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, 1973, later increased to US$20.8 million to cover cost overruns) with parallel financing from USAID (US$12.0 million). vi. The only other lending operation by the Association involving the transport sector in Benin was the 1972 Zou-Borgou cotton development scheme (Credit 307-DA, US$6.1 million), including US$630,000 for improvement of about 620 km of agricultural feeder roads, only part of which were completed because of cost overruns on other items. A Feeder Road Project, approved by the Board on May 31, 1977, will maintain 1,270 km of feeder roads and set up the finan- cial and institutional framework needed to assure permanent up-keep of those and other feeder roads in the country. The Association is also processing a port extension project in cooperation with other aid agencies. vii. The proposed Third Highway Project consists of:

(a) rehabilitation of the Godomey-Bohicon-Abomey road (107 km) including detailed engineering and super- vision of construction;

(b) resurfacing of about 195 km of bituminous roads;

(c) resurfacing of about 273 km of laterite roads;

(d) (i) strengthening of the ongoing routine maintenance program through purchase of small amounts of addi- tional equipment and some spare parts to increase the stock at STI in Cotonou and to improve the utilization rate of existing equipment, and (ii) providing materials for construction of office space for DSP; - iii -

(e) technical assistance and fellowships to the Directorate of Roads and Bridges in the Ministry of Equipment for the preparation of the maintenance elements of the proposed and future projects and for further strengthening of road maintenance planning and staff training;

(f) technical assistance and fellowships to the Directorate of Studies and Planning in the Ministry of Transport to enable it to strengthen its organization and to widen the scope of its activities; and

(g) preinvestment study of the Ouidah-Allada road (40 km). viii. The Godomey-Bohicon road is a part of the main north-south artery originally constructed between 11 and 16 years ago with FAC financing. It carries from 500 to 1,200 vpd. The road is now badly deteriorated. The resurfacing would contribute to eliminating a substantial maintenance backlog. Bituminous and laterite roads selected for resurfacing have been in service for six or more years and have had neither a new surface treatment nor a new layer of laterite. Patching and repair of shoulders and drainage structures of bituminous roads will be done by force account with the help of a new patching unit. Two resurfacing brigades will be reactivated to carry out the works on the approximately 273 km of laterite roads to be resurfaced. Rehabi- litated and some new equipment will be used.

ix. The total cost of the project (net of taxes and duties but includ- ing contingencies) is estimated at about US$21.3 million equivalent, with foreign costs of about US$17.0 million (80%). IDA and the Government are financing items (b) through (g). The total cost of these items is US$11.0 million, of which IDA will provide US$10.0 million and the Government US$1.0 million. The Kuwait Fund, the OPEC Fund and the Government are financing item (a). The total cost of this item is US$10.3 million, of which the Kuwait Fund will provide US$7.0 million, the OPEC Fund US$1.6 million, and the Government US$1.7 million. x. Contractors, selected on the basis of international competitive bidding and in accordance with Bank Group guidelines, will resurface the bituminous roads. Construction works for DSP office in Cotonou (under US$50,000) and materials for the regraveling brigades will be awarded follow- ing local advertising and competitive bidding in accordance with procurement procedures of the Government satisfactory to the Association. Most equipment and spare parts for brigades and workshops will be procured on the basis of international competitive bidding. Items costing under US$10,000 may be procured on the basis of quotations obtained locally; the total amount of such purchases should not exceed US$200,000. xi. The economic rate of return of the rehabilitation of the Godomey- Bohicon-Abomey road is about 35%. The economic return of the resurfacing - iv - of bituminous roads is 155% with a benefit/costratio of 7.3 at a 12% dis- count rate. Resurfacing of laterite roads would yield a rate of return of about 54% and a benefit/costratio of 2.1. The overall rate of return on the project will be about 75%. xii. The proposed project is suitable for a Credit to the People's Republic of Benin in the amount of US$10.0 million on standard IDA terms. PEOPLE'S REPUBLIC OF BENIN

APPRAISAL OF A THIR) HIGHWAY PROJECT

1. INTRODUCTION

1.01 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, Lamarre Valois International Ltd. and N.D. Lea and Associates. It led to a highway maintenance and engineering project in 1970 (Credit 215-DA, US$3.5 million) and later to a major highway construc- tion project including further technical assistance for highway maintenance (Credit 415-DA, US$11.8 million, 1973, later increased to US$20.8 million to cover cost overruns) with parallel financing from USAID (US$12.0 million). The highway maintenance elements of these projects concentrated on maintenance of laterite roads and building the institutions necessary to execute such maintenance efficiently. The other element was engineering and construction of the Parakou-Malanville road, linking the railhead of the Cotonou-Parakou railway with Niger, and two small sections of the Godomey-Bohicon road. The First Highway Project was successfully completed in December 1975. The Project Completion Report was issued June 3, 1976.

1.02 Implementation of the construction work under the Second Highway Project has been generally satisfactory although a supplementary credit of US$9.0 million was required to meet cost overruns due to higher than expected inflation. The institution building elements of the project have also been generally successful. However, since 1974 budgetary problems have plagued the maintenance element of the project. Equipment repairs have often not been made because of lack of spare parts, and equipment in operating order has often been under-utilized because of lack of fuel. Government outlays for maintenance decreased, in spite of rapidly rising costs, because of growing commitments for new construction. The Government has, at times, even had trouble meeting the Directorate of Roads and Bridges (DRB) payroll.

1.03 The only other IDA operations in the transport sector were the 1972 Zou-Borgou cotton development scheme (Credit 307-DA, US$6.1 million), which included US$630,000 for improvement of 620 km of agricultural feeder roads and a feeder roads project approved by the Board on May 31, 1977. Under the latter, the Government intends to maintain 1,270 km of feeder roads and to set up the financial and institutional framework needed to assure permanent upkeep of those and other feeder roads in the country. A port project to expand the capacity of the port of Cotonou is being prepared in cooperation with other co-financers (FAC, CIDA, BADEA, NORAD, African Development Bank, etc.).

1.04 The total cost of the proposed project is about US$21.3 million, net of taxes, with a foreign exchange cost of about US$17.0 million. The proposed Credit provides US$10.0 million or 47% of the total project cost. The remainder is to be financed by the Kuwait Development Fund (KDF) and the OPEC Special Fund (40%) and the Government (13%). - 2 -

1.05 This report is based on preparatory work by consultants Lamarre Valois International Ltd. and the Government, and on the findings of appraisal and follow-up missions by Adhemar Byl (economist) and Steven Majtenyi (engineer). The missions visited Benin in July and December 1976. Pierre Sooh (engineer) assisted in the preparation of this report.

2. THE TRANSPORT SECTOR

A. Economic Setting

2.01 Benin is a long, narrow country (112,600 km ) on the West Coast of Africa between Togo to the west and Nigeria to the east. On the north it is bordered by Upper Volta and Niger, two landlocked countries. Benin's road and rail network provides the major transit route to the sea for Niger.

2.02 The population, about 3.1 million, is growing at about 2.8% per year. Th average population density is high by 2 African standards (about 25 per km ), especially in the south (120 per km ), where the road and rail networks are correspondingly densest.

2.03 Benin, with a per capita GDP of about US$130, is classified by the United Nations as one of the world's poorest countries. While about 70% of the labor force is employed in agricultural activities, the rural sector's share of GNP is only about one-third of the total. As a result, the income of the rural population (US$60 per capita) is considerably below the national aver- age. The urban population, with 20% of the labor force, accounted for about 60% of GNP in 1973 and traditionally has been the main beneficiary of public spending. However, the Government, in an effort to balance the distribution of its expenditures, has begun to place greater emphasis on agriculture and rural development, including feeder roads.

2.04 Benin's economy depends predominantly on agriculture (cotton, cocoa, palm oil, karite butter, groundnuts and coffee) and on exceptionally large transport and trade sectors, because of the subtantial transit trade with Niger and Nigeria, for which Benin acts as intermediary and as supplier of warehousing services. Although some further growth in port, warehouse and transport services for Nigeria is likely, the Government expects that the major contributors to renewed economic growth will be increased agricultural production and processing, further import substitution and new industries exploiting domestic raw materials such as clinker.

2.05 The last development plan in Benin, which was called the "interim plan," covered the period 1971-72. Since the "Revolutionary Military Govern- ment" took office in 1972, a considerable amount of reorganization has taken place. The Government is preparing a new development plan but so far no data have been released. The last economic mission of the Bank Group published its report (191a-DA) on August 20, 1973, and consequently there is a lack of economic information on which to base reliable forecasts. An economic mission was scheduled to visit Benin in mid-1977. -3-

B. The Transport System

2.06 The transport system of Benin is simple, but fairly well developed, and centered around Cotonou, where the only seaport and the only international airport are located. The backbone of the system is the Benin route, which consists of a railway linking the deep-water port of Cotonou with Parakou, 438 km to the north, and a 320 km paved road, recently reconstructed to two- lane standard, which links Parakou to Malanville on the Niger border. The rest of Benin's transport network radiates from this main axis. The coastal road linking Cotonou with Lome (Togo) and with Lagos (Nigeria) is the other major paved road in the country. This coastal road runs parallel to the railway lines from Cotonou to Segboroue (the Western Line, 34 km) and from Cotonou via Porto Novo, the official capital and administrative center 1/, to Pobe (the Eastern Line, 107 km, 30 km of which lie along the coast, the remainder running toward the northeast).

(a) Highways

2.07 The highway network is briefly described below as part of the Benin Route and in Chapter 3.

(b) The Benin Route and Other Railway Lines

2.08 OCBN (Organisation Commune Benin-Niger des Chemins de Fer et des Transports) is a financially autonomous agency, established in 1959 jointly by the Governments of Niger and Benin to manage transport on the Benin Route and on the other railway lines in the country. Its activities consist of operating the Cotonou-Parakou Central Railway Line and the char- tering of trucking services between Parakou and Niger. OCBN is not only a railroad company, but also the major freight charterer in northern Benin, with a monopoly for Niger transit traffic. 2/ It is thus the de facto coordinator of transport. OCBN also operates the Cotonou-Segboroue and Cotonou-Pobe railway lines, which carry mainly passengers and little freight (para. 2.13). It is the largest employer in the country after the Government. Total railway freight traffic is estimated at about 80 million ton-km.

2.09 According to section 4.14 of Credit 215-DA, the two coastal lines were scheduled to be closed to all traffic within one year following the

1/ Cotonou, the major commercial center, is slowly becoming the de facto capital. The presidential palace and many Government departments are already located there. 2/ General cargo is presently apportioned out two-thirds to truckers from Niger and one-third to truckers from Benin (the latter, until recently, were almost all private). Fuel oil products are all carried by truckers from Niger. -4- completion of rehabilitation of the highways paralleling these lines, except for traffic necessary for the operation of the palm-oil processing plant at Ahozon (4 km beyond the Pahcu branch off), and unless the Government and the Asssociation agreed that a substantial increase in traffic on the Cotonou-Pobe line dictated otherwise.

2.10 Rehabilitation of the highways has been completed, but at the end of 1973 the Association agreed to postpone closure of the Western Coastal Line until January 1, 1976 on condition that no capital expenditures be made on that line and the rates be adjusted to eliminate deficits in its operation. Although the Government, for social reasons, has continued limited service on this line beyond January 1, 1976, it is not investing in it and the rates cover marginal cost.

2.11 The Government intends to extend the Eastern Line to a planned clinker plant in Onigbolo (20 km). The plant will be operated by a multina- tional (Benin-Nigeria) company, the creation of which has been officially announced. The extension of the railway line will permit the transport of clinker to a cement plant in Cotonou and to the port for export. Since the clinker plant is being built, OCBN has been allowed to continue operations on the Eastern Line. OCBN is following a prudent investment policy, its management has improved and the organization is at least covering the marginal costs of its operations. To reflect this new situation the Government and the Association have agreed to waive the provision of Section 4.14 of Credit 215-DA requiring the closure of the western and eastern railway lines.

2.12 According to a recent Regional Transportation Study in countries belonging to the "Conseil de l'Entente" and in Ghana 1/, the present freight rates on the Benin route are still competitive with an alternative route through Togo. This competitive edge is expected to remain intact even after the axis through Togo has been completely paved (expected in early 1980's) and after taxes now levied at the Upper Volta border (3% transit tax and 0.5% fonds de garantie tax, both ad valorem) have been abolished.

2.13 To avoid competition with the railway, until recently the Benin Government discouraged the construction of the Bohicon-Parakou road beyond laterite standards and only allowed passenger cars and light trucks to use the two railroad bridges which are sole means of crossing the Zou and Oueme rivers. (Under special circumstances heavier vehicles were allowed to use the bridges after payment of high levies to cover the cost of a protective deck laid down every time they crossed). This kept non-rail traffic to a minimum on the lower portion of the Benin route. Recently, however, the Government decided to alter the railroad bridges to enable them to carry road traffic without special precautions. Also, at the Government's request, the

1/ F.R. Laberge and Associates, Consultants, Montreal, 2 volumes, final report, June 1976. European Development Fund (EDF) agreed to finance the paving of the first section (Bohicon-Dassa Zoume) of the unpaved road link between Bohicon and Parakou. The agreement with EDF also includes feasibility and final engineer- ing studies of the Dassa Zoume-Parakou section; it is likely that that section will be constructed under the Fifth EDF, i.e. in the early 1980s. This will then complete a bituminous road parallel to the OCBN railroad over its entire length. The terms of reference of the technical assistance to DSP will include the study of the consequences of this new situation (para 4.13).

