FiLE COPY RESTRICTED Report No TO- 533a

Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations They do not accept responsibility for its accuracy or completeness The report may not be published nor may it be quoted as representing their views

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized

APPRAISAL OF

A HIGHWAY ENGINEERING PROJECT

MALAWI Public Disclosure Authorized

September 6, 1966 Public Disclosure Authorized

Projects Department CURRENCY EQUlVALENTS

Currency Unit - Malawi Pound (ME:)

U S $1 = ME 357 ML 1 = U S $2 80 ML6 1, 000 000 = U S $2, 800, 000

FISCAL YEAR

January 1 - December 31

WEIGHTS & MEASURES English MALAWI

APPRAISAL OF A HIGHWAY ENGINEERING PROJECT

TABLE OF CONTENTS

Page No.

SUNMARY

I INTRODUCTION 1

II BACKGROUND 1

III TRANSPORT IN MALAWI 2

General 2

Railways 2

Roads 3

Lake Transport 3

Transport Development Plan 3

Transport Coordination 4

IV THE PROJECT h

V ECONOMIC JUSTIFICATIO01\ 6

VI CONCLUSIONS ATD RECOIIEHDATIONS 7

TABLE Design Standards

MAP Malawi, Highway System

This report is based on the findings of a mission in December 1965 to Malawi composed of lIessrs. Soges and Jaycox of the Bank. MALAWI

APPRAISAL OF A HIGHWAY EN1GINEERING PROJECT

SU4ARY

i The Government of Ilalawi has applied for an IDA credit to help finance consulting engineering services in connection with a future road construction program

ii The project (see map) would provide the following services

1 Trunk road (Ml), Zomba - Lilongwe, 168 miles Detailed engineering, design and preparation of tender documents

2 Trunk road (M4), Lilongwe - Zambian border at Mch1in*e, 90 riles Review and revision as necessary of the detailed engineer- ing and cost estimates prepared by the Ministry of Works

3 Blantyre/Limbe - Lilongwe road Engineering and economic route-selection studies

i1i The engineering services in connection with the first two roads would be completed in a neriod of about 12 months Item 3 above was begun in September 1965 and completed in February 1966, the work having been done at the suggestion of IDA to establish thie best route between these towns

IV The total cost of the project is estimated at about US$575,000 equivalent, including contingencies The foreign exchange component is estimated at about 85 per cent, or US4h490,000, and would be financed by the proposed credit The Ministry of Works of the Government would be executing agent

v During credit negotiations, the Government indicated that restric- tions on licensing of road transport between Blantyre/Limbe and Lilongwe have been removed, and assurance was given that no such licensing or other restrictions which might limit the growth of road transport between these two cities would be imposed without prior agreement between the Borrower and the Association The Government is preparing a program for investment in construction or improvement of agricultural feeder roads in areas of high agricultural potential served by the roads to be engineered under the Project, so that implementation of the program can be commenced during the period of construction of the roads covered by the Project

vi The rate of return on the estimated investment required to im- prove the Zomba-Lilongwe road appears to be in excess of 15% However, detailed engineering for this road and the review of the engineering and cost estimates for improving the Lilongwe-Zambian border road are needed to determine accurately the justification and scope of the proposed con- struction project - 1i -

Vil The project provides a suitable basis for an IDA credit of US$490,000 equivalent, whlch would include reimbursement for the route- selection studies already carried out bv consultants The proposed term of the credit is 10 years including a two-year period of grace MALPWI

APPRAISAL OF AN ENGINEERING

CREDIT FOR HIGHIWAY RECONSTRUCTION

1 INTRODUCTIOTN

1 1 The Government of Malawl applied for an IDA credit in February 1965 to help finance reconstruction and bituminous paving of the main north-south trunk road between Zomba (the capital) and Lilongwre, and of the main road between Lilongwe and the Zambian border near M4chinje The Government's appli- cation covered a total of 258 miles of road and was based on a transport sur- vey financed by USAID, and feasibility studies carried out by the Ministry of Works

