Document of

The World Bank

FOR OFFICIAL USE ONLY _ COP

Report No. 2470a-PAK

PAKISTAN

THIRD HIGHWAY PROJECT

STAFF APPRAISAL REPORT

December 20, 1979

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

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CURRENCY EQUIVALENTS

Currency Unit = Pakistan Rupee (Rs)Rs 9.90 = US$1Rs 1.00 = US$0.1Rs 1.0 million = US$101,000

WEIGHTS AND MEASURES

1 Mile 1.6093 Kilometer (km)1 Foot = 0.3048 Meter (m)

GLOSSARY OF ABBREVIATIONS

Organizations:

DGNH - Directorate General National HighwaysGOP - Government of PakistanIDBP - Industrial Development Bank of PakistanKPT - Karachi Port TrustNWFP - Northwest Frontier ProvinceMOC - Ministry of CommunicationsNHB - National Highway BoardNTRC - National Transport Research CenterPIA - Pakistan International AirwaysPR - Pakistan RailwaysUK ODA - United Kingdom Overseas Development AdministrationUNDP - United Nations Development ProgramUSAID - United States Agency for International Development

Technical:

ADT - Average Daily TrafficDWT - Deadweight TonsER - Economic Rate of ReturnGDP - Gross Domestic Product

POL - Petroleum Oil and Lubricants

FISCAL YEAR

July 1 - June 30

FOR OFFICIAL USE ONLY

PAKISTAN

STAFF APPRAISAL REPORT

THIRD HIGHWAY PROJECT

Table of Contents

Page No.

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

A. Setting ........ .................................... 1B. Transport System ....................................

II. THE HIGHWAY SECTOR ...................................... 7

A . Road Network and Traffic ........................... 7B. Administration, Organization and Training .......... 9C. Planning and Finance ............... .10

D. Technical Aspects of Highway Constructionand Maintenance . .12

E. The Domestic Construction Industry . .14F. First and Second Highway Projects . .15

III. THE PROJECT .............. 16A. Backgound......................... ............ .. 1Ab. Background..16B. Description . . .17

C. Cost Estimates .. 19D. Financing ... o .. .. 21E. Implementation .. 21F. Procurement .. 23G. Disbursements .... .. .. .23

H. Environmental Effects. 24I. Monitoring and Reporting . .24

IV. ECONOMIC EVALUATION ..o .................................. 24

A. Benefits and Beneficiaries ...... ................... 24B. Road Rehabilitation and Improvement ..... ........... 25Co Road Maintenance ........... ........................ 26

V. RECOMMENDATIONS ............................ 27

This report was prepared by Messrs. R. Panfil (Economist), and H.S.Thriscutt (Highway Engineer). N. Fostvedt (Industrial Finance OperationsOfficer) and Mr. H.S. Kaden (Construction Industry Advisor) also assisted.

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

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Table of Contents (cont'd)

ANNEXES

I. Provision of Coordinating Consultancy Services: Terms of ReferenceII. The Industrial Development Bank of Pakistan: Construction Industry

ComponentIII. Terms of Reference for Road Construction AdvisorIV. Reporting RequirementsV. Related Documents and Data Available in the Project File

TABLES

1. The Main Road Network2. Fuel Consumption on Roads3. Motor Vehicles Registered4. Road Maintenance and Construction Expenditures5. Revenues from Road Sector Collected by the Provinces6. Federal Road User Taxes7. Highway Design Standard for Road Rehabilitation and Improvement8. Equipment for Resealing Units9. Cost Estimates by Year10. Cost of Construction and Maintenance Equipment Financed via IDBP11. Project Preparation Costs12. Cost of Coordination Consultant13. Construction Supervision Costs14. Road Construction Advisor Costs15. Cost of Technical Assistance to Federal and Provincial Highway

Departments, Training and Future Project Preparation16. Estimated Schedule of Disbursements17. Traffic Data on Road Sections for Rehabilitation and Improvement18. Economic Evaluations for Rehabilitation and Improvement19. Economic Evaluation for Resealing

CHARTS

1. The Ministry of Communications Central Road Organization (WB 20777)2. National Highways Board & Directorate General of National Hi hwavs (WB 20741)3. Organization of Sind Provincial Highway Department (WB 20130)4. Implementation Schedule (WB 20742)5. Coordinating Consultants Supervision Schedule (WB 20131)

MAP

IBRD #14188R Map of Project Roads

This report is based on information provided by the Government of Pakistan andcollected by past preparation missions during 1977 and 1978 and the findingsof an appraisal mission in November/December 1978 consisting of Messrs.R. Panfil (Economist) and H.S. Thriscutt (Highway Engineer) and assistedby N. Fostvedt (Industrial Finance Operations Officer) and Mr. H.S. Kaden(Construction Industry Advisor). Additional reports and data relative tothe project available in IDA are listed in Annex V.

PAKISTAN

THIRD HIGHWAY PROJECT

I. TRANSPORT SECTOR

A. Setting

1.01 Pakistan covers a land area of about 800,000 square kilometers,approximately one and a half times the size of France. The topography con-sists mainly of the productive flat Indus basin with the Himalayas lying tothe north and the lower Hindu Kush to the west. In 1978 the population ofPakistan was about 76 million and is estimated to be increasing at an annualrate of about 3% per year. About 26% of the population lives in urban areas,which are rapidly expanding because of migration from the countryside.

1.02 The country is a federation of four provinces (Baluchistan, North-west Frontier Province, Punjab and Sind), the territory of Azad Kashmir anda number of federally administered tribal areas (FATA). The four provincespossess considerable autonomy and are responsible, among other activities,for agriculture, education, health, roads and irrigation works. Railways,telecommunications and power are some of the federally administered activities.

1.03 Pakistan's gross domestic product (GDP) at factor cost in 1977/78is estimated to be about Rs 152 billion (US$15 billion) and per capita GDP isabout Rs 1, 950 (US$197). Since 1970 the average annual growth of GDP in realterms has been about 3.8%, just above the population growth rate. The majorsector of the economy is agriculture, generating about 32% of GDP. Otherimportant sectors are manufacturing (15%), commerce (15%), transport includingtelecommunication (6%) and construction (4%).

B. Transport System

1.04 Transport modes ranging from camel caravan to jet aircraft arerepresented in Pakistan. The principal transport system encompasses about40,000 kilometers of national and provincial roads, 8,800 kilometers ofrailroads, four international airports, one major port and a gas pipelinetransmission system. The transport services are operated by the government-owned Pakistan Railways (PR), National Shipping Corporation (NSC) and PakistanInternational Airways (PIA), four provincially owned bus companies, twogas transmission companies and numerous private road transporters for bothgoods and passengers. Major products transported include wheat, rice,cement, fertilizer and petroleum.

1.05 The growth in domestic traffic in the transport sector as shownbelow, has been faster than the growth in GDP, particularly for passengertraffic. Domestic freight transport during the period 1971/72 to 1977/78grew at a 5.6% annual rate, while passenger traffic increased at a 9.9% rate.The road subsector is clearly the dominant mode of transport and its shareis increasing.

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Domestic Freight Transport(Millions of Ton Kilometers)

% Annual1971/72 % Share 1977/78 % Share Growth

TOTAL 15,695 100 21,740 100 5.6

Roads 8,050 51 13,360 62 8.8Railways 7,640 49 8,370 38 1.9Air 5 - 10 - 11.2

Domestic Passenger Transport(Millions of Passenger Kilometers)

% Annual1971/72 % Share 1977/78 % Share Growth

TOTAL 46,360 100 81,630 100 9.9

Roads 36,540 79 64,410 80 10.2Railways 9,520 20 15,230 19 8.1Air 300 1 990 1 22.0

Roads

1.06 The road subsector is discussed in detail in Chapter II.

Railroads

1.07 The Pakistan railway system consists of about 8,800 route kilometersand connects most of the major cities throughout the country, as well as havingconnection with India, Iran and Afganistan. Although traffic has varied fromone year to the next, the trend appears to be that of declining revenue tonswhile ton-kilometers are increasing. The rising average haul distance is thenatural result of road competition. The hostilities with India in 1971, andsevere flood damage in 1973 and 1976, all contributed to the erratic trafficpattern. Principal freight includes POL (23% of ton km), wheat (14%), cement(9%) and rice (8%) which together comprise over 50% of the railway traffic.Approximately 75% of the freight moves in a south to north direction, whichcreates an imbalance for cargo movements and increases operating and capitalcosts.

1.08 In contrast to freight traffic, passenger traffic has shown a rathersteady increase during the 1970s. Passenger traffic has increased during the70s at an annual rate of 3.1% and passenger kilometers at 8.1%. The averagetrip distance has increased from 77 km to 101 km. About 97% of the passengersand 90% of the passenger-miles come from third class passenger services.

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Pakistan Railways TrafficMillions

Annual71/72 72/73 73/74 74/75 75/76 76/77 77/78 Growth

72-78

Revenue Tons /a 11.1 11.1 10.1 10.4 10.6 9.2 10.1 -1.5%Revenue Ton Km 7,079 7,745 6,822 7,538 8,177 7,045 7,915 1.9%Passengers 124 136 143 143 147 142 149 3.1%Passenger Km 9,520 11,074 11,697 12,360 12,962 12,998 15,230 8.1%

/a Revenue tons exclude PR's own cargo which is included in thetable in para 1.06.

1.09 The operating performance of PR has been deteriorating especiallywhen viewed over a longer period. For instance wagon turnaround time in1958/59, was 7 days compared to 17 days in 1977/78. Major issues involve therationalization of passenger service and freight service, the operation ofuneconomical branch lines, improvement of maintenance, utilization of avail-able equipment and financial viability. A restructuring of tariffs (loweringlong distance freight while raising passenger service) in line with costswould encourage a more efficient transport system. Also, freight train speedsshould be increased up to the capacity of the existing rolling stock, 70 kph,and passenger train speeds and services should be adjusted in such a way thatline capacity is not reduced.

1.10 To realize the potential for operational improvement particularlyin the transport of cargo, in November 1975 PR undertook a major programto rationalize services. Also, an action plan with specific operationaltargets was agreed during negotiations for the Tenth Railway Project (Loan1372/Credit 684-PAK December 1976). However, due to external circumstancessuch as the floods in 1976, significant operational improvements have notappeared until recently. Since October 1978, with the need to transportlarge quantities of wheat and fertilizer from Karachi port to the interiorand with the reduction of distribution points, the wagon turnaround timedropped from 17 to 13 days.

Ports

1.11 Karachi Port, which is operated by the Karachi Port Trust, ispresently Pakistan's only international port. The port facilities include24 wide apron general cargo berths and 4 POL berths. In addition, four newdry cargo berths are being constructed with IDA financing. A new port some20 miles away from Karachi at Qasim is being constructed, with financingfrom the Asian Development Bank and several bilateral donors, to serve thesteel mill (initial 1 million ton capacity) which is also under construction.Besides a bulk handling facility for coal and iron ore, four marginal berthsare being constructed and channel dredging is also underway.

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Karachi Port Trust TrafficMillions of tons

Annual71/72 72/73 73/74 74/75 75/76 76/77 77/78 Growth

POL 4.3 4.5 4.9 4.6 4.5 4.8 6.2 6.2%Dry Cargo 5.0 5.7 5.6 5.4 5.4 4.8 5.6 1.9%Total 9.3 10.2 10.5 10.0 9.9 9.6 11.8 4.0%

Until 1977/78, there had been little increase in KPT's traffic for severalyears. This in part reflects the modest growth of the Pakistan economyduring the 1970s and a reduction in wheat imports during the mid 70s. In1977/78 there was an increase in the importation of crude oil and wheat.Because of a rust attack on the domestic wheat crop during 1978, wheatimports reach an all time high of over two million tons, and dry cargohandled approached eight million tons in 1978-79.

1.13 During most of the 1970s the operational performance of the port ofKPT showed little improvement. In spite of the construction of 3 new andreconstruction of 7 existing berths with Bank Group support (Loan 376-PAK,Cr. 422-PAK and Cr. 492-PAK), ship waiting time increased rapidly. In recentyears the cost of this, which is mostly in foreign exchange, has been esti-mated to range around $50 to $75 million. Hook hour rates for general cargohave dropped from 13.5 tons an hour to 9.3 tons for exports, and from 9.8 tonsan hour to 4.1 for imports. This has been attributed to the decasualizationof dock labor, the physical congestion of the port, the slow removal of cargoand the failure of management to tackle the problem seriously.

1.14 In 1978 a number of measures were taken in order to improve opera-tional efficiency. Old cargo has been consolidated and customs auctionsfor its disposal have been increased. Steps are being taken to reorganizeand strengthen cargo management at quayside. Incentives have been estab-lished on more cargo to encourage quicker unloading. Also, additional openair storage space is being constructed. More recently, in September 1978the Quartermaster General of the Army has taken over the coordination ofwheat and fertilizer movements and throughput has rapidly increased.

Shipping

1.15 In 1977-78, the Pakistani fleet carried one million tons of generalcargo and 0.6 million tons of dry bulk cargo which represent about 30% of thetotal volume of 5.6 million tons of dry cargo shipments. All liquid bulkshipments were carried in foreign fleets. From 1971 to 1978 the nationalfleet has been reduced from 750,000 DWT to 250,000 DWT because of war lossesand scrapping. The average age of the existing fleet is high (fifteen years).Operational efficiency of the general cargo is low, less than three tons ofcargo per DWT per year against the world average of 5.8 tons per DWT.

1.16 In order to improve operations, the two Government-owned shippingcompanies (National Shipping Corporation and Pakistan Shipping Corporation)are being merged into one. In addition the Government has now entered intoagreements for bilateral financing of general cargo ships which will replacethe existing obsolete vessels. Assuming that the port congestion situationand fleet management are improved so that productivity per ship is increased,the proposed fleet additions should save foreign exchange.

Civil Aviation

1.17 Scheduled international service is provided at four airports:Karachi, Rawalpindi, Lahore and Peshawar, and domestic service is providedby the government-controlled Pakistan International Airways (PIA). Since1972, PIA's passenger kilometers (international and domestic) have grown atan average annual rate of 28% and ton kilometers at 23%. PIA has greatly

benefited from the oil boom in the Middle East where its services are heavilyconcentrated. In spite of the rapid growth, operations are well managed andprofits have been increasing during the last four years.

PIA Traffic(Millions)

Annual Growth72/73 73/74 74/75 75/76 76/77 77/78 72-78

PassengerKm 1,304 1,585 2,224 2,929 3,752 4,505 28%

Ton Km 66.8 78.7 121.2 136.5 148.6 185.0 23%

Pipelines

1.18 Pakistan's existing pipeline network is principally for the trans-mission and distribution of gas. In addition, construction of an oil pipelinefrom Karachi to Multan is now in progress. The Bank has assisted the develop-ment of the gas pipeline system since 1954 through five projects. During the70s gas consumption increased at an annual rate of 7.3%, and because of recentdiscoveries and development plans, it is projected to increase at an annualrate of 10% during the next five years. As a result of investments during1970-78, most of the projected increase in gas demand can be handled by theexisting pipeline network which adequately serves the major markets. Futureexpansion of the system will depend mainly on the commercial possibilities fordeveloping oil and associated gas in recently discovered oilfields such asToot, Pirkoh, Dhodak and Adi.

Transport Policy, Planning and Coordination

1.19 Administrative responsibility for transportation falls on fourfederal ministries. The Ministry of Communications is responsible for roads

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and road transport, shipping and ports; the Ministry of Railways is respon-

sible for railroad transportation; civil aviation is under the Ministry ofDefense and the Ministry of Petroleum and Natural Resources is responsiblefor pipelines. In the case of roads, administrative responsibility is further

subdivided among the four provincial governments: Punjab, Sind, NorthwestFrontier (NWFP) and Baluchistan. In addition, there are several autonomous

operating companies such as Pakistan International Airways, Karachi Port Trust,

gas transmission and distribution firms, and the state shipping company.Because of the multiplicity of ministries and agencies dealing with transport,

the Planning and Development Division of the Ministry of Finance and Economic

Affairs (formerly the Planning Commission) has recommended that a Ministry

of Transport be established. This would allow for better coordination ofplanning operations, investment and pricing policies, but would take some

time to implement since it would involve a major reorganization of Government.

