FIE COPY Report No. PTR-La

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 Public Disclosure Authorized They do not accept responsibility for its accuracy or completeness.The report moy not be published nor may it be quoted as representing their views.

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

APPRAISAL OF

A HIGHWAY PROJECT

CENTRAL AFRICAN REPUBLIC Public Disclosure Authorized

March 11, 1969 Public Disclosure Authorized

Transportation Projects Department Currency &quivalents:

Currency Unit = CFA Franc (CFAF) CFAF 1 - US$.004 US$1 - CFAF247 CFAF1 million =us$4,o5o

Fiscal Year:

January 1 to December 31

Weights and Measures: Metric

Metric: British/USEquivalent

1 kilometer (km) = 0.62 miles (mi) 1 meter (m) = 3.28 feet (ft) 1 hectare (ha) =2.47 acres (ac) 1 liter (1) =0.22 imp. gallons - 0.26 gallons (US) 1 metric ton (m ton)= 2,204 pounds (lbs)

Abbreviations- Acronyms

ATEC - Agence Transequatorialedes Communications CAR - Central African Republic CFCO Railway - Chemin de Fer Congo-Ocean DPW - Directorate of Public Works FAC - Fonds d'Aide et de Cooperation FED - Fonds Europeen de Developpement LUDP - United Nations Development Program CENTRALAFRICAN REPUBLIC

APPRAISAL OF A HIGUHWAYPROJIT

Table of Contents

Page

SUMMARY i

1. INTRODUCTION 1

2. BACKGROUND 2

A. General 2 B. The Transport Sector 2

3. THE HIGHdAY SECTOR 6

A. The Highway Network 6 B. Characteristies and Growth of Road Traffic 6 C. Highway Administration 6 D. Highway Planning and Finance 7 E. Highway Engineering and Construction 7 F. Maintenance 8

4. THE PROJECT 9

A. Description 9 B. Cost Estimates 10 C. Execution and Financing il

5. ECONOMIC JUSTIFICATION 13

A. Service Area of the Bangui-M'baikiRoad 13 B. Traffic 1h C. Economic Benefits 15

6. RECOMMENDATION 16

This report was prepared by Messrs. A. Bergan and R.H. Snel, Engineers, and T. Oursin, Economist. Table of Contents -2-

TABIES 1. Port of Bangui,traffic 1961-1967 2. Road User Charges and Road M5aintenance Costs 3. Highway Network: Road Class and Responsibility for Maintenance 4. Compositionof VehicleFleet 5. Importsof Gasolineand DieselFuel 6. Importsof Vehiclesand Tires 7. Bangui-M'baikiRoad: DesignStandards 8. Basic data for calculationof economiccosts and benefits

MAPS

Central African Republic Road System Central African Republic International Transport CENTRALAFRICAN REPUBLIC

APPRAISAL OF A HIGHWAYPROJECT

SUMMARY i. The Government of the Central African Republie (CAR) has requested IDA assistancein financinga highway project consistingof:

ti) the reconstruction of the Bangui-M'baikiroad (102 km); and (ii) the provision of equipment to maintain the road. ii. The total cost of the project, including contingencies,is estimated at about US$5.6 million equivalent. The foreign exchange component is estimated at about US$4.2 million equivalent and will be financed from the proposed credit which will be the first lending operation by either the Bank or the Association in the CAR. Local currency requirements will be provided by the Government. iii. Detailed engineeringof the project road was carried out by consultants SAUTI (Italy) in 1965/66 under a FED agreement but had to be supplemented by the Directorate of Public Works (DPW) in 1968. The project in- eludes financing of the foreign exchange costs of these supplementary engineeringworks and the cost of prequalificationof the total of con- tracting firms by consultants, which amounts to US$23,000. iv. Design standards are satisfactory;contracts for constructionand the procurement of highway maintenance equipmentwill be on the basis of internationalcompetitive bidding procedures. Supervisionof the project will be by the Directorateof Public Works.

