The World Bank

Documentof The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 11305-PA

STAFF APPRAISAL REPORT

PARAGUAY Public Disclosure Authorized

EIGHTH HIGHWAYPROJECT

NOVEMBER 24, 1993 Public Disclosure Authorized

Infrastructure and Energy Division Country Department IV

Public Disclosure Authorized Latin America and the Caribbean Regional Office

This 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. CURRENCY EOUIVALENTS

Currency Unit: Guarani (G) 1 US$ = G/. 1,800 (October, 1993)

WEIGHTS AND MEASURES

Metric system

FISCAL YEAR

January 1 - December 31

ABBREVIATIONS AND ACRONYMS

ANNP - National Ports and Navigation Administration CAPECO - Chamber of Paraguayan Grain and Seed-oil Exporters CIF - Cost, Insurance and Freight CGN - Comptroller General of the Nation DPS - Department of Property and Supplies DE - DRH's Department of Execution DM - DRH's Department of Maintenance DEC - DRH's Department of Evaluation and Control DRVR - Directorate General of Village Roads MMD - Merchant Marine Department DPP - DRH's Department of Planning and Projects DRFR - Directorate of Forest Resources DRH - Directorate of Highways FCCAL - President Carlos Antonio L6pez Railway FEC - Foreign Exchange Component FLOMERES - The State Merchant Marine Fleet GDP - Gross Domestic Product HDM - Highways Design and Maintenance Model ICB - International Competitive Bidding IDB - Inter American Development Bank JICA - Japanese International Cooperation Agency LCB - Local Competitive Bidding MAG - Ministry of Agriculture and Livestock MOF - Ministry of Finance MOPC - Ministry of Public Works and Communications OECF - Japanese Overseas Economic Cooperation Fund OPIT - Transport Planning Office PPF - World Bank's Project Preparation Facility SOE - Statement of Expenditure USecPWC - Undersecretariat of Public Works and Communications USecT - Undersecretariat of Transport USecA&F - Undersecretariat of Administration and Finance PARAGUAY FOR OFFICIALUSE ONLY

EIGHTH HIGHWAY PROJECT

STAFF APPRAISAL REPORT

Table of Contents

LOAN AND PROJECT SUMMARY ...... iII

1. THE TRANSPORTSECTOR ...... 1...... A. Background .. *.*. 1...... I B. Organizationof the Transport Sctor ...... 2 C. Transport Sector Investments ...... 3 D. Highway ...... 3 E. Ports and Waterways ...... 4 F. Railways ...... S 0. Air Trawport ...... S H. Sector Planning ...... 5 !. Previous Bank Experiencewith Transport Projects ...... 6 J. Prospctive Bank Actions ...... 7

2. THE HIGHWAYSSUBSECTOR ...... 9 A. The HighwaysSystem ...... 9 B. Highway Administration ...... 9 C. Highway Planning ...... 12 D. Highway Expdtrs, Financg, Cost Recvry, Future Expdtrs ...... 13 E. Highwaysand the Environment ...... 16 F. TheRoadTransportIndustry ...... 17

3. THE PROJECT...... 19 A. Background ...... 19 B. Project Objectives ...... 20 C. Project Description ...... 21 D. Project Preparation ...... 23 E. Project Costs ...... 24 F. Project Financing ...... 26 G. Project Implementation ...... 26 H. Procurement...... 27 I. Disbursements . 28 J. Special Account, Disbursementsand Auditing .29 K. Reporting Requirements,Project Monitoringand Consultations . 29 L. Socio-EnvironrentalImpact ...... 30

4. ECONOMICJUSTIFICATION ...... 34 A. EconomicAnalysis ...... 34 B. Project Rism ...... 37

S. AGREEMENTSAND RECOMMENDATION...... 39

This document has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bankauthorization. Iamm Project Costs ...... 25 Financing Plan ...... 26 Procurement...... 28

1.1 Public Investmentin Transport ...... 41 1.2 Expected Public Investmentin Transport (1992-1996)...... 42 1.3 Ports Traffic (1990) ...... 43 1.4 ShippingFleet ...... 44 2.1 NationalHighway Network (1991) ...... 45 2.2 MOPC BudgetaryExecution by Type of Expdtre (1985-1993) 46 2.3 MOPC BudgetaryExecution by Source of Fincg (1985-1993) . 50 2.4 MOPC Maintenanceand InvestmentExpdtre (1985-92, 1993-98) 54 2.5 Taxes Collected from Road Users ...... 55 2.6 MOPC Highway InvestmentProgram (1993-1998)...... 56 2.7 Road Transport Companies ...... 58 3.1 Cuatro Mojones - Rt.9 Traffic at Main Intersections ...... 59 3.2 Road Improvements - Cost Summary ...... 60 3.3 Civil Works Financial ExecutionSchedule ...... 61 3.4 ImplementationSchedule ...... 62 3.5 EstimatedSchedule of Disbursements ...... 63 4.1 Paraguarf- Ita AverageDaily Traffic ...... 64 4.2 Paraguarf- ItACost/Benefit Streams ...... 65 4.3 Ita - Cuatro Mojones Traffic Estimates ...... 66 4.4 Ita - Cuatro Mojones Cost/BenefitStreams ...... 67 4.5 Cuatro Mojones - Rt.9 Traffic Estimates ...... 68 4.6 Cuatro Mojones - Rt.9 Cost/BenefitStreams ...... 69 4.7 Cuatro Mojones - Rt.9 Storm Drainage Cost/BenefitStream ... 70 4.8 Limpio - EmboscadaTraffic Estimates ...... 71 4.9 Limpio - EmboscadaCost/Benefit Streams ...... 72

Annexes 1. External Assistanceto the Highway Sub-sector ...... 73 2. Detailed Descriptionof Project Works ...... 77 3. Pilot Earth-RoadStabilization Program ...... 81 4. Terms of Reference Improvements Ytay and Lambare Creeks . .. 83 5. Terms of ReferenceAsuncidn Transport Master Plan Study .... 91 6. Terms of Rcference TA to Strengthen MOPC's Management . .. 95 7. StrengtheningMOPC's EnvironmentalUnit ...... 97 8. StrengtheningDH's Planningand Projects Department ...... 99 9. Terms of ReferenceNational Vehicle Registry ...... 101 10. Paraguayanvs. Bank ProcurementPractices ...... 105 11. EnvironmentalImpact Assessment...... 109 12. Selected Documentsin the Project File ...... 129

Organizationof the Ministry of Public Works as of June 1993 ..... 131

IBRD 24199 Eighth Highway Project ...... 132 PARAGUAY

EIGHTH HIGHWAYPROJECT

LOAN AND PROJECT SUMMARY

Borrower: Republicof Paraguay

ExecutingAgency: Ministry of Public Works and Communications(MOPC)

Loan Amount: US$ 65.0 million equivalent

Tams: Repaymentin 20 years, including5 years of grace, at the Bank's standard variable interest rate.

