WITHIN RESTRICTED ONE WEEK |EFLE COPY Reportno

fZETURN TO IREPORTS DESK WITHIN RESTRICTED ONE WEEK |EFLE COPY ReportNo. PTR-105a Public Disclosure Authorized

This report is for official use only by the Bank Group and specificallyauthorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibilityfor the accuracy or completenessof the report.

INTERNATIONALBANK FOR RECONSTRUCTIONAND DEVELOPMEAT INTERNATIONALDEVELOPMENT ASSOCIATION Public Disclosure Authorized

APPRAISAL OF A

THIRD HIGHWAY CONSTRUCTION PROJECT

BRAZIL Public Disclosure Authorized

February 29, 1972 Public Disclosure Authorized

Transportation Projects Department Currency Eauivalents

Currency Unit - Cruzeiro (Cr$) US$1.00 = Cr$5 (February 1971) Present Exchange Rate:US$1.00 - Cr$5.785 Cr$1 US$0.20 Cr$1 million = US$200,000

Fiscal Year 1E. RETar £ .i

January 1 - December 31 RjRO007o 21- Vi:'

System pf Weights and Measures: Metric

Metrir: British/US Equivalent

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) - 0.62 mile (mi) 1 square kilometer (km2)2 0.386 square mile (sq mi) 1 hectare (ha) . 2.47 acres (ac) 1 metric ton (m ton) . 2,200 pounds (lb) \ Abbreviations and Acronyms

ADT - Average Daily Traffic CVRD, - Cia Vale do Rio DDee (a Government mining oompany) - Departamento de Estradas de Rodagem (State Highway Department) SfER - Departamento Nacional de Estradas de Rodagem (National Highway Department) LfNPN - Departamento Nacional de Portos e Vias Navegaveis (National Ports Department) GEIPOT - Grupo de Estudos para Integracao da Politica de Transportes %. (Transport Study Group) IUCL - Imposto Unico Sobre Combustiveis e Lubricantes PAl- (Federal Tax on Fuels and Lubri¢ants) PA-1 w - First Transport Plan of Action PA-2 - Second Transport Plan of Action RFFSA - Rede Ferroviairia Federal (National Railways) SUNAMAM- Superintendencia Nacional da Marinha Mbrcante (National Merchant Marine Superintendency) UNDP - United Nations Development Programme USAID - United States Agency for International Development USFWHA- United States Federal Highway Administration BRAZIL

APPRAISAL OF A nlIRD HIGHAY CONSTRUCTIONPROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... i - ii

1. INTRODUCTION.. .1

2. BACKGROUND... 2

A. General...... ,.,... 2 B. Transport Policy and Coordination . . 2 C. Hlighways .. 4 D. Railways .. 4 E. Ports and Coastal Shipping . . 4 F. Air Transport. 5 3. THE HIGHWAY SECTOR.. 5 A. The Highway Network - Traffic and Vehicle Fleet 5 B. Highway Administration. 6 C. Highway Engineering. 7 D. HighwayConstruction .. 8 E. Highway Maintenance. 9 F. Highway Financing ...... 10 G. Highway Planning .. 11

4. THE PROJECT...... 11 A. General Description .... 11 B. Highways to be Constructedand/or Paved .... 12 C. ConsultingServices for Design and ConstructionSupervision .... 12 D. Additional Consulting Services .... 13 E. Cost Estimatesand Financing .... 13 F. Execution of the Project ...... 16 G. Disbursement ...... 17 5. ECONOMICEVALUATION ..... 18 A. General. . 18 B. The Project Roads .... 19 C. Benefits from the Project ... 22 6. ACREEIIFNTSREACIHED AND RECOMMENDATION ..... 22

This report was written by Messrs. E. Schaefer (engineer)and N. Kanaan (economist)on the basis of appraisal missions in June/July 1971 and December 1971. TABLE OF CONTENTS (Continued)

ANNEXES

1. TransportSurvey 2. PA-1 Progress of Implementation 3. PA-2 Progress of Implementation 4. Reorganizationof Highway Administration 5. Status of Highway Maintenancein the Southern States and Minas Gerais

Annex 5 - Attachment I Highway Maintenance- State of Rio Grande do Sul Annex 5 - Attachment II Highway Maintenance - State of Santa Catarina Annex 5 - Attachment III Highway Maintenance- State of Minas Gerais Annex 5 - Attachment IV Highway Maintenance - State of Parana

6. The Project Roads 7. ConsultantsEngaged in the Preparationof the Third Highway Project

TABLES

1. Federal Investmentin Transportby Mode 2. (a) Freight Transportby Mode, 1961-1970 (b) Percentage Shares 3. Passenger-Kilometers,Percentage Shares, and Average Annual Growth Rates and Selected Items, by Mode of Transport, 1961-1969 4. Classificationof Highways 5. Developmentof National and State Highway Network, 1967-1970 6. Relationshipbetween Area, Population,and Length of Highways, 1970 7. Relationshipbetween Area, Population,and Number of Vehicles, 1970 8. Vehicle Registrationsby State, 1970 9. Vehicle Fleet, 1970 10. Increase of Vehicle Registrations,1967-1970 11. Highway Design Standards for New Roads 12. Highway Design Standards for Improvementof Existing Roads 13. FinancingPlan for Federal and State Highways, 1972-1974 14. List of Roads for Constructionand/or Paving 15. List of Roads for Detailed Engineering 16. List of Roads for FeasibilityStudies 17. Schedule of EstimatedDisbursements 18. Average Daily Traffic on Selected National Highways, 1970 19. Average Daily Traffic on Project Roads 20. Vehicle OperatingEconomic Costs 21. Internal Economic Return for Roads Proposed for Constructionand/or Paving TABLEOF CONTENTS(Continued)

CHARTS

I Organizationof GEIPOT II Organizationof the National RHghway Department (DNER) III Organizationof the State Highway Departmentof Minas Gerais

MAPS

1. National Highway Network 2. Maranhao, Piaul and Ceara 3. Rio Grande do Norte, Paraiba, Pernambuco and Alagoas 4. Bahia and Sergipe 5. Eapirito Santo and Rio de Janeiro 6. Minas Gerais 7. Highway Maintenance in Mines Gerais 8. Mato Grosso and Goias 9. Sao Paulo 10. Parana 11. Highway Maintenance in Parana 12. Santa Catarina 13. Highway Maintenance in Santa Catarina 14. Rio Grande do Sul 15. Highway Maintenance in Rio Grande do Sul

BRAZIL

APPRAISAL OF A THIRD HIGHWAY CONSTRUCTIONPROJECT

SUMMARY AND CONCLUSIONS i. Since 1964 the Bank has had a continuing exchange of views with the Governmentof Brazil regarding the improvementand extension of the transport system. Following the Bank's recommendation,a Transport Survey was launched in 1965 with financialassistance by UNDP, USAID and the Bank, the survey was carried out in two stages. Based on the findings and recommendations of this Survey, the Bank is participatingin the financing of two highway constructionprojects (567-BR,October 1968, US$26 million, and 676-BR, May 1970, US$100 million), a railway project (786-BR,August 1971, US$46 million), and a port project (756-BR,June 1971, US$45 million). Progress on the two highway projects is satisfactory;the railway project is progressingreasonably satisfactorilyalthough some elements are delayed, and the studies which form the basis for implementationof the port project are proceeding.

ii. Prior to Loan 567-BR in October 1968, the Government submitteda Plan of Action (PA-1) summarizingits transport objectivesand giving schedules for action on highways, railroads and ports. Prior to Loan 676-BR in May 1970, the Government submitted another Plan of Action (PA-2) outlining the measures necessary to bring about further improvementsin the transport sector. The progress toward attainment of the objectives in individualmodes has been varied, with satisfactoryresults in highways (Annexes 2 and 3), and slower progress in railways and ports (para. 2.05). The activity of GEIPOT as transportcoordinating agency has not been success- ful, but the Governmenthas now confirmed to the Bank its intention to strengthen GEIPOT's operationsand to adopt satisfactorytransport coordination policies.

iii. This report appraisesa highway constructionprogram consisting of: (a) constructionand paving (and consultantsfor supervision)of 2,530 km of highways comprised of two Groups -- Group A of 1,849 km and Group B of 681 km, (b) consulting services for detailed engineeringof 1,626 km and feasibilitystudies of 2,584 km of highways, and for further improvingmethods of constructionsupervision, and (c) internationalexperts for the highway training center of the National Highway Department (DNER). The total cost of this program is estimatedat US$350 million equivalent. The Government, with the agreement of the Bank, is examining the possibilityof obtaining separate financialassistance from sources other than the Bank for constructionworks under Group B.

iv. The project for which a Bank loan of US$89 m.illionis now proposed includes all the above program with the exception of the constructionand correspondingsupervision of Group B highways. The cost of the project is estimatedat US$221 million equivalent,and the loan will finance 40% of - ii - the cost of construction (includingsupervision) and consultantsfor engineeringand studies, and the actual foreign cost of consultantsand experts for improvingconstruction supervision and for the highway training Center. The foreign exchange cost of the project is estimated at US$26 million equivalent;the loan will therefore finance about US$63 million of local expenditures. v. Executionof the project will be the responsibilityof the National Highway Department. The loan will be made to the Federal Government,and DNER, as executingagency, will administer a revolving fund for payment to contractorsand consultants. vi. Constructioncontracts will be let on the basis of international competitivebidding. The National Highway Department has prequalified contractorsand is calling for bids. vii. Internal economic returns for the roads in the program range from 13% to 40%, with an average for the whole program of 19%. The range of internal economic returns for the project to be financed by the proposed loan is also 13% to 40X, with an average of 24% for the whole project. viii. The project provides a suitable basis for Bank lending of US$89 million equivalent. On the basis of the average useful life of road constructionworks and length of constructionperiod, the appropriate term would be 25 years, including a four-yearperiod of grace. BRAZIL

APPRAISAL OF A THIRD HIGHWAY CONSTRUCTIONPROJECT

1. INTRODUCTION

1.01 The Government of Brazil has requested financial assistance for a program consistingof: (a) the constructionand paving of 2,530 km of highways, (b) the supervisionfor the proposed works, (c) additional consultingservices for detailed engineeringof 1,626 km and feasibilitystudies of 2,584 km of highways, and for further improvementof DNER's supervision of construction, and (d) internationalexperts for DNER's highway training center.

1.02 On the Bank's recommendation,a general Transport Survey was launched in 1965 with the assistance of foreign consultants (para. 2.04). Based on the findings and recommendationsof the Transport Survey, the Bank is participatingin the financingof the First Highway ConstructionProject (Loan 567-BR, October 1968, US$26 million) and the Second Highway Construction Project (Loan 676-BR, May 1970, US$100 million). The two projects cover about 2,600 km of constructionand/or paving, 2,900 km of detailed engineering, and 3,100 km of feasibilitystudies. Both projects are progressing satisfactorily;as of November 30, 1971, the First Project was about 90% complete and the Second Project 31% complete.

1.03 Other Bank projects in the transportationsector included two railroad projects financed by Loans 65-BR and 92-BR (US$12.5million each) in 1952 and 1953, covering the rehabilitationof the Central do Brasil facilities and the purchase of new rolling stock. A highway maintenance project was financedby Loan 75-BR (US$3 million) in 1953 covering the purchase of maintenanceequipment for the State of Rio de Janeiro. All of the above loans have been fully disbursed. Loan 756-BR (US$45 million) was signed in June 1971; this loan is to assist in the financing of a five-year program for the improvementand expansion of the Santos port. A Federal Railway Project of US$46 million equivalent (Loan 786-BR)was signed on August 25, 1971; it covers the railway component of a mining complex for the exploitation and export of iron ore.

1.04 This report has been prepared by Messrs. Schaefer (Engineer)and Kanaan (Economist)who appraised the project in June/July and December 1971. 2-

2. BACKGROUND

A. General

2.01 With an area of 8.5 million km2, Brazil is the fifth largest country in the world. Population in 1970 was 93.5 million, growing at about 2.9% p.a. which will mean a total of about 120 million in 1980. Overall populationdensity is low, at about 11 per.km 2, but there are wide regional variationsranging from 3,000 per kmZ in the coastal regions of the States of Guanabara and Sao Paulo to less than one per km2 in the Amazonas. The vast natural resourceswhich the country possessesmake for great potential in agriculturaland industrialgrowth.

2.02 Rapid economic growth is one of the Government'smain objectives. Planners are working with rates of 8-10%, and the Bank's 1971 economic report concludedthat an 8-9% level of growth is possible. If the present populationgrowth trend is maintained,an 8.5% growth rate would permit a 5.5% rate of increase in per capita income. GDP would grow from US$37 billion equivalentin 1970 to US$83 billion equivalent in 1980, with per capita GDP increasing from about US$400 to over US$670.

2.03 The Governmenthas emphasizedtransport development to go hand in hand with its economic growth targets. Efficient transport is needed to open up new lands and to move agricultural products from the interior to coastal consumption centers and ports of export; manufactured products need to be transported in the opposite direction.

B. Transport Policy and Coordination

2.04 Since 1964 the Bank has had a continuingexchange of views with the Governmentof Brazil on improvingand extendingthe transportsystem. In 1965 the Governmentstarted a Transport Survey which was carried out by consultantsin two phases. Phase I, covering highway transportin four states, railway transport,coastal shipping,and port operationsin the three main ports, was completedin 1967; a Bank grant of US$1.5 million shared the foreign exchange costs with the Government. Phase II, covering highway transport in fourteen states, was started in 1967 and completed in 1970. Phase II foreign exchange costs were financedby UNDP (US$1.4million), USAID (US$1.0 million) and the Government (US$1.4million). The Bank acted as executing agency for the UNDP. Local costs of both phases were financedby the Government. The main recommendationsfrom these studies are summarizedin Annex 1.

2.05 Both phases of the Survey were conditionedon the Governmentagree- ing to Memoranda of Understandingon steps for improving transportservices. Prior to Loan 567-BR, the Government submitteda Plan of Action (PA-1) summa- rizing its transportobjectives and giving schedules for action on highways, -3- railways and ports. This plan has now been implemented (Annex 2). Prior to Loan 676-BR, the Governmentsubmitted another Plan of Action (PA-2) outlining the measures required to bring about further improvementsin the transport sector. Progress on implementingthe objectivesof this plan varies between modes. In highways, progress has been satisfactoryand major achievements to date are reorganizationof DNER, reorganizationof a number of state highway departments (DERs),delegation of DNER's maintenance functions to the DERs in four states, strengtheningof DNER's planning capacity, and improvement of constructionsupervision (Annex 3). The major changes that remain to be accomplishedare further delegationof maintenanceoperations to the states, and progressivedelegation of constructionto those states where the delegationof maintenancehas been completed. In railways, progress has been slower than expected,but the problems are complex and the Bank's involve- ment is relativelyrecent. Achievementsare: reductionsin the number of employees;closing of most of the uneconomiclines; preparationof corporate plans (to be ready in mid-1972); and consolidationof the Sao Paulo railway system (to be achieved by mid-1972). Major issues remaining are the integrationof the Federal Railways System and the Sao Paulo State Railways, the restructuringof tariffs so as to reflect costs along the lines of the study recently completed,the closing of the remaining uneconomic lines, and the implementationof the corporate plans when they are completed. Progress in ports, where Bank's involvementis also recent, has also been slower than expected. The reorganizationstudy which will be the basis for improvements in operationsand planning and for establishingcost-based tariffs, started in December 1971 and, although several months behind schedule, is progressing satisfactorily. However, the internationalexperts whose services have been financed under the Santos Port Project to help the Governmentin the preparationof an overall ports plan have not yet been employed. For the sector as a whole, the slowness of GEIPOT to address itself to the issues of transport coordination,which was the main task assigned to it after its reorganizationin 1969, has affected all the modes. (para. 2.06).

2.06 GEIPOT, a Governmentagency, was establishedin 1965 to provide counterpartsand facilities,as well as to coordinateand supervise the Transport Survey. When the Survey was completed,GEIPOT was made a permanent agency within the Ministry of Transport. It is responsiblefor preparing national transportpolicy with a view to coordinatingthe various modes of transport and reducing overall transportcosts (Chart 1). While GEIPOT has been doing varied work in the transport field (most of it in highways),it is only now addressingitself to the important function of transportcoordination. The latter is urgently needed since the agencies responsiblefor planning and executingprojects in the various modes - especiallyhighways - have strengthenedtheir planning capabilitiesand, in the absence of sectoral coordinationby GEIPOT, are tending, individually, to make projectionsof transportdemand and modal split for the whole sector. The Governmenthas now confirmed to the Bank its intention that GEIPOT will increase its staff and will direct its efforts towards coordinatingthe various modes and integratingtransport policy with national economic and social strategy. - 4 -

2.07 There is no administrativeallocation of traffic between modes, and users are free to select the mode of transportwhich best suits their requirements. Entry into the interstateroad transportindustry requires DNER approval, but the granting of licenses is practicallyautomatic. Intra- state trucking operators are licensed by the DERs in the same way. Bus companiesmust apply to DNER or to DERs, prove public need, and file tariffs and timetablesfor each route. On the whole, road transportregulation is not unduly restrictive.

2.08 In recent years, about one-fourthof total federal fixed investment expenditureslias been in the transportationsector. In 1970 this repre- sented about Cr.$ 2,600 million (US$563million equivalent),of which about half was spent on highways (Table 1). At the state level, the share of transportationin total capital expenditureis about the same, and is almost entirely directed to road construction.

C. Highways

2.09 Details of the highway sector are given in Chapter 3.

D. Railways

2.10 The Brazilian railway network comprises about 30,000 route-km, of which 25,000 km are operated by a federal company (Rede FerroviariaFederal - RFFSA) and 5,000 km by a state-coordinatedgroup of companies (Sao Paulo State Company). In addition, about 600 km are owned and operated by a Govern- ment mining company (Cia Vale do Rio Doce - CVRD) and carry mostly iron ore traffic. About 90% of the network is meter gauge. Between 1961 and 1970 railway freight traffic, excludingCVRD, increased from about 11 to 15 billion ton-km, but passenger traffic declined from 18 to 13 billion pass-km. Over the same period, the rail share of total freightmovements decreased from 19% to 17%, and passenger traffic from 22% to 7% (Tables 2 and 3).

2.11 Because of the great distances in Brazil, the potential for efficient rail transport is favorable. Much of the traffic lends itself to efficient bulk transportin high capacity trains with mechanized loading and unloading. Forecasts of freight traffic growth indicate potential increasesof at least 50% over the next five years, if the railways can be properly equipped, but capital investmenthas been extremelylow for many years. Costs could be reduced by rationalizingthe route system, by mechanizing track maintenance and freight handling, and by centralizingworkshops, but tariffs must be raised to reflect costs and increase revenue.

E. Ports and Coastal Shipping

2.12 There are 35 principalports in Brazil. In 1969 total port traffic was about 73 million tons of dry and liquid cargo, includingbulk. Santos, the largest port handling general cargo, moved a total of about 13 million tons. Rio de Janeiro handled about 21 million tons of which less than 10% was general cargo. -5-

2.13 There is a National Departmentof Ports and Waterways (DNPVN) within the Ministry of Transport. This organizationis over-centralized and lacks the flexibilityof operationwhich is essentialin the maritime trade. The Governmentis aware of the need to improve DNPVN and port administrationgenerally. As part of the loan agreementof 756-BR for the Santos port, the Governmenthas embarked on a program to decentralizeand reorganizethe administrationof the major ports -- specifically,under the Bank project, to improve administration,management, accounting systems, and planning in the port of Santos. Once the Santos improvementsare effective,the new techniqueswill be introducedto other Brazilian ports.

2.14 Between 1961 and 1970, coastal shipping freight transportby public and private carriers increased from about 14 to 25 billion ton-km, while passenger transportremained negligible. In relation to total movements, coastal shipping freight transportdecreased from 18% to 14% during the 1961-70 period (Tables2 and 3).

F. Air Transport

2.15 Because of increasingeconomic activity among the many large and widely separatedurban centers, air transport is being used increasingly. The major commercialairline company (VARIG)has extensivenational and internationalnetworks. Other airline companiesof national importance are CRUZEIRO DO SUL, VASP and SADIA. Between 1961 and 1970, traffic increased from about 3 billion to about 4 billion pass-km, representingabout 2% of total passenger transport (Table 3). Air cargo transportis negligible.