(c) The Seaport of Cotonou and Maritime Shipping

2.14 The deepwater port of Cotonou has an annual capacity of about 500,000 tons of general cargo and almost as much bulk cargo (petroleum, vegetable oil and clinker). The port is managed by an autonomous port authority; cargo handling is entrusted to another autonomous Government-owned agency, the Office Beninois des Manutentions Portuaires (OBEMAP). Port management needs improvement and tariffs need to be reviewed to allow the Port Authority and OBEMAP to take part in the investment effort needed for the port.

2.15 Since the construction of the port in 1965, traffic has increased at an average rate of 8.3% per annum, from 369,000 tons in 1966 to more than 755,000 tons in 1975 (of which more than 85% was imports). Imports of fuel and clinker alone account for more than half. of all port traffic. In the first six months of 1976 traffic reached about 960,000 tons, or about the port's estimated capacity. About 50% of this traffic is for Niger and Nigeria. The Government anticipates being able to continue handling Nigerian transit traffic, and discussions to this effect are being held in the framework of the proposed First Port Project.

(d) Air Transport

2.16 The international airport of Cotonou is used by the major air carriers operating in the region. Total passenger traffic has been between 70,000 and 80,000 per year since 1972. Freight traffic is less than 3,500 tons per year. Aviation fuel consumption decreased from 8,000 cubic meters in 1970 to 4,000 cubic meters in 1975 (Table 1).

2.17 Benin has five small secondary airfields but, given the size of the country, domestic air transport is not very important. A US$35 million project to relocate the Cotonou airport and to modernize the airport at Parakou, the most important of the secondary airfields, is envisaged by the Government, but considering its high cost and the lack of financing it is not likely to materialize in the near future.

2.18 Benin is a shareholder in Air Afrique and UTA and has a few small military airplanes, some of which can be chartered by the public. There are also four DC3 flights per week by Air Benin between Parakou and Cotonou with possibility of charter to other destinations. - 6 -

C. Transport Administration and Coordination

2.19 While the Dahomey Land Transport Study of 1969 was being prepared a new Ministry of Transport, Post and Telecommunications was given responsi- bility for transport policy, regulation and planning. The Study advised the Government to keep transport planning within the Directorate of Transport and to entrust this task to one competent advisor at the highest level in the Department. However, the Government created the Directorate of Land Transport (DLT), which has, however, never functioned as a high-level body because of lack of qualified personnel and adequate funds and because of limitations imposed on it. Under the First Highway Project, the Association agreed to finance the hiring of an expert for 22 months to help set up the DLT. The expert was hired but terminated after about 16 months in September 1972 because the agency was unable to take advantage of the consultant's expertise. This assistance was reintroduced in the Second Highway Project (Credit 415-DA) but assigned to the then Ministry of Public Works and Transport's Directorate of Roads and Bridges, because the same problems persisted in DLT and addi- tional assistance was needed in DRB.

2.20 The Government has advised the Association that it would like to give more attention to the Directorate of Studies and Planning (DSP) in the newly re-organized (1976) Ministry of Transport rather than to DLT. The Government has agreed that DSP's task will be to organize and centralize the collection of transport data and analyze transport problems, investment plans, and prospects of all elements of the transport system. The unit could be the basis for coordinating the various transport modes, setting tariff policies, centralizing data collection, reviewing planned investments, and developing transit traffic. The project includes technical assistance for this purpose (para 4.12).

D. Transport Investment and Financing

2.21 Data on transport investment and financing are hard to obtain because of the lack of a central, transport planning and data collection unit. The available data are summarized in Table 2. They indicate that between 1970 and 1975 about CFAF 9.0 billion (US$37 million) 1/ was invested in the transport sector, excluding railway investments (mainly rolling stock) because the data on this subsector were not reported. For the period 1976- 1980 roughly two and a half times as much (CFAF 24.1 billion or US$98 million) is planned, including CFAF 2.9 billion for railways but excluding probably small amounts of airport investments. The highway sector has absorbed and will continue to absorb a major portion of transport investments (para. 3.25).

1/ The bulk of the disbursements under the Association's Second Highway Project (US$20.8 million in total) occurred in 1976 and 1977. - 7 -

2.22 Investmentsin the port have come from the port authority,with contributionsfrom EDF and other loans. A port extension project has been appraised by the Associationacting on behalf of six potential co-financers. From 1976 to 1980, port investments (CFAF 9.9 billion) may rival road invest- ments (CFAF 11.2 billion) if the port project materializes. Lirport invest- ments have been and are expected to remain modest (para. 2.17).

3. HIGHWAY SUBSECTOR

A. The Road Network

3.01 Benin's 7,200 km road network (including300 km of urban roads) is about the same size as the network of neighboringTogo, a somewhat smaller country. About one-tenth of the network (759 km) consists of paved roads and one third (2,592km) are all-weatherlaterite roads; the remainder (3,849 km) consists of partly improved earth r2ads and tracks (Table 3). The network density is about 64 km per 1,000 km or 2.3 km per 1,000 inhabitants. The most traffickedroads connect Cotonou with Nigeria and Togo along the coast and with Niger to the north. About half of the network is classifiedas interstateroads (connectingwith neighboring countries)and about half national roads (serving principal towns within Benin).

3.02 Most interstateand national roads once were two traffic lanes wide, but some eroded in the 1960's to mere paths with the wide structures remaining in place at crossings.A six-year effort under two consecutive maintenanceprojects has not been sufficientto restore all the roads, due to heavy concentrationon improvementof the main bituminousnetwork and to severe setbacks of the maintenanceeffort after the energy crisis. As a result about one-third of the paved road network remains in unsatisfactory condition,marked by potholes, pavement cracks, ravelled edges and erosion of shoulders. Only about half of the laterite roads are well enough main- tained to permit all-weather travel. On the remaining laterite roads, as well as on the earth roads, reliable transportis possible only during the dry season.

3.03 Since 1974 the Governmenthas been carrying out a program of recon- struction and pavement strengtheningof the most deterioratedpaved roads. The Bank Group, EDF, the United States Agency for InternationalDevelopment (USAID), FAC and the Governmentof Nigeria were the principal sponsors of this road improvementprogram (para. 3.25). For the bettermentof laterite roads, the Government,with financing from the Associationunder the First and Second Highway Projects (para. 3.22), establishedresurfacing brigades, but this program remains to be completed and will be expanded to include bituminous roads under the proposed project.

3.04 Feeder roads have also received increasedattention. As a first step, two feeder road brigades were establishedunder the Zou-BorgouCotton Project (Credit 307-DA) for the improvementof 620 km of cotton feeder roads, -8-

of which 425 km were built. An ongoing Feeder Road Project provides for the constructionof the remaining cotton feeder roads and an additional set of other argiculturalfeeder roads up to a total of 1,270 km and for maintenance of these and the cotton feeder roads. The Government will maintain another 600 km with its own resources. It will focus on the creation of an efficient and sufficientlyendowed feeder road maintenance organizationand on efforts to employ labor intensive techniques where practicable.

B. Vehicle Fleet and Road Traffic

3.05 Statistics on the evolution of the vehicle fleet between 1971 and 1976 are not available. However, after the name of the country was changed from Dahomey to Benin at the end of 1975, all vehicles had to be issued new license plates. About 12,000 vehicles were registered or 4 per 1,000 inhabi- tants. Compared with 10,849 vehicles in 1970, this shows an average annual compound growth rate of 2%. Judging from the fuel consumption data analyzed below, the average growth rate may well hide a decline in 1973 and 1974 (Table 4). Based on 1970 figures, about 35% of the vehicle fleet should consist of trucks.

3.06 Data on fuel consumption (Table 1) show that consumptionby road vehicles increased by about 14% per year between 1970 and 1972, then declined in 1973 and 1974 and returned to 1972 consumptionlevels in 1975. Incomplete 1976 data indicate a substantialupswing over 1975.

3.07 The Directorate of Roads and Bridges (DRB) carried out limited traffic counts intermittentlyover the last seven years during implementa- tion of the highway maintenanceprogram. These data show that traffic volumes range from 5,800 vehicles per day (vpd) between Cotonou and Porto Novo (about 500-1,000vpd in the vicinity of other major cities) to between 50 and 150 vpd on the remainder of the interstate and national networks. About 70% of the total domestic freight volume, estimated at 1.5 million tons per year, is carried by road (150 million ton-km) of which about one- third is transit traffic for Niger and Nigeria. Consultantshave forecast a growth rate of 7.5% for the 1977-1979period on the main arteries, because they expected an increase in the vehicle fleet and return to normal economic conditions prevailing before 1973. A more conservativeestimate is used in this report. An annual traffic increase of about 4% to 5% is expected on the principal roads and a somewhat slower increase on the rest of the network (except on the coastal roads: Cotonou-Lagos10% per annum and Cotonou-Lome 6%) over the next seven years because the agriculturalsector may need a somewhat longer recovery time than other sectors.

3.08 Vehicle safety regulationsare adequate, and enforcementis reason- ably good, although the lack of trained personnel is still a problem. Respon- sibility for vehicle inspectionwas recently transferredfrom DLT to DRB. Maximum legal vehicle axle loads have been increased from 11.5 tons to 13.0 tons. The Government is starting to enforce these regulationson the Cotonou- Malanville axis, where two existing weighing stations were rehabilitatedunder - 9 - the ongoing highway project. The Government is planning to expand and strengthen the enforcement of these regulations.

C. Administration

3.09 The Ministry of Equipment (ME) through the Directorate of Roads and Bridges (DRB) is responsible for the administration of the highway sub- sector. The technical work is carried out by DRB's Studies and New Works Service (SNWS), its Highway Maintenance Coordination Service (HMCS), and a central workshop, Service des Techniques Industrielles (STI). At the regional level DRB is represented by three district offices and ten subdivisions, three or four in each district. Subdivisions are further subdivided into two or three sectors. Specialized units for feeder road construction and main- tenance and for regraveling of laterite roads are attached to two of the districts (Exhibit I). An additional district office is now being planned in Natitingou in the North. The present organization appears adequate.

3.10 The SNWS supervises new construction works through temporary offices attached to the subdivisions for minor works and through the use of foreign consultants for major ones. It is also responsible for reviewing all engineer- ing studies and occasionally executes minor engineering design work and field surveying (para 3.17). The HMCS plans and supervises the highway maintenance program.

3.11 STI's operations are of two kinds: (i) management and maintenance of the highway maintenance equipment fleet, and (ii) vehicle repair for Gov- ernmental agencies and industry. The volume of non-government work is relatively small (10%) and separately accounted for. STI has an autonomous accounting system. The Minister of Equipment reviews STI's budget and ac- counts, and the Minister of Finance approves. These auditing and control procedures appear adequate.

3.12 The Centre National d'Essais et de Recherches des Travaux Publics (CNERTP), under the supervision of the Minister of Equipment, is in charge of executing soil and materials testing for roads. The Minister of Equipment also reviews CNERTP's budget and accounts. Otherwise CNERTP operates as a state-owned firm performing laboratory and field tests for civil works for the Government and private enterprises.

D. Staffing and Training

3.13 DRB has 12 university-level local engineers in upper and mid-level administrative positions. Four of them are assigned to district offices. Other mid-level administrative positions are filled with 16 engineering tech- nicians (trained at the Polytechnical College of Bamako, Mali). The office support staff consists of about 82 persons, 50 of whom are assigned to field offices. The labor force assigned to maintenance operations amounts to 400 skilled and 900 unskilled workers. The number of engineers in DRB is still insufficient to meet normal operational requirements. Therefore, DRB will have to continue relying on foreign technical assistance to execute thle proposed project. STI and CNERTP are adequately staffed and equipped. - 10 -

3.14 The director of DRB and all division chiefs are university educated engineers. The director of CNERTP was trained by the French Centre d'Expe- rimentation du Batiment et des Travaux Publics (CEBTP). The director of STI was trained in Belgium in mechanical engineering,and has acquired prac- tical and managerial experience through on-the-job training by consultants during the implementationof the Second Highway Project. FAC has supplied training to DRB's STI in the past and such training will continue to be provided under this project. Field engineers and techniciansalso need more training as many of them take their positions immediatelyafter leaving school. In order to assure the efficient functioningof field maintenance operations, foremen, drivers, mechanics and equipment operators also need additional training; however, a core is already developed that has proven capabilities.

