or about 40%. The coverage of the main highway networkappears generally adequate for the country's present and medium-term roadtransport needs, but capacity increases are required on many existiug roads.About 47% of all national and provincial roads still have pavement widths of4.5 m or less and over 60% of all bridges are substandard, having carryingcapacity of less than 70% of regular design loads. Some 10% of all bridgesare in critical condition and need immediate replacement. The type and condi-tion of pavement on the classified network are summarized in Table 2.2, whileTable 2.3 shows the width, type and condition of pavement and raffic volumeson the arterial and collector roads in 1982.

B. Traffic and Road Transport

Motor Vehicle Fleet

2.03 ln 1981, registered motor vehicles totalled about 4.6 millionincluding 3.2 million motorcycles (Table 2.4). The number of vehiclesactually in use is considerably less thar. the number registered; on the basisof recent inspection records, only about 80% of trucks and 60% of busesregistered were on the road. Only about half of the four-wheeled fleet iscars and many are used commercially. During 1969-81 Indonesia's registeredmotor vehicle fleet grew at over 17% per year, four-wheeled vehicles at about13% (Lrucks growing fastest at over 16%), and motorcycles at 21%. Motorcycl:lsare the principal vehicle for private use but many are also in commercial useas taxis, sometimes converted to tricycle configuration. Traffic surveiysindicate that motorcycles represent about one half of motorized traffic inurban areas and about one third in rural areas. The use of minibuses hasincreased very rapidly in recent years for short- and medium-distance passen-ger traffic; in many areas they represent over one-third of motorized traf-fic. Over 90% of trucks have less than 4 tons capacity and carry averageloads of about 3 tons. However, in Java, trucks are somewhat larger than theaverage; trailers are also much more common there than elsewhere in Indonesia,and a noteworthy increase in truck-trailer combinations has been experiencedduring the last years. Virtually all newly registered vehicles are now assem-bled in Indonesia as GOI regulaticns prohibit the import of fully assembledvehicles, except for special equipment. No comprehensive information isavailable on non-motorized road vehicles in Indonesia, including animal-drawncarts, bicyc).es and rickshaws. They are used extensively in the movement ofboth people and goods and in many areas are a major component of traffic. As

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an indication, some 240,000 bicycies and 40,000 rickshaws were registered inthe Province of Yogyakarta in 1978, compared to 57,000 motorized vehicles.

Traffic

2.04 Road traffic has grown rapidly during the last decrde (Table 2.5),especially during 1973-78 when the price of fuel was low. The annual growthrate during 1972-81 was ab,out 14% with an average of over 20% between 1973 and1978 but a more modest rate of just over 4% from 1978 to 1981. Growth ratesvary considerably among provinces, from over 25% in the oil producing provin-ces of Aceh and East Kelimantan to less than 10% in some of the others.Procedures for obtaining traffic information are being refined at present toincrease the accuracy of the data. However, the trends in traffic growth areconfirmed by the growth in fuel consumption and vehicle registration. During1973-81, gasoline and diesel fuel consumption increased by about 10% and 19%p.a., respectively. The slower growth in gasoline consumption is explainedmainly by the shift from gasoline-powered vehicles to diesel vehicles,improved road conditions and the introduction of more fuel-efficient vehi-cles. Due to recent, significant price increases in fuel (para. 1.09), theless optimistic economic outlook as well as plans for improved collection ofroad user charges and possibly increased taxation (para. 2.43), traffic growthin the near future is expected to slow down to a moderate range of 4-7% perannum. The highest traffic flows are on approach roads to the cities ofJakarta, Surabaya and Bandung in Java, and Medan in North Sumatra, wherevolumes range between 15,000 and 40,000 vehicles per day (vpd). On Java,major national roads typically carry 4,000-10,000 vpd, provincial roads 1,000-4,000 vpd, and district roads up to 1,000 vpd; on most other islands, typicalvolumes would be between 600 and 4,000 vpd. In 1981, Java had the highestoverall average volume for national and provincial roads with 4,200 vpd, fol-lowed by Sumatra with 970 vpd, and Sulawesi with 770 vpd.

Road Transport Industry and Its Regulations

2.05 Commercial road transport is estimated to account for 75% of allfreight transportation in Indonesia. MOC vehicle inspection data for 1980covering 158,000 trucks indicate that 50% of these were for hire and 50% werefor own account. Supply ani quality of services are adequate. The Highwayand Road Transport Study (HRTS), carried out under the Fifth Highway Projectby Halcro,w Fox and Associates (UK and Indonesia) and completed in 1982,indicates that there are about 16,000 trucking firms in Indonesia with about60,000 vehicles, and that these firms hold about one third of the marketshare, with own-account private firms accounting for about 45% and the govern-ment fleet for about 25%. Government trucking regulations cover restrictionson operations in urban areas, weight and dimension limitations, licensing forinterprovincial routes on Java, biannual vehicle inspections and tariff ceil-ings. Given little or no barriers to entry into the industry and the degreeof competition that exists in most areas, actual charges are usually below thetariff ceilings.

2.06 Buses carry over 90% of passengers transported and some 77% ofpassenger-kms travelled. Intercity passenger transport is provided primarilyby private bus companies. State-owned bus companies also provide some inter-

urban services, pioneer (perintis) services in low demand, remote areas whereoperations are not commercially viable, as well as most urban bus services.In 1980, there were 276 companies providing interprovincial service on Javawith some 3,t00 buses, and in Sumatra 99 companies with some 1,250 buses;since a total of about 88,000 buses were registered in Indonesia in 1980, thevast majority of bus services are intra-provincial and urban, Governmentregulations cover various aspects of bus transportation, including the legalstructure of companies, route licensing and scheduling, vehicle weight andsize limits, biannual vehicle inspectton, passenger seating, fleet size andtariffs. Tariffs generate adequate revenues for inter-urban bus companies,while intra-urban bus services still require substantial, but decreasing, sub-sidies as fares have been gradually increased over the last three years.

2.07 The HRTS (para. 2.05) has made recommendations for improving theservices and efficiency of the road transport industry through changes in gov-ernment policies regarding vehicle size, axle load limits, route structure,industry organization and management, and improvements in terminal and transitfacilities for freight and passengers. The recommended policy changes havegenerated widespread interest in government, and already regulations onvehicle size, weight and axle loads have been somewhat modified. A landtransport development plan, addressing route structure and terminal and tran-sit facilities, will be prepared by consultants. The Bank, is engaged in acontinuing dialogue with GOI on desirable changes in sector policies and hasagreed, through its economic and sector work, to assist GOI to develop afeasible program for the implementation of such changes.

2.08 Vehicle weights enforcement, the responsibility of MOC's DirectorateGeneral of Land Communications, is unsatisfactory. Enforcement has been com-plicated by confusing legislation governing the excessively restrictive andout-of-date legal axle load limits, ranging from 1.5 tons to 7.0 tons (recent-ly raised to 8.0 tons for some specified routes). The extent of overloadingis substantial; a recent survey at 16 sites on roads having axle load limitsof 3.5, 5.0 and 7.0 tons showed that on average over 30% of heavy vehicleswere overloaded and frequency of overloading was inversely related to thelegal limnits: 10% for 7-ton limit but over 40% for 3.5-ton limit. Axle loadswere, however, moderate with less than 1% of axles exceeding 10 tons, about 5%exceeding 7 tons, and 18% exceeding 5 tons. There are some 170 fixed weigh-bridges and 60 mobile weighbridges in the country; about one-third of allweighbridges are beyond repair. The recorded detection rate of overloading isexceptionally low with an average of three to five violations per 1,000weighilLgs. The main reason for such reported low ratas are illegal feeslevied by weigh station personnel. In order to eliminate these practices, GOIclosed all weighbridges in February 1983. Since then, however, 55 weighingstations have been put back in operation.

2.09 The HRTS includes an analysis of existing vehicle weight legislationand associated enforcement practices. Many problems and shortcomings havebeen identified and recommendations have been formulated for establishinglegal and procedural frameworks for axle load control, but more attentionneeds to be given to relatively easily enforceable measures such as control ofimport and assembly of heavy vehicles to ensure conformity with adequatevehicle weight regulations and restructuring of road user taxes to encourage

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use of vehicles with better configuration such as multiple axles. As initialsteps in this direction, GOI has already issued two decrees - one increasingthe axle load from 7 tons to 8 tons (for some specified routes) and the otherraising vehicle dimensions. Nevertheless, changing the mix of heavy vehicleson the roads is a long-term goal which requires concerted efforts from severaldepartments of GOI - Finance, Home, Trade, Industry, Communications and PublicWorks. During negotiations, GOI re-affirmed that it intends in the meantit:eto enforce vehicle weight regulations as they exist now more rigorously. Toassist in this task, it has initiated a study by the Indonesian Institute ofScience to identify more appropriate equipment (such as electronic, computer-controlled machines) that would minimize chances for abuse and evasion. Atnegotiations, GOI agreed that it would, by December 31, 1984, prepare anaction plan, based on the results of the study, for more effective enforcementof vehicle weight and axle load regulations.

Road Safety

2.10 Road traffic accidents in Indonesia are a growing socio-economicproblem. The limited statistics available show that some 11,000 fatalitieswere reported in 1980 and only limited measures have yet been taken to addressthe road safety problem. GOI has recognized the severity of the problem, andin 1980 MOC commissioned a Highway Safety Program financed under the FifthHighway Project. A related study was carried out by the consultants ArgeINDOC (FRG and Indonesia) and identified numerous inadequacies in laws andregulations regarding vehicles and traffic, and in their enforcement by thepolice and other agencies; highway design and condition; and the treatment ofinjured persons at accident sites and in emergency care facilities. Theconsultants drew up a program for traffic safety improvements which was dulyapproved by MOC.

2.11 Measures for improvement are presently being implemented, including(a) drivers' education and aptitude testing; (b) a traffic safety educationcampaign and an accident prevention program; and (c) a vehicle inspection andtesting system and related safety standards. Further work is also underway toestablish an improved accident reporting and evaluation system; improved traf-fic regulations and their enforcement; upgrading of bus drivers' training andimproved emergency services for injured persons. An Indonesian Highway SafetyCouncil is being formed with representatives from several public and privateinstitutions and organizations interested in road safety and in promotion ofsafety improvements. During supervision of the project, the Bank will monitorthe situation and maintain a dialogue with GOI. If measures underway andplanned do not produce adequate results the Bank would seek to define how itsresources could be usefully employed in future projects to assist GOI inimproving road safety.

C. Highway Management and Operations

Institutional Framework

2.12 Administration of the highway network is carried out by the PublicWorks agencies of the various tiers of government. At the central level, theDirectorate General of Highways (DGH) in the Ministry of Public Works (MPW)

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has primary responsibiLity for the road subsector (Chart 1). Other road agen-cies are provincial public works departments (OPUP) (Chart 2) and kabupatenpublic works departments (DPUK) (Chart 3). The Indonestan Toll Road Corpor-ation, P.T. Jasa Marga, was established in 1978 to deveLop and operate tollroads. Jasa Marga is to finance its construction programs and operations withincome from toll revenues. But few toll facilities have yet been developedand Jasa Marga's income Ls still limited. GOI will, therefore, support JasaMarga during its early years through provision of bridging loans and author-ization to issue bonds in the domestic capital market. DGH is also assistingJasa Marga by secondment of experienced highway managers and engineers.

2.13 DGH is responsible for the design and execut4,n of most major roadworks in Indonesia. It also coordinates the rehabilitation, maintenance andminor construction programs which are carried out by the DPUPs with funds fromthe Central Government, and operates a national highway equipment pool andhighway research and testing facilities. DGH has at its disposal the largestteam of skilled highway professionals and technicians in Indonesia who direct-ly and indirectly influence road activities at all administrative levels.However, there is still considerable lack of highway management capacity,partic-ularly at the provincial and local levels. Furthermore, institutionaland functional responsibilities for highway development and operations are notclearly defined resulting in confusion and overlap between all three levels ofgovernment. A road law was issued in December 1980 and defines in broad termsthe framework for the administration of the highway subsector and establishesoverall functional responsibilities, a road classification system and thebasic technical criteria for road development and maintenance. A criticalstep in establishing a well defined highway management structure is the issueof detailed regulations under the road law. These regulations, setting outthe institutional and functional responsibilities at all levels of government,have already been prepared and approved by most ministries but are awaitingformal Cabinet approval; a draft of the regulations has been reviewed by Bankstaff and found satisfactory. During negotiations assurances were obtainedfrom GOI that the regulations under the road law would be issued by October 1,1984.

2.14 There are 27 DPUPs, one for each of Indonesia's provinces. On thebasis of a recent government regulation, the various provincial public worksfunctions will be handled by separate departments within the DPUPs; for roadsit is t'ne Dinas Bina Marga (DBMs). The new departments are being establishedin the larger provinces where administrative capabilities are already welldeveloped, while in most other provinces staff and equipment continue to beshared for the various functions of the DPUPs until sufficient managerialskills are developed for effective provincial highway management. The decis-ion to develop provincial line agencies in the public works sector is a clearindication of GOI's commitment to reduce central government involvement inregional management matters. The Fourth and Fifth Highway Projects providedassistance in developing highway management skills at the provincial level andthe proposed project continues this assistance. In order to temporarilyovercome the shortcomings in highway management at the provincial level, DGHhas established Regional Betterment Offices (RBOs) which design and supervisehighway betterment schemes. As the betterment program increases in volume andgeographical coverage and as the provincial DBMs develop and gain experience,

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DGH will transfer adrainistration and execution of the program to che DBMs;eventually all betterment works will be administered by the DBMs. The mostadvanced DBMs arc ready to talke over full responsibilities for all bettermentworks in thcir provinces, and the functions and staff of the relevant RB0swill ba transferred to these DBMs shortly.

2.15 Indonesia has some 260 kabupatens (districts) and 55 kotamadyas(incorporated municipalities) and most have their own public works depart-ments, the DPUKs. Under the overall authority of the Directorate General ofRegional Development in MHA, the DPUKs are responsible for the construction,rehabilitation and maintenance of district roads within their confines andmost have their own staff and equipment, although a few are still dependent onthe DPUPs to handle road works. A significant upgrading of personnel andequipment is required to improve DPUK road operations; this is being addressedunder the Rural Roads Development Project (Loan 2083-lND) and other projectsin 50 kabupatens, and further assistance is being proposed in 60 additionalkabupatens under upcoming projects.

Staff and Training

2.16 The steadily increasing volume of work imposes strains on DGH aswell as the DPUPs and DPUKs. DGH's permanent staff has increased by some 10%annually over the last five years while the number of nonpermanent employeeshas more than doubled over this period. Total DGH staff now exceed 5,000,some 2,500 of whom are permanent with about 500 professionals (about 300engineers). Despite substantial efforts to expand and upgrade staff, theshortage of qualified personnel remains an important problem for road author-ities at all levels. Training continues to be a major element in DGH manpowermanagement through both MPW's overall training activities and specific DGHprograms. MPW began providing regular in-service training for staff duringthe mid-1970s. In 1981, MPW's budget for staff training was about US$7.5 mil-lion with about 11% of staff participating in short courses as well as univer-sity-based and overseas training.

2.17 MPW's Training Department, PUSDIKLAT, is responsible for coordina-ting the Ministry's training programs and for providing short courses forcentral, provincial and project staff, while three subunits, corresponding tothe Directorates General (DG), arrange training directly related to their sub-sectors. Training costs are financed mainly through development budgetsallocated to PUSDIKLAT and the DGs, although the DPUPs help finance trainingfor provincial staff. Short- to medium-term formal training is generallyarranged through the Ministry of Education; overseas training is mostly finan-ced and arranged through externally assisted projects. Under the Fifth High-way Project, about 150 DGH professionals and technicians received overseastraining in transportation planning, project management and information sys-tems. Also under that project, and in liaison with the Institute of Techno-logy, Bandung (ITB), post-graduate courses in transportation planning andhighway and traffic engineering are being provided for GOI professionals. Atwo-year extension of these courses will be financed under the proposed proj-ect. The Fifth Highway Project is also providing extensive training for pro-fessionals and staff of eight DPUPs, mostly in the preparation, tendering andmanaging of contracts for betterment works and in the planning, organization

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and execution of road maintenance, including equipment management. Thistraining will be continued and extended under the proposed project.

2.18 Recent manpower planning studies have concluded that, despite theimportance placed on manpower upgrading by MPW and its DGs, the effectivenessof training provided is limited because of: (a) poor coordination and ineffi-ciencies in the planning and management of staff training; (b) inadequatetechnical support for the provision of short, job-related courses for staff,and for related materials development and instructor training; (c) insuffi-cient facilities to cater for the volume of training required by staff; and(d) inadequate experier.ce with the provision of training for smaller contrac-tors. The recent Public Works Manpower Development Project (Loan 2258-IND) isassisting MPW to correct these deficiencies.

Planning

2.19 In the transport sector the planning process varies among modes.Highway planning is the most sophisticated and still most centralized. Themain organization for highway planning is DGH's Directorate of Planning whichperiodically collects data on traffic, including origin-destination surveys.These data are complemented by systematic annual road and bridge conditioninventories which cover all national and provincial roads throughout thecountry. DGH has a set of basic highway development objectives which arederived from GOI's overall planning guidelines for each Repelita program.

2.20 Regional development has always been a significant factor in DGHplanning, but there was limited consideration in its analyses of the role ofother transport modes. In 1979 DGH transferred its long range planning func-tions to the Directorate General of Housing, Building, Planning and UrbanDevelopment (Cipta Karya), one of the DGs in MPW. Cipta Karya has divided thecountry into about 250 planning regions, largely defined around growth centersand road networks. These regions are subdivided into subregions. Cipta Karyahas also assumed responsibility for planning guidelines for expanded GOI assi-stance to kabupaten roads, while planning of their development Ls the respon-sibility of MHA. Planning of toll roads is done by DGH, while Jasa Marga'srole is limited to design, construction and operation.