V. The economic evaluationof the project is based on a report prepared by consultantsSAUTI, which were engaged at the Bank's expense at the end of 1967. Reconstructionof the project road, which is one of the most important highway links of the country, will produce savings in vehicle operating costs yielding an economic return of about 14% in directly measurablebenefits. vi. Two UNDP financed surveys are being carried out in the CAR, covering a road maintenance study for the entire road network, a feasibility study for the Sibut-Bambari road and a regional transport survey for the CAR and Cameroon. Preliminaryresults of the last study indicate that the Bangui-M'baikiroad will be the first section of a recommended link between Bangui and Douala, Cameroon'sport at the Atlantic Ocean. vii. The project provides a suitable basis for an IDA Credit of US$4.2 million to the Government of the CAR. CENTRALAFRICAN REPUBLIC

APPRAISAL OF A HIGIWAYPROJECT

1. INTRODUCTION

1.1 Early in 1966 the Government of the Central African Republie (CAR) requested IDA assistance in financingpart of its highway program. As a result of this request, the Bank engaged at its own expense in late 1967 the Italian Consulting Engineering firm SAUTI to study the economic justification of rehabilitating the Bangui-M'baiki Road. This study and subsequent discussions with the Government have led to a request to IDA to finance a project which comprises:

a. Reconstruction of the Bangui-M'baiki Road (102 km), including

(i) supplementary engineering works carried out by the Directorate of Public Works (DPW); and,

(ii) supervision of construction works by the DPW;

b. Provision of equipment to maintain the road.

1.2 The Bank is the executing agent for two UNDP studies now being carried out in the country:

(i) a regional transport survey in the southwestern part of the country and the adjacent part of Cameroon uzdertaken jointly by the consulting firms NEDECO (Netherlands)and BCEOM(France); and,

(ii) a feasibilitystudy to be followed by final engineering for the reconstruction of the Sibut-Bambari Road, combined with the preparation of a program for improving road maintenance operations for the entire road network of the CAR. The consultants are Research and Development (Belgium).

The result of the studies will assist the Government of the Central African Republic in the planning of the transport infrastructure of the southwestern region and in the preparation of the maintenance budget for the next five years (see paras. 2.9 and 3.14).

1.3 The proposed credit would be the first lending operation in the CAR by either the Bank or the Association.

1.h This report is based on engineeringand economic studies carried out by SAUTI, supplementary engineering works and cost estimates prepared by the DPW and the findings of missions which visited the country in Octo- ber 1967, and in February and October 1968. The last mission consisted of 4ossrs.Bergan and Snel (Engineers)and T. Oursin (Economist). This report was prepared by the members of this last mission. - 2 -

2. BACKGROUND

A. General

2.1 The Central African Republic, under French administrationuntil 1960, is a landlocked country in the heart of Africa (see Maps). It covers an area of about 625,000 m2, about twice the size of Italy. The country lies on the northern edge of the Congo river basin. It is bordered on the north by Chad, the east by the Sudan, the south by the two Congos and the west by Cameroon. In the southern part numerous water courses feed the Oubangui River, a tributary of the Congo. The rivers in the north flow ultimately into Lake Chad. The climate is tropical, with a rainy season from April to November.

2.2 In 1966 the population was estimated at about 1.r million, with a very low overall density of about two inhabitantsper km . The main population centers, which account for more than one-quarterof the total population, are increasing in size as migration from rural areas continues, whereas large areas in the northeast of the country are virtually uninhabited. Population growth is estimated at about 2% per annum.

2.3 Subsistence agriculture is the dominant factor in the economy of the CAR. Cotton and coffee are the main export crops but the quantities involved are relatively small. Coffee production, about 11,000 tons in 1966 and 9,000 tons in 1967, has varied over the years due principallyto weather conditions. Cotton exports reached a peak of about 16,000 tons of lint in 1958/59 but declined during the early years of independence to about 8,000 tons in 1966. In the recent past, the Government has made strenuous efforts to reverse the trend; as a result, cotton exports went up to 12,000 tons in 1967. The country is rich in timber but exploitationis handicapped by lack of transport and by long distances to the coast. Diamond mining has been contributing increasingly to the growth of the economy during the present decade; recorded diamond exports have risen from US$1.7 million equivalentin 1960 to approximately US$17 million equivalent in 1967 when they represented about 50% of all exports.

2.4 Existing national income statistics are insufficientfor a detailed analysis of recent trends and developments. The annual growth of the monetary GDP (at 1961 prices) which was about 8% from 1956 to 1961, slowed down to an average of less than 3% in the years thereafter but gained momentum in 1966 and 1967. Total GDP per capita at current market prices was estimated at about CFAF 28,000 (US$110)in 1967.

B. The Transport Sector

(a) InternationalTransport

2.5 Being a landlocked country, the CAR depends on facilities in its neighboring countries for international transport. There are at present two principal trade routes to ports on the Atlantic Ocean: - 3 -

(i) by river from Bangui to Brazzaville(1,300 km) and thence by rail to Pointe Noire (515 km); and,

(ii) by road from Bangui to Yaounde (1,100 km) and thence by rail to Douala (309 km).

