World Bank Document

Document of The World Bank

FOR OFFICIAL USE ONLY

f -7 Public Disclosure Authorized

Report No. 5980-NIR

Public Disclosure Authorized STAFF APPRAISAL REPORT

REPUBLIC OF NIGER

TRANSPORT SECTOR PROJECT Public Disclosure Authorized May 7, 1986 Public Disclosure Authorized Western Africa Projects Department Transportation Division II

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

Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 360

WEIGHTSAND MEASURES

Unless otherwise stated, all weights and measures in this report are in International System (SI) units. 1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 miles 1 kilogramme (kg) = 2.205 pounds 1 ton (t) = 2,205 pounds

FISCAL YEAR

October 1 - September 30

ABBREVIATIONS AND ACRONYMS

AfDF - African Development Fund ABEDA - Arab Bank for Economic Development in Africa BCEAO - Banque Centrale des Etats de l'Afrique de l'Ouest BGR - Bureau de Gestion Routiere (Road Management Unit) CCCE - Caisse Centrale de Cooperation Economique . CFA - Communaute Financiere Africaine (African Financial Community) CILSS - Comite Inter-Etatde Lutte contre la Secheresse au Sahel CIDA - Canadian InternationalDevelopment Agency DTT - Direction des Transports Terrestres (Departmentof Land Transport) DMTP - Direction du Materiel des Travaux Publics (Department of Equipment) DTP - Direction des Travaux Publics (Departmentof Public Works) EDF - European Development Fund ERR - Economic Rate bf Return HDM - Highway Design and Maintenance (Model) IDB - Islamic Development Bank MTPH - Ministere des Travaux Publics et de l'Habitat (Ministry of Public Works and Housing) OPEC - Organizationof Petroleum Exporting Countries SAF - Special African Facility SAL - Structural Adjustment Lending SJF - Special Joint Financing SNT - Syndicat National des Transporteurs SNTN - Societe Nationale des Transports Nigeriens (NigerienNational Transport Company) UNSO - United Nations Sudano-SahelianOrganization USAID - United States Agency for InternationalDevelopment v.p.d. - vehicles per day FM emVCIA U. ONLY

REPUBLIC OF NIGER

TRANSPORT SECTOR PROJECT

STAFF APPRAISAL REPORT

TABLE OF CONT DTS

Page No.

DOCUMENTS IN PROJECT FILE ...... *c iii

CREDIT AND PROJECT SUMMARY ...... ix

I. INTRODUCTION ...... 1

A. Background ...... 1 B. The Economy ...... ***... 1 C. Structural Adjustment ...... 2

II. THE TRANSPORT SECTOR ...... 3

A. General ...... 3 B. Road Network Development and Traffic Patterns ...... 5 C. The Road Transport Industry ...... 8 D. Public Expenditures and Subsector Financing ...... 10 E. Road Policy Formulation and Planning ...... V.... 12 F. Organization, Staffing and Training ...... 13 G. User Charges and Cost Recovery ...... a 14 H. Experience with Past Lending ...... 15

III. THE ROAD PROGRAM AND THE PROJECT ...... 17

A. Rationale ...... 17 B. Project Components ...... 17 C. Costs ...... 24 D. Financing ...... 25

This report was prepared by Ms. C. Cook (Transport Economist), Messrs. R. LeBussy (Mechanical Engineer) and P. Long (Senior Highway Engineer) on the basis of an Appraisal Mission in May 1985. Secretarial work was done by Mmes. Marie-Noelle Griest, Kathy Waters-Reed and Monica Sullivan.

Thi documentha a rstricteddistribution and may be usedby recpientsonly in the pefannmnce of their officialduties Its contents may not otherwise be disclosed without Wodd Bonk authoflt_o. - ii -

Table of Contents (continued)

Page No.

E. Procurement ...... 27 F. Disbursements and Revolving Funds ...... 29 G. Consultation and Reporting ...... 31 H. Accounts and Audit ...... 31 I. Economic Evaluation ...... 31 J. Financial Evaluation ...... 33 K. Risk Assessment ...... 33

IV. AGREEMENTS REHCHED AND RECOMMENDATIONS ...... 35

ANNEXES

2-1 The Priority Road Network.37 2-2 Traffic Count Results.40 2-3 New Vehicle RegistrationStatistics .44 2-4 Fuel Consumption Trends .45 2-5 Road User Charges ...... 46 2-6 Organization of Ministry of Public Works & Housing.50 2-i Organization of Department of Public Works .51 2-8 Organization of Equipment Department .52 2-9 Training Program .... 53 2-10 Past IDA Involvement in the Sector ...... 57

3-1 Sectoral Strategy Statement .61 3-2 Four-Year Program - Composition and Expenditures.62 3-3 List of Road Selected for Periodic Maintenance .68 3-4 List of Secondary and Rural Roads Selected for Construction .70 3-5 Road Maintenance and Workshop Equipment .72 3-6 Technical Assistance Component.73 3-7 Four-Year Program (1985/86-1988/89)- Financing Plan 75 3-8 Disbursement Schedule.76 3-9 HDM Application ...... 77 3-10 Rural Road Evaluation ...... 89

HAP

IBRD No. 19198 - Transport Sector Project

WAPT2 April 1986 - iii -

REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

DOCUMENTSIN PROJECT FILE

WAIC No. Item Date Author Doc. No.

1. Esquisse pour le 5eme Projet Mar. 85 MTPH 223.120

2. Esquisse pour les routes rurales Apr. 85 MTPH 223.121

3. Programme d'entretien routier May 85 MTPH 223.123

4. Programme d'ajustement stracturel - Apr. 85 NTPH 224.194 Secteur batiment, travaux publics et transports

5. Plan de transport - marche (Cr. 886) 128.039

6. Analyse de l'impact socio-economiquedes Jan. 84 BCEON 220.097 routes terminees (Rural Roads)(Cr. 886) (A-D)

7. Transaharan Road Project Description Apr. 78 L. Berger 123.542 (Cr. 1394) 121.536P

8. Arrete No. 043/MF portant rigfInefiscal Jan. 85 Govt. 223.933 des aides exterieures (Cr. 1394)

9. Decret No. 67-071/MTO/MFfixant les regles June 67 Govt. 227.032 de fonctionnementdu Fonds Special d'Etudes et de Contr6le (Cr. 1394)

10. Loi No. 671017 portant cr6ation d'un Fonds Mar. 67 Govt. 227.132 Sp6cial d'Etudes et de Contr6le (Cr. 1394)

11. Paiement des indemnites de personnel - Govt. 227.031 des Offices et EtablissementsPublics (Cr. 1493)

12. Mesures d'Uni a l'APL25 (Cr.1394) May 85 BGR 223.125 (1-2)

13. Etude de 1'Uni du reseau nigerien, - Ducros 223.935 Rapport No. 1 - Exploitation des mesures relevees (Cr. 1394)

14. Plan de transports. Termes de reference Dec. 84 Govt. 221.776 (Cr. 1394) - iv -

WAIC No. Item Date Author Doc. No.

15. Etude sur lea routes revetues. crit4res de -- ISTED 223.122 comporteuent du rtseau re4etu d'enduits superficiels (Cr. 1394)

16. Route Zinder-Agadez. Etude de factibilite Apr. 82 BCEOM 222.327 (Cr. 1394)

17. Actualisation de l'etude 6conomique de la July 85 BCEOM 225.224 route Agadez-Zinder (Cr. 1394)

18. Etude diagnostique du Parc Materiel des Sept. 85 BCEOM 227.372 Travaux Publics (Cr. 1394)

19. Route Niamey-Say. Dossier d'appel d'offres June 82 Sahel 128.181 (Cr. 1394) Consult (A-D)

20. Route RNIW. Travaux de retablissement Aug. 85 DTP 227.369 au PK88.037. Dossier d'appel d'offres (Cr. 1394)

21. Route Niamey Say, construction du dalot Aug. 85 DTP 227.370 au PK52.051. Dossier d'appel d'offres (Cr. 1394)

22. Projet de decret: Reclassement des routes -- 85 DTP 223.119 nationales

23. Diagnostic d'Air Niger (Cr. 1493) Oct. 83 IDET-CEGOS 223.499 (6)

24. Projet de creation d'un centre de formation CFPTP 129.735 et de perfectionnement des travaux publics (Cr. 1394)

25. Esquisse du 5eme Projet: Annexe A Routes Rurales Jan. 85 DTP 228.148

26. Esquisse du 5eme Projet: Annexe B Kilometrage du Reseau et co6t de Jan. 85 DTP 227.955 1'entretien

27. Esquisse du 5eme Projet: Annexe C Situation du Parc et besoin en mat6riel Jan. 85 DTP 227.956

28. Investissements routiers: Impact sur la dette Jan. 85 DTP 227.960

29. Potentialite de financement de l'entretien Jan. 85 DTP 227.961

30. HDM run printout Dec. 85 IDA 228.149

31. The HDM model, Vol. 14, 1985 Aug. 85 TRP none World Bank 32. Analvses visuelles Oct. 85 BGR/DTP 227.957 WAIC No. Item Date Author Doc. No.

33. Traffic Counts, 1st campaign 1985 Oct. 85 BGR/DTP 227.958

34. Traffic Counts, 2nd campaign 1985 Dec. 85 BGR/DTP 227.959

35. Working Paper on Public Works Equipment Aug. 85 Le Bussy 228.150 Department

36. Budget 86. Situation Actuelle Aug. 85 DTP 228.151

37. Budget 86. Recurrent Budget; Aug. 85 DTP YBR 86 (Cr. 1394)

38. Budget 85. BAEMPT; Aug. 84 DTP YBR 85 (Cr. 1394)

39. Projet de constructiondes routes rurales May 85 DTP 223-124 par des unites a haute intensite de main-d'oeuvre

40. Programme d'urgence pour l'entretien routier Sept. 85 DTP 228.152

41. Proposition pour l'Informatisationdu Sept. 85 DTP 228.153 Ministere des Travaux Publics et de l'Urbanisme

42. Entretien periodique Feb. 85 DTP 228.154

43. Planification de l'entretien routier 1985 Aug. 84 DTP 228.155

44. Project Expenditures, CR. 1394-NIG June 85 DTP YBR 1985-1988 45. Document Programme, 1985-88 Sept. 85 DTP 227.963

46. Projet de texte regissant le CFPTP Aug. 85 DTP 228.127

47. Programme de Stages, 1986 Aug. 85 DTP 227.964

48. Programme de formation, 1986 Aug. 85 DTP 227.965

49. Arrete No. 10/MTP/U portant attribution Aug. 85 Govt. 227.966 et organisationde la DTP

50. Plan de Transport (8 vols.' 1978 BCEOM Niger 800

51. Costab run Nov. 85 IDA 228.157

52. Dossier d'Appal d'Offres 85/26 pour Dec. 20/85 227.447 de materiel destine au Centre de Formation et de Perfectionnement des Travaux Publics du Niger. - vi -

WAIC No. Item Date Author Doc. No.

53. Details of pavement condition and proposed Mar. 86 DTP/BGR 228.986 works, by road section, for periodic maintenance

54. Proposed Periodic Maintenance Program Mar. 86 DTP/BGR 228.987 (Paved Roads)

55. Economic rates of return for periodic Mar. 86 DTP/BGR 228.988 maintenance program (Paved Roads)

56. Entretien periodique, RN27 Niamey-Say. Sept. 85 DTP 228.989 Rapport d'Activite No. 1

57. Entretien periodique, RN27 Niamey-Say, Jan. 86 DTP 228.990 RN4 Bac Farie-Tera

58. Pont de Gaya-Malanville,Estimation Oct. 85 BCEOM/DTP 228.991 Confidentielle

59. Previsions des debourses (Canadian Jul. 85 CIDA 228.992 Projects)

60. Planning Financier Takieta-Zinder-Bakin Jan. 86 Beller-Golsen 228.993 Birji Consult

61. Budget for UNSO roads Dec. 85 UNDP 228.994

62. Reflexions sur l'avenir du BGR Feb. 86 BCEOM 228.995

63. Classificationqualitative des routes Feb. 86 BGR 228.996 bitumees (Note)

64. Rapport de presentation, Proposition de Feb. 86 DMTP 228.997 renouvellementde materiel

65. Entretien per'odique des routes bitumees Feb. 86 BGR 228.998 quantites de travaux d'apras l'analyse visuelle de 1985

66. Liste definitive pour le 2eme programme Feb. 86 DRR 228.999 des routes rurales

67. Proposition pour la 1lre campagne des Feb. 86 Comite 229.000 routes rurales Inter- ministeriel

68. Routes secondaires au Niger, Dossier de Jun. 83 UNSO n.a. presentation

69. Transports Publics urbains, Niamey, Phase II Nov. 85 BCEOM n.a. - vii -

WAIC No. Item Date Author Doc. No.

70. DeuxiZrme programme des routes rurales au Jan. 86 BCEOM n.a. Niger, Evaluation economique

71. List of National Roads Sections Oct. 85 DTP/BGR 229.001

72. Economic Analysis of Paved Roads Proposed Mar. 86 DTP/BGR 220.002 for Periodic Maintenance

73. Program for Computing Life Cycle Costs and Feb. 86 W. Paterson 229.003 Economic Indicators by Project for BGR: Flow Chart Outline

74. Echeancier des depenses previsionelles Mar. 86 DTP/DET 229.004

WAPT2 April 1986 NIGER

TRANSPORTSECTOR PROJECT

CREDIT AND PROJECT SUnMARY

Borrower: Republic of Niger.

Beneficiary: Ministry of Public Works and Housing.

IDA Credit Amount: SDR 13 million (US$15 million equivalent).

Special African Facility Amount: SDR 13 million (US$15 million equivalent).

Terms: Standard IDA terms.

Project Description: The main objective of the project is to assist the Government in implementing its transport sector strategy which was developed as part of its Structural Adjustment Program. This strategy aims at the fol- loving objectives: (a) redirecting public expenditures to highest priority activities; (b) increasing user cost recovery; and (c) consolidating the institution building initiated under previous IDA projects.

To achieve these objectives, the project will support:

(a) Policy actions by the Government including:

(i) adoption of a detailed four-year expenditure program for the sector, including both investment and recurrent costs;

(ii) adoption of economic selection criteria for new subprojects to be implemented through this program;

(iii) annual implementationreviews and adoption of agreed annual work programs;

(iv) annual revision of equipment rental rates; and

(v) implementationof an agreed action plan to improve cost recovery;

(b) Financing of priority civil works on the highway network consisting of: x

(i) annual resurfacing and strengtheningpro- grams on paved roads;

(ii) annual regravellingprograms on unpaved roads;

(iii) rural and secondary road construction;

(iv) constructionof major high priority roads and bridges;

(v) routine maintenance of the whole network; and

(vi) consultant services for the preparation of pre-investment studies, detailed engineering, and supervision of items (i), (iii), and (iv) above;

Cc) Procurement of road maintenance equipment, workshop equipment and workshop rehabilitation;and

(d) Institutional development, including technical assistance, support for operating costs, and studies.

Rate of Return: With the exception of ongoing activities,no construction or rehabilitationprojects would be included in the program unless they can be shown to have rates of return exceeding those calculated for periodic maintenance, which range from 14% to 130%. Secondary and rural road constructionwould be limited to roads with rates of return not less than 10%.

Project Benefits: Policy changes to be implemented under the project would improve revenue performance and resource allocation; in particular, they would bring allocations for road maintenance into line with future needs. The institutionbuilding component would enhance the capacity of the Ministry of Public Works in road management, equipment management, and staff development. The project's economic benefits are principally derived from a reduction in vehicle operating costs on the present road network. Additional, non-quantified benefits would be derived from the project's contribution to road safety and reduction in travel time. Timely replacement of the Gaya Bridge over the Niger river would assure the country's continued access to its principal external supply route from the coast. Secondary and rural road improvementswould encourage additional agriculturalactivity by providing transport links between food producing and consuming - xi -

areas. A pilot program in labor-based construction would also strengthen community self-help capacity.

Project Risks: The main risk is that the Government may not be able to provide sufficient local funds for routine road maintenance or for counterpart funding for foreign- financed investments. Specific cost recovery measures to minimize this risk have been included in the project as well as in the Structural Adjustment Pro- gram. Other risks include inadequate revenues from equipment rental, and failure to implement the proposed action plan to raise road user charge revenues. Particular attention, however, would be paid to these aspects during project supervision.

Planned Investments and Recurrent Expenditures (1985/86 - 1988/89)

Million USS Local Foreign Total

Construction: Primary Roads 12.7 38.1 50.8 Secondary Roads 3.6 10.8 14.4 Rural Roads 2.9 8.9 11.8 Rehabilitationand Periodic Maintenance 16.2 48.7 64.9 Equipment and Workshops 0.8 7.1 7.9 Consulting Services 1.8 3.5 5.3 Investment Sub-Total 38.0 117.1 155.1 Routine Maintenance 7.3 13.8 21.1 Program Sub-Total 45.3 130.9 176.2 Price Contingencies 9.4 27.3 36.7 Total Program Expenditures 54.7 158.2 212.9 == =_ == - xii -

Suimary Financing Plan

US$ million

Government 27.6

IDA/SAF Transport Sector 30.0 Special Joint Financing (Japan) 20.0 IDA Feeder Roads 1.7 IDA Fourth Highway 3.0

Confirmed Finsincirg EDF 39.4 AfDF 16.8 IDB, Saudi Fund, ABEDA, OPEC Fund 24.2 CIDA 19.6 CCCE 7.8 UNSO/Norway/Italy 11.4 UNDP 0.5

Financing to be identified: 10.9 212.9

Estimated Disbursements (US$ million equivalent)

FY1987 FY1988 FY1989 FY1990 FY1991 FY1992 FY1993

IDA Credit

Annual 0 0 0 0.5 8.0 5.0 1.5 Cumulative 0 0 0 0.5 8.5 13.5 15.0

SAF Credit

Annual 3.0 10.0 2.0 ------Cumulative 3.0 13.0 15.0 - -- -

Staff Appraisal Report No.: 5980-NIR

Maps: IBRD 19198 - Transport Sector Project

WAPT2 April 1986 NIGER

TRANSPORT SECTOR PROJECT

STAFF APPRAISAL REPORT

I. INTRODUCTION

A. Background

1.01 Niger is a landlocked country in sub-Saharan Africa, located in the Saharan and Sahelian climatic zones. It is a large country (1.3 million km2) with a small, relatively mobile, and rapidly growing population estimated at 6.5 million in 1985. Most of the population lives in the southern part of the country where rainfall is normally sufficient to support agriculture. Rainfall is limited (150-750mm) and often irregular even in tie agriculturalzone, and soil fertility is low and declining due to intensive use. Per capita GNP was estimated at US$190 in 1984. Niger's social indicators are among the lowest in the world. Life expectancy at birth, which is only 43 years, is low even by African standards. In 1984, the adult literacy rate was only 14% (8% for women), and the primary enrollment ratio not more than 25%, the lowest in Africa.

B. The Economy

1.02 Like other Sahelian economies, Niger's is dominated by subsist- ence agriculture,with millet and sorghum accounting for 80% of the culti- *.atedarea. Livestock is also an important source of income for a large segment of the population and is one of the country's major export commo- dities. Despite its meager agricultural resource base, Niger has tradi- tionally been self-sufficient in food production except during the Sahelian drought in the early 1970s and again in recent years. The discovery of large uranium deposits in the late sixties and their development propelled the mining sector into an important position in Niger's economy. The sector is now the country's principal foreign exchange earner and an important source of Government revenues.

1.03 Niger belongs to the West African Monetary Union which provides its members with a common currency (the CFA franc) fully convertible into French francs. The full convertibility of the CFA franc and the liberal foreign trade policies pursued by the Monetary Union members have kept the Nigerien economy very open in the past. In addition, participation in the Union has helped Niger to maintain discipline over monetary and fiscal policies. Its position has been further strengthened by the strong trade links that have always existed between Niger and its southern neighbors, particularlyNigeria.

1.04 Since 1980 however, a decline in world prices for uranium, combined with recurring drought conditions,has created a situation of - 2 -

economic crisis. Revenues from uranium production have fallen drastically just as Niger is beginning to face the recurrent cost consequencesof earlier investment programs. Agricultural production has also declined. forc- ing Niger to supplement its domestic food supply with increasingquantities of grain imports. Production in the livestock sector, an important source of export earnings, has also been seriously affected by the drought. Niger's financial position is further complicatedby a large external debt, nearly half of which was contracted on commercial terms.

1.05 In 1982/83 the Government of Niger instituted an austerity program to meet the financial crisis. Demand management measures were instituted in the 1982/83 budget including a freeze in wages and salaries, cut- backs in supplies and investment expenditures, and tighter control on foreign borrowings. The Government's stabilizationprogram was subsequent- ly supported by three IMF Standby Credits, the last of which was negotiated in August 1985.

1.06 The Government'sinitial efforts have effected a significant reduction in the deficit through cutting back sharply on investmentexpendi- tures and limiting the growth of recurrent expenditures. However, due mainly to continuing drought conditions, real Gross Domestic Product (GDP) fell sharply in 1984. Poor harvests are estimated to have resulted in a record cereal deficit of about 500,000 tons for the crop year 1984/85. In comparison, the total magnitude of Niger's international trade was only about 350,000 tons per year before the drought. The outlook for 1985-86 is somewhat better. GDP is projected to recover some of its earlier decline and to grow by about 6%, due mainly to a strong recovery of the rural sector following recent abundant rainfall.

C. Structural Adjustment

1.07 Continued austerity will severely constrain Niger's development in the coming years unless accompanied by policy measures that will allow the country to restore and maintain at least a minimum level of growth in the medium term. The Government requested the assistance of the World Bank to formulate a program of structural adjustment. Intensive preparation work was undertaken by the Government, involving high level staff from all sectors. The resulting set of policy reforms and planned public expenditures formed the basis for a structural adjustment program, which was appraised in September 1985 and for which IDA and SAF credits were negotiated in December 1985 (PR No. 1485-NIR).

1.08 The first phase of the structuraladjustment program focuses on policy reforms in areas in which inefficienciesare most acute and where policy improvementswould have the greatest beneficial impact on the country's budgetary and balance of payments position: (a) public resource management; (b) the parastatal sector; and (c) agriculturalpolicy. The principal reform measure so far has been the preparation by the Government of a three-year budget program (1985/86-1987/88)which reflects policy improvements in four important areas: (a) restructured recurrent expenditures; (b) a rolling investment planning process; (c) expanded domestic resource mobilization; and (d) improved external debt management. The - 3 -

Government has also adopted sectoral strategy statements as a basis for making future investment decisions within each sector.

1.09 The policy reforms, public investment and recurrent expenditure progr.ms which will be undertaken under the structural adjustment program are the result of an intensive dialogue within the Government over national development objectives and priorities, as well as discussions between the Government, the Bank and the IMF concerning the most efficient means of achieving those objectives. Difficult choices have had to be made, and a high degree of continued commitment will be required to carry them out in a country with an increasingly fragile ecological base and a rapidly growing population.

1.10 While structural adjustment is essential in Niger to permit the economy to realize its productive potential, it is, in itself, not a sufficient condition to achieve sustainable long-term growth. A concerted development effort is required to reduce the country's severe resource constraints and to expand the productive base of the economy. Primarily, this will involve further development of the agricultural sector and, to a less- er extent, of the energy and mining sectors. It will also require the ac- celerated development of Niger's human resources in combinationwith an active program to slow population growth. Consequently, investment in the transport sector is expected to represent a smaller share of the total public investment program in the future.

II. THE TRANSPORT SECTOR

A. General

2.01 Adequate transportation is critical to Niger's current economy as well as to its future development. Niger is a landlocked country whose closest access to the sea is 600 km from its southern border. Internally, there are vast stretches of nearly empty land between major population centers, particularly those to the north. High transportationcosts, among other things, constrain the competitivenessof Niger's products on the world market and limit its capacity to develop its resources using techno- logies based on imported equipment and raw materials. They also add to the costs of delivering services to far-flung urban centers and to a sparse and scattered rural population.

2.02 Niger's transport infrastructureconsists of about 18,500 km of roads and tracks, five domestic airports, and the Niger River which is used only for small amounts of local traffic. Roads are the most important mode of transport and have absorbed a significant share of public investment since the country's independence. Roads account for 99% of planned government expendituresin the transport sector during the next three years. Government'splanned investments in air transport are limited to improving navigation and safety. The country has no railway or ports. Plans to develop river transport have been indefinitelypostponed.