1.20 The Planning and Development Division is responsible for approving

investment requests for the various ministries and operating companies. Toprovide a basis for developing rational transport policies and planning, a

transport coordination study was financed under the Second Highway Project

(Loan 578-PAK). In accordance with a recommendation of the study, GOP estab-lished a National Transport Research Center (NTRC) in 1975. The role of NTRC

is to concentrate on multi-modal transport research by collecting informationand data and coordinating the research work of other ministries and transport

agencies. So far the organization has only been able to undertake a limitednumber of studies because of staff and budget constraints. Recently the GOP

has increased its allocation to NTRC, and technical assistance is being pro-vided by UNDP and the UK Government.

1.21 Government policy in the transport system is a mixture of controls.The rate structure is established by GOP for railway, pipelines and port

services. Trucking routes and rates are unregulated, but there are some

restrictio.as on the number of licenses for inter-provincial transport. Busrates and routes are fixed, but there is freedom of entry except in urbanareas. In the major cities, except Karachi and Lahore, the Provincial Road

Transport Corporations have monopolies.

1.22 Presently most competition between transport modes takes place

between the railroads and roads. The transport coordination study (para 1.20)investigated the competition between rail and roads and concluded:

(a) that road transport taxation was sufficient so that therewas not unfair competition between rail and roads;

(b) trucking regulations should be kept to a minimum so as topromote competition; and

(c) that the railroad should concentrate on improving operationsfor the movement of long distance bulk cargo.

For the most part these recommendations have been carried out. Road taxa-tion still appears to be adequate although expenditures on roads need to be

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increased (para 2.18). For the most part, trucking routes and rates areunregulated and the industry is competitive. With the development of roadtransport, the railroads are moving in the direction of carrying more longdistance bulk commodities and efforts are being made to improve operations(para 1.10).

1.23 The Planning and Development Division has indicated that GOP'sgeneral strategy in the transport sector during the Five-Year Plan period1978-83 would be to:

(a) emphasize improved utilization and modernization ofexisting facilities in order to increase capacity;

(b) promote the integrated development of different modesof transport; and

(c) give high priority to completion of ongoing schemes.

1.24 About 23% of the Fifth Plan investments (1978-83) is for thetransportation sector. Allocations between the various modes are:

Transport Sector of Fifth Plan (1978-83)Rupees Million

Highways & Road Transport 9,484 27.5Railways 6,773 19.7Ports & Shipping 4,721 13.7Air 11,308 32.8Pipelines 2,178 6.3

Total 34,464 100.0

The outstanding feature of the modal allocations is the large proposed invest-ments in air transportation, which is mainly for aircraft. However, Governmenthas now come to the conclusion that the traffic projection to support thisinvestment was optimistic and the allocation will be reduced.

II. THE HIGHWAY SECTOR

A. Road Network and Traffic

2.01 Pakistan's principal road network contains about 40,000 km of which23,500 have bituminous surfacing (Table 1). Nearly 50% of the paved roads arein Punjab, which is located in the heart of the Indus basin and contains over50% of the country's population. Baluchistan, the largest province but leastpopulated has only about 20% of the paved roads. Most of the remaining roadsin the principal network are shingle surfaced (gravel) and provide all weather

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access. In addition to the main road network, there are some 40,000-60,000 kmof earth (kacha) roads which provide access to the rural areas during the dryseasons.

2.02 The road network provides coverage to most of Pakistan's cities,towns and industrially productive areas. However, the quality of the networkis often deficient and does not meet present transport demands economically.Most of the paved roads are narrow, with a paved width averaging only aboutthree meters. In addition, the structural strength of the pavements is ofteninsufficient, leading to failures on major roads under heavy traffic loads.

2.03 The quality of traffic count data varies from province to province.In Punjab traffic counts are generally reliable since Lahore was formerly thecenter for the West Pakistan Highway Department, and traffic counts have beentaken on a fairly regular basis during the last ten years. In other provincessystematic counts are taken less frequently. During the last few years thePunjab Highway Department has been compiling national traffic data in a yearlypublication. On the main trunk roads traffic volumes vary from about 2,500-

3,000 average daily traffic (ADT) in the rural areas to 3,500-4,000 ADT nearthe larger urban areas. About 70% of the traffic volume in rural areas isheavy traffic (trucks 50% and buses 20%). On other secondary roads, trafficvolumes of 400-800 vehicles per day are common.

2.04 Although it is difficult to obtain trends from traffic count databecause counts are short and subject to seasonal variations, average trafficgrowth appears to be of the order of 7 or 8% per year. Other sources of dataappear to confirm this traffic growth rate. The growth in highway fuel con-

sumption during the 70s has been about 7% (Table 2). Vehicle registrationdata indicates a 6.8% growth rate for automobiles, trucks and buses during the

70s (Table 3). However, the latter source of data is somewhat suspect withfigures being overstated since scrapped vehicles are not deducted. 1/

2.05 Automobiles are both assembled in Pakistan and imported fullyassembled. Existing plants assemble about five to seven thousand units per

year and one of the goals in the Fifth Plan (1978-83) is to achieve completeimport-substitution for all cross-country jeeps and small passenger cars.However, the assembly plants, which have been nationalized, are generallysmall and not designed for economies of scale. In December 1978, the AsianDevelopment Bank approved a project to assist the auto assembly industry.

2.06 Most trucks are privately owned and the road haulage industry iscompetitive with little regulatory control. There are many small firms anda large number of owner operators. The 8 ton capacity Bedford truck is thecommon vehicle used and is assembled in Pakistan. In the last few years,small 3/4 ton trucks have become very popular and are now also being assembledin Pakistan. Although there is a generally flat terrain and often long hauls,

1/ The National Transport Research Center (NTRC) is starting a data bankto improve the collection of such statistics.

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large articulated multi-axle vehicles are rarely found. The PlanningCommission has recognized the advantages which larger vehicles could haveon lowering transport costs and axle loading in the Fifth Plan.

2.07 Registration figures indicate that the bus fleet has been growingmore rapidly than the automobile and truck fleets, at about a 10% annual rate.The ubiquitous bus (50 seats) is also a Bedford with the same chassis as thetrucks. The 10-seater minibuses, however, are becoming very popular for bothurban and inter-urban transport. Most bus transport is undertaken by theprivate sector although there are four large provincial bus corporations.

B. Administration, Organization and Training

2.08 There are three main agencies responsible for highways in Pakistan:the Ministry of Communications (MOc), provincial highways departments anddistrict councils. Until January 1978, the Ministry of Communications,operating through a Joint Secretary and a small headquarters staff, wasresponsible only for general uniformity of highway standards and allocationof Federal Government funds to the provinces. All major roads were in theprovincial domain and the provincial highway departments carried out allconstruction and maintenance operations. District councils were, and stillare, responsible for the upkeep of minor unsurfaced "kacha" roads.

2.09 In January 1978, a total of 3,500 kilometers of major routes weredesignated as national highways, for which the Ministry of Communicationsassumed full responsibility for improvement and maintenance. However, sinceMOC had no maintenance and construction organization, the provincial highwaysdepartments continue to carry out work on national highways as agents forMOC. MOC therefore has a supervisory and planning role in relation tonational highways, and a new National Highway Board has been organizedon June 3, 1979, and a Directorate General of National Highways has beenformed to monitor and inspect work done on the national highways.

2.10 In addition to the MOC and the provincial highway departments,there are 64 district councils in Pakistan concerned with the upkeep of thegenerally lightly trafficked kacha roads. Their work is highly labor inten-sive and equipment, if needed, is hired or borrowed from provincial highwaysdepartments, who also help at times with technical advice. When traffic oni akaeIa road grows so that hand maintenance becomes impracticable, the road isusually upgraded and surfaced anl taken over by the provincial highwaysdepartment. The Agency for International Development of the United States(USAID) has a limited program of training for ni.si-rict Council road con-struction and maintenance staff.

2.11 The organization and structure of the Ministry of CommunicationsCentral Roads Organization is shown in Chart 1 (IBRD No. 20777) and thatof the newly formed National Highway Board and Directorate General of NationalHighways in Chart 2 (IBRD 20741). A typical provincial highway department(Sind) is presented in Chart 3 (IBRD 20130). Other provincial highwaysdepartments have similar structures except illat in the case of NWFP andBaluchistan, the construction and maintenance of government buildings iscarried out by the same department. With present work loads in these twoprovinces, this is an acceptable and workable arrangement until increasingspecialization or work load calls for separation.

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2.12 For both the Ministry of Communications and provincial highwaysdepartments, the hierarchical structures are basically sound, giving clearlydefined lines of responsibility for main functions. Nevertheless, theorganizations themselves are not efficient and do not succeed in effectivelymaintaining the highway network. This appears to be due primarily to man-agerial weakness and to a decline in productivity of the work force. Man-agerial weakness is engendered not from any inherent shortage of professional

staff but rather by losses of experienced engineers and a rapid turnover ofstaff due to attractive salaries in the private sector and other countries.Poor productivity also results from poor discipline and training, lack of

reliable highway equipment and, until recently, a chronic shortage of funds.

2.13 Training for the most part has been on-the-job using apprenticeshipmethods. Some administrators have participated in international trainingthrough seminars and workshops, but their number is small. In addition,training has taken place through technical assistance which has been providedby various international donors, including the World Bank, under previoushighway projects. Because of salary and personnel policies, it is difficultto measure how effective the international training and technical assistancehas been, but in specific instances, such as in soils engineering and designin Punjab, its benefits are apparent. In addition to some technical assist-ance for specific tasks within the proposed Project, a more formalized train-ing program will accompany the introduction of maintenance equipment (paras3.07 and 3.16). This more formalized on-the-job training could provide thebasis for the departments to institute training on a permanent basis.

C. Planning and Finance

2.14 Most planning project appraisals and design are undertaken by theprovincial highway departments. For individual construction projects, atechnical report is prepared as part of the request for funding. If theproject is of provincial importance and under Rs 2.5 million, it can beapproved within the provincial highway department. If it is under Rs 10million, it can be approved by the Provincial Development Working Party andif over that amount the project must obtain approval at the Federal level.For larger projects, feasibility studies are sometimes carried out by con-sultants. The studies, however, have often been biased and failed to evaluatealternative solutions or indicate priorities among different possible invest-ments. In the preparation of Third Highway Project domestic consultants havebeen used for the economic evaluation and design of Project roads withassistance from an expatriate coordinating consultant. This arrangement hasresulted in a useful transfer of technology and it is planned to be continuedduring Project supervision.

2.15 In order to develop a strategy and priorities, a transport coor-dination survey was financed under the Second Highway Project in 1971. How-ever, little attention was paid to the investment implications of this surveyuntil recently. For instance, one of the study's main conclusions was thatemphasis should be placed on the rehabilitation and improvement of existingroads, rather than the construction of new highways. Nevertheless, instead

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of improving the existing blacktop roads on the west bank, the Government hadplanned to construct a new Indus Superhighway which would have amounted toover 30% of the total expenditures of the Five-Year Plan (1978-83). TheGovernment has now indicated that it will emphasize the rehabilitation andimprovement of existing highways. A highway inventory and investment studyis now being undertaken by a domestic consulting firm to identify futurepriority projects and plans for the construction of the Indus Superhighwayhave been deferred. During negotiations, Government gave assurances thatconstruction of the new Indus Highway will not proceed during the Plan period1978-83, and agreed that IDA will be given the opportunity to review andcomment on Government's highway investment plan during the execution of theproject.

2.16 Except for the national highways, the provinces are responsible forfinancing and executing the maintenance of all main roads. Funds for highwaymaintenance are allocated from general provincial revenues, and are not tiedto road user revenues. A comparison of total road user revenues from provin-cial taxes (road and bridge tolls, registration fees and licenses) withmaintenance expenditures during 1972/73 to 1976/77 indicates that provincialroad taxes were greater than maintenance expenditures (Rs 685 million toRs 452 million, Tables 4 and 5). However, there were deficits in Baluchistanand in NWFP, and maintenance expenditures have been generally inadequate.

2.17 This lack of adequate maintenance funds has been one of the mostserious problems facing the provincial highways departments. In 1977/78, themaintenance allocation averaged about Rs 3,500 or US$350 per km. For pavedroads only, the average was about Rs 5,000. In Pakistan, this amount coverslittle more than the payment of permanent staff, routine maintenance, andemergency repairs and does not allow for periodic or preventive maintenance.A more appropriate expenditure level for paved main roads including periodicmaintenance would be about Rs 12,000 per km. Now that the Federal Governmenthas taken over the maintenance funding responsibility for national highways,it is in a position to set an example for an adequate level of maintenanceexpenditure. Ministry officials agree, and funds allocated for maintenanceof National Highways during 1979/80 have been increased about 60% above thosefor the previous year, to about Rs 9,700 per km which is close to thedesirable target figure. Allocations in 1979/80 for provincial roads havealso been increased about 20% over the previous year. During negotiationsGovernment confirmed that a sum of about Rs 12,000 per km length (Rs 10,000per mile of ten feet width) at current prices represented a reasonable esti-mate of recurrent funds required for road maintenance at current traffic flowsand that Government intends to further increase maintenance allocations andto maintain them at an adequate level. The Government also confirmed that itwill discuss by March 31 each year with the Association the adequacy of pro-posed road maintenance funding for the following year and the actual expendi-tures attained in the previous year.

2.18 The funding of capital projects is the responsibility of the FederalGovernment. As with maintenance, federal road user revenues (fuel and tiretaxes, and import duties on vehicles) have exceeded road construction expend-itures during 1973-77 (Rs 5.7 to 4.5 billion, Tables 4 and 6) and there is no

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tying of funds. Fuel taxes alone amounted to 73% of highway construction andmaintenance expenditures in 1976/77. While the road sector appears to be"paying its own way", a substantial increase in expenditure will be needed infuture years in light of the present condition of the road network and theincreasing volume of traffic.

D. Technical Aspects of Highway Construction and Maintenance

2.19 Pakistan has an ancient system of road communications which, untilquite recently, developed slowly and generally in time with the demandsplaced upon it. Within the last two decades, a rapid rise in road traffichas exceeded both the traffic capacity and the pavement strength of many roads.Of the two, structural overloading is far more serious. While exceeding thetraffic capacity is undesirable, it can be borne at the cost of some inconve-nience and temporary economic loss, but structural overloading, together withinadequate maintenance, is already causing complete failure on major highwaysand if allowed to continue, will result in the loss of whole sections of thehighway system.

2.20 The structural overloading of highway pavements is due to a combina-tion of many vehicles with axle loads higher than the legal maximum (8 tons)on pavements which are well past the end of their economic life. Limitedsurveys taken during the preparation of the project show that about half ofthe total truck fleet is habitually overloaded so that one axle per vehicleis about 25% over the legal maximum weight of eight tons. The damagingeffect of one such axle is equal to between two and three of maximum legalweight. More recently, since December 1978 the National Logistic Cell (NLC),which has full responsibility for the emergency movement of wheat and fer-tilizer, is said to have loaded their single rear axle trucks with 15 tonloads, so producing a rear axle load equivalent to 20 to 25 standard axlesof the maximum legal limit. This was done during a period of emergency, andas Government has indicated, strict enforcement of the legal maximum couldrestrict the movement of vital commodities, leading to price rises and asignificant increase in commercial transport rates. However, in the lightof the extreme overloading which the NLC trucks produced, Government confirmedduring negotiations that in future, NLC single rear axle trucks will be loadedto a maximum of 11 tons during the dry season and 5.5 tons during the monsoonseason. It was further agreed that orders for future additions to the fleetof NLC will be either for articulated or multi-axle vehicles, imposing loweraxle loads than the existing fleet. In addition, terms of reference wereagreed at negotiations for a study of possible long term alternative methodsto deal with axle overloading.