(i) Bangui to Pointe Noire Route

2.6 The route via Brazzavilleto Pointe Noire carries virtually all goods to and from the country. Under an agreement initiated during the period of the French administration, the route is administered by the Agence Transequatoriale des Communications (ATEC), an institution jointly controlled by CAR, Chad, Congo (3) and Gabon. ATEC operates the ports of Pointe Noire, Brazzaville and Bangui as well as the CFCO railway from Brazzaville to Pointe Noire. It also maintains the waterways from Brazza- ville to the CAR and the highways connecting Chad and Gabon with. this network,

2.7 In 1967 the port of Bangui handled about 213,000 tons of cargo, about one-quarter of which was for Chad (Table 1). Salo, a small port on the Sangha river in the southwestern corner of the country had a turnover of about 8,000 tons in the same year.

2.8 River transport on the Oubangui is carried out by private enter- prise. Transport rates on the rail-river system vary according to commod- ity and direction of movement. Domnstream from Bangui to Pointe Noire, total transport charges range from US$28 to 56 per ton, whereas upstream the costs range from US$42 to 70 per ton.

(ii) Bangui to Douala Route

2.9 The roads to Yaounde are in bad condition so these routes are seldom used for long distance transport. Transport charges between Ban- gui and Douala are about US$70 per ton. The new Cameroon Railway, from Yaounde to Jelabo, will not significantlyreduce transport costs between Bangui and Douala and would only marginally affect traffic using the route to Pointe Noire. However, the Government hopes that, by improving overland connections to the Cameroon Railway, it will lessen its depend- ence on a single outlet to the sea as well as reduce transport costs. A UNDP survey (see para.l.2), is currently investigatingthe possibilities of coordinatingtransport developmentin the southwest of the country and the adjacent parts of Cameroon. The survey will provide preliminary engineering studies and detailed recommendations for the most suitable transport link between Bangui and Douala. Preliminary results of the study indicate that the 3angui-Nil'baiki Road would be the first section of the recommended link from Bangui to Douala.

(b) Internal Transport

2.10 The CAR's internal transport is moved almost exclusively by road. The highway network (see para.3.1) is generally adequate in length but transport conditions are difficult due to lack of highway maintenance. - 4 -

Domestic river transport on the Upper Bangui, east of Bangui, has been decreasing in recent years because of increased competition by road transport.

2.11 The country is served by a modern airport at Bangui which is used by large jet aircraft of internationalairlines; there are also twen- ty smaller fields, 10 of which are regularly served by Air Bangui, which handles the bulk of internal air traffic.

2.12 Prior to independencethe desire to maintain a transportlink between Pointe Noire and Fort Lamy in Chad dominatedtransport policy in the area. The planning of transport aimed specificallyat serving the needs of the CAR, was initiated only after independence.

2.13 The Four-Year DevelopmentPlan 1967-1970 clearly emphasizes the importanceof improving the country's highway network. There is little problem of transport coordinationas internal transport other than by road is negligible.

2.14 The trucking industry has to meet great seasonal fluctuations; cotton productionhas to be moved to Bangui within a short period and requires considerabletrucking capacity which is underemployedduring the remainder of the year. This situation causes sharp competitionwith- in the industry whiclhis characterizedby an uneven distributionof capacity bettweena few large and well-organizedcompanies and a large number of small truckers.

2.15 In order to improve the economic situation of the trucking industry, the Government is supportinga cooperative of truckers which was establishedin 1968. The cooperative provides technical assistance to small truckers and attempts to pool trucking capacity and transport demand. Ilem- bership in the cooperative is voluntary.

(d) Road User Charges and i^aintenance Costs

2.16 Apart from income taxes, turnover taxes and import duties on vehicles and spare parts, special taxes on road transport activities are collected in the form of:

(i) annual license fees and taxes on the capacity of commercial vehicles ("Patente");

(ii) taxes on gasoline and diesel fuel.

On a bituminous surface road, these taxes account for about 15% of automobile operating costs and 65,of those for trucks. 2.17 It is estimated that the revenues from these taxes generated by the traffic on the project road during the course of its economic life will amount to CFAF 450 million. These revenues would largely cover tlhe maintenance costs of the project road which are estimated at about CFAF 380 million during the same period (see Table 2 for details). - 6 -

3. THE HIGHWAY SECTOR

A. The Highway Network

3.1 The highway network (19,300 km) is classifiedinto three cate- gories: national (primary),regional (secondary),and local (tertiaryor feeder) (see Table 3). The only asphalt road in the country links Bangui and Damara (76 km). The total length of the network has not increased over the past decade, but roads have been reclassifiedaccording to economic importance and traffic densities.

