Syria Second Highway Project

RESTRICTED Report No. PTR-94a Public Disclosure Authorized Thisreport is for officialuse only by theBank Gzoup and specifically authorized organîzations or persons.It may not be published,quoted or cîted without BankGroup authorization.The BankGroup does not acoeptresponsbillty for the accuracyor completenessof the report.

INTERNATIONAL BANK FOR RECONSTRUCTIONAND DEVELOPMENT INTERNATIONAL DEVELOPMENTASSOCIATION Public Disclosure Authorized

APPRAISAL OF

A SECOND HIGHWAY PROJECT

SYRIA Public Disclosure Authorized

February 23, 1972 Public Disclosure Authorized

Transportation Projects Department Ourrency Eauivalents

Currency Unit = Syrian Pound (SL) US$1.00 = SL 3.82 SL 1 = US$0.26 SL 1 million = US$261,800 Fiscal Year

January 1 - Decomber 31

System of Weights and Neasures: Metric Metric British/US

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (ko2) = 0.386 square mile (sq mi) 1 hectare (ha) 5 2.47 acres (ac) l liter (1) = 0.22 British gallon (impgal) = 0.26US gallon (gal) 1 kilogram (kg) = 2.2 pounde (lb) 1 metric ton (m ton) = 2,204pounds (lb) Abbreviations and Acroriyms ADT - AverageDaily Traffic CITE - Compagnied'Ingenieurs et Techniciens d'Etudes (consultants, France) DHB - Directorate of Highwaysand Bridges IER - InternalEconomic Return ILO - International Labor Organization OPAS - Operational Assistance Program (UNDP-financed) SCET - Societe Centrale pour lEquipement du Territoire (consultants, France) UNDP - United Nations Development Programme

NOTE: This report takes into account the effects of the recent currency parity changes. APPRAISAL OF A SECOND HIGRWAY PROJECT

SYRIA

TABLE OF CONTENTS

Page No.

SIJMMARYAND CONCLUSIONS ...... i

T. INTRODUCTION ...... 1

Il. BACKGROUND...... 2

A. General ...... 2 B. The Transport Sector ...... 3 C. Transport Policy and Coordination ...... 5

III. TIE HIGHWAY SECTOR ...... 7

A. The Highway Network and Its Traffic ...... 7 B. Highway Administration ...... 8 C. Highway Financing and Planning ...... 8 D. Highway Engineering ...... 9 E. Highway Construction ...... 10 F. Highway Maintenance ...... 10

IV. THE PROJECT ...... il

A. General ...... il B. Highways to be Improved and Constructed 12 C. Consulting Services ...... 13 D. Cost Estimates, Financing and Disbursement .. 13 E. Execution ...... 15

V. ECONOMIC EVALUATION ...... 16

A. Ceneral ...... 16 B. Benefits from the Project ...... 16 C. The Project Roads ...... 17

VI. AGREEM.NTS REACHED AND RECOMMENDATION...... 19

This report was written by Messrs. R. Paraud (engineer) and N. Kanaan (economist) on the basis of an appraisal mission in May 1971. -2-

TABLES

1. Transport of Regional Transit Cargo on Syrian Highways - 1967 2. Freight Transport by Mode - 1965-69; Passenger Transport by Mode - 1965-69 3. Ports and Air Movements 1965-69 4. Vehicle Registration1965-69 5. Highway Network 1966-69 6. Gasoline Consumption 1960-69 7. Estimates of Revenues from Road Users 1966-69 8. Highway Expenditures1965-69 9. Design Standards for Project Highways 10. Breakdown of ConstructionCost Estimates 11. Unit Vehicle Operating Costs (per km) 12. SensitivityAnalysis of Internal Economie Returns 13. Traffic on Project Roads - 1970

ANNEXES

A. Problems Encounteredin the First Highway Project B. Schedule of Estimated Disbursements

CHART

OrganizationChart of the Ministry of Communicationsand of the Direc- torate of Highways and Bridges

MAP

Highway System APPRAISAL OF A SECOND HIGHWAYPROJECT

SYRIA

SUMMARYAND CONCLUSIONS

i. Syria's geographicallocation on the eastern shore of the Mediter- ranean sea and astride the main trade routes between Asia and Europe deter- mines its transportpattern. Syrian highways serve trafficbetween Jordan, Kuwait, Saudi Arabia, Iraq and other points to the east, as well as its own and Lebanese ports. The highway system has served both the country and the region reasonablywell, but traffic increasesand the developmentof new economic centers necessitatethe upgradingof most of the main highway network and the constructionof new roads.

ii. This will be the Second Highway Project in Syria. Under the First Highway Project (HighwayImprovement Project, Credit 46-SYR, 1963), IDA provided US$8.5 million equivalent for the improvementof the Damascus-Aleppo- Raqqa road, the purchase of maintenanceequipment, and consulting services to prepare a program to reorganize the Departmentof Highways and Bridges (DHB), as well as for a survey of the Syrian road network and the detailed engineeringof about 520 km of economicallyimportant roads. The proposed project is based on these studies.

iii. Inadequate engineeringpreparation led to delays and problems in the executionof the Firet Highway Project; much more extensiveand costly improvementswere needed than originallyenvisaged for the Damascus-Aleppo- Raqqa road, and design changes during constructioncaused additionaldelays. Works are now progressingwell and are scheduled for completionby late 1973. It was after experiencewith this and other similar projects that the Bank in 1964 adopted the policy of lending for highways only when detailed engineering is well advanced.

iv. The consultantssubmitted their recommendationsfor DHB's organization in 1967, but although importantsteps have been taken, implementation has been slow. The formal establishmentof a CentralMaintenance Department, which will be a conditionof credit effectiveness,la expected to take place by mid-March 1972. Procurementof maintenanceequipment under the First Highway Project was also slow, but invitationsto bid for its supply have now been issued.

v. In spite of the initialdifficulties and delays, the Firet Highway Project as a whole is now proceeding reasonablywell; DHB has been receptive to the Association'srecommendations, and a basis exists for further lending for highways.

vi. The proposed project comprises: (a) the constructionand/or improvementof three high priority roads (totallingabout 153 km) and (b) consulting services for supervisingconstruction, for studies and detailed engineeringof a main road and the bypasses for four major cities (totalling - il - about 540 km), as vell as for a study of maintenanceneeds. The project will cost US$28.7 million equivalent,and an IDA credit of US$13.8 million equivalent vill finance its foreign exchange component. vii. Contractsvill be awarded on the basis of internationalcompetitive bidding, and constructionsupervision and other expert services will be carried out by consultants. The Ministry of Communicationswill be responsible for project execution. viii. The internal economic returns (IER) from constructionof individual roads vary between 12% and 22Z: for the constructionwork as a whole, the IER is 18%. Benefits to the economy are derived from road user savings as a result of reductions in vehicle operating costs, and from the difference in maintenance costs between well constructedroads and the existing poor quality paved ones. ix. The project is suitable for an IDA credit of US$13.8 million equivalent. APPRAISALOF A SECONDUIGIWAY PROJECT

SYRIA

I. INTRODUCTION

1.01 The Governmentof Syria has requested the Associationto help finance a project consistingof (a) the constructionand/or improvementof three main roads totallingabout 153 km, (b) consultingservices for supervision of construction,for feasibilitystudies and, if justified,detailed engineeringfor city bypasses and one main road totalling about 540 km, and (c) consultingservices for a maintenanceneeds atudy. The total cost of the project is estimatedat about US$28.7 million. An IDA credit of US$13.8 million which would finance the foreign costs is proposed; local costs amount- ing to US$14.9 million equivalentwill be financedby the Government.

1.02 The First Highway Project (Credit46-SYR, 1963, US$8.5 million) provided for:

(i) improvement of the Damascus-Aleppo-Raqqa road, including detailed engineering(about 540 km);

(ii) reorganizationof the Departmentof Highways and Bridges (DHB), including provision of maintenance equipment; and

(iii) a road network survey leading to the final survey and design of about 520 km of priority roads.