2.21 Soil conditions and material availability vary considerably through-out the country. NWFP and Baluchistan soils are generally good and roadbuilding materials are usually readily available. Over most of Punjab andSind Provinces, where the heaviest traffic flows occur, there is a markedscarcity of good materials and subgrade soils are usually poor. Historically,the situation has been overcome by using overburnt brick for road construction,but even the most careful control of burning, using traditional methods, doesnot give a pavement material fully suitable for modern traffic loads, while

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rising labor rates are eroding the price advantage that use of bricks formerlyenjoyed. Typical subgrade soils in Punjab and Sind compact at optimum mois-ture contents close to the plastic limit so that even a small moistureincrease results in serious strength loss. Much of the area is subject toannual flooding; and high soil salinity, the result of long term irrigation,tends to attract and retain soil moisture.

2.22 In Punjab and Sind, some riverbeds contain extensive sand deposits,and although these are often poorly graded, admixture with the subgrade soilsdoes give a substantially improved material. Unfortunately, the proportionthat has to be added is high, typically about 20 or 30%, but where sand haulsare short, improvement of subgrade by this means is economic. Limestone andquartz stone quarries exist, but hauls are long and may extend to 200 km. Thequality of the stone produced is sometimes very variable and constant checksare required to ensure the necessary quality of the stone. This stone makessuitable base and surfacing material, although with such long hauls, it maybecome economic to use a bitumen-bound base in place of the more normal waterbound or compacted stone base, where the saving in thickness more than offsetsthe higher unit cost. Bitumen bound bases also have the advantage that duringconstruction, traffic can be routed directly over them, with consequentsavings in traffic diversion costs.

2.23 Standards of workmanship have tended to deteriorate over the yearsso that, for example, so-called water bound base may be no more than a poorlycompacted layer of crushed stone with no attempt made to fill the voids.Preconstruction testing for design purposes is often not adequate, and effec-tive quality control during construction is often lacking. With highway con-struction costs so high due to long material hauls and poor soils, there areconsiderable advantages to be gained from careful pre-design testing toselect the most economical design, and thorough quality control during con-struction to avoid subsequent failure and wastage of expensive materials. Inthe Project, provision to ensure adequate construction supervision has beenincluded (para 3.06).

2.24 Provincial government highway maintenance relies on road gangs whocarry out routine maintenance, while periodic maintenance is done on an ad hocbasis as funds and equipment are available. The effect of increased trafficloads on inadequate pavements is that Provincial Highway Departments tend tobe constantly involved in emergency repairs to keep traffic flowing, with theresult that periodic maintenance to prevent further failures cannot be tackled.The situation is worsened by a chronic shortage of funds for highway main-tenance and low staff productivity.

2.25 In Punjab Province, the United Kingdom Overseas Development Admin-istration (UK ODA) has under consideration a project to assist in improvingroad maintenance. A t 2.2 million (US$5 million) tied aid project would (i)make possible an adequate level of routine maintenance by provision of motorgraders; (ii) improve the rate at which periodic maintenance is carried out bysupplying five sets of equipment for resealing; (iii) provide Bailey bridgingfor emergency conditions; (iv) provide general back-up support to the Highway

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Department's equipment fleet by supplying low-loaders, workshop equipment and

spares; and (v) provide technical assistance in stores operation, spares

procurement and preventive maintenance of equipment 1. Similar assistance

on a smaller scale which emphasizes periodic maintenance needs, has been

included in this project for other provinces (para 3.08).

E. The Domestic Construction Industry

2.26 There are a very large number of active contractors in Pakistan but

the great majority are small-scale and act only as suppliers of labor, having

usually no equipment and possibly not even hand tools. At the upper end of

the scale, there are a few, including several quasi-government organizations,

who have substantial amounts of equipment and can handle contracts up to a

value of several million US dollars annually. Between these limits there are

a few dozen firms, mostly located in Karachi and Lahore, who have technically

qualified staff, equipment such as concrete mixers and rollers and the exper-

ience of handling contracts up to a value of about US$1.0 million annually.

Contractors generally have had more experience in building construction than

in highway work, and apart from locally made steel wheeled rollers, few

domestic contractors hold equipment suitable for highway construction.

Where contractors have had highway experience, it has usually been with the

traditional contracting arrangement for using labor-intensive methods.

2.27 Under the 1976 Flood Rehabilitation Project (Credit 466-PAK), IDA

financed a study of the construction industry which updated a previous study

undertaken in 1974. The study included an extensive survey of contractors

and their needs. Contractors have indicated that they would be prepared to

invest in equipment to enlarge their operations providing they had some

assurance of continuing work and reasonable credit terms. Within the context

of Pakistan, it is difficult to ensure a continuing work program on a planned

basis, although there is a great deal of rehabilitation and improvement work

suitable for contractors that will have to be done to keep the infrastructure

in a serviceable condition. During the preparation of this Project, GOP indi-

cated that they would like to encourage the development of a private road

contracting industry. To promote continuity a study of investment needs

of the road network is now being undertaken (para 2.15), a program to undertake

periodic maintenance by contractors will be established (para 3.17) and funds

will be allocated in this Project to prepare a future project (para 3.03).

2.28 Suppliers of credit are wary about making advances to finance equip-

ment for contractors unless the contractor is able to put up sufficient immove-

able security to cover the advance and interest due, and few are able to do

this. Even to arrange performance bonds is difficult, since the commercial

banks normally require about 40% cash deposit, which they hold without in-

terest, plus 140% in security. Bonds are therefore usually arranged through

1/ During negotiations GOP agreed that in the event that no arrangements

are finalized by March 1980 with the United Kingdom for financing a

program of road maintenance in Punjab, it may arrange funds from another

source or woulld request IDA to assist in financing such maintenance

;_ U JIetr the Credit.

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private insurance companies in return for substantial premiums. Short-termadvances at the start of a contract, usually limited to 30 days' duration,are available through the contractors' own banks once the contractor hasestablished a reputation for sound operation, but the advances are limited insize and not suitable for financing equipment purchase. Contractors oftenrequest and receive an advance of up to 20% of the contract sum at the startof work, and thereafter obtain payment for work done generally within a monthto six weeks of submission of payment certificates. To increase the avail-ability of credit on reasonable terms, Project funds will be allocated to theIndustrial Development Bank of Pakistan (IDBP) for on-lending to contractors(para 3.09).

2.29 As many contractors operate as suppliers of labor only and aredependent on others for equipment, tools and expertise, in the case ofgovernment contracts, the government engineer in charge takes a greater partin job organization and assumes more power than is usual in most countries.Because the contractor does not have the ability to organize and run thecontract, he does not feel he has full responsibility for the work done.The contractual relationship between client (government) and contractor isinequitable under local contract conditions, and there is a need to arriveat a more equal relationship, with contractors having more rights and moreresponsibilities than at present. Possible ways to strengthen managementand improve the conditions of contracts will be investigated through tech-nical assistance provided through the Industrial Development Bank of Pakistan(para 3.10).

F. First and Second Highway Projects

2.30 The First Highway Project with Bank Group support (Cr. 54-PAK forUS$17 million in 1964) encompassed (i) the final engineering and constructionof a new 142 km highway between Karachi and Hyderabad; (ii) the review,design, supervision and construction for three major bridges; (iii) the employ-ment of general consultants for a three-year period to advise and assist theWest Pakistan Highway Department on matters of organization and operation; and(iv) consulting engineering services to carry out feasibility studies of accessto Karachi and Hyderabad. According to the Project Performance Audit datedMarch 12, 1976, the implementation of the project's components was generallyconsidered satisfactory. Only a small cost overrun was incurred (7%) and theroad and bridge constructions were completed mostly on schedule. Unfortu-nately, some claims were handled slowly and finally required internationalarbitration. Delays were also incurred in the creation of a separate highwaydepartment. While the consultants were believed to have made positive con-tributions to the Highway Department their real impact was difficult to assessbecause of the broad nature of their assignment and the subsequent completereorganization of the Highway Department along Provincial lines. With thelarger than projected increase in traffic, the Karachi-Hyderabad Highway nowneeds an overlay. During negotiations, Government confirmed that a programfor the overlay will be commence before June 30, 1980 and be completed beforeJune 30, 1984.

2.31 The Second Highway Project (Loan 578-PAK for US$35.0 million in1968) consisted of (i) the construction of two trunk highways west of Lahore

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totalling about 270 kilometers; (ii) consultant services to (a) continueassistance in reorganizing the West Pakistan Highway Department, (b) preparea transport study for West Pakistan and (c) study and partially designtwo trunk roads. In order to prepare the Second Highway Project, a highwayengineering project (Cr. S-I PAK, US$1 million) was signed in 1966. TheHighway Engineering Project progressed slowly; instead of 15 months as esti-mated at appraisal, it took about 50. When bids were finally called in mid1970 it was found that the cost was three times the original estimate. Thiswas due to a variety of reasons such as inflation (about 30% of difference),the complexity of estimating construction costs, the risks involved in theunstable political situation and the fear of payment difficulties. Attemptswere made to reconstitute the project with less ambitious investments, butGovernment was reluctant to utilize loan financing, and in July 1971 theGovernment and the Bank agreed to cancel the uncommitted balance of US$33.9million. The transport coordination study, which was the only component ofthe Second Highway Project completed, has been considered satisfactory andappears to have had some impact on the transport coordination policy (para1.22).

III. THE PROJECT

A. Background

3.01 Building on the experience gained in the first and second highwayprojects, several features have been incorporated into the Third HighwayProject. Firstly, as recommended in the transport coordination study theproject will concentrate on the rehabilitation and improvement of existingroads rather than on the construction of new highways. Secondly, as thereare still a number of uncertainties in Pakistan, bids were-received on therehabilitation and improvement before undertaking negotiations. Thirdly,concerning institutional improvements, the objectives are much more limitedin scope.

3.02 The general objective of the project is to assist the developmentof the road transportation sector so that it can effectively fulfill thetransport demands of the directly productive sectors of the economy. Morespecifically the project objectives are to:

(a) rehabilitate high-priority roads;

(b) improve road maintenance capabilities at both federal andprovincial levels;

(c) encourage the development of domestic consulting and con-tracting industries; and

(d) improve project planning and administration.

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B. Description

3.03 The project consists of three main components:

(a) rehabilitation and improvement of up to 280 km of nationaland provincial roads;

(b) maintenance of national and provincial roads; and

(c) assistance to the domestic construction industry.

Included in these components are technical assistance and training. In addi-tion, funds are allocated for the preparation of a future project in orderto provide continuity for rehabilitation and improvement works.

Road Rehabilitation

3.04 In 1976 a Third Highway Project Cell was established within theMOC to prepare the present project. Six domestic consulting firms werecontracted in order to undertake feasibility and technical studies for therehabilitation and improvement of 1600 km of national and provincial roadswhich had been jointly identified by IDA and Government officials. Tosupport the development of the domestic consulting industry and to strengthenproject planning, Louis Berger Inc. (US) was contracted (GOP financed) toprovide technical assistance to the Project Cell for the coordination of thepreparation studies. While rehabilitation was economically feasible on almostall selected road sections only about 800 km were selected for final designbased on economic priority and expected available Government resources.However, because the final engineering studies indicated that the structuralstrength of the pavement was lower than indicated in the feasibility studiesand that there was a greater need to raise embankments, construction costestimates substantially increased. Finally, more recently, the June 1979Budget proposals resulted in very considerable cost increases in a numberof construction materials such as bitumen and cement. It is intended thatfurther sections, designs for which are already completed, shall be includedin future projects.

3.05 The road sections include those which are in most serious dangerof failure on or near the main Karachi - Peshawar road. During the 1978monsoon season, several portions of this road were completely closed totraffic for several days while emergency repairs were carried out. Theroad sections selected for rehabilitation, as shown on Map 14188 R IBRD are:

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Road Section Length (km)

NWFPPeshawar - Charsada (Provincial) 27.6Khairabad - Nowshera (National) 29.0

PunjabPart of Lahore Sahiwal (National) up to 125.0

SindPart of Kandiaro-Rohri up to 100.0

up to 281.6

The proposed rehabilitation work consists mainly of raising the existing roadsin low areas, widening where width is substandard, pavement strengthening andresurfacing. All the road sections currently have a two-lane pavement widthranging from 6 to 7.3 m and averaging about 6.7 m. These will be widened tothe standard width of 7.3 m with asphaltic concrete surfacing. The proposeddesign standards are shown on Table 7.

3.06 Supervision is expected to be carried out by the domestic consultingfirms, who undertook the final designs, with assistance from the CoordinatingConsultants attached to the Third Highway Project Cell, which has recently beenincorporated into the Director General of National Highways (DGNH) under theNational Highways Board (NHB). The co-ordinating Consultants' Team willconsist of a team leader, and two superintending resident engineers who willbe replaced by MOC staff in the second year of the project subject to a reviewand satisfactory performance. In addition, the assistance of a soils engineerand paving specialist are needed to establish quality control procedures forthe rehabilitation works. During negotiation Government confirmed theiragreement to the terms of reference for the technical assistance in Annex 1which were discussed during the Appraisal mission.

Road Maintenance

3.07 On the national highway system, the Federal Government has under-taken financial and administrative responsibility and delegated the executionof the maintenance work to the provinces. As part of the Project, the Ministryof Communications plans to establish a monitoring system to supervise andadminister the national highway system, for which the organizational structurehas already been established (Chart No. 3). Such a system would be as simpleand as practical as possible, taking into account the initial poor data base.Of key importance is that frequent field inspection trips be made and that theinspector be of sufficient stature and competency to have a good rapport withsenior provincial highway officials. In addition, equipment for one periodicroad maintenance unit consisting of an asphalt distributor, a preheater, chip-spreader and compactor, tipper trucks, rollers and ancillary equipment (Table8) is to be provided for the Federal Government under the project. Thisunit will act principally as a production training unit for the duration ofthis project for personnel from both the provincial highway departments and

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the contractors. The technical assistance team attached to the Third HighwayProject Cell would support both the maintenance monitoring system and themaintenance training unit. In addition at the federal level, a study toconsider alternative methods of dealing with axle overloading will be under-taken (para 2.20).

3.08 At the provincial level, project emphasis will be mainly concen-trated on improving periodic road maintenance in order to arrest furtherdeterioration. One resealing unit similar to the Federal unit, will beprovided to NWFP, while in Baluchistan, the equipment proposed will serveto improve the efficiency of the present overlay program being carried outon main routes and of regraveling on unsurfaced routes. Technical assistancewill start operation of the soils and materials laboratories and improveplanning and design in both NWFP and Baluchistan and provide practicalassistance in workshop operation in Baluchistan.

Domestic Road Construction Industry

3.09 An independent and technically qualified construction industrywould greatly assist Government in the execution of its development plans.Assistance will be channeled through the IDBP to provide domestic contractorswith advice in company and site management and funds to procure constructionequipment to undertake the rehabilitation and improvement of Project roads.The same facility will be made available to domestic contractors to carry outa periodic maintenance program which will be implemented during the Project.

3.10 The Bank Group is familiar with IDBP, having had a previous project(Cr. 177-PAK) for US$20.0 million in 1970. An evaluation of IBDP can be foundin Annex 2 and is supported by detailed information and data in the projectfile. Since lending to the domestic construction industry will be a new typeof business for IDBP it will be assisted by a road construction specialist.His function will be to advise and assist IDBP with the review of contractors'loan applications and the supervision of the subprojects (Annex 3). He willalso provide assistance to the contractors in management, in particular in theutilization of equipment, and make recommendations to IDBP, GOP and/or IDA forfurther improvements to the domestic construction industry including adjust-ment of contract conditions to modern requirements.

