Document of The World Bank
FOR OFFICIAL USE ONLY
Z_A, 302 05l- - ~- Public Disclosure Authorized Rfport NNo. 7694-CR
STAFF APPRAISAL REPORT
Public Disclosure Authorized COSTA RICA
TRANSPORT SECTOR PROJECT
APRIL 23, 1990 Public Disclosure Authorized
Country Department II
Public Disclosure Authorized Infrastructure and Energy Operations Division Latin America and the Caribbean Regional Office
This documenthas a restricteddistribution and mas be usedby recipients only in the performance of their official duties. Its contentsmav not otherwisebe disclosedwithout World Bank authorization. r
CURRENCY EQUIVALENTS
Currency Unit - Colon (C) US$1.00 = C 87.00 (April 19, 1990) C 1 million = US$11,494
Fiscal Year
January 1 - December 31
Units of Weight ar.d Measures: Metric System
Metric British/US Equivalent
1 meter (m) 5 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 Kilogram (Kg) = 2.20 pounds (lb) 1 metric ton (m ton) = 2,205 pounds
Abbreviations
DGP Directorate of General Planning ERR Economic Rate of Return FRG Federal Republic of Germany GDEF General Directorate of External Financing GDMT General Directorate of Maritime Transportation HDM III Highway Design Model-Version 3 ICB International Competitive Bidding IDB Inter-American Development Bank IMP Investment and Maintenance Plan INCOFER Railway Authority INCOP Pacific Port Authority JAPDEVA Atlantic Port Authority LCB Local Competitive Bidding MNREM Ministry of Natural Resources, Energy and Mines. MOPT Ministry of Public Works and Transport PCR Project Completion Report PPAR Project Performance Audit Report SDE Sub-Division of Equipment SDM Sub-Division of Maintenance SOE Statement of Expenditures USAID U.S. Agency for International Development ItL, rLFsAUL Ljt tI Lx
COSTA RICA
TRANSPORT SECTOR PROJECT
TABLE OF CONTENTS
Page No.
PROJECT SUMMARY ...... - iii
I. THE TRANSPORT SECTOR ...... 1
A. Transport Development and the Economy. B. Transport Planning and Coordination. 2 C. Main Sector Issues...... , 3 D. Transport Finances and Cost Recovery. 7 E. Transport Sector Strategy. 9 F. Bank Involvement in the Sector.10 G. Bank Strategy.11 H. Rationale for Bank Involvement. 12
II. THE PROJECT .12
A. Project Origin and Objectives. .. l B. MOPT's Investment and Maintenance Program (IM?) for 1991-95.13 C. Project Description...... 14 D. Project Costs.16 E. Execution and Procurement.17 F. Disbursements and Auditing ...... 19 G. Economic Justification.20 H. Beneficiaries...... 22 I. Environmental Impact.22 J. Assessment of Risks...... 23
III. AGREEMENTS REACHED AND RECOMMENDATI .23ONS
This report is based on the findings of an appraisal mission composed of Messrs. K. Ohbi (Economist), J.C. Sallier (Sr. Engineer), Z. Raanan (Sr. Financial Analyst,, H. Castro and A. Harding (Consultants), who visited Costa Rica from August 8 to August 19, 1988, and of a post-appraisal mission composed of Ms. M. Pokorny (Economist) and Messrs. J. Perrone and J. Kogan (Consultants) who visited Costa Rica from October 30 to November 8, 1989. Mesdames N. Aran,ibia and M. Leal helped in the preparntion of the report.
This documenthas a restricieddistribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization. - ii -
TABLES:
1.1 Road Network .. 26 1.2 Sector Share of GDP . . 27 2.1 Estimated Schedule of Disbursement . . 28 2.2 SunmmAryEconomic Evaluatior of the Roads in the First Year Work Program . . 29 2.3 Summary Economic Evaluation of the Rehabili- tation of the Puntarenas Jetty ...... 30
FIGURES: 1.1 Revenues from User vs. Road Expenditures 31 1.2 Structure of Road User Charges . . 32
ANNEXES: 1 Road Transport . . 33 2 Action Plan for the Decentralization of Cantonal Road Maintenance . . 38 3 Rationalization of Railway Services ..... 41 4 The Port Sub-Sector . . 54 5 Action Plan for Port Rationalization .... 61 6 Performance Targets of the Project ...... 62 7 The IMP and the Project . . 63 8 Road Rehabilitatioi.and Periodic Maintenance Program . . 64 9 Detailed Project Cost . . 71 10 Selected Documents and Data Available in the Project File ...... 79
Chart 1 - Ministry of Public Works and Transport...... 73
Chart 2 - Public Works Division...... 74
Chart 3 - Transportation Division...... 75
Map: IBRD 21070 COSTA RICA
TRANSPORT SECTOR PROJECT
PROJECT SUMMARY
Borrcower: The Republic of Costa Rica
Loan Amount: US$60 million equivalent
Terms: Repayment in 17 years, including < years if grace, at the standard variable interest rate.
Executing Agencies: Ministry of Public Works and Transport (MOPT) for the road components and technical assistance, the Pacific Port Authority (INCOP) for the ports components, and the Railway Authority (INCOFER) for the railway rationalization plan. The Atlantic Port Authority (JAPDEVA) would execute the management information system component.
Project Description: The project supports institutional measures to increase the efficiency of the sector and a slice of MOPT's 1991-9' Investment and Maintenance Program (IMP). The main institutional measures call for scaling down the railway, designing a strategy for the maintenance of Cantonal Roads, improving port operations, ensuring soundness of the sector's annual investment programs, and encouraging increabed participation of the ptivate sector. The institutional strengtnening measures consist of technical assistance and training (47) for: (a) developing a Transport Plan and improving Investment programming, project preparation and evaluation in MOPT's Directorate Ge..eralof Planning (DGP); (b) tariff evaluation in MOPT's tariff section and for tariff setLcingand costing in TNCOP; Kc) implementing a pavement management system in DGP and strengthening road maintenance management in MOPT's Sub-Division of Maintenance, (d) improving information management in JAPDEVA; (e) implementing an action plan to rationalize railway services in INCOFER; and (f) training for mid level management in MOPT, JAPDEVA and INCOP. The physical components are: 1 (i) rehabilitation and upgrading of trunk roads in the import/export corridors (42Z); (ii) periodic maintenance of other main roads feeding the corridors (302); (iii) replacement of the Puntarenas jetty (9Z); (iv) equipment and tools for (a) road maintenance, (b) road safety, (c) pavement management, (d) information systems in MOPT, INCOFER, INCOP and JAPDEVA (e) grain handling operations in the port of Calderas, (f) control of
1/ The figures in parentheses refer to the percentage of project costs. - ii -
In-transitcargo, and (g) rat.ltrack maintenance (9?); and (v) engineeringand supervisionof (i) through (iii) (6Z).
Benefits: Quantifiablebenefits would accrue to the economy at large through: (i) reductionsin road #'ransport costs resultingfrom improved road conditions; (ii) reductionsin ship waiting time resultingfrom rehabiliLationof the Puntarenasjetty and port productivityimprovements in Caldera; and (iii) increase in efficiency resultingfrom restructuring railway services. The project has also non- quantifiablebenefits related to improvementsin the tiansport sector arising from the technical assistanceand training under the project.
Risks: The project would face no importanttechnical risks and no adverse environmentalimpact. Because of the project's policy emphasis, there are risks related to the Government'scommitment and abil_ty to implementthe needed institutionalreforms. In the particularcase of the restructuringof railway operations,the contract-programsigned between the railways and the Ministry of Public Works and Transport,the Ministry of Finance and MIDEPLAN state the obligationsof the parties regardingthe future developmentof the railways. Another risk is related to the availabilityof counterpartfunds for the road component,which may lead to slower than planned execution. To reduce this risk, MOPT will maintain a project accountwith an initial deposit of US$1.2 million equivalent.
Economic evaluation: Annual work programs for the rehabilitationand periodic maintenanceof roads would be evaluated according to agreeceeconomic and technicalcriteria and eligible subprojectswould have to yield a minimum 12Z economic rate of return (ERR). The estimatedERR for the first year work program for roads is 35Z and for the replacementof the Puntarenasjetty and minor investmentsin grain handling at Caldera it is 322. - {ii -
Proiect Costs:
Components Local Foreign Total ------USS million------_
Institutional ProRram! 1.0 2.2 3.2
Roads
Rehabilitation/Improvements 9.1 23.6 32.7 Periodic Maintenance 6.7 17.1 23.8
Equipment
Road Maintenance, Pavement 0.2 7.4 7.6 Management, Grain Handling, Laboratoriel, Information Systems and Traffic Safety
Ports
Constructicn of Puntarenas Jetty 2.6 3.9 6.5
Engineering & Supervision 3,1 1.6 4.7
Base Cost 22..' 5J.8 78.5
Contingencies
Physical 2.0 5.0 7.0 Price 3.8 7.6 11.4
Total Costs 28.5 58.4 96.9
Estimated Financing Plan
Government of Costa Rica 28.5 8.4 36.9 IBRD - 6).0 60.0
Estimated Disbursements:
Bank Fiscal Year
1991 1992 1993 1994 1995 1996
------(US$ millions)------
Annual 9.6 12.8 16.5 11.4 7.7 2.0 Cumulative 9.6 22.4 38.9 50.3 58.0 60.0 I. THE TRANSPORT SECTOR
A. Transport Development and the Economy
1.01 With about 51,000 sq. km of area and 2.7 million inhabitants, Costa Rica is one of the smallest countries in the region. About half of the population lives in urban areas, concentrated in about 3,250 sq. km of the central valley. The country has a 300 km northern border with Nicaragua and a 363 km southern border with Panama. Costa Rica's transport system is formed primarily by about 35,000 km of roads (Table 1.1), two main port complexes (Lim6n/Moin on the Atlantic and Puntarenas/Celdera on the Pacific), the railway network linking the two port complexes via San Jose, the Juan Santamaria international airport and a pipeline connecting the refinery on the Atlantic coast to the central valley where most of the fuel is consumed. Minor ports and airports and some inland waterways complete the system (Map No. IBRD 21070). San Jose is 160 km from the main port complex of Lim6n/Moin on the Atlantic Coast and 90 km from the Calderas/Puntarenas port complex on the Pacific Coast. The resulting short distance haulage coupled with the country's rugged terrain makes roads the preferred mode of transport.
).02 During the 1970's the expansion of basic infrastructure and a sharp increase in social sector expenditures contributed to a GDP growth averaging nearly 62 per year. At the same time, Costa Rica's public education, health and welfare programs placed the zountry's social indices among the highest in the Western Hemisphere. The public sector-led development, however, resulted in growing public deficits tihatwere incrpasingly financed by mounting domestic and external debt In the ear!.y 1980s, when international cor.ditionsd¶eteriorated and foreign financing to Costa Rica dwindled, the country fell into its most severe recession in 30 years; in 1982, GDP dropped by over 7Z and the annual rate of inflation reached 90Z. To address th,eseproblems, successive administrations have had to engage in stabilization and adjustment programs which ruccgssfully resulted in the virtual elimination of the non-financial public sector deficit.
1.03 The Government is now embarked in a recovery effort that adequately stresses export promotion and diversification. This expansion will certainly lead to renewed claims on the country'" transport sector. However, past adjustments were achieved largely by slaehing capital expenditures and the economic arid social infrastructure of the country has begun to show increasing degrees of deterioration. Thus, public investment wculd have to increase in several sectors to stop and reverse this deteriorating trend. Since tight budgetary constraints are likely to remain in the medium term, it Is essential to :eview the economic and social priorit.es for public sector expenditures, tsrget investment according to tnese priorities, and improve the overall efficiency of public sector programs.
1.04 The future dev.elopmentand improvement of transport infrastructure will be shaped by Costa Rica's heavy reliance on the export of agricultural commodities, which are sensitive to both the cost and the reliability of -2-
domestic transportation facilities. Its imports consist primarily of petroleum products and intermediate and capital goods. Particularly for exports, the demand for transportation has traditionally been dominated by bananas, which account for about 602 of the country's export tonnage. Bananas are produced mainly in the Atlantic Province and hauled about 50 km for export through Moin. About one third of the bananas are transported by rail and the rest by road. The other major export commodities are cement, coffee, sugar and meat which altogether account for about 242 of export tonnage. In line with the size of the country, transport distances are characteristically small. The average haul distances for about 1.2 billion ton kilometers of freight moved annually are 102 km for the railway and 120 km for road transport. As already mentioned, given the short haul distances and the rugged topography, the road has a clear advantage over the railway.
1.05 About 53% of the freight movements are domestic with the remaining 47Z oriented toward foreign trade. Overall, 93% of the freight is moved by road and the remaining 72 by rail. Nearly all passenger traffic of around 7 billion passenger kilometers annually is by road. Although the share of air in domestic passenger and domestic cargo transport has been declining rapidly in recent years, both the international air passenger and ca-go traffic have shown consistent growth since 1980 with the internatienal passenger traffic growing at about 2.5Z and international cargo at 8.41 annually. The growth of international air cargo traffic, particularly since 1984, reflects the growing importanze of non-traditional exports in Costa Rica's merchandise exports.
1.06 The relative importance of each transport mode's contribution to GDP is shown in Table 1.2. Over half of the value added by the sector to the GDP has historically been by the road sector. Maritime and fluvial transport's share has stabilized at 17Z of the total value added by the sector to GDP whereas the contribution of rail has declined consistently to the present 4.5Z, in line with its diminishing role in the sector.
B. Transport Planning and Coordination
1.07 MOFT has overall authority in matters of transport policy, planning and coordination (Chart I). It carries out its transport responsibilities through two of its Divisions: (i) Public Works, of which the General Directorates of Roads (GDR) and Port and River Works (DGOP) are part (Chart II), and (ii) Transportation (Chart III). Under the Transport Division, the General Directorate of Maritime Transport (GDMT) is responsible for ports and shipping, the General Directorate of Civil Aviation (GDCA) is responsible for airports and air traffic while the General Directorate of Road Transport (GDRT) is responsible for the trucking industry. The policing and enforcement of the transport regulations are the responsibility of the General Directorate of Traffic Po,lice (GDTP) while the road safety policy formulation is the responsibility of the General Directorate of Road Safety (GDRS) within the Transportation Division. The General Directorate of Railways (GDR) in the Transport Division is in charge of regulations and tariff control for the railway.
1.08 While moua' plans are executed and coordinated by the specific Divisions of MOPT, the overall sector planning responsibility falls on the - 3 -
Directorate General of Planning (DGP). DGP reports directly to the Minister and works within the framework of the National Planning Law of 1979, which subordinated all publil and autonomous institutions to the overall national development planning process. Economic planning at the national level is the responsibility of the Ministry of Economic Planning. The transport planning mechanism was considerably strengthened by the establishment at DGP of a planning and coordinating department, with jurisdiction over all modes, to prepare integrated transpo:t plans and investment programs, formulate policy and foster intermodal coordination. While the Government is committed to strengthening transport planning, it experienced, in the past, institutional problems with the ports and railways, which retained in practice a substantial degree of independence and carried out their plans without due regard to intermoda. relations and proper feasibility analysis. In general, there is a need to expand the planning framework to encompass piuriannual programs based on economic criteria and closely link them to the budgeting process. The improvement of transport planning and coordination is an objective of the project, which would help DGP with the formulation of transport policy and investment plans for the sector as well as strengthen planning and operations at the modal level (paras. 1.16 and 2.13).
C. Main Sector Issues
1.09 There are four main sector issues: (i) road maintenance; (i.i) transport sector management; (iii) role of the railway; and, (iv) ports productivity. The following paragraphs present these issues and the pruposais to address them:
(i) Road Maintenance
1.10 With about 0.69 km of roads per kilometer square of surface area, Costa Rica's road density is comparable to that of the United States (Annex 1). Up to recently, MOPT focused mainly on road building, while road maintenan,e received insufficient attention. This weakness in management of the road sul'sectoris illustrated by the poor physical condition of the national and Cantonal (secondary) road system and the existence of a backlog of rehabilitation and periodic maintenance. MOPT is nominally responsible for the maintenance of only about a fifth of the country's 35,000 km of roads (about 7,000 kms) of which about 3,300 are paved. The municipalities, whicb are responsible for the Cantonal roads, cannot maintain theirs for want of financial and technical resources. As a result, MOPT is pressed to use part of the resources appropriated for the maintenance of the national roads to do urgent works on the Cantonal roads. Since the available resources are insufficient, neither road system is satisfactorily maintained and the high priority roads in the country's import/export corridors are showing increasing distress. Under these conditions, rational planning, programming and execution of maintenance is not possible.
1.11 The Government recognizes that in the absence of firm arrangements for the rehabilitation and maintenance of Cantonal roads, MOPT will continue to face pressures to neglect the maintenance of high priority national roads in favor of the Cantonal roads, with a strong risk that neither of the networks would be adequately maintained. To address this. problem, the Government presented an action plan for ;he rehabilitation and maintenanceof the Cantonal road system, includingannual physical targets to be achieved and proposed sources of funding. The plan is based on the rehabilitationand improvementof 556 km of feeder roads during the period 1991-1995with financingmostly expected tc be provided by IDB, which already approved a technicalcooperation loan tor the related feasibility studies. During negotiationsit was agreed that the Governmentwould carry out its 1991-1995plan for the rehabilitationand maintenanceof the Cantonal Road System, and would review with the Bank, no later than June 30 of each year its compliancewith the Plan during the previous year and inform the Bank on the proposed modificationsof the plan (para. 3.01 (a)). Also, the Federal Republic of Germany (FRG) is financingthe maintenanceof about 10,000 km of gravel and earth roads and the acquisitionas well as rehabilitationof road maintenanceequipment.
1.12 While the agreed plan ensures in the medium run a clear division of the resourcesallocated to each of the networks, it does not provide a permanent solution to shield MOPT from the pressures of attending the needs of the Cantonal roads on the basis of other than economic criteria. There is therefore a need to develop a strategy for the gradual delegation to the Municipalities of the responsibility that the law confers them to maintain the Cantonal road network. An existing US/AID study, together with the study to be carried out with IDB assistance, should provide a solid basis on which to develop detailed institutional and financial proposals to assist the Municipalities in discharging their road maintenance responsibilities. To this end, the Government developed an action plan, satisfactory to the Bank for the gradtualdecentralization of Cantonal roads maintenance (Annex 2 and para. 3.01 (b)). The plan provides the foundation for strengthening the technical and financial capabilities of the Municipalities to carry out road maintenance.
1.13 To a great extent because of the lack of skilled and semi-skilled field labor (para. 1.15), MOPT's capacity to carry out force accourt works have been reduced. As a result. MOPT has been steadily increasing the proportion of road maintenance by contract. In 1986, the share of expenditures on contracts was 111, while in 1989 it reached 44Z of the total funds budgeted for road maintenance. During negotiations it was agreed that the Governmentwould increase the use of contractorsin the periodic maintenance of the primary and secondary roads with the objective of reaching a contractor's participation rate of 651 of the aggregate MOPT's expenditures related to such periodic maintenance by December 31, 1992 (para. 3.01 (k)).
