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l RETURN TO REPQ S TRRESTRICTED Vol. 3 Public Disclosure Authorized This report was prepared for use within the Bank and its affiliated organizations. They do no,tcuept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. TT'r'-rtDaKj A 1'rl(TM A T D) A \TTV rtC'D fn TTTt9T-TA3ThTT~? Public Disclosure Authorized AN APPRAISAL OF THE DEVELOPMENT PROGRAM OF GUYANA (in five volumes) Public Disclosure Authorized VOLUME III TRANSPORTATION April 21, 1967 Public Disclosure Authorized Western Hemisphere Department CURRENCY EQUIVALENTS G$1 US $0. 58 G$s million = US $583, 330 US $1 = G$1.71 US $1 million = G$1, 714, 290 VOLUME III, - TRANSPORTATION TABLE OF CONTENTS Page No. I. TNTRODUCTION AND SUMMARY . .. ... e . 1 - 3 II. TRANSPORT COORDINATION . .. o4 - 6 A. Government Organization . 0 . .. 4 B. Economic Regulation and Rates . 5 C. Government Road Costs and User Charges . 5 III. RAILROADS . 7 - 12 A. General. 7 B. GnvPrnmPnt Orprani7ation and -Current - Status ..... ............ 7 G= The GarriprsA = =- . - * . 8 Tvest Coast Railroad. .. 8 -~~-East Goas Railroand. 0 . , 9 D. Seven-Year Development Program . 11 E, Mission Recommendations. - 11 lT . ROADS . e c . - 22 A. Itr4 -- * *41 B. Existing Roads . ... 13 ~*£jlU ±L1±U d.LiU uAit,1 CU±IOUIjJ U ~LII QU.LL yo * L D. Design Standards ............. 16 P,. RU1MilLbItabZlon of roadu uons'rucnL4ii and Maintenarne. * . 17 Construction .. 17 Maintenance . 18 Consultants . r . .- . 19 F. Government Road Operations . 19 G. Tne Official Development Program . 19 H. Suggested Program and Priorities o. 21 V. PORTS . 23 - 28 A. Introduction and Current Status. 23 Georgetown Harbor.arbor..o e .o 23 New Amsterdam Harbor ......e.o .. 24 B. The Berbice Bar . 24 C. Government Organization and Finance, . 26 D. Official Development Prograi . ' . 27 B. Establishment of a Port Authority . 27 Page No. VI. INLAND SHIPPING AND FERRY SERVICES. 29 - 31 A. General . * C . 29 B. Traffic and-Services e........ 29 C. Finance . e . c . o e. 30 D. Official Development Programme . 30 E. Conclusions0 . 30 VII. AIR TRANSPORT . ... 32 - A. General. 32 B. Government Organization and Regulation . 32 C. Airnorts - a a a e a - - - ; 32 D. Guyana Airways Corporation . .. 32 E Official D1evelopmPnt. Progrnm 33 F. Suggested Investment Program . 34 ANNEX I - GOVEREN1fT ROAD COSTS AND USER CHARGES ANNEX II- COSTS AND REVENUES FOR DREDGING THE BERBICE CHANNEL ANNEX ITT - ROAD PROJECTS DESCRIPTIONS STATISTICAL APPENDIX I. INTRODUCTUUION HiND SUiMVSI'ui 1. Inadequacies and inefficiencies in Guyana's transport network noJ- only occasion a continuing drain on the countrv's economic and financial resources, but they also cause transport to fail to measure up as an adequiate contributor to eennomi developnment Present nanacities, in combined govern- ment-operated and privately-owned vehicle fleets, rolling stock and coastal vessels, Pppear adequate to) fiilf'ill t.he current dapmnds for transport. But existing roads especially do not provide either cheap and efficient transport, nor do theyr as yt+ opn uiph i nte+ ir to serve npw agriultuirarfl Iands or to tap potential mineral resources, to the extent these may exist. 2. Government-owned and operated transport services include two ra.,l- roads, a transport. service over onJo1.nand andA Ioastasipping a nda ferry services, a domestic airline and a harbor service. Traffic carried on 4theseL.JI1u±C:O1= sevieDu--- J V ±LVOp "11inK ..1961 L;~%.L d.Lutu land196~ ./ ±isLO -rsne-h - I -4-L' 4.11in4table. L ~ ± .'.- (th-ousar.ds) Freight Tons iNu. uo Passengers 1961 1966 1961 1966 Railroads 76 51 3,822 3,127 Coastal & River Shipping ii8 109 4,241 5,000 Road Transport (Government) 2 1 6 11 Air Transport a/ 718 o/2,210 b/j 12 27 b/ ton/kilometers Source: Ministry of Communications 3. Freight carried by rail shou a large and continuing declinei Movements by coastal and river shipping also show a decline but at a lower rate. In contrast, air freight has burgeoned and the trend9 is sharnply 7ward. Passenger traffic on both rail and ships, on the other hand, has remained fary stay.--- As in freight, so inpasnetrfi,herndnal transport indicates vigorous growth. While figures are not available for the over-alL volume of road traffle , it is safe t aslm.C, tha+'r1ier freight carried by rail and ship has been diverted largely to truck transportation. AIll government-operated services except the harbor services lose substantial sums of money each year - over G$2 million in 1966. The tariff increase of over 30 percent in railroad± an±d S,4--.!-- 5 efective- in Mac, 1966, has improved the financial position of government-operated transport some- what b-Ut did n.ot e'-minate continued deficits TLheL folon Z'as operating losses on government transport services for 1961, 1965 and 1966. 