Chadfiecp Third Highwayproject FILECOPY Appraisalreport Public Disclosure Authorized

Report No. 1834b-CD ChadFIECP Third HighwayProject FILECOPY AppraisalReport Public Disclosure Authorized

July6, 1978 Western Africa Project Department Highways Division FOR OFFICIAL USEONLY Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Document of the World Bank

This document hasa restricteddistribution and may be usedby recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. Currency Equivalents

US$1.00 CCFAF 245

Fiscal Year

January 1 - December 31

System of Weights and Measures: Metric

Metric British/US

1 meter (m) = 3.3 feet (ft) 1 kilometer (km) 2 0.6 miles (mi) 1 square kilometer (km ) = 0.4 square miles (sq mi) 1 metric ton (m ton) = 1.1 tons (short tons) I liter (1) = 2.1 pints (pts)

Abbreviations and Acronyms

ADF - African Development Fund ASECNA - Agence pour la Securite de la Navigation Aerienne en Afrique et a Madagascar ATEC - Agence Transequatoriale des Communications BDT - Banque de Developpement du Tchad BTCD - Banque Tchadienne de Credits et Depots CTT - Cooperative des Transporteurs Tchadiens DCA - Directorate of Civil Aviation DPD - Directorate of Planning and Development DPW - Directorate of Public Works DT - Directorate of Transport EIO - Equipment Inspection Office ENTP - Ecole Nationale des Travaux Publics FAC - Fonds d'Aide et de Cooperation FED - Fonds Europeen de Developpement ICAO - International Civil Aviation Organization MCWMG - Ministry of Civil Works, Mines and Geology MEPT - Ministry of Economy, Planning and Transport PO - Procurement Office RMA - Road Maintenance Authority RPDO - Road Planning and Design Office SHO - Studies and Hydraulics Office STC - Swiss Technical Cooperation UNCTAD - United Nations Conference for Trade and Development UNDP - United Nations Development Programme UNIDO - United Nations Industrial Development Organization UNSO - United Nations Sahel Office USAID - United States Agency for International Development voc - vehicle operating costs vpd - vehicles per day FOR OFFICIALUSE ONLY

CHAD

APPRAISAL OF A THIRD HIGHWAY PROJECT

Table of Contents

Page No.

SUMMgARY ...... o...... i-iii

1. INTRODUCTION ...... 1

2. THE TRANSPORT SECTOR ...... O.. 2

A. The Land and the Economy ...... 2 B. The Transport System ...... 3 C. Investments ...... 5 D. Management and Planning ...... 5

3. THE ROAD SECTOR ...... 6

A. The Network ...... 6 B. Road Transport Characteristics ...... 6 C. Road Transport Industry ...... 7 D. Administration ...... 8 E. Staffing and Training ...... 8 F. Planning ...... 8 G. Financing ...... 9 H. Engineering and Construction ...... 10 I. Road Maintenance ...... 10 J. Improvement of Feeder Roads ...... 11 K. Domestic Contracting Industry ...... 11 L. Appropriate Road Maintenance Technology ...... 12

4. THE PROJECT ...... 12

A. Description ...... 12 B. Road Maintenance Program ...... 13 C. Training Program ...... 13 D. Construction of Ferryboats ...... 14 E. Technical Assistance and Fellowships ...... 15 F. Rural Roads Study ...... 16 G. Completion of the Improvement and Maintenance Program for Cotton Feeder Roads ...... 17 H. Cost Estimates ...... 17 I. Execution ...... 19

J. Procurement ...... * 19 K. Financing and Disbursement ...... 20

Frhis document has a restricted distribution and may be used by recipients only in the performance [of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Table of Contents (Continued) Page No.

5. ECONOMIC EVALUATION ...... 22

A. Introduction ...... 23 B. Road M[aintenance Program ...... 23 C. Replacement of Ferries ...... 24 D. Distribution of Benefits ...... # ...... 25 E. Project Risks and Sensitivity Analysis ...... 25

6. AGREEMENTS REACHED AND RECOMMENDATIONS ...... 26

TABLES

1. Principal External Trade Corridors ...... 28 2. Public Sector Investment ...... 29 3. External Assistance: Transport Sector ...... 30

4. Road Network (1977) ...... 5.. 31 5. Traffic on Road Network to be Maintained by DPW ...... 32 6. Growth of t]neVehicle Fleet, 1970-76 ...... 33 7. Fuel Consumption, 1968-76 ...... 34 8. Government Revenues from Road Users, 1969-75 ...... 35 9. Expenditures on Highways, 1971-76 ...... 36 10. List of Roads to be Maintained ...... 37 11. Unpaved Road Maintenance Strategies ...... 38 12. Road Maintenance Equipment and Spare Parts for Existing Equipment; Cost Estimates ...... 39 13. Construction of Buildings and Workshops; Cost Estimates ..... 40 14. Network to be Maintained and Maintenance Operations ...... 41 15. DPW Personnel Training Requirements ...... 42 16. Equipment for Training Program; Cost Estimates ...... 43 17. Four Locally-Built Ferryboats; Cost Estimates ...... 44 18. Project Cost: Estimates ...... 45 19. Project Implementation Schedule ...... 47 20. Estimated Schedule of Disbursements ...... 48 21. Road Maintenance Cost Estimates ...... 49 22. Ferryboat Recurrent Costs ...... 50 23. Road Maintenance Recurrent Expenditures; Cash Flow ...... 51 24. Vehicle Operating Costs as a Function of Traffic and Road Surface Characteristics ...... 52 25. Breakdown of Cost Components for Shadow Pricing ...... 53 26. Summary of Economic Evaluation and Sensitivity Analysis ..... 54

This report has been prepared by Messrs. E. Staffini and A. Faiz, following an appraisal mission in March/April 1977. Table of Contents (Continued) Page No.

ANNEXES

I. Road Transport Industry ...... 55 II. Technical Assistance for a Training Program - Outline Terms of reference ...... 72 \III. Exhibit I - Proposed Ferryboat (Plan) ...... 76 Exhibit II - Proposed Ferryboat with Truck (Profile) .. 77 \IV. Plan of Action ...... 78 \V. Technical Assistance for Strengthening Equipment Maintenance Operations of the Directorate of Public Works - Outline Terms of Reference ...... 80 VI. Technical Assistance for the Reorganization of the Road Planning and Design Office - Outline Terms of Reference ...... 83 VIIl. Transport Economist for the Directorate of Transport Outline Terms of Reference and Qualifications .85 VIII. Trucking Industry Expert to be Attached to CTT - Outline Terms of Reference and Qualifications ...... 87 IX. Rural Roads Study - Outline Terms of Reference ...... 89 X. Economic Analysis of the Project ...... 0...... 91

EXHIBITS

I. Directorate of Public Works: Organigramme ...... 115 II. Incremental Benefits from Regravelling ...... 116 III. Benefits from Grading of Tracks ...... 117

MAPS

I. CHAD - Third Highway Project (IBRD No. 13241-R) II. CHAD - Third Highway Project, Main Road Connections (IBRD No. 13242)

CHAD

APPRAISAL OF A THIRD HIGHWAY PROJECT

SUMMARY

i. The Republic of Chad, a vast, landlocked country in the heart of north-central Africa, is counted among the world's poorest 25 countries (Gross National Product in 1975: US$120 per capita, with incomes in rural areas about US$60 per capita). The economy is based on agriculture, which accounts for over 50% of the Gross Domestic Product (GDP); cotton is the principal export, providing over two-thirds of the export earnings. As Chad's principal economic centers are located about 2,000 km from the nearest ocean port, external transport plays a critical role in Chad's economy. Roads form the backbone of the internal transport system. The road network consists of about 7,300 km of classified roads and tracks, and about 24,000 km of tracks providing access to agricultural areas. Only about 1,300 km are engineered, all-weather roads; of these 253 km are paved. Road distribution is uneven; the major portion is located in the cotton-producing areas in the south, while the sparsely-inhabited northern part is served mainly by desert tracks. Inadequate maintenance, due to shortage of funds, has impaired the service- ability of the road network.

ii. Bank Group assistance to Chad's transport sector has been confined to two highway projects and transport components in two other Credits. The (First) Highway Maintenance Project (Credit 125-CD, US$4.1 million, August 1968) was geared to improving road maintenance. It consisted mainly of a five-year maintenance program, and a preinvestment study. The road maintenance program was completed in 1973, but physical targets were only partially achieved, due to severe budgetary constraints as reflected in reduced allocations for recurrent expenditures. The Second Highway Project (Credit 490-CD, US$3.5 million, June 1974), including an improvement and maintenance program for cotton feeder roads, an interim program for maintenance of ferries, a training program, preinvestment studies, a program of traffic counts, and a road transport industry study is being implemented with satisfactory results. The project is due for completion in 1980. The training program has been extended to July 1978 to provide continuity with the training envisaged under the proposed project. The extension of this program has increased the project cost by about US$400,000, net of taxes, which would be financed under the proposed project. This amount would be used to finance capital costs and operating expenditures of the remaining part of the cotton feeder road maintenance and improvement program. Two other IDA-financed projects have small transport-related components: (a) the Rural Projects Fund (Credit 664-CD, US$12 million, December 1976) includes maintenance operations on selected sections of about 1,200 km of feeder roads; and (b) the Sahelian Zone Project (Credit 739-CD, US$1.9 million, October 1977) includes rehabilitation of six airstrips.

iii. The Government's objectives in the road sector are to improve communications between the Sahel zone and the agriculturally productive south in order to promote national integration, and to facilitate the export and - ii - import of essential commodities. In support of these objectives, the proposed Third Highway Project aims to make road maintenance operations more efficient, strengthen road maintenance and planning, and improve the operations of the trucking industry. The Government's increased commitment to road maintenance, despite the continuing critical budgetary situation, reduces the risk that the proposed project will experience the difficulties that hampered execution of the first project. The proposed project would include: (a) a four-year road maintenance program of about 5,300 km of unpaved roads and tracks, including purchase of equipment and construction of workshops and buildings; (b) a training program for DPW personnel, including a training/production brigade for regravelling about 100 km of roads per year; (c) construction of four ferryboats; (d) technical assistance and fellowships to: (i) strengthen DPW, (ii) provide plaining support for the Directorate of Transport (DT), and (iii) improve the trucking operations of the Cooperative des Transporteurs Tchadiens (CTT); (e) a study to prepare a rural roads project; and (f) completion of the improvement and maintenance program for cotton feeder roads started under the Second Highway Project. iv. The capital cost of the proposed project is estimated at US$21.9 million equivalent, with a foreign component of about US$18.4 million (84%). Taxes amount to US$0.2 million as the Government has agreed to waive all taxes, except those on fuel. Recurrent expenditures over the project period amount to about US$8.1 million equivalent with foreign costs of about US$4.1 million (51%). The cost estimates are expressed in end 1977 prices and include physical and price contingencies during project implementation. All the capital costs (net of taxes) of the proposed project would be externally cofinanced on a parallel basis by the Association (IDA Credit; US$7.6 million), the United States Agency for International Development (USAID grant; US$9.0 million), and the African Development Fund (ADF Credit; US$5.1 million). The Government would provide US$8.3 million equivalent; US$0.2 million to finance taxes on fuel, and US$8.1 million for the recurrent expenditures of the maintenance program for roads and ferries. v. The proposed project provides for about 531 man-months of consulting services and technical assistance: 230 man-months for the training program, 205 man-months to assist in strengthening DPW and improving regional workshop efficiency, 16 man-months to assist in ferryboat construction, 30 man-months to provide planning support to the Directorate of Transport, 15 man-months to improve CTT's trucking operations, and 35 man-months for the rural roads study. In addition, fellowship support would be provided for DPW, DT, and CTT personnel. Consulting services and technical assistance for DPW, building of ferryboats, and the rural roads study would be financed by the Association, while USAID would provide for the remaining technical assistance requirements. vi. The Ministry of Civil Works, Mines and Geology (MCWMG) would implement, through its DPW, the road maintenance and training programs, construction of ferryboats, and civil works. It would also supervise the technical assistance for DPW and administer fellowships for DPW staff. The Ministry of Economy, Planning and Transport (MEPT) would supervise the technical assistance for DT and CTT, and the rural roads study. Building materials - iii - for ferryboats would be procured under international competitive bidding in accordance with Bank Group guidelines. Procurement of all other goods financed by the Association would be carried out under local competitive bidding procedures acceptable to the Association. Ferryboats would be built under force account, but some of them, or parts thereof, might be contracted to local workshops under local procedures. A small quantity of consumable materials for ferryboat construction and office supplies (up to an aggregate amount of US$60,000) might be purchased through local shopping. Consultant's services for technical assistance to DPW and for ferryboat building would be obtained following procedures, and on terms acceptable to the Association. All other goods and services would be procured following the procedures of respective cofinancing agencies. DPW will prepare bidding documents and supervise construction of buildings. The Association would be responsible for project supervision subject to agreement with all cofinancing agencies. vii. The best estimate of the economic rate of return for routine maintenance is about 75%, corresponding to a benefit/cost ratio of 3.25 at a 12% discount rate. Regravelling of about 400 km of roads by the training production brigade would yield an economic rate of return of about 17% equivalent to a benefit/cost ratio of 1.31 discounted at 12%. The overall economic return for road maintenance operations, accounting for costs of routine maintenance, regravelling, and training, is estimated at 51%. Replacement of the four ferries would produce an overall rate of return of 44%, ranging from 27% to 58% for individual ferries. The overall rate of return for the project, including the maintenance program and the replacement of ferryboats, is about 50%. Improved quality of roads through maintenance would tend to retard the escalation in transport costs and the corresponding multiplier effects, resulting in increased prices of consumer goods and reduced net export revenues. As some of the project benefits are expected to filter down to the producers, further expansion of agricultural output and generated traffic could materialize. viii. With the agreement reached on the conditions listed that in Chapter 6, the proposed project is suitable for an IDA Credit of US$7.6 million to the Republic of Chad on standard IDA terms.

CHAD

APPRAISAL OF A THIRD HIGHWAY PROJECT

1. INTRODUCTION

1.01 Chad's economic situation has been deteriorating since the late 1960's due to a prolonged drought and internal security problems. Increased demand for Government services, resulting from the drought, and rising military spending, caused budget deficits that rose from CFAF 2.0 billion in 1970 to CFAF 4.1 billion in 1974, leading to accumulated payment arrears of CFAF 11.6 billion by 1976. The Government, therefore, has depended on external assistance for most of its investment needs. This fiscal situation presents serious obstacles to transport development as the Government can neither con- tribute to investments nor fully finance recurrent costs. During 1972-75, annual expenditures on road maintenance averaged less than 2% of Government's spending on recurrent expenditures. A properly maintained road network, however, is critical to the growth of the country's economy, particularly in the agriculture and livestock sectors. It would also help to improve communications between many important commercial and administrative centers and reduce the economic and administrative isolation of several prefectures. To help maintain and improve its primary and secondary roads, the Government has requested Bank Group assistance in financing a Third Highway Project.

1.02 To date, Bank Group assistance to Chad's transport sector has been for road maintenance and improvement of cotton feeder roads. The First High- way Maintenance Project (Credit 125-CD, US$4.1 million, August 1968) provided a five-year maintenance program for primary and secondary roads, feasibility studies of the Djermaya-Djimtilo road and lake side facilities, and a country- wide program of traffic counts. Training for road maintenance personnel ini- tially included in the project was largely deferred to the follow-up Second Highway Project, although some training was provided under USAID auspices.

1.03 The project focused the Government's attention on the importance of road maintenance and initiated the process of building a sound maintenance organization. Equipment, spare parts, and materials were purchased and workshops improved. The shortage of local funds for recurrent maintenance expenditures, low equipment utilization due to lack of spare parts and inadequate equipment maintenance, and grave internal security problems were the main reasons for the shortfall in annual road maintenance targets (a maximum of 2800 km compared to the appraisal expectation of 4350 km at the end of the project). The shortage of local funds can be generally attributed to the allocation of fuel taxes to the general budget rather than the Road Fund, although from 1972 onwards insufficient Government allocation for road maintenance was more a result of the Sahelian drought and the political unrest, which caused a steep decline in production and revenues. The Operations Evaluation Department's Project Performance Audit Report (No. 1883) points to the need for provision of increased local funds for maintenance, improvement of equipment utilization, expansion of training for maintenance personnel, and development of Government's ability to plan and execute road maintenance works. The design of the proposed project takes account of these considera- tions. -2-

1.04 The Second Highway Project (Credit 490-CD, US$3.5 million, June 1974) started in 1975, comprising a five-year program of improvement and maintenance of cotton feeder roads, a three-year interim maintenance program for ferryboats,a training program for Directorate of Public Works (DPW) personnel, a two-year traffic counting program, preinvestmentstudies of about 120 km of cotton export rpads, a feasibility study for replacementof ferryboats, and a road transport industry study. The improvementand maintenance of cotton feeder roads is proceedingsatisfactorily. The interim maintenance of ferryboats,the feasibility study for replacing ferryboats, and the transport industry study have been completed,while the training and traffic counting programs are in progress. Detailed engineering of the two cotton export roads was not undertakenbecause the proposed investment in one road was not economicallyjustified, and the other was contingentupon the implementation of a soap factory project, which was cancelle4 by the Government. In view of the increased training requirementsfor the implementationof the proposed Third Highway Project, the training program has been extended to provide continuityin the training activitiesbetween the two projects. The use of project funds for extension of the training program would require additionalfinancing to complete the improvement of cotton feeder roads. The resulting cost increase, US$400,000,net of taxes, would be financed under the proposed project (para. 4.14).

1.05 In addition to the First and Second Highway Projects, the Rural Projects Fund (Credit 664-CD, US$12.0 million, December 1976) includes minor drainage works and selective maintenance and improvementof about 1200 km of feeder roads, mainly in the cotton zone. A first step to improve the air transport sector will be taken under the Sahelian Zone Project (Credit 739-CD, US$1.9 million, October 1977) which includes a sub-projectfor minor rehabilitationworks on six airstrips serving regional prefectures.

1.06 The proposed project serves as a logical sequel of the road maintenance effort initiated under the Highway MaintenanceProject and supports the Government'scommitment to establish road maintenance on sound technical and financial grounds. Serving as the first phase of a long-term improvement effort in road maintenance in Chad, the primary objective of the project is to preserve the continued serviceabilityof the road network, so that earth roads and tracks remain trafficableduring the dry season and selected roads are regravelledto provide all-weatherservice.

1.08 This report is based on studies prepared by consultantBCEOM, on informationprovided by DPW and other Governmentagencies, and on the findings of an appraisal mission comprisingMessrs. E. Staffini (engineer),A. Faiz (economist),P. Sooh (engineer),A. Pappalardo (engineer,consultant for ferryboats)and P. Gueye (transporteconomist, consultant for the trucking industry),which visited Chad in March-April 1977.

2. THE TRANSPORT SECTOR

A. The Land and the Economy

2.01 Landlocked in the heait of north-centralAfrica, Chad occupies an area of about 1.3 million km , with a populationestimated at 4.0 million -3-

in 1976. The population growth rate is about 2.0% per annum. About 85% of the population is concentrated in the southwestern savanna zone, which occupies only 10% of the land area. There, smallholders cultivate millet, sorghum, groundnuts and, more recently, rice as food crops, and cotton as the primary cash crop. As rainfall declines and becomes more erratic, trans- humant pastoralism replaces rainfed farming in the Sahelian region. The vast northern part of the country is a rocky wasteland consisting of southern extensions of the Sahara and Libyan deserts.

2.02 With a per capita Gross National Product (GNP) of US$120 in 1975, Chad is one of the poorest countries of the world and is included among the 25 least-developed member countries of the United Nations. Agriculture represents over 50% of the Gross Domestic Product (GDP) and accounts for nearly all exports, of which cotton, livestock and animal products, and fish are the main commodities. During the past ten years, the pace of development has been slow due to the country's formidable growth problems, namely lack of natural resources (with the exception of recently discovered oil deposits), a hostile climate, a literacy rate of 7%, a largely unskilled labor force., atl .1i- I uing political unrest. Between 1967 and 1975, per capita income dropped about 1% per year, and Government budget came under increasing strain with few internally financed investments. Efforts, however, are being made to put Chad's financial house in order; a balanced budget appears possible by 1982 in the judgement of the recent Bank economic mission (Report No. 1340-CD).

B. The Transport System

International Transport

2.03 The remoteness of Chad's urban centers from ocean ports (1,700 - 3,000 km) and difficult internal communications give rise to high transport costs, which in turn inflate the price of imports and most consumer goods, and have a debilitating effect on the competitiveness of Chadian exports. As land transport costs account for a significant 15-20% of the f.o.b. price, the competitiveness of Chadian cotton exports is becoming increasingly mar- ginal. Relative to imports, a bulk freight rate of about CFAF 34,000 (US$140) per ton from ocean ports adds significantly to the final consumer prices.

2.04 The principal external transport corridors to the sea are: (a) the Nigerian route via Maiduguri to Lagos or Port Harcourt, carrying about 32% of the total freight in 1977; (b) the Cameroonian route via Ngaoundere to Douala, accounting for about 48% of the total tonnage compared with 16% in 1970; and (c) the Transequatorial route via Bangui and Brazzaville to Pointe Noire, carrying about 12% of freight traffic compared with 47% in 1970 (Table 1 and map). Since 1974, transit trade has diverted substantially from the Transequatorial route to the Cameroonian route, following the establishment of a railhead at Ngaoundere and the improvement of the road link between Ngaoundere and N'Djamena. This diversion was accelerated by the dissolution of the Agence Transequatoriale des Communications (ATEC) in 1969 and improvement of the road link between Sarh and the Cameroonian border via Moundou during 1965-70. It is estimated that the Cameroonian route will continue to attract an even larger share of Chad's transit trade, especially with the -4-

projected increase in capacity at Douala port and the proposed construction of the Moundou-Guidjibaroad linking southern Chad with the Trans-Cameroonian axis by a more direct route.

Transport Infrastructure

2.05 Road transport is the predominantmode in Chad's transport system, accountingfor about 75 million ton,-km?or nearly 85% of total freight traffic. The details of the road subsector are discussed in Chapter 3. Other modes include an air transport network and inland waterways comprisingLake Chad and the Chari-Logoneriver system.

Air Transport

2.06 Chad has 44 airfields and airstrips, including one international airport at N'Djamena for commercialjet traffic. Eleven of the larger air- ports are efficientlymanaged by the Agence pour la Securite de la Navigation Aerienne en Afrique et a Madagascar (ASECNA),while most of the remaining airfields fall under the jurisdictionpf the Directorate of Civil Aviation (DCA). Most of the airstrips are unpaved, and due to lack of adequate maintenance, their serviceabilityhas been impaired. A subproject under the ongoing Sahelian Zone Project will restore six airstrips to their previous condition.

2.07 Total air freight traffic (arrivin$anid departing) dropped from an all-time high of 29,000 tons in 1970 to 14,500 tons in 1975. This was due primarily to the recession in economic activity in Chad during the drought years. Major commoditiesexported via air are meat, fish and gum arabic. Domestic transport is handled by Air Tchad, an autonomouscorporation which offers scheduled service between N'Djamena and ten interior cities; six major airlines, including the multi-national,ptate-owned, Air Afrique, of which Chad is a member, handle the internationaltraffic. The domestic demand for air transport (0.3 million ton-km of air cargo in 1975) is seasonal,peaking in August-September(the rainy season) when road transportbecomes quite difficult and in many cases impossible. Although preliminary studies carried out by United Nations Conference pn Trade and Development (UNCTAD) and Interna- tional Civil Aviation Organization (WCAO) reflect favorably on the potential of air transport development in Chad. supbstantialincrease in air transport demand does not appear likely in the near future.

Inland River and Lake Transport

2.08 The River Chari is navigable between N'Djamena and Lake Chad year round, and between N'Djamena and Sarh (850 km) from mid-August to mid-December. The Logone river is navigable between N'Djamena and Moundou (1,000 km) from September to late October. Barge traffic on the rivers and Lake Chad is estimated at about 15-20,000tons per year, or about 10-15 million ton-km. Major commodities include beer, timber, sugar, steel, fuel, natron and fish. Pros- pects for river transport developmentare limited bepause of river regime constraints, although the outlook for developingbarge transport on Lake Chad is more favorable. The local constructionof ferries under this project could well serve as the nucleus of a future barge coinstructionindustry for lake transport. -5-

C. lnvestments

2.09 Investments in the transport sector (including communications) averaged about CFAF 0.75 billion per annum during 1967-70 (38% of total public sector investments), but declined to CFAF 0.60 billion (6% of total investments) in 1975, due to a shift in government policy toward agricultural development (Table 2). Major investments in the sector since 1970 comprise the construction of the N'Djamena-Guelendeng and N'Djamena-Massaguet roads, the Moundou-Airport road, the Ba-Illi bridge and runway strengthening at the N'Djamena airport (Table 3), in addition to the Bank Group's highway projects (paras. 1.02-1.05). Transport sector investments decreased from 2.4% of GDP in 1967, to 0.5% in 1975.

D. Management and Planning

2.10 The primary responsibility for transport planning and coordination rests with the Ministry of Economy, Planning and Transport (MEPT). Within the Ministry, the Directorate of Planning and Development (DPD) determines transport investment priorities and coordinates external assistance; the Director- ate of Economic Affairs establishes transport tariffs; and the Directorate of Transport (DT) is responsible for transport policy and regulation of all modes, including international transport agreements. The Ministry of Finance establishes road user taxes, approves budget requests, and proposals for tariff modification. DPW, within the Ministry of Civil Works, Mines and Geology (MCWMG), is responsible for the construction and maintenance of public works. ASECNA, and DCA within MCWMG, administer air transport.

2.11 The basic elements of a hierarchical transport planning process are present in the Government's existing organization. DPW's Studies and Hydraulics Office (SHO) and the technical planning sections of ASECNA and DCA are responsible for data collection, analysis of sectoral trends, and technical evaluation of projects. DT serves as the next operational level in the transport planning hierarchy, liaising between the operating organi- zations (DPW & DCA) and DPD, as well as being responsible for sector policy and regulation. The next level of transport planning occurs in DPD where inter- and intra-sectoral investment priorities are determined.

2.12 The Government has staffed its transport agencies with qualified nationals where possible, and relies on technical assistance experts, mostly supplied by thje Fonds d'Aide et de Cooperation (FAC), to fill other positions. Most management positions are held by Chadians, but there remains a significant shortage of qualified technical staff in most agencies. For example, technical staff of DCA consists of one civil aviation engineer who heads the Air Transport Section, while the position of the director remains vacant. DT is also understaffed; as a result, its activities have been confined to immediate problems concerning the road transport industry and negotiations pertaining to international transport agreements. Owing to the shortage of trained local staff, technical assistance experts in most agencies spend much of their time coping with routine administrative and operational matters. Consequently most planning activity centers on developing a "shopping list" of projects for external financing. Although the Government is in the process of formulating a development plan (1978-81), it is unlikely that more than generalized guidelines and objectives will emerge from the exercise under present constraints. -6-

2.13 The basic strategy for improving sector planning in this context is seen as a gradual one considering the country's limited absorptive capacity for technical assistance, and other manpower constraints. The first and most important need is to improve the system of data collection and technical analysis, i.e. the lower echelons of transport planning. To this end, technical and financial assistance is included in the project for SHO (paras. 3.12, 4.09, and 4.10) and DT (para. 4.11).

3. THE ROAD SECTOR

A. The Network

3.01 The road network consists of about 7,300 km of roads divided into about 4,600 km of national roads and about 2,700 km of prefectural roads; and 24,000 km of unmaintained tracks (Table 4). The network includes 253 km of paved roads and about 1,050 km of all-weather engineered gravel roads; most of the remaining roads and tracks are passable only during 7-8 months of the dry season. The major portion of the network is located in the cotton zone, covering about 10% of the area of the country. The sparsely populated northern part of the country is served mainly by desert tracks. Construction of all-weather roads began in Chad in 1964 with the east-west trunk road from Sarh to Pala; this was followed by the paving of N'Djamena-Guelendeng and N'Djamena-Massaguet roads, completed in 1971. No further extensions or major improvements of the road infrastructure have been made since 1972, except for the paving of the 11 km Moundou-Airport road and the construction of the Ba-Illi bridge.

B. Road Transport Characteristics

Traffic

3.02 Current traffic levels can only be approximated, since the latest available traffic counts date back to 1970 (Table 5). It is estimated that traffic flow on the network averaged about 25-30 million veh-km per year, and about 70-75 million ton-km per year, during 1970-76. Except for the paved road between N'Djamena and Guelendeng, the classified network carries less than 100 vehicles per day (mainly trucks), varying from 30-60 vehicles per day (vpd) on the most trafficked national roads to under 10 vpd on prefectural roads.

Vehicle Fleet

3.03 The operational vehicle fleet is estimated to be about 9,300 vehicles (4,500 passenger vehicles, 3,000 pick-up and medium trucks, and 1,800 heavy trucks) on the basis of available Government statistics, adjusted to account for vehicles retired from the fleet (Table 6). The vehicle fleet has increased at an estimated rate of 3-6% p.a.

Fuel Consumption

3.04 Fuel consumption appears to have remained constant during 1968-76 (Table 7). This apparent paradox, in the light of an estimated 3-6% annual -7- growth in the vehicle fleet and a 3% annual increase in total tonnage moved via road transport during the period 1968-74, may be explained in terms of increasing unrecorded fuel purchases in Nigeria where the price of fuel is one-third of that in Chad.

