FILECOPY ReportNo. 1S06-4EN Appraisalof a Third HighwayProject People'sRepublic of Benin Public Disclosure Authorized October25, 1977 WesternAfrica ProjectsDepartment HighwaysDivision FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank Thisdocument hasa restricteddistribution and may be usedby recipients only in the performanceof their officialduties. Its contentsmay not otherwisebe disclosedwithout World Bankauthorization. CURRENCYEQUIVALENTS Currency Unit: CFA Francs (CFAF) US$1.00 = CFAF 245 CFAF I million = US$4,081 Fiscal Year January 1 - December 31 System of Weights and Measures: Metric Metric US Equivalents I meter (m) 2 3.28 feet (ft) I square meter (! ) 10.76 square feet (sq. ft.) I cubic meter (m ) 35.30 cubic feet (cu ft) 1 kilometer (km) 2 0.62 mile (mi) I square kilometer (km ) 0.39 square mile (sq. mi) 1 hectare (ha) 2.47 acres 1 metric ton (t) 2,205 pounds (lb) Abbreviations and Acronyms BADEA Arab Bank for Economic Development in Africa CEBTP Centre d'Experimentation du Batiment et des Travaux Publics CIDA Canadian International Development Agency CNERTP Centre National d'Essais et de Recherches des Travaux Publics DLT Directorate of Land Transport DRB Directorate of Roads and Bridges DSP Directorate of Studies and Planning EDF European Development Fund FAC Fonds d'Aide et de Cooperation HMCS Highway Maintenance Coordination Service IDA International Development Association ME Ministry of Equipment MT Ministry of Transport NORAD Norwegian Aid Agency OCBN Organization Commune Benin-Niger des Chemins de Fer et des Transports SNWS Studies and New Works Service STI Services des Techniques Industrielles UNDP United Nations Development Programme USAID United States Agency for International Development vpd vehicles per day FOR OFFICIALUSE ONLY PEOPLE'S REPUBLIC OF BENIN APPRAISAL OF A THIRD HIGHWAY PROJECT TABLE OF CONTENTS Page No. SUMMARY ............................................ ... .. iV 1. INTRODUCTION ........... ............................... 1 2. THE TRANSPORT SECTOR ...... ....................... 2 A. Economic Setting ................................. 2 B. The Transport System ........ ............................ 3 C. Transport Administration and Coordination ........ 6 D. Transport Investment and Financing .... ........... 6 3. HIGHWAY SUBSECTOR ............................ ........... 7 A. The Road Network ................................. 7 B. Vehicle Fleet and Road Traffic .................. 8 C. Administration ...... ........................ 9 D. Staffing and Training ........................... 9 E. The Road Transport Industry ...................... 10 F. Engineering and Procurement ...................... 11 G. The Road Construction Industry ................... 11 H. Maintenance ...................................... 12 I. Financing ........................................13 4. THE PROJECT ................ ..................... ...... 15 A. Description ......99*......0.................... .9496998900....... 15 B. Cost Estimates ............. .......................... 19 C. Execution and Procurement ........................ 20 D. Financing and Disbursement ....................... 21 E. Project Monitoring ... ..... .......... ...... 22 5. ECONOMIC APPRAISAL .................... q*_ *es .... 23 A. General . ................* .................... 23 B. Rehabilitation of the Godomey-Bohicon-Abomey Road. 23 C. Bituminous Road Resurfacing ...................... 26 D. Resurfacing of Laterite Roads ............ ......... 27 E. Distribution of Benefits .........................28 6. AGREEMENTS REACHED AND RECOMMENDATION .................. 28 This document hasa restricteddistribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosedwithout World Bank authorization. -2- TABLES 1. Fuel Consumption, 1970-1976 2. Transport Investments by Subsector, 1970-1975 and Planned Investments, 1976-1980 3. Highway Network, 1976 4. Motor Vehicle Fleet 1967, 1970 and 1975 5. Expenditures for Roads, 1970-1975, and their Financing 6. Government Revenues from Road Users, 1975 7. Design Standards for Godomey-Bohicon-Abomey Road 8. Bituminous Roads Needing Resurfacing, their Traffic in 1976 and Expected Traffic Growth, 1978-1986 9. Laterite Roads Needing Resurfacing, their Traffic in 1976 and Expected Traffic Growth, 1978-1986 10. Spare Part Requirements for Equipment Rehabilitation and Stock Increase 11. Equipment for Resurfacing Brigades for Laterite Roads 12. Cost Estimates, Net of Taxes, at July 1977 Prices (item by item) 13. Cost Estimates, Net of Taxes, at July 1977 Prices (functional classification) 14. Estimated Schedule of Disbursements 15. Economic Appraisal Godomey-Abomey 16. Bituminous Roads Resurfacing, Cost and Benefit