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RERTURN TO REPORTrS DESK RESTRICTED WITHIN COPYUJE ONE- WEEK KWH1 52 2NE WEEK Vol. 3 Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized AN APPRAISAL OF THE DEVELOPMENT PROGRAM OF VENEZUELA VOLUME III Public Disclosure Authorized ANNEX IV: TRANSPORTATION ANNEX V: HOUSING ANNEX VI: PUBLIC HEALTH August 17, 1965 Public Disclosure Authorized Western Hemisphere Department CURRENCY EQUIVALENTS Selling Rate U.S. $1.00 = Bs. 4.50 (Bolivares) Bs. 1.00 = U.S. $0. 22 Bs. 1, 000, 000 = U. S. $222, 222 Petroleum Exports U.S. $1.00 = Bs. 4.40 Other Exports U.S. $1.00 = Bs. 4.48 AN APPRAISAL OF THE DEVELOMFENT PROGRAM OF VENEZUELA ANNEX IV: TRANSPORTATION TABLE OF CONTENTS Page No. SIJDTI7ARY AND CONCLUSIONSN....... .. ............... ii A. GENERAL,.*..**e* .*.....* * **....*** .*...1 B. PIGM-AYS ....................... o..@@@*..... 8 C. THE CARACAS TRANSPORTATION PROBLE4.............. 31 D. PORTS AMiD SHIPPING ......... .... ... * ...... .... 35 E. AIR TRANSPORT . .................... ............... 44 F. RAI'LWAYS...... ....... ...... ....... so .... ...... 50 APPENDIX USER CHARGES A. ASG±I-ENT OF USERS' RESPONSIBIITTIES B. PRESENT USER CHARGES C. POSSIBLE INCREASES IN USER CHARGES SUMMRY AND CONCLUSIONS 1. Hgighways provide the backbone of Vlenezuela's transportation system, with other transport media playing a subsidiary role. Consequently, the in- vestment progrcm is mainly a highw¢ay investment program. 2. The objectives of the transport program are: (a) Completion of the national trunk road system and its improvc- ments iwhen warranted by the growth of traffic. (b) Improvement in the transport efficiency of urban areas and regions of high population density (urban roads, expressways). (c) Improvements of other transport facilities to accommodate growJth of traffic. (d) Promotion of developmer.t of other sectors, especially agriculture. 3. The major part of the proposed transport investment program is directed towards improvements and some expansion of the national highlway system, development of secondary and rural roads and urban road developmient designed to alleviate traffic congestion, especially in the metropolitan area. During the program period, the development of an urban mass trans- portation system in Caracas will also be studied. The bulk of the program will be pLanned and executed by the I1inistry of Public lorks. 4. The present organization of transportation planxning requires con- siderable strengthening to deal iath the growing complexity of Venezuela's transport problems. Specifically, a central planning office dealing with transport problems should beestablished tithin the i4inistry of Public W;orks, the coordination between transport planning and regional development planning should be strengthened, and a suitable organization should be established for the planning, construction and maintenance of rural feeder roads. 5. The investments in the transportation sector planned for the period 1965-1968 amount to Bs. 3,163 million, Bs. 662 million in 1965, Bs. 943 million in 1966, Bs. 863 million in 1967 and Bs. 695 million in 1968. The maission recommends the followi-ng changes in this program: (a) The phasing of the investments should be changed both on general econonic grounds and to even out the undesirable peaks. The adjusted program would reduce the 1966 investment program by Bs. 200 million, which would still leave the investment volume larger than 1965; the 1967 program would be left at the planned level, and the 1968 program would be increased by Bs. 255 million. - ii - (b) The planning and execution of rural feeder roads should be con- solidated within the l$inistry of Public Works and be increased by Bs. 17 zillion in 1967 and Bs. 47 million in 1968. The over- all size of this program would then be Bs. 20 million in 1965, Bs. 33 million in 1966, Bs. 50 million in 1967 and Bs. 80 million in 1968. 6. The analysis of users' contributions to the cost of transport facili- ties indicates the need for a drastic upward revision of road user charges. A. GENERAL 1. Recent Developments in the Sector General Considerations 1. In Venezuela highways provide the basis of the countrY's trans- portation system, with other transport media playing a subsidiary role. Con- sequently, the investment program in the transport sector is main.y a highaway investment program. The high priority given to highways appears reasonable because of the relatively short or medium hauls in the more developed part of the country and the small demand for medium and long distance carriage or large volume bulk products.. 2. The past efforts of Venezuelan governments have been concentrated on the development of a network of main highways (ritroncales"). In order to relieve traffic congestion on sections of the network, a number of express- ways (urban and interurban) have also been constructed or started. WJith the virtual completion of the main road netiwork, the Venezuelan transportation system has achieved a high level of development. 