3. THE HIGHWAY SECTOR

A. The Highway Network-Trafficand Vehicle Fleet

3.01 Brazil has a total highway network of about 951,000 km, of which 52,000 km are national and 121,000 km are state highways. The balance of 778,000 km, or 82% of the network, are provincialroads which are mainly earth roads or mere tracks. About 47% of the national and 18% of the state highways are paved (Table 4). During the last four years DNER, as well as most DERs, have put emphasis on paving their networks. Since 1967, an average of 2,300 km of national and 1,300 km of state roads have been paved annually (Table 5).

3.02 Tables 6 and 7 show the relationshipbetween area, population, motor vehicle registrationand length of paved and unpaved highways in each state or federal territory. Except in the states of Sao Paulo and Guanabara, only a small percentageof the national and state highway network is paved. Nearly all unpaved roads show poor design characteristics,and paving them must almost always be combinedwith some improvementto alignment. -6-

3.03 Road freight traffic grew between 1961 and 1970 at about 11% per annum, resulting in an increase of the share of roads in total freightmove- ment over the period from 62% to about 69% (120 billion ton-km, Table 2). For the same period, the road share of total passenger traffic rose from 74% to 91% (170 billion pass-km, Table 3). Road trafficgrowth is expected to continue at present rates for a time (reflectingBrazil's sustained growth rate), but to taper off by the 1980's. The total vehicle fleet in 1970 was estimatedat about 3.5 million, with about 83% cars and pick-ups, 15% trucks, and 2% buses (Table 8). About 62% of the truck fleet is 1- to 7-ton capacity and is gasoline-powered,about 35% is 4- to 14-ton capacity and diesel-powered,and about 3% is 2- and 3-axle tractor-trailerdiesel-powered (Table 9). Growth of the vehicle fleet has averaged 13% per annum (Table 10). Practicallyall vehicle needs are met by domestic production,and future growth of the fleet will not have to be limited by productivecapacity.

B. Highway Administration

3.04 The National Highway Department (DepartamentoNacional de Estradas de Rodagem - DNER), under the Ministry of Transport, administersthe national highwaynetwork (Chart 2). Maintenanceand constructionis done through 20 district offices kone in each of the states, except Guanabara and Acre); roads in the three federal territoriesare administeredfrom neighboring states. Each of the 22 states has a state highway department (Departamento de Estradas de Rodagem - DER) responsiblefor its highway network.

3.05 DNER's activitieshave in the past been too centralized,with wasteful duplicationof services between the National and State Highway Departments,especially in the more developedstates. Government policy is now to transfer maintenanceand constructionfunctions gradually from DNER to the DERs, thus enabling DNER to concentrateon planning and overall supervision.

3.06 Plans of Action PA-1 and PA-2, submittedby the Government prior to Loans 567-BR and 676-BR respectively,contained objectives regarding reorganizationof highway administration. Considerableprogress in reorga- nizing DNER has since been achieved. In 1968, Brazilianmanagement consultants -- Getulio Vargas Foundation-- completed the first phase of a reorganizationstudy, which resulted in recommendationsbeing made for DNER's new administrativestructure (Chart 2 and Annex 4); enabling legislationwas passed in March 1969. The consultantsare now developing the new administrative framework. Under a USAID loan, US Federal Highway Administration(FHWA) experts are assisting in the technicalaspects of the reorganizationof DNER.

3.07 To enable it to plan the developmentof the entire Brazilianhigh- way network, DNER needed a competentplanning division. Under the Second Bank Highway Project, teams of Brazilianand foreign transporteconomists were engaged, and considerableprogress is being made in systematic planning and programming(including the updating of the originalMaster Plans), as well as in data processingand budget control (para. 3.30). -7-

3.08 DNER is establishinga training center for its middle and upper level professionals,as well as for DER personnel. The center is expected to start operationsby the end of 1972, and the Government is now preparing an organizationplan and an operationsprogram for the first two years; these will be agreed with the Bank before September 30, 1972. It is likely that the BrazilianHighway Research Institute (Institutodo Pesquisas Rodoviarias)will be incorporatedinto DNER to provide a nucleus for the training center. While most of the trainingwill be done by Brazilians, DNER will secure the assistanceof internationalexperts in fields where Brazilian experienceis not yet adequate; financingfor these services is included in the project (para. 4.08). The main focus of trainingwill be to expose staff to technologicalinnovations introduced in Brazil during and since the Transport Survey. Training will be in the fields of administration,planning, project preparation,supervision of construction, bridge design, maintenance,programming and budgeting, and traffic engineering.

3.09 During the Transport Survey, reorganizationstudies were conducted for the main states in Brazil, with a view to increasing the efficiencyof the DERs and thus preparing them for DNER's maintenanceand constructionfunctions to be gradually transferredto them. Under PA-1 and PA-2 the Government indicated that it would ensure that DERs would be gradually reorganizedon the basis of Transport Survey recommendations.

3.10 Considerableprogress has been made in reorganizingmost of the DERs covered by the TransportSurvey (Annex 4). The organizationof the DER of Minas Gerais is shown on Chart 3 as a typical example of the new organizationalstructure.

3.11 Concurrentwith the reorganizationof DERs, DNER is gradually delegating to them responsibilityfor maintainingnational highways, usually on the basis of pilot regions (paras. 3.22 and 3.23). This delegation of maintenance operations is progressingsatisfactorily.

C. Highway Engineering

3.12 The design standardsused for the engineeringof all highway works included in the program are shown in Tables 11 and 12. They correspond to the standardsadopted for the Bank's First and Second Highway Projects, and conform with general design standards in Brazil. These standardsare satisfactory.

3.13 The Bank's involvementin transportin Brazil has contributedto improved engineeringpractices. Foreign consultantsemployed during the Transport Survey introducednew standards and methods and initiated systematic economic evaluationof projects. Based on the new experience,national consulting firms are now establishedin nearly all the major states. While the First Highway Project was designed and is still being supervisedby foreign consultants, all engineeringfor the Second Project (with the exceptionof two expresswaysin the States of Bahia and Rio de Janeiro) is being carried out by Brazilian engineers. As a whole, the experiencewith the new consulting firms has been satisfactory;some of these firms have extended their activities to other Latin American countries.

3.14 The regulatoryprovisions for maximum motor vehicle weight and di- mensions are satisfactory. The maximum axle load is 10 tons for single axles and 17 tons for tandem axles. The enforcementof weight regulations is improvingon national roads, but is still unsatisfactoryon state roads, except in the State of Sao Paulo. Twenty-sixweighing stations have been installedby DNER, 37 stations are planned for 1972, and 71 for the period 1973-75. The Governmenthas given assurancesthat weight regulationson the national system will be properly enforced.

D. Highway Construction

3.15 Improvementof the quality of constructionand supervisionis one of the most importantand most difficult problems in the highway sector. Ingrained malpracticeswill be eradicatedonly by continuouseffort by DNER management. In the past, poor constructionsupervision resulted in poor quality work; long delayed payments to contractorsmade it impossiblefor DNER to enforce contractualwork schedules. Although such bad practicesare still found, adherence to proper practices on Bank projects has helped DNER to improve constructionoperations on all its highway projects in Brazil, as, for instance,in applying bidder prequalificationto all DNER's projects, and adopting competitivebidding on unit price contracts for all major works.

3.16 Better constructionsupervision was one of the objectivesof PA-2 (Annex 3), and contract administrationhas improved noticeably. Consult- ants are being employed for constructionsupervision. Five experts from INGEROUTE (France)are, under the Bank's Second Highway Project, assisting the constructiondivision of DNER to establish proper controls for construction programs; they will be supplementedby additionalexperts for the proposed Third Project (para. 4.08). Operationmanuals are being rewrittenwith assistanceby FHWA advisors.

3.17 The Brazilian constructionindustry is competitiveand there are a large number of well organized and experiencedlocal contractors. Prequalificationfor the Second Highway Project showed the strength of the industry. There were 13 firms and joint-venturesqualified for works over US$20 million, 18 for US$10 - 20 million, 33 for US$4 - 10 million, 22 for US$1.5 - 4 million, and 19 firms for works less than US$1.5 million. For the proposed program, 147 Brazilian firms have been prequalified.

3.18 Local constructionfirms are carrying out about US$600 million worth of highway constructionper year. Including the program appraised in this report, the Bank's highway program at its peak would add about 20% to this volume of work, an increase which can be easily absorbed by the Brazilian constructionindustry. - 9 -

3.19 With the exceptionof the heaviest items (large tractors,scrap- ers and shovels),construction equipment is manufacturedin Brazil. Equipment suitable for most road building operations- except heavy earth-work- is thereforereadily available.

3.20 Road constructionand maintenancefigure largely in labor employment. A recent survey by the Institute of Economic and Social Planning in the Ministry of Planning showed that most road works are carried out by a mix of labor and equipmentwhich varies among the regions in which they are executed. The highest ratios of labor to machinery are found in the north-eastwhere labor is plentiful and relativelycheap due to scarcity of alternativeemploy- ment opportunities;the lowest such ratios are in the south-eastwhere labor is scarce and expensivebecause of the availabilityof alternativeemploy- ment. The survey showed that in 1969, 0.5 million workers were directly employed in road constructionand maintenance,equivalent to 20 percent of total employmentin the manufacturingindustries. In addition,a large but undeterminednumber of jobs will be generatedas a result of road construction;this is especiallyso in the newly opened up areas where the government has initiated massive colonization programs to solve the unem- ployment problems which resulted from migration of farm labor away from the drought-affectedagricultural areas of the north-east. It was estimated by the survey that Bank highway lending in Brazil (the First and Second Highway Projects under construction,and the proposed program) will provide direct employmentfor about 146,000workers between 1970 and 1973. E. Highway Maintenance

3.21 Maintenancehas been much neglected in Brazil in the past, but has now improved considerably,in part throughUSAID helping several states to buy new equipment. Under the Transport Survey, consultantscarried out maintenancestudies in 18 states, and made recommendationsfor improving maintenancemethods and operations, listed equipmentneeds, prepared maintenanceprograms and advised on organizationalchanges.

3.22 Under the Loan Agreements for the First and Second Highway Projects (Loans 567-BR and 676-BR), the Governmentundertook to maintain the entire national network properly. Under the Agreement for Loan 676-BR, the Govern- ment stated that its maintenance functionswould graduallybe delegated (and necessary funds transferred)to those states where project constructionworks would be undertakenon state and/or delegated national roads (Minas Gerais, Santa Catarina and Rio Grande do Sul). Under PA-2, the Governmentdeclared its intention to extend such delegationgradually to all other main states.

3.23 Progress in the delegationof maintenanceis satisfactory. Pilot regions have been establishedin the States of Minas Gerais (Map 7), Parana (Map 11), Santa Catarina (Map 13) and Rio Grande do Sul (Map 15). These states will maintain all national roads in the pilot regions, with the exception of one road in Rio Grande do Sul which is being maintainedby the - 10 -

Army, and four sections of interstatehighways in Parana which will be delegated later. A more detailed descriptionof the status of highway maintenance in the above states is given in Annex 5. Improvementof maintenance operations in these regions,with gradual enlargementof the respectiveareas, is under study by DNER, as is the establishmentof new pilot regions in other states.

3.24 DNER's increasedawareness of the importanceof maintenance,the gradual delegationof maintenancefunctions to the DERs, and the provision of adequate resourcesby the Road Tax (para. 3.26) should lead to further improvement. The Governmenthas confirmed that it will maintain the whole nationalnetwork properly,and has given assurancethat delegationof mainten-- ance functionswill be extended to those states which demonstratethe ability to maintain and police their networks.

F. Highway Financing

3.25 There are two main sources of road user charges in Brazil: the Federal Tax on Fuels and Lubricants (ImpostoUnico Sobre Combustiveise Lubricantes- IUCL) and the Road Tax (Taxa RodoviariaFederal). Two other federal taxes, the vehicle insurancetax and a tax on inter-urbanbus fares, are also levied on road users; states and municipalitiesalso impose other charges but, comparedwith the IUCL and the Road Tax, total receipts from all such charges are small.

3.26 The proceeds of the Road Tax are earmarkedfor road maintenance. The tax, made uniform for the whole country in 1969, is an annual levy of about 2% of the assessed value of vehicles. It is distributed40% to DNER, 40% to the states, and 20% to the municipalities. The Road Tax goes a long way towardmeeting one of the recommendationsof the TransportSurvey that users be charged the short-runmarginal cost. The exceptionsare that passengercars continue to pay more and tractor-trailersless than their correspondingshares. The higher charges on passenger cars are justified on the basis of redistributionof income,while the lower chargeson tractor- trailersdo not cause a great deal of distortionin the overall picture due to their small proportionof the total fleet (para. 3.03).

3.27 In 1972, proceeds from the IUCL are expected to reach about Cr$ 3,176 million, increasing at 8% per annum. The Road Tax will contribute about Cr$ 897 million in 1972 and is expected to increase at an annual average of 14% in 1972-74,based on a vehicle fleet growth rate of 10% p.a. The IUCL will contributean average of 37% of the total 1972-74 expenditures,and the Road Tax a further 11%. Other federal and state taxes, as well as state funds earmarkedfor highways,will contribute 25%; foreign loans and federal budgetary supportwill contribute27% (Table 13). Revenues from road users cover about 70% of total expenditureson highways (includingmaintenance, administration and construction),and substantiallyexceed the cost of maintainingand administeringthe highway system alone. G. Highway Planning

3.28 The 25-yearNational TransportPlan, originallypublished in 1964, is the basis for all investmentsin the sector; it is revised and updated every five years by the Ministry of Transport. The first revision concerning the highway sector was completedby DNER at the end of 1969 and forwarded to the SecretariatGeneral of the Ministry of Transport for coordinationwith other modes and for approvalby the National Council of Transportwhich is now examiningthe plan. Final approval must be given by the National Congress.

3.29 In order to determine annual expendituresfor highways, a 1972-74 investmentbudget has been prepared (Table 13), the greater part of which is for projects selected from priority lists containedin the Transport Survey Master Plans. The balance is for low-cost penetrationroads - the most important of which are the Trans-Amazonroad and the Cuiaba-Santaremroad - to open up virgin areas in the Amazon basin which were not covered in the Transport Survey. The three-yearbudget was passed by the National Congress and approved by the President in November 1971.

3.30 DNER has continuedupdating and expandingthe Master Plans to ensure that highway investmentdecisions are guided by economic priorities; its planning division has been expanded by additionalpermanent staff as well as by national and foreign advisors. Seven Brazilian economistsand four foreign transportexperts are now integratedinto planning operations,the latter financed under the Second Highway Project. Dependabledata are importantfor updating these Master Plans satisfactorily,and the Government has given assurance that it will continue to improve and refine its data- gathering techniques.

4. THE PROJECT

A. General Description

4.01 The program, identifiedon the basis of Highway Master Plans prepared during the TransportSurvey, consists of:

(1) the construction and paving of a total of 1,849 km of national highways (GroupA) in the states of Piaui, Paraiba, Pernambuco,Alagoas, Minas Gerais, Goias, Mato Grosso, Santa Catarina and Rio Grande do Sul, and 681 km of national and state highways (GroupB) in the States of Bahia, Minas Gerais, Espirito Santo, Parana, Santa Catarina and Rio Grande do Sul. (See Maps 1, 2, 3, 4, 5, 6, 8, 10, 12 and 14); 1/

1/ The maps indicate all roads in the program, and do not separate out those to be financedunder the proposed project. To identify the latter, refer to Table 14, Group A. - 12 -

(2) consultingservices for supervision of item (1); and

(3) additionalconsulting services for:

(a) detailed engineeringof 1,626 km of selected road sections;

(b) feasibilitystudies of 2,584 km of selected road sections; and

(c) expanding the advisory services provided under the Second Highway Project for improvementof methods and procedures of constructionsupervision.

(4) internationalexperts for the highway ttaining center of DNER.

The project for which a loan is now proposed consists of the program described above, excluding Group B of the constructionand paving and the corresponding consultingservices for its supervision. The Government,with the agreement of the Bank, is examining the possibilityof obtaining separate financial assistancefor Group B from other sources.

4.02 The lists of roads proposed for constructionand/or paving, detailed engineeringand feasibilitystudies, are shown in Tables 14, 15 and 16, respectively. Their regional distributionis as follows - (the first figure refers to the program, and the figure in parentheses to the proposed project): 23% (14%) in the south, where increasingagricultural production is handicappedby the lack of adequate transportationto markets; 22% (11%) in the south-east; 23% (32%) in the north-eastwhere many priority roads are already being constructedunder the Second Highway Project; and 32% (43%) in the center-west,a fast developingarea where trunk roads are badly needed.

B. Iiighwaysto be Constructedand/or Paved

4.03 The most important characteristicsof the highways for construction and paving included in the project are given in Table 14. More detailed de- scriptionsare given in Chapter 5 - Economic Evaluation- and in Annex 6.

C. ConsultingServices for Design and ConstructionSupervision

4.04 Detailed engineeringstudies for the roads proposed for construction and paving were carried out under the Second Highway Project. The studies, which are in accordancewith modern engineeringprinciples, are complete and the quality is satisfactory.

4.05 All detailed engineeringwas done by Brazilian consultantswith the exceptionof the northern access to the city of Salvador - Highway BR-324 - for which a Brazilian-Germanjoint venture was employed. The consultants are listed in Annex 7. - 13 -

4.06 To establishcontinuity of responsibility,the Governmenthas agreed that consultantswho carried out the detailed engineeringfor highways proposed for constructionand paving should also be employed for constructionsupervision. Signing of the consultants'contracts for supervisingGroup A will be a conditionfor loan effectiveness.

D. AdditionalConsulting Services

4.07 With a view to preparing furtherhighway constructionprojects for future Bank financing,provision has been made in the project for detailed engineeringof 1,626 km and feasibilitystudies of 2,584 km of highways. (Tables 15 and 16). All detailed engineeringand feasibilitystudies, with the exceptionof the detailed engineeringfor the access to Rio de Janeiro of Highway BR-135,will be carried out by Brazilian consultants.

4.08 Under the Second Highway Project, five internationalexperts from INGEROUTE(France) are assistingthe constructiondivision of DNER to establish appropriatesupervising procedures and to coordinatethe various consultants supervisingconstruction (para. 3.16). In order to strengthenDNER's constructiondivision further, three additionalexperienced construction expertswill be provided by the same firm during constructionof the project roads. In addition,international experts will be employed to assist DNER in the formation of a training center for professionalpersonnel both of DNER itself and of the DERs (para. 3.08).