ProjectObjectives: The proposed project is principally aimed at strengthening MOPC's organization and promoting team-work at its highest level, thus, improvingits capacity to deliver good roads and a well maintainednetwork. This objectivewould be accomplished through the financingof selectivetechnical assistanceand training and of civil works. The latter would, in addition, ease the problems of rapid urbanization, and: (a) reduce environmental hazards and the nuisance caused by frequent floods along Asun- ci6n's ringroad; (b) expedite exports by facilitating the use of alternativeports, (c) lower the costs of trucking soybeanexports to the Brazilian border; (d) enhance DH highway design and roadworks planning capability, (e) improve environmentalassessment skills at the ministry; and (f) assist in establishinga National VehicleRegistry.

The proposed project is framed within the Bank's country assistance strategy of addressingthe physical constraints and social pressures arising out of the rural-urban migration that results from the high rural populationgrowth of Paraguay and a declin- ing agriculturalfrontier. The strategy calls also for support to exports by upgrading the transport infrastructure.

After a seven year lending gap in Paraguay, Bank activitiesmust also be cognizantof, and blend in with the activitiesof other donors. The proposed project would complementthe considerable assistance included in parallel IDB and OECF projects: these deal with improvingthe nationalhighway network and improving maintenance, and are based on developing stronger in-house capabilities at MOPC to carry them out (Annex 1). The technical assistance in the project would move in a different direction, however, namelyto help MOPC organize itself to contract with the private sector the maintenance,construction, planning, engineering services, and other tasks MOPC has to carry out. This approach would allow MOPC staff to coordinateand manage the program rather than do it themselves. An initialstep in the new direction is to develop stronger internal team work and coordinationin the decision making and implementation,while at the same time ensuring that systems are in place that allow efficient and effective performance. - iv -

Project Description: The proposed project would include:

A. Civil Works

road improvements:improving the road sections between Para- guarf - Ita; Ita - Gurambare - Ypand - Nemby -Cuatro Mojones; Cuatro Mojones - Defensores del Chaco - Madame Lynch - Jct. Rt.9; and Limpio - Emboscada;

road rehabilitation:resurface 100 km of Rt.6 from its junction with Rt.7 to km 100;

pilot unpaved-roadstabilization program: treat 80 km of unpaved roads with sulfonatedoils to test whether the process adapts and is implementablein Paraguay;

B. Consultine Services

engineeringservices to: supervise the civil works, engineerthe pilot unpaved road stabilizationprogram, design the Rt.6 resurfacing works, and engineer and design the to improvementsto the Ytay and Lambare creeks;

studies: the Asunci6n TransportationMaster Plan study;

technicalassistance: a managementreview of MOPC, assistance to the environmentalunit, strengtheningDH's highway design and roadwork planning capabilities, and implementationof a national vehicle registry; and

C. Equipment

procurement of computers to implement the national vehicle registry, and equipment and machines for a soils and materials laboratory.

FinancingPlan: (US$ million)

Local Foreign Total

IBRD 9.4 55.6 65.0 Government of Paraguay 25.0 - 25.0

Total Project Costs 34.4 55.6 90.0 v -

Estimated Costs: (June 1992 US$ million) Description Local Foreign Total Foreign Cost Cost Cost Cost as % of Item Civil Works Road Improvements Paraguarf -lta (Rt.1) 1.2 2.1 3.3 65 Ita - Cuatro Mojones 6.4 12.0 18.4 65 Cuatro Mojones - Jct.Rt.9 9.4 17.5 26.9 65 Limpio - Emboscada (Rt.3) 2.2 4.0 6.2 65 Land Acquisition 4.6 0.0 4.6 0 Resurfacing Rt.6 2.1 4.0 6.1 65

Stabilization Program 0.4 0.6 1.0 65 Sub-Total Civil Works 26.3 40.2 66.5 60 Consulting Services Engineering Civil Works Supervision 1.6 2.4 4.0 Design Rehabilitation of Rt.6 0.1 0.1 0.2 Pilot Stabilization Program 0.1 0.1 Engineering Design of Creeks 0.1 0.2 0.3 PPF Engineering Services 1.1 1.1 Studies Asunci6n Trspt. Master Plan 0.2 0.3 0.5 PPF Environmental Studies 0.1 0.1 Technical Assistance & Training MOPC Management Asstce. 1.0 1.0 Environmental Unit 0.1 0.1 DPP Strengthening 0.1 0.1 National Vehicle Registry 1.0 1.0 PPF TA Expenditures 0.3 0.3 Sub-Total Consulting Services 2.0 6.8 8.8 75 Equipment 0.1 0.4 0.5 80 Base Cost 28.4 47.4 75.8 62 Physical Contingencies 2.9 4.7 7.6 Price Contingencies 2.4 4.2 6.6 Total Cost 33.7 56.3 90.0 62 - vi -

Estimated Disbursements:

(USS million)

By the End of Fiscal Year Anmial Cumulative Prcentage

1994 0.0 0.0 0

1995 10.0 10.0 15

1996 16.4 26.4 41

1997 16.0 42.4 65

199S 15.3 57.7 39

1999 7.3 63.0 100

Estimated Rates of Return:

Road section Estimated ERR economic cost (G/.bin.) (M)