C. Cost Estimates

3.11 The total cost of the project including taxes is estimated at US$93million equivalent with a foreign exchange component of US$34 million equiva-lent (36%). Estimated costs by year are given in Table 9 and more costdetails are given in Tables 10-15. A summary of project cost estimates ispresented on the following page.

3.12 The costs of road rehabilitation are based on bids received onJuly 12, 1979 from eight enterprises, five of which were accepted as beingvalid bidders. The US$5.0 million allocation to IDBP to loan to the domesticconstruction industry is based on a "best estimate" of the likely number ofdomestic contractors who will be awarded contracts and their likely equipmentneeds. Estimates for equipment and technical assistance are also based on

PAKISTAN

THIRD HIGHWAY PROJECT

SUMMARY OF PROJECT COSTS

Millions of Rupees Millions of Dollars

Local Foreign Total Local Foreign Total

I. Road Rehabilitation

(a) Civil Works 303.8 182.3 486.1 30.69 18.41 49.10(b) Supervision 25.1 5.9 31.0 2.53 .60 3.13

Total 1 328.9 188.2 517.1 33.22 19.01 52.23

IT. Road Maintenance(c) Equipment 1.4 13.1 14.5 .14 1.32 1.46(d) Federal Highway Technical Assistance 0.2 0.7 0.9 .02 .07 .09(e) Provincial Highway Technical Assistance 0.4 5.7 6.1 .04 .58 .62(f) Technical Assistance for Axle-

Weight Study 0.5 0.1 0.6 .05 .01 .06

Total II 2.5 19.6 22.1 .25 1.98 2.23

III. Domestic Construction Industry

(g) IDBP - 45.9 45.9 - 5,00 5.00(h) Technical Assistance (UNDP Financed) 0.2 1.2 1.4 .02 .12 .14

Total III 0.2 50.7 50.9 .02 5.12 5.14

IV. Project Preparation(i) Proposed Third Highway Pro ect 23.1 3.1 26.2 2.34 .31 2.65(i) Possible Fourtl Highway Project 3.2 0.8 4.0 .32 .08 .40

Total IV 26.3 3.9 30.2 2.66 .39 3.05

TOTAL PROJECT (I, II, III & IV) 357.9 262.4 620.3 36.15 26.50 62.65Total Quantity Contingency 33.3 20.0 53.3 3.36 2.02 5.38Total Price Contingency 88.9 52.8 141.7 8.98 5.33 14.31

TOTAL WITH CONTINGENCIES 480.1 335.2 815.3 48.49 33.85 82.34Taxes 107.2 - 107.2 10.83 - 10.83

TOTAL WITH CONTINGENCIES & TAXES 587.3 335.2 922.5 59.32 33.85 93.17

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recent prices for similar items and on recent technical assistance proposalsrespectively, both under similar circumstances. The total cost of providing101 man-months of technical assistance to the Third Highway Project Cell isestimated to be about US$880,000. The average man month cost including salarycost, fee, international travel and subsistance is about US$8,300. Thesupervision of the rehabilitation works will require about 1,000 professionalman months of domestic consultancy services with a total cost of US$2.4 mil-lion equivalent and a man month cost of about US$1,100 equivalent. In addi-tion, technical assistance to the Provincial Departments in NWFP andBaluchistan and to IDBP total about 104 man months costing about US$750,000with a man month cost of about US$7,000. A quantity contingency of 5% hasbeen added on equipment and spares and 10% on all other items except the ThirdHighway Project preparation studies and assistance to the domestic constructionindustry. For price increases on foreign exchange items an annual increase of6% has been allowed on equipment and 7% on other items. On local costs, a15% annual increase has been allowed in 1979, 12% in 1980 and 10% in 1981and 1982. 1/

D. Financing

3.13 The proposed IDA credit of US$50.0 million will finance about 54%of the total cost (about 60% excluding taxes and duties). The credit wouldtherefore cover foreign exchange cost plus about US$16.0 million of localcost. Included in this amount is US$1.0 million for retroactive financing forproject preparation work which consists of US$320,000 of foreign exchange forinternational services and US$680,000 of local costs for international anddomestic consultancy services. In addition to IDA financing, the UNDP hasagreed to finance the IDBP road construction advisor and a project documentwas signed during March 1979. As shown in Table 12, the amount to be financedby UNDP is estimated at US$144,000. The remaining project costs would amountto about US$43.0 million equivalent including US$11.0 million equivalent fortaxes and duties and would be met by Government. During negotiation IDAdiscussed and agreed with Government that adequate local cost financingwould be made available in a timely manner.

E. Implementation

3.14 The project will be under the responsibility of the Ministry ofCommunications. Within the Ministry, the DGNH under the NHB will executeand coordinate the various project activities. IDBP will be responsible forrelending funds to domestic road contractors. Technical assistance willbe provided to assist in the execution of various project components. Thetiming of implementation of the various project components is shown in Chart4 (IBRD 20742).

Road Rehabilitation

3.15 As a result of negotiations with bidders in November 1979, Lettersof Intent have been issued for three road sections and rebids for three other

1/ This is based on a projection of the investment deflator in Pakistanwhich is currently increasing at a 15% annual rate.

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contracts are due in late January 1980. The award of the civil works contractswill be completed before credit effectiveness. The works in NWFP are expectedto be completed in two years. The other larger road sections between Lahoreand Sahiwal in Punjab and the Kandiaro - Rohri in Sind, are expected to becompleted in three years. Supervision will start at the commencement of theproject in the case of the Coordinating Consultants whose contract has alreadybeen agreed with Government for signature in January 1980, and a schedule oftheir services is presented in Chart 5 (IBRD 20131). Contracts for construc-tion supervision by domestic consultants will be awarded before credit effec-tiveness. In the consultants' contracts allowance is being made for super-vision and inspection during the maintenance period after construction iscomplete.

Road Maintenance

3.16 During negotiations details on a monitoring system for the NationalHighways were discussed and it was agreed that, by March 31, 1980, a systemwould be implemented with the help of the technical assistance team to theDGNH. Specifications for the maintenance equipment for Federal Government,NWFP and Baluchistan will be prepared by the DGNH with the assistance of theCoordinating Consultant. The Federal Government resealing team will be usedfor training and emphasis will be given to the organization and correct exe-cution of work. About 15 to 20 foremen, operators and mechanics at a timewill be sent to work with the Federal team for periods of about two monthseach. To allow for possible losses to other employment, at least twice thenumber necessary will be trained, and the total, including contractors' per-sonnel (para 3.07) will amount to about 160 men during the project period.During negotiations it was agreed with Government that a road maintenancetraining program satisfactory to IDA would commence by December 31, 1980.Also, the study of vehicle axle overloadings will be completed by September 30,1980, with an agreed plan of action by December 31, 1980 and implementationcommencing by March 1981.

Domestic Road Construction Industry

3.17 Initial discussions between IDBP and domestic bidders for rehabili-tation work took place while the bids were being assessed and sub-loans willbe finalized after contracts are awarded. GOP's relending conditions to IDBPand IDBP's lending conditions to contractors are detailed in Annex 2, andthese were discussed and agreed at negotiations. IDA will act as the execut-ing agency for the UNDP financing of the construction advisor, who arrivedin Pakistan while project negotiations were in progress. Once procurementarrangements are finalized with domestic contractors undertaking the rehabili-tation works, attention can be turned towards contractors undertaking mainte-nance work. During negotiations Government agreed to prepare the periodicmaintenance program which will be suitable for domestic contractors by June 30,1980 and begin implementation of the program by December 31, 1980. Contractorswill be required to have sufficiently trained staff or send their staff toparticipate in the training scheme for road maintenance.

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Preparation for Future Project

3.18 Since final designs already exist for nearly 600 km of road and aroad investment survey is now being undertaken, future project studies need

not start until after a period of about 18 months. At that time, if theprojects for which designs have already been prepared are not in executioncost estimates will be updated. In addition, other road sections may beincluded or substituted with the approval of the Association. Based onthe experience gained in the preparation of the Third Highway Project, itis expected that further studies can be carried out by the DGNH using domesticconsultants. The Coordinating Consultant would also be available to provideassistance as necessary.

F. Procurement

3.19 At the time of negotiations, the following procurement arrangementswere discussed and agreed with GOP:

(a) Road rehabilitation contracts, undertaken on the basis

of international competitive bidding, with a 7-1/2% pre-ference to domestic firms, in accordance with IDA's"Guidelines for Procurement" will be submitted to IDAfor review before issuance of award;

(b) Technical assistance will be provided by qualified andexperienced consultants and experts on terms and conditionsacceptable to the Association;

(c) Maintenance equipment will be procured on the basis ofinternational competitive bidding with a 15% preference, orthe amount of the import tariff, whichever is less, allowedon locally assembled items in accordance with IDA's "Guidelinesfor Procurement". Items costing under $25,000 equivalentwith a total not exceeding US$200,000 equivalent could be

procured locally under GOP's normal procedures, which areacceptable to the Association. IDA will review contracts,specifications and related documentation for all bids esti-mated to cost US$25,000 equivalent or more; and

(d) Procurement of equipment by contractors will be in accordancewith IDBP's normal procurement procedures, which are accept-able to IDA. The road construction advisor will assistIDBP and the contractors with procurement decisions.

G. Disbursements

3.20 Disbursements from the credit account which were discussed andagreed with GOP during negotiation would be made on the basis of:

(a) 100% of foreign expenditures or 40% of local expendituresfor rehabilitation and improvement works;

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(b) 100% of foreign expenditures for equipment, spare parts andsupplies including laboratory equipment, training aids andtraining materials; or 100% of local expenditures (ex-factorycost) for locally manufactured goods; and 60% of localexpenditures for other goods procured locally (off-the-shelf);

(c) 100% of amounts disbursed on account of foreign expendi-tures of IDBP sub-loans made to the constructionindustry; and

(d) 100% of expenditures for consultants' services and advisors,with a maximum of US$1.0 million for retroactive financing.

All disbursements will be fully documented. Based on the aboveand on the implementation schedule (Chart 3), the schedule of disbursements(Table 16) has been prepared.

3.21 In case the allocated funds to IDBP were not fully committed tocontractors of the Third Highway Project after 18 months, funds could be lentto domestic contractors engaged in other road works in Pakistan to assist thegeneral development of the road construction industry.

H. Environmental Effects

3.22 The proposed rehabilitation, improvement and maintenance works willbe carried out on existing roads and, except for very short sections wherecurves are being realigned, within the existing road right-of-way. The Proj-ect is not expected to have any detrimental effects on the environment and itshould improve the rural environment by providing better access to markets,schools and medical facilities.

I. Monitoring and Reporting

3.23 During the implementation of the Project, quarterly reports out-lining the progress and problems encountered will be submitted to IDA. Inaddition, the Government will prepare a Project Completion Report within sixmonths after the closing of the project. Details of Project monitoring andreporting, as shown in Annex 4, were agreed during negotiations.

IV. ECONOMIC EVALUATION

A. Benefits and Beneficiaries

4.01 Road transport plays an important role in the economy of Pakistan --accounting for about 62% of total ton kilometers and 80% of total passengerkilometers. The Project is designed to prevent deterioration of vital roadsections of Pakistan's transport system. These road sections carry signifi-cant traffic volumes since they serve important centers of economic activity.They have exceeded their economic life and the break up of the roads willaccelerate even with intensive maintenance; transport costs will rise; and

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the economy will suffer as transport requirements are not met economically.As witnessed during the last monsoon when some main roads were closed forseveral days, this process is already happening.

4.02 Most of the benefits will accrue in terms of reduction of vehicleoperating costs. When the road is improved, significant savings will result infuel consumption, tire wear and vehicle maintenance and depreciation. Also,future road reconstruction costs will be delayed. In addition, the Projectis expected to yield significant institutional benefits in terms of improvedproject planning and execution capacity, improved road maintenance andexpansion of domestic contractor capabilities.

4.03 Benefits from the proposed road Project will be widely distributed.In the case of transportation of goods, since trucking is competitive, mostof the transport savings will be passed on from the transporter to the con-sumer in terms of lower prices and increased product availability. Forpassenger transport, because rates are currently fixed by Government, thetransport savings will accrue at first to the bus owners, both public andprivate. However, in the long run lower and middle income groups shouldbenefit when rates increases are deferred to reflect changes in costs.

4.04 Benefits have been measured separately for the road rehabilitationand maintenance components. Benefits have not been quantified separately forthe road construction industry component. Where appropriate, the costs ofsupervision and technical assistance have been added to the costs of thevarious components when calculating the economic rates of return. Details ofthe calculation of benefits and costs can be found in the consultant's reportsand in the Project file. A weighted average rate of return (ER), of about50% for the entire Project is estimated based on an evaluation of 91% ofthe project costs for which benefits have been quantified.

B. Road Rehabilitation

4.05 Most of the road sections for rehabilitation lie along the newlydesignated national highway which runs from Karachi to Peshawar (about 2,000km) and connects the major cities of Hyderabad, Multan, Lahore, Gujranwala,Rawalpindi and Islamabad. Not only are the major cities connected by thisroute, but the road traverses the major agricultural production areas of thecountry, and thus provides important access for the marketing of agriculturalproducts. Traffic surveys undertaken during the preparation of the projectindicate that about 30% of the traffic involves long distance inter-provincialtrips while the remaining 70% of the trips were intra-district and intra-provincial.

4.06 Present traffic volumes on the project sections vary from about3,000-3,500 ADT in rural areas to about 3,500-4,000 ADT nearer the largeurban areas. About 70% of the volume of traffic in rural areas is heavytraffic (trucks 55%, buses 15%). The projected traffic growth rate rangedfrom about 5 to 9% per annum for individual road sections and vehicle types(Table 17).

4.07 During the feasibility studies, several levels of rehabilitationand improvement were analyzed over a 20 year period. This was done by

- 26 -

undertaking investment programs which were designed to maintain differentlevels of service based on the Highway Design Manual. 1/ The studies indi-cated that the highest returns were obtainable by rehabilitating the existingtwo lane road rather than the construction of a new four lane facility. Theseresults reconfirm the conclusion of the transport coordination survey carriedout under the Second Highway Project (para 3.01).

4.08 In the final feasibility analysis the vehicle operating costs wereprojected both without and with the proposed rehabilitation project over a10 year period, after construction. The user costs were prepared by thecoordinating consultant and took into account fuel, oil, tire consumption,vehicle maintenance, depreciation and operator time costs. The differencesin operating costs or savings were then compared with bid construction costsand net maintenance costs. To facilitate processing and study of variousalternatives, IDA's computerized Highway Design Model was utilized and thecomputer runs are in the project file.

4.09 The economic rates of return (ERs) for rehabilitation and improve-ment of the project road sections are estimated to vary from 41 to 85%,(Table 18). These returns are high, but they are not unusual for this typeof rehabilitation project with high traffic volumes. A sensitivity test,assuming a shorter 5 year project life to allow for the major risk that thepavement was not properly constructed, yields ERs ranging from 35 to 75%.Assuming that benefits decreased by 20% and costs increased by 20%, the ERswould range from 29 to 54%. With such high returns the risks of poor con-struction, higher costs and lower traffic volumes appear to be within reason-able limits and the projects are recommended.

C. Road Maintenance

4.10 The proposed Project would include the establishment of two periodicmaintenance units under Federal Government and in NWFP and some maintenanceequipment to Baluchistan. In addition training and technical assistance wouldbe provided. The main justification for this component is that it will pre-vent the roads from reaching a stage where they incur serious damages andthus would necessitate rehabilitation and reconstruction. As with rehabili-tation, the main benefits of the maintenance component would be obtained interms of a reduction in user costs. It is estimated that each periodicmaintenance unit can undertake about 100 km of resurfacing per year. Theaverage daily traffic for the type of roads to be resurfaced is estimated tobe about 400 vehicles per day. The evaluation only considers benefits derivedfrom a reduction in tire wear, maintenance parts and labor costs which aremost sensitive to changes in road roughness; other key assumptions andcalculations are shown on Table 19.