1.03 The feasibilitystudies and detailed engineeringof the three roads now proposed for constructionand/or improvementwere financed under the Firet Highway Project and carried out by the French consultants,Societe Centrale pour l'Equipement du Territoire (SCET). SCET also carried out between 1965 and 1969 the survey of the road network and the subsequent detailed engineeringof selected roads. SAUTI (Italy)are supervisingthe civil en- gineeringworks. Between 1965 and 1968, the French consultantsCompagnie d'Ingenieurset Techniciensd'Etudes (CITE) prepared the detailed engineering for the Danancus-Aleppo-Raqqaroad beîng constructedunder the Firet Righ- way Project, and studied IHB's reorganîzation.

1.04 The Associationhad appraisedthe First Highway Project on the basin of quite inadequateengineering preparation. As a result, the Damascus- Aleppo-Raqqa road had to be redesignedand further economic studies undertaken. Constructionworks were thereforedelayed and did not start on the first section until 1968. Tensions in the Middle East aleo had their effect upon international bidding for the remainingsections. Although slow in starting,works are now well under way and will be completed late in 1973 (see Annex A). It WAs this and similar experiences elsewhere in the early 1960's that prompted the Bank in 1964 to adopt the policy of requiring detailed engineering to be well advanced before making loans for highway works. 1.05 In 1967, CITE made recommendationsfor reorganizingDHB in stages, proposing,among other things, the creation of additionalDepartments for Major Works, Design, Maintenance and Training. These recommendationsare being implementedgradually, and the proposed Departments,except Mainte- nance, have been created. DHB is now developingthe organizationalstructure of the Central Highway Maintenance Departmentfollowing a new policy that DHB itself will be responsibleonly for the trunk routes, while district works organizationsvill continue to maintain other roads (para. 3.21). In addition:

(i) a UNDP-financedvocational training program (for which ILO is the executing agency) is in operation (para. 3.08);

(ii) OPAS experts have been engaged (para. 3.09);

(iii) the soils and materials laboratoryhas been modernized and expanded (para. 3.09); and

(iv) constructionof a maintenance complex is underway (para. 3.21).

1.06 Invitationsto bid have been issued for the purchase of maintenance equipment for which an allocation of US$1.2 million is available under the First Highway Project. The creation of the Central Maintenance Depart- ment is expected to be formalizedby mid-March 1972.

1.07 Although the Governmentmust (with the consultants,contractors and even the Association)bear its share of the blame for the slowness of implementation of the First Project, most problems have nov been overcome. High- way administrationstill needs improvement,hut substantialinstitutional progress has been made, and there is now a suitable basis for financing further highway work in Syria.

1.08 The appraisal of the present project is based on economic and tech- nical studies prepared by consultants,and on the findings of the appraisal mission comprisingMessrs. R. Paraud (engineer)and N. J. Kanaan (economist) which visited Syria in May 1971.

II. BACKGROUND

A. General

2.01 Located on the eastern shore of the Mediterranean,Syria straddles the historic trade routes between Asia and Europe; these routes lead from Iran, Iraq and other points east, across Syria's deserts, fertile plains and coastal mountains down to the Mediterraneanseaports. Trans-shipment points developed in the narrow fertile plain between the mountains and the desert, and eventuallygrew into the urban centers of Damascus,Homs, Hama and Aleppo. Once these centers began to generate their own traffic movements, new routes developed connectingthem to each other and to major - 3 - cities in Asia Minor to the north and Arabia and Egypt to the south. These ancient trade routes continue to be the main arteries in Syria's present transportnetwork, and both the First and the proposed Second Highway Proj- ects aim at the reconstructionto modern standardsof this basic network.

2.02 Much of the trade movement between Lebanon, Jordan, Iraq, Kuwait and Saudi Arabia must pass through Syria. No detailed informationon this important movement is available, and the Governmentis conducting traffic counts of trucks by national origin to ascertain the shares of national and internationaltraffic. A survey of truck movements at the Syrian-Lebanese border in 1967 (Table 1) showed that about 75 heavy trucks (average load 12 to 14 tons) crossed the border each day, and that about 30 of these trucks of various nationalitieshad a Syrian destination,while 45 trucks were bound for other countries in the Middle East. Total transit movements now far exceed the above figures, and the new counts will shed more light on regional traffic patterns.

2.03 A 1970 census gave Syria about 6.3 million people and a rate of growth between 1960 and 1970 of 3.3% per annum. Most of the populationis concentratedin the narrow fertile plain between the mountains and the desert, in the coastal plain, and along the Euphrates Valley in the northern part of the country. Per capita GNP in 1970 was estimated at about US$180.

2.04 Agricultureis the most importantsector of the country's economy, employing about 60% of the labor force and accounting for about two-thirds of total commodity exports. In the 1960's, the average share of agriculture fluctuatedbetween 25% and 40% of national income depending on rainfall - 80% of the cultivated area is rain-fed. The principal crops include cereals, vegetables, fruits, nuts and cotton, with the latter the most important export product and source of foreign exchange. The Government gives high priority to expansion of agriculturaloutput, and plans large investments in irrigation to decrease the dependence on rainfall. This expansionwill have a strong impact on transportdemand in the country'smajor agricultural regions, particularlyin the east and northeast.

2.05 Industry and mining employ about 11% of the labor force and con- tribute 13%0of national income. Foodstuffs and textiles account for 40% and 20% respectivelyof total industrial output. Petroleum production is the most important extractive activity and a substantialearner of foreign exchange; exports of crude oil during 1969 totalled about two million tons. Oil output is rising and Syria is making large investmentsin this sector.

B. The Transport Sector

2.06 The two factors most influencingtransport in Syria are: (a) the physical setting of the country, and (b) the long and eventful political history which culminated in the partitioningof Greater Syria after World War I. The coastal plain and mountains to the west, the narrow fertile plain in the center, and the desert to the east, have determined the location of Syria's urban centers and the general orientationof its transportroutes. - 4 -

North-southmovement is limited to the central plains and is relativelyeasy, but east-westmovement is made difficult by the coastal mountains and the desert. The partitioningof Greater Syria after World War I, and the superimposingof internationalboundaries on a transportsystem that had developed along a regional basie, made it necessary for Syria to undertake major constructionprojects to realign its network to meet its own needs.

Highways

2.07 Details of the highway sector are given in Chapter III.

Railways

2.08 The partitioningof Greater Syria seriously disrupted the railway system; a section of the north-southline now passes through Lebanon, and most of the east-west line in the north is in Turkey. The present system is therefore composed of a number of disconnectedlines totalling 1,040 km, cf which 735 km are standard gauge and 305 km narrow gauge. All the rail- roads are under the control of the Ministry of Communications. The standard gauge system extending from Damascus northward is operated by the Syrian Railways, and the narrow gauge system south of Damascus is operated by the DirectorateGeneral of the Hijaz Railways. Between 1965 and 1969 railway freight traffic increased from 88 million to 123 million ton-km, and passenger traffic from 70 million to 96 million pass-km (Table 2). In relative terms, the railways'share of total land freight and passenger traffic i8 insignificant- about 4% and 2% respectively.

2.09 The Government is constructinga new line in the north to integrate the system. This 750 km line will connect Latakia, the main port, to Qamich- liye, the main urban center in the northeast,passing through Aleppo and cros- sing the best agriculturalland of northern Syria. About 250 km of the west- ern portion have been completedand are in service primarily for moving constructionsupplies to the Euphrates (Tabqa) Dam. Before construction of this line started, a study was carried out to determine the relative ad- vantages of transportingthe cotton and cereal crop (about three million tons) from the northeast to the port of export at Latakia by road or by rail. For bulk transportwith an average haul over 500 km, rail transport was shown to have the advantage over road transport,and the decision was therefore taken in favor of a railroad which is now being built with Soviet financialand technicalassistance.

