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World Bank Document 1 PID THE WORLwDBANX GROUP ANVorld Free of Poyorty ?lhfoShop Public Disclosure Authorized 'Me Woddl Iank Report No AB84 Initial Project Information Document (PID) Project Name MADAGASCAR-MG-TRANSPORT INFRASTRUCTURE fNVESTMENT PROJECT Region Africa Regional Office Sector Roads and highways (82%); Ports; waterways and shipping(l4%); Aviation (4%) Project ID P082806 Supplemental Project Public Disclosure Authorized Borrower(s) REPUBLIC OF MADAGASCAR Implementing Agency MINISTRY OF TRANSPORT AND MINISTRY OF PUBLIC WORKS Address Program Executive Secretariat Address' Vice Premier Office of Economic Programs, Ministry of Transport, Public Works and Regional Planning, Antananarivo, Madagascar Contact Person Jean Berchmans Rakotomaniraka Tel. 261 33 11 159 42 Fax. Email rjb_sepst@dts mg Environment Category A Date PID Prepared May 15, 2003 Auth Appr/Negs Date September 10, 2003 Bank Approval Date November 13, 2003 1. Country and Sector Background Public Disclosure Authorized The transport sector plays a key role in Madagascar's growth and poverty alleviation strategy. Increased foreign investment, development of the country's eco-tourism and mining potential, and growth in agricultural output all depend on the efficiency of transport services and the availability of appropriate transport infrastructure. Unfortunately, three decades (1970-2000) of inappropriate sector policies have led to a serious deterioration of the country's transport infrastructure. It is estimated that during that period the country lost on average about 1000 kilometers of roads per year due to lack of maintenance In April 2000, after almost ten years of sector dialogue and no lending in the sector, the country adopted a comprehensive transport sector policy and strategy, which aims at (i) focusing the government's role on sector oversight and coordination; (ii) creating jointly public-private controlled and user financed agencies for sub-sector management and regulatory functions; (iii) divesting operational activities to the private sector, through privatization and concessioning arrangemenlts; (iv) development of the local private sector for works design and execution; and (v) rehabilitation of the transport infrastructure to appropriate levels. The transport sector APL assists the government, jointly with other donors, users and the private sector, to implement this policy and strategy. Public Disclosure Authorized In January 2003 the Government merged the former Ministry of Public Works, Ministry of Transport and Meteorology, and the Ministry of Regional Planning and put them under the leadership of the Vice Prime Minister. In the process of this reorganization a very light structure was adopted reflecting the role of the 2 PID Ministry as an oversight and coordination agency. The new Ministry (VPM) is well positioned to implement and oversee the comprehensive transport sector policy and strategy. Following are the main sub-sector issues and the Government's strategy to address them: The Road Sub-sector: The road networkof Madagascar has been gazetted, based on thCharte routiere, as 2,560.2 km of national primary roadsRoutes Nationales Primaires RNP - also called the structural network, connecting the provincial capitals with the national capital), 4,753.8 km of secondary national roads ( Routes Nationales SecondairesL RNS), 4,549 km of temporary national roatsu(es Nationales Temporaires - RNT), 12,250 km of provincial roaoiAtes Provinciales- RP), and 7,500 km of communal (local government) roads (though not yet gazetted) for a total of 31,612 km. Of these only 5,855 km are currently in good and fair condition. Of the roads in good and fair condition 4,074 km are paved. 25,757 km of the road network are in bad condition, and therefore are in need of rehabilitation. Most of the roads in bad condition are only seasonally practicable, and some not at all, inducing very high costs on users. The road network and its condition in 2002 Type of Road Length (km) In good or fair Of which bituminous In bad condition (km) surface (km) condition (km) RNP 2560 1616 1577 944 RNS 4753 1319 1277 3434 RNT 4549 1000 800 3549 RP 12250 1070 70 11180 RC 7500 850 350 6650 Total 31612 (100%) 5855 (19%) 4074 (13%) 25757 (81%) Through a six year paving, rehabilitation and maintenance program (2003 - 2008) the Government intends to bring the share of good roads to 60% (which includes 100% of all national roads), and the share of paved roads to 23%, as shown in the table below. The planned condition of the road network in 2008 Type of Road Length (km) In good or fair Of which bituminous In bad condition (km) surface (km) condition (kin) RNP 2560 2560 2521 0 RNS 4753 4753 2827 0 RNT 4549 4549 1280 0 RP 12250 5750 250 6500 RC 7500 1450 410 6050 Total 31612 (100%) 19062 (60%) 7288 (23%) 12550 (40%) Following is the necessary investment and maintenance