(ii) TransportSector Management
1.14 The present institutional setting of MOPT for transport sector management is, in general, adequate. In particular, the unit responsible for planning transport investments has developed a good capability for appraising trarsport projects, reflecting lasting achievements of the involvement of the Bank and of other multilateral development agencies. DGP, however, has not been successful in enforcing its directives and has inadequate communications with the other Directorates of MOPT. Thus, MOPT's budget proposalshave not been based on any systematicevaluation of needs and there are often significantdiscrepancies between the works for which the budgets were approved and the works actually executed. - --
1.15 Recently, in responseto fiscal difficulties,a more consistent approach is emerging for programminginvestments and recurrent expenditures. The offices in charge of road maintenanceand equipmenthave been reorganized,their responsibilitieshave been redefinedand their status has been raised within MOPT's organizationalhierarchy as the new Sub-Divisionof Maintenance (SDM) and the Sub-Divisionof Equipment (SDE). SDh and SDE now report to MOPT's Chief Engineer, the Director General oc the Divisiun of Public Works. While these are steps in the right direction, there is still the need to address HOPT's weaknesses stemming from: (i) the diffusionof responsibilitiesand duplicationof functions resultingin lack of accountability;(ii) ad-hoc hiring practices causing an unjustifiedincrease of administrativepersonnel at the expense of aemi-skilledand skilled field labor; and (iii) lack of career incentives at Lhe professionaland techn,icallevels.
1.16 To enhance transport sector managementcapabilities would req¶.,ire the developmentand implementationof a plan for MOPT's reorganization including,inter alia, measures for staff reductions,better delegationof responsibilities and increased accountability at the mid-management level, and resource use improvements. Under the proposed project, technical assistance will be provided to GDP for developing a Transport Plan (para. 2.13) with special emphasis on sector monitoring, assessment of urban and inter-urban transport proiects and policy formulation, and an assesrment of the need for expanding ports and airports infrastructure. The consultants in charge of this technical assistance will also carry out a study of MOPT's organization and propose measures for strengthening transport sector management by March 31, 1993. Not later than June 30, 1993 the Government should present an action plan, satisfactory to the Bank, for the implementation of the study's recommendations (para. 3.01 (o)). To consolidate MOPT's recent improvements, the proposed project also includes technical assistance for the implementation of a pavement management system. This would enable the reorganized SDM to make better use of the road maintenance management system developed during implementation of the Fifth Highway Project (para. 1.38). In a parallel and complementary effort, the ongoing FRG project is aimed at strengthening SDE through, inter alia, technical assistance and training, and implementation of an equipment management system to improve equipment availability and its utilization.
(iii) Future Role of the Railway
1.17 As the country's road system developed and industry emerged, the railway's economic justification became increasingly questionable. Whereas the railway carried about 1.7 million tons of cargo until the early 80s, in 1983 the volume started to drop dramatically, reaching 0.8 million tons in 1985. Several reasons contributed to this fall, of which the most important are the opening up of competing roads, a deterioration of railway services and the movement of fruit export frum Lim6n, the traditional pert for railway traffic, to the Port of Moin. Since 1985, however, there has been a slow but steady growth in the tonnage moved by the railway and it is estimated that it will reach 1.0 million by the end of 1989. Annex 3 provides a detailed assessment of the railway system and the major issues affecting it. -6-
1.18 Past investments in electrification and track rehabilitation have not yielded the expected results: the condition of both the track and rolling stock is poor. Operations are inefficient and the quality of service is deficient compared with the trucking industry. Under the present scale of activity, the revenues from operations cover only 65? of personnel costs, and increasing amounts of subsidies have been needed to balance the railway's cash flow. The Government has now agreed that the railway has not adapted to the present economic situation and that continuing operations with the current standards would be wasteful.
1.19 The Government, faced with mounting public finance difficulties, has decided to gradually eliminate all subsidies to INCOFER. To this end, the Ministries involved (MOP, Finance and Planning) together with INCOFER, have agreed on an action plan, with the format of a contract-program between the Ministries and INCOFER. The program calls for the elimination of the railway operational deficit by 1994 through the suppression of uneconomic services, staff reductions, increa-,edrevenues, and improvements in managerial capabilities. Their goal is to make INCOFER a commercially oriented enterprise 'edicated to those commodities where there appears to be profitable opportunities. The action plan, which covers the operational, financial and labor redundancy targets for the 1990-1993 period, has been found acceptable by the Bank. An assessment of satisfactory progress in implementing the action plan would be a condition for loan effectiveness (para. 3.02) and failure to continue implementing it satisfactorily would constitute default under the loan (para. 3.01 (c)).
(iv) Ports Productivity
1.20 Significant investments in ports were made in the mid 1970s and early 1980s (notably Moin on the Atlantic and Caldera on the Pacific Coast) to accommodate the country's increasing port traffic. However, the physical expansion and modernization of the infrastructure were not accompanied by similar modernization of work methods, elimination of monopolistic labor practices and other institutional arrangements in the ports (Annex 4). As A result, port costs remain comparatively high to users, particularly in Limon/Moin, with the resulting negative effect on the competitiveness of Costa Rican exports. During negotiations the Government and the Bank agreed on an action plan for the rationalization of port operations (para. 3.01 (b) and Annex 5). The plan includes an assessment and ensuing recommendations to address the major institutional and operational issues of the sector and provides specific measures in the areas of financial management and operational efficiency of INCOP.
1.21 Under the present trends of port traffic, the country will probably reach the limit of its physical capacity to handle expected traffic in five years time. To estimate the longer term needs on the Atlantic ports, studies are underway to revise a Master Plan for the Port of Moin (financed through assistance from FRG). The overall development needs of the country's port system will be one of the subjects of the technical assistance for the development of a Transport Plan (para. 2.13).
1.22 Whereas the foregoing studies will determine the physical capacity needs of the country's ports in the medium-run, on the Pacific coast there is an incipient congestion problem that needs immediate attention. Because the structurally unsafe jetty at Puntarenas has been closed to -7-
ships, grain imports which used to be handled there are now diverted to Caldera which also handles the growing demand from cruise ships. Since port operations were not efficient to begin with, additional traffic has created delays and congestion. In addition, siltation problems in Caldera require a substantial dredging effort, and contribute to limit its capacity. Under the proposed proiect, assistance is envisaged for improving port operations, particularly grain handling in Caldera, improving its management information system, carrying out a study to propose the best solution to the siltation problem (includi. inter-alia, related environnmentalimpact assessments) and rebuilding the untarenas jetty for the exclusive use of cruise ships. The works would be undertaken as a matter of urgency to decongest Calaera. Also, there is considerable scope for improving port operations through strengthening management and upgrading work methods. In particular, for JAPDEVA. the project seeks to improve its costing system and information management. Similarly, there is need to strengthen the tariff section of GDMT. At present tariffs are not based on costs and an objective of the project is to improve the cost accounting system so that later in time cost-based tariffs can be developed and applied (paras. 2.11 to 2.13).
D. Transport Finances and Cost Recovery
(i) The Road Suosector
1.23 The current level of road user charges generates over 100I cost recovery. Figure 1.1 compares the total current and capital expenditures in the subsector with the revenues generated by user charges. Between 1975 and 1980 the Government outlays in the road subsector were marginally superior to the revenues generated by the user charges. Since 1982, these revenues have continued to exceed expenditures in expanding and maintaining road infrastruc.ure.
1.24 Overall, the structure of the road user charges is satisfactory in that heavy vehicles cover the assignable road usage costs and that over 80% of the revenues are generated by taxes on the consumption of fuels and motor oils (Figure 1.2). Retail fuel prices are currently about US$540 per metric ton for gasoline and US$319 per metric ton for diesel which are about 2.4 and 2.6 times higher, respectively, than their corresponding border prices. Import duties on vehicles and parts have constituted between 1OZ to 142 of the revenues generated by road users in recent years. Annual registrations and tolls make up for the rest. Less than one percent of the total revenues (tolls) are earmarked for policing and enforcement cf the highway code and safety regulations. The remaining 99X go directly to the Government's general revenue chest.
(ii) The Port Subsector
1.25 JAPDEVA in the Atlantic and INCOP in the Pacific, although constituted as autonomous port authorities with full financial autonomy, are in fact no more than port operating companies. In the case of INCOP, all operations are carried out by force account, whether services to or on the ships or services to cargo on shore. In the case of JAPDEVA, services on board the ships (stevedoring) are in the hands of three stevedoring companies which contract directly with the ship-owners for these services. Other services, such as pilotage, mooring and towage are all provided by - 8 -
JAPDEVA. JAPDEVA also receives royaltypayments from the stevedoring companiesoperating in the port. In addition,JAPDEVA has development responsibilitiesfor the Atlantic coast region.
1.26 Although the laws settingup the two port authoritiesrequire the transfer of lands and installationsfrom the Governmentto them, such a transfer of assets has not yet taken place nor (with one exceptionduring 1984 and 1985 in JAPDEVA),has any mechanismbeen created for the recovery of the investmentsmade by the Government in the ports. The Port Authoritieshave been unable to-date to generate sufficientcapital for infrastructureinvestments, which have been funded by the Government,by foreigngrants and by loans. In the absence of depreciationallowances for such investments out of current revenues, the flow of funds for future investments would require alternative sources of capital. At negotiations, it was agreed that INCOP would achieve Working and Operating Ratios of no more than 85Z and 932 respectively by 1992 and maintain no worse a financial performance thereafter (Annex 6). This represents an increase with respect to the 1988 operating and working ratios (92Z and 84Z, respectively) due to INCOP's expected contribution of about 35? of planned investments and increases in working costs related to dredging needs. This ratios will be based on operating costs which include a depreciation allowance on all Port of Caldera's infrastructure, whether such infrastructure has been transferred to INCOP's ownership or not. It was also agreed that INCOP would also set aside funds for dredging in order to ensure continuous availability of the berths at Caldera (paras. 3.01 (b) and Annex 5).
1.27 Government invest-ent in the ports during the years 1980 to 1986 was approximately US$25 miilion per year. This includes costs for the completion of Moin port _nstallations and a new container wharf in Limon, as well as the completion of the construction of the new port of Caldera on the Pacific coast. Of the investments in Lim6n/Moin, about US$9.2 million was recovered and transferred to the Government in 1984 and in 1985 by means of a special capital levy on port services in those ports. However the charge was discontinued and no permanent mechanism for recovery of capital costs has since been introduced. Any proposed project for JAPDEVA will therefore have to address the need to introduce capital recovery charges. Details of the financial performance of the two port authorities and financial projections for INCOP have been entered into the project file.
(iii) The Railway Subsector
1.28 When the present railway authority (INCOFER) was established by law in 1985, it was already evident that the railway in its existing form could not be financially autonomous. The law therefore provided for a tax on all banana exports (whether by rail or road) to generate additional funding for INCOFER. Furthermore, an annual government budget allocation was foreseen to fi-nancerailway maintenance works. The Government also assumed the considerable debts accumulated by the previous railway organization, FECOSA, an affiliate of the Costa Rica Development Corporation (CODESA).
1.29 The annual freight traffic carried out by INCOFER decreased from about 2 million tons in 1981, when nearly all the banana crop and much of -9-
the cargo from the two principal ports was carried by rail, to less than 1 million tons in 1988. Passenger traffic, on the other hand remained fairly stable, at about 2 million a year during that period, largely due to the heavily subsidized fares when compared to road transport and staff privileges in the form of free travel.
1.30 Since 1987 the Government decided to gradually end all subsidies to the railway. INCOFER has consequently been increasing its marketing -'_orts, closing some loss-making services, and has managed to diminish its staff by nearly 10% through natural attrition and transfers to other Government agencies. Nevertheless, unless further drastic measures involving the reduction of services to the Pacific coast, eliminating less- than-car-load services, and discontinuing the passenger services on the Atlantic line are taken, INCOFER cannot avoid making further losses.
1.31 As discussed in paragraph 1.19, to ensure that the conditions for an orderly restructuring of the railways are in place, INCOFER and MOPT, and the Ministries of Finance and Planning agreed on a four-year action plan leading to the railways financial autonomy. The basic points of the plan are: (i) staff reductions from the present 2,329 to 1,288 by 1993; (ii) suppression of non-economic passenger services and less-than-car- loads; (iii) increase revenues by 412 in real terms by 1993, through traffic increases averaging 8% per year and real tariff increases averaging 1 per year; and (iv) reduce Government tralksfezsfrom ¢ 325.0 million in 1990 to ¢ 130.9 million in 1993. Ry 1994 INCOFER is expected to generate a slight operational surplus.
1.32 The Action Plan, which takes the form of a contract-program detailing the obligations of all the parties involved, includes as a mechanism for monitoring its implementation, the appointment of an Implementation Committee within 60 days of contract signature. The main functions of the Committee would be to:
a) follow-up the implementation of the contract-program through the analysis of INCOFER's Quarterly and Annual Reports;
b) propose changes to the contract-program to update its yearly objectives; and
c) prepare, within 30 days of the reception of INCOFER's Annual Report, a Report to the Government on the degree of compliance with the contract objectives, the reasons for any observed deviations, and the recommendations for the future implementation of the contract-program
The appointment of the Implementation Committee would be a condition for loan effectiveness (para. 3.02).
E. Transport Sector Strategy
1.33 The Government macroeconomic programs have been making satisfactory progress in restoring fiscal balance and now the main focus is in resuming sustainable economic growth. Its strategy is to look to the private sector to take the lead in productive activities, and the promotion of exports is one of the central policies for carrying out this strategy. - 10 -
For the transportation sector Government efforts will concentrate in providing the appropriate infrastructure and the level of service to enhance the competitiveness of Costa Rican products. It also involves the elimination of the fiscal drain caused by the inefficiencies of the railway and some ports services.
1.34 In particular, the Government's priorities in the transport sector are to improve the quality and reliability of the main export corridors through road rehabilitation and maintenance, to restructire railway services and to reduce congestion in the Pacific port system and rationalize port operations in the Atlantic. Emphasis is also given to the general step-up of the road maintenance effort, in the context of a comprehensive set of policies to decentralize the maintenance of Cantonal roads and increase the participation of the private sector in the execution of road works. The prioritization of expenditures, in line with investment efficiency criteria, the implementation of adequate levels of cost recovery, and environmental concerns also play a prominent role in the Government's sector agenda.
F. Bank Involvement in the Sector
1.35 The proposed project would be the seventh loan by the Bank in Costa Rica's transport sector. An important lesson from past projects is that lack of effective coordination was the major cause of delays in project completion and that untimely and insufficient availability of counterpart funds contributed to the delays. This pattern emerged starting with the First Highway Project (Loan 299-CR/Credit 10-CR, US$11.0 million) in 1961.
1.36 In 1970, a second Bank project (Loan 664-CR, US$15.7 million) was undertaken, comprising, essentially, construction of a new 57-km two-lane highway between Siquirres and Limon. The Project Completion Report (PCR) dated August 31, 1977 and the Project Performance Audit Report of June 1978 (PPAR) concluded that the project was successfully executed. At the end of 1972, the Bank made a US$1.4 million loan for a Highway Studies Project (Loan 872-CR). The PCR and PPAR mentioned above also reviewed the execution of this project and concluded that the studies were satisfactorily carried out. The PPAR also concluded that the initial progress achieved in highway maintenance had subsequently fallen off, mainly because of diversion of equipment and maintenance budget away from the national roads to rural road construction and impr"vem.ent crks The Borrower complied only partially with the Loan Agreement requirements regarding highway maintenance, partly because the ministry's focus was on construction.
1.37 The Fourth Highway Project (Loan 1187-CR. US$39 million) was approved in December 1975. The main project component was the construction of the San Jose-Rio Sucio-Siquirres road (about 96 km) and of the Rio Sucio-Puerto Viejo branch road (about 29 km). The project also comprised strengthening of MOPT's vehicle weighing and civil works supervision capability as well as technical assistance for the preparation of a National Transport Plan and improving urban transport in the metropolitan area of San Jose. The project was completed satisfactorily, albeit with cost overruns. The technical assistance component was successful in - 11 -
forming a core of professionals in DGP knowledgeable in the techniques of project evaluation and transport planning.
1.38 The work done for the National Transport Plan provided the foundation for preparation of the Fifth Highway Project (Loan 1845-CR, US$30 million, May 1980), which shifted the focus of Bank projects from construction to maintenance and rehabilitation. The Project, which was satisfactorily completed in 1987, included the establishment of a road maintenance management system. This project also suffered delays because of earlier coordination problems and the erratic availability of counterpart funds.
1.39 The Bank Group also supported 107 km of feeder road improvement in the Canton of Perez Zeledon, included in the Agricultural Credit and Development Project (Loan 1410-CR, June 1977, US$18.0 million; Credit 872-CR, June 1977, US$9.0 million, of which US$0.8 million was for roads). This project provided a fruitful opportunity to assess the requirements for effective cooperation between MOPT and the Cantons. Nonetheless, as already stated, Bank experience shows that in the absence of satisfactory arrangements for the maintenance of Cantonal roads, MOPT will continue to face considerable pressures for allocating resources approved for the national roads maintenance to the maintenance of the Cantonal roads.
1.40 The lessons learned from past projects have been taken into account in the design of the proposed project. The past record of poor coordination is attributable, to a certain extent, to insufficient understanding of project objectives and to overlapping responsibilities for execution. Hence, the Government has decided to make MOPT fully responsible for the proposed Transport Sector Project, which was prepared with the active participation of MOPT's relevant Directorates. A Coordinating Group under the Minister of Public Works and Transport will be responsible for overall project coordination (para. 2.16). Also, the preparation of annual work p:ograms with such a scope to permit, during normal supervision, early r:etectionof implementation problems and incorporation of correctiv2 measures to prevent similar problems for subsequent work programs. should help to smooth project implementation (para. 3.01 (f)). To overcome the untimely or insufficient availability of counterpart funds, MOPT agreed to set up a project account in a bank with an initial deposit of US$1.2 million. Compliance with this requirement will be a condition for loan effectiveness (paras. 3.01 (d) and 3.02). Also, to improve project implementation, when 50Z of the loan funds have been committed the Bank and the Borrower will carry out an in-depth mid- term review of progress in project execution. Annex 6 presents the performance targets for the project.
G. Bank Strategy
1.41 In response to Costa Rica's financial and economic difficulties the Bank strategy in recent years has concentrated on implementing structural reforms for scaling down tha size of the public sector, placing increased reliance on the market mechanisms and opening the economy. The proposed transport secto. project supports these objectives by (a) focusing, for the first time, on the sector as a whole and ensuring that the investment programs for the sector is consistent with the macroeconomic framework and respond to technical and economic criteria: (b) promoting - 12 -
improvements in efficiency and consequently reductions in the costs of transport; (c) seeKing to eliminate the drain on the Government's finances caused by the railway deficits from the Government revenues; and (d) promoting sound pricing policies.