C. Road Transport Industry

3.05 The domestic road transport industry (details in Annex I) carries about 470,000 tons of freight per year including about 160,000 tons of import- export traffic. There is no scheduled inter-city passenger road transport in Chad, nor statistics on passengers transported. Except for a few vans and covered pick-up trucks, freight trucks double as passenger vehicles.

3.06 The Cooperative des Transporteurs Tchadiens (CTT), a Chadian association of truck owners, has a monopoly of all internal and external public road transport activity in Chad, except for the domestic transport operations of a number of semi-public and Government agencies such as COTONTCHAD 1/. Smal:L shipments on domestic routes are de facto not controlled by CTT. CTT has 350 active members who own about 660 vehicles with an average age of 6-7 years; 65% of the CTT members own only one truck while only 7% own five or more vehicles. Each member manages his own operations, while CTT allocates freight, bills customers, and pays the vehicle owner. When necessary, CTT provides working capital in the form of advances to purchase fuel and helps finance the purchase of new vehicles. For these services CTT charges its members a commission equal to 10% of the freight transport cost. CTT is a financially autonomous private enterprise supervised by DT, and its director general is nominated by the Government. There is no restriction on vehicle imports or entry into the industry, although a licensing system exists.

3.07 A number of factors have impeded the efficient development of the trucking industry. The lack of coordination among shippers, carriers, and transport intermediaries and an imbalance between exports and imports has resulted in low truck fleet utilization (around 50% load factors) and high unit costs. The regulated road transport tariffs, established in 1974, have not kept pace with the escalating cost of transport. Except for a few routes, transport tariffs are lower than transport costs, under assumption of modern business practice. Liberal import policies, coupled with drought relief programs, have resulted in excessive vehicle imports in recent years, while sufficient attention is not paid to the maintenance of the truck fleet.

3.08 The proposed project aims at improving the efficiency of the trucking industry by providing technical assistance to existing institutions. On the regulatory side, the institutional support to DT (para. 4.11) would prepare it to undertake normal regulatory functions of the road transport industry and carry out basic planning studies aimed to improve the overall efficiency of

1/ COTONTCHAD is a semi-public company which has the monopoly for processing and marketing cotton, as well as the transport of seed cotton from field to ginnery, in its own fleet of 300 trucks. -8-

the transport sector. On the operational side, the technical assistance to CTT (para. 4.12) would help to improve its transport operations especially in the areas of centralization of freight transport demand, freight allocation, and coordination among shippers, truckers, and transport intermediaries.

3.09 Maximum authorized gross vehicle weight limit in Chad is 38 tons with a maximum single axle load of 13 tons, following the French practice. The movement of heavy vehicles on unsurfaced all-weather roads is forbidden during, and for a few hours after, a heavy rain. The enforcement of traffic reguLations is lax due primarily to a lack of funds and trained personnel. With the provision of portable weighing scales under the proposed project, enforcement of weight regulations is expected to improve. Regulatory functions fall under the purview of DPW's Service of Mines, which inspects and licenses vehicles, and the Gendarmerie, which is responsible for enforcement of traffic regulations.

D. Administration

3.10 DPW, responsible for about 4,600 km of primary roads and about 2,700 km of seconclaryroads, also covers buildings and hydraulics. A fifth subdivision will be created under the project. DPW has central services at headquarters and four regional subdivisions. DPW's organization (Exhibit I) is adequate to maintain the roads under its authority, but is in need of improvements in some offices, additional training for its staff, and improved workshop facilities and equipment.

E. Staffing and Training

3.11 Except two, all DPW executive personnel are Chadian. Division and subdivision chiefs are foreign trained graduate engineers, while middle-level personnel have received training in local technical schools. Staffing will improve in 1978 as the proposed DPW budget provides for the hiring of two additional engineers and more than ten middle-level technicians. FAC is providing 14 technical assistance experts to DPW under a long-term agreement with the Government. Training of skilled personnel was initiated in 1970 with USAID assistance. Under the ongoing Second Highway Project, a training program is being implemented for several categories of skilled personnel. To consolidate the results of this program and assure the training of skilled personnel required for the road maintenance program, the proposed project also includes a training program (paras. 4.05-4.06).

F. Planning

3.12 Until now, road planning has been carried out on a pragmatic, project-by-project basis, but with insufficient attention paid to economic con- siderations. Although DPW's SHO is responsible for basic road planning, it has been hampered from undertaking planning activities by lack of personnel, equipment, and funds. To rectify this situation, the Government intends to strengthen its SHO:; the road section of this office would become a Road Planning and Design Office (RPDO, Exhibit I). RPDO would carry out basic highway planning and engineering studies, evaluate road projects, and supervise road construction. Furthermore, RPDO would collect and process data for -9-

economic analysis of proposed road investments; this would help to establish road investment priorities on criteria which take account of economic consid- erationis.

G. Financing

3.13 Annual Government revenues from road users averaged about CFAF 1.1 billion (US$4.4 million) during 1971-75, contributing about 8% to total Government receipts, with about 45% derived from fuel taxes (revenue source for the Road Fund); 45% from custom duties and other taxes levied on import of vehicles, spare parts, and lubricants; and 10% from registration, license, and vehicle inspection fees (Table 8). Total annual highway expenditures (capital and recurrent) during this period, including external assistance for construction, purchase of equipment and technical studies (Table 3) averaged about CFAF 1.0 billion (US$4.1 million). As such, road user charges were commensurate with the Government's financial outlays in the road transport sector.

3.14 Capital expenditures on roads during 1971-75 totaled about CFAF 3.2 billion (US$13.1 million), while expenditures for road maintenance during the same period amounted to about CFAF 1.9 billion (US$7.8 million). About 63% of total expenditures, primarily capital investments, was provided through external financial assistance, IDA accounting for about one-half of the external financing. The remaining amount (37%), averaging about CFAF 380 million per annum, consisted of Government expenditures for administration and maintenance of roads and ferries (Tables 8 and 9).

3.15 The road maintenance budget prepared by DPW is reviewed by the Ministry of Finance and finally approved by the Council of Ministers. Road maintenance expenditures are financed from different sources: the national budget, the Road Fund, and external donors. The national budget normally finances administration expenditures, building maintenance, and salaries of permanent road maintenance personnel. The Road Fund finances other recurrent road maintenance costs and salaries of temporary personnel. External donors have financed capital expenditures and recurrent costs of ad hoc maintenance projects (e.g. Fonds Europeen de Developpement (FED) and Unitd States Agency for International Development (USAID) for drought relief roads, FED for paved roads, IDA for the Second Highway Project).

3.16 Although legislation establishing the Road Fund stipulates that taxes on gasoline and diesel oil (currently CFAF 18.5/liter on gasoline, and CFAF 1L6/literon diesel oil) be earmarked for the Road Fund and deposited in a special account in the Treasury separate from general revenue, only about 50% of the estimated fuel taxes were deposited in the Road Fund prior to 1976, in the form of an annual budgetary allocation. In 1974, as a credit condition for the Second Highway Project, the Government agreed with the Association to deposit fuel taxes and ferryboat tolls, earmarked for the Road Fund, in a special account to be opened in the Central Bank. This condition, however, could not be met by the Government as its already impaired fiscal situation was dealt a further blow by rampant inflation during 1974-75, causing severe budgetary strains. In 1976, for the first time, the Government earmarked all fuel tax revenues to the Road Fund (still within the Treasury) and used these funds for road maintenance and related activities. In May 1978, the Govern- ment issued a decree which modifies the original law establishing the Road - 10 -

Fund. This decree provides for (i) the opening, as of June 1, 1978, of a special account for the Road Fund in the Banque Tchadienne de Credits et Depots (BTCD), and (ii) the deposit in the account of Road Fund revenues.

3.17 Budget allocations for road maintenance increased during 1970-72, and then decreased, in real terms, until 1975 (Table 9). These allocations were minimal when compared with total requirements, estimated at about CFAF 785 million in 1975, against expenditures of CFAF 220 million, and were a major cause of the reduced road maintenance output. At times, available funds were just sufficient to provide for salaries of personnel and purchase of some fuel. During project implementation, Road Fund revenues (CFAF 450-500 million per annum) are expected to cover recurrent expenditures, excluding equipment depreciLation and taxes other than fuel taxes for the proposed road maintenance program, maintenance of ferries, and other ongoing road maintenance and improvement projects (paras. 3.20 and 3.21). It is estimated that routine maintenance of the entire road network of about 7300 km, including equipment depreciation and all taxes, would require about CFAF850 million (US$3.5 million) annually, iLnend 1977 prices. The proposed road maintenance program, however, has been tailored to the expected availability of recurrent maintenance funds over the four years of the project for all ongoing road maintenance and improvement projects (para 4.24).

H. Engineering and Construction

3.18 Minor engineering studies are carried put by DPW's Studies and Hydraulics Office (SHO), which also supervises construction works, while all major roads are designed by foreign consultants under DPW's supervision. Design standards are selected on a project-by-project basis as there are no official design standards for roads. RPDO, to be established under the proposed project, would define these standards for different categories of roads. Facilities for soil and materials testing are available at the Ecole Nationale des Travaux Publics (ENTP) laboratory in N'Djamena. Improvement and reconstruction of limited sections of road are carried out by force account, as domestic contractors are not yet available for undertaking these civil works. Major road construction projects are executed by foreign contractors and supervised by foreign consultants under DPW's overall charge.

I. Road Maintenance

3.19 Road maintenance is carried out by four DPW subdivisions located in N'Djamena, Abeche, Sarh and Moundou. The subdivisions are divided into road sectors, each with jurisdiction over a part of the subdivision's network, but the sectors exist only on paper because of lack of offices, funds and equipment. Minor equipment maintenance is carried out in the small subdivision workshops, while heavy repairs are executed in DPW's central workshop in N'Djamena. Since the area covered by the Abeche subdivision is vast, the Government indicated that it was considering the establishment of a fifth subdivision in Mongo. This would permit more efficient equipment utilization, as much time is now spent in transporting equipment. Funds are therefore included in the project to provide the necessary facilities for the additional subdivision (para. 4.04). - 11 -

3.20 Under the (First) Highway Maintenance Project, DPW was able to increase the maintained network from about 1,800 km in 1970 to about 2,800 km in 1972, but with no equipment renewal since 1972 and recurrent maintenance expenditures averaging about CFAF 220 million p.a., the maintenance output graduaLly decreased to an estimated 1,800 km in 1976. Periodic maintenance (regravelling), economically justified for about 400 km of roads, should be carried out as soon as possible to avoid further deterioration of roads and the loss in invested capital. Other than the proposed maintenance program for unpaved roads, United Nations Sahel Office (UNSO) has undertaken a road improvement and maintenance program for 470 km of unpaved secondary roads and tracks in the Sahel, to be executed over a seven-year period at an estimated cost of US$14.4 million.

3.21 Chad's three paved roads, totalling 253 km, were constructed between 1969-73 under FED financing. Owing to lack of adequate maintenance, some sections of the N'Djamena-Guelengdeng (157 km) and N'Djamena-Massaguet (85 km) roads have deteriorated to the point where reconstruction of the pavement is required. At the Government's request, FED has agreed to finance capital and recurrent costs of about CFAF 750 million (US$3.1 million), for the deferred maintenance and rehabilitation of paved roads, over a two-year period (mid 1978-mid 1980). The Government would pay salaries estimated at about CFAF 53.6 million (US$0.2 million) in end-1977 prices. The equipment procured under the FED program would be used for routine maintenance of paved roads after completion of the program.

J. Improvement of Feeder Roads

3.22 The Government, with the assistance of the Association (Second Highway Project and Rural Projects Fund), FED, and bilateral aid agencies has made considerable efforts to improve feeder roads in the cotton zone in the south-eastern part of the country. The Government's objective of producing 200,000 tons of cotton per year by 1980 (compared to 175,000 tons in 1976-77) would require additional cultivation of about 50,000 ha, with related need for feeder roads and probably some connecting secondary roads. Rural roads are also required in support of development projects, in other parts of the country, namely: (i) Lake Chad polders area where the Lake Chad Polders Project (Credit 592-CD) is in progress; (ii) the Lake Fitri area; and (iii) irrigated perimeters along the Chari River under the Rural Projects Fund. A study to define rural road needs and establish implementation priorities for these roads is included in the project (para. 4.13). This study will cover all development areas except the Moyen Chari region, for which a separate Swiss-financed study is envisaged.

K. Domestic Contracting Industry

3.23 The domestic contracting industry is at an early stage of development. About 15 contractors deal mainly with building construction, although an additional number of small contractors carry out building repairs and other minor works. The Government is trying to set up a contractor registration system based on information furnished by the contractors. This operation is being carried out with the assistance of the Office for Industrial Promotion - 12 -

supported by UNIDO. Government efforts to identify domestic contractors should be encouraged and expanded to (i) estimat present and projected demands of the civil works sector, and (ii) study the present structure, capacity and competence of the domestic contracting industry and make recommendations for its improvement, including financial assistance. The possibility of this study being carried out under UNDP financing is being explored and the Gov- ernment will be kept informed of the outcome.

L. Appropriate Road Maintenance Technology

3.24 The proposed project includes appropriate labor-based maintenance methods, as a substitute for routine road maintenance solely dependent on equipment (para. 4.03). For regravelling operations, a comparative analysis by a Bank Group consultant, investigating labor-based construction methods, showed by using data obtained from the Sategui-Deressia Irrigation Project (Credit 489-CD) that equipment intensive methods were more economical than methods employing a higher labor content due to the nature of regravelling operations (e.g. need of compaction), the long haul distances for construction materials, and the necessity to transport personnel to work sites.

4. THE PROJECT

A. Description

4.01 The proposed project would primarily support the Government's objective to improve road maintenance. The other main objective of the project would be to strengthen transport planning operations.

4.02 The proposed project consists of:

(a) a four-year road maintenance program for about 5,300 km of unpaved roads and tracks, including purchase of maintenance and workshop equipment and spare parts, and renovation and construction of workshops and office buildings;

(b) a training program for DPW personnel including a training/ production brigade for regravelling;

(d) technical assistance and fellowships to: (i) strengthen the Directorate of Public Works; (ii) provide planning support for Directorate of Transport; and (iii) improve the operations of the trucking industry;

(e) a study to prepare a rural roads project; and

(f) completion of the improvement and maintenance program for cotton feeder roads, started under the Second Highway Project. - 13 -

B. Road Maintenance Program

4.03 The proposed project supports the routine maintenance of approximately 5,300 km of unpaved roads and tracks, and periodic maintenance of about 400 km of main gravel roads (Table 10). Routine maintenance operationshave been tailored to maintenance standards compatiblewith the road type and level of traffic (Table 11). Other than mechanical grading, compaction,and tractor-drawndragging operations, 17 road gangs of 25 laborers each covering road sections of 100-200km under the direction of a sector chief, would be responsiblefor the maintenance of about 2,400 km of gravel and earth roads and tracks. Specific routine tasks carried out by the road gangs would include filling potholes, clearing ditches and culverts,maintaining shoulders and road furniture, and spot regravelling. For each sector, the project provides for an office with stores, hand tools, a small truck (2.5 tons) for transport of labor and materials, and a motorbike for the sector chief to supervise the maintenanceworks. Only mechanical grading (in most cases once a year), would be carried out on the remaining 2,900 km of tracks, the objective being to keep the tracks passable; of these, about 1,300 km would be subject to change from one year to another in accordancewith the Government's economic priorities. Periodic maintenance (regravelling)of about 400 km of relativelymore trafficked roads (over 45 vpd), would be carried out by a training/productionbrigade (para. 4.05). Economic design standards for regravellingcomprise a 6 m wide running surface, 0.5 m wide shoulders,and a 10 cm thickness.

4.04 The proposed project will provide maintenance equipment including an inLtial stock of spare parts, workshop equipment, and spare parts for re- pairing existing equipment (Table 12). About 40% of the equipment procured under the (First)Highway Maintenance Project, deadlined due to lack of spare parts, will be repaired and used in the execution of the proposed maintenanceprogram. The maintenance program also includes the construction of a garage for maintenance equipment; buildings for the equipment inspection office, the procurementoffice, and a spare parts store; and improvements to the central workshop, all in N'Djamena. In addition, a garage will be constructedand improvementsmade to office buildings and workshops in each of the existing four road maintenance sub-divisions,14 small buildings will be built to serve as administrativecenters for the road maintenance sectors, and offices, a garage and small workshop will be constructedfor the subdivision to be created in Mongo (Table 13). Agreement was reached with the Govern- ment at negotiationson: (i) the maintenance standards to be applied (Table 14); (ii) the core network of about 4,000 km to be maintained annually (Table 10); and (iii) sending to the Association,before October 31 of each project year, the following informationon the maintenance program for the subsequent fiscal year: (a) the list of minor tracks (about 1,300 km), other than the core network, and (b) the proposed regravellingprogram, including actual or estimated traffic on the proposed roads.

C. Training Program

4.05 The training program envisaged under the project will provide trained personnel for Chad's road maintenance and improvementworks in order to improve the productivityof road maintenance operations. Although only - 14 -

about 75 additional personnel at various levels within DPW are needed to implement the proposed road maintenance program, and other maintenance and improvement projects under FED and UNSO assistance, a total of about 225 mechanics, technicians, and equipment operators need to be trained to ensure efficient DPW operations (Table 15). This estimate allows for a drop-out and turnover rate of 30%. The training program would combine classroom instruction with field training, with greater emphasis placed on the latter aspect. A mechanized brigade will be used for field training, which, in addition to its training functions, is expected to regravel about 100 km of main roads per year. Given the importance attached to routine maintenance to be carried out by road sectors (para. 4.03), appropriate training in road maintenance practice for the sector chiefs is also included.

4.06 Specific project inputs for the training program include additional workshop equipment and teaching materials for the existing training center (established under the Second Highway Project); equipment for the training/ production brigade (Table 16); technical assistance (230 man-months) to implement the four-year training program, including the operations of the training/ production brigade; and operating expenses for the training program. About 20 fellowships will be granted to DPW personnel at all levels, to complement the training program. Provisions for a daily allowance during the training period (additional to the normal salary paid to DPW personnel) and cash prizes for outstanding trainees have been made in operating cost estimates, to serve as incentives to recruit new trainees and attract in-service DPW personnel from the distant subdivisions to participate in the program. The proposed training package under the supervision of expatriate technical assistance is the most cost-effective means of providing trained personnel in the Chadian context, since a major drawback of past training programs was the lack of adequate emphasis on field training. The Government agreed at negotiations to: (i) prepare, and submit to the Association for approval, a detailed traininrg curriculum by December 31, 1978 and (ii) assess, by December 31, 1979, future training requirements in consultation with the Association.

D. Construction of Ferryboats

4.07 The project includes the local construction of four ferryboats to replace the existing ferries at Bongor, Lai, Bousso, and Hellibongo, as limited traffic and wide river beds requiring long bridges make these struc- tures uneconomical. The proposed 50-ton capacity ferryboats (Annex III) would be able to carry the heaviest truck-trailer units plying the national roads (38 tons, with full payload). The shallow draft (50-55 cm) ferryboats would be identical in design, leading to standardization in construction (barges, ramps, decks) and future maintenance requirements (spare parts). The new ferrybqats are characterized by simplicity in operation with maintenance requirements kept to a minimum. The proposed project includes funds for the purchase of materials, workshop equipment, labor, preparation of detailed design and specifications, and technical assistance (about 16 man-months) for construction executions (Table 17). The ferryboats would be constructed under force account, at the DPW barge-yard, which has some experience in barge building. Additional skilled labor, however, will be needed to build the ferryboats within the project time schedule. Should all the necessary skilled labor not - 15 -

be available, construction of some ferryboats, in whole or in part, would be contracted to local mechanical workshops. The cost of locally built ferryboats, including the cost of workshop equipment and technical assistance, is estimated to be substantially lower than the cost of imported ferryboats, mainly due to reduced transport cost of disassembled building materials and less expensive local manpower.

E. Technical Assistance and Fellowships

4.08 Other than the technical assistance required for the execution of training program and ferryboat construction, additional technical assistance would be provided under the project to: (i) assist the Government in developing the necessary capability for equipment maintenance, execution of maintenance operations, and road planning; (ii) initiate transport planning on a systematic basis; and (iii) provide operational assistance to the trucking industry. The technical assistance is complemented by a total of about 30 fellowhips (including those mentioned in paras. 4.06, 4.10, 4.11 and 4.12) for training abroad so that a cadre of trained Chadian personnel is in place when the proposed technical assistance lapses. The selection of candidates for fellowships would be approved by the Association (Annex IV-C).

Strengthening of the Directorate of Public Works

4.09 Technical assistance (205 man-months) would be provided to set up an Equipment Inspection Office (EIO), centralize procurement functions in a Procurement Office (PO), and establish RPDO (para. 3.12). In addition, the project provides for furniture and equipment for these offices to ensure effective utilization of technical assistance. Portable weighing scales for control of vehicles axle loads are also provided.

4.10 EIO would implement a cost accounting system, supervise PO, and inspect equipment maintenance carried out by the sub-divisions. PO will be entrusted with procurement of spare parts and other materials required to maintain DPW equipment, and will also establish and maintain a central spare parts store with proper inventory and book-keeping procedures. The technical assistance for EIO and PO (180 man-months), comprising one mechanical engineer for EIO, one chief mechanic for PO, and four mechanics for the sub-division workshops, 1/ is expected to be in the field for about three years, and will assist in training Chadian staff. To further improve the professional capacity of in-service personnel (particularly the chiefs of workshops and mechanized units), about six fellowships for practical training abroad will be financed from project funds. Appointment of key qualified Chadian staff (one mechanical or road engineer, 2/ one chief mechanic, and three equipment controllers for EIO; and one procurement officer, and one forwarding officer for PO) to be trained by technical assistance specialists, will be a condition of credit effectiveness. To ensure effective operation of EIO, PO, and the workshops,

1/ One mechanic will supervise the Abecht and Mongo subdivisions.

2/ The Government agreed that this position will be filled with a mechanical engineer not later than October 31, 1979. - 16 -

appointment of key personnel (two mechanics, two accountants for EIO; one mechanic, one accountant, and three storemen for PO; five equipment fleet chiefs; and five subdivision workshop chiefs) will be a condition of disbursement for construction of buildings and improvement of workshops. RPDO will receive about 25 man-months of technical assistance (one engineer- economist) to help establish this office and train local staff to carry out basic road planning and engineering studies, evaluate projects, and supervise construction. The Government agreed at negotiations on the outline terms of reference for the proposed technical assistance (Annexes V and VI).

Institutional Support for the Directorate of Transport

4.11 The proposed project provides for the services of a transport economists for 30 man-months to organize DT and help with: (a) collection of transport data and publication of an annual report on transport statistics, and preparation of technical reports; (b) inter-departmental coordination for transport planning and road traffic regulation and enforcement; and (c) regulation of road transport industry. The Government should agree at negotiations on outline terms of reference for the technical assistance to DT (Annex VII). The expatriate transport economist would assist DT's local staff in their operational duties and train them to run DT with minimal external, assistance upon completion of his services. Funds for technical assistance, office equipment, furniture and supplies are included in the proposed project. The project also includes a fellowship for training in transport planning and operations. At negotiations, the Government agreed to appoint a suitably qualified Chadian to serve as a counterpart to the expatriate transporteconomist, and other local staff needed to permit the implementation of items outlined in Annex VII.

Operational Assistance to the Road Transport Industry

4.12 The proposed project provides for the services of a trucking industry expert (15 man-months) to assist CTT in improving its operations. Outline terms of reference for the proposed technical assistance (Annex VIII) were discussed and agreed at negotiations. The project includes a fellowship in transport industry operations and training abroad for CTT's assistant director responsible for transport operations.

F. Rural Roads Study

4.13 The Government wishes to improve rural roads in the cotton zone as well as in other areas of the country, including the Sahel. Accordingly, the proposed project includes a three-phase study of rural road needs in relation to rural development in selected areas. The first phase will (a) identify development areas in terms of economic potential and investment requirements, concentrating on transport and rural infrastructure needs, and (b) examine and report on basic and alternative institutional and manpower resources required to execute and maintain a possible rural transport/infrastructure project. The second and third phases will address detailed project description, economic analysis and engineering design under guidelines resulting from discussions between the Government and the Association following the first phase. This - 17 - study, requiring about 35 man-months over an eight-monthperiod, will also identify a long-term strategy for rural transport development and outline a program for the construction,improvement and maintenance of transport facilities. Outline terms of reference for the proposed consulting services (Annex IX) were agreed with the Government during negotiations.

G. Completion of the Improvementand Maintenance Program for Cotton Feeder Roads

4.14 The training program under the Second Highway Project has been extended to permit continuity between ongoing training activities and those envisagedunder the proposed project, resulting in a cost increase of about US$400,000. As funds from the Credit for the Second Highway Project were reallocatedto permit the extension of the training program, the ongoing program for the improvementand maintenance of cotton feeder roads under the same project would have to be reduced without additional financing. The proposed project will, therefore, finance this cost increase through the provision of capital and operating expenditures,to complete the improvement and maintenanceprogram covering about 760 km of cotton feeder roads.

H. Cost Estimates

4.15 The total capital cost of the project is estimated at about US$21.9 million, with a foreign cost of about US$18.4 million (84%). As in previous Bank Group financed projects, the Government would waive all customs duties and other taxes on project-relatedgoods and services, except taxes on fuel, which amount to about US$0.2 million. An insignificantamount of taxes on consumable items, procured from existing dealer's supplies, have not been identified separately. Recurrent expendituresduring the project period (1979-82)amount to about US$8.1 million equivalent,with a 51% foreign component of about US$4.1 million. Cost estimates reflect prices at end-1977. Detailed cost estimates, including physical and price contingencies,are given in Table 18 and summarized on page 18. During negotiations,the Government confirmed that (a) all contracts for goods or services to be provided under the project will be free of commercial taxes (taxe d'enregistrement,taxe sur le chiffre d'affaires, and similia); (b) the special quarry tax (OFCA, Office des Carrieres) will be waived with respect to constructionworks; and (c) materials, equipment and spare parts for road maintenance equipment, including that of the training unit, and constructionmaterials will be imported duty- free.

4.16 The cost of equipment and spare parts is based on consultant BCEOM's estimates, updated by the appraisal mission following a survey of local dealers. The constructioncost of buildings and workshops is based on the current cost per unit of similar works. The cost of technical assistance and consulting services is based on the cost of similar services rendered in Chad. The average cost per man-month of consulting services is estimated at about US$5,800, including social security,bonuses, annual leave, expatriation allowance, overhead and the firm's fees. Reimbursableexpenses, including air trips, airfreight, subsistenceand local allowances,field supervision, and vehicle purchase and operation, total about US$2,800/man-month. The foreign component amounts to US$7,350/man-month,or about 85% of the total cost. - 18 -

SUMMARY OF PROJECT COST ESTIMATES

1/ ll CFAF Million- US$'000- Foreign as Local Foreign Total Local Foreign Total % of Total

A. Base Costs (End-1977) l.TMaintenanceProgram_/ 216,6 1717.5 1934.1 884 7010 7894 89 2.TechnicalAssistance & Training for DPW 340.6 1246.9 1587,5 1390 5090 6480 79 3.Fellowships - 73,5 73.5 - 300 300 100 4.Constructionof 4 Ferryboats3/ 46.5 234.2 280,7 190 956 1146 83 5.Technicalassistance for Directorateof Transport 9,0 76,7 85.7 37 313 350 89 6.Technicalass$stance for Trupking Industry (30 man/months) 3,2 29.9 33,1 13 122 135 90 7.Completionof Feeder Road Improvement& MaintenanceProgram 41,2 66,6 107.8 168 272 440 62 8.Rural Roads Supply 7,3 66,2 73,5 30 270 300 90 664.4 3511.5 4175,9 2712 14333 17045 84 B. Contingencies* 1.Physical 62.4 321,2 383.6 255 1311 1566 2.Price 121 6 669.9 791.5 497 2734 3231 184.0 991.1 1175.1 752 AG45 4797 TOTAL F75 430276 5351.0 3464 18378 2187# RUN$DD 3500 18400 21900

About US$0.2 million of taxes on fuel are includedin items A. 2&3. The Governmentagreed to waive all other taxes,

SUMMARY OF RECURRENTCOST ESTIMATES-

l.UnpavedRoad Maintenance 892.7 879,8 1772T5 3644 3591 7235 50 2.FerryboatMaintenance &Operation 8475 123,5 208.0 345 504 849 59 TOTAL 977.2 1003.3 1980,5 3989 4095 8084 57 ROUNDED 4000 4100 8100

1/ Net of taxes, except taxes on fuel amountingto about US$0.2 million. 2/ Includesan insignificantamount of taxes. 3/ Includingcontingencies.

A Detailedbreakdown of cost contingencies: Phys$cal Price Contingencies Contingencies1976 1977 1978/79 1980/82 Equipment 5% 8% 7.5% 7.5% 7% Construction 10% 10% 9% 9% 8% TechnicalAssistance 10-15% 8% 7,5% 7.5% 7% Fuel 5% - sZ 5% 5% Labor 5% _ 5% 3% 3% - 19 -

I. Execution

4.17 MCWMG will execute the road maintenance program, the training program, and the construction of ferryboats through its DPW, and will supervise the technical assistance and fellowships provided for strengthening DPW (paras. 4.09-4.10), while MEPT would have responsibility for the administration of technical assistance and fellowship for DT and CTT, and implementation of the rural roads study. The project is expected to start in the second half of 1978 and be completed by end-1982; the project implementation schedule is given in Table 19.