3.15 Some training of lower and middle level personnel for highway maintenance operations has been provided by consultantsunder the technical assistance program of the First and Second Highway Projects. Additional on-the-job training will be provided by consultantsunder the proposed project, and this task has received special emphasis in the consultants' agreed terms of reference (para. 4.10). Part of the more formal training needs will be satisfied by more frequent use of the regional training center, Centre Regional de Formation en Entretien Routier (CERFER) in Lome, Togo, and by three local training centers. About 20 specialized techniciansare study- ing or have recently completed training at CERFER. The Centre de Formation de Genie Rurale (CFGR) and the Lycee Technique of Cotonou prepare about 20 road techniciansper year who usually enter the administrationat the supervisory level. The College PolytechniqueUniversitaire du Benin (CPUB) opened in November 1976 in Cotonou with about 50 students in its three-year program of "techniciensuperieur en Genie Civil." Several of them may apply to the civil service when their program is completed. Government officials also expect to be able to attract about 10 engineers and engineering techniciansevery year as they return from their studies abroad.

E. The Road Transport Industry

3.16 The road transport industry in Benin has consisted of about 350 small operators with less than four trucks on the average, organized since 1960 in the Syndicat des TransporteursRoutiers. Many truckers work most of the year on contract to OCBN for transit traffic between Parakou and Niger. To handle the growing transit traffic to Nigeria, plans are being finalized for the creation of a national transport company, TRANSBENIN,with state and private participationand credit from the Compagnie Francaise d'Assurance du Commerce Exterieur (COFACE)for the purchase of 180 trucks. Recently the Government also approved CFAF 360 million and 330 million respectively(about US$3.0 million) for the creation of local and provincial transport companies to handle national traffic. Some of the provincial companies (Maritimeand Borgou) are taking over equipment from larger private expatriate transporters - 11 - who have left the country. As in other cases of nationalizationin Benin, compensationhas been assured. The creation of new companies, if not co- ordinatedand properly planned, may lead to over-capacityin the trucking industry. The Government has agreed that DSP will study the supply and demand situation in the road transport industry.

F. Engineeringand Procurement

3.17 Major design works and supervisionof constructionare performed by foreign consultantsunder supervisionof DRB's SNWS. There are no domes- tic consultantsyet, but the Government intends to create a General Studies Service in the Ministry of Equipment,which could become the nucleus of a small state consulting firm. Design standards,derived from French practice and adapted to local conditions,are usually used on new roads. The pavement width is generally 6 meters with a platform width of 9 meters for interstate and 8 meters for national paved roads and 7 meters for all laterite roads. Feeder roads are constructedwith a 4 meter surface width and a 6 meter platform.

3.18 Contracts for major highway projects are awarded on the basis of competitivebidding. SNWS is in charge of calling and evaluatingbids, which is usually done with the assistanceof consultants. A representa- tive of the President of the Republic must by law participate in evaluation of bids. Bid openings are public. Signature of contracts is the respon- sibility of the Minister of Equipment and a countersignatureof the Minister of Finance is required if a foreign credit is to be used for financing.

G. The Road Construction Industry

3.19 Turnover in the country's constructionindustry, including building and civil works, is estimatedat about CFAF 6.5 billion (US$27 million) in 1976. Road constructionaccounted for 90% of total turnover and building con- structionaccounted for the remaining 10%. Turnover was exceptionallyhigh in 1976. During the period 1971 the annual average was about CFAF 2 billion (US$8 million). The large increase in the volume of works in 1976 was mainly due to the contructionof a coastal road linking Cotonou with Lagos in Nigeria and rehabilitationof the Parakou-Malanvilleroad.

3.20 All major civil works have been executed by foreign contractors (about 95% of annual turnover). Domestic contractorshave only very limited capacityand are engaged primarily in the housing sector. A Government commissionis studying their status with the intentionof recommendingfor- mation of an associationof all domestic and possibly even the major foreign contractors. There are three locally registered foreign firms, all French: Grands Travaux de l'Est (GTE), les Entreprisesdu Benin of the group Societe Francaise d'Entreprisede Dragages et de Travaux Publics, and Colas.

3.21 The Government is concerned about the slow developmentand foreign domination of the civil works industry. Therefore in June 1976 it established - 12 - a state-ownedconstruction company, Societe Nationale de Constructionet des Travaux Publics (SONACOTRAP),which in its first year of operation had a turnover of CFAF 83 million (US$340,000),the major part of it in building construction. SONACOTRAPcannot at the moment execute large civil works contracts; the company needs adequate equipment and experiencedpersonnel, including skilled workmen, foremen, field engineersand business managers. The Government is preparing to make a major purchase of highway construction equipmentfor the company and is investigatingparticipation by a French firm. SONACOTRAPwill, alone or in joint venture, participate in competitivebidd- ing for the resurfacingof some sections of the 195 km of bituminousroads financed under the proposed project and will be granted IDA's 7.5% margin of preferenceto eligible domestic contractorsbidding for civil works.

H. Maintenance

3.22 Routine and periodic maintenanceof the highway network is carried out mainly by DRB's subdivisionsand sectors; about 2,000 km of feeder roads and tracks and some 300 km of urban roads are the responsibilityof the Ministry of the Interior and local authorities. The latter have recently started a campaign for voluntary efforts in the cities and in the country. DRB's execution has improved considerably,qualitatively and quantitatively, since implementationof the four-yearmaintenance program under the First Highway Project, followed up by a two-year extended technical assistance program under the Second Highway Project. Under the first project,which started in 1971, DRB was organizedand a central maintenancedivision was created. Regular routine maintenanceinterventions were made over more than 80% of the network allocated to DRB as of 1973. Maintenanceprogramming and budgeting techniqueswere introduced,and Governmentpersonnel received training in equipmentmaintenance. In addition the STI workshop facility in Cotonou was enlarged and properly equipped,existing highway maintenance equipmentwas repaired and new equipment purchased. Under the Second Highway Project, improvementsmade under the precedingprogram have been carried further, with emphasis on the planning of routine and periodic maintenanceof laterite roads and proper servicingof the highwaymaintenance equipment. However, in addition to expandingthe program to bituminousroads, technical (para. 4.07) as well as financialimprovements (paras 3.26 and 3.27) in the ongoing operationsare necessary.

3.23 The First and Second Highway projects concentratedin building up DRB capacity in maintenanceof laterite and earth roads (90% of the network), and the rehabilitationof major roads of the network. Periodic maintenanceof bituminousroads was let to contractors,and routinemaintenance was limited to filling of potholes. This projectwill expand DRB maintenancecapacity to bituminousroads. For the periodic maintenanceof laterite roads four re- surfacingbrigades were establishedunder the First Project. Due to insuf- ficient funds and equipmentbreakdowns, management problems and lack of trained personnel,the initial four brigades were consolidatedin two in 1975 under the Second Project. Further cutbacks in funds reduced the number of - 13 - operating brigades to one in 1976. This brigade completed the Pobe-Ketou road and has moved to the Djougou-Assaraderoad. However, this brigade is still inadequatelyequipped in spite of a special budget allocation of CFAF 32 million (US$131,000)in 1976 for equipment rehabilitation(para. 4.07). A total of 680 km of laterite roads were resurfaced by the brigades and some repairs on bridges and structureswere performed.

I. Financing

3.24 Expendituresfor roads in Benin tripled between 1970, whyp they were CFAF 0.9 billion (US$3.7million), and 1975, when they amounted to about CFAF 2.7 billion (US$11 million). They are estimated to have more than doubled again to CFAF 5.9 billion (US$24 million) in 1976, primarily due to constructionby Nigeria of the first coastal link with Lagos (Seme-Gbadagri, CFAF 2.3 billion) and IDA and USAID disbursementsfor Parakou-Malanville under the Second Highway Project. Road maintenanceexpenditures alone, on the other hand, appear to have declined from a maximum of CFAF 474 million in 1972 to an average of CFAF 403 million per year in 1973-1975,a period, when road maintenancecosts rose considerablydue to worldwide inflation (Table 5).

3.25 In the 1970-76 period, 73% of Government expendituresfor roads, includingroad maintenance,and 89% of road investmentswere financed from foreign sources (IDA 27%, Nigeria 26%, EDF 18%, USAID 16%, FAC 2%). Recur- rent maintenanceexpenditures for equipmenthave been financed from regular budget allocationsand from the Road Fund, which was reactived in 1970 to supplement the regular budget and supplied with funds from an earmarked tax of CFAF 4 per liter on sales of diesel oil and gasoline. Road Fund revenues were all used for road maintenance. They accounted for about 62% of all maintenance expendituresfinanced by the Government over the period.

3.26 In accordancewith the conditionsof the Association'sFirst High- way Project, the Government undertook to provide increasedamounts of main- tenance funds in the period 1970-73. During appraisal of the Second Highway Project a road maintenancefinancing plan for the period 1973-1976based on requirementsassessed by consultantsassisting DRB was discussed,and a gradual increase over the 1972 amounts was agreed upon. However, as shown in the table below, circumstancessince the end of 1973 have been such that actual budget allocationsare still considerablybelow what is necessary for adequate maintenance,and local funds are increasinglyused for road invest- ments. This trend may well continue through 1979 because of Government commitmentsof about CFAF 600 million (US$2.5million) per year for a new bridge in Cotonou and smaller amounts for other bridge and highway projects. - 14 -

1970 1971 1972 1973 1974 1975 ------(in millions of CFAF)------(at current prices) Expendituresfor Roads Financed from Local Sources 343 588 660 561 674 713

Road Maintenance Expenditures 288 401 474 402 401 404 Investment Expenditures 55 187 186 159 273 309

3.27 The expendituresfor road maintenanceby DRB reached a maximum of CFAF 474 million in 1972 or almost CFAF 100,000 (US$400)per km of major road. The Government would be justified in spending CFAF 1.3 billion on routine and periodic maintenanceof its road network (US$2,000per km of paved roads, US$1,000 per km of laterite road, and US$300 per km of earth road), of which CFAF 400 million of foreign financingwould be provided from ongoing mainten- ance projects. This target, however, can most probably not be reached before 1980 because of Government commitments to other investment projects and Benin's poor economic condition. The Government has thereforeagreed with the Association on an annual budget allocation for highway maintenance increasing from CFAF 750 million in 1978 to CFAF 900 million in 1980 as indicated in the table below. This will provide sufficient funds for routine and periodic maintenance.

1976 1977 1978 1979 1980 - ----(in millions of CFAF)---- (at constant 1976 prices)

Road Maintenance Expenditures 427 600 750 830 900

Network Maintained by DRB 417 580 718 788 850 Network Maintained by Ministry of Interior and Local Authorities 10 20 32 42 50

3.28 This target could be attained either by a significant increase in budgetary contributionsto maintenance or by an increase in fuel taxes or road user taxes which would then be earmarked for the Road Fund. Revenues from road user taxes, until 1973, more than covered all expendituresfor roads includinginvestment expendituresfinanced from abroad. This was no longer the case in 1974 and 1975. In 1975 revenues from road users amounted to 82% of expenditures(Tables 5 and 6). In 1976 coverage must have decreased further to about 50%. The options availablewhen only fuel taxes are con- sidered range from the current CFAF 4 per liter, which would still require ordinary budget contributionsto maintenanceof between approximatelyCFAF 400 million in 1977 and CFAF 650 million in 1980, to CFAF 13 per liter, which might eliminate contributionsby the general budget altogether,assuming a 4% per year increase in traffic (para. 3.07) and an identical collec-tionratio (62.5%). This may, however, be impossible because it might bring fuel prices out of line with those in neighbouringcountries. Other road user charges such as taxes on vehicle purchase may thereforehave to be considered. The Government has agreed to consider these options and any other means available to implement the above financing schedule. - 15 -

4. THE PROJECT

A. Description

4.01 The proposed project consists of:

(a) rehabilitationof the Godomey-Bohicon-Abomeyroad (107 km), includingdetailed engineeringand super- vision of construction;

(b) executionof a program to eliminate backlog main- tenance by resurfacingabout 195 km of heavily trafficked bituminousroads;

(c) execution of a program to eliminate the backlog of periodic maintenance of laterite roads by resurfacing about 273 km of interstate and national roads;

(d) (i) strengtheningof the ongoing routine maintenance program throughpurchase of small amounts of addi- tional equipmentand some spare parts to increase the stock at STI in Cotonou and to improve the utilizationrate of existing equipment;and (ii) providing materials for constructionof office space for DSP;

(e) technicalassistance and fellowshipsto the Direc- torate of Roads and Bridges in the Ministry of Equipment for the preparationof the maintenance elements of the proposed and future projects and for further strengtheningof DRB's road maintenance planning and staff training;

(f) technicalassistance and fellowshipsto the Direc- torate of Studies and Planning in the Ministry of Transport for improvementthe Ministry's organization and widening of the scope of its activities;and

(g) preinvestmentstudy of the Ouidah-Alladaroad (40 km).

(a) Rehabilitationof the Godomey-Bohicon-AbomeyRoad

4.02 This road forms up to Bohicon part of the country'smain north- south artery connecting the capital Cotonou with the central and northern regions of the country. Abomey, 5 km to the west of Bohicon, is a historic city and one of the country'smajor population centers. The existing road is a two-lane paved road that was built to marginal standards 11 to 16 years ago. It now carries traffic volumes ranging from 500 to 1,200 vpd and is - 16 -

badly deteriorated. As a result of the marginal standards and lack of adequate maintenance,cracks are showing in the uneven road surface and poor drainage of the roadbed has led to rutting on the sides of the pavement and reduction of the pavement width. A section of 6 km between Godomey and Abomey Calavi and a section of 11 km between Sehoue and Zakpo have already been reconstructedand repaved under the Second Highway Project.