2.03 Niger's access to the sea follows three main routes, large parts of which lie outside the country's direct control: (a) the Nigeria route (about 1,450 km from Zinder to the sea) which connects the central and eastern regions of Niger by road to Kano and thence by rail or road to the ports of Lagos or Port Harcourt;

(b) the Benin route (about 1,100 km from Niamey, Niger's ca- pital, to the sea) which connects Gaya by road to Parakou, and thence by road or rail to Cotonou; and

(c) the Togo route (about 1,350 km from Niamey to the sea) which connects Niamey by road through Burkina Faso to the port of Lome in Togo.

The Benin route is generally preferred for bulk cargo, but the Togo route provides an acceptable alternative for high value equipment and consumer goods. The Nigeria route has declined in importance as a link to the coast, but trade flows between Niger and northern Nigeria continue to generate substantial traffic despite the official border closing in 1985. All three of the main routes are currently being used to deliver emergency food aid to Niger. Theoretically,there are two other routes which could provide access to the sea. One connects Niamey by road to Ouagadougou in Burkina Faso and thence by road or rail to the port of Abidjan. Ivory Coast (about 1,715 km). The other links Agadez to the north through Tamanrasset and Ghardaia in Algeria to the port of Algiers (2,900 km). Due to the greater distances and consequently higher transport costs, these routes are little used at the present time.

2.04 Through an extensive program of transport sector investment which has been supported by the Bank through a series of credits, the Government has substantially fulfilled its initial objectives of creating a road network that would link the couatry's main centers of production and consumption, and setting up a road management and maintenance system. As part of its financial stabilization progran in recent years (see para. 1.05), the Government revised its sectoral objectives to: (a) complete ongoing operations; (b) conserve existing infrastructure; and (c) integrate isolated areas into the economy. Under the Government's structural adjustment program, these objectives remain substantially the same, but with an even greater emphasis on the preservation of the existing network.

2.05 Basic policies are formulated and decisions on transport investment are made in principle by the kMinistry of Planning, which also coordi- nates the necessary external financing. These proposals are subject to the approval of the National Council for Development. ULntil recently, all planning for transport development took place within the then Ministry of Public Works, Transport and Urban Development, which controlled the Depart- ment of Public Works (DTP), the Department of Land Transport (DTT), and the Department of Civil Aviation. In 1983, however, the DTT was transferred to the Ministry of Commerce, which became the Ministry of Commerce and Trans- port. Although legally responsible for transport sector planning, DTT has been chronically short of staff and resources and has barely been able to fulfill its routine responsibilities. Under the Fourth Highway Project, the Bank has supported the development of capacity for the planning, management and maintenance of the road network within DTP (see para. 2.31). 2.06 A National Transport Plan was prepared in 1977/78 and formed the basis for the identificationof priority projects in subsequent years. The need for updating this Plan was identified under the Fourth Highway Proj- ect. Terms of Reference for this study, which will be financed under the Bank's Technical Assistance Project (Credit 1493, July 1984), have been agreed with the Bank and the consultant has been selected. The study is expected to start in April 1986 and will be completed by March 1987.

2.07 Present transport capacity appears to be adequate to meet normal needs for passenger and freight traffic. However, the vehicle fleet is aging and the current balance of payments situation is making it difficult for vehicle owners to obtain credit with which to repair or replace them. In addition, the recent extraordinary transport demand arising out of the need to distribute imported food is placing a severe strain on current capacity. This demand, which may be a temporary phenomenon, helps to account for the persistence of high traffic growth rates in spite of stagnating agriculturalactivity.

2.08 For the present, public expenditures in the transport sector should give priority to routine and periodic maintenance of the existing road network, followed by repair or rehabilitationof critical sections and structures on primary roads. the rehabilitationof secondary roads serving populated areas, and the constructionof feeder roads in connectionwith well defined agriculturalprojects.

B. Road Network Development and Traffic Patterns

Road Network

2.09 Niger's classified road network, defined in 1968/69, consists of 6,758 km of national roads. There are, in addition, some 12,000 km of unclassified roads and tracks. Since 1969, the main road network has been continuously expanded and upgraded. In 1984 the road network for which DTP is responsible stood at 9,637 km. Operation and maintenance of the 697 km Tahoua-Arlit road has been contracted out to a subsidiary of the uranium mining consortium. The following graph shows the evolution of the network since 1968. More details are given in Annex 2-1. - 6 -

Niger - Evolution of the Road Network (in km)

10000 9000 8000 Total Network -. 7000_ 6000_ 5000_ 4000

3000 I.- 2000.

1000 .- 0 ~_ *,, . Roads* - *Paved

I I TI an1 r- 1 1 % a11 d i 1 ao r~~~~~~~~~00-e e~ ('1 bXa- Mu un an so O %D %DC Nof rb 1- r- r -rh r- f-X 0, X~ X X a 0% 0% 0%o 00%0%0% Co%0% cr% 0% 0't 00% 0% c0% 0% a - -_ - _ -_ _ -- _ .4--_ _ - _ _ -_ _ -

Presently, DTP directly maintains a "priority network" of about 7,000 km, including2,609 km of paved roads, 3.760 km of gravel roads, and approximately 600 km of improved rural roads.

Priority Road Network (in km)

Bituminized Unpaved Rural Roads Total

Classified 2,579 a/ 2,310 b/ -- 4.889 Unclassified 30 1,450 600 2,080

Total 2.602 3 760 600 6X969

a/ Includes Zinder-Tanout,140 km, under construction. bl Includes Tanout-Agadez, 290 km. Does not include classified,unmaintained tracks.

2.10 The network is concentrated in the south where the majority of the population and most of the economic activity are found. The nearly uninhabitedareas of the north are only sparsely served (Map IBRD 19198). Niger's terrain is mostly flat or undulating and, apart from the River Niger, normally presents no major physical barrier to land transport. Rainfall,though scarce, can be intensive,and rapid runoffleads to occa- sional flash flooding which may cause serious damage to structures.The generallysandy soils providea good foundationfor road construction, but in some areas base coursematerial is scarceor must be moved over long distances(and sourcesof water found)in order to build or resurface roads. Loose,blowing sand has recentlybecome a problemnorth of Tahoua, adding considerably to the costs of routineroad maintenance. Traffic 2.11 Traffic countshave been carriedout on the road networkin three campaigns since independence. Traffic volumes were originally very low and are stillmodest. Between1964/65 and 1976/77,traffic growth averaged about 8% per year. However, based on recent traffic counts on links programmed for periodic maintenance, it appears that traffic has grown rapidly in recent years (Map IBRD 19198). On those links, preliminary results indicate an average growth rate of 22% per year on paved roadsand 20% on unpavedroads from 1976/77to 1984/85. Even so, trafficlevels are still relatively low; the most heavily trafficked roads have less than 1,000 vehicles per day. Light vehicle traffic (automobiles,vans, small buses, and light trucks) has, in general, grown faster than heavy vehicle traffic. Annex 2-2 contains further details on the results of the traffic survey.

2.12 The following graph and Annex 2-3 show vehicle registration statistics for 1970-1984.

Niger - New VehicleRegistrations. 1970-1984 (excludesmotorcycles) 4000_

3000_

2000_

1000

_ I T I I I I I I I I I r l I 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

From 1970 to 1976 the vehicle fleet exhibited a steady growth rate of about 10% per year. This rate rose to around 14% in 1977-1980 but has since declined to less than its 1976 level. - 8 -

2.13 The graph below and Annex 2-4 show the historicalpattern of fuel consumptionfor gasolineand diesel fuel.

Niger - Fuel Consumption, 1970-1984 (in '000m)

('000ml) 150

135_

120 .

105

90 75_ Diesel ~

60-

30-

15 Gaso (including Super)

_- _ | | W ]X_l T 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

This graph also showsa distinctdeclining trend since 1980 corresponding to the generaldecline in economicactivity during this period. A further explanationof this trend lies in the ready availabilityof cheaperfuel from northernNigeria, the consumptionof which is not includedin official statistics.

C. The Road TransportIndustry 2.14 Niger has an activeand diversifiedtrucking industry which has benefitedsubstantially from past improvementsin the road network. Of the roughly1,000 trucksengaged in publicfreight transport, about half are owned and operatedby the parastatalSociete Nationale des Transports Nigeriens(SNTN) and the rest by small privatetruckers, most of whom own only one or two vehicles. SNTN handlesmuch of the long-distancefreight traffic,including all of the uranium-relatedimports and exports. It also operatesurban and intercitybus lines. SNTN'sperformance was reviewedby IDA consultantsin 1984 and it was found to be well managed,efficient and financiallysound. SNTN is fully autonomousand obtainsmost of its work throughcontracts in competitionwith the activeprivate sector. As part of the Goverment effortto reduceits directinvolvement in economic activity,the Governmentis committedto reduceits equityshare in SNTN, a commerciallyviable organization with mixed public/privateownership. .9-

2.15 There are some 350 smaller truckers, most of whom are grouped in the National Union of Transporters (SNT). During peak periods SNTN will subcontract some of its business to small, individual truckers through SNT. Public passenger transport witbin and between urban areas is largely provided by private operators of taxis, vans and minibuses. Rural areas are served, where roads exist, by "bush taxi" and trucks. Pedestrian and ani- mal transport are also significant.

2.16 The Government does not enforce tariffs for road transport, except for the transport of petroleum products. However, it does provide official rates which serve as a ceiling on actual charges. Some types of long-dibtancefreight originating at the railhead in Parakou (Benin) are subject to tariffs imposed by the bi-national organizationthat operates the Cotonou-Parakourailway. For domestic freight, tariffs are usually negotiated on a case by case basis. The prevailing competitionamong truckers means that most of the savings in vehicle operating costs due to road maintenance will be passed on to consumers. This is also true for passenger transport.

2.17 Authorizations for public transport operators are issued by DTT upon presentation of appropriate documentation, including proof of payment of commercial license fees and taxes which are collected at the municipal level. (See Annex 2-5 for details of charges pertaining to the road transport industry.) In principle, only Nigerien citizens are allowed to form public transport companies; however, foreigners may do so with special authorization. Freight transport vehicles are required to be inspected twice a year, and passenger transport vehicles four times a yea.:.

2.18 In the past two years, a severe strain has been placed on Niger's private and public trucking capacity by the need to transport large volumes of imported food grains on a regular basis to remote areas of the country. At times the distribution effort has completely absorbed private capacity and military and other Government vehicles have been pressed into service, including those assigned to development projects. The direct and indirect cost to the country has been staggerirn. In mid 1985 it was estimated that over 200,000 tons of food aid needed to be distributed before the rainy season, at a global transport cost of nearly CFAF 2 billion. Annual transport costs associated with the distribution of all food imports, including purchased food grains, are therefore probably on the order of CFAF 5 billion. However, the Government projects decreasing volumes of food imports for the future. Any plans for renewing or expanding the vehicle fleet should therefore be carefully evaluated in the light of alternative sce- narios for food grain supply in the future. - 10 -

D. Public Expendituresand Subsector Financing

2.19 The past and projected growth of public investment in the roads subsector is shown below.

Niger - Past and Projected Public Investment in the Roads Subsector (in billion CFAF)

Investment (billion CFAF) 30

24_

0 ______= I I i I 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90

The peak in 1979-80 corresponds to the major construction program undertaken when uranium revenues swelled the National Investment Fund. Periodic maintenance of both paved and gravel roads is included in the investment program rather than in recurrent expenditures for national budgeting purposes, and is financed from the government investment budget and external assistance. Details of past and planned levels of investment are given in Annex 2-1.

2.20 The following graph shows the evolution of recurrent maintenance expenditures in relation to projected needs. - 11 -

Niger - Recurrent Maintenance Expenditures in Relation to Needs (billion CFAF)

4. 00_

3.00,

,."",'

2.00 Needs -~ _ sProjected' A { ~~~~Expenditures

1.00 ~~~~~~Actual Expenditures 0.00~~~~~~&A ______

01, oo i I - I I I p I I I p I Years 7172 737475767778798081823848586878889

- 0 es e -. D .0 .0W-. _n 0 l UP r- M .0 0 1- P- eW o - es t eP IS X 0 as (q e, O Needs ...... ! ! :…N C. . o0 o0 0o 0 -t - - - - - _- -e - -

.0.0 .0 IS.0 1. W W 0' . w -s U Actual Expenditures

.l o f- Mi 0o Projected ; ; " N Expenditures

In recent years, due to declining revenues, the Government has not allocated sufficient operating funds for routine maintenance and regravelling carried out by force account brigades. This graph does not include the salariesof permanentstaff, which appear in the administrativebudget.

2.21 Financialrequirements for road maintenancehave grown in res- ponse to expansion of the network under maintenance and increasing equipment and operating costs. The expenditure program agreed under the structural adjustment program, in addition to the road investment program, includes recurrent expenditures on road maintenance amounting to CFAF 5.5 billion over the 1985/86-1987/88period. This amount is less than the needs foreseenunder the ongoing FourthHighway Project (Credit 1394-NIR, September 1983) and will not be sufficient to maintain the present network in good condition. However, the agreed road maintenance budget represents a major increase (19% in each year) over the funds allocated in 1984/85 to road maintenance,and is an appropriateallocation of resourcesgiven current financialconstraints. This justifiessome externalbudgetary support duringthe projectperiod in order for the full routinemaintenance program to be carried out. Maintenance budget allocation requirements under Credit 1394-NIR will be modified to conform to those agreed under the proposed credit. Financing of part of incremental operating costs is therefore included in the proposed project. - 12 -

E. Road Policy Formulation and Planning

2.22 In principle, the DTT in the Ministry of Commerce and Transport is responsible for road sector policy formulation in consultation with the Ministry of Planning. In reality, the DTP in the Ministry of Public Works and Housing, which implementsmuch of this policy. also has considerable influence over policy formulation. DTP is in a better position to finance and control the execution of pre-investmentstudies and sector plans. There is now a full-time economist attached to DTP who is responsible for participatingin all such studies, and another who is working primarily on rural road project selection. The transport plan study to be financed under the ongoing technical assistance project will provide recommendations for future administrativearrangements concerning responsibilityfor policy formulation and implementation.

2.23 Responsibility for data collection and analysis leading to the formulation of annual plans and work programs for periodic maintenance rests with the Road Management Unit (BGR) in the Department of Public Works. This organization was set up with technical assistance under the Fourth Highway Project. Its responsibilitiesinclude conducting a network inventory and classificationaccording to physical condition, establishing a system of periodic traffic counts, and collecting data on axle load cha- racteristicsand vehicle operating costs. On the basis of these measurements, and using a Dlanning model derived from the Bank's Highway Design and Maintena-_e Model (HDM), the BGR develops annual work programs for periodic maintenance of roads with the highest economic priority. The BGR is also responsible for Analyzing the cost accounting data to determine the costs of standard periodic maintenance procedures by section and type of road, preparing annual budgets for periodic maintenance, and developing a financing plan. The BGR will also collect data on road user charges and the road transport industry, in order to assist in the formulation of fiscal policy for the transport sector.

2.24 The first major task of the BGR has been the preparation of the periodic maintenance portion of the present project. The BGR has successfully completed a detailed visual inventory and roughness measurement program, as well as traffic counts, on roads identified on the basis of age and reported condition as candidates for periodic maintenance. Specific maintenance strategieshave been defined for each road in relation to its condition and traffic level. The BGR has recorded data from consultant studies concerning vehicle user costs. It does not, as yet, have data on axle load characteristics,nor has it collected any new data on user charges and the road transport industry. Data from the cost accounting system have been used to develop the cost estimates for this project.

2.25 Planning for rural road improvementsis done within the Feeder Road Division (DRR), which operates three constructionbrigades under the IDA-financedFeeder Roads Project (Credit 886-NIR. April 1979). The final selection and design of rural road improvementsfor the Feeder Roads Proj- ect, were carried out by consultants,based upon a list established by an interministerialcommittee. Studies for the selection of roads to be improved under this project are being carried out by a consultant in - 13 -

cooperation with local staff of the DRR. Secondary roads improved under the United Nations Sudano-Sahelian Organization (UNSO)project in the past have been selected by Government according to social and political priorities. Under the proposed project, however, economic criteria will be introduced in the process of selection of secondary roads for rehabilitation.

F. Organization, Staffing and Training

2.26 The Ministry of Public Works and Housing (MTPH) is responsible for managing Niger's road network. It carries out this responsibility through several well functioning departments, including Public Works (DTP), Equipment (DMTP) and the National Laboratory (LNTPB) (OrganizationCharts Annexes 2-6 through 2-8). Planning, economic evaluation, design, costing, procurement, construction supervision and maintenance are the responsibility of DTP. For major improvement projects DTP employs consultants for planning, economic evaluation and design studies, and for construction supervision. The monitoring and control of the consultants by DTP is satisfactory. Minor improvement projects are prepared by the DTP studies section, and supervisedby the district engineer concerned.

2.27 Periodic maintenance of paved roads is executed by expatriate and local contractors,with consultant supervision. Periodic and routine maintenance of gravel roads is executed by four force account crews which cover the whole country. Recurrent maintenance is planned and executed by the public works districts and subdivisions. Quality of works is good but the quantity accomplishedannually is less than adequate, primarily because of decreased budget allocations to these items in recent years (para. 2.20). The proposed project will address this problem through direct budget support as well as through agreed annual increases in local budget allocations.

2.28 DMTP is a semi-autonomousagency within the Public Works Ministry, responsible for the establishment,management and repair of the equipment fleet of the Ministry. Road maintenance activities have first priority in the use of DNTP's equipment,but available equipment can also be rented to other agencies, local authorities,or even private contractors. In recent years, the Government has not increased the rental rates as needed to cover the increasing costs of equipment, and this deficiency has not been made up by the subsidy component of the department'sbudget, the BAEMTP. The fleet and workshops have therefore deteriorated and some of the equipment is now in need of rehabilitationand replacement. Equipment rental rates will be increased in connectionwith the proposed project. Details of DMTP's performance are provided in the project file. in order for the recent decision to decentralize DMIP services to lead to an effective operation, the tasks to be carried out in the regions need to be strictly limited, and the central services of operations and maintenance policy need to be made effective. Other areas where Improvementswould lead to better performance include better record keeping and Inspection, improvement to buildings and reequipping the workshops, training, and replacement of some vehicles and equipment. These items will be addressed both under the ongoing Fourth Highway and the proposed Sector Project. - 14 -

2.29 DTP and DMTP provide permanent employment to about 1,100 people, including about 80 higher level staff. These departments also employ roughly 500 day laborers on a temporary basis to carry out maintenance operations. The salaries of permanent Public Works employees are paid from the administrativebudget and, including social overhead costs, represented public expendituresof nearly half a billion CFAF in 1984/85. Day laborers are paid from the operating budget, and consequently the employment benefits of constructionand maintenance activities depends on adequate allocations for this budget.

2.30 The level of literacy in Niger is still very low (14X in 1984), as is the primary school enrollment ratio (25%). There are few facilities for secondary and higher level technical education in the country. At the professionaland senior technical level, staff must still go abroad for training. Some mechanics, surveyors, and bookkeepers join DTP after at- tending Nigerien training schools, but many are recruited with no professional training, nor much basic education. These factors make it difficult to carry out a specialized training program for Public Works without addressing the need for basic and general technical education on the part of many staff.

2.31 IDA has provided continuous support to maintenance training activities through the First, Second, Third and Fourth Highway Projects as well as the Highway Maintenance Project in Niger. While the training components have typically experienced delays and fallen somewhat short of their targets, the cumulative effect has been quite positive. MTPH now plans to expand the scope of the training program to cover skills needed in the constructionand urban planning departments. A training center financed under the Fourth Highway Project is nearing completion and a permanent local capacity to plan and conduct training has been established. The training program for 1986/88 and subsequent years is shown in Annex 2-9. The need for technical assistance in training has decreased substantially over time, but specialized expertise is still needed in some areas.

G. User Charges and Cost Recovery

2.32 Road user charges in Niger presently cover more than the estimated annual cost of routine maintenance needs, but only a portion of periodic maintenance needs, which are expected to increase considerablyin the next few years. Annual revenues from road user charges are currently estimated at about CFAF 4.3 billion, 75% of which is generated by fuel taxes. (Details of present road user charges are given in Annex 2-5.) These revenues are lower than might b-eexpected in view of traffic levels, due to the ready availabilityof fuel through unofficial channels across the border in Nigeria. In contrast, annual maintenance expenditure requirements are expected to be about CFAF 7.6 billion in 1985 prices for the present network. An Action Plan will be prepared to increase revenues from road users to a level commensuratewith annual maintenance needs (para. 3.16).

2.33 A Road Fund for Niger was created by law in 1961. Through this mechanism, revenues from gasoline and diesel taxes were earmarked for road - 15 -

expenditures. In 1964, however, the law was modified to assign these revenues to the investment budget. In 1969 the Road Fund was repealed and its resources were assigned to the newly created National Investment Fund, which financed the local cost component of the national investmentbudget. In 1976 these revenues reverted to the general budget. There is no clear consensus now on the part of the Government of Niger regarding the merits of a Road Fund. As part of the structural adjustment program, the Govern- ment has agreed to a public expenditure program including substantially increased allocations for routine road maintenance, and disbursementof each annual tranche of the Structural Adjustment Credit will be contingent on satisfactoryperformance in this area. Under these circumstances,revival of the Road Fund is not recommended at this time.

2.34 The dramatic decline in world market prices for petroleum since the Niger price structure was last determined means that the Government should soon be capturing a much larger share of the retail price. The effective saving amounts to about CFAF 25 per liter of fuel. Assuming that official consumption of fuel remains stable and that the true border price of petroleum does not increase significantly in the next few years, the windfall profit will amount to a minimum of CFAF 1.7 billion in each year, assuming a decline of about US$10 per barrel of crude oil between 1985 (average)and the coming yea-L.. In addition, the border price of fuel used in setting the retail price in Niger seems significantlyhigher than it should be, based on world market prices prevailing in 1985, a discrepancy on the order of CFAF 30 per liter. Revenues resulting from this discrepancy are not presently channeled into the general budget. In connection with the recent evaluation of the third IMF Standby Credit for Niger, the Government has agreed to assign CFAI 1.0 billion from the windfall profit to general budgetary revenwes for the next year. Further actions to increase cost recovery within the sector are discussed in paras. 3.17 and 3.18.

H. Experience with Pact Lending

2.35 IDA has financed seven projects in the transportationsector in Niger: four highway projects, one road maintenance project, one feeder road project, and one project for airport improvement. The First Highway Project (Credit 55-NIR, US$1.5 million, 1964) supported the design and constructionof about 60 km of laterite roads serving the Zinder region. It was satisfactorilycompleted in 1969. The Highway Maintenance Project (Credit 128-NIR, US$6.5 million, 1968) provided for a phased reorganization of the routine road maintenance and equipment services, training, and elimination of the backlog of deferred maintenance. It was generally successfully completed, except for the training component which suffered severe delays.

2.36 The Second Highway Project (Credit 231-NIR, US$6 million, 1971) provided for the constructionof 140 km of roads identified and designed under the Highway Maintenance Project. It closed in 1975, one year and seven months later than expected. The project had a 12% cost overrun which was partially financed by a supplementaryIDA credit. However, the project showed a higher rate of return than originally expected. - 16 -

2.37 The Third Highway Project (Credit 612-NIR, US$6 million, 1976, with co-financingof US$7 million from the Arab Bank for Economic Devel- opment in Africa (ABEDA) and US$3.6 million from the African Development Fund (AfDF) supported the organization of force account crews for a four- year road regravellingprogram, as well as the constructionby contract of two paved roads linking densely populated agriculturalareas to markets in Nigeria, a study of the domestic constructionindustry, and institutional support for the routine maintenance of paved roads. This project was closed in March 1985, one year and nine months later than expected. The regravellingprogram covered fewer kilometers than planned, mainly due to inadequate Government funding of operating costs. However, substantial savings in constructioncosts made it possible for IDA to reallocate funds for expanded technical assistance, training, and needed additional equipment.

2.38 The Fourth Highway Project (Credit 1394-NIR, US$21.9 million, 1983) provides for strengthening and resurfacing about 374 km of paved roads, technical assistance and equipment to establish a road management unit, and civil works, equipment and technical assistance to establish and operate a training center. This project is being implemented in a satisfactory manner and is currently expected to close on schedule and within cost.

2.39 The ongoing Feeder Road Project (Credit 886-NIR, US$10 million, 1979) supports the constructionand subsequent maintenance of about 1,000 km of feeder roads serving agriculturalareas. It has assisted in the creation of a feeder road unit within DTP and provided support through technical assistance and training. The project was reformulated in 1981, reducing the targeted output. Since then the project has proceeded slowly and the closing date has been extended by two years to June 1986. A mid- term evaluation carried out by consultants in January 1984 showed that four out of five completed roads have had a potitive impact on the country's economy.