E. Cost Estimates and Financing

4.09 The total cost of the program is estimated at US$349.8 million equivalent,including allowances for quantity and price contingencies;the total cost of the project to be financed from the proposed loan is US$221.4 million equivalent. A summary of costs of the program (definingproject costs and Bank participation)follows: - 14 -

1JS,$ (Ml,1iir, Bank Participation Cr $(Millions) Equivaler:. _ "3$ (Millions) ' t:i a- % Local Foreign Total Local Forei -7 _. _lent

1. Construction & Paving

Group A: 1,849 km 671.0 100.3 771.3 134.2 20. , -,1.7 40 Quantity contingencies (1Qb) 67.1 10.0 77.1 13.4 . . 6.2 40 738.1 110.3 848.4 147.6 2.1 _6'. ,7.9 Price contingencies: us$ (10) 1V4.8 2.? 17, 6.8 40 Cr$ (63%) 465.0 69.5 534.5 1,203.1 179.8 1,382.9 162.4 24.' 186.7 '1.7

Group 3: 681 km 413.3 61.7 475.0 8?.7 12.3 75. / Quantity contingencies (1o%) 41.3 6.2 47.5 S.3 3< 9.5 V 454.6 67.9 522.5 91.0 13. 1)4.5 Price contin encies: Us$ (11%e 10.0 1.5 i.5 V Cr$ (72%) 327.3 48., 376.2 781.9 116.8 898.7 101.0 15.0 'LS.0

Sub-total Item 1 1,985.0 296.6 2,281.6 263.4 39.3 7 ?.7 74.7

2. Consulting Services for Supervision of Item 1

Group A: 77.1 77.1 15.4 15.4 6.2 40 Quantity contingencies (10%) 7.7 7.7 1.5 1.5 0.6 40 84.8 84.8 16.9 16.9 6.8 Price contingencies: US$ (13%) 2.2 2.2 0.9 40 Gr$ (68%) 57.7 57.7 142.5 142.5 19.1 19.1 7.7

Group B: 45.5 2.0 47.5 9.1 0.4 9.5 l/ 2 Quantity contingencies (10%) 4.6 0.2 4.8 0.9 0.1 1.Q / 50,1 2.2 52.3 10.0 0.5 10.5 Price contingencies: uJS$ (15%) 1.5 0.1 1.6 1/ Cr$ (76%) 38.1 1.6 397 - - 88.2 3.8 92.0 11.5 o.6 12.1

Sub-totalItem 2 230.7 3.834.5 0.6 1- 2 7.7

3. Additional Consulting Services

a)Detailed Engineering for 1626 km of highways 39.4 3.0 42.4 7.9 0.6 8.5 3.4 40 2/ b)FeasibilityStudies for 2774 km of highways 20.3 20.3 4.0 4.0 1.6 40 c)Improving DNER's Construction Supervision (72 man- months) 1.0 2.0 3.0 0.2 0.4 o.6 0.4 F.E. d)Highway Training Center 0.3 0.7 1.0 0.1 0.1 0.2 0.1 F.E. Y 61.0 5.7 66.7 12.2 1.1 13.3 5.5 Price contingencies: US$(177M 2.1 0.2 2.3 0.9 Cr$ (59%) 37.0 3.2 40.2 Sub-totalItem 3 98.0 8.9 106.9 14.3 1.3 15.6 6.4

T 0 T A L 2,313.7 309.3 2,623.0 308.3 41.2 349.6 88.8

TOTAL (Bank Project) 1,443.6 185.5 1,632.3 195.8 *5.6 221.4 8 8 . 8 (rounded to 69.0) M These items are not included in the project to be financed under the proposed loan. / For item 2, the foreign exchange costs relate only to the supervision of the Northern Access to Salvador for which foreign consultants will be employed. For item 3 (a), the foreign exchange costs relate only to the studies of the road Rio-Juiz de Fora for which foreign consultants will be employed. / F.E. = foreign exchange cost. - 15 -

4.10 The estimatesof constructioncosts are based on February 1971 estimatesconverted at the then official exchange rate (Table 14). A 10% contingencyhas been added to the constructionand supervisioncosts to allow for quantity increases. It is estimated that about 20% of the construction cost represents taxes.

4.11 A major problem in estimating the equivalentU.S. dollar cost of the project is the relationshipbetween internal inflation of highway construction and engineeringprices, and the exchange rate policy of the Go- vernment. Since the Governmenthas adopted a flexible exchange rate policy, the risk is small that costs expressed in U.S. dollars would be greatly out of line. For this project, the Bank's usual loan disbursementprocedures will be followed, and not the procedures adopted for the First and Second Highway Loans. 1/ A study of trends during the last two years shows a 22% average yearly increase in highway constructionprices. During the same period, the U.S. dollar exchange rate increasedonly 16%, the difference being mainly due to the reduced buying value of the dollar. Based on these trends, price contingencieshave been computed separately for cruzeiro costs and for equivalent U.S. dollar costs, taking into account the following:

a) cost estimateswere made in February 1971, while the bid dates for Groups A and B will be in April 1972 and July 1972 respectively,and the commencementof detailed engineeringand feasibilitystudies will be in June 1972;

b) cash flow estimates are based on a 32-month period for construction and a 14-monthperiod for studies; and

c) the Brazilian law specifies that price revision starts at the date of the proposal,but that prices cannot be escalatedby more than 35% from the date of authorized commencementof work.

4.12 The foreign exchange component for constructionhas been estimated on the basis of contract awards to (a) local firms and (b) foreign firms. The range is from 13% of the total constructioncost if local contractors using primarily local equipmentwere employed, to 39% if all work were carried out by foreign contractorsusing foreign equipment. Under the First Highway project, several foreign contractorsshowed interest, and one contract was awarded to a joint venture with a foreign partner. Under the Second Highway Project practicallyno interestwas shown by foreign construction firms, in spite of the size of the program, the introductionof packaged lots, and the wide internationaladvertising of the project; this has also proved to be the case for this proposed program, and only one foreign firm has been prequalifiedtogether with 147 Brazilian firms. It would be un- realistic to expect that this single firm could undertake a significantpart of the program, and consequentlythe foreign exchange component for constructionhas been estimated at about 13%.

1/ Under Loans 567-BR and 676-BR, although contract prices and payments were in cruzeiros, for loan disbursementpurposes contract unit prices were equated in the US$ equivalent at the exchange rate pertaining at bid opening. - 16 -

4.13 The cost of constructionsupervision has been estimated on the basis of the arrangementsdescribed in para. 4.06. The foreign exchange costs are for foreign consultantsfor the supervisionof constructionin Group B of the northern access to the city of Salvador (paras. 4.05 and 4.09).

4.14 The costs of the additionalconsulting services have been estimated on the basis of:

(a) contracts recently awarded in Brazil for feasibilityand detailed engineering,and

(b) costs of recent Bank contracts for internationalexperts.

4.15 Bank participationwill be 40% of expendituresfor construction included in Group A and its supervision,and for feasibilitystudies and detailed engineering;and the actual foreign costs of consultantsand international experts for improvingDNER's constructionsupervision control and for the highway training center. The foreign cost of the project is estimated at about US$26 million equivalent; the loan of US$89 million will therefore finance local expendituresof about US$63 million equivalent.

F. Execution of the Project

4.16 The execution of the program as a whole will generally follow the pattern outlined in the remainder of this chapter which is devoted solely to the execution of the proposed Bank project. The constructionand paving to be financed under the proposed project (Group A) is, however, limited to national roads, while Group B includes a number of state roads, which will involve additionalagreements among the authorities involved. (Table 14 shows the highway departmentresponsible for each road). In addition, to facilitatecontract administration,the bid date for works in Group B will be about three months after that for works in the project. Execution of the project will be the responsibilityof DNER for national highways, and of the correspondingDER for the feasibilitystudies and detailed engineeringon state highways.

4.17 Subsidiaryagreements will be concludedbetween the DNER and the DERs of those states where feasibilitystudies or detailed engineeringare to be made for state highways. Satisfactoryconclusion of these subsidiary agreementswill be a condition for loan effectiveness.

4.18 Contracts for constructionand paving works will be let on the basis of internationalcompetitive bidding in accordancewith the Bank's guidelines. Consultantshave prepared bidding and contractingdocuments, and will assist the Governmentin analyzing bids and in supervisingconstruction (para. 4.06). The Governmenthas completed prequalification. - 17 -

4.19 For contract purposes, constructionworks in the project have been divided into 52 lots. Sizes of contractsfor road works will range from US$1.5 million to US$7.6 million, and individualbridge contractsstart from a minimum of US$0.2 million. To take advantageof economiesof scale through the use of larger contractors,and at the same time to allow small firms to compete, constructionlots were packaged, where possible, to enable prequalified bidders to bid on packages and/or single lots. There are two packages of US$6.6 million and US$7.7 million.

4.20 During the First and the Second Highway Projects, difficultieswere created by delays by the Central Bank of Brazil in registeringforeign consultants' contracts. Since registrationis legally required before any payments in foreign currency can be made under a contract, satisfactoryconclusion of registrationprocedures in respect of the foreign consultantadvising on supervision(para 4.08) will be a condition for loarieffectiveness.

4.21 In connectionwith the First Highway Project, legislationhas been made effectiveregarding (a) the duty-free import of constructionequipment for the contractualperiod of construction,(b) the price escalationformula, and (c) bidding and contractingdocuments. No further action on these mat- ters is required.

4.22 The Government is proceeding with the acquisition of right-of-way, and constructioncontracts will not be awarded prior to legal expropriation. During loan negotiationsthe Governmentprovided assurance that right-of-way will be acquired expeditiously. After some difficultiesin the First Highway Project, experiencein this matter has been satisfactory.

G. Disbursement

4.23 Disbursementfor the project will follow the usual loan disbursement procedures (para. 4.11).

4.24 The loan will be to the Federal Government. DNER will administer a revolving fund for payments to contractorsand consultants. The Federal Governmentwill finance the cost of all constructionand consultingservices, and the states will reimburse such amounts as are expended on feasibility studies and engineeringrelated to state highways. The revolving fund will be replenishedwith the Bank's reimbursementfor payments made, and with the contributionsof the Federal and State Governments. The governmenthas agreed that DNER will make deposits in the revolving fund as required, so that at the beginning of each calendar month the amount in the revolving fund will be at a level sufficient to cover one month of forward project cost, in accordancewith work schedules. A revolving fund with an initial deposit by DNER of US$2.5 million equivalentwill be establishedin a blocked account at a suitable Brazilianbank, and its establishmentwill be a conditionfor loan effectiveness. Experiencewith the revolving funds for the first two projects has been satisfactory. - 18 -

4.25 Constructionis expected to corience during the third quarter, and is to be completed in about 32 months. Feasibilityand detailed engineering studies will be started in about June 1972, and completed in about 14 months. The schedule of disbursements (Table 17) was estimatedon this basis.

4.26 Legislationregarding payment of foreign experts and repatriation of profits and overheads of contractorsand consultingfirms, provides for levies on contractors'profits - including retention for remittancesabroad - correspondingto about 50% of profits, which is in line with corporate tax rates in most developed countries. Retention on profit remittancescould have the effect of favoring local bidders by about 2.5% of bid prices. How- ever, neither the 50% tax rate nor the slight advantage given to local bidders should deter participationof foreign bidders. In addition, a flat 25% retention in lieu of income tax is applied to remittancesabroad by consulting firms. This retention is covered in local currency payments to foreign consultants. Prior to the Second Highway Project, a legal opinion was provided by the Governmentconfirming the interpretationof the relevant legislation.

4.27 Any surplus of funds remaining in the loan account on completion of the project should be cancelled.

5. ECONOMIC EVALUATION

A. General

5.01 Large increases in highway transportvolumes - passengersand cargo - have resulted in pressures to improve and extend the highway system. This growing demand for transport is the result of three main factors: (a) the opening up of vast areas in the interior and the beginning of their economic development; (b) rising trade and interactionin general among tne cities located in the more developed eastern states; and (c) increased interaction and exchange of products between the developingagricultural interior and the developed industrialcoastal areas and the ports of export.

5.02 To permit priority ratings among alternativeinvestments, Highway Master Plans were prepared during the Transport Survey (Annex 1), and are being updated and expanded by DNER to ensure that highway investmentsare guided by priorities. This is done on the followingbases:

(a) estimatingtraffic between major zones based on production analyses, consumptionpatterns, traffic counts and origin- destinationsurveys;

(b) projecting traffic to 1976 based on projectad production and consumptionpatterns, and extrapolationof past trends for passenger traffic; - 19 -

(c) allocating traffic to modes in the light of relative costs, taking into considerationexpected operationalimprovements in railway transportand coastal shipping;

(d) estimatingcosts of necessary new constructionand improvements to satisfy projected demand;

(e) calculatingbenefits derived from the proposed improvementsthrough lower vehicle operationand highway maintenance costs, taking into account traffic generationthrough induced production,where appropriate; and

(f) listing investmentpriorities and optimum years of opening of the roads.

5.03 The roads included for constructionin the proposed program were selected from a high priority list. Consultantsstudied alternativealign- ments wherever warranted, and final selectionwas based on economic consid- erations. The economic case for constructionof roads in the project to be financed from the proposed loan does not depend on the completionof the roads in Group B for which financingmay be provided from other sources. Roads proposed for detailed engineeringunder the project (Table 15) were selected from the Master Plans and from feasibilitystudies, and those for feasibilitystudies (Table 16) were also selected from the higher priority listings in the Master Plans.

B. The Prolect Roads

5.04 Following are regional descriptionsand characteristicsof the most importantroads in the program; a detailed descriptionof each road is given in Annex 6.

In the North-East Region -

5.05 With a population density above the national average (31% of the population for 18% of the national area), the North-East Region is one of the poorest in Brazil; the per capital income is one-fourththat of the South-East. Its economy is based on low-yieldingagriculture and on animal husbandry, but these are hampered by difficultnatural conditions. To promote regional growth, the Government created in 1959 a developmentagency (Superin- tendenciado Desenvolvimentodo Nordeste-SUDENE)which administersfiscal in- centives for industrial development,and federal appropriationsto provide in- frastructure. As a result of SUDENE's activities,and also through efforts

1/ The North-East Region includes the followingstates: Maranhao,Piaui, Ceara, Rio Grando do Norte, Paraiba, Pernambuco,Alagoas, Sergipe and Bahia. - 20 -

of other Government agencies (e.g. Banco do Nordeste),industrial growth has acceleratedin the north-east,especially in the vicinity of the city of Sal- vador where an important industrialpark (Aratu)has been constructed. In- dustrial production in the region is focussed on the processingof foodstuffs, textiles,and metallurgicaland chemical products. The main agriculturalproducts in the region in 1969 were: sugar cane (27 million tons), manioc (13 million tons), corn (1.5 million tons), and rice (1 million tons). Timber products reached 43 million m3 in 1969, and cattle, pig, goat and sheep herds numbered 20 million, 17 million, 11 million, and 9 million head respectively. The State of Bahia is an importantproducer of cocoa - 96% of national production - and high grade tobacco.

5.06 Two road sections, BR-316/232and BR-104, are proposed for construction in this region. Highway BR-316/232plays an important role in regional integrationin the north-eastby connectingTeresina, Sao Luis and Belem to Recife, one of the major regional growth poles. It also forms a section of the Trans-AmazonHighway which starts in Recife and will eventuallycross the Amazon Basin to Rio Branco near the Bolivian border (Map 1). Highway BR-104 serves the productiveagricultural interior of the north-easternstates, and provides a north-south alternate route to BR-101. 1/ In the South-EastRegion -

5.07 Although only one-tenth of Brazil's area, the South-EastRegion contains 38% of the total population. It is well endowed with natural resources. The fast-growingeconomy is based on modern agricultureand a dynamic industry which is the main supplier of industrialproducts processed in Brazil. The main agriculturalproducts in 1969 were: sugar cane (41 million tons), manioc (5 million tons), corn (4.3 million tons), citrus (3 million tons), rice (2 million tons), and coffee (1 million tons). Timber products in 1969 were 30 million m 3. Cattle and pigs numbered 35 million and 17 million head respectively. The main industrialproducts are steel, chemicals, electricalappliances, and processed foods and textiles. The most important mining operations are in the state of Minas Gerais where 25 million tons of iron ore were extracted in 1969, and where half of the country's steel was produced.

5.08 One of the important trunk roads in this region is BR-381/354 connectingSao Paulo with the center of Minas Gerais (Map 6). One section of BR-354 - between Lagoa Formosa and Estalagem - is being constructedunder the Second Highway Project. It is now proposed to continue it to Perdoes, i.e. to the intersectionwith BR-381. Another very important trunk road which is to be detail engineered is BR-135 which links Minas Gerais to Rio de Janeiro. (Map 5). Under the Second Project, the feasibility was demonstrated of improving this highway from outside Rio de Janeiro to Juiz de Fora (up to 20,000 ADT in some sections, Table 18); a feasibility study is now being

1/ This region includes the States of Minas Gerais, Espirito Santo, Rio de Janeiro, Guanabara and Sao Paulo. - 21 - carried out under the same project to determinewhat improvementsare required to ensure adequate connectionof the highway with the city of Rio de Janeiro.

In the Center-WestRegion 1/

5.09 This region is sparsely populated (22% of the country's area and 5% of its population),but is well endowed with agriculturallands, and attracts an increasingnumber of settlers coming from overpopulatedand poor areas, especially the north-east. The main products in 1969 were: sugar cane (2 million tons), manioc (2 million tons), rice (1.5 millio tons), and corn (1 million tons). Timber products amounted to 11 million m , and cattle and pig herds were 19 million and 8 million respectively. This region is a net exporter of agricultureand animal products.

5.10 The proposed constructionof the Guapo-Jataisection of Highway BR-060 will improve the connectionbetween Brasilia, Goiania and Cuiaba; the Government is building the Jatai-Cuiabasection. Highway BR-163 from Bandeirantesto Campo Grande, included for construction,and from Dourados to Pontal do Tigre, included for feasibilitystudy, form the main north- south axis in the State of Mato Grosso, along with the Cuiaba-Rondonopolis- Bandeirantessection to be built and financed fully by the Government. To- gether with Highways BR-487 or PR-4, and BR-373 (both included for feasibility study in the Southern Region) this route will connect the heart of the Center- West Region to Curitiba and its port at Paranagua.

In the Southern Re ion/

5.11 Containing 7% of the area of Brazil and 17% of the population, this region has important agriculture,cattle raising, lumberingand wood processing activities. Agriculturalproduction in 1969 consistedof: sugar cane (5 million tons), rice (2 million tons), and wheat (1.5 million tons). Other importantproducts are grapes, tobacco and citrus fruits. Pigs, cattle, and sheep number 22 million, 19 million, and 14 million head respectively. The region exports part of its agriculturaland animal products mainly to the metropolitanareas of Sao Paulo and Rio de Janeiro.

5.12 Most of the roads included in the program are important on the regional level and carry heavy traffic, as do most of the main roads in the south (Table 19). As already discussed in para. 5.10, BR-487 and BR-373, both included for feasibilitystudy, have national importance.

1/ This region includes the states of Goias, Mato Grosso and the federal district of Brasilia.

2/ This region includes the States of Parana, Santa Catarina and Rio Grande do Sul. - 22 -

C. Benefits from the Project

5.13 Most of the quantifiedbenefits are derived from road user savings accrued to generated as well as normal or diverted traffic. During the preparationof the Highway Master Plans, estimateswere made of benefits as a result of upgrading earth and gravel roads to paved roads. They were based on theoreticalcomputations checked against trucking companies' records, and test runs of typical Brazilisarvehicles over differenttypes of roads. The estimateswere updated by GEIPOT in 1971 (Table 20). In the case of heavy traffic routes with large percentagesof urban commutingtraffic, benefits were also derived from reductionin congestion,as well as time savings reflectedin the wages of drivers of commercialvehicles and travellerson business trips. Other quantifiablebenefits accrue from the difference in maintenancecosts between well-constructedpaved roads and existing gravel and earth roads.

5.14 A number of benefits that are diffcult to quantify but that are also attributableto the proposed road improvementsare the general reduction in travel time and increasedcomfort, lowering of inventory costs, and less spoilage of fresh fruits and vegetables. In addition, some of the improved roads reaching into the frontier areas will facilitatemigration from the densely populatedareas along the coast to newly opened agriculturallands in the interior,where potential for growth is high but where human resources are lacking.

5.15 Net benefits resulting from the proposed road works, discounted over a 20-year economic life of the roads, give internal economic returns ranging from 13% to 40% for Group A (to be financed under the proposed loan), and from 13% to 34% for Group B (to be financed separatelyfrom the proposed loan); the IER is 19% for the program as a whole, and 24% for the project to be financed by the Bank. A sensitivityanalysis indicates that reasonable variations in vehicle operatingand maintenance costs - the inputs most likely to vary from the estimates - have little effect on IER (Table 21).

6. AGREEMENTS REACHED AND RECOMMENDATION

6.01 During loan negotations,agreement was reached with the Government on the following principalmatters:

(a) the enforcementof weight regulationson national roads (para. 3.14);

(b) the maintenanceof national roads and the policy of delegationof maintenancefunctions (para. 3.24);

(d) the employmentof consultantsfor supervisingconstruction (para.4.06);

(e) the registrationof the contractfor additionalconstruction experts(para. 4.20); and

(f) the acquisitionof right.of-way(para. 4.22).

6.02 Conditionsfor loan effectivenesswill be:

(a) the signingof supervisoryconsultants' contracts (para. 4.06); (b) the conclusionof subsidiaryagreements between the Federal Governmentand the DERs (para.4.17);

(d) the establishmentof a revolvingfund (para.4.24). 6.03 The projectprovides a suitablebasis for a loan of US$89million equivalent.On the basisof the averageuseful life of road construction works and lengthof constructionperiod, the appropriateterm for the loan wouldbe 25 years,including a four-yearperiod of grace.