2.21 Based on the results of surveys covering regional developmentpotential, traffic flows and consequent transport needs, a medium-range plan-ning methodology has been developed which is followed by a priority ranking ofproposed investments, link by link, in the road network. The ranking processforms the basis of a rolling five-year program. DGH has introduced detailedreviews of its rolling five-year program through the RBOs which screen anddesign DGH betterment proposals, subject to review by DGH. Similarly, theDPUPs are increasingly involved in the design of bridge and road rehabilita-tion works. As part of the effort to develop the capabilities of provincialDBMs, DGH will increasingly delegate planning of provincial and district roadsto the regional highway authorities. The proposed project would continue andexpand the assistance in developing planning capabilities at the provinciallevel started under the Fourth and Fifth Highway Projects.

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2.22 The planning methodologies applied by DGH's Directorate of Planningfor natLonal and provincial roads are basisally sound. ReLiable procedureshave been developed for screening aad ranking highway investment proposals.But the parameters used in road investment analyses are derived from data andcriteria which are applied in developed countries where the circumstances aresomewhat different. There is a need co revise engineering-econoaic pararaetersused in DGH's highway planning to b7etter reflect local conditLons. The pro-posed project would assist in reviewing and refining analytical methodologiesand parameters for highway planning.

Budgeting and Accounting

2.23 Budgeting tor the Indonesian highway system is carried out within athree-tiered hierarchy made up of the central government, the provincialgovernments and the kabupaten gorernments (Chart 4). There Is a considerableamount of overlap with respect to expenditures by class of road and the typeof work performed. Most national budget funds are administered at the centraLlevel and flow through DGIH into programs included in DGIH's five-year rollingplans for road development and maintenance. For the development of provinciaLroads there is a special national budget allocation to the provinces which,together with untied regional funds, finance the programs executed by DPUPs.A, similar combination of tied and untied funds, together with a special INPR.ESJalan allocation, finances the DPUK kabupaten road programs. Direct centralbudget support to Jasa Marga is limited to acquisition of right-of-way fortoll roads. The central government provides about 90% of funds for provincialand local road programs. For local governments, fragmented funding from up tofour different programs complicates the planning and budgeting process, as itmultiplies the amount of accounting and reporting requirements.

2.24 DGH's accounting procedures are adequate; several functions arecomputerized, others are being readied for computer application. Internaltraining programs are used on a permanent basis to upgrade and improve thequalifications of bookkeepers and accountants. Accounts are au.dited bothinternally and externally. Internal auditing of DGH is done by the 14W'sInspectorate General which reports directly to the Minister. Projects foraudit are initially selected on a random basis, supplemented by follow-up ofprojects with problems detected earlier. Immediate attention is given to pro-jects flagged by the external auditors. External auditing is done by theState Directorate General of Public Finance Control (State Auditors) of theMOF, and is sound.

Highway Construction

2.25 Responsibility for highway construction lies with DGH'-s Directorateof Construction for national roads and some major works on provinciaL high-ways; with DPUPs for provincial roads and some minor works on national roads;and with DPUKs for kabupaten roaus. The works are executed under a variety ofarrangements. Most typical for minor construction is the use of smaLl con-tractors who supply labor and local materials but use equipment and maantufac-tured materials supplied by the respective road author4ty. Ten years ago,Indonesia had a relatively small number of experienced contracting firms cap-able of executing major road works, and DGH therefore useJ mainly foreign

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contractors for such jobs. Since t'hen local capability has developed so that.there are itow some 810 "A" class (eligible to bid on contracts over US$300,00%!)and 1550 t"Js$t class (eligible to bid on contracts between US$150,000-US$300,000)local conrracting firms in Indonesia, with about one-third directly engaged inroad construction/maintenance activities. In addition, there are many smnallcontractors providing unskilled labor and transportation of materials forlarge foreign and local con ractors as well as for government agencies.

2.26 The DPUPs are responsible for all road works financed under the pro-vincial budgets and some minor works financed under: the central budget. Mostroad construLction/bettermenit works at the provincial level are carried otit bylocal. contractors. With technical assistance under the project, DGH wouLddelegate the technical and administrative authority for execution of allcentral government financed road betterment projects and bridge replacementprojects on national and provincial roads to the most advanced DPUPs and wouldeventually do so for all DPUPs. As the number of qualified personnel neededfor such project execution has generally not been available at the provinciallevel, DGH has provided needed technical assistance to the DPUPs.

2.27 The DPUKs are responsible for works on kabupaten roads. Very littlenew construction is undertaken by the kabupatens. Most of the existing kabu-paten roads were built prior to 1940 and have been inadequately maintained.Works currently undertaken are, therefore, rnainly for rehabilitation andnaintenance of the existing system. A major part of the works is handled byprequxalified local contractors, the prequalification standards are satisfac-tory. The contractors execute the work in accordance with standards set bythe supervising authority, but supervision is often inadequate.

2.28 GOI has long recognized the need to improve the capabiLities oflocal contractors and has arranged to this end short-term lending to small-and rredium-sized firms at concessional rates, and training of contractors'personnel. It continues to encourage foreign contractors to collaborate withlocal firms and to provide them with experienced technical and manageriaLpersonnel. The long-range development of the Indonesian construction industrywas the subject of a study sponsored by the United Nations Industrial Develop-nent Organization (UNIDO) in 1976/77. A related action plan was preparedunder the Fifth Highway Project, followed by technical assistance to theindustry by seconding key technical and managerial personnel, to local firms,The Bank is discussing with GOI further assistance to the industry with thenain focus on restructuring MPW's Construction Industry Development Bureau andiaproved availability of credit and equipment to local con -actors.

Hlighway Maintenance

2.29 Maintenance of national and provincial roads is carried out by theDPUPs, partly with provincial funds and partly with funds supplied by centralgovernment, through the budgets of DGH and the Directorates General of Admini-stration and Regional Auutonomy in MY.A. Maintenance is funded under three bud-getary categories, i.e., maintenance, rehabilitation and support worlks. Inaddition, it is supported through aLlocations by DGH of equiprent, bitumen,steel, and other materials to the DPUPs. The budget category "maintenance"covers only routine work on "stable" roads. While the categories "rehabilita-

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tion" and "support works" are essentially slmilar (equivalent to periodicmaintenance in other highway systems -- toat is, operations repeated -every 5-10years, regraveLing for gravel roads, seals, sorface dressing or overlays forpaved roads), the for,mer applies to "stable" roads while the Latter applies to"unstable" and critical roads which would require substantial improvenents 'obecome maintainable. As the "stable" network is still relatively limited(about 25% of national and provincial roads), the allocations under mainte-nance and rehabilitation are nodeist while those under support works are sub-stantial (Table 2. 10) Because of the advanced state of deterioration oat thebulk of the network these allocations have rot been sufficient to keep theroads in adequate condition.

2.30 DPLJP studies have identified many deficiencies in the organizationand execution of road maintenance which couLd be corrected without large addi-tional budget allocations but would require changes in: (a) organization andpractices of the financial and road authorities at all levels, and (b) exist-ing complex restrictions on the use of funds, supply of material, and deploy-ment of staff. To address these deficiencies, DPUP improvemrient programs,including technical assistance and training, provision of equipment andfinancing of support works, are currently underway in nine provinces, partly,financed under the Fifth Highway Project and the Rural Roads Development Pro-ject, whi^h is also financing preparation of improvement programs in. otherprovinces. rhe proposed project would finance technical assistance to four-teen DPUPs: extension of ongoing assistance to the eight UPUPs rfinanced underthe FifiTh Highway Project and assistance to six additional DPLJPs(para. 3.09). Special emphasis would be on improving efficency and introduc-ing more cost-effective maintenance aethods (such as surface dressing) andtechniques. For the same purposes the proposed project would also financeequipment for surface dressiizg operations of the above DIUPs as well as labo-ratory equipment for design and quality contrc.l of hot-mix bituniioussurfacings.

2.31 During Repelita IV DGII plans to improve some 17,500 km (3,50D km peryear) of national and provincial roads with the aim of having about 80X of thenetwork in a stable and maintainable condition by the end of the decade; dur-ing this period allocations for maintenance and support works are expected toincrease from adout US$92 million in 1984/85 to about US$126 million in1989/90 (Table Z.10), representing allocation of, on average, overUS$2,000 per km per year. 'With this allocation, together with assistanceunder ongoing projects and the assistance planned under the proposed aridfuture projects, regular maintenance of the aational and provincial network isexpected to be fully adequate by the end of the decade.

2.32 The DPUi,s are responsible for maintainirig all kabupaten roads. Insome kabupatens, where the DPUK lacks the organizational capability or wherethere is Po pubLic works organization, the works are handLed by, the DPLJPs.Since most of the present kabupaten road system has a useful life of less thanthree years, the length of roads for maintenence has been very small. TheRural Roads Development Project is addressing road maintenance improvenents in25 kabupatens (and other projects isi another 25 kabupatens) by provision ofequipment, worksliops, technical assistan-e and extensive training; this assi-stance is planned to be expanded under future projects to some 60 ac.ditional

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kabupatens. MI-LA has agreed that at least 15% of all kabupaten road fundswould be allocated to maintenance and that this amount will gradually increaseas required to idequately maintain the kabupaten road systeri.

D. Highway Engineering

2.33 DGH1's design work is the responsibility of the Directorate of Plan-ning. With about 500 employees, including those of the eight RBOs, thisoffice has demonstrated its capacity to produce acceptable designs for a broadrange of highway and bridge construction, and to supervise a large volume ofdesign work by consultants as well. Design work at the provincial and dis-trict levels is the responsibility of the UPUPs and DPUKs respectively, whileDGH is responsible for developing the engineering capabilities of the DPUPsand the DPUKs and, upon request, provides technical assistance to both fordesign of roads and bridges in their programs.

2.34 The B3ank- and UNDP are assisting in the development of the localconsulting industry. A first step in that direction was taken several yearsago when DGH requested expatriate consultants to associate with local firmswhen hired to carry out highway feasibility studies, detailed engineering andconstruction supervision. WhiLe all the RBOs were initially heavily staffedby expatriate consultants in association with local consultants, the number ofexpatriates has decreased in step with increasing reliance on local consul-tants. But shortages of qualified Indonesian highway engineers still persistwhich impedes efforts to further develop highway design capabilities, both inthe highway administration and in the local consulting industry. Assistanceto reduce reliance on foreign consultants is being provided under the FifthHighway Project through: (a) technical assistance to several local consultingfirms by posting foreign experts as regular staff; and (b) a special graduateprogram for highway professionals which has been established at the Instituteof Technology at Bandung (ITB). The University College oa Lonldon is providingexpert assistance in the ongoing start-up phase of the program, which hasproved to be effective. Under the project, continued assistance would be pro-vided to ITB in highway planning and design (para. 3.12).

2.35 The geometric and structural design standards used in Indonesia aretraditional, with 5 classes according to traffic volumes (Table 2.6) and roadfunction. Structural design of pavements is based on the estimated number ofrepetitions of equivalent standard axles. Bridge design standards are forhigh single-axle loads of 20 tons and a gross vehicle weight of 45 tons. Inthe design of betterment works, lower standards are generally used and forpavements a design life of as low as five years has recently been used byDGH. For the project, agreement nas been reached with DGH that bettermentworks be designed for a life of ten years which is considered the technicallyand economically acceptable mninimum. To this end, appropriate standards forpavement design in betterment works have been prepared and agreed (Annex 1).

2.36 Technical specifications for highway construction and materials arelargely based on lNorth American and European standards. Little allowance ismade for the special properties of local construction materials, of whichthere is an abundance. Increased utilization of local construction materialswould enable substantial foreign exchange savings. A particular case in point

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is asbuton, a natural rock asphalt found on the island of Buton, off Sulawesi,where it is quarried by the State Asphalt Corporation (PAN). The potentialfor using asbuton in road construction and maintenance is considerable. Butasbuton, as presently produced, is only marginally adequate in terms ofengineering criteria as road surfacing material. Yet the use of asbuton forroad surfacings has more than doubled over the last few years; it is usedmostly in the form of non-aggregate cold asbuton sheets (NACAS), but sometimesin hot rolled sheet (HRS) overlays which has recently been developed. Theproject would include technical assistance to improve and expand the use ofasbuton in pavement construction and maintenance. The project would alsoprovide for special measures to identify and develop local constructionmaterial sources, and to revise highway technical specifications accordingly.

E. HigEway Development Programs and Financing

2.37 Within the context of each five-year national development plan(Repelita), special provisions are made for highway develo,nent and mainten-ance. Under Repelita I (1969-74), about 12.6% of the development budget wasutilized for highway development. GOI's explicit policy for the highwaysector during the period of Repelita I emphasized rehabilitation and improve-ment of existing infrastructure rather than network expansion. The samestrategy guided the highway program under Repelita II (1974-79), and 10% ofthe overall development budget was allocated to highways. However, duringRepelita Li the budget for highways increased fourfold, due to extra revenueaccruing to GOI after the 1973 oil price increase. Although budget alloca-tions for highways under Repelita III (1979-84) substantially increased ine.bsolute terms over those in Repelita II, the highway sector's share in thetotal development budget declined. Under Repelita III the sector developmentfocus was shifted slightly as GOI put increasing emphasis on rural roads as anexplicit component of its broader rural development strategy. The mainemphasis in the Repelita III highway development program has, however, been onachieving a gradual and balanced improvement of the existing road network.All natioril and provincial roads in critical condition were scheduled forbetterment by 1982/83; this has been largely achieved. By the end ofRepelita III stable roads would have increased to an estimated 12,500 km, orapproximately 25% of the national and provincial road network.

2.38 An analysis of highway expenditure trends in comparison with GDPgrowth and total annual development buidgets is given in Table 2.7. While theshare of expenditures in the transport sector between 1977 and 1981 has de-clined from 9% to 6% as a proportion of total budget expenditure, allocationsto highways remained almost constant at 3%. Central and provincial governmentbudgets for highways are shown in Tables 2.8 and 2.9. Less than 5%, on aver-age, was spent on new road construction. Between 30% and 50% of the budgetswere allocated to highway betterment and bridge replacement; almost 40% of thecentral government highway budgets and around 60% of the provincial highwaybudgets were allocated to rehabilitation and maintenance works. The emphasisand composition of GOI's highway development programs were, and continue to besound.

2.39 There have been significant improvements in roadway conditions as aresult of GOI's highway development programs uiider Repelitas 1, II and III.

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Bftwcon 1974 and 1981, the average Rtoad Corid itiin Index 2/ rose fromn 5.16 to5.42 on national roads and from 4.26 to 5.()2 on provincial roads. InvestmentsLi the highway sector increased froin Rp 209 billion during Repelita I to anestimaated total of ) 2,242 biliton during Repelita Ill. Combined central,provincial and local governmenLt expenditures increased by 18%. annually overtlhe last three years and reached an estiMated totaL of Rp 714 billion in 1982,of which roughly 70% was incurred in developing, maintaining and administeringnational cad provincial roads.

2.40 DGH's target for Repelita TV is to bring 80% of the national andprovincial roads to stable condition and to provide them with bituminous pave-maents, to upgrade all substandard bridges and to replace all bridges which arein critical condition. New road construction proposed is negligible. Theconcept is sound and the estimated total cost of such a program is aboutUS$3 bilLion. Details of DGH's proposed Repelita IV highway development pr-ogramn are shown in Table 2.10. At the same time, substantial funds will berequired to improve the condition of district roads, of 'ihich an extremelyhigh percentage is seriously damaged and virtually impassable. In the lightof increasing limitations on local funds, DGH's plan may be overoptimistic. Aplan has been drawn up as part of HiRTS (para. 2.05), which calls for upgradingthe key routes within the national and provincial roads network so that largerand more efficient trucks than presently allowed can be used. Such truckswould yield substantial economies of scale and reduce the costs of transportand of maintaining roads. BAPPENAS supports this strategy, but DGH attacheshigh priority to equitable provision of a reliable system of national and pro-vincial roads throughout the country. The problem is to reconcile the objec-tives of economic efficiency and regional equity within the framework of limi-ted resources. One solution is to upgrade and strengthen the key routes inthe system and to devise low-cost improvements for others. Equally importantis the need to establish efficient maintenance arrangements for all nationaland provincial roads. The proposed project would promote such a strategy.

2.41 The possible effect of expected shortages of local funds for highwaydevelopment and maintenance could be imitigated through improved participationof road users in highway finanaing. Out of the estimated outlay of Rp 714billion for highway development, maintenance and administration in 1982, thecentral, provincial and local governments accounted for Rp 350 billion (49%),Rp 102 billion (14%) and Rp 262 billion (37%), respectively. Of this total,the central government financed about 90%, provincial governmaents about 6% andlocal governments about 4%. The tax revenues collected frota road usersamounted to only Rp 304 billion - about Rp 137 billion by the central govern-ment, about Rp 166 billion by the provincial governments and Kp 1 billion bythe local governments. On the basis of existing legislation, all three levelsof gove!nment could have collected up to Rp 657 billion; the central govern-ment collected only 54% of potential road user charges, and the provincialgovernments only 42%.

2/ Road Condition Index (RCI).RCI > 7, Good; RCI 5-7, Fair; R.CI 3-5, Damaged;RCI 1-3, Seriously Damaged.

