The World Bank

Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 3987

PROJECT PERFORMANCE AUDIT REPORT Public Disclosure Authorized

TOGO SECOND HIGHWAY PROJECT CREDIT 450-TO) Public Disclosure Authorized

June 30, 1982

Public Disclosure Authorized Operations Evaluation Department

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

FOR OFFICIAL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

TABLE OF CONTENTS Page No.

Preface...... i Basic Data Sheet...... ii Highlights...... iv

PROJECT PERFORMANCE AUDIT MEMORANDUM

I. BACKGROUND - ...... -...... 1

II. PROJECT RESULTS ...... 2

III. ISSUES ...... 8

IV. CONCLUSIONS ...... 13

Annexes

A. Comparison of Appraisal Cost Estimates and Actual Cost...... 14 B. Alternative Main Routes of Access for Upper Volta, Niger and Mali...... 15 C. Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1972...... 16 D. Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1976...... 17 E. Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1980...... 18 F. Borrower Comments...... 19

PROJECT COMPLETION REPORT

I. Introduction...... 21 II. Project Preparation and Appraisal...... 21 III. Project Implementation...... 25 IV. Institutional Development...... 29 V. Economic Reevaluation...... 30 VI. Performance of the Borrower...... 32 VII. The Role of the Association...... 33 VIII. Conclusions...... 33

Table of Contents (cont'd.)

Page No.

Tables

1. Expected and Actual Project Implementation and Costs...... 34 2. Expected and Actual Schedule of Disbursements...... 35 3. Withdrawal of the Proceeds of the Credit...... 36 4. Economic Reevaluation of Civil Works...... 37

Chart: Togo-Organization of the Public Works Department...... 38

Map - 1 -

PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

PREFACE

This report presents a performance audit of the Togo Second Highway Project, for which the Executive Directors approved Credit 450-TO in the amount of US$8.7 million on November 27, 1973. The credit was closed, fully disbursed, in December 1980. The report consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) prepared by IDA's Western Africa Re- gional Office. The Borrower provided material for the PCR to a mission undertaken by the Region in April 1979.

The bases for the PPAM comprised: the PCR, discussions with IDA staff, the transcripts of the Executive Directors' meetings at which the project was considered, and the project files and documents. OED staff did not visit the country.

The audit agrees with the PCR on many aspects. However, it points out the shortcomings in the methodology used for the economic analysis of the two roads actually completed, the appraisal underestimation of traffic development on one of the roads, the variations in estimates of vehicle operating cost savings, and the failure to achieve the "in-house" training objectives of the project.

The draft report was sent to the Borrower for their comments in the normal course; their comments are attached as Annex F to the Project Perfor- mance Audit Memorandum and have been reflected therein.

- ii -

PROJECT PERFORMANCE AUDIT BASIC DATA SHEET

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

KEY PROJECT DATA Appraisal Actual or Item Estimate Reestimate

Total Project Cost (US$ million) 12.5 12.9/a Overrun () - 3 Credit Amount (US$ million) 8.70 8.70 Disbursed and Outstanding: - 8.70 for Second Highway Project 8.36 for Third and Fourth Highway Projects/b - 0.34 Project Completion Date 12/31/76 06/30/79 Proportion of Time Overrun (%)- 150 Proportion of Main Project Elements Finished by Original Project Completion Date (%) - 80 Economic Rate of Return (%)--Weighted Average 18 23 Blitta-Sokode Road 19.5 25 Sokode-Tchamba Road 13 15

Cumulative Estimated and Actual Disbursements (US$ million)

FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81

Estimated 0.30 4.50 7.00 8.70 8.70 8.70 8.70 8.70 Actual 0 0.60 4.00 7.70 8.20 8.30 8.50 8.70 Actual/Estimated (%) 0 14 57 89 95 96 98 100

/a The project was scaled down. The Credit Agreement was amended in March 1976 to reflect: (a) the deletion of construction of the Agou-Notse (formerly Nuatja) Road from the project, and (b) the transfer of the financing of part of the costs of improvement of the Tchamba-Kambole Road by force account to the Government's Budget.

/b A small amount remaining under the Second Highway Project was applied to expenditures incurred under the Third and Fourth Highway Projects.

-iii -

OTHER PROJECT DATA

Item Original Plan Actual

First Mention in Files - 04/71 Negotiations Date 03/15/73 10/15-19/73 Board Approval Date 10/09/73 11/27/73 Credit Agreement Date 12/73 12/28/73 Effectiveness Date 04/29/74 04/19/74 Closing Date 06/30/77 12/30/80fl/a Borrower Republic of Togo Executing Agency Ministry of Transport, Public Works, Mines and TelecommunicationsL-b Fiscal Year of Borrower 01/01-12/31 Follow-on Project Name Third Highway Project Credit Number 693-TO Amount (US$ million) 10.0 Credit Agreement Date 04/01/77

MISSION DATA

Month/ No. of No. of Staff Date of Item Year Weeks Persons weeks Report

Preappraisal 09/72 0.7 2 1.4 10/72 Appraisal 11-12/72 2.0 2 4.0 11/73 Supervision I 03/74 0.7 2 1.4 05/74 Supervision II 05/75 0.9 1 0.9 06/75 Supervision III 10/75 1.4 1 1.4 10/75 Supervision IV 10/76 1.6 1 1.6 12/76 Supervision V 05/77 1.4 1 1.4 06/77 Supervision VI 12/77 1.4 2 2.8 01/78 Supervision VII 05/78 1.1 1 1.1 06/78 Supervision VIII 11/78 1.0 1 1.0 01/79 Supervision XI 03/79 1.1 2 2.2 04/79

COUNTRY EXCHANGE RATES

Name of Currency (Abbreviation) CFA franc (CFAF) Year: 1973 (November) Exchange Rate: US$1 = 210 1974 ) US$1 = 241 1975 ) US$1 = 214 1976 ) US$l = 239 1977 ) (Average) US$1 = 246 1978 ) US$1 = 226 1979 ) US$1 = 213 1980 ) US$1 = 211

/a Final disbursement made on 11/03/80. /b Now known as the Ministry of Equipment, Posts and Communications.

- iv -

PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

HIGHLIGHTS

Credit 450-TO for US$8.7 million supported reconstruction and maintenance programs to reduce vehicle operating costs on roads in Togo. The project primarily addressed the rehabilitation of a section of the main south-north highway (78 km) and the construction or improvement of two associ- ated secondary roads (126 km) so as to facilitate the transport of agricultural products, thereby stimulating agricultural production. However, when bids indicated that costs of the civil works would be 30% higher than estimated at appraisal because of worldwide inflation after 1973, construction of one of the secondary roads was deleted from the project and part of the improvement of one of the two sections of the other secondary road was transferred to the Government's Budget. The design standards of the road to be rehabilitated were improved during implementation, and the resulting cost increases were borne by the Government.

The project objectives as regards civil works generally were achieved. However, less success materialized in regard to institution building and "in-house" training. Although some organizational improvements did take place, technical assistance in road maintenance, continued from the First Highway Project, yielded only very limited results. "In-house" training related to road maintenance and to transport planning and coordination also produced less than expected.

The project had a 150% time overrun because of the late start and improvements in design of the civil works, the delay in appointment of an expert for technical assistance in transport planning and coordination, and the delay in installation of equipment in the soils laboratory. However, the bulk of the project (equal to 96% of costs) was finished within six months of the original Closing Date. The actual cost of the smaller project (US$12.9 million) is 3% above the appraisal estimate for the entire project (US$12.5 million). However, it is noted that the actual cost is understated because some of the costs of the improvement work transferred to the Government's Budget has not been taken into account (para. 18). The weighted average economic rate of return is 23% on reevaluation, in contrast to the appraisal estimate of 18%.

The following points are of particular interest:

- the methodology of economic analysis in the appraisal did not lead to the selection of the best solution from a wide range of alternatives (paras. 33-38);

- the forecast traffic volumes were seriously underestimated (paras. 39-41 and PCR, paras. 5.06-5.07 and Table 4); - v -

- the lack of origin and destination information and of a wide regional view of transit traffic prevented an adequate analysis of the effects of traffic on the economics of the-project (paras. 42-43);

- in making forecasts of international transit traffic, the availa- bility of alternatives is an essential consideration and the selection among various routes is motivated by numerous considerations in addition to time and cost (paras. 44-46);

- the substantial variations in the method of estimating vehicle operating cost savings, which were a vital element in the economic justification of several highway projects supported by IDA in Togo, made project monitoring and reevaluation difficult (paras. 47-48); and

- the "in-house" training objectives did not succeed because prerequisite arrangements were not in place (paras. 49-50). - 1 -

PROJECT PERFORMANCE AUDIT MEMORANDUM

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

I. BACKGROUND

The Transport System

1. Togo's road transport system, which carries 90% of the country's freight traffic, consists of: a south-north highway through the interior linking Lome, the capital city and main port, with the Upper Volta border; an east-west coastal highway comprising part of the Accra (Ghana)-Lagos (Nigeria) highway; and secondary and feeder roads connecting with these two highways. Also focussing on Lome is the railway system, which includes a south-north line extending 276 km to Blitta and two shorter lines -- one to Palime in the southwest and one to Aneho (formerly Anecho) on the eastern coast.

IDA Support for Highways

2. The First Highway Project (Credit 131-TO of October 1968 for US$3.7 million), which OED has already evaluated,-/ addressed the improvement of road maintenance operations, training of personnel, and road preinvestment studies in the 1968-73 period. The studies covered, inter alia, the upgrading of four road sections, which was subsequently included in the Second Highway Project (Credit 450-TO of November 1973 for US$8.7 million), the subject of this audit.

3. The main component of the Second Highway Project, which was estimated to cost US$12.5 million at appraisal in November/December 1972, was to comprise rehabilitation of the 81 km Blitta-Sokode Road (representing about 50% of the estimated cost). This was to be an important step both in providing a continuous two-lane paved road to Upper Volta, Niger, and Mali and in improving connections between centers of economic activity within Togo. The next largest components (each about 14% of the estimated cost) were to consist of improvement of the Sokode-Tchamba-Kambole Road, linking the agricultural area around Kambole with the south-north axis, and construction of the Agou- Notse (formerly Nuatja) Road, connecting the Lome-Palime axis and the south- north axis. The remaining components, described in detail in the PCR (paras. 2.02-2.11), included technical assistance for the road maintenance program and for transport planning and coordination as well as preinvestment studies.

