FILELVfiJ REYSRESTRICTED Report No. PTR=36a

Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracyor completeness.The report may not be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized

APPRAISAL OF

A SECOND HIGHWAY CONSTRUCTION PROJECT

BRAZIL Public Disclosure Authorized

March 17, 1970 Public Disclosure Authorized

Transportation Projects Department Currency Equivalents(July 1969)

Currency Unit - New Cruzeiro NCr US$1.00 - NCr 4.1 US$1 million - NCr 4.1 million NCr 1 million - US$243,900

Fiscal Year

January 1 to December 31

Units of Weights and Measures: Metric

Metric: British/USEquivalent

1 Kilometer (km) - 0.62 miles (mi) 1 Meter (m) 2 - 3.28 feet (ft) 1 Square Kilometer (km ) - 0.386 square mile (sq. mi) 1 Metric ton (m ton) - 0.98 lg. ton 1 Metric ton (m ton) - 1.1 US short ton

Totals may not add up because of rounding

APPRAISAL OF THE SECOND HIGHWAY CONSTRUCTION PROJECT

Table of Contents

Page No.

SUMMARY ......

1. INTRODUCTION ...... 1

2. BACKGROUNI) ......

A. General ...... 1 B. Transport Policy ...... 2

3. 'THEHIGHWAY SECTOR ...... 6

A. The llighwayNetwork; Characteristics and Growth of Highway Traffic and the Vehicle Fleet ...... 6 B. Highway Administration ...... 6 C. Highway Engineering ...... 8 D. Highway Construction ...... 9 E. IlighwayMaintenance ...... 9 F. Highway Financing and Planning ...... 10

4. THE PROJECT ...... 11

A. General Description ...... 11 B. Highways to be Constructed and/or Paved 12 C. Consulting Services for Design and Construction Supervision ...... 12 D. Cost Estimates and Financing ...... 13 E. Execution of the Project ...... 17 F. Disbursement ...... 18

5. ECONOMIC EVALUATION ...... 19

A. Introduction ...... 19 B. The Project Roads ...... 20 C. Benefits from the Project ...... 23

6. RECOMMENDATIONS ...... 24

This report has been prepared by Messrs. Schaefer (Engineer), Siret (Engineer/Economist) and Kanaan (Economist) who appraised the project in September-October 1969.

TABLES

1. Freight Transport by Mode of Transport (1961-1968) 2. Passenger-Kilometers, Percentage Shares and Average Annual Growth Rates of Total and Selected Items by Mode of Transport 3. Federal Investment in Transport by Modes 4. Classification of Highways -- Lengths According to Type of Jurisdiction, December, 1968 5. Relations Among Area, Population and Length of Highways, 1968 6. Relations Among Area, Population, and Number of Vehicles, 1967 7. Vehicle Registration, by State, 1967 8. Vehicle Fleet, 1967 9. Highway Design Standards for New Roads 10. Admissible Highway Design Standards for Improvement of Existing Roads 11. Forecasts of Annual Investment Expenditures for High Priority Road Construction and/or Paving Works. 12. Tentative Financing Plan -- Federal and State Highways (1970-1973) 13. List of Roads for Construction and/or Paving 14. List of Roads for Detailed Engineering 15. List of Roads for Feasibility Studies 16. Average Daily Traffic on Project Roads 17. Estimated Vehicle Operating Costs 18. Average Daily Traffic -- Selected National Highways, 1968 19. Internal Rates of Return for Roads Proposed for Construction and/or Paving

CHIARTS

I. National Highway Department (DNER) IT. GEIPOT III. lHighwayDepartment of Maranhao IV. State H-lighwayDepartment - Recommended Standard Organizational Structure

ANNEX

A. Transport Survey

I - Main Recommendations II - Consultants Engaged in the Transport Survey

B. First Plan of Action (PA-1) Progress of Implementation C. Second Plan of Action (PA-2) Outline of Measures and Objectives

D. Reorganization of the Highway Administration

E. The Project Roads

F. Consultants Engaged in the Preparation of the Second Highway Construction Project

MAPS

1. General Highway Map 2. Transport Survey - Phases I and II 3. Maranhao, Piaui, Ceara 4. , Paraiba, , 5. , 6. Espirito Santo, 7. 8. , Goias 9. Parana 10. 11. ABBREVIATIONS

GEIPOT - Transport Study Group

DNER - National Highway Department

DER - State Highway Department

RFFSA - National Railways

DNPVN - National Port Organization

UNDP - United Nations Development Programme

USAID - United States Agency for International Development

USBPR - United States Bureau of Public Roads

ADT - Average Daily Traffic

IUCL - Sole Tax on Fuels and Lubricants

PA-1 - First Transport Plan of Action

PA-2 - Second Transport Plan of Action

BRAZIL

APPRAISALOF THE SECOND HIGHWAY CONSTRUCTIONPROJECT

SUMMARY

i. The growing integrationof Brazil's various regions requires continued improvementof transport facilitiesas well as additions to the existing network. At the same time, there is a need for better utilization of the facilities,more effective coordinationof the dif- ferent modes and the eliminationof railway deficits, one of the major causes of Brazilian inflation. ii. Hiighways have assumed the dominant role in meeting the coun- try's needs for transport services. In 1968 highway transport accounted for over 70% of total freight ton-km and 90% of passenger-km. iii. Highlway administration is undergoing major changes with regard to the distribution of responsibilities. Many of the activities of the National Highway Department (DNER) are over-centralized and there is duplicationof services between National and State Highway Departments, especially in more developed and populated states which have adequate state highway organizations. To remedy this situation the Government has decided to transfer all maintenance and construction functions to State Highway Departments and leave the National Department to concen- trate on planning, regulation and overall supervisionof the road net- work. iv. Since 1964 the Bank has had a continuing exchange of views with the Government of Brazil regardingthe improvementand extension of the transport system. Following the Bank's recommendationsa Trans- port Survey was launclhed in 1965 and carried out in two stages. Phase 1, for which a US$1.5 million Bank grant was provided, covered highway transport in four states, railway transport, coastal shipping and port operations for three of Brazil's principal ports. Phase II was initiated in 1967 with financial assistance from UNDP and USAID and with the Bank acting as executing agent. It covered highway transport in fourteen states and is now nearing completion. Prior to the First Highway Project (Loan 567 BR - see paragraph viii below) the Government submitted a Plan of Action (PA-l) summarizing its transport objectives and giving schedules for action on highways, railways and ports. This Plan has been satisfac- torily implemented. Before negotiating the proposed loan, the Government submitted to the Bank a new Plan of Action (PA-2) outlining the measures required to bring about further improvements in the transport sector. This is a suitable basis for a further loan for highways. v. This project will be the second for highways in Brazil based on the Transport Survey recommendations. It consists of: (a) the con- struction and paving of 872 km of primary and secondary highways, (b) - il -

the improvementand paving of 1,267 km of primary highways, (c) the de- tailed engineeringand supervision of constructionfor the proposed works, and (d) additional consultingservices for detailed engineeringof about 2,300 km of highways and feasibilitystudies on another 3,800 km, to re- inforce planning in the National Highway Departmentand to improve super- vision of highway construction. The total cost of the project is estimated at US$255.1 million equivalent. The Bank loan of US$100 million equiva- lent will finance 40% of the costs of construction and consulting services rendered by Brazilian consultants and the foreign exchange component of the costs of foreign consultants. Total foreign exchange costs of the project will be US$53.1 million, or about 53% of the amount of the loan. Retroactivefinancing will be provided to cover the foreign exchange com- ponent (US$300,000)of costs incurred for the detailed engineeringof one project road designed by foreign consultants (X.Dorsch- Germany).

vi. About 50% of the roads included for construction and/or paving are located in the Northeast, one of the poorest . The constructionprogram proposed under this project will meet this region's most urgent highway needs. The program of feasibilityand detailed en- gineering studies included in the project emphasizes the developmentof Brazil's western region,where the main barrier to developmentis the lack of transportation to distant markets. The proposed studies will cover the region's most important trunk roads. vii. Detailed engineering is complete for all project roads and is satisfactory.

viii. The first highway construction loan (Loan 567-BR, US$26 million) was signed in 1968 and despite initial delays in making it effective, is proceedingsatisfactorily. Two railway projects were financed in 1952 (Loan 65-BR, US$12.5 million) and 1953 (Loan 92-BR, US$12.5 million) and a highway maintenanceproject in 1953 (Loan 75-BR, US$3 million); all three loans have been fully disbursed.

ix. Execution of the project will be the responsibilityof the National Highway Department for national highways and of the respective state highway departmentsfor state and/or delegatednational highways. The loan will be to the Federal Government,and the National Highway Department,as executing agency,will administera revolving fund for payments to contractors,and consultants. Project agreementswill be signed not later than the loan agreement between the Bank and those states where project works are to be carried out on state and/or dele- gated national highways.

x. Contracts for the project works will be let on the basis of internationalcompetitive bidding and the National Highway Departmentis proceedingwith the prequalificationof contractors. xi. Economic rates of return for the different roads range from 17% to 47%. - iii - xii. The project provides a suitable basis for a Bank loan of US$100 million equivalent. On the basis of the average economic life of road constructionworks and length of constructionperiod, the appropriate term would be 25 years, includinga four-yearperiod of grace.

BRAZIL

APPRAISAL OF THE SECONDHIGHWAY CONSTRUCTION PROJECT

1. INTRODUCTION

1.01 The Government of Brazil has requested a loan to help finance (a) the construction and paving of 872 km of highways, (b) the improve- ment and paving of 1,267 km of highways, (c) the detailed engineering and supervision of construction for the proposed works, and (d) addi- tional consulting and expert services to carry out highway feasibility and detailed engineering studies on road sections already selected, to reinforce planning in the National Highway Department (DNER) and to im- prove supervision of highway construction works.

1.02 On the Bank's recommendation a general Transport Survey was launched in 1965 with the assistance of foreign consultants. The first phase wps completed in 1967 and the second phase is nearing completion (para. 2.04). The First Highway Construction Project (Loan 567-BR in 1968) was a direct outcome of Phase I of the Transport Survey. It in- volved the construction and/or paving of various road sections totalling 429 km. Delay in passing the necessary legislation required a 2-1/2 months postponement of the effective date of the Loan but this did not interfere with the bidding and contracting process. The Loan was declared effective on May 16, 1969, all construction contracts have been approved by the Bank and construction has begun on all project roads.

1.03 Other Bank projects in the transportation sector included two railway projects financed by Loan 65-BR and 92-BR (US$12.5 million each) in 1952 and 1953 covering the rehabilitation of the Central do Brasil fa- cilities and the purchase of new rolling stock. A highway maintenance project was financed by Loan 75-BR (US$3 million) in 1953 covering the purchase of maintenance equipment for the State of Rio de Janeiro. All loans have been fully disbursed.

1.04 This report has been prepared by Messrs. Schaefer (Engineer), Siret (Engineer/Economist) and Kanaan (Economist) who appraised the pro- ject in September-October 1969.

2. BACKGROUND

A. General 2 2.01 Brazil, with an area of 8.5 million km , is the fifth largest country in the world. The estimated 1969 population was 92.3 million and population growth averages 3% p.a. Overall population density is low, at about 11 per kn 2 , but there are great regional variations, ranging from 3,000 per km2 in the State of Guanabara to less than one per km in the Amazones. Brazil has a broad range of ecological conditions which - 2 -

permit productionof all tropical,sub-tropical and temperate crops. Un- developed land and water resourcesare vast and there is a great potential for expansionof agriculturalproduction. In the last two decades, growth and diversificationof industrialproduction have been remarkable,and the country is now self-sufficientin most industrialproducts.

2.02 In 1968 Gross National Product at market prices was estimated at about NCr 91.7 billion (1968 prices - US$27.0 billion equivalent). Per capita GNP in the same year was about US$302 equivalent. While the early sixties were characterizedby sluggish growth and high inflation- up to 90% p.a. - major progress towards sustained growth has been regis- tered in more recent years. In 1968 GNP grew 7.4% in real terms, while the cost of living increase for the year was 24%. Prospects for continued growth and gradual reductionof inflationappear good (Economic Report WH 195a).

B. Transport Policy

2.03 Because of the heavy reliance of the economy on export crops and the need to open up new lands for productive use, transport has always played a dominant role in Brazil's economic development. The growing inte- gration of the various regions now requires continued improvementof trans- port facilitiesas well as additions to the existing network. There is also a need for better utilizationof the facilities,more effective co- ordinationof the differentmodes, and the eliminationof railway operat- ing deficits, one of the major causes of the Brazilian inflation.

2.04 Since 1964 the Bank has had a continuingexchange of views with the Government of Brazil regarding the improvementand extension of the transportsystem. In 1965 the Governmentagreed with the Bank's recom- mendation to launch a Transport Survey. The Survey was carried out by consultantsin two stages. Phase I, covering highway transportin four states, railway transport,coastal shipping, and port operations for Brazil's three main ports, was started in 1965 and completed in 1967. A Bank grant of US$1.5 million was provided to finance half of Phase I foreign exchange costs while the other half was covered by the Government. Phase II, covering highway transportin fourteen states, was started in 1967 and is nearing completion. Phase II foreign exchange costs were fi- nanced by UNDP (US$1.4million), USAID (US$1.0million) and the Government (US$1.4million). All local costs for Phase I and II were financed by the Government. The Bank acted as executing agent. The main recommenda- tions from these studies are summarized in Annex A.

2.05 Both Phases of the Survey were conditionalon the Government agreeing to Memoranda of Understandingon steps to be taken to improve transport services. Prior to Loan 567-BR the Governmentsubmitted a Plan of Action (PA-1) summarizingits transport objectivesand giving schedules for action on highways, railways and ports. This Plan has been satisfactorilyimplemented (Annex B). The Governmenthas submitted to the Bank a new Plan of Action (PA-2) outlining the measures required to bring about further improvementsin the transportsector (Annex C). This - 3 -

is a suitable basis for a further loan for highways. The principal mea- sures included in PA-2 are referred to in the followingparagraphs.

TranSport Coordination

2.06 To coordinateand supervise the Transport Survey, as well as to provide counterpart personnel and required facilities,a Government agency - Grupo Executivo de Integracao da Politica de Transportes, GEIPOT - was establishedin 1965. The survey is now about complete and GEIPOT has been formally established as a permanent agency within the Ministry of Transport (CihartII). As such, GEIPOT will be responsible for the elaborationof a national transportpolicy with a view to improv- ing coordinationbetween the various modes of transport and reducing overall transport costs. Tnis reorganizationhas not yet been fully put into effect anidits implementationis one of PA-2's main objectives.

2.07 One of the important tasks of the TransportSurvey was to under- take a study on highway pricing policies. Regional analyses have been conducted and the coordinatingconsultants of Phase II (KAMPSAX-Denmark) have recently submitted a report including recommendations for a national policy for road user charges. The report concludes that (a) the amount of fuel taxes that would be collected from highway users during the pe- riod 1969-1976would fully cover the economic costs of interurbanhigh- ways - marginal costs, i.e. variable costs of maintenanceof highways - but only about 70% of the incrementalcosts of administering,maintain- ing and expanding the highway network in that period, and (b) the revenues from charges levied on various types of vehicles do not reflect their relative use of the hiighwaysystem nor their effect upon the physical design of highways. Automobiletraffic carries the main burden of charges while heavy vehicles contributeinsufficient amounts in relation to their use of road facilities. The above shortfall of fuel revenues below in- crementalcosts is overstated,in that significantamounts of other taxes paid by vehicle owners and users are excluded -- e.g. the road tax (para. 3.21). If proceeds from these taxes are added, the gap would be only around 10-15%. To improve resource allocationin the transportsector a restructuringof these charges, in the sense of shifting more of the burden to truck traffic, should be carried out promptly. This would not significantlyincrease the level of taxation in the private sector which is already bearing a heavy tax burden (IBRD WH 195a). Under PA-2 the Gov- ernment has stated its intentionto discuss the report's recommendations with the Bank in the course of 1970, with a view to formulatinga nation- al policy for road user charges.

2.08 PA-1 envisaged that a new railway cost-basedtariff would be in- troduced in 1969 with the cooperation of consultants (SOFRERAIL-France). Since these consultants commenced work only in July 1969, there has not been sufficient time to adopt new tariffs. PA-2 calls for the adoption of a rate and fare policy based on the costs of the respective services and, pending implementation of this policy, rates and fares are to be adjusted periodically to keep in line with inflation. - 4 -

2.09 There is no administrativeallocation of traffic as between modes in Brazil and users are free to select that mode of transport which best suits their requirements. Entry to the interstate road transportindustry requires DNER approval, but the granting of licenses is practicallyautomatic. Intrastate trucking operators are licensed by the State Highway Departments (DERs) in the same way. Bus companies must apply to DNER or to DERs, prove public need and file tariffs and timetables for each route. On the whole, road transport regulation is not unduly restrictive.

2.10 In recent years about one fourth of total Federal fixed in- vestment expenditureshave been in the transportationsector. This re- presents about NCrl,500 million (US$375million equivalent)annually, of which close to 50% was spent on road construction (Table 3). At the state level, the share of transportationin total capital expenditure is about the same and is almost entirely directed to road construction. In the past the balance of investmentsamong the various modes of transport has been generally adequate, but some investments,particularly for rail- way line construction,have been made where the yield has been extremely low. AU new railway line constructionshould be preceded by economic feasibilitystudies and provision to this end has been made in PA-2.

Highways

2.11 Details of the highway sector are given in Chapter 3.

Railways

2.12 The railway network comprises about 30,400 route km of which roughly 24,800 km are operated by a Federal company (Rede Ferroviaria Federal - RFFSA) and 5,600 km by a State company (Sao Paulo State Rail- ways). In addition 630 km are owned and operated by a Governmentmining company (Cia Vale do Rio Doce - CVRD) and carry mostly iron ore traffic. About 90Z of the network is meter gauge track. Between 1961 and 1968 railway freight traffic (excluding CVRD) increased from 10.4 billion ton km to 13.5 billion ton km, but passenger traffic declined from 18.0 billion passenger km to 13.4 billion passengerkm. In relative terms the railways have been losing traffic to other modes of transport. Be- tween 1961 and 1968 the rail share of total freight traffic movements de- clined from 18.2% to 14.4%, and of passenger traffic from 37% to about 8% (Tables 1 and 2).

2.13 In recent years railways operations- both Federal and State - have been characterizedby heavy financial deficits. In 1963 the op- erating ratio for RFFSA reached 358 with an operating deficit of US$237 million equivalent. Excess labor, obsolete equipment,maintenance of uneconomic lines and lags in tariff adjustmentswere largely responsible for these deficits.