February29, 1972

ANNEX 1 Page 1

BRAZIL

TRANSPORTSURVEY

1. Main 'Recommendations

Transport Coordination

1. The consultantsmade general recommendationswhich, if adopted, would go far to ensure the movement of trafficby that mode of transport which incurred the least cost to the economy. it was recommendedthat in- vestments be made according to economic criteria, that there be free user choice of mode of transport,that governmentpolicies should not unduly favor or discriminate between modes, and that users be charged in proportion to the costs of resources consumed in the provision of the services.

Railways

2. An extensive analysis of the Federal and State railways was made and the main recommendations included:

(a) the merger of al'l railways into one system, controiled by a Board with Managing Director responsible to the Minister of Transport;

(b) a program of abandonment of uneconomic lines;

(d) reduction of personnel;

(e) adoption of cost-based tariffs; and

(f) "normalization" of accounts (writing of concessionary Government traffic at full commercial rate).

Ports

The ports of Rio de Janeiro, Santos and Reci-e were studied in detai; with a view to providing guidelines for the improvement of administration and to prepare master plans for investrernt. The s_tua_ion in the ?orts was unsatisfactory in almost every respec-, tne prLncipa! cause bein-, overcentralization. IE was proposed that the National Porr Organizazion be ANNEX 1 Page 2

responsibleonly for rational planning and coordination,and that individual ports should be transformedinto largely independentport authorities. For the port of Rio de Janeiro, the Survey recommendedextensive rehabilitation and expansion of facilities, including new wheat and dry bulk terminals, and new general cargo berths. In Santos, new facilities, including a container berth, were recommended to handle increasing traffic. In Recife, replace- ment of almost all equipment was recommended as well as the rebuilding of sheds.

Coastal Shipping

4. The consultants were asked to identify major shortcomings and to recommendany new investment in ships that may be required. A major find- ing was that the present fleet was much too large for the available cargo, and extensive scrapping was recommended. Fixed sailing schedules were sug- gested, as were the consolidation of shipping companies and the decrease in the role of the regulatorybody, the Merchant Marine Commission.

Highways

5. The highway studies covered the following states:

Phase I

Minas Gerais, Parana, Santa Catarina and Rio Grande do Sul

Phase II

Region A Region B Region C Region D Region E

Sao Paulo Rio de Janeiro Bahia Alagoas Ceara

Mato Grosso Espirito Santo Sergipe Pernambuco Piaui

Goias Paraiba Maranhao

Rio Grande do Norte

The studies concluded with the listing of priorities for investment on national and state networks, forecasts of financial expenditures on highway investment, maintenance equipment, and maintenance and administration. They also recommended improvements in organization and maintenance, financial programs and user charges. ANNEX 1 Page 3

II. Consultants Engaaged in the Transport Survey

Consultants and Nationality Duties

Phase I

(1) Coverdale and Colpitts (USA) Coordinating consultants and railway studies.

(2) INGEROUTE (France) Highway Master Plan and Organization Study, and Feasibility Studies in the State of Minas Gerais.

(3) KAMPSAX (Denmark) Highway Master Plans and Organization Studies, and Feasibility Studies in the States of Parana, Santa Catarina, and Rio Grande do Sul.

(4) NEDECO (Netherlands) Study of the Ports of Rio de Janeiro, Recife and Santos, and of coastal shipping.

Phase II

(1) KAMPSAX (Denmark) Coordinating cor.sultants.

(2) Parsons, Brinkerhoff, ) Highway Haster Plans and Feasibility Quade and Douglas (USA) ) Studies in the States of Sao Paulo, ) Mato Grosso and Goias.

Edwards and Kelcey (USA) ) ) Highway Organizat on Stucies in the ASPLAN (Brazil) ) States of Mato Grosso and Goias.

MONTOR-MONTREAL(Brazil) )

(3) NORCONSULT(Norway) ) P.ighway!-S. s .t anr and Organization ) Studies ir. r- .tAs c_ i'.o de Servicos do Planejamento ) Janeiro and Espir1c3 Santo. (Brazil) )

(4) Xaver Dorsch (German) Highway'r 'ster Plani. and Organization Studies, and Feasibility Studies in the States of Bar.ia and Sergipe. ANNEX I P age 4

(5) Louis Berger (USA) Highway Master Plans and Organization Studies in the States of Alagoas, Pernambuco, Paraiba, and Rio Grande do Norte.

(6) SAUTI (Italy) Highway Master Plans and Organization Studies in the States of Maranhao, Piaui, and Ceara. ANNEX 2 Page 1

BRAZIL

FIRST PLAN OF ACTION (PA-1)

Highway Sector

Progress of Implementation

(December 1971)

ITEM STATUS

1. Reorganizationof Highway Administration:

(a) Completion of DNER's Achieved. New organizationlegalized reorganizationstudy by by Decree No. 64.242 of March 21, the end of 1968. 1969.

(b) Gradual transfer of DNER's Experts of FHWAstarted in July 1970. constructionand maintenance functionsto the DERs. Constructionfunctions are being delegated to states on a road by road basis.

Maintenance- New Road Tax is ear- marked for maintenancepurposes. In ~the-caseof delegated national roads, states receive funds out of DNER's share of new road tax. All new agreements regarding delegationof construction of national roads by DERs now specify that such roads will later be maintainedby respective DERs.

'. Restructuringof road user charges: New uniform Road Tax, decreed in October 1969 and put into effect in January 1970, raises additionalfunds from roac users. Toll charges will be started in 1972 for roads with ADT greater than 10,000. ANNEX 2 Page 2

(The first roads with toll charges will be Rio-Sao Paulo, Rio-Petropolis and Sao Paulo-Santos). By 1975 total road user chargeswill be paying for maintenance and administrationof the existing network, and for 70% of costs of expanding the network.

3. Preparation of investment budgets to be based on Transport Survey priorities: Three-yearinvestment budget 1968-70 was essentiallybased on survey priorities. The new three-yearinvestment budget (1972-74)is based on survey priorities. Exceptions are low- cost feeder roads for agricultural development,and penetrationroads to open up virgin territories. ANNEX 3 Page 1

BRAZIL

SECOND PLAN OF ACTION (PA-2)

Highway Sector

Progress of Implementation

(December 1971)

1. Reorganization of Highway Administration

(a) Implementation of DNER's Four experts of FHWA are assisting reorganization with assis- DNER. Additional experts will be tance of FHWA experts. called on a temporary duty basis as needed.

(b) Gradual delegation of Pilot regions have been established DNER'a maintenance and in Rio Grande do Sul, Santa Catarina construction functions to and Minas Gerais. Maintenance of all the DERs. national roads in these regions has been delegated to DERs. In the State of Parana, all national highways have been delegated to the State, except for four sections of interstate highways which will be delegated later. DNER is now preparing a program for the establishment of pilot regions in the States of ?ernambuco and Bahia.

(c) Reorganization of DERs. Reorganization coapleted in Rio de Janeiro, Goias, Sao Paulo, Mato Grosso, Pernambuco and Minas Gerais.

Reorganization (based on Transport Survey recommendations) progressing in Bahia, Rio Grande do Sul, Parana and Santa Catarina.

U.S. consultants a-.a assisting the State Highway Department of Rio Grande do Sul in the implementation of reorganization. ANNEX3 Page 2

2. Planning

(a) Strengtheningof INER's INER has retained the services of planning capacity. Brazilian transport economists (TRANSPLAN)and four foreign transport experts (SYSTAN, U.S.).

(b) Establishment within DNER A separate division has been estab- of a central investment lished and is working in coordination review mechanism for na- with the TRANSPLANand SYSTANexperts. tional and state projects.

3. Supervision

(a) Improvement of construction INER has organized a specialized supervision. staff of construction engineers and inspectors; writing of operation manuals has been started with assistance by FHWAadvisors and central group for coordination of supervision.

(b) Employment of consultants Consultants for construction super- to assist DNER's supervisory vision (Second Highway Project) are staff. in the field.

Cc) Creation within DNER of a A team of five foreign experts central group for coor- (INGEROUTE, France) and Brazilian dination of supervision. counterparts is assisting the Con- struction Directorate of DNER. ANNEX 4 Page 1

REORGANIZATIONOF HIGHWAY ADMINISTRATION

1. The main purpose of reorganizationof the Brazilianhighway admi'n- istrationis to reduce the centralizationof highway activitiesin DNER, and to eliminateduplication of servicesbetween the DNER and the DERs. To accomplishthis target, the Governmentdecided to graduallytransfer maintenance and constructionfunctions from DNER to the DERs. This will enable DNER to concentrateon planning and supervisingthe national and state highway systems and to be specificallyresponsible for:

(a) planning and regulatoryfunctions;

(b) financingof road programs and supervisionof utilizationof resources;

(d) supervisionof the applicationof legislationand rules; and

(e) statisticaldata.

The DERs will ultimatelybe responsiblefor the executiveaspect of highway activities,including all national and state roads.

Reorganizationof DNER

2. During the TransportSurvey reorganization,studies were made for the DERs of the main states of Brazil. The resulting recommendationswere conditionedby DNER's reorientationof objectivesand reorganizationof its administrativestructure. Plan of Action PA-1 was submittedby the Govern- ment to the Bank in August 1968, and Plan PA-2 ia Eabruary 1969. Both Plans containeddefinite objectivesregarding reorganization of highway administration. During the first phase of reorganizacion,a study of the general administrativestructure of DNER was made by the Getulio Vargas Foundation. This study was completedin 1968. The resulting recommendationswere re- viewed by the Bank and approvedby the Government,and were legalizedby Decree No. 64.242 of March 21, 1969. Tne consultantsare now working on the second phase of this study, developingnew regulartonsand operationalpro- cedures,and writing administrative,operational, and technicalmanuals. The Vargas Foundationis assistedby four U.S. FdWA experts provided under a loan from JSAID for technicalassistance. Tne internal ret;ulationsof DNER have been re-writter.and were legalizedby Decree No. 68.243 of March 25, 1971. The first manuals were publishedin 1971. ANNEX 4 Page 2

3. Under the Bank's Second Highway Project, the services of consultants are being provided for the strengtheningof DNER's planning and construction divisions. Seven Brazilian transporteconomists (TRANSPLAN)and four foreign transportexperts (SYSTAN,U.S.) are assisting the planning division. Five foreign constructionexperts (INGEROUTE,France) are working within the constructiondivision, together with their Brazilian counterparts.

Reorganizationof DERs

4. Under PA-1 and PA-2 the Governmentindicated that it will ensure that DERs will be gradually reorganizedin accordancewith the recommendations of the Transport Survey. Reorganizationhas progressed in all of the more important states covered by the Survey as follows:

Rio Grande do Sul: Since 1970, foreign consultants (Frederic Harris, U.S.) provided by a USAID loan have been assisting the State Highway Department in organizationalchanges. Enabling legislationis expected to be passed in 1972.

Santa Catarina: The draft law concerning organizationalchanges has been submitted to the State Government and approval is expected in 1972.

Parana: The new State Governmentwishes to accelerate the re- organizationprocess. The proposed new organizationcorresponds closely with the Transport Survey recommendations. The draft law regarding reorganizationis expected to be submitted to the State Government for approval in 1972.

Sao Paulo: Reorganizationhas been completed. Required legislation was passed in 1970.

Minas Gerais: Reorganizationhas been approved and legislation was passed in August 1971.

Goias: Reorganizationhas been approved and legislationwas passed in June 1970.

Mato Grosso: Reorganizationhas been approved and legislationwas passed in March 1971.

Rio de Janeiro: Reorganizationhas been approved and legislation was passed in March 1971.

Bahia: First reorganizationwas carried out in 1969 and required legislationwas passed in June 1969. Revision of reorganization is being studied.

Pernambuco: Reorganizationhas been approved and legislationwas passed in March 1971. ANNEX5 Page 1

STATUS OF HIGHWAY MAINTENANCE IN THE SOUTHERNSTATES AND MINAS GERAIS

1. Since October 1970,Bank supervision missions have been carrying out a detailed evaluationof operating results in the maintenance field. So far, missions have assessed the maintenance organizationsand operations in the States of Rio Grande do Sul, Santa Catarina,Parana and Minas Gerais.

Rio Grande do Sul

2. The State has 12,297 km of national and state highways (Attachment I, MIap15). In June 1971, an agreementwas signed between DNER and the State Highway Department (DepartamentoAutonomo de Estradas de Rodagem - DAER) establishinga pilot region in the northwesternpart of the State. All national roads in this pilot region, with exceptionof one road which is being maintainedby the Army, are delegated to the State for maintenance. The pilot region comprisesabout 40% of the entire area of the State and 37% of the road network (Map 15). A committee consisting of DNER and DAER officials and a U.S. FEWA advisor, determined (a) the funds required for economi- cally justified improvementsof delegatedroads, based on the findings and recommendationsof the TransportSurvey, and (b) the funds required for maintenance of the delegated roads.

Santa Catarina

3. The State has 6,768 km of national and state highways (Attachment II, Map 13). In August 1971, an agreementwas signed between DNER and the DER of Santa Catarina, establishinga pilot region in the western part of the State. All national roads in this pilot region are delegated to the DER/SC for maintenance. The selected region comprisesabout 20% of the area of Santa Catarina and 18% of the road network (Map 13). As in the State of Rio Grande do Sul, a committee consistingof DNER and DER/SC officials,as well as a U.S. FHWA advisor, has made a study regardingrequired funds, and its report was used as the basis for agreementbetween DNER and DER/SC.

Parana

4. The State has 10,227 k:.of national and state highways (Attachment III, Map 11). In Seitember 197' an agreementwas signed between DNER and DER/PR delegating all national roads in t.aeState of Parana to the DER/PR, with the exception of:

BR-116 - from the waw_z.. Santa Ca.arina to the border w:;_ Sao 'au_o;

3R-277 - iron Cur > ':; Para,.raguaand from P.elogio to Foz do 7guacuaC; ANNEX 5 Page 2

BR-373 - from Ponta Grossa to Relogio;

BR-468 - from Curitiba to the border with Santa Catarina.

These four road sections will be delegated to the State as soon as existing repair contracts are finished and the State has proved its capability to efficientlymaintain and police high-trafficinterstate highways.

5. As in the other states, a committeehas been formed to determine the required funds, and its report was used as the basis for agreementbetween DNER and DER/PR.

Minas Gerais

6. The State has 20,575 km of national and state highways (Attachment IV, Map 7). An agreement,betweenDNER and DER/MG was signed in August 1971, establishinga pilot region in the northern part of Minas Gerais. All national roads in this region are delegated to the DER/MG for maintenance (Map 7).

7. Experiencegained in this pilot region will greatly contribute to the improvementof national and state roads in the State, which eventually will be the sole responsibility of DER/MG. The region comprises about 42% of the entire area of the State and 24% of the road network.

8. As in the other states, a committee studied the maintenance situa- tion and determined the required funds, and its report was used as the basis for agreement between DNER and DER/MG. HIGHWAYMAITENNCE ANx STAT: OF RIO GRIUMSDO SUL Attachment M

June 1971

Highwa,s Maintained by the State Iiizhway Department (DAMR)

State Highwa;ys D¢legated National HiUhway7s km kmn Ng|l-I Residency iPaved1GravellEarth Total iPavedIGravel EarthITotall Total 1 Xsteio 277 470 29 776 _ _ _ _ 770 2 Bonto Gongalves 72 605 27 704 _ _ _ _ 704 3 S.Crus do Sul 9 454 56 519 _ _ _ - 519 4 Santa IV.aria 42 292 79 413 _ _ _ - 413 5 Cruz Alta - 400 428 828 _ _ _ _ *28 6 Passo Fundo 95 402 199 696 107 51 _ 158 6,K)' 7 Pelotas 62 257 415 734 - - - - 734 8 Bage - 524 176 700 - - _ - 700 9 Aleerete _ 359 58 417 - 120 - 120 417 10 Caohoeira do Sul - 430 25 455 - _- - 455 11 Lajeado 155 354 60 569 27 113 _ 140 709 12 Santiago - 243 261 504 _- - - 504 13 Erechim 10 428 115 553 - - - - 553 14 S. Rosa 4 365 237 606 - _ _ - 606 15 S. Francisco do Sul 81 388 241 710 - - _ 710 Total maintained by DAIR 807 5,971 2s406 9,184 134 284 _ 418 9,602

Highways Maintained by the National Highw!k Department D _ERand the Army National Highways

Residency Paved Gravel Rarth Total

Osorio 100 _ - 100 S, Leopoldo 413 - - 413 S. Gabriel 232 91 - 323 Pelotas 360 58 - Livramento - 213 29 24 2 Uruguaiana 105 287 - 392 Cruz Alta 18 246 _ 264 Vacaria 150 _ Total Maintained by DNER 1,.334 895 29 2,303 Total Maintained by A1my 114 273 - 387

Total Maintained IUetwork I= Paved 'Gravel larth Tot al State Highway Department 941 6,255 2,406 9,602 Niational Highwey Department 1,384 895 29 2,308 Army 114 273 - 387 2,439 7,423 2,435 12,297 ANNEX 5

AttacbMent II HICIWAI AIlNTUANCE STATEOF SANTACATARINA June 1971 Highways Maintained by the State Highway Departzent (DER/SC) State Highva.y Delegated National Highways mn Tot al N2 BeoidencY IPavedlGrevellEarthlTotal ,Pav.djGrave1EarthTotaa km

1 Joinrile 9 145 - 154 44 43 - 87 241 2 Blumenau - 274 - 274 80 - - 80 354 3 Lages _ 469 27 496 - - - - 496 4 Joaoaba - 148 23 171 - 24 - 24 195 5 Tubarao - 414 - 414 - - - - 414 6 Canoinhas - 130 - 130 - 153 - 153 283 7 Curitibanos - 66 35 101 - 78 - 78 179 8 Chapeco - 158 109 267 - - - - 267 9 Florianopolis 13 395 - 408 - - - 408A 10 Rio do Sul - 301 - 301 - - _ _ 3C1 11 S.Joaquim - 223 105 328 - - - - 328 12 Caoador - 221 20 241 - - - - 241 13 Ararangua - 198 - 198 - - - _ 198 14 S.liguel do Oesto - 190 53 243 _- - - 243 15 S. Aiaro dc. Iporatriz A 193 _ 197 - _ - - 197 16 Brusqua 10 285 - 295 - _ - - 295

17 S.Bento do Sul - 102 47 149 29 47 - 76 225 18 Vidife4ra - 129 70 199 - - - 1_99 19 PalmJtes - 140 89 229 - - - 229 20 Criciuma _ 198 - 198 - - 1-98 21 Conoordis - 92 - 92 _- - - 92 Total maintainodby DIZRAC 36 4,471 578 5,085 153 345 _ 498 5,533

Highways laintalined by the National HighwayZDepartment (DMBI) Nat ional Highays km N3 Residency Paved Gravel Uarth Total

R116/1 Tubarlo 260 - - 260 R.16/2 Joinviloe 104 - - 104 1-16/3 Lajes 315 103 - 418 R-16/4 Joagaba - 242 - 242 IRF_ Itajai 161 - - 16' 1?-16/1 Xanxere -

V-116/2 Pinhalzinho _ _ _ - EF-16/3 Lieuol do Oeste - - _ _ Total maintained by DINER 840 345 _ 1i7

Total iaintained Yetwork km Paved Gravel Earth Tot al Stato Highway Department 189 4,816 578 5.583 National Highway Department § -I 1,185

1,029 5,161 578 6,768 - ANNEX 5

Attachment ITI

SUZIL STATEOF PAEA HXMaNVAIMINTDWICE

July 1971 HighMs Maintained bq

the State HighwVayDepartmt (DR/PR)