4. After these two projects, IDA supported the Third Highway Project (Credit 693-TO of April 1977 for US$10.0 million), the Feeder Roads Project (Credit 810-TO of June 1978 for US$5.8 million), and the Fourth Highway Project (Credit 1139-TO of October 1981 for US$20.0 million). These projects are generally providing for road construction, pavement strengthening, or maintenance; continued technical assistance; and preinvestment studies.

1/ PPAR No. 1649, Togo First Highway Project, June 24, 1977. - 2 -

II. PROJECT RESULTS

Implementation

5. Rehabilitation of the Blitta-Sokode Road was completed four months behind schedule in May 1977. This time overrun was caused partly by the late start of work and partly by the Government's decision, with IDA's agreement, to improve the road design standards. The improved standard provided for cement stabilization of the laterite base course (para. 39)-1/ and widening to o-lane standards of two single-lane bridges between Lome and Kante (para. 37).- The reasons given by the PCR (para. 3.02) for this extra expenditure were that:

(a) the Government wished to avoid any risk of pavement weakness as experienced on some sections of the then recently constructed Lome-Sokode Road;

(b) the traffic on the Blitta-Sokode Road already produced faster growth rates than expected at appraisal and;

The decision to make these improvements was appropriate in light of the continuing traffic growth (paras. 39-41).

6. Improvement of the Sokode-Tchamba Road was finished in January 1977, about eight months later than planned. The delay was the result of the Government's decision to widen all bridges to two lanes. IDA did not consider that traffic was sufficient to justify this widening; nonetheless, the Govern- ment decided to bear the cost of the additional work (PCR, para. 3.03). On the Tchamba-Kambole Road, reconstruction of eight small bridges was completed under the project in June 1975, while road improvement work was executed by force account outside the project by mid-1979.

7. The other civil works components of the projects were not carried out as planned. Construction of the Agou-Notse Road was postponed (PCR, para. 3.01). In addition, some improvement work on the Tchamba-Kambole Road was executed by force account, instead of by contract as expected at appraisal, with financing from the Govern ent's Budget rather than under the project (PCR, para. 3.04 and para. 18).37

1/ The Government financed the US$1.1 million cost. 2/ The project supported the US$190,000 cost. 3/ The Credit Agreement was amended accordingly in March 1976. - 3 -

8. According to the Audit Memorandum for the First Project, the road maintenance program that had been initiated was not successful because of the lack of coordination and supervision by the Roads Division (RD) and the uneconomic use of equipment. The Second Project aimed to increase maintenance productivity through reorganization and training. In fact, a major reorganization was carried out in 1975. All regravelling equipment was concentrated in three specialized brigades managed by the RD instead of being scattered through five field subdivisions. The latter continued to carry out routine maintenance. This reorganization helped resolve one of the problems noted in the Audit Memorandum for the First Project -- the use of equipment on public infrastructure projects other than the primary and secondary road networks.

9. The success of this reorganization soon became apparent through the 59% increase in output and 21% decrease in costs experienced in 1975. Perfor- mance was still reasonable in 1976, but costs were sharply higher. By 1977, output was down to the 1974 level and costs were 49% higher than in 1974. This situation was attributed largely to equipment failure, which was intended to be remedied through purchases of new items under the Third Project. How- ever, since 1977, the shortage of funds as a result of the country's general economic problems has been a major difficulty. Expenditure on maintenance has been only about 60% of the road maintenance budget and has been barely increased even in current price terms. To help reverse this shortage of funds, the Credit Agreement for the Fourth Project specifies that the Government will provide for road maintenance expenditures not less than CFAF 750 million in fiscal year 1982 and for each fiscal year thereafter not less than such amount to reflect increases in road maintenance costs and the expansion of the network of paved roads and engineered earth roads. General fiscal matters in regard to the Government of Togo are proposed to be the subject of structural adjustment lending currently under consideration by the Bank Group.

10. Technical assistance and "in-house" training in road maintenance operations continued under the present project by the consultants used for this purpose during the First Project. Four expatriate consultants provided 130 man-months of services from April 1974 to April 1977. However, they did not achieve their objective of establishing a professional cadre of trained staff to take over management of road maintenance operations (para. 49) because two of the four expected Togolese counterparts arrived only in early 1976 and another only in 1977; the fourth never materialized. A major reason for this was the serious shortage of professional staff in the country, partly because of turnover to the private sector (PCR, para. 3.08). Under the Fourth Project, a comprehensive three-year training program is proposed for target numbers of staff.

11. Overseas training under the subject project was more successful. Three of four fellowships were satisfactorily utilized; the heads of the equipment division, the equipment workshop, and the soils laboratory received overseas training for four months, six months, and twelve months, respectively. Further fellowships, both abroad and in Togolese institutions, are proposed under the Fourth Project. 12. Equipment for a new soils laboratory, included under the subject project, was delivered in mid-1978. Owing to delay in construction of the laboratory building, it was not installed until mid-1979. Staff training was included in the Third Project, and the laboratory is expected to carry out all studies needed by the Public Works Department (PWD).

13. The Second Project aimed to improve the organization and operations of the Road Transport Service (RTS), particularly with regard to the collection, recording, and assessment of data concerning the road transport industry. The RTS had been set up in the Ministry of Transport and Commerce (MTC) in 1969 to handle vehicle registration, to study the road transport industry, and to advise the Government on road transport policies. Under the project, a transport economist was to provide 24 man-months of technical assistance to improve operations and to train staff of the RTS. The Government was not able to recruit the expert until the end of 1977, over three years behind schedule. The contract was not signed until December 1978, one year after the start of work. Funds available in the Credit Account were only sufficient to finance assistance for 18 months.

14. The technical assistance was unsuccessful (para. 50). The PCR (para. 3.14) reports that the expert prepared a number of brief notes on transport matters, but did not respond fully to his tasks. Although the counterpart arrived at the same time as the expert, he left before the end of the program and little training effects were felt by RTS staff. The PCR notes that there was lack of cooperation between the RTS and the expert. The frequent changes of Minister in the MTC at this time further contributed to the unsuccessful outcome.

15. Technical assistance in transport planning and coordination was to be continued under the Third Project. However, the function was transferred in June 1980 to a new agency, initially named the Transport Coordina- tion and Policy Unit but eventually designated the General Directorate of Transport (GDT). GDT has wider powers than RTS, which was set up to deal with road planning. It also has been charged with examining the role of the railway. GDT is not yet fully staffed and further technical assistance for it is proposed under the Fourth Project.

16. The survey of 2,000 km of unpaved roads was completed in December 1975 and helped establish priorities for periodic road maintenance. Of these roads, 400 km were included in the Feeder Roads Project.

17. The feasibility study for reconstruction of the paved Tabligbo-Aneho Road was completed in 1975. The consultants went on to complete final engineering and bidding documents by February 1977. Reconstruction of the road to two-lane paved standards was included in the Third Project.

Project Costs and Timing

18. The actual project cost was US$12.9 million, or 3% above the appraisal estimate of US$12.5 million. The actual and estimated costs are not strictly comparable, however, because the project was scaled down after - 5- bids for the civil works indicated that costs would be 30% higher than estimated as a result of worldwide inflation. This is the reason for the post- ponement of construction of the Agou-Notse Road, which later was included in the Third Project, and the transfer of the financing of some of the costs of improvement of the Tchamba-Kambole Road to the Government's Budget (para. 7).!/ The audit considers that certain factors must be pointed out. In the case of items actually executed where meaningful comparisons between actual and appraisal cost estimates are possible, overruns ranged from 3% to 19%. Further, the improvement of design standards for the Blitte-Sokode Road caused about a 15% increase in the road's construction cost. Moreover, the deletion of the Agou-Notse Road led to about a 15% decrease in the estimated project cost and subsequent construction of the facility will be at considerably higher cost (estimated at US$5.3 million in 1980 vis-a-vis US$1.8 million in 1972). Finally, the lack of data on the costs of improvement of the Tchamba- Kambole Road, which were transferred to Government financing, means that the actual cost of the project is understated. An item-by-item comparison of actual and estimated project costs is in Annex A, which the audit prepared to reflect the distribution shown in the Appraisal Report.

19. The PCR (para. 5.03) compares the economic costs on the two major civil works components at appraisal and at completion. This comparison shows that costs more than doubled. The audit notes that there is a discrepancy between the economic costs and the financial costs of the civil works components as estimated at appraisal and in the PCR. The discrepancy is explained by the different treatment of physical contingencies and of price inflation. However, it also is apparent that the difference between the cost estimates at market prices and at economic prices has narrowed between appraisal and the PCR. The audit has no explanation for this discrepancy.

20. The project was completed in June 1979, with a time overrun of 150% vis-a-vis the Project Completion Date of December 1976 specified in the Credit Agreement. However, the bulk of the project (equal to 96% of costs) was finished within six months of the original Closing Date (PCR, para. 3.01). The delays were related to the execution of civil works (paras. 5-6) and of the installation of soils laboratory equipment (para. 12) as well as the technical assistance in transport planning and coordination (paras. 13-14).

Disbursements

21. Disbursement of credit funds began slowly, with no funds disbursed in FY74 and only 14% of the amount estimated at appraisal disbursed in FY75 and 57% in FY76. This was because, although the Credit Agreement was signed in December 1973 and became effective in April 1974, rehabilitation of the Blitta-Sokode Road did not start until April 1975. Improvement of the Sokode- Tchamba Road began four months later.

1/ The Credit Agreement was amended accordingly in March 1976. - 6 -

22. On completion of this project, US$341,984 remained undisbursed.!l The Bank agreed with the Government, on October 31, 1979, to use this surplus for works under the Third and Fourth Projects. Ultimately, the funds financed an extension of the technical assistance services of the road engineer assigned to the Road Planning and Design Office and of the soils technician assigned to the soils laboratory under the Third Project. These experts were to help prepare a study of strengthening the Lome-Tsevie Road (35 km) and part of the Lome-Palime Road (129 km) (PCR, para. 3.15). Strengthening of the former road is included in the Fourth Project.

23. The closing date of the credit was extended from June 30, 1977 to December 31, 1980; funds were completely disbursed in November 1980.