2.14 Under PA-1 a series of measures was envisaged to improve RFFSA operations. The principal measures were: administrativereorganization, closing of uneconomiclines and stations,improvements in operatingef- ficiency (dieselization),reorganization of accounting,restructuring of tariffs, and reduction in personnel. Implementationof this program has progressedsatisfactorily (Annex B), with encouragingresults. The 1968 operating deficit was reduced to US$142 million equivalent (US$102million equivalentif concessionaryservices to Governmentare "normalized"i.e. priced at commercialrates) and the operating ratio - before normaliza- tion - reduced to 200. Further progress can be expected, provided strict redimensioningand rehabilitationpolicies are followed. The objectives and measures listed in Annex C are the main componentsof such policies and have been included in PA-2.

Ports

2.15 There are 35 ports of importancealong the coastline of Brazil. Total port traffic in 1967 was about 65.6 million tons of dry cargo. Of this, about 16.9 million tons were handled at Santos and 14.8 million at Rio de zaneiro. The specializedore port of Vitoria handled 6 million tons.

2.16 Overall supervisionof activitiesin the port and waterways subsector is in the hands of the National Departmentof Ports and Water- ways (DNPVN). This organizationis over-centralizedand lacks the flexi- bility of operation which is essential in the maritime trade. Decentral- ization of port administration,adoption of modern accountingprocedures and establishmentof cost-basedport charges were the main items included in PA-1 in relation to port operations. Progress has been slow but im- plementationof the recommendedmeasures has started (Annex B). The fur- ther steps to be taken in these fields and the introductionof systematic training of personnel are in PA-2 (Annex C).

Coastal Shipping

2.17 In terms of ton kilometers,coastal shipping carries about 13% of the country's total freight traffic. The present fleet is too large for the available cargo and generally overage. The Transport Survey re- commended the establishmentof fixed sailing schedules and the merger of shipping companies,but little progress has been recorded.

Air Transport

2.18 Because of its large size, Brazil is relying increasinglyon air transport. In recent years the annual passenger traffic growth rate has been 12.5%. The major commercialairline company (VARIG)has exten- sive domestic and internationalnetworks linking Brazil with other cities in South and North America, Western Europe and Africa. - 6 -

3. THE HIGHWAY SECTOR

A. The Highway Network; Characteristicsand Growth of Highway Traffic and the Vehicle Fleet

3.01 Brazil has a total road network of about 933,000 km of which 40,000 km are national and 114,000 km are state. The balance includes mainly earth roads and tracks - feeder roads and links between minor towns - under jurisdictionof the municipalities. About 16,500 km or 40% of the national network are paved, but only 19,300 km and 3,800 km of the state and municipal networks have concrete or bituminous pave- ment (Table 4).

3.02 Tables 5 and 6 show the relation between area, population, motor vehicle registrationsand length of paved and unpaved highways in each state. In all states, except Sao Paulo and Guanabara, only a small percentage of the national and state highway network is paved. In gen- eral there is a need to extend the road system and to improve existing roads, including the upgrading of the pavement.

3.03 Between 1961 and 1968 total freight traffic in Brazil increased from 75 billion ton km to 148 billion ton km, or at an average rate close to 10.5% p.a. Road traffic over the same period rose by approximately 12.5% p.a., while rail transport and coastal shipping grew only at 7.2% and 4.5% p.a. respectively. This was reflected in an increase of the road share of total freight traffic from 63% in 1961 to over 72% in 1968 (Table 1). Total intercity passenger traffic expanded from 49 billion passen- ger km in 1961 to 108 billion passenger km in 1968. Over the same period the road share of passenger traffic rose from 78% to 92% (Table 2). The total vehicle fleet in 1967 was estimated to be about 1.9 million cars and pick-ups, 53,000 buses, and 429,000 trucks. In recent years, the growth of the fleet has averaged 8% p.a., and in 1967 the vehicle density was one for every 28 persons, the third highest in Latin America. Prac- tically all vehicle needs are met by domestic production (225,000 p.a.) and future growth of the fleet is not expected to be limited by productive capacity. About half of the truck fleet is 5-9 tons capacity, gasoline powered; heavy diesel trucks of over 15 tons capacity account for only 7% of the truck fleet (Tables 7 and 8).

B. Highway Administration

3.04 The organizationsof the National Highway Department (Departa- mento Nacional de Estradas de Rodagem - DNER) and of one typical State Highway Department (DER) are shown on Charts I and III. The standard organizationalstructure for state Highway Departments recommendedby the Transport Survey is shown on Chart IV.

3.05 DNER, under the Ministry of Transport, is responsible for the administrationof the national highway network. It carries out its re- sponsibilitiesfor maintenance and constructionthrough 20 district of- fices in the states and federal territories. State highway departments -7 -

are similarly responsiblefor state networks. In view of the size of Brazil and the complexityof its road network, many of DNER's activities are too centralized. Furthermore,there is duplicationof services be- tween the National and State Highway Departments,especially in the more developed and populated states which have adequate highway organizations. To eliminate this duplication and reduce centralization,the Government has decided to gradually transfer maintenanceand constructionfunctions from DNER to the DERs. DNER will thus be able to concentrate on the planning, regulation and overall supervisionof the road network.

3.06 The first steps towards this new distributionof responsibil- ities have been taken. In 1968, Brazilian management consultants- Getulio Vargas Foundation- completed the first phase of the study of DNER's re- organization. Decree 64,242 and Decree-Law512, both passed in March 1969, have formally introducedDNER's new organization(Chart I), which is based on modern administrativeprinciples and places emphasis on DNER's planning functions. The second phase of the Vargas study started recently with the objective to define new and more efficientoperational procedures and me- thods. For this second phase, which requires specializedengineering ex- pertise, technical assistanceby the U.S. Bureau of Public Roads is to be provided under an existing USAID loan. The Governmenthas confirmedthe agreement reached for Loan 567-BR that DNER's reorganizationwould be im- plemented no later than 1971. Under PA-2, the Governmenthas expressed its intention to implement DNER's reorganizationwith U.S. BPR assistance.

3.07 Concurrentlywith DNER's reorganization,the strengtheningand reorganizationof DERs has commenced. During the two phases of the Transport Survey, reorganizationstudies were conducted for the main states in Brazil.* The objective of these studies was to increase the efficiencyof the DERs and thus prepare for a gradual transfer of DNER's maintenance and constructionfunction to the respectiveDERs.

3.08 Important steps to carry out the recommendationsof these studies have already been taken in several states (Annex D). Assuranceshave been given by the Government that in those states where project construction works are to be carried out on state and/or delegated national roads the DERs will be reorganized. Such reorganizationwill be based on the Trans- port Survey recommendationsand coordinatedwith the delegationof main- tenance functions for Federal roads (para. 3.09). Under PA-2 the Federal Governmenthas indicated that it will ensure that reorganizationof DERs will also be gradually carried out in all states covered by the Transport Survey.

3.09 Proceeds of the uniform road tax are earmarked for maintenance purposes (para. 3.21). To back the transfer of maintenance responsibil- ities by adequate funding, DNER has stated its intention to allocate its

* The study for DER Sao Paulo was financed by USAID and carried out separately but was concurrent with reorganization studies carried out for the other states. - 8 -

share of tax collectionsto those states undertaking to maintain the na- tional network. The Governmenthas agreed that delegationof maintenance functions and transfer of necessary resourceswill be carried out in those states where project constructionworks will be undertakenon state and/or delegated national roads. Under PA-2, the Governmenthas stated that such delegationwill be extended gradually to all main states.

3.10 In the future DNER will exercise much closer supervision over the planning and financingof state highways. Decree Law 512 which re- organized DNER, has given it necessary legal powers. This is in line with the Government'snew policy to gain control over local governments capital expendituresby insisting upon a review of local governmentpro- grams prior to capital transfers (EconomicReport IBRD WH 195a). In the future there will thereforebe the basis to ensure that economic criteria are followed in the selection of new highway investments. DNER's control has, however, not yet been exercised,largely due to the lack of proper staffing in the planning departmentwhich employs only 8 engineers and has no economists. Under the proposed project, strengtheningof DNER's planning capacity is to be arranged (para. 4.08) and one of the objectives of PA-2 is that DNER make use of its legal right to control state capital expendituresfor roads.

3.11 In recent years a serious obstacle to efficient highway admin- istrationhas been the chronic understaffingof DNER resulting from the low salaries offered and the freeze on Government recruitment. In 1969 new and substantiallyhigher salary scales were adopted for DNER and limi- tations on recruitmentof professionalswere relaxed. This should enable DNER to attract and keep capable personnel.

C. Highway Engineering

3.12 Design standards,agreed by the Bank and adopted for the First Highway Project (Loan 567-BR), have now been legalizedas general design standards for the entire country (Tables 9 and 10). They have been used for the engineeringof all highway works included in the project.

3.13 The Transport Survey, which was carried out by foreign consult- ants assisted by local counterparts,has had a major impact on Brazilian engineeringpractices by introducingsystematic economic evaluationof transportationprojects. Drawing on this experience,able consulting firms have been established in nearly all of the major states of Brazil. All studies* for the preparationof the proposed project were carried out by local consultants.

3.14 The regulatoryprovisions for maximum motor vehicle weight and dimensions are satisfactory. The maximum axle load is 10 Tons for single

* (Except for highway BR 324, for which foreign consultantswere em- ployed, see paras. 4.05 and 4.14) axles and 17 Tons for tandem-axles. In recent years the enforcementof weight regulationshas improved,but it is still unsatisfactory. DNER has now 41 weighing stations installedor on order. The Governmenthas confirmed that vehicle regulationswill be enforced on the whole national network, as well as state networks in those states where project works would be carried out on State and/or delegated national roads (Minas Gerais, Santa Catarina and Rio Grande do Sul).

D. Highway Construction

3.15 In the past, shortages of funds often delayed payments to con- tractors and it was difficult for DNER to enforce work schedules. Fur- thermore, the shortage of DNER's personnel often led to inadequatesuper- vision. As a result, quality of constructionwas often poor and long extension of contractualwork periods was common. Although the situation is somewhat improved, it is still not satisfactoryand the Governmenthas decided to adopt the policy of employing consultantsto reinforceDNER's limited supervisorystaff. Provision to this effect is included in PA-2.

3.16 The local constructionindustry is well developed,and its meth- ods and equipment are up-to-date. Prequalificationof contractorsfor works under the First Highway Project showed that over 25 firms have the tech- nical and financial capacity to handle large scale highway contracts.

3.17 In the last five years the Brazilian constructionindustry has carried out highway works amounting to US$500-600million equivalentper year. Under the most limiting conditions,i.e., assuming no foreign par- ticipation,construction included in this project would add only 15% to the current volume of work. No constructioncapacity shortage is expected.

3.18 In the past, DNER limited itself to reviewing the technicalca- pacity of contractors,giving little attention to their financial capac- ity. With the First Highway Project, internationalpractices regarding bidding and contractingwere introducedin Brazil. It is now DNER's pol- icy gradually to eliminate former practices,extend the use of prequali- fication of contractors,and call for bids based on contractor'sunit prices.

E. Highway Maintenance

3.19 Maintenance has long been neglected in Brazil. The lack of proper organization,equipment and funds have made it difficult to keep roads at a suitable level of traffic serviceability. However, in the last five years USAID has given considerablefinancial assistance to several states for the purchase of new equipment,and marked improvements in the operations can now be observed.

3.20 Consultants for Phase I and II of the Transport Survey were entrusted with maintenance studies for all states concerned. All reports are now available and include recommendationsfor improvementsin mainte- nance methods and operations,procurement of equipment and materials, preparation of general maintenanceprograms and required organizational - 10 - changes. The consultantshave also prepared estimatesof maintenance costs and developedappropriate maintenance accounting systems. This will provide the highway managementwith a valuable tool for controlling and improving the efficiencyof maintenanceoperations.

3.21 Decree Law 999 of October 1969 made the road tax on vehicles uniform for the whole country. A charge equivalent to a maximum of 2% of the assessed value of the vehicles will now be levied annually, the pro- ceeds to be earmarked for maintenanceand distributed40% to DNER and 60% to states and municipalities. Tax collectionsare expected to total about US$40 million in 1970 and to grow at 8% p.a. thereafter. The provisionof adequate resourcesby the road tax, as well as the combiningof all mainte- nance functions in the hands of state authorities,should result in a con- siderableimprovement of maintenanceoperations. During loan negotiations the Government confirmed that it will properly maintain the whole national network, and the state networks in those states where project works will be undertaken on state and/or delegated national highways (Minas Gerais, Santa Catarina, and Rio Grande do Sul).

F. Highway Financingand Planning

3.22 The main source of revenues for highway purposes is the federal tax on fuels and lubricants (Imposto Unico Sobre Combustiveise Lubrifi- cantes - IUCL). In 1968 proceeds from this tax totalled about NCr 1,840 million (US$460million). Close to 80% of the collectionsare placed into the National Road Fund. The remainderis shared between the Government Oil Monopoly (Petrobras),the railways and the Ministry of Mines and Energy. The Road Fund is distributedto DNER (50%), the DERs (40%) and municipalities(10%). The allocation among states is based on population, area, fuel consumptionand production of crude and refined oil. Resources from IUCL can be used to cover capital or current expenditures.

3.23 Three other federal taxes, set apart for highway purposes, are levied on road users: the road tax (para. 3.21), the vehicle insur- ance tax (10% of insurancepremiums), and a tax on inter-urbanbus fares (5% of the fare). The road tax is earmarked for highway maintenanceand the insurance tax for road safety. The states and municipalitiesalso impose other taxes and fees but total receipts from these are relatively small.

3.24 Earmarkedresources are supplementedat the state and municipal levels by budgetaryallocations. Large federal budgetary appropriations which characterizedthe early sixties have now been almost totally dis- continued.

3.25 To execute all high priority road projects identified during the transportationsurvey and shown in the Master Plans, additional re- sources amounting to NCr 1,020 million (US$249million equivalent)should be secured each year (Tables11 and 12). Under the proposed project, detailed engineeringstudies for 2,290 km and feasibilitystudies for an additional 3,814 km of highways will be undertaken (para. 4.07). This - 11 - will ensure preparation of projects for which Bank financingcould be consideredin 1971 and 1972. If Bank participationwere to be based on the present cost sharing formula (40% of constructioncosts), commitments in 1971 and 1972 may be of the order of US$80-100 million equivalentin each year. If the preparationsbeing made were to result in such lending, by 1971 Bank disbursementwould cover about 40% of the deficit.

HighwayaPlanning

3.26 A National Transport Plan, covering all modes of transport,was published in 1964. It is based on a 25-yearprogram which, in the high- way field, provides for the constructionof some 95,000 km of roads. With- in this program there is a PreferentialPlan which was updated in 1967 and which lists about 25,000 km of priority roads. Both of these plans are very broad and do not unduly restrict the more meaningfulshorter term programming. All these documents are due for revision in 1970.

3.27 In 1967 a 3-year investmentbudget (1968-70)was prepared which forms the basis for annual budgets. Investmentprograms in the 3-year budget and in recent annual budgets are essentiallybased on Transport Survey Master Plan priorities. The main exceptions are for low cost pene- tration roads with modest design characteristics,planned to open up virgin territory.

3.28 In order to update and continue the Master Plans and to ensure that economic prioritiesguide highway investmentdecisions, it will be necessary to (a) improve the present data collectionand processingsys- tem, (b) establish within DNER a central investmentreview mechanism for both national and state projects (para. 3.10) and (c) strengthenDNER's planning office. Under the proposed project, assistance will be provided to this end (para. 4.08).

4. THE PROJECT

A. General Description

4.01 The proposed project, identifiedon the basis of Highway Master Plans prepared during Phases I and II of the Transport Survey, consists of:

(1) The construction, including paving, of a total of 872 km of highways in the states of Bahia, Minas Gerais, Goias, Santa Catarina and Rio Grande do Sul (see Maps 1, 5, 7, 8, 10, 11);

(2) The improvement and paving of a total of 1,267 km of highways in the states of Piaui, Ceara, Bahia, Espirito Santo, Rio de Janeiro, Minas Gerais and Santa Catarina (see Maps 1, 3, 5, 6, 7, 10); - 12 -

(3) Detailed engineeringand constructionsupervision for the above highways; and

(4) Additional consultingservices to:

(a) carry out detailed engineeringfor 2,290 km of selected road sections;

(b) carry out feasibilitystudies for 3,814 km of selected road sections;

(c) strengthen the planning departmentof DNER; and

(d) improve methods and procedures of construction supervision.

4.02 The lists of roads proposed for construction,detailed engineer- ing and feasibilitystudies are given in Tables 13, 14 and 15, respective- ly. About 50% of the roads included for construction are located in the northeast. On the other hand, the program of detailed engineering and fea- sibility studies gives increasedemphasis to the developmentof Brazil's western regions. This includes the states of Mato Grosso and Goias with a total area of 1.8 million km2 most of which is still sparsely populated, but has been identifiedby a recent Bank agriculturalmission as of high potential, especially for rice production and cattle raising. The main barrier to developmentin the western region is the lack of transportation to distant markets, and the proposed project includes studies for important trunk roads in this area.

B. Highways to be Constructedand/or Paved

4.03 The essentialcharacteristics of the highways included in the project for constructionare given in Table 13. More detailed descriptions of the roads are given in Chapter 5 -- Economic Evaluation -- and Annex E.

C. ConsultingServices for Design and ConstructionSupervision

4.04 Detailed engineeringstudies are complete for all roads proposed for construction. The surveys, soil studies, geometricand structural de- signs, and drafting of specificationswere carried out in accordancewith modern engineeringprinciples and the quality of the work is satisfactory.

4.05 With the exception of highway BR324 (para. 4.14), all detailed engineeringstudies have been carried out by Brazilian consultants. These consultantsare listed in Annex F.

4.06 To establishcontinuity of responsibility,DNER has agreed that the consultantsresponsible for the design of highways proposed for con- structionwould also be employed for supervisionof the construction(see also para. 4.09). Signing of the consultants'contracts will be a condi- tion for loan effectiveness. - 13 -

Additional ConsultingServices

4.07 With a view to preparing further highway projects suitable for Bank financing,detailed engineeringstudies for about 2,290 km and feasi- bility studies for an additional3,814 km of highways have been included in the project. Estimated constructioncosts would be about US$229 mil- lion and US$320 million, respectively(Tables 14 and 15)*. These studies should result in constructionprojects being ready for financingin 1971 and subsequentyears.

4.08 The planning departmentof DNER is understaffedand needs to be strengthened(para. 3.10). DNER is planning to engage a team of at least five Brazilian transport economists. In addition,under the present pro- ject, the services of four foreign expertswill be secured, namely, two transportation economists,one programmingand budgeting expert and one traffic engineer. This team will assist in (a) establishinga comprehen- sive data collectionsystem, (b) updating and continuingthe Transport Survey Master Plans, (c) screening federal and state investmentprojects, (d) coordinatinginvestment programming and annual budgeting and (e) train- ing DNER staff. Foreign experts will be recruited individuallyafter Bank approval for a minimum of two years.