State lEehss Delegated National Highways km ~~~~~~~~km Total No Reidweies Paved Gravel Earth Total Paved Gravel Earth Total km 1 Curitiba (north) 112 187 89 388 68 - - 68 456 2 Ponta Grossa 86 437 21 544 155 46 42 243 787 3 Firai do 9ul 132 127 384 643 - - - - 643 4 uniao da vitoria - 150 203 353 - - 85 85 438 5 Guasrpuava - 230 236 466 49 - - 49 515 6 Tacarezinho - 1334 a71 405 114 81 - 195 600 7 Iondrina 47 244 149 1440 79 - - 79 519 8 Cascavel - 59 419 549 - - 60 60 609 9 Curitiba (mouth) - 82 100 182 82 - - 82 264 10 Marinag 102 145 155 402 87 - - 87 489 11 Sao Mateua - 76 42 118 83 - - 201 12 Pato Branco - 128 238 366 89 - - 89 455 13 CampoMeurao 52 211 199 492 - - - - 492 14 Parsnavai - 279 224 503 37 - - 37 540 15 Irati - 69 270 339 - - - - 339 16 Ibeiti - 127 248 375 - 62 - 62 437 17 Cruteiro do Owte 79 269 101 449 - - - - 449 18 Axucarasal - 57 179 236 183 _ - 183 419 19 Francico Beltra4 - 187 294 481 - - - - 481

Total Maintained by DzR/PR 610 3,228 3,893 7,731 1,026 189 187 1,402 9,133

HighWaYsMaintained by the National Highway De%artment (DNER) National HRighway. km No Residacies Paved Gravel Earth Total

1 Curitlba 113 117 - 230 2 Mafra 105 - - 105 3 Ponta Groooa 91 - - 91 4 sao Jose doe Pinhido 32 - - 192 5 Fos do Iquacu 476 - - 4?6

TPa1 Maiutained by DMIR 977 117 - 1,094

Total Maintained Networks km Paved Gravel Earth Total StAte HighlW Department 1,636 3,417 4,080 9,133 Natioal HiamW Department 977 117 - 1,094

2,613 3,534 4,080 10,227 ANME 5

UWAr-LTNTED" Attachment IV STATEOF JAINASOm( JuIM1971 Highyaws Maintained by- the State Eighwa7 Departmnent (DIL4V)

State HiChwvsa Delegated National lliehwav's

IP Reosidencies Paved Gravel EMarth Tot al Paved Cravel 'Marth Tot al Tot al 1 Belo Horizonte 191 152 433 776 - _ _ _ 775 2 Guanhaos - '99 480 679 - - - _ 679 3 Par& de Minas - 348 578 926 - - - - 926 4 Barbacena 187 186 357 730 - - - - 7'0 5 Uba 157 133 254 544 20 - - 20 564 6 Niontes Claros a 193 487 638 47 - - 47 73' 7 Arama ill 77 367 55, - - - - 55 8 Diamantina _ 114 478 592 - - - - 2 9 Curvelo - 222 159 381 42 - - /2 A21 10 Varginha 143 79 244 466 127 - - 127 593 11 Uberlandia 114 265 62 441 69 - - 69 510 12 Itabira 62 99 283 444 - - - - 444 13 Brasilia da Ninas - 221 103 324 - - - - 224 14 Patos de Minas 24 53 280 357 - - - - ' 7 15 Po9 os de Caldas 79 128 155 362 103 - - 103 465 16 Oliveira 115 195 144 454 _ - - 454 17 Ponte Iova 7 178 134 319 37 30 - 67 386 18 Monte Carmelo - 517 146 663 _- - - 663 19 Itajubl 124 96 63 283 67 10 - 77 360 20 Formiga 257 264 86 607 _ - - 607 21 Jeguitinhonha - 25 298 323 _ - - 323 22 Araauari - 157 337 494 _ - - 494 23 Gov,aladares - 104 297 401 78 - - 78 479 24 Passoes 85 248 168 501 -- - - 501 25 tUberaba - 166 196 362 _- - - 362 26 Parsaatu - 117 357 474 _- - - 474 27 Pedra Azul - 282 283 565 _- - - 565 28 Teofilo Otoni - 187 426 613 _- - 613 29 Ianhumirim 31 234 195 460 - - - 460 30 Juis de Fora 223 17 44 4 65 8 Total l;aintained by DER 1,918 5,418 7,894 15,230 677 40 - 717 15,947

Highways 13aintained b_y the National Hijhwa6yDepartment (D1ITl)

lit o.a ighways

N9O Residency Peved Gravel a.rth Total RL6/4 Juiz de Fora 201 - - 201 3-6/5 C.Ir.dustrial 346 - - '46 R_6/6 Bet im 142 - - 142 8-6/7 Pouso "logre 285 - - 28. 8-6/8 Oliveira 12C - - 120 B-6/1 Uber1India 220 - - 220 8-6/11 Set e Lagoas 420 48 - 468 R-6/12 Paraoatu 273 117 - 390 F;F6/1 Prata 325 22C - 5;51 FF_6/2 Patos do Minas 43 151 -194 F6/J3 Teofilo Otoni 402 - _ 402 lF-6/4 CaratinCa 220 - - 220 EF-6/5 Araxa. 206 - - 206 EF_6/6 Leopoldina 181 - - 181 EF-6/7 Casambu 92 - 925 HF-6/8 Bom Despaoho 130 - - 130 V-6/9 Rio Casoa 231 lol - 332 E-6/1C Uberaba 88 _ _ 88 ZF_6/11 Campos Altos 60 - - 6C Total Maintained 0, DIMR 3,985 643 - 4,,628

Total Maintained Networ1,

Pavod Gravel !arth Total Stato Highway Department 2,95 5,456 7,894 15,947 ]Jationarl Hihwve Department 3,9&5 643 - 4,628 Total 6,580 6,101 7,894 20,575 Annex O Page I

THE PROJECT ROADS

The principal economiccharacteristics of the regions in which roads are located are presentedin Chapter 5 - Economic Evaluation. The essentialtechnical characteristics of each road, includingdescription of existing conditionsand proposed standards,are found in Tables 14-16. Quantificationof economic benefits is given in Table 21. Description of each road follows:

A. ROADS PROPOSED FOR CONSTRUCTIONAND/OR PAVING

GROUP A

In the North-EastRegion

1. Route BR-316/232 (300.5km, Maps 2 and 3). This road plays an importantrole in integratingvarious parts of the north-eastby linking Teresina,Sao Luis and Belem on the one hand, to Recife, the major growth pole of the region, on the other. In addition it provides a major link between the proposed Trans-AmazonHighway and the north-easternurban centers. The traffic is predominantlylong distance. The 1970 ADT was 345 vehicles of which 65% were trucks,and the annual growth rate is estimated at 10%.

2. Route BR-104 (282 km, Map 3). This highway serves two functions- inter-connectingthe productiveagricultural interior of the north-eastern states, and providing an alternateroute to BR-101 between Natal and the other importanturban centers of northern Brazil, and Salvador,Rio de Janeiro and Sao Paulo in the south. The 1970 ADT on these road sectionsvaried from a high of 750 to a low of 225 vehicles,with heavy vehicles varying from 75% to 45%, and the traffic growth rate increasingbetween 6% and 10% per year.

In the South-EastRegion

3. Route BR-354 (211.4 km, Map 6). This road is a continuationof the section of BR-354 included for constructionin the Second Highway Proj- ect. Together they form a part of the direct route from Patos de Minas, an importantagricultural area, to Sao Paulo, via Route BR-381. The 1970 ADT was about 350 vehicles with 40% trucks, growing at an average of 10% per year.

In the Center-WestRegion

4. Route BR-60 (2S!.6 i&-. 3) is a link in the hi!hwav that connects Brasilia and Goiania to Cuiaba, via Route BR-364. It also connects at Rio Verde with Route BR-L52 included for constructionin the Second High- way Pro-ect. These two roads zogether link the region which they serve to Sao Paulo. The 1970 ADT was 955 vehicles with 60% trucks, and the annual growth rate is about 10%. ANNEX 6 Page 2

5. Route BR-153 (236.2km, Map 8). This is a part of the highway between Brasilia and the centralregions of Brazil on one hand, and Belem and the northern regions of the country on the other. Since its construction ten years ago, this road has played an importantrole in opening up the interiorwhich has good agriculturaland cattle raising potential. The 1970 ADT was 510 vehicles with 60% trucks, and the growth rate of vehicles is about 10% per year.

6. Route BR-050 (218.2 km, Map 8) is the only missing link in the most direct route between Brasilia and Sao Paulo, decreasing travel distance between these two centers by about 100 km compared to the present route via BR-153. The most importantflows are of manufacturedproducts and fuels from Sao Paulo to Brasilia. On the regional level, this route connects Bra- silia to the cattle-andwheat-producing areas around Uberlandiaand Uberaba. The 1970 ADT was about 115 with about 50% trucks, growing at an annual rate of 10%. The diverted trafficdue to the shorter distance is expected to be about 700 vehicles per day in the first year after opening.

7. Route BR-163 (65.5 km, Map 8). This is a link in the highway connectingGuiaba, the capital of Mato Grosso, to Campo Grande, the major growth pole in the southern part of the state where agricultureand cattle- grazing are important. Detailed engineeringfor the Bandeirantes-Cuiaba section of BR-163 is being carried out with special funding by the Govern- ment. The 1970 ADT was 370 vehicles with 50% trucks,and the annual rate of growth of the vehicles is 6%.

In the Southern Region

8. Route BR-386/158 (186.2 kIn,Maps 12 and 14). This link completes the "Kennedy Highway" which connects the western part of Santa Catarina and Northern Rio Grande do Sul to Porto Alegre. The last 54 km outside Porto Alegre were constructedunder the First Highway Project. The 1970 ADT was 510 vehicles with about 60% trucks, and average annual rate of vehicle growth was 12%.

9. Route BR-158 (67.2 km, Map 14) is a continuationof Route BR-158 now being constructedunder the Second Highway Project. It links the north- central parts of Rio Grande do Sul to Santa Maria, an importantregional center. The 1970 ADT was 340 with 45% trucks,and the average annual rate of growth was 10%.

GROUP B

In the North-East Region

10. Route BR-324 (11.6 km_,Map 4). This is an extensionof Route BR-324 included for constructionin the Second Highway Project, and forms the major access route to the northern section of the city of Salvador. It is expected to relieve the congestionat the entrance to the city, as the ADT in 1970 was 16,000 vehicles (23% trucks) and the trafficgrowth rate per year is estimatedat 6%. ANNEX 6 Page 3

In the South-EastRegion

11. Route MG-174/168/28/157(292.4 km, Map 6). These routes form an efficient regional network in southern Minas Gerais, and serve one of the important agriculturalareas of that state. The 1970 ADT varied on the various links from a high of 275 vehicles to a low of 260 vehicles, and the truck compositionvaried between 25%-30%. Annual traffic growth is estimated at 10% throughout.

12. Route ES-37/36 (61.6 km, Map 5). This road is of regional importance in the north-centralpart of Espirito Santo, and connects Nova Venecia and Sao Domingos, twqoregional centers, to Vitoria, the state capital,via Routes ES-2 and BR-259 (both under constructionand paving). The 1970 ADT was 260 vehicles of which 60% were trucks, and the estimatedvehicle growth rate is 9% per year.

In the Southern Region

13. Route PR-12 (45.3 km, Map 10) is a link of regional importance which connects the fertile agriculturalarea in northern Parana to the east- west-orientedtransport system of the state via Route BR-369. The 1970 ADT was about 655 with 47% trucks, and the average annual growth rate was about 10%.

14. Route BR-153 (247 km, Maps 10 and 12) forms an importantregional highway in the center of the three southern states, linking these production areas to the consumptioncenters to the north. It connects with the Sao Mateus-Uniaoda Vitoria section of Highway BR-476 which was constructedunder the First Highway Project. The 1970 ADT was 675 vehicles of which 57% were trucks, and the average annual growth rate was 13%.

15. Route RS-19 (23.6 km, Map 14). This road north of Porto Alegre is of regional importanceand connects via Route BR-116 the agriculturalarea which it serves to the rest of the state. The 1970 ADT was 805 vehicles of which 25% were trucks, and the average annual rate of growth was 10%.

B. ROADS PROPOSED FOR DETAILED ENCINEERING

In the North-East Region

16. Route BR-412/110 (77 km, Map 3). These two road sections have the highest priority in the route which provides a diagonal connectionin the central part of Paraiba and ?ernambucobetween two important east-west highways, namely BR-232 originatingin Recife and BR-230 starting in Joao Pessoa. The 1969 ADT was estinatedat 320 vehicles, of which about 40% were trucks; the estimated annuaL traffic growth is about 10%.

17. Route BR-3U/BA-630 (232 km, Map 4J. This route plays an important role in eas,-west transportin the southern part of Bahia, connecting the ANNEX 6 Page 4 area of BacmJesus de Lapa on the Sao Franciscoriver to BR-116, the major north-southaxis between the north-eastand the center-east. The estimated 1969 ADT is 300 with 50% trucks, and the average annual traffic growth rate is 9%.

18. Route BR-101 (137 km, Map 4) is a missing link of the important north-southcoastal route which will significantlylessen the travel time between the north-east and the center-eastby providingan alternativeroute to the present one which goes through Salvador. The 1969 ADT was 750 vehicles with 70% trucks, and the rate of traffic growth is estimatedat 10% per year.

In the South-East Region

19. Route BR-135 (215 km, Map 5) is the main road connectingRio de Janeiro to Belo Horizonte, as well as the access to Rio de Janeiro from the north via Route BR-464, and from the south via Routes BR-462 and BR-116, the latter being the principal route to Sao Paulo. In 1969, ADT on this road varied from 5,500 on the section farthest from Rio de Janeiro, to a high of about 21,000 in the section nearest Rio de Janeiro, with about 30% trucks. A number of alignments to connect this route to the urban system of Rio de Janeiro are being studied, and the best alternativewill be included for detailed engineeringunder the present project.

20. Route MG-10 (137 km, Map 6) links Pirapora on the Sao Francisco River, to Corinto in the centralpart of Minas Gerais, and from there via Routes BR-135 and BR-40 to Belo Horizonte. The 1969 ADT was about 200 vehicles with 33% trucks, and the average annual traffic growth was about 10%.

21. Route MG-23 (144 km, Map 6). The completionof this road will provide a connectionbetween four importantnational routes, BR-135, BR-381, BR-262 and BR-040. In addition,this road provides a direct link between the steel plants located in Divinopolisand the coal-producingareas to the north. This coal movement alone provides about 100 trucks per day in ADT expected to be about 300 vehicles.

In the Center-WestRegion

22. Route BR-364 (197 1.m, Map 8) is the major road connectionbetween Cuiaba, southern Goias and western Minas Gerais connecting,at Canal Sao Simao on the Goias-MinasGerais border,with Route BR-365 which is being constructedunder the Second Highway Project. The 1969 ADT was 300 vehicles, with 50% trucks; the traffic growth rate is 7% annually.

In the SouthernRegion

23. Route PR-13 (176 Icm,Map 10) includinga link to Nova Esperanca, is of regional importance in the agriculturalnorth-central part of the state of Parana, linking a number of regional centers to Route BR-376, the ANNEX 6 Page 5

main diagonal highway in the state. The 1969 ADT varied between 400 and 2,100 vehicles on the various sections, and truck percentage varied between 40 and 60; average annual growth rate was 12%.

24. Route RS-12/50 (274 km, Map 14) forms a small network in the northern part of Rio Grande do Sul, connecting the agriculturalcenters of Santa Rosa and Ijui to Route BR-386 included for constructionin this project. The 1969 ADT varied from 150 to 350 with about 60% trucks, and average annual rate of vehicle growth was 15%.

25. Route BR-158 (37 km, Map 14) is a continuationof BR-158 from Cruz Alta included in this project for construction(described above in para. 9).

C. ROADS PROPOSED FOR FEASIBILITYSTUDY

In the North-East Region

26. Routes BR-316/110 (409 km, Map 3). These routes, together with the section of BR-316 included for constructionin the proposed project, and the southern part of route BR-110, form an important regional network serving both local and long-distancetraffic in the north-east,and connecting the north-eastwith the central part of the country. In addition, they provide access to the hydro-electriccomplex at Paulo Alfonso which at present is quite isolated, but which will contribute greatly to the development of the region.

In the South-EastRegion

27. Route MG-4/ES-39 (132 ki, Maps 5 and 6) forms an important link between the Governador Valadares area in Minas Gerais and the coastal network of the state of Espirito Santo, and from there to the port city of Vitoria.

28. Route MG-8 (117 km, Map 6) forms an important regional link between the agriculturalarea of Patos de Minas (cereals,dairy products and cattle) and Belo Horizonte via BR-354 and BR-262.

29. Route MG-58 (59 km, Map 6) links the south-easternpart of Minas Gerais with northern Sao Paulo, and plays an importantrole in the movement of the regional products and especially coffee, sugar cane, dairy products and cereals.

30. Route BR-331 (76 km, Map 9) forms a part of the most direct route between the city of Sao Paulo and Belo Horizonte. It carries very heavy traffic at present and will require new alignment and additional lanes. ANNEX 6 Page 6

31. Route SP-89 (60 km, Map 9) is the missing link between the city of Sao Paulo and the newly reconstructedport of Sao Sebastiao where cargo movements have increased significantlyin recent years.

In the Center-WestRegion

32. Route BR-163 (183 km, Map 8) is a section of the road from Dourados in southern Mato Grosso to the port of Paranagua in the state of Parana (described in para. 33). Together with another section north of Campo Grande, for which detailed engineering is now being carried out by DNER, this con- tinuous route will connect the center-west part of Brazil to the southern states and especiallyto the ports of export.

In the Southern Region

33. Routes BR-487 (502 km), BR-373 (376 km) and BR-277/376 (81 km), (Map 10) are alternative routes from which one will be selected. That route, together with Route BR-163 described above in para. 32, will provide an alternativeexport route through the port of Paranagua for the products of the central part of Brazil, thus relieving the pressure on the port of Santos. In addition, it will provide access to the central part of the state of Parana where potential for developmenthas been limited by lack of efficient transport.

34. Route BR-467/163 (217 km, Map 10). Two alternativeroutes are to be evaluated to link the regional centers of Toledo and Guaira in western Parana in which large increases in agriculturalproduction (soybeans,wheat and dairy products)are taking place.

35. Route BR-158 (175 km, Map 10) is a system connecting south-eastern Parana with Santa Catarina. The continuationof BR-158 to Rio Grande do Sul is proposed for constructionunder this project. This is a region of active colonizationwhere agriculturalproduction (corn, wheat, soybeans) as well as pig-raisingis increasingrapidly.

36. Route RS-19 (103 km, Map 14) will provide an alternativeaccess route from Porto Alegre to BR-101, the major north-southaxis, and from there to the rest of the country. In addition, it provides reliable transport to an area with a strong tourist potential.

37. Route RS-3 (94 km, Map 14) is a section of one of the most important east-west highways in Rio Grande do Sul linking Argentina and Porto Alegre. This road serves one of the best agriculturalareas in the state, and will complete an improved link between the two important centers of Santa Maria and Santa Cruz. The adjacent section is being constructedunder the Second Highway Project. Annex 7 Page 1

BRAZIL

THIRD HIGHWAY CONSTRUCTIONPROJECT

ConsultantsEngaged in the Preparationof the Third Highway Project

1. Detailed Engineering

Carried out under Second Project for constructionand/or paving under the Third Project.

Consultantsand Nationality State Road Number

Sondotecnica(Brazil) Piaui and Pernambuco BR-316/232

Astep/H. Santana (Brazil) Piaui and Pernambuco BR-316/232

Tenpo (Brazil) ) Dorsch (Germany) ) Bahia BR-324

Proenge/Etapa/Lasa(Brazil) Minas Gerais BR-354

Consol/Espa (Brazil) Minas Gerais MG-174/168/28 and BR-267/MG-157

Euler (Brazil) Goias BR-060

Asplan/Planta (Brazil) Goias BR-060

Etel (Brazil) Parana PR-12

Proenge (Brazil) Parana-Santa Catarina and Rio Grande do Sul BR-153

Enecon/Asplan (Brazil) Rio Grande do Sul and Santa Catarina BR-386/158

Planisul/Projesul(Brazil) Rio Grande do Sul RS-19

Planisul/Projesul(Brazil) Rio Grande do Sul BR-158

Astep (Brazil) Paraiba,Pernambuco, and Alagoas BR-104

Tecnosolo/Berger(Brazil) Espirito Santo ES-36 and ES-37 Annex 7 Page 2

Hidroservice(Brazil) Goias BR-153

Astep/Transcon(Brazil) Mato Grosso BR-163

Hidroservice - Asplan/Planta - Proenge-Euler-Enecon/Espa (Brazil) Goias BR-050 1/

2. Feasibility Studies

Carried out under Second Project, for detailed engineering studies under the Third Project.