Government's Compliance with Covenants

24. The Government did not comply fully with the covenants in the Credit Agreement. As to the covenant requiring enforcement of dimensions and axle load limits of vehicles, in 1977 the Government did install a weighing station 10 km from Lome on the south-north highway. But the weighing station has not operated effectively since installation because no laws exist to regulate usage. This covenant was repeated in the Credit Agreements for the Third and Fourth Projects; the Agreement for the latter project specifies that the Government will take measures to put an action program into effect by December 31, 1981.

25. The requirement to establish and maintain facilities for the collection of data to assess the technical, economic, and financial aspects of the highway system and of road transport activities was fulfilled to the extent that traffic counts now are carried out regularly on primary highways. But origin and destination information still is completely lacking and informa-, tion on vehicle operating costs is not collected consistently (paras. 39-40). With regard to the covenant requiring all roads to be adequately maintained, the PCR (para. 3.06) indicates that maintenance performance deteriorated after 1977.

26. A covenant also required the Government to consult with IDA before making any major investment in the rail network and to allow IDA to review and comment on a planned study of road and rail development before making any major decisions on railway operations. A study to improve rail operations was to be financed under the Third Project. However, it instead was financed by the African Development Bank and the Canadian International Development Agency. The study was completed in November 1979, after which the Govern- ment and IDA reviewed it. The Government now will prepare and implement a plan to improve railway operations.

1/ It is noted that a surplus of US$277,000 from the First Project was used to finance part of the consultants' services under this project. - 7 -

27. The covenant referred to in para. 26 was related to the objective of ensuring cocdination of road and rail transport policy and to the establishment of an agency for that purpose (paras. 13-15). It is noted that the Government is anxious to develop international transit traffic through Togo and in 1976 sponsored an international project for regional development of transport infrastructure. Extension of the railway to Niamey was a major element of this international project. But, in view of improving road connections, the viability of such a scheme must be in serious doubt. Coordination between road and rail transport is needed not only in Togo but also in the region as a whole. A similar project exists to extend the Benin railway to Niamey, for which a feasibility study was carried out in 1979. Although the study concluded that such an extension is feasible, a Bank Group review disagreed. A proposal also is under consideration to extend to Niamey the RAN railway, which at present runs from the Port of Abidjan in Ivory Coast to Ougadougou, the capital of Upper Volta. However, if Niger's road connections operate efficiently, Niger traffic would not appear to justify three rail extensions and possibly not even one.

Economic Reevaluation

28. The appraisal estimated the economic return on the rehabilitation of the Blitta-Sokode Road to be in the range of 16%-23%. It stated that the low figure in the range applied to domestic traffic only and the high figure to domestic and international traffic combined. The range of the economic return was clearly derived from the feasibility study, but in that study the range related to low and high estimates of total traffic. The estimate of international traffic in the study (32,000 tons in 1972 to 90,000 tons by 1986), which also was repeated in the Appraisal Report, could not possibly have accounted for a difference of seven percentage points in the economic return. Therefore, the appraisal estimate of the return may be taken as the midpoint of the range, 19.5%.

29. Considering the higher than expected growth in traffic up to 1978, the PCR took actual 1977 traffic counts as a base point and reestimated traffic growth at 10% per annum for 1978 and 1979, 8% per annum for the next 10 years, and 6% per annum for the following 6 years. This compared with an estimated 7% per annum growth rate in the appraisal. No estimates were made for international traffic, presumably because, in the absence of origin- destination information, no data were available. The PCR then applied revised and updated vehicle operating cost (voc) savings, which were slightly lower (in current terms) for light vehicles and 56% higher for heavy vehicles than in the Appraisal Report (paras. 47-48 and Annex B).

30. When the midpoint in the range given in the Appraisal Report (19.5%) is compared with the PCR's estimate (25%), it is clear that, based on the known construction costs,1/ the road has a higher return than at appraisal. Although the estimation of voc savings is not very satisfactory (paras. 47-48), the audit concludes that, if the traffic projections are accepted, the return as recalculated in the PCR may be accepted as reasonable. In fact, the return may be understated since it ignores the known growth in international

1/ Since not all construction costs are available (para. 18), the return may be somewhat overstated. - 8 - traffic involving very heavy vehicles and much higher voc savings for such vehicles (para. 40). The heavier volume of traffic and higher voc savings more than compensated for the increased construction cost of this road. On the other hand, the reevaluated return may be reduced if the higher traffic of heavy vehicles shortens the life of the road by causing shoulder damage, as happened in Benin on a similar 6 m paved road,!/ which will require additional expenditure on repair or reconstruction. While the audit has some reservations on the data and methodology used to calculate the economic returns for the PCR (paras. 33-38 and 47-48), it accepts the results of the calculation.

31. Improvement of the Sokode-Tchamba Road was calculated at appraisal to yield an economic return of 13% based on a traffic level of 110 vehicles per day (vpd) in 1974, growing by 8% per annum for 10 years and 7% per annum thereafter. The PCR (para. 5.07 and Table 4) reports that traffic counts since 1972 have been erratic and in 1978 showed only a slight increase in traffic (115 vpd). It comments, however, that the feasibility study appears to have overestimated traffic in 1972 and that traffic then was only about 75 vpd. If true, this would imply a growth rate of 7% per annum between 1972 and 1978. The PCR reestimated the return at 15%, using 1978 traffic levels and a growth rate of 8% for the first ten years followed by 5% for the next five years. This rise in the return suggests that the higher voc savings (146% to 183% according to type of vehicle) more than compensated for the construction cost increase (173%) and for the lower than expected traffic in the opening year (about 115 vpd as against 150 vpd). Given the apparent inconsistencies in reported traffic figures and voc savings (paras. 37-38), this reestimate is not very satisfactory. But, in the absence of better information, the PCR has had to follow the methodology used in the original feasibility study and at appraisal and the audit accepts it.

32. Considering the rehabilitation of the Blitta-Sokode Road and the improvement of the Sokode-Tchamba Road together, the weighted average economic return for the civil works element of the project is 23% on reevaluation compared with 18% at appraisal.

III. ISSUES

Shortcomings in the Methodology of Economic Analysis

33. In retrospect, the methodology used in the appraisal of the two roads actually completed under the project had certain shortcomings. In the case of rehabilitation of the Blitta-Sokode Road, the "without case" against which to evaluate alternative improvements was not defined realistically. Also, a wide range of alternatives was not considered so as to permit selection of the best solution. As indicated below (para. 34), the methodology used had an effect on the choice of design standards for the road.

1/ PPAR No. 3986, Benin Second Highway Project, June 30, 1982. - 9 -

34. Feasibility and engineering studies for rehabilitation of the Blitta-Sokode Road were included in the First Project. This road had been paved in 1958 to a width varying from 3 m to 6 m, but had deteriorated with the growth of traffic on the country's south-north highway. The feasibility study, completed in 1972, considered two basic alternative solutions, with the third solution being intermediate between the two. The first solution involved rehabilitation of the existing 8 m roadbed, conserving the existing alignment and replacing old single-lane bridges with two-lane bridges. The second solution entailed widening the road to a 9 m roadbed with a 6 m pavement and executing corrections and realignments over 35% of the entire road so as to give uniform characteristics compatible with a design speed of 80 km/hr. The economic rate of return produced by the first solution amounted to 18%-25% and by the second solution, 17%-23%. The intermediate solution had an economic return of 17%-24%.

35. Since the first solution had to be carried out in any case (the consultants estimated that the road would completely deteriorate in two to three years), it would have been more appropriate as the "without case" in the cost-benefit analysis. Then wider alternatives could have been assessed in relation to it, including a 7 m pavement. This solution would have been particularly relevant at higher traffic levels. In fact, the study did considerably underestimate traffic growth, especially of heavy vehicles (paras. 39-40). A similar situation occurred under the Benin Second Highway Project.!/ In this case, a 6 m pavement proved insufficient for an international transit road carrying heavy vehicles. Wear is taking place on the edge of the pavement when wide vehicles have to pass other traffic and continuous routine maintenance must be provided.

36. Even though the project eventually adopted a solution that did not have the highest economic return, the analysis unduly focussed on this criter- ion in choosing among alternative designs. The inappropriateness of this approach is illustrated by the fact that the minimum solution (simple rehabilitation) gave the highest return. This results from the supposed very high voc savings between a "ruined" and a rehabilitated paved road. It is unrea- listic, of course, to assume that the same traffic would use the unrehabili- tated road because such a road becomes unusable and traffic diverts or does not develop. In any event, the critical choice was among the investments beyond those for mere restoration to use.

37. In the case of the Sokode-Tchamba Road, the methodology used for economic evaluation at appraisal placed primary emphasis on traffic analysis. However, the traffic projected for the opening year of the improved road appears not to have been reached; the PCR (para. 5.07) explains that the traffic was overestimated in 1972 and that some traffic growth did occur. In retrospect, it appears that traffic data at appraisal was dubious and that the analysis unduly relied on extrapolation of this dubious data. Instead, greater use could well have been made of origin-destination analyses to gauge developments of various components of total traffic. In addition, it may have been more prudent to use the potential for agricultural production as the

1/ PPAR No. 3986, Benin Second Highway Project, June 30, 1982. - 10 - primary basis for estimating the future use of this road. Under the circum- stances, an in-depth study of agricultural potential and a producer surplus approach rather than a voc savings approach would have provided a better indication of the likelihood of traffic increases and a better basis for judging such design options as widening bridges from one to two lanes (para. 5). Moreover, a study for the whole road from Sokode to Kambole, notwith- standing improvement of the Kambole-Tchamba section outside the project, would have been more meaningful. The objective of improving the road was to develop agricultural potential in the densely populated area around Kambole.

38. The PCR tested the reestimated returns of the two road schemes by sensitivity analysis and found them to still be viable, assuming a lower traffic growth at 5% per annum as opposed to the projected 7%-8%. The sensitivity analysis clearly should have considered higher as well as lower traffic growth.