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2.42 Limited cost recovery from road users is aggravated by extremely lowtax contributions by commercial vehicles, such as trucks and buses. Suchvehicles contribute only 2% to the costs of developing and maintaining roadinfrastructure while accounting for almost 80% of road traffic. This is con-trary to common practice in the industrialized countries where taxes are setfor dlfferent categories of vehicles in line with the damage they cause toroad infrastructure. Overall, non-oil road transport taxes in Indonesia areamong the lowest in the developing world. Except for taxes on sedans and, insome cases motorcycles, fixed ownership tax rates on road vehicles have notbeen increased in the last ten years. Improved tax collection from road usersand a realigrned tax structure in accord with internationally accepted prin-ciples would enable GOI to finance highway deveLopment and maintenance costsentirely with revenues from road user charges. Detailed proposals for improv-ing domestic resource mobilization for highway development and maintenancehave been formulated under HRTS (para. 2.05). These proposals were reviewedwith senior officials in the Ministries of Finance and Communications duringproject appraisal. A consensus was reached that there is a need for restruc-turing the road user taxati.on systerA and to improve tax collection from suchusers to increase the road users' contributions to financing the costs ofhighway development and maintenance,

2.43 As part of its continuing efforts to raise more resources fordevelopment, however, the GOI has recently taken several measures to increasethe contributions from road users. One is the increase in fuel prices, inLhree steps, with the most recent in January 1984, resulting in both petroland diesel prices now being above international prices. The second is a majorreform of the tax law, completed in December 1983 and to be effective fromJuly 1, 1984, which has brought about substantial. increases in the taxes onroad vehicles and related items. The new tax reform law al6o simpilified theprocedure for application of rates, eliminating or reducing the 6eope forevasion and "nderpayment. For example, the new value-added tax is a uniform10%, compared with numerous rates for sales taxes which have been abolished.In addition, there is a luxury sales tax of 20% on private passenger cars and10% on motorcycles. Third, tolls on toll roads and toll bridges have alsobeen increased by over 100% recently. It is expected that the impact of thesechanges will significantly increase road user contributions to Governmentrevenues both through rate increases and through more efficient collection.Furthermore, the fleet of Government vehicles for staff use has been elimi-nated except for some vehicles for field operations. This in itself hasreduced the number of vehicles which were exempt from taxes and fees. As forfees collected by Provincial Governments, altbough the rates are prescribed bythe Ministry of HoTe Affairs, the responsibilis.; for collection and admini-stration rests with the Provincial Governments. It was, therefore, agreedduring negotiations that: as a first step, the impact of changes to datewould be assessed by April 1, 1985, as part of GOI's land transport develop-ment plan study; and the second step would be prompt preparation of a follow-up action plan to ensure that road user contributions would be sufficient tocover the coGts of road use, and that relative user conributions would notresult in distortions among transport modes or among different kinds ofvehicles.

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P. Previous Bank Financed Highway ProJects

2.44 The Bank Group las made seven loans and credits totalling US$514.2mtllion for r.iacl development in tndonesla. The Cirst hlighiway Project ($28million, Credit 154-INn), 1969) helped restore communicAtions in Indonesiaafter a long period of neglect, by providing equipinent and materials for reha-bilitation of about 3,000 km of roads. hle Second Highway Pro.ject ($34 mil-lion, Credit 260-IND, 1971) priniarily helped rebu2ild a section oF the TransSumatra Highway in an area which is a major site for .ransmigration develop-ment tinder the Second Transmigration Project (Loan. 1707-IND). The Third High-way Project ($14 million, Credit 388-TND, 1973) helped reconstruct a road to anew irrigation area in Sulawesi. It also Included an important training com-ponent to set up a nationwide training system for highway personnel. TheSecond Highway Project was completed in 1977 and the Third in 1978. As de-tailed in the Project Performance Audit Report (PPAR), SecMRl-4, January 6,1981, the second project had relatively minor delays and cost overruns, whilethe third had significant de'.ays (because of mobilization problems in a veryremote area and unusually wet weather) and increased construction costs; theobjectives of both projects were achieved.

2.45 The Fourth Highway Proiect ($130 million, Loan 1236-IND, 1976)provided for: (a) the establishment of four regional RBOs; (b) a large andcomplex program for the betterment of existing roads; (c) assistance tostrengthen D-H; (d) studies of other institutions concerned with highwayp,,such as provincial and kabupaten public works agencies, and consultants andcontractors engaged in highway works; and (e) studies of highway laws, roaduser charges, and vehicle weights and dimensions regulations. The project wassuccessfully completed in June 1983, after 30 months' delay.

2.46 The ongoing Fifth Highway Project (US$123.2 million, Loan 1696-IND,1979) includes: (a) components of DGH's bridge replacement program; (b) roadconstruction and maintenance works executed by eight provincial public worksorganizations; (c) measures to study and improve the highway institutions insome provincial governments; (d) upgrading road maintenance; and (e) technicalassistance to strengthen Indonesian highway consultants and contractors.There have been start-up delays due to: (a) underestimation at appraisal oftime needed to process program-type components and numerous consultancy con-tracts; (b) over-centralization of DGH; (c) shifting,of senior staff withinDCGI; and (d) chiange of development guidelines under Repelita III. Overall,the project is about 69% complete, and there is a reasonable chance of com-pleting the project with a total delay of about one year.

2.47 The Jakarta-Cikampek Highway Project (US$85 million, Loan 2049-IND,1981) provides financing for the construction of a new toll road betweenJakarta and Cikampek, and for upgrading of the existing road between bothcities. Furthermore, the project assists in establishing Jasa Marge.. TheRuwait Fund for Arab Economic Development is coifinar.ring this project with aconcessionary loan of US$60 million equivalent. The project has sufferedserious start-up delays because of budget constraints and institutionalchanges. Most problems have been resolved, and construction contracts havebeen let, substantially below appraisal estimates. Project completion isprojected for December 1989, about two years behind schedule.

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2.48 The Rural Roads Development Project (US$100 million, Loan 2083-IND,1982) provides financing for rural roads corstruction and maintenance in25 kabupatens. This project has suffered early implementation problemsbecause of institutional weaknesses within MHA and its provincial branches.Local budget constraints have aggra-.ated the early problems. An action pro-gram has been drawn up to complete the project by December 1986, as originallyplanned.

2.49 The common problems of start-up delays, extending through the pro-curement and contracting period and the slow rate of disbursements experiencedunder previous and ongoing projects, would be addressed under the proposedproject (paras. 3.29 and 3.31).

III. THE PROJECT

A. Objectives

3.01 The project would assist GOI to pursue its highway development stra-tegy of extensive restoration and upgrading of the national and provincialroad networks. The project would also contribute to improving planning proce-dures, technical standards and implementation arrangements for highway better-ment and maintenance. Special emphasis would be on furthering efficient high-way management, and on effective arrangements for highway maintenance anddevelopment financing through increased road user charges.

B. Project Scope

3.02 The project would consist of:

(a) Civil Works: Betterment of some 2,000 km of intercity trunk routes,consisting of major national and provincial roads, including re-placement of some 2,500 m and repair of some 2,000 m of associatedbridges; upgrading/rehabi.itation of some 1,000 km of key roads,including replacement of some 1,500 m and repair of some 1,200 m ofassociated bridges; and replacement of 4,000 m of defective, highpriority bridges on other important roads;

(b) Equipment: Procurement of equipment for surface dressing oper-ations; and laboratory equipment for the design and quality controlof hot-mix bituminous surfacing and for quality control of thenatural rock asphalt used in road construction and maintenance; and

(c) Technical Assistance: Engagement of local and foreign consultantsto design and supervise major road works; to improve highwaymanagement at the provincial level and develop cost-effective roadconstruction and maintenance techniques and procedures; to Improveroad investment planning; to further develop training programs forhighway professionals at the Institutue of Technology in Bandung; tosurvey and map local road building materials; and to improve theproduction and quality of asbuton.

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C. Project Description

Betterment of Trunk Roads

3.03 The 2,000 km of betterment works will include some 45-50 sections ofseriousl.y deteriorated two-lane roads with lengths varying between 30 and75 km, in various parts of the country, selected on the basis of economic cri-teria (see Chapter IV). Works will be carried out on existing alignment un-less realignment of short sections (less than one km) is required to eliminateknown safety hazards. Traffic volumes vary between 1,200 and 15,000 vpd.During construction, minimum inconvenience to traffic will be achieved byhaving works carried out in one lane over a relatively short section at atime, while the two-way traffic alternately uses the other lane. Works willbe designed for a 10 year lifetime in accordance with minimum betterment stan-dards agreed with GOI during project preparation (Annex 1) and would generallycomprise, as required, improvement of side and cross drainage and repair,widening and strengthening of pavements and shoulders. Some 20% of pavementsneed widening and all pavements will be strengthened by bituminous overlays,with thicknesses varying between 3 and 15 cm, (7 and 20 cm where a regulatingcourse is required to correct uneven surface and/or pavement camber) designedon the basis of existing condition (measured deflection under load) and traf-fic volume and loadings projected for the next tenl years.

3.04 While pavements are accurately designed and quantities defined, thesimple nature of other elements (improvement of draivage and widening andstrengthening of shoulders) and the cost of surveying make detailed design andquantification uneconomical and contracts will contain only provisional quan-tities based on random samples and averages from completed contracts. Designof these elements will be carried out on site as work progresses with survey-ing, setting-out and measuring of quantities done con-urrently. As the costof these elements is generally only 10-20% of total cost of works, even rela-tively wide variations in quantities will have little effect on final costs.The works will be carried out in two phases; the first phase program of1,235 km has been agreed with GO (Table 3.1 and maps IBRD 17533, 17534 and17535) and during negotiations GOI agreed that DGH would submit by October 1,1984 for Bank review and approval its proposal for the latter phase of thebetterment works program.

Upgrading Rehabilitation of Key Roads

3.05 This component comprises upgrading and rehabilitation of key roads,complement.ng the intercity trunk routes, with emphasis on linking inlandroutes and ports and on establishing continuity in the network. Included areover 60 sections, of lengths from 2 to 40 km, of two lane roads in variousparts of the country where: (a) pavement deterioration is still moderate andcan be corrected by relatively simple measures such as bituminous surfacedressing or a single 3 cm hot rolled sheet (HRS) overlay (excluding regulatingcourse); or (b) where low cost pavements, such as gravel and single bituminoussurface dressing, need upgrading by surface dressing or an HRS overlay. Traf-fic volumes vary between 100 and 15,000 vpd. Although designed and executedas described above for the trunk routes, works will be of much smaller scale

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and average cost per km will only be about half of that of the trunk roads.Selection of works is based on economic criteria; the first year program,1984/85, of about 534 km has been agreed (Table 3.2 and Maps IBRD 17533, 17534and 17535) and during negotiations GOI agreed that DGH would submit byDecerAber 31, 1984 and 1985, for Bank review and approval its proposals for thefiscal years 1985/86 and 1986/87 respectively for the programs of upgradingand rehabilitation of key roads.

Bridge Replacement Program

3.06 The bridge program has three main components:

(a) repair of some 2,000 m and replacement of some 2,500 m of bridges onthe roads included in the betterment of intercity trunk routes(para. 3.03);

(b) repair of some 1,200 m and replacement of some 1,500 m of bridges onthe roads included in the upgrading of key roads (para. 3.05); and

(c) replacement of some 4,000 m of bridges on trunk routes not ot'.erwiseincluded in the betterment program but needed to retain or establishcontinuity in the road network.

Bridges included in the program are creating traffic bottlenecks for one ormore of the following reasons: severe load limitations because of low initialdesign loads or advanced structural deterioration; width restrictions; andhazardous hydrological conditions. Bridges will be designed by DGH with someassistance from foreign and local consultants to agreed standards with 20 Eon-nes maximum axle loads and 45 tonnes gross vehicle weights. Most of the newbridges will have prefabricated steel superstructures that have proved veryeconomical and appropriate under Indonesian circumstances. Selection ofbridges for replacement is based on economic criteria and the first phaseconstruction program of 39 bridges with total length of 2,150 m and the secondphase of 59 bridges of 2,230 m length, have been agreed (Table 3.3 and mapsIBRD 17533, 17534 and 17535); DGHl has submitted a tentative program of94 bridges of 4,170 m length from which some 3,600 m will be selected for thethird and last phase and during negotiations GOI agreed that, by October 1,1984, DGH would submit its firm proposal for the last phase of the bridgereplacement program for Bank review and approval.

Equipment

3.07 The proposed project would provide equipment: (a) for surfacedressing operations to improve the efficiency of road maintenance in the four-teen provinces that will be provided with technical assistance under theproject (para. 3.09); and (b) for laboratories to improve the design andquality control of hot-mix bituminous surfacings and quality control of thenatural rock asphalt, asbuton. The laboratory equipment would be allocatedto: (i) DPMJ's main laboratory in Bandung for pavement and materialsresearch; (ii) about 25 DPUP laboratories, to complement existing equipment,and to a new laboratory on the island of Buton (where asbuton is quarried bythe State Asphalt Corporation (PAN)), in order to ensure, under DPMJ's

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direction, adequate quality control of asbuton; and (iii) about 20 mobilelaboratories for asphalt mixing centers (AMCs) for the design and continuouscontrol of production. The list of equipment has been agreed with GOI.

Technical Assistance

3.08 General. Recruitment and training of professionals by DGH and theDPUPs lags behind the increasing demand from expanding operations, so a sig-nificant number of consultants will have to be employed over the near andmedium-terms. The GOI's general policy is to use foreign consultants onlywhen local consultants do not possess the required capabilities. Although aneffective group of local consultants is emerging, their expertise and numberare yet limited and it is apparent that road authorities will need to continueto use foreign consultants for some time. The Bank is actively assisting DGHin reducing its reliance on foreign consultants (para. 2.34).

3.09 DPUPs: In addition to the DBMs of the eight DPUPs presently beingprovided assistance under the Fifth Highway Project and the one under theRural Roads Project, DGH plans to strengthen six more DPUPs. A program forthis assistance is being prepared by consultants (ENEX of New Zealand)financed under the Rural Roads Project, and the proposed project would financetechnical assistance to the DPUPs to develop the capabilities of their DBMsand, in liaison with the affiliated RBOs, to facilitate the gradual transferof technical and administrative responsibilities for major roadworks in DGH'sfive-year program from the central to the provincial level. Assistance wouldbe provided to fourteen DPUPs: extension of ongoing assistance to the eightDPUPs (North and West Sumatra, Bengkulu, West, Central and East Java, Yogya-karta and Bali) financed under the Fifth Highway Project and to six additionalDPUPs (Aceh, Jambi, Lampung, South Sumatra and North and South Sulawesi). Inaddition to assisting in improving the present activities of the DPUPs,including the design and supervision of upgrading/rehabilitation works, thetechnical assistance would specifically, and in close cooperation with DPMJ,focus on the introduction of inexpensive surfacing such as single and doublebituminous dressing, improving the use of asbuton, the development of newuses, improving the operations of the existing asphalt mixing centers (AMCs)and the establishing of new AMCs.

3.10 For the fourteen DPUPs involved, some 900 man-months in total wouldbe required for a duration of about two and a half years: 500 men-months offoreign and 400 man-months of local consultants' services. Terms of referencefor the services were agreed at negotiations.

3.11 DGH Planning Directorate: DGH is using computer models for planninginvestments in road construction, betterment and maintenance - mainly theAustralian GENMERRI model and a set of sub-models developed by consultantsunder the Fifth Highway Project. Although these models are helpful, they userelationships and parameters derived from experience in countries with roadbuilding methods and climatic conditions quite different from Indonesia. DGHis starting to develop parameters based on local conditions to improve itsplanning work. To complete this work, the project will provide technicalassistance to DGH's Planning Directorate in the form of two experts for atotal of about 40 man-months. Terms of reference were agreed at negotiations.

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3.12 Post-Graduate Training in Transport Planning and Engineering Underthe Fifth highway Project and in liaison with the Institute of TechnologyBandung (ITB), a post graduate training course in development planning andhighway engineering was inaugurated in September 1982, using temporary accom-modation in Bandung, ard with 9 lecturers provided through University College,London (UCL). The scope of the course has since been extended with theaddition of two lecturers to cover transport planning and traffic engineer-ing. The arrangement under the Fifth Highway Protect extends to August, 1984,but it is unlikely that the Indonesian counterpart lecturers and administra-tors will be ready to assume full responsibility for running the coursesatisfactorily by then. The project will therefore finance an extension ofthe entire course for two years, until August 1986, requiring about 270 roan-months.

3.13 The course is being run in unsuitable and poorly located premisesborrowed from DGH in Bandung. Assurances were obtained from GOI at negotia-tions for the provision of permanent accommodatlon not later than August 31,1985.

3.14 Survey of Road Building Materials. Like many developing countries,Indonesia has resources of road making materials which do not conform to nor-mally accepted standards, but which can be used to advantage in road build-ing. Such materials are often found only in certain localities and experiencein their use is rarely codified. A start has been made in doing this in theDPMJ, but work has been ad hoc and very slow. A comprehensive survey, wouldbe very valuable in making effective use of locally available materials inroad construction and maintenance.

3.15 The project would provide technical assistance to help DPMJ plan andprogram the surveying and testing of road building materials in the whole ofIndonesia and to start the survey in one or two areas of the country wherematerials are scirce. To this end, and to supplement DPMl's expert staff, theproject would provide some 120 man-months of specialist local consultants aswell as an experienced expatriate project coordinator on a part time basis forabout 12 man-months during a period of two years. Terms of reference wereagreed at negotiations.