4.18 Preliminary contacts with USAID indicate that this agency would be willing to let the Association approve the terms of reference for the services they would finance. Agreement will be reached with all cofinancing agencies to ensure the Association's involvement in all project components.

4.19 For the purpose of project monitoring, the Government agreed, at negotiations, to designate a project coordinator, acceptable to the Associa- tion, who will liaise with the Association on matters relating to the progess of the project. He will prepare and send quarterly progess reports to the Association in a format'to be agreed between the Government and the Associa- tion. Eventually, he will prepare a final report to serve as a basis for the preparation of a Project Completion Report.

J. Procurement

4.20 Construction and improvement of workshops and buildings under unit price contracts (totaling about US$1.8 million, before contingencies; highest expected contract price about US$365,000); and office furniture, equipment and supplies for EIO, P0, and RPDO (totalling about US$250,000, before contingencies), would be procured following local competitive bidding procedures, which permit participation of foreign contractors and suppliers. These procedures are acceptable to the Association, provided bids are opened in public. Bidders for construction and improvement of workshops and buildings will be prequali- fied. DPW will prepare bidding documents for and supervise construction of workship and buildings. Building materials for ferryboats, to be constructed under force account (about US$800,000), will be procured through international competitive bidding, in accordance with Bank Group Guidelines. A small quantity of con sumable materials and workshop tools required for ferryboat construction and office supplies will be purchased through local shopping, provided that the aggregate amount does not exceed US$60,000. Should DPW decide to subcontract the construction of some ferryboats or parts thereof to local workshops (para. 4.07), contracts would be awarded following local procedures acceptable to the Association. Materials, fuel and lubricants, and spare parts for the completion of the Cotton feeder roads improvement and maintenance program would be procured folloing local procedures acceptable to the Association. The services of consultants required for technical assistance to EIO, P0 and RPDO, ferryboat building, and the rural roads study (and/or any other services which would be financed by the Association) will be obtained following procedures and on terms acceptable to the Association. - 20

4.21 Road maintenance equipment, spare parts, and workshop equipment and tools financed by ADF would be procured following ADF procedures. Equipment and spare parts for the training program, inclu4ing phe training brigade, technical assistance for training, DT, and the trucking induptry, and fellowships, financed by USAID, would be procured in accord4nce vith USAID procedures. The signing of loan, credit, and/or grant agreepents with USAID and ADF, and fulfillment of conditions for initial disbursement under these agreements (except the effectiveness of IDA credit), would be a condition of credit effectiveness.

K. Financing and Disbursements

4.22 The capital costs, net of taxes, of the pToject would be cofinanced on a parallel basis by IDA (US$7.6 million), US4ID (US$9.0 million), and ADF (US$5.1 million), under separate agreements for qaq4 agency. These agencies would finance 100% of their respective sharqs qf project capital costs, net of taxes as shown below. In addition to f±4ancinp taxes included in project capital costs, amounting to about US$0.2 millton, phe Government is expected to provide US$8.1 million for recurrent cost* over the project period.

Project Financing Plan (In US$ thousands)

IDA U$AID ADF Government 1/ Total Maintenance Program - Equipment, spare parts, tools; 5086 5086 - Civil works; office furniture, supplies 2716 2716 Training Program 79 b 158 8134 Fellowships 345 345 Technical Assistance for: - DPW 2607 2607 - DT and Trucking Industry 642 39 642 Ferryboat Replacement 1527 1527 Rural Road Study 345 345 Completion of Feeder Roads Program 401 440 TOTAL 7596 8863 5086 197 21842 ROUNDED TOTAL 7600 9000 5100 200 21900 Percentage of Total Cost 34.7 41.1 23.3 0.9 100 (excluding taxes) (35.9) (41.5) (23.5) - (100)

1/ Unwaived taxes on fuel.

4.23 On the basis of the above financing plan, the IDA Credit would be disbursed to cover:

(a) 100% of total cost of building and workshop construction and improvements;

(b) 100% of total cost of technical assistance for DPW including office furniture, equipment, and supplies; - 21 -

(d) 100% of total cost of wages for local labor and locally procured materials for ferryboat building;

(e) 100% of total cost of consulting services for rural road study;

(f) 100% of total cost of constructionmaterials for the completion of cotton feeder road improvementand maintenance program; and

(g) 90% of the total operating cost for the completion of cotton feeder roads improvementand maintenance program.

An estimated schedule of disbursementsfrom the IDA account is shown in Table 20. Disbursementswould be fully documented. Disbursements for expenditures under (d) and (g) would, however, be made against certificatesof expenditure,the documentationof which would not necessarilybe submitted for review, but would be retained by the borrower and made available for inspection by the Association'ssupervision missions. The Government agreed at negotiationsto make arrangementssatisfactory to the Association for the audit of expenditurescovering disbursementsunder the latter procedure.

4.24 The Government is expected to bear the cost of: (a) taxes on fuel; (b) recurrent expendituresfor road maintenance (Table 23) and for maintenance and operation of ferryboats (Table 22); and (c) taxes on operating costs of cotton feeder roads improvement and maintenance program. On the average, about CFAF577 million (US$2.36 million) in Government funds, excluding equipment depreciation, would be needed annually to implementDPW's overall road maintenance (includingFED and UNSO projects) and ferryboat operations, equivalent to about 3-4% of the Government'stotal annual current expenditure during 1974-76. On the basis of available informationon present fuel tax revenues and conservativeestimates of future increase, the expected revenues for the Road Fund would average about CFAF510 million (US$2.1 million) annually, at the present level of fuel taxes. Permanent labor wages financed from MCWMG's budget would add about CFAF60 million (US$0.25million) per year to the maintenancebudget. Therefore, the total amount availablewould be about CFAF570 million (US$2.3 million) per year, permitting the Government to bear all recurrent expendituresfor road maintenance,except equipment depreciation (estimatedat about CFAF100 million, or US$0.4 million per annum). This assumes that all taxes, other than fuel taxes, would be waived (Table 23).

4.25 To ensure the availabilityof local funds for the project, the Government agreed at negotiations that it will: (a) establish and maintain adequate accounting procedures to record revenues to, and expendituresfrom the Road Fund account opened at BTCD; (b) earmark to the Road Fund and deposit in the separate Road Fund account the amounts collected from fuel taxes and ferryboat tolls; (c) establish in DPW's accounting office a sub-accountto allocate all road fund revenues to the project, except about 13% required for other road-relatedexpenditures outside the project; (d) maintain records adequate to record single and cumulative expendituresfor the project components it would finance; and (e) send to the Association every semester, - 22 - beginning January 31, 1979, a summary statement, as of June 30 and December 31, of (i) total revenues to the Road Fund; and (ii) expenditures incurred or committed for the project by category of disbursement.

4.26 As future requirements for local funds to finance recurrent costs of the project might change owing to higher than expected increase in prices of fuel, spare parts, and labor, and as financing the depreciation of road maintenance equipment must remain a long-term objective, the Government agreed at negotiations to review in consultation with the Association not later than December 31, 1979: (a) the amount of local funds required for project-related recurrent costs over the remaining project period; and (b) the feasibility of increasing Road Fund revenues to fully cover recurrent maintenance expend- tures including equipment depreciation.

4.27 The Government's lack of cash was a major problem in previous Bank Group-financed projects where Government funds were to be used. Delayed payment caused distrust among suppliers and slowed down project implementation. To avoid this situation, the project provides, immediately after Credit effectiveness, for an initial disbursement of US$100,000 into a project account to be opened by the Government at the Banque de Developpement du Tchad (BDT). This account would serve as a revolving fund to finance labor and the purchase of a small quantity of consumable materials for ferryboat building, and local procurement of supplies for the operation of EIO, PO and RPDO. The Associa- tion will replenish the project account from relevant categories of disbursement upon receipt of Government withdrawal requests accompanied by satisfactory evidence that expenditures were eligible for financing from the Credit fund. However, should any expenditure for which the Government requests replenish- ment of the project fund not meet this condition, the Government will be obligated to deposit the corresponding amount into that account. Assurances to this effect were obtained at negotiations.

5. ECONOMIC EVALUATION

A. Introduction

5.01 Development of a reliable and inexpensive transport network within Chad and assurance of dependable external links to ocean ports are of prime importance to Chad's economic development. As roads cater for about 85% of Chad's transport needs, the maintenance and improvement of the road network is a basic prerequisite for Chad's future economic growth.

5.02 The economic return on investments in road maintenance and renewal of ferries is quantified on the basis of savings in vehicle operating costs. Additional benefits accruing from reliable and improved accessibility to administrative and commercial centers, all-weather service on gravel roads, protection of past: road investments, and time savings have not been included.

5.03 As recent traffic data are not available, traffic on the road network (1978) was estimated by using 1969/70 traffic counts, adjusted by growth trends in the vehicle fleet and fuel consumption (para. 3.03 and 3.04), and the diversion of export traffic from the Transequatorial to Cameroonian routes. - 23 -

Beyond 1978, a traffic growth rate of 3% p.a. was assumed. Vehicle operating costs were derived by using the road deteriorationand user cost relationships developed under IBRD/TRRL research program in Kenya (Table 24).

5.04 Costs and benefits are calculated in CFAF, net of taxes, in December 1977 prices. As part of the analysis, shadow prices were used for valuing foreign exchange and labor (Table 25). The shadow price for foreign exchange is estimated at 15% above the official exchange rate of CFAF. Unskilled labor has been valued at 30% of the official minimum wage rate, while the shadow price of the skilled labor has been set at 15% above the ongoing market rate. The opportunitycost of capital in Chad is estimated between 10-12% p.a. The economic rate of return is estimated to be 75% for routine maintenance,costing UJS$8.4million (45% of total project cost excluding price contingencies), and L7% for regravelling,costing US$4.0 million (22% of total project cost). The combined rate of return for routine maintenance,regravelling and related training activities,costing US$14.7 million (79% of total project cost) is estimated at 51%. The rate of return for replacementof ferries, costing US$1.2 million (6% of total project cost) is estimated at 44%. The average economic rate of return for these components,which accounts for 85% of total project cost, is 50%.

B. Road Maintenance Program

5.05 The evaluation of the maintenance program followed a sequential procedure involvingselection and classificationof roads to be included in the maintenance program, determinationof the optimal maintenance strategy for each class of road, and the overall economic assessment of the maintenance program. As the road network has not been functionallyclassified, it was categorizedbroadly according to its engineeringand traffic characteristics. Road links were then selected for inclusion in the maintenance program (Table 10) on basis of the following criteria:

(i) support of economic activity, e.g. maintenance of vital cotton export routes, including connection to cotton ginneries;

(ii) maintenance of accessible road connectionsbetween regional, administrative,and commercial centers, and the national capital; and

,(iii) improved accessibilityto the drought-proneSahel zone.

5.06 An optimal grading strategy was then estimated for each road category by calculatingthe incrementalvehicle operating cost savings associatedwith more frequent grading operations,using the Bank's Highway Design and Mainte- nance StandardsModel (HDM), modified where necessary to reflect operational conditionsin the field (Tables 11 and 14). The analysis for periodic maintenance indicatedthat regravellingwas generally justified only on links with traffic of 45-50 vpd (Annex X). The economic return was calculatedby relating the incrementalcost of equipment and other project inputs to the corresponding incrementalbenefits from improved road maintenancebrought about during the economic life of the equipment (estimatedto average about eight years). - 24 -

Appropriate salvagevalue was assigned to inputs whose economic life was longer than 8 years or where equipment was used for less than its estimated economic life.

5.07 Project costs for the routine maintenance operation include capital expenditureson equipment, spare parts, workshop improvements,and related technical assistance as well as incremental recurrentmaintenance costs, while project benefits consist of vehicle operating cost savings resulting from improved road surface conditions. The incidence and magnitude of vehicle operating costs and related benefits, as a function of accumulatednumber of vehicle passes, and level of road maintenancewith and without the project are shown in Exhibits II and III for a gravel road and a track, respectively. Routine maintenance operations under the maintenance program are expected to yield an estimated economic rate of return of 75%, correspondingto a benefit/ cost ratio of 3.25 at a 12% discount rate. The benefits from regravelling consist of incrementalreductions in vehicle operating costs, additional to the reductions effected under routine maintenance.The incremental rate of return for regravellingoperations is estimated at 17%, correspondingto a benefit/costratio of 1.31, discounted at 12%. The combined economic return for routine maintenance,regravelling and related training activities,accounting for costs of routine maintenance,regravelling, and training, is estimated at 51%, equivalent to a benefit/costratio of 2.20 at a 12% discount rate (Table 26 and Annex X).

C. Replacement of Ferries

5.08 The present condition of the four ferries, to be replaced under the project, is generally characterizedby damaged hulls, extensive rusting, and frequent breakdowns. Their replacement is necessary to avoid severing the link to Cameroon via Bongor and closing the cotton ginneries at Kyabe, Am Timan, and Bousso. The Hellibongo ferry is critically important in maintaining administrativelinks between Sarh and the prefectures of Guera, Salamat, and Ouaddai. This ferry is frequently used to transport petroleum and mineral explorationequipment to northern Chad. Similarly, future development of irrigatedperimeters around Bousso would be contingent upon reliable access to the main N'Djamena-Sarhroad via the ferry.

5.09 The project will provide for larger ferries, capable of accomodat- ing 38 ton truck-trailerunits, resulting in significantvehicle operating cost savings through diversion of traffic (mainly cotton) to shorter routes and the replacementof small six ton trucks with semi-trailerand truck-trailer units. Other benefits include savings in handling costs, and savings in maintenance and operating costs of the ferries. An additional unquantifiableben- efit is the developmentof domestic capability to constructbarges. The economic analysis assumes a five-year remaining life for existing ferries except for the Hellibongo ferry, which is assumed to continue providing service after additional renovation. The new ferries are expected to have an economic life of 25 years with a 10% salvage value. Project costs include ferryboat construction costs, and expendituresfor design and technical assistance. Based on these assumptions,the economic return for the replacementof ferries at Bongor, Lai, Bousso and Hellibongo is estimated at 60%, 44%, 27%, and 31%, - 25 - while first year benefits are estimated at 48%, 43%, 11%, and 24% respectively. The overall economic return for this project component, including all four ferries, is 44% (Table 26 and Annex X).

D. Distributionof Benefits

5.10 Cotton and related production inputs, fuel, sugar, and beverages, constitute the primary products transportedby road. As the tariffs for internationaltransport of cotton are negotiated annually between COTONTCHAD and CTT, it is expected that COTONTCHAD and CTT, together with Cameroonian transporterswho claim a fixed quota of Chadian transport demand, would be the principal beneficiariesof improved road maintenance. For the farm-to-ginnery transport of seed cotton, however, COTONTCHAD would be the initial beneficiary, with benefits then accruing to the Caisse de Stabilisationdu Prix du Coton. These benefits would in turn be shared between the government and cotton producers according to the Government'sagricultural pricing and subsidy policy, which is reviewed annually. As part of the benefits are expected to be passed on to the producer, further expansion of agriculturaloutput and generated traffic could materialize.

5.11 In case of other freight transport (about 55% of the total freight transportdemand), most of the road user savings are likely to pass to the truckers since the regulated transport tariffs are not sensitive to changes in road user costs. User cost savings passed down to automobile owners would be relatively inconsequential,as personal transport constitutes a small portion of the traffic activity (5% or less). Relative to passenger transport,improved road quality is likely to result in lower passenger fares and more comfortable travel consideringthat trucks double as passenger vehicles, and there are no fixed passenger transport tariffs. The road maintenanceprogram includes about 1,300 km of tracks in the drought-proneSahel zone. These tracks would provide improved accessibilityto the Sahel Zone for better hus- bandry of its livestock and agriculturalresources. This would also ensure that lines of communicationremain open for transport of food and relief supplies during periods of drought. The beneficiarieswould be the poorest and most vulnerable segments of the Chadian population.

E. Project Risks and SensitivityAnalysis

5.12 Since approximately1,000 km of the proposed road maintenanceprogram are located in areas subject to political unrest, there is some chance that the envisaged road maintenance might not be implementablein these areas. Similarly,aggravation of the general economic situation could constrainthe availabilityof road maintenance funds. More specific risk elements concern increases in project costs and shortfalls in the projected output of technical personnel under the training program, with attendant repercussionson efficient equipment utilization,and maintenance productivity. Even if routinemaintenance activities are confined to the most secure regions of the country with maintenanceoutput reduced to 3,500 km per year, this project componentwould have an economic return of 66%. If the training program fails to produce sufficient personnel to expand maintenance operations or if a shortage of funds limits road maintenance to present levels (1,800 km), routine maintenance is estimated to yield an economic return of 28%. The economic return was found - 26 -

to be relatively insensitive to reduced equipment life as well as shadow pricing of foreign exchange and labor. With respect to the regravelling operation, a 20% reduction in the annual regravelling output would lower the economic return from 17 to 14% (Table 26). Even if regravelling output drops below 8Q km/year, the operation of the training/production brigade remains justified in terms of its institutional and training benefits.

5.13 Relative to ferries, the major project risk concerns delays in the construction of ferryboats, which could result in a fewer number of ferries being built. If only two ferries were constructed rather than the four envisaged under the project, this project component would still yield a return of 32%. A 20% increase in the cost of this component would reduce the economic return to 38%, while a 5% increase in benefits would increase it to 46% (Table 26).

6. AGREEMENTS REACHED AND RECOMMENDATIONS

6.01 During negotiations, agreement was reached with the Government on the following items:

(a) provision of allowances and prizes as incentives for parti- cipants in the training program (para. 4.06);

(b) appointment of a Chadian counterpart to the expatriate transport economist and other local staff in DT (para. 4.11);

(d) financing arrangements for the project, including cofinancing by external donors (paras. 4.22 and 4.23) and local cost financing (para. 4.25); and

(e) outline terms of reference for: (i) the training program (Annex II); (ii) strengthening DPU (Annex V); (iii) reorganization of RPDO (Annex VI); (iv) instructional support for DT (Annex VII); (v) operational assistance to CTT (Annex VIII); and (vi) the Rural Roads Study (Annex IX).

6.02 During negotiations, the following items, detailed in the Plan of Action (Annex IV) were agreed upon with the Government and incorporated as covenants in the Credit Agreement:

(a) road maintenance standards and the road network to be maintained and/or regravelled each project year (para. 4.04);

(b) preparation and transmission of training curriculum to the Association; and reassessment of training requirements during project execution (para. 4.06); - 27 -

(d) designation of a project coordinator to: (i) liaise with the Association on progress of the project; and (ii) prepare quarterly progress reports and, finally, a project completion report (para. 4.19);

(e) procurementprocedures (paras. 4.20 and 4.21);

(f) arrangementssatisfactory to the Association for the audit of expendituresunder para. 4.23 (d) and (g) (para. 4.23);

(g) procedures to ensure the availabilityof local funds for the project (para. 4.25);

(h) review by December 31, 1979, with the Association: (i) the amount of local funds required for project recurrent costs; and (ii) the feasibilityof increasingRoad Fund revenues to cover the total road maintenance recurrent expenditures (para. 4.26); and

(i) the opening, utilization and replenishmentof the special project account (revolvingfund (para. 4.27).

6.03 Conditions for Credit effectivenesswould be the following:

(a) appointmentof key Chadian technical staff to EIO and P0 (one mechanical engineer, one deputy mechanical engineer, and three equipment inspectors for EIO; one procurement officer and one forwarding officer for P0) (para. 4.10); and

(b) signature of loan, credit and/or grant agreementswith USAID and ADF, and fulfillment of conditions for initial disbursement, if any, under these agreements,except the effectivenessof the IDA Credit (para. 4.21).

6.04 A condition of disbursementfor constructionand improvementof buildings and workshops would be the appointmentof: (i) two mechanics and two accountantsfor EIO; (ii) one mechanic, one accountant,and three storemen for P0, (iii) four equipment fleet chiefs; and (iv) four subdivision workshop chiefs (para. 4.10).

6.05 Following satisfactoryagreements reached on the above items, the proposed project is suitable for a Credit of US$7.6 million equivalentto the Government of Chad on standard IDA terms. CHAD

THIRD HIGHWAY PROJECT

Principal External Trace Corridors

Length Total No. of Average Route Section Road Rail River Length Transfers Trariait Practicability Remarks (km Time 1. The Nigerian Routes No transfer needed for some fuel transport; a) Lagos (Apapa)-NDjamena Lagos-Maiduguri - 1790 - 1790 (2040 high risk of loss and breakages; long km) Maiduguri-NDjamena 250 - - 250 1 port delays in Lagos and Port Harcourt; (road-rail) 2-3.1/ All-year difficult custom procedures; b) Fort Harcourt-NDjamena Port Harcourt_Maiduguri different - 1445 - 1445 weeks (1690 road regulations; carried about 32% km) Maiduguri-NDjamena 250 - - 250 of total estimated freight tonnage in 1977. 2. The Cameroonian Routes Relatively simple administrative and a) Douala-NDjamena Douala-N'Gaoundere - 932 - 932 custom procedures; same monetary zone; (1717 km) N'Gaoundere-NDjuamena 785 3 - 785 (1717kin) N'Gaoundere-NDjamena785 - - 785 comparatively secure and reliable; ~~~~~~~~~~~~~someproblems relative to priority 1 2-3 All-year accorded to Chadian goods b) Douala-Mondou Douala-N'Gaoundere - 932 at Douala; - 932 (road-rail) weeks carried approximately 48% of total (1674 km) N'Gaoundere-Mondou 742 - - 742 estimated freight tonnage In 1977. 3. The Transequatorial Routes a) Pte. Noire-Mondou Pte. Noire-Brazzaville - 515 2| 515 Long transit time with associated (2450 km) Brazzaville-Bangui - - 1300- 1300 risk of loss,wastage and thefts; Bangui-Moundou 635 - - 635 3/ Poor condition of roads in CAE m 2 4-6- 6-8 b) Pte. Noire-Sarh barges can carry a full load on the Pte. Noire-Brazzaville - 515 - 2 515 (road-river-rail) months months Obangui only from August-December, a (2450 km) Brazzaville-Bengui - - 1300- 1300 period when road access to Bangui is Bangui-Sarh 635 - - 635 in its worst condition; carried about 12% of total estimated freight tonnage in 1977. 4. The Benoue Routes a) Burutu-Mondou Burutu-Garoua - - 1550-/ 1550 (1982 km) Suitable for bulk commodities; Garoua-Mondou 432 - - 432 long waiting time at Nigerian ports 4 b) Burutu-NDjamena 1 4-5 Benoue River of Wari and Port Harcourt; carried Burutu-Garoua - - 1550-/ 1550 (road-river) weeks navigable approximately 6% of estimated freight (2032 km) Garoua-NDjamena 482 - - 482 2-3 months tonnage in 1977.

5. The Sudanese Route Poor condition of road between AbechP Abeche-Port Sudan Abeche'-Nyala 570 - - 570 (2623 kin) and Nyala; relativ iY e nt Nyala-Port Sudan - 2053 - 2053 1-2 -All-year Sudan Railway; carried about 2% of (road-rail) estimated freight tonnage in 1977.

6.~ ~~ ~ ~ ~ ~ ~ 6. The Libyan Route

NDjamena-Tripoli NDjamena-Tripoli 3000 - - 3000 - - Through difficult and mountaneous NDjamena-Tunis NDjamena-Tunis 3000 - - 3000 - - (3000 km) terrain; politically troubled area.

1/ Does not account for excessive port delays; 2/ Via Oubangui River; 3/ As a result of storage of goods in Bangui during the dry season, when river 4/ Via Benoue River. navigation is not possible. SOURCE: Bank mission. -29- Table 2

CHAD

THIRD HIGHWAY PROJECT

Public Sector Investments

(in percentage and CFAF billion)

1967-68 1969-70 1971-72 1973-74 1975

Agriculture 16.8 15.1 18.4 27.1 52.8

Industry 4.3 2.1 3.1 4.4 4.9

Transport & Communications 44.0 32.1 14.5 11.2 5.8

Health - - 3.8 4.9 2.9

Education 9.8 6.3 1.9 4.5 6.1

Community & Social Services 11.8 16.5 18.1 35.2 17.7

Unspecified 13.3 27.9 40.2 12.7 9.8

TOTAL 100.0 100.0 100.0 100.0 100.0

Total in billions of CFAF 3.5 4.5 4.6 7.1 9.9

As % of GDP 5.4 6.1 5.6 8.2 9.2

Source: Republic of Chad, Economic Memorandum, World Bank Report No. 1340-CD, June 30, 1977. - 30 - Table 3 CHAD

THIRD HIGHWAY PROJECT

ExternalAssistance: Transport Sector

(CFAF Million)

1971 1972 1973 1974 1975 1976 Total

A. FAC

Mondou Bridge Repair - 135 28 6 35 4 208

Drought Roads - - - 30 39 65 134

N'Djamena Airport _- - 18o0/ 180 (Runway Strengthening) B. FED 2/ N'Djamena-GuelendengRoad 689 - 26 - - - 715

Mondou-GidjibaStudy - - 40 30 4 - 74

Mondou Airport Road - - 4 127 189 120 440

Bongor-LaiStudy - - 27 85 20 - 132 3/ N'DJamena-MassaguetRoad - - - 69 62 7 138 . / Ea-Illi Bridge - - - 5 90 128 223

Cotton Roads(Drainage 192 21 7 _- - 220 Project) C. EEC

Drought Roads - 5 - 75 15 90 Urban Street Improvement(NDjamena)- - 145 145 D. UNSO (UnitedNations Sahel Office)

Road MaintenanceStudy - - - - 53 - 53

E. USAID

Maintihanceof Drought Roads- - - 25 92- 22 139 Opening of NavigationChannel - - 19 19 tetwaene ,oland Lake Chad F.'fiDA Credit 125-CDi} 422 123 226 145 8 '23 '947

Credit 490-CD - - - - 78 209 287

Total 1303 279 358 522 745 937 4144 1/ An additionalCFAF 140 million provided by ASECNA 2/ Prior to 1971, FED provided CFAF 1,905 million for this project 3/ Prior to 1971, FED provided CFAF 754 million for this project y/ Project to be completed in 1977 at a total cost of CFAF270.5million 5/ Funds obtained from proceeds of food sales under Aide Cgrgale 6/ An estimated CFAF 79 million for equipmentand spare parts 7/ CFAF58.5 million from the Credit used in 1969-70

Source: Directorateof Planning and Development,1977. - 31 - Table 4

CHAD

THIRD HIGHWAY PROJECT

Road Network (1977) (km)

------Subdivision------% of N'Dlamena Abeche Sarh Moundou Total Total

A. Classified Network 1/

National Roads (Primary)

1. Paved 242 - - 11 253 3 2. Gravel and Earth

a. Engineered 189 - 393 463 1,045 14 b. Partially Engineered 83 259 150 128 620 9 c. Non-Engineered 2/ 773 556 682 633 2,644 37

Subtotal 1,287 815 1,225 1,235 4,562 63

Prefectural Roads (Secondary)

Earth 588 1,008 612 499 2,707 37

Total 1,875 1,823 1,837 1,734 7,269 100

B. Unclassified Network 2/

Tracks 24,000

1/ The classified network represents roads that have been maintained from time to time by DPW and prefectural authorities, and is not based on a functional classified system.

2/ For all practical purposes, these may be considered tracks.

3/ The unclassified network represents an estimate of recognized or marked tracks.