Appraisal Underestimation of Traffic Development on the Blitta-Sokode Road

39. Actual traffic for the opening year on the Blitta-Sokode Road was considerably higher than forecast in the feasibility study and in the appraisal. The 1972 traffic counts gave an average of 175 vpd, of which 60% were light vehicles, 35% medium trucks, and 5% heavy trucks. Forecasts (low and high) for 1976 were 193 vpd and 220 vpd and for 1986 were 323 vpd and 487 vpd. By 1976, however, IDA's fourth supervision mission noted that traffic was 60% higher than forecast levels and it was correctly decided to strengthen the laterite base course by cement stabilization (para. 5), partly for this reason (PCR, para. 3.02). In 1978, traffic had risen to 430 vpd and the PCR used this as its base year for reevaluating the project. A similar underestimation of traffic development occurred in the case of the Benin Second Highway Project.!/

40. Unfortunately, the data available do not show the proportion of heavy trucks, which may be presumed to be largely international traffic from Upper Volta, Niger, and possibly Mali. The feasibility study estimated traffic (low and high) by 1976 at 14,000 tons to 32,000 tons and by 1986 at 36,000 tons to 90,000 tons, with about two-thirds coming from Upper Volta and one-third from Niger. In fact, the Port of Lome statistics, which are the only reliable source of information on this subject, show that Niger traffic alone reached 93,000 tons in 1980. Upper Volta traffic is estimated at about 36,000 tons.

41. The "Togo Route" has thus captured some Niger traffic from the "Benin Route" and some Upper Volta traffic from the "Abidjan Route." Since the "Togo Route" has been completely paved, it is faster than the "Benin Route," which entails road/rail transfer at the Parakou railhead. The transport time is only 3 days against 15 days. The Port of Lome also offers better services to shippers than the Port of Cotonou since nationalization of most of the latter's port services in 1973. The disadvantages of the "Togo Route" are its slightly longer distance (182 km extra) over the roughly 1,058 km between

1/ PPAR No. 3986, Benin Second Highway Project, June 30, 1982. - 11 -

Cotonou in Benin and Niamey in Niger, somewhat higher charges, steep gradi- ents on some northern road sections, and the need to transit Upper Volta where taxes are levied at the borders. For Upper Volta traffic, the "Togo Route" has a time advantage (2 days against 7 days), if not a cost advantage, over the "Abidjan Route," because of the longer distance and slower operating speed of the RAN railway between Abidjan and Ougadougou. Delays in the Port of Lome are also less on average than those at the Port of Abidjan, reportedly two weeks compared with four weeks. The RAN railway also has lost some Upper Volta traffic because of poor service and pilferage. Ivory Coast is, nevertheless, likely to remain Upper Volta's main route to the sea because of its economic and political importance in the region.

42. Difficulties in forecasting the types of traffic were partly due to the lack of origin and destination information. Without such information, it was difficult to forecast the proportions of domestic and international traffic. Also, from the feasibility study, load factors appear to have been overestimated, especially for heavy vehicles, thus making the underestimation of vehicle numbers more marked. The organization of countrywide origin and destination surveys combined with traffic counts would have been a major task of the transport planning and coordination unit that the project aimed to establish and an essential step in improved transport and investment planning for Togo.

43. Moreover, effective forecasting of transit traffic requires a wide regional view. Some studies of this type have been carried out and give a valuable view of the alternatives for Sahelian traffic, although their forecasts may be disputed. In addition to the three routes mentioned above, there are two other existing routes available to Upper Volta, Niger and Mali. There are also three routes which have not yet been developed. The eight routes are briefly described in Annex B.

44. Selection of route by landlocked countries is motivated not only by considerations of time and cost, but also by desires to diversify outlets. In addition, there are political and financial attractions between the Franco- phone countries. In the case of imports, choices may further be made by shippers and major companies for security reasons or because of preferences for one port over another. This has been a major factor in the switch of some of the requirements of Niger's uranium mines from the "Benin Route" to the "Togo Route".1/

45. The actual transit traffic attracted to one route or another also depends on competing investments, some of which may be supported by IDA, in various countries. The "Togo Route," in particular, will be affected by the probable decision to pave the last section of the "Benin Route" between Dassa Zoume and Parakou, which would result in much faster service. A favorable feasibility study has already been financed by the European Development Fund (EDF) and cofinancing is being proposed by EDF and IDA. The proposed extension to the Port of Cotonou under the Cotonou Port Project (Credit 826-BEN for US$8.0 million of October 1978) may favor the "Benin Route," unless further extensions to the Port of Lome are carried out.

1/ PPAR No. 3986, Benin Second Highway Project, June 30, 1982. - 12 -

46. The relative efficiency of the road trucking industries in Benin, Togo, and Niger and the levels of road and rail tariffs also will affect the shares of traffic of the various roads and ports involved. These questions make the delay in establishment of a transport planning and coordination agency in Togo more serious (paras. 13-15 and 42). Moreover, the possibility of rapid shifts in transit traffic from one route to another raises some doubt whether the projected traffic on the Blitta-Sokode Road can be accepted as entirely likely.

Variations in Estimates of Vehicle Operating Cost Savings

47. The benefits ascribed to the civil works included in the project consisted entirely of voc savings. It is, therefore, disturbing to find that estimates of the basic voc vary considerably in the case of the several highway projects supported by IDA in Togo, even taking account of inflation and other possible changes. The vehicle types used are sometimes different and often do not coincide with the classification of vehicles in the traffic counts, and the road surface classifications used for calculating savings are different. Consultants' feasibility studies also are not always easy to follow with regard to voc calculations. They often do not make clear, for example, the assumptions made about maintenance in the "with" and "without" cases. Assuming poor maintenance in the first case and good maintenance in the second case can exaggerate voc savings, which may well have been the situation in the reevaluation of the Sokode-Tchamba Road.

48. These differences make it difficult for appraisal missions to monitor ongoing projects and to reevaluate them properly. They also impede reliable comparisons between different projects. Many of these problems would be resolved if a local transport planning and coordination unit carried out continuous research into vocs, kept traffic statistics on a uniform basis, and coordinated the research of consultants. Some examples of the variations in Togo itself and in Benin, a similar neighboring country, are shown in Annexes C-E.

Failure to Achieve the "In-House" Training Objectives

49. The training of professional, managerial, and supervisory staff in road maintenance was frustrated by lack of suitable Togolese personnel (para. 10). The Government provided only three out of the four personnel to be trained, and they arrived very late in the project period. To avoid such a situation in the future, it is advisable not to begin training schemes until the Government nominates staff to be trained and gives an understanding that they will be released from other duties. Periodic review of the training program should be carried out by the Government and IDA. These safeguards were in fact incorporated into the planning of the Third and Fourth Projects.

50. The subject project also was not successful in training the staff of a transport planning and coordination agency. The main reason for this failure was delay on the part of the Government in setting up an appropriate agency and in assigning staff to it (paras. 13-15). As in the case of road maintenance, training in transport planning and coordination could not have succeeded without the prerequisite arrangements being put in place. - 13 -

IV. CONCLUSIONS

51. The scaled down project was generally successful, apart from its "in-house" training and institution building aspects. The main objective of rehabilitating an important section of the south-north highway was achieved satisfactorily, as was the improvement of a secondary road connecting it to an area of agricultural potential. However, another civil works component had to be deleted from the project because of budgetary constraints. In reevaluation of the project, the higher construction costs for the civil works actually executed were offset by higher voc savings from faster than expected traffic development. There must be some concern, however, that the life of the Blitta-Sokode Road, and hence its economic return, may be reduced because traffic is higher than design levels and because road maintenance, though reorganized under the project, has been severely curtailed by lack of funds and by equipment failure.

PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TA)

Comparison of Appraisal Cost Estimate and Actual Cost (in current prices)

Appraisal Cost Estimate Actual Cost Difference between Appraisal Local Foreign Total Local Foreign Total Cost Estimate and Actual Cost ------(US$ thousand, including taxes) ------(%) Road Rehabilitation by Contract

A.l. Blitta-Sokode Road 2,225 4,144 6,369 2,734 6,693 7,259 +14 2. Cement Stabilization n.a. n.a. n.a. 396 968 1,050 n.a. Sub-Total n.a. n.a. n.a. 3,130 7,661 8,309 n.a.

B.1. Sokode-Tehamba Road and Bridges on Tchamba-Kambole Road 599 1,076 1,675 722 1,771 1,920 +15 2. Widening of Bridges on Sokode-Tchamba Road n.a. n.a. n.a. 113 277 300 n.a.

Sub-Total n.a. n.a. n.a. 835 2,048 2,200 n.a.

C. Agou-Notse (formerly Nuatja) Road 628 1,170 1,798 - - - /a /b

D. Supervision of: a. Item A above n.a. n.a. n.a. 56 510 566 n.a. b. Item B above u.a. n.a. n.a. 31 276 307 u.a. Sub-Total 78 668 746 87 786 873 +10

Improvement of Tchamba-Kambole Road by Force Account

A. Equipment 0 152 152 0 152 152 0 B. Operating Costs 227 243 47u n.a. n.a. n.a. /a C. Supervision Costs 9 93 102 n.a. n.a. n.a. /a

Maintenance Program

A. Technical Assistance 52 471 523 62 559 621 +19 B. Complementary Training and Soil Test Equipment 0 110 110 0 116 116 + 5

Survey of Unpaved Roads 26 210 236 24 218 242 + 3

Preinvestment Studies of Tabligbo-Aneho (formerly Anecho) Road 15 175 190 20 181 201 + 6

Assistance to Road 'transport Service 11 118 129 13 121 134 + 4 Ic TOTAL 3,87u 8,630 12,500 4,171 11,842 12,868- 4-3

/a Bids for road construction were 30% higher than appraisal estimates due to worldwide inflation. In the event, the Government and IDA agreed to postpone construction of the Agou-Notse Road, and to transfer the financing of operating costs and supervision costs of improvement of the Tchamba-Kambola Road to the Government's budget.

/b The construction cost of the Agou-Notse Road, included in the Third highway Project, was estimated at US$5.3 million as of February 1980.