Paraguari- Iti 4.3 3.9

Iil - Cuatro Mojonce 27.6 14.3

Custro Mojones - Rio 9 43.9 27.4

Limpio - Emboacada 9.2 10.8

This project was appraised in June/July IM by Mr. William Matthey (Sr. Highway Engineer), it was revised, recast, rdeveloped aad updated between Septemnber19M and September 1993 by Mr. Renato Schulz (Sr. Transponttion Economist and Task Manager). Peer reviewers were Mssrs. C. Queiroz (engineer, EC31V) and M. Dick (economist, LATIE). Project processing was supervised by Mr. A. Sanchez, Chief, Infrsttucture and Energy Division, Department IV, Latin America and CaribbeanRegional Office. Mr. Ping-Cheung Lob was Director of the Department. 1. THE TRANSPORT SECTOR'

A. Background

1.1 Paraguay is a landlocked country in the center of South America between the Parana, the Paraguayand the Pilcomayorivers. It borders on Bolivia,Brazil and Argen- tina. Its economy is based principally on the export of soybeans and cotton, which together accountfor more than 70% of total export earnings. Because of the long distances to reach deep water ocean ports, the efficiency and costs of transportation are critical to Paraguay's exports.

1.2 In 1990, the country's transport system moved about 20 million tons of freight (close to 6.7 billion ton-km) and about 61,500 interurban passengers (roughly 11.8 million passenger-km). Ninety three percent of total domesticcargo shipmentswere by road, 6% by river and 1% by rail. Interurban passengersmoved 83% by bus, 16% on cars, and 1% by rail. Of the 1.5 million tons of grain and cotton exported, roads handled about 50%, river transport about 36%, and rail the remaining 14%. Almostall rail freight originated,however, at Encarnacidn,5 km from the border with Argentina, and moved on to Buenos Aires or to Nueva Palmira in Uruguay on the Argentinean and Uruguayanrailways.

1.3 The infrastructurethat handled these transport volumes consistsof about 28,000 km of roads (of which 2,600 km are paved); 376 km of trunk and 64 km of branch rail lines; fifteenpublic river ports (of which only three: Asunci6n, Villeta and Encarnaci6n are used for imports/exports);a number of privately ownedports andjetties; about 1,200 km of navigablewaterways; and 2 international(Asunci6n and Ciudad del Este) and 43 domesticairports.

1.4 The trunk road networkof the country is limited (3,800 km includingthe 2,600 paved roads) and, according to the most recent survey, not in the best of shapes (only 29% is in good conditionwhile the rest is poorer). In particular, access roads to Asun- cion are congested.

1.5 The track and rolling stock of the railway are more than 65 years old and badly deteriorated. The railway has been included among the state-owned enterprises the governmentwould like to privatize2. Navigationon the Paraguay river is mostly limited to day-time sailing below Asunci6n and more severely hampered upriver. The port of

I/ This section draws heavilyon a numberof studiescarried out by the Ministryof Public Works and Communicationswith Bank an other assistance.They include: TheNational Transport Master Plan, JapaneseInternational Cooperation Agency (JICA), 1991; Export CorridorsStudy, SAE-CONTEC, 1991; Traffic Study on the National Roads, SAE-CONTEC, 1989; Revenues and Financing National Roads, SAE-CONTEC, 1991; Diagnosis and Recommendationson Weighing Vehicles and Chargingfor the Use of Roads in Paraguay, Orb and Medina, 1991; National TransportationPlan 1990-1994, MOPC, 1990. These studies have been placed in the Project File and the statistical and other information containedin them has not been repeated in this report.

Z/ A law was passed in 1991 authorizingthe governmentto privatize five state- owned companiesof which three are transport enterprises:the railway FCCAL, the shipping companyFLOMERES, and the airline LAP. Asunci6nis surroundedby the city, has poor land-sideaccess and is congestedand thus, the National Ports and Navigation Administration(ANNP) (with its own resources) is improvingthe port of Villeta.

1.6 The JapaneseOverseas Economic Cooperation Fund (OECF) and the Interameri- can DevelopmentBank (IDB) are financing a number of transportationprojects for the government. The first is helping MOPC to finance a large purchase of maintenance equipmentand some road resurfacings, and the second has four on-goingprojects: two trunk roads projects one of which includes preparation of a national road maintenance plan, and two rural roads projects. The IDB is also working with the ANNP on improving navigabilityon the Paraguay river3.

1.7 The proposed project would complementIDB and OECF's projects as it would deal with areas in-and-aroundAsunci6n which are not touched by their projects. The proposed project would help to improvetraffic on the accesses to the city, and facilitate use of the ports of Villeta (some 40 km from Asunci6n)and San Antonio (some 30 km from Asunci6n); channeling traffic to them and away from Asunci6n is expected to lessen, somewhat, congestionin the city and at the port.

B. Organizationof the Transport Sector

1.8 Overall responsibilityfor the transportsector, includingthe formulationof transport policy, planning, and coordinationof investments,policies and regulation,rests with the Ministryof Public Works and Communications(MOPC). MOPC also administers, builds and maintainsthe public roads network and, through a loosely defined reporting relationship,controls the NationalPorts and NavigationAdministration (ANNP) which is responsiblefor the operationand control of ports and navigablewaterways, the Presi- dent Carlos AntonioL6pez Railway Company(FCCAL) which runs the railway, and the State MerchantMarine Fleet (FLOMERES)which operatesriver barges and a few ocean- going ships. The Civil Aviation Department of the Ministry of Defence oversees the airports infrastructure.

1.9 MOPC was reorganized in 1991. The new organization (see Chart) has four under-secretariats:Public Works and Communications,Transport, Administrationand Finance, and Mines and Energy. While the new organization is a significant improvement over the previous one, and generally adequate, there are some functions which would have been better separated out (road maintenance,which is together with road constructionand would operatebetter on its own) and some which are subordinatedunits and of little effectiveness(sector and highwayplanning; more on sector planning and coordinationin paras. 1.31..(a) to 1.30 below, and on highwayplanning in chapter 2).