H. Rationale for Bank Involvement.
1.42 Through six interventions in the road subsector, the Bank has assisted MOPT in setting up the basic apparat.3 for the planning, programming and execution of investments in the sector. The positive institution building advances initiated under the previous Bank-financed projects, and which would be further supported and consolidated under this operation, need a continuous, systematic and consistent approach. Because of its long term involvement with the transport sector, the Bank is better placed than other agencies to pursue these objectives. Moreover, building on past experience, there is now an opportunity to assist the Goverrment to address the key issues of efficiency in the port and railway subsectors, in which the Bank had not been hitherto directly involved. The proposed project would promote institutional strengthening and sound investment oolicies on a sector wide basis. It would assist the Government to improve transport conditions in the import/export corridors in line with the strategy of promoting increased exports.
II. THE PROJECT
A. Project Origin and Objectives
2.01 The proposed project originated as a follow-up to previous projects in the highways sector. It was felt that a broader sectoral approach, which took into account needs for intermodal coordination was warranted. Mactoeconomic concerns, such as export development and fiscal deficit reduction served to shape the project. The physical works to be funded provide a response to the evolving needs of the aging transport infrastructure and the emphasis given to export promotion in the country's economic strategy. In order to keep the transport costs of exports at levels that help increase the competitiveness of Costa Rican good;, the management and maintenance of transport infrastructure assume high priority. This requires the implementation of polLcies to improva sectoral efficiency and make optimal use of existing facili:ies mainly through rehabilitation of the aging sections of the transport corridor:.. periodic maintenance of priority links and systematic routiae maintenance to preserve infrastructu.e investments. MOPT's proposals for road rehabilitation and maintenance are in line with these priorities. The Government authorities support the project objectives which are to:
i) assist the Government's efforts tc promote exports by improving the quality ani reliability of transportE.tionin the ma:.n corridors;
ii) assist the Government to improve the eff:.ciencyof reso.rce use by strengthening transport sector managemen: and rationalizing the provision of railway and port services. -13 -
2.02 To achieve its objectives, the proposed project would assist MOPT to improve transport efficiency in the Atlantic and Pacific corridors and enhance its planning capabilities; assist INCOP to improve its operational productivity and rationalize its tariff structure, assist JAPDEVA in implementing a management information system, and assist INCOFER in scaling down railway services. Specific components of the project are described in paragraphs 2.07 onwards.
B. MOPT's Investment and Maintenance Program (IMP) for 1991-95
2.03 For the 1991-1995 period, the Government of Costa Rica projects increases in total public expenditures at a rate consistent with price stahility and economic growth; the latter based on policies to stimulate private sector investments and exports. This increase is justified in view of the considerable backlog of urgently required investments accumulated during the early 80s and the last two years, when funding levels were severely curtailed. In terms of functional composition the projected allocation emphasizes exp)enditures in maintenance and rehabilitation of economic infrastructure. The priorities for the medium term are agriculture, where expenditures have been cut sharply in 1988, and the transport, telecommunications and power sectors, which are essential for the development of the private sector especially for non-traditicnal exports. Details of the IMP for the transport sector are discussed below.
2.04 The !MP reflects the current priorities of the Government to finish projects in advarncedstages of constructicn and rehabilitate the aging road network, institute a regular cycle of periodic maintenance and address the issue of roLtine maintenance. In addition, the Government has included investments to alleviate congestion in .he the port of Caldera and possible investnment3in infrastructure to reduce congestion in the San Jose metropolitan area.
2.05 Over t-.e periodl199: -95. the IMP projects total expenditures amounting to US$,554milLion or about US$110.8 million per year, an increase of about 27X, in real terms, with respect to the investment and maintenance expenditures incurred in 1984, the peak year for investments in the sector. This level of expenditures is in line with the Government's investment strategy minimizirg corrbined transport infrastructure and user costs and of stimulating private investments and exports. Planned expenditures in the sector would represent about 3Z of GDP per year , up from the 1.3Z registered in 1988, anclcomparable to the share of 1984 and the years preceding the 1982 crisis. In terms of total pullic sector expenditures, transport outlays for the 1991-1995 period amous,t to 7.4Z, as compared to the average share of 7 6Z during the 1980-1988 period. Out of the total program, about 86Z of :he planned expenditures itre for the road subsector, about 5Z for civil aviation and the remaining 9. for ports and river works. No investments are pla--inedfor the railway. Th? program iF economically balanced taking into account budget constraints, and all investments included in the 'MP are economically justified (para. 3.01 (h)).
2.06 The composition of the IMP is satisfactory (Annex 7). New road construction accounts for 21% of the total outlays, in line with the sector priorities. Projected traffic volumes on the roads planned to be constructed indicate that they are economicall) justified. The IPM's emphasis on road rehatilitation and improvements, about 45Z of the total - 14 -
investments in the road subsector, reflects the needs of the aging netaork. Routine maintenance expenditures would average US$15.4 million per year which is over two times the amount allocated in the past. Historically, the sources of MOPT's budget have been a mixture of domestic resources and foreign loans. During 1980-87, about one half the budget has come from domestic resources with the other half being accounted for by foreign loans. Fifty two percent of the IMP expenditures are planned to be financed through domestic resources and 48Z through foreign borrowings. The improvement of the road maintenance planning, programming and budgeting process under the project, coupled with increased mobilization of local resources to attend the needs of Cantonal roads, are expected to result in a greater reliance on domestic funds to carry out road maintenance works. In the long-term, road maintenance will become self-sustainable, without the need to resort to foreign financing. To reflect this, Bank participation in funding periodic maintenance works is on a declining basis (para. 2.22). During negotiations agreement was reached on the scope and content of the IMP as well as on its annual updating (paras. 3.01 (g) and (h)).
C. Proiect Description
2.07 The project supports institutional measures to increase the efficiency of the transport sector and consists of a slice of MOPT's 1991-1995 Investment and Maintenance Program and of institutional strengthening measures. The selected investments are shown in comparison with the IMP in Annex 7. Selection of the IMP's components to be financed under the project was carried out on the basis of continuity of the Bank involvement in the rehabilitation and maintenance of the federal roads network and the urgency of relieving congestion in the port of Caldera. They comprise road rphabilitation and maintenance, replacement of the Puntarenas Jetty, and equipment acquisition. The main institutional measures call for scaling down the railway, designing a strategy lor the maintenance of Cantonal Roads, improving port operations, ensuring soundness of the sector's annual investment programs , and encouraging increased participation of the private sector. The following paragraphs provide details of the physical :omponents the project and of the technical assistance to support the institutional strengthening measures. The figures in parenthesis refers to the percentage of total project costs.
(i) Road Rehabilitation and Periodic Maintenance 1
2.08 The civil works component for roads under the Project consists of: (i) a road rehabilitation program of about 458 km of the National paved road network; and (ii) the periodic maintenance of about 878 km of the National paved road network. The road rehabilitation and periodic maintenance programs will be under the responsibility of MOPT which will be assisted by the technical assistant in charge of the pavement management system. All civil works financpd by the sank would be executed by contract. Annex 8 gives details of the road works to be financed ander the project.
1/ Percentages of total project costs in paren-:hesis include engineering and supervision vf civil wcrks. - 15 -
(a) Road Rehabilitation Program (44Z)
2.09 Based upon a detailed road inventory of the existing national paved road network and on the use of HDM-III (Highway Design and Maintenance Model, version no. 3), a set of about 39 road links totalling 458 km has been selected for rehabilitation under the IMP. These 458 km represent about 142 of the national paved road network and they support about 202 of the traffic. Because of lack of adequate and timely periodic maintenance, these roads are entering into accelerated deterioration. The firs;-year program totals 10 road links and 230 km (Annex 8, Table 1 and Map IBRD 21070). Final engineering studies have been carried out by MOPT and found acceptable by the Bank. Engineering studies for the remaining 228 km will also be carried out by MOPT and presented to the Bank for its review before December 31, 1991. Financing will be provided under the loan for consultant services for supervision of the civil works under this component.
(b) Periodic Maintenance Program (32Z)
2.10 Through the analysis of the road inventory and based upon an average periodicity of about eight years for resealing or resurfacing of the existing fraction of the network in good or fair condition, MOPT estimated that a five-year periodic maintenance pro3ram of the national paved road network would comprice about 878 km of roads i.e. annual targets of 175 km. Simulation exercises cn HDM have permitted MOPT to screen for periodic maintenance about 513 km of the paved national road network (Annex 8, Table 3) and about 365 km additional road link would be identified during the implementation period. The unit in charge of the pavement management system would (i) develop methodologies and procedures to quantify the condition of the network in objective terms considering the age of the roads, the date of the last resealing, the percentages of surface degradations and the roughness index; (ii) determine a set of typical works such as single surface treatment, double surface treatment, slurry seal or resealing; (iii) rank by economic priority order the road links yielding EERs of at least 12Z; and (iv) dptermine bidding lots based upon geographic and technical considerations. At negotiations it was agreed that the annual programs, the distribution and size of bidding lots and the corresponding plan of actions would be approved by the Bank (para. 3.01 (f)).
(ii) Puntarenas Jetty (10Z)
2.11 The other civil works item included under the project is the replacement by a new structure of the Puntarenas jetty (on the Pacific coast) which has been taken out of service for safety reasons as parts of it are in advanced stages of corrosion. Operationally, this means that two out of five general cargo berths on the Pacific have become unusable. As a result, the grain shipments and cruise liners which used to be accommodated in Puntarenas now are routed to nearby Caldera, which is approaching congestion levels. In order to alleviate the congestion in Caldera, a new jetty at Puntarenas will be built to handle the growing c-4ise-ship traffic. At the same time grain-handling in Caldera will be improved.
(iii) Equipment (9Z) - 16 -
2.12 The project also provides for equipment and too s for Ca) road maintenance operations, (b) improving grain handling operations at Caldera, (c) improving control of in-transit cargo and road safety, (d) improving laboratory testing of road materials, (e) improving data processing in MOPT, INCOP, JAPDEVA and INCOFER and (f) rail track maintenance. Detailed lists of the equipment expected to be purchased under the pro;ect, can be found in the project file.
(iv) Institutional Measures or Programs (42)
2.13 The main institutional measures to increase the efficiency of the sector supported under the project call for scaling down the railway, designing a strategy for the maintenance of Cantonal Roads, improving port operations, ensuring soundness of the sector's annual investment programs, and encuuraging increased participation of the private sector. To support these institutional objectives, the project finances technical assistance to: (a) MOPT in the areas of investment programming, project preparation and evaluation in DGP (including, inter alia, developing a Transport Plan), tariffs and maritime freight costing in GDTM, as well as tariffs and costing in INCOP; (b) provide training in pavement management in DGP, maintenance manage~ment in SDM, information management in JAPDEVA, and assistance in the implementation of the action plan to rationalize railway services in INCOFER; (c) carry out a study to propose the most efficient sclution to the siltation problem in the Port of Caldera; and (d) provide training for mid-level management in MOPT, JAPDEVA and INCOP. Outlines of the terms of reference for these technical assistances were agreed upon during negotiations (para. 3.01 (j)).
D. Project Costs
2.14 The bases of the cost estimates in the following page are the average unit costs for road works carried out by MOPT during 1988 and the preliminary engineering stvdies for the road and port works. The detailed engineering for the first year program of works, which involves the most deteriorated roads to be financed under the project has been reviewed by the Bank and found satisfactory. The estimate for engineering and supervision is 6Z of the coss of works considering that the works to be financed under the proposed project would be fairly simple and not involve complicated engineering. All works financed under the project would be carried out by contract. The estimated equipment costs are based on recent ouotations obtained by equipment specialists under the t;'^nirml mceicta"- being provided to MOPT by the FRG. The cost estimates do not include any taxes or duties, from which MOPT is exempt. Annex 9 provides detailed estimated project costs.
2.15 A physical contingency of 1OZ has been added to the cost of civil works for roads, and 15Z for the civil works to replace the Puntarenas Jetty. The price contingency was calculated in line with Bank guidelines, which assume international escalation at a rate of 4.1Z per year throughout the project implementation period and a domestic inflation rate of 14Z in 1990, 12; in 1991, 1OZ in 1992 and 82 thereafter. It was also assumed that the rate of escalation for international prices would be also applicable to local costs (when expressed in dollar terms) which implies that the exchange rate i. expected to be periodically adjusted to reflect the difference between int-rnal inflation and the evolution of world prices. - 17 -
Components Local Foreign Total ------US$ million------
Institutional Program 1.0 2.2 3.2
Roads
Rehabilitation/Improvements 9.1 23.6 32.7 Periodic Maintenance 6.7 17.1 23.8
Equipment
Road and Rail Track Maintenance 0.2 7.'4 7.6 Grain Handling, Laboratories and Information Systems
Ports
Construction of Puntarenas Jetty 2.6 3.9 6.5
Engineering & Supervision 3.1 1.6 4.7
Base Cost 22.7 55.8 78.5
Contingencies
Physical 2.0 5.0 7.0 Price 3.8 7.6 11.4
Total Costs 28.5 68.4 96.9
Estimated Financing Plan
Government of Costa Rica 28.5 8.4 36.9 IBRD - 60.0 60.0
E. Execution and Procurement
2.16 MOPT will be responsible for project coordination and for reporting to the Bank. To that end, designation of a Coordinating Group satisfactory to the Bank, comprising a project coordinator, an engineer, an accountant, and support staff, would be a condition of loan effectiveness (paras. 3,01 (e) and 3.02). MOPT will. execute the road related components and the rehabilitation of the Puntarenas jetty through its SDM and GDTM respectively. Road maintenance equipment will be procured by MOPT's SDE. Minor equipment for improving grain handling operations will be procured by INCOP and the facsimile machines and message transmitting units to improve control of in-transit cargo will be procured by the Ministry of Finance through its Customs Administration. Data processing equipment will be procured by MOPT, INCOFER, INCOP and JAPDEVA, respectively. INCOFER will procure workshop tools and minor equipment for rail track maintenance. MOPT will execute the technical assistance aimed at DGP and SDM. The technical assistance to restructure railway services will be executed by - 18 -
INCOFER. INCOP and JAPDEVA will execute, respectively, the technical assistance tariff setting and the development of a management informatioyi system. The PCR will be prepared by GDP in collaboration with other entities involved.
2.17 Procurement of items to be financed under the proposed loan is summarized as follows (amounts within parenthesis would be financed through the proposed loan) and will be done in accordarncewith Bank guidelines:
Procurement Method ----- (US$ million) 1/-/------ICB LCB Other Total Cost
Civil works 68.7 10.0 78.7 (38.6) (5.6) - (44.2)
Engineering and Supervision - 2.3 a/ 5.4 3.1 b/ (3.1) (3.1)
Equipment 6.1 2.0 1.0 c/ 9.1 (6.1) (2.0) (1.0) (9.1)
Technical assistance - - 3.6 b/ 3.6 _(3.6 (3.6) Total 74.8 12.0 10.0 96.8
(44.7) (7.6) (7.7) (60.0) a/ To be carried out by MOPT b/ In accordance with Bank Consultant Guidelines. c/ Local or international shopping
1/ Including contingencies.
2.18 Contracts for the rehabilitation and upgrading of trunk roads in the import/export corridors totalling about US$40.7 million equivalent (including contingencies) and contracts for periodic road maintenance amounting to about US$19.6 million (including contingencies) would be packaged as much as possible to attract particip ^ni;of foreig contractors and would be procured through ICB in accordance with Bank guidelines. Civil works contracts for the aforementioned works would be procured through local competitive bidding procedures acceptable to the Bank, only when below US$1.0 million equivalent and up to an aggregace amount of US$10.0 million equivalent. The replacement of the Puntarenas jetty estimated to cost US$8.4 million equivalent (including contingencies) would also be procured through ICB in accordance with Bank guidelines. The LCB procedures in Costa Rica have been reviewed by the Bank and found generally acceptable except for the limitation of not allowing price adjustment for the foreign cost of foreign contractors. Since this is not acceptable to the Bank, a provision in this regard is incorporated in the legal documents (para. 3.01 (m)). Major items of equipment (road maintenance machinery, grain handling equipment, etc.) and materials totalling about US$6.1 million, would be procured through 1CB. Contracts - 19 -
for smaller items of equipment and matcrials would be procured through LCB procedures acceptable to the Bank when below US$250,000 equivalent and up to an aggregate amount of US$2.0 million, and though local or international shopping from eligible suppliers when valued below US$25,000 equivaleat, up to an aggregate amount of US$1.0 million. Consultants for engineering supervision of works, and technical assistance under the project, would be selected in accordance with Bank guidelines.
2.19 Bidding Documents and Contract Review. Agreement to the aforementioned procurement arrangements including packaging to attract participation of foreign contractors and the use of standard bidding documents was reached during negotiations. To minimize possible adverse impacts on the environment during the construction of the jetty and major road works, the specifications of the bidding documents would include clauses under which contractors would be required to prevent, minimize, or mitigate environmental danage. All ICB procurement, civil works contracts above US$250,000 equivalent, and goods and equipment contracts costing more than US$150,000 equivalent as well as the first two contracts for goods and works (irrespective of their value), would be subjert to prior review by the Bank before invitations to bids are issued and contracts awarded. Other contracts would be subject to ex-post review by the Bank.
F. Disbursements and Auditing
2.20 The proposed project is expected to be fully disbursed hy December 1996. The disbursement schedule (Table 2.1) is based onithe standard profile applicable to Costa Rica.
2.21 The arrangements for disbursements were reviewed with MOPT. Given the Bank's long standing relationship with MOPT and satisfactory experience under the Fifth Highway Project, disbursements would be against periodic statements of expenditures (SOE), except in those cases when prior Bank review of procurement documentation is required. In order to speed up disbursements, a special account in US dollars with an authorized allocation of US$3 million (sufficient for about four months worth of financeable expenditures) would be established in the Banco Central de Costa Rica. Establishment of this account would be a condition for loan effectiveness (paras. 3.01 (d) and 3.02). MOPT would be entitled to make periodic withdrawals from the Special Account at the exchange rate applicable on the day the Special Account is debited. IBRD would replenish the Special Account for the amount of withdrawals on account of eligible expenditures at the request .f the Borrower. Because INCOFER, INCOP, JAPDEVA and the Customs have not dealt with IBRD to date, they will submit their respective SOEs through MOPT to the Banco Central de Costa Rica. The Banco Central will retain supporting documentation for review by the Bank during supervision missions.
2.22 Withdrawals from the Special Account would be on the following basis:
a) 562 of expenditures on rehabilitation and upgrading of trunk roads;
b) 72? of the expenditures on civil works for periodic maintenance until withdrawal applications under this category have reached the - ?O -
aggregate of US$4.5 million; thereafter 66Z until the applications have reached the aggregate of US$9.0 million; and 402 thereafter;
c) 56% of the expenditures on civil works for the replacement of the Puntarenas jetty;
d) 100% of the expenditures on the procurement of equipment;
f) 1002 of the expenditures for consulting services for technical assistance, supervision and engineering.
2.23 With the objective of ensuring timely availability of counterpart funds, MOPT agreed, during negotiations, to set up a Project Account in a local commercial bank, and maintain a revolving balance of budgeted funds sufficient for four months of expenditures related to items to be financed under the project. Establishmer- of this account would be a conditi.onfor loan effectivena2s (paras. 3.01 (J) and 3.02).