2.40 The Association also helped to finance a project for the modern- ization and extension of Niamey A'rport (Credit 473-NIR; US$5 million, 1974). The project was successfully imp'emented and closed in 1978. The re-estimatedrate of return was higher than originally forecast. However, the airport authority's financial performancewas below expectations. Niger continues to enjoy the benefits of improved safety and service by larger aircraft, including increased revenues, lower freight tariffs, higher volumes of international passenger traffic, and avoided costs of feeder services. There has been no further lending to Niger in the air subsector.

2.41 IDA's successful experience with institution building for the transport sector in Niger was prominently featured in Institutional Development in Africa: A Review of World Bank Experience (OperationsEvalu- ation Department Report No. 5085, May 17, 1984). More details on the Bank's past experience with transport sector lending in Niger can be found in Annex 2-10. - 17 -

III. THE ROAD PROGRAM AND THE PROJECT

A. Rationale

3.01 The structural adjustment program described above includes sectoral strategies and targets for restructuring the Government's expenditure program and improving resource mobilization. The strategy and expenditure targets for the transport sector reflect substantiallyrevised sectoral priorities. First, Government recurrent expenditure for road maintenance will increase significantly to preserve the utility of existing investments. Second, the share of the transport sector in the total investment program is reduced relative to previous years. No new construction is included after ongoing projects are completed, except for economically viable, low-standardrural roads associated with agricultural projects and paving of the Niamey-Say road, expected to have an economic rate of return (ERR) in excess of 15Z.

3.02 The agreed three-year expenditure program now gives adequate emphasis to maintenance, assuming that local expenditures for routine road maintenance are supplemented by external financing on a declining share basis. The three-year targets cover the implementation period of the structural adjustmentprogram, 1985/86 through 1987/88. The Transport Sector Credit program extends the period by one year, through 1988/89. However, since IDA/SpecialAfrican Facility (SAF) disbursements on t1- Transport Sector Credit would not begin until after the next financial year has started in October 1986, project disbursementswould only cover the 1986/87 through 1988/89 annual programs.

3.03 The structural adjustment framework for sector investment planning, combined with DTP's good record in implementingprevious IDA projects, provides a sound basis for the proposed Transport Sector Project. The objective of the project is to assist the Government in implementing its sector strategy, which aims at the following objectives:

(a) redirecting public expenditures for roads to highest priority needs, mainly in routine and periodic road maintenance;

(b) increasing road user cost recovery to a level commensurate with increased road maintenance needs; and

B. Project Components

3.04 The project consists of a policy component, a physical work program, procurement of equipment and workshop rehabilitation,and an institutional strengtheningcomponent. - 18 -

Policy Component

3.05 The policy component deepens and extends the measures agreed between the Government and IDA in the context of the StructuralAdjustment Program. Under this project, the transport sector expenditure program is set out in detail for the first two years (1985/86 and 1986/87) and in an indicative fashion for the following two years (1987/68 and 1988/89). Subproject selection for the later years would be made according to agreed criteria. Implementationexperience, annual work programs, and forward planning on a three-year rolling basis would be monitored through annual reviews with IDA.

3.06 The structural adjustment program also includes a Government commitment to increase its contributionto recurrent road maintenance expendituresby 19% per year over the period 1985/86 to 1987/88, cc..sider- ably faster than any other item in the recurrent budget. While this step is acceptable consideringNiger's financial constraints, it alone will not provide sufficient funds to meet routine maintenance needs for the whole network. This project extends the Government's commitment regarding maintenance to 1988/89, and provides funds to fill the gap between Government allocations and network needs on a declining share basis over the project period. Furthermore, under the structural adjustment program, the Govern- ment has made a commitment to improve its performance in cost recovery. Under this project, the Government would implement an Action Plan with the general objective of meeting all estimated maintenance expenditures through user charges by 1990, as discussed in paras. 3.16-3.18 below. The Gov- ernment would also make annual revisions of its equipment rental rates to recover full costs from users and to eliminate the present budget subsidy.

3.07 Sectoral Strategy. The Government has adopted a sectoral strategy statement under the structural adjustment program which is shown in Annex 3-1. This strategy statement spells out the priority to be accorded to maintenance and rehabilitation of the existing road network, followed by constructionof economicallyjustified secondary and rural roads.

3.08 Transport Sector Expenditure Program. The agreed transport expenditure program is shown in Annex 3-2. It represents about CFAF 77 billion (US$213 million) over four years, including both investmentand recurrent costs. The investment correspondingto the structural adjustment program years amounts to CFAF 45.2 billion (US$126 million). Of this, approximatelyCFAF 4.4 billion represent expenditures for works already completed that will be charged to the budget for FY1984/85. This brings the transport sector investmentprogram for the structural adjustment period to CFAF 40.8 billion or 14.7% of the total investment program for this period. This represents a substantial reduction over earlier years when transport investment has reached as much as 27% of the total.

3.09 The detailed composition of the 1985/86 program is fixed by the already adopted budget. It includes no IDA/SAF disbursements under the present project, which is unlikely to become effective before the next fiscal year begins in October 1986. The detailed expenditure program for 1986/87 and the indicativeprograms for 1987/88 and 1988/89 were agreed at negotiations (Annex 3-2). The allocation of funding for the latter years - 19 -

is intended to be flexible, with specific subprojects to be selected annually on the basis of agreed criteria.

3.10 Subproject Selection. Periodic maintenance during the first program year has been limited by financial constraints to a small amount of force account regravelling. Periodic maintenance subprojects for the remainingprogram years have been selected by the BGR. Candidate roads for inclusion in the detailed data collection program were originally selected on the basis of a detailed visual inspection. They were then ranked in order of economic priority using the Highway Design and Maintenance Model. The second year program contains the highest priority roads defined within the limits of financing possibilities. The results of this analysis have also yielded an indicative program of periodic maintenance for the third and fourth project years. These programs will be updated annually based on current road conditions and traffic counts. Roads accepted for each annual periodic maintenance program will have a rate of return of at least 12Z.

3.11 A major policy objective of the proposed project is to ensure the selection of new investments according to economic criteria, and to enhance their complementaritywith other, more directly productive investments. A ceiling of CFAF 12 billion over four years would therefore be set within the sector investment program for secondary and rural road improvements, including Phase III of the UNSO program. Selected subprojects would have a rate of return of not less than 10% according to the rural road evaluation methodology. Rural roads in the first year program are roads that were evaluated in 1978 for inclusion in the First Feeder Roads Project. Rural roads for the second, third and fourth years will be selected, from a priority list established by an interministerialcommittee, on the basis of their economic priority.

3.12 Other subprojects in the first and second year programs have beer selected taking into account present commitments, sectoral priorities under the structural adjustment program, and economic criteria. The program for each succeeding year would be discussed and agreed as part of the annual review of performance under the structural adjustment program.

3.13 Annual Reviews. About six months before the beginning of each budget year during the project implementationperiod, the Government would review with IDA its implementationexperience for the previous year, progress on the cost recovery action plan, policy changes implemented during the past year and policy choices to be made during the coming year, and would agree with IDA on the detailed expenditure and work program and cost recovery targets for the following year, as well as on a three-year forward plan for investments and recurrent expenditures. The Government would submit to TDA by March 31 of each year the expenditure program, physical work program, and proposed cost recovery target for the next fiscal year, and the three-year forward plan. Hcvever. as the results of the Transport Study will not be available until early 1987, the Government will not submit a cost recovery target for 1987/88 until June 30, 1987. Prior agreement with the Association on each annual work and expenditure program and on the cost recovery target for that year, as well as on the three-year forward plan, would be a condition for continuing disbursement - 20 -

for civil works for road construction and maintenance under the IDA and SAF credits.

3.14 Recurrent Expenditures. The amounts needed for recurrent expenditures associated with the routine maintenance of paved and gravel roads vill be about CFAF 2.24 billion in 1985/86, CFAF 2.37 billion in 1986/87, CFAF 2.55 billicn in 1987/88, and CFAF 2.73 billion in 1988/89. The Government has allocated CFAF 1.53 billion for 1985/86 and has agreed to increase this amount by 19% per year during the structural adjustment period (para. 3.05). Thus, Government allocations will be CFAF 1.80 billion in 1986/87 and CFAF 2.16 billion in 1987/88. Under this project, the Government would continue increasing this allocation at this rate through 1988/89 to CFAF 2.57 billion. In support of the Government's efforts, IDA/SAP would finance the difference between the recurrent cost maintenance needs and the amountwhich the Government is able to allocate, starting in the second program year. IDA/SAF allocations would total CFAF 0.57 billion in 1986/87, CFAF 0.39 billion in 1987/88, and CFAF 0.16 billion in 1988/89, representing a declining share of the total recurrent road maintenance budget, from 25% in 1986/87 to 6% in 1988/89. In the following year, the Government should once again be able to assume full responsibilityfor the recurrent costs of road maintenance.

3.15 Equipment Rental Rates. As noted in para. 2.28, equipment rental rates are too low. In order to put the DMTP on a sound financial footing, the Government would adopt a revised schedule of equipment rental rates for fiscal year 1986/87 as a condition of project effectivenessand would adjust equipment rental rates annually thereafter. The rates would cover operating costs, maintenance and repair costs, and depreciation on the basis of replacement value. This may require corresponding increases in the DTP budget.

3.16 Cost Recovery. Currently, the Government receives in user charge revenues considerablymore than it spends on routine road maintenance. However, in addition to routine maintenance, such revenues cover only about 50% of the annualized needs for periodic maintenance of the paved road network or for regravelling. Under this project the Government would improve its cost recovery performance through a series of measures which, taken together, would constitute an agreed Action Plan. These measures may include: (a) improved data base and revenue collection procedures; (b) increased revenues from petroleum products; (c) increased charge. for Govern- ment services associated with transport (vehicle registration,licensing, inspection); (d) a toll on traffic crossing the Gaya Bridge; and (e) a tax on passenger travel. A first step was taken in 1985 when the Government reallocated a share of the petroleum revenues from its price stabilization fund to the general budget. This measure alone should result in a 35% to 40% increase in budgetary receipts from road user revenues in 1985/86.

3.17 The recent decline in world market prices for petroleum might be expected to result in a windfall profit for the Government, estimated at a minimum of CFAF 1.7 billion per year (para 2.34). Under the project, the Government would agree not to pass on these savings to consumers. and to channel a portion of the savings into general budgetary revenues. Recent action by Government in assigning CFAF 1.0 billion from the windfall profit - 21 -

to the general budget will increase road user revenues by a further 25% in 1986/87. The Governmentwould also undertake actions to improve revenue collection, and, if recorded consumption of fuel does not increase, may have to increase petroleum taxes in the later project implementationyears.

3.18 The Governmentwould agree with IDA by June 30, 1987 on an action plan to increase budgetary revenues from road user charges to cover 100% of routine and annualizedperiodic road maintenance needs by 1990. This target means that revenues should be raised from an estimated CFAF 4.3 billion per year in 1984/85 to about CFAF 11 billion per year in 1989/1990,an increase of about 160Z in financial terms over the five-year period. Achievement of the cost recovery target depends partly upon changes in relative fuel prices between Niger and neighboring countries. Annual targets would be reviewed and, if necessary, revised in the context of the annual sector policy discussions.

3.19 Transport Study. During the project period, the Governmentwill carry out a Transport Study financed under the Economic and Financial Management Improvement Project (Credit 1493-NIR). This study will be executed by consultants in close collaborationwith an interministerialteam of Nigerien economists, representingthe Ministries of Commerce and Trans- port, Public Works and Housing, Plan, and Finance. This study will examine longer-term policies and perspectives for growth in the transport sector with particular emphasis on road transport, within the framework of structural adjustment and the agreed sector strategy. In particular, it will examine the merits of alternative proposals put forward by the Govern- ment as means of meeting its cost recovery target. Under this project the Governmentwould review with the Association the recommendationsarising from the Transport Study and consult with the Association on follow-up actions required to implement them.

3.20 The work program for the BGR includes continuing collection of data on road roughness and traffic, calibration and installationof the Highway Design and Maintenance Model, preparation of annual work programs for periodic maintenance using this model, collection of data on vehicle operating costs, road user charges and the road transport industry, and execution of a study of axle load ciharacteristics.Under this project, the Governmentwould consult with IDA on policy measures to control axle loads, based on the results of the BGR study.

Physical Program

3.21 The program of works to be executed during the project period includes the routine and periodic maintenance of paved and gravel roads, bridge repair and replacement, rehabilitation and improvement of secordary and feeder roads, and some ongoing construction projects. Within the planned expenditure program, approximately 36Z would go to road maintenance, 8% to bridge works, 15% to rural roads, and 30% to ongoing projects. The remaining 11% would be spent for equipment renewal, workshop rehabilitation, and institutionalstrengthening, as well as possible improvementof the Niamey-Say road. - 22 -

3.22 Routinemaintenance. An adequatelevel of routinemaintenance is essentialto minimizevehicle operating costs and futureexpenditures for rehabilitation.Routine maintenance would be carriedout for the whole of the 6,969km prioritynetwork. The tasks are the normalones of patching bitumensurfaced roads; regrading shoulders, gravel and earth roads%spot regravelling,culvert cleaning, and sand removal. The projectwould financeincremental expenditures required to bring governmentallocations up to neededlevels. Projectfunds would be used to pay for importedfuel and spare parts.

3.23 Regravelling.The budgetfixed for 1985/86will only permittwo out of the four establishedcrews to function,but for the projectperiod 1986/87through 1988/89 all four crews would be operationalwith a target of 80 km a year for each crew. Additionalregravelling would be carried out by contract,depending on the relativeeconomic justification for this activityon specificroad sectionscompared with other possibleuses for sectorfunds. The regravellingpresently provided for in the programdoes not allow for the whole gravelroad networkto be coveredat the desirable frequencyof once every 5 years,but the plannedinvestment would assurean adequatelevel of serviceconsistent with overallfunding constraints. The road sectionswhich have been acceptedfor regravellingunder the project, based on an economicanalysis, are shown in Annex 3-3.

3.24 Resurfacingand Strengthening.The resurfacingprogram under the FourthHighway Project has been completed. An ongoingitem, financed by European DevelopmentFund (EDF),is the wideningand strengtheningof Takieta-Zinder;this will continueinto 1985/86. The rehabilitationof Djajiri-Diffa, financed by Canadian International Development Agency (CIDA), will also continue into the project period. A list of paved road sections totalling 923 km requiringstrengthening and resurfacinghas been evaluatedby the BGR; these also are shownin Annex 3-3. The deLailed priority of each sectionhas been established,based on an analysisusing a simplifiedversion of the Bank'sHDM Model. Detaileddesign and the preparationof contractdocuments would be done by consultants.

3.25 Bridges. The Gaya bridgeover the Niger river into Benin is in poor structuralcondition. This bridgeis a vital link in the accessroute to the sea which carriesthe bulk of Niger'strade. Its continuedfunc- tioningis thereforeof very high priority. The structureis such that the only feasibletechnical solution is completereplacement and this is includedin the progrp-n.Preliminary engineering has been completedand con- sultantsare preparingtender documents. In addition,some of the bridges on the Niamey-Tillaberiroad have been underminedby floodsduring the recent rainy seasonand need major rehabilitation.This will be undertaken during 1985/86and 1986/87using funds remainingin the Creditfor the FourthHighway Project. Tender documentshave alreadybeen preparedby DTP. Provisionhas been made under the projectto supportadditional bridgerehabilitation as the need may arise.

3.26 Rural Roads. Two programs of rural road improvemcnt are currently underwaj in Niger. Under the IDA-financed Feeder Roads Project, -roads were selected for improvement on the basis of economic studies. While the same type of studies have not been done for the ten secondaryroads - 23 -

totalling about 600 km already improved under the UNSO program, a mid-term evaluation of one such road (95 km) suggests that this investment also has had a positive economic impact (para. 3.57). Under the present project, the Government will construct up to 883 km of rural roads and 301 km of secondary roads, selected according to the rural roads evaluation methodology. The agreed programs of secondary and rural road improvementsare shown in Annex 3-4. The Government has also decided to undertake a program of technical and financial support to communities for labor intensive rural road constructionto construct short access roads connecting to roads being improved by Public Works brigades. A pilot program is being set up in Maradi Department. Support for this pilot program is being provided by UNDP.

3.27 Major Improvements. The number of projects involving new construction has been severely limited, as in general the economic returns are lAss than for maintenance. However, if the Government proposes a subproject with higher economic returns than some of the maintenance items, it could be included in one of the annual programs. One such example, paving of the Niamey-Say road, has been provisionally included in the project. The ERR of this particular subproject would be updated and compared with other investment possibilities in the program before a firm decision is taken to go ahead. Ongoing projects include the constructionof the Zinder-Agadez road with reduced design standards from Tanout to Agadez, the widening of Takieta-Zinder, and the rehabilitationof Djadjiri-Diffa. External (non-IDA) financing has already been committed for these projects, much of it on a grant basis.

3.28 Equipment and Workshops. The condition of the whole equipment fleet and the workshops has been examined under the Fourth Highway Project (see Project File, Document No. 36). The component included in the project would finance fleet renewal and workshop rehabilitation. The list of equipment to be purchased is shown in Annex 3-5.

3.29 Institutional Strengthening. Through a series of IDA-financed projects, the Ministry of Public Works and Rousing and in particular the Department of Public Works have developed a high degree of technical capacity to plan and carry out road programs. DTP's central and regional services and the rural roads division now function reasonably well without expatriate assistance. Under the Fourth Highway Project, a Road Management Unit (BGR) was set up with technical assistance to plan and program road maintenance and to carry out special studies. The Equipment Division became a separate Department and embarked upon an ambitious decentralization program. The Public Works Staff Training Center has been constructed, .ocal staff and management have been selected, and a comprehensive curri- culum has been prepared in consultation with Public Works field staff.

3.30 Institutionalcapacity in the Department of Public Works has developed to the point where there is no longer a need for long-term expatriate assistance. However, it is to be expected that DTP will continue to use consultants for specialized tasks. Increasingly, these services may become locally available at less cost than at present. Other branches of MTPH, such as the Administrative and Financial Department (DAF) or the - 24 -

Equipment Department (DMTP), due to recent organizational changes, require long-term technical assistance to promote more effective operations.

3.31 To support further institutionaldevelopment, the project makes provision for specialized consultant services to be drawn on by the Govern- ment to meet remaining specific needs. These services would be provided under terms of reference to be agreed with IDA. Specific areas where such assistance is required include:

(a) construction supervision for periodic maintenance works executed by contract; (b) detailed design and tender documents for more complicated periodic maintenance works, including strengthening, where needed, of paved roads;

(d) specialized assistance to the BGR, including calibration to Niger conditions and installationof the Highway Design and Maintenance Model on appropriate equipment;

(e) development of MTPH data processing capabilities, including possible equipment purchase and staff training;

(f) management support to the Equipment Department to increase the efficiency and effectiveness of its services;

(g) specialized technical services and training of trainers for the Public Works Staff Training Center; and

(h) assistance to the Land Transport Department in the Ministry of Commerce and Transport to improve the efficiency of road related revenue collection.

Details on each of the above proposed activities are provided in Annex 3-6.

C. Costs

3.32 Total expenditures for each year of the program have been deter- mfned taking into account both macroeconomic considerationsand sectoral priority needs. The total resources available for public investment and decisions on sectoral allocation limit the road sector investment program in the structural adjustment years to CFAF 8.9, 13.9, and 19.6 billion for 1985/86, 1986/87, and 1987/88 respectively. The agreed expenditure program for 1985/86 includes an additional CFAF 3 billion expendituresfor work already completed, which will be charged to the 1984/85 budget year. The transport investment program for 1988/89 is estimated at CFAF 22.2 billion. Total expenditures,including both investment (CFAF 67.5 billion) and recurrent costs (CFAF 9.2 billion), will amount to CFAF 76.7 billion over the four-year period (US$212.9million equivalent). - 25 -

3.33 The cost estimates, summarized in the Credit and Project Summary and detailed in Annex 3-2, were discussed and confirmed with the Government at negotiations. They have been prepared in end 1985 prices on the following basis:

(a) routine maintenance: from financial accounting for operation of existing crews and estimated needs;

(b) regravelling:from financial and cost accounting for force account brigades; for execution by contract, unit prices for similar items in ongoing contracts;

(d) major improvementsand bridges: contract prices for ongoing works, preliminary engineering for the Gaya Bridge, per km costs for works proposed for later years of the program;

(e) rural roads: ongoing UNSO program, and cost accounting for Rural Roads Division, up to the overall ceiling established for this item; and

(f) equipment and workshops: consultants'estimates;

(g) consulting services: for supervision, 8% of cost estimates for works by contract; for technical assistance, man-month rates in ongoing contracts, and estimates of total services required;

(h) physical contingencies:are included where appropriate,but not shown separately, since most amounts shown in the cost estimate are budgetary ceilings for Government expenditure, rather than conventional cost estimates;

(i) price contingencies:for both local and foreign costs are estimatei at 7% in 1986 and 1987, 7.5% in 1988, 7.7% in 1989, and 7.6% in 1990;

(j) taxes: the Goverrnent has exempted all construction, consultants and technical assistance contLacts from taxes and import duties.

D. Financing

3.34 The proposed IDA credit of US$15 million equivalent, together with the proposed credit of US$15 million equivalent from the Special African Facility, would finance 14% of total program costs. Niger is eli- gible for the Special Africa Facility, which already contributed US$40 million equivalent to the structural adjustment program. SAF financing is also recommended for this project, which entails major sectoral policy - 26 -

reforms and includes components which are quick-disbursing. The SAF-financedcomponents which are quick-disbursinginclude the periodic maintenance of paved and gravel roads by contract, force account regravellingand construction of rural roads, equipment purchase, workshop rehabilitationand equipment, and associated studies, supervision,and technical assistance. The Government of Japan has indicated that it intends to contribute US$20 million equivalent to the project under the Special Joint Financing (SJF) arrangement. It is expected that the terms of the cofinancing from Japan would be equivalent to those of IDA and that it would consist of a US$4 million equivalent grant and a US$16 million equivalent loan from the Overseas Economic Cooperation Fund.

3.35 Niger can finance only a very small part of the net-of-tax cost of the program, except for routine maintenance where Niger would finance 88% of the cost. This item accounts for US$22.9 million or 81% of Niger's share (US$27.6million) of total program costs. The Government contributions to Zinder-Agadez (US$2.0 million) and to the periodic maintenance of paved roads (US$1.8 million), at 5% of the costs for these components, and smaller amounts budgeted for other components, make up the total. In all, Niger would finance about 13% of total program costs, compared with a local cost component estimated to be 25Z.

3.36 Part of the first and second year expenditure programs will be financed under ongoing IDA projects: the 1985/86 rural road program (US$1.7 million) under the Feeder Roads project, and the 1986/87 bridge rehabilitationcomponent (US$3.0 million) under the Fourth Highway Project.

3.37 Other donors presently contributing to the road sector are: (a) Canadian International Development Agency (CIDA) for Djajiri-Diffa; (b) European Development Fund (EDF) for Takieta-Zinder and Zinder-Agadez; (c) African Development Fund (AfDF), Islamic Development Fund, Saudi Fund, Arab Bank for Economic Development in Africa (ABEDA) and OPEC Fund for Zinder-Agadez;and (d) Italy, Norway and United Nations Sudano-Sahelian Office (UNSO)/ComiteInter-Etat de Lutte contre la Secheresse au Sahel (CILSS) for secondary road construction. All of these donors are expected to continue their programmed contributionsin:o the project period.

3.38 EDF has recently allocated 20% of its sixth program grant for Niger (estimated at about US$23.7 million) to road malntenance; the remaining 80% will go to agriculture,of which a portion may be spent on rural roads. In addition, EDF regional funds may be made available to finance the periodic maintenance and widening of the Takieta-Nigeriaroad. AfDF is expected to contribute about US$10 million to periodic maintenance. Caisse Centrale de Cooperation Economique (CCCE) will finance the Gaya Bridge. UNDP is financing the pilot phase of the labor-based rural track improvementprogram. The Government proposes to organize a transport sector donor coordinationmeeting in the later half of this year.