B. Characteristics and Growth of Traffic

3.2 Bangui is the focus for road transport in the country. Foreign trade and transit to and from Chad are linked to its port. The capital is the center of the local industry and the largest market for staple crops.

3.3 The vehicle fleet is small and was estimated at about 8,500 vehicles in January 1967 (see Table 4) compared with about 6,000 vehicles in 1962. Two-thirds of the fleet was registeredin Bangui. The average number of motor vehicles per 1000 inhabitants in the CARis 5.7 compared with 7.2 in East Cameroon. Two large transport companies alone accounted for over 50% of the total trucking capacity.

3.h Statistics on the growth of road traffic are not available. Indirect evidence such as port traffic at Bangui or imports of transport equipment and fuel (Tables 1, 5 and 6) is difficult to evaluate but seems to indicate that growth rates have been low in recent years.

3.5 In the past, traffic counts have been carried out at a few points but no attempt was made to evaluate the results systematically. In 1967 a new series of counts was started on both the Bangui-M'baikiand the Bangui- Damara roads and the Government plans to repeat these counts at regular time intervals. Assurances were obtained during negotiations that sound procedures for traffic counts and central processing of results will be established as a basis for future road investments.

C. Highway Administration

3.6 Primary and secondary roads, which totaled about 3,h00 km in 1967, are administered and maintained by the Directorate of Public Wtlorks. More than 15,000 km of local roads, predominantly with a low traffic density, are under the administration of the Ministry of Agriculture and local authorities (see Table 3). The international link Bangui-Damara- Batangafo-Fort Archambault is maintained by ATEC (see para. 2.6).

3.7 In 1967 the UN was reorganized,and now comprises two director- ates, one for planning and constructionand one for maintenance. The directorate of planning and construction,which is administeredand staffed - 7 - by French engineers provided by FAIC, operates efficiently. The directorate of highway maintenance is staffed by local personnel with limited experience in maintenance operations.

3.8 It is the intention of the Government to replace gradually the expatriates by local technical personnel. As this personnel is lacking at present, there is a great need for training facilities. Senior personnel are trained abroad, generally in France. For the intermediate level, personnel training is available at the Public Works College in Fort Lamy in Chad and in Libreville in Gabon. A training center for foremen has recently been established in Bangui. FED and FAC are each contributing 50% of the cost of this training center. The number of CAR nationalswho graduated from these training centers has been total- ly insufficientup to now to fill the need for technicalpersonnel. It is to be expected that this situationwill slowly improve as the first graduates from the Bangui training center become available in the middle of 1969.

D.1 Highway Planning and Finance

3.9 The country'sFour-Year Development Plan 1967-70proposes road investment totalling about USp10 million and includes about 600 km of roads needing rehabilitation. The improvement of the project road, as weU as the Sibut-Bambariroad which is the subject of a feasibility study financed by the UNDP (see para.l.2), are included in the Plan.

3.10 Funds for road constructionhave been providedlargely by FED, and to a lesserextent by FAC. Since1962 aboutUS$o.5 millionequivalent has been spenteach year on capital works. Funds for road maintenance are financedfrom the generalbudget; the appropriationshave been insufficient and substantialincreases have been proposedin the Four-YearPlan. Funds for the Bangui-Damara-Batangafo-Fort Archambault road are provided by con- tributions from ATEC (seepara.3.6). E. HighwayEngineering and Construction

3.11 Road designis carriedout by consultantson an ad hoc basis,however, the directorateof planningand constructionhas made progresstowards preparing standard specifications and contracts. The designstandards for the projectroad (seeTable 7) have been selectedwith a view to minimizing highwayconstruction costs, and are adequatefor existingand foreseeable trafficover the next ten years. Road constructionis carriedout by private contractingfirms. 3ecauseof the very low volumeof work in the past five years,most of the foreigncontracting firms have closedtheir local offices. Contractsfor which funds are provided by FED limitthe bidding to contractorsfrom the European Economic Community. F. Maintenance

3.12 Maintenance is mechanized, except on local and feeder roads where labor-intensive methods are employed. Although the maintenance budget has been increased during the past years, maintenance is still inadequate. This has led to high costs of transportation and unreliable road connections. The maintenance of the local roads is virtually nonexistent.

3.13 Maintenance by the DPW is limited to earth and laterite roads as the only asphalt road in the country is being maintained by ATEC. The total budget for maintenance has gradually been increased from 260 million CFAF in 196h to 370 million CFAF in 1967. For 1968 the maintenance budget has been raised to 400 miUion CFAF. Since 1967 the expenditures for maintenance have been broken down by road section and other components; this aUows a better judgment of the efficiency of maintenance cperations.