4.09 Project works will be supervisedby the consultantsresponsible for the design (para. 4.06). To establish appropriate supervising proce- dures and to ensure coordination between the various consultant teams, DNERwill form a group of experienced engineers within its construction department. To assist this group, a team of five experienced engineers will be provided by a foreign consulting firm for the period required to carry out construction of the project roads.

D. Cost Estimates and Financing

4.10 The total cost of the project is estimated at US$255.1 million equivalent, including allowances for quantity contingencies. A summary of the project cost and Bank participation follows:

* See footnotes to Table 15.

- 14 -

US$ (Millions) NCr (Millions) Equivalent Bank Participation* Local Foreign Total Local Foreign Total US$ Millions Equiv.

1. Construction and paving of 872 km of highways 311.4 98.4 409.8 76.0 24.0 100.0 40.0 (40%) 2. Improvement and paving of 1,267 km of highways 290.2 91.7 381.9 70.8 22.4 93.2 37.3 (40%) Sub-Total 601.6 190.1 791.7 146.8 46.4 193.2 77.3 Quantity Contingencies (about 10%) 60.0 19.0 79.0 14.4 4.6 19.0 7.6 661.6 209.1 870.7 161.2 51.0 212.2 84.9 3. Consulting Services for: (a) Design for items 1 and 2 30.0 1.2 31.2 7.3 0.3 7.6 0.3 (FE)*** (b) Supervision for items 1 and 2 60.2 2.5 62.7 14.7 0.6 15.3 6.2 (40%/FE)*** Contingencies (10%) (for item 3(b)) 5.8 0.4 6.2 1.4 0.1 1.5 .6 Sub-Total Item 3 96.0 4.1 100.1 23.4 1.0 24.4 7.1 4. Additional Consulting and Expert Services for: (a) Detailed Engineering of 2,290 km of Highways 37.7 - 37.7 9.2 - 9.2 3.7 (40%) (b) Feasibility Studies of 3,814 km of Highways 32.4 - 32.4 7.9 - 7.9 3.2 (40%) (c) Strengthening DNER's Planning (72 man-months) .4 1.6 2.0 0.1 .4 .5 .4 (FE)** (d) Improving DNER's construction supervision (120 man-months) .8 2.9 3.7 0.2 .7 .9 .7 (FE)** Sub-Total Item 4 71.3 4.5 75.8 17.4 1.1 18.5 8.0

* See also para. 4.18

** FE: ForeiRn Exchange Component

*** For Item 3(a) the foreign exchange costs relate only to the desirn of highway BR324 for which foreign consultants were employed.

For Item 3(b) Bank participation would cover:

- 40% of costs of services rendered by local consultants:

- foreign exchange component of the costs of services rendered by foreign consultants.

- 15 -

4.11 The estimatesof constructioncosts are based on July 1969 estimates converted at the then official exchange rate (Table 13). Unit prices are based on estimates of the consultingengineers and checked against unit prices from contractsrecently awarded for similarworks. Quantities were taken from detailed engineering studies.

4.12 A 10% contingencyallowance has been added to the construction costs for quantity increases. Loan disbursementsare to be based on the dollar value of the works at bid date (para. 4.26). The short period allowed between preparationof the estimates and bid date, and the Gov- ernment's flexible exchange rate policy eliminate the risk that unit prices expressed in U.S. dollar at bid date would be artificallyinflated. Price contingencieswould thereforebe justifiedonly to cover "real" (i.e. related to US$) increasesin prices during construction. However, under the proposed disbursementprocedure, covering the increases in in- ternationalprices would require the definitionof a sliding Bank partici- pation formula. This is regarded as unduly complicatedand is not recom- mended. Consequently,no price contingencieshave been allowed for in the loan and, as a result, Bank participationmay be slightly less than the apparent 40% (para. 4.18).

4.13 The foreign exchange componentfor constructionhas been esti- mated for each highway on the basis of contract awards to (a) local firms or (b) foreign firms. The range is from 15% of the total construction costs if local contractors,using primarily local equipment,were employed to 45% if all work was carried out by foreign contractors. Under the First Highway Project several foreign contractorsshowed interest and one con- tract was awarded to a joint venture with a foreign partner. Considering the improvement of bidding and contractingprocedures, the size of the program and the introductionof packaged lots (para. 4.23), it can reason- ably be expected that an increasednumber of foreign contractorswill par- ticipate. Assuming therefore that one fourth of the constructionwould go to foreign contractors and three fourths to local contractors,the foreign exchange component would be about 24%.

4.14 The cost of detailed engineeringfor project roads has already been borne by DNER. The foreign exchange costs are for the employmentof foreign consultants (X. Dorsch - Germany) for the design of highway BR 324. Since this project was prepared under the close supervision of the Bank, hIeloan will provide retroactive financing for the foreign exchange com- ponent of the costs incurred since July 1, 1969. This is estimated at about US$300,000.

4.15 The cost of construction supervision has been estimated on the basis of the arrangements described in paragraph 4.06. The foreign ex- change costs relate to the employmentof foreign consultantsfor the super- vision of constructionof highway BR 324.

4.16 The costs of the additionalconsulting services have been es- timated on the basis of: - 16 -

(a) Contracts recently awarded in Brazil for the preparation of feasibilityand detailed engineeringstudies, and

(b) Costs experiencedin recent Bank contracts for experts of international repute.

4.17 The total foreign exchange component of the project including constructionand consultingand expert services is about 21%.

4.18 Bank participation in the project will cover the foreign exchange component of services rendered by foreign consultants and 40% of the costs of consulting services rendered by local consultants, and of constructionworks. The employmentof local consultantswill further strengthenengineering consulting capacity in Brazil and financing of the related local currency expendituresis therefore consideredjustified. Total foreign exchange costs of the project will be US$53.1 million, which is about 53% of the amount of the loan; the balance of US$46.9 million will finance local currency expenditures. In summary, Bank participation will be as follows:

(i) Forty percent of construction costs;

(ii) Foreign exchange component (35%) of the costs of consultingservices for detailed engineeringof (i) above (para. 4.14);

(iii) Forty percent of the costs of constructionsuper- vision when services are rendered exclusivelyby Brazilian consultants and foreign exchange component (35%) in the case of BR 324 for which foreign con- sultants will be employed (para. 4.15);

(iv) Forty percent of costs of consultingservices for preparation of feasibility and detailed engineering studies; and

(v) Foreign exchange component (70%) of the costs of consultants to assist DNER in planning, and in con- struction supervision.

4.19 Constructionis expected to commence during the second quarter of 1970 and to be completed towards the end of 1973. Feasibilityand detailed engineeringstudies will be started in 1970. Individual con- sultants for assistancein planning and in constructionsupervision are expected to be retained for 2 and 3-vear periods respectively. On this hasis, the annual breakdown between estimated Government exoenditures and those covered bv the Bank will be as follows: - 17 -

Bank Total Expenditures Gov. Expenditures Participation (US$ million) (US$ million) (US$ million)

1969 6.7 6.7 -

1970 40.0 23.8 16.2

1971 95.0 56.9 38.1

1972 79.4 47.6 31.8

1973 34.0 20.1 13.9

Total 255.1 155.1 100.0

E. Exeeution of the Project

4.20 Execution of the project will be the responsibility of the DNER for national highways and of the correspondingDER for state highways. The DNER will delegate authority to the DERs for three highways which belong to the national as well as to a state highway network. Table 13 shows the highway department responsiblefor each highway.

4.21 Prolect agreementsbetween the Bank and states responsible for constructionof state highways or delegatednational highways will be signed not later than the loan agreement. In addition,subsidiary agree- ments will be concludedbetween the federal governmentand DERs represent- ing those states where a) constructionof state or delegatednational high- ways is included in the project, and b) feasibility studies or detailed engineering are to be conductedon state or delegatednational highways. Satisfactoryconclusion of these subsidiary agreementswill be a condition for loan effectiveness. i

4.22 Contracts for the project works will be let on the basis of in- ternationalcompetitive bidding in accordancewith the Bank's established bidding procedures. The consultantshave assisted the Governmentin the preparation of prequalification, bidding and contractingdocuments which are in agreementwith the Bank's guidelines. They will also assist the Government in the analysis of bids and be responsiblefor the supervision of construction. The Government is proceedingwith the prequalification of interestedbidders.

4.23 The project includes the constructionand paving of a 900 km continuous stretch of BR 101 in the states of Bahia and Espirito Santo. To take advantage of economiesof scale through the use of larger con- tractors,DNER has agreed to combine constructionlots in packages and give bidders a choice to bid on packages or single lots. The values of these packages range from about US$8 to 14 million. - 18 -

4.24 In connection with the First Highway Project, legislationhas been made effective regarding (a) the duty free import of construction equipment for the contractualperiod of construction,(b) price escala- tion formula and (c) bidding and contractingdocuments. No further action in these respects is required.

4.25 The Government is proceedingwith the acquisitionof right of way and constructioncontracts will not be awarded prior to legal expro- priation. This was confirmed during loan negotiations.

F. Disbursement

4.26 The disbursementprocedures adopted by the Bank for construction and paving works under the First Highway Project will apply to this pro- ject. Disbursementswill be made on the basis of unit costs, expressedin dollars at the official exchange rate applicable at the date of bid open- ing. Contractorswill be paid in Cruzeiros and the Government will from time to time request the Bank to reimburse the agreed percentageof ex- penditures,arrived at by the conversion of physical units of work into dollars at the appropriatedollar unit prices.

4.27 Brazilian consultantswill be paid in Cruzeirosby DNER, and the Governmentwill from time to time request the Bank to reimburse the agreed percentage of expendituresactually incurred.

4.28 Foreign consultantsand experts will be paid by DNER in Cruzeiros in accordancewith contractualschedules. The Government will from time to time request the Bank to reimburse the foreign exchange componentexpressed as a percentage of expendituresactually incurred as shown in paragraph 4.18.

4.29 The loan will be to the Federal Government. DNER will administer a revolving fund for payments to contractorsand consultants. The Federal Governmentwill finance the cost of constructionand consultingservices on national and state highways included in the project and the states will reimbursesuch amounts as are expended on the state highways. The revolv- ing fund will be replenishedwith the Bank's reimbursementfor paymeents made and with the Federal and state Governments'contributions. During loan negotiations,assurances were obtained that DNER will make deposits in the revolving fund as required so that at the beginning of each calen- dar month the amount of the revolving fund will be at a level sufficient to cover one month of forward project cost, in accordancewith work sched- ules. A revolving fund with an initial deposit by DNER of US$ 2.5 million equivalent in a blocked account at a suitable Brazilian bank was agreed with the Brazilian authorities;its establishmentwill be a conditionfor loan effectiveness.

4.30 Legislationregarding payment of foreign experts and repatriation of profits and overheadsof contractorsand consulting firms has changed repeatedly in recent years. To remove ambiguitiesthe current legislation has been reviewed and the Governmenthas submitted a legal opinionwhich confirms that: - 19 -

(a) Levies on contractors'profits -- includingretention for remittancesabroad -- would correspondto about 50% of profits. Retentionon profit remittanceswould have the effect of slightly favoring local bidders by about 2-1/2% of total bid price; and

(b) A flat 25% retention is applied to remittancesabroad by consulting firms in lieu of income tax.

The 50% tax rate on contractors'profits is in line with corporate tax rates in most developed countries. Neither this rate of taxationnor the slight favor that the rate gives to local bidders should deter participa- tion of foreign bidders.

4.31 Any surplus of funds remainingin the loan account on completion of the project should be cancelled.

5. ECONOMIC EVALUATION

A. Introduction

5.01 With the opening of vast areas in the interior and the begin- ning of their economic development,demand has greatly increased for high- way transportto connect them to port and large urban areas on the coast. At the same time, rising trade among cities located in the more developed eastern states has meant large increases in highway transport volumes in these areas, and resulted in pressure to improve and extend the present road system.

5.02 To permit rational choice among investmentalternatives, High- way Master Plans were prepared under the TransportSurvey (see Chapter 2) on the followingbases:

(a) Study of present traffic volumes flowing between the country's major zones conducted on the basis of an analysis of present production and consumptionpatterns, traffic counts and origin-destination surveys;

(b) Forecasts of traffic growth to 1976 based on projected production and consumption patterns and extrapolation of past trends for passenger traffic;

(c) Allocation of the various classes of traffic to that mode offering lowest total transport cost, taking into consideration expected operationalimprovements in railway transportand coastal shipping;

(d) Calculationof estimatedcosts of highway improvementsand new constructionneeded to accommodateprojected traffic; - 20 -

(e) Evaluation of economic benefits to be derived from proposed investments through lower vehicle operating costs and high- way maintenance costs; and

(f) Calculationof benefit/costratios, determinationof optimum years of opening and listing of investmentpriorities.

5.03 The roads included in the proposed project for construction were selected among higher priority roads in the Master Plans. The con- sultants responsible for detailed engineering for these roads studied alternative alignments wherever warranted, and final alignment selections were based on economic criteria. Preparatorystudies on the roads pro- posed for detailed engineeringunder the project were selected from the Master Plan and feasibilitystudies carried out by consultantsemployed by DNER (Table 14), and those for feasibilitystudies directly from the Master Plans priority listing.

B. The ProJect Roads

5.04 Regional descriptions and the characteristics of the most im- portant project roads follow:

In the Northeast Region*

5.05 The Northeast region extends over 1.5 million km2 or a little over 18% of the national territory. The region's population is estimated at 26.1 million or over 29X of Brazil's total. This is one of the poorest regions in Brazil. Its population is engaged mainly in agriculturalac- tivities under generallydifficult conditions,including poor quality soils and scarcity of water. In recognitionof these difficulties,a regional developmentagency (Superintendenciado desenvolvimentodo Nordeste - SUDENE) was created in 1959 to promote growth in the produc- tive sectors of the regional economy. SUDENEadministers both federal budgetary appropriationsfor infrastructureinvestments and fiscal in- centives for industrialdevelopment. The main agriculturalproducts in the region are sugar cane (23.2 million tons in 1966), manioc (7.4 mil- lion tons), timber (41.0 million m3). Cattle and pig raising is also importantwith herds numbering respectively17.5 and 15 million head. The State of Bahia is the country'smain producer of cacao, 96% of the national total, and contributesan importantshare of its production of tobacco. In recent years, largely as a result of SUDENE's activities, but also through efforts by other Governmentagencies (e.g. Banco Nacional do Nordeste - BNB), industrialproduction has expanded rapidly

* The Northeast Region includes the following states: Maranhao, Piaui, Ceara, Rio Grande do Norte, Paraiba, Pernambuco,Sergipe, Alagoas and Bahia. - 21 -

in the region, particularlyin the state of Bahia. An important indus- trial park is being constructedin Aratu -- north of Salvador, the capi- tal of Bahia -- which will include processingindustries and steel plants. Present industrialproduction in the region concentrateson metallurgical and cheiwicalproducts, textiles and processed foodstuffs.

5.06 Under the proposed project about 1,065/Km of highways located in the Northeast revion are proposed for construction. In addition de- tailed engineeringwould be prepared for 612 km and 960 km would be studied for feasibility. The two most importantprojects proposed for construction are BR 101 and BR 324. Highway BR 101 is a main north south trunk road extending over 4,000 km along the coast and linking the coun- try's main urban centers. The section included in the project totals 1,012 km of which close to 75% is located in the Northeast region. The balance is situated in the Center-Eastregion. Project works on this road would complete the paved connectionbetween Salvador and Rio de Janeiro. Highway BR 324 is the only entrance to Salvador and carries heavy traf4fic, particularlyclose to the city (1968 ADT 6,300 with about 50% trucks). Design calls here for a four-lanedivided highway with limited access. A preliminarystudy is underway which will delimit the Salvador MetropolitanArea on the basis of economic and social factors, and will recommend an administrativestructure and a scope of work for future urban planning studies. The preliminarystudy is due for completionin late 1969 and the comprehensiveplanning studies will extend over several years. Heavy congestionand high rate of accidents characterizethe pres- ent two-lane highway (BR 324). Construction,therefore, cannot await com- pletion of MetropolitanPlans.

5.07 The proposed project also provides for detailed engineering studies on the 306 Km continuoushighway extending north of the port of Maceio in the direction of Campinha Grande and Natal (BR 104). This high- way serves the center of the Northeast region and will become one of its major outlets for the flow of goods to industrial zones in the south. Other highways included in the project are listed in Tables 13-15 and more detailed descriptionsare given in Annex L.

In the Center-East Region*

5.08 This region has an area of 0.7 million Km2, only about 1.2% of the country's total, but it contains a populationof 21.5 million or 24% of the national total. The resource endowment is generally favorable and main activitiesare in agriculture,industry and mining. The prin- cipal crops include sugar cane (15.7 million tons in 1966), rice (0.9 million tons), corn (2.0 million tons), beans (0.3 million tons), coffee

* UJnderBrazilian administrative definition this region includes the states of Esnirito Santo, Rio de Janeiro and Minas Gerais. For the purposes of this descriptionthe state of Guanabara,which is located in the center of this region, has also been included. - 22 -

(0.6 million tons), and citrus fruits (2.5 million tons). Timber exploitation (28.7 million m 3), cattle and pig raising (24% of the country's total herd) supplement agriculture activities. In the industrial sector the region's most important products are steel and chemicals, electrical ap- pliances, processed foodstuffs and textiles. Mining is centered on , the capital of Minas Gerais, where 23 million tons of iron ore are extracted annually and about half of the country'ssteel is pro- duced.

5.09 The list of project roads in this region is shown in Tables 13- 15 and more detailed descriptionsare included in the Annex E. Proposed project roads are all of regional interest. The most important among these roads is the Rio de Janeiro - section (BR 135) which is proposed for feasibilitystudy, and is one of the most travelled routes in the region (ADT of up to 25,000 close to Rio de Janeiro). The combina- tion of poor alignment and high traffic volumes results in heavy traffic congestion and a new alignment to appropriatestandards is urgently re- quired.

In the Center-WestRegion* 2 5.10 The total area of this region is about 1.9 million km , 22% of the national territory. Population is estimated at about 4 million, a little over 4.5% of the total for Brazil, and average density is only 2 persons per Km2. This is one of Brazil's most recently settled regions and a large number of new towns are developing rapidly along the routes recently opened in virgin territory. The climatic and soil conditions are favorable for high yielding agriculturalactivities and cattle rais- ing. The region's main products are rice (1.3 million tons in 1966), sugar cane (1.8 million tons) and manioc (1.8 million tons). Timber pro- duction amounted to 9.2 million m3 in 1966. Cattle total 20 million head. Most of the region's agriculturalproduction is exported to the industrial states, particularlySao Paulo.

5.11 Under the proposed project detailed engineeringstudies would be conducted on the 254 km most southern section of highway BR 153 -- the Belem-Brasiliahighway. Spectaculardevelopment has been triggeredby the constructionof this highway to gravel standards and the resulting heavy traffic on the southern section makes improvementand paving neces- sary. A 1,400 km program of feasibilitystudies is envisaged which would cover the region's main trunk roads. Other project roads in this region are described in Tables 13-15 and Annex E.