3.16 Quality of Asbuton. To improve the quality of asbuton (para. 2.36),the project will provide technical assistance and overseas training to PAN'stechnical and managerial staff on quarry and transport operations and account-ing procedures, as well as for DPMJ's staff for quality control. The assis-tance, estimated at some 80 man-months, would extend for about two years.Terms of reference were agreed at negotiations.

Consulting Services

3.17 Supervision of Construction. Supervision of betterment works andbridge replacewent works will be carried out by local consulting firms thatwill strengthen their staff by foreign experts as required. Due to the widelyscattered locations the cost of supervising the construction of road andbridgeworks is somewhat higher than usual for such works; it is estimated thatthe 2,000 km of betterment works will be let in some 50 contracts and that the

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180-190 bridges to be constructed would be let in 40-50 contracts. It isestimated that supervision of these 90-100 contracts would require 480 man-months of foreign and 2,100 man-months of local consultants' services during aperiod of about four and a half years. Terms of reference were agreed atnegotiations.

D. Cost Estimates

3.18 The total financing required for the project, including contingencyallowances and the capitalized front end fee on the Bank loan is estimated atRp 385.0 billion or US$385.0 million, while estimated3 7otal project cost isUS$384.4 million (including US$10.0 million for taxes- ). Total costincludes: (a) physical contingencies of 10% of base cost on all items excepttechnical assistance for post-graduate training, materials survey and qualitycontrol of asbuton; and (b) price contingencies calculated on proJected localcost increases of 12% during 1984, 10% during 1985, 1986 and 1987 and 9.0%during 1988 and on foreign cost increases of 3.0% in 1984, 7.5% during 1985and 9.0% during following three years. Foreign exchange component is esti-mated at US$239.4 million or 62% of total cost. Detailed cost estimates aregiven in Table 3.4 and summarized below:

3/ Includes US$9.5 milLion of identifiable taxes on civil works andUS$0.5 million on services of foreign consuLtants.

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Y.

Local Foreign Total foreign-US$ million or Rp billion- exchange

Civil WorksBetterment 64.0 96.0 160.0 60Upgrading 15.0 28.0 43.0 65Bridge replacements 14.6 41.4 56.0 74

Subtotal 93.6 165.4 259.0 64

Equipment 0.2 3.8 4.0 95

Technical Assistance 3.2 8.9 12.1 74

Consulting Services 5.2 10.4 15.6 67

Total Base Costs 102.2 188.5 290.7 65

ContingenciesPhysical 10.1 18.4 28.5 65Price 32.7 32.5 65.2 50

Subtotal 42.8 50.9 93.7 54

Tota.lProject Cost 145.0 239.4 384.4 62

Front-end fee on Bank loan - 0.6 0.6

Total Financing Required 145.0 240.0 385.0 62

3.19 The base costs are estimated as of early 1984 and have been derivedas follows:

(a) Civil Works: The estimates are based on updated bid prices and costof force account works from 1982 as well as on mid-1983 bid pricesfor a few similar works. They were further refined by data providedboth by DGH and by consultants employed under the Fifth lighw'ayProject (N.D. Lea and Associates of Canada ard L. Berger of USA forroadworks and Kampsax of Denmark for bridgeworRs). Betterment ofintercity trunk routes is estimated to cost on average US$80, 000 perkm; upgrading/rehabilitation of key roads is estimiated to costUS$43,000 per km reflecting lower standards and smaller scale ,froadworks than for trunk routes as well as exclusion of depreeiationof equipment provided under previous highway projects; bridgereplacement is estimated to cost on average US$7,000 pcr nu.

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(b) Equipment: Cost of equipment Eor surface dressing operations and Eorthe laboratories is based on recent quotations updated as requiredto early 1984 price levels.

(c) ConsuLtancy Services: A summary of the required consultancyservices is tabulated below:

Foretgn Local Baseconsultants consultants Total cost

man-months -- … - US$ million

For DPUPs/DBMi 500 400 9O0 7.0For DG's PlanningDirectorate 40 - 40 0.6

For ITB's graduate courses 270 - 270 3.5For materials survey 12 120 132 0.6For quality controlof asbuton 40 40 80 0.4

For supervision ofconstruction 480 2,100 Z,580 15.6

Total 1,342 2,660 4,002 27.7

The average man-month cost is US$2,500 for local consuLtants and US$11,000 forforeign consultants and includes salaries, fees, international travel, subsis-tence and other applicable charges. These costs are in line with recentexperience in Indonesia. In addition, the contract costs include local trans-portation costs, staff and operating expenses of local offices, report print-ing and other minor expenses.

E. Financing

3.20 The proposed Bank loan of US$240.0 million would finance the foreignexchange component (including US$0.6 million for the capitalized front-endfee) or about 62% of total project cost (64% of total cost excluding taxces andduties). The GOI would finance the remaining US$145.0 million equivalent, orabout 38% of the total estimated project cost, through annual budgetary allo-cations to DGH.

F. Implementation and Procurement

3.21 DGHi will be solely responsible for project execution. The detailsof departmental responsibilities (para 2.12) and of the planned transfer ofsome responsibilities to the provincial road authorities will not be firmlyknown until the regulations under the road Law have been issued (para. 2.13).Based on experience gained under previous highway projects, the implementationcapacity of DGH and the DPUPs, all asststed by qualified consultants, is

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considered adequate to execL1te t4e project. Project implementation period isexpected to be about four and a 1half years.

3.22 Procurement arrangements are summarized in the table below:

Procurement Mslethod TotalProject element ICB LCB Other cost

… (LVS Million)-… …

Road betterment 218.8 - - 218.8(119.7) _ _ (119.7)

Bridge substructures 27.6 7..- 35.4(14.3) (4.2) _ (18.5)

Bridge materials 34.7 - - 34.7(31.9) _ _ (31.9)

Road upgrading/rehabUlttation - 22.3 33.7 56.0

(12.0) (18.1) (31.1)Equtpment 4.5 4.5

(4.2) - - (4.2)

Technical assistance andconsulting services - - 35.0 35.0

- - (35.0) (35.0)

Totals 285.6 30.1 68.7 384.4(170.1) (16.2) (53.1) (239.4)

Note: Figures include physicaL and price concingencies and those inparentheses are the respective amounts firanced by the Bank.

Civil works for the betterment of trunk routes, incLuding bridge repair(US$218.8 million), would be procured under contracts through ICB inaccordance with the brank's Guidelines for Procure-aent. As mosL bettermentcontracts wilL be of the order of US$0.5-3.0 nillion, whenever feasiblecontracts will be grouped into US$4-5 million packages in order to encouragecompetition. Contractors would be eligible to bid on one or several contractswithin a package as well as on one or more packages, but eligibility for totalamount of contract award is determined through the prequalificationprocedures. Tendering would be carrted out in two phases; tendering for thefirst phase, amounting to about 55% of the value of all betterment contractsunder the project, started in January 1984 and bids will be submitted in earlyApril 1984 with implementatio.i extending from about September 1984 to March1987. The second phase wouLd be tendered in mid-1984 with implenentationextending from about March 1985 throagh September 1988.

3.23 About 80% of all bridge substructures (US$27.6 million) will leprocured through ICB and whenever feasible contracts will be grouped intoUS$4-5 miltion packages. Because of isolated locations and small size of

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works, substructures of about 45 identified bridges (US$7.8 million) with atotal base price (contract price) of US$6.0 million will be procured throughlocal competitive bidding; this is satisfactory as foreign contractors are notexpected to show interest in bidding for these works. As most of the newbridges have been designed with prefabricated steel superstructures and onpile foundations of steel pipes and new culverts have been designed of corru-gated metal pipes, it has been agreed, in order to take advantage of economiesof scale, that DCG procure all such superstructures, piles and culvertsthrough ICB in one or more lots (US$34.7 million) and provide them as ready-made components (materials) to the contractors for erection and finaliza-tion. Tendering of bridge substructures would be carried out in threephases: tendering for the first phase (about 25% of total contract value)will start in late March 1984; for the second phase (about 30%) of total con-tract value), in September 1984; and for the third phase (about 45% of totalcontract value), in April 1985. Construction period would extend from aboutOctober 1984 through January 1988.

3.24 Apart from bituminous surface dressing and HRS overlays, civil worksfor the upgrading and rehabilitation of key roads and associated bridgerepairing (US$22.3 million) will be carried out under contracts awarded fol-lowing LCB procedures satisfactory to the Bank; contract size will generallybe of the order of US$0.1 - 0.5 million. Two secondary, but very important,objE-tives of the-project are: (a) to introduce (and gain experience in) theuse of inexpensive pavement surfacings such as single and double bituminoussurface dressings and (b) to pursue further the use of asbuton in overlays andto develop new uses for asbuton. In order to achieve these objectives, aswell as to utiLize fully the capacity of -quipment (some of which has beenprovided under previous highway projects) for the production of bituminousoverlays for periodic maintenance, bituminous surface dressing and hotmixoverlays (US$33.7 million) would be carried out by force account by the DPUPsand the AMCs. Supported by technical assistance under the project, the DPUPswil' be responsible for the introduction and development of the bituminoussurface dressings and the AMCs for developing the HRS overlays as the AMCshave been specifically equipped to use asbuton in the HRS production. Whilethe AMCs are established basically for maintenance works their present capa-city would be sufficient to carry out the upgrading works during the next 2-3 years though on a declining basis as they become gradually more involved inmaintenance. Implementation of this component would start in April 1984 andextend through about May 1987.

3.25 An average of about 5,000 workers are expected to be directlyemployed on road and bridgeworks over a period of some four years. In carry-ing out the works, contractors are free to choose their own methods, equipmentand labor, subject to works complying with specifications.

3.26 Bidding documents for civil works contracts estimated to costUS$2.0 million equivalent or more (some 60% of all works financed under theproject) would be subject to the Bank's prior review and approval; other docu-ments would be available for review, together with bid evaluation, after awardof contracts.

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3.27 Equipment, including spare parts (US$4.5 million), wilL be procuredfollowing ICB procedures and aLl documents will be subject to Balnlk's reviewand approval prior to invitation for tender. Delivery of equipmentt is expect-ed to take place in the first half of 1985.

3.28 Consultants would be appointed in accordance with Bank guidelinesand on terms and conditions satisfactory to the Bank, and GOI's assurance tothis effect was obtained at negotiations.

3.29 Implementation delays have been common in previ,ous projects, partlybecause monitoring of prcgress and tlagging of problems have been inadequate.In order to improve implementation DGH has reorganized, and is in the processof adequately staffing, its project liaison unit which is responsible formonitoring, evaluation and reporting.

3.30 A detailed implementation schedule (Annex 2) was agreed with GOt atnegotiations.

G. Disbursements

3.31 The loan funds would be disbursed on the following basis:

(a) Civil Works: 63% ut expenditures on road and bridge works;

(b) Equipment and Materials: 100% of foreign expenditures for directlyimported items; or 100% of local expenditures (ex factory), exclud-ing identifiable duties and taxes, of locaIlt manufactured items; or65% of expenditures of locally procured items;

(c) Technical Assistance and Consulting services: 100% of expenditures.

Expenditures for civil works to be constructed under force account (improve-ments and rehabilitation of key roads) would be reimbursed on the basis ofstatements of expenditure (SOE). Supporting documents will be retained by DGHfor inspection by Bank staff during project supervision missLons. The sche-dule of estimated disbursements is presented in Taole 3.5. It is expectedthat implementation will improve and enable completion of loan disbursement inabout five years because: (i) tender documents have been standardized andtendering procedures have been streamlined to facilitate early tendering andsigning of contracts (bids for first phase betterment works will be submittedin early April 1984 and for bridge replacements, equipment and materials inmid- to late-May 1984); (ii) contracts are smaller than in previous projects(maximum construction period of 2.5 years); (iii) the practice of withholdingretention money during the one-year maintenance period is expected to bereplaced with a bond or guarantee of equal value; and (iv) DGH's project liai-son unit is being strengthened (para. 3.29). This assessment is supported byrecent experience under the Fifth Highway Project which, without the benefitof early procurement and preparatory activities, is now expected to becompleted in about six years.

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H. Accounts, Auditing and Reporting

3.32 DGH will keep separate accounts for each project component. Atnegotiations assurances were obtained that following the regular internal MPWaudit of the project accounts, including documentation for SOEs, the accountswill be audited by independent auditors acceptable to the BaTik and that theirdetailed audit report be submitted to the Bank within nine months after theend of each fiscal year. DGH would prepare a detailed project completionreport and submit it to the Bank not later than six months after the closingdate.

I. Status of Preparation

3.33 Feasibility studies have been carried out by DGH's Planning Direc-torate with the assistance of the RBO consultants who have also carried outengineering of the road links during the last few years while bridges havebeen designed by DGH. DGH is employing the consultants N.D. Lea & Associates(Canada) to review and revise the engineering on the basis of the agreedbetterment design standards (Annex l) and Kampsax (Denmark) is revising bridgedesign. These reviews were completed for the first phase road links andbridges in mid December 1983. Similar reviews for the second phase would becompleted by May 1984. Contract documents have been standardized and agreedand tendering of first phase works started in earLy January 1984.

3.34 DGH has completed its preliminary selection of roads for a five-yearprogram for the upgrading/rehabilitation of key roads and a first year programof 534 km has been agreed.

J. Environmental Aspects

3.35 The project is not expected to have any adverse environmentaleffects. Works are mostly improvements of roads and bridges on existingalignment with minimal requirements for additional land; works would includeimproved side and cross drainage, widening and strengthening of shoulders andpavements, overlays on old pavements and the provision of bituminous surfa-cings on gravel roads, all of which would improve conditions along the roadthrough reducing dust and noise and the possibility of flooding.

IV. ECONOMIC EVALUATION

A. General

4.01 The project would assist DGH in pursuing its basic highway develop-ment strategy for Repelita IV, i.e. to restore and upgrade national and pro-vincial roads, such that 80% of the network is in stable condition by the endof the plan period. In parallel, arrangements would be instituted for improv-ed maintenance of the restored network. Given that about 75% of the nationaland provincial roads network is still in unstable condition, rendering roadtransport unreliable and expensive, the project would yield substantialreturns. Furthermore, the project would ease GOI's budgetary problems, in

- 34 -

that it would initiate measures to increase road user participation for hLgh-way development and maintenance financing, which will lead to reduced govern-ment budget requirements. At the same time, the project would contribute tofurther improvements in highway management at all government levels. Thethree principal components of the project that are amenable to conventionaleconomic evaluatLon as reflected in rates of return are: (a) the bettermentprogram for intercity trunk roads; (b) upgrading and rehabilitation of dete-riorated key roads; and (c) the bridge replacement program.

B. Betterment Program

4.02 The Indonesian procedures for selecting inter-city trunk routes forimprovement or betterment have evolved over the past several years, and nowconsist of a logical series of steps initiated by the Screening FeasibilityOffice (SFO) of the Rural Road Engineering subdirectorate in Jakarta, withengineering support from the RB3s. Road links are passed through three suc-cessive evaluations, with links meeting a minimum economic test (a 15% return)approved for the next stage of engineering work, with the third and finalevaluation based on final engineering desigrn and resultant cost estimates.

4.03 The series of steps are as follows:

(a) the RBOs propose an initial project list, based on their fieldobservations, road inventory information, and traffic counts. Thisis passed through an initial SF0/RBO screening based on standardizedcharts relating expected economic returns to traffic counts and toaverage betterment costs in different provinces and for differenttypes of road works;

(b) for those showing a 15% or higher return, the RBOs prepare aSufficiency Engineering Proposal (SZP) showing traffic counts andforecasts as well as cost estimates based on preliminary engineer-ing. SF0 then makes a second evaluation using its Generalized Modelfor the Evaluation of Rural Road Improvements (Genmerri) developedin 1968 in Australia and introduced in Indonesian road planningunder the Bank-financed Fourth Highway Project. All proposals notmeeting the cutoff rate of return are deferred;

(c) RBOs then undertake detailed engineering for the approved links andthe evaluation is repeated with the cost estimates based on detailedengineering. Though benefit streams are not usually revised, sensi-tivity tests are made for significant uncertainty ranges; and

(d) with the advice of Cipta Karya, the Planning Directorate of DGHreviews and revises the priority rankings established by the SF0model to reflect regional economic and social objectives. Theprojected availability of funds is also taken into consideration atthis stage.

4.04 The Genmerri model is based mainly on benefits from road improve-ments arising from: (a) road user savings (arising in the form of vehicleoperating cost and travel time savings) from reduced congestion; and (b) road

- 35 -

user and to some extent, road maintenance cost savings from improved road sur-face (Tables 4.1 - 4.3). The model, however, tends to overstate benefits fromreduced congestion and to understate benefits from improved road surface. Thenet result is that the screening process tends to be biased in favor of roadswittl high volumes of traffic. In oLlTer words, the program determined throughthis screening process would tend to give priority to the busier roads eventhough they may be in fair condition, with only the subjective regionaldevelopment screen as a safety net to bring into the program important roadsin poor condition (with relatively low traffic volumes) (e.g., port connec-tions or inter-regional links).

4.05 During appraisal Bank and SF0 staff, therefore, agreed to correctthe above bias through modifying inputs to the wodel for screening and, basedthereon, selecting the initial batch of links for the first phase program ofbetterment works to be financed under this project; this was done by adding tothe SFO-estimated vehicle operating c-st savings, additional savings attribu-table to surface improvements over r- above those assumed in the Genmerrimodel. A proposal for technical assistance to revise and update the evalua-tion model is included in the project. The technical ascistance experts willalso develop a system for regular updating of the model.