4.03 The proposed project item includes the constructionof a new base course on about 57 km of the road, improvementof the drainage structures,a double surface treatment, regravelingof shoulders for the whole 107 km and detailed engineeringof the road (21 man-months)and supervision of construc- tion (56 man-months). DRB will be assisted by consultants in supervisingthe rehabilitationworks. Design standardscan be found in Table 7.

(b) Elimination of Maintenance Backlog on Bituminous Roads

4.04 As the country does not have bituminous road maintenance capability, the paved road system has deterioratedat a rapid rate. Several paved roads have had to be reconstructed,and the remainder of the network needs to be taken care of urgently, or it, too, will have to be reconstructed. The pro- posed project provides for the eliminationof a maintenance backlog on 195 km of paved roads during 1978, 1979 and 1980. The work consists of clearing and rehabilitatingthe shoulders, ditches and drainage structures,patching the road surface, and placing 135 km of single and 60 km of double surface treatment. In 1980 or later, another 100 km of resurfacingwill have to be executed. Then there will be a period of rest before the approximately450 km being reconstructedunder the Second and this Highway Project will need a new surface dressing. The selected roads (Table 8) have been in service for six or more years and have never had a new surface dressing.

4.05 Labor intensivemethods will be used for clearing the vegetation and rehabilitatingshoulders, ditches and drainage structures. These and a small amount of equipment will be provided by DRB from the stock of the subdivisions. A new unit will patch the roads. The equipmentof this unit will also be provided by DRB from the existing equipment fleet and will consist of a specially adapted 7-ton truck for materials, tools and personnel and a small water tank trailer. The project will provide small tools, materials (gravel, emulsified asphalt), fuel, spares and salaries for personnel. The period of intensive patching activity during the execution of this project will be used to train the nucleus of workers for patching units to be establishedin all three districts. The patching units will thus become part of the normal DRB maintenance organization. After completion of these preparatoryworks, the single and double surface treatmentswill be applied by contractors.

(c) Resurfacing of Laterite Roads

4.06 Under the two previous projects almost one quarter of the laterite roads have been resurfaced (680 km). Under this project, two brigades will be reactivated (para. 3.22) to resurfacea further 273 km of interstate and - 17 - national laterite roads, which have not been resurfacedwith laterite for the last 10 years. The selected roads can be found in Table 9. Changes in the selected roads will be subject to the Association'sapproval. The ideal solution would be to re-establishthree brigades, one in each district. They could resurface the 2,592 km of laterite roads every 7 to 8 years, as every brigade can handle about 100 to 125 km per year. This ideal solution can only be achieved in stages. The proposed project will revive one brigade in Parakou and supply additional equipment to the second, now operating in the Bohicon district, and keep both operationalfor two years. A laterite layer of an average thicknessof about 12 cm will be placed over a width of 6 m for the selected roads.

(d) Equipmentand Materials

4.07 The proposed project continues efforts begun under the First and Second Highway Projects to strengthen routine road maintenance (Paras. 3.21 and 3.22). The use of equipmentprocured under these projects was signifi- cantly curtailedby the lack of spare parts at repair facilities. The exist- ing stock of spare parts is only 3% of the replacementvalue of the equipment fleet, and this is not enough to run an efficientworkshop in a country with few local supply facilities. A large part of the equipment necessary for road maintenance (routineand periodic) is already available in the country but needs rehabilitation. The spare parts necessary for this rehabilitationare listed in Table 10, part A. The spare parts stock of the STI in Cotonou will be increasedto 12% of the replacementvalue of the equipment (Table 10, Part B). There is also still need for some essential pieces of equipment to com- plement existing equipment. This new equipment is listed in Table 11.

4.08 The project also provides materials for constructionof an office and for the purchase of some office furniture and equipment for DSP.

(e) Technical Assistance Program and Fellowshipsto DRB

4.09 The proposed project continuesefforts begun under the First and Second Highway Projects to strengthen the management capability of DRB and consolidatethe improvementsrealized under these two previous projects. The proposed project thus provides for about 55 man-months of consultingservices to assist DRB in dealing with management,budget and procurment problems. The project also provides a few short-termfellowships for the training of DRB personnel.

4.10 Highly qualified specialists (two highway engineersand a mechanical expert) will assist DRB. The experts' terms of referencehave been agreed upon and emphasize the following:

(i) execution and monitoringof resurfacingof laterite,and bituminous roads;

(ii) monitoringof repair shops, strengtheningSTI's stock accounting system, and execution of maintenanceof equipment; - 18 -

(iii) on-the-job training of key DRB and STI personnel (Annex I);

(iv) preparationof a future maintenanceproject; and

(v) preparationof a comprehensivepermanent program for staff training,personnel developmentand management.

(f) TechnicalAssistance and Fellowships to DSP

4.11 The project provides for technical assistance (30 man-months) to the Directorate of Studies and Planning (DSP) in the Ministry of Transport for (i) strengtheningits organizationand widening its scope of activities to include collectionof data, coordinationof all modes of transport, and preparation of transport planning and policy, and (ii) for training of key personnel. The project also provides a few short-termfellowships for the training of DSP personnel.

4.12 To create the capacity for better transport administrationand coordination,the project provides for the services of highly qualified transport specialists (an economistand an engineer),up to a total of 30 man-months to help DSP with the following tasks:

(i) reviewing the current organizationand operations;

(ii) developinga data collectionsystem and analysis program for the transportationsector;

(iii) developing and implementinga training program for DSP personnel (Annex I); and

(iv) helping the Government to prepare the transport development program and to formulate transport policy.

The experts' terms of reference,emphasizing the above tasks, have been agreed upon.

(g) PreinvestmentStudy

4.13 The proposed project includes a feasibilityand detailed engineer- ing study of the Ouidah-Alladaroad (40 km). This two-lane gravel road connects the coastal road in the south with the Godomey-Bohiconroad at Allada, thereby considerablyreducing travel time for traffic from the south- western coastal area, which at present often detours via Cotonou. Traffic on this road is expected to be about 200 vpd. Maintenance costs on this road are high and the Government proposes improving this road to paved standard. The feasibilitystudy would determine the type of improvementseconomically justified. It will be followed by detailed engineering if justified. Terms of reference for this study have been agreed upon. - 19 -

B. Cost Estimates

4.14 The total cost of the project (net of taxes and duties but includ- ing contingencies)is estimatedat about US$21.3 million equivalent,with foreigncosts of about US$17.0 million (80%). The Governmenthas agreed as it has done under the Second Highway Project, that the proceedsof the credit for the project should not be used to finance taxes and duties. The table below (which summarizesTable 12) shows each project item, includingits contingencies, for co-financingpurposes. Table 13 presentsa more conventionalapproach, dividingthe project into civil works, equipmentand material purchases, consultantservices and contingencies.

Cost Estimates,Net of Taxes, at July 1977 Prices

Local Foreign Total Local Foreign Total Foreign as ----- CFAF million-- - …------US$'000------of Total

Rehabilitation of A. Godomey-Bohicon-Abomey Road (107 km) including detailed engineeringand supervision 551 1,970 2,521 2,249 8,041 10,290 78

B. ResurfacingBituminous Roads (about 195 km) 253 1,016 1,269 1,033 4,147 5,180 80

C. ResurfacingLaterite Roads (about273 km) 105 351 456 428 1,433 1,861 77

D. PurchasingEquipment and Materials 61 537 598 249 2,192 2,441 90

E. TechnicalAssistance and Fellowshipsto DRB 45 176 221 184 718 902 80

F. TechnicalAssistance and Fellowshipsto DSP 17 72 89 69 294 363 80

C. PreinvestmentStudy of Ouida-Allandaroad (40-km) 13 49 62 53 200 253 80

TOTAL COST 1.045 4.171 5,216 4.265 17,025 21.290 80

of which:

Base Costs 843 3,359 4,202 3,440 13,711 17,151 80 PhysicalContingencies 70 300 370 285 1,225 1,510 81 Price Contingencies 132 512 644 540 2,089 2,629 80 - 20 -

4.15 Cost estimates for rehabilitationof the Godomey-Bohicon-Abomcy road and for resurfacingbituminous and laterite roads are based on the con- sultant's studies of June 1976 and were updated to mid-1977 by the appraisal mission. Cost estimates of consultant services and technical assistance are based on current unit prices applied in Benin and other West African countries. The billing rate for consultantsservices is estimated to average US$6,500 per field month, including salaries, overheads and fees. Reimbursableexpenses payable to consultantsare estimatedto average US$2,500 per field man-month includinghousing, internal and external travel, telecommunications,report preparation,etc. Costs for equipmentand spare parts are CIF prices in bids received in Cotonou in July 1977.

4.16 Physical contingenciesof about 10% for road rehabilitationhave been added for works by contract or by force account. Annual price increases of 7.5% for equipment and 9% for civil works and consultant services have been used to estimate price variations in 1977-1980period.

C. Execution and Procurement

4.17 The Ministry of Equipment throughDRB and the Ministry of Tran- sportation through DSP will be responsiblefor the execution of the project. DRB and DSP will be assisted by consultantsto be selected in agreement with and under terms and conditions satisfactoryto the Association. Outlines of the scope of all consultant services have been agreed upon. The expected implementationschedule for the major activities of each project element is shown on the following page. The proposed project is scheduled to be com- pleted by 1980.

4.18 The rehabilitationof the Godomey-Bohicon-Abomeyroad will be financed by Kuwait and OPEC Funds and Government and executed by contractors on the basis of internationalcompetitive bidding. The bidding procedures and contract awards will follow guidelines agreeble to both organizations. The consultantLamarre Valois completed the detailed engineeringand preparation of bidding documents in April 1977. Rehabilitationworks are expected to start in early 1978 and take about 27 months to complete. Rehabilitation supervisionwill be provided by consultantsin agreement with and under terms and conditions satisfactoryto both organizations.

4.19 The program to eliminate backlog maintenanceon bituminous road will be divided into three parts to be undertaken in the following sequence. The first part will consist of clearing vegetation and rehabilitationof shoulders, ditches and drainage structures. This will be executed by force account with personnel and equipment of DRB subdivisionswithin whose jurisdictionthe work is performed. The second part will consist of patching existing roads. This will also be executed by force account by the special patching unit to be set up in DRB under the project. The third part will consist of placing a single or double surface treatmenton about 195 km of roads and will be executed by contractorsafter completion of the force account works on in- dividual road sections or a combinationof sections as determined by the consultant in agreementwith the Government. Resurfacing is expected to begin in the fourth quarter 1978 and take about 21 months to complete. Bidding BENIN THIRD HIGHWAY PROJECT PROJECTIMPLEMENTATION SCHEDULE

(CALENDAR YEARS)

ITEM ACTIVITY ACTION BY 1977 1978 1979 1980

1st 2nd 3nd 4th 1st 2nd 3rd 4th 1st 2nd 3nd 4th 1st 2nd 3rd | 4th

Credit Signing Government/Bank

Effectiveness Government/Bank *

Rehabilitation of Bids prepanations Contractors Godomey.Bohicon Selection of Contractor Government/KuwaitVOPEC Abomey Road Award of Contract Govemment

Rehabilitation Contractor _ - - - - - Rehabilitation Supervision Consultants _ f f _ f

Resurfacing of Preparation of Bidding Documents Government 2 1 Bituminous Preparation of Preqaalification Contractors Roads Evaluation of Prequalification Government/Bank '195 Km} Preparation of Bids Contractors Selection of Contractors Government/Bank Award of Contract Government

Resurfacing Contractors - _ -

Resurfacing of Laterite Resurfacing Government -

(273 Km)

Equipment Sapply of Equipment Suppliers and Spare Parts Preparation of Bids (Spare Parts) Suppliers Purchase Evaluation of Bids Government/Bank_ Award of Contract Government Supply Supphers

21~______Technical Assistance Short Listing of Consultants Government/Bank to DRB and DSP Preparation of Proposals Consultants Evaluation and Selection of Consultants Government/Bank Award of Contract Government Consultants' Services Consultants _ ------

Pre,nvestment Short Listing of Consultants Government/Bank_ Study of Preparation of Proposals Consultants Ouidah-Allada Evaluation and Selection of Consultants Governmnt/Bank Road (40 K.) Award of Contract Government Feasibility Study Consultants Review Government/Bank Detail Engineering Consultants

1/ To encourage more participation by contractors in this and ongoing projects j! Bids received and contract award under Cr 717-BEN (Benin Feeder Roads) 1 Including techn,cal assistance experts' leave time World Bank 17995

- 21 - procedures and contract award will be on the basis of international competi- tive bidding following Bank Group Guidelines. The Government will prepare the bidding documents with the help of consultants. Consultants will also assist the Government in planning, coordinating and supervising all force account and contract works.