1 2 An IDA mission visited Malawi in April/May 1965, and raised questions as to the desirability of reconstructing the existing road between Zomba and Lilongwe as proposed In particular, the mission recommended that alternative road locations be investigated by consultants prior to further IDA cons3deration These studies have been carried out by Brian Colquhoun and Partners, UK consultants, the consultants' draft report was presented to an IDA appraisal mission to Malawl in December 1965, and the final report was received in February 1966 The consultants' findings support the Govern- ment's original application Since cost estimates for construction of the roads are not firm, and it will be some months before the justification, scope of project and appropriate amount of a construction credit can be determined accurately, the Government has requested that the Association proceed now with the consideration of a credit for the detailed engineering of the road project

1 3 This appraisal report is based on the Government's application, the engineering and economic investigations of the choice of alternative routes carried out by the consultants at IDA's request, and on the findings of the appraisal mission consisting of Messrs Soges and Jaycox

1 4 This would be the first lending operation by the Bank or IDA in Malawi Malawi, formerly Nyasaland and a terrltory of the Federation of Rhodesia and Nyasaland (1953-1963), was not a beneficiary of any of the Bank loans to the Federation

2 BACKGROUND

2 1 Malawl is a long, narrow, landlocked country of east Africa, situ- ated in the Great African Rift Valley It has an area of about 45,700 sq miles, of which over 20% consists of lakes The land area is about the size of Portugal The country is over 550 miles long and less than 50 miles wide at its narrowest point Altitudes range from about 200 feet above sea level in the south to over 8,000 feet in the north A major Rift Valley escarpment runs the lengtll of the country separating the Lake Malawl plain (1500 ft ) from the plateau to the west (4500 ft ) Most of the main rivers - 2 -

flow from west to north-east into Lake Malawl, with the exception of the Shire River which flows south from the southern end of the Lake and feeds into the Zambezi River These geographical and topogiaphical characteristics present difficult problems for inter-regional transpoitation

2 2 M4alawils population is estimated at 4 million, growing at the estimated rate of 37 per annum, which makes it one of the most densely popu- lated areas in Africa Gross Domestic Product was estimated in 1965 at about T 55 million (0155million) per capita income is very low at about $40 About 40% of estimated GDP is attributed to subsistence agriculture Commercial agriculture contributes about 18% of GDP, the main commercial crops are tea, tobacco, groundnuts, and cotton

2 3 During the decade of the country's membership in the Federation, its economy grew at the low annual rate of 3 5% Per capita income did not grow perceptibly From 1961 through 1964 the economy virtually stagnated due to the political uncertainties associated with the dissolution of the Federation and the achievement of national independence (July 6, 1964) In 1965, the economy apparently registered a 10% growth in real terms, reflect- ing renewed concentration on economic goals and favorable growing weather for major crops

3 TRAMSPORT IN MALAWI

General

3 1 Malawi's transport system consists of 6,200 miles of roads of all classifications of which only about 250 miles are bituminous paved, most only to single-lane width, 290 miles of rail line which forms the domestic section of the rail link to the Indian Ocean port of Beira in Mozambique, three lake service ships and 14 barges which provide freight and passenger transport on Lake Malawl, and light aircraft services to 13 airfields within the country This transport network is generally inadequate to serve the country's transport requirements and hinders economic development

Railways

3 2 The privately owned Malawl Railway is poorly aligned, and its equipment is generally outmoded and badly maintained The railway is saddled by a rate structure designed to subsidize exports by placing high rates on inports The Government, by virtue of its ownership of a special class of shares, has veto powers in the Board of Directors The Govern- ment intends that in due course the rail line from Salima to Balaka will be abandoned, and that a new 110 mile rail link will be built from the main line south of Shire Bridge through Liwonde and east to join the existing Mozambique system at Nova Frelxo, thus linking lalawi and the Indian Ocean port of Nacala As a corollary to these developments, it is proposed to dredge the Shire River from Lake Malawi to Liwonde Liwonde would then replace Chipoka as the main lake port and point of ship/rail transhipment The project road, M1, the main trunk road of the country, also passes through Liwonde, which would become the transport hub of Malawi