Source: DPW, BCEOM. - 32 - Table 5

CHAD

THIRD HIGHWAYPROJECT

Traffic on Road Network to be Maintained by DPW

Road l.ink- Length Average Daily Trafii(ADTXI' (k.n) _Actual Projected 1963 1970 1978

A. All-weather Engineerad Roads

Paved - N'D.amena-Guelesgdeng 157 45 108 117 NH'Ra-ena-Maasaguet 85 33 48 52 Moundou-Kioutou 11 - - 100 Unpaved(Laterite)

Niellim-Guere 80 13 16 17 Guere-Doba 164 12 40 50 Maindou-La Sido 86 12 12 9 Pala-Kelo 107 25 39 55 Kelo-Moundou 104 27 38 49 Moundou-Baik-ro 20 - 45 56 Baikoro-Gore-CAE 110 15 17 16 Unpaved (Earth) Massaguet-Karne 53 17 12 13 Massaguet-Massakory 68 17 27 30 Massakory-Bir Garat'3 38 - 10 10 Chagoua-Linia 30 - 60 65 CGere-Sorh 27 - 56 63 Sar- Maindou 36 20 32 31 Pala-Lere-Cameroon 122 - 7 19 B. Par-tially Improved Roads

Unpaved (Laterite) Baikoro-Doba 79 21 37 47 Unpaved (Earth) Guelengdeng-Bongor 83 22 25 30 Abeche-Biltine 92 7 7 8 Abeche-Adre 167 12 8 10 Mogo-Miltou-Niellim 150 13 16 17 Magou-Lai 49 23 30 34 C. Earth Tracks

Mijar Karm;e-N'Goura 72 17 12 13 Bongor-Magou 99 23 30 34 C.elengdeng-Mogo 149 - 12 13 Guidari-Kou.ora 116 8 14 16 Kourvra-Mai.sala 74 11 13 14 Lai-Doba 108 14 16 18 Doba-Gore 95 18 14 10 Lai-Guidari 44 8 14 16 Moundou-Baibokoum-CAE 152 12 16 14 Lai-Kelo 60 12 21 24 K-aton-Bere 91 17 23 26 Kelo-Gounou-Gaya 52 - - 15 Sarh-Kyabe 98 9 10 10 Ati-N'Goura3/ 233 17 11 10 Minor Djeroaya-Djintilo 82 Couar-Bitkine 3 244 Bir Tarat-Moussoro-r 96 Linia-Massenya 127 Ati-3unHadjer 165 OueM8adjer-Abeche 146 Ati-Mongo 154 Bitkine-Mongo 59 MongD-Mangalme 118 Melfi-Bitkine 118 Estimated Traffic, 1978 Oohadja er-Mangalme 110 Mangalne-Ab-odeia 123 Under 10 vpd. Kyabe-Am Timoa 259 Am T:iman-Aboudeia 135 Moisoala-Kendere 125 Gounnu Gaya-Tikem 58 Pala--Fianga-Cameroon 83 Oulibangala-Pandzangue 15 Pala--Gagal-Beinamar 121 Bein.abar-Koatoo 3 90 Ati-ifenat / 63 Daokala-Y5a/ 3/ 39 Bir Garat-Moussoro 96 Melfi.-Dik 149

1/ Traffic projeotions are based on: (i) frem 1970-74, no traffic growth; (ii) froo.1975-78: (a) 3% traffic gro-th per ananu in Cotton Zone; (b) 1% traffic growth per amour in Sahel Zone; 6 (c) 2% traffic growth per annum around N'Djamena; and (iii) a diversion of 35-40,000 tons of international traffic fron Trans- equatorial to Cameroonian reate between 1970-74. 2/ Paved roads are not included in the Third Highway Project; their maintenance will be carried out under FED assistance. 3/ To be improved and maintained under UNSORoad Rehabilitation Program. Source: Mission eatimates. - 33 -

Table 6

CHAD

THIRD HIGHWAY PROJECT 1/ Growth of the Vehicle Fleet, 1970-76

1970 1971 1972 1973 1974 1975 1976 Annual Rate of Growth2 /

Motorcycles/Scooters 526 578 603 637 674 701 773 7%

Passenger Cars, Jeeps 4407 4765 4990 5560 5812 6058 6252 6%

Buses 100 126 134 137 144 152 159 8%

Pickup Trucks 3765 4202 4471 4745 4961 5145 5327 6%

Trucks 2345 2482 2648 2752 2907 3083 3165 5%

Special Vehicles 231 253 255 255 258 274 274 3%

Tractors 78 88 104 111 130 159 163 13%

Trailers 482 541 597 621 649 674 706 7%

TOTAL 11924 13035 13802 14818 15535 15545 16819 6%

1/ Inclusive of Government vehicles. 2/ The annual increase in vehicle fleet does not account for normal vehicle attrition.

Source: Directorateof Planning and Development; Mission estimates. CHAD

THIRD HIGHWAY PROJECT

Fuel Consumption, 1968-76 (m3 )

1968 1969 1970 1971 1972 1973 1974 1975 1976

Gasoline (regular) 15,880 16,441 16,359 16,994 14,957 13,662 9,327 12,063 10,074

Gasoline (super) 885 1,001 978 1,528 1,767 2,137 1,786 2,582 2,541

Kerosene oil 3,618 3,983 3,-069 2,956 2,890 2,304 937 986 1,432

Diesel oil 14,222 14,428 15,319 17,063 16,955 19,713 22,186 19,876 17,822 of which for Transport 1/ 4,333 3,461 3,529 3,395 2,461 2,971 5,703 3,476 1,368 Lo Aviation gasoline 7,350 7,420 11,730 10,567 7,374 7,034 6,769 6,770 3,513 Aviation kerosene 15,132 19,331 -24,79t3 23,144 26,714 31,942 / 23,175 16,413 32,245

Consumption 11 by road transport total consumption - consumption of diesel oil for power generation

2/ Large increase due to drought teliAef air lift.

Source: Bulletin de Statistiques, Republique du Tchad, 1969- 1976.

0m CHAD

THIRD HIGHWAYPROJECT

Government Revenues from Road Users, 1969-75

(CFAF Millions)

Year Fuel Taxes Custom Duties and Taxes Other Revenues Gasoline Diesel Oil Total Lubricants Tires Tubes Spare Automobiles Trucks Trailers Special Total Annual 1/ Licencing2/ Vehicle Total Parts Vehicles Registration- Inspection 1969 233.9 116.0 349.9 32.7 43.6 n.a. 40.9 n.a. n.a. n.a. n.a. n.a. n.a. 2.6 n.a. n.a.

1970 337.5 136.8 474.3 42.4 75.2 n.a. 40.6 n.a. n.a. n.a. n.a. n.a. 51.1 2.8 n.a. n.a.

1971 363.0 174.2 537.2 33.6 64.3 7.2 43.3 117.6 170.0 21.2 4.4 461.6 67.2 3.7 n.a. n.a.

1972 297.9 113.6 411.5 28.6 42.7 5.4 36.1 83.7 75.8 11.0 1.0 284.3 66.7 4.3 n.a. n.a.

1973 337.6 209.2-/ 546.8 25.0 41.5 8.2 32.1 106.3 125.3 10.2 0.4 349.0 69.0 22.0 2.0 93.0

1974 253.6 235.0 488.6 55.2 48.9 10.6 91.5 187.1 188.3 25.0 0.0 606.6 94.0 11.0 8.0 113.0 "

1975-41 195.1 120.0 315.1 41.7 74.8 7.9 71.3 99.2 190.4 30.7 0.6 516.6 85.05/ 12.7-Y 9.&$' 107.5

1/ Vignettes - Annual fees on vehicles. 2/ Licence fees derived from grey cards which are issued when vehicle ownership is transferred. 3/ Inclodes an exceptional tax of CFAF 8/liter on an estimated 16.7 million litres of diesel oil for powar plants. 4/ Figures for "Fuel Taxes" and "Custom Duties and Taxes" are for 9 months (Jan. - Sept. 1975) only. 5/ Figures for 1975 n.a. - Not Wvailable Source: a) Bureau of Customs b) Directorate of Mines c) Ministry of Finance -36- Table 9

CHAD

THIRD HIGHWAY PROJECT

Expenditures on Highways, 1971-76

Year Capital Maintenance 1/ Expenditure ActualExpenditures Budget Administration Total DPW Prefectural Allocation Authorities

1971 1303 188 40 (223) 137 1668

1972 279 244 40 (224) 132 695

1973 358 220 30 (225) 140 748 3' 1974 522 220 - (220) 148 890

1975 745 220 - (221) 154 1106 4/

1976 738 303 - (442) 144 1185

1/ Includes approximately CFAF50 million per year in wages for operational staff.

2/ During the period 1971-76, the capital expenditure on highways represents the total of external assistance for studies, construction and purchase of equipment.

3/ Maintenance of prefectural roads taken over by DPW in 1974.

4/ CFAF420 million were actually committed for maintenance of roads and ferryboats.

Source: Directorate of Public Works, 1977. - 37 - Table 10

CHAD

THIRD HIGHWAY PROJECT

List of Roads to be Maintained

Road Type - Traffic Volume/km ----- Engineered------Partially Engineered- Subdivision Laterite Sand/Clay Laterite Sand/Clay Tracks Total and Roads A B A B A A B C A B C

A. N'IDjamena North Massaguet-Massakory 68 68 Massapuet-llarne 53 53 Karme-N' Goura 72 72 Chagoua-Linia 30 30 Linia-Massenya 127 127 Djermaya-Dijimt1In.___ 82 82 98 53 72 453 676

B. N'Djamena South ruelendeng-Bongor 83 83 Bongor-Magou 99 99 Guelendeng-Mogo 149 149 83f 99 149 331

C. Abeche Abeche-Biltine 92 92 Abeche-Adre 167 167 Ati-Oum Had jer 165* 165 Osm Had jer-Abeche 146* 146 2i59 311 57-0

D. Mongo NConura-Bitkine 244* 244 At i-Mongo 154* 154 Bitkine-Mongo 59* 59 Mongo-Mangaime 118* 118 Melfi-Bitkine 148* 118 Oum Hadjer-Mangalme 110* 110 Mangalme-Abou Deia 123* 123 9q2-6 9§2-

E. Sarh Maindon-La Sido 86 86 Guere-Doba 164 164 Niellim-Guere 80 80 Guere-Sarh 27 27 Sarh-Maindou 36 36 Mogo-Miltou-Niellim 150 150 Me If i-D ik 149 149 Guidari-Koumra 116 116 Koumra-Moissala 74 74 Sarh-Kyabe 98 98 Kyabe-Ams Timan 259 259 Am Timan-Abou Deia 135* 135 Moissala-Kemdere _ 125 125 164 166 63 150 190 617 1,499

F. Moundou Pala-Kelo 107 107 Kelo-Moundou 104 104 Moundou-Baikoro 20 20 Baikoro-Gore-CAE Border 110 110 Pala-Lere-Cameroon Border 122 122 Baikoro-Doba 79 79 Magou-Lai 49 49 Lai-Bere 20 20 Bere-Kelo 40 40 Koutou-Bere 91 91 Lai-Doba 108 108 Lai-Guidari 44 44 Moundou-Baibokoum- CAE Border 152 152 Kelo-Gounou Gaya 52 52 Gounou Gaya-Tikem 58 58 Doba-Gore 95 95 Pala-Fianga-Cameroon Border 83 83 oulibangala-Pandzangue 15 15 Pala-Gagal-Beinamar 121 121 Beinamar-Koutou 90 90 231 110 122 79 49 507 462 1,560

Total 395 276 161 175 79 132 150 259 99 918 2,674 5,318

Traffic Volume (vehicles per day) A 30-60 B 10-30 C Less than 10

* Tracks subject to change in annual program.

Source: Mission estimates. - 38 -

Table 11

THIRD HIGHWAY PROJECT

Unpaved Road Maintenance Strategies

-----Engineered----- Partially Engineered Road Type Laterite Sand/Clay Laterite Sand/ClaY Tracks Traffic Volume A B A B C A A B .C A B C

Dry Grading 2 2 1 1 1 2 1 1 1 2 1 1 (frequency/year)

Grading-Compacting 1 1 1 (frequency/year)

EmSrgency Repairs 50 50 50 50 50 50 50 25 25 (m /km)

Light Maintenance 150 200 100 150 150 100 150 150 200 (cantonnage)(km/year x unit)

Dragging (frequency/year) 30 20 30

Traffic Volume (vehicles per day) A 30 - 60 B 10 - 30 C less than 10

Source: Mission estimates.

August 1977 - 39 -

Table 12

CHAD

THIRD HIGHWAY PROJECT

Road Maintenance Equipment and Spare Parts for Existing Equipment

Cost Estimates (US$'000, End-1977 prices)

TOTAL COST Foreign as Quantity Unit Cost Local Foreign Total % of Total

A. Road Maintenance Equipment

1. Bulldozer, 180/200 hp 3 145.4 30.5 405.7 436.2 2. Wheel Loader, 80/100 hp 4 63.5 17.8 236.2 254.0 3. Motorgrader, 120/130 hp 8 78.9 44.2 587.0 631.2 4. Towed Tank, Fuel, 5,000 1 7 14.4 7.1 93.7 100.8 5. Towed Tank, Wate5, 2000 1 8 5.8 3.2 43.2 4b.4 6. Motor Pump, 80 m /h 3 3.2 0.7 8.9 9.6 7. Liaison Vehicle, Pick-up 14 6.6 6.5 85.9 92.4 8. Liaison Vehicle, 4-Wheel Drive 9 9.9 6.2 82.9 89.1 9. Light Liaison Vehicle 6 4.9 2.1 27.3 29.4 10. Agricultural Tractor 70/80 5 17.9 6.3 83.2 89.5 11. Motorbike, 250 cc 20 2.8 3.9 52.1 56.0 12,,Dump Truck, 2.5 ton 20 14.3 20.0 266.0 286.0 13. Truck, 2.5 ton flatbed 2 13.2 1.8 24.6 26.4 1C, Labor Tools (sets) 16 2.7 3.0 40.2 43.2 15. Trailer with Mechanical Tools 5 15.9 5.6 73.9 79.5 16. Supply/Maintenance Truck 8 41.7 23.4 310.2 333.6 17. Workshop Truck 2 78.3 11.0 145.6 156.6 18. Management vehicle 1 9.2 0.6 8.6 9.2 19. Workshop mobile cranes 2 20.6 2.9 38.3 41.2 20. Electric transformer, 300 KVA 2 8.0 1.1 14.9 16.0 197.9 2,628.4 2,826.3 93% 21. Spare parts stock (10%) 19.8 262.8 282.6 217.7 2,891.2 3,108.9 22. Quantity contingency (5%) 10.9 144.5 155.4 228.6 3,035.7 3,264.3 23. Price variation (about 15%) 33.7 448.1 481.4

Total 262.3 3,483.8 3,746.1

B. Spare Parts for Existing Equipment 50.1 665.9 716.0

1. Quantity Contingency (15%) 7.5 99.9 107.4 57.6 765.8 823.4 2. Price Contingency 4.3 57.4 61.7

Total 61.9 823.2 885.1 93%

Source: BCEOM, mission estimates. - 40 - Table 13

CHAD

THIRD IIIGHWAYPROJECT

Construction of Buildings and Workshops

Cost Estimates (End-1977 Prices)

-----CFAF million------US$'000------Foreign as Local Foreign Total Local Foreign Total % of Total A. N'DJAMfENA

1. Equipment Division

a. Improvement of existing Workshop (1,500m ) 2 6.7 20.1 26.8 27 82 109 b. Procurement office (150 ) 2.9 8.5 11.4 12 35 47 c. Spare parts store (800m ) 2 8.1 24.1 32.2 33 98 131 d. Equipment inspection oVfice (200m ) 3.8 11.4 15.2 15 47 62 e. Equipment Garage (8002 ) 8.1 24.1 32.2 33 98 131 f. Transformer room (25m ) 3 0.2 0.8 1.0 1 3 4 g. Land preparation (7,000m ) 2 3.1 9.4 12.5 13 39 52 h. Roadways and aprons (10,OOOm ) 22.3 67.0 89.3 91 274 365 i. Fencing and gates 1.0 2.8 3.8 4 11 15 Subtotal 56.2 168.2 224.4 229 687 Y16

2. Road Maintenance Subdivision 2 a. Four road sector offices (4x200m ) 10.8 32.1 42.9 44 131 175 Subtotal A 67.0 200.3 267.3 273 818 1,091 75%

B. ABECHE

2 1. Garage Building (300m ) 2.0 6.0 8.0 8 24 32 2. Fencing (650 m) 0.9 2.7 3.6 4 11 15 3. Improvement of Existing Buildings 0.9 2.7 3.6 4 11 15 Subtotal B 3.8 11.4 15.2 16 46 62 75%

C. MONGO

1. Office Building (lOOm )2 1.7 5.9 7.6 7 24 31 2. Workshop Building (139m ) 0.8 2.4 3.2 3 10 13 3. Garage Building (300m ) 1.9 5.9 7.8 8 24 32 4. Fencing (650m) 1.0 2.7 3.7 4 11 15 Subtotal C 5.4 16.9 22.3 22 69 91 75%

1D. SARH

60 1. Garage Building ( 0m 22 4.0 12.1 16.1 16 50 66 2. Three Road Sector Buildings(3x200m ) 8.0 24.1 32.1 33 98 131 3. Improvement of Existing Buildings 0.9 2.7 3.6 4 11 15 Subtotal D 12.9 38.9 51.8 53 159 212 75%

E. MOUNDOU

6 1. Garage Building ( 00m ) 4.0 12.1 16.1 16 50 66 2. Seven Ryad Sector Buildings 16.8 56.3 75.1 77 230 307 (7x200m ) 3. Improvement of Existing Buildings 0.9 2.7 3.6 4 11 15 Subtotal E 23.7 71.1 94.8 92 291 388 75%

Subtotal A-E 112.8 338.6 451.4 460 1,382 1,842 75%

F. PHYSICAL CONTINGENCY (15%) 10.1 57.3 67.4 41 234 275

G. PRICE CONTINGENCY 31.1 110.7 141.8 127 452 579 78i,'

Source: DPW, BCEOM, Mission estimates. - 41 - Table 14

(CHAr

THIRD HIGHWAY PROJECT

Network to he Maintained and Maintenance Operations

…Engineered -- Partialiv Engineered Road Type Laterite Sand/Clav Laterite Sand/Clay Tracks Total Traffic Votiime A P A -B A A B C A B C

Dry Cradine a) 1. N'Djamena North 98 53 72 209 432 (kin) 2. N'Dijamena South 83 99 149 331 b) Abeche 259 311 570 c) Mongo 926 926 d) Sarh 164 166 63 150 190 766 1.499 e) Motindou, 231 110 122 79 49 ______507 462 1,560 395 276 161 T75 79 132 150 259 99 918 2,674 5,318

GradinF a) 1. N'Djamena North 98 53 151 Compacting 2. N'Djamena South 83 83 (ki) b) Abeche c) Mongo d) Sarh 63 63 e) Moundou 49 49 161 53 T32 346

Emergencv a) 1. N'Djamena North 4,900 2,650 1,800 1/ 9,350 Repairs 2. N'Djamena South 4,150 2.475 3,725 12,000 22,350 (m ) b) Abeche 12,950 12,950

c) Mongo 2/ d) Sarh 3.150 7,500 4,750 6,007,/21,400

e) Moundou 6,100 3,950 2,450 12,675 5,000 30,175 18,050 8,750 3,950 6,600 7,500 12,950 2.475 22,950 23,000 96,225

Tight Maintenance a) 1. N'Djamena North 98 53 72 223 (cantonnage) 2. N'Djamena South 83 99 149 331 (kh) b) Abeche c) Mongo d) Sarh 164 166 63 150 190 733 e) Moundoui 231 110 122 49 507 1,098 395 276 161 175 79 132 150 99 918 2,385

Brushing a) 1. N'Djam.ena North (km) 2. N'Djamena South b) Abeche c) Mongo d) Sarh 164 166 330 e) Moundou 231 110 79 420 395 276 79 750

1/ Bongor and Bouisso ferryboat access roads.

2/ Hellibongo ferrvboat access road.

3/ Lai ferryboat access road.

Traffic Volmne (vehicles per day) A 30-60 B 10-30 C Less than 10

Source: Mission estimates Table 15

THIR HIRCHAyPROJECT

0546Personnel Training Haaolse.menin

Trained or Personnel Traineng Available foe 4 Available rr TL Training by

6 ~ 0 s t r ar o >Et t7 _ p c L8 W c ^ 9 s txJ 43 = l~~~~~~~~~~~~~~~~~~~~~oosIRo-d °a C 9 b'4k t t T-n l R..dm a)cito e (hIt k X L o .' L Mit7an ' L (f) (g, bh ti ( j k) Ii) in) la) io) (p) (q)

1M-ehai-al - R.od oaineeg - 1 1I 1 1 - 2. Chief 1 nr-hanlo 1 I I 3, Eqaip-nn Controller 3 3 3 3 1 1 2 3 3 4, Suhoiolnior FlPn Chief I I 1 5 5 5 5.neohanioaiiaxpenr 5 5 2 1 3 3 3 3 4 4 -; 6. isotarChief 5 3 5 2 17 17 17 13 13 4 17 _ 13 . BHigade 4 Chief 4 1 5 5 1 2 3 8 8. B 2 8 Wp It,e Cief 10 2 12 12 6 28 0o 15 146 9.Cbiefbeoheeio 4 i 12 8 7 2 1 10 6 6 1i 1 1 2 18 4 14 2 16 10. lineal Neohanir 13 10 8 2 2 14 6 6 3 1 1 3 4 12 32 2 3 5 31 43 41 II. HeoOaeif 24 33 57 0 18 6 6 6 6i 10}_ 3 4 12. M-hanla Forenar (C-ntePait-re) 3 3 3 13 Workshop 6 3 3 Chief I I II 1 5 5 5 3 3 2 14. MNhrania Help-r/ 5 Greener 24 4 6 ' 34 3 1 1 3 3 11 45' 4 7 11 5f 5 55 60 .4 26 SI 35 21 15. Buildoapr Operator 4 2 3 9 9 4 4 1 9 10 3 16. Lander Operator, I 3 3 11 I 2 4 6 13 17. Grader Operator 16 3 8 9 8 i2 3 27 23 5 5 22 95 11 40 51 44 18 24 8 22 10 18. Ceepartor Opereooe 8 5 4 17 13 6 6 12 2q4 44 I5 14 ;9. PaIliole-r operator 2 2 2 2 2 44 20 Tool SpeSiiliet 4 4 4 4 1 2 2 4 21i Laihe Opeettoe 4 1 1 1 1 1 5 4 5 5- 4 5 22. Drill Ope-eor I I6 1 4 5 23. Welder/1Dqkas.ith/ 6 4 5 "onearPoe- 1 l 2 2 1 12 2 8 10 1 1 11 11 2 yvp. eIor1ti2nl2 2 1 2 i 112 2 8 10 7 22 -il 11 8 3 25. rpete 1111 1 1 11 3 6 9 2 1 I0 8 3 5 68 5 26, r e 1 5 I I 5 5 5 5 5 5 27. Skilled l.ebnr-r 8 B 8 8 4 S 2.2, - 8 4 4 28. Skilled Lahorer - 16264 "Ieper 6 6 2 2 22 2 IC 14 16 12 12- 16 29 Driver 8 8 53 4 17 74 1 I 2 1 1 1 1 1 5 81 81 50 57 107 -i6 30. Ad,iniat-atire 81 81 Offi-er I 1 1 1 1 1 1 31. S-retar-y/Tf piao 1 liesairapher 1 1 1 1 1 1 32. Aooasntaot 2 1 3 33.Typi.t 3 3 3 2 7 11 .3 3 3 2 2 4 4 4 4 22 4 4 34 Ti-ek .eper 6 1 7 7 7 2 2 5 35 Storasvna=d 2 5 5 2 HlelpeT 3 1 4 5 5 9 1 1 0D 3 12 15 .5 1 9 1 3 4 36. Pro- `rerent Offi-er I 1 1 1 1 1 37. Porarding Agoet 1 I 1 _ 1 1 11 Slbtotal 230 65 101 396 22 39 61 457 166 243 409 751 120 139 175 17 730 291 139 topeotad Perroonel Tartover 54 4 Sultttal 227 22

TOTAL T NAINOICNEEDS 249

1/ Refors airbaroenernt for o-nsrr- on-enof bulhdtngn tnd Vorekop. 2/ Only praini-ofil-rea oddsd. tlvee 3/ atirlntfd dooe_ pereonol po-itieoo a-ready budgecd, for aoallability, 4t This poeitior shall bo Tilled iith a -e-oasicel e-g9eeer -0t laser than Otob-r 31, 1979.

So.e.e: BCEH, DPW, mlioioentioaien - 43 - Table 16

CHAD

THIRD HIGHWAY PROJECT

Equipment for Training Program

Cost Estimates (End-1977Prices)

…___---_ --- (US$ 000) … Total Cost Foreign as % of Total Item Quantity Unit Cost Local Foreign Total

A. Training Center

1. Lathe - Vernier 170 x 800 type with accessories 1 15.7 1.1 14.6 15.7 2. Universal drill - Vernier FV 250E type with accessories 1 31.4 2.2 29.2 31.4 3. Service vehicles 4 4.9 1.4 18.2 19.6 4. Tools and improvement - 20.9 1.5 19.4 20.9 Subtotal 6.2 81.4 87.6 5. Price Contingency 0.5 6.1 6.6

Subtotal A 6.7 87.5 94.2 Rounded 7 87 94 92%

B. Training Unit

1. Bulldozer 180/200 hp 1 145.4 10.2 135.2 145.4 2. Wheel loader 80/100 hp 2 63.5 8.9 118.1 127.0 3. Motorgrader 120/130 hp 2 78.9 11.0 146.8 157.8 4. Rubber wheel compactor 15/20 tons 3 54.5 11.4 152.1 163.5 5. Pulvimixer 3 1 89.8 6.3 83.5 89.8 6. Dumn) truck 6 m 12 37.0 31.1 412.9 444.0 7. Tank truck, water, 10,000 1 with pump 3 52.7 11.1 147.0 158.1 8. Tank truck, fuel, 10,000 1 1 53.2 3.7 49.5 53.2 9. Towed tank, fuel, 14,000 1 1 32.8 2.3 30.5 32.8 10. Towed tank, water, 2,000 1 1 5.8 0.4 5.4 5.8 11. Workshop truck 1 78.3 5.5 72.8 78.3 12. Supply/maintenance truck 1 41.7 2.9 38.8 41.7 13. Vibrating roller 0.7 ton 1 8.3 0.6 7.7 8.3 14. Liasion vehicle, pick-up 1 6.6 0.5 6.1 6.6 15. Liaison vehicle, 4-wheel drive 2 9.9 1.4 18.4 19.8 16. Towed camper 2 26.9 3.8 50.0 53.8 Subtotal 111.1 1,474.8 1,585.9

17. Spare parts stock (10%) 11.1 147.5 158.6 Subtotal 122.2 1,622.3 1,744.5 18. Quantity contingency (5%) 6.1 81.1 87.2 128.3 1,703.4 1,831.7 19. Price contingency 9.6 127.8 137.4

Total B 137.9 1,831.2 1,969.1 Rounded 138 1.831 1,969 93%

Source: ORT, USAID, mission estimates. - 44 - Table 17

CHAD

THIRD HIGHWAY PROJECT

Four Locallv-Built Ferryboats

Cost Estimates (End-1977 Prices)

- …_-----CFAF Million------US$ '000…--- …-______Local Local Foreign as Item Taxes Other Total Foreign Total Taxes Other Total Foreign Total x of Total

A. Basic Costs

1. Ferrvboat Building

(i) Materials 2.1 5.0 7.1 174.8 181.9 8.5 20.5 29.0 713.3 742.3 96 (ii) Labor - 32.4 32.4 - 32.4 - 132.1 132.1 - 132.1 - (iii) Loading/Unloading Rails - 0.4 0.4 3.3 3.7 - 1.5 1.5 13.5 15.0 90 (iv) Ferryboat Transfer 0.1 0.2 0.3 0.5 0.8 0.5 0.7 1.2 2.0 3.2 62 (v) Workshop Tools - 0.4 0.4 3.8 4.2 - 1.7 1.7 15.4 17.1 90 2.2 38.4 40.6 182.4 223.0 9.0 156 Y5165.5 744.2 909.7 82

2. Consulting Services

(i) Technical Specifications and Preliminary Design - - - 5.2 5.2 - - - 21.4 21.4 100 (ii) Final Design and Procurement List - - 13.1 13.1 - - - 53.5 53.5 100 = - - 18.3 18.3 - - - 74.9 74.9 100

3. Technical Assistance and Training - 5.9 5.9 33.5 39.4 - 24.1 24.1 136.6 160.7 85 (about 16 man-months)

Subtotal A 2.2 44.3 46.5 234.2 280.7 9.0 180.6 189.6 955.7 1,145.3 83

B. Contingencies

1. Physical

(i) 5% on A.1. and 2. 0.1 1.9 2.0 10.0 12.0 0.5 7.8 8.3 40.9 49.2 83 (ii) 1OT on A.3 - 0.6 0.6 3.3 3.9 - 2.4 2.4 13.7 16.1 85

Subtotal 1 0.1 2.5 2.6 13.3 15.9 0.5 10.2 10.7 54.6 65.3 84

2. Price

(i) on l(i), (iii), 0.5 1.4 1.9 43.9 45.8 2.2 5.8 8.0 179.0 187.0 96 (iv), (v) (ii) on l(ii) - 3.2 3.2 - 3.2 - 13.0 13.0 - 13.0 - (iii) on 2 - - - 7.4 7.4 - - - 30.2 30.2 100 (iv) on 3 - 1.9 1.9 18.4 12.3 - 7.5 7.6 42.6 50.2 85

Subtotal 2 0.5 6.5 7.0 61.7 58.7 2.2 26.4 28.6 251.8 280.4 90

Subtotal B 0.6 9.0 9.6 75.0 84.6 2.7 36.6 39.3 305.4 345.7 88

Total 2.8 53.3 56.1 309.2 365.3 11.7 217.2 228.9 1,262.1 1,491.0 85

Rounded 85

Source: Mission estimates. - 45 - Table 18 Page 1 of 2

CHAD

THIRD HIGHWAY PROJECT

Proiect Cost Estimates

--- CFAF million------US$'000------Foreign as Local Foreign Total Local Foreign Total % of Total

A. BASIC COSTS

1. Maintenance Program

(i) Road equipment & spare parts stock 53.4 708.3 761.7 218 2,891 3,109 93 (ii) Equipment & spare parts for Training Unit 29.9 397.4 427.3 122 1,622 1,744 93 (iii) Spare parts for existing equipment 12.2 163.2 175.4 50 666 716 93 (iv) Workshop equipment and tools 5.1 68.4 73.5 21 279 300 93 (v) Workshop equipment for Training Center 1.5 20.0 21.5 6 82 88 93 (vi) Office furniture and supplies, and equipment for 1.7 21.6 23.3 7 88 95 93 for EIO and PO (vii) Workshop and building construction and improvement 2/ 112.8 338.6 451.4 460 1,382 1.842 75 Subtotal 1 216.6 1,717.5 1,934.1 884 7,010 7,894 89

2. Technical Assistance and Training for DPW

(i) Training program for DPW specialized personnel (about 230 man-months) 67.4 381.9 449.3 275 1,559 1,834 85 (ii) Strengthening of DPW (about 180 man-months) 59.8 337.1 396.9 244 1,376 1,620 85 (iii) Road Planning and Design Office, including office equipment and supplies (about 25 man-months) 11.5 68.8 80.3 47 281 328 86 (iv) Operating costs (a) Training Center 2/ 57.3 159.5 216.8 234 651 885 74 (b) Training Unit 3/ 144.6 299.6 444.2 590 1.223 1,813 67

Subtotal 2 340.6 1,246.9 1,587.5 1,390 5,090 6,480 79

3. Fellowships - 73.5 73.5 - 300 300 100

4. Ferrvboat Replacement

(i) Materials, labor and workshop tools 2/ 40.6 182.4 223.0 166 744 910 82 (ii) Naval design and technical specifications - 18.3 18.3 - 75 75 100 (iii) Technical assistance (about 16 man-months) 5.9 33.5 39.4 24 137 161 85 Subtotal 4 46.5 234.2 280.7 190 956 1,146 83

5. Directorate of Transport

(i) Technical assistance (about 30 man-months) 6.6 59.5 66.1 27 243 270 90 (ii) Office equipment, furniture and supplies 2.4 17.2 19.6 10 70 80 88 Subtotal 5 9.0 76.7 85.7 37 313 350 89

6. Technical Assistance to Trucking Industry (about 15 man-months) 3.2 29.9 33.1 13 122 135 90

7. Completion of Five-Year Cotton Feeder Road Improvement Program (Second Highway Project) 2.9 9.3 12.2 12 38 50 92

(i) Construction materials 2.9 9.3 12.2 12 38 50 92 (ii) Operating costs 4/ 38.3 57.3 95.6 156 234 390 60

Subtotal 7 41.2 66.6 107.8 168 272 440 62

8. Rural Roads Study 7.3 66.2 73.5 30 270 300 90

Subtotal A 664.4 3,511.5 4,175.9 2,712 14,333 17,045 84

I/ End-1977 prices.