4.20 The program to eliminate the backlog of periodic maintenance of laterite roads will be executed by DRB's field units. Resurfacing of laterite roads will be executed by force account by the two reactivated brigades. Con- sultant Lamarre Valois completed the bidding documents in April 1977 for pro- curement of equipment and spare parts. STI in Cotonou will rehabilitate existing equipment and will assure the proper servicing of most of the highway maintenance equipment fleet. In this work, STI in Parakou will provide assistance by servicing the equipment engaged in maintenance work in the northern part of the country. Consultants will assist the Government in planning, budgeting, accounting and supervising the highway maintenance pro- grams. Consultants will also provide training to key management and field personnel of DRB and STI. Resurfacing is expected to begin in the fourth quarter of 1978 and take about 21 months to complete.

4.21 The bulk of equipment and spare parts will be procured on the basis of international competitive bidding and in accordance with Bank Group guidelines. Bidders will compete on the basis of cost, delivery time and reliability of after-sales service offered. Procurement for items costing less than US$50,000 in connection with the spare parts and construction of office space for DSP in Cotonou up to a maximum of US$100,000 can be done under competitive bidding advertised locally in accordance with procedures acceptable to the Association. Items costing under US$10,000, including office furniture and equipment, small tools, cars, etc., may be procured on the basis of quotations obtained locally; the total amount of such purchases should not exceed US$200,000. The above arrangements, as well as the timing of procurement (para. 4.17), have been agreed upon.

4.22 The consultant for technical assistance program and the preinvest- ment studies will be selected following Bank Group Guidelines and approved by the Association.

D. Financing and Disbursement

4.23 External sources will finance about US$18.6 million or about 87% of total project costs, net of taxes, covering total foreign costs of about US$17.0 million and US$1.6 million in local costs. The Government will meet the remaining local costs of US$2.7 million plus an annual maintenance budget from US$3.0 million in 1978 to US$3.7 million in 1980.

4.24 The Kuwait Fund, the OPEC Fund and the Government will finance the rehabilitation of Godomey-Bohicon-Abomey road, element A of the proposed project. The total cost of this element is US$10.3 million, of which the Kuwait Fund and the OPEC Fund will provide US$8.6 million and the Government will provide the remainder (US$1.7 million). The Association and the Govern- ment will finance the resurfacing of about 195 km of bituminous roads, the - 22 -

resurfacing of about 273 km of laterite roads, technical assistance and fellowships to DRB and DSP, and preinvestment study of the Ouidah-Allada road (40 km), elements B, C, D, E, F and G of the project. The total cost of these elements is US$11.0 million, of which the association will provide US$10.0 million, and the Government will provide the remainder (US$1.0 million).

4.25 Disbursements will include about US$300,000 in retroactive financ- ing for consultant services for detailed engineering of Godomey-Abomey and preparation of the maintenance elements of the proposed project (paras 4.18, 4.19 and 4.20). To help speed up project implementation, it has been agreed that IDA will provide US$250,000 in advance as part of its contribution to project financing. These funds will be deposited in a special account in a bank acceptable to the Association in Benin, and on terms and conditions satisfactory to the Association. IDA credit funds will be disbursed as follows:

(i) 92% of total expenditure for resurfacing of bituminous and laterite roads, parts B and C of the project;

(ii) 100% of foreign expenditures and 90% of local expenditures for equipment, spare parts and materials, part D of the project; and

(iii) 90% of total expenditures for technical assistance, fellow- ships and consultant services, part E, F, and G of the project.

The Association's detailed disbursement schedule has been established (Table 14).

4.26 Request for disbursements against the elements of the project will be fully documented. Disbursements for force account work of element C and part of element B will be against certificates of expenditures; detailed documentation will be retained by the borrower and available for inspection by the Association.

4.27 Should the Association's Funds remain in the credit account after project completion, they would be used to regravel additional laterite roads to be approved by the Association.

E. Project Monitoring

4.28 The Government will appoint an agent who will be in charge of moni- toring the project and reporting tri-monthly to IDA on all components of the project. These reports will state the physical progress of each project element, discuss problems and propose solutions thereto, and outline plans for the coming months. They will also evaluate the performance of contractors, supervisory engineers and consultants, review the tri-monthly and cumulative finances, and update project costs. The reports will be forwarded to IDA for review. - 23 -

5. ECONOMICAPPRAISAL

A. General

5.01 The economy of Benin is predominantlyagricultural, but has an unusually large commercialand administrativesector. For the transportof agriculturaland a small amount of industrialproducts to domestic and foreign markets and for passenger traffic, it depends exclusivelyon roads in the north and on roads and railways in the south.

5.02 The first objective of this project is to preserve and rehabili- tate the most trafficked south-northroad in the country. The second objec- tive is to eliminate the backlog of periodic maintenance on bituminous and laterite roads. A third objective is further overall improvementof the on- going routine maintenanceeffort.

5.03 The project is well justified and expected to yield an economic rate of return (RR) of 75%. The elements not included in the rate of return calculations(technical assistance to DSP and preinvestmentstudies) will strengthenGovernment institutionsand prepare future projects.

B. Rehabilitationof the Godomey-Bohicon-AbomeyRoad

(a) Background

5.04 The Godomey-Bohicon-Abomeyroad links the capital with a major historic town via the most densely populated and one of the most productive regions: the major palm oil producingunits, including the Hinvi project financed by the Association,are located there. Considerableincreases in palm oil production are expected in the near future, because trees planted in recent years are now approachingtheir productive years. The Godomey- Bohicon section of the road, which meets the Cotonou-Parakourailroad at Godomey, Allada and Bohicon, is also part of the main south-northaxis. Everything produced in the north for export via Cotonou or for consumption in the south, must go through this region via road or rail.

(b) Traffic

5.05 Traffic volumes on the Godomey-Abomeyroad were determined on the basis of manual traffic counts organized by the consulting firm during seven days in February 1976. As February is a period of greater than aver- age traffic density on this road, these data had to be adjusted to reflect more realisticallythe average daily traffic over the whole year. Previous counts by the Administrationdid not indicate a clear pattern which could serve as a statisticalbasis for adjustment.The consultantmade therefore two calculations,one based on the actual February figures (high estimate) and one based on adjusted February data, with truck traffic reduced by 50% (low estimate). According to the consultant,the actual amount of traffic will most probably be somewherebetween these estimates (Table 19). - 24 -

5.06 The consultants'low estimate (the actual traffic per day of cars and vans and half of the amount of trucks recorded by the consultant in February 1976) was adopted as the best conservativeestimate by the mission. This indicates that average daily traffic (adt) in 1976 ranged from 1,202 vehicle equivalents 1/ (1,161 vehicles) on the Godomey-Akassatosection (14 km) to 511 vehicle equivalents (486 vehicles) on the Sehoue-Bohicon section (26 km) (ExhibitII and Table 19).

5.07 As explained above (para. 2.04), due to the lack of hard economic information,traffic growth was even more difficult to project. Uncertain- ties were greatest in the immediatefuture, because it is unknown when the expected economic upswing will take place. On the other hand, as traf- fic on this road will be influencedmainly by production of palm oil and palm kernels, and as substantialnew plantings have occurred in recent years which are bound to produce before the end of the 1970s, it was decided to adopt a uniform growth rate of 4% per annum over the 15-year lifetime of the project. If the OCBN monopoly is abolished, or if the OCBN railroad is closed, these estimateswould have to be raised considerablyin the 1980s, but the proposed design standardswould remain adequate for the lifetime of the project item.

5.08 At the moment the road is not yet an importantpart of the Benin to Niger route. The 1976 average daily traffic included less than 15 trucks per day for Niger, which demonstratesthe railroad'seffective monopoly for traffic to Niger, except in emergencysituations. However, this situation is expected to change because the railroad bridges are now being converted to allow road traffic (para. 2.13) and EDF is planning to pave Bohicon-Dassa Zoume and is preparing preinvestmentstudies of Dassa Zoume-Parakou. The missing link in a bituminous Cotonou-Niameyroad is therefore expected to be filled by the middle of the 1980s. This development has not been taken into account in the traffic projections, as the future of the parallel railroad and the Government's policies towards it are unclear. Traffic projections used in this analysis do not include induced traffic and are therefore most probably on the conservative side beyond 1985.

(c) Rehabilitation and Maintenance Costs

5.09 The cost estimates, exclusive of taxes, used in the economic eval- uation, are in May 1976 prices. They include CFAF 1.6 billion in 1978 for rehabilitation of 57 km and resurfacing of 50 km (US$76,285 and US$44,817 respectively per km), including shoulder and ditch work and removal of deteriorated sand-asphalt in both cases, and base course renewal in the

1/ Cars and vans equal one vehicle equivalent, trucks with two axles two, and tractor-trailers four. - 25 - case of rehabilitation.1/ A double surface treatment has been provided for in 1984 (US$12,000per km) and annual routinemaintenance needs are computed in the computer model (para. 5.12).

(d) Benefits and Risks

5.10 As indicatedabove, the only benefits from road constructionwhich were quantifiedare savings in vehicle operating costs resulting from the improved road conditionsand savings due to delaying reconstructionand rehabilitationcosts due to improved maintenance (Table 15). Other benefits, such as induced development,time savings to drivers and occupantsof the vehicles, increase in riding comfort and reductionof accidentswere not quantified. There are no special risks in this project element as it concerns a major road with well establishedtraffic of more than 500 vehicles per day.

(e) Economic Return and Sensitivity

5.11 The economic appraisalof the Godomey-Abomeyroad prepared by the consultantwas based on a comparisonbetween the cost of rehabilitationand the resultingvehicle operating cost savings of existing traffic growing at a constant rate of 4% per year over the 15-year lifetime of the project. This simple analysis gave an economic rate of return of about 46% under the lowest starting year traffic assumption (64% under the high estimate,para. 5.09), but underestimatesthe life-timeof the 58 km of new road and neglects the extremelyhigh maintenancecosts that would be necessary to keep the existing road practicable in the "do-nothing"alternative. Sensitivity analysisby the consultant indicatedthat even with a traffic growth rate of only 2%, which is less than populationgrowth in the country, the rate of return still remained about 42% (46% under the high traffic estimate).

5.12 However, the Consultant'sappraisal relied exclusivelyon vehicle operating cost savings which were to a large extent derived theoreticallyand not based on empirical evidence. The Consultant'sresults were therefore tested with the Highway Design and MaintenanceModel (HDMM) model developedby the Bank Group's Central Project Staff (CPS) using empirical evidence derived from experimentalresearch in Kenya. The model derived vehicle operating cost savings on the basis of geometric data concerning the road, the quality of its surface, the traffic that passes over it and the actual past and assumed future maintenance policies. The model also searched for the optimal rehabilitationpolicy from among selectedmaintenance alternativeson the basis of net present value and internal rate of return criteria,taking into account benefits from vehicle operating cost savings, but also extra benefits from delayed reconstructionand rehabilitation. The model indicated that

1/ Although rehabilitationmay contractuallybe spread over a period of 15 months, for purposes of calculatingthe ER it has been assumed to take place completely in 1978. In reality disbursementsfor mobiliza- tion may well start at the end of 1977 and executionmay well spread into the first months of 1979. These two items will then cancel each other out. - 26 -

vehicle operatingcosts derived from the Kenya experienceare lower than those developedby the consultantsfor Benin, but the rate of return on this project componentwas still 35% and on individualsections between 13% and 47% (Table 15).

5.13 Assuming cost increasesand benefit decreases both separately and simultaneously,this project item keeps a rate of return of about 12% with a cost increase of 240% and a benefit decrease of 70% and simultaneous cost increasesand benefit decreases of about 55% (Table 18).

C. BituminousRoad Resurfacing 1/

(a) Traffic

5.14 Traffic on the bituminousroads selected for the project varies from almost 7,600 vehicle equivalentsper day (6466 vpd) on the Seme-Porto Novo road to about 470 vehicle equivalents(382 vpd) on Come-Lokossa-Dogbo (Table 8). Traffic growth rates ranging from 10% per annum on the Cotonou- Seme road (first 20 km of the link with Nigeria and of the link between Cotonou and Porto-Novo,the two capitalsof the country) to 4% on Come-Dogbo have been assumed between 1978 and 1986, the lifetime of this project item (para. 3.07).

(b) Cost of Resurfacing

5.15 The resurfacingof bituminousroads will be carried out by con- tractors. The cost of this element at May 1976 prices, exclusiveof taxes and technical assistance,is CFAF 522 million in 1978 and CFAF 488 million in 1979 (Table 16). These expendituresinclude rehabilitationof shouldersand ditches. This amounts to US$16,000per km of single and US$25,350 per km of double surface treatment. Maintenancecosts of about US$2,000/kmhave been added to the cost of reconstruction.

(c) Transport Costs and Benefits

5.16 Transport costs are the costs (at May 1976 prices) of operating four typicalvehicles on five road surfaces. Transport cost savings taken into account range between 21% for passengercars and about 55% for tractor trailers, 4 axle, 250 horsepower, 24 ton loading capacity. These savings are lower than those used by the consultantfor the Godomey-Bohiconroad but still larger than those derived with the HDMM model. Since sensitivity analysis indicated that the project could stand benefit decreases of 86% and still give a satisfactoryrate of return (para 5.18) no new analysis was made with the HDMM figures.