3.14 The road network maintenance study (see para. 1.2) is at present in its preliminary stage. The final report of this study may be expected at the end of August 1969. The consultantsare required to report on existing maintenancepractices and to recommend improvements. A five- year maintenanceprogram for the national highway network will be prepared by the consultants to ensure a satisfactorylevel of serviceabilityof this network.

3.15 The consultantsfor the road maintenance study will also review the present accountingprocedures and recommend improvements. During credit negotiations,the Governnent gave an assurance that sufficient appropriations for highway maintenancewill be made available and that the conclusionsand recommendationsof the consultantswill be discussedbetween the Governnent and the Associationwith a view to agreeing upon an appropriateorganiza- tion of the highway maintenance. - 9 -

4. THE PROJECT

A. Description

4.1 The project consists of the following:

a. Reconstruction of the Bangui-M'baiki Road (102 km); including

(M) supplementary engineering works carried out by the DPW in 1968; and,

(ii) supervisionof constructionworks by the DPW.

b. Provision of equipment to maintain the road.

Reconstructionof the Bangui-M'baikiRoad (see Map)

4.2 The present road connects Bangui, the capital of the CAR, with M'baiki. M'baiki is the center of a region with a high agriculturaland forestry potential. The road traverses gently rolling terrain which is covered by dense vegetation. The horizontal alignnent is generally good. Drainage of the road is poor because the road surface is mostly below the surrounding ground and the existing drainage channels do not provide a proper run-off. A few sections of the road are exposed to flooding by nearby streams. The roadway is generallyabout 5 m wide. Some sections have a thin lateritic surface course, but because of lack of maintenance not much of this surface course is left. The road has generally deteri- orated to such a state that it is impassable after rain, even for light vehicles. Five existing reinforced concrete bridges will have to be replaced because of insufficient width.

4.3 The project consists of realigning the sections with sharp curves and the sections in which new bridges have to be built. The road has to be raised to improve the drainage. The pavement width would be widened to 6 m. The whole length of the road would have a cement stabilized base and a double bituminous surface treatment.

Supplementary Engineering Works and_Supervision of Construction

4.h The consulting engineering firm of SAUTI carried out detailed engineering of the project during 1965 and 1966. This work was financed by FED. The detailed engineeringwas, however, not sufficientlycomplete for cost estimates and bidding documents to be prepared. In 1968 the DPW supplemented bridge designs, carried out additional soil surveys and made additional topographicsurveys where realignmentswere required. Detailed engineering, including bidding documents and cost estimates, have now been satisfactorily completed. The total cost of the additional soul and topographic surveys amounted to $40,000. - 10 -

4.5 The Governmenthas requested that the constructionworks be super- vised by the DPW. The directorate of planning and construction of the DPW has sufficient experience in the supervision of the construction of this type of road. Qualified engineers and technical personnel from France have been made available to the CAR under a FAC technical assistance program. IDA obtained assurances during credit negotiations that during the construction of the work, experienced staff for supervision will be kept available, and if determinednecessary by the Association,they will be strengthened by the employment of consultants.

Procurement of Highway Maintenance Equipment

4.6 Existing highway maintenance equipment is not adequate to ensure proper maintenance of the project road after its completion. As the findings of the consultants for the maintenance study will not be available in their final form before the end of August 1969, procuremEnt of maintenance equipment and spare parts should at this stage be confined to that needed for the maintenance of the project road. To this end, an amount of US$250,000 being the foreign cost component of this equipment,is included in the Credit.

B. Cost Estimates

h.7 The following table shows the total cost of the project broken down into local and foreign components:

CFAF (millions) Us$ (thousands) % of foreign Items Local Foreign Total Local Foreign Total exchange

(1) Reconstruction of the Bangui-M'baikiRoad 265 795 1,060 1,070 3,230 4,300 75 (2) a. Supplementaryengi- neering by DPW 5 5 10 20 20 ho 50 b. Supervisionof con- structionby DPW and consultants' services*/ 10 10 20 40 40 80 50

(3) Provision of maintenance equipment and spare parts 12 60 72 50 250 300 83

(4) Contingencies

a. Physical (about 10% of the amonuntunder (1) ) 28 89 108 110 320 430 75 b. Price escalation (about 10% of the amounts under (1), (2) and (3) ) 30 90 120 110 3h0 450 75 Total Cost of the Project 350 1,0h0 1,390 1,h400 ,200' 5,600 75 */ The cost of supervisioncovers only cost of transportationof supervising staff on the site, equipment for a soils laboratoryon the site and the salaries of two expatriateassistant engineers. The cost of supervisionby other technical staff is not included, as the engineering services are provided by the FAC technical assistanceprogram. - il -