In the Far-South Region**

5.12 The Far-South region has a total area of 0.6 million km (about 7% of the national territory)and a population of roughly 16.5 million

* This region includes the States of Mato Grosso and Goias. ** This region includes the States of Parana, Santa Catarina and Rio Grande do Sul. - 23 -

2 (18.5% of the national total), averaging29 persons per km In the south- ern region, agricultureand cattle raising are importanteconomic activi- ties as well as lumberingand wood processing. In the State of Parana timber production (15 million m3 in 1966) accounts for about 12% of Brazil's total, and wood processingis the main industry in the State. Agricultural productionin 1966 included sugar cane (3.1 million tons), coffee (1.2 mil- lion tons), rice (0.5 million tons), corn (2.0 million tons) and manioc (1.6 million tons). In addition, 6% of the country'scattle is raised in Parana. In the State of Santa Catarina,agriculture accounts for half of the state's income, with the most importantproducts beinRg pine and tobacco,which re- present 40% and 32% of national productionrespectively. Other important products are citrus fruits (0.5 million in 1966), and manioc (2.4 million tons). In the State of Rio Grande do Sul, agriculturecontributes about 40% of the state income and employs more than 50% of the active population. The most important products in 1966 were tobacco (37% of national production), corn (2.3 million tons) used primarily for animal consumption,as well as wheat (0.5 million tons), rice (1.2 million tons), beans (0.2 million tons), oranges (O08 million), manioc (3.2 million tons), grapes for wine (66% of national production)and timber (14 million m3). The State also raises 12% of the country's cattle. A part of the agriculturalproduction of the South- ern Region is consumed in the state capitals of , Florinapolis and , and the surplus is exported north to Sao Paulo and Rio de Janeiro.

5.13 Project roads in the southern states are mostly of regional im- portance and carrying heavy traffic - ADT up to 1,300 vehicles. They are describedin Tables 13-15 and Annex E.

C. Benefits from the Project

5.14 Most of the quantifiablebenefits attributableto the project roads are in the form of road user savings derived from a lowering of vehicle operating costs. These savings stem from the differencein op- erating costs on present gravel or earth roads, and on the projected paved roads, as well as from distance reduction for both normal and diverted traffic. Estimates of these benefits were made during the preparationof Highway Master Plans, and were updatedby DNER to reflect present condi- tions in Brazil (Table 17). They were based on theoreticalcomputations checked against trucking companies'records, and test runs over different types of roads for typical Brazilian vehicles. In the case of Route BR-324, which has urban characteristics,benefits were derived primarily from re- duction in congestionresulting in lower vehicle operatingcosts, as well as time savings reflectedin the wages of drivers of commercialvehicles and travellerson business trips.

5.15 Additionalbenefits would be derived from the difference in maintenance costs of well constructed paved roads, and existing gravel or dirt roads. While fixed maintenance costs of paved roads are higher than corresponding costs for gravel or dirt roads, variable costs increase faster with rising volumes of traffic for gravel and dirt roads than for paved roads. - 24 -

5.16 In addition to the quantifiablebenefits of the project, a num- ber of benefits that are difficult to quantify can also be attributedto the proposed road improvements. The paving of the project roads will lead to reduced travel time and increased comfort, which in turn will lead to faster turnover of capital, to lowering of inventory costs and to less spoilage of fresh fruits and vegetablesand less loss of poultry, pigs and cattle during transport. In addition, the improved roads will facilitate migration from the densely populated areas along the coast, to the newly opened territoriesof the interior, which have large developmentpotential but lack adequate human resources.

5.17 For the project roads proposed for constructionand/or paving the estimated net benefits, discountedover a 20 year economic life of the roads, give internal rates of return ranging from 17 to 47% (Table 19). The sensitivity of internal rates of return to variations in con- struction costs, vehicle operating costs and maintenance costs was tested (Table 19). Under the most pessimisticassumptions, rates of return would range from 12 to 38%. The roads proposed for detailed engineering,and those for feasibilitystudy within the project, have been selected from the Master Plans which have been closely examined by the Bank. At this stage of evidence as to costs and benefits, each road can be expected to have a rate of return in excess of 15%. The exact returns, which in many cases can be expected to greatly exceed this figure, will be deter- mined on the basis of the additionalpre-investment work proposed under the project. The roads are of priority and can be expected to lead to acceptableprojects for future Bank financing consideration. Their in- clusion in this project is, therefore,fully warranted.

6. RECOMMENDATIONS

6.01 Prior to loan negotiationsthe Governmentsubmitted to the Bank a Plan of Action (PA-2) outlining the measures required to bring about further improvementsin the transport sector. This is a suitable basis for proceedingwith the proposed loan.

6.02 During loan negotiations,agreement was reached with the Gov- ernment on:

A - The followingmain points to be included in the Loan Agree- ment:

(a) The implementationof DNER's reorganization(para. 3.06);

(b) The delegationof maintenancefunctions (para. 3.09);

(c) The satisfactory maintenance of national roads (para. 3.21): - 25 -

(d) The employment of consultantsfor supervising the con- struction of project roads (para. 4.06);

(e) The employment of Brazilian and foreign transport experts to reinforceDNER's planning department (para. 4.08); and (f) The establishmentof a group of Brazilian and foreign constructionengineers to improve DNER's construction supervision (para. 4.09);

B - The followingmain points to be included in Project Agreements:

(a) The reorganizationof DERs (para. 3.08);

(b) The delegation of maintenance functions (para. 3.09); and

(c) The maintenance of state roads (para. 3.21).

6.03 Conditions for loan effectivenesswill be:

(a) The signing of consultants'contracts for the supervision of Project works (para. 4.06);

(b) The establishmentof a revolving fund in a blocked bank account (para. 4.29); and

(c) The conclusion of subsidiary agreements between the Federal Government and the DERs representingthose states where construction,feasibility studies, or detailed engineer- ing studies are to be carried out under the project on state and/or delegated national roads (para 4.21).

6.04 The project provides a suitable basis for a Bank Loan of US$100 million equivalent. On the basis of the average economic life of road con- struction works and length of constructionperiod, the appropriate term would be 25 years, including a four-year period of grace.

March 17, 1970

TABLE1

BRAZIL

SECOND HIGHMAY CONSTRUCTIONPROJECT

Freight Transportby Mode of Transport,1961-1968 (billionsof net ton-km)

Railways Coastal 2 gsAir Year Total Total Federal State Shipping-,/VRD'Highways Transport-

1961 74L.4 13.6 7.5 2.9 3.2 13.9 46.8 0.1

1062 82.7 14.4 7.7 2.8 3.9 16.2 52.0 0.1

1963 87.4 15.0 7.7 3.1 4.2 14.2 58.0 0.2

196h 95.0 16.0 8.2 2.8 5.0 14.3 6h.5 0.2

1965 108.0 18.2 8.8 3.2 6.2 14.0 71.6 0.2

1966 115.4 18.7 9.2 2.8 6.7 16.9 79.6 0.2

1967 132.8 19.4 9.0 2.7 7.7 18.9 93.9 0.2

1968 1h8.1 21.4 10.2 3.3 7.9 19.0 107.5 0.2

PercentageShares

Year, Totl RailwasI/ Coastal iraiHirhays

1961 100 18.3 18.7 62.9 0.1

1962 100 17.4 19.6 62.9 0.1

1963 100 17.2 16.2 66.8 0.2

196 1o00 16.8 15.1 67.9 0.2

1965 100 17.5 13.5 68.8 0.2

1966 100 16.5 13.5 69.8 0.2

1967 100 18.6 1h.3 70.9 0.2

1196h 100 14.4 12.8 72.6 0.2

1/ ";.inasa Vitoria" railway,subsidiary of CVRD mining company. 2/ Excluding river traffic for which no statistics are available. 3/ Includes international services. Donestic figures not available separately.

Source: GEIPOT. DECETEER 1969 BRAZIL

SIZOND HIGHWAYCDNSTRUCTION PROJECT

Passenger-Kilometers, Percentage Shares, and Average Annual Growth Rates of Total and Selected Items, by Mode of Transport 195o-1961 - 1961-1965 - 1965-1968

Average Anmnal Growth Rate PaasenRer-Kilometers (billions) Percent Shares (Dercit) Mode of Transport & Item 9 1 196 1965 1967 19 1961 91968 1951 68 Highways Medium and long di stance bus traffic 9.8 25.5 n.a. n.a. n.a. 45.1 52.4 60.8 70.6 26.7 31.6 36.7 39.3 40.2 42.1 9.1 15.3 16.1 Automobile medium and long distance traffic 3.9 13.0 n.a. n.a. n.a. 21.2 23.4 25.8 28.4 10.6 16.1 17.3 17.6 17.1 17.0 11.6 13.0 10.1 Subtotal 13.7 38.5 n.a. n.a. n.a. 66.3 75.8 86.6 99.0 37.3 47.7 54.0 56.9 57.3 59.1 9.8 14.6 14.3

Local bus traffic 4.2 10.9 n.a. n.a. n.a. 19.5 22.4 25.7 29.5 11.4 13.5 15.9 16.8 17.0 17.6 9.1 1,5.6 14.9 Automobile local traffic 3.2 10.1 n.a. n.a. n.a. 16.5 18.2 20.0 22.0 8.7 12.5 13.4 13.7 13.2 13.1 11.0 13.1 10.0

Subtotal 7.4 21.0 n.a. n.a. n.a. 36.0 40.6 45.7 51.5 20.1 26.0 29.3 30.5 30.2 30.7 9.9 14.4 12.8

Total 21.1 59.5 n.a. n.a. n.a. 102.3 116.4 132.3 150.5 57.5 73.7 83.3 87.4 87.5 89.8 9.9 14.5 13.9 Railways Interior traffic 5.7 7.4 7.9 8.2 8.1 8.2 6.4 7.7 5.8 15.5 9.2 6.7 4.8 5.1 3.5 2.4 2.6 -10.9 Commiter traffic 7.9 10.6 11.4 10.9 10.3 9.4 7.2 7.7 7.6 21.5 13.2 7.6 5.4 5.1 4.5 2.7 -3.0 - 6.9

Total 13.6 18.0 19.3 19.1 18.4 17.6 13.6 15.4 13.4 37.0 22.4 14.3 10.2 10.2 8.0 2.6 -0.6 - 8.7

Coastal Shipping 0.5 0.3 0.3 0.3 0.3 0.4 0.3 0.3 n.a. 1.4 0.4 0.3 0.2 0.2 n.a. -4.5 7.5 n.a.

Airwaysa) 1.5 2.8 3.1 3.0 2.6 2.6 3.0 3.2 3.7 4.1 3.5 2.1 2.2 2.1 2.2 5.8 -1.8 12.5 Total 36.7 80.6 - - - 122.9 133.3 151.2 167.6 100.0 100.0 100.0 100.0 100.0 100.0 7.4 11.1 11.0 n.a. = not available a) Includes intemational travel since figires ior domestic travel are not available seprately.

Source: Brazil Transport Survey, Draft Volume II. OEIPOT.

DXEMBER1969 Table 3

BRAZIL

SECOND HIGHMAY CONISTRUCTIONPROJECTS FederalInvestment in Transportby Modes (NCr July 1969, ions) 1965 1966 1967 1968 1969 /1

RAILWAYS

Equipment 361 258 203 127 259 New Lines 112 181 113 98 35 Sub total 473 439 316 225 294

HIGIaYS

Construction/paving 565 676 871 1014 998

MARITIME

Ships 122 236 21h 232 614 Ports 241 87 95 124 150 Sub total 363 323 309 356 764

AIRPORTS Construction/Equipment60 65 79 81 89

TOTAL 1461 1503 1575 1676 2145

,/1 Estimated

Source! GEIPOT and IBRD-WH195

DECE,BER 1969 TAuL

SECONDHIGHWAI CONSPRUCTION PROJECT

Cluaification of Hiahwavs

Lwnrttha Accordioh to TVDe of Jurisdiction. December 1968

Total National Highways State Hihways Municipal Highways _ EmKM KM STATE OR TERLRITORY Total Ur4paved Paved Total Unpaved Paved/ Total Unpaved Pavedl"

tondonia 1,114 807 807 00 61 61 00 216 246 00

Acre 397 248 248 00 44 44 00 105 105 00

Armazonas 1,455 45 27 18 539 399 140 871 850 21

Acrairm 318 170 178 O0 00 00 00 14,0 10 00 para 17,974 642 405 237 7,652 6,Y11 738 9,680 9,583 97

Anrapa 952 469 469 00 0 0 0 583 175 8

FKarannao 23,232 1,506 1,285 221 889 816 43 20,837 20,813 24

Pia;.i 22,069 1,418 1,248 170 1,695 1,6d6 9 18,956 18,956 0

00 1247,201 1,818 1,057 761 3,747 2,566 861 41,639 41,551 88

Ric Grands Sorer 9,494 862 546 316 2,455 2,329 126 6,177 6,177 0 Paraiba 23,967 946 583 363 3,021 2,980 41 20,000 20,000 o h

Alagoas 11,295 622 376 246 2,273 2,200 73 8,400 8,100 0

Fernando do Noronna l,0 0 0 0 40 40 0 0 0

Sergipe 4,852 322 123 199 1,281 1,271 10 3,249 3,219 0

ESahia 63,621 3,667 2,618 1,049 6,055 4,813 1,212 53,599 53,88L 15

Minas Gerais 132,433 5,193 1,458 4,035 16,608 14,268 2,340 110,332 110,156 176 r.spirito Santo 16,013 795 511 284 3,231 3,136 95 11,987 11,967 0

Rio de Janeir. 18,990 1,250 166 1,084 4,123 2,994 1,429 13,317 13,16C 157

Guanabaca 1,101 95 0 95 1,006 443 563 0 C C

Sac Paolo 166,615 2,533 118 2,385 14,082 5,024 9,058 150,000 147,000 3001

Parana 83,827 2,537 822 1,715 7,844 6,9;1 933 73,146 73,396 50

Santa Catarina 31,835 1,348 841 507 5,443 5,243 200 25,014 25,041 0

Rio Grande do Sul 170,927 3,066 1,738 1,328 9,602 8,889 713 58,259 158,156 103

.:ato Grosso 31,512 4,140 3,914 226 8,860 8,831 29 18,512 18,5G0 12

Gojas 34,047 3,355 2,738 617 10,692 10,438 254 20,000 20,000 0

Federal District, Brasilia 691 254 98t 16 397 397 - 0 0 0

933,238 40,475 23,809 16,666 114,173 94,899 19,274 778,577 774,828 3,751

Source: Na.ional Highwa; Department,

5/ As o: December, 1967.

DECEIi3ER 1969 BRAZIL

SeEOND HIGHWAYCONSTRUCTION PROJECT

Relations Amonir Area, Population. and Length of Highwans. 1963

Area in Population Surfaced Highways Total Highways Km Surfaced Kn Total 2 Km Paved Km Total '000 So.Km. in '000 in Km 1/ in Km 1/ Highwav/l.OOOmK Highway/lOOOkm Highway/l000 Inhab, Highway/l000 Inhab.

Rondonia 243 114 868 - 3.6 7.6

Acre 153 202 292 - 1.9 - 1.4

Amazonas 1,564 903 158 584 0.1 o.4 0.2 o.6

Rioraima 230 41 - 178 - o.8 - 4.3

Para 1,248 1,929 975 8,294 0.8 6.6 0.5 4.3

A-papa 140 106 - 469 - 3.4 - 4.4

Maranhao 329 3,461 264 2,395 o.8 7.3 0.08 0.7

Piaui 251 1,414 179 3,113 0.7 12.4 0.1 2.2

Ceara 148 3,838 1,642 5,565 11.1 37.6 0.4 1.4

Rio Grande DD Norte 53 1,291 442 3,317 8.3 62.6 0.3 2.6

Paraiba 56 2,253 404 3,967 7.2 70.8 0.2 1.8

Pernambuco 96 4,731 1,041 4,292 10.8 44.7 0.2 0.9

Alagoas 28 1,400 319 2,895 11.4 103.4 0.2 2.1

Sergipe 22 851 209 1,603 9.5 72.9 0.2 1.9

Bahia 561 6,915 2,261 9,722 4.0 17.3 0.3 1.4

Minas Gerais 587 11,48n 6,375 22,101 10.9 37.7 0.6 1.9

Espirito Santo 46 1,491 379 4,026 8.2 87.5 0.3 2.7

Rio De Janeiro 43 4,506 2,513 5,681 58.4 132.1 0.6 1.3

Guanabara 1 4,132 658 1,101 658.0 1,101.1 0.2 0.3

Sao Paulo 248 16,624 11,443 16,615 46.1 67.0 0.7 1.0

Parana 200 7,217 2,648 10,381 13.2 51.9 0.4 1.4

Santa Catarina 96 2,706 707 6,791 7.4 70.7 0.3 2.5

Rio Grande Do Sul 282 6,561 2,041 12,678 7.2 45.o 0.3 1.9

Mats Grosso 1,232 1,364 255 13,000 0.2 10.6 0.2 9.5

Goias 642 2,718 871 14,047 1.4 21.9 0.3 5.2

Distrito Federal (Brasilia) 6 390 156 651 26.0 108.5 o.4 1.7

TOTAL 8,505 88,638 35,945 154,626 4.2 18.2 0.4 1.7

I/ Bccluding Municipal Highways

Source: DNER

DECEMBER1969 TABLE 6

BRAZIL

SESCONDHIGHWAY OONJTR[JCIION PROJECT

Relations Among Area. PonulatiOn. and NIhber of Vehicles, 1967

Area in '000 Population Total Vehicle/ Vehicle/ STAIS SQ. Km in ' Vehicles 1000 Sg.Kmr IW Inhab,

Rondoriia 243 107 n.a. -

Acre 153 196 n.a. -

Amazonas 1,564 875 n.a. -

Roraima 230 40 n.a. -

Para 1,248 1,872 13,624 10.9 7.3

Ampapa 140 100 n.a. -.

MIarannao 329 3,314 n.a.