1.10 The Undersecretaryof Public Works and Communicationsis responsiblefor the constructionand maintenanceof all roads (trunk, connector and village) and bridges. The Undersecretaryof Transport is responsiblefor the operation and regulationof road and river transport services (includingthe traffic police), and through the state-owned enterprises for rail, ports, waterways, and the merchant fleet. The Undersecretaryof Administrationand Finance is responsible for the Ministry's budget, the treasury, accounting, the administrationof the Ministry's assets which include maintenance and

I/ A detailed account of the external assistancebeing provided to Paraguay is in Annex 1. - 3 - workshopequipment, and personneladministration. The Undersecretariatof Mines and Energy is a separate entity under the public works roof.

C. Transport Sector Investments

1.11 A few years back the transport sector was put under a rolling five-year investment plan administeredby MOPC's Planning Office. This has worked out mostly as an academic exercise in aggregatingmodal investmentplans, rather than an exercise in minimizingsystem life-timecosts, or optimizingtraffic. The NationalTransport Master Plan Study and the Transport Corridors Study, both completed in 1991, would be a reasonable basis on which to make investmentdecisions, yet they are hardly used for planning purposes as most investmentdecision are ad-hoc and strongly conditionedby bi- and multilateraldonors interests.

1.12 In the five years 1985 to 1990, public sector investmentsin transport averaged about G/. 14.0 billion per year (about US$24 million) (Table 1.1). In real terms they peaked in 1986 when about US$30million were invested, since then they have dropped to nearly half that much. These investmentlevels were, on averagefor the period, about 0.5% of GNP, 2.6% of gross investment(GNI), and about 8% of public sector investments (PI). On a longer perspectivethough, there was a clearly decreasingtrend; while at the beginning of the decade public investmentin transport was about 25% of gross public investment(with a peak of 32% in 1983), by the end of the decade the average was only 5%. These figures are quite low considering the importanceof transport to foreign trade earnings; for instance,equivalent figures for Uruguay are around 1.8% of GNP and 15% of GNI, and in Chile they are about 1.5% of GNP and 10% of GNI.

1.13 On average about 95% of sector investmentshave been for roads, and this proportion has been increasing;3% to 4% has gone for ports and river transport, and this has been decreasing; and a 1 % to 2% has been investedin airports and railways. How- ever, there are large variationsbecause of the lumpiness of transport investments;for instance, the constructionof the internationalairport at Ciudad del Este, which has cost well over US$30million will have increasedthe proportionof funds dedicatedto aviation until it is completedin 1993.

1.14 Between 1993 and 1998 the governmentexpects to invest about G/.800 billion (about US$550million) in the transport sector (Table 1.2), this is an annual average of about US$100million. Comparedwith the US$24 million it invested on average in the last decade, this appears high. Admittedly,however, the last decade, particularlythe last few years of the decade were atypical because the withdrawal of the Bank and other donors from the country forced a sizable reduction in investments.

1.15 External sources are expectedto continueto play a significantpart in financing this volume of investments, about US$380 million, or 70% of total investment, the equivalentof US$60 million per year for the next six years.

D. Ighways

1.16 The highways subsector is described in detail separately in Chapter 2 of this report. -4 - E. Ports and Waterways

1.17 The ANNP owns and operates 19 river and dry ports, and owns depots and free zones in Argentina, Brazil, Chile and Uruguay. The main river ports are Concepcion, Asunci6n, Villeta and Pilar on the Paraguayriver. The dry ports, which ANNP operates at all major road border-crossingsare Pedro Juan Caballero, Salto del Guaira, Ciudad del Este, Encarnaci6nand Puerto Falcon (see Map IBRD 24199). In addition, there are a number of privately owned ports, the largest being San Antonio. It is a bulk facility with a barge loading belt capable of moving 4,000 tons per day, attached to a soybean cleaning and drying plant with a storage capacity of 70,000 tons.

1.18 In 1990 public ports handled about 3 million tons and private ports about 1 million tons (Table 1.3). Of the traffic handled by ANNP about 1.2 million tons went through river ports and about 1.8 milliontons through dry ports. Asuncion and Villeta, the largest river ports, handled about 400,000 tons of traffic each. Ciudad del Este and Encarnaci6n,the largest dry ports, handled about 1.1 million and 450,000 tons of cargo respectively.

1.19 With the constructionof the YacyretAdam, where, as opposedto the Itaipd damn, navigationlocks have been provided, the ParanAriver will becomenavigable below Itaipd (Ciudad del Este). The ANNP is constructinga new river port at Ciudad del Este and a similar facility will be financedby the YacyretADam InternationalAuthority at Encar- naci6n. Both ports are expectedto handle mostly bulk soybean exports.

1.20 ANNP has had operating surpluses over the past decade, mostly on account of charges levied at its dry ports, where it provides no services other than use of the physical facility.

1.21 Paraguay's fleettotals some240,000 registeredtons of which25% is in the hands of the government-ownedshipping company, FLOMERES, and 75% is owned by the private sector (Table 1.4). The private fleet is operated reasonablywell and efficiently, and is self-sustainingfinancially. FLOMERESin contrast, has been running large deficits. Its debts now exceed the book value of its assets by about US$25 million. The governmentintends to privatize the company.

1.22 Althoughthe share of river transport has been increasing in recent years and a further boost may occur with the improvementsexpected under the 'Hidrovia' projecte, only 40% of soybeanexports (the largest single export item) were shippedover the rivers to deep-sea ports in 1990 comparedto 50% moved by truck. A transport sector review currently in progress in Paraguaywill investigatefurther the reasons for the low use of inland navigation.

i/ Hidrovia is the generic name being used to describe the river transport system encompassedby the lower Parana and the Paraguay rivers. The system covers a distance of some 3,500 km, about 2,300 km of the Paraguay river from its source at Clceres, in the Brazilian Matto Grosso, to its confluence with the Parana, and 1,200 km (as the continuationof the Parana) from the confluenceto the Rio de la Plata. Research into the hidrovia is being managedby the IDB. -5- F. Railways

1.23 FCCAL consistsof 376 km of narrow gauge trunk line between Asuncidn and Encarnaci6nwhere it links with the ArgentineUrquizar Railroad. The Urquizar line in turn connects with the UruguayanRailroad across the Salto Grande dam. The track, which was built over 70 years ago, is badly deteriorated. So is the rolling stock which has an average age of 65 years. The locomotivesare wood-burningsteam engines and are in very poor condition. The average speed on the railway is below 20 km/h.