2.24 At negotiations, agreement was reached on the following auditing arrangements: each of the participating agencies will be audited in respect to the project. MOPT's GjinTwill maintain the consolidated accounts. These accounts and the related disbursements to be made against the SOEs would be subject to audit as would be the Project and the Special Accounts, The Project Account and the related expenditures would be audited by independent auditors acceptable to the Bank and in accordance with terms of reference to be approved by the Bank. The Special Account at the B nco Central de Costa Rica would be audited also by independent auditors acceptable to the Bank. Audit reports would be furnished to the Bank within five months after close of the Government's fiscal year (para. 3.01 (i)).
G. Economic Justification
2.25 The road works proposed by MOPT as the first year's program under the project, with an estimated total cost of US$20.4 million, are well justified with an overall economic rate of return of about 351 (Table 2.2). The replacemer.tof the Puntarenas jetty and the expected productivity increases on the rate of grain handling in Caldera yield an overall ERR of about 32Z (Table 2.3).
2.26 (i) Road Rehabilitation and Maintenance. Based on the detailed road inventory of the existing paved roads and the results obtained from the application of the HDM III, 39 road links totalling 458 km. were identified for rehabilitation. These roads represent 14% of the stock of paved roads and account for over 20% of the annual usage of the national roads in terms of vehicle kilometers. Because of lack of timely maintenance, these roads are entering the critical zone where deterioration accelerates. Out of the roads thus iaentified, ten links totalling 230 km and forming part of the import/export corridor (see Map IBRD 21070) were proposed by MOPT for the first year work program.
2.27 The maintunance policies used in the analyses were developed in collaboration with SDM and the unit costs of the maintenance operations used are reasonable for the region. Traffic volumes and their compositions are based on actual counts supplemented by origin/destination data. For - 21 -
each link, life-cycle costs were simulated, based upon initial surface conditions (e.g. roughness and area cracked, number of years since last periodic intervention et al.) horizontal and vertical geometric characteristics, the road maintenance policies in force and the volume and composition ct traffic using the link. Thus for each link, the maintenance policy lternative yielding the least cost to society (minimum costs to the road authority and the users) was identified. Tradeable goods were valued at. their border prices. In the case of labor, it was assumed that current market wages are in line with its opportunity cost.
2.28 Based upon the preceding analysis, the ERR for the ten roads in the first year program vary from 18% to 65Z (Table 2.2). To assess the impact of cost increases and less than anticipated traffic using the roads, sensitivity tests were done. These show that the base ERRs are robust. A twenty percent increase in costs would reduce the overall ERR to 29% and a s:Lmilar reduction in traffic would have a corresponding effect. In the unlikely event of a doubling of the cost of works, the overall ERR would st:illbe a healthy 172. It would take the combined effects of a s:imultaneousdoubling of the cost of works and a 252 reduction in traffic to reduce the overall EER to 122.
2.29 (ii) Replacement of the Puntarenas Jetty. The replacemerntof the Puntarenas jetty to reduce the level of congestion in Caldera and to increase grain handling productivity were also evaluated. For the purpose of the economic evaluation Puntarenas and Caldera were regarded as a single port entity. Historically, traffic in the Pacific pnrts and Caildera/Puntarenashas grown at about 6.5Z per year. The nature cf the port throughput is primarily imports which accounted for about 902 of the port throughput. in 1987. Grain (including soya) and iron and steel account fcorabout 722 of the imports and 65Z of the total throughput. Grain accounts for a preponderant 442 of the imports, but the rate at which it is discharged (1604 tons per day) leaves significant room for improvement. Grain handling rates can be improved, conservatively, by 20% to 2COO tons per day with modest investments. As a result, the impruved service time wcould liberate some 32 berth days for general cargo yielding a reduction of some 51 ship waiting days in 1990 even with the presence of cruise liners at Caldera. An assessment of the capacity of Puerto Calderas in the medium-term is included in the project file.
2.30 With the closing of the cozroded Puntarenas jetty in mid-1987, its gr-ainand cruise liner traffic is now handled at Caldera. The limited capacity at Caldera is causing increasing delays in the availability of berthing space and the port is now approaching congestion levels. The inmmediateneed is to postpone major port investments until Justified (around 1995) and avoid unacceptable levels of congestion at the minimum possible cost.
2.31 To evaluate the investments for increasing the rate of grain handling at Caldera and replacement of the Puntarenas Jetty, three alternatives to the existing situation were analyzed:
(a) cruise liners continue calling at Caldera but grain handling rate increases to 2000 tons per day; - 22 -
(b) cruise liners use the new Jetty at Puntarenas but grain handling rate remains at 1604 tons per day at Caldera; and,
(c) cruise liners use the new Jetty at Puntarenas and grain handling rate increases to 2000 tons per day at Caldera.
2.32 The results of the analysis (Table 2.3) show that the preferred alternative (c) yields the highest net present value (NPV, discounted at 12Z) of US$ 3.5 million and an ERR of 32Z. Although alternatives (a) and (b) are clearly justified individually, increasing the rate of grain handling to 2000 tons per day while simultaneously replacing the Puntarenas Jetty is the optimal solution.
H. Beneficiaries
2.33 Direct benefits of the project would accrue to the economy at large through reductions in road transport costs stemming from improved road surface conditions; the road transport industry being competitive, the reductions in transport costs are expected to be passed along to consumers and producers. Other quantifiable benefits would accrue to the economy through congestion reductions in Caldera. Non quantified benefits of the project, would accrue to the economy from reductions in maritime freight rates as a result of improved service times arising from increasing the rate of grain handling at Caldera. Additional non-quantified benefits to the economy would be derived from the expected increased efficiency of railway operations.
I. Environmental IniDact
2.34 The works for the road component-rehabilitation and periodic maintenance are technically simple, would be executed by competent contractors, supervised by qualified engineers and would neither entail sign;.ficantexcavation nor interfere with the fauna or flora. Minor alignment rectifications on some hazardous sections would involve small quantities of state owned non-agricultural land. However, the improved road surface conditions, geometric standards and adequate drainage will contribute to road safety and make domestic transport more reliable. The cleaning of clogged roadside ditches and drains as part of routine maintenance operations would restcre run off to the designed channels and thus break itE erosive potential. The design for the new Puntarenas jetty would conform to sound engineering practices. Transient interference with the seabed associated with pile driving -.s inevitable but the marine ecology would not be altered. FurthermLre, to ensure that all environmental effects of the proposed programs are adequately assessed, at negotiations it was agreed that MOPT will conduct environmental impact analyses for the annual work programs to be financed unde: the proposed loan and would submit to the Bank the environmental impact statements it would issue, including that for the first year program (para. 3.01 (f)). MOPT will discharge this responsibility using the existing capabilities in the Ministry of Natural Resources Energy and Mines and/or engage qualified consultants. In addition, MOPT should give satisfactory assurance to the Bank that the subprojects to be financed under the project will not have a negative effect on the cultural property of Costa Rica (para. 3.01 (n).
J. Assessment of Risks - 23 -
2.35 The proposed project does not pose any significant technical risk. A detailed first year program of works was prepared by MOPT. As the works to be financed under the project are technically simple - rehabilitation and periodic maintenance - the quantities are not expected to change substantially from the available estimates. However, aelays in project implementation may lead to higher quantities of works, the impact of which has been taker. into account in the sensitivity analyses. To ensure satisfactory quality control over the works, the project provides for the detailed engineering and supervision by competent consultants.
2.36 Because of the project's policy emphasis, the main risks are related to the Government's commitment and subsequent ability to master the political support to implement the needed institutional reforms, particularly in the railway. To con.tair.this risk, lcan effectiveness would be conditioned to an assessmtentof satisfactory progress in implementing the rationalization program and failure to continue implementing it satisfactorily would constitute default under the loan agreement (para. 3.02). Whereas the proposed project addresses the issue of the maintenance of the national road network, the present arrangements for the maintenance of the Cantonal roads are unsatisfactory. To address this problem the Government submitted a plan of action satisfactory to the Bank for the rehabilitation and maintenance of the Cantonal roads as outlined in paragraph 1.11. Compliance with the plan of action will be closely monitored during project supervision (para. 3.01 (c)) In addition the project would seek a more permanent solution to the maintenance of the Cantonal road network through the development of a decentralization strategy (para. 3.01 (b)).
2.37 An operational risk which in the past has caused delays in project execution is the availability of counterpart funds. To reduce this risk, the Government would be renuired, as a condition for loan effectiveness, to open a Project Account with an initial deposit of US$1.2 million, on terms and conditions satisfactory to the Bank (para. 3.03).
III. AGREEMENTS REACHED AND RECOMMENDATIONS
3.01 During negotiations, the Government agreed to:
(a) Carry out its 1991-1995 plan for the rehabilitation and maintenance of the Cantonal Road System and to review with the Bank, no later than June 30 of each year its compliance with the Plan during the previous year and inform the Bank on the proposed modifications on the plan (para. 1.11);
(b) Carry out the Program which includes an action plan for the gradual decentralization of the maintenance of Cantonal roads (Annex 2, and para. 1.12), an action plan for the rationalization of port operations (para. 1.20) and for INCOP to: (i) achieve Working and Operating Ratios of no more than 85Z and 93Z respectively by 1992 and maintain no worse a financial performance thereafter ; and (ii) set aside funds for dredging (para. 1.26); failure to implement the Program will constitute default under the loan; - 24 -
(c) Comply with the terms ard conditions of the Contract-Program between INCOFER and MOPT, the Minilsr or, Finance and the Ministry of Planning AS reviewed and updated by the Implementation Committee. Lack of satisfactory compliance with the Contract- Program would constitute default under the loan (para. 1.19);
(d) Establish and maintain a project account, satisfactory to the Bank, and open a Special Account in its Central Bank (paras. 1.40, 2.21, 2.23 and 3.02);
(e) Establish and maintain a Project Coordinating Group, with qualificaticns satisfactory to the Bank, t;ocoordinate project implementation (paras. 2.16 and 3.02);
(f) Furnish to the Bank, nCt later than June 30 of each year a work program fo. project implementation during the subsequent year snd its corresponding environmental impact analysis. The program's scope and content should be such as to permit early detection of implementation problems (paras. 1.40, 2.10 and 2.34);
(g) tUpdate, not later than June 30 each year, its five-year IMP following policies and criteria acceptable to the Bank and furnish to the Bank the results of such review (para. 2.06);
(h) Ensure that all investments included in the IMP are justified in accordance with criteria satisfactory to the Bank (para. 2.05);
(i) Engage independent auditors satisfactory to the Bank and submit the audit reports to the Bank not later than five months after the end of each fiscal year (para. 2.24);
j ) Engage consultants required to carry out the technical assistance in accordance to Bank procedures; at negotiations the Government provided outline terms of reference for the technical assistance component of the project (para. 2.13);
(k) Increase the use of contractors in the periodic maintenance of the primary and secondary roads to reach contractor's participation of 65% of MOPT's aggregate expenditures related to such maintenance by December 31, 1992 (para. 1.13);
(1) When 502 of the loan funds have been committed, the Bank and the Borrower would carry out an in-depth review of progress in project execution. For such review Annex 6 presents the performance targets for the project (para. 1.40);
(m) Include in the procurement documents for LCB a price adjustment mechanism for the foreign costs of all contractors (para. 2.13);
(n) MOPT to give assurances, satisfactory to the Bank, that. the subprojects financed under the project will be carried out in accordance with sound archeological practices in respect of the cultural property of Costa Rica (para. 2.34); and (o) MOPT to complete its reorganization study by March 31, 1993 and present to the Bank, not later than June 30, 1993 an action plan, satisfactory to the Bank, for the implementation of the recommendations of MOPT's reorganization study to be carried out under the technical assistance for developing a Transport Plan and comply with the terms and conditions of said plan in a manner satisfactory to the Bank (para.1.16).
3.02 Loan effectiveness would be contingent upon: (a) satisfactory progress in implementing the Contract-Plan to restructure INCOFER's services (para. 1.19) including, inter-alia, the appointment of the Implementation Committee to monitor compliance with the Contract Plan (rara. 1.32); (b) the appointment of a Project Coordinating Group with qualifications satisfactory to the Bank (para 2.16); (c) the Borrower setting-up a project account, sacisfactory to the Bank, with an initial deposit of US$1.2 zlilli(n to be replenisheX eve"v four months with budgeted ftnds and open a Special Account in its Central Bank (paras. 1.40, 2.21 and 2.23); and (d) the Borrower and INCOFER, INCOP and JAPDEVA entering into Subsidiary Contractual Arrangements to make available the loan proceeds to carry out the project (para. 2.16).
3.03 Subject to the above, the proposed project provides a suitable basis for a Bank loan of US$60.0 million. The terms would be 17 years, including a 5-year grace period. - 26 - TABLE 1.1
COSTA RICA
TRANSPORTSECTOR PROJECT
ROADNfTWORK
Type of Rood Total km Percent 1/ Ntional Network CbntonalNotwork (km) km Percent km Percent
Pavod 6037 14.3 3192 44.6 1846 6.6 Gravel 9119 26.8 3800 58.2 6519 18.9 Earth 21187 69.9 169 2.2 21028 74.6 Total 86548 100 7161 100 28192 100 ~~~~~~32UU _ =- ===U=S2 i/ Rounded off to the nearest decimal point. Soure-: MOPT, DiroccionGeneral do Planificacion,San Jose, 1988. - 27 -
TABLE 1.2
COSTA RICA
TRANSPORT SECTOR PROJECT
SECTOR's SHARE OF GDP
1978 1980 1982 1984 1986 3987 1988
Billion Colones l.28 1.74 4.49 7 84 10.76 12.86 16.87
As 2 of GDP 4.24 4.20 4.60 4.81 4.34 4.51 4.62
Percent Contribution by mode:
Road 64.26 64.00 51.00 59.00 60.72 60.00 62.00
Ports/Fluvial 13.00 14.00 15.00 17.00 16.80 16.89 17.02
Rail 8.80 9.00 8.00 7.00 5.12 4.69 4.50
Air 13.94 13.00 26.00 24.00 17.36 18.42 16.48
TOTAL: 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Source: MOP, Estadisticas del Sector Transportes, and Bank estimates. November 1989. - 28 -
TABLE 2.1
COSTA RICA
TRANSPORT SECTOR PROJECT
ESTIMATED SCHEDULE OF DISBURSEMENTS
(US$ Million and Percentage of loan Amount)
Percent IBRD FY Semester Amounitl/ Cumulative Percent2 / Cumulative
90 I 0 0 0 0 I1 0 0 0 0
91 I 4.6 4.6 8 8 II 5.0 9.6 8 16
92 I 6.0 15.6 10 26 II 6.8 22.4 11 37
93 I 9.2 31.6 15 52 II 7.3 38.9 12 64
94 I 6.2 45.1 10 74 II 5.2 50.3 9 83
95 I 5.9 55.5 9 92 II 2.5 58.0 4 96
96 I 1.1 59.1 2 98 II 0.9 60.0 2 100
1/ Based on the standard profile modified by initial deposit of US$4 million in the Special Account.
2/ Rounded to the nearest whole number. COSTA RICA TRANSPORTSECTOR PROJECT SUMMARYECONOMIC EVALUATION - FIRST YEAR ROADS PROGRAM (US3 MILLION)
ROAD NAME LENGTH AVEPAGE REHABILITATION ROAD MAINTENANCE LIFETIME ERR ERR ERR (km) DAILY TRAFFIC COST 1/ COST SAVINGS V.O.C. SAVINGS (S) !-9''S *20%) (BENEFITS -20%)
1. Barbilla-Liion 41.4 2123 2.63 0.41 4.1 18.2 i4 0 13.7 2. Siquirr.s-Barbills 18.6 3084 1.32 0.21 2.69 25.1 19.' 18.8 3. Esiabon-Siquirres 39.9 1749 2.12 0.22 8.36 37.6 3C0 9 28.9 4. Paraiso-C.rvant.s 16.0 2841 1.26 0.11 1.92 36.4 2e 7 26.9 S. Cervantes-Turriolb 18.0 2851 1.63 0.11 2.68 43.8 39.' 38.2 S. R.Gr-cia-R.Noranjo 8.2 5846 0.76 0.24 9.86 63.4 47.1 46.2 7. R.Naranjo-R.Palnar 8.3 6079 0.76 0.22 6.76 41.9 36.3 36.4 e. Arizona-Linona 8.0 2467 0.87 0.18 4.88 49.1 42-1 41.0 9. Linon*-Bagaces 48.0 1846 6.20 0.14 14.77 28.e 24 6 24.3 10. Bogace--Liberin 24.3 2480 2.63 0.68 2.81 64.0 60.6 48.2
1/ Including Supervision
November 1989
"3 COSTA RICA
TRAN5POR SBCTOR PP9jeu
51)9ARY ECIIPIC EVALUATION OF THE NB4 Pt,NTARENASJ.Ey
Sre.nrioe Ecaluoted Capital Coat Operating or Beat --- Not Prsnt V si------Best Econoc Rf _Retrnc_f Maintenance Eati.at. Benefits Benefit. Estimate Benefits Sn-f;te Coat Raduced Incr,*.ad R.duced _ .cr,asod by 401 by 40S by 405 Sy 401
1. Cruise liners continue
using Celdera Puntar.n. out of ervice. Crain handling rate increased to 20O0 t,d at Calders: a) No cost increaes 0.32 0 60 1/ 0.62 0-149 0.584 39.9 21 47.2 b) Coat increase by 201 0.364 0.60b J 0.458 0 086 0.6 34.1 10.0 36 1
2. Cruise liners us n_ Puntaranu grain handling ata r-_irn 1804 t.p a+ Cald*ra: a) No cost increase 6e5 0.40 J 1.342 0.16 2 534 20.C 13 1 27.3 b) Coet incresse by 201 7.8 0 50 V 0 W0s -0.384 2 16.7 0.6 22 7
S. Cruise liners use new Puntarenes grain handling rate increases to 2000 t4d at C-ldera. a) No cost increase 6.82 1.6 J 3.663 1.408 5.096 82 6 21.2 42.1 b) Cost incrbas by 205 8.18 1.7 iU 3.019 0.874 5.163 27.7 17.2 36 5
J Oerating and eintensnc, coats over ix years *-mad I ife tim aintenance coats for the jetty. J intenance coats for the jetty plus replacemnt of grain -acuator- aftar 6 years and their operating and saint.nance coats. J Capital and recurrent cots . one half of the benefits fro ship -aiting ti - 31 - FIGURE 1.1
COSTA RICA
TRANSPORT SECTOR PROJECT
REVENUES FROM USERS VS. ROAD EXPENDITURES
4 5 51 ~ ~ ~~~~~~~//
2 _/ 3
75 ?I 77 7e 7t Bo 6ie2 &i e4 B5 e 67 BB
0 RoadUser Chmgu + Expendklures - 32 - FIGURE 1.2
COSTA RICA
TRANSPORT SECIOR PROJECT
STRUCTURE OF ROAD USER CHARGES
73.