3.39 Financing arrangements for the project are summarized in the following table and in more detail in Annex 3-7. - 27 -

Program Summary Financing Plan (1985/86 - 1988/1989) (in US$ million equivalent)

US$ million Government 27.6

IDA/SAF Transport Sector 30.0 Special Joint Financing (Japan) 20.0 IDA Feeder Roads 1.7 IDA Fourth Highway 3.0

Confirmed Financing EDF 39.4 AfDF 16.8 IDB, Saudi Fund, ABEDA, OPEC Fund 24.2 CIDA 19.6 CCCE 7.8 UNSO/Norway/Italy 11.4 UNDP 0.5

Financing to be identified: 10.9 Total 212.9

E. Procurement

3.40 Procurement for items financed by other agencies will follow their rules. For items procured under the IDA and SAF credits; the procurement methods are summarized in the table below. Amounts in parentheses indicate IDA/SAF participation. - 28 -

Procurement under IDA/SAF Credits (US$ million)

Items Financed by IDA/SAF Credits ICB LCB Other Total

Periodic maintenance of 11.4 - 31.5 42.9 paved roads (6.1) -- (0.0) (6.1)

Periodic maintenance of -- 4.1 4.7 8.8 gravel roads -- (2.3) (2.3) (4.6)

Bridge rehabilitation - 7.8 7.8 __ (2.7) -- (2.7)

Rural road construction - 12.1 12.1 __ (5.9) (5.9)

Equipment and workshops 9.6 -- 9.6 (5.5) -- - (5.5)

Consulting services -- 6.4 6.4

-_ (3.3) (3.3)

Routine maintenance -- 25.5 25.5 _ -- (1.9) ( 1. 7) Total 21.0 11.9 80.2 113.1 -1_6) _5g) (13.4) 130.0)

3.41 Procurement of IDA-financed components would be in accordance with the Baunk's Guidelines for Procurement and Guidelines for the Use of Coonsultants. Procurement of SAF financed components would be in accordance with the SAF procurement guidelines. No difficulties have been experienced with procurement by MTPH under the ongoing Feeder Road and Fourth Highway Projects. A review of local competitive bidding (LCB) procedures in Niger was completed in October 1985. These local procedures (adjudications) as applied by MTPH are generally acceptable.

3.42 All civil works financed by IDA/SAF would be executed by contract, except for force account operations for routine maintenance and regravelling. These force account operations, which were establishedwith IDA assistance, have worked reasonablywell. For ICB, contractorswould be prequalified. For LCB, the prequalificationwould be based upon MMPH's permanent register of contractors,with a provision for post qualification.

3.43 IDA/SAF funding of civil works is oriented towards periodic maintenance. A suitable contract size for resurfacing is of the order of 100- 200 km, with an estimated cost of roughly US$3 to US$7 million. Such contracts are likely to be of interest to the international contractors already installed in Niger, the two large Nigerien firms, and those installed in neighboring countries who have surplus capacity. Smaller rehabilitation works on drainage structures, regravelling, and improvements to workshops - 29 -

may be procuredby LCB, which is open to foreigncontractors. Procurement decisionsinvolving contract amounts of more than US$300,000equivalent would be subjectto prior reviewby IDA, covering87% of project expenditures. 3.44 All routinemaintenance is carriedout by force account. IDA/SAF financingof part of the routinemaintenance costs on a decreasingscale (para. 3.15) would be limited to the procurement of supplies, including fuel, lubricantsand parts for equipmentand vehicles. Labor and equipment rentalcosts would be paid from the Government'sallocation.

F. Disbursementsand RevolvingFunds 3.45 The amountsshown in Annex 3-2 are cnnsideredto be the best availableestimates of the costs of each item. However,experience in Niger has been that actual expendituresfall short of these planningfi- guresby roughly30%. or an implementationratio of 70%. For the program covering the structural adjustment period, the Government is assuming an implementation ratio of 80%. This implementation ratio results from delays such as those which have recently been experienced in Niger with contract approvals, making sites available to contractors, and contractor mobilization. Some slippage is therefore to be expected in the disbursement of the IDA/SAF financed components compared with the theoretical annual program of planned actions. In West Africa,highway sector projects have historically taken six and a half years from Board Presentationto fully disburse. This profilehas been used to calculatethe scheduleshown in Annex 3-8, showing disbursementsfor the IDA and SAP creditsand the expectedSpecial Joint Financing. Disbursementswould be made againstfull documentationwith 'ie exceptionof small contractsof less than US$10,000equivalent, where disbursementswould be made againststatements of expenditures;amounts so withdrawnwould be subjectto standa-dspecial _.diting requirements appliedto statementsof expenditures.

3.46 The IDA Credit and SAF Creditwould be disbursedas shown in the followingtable. SAF funds would be disbursedfirst, SJF next, and IDA last. Althoughsimilar disbursement categories are proposedfor each of the creditsto maintainflexibility, expenditures in the early project years would be procured under SAP procurement guidelines to ensure fast disbursement. Consequently, the IDA disbursement would be slower than usual. The combination of the SAF, SJF, and IDA credits make up the standard profile. - 30 -

IDA/SAFCredit Disbursements (in US$ million)

Amount of % of Expenditures Items CreditAllocated to be financed IDA SAF Civil Works for Road Construction and Maintenance 6.4 8.5 95

Equipment Renewal and Workshop Rehabilitation 0.6 0.6 95

Fuel, Lubricants,and Supplies 1.1 1.3 100-

Consultants Services 3.6 2.5 100 Unallocated 3.3 2.1

Total IDA/SAF Credits 15.0 15.0

a/ Up to an amountnot to exceed25% of the recurrentmaintenance budget in 1986/87,15% in 1987/88,and 6% in 1988/89.

3.47 RevolvingFunds. Revolvingfunds are being set up for the ongoingFeeder Roads and FourthHighway Projects. No experienceis thereforeyet availableof the operationof revolvingfunds in highway projectsin Niger,but they are expectedto facilitateproject execution. Two revolvingfunds are proposedfor this project:one for the IDA credit and one for the SAF credit. Each would be of US$1,000,000equivalent. The funds would be reimbursedfrom the respectivecredits upon submissionof withdrawal applications by the Government.

3.48 Difficulty has been experienced under the Fourth Highway Project with delay in approval of contracts by the Ministry of Finance. Although in these cases by far the largestshare of expenditureswere being financed by IDA, no provisionhad been made in the budget for the relativelysmAll Governmentcontribution. A separateproblem has been the reluctance of suppliers to furnish spare parts because of slow government payment of their accounts. A local account for the Government's contribution to expenditures for items under the investment budget would therefore also be established as a condition of credit effectiveness. The amount of the initial deposit in this local account would be CFAF 40 million, equal to about 5% of the IDA/SAF contribution, and it would be replenished by the Government at the same time as the IDA/SAF revolving fund replenishments. - 31 -

G. Consultationand Reporting

3.49 Consultationswith the Governmentvill take place at least once a year, coordinated with Niger's financial year which runs from October to--- September. Each year, the Government would submit proposedsubprojects to the Bank for approval, following the criteriaset out in paras. 3.10-3.12. In addition, the Government would submit quarterly reportslisting status of preparation of subprojects in the sector, subprojects approved by the Bank, contracts, the progressof executionof each lot of works,of equipmentand supplies,and of each study,the statusof disbursementre- quests,and the estimatedschedule for withdrawalsof proceedsof the credit. The Governmentwould also submita projectcompletion report in a form satisfactoryto the Bank, not later than six months after the closing date of the credit.

H. Accountsand Audit

3.50 The projectaccounts, revolving fund accounts,and Local Advance accountwould be auditedannually. All auditswould be conductedaccording- to auditingstandards satisfactory to and by independentauditors acceptable to IDA. The audited accounts would be submitted to IDA within nine months following the end of the fiscal year. The Government has initiated action to complete the first annual audit of the FourthHighway Project, due in April 1986. There are no other auditsoutstanding in the Transport Sector in Niger.

I. Economic Evaluation

3.51 The components of the program have been selected to maximize the return on investment of the limited funds allocated to the road subsector under the structural adjustment program. The contents of the first year program (1985/86) is already agreed and the second year program (1986/87) was agreed at negotiations (para. 3.10). Specificprograms for succeeding~ years will be agreed at the annual reviews, and their composition will be determined on the basis of economic priorities.

3.52 Routine Maintenance. Routine maintenance on the existing road network is the highestof all economicpriorities in the sector. In the absence of regular routine maintemnace, both paved and gravel roads dete- riorate rapidly and very high costs are incurred. Routine maintenance expenditures are low in comparison to those for periodic maintenance, and they are a necessary part of an optimal program of road management. It is assumed, therefore, that routinemaintenance on the entireroad networkis economically justified with a global rate of return exceeding the average for the proposedperiodic maintenance program.

3.53 Periodic Maintenance. The type and timing of periodic maintenance on Niger'sroad networkhave been selectedby using the Highway Design and Maintenance Model to analyze alternatestrategies on specific links which are candidates for periodicmaintenance during the project period. For the economicanalysis, conservative assumptions were made of - 32 -

future traffic growth of 8% a year on paved roads and 5% a year on unpaved roads. Only benefits from vehicle operating cost savings were considered. Details of the analysis are giv_i in Annex 3-9. The estimated economic rate of return for paved links iutthe program ranges from 27% to 85%, with a weighted average of 39%. Rate; of return for unpaved roads range from 14% to 130%, with a weighted average of 48%. The rate of return on the whole periodic maintenance program is conservativelyestimated to be about 40%.

3.54 National Roads. The rate of return for upgrading the Niamey-Say road to paved standard is now estimated to be around 18%. Widening of the Takieta-Zinderportion of the country's principal artery (financed by EDF), rehabilitation of the Djajiri-Diffa link (financed by CIDA), and paving of the road from Zinder to Agadez (financed by ADF, EDF, and several Arab donors) are ongoing projects with substantial sunk costs. The Takieta- Zinder project consists of widening from one lane to two lanes a road section presently carrying more than 275 vehicles per day and is expected to have a rate of return (ERR) of more than 10%. The second project is to replace a severely deteriorated section of the "Route de l'Unite" financed by CIDA several years ago. The rate of return on this investment is calculated as 7.8% under current economic conditions. However, this road is of strategic military and political significance. The road from Zinder to Agadez is estimated to have a rate of return of 4.8% with revised design standards if the EDF financing is considered to be non-fungible. However, it will facilitate the flow of fuel and food aid to the north and will, with adequate rains, encourage the expected recovery of agriculture in the region. Donor funding of Takieta-Zinder, Djajiri-Diffa and Zinder-Agadez was committed prior to this project.

3.55 Gaya Bridge. This bridge, spanning the Niger River at Gaya, constitutesa critical link in Niger's access to the sea. As previously noted it is in unsafe condition and needs to be replaced. A feasibility study carried out by consultants showed that replacing it now would be less costly than replacing it after a complete failure (which would require the purchase and operation of two ferries for at least two years while the new bridge was being constructed), if the failure should occur in the next seven to eight years. Given the critical role of the bridge for Niger's internationalfreight traffic, it has been agreed that the.bridge should be replaced under the next investment program.

3.56 Secondary and Feeder Roads. Secondary roads selected for rehabilitation in the third phase of the program would be subjected to an ex ante economic evaluation, and no roads would be constructed unless they show a rate of return of 10% or more according to the agreed methodology. One recently completed road was the subject of an economic evaluation carried out during construction, which estimated the rate of return for this road at 20%.

3.57 The program of feeder road improvements for the first year of the project is limited to works planned under the ongoing IDA-financed Feeder Road Project. Roads for succeeding years of the program were selected from a list of roads proposed by regional authorities in descending order of - 33 -

economic priority. Expected rates of return range from 10% to 123.5% with a weighted average of 25.8%. A description of the rural road evaluation methodology is given in Annex 3-10. No rate of return has been calculated for two small pilot projects serving remote areas at reduced costs.

3.58 InstitutionalDevelopment. The program also includes funds for equipment purchase and workshop rehabilitation,consultant services (such as detailed design of improvements),technical assistance, and training. No rate of return has been calculated for these activities.

J. Financial Evaluation

3.59 Government revenues from user charges are expected to rise from about CFAF 4.3 billion in 1984/85 to about CFAF 9.7 billion in 1988/89 under the agreed action plan. Government expenditures for each year are programmed as follows:

Niger - Programmed Government Road Sector Expenditures (in CFAF million)

198'/86 1986/87 1987/88 1988/89 Routine maintenance 1.530 1,800 2,160 2,570 Periodic maintenance Paved roads -- 98 185 490 Regravelling (force account) 10 14 30 30 (contract) -- 13 21 40 Rural roads 30 19 82 88 Labor based brigades 12 10 11 11 Niamey-Say -- -- 100 200 Zinder-Agadez 264 170 109 145 Bridge rehabilitation 20 30 40 50 Workshop equipment and buildings -- 5 25 -- Technical assistance ------Total expenditures 27i52 2632L866 3.624

Total revenues 5961 7.395 8.489 9J.706

These expendituresdo not include debt service on previously incurred investments in the transport sector. Debt service on investments to be made during the project period will not begin until after a grace period extend- ing beyond the project period.

K. Risk Assessment

3.60 The main risk under the proposed transport sector program is a shortage of local funds to pay for routine maintenance of the road network and to provide counterpart funding for planned investments. The first risk - 34 -

has been minimized by providing funds within the project to make up the -balance between agreed levels of local funding for routine maintenance and the anticipated needs. Government compliance with agreed levels of local ,nding for recurrent expenditures and adherence to the agreed sectoral investment program is a condition of disbursement for the second tranche of thos StructuralAdjustment Credit as well as for the annual tranches of the TraraportSector Project. Governmentcounterpart contributions have been taken into account in planningthe transportsector expenditure program vnder the StructuralAdjustment Credit. The establishmentof revolving funds for both foreignand local funds should facilitatetimely project disbursements.

3.61 There is a risk that equipmentrental fees may not generate enoughrevenue to cover,in additionto operatingcosts, depreciation and interest charges. Action to minimizethis risk includesan annualupdate -of the scheduleof rentalfees and the provisionof technicalassistance to 'the Equipment Division for, inter alia, a more effective exploitation of the equipment management and cost accounting systems in place.

3.62 Considerable uncertainty surrounds the implementation of the pro- -posed action plan to raise road user charges to a level that would cover both routineand periodicmaintenance costs. For this reason,implementation of the first step in the plan was made a conditionof negotiations and implementationof subsequentsteps accordingto the agreedschedule -wlll be a conditionof disbursementfor the annualtranches of the Transport Sector Credit. -,. addition,better management of the vehicle -registration and driver licensing data base, and more effective collection -procedures, should substantially improve revenue performance under the structural adjustment program.

3.63 There is relatively little risk of major misallocation of re- sourcesunder the proposedinvestment program since agreementhas been reachedto limit constructionon the Zinder-Agadezroute during the structuraladjustment period. Use of the Highway Design and Maintenance Model (HDM) to make annualwork programmingdecisions based on a regularly updated data base will become standardpractice under this project. The -i-nvestment program for each year would be selected according to economic criteria established for this project within the sectoral policy framework, and would be subject to review and agreement with IDA. The total size of the investment program is limited by agreements under the structural adjustment program. Risk of Government failure to execute the program as 8greedis negligible,given the high level of implementationcapacity in sectorinstitutions and the increasingreliance on contractorsforeseen under this project.

3.64 In the end, there may be a risk that the expectedtraffic growth would not materialize, rendering the proposed investments uneconomic. hile this risk may be significant for particular links, it is relatively less likely to affect the economic viability of the program as a whole. In the past, traffic growth in populated areas has continued even with a severe decline in economic activity. To allow for this risk, however, conservative traffic growth assumptions have been used, assumptions that are considerably lower than the average growth rates actually experienced - 35 -

over the period 1977-1985. The recent return of the rains, and the emphasis on investment in productive sectors provided under the structural adjustment program, suggest that levels of economic activity are likely to improve somewhat in the medium term, which would have a positive effect on traffic growth patterns.

3.65 For rural roads, there is a risk that the expected complementary investments may not materialize in a timely fashion. This risk has been minimized through the participatory planning process, which should ensure that all relevant agencies are aware of the need for complementaryinvestments. Particular attention would be paid to this aspect during project supervision.

IV. AGREEMENTSREACHED AND RECOMMENDATIONS

4.01 During negotiations, the follow!ng was agreed with the Govern- ment, and incorporated in the Credit Agreement:

Ca) The Government will select subprojects for the 1987/88 and 1988/89 transport sector expenditure program according to agreed criteria (para. 3.09); will furnish to the Associa- tion for review not later than March 31 of each year the expenditure program, physical work program, and cost recovery target for the following fiscal year, and a three- year forward plan for investments and recurrent expenditures; and will consult with the Association on sector policy, cost recovery, planned expenditures, and physical targets and achievements (para. 3.13);

(b) For secondary and rural roads, the maximum investment will be CFAF 12 billion over 4 years, and selected sub-projects shall have a rate of return of not less than 10% (para. 3.11);

(c) Amounts allocated in the recurrent budget (excluding IDA/ SAF contributions)to cover the operating costs of routine road maintenance shall be CFAF 1.53 billion in 1985/86, CFAF 1.80 billion in 1986/87, CFAF 2.16 billion in 1987/88, and CFAF 2.57 billion in 1988/89 (para. 3.14);

(d) The scale of DMTP equipment rental rates shall be updated annually to cover operating costs, maintenance and repair costs and depreciation on the basis of replacement value (para. 3.15);

(e) The Government will implement an Action Plan to be agreed by June 30, 1987, for cost recovery from road users, whose target will be 100% of annual maintenance needs by 1990; annual cost recovery targets will be agreed each year (para. 3.18); - 36 -

(f) The Governmentwill reviewwith the Associationthe recommendationsarising from thesTransport Plan Study,and will consultwith the Associationon follow-upactions required to implementthem (para.3.19);

(g) The Government will consult with the Association regarding measures to control axle loads, based on the BGR axle load survey (para. 3.20); (h) Procurementprovisions (paras. 3.40 to 3.44); (i) Regularreplenishment of the local accountfor the Govern- ment'sshare of projectinvestment costs (para.3.48); (J) Reportingrequirements (para. 3.49); and

(k) Auditingprovisions (para. 3.50).

4.02 Duringnegotiations the following,among others,were discussed and confirmedwith the Government:

(a) the cost estimatesin Annex 3-2;

(b) the list of road maintenanceequipment for procurementin Annex 3-5; and (c) the financing plan in Annex 3-7.

4.03 Conditionsof effectivenessof the IDA and SAF creditswould be: (a) the establishmentof a Local Advance Account for the Governmentshare of investment costs for IDA/SAF-financed components and deposit of CFAF 40 million in this account (para. 3.48); and (b) the Government shall have adopted a revised schedule of DHTPequipment rental rates applicableto fiscalyear 1986/87(para. 3.15).

4.04 A conditionof disbursementfor expendituresfor civilworks for roads construction and maintenance under each annual program would be prior agreement on the detailed expenditure and work program and cost recovery targets for that year, and on the three-yearforward plan for investments and recurrent expenditures (para. 3.13).

4.05 Agree ent having been reached on the items in paras. 4.01-4.04, the proposedproject is suitablefor an IDA credit of SDR 13.0 million, and a Speciallfrica FacilityCredit of SDR 13 millionon standardIDA terms.

WAPT2 April 1986 - 37 - ANNEX 2-1 Page 1 of 3

REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

THE PRIORITYROAD NETWORK

1. The classifiednetwork was definedin law 60.049of October22, 1960, and decree 68.107 of 31 January 1968. The later 1968 decree is still in effectalthough it is seriouslyout of date in severalrespects. The MTPH proposeda new functionalclassification in 1984, but this was reject- ed by the cabinet,some membersof which wanted to retainmost of the old route numbers. A revisedproposal for reclassificationwas preparedin MTPH in 1985,and is being considered.

2. The classificationdefines routes by the names of towns at the origin and destinationand en route. Althoughthe formaldefinition has not been changed,construction of Tahoua-Arlit(RN25) by-passed Ingall, and the route from Agadez to Tamanrasset(RN1lN) has been constructedto Arlit insteadof via Teguidda-in-Tessoum.

3. Some of the classifiednetwork is still unimprovedtrack and does not receivenormal routine or periodicmaintenance. This particularly appliesto Talcho-Ekrafane(RN26), and Talcho-Tahoua(RN25).. In the de- sert, the routes from Agadez to Bilma (RN21) and to the Algerian border are only marked with oil drums.

4. In principle, the MTPHis charged with constructing and maintain- Ing only the classified road network. Unclassified roads are the responsi- bilityof the local authorities.However, because MTPU is the only agency vith an effectiveexecution capability, DTP maintainssome of the more important unclassified roads. (These would all be classified under the new DTP proposal). In addition, when it vas decided to launch a national pro- -gram of rural access roads (IDA's Feeder Roads ProJect) DTP was also chargedwith the constructionof these roads. A specialunit in DTP, the Rural Roads Division(DRR), vas set up for this. So far no formal arrangement has been made to maintain these roads, but in practice DTP assures regular maintenance.

5. The network maintained by DTP thereforeconsists of the classified roads,less the unimprovedtracks, plus some unclassifiedroads and the feederroads completedunder the rural road program.

6. The road from Tahoua to Agadez and then to Arlit, with a spur to Ingall, was constructed under a concession arrangement with the uranium mining company CONCERTA. The maintenance of these 697 km is carried out, also under a concessionthrough the mining company,by a speciallyesta- blished subdivision, SERTA. It does not therefore figure in DTP maintenance budgets.

7. Detailsof each road sectionin the netwoTkmay be found in Docu- ment 27 in the ProjectFile. The followingtable lists the paved roads in the network;which accountfor the bulk of periodic maintenance needs. - 38 - ANNEX 2-1 Page 2 of 3

Roads with Bituiinized Surface

Route No. Description Length (km)

Classified Roads

1 W Niamey - Tillaberi 116 1 E Niamey - Dosso 140 1 E Dosso- Bolbol 42 1 E Bolbol - Dogondoutchi 94 1 E Dogondoutchi - Birni N'Konni 143 1 E Birni N'Konni - Guidan Roumji 140 1 E Guidan Roumji - Tchadaoua 116 1 E Tchadaoua - Takieta 142 1 E Takieta - Zinder 52 1 E Zinder - Mirriah 24 1 E Mirriah - Goure 147 I E Goure - Goudoumaria 101 1 E Goudoumaria - Djajiri 37 1 E Djajiri - Diffa 150 1 E Diffa - N'Guigmi 130 6 Niamey - Torodi - Burkina 145 7 Dosso - Sabongari 98 7 Sabongari - Gaya 56 7 Gaya - Benin 14 8 RN7 - Nigeria 16 9 Maradi - Nigeria 45 10 Takieta - Nigeria 70 11S Zinder - Magaria -Nigeria 113 25 Niamey - Baleyara - Filingue 183 28 Birni N'Konni - Nigeria 7 29 Tsernaoua - Tahoua 118 Sub-Total 2,439

Unclassified Roads

Niamey - Kollo 30 Sub-Total 2,469

Tahoua - Agadez - Arlit (concession) 697

Total 3=166 - 39 - ANNEX 2-1 Page 3 of 3

Investment in Roads (CFAF billion)

Roads Total Roads as Z Year Investment - Investmenth/ of Total

1974 3.1 39.3 7.9 1975 3.5 34.0 10.3 1976 5.8 38.2 15.2 1977 6.0 66.0 9.1 1978 8.4 97.3 8.6 1979 16.9 i22.5 13.8 1980 19.6 117.0 16.8 1981 12.7 126.5 10.0 1982 16.9 70.i 24.1 1983 12.8 56.7 22.6 1984 14.6 55.0 26.5 1985 14.9 80.0 18.6

a/ Source: Ministry of Public Works and Housing. b/ Source: World Tables for 1974-1981. Ministry of Plan for 1982-1985.

WAPT2 January .6 - 40 - A1NEX 2-2 Page 1 of 4

REPUBLIC OF NIGER

TRANSPORT SECTOR PROJECT

TRAFFIC COUNT RESULTS

1. In 1976/77, traffic counts and an origin-destination survey were carried out at 24 survey points located near urban centers on the main roaA network. On the basis of these counts, traffic flows were estimated for 58 origin-destination pairs, representing 36 links in the network. The highest traffic volumes registered at that time were in the range of 100-150 vehicles per day (vpd). Ten links has traffic at this level, while thirteen were in the range of 50-100 vpd and thirteen had less than 50 vpd. This survey used five vehicle types and arrived at the foLlowing average values for traffic composition:

Light vehicles 13% Vans/light t1ucks 40% Buses 15Z Trucks 16% Trailer trucks 16%

2. In 1985, traffic counts have been carried out at 93 posts on the network. On major roads the counts were carried out for one full week. although in other cases they were done for only three days. These counts show very high growth on the principal arteries of the road network, mainly the RN1E from Niamey to Zinder, the RN1W from Niamey to Gotheye, Niamey to Kollo, the roads south to Nigeria from Maradi and Takieta, the Dosso-Gaya road to Benin, and the road north from Birni-N'Konni through Tahoua towards Agadez. The attached table summarizes the traffic count data from the first campaign in 1985.