Ports

2.10 After the partitioningof Greater Syria, the main ports of the region - Haifa, Beirut, Tripoli and Iskenderun- were beyond Syria's new borders, and the country had to develop two new national ports, Latakia and Tartous, and reorient traffic to pass through them. General cargo movements increased from 1.6 million tons in 1965 to 4.6 million tons in 1969 (Table 3); passengermovements are negligible. The specializedpetroleum port of Banias handles about 30 million tons annually. -5-

2.11 Latakia and Tartous serve mainly the domestic market, but an at- tempt is being made to capture more regional trade by improving their road connectionswith the national system, and especially the links to Iraq and Jordan. However, Beirut continues to play a dominant role in handling goods for other Middle Eastern countries,with Tripoli following. About 125,000 tons of cargo went to Syria from Beirut in 1967, and about 238,000 tons to other Middle Eastern countries through Syria.

Air Transport

2.12 Air transportoperations in Syria are centered on the new (1969) airport at Damascus. The only internationalairport in the country, it serves as an intermediatestop between Europe, Asia and Africa, it can accommodate the largest jets in service. Traffic has, however, been low, increasing only from 145,000 passengers in 1965 to 248,000 in 1969; cargo has remained stable at about 1,500 tons per year (Table 3).

2.13 The national airline provides limited internationalservice to Arab, European and some Asian cities, using two Caravellesand three DC-6 planes. Two more Caravelles are on order. The Syrian Arab Airlines national network includes service to Aleppo, Deir ez Zor, Qamishliye and Latakia, utilizing DC-4 and DC-3 planes. Schedules are not very reliable and movements are light. Syrian Arab Airlines has broken even on its operations, but only because internationaloperations have subsidizeddomestic ones.

Pipelines

2.14 Within the last fifteen years, oil has been discovered and exploit- ed in the northeasternpart of the country. A 650 km pipeline vas built with Italian assistance to connect the oil fields to the refinery at Homs and to the port of Tartous. Recent increases in oil production and in refining capacity at Homs, and prospects of lncreasedexport of oil, have prompted the Gov- ernment to plan expansion of the capacity of the pipeline and the port facilities at Tartous; these are now under way.

2.15 Two internationalpipelines cross Syria - one serving the Iraq Pe- troleum Company and the other the Arabian American Oil Company - which transport about 40 and about 15 million tons of crude oil a year respectively. Disputes between the producing companies and the various governmentscon- cerned have occasionallyinterrupted the flow of oil.

C. Transport Policy and Coordination

2.16 Three Ministries are concernedwith transport: the Ministry of Communicationscontrols road and rail transport,the Ministry of Defense is in charge of civil aviation, and the Ministry of Economy of the ports. A study is underway to turn over responsibilityfor ports to the Ministry of Communications. At present, the Directorate of Transport Planning in the Ministry of Planning coordinatesboth sectoral and intersectoralplanning, but the proposed reorganizationof the Ministry of Communicationsincluded the creation of a high-level committee that will be responsible for sectoral planning. -6-

2.17 The Government'stransport policy aims at improving road and rail transportso that each mode can play its particularrole in serving the transportdemands of the country. For highways, the policy is to modern- ize the primary network composed largely of roads built over 30 years ago; the First and proposed Second Highway Projecta will go a long way in ac- complishingthis. Railroad policies are: (a) to link the fertile areas of the north and northeasternareas, where most of the country's export products (cotton and wheat) are grown, with Latakia, the port of export; and (b) to integrate the disconnectednetwork (para. 2.08).

2.18 There is no administrativeallocation of traffic between modes, and users are free to select the mode which best suits their requirements. Road transport is however subject to a degree of regulation,for instance in route limitation,but the extent to which such regulationis either ef- fectivelyenforceable or is economicallydamaging has not been established. Further Bank operations in highways will require an analysis of the effect of these regulations.

2.19 There are two truck tariff rates in the country - one for shipments by the private sector and another for the public sector. A recent Government study shows that rates paid by the private enterpriseshippers cover operating costs and provide a fair return to the truckers. However, the rates paid by the public enterpriseshippers - the largest truck users since the adoption of nationalizationpolicies in Syria - are too low for most hauls ta yield a reasonableprofit. Requests to increase the rates to the public sector shippers are now under considerationby the Covernment. Rail tariffs appear adequate for the present low level of operation,but a detailed re- examinationwill be needed when the northern line is completedand the railroad's share of movements in the northern part of the country has increased. The feasibilitystudy included in this project (para. 5.13) will include an analysis by consultantsof possible road-railcompetition in northern Syria.

2.20 Under the First Highway Project, the Governmentagreed to ensure that the types and load capacitiesof imported trucks would be technically suitable to the design standards of the country'shighways, to permit the gradual import of trucks to satisfy growing demand, and to enforce traffic laws that control overloading. Although the fleet has increased (Table 4), the problem of overloadingcontinues and is aggravatedby transit of heavy foreign-ownedtrucks (Table 1). During negotiations,assurances were obtained from the Government that vehicle weights and dimensionswill be satisfactorilycontrolled. A new traffic law revising the controls and fines for overloadingof trucks is being drafted in consultationwith the Associa- tion, and is expected to be put into effect by mid-1972.

2.21 Vehicle importationis restrictedby the Government;imports are based on demand studies made periodicallyby the Ministry of Communications. Competitionin the trucking industry is keen, especially in international freightmovements, as the Syrians must competewith truckers from Lebanon, Jordan, Iraq, Kuwait and Saudi Arabia. The economic consequencesto Syria of having part of its cargo movement handled by foreign truckers as a result of limitedvehicle import have not been measured. -7-

2.22 In order to permit the developmentof a rational policy for international trucking,and to provide a basis for evaluatingtransit agreements with neighboringcountries, a study is needed of national origin, size and average load of trucks, so as to determinethe costs imposedby foreign trucks on Syrlen roads. During negotiationsthe Governmentagreed that it will undert,ke such a study and discuse its results with the Association. The consul1:cntsto be employed for the study of future maintenanceneeds (para. 4.07) -:nvassist in carryingout the above-mentionedstudy.

III. THE HIGHWAY SECTOR

A. The Righway Network and Its Traffic

3.01 Syria's highway network comprisesabout 8,100 km of primary (international and national) roads, 1,600 km of secondary (provincial)roads and 1,800 km of tertiary (feeder and rural) roads; about 60% of the total road network is bituminous paved. Table 5 shows the breakdownby type of surface. Roads were inventoriedby the consultantsSCET in 1966/67.

3.02 The main elements of the system are the roads from the Jordanian Border to Damascus (to be improved under the present project), from Damascus ta Aleppo and Raqqa (being improved under the First Highway Project) and to Deir ez Zor on the bank of the Euphrates river. However, the road used most bath by local and internationaltraffic is the Damascus-Lebaneseborder road, to be reconstructedand improved under the present project. Some additions to the present network are needed for further developmentof the country, in particular, (a) the Palmyra-Deirez Zor road (the feasibilitystudy and detailed engineeringwere prepared under the First Highway Project) for the constructionof which financingis yet to be arranged;and (b) the Aleppo- Manbij-TallTamir-Tall Kojak road which is to be studied under the present project.

3.03 In 1969, there were about 48,000 vehicles in Syria of which about 61% were cars, 34% trucks, 4% buses, and 1% tractor-trailers(Table 4). The average annual growth rate of vehicles between 1965 and 1969 was about 3%, with an uneven pattern of yearly growth due to Government'sstop and start importationpolicy (para. 2.21). Gasoline consumptiongrew at a rate of about 9% between 1960 and 1969 (Table 6). Relatively few vehicles use diesel fuel.