1.24 FCCAL operates two weekly freight services from Asuncion to Encarnacidn, a daily passenger service between Asunci6n and Ypacarafand a weekly passengerservice between Asunci6n and Encarnaci6n. In 1990 it carried some 291,000 tons of cargo; however, most of that originatedon a short stretch close to the border at Encarnaci6nand was hauled on Argentineanand Uruguayanwagons. About 300,000 passengersuse the railway annually and they are moved on coaches leased from the Argentineanrailway.

1.25 With these low volumes of traffic and short hauls it is difficult for FCCAL to operateprofitably. For many years FCCAL has been incurring operatinglosses; for the first time in 1990 the operatingratio was slightlyhigher than one (1.04). FCCAL is also on the list of state-ownedenterprises the governmentintends to privatize.

G. Air Transport

1.26 Although 47 airports receive commercialservices, either regular scheduled or charter flights, only 6 have minimal installations(Itaipd, Concepci6n, Vallemf, Pilar, Ayolas, and Cnl. Estigarribia), and only Asuncidncomplies with ICAO standards(Cate- gory II). Most traffic is either from or to Asuncidnwhich handled about 20,000 landings and take-offs in 1990. About 300,000international, 40,000 transit and 25,000 domestic passengersmoved through Asuncidnin 1990; it also handled about 18,000 tons of cargo.

1.27 There country has two domesticairlines (Transporte Aereo Militar, TAM, and Lfneas Aereas de Transporte Nacional, LATN) and one internationalairline (Lfneas Aereas Paraguayas,LAP). They are controlledby the Civil Aviation Administration,a branch of the Ministry of Defence. In the past, capital expenditureshad been kept to a minimum;however, recently the governmentdecided to construct a new airport at Ciu- dad del Este which, when completed, will have cost over US$30 million. The airport will be able to handle internationalflights in competitionwith a well developedfacility a few kilometersaway across the border at Foz de Iguazd, in Brazil.

1.28 LAP, the government-ownedinternational airline, has been runninglarge deficits over the last years and it is also includedin the list of state-ownedenterprises the government would want to privatize.

H. Sector Planning

1.29 Despite abundantBank assistancesince the first highway project in 1961, planning and coordinationremains weak. The traditionallack of correlation between priorities (determinedby some consistentlyapplied criteria, whether economic or not) and budgets and investmentsstill exists. This was the reason that led to the creation of the Office of IntegratedTransport Planning and Coordination(OCPMI) after the 1973 Para- guay TransportSurvey under the Third HighwayProject, and the reason all projects have - 6 - attempted to strengthen it. Yet, there is still a basic top- and working-levellack of understandingof planning methods and objectives.

1.30 A number of elementshave conspiredto produce this result. Prior to 1989 few budgetarydecisions were made with any technicalinput. Other factors have also added to the situation: consultantsthat were to train OCPIT personnelon planning and coordination, were used instead as staff. OCPIT has usually been staffed through lateral pro- motion and moves, and consequentlyis formed mostly by engineers with an inkling, rather than professionalplanners, economistsor transport specialists. There is also the issue of civil service salaries, it has been difficult to retain capable people, not only in OCPIT but everywherein the ministry.

1.31 MOPC's weak overall planning has also pervaded other areas: (a) MOPC's role in coordinatinginfrastructure investments and regulatorypolicy is also weak, and for this reason contradictoryprojects are undertaken,and at times expenditurescancel out their desired impacts. MOPC's efficacy in this area is handicappedby a lack of preciseness in the statutory link between it and the modal agencies,and by the practice cf the Presi- dent and not the Minister, appointingthe heads of these agencies; (b) donor coordination is not effectivelydone, thus, their well intentioned projects some times contradict one another and their policies often act in oppositedirections: for instance, while the Bank would recommendto contractout most of the maintenance,IDB and OECF have engaged in supportingextensive programs to re-establishan in-housemaintenance capability; (c) communicationwith the private sector is deficient, and this is detrimental to the sector as a whole: for instance,CAPECO, a dynamicgrain and seed-oil exportersorganization, has independentlypursued bilateralnegotiations for transit rights throughBrazil, Argenti- na and Uruguay, while at the same time the Government, through MOPC, has been seeking to improve transit agreementsthrough the same countries.

1.32 MOPC's Planning Office (now OPIT) would be well suited to carry out the necessary modal, donor and public-privatesector coordination. However, from within the Transport Undersecretariatit does not have the necessaryrank to be effective. For coordinationpurposes, OPIT would be better placed as an advisorybody to the Minister than within the Undersecretariatof Transport.

I. Previous Bank Experience with Transport Projects

1.33 The Bank first becameinvolved in Paraguay'stransport sector in the early 1950s, since then it has financedseven highwayand one port projects. The first highwayproject was in 1961 and it and those that succeededit played a major role in the constructionand paving of the Paraguayantrunk road network.

1.34 During this 30-year long associationBank assistance' was concentratedon: (a) paving the trunk network and associatedactivities (feasibilitystudies, engineeringdesigns, piggy-backplanning for more road building), (b) maintainingthe paved and unpaved trunk roads, includingancillary activities such as establishinga maintenanceorga- nization, equipping it, purchasingspare parts and maintainingthe equipment,planning and designingmaintenance activities, training staff, etc., and (c) creating, improvingand subsequentlystrengthening transport planning and coordination.

5/ As reflected by the componentsof successiveprojects. 1.35 Although MOPC was driven by the Bank and other donors who by-and-large financedtheir investments,and by the consultantswho helped to carry out the projects, all projects took much longer to complete and cost more than expected. All succeeded in having their civil works finished, but the maintenance,road and sector management, planning and coordination, and institution building components, failed. For instance, althoughthroughout the 1970sand 1980sthe Bankfinanced generous amountsof technical assistanceto introducemaintenance planning, programming and budgeting,helped to introduceroad inventories,traffic counting,vehicle weightcontrols, pavementevaluation methods, and maintenancemanagement systems into MOPC, efforts faltered and disap- peared as soon as the technicalassistance ceased.