C. Upgrading/Rehabilitation Program

4.06 Screening for works to be undertaker. in the upgrading program -essentially rehabilitation or overlays - is based on f4yst year benefitanalysis to ensure a minimum first-year return of 15%.' Priorities areestablished according to a physical index relating traffic and expected sur-face improvement (proxy for benefits) to measures of width and thickness ofthe overlay (proxy for costs). The selection process is also designed toensure efficient equipment utilization and a (rolling) three-year program foreach province. As a final check, the physical indices are translated intosimplified first year benefit measures using a standardized vehiclecost/road/surface relationship and average cost estimates per km of road.Considering the large number of small sections ..nvolved, the procedure isacceptable.

D. Bridge Replacement Program

4.07 To facilitate setting priorities for replacement oI bridges in cri-tical condition, a standardized economic test of timiTag has been establishedbased on the number of medium/heavy truck crossings, subject to a minimum ofone such crossing per meter of bridge length per day. It is estimated thatthis volume of traffic usually produces a minimum 15% first year return. Theeconomic rationale for bridge replacement is based on enabling cobimercialvehicles, mainly trucks, to carry a full load wi.th lower costs per ton-kminstead of a partial load on unsafe or weak bridges. The new bridges aredesigned to accept unrestricted crossing by trucks of up to 45 tons gross

4/ Even with modest traffic growth, this will produce a minimum economicreturn of 10% over a 10-year design life.

- 36 -

weight. For this program also the first year return is an appropriate screen-ing test since, with a very large number of bridges negoing replacement, theprincipal question relates to the timing of the works.-

E. Economic Returns and Risks

4.08 Except for the minor reservations noted on the inter-city roadsevaluation model, the selection procedures for all components are sensible andacceptable. For the first year program, economic returns estimated by DGHi arehigh, as may be seen below:

Range from lowest to highestEconomic return First year return

_ _ ( %) (- -) … _-_-_-

Road Betterment -Inter-city links 23-100 21-42

Upgrading and Rehabili-tation 33 (minimum) 35-100+

Bridge Replacement 15 (minimum) 15% minimum (based ona range of 3-300 inheavy truck crossingsper day per meter ofbridge length)

The expected returns remain above acceptable threshold levels over wide rangesof variations in costs and benefits (Table 4.4), The selection procedures,therefore, assure low risks of misinvestment.

4.09 Sensitivity tests made on a selection of proposed road bettermentlinks have, for example, allowed simultaneous variations in cost and benefitstreams to reflect the following uncertainties:

(a) Constructior. costs: The test analysis assumed that constructioncosts would on average be 25% above the estimate, but that they mayalso vary up to 50%;

(b) Maintenance costst The tests assume that maintenance costs willvary about 20% above RBO estimates;

5/ The average life of the new bridges is 30 years.

- 37 -

(c) Time savings: SFO currenty values time saved through reduced roadcongestion at the average Indonesian wage rate. Although it is notknown whether this over-estimates or under-estimates the averageincome of road users, behavioral studies in several countries haveshown that road users are willing to pay rates of only 25-50% ofwages to save travel time. It is possible, therefore, that the SFOaDproach overstates the value of time savings, and the test assumesvariations in this benefit down to about 30% of the SFO estimates;

(d) Vehicle Operating Cost Savings: These are based on an annual surveyof vehicle operating costs based on border prices, with a 25% vari-ation from the SFO estimates; and

(e) Surface improvement: The test downplays the importance of theroughness adjustment factor, by assuming values as low as 20% ofbase values used.

In all tests, adjustments were also made to SFO estimates to reflect estimatedpost-devaluation relative price changes.

4.10 If one allows all the variations to occur simultaneously accordingto the probability distribution found in a test of 300 samples, the followingresults emerge:

(i) The test results generally mirror the pattern of the Genmerriestimates, with the ranking of investments being similar;

(ii) The results change very little in terms of priority ranking;

(iii) the probability that under the worst combination of circumstanceseconomic returns will fall below 15% is low: in 14 links tested itis only 7%; and

(iv) first year returns reflecting the appropriate timing of works are inall cases adequate, i.e. at least 15%.

Some sample results of the test for the betterment program are shown inTable 4.4. Data files and detailed results are in the project file.

4.11 The favorable results for the betterment program in particularindicate that SFO could simplify the screening process by proceeding straightto final engineering for any link which at the initial evaluation produces areturn that -emains well above 15% for large cost variations (say +50%). Thiswould save considerable work in the RBOs in preparing SEPs.

4.12 Overall, the programs of highway betterment, bridge replacement andupgrading/rehabilitation works to be financed under this project are expectedto show returns of above 30%.

4.13 A principal risk in most construction projects is the adverse effectof delays in execution on economic viability. In the proposed project, suchrisks are considered minimal: the bidding process for the first phase programis well under way and advance preparations for the second phase program are

- 38 -

also well in hand. In any case, for betterment works of the kind constitutingthe core of the project, one or two years' delay of works will enhance theeconomic return, while an extension of the period of execution would onlymarginally affect the economic return. Furthermore, the estimated returns inthis case are sufficiently attractive that there is no risk of any of thecomponents turning out to be economically unjustified due to any delays thatcould be reasonably foreseen.

4.14 Road betterment works to be financed under the project will be con-structed to engineering standards consistent with a ten year design life whichis considered the technically and economically acceptable minimum. However,during the last few years DGH has in several cases designed and constructedpavements for lives as short as five years resulting in premature deteriora-tion and loss of investment. There is some risk in that, if restrictions onbudget allocations become severe, DGH may be tempted to maintain physicaltargets for the length of road works to be completed and lower engineeringstandards. In order to protect the investments under the project, assuranceswere obtained from GOI during negotiations that design standards agreed andused for betterment works of the first-phase program (Annex 1) will be adheredto for works of later phases.

F. Beneficiaries

4.15 By lowering transport costs, improvements to Indonesia's main inter-city highway networLk will directly benefit the modern commercial and indus-trial sectors of the economy, through reducing costs for delivery of inputs,inland distribution of imports, collection and movement of products for exportand for the domestic market. They will also improve labor mobility and pro-.mote passenger movements. Eventually and indirectly the reduction in trans-Port costs will benefit producers and consumers alike by favorable trends inthe prices the former can get for their products and the latter have to payfor their purchases. Roadside service activities will grow to serve theadditional traffic induced by lower transport costs, providing additionalemployment and income.

V. AGREEMENTS AND RECOMMENDATIONS

5.01 During negotiations agreement was reached with GOI:

(a) on preparing by December 31, 1984 an action plan for more effectiveenforcement of vehicle weight and axle load regulations(para. 2.09);

(b) (l) on an assessment by GOI of the impact of recent changes in taxlaw and related matters as they affect road user charges, to becompleted by April 1, 1985; and (ii) based on such assessment, onthe preparation of a follow-up action plan to ensure that road usercontributions are both adequate on the whole and appropriate asbetween different kinds of vehicles (para. 2.43);

- 39 -

(c) that DGH will submit: (i) by October 1, 1984 for Bank review andapproval its proposal for the latter phase of the betterment worksprogram (para. 3.04); (ii) by December 31, 1984 and 1985, for Bankreview and approval its proposals for the fiscal years 1985/86 and1986/87 respectively for the p:ograms of upgrading and rehabilita-tion of key roads (para. 3.05); and (iii) by October 1, 1984, forBank review and approval its firm proposal for the last phase of thebridge replacement program (para. 3.06); and

(d) on an implementation schedule for the project (para. 3.30).

5.02 During negotiations assurances were obtained from GOI:

(a) that the regulations under the road law will be issued by October 1,1984 (para. 2.13);

(b) that adequate permanent accommodation for the graduate courses intransport planning and engineering be provided by August 31, 1985(para. 3.13);

(c) that consultants will be employed on terms and conditions satisfac-tory to the Bank (para. 3.28);

(d) that a detailed audit report on project accounts, including SOEs,will be submitted to the Bank annually within nine months after theend of each fiscal year (para. 3.32); and

(e) that the design standards agreed and used for betterment works ofthe first phase program will be adhered to for works of later phases(paras. 3.03 and 4.14).

5.03 On the basis of the above agreements, the project is suitable for aloan of US$240.0 million equivalent to the Republic of Indonesia for 20 years,including a grace period of five years, at the standard variable rate.

INDONESIAHIGHWAY BETTERMENT PROJECTStandards for Bettermenl Works

MlnImumTraffic Width of Povement Condiflon

Present AADT Pavement/Shoukder Visual Deflection Typical Oterav SgectcaIon'

Mooerate 3 cm Hot Polled Sheet (HPS) 3

nCi = 6 15 mm ner jssIry to reUCe roUghness I 3 -1200-3000

10 Year Design 4.5/05 3 cmHRS H P1x1l0P Eoutralent o,- Stondard Axles Bad High 5 cm Asphalt Treated Base (ATB)

On very weak xovements additional base d 4crushed rock for equivalent as required i

3 cm HR or 5 cm Asphaltic Concrete (AC) io*. o o 3Fair ModerateRCI - 6 1.5 mm 5 cm ATB where needed to reduce roughness 5

10 Year Design . 0/1.0 33X106 Eqiaet3 cm HRS or 5 cm AC ° °3 30 Equivalenr 0 ~ 1Stondard Axles 3ad High S cm ATB .

PCI = 4 3 0 mm 8 cm or more as reouired. of crushed stone ot 4 to 8 -

equlvalant

. ~~~~~~~4 cmAC or 4cm HR8 oSD<: 4Fair Moderate cRCI 6 15mm 5 cm ATB where needed to reduce roughness 5 .

8000-20000

10 Year Design: 7.011_.8x106 EquivalentStandard Axles 4 cm AC or 4 crn- HRS 4

. r2-d H30m@ h Im Scm ATB 5

8 cm or mare as required, ot crushed stone or 4 to 8-

eciuiva'ont

NotreDesgn ot Asphaltic Concrete n accordance with ACODI methodology (see The Design of Asphaltic Concrete Oveioys on Penetration MocadomPavements in Indonesia. J.B. Cox. 3rd REAAA Conference. 1081): design otf lot Polled Sheet in occordonce with 14PODI methodology Z(sea Optimising Pavement Overlay Desions in Indoneso. C.P. Come. 4th REAM Conlerence. 1983)

World Bank-25763-

ANNEK 2- 41 - Page I of 3

INIDONESIA.

HIGHWAY BETTERMEWT PROJECT

Project Implementation Schedule

Project Item ImplementationStart Complete

I. Civil Works

A. Betterment Works

1. Preparation, review and approval of tenderdocuments - Phase 1 11/01/82 12/15/83

Phase II 05/15/83 06115/842. Agreement with Bank on Phase I works 06/01/83 12120/83

?hase II works 12/15/83 06/30/843. Prequalification of contractors 08/31/83 12/20/834. Tendering of Phase 1 01/06/84 04/05/845. Recelve and open bids for Phase I, bid

evaluation, MPW, SEKNEG and Bank approvaland award of contracts 04/05/84 08/20/84

6. Construction of Phase I 09/20/84 03/20/877. Tendering of Phase II 07/02/84 1C/04/848. Receive and open bids for Phase II, bid

evaluation, MPW, SEKNEG and 3ank approvaland award of contracts 10/04/84 02/18/85

9. Construction of Phase II 03/18/85 09/30/88

B. Upgrading/Rehabilitation Works

1. Agreement with Bank on 1984/85 program 09/16/83 12/20/832. Implementation of 1984/85 program by

force account and contracts 04/D1/84 05/31/853. Agreement with Bank on 1985/86 program 12/31/84 02128/854. Implementation of 1985/86 program by

force account and contracts 04/01/85 05/31/865. Agreement with Bank otl 19B6/87 program 12/31/85 02/28/866. Implementation of 1986/87 program by

force account and contracts 04/01/86 05/31/87

C. Bridge Replacement Program

1. Agreement with Bank on works in Phase I & II 06/10/83 12/20/83Phase III works 12/15/83 09/30/84

2. Preparation, review and approval of tenderdocuments 06/10/83 03/15/84

3. Tendering of Phase 1 03/26/84 05/26/84

ANNEX 2- 42 - Page 2 oE 3

4, Receive and open bids, bid evaluation, MPW,SEKINEG and Bank approval and award ofcontract 05/26/84 09/30/84

5. Construction o'. Phase I 10/31(84 03/31/B76. Tendering of Phase II 09/10184 11/10/847, Receive and open bids, bid evaluation, MPW

SEKNEG and Bank approval and award ofcontracts 11/1.1/84 03/31/85

8. Construction of Phase II 04/30/85 10/31/879. Tendering of Phase III 04/15/85 06/15/8510. Receive and open bids, bid evaluation, M4PW,

SEK'NEG and Bank approval and award ofcontracts 06/16/85 1/31/85

11. Construction of Phase III 11/30/85 05/31/88

II. Procurement of Equipment for Surface Dressing and QualityControl of Hot-Mix Bituminous Surfacing and 'Natural RockAsphalt (Asbuton)

1. Prepare list of equipment and bid documents,obtain Bank approval and advertise 02/15/84 03/31/84

2. Tendering, receive and evaluate bids, MPW,SEKNEG and Bank approval and awaTd ofcontracts 03/31/84 09/30/84

3. Delivery 04/01/85 08/01/85

III. Consulting Services

A. Supervision of I.A and C_/

1. TOR and shortlist agreed with Bank 12/01/83 01/15/842. Invitation, submission and evaluation of

proposals, MPW and Bank approval andnegotiations 01/31/84 06/21/84

3. MPW and Bank approval, contract awardsand Bappenas approval 06/21/84 08/18/84

4. Supervision 08/18/84 09/30/88

B. Technical Assistance for DPUPs/DBMS.L/

1. TOR and shortlist agreed with Bank 12/01/83 02115/842. Invitation, submission and evaluation of

proposals, MPW and Bank approval andnegotiations 03/16/R4 07/21/84

1/ If, because of GOI's cumbersome review and approval procedures, contractscannot be signed in time for expected start of works (August 1984 forbetterment and bridge replacement programs, April 1984 for upgrading andrehabilitation program), DGH intends to extend, as required, existingcontracts financed under the Fifth Highway Project.

ANNEX 2-43 - Page 3 of 3

3. nPW and Bank approval, contract awardsand Bappenas approval 07/21/84 09/18/84

4. Implementation 09/30/84 09/30/87

C. Technical Assistance for DCH's Planning Directorate

1. TOR and shortlist agreed with Bank 12/01/83 03/20/842. Invitation, submission and evaluation of

proposals, MPW and Bank approval andnegotiations 03/31/84 06/30/84

3. MPW and Bank approval, contract awardsand Bappenas approval 06/30/84 09/30/84

4. Implementation 10/31/84 10/31/86

D. Technical Assistance for Survey of RoadBuilding Materials

1. TOR and shortlist agreed with Bank 12/01/83 04/30/842. Invitation, submission and evaluation of

proposals, MPW and Bank approval andnegotiations 05/01/84 08/31/84

3. MPW and Bank approval, contract awardsand Bappenas approval 09/01/84 11/30/84

4. Implementatlon 01/01/85 12131/86

E. Technical Assistance for Quality Controlof Asbuton (DPMJ and PAV)

1. TOR and shortlist agreed with Bank 01/15/84 03/20/842. Invitation, submission and evaluation of

proposals, MPW and Bank approval andnegotiations 04/01/84 06/30/84

3. MPW and Bank approval, contract awardsand Bappenas approval 07/01/84 08/31/84

4. Implementation 10/01/84 09/30/86

March 1984

-44-ANNEX 3Page 1 of 3

INDOt4ESTA

MIHGiWAY BETTERMENT PROJECr

Selected Documents and Data AvailabLe in the ProjectFile

A. Selected Reports and Studies on the Sector

1. Poernomosidi Hadjisarosa, Road Network Development Related to RegionalDevelopment, Ministry of Public Works, Indonesia, June 1981.

2. Directorate of Regional and City Planning, A Perspective of Transportand Land Use Policies for Indonesia, Ministry of Public Works, January24, 1983.

3. Republic of Indonesia, Serial: Area Development Mechanism, Jakarta,undated.

4. Ministry of Public Works, Charts of Traffic Coutits by Province,Jakarta, April 1983 (in Bahasa).

5. Ministry of Public Works, Inventory of Road Condition3 and RtoadSurfaces, Jakarta, March 1982 (in Bahasa).

6. Organization Chart, Provincial Department of Public Wdrks in Lampung(unofficial).

7. Road Classification Criteria, Indonesia, 1982/83.

8. Director General of Iiighways, Review of che Highway Sector, May 1983.

9. John B. Cox, An Overview of the Indonesian Highway Systen, Jakarta,1983.

10. Director General of Highways, Development Expenditures underRepelita I-III, May 1983.

11. a. Ministry of Public Works, APBN Programs, RepeLita IV, 80% stablenetwork target and 100% stable network target, September 1983(revised, in Bahasa).

b. Ministry of Public Works,Targets for Repelita IV, 1984/8-1988/89,Jakarta, May 1983 (in Bahasa).

ANNEX 345 - Page 2 of 3

B. Selected Documents Reports and Studies Related to the Project

I. a, Directorate General of Highways, Road Betterment, EconomicEvaluation of Design for Highway VI Road Project,December 15, 1983.

b. Directorate General of Highways, Road Betterment, Phase I UrbanSections, November 1983.

2. Directorate General of Highways, Bridge Replacement Program HighwayVI, Packages I, II and III, December 1983.

3. ND Lea and Associates Ltd,, Proposals for IBRD supported AM4CBetterment Program in Highway Six Loan; November 1983.

4. Mr. R.S. Millard, Properties and Uses of Natural Rock Asphalt -Asbuton.

5. Mr. R. S. Millard, Road Building Strategy.

6. Directorate General of Highways, Special Report on Vehicle OperatingCost Survey, Screening Feasibility Office, March 1983 (in Bahasa).