Piau! 251 1,391 n.a. -

Ceara 148 3,764 33,010 223.0 8.8

Hio Grande do Norte 53 1,271 n.a. -

Paraiba 56 2,219 18,396 328.5 8.3

P-ernambuco 96 4,645 55,732 560.5 12.0

Alagoas 28 1,381 n.a. -

Sergipe 22 838 n.a. -

Bahia 561 6,778 64,325 114.7 9.5

Minas Gerais 587 11,230 214,925 366.1 19.1

cspirito Santo 46 1,446 24,925 541.8 17.2

Rio de Janeiro 43 4,340 102,316 2,379.4 23.6

Guanabara 1 4,007 249,860 249,860.0 62.4

Sao Paulo 208 16,081 1,028,764 4,148.2 66.o

Parawia 200 6,763 144,207 721.0 21.4

Santa Catarina 96 2,624 72,590 756.1 27.7

Hic Grande dc Sul 282 6,397 228,321 809.6 35.7

}'tato Grosso 1,232 1,293 27,030 21.9 20.9

Goi as 642 2,592 39,826 62.0 15.4

Distrito Federal 6 358 22,277 3,712.8 62.2 1,Brasilia)

Total Vehicles Where No Detail is Available 56,460

TOTAL 8,505 85,902 2,396,588 281.8 27.9

Source: DNER

DECE21BER1969 TABLE 7

BRAZIL

SECOND HIGHWAY CONSTRUCTIONPROJECT

Vehicle Registrations,By State, 1967

State Cars Buses Trucks Total % Distribution

Ceara 26,261 760 5,989 33,010 1.4

Pernambuco 43,964 1,710 10,058 55,732 2.3

Bahia 50,191 1,667 12,467 64,325 2.7

Minas Gerais 166,073 5,005 43,847 214,925 9.0

Rio de Janeiro 72,599 4,654 25,063 102,316 4.3

Sao Paulo 849,626 13,733 165,405 1,028,764 42.9

Parana 101,657 2,054 40,496 144,207 6.o

Santa Catarina 52,345 1,162 19,083 72,590 3.0

Rio Grande do Sul 185,311 4,278 38,732 228,321 9.5

Guanabara 213,406 12,129 24,325 249,860 10.4

Espirito Santo 17,649 724 6,552 24,925 1.0

Goias 31,387 676 7,763 39,826 1.7

Mato Grosso 19,861 587 6,582 27,030 1.1

Paraiba 14,183 425 3,788 18,396 0.8

Para 10,699 26 2,899 13,624 0.6

Federal District, Brasilia 19,598 564 2,115 22,277 0.9 Other States and Territcries39,763 3,100 13,597 56,460 2.4 National Total 1,914,57353,254 428,761 2,396,588 100.0

Source: BrazilianInstitute of Geographyand Statistics

DECEMBER 1969 TABLE 0

BRAZIL

SECONDHIGHWAY CONSTRUCTION PROJECT

Vehicle Fleet, 1967 in '000

Cars 1,761.4

Pickups 153.2

Subtotal 1,914.6

Buses:

Gasoline 22.7

Diesel 30.5

Subtotal 53.2

Trucks:

2-4 tons gasoline 94.6

5-9 tons gasoline 222.8

5-9 tons diesel 4.3

10-14 tons gasoline 4.2

10-14 tons diesel 75.1

15-17 tons diesel 21.4

18 tons and over diesel (tractors/semi-trailers) 6.4

Subtotal 428.8

TOTAL 2,396.6

Source: GEIPOT DECEMBER 1969 TABLE 9

ERAZIL

SECOND HIGHWAY CONSTRUCTION PROJECT

HIGHWAY DESIGN STANDARDS FOR NEW ROADS

Class of Highway 0 I II III

Design L3peed, flat 120 100 80 60 km/h rolling 100 80 60 40 mountainous 80 60 40 30

MidnimiumHorizontal flat 570 380 230 130 Radius, m rolling 380 230 130 50 mountainous 230 130 50 30

TMaximum Grade, % flat 3 3 3 4 rolling h 4.5 5 6 mountainous 5 6 7 8

Sight Distance for flat 210 150 110 75 Stopping, m rolling 150 110 75 50 mountainous 110 75 50 -

Sl-ht Distance for flat 730 650 500 350 Passing, m rolling 650 500 350 175 mountainous 500 350 175 -

Pavement Width, m flat 7.50 7.20 7.00 7.00 rolling 7.50 7.20 to to mountainous 7.50 7.20 6.50 6.oo

Shoulder 'idth, m flat 3.50 3.00 2.50 2.00 rolling 3.00 to to to mountainous 2.50 2.50 2.00 1.20 very - mountainous 1.00 1.00 1.00 0.80

Rlght-of-Way, m flat - 60 30 30 rolling - 70 0 40 mountainous - 80 50 50

Source: DNER

DECEMBER 1969 TABLE 10

BRAZIL

SECONDHIGHWAY CONSTIUCTION PROJECT

HIG'HWMAYDESIGN STANDAXDSFOH IMPROVEMEDNTOF EXISTINIGROADS

Class of Highway 0 I II III

Design Speed, flat 100 100 80 60 rolling 80 80 60 40 mountainous 60 60 h0 30

Kinimum Horizontal flat 430 340 200 110 iadius, Tr rolling 280 200 110 50 mountainous 160 110 50 30

Piaximum Grade, dO flat 3 3 3 h rolling 4.5 5 6 mountainous 5 6.0 7 8

Sight, Distance for flat 150 150 100 75 StopiLng, m rolling 100 100 75 50 mountainous 75 75 50 -

Sight Distance for flat 650 650 500 350 Passing, m rolling 500 500 350 175 mountainous 350 350 175 -

Pavement Width, m flat 7.50 7.00 7.00 7.00 rolling 7.50 7.00 to to mountainous 7.50 7.00 6.oo 6.oo

ShoulderWidth, m flat 3.00 2.50 2.00 1.50 rolling 2.50 2.00 1.50 1.20 mountainous 2.00 1.50 1.20 1.00 very mountainous 1.50 l.oo 1.oo o.80

Hight-of-Way,m flat - 60 30 30 rolling - 70 ho ho mountainous - 80 50 50

Source: DNEr?.

DECEMBER 1969 TABLE 11

BRAZIL

SECONDHIGNilU CONSTRUCTIONPRIOJECT Forecasts of Annual Invest7wnt E rLditures for High Priority Road Construction and/or Paving Works

(NCr Millions)

Region State 197W) 1971 1972 1973 Northeast Maranhao 121.1 66.3 84.2 51 .3

Piaui 34.0 Ij5.4& 51.8 113.5

Ceara 64I.7 113.2 117.0 89.1k

Rio Grande do Norte 57.1 55.9 50.5 50.1

Paraiba 72.6 75.9 79.4g 914.3

Pernambuco 287.8 110.5 101.L 93.5 Alagoas 70.1 L4.lI 50.5 5h.o

6 Sergipe 68.6 14.5 42. 20.8

6 8 Bahia 599.0 1481.8 4t .1 213.7

'enter-East YMinas Gerais 259.0 284.2 301.3 267.9

Espirito Santo 77.1 119.3 38.7 22.0

Rio de Janeiro 160.L 1 ,9.8 67.1 30.0

tenter-Soluth(l

Sao Paulo L29.5 4(7.L 50P.5 553.8

Center -West

Mato Grosso f1 .3 73.6 88.3 106.3

Goias 42.5 71.2 94.1 199.6

Far South Parana h35.2 535.7 5147.1 4l68.4

Santa Catarina 171.2 2114 .n 232.5 195.5

Rio Grande do Sul 237.6 296.n 2Q8. 3 273.1

Sub Total 3,217.3 3,250.1 3,221.7 2,897.2

Other States (1 ) 227.3 227.5 225.5 202.8

1 Total 3, s75.1 3,177.6 3,[Ui7.2 3,100.0

(1) Investme-it exnedtiture forecasts are based on the Transoort Survey recrcrended invest-sent programs. The states and territcries not c-vered by the Siuvey are: Aiazcn Region - Rondonia, Acre, Amazonas, Roraina, Para, Asapa

Certer South - Guanabara .

Center West - Federal District (Brasilia)

Investm-ent expeniitures in states not covered by the survey have been taken as seven percent of the a-ounts for States studied.

SOtRCE: Transoort Survey Phase I and II

DECEMIBER,1969 TABLE 12

BRAZIL

SECONDHICIRWAT CONSTRUCTION PROJIGT

Tentative Pinanca na fAm Pegdarl And Stat. Hi,hwayu (1970-1973) NCr Millions

Revenues 1970 1971 1972 1973 1970/1973

Road Fund (IUCL) 1,571 1,723 2,120 2,292 7,706

Otaer Revenues (1) 1.199 1.275 1,351 1,427 5,252

Total 2,770 2,998 3,471 3,719 12,958

Exnenditures

Invest'ents (2) 3,475 3,478 3,447 3,100 13,500

Maintenance Equipe-mnt (States Covered 132 48 4i 74 295 (by Transport (Survey (Other States 9 3 3 4 19

Sub Total 3,616 3,529 3,491 3,178 13,814

'airitenanre and Administration (DNER and 736 744 763 797 3,040 (States covered (by Transport (Survey

(Other States 45 47 48 50 19n

Sub Total 781 791 811 847 3,230

Total 4,397 4,320 4,302 4,025 17,044

sureius (Deficit) (1,627) (1,322) (831) (306) (4h,06)

1I.S.2 Equivalent (sillions) (397) (322) (203) (75) (997)

Average Annual deficits US$249 million (197C-1973)

(1) Proceeds of taxes earmarked for highway use and budget appropriations

(2 See Table 11 t(,tliT Trar-ssort Survey Phase I and II

5 DEC BE'5, 196u TABIE 13

BRAZIL

SEDONDHIGHWAY OICSTRUGTION PROJECT

List of Roade for Constrmtien mVd/or Pa.irm

(1) (2) (3) (4) (5) (6) (7) (3) Type of Sur- Peo- facing andS lap't eto d lacier Soenrv Road Section Fl R ytpeoflir4 s Xountsi iTerr Clams of Road Type of Work Total Cost (2) 'ed. State ~~~~~~~~~~~~~% oln ~~~~~~Flat4otnous % Conit.and I-o and' NC, cilli-c jti dimlon (1) Paving Pacing

Cca,,. BR 22? BitR Piripiri-Sobral - 15 85 LST-1 - 199.7 58.9 14.L

El 3?L DNSR Salvador-Feira de Sanstan (I) 75 25 - AC-C 32.5 - 46.7 11.4

B, iv BR 321 DIER Salvador-Fair. de Santana (ItS 65 30 5 AC-I - 72.5 1ih. 3.5

B1hie RB 101 DN5R Junction BR 32h - Rio Preto - 95 5 AC-I - 183.5 56.6 13.3

w4-ia BR 1,1 DNER Rio Preto - Rio Pardo - 25 75 AC-I - 215.6 71..L 17.b

.4 Ia B2 101 DNOR Rio Pardo - Ita'eer.ju 15 15 70 AC-I 201.4 - 97.2 23.7

Sr-ia BY 1i1 DNER Ttaia,oju-Pedro C.asrio 40 31 37 AC-I 16e.h - 67.1 1f.!,

., irite Seclc 3. 1'1 DNESR Pedro Canario-Linharee 20 50 30 AC-I - 131.6 39.3 Y.t

Ocociro BR 101 DNSR Rio Bonito-Facenda doe Quarantn 15 85 - AC-I - 116.2 57.L 1L.,

0rai B!R135 MG1 DSR/iE Corinto-Bocaiuca - 100 - DST-I - 167.8 36.3 1. SiBes locate :p, 37 lIG5L DEPt51 Itoitaba-Cnaal Sao Sitao 10 55 35 DST-I - 114.5 19.1 L.7

locas BR 3.L DRSR Lagoa For,osa-Jurntioo BR 262 33 33 34 DST-II 110.7 - 21.3

Ocia- BR hS2 DNER Itumbiara-Rio Verde 50 50 - DST-1 181.0 - 51.2 12.5

2aeacloo 20PRL17 251,3/'6 DRR/SC Caccos NKoos-Jumntion RR 116 4°a 35 25 AC-I 88.f - h3.7 1 ,7

-c pal e.a 153 DNEF Santa Maria-Julio de CastilhRo Se 35 15 AC-C - 62.8 27.? 6.0

lie 3cc-sd'- -, 2 Z3q/11 DIWRS Cruotiro do SulMucu - S50 AC-I 4 ,7. 39.4 9.6

siT 32'RS3 DSR/RS Porto fainron.t-Sata eCrus do Sul - Br 2n AC-I 50 1 - 40.2 9.8

Total 871.6 1,267.2 771.7 1'53.2

Graid Total 2.138.8

DST frable Ssofaco Treatment

Z A-hoalt C-creto

C Zlaas 0 (soc Tabl- 9-10)

I Ilos- I (ace T-bles 9-10)

II laco II (sec T2-Dea 9-10)

FEBRUARY, 1 970 BRAZIL

SECONDHIGIWAY CO TRUCTIONPROJECT 5 List of Roads for Detailed legering

(1) (2) (3) (W) (5) (6) (7) (8) ¶yefWork, Road Number ExiitrF ro,osed Estimated Cost of Preparatory Studiea/ State Fadera! - State Section Length Condition= St-sdrd. Estisted Constroctiss Costs Datailed Etinaaris! Consult ants km NCr Mlillioa US$ Millions NCRISillions 1E$ 1i4lons

PB/PE BR 104 C. Grande-Caruaru 128 IE-IV 'ST-I 57.0 13.9 2.30 .56 FS-Astep

PE/AL BR 104 Caruaru-U. Palar es 118 IE-IV DST-I 62.7 15.3 2.50 .61 5

AL ER 104 AL 504 U. Palarsa - Junction BR 316 60 IE-IV DST-I 29.1 7.1 1.15 .28

PI/PE BR 316/232 Picos-Parnamirim-Salgeiro 302 I-TV DST-I 138.2 33.7 5.55 1.36 FS-Technoutal/fodio

BA ER 324 Salvador: Northern Access 4 - AC-C 16.4 L4. .65 .16 FS-Dorach

ES ES 37/36 Nova Venecia-Sao Domingos 69 IN-IT AC-II 23.4 5.7 .95 .23 NP-Norconsult

RJ RJ 133 Pedro do rio-Junction BR 116 6o IN-IV AC-II 26.2 6.4 1.05 .26 I-borco_ult

RJ RJ 82 Posse-Dox Suceaso 6o WE-II AC-II 19.3 4.7 .80 .19 W-lUorconalt

}1D J 354 Jation aR 262-Ba'ui 314 a-IIn DST-I 8.6 2.1 .35 .O FS-Pr-oeu./Lasa/Ktapa

IC 8R 354 IC 25 Foradga-Pordosa 94 0-II DST-I 18.9 4.6 .73 .18

I M171/168/28 S.Seb. Paraiso-Pocos de Caldas 188 Iz-TV DST-I'II 61.1 14.9 2.115 .60 FSD-DR/Q

M BR 267 MD 157 Pooos de Caldas-Parsagucu 101 TN-IT DST-II 26.2 6.4 1.05 .26

oo ER 153 Ceres-Poranguatu 254 0-I AC-I 75.8 18.5 3.00 .714 FS.drolsr_sm

GO aR o60 Guapo-Jatai 274 0-I/Il AC-I 80.4 19.6 3.20 .78 -Paru _ ./d. an" Nelw/*s2an IT BR 163 Bandirantes-Campo GrarA. 71 O-I/lI AC-I 20.5 5.0 .85 .20

PR PR 12 Corn. Proeop. - Congonhas 44 IE-III AC-I 27.5 6.7 1.10 .27 1-KaEs

PR/SC/NS ER 153 Ihio da Vitoria-Erachi 2141 N AC-I 139.4 34.0 5.60 1.37 Pe-BMWoa

RS/SC BR 386/158 RS 51/SC 102 Sr azdi-Irai-Cnhapora 163 Il-TV AC-I 94.4 23.5 3.85 .94k

aS RS 19 Taquara-Spiraga 25 -II AC-I 11.9 2.9 .50 .12 W-E_ az

TOTAL 2,290 937.0 229.0 37.3 9.2

Column 2 and 3 Column 8

IM: Improved Earth FS: Feauibility Study 0: Gravel ME: Non Existdrl NP: Naster Plan DST: Double Swrface Treatment AC: Asphalt Concrete 0: Class 0 (See Tables 9 wnd 10) I: Class I (See Tables 9 and 10) II: Class II (See Tables 9 and 10) III Class III (See Tables 9 and 10) IV: No Class

MRCH 1970 TABLE 15

DRAIL

SECOND HIGOW! CONSmRUCTnCNPROJECT

List of Roads for Feasibility Studies 1/

-() (2) (3) (4) (5) (6) (7)

Rood fittest Length Eatimated Costmeution Estimated Cost of Costs Feasibility Studies 3otet sotion Exsting Imposed N5r 029 Nur u2$ smai Federal State mn Conditins Stadawrds Millions Million Million Million

.B1 FE B3111'/il? Faeich-aJuantion BR232 207 1E-II DST-II 68.9 16.8 1.35 0.33

FA BR030 Ca-tite-Brumado 103 IE-Il AC-I 41.7 10.2 i.So 0.20

BA BA630 Brua-do-Vitoria da Conqoista 141 IE-IC AC-II 52.3 12.8

Ft 8E 32 Brumado-Junetion BR116 158 NE AC-C 117.2 28.6 ) 2.45 ).60 Altec tni.ss. roads

EA BA026!1554. Bted-aaosJsto BRut1 215 NE AC-II 79.7 19.4

3.A BR101 FIesr ds Sontana-Esplanada 136 G/DS5-II AC-C 55.8 13.6 1.05 o.25

F0 1114 Border RA/ES-Eooporanga- Batsr de Sao Franoisco 165 IE-IV AC/D3T-II 73.1 17.8 1.45 0.35

MfF3/GB 8R135 0.00 As o-Rio ds Jansdei 202 AC-I AC-C 164.2 140.0 3.30 0.80

MG MGIl Corinto-Pirapora 148 IE-III DST-II 38.4 9.4 o.a0 0.20

MI'G' itEt14 Rondonopolis-Jatai-Canal S.o Sin-o 661 IE-IV/II DST'AC-II/I 244.7 59.6 5so5 1.35

ffT BP361/163 C.iaba-Rondonoplis-Campo Grands 758 IE/G-III/t D3I/AC-II/I 242.9 59.2 5.55 1.35

PR PR13 Masiega-sasts Isaoio 95 IE-III AC-I 5o.4 12.3

PR - M.inga-Rolandia 59 NE AC-O 94.3 23.0 _ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~_ PR - - Noe Espesrano-Porto Cears 77 IE-II/III AC-I/O 54.2 13.2 ) 4.75 ) 1.15 Alstati- toads _ ~~~~~~~~~~~~~~~~~~)) Fi pFR7 Nova Esperanca-Rolandia 80 NE AC-0 126.0 30.7

-Tres Passos-Fred. ES RS54/48 Santa Roms Wrstphalen 156 NE AC-I 94.4 23.0 ) 2.5o ) o.6o Alts.tatioe toadE -Campo Noso 90 NE AC-I 54.6 13.3

ES Rs5a Tres Passos-Canpo Novo- I Jui 128 IE-III AC-I 83.0 20.2 1.65 0.40

(Junction RS BR158/377 RS51 J.de Castilhon-(BR285/158 317 IE-I/II AC-I 41.1 10.0 C. Alta- (Junction C (BR285/377 118 IE-I/Il AC-I 41.1 10.0 ) 1.20 ) 0.30 Altnrnaotre roado