72
80 82 84e 67 e
V /l ourKfs CHREGISTER TEROLLS ;9 FUEL&O/L -33 - ANNEX l Page 1 of 3
COSTA RICA
TRANSPORT SECTOR PROJECT
ROAD TRANSPORT
A. Development and Traffic
1. Traffic counts on the national and regional networks have been carried out by MOPT in a systematic way for many years. Traffic data on secondary and feeder roads have not been gathered systematically, but a nunber of classified counts were made during the studies leading to formulation of the proposed protect. Most of the highway traffic is centered around San Jose and in the Central PlsLeau (Table 1). The main access roads to San Jose served an Annual Average Daily Traffic (AADT) of about 20,000 within the metropolitan area and about 8,000 in rural areas. Many roads in the Central Plateau carry an AADT of over 3,000, an amount that i. also reached by the access road to Puntarenas, while the access to Limon nas an AADT of only 1,000. The AADT on the Inter-American Highway averages about 2,000 to the north of San Jose and 1,000 to the south. The only other heavily travelled routes are the trunk road serving the Nicoya Peninsula, with an AADT of nearly 2,000 vehicles, and the access road to the San Carlos region, with an AADT of about 1,500. About one fifth of the traffic on the paved roads consists of heavy vehicles (Table 2). Traffic levels increased nationally by about 3% annually during the last five years which is significantly lower than the 8Z-9z growth registered in the 70s. This figure is well correlated with records of fuel consumrption.
B. The Vehicle Fleet
2. Vehicle registration has been accelerating in recent years, and Costa Rica reached, in 1987, a vehicle density of 73 vehicles per 1,000 population, a level of motorization that puts it at the head of the countries in its region. About 442 of the fleet consists of cars and light commercial vehicles make up another 44 of the fleet. Taxis account for less than 1Z of the vehicle fleot. Most of the taxis are located in metropolitan San Jose. Microbuses and btuses together account for about 22 of the fleet. The rest of the fleet (8.82) .s made up of trucks which number about 17,000 units.
3. The freight fleet is composed predominantly of single-rear-axle trucks commonly used for transport of agricultural products and manufactured goods over relatively short distances and with low load factors (less than 50Z). On most regional routes, these two-axle vehicles make up 65-80Z of the truck traffic; however, on truck routes serving the major ports or carrying international traffic, three-axle trucks and five- axle tractor and semi-trailer rigs make up 40t of the truck volume. Freight transport over the national.and regional highways is about 1,000 million ton-km per year. As in other Central American countries, there is considerable importation of used U.S. equipment, although this practice has -34 - ANNEX 1 Page 2 of 3 declined noticeably during the past three years. AR of 1986, MOPT statistics showed that more than 85Z of the cargo fleet was of less than 8-ton canacity and only 0.5Z was over 10 tons; 37Z of that fleet was less than five years old, 412 was from six to 15 years old, and 22Z was even clder. Although complete statistics are not yet available, recent MOPT surveys show that there has been a large increase in the number of 5-axle semi-articulated trucks operating in Costa Rica, and it is estimated that these large vehicles (20-ton payload) now comprise more than 52 of the freight fleet.
C. Organization and Operation of the Trucking Industry
4. Freight operators are composed of a few multi-vehicle companies and a majority of individual truckers owning one or two vehicles. Owner- operators represent about 93? of all owners and account for about 72? of the vehicle fleet. Their activities are usually related to agriculture, and the truckers often act as middlemen, operating mostly in rural areas. Individual truckers sometimes group themselves into cooperatives which protect truckers in certain geographical areas, or those dealing with certain commodities. Family corporations, representing 5Z of total ownership, account for 122 of the freight fleet. About 2? of the owners are organized as modern corporations owning 16? of the fleet, with an average of 15 vehicles per company. This well organized groups serve the intraregional market in competition with other regional firms, in particular from Guatemala.
5. There are no proper transport terminals in Costa Rica. Only the most important freight companies have their own yards, which can be utilized as terminal facilit4es. The General Customs Warehouses in San Jose act as receiving terminals for import merchandise. The Government, expressed interest in securing the Bark's assistance for the construction of a freight terminal with the objective of improving the efficiency of the interface between the various segments of the ind"stry. It would support the entry of dome.,ic operators in the inter-regional and intermodal services and, finally, would be a factor ih alleviating the problem caused bv the circulation and parking of large trucks in the city of San Jose. The feasibility of building the terminal as well as alternative ownership and operational schemes, will be evaluated under the updating of the National Transport Plan.
6. Urban as well as rural passenger transport is provided exclusively by private concessionaires ranging from single vehicle owners to companies operating up to 10 vehicles. Operating franchises are granted for a five- year period. Distribution of inter-city passenger services countrywide is reasonable. Of a total bus fleet of about 3,600 vehicles, 85? are 43-seat or larger buses operating with a relatively high load factor, and the remaining are 16-28 seat microbuses. The age of the fleet is adequate, particularly since, during the past three years, the Government has assisted operators in modernizing the bus fleet, especially in the San Jose area. -35 - ANNEX 1 Page 3 ox 3
D. Transport Regulation, Including Control of Weights and Dimensions
7. Government intervention in the organization of road freight transport has been minimal. Truckers operate freely over routes that they select, but under the obligation of annual registration and vehicle Inspection. The General Directorate of Road Transport in the Transport Division of MOPT regulates routes and fares for all bus services and franchises the new bus lines. Traffic regulations are enforced by A traffic police body, formerly under the Ministry of Public Safety, but organized at present as a General Directorate of Traffic Police under MOPT's Transport Division. There is no fixed rate structure for freight transport, with individual operators' rate levels being set by supply and demand. Regional companies base their rates on the tariffs published by the Centri& American Transport Association and mark up these rates depending on competition. Passenger transport tariffs have been under close scrutiny during recent years since operators claim that revenues do not cover operating costs.
8. Recorded financial costs incurred by single-vehicle owners are 152 to 302 lower than those of trucking companies. Single-vehicle owners are generally ready to operate with a lower profit margin; they play an important role in keeping the industry competitive and responsive to the demand. Under these conditions, savings in vehicle operating costs due to improved road conditions would, within a relatively short time, be passed on to the users. Better road conditions would also favor the use of more modern and more efficient trucks where these would lead to lower operating costs.
9. Maximum allowable vehicle weights and dimensions are based on the Central American Road Transport Agreement of 1958, which specified 8,000 kg as maximum single-axle and 14,500 kg as maximum tandem-axle loads. Since this is on the low side compared to many other countries, the Government has unofficially adopted the rule of permittirg overloads of 15%. corresprnding to 9,200 kg and 17,400 kg. Analysis of the very limited statistics available, supplemented by field observations, indicates that vehicle overloading is a serious problem on only a few routes, primarily those used by trucks carrying logs to the lumber mills in the Central Valley. Continuous overloading also occurs on some routes during peak harvesting of crops such as grains, sugar cane and plantains. To enforce weight regulations, six permanent scales are installed in different parts of the country. The weighing control section is attached to the Traffic Engineering Department of the Road Transport General Directorate. -36 - ANNEX 1 Table 1
COSTA RICA TRANSPORTSECTOR PROJECT
Intensity of Use of Roads in the National Network
Averge Daily Length of reods S*cti*A L.gtSh ea X t Surface Typo U Troffici s^" reffic tlo (k9) of paved roads
PAVED ROADS
Over 12,000 17,040 75 2.8 6,000 - 12,000 6,170 2 2.5 2,000 - 6,000 8,570 4t0 14.1 400 - 2,000 O90 1,511 *6.1 100 - A00 240 902 80.1 Le then 100 41 10 4.5
leightedAverage Daily Traffic * 1,OU
%PUAYM ROADS SectionLength so X of ufpoved roads
400 - 2,0 0 0 620 11 8.0 100 - 400 1W 12 24.0 Laos than 100 21 2,7"7 ?3.0
DaitMd Average Daily Terffie * Is
Seer..: S1irmUrate Generl of Plann"In MOPT, Son Jeso, October I"? - 37 - ANNEX 1 Table 2
COSTAMICA
TRANSPIORTSECTOR PROJECT
rutt;c Ojstrbte,lreg the Netlenaletorok (P.oretof Avermee DallyTraffIc) 1/
Llight Trucks Trucks Type of Road Trff ;c Vem2e Cars Vehicles Ouse (2 gale.) (3 sales) Trv*;Iefs
Paved (mport/ Over 1000 47.0 27.1 0.2 10.5 2.1 4.5 ExpertCerridors) 1000 - S00W 18.5 11.6 6.1 11.5 .9 11.2 500 - 1000 84.6 M1I5 5. 14.6 1.9 9.3 Loeethen 5O 27.3 25.J 10.1 15.2 4.0 14.1
OthorPaved Over 1000 $5.1 27.6 6.6 6.2 0.7 0.5 1000 - 1000 45.4 15.6 5.6 10.0 1.3 I.' 5O0 - 1000 45.4 U4.6 5.0 11.2 2.1 1.5 Ues than$00 45.0 $5.8 5.3 10.5 1.9 1.4
Zreved Gravel 500 - 1000 87.4 44.4 5.2 6.7 1.7 1.0 Laes ten 50 .' 46.2 3.4 10,A 1.8 1.6
1/ Tetal my get adW us to 100 becoua rofmwning.
Seu"ee: lreeerate General of Planning 'WT, Son Jege, OGobee 1966 COSTA RICA
TRANSPORTSECTOR PROJECT
Action Plan for th. Rationalization of Rallway Service,
Objectives Instruments Action Responsibilities Timing Inpact
1. Financial/ DOfinition of a Basic Identification of r MWPT/Consultontu December Improved Institutional Road Notrork for oach basic cantonal road 1991 technical and Canton network to ensure financial manage- adequate comunica- ment of the tions (Comprisoe the inveetioentein Notional Road Network the co,ntry's plus part of the road network Cantonal network)
On the basis of a w*ll MOPT/Consultants Dcember defined road network, 1991 and ranking of links stipulate responoi- biliti-n Lnd actions le-di.g to increase the technical and financial capability for road maintenance
Coordinate road MOPT/Consultants Decemer Improve Ineti- maintenance efforts 1991 tutional *ad between MOPT, Munici- comwinol palities, IFAM, Develop- ceordinaticn ment Council, and other community organizations
Create within WEPT a Provide technical and MOPT/Consultents December Trilor decen- Cantonal Road* Unit with financial guidance to 1991 trallzatioe normative functions the Municipalities to program to carry out road mints- particular nance. Co-dinsto the n-e inventories of the Cantonal Road Network
Participate in the MOPT/Consultants Decembr Strengthen MOPT's technical assistanco 1991 capabilities for o programed with carrying out and Multinational Financial monitor necessary Agencies studies and recommendationn Deaign and gradually MOPT/Conaultants Start Imoroy. efficiency ispl m nt, according to March and resource th- capability of each 1992- mobilization Municipality, a syatem completed financing the mainto- in March nance of Cantonal roada 1994
Deaign and gradually MOPT/Conaultants Start Improve officiency implement, a technical March in road assistance program 1991 m-einten-nee according to the needs completed of each Municipality to in March strengthen their capabi- 1994 lities to carry out road maintenance
Improve Cantonal Roada Each Municipality to MOPT/Municipali- Starting Improve resource m*intenance planning develop, with MdoT ties/Conaultants in June allocation and asmiotance,annual 1992 reduce m*intenance road maintenance costs progrn
2. Operatiouial Increasothe role of the Develop and implement MOPT/Conaultanta Decembr Reduce maintenance private sector and appropriateschemes to 1992 costs coemunity participation in encourage coemunity road maintenance participation through the development of micro-enterpri se, development asaocia- tiona, etc.
Provide technical MOPT/Conoult nta December Improve controct assi:tance to tho 1992 m_no _ent Municipalitie to dev-lop their capability for cost accounting and contract management
Improve the municipalities' Define the optimal MOPT/Conaultanta December Reduce maintenane > capabilities D' Z for management level of decentroli- 1992 cots 00 Z of road maintenance zation of road X equipment maintenance equip- "k- ment management and design schemes for the W appropriatedistribu- tion of equipmentsto municipalitiesor groups of munici- palities
Providetraining for MOPT/Consu.tnntn December Improveequipment the itilizationand 1992 availabilityand maintenanceof road utilization maintenanceequipment
Graduallytransfer the Completethe imple- MOPT/Consultants/ Starting Improveroad responsibilityfor the mentationof or Municipalities in maintenance maintenanceof the adequateinstitutio- January Cantonalr-ads to the nal and financial 1993 Municipalities structur-
0
4>-
OQ C
o t" Ft 0 - 41 - ANNEX 3 Page 1 of 6
COSTA RICA
TRANSPORT SECTOR PROJECT
RATIONALIZATION OF RAILWAY SERVICES
A. Background
1. The railway in Costa Rica consists of two major sectors: the Atlantic and the Pacific. The Atlantic line consists of: (i) the mountainous line between San Jose and La Junta; (ii) the central line connecting San Cristobal via La Junta to the port of Limon; (iii) the suburban spurline connecting San Jose to Alajuela; and (iv) the spur connecting Limon to La Estrella. The Atlantic line was built by private intetests and up to 1972 was operated by the Northern Railway Company. That company's concession was abolished that year and the railway passed to the Government. The Pacific line was built by the Government and its electrification was completed in 1930. It consists of: (i) the connection between San Jose via Salinas and the port of Caldera; (ii) the line connecting the port of Puntarenas to Salinas; and (iii) the spur connecting Ciruelas with Alajuela. The total length of the network is near 600 km; an additional railway line has operated until 1985 in the South Pacific but it was dismantled and the materials are to be used in the rest of the system or sold.
2. With the dissolution of the Northern Railway Company in 1972, the administration of the Atlantic line passed to the Atlartic Port Authority (JAPDEVA) and that of the Pacific line, passed to the Pacific Port Authority (INCOP). In the interest of unifying the operations and improving the management of the two railwavi, the Government created, in 1975, the Railway Company of Costa Rica (FECOSA) as a subsidiary of the Costa Rican Development Corporation (CODESA). The two railways passed to FECOSA which operated them until l9f.5when FECOSA was dissolved and the present railway authority (INCOFER) was created. At this stage the Government assumed the considerable debts accumulated by the previous organizations and a tax on all banana exports (whether by rail or road) was created to generate funds for the operation of INCOFER, earmarking resources for railways maintenance.
3. With the development of the road infrastructure (starting in the 60s) the railway has lost its predominant role. Preliminary studies carried out by the Bank show clearly that short of restricting railway operations to the "banana line' (i.e. the central line) there are no financial or economic prospects for the railway. The Government, aware of the foregoing, had ambitious plans to end all subsidies to INCOFER as part of SAL II agreements. For 1988, the year in which all subsidies to INCOFER were to end, the railway's deficit was about 580 million colones while this year the estimate is 550 million colones. - 42 - ANNEX 3 Page 2 of 6
4. The following paragraphs present an analysis of the railway's operations, cost structure, the allocation of the costs to track and operations and the sources of INCOFER's revenues. The plan to scale down railways operations is presented on paragraph 18 onwards. Government is finalizing the analysis of the proposed plan which has been found acceptable to the Bank during project appraisal. The Government and INCOFER should make contractual arrangements (Contrato-Programa) to Implement the plan and the Bank would monitor the achievement of its targete. The presentation of the "Contrato-Programa" signed and approved would be a condition of ioan negotiation.
B. Railway Operations
5. INCOFER is a typical non-specialized all type of service railway. It provides freight car load. less-than-car-load services, passenger and parcels services in almost all the network. The lack of clear objectives, coupled with inexperienced management and no specific marketing strategy has resulted in a continuous deterioration of the reliability and safety of their services. As pationage shifted to road transDort, the railways reaction was to lower tariffs. As a consequence, the railway has consistently operated in the red, requiring considerable transfers from the Government to meet its operating costs. Generally, the condition of the track as well as the rolling stock is poor. More than 55Z of the track is in poor or bad conditions. The lack of maintenance is directly related to the limited resources of INCOFER to afford their expenses. There is no preventive maintenance nor adequate management and stock of parts and spares. This is the result of the railways acting as a production oriented enterprise with little consideration to cost, efficiency or profitability
6. The railway participation in total traffic movement (both passengers and freight) account for less than lOZ. Table 1 shows the volumes of passengers and freight on each sector of the system. Passenger traffic remained stable at a level of 2.0 million per year; two thirds are on the Atlantic Sector and one on the Pacific. Freight traffic was near 1.7 million ton (without including the South Pacific which was closed in 1983) until 1982 but it started to decrease up to a minimum of 0.8 million in 1985. Since then, there was a continuous recovery; the total volume expected by the end of 1989 is near 1.0 million tons. Of the total freight transported by the railway, banana is certainly the main commodity, ranging from 35Z to 52Z of the tons moved during the last few years. While in the 1981/82 more than 95Z of all banana traffic was moved by rail this participation dropped to less than 45Z in recent years.
C. Railway Management and Staff
7. INCOFER is conducted by a council of directors, representing different agencies of the Government and labor unions. The Executive President chairs the council and also acts as general manager. Four main areas depend directly from the Executive President: (i) Planning and Development; (i';) !:umaA,Resources; (iii) Administratior, Fih,anceand - 43 - ANNEX 3 Page 3 of 6
Marketing; (iv) and Operations. INCOFER's management is generally competent in the technical fields, but its experience in business and commercial areas is weak, owing largely to the neglect of these matters in a production oriented enter?rise. Restructuring the railways would encompass, in addition to cnanges in scale, developing managerial skills better suited and more responsive to commercial objectives. This change will require substantial technical assistance in the use of modern managerial tools. A management information system should be implemented to aid the decision making process in a changing environment. The system should provide the necessary understanding of the cost of each service and the possible revenues, in order to define a suitable marketing strategy for the railways.
8. Given the size of the system and its operations it is clear that the railways were and are overstaffed. However, since 1983, staff has been reduced from 320t people to the present 2300. INCOFER intends to lay-off 1000 persons by the end of 1993, at a rate of 250 yearly. This program will be accomplished by means of pensions, transfers to other Government agencies and severance payments. Implementation of this program will require a firm commitment from the Government to make the funds available for legal compensation (prestaciones legales) which have been estimated at about US$2.7 million during the four-year period, To alleviate the social cost of this program, the Government is considering the provision of training of redundant personnel to facilitate the reallocation process.
D. INCOFER's Potential Role in the Sector
9. To determine the role that the railway can play in the future, the Bank carried out in 1988 an exhaustive analyses of the potential profitability of different lines and services provided by INCOFER. Details of this study and its conclusions, which continue to be relevant to date, are presented in paragraphs 10 to 16.
