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Sixth Highway Project LO8,t 6V0-CO FILECOPY ItRESTRICTED Repor No. PTR-44a Public Disclosure Authorized This reportwas prepar*4for use within the Bankand its Afliated organizations. Theydo not acceptresponsibility for its occuracyor compless. Thereport may not be publishednor may It be quotedas representingtheir views. INTERNATIONAL BANK FOR RECONSTRUCIION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized APPRAISAL OF THE SIXTH HIGHWAY CONSTRUCTION PROJECT COLOMBIA Public Disclosure Authorized April 28, 1970 Public Disclosure Authorized Transportation Projects Department CURRENCYEQUIVALENTSs February 1970 Currency Unit - Peso (pa.) U.S. $1.00 = Ps. 18.00 U.S. $1 million - Ps. 18 million Ps. 1 million - US$55,555 FISCAL YEAR January 1 - December 31 UNITS OF WEIGHTSAND HEASURES: Metric Metric: British/U.S. Equivalents 1 meter (m) - 3.28 feet (ft) 1 kilometer (km) - 0.62 mile (mi) 1 square kilometer (km2 ). 0.386 square mile (sq. mi) 1 metric ton (m ton) 1.1 US short ton - 0.98 long ton ABBREVIATIONSUSED IN THE REPORT: ADT - Average Daily Traffic CNR - Colombian National Railroads DANE - NationalDepartment of Statistics INTRA - National TransportInstitute MOP - Ministry of Public Works TAMS - Tippetts-Abbett-NkCarthy-Stratton (ConsultingEngineers, U.S.) COLOMBIA APPRAISAL OF SIXTH HIGHWAY PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ............. ..... ,............. i-i 1. INTRODUCTION .. ......... 2. BACKGROUND INFORMATION.. *........... 2 A. General ............ .. 2 B. The Transportation Sector .3 C. Transport Coordination. 5 3. THE HIGHWAY SECTOR ........................ 8 A. Highway Network . .8 B. Highway Administration . ........ 8 C. Highway Planning and Financing. 9 D. Highway Engineering . .10 E. Highway Construction. 10 F. Highway Maintenance .... .. .... ... 11 G. Characteristics and Growth of Road Traffic 11 4. THE PROJECT. .... 12 A. General Description.. ... 12 B. Bridge Construction . 12 C. Road Reconstruction and Improvement . 13 D. Consulting Services for Supervision. 13 E. Cost Estimates and Financing . .14 F. Execution ..... ............... 17 5. ECONOMIC EVALUATION .. 18 A. General ... 18 B. The Project Roads and Bridge. 19 6. RECOMMENDATIONS . .21 This report was prepared by Messrs. Migliorini (engineer) and Shields (eco- nomist) on the basis of an appraisal mission during November/December, 1969. TABLE OF CONTENTS(Continued) ANNEXA Bank Lending in the Colombian Transport Sector CHART 1. Organisation of Ministry of Public Works MAP 1. Location of Project Roads and Bridge (IBRD 2792R) TABLES 1. National Highways by District 2. Departmental Roads 3. Consultants Employed in the Project 4. Air Traffic 1964-1968 5. Imports and Exports Through Major Colombian Ports 1958-68 6. Sources of Revenue for 1969-72 Highway Program 7. Past and Projected National Highway Expenditures 8. Ministry of Public Works - Highway Design Standards 9. Vehicle Registration 1958-1967 10. Motor Fuel Consumption, 1958-1968 11. Project Design Standards 12. Paving Program 13. Weighted Vehicle Operating Costs on Good Paved Road Over Level Terrain 14. Operating Cost Coefficients for Different Highway Conditions COLOMBIA APPRAISALOF THE SIXTH HIGHWAY PROJECT SUMMARY AND CONCLUSIONS i. The Bank has been closely associatedwith highway developmentin Colombia since 1951, and the proposed loan will continue the upgrading of the national highway system. The projectwill include a major highway bridge, the paving of 1,618 Km of highway, the constructionof 9.5 Km of highway and consultingservices for constructionsupervision. The comple- tion of this paving program, which will add over 30% to the existing paved network (Tables 1 and 2) will provide, for the first time, paved links between all the major inland cities of the country and their.respective ports. The program will upgrade most of the heavier trafficked, presently unpaved, sections of the national network. ii. The total cost of the project, including contingencies,is es- timated at US$62 million equivalent. The Bank loan of US$32.0 million equivalentwill finance the estimated foreign exchange cost of construc- tion and 50% of the cost of consultants' services. The remaining funds will be provided by the Government. The proposed participation in con- sultants' costs entails local currency financing of about US$0.8 million equivalent. iii. The project will be the sixth highway project financedby the Bank in Colombia since 1951. Bank/IDA financing has totalled $103.55 million equivalent. The Bank has also assisted the railways in Colombia, having provided loans totalling $94.6 million equivalentover the same period. The most recent highway loan was made in 1968 and is still under execution;progress is in general satisfactory,although constructionis rather slower