5.17 The only benefits which were quantifiedare savings in vehicle operating costs resulting from the improvedroad conditionswith existing traffic growing at the above specifiedrates. The seven-yearbenefit streams for all roads in this project item are summarizedin Table 16.

1/ For more details see Tables in Annex II. - 27 -

(d) Economic Return and Sensitivity

5.18 An economic rate of return of 155% and a benefit/costratio of 7.3 at a 12% discount rate was found for the bituminous road element of the project. The rate of return on individualroads varied from 335 to 37% with benefit/costratios between 25.9 and 1.8 (Table 16). Assuming cost increases and benefit decreases both separatelyand simultaneously,this project item keeps a rate of return of about 12% with sixfold cost increases, benefit decreases of 86% and simultaneouscost increases and benefit decreasesof about 75% (Table 18).

D. Resurfacing of Laterite Roads 1/

(a) Traffic

5.19 Traffic on the laterite roads selected for the project varies between 78 and 41 vehicle equivalents(between 54 and 25 vehicles) per day. Traffic on all these roads is expected to grow by at least 4% per year over the next seven years (Table 9).

(b) Cost of resurfacingwith laterite

5.20 The cost of resurfacingas of May 1976, exclusiveof taxes and technicalassistance, but includingamortization of all equipmentused, is estimatedat CFAF 261 million in 1978 and CFAF 221 million in 1979 (Table 17). This amounts to US$7,206 per km. These expendituresinclude rehabilita- tion of ditches and structures and maintenancecosts of about US$1,000 per km per year.

(c) Transport costs and benefits

5.21 Transport costs are the costs (at May 1976 prices) of operating the four above-mentionedvehicle types on six differentkinds of increasingly worse gravel roads. Transport cost savings taken into account range from 41% for passenger cars to 54% for tractor-trailers.

5.22 The only benefits quantifiedare savings in vehicle operating costs resulting from the improved road conditionwith existing traffic growing at 4% per annum. The road will be improved from its 1976 condition and is expected to last through 1978 or 1979. The seven-yearbenefit streams for all roads in this project item are summarizedin Table 17.

(d) Economic return and sensitivity

5.23 The economic return calculationhas been performedon the basis of vehicle operating cost savingsdue to expected improvementsin road surface as a result of resurfacingwith laterite. The improvementsare expected to

1/ For more details see Tables in Annex III. - 28 -

last for a period of seven years due to maintenanceoperations whose costs are included in the project (US$1,000per km and per year). The calculation was performed for each road individuallyand the benefit/costratio for each road was at least 1.4 and the rate of return 29%. The best road (Pehunco- Djougou) has a B/C ratio of 2.3 and a RR of 63%. The RR on the whole re- surfacingwith laterite item is 54% with a B/C ratio of 2.1 (Table 17).

5.24 Assuming cost increases and benefit decreases both separatelyand simultaneously,this project item keeps a rate of return of about 12 percent with a cost increase of 108%, a benefit decrease of 52% or a simultaneous cost increase and benefit decrease of 35% (Table 18).

E. Distributionof Benefits

5.25 Most project benefits are related to reduced transport costs. Benefits accruing to government-ownedcompanies are unlikely to be passed on directly to producers but will be used to improve service and stabilize tariffs, providing a cushion to absorb some future increases. However, in setting official farmgate prices for major products, the Government should be able to reduce the transportallowance to reflect the reduced transport costs of Government agencies and private firms which collect the scheduled produce. This produce includes the principal agricultural products of the region served by the Godomey-Abomey road with a predominantly agricultural population of some 250,000-300,000 people, and by the other roads again with a predominantly agriculturalpopulation of more than 1 million people, or about one-thirdof the populationwith a per capita income of about US$50. Competition for non-scheduledproducts and other transportservices from private car and truck owners is unlikely to be a major factor but will ensure that some cost savings will be passed on in the form of lower freight costs. One of the major benefits distributedat large will be in the form of improved transport services and accessibilitybetween the more remote areas and urban areas and supply centers and an increase in agriculturalproduction stemming from easier access to markets and cheaper inputs.

6. AGREEMENTSREACHED AND RECOMMENDATION

6.01 The following principal items were discussed and agreed upon by the Government and specified in the Credit Agreement;

(i) DSP will organize and centralizethe collectionof transport data and to analyze transport problems, investment plans and prospects (para. 2.20);

(ii) DSP will study the demand and supply situation in the road transport industry (para. 3.16);

(iii) the expenditures for highway maintenance will be increased from CFAF 427 million in 1976 to CFAF 900 million in 1980 and to take steps necessary to implement the financing schedule (paras. 3.27 and 3.28); - 29 -

(iv) DRB's STI will strenthenits stock accountingsystem (para. 4.10);

(v) consultantswill provide on-the-jobtraining for local counterpartstaff and trainees to be assigned by the Government (paras. 4.10 and 4.12);

(vi) contractsfor resurfacingwill be executed after com- pletion of preparatoryfield work by the subdivisions in charge of individualroads and in accordancewith a work schedule to be prepared by the consultantand agreed upon by the Governmentand the Association (para. 4.19); and

(vii) appointmentof a Governmentagent to monitor the project (para. 4.28).

6.02 The followingitems were agreed upon:

(i) the railway provisionof section 4.14 of credit 215-DA will be waived by an epistolaryexchange between the Government and the Association,reflecting the new situationon the eastern and western railway lines (paras.2.10 and 2.11);

(ii) terms of reference for: (a) technicalassistance to DRB; (b) technicalassistance to DSP and (c) the Ouidah-Allada preinvestmentstudies (paras.4.10, 4.12 and 4.13);

6.03 Agreementhaving been reachedon the above items, the proposed project is suitable for a Credit to the People's Republic of Benin in the amount of US$10.0 million on standard IDA terms.

October 1977

TABLE 1 BENIN

THIRD HIGHWAY PROJECT

Fuel Consumption,1970-1976

(in thousands of'cubic meters)

Airplane Road Vehicles Diesel Lamp fuel for Year fuel Gasoline generators fuel

Regular Super Diesel

1970 8.o 26.4 3.1 39.7 1.7 15.0

1971 5.3 26.9 5.6 39.8 3.2 14.5

1972 5.9 28.9 7.4 53.9 5.6 17.0 1973 3.5 29.3 8.3 47.0 3.7 18.7

1974 4.8 27.8 7.6 37.6 3.8 18.3

1975 4.2 31.4 8.5 49.2 5.4 28.6

1976 6.o 32.2 8.6 51.5 8.9 27.3

1976

1st quarter 1.1 8.o 2.1 14.1 2.2 6.9

2nd quarter 0.9 7.9 2.1 12.5 2.0 6.9

3rd quarter 1.2 8.2 2.2 12.8 1.7 7.0

4th quarter 2.8 8.1 2.2 12.1 2.1 6.5

1977

1st quarter n.a. n.a. n.a. n.a. n.a. n.a.

Compound annual variation (%)

1970-1975 - 13.3 + 3.6 + 22.2 + 4.4 + 25.7 + 13.8

1974-1975 - 14.1 +13.0 +12.0 +31.0 + 42.1 + 56.3

1975-1976 + 42.9 + 2.2 + O.1 + 4.8 + 46.3 -4.

Source: Service des Mines and SONACOP.

April, 1977 TABLE 2

BENIN

THIRD HIGHWAY PROJECT

Transport Investments by Subsector, 1970-1975 and Planned Investments 1976-1980

(in millions of CFAF)

1970-1975 1976-1980

Subsector Amount % Amount /0

Highways 7,587 84 11,200 46

Railways n.a. n.a. 2,900 12

Seaports 873 10 9,990 41 1/ Airports- 575 6 n.a. n.a.

TOTAL 9,035 100 24,ogo 102

1/ Does not include 1970 and 1971.

2/ Difference due to rounding.

Source: Mission Estimate TABLE 3

BENIN

THIRD HIGHWAYPROJECT

Highway Network, 1976

(in kilometers)

Roads Paved Laterite Earth Total

A. Maintainedby DRB 75 2,592 1,532 4,883

1. Interstate 662 1,461 - 2,123

2. National 97 1,131 - 1,228

3. Secondary and feeder roads-./- - 1,532 1,532

B. Maintainedby Min. of Interior and by local authorities - - 2,317 2,317

1. Feeder roads and tracks - - 2,017 2,017

2. Urban roads - - 300 300

TOTAL 759 2,592 3,849 7,200

1/ Including425 km of the Zou-BorgouCotton Project.

Source: Directorateof Roads and Bridges, and World Road Statistics, 1974 edition.

February, 1977 TABLE 4

BENIN

THIRD HIGHWAY PROJECT

Motor Vehicle Fleet, 1967, 1970 and 1975

(motorcycles and agricultural tractors excluded)

(Units)

1967 % 1970 % 19751/ %2/

Passenger cars 6953 65 7011 65 7800 65

Light trucks 2679 25 2662 24 2880 24

Trucks and 896 8 981 9 1080 9 trailers

Special purpose 177 2 195 2 240 2 vehicles

Total 10705 100 10849 100 12000 100

1/ stimated on the basis of total number of registered vehicles that changed licence plates when name of country changed, 2/ Compositionwas assumed to be identical as in 1970.

Note: Average annual compound growth is about 2.0% between 1970 and 1975 (5 years).

Source-: Ministry of Public Works and Transport, February 1972, and Directorate of Land Transport, July 1976.

February, 1977 BENIN TABLE 5

THIRD HIGHWAY PROJECT

Expendituresfor Roads, 1970-1975 and their Financing (in millions of CFAF)

1970 1971 1972 1973 1974 1975 1976 Estimate

I. Expenditures including bulid up or -RoadFund Reserves 910 1117 1935 1126 2374 2742 5919

1. Actual Road Expenditures 746 1096 1935 1126 2374 2680 5919

a. Maintenance ExpendituresL/ 288 401 474 402 401 404 427

b. Investment Expenditures 458 695 1461 724 1973 2276 5492

i. Outside budget 403 508 1275 565 1700 1967 5248

ii. Ordinary budget 55 187 186 159 273 309 244

2. Road Fund Reserves2/ build up 164 21 - - - 62 -

LI. Financing 910 1117 1935 1126 2374 2742 5919

1. Local Sources 507 609 660 561 674 161 671

a. GovernmentBudget!/ 277 360 345 263 377 550 402

b. Road Fund Revenue 230 249 289 249 223 217 235 c. Use of Road Fund Reserves - - 26 49 74 - 34

2. Foreign Aid 403 508- 1j27 X 1700 1975 5248

a. IDA - 508 256 149 657 636 1198

b. EDF 317 - - 106 608 827 500 c. Nigeria - _ 900 225 - - 2250

d. USAID_/ - - - - 429 504 1300

e. FAC 86 - 119 85 6 8 n.a.

f. Other - - - _ - - n.a.

1/ Includes about CFAF 160 million per year in administrative expenditures.(Actual 1974-75) 2/ Actual reserves of the Road Fund were CFAF.288mi,llion at the end of 1973. 3/ Includes revenues from equipment rental and special allotment of CFAF 110 million in 1975 for the streets of Lokossa. / Calendar year estimatesbased on actual disbursementsduring US FY. Source: Data suppliedby DRB, the Ministry of Finance and foreign donors and lenders, November 1976 TABLE 6

BENIN

THIRD HIGHWAYPROJECT

Government Revenues from Road Users, 1975

The following table summarizes the direct revenues estimated to be received by the Government from road users during 1975

CFAF million

Taxes on gasoline and diesel 560

vehicles hoo

tires and tubes 160

spare parts 233

Vehicle registration fees 760

Warrant of fitness, driving permit, tag charges 85

1/ 2,198-/

1/ This total does not include any other charges made on transit traffic or any indirect revenues from the increased marketing of products and associated higher irieomes,made possibly by the road network.