4.8 The cost estimate for the reconstruction of the road was prepared by the DPWon the basis of present construction costs in the CAR. The foreign exchange component is based on an analysis of these construction costs andis estimated at 75%. The cost of the maintenance equipment has been estimated on the basis of recent equipment purchases by the CAR. The foreign cost component for this equipment is the estimated C.I.F. cost at Bangui. The estimates for the reconstruction costs and the maintenance equipment are in line with costs in neighboring countries.

4.9 The cost of topographic and soil surveys, performed by the DPWin 1968, which were required to supplement the detailed engineering, amounted to US$40,000 of which the foreign exchange component is estimated at US$20,000. The cost of prequalification of bidders by the French consulting firm BCEOM,also performed in 1968, which amounted to US$3,000, was entirely in foreign currency. Financing of the foreign exchange component of the cost of the topographic and soil surveys and the prequalification of con- tracting firms, amounting to US$23,000, is included in the Credit. The consulting firm BCEOMwill be requested by the Government to evaluate the bids, if the DPJ's analysis of bids were to result in a recommendation to award the contract for other than the lowest priced bid. The cost of supervision by the DPWand the consultants' services is estimated at US$80,000, of which the foreign exchange component is estimated at 50%.

C. Execution and Financing

4.10 Construction of the road will commence in mid-1969 and will be undertaken by a single contractor. The construction period will be 30 months running over two complete dry seasons; construction should be completed early in 1972. Construction of the project road will be awarded as a single contract on the basis of the Associationts guidelines for international competitive bidding.

4.11 The maintenance equipment will be procured through international competitive bidding. Equipment deliveries will start towards the beginning of 1971, allowing sufficient time for operators to be trained on the new equipment before maintenance of the new road is required.

4.12 On the assumption that construction will start in mid-1969 and allowing a 30 month schedule, annual IDA disbursements are expected to be as follows:

1969 1970 1971 1972 1973 Totai US$ in thousands 800 1,200 1,500 500 200*/ 4,2!Dfl

*/ Funds to be retained from contractor for one year warranty period. - 12 -

4.13 The Governjent indicated during negotiations that it will make available local funds as needed.

4.11 Disbursementsfor constructionwill be made on the basis of the contractor'smonthly statements. For road constructionthe Association will pay 75% of all constructionservices. For equipment and spare parts it will pay the foreign cost component. For supplementaryengineering, the consultants'services and the cost of supervisionas included in the project cost, the Associationwould pay the estimatedforeign exchange part, estimated at 50% of the total of these costs. Any surplus remaining in the credit account would be available for cancellation. - 13 -

5. ECOi;OMICJUSTIFICATION

A. Service Area of the Bangui-1M'baiki Road

5.1 The project road links Bangui, capital of the CAR with M'baiki, chief town of the Lobaye province. It is part of one of the main road connectionsto Cameroon.

5.2 Lobaye is one of the economicallymost active provinces of the CAR; with a share of only seven per cent of the total population,it con- tributes at present an estimated 15à to the country's GDP. The province is the principal producer of coffee and, so fari,the only producer of rubber and timber. It has rich potential for production of palm oil and other agriculturalproducts.

5.3 The forest industry has expanded rapidly in recent years. Tim- ber production increased from 112,000 m-- of logs in 1960 to 170,000 mniin 1967. There are seven sawmills in the country, all within reach of the project road. The output of timber from these mills is almost entirely transported by road to Bangui for further processing or export to Chad. A negligible amount of log exports to Europe are floated on the Lobaye- Oubangui river system to Brazzaville and thence by rail to Pointe Noire.

5.4 Several developmentprojects which are being carried out in the Lobaye province are likely to enhance the importance of an improved road link between Bangui and M'baiki in the near future:

(i) Feeder roads with a total length of about 115 km will be constructed to the south of the Bangui-M'baikiroad. The project is being financed by FED and is mainly aimed at facilitating logging operations and agricultural production in the service area of the project road.

(Ji) Agriculturalproduction of certain commodities will be increased by a FED financed plantationprogram. Exist- ing pepper plantations will be enlarged and a new palm oil plantationwill be establishedon both sides of the project road. It is planned to install an oil mill at a later stage.