TOTA1 3.814 1/ 1,817.8 1'/ 413.1 _/ 32.40 7.88

Coluno 2 and 3: IE: Ispeosed Earth 0: Class 0 (See Tables 9 and 1Q) S/Seveeal feasibility stolies included in this 1ost ce*n o: Gravel I: Cleas I (See Tables S and to) alternatiec lignmsnto. Total length foe -onst-ctino NE: Non-Existing II: Class II (See Tables 8 sdlO) ill therefore be less than that for feasibility studies IT: QDouble Surface Treatment III: Class III (See Tables 9 andl') and will be absot 3,1OC km (Estinated cost: US$320 millIon). AC: Asphalt Concrete IV: No Class

FEBRGRIR, 1970 BRAZIL

SECOND HIGH'AY CONSTRUCTION PROJECT

Average Daily Traffic on Project Roads!/

PRFSENT TRAFFIC (1968) ESTIMATED TRAFFIC (1972)

Normal Traffic Diverted Traffic Total Total Road Section Vehicles Cars Buses Trucks Vehicles Total Cars Buses Trucks Total Cars Buses Trucks BR-222 Piripiri-Sobral 246 47 12 187 356 356 60 16 280

BR-324 Salvador-Feira de Santana Section I 2/ 6,323 2,675 638 3,010 9,488 >,488 4,086 928 4,474 _ _ _ _ Section II 27/ 2,926 1,501 287 1,138 4,010 4,010 1,830 323 1,857 - - - - BR-101 Junction BR-324 Rio Preto 199 74 14 111 1,144 310 122 19 169 834 239 70 525 BR-101 Rio Preto-Rio Pardo 212 136 12 64 889 340 225 17 98 549 137 48 364

BR-101 Rio Pardo-Itamaraju 341 177 7 157 1,087 544 293 11 240 543 132 48 363 BR-101 Itamaraju-Pedro Canario 280 58 14 208 984 419 96 19 304 565 138 52 375 BR-101 Pedro Canario-Linhares 515 159 14 342 1,398 799 288 18 493 599 164 50 385 BR-101 Rio Bonito-Fazenda dos Quarenta 248 108 13 127 1,155 407 196 18 193 748 203 75 470

BR-135 Corinto-Bocaiuva 263 117 21 125 385 385 159 29 197 - - - - BR-365 Ituiutaba-Canal Sao Simao 158 91 7 60 553 219 128 10 81 334 193 16 125 BR-354 Lagoa Formosa-Junction BR-262 160 88 11 61 325 22h4 124 16 84 101 21 3 77 BR-452 Itumbiara-Rio Verde 334 71 18 245 737 454 99 25 330 283 145 5 133 BR-470 Campos Novos-Junction BR-116 630 250 23 357 1,052 1,052 416 54 582 - - - - BR-158 Santa Maria-Julio de Castilhos 682 373 29 280 967 967 534 37 396 _,

RS-38/11 Cruzeiro do Sul-Mucum 842 375 42 425 1,189 1,189 549 61 579 - - - RS-3 Porto Mariente-Santa do Sul 423 124 22 277 612 583 184 33 366 29 9 2 18

1/ Traffic volumes shown in this table are averages over the whole road sections.

2/ Figures for 1967

SOURCE: DLER

DECEMBER, 1969

H' BRAZIT

SECOND HIGHWAY CONSTRUCTION PROJECT

Estimated Vehicle Operating Costs (NCr., June 1969, per Em, net of taxes)

SURFACED GRAVEL EARTH FLAT ROLLING MOUNTAINOUS FLAT ROLLING MOUNTAINOUS FLAT ROLLING NOUNTADIOUS

0.025 0.025 0.028 Passenger Car A 0.025 0.023 o.025 0.025 0.025 0.025 0.028 (Volkswagen) B 0.010 0.008 0.016 0.016 0.016 0.014 0.028 0.028 C 0.011 0.010 0.010 0.014 0.013 0.013 0.020 0.018 0.018 D 0.045 0.050 o.o63 o.o60 c.o60 o.o65 0.098 0.095 0.118 T 0.091 0.091 0.114 0.115 0.114 0.117 0.171 0.166 0.192 US ¢ equivalent per KM 2.28 2.28 2.60 2.88 2.85 2.93 4.28 4.15 4.80

Bus A 0.063 o.063 0.072 0.066 0.066 0.088 0.076 0.091 o.o95 (36 Passenger, Diesel) B 0.053 0.042 0.032 0.084 0.084 0.074 0.189 0.189 0.189 C 0.107 0.097 0.097 0.160 0.146 0.146 0.267 0.243 0.243 D 0.296 0.329 0.444 o.362 0.378 0.510 o.576 0.592 0.773 E 0.078 0.080 0.097 0.101 0.101 0.123 0.166 0.167 0.195 T 0.597 0.611 0.742 0.773 0.775 0.941 1.274 1.282 1.495 US 0 equivalent per KM 14.93 15.28 18.55 19.33 19.38 23.53 31.85 32.o5 37.38

Light Truck A 0.047 0.055 0.074 o.066 0.069 0.077 0.077 0.083 0.088 (2.7 Tons, Gasoline) B 0.043 0.031 0.020 o.o62 o.o62 0.054 0.140 0.1140 0.140 C 0.041 0.037 0.037 o.o61 0.056 O.056 0.102 0.093 0.093 D 0.172 0.202 0.303 0.242 0.283 0.354 0.333 0.374 0.424 E 0.OL5 0.049 o.o65 o.o65 0.071 0.051 0o098 0.104 0.112 T O.348 0.374 0.499 0.496 0.541 0.622 0.750 0.794 0.857 US ¢ equivalent per KM 8.70 9.35 12.48 12.40 13.53 15.55 18.75 19.85 21.43

Medium Truck A 0.055 0.073 0.117 0.073 0.099 0.131 0.102 0.128 0.146 (7 ton, Diesel) B 0.070 0.052 0.036 0.104 0.104 0.104 0.234 0.234 0.234 C 0.051 0.051 0.051 0.077 0.077 0.077 0.128 0.128 0.128 D O.166 0.207 0.300 0.277 0.269 0.331 0.279 0.331 0.393 E 0.051 0.057 0.076 0.072 o.082 o.o96 0.1i1 0.123 0.135 T 0.393 0.440 o.580 0.553 o.631 0.739 o.854 0.944 1.036 US 0 equivalent per KM 9.83 11.00 14.50 13.83 15.78 18.48 21.35 23.60 25.90

Heavy Truck A 0.073 0.097 0.155 0.097 0.131 0.175 0.136 0.170 0.194 (15 tons, Diesel) B 0.146 0.108 0.076 0.216 0.216 0.216 o.486 o.486 o.486 C 0.101 0.101 0.101 0.152 0.152 0.152 0.253 0.253 0.253 D 0.263 0.329 0.477 0.362 0.428 0.526 0.444 0.526 o.625 E 0.087 0.095 0.121 0.124 0.139 0.160 0.198 0.215 0.234 T 0.670 0.730 0.930 0.951 1.066 1.229 1.517 1.650 1.792 US 0 equivalent per KM 16.75 18.25 23.25 23.78 26.65 30.73 37.93 41.25 44.80

Tractor Trailer A 0.082 0.109 0.174 0.109 0.147 0.196 0.153 0.191 0.218 (20 tons, Diesel) B 0.204 0.151 0.106 0.302 0.302 0.302 0.680 o.680 o4680 C 0.124 0.124 0.124 0.186 0.186 0.186 0.310 0.310 0.310 D 0.292 0.365 o.529 0.402 0.475 o.584 0.493 o.584 0.694 E 0.105 0.112 0.140 0.150 0.167 0.190 0.245 0.265 0.285 T o.807 0.861 1.073 1.149 1.277 1.458 1.881 2.030 2.187 US 0 equivalent per KM 20.18 21.53 26.83 28.73 31.93 36.45 47.03 50.75 54.67

SOURCE: Brazil Transport Survey, Phase II. Guideline 014. A: Fuel and Lubracants INER B: Tires C: Maintenance and Repairs D: Crew Wages, Insurance and Depreciation E: Overhead T: Total DECEMBER 1969 TABLE 18

BRAZIL

SECOND HIGHWAY CONSTRUCTIONPROJECT

Average Daily Traffic, (ADT) SelectedNational Highways,1968

1/ ADT

Highway - BR State No. Trucks %

060 Minas Gerais ,766 53.1 050 Minas Gerais 1,669 48.7 060 Goias 2,313 36.6 Lai Paraiba 1,763 51.5 101 Sergipe 3,102 38.6 101 Espirito Santo 1,062 57.2 101 Santa Catarina 2,010 32.0 101 Rio Grande i: Sul 2,011 32.0 116 Ceara 1,538 58.7 116 Bahia 5,430 45.4 116 lMfinasGerais 2,262 67.3 116 Santa Catarina 2,604 57.6 1.1I Rio Grande do Sul 12,505 25.1 135 Minas Gerais 4,992 43.4 135 Rio de Janeiro 19,307 30.1 153 Goias 1,889 52.5 222 Ceara 1,179 48.1 230 Paraiba 1,268 54.8 262 Minas Gerais 1,517 46.9 324 Bahia 5,430 45.5 381 Minas Gerais 4,457 48.6 Rio de Janeiro 16,930 36.2 61 Rio Grande do Sul 1,246 43.3

1/ AJT at selected counting stations.

Source: Anuario Estatisticode Transito nas Rodovias Federais, DNER, 1968, National Departmentof Highwzays.

DECh.BEP. 1969 TABLE 19

UOWNDIORWAI WONSTRUCTION PIOJECT

Internal Rates of Return for Roads Proposed for Construction and/or Paving

Assumption 1 Assumption 2 Assumption 3 Road Number Road Section (Best Estimate) (Upper Limit) (Lower Limit)

Federal Stat

Piaun BR 222 Piripiri-Sobral 21 27 15 Coaro Bah-a BR 324 Salvador - Feira De Santana Section I 44 Section II 32

BaoLR BR 101 Junction BR 324 - Rio Preto 3c .6' 24

Bahiao BR 101 Rio Preto - Rio Pardo 22 4 1'

Batlia BR 101 Rio Pardo - Itanraju 19 25 13 hnia XBR101 Itamar-ju-Pedro Canario 25 32 18

cSpirito Santc IR 101 Pedro Canario-Linhares 42 50+ -32

Rio d, Janeiro BR 101 Rio Bonito-Fazenda dos Quaranta 2C 26 14

Mwinae uerals BR 135 MG 1 Corinto-Bocaiuva lo 24 12 llinac Gerais BR 365 MG 54 Ituitaba-Canal Sao Simao 47 50+ 38

linas Gcrais BR 354 KG 163 Lagoa Formosa-Junction BR 262 23 28 ld

Go_as BR 452 Iturbiara-Rio Verde 37 44 30

Santa Catarina BR 170 SC43/68 Campos Novos-Junction BR 116 35 42 28 Rio Grande do Sul BR 158 Santa Maria-JulLo de Castilhos 25 31 19 Rio Grando do Sul RS38/11 Cruzeiro do Sul-Mlucum 17 22 12

Rio Grando do Sul RS 3 Porto Mariante-Santa Cruz do Sul 18 23 13

3/ Undor Assumption 1 the interoal rates of return were calculated using the iuts as provided by the consultants and LNER.

/ Under Assumption 2 the internal rates of return were calculated reflecting optimiatia eonditians, by lowering constructiun costs 10%, increasing the unit benefits from vehicle operating costs on paved roads and the unit benefit from maintenance of paved roads 10% each, and holding the other variables constant.

3/ Under Assumption 3 the internal rates of return were calculated reflecting the met pessimistic conditions, by increasing construction costs 10%, decreasing the unit benefits from vehicle operating costs on paved roads and the unit benefit from maintenance of paved roads 10% each, and holding the other variables constant.

MARCR1070

BRAZIL:SECOND HIGHWAY CONSTRUCTION PROJECT ORGANIZATION CHART OF THE NATIONAL HIGHWAY DEPARTMENT(DNER)

D I R E C T O R G E N E R A L|

|TECHNICAL AND ECONOMIC ADIOS|| ADMINISTRATIVE COUNC~IL~

AUDITING COMMITTEE | OFFICE OF THE DIRECTOR

|SECURITY COMMITTEE l | SECRETARIAT | |PUBLIC RELATIONS| |REPRESENTATION10 SECRETARIATOFFICE FEDERALDISTRICT

DEPUTY DIRECTOR|

L S~ECRETARIAT|

t _ CONTRO L } EIIEBIDDING COMMTE

LEGAL ADMINISTRATION PLANNING WORKS OPERATIONS

PERSONNELH l _|PLANNING PROGRAMING CONSTRUCTION MAINTENANCE AND CONTRO

MATERIAL ENGINEERING A BRIDGESAND STRUCTURES HIGHWAY EQUIPME

COORDiNATIONH 1 4 DATA PROCESSING AND BETTERMENT TRAFFIC

FINANCE RESEARCH BUSTRANSPORT AND TRUCK

DISTRICT OFFICES ( One in eachState)

November1969 IBRD-4654 -

BRAZIL:SECOND HIGHWAY CONSTRUCTION PROJECT

ORGANIZATION CHART OF GEIPOT

P E REXECUTIVECOUNCIL SECRETARIAT

DIO ADVISORS SUPERINTSA [ S

|COORDINATIO |

DEPARTMNT OF |TECHICAL TECHNICAL ADMINISTRATION DPARTMENTESERVICES

_ ADMINISTF'TOR DCMNATION ECONOMIC_

SUPPLIES CENTER STuDIE_

_ PERSONNEL 2 EERHHIGHWAY _ DIVISION N STUDIES

EQ. IPMENT AND DOCUMENTATION ORTAN ES~~~~~~~~INAN

i FINANCIAL l PUBLICATIONS l| RAILWAY

ACCOUNTING~ l~ DRFTA IN|| PORT AND INLAND SECTION INAVIGATION STUD[E

SPECIAL STUDIE

TREASURY | -I

BRAZIL:SECOND HIGHWAY CONSTRUCTION PROJECT ORGANIZATION CHART OF THE STATEHIGHWAY DEPARTMENTOF MARANHAO

(DER - MA)

| H I G H W A Y C O U N C I L

EXECUTIVE COUNCIL DIE GENERAL

SECRETARIAT pDISTRICTS~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~VC-IRCO GENIEIRIL

a q ASSISTANCE TO | Iq PURCHASING COMMITTEE

CENTRAL WAREHOUSE|

SURVEY AND CONSTRUCTION EQUIPMENT MAINTENANCE ADMINISTRATIVE DESIGN DIVISION DIVISION DIVISION DIVISION LEGAL DIVISION DIVISION

EQUIPMEN~T APRPRAINS CONTROL SURVEYSi l i STRUCTURESECTION | -| EOUIpMENTRECORDS

PAVING AND CENTRAL REPAIR | EACCOUNTS RECEIV- ABLE AND PAYABLE MAPPING8 l m LABORATORY SHOP

CONTROl OF RIGHT - OF - WAY GENERAL SERVICING RECEIPTS

TRANSPORT PERSONNEL

Noee 1TREASURERD

SERVICES |

Novemnber 1 969 RD45E

BRAZIL:SECOND HIGHWAY CONSTRUCTION PROJECT STATE HIGHWAY DEPARTMENT RECOMMENDEDSTANDARD ORGANIZATIONAL STRUCTURE

STATE GOVERNOR

__ -A---- 1 SECRETARYOF TRANSPORRT L ___ AND PUBLIC WORKS K j

| HIGHWAY COUNCIL ll

AUDITINGCOMITEDIRECTOR GENERAL TRAFFICCOUNCIL

| SECRETARIAT DEPUTYDI RECTOR

DEIG ADIVISONSTRUTIODIVISION ~ ~ ~ ~ ~ ~ MANENNEMAINTENANC_E DIVISIONIISO |i ADMINISTPATIVE DIVISION l

EngineeringDesign Section Maintenance Section Finance Section

Field Teams Field Teams

Soils and Material Section Equipmentand StoresSection | PersonnelSection

FieldTeams _ ZPurchasingSection

Construction Section Legal Section II 1Assistance to Municipalities Sect. Field Teams

TrafFic Section

Police District No. 1 Highway District No.1

- Police District No. 2 Highway District No.2

IBRD-4734 January 1970

ANNEX A

BRAZIL

Transport Survey

I. Main Recommendations

Transport Coordination

1. The consultantsmade general recommendationswhich, if adopted, would go far to ensure the movement of traffic by that mode of transport which incurred the least cost to the economy. It was recommendedthat investmentsbe made according to economic criteria, that there be free user choice of mode of transport,that governmentpolicies should not un- duly favor or discriminatebetween modes, and that users be charged in proportion to the costs of resources consumed in the provision of the services.

Railways

2. An extensive analysis of the Federal and State railwayswas made and the main recommendationsincluded:

(a) The merger of all railways into one system, controlled by a Board with Managing Director responsibleto the Minister of Transport;

(b) A program of abandonmentof uneconomiclines;

(c) Improvementin equipment,signalling and operations;

(d) Reduction of personnel;

(e) Adoption of cost-basedtariffs; and

(f) "Normalization"of accounts (writing of concessionary Government traffic at full commercialrate).

Ports

3. The ports of Rio de Janeiro, Santos and were studied in detail with a view to providing guidelinesfor the improvementof admin- istration and to prepare master plans for investment. The situation in the ports was unsatisfactoryin almost every respect, the principal cause being overcentralization. It was proposed that the National Port Organi- zation be responsibleonly for rational planning and coordinationand that individualports should be transformedinto largely independentport au- thorities. For the port of Rio de Janeiro, the Survey recommendedexten- sive rehabilitationand expansionof facilities,including new wheat and ANNEX A Page 2

dry bulk terminals,and new general cargo berths. In Santo, new facilities, including a container berth, were recommendedto handle increasinRtraffic. In Recife, replacementof almost all equipmentwas recommended as well as the rebuildingof sheds.

Coastal Shipping

4. The consultantswere asked to identify major shortcomingsand to recommend any new investment in ships that may be required. A major finding was that the present fleet was much too large for the available cargo and extensive scrappingwas recommended. Fixed sailing schedules were suggested, as were the consolidationof shipping companies and the decrease in the role of the regulatorybody, the Merchant Marine Commis- sion.

Highways

5. The highway studies covered the following States:

Phase I

Minas Gerais, Parana, Santa Catarina and Rio Grande do Sul

Phase II

Region A Region B R

Sao Paulo Rio de Janeiro Bahia Alagoas Ceara

Mato Grosso Espirito Santo Sergipe Pernambuco Piaui

Goias Paraiba Maranhao

Rio Grande do Norte

The studies concludedwith the listing of priorities for investmenton national and state networks, forecastsof financialexpenditures on high- way investment,maintenance equipment, and maintenance and administration. They also included recommendationsfor the improvementof organizationand maintenance,financial programs and user charges.*

6. Recommendedinvestment expenditures for constructionand/or pav- ing are given in Table 11 (1970-1973). Tentative financing plan is shown in Table 12.