than expected. The Governmenthas, during negotiations, given further assurancesregarding reorganizingthe Ministry of Works, which was initiated under the 1968 loan. iv. Consultants (mainly local, supplementedby US firms) have been responsible for the detailed engineering of the project. The same consult- ants will assist the Government in prequalifying contractors, analysing bids and supervising construction. The cost estimates are considered accurate and adequate contingencies have been included. v. The project is technically and economically sound. The economic rates of return for the differentworks range from 10% to 25%. vi. Constructioncontracts have been, or will be, awarded on the basis of international competitive bidding. Execution of the project will be the responsibility of the Ministry of Public Works. - ii - vii. The possibilityof imposing tolls on Barranquillabridge traffic has been raised by the Government. The Governmenthas agreed that, upon completion of the bridge, a study based on variationsin rates will be undertakento test the effect of different levels of tolls on bridge traffic. The Governmentwill subsequentlyagree with the Bank on the criteria to be employed in determiningthe structure and level of tolls to be charged. These criteria will be consistentwith achieving the economic benefits from the constructionof the bridge which were forecast in the feasibility report. viii. The project provides a suitable basis for a Bank loan of US$32.0 million equivalent. An appropriate term for the loan would be 25 years, including a four year period of grace. COLOMBIA APPRAISALOF THE SIXTH HIGHWAYPROJECT 1. INTRODUCTION 1.01 The Governmentof Colombiahas requesteda loan to help finance a project (see Map) costing about US$62 million equivalent including (a) the constructionof a major highway bridge, (b) the paving of 1,618 km of national highways, (c) the constructionof 9.5 km of multi-lanehighway and (d) consulting services for the supervision of the above works. 1.02 The Bank has been closely involved with the improvement of Colom- bia's transportation facilities since 1951, when it made a loan for the emergency rehabilitation of an important part of the national highway sys- tem. It has since made four other loans and IDA has made one credit for highways, and, in all, US$103.55million has been provided for this purpose as follows: Loan/Credit Date Signed Amount Loan 43-CO 1951 $16.5 million fully disbursed Loan 84-CO 1953 $14.35 million fully disbursed Loan 144-CO 1956 $16.5 million fully disbursed Loan 295-CO 1961 $19.5 million fully disbursed Credit 5-CO 1961 $19.5 million fully disbursed Loan 550-CO 1968 $17.2 million; $6.0 million disbursedas of 3/31/70 TOTAL US$103.55million 1.03 The history of Bank lending in the transportsector is described in Annex A. In brief, the Bank has tried to help create a viable national highway system and a healthy highway administration;the former aim has to a large extent been achieved,and present investmentis mainly for improving the network to meet increasingtraffic demands. As regards the administra- tion of highways, the Ministry is in the process of reorganizingitself followingconsultants' recommendations; this reorganizationis being assisted under the most recent highway loan (550-CO in 1968) but progress has been uneven. During negotiations,the Governmentconfirmed that it would continue to implementthe Ministry reorganization. Progress otherwise under Loan 550-CO has been satisfactory although construction was hampered somewhat by bad rains in 1969 and is a little behind schedule. -2- 1.04 This report was prepared by Messrs. Migliorini (Engineer) and Shields (Economist) on the basis of feasibility and final engineering studies prepared by Colombian consultants INGETEC (in association with TAMS, U.S.), INTEGRAL(in association with Gannett, Fleming, Corddry and Carpenter, U.S.), and several other Colombian consulting firms (see Table 3), and on the basis of an appraisal mission which visited Colombia in November/December 1969. 2. BACKGROUND A. General 2.01 The Republic of Colombia occupies an area of more than one mil- lion km2 , roughly equivalent to that of all six members of the European Economic CormAunity. It is bordered by Venezuela and Brazil to the east, Peru and Ecuador to the south and Panama to the northwest. It has coasts on both the CaribbeanSea and the Pacific Ocean. With 21 million people, it has the third largestpopulation in South America and the growth rate of 3.3% p.a. will shortly make it secoud to Brazil. Urban populationis now about 50% of total populationand is growing much more rapidly than the national average. 2.02 Because of its topography,with altitudesranging from sea level to almost 6,000 a, climate and vegetation vary widely.
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