Consultantsand Nationality State Road Number

Astep (Brazil) Paraiba and Pernambuco BR-412/110

Transcon/Tenpo(Brazil) Bahia BR-030/BA-630

H. Santana/Orplan(Brazil) Bahia BR-101

Euler (Brazil)/Dorsch(Germany) Guanabara, Rio de Janeiro and Minas Gerais BR-135

Etuc (Brazil) Minas Gerais MG-10

State Highway Department- Minas Gerais Minas Gerais MG-23

Etel (Brazil) Parana PR-13 and un- numbered road

Enecon/Etel (Brazil) Rio Grande do Sul RS-12/50

Planisul/Projesul(Brazil) Rio Grande do Sul BR-158

Enecon/Espa(Brazil) Goias BR-364

1/ This study was not included in the Second HighwayProject; it was carried out by DNER. TABLEi1

BRAZIL

THIRD HIGHWAY CONSTRUCTIONPROJECT

Federal INvestment in Transport by Mode (In millions of June 1970 Cr$)

1965 1966 1967 1968 1969 1970

Railways 514.4 438.1 353.8 305.3 331.5 452.9

Highways 820.1 819.2 1,072.9 960.7 1,086.5 1,366.4

Maritime 243.0 358.0 401.4 627.2 524.2 644.7

Airport 71.4 75.8 92.5 93.9 106.5 127.5

TOTAL 1,6648.9 1,691.1 1,920.6 1,987.1 2,0o48.7 2,591.5

Sources: Anuario Bstatisticodos Trarsport.s- 1970 Assessoria do Ministerio da Aeronautica- 1970 Aasessoriade Planejanento do Ministerio dos Transportes- 1970

Febrauy3jwr2397i2. TABLE2

BRAZIL

THIRD HIGHWAYCONSTRUCTION PROJECT

a) Freight Transport by No, 1961 - 1970 (billions of net ton-km)

Railways Coastal Air Year TOTAL Total Federal State CVRD Shipping Highways Transport 1961 75.3 14.4 7.9 3.2 3.3 13.9 46.8 0.2 1962 84.7 15.0 8.1 3.0 3.9 16.2 52.7 0.2 1963 89.3 15.6 8.0 3.3 4.3 14.2 59.3 0.2 1964 97.9 16.3 8.5 2.9 4.9 14.3 66.7 0.2 1965 108.1 18.6 9.2 3.2 6.2 14.0 75.0 0.2 1966 119.6 19.1 9.6 2.8 6.7 15.8 84.1 0.2 1967 132.0 19.9 9.5 2.7 7.7 18.9 93.5 0.2 1968 145.5 21.6 10.4 3.3 7.9 21.2 102.5 a 0.2 1969 159.4 25.o 11.6 3.2 10.2 22.7 111.5 0.2 1970 175.4 30. 0L2 12.3 2. .14.8 24.7/L 120.5 0.2

b) Percentage Shares

Coastal Air Year TOTAL Railways Shipping Highways Transport

1961 100 19.2 18.4 62.2 0.2 1962 100 18.4 19.2 62.2 0.2 1963 100 17.4 15.9 66.5 0.2 1964 100 17.0 14.7 68.1 0.2 1965 100 17.5 12.9 69.4 0.2 1966 100 16.3 13.2 70.3 0.2 1967 100 15.2 14.3 70.3 0.2 1968 100 14.8 14.6 70.5 0.1 1969 100 15.7 14.2 70.0 0.1 1970 100 17.1 14.1 68.7 0.1

/ Estimates.

Sources: Railways - FRRSA - 1970 CVRD- 1970 Dados Estatisticos das Ferrovias de Administracao Direta e Indireta do Estado de Sao Paulo. 1964-69. Coastal Shipping - Brazil Transport Survey - SUNAMAM Highways - Brazil Transport Survey, and DNER estimates - 1970 Air Transport - Directoria de Aeronautica Civil - 1970

February 23, 1972. B R A Z I L

THIRD HIGHWAYCO9STRUCTION PROJECT

Passen_er-Kilometers, Percentage Shres, and Average Annial tERates and Se ete by" Mcde of- Transport Passenger r- o eter…969…

------P a s s e n g e r - K i I o m e t e r s ------

Mode of Transport & Item Billions Percent Shares Average Annual Growth Rate

1961 1962 1963 1964 1965 1966 1967 1968 1969 1961 1965 1966 1968 1969 1961- 1961- 1961- 1961- _--______65 66 68 69

1. Highways

Medium and long distance traffic;

Bus ...... 25.5 n.a. n.a. n.a. 45.1 52.4 60.8 70.6 81.9 31.7 36.7 28.6 h2.1 43.5 15.3 8.6 15. 15.7

Automobile ..... 13.0 n.a. n.a. n.a. 21.2 23.4 25.8 28.4 31.3 . 16.1 17.3 19.0 16.9 16.6 13.0 14.5 11.8 11.6

Subtotal ...... 38.5 n.a. n.a. n.a. 66.3 75.8 86.6 99.0 113 .2L/ 47.8 54.0 47.6 59.0 60.1 1h.6 10.7 14.4 14.4

Local traffic:

Bus .10.9 n.a. n.a. n.a. 19.5 22.4 25.7 29.5 33.5/1 13.5 15.9 23.8 17.6 17.8 15.6 24.0 15.3 14.9

Automobile ..... 10.1 n.a. n.a. n.a. 16.5 18.2 20.0 22.0 2 4.2,7 12.5 13.h 16.1 13.0 12.8 13.1 16.5 11.8 11.5 Subtotal ...... 21.0 n.a. n.a. n.a. 36.o 4o.6 45.7 51.6 57.7h 26.0 29.3 39.9 30.6 30.6 14.4 21.0 13.7 13.5

Total 59.5 n .a. n.a. n.a. 102.3 116.4 132.3 150.5 17 0.9/1 73.8 83.3 87.5 89.6 90.7 14.5 14.7 14.2 14.1 2. Railways

Interior traffic . . 7.4 7.9 8.2 8.1 8.2 6.4 7.7 5.8 5.6 9.2 6.7 4.8 3.5 2.9 2.6 - 2.9 - 3.4 - 3.h

Commuter traffic 10.6 11.4 10.9 10.3 9.4 7.2 7.7 7.6 7.4 13.1 7.6 5.3 4.5 4.0 - 3.0 - 7.4 - 4.7 - 4.4

Total 18.0 19.3 19.1 18.4 17.6 13.6 15.4 13.4 13.0 22.3 04.3 10.1 8.0 6.9 - 0.6 - 5.5 - 4.2 - 4.0

3. Coastal Shipping .. 0 .3 0.3 0.3 0.3 0.4 0.3 0.3 0.5 o.6 0.4 0.3 0.2 0.2 0.4 7.5 0 7.6 9.1

4. Airways .2.8 . 3.1 3.0 2.6 2.6 3.0 3.2 3.7 3.9 3.5 2.1 2.2 2.2 2.0 - 1.8 1.4 4.1 4.3

5. Total .80.6 n.a. n.a. n.a. 122.8 134.8 151.2 268.1 188.4 100.0 100.0 100.0 100.0 100.0 11.1 10.9 11.1 11.2

1/ Estimates. 7/ Includes international travel, since figures for domestic travel are not available separately.

Sources: GEIPOT - 1961-68 Railways - RFFSA and CVRD, and Railways, State of Sao Paulo - 1968/69. Coastal Shipping - SUNAMAN- 1968/69 Airways - Diretoria da Aeronautica Civil - 1968/69 Highways - DWER - 1969.

n.a. = not available. TABLE 4

B R A Z I L

THIRD HIGBWAYCONS TRUCTION FROJECT

Classification of Highways

lo gths According to Type of Jurisdiction, December 1970

State or Territory TOTAL National Hhwaysh_ State Hh I/ Provincial Highways

Total Unpaved Paved Total Unpaved Paved Total Unpaved Paved

Rondunia ...... 1,517 1,210 1,210 - 61 61 - 246 246 -

Acre .802 598 598 _ 99 99 - 105 105 -

Amazonas ...... 2,231 821 795 26 539 353 186 871 850 21

Roraima. 642 502 502 - - - - 140 140 -

Para .18,058 637 402 235 7,741 6,774 967 9,680 9,583 97

Amapa .1,159 676 676 - - - - 483 475 8

Maranhao. 24,242 2,109 1,670 439 1,296 1,221 75 20,837 20,813 24

Piaui .22,259 1,549 1,268 281 1,754 1,745 9 18,956 18,956 -

Ceara .47,996 2,158 1,155 1,003 14,199 3,153 1,036 41,639 41,551 88

Rio Grande do Norte .9,411 750 280 470 2,484 2,336 148 6,177 6,177 -

Paraiba ...... 24,004 937 301 636 3,067 3,009 58 20,000 20,000 -

Pernambuco .17,380 1,989 924 1,065 2,391 1,801 590 13,000 13,000 -

Alagoas ...... 11,477 659 357 302 2,418 2,289 129 8,400 8,400 -

Fernando de Noronha .40 - - - 40 40 - - - -

Sergipe .4,897 324 104 220 1,324 1,303 21 3,249 3,249 -

Bahia. 64,582 4,437 2,602 1,835 6,245 4,998 1,247 53,900 53,884 16

Minas Gerais ...... 134,826 7,242 2,324 4,918 17,252 114,639 2,613 110,332 110,156 176

Espirito Santo .16,649 1,106 410 696 3,556 3,438 118 11,987 11,987 -

Rio de Janeiro .19,457 1,632 340 1,293 4,508 2,909 1,599 13,317 13,160 157

Guanabara .1,164 133 11 123 1,031 428 603 - - -

Sao Paulo .170,125 5,199 678 4,520 14,926 5,221 9,705 150,000 147,000 3,000

Parana .83,958 2,508 545 1,963 8,004 6,868 1,136 73,446 73,396 50

Santa Catarina ...... 32,067 1,525 618 907 5,498 5,298 200 25,044 25,044 -

Rio Grande do Sul .171,154 3,098 1,314 1,784 9,797 8,940 857 158,259 158,156 103 12 Mato Grosso. 34,076 6,227 5,674 553 9,337 9,331 6 18,512 18,500

Goias .35,907 3,321 2,637 683 12,586 12,189 397 20,000 20,000 -

Federal District, Brasilia 666 193 - 193 473 449 24 - - -

TOTAL 950,746 51.540 27,395 24,2.145 120,626 98,892 21,734 778,580 774,828 3,752

l/ As of 1969. 2/ As of 1967.

Source: National Highway Department - July 1971.

February 23, 1972. TABLE 5

BRAZIL

THIRE HIGHWAXCCNSTRUCTION PROJECT

Development of National and State HigzhwayNetwork, 1967-70 (in kilometers)

National Highways State Highways

Year Total Unpaved Paved Total Unpaved Paved 1967 38,670 23,716 14,954 114,183 94,909 19,274 1968 46,852 27,500 19,352 115,918 95,878 20,040 1969 50,482 28,087 22,395 120,626 98,892 21,734 1970 51,540 27,395 24,145 125,3341/ 101,9061/ 24,476I'

1/ Estimated.

Source: National Highway Department - July 1971.

February 23, 1972. B R AZ I L

TBIRD HIGHWAYCCNSTHIITION PHIJECT

Relationship between Area, Population and Length of Highways - 1970

Area in Population Paved Highways Total Higbways km Pved 2 km Total 2 km Paved k. Tetal State 'ooo sq.km. in '000 in km g in km 2/ RiMoways/t000 kmo Higways/'000 kmho Hiohwavs/1000 Inhab. Highwavs/1000 InhabS."/

Rondmnia 243 129 1,271 - 5.23 9.85

Acre 153 215 - 697 - 4.55 3.24

Amazonas i,564 961 212 1,360 0.14 0.87 0.22 1.41

Roraina 230 46 - 502 - 2.18 10.91

Para 1,248 2,048 1,202 8,378 o.96 6.71 0-59 4.09

Amapa 140 116 - 676 - 4.83 5.83

Maranhao 329 3,776 514 3,405 1.56 10.35 0.14 0.90

Piaui 251 1,736 290 3,303 1.16 13.16 0.17 1.90

Ceara 148 4,440 2,039 6,357 13.78 42.95 0.46 1.43

Rio Graide do Norte 53 1,603 618 3,234 11.66 6i.02 0.39 2.02

Paraiba 56 2,384 694 4,004 12.39 71.50 0.29 1.68

Pernambuco 98 5,208 1,655 4,380 16.89 44.69 0.32 o.84

Alagoas 28 1,606 431 3,077 15.39 109.89 0.27 1.92

Sergipe 22 900 241 i,648 10.95 74.91 0.27 1.83

Bahia 561 7,421 3,082 10,682 5.49 19.04 0.42 1.43

Rinas Gerais 587 11,280 7,531 24,494 12.83 41.73 0.67 2.17

Espirito Santo 46 1,597 814 4,662 17.70 101.35 0.51 2.92

Rio de Janeiro 43 4,694 2,892 6,140 67.26 142.79 0.62 1.31

Guanabara 1 4,297 726 1,164 726.00 1,164.00 0.17 0.27

Sao Paulo 248 17,716 14,225 20,125 57.36 81.15 o.8o 1.14

Parana 200 6,742 3,099 10,512 15.50 52.56 o.46 1.56

Santa Catarina 96 2,911 1,107 7,023 11.53 73.16 0.38 2.41

Rio Grande do Sul 282 6,653 2,641 12,895 9.37 45.73 0.40 1.94

Mato Groese 1,232 1,518 559 15,564 0.45 12-63 0.37 10.25

Goias 642 2,989 1,080 15,907 1.68 24.78 0.36 5.32

Distrito Federal (Brasilia) 6 5),5 217 666 36.17 Lu.O 0.40 1.22

TOTAL 8,507 93,531 45,879 172,126 5.39 20.23 0.49 1.84

LJ Length of State Highways for 1969 2 Excliding Municipal Highways

Source: DNER: July 1971

December 27, 1971 TABLE7

BRAZIL

THIRDHIGHWA CONSTRUCTION PROJECT

Relationship between Area, Population and Number of Vehicles - 1970

Area in Population Vehicles/ State Thousand in Total/2 Vehicles/ '000 Sq. Km Thousands Vehiclet '000 Sq.Ku Inhab.

Rondo nj 243 129 2,052 8.4 15.9 Acre _ 153 215 789 5.1 3.6 Amazonas Y 1,564 961 8,460 5.4 8.8 Rorai4a,Y/ 230 46 571 2.5 12.4 Para Y 1,248 2,o48 20,721 16.6 10.1 Amapa 140 116 1,045 7.4 9.0 Maranhao V 329 3,776 l1,571 35.2 3.0 Piaui 251 1,736 9,081 36.2 5.2 Ceara 148 4,440 47,,444 320.5 10.7 Rio Grande do Norte 53 1,603 18,393 347.0 11.5 Paraiba 56 2,384 25,965 463.6 10.9 Pernambuco 98 5,208 80,002 816.3 15.3 Alagoas 28 1,606 15,690 560.3 9.7 Sergipe 22 900 10,629 483.1 11.8 Bahia 561 7,1421 91,677 163.4 12.3 Mina Gerais 587 11,280 304,144 518.1 26.9 EspiritoSanto 46 1,597 34,648 753.2 21.7 Rio de Janeiro 43 4,694 145,154 3,375.6 30.9 Guanabara 1 14297 366,016 366,016.0 85.2 Sao Paulo 248 17,716 1,1493,Q70 6,020.14 84.3 Parana 200 6,742 204,629 1,023.1 30.3 Santa Catarina 96 2,911 103,122 1,074.2 35..4 RioGrandl qo,Sul 282 6,653 329,907 1,169.9 49.6 Mato GrossoY 1,232 1,518 37,871 30.7 24.9 Goias 642 2,989 55,938 87.1 18.7 Distrito Federal 6 545 32,722 5,453.6 60.0 Total 8,507 93,52 3,451,311 405.7 36.9

V/ Statistical Abstracts of Brazil - 1970 (Population Estimates as of July 1). P/ Estimates. Source: Brazilian Institute of Geography and Statistics: Demographic Ceosus of 1970 - Preliminary Results.

September 17, 1971. TABLE 8

BRAZIL

THIRD HIGHWAY CONSTRUCTIONPROJECT

Vehicle Registrationsby State, 1970 d

State Cars Buses Pick-Ups2 Trucks Total Distribution )

Rondonia 1,130 21 58 843 2,052 .06 Acre 567 12 55 155 789 .02 Amazonas 7,124 476 253 607 8,460 .25 Roraima 455 - 40 76 571 .02 Para 15,836 930 281 3,674 20,721 .60 Amapa 604 29 170 242 ,o145 .03 Maranhao 8,345 184 316 2,726 11,571 .34 Piaui 6,465 188 716 1,712 9,081 .26 Ceara 37,109 839 2,089 7,407 47,444 1.37 Rio Grande do Norte 12,374 316 2,047 3,656 18,393 .53 Paraiba 18,238 469 2,606 4,652 25,965 .75 Pernambuco 61,341 1,887 4,110 12,664 80,002 2.32 Alagoas lo,807 488 615 3,780 15,690 .45 Sergipe 6,595 806 110 3.,118 10,629 .31 Bahia 67,685 1,839 6,535 15,618 91,677 2.66 Minas Gerais 212,825 5,523 30,715 55,081 304,144 8.81 Espirito Santo 21,901 799 3,811 8,137 34,648 1.00 Rio de Janeiro 103,452 5,136 4,973 31,593 145,154 4.21 Guanabara 321,789 13,385 277 30,565 366,016 10.60 Sao Paulo 1,228,433 15,154 43,909 205,574 1,493,070 43.26 Parana 133,103 2,267 16,484 52,775 204,629 5.93 Santa Catarina 67,280 1,282 9,538 25,022 103,122 2.99 Rio Grande do Sul 260,357 4,721 15,687 49,142 329,907 9.56 Mato Grosso 23,911 648 4,952 8,360 37,871 1.10 Goias 37,927 746 7,700 9,565 55,938 1.62 DistritoFederal 28,826 622 617 2,657 32,722 .95

TOTAL 2,694,479 58,767 158,.664 539,401 3,451,311 100.10

/ Estimate 2/ Pick-ups and vans.

Sourcesi:Brazilian Institute of Geographyand Statistics- 1970. GEIPOT.

Seotember17, 1971 TABLE,9

BRAZIL

THIRD HIGHWAYCONSTRUCTION PROJECT

Vehicle Fleet, 1970

I - CARS 2,695,000

II - PICK-UPS 159,000

Sub-Total 2,854,O00

III - BUSES

a) Gasoline 18,000

b) Diesde 41,000

Sub-total 59,000

IV - TRUCKS

a) 2-axle gasoline (I-4.5 tons) 35,000

b) 2-axle gasoline (4.5-7 tons) 300,000

c) 2-axle diesel (4.5-7 tons) 50,000

d) 2-axle diesel (7-9.5 tons) 26,000

e) 3-axle diesel (8-14 tons) 15,000

f) 2-axletruck-trail.er (10-15 tons) 11,000

g) 3-axle truck-trailer (over i5 tons load capacity) - 3,000

Sub-total 440,000

TOTAL 3,353,000

/ Estimates.

Source: GEIPOT - 1970.

September 17, 1971 TABLE 10

BRAZIL

THIRD HIGHWAY CONSTRCTION PRDJCT

Increase of Vehicle Registrations3 1967 - 1970

Cars and Pick-ups Trucks Buses Total

Year Unita Units % Units % Units %

1967 1,914,573 79.9 428,761 17.9 53,254 2.2 2,396,588 100.0

1968 2,008,15 80.4 435,621 17.h 55,018 2.2 2,499,154 100.0 1969 2,505,602 81.9 499,163 16.3 56,827 1.8 3,061,592 100.0 1970 2,853,143 82.7 539,401 15.6 58,767 1.7 3,451,311 100.0

Source: BrazilianInstitute of Geographywnd Statistics- 1967 and 1968 Estimatedfor 1969 and 1970.