2/ Includes an i.nsignificantamount of taxes.

3/ Includes abotut71 taxes.

4/ Includes abouit10 taxes. - 46 - Table 18 Page 2 of 2

---- CFAF million-0 ------0USS0O…------Local Foreign Total Local Foreign Total

C. CONTINGENCIES

1. PlOsical

(a) On A.1 (i) C 5%) 2.7 35.5 38.2 11 145 156 (b) On A.1 (ii' ( 5%) 1.5 19.8 21.3 6 81 87 (c) On A.1 (iii) (15%) 1.7 24.5 26.2 7 100 107 (d) On A.1 (iv) (10%) 0.5 6.9 7.4 2 28 30 (e) On A.1 (v) ( - ) ------(f) On A.1 (vi) (10%) 0.2 2.2 2.4 1 9 10 (g) On A.l (vii) (10%) 10.8 32.6 43.4 44 133 177 (h) On A.2 (i) (15%) 10.0 57.4 67.4 41 234 275 (i) on A.2 (ii) (15%) 9.1 50.5 59.6 37 206 243 (j) On A.2 (iii) (15%) 1.7 10.3 12.0 7 42 49 (I) On A.2 (iv) (a)(10%) 5.6 15.9 21.5 23 65 88 (1) On A.2 (iv)(b)(10%) 14.4 29.9 44.3 59 122 181 (m) On A.3 (15%) - 11.0 11.0 - 45 45 (n) On A.4 (i) ( 5%) 2.0 9.0 11.0 8 37 45 (o) On A.4 (ii) ( 5%) - 1.0 1.0 - 4 4 (p) On A.4 (iii) (10%) 0.7 3.5 4.2 3 14 17 (q) On A.5 (i) (15%) 0.5 4.4 4.9 2 18 20 (r) On A.5 (ii) (15%) 0.5 2.4 2.9 2 10 12 (s) On A.6 (15%) 0.5 4.4 4.9 2 18 20 (t) On A.7 (-) ------(u) On A.8 (- )

Subtotal I 62.4 321.2 383.6 255 1,311 1,566

2. Price

(a) on A.1 (i) 9.3 123.5 132.8 38 504 542 (b) On A.1 (ii) 2.7 36.0 38.7 11 147 158 (c) On A.1 (iii) 1.0 14.2 15.2 4 58 62 (d) On A.1 (iv) 1.0 14.7 15.7 4 60 64 (e) On A.t (v) 0.2 1.5 1.7 1 6 7 (f) On A.1 (vi) 0.5 2.7 3.2 2 11 13 (g) On A.1 (vii) 31.1 110.7 141.8 127 452 579 (h) On A.2 (i) 14.2 80.4 94.6 58 328 386 (i) On A.2 (ii) 13.0 63.4 76.4 53 259 312 (j) On A.2 (iii) 2.0 11.5 13.5 8 47 55 (k) On A.2 (iv)(a) 13.7 38.5 52.2 56 157 213 (1) On A.2 (iv)(b) 21.1 70.8 91.9 86 289 375 (m) On A.3 ______(n) On A.4 (i) 5.1 43.9 49.0 21 179 200 (o) On A.4 (ii) - 9.8 9.8 - 40 40 (p) On A.4 (iii) 2.7 15.7 18.4 11 64 75 (q) On A.5 (i) 1.4 13.5 14.9 6 55 61 (r) On A.5 (ii) 0.5 2.7 3.4 3 11 14 (s) On A.6 0.7 6.6 7.3 3 27 30 (t) On A.7 _ _ _ _ _ (u) On A.8 1.2 9.8 11.0 5 40 45

Subtotal 1 80.4 528.5 608.9 328 2,157 2,485

Subtotal B 184.0 991.1 1,175.1 752 4,045 4,797

TO'TAL 848.4 4,502.6 5,351.0 3,464 18,378 21,842

ROUlNDED 3,500 18_400 21_800

RECURRENT COSTS OVER THE P'ROJECTPERIOD

A. Basic Costs (Erd-1977)

1. Unpaved Road Maintenance 691.4 581.3 1,372.7 2,822 2,781 5,683 50 2. Ferryboat Maintenance and Operation 69.8 95.8 165.6 285 391 676 58

Subtotal A 761.2 777.1 1,538.3 3,107 3,172 6,279 51

B. Contingencies

1. Physical 37.9 39.0 76.9 155 159 314 2. Price 178.1 187.2 365.3 727 764 1,491

Subtotal B 216.0 226.2 442.2 882 923 1,805

TOTAL 977.2 1,003.3 1,980.5 3,989 4,095 8,084

ROUNDED 4.000 4,100 8,1()0 _ 47 - CHAD THIRD HIGHWAY PROJECT Table 19 PROJECTIMPLEMENTATION SCHEDULE (CALENDAR YEARS)

1978 1979 1980 1981 1982 Item Activity Responsibility Quarter Quarter Quarter Quarter Quarter

1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th

Credit Signature Got./IDA 0 Effectiveness Government

MaintenanceProgram Procurementof Equipment, SpareParts, and WorkshopEquipment Govt./ADF Workshopand Buiiding Construction Biddmg Documents Government Consruction Procurementof Office Furniture and Equipment Govt./IDA Technical Assistance to DPW Training Program Consultant Selectionand Contract Govt./USAID Consultant Services Procurementof Equipment Govt./USAID Assesmentof results and further requirementsfor the Training Program Govt./USAID/IDA Strenghteningof DPW Consultant Selectionand Contract Govt./IDA Consultant Services Pellooships

Ferryboat Construction Consultant Contract Govt./IDA Ferryboat Design Consultant Procurementof Building Materials Govt./Consultant Ferryboat Construction Goot./Consultant, Technical Assistance to DT Consultant Selection and Contract Govt./USAID/IDA Consultant Servicesv.______Technical Assistance for FB ConsultantSelection and Contract Govt./USAID/IDA Consultant Services Completion of Cottonl FeederRoad Maintenaisce Govt./IDA

Rural RoadsStudy ConsultantSelection and Contract Govt./STC/IDA Consultant Services

RoadFund Revenuesand Expenditunes Reports Government

Proiect Mmtoring Reports Government _ _ _ _ _ 1 F 1_

Source. MissionEstimates May 1978 World Bank - 18j82 - 48 - Table 20

CHAD

THIRD HIGHWAY PROJECT

Estimated Schedule of Disbursements (US$'000)

…------Disbursements------IDA Fiscal Year Quarter Ending During Quarter Cumulative

1979 September 30, 1978 ------December 31, 1978 ------March 31, 1979 150 150 June 30, 1979 450 600

1980 September 30, 1979 1,200 1,600 December 31, 1979 1,200 3,000 March 31, 1980 800 3,800 June 30, 1980 700 4,500

1981 September 30, 1980 600 5,100 December 31, 1980 500 5,600 March 31, 1981 400 6,000 June 30, 1981 400 6,400

1982 September 30, 1981 350 6,750 December 31, 1981 350 7,100 March 31, 1982 300 7,400 June 30, 1982 200 7,600

Source: Mission estimates.

May 1978 CHAD

THIRD HIGHWAY PROJECT

Road Maintenance Cost Estimates

(End-1977 Prices)

_------CFAF------US$------Local Local Foreign as Item Taxes Other Total Foreign Total Taxes Other Total Foreign Total % of Total

Maintenance Operations

Dry Grading, per km 822 6,492 7,314 7,991 15,305 3.35 26.50 29.85 32.62 62.47 52 Grading - Compacting, pes km 4,632 31,771 36,133 42,048 78,181 18.90 129.68 147.48 171.62 319.10 54 Emergency Repairs 2/per m 66 490 556 670 1,226 0.27 2.00 2.27 2.73 5.00 55 Dragging, per day- 1,173 5,813 6,986 9,177 16,163 4.79 23.73 28.52 37.45 65.97 57 1 Light Maintenance, per day 1,072 15,992 17,064 10,392 27,456 4.38 65.27 69.65 42.41 112.06 38 (cantonnage)

Road Maintenance Cost ------CFAF Million/Year------US$ 'OOO/Year------

N'Djamena North 2,154 19,104 21,258 21,150 42,408 8,792 77,975 86,767 86,327 173,094 N'Djamena South 2,837 25,556 28,393 28,174 56,567 11,580 104,310 115,890 114,996 230,886 Abeche 1,883 14,474 16,357 18,682 35,039 7,685 59,078 66,763 76,253 143,016 Sarh 4,458 40,961 45,419 43,291 88,710 18,196 167,188 185,384 176,698 362,082 Moundou 6,077 55,365 61,442 59,031 120,473 24,804 225,980 250,784 240,942 491,726

Total 17,409 155,460 172,869 170,328 343,197 71,057 634,531 705,588 695,216 1,400,804 50

1/ Excluding road administration, equipment, depreciation, import duty on spare parts, and other commercial taxes, fuel tax included.

2/ Assuming operations over 45 linear km per day.

Source: mission estimates. CHAD

THIRD HIGHWAY PROJECT

Ferryboat Recurrent Costs

Cost Estimates (End-1977 prices)

------CFAF Million------US$ 000------Local Local Foreign as Basic Costs Taxes Other Total Foreign Total Taxes Other Total Foreign Total % of Total

Personnel: 1979 - 9.5 9.5 - 9.5 - 38.7 38.7 - 38.7 1980 - 9.5 9.5 - 9.5 - 38.8 38.8 - 38.8 1981 - 9.5 9.5 - 9.5 - 38.8 38.8 - 38.8 1982 - 9.5 9.5 - 9.5 - 38.8 38.8 - 38.8

Subtotal - 38.0 38.0 - 38.0 - 155.1 155.1 - 155.1

Materials: 1979 2.0 7.8 9.8 29.5 39.3 8.2 31.8 40.0 120.4 160.4 1 1980 1.6 6.7 8.3 25.1 33.4 6.9 27.3 34.2 102.0 136.2 L 1981 1.4 5.5 6.9 20.6 27.5 5.7 22.5 28.2 84.1 112.0 1982 1.4 5.5 6.9 20.6 27.5 5.3 22.5 27.8 84.1 -

Subtotal 6.4 25.5 31.9 95.8 127.7 26.1 104.1 130.2 391.0 521.2 75X

Total 6.4 63.5 69.9 95.8 165.7 26.1 259.2 285.3 391.0 676.3

Source: DPW, mission estimates. - 51 - Table 23

CHAD

THIRD HIGHWAY PROJECT

Road Maintenance Recurrent Expenditures

Cash Flow

------…CFAF M4illion------US$ '000------Item 1979 1980 1981 1982 1979 1980 1981 1982

A. Expenditures l. Outside Project a. CILSS/'UNSO Brigade 10.0 10.0 10.0 10.0 40.8 40.8 40.8 40.8 b. FED Brigade 26.8 13.4 - - 109.4 54.7 - - c. Paved road maintenance 24.2 36.4 48.4 48.4 98.8 148.6 197.6 197.6 Subtotal 61.0 59.8 58.4 58.4 249.0 244.1 238.4 238.4 d. Quantity variation 5% 3.0 3.0 2.9 2.9 12.2 12.2 11.8 11.8 e. Price variation 5.7 9.7 15.0 18.7 23.3 39.6 61.2 76.3 Subtotal 1 69.7 72.5 76.3 80.0 284.5 295.9 311.4 326.5

2. Project Components

a. Unpaved Road Maintenance /1 343.2 343.2 343.2 343.2 1,400.8 1,400.8 1,400.8 1,400.8 b. Ferrylboat maintenance and operation 48.8 42.9 37.0 37.0 199.2 175.1 151.0 151.0 c. Fuel taxes for training unit 7.4 7.4 7.4 7.4 30.2 30.2 30.2 30.2 d. Cotton feeder roads 4.7 4.7 - - 19.2 19.2 - - Subtotal 404.1 398.2 387.6 387.6 1,649.4 1,625.3 1,582.0 1,582.0 e. Quantity variation (about 5%) 20.2 19.9 19.4 19.4 82.5 81.3 79.1 79.1 f. Price variation 54.8 76.8 98.6 122.4 223.7 313.5 402.4 499.6 Subtotal 2 479.1 494.9 505.8 529.4 1,955.6 2,020.1 2,063.5 2,160.7

Total A 548.8 567.4 581.9 609.4 2,240.1 2,316.0 2,374.9 2,487.2

B. Revenues

1. Road Fund /2 477.4 498.9 521.3 544.8 1,948.6 2,036.3 2,127.8 2,223.7 2. Ministry Salaries /3 56.9 58.6 60.4 62.2 232.2 239.2 246.5 253.9

Total B 534.3 557.5 581.7 607.0 2,180.8 2,275.5 2,374.3 2,477.6

C. Balance (B-A) -14.5 -9.9 -0.2 -2.4 -59.3 -40.5 -0.6 -9.6

D. CumulatE!d balance -14.5 -24.4 -24.6 -27.0 -59.3 -99.8 -100.4 -110.0

/1 Excluding equipment depreciation and taxes other than tax on fuel. /2 Based on CFAF 450 million estimated revenues in 1977, and the following annual growth: 2.5% in 1978, 3.5% in 1979, and 4.5% thereafter. /3 Permanent labor. Based on CFAF 53.64 million in 1977 and 3% annual increase thereafter.

Source: DPW, mission estimates.

August 1977 - 52 -

CHAD Table 24

THIRD HIGHWAYPROJECT 11 Vchicic -tc.-u casts (CEAF/lO0 kmn) as a Function of Traffic and Road Surface Characteri.Tlr-

Gravel Road (Laterite Surface) VOC Estimate T R RD LD VL CMS CMR CLR

0 3250 11.0 15.5 52264 96147 169780 211172

1 3332 11.2 11.1 52266 96152 169790 211185

5 3632 12.1 5.9 52322 96280 170039 211513

10 3944 13.0 2.9 52495 96677 170814 212536

15 4200 13.9 1.9 52784 97340 172107 214241

20 4410 14.7 1.6 53188 98267 173916 216628

30 4744 16.5 1.5 54343 100917 179086 223448

50 5400 22.4 1.5 58039 109397 195630 245272

80 7794 43.1 1.5 67048 130067 235956 298468

100 11450 70.0 1.5 75364 149147 - -

2/ max. voc: 76000 150000 250000 300000

Earth Road (Sandy Clay Surface) VOC Estimate

T R RD LD VL CMSM5 CMR CLR

0 3250 14.0 15.5S 50721 94560 165690 204287

1 4035 15.2 11.1 53813 99041 174092 216771

5 7175 20.0 10.0 64945 115666 205560 264572

10 11700 26.0 10.0 76132 133512 240080 319507

15 14000 32.0 10.0 84250 148100 269250 ;69092

20 14000 38.0 10.0 89311 159428 293076 378127

25 14000 50.0 10.0 91314 167498 511548 397212

30 14000 50.0 10.0 91500 172308 324669 406547

max. voc: -/ 92000 175000 325000 410000

Earth Track VOC Estimate

T R RD LD VL CMS CMR CLR

0 3250 14.0 15.5 50681 94212 165393 203632

1 4505 15.2 11.0 55755 101558 179219 224073

5 9525 20.0 10.0 72155 125814 225265 291067

10 14000 26.0 10.0 84391 145315 262877 343731

20 14000 32.0 10.0 88395 158510 293319 376250

30 14000 50.0 10.0 90410 169797 328719 409189

max. voc: 91000 170000 330000 410000

1/ Net of taxes, in January 1977 prices. 2/ Max VOC corresponds to an average speed of 10-15 km/hr.

LEGEND T= cumulative traffic volume since last grading VL= light goads vehicle (2.5t) in both directions (1000 vehs.) CMS= medium truck (13t) E= roughness (mm/km) CMR= medium tr-ck/trailer (29t) RD= rot depth (mm) CLR= heavy truck/trailer (38t) LD= depth of loose material (mm) VOC= vehicle operating cost (CFAF11000 km) Source: Mission estimates. 1977. - 53 Table 25

CHAD

THIRD HIGHWAY PROJECT

Breakdown of Cost Components for Shadow Pricing

Local Costs Item Skilled Labor Unskilled Labor Other Total Foreign Costs (%) (%) (%) (%) (%)

Vehicle Operating Costs 8 2 24 34 66

Recurrent Maintenance Costs

Regravelling 13 1 28 42 58

Routine Maintenance 15 7 26 48 52

Workshop Buildings 10 10 5 25 75

Equipment - - 7 7 93

Fuel - - 15 15 85

Spare Parts - - 7 7 93

Technical Assistance - - 7 7 93

Source: Mission estimates. - 54 - Table 26

CHAD

THIRD HIGHWAYPROJECT

Summary of Economic Evaluation and Sensitivity Analysis

Internal Rate of Return Cl) Without Shadow With Shadow Prices Prices

A. Routine Maintenance - IRR = 75.0X; B/C a 12% = 3.25

1. Effect of Reduced Maintenance Output

Network Maintained 1 5300 km! 74.1 75.0 3500 km 63.0 63.8 1800 km 26.6 27.4

2. Effect of Reduced Equipment Utilization

Economic Life of Equipment

8 yearsl/ 74.1 75.0 7 years 73.0 74.0 5 years 71.3 72.2

3. Effect of Cost Increase

Increase in Costs

5% 70.3 71.1 10% 66.9 67.5 15% 63.8 64.6 20% 60.8 61.6

4. Effect of Increase in Benefits

Increase in Benefits

5% 77.9 78.7 10% 81.8 82.6

B. Regravelling - IRR = 16.7% B/C H 12% = 1.31

1. Effect of Reduction in Annual Output of Regravelling

Kilometers Regravelled per Year

100 ki-/ 17.2 16.7 80 km 12.4 12.9

2. Effect of Increase in Cost of Regravelling

5% 16.1 15.9 10% 15.0 15.1 15% 14.0 13.8 20% 13,0 12.8 3. Effect of Increase in Benefits from Regravelling

Increase in Benefits

5% 18.4 17.7 10% 19.5 18.5

C. Road Maintenance and Training Programs Combined IRR = 51.4%; B/C H 12% = 2.20

D. Ferries - IRR = 44.0%; B/C H 12% = 3.68

1. Effect of Decrease in Number of Ferries Constructed

No. of Ferries Constructed During Project Period 41/ 43.4 44.0 3 36.0 36.6 2 31.3 31.8

2. Effect of Increase in Costs

Cost Increase

5% 41.7 42.3 10% 40.0 40.6 15% 38.5 39.1 20% 37.2 37.7

3. Effect of Increase in Benefits

Increase in Benefits 5% 45.3 45.9 10% 47,1 47.7

1/ As assumed under project. Source: Mission estimates. - 55 - ANNEX I

CHAD

THIRD HIGHWAY PROJECT

Road Transport Industry

1. Road transport industry is of vital importance to Chad's economy due to the country's dependence on road transport for both internal and external transport functions. Beginning with the Bank Group's first transport sector survey of Chad in 1969, considerableimportance has been attached to this industry, and in particular, the trucking subsector, leading to a diag- nostic study of the road transport industry under the Second Highway Project (Credit 490-CD).

A. Road Transport Demand

2. The Chadian road transport demand consists of:

(i) internationalfreight transport, comprising an annual export/import tonnage of about 253,000 tons of which imports constitute nearly 75%. The portion of freight transport carried by Chadian carriers is estimated at 160,000 tons (63% of the total volume), correspondingto about 130 million ton-km. Freight transportdemand and its distribution by type of commoditiesare presented in Table I and 2; and

(ii) domestic freight transport of about 226,000 tons 1/ of which cotton accounts for 146,000 tons (64%). The farm to ginnery transport of cotton is effected exclusively by COTONTCHAD; the remaining internal freight traffic consists of about 80,000 tons distributedamong the principal commercial and administrativecenters. Estimates of local freight between small towns are not available.

3. There is no scheduledintercity bus transport in Chad. Except for a few vans and covered pickup trucks, freight trucks double as passenger vehicles, carrying 5-10 passengers in addition to their normal load. Recent statistics on demand for intercitypassenger transportare not available, but studies carried out in 1963 estimatedintercity passenger transportation demand at 190,000 passengers/yearcorresponding to about 74 million passenger- kilometers.

4. In 1976, Chadian transporterscarried an estimated 130 million ton- km of dry goods and about 55 million ton-km of petroleum products. Short-term projectionsof the Chadian share of dry cargo transport indicate a demand of

1/ Estimated tonnage for 1976/77. - 56 - ANNEX I about 150 million ton-km, excluding the farm-to-ginnery transport of seed cotton. It is difficult to establish future transport demand for petroleum products due to uncertainties concerning the construction of a mini refinery in N'Djamena.

B. Road Transport Policy and Regulations

Road Transport 'olicy

5. In October 1976, the Government granted exclusive rights to the Cooperative des Transporteurs Tchadiens (CTT) for both international and domestic public road transport (Ordonnance No. 027/CSM dated October 23, 1976). At its formation in 1958, the objective of CTT was to organize small Chadian transporters under the umbrella of a cooperative that could offer competition to Unitchadienne, a large foreign-owned transport company. Until 1972, CTT and Unitchadienne operated under a system of freight allocation (applied to international transport only), that progressively favored CTT. Such restrictive freight allocation practices eventually forced Unitchadienne to cease its operations in Chad, and CTT assumed de facto control of international freight transport. Other factors contributing to the sole control of international freight transport by CTT between 1972-77 were: (i) transit agreements with Cameroon and Nigeria fixing Chad's share of international trade through a quota system; and (ii) the monopolistic control of the Cameroonian share of Chad's itransit traffic by the "Syndicat des Transporteurs", the trucking industry cooperative in Cameroon.

6. The Government's internal transport policy similarly appears to encourage a controlled transport industry structure. A number of semi-public and Government agencies have exclusive rights to transport functions related to their activities. For instance, COTONTCHAD, the semi-Government cotton processing and marketing agency, operates its own fleet of about 300 truck- trailers with speCially-constructed frames, to transport seed cotton from about 2100 purchase points to ginneries. Exclusivity of seed cotton transport was granted to COTONTCHAD, as it was indicated that COTONTCHAD could transport seed cotton, using its special trucks, at a cost 50% lower than the rates charged by common carriers. Other agencies that operate their own truck fleets are: Societe Nationale de Commercialisation du Tchad (SONACOT), for collection and transport of gum arabic, onions and hibiscus flowers; Direction de la Lutte Contre les Calamites Naturelles (DLCCN) which is responsible for the distribution of essential supplies to regions affected by drought and other calamities (e.g., the regions of Ouadai, Guera, Salamat and Batha); and Fonds de Developpement et d'Assistance Rural (FDAR) for distribution of food aid. Until October 1976, the remaining internal freight transport (about 60-80,000 tons/year) was free of direct control by CTT, although nearly all independent transporters were members of CTT. As a few large transporters, through individual contracts with petroleum companies and the brewery in Moundou, were capturing a major part of the internal transport market, the Government gave dejure control of all transport activities, external as well as internal, to CTT. Ostensibly, this measure was designed to protect the interests of the smaller members of CTT. - 57 - ANNEX I

The InternationalTransit Agreements

7. Internationalarrangements governing Chad's transit trade are:

(i) With Cameroon: a transit agreement resulting in the award of 65% of freight tonnage moved between N'Gaoundere and Chad to Chadian transportersand 35% to Cameroonian trucks.

(ii) With Nigeria: a transit agreement, although already obsolete, governs the allocation of freight between Chadian and Nigerian transportersfrom Maiduguri to Chad as shown below:

(a) General Merchandise - 85% of tonnage to Chadian transporters - 15% of tonnage to Nigerian transporters

(b) Fuel - 15% of tonnage to Chadian transporters - 85% of tonnage to Nigerian transporters.

(iii) With CAE: there is no formal agreementbetween Chad and CAE, concerning goods transit, although transportof cotton exports and 85% of other goods is handled by Chadian transporters.

Road Traffic Regulations

8. The road regulationsare defined by "Code de la Route" comprising Loi No. 5 of February 9, 1971, Decrets 172/PR to 178/PR of September 16, 1971, and Arretes 502/TP-INT to 508/TP-M of October 12, 1971. Concerning vehicle operations,the "Code de la Route" prescribes the following traffic regulations: (i) maximum speed, 60 km/h; (ii) maximum permissiblepayload on two axle vehicles, 19 tons; on three or more axle vehicles, 26 tons; and on semi- trailers and truck-trailerunits, 38 tons; (iii) maximum axle load, 13 tons; and (iv) load distribution,a maximum of 5 tons/m between the two extreme axles. In addition, the movement of heavy vehicles on unpaved all-weather roads is forbidden during, and for a few hours after, a heavy rain.

9. The enforcementof traffic regulations,other than vehicle and driver licensing and vehicle inspection, is lax. The weight regulations, however, could not be enforced as scales for weighing axles were not available. Mandatory road closures during and after heavy rains are enforced by DPW wherever road barriers are available. The main reason for absence of enforcement is lack of adequate funds and trained personnel. - 58 - ANNEX I

C. The Truck Fleet

Characteristics

9. The exact size and age of the commercial vehicle fleet in Chad cannot be assessed accuratelyas vehicle statistics are not managed effectively and different sources give conflicting data. The vehicle fleet of CTT is estimatsd at 663 vehicles with a total capacity of 10,723 tons (trucks) and 1,476 m (tankers). The distributionof the CTT fleet by vehicle type is shown below:

Light Trucks Heavy Trucks Tankers (5-15 t) (20-30 t) (9,5-30mn)

Vehicle Fleet 252 356 55 Payload 1,913 tons 8,810 tons 1,476 m3

Other than the 100 Fiat trucks and other vehicles purchased during 1974-75, the average age of the fleet is estimated to be about 7 years. There is a serious discrepancybetween the size of the truck fleet given in Government statisticsand that obtained frQm truck ownership statisticsof various agencies. In view of the unreliabilityof Governmentvehicle fleet statistics, additionaleffort is needed to establish these data on a sound basis.

Maintenance

9. The truck fleet is maintained by vehicle dealers, some CTT members who operate private repair facilities,and the semi-publicand government agencies that operate their own vehicle fleets. There are presently three private garages in N'Djamena. In addition, mechanics in the "quartier",using improvised facilities,provide inexpensive repair services, and as such, play an important role in maintaining the vehicle fleet. The repair and after- sales services at the private garages, which are the major suppliers of vehicle repair facilities,are effective and reliable, but expensive. The elevated cost of spare parts has contributed to exorbitantvehicle maintenance costs, which lead to prolonged immobilizationof a part of the vehicle fleet.

Financing of Trucks

10. With few exceptions,purchase of trucks is financed through credit facilitiesprovided by commercialbanks and truck dealerships. Normally, the buyers makes an initial deposit equal to 25% of the purchase price. The remaining amount is financed either by bank loans at an interest rate of 12% repayable in 3 years, or by credit provided by truck dealers at an interest rate of 18%, repayable in 12 installmentsspread over a period of 18 months (covering two seasons of transportactivities). Commercialbanks are generally reluctant to lend to transportersthat do not have financiallysound - 59 - ANNEX I operations;accordingly, trucks are purchased mainly through credit arrangements with dealers. In 1974-75, however, the Government provided credit guarantees and permitted the entry of 100 Fiat carriers (60 tractor-trailers, 25 semi-trailers,and 15 semi-tankers)free of import duties for sale to CTT at concessionaryterms.