(i) INCOFER's Cost Structure
10. Table 2 presents a summary of INCOFER's cost structure for 1987, which still remains substantially valid. The cost matrices are organized according to operationally relevant categories. Maintenance and operations account for 49Z and S6Z of the costs for 1986. 42Z and 402 of the costs for 1987 and 40Z and 36Z of the costs for 1988. Wages and operating costs (primarily energy) account for nearly all of the costs incurred by INCOFER: 982 in 1986 and 96Z in 1987. The results clearly shows that the railway is overmnanned and major cuts in the payroll must be made if INCOFER's books are to be balanced. In 1986, every CR$ earned in revenues involved a cost of CR$ 3.36, and, in 1987 it involved CR$ 2.62. For the same years, each CR$ in revenue earned entailed a cost in wages and operating costs of CR$ 3.29 in 1986 and CR$ 2.51 in 1987 showing clearly the magnitude of overmanning in INCOFER. Table 3 shows the expenditures of the railway during the period 1979 to 1988, presented according to operational categories. - 44 - ANNEX 3 Page 4 of 6
(ii) Allocation of Fixed and Variable Costs
11. As part of the 1988 Bank study, the actual costs incurred by INCOFER in 1986 and revenues from operations have been allocated to track and services (Table 4). The inescapable conclusion based on the analysis presented is that with the exception of the banana, all other services produce a deficit and do not even cover the variable costs involved. First, actual costs incurred nave been allocated as fixed and variable costs, and second, the minimum possible costs for the railway hiavebeell estimated based on the assumption that possible operational efficiencies such as improved train scheduling, elimination of duplicate crews, etc. have been implemented but the scale of operations remains invariable. The objective of deriving the second set of costs was to evaluate, assuming efficient railway operations, whether the railway could be operated profitably given its present scale of operations. Overall, the estimated minimum costs are 22Z lower than the actual costs incurred.
12. As shown in Table 4, none of the passenger services provided by INCOFER on either the Atlantic or the Pacific line cover even the variable costs. The same holds for the minimum possible cost hypothesis. The total revenues from passengers amounted to CR$ 43.5 million and the total costs of servicing passengers was four times larger than the revenues: CR$ 174.1 million under the actual costs and about the same under the minimum cost alternative.
13. Regarding cargo, only the banana line shows a meaningful surplus. The CR$ 127.2 million in costs produce CR$ 149.3 million in revenues; a surplus of CR$ 22.1 million. Under the minimum cost alternative, the surplus would have been about 'ive times larger; CR$ 94.3 million. With the exception of the wheat haulage to Barranca, none of the other cargo services cover even the variable costs.
(iii) INCOFER's Revenues
14. Tables 5 and 6 show the volumes of cargo and passengers hauled in 1987 on the Atlantic and the Pacific lines, the average haul distance, the revenue from each service rendered and the estimated revenu'?per ton hauled and the revenue per ton kilometer moved. About 18Z of the revenues in 1987 came from domestic cargo operations tmost of the domestic freight is moved by truck) while the rest were derived form import/export oriented operations. The latter accounted for 63Z of the revenues in 1987. This shows a clear lack of balance (empty back haul) in the nature of INCOFER's operations and explains, in part, the high cost.of operations. The extremely low revenues per ton kilometer are, to a great extent, the result of low fares in the trucking industry, which is experiencing excess capacity.
15. The foregoing distortion becomes starker when the revenues from cargo operations alone are compared. In 1987, 64Z of the revenues on the Atlantic line came from exports (mainly bae,ianaand other fruit) and 87 frorn imports. During the same year, fully 822 of the revenue from cargo - 45 - ANNEX 3 Page 5 of 6 operations on the Pacific line were derived from imports (there is virtually no export traffic on this line).
16. The short transport distances, the empty backhauls, the low revenues per unit of cargo hauled and the high cost of operaticns (mostly the wage bill) are the factors that explain the railway's diminished role in the sector.
E. INCOFER's Financial Performance
17. The railway's financial results reflects the absence of appropriate objectives and the lack of reaction to stop a growing self- destructing process. Table 7 shows operational revenues and expenditures for the 1979-1988 period together with the deficits and the revenue/expenditure ratios. While until 1983 revenues covered at least 70Z of expenditures, since then the proportion s-arted to drop, reaching 422 in 1986. Soon after the situation started to improve and the nominal deficit stabilized, which means that in real terms it has been reduced. During 1989 the operational deficit would account for about US$6.7 million.
H. The Contract-Program
18. With the objective of restructuring the railway services to make INCOFER a self-financing enterprise, a preliminary 'Contrato-Programa' (contract-plan) has been discussed between INCOFER and the Ministries of (i) Public Wcrks and Transport; (ii) Finance (Hacienda); and (iii) National Planning and Economic Policy (MIDE PLAN) to:
(a) define clear objectives for the 1990-1993 period;
(b) establich quantified operating and financial results and define target dates leading to a 1994 elimination of the operating deficit;
(c) set an agreement on the mechanism to support investments; and
(d) assure the Government support to INCOFER management and financial requirements.
The main issue for INCOFER is to concentrate efforts on applying a commercial approach to increase revenues and only provide additional services when marginal revenues are above marginal costs. The elimination, or at least a drastic reduction, of passenger services is one of the necessary steps towards that objective. Reduction of personnel to reduce expenditure is also a key objective. The "Contract-Program" sets obligations for INCOFER and the Ministries involved and contains clauses of control, revision, updating and non-fulfillment that will mainly suspend disbursement from both the Government and the Bank, in regard to the Sector Loan. - 46 - ANNEX 3 Page 6 of 6
19. The contract-program being considered by INCOFER and the Government is based on the following specific targets: (i) staff reductions to reach 1300 employees by 1993; (ii) increased revenues in constant 1989 colones from the estimated C$635.0 million in 1993 to C$865.0 million in 1993; and (iii) reduce Government subsidies by an average 202 per year, to reach constant 1989 C$162.0 million in 1993. It is expected that, as INCOFER strengthens its capability to gather and process technical and financial information, the contract-program will evolve into a more detailed corporate plan including dissagregated traffic and revenue projections: principal operating parameters and statistics and detailed operating costs; and full financial projections. 47- - - 47 ANNEX 3 Table 1
COSTA RICA
TRANSPORT SECTOR PROJECT
Railway Traffic - Passengers per Sector
Year Pacific Atlantic Total
1977 N/I 1,034,853 - 1978 831,233 1,221,059 2,052,292 1979 878,628 1,288,466 2,167,094 1980 816,885 1 155,339 1,972.224 1981 708,100 1,043,873 1,751,973 1982 947,761 1,366,074 2.313,835 1983 921,948 1,518,377 2,440,325 1984 7:7,659 1,254,698 1,982,357 1985 671,718 1,294,086 1,965,804 1986 718,958 1,123,369 1,842,327 1987 642,103 1,236,400 1,878,5C3 1988 640,102 1,282,326 1,922,428 1989 666,341 * 1,297,034 * 1,963,375 *
• Estim.ated.
Freight Traffic per Sector (tons)
Year Pacific Atlantic Total
1977 524,604 1,136,425 1,661,029 1978 424,789 1,177,496 1,602,285 1979 514,039 1,206,496 1,720,535 1980 474,930 1,160,421 1,635,351 1981 398,207 1,267,663 1,665,870 1982 331,169 1,311,410 1,642,579 1983 314,421 1,222,913 1,537,334 1984 306,930 778,039 1,084,969 1985 299,676 504,877 804,553 1986 339,274 514,217 853,491 1987 366,387 518,787 885,174 1988 362,832 611,199 974,031 1989 356,870 * 640,700 * 997,570*
* Estimated.
Source: INCOFER - November 1989 -*48 ANNEX 3 Table 2
COSTA RICA TRANSPORTSECTOR PROJECT INCOFER'SCost Structure C.R.S. Mililon 1987
Oth-r Dopro- X W*q*+Oth.Cost Wages Op.CostsOtner elatlon Total to Rev. OPERATIONS:
Maintonaneo:
Track 195.60 32.62 0.14 4.19 22.56 568.46 Rolling Stock 169.18 28.28 4.87 0.10 198.89 40.72 Workshops 4.05 9.69 0.00 0.00 14.64 3.75
Sub-Total as9... 65.59 4.81 4.29 434.07 106.93
OperatingCosts 296.32 82.89 1.82 9.51 891.64 97.61 Other Operstions 13.85 0.69 0.08 0.00 14.52 3.70
Sub-Total $12.17 82.90 1.40 9.51 406.0e 101.21
OVERHEADS:
Administrotlon 183.94 12.44 16.12 0.43 161.93 17.49 Cenoral 8.68 2.86 0.00 0.01 11.07 2.93 Flnoncisl Charges 0.00 8.76 6.49 0.00 10.27 0.97
Sub-Total 142.62 18160 21.61 0.44 168.27 41.29
TOTAL 814.47 167.17 27.52 14.24 1028.40 251.43 8~-- - TOTAL REVENUES 890.42
Tot. Cost/Rev. 2.62
Wages/Rev. 2.09
------__ w ; Wage.Oth.Cost/Rov. 2.61
Source: INCOFER,Direccion Flnciers, Son Jose, March 1998 ~49 - ANNEX 3 Table 3
COSTA RICA
TRANSPORT SECTOR PROJECT
INCOFER's Total Expenditures (1979-1988)
(Colones '000)
Genexal Operational Financial Maintenance Expenditures Administration Expenditures Totals
66,574 63,118 20,698 1,903 152,293
88,341 91,653 25,142 18,293 223,429
104,063 115,065 32,035 11,779 262,942
157,233 171,052 46,887 20,418 395,790
282,499 283,215 i8,402 29,568 663,684
390,559 358,546 103,067 29.959 882,131
324,806 330,941 95,122 32,711 803,580
351,664 275,781 98,392 3,804 729,641
434,124 417,139 161,934 10,276 1,023,473
480,028 459,230 182,594 4,826 1,126,678
Source: INCOFER, Direccion de Planificacion y Desarrollo - 50 - ANNEX 3 Table S
COSTA RICA TRANSPORTSECTOR2 PROJECT Allcati.o of Cete(C.R.S 1111Iin,1966) Actual Costs Mlsman Cost Poasible ______--______--- _- _ _----- Actul Costs winiiumCosts TRACK: VariableFi ed Totol arblb Flixed Total VariableYotal VariableTotal "tlani/e/aanLime. Esteel? 35.00 I8g0 ".80 10.00 21.00 11.00 35.00 $8.30 10.00 81.00 Cnteal line 76.70 25170 2440 2000 26.00 42.00 73.70 194.40 2 .00 42.00 Other Spvur 8 70 6.40 46.10 0 '* 18.00 27.00 8 .70 45.10 9.00 27.00 Sut 'Ttel 10.40 28.00 17t.40 46.W 5.00 100.00 150.40 176.40 46.00 100.00 Atlantlc/Mo.atainLlin: Lo Jnto - Co-tago 61.50 10.I0 02.40 42.00 11.00 53.00 51.50 02.40 42.00 68.00 Crtego - AleJuel 29.20 6.60 85.00 28.00 7.00 80.00 29.20 85.60 23.00 30.00 Sub-Total W. 70 17.50 oe.20 05.00 11.01 68.00 30.70 9e.20 6s.00 68.00 Pacifle Li (all) 126.90 87.20 16. 10 108.00 87.00 140.00 12"8.0 6..10 103.00 140.00
TOTAL TRACK 800.00 62.70 442.70 218.00 110.00 323.00 o60.00 442.70 213.00 323.00 0lffer.ne:Revanue-Costa Revenue Acturl Coats Minimue Costs CRIillion VeriabloTotal VariableTotrl SERVICES: ------PASSA"ERS Atlantic LUna Bansna Line 56.90 18.00 69.90 64.00 11.00 65.00 14.60 -42.40 -56 40 -39.50 -60 So Mountain Line 5S.50 3.20 05.70 61.00 7.00 58.00 *.60 -46.70 -54.90 -42.20 -49.20 SuburbonSon Jose 7.40 3.00 10.40 6.00 8.00 9.00 2.70 -4.70 -7.70 -3.30 -6.30 Sub - Total 119.60 24.70 144.00 111.00 21.00 132.00 26.00 -93.60 -116.00 -s6 00 -106.00
Pecific Line Ji.60 12.60 30.10 22.00 11.00 48.00 17.60 0.00 -12.00 -14.50 -26.60
TOTAL PASSENGERS 137.80 86.00 174.10 143.00 32.00 176.00 43.60 -98.90 -130.60 -98.50 -131.50
Atletic/SomnonLlne Eutr-fll 27.90 9.20 86 10 10.00 7.00 17.00 56.10 26.20 17,00 43 10 36.10 Other Ban 59a6e.20 20.20 79.40 11.00 17.00 28.00 36.50 27.30 7.10 7c.60 56.50 Non anoaa Cargo 5.10 6.60 11.70 4.00 6.00 10.00 9.70 4.e0 -2.00 6.70 -0.80
Sub - Total 92.20 8S.00 127.20 26.00 80.00 66.00 149.80 57.10 22.10 124.80 94.80
Leoethen Car Lood 26.90 4.70 80.60 J8.00 4.00 87.00 3.40 -22.30 -27.20 -29.60 -38.60 bountaln Line Cargo 94.40 21.30 116.70 70.00 16.00 oe.00 65.20 -81.20 -52.50 e..0 -24.00 Sub - Total 120.80 2e.00 146.80 108.00 22.00 125.00 64.60 -43.70 -79.70 -88.40 -68.40
Pacific Line; Wheat/aerranec 1.10 2.20 8.40 1.00 2.0 3t.00 8.60 2.70 c.40 2.80 0.30 Other (Full Carl 7i.40 43.80 126.70 67.00 40.00 127.00 68.30 -9.10 -E7.40 -13.70 -56.70 Lsec than Car Loed 22.60 1.70 24.50 19.00 1.00 20.00 1.60 -21.00 -22.70 -17 20 -13.20
Sub - Total 101.80 52.80 158.00 107.00 43 00 150 00 73.90 -27.40 -79.70 -33 10 -76.10 TOTAL *VICES 461.10 160.10 001.20 576.00 127.00 606.00 383.50 -117.30 -207.90 -44.70 -171.70
Un4A11cIted(Jolt) 138.30 36.00 171.80 100.00 80.00 17C.00 33.90 -99 b0 -137.60 -46.20 -96.20 C0tA) TOTAL 944.40 270.60 1216.20 691.00 267.00 958.00 07.10 -677.10 -448.10 -323.90 -690.30 ------mm mumn-*.-.s M _m __ u Source:INCOFEU,Olrecclon Finonciera and Mission Estimate - 51- ANNEX 3 Table 5 COSTA RICA TRANIPIRT KCTOR PROJECT TNCOFr'S Revenueo r.m Operstlens Atlentic Line (1"7)
Tone Ter-Ies. Rev. Cots CI 0s libeeseo 1ito (MIullen) (MlIIloe) Nov./To For 4wn/ka. CnOMMDITY MOM. 9 CUMITIVED: ------
OMESTIC CARGO: Packer"g: Llm./Estrello 17.30 54.00 0.36 6.02 n83.20 6.26 Llmon/Spwr li"* 7.60 105.00 0.30 5.02 oo0o.5 0.29
Wood Vegetables FuwlsMien/Certee 97.90 141.00 18.30 51.40 525.03 3.72 Other 16.20 164.00 2.6 10.67 668.64 4.02 Sub-Total 123.30 131.00 10.15 02.44 506.41 3.37
IWORT TRAFFIC: Stool-Colima 4.60 170.00 0.76 2.67 530.43 3.41 Popor:S.Jose 2.10 166.00 0.35 1.23 609.12 3.69 SoynFlour:S.Joeo 0.50 165.00 0.00 0.24 430.00 2.91 Botiled Drinks 2.00 135.00 0.37 1.29 045.00 8.49 misc. 24.00 175.00 4.20 14.52 60o.00 1.46
Sub-Tot*l 33.20 127.00 4.22 20.00 002.41 4.74
EXPORTTRAFFIC: Snning: Estrella/Moin 227.20 54.00 12.27 92.47 362.96 6.72 Other Spuea/id.l 97.40 106.00 10.23 03.72 706.64 6.72
Sub-Total 324.60 79.00 25.64 151.19 465.77 5.90
OTHER: Own Account 17.40 Parcel, and/or Mall 1.50 4.47 2910.00
Sub-Total 13.30 3.00 1.66 4.47 230.51 2.69
TOTAL CAtOO 500.00 02.00 46.00 233.10 476.20 5.13 of which: _ ___ - _ ___ ------lmport/Export 367.30 30.00 82.20 171.19 478.45 5.32 Full cor 431.10 110.00 62.92 238.63 436.62 4.41 boeotlc 128.80 131.00 16.15 62.44 Pisoengoro(1000) 1303.00 22.64 17.30 Pth*r Servicee 2.-
RIEVUIE FROM PER: 90. 04
TOTAL REVENUES: 20J.63
Source: IKCOFER, Direccion de Planiflcacion y Proyectoe, March 1"7 52- ANNEX 3 Table 6
COSTARICA TRANStORTSECTOR PROJECT INCOfERS Revenues From Operations Pacific Line (1967)
Tons 1om-e. Row. CR ICII U s Thousand km. (MillIon) (Million) Rev./TonPer ten/km. COMIODITYMOVED: ------______------OOMESTICCAROO: ______W,lat.:Brra/AImjwela 15.60 f6.00 1.88 4.62 2n.0e 8.47 Wood 4.90 140.00 0.69 2.28 455.10 8.25 Other 6.00 149.00 0.39 8.06 610.00 8.42
Sub-Total 26.4 110.00 2.91 9.91 875.83 3.40
IMPORTTRAFFIC:
Wheat: Punts./Aljuele 9.40 101.00 10.04 86.23 J84.61 8.81 Punts./Sarrane 88.10 15.00 0.50 1.69 57.10 8.81 Steel 120.10 95.00 11.41 86.79 806.88 8.22 Beer 4.40 120.00 0.53 1.9Vw 446.46 8.71 Misc. 11.30 95.00 1 12 $.Ce 269.82 2.78
Sub - Total 263.30 37.76 28.59 61.93 104.60 8.47 ------OTHER
Own Account 3.70 Parcels and Mail 0.7 1.43 2042.36 Calderabound cargo 1.50 75.00 0.11 0.41 278.83 8.64 Sand and Stone 60.80 96.00 5.78 6.11 101.88 1.07
Sub - Total 71.20 32.04 5.64 7.95 111.66 4.71 ------_------_ TOTAL CARGO 866.40 37.00 81.33 9.79 272.85 8.18 Of whlch: ------Import 263.30 67.78 28.69 31.98 804.30 8.47 Full car 857.00 90.00 82.18 96.86 275.62 8.06 Domestic 26.40 110.28 2.91 9.91 876.83 8.41 Possengers(1000) 539.00 13.80 31.75 Sales:Sand/stone 3.30 Other Services
EVEtUE FROM OPER: 126.97
TOTALREVENUES: 185.27
Source: INCOFER,Dlroccion de Plonlflcaclony Proyectos,March 19137 - 53 - ANNEX 3 Table 7
COSTA RICA
TRANSPORT SECTOR PROJECT
Summary Financial Performance (million CR $)
Operating Operating Operational Year Revenue Expenses Deficit R/E
1979 126 152 26 0.83 1980 159 223 64 0.71 1981 214 263 49 0.81 1982 342 396 54 0.86 1983 696 666 -30 1.05 1984 584 882 298 0.66 1985 429 804 375 0.53 1986 311 730 419 0.42 1987 442 1023 581 0.43 1988 540 1127 587 0.48
Source: INCOFER, Direcci6n de , ificaci,n N Desarroilo -54 - ANNEX 4 Page 1 of 7
COSTA RICA
TRANSPORT SECTOR PROJECT
THE PORT SUB-SECTOR
Costa Rica's Ports
1.01 Costa Rica has six ports on the Pacific coast handling about 25Z of the country's international maritime traffic and two ports on the Atlantic coast, handling about 75Z of the traffic.