/c The total cost of the project is understated because it excludes the operating costs and supervision costs for improvement of the Tchamba-Kambole Road, which are not available. - 15 -

ANNEX B

PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

Alternative Main Routes of Access for Upper Volta, Niger and Mali

I. Existing Routes

A. The "Togo Route," consisting of a now completely paved road from the Port of Lome branching westward to Ougadougou, or eastward to Niger and eastern Mali (distance to Niamey 1,240 km);

B. The "Benin Route," including a 440 km railway from the Port of Cotonou to Parakou and a road from Parakou to Niger and eastern Mali (distance to Niamey 1,058 km);

C. The "Ivory Coast Route," consisting of the railway from Abidjan to Ougadougou, with road connections to Mali and Niger (distance to Niamey 1,675 km);

D. The "Nigerian Route," consisting of road or road/rail from the Port of Lagos or road from the Kaduna refinery in Nigeria to Niger and eastern Mali;

E. The "Senegal Route," encompassing the railway from the Port of Dakar in Senegal to Bamako, the capital of Mali, with road connections to Upper Volta and Niger.

II. Routes Not Yet Developed

A. The "Ghana Route" from the Port of Accra in Ghana by road to Lake Volta, lake transport, and the road again to Upper Volta with connections to Niger;

B. The "Niger River Route" from the Port of Lagos to Niamey by river. This would necessitate construction of a barrage at Jebba in Nigeria, modifi- cation of the bridge at Malanville near the Niger border, and rock clearance on the river between there and Niamey;

C. The "Transsahara Route," which would eventually link the Port of Algiers in Algeria with Lagos by a road passing through Algeria, Niger, and Nigeria. - 16 -

ANNEX C

PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1972

Toga/a Benib Gravel Good "Ruined" Good or Poor Paved Paved Paved Paved Road Road Savings Road Road Savings ------(CFAF per km)------

Cars and Pick-Ups n.a. n.a. n.a. 16.4 23.3- 25.5 6.9 -9.1

Cars 14.2 31.4 17.2 n.a. n.a. n.a. Pick-Ups 14.0 29.4 15.4 n.a. n.a. n.a.

Trucks (2-10 tons) n.a. n.a. n.a. 32.4 51.7- 57.4 19.3-25.0

7 ton Trucks 27.4 57.6 30.2 n.a. n.a. n.a.

Heavy Trucks n.a. n.a. n.a. 74.8 125.2-139.9 50.4-65.1

11 ton Trucks 48.9 99.7 50.8 n.a. n.a. n.a. Truck-Trailers 84.9 170.5 85.6 n.a. n.a. n.a.

/a Source: Consultant's Report, "Route Blitta-Sokode Etude de factibilite," 1972. /b Source: PCR, Benin Second Highway Project (Credit 415-DA), Table 8, August 1979. PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT CREDIT 450-TO)

Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1976

TogoLa BenirL/b Gravel Good Poor Good or Poor Paved Paved Change in Savings Paved Paved Change in Savings Road Road Savings 1976/1972 Road Road Savings 1976/1972 ----- (CFAF per km)----- (%) ------(CFAF per km) ------(%)

Cars and Pick-Ups 27.4 43.8 16.4 - 5 n.a. n.a. n.a. n.a.

Cars n.a. n.a. n.a. n.a. 22.8 33.1 10.3 + 29 Pick-Ups n.a. n.a. n.a. n.a. 23.1 33.5 10.4 n.a.

Trucks (2-10 tons)

7 ton Trucks 50.7 97.8 47.1 +56 n.a. n.a. n.a. n.a. 10 ton Trucks n.a. n.a. n.a. n.a. 94.1 154.4 60.3 +172/c

Heavy Trucks

11 ton Trucks 71.1 137.8 66.7 +31 n.a. n.a. n.a. n.a. Truck-Trailers 88.9 172.2 83.3 - 3 114.8 198.5 83.7 + 4 5 /c

/a Source: PCR, Togo Second Highway Project (Credit 450-TO), October 1979. Data came from Appraisal Report on Togo Third Highway (Credit 693-TO), March 1977 and were prepared by consultants (French) for Aneho-Tabligbo Road feasibility study. /b Source: PCR, Benin Second Highway Project (Credit 415-DA), Table 8, August 1979. t fully comparable. PROJECT PERFORMANCE AUDIT REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

Togo and Benin - Vehicle Operating Costs Excluding Taxes - 1980

Togo/a Benin/b

Good "Ruined" Good Paved Paved Change in Savings Paved Gravel Change in Savings Road Road Savings 1980/1976 Road Road Savings 1980/1976 ------(CFAF per km)------( ------(CFAF per km) ------(%)

Cars and Pick-Ups

Cars 37 50 12) 35 43 8 -22 Pick-Ups 34 43 9) 37 46 9 -13

Trucks (2-10 tons) )

10 ton Trucks 108 150 42 n.a. ) 94 131 37 -39

Heavy Trucks )

11 ton Trucks ) Truck-Trailers 205 315 110 +32 149 223 74 -12

/a Source: Consultant's Report, "Road Maintenance Analysis in Togo, 1980." Appraisal Report on Togo Fourth Highway Project (Credit 1139-TO), Annex 5, April 1981. /b Source: Appraisal Report on Benin Fourth Highway (Credit 1142-BEN), April 1981. - 19 -

ANNEX F

BORROWER COMMENTS (TRANSLATION FROM FRENCH)

MAY 27, 1982

MINISTRY OF ECONOMY AND FINANCE

TO THE DIRECTOR OF THE OPERATIONS EVALUATION DEPARTMENT

WORLD BANK

REFERENCE YOUR LETTER DATED APRIL 14, 1982 CONCERNING PROJECT PERFORMANCE

AUDIT REPORT ON TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

PLEASED TO LET YOU KNOW I DO NOT HAVE ANY MAJOR COMMENTS EXCEPT THAT THE

DATE OF THE REGIONAL OFFICE'S MISSION WAS APRIL 1979 AND THE RATES OF

EXCHANGE OF THE US DOLLAR IN 1975 AND 1979 WERE RESPECTIVELY 140 AND 130 FCFA.

REGARDS

T. TEVI-BENISSAN - 21 - October 1979

PROJECT COMPLETION REPORT

TOGO SECOND HIGHWAY PROJECT (CREDIT 450-TO)

I. INTRODUCTION

1.01 Road transport is an important element in the overall economic development of Togo. During the last two Five-Year Development Plans (1971-75, 1976- 80), nearly half the total public investments allocated to the transport sector were in road infrastructure, representing about 12% of all public investments. The emphasis of the Government Development Plans in the Transport Sector was on two major objectives: (a) improvement and development of a network of primary and secondary roads aimed at connecting the country's centers of economic and social activity; and (b) attracting international transit traffic from landlocked Niger and Upper Volta through the port of Lome, the country's capital and most important link with the rest of the world.

1.02 The Bank's involvement in the transport sector in Togo started in 1968, with the First Highway Project (Credit 131-TO). This project included: (a) a four-year program of procurement of road maintenance and workshop equipment, improvement of road maintenance operations and training of personnel at all levels; and (b) road preinvestment studies. The project was satisfactorily completed in November 1973, although road maintenance operations needed additional improvements as explained in the Project Completion Report of June 1976.

1.03 The Second Highway Project was designed to capitalize on and to con- solidate the achievements of the First Highway Project. The project included construction of roads studied under the First Highway Project and extended technical assistance for road maintenance.

1.04 The information used in compiling this report was obtained from project files, site inspections, and records available or obtained at the Bank's request in Togo during supervision missions. MPW's effort in data col- lecting was appreciated, although, MPW did not prepare a PCR. There was no specific Bank mission for the PCR.

II. PROJECT PREPARATION AND APPRAISAL

A. Project Preparation

2.01 Discussions between the Government and the Association on the composi- tion of the Second Highway Project began in early 1972. The main project objectives, as agreed during the September 1972 preappraisal mission, were to - 22 - improve the primary and secondary road networks and increase the efficiency of road maintenance operations. The project was appraised in November/December 1972.

B. Project Appraisal

1. Description

2.02 The project consisted of:

(a) rehabilitation of the paved Blitta-Sokode road (78 km);

(b) improvement of the Sokode-Tchamba-Kambole road (75 km) to gravel standards;

(d) extension of the maintenance program provided under the First Highway Project (technical assistance, equipment for soil laboratory, and training);

(e) survey of about 2,000 km of unpaved roads;

(f) preinvestment studies for reconstruction of the paved Tabligbo-Aneho (formerly Anecho) road (41 km); and

(g) technical assistance to the Road Transport Service (RTS).

Rehabilitation of the Blitta-Sokode Road

2.03 The Blitta-Sokode road formed part of the south-north axis linking Lome to the Upper Volta border. Constructed in 1958, it was one of the oldest paved facilities in Togo's road network. Generally low pavement standards, combined with the substantial growth of traffic, had resulted in various de- grees of deterioration of the road surface and structures.

2.04 The solution proposed under the project consisted of strengthening and widening the entire pavement to a two-lane, 6 m-wide standard, and re- aligning about 35% of the existing road. The design standards used were the same as those adopted by DPW for the entire south-north axis.

Improvement of the Sokode-Tchamba-Kambole Road

2.05 The Sokode-Tchamba-Kambole road is the only link between the main south-north road axis and densely populated agricultural region of Kambole, near the Benin border. The Sokode-Tchamba section (35 km) had a 5 to 6 m- wide platform, generally below terrain level, and the Tchamba-Kambole section (40 km) was an earth track 3 to 4 m wide. On the Sokode-Tchamba section, the - 23 - works comprised widening the roadway to 8 m with some realignments to fit a design speed of 80 km/h, and spreading a gravel base course. On the Tchamba- Kambole section, the works included: (a) reconstruction of seven small bridges, and (b) widening the roadway to 8 m with minor realignments to fit a design speed of 60 km/h, plus spreading a gravel base course. The works on the last section were to be carried out by force account.

Construction of the Agou-Notse Road

2.06 The new Agou-Notse road was to connect the two main paved axes of the network: the south-north axis and the Lome-Palime axis. At appraisal, there were only two sections of earth track on the proposed alignment. These sections, located at either end of the alignment, were impassable during the rainy season. Between the two sections, there was a footpath (35 km) crossing one of the less populated areas of the country which, although sparsely populated, had good agricultural potential. Thus, the road was aimed at opening up a new area to rural development. The project envisaged construction of a two-lane, 8 m-wide gravel road. The design speed was 80 km/h which, given the flat terrain and low traffic volume, was the usual standard for most roads in the country.