Truck Fleet Utilization

11. The physical condition of the road network and climatic conditions adversely affect the utilization of the truck fleet. Light trucks (5-10 t capacity) are used for short to medium haul operations. Heavy trucks and tankers (25 t capacity) operate primarily on internationalroutes, and when equipped with special tires for long-haul operations on domestic routes, e.g., N'Djamena-Abecheor N'Djamena-Sarh. Road transport operations are mainly confined to the dry season (from October to May), with 80% of the annual traffic movements occurring in this season. During the rainy season (June to October), the internationaltraffic, except for fuel imports, is substantially reduced. With respect to domestic transport, there is no direct road link between N'Djamena and southern Chad during the rainy season; the only available route is via Figuil in Cameroon.

D. The Cooperative des TransporteursTchadiens (CTT)

Organization

12. Membership - As of March 1977, CTT had a roster of 826 members of whom 350 were classified as active members. The majority of the active members (about 65%) have a one-truck operation; only 7% of the transporters operate fleets of 5 or more vehicles (Table 3).

13. Management- The principal management personnel are the President, the Director-General,the Assistant Director and a TechnicalAdvisor (see Exhibit I). Although the chief executive officer of CTT is the Director- General, who is nominated by the Government and acts under the authority of the Ministry of Economy, Plan and Transport, the actual management of the organizationis in the hands of the President,who is closely assisted by the Assistant Director and the Technical Advisor.

14. Functional Organization- The headquartersof CTT are located in N'Djamena. In addition, CTT operates branch offices of N'Gaoundere,Bangui, Garoua, Moundou and Sarh, and has a representativein Maiduguri. CTT operations at the headquartersconsist of (see Exhibit I):

(i) Operations Service, which comprises the centralizationof freight demand and distributionof freight to transporters.

(ii) Accounting and Invoicing Services,which provide billing facilitiesand process payments made to CTT. These services are also used to determine the transporter'sshare of the payments received from clients.

(iii) Computing Services, for preparation of accounts and financial statements of the co-operativemembers. - 60 - ANNEX I

(iv) Operation Fiat, to oversee the use of Fiat trucks purchased under credit guarantees provided by the Government and to ensure the reimbursement of credit guaranteed by the Gov- ernment.

CTT's operational staff consists of 66 employees; of these 44 are stationed in N'Djamena.

Operations

15. Membership Requirements and Capital - Membership in CTT is contingent upon the ownership of at least one truck and the payment of CFAF 10,000 per ton of vehicle payload. This sum is considered as capital subscription. However, a CTT member in financial difficulties can borrow from CTT (appar- ently without interest), an amount up to 75% of his initial subscription. CTT's capital, as of February 1977, was CFAF 165,158,000. The magnitude of CTT's capital assets fluctuates over time depending upon the amount of funds transferred to members in financial need, and the level of membership.

16. The Operational System - The shippers, either directly or through agents (commission agents for domestic freight; freight forwarding agents for international freight) inform CTT of their freight transport requirements. Then CTT's operation service, under the direct control of the President and the technical adviser, assigns freight to one or more transporters. Each transport contract: is made under a voucher which indicates the characteristics of the freight, the origin and the destination, and the tariff charged. The transport contract is completed when the transporter presents to CTT a confir- mation of the delivery of the merchandise, signed by the consignee. At this time, CTT processes the payment for the transport services provided. After deducting the advance made for the purchase of fuel, the 4.4% turnover tax, freight insurance and a 10% commission, the accounting service pays the balance to the transporter. At the end of each month, the accounting service prepares a statement of all financial transactions. This financial statement permits the identification of active transporters. The 10% commission is charged by CTT for the services it provides in centralizing and processing freight shipments. In case of a directly contracted shipment between CTT and the shipper, the commission is retained by CTT. This applies to almost all of the international freight and the major portion of domestic freight transport. Where a commission agent serves as the intermediary between CTT and the shippers, the 10% commission is divided equally between CTT and the commission agent. A small portion of internal freight transport (in 1975, less than 10% of total CTT operations), falls outside the purview of CTT. This happens because a number of commission agents do not convey all the freight orders to CTT; instead, they privately negotiate a more favorable rate with individual transporters, especially for transport on relatively difficult and insecure routes, e.g., to Abeche or Farcha. The truck operators also contri- bute to illegal transport activities by overloading trucks with clandestine freight or by carrying passengers when returning empty at the completion of freight assignment. Para-CTT transport activities, however, appear to have - 61 - ANNEX I decreased since CTT assumed exclusive control of public transport in Chad in 1976. CTT revenues increased from CFAF 1.2 billion in 1975 to about CFAF 2.0 billion in 1976. The ordinance granting exclusive transport rights to CTT provides CTT with policing functions to control unauthorized transport activity. Small freight shipments on domestic routes, however, are not moni- tored by CTT. Despite the penalties (6 months to 3 years in jail and/or fine of CFAF 50,000 to CFAF 5 million) for illegal movement of freight, it remains difficult for CTT to enforce this regulation.

17. Freight forwarding agents, who also serve as assessors and collec- tors for the Chadian Customs Service, play a key role in Chad's international commerce. The various functions performed by freight forwarding agencies are clearance of Chadian goods at the port, inter-model trans-shipment of freight (such as from rail to road at N'Gaoundere), and clearance of goods at Chadian customs. In most cases, international transport shipments are contracted between CTT and the freight forwarding agents on behalf of their clients.

Freight Allocation

18. CTT's Operations Service (Service d'Exploitation) is charged with freight allocation. When requests for shipment (normally large international and domestic transport contracts) are received by this service, these are allocated according to the availability of truckers, as recorded on a first- come first-serve basis. Some transporters complain that freight is not impartially distributed, but this is contradicted by CTT's management. As the existing freight allocation arrangment under CTT does not provide either a systematic basis for identifying freight transport demand or the means of achieving a balance between transport demand and existing trucking capacity, there is a need to improve the operational efficiency of CTT.

Fiscal Performance

19. Each fiscal year (September 1 to August 31) CTT prepares an inventory of membership and the operational truck fleet, a profit and loss statemerLt, and a balance sheet. Since the last three years, the financial statements have been prepared by a professional accountant. After interest payments and a 30% deduction for the legal reserve, the net profits from each year's operation are either distributed to the members in accordance with the volume of business generated by them or deposited in the surplus account. The 10% commission charged by CTT is estimated at about CFAF 200 million (10% of gross revenues) for 1975-76, while its operational expenditures, including debt repayment, payment to commission agents, and reimburse- ments for loss of merchandise, is estimated at CFAF 109 million.

Bankruptcies

20. It is suspected that bankruptcies are common especially among transporters owning 1 or 2 trucks. Of CTT's 826 registered members, only 350 were active during 1975-76. Although a number of CTT members are only temporarily inactive due to lack of working capital or vehicle breakdown, a - 62 - ANNEXI majority of inactive members have either suffered bankruptciesor sold their businesses to members with more profitable operations. Except by voluntary resignation, a CTT members is rarely removed from the membership roster.

E. Economic Characteristics

Tariffs

21. Transport tariffs were established by official decree (Decret 327/ PR/TPT/DT) for different routes in December 1974 (Table 5), and have not been revised since that time. Some freight categories have special tariff struc- tures such as transport of material for the army, transport for exploration of petroleum, and tranport of beer from the brewery at Moundou to N'Djamena. On international routes, with the exception of Nigerian routes, the tariffs lie between CFAF 10-22 peS ton-km for dry goods. Tariffs for fuel traisport vary from CFAF 11.7 per m -km (Lagos-N'Djamena route) to CFAF 20 per m -km (Maiduguri-N'D-lamenaroute) depending upon length of haul. The tariffs on domestic routes are of the same order of magnitude as on international routes (CFAF 10-22 per ton-km). On difficult routes such as tracks in the Sahel zone, tariffs vary between 25-66 per ton-km. The tariffs for the Maiduguri- N'Djamena route' (Nigeria) do not conform to the general tariff structure; the official rates for general merchandise and sugar on this route are CFAF 38.4 per ton-km and CFAF 31.2 per ton-km respectively, compared to CFAF 18 per ton-km for general merchandise and CFAF 13.5 per ton-km for sugar on the N'Gaoundere-N'Djamena route. The higher rates on the Nigerian route reflect the higher transport costs associated with the use of smaller trucks (5-10 ton capacity) and are indirectly designed to protect the interests of small operators. If light trucks were replaced on this route by larger capacity carriers, a large part of CTT's membership would be out of business. The Government and CTT, however, appear to endorse the preservation of these smaller operators on social grounds, as most of the operators on this route own one or two old vehicles that serve as their only source of income.

22. Most transporters consider the official tariffs on international routes and major domestic routes as too low; this is particularly true for subsidized items such as flour for which the transport tariffs are about 30% lower than for other commodities. Contrary to the widely held impression that the transport tariffs are high in Chad, road transport tariffs in Chad are of the same order of magnitude as in Upper Volta and Niger where the range of international transport rates varies from CFAF 15-23 per ton-km (1975 figures). On the average, the Chadian tariffs are lower than the transport rates used in northern Cameroon by the Cameroonian Syndicat des Transporteurs. The transport tariffs used by the Syndicat since December 15, 1976 vary from CFAF 19-25 per ton-km (see Table 4). - 63 - ANNEXI

Financial Transport Costs

23. Average transport costs, in early 1977 prices, are summarized as follows:

Average Financial Transport Cost (CFAF/ton-km) International Domestic Tracks in route route Sahelian Zone

(i) Dry Goods Average Annual Kilometrage 40000 60000 30000 50000 20000 40000

Truck 12 t Payload Load factor - 65% 28 26 31 28 43 38 - 55% 33 30 36 33 48 43

Truck-Trailer 26 t Payload Load Factor - 65% 17 16 21 19 - - - 55% 20 19 25 22

(ii) Fuel Annual Kilometrage 70,000 80,000 90,000

Tanker - 30 m (50% Load Factor) 14 13.5 13

Comparison of Transport Costs with Tariffs

24. Except for the tariffs on the Maiduguri-N'Djamenaroute, the existing road transport tariffs are lower than transport costs (in some cases as much as 20-25%). Accordingly, there is some justificationfor the upward adjustment of tariffs to adequately reflect transport costs. The primary factor contributingto high transportcosts is the low rate of truck utilization. If the load factor were to increase to 75-90%, the resulting transport costs would be within the range of the existing tariffs. Similarly, an increase in average annual haul distanceswould help to lower transportcosts. However, owing to the structural imbalance between exports and imports, which is further magnified because a large proportion of imports (55%) are destined to N'Djamena while most exports (over 90%) originate in the south, it is unlikely that vehicle utilizationcan be improvedmuch above a 60-65% load factor in the near future, although there is scope for increasingannual haul distarLcesthrough better control of truck supply.

Trucking Capacity

25. The available trucking caeacity consideringonly the CTT fleet (10,723 tons for trucks, and 1,476m for tankers, see para. 9 ), is estimated to be: - 64- ANNEX I

Truck Capacity (million ton-km)

(i) Dry Goods Transport /1 Annual Kilometrage 40,000 60,000 Load Factor - 55% 236 /2 322 - 65% 279 418

Tanker Capacity (million ton-km) (ii) Fuel Transport Annual Kilometrage 50,000 80,000 90,000 100,000 Load Factor - 50% 30 /3 48 54 60 3 (Im = 0.81 tons of fuel)

/1 Includes domestic transport of fuel in barrels or containers. /2 10,723 x 40,000 x 0.55 = 236 million ton-km. /3 1,476 x 50,000 x 0.50 x .81 = 30 million ton-km.

26. Transport demand available for exploitationby Chadian transporters consists of: 85 million ton-km of dry goods transport and 55 million ton-km of fuel transport on internationalroutes; and 45 million ton-km of dry goods transport (includingfuel in barrels) on domestic routes; that is, about 130 million ton-km of dry goods transport and 55 million ton-km of fuel transport.

27. A comparativeanalysis of available transport capacity with transport demand is given below:

Excess Capacity (percent) Dry Goods Annual Kilometrage 40,000 60,000 Load Factor = 55% 82% /1 148% = 65% 115% 222%

Fuel Annual Kilometraget 50,000 /2 80,000 90,000 100,000 /3 Load Factor = 50% -45% /4 -15% -2% 9%

/1 (236-130)/130= 0.82 /2 Equal to 12 round trips between N'Djamena and Lagos per year (1/month). /3 Equal to 24 round trips between N'Djamena and Lagos per year (2/month). /4 (30-55)/55 - 0.45 - 65 - ANNEX I

28. At the existing rate of truck utilization (40,000km/year, and a load factor of 0.55), there is an excess capacity of 80% for dry goods transport. For fuel transport, an undercapacityin the range of 15-45% is indicatedwith utilization of tankers varying from 50,000 to 80,000 km/year. With improved scheduling and better coordinationof transportwith suppliers in Nigeria, the existing tanker fleet could cater for the present demand for fuel transport. The load factor for oil tankers, however, will continue to remain 50% as long as Chad remains an importer of fuel. The foregoing analysis shows that, at the current levels of transport fleet utilization, the supply of fuel tankers would have to be increased, and future import of trucks curtailed in order to strike a closer balance between transport demand and supply. The excess transport capacity, however, is not a source of serious concern considering the average size and poor maintenance of the transport fleet.

Influence of Transport Costs on Consumer Prices

29. The variation in the price structure of a number of commodities from CIF Price, port of entry to retail price in N'Djamena is traced in Table 5, as a function of internationaltransit routes. The average cost of transport per ton between Douala and N'Djamena is about CFAF34,000. Except for sugar and flour, actual transport costs account for at most 20% of the difference in CIF and retail prices. In fact, elevated import duties, distribution costs and markups are the primary contributorsto high import prices in Chad. Therefore, it appears unlikely that a reduction in transport costs by itself will have an appreciable effect on lowering final consumer prices in Chad, as long as taxes and distributioncosts continue to account for the major portion of intermediarycosts. On the other hand, an increase in transport costs would tend to be accompaniedby correspondingincreases in transport tariffs and distributioncosts, which, in turn, would have an inflationaryimpact on consumer prices.

User Charges

30. Total road user charges during 1973-75 averaged about CFAF 1.2 billion. The share contributedby road transport industry is estimated at 50-60% of the revenues. Custom duties and taxes on new trucks are about 40-60% of CIF price, while taxes and duties on spare parts are 60%. The relativelyhigher price of spare parts makes the cost of vehicle maintenance prohibitive,and consequently,results in prolonged immobilizationof a significantpart of the vehicle fleet. ANNEX I - 66 - Table I

CHAD

THIRD HIGHWAY PROJECT

Estimated Demand for Freight Transport 1976-77

InternationalFreight

Transit Route Imports other Exports Total than Petroleum (tons) Exports & Imports (tons) (tons)

Nigeria 15,000 2,000 17,000

Cameroon

- via N'Gaoundere 50,000 37,000 87,000 - via Benoue & others 36,000 8,000 44,000

CAE 14,000 14,000 28,000

Other Overland Rouates 5,500 500 6,000

Subtotal 121,000 61,5001' 182,000

Petroleum Imports (tons)

Nigeria 65,000 65,000

Other Routes 5,000 5,000

Subtotal 70,000 Total 252,000

------__------__------

Ddmestic Freight Tonnage N'Djamena - East and North 21,000

N'Djamena - South

- Beer 20,000 - Other Merchanclize 20,000

Sarh - Moundou 20,000

Farm to Ginnery Transport of Cotton 145,000

Total 226,000

1/ Cotton exports account for about 54,000 tors. Source: - SEDES,'"ianostique Sur l'Industriede Transport Routiere au Tchad"',1977. - Mission estimates. ANNEXI - 67 - Table 2 CHAD

THIRD HIGHWAY PROJECT

Distribution of International Freight Transport Demand by Type of Commodity

1976-77

Tonnage (tons/year)

1. Imports

Petroleum products 70,000

Agricultural related products

Sugar 25,000

Cement 15,000

Fertilizer and Insecticide 16,000

Timber 7,500

Wheat Flour 10,000

Food Products 20,000

Equipment 3,500

Miscellaneous 24,000

2. Exports

Cotton 54,000

Others 7,450

TOTAL 252,450

Source: SEDES, 1977 - 68 - ANNEXI Table 3 CHAD

THIRD HIGHWAY PROJECT

CTT - Distributionof Truck Ownership

Truck Ownership Number of Transporters % (Number)

1 227 64.85

2 63 14.99

3 27 7.70

4 7 2.00

5 10 2.90

6 5 1.40

7 6 1.70

8 1 0.28

9 1 0.28

10 and more 3 0.84

350 100

Source: ORGATEC, "Evaluationde l'Industriedes Transports Routiers au Tchad", 1977. ANNEX I -69- Table 4 CHAD

THIRD HIGHWAYPROJECT

Principal Road Transport Tariffs (Excluding 4.4% Taxe de Chiffre d'Affaire)

A. INTERNATIONALROUTES 1. Dry Goods ------Tariff (CFAF/ton-km) ------Routes Cameroonian Transequatorial1/ Nigerian Item (To N'Gaoundere) (To Bangui) (To Maiduguri)

Sugar 13.5 14.0-20.0 31.2 Cotton 17.0 16.53 15.87 Metal Sheets (+7m) 19.0 16.6-21.4 38.4 Flour 13.5 12.3-15.9 27.4 Cement 13.5 14.1-18.2 38.4 Other Merchandise 18.0 14.8-19.1 38.4

2. Fuel 3 Routes Tariff (CFAF/m -km)

Nigerian Route

- From Lagos 11.76 - From Kano 13.95 - From Maiduguri 20.00

Transequatorial Route 17.0-19.3

B. DOMESTIC ROUTES

------Tariff (CFAF/ton-km)------Item N'Dlamena to: Tracks in Sahelian Sarh Moundou Abeche Zone

Cement 13.8 13.2 20.6 Flour 10.8 10.1 17.5 Metal Sheets 14.7 14.1 23.8 25-46 Other Merchandise 14.7 14.1 19.0 J FueL/ 3/ 16.1 16.1 20.7 - Transport for the Army- 20 20 30 30-66 Transport for Petro- leum Exploitation 19.5 19.5 - 55 Beer3 / - 12.4 -

C. COMPARATIVE ROAD TRANSPORT TARIFFS IN CAMEROON (From N'Gaoundert to North Cameroon, Chad, and CAE)

Item ---Tariff (CFAF/ton-km)---

Metal Sheets 25.0 Rice, Flour, Sugar, Malt, Cement 20.0 Fertilizer 19.0 Cotton 20.0 Other Merchandise- 24.0

1/ Tariff variable depending upon point of origin or destination in Chad. 2/ Price in CFAF/m3 -km. 3/ Tariffs obtained under special contract.

Source: - Chad, "Decret No. 327/PR/TPT/DT", December 4, 1974 - SEDES, 1977 CHAD

THIRD HIGHWAY PROJECT

Intermediary Costs Between CIF Price, Pbrt of Entry, and Retail Price in N'Djamena (CFAF/ton in 1974 Prices)

D i s t r i b u t i o n rn C I F P ri c e , P o r t H an d l i ng I te ItemCIFPrice, Port Handling & . Transport Duties and Costs and Retail Price Port of Charges Storage Cost Costs Taxes CoIrerc±al Entry at the Port Mark-uc

Reinforcing Steel - Cameroonian Route 70,000 175 9,805 19,600 42,504 49,090 191,174 - Nigerian Route 70,000 140 11,675 15,590 41,348 47,939 186,692 - Transequatorial Route 70,000 590 10,346 25,515 42,133 51,335 199,919

Corrugated Metal Sheets - Cameroonian Route 104,800 175 10,260 19,600 64,361 123,501 322,607 - Nigerian Route 104,800 140 12,130 15,590 63,205 121,436 317,301 - Transequatorial Route 104,800 590 10,741 26,110 63,998 127,868 334,107

Tea - Cameroonian Route 170,000 523 17,995 27,183 182,840 105,613 504,154 1 - Nigerian Route 170,000 172 12,580 23,628 180,557 102,538 480,475 - - Transequatorial Route 170,000 972 17,387 38,364 181,750 108,248 516,721 0 Sugar 1/

- Cameroonian Route 100,000 125 5,800 19,945 1,597 - 127,467 - Nigerian Route 100,000 140 7,870 15,690 431 - 194,131 - Transequatorial Route 100,000 690 8,470 25,925 1,102 - 136,187 Flour - Cameroonian Route 68,000 125 6,235 18,700 1,622 19,883 114,565 - Nigerian Route 68,000 140 8,673 13,290 461 19,018 109,582 - Transequatorial Route 68,000 490 6,001 20,200 959 20,086 115,736

Tires less than 15 kg - Cameroonian Route 2,835 740 1,985 1,410 6,970 (Douala-N'Djamena by Air) LightTruck - Cameroonian Route 1,138,600 1,128 32,169 106,500 568,000 398,815 2,245,437 >|

Heavy Trucks - 12 t Payload - Cameroonian Route 4,290,700 2,958 62,510 175,000 1,590,986 1,690,283 7,812,437

1/ Wholesale price to factory. Source: SEDES, 1977. - 71 - ANNEX I Exhibit I CHAD THIRD HIGHWAY PROJECT CTT - ORGANIGRAMME

PRESIDENT

MINISTRY OF ECONOMY, ______- PLAN & TRANSPORT DIRECTORATE OF TRANSPORT

TECHNICAL~~~~~~~~~ CHARTERED| ADVISER | ACCOUNTANT|

_| X ~~~~~~~~DIRECTOR

OPERATION G FIAT

U l _ ~~~~~~~~~~~~SECRETAR IAT

ANT I~~~~~~~ | ______| DIRECTOR

_V NNPERSONNE71 SERVICE

OPERATIONS ACCOU NTS |INVOICING COMPUTING SERVICE SERVICE SERVICE SERVICE

AGENCY AGENCY AGENCY (ABECHE) | (SARH) MOUNDOU)

REPRESENTA- EXTERNAL EXTERNAL EXTERNAL ^ TIVE| | AGENCY AGENCY AGENCY (MAI UGURI) (GAROUA) (NGAOUNDERE) (BANGUI)

World Bank - 18583 - 72 - ANNEX II

CHAD

THIRD HIGHWAY PROJECT

TechnicalAssistance for a Training Program Outline Terms of Refernce

Objectives

1. The ob.jectivesof the technicalassistance for the training program are:

(a) continuationand strengtheningof training of mechanics and other technical staff in the brigades and regional workshops;

(b) implementationof training and seminars for road sector chiefs and other skilled personnel required for the road maintenancebrigades;

(i) a training-productionbrigade for regravelling;and

(ii) the training center; apd

(d) assistanceto DPW in recruitingadditional skilled staff needed to execute the road maintenanceprogram.

Team Composition

2. A team of six technicalexperts will be assigned to DPW. Tentative compositionof the team and the length of each expert's assignmentis summarized below:

Expert Man-months

(a) mechanicalor highway engineer (chief of mission) 45

(b) road maintenanceand constructionexpert 40

(d) expert in equipmentoperator training 40

(e) brigade chief 40

(f) expert in technical/administrativetraining 20

TOTAL 230 - 73 - ANNEX II

The team's exact compositionand detailed schedule of activitieswill be defined in agreement with DPW so that the training program under the Second Highway Project will not be delayed or interrupted.

Qualificationsand Duties

3. Each expert should have:

(a) fluency in spoken and written French;

(b) training experience in his field in order to facilitate professionaland technical instruction;

(d) education commensuratewith the position to be occupied.

Particular qualificationsand functions of the team members are described below:

(1) Chief of Mission

4. The Chief of Mission should be a mechanical engineer (or senior technician)with experience in operation and maintenance of road equipment, or a civil engineer (or senior technician)with experience in road construction and maintenance. He should have at least (a) ten years' experience in road administration,construction and maintenance,as well as in budget matters and cost price accounting; (b) five years' experience in a managerial position in Africa; and (c) five years' experience in technical and professional training, preferably in on-the-job training. Experience in administration and financial management of a constructionfirm and/or in manpower planning and personnel management is desirable. His duties will include:

(i) coordinatingall mission activities and maintaining liaisonwith DPW officials;

(ii) preparing and implementingthe training program in conjunctionwith DPW;

(iii) preparing professionalability tests to be used as a basis for recruitingpersonnel, and recommendingthe personnel to be recruited; and

(iv) preparing a road maintenancemanual.

(2) Road Maintenance and ConstructionExpert

5. He should be a civil technician or road works foreman with at least five years' experience. In particular,he should have extensive knowledge of and experience in (a) constructionand maintenance equipment, (b) use of heavy equipment, (c) various elements of road construction,and (d) soils engineering. He should: ANNEX II

(i) train the work-site chiefs;

(ii) assist in training equipment inspectors and operators; and

(iii) provide practical, on-site training to sector chiefs.

(3) Heavy Equipment Mechanic

6. He sihouldhave at least eight years' professional experience in the use of heavy equipment for public works. His qualifications are as follows: (a) specialization in both diesel and gasoline engines; (b) experience in operation and imaintenance of equipment used in maintenance work; (c) knowledge of vehicle electrical systems; and (d) basic knowledge of general mechanics. His task will lbe to:

(i) train and give refresher courses to diesel- and gasoline-engine mechanics;

(ii) train and give refresher courses to mechanics, mechanic-helper/greasers for workshops and mechanized road units;

(iii) train spare parts storemen; and

(iv) assist in training equipment inspectors.

(4) Expert in Equipment Operator Training

7. This expert should have at least three years' experience in training equipment operators. He should be familiar with the major types of heavy equipment currently used in road construction and maintenance. He will:

(i) train and give refresher courses to operators of varicius types of road machinery; and

(ii) supervise the mechanics and greasers assigned to worksites.

(5) Brigade Chief

8. He should have at least eight years' experience in the use of public works equipment and for periodic maintenance and road construction in general. His duties will be the following:

(i) organizing the training production brigade for regravelling, in collaboration with the Chief of Mission and DPW;

(ii) preparing the manpower and functional organization of the training brigade; - 75 - ANNEX II

(iii) assistingDPW in preparing the training brigade's annual work program;

(iv) supervising the road maintenancework performed by the training brigade; and

(v) ensuring the training of DPW personnel in the above works and that of Chadian counterpartswho will then be able to assume responsibilityfor the training brigade and any other brigades which might be formed.

(6) Expert in Technical/AdministrativeTraining

9. This expert should be a road technicianwith at least ten years of experience in the organization,management and administrationof road maintenance. In particular,he should have good knowledge of working conditions in developing countries. He will have the following tasks:

(i) implementingthe training and/or refresher courses given to the road sector chiefs in the areas of (a) modern techniques of light maintenance of earth roads (cantonnage)and operations to preserve the road surface, (b) basic soil mechanics, (c) preparationof annual light maintenance programs for earth roads, (d) principles of accounting;and

(ii) assisting the chief of mission in all matters related to technical and administrativetraining. CHAD THIRD HIGHWAY PROJECT ProposedFerryboat (Plan)

ENGINE CASING ENGINE /

12.40 BARG 12.40

BARGE ARRANGEMENT I SCALE 1:125 | >4 '-4 1-3

Worldi Bank - 18847 CHAD THIRD HIGHWAY PROJECT Porposed Ferryboat with Truck (Profile)

LONG- VEHICLE TRANSPORT - (PROFILE)

SCALE 1:125 | 4

Hl H World Bank -18848 - 78 - ANNEX IV

Plan of Action

A. Road Maintenance Program

The Government agreed on:

(l) maintenance standards to be used in routine maintenance operations;

(ii) the core network of about 4,000 km to be maintained annually;

(iii) sending to the Association, before October 31 of each project year, the following information on the maintenance program for the subsequent fiscal year: (i) the list of minor tracks (about 1,300 km), other than the core network, and (ii) the proposed roads to be regravelled, with relevant traffic volume estimates.

B. Training Program

The Government agreed to:

(i) provide a daily allowance during the training period, in addition to the normal salary paid by DPW, and cash prizes for outstanding trainees, up to about 12% of estimated recurrent cost of the training program, to serve as incentives to recruit potential new candidates and attract in-service DPW personnel from the distant subdivisions to participate in the program;

(ii) prepare and send to the Association for approval, a detailed curriculum by December 31, 1978;

(iii) assess, in consultation with the Association, by December 31, 1979, future training requirements; and

(iv) give first priority to the road maintenance program in assigning personnel trained under the project.

C. Fellowships

The Government agreed that each candidate for fellowship would be: (a) required to sign a commitment to serve for at least five years after his return in the DPW Department or Service for which the fellowship is granted; (b) considered in full service while on fellowship; (c) approved by the Association, following submission by the Government to the Association of his name, background and other information needed for fellowship award. - 79 -

ANNEX IV

D. Project Monitoring

For the purpose of project monitoring, the Government agreed to designate a project coordinatewho would:

(i) liaise with the Association on matters relating to the progress of the project;

(ii) prepare and send quarterly progress reports to the Association in a format to be agreed between the Government and the Association;and

(iii) prepare a final project completion report.