3.04 Most traffic is on the north-southroad connectingthe urban centers in the interior plain, namely Deraa-Damascus-Homs-Hama-Alepporoad, the Aleppo-Raqqa-Deirez Zor road, the coastal highway from Tartous to La- takia, and the three transversalroads: Damascus-Lebaneseborder, Homs- Tartous and Aleppo-Latakia. Accurate data on road traffic do not exist, but a calculationbased on estimated fleet utilizationand average length of haul shows freight traffic of three billion ton-km and passenger transport approachingfour billion pass-km in 1969. -8-

B. Highway Administration

3.05 The Ministry of Communicationsis responsible,through its Director- ate of Highways and Bridges (DHB), for the design, constructionand maintenance of primary and secondary highways. Except for major constructionworks which are carried out directly by DHB, operationsare handled by the 13 district offices. Secondary roads are also built by the semi-autonomousagen- cies in connectionwith major irrigationand power projects, and then trans- ferred to DHB for maintenance. The district offices also construct and maintain feeder and rural roads.

3.06 Under the First Highway Project, CITE studied and made recommenda- tions on DHB's organization,with special emphasis on maintenance. The consultants' recommendationsare being gradually implemented,but budgetary constraints (reflectingheavy military expendituresand concentrationon other sectors such as mining and agriculture)have prevented DHB from re- cruiting qualifiedpersonnel and achieving full reorganization. With prevail- ing salary scales, DHB is unable to compete with private industry or with the attractionof jobs abroad, and a Governmentcommittee is studying and will make recommendationson this problem. The present organizationof the Ministry of Communicationsand of DHB is shown in the Chart. A new organizational set-up including,among other items, a Central Highway MaintenanceDepartment, is expected to become effective by mid-March 1972.

3.07 CITE also recommendedand initiated training programs for technicians, supervisors,mechanices, operators, etc.; these programs are progress- ing satisfactorilyunder DHB and ILO supervision. Scholarshipsare also provided for training engineers abroad, but low salaries induce few trainees to remain in DHB's service any longer than legally bound. The Governmenthas confirmed that salary scales for lower level personnelwill also be studied by the committee (para. 3.06).

3.08 The Plan of Operation of the UNDP-financedfour-year vocational training program, for which ILO is executingagency, was signed in June 1969. The cost of this program is about US$600,000. It includes comprehensive vocational training for engineers,technicians and skilled workers for road and bridge construction,and fellowshipsabroad. Administrativeproblems and difficulty in finding suitable experts delayed the ILO program one year, but five of the six experts budgeted are now in Syria.

3.09 UNDP has financed laboratoryequipment for DHB's central soils and materials laboratory, and has also financed two OPAS experts in DHB- one for road design and construction,and the other for administrationand organization. One of the OPAS experts has now completed his tour of duty.

C. Highway Financing and Planning

3.10 Revenues from road users increasedby 60% between 1966 and 1969, an average annual increase of about 19% (Table 7). These revenues come from import duties on vehicles and spare parts, taxes on gasoline and diesel oil, and vehicle registrationfees; they are not earmarked for highway purposes, but go into general Government revenues. Revenues from road users more - 9 - than covered actual expenditureson administration,maintenance, improvement and constructionof highways; in 1969, for instance,these revenues were about twice total road expenditures(Tables 7 and 8). Although revenues fluctuatea great deal from year to year reflectingvariations in the number of imported vehicles (one of the main revenue sources), the average revenues over 1966-69were about 40% above average total road expenditures in the same period. The Government imposes on road users higher taxes than needed to finance expendituresin the highway sector; this high taxation is aimed mainly at improvingthe balance of payments, redistributingincome, and controllingprivate consumption.

3.11 Most highway works are financed through budgetary allocations. A breakdown of total expendituresfor highways from 1965 and 1969 is given in Table 8. It shows a moderate but steady increase of yearly highway expenditures,with a jump in 1969 when constructionof two major roads was started (Homs to the phosphate mines close to Palmyra, and Damascus to the Iraqi border).

3.12 The Third Five-YearPlan (1971-75)provides SL215.0 million (US$56.3million equivalent)for improvingand constructingroads, and SL 18.0 million (US$4.7million equivalent)for studies, training, purchase of maintenanceand laboratoryequipment, and other miscellaneousexpendi- tures. The Plan is based on the recommendationson "Developmentof the Highway System" made by SCET under the First Highway Project; it provides both for completingworks on the First Highway Project and for expenditures on the proposed Second Highway Project up to 1975. Although the thrust of the Plan is satisfactory,further engineeringpreparation is needed.

3.13 Collectionof data for highway planning is limited to traffic counts on the main routes; other important data (such as axle loads and numbers of foreign vehicles in transit) are not systematicallycollected. During negotiationsthe Governmentagreed that appropriateprocedures will be establishedfor collectingdata needed for highway planning.

D. Highway Engineering

3.14 Because of staff limitations,DHB carries out design work only on a limited scale. Major projects are designed by local or foreign consultants. Two local consulting firms are active in the highway field; no restrictions are placed on foreign consultantsin Syria.

3.15 Geometric design standards prepared by the consultantsCITE have been accepted by DHB, and the decree approving them is expected to be issued in 1972. The design standards proposed for the project highways (Table 9) are similar to those proposed by CITE and are acceptable. - 10 -

E. Highnay Construction

3.16 Major highway constructionis normally carried out under unit price contracts awarded on the basis of competitivebidding. There are only three local contractingfirms (two private and one public) capable of carrying out major highway works (the public firm is now carrying out major railway constructionworks, and will probably seek to prequalifyfor works under the proposed project); there are also about six medium-sizedSyrian contractors who could undertake sub-contracting,of earthworksfor instance, and about 50 minor contractorsspecializing mainly in constructionof drainage struc- tures. All contractorsare registeredby the Ministry of Finance and also by the particularMinistry for which they work. Because of the 1967 crisis, few foreign firms showed interest in bidding under the First Highway Project, and since few local firms were qualified at that time to bid for the works, getting suitable contractorscaused delays. However, two of the four contracts have been awarded to foreign firms, and, barring a resurgenceof the Middle- East crisis, this problem is not expected to be encountered under the proposed project. The foreign contractors alreadyworking are interestedin bidding for furtherworks.

3.17 Because of shortage of staff, supervisionof constructionfor IDA- financed works has been and will continue to be carried out by consultants; wholly Government-financedconstruction works are however normally supervised by DHB staff.

3.18 Experienceunder the First Highway Project has shown that the period between award of a contract and approval by all Governmentauthori- ties concerned is about six months, which delays projeet execution. It will obviously take some time to reform the cumbersomeadministrative structure, and it is therefore unlikely that the Governmentwill be able to reduce substantiallythe approval period for the proposed project.

F. Highway Maintenance

3.19 All routine highway maintenance is now carried out by force account through the 13 district offices (para. 3.05 and Chart); repaving, resealing and aggregate supply are usually by contract. As indicated below, after the establishmentof the Central Maintenance Department, the district offices' executive responsibilitiesin maintenancewill be limited to secondary and tertiary roads (para. 3.21).

3.20 Maintenance expendituresfor the primary and secondary system al- most doubled from 1965 to 1969 (Table 8). The primary road system is fairly well maintained,but maintenanceoperations are generally inefficientbecause (a) maintenanceequipment is very old and of many differentmakes, and (b) funds to replace worn-out units are limited. The present project provides for a study of future maintenanceneeds in equipment,workshops, spare parts, etc. (para. 4.07). - il -

3.21 The Central MaintenanceDepartment is expected to be created by mid-March 1972, but constructionof the main maintenance complex near Damascus is already underway. It is Government policy to decentralizemany of its responsibilities(including DHB's present responsibilityfor secondary and tertiary roads) by turning them over fully to provincial governments. An organizationalstructure for the Central MaintenanceDepartment to meet the needs of this policy, and a correspondingmaintenance program have been developedby DHB with the advice and assistanceof OPAS and ILO experts. The Departmentwill be responsiblefor trunk roads - essentially those roads either improved under the First Highway Project or to be improved under the proposed project. This division of responsibilitywill simplify DHB's operations,and also reduce the problem of diversion of DHB's equipmentby district governments. The formal establishmentof this Central MaintenanceDepartment is a condition of credit effectiveness. During negotiations, the maintenance program was discussed and assurancesobtained from the Government that it will provide the necessary funds and facilities to maintain the primary network properly.