Roads

3 3 The road system consists of 3,100 miles of trunk and secondary roads, for which the Ministry of Works is responsible, and 3,100 miles of district roads and tracks under district government administration In the past, road construction proceeded wlthout systematic planning, but procedures are now showing signs of improvement Road standards are generally inade- quate and the road system is also noticeably unbalanced in favor of trunk and secondary roads as compared with feeder roads Alignments are generally poor and there are very few properly engineered designs Improvement of the trunk road system is required and in some specific cases, such as the project sections of road M1, is overdue Feeder roads of minimum standard are re- quired tbroughout the established agricultural areas of the country, now served by little more than limited mileage of cart tracks

Lake Transport

3 4 Freight and passenger service on Lake Malawi is operated by the Malawi Railways Goods traffic is small and freight rates apparently subsi- dize low passenger rates The annual operating revenues of the lake serv- ices cover less than half the operating expenses The small fleet suffers from inadequate renewals and maintenance Lake transport is a logical and cheap form of transport for Malawi, and should be developed in conjunction with plans for developing the potential of the northern parts of the country

Transport Development Plan

3 5 The Development Plan of Mlalawl is merely a list of projects which the Government desires to carry out in the public sector during the period 1965-1969 Neither projects nor expenditures are phased for particular years L 11 million, or 25%1 of total planned public investment, is budgeted for road development, of which only about b 250,000 is allocated for feeder roads The expenditure on feeder roads is far below that required and would tend to contiLue the unsatisfactory imbalance of road transport facilities

3 6 The Government is starting the planning of a small scale feeder road program, but a broader approach should be made if feeder roads are to make, within this decade, the contr3bution which they should to the develop- ment of the economy Timely execution of such roads would increase the traffic on the roads included in this engineering project, although it is not essential to their justification During credit negotiations, the Govern- ment agreed to prepare, in consultation wlth the Association, a program for investrent in construction or improvement of agricultural feeder roads in areas of high agricultural potential served by the roads to be engineered under the Project, so that implementation of the program can be started during the period of construction of the roads covered by the Project Transport Coordination

3 7 The IMalawl Government and its ptedecessors have followed a policy of railway protection through road transport licensing restrictions between Blantyre and Lilongwe, thus forcing a good portion of through traffic between these cities to use the railway and trans-ship at Salima The basic aim has been to insulate the ral1way rate structure, which subsidizes exports and therefore has been deemed by the Government to be in the national interest However, this policy is inconsistent with the Government's present plans for developing the road system The IDA mission has discussed the need for removal of road licensing restrictions between Blantyre and Lilongwe as a condition of any subsequent lending for road construction During credit negotiations, the Government confirmed that previous restrictions on licensing of road transport between Blantyre/Limbe and Lilongwe have been removed, and assurance was given that no such licensing restrictions or other regulatory measures designed to limit the growth of road transport between these two cities will be imposed without prior agreement between the Borrower and the Association Removal of these restrictions may necessitate the phasing out of the Balaka-Salima section of the railway which nolw operates at a substantial loss despite protection

4 THE PROJECT (See ilap)

4 1 The project consists of the services of engineering consultants for (1) the detailed engineering, incluaing design and preparation of tender docu- ments, for the section of the trunk road Ill between Zomba and Lilongwe via Ncheu and Dedza, (2) review, and revision as necessary, of the detailed engi- neering and cost estimates already prepared by the Ministry of Works for the trunk road M4 between Lilongwe and the Zambian border, and (3) reimbursement to the Malawi Government of the cost of engineering and economic studies carried out by consultants at the request of IDA on the choice of alternative road locations between Blantyre/Limbe and Lilongwe, retroactively to December 1, 1965 Item (1) also includes retroactive payments to December 1, 1965 for the geometric design by consulting engineers of a section of the road between Ncheu and Dedza The consultants engaged for the detailed engineering of the entire road from Zomba to Lilongwe will incorporate the results of this geometric design into the detailed engineering and will be responsible for checking its accuracy and consistency