3. In addition to the above-mentioned roads where traffic now ranges from 200 to 800 vehicles per day, sore than 100 vpd are found on the RNlW from Gotheye to Tillaberi, the road from Niamey through Torodi and Makalondi to Burkina, Niamey-Baleyara-Filingue, Niamey-Say, Dosso-Loga. Maradi-Dakoro, Agadez-Arlit, and several roads leading into northern Nigeria from the Zinder region. Moderate traffic volumes (50-100 vpd) are found oit the RNlE east of Zinder, the road from Gaya to Nigeria, and on several secondary roads (Say-Parc W, Kao-RN25, Tebaram-Badeguicheri, Keita-Tahoua, Tchadaoua-Mayahi, Matameye-RNIIS, and Zinder-Tanout). Elsevhere traffic volumes are low (less than 50 vpd).

4. A slightly different set of vehicle types was used for the 1985 counts, in which vans and light trucks are combined with buses, while trucks are divided into 2 axle, 3 axle, and trailer trucks. Since 3 axle trucks account for less than 1Z of total traffic, this distinction is not v..ryuseful. For purposes of comparison it will be necessary to combine vans with buses and 2 axle trucks with 3 axle trucks. This gives the following comparison: Traffic Mix 1976/77 1985 Light vehicles 13% 34% Vans/buses 55% 46% Trucks 16% 8% Trailer trucks 16% 11% ANNEX 2-2 - 41 - Page 2 of 4

The bulk of the traffic increase clearly comes from a rapid increase in light vehicles.

5. 1985 traffic levels can be compared with 1977 traffic levels on twenty paved roads and ten unpaved roads which were covered in both campaigns. The results are as follows:

Annual LINK 1977 Traffic 1985 Traffic Growth Rate

A. Paved Roads

Niamey-Torodi 48 159 17Z Niamey-Gotheye 91 269 15% Gotheye-Tillaberi 48 171 17Z Niamey-Baleyara 62 154 12% Baleyara-Filingue 46 106 11Z Niamey-Kollo 61 497 30% Niamey-Dosso 156 650 20Z Dosso-Gaya 86 264 17% Gaya-Nigeria 22 92 20% Dosso-Bolbol 103 418 19Z Dogondoutchi-BirniN'Konni 95 143 5% Birni N'Konni-Tahoua 50 303 25% Tahoua-Agadez 16 239 50% Agadez-Arlit 14 127 32% Madaoua-Maradi 90 695 29% Maradi-Nigeria 106 827 29% Tchadaoua-Takieta 37 251 27% Takieta-Nigeria 82 219 13% Takieta-Zinder 141 277 9% Zinder-Nigeria 14 155 35%

B. Unpaved Roads

Niamey-Ouallam 36 45 3% Niamey-Say 20 127 Z6Z Gotheye-Tera 18 40 11% Tillaberi-Ayorou 5 31 26% Maradi-Dakoro 25 131 23% Bouza-Keita 2 24 36% Tchadaoua-Mayahi 3 55 47% Matameye-Nagaria 7 50 28% Zinder-Tanout 25 50 8% Tanout-Agadez 13 16 3%

Traffic growth rates on paved roads have ranged from 5% to 50% per year over the eight-year period, averaging around 222 per year. Traffic growth on the most important unpaved roads has ranged from 3% to 47% per year, with an average of 21% per year. In addition, traffic is beginning to flow on a number of unpaved roads which have recently been improved under secondary and feeder road programs, and has reached levels of more than 20 v.p.d. on a number of existing unpaved roads where traffic counts were not taken in 1977. ANNEX 2-2 42 Page 3 of 4

3-axle Trailer LINK CARS VANS TRUCKS TRUCKS TRUCKS TOTAL Niamey-Gotheye 67 123 70 3 6 269 Gotheye-Tillaberi 70 86 9 1 5 171 Niamey-Torodi 38 62 20 1 38 159 Torodi-Burkina 39 70 22 1 47 179 Niamey-Kollo 269 195 24 1 9 498 Niamey-Margou (RN1E) 201 292 48 7 102 650 Niamey-Baleyara 44 90 15 1 4 154 Baleyara-Filingue 32 58 10 1 5 106 Baleyara-Tabla 18 56 9 0 1 84 Tillaberi-Ayorou 8 13 6 0 4 31 Ayorou-Hali Border 6 10 5 0 5 26 Tillaberi-Ouallam c/ 5 16 4 7 0 32 RNlW-Gotheye-Tera 8 23 7 1 1 40 Tera-Dori-Burkina Border 10 30 3 2 3 48 *Foneko-Mehans 0 3 0 0 0 3 *Foneko-Yatakala 1 25 1 0 1 28 Niamey-Ouallam / 5 25 9 0 6 45 *Ouallam-Banibangou - 1 2 2 4 0 9 *Tondikwindi-Mangaize- 1 11 9 0 1 22 *Tondikwindi-Banibangou c 3 1 3 0 0 7

*Banibangou-Mali Border -' 0 2 1 0 0 3 Baleyara-Banibangou bI 1 5 4 0 1 11 *Bonkoukou-Chiciassou- 2 17 1 0 0 20 *Talcho-Tebaram 1 3 1 0 0 5

*Talcbo-Abala - 2 18 5 6 0 31 *Abala-Ekrafane 4 6 0 0 0 10 Kollo-Koure b/ 3 11 2 0 0 16 Koure-RN25 b7 1 11 0 0 0 12 RN25-Dantiandou 2 6 0 0 0 8 Niamey-Say b/ 34 77 10 2 3 126 Kobadie-Say 5 5 3 0 0 13 Say-Parc du W 14 34 6 0 1 55 Dosso-Gaya 52 91 10 0 111 264 Dosso-Bolbol (ENIE) 130 186 21 2 79 418 *Gaya-Nigeria 30 60 0 0 1 91 Dogondoutchi-Birni N'Konni 79 115 29 3 93 319 Tsernaoua-Madaoua (RN1E) 159 148 21 2 58 388 Dabnou-Badeguicheri- Tahoua(RNlE) 86 136 25 1 54 302 Tahoua-Abalak 65 101 31 3 39 239 *Abalak-Agadez 32 36 11 0 26 105 Ingall-RTA 5 7 3 0 2 17 *Agadez-Arlit (W) 39 49 18 0 22 128 *Agadez-Arlit (E) 7 14 7 2 0 30 *Agadez-Bilma 1 1 2 0 2 6 *Agadez-Sabonkafi 0 5 4 1 7 17 *Agadez-Assaouas 0 2 0 0 0 2 *Agadez-Assamaka 3 1 2 2 0 8 *Assaouas-Teguidda-n-Tessoum 0 1 0 0 0 1 *Assaouas-Ingall 0 2 2 0 0 4 *Ingall-Teguidda 0 2 2 0 0 4 *Inouagar-Ingall 0 1 0 0 0 1 ANNEX2-2 Page 4 of 4

3-axle Trailer LINK CARS VANS TRUCKS TRUCKS TRUCKS TOTAL *Kao-RN25 2 25 17 2 5 51 *Tahoua-Baramou 4 19 2 0 0 25 *Tahoua-Bambeye 1 4 1 0 0 6 *Tebaram-Tahoua 0 3 0 0 0 3 Tebaram-Badeguicheri 16 39 8 2 1 66 *Malbaza-Dabnou 3 5 4 0 1 13 *Bouza-Keita 3 7 11 0 2 23 *Keita-Tahoua 24 35 11 0 2 72 *RN1-Bangui 9 22 2 0 0 33 Margou-Gaya 7 27 10 0 3 47 *Margou-RN25 4 28 2 0 1 35 *Dosso-Loga 18 110 2 0 0 130 Madaoua-Maradi (RNIE) 282 308 43 4 57 694 Maradi-Tchadaoua (RN1E) 122 167 91 5 45 430 Maradi-Nigeria 510 259 33 0 25 827 Tchadaous-Takieta(RN1E) 59 148 14 1 28 250 Takieta-Zinder (RN1E) 103 129 14 3 27 276 Takieta-Nigeria 62 150 5 0 2 219 Zinder-Nigeria 57 68 4 2 24 155 Mirriah-Goure 17 48 16 0 8 89 Goudoumaria-Diffa 7 14 5 0 7 33 Diffa-N'Guigmi 4 16 12 1 0 33 N'Guigmi-Chad 0 5 8 1 0 14 Zinder-Sabonkafi 6 22 11 0 11 50 RN1l-Damagaram-Kelle 10 11 13 1 5 40 *Kelle-Goure 2 21 0 0 1 24 *Dogo-Mirriahb. 3 31 9 0 0 43 *Bande-Gouchib/ 0 9 1 0 0 10 Wacha-Dungas 5 36 7 0 0 48 *Timkin-Nigeria 4 86 10 0 0 100 *Magaria-Nigeria 3 26 3 0 0 32 *Matameye-Kafinbaka 2 40 4 0 0 46 *RN20-Matameye 2 10 0 0 0 12 *Matameye-EN11S / 5 44 11 0 0 60 *Samia-Belbeji-Sabonkafi c 1 7 5 0 0 13 *Madaroumfa-Nigeria 22 72 13 0 3 110 *RN1E-Dakoro 28 72 24 0 7 131 *Tchadaoua-Mayahi 3 50 2 0 1 56 *Gazaoua-Nigeriac/ 6 34 9 0 1 50 *Dakoro-Belbeji 3 17 3 0 0 23 *Keita-Dakoro 1 8 1 0 0 10

Note: 3-day counts only

a/ Includes all passenger transport (vans, buses, and light trucks). b/ Rural road Improved under the Feeder Road Project. c/ Secondary road Improved or to be improved under the UNSO program.

WAPT2 April 1986 REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

NEW VEHICLEREGISTRATION STATISTICS

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 i980 A1'81 1982 1983 1984

Cars 835 690 745 744 842 816 725 1,280 1,208 1,735 2,005 1,858 1,993 1,604 1,279 Vans 231 506 416 485 397 354 576 697 717 1,001 1,027 921 788 567 609 Trucks 154 108 168 215 216 251 166 232 276 431 375 290 179 90 111 Tractors 98 50 50 85 78 123 130 207 287 259 203 78 99 57 66 Trailers 47 21 38 59 53 51 109 160 185 214 164 71 81 41 63 Buses 33 22 33 49 68 69 89 67 104 219 166 217 198 176 175. 4.

Total 1,398 1,397 < 146537 6 1664 1,795 2.643 2,777 3.859 3. 3,435 3338 2 535 203

Sourcee Land TransportDepartment, Hinistry of Comerce and Transport.

WAPT2 January 1986 - 45 - ARNEX2-4

REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

FUEL CONSUMPTIONTRENDS (thousan-d m')

Jet Fuel a/ Airplane Gasoline Diesel Kerosene

1970 12.0 2.8 19.5 39.0 8.2 1971 11.0 2.3 21.2 N.A. 2.9 1972 10.2 2.9 22.9 N.A. 3.0 1973 15.2 4.0 25.7 62.7 3.4 1974 12.4 4.1 23.4 61.9 2.5 1975 19.6 3.2 27.5 68.7 3.8 1976 10.7 2.8 28.7 74.6 4.2 1977 13.5 2.5 33.9 77.8 4.2 1978 2.0 3.0 36.2 102.5 4.5 1979 1.9 3.2 41.9 124.1 5.5 1980 1.8 1.8 46.7 129.4 5.7 1981 1.9 1.7 55.4 117.4 5.6 1982 2.1 1.1 61.8 104.6 6.4 1983 1.5 0.6 46.9 68.3 4.8 1984 1.5 0.6 44.7 77.0 2.6

a/ Data for 1978-1984 excludes re-exports.

Source: Ministry of Public Works (1970-1977) Ministry of Mines and Industries (1978-1984).

WAPT2 January 1986 - 46 - ANNEX 2-5 Page 1 of 2

REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

ROADUSER CHARGES

1. Road user charges in Niger currently include taxes on the import- ation and consumptionof vehicles,parts, fuel, and lubricants,and fees chargedby the Government for services such as vehicle registration,vehicle licensing,driver licensing, and vehicleinspection. These monies revert to the general budget (contributions diverses), from which allo- cationsare made for road maintenance. Table ' shows estimated revenues from each of these sourcessince 1980. Revenuesremained stable at around CFAF 4.5 billionper year in 1980-1982,dropped precipitously in 1983, and are now climbingback toward their earlierlevel.

Taxes

2. The principalsource of road revenuesis the taxe specifigueon petroleumproducts (super and regulargasoline and dieselfuel). Annual revenuesfrom this tax currentlyrun aroundCFAF 2.7 billionor about 65Z of total user chargerevenues. Other taxeswhich the Governmentconsiders to be user chargesare the taxe specifigueon lubricantsand the droit fiscal d'entreefor petroleumproducts, currently retained by customsauthor- ities. Historicaldata on the evolutionof revenuesfrom these taxes are not readilyavailable, but currentrevenues are estimatedat roughly CFAF 0.5 billionor about 10% of total user chargerevenues. Customs duties arc also leviedon importsof vehicles,spare parts and tires. Data on past and presentlevels of these revenuesare lacking,but a rough estimate of currentrevenues is about CFAF 0.7 billionor 152 of total user charge revenues.

Fees

3. Historicaldata are availablefor revenuesfrom new vehicleregistrations(carte grise) and annualvehicle licenses (vignettes). Only recent data are availablefor revenuesfrom driverlicenses and vehicle inspections. Total estimated revenues from such user fees amount to roughly CFAF 0.5 billion or about 10% of total user charge revenues.

Recent Changes in Fuel Tax Structure

4. Table 2 shows the current structure of the pump price for petroleum products, including kerosene. The line item described as "Stabili- zation" represents contributions to a special fund that permits the sale of kerosene at less than market prices. This cross-subsidy is consistent with the Government's energy policy, which is designed to encourage the use of alternatives to fuelwood to meet household energy needs iu urban areas.

5. As part of the Third IMF Standby Agreement approved in November 1985, the Governmentconsiderably decreased the amountsallocated to this - 47 - ANNEX 2-5 Page 2 of 2 fund in the petroleumprice structureand increasedthe taxe specifique accordingly.The resultwas an effectiveincrease of about 35% in the revenuesfrom the sale of gasoline,accruing to the generalbudget, as op- posed to the price stabilizationfund, and 40% in revenuesfrom the sale of dieselfuel. (Table2 reflectsthe new price structure.) On this basis,and assumingthat officialsales of petroleumproducts in 1985 remain at approximatelythe same levelsas in 1984,general budget revenues from the taxe specifiguewould be on the order of CFAF 3.4 billionin 1985 and CFAF 3.7 billionin 1986.

Forecastsof FutureRevenues

6. Retail fuel priceshave risen substantiallyin recentyears, from CFAF 150/literfor gasolineand CFAF 130/literfor dieselfuel in 1981 to CFAF 255/literfor gasolineand CPAF 19(1/literfor dieselfuel in 1985. This is partly due to the increasein border pricesover this period,but it also reflectsa major increasein the taxe specifiquewhich went into effectin October 1983. Recordedconsumption of fuel droppedby 35% in 1983 and was even lower in 1984. Consequently,the 1983 tax increasedid not have the expected effect on r-4-"nuPq, whiceLeven declined slightly from their earlierlevel.

7. Fuel is readilyavailable through unofficial channels from Nigeria,which has a long and porousborder with Niger as well as extensive traditionalties and trade links across the border. Until very recently,fuel prices in Nigeriahave been extremelylow, correspondingto CFAF 72iliterfor gasolineand CFAF 36/literfor diesel at officialex- changerates. Furthermore,purchasers paying in hard currency(CFAF) are able to profit from the unofficialexchange rate, which would reduce these pricesto about CFAF 27 and CFAF 14 respectively.Under these circumstances,it is not surprisingthat increasedfuel taxes have led to de- cliningconsumption of fuel obtainedthrough official channels and hence decliningrevenues.

8. The rerentlyannounced doubling of fuel pricesin Nigeriawill not materiallychange this situation,since pricesper liter will still be far less than the officialprices in Niger. The situationwill not change unlessthe Nigeriancurrency (naira) is devaluedto a level approaching currentunofficial exchange rates, and correspondingadjustments are made in the retailprice of fuel in Nigeria. Under these circumstances,it is hard to foreseea major increasein fuel tax revenuesfor the near future, despiteexpected traffic growth. Revenuesare thereforeprojected to grow only at the normal rate of inflation, following a jump in 1985/86 due to the internal restructuring of the fuel price. Without additional actions, it is predlcted that user chargerevenues would be about CFAF 5 billion in 1985, CFAF 5.7 billion in 1986, CFAF 6.1 billion in 1987, and CFAF 6.5 billionin 1988.

WAPT2 January 1986 - 48 - ANNEX 2-5 Table 1

REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

ESTIMATEDREVENUES FROM ROAD USER CHARGES (CFAF million)

1980 1981 3.982 1983 1984

Fuel Tax 2,942 2,978 3.120 2,169 2,701 Lubricant Tax 118 120 125 88 100 Droit Fiscal 376 381 399 278 346 Vehicle Imports 620 528 538 473 383 Spare Parts and Tires 220 240 250 280 300

Vehicle Registrations 62 72 73 71 75 Vehicle Licences 223 230 240 256 314 Driver Licenses N/A N/A N/A 37 75 Vehicle Inspections N/A N/A N/A 12 17

Total Revenues 4,561 4,549 4,745 3,664 4,311 m=

Sources: Ministry of Commerce and Transport. Bank Estimates.

WAPT2 January 1986 - 49 - ANNEX 2-5 Table 2

REPUBLIC OF NIGER

TRANSPORT SECTOR PROJECT

STRUCTURE OF PETROLEUM PRICES November 1985 (CFAF/Hectoliter)

Super Gasoline Diesel Kerosene

Price ex-Parakou 12,953 11,975 11,594 13,705 Transport Niamey 1,576 1,437 1,437 1,437

Cost to Niamey 14,529 13,412 13,031 15,142 Base price Niamey 14,384 13,264 13,006 15,060

Taxes Taxe statistique 57 49 38 26 Droit de douane 46 39 37 35 Droit fiscal d'entree 948 806 484 106 Taxe i la production 479 407 317 213 Taxe spec4fique 7,800 7,600 2,100 1,200

Charges Storage charges 128 128 128 128 Tax on storage 23 23 23 23 Losses in storage 159 146 104 116 Losses in transit 72 66 64 73 Equipment costs 468 150 50 115 Overhead 400 380 245 350 Financial costs 824 764 602 649 Profit 270 210 190 215 H.A.D. 106 106 104 91 Retail margin 600 600 500 500 Delivery costs 100 100 100 100

Subtotal 26,864 24,838 18,092 19,000

Stabilization 1,136 662 908 -4,000

Sale price/100 1 80 L500 X9000 15j.000

Price per liter 280 255 190 150

WAPT2 April 1986 REPUBLIC OF NIGER

TRANSPORT SECTOR PROJECT

MINISTRY OF PUBLIC WORKS AND HOUSING: ORGANIZATIONCHART

| Minister |

andFiania|qupmnblcWoksBli r Principal Private o Secretary

ProfessionalTraining 5 ecretaryl Center for Public Works IGeneral

Administrative Department of Department of Department of Department of Department of and Financial Equipment Public Works Building Urbanism the National Laboratory Depertment Construction of Public Works and Buildings

Organizations attached to Ministry

WAPT2 January 1986 RUSMLICOP mCNJ

TRANSPORT SECTOR PROJECT

PuDLICtS DUD. I - CCGAII I ai&t

acdtadntime| Studio Special Studies Servic mmd NW R I C 7 o 11A L gS I R v I C I s Division Construction . I _ ~~~~~~~~~~~~~~~~Service1 k 1 * 1<1 w u Ruin aion olgix 1.10 Rfe .ia bioa

lPersonneil CotatAcwtin Spcal ia co hainta- NCons- Rrl DeS ifa ease Lm af Bureau Bureau Bureau Studsa Studs Studenan e tion R d t D|it Bureau Dlviii va DivisIon Divison Dvon

I-trueactol Dirct hate trut Ditvtrietc ISettion Sectim

ailaberi| TIstrict

IC-Matruetioa Setim

WAPT2 January 1986 REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

EQUIPMENTDEPARTMENT - ORGANIZATIONCHART

Equipment Dlrector

Administration I Rbglonal Directors of Public Works and Housiog

CentralServices RegionalServices

Central Central I Agadei I Maradi a Management Maintenance Service Service

Central Central E iiEoi E Purchasing Operations Service Service

WAPT2 'anuary 1986 - 53 - ANNEX2-9 Page 1 of 3

REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

TRAININGPROGRAM

1. The need to providesupport for maintenancetraining activities was recognizedduring the preparationof IDA's First HighwayProject. Con- sequently,IDA grant financeda maintenancestudy that includedanalysis of futurepersonnel needs, includingrecruitment and training. The detailed desigrof a suitabletraining program was subsequentlyincluded in the HighwayMaintenance Project. Difficultiesin the recruitmentof senior staff and in trainingmostly illiteratejunior staff causedsome delays, ultimately requiring extension of the project by two and a half years. The Second Highway Project contained a relatively minor t-aining component for staff involvedin the use of materialstesting equipment. This training programalso experienceddelays and achievedless than originallyexpected.

2. Under the Third HighwayProject, a tra'ningprogram was carried out for staff involvedin the regravellingprogram. This program,originally planned to be carried out on the job and in the regional service centers, once again revealed the need for basic education on the part of most DTP staff. A temporary training area was set up at the Equipment Division headquarters in Niamey. However, this space soon proved to be too small and poorly adapted for some of the planned training activities. In addition, MTPHwished to expand the scope of the training program to cover skills needed in its construction and urban planning departments. Excess funds remaining in the project were used to design a permanent training center that could accommodate the needs of all MTPHstaff.

3. The Fourth Highway Project provided funds for rhe construction of a training center that could serve the needs of DTP and other departments of the Ministry. This training center is now nearing completion. Although there were some delays in awarding the contract for training-related technical assistance and in nominating Nigerient staff to be responsible for the trainingprogram, a well qualifiedDTP engineerhas now been named director of the training center and the technical assistance team is working with him to prepare the first year's training program.

Organization and Methods

4. Towardsthe end of 1983, with the help of technical assistance providedunder the FourthHighway project, MIPH conducteda comprehensive inventoryof its personnel,then amountingto about 2,600 employees. Of these about 250 or less than 10% were qualifiedworkers (cadres),about 1,650 or 65% were assistantlevel staff (auxiliaires),and about 700 or 25Z were temporarylaborers. Over 60% of the staff were in the relatively young age bracketof under 30. About 1,200were DTP employees(not including 175 employees assigned to SERTA, the parastatal organization responsible for the maintenance and operation of the Uranium Road), and nearly - 54 - ANNEX 2-9 Page 2 of 3

700 more were in the Equipment Department (DM). The remainder were assigned to the Building Construction, Urbanism, Laboratory, or Administrative and Financial Departments. About 1,000 or roughly 40X of the total were based in Niamey, and the remainder divided among the six regional services and SERTA, each of which had staff levels ranging from 50 (Diffa) to over 300 (Zinder).

5. Based on this information,the Ministry developed plans for a training center with the capacity to provide basic skill training and refresher courses to meet the needs of some 1,200 staff members. The Training Center will cover five areas: road and bridge construction,building construction, equipment operation, equipment maintenance and repair, and administration. Each section will be headed by an appropriately quali- fied expert, assisted by additional trainers (moniteurs)as needed. The Center will operate under the guidance of a Training Commission chaired by the Secretary-Generalof MTPH and including the Directors of each Depart- ment, the Director of the Training Center, the Director of Professional Training from the Ministry of Fonction Publique, a representativeof the Worker's Urion, and a representativeof the Ministry of Plan. This Commission meets at least once a year to review and approve the annual work program and budget for the Center. A draft decree-law establishing the administrative character and financial autonomy of the Center has been prepared and is under review by IDA staff (Project File Document No. 45).

6. Following its assessment of training needs and preparation of a preliminary progiam, MTPH held a series of meetings with regional staff to familiarize them with the program's philosophy and objectives and to encourage them to participate. Through these contacts, data were also collected for the preparation of detailed job descriptions and the design of training courses to meet practical needs as perceived by field staff. These interviews were followed by a period of intensive preraration cf course materials and syllabi, as well as training in modern pedagogical methods for local staff assigned to the Center.

Present Status

7. Construction and equipment of the training center has been financed under IDA's ongoing Fourth Highway Project. Construction is nearing completion, the training equipment and materials have been ordered, and the center is scheduled to open in January 1986. The attached table shows the planned throughput for the first three years, when basic training will be provided to about 1,150 staff already on the payroll and about 250 expected new recruits. After this period, the Center will continue to provide basic training to new recruits at a rate of about 100 per year and refresher courses to some 650 regular staff members each year.

