World Bank Document

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

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