7. Directorate General of Highways, Modified Vehicle Cost Model (MODVCM)Coding Instructions, Screening Feasibility office, December 1982.

8. ND Lea and Associates, Ltd., et. al., Design Report Java RoadsImprovement Project, Volume II, AppendixB, "A Summary and Review ofthe Genmerri Model", Republic of Intconesia, August 1980.

9. Halcrow Fox and Associates, et. al., Highway and Road TransportConsultancy Project, Final Reports:

Volume IA and B: Vehicle Weights and Dimensions Implementation Study,

Volume 2: Road User Charges Implementation Study,

Volume 3: Vehicle Operating Cost Model Study,

Volume 4: Road Transport Industry Study, and

Volume 5: Road and Traffic Legislation Study.

10. C.P. Corne, ME, MIE (Australian), Optimizing Pavement Overlay Designsin Indonesia, August 1983.

11. Mr. D.B, Willmott, BE, DipTP, MIZIE, MIHE, Indonesia's HighwayBetterment Program; the Highway Engineer, December 1982.

12. Directorate General of Highways, Law No. 13/1980 on Roads (in Bahasaand English).

- 46 - ANNEX 3Page 3 of 3

13. Directorate General of Highways, NACAS, Review of Current UseProperties and Performance and Recommendations for Improvement andDevelopment N.D. Lea & Associates Louis Berger International,July 1983.

14. Project Brief, Issues Paper, and Decision Memo of 05/10/83, 07/07/83and 07/25/83 respectively.

15. General Procurement Notice; Development Forum, August 21, 1983.

16. Regulations to the Road Law (draft).

C. Selected Working Papers

1. Programming, Budgeting and Auditing in the Transport Sector.

2. INDONESIA: Highway Proposals for IGGI, June 10, 1983.

3. INDONESIA: Selection and Screening Processes, Road and BridgeImprovements, May 26, 1983.

4. Rough Guess at the Effect of Including Road Roughness in the SelectionCriterion for Road for RoadLinks for Betterment, May 30, 1983.

5. INDONESIA, Road Betterment Screening, Interim Adjustment for RoadRoughness Effects, June 5, 1983.

6. Computer Files and Runs for Risk Analysis, Road Betterment Test Links,September 1983.

7. PAN, Structure and Operations, October 1983.

8. DGH, TOR for Management Assistance Consultancy Services for DBMs.

9. DGH, TOR for Technical Assistance to Directorate of Planning - Biptan.

10. DGH, TOR for UCL's Assistance.

11. DGH, TOR for Inventory of Road Construction Materials in Indonesia.

12. DGH, TOR for Technical Assistance Consultancy Services to PAN.

13. DGH, TOR for Supervision of Road Works.

14. DGH, TOR for Supervision of Bridge Works.

15. Procurement Unit (PAS/CPS) comments (07/15/83) on Issues Paper and Mr.Stern's comments (08/01/83) on Decision Memo.

16. Cost Estimates.

INDONESIA

HIGHWAY BETTERMENT PROJECT

LENGTHS OF ROADS BY ADMINISTRATIVE CATEGORIES, 1982

Popu-Distribution lation Vehicle Land

National Provincial District Total N + P District 1980 fleet areaRegion tN) Km (P) KM KM Km % % X X %

Java 1,633 6,782 29,068 37,483 18.4 28.7 61.9 69.9 6.9Sumatra 3,673 12,605 28,767 45,045 35.5 28.2 19.0 18.0 24.7Sulawesi 2,473 5,311 19,100 26,884 16.9 18.8 7.1 5.2 9.9Kalimantan 1,228 4,296 5,807 11,331 12.1 5.7 4.6 3.6 28.1Other Is. 2,802 5,004 18,949 26,755 17.0 18.6 7.6 3.3 30.5

Total 11,809 33,998 101,691 147,498 100.0 100.0 100.0 100.0 100.0

Percent 8.0 23.0 69.0 100.0

Source; Data Satistik Jalan, 1982, Direktorit Jenderal Bina M4argaNote: Other islands include Bali, Nu.lx Tenggara, Maluku, Irian Jaya and East Timor.

March 1984

t-,3

Table 2.2- 48 -

INDONESI A

HIGIIWAY BETTERMENT PROJECT

Summary of the Type and Condition of Pavements

PavementType/Condition National Provincial District Overall

----------------------- M -----------------------

TypePaved 75 55 34 42Gravel 23 23 23 23Earth 2 22 43 35

Total 100 100 100 100

Condition /aStable condition 43 30 25 28Unstable condition 53 65 51 54Critical condition 4 5 24 18

Total 100 100 100 100

/a Stable indicates a roadway condition that by regular mairntenance can bekept adequate for the type and volime of traffic using the road whileunstable indicates a rough pavement condition with high vehicle operatingcosts and requiring frequent attantion to prevent further deterioration,and critical condition indicates badly deteriorated and often inpassableroads.

Source: National and Provincial Roads: Data Statistik Jalan, 1982.District Roads: Statistical Yearbook of Indonesia, 1982.

M4arch 1984

- 49 - Table 2.3

INDONESIA

HIGHWAY BETTERMENT PROJECT

Condition of and Traffic on Arterial and Collector Roads in March 1982(km)

Pavement Less than 400- 1500- 3000- OverWidth Type Condition 200 200-400 1500 3000 6000 6000 Total(in m) -… --------------------- (vpd) --------------------

km km km km km km km

> 6 Asphaltic Good 103.3 0.0 48.9 398.2 171.0 525.4 1,246.8Concrete Fair 1.9 0.0 18.5 70.2 58.6 170.2 319.3

Bad 0.0 0.0 1.0 3.9 5.0 4.0 13.9

4.5/6 Asphaltic Good 116.0 67.2 1,151.9 980.6 448.2 200.9 2,964.8Concrete Fair 16.0 25.0 116.9 215.6 59.1 11.5 444.1

Bad 5.0 0.0 4.0 20.0 1.6 0.0 30.6

<4.5 Asphaltic Good 133.0 406.8 608.9 46.0 30.1 15.5 1,240.4Concrete Fair 93.0 35.0 341.6 31.0 55.0 7.6 563.2

Bad 37.0 0.0 60.0 2.0 1.1 0.0 100.1

>4.5 Macadam Good 162.7 100.1 1,074.0 718.4 383.8 133.7 2,572.6Fair 194.1 196.1 1,083.7 926.6 654.8 322.1 3,378.4Bad 73.0 42.0 231.7 184.4 41.6 26.1 598.8

<4.5 Macadam Good 466.1 429.8 880.0 141.3 99.7 8.0 2,204.9Fair 1,489.3 735.5 1,974.7 261.6 187.3 69.6 4,717.9Bad 382.7 138.0 532.4 76.6 18.4 1.5 1,149.5

>4.5 Sealing Good 6.4 21.0 112.1 125.9 102.5 202.3 570.2Fair 40.7 117.5 406.4 373.8 295.2 145.1 1,378.7Bad 21.2 13.0 78.6 20.2 23.2 0.0 156.2

04.5 Sealing Good 135.0 16.0 97.0 78.8 24.8 94.2 445.8Fair 237.7 100.1 390.3 168.6 61.8 44.1 1,002.6Bad 223.9 16.0 102.5 14.0 4.2 0.0 360.6

<4.5 Gravel Good 1,757.0 370.0 479.3 0.0 0.0 4.5 2,610.8Fair 3,213.7 1,249.0 1,053.9 61.7 10.5 5.8 5,594.6Bad 1,347.4 405.2 401.6 21.0 8.2 2.0 2,185.4

<4.5 Earth Good 342.4 19.0 18.0 0.0 5.7 0.3 385.3Fair 932.1 127.8 61.0 0.0 0.3 0.0 1,121.2Bad 756.2 167.9 40.2 1.0 2.4 0.0 967.5

Totals Good 3,221.7 1,429.9 4,470.1 2,489.0 1,266.0 1,184.8 14,061.5Fair 6,219.4 2,586.0 5,446.9 2,109.1 1,382.6 775.8 18,519.8Bad 2,846.3 782.1 1,452.0 343.1 105.6 33.6 5,562.7

Grand Total 12,287.4 4,798.0 11,369.0 4,941.2 2,754.2 1,994.2 38 144.0

Source: DCH, .ebruary 1983.

March 1984

- 50 - Table 2.4

INDONESIA

HIGIHWAY BETTERMENT PROJECT

Veliicles Registered, 1969-81 /a

TotalTotal Motor- motorized

Year Cars /b Trucks Buses /c 4-wheel cycles /d vehicles

1969 212,124 95,660 20,497 328,281 336,597 664,878197C 238,924 102,975 23,541 365,440 440,005 805,4451971 256,988 112,877 22,562 392,427 510,764 903,1911972 277,210 131,175 26,488 434,873 615,220 1,050,0931973 307,739 144,060 30,368 482,167 720,056 1,202,2231974 337,789 166,457 31,439 535,685 944,734 1,480,4191975 383,661 196,416 35,103 614,580 1,191,771 1,806,3511976 420,488 222,310 39,840 682,638 1,417,228 2,099,8601977 497,335 278,979 48,089 806,403 1,704,964 2,511,3671978 520,652 311,048 55,548 887,248 1,898,424 2,785,6721979 577,345 383,645 69,545 1,030,538 2,266,183 3,296,7211980 639,464 473,831 86,284 1,199,579 2,671,978 3,871,5571981 719,336 589,439 113,509 1,422,282 3,207,499 4,629,783

Average Annual Growth (percent)

1969-1981 10.8 16.3 15.3 13.0 20.7 17.61969-1974 9.8 11.7 8.9 10.3 22.9 17.41974-1979 11.2 18.1 17.1 14.0 19.1 17.41979-1981 11.6 24.0 27.7 17.5 19.0 18.5

/a Includes all registered vehicles including non-operational ones, exceptmilitary or diplomatic vehicles.

/b Includes taxis and jeep (4-wheel drive)

/c Includes minibuses.

/d Includes motorcycles, motor scooters and motorized bicycles.

Sources: Directorate of Traffic, Police Headquarters.

March 1984

-51 -ITable 2.5

INLXNESIA

HIGHW BErrEM P8aJECr

Traffic Grcwth by Provincze

Average Averageaounded ADrgrowth weighted

1973 1974 1975 1976 1977 1978 1979 1980 1981 rate (%) by kmProvince (ADT) (1973-81) (1981)

Aceh 166 201 226 163 585 519 847 1,058 1,145 27.3 835Riau 244 241 367 367 503 616 685 651 773 15.5 1,147West Sumatra 393 434 513 450 580 664 846 1,125 1,271 15.8 1,133North Sumtra 746 767 1,095 929 1,226 1,386 2,258 2,386 2,303 15.1 520South Su&ntra 167 200 297 314 389 498 563 662 836 22.2 342Jambi 82 99 112 99 148 202 243 246 300 17.6 420BeroiQAu 141 104 103 163 305 306 295 359 453 14.0 918Lampung 993 1,193 1,260 1,4% 2,015 2,453 2,212 2,367 2,517 12.3 1,398

Total Sunatra 430 471 585 572 810 974 1,247 1,491 1,272 14.5 972

West Java 2,222 3,769 3,475 4,333 4,908 4,901 5,109 5,638 5,914 13.0 5,540Central Java 1,137 1,210 1,717 2,187 2,067 2,830 3,001 3,752 3,957 16.8 3,847Yogyakarta 1,942 - 2,811 3,491 4,267 5,186 5,977 3,947 3,365 9.5 3,619East Java 1,509 1,635 1,926 2,313 2,605 3,063 3,263 3,640 3,930 12.7 3,437

Total Java 1,596 2,006 2,269 2,808 3,224 3,502 3,706 4,102 4,364 13.4 4,208

West Kalimantan 181 190 240 526 867 476 566 525 1,912 24.6 710East Kalimantan 159 249 255 635 724 349 670 1,129 1,029 26.2 262South Kalimasntan 212 396 489 519 507 758 597 724 1,177 23.84 511Central Kimantan - - - - - - 67 350 367 - 788

Total K-Limantan 192 295 359 550 658 590 570 710 1,124 24.7 586

North Sulawesi 750 910 995 884 1,297 1,385 1,778 2,256 2,216 14.5 1,309Central Slawesi 111 140 118 120 538 327 276 381 391 18.0 368South Sulawesi 324 447 369 645 817 1,182 1,293 1,353 1,443 20.5 1,175Sulawesi Tenggara 288 114 142 - 299 - 526 314 4% 7.8 225

Total &dLawesi 422 544 513 660 914 1,140 1,276 1,296 1,331 15.4 765

Bali 765 870 996 1,548 1,526 1,641 1,662 2,171 2,844 24.4 1,963NMB 513 597 548 806 836 791 775 948 1,105 10.0 633NIT 74 85 72 77 182 200 272 260 280 18.0 228Hleuku - - 1,218 2,360 1,166 - 1,398 1,593 2,521 12.9 591Irian Jaya - - - - - - - - - - -

Total Other lsl. - - - - - - - - - - -

Total Indlonesia 850 1,165 1,287 1 596 1,897 2,171 2,240 2,336 2,441 14.1 1,473

AnnLal growth rate (Z) - 37.1 10.4 24.0 18.9 14.4 3.2 4.2 4.5 - -

Nbtes:1. Historical averages deternined as sum of four-wheel mtorized traffic (car, bus, trudk) divided by

numnber of count stations.2. Method overestinates average traffic levels in less developed provinces (see last cclunn) because

traffic count stations are located along links closer to settled areas with high traffic volLxnes.Hbwever, they slhuld give a good idea of traffic grcwth.

Source: Coptiled by M.D. Lea Associates from various sources, March 1983.

Harch 1984

INDONESIA

HIGHWAY BETTERMENT PROJECT

DGH Geometric Design Standards /a

Primary Highways Secondary Highways Feeder RoadsI h~~~~~~1A 11B ~llC IIMoun- Moun- Moun- Moun- Moun-

Terrain Flat Rolling tainous Flat Rolling tainous Flat Rolling tainous Flat Rolling tainous Flat Rolling tainous

Average daily 20,000 6,000-20,000 1,500-8,000 <2,000 <1,000traffic (ADT) inPassenger car units

Design speed (km/h) 120 100 80 100 80 60 80 60 40 60 40 30 60 40 30

Minimum right of way 60 60 60 40 40 40 30 30 30 30 30 30 20 20 20(m)

No. of lanes xPavement width (m) Minimum 4 x 3.75 2x3.50 or 4x3.50 2x3.50 2x3.50 3.50-6.00/c

Minimum median width 10% of roadway 1.5/b(ms)

Shoulder width (m) 3.50 3.00 3.00 3.00 2.50 2.50 3.00 2.50 2.50 2.50 1.50 1.00 1.50-2.50/c

Pavement cross slope 22 2% 2% 32 42

Shoulder cross slope 4% 4% 6% 6% 67

Surfacing Asphaltic Concrete (AC) AC /d /d /d(hot mix)

Maxtauum superelevation 10% 10% 10% 10% 10%

Minimum horizontal 560 350 210 350 210 115 210 115 50 115 50 30 115 50 30radius (m)

Maximum grade 3% 5% 6Z 4% 6% 7% 5% 7% 8% 6% 8% 10% 6% 8% 12%

/a Pavement structure is designed in accordance with DGH's "A Guide for Pavement Design (Felxible)", 1974, No. 41PO/BM, and for a design life ofabout ten years, unless another design life would be warranted. Bridges are designed in accordance with OGH's "Standard Loading Specification forHighway Bridges", 12/1970.

/b Only for 4-lane highways.7E According to condition.7Td Surfacing selected can vary from single bituminous surface treatment to asphaltic concrete on the basis of economic considerations. Generally

roads with the above design standards can be varied flexibly to suit special conditions of traffic, land use or terrain.

Source: Directorate General of Highways, Standard Document No. 13/1970.

March 1984

1NDOIiJSIP.