September 17, 1971. TABLE 11

BRAZIL

THIRD HIGHWAY CONSTRUCTION PROJECT

_ighway Deaign Standards for New Roads

Class of Highway

0 I II IIT Design Speed, flat 120 100 80 60 km/h rolling 100 80 60 40 mountainous 80 60 40 30

Minimum Horizontal flat 570 380 230 130 Radius, m rolling 380 230 130 50 mountainous 230 130 50 30 Maximum Grade, % flat 3 3 3 4 rolling 4 4.5 5 6 mountainous 5 6 7 8 Sight Distance for flat 210 150 110 75 Stopping, m rolling 150 110 75 50 mountainous 110 75 50 - Sight Distance for flat 730 650 500 350 Passing, m rolling 650 500 350 175 mountainous 500 350 175 - Pavement Width, m flat 7.50 7.20 7.00 7.00 rolling 7.50 7.20 to to mountainous 7.50 7.20 6.50 6.00 Shoulder Width, m flat 3.50 3.00 2.50 2.00 rolling 3.00 to to to mountainous 2.50 2.50 2.00 1.20 very mountainous 1.00 1.00 1.00 0.80

Right-of-Way, m flat - 60 30 30 rolling - 70 40 40 mountainous - 80 50 50

Source: DNER - July 1971

September17, 1971 TABLE 12

BRAZIL

THIRD HIGHWAY CONSTRUCTION PROJECT

HigfhwayDeei.zn Standards for Iprovement of 2xisting Rbads

Class of Highway

0 I II III

Design Speed, flat 100 100 80 60 km/h rolling 80 80 60 40 mountainous 60 so 40 30

Minimum Horizontal flat 430 340 200 110 Radius, m rolling 280 200 110 50 mountainous 160 110 50 30

Maximum Grade, % flat 3 3 3 4 rolling 4 4.5 5 6 mountainous 5 6.0 7 8

Sight Distance for flat 150 150 100 75 Stopping, m rolling 100 100 75 50 mountainous 75 75 50 - Sight Distance for flat 650 650 500 350 Passing, m rolling 500 500 350 175 mountainous 350 350 175 -

Pavement Width, m flat 7.50 7.00 7.00 7.00 rolling 7.50 7.00 to to mountainous 7.50 7.00 6.00 6.00

Shoulder Width, m flat 3.00 2.50 2.00 1.50 rolling 2.50 2.00 1.50 1.20 mountainous 2.00 1.50 1.20 1.00 very mountainous 1.50 1.00 1.00 0.80

Right-of-Way, m flat - 60 30 30 rolling - 70 40 40 mountainous - 80 50 50

Source: DNER - July 1971

September 17, 1971 TABLE 13

BRAZIL

THIRD HIGHWAYCONSTRUCTION PROJECT

Financing Plan for Federal and State Highways, 1972-74 (in Cr$ millions)

1972 1973 1974 1972-1974

Revenues

Road Fund (IUCL) 3,176 3,430 3,704 10,310 Road Tax 897 1,023 1,166 3,086 Others 2,262 2,384 2,529 7,175 Total 6,335 6,837 7,399 20,571

Expenditures

Construction 4,333 4,639 5,224 14,196 MaintenanceEquipment 87 93 98 278 Maintenanceand Administration 4,318 4,549 L,677 13,544

Total 8,738 9,281 9,999 28,018

Surplus (Deficit) (2,403) (2,444) (2,600) (7,447)

US$ Equivalent (millions) h62 470 500 1,h32

Average Annual Deficit 1972-74 US$477 million equivalent.

1/ Includes State contributions.

Source: DNER - 1971. January 10, 1972 R2AZIL

THIRD RIGEJAY CONSTOUCTIONPROJECT

List of Roads for Constrootioo ad/or P-ving

Soad Noob-r Iongth TyPo of Work - K. Type of Terrain - S Typo of Total Cost 2/ stato Reeon.P. Lgt Rrfaciog - Ar0l0ay sECTIONE C T I o N andSOd __- folorol Itato Conotr. 11~~~~~~~~~~~dinlpror. and flat Ralliog Rooot. Clans ~~~~~~~~~~~~~~~~~~Cr $f OSUS$ Federal. im f-toPving Pavmg Flat Rdlig Mout. RaRoad I/ Million Million pa'i. g' P-i~~~~~~~~~~~~~~~~~~~~~g' E~~~~~qolval.

PI/PE BR-316/232 DNER Pi-oo-Moraia 148.6 2.8 145.8 I GOO DST-C 43.8 8.8

PI/PE 8R-316/232 INER Horais-Salguciro 151.9 - 151.9 - 100 - DST-I 54.6 10.9

PB/PE/AL BR-104 113ER CInpoina GrSOda - Junction BR-316 282.0 129.8 152.2 5 50 45 AC/D3T-I/II 170.3 34.1

MG BR-354 10ER Etla.go--Perdoeo 211.4 38.3 173.1 - - 100 DAT-r 100.5 20.1

GO BR-060 D1IER G.apo-Rio Verdao 143.7 6.1 137.6 65 19 16 DST-I 38.7 7.7

GO BR-060 DNER Rio Verdao-Jatai 137.9 15.9 122.0 35 65 _ D3T-1 32.8 6.6

O BR-153 D11E0 CRrno-Porsogato 236.2 - 236.2 - 100 - AC-C 87.7 17.5

GO BR-050 1i3ER Cri.tallna-Llmit GO/`MG 218.2 28.2 190.0 20 70 10 AC-1 62.9 12.6

MT BR-163 T12ER C-mpo Grod.-Band- d-t.irnt 65.5 - 65.5 32 39 29 AC-I 19.2 3.8

RS/SC BR-386/158 DBrER Sarandl-Irai-Cunhapora (Joooti.o3R-282) 186.2 186.Z - - 21 79 AC-I 133.5 26.7

RD B0-158 EVER Julio de Ca-tilhlo-Cr- Alt. 67.2 - 67.2 -100 - AC-I 27.3 5.5

TOTAL GROUP A 1,848.8 407.3 1,441.5 771.3 154.3

(6 Inso)) BA BR-324 D}3ER Northorn A ... n to Saljnadr 5.6 4.5 1.1 - 100 - AC-S ) 39.1 7.8 6.0 6.0 - (2 Io..) AC-0

MG MG-174/168/28 DER/MG Sao Ssbantiao do Pnrani.-Pooo. de Caldas 183.9 171.9 12.0 - - 100 D3T-I 89.6 17.9

MG BR-267 MG-157 DER/MG P.oos de Cnlda.-Parag...o 108.5 108.5 - - - 100 DST-I 70-4 14.1

F'S 11.36/37 DERA/S Nv -vnen -iT S.oo Dlooigon 61.6 - 61.6 - 70 30 D1T-II 18.1 3.6

PR PR-12 DER/PR Cornelio Prooopio-Con.e.niah 45.3 - 45.3 18 82 - AC-I 22.8 4.6

PR/8C/RS 8R-153 03ER Unian de Vitoria-Erechim 246.8 206.8 40.0 - - 100 AC-I 224.6 44.9

RS RS-19 DABER/S Taq-rn-5pi-prng 23.6 2.2 21.4 _00 - AC-I 10.4 2.1

TOTAL G_GEOUP B 681.3 499.9 181.4 475.0 95.0

G R A N D T o T AL 2,530.1 907.2 1,622.9 1,246.3 249.3

O =.== ... .= ...... == ...... __

1/ DST - Donble S-rfove Tr0atment AC - Asphalt Cooorote o _Cl- o - Clano I II - 11000 CC

2/ Estimates on of FPbroary 1971 end ronvertod into US S at thi the- valid -hrlgaorrate Of US$ 1.00 Cr8$ 5.0)

Decembor 27, 1971 BRAZIL

THIRD HIGH'WAYCONSTRUCTION PROJECT

List of Roads for Detailed Engineering

Road Number Type of Work Estimated Construction Estimated Cost of 3/ Cost 2/ Detailed Engineering Preparatory STATE SECTION Length kms Studies Federal State Existing Proposed Cr$ US$ CrS U0$ Conditions Standards Million Million Million Million Consultarts Equivalent Equivalent

PB/FE BR-412/110 Farinha-Boa Vista 19 IE-IV DST-I Junction BR-232-Monteiro 58 IE-IV DST-II 21.43 4.73 1.35 0.27 ASTEF BA BR-030 BA-630 Caetite-Brumado-Vitoria da Conquista 232 IE-II DST-I 71.12 15.70 4.10 0.82 TRANSCON/TENPO BA BR-101 Feira de Santana-Esplanada 137 NE DST-I 49.38 10.90 2.40 0.48 H.SANTAHA/ORPL8FN

MGIRJ/GB BR-135 Rio de Janeiro-Juiz de Fora 185 AC-I AC-I 284.40 62.78 5.00 1.00 EULER

RJIGB BR-135 Access to Rio de Janeiro up to 30 AC-C AC-C 183.85 45.00 6 12.50 2.50 EULER/DLRSCH (4-lane) ( -lane) MG MG-10 Corinto-Pirapora 137 IE AC/DST-I 48.47 10.70 2.40 0.48 ETUC MG MG-23 Divinopolis-Junction SR-040 144 E DST-I 52.58 9.40 2.50 0.50 DER/MG PR PR-13 Maringa-Colorado-Santo Inacio and Nova Esperanza- Paranacity- 176 NE/IE DST-I 104.19 23.00 3.10 0.62 ETEL urnumbered Colorado road

RS RS-12 Santa Rosa-Palmeira das Missoes 274 NE/IE AC-I 128.65 28.40 5.80 0.96 ENECON/ETEL v85-50 Ijui-Tres Passos

RS BR-158 Cruz Alta-Junction BR-285 37 IF AC-I 18.12 4.00 0.70 0.14 PLANISUL/PHOJESUL

GO BR-364 Jatai - Canal Sao Simto 197 E AC/DST-1 43.22 9.54 3.50 0.70 ENECON/ESPA

TOTAL 1,626 995.41 224.15 42.35 8.47

1/ IE - Improved Earth 2/ Estimates as of July 1970, converted into US dollars at the then valid G - Gravel - exchange rate of US$l.O= Cr$ 4.53. NE - Non-existing DST - Double Surface Treatment 3/ Estimates as of February 1971, converted into US dollars at the then valid AC - Asphalt Concrete - exchange rate of US01.00 - Cr5 5.00. 0 - Class 0 I - Class I II - Class II III - Class III IV - No Class

n-eember 27, 1271 BRAZC T

THIRD HIGHWAY COCSTRTICEIEN PROJECT

listo sf Roads for FeasibiIitv Rooidios

Estimated Co-struoti-o Estimated Cost of Road NRmber Costs Fe-sibility Studies

STATE SECTTIOD km istin gPoprd_/ FPdoral State Conditions - Standards Cr5 RS$ Cr$ LIS$ Million MEilliE Million Milliom EqA uTaer!. NRieuivlorp

PP BR-316/110 Ralgoeiro-PerrolamdEa-Paolo Alfo-so 186 C/NC DST-I 83.5 16.7 Parnamirim-Cobrohb-Belem do S.Fruamisoo 115 NE DST-I 52.0 10.4 2.55 ) 0.51

AL BR-316 Pulmeira dos Imdios-Junctio- BR-234 108 E DST-I 43.0 8.6 0.90 0.18

ES/MG MG-47/S.3 GCovernador Valsdares-M-ut-m-Lm.iEt MC/ES Limit MC/ES-Barra SEFronci-o 132 E/C R)SE-I 59.5 11.9 110 0.22

Mc LG-8 Patrooinio-iSeor do Salitir Serra do Salitr-Junction BR-3I4 117 C/C DST-TI 57.0 11.4 3/ 3/

Mc MG-58 Ita- Limit MG/SP 59 E DST-11 23.5 4.7 .50 O.10

SP BR-381 SP-8 Sue Paulo-Limit SP/MR 76 2 4on-PaveA lacs-AC-O 73.0 14.6 0R95 0.19

SP SP-89 Salesorolis-P-rto SBo Sebastiao 6E NS DST-II 30.0 6.0 0.50 0.10

MT BR-163 Doirados-Pomtal do Tigr- 183 E/C DST-I 73.0 14.6 1.55 0.31 PR ( BR-487 (PR-4 Posts Grosso-Campo Moorao-Pontal do Tigre ( 502 P/C DST-I 201.0 40.2 ) 6.75 ) 1.35 (and BR-373 (PR-4 and P.Grossa-Relogio-Campo Mo-re-P.do Tigre ( 376 E/G DST-I 177.5 35.5

PR BR-467/163 ( Toledo-MNr Candido-Porto Me-des-C-aira ( 127 E AC-I 57.0 11.4 1I.40 ) 0.28 (and Toledo-Mar Comdido-Guaira ( 90 E AC-I 40.0 8.0

PR BR-277/376 Compo l.argE-Ponta Crossa a Pa.od 4 1a-sr-AC-0 77.0 15.4 1.00 0.20

PR/SC BR-158 Coromel Vivida-Campo Err 91 NE AC-I 45.5 9.1 ) 1.50 ) 0.30 Campo tre-.u-otien Rr-282 84 E/G AC-I 42.0 8.4

RS RS-IS Taquara-EolanLe- oopcioo BR-101 1R3 F/G DST-I 53.5 10.7 0.85 0.17

RS RS-3 Santo Coon-Coe- ChRto 94 C AC-I 57.0 11.4 °.80 .b16

TOTAL 2,5o4 1,24S.0 2h9.B 20.35 h.o7

1/ C - PErth 2/ Tta-tS as of February 1971, -onoerted into US dnlors at thR thRe C - Graoel -olid oo-lenge rate of USC1.00 Cr$ 5.00 RET -Double S-f-ar T-osmrt AC - Asphalt Conro1t, e /.roility.. StDdy to br de RDbRy-Min Gerais C - Class C - Class I IT - Cles- 1I H NE - .os-ointio,g

8ecomhbr 21, 1971 TABLE17

BRAZIL

THIRDHIGHWAY CONSTRUCTION PROJECT

Schedule of otmatte,d Disbursements

IBRD Fiscal Tear Cumulative Disbursement and at End Of Quarter End of Quarter (US$ ' 000) 1971/72

June 30, 1972 500

1972/73

September 30, 1972 3,300 December 31, 1972 8,,000 March 31, 1973 li,QOO June 30, 1973 23,500

1973/74

September30, 1973 33,000 December 31, 1973 42,000 March 31, 1974 53,500 June 30, 1974 63,000

1974/75

September 30, 1974 72,000 December 31, 1974 78,500 March 31, 1975 82,000 June 30, 1975 85,500

1975/76

September30, 1975 87,500 December 31, 1975 88,000 March 31, 1976 88,500 June 30, 1976 89,000

February 10, 1972 TABLE18

BRAZL

THIRD HIGHWAYCONSTRUCTION PROJECT Average Daily Traffic (ADT)? on Selected National Highways- 1970

A D T Highway Number oT % BR State Vehicles Trucks

C50 MinasGerais 1,926 37.8 060 Goias 2,788 33.1 101 Paraiba 2,340 41.8 101 EspiritoSanto l,244 44.0 101 SantaCatarina 3,207 27.5 116 Ceara 1.964 59.0 116 Pernambuco 6,533 28.0 116 Minas Gerais 3,168 67.5 116 Rio de Janeiro 9,182 55.9 116 Sao Paulo 17,000 40.0 16 Santa Catarina 3,068 48.0 116 Rio Grandedo Sul 13,952 28.6 135 MinasGerais 7,012 49.1 135 Rio de Janeiro 19,854 28.4 153 Goias 1,972 48.2 158 Rio Grandedo Sul 707 40.3 222 Ceara 1,388 48.3 230 Paraiba 1,306 51.4 232 Pernambuco 1,238 48.5 262 MinasGerais 2,515 52.9 354 MinasGerais 1,388 23.5 365 MinasGerais 1,936 58.0 381 MinasGerais 6,876 36.4 462 Rio de Janeiro 25,958 25.7 470 Santa Catarina 645 53.4 471 Rio Grandedo Sul 1,497 44.1

1/ ADT at selectedcounting stations

Source: DNER - July 1971 September17, 1971 BRAZII,

THIRD HIGHWAYCONSTRUCTION PROJECT

Average Daily Traffic on Project Roads 1/

- - - - ACTUALTRAFFIC - 1970 ------E S T I M A T E D T R A F F I C- 1974 ------

Total Grand Normal Traffic Generated and Diverted Traffic Road Numober Road Section Vehicles Cars Buses Trucks Total Total Cars Buses Trucks Total Cars Buses Trucks

GROUP A

BR-316/232 Picos - Morais - Salgueiro 345 105 10 230 615 485 165 10 310 130 70 10 50

BR-104 Campina Grande - Junction BR-316 375 230 20 125 850 550 340 30 180 300 235 30 35

BR-354 Estalagem - Perdoes 350 185 15 150 605 500 280 15 205 105 90 5 10

BR-060 Guapo - Rio Verdao - Jatai 955 75 320 560 865 75° 270 120 360 115 75 20 20

BR-153 Cores - Porangatu 510 185 25 300 950 750 260 35 455 200 50 10 1)0

BR-050 Cristalina - Limit GOING 115 50 5 60 875 175 75 10 90 700 230 50 420

BR-163 Campo Grande - Bandeirantes 370 165 15 190 890 7C0 360 40 300 190 155 25 10

BR-386/158 Sarandi-Irai-Cunhapora (Junction BR-282) 510 180 30 300 815 665 245 35 385 150 35 5 110

BlR-158 Julio de Castilhos - Cruz Alta 340 160 30 150 455 455 225 40 19C - - - -

GROUP B

DR-324 Northern Access to Salvador 16,000 10,720 1,600 3,680 25,920 25,920 17,850 2,400 5,670 - - - -

275 200 10 65 600 360 270 15 75 250 225 15 - MG-17 4 /168/28 Sao Sebastiao do Paraiso - Pocos de Caldas

MG-157 Pocos de Caldas - Paraguacu 260 175 10 75 800 3A5 250 15 90 455 340 20 95

ES-36/37 Nova Venecia - Sao Domiingos 260 100 10 150 460 400 170 15 215 60 35 5 20

PR-12 Cornelio Procopio - Congoinhas 655 325 20 310 1,070 815 415 20 380 255 135 10 110

BR-153 Uniao da Vitoria - Erechimo 675 265 25 385 1,135 885 360 30 495 250 90 10 150

RS-19 Taquara - Sapiranga 805 575 35 195 1,430 1,430 1,100 55 275 -

1/ Traffic voluesi shown in this table are averages over the whole road sections.

Source: DNER - 1971

February 17, 1972 B R A Z I L

THIRD HIGHWAYCONSTFIUC TION PROJECT

Vehicle O0erating Eoonomic Costsjl' (in Cr$/km of June 1970)

------Paved ------Gravel ------Earth ------

Type of Vehicle Flat Rolling Mountainous Flat Rolling Mountainous Flat Rolling Mountainous

0 tans .579 .619 .665 .730 .769 .826 .856 .924 1.109 Truck 7 tons .755 .860 .947 1.014 1.110 1.281 1.280 1.377 1.572 Semi-trailer 15 tons .984 1.217 1.350 1.361 1.557 1.737 1.710 2.217 2.406 20 tons 1.136 1.426 1.600 1.581 1.852 2.180 2.034 2.360 2.640

0 tons .449 .470 .500 .568 .546 .555 .617 .690 .869 Heavy Truck 5 tons .529 .575 .637 .672 .682 .742 .821 .956 1.009 10 tans .609 .701 .772 .818 .891 1.020 1.098 1.191 1.624 15 tons .704 .824 .950 1.000 1.100 1.294 1.276 1.555 1.663

0 tons .326 .339 .353 .410 .420 .439 .450 .455 .561 Medium Truck 5 tons .398 .442 .510 .520 .556 .680 .622 .730 .795 7 tons .452 .501 .609 .623 .671 .757 .817 .865 1.097 10 tons .551 .646 .721 .741 .821 .881 .961 1.271 1.360

PassengerCar .167 .177 .188 .191 .198 .217 .281 .308 .381 Bus .755 .790 .829 .958 .992 1.038 1.123 1.184 1.258

1/ Free flow condition.

Source: TRANSPLAI- 1971.