Extension of the Highway Maintenance Program

2.07 Planning and management of road maintenance operations did not develop as expected under the First Highway Project, and only half the planned yearly output in road maintenance had been achieved. Therefore, it was agreed with the Government that, as a second stage of the maintenance program, about 130 man-months of technical assistance would be provided over a three-year period; at the end of this period, the responsibilities assigned to technical assistance experts were to be turned over to DPW personnel.

2.08 The technical assistance team was expected to assist in: (a) training DPW road engineers, technicians and accountants; (b) planning and program- ming maintenance operations; (c) supervising the works performed by the subdivisions; and (d) upgrading road maintenance standards in order to keep pace with traffic growth. In addition, the project also provided for training abroad of two highway engineers and two highway technicians.

Survey of Upaved Roads

2.09 The purpose of the survey of unpaved roads was to identify future highway projects. The study was limited to about 2,000 km of roads of which about 1,200 km of unpaved secondary roads and 600-800 km of major feeder roads (of a total of 5,000 km). The roads to be studied were to be selected by the Government and the Association on the basis of detailed information collected from PWD services, the regional authorities, and other interested Government offices and agencies during the first phase of the survey. - 24 -

Preinvestment Studies for the Tabligbo-Aneho Road (41 km)

2.10 The paved road had been built in 1964 with financing by Fonds d'Aide et de Cooperation (FAC, France). Due to limited funds, the 3 to 5 m-wide pave-- ment was designed to low standards. Many sections had deteriorated under the growing traffic. Improvement of the road was to involve strengthening and widening the pavement, and improving the drainage system. The proposed project provided for preparation of a feasibility study and if justified, detailed engineering.

Technical Assistance to the RTS

2.11 The assistance provided under the project was intended to improve the administration and operations of RTS. The Service was created in 1969 and had not been working effectively, mainly because of a shortage of qualified personnel. Over a two-year period, a technical assistance expert was expected to be primarily responsible for training RTS personnel and for organizing a data- collection system.

2. Cost Estimates and Financing

2.12 The total cost of the project was estimated at about US$12.5 million equivalent, including taxes, and physical and price contingencies. Foreign costs were estimated at about US$8.7 million and local costs at about US$3.8 million (Table 1). The base cost estimates were in early 1974 prices, the expected date of bidding for civil works items.

2.13 The Association was to finance the entire foreign exchange cost of the project of US$8.7 million (abut 70% of total project costs, or about 85% Gf total costs excluding taxes). The balance in local costs (US$3.8 million equivalent, including US$1.8 million of taxes) was to be provided by the Government, which had given its assurance that the necessary funds would be made available.

3. Covenants of the Credit Agreement

2.14 The few Credit covenants with sectorial relevance were related to: (a) road maintenance operations and financing; (b) vehicle weight control; and (c) traffic counting and general transport data. The wording of the covenants was quite general in nature, except for Section 4.04, which stipulated that the Borrower should consult the Association before making any major investments in the railway system and should allow the Association to comment on major railway studies.

2.15 The Credit was approved by the Board on November 27, 1973 and signed on December 28, 1973. It became effective on April 19, 1974, within the expected period. - 25 -

III. PROJECT IMPLEMENTATION

3.01 Project implementation started in mid-1974. As a result of worldwide inflation, the bids for road construction were 30% higher than estimated at appraisal. Consequently, the Government agreed to postpone construction of the Agou-Notse road, which was later included in the Third Highway Project (Credit 693-TO) and is currently under construction. Improvement of the Tchamba-Kambole road (40 km) by force account was deleted from the project and carried out by PWD under its own budget, but reconstruction of the small bridges was kept in the project. The Credit Agreement was amended accordingly in March 1976. Concurrently, the Association reduced its participation rate in road construction from 74% to 71%, net of taxes. The major components, of the project were completed by mid-1977 (about 96% of total project cost), about six months behind schedule. However, full completion of the project was in June 1979, about 30 months later than estimated at appraisal. The extra delay was due to late implementation of technical assistance to RTS and late installment of laboratory equipment.

A. Civil Works

Construction of the Blitta-Sokode Road

3.02 French contractors satisfactorily completed the construction of the Blitta-Sokode road (78 km) in May 1977, under the supervision of other French consultants. The construction period was 25 months, four months longer than the contractual schedule estimated. The extension was caused by major additional imporovements in the road design introduced by the Government with the Association's agreement. These improvements consisted of (a) cement stabilization of the laterite base course, whose cost (US$1,050,000) was financed by the Government because the project lacked funds to cover it; and (b) the widening to two-lane standards of the only two single-lane bridges on the whole Lome-Kante axis (480 km), whose cost (US$190,000) was financed under the project. These improvements were justified because: (a) the Government wished to avoid any risk of pavement weakness as experienced in some sections between Lome and Sokode recently constructed; (b) the traffic increase (para 5.07) was greater than estimated at the appraisal; and (c) the Government's effort to develop transit traffic through the port of Lome to and from neighboring Niger, Upper Volta and Mali was expected to cause additional traffic increases.

Construction of the Sokode-Tchamba Road

3.03 Togolese and French contractors satisfactorily completed construction of the Sokode-Tchamba road (35 km) in January 1977 under the supervision of German consultants. The construction was executed in 17 months, about 7 months longer than originally scheduled. This delay was caused by the Government's decision to widen all bridges to two lanes, while the project only provided for widening of bridges with spans of less than 13 m. The Association found this improvement unjustified, since traffic on the road barely exceeded 100 vehicles per day in 1972, and the probability of two vehicles meeting on these bridges was slight. The cost of the increased standards was financed entirely by the Government. - 26 -

Improvement of the Tchamba-Kambole Road

3.04 Reconstruction of eight small bridges (one more than expected at appraisal) on the Tchamba-Kambole road was completed in June 1975, by the contractors listed in para. 3.03. Improvement of the Tchamba-Kambole road (40 km) to gravel standards was carried out by force account. PWD's regravelling brigade started construction in mid-1977 and completed it by mid-1979. Some construction equipment was procured under the project, but no operating costs were covered.

B. Road Maintenance Program

Road Maintenance Organization and Operations

3.05 The road maintenance program begun under the First Highway Project aimed at setting up a road maintenance organization capable of maintaining the primary (about 800 km) and secondary (about 1,600 km) road networks. Existing equipment was repaired, new equipment was purchased, and some personnel were trained. The reorganization of maintenance operations, however, proved un- satisfactory, because of (a) lack of coordination and supervision by the Roads Division responsible for road maintenance at headquarters, and (b) the uneconomic use of equipment for scattered works. An extension of the program under the Second Highway Project was thus designed to efficiently reorganize maintenance operations and train Togolese professionals and technicians.

3.06 At the beginning of 1975, a major reorganization of maintenance operations was implemented under the Second Highway Project to increase productivity in road maintenance. All regravelling equipment was concentrated in three specialized brigades, rather than scattered throughout the five field subdivisions. The regravelling brigades worked in various subdivisions for given periods and with well-defined programs. A second mobile brigade, used for road improvements, was created and put under direct Road Division management, as was the first mobile brigade (established in 1972 under the First Highway Project). At first, this reorganization increased the brigades' output. In 1977, however, the brigades' output decreased by 35% and cost increased by 48% in constant prices compared to 1975 levels. These changes were caused mainly by equipment breakdowns in one of the brigades. This problem was solved when new equipment was procured under the Third Highway Project. From 1974 to 1977, about 450 km of unpaved roads were regravelled.

3.07 Routine road maintenance was performed by the field subdivisions with the assistance of the consultants. The network covered by routine maintenance included all primary road network and part of the secondary network. The Equipment Division, in charge of maintaining and repairing all PWD equipment, improved its operations after its spare parts supply and storage system was re-- organized in 1978. Minor repairs were carried out on site, while major repairs were done in the subdivisions' workshops which were now better supplied with spare parts. A major impediment to operations is the large turnover of personnel who often leave for the private sector where salaries are higher, thus necessitating continuous replenishment of staff and training. - 27 -

Technical Assistance and Training

3.08 American consultants continued the technical assistance started under the First Highway Project. The four team members started in April 1974 and completed their services in April 1977 for a total of 130 manmonths. As the Togolese counterparts were appointed late in the programs, they could not achieve the major project objective of training Togolese professionals to take over management of road maintenance operations. On-the-job training of mechanics and technicians was satisfactory. The large turnover of personnel from the public to the private sector however, requires that the training should be provided continuously to meet the needs of both sectors. Seventy- seven man-months of advisory consultant's services consisting principally of training managerial personnel, were provided under the ongoing Third Highway Project; further extension of technical assistance in training is under consideration for the upcoming Fourth Highway Project.

3.09 Three of the four fellowships provided under the project were satisfactorily utilized: (a) the head of the equipment division completed four months of training abroad (two months in France and two months in Tunisia), (b) the head of the equipment workshop completed six months of training with the Ivory Coast's Ministry of Public Works; and (c) the head of the soils laboratory completed a year of training with the Centre Experimental de Recherches et d'Etudes du Batiment et des Travaux Publics (CEBTP, France).

3.10 CEBTP was selected to supply the newly created soils laboratory with equipment. The equipment was delivered by mid-1978, but was not installed in the new building until mid-1979, because construction of the building was de- layed.

C. Studies

Survey of Unpaved Roads

3.11 French consultants completed the survey of 2,000 km of unpaved roads in December 1975. After the Association provided some guidance to the consultants, the economic analysis was satisfactorily completed. The survey made a positive contribution of setting up priorities for periodic maintenance of unpaved roads. Furthermore, about 400 km of unpaved roads were included in the subsequent Feeder Road Project (Cr. 810-TO).

Study of the Aneho-Tabligbo Road

3.12 Canadian consultants completed the feasibility study for reconstruction of the Aneho-Tabligbo road (45 km) in 1975. The consultants completed the final engineering and bidding documents in February 1977. The reconstruction of this road to two-lane paved standards is being carried out under the Third Highway Project. - 28 -

D. Technical Assistance to the Road Transport Service

3.13 The Road Transport Service was created in the Ministry of Transport and Commerce (MTC) in 1969 to handle a variety of tasks, ranging from regis- tering vehicles to studying the road transport industry and advising the Government on road transport policies. Technical assistance of a transport economist for 24 man-months was provided under the project to improve RTS operations and train its staff.