J. Prospective Bank Actions

1.36 The proposed project, togetherwith efforts includedunder IDB projects (Annex 1), would re-establishsome of these activities. However, the project would initiate the developmentand gradual establishmentof a new approachto doing businessat the ministry. Instead of attemptingto re-establishan in-housecapability to produce everythingthe ministry needs to do, as was done in all previous Bank projects, the proposed project intends to build an improvedmanagement capacity at MOPC and to placehigher reliance on procuring services and other inputs from consultantsand contractors, includingall constructionand maintenance.

1.37 The proposed approach would attempt to form and keep at the ministry a core group of competentstaff to coordinateand managecontractors and consultants,and then rely on the group's capacityto have those contractorsand consultantsproduce the necessary works and activities. MOPC agrees that this can be achieved, and that today's MOPC, with its current organizationand top level staff, can reach this objective.

1.38 Earlier Bank efforts to produce institutionalchange were based on the liberal use of technical assistance and consultants, who were expected to transfer know-howand experience to local staff, improve their capacity and thus the delivery and quality of the ministry's tasks. These efforts failed because the consultantsfaced a poorly organized, autocraticallyrun ministry, with few qualified people, who were underpaid and had to work more than their civil servicejob. For the most part the consultantsended up in staff functions, and when their assignmentwas over no one took over. The ministry was, thus, unable to absorb the technical assistanceand improve as expected.

1.39 While a new and considerablyimproved organization is now in place, many of the conditions that led to the earlier failures are still there. In designing the project, therefore, care was taken to limit the use of technicalassistance and consultantsto what appeared essential to prepare the ground to establish the new approach, this is to: (i) identify the basic managementelements that would need to be changed to build an improved managementcapacity, and (ii) to maintain the Bank's presence in Paraguay's roads6. The proposed project includes therefore: (a) a managementstudy (audit) of

fi/ The break of Bank activities in Paraguay in the mid- to late 1980s prompted MOPC to effectivelyreplace it by other donors, notably IDB and OECF. Their commitmentto assistMOPC has caused their advice and approach to be substan- tially followedby MOPC. OECF and IDB are currently, for instance, helping MOPC to re-developan in-housecapability to do highway maintenance. While the Bank would have advised to contract out as much of the maintenanceas possibleto, thus, ease the burden on ministrystaff and improve results, a differ- MOPC's top level operation, the design and implementationof interventionsto improve internal managementprocedures and spawn team-work at the top, and (b) engineering studies to piggy-backanother project on the project.

ent approach is being followed instead. Settinga new course will only be done graduallyand will require compromiseswith the governmentand with the other internationalfinancial institutions. - 9 -

2. THE HIGHWAYS SUBSECTOR

A. The Highways System

2.1 Paraguay has about 28,300 km of national roads of which about 2,600 km are paved, 500 km are graveled and the rest, 25,200 km are dirt roads (Table 2.1). The backbone of the system,the paved networkcomprises a trianglebisected by a north-south axis (Map IBRD 24199): the triangle reaches from Asunci6nto Ciudad del Este (on the Brazilianborder) to Encarnaci6n(in the south, on the Argentineanborder) and back to Asunci6n,the north-southaxis starts at Sta. Rosa in the north, cuts through Cnl. Oviedo (halfwaybetween Asunci6n and Ciudad del Este) and ends at Numi part way to Encar- naci6n (the stretch between Numi and Encarnaci6nis still only a seasonally motorable track). Since 1988 efforts have been largely directed at paving and modernizing the roads in this system. In general, the paved roads are in relativelybetter conditionthan the non-pavedroads which are in poor condition.

B. Highway Administration

2.2 MOPCis responsiblefor the highwaynetwork. This responsibilityis discharged throughthe PublicWorks and CommunicationsUndersecretariat which has two Director- ates relevant to highways and roads7: one for Highways (DRH), it takes care of the trunk, collector and local roads, and of road maintenance;and one for Village Roads (DRVR),which takes care of the vast networkof unclassifiedvillage roads estimated to span another 25,000 km. In practice, however, this division of responsibilitiesis not entirely firm because DRVR was establishedonly in 1992 and does not have the budget or the field organizationto take full care of the village roads.

2.3 The ministryhas a total staff of about 5,250 people of which about half are full- time, permanent employeesand half are part-time, temporary employees. Of the total, roughly 5,000 are administrativeofficers (3,000) and laborers (2,000) and 250 are pro- fessionaland technicalemployees.

2.4 DRH has seven Departments:the Secretary's (DS), TechnicalAssistance (DTA), Administrative(DA), Planningand Projects (DPP), Execution (DE), PavementEvalua- tion and Control (DEPC), and Maintenance(DM). The DM has 3 central divisionsand 5 field Districts, each headed by a seniorengineer with 2 or 3 sections, generallyheaded by a junior engineer.

2.5 The DPP's main function is the preparation of engineering designs. It is a relatively new department and is not yet adequately staffed to either carry out, or to manageeffectively the supervisionof consultantsengaged in detailed engineeringdesign work. The Departmenthas recently been furnished with engineeringdesign software, and some youngengineers were hired to staff a computerunit. This considerablystreng- thened DPP's capability. Encouragedby this new strength, DRH's DPP took a leading role in recruiting and supervisingthe consultantsthat carried out the feasibility studies and detailedengineering designs for the proposedproject. Inspiredby its expandingrole, DRH has recently also taken an interest in highway network planning and feasibility

2/ Other public works, especiallybuildings, and communications:the post office and telephone services, are also the Undersecretariat'sresponsibility. - 10- studies (see para. 2.19 below), de facto seeking the role of a highwayplanning office. It is now aspiring to have this responsibility(which is nominallywith the Ministry's Planning Office, OPIT) moved permanentlyunder its wing.