Source: Directorate of Roads and Bridges

March, 1977 TABLE 7

BENIN

THIRD HIGHWAY PROJECT

Design Standards for Godomey-Bohicon-Abomey Road

Alignment no change

Lane width 3 m

Number of lanes 2

Shoulder width 1 m on each side

Sealed shoulder 0.50 m

Pavement: Base course 7 m

Type 15 or 20 cm of cement improved laterite

Surface double surface treatment

Pavement design axle load 13 tons

Subbase no change

Structures improvements in the surface runoff system

Source: DRB

February, 1977 TABLE 8

BENIN

THIRD HIGHWAYPROJECT

Bituminous Roads Needing Resurfacing, their Traffic in 1976 and Expected Traffic Growth, 1978 - 1986 (length in kilometers and cost in millions of CFAF at July 1977 prices) Year Estimated Length of Total _/ Road Section bons- Surface Treatment Length Cost tructed Single Double (1) (2) (1) (2)

1. Cotonou-Seme 1963 - 20 20 - 138

2. Seme-Porto Novo 1972 - 10 10 - 69

3. Cotonou-Guezin 1967 62 - 62 .75 -

4. Guezin-Hilacondji 1967 44 44 - 194

5. Come-Lokossa-Dogbo 1965 29 30 59 129 207

TOTAL 135 60 195 404 608

Average Daily Traffic Cars Vans up Trucks Total Traffic to 2 t 2-10 t 10 t vehicle Growth vehicleunits) equiv.s/

1. Cotonou-Seme 2570 621 232 92 4023 10%

2. Seme-PortoNovo 3997 1489 911 69 7584 8% d/ 3. Cotonou-Gu6zin 1036 432 160 60 2028 6% e/ 4. Guezin-Hilacondji 488 144 52 2 744 6% f/l' 5. Come-Lokossa-Dogbo 219 110 36 17 469 4%

a/ Figures are averages between February and September counts (high and low trucking season) adjusted for closure of border with Togo in February 1976 where relevant. b/ Include repair of shoulders,ditches and culverts and patching,but not contin- gencies. Ccsts at May 1976 prices, used in economic appraisal,are 10% smaller. c/ Truck 2-10 ton=2veh. eq. and more than 10 ton=4veh. eq. d/ Average between counts in Cocodji (between Godomey and Ouidah) and in Guezin. e/ Estimate based on 1974 and February 1978 actual counts. f/ Figures are based on averages for counts in Lokossa and Dogbo in 1975 and February 1976.

Source: DRB September,1977 BENIN TABLE 9

THIRD HIGHWAY PROJECT

Laterite Roads Needing Resurfacing, their Traffic in 1976 and Expected Traffic Growth, 1978 - 1986

(length in kilometers and cost in million of CFAF at July 1977 prices)

Total Clearing Reshaping a/ Sections Length Widening and Cost Regraveling Regraveling (1) (2) (1) (2)

1st Brigade 135 115 20 155 26

Ketou-Kpedekpo 20 - 20 - 26 Kpedekpo-Ouade-Sagon 15 15 - 20 - Sagon-Adjohoun 53 53 - 72 - Djougou-Afon 47 47 - 63 -

2nd Brigade 138 71 67 96 87

Pehunco-Djougou 71 71 - 96 - Kerou-Banikoara 67 - 67 - 87

TOTAL 273 186 87 251 113

Average Daily Traffic Cars Vans up Trucks Total in Traffic to 2 t 2-10 t 10 t vehicle Growth (in vehicle units) equiv.b/ Ketou-Kpedekpo 8 7 7 3 41 4%C/ Kepedekpo-Ouade-Sagon-Adjohoun 8 7 7 3 41 47%c/ Djougou-Afon 13 20 14 1 65 4% Pehunco-Djougou 21 19 9 5 78 4% Kerou-Banikoara 14 10 20 1 68 4% a/ Actual cost including equipment depreciation and repair of ditches and structures excluding residual value of equipment. bI Trucks 2-10 tons = 2 veh. eq. and more than 10 tons = 4 veh. eq. c/ Already in mid-1977, traffic doubled because of the opening of the bridge over Oueme River at Kpedekpo.

Source: DRB

September, 1977 TABLE 10

BENIN

THIRD HIGHWAY PROJECT

Spare Part Requirementsfor Equipment Rehabilitation and Stock Increase

(in millions of CFAF and thousandsof US$ at July 1977 prices)

Designation Costs net of taxes CFAF US$

A. Equipment Rehabilitation

Spares for trucks 55.9 228.0 (BerlietL-62) Large components for trucks 14.7 60.0 (Berliet) Spares for graders 20.9 85.3 (Frisch F-115) Large components for motors 13.2 53.9 (Frisch-Deutz) Tires for miscellaneousequipment 35.5 145.0 Inner tubes of tires 2.1 8.6 Batteries *3.8 15.5

Subtotal 146.1 596.3 (146.0) (600.0) B. Stock Increase

Spares for dump trucks 55.5 226.5 Spares for tractors 1.6 6.5 Spares for graders 75.7 308.9 Spares for bulldozers 51.9 211.8 Spares for loaders 19.5 79.6 Spares for automotor compactors 1.6 6.5 Spares for scrapers 1.1 4.5 Miscellaneousspares 4.1 16.7

Subtotal 211.0 861.0 (211.0) (861.0) TOTAL (A + B) (357.0) (1,461.0)

Source: DRB

September, 1977 TABLE 11

BENIN

THIRD HIGHWAY PROJECT

Equipment for ResurfacingBrigades for Laterite Roads

(in millions of CFAF and thousands of US$ at July 1977 prices)

Costs Quantity Equipment Unit Price Net of Taxes CFAF US$ CFAF US$

2 Bulldozer (140HP) 19.7 80.4 39.4 160.8 plus ripper

4 Motorgrader (135 HP) 15.3 62.4 61.2 250.0

2 Tank truck 7.2 29.4 14.4 58.8

4 Pump (motor) 0.7 2.9 2.8 11.4 (50 m3/hours)

2 Vibratory compactor 1.5 6.1 3.0 12.2

2 Air compressors 0.5 2.0 1.0 4.0

2 Concrete mixers 1.4 5.7 2.8 11.4 (300 liters)

TOTAL 124.7 508.6 (125) (509)

Source: DRB

September,1977 BENIN TABLE 12 THIRD HIGHWAY PROJECT Cost Estimates, Net of Taxes at July 1977 Prices (item by item)

---- CFAF millions------US$'000------Local Foreign Total Local Foreign Total

A. Godomey-Bohicon-Abomey Road (107km) 551 1,970 2,521 2,249 8,041 10,290 1. Civil Works 368 1,460 1,828 1,502 5,959 7,461 2. Construction Supervision 55 68 123 225 278 503 3. Detailed Engineering 17 30 47 69 122 191 4. Physical Contingencies on A.1 to 2 (9%) 37 146 183 151 596 747 5. Price Contingency on A.1 to 4 (16%) 74 266 340 302 1,086 1,388

B. Resurfacing and Elimination of Backlog on Bituminous Roads (195 km) 253 1,016 1,269 1,033 4,147 5,180 1. Resurfacing by Contract 153 616 769 624 2,515 3,139 2. Repair of Shoulders, Ditches and Structures 40 162 202 163 662 825 3. and Patching by Force Account 9 32 41 37 130 167 4. Physical Contingencies on B.1 to B.3(10%) 20 81 101 82 330 412 5. Price Contingencies on B.1 to B.4 (14%) 31 125 156 127 510 637

C. Resurfacing of Laterite Roads (273km) 105 351 456 428 1,433 1,861 1. Resurfacing by Force Account 84 280 364 343 1,143 1,486 2. Physical Contingencies on C.1 (10%) 8 28 36 32 115 147 3. Price Contingencies on C.1 and C.2 (14%) 13 43 56 53 175 228

D. Equipment and Material 61 537 598 249 2,192 2,441 1. Increase Spares Stock at STI 8 203 211 33 828 861 2. Rehabilitation of Equipment 26 120 146 106 490 596 3. Purchase of Equipment 10 115 125 41 469 510 4. Material and Office Equipment for DSP 8 14 22 32 58 90 5. Physical Contingencies on D.1 to D.4 (10%) 5 45 50 20 184 204 6. Price Contingencies on D.1 to D.5 (8%) 4 40 44 17 163 180

E. Technical Assistance and Fellowships to DRB 45 176 221 184 718 902 1. Preparation of Maintenance Elements of the Third Highway Project 10 39 49 41 159 200 2. Technical Assistance 27 108 135 110 441 551 3. Fellowships 2 8 10 8 33 41 4. Price Contingencies (14%) 6 21 27 25 85 110

F. Technical Assistance and Fellowships to DSP 17 72 89 69 294 363 1. Technical Assistance 14 59 73 57 241 298 2. Fellowships 1 4 5 4 16 20 3. Price Contingencies 2 9 11 8 37 45

G. Preinvestment Studies 13 49 62 53 200 253 1. Feasibility Study 7 27 34 29 110 139 2. Final Engineering 4 14 18 16 57 73 3. Price Contingencies (20%) 2 8 10 8 33 41

TOTAL COST 1,045 4,171 5,216 4,265 17,025 21,290 Base 843 3,359 4,202 3,440 13,711 17,151 Physical Contingencies 70 300 370 285 1,225 1,510 Price Contingencies 132 512 644 540 2,089 2,629 BENIN TABLE 13

THIRD HIGHWAY PROJECT

Cost Estimates, Net of Taxes at July 1977 Prices (functional classification)

FOREIGN 1/ --- CFAF Million------US$'000------as % Local Foreign Total Local Foreign Total of T.

A. Construction Works

(i) Rehabilitation of Godomey- Bohicon-Abomey road (107 km) 368 1,460 1,828 1,502 5,959 7,461 80

(ii) Re-surfacing 195 km of bituminous roads 202 810 1,012 824 3,307 4,131 80

(iii) Regraveling 273 km of laterite roads 84 280 364 343 1,143 1,486 77

Sub-total A 654 2,550 3,204 2,669 10,409 13,078 80

B. Equipment and Material Procurement

(i) Regraveling equipment and rehabilitation of existing equipment 36 235 271 147 959 1,106 87

(ii) Increase of spare parts for STI 8 203 211 33 828 861 96

(iii) Material and Office Equipment for DSP 8 14 22 32 58 90 64

Sub-total B 52 452 504 212 1,845 2,057 90

C. Consulting Services

(i) Detailed engineering and construction supervision-- Godomey-Bohicon-Abomeyroad 72 98 170 294 400 694 58

(ii) Preparation of maintenance elements of project 10 39 49 41 159 200 80

(iii) Technical assistance and Fellowships to DRB and DSP 44 179 223 179 731 910 80

(iv) Pre-investment studies 11 41 52 45 167 212 80 Sub-total C 137 357 494 559 1,457 2,016 72 Total baseline costs 843 3,359 4,202 3,440 13,711 17,151 80 D. Contingencies (i) Physical 70 300 370 285 1,225 1,510 81 (ii) Price 132 512 644 540 2,089 2,629 80 Sub-total D 202 812 1,014 825 3,314 4,139 80 TOTAL 1,045 4,171 5,216 4,265 17,025 21,290 80

1/ Calculated in CFAF TABLE 14

BENIN

THIRD HIGHWAY PROJECT

Estimated Schedule of Disbursements./

(in thousands of us$)

IBRD Fiscal Year and CumulativeDisbursements End of Quarter at End of Quarter2/

1977/78

December 31, 1977 1,069 March 31, 1978 1,331 June 30, 1978 2.360

1978/79

September 30, 1978 2,510 December 31, 1978 3,755 March 31, 1979 4,875 June 30, 1979 5,945

1979/80

September 30, 1979 7,015 December 31, 1979 8,085 March 31, 1980 9,043 June 30, 1980 10,000

1/ Proposed Project CompletionDate: June 30, 1980 Proposed Credit Closing Date: December 31, 1980

2/ The Association finances the following project components (including contingencies): a) B and C (92% of total) b) D (100% of foreign or 90% of local expenditures if locallv Procured) c) E, F, and G (90% of total)

Source: Mission Estimates

September 1977 BENIN

THIRD HIGHWAY PROJECT

Godomey-Bohicon-Abomey Road

Yearly Net Benefits by Road Section, 1978-1992

Net Present Value and Rate of Return

(in millions of CFAF at May 1976 prices)

Year 1 2 3 4 5 6 7 8 9 Total

1978 -13.97 -133.04 -627.69 -43.12 -238.14 -111.23 -180.57 -17.15 -75.71 -1,594.95 1979 3.68 57.09 260.68 8.82 37.49 45.o8 59.78 25.24 16.17 514.01 1980 3.92 60.03 273.67 9.07 38.47 47.04 62.72 26.71 16.42 538.02 1981 3.92 63.21 287.39 9.07 39.45 49.25 66.15 26.71 16.66 561.79 1982 3.68 66.40 301.84 8.og 40.43 51.21 69.58 26.71 16.91 584.82 1983 3.68 69.83 317.03 8.og 40.67 53.66 73.26 26.71 16.91 609.81 1984 0.49 52.43 233.24 3.68 -222.95 38.22 48.27 -19.11 - 3.19 323.40 1985 3.92 77.42 350.11 8.09 42.63 58.31 81.34 33.81 17.89 673.51 1986 4.17 81.59 368.24 8.og 43.61 61.01 85.75 35.28 18.13 705.85 1987 4.17 86.oo 387.35 8.og 44.59 63.70 go.41 36-75 18.13 739-17 1988 4.17 90.65 407.44 8.og 45.57 66.40 95.55 38.47 18.38 774.69 1989 4.17 95.55 429.00 8.33 46.80 69.34 100.70 40.18 18.62 812.67 1990 4.17 100.94 451.78 8.33 48.27 72.52 106.33 41.65 18.89 852.85 1991 3.92 106.33 475.79 8.33 49.98 75.71 112.46 43.12 19.36 894.99 1992 3.92 112.46 501.52 8.33 51.45 79.14 118.83 44.59 19.60 939.82