3.14 After Government delays in hiring the expert, a draft contract with a French consultant was agreed upon between the Government, the consultant, and the Association in December 1977. However, because of changes of the Minister of MTC, the contract was not signed until December 1978. Neverthe- less, the expert and his Togolese counterpart started work in November 1977. Available funds in the Credit category were sufficient to finance the contract for 18 months only. The expert prepared a number of brief notes related in general to regulation of road transport industry, urban transport in Lome, organization of training of personnel involved in transport and draft traffic regulations. Since the counterpart left RTS in the meantime, there was little effect on training of RTS personnel. In conclusion, this project item did not achieve expected goals mainly because of the expert's failure to respond fully to his tasks, and the lack of cooperation between RTS and the expert.

E. Project Costs and Credit Disbursements

3.15 Total project cost is US$12,868,000, about 3% above the appraisal figure. The cost reflects changes in project scope (para 3.01) and therefore is not comparable to the appraisal estimate. Mainly because of worldwide inflation in 1974/1975, actual construLtion costs were substantially higher than estimated at appraisal, about 55% on the Blitta-Sokode road, and about 57% on the Sokode-Tchamba road; actual cost of other project items were close to the appraisal estimate. A surplus of US$277,000 available under the First Highway Project was used to finance part of the consultant's services. A surplus in the credit for the Second Highway Project of about US$300,000 is currently estimated (Table 1). As agreed between the Government and the Association, the surplus is being used to finance an extension of the technical assistance services of the road engineer assigned to the Road Planning and Design office, and of the soil technician assigned to the soils laboratory provided under the Third Highway Project. The experts will help in preparing the study of strengthening of the Lome-Tsevie (35 km) and part of the Lome-Palime (129 km) roads, both of which could be included in a future Bank Group project.

3.16 Because of the slow start of project implementation, the actual disbursements were behind appraisal estimate in FYs 1974-76. In FYs 1977 and 1978, however, actual disbursements came close to being on schedule (Table 2). - 29 -

F. Compliance with Credit Covenants

3.17 In the course of project execution, the Borrower fulfilled most of his obligations under the covenants of the Credit Agreement. In order to control vehicle weights (Section 4.02(a) of the Credit Agreement), the Govern- ment provided and installed a permanent weighing station 10 km from Lome on the main south-north axis in 1977. The station is not in operation, however, because there are no laws to regulate its use. The laws are being prepared by RTS and, once adopted, will allow effective weight control on the Lome- Sokode axis. Traffic counts are now regularly being carried out on the primary road network (Section 4.02(b)). A study on the development of railway and road transport, completed in 1974, was given to the Association for comment (Section 4.04(b)).

IV. INSTITUTIONAL DEVELOPMENT

4.01 The Second Highway Project made an impact on the institutional development of the Borrower. Part of the project was aimed at: (a) strengthening road maintenance organization within the Public Works Department and (b) improving RTS.

4.02 Maintenance of the road network has substantially improved since 1969, when a four-year maintenance program began under the First Highway Project. The maintenance program was followed up by a three-year technical assistance program (1974-77) under the Second Highway Project. There is ample evidence from highway maintenance projects in other countries that a period considerably longer than four years is required to build up a fully effective highway maintenance organization. In this context, progress was made. The headquarters organization was reorganized in 1975 and, although it still leans on the help of expatriate staff, it is reasonably effective. Skills in the use and maintenance of equipment have been improved; however, additional training of PWD personnel is still needed (para 3.08). The Roads Division was given direct responsibility for all of the regravelling operations previously managed by the subdivisions. This rearrangement produced better equipment utilization (para 3.07) and improved output of the brigades (para 3.06). Routine maintenance is organized and carried out directly by the field subdivisions; however, its quality is variable. Maintenance of road equipment was also reorganized under the Second Highway Project.

4.03 The project provided for technical assistance of a transport economist to RTS in the Ministry of Transport and Commerce to improve its operations and train its staff. Although the Bank provided some guidance to RTS and to the expert in clarifying their main tasks and activities, little progress in strengthening RTS was made, for the reasons explained in para 3.14. - 30 -

V. ECONOMIC RE-EVALUATION

5.01 Development of a reliable transport network in Togo and reduction of transport costs are of prime importance to the country's economic development. As roads handle most of Togo's freight and passenger transport, the improvement of the road network and of its maintenance is a prerequisite to Togo's future economic growth. Free competition in the trucking industry im- plies that benefits are expected to be distributed to the bulk of the popu- lation, as savings in transport costs are eventually passed on to Togolese producers and consumers. Economic reevaluation of project's major components is presented below.

Economic Justification

5.02 The project's main components were civil works (87% of total cost); construction of Blitta-Sokode and Sokode-Tchamba roads. The economic justification of the two roads at appraisal was based on the expected reduction in vehicle operating costs. Other benefits, including induced agricultural development, increased transport reliability, time savings and reduction in accident costs, were described qualitatively but not quantified in the estimates of economic returns. The same methodology was used in the reevaluation and led to the conclusion that the recomputed economic returns (ER) of 25% and 15% respectively for the roads justified the investments, even with the substantial cost increases.

Construction Costs Estimates

5.03 Appraisal economic cost estimates in mid-1972 prices and actual construction costs in late 1975 prices (net of taxes) are as follows:

------in CFAF million------Appraisal Estimates 1/ Actual Costs (mid-1972 prices) (late 1975 prices)

Blitta-Sokode (78 km) 837 1,838 Sokode-Tchamba (35 km) 165 451

1/ Without price and physical contingencies.

The actual cost increase is mainly attributable to the worldwide inflation which was not envisaged at the time of project appraisal (1972/73).

Vehicle Operating and Maintenance Costs

5.04 The vehicle operating costs (voc) used in the reevaluation are those used in the appraisal of the Third Highway Project. They are given - 31 - in Table 4 in CFAF per km, net of taxes, in late 1975 prices. Due to worldwide inflation in general and fuel price increases in particular, the increase in voc was substantial; for light vehicles, the increase was over 90% between appraisal and late 1975. It is difficult to make that comparison for other vehicles becauSE the vehicle types used in the Second and the Third Highway Projects differ somewhat.

5.05 For the Blitta-Sokode road, maintenance costs were assumed to be the same with or without rehabilitation, since it was doubtful that PWD could provide increasing maintenance if the road surface deteriorated rapidly. Resurfacing of the road every eight years was, however, included in the maintenance cost of the new road. For the Sokode-Tchamba road, maintenance expenditures are estimated at CFAF 11 million per year on the gravel road, including routine and periodic maintenance. Practically no maintenance was carried out on the former earth road.

Traffic Forecasts

a) The Blitta-Sokode Road

5.06 Traffic has been growing fast on the Blitta-Sokode road, from the 175 vehicles per day (vpd) counted by the consultants in 1972 and reported in the appraisal report, to 320 in 1975 and 430 and 1978 on the basis of PWD counts. Annual traffic growth in the 1975-1978 period was 10%. This resulted mainly from the general growth of Togo's economy, and also from the Govern- ment's efforts to attract import and export traffic to and from some Sahelian countries (Mali, Upper Volta and Niger) through the port of Lome. A breakdown of the actual average daily traffic is presented in Table 4. In reevaluation, a traffic growth of 8% p.a. has been assumed for the next ten years, and of 6% for the remaining eight years of the expected 20-year life of the road (1977-1996).

b) The Sokode-Tchamba Road

5.07 The average daily traffic given in the appraisal report was about 110 vehicles in 1972. Traffic data collected by PWD for the 1973-1978 period were somewhat erratic, but they indicated that traffic reached only 115 vpd in 1978. It appears that the traffic volume in 1972 presented by the consultants was overestimated, and probably only reached about 75 vpd. The breakdown of 1977-1978 average daily traffic is presented in Table 4. In reevaluation, it appears more reasonable that the recent high traffic growth will slow down a bit. Consequently, a traffic growth of 8% p.a. has been assumed for 10 years and of 5% for the remaining 5 years of the expected 15-year life of the investments (1977-1991). Since remaining economic life is long to go, another possibility of the traffic development was considered in the sensitivity analysis (para 5.09).

Economic Returns

5.08 The appraisal report expected returns of 16-23% for the Blitta- Sokode road (without and with international transit traffic) and 13% for - 32 - the Sokode-Tchamba road. The estimated economic returns at project completion are slightly higher than appraisal estimates, i.e. 25% for the Blitta-Sokode road and about 15% for the Sokode-Tchamba road. This shows that the road investments were justified. Substantial cost increases before and during road construction were offset by similar increase of benefits from voc. Actually, construction costs and voc have both approximately doubled between appraisal and completion of the project. In addition, for the Blitta-Sokode road, actual traffic grew more quickly than anticipated in the appraisal report. Since our reevaluation at this time is still a forecast, our assessment was tested by the sensitivity analysis, which was carried out with an anticipated traffic growth reduced to 5% per year. Economic return on Blitta-Sokode would drop to 21% and for Sokode-Tchamba road to about 13%, which is still acceptable.

Other Project Elements

5.09 The amended project also included: (a) studies for reconstruction of the Tabligbo-Aneho road (41 km); and (b) survey of about 2,000 km of unpaved roads. The studies were well justified. Reconstruction of the Tabligbo-Aneho road with an expected ER of 26% was included in the ongoing Third Highway Project. The survey of unpaved roads had been useful to the Government in the design of the Feeder Road Project and in identifying priorities and selecting roads for periodic maintenance. The benefits of the technical assistance to PWD cannot be quantified. The assistance was obvi- ously beneficial to road maintenance operations which improved significantly, while the technical assistance to RTS was rather poor.

Vi. PERFORMANCE OF THE BORROWER

6.01 The Government's performance in the execution of the Second Highway Project varied substantially depending on project items. As the Government was more interested in road construction, its performance in civil works was good. The Government displayed less interest in institutional development, and its performance in strengthening of PWD and RTS was less satisfactory.

6.02 In civil works the Borrower contributed over US$1 million for cement stabilization cost for Blitta-Sokode road, a necessary improvement, and covered all operating costs for the improvement of the Tchamba-Kambole road by force account. The Government also widened a few bridges on the Sokode-Tchamba road which were not considered to be economically justified.

