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Bolivia: Appraisal of an Aviation Development Project

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Bolivia: Appraisal of an Aviation Development Project ReportNo. 1458b-BO FILECopy Bolivia:Appraisal of an Aviation DevelopmentProject Public Disclosure Authorized April 28, 1977 Latin America and the CaribbeanProjects Department FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank This document hasa restricteddistribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. Currency Equivalents 1 Bolivian Peso ($b) = US$0.05 US$1.00 = 20.0 Bolivian Pesos ($b) 1 million Bolivian Pesos ($b) = US$50,000 System of Weights and Measures Metric US Units 1 kilometer (km) = 0.62 mile (mi) 1 meter (m) 5 3.28 feet (ft) 1 liter (1) = 0.26 US gallon 1 kilogram (kg) = 2.20 pounds (lb) 1 ton = 2,205 pounds Fiscal Year January 1 to December 31 Abbreviations and Acronyms AASANA Airports and Air Navigation Services Administration AGA Aerodromes and Ground Aids ATC Air Traffic Control COM Communications CNA National Aviation Council DGAC Directorate General of Civil Aviation DGTTA Directorate General of Air Transport and Aerial Work DME Distance Measuring Equipment ECLA Economic Commission of Latin America FAB Bolivian Air Force HF High Frequency ICAO/OACI International Civil Aviation Organization ILS Instrument Landing System ISB Independent Side Band LAB Lloyd Aerea Boliviano LRB Locating Radio Beacon MTCCA Ministry of Transport, Communications, and Civil Aviation NAVAID Navigational Aid NDB Non-Directional Radio Beacon RX Receiver SAC Under-Secretary for Civil Aviation SSB Single Side Band TX Transmitter UNDP United Nations Development Programme VASI Visual Approach Slope Indicator VHF Very High Frequency VOR Very High Frequency Omni-Directional Radio Range Aircraft Nominal B-727-100 Boeing three-engine jet 119 seats 2 tons belly load B-727-200 140 seats 4.5 tons belly load CV-580 Convair twin-engine turbo propeller 8 tons pay load F-27 Fokker twin-engine turbo propeller 40 seats or 5 tons pay load C-46 Curtiss twin-engine piston propeller 5.5 tons pay load DC-3 Douglas twin-engine piston propeller 28 seats 3 tons pay load FOR OFFICIAL USE ONLY BOLIVIA APPRAISAL OF AN AVIATION DEVELOPMENTPROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ................ .. ....................... i-ii 1. INTRODUCTION .............................................o............. 1 2. BACKGROUND ................................................ 1 A. General ............................................... 1 B. The Transport Sector ..................................... 2 C. Transport Planning and Coordination ................... 3 D. Development Plan ...... ................................4 3. BOLIVIAN AVIATION ........................................................5 A. Existing Air Transport ..... ...........................5 B. Present Air Traffic ...... ...................... 6 C. Traffic Forecasts (Project Airports) .................. 7 Passenger Forecast ..... ..........................7 Cargo Forecast ............... ................... 8 Aircraft Movements .......... 8 D. Existing Organizations ................................. 8 E. The Borrower - AASANA ......................................9 4. THE PROJECT . ........... 10 A. Objectives ... .........................................10 B. Description ................................*............... 10 Airport Construction and Improvements ............ 11 Design and Supervision of Construction ........... 11 Design of Cochabamba Runway ...................... 12 Provision of Equipment ........................... 12 AASANA Technical Assistance and Staff Training ... 13 C. Special Components of the Project ..... ................13 D. Ecology ............................................... 13 E. Cost Estimate ......... ....... 14 This Appraisal Report has been prepared by Messrs. B. Bostrom (Aviation Economist), J. Bowlin (Financial Analyst) and W.B.R. Zetterstrom (Aviation Engineer) and Ms. V. Foster (Editor). Thisdocuwmnt has a retnctoddistribution and may be usedby recipientsonly in theperformance of theirofficial dutie. Its contentsmay not otherwise be disclosdwithout World Bank autmrlaaton. TABLE OF CONTENTS (Cont'd) Page No. F. Execution ......................... 15 G. Procurement ....... .................. 15 H. Disbursements .................................... 16 5. ECONOMIC EVALUATION ........................ .. 16 A. General ................ 0.. *.*............ ..... 16 B. Economic Analysis ... ............... ................. 17 C. Cost Savings ... ............................ 18 D. Project Return .. ................................. 19 6. FINANCIAL EVALUATION .................. ................. 19 A. Existing Situation ............................... 