(iii) The French company Leroy has been awarded a new logging concessionof 50,000 ha to the west of M'baiki. A private feeder road from the concession to the Lobaye river has been constructedand production has started in the second half of 1968. It is planned to produce 10,000 m3 of sawn timber and 20,000 m3 of logs annually. - 14 -

(iv) The Lobaye river has been improved by ATEC and it is now navigable throughout the year. This has considerably fa- cilitated logging operatlons in the Lobaye province and additional permits will be issued shortly. Although log exports will not be routed via Bangui, the growth of logging activities will certainly increase the volume of general traffic on the project road.

5.5 A rapid development of the forest industry is taking place in the Haute Sangha province, west of the Lobaye. With financial assistance from FED, the Sangha river is being improved and a new port will be constructed at Nola. Two concessions totalling some 200,000 ha have already been awarded and additional permits are expected to be issued soon. The Sangha province is not within the direct service area of the proposed project, but increased development efforts in this region will certainly have a positive impact on traffic on the Bangui-II'baiki road, which is the first section of the only overland link between the capital and the Sangha province.

B. Traffic

.6 Traffic counts on the project road were undertaken by the Gov- ernnent's Planning Office from April 1967 to March 1968 and supplemented by SAUTI in November and December 1967,. They provide information on the total volume of traffic, but give little details as to the traffic composition and its origin and destination. Taking into account seasonal variations and decreasing traffic densities from Bangui towards H'baiki, the average daily traffic (ADT) over the total length of the project road is estimated at 80 vehicles in 1968 with trucks and buses accounting for about 70% of all movements. Traffic is evenly distributedin both dir- ections.

5.7 Traffic groi-thon thleproject road over the past five years has probably been higher than on most of the other roads in the country and is estimated at 10% per annum. Dased on a review of the overall development targets of the country, the expected growth of population and the probable increase of agricultural and industrial production in Lobaye, the consultants have formulated two alternative projections of traffic growth on the Bangui-U 1 baiki road, i.e. rates of 15% and 10%aper annum for the first decade after completion of constructionof the road, and 5%per annum for the second decade for both alternativeprojections. The higher rate of 15%ois based on a number of overly optimistic assumptions as to the developmentof agriculturaland industrial production. As there is little evidence that this will materialize in the near future, a traffic growth of 105o per annum during the first 10 years, and of 5%per annum during the remaining 10 years of the economic life of the project has been assumed in the economic evaluation of the project. - 15 -

C. Econonic Benefits

5.8 The improvement of the Bangui-M'baiki road would generate economic benefits principally in the form of a reduction in vehicle operating costs, increased agricultural production due to an improved and more re- liable access to markets in the capital city and time savings accruing to vehicle occupants and cargo.

5.9 The quantitativeevaluation of expected benefits has been confined to directly measurable benefits, i.e. vehicle operating savings. Based on the consultants' estimates, operating costs for various types of vehicles are expected to decrease by about 35 to 45%, yielding benefits of about CFAF 6.8 (US¢2.7)per car-km and CFAF 33.0 (US¢13.4)per truck-km (Table 8). These are in line with other Bank/IDA.financed projects in West Africa and are reasonable. Discounted over a period of 20 years, the total measurablebenefits yield an economic return of about 14%. 5.10 To test the sensitivityof the rate of return to changes in the assumed traffic growth, an alternative rate of return calculationwas made with an assumed growth rate of 5" per annum throughout the economie life of the road. This gave a rate of return on the investment of about 10%. Taking account of the scarcity of data which has led to the exclusion of other additional benefits from the analysis, the project appears to be justified,even on the basis of the lower rate of traffic growth. - 16 -

6. RECOENDM\JDATIO!i

6.1 During credit negotiationsthe Governnentagreed to:

(i) make available experienced staff for supervision of the constructionof the project road, if necessary through assistance by consultants (para. 4.5);

(ii) establish proper procedures for collecting and processing traffic data (para. 3.5);

(iii) appropriate adequate funds for highway maintenance and discuss the conclusions and recommendations of the consultantswith the Association, with a view to agreeing upon an appropriate organizationof the highway maintenance (para. 3.15).

6.2 As the project is technicallyand economicallysound, it provides a suitable basis for an IDA Credit of US$4.2 million equivalent to the Central African Republic.