4.11 The evaluation indicated that the maintenance component will havean ER of 120%. As is the case with most maintenance projects the rates ofreturn are extremely high because the construction cost involved (patching and

1/ American Association of State Highway Officials 1965.

- 27 -

resealing) is relatively small, while nearly full benefits are obtained fromthe improvement of the riding surface and prevention of further deterioration.If the average ADT were reduced by 20% and production rates were not as highas expected with costs increasing by 20%, the ER would still be high at about70%. As with the rehabilitation and improvement works the risks appear to beacceptable and the project component is recommended.

Road Construction Industry

4.12 Assistance to the domestic construction industry includes the chan-nelling of the funds through IDBP for the purchase of construction equipmentand technical assistance. The main benefit from this component is that astart will be made towards the development of an efficient road constructionindustry. The justification for the rehabilitation and periodic maintenanceworks which includes the cost of equipment has been demonstrated above. Al-though experience in other countries has indicated higher productivity andlower costs by contracting, Project construction costs will be closely moni-tored in order that they may be compared with other methods of constructionin order to obtain a measurement of construction cost savings.

V. AGREEMENTS REACHED AND RECOMMENDATIONS

5.01 During negotiations, the following specific aspects of the projectwere discussed and it was agreed that:

(a) construction of the new Indus Highway will notproceed during the Plan period 1978-83 (para 2.15);

(b) IDA will be given the opportunity to review and comment onGovernment's highway sector investment plans (para 2.15);

(c) Government had made a substantial increase in maintenanceallocations for the highways during 1979-80 and thatGovernment intends, based on a target allocation, toincrease and maintain maintenance expenditure at anadequate level which will be discussed annually withIDA (para 2.17);

(d) the overlay of the Karachi-Hyderabad Highway will commenceby June 30, 1980 and be completed before June 30, 1984(para 2.30); and

(e) adequate local cost financing will be made availablein a timely manner (para 3.13);

(f) a monitoring system for the national highways will beimplemented by March 31, 1980 (para 3.16);

- 28 -

(g) a road maintenance training program satisfactory to IDAwill commence by December 31, 1980 (para 3.16);

(h) Government will complete a study of long-term alterna-tive methods of dealing with vehicle overloading, bySeptember 30, 1980, with an agreed plan of action byDecember 31, 1980 and implementation commencing byMarch 31, 1981 (para 3.16);

(i) Government's relending conditions to IDBP and IDBP'slending conditions to contractors will be as set outin Annex II hereof (para 3.17); and

(j) a periodic road maintenance program suitable for con-tractors will be prepared by June 30, 1980 and imple-mentation will begin by December 31, 1980 (para 3.17).

5.02 Conditions of credit effectiveness are that:

(a) Province Project Agreements and the IDBP ProjectAgreement shall have been duly authorized andratified;

(b) GOP and IDBP shall have entered into a satisfactorySubsidiary Loan Agreement;

(c) GOP shall have entered into contracts with consultantsto carry out supervision; and

(d) GOP shall have entered into contracts with contractorsto carry out the rehabilitation works. .

5.03 The Project provides a suitable basis for an IDA Credit of US$50million equivalent to Pakistan. A portion of the credit, US$5.0 million,will be relent to IDBP at 8%. Repayment by IDBP to Government will be madeon a flexible amortization schedule in approximate conformity with repaymentsreceived by IDBP from sub-borrowers up to a maximum period of fifteen years.

- 29 - ANNEX 1

Page 1

PAKISTAN

THIRD HIGHWAY PROJECT

Provision of Coordinating Consultancy Services

Terms of Reference

A. Background

1. The Government of Pakistan has prepared a highway rehabilitationand maintenance project which has been appraised by the International Devel-opment Association (IDA). The Government intends to seek a credit under IDAterms to enable the project to be carried out within a period of about threeyears, commencing in early 1980. The project will consist of:

(a) rehabilitation by contract of up to 280 km of nationaland primary highways;

(b) improvement of highway maintenance;

(c) assistance to the domestic contracting industry; and

(d) technical assistance and future project preparation.

2. The principal objectives of the project are to strengthen theFederal and Provincial Highway authorities, encourage the development of thedomestic construction industry, and improve the road network according tosound economic and engineering standards.

3. In order to assist Government to undertake the project, it is de-sired to retain the services of a recognized and experienced firm of consult-ing engineers to provide the services described herein.

B. Scope of Consultancy Services

General

4. The Coordinating Consultant will be attached to the DirectorateGeneral of National Highways. In the conduct of their work, the CoordinatingConsultants will cooperate fully with the Ministry of Communications of theFederal Government of Pakistan, Provincial Highways Departments and otherGovernment Ministries and Departments. The Government of Pakistan willprovide the facilities and services outlined in Part IV hereof.

-30 - ANNEX IPage 2

5. Survey and design of the roads selected for rehabilitation have beencompleted, bids have been received and evaluated for some sections and Lettersof Intent issued to contractors. It is expected that construction will com-mence within three months of the start of the consultancy services, and thatindividual construction contracts will be supervised by domestic consultants.

Award of Contracts for Road Rehabilitation

6. In the event that award of contracts for rehabilitation or recon-struction of highways has not been completed, the Coordinating Consultantwill assist Government to evaluate bids received on the basis of IDA Guide-lines for Procurement, and will advise Government on the award of contractsand during any negotiations with bidders.

Supervision of Road Rehabilitation Works

7. The supervision of individual construction contracts is intendedto be carried out by domestic consultants. The Consultant will act as coor-dinating agent for Government and the Consultants' duties will include, butnot necessarily be limited to:

(a) ensuring that domestic consultants carry out all the obli-gations required of them in accordance with the constructioncontracts concluded between the Government and the contractoror contractors for the works to be done under the project, andbringing to the attention of Government any errors or omissionson the part of the domestic consultants;

(b) ensuring that the set.ting out undertaken by the contractoris adequately checked;

(c) advising and assisting domestic consultants, where required,to set up and operate adequate quality control procedures,and ensuring that such quality control procedures are effec-tively applied to all necessary construction operations;

(d) advising Government on sections of the work which should beaccepted or rejected, as recommended by domestic consult-ants;

(e) recommending to Government, after discussion with domesticconsultants, any reasonable changes in the plans, designsand specifications which may prove necessary or desirableduring the course of the project, and advising on suchchanges;

(f) making recommendations to Government on possible reductionsin expenditure during the course of construction;

- 31 - ANNEX 1

Page 3

(g) assisting domestic consultants, where necessary, to arriveat suitable and economic job mix formulae for asphalt con-crete surfacing and bituminous bound base materials;

(h) checking the progress of the works, amounts of materialsremaining in stock and payments to contractors, and advis-ing Government in due time where any significant over-expenditure appears likely;

(i) reviewing and countersigning monthly payment certificates/and Completion Certificates prepared by domestic consult-ants authorizing payments to contractors, as an indicationthat the Coordinating Consultant is satisfied that super-

vision has been adequate and effective and that the workcompleted has been in general accord with the design andspecifications;

(j) supervising, on behalf of Government, final measurements oncontracts, advising Government on remedial work to be done,if any, accompanying domestic consultants on final inspections

and advising Government on payment of retention monies tocontractors;

(k) cooperating with domestic consultants to examine any claimsmade by contractors for extension of time, payment for extrawork, revision of rates and any other similar matters, andmaking recommendations to Government on the outcome; and

(1) assisting Government in settlement of disputes which may

arise between Government and contractors, but excludingarbitration, for which separate arrangements will be madeif necessary.

Highway Maintenance

8. The Coordinating Consultant will assist and support the ThirdHighway Project maintenance activities, and in particular, assist:

(a) in the formulation and implementation of a practical roadmaintenance inspection and monitoring system coveringNational Highways;

(b) in coordinating on-the-job training activities for bothprovincial and contractor personnel to be undertaken inPunjab; and

- 32 - ANNEX IPage 4

(c) in preparation and review of contracts for maintenance workin Sind Province.

9. In addition to the above the Coordinating Consultant will provideliaison with the Road Construction Advisor assigned to the Industrial Develop-ment Bank of Pakistan (IDBP) and assist, if necessary, with the preparationof a possible future Fourth Highway Project.

C. Staffing

10. The Coordinating Consultant will maintain throughout Pakistan suf-ficient and properly qualified and experienced staff to undertake the dutiesdescribed in para. 2.4 hereof. It is expected that the following staff willbe required:

1 Team Leader, who should be an highway engineer having experienceof contract management in a senior capacity;

2 or 3 superintending resident engineers to coordinate groups ofcontracts supervised directly by one or more domestic con-sultant firms;

i soils/materials engineer, part time, to advise on quality controlrequirements and to supervise such control; and

l surfacing specialist, part time, to advise on mix formulae andassist domestic consultants during the early stages of sur-facing or bituminous bound base work.

11. In addition, the Coordinating Consultants will also be prepared,if required, to propose suitable staff for short period assignment to the-project on similar terms to those agreed for the team supervising rehabili-tation works.

D. Records and Reports

12. The Coordinating Consultant shall keep full records relating tothe performance of the work described in these terms of reference, and suchrecords will be available for inspection by Government at all times. Thesuperintending resident engineers will maintain clear, legible and comprehen-sive diaries concerning the contracts for which they have responsibilities.They will also ensure that domestic consultants and contractors keep a fullrecord of all relevant test results, and these will be available for inspec-tion at all times.

13. The Coordinating Consultant will prepare a concise but comprehen-sive report at monthly intervals, outlining the progress of the work, generalperformance of domestic consultants and of contractors, particular difficultiesencountered and a description of how they are to be overcome, and a forecastof future work and expenditure. This report may be a resume of similar

- 33 - ANNEX 1Page 5

reports made by domestic consultants, to which the Coordinating Consultantshave added explanation and comment. This monthly report will be delivered,S copies to Government and 3 copies to IDA, through the IBRD Office inIslamabad.

E. Services and Facilities to be Provided by Government

14. The following services and facilities will be provided by Governmentto the Coordinating Consultants free of charge:

(a) suitably financed and equipped office accommodation inIslamabad for the team leader together with telephone,electricity, air conditioning, heating and toilet facil-ities;

(b) suitably furnished and equipped office accommodationfor each superintending resident engineer, with similarfacilities;

(c) additional office accommodation with similar facilities,as required, for team members on part time assignment;

(d) office and support staff to include typists (Englishlanguage), clerks, cleaners, watchmen and drivers;

(e) stationery and office equipment as required for thegeneral consultants to perform their services;

(f) internal air travel in relation to the project;

(g) suitable vehicles for the work to be undertaken at thescale of one vehicle per member of the consultants' team,four wheel drive where necessary; members of the consult-ants' team shall be entitled to use the vehicles forreasonable personal transport;

(h) fuel, lubrication, repairs and servicing for the vehiclessupplied;

(i) assistance, where required, to the consultants' staff tolocate and obtain suitable living accommodation, for thecosts of which, consultants' staff will be responsible;and

(j) in connection for work by the consultants which requiresthe cooperation or assistance cf other Government Ministriesor Departments, Government will provide the necessary author-ities, introduction or liaison.

15. In order to monitor project progress, Government intends to pro-vide full time one Project Director to work with the team leader and oneproject engineer to work with each superintending resident engineer.

-34- ANNEX 2Page 1

PAKISTAN

THIRD HIGHWAY PROJECT

The Industrial Development Bank of Pakistan

Construction Industry Component

General

1. The Industrial Development Bank of Pakistan (IDBP), which was estab-lished in 1961, is totally owned by GOP, the provincial governments, and GOP-owned institutions. The total staff is 646, of whom 298 are officers. Overthe last few years, IDBP's organization has been streamlined considerably, andappraisal and follow-up procedures improved. These are now adequate. IDBP'sprocurement and disbursement procedures are also satisfactory.

2. In FY78 (ending June 30), IDBP's gross approvals were Rs 217 million,of which Rs 157 million were in foreign currency and Rs 60 million'in localcurrency. These figures represented an increase over FY77, thanks to theupswing in private sector investment interest, but are still relatively lowcompared to some earlier years. However, IDBP's operations are now lessconcentrated on textiles than in earlier years, so that its lending is nowdiversified over a large number of industrial subsectors. IDBP's lending isprimarily for organized small and medium scale industries.

3. IDBP's major problem is its low collections and high arrears. Thisdates back to the many economic and political changes that took place at thetime of independence of Bangladesh and the subsequent massive rupee devalua-tion. In the following years, political uncertainties, nationalizations, the1977 disturbances, the prolonged difficulties for the important textile sub-sector, and the decline of the rupee (which is tied to the US$) in relationto a number of strong currencies have caused the arrears to increase further.In response to this situation, IDBP has increased its follow-up efforts con-siderably, but this has not yet had the desired effect due largely to an inade-quate legal system that has caused court cases to drag out for many years. Itseems likely that GOP will now take steps to improve the legal system in thisregard. Due to its low collections, GOP has provided liquidity support throughthe State Bank of Pakistan, and this will be continued, if necessary. However,despite the low collections, most of IDBP's loans are well secured so thatpresent provisions for bad and doubtful debts (Rs 77 million) are adequate.IDBP's accounts are certified by its auditors without any qualifications.

-35 ANNEX 2Page 2

4. The Bank Group has made one credit to IDBP (Credit 177-PAK for $20million) 1/ for financing Pakistani industry. The credit became effective inJune 19707 However, the subsequent separation of Bangladesh severely affectedIDBP's operations, and IDA discontinued authorizing withdrawals. In April1974, utilization was resumed under new arrangements which involved the con-version of the unallocated balance (US$10.8 million) into a managed fund admin-istered by IDBP (without liability) on behalf of GOP. These arrangements weredevised because, while IDBP had recovered its operational capacity, it wasstill not creditworthy since it remained liable for borrowings incurred tofinance assets in Bangladesh over which it had lost control. Since that time,GOP has made assurances to the effect that this is no longer a problem forIDBP. Credit 177-PAK was closed in February 1978, but the Bank remains inclose contact with IDBP.

The IDBP Component

5. Purpose. It is desirable that the local civil engineering contract-ing industry should undertake portions of the work under the present project.However, as discussed in Chapter 2, Section E, this industry is not fullyequipped to perform such work satisfactorily; both financial and technicalassistance is required in this regard. While there are a number of experienceddomestic contractors in Pakistan, they require some assistance to obtain anduse effectively the necessary equipment, which will be imported, and theyrequire guidance in the best methods to achieve the high quality standardsrequired under the project. The IDBP component is designed to provide thisassistance. Besides providing assistance to contractors under this project,the component has the following objectives:

(a) To make a start in assisting the domestic contracting indus-try, which is important for local development and also hasexport potential in the medium term; and

(b) To prepare IDBP for a continued involvement in the financingof the contracting industry, which has had great difficultiesin obtaining institutional finance. Although IDBP's involve-ment under this project would only be with highway construc-tion and maintenance, the experience would also be applicablefor other types of contracting.

6. IDBP Policies. Under its present Policy Statement, IDBP may financethe construction industry only for the import of construction and engineeringequipment. IDBP will now amend its Policy Statement to permit it in thefuture also to finance locally fabricated machinery for the constructionindustry. Also, under its present Ordinance, IDBP's lending limits are low(e.g. only Rs 4 million for limited liability companies 2/). However, the

1/ The Asian Development Bank (ADB) has made three loans to IDBP.

2/ Under a proposed revised Ordinance, the limit will be increased toRs 15 million.

- 36 - ANNEX 2Page 3

limits do not apply in a number of important sectors, and for other projects,IDBP may exceed the limits with the prior approval of GOP.

7. Component Size. Contracts are planned within the project, bothfor road rehabilitation and periodic maintenance, which are of suitable sizefor domestic contractors, and these contractors will be provided creditthrough IDBP for appropriate mechanical highway equipment. Based on an esti-mate of the likely number of domestic contractors who will win rehabilita-tion and maintenance contracts and their equipment needs an allocation ofUS$5.0 million has been made for this component.