6.03 The Government had difficulties with implementing on schedule the project components related to institution building. In particular, it did not provide local counterparts on time for training in road maintenance operations. The ongoing Third Highway Project, which includes 77 man-months of additional technical assistance for road maintenance is continuing with the training of road maintenance personnel in PWD. In this project, counterparts were in place on time since this was made a prerequisite to dispatching the technical assistance team. - 33 -

VII. THE ROLE OF THE ASSOCIATION

7.01 The Association's performance has been judged on the basis of the overall efficiency and effectiveness of the project and the Association's contribution to it, in particular, the extent to which the project assisted in building up the efficiency to Togolese institutions.

7.02 The Association assisted in strengthening PWD in improving its road maintenance operations. However, improvement of the institutional framework was developing slower and the technical assistance to improve the planning and execution of road maintenance did not proceed as anticipated at the time of appraisal. It seems likely that both the Association and PWD were overoptimistic. Nevertheless, the joint efforts in road maintenance resulted in the successful reorganization of PWD headquarters and in buiding up Road Maintenance subdivisions. The Association was less successful in its goal of setting up a training program for PWD staff. The Association might have been lenient in failing to set specific commitments and timing for Government actions in road maintenance and training. Extended efforts were needed, and are now being made under the Third Highway Project.

7.03 Supervision missions voiced concerned about the long delays in implementation of the technical assistance to RTS, but due to the the problems within MTC, could not resolve this issue. When it became clear that the selection of the expert was an unfortunate one, it was too late for the Association to alter the situation. Supervision missions tried to improve the situation by providing guidance and advice to both the expert and the RTS, although the results were below expectations.

VIII. CONCLUSIONS

8.01 The objectives of the project were basically met. Road construction items and studies were carried out satisfactorily with minor delays. Efforts made in the institution building through technical assistance to RTS and PWD were less satisfactory. That objective is, however, being pursued under the Third Highway Project. In the turmoil of worldwide inflation, the price contingencies were not sufficient to cover the project cost which resulted in reduced project scope. Each project component (except technical assistance to MTC) was well justified and reevaluated economic returns for the construction items were slightly higher than at appraisal. The Borrower's performance was good, except for slowness in institution building. The Association, in particular, continued assistance in strengthening PWD and its road maintenance operations. In future, however, additional effort for a more realistic assessment of Borrower's road maintenance capacity and needs will be required, together with more frequent communications with the Government on institution building matters.

TOG0

SECONDHIGRWAY PROJECT - CREDIT 450-TO

PROECT COMPLETION REPORT

1/ Expected and Actual Project Implementation and Losts -

ost Estimates !ncluding C->tingncies (US$'000)

Completier Date At Ap,rFa - Finol IDA p-ticIpatitn

Contract As A. Percentage otal Percentage Contract Amount Of Of C-rt Amou..t of

PROJECT ITEM EXECUTED BY Signed (UAF Million) Contr.ct Artu.1 Foreign Locol Total oretgn I.ocalTotal Foreign 1tal ICSS~) 1-eion

Rad Construction 4' 5,154 100 A. Blitta-Sokode Road 4123/75 1,258 1 1/77 5/77 4,000 2,250 6,2502/ 5,154 2.105, 7,259 71 100 Cement Stabilltation Contractord - - - 745 305 1,050 0 0 0 4/ 1,36. 100 71 5/76 1/77 1,050 580 1,630-5 1364 556 1,920 d Tc Rud andd4/ Togolden 6/19/75 325 -

KamboliRad. Widening and French - - - 213 87 300 0 0 0 .0 of Bridges m S2ult~E - - - - C. Ago-Not.e Road Du1ated - - - - 1,130 620 1,750 -

- D. Tchamba-Kambole Road $I1BC4 - - - - 320 137 457 - - - -

Equipment E. Earth Moving Equipment rtch 9/18/74 34 11/6/74 11/6/74 148 0 148 152 0 152 100 152 100 contractora F. Laboratory and Tralning C 4/20/77 i. 4/20/78 6/79 111 0 111 110 0 110 100 110 100 Equipment

Conmultant's Service.

(1) Under A FE~h ~multanta 1/06/75 88 1/77 7/77 510 56 56(4 90 510 100 865 96 961 (11) Under B 0g ~ c~gitants 4>/04/75 50 6/76 11/7m 276 31 307 90 276 100

G. Preinoetment Studoes of 5/25/75 45 12/75 7/77 194 21 215 181 20 201 90 181 100 AehIo-Tabigbo Road

H. Survey of 200 km of Road E e.aultants 8/30/75 49 7/75 12/75 229 25 254 218 24 242 90 218 100

1. Maintenance Program ~rean coaujtaa~u 4/25/74 111 2/77 4/77 527 58 585 559 62 621 90 559 100

J. T.hnical Asi.tance to RTS ggnch Consultant, 32/27/78 26 4/79 4/79 121 13 134 121 13 134 90 121 i'7

F. Fellows.hip. 12/77 5 0 5 6 0 6 100 0 6 100

TOTAL 8.700 13,800 12.500 19,609 3,259 12,868 67 8,651 37

Funds fr- Cr. 131-To (-)277

Total Expendiltre on 4S0--TO 8,374

1/ As of September 26, 1979. 2/ At an enchange rat. of 13$1 CFAF 230 t 3/ At a, average exchange rate of US$1 - CFAF 235, including con ingenciea. 4/ Net of taxes. 5/ Including taxsa.-. / DA Credit being US$8,700,000, a aurplun of about US$300,000 is estimated. - 35 - Table 2

TOGO

SECOND HIGHWAY PROJECT - CREDIT 450-TO

Expected and Actual Schedule of Disbursements

ACCUMULATED DISBURSEMENTS IBRD US$1000 EQUIVALENT ACTUAL DISBURSEMENTS FISCAL FISCALAS A PERCENTAGE OF YEAR AND APPRAISAL ACTUAL TOTAL ASPAAPERCETAE SEMESTER ESTIMATE DISBURSEMENTS

1974

2nd 300 - 0

1975

1st 1,500 126 8 2nd 4,500 633 14

1976

1st 6,000 1,704 28 2nd 7,000 4,019 57

1977

1st 8,000 6,771 85 2nd 8,700 8,150 94

1978

1st 8,700 8,219 94 2nd 8,700 8,228 95

1979

1st 8,700 8,349 95 2nd 8,700 8,358 - 96

Closing Date: 06/30/77 06/30/79

1/ As of September 26, 1979. 2/ Final amount disbursed is expected to be slightly increased but, not to exceed US$8,400,000. - 36 - Table 3

TOGO

SECOND HIGHWAY PROJECT - CREDIT 450-TO

PROJECT COMPLETION REPORT

Withdrawal of the Proceeds of the Credit (in US dollars)

Category Planned 1/ Actual 2/

I. Civil Works

a) Rehabilitation of Blitta-Sokod6 Road;) b) Improvement of Sokod4-Tchamba Road; ) 6,170,000 6,527,000 c) Improvement of Tchamba-Kambole Road; ) (reconstruction of bridges) )

II. Earth-moving Equipment 140,000 152,000

III. Consultants Services for Civil Works 700,000 615,000

IV. Technical Assistance 680,000 -960,000

V. Training of Togolese Personnel and Purchase of Soil Testing Equipment 110,000 104,000

VI. Unallocated 900,000 -

TOTAL 8,700,000 8,358,000

1/ As in Amended Development Credit Agreement, March 1976. 2/ As of September 1979. TOGO

SECOND HIGHWAY PROJECT - CREDIT 450-TO

PROJECT COMPLETION REPORT

Economic Re-evaluation of Civil Works

A. Blitta-Sokode Road (78 km) B. Sokode-Tchamba Road (35 km)

1. Cost of Construction -(in CFAF million) Appraisal (Mid 1972 prices) Actual (ate 1975 prices) Appraisal (Mid 1972 prices) Actual (late 1975 prices) (including Supervision) 837 1,838 , 451 2. Economic Life (years) 20 (1976-1995) 20 (1977-1996) 15 (1975-1989) 15 (1977-1991) 3. Road Traffic (vpd) 1972 1975 1977 1978 1972 1977 1978 light vehicles 105 256 285 315 77 74 80 heavy vehicles 70 66 105 115 33 32 35 Total 175 322 390 430 110 106 115

4. Traffic Growth (percent/year) 20 years: 7% 2 years: 10% 10 years: 8% 10 yeare: 8% ! 10 years: 8% 5 years: 81 5 years: 5%.2 8 years: 6%

5. Vehicle operating Costs IL/ (CFAF)

Vehicle Type Paved Road Paved Road Unpaved Road Unpaved Road Condition Condition Condition Condition Good Poor Good Poor Go.d Gravel Poor Earth Good Gravel Poor Earth Road Road Road Light vehicles Road 14.1 n.a. 2744 43.8 28.2 34.0 Medium trucks 59.4 27.4 n.a. 50.7 97.8 31.7 58.3 62.3 Heavy trucks 137.5 48.9 n.a. 71.1 137.8 55.8 96.8 88.9 Truck-trailers 193.5 84.9 n.a. 88.9 172.2 93.8 - 111.1 242.0 6. Economic Rate of Return (a) best estimate: 16-23% 24.7% 13% (b) sensitivity analysis (traffic growth 15.2% reduced to 5% per year): -- 21.5% -- 12.5%

1/ Net of taxes. 2/ Blitta-Sokode Road was 81 km in the Appraisal Report. 3/ Revised estimate of traffic growth. - 33 -

TOGO ORGANIZATION OF THE PUBLIC WORKS DEPARTMENT

DIRECTOR OF PUBLIC WORKS DEPUTY DIRECTOR OF PUBLIC WORKS

ADMINISTRATIVE OFFICE

PERSONNEL OFFICE

CONTRACT OFFICE

ACCOUNTING OFFICE

DIVISIONS ARCHITECTURE AND ROADS GOVERNMENT EQUIPMENT HYDRAULICS AND TOWN PLANNING BUILDINGS _jELECTRIFICATION

ANNEX AT SOKODE

SUBDIVISIONS LOME ATAKPAME SOKODE LAMA KARA MANGO SOUTH NORTH

SECTORS LOME TAKPAME 1 OKODE 1 LAMA KARA MANGO 1 PALIME 1 TSOKODE 2 KANTE MANGO2 ALIME 2 ANIE OKOOE3 DPO SEVIE NOTSE BASSAR LNEHO

World Bank-16225

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