3. The country has on the wThole satisfactory port facilities and air services are adequate. The existing railway lines have not been developed into a national system and, except for the Barquisimeto-Puerto Cabello line, are rather antiquated. Lake Maracaibo and the lower reaches of Orinoco are the important inland waterwayn serving Venezuelan overseas trade. There is also a certain volume of coastal shipping and river navigation serving re- gional or inter-regional trade. Institutional Arrangements and Policies 4. The Ministry of Public Works, which is responsible for road con- struction and maintenance, has played the principal role in the transport field. Some specialized functions have been allocated to otlher ministries. No agency coordinates or reviews transportation policies or operations of the several ministries and agencies in the transportation field. MOP has developed an efficient organization capable of performing its allotted role. However, in viewr of the virtual completion of the main trunk road system and the growing complexities of transport problems, it is reasonable to question whether the present organizational framework will prove adequate to meet new demands, particularly in the planning field. Past Investment Programs 5. Approximately 90 to 95 per cent of capital expenditures in the transportation sector have been made through the budget of the Ministry of Public Works. The capital expenditures of this Ministry provide a good indi- cation of the size and structure of past investment programs. - 2 - Capital Expenditures in Transport Sector Ninistry of Public Wlorks (In r-.llions of Bolivares) Urban Roads and Ports and Year Roads Streets Expressways Airports Total 1959 348.8 22. 45.5 39.4 456.0 1960 256.0 43.9 29.1 61.9 390.9 1961 25;0.6 20.5 33.8 35.8 340.7 c1962 201.5 13.2 62.6 19.9 297.2 15963 2].9.2 43.7 136.3 16.6 415.8 1964 22'8.8 61.6 187.3 10.8 488.5 Source: kinistry of Public Works Capital expeaiditures in the transportation sector cumount to approximnately 7 per cent of tctal ozpenditurGs of the Federal Governmea:t. 6. The decline of investments during the 1961-1963 period was due to econonmic recession. Capital expenditures during this period were, therefore, lower than the expenditures recommended by the IBRD aconomic survey mrission of 1959. However, all projects identified by that mission as high priority works either have been completed or are under construction. 7. As the result of a policy decision not to develop a national railway system, only minor investments have been made in the railway sector. This policy has been consistent with IBRD mission's recommendations. 2. The Proposed Program (1965-1968) Ob ectives of the Program 8. The objectives of the transport program are: (a) Completion of the national trunk road system and its improve- ments when warranted by the growth of traffic. (b) Improvement in the transport efficiency of urban areas and regions of high population density (urban roads, expressway4. (c) Improvements of other transport facilities to accommodate growth of traffic. (d) Promotion of development of other sectors (especially agriculture). - 3 - 9. The major part of the proposed transport investment is directed towards improvements and some expansion of the national highwxay system, the development of secondary and rural roads, and the alleviation of urban traffic congestion. Proposed Investments 10. The investment program in the transportation sector is sum- marized in the table below. More than 90 per cent of the program will be executed by the Ministry of Public IlJorks. Investment Program 1965-1968 Transportation Sector (In ni'lu-ions of BoJ.varve) Agency/Subsector 1965 1966 1967 1968 Total MLinistry of Public Worlcs 589 883 801 632 2905 Roads 5 831 2687 Ports 11 24 29 22 86 Airports 14 28 38 52 132 Ministry of Corimunications (a) 9 19 29 21 68 IADA 1 14 15 14 44 IAAFN 1 1 1 1 5 LAV 37 0 0 0 37 I NC 6 6 6 6 25 States and Municipalities 18 20 20 21 79 Total (b) (c) 662 943 863 695 3163 Notes: Because of rounding,totals in this table may not equal exactly the sector figures used in other parts of the report. (a) Including minor communications items. (b) In order to obtain a functional sector totals, rural feeder road expenditures of the Ministry of Agriculture (Bs. 20 million p.a.) should be added. IrLnistry of Public Works road program includes Bs. 13 million for 1966, 1967 and 1968; thus the total rural feeder road program is 1965 - Bs. 20 million; 1966 - Bs. 33 million; 1967 - Bs. 33 million; 1968 - Bs. 33 million. (c) Excludes any investment in transport facilities made by Guayana Corporation.