1/ 1/ Except for air transport it is additionally worth noting that none of these government services charge off any depreciation on their fixedi canital. -2 - (G$ thousand) 1961 1965 1966 Railroads 1,195 1,636 1,272 Coastal and River Services 1,056 1,217 748 Road Transport (Government) 90 133 115 Air Transport 176 184 166 Sub-total 2,517 3,170 2,301 4. As with government-operated transport services, so with public roads, users appear to be heavily subsidized. Based on the mission's own calculations, presented below, indirect subsidies in 1965 amounted to about G$5 million. This is a very rough estimate. However, using this figure, the government's total annual transport subsidy thus may be running over G$7 million a year. l/ 5. Some limited and specific subsidization of air transport, penetration roads and inland waterway services is probably justified in Guyana on social and economic development grounds. But the transport system as a whole prcperly should, over the longer pull, essentially finance most of its costs out of earnings, instead of being a continuing drain on-limited government finances. In the light of this criterion, there appears to be no future role for the railroads; the one road transport service operated by the government should, if possible, be turned over to private operators; losses on ferry and shipping services should continue to be drastically reduced, both through rate in- creases and lowered operating costs; and future investments should be con- centrated on roads, domestic air transport, and perhaps a modest port modernization project in 1971 or 1972. 6. The government's official Development Proaramme; 1966-725 allots G$64.8 million or over 22 percent of total planned public investments to the transport sector. The program tentatively sueeeted by the misson nlaces even greater stress on roads and on air transport, and would reduce the plan investment in harbors, shipping and railro5ads (G$ mililion) Investment 1966-1972 Official nevelopnment Mission Suggested Programme Programme. Roads 37.8 58 67.5 79 Railroads 2.0 3 0.9 1 Shipping 5.3 8 3.8 5 Air Transport 5.1 8 7.0 8 Harbors and Stellings 14.6 a/ 23 6.1 7 64.8 100 85.3 LO0 a/ This includes G$8.2 million for Berbice river bar dredging. 1/ This conclusion is questioned by the chief road engineer, who uses a different method of calculation to show that there is no indirect subsidy to road users. 7. The most salient feature is the near doubling of the proposed road investments over those recommended for 1966-72 in the official plan. Carefully worked out by the mission with the government Roads Division, the newly proposed innrogrm parrt simply reflects higher and more realistic costs for several roads, in part the addition of some high priority projects. The mission has satisfiedC tself th+a +this program wold meet the main economic needs for roads over the next few years, would be administratively to leasible for he t-o1n execute - s r.rv+ however greater use of large-scale contractor services - and should be financially manageable under the fiscal and external aid prospectives for rGt nn set forth in the Main Report (Volume I). 8. After the most careful consideration possible at present 1/ the mission has concluded that, certainly -nider terms of thle present agreement with an expatriate mining company, there would be no financial warrant for the government to undertake to dredge and maintaiin open a deep-water channel over the Berbice river bar. Although the mission is less certain, it at least seems probable that there would likewise be no early economic Justi- fication for the project. 9. In sum, the program recommended by the mission suggests that the Government's overall transport policy should provide (a) a combination road-ferry system as the main communications facility for the coastal and river bank areas; (b) expanded air transport as the main communications facility for the interior and (c) supplemental marine services, largely cargo, only when absolutely necessary or economically feasible. 1/ See Annex II. II. TRANSPORT COORDINATION 10. More than in many developing countries, some attention has been given to transport eoordlnation in GiiyrnaB This is pecause only one department of government is responsible for the operation of the railroads, ferry n steamer serices, harbor services and the one small road transport service. Conspicuously divorced from overall transport considerations, however, have beer. road building and air transport. F A'd r schedules and fares have been coordinated to provide through passenger ani fr-ei.ght, se~rvic~e from N11ew 4-tedthe4in, east4 toSueamonte west bank of the Essequibo river. Efforts at transport coordination included, until July l, L;.196, CZ different,ialUU_ _license1Zt; fee= PtnaliUL.Z..V trucks and buseso proin on roads paralleling the railroads.