8. As discussed above, the amount of the component has been determinedin view of the likely demand for funds from contractors under this project.However, it is possible that the demand will be less than now expected. Ifafter 18 months, this appears to be the case, IDA would permit IDBP to usethe remaining funds to finance other contractors for the import of equipmentfor road construction and maintenance work following the same procedures andpolicies as outlined for project works. 1/ With the closing date of June 30,1984, IDBP would have sufficient time until June 30, 1983 to commit fundsunder the component, leaving one further year for disbursement. This isshorter than for normal DFC operations, but is considered sufficient for thetype of equipment financed under this component.

9. Eligible Firms. Firms with at least 51% local ownership would beeligible under the component. Both public and private companies would beeligible, but public firms should not be given any advantage through subsi-dization in the bidding under the project.

10. IDBP Lending Terms. The funds under this component will be relentby GOP to IDBP at 8%, with GOP carrying the exchange risk. The lending rateto sub-borrowers would be the rate charged on all foreign exchange loans forindustrial purposes in Pakistan, i.e. 11%. GOP would carry the exchange riskfor a special fee of 2% which will be passed on to the sub-borrowers. Thiswill be in addition to the 11% re-lending rate. Lending to contractors is anew activity for IDBP, and it involves greater risks than its normal lending.Therefore, the interest spread of 3.0% which is greater than IDBP's presentspread of 2%-2.5% (which is low) is justified.

11. IDBP would determine the maturity of the subloans on the basis ofthe expected economic life of the equipment and the forecast repaymentability of the sub-borrowers. This is likely to result in maturities of 6-7years with about one year's grace from opening of L/C. The maximum repaymentperiod for the individual subloans would be 10 years including grace. Repay-ment to GOP would be made on a flexible amortization schedule up to a maximumperiod of 15 years in approximate accordance with the aggregate maturities ofthe sub-projects.

1/ IDBP would have the right to reject any applications under this compo-nent, whether connected with the project or not.

- 37 - ANNEX 2Page 4

12. Security. For its normal term lending, IDBP requires security inthe form of a mortgage on fixed assets. However, local contractors may notpossess any fixed assets, and the equipment to be financed is movable. There-fore, alternative methods of security would be required. As a rule, IDBP wouldexpect the following security under this project:

(a) the equipment to be financed would be hypothecated toIDBP;

(b) in addition, IDBP should receive outside collaterals for50% of the amount financed under the project;

(c) the Government would deduct from payments to be made tothe contractors the amounts of loan due to IDBP and paysuch deductions directly to IDBP;

(d) a lien in favor of IDBP should be established over anyofficial deposits by the contractors (such as retentionmoney) under the project; and

(e) a no objection certificate from IDBP would be required totake the financed machinery out of the country legally.

13. Procurement. The procurement under the project will follow IDBP'snormal procedures, which are satisfactory and conform to standard DFC pro-cedures. The road construction adviser will advise IDBP in the procurementdecisions, including ways to take into account factors such as servicing,availability of spares, and desired standardization of equipment.

14. Under the project, spares may be financed with new equipment asfollows:

(a) For new equipment - a reasonable amount of spares would beincluded. If this should be very substantial, IDBP mightwant to reserve the right to provide delivery in install-ments for an agreed list, to avoid the possibility of resaleof the spares on the part of the contractors; and

(b) For existing equipment - spares may be provided for machineryto be used on site for this project.

15. Free Limit. Since this is a new activity for IDBP, a substantialportion (i.e. about 60% by amount and 30% by number) of the subprojects willbe submitted to IDA for prior review. Accordingly, the free limit has beenset at US$150,000 with an aggregate free limit of US$3.5 million.

16. Internal Arrangements. IDBP has designated its Engineering Depart-ment as responsible for this component, although appraisals will be done in

-38- ANNEX 2Page 5

close cooperation with the Loan Department. Since this is a new activity forIDBP, all subprojects under the credit component will for the time beingbe appraised and supervised at the head office, regardless of size. 1/

17. A construction industry advisor, financed by UNDP, has been providedto IDBP for this component. His TOR are in Annex 3.

18. Summary. IDBP is a reasonably well organized and managed institu-tion. Its major problem is its high arrears, but this will not affect itsfinancial viability or the execution of the proposed component. Its appraisal,procurement, disbursement and follow-up procedures are satisfactory. Duringnegotiations, the following matters were agreed regarding IDBP:

(a) the financing of local equipment for the contracting indus-try in IDBP's Policy Statement (para 6);

(b) the financing of subprojects above IDBP's normal lendinglimits (para 6);

(d) Lending terms (para 10);

(e) Security arrangements (para 12); and

(f) Free limit (para 15).

1/ Normally, smaller subprojects are handled by IDBP's regional offices.

-39 - ANNEX 3Page 1

PAKISTAN

THIRD HIGHWAY PROJECT

Terms of Reference for Road Construction Advisor(Excerpts taken from UNDP Project Document)

PART II A. Development Objective(s)

The main development objective of this project isto improve the resources and capabilities of the roadconstruction industry so that it can effectively under-take construction works and contribute towards thedevelopment of the country.

B. Immediate Objective(s)

- The primary immediate objective of the project is toprovide an advisor to support the Industrial Develop-ment Bank of Pakistan (IDBP) in their evaluation ofconstruction projects and the negotiations and loanadministration with domestic contractors who wish touse the financing facilities provided, in order topurchase highway construction equipment.

- A second objective will be to assist and advise con-tractors in the selection, operation and maintenanceof equipment, which will also protect the investmentmade by IDBP.

- A third objective is to obtain recommendations,during the course of the advisor's work, on measuresto be taken by GOP, IDBP and/or IDA to further encour-age the development of the construction industry.

- A fourth objective is to improve the capability ofIDBP to engage in operations of a similar nature infuture by providing training for one member of stafffor six months.

C. Special Considerations

Not applicable.

- 40 - ANNEX 3Page 2

D. Background and Justification

1. Background

The Government of Pakistan has prepared a highwayrehabilitation and maintenance project, which has beenappraised by the International Development Agency (IDA).The Government intends to seek credit under the IDA termsto finance the project within a period of about threeyears commencing in the second half of 1979. The IDArehabilitation and maintenance project is expected toconsist of:

(i) rehabilitation by contract of about 300-400 km ofnational and primary highways;

(ii) improvement to highway maintenance operations;

(iii) assistance to the domestic construction industry;

The contracts under the IDA project will be for bothroad rehabilitation and periodic maintenance and some willbe of suitable size for domestic contractors to undertake.IDA proposes to provide financial support through theIndustrial Development Bank of Pakistan for such contrac-tors to purchase appropriate mechanical equipment in orderto undertake the work in a manner which will improve thequality of work done and reduce costs. As part of thisprocess the services of an experienced road constructionadvisor are required in IDBP.

E. Outputs of the Project

1. The advisor will keep full records relating to hiswork with IDBP, such records to be available forinspection at all times. He will maintain a diary ofdiscussions held with contractors and of site visits,this diary to be in a clear and legible form andavailable for inspection at all times.

2. The advisor will make a concise but comprehensivebimonthly report on his activities to IDBP (2 copies)and the Third Highway Project Cell (1 copy), outlininghis activities during the previous month, assessingcontractors' performance and utilization of equipment,detailing difficulties that have arisen and actionsto overcome them and forecasting probable futureprogress.

- 41 - ANNEX 3Page 3

3. Subject to any revisions suggested in the WorkPlan to be prepared by the advisor, his outputswill consist of:

Months 1-6: Activities F.l.(i) to (v) andF.2(i) to (iii) below;

Months 7-12: Activities F.1(vi), F.2(i) to(iii), commence F.3(i) to (v) andcarry out F.3.(vi);

Months 13-18: Continue activities F.2(i) to (iii)and F.3(i) to (v);

Months 19-24: Complete activities F.2(i) to (iii)and F.3.(i) to (v) and completeactivity F.4 where possible.

F. Activities

1. Before IDBP loan approval, the advisor will:

(i) advise IDBP on suitable terms and conditionsgoverning loans to domestic contractors for thepurchase of mechanical equipment;

(ii) advise IDBP on appropriate repayment schedules designedto complete repayment within the normal economic life ofthe equipment while allowing the borrower sufficientliquidity to carry out correct operation, servicingand repair;

(iii) if required, advise intending borrowers on the correctselection of equipment for purchase, taking into accountequipment already held, the type and amount of work tobe undertaken, the availability of operators, servicingfacilities and spares within the borrower's organizationand elsewhere. In advising on equipment types and modelsto be purchased, an attempt will be made to attain reason-able standardization within the borrower's organizationand in the country as a whole;

(iv) review the intending borrower's facilities and plansfor operation and maintenance of plant and equipmentand advise IDBP of any improvements that will berequired before a loan could be agreed;

(v) review with the general highway consultants the pre-qualification data supplied by domestic contractors wherethey intend to make use of IDBP credit facilities; and

-42 - ANNEX 3

Page 4

(vi) assist and advise IDBP in loan negotiations with

domestic contractors.

2. Once IDBP loans have been negotiated and equipment

ordered, the advisor will:

(i) keep IDBP informed of delivery schedules, inspectequipment on arrival and assist, if required, with

claims or with the commissioning of equipment;

(ii) discuss with contractors the correct operation and

use of items ordered, servicing and maintenanceschedule, advise on the stocks of spares to be heldon site and advise on the selection of operators andworks supervisors if required; and

(iii) discuss and outline with contractors the planningand management of works so that equipment can beused most effectively.

3. Once construction work has been initiated theadvisor will:

(i) carry out together with IDBP personnel regular siteinspections to ensure that the conditions of the loan

agreement between IDBP and the contractor are beingobserved, the equipment is being correctly used andproperly maintained and that its general condition is

sound;

(ii) inform IDBP of any circumstances that may endanger

the repayment schedule;

(iii) advise the contractor of any changes that should be

made in the operation or maintenance of the equipment

or in works planning in order to increase efficiency;

(iv) assist and advise the contractor, if required, inpurchase of spares or the organization of repairfacilities;

(v) advise IDBP on any rescheduling of repayments which maybe desirable or necessary; and

(vi) recommend suitable training for a member of IDBP staff

and assist in the selection of candidates.

4. On completion of the construction work, assess the

residual value of the equipment purchased under loansfrom IDBP.

_ 43 _ ANNEX 443 -~~~~~

PAKISTAN

THIRD HIGHWAY PROJECT

Projects Reporting Requirements

1. At the conclusion of each three month period, the Government willprepare a progress report covering the work done on each of the components ofthe project to date and detailing actual and anticipated progress, actual andestimated costs for the work completed and disbursements from the credit com-pared with those estimated in Table 16 of the appraisal report. The reportwill highlight causes for delays, if any, with measures proposed to overcomethem, and it will anticipate any changes that appear to be necessary in theproject completion date, the credit closing date or the project costs. Thereport will also include the results of traffic counts and pavement and soilssurveys taken to confirm designs and design estimates and economic evaluation,and will detail any changes in design, cost estimates or economic evaluationthat result. Details will be given of plant, vehicles and equipment that hasbeen ordered or received during the reporting period either by Government orby domestic contractors through IDBP. Data will be given on the locations,utilization and performance of equipment received under the project. Twocopies of the quarterly report will be sent to IDA through the Bank's officein Islamabad within six weeks of the end of each reporting period.

2. Within six months of the completion of the project, Governmentwill submit to the Association, a Project Completion Report on the executionand initial operation of the project, its costs and the benefits derivedor expected to be derived from it, an assessment of the performance by Gov-errment and by the Association of their respective obligations under theCredit Agreement and the accomplishment of the purpose of the credit.Details of the contents and requirements of the Project Completion Reportwere discussed and agreed during negotiations.

- 44 - ANNEX v

Related Documents and Data Available in the Project File

International Bank for Reconstruction and Development, Development Issuesand Policies, Report No. 1924-Pak, April 7, 1978

National Engineering Services (Pakistan) Ltd., Third Highway ProjectLahore-Multan Road, Technical and Economic Feasibility Study, January1978 (2 volumes) and Addendum October 1978; Design Report, October/November 1978 (4 volumes); Contract Documents, February 1979 (8 volumes)

Progressive Consultants, Third Highway Project - Khairabad-Nowshera andPeshawar-Charsadda, Economic and Engineering Feasibility Study,January 1978 (2 volumes) and Supplementary Analysis, October 1978;Design Report, November 1978 (3 volumes); Contract Documents, February1979 (10 volumes)

Techno Consultant, Third Highway Project - Nawabshah-Khairpur section,Technical and Economic Feasibility Study, January 1978 and SupplementaryVolume, October 1978; Design Report and Contract Documents, February 1979

Computer Printouts of Economic Evaluation - Base Case, Sensitivity Analysisfor (a) + 20% Cost - 20% Benefits and (b) 5 Year Road Life

Industrial Development and Finance Division, An Evaluation of the IndustrialDevelopment Bank of Pakistan (including tables) March 1979

TABLE 1

-45-

PAKISTAN

THIRD HIGHWAY PROJECT

THE MAIN ROAD NETWORK

(Length in Kllometres)

Bitumen Shingle EarthYear Surfaced Roads Roads Total

1973 19,710 13,742 2,796 36,248

1974 20,417 14,122 3,047 37,586

1975 21,571 14,015 3,423 39,009

1976 22,622 14,422 3,113 40,157

1977 23,716 14,321 3,378 41,415

1978

Punjab 11,056 56 120 11,232

Sind 5,688 65 1,974 7,727

NWFP 3,236 2,999 831 7,066

FATA 789 1,520 - 2,309

Baluchistan 2,722 8,442 - 11,164

Total 23,491 13,082 2,925 39,4981/

1/ The discrepancy with previous totals is under investigationby G.O.P.

Source: Provincial Road Departments

February 1979

_ 46 -

TABLE 2

PAKISTAN

THIRD HIGHWAY PROJECT1/

PFIi1 4PI rQCtmPIIfnn on RoSIdR

(Thousands of Tons)

Gasoline Diesel Total

Regular Premium Total

1969 233 33 266 435 701

1970 249 45 294 540 834

1971 248 50 298 548 846

1972 258 55 313 598 911

1973 251 61 312 665 977

1974 236 60 296 755 1,051

1975 262 73 335 820 1,155

1976 270 71 341 873 1,214

1977 285 83 368 925 1,293

1978 301 92 393 990 (est.) 1,383

AverageAnnualRateGrowth 2.2% 10.2% 3.7% 9.2% 7.4%1969-79

1/ Estimated consumption by railroads and others has been excluded

Source: National Transport Research Center and Ministryof Petroleum and Natural Resources

February 1979

- 47 -TABLE 3

PAKISTAN

THIRD HIGHWAY PROJECT

1/Motor Vehicles Registered

(Thousands)

Year Automobiles Buses Trucks Subtotal Motorcycles Others Total

1970 154.5 21.7 42.0 218.2 125.5 20.1 363$

1971 167.0 23.8 44.0 234.8 147.4 21.0 403.2

1972 170.6 26.6 45.9 243.1 159.7 23.3 426.1

1973 177.3 29.8 49.3 256.4 175.1 26.3 457.8

1974 189.1 33.4 53.4 275.9 199.7 33.0 508.6

1975 203.3 36.1 57.2 296.6 232.9 43.0 572.5

1976 220.8 38.7 60.5 320.0 274.0 56.8 650.8

AverageAnnualGrowthRate 5.8% 10.5% 6.3% 6.4% 13.2% 19.1% 9.2%

1/ Not adjusted for scrapped vehicles

Source: Pakistan Statistical Yearbook 1977

February 1979

- 48 - TABLE 4

PAKISTAN

THIRD HIGHWAY PROJECT

Road Maintenance and Construction Expenditures(Millions of Rupees)

Construction Expenditures

Baluchistan NWFP Punjab Sind Federal Total

1973-74 46.6 51.2 227.8 126.5 228.5 680.61974-75 77.9 46.8 310.1 210.0 397.4 1042.21975-76 44.6 83.4 398.7 251.6 483.3 1261.61976-77 82.6 132.0 443.7 289.7 613.2 1561.21977-78 64.8 113.9 343.4 289.0 588.9 1400.01978-79 (est.) 38.8 123.2 409.0 190.0 899.4 1660.41979-80 (allo-

cated) 80.4 139.2 267.3 200.0 64.9 751.8

Maintenance Expenditures

1973-74 30.7 10.3 46.3 15.7 103.01974-75 31.2 8.9 40.8 17.2 98.11975-76 20.7 9.9 61.3 25.5 117.41976-77 33.5 12.5 56.6 31.4 134.01977-78 35.0 13.3 58.3 32.9 139.51978-79 (est.) 20.0 17.5 65.6 33.4 19.2 145.71979-80 (allo-

cated) 36.9 34.7 54.3 34.3 44.7 204.9

Source: Provincial Road Departments and Annual Development Plans

November 1979

- 49 -

TABLE 5

PAKISTAN

THIRD HIGHWAY PROJECT

Revenues from Road Sector

Collected by the Provinces

In Million Rupees

Year Total Revenue Receipts Remarks

Punjab Sind N.W.F.P. Baluchistan Total

1972-73 78 41 3 2 124

1973-74 88 50 3 3 144

1974-75 96 56 3 3 158

1975-76 106 68 4 4 182

1976-77 116 77 4 4 201

Source; Third Highway Project CellFebruary 1979

TABLE 6

PAKISTAN

THIRD HIGHWAY PROJECT

Federal Road User Taxes

(Custom Duty, Sales Tax and Excise Duty)

(Millions of Rupees)

Item 1972-73 1973-74 1974-75 1975-76 1976-77

Motor Spirits 398.7 391.5 423.3 447.4 468.4

High Speed Diesel 270.1 337.6 237.6 341.7 314.1

Lubricating Oil andMineral Oils, etc. 64.7 62.3 63.5 70.6 33.6

Rubber Tyres -/ 53.2 57.7 52.7 96.0 141.0

Motor and Other -/Vehicles Parts 123.9 257.0 570.7 626.7 750.5

Total 910.6 1,106.1 1,347.8 1,582.4 1,707.6====== ===== ===s========= =========

l/ H.S.D. used by Railway and others is also included. About 83% is used byroad vehicles.