E. Project Recurrent Costs

The Government agreed to:

I(i) establish and maintain adequate accounting procedures to record revenues to, and expendituresfrom the Road Fund Account;

(ii) earmark to the Road Fund and deposit in the separate Road Fund account the amounts collected from fuel taxes and ferryboat tolls;

(iii) establish in DPW's accountingoffice a sub-acccount to allocate to the project all Road Fund revenues except 13%, or any other percentage to be agreed periodically between the Associationand the Government,required for other road-relatedexpenditures outside the project;

(iv) maintain records adequate to record single and cumulative expendituresfor the project componentsit would finance;

(v) send to the Associationnot later than July 31 and January 31 of each project year, a summary statementas of June 30 and December 31, of (a) total revenues to the Road Fund; and (b) expendituresincurred or committedfor the project by category of disbursements;

(vi) review in consultationwith the Associationnot later than December 31, 1979 (a) the amount of road funds requiredfor project recurrent costs over the remainingproject period and (b) the feasibilityof increasingRoad Fund revenues to fully cover recurrentmaintenance expenditures including equipmentdepreciation. - 80 - ANNEX V

CHAD

THIRD HIGHWAY PROJECT

Technical Assistance for Strengthening Equipment Maintenance Operations of the Directorate of Public Works

Outline Terms of Reference

Oblectives

1. The objectives of the technical assistance are the following:

(a) to establish the new Equipment Inspection Office (EIO) and Procurement Office (PO);

(b) to convert subdivision workshops into equipment centers;

(c) to assist DPW in (i) purchasing road equipment and all other equipment or tools related to the use and maintenance of road equipment; (ii) supervision of construction works and improvement of Buildings; and (iii) setting up tools and equipment;

(d) to train on the job, management personnel and, in general, staff required for the offices mentioned in (a) and (b) above; and

(e) to establish a cost accounting system for equipment.

Composition of the Team

2. A team of six technical assistance experts will be assigned to DPW. The composition of the team and the estimated length of service of each expert can be summarized as follows:

Expert Man months a. for EIO: one mechanical engineer (or senior technician), Chief of Mission 30 b. for PO: one senior mechanical technician 30 c. for Subdivision workshops: four mechanics (30 man months each) 120

180 - 81 - ANNEX V

The exact compositionand schedule of activities of the team will be defined in agreementwith DPW so as to best meet the objectives of strengtheningDPW.

Qualificationsand Functions

3. Each expert should: (a) be fluent in French; (b) have training experience in his field; (c) be experienced in working in a developing country; and (d) have education commensuratewith the position to be filled. Specific qualificationsand functions of the different team members are describedas follows:

Mechanical Engineer (or Senior Mechanical Technician)

4. He should have at least ten years of experience,of which six in managing workshops and maintaining public works equipment. He will serve as advisor to the Director of EIO, with whom he will collaborateclosely in setting up EIO's organizationand in improving, equipping and overseeing subdivision procurementoffices. In particular, he will:

(a) direct and supervise the rehabilitationof existing equipment;

(b) participate in all phases of purchasing spare parts, equipment, tools, etc.;

(d) conceive and implement systematic methods for setting up and maintaining road maintenanceequipment;

(e) conceive and carry out the establishmentof an analytical accounting system for the sound use of equipment;

(f) define the functions of the central workshop and the subdivisionequipment centers;

(g) train technical staff assigned to EIO;

(h) standardizework methods and establish functional relationships between the subdivisionsusing the equipment and the central offices; and

(i) supervise the establishmentand management of EIO.

Senior Management Technician

5. The technician will have appropriatetechnical and managerial qualifications,with at least seven years' experience in setting up stores and procurement of equipment and spare parts. He will serve as Deputy to the Director of PO. In particular,he will: - 82 - ANNEX V

(a) organize,in close collaborationwith the mechanical engineer/chiefof mission, the new PO and supervise its operation;

(b) recei'veand verify orders for spare parts submitted by the subdivisionsand order those parts which PO does not have in stock;

(d) provide on-the-job training to Chadian staff, i.e., the procurementofficer, forwarding agent, storemen and accountant.

Four Mechanics

6. These mechanics will be well qualified and will have at least five years' experience in repairingand maintainingpublic works equipment. They will participate in organizing the subdivisionequipment centers and ensure their efficient operation. They will advise either a subdivisionChief on matters relating to equipment,or the chief of a subdivisionequipment center. They will be assigned to subdivisionheadquarters and will occasionallytake field trips, if necessary. In addition, they will assist in the more general activities carried out by the experts assigned to EIO and PO. - 83 - ANNEX VI

CHAD

THIRD HIGHWAY PROJECT

Technical Assistance for the Reorganizationof the Road Planning and Design Office

Outline Terms of Reference

Qualificationsand Duties of the Engineer/Economist

1. He should hold a graduate degree in highway engineeringwith some background in transport economics and have at least five years' experience in the technical and administrativeaspects of preinvestmentstudies, engineering design, project execution and supervision of works. He should speak and write fluent French. Experience in a developing country is preferred.

2. The expert will be the technical advisor to the Director of RPDO and assist him in the tasks outlined in paras. 3-6. He will participatein these tasks and train Chadian staff so that they would be able to continue the work once the expert's services have been expired.

3. RPDO's tasks consist of: (a) planning of road investments;(b) design of road improvementsand construction;and (c) supervisionof road construction. These activities are detailed below.

Road Investment Planning

4. This ftnction will encompass the following activities:

(a) road inventory and classification,to be revised periodically as necessary;

(b) traffic studies with periodic updating, to be carried out with the assistance of DPW subdivisions;

(d) preparation of design standards for different types of roads;

(e) determinationand annual revision of unit prices for road maintenance and construction;

(f) determinationand annual revision of vehicle operating costs;

(g) preparationof the annual road investmentbudget; and - 84 - ANNEX VI

(h) execution of road improvement feasibilitystudies or supervisionof those prepared by consultants.

Road Improvementand ConstructionProjects

5. RPDO will assist in preparation of final engineeringand bidding documents for road improvementand constructionprojects under DPW's responsibility. It will prepare in-house technical studies for small projects and supervise the more complex studies prepared externally.

Supervision of Road ConstructionWorks

6. RPDO will be responsible for supervisionof road constructionworks under DPW's charge. The works will be supervisedby RPDO within the limits of availablepersonnel. RPDO will oversee works supervisedby other offices. - 85 - ANNEX VII

CHAD

THIRD HIGHWAY PROJECT

Outline Terms of Reference and Qualificationsfor a Transport Economist for the Directorate of Transport

1. The transporteconomist will help the Director, DT, to organize DT and assist in elaboratingand applying a rational transportpolicy. In particular he will:

(i) participateand supervise in the collection and annual publicationof transport statistics and preparation of technicalreports on:

(a) vehicle fleet inventoryby type and age, on a country-widebasis with provisions for annual updating;

(b) proposal for revised of surface transport tariffs in light of the recommendationsmade by consultant SEDES, under the Second Highway Project, and consultant ORGATEC;

(c) review of road user charges from the viewpoint of equity and efficiencyconsiderations, including the identificationof financial resources for creating a financiallyautonomous road maintenance authority by 1985, and fiscal measures aimed at reducing the cost of spare parts to ensure improved vehicle maintenance;

(d) assessmentof the future needs of the vehicle fleet in light of the present excess trucking capacity,and if necessary,recommendations for regulation of vehicle imports;

(e) recommendationsfor reducing import duties on spare parts and the effect of these measures on road user revenues;

(f) review of Chad's internationaltransit agreements and preparationof proposals for revision of these agreements;

(g) measures directed at harmonizing road regulations between Chad and its neighbors, especially Nigeria; and - 86 - ANNEX VII

(h) establishmentof scheduled inter-dty bus transport in Chad.

(ii) assist.in inter-departmentalcoordination for transport planning and enforcementof road traffic regulations;

(iii) develop a system of periodic analysis of freight transport demand to establish the freight allocation system within CTT on a scientific basis, and provide assistance to CTT on economic and statisticalmatters;

(iv) collect and analyse financial and operational statistics of the transport industry (CTT, Air Tchad, and other transport entities);

(v) establishand organize an advisory committee, comprising representativesof concerned Governmentministries, shippers, CTT, freight forwarders,the Chamber of Commerce, and other related groups, to help formulatea national freight transport policy and to resolve operationaldifficulties arising from time to time in freight transportoperations. The Director of DT would act as chairman of the advisory committee;and

(vi) establisha system for classificationof trucks, and formulate criteria for road transportoperations on internationaland domestic routes.

Qualifications

2. The expert should hold a graduate level degree in economicsand should have at least five years of post-graduatework experience in transport planning and operations. He should be familiar with regulationsand tariff setting for various transportmodes. He should have worked for some time in a developing country, preferably in West Africa. He should be fluent in French. - 87 - ANNEX VIII

CHAD

THIRD HIGHWAY PROJECT

Outline Terms of Reference and Qualificationsof the Trucking Industry Expert to be Attached to CTT

Functions

1. The trucking industry expert will serve as a technical adviser (operations)to the President, CTT, and provide technical assistance to CTT's Assistant Director responsible for freight operations. In particular,he will:

(i) review the transport operations of CTT, and suggest methods to improve them:

(ii) evaluate the freight allocation system within CTT, and devise a more equitable and efficient method, if necessary;

(iii) collaboratewith DT to:

a) establish a system for classificationof trucks, and formulate criteria for operations on international and domestic routes;

b) establish and organize an advisory committee for coordinatingfreight transport operations;

c) recruit an appropriatelyqualified Chadian for training abroad in trucking operations;and

d) arrange appropriatepractical training (for a six- month period) abroad for CTT's Assistant Director, responsible for freight operations.

(iv) explore the possibilityof creating an external branch of CTT in Douala with a view to expedite transit of Chadian goods through Cameroon;

(v) determine the feasibilityof establishing:

a) inter-citybus transport; and

b) workshop for maintenanceof the truck fleet as part of CTT operations;and

(vi) prepare a final report on his assignment includingrecom- mendations for improving the efficiencyof freight transport operations. - 88 - ANNEX VIII

Qualifications

2. The expert should hold a graduate degree, preferably in economics or finance, and have five years experience in the transportfield with at least three years in trucking industry operations,preferably in a freight forwarding agency or freight bureau. Managerial experience in a multi- national transport organizationwould be desirable. He should have worked for some time in a francophoneAfrican country, and have familiaritywith French transport industry regulationsand legislation. Fluency in French is mandatory, while some knowledge of Arabic would be useful. - 89 - ANNEX IX

CHAD

THIRD HIGHWAY PROJECT

Rural Roads Study Outline Terms of Reference

A. Scope of the Study

1. The study shall examine transportneeds in rural areas of Chad and propose the most economicway of meeting these needs. Excluded from the study are primary and secondaryroads to the extent that they do not impose an importantobstacle in the way of the flow of goods and persons to and from the rural network. Although it is expected that the study shall be mainly concernedwith the construction,improvement and maintenanceof roads, the study should also examine alternativemeans of surface transport (e.g. appropriate vehicles and barge transport).

2. The proposed study shall be carried out within the overall framework of the country's developmentplan and, in particular,the developmentof the transport and agriculturalsectors. In addition to normal engineeringand economic criteria, the study shall concern itself with the social needs of the population and the extent to which the rural populationcan participate in the constructionand maintenance of rural road facilities,or associated infrastructuralneeds (which shall be identifiedby the Government)such as small dams, wells and grain stores.

3. The general objectiveof the study will be the developmentof a long-term (ten-year)strategy and a four-yearprogram of rural road development and maintenace. This strategy and program shall be related to priority economic and social objectivesand will include proposals for the most efficient way of implementationincluding physical, personnel and institutional requirements. Where it seems appropriate,consideration should also be given to road making units' participationin other infrastructureactivities in the areas in which they are already working.

B. Methodologyof the Study

Identificationand PreparationProgram

(a) study and identificationof economic and social goals and the translationof these into specific projects and project areas;

(b) determinationof existing and future transportneeds to maintain efficientlyexisting economic and social activity and to promote planned economic and social activity,paying particularattention to populationpatterns, existing and potentialagricultural production and the needs of surplus and deficit areas; considerationshould be given to ongoing road programs and agriculturalprojects; - 90 - ANNEX IX

(c) inventory of existing transport facilities, and hydrological data, soils and materials surveys, and estimationof the cost of transportationusing the existing facilities;

(d) estimate of the cost of constructing,improving and maintaining identified transportneeds to the most economic level, paying particularattention to constructiontech- niques, includinglocal participationand estimation of transportcost savings associated with the improvements;

(e) study and evaluation of the agriculturalpotential within areas of interest;this study shall be supportedby a suf- ficientlydetailed sociological/anthropologicalassessment of huimanattitudes, achievementsand potential;

(f) evaluation of induced economic and social benefits that would follow from improvementsto the transport system; in producing these estimates,attention should also be paid Ito possible associated infrastructureinvestments;

(g) a cost benefit analysis of the proposed transport improvement projects and associated infrastructureinvestments over a ten-year period using, where appropriate,economic and shadow pricing techniques;and

(h) preparationof a long-termstrategy and a four-yearprogram of rural transportationimprovement and maintenance,based on the above surveys and analyses,paying due regard to areas of risk and uncertainty.

ImplementationStrategy

(a) examine the structuresand capabilitiesof existing organizationengaged in construction,improvement and maintenance of transportfacilities in relation to the proposed improvementprogram and other commitments;

(b) recommendthe optimum practicalmethod of executingthe proposed program (considering(a) above) including,where necessary, institutionaland administrativechanges;

(d) specify technicalassistance needs at all levels and Chadian personnel to carry out the proposed program;

(e) specify training needs for implementingthe proposed program and for providinga capabilitywithin the Government to undertake future studies, design and project implementation; and

(f) use of the Government'sDirectorate of Mines and ENTP, with appropriatetechnical assistance, to carry out the soils and materials survey. - 91 - ANNEX X

CHAD

THIRD HIGHWAY PROJECT

Economic Analysis of the Project

A. Engineering-EconomicAnalysis of the Road MaintenanceProgram

1. The evaluation of the maintenance program is based on a dynamic analysis that relates maintenance costs to vehicle operating cost (voc) savings by evaluating the effect of maintenance operations on road surface condition which, in turn, influences the cost of vehicle operation. The mathematicalmodels that relate road surface condition and vehicle operating costs to traffic were developed under the IBRD/TRRL research program in Kenya.

Road DeteriorationRelationships

(a) Lateritic Gravel Roads

R = 3250 + 84 T - 1.62 T + 0.016 T

RD = 11 + 0.23 T - 0.0037T + 0.000073T3

LD = 1.5 + 14e

GL = 0.9 5- (4.2 + 0.092T + 3.5 R + 1.88 VC) a

(b) Sandy-Clay Earth Roads

R = 3250 + 785 T

RD = 14 + 1.2 T

LD = 1.5 + 14e 023T; under dry grading with LD > 10.0 mm.

LD = 1.0 , under wet grading - 92 - ANNEX X

R 3250 + 1255 T

RD = 14 + 1.2 T

LD = 1.5 + 14e 0-23T; with LD > 10.0 mm.

where, R = mean roughness (mm/km)

RD = rut depth (mm)

LD = depth of loose material (mm)

T = cumulative traffic volume in both directions since last grading (thousandsof vehicles)

GL = annual gravel loss (mm)

T = annual traffic volume in both directions a (thousandsof vehicles)

RI = annual rainfall measured in meters

VC = rise and fall, vertical curvature (%)

The Kenya study relationshipsfor sandy-clay earth roads and tracks were modified to reflect the relativelydry environment in Chad.

Vehicle Operating Cost Relationships

2. Except for vehicle depreciation,crew cost, and insurance, all other VOC componentswere calculatedfor four typical vehicles using the Kenya Study 1/ equations relating the various physical components (e.g. fuel consumption)of voc to road surface deteriorationfunctions. For vehicle depreciation,the method recommendedin "Quantificationof Road User Savings" 2/ was used. Phys- ical components of VOC were then translatedinto costs, net of taxes. The review of these results showed that once the road characteristicswere fixed, both road surface deteriorationparameters and vehicle operating costs would be related to the same common variable, traffic. Accordingly,the composite

1/ TRRL Report 672 "The Kenya Road Transport Cost Study: Research on Vehicle Operating Costs," 1975.

2/ World Bank Staff Occasional Paper No. 2, 1966. - 93 - ANNEX X vehicle operating costs determined for the four vehicle types were regressed with cumulative traffic (T). The results of the regression analysis are presented in Table 1. The average road and environmentalcharacteristics assumed in developing VOC relationshipsare: moisture content, 3%, average rise, 30 m/km; average fall, 30 m/km; average horizontal curvature, 175 degrees/km;and average altitude, 375 m. Although these characteristicsare somewhat severe, the sensitivityof VOC to these elements, within the range used in this evaluation,was not significant. One of the reasons for using these characteristicswas to reconcile actual consumptionof VOC components observed in Chad to those predicted by the model.

Traffic

3. Since the available traffic counts date back to 1970, forecasts for 1978 were made by relating general economic trends to traffic. It was assumed that there was no traffic growth during 1970-74 (the drought years); between 1975-78, 3% traffic growth per annum in Cotton Zone, 2% around N'Djamena and 1% in the Sahel Zone. Beyond 1978, an average traffic growth of 3% per annum was assumed for the whole network. These estimateswere modified to account for a diversion of 35-40,000 ton of internationaltraffic from the Transequatorialto the Cameroonianroute between 1970-74. The distributionof traffic by vehicle type was assessed in the light of 1970 traffic counts and changes in the characteristicsof the vehicle fleet since then.

Determinationof Benefits from Reduced Vehicle Operating Costs

4. With the formulationof VOC equations shown in Table 1, savings in vehicle operating costs can be estimated directly as follows:

(i) determinationof a composite VOC equation by weighting the VOC equations for different vehicles by their respective percentages in the traffic distribution;

(ii) summation of the total vehicle operating costs for the accumulatedvehicles between grading intervals for a given maintenance strategy (e.g. 2 gradings/year);

(iii) summation of the total vehicle operating costs for the accumulatedvehicles between grading intervals for an alternate maintenance strategy (e.g. regravellingand 2 gradings/year);

(iv) calculation of VOC benefits as the difference of total vehicle operating costs correspondingto the two maintenance strategies,respectively. - 94 - ANNEX X

Mathematically,this can be expressedas:

VOC Savings = Sf(T)1 dT - 5f(T)2dT

where: f(T)1 - VOC equation correspondingto strategy 1

f(T)2 = VOC equation correspondingto alternate strategy 2

This procedure simplifies the calculationof benefits and does not require discrete addition of vehicle operating costs. For example, VOC benefits from two gradings per year, as compared to one grading per year on a sand-clay earth road, for a traffic stream containing only light vehicles (VL) can be expressedas:

X L

B = SIOOO (50721 + 3152.7T - 61.16T2) dT - 2(1000) 50721 + 3.152.7T - 61.6T2)dl

= 100003152.72 - x2) 61.16(x3 - x

where: x = accumulatednumber of vehicles per year in thousands

B = VOC benefits in CFAF/1000km

Determinationof MaintenanceStrategies

5. The design of the maintenanceprogram required the determination of the traffic level at which regravellingwould be economicallyjustified, and the optimal grading strategies for various classes of roads to be included in the routinemaintenance program. The Bank's Highway Design and Maintenance StandardsModel was used for this purpose. The summary of the results showing breakevenaveraged daily trafficwhere regravellingbecomes economicallyjustified as a function of unit cost of regravellingis shown in Exhibit I. The benefits used in this analysis included incrementalreductions in vehicle operatingcosts due to regravellingas compared to routinemaintenance and stockpilingcosts for two months, resultingfrom road closures to all-weatherservice. For one-monthcontinuous stockpiling, the total discountedstorage costs were estimatedat CFAF 0.2 million per km of road closure. On basis of this analysis,it was concluded that: (i) 7 meter wide regravellingby contractorwas economicallyjustified only on roads with base traffic over 65 vpd; and (ii) about 400 km with base year ADT in the range of 45-50 vpd could be included in the regravellingprogram by the training brigade.

6. The optimal grading strategiesfor routinemaintenance were obtained by determiningthe grading frequencythat resulted in maximum net present value for a given class of road (Table 2). - 95 - ANNEX X

Benefit/Cost Analysis of Regravelling (PeriodicMaintenance) 1/

7. (M) Costs - Total cost of equipment for the training/ production brigade; cost of technical assistance directly used for operation of the training brigade; and operating recurrent costs of the brigade.

(ii) Benefits - Incrementalreduction in vehicle operating costs over and above the reduction produced by incremental routine maintenance.

(iii) Salvage Value - (a) At the end of the project period, regravellingequipment would have been used for only one-half of its economic life, therefore a 50% salvage value was assumed; and (b) as the regravellingcycle was calculated to be about 8 years, the remaining thickness of the gravel surface was assigned a ter- minal value.

(iv) Traffic - Traffic was assumed to grow at a rate of 3% per annum with a base year weighted ADT of 51 vehicles. Traffic distributionwas taken as light vehicles (VL)-45%,13t medium trucks (CMS)-15%, 27t medium truck-trailer (CMR)-25%,and 38t heavy truck-trailer (CLR)-15%.

(v) Economic Return - IRR = 16.7%

B/C @ 12% = 1.31 B/C @ 15% = 1.11

The details of the analysis are presented in Table 3.

Benefit/CostAnalysis of Routine Maintenance

8. The network was first classified into 15 sections according to type of road and the estimated traffic distribution (Table 4). The maintenance output with and without the project is given in Table 5. Benefits were taken as the VOC savings resulted from routine maintenanceoperations with and without the project and accumulatedover 15 classified sections and categorizedin three broad road categories. The details of the analysis are presented in Table 6.

(i) Costs - Cost of maintenance and workshop equipment,spare parts, buildings, technical assistancefor strengthening DPW (other than road planning) and incrementalrecurrent maintenance expenditures;

1/ The results of all benefit-costanalyses reflect costs and benefits adjusted by appropriate shadow-pricingfactors, namely 1.15 for foreign exchange and skilled labor, and 0.30 for unskilled labor. - 96 - ANNEX X

(ii) Benefits -. Reduction in vehicle operating costs due to improved routine maintenance;

(iii) Traffic - 3% growth per annum; traffic distribution as given in Table 4;

(iv) Economic Return - IRR = 75%

B/C @ 12% = 3.25

B/C @ 20% = 2.66

Benefit/Cost Analysis of Maintenance and Training Programs Combined

9. As it was difficult to distribute the benefits of the training program between periodic and routine maintenance, a further analysis, including the training program costs, was made. The additional costs (besides the costs of regrave]Llingand routine maintenance) comprised:

(i) 81% of cost of technical assistance and recurrent expenditures for the training center, spread over four years reflecting the proportion of trained personnel to be assigned to the project. Prorated cost (81%) of training equals CFAF 88.8 million per year for technical assistance and CFAF 48.3 million per year for operating expenditures over a 4-year period. As the benefits of the training program were assumed to be distributed over about 25 years, a 66% 1/ residual value was assigned to the training program cost included in the analysis.

(ii) The life of equipment for the training center was taken as 15 years. These equipment costs, amounting to CFAF 21.5 million in the first year of the project, were also included in the analysis; the equipment is assumed to have a 33% salvage value.

(iii) The combined incremental vehicle operating cost savings for routine and periodic maintenance were taken as benefits.

(iv) The economic rate of return for the overall maintenance program was found to be 51.4%, equivalent to a benefit/cost ratio oE 2.2 discounted at 12%.

1/ 66% = (15/25 + 16/25 + 17/25 + 18/25) 1/4. Residual value of first year training program cost was taken as 15/25; for the second third and fourth years, cost residual value was assumed to be 16/25, 17/25 and 18/25 respectively. - 97 - ANNEX X

B. Economic Analysis of Ferries

General

10. The project includes the replacementof four ferries at Bongor, Lai, Bousso, and Hellinbongo through local constructionof ferry boats. The existing ferries are over 30 years old and are subject to frequent breakdowns causing extended traffic delays. It is estimated that ferry service at the above locations will cease to function within the next five years; the Hellibongo ferry, however, could be restored with provision of new boats and related appurtenances.

Costs

11. The costs of this project component include expendituresfor detailed design and specifications,cost of technical assistance for work supervisionand training, and cost of workshop equipment and construction material. Of these costs, the share assigned to the project were 70% of design costs and 100% of all other capital expenditures. The costs were divided equally among the four ferry boats. All costs are expressed in December 1977 prices. The expected life of new ferries is 25 years with a salvage value of about 10%.

12. The maintenance cost of existing ferries is estimated at CFAF 2.2 million per ferry and is expected to increase by 10% per annum during the remaining 5 years of the estimated life span of the ferries. Engine renewal on new ferries is expected every 15 years while, on the old ones, the renewal cycle was 10 years. Maintenance cost of new ferries is estimated at CFAF 0.64 million. For Hellibongo, the option of renovating the existing ferry was also considered. The total cost of improvementswas estimated at CFAF 42.6 million spent over two years. These improvements would reduce the existing maintenance cost of Hellibongo ferry by about 50%. Future average maintenance cost of new ferries, as well as the Hellibongo ferry, were assumed to remain constant during the first five years, to increase by 15% for years 6 to 15 and by 35% for years 16 to 25.

13. The operating cost of existing ferries comprisesan estimated fixed cost of CFAF 1.15 million/yearand a variable cost of CFAF 1400 per hour of operation, while, for new ferries, the fixed and variable costs are CFAF 0.73 million, and CFAF 2630/hr, respectively. The time for an average round trip by existing ferries is about 30 minutes while, for the new ferries, it is estimated to be 20 minutes.

Benefits

14. General benefits associatedwith provision of new ferries consist of reduction in maintenance and operation costs of the ferries and vehicle operating cost savings from traffic diversion to shorter routes, use of - 98 - ANNEX X larger trucks, reduced waiting time, and avoidance of economic dislocation resulting from the loss of ferry service. Vehicle operating costs used in calculatingvoc savings were estimated as follows according to road type and vehicle:

Vehicle Type Road Surface VOC (CFAF/km)

CLR Paved 181 Gravel (ERL) 225 Gravel (PERL) 248 Earth (SC) 282 Track (Maintained) 309 Track (Unmaintained) 434

CMR Earth (SC) 219 Track (Maintained) 239 Track (Unmaintained) 350

GMS Track (Maintained) 134 Track (Unmaintained) 161

Handling costs avoided under the project were valued at CFAF 500/ton.

a. Bongor Ferry

15. Situated 240 km upstream from N'Djamena on the Logone River, the Bongor ferry serves to connect Bongor with the internationalroutes in Cameroon. It also provides the only direct link between Bongor, the prefecture headquarters,and parts of Mayo Kebbi prefectureacross the Logone. Although the existing ferry has a payload capacity of 25 t, its deck cannot accommodatetruck-trailer units. With the provision of new ferry, cotton export traffic originatingin Onoko and Bongor, and destined to N'Gaoundereor Garoua would travel via Fianga and Lere rather than via Lai, Kelo and Lere. It is also estimated that 50% of cotton transport demand generatedby the ginneriesat Fianga, Pala and Gounou Gaya would be serviced by trucks on the return haul from N'Djamenavia Bongor rather than via Lai. With complete disruptionof existing ferry service expected in five years, about 1/2 of the light and medium truck trafficwould be obliged to travel an extra 100 km on every trip from Bongor to the left bank of Logone. Benefits derive from voc savings resultingfrom diversionof export traffic to new ferry and avoidanceof diversionof local traffic to longer routes. Traffic projectionsand details of the economicanalysis are given in Tables 7 and 8. The estimatedeconomic rate or return for Bongor Ferry is 60% with first year benefitsof about 48%.

b. Lai Ferry

16. Situated on the Logone, 390 kilometersupstream from N'Djamena, the existing ferry cannot handle heavy traffic betweenMoundou and N'Djamena. The provision of a larger ferry would reduce the distance between N'Djamena and Moundou, by 93 km for transportof fuel, beverages and other general - 99 - ANNEX X merchandise using heavy trucks. Additional benefits would accrue to transport ofEseed cotton from the right bank of Logone to the ginnery at Kelo, which has excess capacity. The external transport of cotton ginned at Guidari would gain from vehicle operating cost savings resulting from a distance re- ductioa of 147 km. Traffic projections and details of economic analysis are given in Tables 9 and 10. Based on the foregoing assumptions,the investment in Lai ferry is expected to yield an economic return of 44% and first year benefits are estimated at 43% of investment costs.

c. Bousso Ferry

17. Located 300 km downstream from N'Djamena on the Chari River, it connects Bousso, a market town and the administrativecenter of the Bousso sub-prefecture,located on the right bank of Chari with the main N'Djamena- Sarh route. The ferry is indispensableto the operation of the ginnery in Bousso, as about 60% of seed cotton ginned here comes from the left bank. Since the ferry cannot accommodate truck-trailers,baled cotton is first ferried across the river in small trucks to Mogo where it is transferred to larger trucks for export. The envisaged developmentof 16 irrigation perimeters in the vicinity of Bousso would depend on the ferry for transport needs. If the ferry service were to terminate, Bousso would be effectively isolated, its only outside link being to Massenya via tracks that are virtually impassable. Traffic projections and details of the economic justificationare presented in Tables 11 and 12. Although the first year benefits for this ferry are lower (about 11%) compared to other ferries, the ferry needs to be replaced as early as possible to avoid the possibility of economic dislocationin the Bousso area. The economic return for Bousso ferry is estimated to be about 27%.

d. Hellibongo Ferry

18. Serves as the southern gateway to the Sahel zone. Of all the ferries included in the project, Hellibongo has the highest justification in terms of its impact on the economy of the region it serves. Loss of ferry service at Hellibongo would result in closure of cotton ginneries in Kyabe and Am Timan, return to subsistencefarming on land used for grow- ing cotton on the right bank of Chari near Sarh, and permanent disruption of the only viable transport link between Sarh and the Sahelian prefectures of Guera, Ouaddai and Salamat. The ferry is also vital to petroleum and mineral explorationin north Chad; in fact, the ferry was partiallyreno- vated recently with assistance from petroleum explorationcompanies. The traffic projections and details of economic justificationare presented in Tables 13 and 14. The primary benefits result from reductions in ferry maintenance and operating costs, avoided handling charges, and substitutionof single-unittrucks by larger capacity truck-trailerunits for transportof cotton from ginneries at Kyabe, Am Timan, and Melfi. The economic rate of return for replacementof this ferry is 31% with first year benefit estimated at 24%. CHAD

THIRD HIGHWAY PROJECT

Vehicle Operatin,;Cost Equations

1/ Upper Bound Road Surface VOC Estimation Equation- Maximum 'Numberof Coefficient of Standard Error Limits onVOC and T Observation Determination of Estimate (CFAF'G0j Vehicle Type R2

2/ l nterite- VL VOC = 52264 + 2.31T2 100 19 0.985 453 76 CMS VOC = 96147 + 5.30T2 100 19 0.991 802 150 CMR VOC = 169780 + 10.34T2 S0 19 0.984 2091 250 CLR VOC = 211172 + 13.64T2 80 19 0.984 2683 300 3/ Sand-Clay l3 VOC = 50721 + 3152.7T - 61.16T2 30 17 0.987 1646 92 CMNS VOC = 94560 + 4547.OT - 65.18TZ 30 17 0.994 2056 173 1 2 C'R VOC = 165690 + 8509.3T - 106.95T 30 17 0.994 4154 325 H CLR VOC = 204287 + 12591.9T - 194.71T2 30 17 0.994 5510 410 - Track VI VOC = 50681 + 5270.5T - 197.24T2 + 0.07T4 30 17 0.986 1817 91 CMS VOC = 94212 + 7605.7T - 259.54T2 + 0.1OT4 30 17 0.991 2528 170 2 CYR VOC = 165393 + 14300.5T - 475.21T + 0.20T4 30 17 0.992 4712 330 CLR VOC = 203632 + 21188.9T - 747.90T2 + 0.30T4 30 17 0.990 7102 410

1/ VOC's on partially engineered roads taken 10% higher Legend than V0C's on engineered roads. T = Cumulative traffic volume since last grading in 2/ Applies to gravel roads with at least 4cm of laterite. both directions (1000 vehicles). 3/ Applies to earth roads, and gravel roads with less VOC = Vehicle Operating Cost (CFAF/1000 km). than 4cni of laterite surface. VL = Light goods vehicle (2.5 t). CMS = Medium truck (13 t). CiR = Medium truck/trailer (27 t). CLR = Feavy truck/trailer (38 t).