3.22 Under the First Highway Project, US$1.2 million was provided for maintenanceequipment, and invitationsto bid for the purchase of this equipmenthave been issued. This equipmentwill be the responsibilityof the Central Maintenance Department. During negotiationsthe maintenance program was discussed, and the Government gave assurances that it will provide the necessary funds and facilitiesto maintain the primary network properly.

IV. THE PROJECT

A. General

4.01 The project consists of:

1. Highways to be improved and/or constructed:

(i) the improvementor constructionof sections of the Damascus-Lebaneseborder highway, about 40 km;

(ii) the improvementof the Damascus-Jordanianborder highway (Kisswe-Jordanianborder section), about 85 km; and

(iii) the constructionof 28 km of the Homs-Tartoushighway (Tall Kalakh detour).

2. Consulting services for:

(i) supervisionof the above; - 12 -

(ii) feasibilitystudies and, if justified on the basis of these studies, detailed engineeringfor:

(a) bypasses for the cities of Homs, Hama, Aleppo and Deraa (about 70 km); and

(b) the Aleppo-Manbij-Tall Tamir-Tall Kojak Highway (about 470 km); and

(iii) a study of maintenanceneeds.

4.02 The project roads have been selected by the Governmentin agree- ment with the Associationas having high priority within the national highway system. These works will constituteabout 35% of the Government'shigh- way constructionand improvementprogram for the 1971-75 period.

B. Highways to be Improved and Constructed

4.03 The design standards for project roads are shown in Table 9. Eco- nomic aspects of project roads are described in Chapter V. A descriptionof physical characteristicsfollows:

(i) Damascus-LebaneseBorder - 40 km

The first section (about 7 km) of the existing road within the urban limits of the city of Damascus, is located along a narrow corridor bounded by a dense urban area on one side and the Barada river and the Damascus-Beirutrailway on the other, leaving no room for widening or improving the road except at exorbitant cost. In addition, there is a substantialamount of local traffic, the horizontal and ver- tical alignments are deficient, and the road crosses the railway line three times. A new 21.3 km alignment through the hills to the north of Damascus avoids this difficult section, but the remaining 18.7 km follows the present alignment;the existing road will however continue to take some traffic, and for 5 km beyond its junction with the new alignment, the new road will have four lanes.

(ii) Damascus (Kisswe)-JordanianBorder - 85 km

The road is adequate to Kisswe, 17 km south of Damascus,but from there to near Deraa (80 km) this two-lane road was developed from a track and now needs to be improved and paved. The topography is flat or rolling, and horizontal and verti- cal alignments are generally satisfactory;realignments totalling about 5 km, and pavement-wideningthrough villages are proposed. - 13 -

(iii) Homs-Tartous(Tal1 Kalakh detour) - 28 km

A 28 km two-lane realignment,located entirely in Syrian territory, is proposed, replacing an equal length of the present road which is in poor conditionand of which a 5 km section goes through Lebanese territory. Two sections on steep grades totalling about 4 km will be provided with climbing lanes for heavy truck traffic.

C. Consulting Services

Supervisionof Construction

4.04 Consultantsacceptable to, and under terms and conditions satisfactory to the Associationwill be engaged to help prequalify contractors,analyze bids and supervise project highway works. The Government is now preparing a list of firts which might be suitable for this work.

FeasibilityStudies and Detailed Engineering

4.05 It is proposed to study the bypasses of the congested cities of Homs, Hama, Aleppo and Deraa; the first three cities are along the Danascus- Aleppo-Raqqaroad being improved under the First Highway Project. Deraa is on the Damascus-Jordanianborder road which is to be improved under the proposed project.

4.06 The Aleppo-Manbij-TallTamir-Tall Kojak road proposed for feasibility study runs along the northern part of the country, approximatelyparal- leling the Turkish border. This road would open up a region not nov served by any land transportmeans.

Study of MaintenanceNeeds

4.07 CITE's maintenancestudy was completedin 1967, but the highway maintenancereorganization is expected to be effective only by mid-March 1972. The recent administrativedecentralization (para. 3.21) and the time elapsed make it necessary to review and update the consultants'recommenda- tions, and to determine future maintenanceneeds with more precision (para. 3.20). The project makes provision for consultantsto assist the Govern- ment in this task.

D. Cost Estimates, Financingand Disbursement

4.08 The total cost of the project is estimated at US$28.7 million equivalent, including contingencyallowances. Table 10 shows the breakdown of constructioncost for each highway by major items (earthworks,drainage, etc). A summary of the project costs (based on 1970 cost estimates) and the foreign exchange component to be financed by the credit follows: - 14 -

SL Millions US$ Million Equivalent Foreign Local Foreign Total Local Foreign Total Exchange

1. Highways to be constructed and/or lmproved 30.11 32.62 62.73 7.88 8.54 16.42 52

2. ConsultingServices for:

i) supervising construction 0.65 2.61 3.26 0.17 0.69 0.86 80

ii) feasibility studies and detailed engineering 1.16 4.65 5.81 0.30 1.22 1.52 80

iii) maintenancestudy 0.16 0.64 0.80 0.04 0.16 0.20 80

Sub-total 1.97 7.90 9.87 0.51 2.07 2.58

3. Contingencies (on Item 1)

Physical, about 10% 3.01 3.26 6.27 0.78 0.86 1.64 52

Escalation,about 20% 6.02 6.52 12.54 1.56 1.72 3.28 52

Uncertainty,about 7% 2.11 2.28 4.39 0.54 0.61 1.15 52

Sub-total 11.14 12.06 23.20 2.88 3.19 6.07

TOTALS 43.22 52.58 95.80 11.27 13.80 25.07

4. Right-of-way 13.90 - 13.90 3.63 - 3.63 0

GRAND TOTALS 57.12 52.58 109.70 14.90 13.80 28.70 54

4.09 Estimated costs are based on SCET's completeddetailed engineering. The roade have been designed for two lanes, which is adequate for present and foreseeablefuture traffic; the exceptionsare one difficult section of about 10 km of the Damascus-Lebaneseborder highway, where it is economic to build earthworks and drainage for four lanes now, although only two will be paved; and 5 km on the same road where the traffic la heaviest. The cost estimate of the 10 km of additionalearthworks has been prepared by DHB on the basis of quantitiesderived from SCET's designs; detailed engineering for this section is being completedby DHB. Cost estimates reflect the effect of recent currency parity changes. - 15 -

4.10 A physical contingencyallowance of about 10% of the construction cost has been included to cover possible quantity increases. The 20% escalation contingencyto cover price increaseshas been estimated on the basis of an average increase of about 5% per annum from preparationof the estimates (1970) to completionof construction. A further 7% contingencyallowance is provided because of the politicaluncertainty in the Middle East which may induce contractorsto hedge against the risks involved. If bidding shows that such problems have not materialized,the correspondingcon- tingency would be cancelled.

4.11 The consultantsSCET have estimated the foreign exchange component of cost at 52%, on the basis of an analysis of the unit prices for each type of work; although it is possible that local firms could get one contract (they are busy now on other projects), the assumptionis made that construction will be carried out by foreign contractorswhich sub-contracta substan- tial part of the earthworks and drainage structuresto local firms. The estimate is reasonable. The foreign cost of supervisionof construction and other consultingservices is estimatedat 80% based on experiencewith similar services in Syria.

4.12 The proposed roads will cross some agriculturalareas, and no dif- ficultiesor delays are foreseen under the existing laws in acquiring the necessary private land. The credit will not finance right-of-waycosts.

4.13 Local costs will be met by the Government from whom assurances were obtained during credit negotiationsthat appropriatebudgetary allocations will be made. There have been no problems under the previous project with regard to provision of local funds.

4.14 Disbursementsfrom the credit account will be on the basis of 52% of the cost of construction(the estimated foreign exchange component) and the actual foreign exchange cost of consultingservices. The schedule of estimated disbursementsis given in Annex B.