2/ This includes the tyres used by aeroplanes and tractors.

3/ Custom duty for 1976-77 is for July to April only.

Source: Central Board of RevenueFebruary 1979

-51 - TABLE 7

PAKISTAN

THBIRD HLGHWAY PROJECT

HIGHWAY DESIGN STANDARDS

Design Speed 80 Kph Minimum

Minimum Curve Radius 254 m

Maximam Superelevation 8%

Maximum Gradient 5%

Safe Stopping Distance 107 m

Minimum Vertical Curve Length 64 m

Width of Surfaced Roadway 7.3 m or the existing widthwhichever is greater

Width of Compacted Shoulders 1.7 m

Crossfall 2% on Pavement

4% on Shoulders

Side Slopes 2 Horizontal: 1 Vertical

Source; Consultants DesignsMarch 1979

- 52 - TABLE 8

PAKISTAN

THIRD HIGHWAY PROJECT

Equipment for Road Maintenance Units

(Estimated Costs (Rs millions)Resealing Units to Federal Government and NWFP Local Foreign Total

1 6,000 L Asphalt Distributor 0.641 6,000 L Asphalt Preheater 0.474 7t Tipper Trucks @ 230,000 0.921 S. P. Chips Preader and Compactor 0.621 8t Rubber-tyred Roller (S.r.) 0.241 8t Steel-wheeled Roller (Local) 0.221 S. P. Rotary Broom 0.231 Portable Granulator 0.241 Vibrating Screen 0.141 Water Truck, 6,000 L 0.282 Hand Sprayers 0.021 Precoating Mixer 0.15

0.22 3.95

Spares 17% (say) 0.04 0.65Handling Internal Transport 0.24Total for One Unit D73R 35

For Two Units 1.0 9.2 10.2

Equipment to Baluchistan

2 25t Low-bed Trailers and Tractors 1.02 125hp Maintenance Graders 1.41 Bulk Bitumen Transporter and Storage 0.2 0.9

0.2 3.3

Spares 17% (say) 0.6Handling, Internal Transport 0.2

0.4 3.9 4.3

TOTAL EQUIPMENT 1.4 13.1 14.5

Source: Mission Estimates

February and June 1979

Table 9

tAXIaSTAN

ThIRD HIGHWAY PRWJECT

Cost Etit te- by Year(Rupee MIllio.s)

Yea Oee Year TeeYa.TreYerFu TOTEALS

L-ca Foe..ipe To Toa oal PeIe TooT Totl.. Local Fore~-ige Too. L- Total Locol Fooo To Ttal- Luco I orsion Too Total

i/I.tod ehabilito.tdo.

a) Fsbo,or-Clsaroado --- 7.6 4. 2.1 14.2 5.1 3.1 1.3 9.4 -- 1 2.97 7.63. 23.6

Rh,t=bad-Noebro7. 4.6 2.0 14.3 52 3.1~ 1.3 9.6 -- --- -- - -- --- 12.9 7. 33 23.9

Lob re-Sobawel 32.7 3l~~~6 13.6 97~~9 63.6750.2 21.7 1-55.7 6.3 6.6 1.6 119.5 19. 11.8 4.9 36.1 220.2 132.2 36.8 409.2

6a~ooRbI 13.20 7.6 _..i.. 2 4.1 19. 2 1 1. 4. 7 33.9 19.2 11.5 4.9 35.4 7,8 4.3 2.1 14.4 39.0 34.9 13.0 107.8

2/ 73.4 44.9 18.9 136.3 114.8 66.9 29.7 213.4 68.4 23.1 23.6 164.3 27.2 16.3 7.0 50.5 303.6 192.3 78.4 564.5

b1 S.P_ii-3_ 1....1 4.4 9.3 2.6 -- 11.9 7.5 1.4 -- .9 3.1 0.6 - 5.9 23.1 5.9 _- 31.0

To tal T 76.7 43.1 19.9 140.7 124.0 71.5 29.7 225.2 95.9 54.3 22.9 173.2 32.3 17.1 7.0 56.4 339.9 199.2 76.4 595.5

".otito_oocle: .. eity lOT. o(a ud (b) 7.7 4.3 1.9 14.1 12.4 7.2 3.0 22.6 9.6 3.4 2.3 17.3 3.2 1.7 0.7 5.6 32.9 16.6 7.9 59.6

Price ~~~~ ~~~~ ~~~ ~~~6.6 4.0 jj7 12.1 30.6 17.5 7.3 33.4 34.7 19.7 6.3 62.7 16.2 0.3 3.3 78.2 87.7 30.7 22.9 156.8

Toes1

Cootlg-eir 14.5 6.3 3.6 26.6 43.0 24.7 10,3 76.0 44.3 25.1 10.6 60.0 19.4 10.2 4.2 33.6 120.6 69.0 26.0 216.4

Totu1 I 00th Cuotingeoces 91.2 53.6 22.5 167.3 167.0 96.2 40.0 303.2 140.2 79.6 33.4 253.2 31.7 27.3 11.2 90.2 449.3 2 57 .2 107.2 613.9

10. Rood Maiet--ec

a) Eqatp-tho -/4 0.5 4.6 -- 31 0.9 9.5 -- 9.4 -- --- -- -- -- -- -- -- 1.4 13.1 -- 14.5

d) Foderul Highaays Techoicol Asoista-co 4/ 0.3 0.3 ---05 0o - 0.4 0.2 0.7 -- 0.6

o) -ro-ica G--r-sete TotbolcoI Assl?rco. -- -- - - -- .3 2.6 3.1 0.1 2.9 -- 3.0 0-. . - .A 5. 7 .- 6.6

f) Aole Load Soroey Teohalcat Aeslertec- 0.3 0.0 -- 0.3 0.2 0.1 ~ - 0.3 --- -0.3 0.1 0-.6.j

Total II 1.0 4.9 -- 5.8 1.4 11.6 - 13.2 0.1 2.9 -- 3.0 - - - 2.5 19.6 -- 22.1

Co-tiogeoc.ies W-otlty 5% on (c), 107. oothor 0.1 0.2 -- 0.3 0.1 0.7 -- 0.6 0.0 0.3 -- 0.3 - -- - 0.2 1.2 -- 1.4

Pric 0.1 0.3 -- 0.4 0.4 1.6 -- 2.0 0.0 0.5 -- 0.5 2 --S---0. 2.4 .- 2.9

Total Ce -aoir` 0.2 0.5 -- 0.7 0.5 2,3 -- 2.6 0.0 0.6 - 0.8 - . - 0.7 3.6 -- 4.3

TotL1 IT with Coetlagoocios: 1.2 5.4 -- 6.6 1.9 14.1 -- 16.0 0.1 3.7 -- 3.6 --- - - . 23.2 -- 26.4

III. Coest-otioo Teduatoy

g) lOBP -- 20.0 -- 20.0 -- 29.5 -- 29.1 -- ---- - --- - - 49.5 -- 49.5

h) UNOP Techoicol Asaisto.c. 8.1 0.4 -- 0.3 21 9.6 -- 0.7 0.0 0.2 a-- 0.2 -- - - 9.2 1.3 - 1.4

Total IIT . 20.4 -- 26.5 0.1 30.1 -- 30.2 0.0 0.2 -- 0.2 ---- -. 0.2 30.7 5- 0.9

IV. Project Pre--rtloo

1) Pact 1/23.1 3.1 26.2 -- -- .- -- -- --- -- - -- --- 23.1 3.1 -- 26.2

F) Ftur -- 0.4 -- 2.0 1.6 0.4 2.j - - - - 3.2 0.6 - 4.0

Tote1 IV 23.1 3.1 26.2 1.6 0.4 -- 2.0 1.6 0.4 -- 2.0 --- -.- -26.3 3.9 -- 30.2

Cootiog .. cie- Q-aslty 102 so -- ---- 0.1 0.0 -- 0.1 0.1 0.0 .- .l -- - - 0.3 0.0 -- 2

PrIce- 0.3.~ 01 0.4 0.4 1. - 0.5 0-...._u 02 - .

TotalI CoetiegecLes -- --- 0.4 0.1 - 0.3 0.9 0.1 - 0.6 - -- - 0.9 0.2 - 1.3

Total IV wIth Cootlog-eies 20 j, 3. 6.2 2.9 0.5 - 2.5 2.1 0.5 -- 26 - - - 77.0 4,1- 3-1.3

Gr-nd Total I - IV 109 13 tT nr in rr 69 -r ru .7io- irr r Wi 5. 6247Z TE

Q-atlty Coellogeetles 7.6 6.7 1.9 14.4 12.6 7.6 3.0 23.9 9.7 5.7 2.3 17.7 3.2 1.7 0.7 3.6 33.3 20.1 7.9 61.2

Price- eleece 6.9 4.3 1.7 12.9 31.3 19.2 7.3 5 7.8 33.1 2. 8.3 63. 7 06.2 6.3 3.3 76.2 6. 526 20,9 162 6

TotalCelI sce 14.7 6.0 3.6 27.3 43.9 37.1 10.13 1. 46.8 26.0 10.6 61.4 19.4 10.2 4.2 33.6 122.2 72.6 28.8 .2V

0jeed Total with Ceotlage...lca 115.6 62.5 22.5 220.6 171.0 140.9 40.0 351.9 142.4 64.0 33.4 259.6 51.7 27.3 11.2 90.2 460.1 335.2 107.2 922.1

Oats: Peace eflteti- Factos 1 Base d oe -tr-ctoes bideoaEsoie-t Other Loe.sI 2 Fro cable 13

Tear 1 .06 .07 -ir 37 Pro tbl 6

2 .12 ~~~ ~ ~~~ ~ ~~~.14 .29 41Fo de13 19 .22 .42 5/ Ire tbl 11

4.26 .3 1 .16 ~ ,Fro It

le1 15

etebr1979

-54 -

PAKISTAN TABLE 10

THIRD HIGHWAY PROJECT

Coat of Construction and Maintenance Equipment Financedvia IDBP

a) For Road Rehabilitation:

Plant requirements will be mainly for surfacing work, shoulderimprovements and production of crushed stone base.

Typical plant fleet would be: (US$ 1,000)

1 55t/hr Asphalt Plant * 330.01 Asphalt Paver * 60.51 Aspbalt Preheater, 6,000 L * 46.71 Asphalt Distributor, 6,000 L * 63.81 Water Truck, 6,000 L 28.61 Vibrating Roller, 8-lOt 44.02 Tandem Rollers, 8-lOt (local)* 44.0; Motor Grader, Model 12 * 93.51 3 c.y. Loader * 82.51 8t Rubber-tyred Roller * 24.21 S. F. Roller, lOt 12.17 7t Dump Trucks @ 23,200 162.42 Concrete Mixers @ 11,200 22.42 Portable Granulators @ 24,200* 48.4

1,063

For overlay contract,items marked *would be required at cost of: 794

Allow for Spares 17% 3162,173

(Say) 2,200

b) For Road Maintenance by Contract: total estimated requirement which maybe taken up by a number of contractors

8 Maintenance Graders @ 82,500 660.02 6,000 L Asphalt Preheaters 93.42 6,000 L Asphalt Distributors 127.62 S. P. Chipspreader and Compactors 123.02 8t Rubber-tyred Rollers(S.P.) 48.42 Portable Granulators 48.48 7t Tipper Trucks @ 23,200 185.64 8-lOt Tandem Rollers (local) 88.02 Hydraulic Shovel-Backhoes 37.44 Water Trucks, 6,000 L @ 28,600 114.4

IJ526.0

Spares 17T 260.0

1,786.0

(Say) 1,800

Summary

Road Rehabilitation 2,200Contract Maintenance 1,800Unallocated (Contingency) 1,000

TOTAL 5,000

Source: Mission's Estimates

_55 _ TABLE 11

PAKISTAN

THIRD HIGHWAY PROJECT

PROJECT PREPARATION COSTS(Rupees Million)

A. Expatriate Advisory Services

Local Foreign Total

Personnel (56 man-months) 2.65 2.65International Travel .31 .31Other Reimbursable Costs .58 .15 .73Contingencies .02 .06 .08

Subtotal .60 3.17 3.77

B. Domestic Consultants

Feasibility Studies476 km @ Rs 6,825 3.25 3.25346 km @ 7,000 2.42 2.42812 km @ 7,175 5.83 5.83

Final Engineering267 'km @ 13,000 3.47 3.47

562.6 km @ 13,325 7.50 7.50

Subtotal 22.47 22.47

Total Project Preparation 23.07 3.17 26.24

1/ Most expenditures are actuals

Source: Third Highway Project CellFebruary 1979

-56 - TABLE 12

PAKISTAN

THIRD HIGHWAY PROJECT

Cost of Coordinating Consultants(Rupees Million)

Local Foreign Total

Team Leader (47 months @ 65,000)-/ 3.06 3l/O6Supervising Engineer (36 months @ 55,000) 1.98 1.98Soils and Paving Engineer

(18 months @ 62,000) 1.12 1.12International Travel .50 .50Other Reimbursable Cost 1.40 .70 2.10

Total 1.40 7.36 8.76

1/ Assumes 5 contracts to be supervised

Source: Mission's EstimatesFebruary 1979

57 TABLE 13

PAKISTAN

THIRD HIGHWAY PROJECT

CONSTRUCTION SUPERVISION COSTS(Rupees Million)