Total 36.99 986.86 4,417.11 61.99 308.95 719-57 990.54 255.29 153.13 7,930.41

Net Present value at 12% 0.04 1.42 6.31 0.04 0.03 1.03 1.31 0.04 0.17 10.39 >

RR in % 25 47 46 16 13 44 37 13 19 35

Source: Computer Run 2102 of March 11, 1977

May. 1977 TABLE 16

BENIN

THIRD HIGHWAY PROJECT

Bituminous Roads Resurfacing

Cost and Benefit Streams, 1979-1986

Rate of Return and Benefit Cost Ratic Road by Road

(in millions of CFAF at May 1976 prices)

Costs Year Cotonou Guezin Cotonou Seme Come Total Guezin Hilacondji Seme Porto-Novo Dogbo

1978 248 274 - - - 522 1979 - - 124 62 302 488 1980 30 22 - - - 52 1981 30 22 10 5 29 96 1982 30 22 10 5 29 96 1983 30 22 10 5 29 96 1984 30 22 10 5 29 96 1985 30 22 10 5 29 96 1986 _- 10 5 29 44

Benefits

1979 651 99 - - 750 1980 880 93 185 162 99 1419 1981 1081 141 372 349 142 2125 1982 1001 201 393 363 191 2149 1983 1003 213 417 671 253 2557 1984 1129 226 590 687 232 2903 1985 1027 182 620 704 286 2638 1986 - - 576 499 264 1339

Rate of return and B/C ratio

RR in % 287 37 200 335 49 155

B/C of 12X discount 12.0 1.8 11.9 25.9 2.3 7.2

Source: The mission's estimate and computer runs

March 1, 1977 TABLE 17

BENIN

THIRD HIGHWAY PROJECT

Resurfacing of Laterite Roads

Cost and Benefit Streams, 1979 - 1986

Rate of Return and Benefit/Cost Ratio Road by Road (in millions of CFAF at May 1976 prices)

Year Ketou Kpedekpo Djougou Pehunco Kerou TOTAL Kpedekpo Adjohoun Afon Djougou Banikoara

Costs

1978 32 112 - 117 - 261 1979 4 16 77 18 106 221 1980 4 16 12 18 16 66 1981 4 16 12 18 16 66 1982 4 16 12 18 16 66 1983 4 16 12 18 16 66 1984 4 16 12 18 16 66 1985 4 16 12 18 16 66 1986 - - 12 - 16 28

Benefits

1979 15 51 - 89 155 1980 15 53 58 93 96 315 1981 16 55 60 97 100 328 1982 17 58 62 101 104 342 1983 18 60 65 105 109 357 1984 18 62 67 109 113 369 1985 19 64 70 113 117 383 1986 - - 73 - 122 195

Rate of Return and B/C Ratio

RR in % 32 29 61 63 79 54

B/C at 12% discount 1.5 1.4 2.2 2.3 2.7 2.1

Source: The mission's estimate and computer runs

September, 1977 TABLE 18

BENIN

THIRD HIGHWAY PROJECT

Sensitivity Analysis

Resurfacing of Bituminous and Laterite Roads

Reconstruction of Godomey-Abomey

Variations of Costs/Benefits separately Rate of and Costs and Benefits together Return

Reconstruction Godomey-Abomey 35%

Cost increase 100% 20%

increase 190% 14%

increase 240% 12%

Benefits decrease 25% 29%

decrease 50% 20%

decrease 70% 12%

Cost increase and benefit decrease 55% 12%

Resurfacing of bituminous roads 155%

Cost increase 200% 53%

increase 400% 27%

increase 630% 12%

Benefits decrease 86% 12%

Cost increase and benefit decrease 75% 13%

Resurfacing of laterite roads 12 %

Cost increase 108 % 12 %

Benefit decrease 52 % 12 %

Cost increase and benefit decrease 35 % 12 %

Source: Computer runs by mission (CB Pack)

September, 1977 TABLE 19

BENIN

THIRD HIGHWAY PROJECT

Economic Appraisal,

Estimate of 1976 Traffic on Godomey-Abomey by Category of Vehicle and by Road Section

(in vehicle equivalentsl/)

High Estimate ?J Best Estimate 3/ Section Cars Vans Trucks Tractor- Trucks Tractor- 2 axles Trailers 2 axles Trailers

A.Godomey-Akassato 279,225 132,130 44,530 10,220 22,265 5,110 (km 1 to 14) B.Akassato-Attogon 184,325 97,820 34,675 10,220 17,338 5,110 (km 14 to 52) C.Attogon-Sehoue 148,190 77,380 30,295 8,030 15,148 4,015 (km 52 to 80 D.Sehoue-Bohicont/ 122,640 47,450 25,915 6,570 12,958 3,285 (km 80 to 117) E.Bohicon-Abomey 290,905 66,795 23,360 5,475 11,680 2,738 (km 117 to 124)

1/ Car or van = 1 vehicle equivalent Truck 2 axles 2 vehicle equivalent Tractor-trailer= 4 vehicle equivalent

2/ Count of February 1976 (harvest time)

3/ Half the number of trucks with 2 axles and tractor-trailers. Same number of cars and vans. Exhibit II presents average daily traffic in vehicle equivalentsof the Best Estimate.

4/ 6 km of section A and 11 km of section D were reconstructedunder the Second Highway Project.

Source: RepubliquePopulaire du Benin, Etude de Factibilitede la Refection et du Resurfacagede la Route Godomey-Bohicon-Abomey,rapport final, June 1976, by Lamarre Valois InternationalLtd., Montreal, Canada, for the Republic of Benin.

April 1977 ANNEX I

BENIN

THIRD HIGHWAY PROJECT

Training Program

List of Personnel

A) Directorate of Roads and Bridges

1. Consultants' Counterparts

1 Road Maintenance Section Head

I Studies and New Works Head

I STI Head

2. Trainees

2 Road Maintenance Division Heads (North and South)

2 Road Regravelling Brigade Heads (North and South)

1 Road Engineer for Control of Bituminous Roads Contracted Works

2 Routine Maintenance Brigade Heads for Bituminous Roads

2 Equipment Inspectors

1 Equipment Warehouse Head

2 Equipment Workshop Heads

B) Directorate of Studies and Planning

1. Consultants' Counterpart

1 Division of Planning and Coordination Head

2. Trainees

1 Transport Engineering Subdivision Head

1 Transport Economic Subdivision Head ANNEX II Table 1

BENIN

THIRD HIGHWAY PROJECT Economic Appraisal

Bituminous Road Resurfacing

Vehicle ODerating Costs, Net of Taxes on Different Types of Bituminous Road Surfaces, 1976

Bituminous Car Van Truck Tractor-trailer Surface 1/ Peugeot 504 Peugeot 404 with 2 axles truck, 4 axles (Rougb ess in bachee Berliet 10 t 250 HP2/ 24 t (in CFAF per km)

1 (2500) 22.80 23.12 94.13 114.76

2 (4000) 23.73 24.76 105.46 130.71

3 (5500) 24.66 26.22 116.96 148.45

4 (7000) 26.53 29.90 141.34 181.64

5 (8500) 29.00 37.o6 186.43 254.83

(index surface 5 = 100)3/

1 79 62 50 45

2 82 67 57 51

3 85 71 63 58

4 91 81 76 71

5 100 100 100 100

1/ See Annex IV, Table 3 bis 1. 2/ HP = horse power, t=ton 3/ Percentage saved on vehicle operating cost is 100 - index number.

Source: R6publique Populaire du Benin, Etude de Factibilit6 de la Refection et du Resurfacage de la Route Godomey-Bohicon-Abomey,rapport final, June 1976, by Lamarre Valois International Ltd., Montreal, Canada, for the Republic of Benin.

April 1, 1977 ANNEX II Table 2

BENIII

TRIRD HIGHWAYPROJECT

Economic Appraisal

Bituminous Road Resurfacing

Year of Construction and Surface Condition without the Pro.iect 1977-1993

Road Section No. Year con- Surface condition-of section at start of of structed km. 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

Cot onou-Seme 20 1963

PKC-1 1 4 4 5 5 5 5 5 5 5

PKI-3 2 3 3 4 4 5 5 5 5 5

PK3-20 17 2 2 3 3 4 4 5 5 5

Seme-Porto Novo 10 1972

PKO-10 10 2 2 3 3 4 4 5 5 5

Cotonou-Guezi 62 1963

PKO-1 1 5 5 5 5 5 5 5 5 5

PKI-21 20 4 4 5 5 5 5 5 5 5

PKI-62 41 -3 3 4 IL 5 5 5 5 5

Guezin-Hillacondji 44 1967

PKO-11 v 3 3 4 4 5 5 5 5 5

PK 11-44 33 2 2 3 3 4 4 5 5 5

Come-Dogbo 59 1965 PK0-l 1 5 5 5 5 5 5 5 5 5

PKI-7 6 4 4 5 5 5 5 5 5 5

PK7-24 17 3 3 4 4 5 5 5 5 5

PK24-59 36 2 2 3 3 4 4 5 5 5 1/ Annex IV, Table 3 bis 1. Source: DRB April, 1977 ANNEX II Table 3

BENIN

THIRD HIGHWAY PROJECT

Economic Appraisal

Bituminous Road Resurfacing

Assumed Traffic Growth and Surface Condition with the Project, 1979-1986

Road Section Surface condition of road at start of

1979 1980 1981 1982 1983 1984 1985 1986

Cotonou-Seme 1 1 1 2 2 2 3

Seme-Porto Novo 1 1 1 2 2 2 3

Cotonou-Guezin 1 1 1 2 2 2 _

Guezin -Hillacondji 1 1 1 2 2 2 3 3

Come'~Dogbo 1 1 1 2 2 2 3

Source: DRB

April 1977 ANNEX III Table 1 BENIN

THIRD HIGHWAY PROJECT

Economic Appraisal

Resurfacing of Laterite Roads Vehicle Operating Costs, Net of Taxes, on Different Conditions of Laterite Surfaces, 1976 Surface condition (Roughness in Car Van Truck Tractor-trailer mm/km) (In CFAF per km)

1 (3250) 24.66 20.22 116.96 140.45

2 (4500) 26.53 33.90 138.85 173.90

3 (6ooo) 29.00 37.06 152.59 198.90

4 (8000) 32.62 45.91 183.91 237.76

5 (10000) 36.14 51.84 213.93 261.99

6 (12000) 41.45 59.40 248.80 3 23.4oI

(Index surface 6 = 100)%'

1 59 48 47 46

2 64 57 56 54

3 70 62 61 61

4 79 77 74 74 5 87 87 86 81 6 loo 100 100 100

a/ Percentage saved on vehicle operating cost is 100 - index number. Source: Republique Populaire du Benin, Programme Quadriennal d'Entretien Routier, Rapport Final, by Lamarre Valois International, Ltd., July 1975.

April, 1977 ANNEX III Table 2

BENIN

THIRD HIGHWAYPROJECT

Economic Appraisal

Surface Condition in 1977 of Roads to be Resurfaced with Laterite and Year of Execution of Resurfacing Work

Road Section Length Surface Year (km) Conditionl/ Resurfaced

K'tou-Kpedekpo 20 4 1978

Kpedekpo-Ouade-Sagon 15 4 1978

Sagon-Adjohoun 53 6 1978

Djougou-Afon 47 4 1979

Pehunco-Djougou 71 5 1978

Kerou-Banikoara 67 5 1979

TOTAL 273

1/ Without the project. See Annex VI, Table 1 for definition of surface condition.

Source: Republique Populaire du Benin, Programme Quadriennal d'Entretien Routier, Rapport Final, by Lamarre Valois International, Ltd., July, 1977

September 1977

EXHIBIT I BENIN THIRD HIGHWAYPROJECT Organizationof the Directorateof Roadsand Bridges(DRB) - 1977

Pltia Dieco of Secreary' New Works Committee l Roads[ and Br8dges Office ...... Feeder Roads Maintenance

Stdesu and 1ha Now Works =taintenance Fede r Roads Service Service

intenanrMaintenance DISTRICTS

Cotonou t(PortoNovo Lokossa Bohicon Savalou ParakouPSave Kando Daugou Natitgou

Allada Pobe Com Cov DassaZoume Bante Nikki Bankoara 1 TenguSta A Ketou Kilibo P4hunco

* To be created World Bank-16737

PRO1ECi1 HI'WA4Y Traftic THIRD 1976 Legend .. 0 GOdOmeY-Abe; Aut0mobilesTrucks 783 -sSmall 32 -TruCk-trailersTrucks -Twoae equivalents |-Vehicles 7011020 2 3 5 1 2021_ 5v1 ' 7 sVehicleequv e e0Hlon

1/5005 0000 Scale: I CO N1 SOMEYA BO H X (2 4 P) 1 7 (PK 117) 124) (PK 36 9

ZOGBOIlOM (PK 104)

212 SEHOUE(PK 80)

GBOTAGON OUAGBOALIHO

ATTOGON (PK 52)i

ALLADA (PK46)

AK(ASSATO (PbK14)

CALAVI ABOMEY 41 GODOMW1

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