4.15 Any surplus remaining in the credit account on completion of the project should be cancelled.

E. Execution

4.16 Execution of project works will be the responsibilityof the Min- istry of Communicationsthrough its Directorateof Highways and Bridges. Constructionwill be by unit price contracts awarded after international competitivebidding followingnormal Bank procedures.

4.17 One contractwill be awarded for works on each of the three project roads. The sîze of any of these three contractsshould attract foreign bidders or the larger local firms, and smaller and more specializedlocal firms are expected to participateextensively as subcontractors. The Gov- ernment will start prequalifyingcontractors during 1972. Work is expected to start towards the end of 1973 and to be completedby late 1977. - 16 -

4.18 Consultantsto supervise construction,to study maintenanceneeds and to prepare feasibilitystudies and detailed engineering for the city bypasses and the Aleppo-TallKojak road should be acceptable to, and engaged under terms and conditions satisfactoryto the Association. This was discussed and agreed during negotiations.

4.19 The labor force in Syria comprisesabout one-quarterof the population, of which about 5% i8 unemployed. In order to create opportunities for unskilled workers, the Government carries out a permanent program of minor public works (such as small irrigationschemes, feeder roads, schools, etc.) in the districts. There does not appear to be an underemployment problem which merits specific attention in respect of the proposed project, and for this reason the Syrian authorîtieshave prepared the project for conventionalconstruiction methods.

V. ECONOMIC EVALUATION

A. General

5.01 The total effect of the First and the Second Highway Projects will go a long way toward modernizing the primary network of Syria to meet existing and forecast traffic demands. The roads included in the proposed project were selected from among hîgh priority roads identified in 1967 by the French consultants,SCET. For detailed descriptionof these roads, see paras. 4.03 and 5.06 through 5.11.

B. Benefits from the Project

5.02 About 80% of the quantifiablebenefits attributableto the project roads are road user savings from lower vehicle operating costs on re- constructedroads. Reductions in operating costs, calculatedby the consultants during the feasibilitystudy, are: for cars, about 10%, for buses, about 12%, for trucks under 7 tons, 10%, and for trucks over 7 tons, 12% (Table 11W. These calculationsare on the conservativeside. Because of the multi-narionalcomposition of the vehicles in circulation in Syria, benefits from road improvementswill not accrue only to Syria, but also to other countries in the region. However, Syria will benefit most, since most of the vehicles on the project roads are Syrian ones handling domestic cargo. In movements that originate and/or terminatein Syria - although they mav be carriledby non-Syrian trucks - improvementsin the system will be reflected in decreased cariffs due to the stiff competitionbetween truckers (para. 2.21). In the case of purely transit movements, the road improvementswill lead to better conditions for intra-regionaltrade movements, particularlysince the regional network outside Syria is being improved, and since reciprocal agreementson transit are in force.

5.03 Additional benefits (about 15%) were derived from the differences in maintenance costs between well constructedpaved roads and existing poor quality ones. Unquantifiedbut importantbenefits attributed to the project - 17 - are time savings for passengerson business and other trips, încreasedcom- fort to the users of the roads, as well as faster turnover of shippers' capital. The Tall Kalakh detour will provide a road connectionentirely within Syrian territoryto the increasinglyimportant port of Tartous.

5.04 Military traffic - estimatedat about 15% of total traffic on the Damascus-Lebanese border and Damascus-Jordanian border roads - was excluded from the economic analysis. However, the design standards of the proposed roads are not affected.

5.05 For the roads included in this project, the estimated net benefits, iiscountedover a 20-year economic life of the roads, give internal economic returns varying between 12% and 22%, and for the whole project the IER is 18%. A sensitivity analysis (Table 12) indicates that reasonable variations in constructioncosts and in traffic growth, the two major inputs in the analysis,have little effect on the IER. Thus it is very unlikely that the IER would fall below 10% on the Damascus-Lebaneseborder and Damascus-Jordanian border roads: it could conceivablyfall slightly below 10% on the Tall Kalakh detour, but only if constructioncosts increase by 20% above the estimate, and if the anticipatedtraffic growth falls some 10% below the expected growth, which is most unlikely.

C. The Project Roads

(M) Roads Proposed for Constructionand/or Improvement

Damascus-LebaneseBorder Road

5.06 This 40 km road is the Syrian section of the Beirut-Damascushigh- way: the Lebanese section has been studied by consultantsfollowing terms of referenceagreed with the Bank. The importanceof this road to Syria is a result of the growth of agriculturaland industrialactivity in Damascus and its vicinity, and of the important inter-regionaltrade between Beirut, the major port in the Middle East, and Syria, Iraq, Jordan, Kuwait and Saudi Arabia (Table 1).

5.07 In 1970 ADT was about 9,000 vehicles on the section close to Damas- cus, decreasingto about 3,000 vehicles near the Lebanese border. The present two-lane road is inadequateto handle this heavy traffie. Traffic is expected to grow at an average rate of 13% per year for the first ten years, decreasing to 7% in the second ten years, with the largest growth occurring in the passengervehicle category of commuterswho live in outlying dormitory areas and commute to Damascus. 1/ Traffic on the first section of the road is projected at 16,000 ADT in 1980 (Table 13), by which time two additlonal

1/ Traffie growth estimateswere derived from comparisonsof traffic counts carried out in 1968 when the feasibilitystudies were made, and from 1970 traffic counts. - 18 - lanes will be needed; this future cost was allowed for in the economic evaluation. The IER based on quantifiablebenefits is 22% over the 20-year economic life of the road.

Damascus (Kisswe)-JordanianBorder Road

5.08 This road connects Damascus to the important agriculturalregion of the Houran, and is a section of the inter-regionallink between Saudi Arabia and Jordan and Lebanon (via the Beirut-Damascusroad). Damascus, Deraa, and Amman in Jordan fall within the zone of influence of the road.

5.09 The present condition of this road is inadequate for present heavy traffic; 1970 ADT was about 2,000 vehicles, of which 51% were passenger cars and the rest trucks and buses. Traffic is expected to grow at an annual rate of 8% during the first ten years, decreasing to about 5% per year in the second ten years (Table 13). Quantifiablebenefits are expected to yield a 15% rate of return over the 20-year economic life of the road. This road will also help promote tourist activity centered on the Roman ruins at Bosra.

Homs-TartousRoad (Tall Kalakh detour)

5.10 A 28 km realignmentlocated entirely in Syrian territory is proposed to replace an equal portion of the present road between Homs and Tar- tous which is in poor condition. All the traffic which uses this route has to check through two Lebanese border stations, since 5 km of the present route lie within Lebanese territory. This road is importantsince it connects the importantagricultural and industrialcenter of Homs and the port of Tartous.

5.11 In 1970 AIT was about 2,000, of which 50% were passenger cars and the rest trucks and buses. The average annual traffic growth is expected to be about 9% during the firet ten years, decreasing to about 8% during the following ten years (Table 13). In addition, the newly discoveredphosphate deposits in the Palmyra area which are beginning to be exploitedwill generate truck traffic on this road. However, if the Government'sexpectations mate- rialize that by 1978 two million tons of phosphatewill be exported through the port of Tartous, a decision may be made to transport this large volume by railroad, and to build a spur from the mines to connect with the line at Homs. The possible effect of this was taken into considerationin the economic evaluation. The quantifiablebenefits are expected to yield a rate of return of 12% over the 20-year economic life of the road. Unquan- tified benefits result from the decrease in travel time on this road for both passenger and cargo movement.

(ii) Roads Proposed for FeasibilityStudies and Detailed Engineering

Bypasses for Homs, Hama, Aleppo and Deraa

5.12 Three of the four bypasses included in this study serve the cities of Homs, Hama and Aleppo, the major urban centers traversedby the Damascus- Aleppo-Raqqaroad (financedunder the First Highway Project). The fourth is - 19 - for the city of Deraa located on one of the roads included in the proposed project. The total length of these bypasses is estimatedat 70 km; they are expected to have favorablerates of return due to the high volumes of through traffic on these routes.