September17, 1971 TABLE 21

BRAZIL

TIIIRD HIGHWAY CONSTRUCTION PROJECT

Internal Economic Return for Roads Proposed for Construction and/or Paving

Increase Decrease Increase Beomfits Decrease Benefits Benefits from Becafits from from Vehicles from Vehicles Road Number Read Section Best Estimate Maintenance 20% Maintenance 20% Operating Costs 20% Operetic4 Casts 20%

GROUP A

BR-316/232 Picos - Morais - Salgueiro 20 21 19 22 18

BR-1C4 Ca-pina Grande - Junction BR-313 25 26 24 2?i 23

3R- '54 Estalagem - Perd-o 20 21 19 22 lB

BR-lOG Gasps - Rit berdao - Jatai 32 33 31 34 32

dR-152v Ceres - oraongatu 4C 41 39 12 m

BR-'?3 CrIstalina - Limit GO/MG 1P 17 15 lI 14

BR-I'-3 Campo Grande - Bandeirantes 34 35 33 3Y 32

BR-_68/153 S-rarii-Irai-Cunhapora (Junction BR-262) 23 24 22 25 21

BR-158 Jalio do Castilhos - True Alte 13 i 12 15 11

GROUP B

BR-JO. Nsrthern Access to Salvador 28 29 27 30 26

MG-'h4/160/2H S.c Sebastiec do Paraisa-Pecos de Caldac 15 16 14 17 13

MGl_i5/ Fcos do Caldac - Paraguacu 1b 15 13 16 12

ES-3/3/, Nova Venecia - Sao Doringos 34 35 33 36 32

FR-12 Cornelio Procopio - Congoinhas 17 18 i6 19 15

BR-153 Uniao da Vitcria - Erechin 13 14 12 15 11

RSd-i" Taquara - Sapiranga 23 24 22 25 21

February 17, 1972

CHART I BRAZIL:THIRD HIGHWAY CONSTRUCTION PROJECT

ORGANIZATIONOF GEIPOT

PERMANENT PLANNiNG COMMITTEE

Pres,dent Secret-ry General of the Ministry of Tr-nsport Me-bers Superintendent of GEI POT (Cl,ir"onl - N.tiortl High-oy Deparroent - Nti-nol Rbil-ood Department - National Department of Ports and Worerwoys - Federal Roilroad Company - Merchant Mcrine A.thkrity

ADVISOR SPRINTENDENT

I ~~~~I

TECHNICAL DEPARTMENT OF SUPPORTING ADMI NISTRATION SERVICES DEPARTMENT

PINANCE DGMNAINECONOMIChIWA

DOCUMENTATION ~~~~~~~STUDIESSTDE

RESEAR RAILWAY PERSONNEL NVGTO PE~~~~ICN`NEI~~~~~~~~ ASSISTANTS STUDIES

GENERAL SC A SERVICES PUBLICATIONS PROCESSING AND SUPPLIE5 STUDIE

DRAFTING

WORLD bANK - 6006 ,RI JJIY 1971

CHART2 BRAZIL THIRDHIGHWAY CONSTRUCTIONPROJECT

ORGANIZATIONOF THE NATIONALHIGHWAY DEPARTMENT(DNER)

ADMINISTRATIVE COUNCIL ... GENERAL DIRECTOR

SECURITYN COMMIT~TEE 1

-`PDIRECTOOTHEDIRCTOT-Y

DEPUTY DIECO

| SECURlfYCOMMITTEE l ~ ~ ~ ~ ~ OMMTTE

LEG|LADMINISTRATIONPESNELPLANNING WORKS ONER ;~~~~~~~~~~~El:.II.l-N

-| MATERIALl -{ ~~~~~~~~~PLAGNNNGAD l - CONSTRUCTION j MAINTENANCE

-| COORDINATIONl -|~~~~~~BDGE AONDRL BRIDGES AND j |HIGHW/AY EQUIPMENTj

-| FINANCEl L ~~~~~~~~~~ENGINEERINGl |RECONSTRUCTION TRAFFIC AND DESIGN AND BETTERMENT

DATAPROCESSING TRANSPORT

-|RESEARCH

20 DISTRICT OFFICES (One in encl Stote, July 1971 1 Acre and Gannoboro Joly 1971 ~~~~~excepl

WOCRLDRANK - 6007 'R,

BRAZIL THIRD HIGHWAY CONSTRUCTIONPROJECT

ORGANIZATIONOF THE STATEHIGHWAY DEPARTMENTOF MINAS GERAIS

(DER-MG)

S TA SE GOV,RNORS

,~lOhWAY COUNCIL

CENERA )RECTOT

SECRETARI1AT LEGAIL

D)EPU'Y DIRECTOR…L'---' ' OORDINATICN

XCONI ROL PROSIANG INRORMATON | AUDTTOR AEDOIN

DESON -AINTENANCE CONSTRUCTION

5U_Ou 'R~~~~~~~TAES.CSERYICE tCONTROL = ACCGUNTNO CONRO

ECLO( C5 V'RAPFFCFr ATTISTANCTTO PRJECT OIESCO PEREONN T T LEERLC kC MUNICIPALN Sl . TRAINI

DES ON SJPPEL IL OFICES_ FINANCE_

SEECl. ECESIEMEN S

.ESION.LOFFIE LITAS 3 REElhEL _E

NOTE ON MAPS

The naps indicate all roads in the program, and do not separate out those to be fi;nced under the proposed project. To identify the latter, refer to Table 14 - Group A.

V E N E Z U E L A

C O L OMAA B'I A / (. o r ~~~~~~~~~~~~~~~~~~r1 / / *OAV1';, R

.-.5/\i r>'Sp/\hSA t ~ ---- */ --. 'T~~ . ~_.,,sp...... -.. -w

r . GwA iK']I S r AR. K /// 1K A

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2-vN ' § * ' 5 ' j V .0

(~~~~ < -- fi1 rf 6 0E0

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V; r>Q'i 0(g tt-/11 L- "K 7Xf t1ri/ttS X D/K$ 9M\t V 7t W x,^ _X4S,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~......

\ . ~ ~~~. ~~~~Z ~~~~~~~~~~~...- ; -4 ! ! ; Ls t 0 O . < z O / G~~~~~~~~~TR O S S 0 ., /A. ; ' ' w vo

1970~ ~~

THIRD HIGHWAYCONSTRUCTION PROJECT

TID HIGHWAYsCONSTRUCE EThION PROJECT. .g< _ NA ______erde9ne n . odgd...... osrceI ..nlnmen .. NSTHI2Z1aT11 1sO P.-Isde rs ;a Ko

...... ooshi@A...... Ai;g SX Tc

)R Gl U t A.n RAJ A

eN SRWt L, t& / ig,{V .- g~~~~~~~~~~~~~~~~~~~~~~~~0

MAP 2

AZ 0ceritoro -1~ ~~ ~ ~ ~ ~ ~ ~ 0~ ~ ~ ~~.s° *gXF T

A A~~~~~~~~~~~~~~~~~~~~~~

cpod.s,rr,o 4..d.

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O - D-S I M 3++A~-'R + r A <1SBonobol N 'nt HDAPeirr sioS Uh eGt

0~~~~~~~~~~~~~~~~~~~~ >e i t Gertolimo > 12 \>^Cotodo c > !!tMlogresr~

c. > ~~~~~~~~~~~ ~k ~ ~ ~ ~ ~ ~ A-rr~ DtrTo9~ ~ ~ ~~~6 ^- r , ^

-CU7Nt/\.ATATES MARANHAO,5POrF o Jtorrir^; N t+ PIAU AR A I A

VE'UEL -, ARUGU^Yheadqucrters s DE+ Rctieldt m3intenonce B AUH IT A 6

t . HIUHWAYBRZLU PROJECTB + + t < CMBIA THuRD HIGHWAYN COEINSTRUETHI PROJECT + P R A M I~~~~~~~~rK Rcnds t Boiceo,> +rs* ,v J fi_J .. A-- d,deBorncln £CUOOONY\MoroedJo- 6r ~ STATES OF MARANHAO, PIAUI AND CEARA + PNB f IP4RAGAYb ++++ Plnned rorxds t 5 orri 4'n i, CHILE/ 0 At

R..& ~~~~~~~d.,-,t-t-~ 45 -

.,~~~~~~~ PavE feldrods tofialdeninerin stnars eHtD PERUl UAY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*$/ 0 £o A- 1I~~OCTO3ER~Swr e rs1L 1 HIGHWAYSINCLUDED IN PREVIOUS PROJECTSA( 0 ENTINAProntetocadnpaig1o e e 15 00AC eIUHWAYS INCL.UDEDIN TIHE THIRD PROJECT ' /A' Fee -on-oti-ened/or pian-g ' /nLeee/ r Store bo-dary

0-T08R 1971 lOne 3rc4

BRAZIL A3 A,- THIRDHIGHWAY CONSTRUCTION PROJECT A t 0 STATESOF RIOGRANDE DO NORTE, PARAISA, / a A 2 c PERNAMBUCOAND ALAGOAS Mascara Mreuw ¾ _ Pated rendsB /

.. . .Pane. s grade caOitruated Pa tirn engineerig stedndosd t 4 Unpavedreeds X' R r \ Jade Cdmrgene -___- Reeds under senerruatran / X _ -43 Ceend-cinim ++++-a-I Planned reads 4. 3,)I A DNER field mointenence heedquorters A at U DER field moienteese. heedqgerlere... rbe au IPfl HIGHWAYSINCLUDED IN THE THIRD PROJECT \ Se NATAL For aenstreatise ed/oa peeg Cr Far detniled engineering Pe. dee *,r a, A *.t ...... Far fe.sibility chdY a, F .errero T T 1 C 6 _ ) a.. A aN T Stete bendeny tt .g

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Pr ~ ~ I" I.! . .,ArI 0 A~ ~~ ~ ~ ~ ~ ~ ~ ~ r36 t.Sg pWninrgdnod BBOLIVI,A~ ~ ;7-0 ~~~~~ Unpov d et BC Itbrtomrih sTl 1}flROUY * DE fild*eduotr oit nnA F d~ hPRVOG APRJcsU ALDETPers ;AR2,ENTINA/ Sern'BRO r~~~~~~~~~~9~ COLGUIANA BRAZIL ~~Oo Is s CTd971 4

A A-A 9cuk ~~~~~~THIRDHIGHWAYCONSTRUCTION PROJECT 1)BRAZL s. STATESOF BAHIAAND SERGIPE S9 S Pood rod, o grode oon-nnoed.Rood.nt. ro er-Irrngnoddo4Po.S UnIpavd rods

Pl.d1--4"+ rood, CHILE/ r++ rd S,NERI fIed n-irteono reod,-onroAI-÷

OAYsi DEN Braid -aiten-- Ne,dqu,anten,,1- HIGHWAYSINCLUDES IN PREVIOUSPROJECTST. and/or pa/,,g ENIANA _ p.p 0 _oru-O HIGHWAYSINCLUDED IN THE THIRDPROJECT

EonOd.le d _ngn-aing'rsron'' SUAISO riTdo nr -~~ .- SMta b-udary OBRO3580 OCTOOO 194-

BRAZIL yA THIRDHIGHWAY CONSTRUCTION PROJECT

STATES OF ESPIRITO SANTO AND RIO DE JANEIRO cci Pavedroads/r I oada grade constructed-t foal engineering etanrdaa .P CJd

Urpasedroads 00' TA* - Roads coder coostreonior A) Ecooir0' *c| -s--a+-a--a- Pla.d roads A DNER ild _ea-n-erarc headgudqte-te- As o d, deau

DER fheld rairteos.ee headquartere Vo . ada Fr..ci-co * S HIGHWAYS INCLUDED IN PREVIOUS PROJECTS - SVesec. at _For coetrjctio- and/or pocing |i HIGHWAYS INCLUDED IN THE THIRD PROJECT |

Fenorat-uti-o and/ct Ptei9 A 0 00 _ .For detailed srgireerrg T/ D y f ...... F., fesiAit study /

State bounda:y LrtArms

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FEBrUR 12

BRAZIL <, B k A THIRDHIGHWAY CONSTRUCTION PROJECT i ' '/f TA & STATEOF MINASGERAIS IiA

Po,edrodo4 ,, FrT t ~ A' RAo.s grod. oAsfruofedAof.ool eg.n.droosfordord f c ' Unp.V d 1111 / / 7+ * k - /

-- ++-+- Plned rood. i I t '' A ONER fIeld m.-t ... h..dq.rt.. r o\ * DER fo.ld moinenn... oodouooteos F ANHA

HIGHWAYSINCLUDED IN PREVIOUS PROJECTS " - dr 4 A ' NA FO6or$ Coansroonond/orpovlg -A< \_ , N | t 0aoDer(0As,O H-00000A0rer

HGHWAYS INCLUDED IN THE THIRD PROJECT A \ 4 A 0 0 MA Fr constquocSonond/or poong In,.\,§ I 4- s ', ___For OofrAlodoog,ooor,rg s"' q~ N w-\/IomsXX ...... For I.osibilfy SIAdy 5 6MbAAAAo 51t to bo...dorf

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JAtlUARY1972 I RRD-aSdd0

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BRAZIL B o-t n,jal

HIGHWAY MAINTENANCE IN THE 'a -. STATEOF MINAS GERAIS •, / Poana roods 'a 4-f aaV t at/ .s / grodncons,ut,a Infdffnaltag,nten.n ttandaad..loans _ > a .S A , qt aP/ a /te a> P g-d, x~~~~~~~~~~ arlaok -_ _ Laapaaednoads ~~~~~~~.d a ft iIif/If es a ___Raoqdsunder nanstncat,an v d j f ,aa rt P O K a-.e- Planned .aade j x v A DNERA,edaantenanne- headajarters t . U DER t.elainted onae aadqLa-ters Fa..aaa -- Itbe.anar t 4 Paint anannenanne region \V at5vat 4 'aa a'J/ _ h-Jonnl hAghaaos -n-oared ba DNER a - Pa-aherna P% Sa= 'a

Ntaooq hIghaeynana-tand by DER 'e r '0'; n a a a A State ba-ndany la' A ' - a

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BRAZIL THIRDHIGHWAY CONSTRUCTION PROJECT

STATES OF MATO CRDSSO AND GOIAS

goode.RwdsOR.,,C.O,RO fd. oImolgr,og.Iondo,os Onpoocd roods

| PIRROSOroods° I A DOER IeId mainta.nCe heod,,a,t-ae U DER V1, mcintepno. headauaat..e RURoOo HIGHWAYSINCLUDEC IN PREVIOUS PROJECTS

y FpTPRROhOHOC$I RR5/WRRoymg Rum s hn HIGHWAYSINCLUDED IN THE THIRD PROJECT 4 K ~~~~~FpRwRSOtRHRRIRRROCtn/d0m r Y2 MA R AN H A A M A Z O N A S \ ____ - .adePedO _CM A R A N Ht 1 IS T PTn OR S dy, std1W 0.g dd

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MAP 9

j6. \ fsGrJnd P bewbBRAZIL

\/~/BKF-u.el t THIRDHIGHWAY CONSTRUCTION PROJECT -2'aMATO GROSSO r. F'Fj dvS.i1 Fd rda STATEOF SAOPAU LO di ~~~~< Anj lIs< \-o M < ri > Itusessa 0 > -Pa~~~~~~~~~~~~~~~~~~PveddroaXds

N.,oWlisgWt ~ / HIGHWAYSX ~4Joaquim INCLUDED SFFrowa IN THE11r\$> THIRD PROJECT G-'ladi ".1 tala T-rbt ...... For feasibility stdy A.1- 9o-&-o; \ u,o rrulurv -- - -State boundaries

F '< uncueimbu_ < \<:Pmmissw 1\ S|MATA0 W S d~~~~~~~~Vi1-ot ~_ ~~~~~~~oMI|N AS G E RA I S

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rrC ~PARANA Ypu ^\Xnd 26LOs Atlantic Oceanx

nANUA'Y1972 G I'adR. 30

BRAZIL T/ u,- Pt .. S A 0 P A U L- 0 THIRDHIGHWAY CONSTRUCTION PROJECT STATE OF PARANA

pl. P-11 ~~~~~~~~~~~~Pavedroads .... .Rods gradeconstructed to finalengineer-g 0 / cvnvv NOe 7$L-d. standrd CAMBARA ~~~~~~~Unpavedroads ,45 PARANA'Al ~~~~~~~~~~~~~~~~~~~~~~~~~~~- -Roads sder conlstruct on v~~I ~~JAq, p,,v 4 MPAA nn~~l- vor-,,nho.. s---- Plannedroads 0 Tc DAd/AJAr A~~ A'4 ~ ~ ~ Anl i noi DNER field mraistenanceheadcvarters DE R livid maintnOnana headqarter 0 I~~~~~~ ~ ~~~~~~~~~~b-6onnO ~ ~~~~~~~~0 Pi.tn. ~ ~~~~~~~b,p' 'S ~~ ~ ~~ ~ ~~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~NRA'l,~d ,I HIGHWAYS INCLUDED IN PREVIOUS PROJECTS

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MAP 11

*,/ T Sampoio PtoC S A O P A U L O BRAZIL HIGHWAYMAINTENANCE IN THESTATE OFPARANA

Paved roads L ~~~~~~~~~~~~~~~~~~~~~~~~~~~* Roads grade constrcted to flIna engineerng standards P. .. I. ~~~~~Unpavedroads PARANAVAI~ ~ ~~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~ -- Roads under co-otrcI,an v 9 aaeir , -4---f-- Planned roads ,0-~ ~~ ~ ~ ~~~maraSo ncoA DNER field mwaitnonc heaodlqafer a Piarirja * DER field maintenance headqteafrs

'r 9edo -W + _LONDFINA \s \d penal National highway ma 1teeance by DNER

D.4A MAR15V Je, ARAPONGAS- NFatimao StateJ highway mainenance by DER \S c I bogy m - Natiana highway mntenanc by DER

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VEEZUELA ...... Roads grade oonatnruted to final engineerIngstandards...... s_v/- O |

COLOMBIAts4ln AM UnpasedroadsPdCd > _| r s

r- 47'/ '* ZI * DRER t sId rna'rrenanoe headgjaptprs B AZIL J U* DE R tiald erairterap,e headguartera t tg oc m n

. '2U HIGHWAYRINCLUDED IN PREVIOUS PROJECTS f ,BOLPIVA Po ogrons,ruat,arand/ar peoleg jX Meo //o } i 94_ \ ~~~~~~~~HIGHWAYSINCLUDEDIN THE THIRD PROJECT t \/ CHILE/ IMMAR G_Seats Fpornansepos lion and/sr pasing )2*>v '7 Cao/^-Corsn Pa...teasibillty ...- Fr stodp I A A A N U vXtURUGUAY T,- - Dtate beandary V G-d. " ,;AHINA~~~~~~~~~~ -- teneatianal basedarynn9y,/Ci 0q

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- -Roadsunder construction doeo=53 -t-4+++-e Plaonna roads 4.S7 A OSNERtield mainfernnonc Seadgoarfers \4{ Y ocTo3Er1971~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ * bE R field maintenance headquarters c,u o r S_ O_g_ S t / rrId PIlot noinfenonos regior Notional bigtowoyo m:intodned by DNER Ira /ct 0 Stooe liigtouryn nrointoinnd by DIER 4~ierc Nhotnol… bigrovyn muintoined by DIER -. rrv Stoto boundary RA G A, - nfernofinosl boundory ORORYfGOA

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VEZ~UELA BRAZIL TH t+t+ N. I £2 ROROCOE O CO MEUlAf - FR96UATHIRDHIGHWAY CONSTRUCTION PROJECT 1'oen/? CCLAO/M61 vi F.GIN STATEOF RIO GRANDEDO SUL ' / 7 X

SE2'>'5 2~ ~ ~~~~~~~Hodgpoded crorrore t frlorgl noolngorogsc4rdordo/ ( BRZIS ++++pooned oode 2X /

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BRAZIL V t

HIGHWAY MAINTENANCE IN THE 8, t,/> STATE OF RIO GRANDE DOo8onf' SULt U P P lol (pneoc 4ern1;s Po,ed ... dS ,^U^d Unpg..d :-ods -- ,>1.

OCTOSEY'9 ' 'ssD3 53RZ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TTTSI-t b... d.,y 5 f b

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