4 2 Ill is the main north-south trunk road of the country linking Blantyre-Limbe, the commercial center of the country in the Southern Region, with Zomba, the capital, and Lilongwe and points north via the district centers Ncheu and Dedza along the 1Mozamblque border Ml from Blantyre-Limbe to Zomba is already being improved and the bituminous pavement is being widened from its present single-lane width to two-lane width and therefore is not part of the present project From Zomba to Liwonde (31 5 miles) the road is presently s3ngle-lane bitumlnous paved, vertical and horizontal alignment is generally poor From Liwonde to Lilongwe (136 miles) the road is gravel surfaced or unpaved Through the rugged escarpment section between Ncheu and Dedza the road is winding, badly aligned, and difficult to maintain A sur- vey and preliminary engineering has already been made by the consultants as - 5 -

part of the route-selection study, a more detailed survey, complete soil studies, estimation of quantitLes, preparation of detailed designs, cost estimates and bidding documents remain to be done as part of the project

4 3 The M4 road is the eastern extension of the Zambian Great East Road that joins Ill at Lilongwe This road is a good gravel surfaced road through flat to gently rolling country on the plateau that extends from the escarp- ment into Zambia Detailed engineering and cost estimates have already been prepared for this section of road by the Roads Department of the Mlinistry of Works and would be made available for review and revLsion as necessary by the consultants

4 4 The design standards to be used are based on a comprehensive study by the consultants of standards used in Malawi and neighboring countries and are considered appropriate for the traffic these roads will be required to carry Design speeds range from 60 mDh to 40 mph with maximum permissible grades of 8% The pavement structure between Zomba and Lilongwe will be com- posed of a granular sub-base and base with a two-lane bituminous surfacing Detailed design standards are shown in Table 1

4 5 The Government intends to appoint its previous consultants, Brian Colquhoun and Partners, to carry out the engineering and economic services to be provided under the project The consultant's terms of reference and proposed contract have been finalized to the satisfaction of IDA

4 6 The mission's estimate of the project cost is given below, item (3) indicates the actual cost of studies already completed

Total Cost

1S000

1 Detailed engineering, includinig design and preparation of tender documents for the Zomba-Lilongwe road section 145

2 Review and completion of detailed engineer- ing and checking and revision as necessary of the cost estimates for the Lilongwe- Zambian border road section 5

3 Reimbursement to the lHalawi Government for engineering and economic studies on the choice of alternative road locations between Blantyre and Lilongwe 28

4 Contingencies, about 20% of uncompleted part of Item 1 27 Totals, E 1,000 205 (US$1,000 equivalent) (575) - 6 -

The foreign component is estimated at 85% of total cost, or $490,000 equiv- alent, and will be financed under the proposed credit

4 7 The consultants' preliminary estimates for the cost of the future construction project of the road between Zomba and Lilongwe, including right of way, engineering, construction, and supervision, amount to about $11 million equivalent, which is substantially higher than the Government's estimate of $7 million equivalent in its application in February 1965 The project appears to be economically justified at this higher cost (see para- graph 5 2 ) The foreign exchange component of the construction cost is estimated at about 70%, but it is understood that the Government intends to request IDA to consider financing a higher percentage of project costs The ability of Malawi to finance an appropriate share of the construction is examined in the Economic Report

4 8 Detailed engineering and the preparation of tender documents for the entire Zomba-Lilongwe road would take about 12 months A first section would be ready for tender, and construction could begin in advance of the time when engineering of all road sections is complete From an economic, financial and technical point of view, it is generally undesirable to disrupt the logical continuity of design and construction of justified road projects A disruption of this sort might result in Malawi if the processes of appraLsal and negotiation for the future construction project were to await the comple- tion of all detailed engineering, since the Government is not in the financial position to make substantial expenditures or contractual commitments without guarantee of external financial assistance This matter was considered during negotiations, and the consultants' terms of reference were drawn up to include a schedule for the eng3neering works that will provide suffici- ently accurate cost estimates to enaole IDA to appraise the Zomba-Lilongwe road construction project somewhat in advance of completion of all the engineering for the entire road