* Available December, 1969. ANNEX A Page 3

II. CONSULTANTSENGAGED IN THE TRANSPORTSURVEY

Consultantsand Nationality Duties

PHASE I (1) Coverdale and Colpitts (USA) Coordinatingconsultants and railway studies.

(2) INGEROUTE (France) Highway Master Plan and Organiza- tion Study, and FeasibilityStudies in the State of Minas Gerais.

(3) KAMPSAX (Denmark) Highway Master Plans and Organiza- tion Studies, and FeasibilityStud- ies in the States of Parana, Santa Catarina, and Rio Grande do Sul.

(4) NEDECO (Netherlands) Study of the Ports of Rio de Janeiro, Recife and Santos, and of coastal shipping. PHASE II (1) KAMPSAX (Denmark) CoordinatingConsultants.

(2) Parsons, Brinkerhoff, ) Highway Master Plans and Feasibility Quade and Douglas (USA) ) Studies in the States of Sao Paulo, ) Mato Grosso and Goias. Edwards and Kelcey (USA) ) ) Highway OrganizationStudies in the ASPLAN (Brazil) ) States of Mato Grosso and Goias. ) MONTOR-MONTREAL(Brazil) )

(3) NORCONSULT (Norway) ) Highway Master Plans and Organiza- ) tion Studies in the states of Rio Servicos de Planejamento) de Janeiro and Espirito Santo (Brazil) )

(4) Xaver Dorsch (Cermany) Highway Master Plans and Organiza- tion Studies, and FeasibilityStud- ies in the States of Bahia and Sergipe

(5) Louis Berger (USA) Highway Master Plans and Organiza- tion Studies in the State of Alagoas, Pernambuco,Paraiba, and Rio Grande do Sul.

(6) Sauti (Italy) Highway Master Plans and Organiza- tion Studies in the States of Maranhao, Piaui, and Ceara. March 1970

First Plan of Action (PA-fl Progress of Ilem_ntatimn

itemt tt RAIIWAYS

1. Consolidation of Federal and State System Iottgntion of operatione is proceedirg. Plans for merger still under discussion.

2 * Amendrmntof RFFSA's Statutes to permit consolidation In Copl*ted sid 1968. creation of Regional Systeme 3. Introduction of Regional System in Federal Raibraye Target date 1970 - Completed Auguet 1969. 4. Staff: a) Reduction of personnel to 120,000 by 1971. In 10 maotha (August/19682 0- June/1969) staff was rI d by 3,600 to 1 7,40 - Reduction is being continued. b) Changes in Labor-Wages legislation Subeitted to Governmnt - under study.

5. Accounting: a) Modernizirg of accounting uysts with assistamae Consultants started werk July 1969. of consultants b) Completion of mechanization by first half of 1969 pus to delay in appointing consultants, now set for early 1970. 6. Operations: a) Revision cf procedores to improve efficiency Will be porsued with asistance of consultants now appointed (SOFRERAIL). b) Closure of 416 unprofitable stations by Dec. 31, 1969 A total of 428 stations will be closed by Dec. 31, 1969

7. Introduction of a new cost-based tariff systa by third quarter 1969 Will be pursued with assista ne of consultants now appointed.

6. Elimination of 7,300 km of unesonoric lines by 1972 Already closed 5,162 kmj balance is planned to be closed by end 1970. 9. Action on new line corztruction to be tsken as recomnded by Reoomendations have been foflowad with exception of one Transport Survey subject to ationasl security ad social requirements project for which a feasibility study was prepared by consultante.

10. Deficit: a) Compensation by Qovernmert for erforced law rates Partially implemented - should be completed in 1970 ("ncrmaliz ati on") b) Incorporation of 10% tax in tariffs NJ1 yet implemented

c) Reduation of operating ratio to 200 by 1968 (without Achieved normaliz ati on)

H113WAYS

1. Reorganization of Highway Administrstion:

a) Completion of DNER's reorganization stub' by the ed of 1968 Achieved. New organization legalized March 1969.

b) Gradual transfer of DNER's eonstruction antd maintenance US Bureau of Public Roads to start early 1970, pending final agree- functions to the DER's, met with UAID. Contruction functions to be delegated to states on a road by road basi?. Maintenance: Road tax restructured atd esroarked for maintenance purposes. DNER's share to be transferred to states to cover maintenance expenditures on National roads. Complete delegation of maintenance fnctions to Minas Geratsand 3 southern states to be accomplished in 1970. c) Reorganization of DER's G1IPOTreorganization studies oompleted 1969 Emblirg legtslation enbmitted to state authorities M(fiaaa6 Gerais- Santa Catarina) Consultants beirg contracted for implementation (Parana - Rio Grande do Sul) Reorganization underway (Bahia - Rio de Janeiro) 2. R-sruotn ring of Road user charges - Final proposals to be oubmitted jAut`en delayed pending publioation of Transport Survey Phase II by the end of 1961 reoosmeuldatiosm(due Decenber 1969).

3. Proparation of investment budgets to be based on Transport Survey 3-year investment budget (1968-70) ars recent annual budgets are priorities essentially based on survey priorities. Main exceptions are for low standard roads to open up virgin territcries. PORTS

1. Decentralization of Pxrt Adnnistration:

a) Completion by mid-1969 of irventories of assets of mrAjor Uderay for port of Santos and Rio de Janeiro ports b) Settirg up of autonoewnue and firancially viable entities Legislation enabling the set up of such entities has been lassed (1962) for the manages nt of maJor ports

2. Acccuntirg:

a) Appointssnt by the emd of 1968 of conaultunts to recrganize Consultants started work June 1969. accounti ng b) Introduction of new acoounting procedtres by the second Due to delay in appointing consultants, introduction of new procedures half of 1969 now planned for mid-1970.

3. Adoption of cost-based port charges Due to delay in 2 above now planned for end 1970.

DECE`PBR, 1 '4

ANh3EXC

BRAZIL

Second Plan of Action (PA-2)

Outline of Measures and Objectives

TGANSPORTPOLICY

Tipleaentation of GEIPOT reorganization during the course of VPi

RAILWAYS

1. Continuation of negotiations regarding merger of federal ard Sao Paulo state railways; 2. Staff

a) Reduction of staff to 120,000 by December 1971

b) Determination of minimum staff repiiresenrts - with assistance of consultants (SOFRERAIL) - by June 1970.

3. Tariffs

a) Tariff incmases - to be in line with inflation

b) Adoption of cost-based tariff policies by June 1970

c) Incorpcration into RFFSA's tariffs of the 10% tax on rail charges by June 1970 L. Uneconomdc lires

a) Implerentation of the 7,335 km program for closure of uneconoric lines during 1970

b) Study.a light density lines (traffie volua below 200,000 act ton km/route k-) by the end of 1970

5. Study to identify unprofitable stations far claare idutted by end of March 1970; ilmplementation to start by the end of 1970. 6. Preparation of feasibility studies prior to corstraction of new lines

7. Preparation of a 3-year investment program (1971-73) based on traffic projections and financial forecasts by June 1970

HIGHWAYS

1. Reorganization of Highway Administration

a) Implerentation of ItER's reorganization with assistance of US Bureau of Public Road ccnsultants

b) Gradual delegation of D13ER's maintenance and construction functions to the DER's.

First Step: Delegation of maintenance fanctions to DER' s of southern states and MUnas Gerais arid transfer of DNER's shame of Road Tax to cover related expenditures (daring 1970) c) Reorganization of DER's

2. Planning

a) Strengthening of DNER's planning capacity in mid-1970

b) Establishment within IWER of a central investmnt reviewtrantanico for national ard atote proiecto during 1971 3. Supervisi on

a) Improvement of construction supervisi on

b) Employment of consultants to assist INER's supervisory staff

c) Creation within DNERof a central group for coordinaticn of oupervision in mid-1970 4. Road user charges

Restructuring of road user charges based on the recommendations of Phase II of Transport Survey. Will hold discussions with the Rank in 1970.

FChTS

1. Decentralization of Port Administration

a) Creation of mixed enterprises fwr the mnagement of major ports.

b) Reorganizatius of DEPYNwith objective to become planning, policy arid rate controlling authority. Study to be carried out in 1970 for implementation in 1971 and 1972. 2. Accounting

Introdaction of modern accounting procedures (under study by consultants) during 1971

3. Adoption of cost-based port charges.

L. Training of personrel in port and financial msnagenent and port handling techniques.

MARCH1Y70

ANNEX D Page 1

REORGANIZATIONOF HIGHWAY ADMINISTRATION

1. To achieve the best results for purposes of road work planning and execution the Governmenthas decided to concentrateplanning and over- all supervisionof the national and state highway systems in DNER, with actual executionbeing delegated to state authorities. This will eliminate costly duplicationof facilitiesand allow for uniformityof criteria and methods. Specificallythis reorganizationwill make DNER responsiblefor:

(a) planning and regulatoryfunctions;

(b) financing of road programs and supervisionof utilizationof resourcesallocated;

(c) overall supervisionof physical operation and financial activities;

(d) supervisionof the applicationof legislation and rules; and

(e) completionof statisticaldata.

State authoritieswill be responsiblefor the executive side of the activ- ities, including construction,paving, generalbetterments, maintenance and ancillaryworks.

2. Reorganizationof DNER has commenced. A managementstudy con- ducted by Brazilianconsultants - Getulio Vargas Foundation- was completed in 1968 and DNER's new organizationalstructure was legalized in March 1969 (Decree Law 512, and Decree Law 64, 242). Concurrentlywith DNER's reorgani- zation the strengtheningand reorganizationof DERs is proceeding. During the two phases of the Transport Survey, reorganizationstudies were conducted for the main states and all reports are available in draft form.

3. Four states covered by the First Highway Project (Loan 567 BR) have taken the first steps toward legalizingthe organizationalchanges recommendedby the Survey:

Minas Gerais: This is already one of the best organized departmentsin the country. Legislation enabling DER to reorganizehas been presented to the state government(September 1969) and DER intends to implementthe survey recommendations during 1970.

Parana: The State Highway Departmenthas invited consultants(October 1969) to present proposals to define the program of implementationof the proposed reorganization. Legislativeaction is pending. ANNEX D Page 2

Santa Catarina: A draft law which embodies DER's new organizationhas been submitted to the state government for approval (September1969). Proposed new organizationis in close correspondencewith the Transport Survey recommendations.

Rio Grande do Sul: The State Highway Departmenthas invited consultants (November1969) to present pro- posals to define the program of implementationof the proposed reorganization.

4. Reorganizationof other DERs is also underway. The State of Rio de Janeiro has already approved the organitationalchanges recommended for its Highway Department. In the State of Bahia, regional districts have been created in accordancewith the consultants'recommendations. Other state highway departmentshave expressed their intention to imple- ment the recommendationsin the near future.

March 1970 ANNEX E Page 1

THE PROJECT ROADS

The principal economic features of the regions in which project roads would be located are given in Chapter 5 - Economic Evaluation. The essential technical characteristicsof the project roads, including de- scriptionof existing conditions and proposed standards, are given in Tables 13-15. Quantificationof economic merits are given in Tables 19- 21. Descriptionsof eachtproject road follow:

A. In the Northeast Region

Roads Pposed for Constructionand/or Paving

1. Route BR-222 (199.7 km). This is the only link in the important route between (capital of Piaui) and (capital of Ceara and the main industrial center of the region) that is not either paved or being pr _d. The area of direct zone of influence covers 17,000 km2 with an estimated population of 300,000 inhabitants. Most of the agricultural production of the zone of influence is consumed locally, so the most impor- tant flows on this highway are long distance hauls of cement, meat, petro- leum products, rice and cotton. The ADT for 1972 */ is 356 vehicles of which 79% are trucks. Traffic growth over the 1969-1976period is estimated to be 11%, and for the 1977-1991period, 8% per year.

2. Route BR-324 (105 km). This is the only link between the major road network of the state of Bahia and Salvador, its capital and major port. It plays a dual role of linking Salvador to its hinterland,where the movements are composed of short distance trips, as well as handling all long distance trafficwith origin and/or destination in this city. From km 0 to km 32, the 1967 ADT varied from a high of 10,730 to a low of 3,700 vehicles with an average of 40% trucks and an average annual traffic growth rate of about 9% until 1975 slackening to about 6.5% until 1991. In this section the road is very congestedand the accident rate is high (2.41 accident, and 0.33 fatalities,per million vehicle-km in 1967). From km 32 to km 105 the 1967 ADT varied from a high of 3,250 to a low of 2,600 vehicles, with an average of 45 percent trucks, and an average an- nual traffic growth rate of 15% until 1975 slackening to about 6% in 1991. One of the country'smost important industrial parks (Aratu) is being con- structed between km 8 and km 42, and is expected to contribute greatly to traffic increase. On the basis of the projected traffic it is recommended that Section I (km 0 to km 32) be constructedas a four-lane divided high- way, and for Section II (km 32 to km 105) improvementof the existing two lane highway is recommended.

*/ The 1972 ADT given throughout this Annex is composed of the ADT for 1968, projected to 1972, the year of opening of the project roads, plus the diverted traffic which is expected to take place the year of opening. ANNEX E Page 2

3. Route BR-101 - (1,011.7 km). These road sections are part of the 4,000 km highway which is one of the two major north-south routes in Brazil, the other being BR-116 further to the west. BR-101 starts in Osorio in Rio Grande do Sul, some 600 km from the border, and runs close to the coast, nearly the entire length of Brazil, linking the most important urban centers and ending in Natal, in Rio Grande do Norte. The direct zone of influence of this road project extends over 86,000 km2, and its populationis about 2 million. Traffic flows on this highway are composed of lumber, cacao and cotton originating in Bahia and Espirito Santo, and food products, cement, constructionmaterials, and iron and steel, originating in the manufacturingcenters along the coast. This road will also play an important role in the north-southmovement of people on business trips or as tourists. The 1972 ADT on these road sections varies from a low of 984 to a high of 1,398 vehicles, of which an average of 58% is trucks, and the estimated rate of traffic growth is about 11% a year.

Roads Proposed for Detailed Engineering

4. Route BR-104 (306 km). This highway has two functions,namely, inter-connectingthe productiveagricultural interior of the northeastern states, and providing an alternate route to BR-101 between Natal and the other important urban centers of northern Brazil, to Salvador, Rio de Janeiro and Sao Paulo in the south. The 1967 ADT on these road sections varied from a high of 700 to a low of 200 vehicles, with heavy vehicles varying from 75 to 45% and the traffic growth rate increasingbetween 6 and 10% per year.

5. Route BR-316/232 (302 km). This road plays an important role in integratingvarious parts of the northeast by providing a direct link between Teresina, Sao Luis and Belem on one hand, and Recife, the major growth pole of the region, on the other. Since most of the limited pro- duction of the area of influence of this road is consumed locally, the trafficwhich uses this route is primarily long distance through traffic between the above-mentionedcenters. The 1967 ADT was 205 vehicles of which 70% were trucks, and the annual growth rate is estimated at 11%.

6. Route BR-324 (4 km). This is an extension of Route BR-324 in- cluded in this project for construction(described above) and forms the major access route to the northern section of the city of Salvador. It is expected to relieve the congested traffic at the entrance of the city, and the estimated 1976 ADT is about 16,000 vehicles with 35% trucks, and the traffic growth rate per year is estimated to be about 6.5%.

*/ Although about 25% of this project road is in the Central-EastRe- gion, the present descriptioncovers the complete route. ANNEX E Page 3

Roads Proposed for FeasibilityStudies

7. Route BR-412/110 (207 km). This road provides a diagonal con- nection in the central part of Paraiba and Pernambucobetween two impor- tant east-westhighways, namely BR-232 originatingin Recife, and BR-230 originating in Joao Pessoa. The 1967 ADT was 265 vehicles of which 45% were trucks, and the estimated annual growth of the traffic is 10%.

8. Routes BA-30, BR-630, BR-030, BA-026/554 (617 km). This group of roads, located in the southernpart of Bahia, forms a small network of transportalternatives from the area of Bom Jesus de Lapa on the Sao Francisco river to BR-116 the major north south axis. The 1967 ADT varied from a low of 150 to a high of 265 vehicles on the various roads, the percentage of trucks varied from a low of 35% to a high of 65% and the average annual growth is about 10%.

9. Route BR-101 (136 km) is a missing link in this importantnorth- 4 south ax - which will significantlydecrease the distance of the long haul trafficwhich uses BR-101, by providing an alternativeroute to the pre- sent one which goes through Salvador. The 1967 assigned ADT was 640 vehi- cles with 72% trucks, and the rate of trafficgrowth is estimated to be 9% per year.

B. In the Center-EastRegion

.oads Proposed for Constructionand/or Paving

10. Route BR-135 (167.8 km). This is a part of the important link between Montes Claros in the north of Minas Gerais and Belo Horizonte, the state capital, about 433 km to the south. All of this route, except for the section included in this project, is paved or being paved and forms an important link to Sao Paulo. The area of the direct zone of influence of this road is 19,500 km2, and the population is about 185,000 inhabit- ants. It is an importantproducer of cotton, sugar cane and cement. Pro- cessing of agriculturaland animal prodtuctshas recently developedthe most importantbeing meats, vegetable oils, cloth, and skins and leather. The 1972 ADT is 385 vehicles,with 50% trucks and the estimatedvehicle growth rate is 10% a year.

11. Route BR-365 (114.5 km). The constructionand paving of this road completes an all paved highway between the western part of Minas Gerais and Sao Paulo to the south (via Route BR-50), Belo Horizonte to the east (via Route BR-262), and Goiania and Brasilia to the North (via Route BR-153). The direct zone of influenceof this road has an area of 5,600 km2 and a population of 130,000 inhabitants. Its main products are rice, cotton and corn; and cattle raising is important. Canal Sao Simao, where a hydro-electricplant is planned, is an importantregional tourist attraction and the constructionof this road will improve its accessibilityto the inhabitantsof the region's urban centers. The 1972 ADT is estimated to be 553 vehicles,with 37% trucks, and the growth rate is 8% a year until 1982 when it is expected to slacken to 7% until 1991. ANNEX E Page 4

12. Route BR-354 (110.7 km). This is a major link in the 824 km highway which runs between Eugenio Passos on BR-116 in the state of Rio de Janeiro, and Cristalinain Goias. It also links the importantregional center of Patos de Minas to Belo Horizonte via Route BR-262. (The 30 km sectionbetween Patos de Minas and Lagoa Formosa is being paved by DNER.) The area of direct zone of influence of this road is about 9,000 km2 and the population is close to 240,000 inhabitants. Its economy is based pri- marily on farming and cattle raising, and the most importantexports are corn, dairy products, and cattle. The 1972 ADT is estimated to be 327 ve- hicles, half of which are trucks, and the vehicle growth rate is expected to be 9% a year until 1977 slackening to 7% per year until 1991.