HIGHWAY BETTERMEN' PROJECT

Gross Domstic Product asd Cettral Government Budget !1penditures by Type, 1977-81(Rp billion)

AverageActual annual I change distribution of total budgetGDP, budget expenditures 1977 1978 1979 1980 1981 1977-80 1980181 1977 1978 1979 1980 1981

Current RupiahsCross domestic product 19,011.0 22,458.0 31,023.0 43,765.0 53,393.0 32.0 22.0 - - - - -

Total budget expenditures 4,305.7 5,299.3 8,076.0 11,716.1 13,000.0 39.6 18.6 100.0 100.0 100.0 100.0 100.0

R%tifne budget 2,148.9 2,743.7 4,061.B 7,800.0 7,501.0 53.' (3.8) 49.9 51.8 50.3 66.6 54.0

Development budget 2,156.8 2,555.6 4,014.2 3,916.1 6,399.0 22.0 63.4 50.1 48.2 49.7 33.4 46.0Communications and tourism 354.7 413.2 465.8 708.0 810.0 25.9 14.4 8.2 7.8 5.8 6.0 5.8

Highway programInterurban nontoll 87.6 121.8 248.9 256.2 278.6 43.0 2.7 2.0 2.3 3.1 2.2 2.0Urban and toll road 13.0 18.5 17.3 46.5 120.1 52.9 158.3 0.3 0.3 0.2 0.4 0.9

Total Highway 100.6 140.3 266.2 302.7 398.7 44.4 31.7 2.3 2.6 3.3 2.6 2.9

Other nomaunication and tourism 254.1 Z72.9 199.6 405.3 412.3 16.8 1.7 5.9 5.2 2.5 3.4 3.0 '

Other development expenditures 1,802.1 2,142.4 3,548.4 3,208.1 5,589.0 21.2 74.2 41.9 40.4 43.9 27.4 40.2

Constant 1973 Rupiahs /aGross domestic product 8,871.0 9,471.0 10,225.0 10,954.0 11,720.8 7.3 7.0 - - - -

Total budget expenditures 2,066.7 2,331.7 2,665.1 3,163.3 3,336.0 15.2 5.4 100.0 100.0 100.0 1(1.0. 10.Routine budget 1,031.4 1,207.2 1,340.4 2,106.0 1,800.2 26.9 (14.5) 49,9 51.8 50.3 66.6 54.0

Development budget 1,035.3 1,124.5 1,324.7 1,057.3 1,535.8 0.7 45.3 50.1 48.2 49.7 33.4 46.0Comnmunications and tourism 170.3 181.8 153.7 191.2 94.4 3.9 1.7 8.2 7.8 5.8 6.0 5,8Highway program

lTterutban tontoll 46.4 60.9 94.6 74.3 69.7 17.0 (6.2) 2.3 2.6 3.6 2.4 2.1Urban and tol1 road 6.9 9.3 6.5 13.3 30.0 25.1 122.2 0.3 0.4 0.2 0.4 0.9

Total Highway 53.3 70.2 10i.1 87.8 99.7 18.1 13.6 2.6 3.0 3.8 2.8 3.0

Other communication and tourism 117.0 111.6 52.6 103.4 94.7 (4.0) (8.4) 5.7 4.8 2.0 3.3 2.8

Ot'her development expenditures 865.0 942.7 1,171.0 866.2 1,341.4 0.5 54.9 41.9 40.4 43.9 27.4 40.2 1

la Derived by deflating current Ruxpiah data by general price index excluding exports, except for highway program data which was deflated by the whole-sale price index for public works on roads and bridges.

Source: Co"pIlea by Halcrow Fox$ Ltd. from various sources, 1962.

March 1984

INDONESIA

HIGERWAY BETTERMENT PROJECT

Central Government aLlRhway Expenditures by Type of Road and Expenditure. 1977-81(Rp billion)

Average annual Z distribution of total prograr.1977 1978 1979 1980 1981 Z change 1977-81 1977 1978 1979 1980 1981

Total Hlighway Program 100.6 140.3 266.2 302.7 398.7 41.1 100.0 100.0 100.0 100.0 100.0

Interurban NontollNew construction la 3.6 3.6 3.5 9.9 18.9 51.4 3.6 2.6 1.3 3.3 4.7Betterment 52.9 75.3 99.7 142.6 121.2 23.0 52.6 53.7 37.5 47.2 30.3Bridge replacement 19.3 29.1 17.3 26.2 26.1 7.8 19.2 20.7 6.5 8.7 6.5

Subtotal 75.8 108.0 120.5 178.7 166.2 21.7 75.4 77.0 43.3 99.1 41.7

Support works 9.5 10.9 22.4 7h.9 104.5 82.1 9.4 7.8 8.4 24.7 26.2Rehabilitation & maint. 2.3 2.9 1.2 2.6 7.9 36.1 2.3 2.1 0.5 0.9 2.0

Subtotal 11.8 13.8 23,6 77.5 112.4 75.7 11.7 9.8 8.9 25.6 Z8.2

Total Interurban Nontoll 87.6 121.8 144.1 256.2 278.6 33.5 87.1 86.8 93.5 84.6 69.9

Urban NontollNew construction la 1.0 0.7 2.7 8.4 7.6 66.0 1.0 0.5 1.0 2.9 1.9Betterment - - - 0.3 2.6 - - - - 0.1 0.7

Total Urban Nontoll 1.0 0.7 2.7 8.7 10.2 78.7 1.0 0.5 1.0 3.0 2.6

Toll Roads lbUrban la 3.0 3.5 4.1 17.5 37.9 88.5 3.0 2.5 1.5 5.8 9.5Interurban 9.0 14.3 10.5 20.3 72.0 68.2 8.9 10.2 3.9 6.7 18.1

Total Toll Roads 12.0 17.8 14.6 37.8 109.9 74.0 11.9 12.7 5.5 12.5 27.6

Summary by ComponentN4ew construction 16.6 22.1 20.8 56.1 136.4 69.3 16.5 15.8 7.8 18.5 34.2

Toll 12.0 17.8 14.6 37.8 109.9 74.0 11.9 12.7 5.5 12.5 27.6Nontoll 4.6 4.3 6.2 18.3 26.5 54.9 4.6 3.1 2.3 6.1 6.6

X nontoll 27.7 19.5 29.8 12.6 19.4 - - - - -

Betterment 52.9 75.3 99.7 142.9 123.8 23.7 52.6 53.7 37.5 47.2 31.1Bridge replacement 19.3 29.1 17.3 26.2 26.1 7.9 19.2 20.7 6.5 8.7 6.S

Support works 9.5 10.9 22.4 74.9 104.5 82.1 9.4 7.8 8.4 24.7 26.2Rehabilitation & maint. 2.3 2.9 1.2 2.6 7.9 36.1 2.3 2.1 0.5 0.9 2.0Other Ic - - 104.8 - - - - - B.4 - -

fa Proportion of new construction in urban (total and toll) estimated based on Repelita II reported program share.lb Includes Rp 4.8 billion of land acquisition for toll roads.

77 Purchase of conatruction equipment.

Source: Compiled by Halcrow Fox from various sources, 1982.March 1984

55 - Table 2.9

INDONESIA

HIGHWAY BETTERMENT PROJECT

Provincial C vernment Hlighway Expenditures by Type of Road and Expenditure, 1979-81(Rp biLlIton)

% distributionAverage annual of totals

1979 1980 1981 % change 1979-81 1979 1980 1981

Total Highway Program 45.6 70.2 88.1 39.0 100.0 100.0 100.0

Interurban NontUllNew construction 1.2 2.0 8.4 164.6 2.6 2.8 9.5Betterment 8.6 13.5 16.0 36.'4 18.9 19.2 18.2Bridge replacement 2.5 4.2 11.1 110.7 5.5 6.0 12.6

Subtotal 12.3 19.7 35.5 69.9 27.0 28.0 40.3

Support works 12.2 20.1 32.1 62.2 26.8 28.6 36.4Rehabilitation & maint. 14.1 21.8 11.3 (10.5) 30.9 31.1 12.8

Subtotal 26.3 41.9 43.4 28.5 57.7 59.7 49.2

Total Interurban Nontoll 38.6 61.6 78.9 43.0 84.7 87.7 89.5

Urban NontollNew construction - - 0.1 - - - 0.1Betterment 4.2 5.1 0.5 (65.5) 9.2 7.3 0.6Bridge replacement - - 0.3 - - - 0.3

Subtotal 4.2 5.1 0.9 (53.7) 9.2 7.3 1.0

Support works - - 8.3 - - - 9.4Rehabilitation & maint. 2.8 3.5 - - 6.1 5.0 -

Subtotal 2.8 3.5 8.3 72.2 6.1 5.0 9.4

Total Urban Nontoll 7.0 8.6 9.2 14.6 5.3 12.3 10.5

Toll RoadsUrbUan - - - - - - -Interurban - - - - - - -

Total Toll Roads - - - - - - -

Summary by ComponentNew construction 1.2 2.0 8.5 166.2 2.6 2.8 9.6

Toll - - - - - - -Nontoll 1.2 2.0 8.5 166.2 2.6 2.8 9.6% nontoll 100.0 100.0 100.0 - - - -

Betterment 12.8 18.6 16.5 13.5 28.1 26.5 18.7Bridge replacement 2.5 4.2 11.4 113.5 5.5 6.0 12.9Support works 12.2 20.1 40.4 82.0 26.8 28.6 45.9Rehabilitation & maint. 16.9 25.3 11.3 (18.2) 37.1 36.0 12.8

Source: Ministry of Home Affairs and sample of provincial budgets.

March 1984

INDONESIA

HIGHWAY BETTERMENT PROJECT

DGH Highway Development Programs1979/80 - 1983184 and 1984/85 - 1988/89

* (in USS million)

Repelita ill/a Repelita IV (bProgram 1979/80 1980(81 1981/82 1982183 1983184 Total 1984785 1985/86 1986/87 1987/88 1988/89 Total

Mlaintenance 1.5 32. 5.5 6.4 6.8 Z3.4 39.0 47.7 58.5 71.9 R8.8 305.9

Support works 30.8 59.3 98,0 85.8 38.2 31Z,1 53.1 5Z.8 50.4 45.5 36.8 238.6

Betterment 87.2 192.5 201.6 269.2 231.9 982.4 Z44.0 259.6 265.9 269.9 239.2 1,Z78.7

Construction 31.2 103.6 37.2 72.4 79.0 323.4 49.9 53.d 60.8 68.4 71.8 304.7

Bridge replacement 27.8 41.8 40.0 47.4 17.0 174.0 90.0 100.8 112.9 126.4 141.6 571.7

Institutional &staff developmer.t 68.4 62.3 Ra.3 13S.0 71.8 426.R 47.6 51.5 54.9 58.2 57.8 270.0

Total 246.9 462.7 471.6 616.2 444.7 2 41.1 523.6 566.4 603.4 640.2 636.0 2,969.6

[a Actnal expenditures for 1979(80, 1980181 and 1981/82 - and budget for 1982/83 and 1983/84

(b Budget proposal with a target of having 80% of national and provincial roads in stable condition by end of plan period.

Source; DOG

March 1984

- 57 - Table 3. 1

INDONESIA

HIGHWAY BETTSRMENT PROJECT

Betterment Program, Phase 1

EstinatedContract Province Lenrgth total costNo. and Road Section (km) (Rp ftlt)

West Sumatra1. Bukit Tinggi - Bonjol 57.9 3,2802. 8ukit Tinggi - Kota A-lan 69.0 3,9363. Kota Alam - Riau Border 51.0 3,445

Subtotal 177.9 10661

North Sumatra4. Jembatan Merah - Ranjau Batu 61.0 2,918

RIau5. Parit - Bangkinang 51.1 2,9476. Bangkinang - West Sumatra Border 35.3 2,738

Subtotal 86.4 5,685

South Sumatra7. ?rabumnulih - Karangagung 47.0 2,7108. Karangagung - Baturaja 59.0 4,3219. Betung - Sekayu 55.8 3,463

Subtotal 161.8 10,494

West Java10. Ciamis - Cikijing 50.0 3,65611. Cikijing - Cirebon 50.4 4,25312. Cirebon - Pejagan 37.8 3,55821. Ciawi - Cianjur 50.4 5,435

Subtotal 188.6 16,902

Central Java13. Bawen - Yogya Border 74.4 6,49814. Tegal - Pejagan - Prupuk 66.8 6,07915. Sukrakarta - Mantingan 41.4 5,207

Subtotal 182.6 17,785

East Java16. Mantingan - Caruban 68.9 4,74517. Nganjuk - Tulungagung 63.7 5,27218. Ngimbang - Kandangan 56.1 3,434

Subtotal 188.7 13,451

South Sulawesi19. Ujung Pandang - Allu 60.0 3,82620. Allu - Bantaeng 58.6 3,337

Subtotal 118.6 7,163

Urban Areas22. Tembung - Medan - Brayan 10.5 2,00523. Dawuan - Kalijaga - Cirebozn 15.3 3,00624. l.adai Ujung Pandang - 1¶acini Sombala 30.0 5,84125. Bandarharjo - Jatingaleh (Sernarang) 13.6 2,344

SubtDtal 69.4 13,196

rotal 1,235.0 98,255

Source: DGH.

March 1984

Table 3.2

- 58 -

INDONESIA

HICIIWAY EBTTBRKSNT PROJECr

Upgrading/Rehabil1tation of Key Roada: PFret-Year Program (198418S)

Es ttmaatedProvince and road sectton Length total cost

(km) (Rp wiln)

Ak ehLangsa-Sumatra Utara 8order 30.0t 1.302

North SumatraI4edan-Kabanjake 30.0 1,302

West SumatraPadang Panjang-lubukeramnbtl 9.5 343Kubukerambil-Solok 20.5 959

Subtotal 30.0 1.302

South SumatraRasuan-Gunungbatu 12.5 750Kurungan Nyawa-Martapura 17.5 536

Subtotal 30.0 1,286

lampungTegineneng-On. Suglh 9.9 413Gn. Sugih-Terbangi Besar 11.8 492Gn. Sugib-Gd. Dalam 24.3 1,012

Subtotal 46.0 1.917

West JavaCilegon-Labuan 10.0 361Pandeglang-Sakati 2.9 138Pandeglang-Serang 23.8 1,024Lianjur-Padalarang 18.1 795Cianjur-Sulcabumi 27.0 1,043Cianjur-Sindangbarang 2.3 68

Subtotal 84.1 3.434

Central JavaX4argoyoao-Jepara 16.3 699Pati-Tayu 18.0 682Boyolali-Kartosuro 5.4 262Kartosuro-Surakartg 5.0 222Salatiga-Magelang 42.0 1,961Surakarta-Sukoliarjo 7.6 306

Subtotal 94.3 4.132

Yo yakartaYogyakarta-Pr. Tricts 6.X 199Yogyakarta-Xaliurang 10.0 413Yogyakarta-Pengang 14.0 662

Subtotal 30.0 1.274

East JavaSampolan-Centeng 34.2 1,319Krian-Mojoaari 7.2 366Mojosari-Pandanarura 13.0 689Krian-tagundi 2.9 117Gempol-Mojosart 16.4 641Ngawi-Maospat i 3.E 204Maoapati-Madiun 10.1 580Ngawui-Padangan 37.6 1,223

Subtotal 125.2 5.339

EaliSingaraja-Batusart 19.5 694Singe..aja-Seririt 2.5 117Singaraja-Kubutamobaban 12.0 584

Subtotal 34.0 1.395

GRANT) TOTAL 533.6 22.683

Source: N.D. Lea AaaociateG, February 1984.

?March 1984

- 59 - Table 3.3

INDONESIA

RIGHWAY BETTERMENT PROJECTBridge Replacement Program

TentativePhase I Phase II Phase III TotalProgram Program Program Program

No. of Total No. of Total No. of Total No. of Totalbridges length bridges length bridges length bridges length

Province (m) km) (n) (m)

Aceh - - 9 235 10 500 19 735North Sumatra - - 7 305 1 120 8 425West Sumatra 5 250 - - - - 5 250Riau 3 95 - - 8 275 11 370Jambi - - 10 345 - - 10 345Bengkulu - - - - - - - -South Sumatra - - - - 16 525 16 525Lampung - - 7 280 3 105 10 385West Java - - - - - - - -Central Java - - 10 305 5 23n 15 535Yogyakarta - - - - - - - -

East Java 1 105 2 170 4 450 7 725West Kalimantan - - - - 6 135 6 135Central Kalimantan - - - - - -

East Kalimantan 7 200 - - 6 155 13 355South Kalimantan 2 55 8 265 - - 10 320Bali 1 180 - - - - 1 180West Nusa Tengara - - - - - - - -

East Nusa Tengara - - - - - - - -Timor Timur - - - - - - -

North Sulawesi 4 345 6 325 7 225 17 895Central Sulawesi 3 175 - - 10 475 13 650South Sulawesi 3 355 - - 8 570 11 925Southeast Sulawesi - - - - 10 405 10 405Maluku - - _- - - -Irian Jaya 10 390 - - - - 10 390

Total 39 2,150 59 2,230 94 4,170 192 8,550

Average length 55 m 38 m 44 m 45 m

Source: DGH, December 1983

March 1984

- 60 - Table 3.4

INDONESIA

HIGHWAY BETrnRMENT PROJECT

Cost Estimate /a

Rp billion or USS il/b % foreignProject Component Local Foreign Total exchange

A. Civil Works(t) Betterment of 2,000 km

of Intercity Trunk Routes 64.0 96.0 160.0 60(ii) Upgrading/Rehabilitation

of 1,000 km of Key Nationaland Provincial Reads 15.0 28.0 43.0 65

(iii) Replacement of 8,000 aof Deficient Bridges 14.6 41.4 56.0 74

Subtotal (A) 93.6 165.4 259.0 64

B. Equipment.(1) For quality control

of asbuton - 1.0 1.0 95(ii) For surface dressing 0.1 i.7 1,8 95(iiI) For mobile soil and

materials laboratories 0.1 1.1 1.2 95

Subtotal (B) 0.2 3.8 4.0 95

C. Technical Assistance.(I) For DPUPs and DBMs 2.3 4.7 7,0 67(ii) For DGH's Planning Directorate 0.1 0.5 0.6 80(i1i) For ITB graduate courses 0.6 2.9 3.5 83(iv) For DPKJ for materials

survey and asbutonquality control 0.2 0.8 1.0 80

Subtotal (C) 3.2 8.9 12.1 74

D. Consulting Services forsupervision of A (1) and (iiI) 5.2 10.4 15.6 67

Total Base Costs 102.2 188.5 290,7 65

E. ContingenciesPhysical /c 10.1 18.4 28.5 65Price /d 32.7 32.5 65.2 50

Subtotal (E) 42.8 50.9 93.7 54

Total Project Cost 145.0 239.4 384.4 62

/a Prices as of early 1984.

/b US$1.00 - Rp 1,000.00

/c 10% on all items except C (iii) and (iv).

/d Expected price increases (%): 1984 1985 1986 1987 1988

Local 12.0 10.0 10.0 10.0 9.0Foreign 3.0 7.5 9.0 9.0 9.0

Source: DGH, consultants and mission, Jane 1983.