Aleppo-Manbij-Tall Tamir-Tall Kojak

5.13 This new route will be a basic factor in the developmentof rich agriculturalareas in northern and northeasternSyria to which the Government has assigned high priority for agriculturaldevelopment. The extent of the direct influence area of this road is estimated at 60,000 km2 - about one-third of the national territory- and its population is close to 2.0 million - also about one-third of Syria's population. In 1969 this area produced about 1.7 million tons of cereal (two-thirdsof national production),about 600,000 tons of cotton and other industrial crops (about one-thirdof national production)and about 500,000 tons each of vegetables and fruits. Sheep, goat and poultry production are also important. The proposed road will also provide a direct connection between Hassake, the major center in the Jezireh area, Aleppo, the major industrial and service center in northern Syria, and from there to Latakia, the major port of export; this new connection will be 140 km shorter than the present route through Deir ez Zor.

VI. AGREEMENTSREACHED AND RECOMMENDATION

6.01 During negotiations, agreements were reached with the Government on the following principal points:

(a) the control of vehicle weights and dimensions (para. 2.20);

(b) the study of foreign truck traffic (para. 2.22);

(d) the proper maintenanceof the primary network (para. 3.22).

6.02 The formal establishmentof the Central MaintenanceDepartment will be a conditionof effectivenessof the proposed credit (para. 3.21).

6.03 With the agreements and conditions indicated above, the proposed project constitutesa suitable basis for an IDA credit of US$13.8 million equivalent.

TABLE1

SYRIA

SECONDHIGHWAY PROJECT

Transport of Regional Transit Cargo on Syrian Highways - 1967

(Counting Station Syrian-Lebanese Border)

Origin of Truck Destination Trucks Tons

Syria Syria 700 7,700 Region 4,200 669500

Iraq Syria - - Region 4,900 58,500

Saudi Arabia Syria - - Region 3,900 66,500

Jordan Syria 2,1400 27,300 Region 3,400 44.,100

Kuwait Syria 1,600 23,800 Region 230 2,600

Lebanon Syria 5,300 66,500 Region - -

Sub-Total Syria 10,000 125,300 Region 16,630 238,200

Total 26,630 363,500

AADT Syria 30 Region 45

Total 75

Average truck load Syria 12.5 tons Region 14.3 tons

Source: Directorate of Highways and Bridges, Ministry of Coemmuications Appraisal Mission, May 1971.

July 1971 TABI&2

SYRIA

SECONDHIGHWAY PROJECT

Freight Transport by Mode - 1965-69 (million ton-km)

1965 1966 1967 1968 1969

Road 2,400 2,500 2,700 2,700 3,000

Rail 88 85 95 123 123

PassenRer Transport by Mode 1965-62 (million pass-km)

Road 3,500 3.,400 3,600 3,700 4,000

Rail 70 68 78 85 96

Source: Roads Data: Directorate of Highways and Bridges, Ministry of Commaunications, May 1971.

Railroad Data: Statistical Abstracts, 1966 and 1969.

July 1971 TABLE3

SYRIA

SECONDHIGHWAY PROJECT

Ports and Air Movements J2965 1969

Ports (except Banias) Banias (petrol ep,ort) (million tons) Year Passengers Cargo tonsn (el,lion tons)

1965 2,700 1.6 26.2

1966 3,000 1.9 24.5

1967 2,900 1.7 20.6

1968 2,800 2.8 29.5

1969 3,600 4.6 30.3

Air TransPort Year Passengers Cargo ttons)

1965 145,000 1,600

1966 192,000 1,600

1967 1h8,000 1,200

1968 212,000 1,200

1969 248,000 1,500

Source: Port Data: StatisticalAbstracts, 1966 and 1969. Air Transport Data: Civil Aviation Department,1970.

July 1971 TABLE 4

SECOND HIGHWAY PROJCCT

VehicleRegistration 1965 - 1969

Year Cars Buses Trucks Tractor-Trailexe Total

1965 27,237 1,609 12,763 244 41,853

1966 26,497 1,613 13,308 229 41,647 1967 28,564 1,406 14,644 160 44,774 1968 28,466 1,557 13,866 384 44,273 1969 29,379 1,720 16,012 696 47,807

Source: Directorate of Highways and Bridges, Ministry of Comaunications, May 1971.

July 1971 TABLE5

SflIA

SECONDHIGHWÂY PtOJECT

Highway Network 1966-69

Bituminous Year Paved Gravel Barth Total -(km) (km) () (km)

1966 5,995 1,296 1,915 9,206 1967 6,350 1,370 1,985 9,705 1968 6,600 1,200 2,700 10,500

1969 6,930 1,300 3,270 11,500

Source: Directorate of Highwa:ts and Bridges, Ninistry of Communications, May 1971.

July 1971 TABLE6

STRIA

SECONDHMNHAY PROJECT

Gasoline Consuuption 1960 - 69 (ii.lions of liter.)

_ar Gamoline

1960 87

1961 83 1962 88 1963 111

1964 154 1965 175 1966 166

1967 167 1968 168

1969 182

Average Annua Increase 1960-69 8.5%

Source: Directorate of Highways and Bridgez. Ministry of Communications. May 1971.

July 1971 TABLE 7

SYRIA

SECONDHIGHWAY PROJECT

Estimatesof Revenues from Road Usera 1966-69 (SL millions)

1966 1967 1968 1969

Gasoline tax 37.9 35.0 36.3 39.5

Import duty on vehicles 13.9 47.4 2.2 67.3

Import duty on spare parts 20.5 24.3 25.4 28.9

Import duty on tires 2.5 2.7 3.0 3.3

Registrationfees 23.0 20.0 22.0 26.0

Totals 97.8 129.4 88.9 165.0

Average Annual Revenue for 1966-69 - SL120.3 million

Source: Directorateof Highways and Bridges, Ministry of Coimwiications. AppraisalMission, May 1971.

July 1971 TABLE 8

SYRIA

SECONDHIC}HWAY PROJECT

Hioway Espenditures 1965-69 (SL millions)

1965 1966 1967 1968 1969

Adlministration 4.6 6.4 8.6 7.6 9.6 Maintenance 8.7 10.5 11.5 14.3 16.0

Construction 1/ and Improvement 3.4 8.5 11.3 15.4 48.4 Construction of Feeder Roads - - 9.9 9.9 11.8

Totals 16.7 25.4 41.3 47.2 85.8

Average Annual Highway Expenditure for 1965-69 - SL 49.9 million.

2 Includes expenditures for constructing the Homs-phosphate mines and Damascus-Iraqi border roads which vere started in 1969.

Source: Directorate of Highways and Bridges, Ministry of Comnmunications, May 1971.

February 1972 TABLE 9

SYRIA

SECOND HIGHWAYPROJECT

DesigRn Standards for Project Highways

Damascus Damascus- (Kisswe) Homs-Tartous Lebanesç Jordanian (Tal Kalekh Rail Border 1- Border Dotour )__

1. Design Speed km/h 80 100 80

2. Width of Roadway m 11.50 to 13.25 13.50 13.50

3. Width of Surfacing m 7.40 7.40 7.40

4. Width of Shoulders m 3.00 3.00 3.00

5. Minimum Radius of Curvature m 200 300 200

6. Maximum Grade % 7.0 3.5 7.0

7. Passing Sight Distance m 500 750 500

8. Type of Surface Asphaltic Asphaltic Asphaltic Concrete Concrete Concrete

9. Axle Load m tons 13 13 13

1/ For sectionswith climbinglanes (about llkm) the total width of roadway is increased to 14.50 m, the width of pavement to 11.10 m and the vidth of shouldersreduced to 1.70 m.

Source: Directorate of Highways and Bridges and Consultants' Reports, May 1971.