Roads Proposed for Detailed En ineering

13. Route ES-37/36 (69 km). This road is of regional importance in the north-centralpart of Espirito Santo and connectsNova Venecia and Sao Domingos, two regional centers, to Vitoria, the state's capital via Routes ES-2 and BR-259 (both under constructionand paving). The 1967 ADT was 185 vehicles of which 55% were trucks, and the estimatedvehicle growth rate is 9% a year.

14. Route RJ-133 (60 km) and Route RJ-B2 (60 kin). These form a continuouseast-west link in the northern part of the state of Rio de Janeiro, where at present the radial system is focused on the city of Rio de Janeiro and most of the east-westmovements are thereforeobliged to pass through it. Thus, by providing an alternate route, this link is expected to decrease the distance of the east-westmovements, and help in relievingthe congestionin the city. The 1967 ADT on Route RJ-133 was 535 vehicles with 40% trucks, and on Route RJ-82 335 vehicles with 84% trucks. Average annual traffic growth rates on these roads are 8% and 6% respectively.

15. Route BR-354 (128 km). This is a continuationof Route BR-354 included in this project for constructionand paving (discussedabove), and are parts of a direct route from Patos de Minas, with its important agriculturalarea, and Sao Paulo, via Route BR-381. The 1967 ADT was 205 vehicles with 48% trucks, and the average annual growth rate is 11%.

16. Route MG-174/168/28(188 km), Route MC-157 (101 km). These form an efficientregional network, serving an important agriculturalarea in southwest Minas Gerais by inter-connectingthe major regional centers. The 1967 ADT on these links varied from a low of 190 vehicles to a high of 435 vehicles,and the percentageof trucks varied from a low of 45 to a high of 51% while annual vehicle growth rate is about 10% throughout.

Roads Proposed for FeasibilityStudies

17. Route ES-43 (165 km) is an important regional road in north- western Espirito Santo, connectingit to the transportnetwork of Bahia. ANNEXE Page 5

The 1967 ADT was 180 vehicles with 34% trucks and the average annual traffic growth is estimated to be 8%.

18. Route BR-135 (202 km) is the main road connection between Rio de Janeiro and Belo Horizonte, with a 1968 ADT varying from a low of 5,000 vehicles on the lesser travelled sections to a high of about 20,000 vehicles on the section near Rio de Janeiro of which about 35% are trucks. A combination of poor alignment and heavy traffic have made this road congested, and the feasibility study is needed to recommend a new align- ment and suitable design standards.

19. Route MG-10 (148 km) links Pirapora on the Sao Francisco River, to Corinto in the central part of the state, and from there, via Routes BR-135 and BR-40, to Belo Horizonte. The 1967 ADT was 1965 vehicles with 35% trucks and the average annual traffic growth rate is 9%.

C. In the Center-West Region

Roads Proposed for Construction and/or Paving

20. Route BR-452 (181 km). This forms a link in the 490 km Route BR-452 which, together with parts of BR-364 and BR-50, provide the best route from Cuiaba to Sao Paulo. It also provides, with BR-364 and BR-266, the best route from Cuiaba to Belo Rorizonte. Its direct zone of influence is 30,000 km2 and its population is estimated at 280,000 inhabitants, with a growth rate of 6% per year, double that of the country, due to the high rate of migration. The economy of the area is based on agriculture, the most important crops being sugar cane, rice, bananas, and corn, as well as cattle raising. The 1972 ADT is estimated to be 740 vehicles with 63% trucks and the vehicle growth rate is expected to be 8% a year.

Roads Proposed for Detailed Engineering

21. Route BR-153 (254 km). This is a part of the highway between Brasilia and the central regions of Brazil on one hand, and Belem and the northern regions of the country, on the other. Since its construc- tion 10 years ago, it has played an important role in opening up the interior of the country that has good agricultural and cattle raising potential. The 1967 ADT was 420 vehicles with 71% trucks, and the growth rate of vehicles is about 10% a year.

22. Route BR-060 (274 km) is a link in the highway that connects Brasilia and Goiania to Cuiaba, via Route BR-364 (included in this pro- ject for a feasibility study, described below). It also connects at Rio Verde with Route BR-452 included for construction in this project (de- scribed above), and these two roads together link the whole region direct- ly to Sao Paulo. The 1967 ADT was 312 vehicles with 46% trucks and the average annual traffic growth is 8%.

23. Route BR-163 (71 km). This is a link in the highway connecting Cuiaba, the capital of Mato Grosso, to Campo Grande, the major growth ANNEX E Page 6 pole in the southern part of the state where agricultureand cattle graz- ing are important. The rest of Route BR-163, from Bandeirantesto Cuiaba, is included in this project for a feasibilitystudy (describedbelow). The 1967 ADT was 340 vehicles with 74% trucks and the annual rate of growth of the vehicles is 6%.

Roads Proposed for FeasibilityStudies

24. Route BR-364 (661 km) is the major road connectionbetween Cuiaba, southern Goias and western Minas Gerais connecting,at Canal Sao Simao on the Goias-MinasGerais border, with Route BR-365 included in this project for construction. The 1967 ADT was 285 vehicles,with 50% trucks, and a traffic growth rate of 7% annually.

25. Route BR-364/163 (758 km) is the continuationof the Route BR-163 road section included in this project for detailed engineering (discussed above), and provides the major north-southaxis in the state of Mato Grosso. The 1967 ADT was 400 vehicles,with 50% trucks, and the estimated traffic growth rate is 8% a year.

D. In the Far South Region

Roads Proposed for Constructionand/or Paving

26. Route BR-470 (88.6 kmn). This is an extension of Route BR-470 financed in the Bank's First Highway Project and forms a part of the 435 Im highway which runs from Itajai on the coast of Santa Catarina to Lagoa Vermelha in Rio Grande do Sul. There it connects with Route BR-282 that terminatesnear the Argentineborder. The area of the direct zone of in- fluence of this road is about 3,500 km2 , and its population about 140,000 inhabitants. The economy of this area is based on agriculture, and the most important products are lumber, potatoes, corn and wheat. The 1972 ADT is estimated to be 1,050 vehicles with 55% trucks, and the vehicle growth rate is expected to be 14% until 1976, slackening to 10% thereafter until 1991.

27. Route BR-158 (62.8 km). This will be the first paved link in the 2,700 km highway which runs from the northern limits of Mato Grosso to the Uruguay border. The area of the direct zone of influence of the project road is about 7,500 km, and its population about 220,000 inhabit- ants. Its economy is based on agricultureand pig raising, and the main products are tobacco, rice, corn, wheat and potatoes. The 1972 ADT is estimated to be close to 1,000 vehicles, 41% of which are trucks, and the average annual growth rate is about 9% until 1977, slackening to 6% there- after until 1991.

28. Route RS-38/11 (47 km) and Route RS-3 (50 km). These are locat- ed in the very fertilearea northwestof Porto Alegre and provide improved transport between the major urban centers of the area (Lajeado in the case of Route RS-38/11, and Santa Cruz in the case of RS-3) and Porto Alegre. Route RS-3 is a continuationof Route BR-386 which is being financed by the ANNEX E Page 7

Bank's First Highway Project. The common zone of influenceof these roads has an area of about 20,000 km2 and a population of about 600,000 inhabit- ants. The regional economy is based on agriculturewith potatoes, wheat and tobacco the main products, in addition to the raising of pigs. The 1972 ADT for Route RS-38/11 is estimated to be 1,200 vehicles of which half are trucks, and the annual rate of growth is about 9%. The 1972 ADT for Route RS-3 is about 600 vehicles,with 63% trucks, and the growth rate is 8% per year.

Roads Proposed for Detailed Engineering

29. RotutePR-12 (44 km). This road is of regional importance and connects a fertile agriculturalarea in northern Parana to the east-west oriented transport system of the state, via Route BR-369 which also runs across the state of Sao Paulo. The 1967 ADT was 1,295 vehicles with 56% trucks, and the average annual rate of vehicle growth is 11%.

30. .oouteBR-153 (241 km) forms an important inter-regionalhighway on the central axis of the three southern states linking the area to the consumption centers to the north. The 1967 ADT was 325 vehicles of which 64% were trucks, and the average annual rate of traffic growth is 15%.

31. Route BR-386/158 (163 km). The constructionof this road sec- tion will complete the "Kennedy Highway" which connects the western part of Santa Catarina and northwesternRio Grande do Sul, to Porto Alegre. The last 54 km section outside Porto Alegre was included in the Bank's First HlighwayProject. The 1967 ADT was 250 vehicles of which 58% were trucks, and the average annual rate of vehicle growth is 14%.

32. Route RS-19 (25 km). This road north of Porto Alegre is of regional importance and connects an importantagricultural area to Route BR-116 the most importantnorth-south axis in the region. The 1967 ADT was 925 vehicles with 61% trucks and the average annual traffic growth is 10%.

Roads Proposed for FeasibilityStudies

33. Routes PR-13 (221 km) and Route PR-67 (80 km) form a small net- work of road alternativesin the agriculturalnorth-central part of the state of Parana, linking a number of regional centers to the main diagonal highway of the state, Route BR-376, and through it to Curitiba, the state capital. The 1967 ADT varied from a high of 2,000 to a low of 385 vehi- cles on the various road sections, the truck percentage from 62 to 40, and the average annual rate of traffic growth from 8 to 15%.

34. Route RS-54/48 (246 km) and Route RS-50 (128 km) form a small road network in the northern part of Rio Grande do Sul, connecting the regional centers of Santa Rosa and Ijui to Route BR-386, included in this project for detailed engineering,and through it to Porto Alegre. The 1967 ADT ranged from 200 to 135 vehicles on these roads with 60% trucks, and an annual growth rate of vehicles of 15%. ANNEX E Page 8

35. Route BR-158/377(235 km) is a continuationof Route BR-153 included in this project for construction,linking the north-centralparts of Rio Grande do Sul to Santa Maria, an important town in the center of the state. The 1967 ADT was 425 vehicles,with 62% trucks, and the aver- age annual traffic growth is 11%.

March 1970 ANNEX F Page 1

BRAZIL

Consultants Engaged in the Preparation of the Second Highway Construction Project

I. Detailed Engineering Studies

(For roads proposed for construction and/or paving)

Consultants and Nationality State Road Number

Astep/H. de Santana (Brazil) Piaui/Ceara BR 222

(Xaver Dorsch (Germany) Bahia BR 324 (Tenpo (Brazil)

Hidrcservice (Brazil) Bahia BR 101

Astep SA (Brazil) Bahia BR 101

Tenpo (Brazil) Bahia BR 101

Copavel (Brazil) Bahia BR 101

ESPA (Brazil) Espirito Santo BR 101

Euler (Brazil) Rio de Janeiro BR 101

ETUC (Brazil) Minas Gerais BR 135 (MG1)

Consol (Brazil) Minas Gerais BR 365 (MG54)

Consol (Brazil) Minas Gerais BR 354 (MG163)

Proenge (Brazil) Goias BR 452

Etel/Planisul (Brazil) Santa Catarina BR 470 (SC43/68)

Etel/Planisul (Brazil) Rio Grande do Sul BR 158

Louis Berger (Brazil) Rio Grande do Sul RS38/11

Sondotechnica (Brazil) Rio Grande do Sul RS 3 ANNEX F Page 2

II. Feasibility Studies

(For roads proposed for detailed engineering)

Consultants and Nationality State Road Number

Astep (Brazil) Rio Grande do Norte/ Paraiba/Pernambuco/ Alagoas BR 104

Technometal/Rodio (Brazil) Piaui/Ceara BR 116/232

X. Dorsch (Germany) Bahia BR 324

Proenge/Lasa/Etapa (Brazil) Minas Gerais BR 354 (MG25)

Hidroservice (Brazil) Goias BR 153

Enecon (Brazil) Parana/Santa Catarina/Rio Grande do Sul BR 153

Enecon (Brazil) Rio Grande do Sul/ BR386/158 Santa Catarina (RS51/SC102/11)

March 1970 P / r Iii 1 1> C

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DECEMBER 1969INRrR 1RD 2740

MAP 4

BRAZIL Rums A 'y. o Are.... n- SECONDHIGHWAY CONSTRUCTION PROJECT / U E STATES OF RIO GRANDE DO NORTE, PARAIBA, o A PERNAMBUCO AND ALAGOAS | Mosoro M.c,u P-ved roads. * N Roadsgrade -onatruct.d to Hnalenginsering standards ...... Y Unpavedroads x°, - - -- Roads .,der construct-ion xA a .R-30o \ JoEo edniana @5,55 co-n -- +++ -Plarned roads aeI 5 A DNER field oais-tenasn h.adq-ort-ns I r a 0 * DER fi.ld ma-nfenanse headq-art-rs JoaQanb. AuRsO a0A dt3 HIGHWAYSINCLUDED IN THE SECONDPROJECT a. SCOO -'_ rD' NATAL For_ filed nFgineerng _tid soa Fonf-ibility tudy ...... P du - 4 Stutn bo-ndary w r *o NA 4~~~~~~~~~~~~~~~~~~~~~~~~~S xx f onvo rorras C-, Nov03 ont Crvv x

e *tico~~~A A >x r t *e-cac r,~--- C 0 5 C.~~~~~~~~~~~~~~~~~~~~-

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MAP 5

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FESRUARY1970 * fiel*E meneac eaqatr A Masiopul~~~~~~~~~~~~~A0FZGyr E.rpoi

Maa;r , Protonr 3R-24 -'--'S road eUpaved - Roadsunderconstruction ~ ~ ~ ~ 6- 3

SECOND~~~~HIGHWAYS ICOUENSTRUCTICOND PROJECT .F,i

- F ood codetructonand/rctving

CeceeCeC. For feasbility study n S50C 3500 '150 Slate boundary 'ESANbTOI SANTO >. .'~~'l' PedroCaori KILOMETERS IBRD-2742R FEBRUARY1970

MAP 6

rn--,A-Hj IIHA BRAZIL ..T3AI SECOND HIGHWAY CONSTRUCTIONPROJECT 'O.- STATES OF ESPIRITO SANTO AND RIO DE JANEIRO

Paved roads /- * *...... Roadsgrade constructedto final engineeringstandards eS iv 0 a Unpavedroads e• * - - - - Roads under construction e ++-4-+- -+- PlGnnedroads ¼ En *, A ONER field maintenance headquarters s vaedr: * DER field maintenance headquarters G VosFrneioed - *, S0. HIGHWAYSINCLUDED IN THE SECONDPROJECT N. .. For construction and/or paving 2 For detailed engineering ...... For feasibility study

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DECEMBER 1969s..V,Pt,Ro g IBRD 274r

DECEMBER 1969 IBRD 2743

MAP 7

BRAZILB A SECOND HIGHWAY CONSTRUCTION PROJECT I , STATE OF MINASGERAIS t

Paved roadsd 4 t 4 ,''vrs ofqt0 .0 0/w **e* Raads grade ovestruoted ro tirl sogieserirgtardards a-7 1 st t Udpoaedroads a 7 o--- / / r/x -- _ Roads aedsrooonstrvorior 1 t' d tta. x rvooersMC v; S -s--s-4--r Plarsd roads wi or t F A DNER field male-enarce headquarters / - r Vo ad U DER fltld sminte-a-os headqu.rrsrs Fo.ooro ad. HIGHWAYSINCLUDED N THE FIRSTPROJECT c v _ Nr- ojrf ; F For ooretroorlor ardoor pamgvr\Tolc5ic niavSIrWvg gf :_ -osu cD|o HIGHWAYS tNCLUDED IN THE SECOND PROJECT X \* Te \ qI4 For .o.struotion ard/or paoirg For detl.,Idegarirg ...... FoT feOoIbIlltr stody

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MAP 8

BRAZIL. SECONDHIGHWAY CONStRUCTION PROJECT STATES OF MATO GROSSO AND GOIAS Pavedroads ...... Roads grade onstruted firl engineiring standards Unpavedroads - ___- RReasunder construction -- -4-*'- Plannedroads A DNER field maintenanceheadquarters * DER fielt maintenanseheadquartera HIGHWAYSINCLUDED IN THE SECONDPROJECT = Fornconstr`etian and/ir paving 4"', 4 MAR NHA A For detailedengineerling A M A Z O N A S 4 . ... For feasibility study Arg-uMAH State boundary x - - - Internationalboundan ,/t

/ tr __ _ _ S _+ 'r tbvo, I

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LDECEMBER1969IBD24

MAP 9

rPaloS AOProCearJ PAU LO SECOND Tx/ sompclo. oC- Pt. S A O P A U L O SECONDHIGHWAY ~BRAZILCONSTRUCTION PROJECT

°30 s J.. to In Pt.. Al-ood. STATE OF PARANA i %-l *sON°..Londrino doSmP.o t Paved1 / t roads 1 -A; ...... Roadsgrade constructed to final engineering Loando '# standards Po CAMBAR Unpavedroads C) PARAh ~~~~~~~~~~~~~~~~~~~~~~~*--- -- Roads onderconstruction o oU.p'I. h -I- -f- -s-- Plannedroaids '0< + ,R o Al D VaiTtenace Pi.; A DNER field headquarters * I om Pt,~ DER field maintenanceheadquoarters 4 ELO~~~~~~~~NDRNOso o.hHIGHWAYS INCLUDEDIN THE FIRST PROJECT 7' MARIN N Ft.. - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Forconaftrutionanallor paving 4 JANDOIS OPUCAROSO~~~ conaoiAo~~ Tdoaa HIGHWAYSINCLUDED IN THE SECONDPROJECT

0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~oToledo~~ ~ eaie niern

S A N T A\ I+lVC A T A R I N A. DECEMBER1969 U nternatio18RD -274n6

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MAP I

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STATEDO SUL~~~~~~~~~~~~~~OF RIO GRANDE

Paoea~roada ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~ t . Roadsgradeconotuotnotodm0 engireerlsg stndard

-- _-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a t Rod '/ underr roscutrn.-a +++ | Plonnsd roods 9tfi 4/2t Jl Xf 1~~~~~~~~~~~~~~~~~~~P.hainar.

*E il ainccacTE JadqoraorO J Sa SJ S.tL5O O

Unpavedroads~~~~~~~~~~~~~~~~~~~~~~~ HIGHWAYS INLUE IN THFISTROJ E CAf /' *

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SECOND ~HIGHWAYSICOE NSTRUCTIRST PROJECT

HIAHWAYSRIOCUE IRNDTESEON PROEC

-~~ ~~~~~~~~~~~~~~~~~~~~~~HD Z741STNc Fo,dtaled an.0d ig ooon SECONDEHIHA9CNTUCINPRJC

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DECEMBER1H69 ~ DE I RiHdO-2..meh.dq..