1.02 The Pacific coast ports include two public ports, Caldera and Puntarenas, which are owned and operated by the Instituto Costarricense de Puertos del Pacifico (INCOP) and four specialized ports, which include Morales, for sugar, Fertica, for materials to and from the fertilizer plant, Golfito and Quepos, both banana ports (although Quepos is now little used). Fertica and Morales are industry owned and operated. Golfito and Quepos are owned by the MOPT, jointly with the local development agency in the case of Quepos.
1.03 The two Atlantic coast ports are under the jurisdiction of the Junta de Administracion Portuaria y de Desarrollo Economico de la Vertiente Atlantica (JAPDEVA). Puerto Limon is operated by JAPDEVA. At Moin, the banana berths are operated by JAPDEVA whilst the petroleum products berth is operated by the oil company (RECOPE). This annex is concerned primarily with the berths operated by JAPDEVA (Limon and Moin) and with the movement of goods between these ports and the capital, and, to a lesser extent, with the ports of INCOP (Caldeta and Puntarenas).
Port Organization
1.04 The Ministry of Public Works and Transport (MOPT) is responsible in general terms for the development of the porto of Costa Rica. Major development schemes at the ports are prepared and executed by the MOPT, either in response to requests from the port authorities or on the basis of the Ministry's overall assessment. Works, once executed, are put at the disposal of the port authorities, who are then at least in principle responsible for their maintenance, without the port authorities assuming any financial obligations for the assets transferred. Major maintenance and rehabilitation is usually the responsibility of the Ministry though not invariably; for example, the rehabilitation of Muelle 70 at Limon is funded by USAID and executed by JAPDEVA.
1.05 The preparation of overall port development plans is the responsibility of the Planning Directorate of the MOPT (DGP) with schemes submitted for MIDEPLAN's scrutiny and approval according to the procedure for public sector investment. Development w2rk at the Ministry is the responsibility of the Department of Port Works (DOP), part of the Directorate of Port and River Works (DGOPF) which is itself part of the Public Works Division. Tariff and related studies including the introduction of measures to improve port productivity are *he responsibility of the Directorate of Maritime Transport (DGTM) within the Transport Division of th^-Ministry. -55 - ANNEX 4 Page 2 of 7
1.06 The budgets of the port authorities are approved by the National Audit Board (NAB) following the normal procedures for public sector bodies, though without a formal procedure for their technical analysis by the MOPT. There is no clear procedure for project preparation, whether within the MOPT or within the two authorities. A two level National Port Council (Consejo Nacional Portuario) was established in 1982 with a Council drawn primarily from government and the authorities plus an advisory board with members from port users.1 In the absence of a full time secretarial and tec.;nicalstaff, the Council's functioning has been marked by periods of intermittent activity, although recently it has begun again to meet regularly and has set-up sub-committees on special items i.e. cruise- vessels, grain handling and labor problems in JAPDEVA.
1.07 The National Transport Plan recommended the strengthening of the coordinating and regulatory role of the Direccion General de Transporte por Agua (as it then was), with the idea of creating a National Ports Authority (NPA) at the opportune moment.
1.08 The present organization of the port sector, involving the Ministry and the two port-cum-development authorities, lacks clarity and hence does not provide effective control nor ensures the best allocation of resources. The essential elements are for the port authority budgets to be subject to a thorough analysis based on an understanding of the costs involved and for the port investment plans, both of the port authorities and of the Ministry, to be evaluated on an overall basis, i.e., looking at national traffics and projections and hence needs. A strong and united position in front of the shipping lines is a priority. Another is the administrative strengthening of the existing National Parts Council. One option is the immediate creation of a national ports authority but there is. in our view, an important clement of timing in the identification of the best institutional arrangement. Where a period of substantial infrastructure investment is anticipated, then a'national port authoritv can do much to ensure a rational allocation of re3ources and to achieve standardization in equipment and systems. Once major investments are in place the need is to make most efficient use of them and here the direct responsibility of port management (and a certain degree of competition) are the priority elements, where separate authorities may be preferable.
1.09 A Ports Office within the MOPT has been reactivated by bringing together the DGOP and the DGTM, in order to advise the Minister in the areas outlined above. This office serves as a focus within Government for ports and maritime affairs and could at a later stage form the basis of a National Ports Authority, should this option be chosen.
JAPDEVA
1.10 JAPDEVA was establishea in 1963 and reformed in 1973 with responsibility for port administration, planning and development on the Atlantic coast plus the economic and social development in the region. A
1/ The Council includes: the Minister of Public Works and Transport (as President) plus the Minister of Finance (or nominee), the presidents of INCOP, JAPDEVA, RECOPE, INCOFER and the Directors General of Public Works and Maritime Transport (Decreto 13894-T of 29 September 1982). - 56 - ANNEX 4 Page 3 of 7 general manager is responsible for three divisions: Port, Administration and Development. Thus, the administrative function is common to the two operating divisions. The Port Division comprises four departments: Port Operations, Technical, Marine and Marketing. The Port Operations department includes Supervisors for Limon and Moin. An important duty of JAPDEVA is the issuing of licenses for stevedoring companies to work in the port.
INCOP
1.11 INCOP was established in 1953 and reformed in 1972 with responsibility for the administration, planning and development of the Pacific coast ports, in practice Puntarenas and Caldera. Its organization includes three divisions: Engineering, Administration and Finance, Port Operations. All operations, including stevedoring, are undertaken directly by INCOP. The Executive President and the boards of both authorities are appointed by the President of the Republic. The boards each consist of six members, three of whom are elected (for eight-year terms) every four years, with the change in Government.
1.12 Given the size of the ports involved: approximately seven berths on the Atlantic coast at Limon and Moin, and five berths on the Pacific coast at Caldera and Puntarenas, the orga;.izational structures of both authorities are disproportionately complex. Some further decentralization of functions, including administration, to operating units appears to be possible. The relative roles of the two authoritiesand of the M4nistry 'll respect of the functions of planning, development. maintenance a.d administration are not explicitly defined, nor the mechanism for their interaction.
Port Employment
1.13 JAPDEVA employs approximately 1,500 persons, of whom about 1,100 are engaged in port related activities. To this number has to be added the stevedores: there are approximately 1,500 men registered as stevedores, though since this work is casual, this number is probably equivalent to 600-700 full time positions, making a total for Limon/Moin of 1700-1850 iobs. INCOP currently employs just o,rer 1,000 men. Based on traffic volumes and on international standards. totals around 1250 at Limon/Moin and 750-850 at Caldera/Puntarenas would be appropriate. The number at Limon/Moin is particularly sensitive to the proportion of bananas that are containerized: if this proportion, currently 262, were to increase substantially the number of men required would be less.
Port Traffic
1.14 Total port traffic in 1988 was just over 3.1 million tons of which 732 was through Atlantic coast ports and 272 through Pacific coast ports. Up to 1964/65, the two coasts had equal shares of traffic. With improvements first in the railway between the Atlantic coast and the -57 - ANNEX 4 Page 4 of 7 capital and more recently with road improvements, the share of the Atlantic coast ports has increased steadily. Annual traffic growth over the past 20 years has been about 92 on the Atlantic coast and about 3? on the Pacific coast.
1.15 Atlantic coast traffic has increased from 1.96 million tons in 1982 to 2.8 million tons in 1988. During this four year period petroleum. Products traffic has increased by 45Z and non-petroleum products by 192 Three items: petroleum products, non-containerized bananas and container/Ro-Ro traffic (which includes some bananas) together make up about 902 of all traffic. Imports and exports are about equal in tonnage terms although 66? of imports is represented by petroleum products.
1.16 Container movements through Limon/Moin more than doubled between 1982 and 1988 when there was a total of 60,683 movements equivalent to 105,966 t.e.u's (twenty foot equivalent units). About 45Z of the containerized export traffic is made up of containerized bananas which are loaded at Moin using ships gear.
1.17 Cruise ships represent a new and potentially important traffic with a weekly visit expected for this year at Limon/Moin, with a call every four days at Caldera/Puntarenas. The growth of this business which is concentrated, though not exclusively, on Miami, has been rapid in recent years and as part of their competitive package, cruise operators are quick to add attractive new calls to their itineraries. It offers the possibility of developing new sources of employment for Limon and Puntarenas.
Installations and Equipment
1.18 There is a total of 6/8 berths at Limon/Moin and 5 at Caldera/Puntarenas, including the two berths at Puntarenas which are no longer in operation. Caldera has three berths with a total length of 490 m and a Ro-Ro ramp- Punta:-enashas two berths temporarily out of service for rehabilitation. At Limon there is a two berth container/Ro-Ro terminal brought into use in 1982 and one berth on the Muelle 70, currently being rehabilitated. A further 1/2 berths will be availEble on the Muelle 70 when a sunken ship is removed. There is in additibn a former Ro/Ro berth and the remains of the Muelle Metalico, which was constructed before 1904. Moin includes two banana berths and one petroleum berth combined with a Ro- Ro ramp. This berth serves also the bulk installation of Fertica. All four ports have rail access. Major equipment items include four banana loaders, a bulk unloader and oil reception facilities at Moin with a container crane plus four straddle carriers at Limon. Caldera has two heavy duty front loaders for loaded containers. There are two tugboats at Limon and one at Moin, which is provided by RECOPE. Caldera has two tugs.
Cargo Handling Operations and Costs
1.19 At Limon and Moin, there are three lndependent stevedoring companies, licensed by JAPDEVA. These companies provide labor for work on the ships. They own no Pquipmert and hire fork-lift trucks etc. (with drivers) as necessary from JAPDEVA. Manning levels are those appropriate - 58 - ANNEX 4 Page 5 of 7 for pre-unitized cargo operations and there are a number of restrictive practices such as the requirement to allocate a minimum of two gangs to any ship, including full container ships. The overmanning that results from this is most serious on the container terminal and would have applied also to the bulk fertilizer installation but for a recent decision not to use dock workers for this operation.
1.20 INCOP provides all labor and equipment at Caldera/Puntarenas. The ship workers enjoy similar agree-ner.tsconcerning manning to those at Limon/Moin, resulting in serious overmanning on the bulk grain and fertilizer ships. INCOP has taken some steps to achieve a more appropriate manning.
1.21 Productivity in terms of tons per ship-hour on berth is given in Table 10. The Limon/Moin figures are good, with a figure for the container terminal of 11.9 moves (20.8 teu) per ship hour, i.e. the total time that the ship is on the berth. The conventional general cargo and banana loading figures are also good. The Caldera figure for containers at 7.0 moves per hour is not so good, though the figure for the general cargo (62.1 tph) is high, partly on account of the substantial proportion of iron and steel products in the total. The Puntarenas wheat figure at 43.9 tph is very low, equivalent to about 1,000 tons per day, on account of the bad state of the pier, which limits use of the rail line next to the ship.
1.22 The comparative cost of using Costa Rican ports is important for two reasons: first is the impact of port costs on the final cost of exports and imports, affecting the competitivity of Costa Rican products and the national cost of living. Second, the cost of using the port is one factor in the decision of a shipping company seeking a base port, for regional distribution. In both cases the impact of port productivity on ship time costs is likely to be as important as direct out-of-pocket costs. The WITASS Conference is currently applying a US$7 per ton port cost surcharge to cargo handled at Limon, justifying this by the claimed relatively high cost of the port. Reliable comparative data are not easy to assemble: what we have ate indices of port costs and productivity from WITASS and the results of a recent MOPT study. These figures (table 12) appear to indicate that charges to the ship (port tariff plus stevedoring) are indeed relative! high in Limon but that so is productivity (primarily referring to conitainer ships). Shipping conferences are open to negotiation and pressure on surcharges and this should be an importaniL element of the work of the DGTM. The Louisiana report makes a detailed analysis, using a macro-econometric model, of the impact of port costs on delivered cost and the effect of changes in port costs (and productivity). In general terms, it concludes that while port costs are not a substantial proportion of the delivered price, nevertheless reductions in port costs may have a significant effect on the total traffic volume. The report also suggests that the application of standard costs would tend to increase container handling charges, since the port authority is not recovering full costs at present. This underlines the need to achieve a rationalization and reduction of stevedoring charges on the container terminal. - 59 - ANNEX 4 Page 6 of 7
1.23 The most serious and intractable problems in the cargo handling area are the organizational arrangements and manning levels for the handling of containers and bulks, both on ship and on shore. Fair solutions to the labor redundancy prWlems, particularly irkJAPDEVA need to be found, possibly the diversion of personnel to the development aspects while retaining some of their previously acquired rights. Free-zone style business is possibly related to agro-industrial investments need to be sought. The management of the container terminal at Limon needs to be unified, including the work on board the ships.
Maintenance and Development
1.24 Maintenance effort at Limon has concentrated on the rehabilitation of the general cargo Muelle 70 under USAID financing at a cost of approximately US$1.2 million. This work involved the repair of the structure and of the rail-mounted crane that services both sides of the jetty. At Moin, the approach channel to the berths has been subject to sedimentation and will require maintenance dredging within the next two years. JAPDEVA has plans to purchase a dredger for this work.
1.25 JAPDEVA's expansion plans at Limon/Moin include the provision of a third banana berth at Moin, partly in the context of the creation of an industrial zone there, the purchase of a tug, the construction of a slipway at Limon for tug maintenance, the paving of the Muelle Metalico and various equipnient items including a dredger and the replacement of the present fileet of straddle carries. The longer term picture should be clearer when the updated Master Plan is available later this year.
1.26 Maintenance efforts at Caldera have concentrated on the dredging of the berths to their original depth. This work was finished with a contract funded jointly by USAID, the Dutch government and RECOPE at a cost of approximately US$350 thousand. Littoral drift past the existing breakwater has been a continuing problem at Caldera and in a partly successful attempt to alleviate the problem, the MOPT has been extending the existing breakwater. This work has suffered some wave damage, possibly on account of insufficiently heavy armouring and the recent JICA study (2)recommends a 200 m extension to the breakwater at a cost of US$8 million. The proposal needs to be evaluated carefully against the alternatives of regular dredging, use of a sand pump. and/or a continuation of the present work of extension, possibly with improved armouring. The DGOP has prepared a plan for the rehabilitation of the jetty at Puntarenas, at an estimated cost of about US$2.0 million.
1.27 INCOP's expansion plans at Caldera include both berth extension and the construction of grain silos and related works, at an estimated cost of US$30 million. This grain was previously handled by direct discharge to rail wagons at Puntarenas, which incurs substantial ship demurrage. There is are a number of options and the proposal requires a thorough evaluation of alternatives, including the use of Moin.
1.28 Reception facilities for cruise ships are inadequate. These vessels at present berth chiefly at M-ini (on the tanker berth) and at Caldera, in neither case exploiting the potential of these ships for the - 60 - ANNEX 4 Page 7 of 7 traditionalport towns of Limon and Puntarenas. Occasionallythey berth at the container terminal in Limon, though this is clearly undesirableas a longer term solution. The revision of the Master Plan for Limon should consider how best to accommodatethese ships, possibly at a strengthened Muelle 70, whilst the study of the rehabilitationof the Puntarenasjetty should be based on their use of this facility.
Training
1.29 Following the modernizationof the port installationsin the 1970's, the CPN (ConsejoPortuario Nacional) invited the ILO (International Labor Organization)to analyze trainingneeds for port operations. As a result of this work the Centro Nacional de Formaciony Capacitaci6n Portuaria (CENFCCAP)was establishedin 1982, with experts assigned by UNDP/ILO in 1982/83. The Centre is now able to offer courses in five main areas: cargo handling, equipment operation, safety, security and equipment maintenance. Further training has been provided by German-financed technical assistance, through CENFOCAP.
Financial Performance
1.30 Details of the financial performance of the port authorities have been entered in the project file. Both ports have reasonable financial positions, with a 1988 working ratio of 86 and an operating ratio or 94 for INCOP. In the case of JAPDEVA, the 1988 working ratio is 86. As depreciation is only on the historic value of the port equipment, it is relatively insignificant and the working ratio is also the operating ratio. COSTA RICA
TRANS?ORTSECTOR PROJECT
Action Plan for the Rationalization of Port Srvices
Objectiv Instruments Action R.sponsibilities Ti-ing
1. Operational
(a) Operational Roviow operational Proent MOPT/JAPOEVA/ July 1992 Identification Efficiency organization,working diagnosis INCOP/Consultants of critical mathoda, laborpracticee and isues. and institutionalarrange- recommendations manta (public and private) in Lim6n and Puntarenos.
Implement LVPT/JAPDEVA/ starting Operotionl recommendationo INCOP December improvements 1992
2. Financial
(a) Improve tariff Develop a cost information Implement a INCOP/JAPDEVA June Eatabligh on *y-tem_y-tem managoment Coneult nts 1992 efficient informntion costing system system
(b) Ensuro the Carry out the necesoary Cnerate and INCOP Annually Adequot capacity of dredging to ensure allocate to birth Puerto Caldera availability of the dredging the capecity birthe necesoaryfunde
8. Institutional
(a) Improve MOPT's Review *xioting MOPT Define the MOPT/Consultants Deember Improve sector regulatory organizationin optimal organiza- 1091 efficiency functions the port subeector tion for the sub- sector
(b) Improv- customs Review existing Implement a LOPT/MH/ June 1992 mprov too operations proceduresand identify comunication Consultants transportof critical areas network between odos entry points and othor custom areas
.~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~U - 62 -
ANNEX 6
COSTA RICA
TRANSPORT SECTOR PROJECT
PERFORMANCE TARGETS OF' THE PROJECT
FEDERAL ROADS 1990 1991 1/ 1992 1993 1994 1996 1996
Road Rehabilitation (kms)l/ - 30 196 100 100 100 39 PeriodicMaintenance (kms)1/ - 67 190 200 200 216 20 Routine Maintenance - 12.8 12.8 12.8 12.8 12.8 12.8 (1989 USS millions)
CANTONALROACS
RehabilitationA Improv ents (kmn*)88 126 6e 140 140 1C4 na. PeriodicMaintenance (km) 100 106 200 333 347 380 na. Routine Maintenance(kmi) 1360 1850 2150 2350 3000 3000 3000
RAILWAYS
Staffing 2038 1688 1338 1288 na. na. n.a. Freight Traffic (tons 1O8 ) 1.06 1.12 1.24 1.36 na. na. na. Government Transfer* (1989 C millions) 326.0 274.6 231.2 130.9 0 0 0
PORTS
INCOP's OperatingRatio na. 96 93 93 93 93 93 INCOP'sWorking Ratio n.s. 88 85 85 85 86 86 INCOP's Grain Handling (t.p.d.) 1600 1696 1896 2000 2000 2000 2000 - 63 -
ANNEX 7
COSTA RICA
TRANSPORT SECTOR PROJECT
MOPT's 1991-95 Investment and Maintenance Program (IMP) and the Bank Proiect
(US$ million, including contingencies)
Component Total IMP ------Bank Project ------
Total Local Foreign Loan Amount
Road*
Now Construction 116.8 - - - - Rehabilitation/improvements 213.0 40.72 11.61 29.11 24.33 Maintenance: Periodic 69.1 29.60 8.40 21.20 17.86 Routine 77.0 - - - - Equipment 11.9 9.14 - 9.14 9.14
Ports 60.4 8.40 3.46 4.94 4.94
Civil Aviation 26.6 - - - -
Engineering and Supervision - 5.38 3.e3 1.75 1.76
TochnicalAssistance - 3.60 1.32 2.28 2.28
Total 663.8 96.84 28.42 68.42 60.9a
Estimated Financing Plan
Government of Costa Rica 289.7 IDB 71.1 Federal Republic of Germany 4.6 IBRD 60.0 B.C.I.E. 40.3 Japan 34.0 KFW 33.0 Not defined 21.1 - 64 - ANNEX 8 Page 1 of 3
COSTA RICA
TRANSPORT SECTOR PROJECT
ROAD TRANSPORT
Road Rehabilitation and Periodic Maintenance Program
General
1. The civil works component of the Project consists of: (i) a road rehabilitation program of about 458 km of the National paved road network; and (ii) the periodic maintenance of about 878 km of the National paved road network. The periodic maintenance program will be fully carried out by MOPT which will be assisted by the technical assistant in charge of the pavement management system. All civil works financed by the Bank would be executed by contract.