2.6 DPP also prepares all biddingdocuments and coordinatesthe hiring of consultants and contractorsto carry out DRH's own, and more generallythe ministry's work. Major works have traditionallybeen procured through competitivebidding and great emphasis has been placed on selectingcompetent and experiencedfirms to supervisethe contracts and enforce quality control.

2.7 Tle D is responsiblefor road constructionworks. It coordinatesand supervises the contractorsthat executeroadworks and the consultantswho supervisethem. DE also manages a small volume of force account construction,mostly on "nationalintegration' roads.

2.8 The DEPC is in charge of pavementevaluations and of financial controls. The evaluationunit conductsregular pavementroughness and conditionassessments; it operates the HighwaysDesign and MaintenanceStandards Model (HDM) developedby the Bank to improve strategic and policy planning for maintenance. Training on the use of this model to DEPC (and other potential users within MOPC) was financed, during projectpreparation by a PPF advance. The financialcontrol unit monitors actual expenditures during project executionthey, thus, follow closely the supervisionconsultants. The unit also monitors the use of maintenancefunds.

2.9 The DM is responsiblefor road maintenance. Maintenanceis almost exclusively performed by force accountand executedby district staff. However, a few major pavement patching works and some asphalt concrete overlays have been contracted lately. Still, most asphalt work is done directlyby force account. For this purpose, the DM has, near Asuncidn,an asphalt plant and specializedcrews. All 2,600 km of paved roads are maintainedby these specializedcrews from this central location near Asunci6n. This obviously creates problems and a certain neglect, if for no other reason than the long distances involved in reaching the more distant paved roads. Not surprisingly most pavementrepairs have becomefull surfaceoverlay works, which is an expensivesubsti- tute for timely minor repairs, preventivemaintenance, and for scheduledperiodic maintenance works.

2.10 Also near Asunci6n, at San Lorenzo, DM has a small-bridge repair unit for wooden bridges and minor structures (larger works have to be contracted). Given the considerablenetwork of unpavedroads in the country, there is a large number of wooden bridges and small structures. The unit is responsiblefor most wood-bridgerepairs and also carries out design and constructionof these bridges. Attached to the unit are the remnants of a soils and materials laboratoryoriginally set up in 1968 for the construction of the Asunci6n airport but which now works mostly on bridge foundations.

2.11 DM's equipment fleet is old, undependableand mostly due for retirement, its productivityis low. Maintenanceand repair of the equipmentis precariouslyperformed at district workshops; major repairs are sent to the central workshop at San Lorenzo. Under the new organizationthe San Lorenzo central workshop, and indeed the whole fleet of maintenanceequipment was subordinatedto the Undersecretariatof Administra- tion and Finance instead of Public Works. This has created considerableproblems because it is extremelydifficult to coordinatethe use, operation, and repair and maintenance of equipment between two Undersecretariats. As a result, road maintenance, precariousunder the best of circumstances,has sufferedeven more. While accountability

_------_- - 11 - for the equipment could quite properly remain A&F's responsibility, operating and runningthe equipmentshould be transferredback to those directly involved with its daily use.

2.12 The situation is critical because a large purchase of maintenance equipment, financedby the Japanese OECF, is being delivered and no proper arrangementsfor the use of the equipmentwere made. The impact on the conditionof the roads of this large investmentis threefore in seriou jeopardy.

2.13 Moreover, the planning that should have precede the use of the equipment, the procurementof materials and the deploymentof manpowerthat shouldparallel it, has not been done. Maintenanceplanning has been reduced to a crisis managementtask carried out daily over the telephone with each district engineer. No network can be maintained for very long in a reasonablecondition with such a system. Paraguay's network shows the strain of having been run this way for some time. The sluggishnessof efforts to improve maintenancebodes poorly for the network.

2.14 Bank support for road maintenancestarted in 1961 with the First Highway Pro- ject. That project financedprocurement of maintenanceequipment and spare parts and the preparation of a maintenancemaster plan. This was followed in 1966 by technical assistance to improve maintenanceoperations, and in 1970 by the construction of 13 equipmentmaintenance workshops and the preparation of a four-year maintenanceprogram (1970 - 1973). In the Fourth Highway Project (1974) the acquisitionof more equipment and spare parts together with more technicalassistance were included. The Fifth Project includedseven years of technicalassistance in maintenancemanagement and operations, and academicand on-the-jobtraining, complementedby the constructionof more workshops, the rehabilitationand renewal of equipment,and the financingof more spare parts. The project was expectedto improve maintenancefrom headquarters to districts and from planning to execution. The subsequentSixth Project included more technicalassistance, and the SeventhProject includedtechnical assistance for equipment maintenanceand workshopmanagement.

2.15 Despite this considerableeffort, at times hamperedby competingdemands for resources, but most frequentlyby lack of qualified staff and top managementsupport, maintenancehas sunk to unprecedentedlow levels. In most projects, effortsvanished as soon as the consultants that were sustaining them completed their assignment. The Bank's withdrawalfrom Paraguay in the mid 1980smagnified and underscoredthe short- comingsand difficulties. Since then, IDB and OECF have replacedthe Bank in assisting with road maintenance,and IDB is now financingtechnical assistance to attempt to re- establish a maintenance planning, managementand execution capability'. However, progress has been extremelyslow.

2.16 Under these circumstances,contracting the maintenanceis an alternativeworth exploring, whichthe Bank would encourage. DRH has expressedinterest in experiment- ing with this approach. However, there is little experience in Paraguay on contracting such works. Promptedby the Bank, the Director DRH (DDRH)has declaredhis intention to use funds under the technical assistancecomponent of one of IDB's projects to hire consultants to develop expertise in this area (including help to prepare suitable

I/ A detailed accountof the external assistancebeing provided by differentdonors and agencies to MOPC for highway maintenanceand other highways related matters is in Annex 1. - 12 - bidding documentsfor contractedmaintenance work). In addition, the Ministry should seriously consider elevating the maintenancefunction to the Directorate level, in its current positionas a Departmentwithin the Directorateof Highways it is relegated to a subordinaterole below construction,which does not favor the improvementof its technical level or increases in funding for it.