8. Technical assistance for the development and implementationof the training program has been provided under the Fourth Highway Project. Because of delays in awarding the contract, it is now expected that the ongoing technical assistance will be adequate to meet needs at least during the first two years of project implementation. Should a subsequent need arise, the Terms of Reference for such additional assistance would be proposed by the Director of the Training Center and approved by IDA staff. It - 55 - ANNEX2-9 Page 3 of 3 would be unrealistic to try to forecast the specific nature of these needs so far in advance. However, it is expected that such needs would be li- ited to short-term interventions related to specialized subjects on which suitable expertise would not be available locally.

WAPT2 January 1986 -56- AMWF 2-9

REPUBLICOF NICER TRANSPOR SECXORPIROJICT TRUIING PROGRAM

Trainins Progra. 1986/1987 Annual Prourm. after 1988

Specifications Exiting Personnel New Recruits Replacement Pere. Annual Recycling of Courses Basic Training Baslc Training Basic Training after 1980 XlnuIeM Number Nuober Rrer NuMer Nmber of Number Number Number Number of of of of Length Trainees of of of of Traineee Courses Traiees Courses (veeks) per course Trainees Courses Trainee. Courses per Year o per Ye r ver Year Trans otto/ousinlt TeRIntCOMPHOSttants 5 15 25 2 10 1 2 3 17 2 Brigade Chiefs 4 15 7 1 3 1 0.5 5 5 1 Sector Chiefs 2 15 30 3 9 1 2 3 20 2 Team Leaders 2 15 80 6 19 2 10 1 40 3 Lab. Technicians 5 5 10 2 2 1 0.5 1 5 1 Draftsmen 8 5 5 2 1 1 0.2 1 2.5 1 Topographs 8 5 10 2 2 1 0.2 1 1 1 Sub-Total 167 18 46 6 15.4 90.5 11 Construction Tehnical Asslsteants 4 15 45 4 5 1 2 1 22.5 2 Surveyors 4 15 20 2 1 1 0.2 1 10 2 Deslgners 4 15 10 2 1 1 0.2 1 7.5 1 Draftsmen a8 5 15 1 1 1 0.2 1 5 1 Plumbers 4 10 30 3 2 1 0.2 1 15 2 Electricians 4 10 30 3 2 1 0.2 1 15 2 Carpenters 4 10 40 4 2 1 0.2 1 20 2 Sub-Total 190 19 14 7 3.2 95 12

Maintenance %rEEo-p Managers 8 15 2 1 3 1 0.2 5 2 1 Vehicles & Equipment Unit Managers 4 15 10 4 3 1 0.5 5 4 1 Vehicle & Equipmen: Tes Leaders 4 15 12 2 5 1 0.5 3 6 2 Vehicle & Equipment Medhanics 4 15 70 8 10 1 7 5 40 3

Sub-Total 94 15 21 4 8.2 52 7

Operations Inspectors 8 15 4 1 2 1 0.3 2 2 1 Head Hechanics 4 15 16 2 2 1 0.5 3 8 1 Service Station Managers 5 15 30 4 5 1 2 1 18 2 Mechanics (helpers) 5 15 40 4 5 1 2 1 20 2 Vehicle Drivers 1 10 80 8 10 2 2 1 55 6 Truck Drivers 2 5 150 15 65 13 21 3 mois 108 22 Equipment Operators 2 3 120 40 75 25 19 2 mois 98 33

Sub-Total 440 74 164 44 46.8 309 67

Administration Office Manage - 4 15 30 2 2 1 0.8 5 18 2 Administrators 4 1S 55 4 3 1 2.3 2 20 2 Book-Keepers 4 15 35 3 3 1 3.3 2 18 2 Warehouse Managers 4 15 30 2 3 1 3.3 2 17 2 Typists 2 5 90 18 2 1 5.2 1 30 6 Radio Operators 2 10 20 2 1 1 1 5 31 1

Sub-Total 260 31 14 6 15.9 U14 15

Grand Total 1U151 Auif j2

WAPT2 April 1986 - 57 - ANNEX2-10 Page 1 of 4

REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

PAST IDA INVOLVEMENTIN THE SECTOR

1. The proposed project would be IDA's eighth intervention in Niger'stransport sector. IDA assistanceto the sector startedin 1964 with the First HighwayProject (Credit55-NIR, US$1.5 million, 1964) for the constructionof unpavedroads totalling60km in the peanut-producing regionsouth of Zinder. Since then, IDA objectiveshave evolvedin line with local developmentas well as with changesin the Bank'sviews on sectordevelopment strategies. IDA has, however,consistently stressed the priorityof improvingroad maintenancewith particularemphasis on the aspectsof adequatefunding and operationalefficiency. Since 1964 there has been a marked improvementin the performanceof sectoralinstitutions as a whole; however,the performanceof some institutionshas been uneven, as has the developmentof capacityto absorbthe transferof technologyand managerialskills. Overall,the civilworks componentsof IDA-assisted projectshave been implementedwith considerablesuccess. In contrast, institutionbuilding efforts have been less successful;although, compared with other sub-Saharancountries, good progresshas been made.

2. The followingsummarizes IDA's experiencewith the sector: (a) The First HighwayProject (Credit55-NIR, US$1.5 million, 1965) consistedof engineeringand constructionof about 60 km of lateriteroads serving groundnut production areas in the Zinder-Agadezregion;

(b) HighwayMaintenance Project (Credit128-NIR, US$6.5 million, 1968). In 1965, the Bank made a US$85,000grant to Niger for a road maintenancestudy which was carriedout by BCEOM (France). As a resultof the study,this project was prepared, providing for a phased reorganization of the maintenance and equipmentservices, training and elimination of the backlog of deferred maintenance. The project also included feasibility studies, ca'roed out by SCET/COOP (France), for about 300 km of road3,with detailed engi- neeringfor about 140 km;

(c) The SecondHighway Project (Credit 231-NIR, US$6 million, 1971) provided for the construction of the 140 km of roads studied under the Highway Maintenance Project, and pre- investmentstudies for about 170 km of roads servingagri- culturalareas;

(d) Niamey Airport (Credit473-NIR, US$5.0 million, 1974). The Associationalso helpedto financea project for the mo- dernization and extension of Niamey Airport to assure its continued use by international transit traffic, and to - 58 - ANNEX2-10 Page 2 of 4

providefor futuregrowtl. The projectconsisted of lengtheningand rehabilitatingthe existingrunway and taxiwayto accommodatewide-bodied aircraft and of upgradingvarious items of airportsafety and lighting equipment; (e) The Third HighwayProject (Credit612-NIR, US$6 million, 1976,plus co-financingof US$7.0million and US$3.6mil- lion by BADEA and ADF respectively)comprised: (i) equipment purchase,technical assistance and trainingof DPW staff at all levels in supportof a four-yearprogram of lateriteroad regravelling;(ii) constructionof the Zinder-Nigeriaborder road (113 km) and the Maradi-Nigeria borderroad (49 km); (iii) a surveyof the domesticcons- tructionindustry; and (iv) supplyof equipmentand technical assistancefor routinemaintenance of bituminous roads;

(f) The First FeederRoads Project(Credit 886-NIR, US$10 million, 1979) consistedof a three-yearprogram for the improvement,construction and subsequentmaintenance of about 1,000 km of feeder roads serving agricultural development projects; creating a feeder road technical section in the DPW; and training of equipment operators, mechanics and foremenof the new sectionand technicalassistance to DPW for its execution;

(g) The FourthHighway Project (Credit1394-NIG, US$23.6 million, 1984) supporteda threeyear programof strengthening and surfacedressing of about 374 km of paved roads. The projectalso includestechnical assistance and equipmentto establishand operatea road managementunit, in addition to construction, equipment and technical assistance to establish and operate a training center. 3. No PCR was preparedfor the First HighwayProject, which successfully closedin 1969. A combinedPCR was preparedfor the HighwayMainte- nance Projectand the SecondHighway Project, with an audit report publish- ed in November1977. It concludedthat both projectshad contributedto the successfuldevelopment of local capacityto undertakeroutine road maintenanceand minor improvements. This success was attributed to the government's positive attitude and willingness to accept technical assistance, coupledwith a phasedprogram to developlocal staff capacitythrough training. Both projectsexperienced delays and cost overruns,mostly due to unforeseen difficulties in implementing the training program. However, with rising vehicle operating costs the project investments remained viable.

4. The Third Highway Project continued the emphasis on maintenance by financinga program of road regravelling and providing technical assistance for routine maintenance. A PCR for this project was completed in June 1984. The project was viewed as very successful in light of the fact that its construction components were completed on time and below anticipated - 59 - ANNEX 2-10 Page 3 of 4

cost. Surplus funds were used to consolidate institution building achievements, notably through the establishmentof a permanent training center.

5. The participationof domestic contractors in the transport of regravellingmaterials under the Highway Maintenance Project aroused Gov- ernment interest in supporting growth of the domestic constructionindustry. A study of this industry carried out under the Third Highway Project proved useful in preparing an industrial development project for Niger (Cr. 1225-NIR). Subsequent maintenance programs have supported the growth of local contractor capacity to participate in the periodic maintenance of gravel roads.

6. IDA involvement in feeder road improvement began with the Niger Drought Relief Fund Project (Cr. 441-NIR, December 1973, US$2.0 million). The road component of this project was originally limited to spot repairs on 4-5 km and the constructionof one bridge on the Ouallam-TillaberyRoad. However, difficulties in implementingother components led to a shift of resources within the project and ultimately about 40 km of the 75 km road were rehabilitated. 1/ No provision was made under this project to develop a feeder road maintenance capacity.

7. The First Feeder Roads Project, which is still ongoing, was designed to develop a capacity to plan,,manage, and maintain feeder road improvements in agriculturalareas. The Rural Roads Division in DTP is now fully operational without technicalassistance. Three constructionbrigades are operating and completed roads are well maintained. A recent uni- versity graduate has joined the staff of the Division and, together with a consultant economist, is preparing the next feeder roads program. A mid- term evaluation of four completed roads showed rates of return ranging from 11% to 35%, due mainly to increases in passenger and non-agricultural freight traffic.

8. The project's low design standards originally met with strong local opposition. In 1981, the project was reformulated, reducing the targeted output in terms of kilometers in order to accommodate a proposed increase in standards. Witn increasing experience and self-confidencehow- ever, local engineers have learned to apply the new standards flexibly in order to stretch resources as far as possible. Sin-ce1981 the project has proceeded slowly, partly due to Government difficulties in funding operating costs. The recent establishmentof a revolving fund for this project has helped to overcome some of these problems.

9. The ongoing Fourth Highway Project supports the periodic maintenance and strengthening of paved roads and the further development of ins-

1/ This road was recently improved to secondary standards under the UNSO program. Travel times have been reduced from five hours to a little more than one hour and the road is presently carrying more than 30 vehicles per day. - 60 - ANNEX2-10 Page 4 of 4 titutionalcapacity through the establishmentof a Road ManagementBureau and the constructionand operationof an expandedtraining center.

10. All of the operationalbranches of the Departmentof PublicWorks are now functioningwell withouttechnical assistance. Recently,however, the EquipmentDivision was elevatedto the level of a separateDepartment within the Ministryof PublicWorks and Housing,and a reorganizationof this Departmentwas undertakenwith a view to decentralizingsignificant responsibilityto the regionalservices. Some technicalassistance may be required in the next years to assure a smooth transition and to maximize the operational effectiveness of the new system. Other branches of the Ministrywhose operations affect the sector,such as the Departmentof Administrationand Finance(where personnel and contractmanagement function are located)may also need technicalassistance in the future.

11. Under the ongoingIDA-financed Technical Assistance Project, a Transport Plan Study will be carried out by a team of consultants working with a local team representing the Ministries of Public Works and Housing, Commerce and Transport, Plan and Finance. The interministerial team is already in place and will help to develop the terms of reference for this study,focusing attention on policy issuesof immediateconcern for the country. The executionof this study may also be seen as an institution- buildingexercise in the contextof the StructuralAdjustment Program, which encouragesbetter communication and cooperationbetween different ministriesto resolveproblems of commonconcern. Implementationof the study recommendationsshould help to strengthen sector institutions well beyondthe scope of the investmentprogram supported by past projects, which is almostexclusively confined to the roads subsector.

WAPT2 January1986 - 61 - ANNEX 3-1

REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

SECTORALSTRATEGY STATEMENT

ROADINFRASTRUCTURE

1. During the 1970. and :980, the paved road network has been expanded significantly. Considering the age of the infrastructure constructed during the last decades and in spite of Niger's sustained efforts for its maintenance, the economic and financial crisis has created an im- balance between the needs for routine and periodic maintenance and the national capacity in the public as well as the private sector to mobilize resources to maintain the existing road network. Substantial external assistancewould be necessary to contributeto the maintenance,rehabilitation and economicutilization of Niger's road network. A transport sector study is underway,to redefinesectoral policies and produce a master plan for the developmentof the transportsector.

2. The prioritiesfor the 1986/88investment program will therefore be:

- to undertake a maintenance and rehabilitation program for the road network to allow the country to make optimal use of existing infrastructure;

- to implement a limited program to expand the secondary road and rural road networks, carefully selected In relation to other investmentprograms;

- to continue ongoingprojects; and

- to continue consolidationefforts vhich are justified to open up remote areas.

New Road constructionprojects will reflect the prioritieslisted above.

3. Complementarymeasures will be adopted to enhance the national financial and institutional capacity. Among others, the Governmenthas already increased the tax on petroleum products and hls allocatedpart of the revenues of the stabilization fund to the nationalbudget. The sector study, mentioned above, will make it possible to formulatea cost-recovery policy. At the institutionallevel, the sectoralauthorities have strengthened road management by the creation of a Road Manag_emnt Unit and a Public Works training center. The capacity for management and utilization of the equipment fleet for public works vill also be strengthened. Rehabilitation and maintenance works will be undertaken by private enterprises, by government agencies or, possibly, by communities using labor-intensive ap- proaches, depending on the circumstances.

WAPT2 January 1986 -62 AM= 3-2 Page 1 of 6

RKPUILC OF NIGfl

TNASP0RS SE0R PRJC?

I. FOUR-YEARPRODRAM - CONPOSIIIONANDM XU =RqIES

Totals Includine Contingeicies Cmponents (ClAF millions) (US- °000)

1985/86 1986/87 1987188 1988/89 Total 1985/86 1986/87 1987/88 1968169 Total Investent Costs

A. Constructiona/

Takieta-Zinder 560 235 -- -- 795 1,555.6 652.8 - 2,208.4 Gaya Bridge -- 630 1,333 837 2,800 -- 1,7SO.0 3,702.8 2,325.0 7,777.8 Secondary Roads 1,280 1,540 1,648 1,763 6,231 3,555.6 4,277.8 4,577.8 4,897.2 17,308.4 Labor-Based Brigades 233 200 210 220 863 647.2 555.5 583.3 611.2 2,397.2 Rural Roads 600 375 1,635 1,750 4,360 1,666.6 1,041.7 4,541.7 4,861.1 1U2111.1 Niamey-Say b/ -- 1,000 2,000 3,000 -- -- 2,777.8 5,555.5 8,333.3 Zinder-Agadez -

Lot 1A 1,100 163 -- - 1,263 3,055.6 452.8 -_ 3,508.4 Lot 1B 720 ------720 2,000.0 ---- 2,000.0 Lot IC 1,818 2,048 2,185 6,051 5,050.0 5,688.9 6,069.4 - 16,808.3 Lot 2A -- 800 1,800 -- 2,600 2,222.2 5,000.0 7,222.2

Lot 2B 1,012 675 __ __ 1,687 2,811.1 1,875.0 -- -- 4,686.1 Lot2C -290 2.9900 00---- 8.055.5 8.05.5

Sub-Total (A)7.323 6,666 9,811 9,470 33,270 20,341.7 18,516.7 27,252.8 26,305.5 92,416.7

B. Rehabilitationand Periodic Maintenance

Djajiri-Diffa- i 3,570 2,408 1,075 -- 7,053 9,916.7 6,688.9 2,986.1 - 19,591.7 Bridge Rehabilitation 400 600 800 1,000 2,800 1,11.1 1,666.7 2,222.2 2,777.8 7,777.8 Periodic Maintenance:

- Paved -- 1,960 3,696 9,800 15,456 -- 5,444.4 10,266.7 27,222.2 42,933.3 - Gravel F-A 200 280 600 600 1,680 555.5 777.8 1,666.7 1,666.7 4,666.7 - Gravel-Contract -- 250 420 So 1.470 -- 694.4 1.166.7 2.222.2 4.083.3

Sub-Total (B)4,170 5,498 6,591 12,200 28,459 11,583.3 15,272.2 18,308.4 33,888.9 79,052.8

u/ Includes supervisioncosts. 0/ Includes CFAF 2,419 million to be charged to M1984/85. c/ Includes CFAF 2,006 million to be charged to FY1984/85. - 63- ANNEX3-2 Page 2 of 6

Components (CFAFmillions) (USS '000)

1965/86 1986/87 1987/88 1988/89 Total 1985/86 1966187 1987/88 1988/89 Total C. Equlopent& Workshops

RoadMaintenance Equipment -- 650 2,200 -- 2,850 -- 1,805.5 6,111.1 -- 7,916.6 Workshop Rehabilitation and Equipment _ 100 500 600 -- 277.8 1.388.9 -- 1,666.7

Sub-Total (C) -- 750 2,700 -- 3,450 -- 2,083.3 7,500.0 -- 9,583.3

D. TechnicalAssistance 410 778 550 550 2.288 1,138.9 2.161.1 1.527.7 1,527.8 6.355.5

Sub-Total Investment 11,903 13,692 19,652 22,220 67,467 33,063.9 38,033.3 54,588.9 61,722.2 187,498.3 Coats (A) - (D)

E. Other Projects ------p.m. ------p.m. --

RecurrentCosts

A. Routine Maintenance

Rental, Supplies, Labor 1,530 1,800 2,160 2,570 8,060 4,250.0 5,000.0 6,000.0 7,138.9 22,388.9 Supplies -- 570 390 160 1.120 -- 1,583.3 1,083.3 444.5 3,111.1

Sub-Total Recurrent 1,530 2,370 2,550 2,730 9,180 4,250.0 6,583.3 7,083.3 7,583.4 25,500.0 Costs

Project Total 13,433 16 .062 24.950 76.647 37.313.9 44,616.6 61.672.2 69,305.6 212.908.3 - 64 - ANNEX 3-2 -6-age3 of 6

II. DETAILED WORK PROGRAM AND BUDGET FOR 1986/87

Item Expenditure (million CFAF)

A. Construction

1. Complete widening and strengthening of Takieta-Zinder 235

2. Secondary roads * 1,540

Brigade I: Mayahi-Kornaka (92 km) Brigade II: Tessaoua-Belbeji (102 km)

3. Labor based and pilot projects 200

Zinder: Doungou Village-Cuvette (10 km) Niamey: Diomana-Sarakoira (13 km) Famale-Guegourou (6 km) Tahoua: Bouza-Karofan (16 km) Bouza-Madeta (13 km) Agadez: Ekaouel-RTA (12 km) Marandet-RTA (22 km)

4. Rural roads 375

Tahoua: Illela-Karae-Guidan Ider (31 km) Maradi: Tessaoua-Gabaouri (38 km) Niamey: Kollo-Kirtachi (61 km)

5. Zinder-Agadez (Lots LA, IC, 2B, 2A) 3,686

6. Gaya Bridge 230

7. Niamey-Say --

B. Rehabilitation and Periodic Maintenance

1. DJajiri-Diffa 2,408

2. Bridge rehabilitation 600

* Subject to demonstration of a satisfactoryrate of return (greater than 10%) according to the agreed rural road evaluation methodology. - 65- ANNEX3-2 Page 4 of 6

Item Expenditure (million CFAP)

3. Periodic maintenance of paved roads 1,960

Maradi-Nigeria (49 km) Takieta-Nigeria (70 km) Niamey-Kollo (34 km) Birni N'Konni-Tsernaoua (14 km) Bolbol-Dogondoutchi(94 km)

4. Periodic maintenance of gravel roads:

RNlE-Dakoro (111 km) 530 Dosso-Loga (73 km) Tinkin-Nigeria (77 kn)

C. Equipment and Workshops

1. Road maintenance equipment 650

2. Workshop rehabilitationand equipment 100

D. Studies and Technical Assistance 778

1. "upervision of periodic maintenance works

2. Operating costs - BGR

3. Operating costs - CFPTP

4. Technical assistance - BGR

5. Technical assistance - Equipment Department

6. Management information systems - MTPH

7. Technical assistance and data processing equipment - DTT

8. Impact study of low cost and labor based construction

9. Study of Niamey Second Bridge. - 66 - ANNEX 3-2 Page 5 of 6

III. INDICATIVE WORK PROGRAM AND BUDGET FOR 1987/88 AND 1988/89

Expenditure Item 1987788 1988789

A. Construction

1. Secondary roads * 1,648 1,763

Brigade I: Kornaka-Dakoro (64 km) (regravelling) Brigade II: Tessaoua-Mayahi (43 km)

2. Labor based brigades (roads to be selected) 210 220

3. Rural Roads 1,635 1,750

Niamey: Abala-Sanasm (49 km) *Filingue-Chical (16 km)

Haradi: Dan Mairc.-Bader(86 km) Dan Issa-Tarkin Guirwa (43 km) Gazaoua-Assaya (16 km) *Maraka-Angoal Roumdji (17 km)

Dosso: Gueza-Bengou-RN7 (62 km) Malgorou-Yelou (15 km) Dogonkiria-Gueza (45 km) Gaya-Dole (27 km) *Koygolo-Sakorbey (17 km)

Zinder: Taramni-Droum (25 km) Gouchi-Gassafa (22 km) Gangara-Yagadji-Ourofane (96 km) Gassafa-Apke-Guidiguir (35 km)

Tahoua: RN16-Loube-Korohane (70 km) Dogonkiria-Gueza (54 km)

4. Zinder-Agadez 3,985 2,900

5. Gaya Bridge 1,333 837

6. Niamey-Say 1,000 2,000

* Contingent upon demonstration of a satisfactoryrate of return (greater than 10Z). -67- ANNEX3-2 Page 6 of 6

Rzpendfture_ Item 1987188T18719 B. Reabilitation and Periodlc Maintenance 1. Djajirl-Diffa 110757 2. Bride rehabilitation 800 1,000

3. Periodlcmaintenance of paved roads: 3,696 9.800 Tsernaoua-sdaoua (71 km) Dosso-Bolbol (43 1w) Rirnd N'Konni-figeria (7 km) Dosso-Sabongar. (86 km) Madaoua-Maradi (154km) 4. Periodlcsaintenance of gravel roads: 1,020 1,400 Relta-Tahoua (50 km) Maradl-Nigeria (50 km) Tebaraaa-adeguicheri (150km) Dogondoutchi-Dogonkiria(76 km) RRLIN-Kelle (140 km) Dogo-Mlrriah (30 km) IR25-Tchintabaraden (77 km) Gazaous-Nigeria (73 km) Sac Farie-Tera (112 km) Tchadaoua-Mayshi (52 km) Ilcha-Dungas (70 km) Tora-Foneko (22 km) Margou-RN25 (110km) Takorka-Nigeria (27 km) Nadaoua-Keita (120 km)

C. Equipumet and Workshops

1* Road maintenance equipment 2,200 2. Workshop rehabilitation and equipment 500 - D. Studies and Technical Assistance 550 550

1. Supervision of periodic maintenance works 2. Operating costs-BGR 3. Operating costs-CFPTP 4. Technical assistance - Equipment Department 5. Technical assistance - Administrative and Financial Department 6. Technical assistance - Department of Land Transport 7. Other Technical assistance 8. Impactstudy of low cost and laborbased construction 9. Other studies

E. Other Projects p.m.

WAPT2 April 1986 - 68 - ANNEX 3-3 Page 1 of 2

REPUBLIC OF NIGER

TRANSPORT SECTOR PROJECT

LIST OF ROADLINKS SELECTEDFOR PERIODIC MAINTENANCE

A. Paved Roads

Length Cost Traffic ERR (km) (CFAF M) (ADT) (Z) To be started in 1986/87:

Maradi-Nigeria 49.0 1,060 1,054 84.9 Niamey-Kollo 34.2 910 492 55.2 Takieta-Nigeria 69.3 2,700 209 29.0 a/ Birni N'Konni-Tsernaoua 14.4 390 431 49.3 Bolbol-Dogondoutchi 93.7 2,370 422 42.9

To be started in 1987/88 or 1988/89:

Tsernaoua-Nadaoua 71.3 2.100 431 38.0 Dosso-Bolbol 42.7 1,250 422 36.8 Birni N'Konni-Nigeria 6.7 220 332 35.5 Dosso-Sabongari 86.0 2,910 290 31.3 Madaoua-Maradi 153.5 3.109 566 28.4 Maradi RN1E-RN9 0.7 16 458 27.0

Total Program bI 621.5 17.035

Other justified investment:

Tchadaoua-Takieta 139.8 3,535 279 23.8 Sabongari-Benin 69.2 1,930 290 18.7 Margou-Dosso 39.3 908 663 18.4 Gotheye-Tillaberi 53.2 1,302 201 14.3

a/ Rate of return for resealing present single lane pavement. A separate cost estimate and economic justification will be prepared if works are to include pavement widening. - 69 - ANNEX 3-3 Page 2 of 2

B. Unpaved Roads

Length Cost Traffic ERR (km) (CFAF M) (ADT) (M) To be started in 1986/87:

RNlE-Dakoro 111 244 142 129.8 Dosso-Loga 73 169 158 100.4 Timkin-Nigeria 77 159 100 77.1

To be started in 1987/88 or 1988/89:

Keita-Tahoua 50 81 83 82.0 Naradi-Nigeria 50 138 123 51.1 Tebaram-Badeguicheri 59 342 59 50.9 Dogondoutchi-Dogoukiria 76 159 78 49.4 RN11N-Kelle 140 299 54 48.3 Dogo-Mirriah 30 57 47 33.9 RN25-Tchintabaraden 77 160 58 33.5 Gazaoua-Nigeria 73 155 56 31.3 Bac Farie-Tera 112 246 43 29.7 Tchadaoua-Mayahi 52 158 50 25.3 Wacha-Dungas 70 226 56 20.8 Tera-Foneko 22 35 31 19.6 Margou-RN25 110 242 40 18.1 Takorka-Nigeria 27 50 38 16.5 Madaoua-Keita 120 243 36 14.0

Total Program bi 1s329 3 163

Other justified investment:

Niamey-Say 54 104 117 85.6

b/ Total program costs for both paved and gravel roads slightly exceed expendituresprogrammed for the project period, to allow flexibility in selection and timing of subprojects.

c/ Regravelling to be undertaken in 1989/90 in the event that financing is not secured for paving Niamey-Say.