Source: Mission estimates. lb

H >1 - 101- ANNEX X Table 2

CHAD

THIRD HIGHWAY PROJECT

Optimal Grading Frequencies

Gravel Roads Earth Roads Tracks (Laterite) (Sand-Clay)

1. Approximatelyoptimal number of 7000 5000 3000 vehicle passes per blading

2. Base Year Traffic = 45 vpd

(a) t (45 vpd X 30) 5.2 3.7 2.2

Grading Interval (months) 5 4 2

Grading Frequency/Year 2 3 6

3. Base Year Traffic = 20 vpd

(a) + (20 vpd X 30) 11.7 8.3 5.0

Grading Interval (months) 12 8 6

Grading Frequency/Year 1 2 2

4. Base Year Traffic = 6 vpd

(a) ; (6 vpd X 30) - - 16.7

Grading Interval (months) - 12

Grading Frequency/Year - 1

Source: CPS (Transportation) - 102 - - 102 - ~~~ANNEXTable _X3 CHAD

THIRD HIGHWAY PROJECT 1/ Regravelling- Benefit/CostAnalysis

Benefits Costs (CFAF millions) VOC Savings (CFAF millions) 2 Year Equipment Technical Recurrent Regravelling!/ Net Assistance3 / Expenditure Salvage Value -Alt.15J/*Alt.21/ Incremental6/ Benefits (Alt.2-Alt.1)

1 448.8

2 19.5 113.6 167.4 196.6 24.2

3 19.5 113.6 175.8 252.3 76.5

4 19.5 113.6 182.8 313.6 130.8

5 -224.4 19.5 113.6 192.4 394.8 202.4

6 648.8 897.2 248.4

7 660.1 921.9 261.8

8 673.1 950.9 277.8

9 -141.9 685.6 979.8 294.2

Without Shadow Prices: IRR = 17.2% With Shadow Prices: IRR = 16.7% B/C @12% = 1.26 B/C @ 12% = 1.31 B/C @15% = 1.10 B/C @ 15% = 1.11

1/ The analysis is based on the followingassumptions: (a) equipment life = 8 years with a 50% salvage value aEter 4 years; (b) traffic growth = 3% per annum; (c) base ADT = 51 vpd; (d) all benefits and costs in Dec. 1977 prices; (e) benefits realized through incremental reduction in vehicle operating costp; and (f) regravelling(lOnthick)calculated cycle to be about 8 years, reflectingan average annual gravel loss of about 12mm/year. 2/ 100% of training brigade equipment costs assigned to regravellingoperations; the 50% salvage value applied at end of training program. 3/ 100% of technical assistance directly used to supervise regravellingoperations. 4/ Salvage value of remaining gravel, (448.8+ 4(133.1) - 224.4) X (1/8 + 2/8 + 3/8)1/4 = CFAF 141.9 millions. 5/ MaintenanceAlternative"l"= 2 gradings/year+ other routine maintenance MaintenanceAlternative"2"= Regravelling @ 100 km/year + 2 gradings/year+ other routine maintenance. Without Project Case = one grading/year+ other routine maintenance for initial three years of project, no maintenance thereafter. 6/ Net Incremental Benefits Due to Regravelling = (VOC2 - VOCO) - (VOC1 - VOCn), where subscriptsrefer to maintenance alternatives and VOC to vehicle operating costs. Source: Mission estimates. - 103 - ANNEX X Table 4

CHAD

THIRD HIGHWAY PROJECT

Classificationof Road Network for Economic Analysis of Routine Maintenance

Section: Road Type Length Weighted Base Distribution of Traffic (km) ADT (vpd) %VL %CMS %CMR %CLR

1. Engineered Laterite (ERL) 395 51 45 15 25 15

2. Engineered Laterite (ERL) 276 15 45 15 25 15

3. Partially Engineered Laterite (PERL) 79 47 45 15 25 15

4. Engineered Sand-Clay (ERSC) 63 45 45 15 25 15

5. Engineered Sand-Clay (ERSC) 98 41 45 30 0 25

6. Engineered Sand-Clay (ERSC) 175 17 45 30 0 25

7. Partially Engineered Sand-Clay 83 30 45 30 0 25

8. Partially Engineered Sand-Clay (PERSC) 49 34 45 15 25 15

9. Partially Engineered Sand-Clay (PERSC) 150 17 45 15 25 15

10. Partially Engineered Sand-Clay (PERSC) 259 9 45 30 0 25

11. Major Tracks 99 34 45 15 25 15

12. Major Tracks 846 17 45 15 25 15

13. Major Tracks 72 13 45 55 0 0

14. Minor Tracks 1544 5 45 55 0 0

15. Minor Tracks 1130 7 45 15 25 15

TOTAL 5318

VL = Light goods vehicle (2.5 t). CMS = Medium truck (13 t). CMR = Medium truck-trailer (27 t). CLR = Heavy truck-trailer (38 t).

Source: Mission estimates. BCEOM - 104 - ANNEX X Table 5

CHAD

THIRD HIGHWAY PROJECT

Maintenance Output

Routine Maintenance Year Without Maintenance With Maintenance Regravelling Program (km) Program (km)_ (km)

Gravel Earth Tracks Total Roads Roads

1 474 161 965 1600 -

2 474 161 565 1200 18001' 100

3 474 161 165 800 531821 100

4 400 - - 4003/ 5318 100

5 - 5318 100

6 - 5318

7 - 5318

8 - 5318

9 3 545-/

1/ Only one-third of program output corresponding to the amount of equipment delivered in the previous year.

2/ Distribution of roads and tracks to be maintained as defined in the project.

3/ The existing- equipment pool estimated to have outlived its economiic life.

4/ Two-third of program output corresponding to the remaining useful life of equipment , provided under the project

Source: Mission estimates. CHAD

THIRD HIGHWAYPROJECT

Routine Maintenance - Benefit-Cost Analysis I/

COSTS BENEFITS Year Capital Investment (CFAF million) 2/ Recurrent Maintenance Costs (CFAF million) -Iitemental VOC 'Savlngsll (CFAF millions) Equipment & Buildings Technical-3/ With Project Without ProjectAl Incremental Costs5/ GRAVEL ROADS EARTH ROADS TRACKS (3691 km) TOTAL Spare Parts Assistance ER (671 ki) PER (79 km6 ER (336 km) PER (541 km)

1 360.8 173.5 152.2

2 721.6 347.0 152.2 120.8 120.8 - 45.8 9.8 21.7 34.9 281.5 k 393.7 3 152.2 362.4 100.4 262.8 157.6 115.7 106.1 220.9 1013.9 1614.2 4 362.4 100.4 262.8 151.1 117.9 197.7 306.0 1042.1 1814.8 5 362.4 59.7 302.7 143.9 120.4 311.1 348.9 1108.6 2032.9 6 362.4 59.7 302.7 208.0 123.0 353.7 354.5 1178.1 2217.3 7 362.4 59.7 302.7 323.2 125.4 362.0 363.3 1197.2 2371.1 8 362.4 59.7 302.7 575.2 127.8 369.7 372.1 1218.7 2663.5 9 362.4 59.7 302.7 661.7 130.1 379.0 350.5 1239.8 2761.1 10 -260.2-/ 241.6 59.6 181.9 453.6 88.4 257.8 261.7 848.0 1909.5

Without Shadow Prices: IRR = With Shadow Prices: IRR = 75.07. BB/C@ 12Z = 3.17 B/C @ 12% = 3.25 B/C a 20% = 2.60 B/C @ 20% = 2.66

1/ The analysis is based on the following assumptions: (a) Equipment life = 8 years; (b) traffic growth - 3% per annum; (c) all benefits and costa in Dec. 1977 prices and (d) benefits realized through reduction of vehicle operating costs by routine maintenance.

2/ One-third of capital expenditure for equipment, spare parts and buildings in year 1, remaininp in year 2.

3/ 100 percent costs of technical assistance for DPW reorganizations (except road planning) assigned to routine maintenance operations.

4/ GFAF 56.3 million for salaries of permanent road maintenance field staff.

5/ Only 1/3 of incremental recurrent costs and VOC savings assigned to project in year I and 2/3 of incremental costs and VOC savings assigned to project in year 10. 6/ ER = Engineered Roads; PER = Partially Engineered Roads, 7/ Salvage value of buildings estimated at 50% of cost. Source: mission estimates. - 106 - ANNEX X Table 7

CHAD

THIRD HIGHIWAY PROJECT

Bongor Ferry - Traffic Projections

I/ Year Annual Traffic- 2/ No. of No. of Round Trips - Vehicles VL CMS

Without Project

1979 2750 2750 3667

19823/ 3000 3000 4000

With Project NL CMS CLR (cotton) From Onoko Return Haul & Bongor From NDiamena

1980 2832 2832 138 597 2556

1982-4/ 3000 3000 153 655 2404

1985 3267 3250 167 713 2612

199 5/ 3790 3500 194 826 2940

2005 3790 3500 194 826

1/ Traffic operations confined to dry season (about 250 days/year). Cotton traffic assumed to grow at 5% per annum until 1982, 3% thereafter; other traffic estimated to grow at 3% per year. 2/ Round trips estimat'ed on following basis: (a) Existing ferry - 1.5vehicles/roundtrip; (b) New ferry - 3 light vehciles or medium trucks per round trip, 2 truck-trailers per round trip for local traffic and 1 truck-trailer per round trip for return haul from NDjamena. 3/ Existing ferry estimated to cease operations. 4/ Estimated commodity flows: cotton fiber from Onoko (1,415 t); from Bongor (500 t); and one-way return haul from N'Djamena (16,400 t). 5/ ferry traffic assumed constant after 1990 due to uncertainties in economic and traffic forecasts.

Source: mission estimates, BCEOM - 107 - ANNEX X CHAD Table 8

THIRD HIGHWAY PROJECT

Replacement of Bongor Ferry - Benefit Cost Analyois

Year Capital Costs (CFAF million) Recurrent Costs gCFAF milliol) Benefits (CFAF million) Desig Technical Materials Operating Costs Maingenance Costs voc savings from Assistance and Labor Without With Without With D$version of l/ Avoidance of2j Project Project Project Project export traffic Diversion of to new ferry local traffic to longer route

1 (1978) 3.4

2 10.8 58.5

3 3.80 2.71 2.84 Q,64 30.72

4 3.88 2.78 3,11 0,64 31.67

5 -1.1 2' 3.96 2.84 3.43 0.64 32.63

6 2.90 0,64 34.22 32.53

7 2.96 0.64 35.40 33.48

8 3.02 0,73 36.35 34.44

9 3.08 0.73 37.41 35.50

10 3.14 0.73 38.69 36.57

11 3.19 0.73 39.75 37.63

12 3.25 0.73 40.92 38.8'

13-16 3.31 0.73 42.09 39.97

17 3.31 8.73-/ 42.09 39.97

18 3.31 0.86 42.09 39.97

19-26 3,31 0.86 42.09 39.97

27 9.9 3.31 0.86 42.09 39.97

Without Shadow Prices: IRR = 59% With Shadow Prices: IRR =60% B/C a 12% = 5.60 B/C @ 12% = 5.72 FYB = 46.8% FYB = 48%

1/ Export traffic crossing the ferry at Bongor, instead of going to Lai wo4ld save a travel distance of 33 km on tracks, 49 km on earth roads and 107 km on gravel roads.

2i/Once existing ferryboat ceasesoperation, 50% of local traffic assumed to divert to longer rQutes since parts of Mayo Kebbi prefecture across the Logone River are administered from Bongor.

3/ Salvage value of the motor on existing ferry.

4/ Includes cost of replacement of motors.

5I Salvage value of new ferry.

Source: Mission estimates. - 108 - ANNEX X Table 9

CHAD

THIRD HIGHWAY PROJECT

Lai Ferry - Traffic Projections

Annual Trafficl/ Year Number of Vehicles No. of Round2 / VL CMS CMR CLR Trips by Ferry Seed Beverages Cotton Fuel Other Total Cotton Merchandise

Without Project

1979 3285 2555 3893 3/ 1982 3590 2920 4340

With Project

1980 3383 2752 309 254 247 246 171 918 2658

1981 3485 2835 333 267 254 266 181 968 2757

1982k4/ 3590 2920 357 280 261 286 192 1019 2858

1985 3922 3191 389 324 285 312 210 1131 3131

1990 4548 3699 451 414 331 361 244 1350 3650

2005 4558 3699 451 414 331 361 244 1350 3650

1/ After 1982, cotton traffic assumed to increase by 3% per year; beverage traffic by 5% per year; fuel and other traffic by 3% per year. 2/ Round trips estimated on following basis: (a) existing ferry - 1.5 vehicle/round trip; (b) New ferry - 3 light vehicles or medium trucks/round trip, and 2 truck-trailer units/ round trip. 3/ Existing ferry estimated to cease operations 4/ Estimated commodity flows: seed cotton (2,500 t); beverages (3,500 t); cotton fiber (3,280 t); fuel (4,300 m3 ); and other merchandise (2,400 t). 5/ Ferry traffic assumed constant after 1990 due to uncertainties in economic and traffic forecasts.

Source: Mission estimates, BCEOM. ANNEX X - 109 - Table 10

CILAD

THIRD HIGHWAY PROJECT

Replcacement of Lai Ferry - Benefit Cost Analysis

Capital Costs (CFAF million) Recurrent Costs (CFAF million) Benefits (CFAF million) Year Desig Technical Materials OPerating Costs Maintenance Costs voc savings 1 Assistance and Labor Without With Without With Project Project Project Project

1 (19,'8) 3.4

2 10.8 58.5

3 3.98 3.05 2.84 0.64 27.38

4 4.08 3.15 3.11 0.64 28.75

5 -1.1 2/ 4.19 3.25 3.43 0.64 30.12

6 3.24 0.64 31.55

7 3.44 0.64 32.99

8 3.53 0.73 34.41

9 3.62 0.73 35.70

10 3.71 0.73 36.98

11 3.81 0.73 38.28

12 3.90 0.73 39.60

13-16 3.99 0.73 40.85

17 3.99 8.733-' 40.85

18 3.99 0.86 40.85

19-26 3.99 0.86 40.85

27 -9.9 4i 3.99 0.86 40.85

Nithout Shadow Prices: IRR = 43% With Shadow Prices: IRR = 44% B/C @ 12% = 3.06 B/C @ 12% = 3.12 FYB = 42.3% FYB = 43%

1/ The larger capacity ferry to be provided under the project would allow a 48 km distance reduction on tracks for transport of seed cotton and use of truck-trailer units; a distance reduction of 48 km on tracks and 99 km on gravel (lateritic) roads for cotton export traffic; and a distance reduction of 93 km on laterite roads for domestic transport between N'Djamena and Moundou. 2/ Salvage value of the motor on the existing ferry.

3/ Includes cost of replacement of motors.

4,' Salvage value of new ferry. Source: Mission estimates. - 110 - ANNEX X Table 11

CHAD

THIRD HIGHWAY PROJECT

Bousso Ferry - Traffic Projections

Year Annual Trafficl/ No. of No. of Round Trips

Vehicles by Ferry .

2/ Without Project VL CMS

1979 426 2127 1702

1980 439 2474 1942

1982-/ 465 2700 2110

2/ With Project VL CMS CMR CLR

1981 452 1648 247 86 867

1982 465 1724 257 89 903

1985 506 2220 281 97 1098 5/ 1990 587 2574 326 113 1273

2005 587 2574 326 113 1273

1/ Traffic growth assumed to be 3% per annum except for traffic generated by proposed irrigation perimeters.

2/ Includes traffic generated by irrigation perimeters, estimated to grow from 156 vehicles in 1979 to 1070 vehicles in 1990.

3/ Round trips estimated on following basis: (a) existing ferry - 1.5 vehicle/ round trip; (b) New ferry - 3 light vehicles or medium trucks/ round trip and 2 truck-trailer units/round trip.

4/ Existing ferry estimated to cease operations.

5/ Traffic using ferry assumed constant after 1990 due to uncertainties in economic and traffic forecasts. Source: Mission estimates. BCEOM. ANNEX X

- 111- Table 12

CIUAD

THIRD HIGHWAY PROJECT

Replacement of rousso Ferry - Benefit Cost Analyois

Capital Costs (CFAF million) Recurrent Costs (CFAE_ Benefits__lion)_ (CFAF million_/ Year I I rr- Design Technical Materials OperatlgCgst6 VainteaanceCoPt$ 31 Assistance Without ith With Savings- VoC Savings Project Prolect Project groJe-t in Handling Costs

1 (L978) 3.4

3 10,8 58.5

4 2.57 1.49 3.11 0.64 1.50 2.29

5 -1.1 4 2.62 1,52 3,43 0.64 1,55 2.35

6 1,58 0.64 26.20

7 1.63 0.64 26.97

8 1.69 0.64 27.78

9 1.72 0.73 28.65

10 1,75 0.73 29.54

11 1.79 0.73 30.42

12 1.82 0.73 31.34

13-16 1.85 0.73 32.28

17 1.85 0.73 32.38 5/ 18 1,85 8.73 32.28

19-26 1.85 0.86 32.28

27 1.85 0.86 32.28

28 -9.9 6/ 1.85 0.86 32.28

Without Shadow Prices: IRR = 26% Wiph Shadow Prices: IRR = 27% B/C a 120 = 2.32 B/C @ 12% = 2.37 FYB . 10.2%7/ FYB = 11.017/

1I Until the existing ferry remains operational,savings in operating and maintenance costs are the primary benefits.

2/ The new larger capacity ferry would permit use of truck-trailers for hauling cotton instead of a single unit trucks, thereby reducing vehicle operating costs and eliminating the need for loading/unloading;if ferry service were to terminate, truck traffic would have to use 313 km of large unmaintained tracks as opposed to travelling on 156 km of paved roads and 149 km of maintained tracks between Bousso and N'Djamena.

0 0 3 Loading/unloadingcharges estimated at CFAF 5 /ton for transport of seed cotton as well as ginned cotton.

4/ Salvage value of the motor on the existing ferry,

5/ Includes cost of replacement of motors.

6/ Salvage value of new ferry.

7i If expenditures for desigp and specificationsare treated as a sunk cost, first year benefits increase to 11%, and 12% respectively for the two cases without and with shadow prices.

Souirce: Mission estimates. - 112 - ANNEX X Table 13

CHAD

THIRD HIGHWAY PROJECT

Hellibongo Ferry - Traffic Projections

Year Annual Traffic No. of Vehicles./ No. of Round Trips 2/ Kyabe Sarh Am Timan Melfi

3/f Without Project VL cMS CMS CMS CMS

1979 4082 358 216 30 23 3139

1982 4461 391 266 32 28 3452

1985 4862 427 290 35 31 3763

1990 5640 495 336 40 35 4364

2005 5640 495 336 40 35 4364

With Project VL CLR CMR CLR CLR

1981 4335 91 107 7 6 1535

4461 94 114 8 7 1599

!-35 4862 103 124 9 8 1743 4/ ii9O 5640 119 144 10 9 2021

2005 5640 119 144 10 9 2021

1/ Traffic .rowth estimated at 3% per year.

2/ Round trips estimated on following basis: (a) existing ferry - 1.5 trips/round trip; (b) New ferry - 3 light vehicles or medium trucks per round trip, 2 truck-trailers rer round trip.

3/ Exhisting ferry assumed to continue operations witb udditionrl renovaLi2n and provision of four new boats. 4/ Ferry traffic assumed constant after 1990 due to unce ,aintxesir. economic and traffic forecasts. Source: Mission estimates; BCEOM. ANNEX X - 113 - Table 14 CHAD

THIRD HIGHWAY PROJECT

ReplaceMent of Hellibongo Ferry - Benefit Cost Analysis

Capital Cost of Renovation Recurrent Costs (CFAF million) s and Purchase 31 of 4 New Boats Oaerating Cotgata-ntaace UO5tS Capital Costs (CFAF 3/ million) (CFAF million)l/ Without With Without Vith Savings2l VOC Savings (with project) (without______Project_____ectproject) Project Project erojct et inHandling Conversionfrom Year Design Technical Materials Costs to l.arger Assistance Capacity Trucks

1 3.4

2 21.34 3 10.8 58.5 21.3!'

3.50 2.08 1.42 0.64 0.65 3.89 5 -1.1 -/ 3.57 2.13 1.42 0.64 0.67 4.01

6 3.64 2.17 1.42 0.64 0.69 4.12 7 6~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~6~~~~~~~~~2.22 ~ 1 ~6/ .6~ ~ ~~~~~~~3.710.72 4.25 & 3.78 2.26 5.42 0.64 0.74 4.37 9 3.86 2.31 1.64 0.73 0.75 4.51 10 3.95 2.36 1.64 0.73 0.78 4.65 11 4240 1.64 0.73 0.80 4.78 12 4.13 2.50 1.64 0.73 0.83 4.93 13-16 4.20 2.50 1.64 0.73 0.86 5.08

17 4.20 2.50 l164 0.73 0.86 5.08 18 6/ 6/ 4.20 2.50 5.64 8.73 0.86.8 5.085 19-26 4.20 2.50 1.92 0.86 0.86 5.08 27 4.20 2.50 1.92 0.86 0.86 5.08

28 -9.9 4.20 2.50 1.92 0.86 0.86 5.08 21 4.20 2.50 1.92 0.86 0.86 5.08

Without Shadow Prices: IRR = 30% With Shadow Prices: IRR = 31% B/C @ 12% = 2.39 B/C a 12°'= 2.44 FYB = 23.0% FYB = 24.0%

1/ Existing ferry capable of providing service after substantialrenovation and provision of four new boats. 2/ The larger capacity ferry to be constructedunder the project would permit use of truck-trailers for hauling ginned cotton instead of single unit trucks, thereby reducing vehicle operating coats and eliminating the need for load/unloadingat an estimated cost of CFAF 500/ton.

3/ With largercapacity ferry, ginned cotton would be carried on truck-trailers instead of single unit trucks between Sarh and: Ci) Ryabe (98 kmn); (ii) Ain Timan (35 km);and (iti) Nelfi (299 kmn). Seed cotton from the right of Chari would be transportedto Sarh over an average distance of 50 km. banLk

41' Estimated cost of renovation spread over two years.

5/ Salvage value of the motor on existing ferry. 6/ Includes replacement cost of motors.

7/ Salvage value of new ferry.

Source: Mission estimates. - 114 - ANNEXX CHAD Exhibit I THIRD HIGHWAY PROJECT BreakevenBase ADT vs. Unit RegravellingCost (2-month stockpiling)

80 _ 7-m (20%)

7-m (10%)

70 6-m-/ (20%) /70 _ // 6-m (10%) 65 vpd (12%) // /

60 60 _ / 1/ ;/ /5~~~~~~~~~~~~~-rn(20%)

5-m (10%)

50 48vpd (12%)

I-

4 _ /

20~~~~~~~~~~~~~~~

C~~~~~~~~.

US$/m3 6 8 10 12 14 CFAF/m*3 980 1470 1960 2450 2940 3430

Unit Regravelling Cost (Figures in parenthesis are the discount rates) World Bank -18219 - 115 - EXHIBIT I

CHAD THIRD HIGHWAY PROJECT DPW Organigramme

|Ministry of Civil VVorks,| |Mines and Geology

Directorate General

Directorates

Study and Hydraulics _. Drectoaef_ Office PublicWok__

Contract |Ropad Planning anE . Adm in istrative Central Filing Administration Design Office Buildings Hydraulics Services and Correspondence (Accounting-Personnel) Office

l I l I I I 1 | ~~~~N'DjannenaWaterL | Drawings Topography General | Supply and Urbanization

N'DJA?SMENA SAR H Division Division

1 Road and| Buildings | 1 |~ ~ Equpmen EuipmetPoceen

iI |~ ~~ ~o o | FerryboatI Workshop .__ Procuemen

Key Hierarchic Liaisons

- - ~ - Functional Liaisons

L Office to be reorganized

1/ Temporary To be established under the project World Bank- 18053 CHAD EXHIBIT II THIRD HIGHWAY PROJECT INCREMENTAL BENEFITS FROM REGRAVELLING 230 - BaseADT = 51vpd; Unit Length = 1 Km; 8-Year Project Life 220 - Vehicle Distribution = 45% VL; 15%CMS; 25% CMR; 15% CLR Traffic Growth = 3 % Per Annum

210 - \ koad 210~~~~~~~~~~~~...... --n--jpv-n-->

200 ,A , Y // _ r '

'7.~~~~~~Q

OsC) I77' c 170 1 27 3 567 •

160 I ~~~//77 ///77777777 cl

150 140: 10

V AU' "'1L~~~~~A C 130: il I'/ 0 With Proj/c110 (Rga777777O 120 +0004T ' 100 Project Year 0 1 2 3 4 5 6 7 8 V/Year 18.6 19.2 19.7 20.3 21.0 21.6 22.2 22.9 (000' VEMH) 1V 18.6 37.8 57.5 77.8 98.8 120.4 142.6 165.5 (000' VEH)

2 With Project (Regravelling) - VOC = 112.06 + 0.0064 7T EW(l = IncrementalVOC Savings With Project (No Regravelling) _ VOC= 109.07±6.11687T-0.09324T 2 Without Project (No Regravelling) from Routine Maintenance W,.,,,,,,,.= IncrementalX VOC VOC = 109.07Savingst 6.11687T-0.09324T2 V= No. of Vehicle Passesin Both Directions (000' VEH) from Regravelling VOC = Vehicle Operating Cost (CFAF/Km) T = No. of Vehicle Passesin Both Directions Since Last Grading (000' VEH)

World Bank -18246 CHAD THIRD HIGHWAY PROJECT EXHIBIT III BENEFITS FROM GRADING OF TRACKS

150 BaseADT = 5 vpd; Unit Length = 1 Km; 8 Year ProjectLife Vehicle Distribution= 45% VL; 55%CMS. 140 Traffic Growth = 3% PerAnnum

E 130 -

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ProjectYear 0 1 2 3 4 5 6 7 8 V/Yr - 1.83 1.88 1.94 1.99 2.05 2.11 2.18 2.24 (000' VEH) IV 9.1 10.9 12.8 14.7 16.7 18.8 20.9 23.1 25.3 (000' VEH)

2 4 VOC = 74.62 + 6.55485T- 0.23151T + 0.00009T r/,,//A = VOC savingsfrom Routine Maintenance V = No. of VehiclePasses in Both Directions [ , V VOC = VehicleOperating Cost T = No. of Vehicle Passesin Both DirectionsSince Last Grading(000' VEHS)

World Bank - 18247

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