Streams, 1979-1986, Rate of Return and Benefit/Cost Ratio Road by Road 17. Resurfacing of Laterite Roads, Cost and Benefit Streams, 1979-1986, Rate of Return and Benefit/Cost Ratio Road by Road 18. Sensitivity Analysis, Resurfacing of Bituminous and Laterite Roads 19. Estimate of 1976 Traffic on Godomey-Abomey by Category of Vehicle and by Road Section ANNEXES I. Training Program II. Tables on Economic Appraisal: Resurfacing of Bituminous Roads III. Tables on Economic Appraisal: Resurfacing of Laterite Roads CHARTS EXHIBIT I - Organization of DRB, 1976 EXHIBIT II - Traffic by Road Section on Godomey-Abomey, 1976 MAP PEOPLE'S REPUBLIC OF BENIN APPRAISAL OF A THIRD HIGHWAY PROJECT Summary i. With a per capita gross domestic product (GDP) of about US$130, Benin is ranked as one of the poorest countries in the world. Agricul- ture is the mainstay of Benin's population. Due largely to Benin's role in handling substantial amounts of transit trade for Niger and Nigeria, trade and transport are the most important economic activities. Together with public administration and other services, they contribute more than half of total GNP. Whereas agriculture employs about 70% of the labor force, the rural sector's share of GNP is only about one-third. Aware of this imbalance, the Government has begun to place greater emphasis on agriculture and rural development. ii. The principal transport artery in the country is the Benin route, which consists of the railway linking the port of Cotonou with Parakou (438 km) and a paved road (320 km) stretching from Parakou to Malanville on the Niger border. Transport along this route is managed by the Organisation Commune Benin-Niger des Chemins de Fer et des Transports (OCBN), a financially autonomous agency established in 1959 by the governments of Benin and Niger. OCBN is also responsible for running two other railway lines: the Western Coastal Line (34 km) and the Eastern Coastal Line (107 km). These two lines carry mainly passenger traffic. Under Credit 215-DA, these two coastal lines were scheduled to be closed to traffic within one year after completion of rehabilitation of the highways paralleling the lines. The rehabilitation work has been completed, but the Association has agreed to the lines' remaining open since the rates cover marginal costs and no new investments are being made in the Western line. Since a clinker plant is being built at Onigbolo, the prospects for the future of the Eastern Line will improve. Therefore, the Association and the Government have agreed to waive the provision of section 4.14 of Credit 215-DA. iii. Benin is acting to maintain or improve the competitive advantage of the Benin route over alternative routes through Nigeria, Togo, Ghana and the Ivory Coast. The highway from Cotonou to Parakou is being upgraded under the Association's Second Highway Project and the handling of goods has improved at transfer points (port of Cotonou and Parakou). An extension of the port of Cotonou is envisaged in cooperation with the Association and other foreign sources of financing. iv. Between 1970 and 1975 about CFAF 9.0 billion (US$37 million) was invested in the transport sector. More than double that amount (CFAF 24.1 billion or US$98 million) is planned for investment during 1976-80. The highway sector has absorbed and will continue to absorb a major portion of transport investment. Highway investments averaged CFAF 1.3 billion (US$5 million) in the 1970-1975 period and amounted to CFAF 2.3 billion (US$9 million) in 1975. Expenditures for new roads are estimated to have - ii - been CFAF 5.5 billion (US$22 million) in 1976 alone, primarily due to con- struction by Nigeria of the first coastal link with Lagos and to IDA and USAID disbursements for Parakou-Malanville under the Second Highway Project. Road maintenance expenditures declined from CFAF 474 million in 1972 to an average of CFAF 403 million per year in the 1973-1975 period. In the 1970-76 period, 73% of Government expenditures for roads, including road maintenance, and 89% of road investments were financed from foreign sources (IDA 27%, Nigeria 26%, EDF 18%, USAID 16%, FAC 2%). v. The proposed project, as well as all previous highway projects in the People's Republic of Benin (formerly the Republic of Dahomey), has evolved from the Dahomey Land Transport Study of 1969 financed by UNDP with the Bank Group acting as executing agency. The study was carried out jointly by two Canadian consulting firms. It led to a highway maintenance and engineering project in 1970 (Credit 215-DA, US$3.5 million) and later to a major highway construction project including further technical assistance for highway maintenance (Credit 415-DA, US$11.8 million,