WAPT2 April 1986 -70 - ANNEX 3-4 Page 1 of 2

REPUBLICOF NIGEt

TRANSPORTSECTOR PROJECT

LIST OF SECONDARYAND RURAL ROADS SELECTED FOR CONSTRUCTION

A. Secondary Roads a/

Lenth Cost To be started in 1986/87 (is) (CFAF million)

Hayahi-Kornaka 92 1,230 Tessaoua-Belbeji 102 1,267

To be startedin 1987/88or 1988/89

Kornaka-Dakoro 64 1,086 Tessaoua-Mayahi 43 524 Total (A) 301

B. Rural Roads

Lenith Cost ERR To be startedin 1986/87: (G) (MFN) (Z0)

Illela-Karae-GuidanIder 31 121.2 54.6 Tessaoua-Gabaouri 38 164.4 52.6 Kollo-Kirtachi 61 150.9 39.9

a/ Subjectto demonstrationof a satisfactoryrate of return(greater than 10Z) accordingto the rural road evaluationmetbodology (Annex 3-10). b/ Excludingequipment renewal and rehabilitationezpanditures. estimated at CFAF 835 million. Also, 1985/86expenditures, estimated at CFAF 1,280 million. are not included In this total. - 71 - ANNEX3-4 Page 2 of 2

Length Cost ERR To be started in 1987/88 or 1988/89: (km) (CFAF M) (M)

Taramni-Droum 25 97.8 29.5 Gueza-Bengou-RN7 62 333.9 28.5 Gouchi-Gassafa 22 97.4 26.1 Malgorou-Yelou 15 &J.8 24.6 Dan Mairo-Bader 86 394.7 23.9 Gangara-Yagadji-Ourofane 96 440.6 21.5 Dan Issa-Tarkin Guirwa 43 231.6 19.5 Gazaoua-Assaya 16 69.2 18.0 Abala-Sanaam 49 227.7 16.7 Gassafa-Apke-Guidiguir 35 154.9 12.1 RN16-Loube-Kcrohane 70 237.0 11.2 Dogonkiria-Gueza 99 576.2 11.1 Gaya-Dole 27 145.4 11.1 Koygolo-Sakorbey: 17 111.7 9.5 Maraka-Angoal Roumji - 17 91.6 9.4 Feilingue-Chicalc/ 16 74.3 8.6

C. Labor Based Rural Roads

Length Cost ERR To be started in 1986/87: (km) (CFAF M) (Z)

Doungou Village-Cuvette 10 39.1 123.5 Diomana-Sarakoira 13 46.8 85.8 Famale-Guegourou 6 21.6 51.5 Bouza-Madeta 13 70.0 48.1 Bouza-Karofan 16 86.2 27.2

Total Rural Roads (B) + (C) 883 4,065

D. Pilot Projects

Length Cost ERR To be started in 1986/87: (km) (CFAF M) (%)

Ekaouel-RTA 12 53.1 N.A. Maraudet-RTA 22 54.4 N.A.

Total (D) 34 107.5

c/ Contingent upon future demonstrationof a satisfactory rate of return (greater than 10%).

WAPT2 April 1986 - 72 - ANNEX3-5

REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

ROADMAINTENANCE AND WORKSHOPEQUIPMENT

Based on the September 1985 examination of DMTP equipment. items to be procured under the project are as follows:

Imiediate Replacement Preliminary Cost Estimate Liaison Vehicles ('000 CFAF) 8 pick-ups 26,400 10 4-wheel drive station wagonA 77,000

Transport Vehicles 12 10t dump trucks 240,000 3 water-tanker trucks 87,000 3 diesel-tanker trucks 84,000 10 4t flat-bed trucks 132,500 4 iOt tip trailers 24,000 2 service station trailers 18,000

Heavy Eguip'ment 10 gradwrs 320,000 6 front etadloaders, with equipment sets 189,000 10 tampers 7.500 10 vibrating plate compactors 8,500

Miscellaneous 10 water pumps 14,000 10 concrete mixers 40,000 4 generators 12,000 Sub-Total 1,279,900 Allow 10% for parts 127,990 Allow for mmediate repairs to existing equipment 222,000 Allow for equipment replacement during program 870.000 Sub-Total 2,499,890 Workshop Equipment Machine tools 150,000 Hand tools and testing equipment 25,000 Sub-total 175,000

Workshop Rehabilitation Rehabilitationof workshops 325,000 Sub-total 325,000

Total 2L999.892

WAPT2 January 1986 - 73 - ANNEX 3-6 Page 1 of 2

REPUBLICOF NIGER

TRANSPORTSECTOR PROJECT

TECHNICALASSISTANCE COMPONENT

There are a number of areas in which specific needs for short term technical assistance or consulting services may be identified during the project period. The purpose of this componentis to providefunds which can be drawn upon by the Governmentin agreementwith IDA staff to meet such needs as they arise. Specific terms of referenceand procurement proceduresfor each assignmentwill be agreed with IDA staff during supervision missions or annual program reviews.

1. Constructionsupervision. The periodic maintenanceworks financed by IDA will requiresupervision by competent engineers. Minor bridge repairs and regravellingby contractwill be supervisedby DPW engineers. Periodic maintenance of paved roads will be supervised by consulting engineers. To the extent possible, these services will be procured locallv. Specific terms of reference will be drawn up as decisions are made to implement particular subprojects in each program year.

2. Detailed engineeringdesign and productionof biddingand contract documents. The analysisof road sectionsscheduled for periodic maintenance has in some cases revealed a need for strengthening or recons- truction whose design requirements would exceed the capacity of the Road ManagementBureau. The project therefore foresees procurement of consultant services to execute such studies and to prepare appropriate designs and tender documents.

3. Accounting and personnel management. Under the Fourtb Highway Project, a specialist in organization and methods was provided to the Administrative and Finance Department of MTPH. His assignment has been completed, but much work remains to be done to strengthenthe capacityof the Ministry to manage the extensive human and financial resources at its command. In particular,accounting and auditingpractices may need to be improved. Detailed needs for assistance in this area will be determined during the post-appraisal mission.

4. Development of Road Management Bureau. This new unit within DTP was started under the Fourth Highway Project. It is now functioningeffec- tively,and management responsibil'.ty has been substantially transferred from expatriateto local staff. However, due to the complexnature of its responsibilitiesand ambitiousprojects for the future (in particularthe calibrationof the HighwayDesign Model to Niger conditions),there may be a need for specializedshort-term technical assistance in the future. Terms of referencefor such assistancewould be proposed by the Directorof the BGR and agreed by IDA staff.

5. Management of the Equipment Department. A preliminary assessment of the performance of the Equipment Department after its recent reorganization (Project File Document No. 34) indicates that there may be a need for - 74 - ANNEX 3-6 Page 2 of 2 technical assistance in order to help the regional services to carry out their new responsibilitiesmore effectively. The method of equipment cost accounting and establishment of rental charges should be further explored, and record keeping at the regional and local level needs to be improved. Specific needs for technical assistance in this area will be further defined during post appraisal.

6. Integrated data processing for MTPH. The Ministry presently has one small VICTOR computer located in the Road Management Bureau. Staff throughout the Ministry have shown considerable interest in learning to use the computer and applying its capacities to solve problems elsewhere in the Ministry. For example, the computer has been used to create an inventory of publicly owned buildings and associated equipment (e.g. air condition- ers). This particularapplication is essential to the Ministry's efforts to develop policies and programs for building maintenance and energy con- servation. The Governmenthas submitted a proposal to purchase six computers for the Ministry and to provide additional training for staff in their use (Project File Document No. 40). This proposal needs to be further refined before it would be suitable for IDA funding. However, the present computer is clearly inadequate to meet all of the Ministry's data processing needs. Therefore, funds are foreseen to improve this capacity through provision of equipment and technical assistance according to terms of reference to be agreed at a later date.

7. Technical assistance for training. The Government's capacity to plan and manage the professional growth of its staff has been gradually developed over a series of IDA-financed projects. Under the ongoing Fourth Highway Project, long-term technical assistance is being provided to set up and staff a training center to serve the needs of the Ministry (see Annex 2-9). Local staff have been hired and trained and the center is expected to begin functioning in January 1986. In future, it is expected that the center will be locally managed and staffed. However, there may still be a need for short-term technical assistance to provide training in specialized subjects or to refresh the knowledge of training center staff. Terms of reference for such assistance would be proposed when needed by the Director of the Center and agreed by IDA staff.

8. Improved revenue performance. Road related fees and user charges, with the exception of customs duties and fuel taxes, are collected by the Land Transport Department in the Ministry of Commerce and Transport. This' department needs automated data processing facilities and asncctated training, as well as assistance with record keeping and accox'rting procedures, in order to establish a reliable data base and to improve revenue performance. Funds are foreseen for the purchase of suitable hardware and software and the provision of technical assistance in this area. Detailed terms of reference and equipment specificationswill be agreed between the Director of Land Transport and IDA staff. Further assistance may be needed in the future in order to support the implementationof policy recommendations resulting from the National Transport Plan Study, including, but not limited to, recommendedactions in the area of cost recovery.

WAPT2 January 1986 - 7q - ANNEX 3-7

REPUBLIC OF NIGUR TRNSPORT SECTORPROJECT

FOUR TEMR PROGRAM (1985/86 - 1988/89) - FINANCING PLAN

Expmmditure.Projected- Amount Financed (CPAF (US$ Financing US$ millions Item *illion) 000) Agency Equivalent Zinder-Agadez Road 15,221 42.3 EDF 10.7 AfDF 6.0 IDB et al 24.2 Government 1.4 Takieta-Zinder Road 795 2.2 EDF 2.2 Gaya Bridge 2,800 7.8 CCCE 7.8 Secondary Roads 6,231 17.2 UNSO/Norway/Italy 15.8 AfDF-5. Labor Intensive UNDP 0.5 Brigades 24Other Financing 0.2 863 2.4 Government 0.2 Rural Roads 4,360 12.1 IA Feeder Roads 1.7 Government 0.5 MDA/SAF/SJF 9.9 Niamey-Say Road 3,000 8.3 Other Financing 8.3 Djajiri-Diffa Road 7,053 19.6 CIDA 19.6 Bridge Rehabilitation 2,800 7.8 IDA Righvaye IV 3.0 CovernmenLt 0.4 IDA/SAF/SJF 4.4 Periodic Maintenance EDF 26.5 AfDF 5.0 Paved Roads 15,456 42.9 IDAISAF/SJF 10.2 Government 1.2 Regravelling, 1,680 4.7 IDA/SAF/SJF 3.9 Force Account Government 0.8 Contract 1,470 4.1 IDA/SAF/SJF 3.9 Government 0.2 Equipment Replacement 3,450 9.6 IDA/SAF/SJF 9.1 and Workshops Government 0.5 Consulting Services Supervision 2,288 6.4 IDA/SAF/SJF 5.5 Stuties and T.A. Other Financing 0.9 Routine Maintenance 9,180 25.5 Goverrnment 22.4 IDA(SAP/SJF 3.1 Total 212.9

WAPT2 March 1986 - 76 - ANNEX 3-8

REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

DISBURSEMENT SCHEDULE (US nmillion equivalent)

Cumulative Disbursement at End of Quarter IDA Combined FT Date Profile a Financing IDA SAP SJF

1986 June 30. 1986 Board Presentation

1987 Sept. 30, 1986 0 0 0 0 0 Dec. 31, 1986 0 0 0 0 0 (Assumed date of Credit Effectiveness) Mar. 31, 1987 2 1.0 0 1.0 0 June 30, 1987 4 2.0 0 2.0 0

1988 Sept. 30, 1987 9 4.5 0 4.5 0 Dec. 31, 1987 14 7.0 0 7.0 0 Mar. 31, 1988 20 10.0 0 10.0 0 June 30, 1988 26 13.0 0 13.0 0

1989 Sept. 30, 1988 32 16.0 0 15.0 1.0 Dec. 31, 1988 38 19.0 0 - 4.0 Mar. 31, 1989 44 22.0 0 - 7.0 June 30, 1989 50 25.0 0 - 10.0

1990 Sept. 30, 1989 56 28.0 0 - 13.0 Dec. 31, 1989 61 30.5 0 - 15.5 Mar. 31, 1990 66 33 0 0 - 18.0 June 30, 1990 71 35.5 0.5 - 20.0

1991 Sept. 30, 1990 76 38.0 3.0 - - Dec. 31, 1990 80 40.0 5.0 - - Mar. 31, 1991 84 42.0 7.0 - - June 30, 1991 87 43.5 8.5 - -

1992 Sept. 30, 1991 90 45.0 10.0 - - Dec. 31, 1991 93 46.5 11.5 - Mar. 31, 1992 95 47.5 12.5 - - June 30, 1992 97 48.5 13.5 - -

1993 Sept. 30, 1992 99 49.5 14.5 -- - Dec. 31, 1992 100 50.0 15.0 -

a/ Profile: West Africa Region, IBRD and IDA. Sector Investment and Maintenance Loans; Transportation- Highvays. Quarterly figures interpolated.

WAPT2 April 1986 - 77 - ANNEX3-9 Page 1 of 6 REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

HDM APPLICATION

1. The Road Management Unit (BGR), established within the Department of PublicWorks with technicalassistance provided under the FourthHighway Project,is chargedwith the collectionand processingof a wide range of technicaland economicinformation concerning Niger's road network,in order to assurethe planningand programuingof road maintenanceactivities to make optimaluse of availableresources. To this end, the BGR conducts periodicroad conditioninventories, traffic surveys and road roughness measurements,and collectsand continuallyupdates data on maintenance costs by force accountand by contractand on vehicleoperating costs under differentroad conditions.It is intendedthat maintenanceplanning and programmingshall be done using the HighwayDesign and MaintenanceModel (HDM),including the associateaExpenditure Budgeting Model to correctfor the resourceconstraints expected to prevailin Niger for the foreseeable future.

2. The HDM, which requiresa large storagecapacity, currently runs only on a mainframecomputer or a high poweredmicro (type IBM AT). How- ever, it will soon be adaptedfor use by smallersize computers.The BGR is currently equipped with a VICTOR microcomputer with a 10 megabyte hard disk, which is not adequatefor full applicationof the HDM in its present form. A simplifiedversion of the HDM, calibratedto Nigerienconditions, was thereforedeveloped for the purposeof fixingthe periodicmaintenance programto be undertakenunder this project.

The BGR Road Data Bank

3. The BGR Road Data Bank comprisesfour files differingby the method and frequencyof data collectionas follows:

(a) Road inventorydata: Referencedata identifyingthe links, road construction and maintenance history, by unit of link length. To be updatedannually;

(b) Road conditiondata (A): Variabledata of road condition determinedby annual,drive-over ("windshield") survey and visualrating of 12 parametersby classificationon all lOOm-longelements of each link. Conductedin full annuallyfrom 1985;

(c) Road conditiondata (B): Physicalmeasurements of road roughnessusing the APL25 Profilometerwith data outputat 25m intervals. Conductedwhen feasibleon paved roads only; and

(d) Trafficdata: Vehiclecount and classificationdata for individualsurvey dates and stations. Conductedapproxi- matelytwice annually. - 78 - ANNEX 3-9 Page 2 of 6

4. The system divides the national road network into 120 links as follows:

Total Minimum Maximum Road Type No. of Links Length (km) Length (km) Length (km)

Paved Roads 46 3,161.4 0.7 270 Gravel Roads 53 4,204.1 9.5 295 Earth Roads, Tracks 21 2,452.2 26.4 660

Totals 120 9 817.7

5. The system has a low level of sophisticationthat is practical and highly appropriate for the resources available and for a network which is generally lightly-trafficked(only 546 km or 17Z of the paved roads carry more than 300 vpd and none carry more than 1,000 vpd. Given a set of criteria for maintenance intervention, the system can be utilized to identify maintenance needs and thus develop a works program. However, the reli- ability of any subjective rating method, as is used by BGR for road condition, depends very largely on the control of uniformity of rating over the long-term and particularlyamongst operators. Above all the rater needs to be a skilled reliable technician, with continuity from survey to survey, and one who is able to mLike objective ratings without bias towards his opinion of the need for maintenance. For this reason BGR should review the condition rating system, refining it as necessary in the light of their first-year experience and IDA comments.

Data Conversion for HDM III

6. Approximate conversions were established between the BGR ratings and the physical measures of condition used in HDM III, through a series of field visits, using listings from the data bank and APL profilometer traces of roughness. The roads included.

Route Length (km) Age

Paved: 99 Niamey-Kolo 20 8 yrs 1W Niamey-Tillaberi pkO-61 60 2 yrs 1W " " pk61-86 25 13 yrs - RN1E-Bac Parie 5 10 yrs - Niamey-Tondibia 10 20 yrs

Subtotal 120

Unpaved: 24 Niamey-Ouallam 36 38 27 Niamey-Say 80 117 27 Say-Tapoa 70 65

Subtotal 186 - 79 - ANNEX3-9 Page 3 of 6

The conversionsare presentedin Table 1, givingE in terms of area of ravelling,F of area of wide crackingand D of area of depressionsand of roughness.

7. Two aspectsof the correlationdeserve note. First,the cracking observedwas mostly characteristicof aging of the asphaltand of shrinkage and subsequentfatigue of the lateriticbase course,which clearlydevel- oped a moderatedegree of cementation.The crackswere thereforegenerally widelyspaced (e.g. 2 to 3 m), and littleevidence of intensivefatigue crackingwas seen. For HDM III, the total area coverageof crackingshould be reducedfor wide-spacingsby the factor,FCW:

FCW - (S-0.25)/S2 where S = averagespacing between wide cracks (m). Thus 80Z coverageat 3,-spacingis reducedto 25%, which is equivalentto a down-gradingof the BGR class by 1 or more.

8. Second, the relationship for "Deformation" (D) indicates that the BGRclasses are generally pessimistic, and that a class D-3 representsonly moderateareas of depressions(20 to 40Z) and moderateroughness of 5m/km IRI. These are the lower limits for an overlayto be economicallywarrant- ed for trafficabove 600 vpd. 1/ A ratingof D-3 thereforedoes not always justifya granularor other overlay,and strengtheningshould only be considered if cracking is also severe, and should be supported with a detailed investigation. Calibrationand Validationof HDM III

9. The calibrationof HDM III predictionsof distresswas preliminary becausea large amountof data needs to be evaluated in order to overcome the effectsof inherentmaterial variability and identify the underly- ing trends. The preliminary results are reported here, and a detailed analysisusing all availabledata in the data banK is under way.

10. For paved roads, the calibration results are presented in Table 2. For a representative sample of inspectionsections, each about lOOm long, on the five roads, the observed distressis given,an estimate is made of the distress-free life and this is compared with the predicted life, that is the age for distress initiation according to the relevant HDM relationship. The observed lives for ravelling and cracking were typically about 20 percent shorter than predicted, as follows:

1/ An approximate rule of thumb developed from previous studies using HDM III is that overlays are justified at a roughness level XRI, where

XRI - 56 AADT 0.39

(m/kmIRI), and AADT- annual average daily traffic (veh/day). This is of courseslightly subject to price relativitiesand averagevehicle loading. - 80 - ANNEX 3-9 Page 4 of 6

Observed/PredictedLife

Ravelling initiation 0.83 Cracking initiation 0.74 Potholing initiation 0.99 (given observed cracking and ravelling)

11. These differences are most probably caused by the strong oxid- ation effects induced in the bitumen binder by exposure to the Sahelian climate of high temperatures and sunshine. The binder, which is commonly 50/60 penetration grade, appeared well-suited to the climate because very little bleeding was evident. A softer binder would have extended the cracking life but may have induced bleeding. The relatively early distress observed on the Niamey-Kollo road seems to have been due in part to low adhesion of the highly-polished aggregate. The results for pothole initiation are particularly encouraging, given the highly variable nature of its mechanism. The potholes observed however, all tended to be shallow due to the cemented nature of the lateritic base, so that potholing progression should be restricted to not exceed 2 percent coverage per year. The devia- tions observed are well within the range of variability associated with the HDM III predictions which is of the order of + 60 percent at the 10th and 90th percentile probabilities respectively. A rigorous evaluation therefore requires analysis of the distributions of distress on several routes, and that is being undertaken using the Data Bank. The rut depths observed under all classes of "Deformation" in this sample were negligible, that is generally less than 5mm, and the HDM predictions agree with that. As the roughness survey data had not been processed and were available for only one year anyway, no formal calibration of roughness could be made; however, given the measure of agreement above, the HDM III predictions using parameters applicable to an arid climate can be considered reliable.

12. For unpaved roads, the calibration results are presented in Table 3. Roughness was the only deteriorationparameter evaluated during the mission, and the BGR is to evaluate the average gravel loss through the gravel thickness found in field test pits. Roughness was observed on the roads using the "Descriptive Evaluation Method" given in the World Bank Guidelines, with average integer values being estimated in IRI units over 2 to 10 km long sections; these values are summarized in the table by the minimum, maximum and average over the route length. The HDM III predictions, based on the traffic, maintenance and relevant estimated materials data, are seen to be extremely close to the observed levels with the difference being of the order of only 6 percent. The excellent agreement is very encouraging, and is due in part to the similarity of the lateritic soils to those in the Brazil data base of the HDM III model.

Preparation of Maintenance Program

13. To determine economic rates of return on proposed periodic maintenance works, two new micro-computermodels were developed, for paved and unpaved roads respectively. In essence, the models utilize the primary - 81 - ANNEX 3-9 Page 5 of 6 relationships 2/ of the Road Deterioration and Maintenance Submodel of HDM III and summary vehicle operating cost (VOC) functions that were fitted to results of recent HDM III analyses fo: biger, as follows:

VOC (light vehicles, - exp (5.10 + 0.0265 R) VOC (heavy vehicles) - exp (6.84 + 0.015 R) where VOC - average VOC in CFAF/vehicle km of vehicle class J on roughness R, m/km IRI.

The model applies a maintenance policy specified by intervention criteria for various maintenance activities, and computes benefits and the rate of return by comparing the VOC and road maintenance cost streams of the specified policy and a specified null policy over the analysis period. The model is essentially a practical road management tool for applying a given policy (which ideally will have been derived from a full network optimiza- tion by HDM III). It analyses each link section by section, producing a timetable of works, and estimated quantities, costs and rates of return that are summarized by link.

14. The structure of the model is shown is a flow chart (Attach- ment 1). The input modules provide for menu-style user-friendly input (in French) of condition and other data from the Data Bank, and a data trans- formation module converts the BGR classes into HDM III measures. Road deterioration and maintenance effects, quantities and costs are then computed for one section annually for the specified and null policies, and finally these condition and cost streams are printed and stored. Attachment 2 shows: (a) a summary of the inputs, for one section of a link, and (b) the interpretationof the matrix of intervention criteria. The cycle is repeated for each section of the link, and the results are printed for each section and then summarized and printed for the whole link with the rate of return as shown in Attachment 3. An alternative output lists the total work quantities and costs for all links by work type and year, which forms the basis for preparing a work program.