5 ECONOMIC JUSTIFICATION

5 1 The Blantyre/Limbe-Zomba-Lilongwe road (Ml) is the most important trunk connection in Malawi Improvement of the Zomba-Lilongwe section of this road is of high priority The consultants' engineering and economic studies recommend that the road should be located along its existing align- ment via Ncheu and Dedza This recommendation is based on construction cost estimates, traffic flow analyses including origin and destination surveys, and physical investigations of possible alternative routes The study is conclusive as to the choice between alternative solutions While certain of the consultants' assumptions as to vehicle operating costs, traffic growth rates, and road maintenance costs are open to question, these factors have been applied in a consistent fashion and their adjustment does not alter the choice of routes

5 2 All sections of Ill between Zomba and Lilongwe have an average daily traffic of over 200 vehicles per day with heavy goods vehicles forming on the average about 33% of total traffic After the improvement of Ml, additional goods traffic would probably be diverted from the ICame-M4atope- - 7 -

Blantyre road Traffic will also be diverted to the road from the railway between Balaka and Salima which is to be phased out Normal traffic growth has been at the average annual rate of between 7 and 9%, despite a four-year period of economic slump On the basis of preliminary construction cost estimates and the mission's rough estimate of vehicle operating costs and traffic composition, the economic rate of return for the construction project Zomba-Lilongwe appears to be in excess of 15%. This is considered satis- factory and justifies proceeding to detailed engineering at this time

5 3 The Lilongwe-Zambian border road (M4) has a lower average daily traffic of about 100 vehicles per day, of which about one-third are trucks Since the road is of good gravel construction, it may not be justified to im- prove it at this time A decision as to whether or when the road should be improved cannot be reached, houever, until firm cost estimates are available, these will be provided under the present project Substantial data on traf- fic, local agricultural production and potential, and vehicle operating costs are already available, which could be developed or supplemented to the extent required by an IDA mission in the course of its appraisal of the construction project

6 CONCLUSIOITS AND REC0MAENDATIONS

6 1 The proposed engineering project is well conceived and will provide the detailed design and cost estimates for reconstructing the most important trunk road in Malawi, Mll from Zomba to Lilongwe, whicn is a high priority project and will greatly improve road transport The project will also pro- vide detailed cost estimates for the Lilongwe-Zambian border road (M4) on the basis of which the economic justifLication and priority for improvement of this road can be judged Engineering consultants, employed by the Ministry of Wlorks, iill carry out the project

6 2 The project provides a suitable basis for an IDA credit in the amount of $490,000 equivalent The proposed term of the credit is 10 years including a two-year period of grace

September 6, 1966 TABLE 1

MV4ALAWI

APPRAISAL OF AN ENGINEERING CREDIT FOR HIGFWAY RECONSTRUCTION

DESIGN STANDARDS

Terrain

Flat Rolling MVountain

Width of right of way (feet) 200 200 200

Design speed (m p h ) 60 50 40

Stopping sight distance (feet) 475 350 275

Minimum radius, horizontal, (feet) 1,150 800 500

Maximum grades (percent) 5 6 8

Bituminous surfaced width (feet) 22 22 22

Roadway width, general (feet) 32 32 32

Roadway width on embankments higher than 5 feet (feet) 36 36 36

Pavement type Granular subbase and base with double bituminous surface treatment

Pavement design wheel load 9,000 lbs equivalent

Structures Width, carriageway (feet)

Span less than 30 feet Equal to roadway width Span more than 30 feet 24 24 24

Width, footpath (feet) 2 x 2

Loading AASHO H20-S16 Aundum t A4 ZA NAN I

, BDeepSoy5 t/t Sale> e' - z . } _ ; 0S z S F n A l y w / s I Zy 5 o, t\'

T sot.} mb / ( S ~~/SOUTH N

R-~~~~~~~~~~~~~~~~-

HIGHWAY SYSTEM R _ rARA_ 0 tN-

9 ~~ ~, ~ { J p koo - _ t t

020 0x W / t

----- Othe road og A

API196 Prj. roa fo engio. IBR 169761

Aleet,era loa oe's" Jv G o o ot5

----- Pootbed road5 ayot t o

-\ Ercarpmknt

APRIL 1966 IBRD 1697R1