February 1972 SYRIA

SECONDHIGHTdAY PROJECTT

Breakdown of Construction Cost Estimates (in SL millions)

- - Contingencies - -

Base Major Physi- Esca- Uncer- Length Earth- and Masonry Miscel- S&b- cal lation tainty km_ works Surface Drainage Works laneous Total 10% 20% 7% Total

1. Damascus-Lebanese Border 40 9.38 7.57 6.31 3.60 3.57 30°43 3.O4 6.08 2.13 41.68

2. Damascus(Xisswe)-Jordanian Border 85 0.82 16.62 0.71 0.21 3.47 21.83 2.18 4.36 1.53 29.90 3. Homs-Tartous(Tall Kalakh) Detour) 28 2.86 5.01 1.17 0.82 0.61 h7 .05 2.10 0.73 >. 3 Totals 153 13.o6 29.20 8.19 4.63 7.65 62.73 .2 12 /a

(uS$ 22.49 million equivalent

/a Does not include right-of-way costs; total including right-of-way is SL 99.83 million.

Note: Estimates are based on 1970 prices.

Source: Directorate of Highways and Bridges and Consultants' Reports, May 1971.

February 1972 TABLE

SYRIA

SECOND HIGHWAY PROJECT

Unit Vehicle Operating Costs (Per km) (SL net of taxes)

Existing Road New Road

1. Damascus-LebaneseBorder

i. Damascus-Zabadani PassengerCar 0.140 0.132 BUS 0.660 0.600 Light Truck (under 7 tons) 0.h80 o.435 Heavy Truck (over7 tons) o.550 o.500

ii. Zabadani-LebaneseBorder

Passenger Car 0.140 0128 Bus 0.660 0.,565 Light Truck (under 7 tons) 0.480 0.415 Heavy Truck (over7 tons) 0.550 09475

2 . Damascus-JordanianBorder

Passenger Car 0.131 0.128 Bus 0.499 0°439 Light Truck (under 7 tons) o.385 0.373 Hea'vyTruck (over 7 tons) 0.416 0.379

3. Tall Kalakh Detour

Passenger Car 0.128 0.120 Bus 0.603 0.51 Light Truck (under 7 tons) 0.431 0.339 Heavy Truck (over 7 tons) 0.503 0,h61

Source: Consultants'Report, May 1971.

July 1971 SYRIA

SECOND >{IGHWAYPROJECT

SensitivityAnalysis of InternalEconomic Returne

(1) (2) (3) (4) (5) Decrease Increase Decrease Increase Expected Expected CombinationCombination Best Construction Construction Traffic Traffic of of Road Estimate Cost by 20% Cost by 20% Grogth 10% Growth 10% (3) and (4)(2) and(5) ------(Percent) ------……-__------_ -----

1. Damascus-Lebanon Border

a) Section 1 Damascus-Zabadani Junction 2h 26 22 23 25 21 27

b) Section 2 Zabadani Junction - Lebanese Border 18 20 16 17 19 15 21

c) Average for both sections 22 24 20 21 2h 19 25

2. Damascus-Jordanian Border 15 17 13 14 16 12 18

3. Tall Kalakh Detour 12 14 10 il 13 9 15

TOTAL PROJECT 18 20 16 17 19 15 21

Source: AppraisalMission, May 1971.

February 1972 TABLE 13

SECONDHIGHWAY PROJECT

Traf.f1c on ProJect Roada - 1970 (AMT) Trucks Trucks Average Under Over Rate of Section Car Bus 7 tons 7 ton8 Total Growth

1. Damascus-Lebanese Border

i.) Damascus-Zabadani Junction section 6,750 3é0 1,35O 540 9,000 Rate of Growth ist ten yrs.(%) 15 6 10 5 13.3 2nd ten yrs.(%) 7 4 8 4 6.8

ii) Zabadani Junotion- Lebanese Border Section 2,080 166 320 582 3,1148 Rate of Growth lst ten yrs.(%) 15 6 10 5 12.2 2nd ten yrs.(%) 7 4 8 4 8.9

2. Damascus-Jordanian Border 1,020 80 640 260 2,000 Rate of Growth ist ten yrs. (%) 10 5 5 6 7.7 2nd ten yrs. (%) 6 h 4 5 5.2

3. Homs-Tartous (Tall-KalakhDetour) 1,045 146 84 815 2,090 Rate of Growth ist ten yrs.(%) 10 4 10 8 9.0 2nd ten yrs.(%) 8 4 8 7 7.5

Source: Directorateof Highways and Bridges,Ministry of Communications May 1971

July 1971

ANNEX A

PROBLEMSENCOUNTERED IN THE FIRST HIGHWAYPROJECT

1. The appraisal of the improvement works of the Damascus-Aleppo- Raqqa road was made on the basis of very inadequate engineeringpreparation. Substantialfurther engineeringstudies were needed before constructioncould start. It took about 15 months for the credit to become effective, after which disagreementsbetween DHB and the French consulting firm CITE on the scope and quality of the studies for the improvementwork caused further delays. From the results of the preliminaryengineering studies, it became evident that the originally envisaged level of improvementof the existing Damascus-Aleppo-Raqqaroad would not be adequate to meet increased traffic demands, and that full reconstruction,including realignments, should be undertaken. This revised scope of work, as well as the need for a realignment of about 90 km along the Euphrates river (where by 1975 the existing road will be submergedby the reservoir to be created by the Tabqa Dam), led to: (a) cost increases from US$8.5 million to about US$25.0 million, (b) the need for a full review of the economic evaluation of the road, and (c) additional delays in the engineeringpreparation. A few months after completion of the new economic and engineeringstudies, the Middle-East crisis discouraged prospectivebidders and necessitatednew prequalificationof contractorsand rebidding.

2. On the basis of the revised engineeringstudies and new cost estimates, the Government proposed and the Associationagreed to the following changes in the project:

(a) to include two major realignmentsïn the Damascus-Aleppo- Raqqa road;

(b) to confine credit financing to three contracts (the section under the fourth contract will remain in the project, but will be financed entirely by the Government);

(d) to reduce the Association'sparticipation from 50% to 30%.

3. Constructionworks started in early 1968; contractshave been awarded for works on the four sections into which the road was divided and works are now well under way; they are scheduled for completionby late 1973. AhNEX B

SECONDHIGHWAY PROJECT

Schedule of Estinated Disbursemente

IBRD/IDA Fiscal Year Cumulative Disbursement and Qarter Ending at end of Quarter (US$ '000)

Decamber .31, 1973 500 Harch 31, 1974 1,300 June 30, 1974 2,300

Septeaber 30, 1974 3,000 December 31j 1974 3,700 March 31, 1975 4.,400 June 30, 1975 5e200

September 30, 1975 6,000 Decembbr 31, 1975 6,800 March 31, 1976 7,600 June 30, 1976 8,400

1976/77

September 30, 1976 9,200 December 315 1976 10,000 March 31, 1977 11,000 .une 30, 1977 12,000

September 30, 1977 12,500 December 31, 1977 13,000 March 31, 1978 13,500 June 30, 1978 13,800

Source: Directorate of Highways and Bridges - Nimistry of Conmunications and Appraisal Nission, NaY 1971.

February 1972. SYRIA SECOND HIGHWAY PROJECT

ORGANIZATION CHART OF THE MINISTRY OF COMMUNICATIONS AND OF THE DIRECTORATE OF HIGHWAYS AND BRIDGES

| MINISTEROF COMMUNKCA7,N1, 1 SPCA 'GNCIES

G E N E R A L D I R E C T O R A T E S

ADMINISTRATION ACCOUNTING |PLANNING | | VRANSPORTANO HIGHWAYS AND LVE~~~~~~~~~~ BRID3GES

ADVISERS-

D I R E C T O R A T E S

MAJOR SUPERVISION CONTROLOF SPECIAL BRIDGES LABORATORY DESIGN 0 DTORKSRI EQUIPMENT IANCAONTRNCS S FIELD OFFICES 1T GS~~~~~~~~~~~~~~ 1 1 C O N T~~~~~~~~WO STUDIESR A C

STATISTICSAND THIRTEEN DISTRICT TRAFFICCOUNTS OFFICES OFFICE FIELD

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