15. Two special features were added to the unpaved model. First, allowance was made for the beneficial effects of compaction and shaping at the time of regravellingwhich reduce the rate of roughness progression over about 3 years. Second, the benefits of maintaining passability through regravellingwere enhanced by augmenting the VOC with a factor that would apply once the gravel thickness drops below the minimum, reaching a maximum value when the gravel thickness is nil. On loose sand, or on wet clayey soils, extra tractive pover is required, speed is reduced, parts consumptionmay increase, all resulting effectively in higher costs. To quantify this, an estimate can be made in line with the higher costs of using a 4-wheel drive vehicle or truck in order to travel on the road; i.e. a factor of 1.5 to 2 times higher than private cars.

2/ Only relationshipsrelevant to Niger were included in the program, omitting for example asphalt concretes, cemented base pavements, etc. - 82 - ANNEX 3-9 Page 6 of 6

General

16. These micrc-computer models have potential for application elsewhere in Francophone countries, particularly in the Sahel. However, local adaption of the rood condition parameters would be necessary, and certain of the HDM relationships omitted from the models for Niger may have to be replaced for other countries (to deal with asphalt concrete surfacings for example). A generalized micro-computermodel based on the same outline but which includes all relevant functions, is under preparation in TRP at the present time.

WAPT2 April i986 ANNEX 3-9 -83 - Table 1

Table 1: Approximate conversions between the BGR classifications of distress aad physical measures for input to HDM III

Symbol 0 1. 2 3 .4 5

SurfaceMistreg5 Enduit E 1 2 3 4 5 Area of ravelling (2) ARAV 0 5 30 70 50 Area of potholing (x) 1, APOT 0 0 0 X 2X

Cracking Fissuration F 0 1 2 3 Area of wide cracking(%)2/ ACRW 0 5 25 50

Deformation Deformation D 0 1 2 3 Area of depressions (S) ADEP 0 5 10 30 Roughness ('ks) IRI 2 3 4 5 Roughness ranger IRI 2-3 2-4 3-5 3-7 Rutdepth 31

Roughness APL25 Profiloneter coefft CAPL25 2.2 IRI - CAPL25 2 4.4 + 2.2 D luternational Rouchness ITdex IRI 2 + D

1/ The incidence of potholes is definitive only for E-5, but the amount is not indicated by the RGR rating, and when F-3, and E-4 or 3 there are small probabilities that small amounts of Dotholing exists. The amount is defined in terms of S, where X - F4D.

2/ Predominantly only wide cracks are visible from a moving vehicle. For the critical analysis, these volumes should be reduced using a factor of 0.4 to account for wide crack spacings.

3/ The rutdepths on the sarple of roads observed were generally indiscernible,i.e., less than 5m, even for high classes of Deformation'. Note, however that 'D' is an area, not depth, measure and represents depressions, potholes, ruts and roughness together. 84 ~~~~~~~ANNME3-9 - 84- Table 2

'rble £: Celib!etion _rellatiaryof11D1 tI ei.txuas predictLons for Niner paved roads from slapeetlosmie field

ROUTE g0. IAA AMC SUFACB OISTRESS VID9 C3ACKINII W OMTION and NAKE. VehJd Obs Obs Pred. Obs Obs. Obs. Obs.l Obs. Obs. Fred. (YE) yr K Life Uf. 2 1 V3/ Life LiLfe P+P 4 D IRt Pothole Age6/

:Niamey-Kollo 492 7 3 5 10 1* 6 13 0.05 2 3 8 (.02) 3 5 10 2* 5 13 0. 2 2.3 7 3 5 10 2* 5 13 20 3 4 7

RNlv:pk!0-20 1300 12 4 8 10 12-3 9 13 P - 4 11 20-4:1. P - 3 11

RWlv:pk 61- 201 13 3 10 10 2 10 13 0 1 3 12 Tillaberl 201 13 4 9 10 3 9 13 0.05 1 3 11

RN4: lv-Uac 40 13 5 8 10 2 10 13 15 3 7 11 Farie 40 13 5 8 10 2 10 13 2 3 5 11

:Niamey- 100 20 3E 14 13 2 14 13 0.3 2 3 16 Tondibia.(10km) _ _ 4E - - 2 .. 14 13 .5.OSl 3 8 16

Averate ratio observed: 0.83 0.74 o.996/ Predicted Age for Distress Initiation Range 0.5-1.7 0.4-1.1 0.8-1.1

(Note: -Life here means distress-free life, i.e., age at initiation of distress).

1/ YE - annual loading in million ESA/lane/yr. Z/ Assuming high quality snecification and construction 11 Recorded values have been reduced by 1 where crack-spacing was wider than 1.5m (indicated by *) (see text para. 15) 4/ Area average of potholes plus vatching, 2 gJ Distress due probably to seascoal inundation from nearby stream and inadequate culvert size: potholes 0.5 to 4.m diameter and up to 6cm deep. 6/ Given the observation of cracking and ravelling, as applies in management. - 85 - AMNEX 3-9 Table 3

Table 3: Validation of HDN IlI predictions for unpaved road deterioration in Niger.

RN 24 RN 27 ! RN 27 ______.__. N'ameY-OuallamNiamey-Say I Say-Tapoa

Width a8 Avg. daily traffic veh/d 38 117 65 Heavy vehicles 2 5 10 5 Max. stone size an 5-20 10-80 10-40 Gravel T.aterite Laterite Laterite Blading frequency Per yr 2 2 2 Length surveyed km 36 80 70

Observed Roughness RIR Minimum M/km 5 7 7 Maximum - 14 14 11 Average - 8 10-13 9

Predicted Roughnesst/ Average | 7.4-7.7 11.5 - 13.1 9.1 - 9.9

Observed/Predicted I 1.06 0.91 0.95

Corrugations Occurrence Z 60 40 10 Depth MM 50 80 5C Wavelength i 0.5-1.0 1.n 0.5-1.0 Frequency at 60 km/h Hz 33-16 24 30

Driving Soeed km/h 60-100 50-90 70-100

A.'stmotions:Curvature - 0; Rise plus fall 0; Precipitation - 0.06 M/no; !aterial gradation MG - 0.3 and MGD - 0.5 -86- ANMEX 3-9 Attachment 1

Trafftr-~ ~ Pn_t.r~ ~ fr".r~ ~ "s ,A Surface, Link ID, Sec ADT, Z h vy, Null, uuecifi intce. costs Crack:L4g rD, type,vidtl "a , lo ting,V policies: type vhcle oper. Deformation age. structure growth rates intervention cst paraus. Rouhnes,etc _rainfall-__ a periods. _criteria;X _ VDC - f (R8)

Apply defaults; , Transform to HDM Entry Routine units

Select Next Policy 1) Null 2) Specified

Predict Condition - ~~AndVOCI At End of Year; j

I I ' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Cozpute MaCntepance l Quantities & Costs. i UpdateCondOtitn

St~~~S r

I CamclatieCalculation Rou,t CBeneflts

Fig. D.1 Computer Model for Preparing Maintenance Program with Economic Indicators by Prolect: Flow chart outline 87 - ~~~~~~ANNEX3-9 - -87 Attachment 2

Duree d'etude de 10 ans, a partir de 1936 Trafic croissant de 8 Z pendant 10 ans. Pas de travaux d'entretien periodique possibles avant 198, L'entrerien ce'u--nt est pris en compte,sans l ririkL2ge.

Les seuils minioaux d'intervention sont Eit mcheseul ...... : : siit+ fissiti ) 4 difoutia) o - idtbicg lm ...... : m*dit +fissuratim o6 MofratinfO - iflachag.i+ wam*...... : -tnaitssuratim' ) I iforatim) 2 - Dinacha+bicude ...... : miiti t fissiratim)6 dMfirutiontf2 - Rdfecticn(leawe + bicudhe:.wit + fisRratijn) 4 diforation)3 Epaisseur de rechargement de chaussee de 15 cm en cas de refection. P.U. de reparation de nid de Poule : 3OOF.CFA/m2 P.U. du deflachage a 1'enrobe .-. : 5500F.CFA/m2 P.U. de 1Pimpr6gnation .------: 600F.CFA/m2 P.U. de 1'enduit monocauche ...... : 1550F.CFA/m2 P.U. de 1'enduit bicouche ...... : 6OF.CfA/M2CF P.U. de refectionde chaussee .... : 5600F.CFA/m3 P.U. de rechargement d'accotement : 3000F.CFA/e3

Cout d'exploitation des vehicules lgers = exp( 5.1 + .0265 * I.R.I ) Cout d'exploitation des poids lourds = exp( 6.84 + .015 * I.R-I. )

(a) Report of inDut data in program

(E+F) D I1 2 3 ,4 5 ,6 7 ,8 01 Monocouche Bicouche

1 - (SST){ (DST)

Deflachage + Monocouche IDeflachage4- 2 Bicouche (DST)

3 rPatching Reflection _ + SST) i(Granularoverlay)

(b) Diagnostic presentation of intervention criteria: First trial

Fig. D.2 Simmary of (a) input parameters and (b) interpretation or policy interventioncriteria: An example case. - 88 - ANNEX3-9 Fig. D.3 Example of output of condition and cost stream Attachment 3 for section and sumarnY for link.

r- 6 - Sai It=! N'UU-SUU I oumr=14.4 km - -Larter = 6. tnSMiWulW -buvstUiM 1U - Thficmm1l43evihjt20ZdteL.

Sous-smetainm~Los - Lonfnuur z- ' km, E 3 F 3 :2

valours IGE Etat estime ------C.E.V Type Cout trvz Annee E F 0 CAPL END FIS FLA KID IRI (HF.CFA) trvx (MF.CFA)

*088*88 Evolution sans entretien piriodique 1996 5 3 4 12 41S 971 1SZ 42 5.5 ;; ec 0.0°0 1987 5 3 4 LS 57% 1002 21! 6S 6.7 36 ec 0.032 1998 5 3 19 73Z 100S 29S 8a 8.2 40 ec 0.043 1999 5 3 4 22 90Z 100S 39! 1OZ 9.8 45 ec 0.052 1990 5 3 4 25 100S IOOZ 5OZ 11S 11.5 SO ec 0.059 1991 5 3 4 26 1002 100S 64S 122 12.0 56 ec 0.064 1992 5 3 4 26 1001 1002 82Z 132 12.0 61 ec 0.070 1993 5 3 4 26 100S LOOZ 1002 1.S 12.0 66 ec 0.073 1994 5 3 4 26 1002 1001 100S 14! 12.0 71 ec 0.074 1995 5 3 4 26 1OO! 100S 100S 14S 12.0 77 ec 0.075 1996 5 3 4 26 100! 100! 100! 14! 12.0 83 ec 0.075

620 0.637 *&**88 Evolution avec entretien periodique : 1986 5 3 4 12 411 97! 15! 4S 5.5 33 ec 0-020 1997 5 3 4 15 571 100! 21! 6! 6.7 36 REF 14.544 1988 1 0 1 2 0 0 12 0! 0.7 36 ec 0.000 1999 1 0 1 2 S2 0 2! 3S 0.8 38 ec 0.000 1990 1 0 1 2 O 0! 3S O 0.8 41 ec 0.000 1991 I 0 1 2 O O 4! 0! 0.8 4S ec 0.000 1992 1 1 1 2 02 1! 5! O0 0.8 48 ec 0.000 1993 2 1 1 2 12 1S 7! 0! 0.9 52 ec 0.000 1994 3 1 1 2 212 2! 8! 02 0.9 57 MC 5.580 1995 1 0 1 2 0! 0! 9! 0! 0.9 61 ec 0.000 1996 1 1 2 2 02 1! 11S 0: 1.0 66 DMC 7.O79

514 27.823

SANSENTRETIEN PERIODIOUE I AVECENTRETIEN PERIODIOUE ------_ ------i------| I Anie! TNJAEnduit:Fissur:Diforu:I.R-I : C.E.V.:.Inv. 'Enduit:fissur:Defor:1.R.I: C.E.V. : C.;inv. ! eei /2'10 :/20: /20 :I :11F.CFA :F.CFA' /20 :/20 :;20 :a : MF.CFA:F.CFA

!1986 ' 431 0.0: o. : 0.0:4.6: 796: 0' 0.0:6.4: 0.0:4.6: '86: 0' !1987 !465 0.0: 2.2: 0.0 :5.: 867: I' 0.0 :2.2 :0.0 :1.0: 867: ;l9' !19Qt SG31 0.0: .0: 0.0: 7.1: 71: '20.0: 20.0: 15.O: !.: d: 3' '1989 ! 543' 0.0 O.,: 0.0: 8.6: 1069: I !20.0: 20.0: 15.0: 1.0: 926 0' '1990 ! 596' 0.0: 0.0 00: 10.3: 1193: I120.0 :0.0 :15.0: 1.0 1:000: 0 ' !1991 ! 633 0.0: 0.0: 0.0: 11.1: 1335: 2'20.020.0: 15.0: 1.: 1001: 0 ' !1992 684! 0.0: 0.0: 0.0 :11.0: 1469: 2!20.0: 13.3: S.0: 1.1: 1168: 0O !1993 ! 739' G.0: 0.0: 0.0: 11.0: 155: 2'15.: 13.3: 15.0: 1.2: 1263: 0O !194 ! 798! 0.0: 0.0: 0.0 :11.0: 1712: 2!10.0 :13.3 :i5.0: 1.2: 1365: 134' 1995 ! 862! 0.0 0.0: 0.0: 11.0: 1949 220 q: 20.0: 15.0: 1.2: 1476 0' !1996 ' 930' 0.0: 0.0: 0.0 :11.0: 197 ?220.0:13.3: 10.0: 1.2: 1596: IO'

TOTAU: 14a2: ' ..,.-s - 89 - ANNEX3-10 Page 1 of 5 REPUBLIC OF NIGER

TRANSPORTSECTOR PROJECT

RURALROAD EVALUATION

A. Methodology

1. The methodology set forth in this annex is substantially the same as that used by the Government of Niger in preparing the Second Rural Roads Program. It applies to construction of low standard roads providing reliable access for the first time to populated and/or potentially productive agricultural areas. The methodology requires a field reconnaissance of each road and data collection through interviews with local officials and communityresidents, as well as use of some secondarydata availableat the nationil level.

Cost Estimates

2. Under the First Rural Roads Program,roads were completedto two differentlevels of improvementand in three differentenvironmental zones. Based on the field reconnaissance,costs are estimated for each new road proposed for the rural road program using the unit cost/km (in current CFAF) for a similar road which has already been completed. Where a proposed road traverses different types of terrain, the corresponding costs are used for each section of the road. The accuracy of this cost estima- ting procedure should improve over time as more experience is gained with constructionunder varying ecologicalconditions.

3. Initial cost estimatingfor secondaryroad improvementswas done by dividing anticipatedbrigade operatingcosts by the length of road to be completed. To these costs were added the full amortizationof equipment purchasedunder the program and the cost of the Government contribution (salariesof counterpartstaff, office space and workshop services). Tech- nical assistancecosts, which are grant financedby the -participating donors,were not included. This cost estimatingprocedure will be revised to reflect the partial amortizationof new equipmentand the cost of technical assistance,as well as more racent experiencawith respect to brigade operatingcosts.

4. Annual routinemaintenance costs for secondaryand rural roads are estimatedat CFAF 240,000/km (not includingtaxes) in 1986 prices. This figuremay be changed -s more accurateinformation becomes available from the maintenancemanagement informationsystem in the future. For periodic maintenance, it is assumed that roads will be regravelled every six years at a unit cost of CFAF 1.98 million/km(not includingtaxes) in 1986 prices.

BeL2fit Estimates

5. This methodologydivides the benefits of rural road improvements into two types: benefits to trend growth trafficand benefits to induced agriculturaltraffic. In the absenceof reliableaccess, pre-project - 90 - ANNEX 3-10 Page 2 of 5 traffic is low in volume and highly irregular over tire. As a result, such traffic cannot be cost-effectivelymeasured using standard traffic count procedures. A rough estimate, derived from several studies conducted in Niger and other Sahelian countries, places traffic on unimproved tracks at about 0.2 vehicles per year per person residing in the road influence area. The resulting estimated pre-project traffic levels, ranging from 1 to 20 vehicles per day, may be modulated according to observed use of the roads by a factor ranging from 0.5 to 1.5. It is assumed that 90% of the pre- project traffic is composed of four-wheel drive vehicles transporting passengers and non-agriculturalfreight.

6. Following the provision of reliable access, it is assumed that the "normal" pre-project passenger and non-agriculturalfreight traffic will shift from four-wheel drive vehicles to passenger cars, small vans and trucks in the proportion of 1/8 passenger cars and 7/8 small vans/trucks, and that an increased average load factor would reduce the total number of vehicle trips by 20%. It is further assumed that this "normal" traffic will grow with population (which grows at 2.7% per year) with an elasticity of 1.5, for an average annual growth rate of 4% per year.

7. The other 10% of the pre-project traffic is assumed to represent light trucks carrying agricultural produce. It is assumed that, with the project, traffic in traditional food crops (millet, sorghum, cowpeas) will shift into medium trucks and that average load factors will increase from 60% to 80%. Other agricultural products will still be transported in light trucks but with a similarly increased load factor.

8. The benefits to trend growth traffic in agricultural products are calculated in the following fashion: for each zone (defined as 5 km on either side of each road), production of traditional food crops is estimated by multiplying the presently cultivated area in each crop by the average yield for the period from 1979 to 1985, based on the best available data. It is assumed, therefore, that without the project production will not change over the project period. From this estimated production 15% is de- ducted for losses in storage, seed stocks, etc. The result is then comr pared to the annual consumption requirements of the influence zone population, estimated at 220 kg of millet and sorghum and 25 kg of cowpeas per person. In a few cases, present local production of rice and vegetables may also be taken into account. In this case, 20% losses are assumed and local consumption of rice is estimated at 20 kg per person per year.

9. Future trend growth traffic in agriculturalproduce is then estimated in terms of the annual surplus or deficit of traditional food crops (based on "without" project production levels) in each road influence zone. These quantities are converted into numbers of truck trips using the assumed vehicle types and load factors listed above fo-:the "with" project and "without" project case. User cost savings are then calculated, as for passenger and non-agriculturalfreight traffic, using vtnituser costs for different levels of road improvement, updated from the analysis of the First Feeder Road Program.

10. The estimate of benefits to induced agricultural traffic is made by comparing the estimated "with" project and "without" projec- production - 91 - ANNEX 3-10 Page 3 of 5 of traditional food crops and "counterseason crops" in the project area. The analysis of traditional food crops is generally limited to millet and sorghum, although benefits related to increased commercial production of groundnuts (arachide) and cowpeas (niebe) may be taken into account in special cases. The counterseason crop analysis includes eight potential crops: manioc, sugar cane, onions, potatoes, squash, tomatoes, cowpeas, and corn.

11. It is assumed that, without the project, marketed production of traditional food crops will rpmain constant over the project period. It is further assumed that prices will not change over the project period in either the "with" project or the "without" project case. Finally, it is assumed that in the "with" project case there will be a regular increase in yields in areas covered by ongoing agricultural production projects. The rate of increase is estimated at 2% per year in Niamey department, 2.5% per year in the area covered by the Illela-Konniproject, 1.5% per year in the Damergou project area and in the district of Goure, and 1% per year in Bouza district. In other areas no increase in traditional food crop production is forecast. Where an increase in production of traditional food crops is predicted, it is assumed that 15% to 30% of the value added can be attributed to the road investment, depending upon the level of improvement and the importance of complementaryinvestments in bringing about this change.

12. Counterseason crops are counted only where specific sites have been identified and the corresponding complementary investments (mainly small scale irrigation) has been planned. In each case, the presently cultivated and potentially cultivable area is identified for each crop. It is assumed that the area cultivated will increase over ten years to reach the potentially cultivable area or a 20% increase in the presently cultivated area, in the case where the potential area is unknown. Yields will also increase from present levels to potential levels over ten years, according to the following schedule:

Present Potential Annual Crop Yield Yield Increase (T/ha) (T/ha)

Manioc 11 20 6Z Sugar Cane 17 25 4% Onion 26 30 1.5% Potato 9 20 8% Squash 11 20 6% Tomatoes 13 20 5% Cowpeas 0.5 1.5 11% Corn 0.6 1.5 9% - 92 - ANNEX3-10 Page 4 of 5

13. It is assumed that 20% of production is lost due to spoilage and that half of the remainder, or 40Z of the total, is marketed. The value of this incrementalmarketed production is estimated at 70% of its market value to allow for transportationand distribution costs. Finally, it is assumed that between 20% and 30% of this value added in agriculture is attributable to the road investment, depending on the degree to which reliable access is the most important constraint to production and marketing of these crops.

Rate of Return Calculation

14. Net cost and benefit streams are compared over a period of ten years. Since periodic maintenance is assumed in the sixth year, the roads are assumed to retain a salvage value equal to 30% of the original investment at the end of the project period. Roads showing a rate of return of more than 10% according to the above methodology may be considered for inclusion in the secondary and rural roads programs.

B. Results

Pre-Screening

15. This methodology was first applied in the evaluation of 43 rural roads totalling about 1,500 km. The list of roads to be evaluated was established by the Inter-MinisterialCommittee set up under the Feeder Roads Project, in consultationwith local authorities and with agricultural development officers. Three criteria were important in this initial screening process: (a) roads that would provide access to identified sites for counterseasoncrop cultivation; (b) roads that would provide access to high concentrationsof population; and (c) an equitable distribution of candidate roads among the regions of the country.

16. The use of these criteria shaped the outcome of the economic evaluation in important ways. The justification of roads serving counterseason crop sites was based largely on generated traffic and was most sensitive to the length of road to be constructed in relation to the potential cultivated area. In densely populated areas with low production potential, roads were principally justified by trend growth traffic representing increased £lows of food aid and passenger traffic. Here the key factor was the length of the road in relation to population density. Longer roads in less densely populated areas with low production potential generally proved not to be justified.

17. This finding had an unfortunate effect on the distribution criterion, since generally rural road constructionis not justified in the pastoral "remote areas", roughly north of the 300mm isohet. Special provision needs to be made to meet the access needs of the relatively mobile population of these areas through means other than road construction. However, it is believed that in parts of the north, soil and terrain conditions may be such that unit costs of road constructionwould be considerablyless than those so far experienced under the rural roads - 93 - ANNEX 3-10 Page 5 of 5 program. Costs can be further reduced through local participation in construction and maintenance activities. Consequently, it has been agreed that two short roads connecting population centers to the paved Tahoua- Agadez r3a- may be constructed as pilot projects for the purpose of determining appropriate technical solutions, constructioncosts, and socio-economicconsequences of road building in this region.

Economic Evaluation

18. The initial reconnaissanceof the alignments proposed by the Inter-MinisterialCommittee led to several modifications in the list of candidate roads, by making a more precise estimate of road length, in some cases by proposing a shorter route or an extension, by linking inter- dependent projects, and by eliminating proposed roads vhere alternate access was already available. The economic evaluation therefore covered 40 road links for a total of 1,330 km. Of these 40 roads, 21, totalling 833 km showed rates of return over 10% and consequentlywere selected for the second program. Three roads totalling 50 additional kilometers, with rates of return close to 10%, were retained for further study. Detailed information on the selected roads is available in the project file.

19. The roads with the highest rates of return are short roads in relatively densely populated areas linking potential counterseason crop sites to the paved road network. Many of these appear suitable for labor based construction. After these come longer roads in densely populated and productive areas. Since present population density is closely linked to the carrying capacity of the land, road feasibility falls off sharply as population density declines except for special situationswhere roads would provide access for the first time to sites of exceptional potential. In the latter case, complementaryinvestments in small-scale irrigation and possibly in settlement schemes will be critical to project success.

Social Evaluation

20. The second phase of the rural roads program will benefit approximately 350,000 rural producers (about 7% of Niger's rural population),most of whom presently have incomes well below the national average. If the expected development takes place, the rural roads program, together with the complementary investments,can make a significant difference in the incomes of these people, lifting many out of the poverty group. Once the road access and other infrastructuralconstraints are removed, however, success will depend on the delivery of suitable production packages and extension guidance, on the development of markets and demand-responsive marketing mechanisms, on sustained soil fertility and the continued availabilityof ground water. Finally, projects that depend for their success upon the permanent settlement of previously nomadic people will not achieve their objectives without massive attitudinal and behavioral change on the part of the beneficiaries. For this reason, alternative transport solutions should be studied to meet the access needs of people living in pastoral areas.

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