19 B. Financial Objectives .......................... ....... 20 C. Financial Plan ... ................................. 21 D. Financial Projections ............................... 21 7. AGREEMENTS REACHED AND RECOMMENDATION ..................... 24 TABLES 1. Total Freight Movement in Bolivia 2. Comparative Economy Air Fares, 1976 3. Names and Abbreviations of Airports 4. Forecast Passenger and Freight at Project Airports 5. Forecast Aircraft Traffic 6. Cost Estimates 7. Disbursement Schedule 8. Estimated Aircraft Cost Savings in 1981 9. Quantified Project Benefits 1978-1998 10. Sensitivity Analysis of Economic Rate of Return 11. Balance Sheets 1970-1974 - AASANA 12. Statement of Revenues - AASANA 13. Projected Operating Statements - AASANA 14. Projected Project Airport Operating Statements - Riberalta Airport 15. Projected Project Airport Operating Statements - Santa Ana Airport 16. Projected Project Airport Operating Statements - San Borja Airport 17. Projected Project Airport Operating Statements - Tarija Airport 18. Project Cash Flow - AASANA 19. Projected Balance Sheets - AASANA 20. Schedule of Selected Financial Indicators TABLE OF CONTENTS (Cont'd) ANNEXES 1. Bank Group Projects in the Transport Sector 2. Bolivia Aircraft and Airport Inventory 3. Aircraft Accidents in Bolivia 4. Traffic Forecast Methodology 5. Existing Airport Conditions and Proposed Improvements 6. Location List for Equipment Included in the Project 7. Regional Maintenance Equipment 8. Draft Technical Assistance Job Descriptions 9. Special Components of the Project 10. Project Progress Monitoring Indices 11. Summary and Conclusions of Bolivia Transport Sector Report 12. Details of the Economic Evaluation 13. Financial Assumptions CHART 1. Organization Chart MAPS IBRD 12654 - Project Airports IBRD 12655 - Telecommunications Network BOLIVIA APPRAISAL OF AN AVIATION DEVELOPMENT PROJECT SUMMARY AND CONCLUSIONS i. This report appraises a project comprising: (a) the construction of two new domestic airports (Riberalta and San Borja) and major improvements at two others (Santa Ana and Tarija); (b) the design and supervision of construction in (a); (c) the provision of air navigational aids (Navaids) and communica- tions (Com) equipment at the project airports and new country- wide Navaid and Com systems; (d) the provision of general maintenance equipment and runway maintenance equipment; (e) the provision of technical assistance and staff training to the Borrower; and (f) the design of a new runway, aprons and related works at the Cochabamba Airport. ii. The difficulties for surface transport created by topography and population distribution are reflected in high infrastructure costs. Given the scarcity of surface transport and the low population density in the lowlands, the Government is emphasizing the development of aviation for this and other isolated parts of the country. iii. The project, to be administered by Administracion de Aeropuertos y Servicios Auxiliares a la Navegacion Aerea (AASANA), will enable the domestic airlines and, in particular, the almost wholly Government-owned Lloyd Aereo Boliviano (LAB), to use larger, more productive aircraft, which already exist in their fleets, at a higher daily utilization rate with correspondingly lower unit costs. The project will also reduce the delays, cancellations and diver- sions for aircraft through improved aeronautical communications, navigational aids and runway maintenance equipment. The technical assistance and training element are intended to strengthen the planning, maintenance and construction units responsible for civil works and equipment of the borrower. The inade- quate length and poor orientation of the present runway at Cochabamba, the main base of LAB, make it advisable to construct a new runway. It is desir- able to support the project by providing funds for its detailed design. How- ever, it is not possible at this stage to include the construction of the new runway in the present loan because of limited funds. - ii - iv. The proposed US$25.0 million Bank loan represents the 60% foreign exchange componentplus 8.4% of the local cost component (expendituresfor local consultants)of the US$39.5 million required for the project. The remaininglocal costs will be financed by an equity investment from the Government,which will exempt project items from taxes and duties. v. Contractswould be awarded through internationalcompetitive bidding in accordancewith Bank Guidelines. Retroactivefinancing would be required for design and supervisionat three airports as well as paving and supervision at one airport (Tarija). Such amounts should not exceed US$1.7 million. vi. The main project benefits are cash savings to LAB from better uti- lized, more efficient and productive aircraft.
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