program 2003 -2008 to get the network to the above condition: Madagascar Road Program 2003 - 2008 Cost and Financing Type of Works |Finance |Million US Dollar 3 PID National Roads (RNP/RNS) - APL-3 - Routine maintenance RMF 60 - Periodic maintenance of gravel roads RMF 14 - Periodic maintenance of paved roads RMF/Government/donors 92 - Rehabilitation of gravel roads Government/Donors 182 - Rehabilitation of paved roads Government/Donors 74 - Paving of gravel roads Government/Donors 152 - New construction (urban roads in Tana) Government/Donors 9 Sub-total 583 Rural Roads (RNT/RP/RC) - APL-2 - Routine Maintenance RMF 44 - Periodic maintenance RMF 61 - Rehabilitation Government/Donors 167 Sub-total 272 Total 855 Road Management:Road management in Madagascar has been weak, leading to the loss and degradation of over 80% of the network over the last 30 years. In its sector policy and strategy the government plans a complete overhaul and renewal of road management, as follows: (i) creation of a user-financed and controlled second generation Road Maintenance Fund (RMF) (see next chapter below); (ii) creation of six provincial and one central road agencies (PRA and CRA) for the management of contracts; and (iii) restructuring of the Provincial Roads Departments (PRD). The PRD are deconcentrated units of the VPM at provincial level. They have formerly been executing agencies for works on national roads within provincial boundaries, most of which was done by force account. They are now being restructured to become programming agencies for all works on all roads (national, provincial and communal) withinl provincial boundaries. The PRAs and the CRAare independent and autonomous contract management agencies (AGETIP-like) overseen by a Board of Directors and financed by a percentage of the contracts they manage. The PRAs manage all works on provincial and communal roads, as well as routine maintenance on national roads, while the CRA manages large contracts (periodic maintenance, rehabilitation, upgrading including paving and construction of national roads). Both PRAs and the CRA are currently being created, and PRD staff is being equipped and trained with finance from APLI. The Road Maintenance Fund (RMF): Madagascar established a Road Maintenance Fund (RMF) in 1999. The purpose of the RMF is to finance the maintenance of all roads in Madagascar. The RMF is a second generation road fund with a legal basis, governed by a Board with a majority of private sector road user representatives, with a small secretariat (with five high level staff), and to be financed from road user charges. A recent audit revealed important shortcomings of the RMF during past years. Consequently a revised decree was agreed upon between Government and donors and was adopted in March 2003 New management of the RMF is being recruited and a new Board constituted. Technical assistance is being provided to the RMF by the European Union (EU). The table below summaries the maintenance funding requirement for 2003 - 2008 and expected sources of income. The current fuel levy of U$5 cents equivalent per liter of fuel would have to be increased to US$7 cents in 2005, and a heavy vehicle licence fee would have to be introduced in 2004 to match the increasing needs due to the increase of the network in good and fair condition as a consequence of the rehabilitation program. Local governments (provinces and communes) are contributing 10% to all 4 PID maintenance works. Persisting financing gaps are planned to be filled by donor and HIPIC (IPPTE) contributions. Also some "backlog" periodic maintenance will be financed by donors in 2003 and 2004. (Amounts in US $ million) 2003 2004 2005 2006 2007 2008 Total Maintenance Requirement 28.0 32.6 38.3 43.9 49.6 55.5 - of which expected from fuel levy 22 1 23 4 29.8 31 6 39.1 41 4 - of which expected from heavy vehicle licence fee 0.0 2.5 5.0 5.3 5 6 6 0 - of which co-financed by local governments 0 7 0 8 0 9 1 0 1.1 1 3 - of which financed by EU 1 5 1 1 0 0 0 0 0 0 0 0 - of which IPPTE 3.7 4 8 2.6 6.0 3 8 6 8 The road maintenance planning and execution cycle is planned as follows: (i) at an annual transport sector conference in May each year the RMF will give out unit rates for the different maintenance works (based on advise from VPM) and budget envelopes to the different road owners; (ii) based on this the PRD would then, on behalf of the road owners, prepare the programs for the following year and submit them to the RMF by end of August; (iii) thereafter the RMF will consolidate the different plans and approve them by the end of October (for this peak period the RMF will employ the services of consultants); (iv) during the period of November to December, the CRA and PRA will procure the respective works and services contracts; and (v) by January each year the maintenance (normally annual) contracts can commence.
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