March 11, 1969 TABLE 1

CENTRALAFRICAN BEPUBLIC

HIGHWAYPROJECT

Port of Bangui

(Traffic in 1,000 tons)

1961 1963 1965 1967 Exported 55 55 52 56 Imported 110 120 129 157 Total 165 175 181 213

Of which in transit to and from CI-ad 57 73 61 49

Source: RepubliqueCentrafricaine, Annuaire Statistique, and BulletinMensuel de Statistique

March 11, 1969 TABLE 2

CEUTRALAFRICAN REPUBLIC

HIGGiWAYPROJECT

ROADUSER CHARGESAND ROADMAISNTENANCE COSTS

1. ROAD USER CîIARŒGES

(a) Unit Rates Passenger Car Truck, 7 tons

Annual license fees and CFAF p.a. 10,000 26,200 taxes on the capacity of commercial vehicles ("patente")

Fuel taxes CFAF per km 2.0 1.5

(b) Total mount of Taxes

Collected during the economic life of the project road* CFAF 450 li'lllion

2. HAIITEÎNICE COSTS

During economic life of the project road, net of taxes-* CFAF 383 Million

* Based on the following assumptions:

Average daily traffic (ADT) in the base year is 100 vehicles per day, growing at an annual rate of 10% during the first 10 years and of 5% during the second 10 years of the economic life of the project. Annual mileages = 20,000 km for passenger cars 29,000 km for trucks A' Annual maintenancecosts (1,000 CFAF per km): 175 + 0.05 ADT

March 11, 1969 TABLE 3

CENTRALAFRICAN REPUBLIC

HIGHWAYPROJECT

Highway Network

Road Class and Responsibility for Maintenance as of January 1, 1967 (in km)

Primary Secondary Local Maintained by Roads Roads Roads Total

Department of Public Works 2,118 1,270 - 3,388

ATEC 508 - 508

Ministry of Agriculture and local authorities - - 15,454 l,5454

2,626 1,270 15,454 19,350

Source: Plan de DeveloppementEconomique et Social 1967-1970

March 11, 1969 TABLE 4

CENTRALAFRICAN REPUBLIC

HIGIWAYPROJECT

Composition of Vehicle Fleet (Estimated)

(as per January31, 1967)

Cars 3,456 Pickups 2,,648 Trucks 1,968

Buses 155

Other 288

TOTAL 8,515

Source: Haut Commissariat au Plan, Situation du parc automobile de la RCA

1March 11, 1969 TABLE 5

CENTRALAFRICAN REPUBLIC

HIGHWAYPROJECT

Imports of Gasoline and Diesel Fuel

(1,000 m3 )

YEl! GASOLINE* DIESEIL* TOTAL

1964 16.2 10.8 27.0 1965 18.3 13.2 31.5

1966 15.4 12.3 27.7 1967 16.9 14.8 31.7

* excludingaviation gasoline

** including diesel fuel for generation of electricityand otherindustrial purposes

Source: Data providedby StatisticsDivision, Bngui

March 11, 1969 TABLE 6

CENTRALAFRICAN REPUBLIC

HIGHWAYPBDJECT

Imports of Vehicles and Tires 1964-1966

In number of Units

ITEM 1965 1966 1967

Cars 250 428 492

Buses 19 39 12

Trucks, under 10 tons 452 432 306

Trucks, 10 tons and over 130 119 169

Tires and Tubes 34,390 n.a. 39,830

Source: Statistics Division, Bangui

March 11, 1969 TABLE 7

CENTRALAFRICAN REPUBLIC

HIGHWAYPROJECT

Bangui-M'baiki Road

Design Standards

Right of Way (m) L0

Design Speed (kmh) 70

Pavement Width (m) 6.0

Shoulder Width (m) 1.0

Max. Gradient (%) 8

Pavement Design (t) 13 Axle Load

Min. Radius of Curves (m) 250

Width of Bridges (m) 8.00 including0.5 m wide foot path on each side

Pavement Surface double surface treatment

Source: DPW

March 11, 1969 TABLE 8

CENTRALAFRICAN REPUBLIC

HIGHWAYPROJECT

BASIC DATAFOR CALCULATIONOF ECONOMICCOSTS AND BENEFITS

1. Construction of the Project Road Mill. CFAF 960

Including detailed engineering and physical contingencies net of taxes

2. Road i4aintenanceCosts

Net of taxes per km per year (1000 CFAF), for an average daily traffic (ADT) of 50 to 400:

(a) Earth Road: 30 + 0.6 ADT (b) BituminousSurface Road 175 + o.05 ADT

3. Vehicle Operating Costs

CFAF per Vehicle Kilometer, net of taxes

Average Passenger Car Truck, 7 tons payload

Earth Road 19.3 70.1

BituminousSurface Road 12.5 37.1

Source: Mtission's estimates based on consultants' report

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