March 1983

- 61 - Table 3.5

INDONESIA

HIGHWAY BETTERMENT PROJECT

Schedule of Estimated Disbursements(US$ miilionT

IBRD fiscal year Cumulative disbursementsand end of semester at end of semester

1985December 31, 1984 6.0June 30, 1985 38.4

19B6December 31, 1985 74.4June 30, 1986 110.4

1987December 31, 1986 146.4June 30, 1987 182.4

1988December 31, 1987 216.0June 30, 1988 232.8

1989December 31, 1988 240.0

Closing date: December 31, 1988

March 1984

- 62 -Table 4.1

INDONESIA

HIGHWAY BETTERMENT PROJECT

Road User Costs on Improved Road in South Sumatra(Rp per km, in 1982 prices)

Vehicle Fuel & Repair & Other/aType oil Tires maintenance Depreciation costs Total

Motorcycle 5.4 0.2 6.0 7.9 6.4 25.9

Car 19.8 3.2 15.0 49.6 33.4 120.8

Light bus 34.4 1.3 17.5 21.7 52.9 127.8

Heavy bus 49.1 7.4 25.0 55.7 125.1 262.4

Light truck 33.5 1.9 22.5 20.9 25.8 104.6

Medium truck 41.2 4.2 22.5 18.7 37.9 124.5

Heavy truck - - -

Jeep 36.0 2.5 17.5 43.0 35.1 141.4

/a Crew and occupants' time.

Source: Screening Feasibility Office, DCH.

March 1984

INDONESIA

HIGHWAY BETTERMENT PROJECT

Basic Road User Costs by Region(Rp per vehicle-km, i982/83 prices)

West Central East South West South East SouthJava Java Java Sumatra Sumatra Kalimantan Kalimantan Sulawesi

Miotorcycle 21.1 22.7 23.1 25.9 25.2 27.4 30.2 26.8

Car 101.4 98.8 97.7 120.8 139.8 153.6 165.4 154.7

Small bus 103.7 97.0 100.8 127.8 141.5 141.3 148.5 131.3

large bus/a 241.5 229.4 228.0 262.4 269.9 175.6 181.1 265.7

Light truck 84.8 82.7 85.7 104.8 111.6 112.6 117.5 109.8

Medium truck 135.6 133.3 130.9 124.5 146.5 156.4 163.2 160.9

Heavy truck 183.5 191.3 186.5 - 183.0 - - -

Jeep 114.8 112.3 110.7 141.4 159.4 168.9 177.6 143.6

/a 34-seaters in all provinces except in South and East Kalimantan, where they are 24-seaters.

Source: Screening Feasibility Office, DGH.

'March 1984

- 64 - Table 4.3

INDONESIA

HIGHWAY BETTERMENT PROJECT

Road User Savings on a Sample Road Section(Rp per vehicle-km iTl 1982 prices)

Before improvement After improvement Saving

Motorcycle 32.5 30.5 2.0

Car 194.4 182.2 12.2

Light bus 228.1 202.5 25.6

Heavy bus 385.0 350.5 34.5

Light truck 179.0 161.4 17.6

Medium truck 206.4 191.6 14.8

Heavy truck 322.5 289.3 33.2

Note: The above data allow for the specific geometric features of the road,such as gradients, curves, etc.

Source: SFO, DGH.

March 1984

- 65 - Table 4,4

INDONRSI A

HIGAWAY BETTEItRMENT PROJECT

Sample Test on Economic Returns

Re-estimates allowing for the effects of the 1983Devaluation on Relative Price ChangesOverall return, all costs and benefitsStandard

DGH estimate deviationFirst about Probability that the First

Region and AADT Overall year Overall mean rate overall return is yearroad Length (1981) return return return (points) <10% 10-15% 15-30% >30% return

(km) (Z) -----

A. SUMATRAJembatan MerabRanjau Batu

03020-01 15.5 791 36 21 32 6.1 - - 42 58 23(SUMD 1)

03020-02 33.2 791 38 22 32 6.3 - - 42 58 24(SUM02)

03020-03 11.7 727 30 24 25 5.8 - 5 79 16 21

Sekayu-Betung15029-01 21.2 752 36 42 42 7.2 - - 3 97 47

(SUM04)15029-02 25.0 592 23 32 29 5.5 - - 67 33 32

( SUMO5)15029-03 12.6 1,217 32 37 49 8.9 - - 2 98 52

S. JAVACi kiiing-Kuningan

22065-01 5.0 5,010 97 34 67 13.0 - - 1 99 32(JAW'.)

22065-02 7.0 3,240 57 27 34 8.5 1 1 27 71 14(JAWA2)

22065-03 8.0 3,240 44 26 26 7.6 3 6 63 2S 10( JAWA3)

Palur-Sragen24023-01 1.5 11,100 105 23 72 14.0 - - - 100 19

(JAWA4)24023-02 12.5 11,770 109 39 67 13.9 - - 1 99 46

(JAWA5)24023-03 10.0 11,560 122 36 67 12.7 - - - 100 27

Kediri-Nganjuk28071-01 25.4 8,034 60 25 33 8.1 - 2 34 66 10

(JAWA7)

Notes: (1) Post-devaluation price adjustment effects are estimated by increasing all prices for tradeablegoods by the devaluation rate; and local prices by 25% the average adjustruen, factors are:construction cost, 1.34; maintenance cost, 1.26; time savings, 1.25; vehicle operating costs, 1.49.

(2) Probability distributions for risk analysis are: (a) construction cost uniform chance of variationsbetween cost estimte and +50%; (b) normally distributed variattons about values 20% share costestimates standard deviation 10% of mean; (c) time savings normally distributed about values 70%below SFO estimates, standard deviation 10% of mean; (d) vehicle cost (before roughness adjustment)varying normally about the central estimates, 25% standard deviation; (e) spectal roughness effectsvarying normally about values 20% below the central estimates, 12% standard deviation.

Source: DGH Screening Feasibility Office and Mission Estimates.

March 1984

Chart 1

INDONESIAHIGHWAY BETTERMENT PROJECT

Central and Provincial Wofks OrganizationsIn ReWon to Highway Administration

N%W0,dPu1:AicWorM1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~(27)

IC-hotl I W I~W,lot

PrGw Geetol Irfrto G iac

Caca~e Ger c d __ nod

Doed~~~oted Doccoexe s (oMo) Bin_ m

___~~~~~1 Cr----2COOl

rSub-&ocIoe I |Sub-rectrlde F40D-nreclee SuO-Doectrce Sub-dim sf S ct| su"eofe |seS| -eoco|

r~~~~~~~~~ P- EVe- 1 f- d&V1 a = .r;= (f.-

I . I ,. ,

I ~ ~ ~ ~ ~ ~ ~ Op R fegu ra Betelremont ss s e(D.*on dAl *] Antk I & I. C-dir- d COn ,muccOISnp @ Wok Sites to, Saeent IWois. & Advice to DRVs)

* U.do ~ rca.dA.oh. Nae S-o AOu Wesl,-t -

2 PolTernt Jonb. South k t ch . Berngkuh LOj3 Ntlg Po.olWv ,a Wo eo, nO, 0o Con0 Ooo

L .- 430 .o Pa,o'o Onc ___________________-__ _ _______

Betto,nenTen I Ai - becutod ttlogh Cor*ot GmerowN t4e R eeg eo 0ent OMC=

6e IIr0Tu0 Pio0tCod Eos CanItd&SoJh flWImontan7 UrCP wond no,+ SdSouth & Souteo,7&,So.e8 Mogido NoAmcs d Noflh & Cantol Suk_

_ T Wd 3 Tyd WDI 911>. I~~~~~~~~~~~NoslechNccd Mcner)Swce 0Pufi*a wok Zo

~ *oe3 3En-52

Ch.~t 2

INDONEAHICGHWAY BETIERMENT PROJEC

NoPino of Wed SumwtoPromneIla Dodment d Public Wodi5 (DPUP)

OWgantIon Cha

=;~~~~~~~~~~~~~~~~~ I

QoOds D. ~ ~ ~ ~ ~ ~ ~ ~ ~ O~Q 5~e

~~ ~CWO~~~ ~fiCWO vim CWO*WO&

-iIlAtAbbAA49;AitA;~~~~~~~~~~~~~~~~~~~~~~~~~-

*A~~~. I S-~~~101d, >s1083~~WIfSXC WR

68 Chart 3

I NDONESIAHIGHWAY BErTERMENT PROJECT

Kabupaten Public Works Department (DPUK)Typical Organization Chart

Chlef of DPUK |

Logistic Financial Personnel lngement.Affairs Affairs AffairsAfir

r X r I -Ir ~~~~~~~~~I IA-

Plning Planning Building Broadgs & lmgation Maintenanrce.

Planniong Section Setion Becidoe Sectior & WorkcshopSection I Section ~~~~~~~~~~~~~~~~~~~~~~Section

SectorCoordinator

Sector I Sectoa 11 Sertor 111 Sectori/ SectorV SectorVI SectVrVII

overseer

Foreman

Source Rurol Roods Develorpment Project. Loan 2083-IND. Staff Appraisal Report. Docember 10 1981Woirld Bank -25827

69Chart 4

INDONESIAHIGHWAY BETTERMENT PROJECT

Source and Fow of Funds for RoadMalntenance and Development

Inrs 9stTT5Gont c | Incone& Tolls (2nd Lc n cd (1 nevel)

titn l D opmnent Inpres

8udet APB) |ProvinciallInpres Kc_bup_tern| I~~~~~~~~~~~~~npres (TK.I)' Jalon , ,(TKJI)+'

Jasr Margo Bu Bfna Marg Provincial Developrnent District Developme_ tEbsa Morgez gna Marga Budget Budget (APBD TK.1I) Budget (APBD TK.11)

Rehabilitatilon Spot B rde Spot Big

Maiintenanice ""'s em"t Relcmn-oks epaemn

Stable Roads Non-Stable Roads

Nationl & Provinclal Roads District Roads[±ol2 1oorJs J I (ArterIal. Collector & Local Roads) L (Local Roads)

+ Through Ministry of Horne Affairs Budgets * Roject Ad & Land Acquisition Costs

Source: DGH

November 1983 World Bank-25782

_ PHILI PPINES I I'7 / BR UN EI~ t " 110 .

Pt, I IiL DLI WN' MA L AYS 11 A \

d S ' . / I5 ' , -6 ° / . 1R V', KALIMANIAN ' . .R lI !

t \! J P * 2 j A~ULAWLSI'a, - IRIAN IAYA ,N.

. A I , / \ / |} \> ; z //j ) N\[,jIiA/ ,r , IAWA~ a .'/,' I ,J' .,,-

11100 .- ._ a- t

TaonjungS.0or, "'

M A L A Y SI A /

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x o n t i a n .k ' K o ta b a r u

I ~~~~~ ~ ~~~~~~~~~~~~~~~Tengg ronN ac/ ( \ 8Nangapinoh / ' Purikcau r

Telukbatang , . uent-l9an

'i ' Sandai / , , t >1o V~~~~~~~~~~~~~~/~~~~~~~~a ~~~~~~kpapan

;) " " A f J ,am

Ke tapang; t ', / ' / t 'r thg go

\) ? \ / Ka; Kasongan I a Kndangan

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,andangan

7hts MaV has been P'opared by JThe %Bbrkt Bank' s stalt O.cluwrerly l sF .for theonvenerceI hthe i B t. artapura totabarureed&is and Isedsrey/rIr yalJm$l nternal use of rhle ofAOtd Bank Pagatan /and the Jntendahona/ FnanceCorpofabton the denonmnattens _-used and the bo-ndanes shown n PlriIon tMls rnap do not 'fnly. on theparl of The Wrld Bank and the|Internatlonal Fnance Corporalonr.any ludg-nenf on the lVel statiso0 any terrtory Of any endcese,seinf rS ac eDlence 0/fsuch boutalda f ; lo te

.50

KILD)METERS z | 100 110 200 300 400

MILES i I 0 50 100 160 200 250

_1100 _1150

IBRD 17535R, _ -1280 MARCH 1984

I N D O N E S I A

HIGHWAY BETTERMENT PROIJECT .

KALIMANTAN AND SULAWESIPROJECT

HIGHWAY BETTERMENT (PHASE I)' - *- - HIGHWAY UPGRADING / REHABI,LITATION (YEAR ti

A.1 X .BRIDGE REPLACEMENT (PHASE tl

PREVIOUS PROJECTS,CR. 260 IND.

, ,+ - - CONSTRUCTION AND IMPROVEMENTS LOAN 1236 IND.

LOAN 1696 IND.) - ~ NATIONAL HIGHWAYS

PROVINCIAL ROADS

------ LOCAL ROADS.J.. PORTSt > t AIRPORTS

bIPROVINCIAL BOUNDARIE'i. .- - INTERNATIONAL BOUNDARIES

Ns ' Paleleh anaci= iri Tembaga

--angkSankuirang ) 1 ) tol ' otican p na n

/( outonglkuo

,ontang Saban /

002

) (/ (x, r A c I r F , C U L r A N

/Saffiarinda P~Dondo

Palu -JP/ ~~~~~~~~~~~BalantakLuwij

papan Pi oK + 'so Toili j}% : a S vLb, S > (Zs<u2a j /B an k

j ~~~GimPu r, -1S

.'I'T rips rr tIt \- ]

,f kale ' pKolonodalealqp

y I ~~~S ................ XO B\ui Pungk u

8 Marnuju J \ ~~~~~~~~6 U L A W E S I

Majn. / Enekang Lasusualin ~~~~~~~~~Wawotobi

Piman9+< J / > oKen~~~~~~~~KedariP l,yy..f6Fngkalene Kends .r. _tT

Paepairnipa Kolak7

IJ/ \r t!hatampone

MatostvZ /\ v Rahasi, w! ,R ha

Ujungp8 da jai

LBau Bau

TakaIar't Sar taefl, Jenepontro Bululkurba

i }en tong

1200 1 215

1 10013'

S UMA TE RA

- -. -- Majatrn~~~ ~ ~~~~~~~ ~~~~~~~~~gka ae Tagal Pekal-ngen

WI b.eang Jmng,

1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Pi ik rio 1atregr Wonosobob

28' Pr*rbn,iaMage

/ Couns

PHILIPPINtS

MALAYSIA B /UNE rhIs marp has been ptrParnd by

MALAYSIA e' ~~~~~~~~~~~~~~~~The World EPank's staff execIoseeiaMAIAYSIA tor the croverence of the

'P Si rN_/ readers and Is esckasnely to, thri

SAINGAANTAN- sternal rse oft Thrr World BankI, 51 N ALPOE KAI sMANCAN esrand the Inlernatonat Frnance

-v SULAWESI t Corporaho,c The denomnrpahopsIt 1AN JA YA ussd and Ihe houndsrnes shown

oen Uis rmins do not *mpty on theolt of The World Elani and theInternal,oiist F.nen Cseporatroa,~~~~ Art, a~~~~~~~~~~~~~~ny ,sdgn,nnt an the legal sataen

,, r.E 0O Ony teevtory nnrfleyenrdorsemrent or acceptance nosach bourndaar0e3

__ __ _ __ __ _ __ _ __ __ _ __ __ _ __ _ __ __ _ __ __ _ __ _ __ __ _ ___. ___.. _ ___ 1 10°13'

IBRD I 753dINDONESIA JANUARY 198

HIGHWAY BETTERMENT PROJECTJAWAPROJECT

HIGHWAY BETTERMENT (PHASE 11

HIGHWAY UPGRADING /REHABILITATION (YEAR 1i

B 8RIDGE REPLACEMENT (PHASE 1)

PREVIOUS PROJECTS , CR, 260 IND.

CONSTRUCTION AND IMPROVEMENTS iLOAN 1095 N.DNATIONAL HIGHWAYS LOAN 2649 IND.PROVINCIAL ROADSLOCAL ROADSRAILWAYS

.l PORTS__ ,Jt; AIRPORTS

teIn.a X _._- PROVINCIAL BOUNDARIESI , -.ntl,ag - INTERNATIONAL BOUNDARIES

Pat, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -

~~~~~~~~~~6Ia, TXa S um.rop

soia;ga j -- Srarabay MADURA

,I<aolrura I aangn'. k.Ja n Pwra

(Itrn,,, ' S,koho,IO Madruo '- ~~~~~~~~~~~~~~~~~~Panaruk.n

KILOMETERS O 2,0 4p0 _j 80

MILES P 10 20 30 40 50

No13-

W_osr I _

WBRD 1 753,-96o 100° tr5M4

0rQr a ;Ps. 4 J } bUANUARY 1984

,.*rSJffiar4dtflIfIof S^ t 6A L S IA I

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s>.SA~~~~~~~~ M A TE E Rw's \ A /Q

SIBERUT 3 ~~ ~7 ~ - , ANGIKA

IMPROVEMENIS{LO IRON IWO~ ~ ~ ~~~~~~BL IUN

cONTRICIO AN AN 123 ND |NG PQRE

INDONVINIAL OD

SUMA---T- RAIWY

H GHWAY POINTS DING I R l )

LRVO$PROJINCTALSOUS

55 00 200 300 4~CR 00INs-ILCONSTRUCTION N I.P.V..NT50 N 250 NDK

sRfrIbI rK . N | A 5 ON1690 5 10D0

- NVNA HIGWAY</i>S

--- S pVINCA BERUT ' NGKARE

I I DONTERNATIOA A ONARE J AY W A=/ - -n TlNpd

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MIE U M~ I T 2E RADCQU )LC 3

DROPOSEe ~ ~ loo PR:CTDtKE \W < X J

A' THAILAND

LI.~~~~~~~~~~~~-

.,'19 ' ' ' U. Ill(lIh I

*- \ MALAYSIA BRiJNH (

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