1/A. Domestic Consultants

Local Foreign Total

4 Resident Engineers (4x42 manmonths0 4,000/mth.) 0.67 0,67

210 Assistant Resident Engineers(10 x 42 mm @ 2,500/mth.) 1.05 1.05

10 Material Engineers (10x42 mm@ 2,500/mth.) 1.05 1.05

100 Technical Supervisors (100x42 mm@1,500/mth.) 6.30 6.30

20Q Laborers, Lab. Staff, etc.(200x42 mm @ 350/mth.) 2,94 2.94

30 Drivers (3Qx42 mm @ 450/mth) 0.57 0.5780 Office and Clerical Staff

( 80x42 mm @ 730/mth.) 2,42 2.42Total Personnel 15.00 15.00

Materials, Office Supplies and Rent(4x48 mths. @ 5,000/uth.) 0.96 0.96

15.96 15.96

Overheads (50%), say 8.04 8.Q

24.00 24.00

2/B. Coordinating Consultants

(80% of time) 1.10 5.90 7.00

Total Rs 25.10 5.90 31.00

_/ Assumes 4 contracts will be supervised

2/ From Table 12

Source: Mission's Estimates

September 1979

TABLE 14_ 58 -

PAKISTAN

THIRD HIGHWAY PROJECT

ROAD CONSTRUCTION ADVISOR COSTS

A. PROJECT BUDGET COVERING UNDP CONTRIBUTION(millions of Rupees)

Local Foreign Total

PERSONNEL

Road ConstructionAdvisor (Z4 mm) .19 1.00 1.19

In-country Travel .12 -_ .12

Component Total .31 1.00 1.31

FELLOWSHIPS

Overseas Training forIDBP Staff - .09 .09

MISCELLANEOUS

Miscellaneous .02 .01 .03

GRAND TOTAL .33 1.10 1.43

59 -

TABLE 15

PAKISTAN

THIRD HIGHWAY PROJECT

COST OF TECHNICAL ASSISTANCE TO FEDERALAND PROVINCIAL HIGHWAY DEPARTMENTS

AND FUTURE PROJECT PREPARATION(Millions of avupees'

Local Foreign Total

A. Federal Highways Assistance .14 .74 .8810% of Coordinating Consultants Time

(Table 12)

B. Provincial Highway Departments(NWFP & Baluchistan)

tour Experts 80 months each @ Rs 60,000 4.80 4.80Local Travel 4 x 80 x Rs 4,500 ,36 .36Air Fares and Freight x Rs 20,000 + 15% ..28 .,28

Subtotal T. A. .36 5.08 5.44

Equipment for Soils Lab .04 . 60 .64

Total B.40 5.68 6.08

C. Technical Assistance with Axle-weight Survey

Professional Staff 0.26 0.06 0.32Support Staff 0.04 - 0.04

Travel Costs 0.02 0.04 0.06Office Supplies & Rent 0.02 - 0.02

0.34Overheads, 50% of Local Costs, say 0.16 0.16

0.50 0.10 0.60

D. Future Project Preparation

Coordinating Consultant (10% of Total from Table 12) .14 .74 .88

Domestic Consultants (2 00km for Review and 1.60 1.60Update of Original Design @ Rs 8,000 per km) 1.50 1.60New Studies ( 50 km Q Rs 30,000) '__ -

JaL2 4 07 4 3.98

Source: Third Highway Project Cell and Mission's Calculations

February 1979

-60 - TABLE 16

PAKISTAN

THIRD HIGHWAY PROJECT

ESTIMATED SCHEDULE OF DISBURSEMENTS

(US Dollars Millions)

Ministry of Cua- i-iveIDBP Communications Dia±busements

IDA Fiscal Year AndQuarter Ending

1980

June 30, 1980 .50 2.00 2.5

1981

September 30, 1980 .50 3.00 6.00December 31, 1980 1.00 3.00 10.001arch 31, 1981 1.00 4.00 15.00June 30, 1981 .50 4.00 19.50

1982

September 30, 1981 .50 5.00 25.00December 31, 1981 .50 4.00 29.50March 31, 1982 .50 4.00 34.00June 30, 1982 4.00 38.00

1983

September 30, 1982 3.00 41.00December 3', 1982 2.00 43.00March 31, 19d3 2.00 45.00June 30, 1983 2.00 47.00

1984

September 30, 1983 1.50 48.50December 31, 1983 .50 49.00

March 31, 1984 .50 49.50June 30, 1984 .50 50.00

TOTAL 5.00 45.00 _____

Credit Effective Date Oct. 1, 1979Closing Date: June 30, 1984

Source: Mission's EstimatesFebruary 1979

61 Table 17

PAKISTAN

THIRD HIGHWAY PROJECT

Traffic Data on Road Sections for Rehabilitation & Improvement

tRAFFIC DATA SETI TR-3 I PESMANAR CHARSAD..................... ..................

BASE YEAR: 1962INITIAL ADOT 4448APPLICABLE ON LINKS3 LN-3,

P CAR MINI BUS PASS BUS TRUCK

E[ISTING TRAFFIC (ADT; t4499 337 14I41 971IQUIVALENT STANDARD AXLES PER LANE O,0 1.3 344,c 1262,3

ANNUAL TRAFFIC GROWTH1982-1987 (PERCENTAGE) 4,c 8,9 o,8 e,21988.1992 (PERCENTAGE) 4,9 8.b 4.1 7.3

_......... "0 ............ ...__ .. __..........,,,...,... ,................

TRAFFIC DATA SEII TR-8 I NOOSHERA.KHAIRBD,,,____,,___,___............................

BASE YEARS 1982INITIAL ADTS 3484APPLICABLE ON LINKSs LN-8,

P CAR MINI BUS PASS BUS TRUCK

E[ISTING TRAFFIC (ADT) 1164 280 9244 111EQUIVALENY STANDARD AXLES PER LANE 0.0 1.1 194,0 1450,8

ANNUAL TRAFFIC GROWTH1982.1987 (PERCENTAGE) 4,7 8,3 e,3 5,61988,1992 (PERCENTAGE) 5,3 8,4 8.3 6,7

........................................................... …..............

TRAFFIC DATA SETI TR-s I LAHOREe SAHIWAL_._.___-____-_------__-_______......_-..._...

BASE YEARI 1982INITIAL AOTI 3965APPLICABLE ON LINKS: LN-5p

P CAR MINI BUS PASS BUS TRUCK._____..v..........._.__._______., .... ,.,,,,,.__,___...__..............

E[ISTING TRAFFIC (ADT) 607 67 1126 2165EQUIVALENT STANDARD AXLFS PFR LANE 0,0 0,3 238.5 2814,5

ANNUAL TRAFFIC GROWTh1982.1992 (PERCENTAGL) 5,7 5,7 6,5 7,b

paW. .PCPW-PPS.Wa.P.... --e--.v~v-w ........ w....... ........W

TRA0FIC DATA SETI TR.2 I Kandiaro-Robri...... ........... _.___................____.__._..

BASE YEARI 1982INITIAL ADIS 4011APPLICABLE ON LINKSS LN-2,

P CAR MINI BUS PASS BUS TRUCK.… ......................................... _. ___.-

EXISTING TRAFFIC (ADTl 259 34c 473 2933EQUIVALENT STANDAHO AXLES PER LANE 0,0 1,4 99,3 3812,9

ANNUAL TRAFFIC GRO*TH1982-1967 (PERCENTAGE) 7.5 10,0 7.1 4,51988-1992 (PERCENTAGE) 7.0 100 8,0 2,8

.. . , .............- ......................

Source: Consultants' ReportSeptember 1979

PAKISTAN

THIRD HIGHWAY PROJECT

Suwmary of Economic Evaluations for Road Rehabilitation & Improvement

2/ Economic Rate of ReturnEconomic

Construction Net Present Sensitivity AnalysisCosts worth Base -207 Benefits 5 Years

1/ Rs/Km AADT % at 12% Case +20% Costs Pavement LifeKms (millions) 1982 Heavy (millions) % z %

Road Rehabilitation

Peshawar-Charsadda 27.6 0.78 4448 59% 80 &8 46 60 1Khairabad-Nowshera 29.0 0.76 3484 59% 67 85 53 75 >Lahore-Sahiwal 100.0 3.74 3965 83% 590 41 29 35Kandiaro-Rohri 48.0 2.06 4011 80% 298 82 54 70

Total or Weighted Average 204.6 1035 51 35 45

I/ Length of highway assumed to be constructed in economic analysis

2/ Financial costsLess Taxes plus supervision

Source: Consultants and Mission's Estimates

December 1979

co.

- 63 -TABLE 19

PAKISTAN

THIRD HIGHWAY PROJECT

ECONOMIC EVALUATION OF RESEALING

(Rupees Per Kilometer)

Costs Benefits

Cars Buses Trucks

USER COST SAVINGS

Unimproved (4000 'r')

Tires .0255 .0904 .1646Maintenance Parts .1506 .7229 .5099Maintenance Labor .0085 .0502 .0404

Total Unimproved .1846 .8635 .7149

Improved (2500 'r')

Tires .0106 .0785 .1428Maintenance Parts .0727 .5239 .3701Maintenance Labor .0050 .0380 .0031

Total Improved .0883 .6404 .5160

User Cost Saving Per km .0963 .2231 .1989z"ADT 80 80 240First Year Benefits 2-,812 6,514 17,423

Year 1 21,000Year 2 26,749Year 3 28 ,6k21Year 4 30, 625

ER Base Case 120%

ER + 20% Costs and- 20% Benefits 71%

1/ 't' is a measure of the total vertical movement of a standard wheel relativeto its frame when towed at 30 Kph over a section of road. The valuesgivenhere are typical for the conditions described. Cale-ludc4r bawim on con-sumption figures from UK Transport and Road le ssah-Lahoratory (TKXL)publication LR723

Source: Mission EstimatesMarch 1979

PAKISTAN --Chart No. 1

THIRD HIGHWAY PROJECTThe Ministry of Communications

(Central Roads Organization)

Minister

Secretary for Communications

I National Highways l Director Generals for: Telecommunications, |

Board |Post Office, Ports, Shipping, Karachi Shipyard|

Directorate Goneral [ Additional Secretary (Communications)

| of National Highways FJont SecretarY JoitSceayyTasot Joint Secretary

|(IComplaints) Jint Secretary (Transport (Communications)

Rasad RoadTrasor t) Inan lWAdvisr l System Coll | ArdvisPoryt {RasadRa rnpnF Transport l| Councill

Deputy Consulting Engineer for: TransportEconomist

Rod ridges |Transport|l

_ridgesTren~ot |SECRETARIAT

I ~~~~~~~~~~~~~StatisticalAssistant Chief Engineers for 0 Officer

Roads Bridges Statistics

Section Officers For

Inland RodsRapid Transport N itona | Third Highwa AccountsWater Transport | Roa | Transit R Advisory Council Highways Project i Officer1/aTheDirector of Roads and Road Transport Transit hB C ll not yet been e dBoard Prrld Office7

IiThe Director of Roads and Road Transport and his Cell have not yet been established. World Bank - 20777

Char-t No. 2PAKISTAN

THIRD HIGHWAY PROJECTNational Highways Board and Directorate General of National Highways as Constitutedl/

On October 6, 1979

National Highways Board

Secretary, Ministry of Communications (Chairman)Provincial Secretaries of Communications and Works (4)Director General of National Highways

IDirectorate General of National Highways

| *Director General oG National Highway S

'Il_aa uor Suku 12

Chid Highsay PDrojca Cell tDeputy Secretary N. 5e(r2 Io NNH.. 0(iCoNordination) N 1epoeb 1979.

DC puty Project Co ordinators Officers: Grade 20-- 1Grade 19 - 6

F * * ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Grade 18 - 20| L | . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Grade 1 7- 2

General Staff 93'soabd] *aoe Sukkur 122

'Director * Chief Inspector Chief Inspector |*Director (Planning) Mai te nance) Di Orector I(Statistics) Hihwy Highways ||IN 2;N 0 N

X~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- - N, 35 N . 25 N| 50 .

XDeputy Director *Deputy Director 'Deputy Director 'l Deputy Direco 'eutgyietr'euyChe Dpt he

(Plning) (Maintenaice) (Statistic,) ( Audt (d nn. & Bugt(N r;; N. 35) (nspco Highways N.65

*Deputy Director

(M.P 0)

|'Assistant Director *Ass|n D'rc. Inspecto N. ; (2 Inspector N. 25 {21(Admin.) (Sudget I L Inspector N. 35 (12) ||Inspector N. 65 (1 )|

'Position filled in November 1979,

1/ Conistituted by Resolution No. 4 (5)/9 -NHB of October 6, 1979, o dSn 04

Chart No. 3

PAKISTANTHIRD HIGHWAY PROJECT

Organization of Sind Provincial Highway Department

Chief Engineer

Director of Highways

Headquarters Staff

Technical Officer Divisional Forest Officer

Planning Designs Officer Land Acquisition Officer

2 Asst. Design Officers Budget & Accts. Officer

I~~~~~~ Administrative Off'icer

|4 Highw,ay Circlesl

I (Superintending Engineers i/c)

15 Highway Divisions 2 Machinery Maintenance

(Executive Engineers i/c) . Divisions (Mech. Engineer i/c)

48 Highway Sub-Divisions 5 MacS ins Maint.

(Asst. Engineers i/c) Sub-Divisions (Asst.Mechanical Engineers i/c)

World Bank -20130

Chart No. 4

PAKISTANTHIRD HIGHWAY PROJECT

Implementation Schedule

1979 1980 1981 1982 1983

I '- 1 1I I III I I I II. ROAD REHABILITATION

a) Bidding Period

Receive and Evaluate Bids

NW FP

j) Peshawar-Charsadda

ii) Khairabad-Nowshara

Pun jab

iii) Lahore-Sahewal

Si nd

iv) Kandiaro-Rohri

b) Supervision

i) Coordinating Consultancv _ _

Services _ a_

ii) Domestic Consultancy

Services

II. ROAD MAINTENANCE

a) Order and Receive Road

Maintenance Equipment

b) Federal Highways

Technical Assistance _ _ _ _ _ _ _c) Provincial Highways

Technical Assistance

d) Road Maintenance

Training

e) Contract Maintenance _ _

III. CONSTRUCTION INDUSTRY

a) Order and Receive Road

Maintenance and Construction

Equipment via IDBP

b) Technical Assistance to IDBP

IV. PROJECT PREPARATION _ _ _ _

World Bank - 20742

Chart No. 5PAKISTAN

THIRD HIGHWAY PROJECTCoordinating Consultants - Supervision Schedule

1977 1980 1981 1982 1983E A

PROPOSED STAFFING = = = = = = EXPATRIATE

___________________ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ MAN-MONTH

TEAM LEADER * m47

SUPERVISING RESIDENTENGINEER 1 L.ULL 18

COUNTER PART _ _ _ Local (Govt. Staff)

SUP. RES. ENG. II (IIEL 1 18

Local (Govt. Staff)

COUNTER PART _ _ - _ _

SO ILS ENG. mmsg

PAVING ENG. 9 9

101

World Bank - 20131REVIEW NEED

TO EXTENDSUP RES. ENG

IBRD 14188R64 68- 72- U.S S. R AUGUST 1979

( * -I (A C H I NAPAKISTAN

THIRD HIGHWAY PROJECT *"-'* j 36--36'

PROJECT ROADSNATIONAL ROADSPRIMARY AND SECONDARY ROADS 9 fRAILWAYS

+ AIRPORTS haodo App--.Im. o C-f-1PROVINCE BOUNDARIES shemINTERNATIONAL BOUNDARIES LAMABADRIVERSV

t-~~~~~~~~~~~~~~~~~Knjr 0 100 200' 300: 400 gy

32' rg~~~~~~~~~~~~~~~~~~~~~~~~~~2'C

) , * ; - .\ ~~~~~I NDIA

28- ' 28'-

I R AN j T > t vS.JX l : / 7rK~~~~~~~~~~~oniro Dhi 0 100 200 300 4010<_ ~ ~~~ 0 ) t s 1l t ~~~~~~~~N D KILOMFTERS

( Jt ., / i a\aN~~~~~~~~~owobshoh 72. -E

= \ _AEH)yderobruc \ ...................... Jo ~obad DEM. REP OF|

Aracbian 5ea INDIA

* I T A t X fS_