Road Rehabilitation Program
2. Based upon a detailed road inventory of the existing national paved road network and on the use of HDM-3 (Highway Design and Maintenance Model, version no. 3), a set of about 39 road links totalling 458 km has been selected for rehabilitation. These 458 km represent about 14Z of the national paved road network and they support about 20Z of the traffic. Because of lack of adequate and timely periodic maintenance, these roads are entering into the dangerous area of accelerated deteriorations.
3. The first-year program totals 10 road links and 229.7 km (see Table 1 and Map IBRD 21070). Engineering studies have been carried out by MOPT and found satisfactory by the Bank. The technical data of the first-year program are detailed in Table 1. Two sets of ICB would be launched. Bid A for the San Jose-Limon road would be followed about three months later by Bid B for San Jose-Liberia road to avoid overloading MOPT's capacity, and also possible bottleneck in asphalt supply. Bid A would include links 1 + 2 (60 km, US$3.32 m) and links 3 + 5 + 6 (72.9 km, US$4.22 m). Depending upon the combination of cost proposal, one or two contracts would be awarded. Bid B would include links 4 + 7 (16.5 km; US$1.29 m) and links 8 + 9 + 10 (80.3 km; US$7.50 m). One or two contracts would also be awarded for Bid B.
4. The size of the contracts that may reach US$7.5 m for Bid A and US$8.8 m for Bid B should prove attractive to foreign firms. The size and timing of the bidding would be agreed upon during negotiations.
5. The second part of the rehabilitation program of the national paved road network would include about 228 km of road links listed in Table 2. Thus, a tentative second-year program screened, using the HDM 3 consists of 65 km that would receiv 10 cm concrete rsphalt; 146 km that - 65 - ANNEX 8 Page 2 of 3 would be reinforced with an additional base course and about 17 km for which the type of work is not yet identified. The program would be revised and updated with the help of the technical assistance in charge of the pavement management system in the second year of the project. The second-year program will be discussed with the Bank; then the technical studies would be carried out by a consulting firm that would also assist MOPT with the supervision. The technical studies, bidding lots, bidding documentation for studies and for works would be agreed upon by the Bank.
6. The cost estimate of the rehabilitation progr.am is based upon unit costs of recent bidding, net of taxes. The breakdown into local component (28Z) and foreign component (722) is consistent with this type of works that include a large fraction of imported asphalt binder and fuel for heating hot-mix and transportation of chips and concrece asphalt over long distances.
Summary of the Rehabilitation Program
km US$m
First-year Program 229.7 16.34 Second-Year Program 228.1 16.22
Total 457.8 32.66
7. Consulting services would be hired to assist MOPT in the supervision of the rehabilitation program. The supervision team for the first-year program (54 man-months) would include R Senior Highway Engineer (head of mission) for a 22-months period, a geotechnical engineer for a four-months period, a field supervision highway engineer for Group A contracts for a 13-months period and another engineer for Group B contracts for a 15-months period.
Periodic Maintenance Program
8. MOPT's maintenance management system is not accurate erough to determine an adequate periodic maintenance policy and to select and rank by priority order specific road links. However, it is possible through the analysis of the road inventory to determine the order of magnitude of reasonable needs. This order of magnitude is based upon an average periodicity of about eight years for resealing or resurfacing of the existing fraction of the network in good or fair condition. Under these assumptions a five-year periodic maintenance program of the national paved road network would be cf about 878 km corresponding to annual targets of 175 km. - 66 - ANNEX 8 Page 3 of 3
9. Simulation exercises on HDM have permitted MOPT to screen for periodic maintenance on about 513 km of the paved national road network (Table 3). Therefore, about 365 km additional road link would be identified during the implementation period. The unit in charge of the pavement management system would (i) develop methodologies and procedures to quantify the condition of the network in objective terms considering the age of the roads, the date of the last resealing. the percentages of surface degradations and the roughness index; (ii) determine a set of typical works such as single surface treatment, double surface traatment, slurry seal or resealing; (iii) rank by economic priority order the road links; and (iv) determine bidding lots based upon geographic and technical considerations. The annual programs, the distribution and size of bidding lots and the corresponding plan of actions ould be approved by the Bank.
10. The simplified final design and supervision of works that are rather simple would be carried out by MOPT with the help of the Technical Assistance. The works would be implemented by contractors following ICB. The annual program would represent an average of about US$6.4 million (including contingencies) that may be divided into four bidding lots of about US$1.6 million each.
11. The typical costs per kilometer of surface treatment and of resealing with 5 cm concrete asphalt are based upon recent contracts and represent a national cost average. The total cost for a five-year program is US$29.60 m of which US$21.20 represent the foreign component to carry out about 8/8 km of periodic maintenance divided into about 293 km of surface treatment and 585 km of resealing. gISTA RICA
TRISECTORt PROJCT
Ng) TRAWPORT
F_-st-Ye- RhgiIliJt*ti Pjroare.
Technical nd Finpncial Data
1. Technical Onto
Road Code Longth 11 C.chk (1Q87) 2t!ctiwt tins Psnt (-c T,affic 1986 *illion Strenathuinn (co)
Lin Dt.Krirtion Numbe (he) II*i Tx RA Q4- PIM 1b8bei ADT T Truck 8L2t iis s SA uA
1 8.rbiIIl-Lison 70070/80 41.4 21 35 7 7 22 30 1,030 38 4.97 7 2 Siquirres-B.rbill 70090 18.6 21 37 7 7 22 30 2,700 51 9.31 8.5
3 Enls8bof-Siquirres 30002 39.9 21 56 11 4 5 16 4A i,566 38 4.08 7.5 -6 6 Parsiso-Cor-ant.s 30020 15.0 36 17 102 54 6 18 23 2.395 33 5.41 7.5 15 I
6 Cersuntem-Turrialbs 30010 16.0 i5 95 31 6 23 14 2,585 32 4. 72 10.0 4 R. Cr-cia-R. Naranjo 20080 8.2 70 23 52 18 7 20 33 5,510 28 8.36 6.5
7 R. Nra.njo-P.tI.er.a 20040 8.3 77 11 73 15 7 20 33 3,760 25 5.10 7.0
8 Ari,nna-L o-a 50000 8.0 95 95 NA NA NL NA MA 2,227 30 4.5Ui 7.5 15 9 Li.ne-Dhoecea 50010/20 48.0 90 86 NA NA NA NA NA 1,672 29 3.31 7.6 15 10 8age.,-Liberim 50030 24J 90 35 NA NA NA NA NA 2,248 Il 2.78 7.5 15 229.7
T/rafie gr.oth - 4%; Life - 10 yea-r
00 - 68 - ANNEX 8 Table 2
COSTA RICA
TRANSPORT SECTOR PROJECT
ROAD COMPONENT
Tentative List of Road Links to be Rehabilitated (First-Year Program Excluded)
Group A - Pavement Strengthening with 10 cm Concrete Asphalt
Length Description Link Road (km) ADT
S. Jose-S. Pedro 19,004 2 2.60 26,010 S. Antonio-Road 122 40,130 111 2.90 4,330 El Cruce-Aserri 10,212 209 4.10 2,825 S. Francisco-Heredia 40,120 111 4.60 1,720 Zarcero-Zapote 20,610 141 9.40 1,628 Zapote-C. Quesada 20,620 141 18.00 1,528 El Cacao-S. Pedro 20,380 107 8.70 715 S. Pedro-Fraijames 20,541 146 12.10 568 Fraijame-Poasito 20,542 146 2.70 558 65.10
Group B - Pavement Strengthening Including a New Base Course
Length Descriptior. Link Road (km) ADT Saulo Domingo-La Puebla 40,060 5 3.3 5,995 S. Rafael-S. Ana 20,290 122 3.3 3,320 Cartago-San Blas 30,260 233 2.4 2,970 La Argentina-Grecia 20,422 154 7.2 1,820 S. Josa-Turrialba 30,213 230 2.9 1,480 Alaguela-Itiquis 20,351 130 3.6 1,375 Itiquis-S. Isidro 20,352 130 5.2 1,375 Ruta 135-Alto del Monte 20 100 3 8.7 985 La Guacima-San Rafael 20,264 124 3.8 900 S. Clara-Javillos 20,682 141 4.3 653 Desmonte-San Mateo 20,112 3 7.4 640 El Empalme-S. Maria 10,130 226 13.7 583 S. Maria-S. Marco 10,140 226 6.2 583 Alajuela-Carrizal 20,320 125 11.3 305 Jaco-Quebrada Palma 60,140 34 37.6 300 Rio La Muerta-Monterrey 21,352 4 12.2 292 Rosario-S. Elena 10,192 222 6.9 210 Vara Blanca-Poasito 20,550 120 5.9 170 145.9
Group C - Rehabilitation (Other Road Links) Length Description Link Road (km) ADT S. Rafael-Escazu Sabana 19,010 27 4.4 17,226 Nicoya-La Mansion 50,130 21 12.7 700 17.1 -69 - ANNEX 8 Table 3 Page 1 of 2
COSTA RICA
TRANSPORT SECTOR PROJECT
ROAD COMPONENT
Tentative List of Road Links for Periodic Maintenance
Group A - Surface Treatment
Length Description Link Road (km) ADT
S. Jose-Plaza Gonzales 19,051-19,052 209 4.6 19,000 General-Ent. Ruta 2 10,930 243 5.3 330 S. Isidoro-Trinidad 10,390 102 2.9 3,430 Trinidad-Moravia 19,022 102 1.8 6,501 Colon-Brasil 10,870 22 4.2 N/A S. Miguel-Rio El Angel 20,590 126 9.8 350 Corbici-Upala 21,221-50,900 6 50.5 179 S. Pedro-Grecia 20,400 107 3.4 1,250 S. Gabriel-Rosario 10,193 222 4.5 200 Vara Blanra-Carrizal 40,100 126 4.3 250 Cartagos-Carrizal 20,340 126 9.9 200 Tilaran-Najanros 50,191 142 4.2 785 Najanros-Ajuos 50,942 142 14.2 170 Rio Virilla-Rio Segundo 40,040 1 6.4 14,470 Quesada-Florencia 20,630 141 9.7 2,820 Ilano Grande-Guardia 50,082 21 6.1 1,500 Rio Segundo-Ruta III 20,131 3 2.6 6,470 Aguas Zarcas-Los Chiles 20,870 250 3.5 1,200 Chinchilla-COT 30,242 219 4.2 2,350 Florencia-Quebrada Azul 20,640 35 4.8 1,170 Muelle-Terron 21,060 35 11.5 1,012 Interanencana 20,080 3 3.0 2,810
Total: 173.0 - 70 - ANNEX 8 Table 3 Page 2 of 2
COSTA RICA
TRANSPORT SECTOR PROJECT
ROAD COMPONENT
Tentative List of Road Links for Periodic Maintenance
Group B - Resealing (5 cm Concrete Asphalt)
Length Description Link Road (km) ADT
S. Jose-Tibas 19,008 5 3.10 13,080 Liberia-Rio Tempisquito 50,040 1 24.7 1,150 R. Tempisquito-La Cruz 50,050 1 33.5 1,150 S. Pedro-Fuentes 19,005 2 1.2 20,302 Fuentes-La Galera 19,006 2 2.5 20,302 Tres Rio-Quirazu 30,111 2 3.1 12,138 Quirazu-Taras 30,112 2 2.6 12,138 Aeropuerto-Alaguela 20,250 153 2.2 10,040 S. Ana-S. Antonio 40,370 122 1.5 3,320 Rio Virilla-S. Antonio 21,330 147 1.5 2,171 Pozos-R. Virilla 10,450 147 2.5 2,171 S Geraldo-Punta Mvrales 60,730 132 12.4 200 S. Miguel-La Virgen 40,481 126 11.9 585 Radia Grecia-La Argentina 20,421 154 2.1 1,825 Ruta 136-Ruta 135 20,090 3 11.0 1,885 Tibas-Rio Virilla 19,009 5 1.7 8,065 R. Virilla-S. Domingo 40,050 5 1.6 8,065 Alto Monte-Desmonte 20,111 3 4.8 640 Pueblo Viego-S. Rita 50,160 21 15.0 435 Barva-Puente Salas 40,080 126 2.7 770 Puente Salas-Carrizal 40,090 126 9.1 770 Heredia-Barba 40,070 126 2.9 4,405 Rio Banano-Penshurt 70,040 36 23.5 305 Hone Creek-Bribri 70,010 36 9.4 250 Limon-Rio Banano 70,050 36 10.6 610 Rio Claro-Golfito 60,250 14 23.1 695 Limonal-R. Tempisque 50,850 18 25.4 655 Cana-Los Aguilares 50,151 142 15.5 641 Los Aguilares-Tilaran 50,152 142 6.7 641 S. Cruz-Nicoya 50,120 21 21.6 1,205 Frailes-La Siera 10,180 222 10.3 263 R.S. Elena-Frailes 10,191 222 5.9 263 R. Jesus Maria-Esparza 60,560 131 8.3 385 Bario S. Jose-Tacares 20,150 118 8.1 1,600 Moravia-S. Juan de Tibas 19,019 102 1.7 El Limite-Los Colegios 19,020 102 0.9 Los Colegios-Moravia 19,021 102 0.9 E.L. Roble-Puntarenas 60,620 17 12.3 S. Jose-Sabana 19,001 1 2.2 Total: 340.0 - 71 - ANNEX 9
COSTA RICA
TRANSPORT SECTOR SECTOR PROJECT
PROJECT COST ESTIMATE
Coot Estimate CUSS illionl (Colonelmillion) Total Local Forsion Total Local Foreign A. CIVIL WORKS: (i) ROADS: 1. R-habilitation of trunk road* 32.64 9.14 23.62 2717.31 766.86 1964.46 2. Poriodic maintenance 23.84 6.66 17.14 1984.16 664.44 1426.72 Sub-Total 6e.46 16.81 40.06 4697.47 1316.29 3382.18
(ii) PORTS: 1. Rehabilitationof Puntarenas jetty e.se 2.86 3.98 640.80 216.32 324.48 Sub-total 6.6e 2.6e 3.96 640.80 216.32 324.48
S. ENGINEERING,SUPERVISION A ADMINISTRATION: 1. Engineering 1.10 0.80 0.30 91.62 66.81 24.71 2. Sup rvision 2.70 1.38 1.32 224.84 114.57 110.07 3. Administration 6.PO 6.98 6.68 74.88 74.88 V.6 Sub-total 4.76 3.68 1.62 391.04 256.26 134.78
C. EQUIPMENT: 1. Road maintenance 5.66 0.10 4.90 416.00 8.32 467.68 2. Grain handling e.ee 0.061 e.9 49.92 1.66 48.92 3. In-transit cargo control e.66 6601 0.64 46.70 6.92 44.84 4. Laboratories and miscelloneous 1.47 6.63 1.44 122.30 2.46 119.86 Sub-total 7.62 0.16 7.47 633.98 12.68 621.30
0. INSTITUTIONALIMPROVEMENTS. POLICY IMPLEMENTATION AND TRAINING: 1. Technical assistance to DGP 0.75 6.5s 6.26 62.46 45.66 16.85 2. Technical assistance to INCOFER 6.45 0.09 0.34 37.44 7.49 29.96 3. Technical assistance to JARDEVA A INCOP 6.66 0.12 0.46 49.92 9.98 39.94 4. Technical assistance to SDM 0.60 6.68 6.43 41.60 6.24 36.36 6. Technical assistance to GDMT 6.20 0.04 0.16 16.64 3.33 13.31 6. Study of Puerto Caldera 6.60 0.10 6.40 41.86 8.32 33.28 7. Training 0.16 6.66 6.15 12.48 6. W 12.48 Sub-total 3.15 6.97 2.18 262.08 86.91 181.17
E. BASECOSTS 78.43 22.61 55.82 6525.38 1881.46 4643.92
F. CONTINGENCIES: 1. Physical 7.61 1.98 5.e2 S82.b7 184.61 417.96 2. Price 11.41 3.83 7.58 949.31 318.49 630.82 Sub-total 18.41 6.81 12.61 1631.88 483.11 1048.77
G. TOTAL 96.e4 28.42 68.42 8067.26 2364.67 6e92.69
az=s= =s======Z ==s======- 72 -
ANNEX 10
COSTA RICA
TRANSPORT SECTOR PROJECT
Selected Documents and Data Available in the Project File
1. Transport Sector Investment Program 1991-1995.
2. Action Plan for the Maintenance of Cantonal Roads 1990-1995.
3. Typical Costs of Periodic Road Maintenance.
4. Study for the Rationalization of Railway Services in Costa Rica - 1988.
5. Contract-Program for the Rationalization of Railway Services.
6. INCOP's Financial Performance and Financial Projections.
7. JAPDEVA's Financial Performance and Financial Projection.
8. Installation for Cruise Liners on the Pacific Coast.
9. Estimation of Capacity of Puerto Caldera.
10. Grain handling in Puerto Caldera.
11. Outline Terms of Reference for Technical Assistance to Develop a Transport Plan.
12. Outline Terms of Reference for Technical Assistance - Pavement Management.
13. Outline Terms of Reference for Technical Assistance on Port Management Accounting.
14. Outline Terms of Reference for Technical Assistance on Port Pricing and Costs.
15. List of Equipment to be Purchased under the Project. COSTA RICA TRANSPORT SECTOR PROJECT Organization Chart MINISTRYOF PUBLIC WORKSAND TRANSPORT
Mvinster
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Public Works Division
Consuotant Supenrvision Development Department Subdivrision S
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Legal PlanningandI
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.____84't...... fi2° SEPTEMBER 19;8
SEPTEmBSER1988