2.17 Overall achievementof the ministry's main objective (building and maintaining the most economicroad and highwaynetwork in the most cost-effectivemanner possible) is not, at present, being fully reached. Many reasons conspireto produce this result, an importantone is the lack of adequateadministrative procedures to coordinatethe different directorates with one another, so that a harmonious, correlated product is obtained. During project preparationtechnical assistancewas financedthrough a Project Prepara- tion Facility(PPF) advanceto improvemicro-management activities (accounting, internal auditing, managementof own funds, investmentmanagement and follow-up,purchases, etc.) at the Finance and AdministrationUnderSecretariat. Procedural manualsto improve the executionof these activitieswere produced; work was extendedto the Public Works UnderSecretariatand will be followedby similar micro-managementreviews and assessments in the Transport, and the Mines and Energy UnderSecretariats.

2.18 However, there is a need to review "macro"-managementprocesses at the ministry, includingstrategic and administrativedecision making and decisiontransmittal procedures. The proposedproject providesassistance to hire a managementconsultant to carry out this review. The purpose of the review is to design improved macro-management methods to help the ministry discharge its responsibilitiesin a more effective and cost efficient manner, taking into account the strategic alternativesavailable to the ministry to accomplishits objectives. The study is expected,inter alia, to set in motiona process to improve coordinationin the developmentof policies and guidelines, strategic plans (includinghighways and other modal plans), economic decision making and planning, technical guidelines, and administrativeprocesses and procedures would be improved. The study is also aimed at identifyingmeans to improve and promote team-work in the ministry. If necessary, the study would recommendthe establishmentof new structures and systems. The consultantwould complete the managementstudy by June 1994 and his recommendationswould be discussed with the Bank within three monthsof the completionof the study. Thoserecommendations agreed to be implementedunder the project would be carried out before June 1995. Provisionhas been made in the project to bring back the consultantto assist in implementingthe recommendationsagreed to be carried out under the project by December31, 1995. Commitmentexecute the study within this schedulewere confirmedat negotiations.

C. Highway Planning

2.19 With considerablesupport from all seven Bank highwayprojects, highwaynetwork planninghas traditionallybeen done by the ministry's IntegratedTransport Planning Office (OCPMT).Until MOPC's recent reorganizationOCPIT was a DirectorateGeneral reporting to the minister. The reorganizationdowngraded OCPIT to OPIT a directorate within the TransportUndersecretariat. OPIT's new position is an awkward locationfrom which to do highwaynetwork planning, in particularvis-a-vis the DRH, the ultimateuser of highwayplans. DRH has consequentlytaken a renewed interest in highwaynetwork - 13 - planning based on an alleged comparativeadvantage in carrying out the task9, and has staked a strong claim over it (see para.2.5 above).

2.20 While the reorganizationdefines fairly well the responsibilitiesof each Under- secretariat,overlaps and voidswere inevitable. Planningis one of them. OPIT is clearly in charge of overall transport sector planning, but whether or not this should include highway planning and thus, the preparationof highway feasibilityand other studies that would eventuallyto be implementedby the DRH, is controversial. On the one hand, OPIT's role could be made exclusivelysectoral: reviewing, allocatingand coordinating priorities among competingmodes, without becoming involved directly and intimately with the highwaysat the same time. If this were the case, full responsibilityfor highway networkplanning and feasibilitystudies should be place in DRH, togetherwith the traffic counting program and other data collectiontasks necessaryto plan roads. Alternatively, on the other hand, OPIT's role could, conceivably,include highwaynetwork planning, as has traditionallybeen the case. In this case, however, the Office shouldbe elevated, to have rank over the DRH who would carry out such plans. No immediatedecision is expectedof the ministryon this issue. The proposedproject providesassistance to hire managementconsultants to carry out a review MOPC's organization, its distributionof functionsand managementprocedures. The consultantwould completethe studyby June 30, 1995, their recommendationswould be discussed with the Bank within three months of the completionof the study and those recommendationsagreed to be carried out under the project would be implementedby December31, 1995. This schedulewas confirmed at negotiations.

D. Highway Expenditures, Financing, Cost Recovery, Future Expenditures

2.21 ExDenditure. In Paraguay budgets are mostly meaningless. They are padded for public consumption,well beyond executioncapacity and grossly above the financing capabilityof the government. For this reason a better indicationof MOPC's performance is obtainedfrom budgetaryexecution, i.e. effective expenditures. TraditionallyMOPC's executionhas been no higher than 45%-50% of the budget. Expenditures,however, are the combinedresult of the agency's capacityto do things and the volume of funds effec- tively appropriatedto it (in turn a reflection of government(and parliament's) priorities in the allocationof resources). True capabilityis, thus, difficult to measure.

2.22 In the past eight years MOPC's total expenditureshave averaged about US$40 million annually (in real terms excludingdebt payment, which traditionallywas paid by the Ministry of Finance but which since 1992 is charged to the line ministries) (Table 2.2). Of this total about 90% was spent on highways and road related activitiesand 10% on other ministryobligations (mines and energy, tourism, postal service, the merchant marine, the railway). On average current expenses are close to 30% of the total and capital expenditures, which include offices, office equipment, field machinery, road related maintenanceexpenses and road constructionprojects close to 70%. On maintenance, the proportion of administrativeto road related expenses is much higher, about

2/ DRH claimsto be closer and more intimatelyinvolved with roads, its field offices carry out the traffic countson behalf of OPIT, and its Evaluation and Control Departmentcarries out pavementsurveys and evaluationson which much of the planning is based. It claimsa higher level of technicalexpertise in the field, and would probably be as well suited to take on the full responsibilityfor highway planningas OPIT, if it were strengthenedwith a sufficientnumber of economists and planners it currentlydoes not have. - 14 - 50% each. All told (Table 2.4), in the last eight years MOPC has spent about US$28 million on road construction (investment), US$5 million on maintenance and US$7 million on its own administration.

2.23 The ratio of new constructionto maintenanceexpenditures over the last eight years has averagedabout 5: 1, i.e. for every US$5 spent on constructiononly US$1 was spent on maintenance(of which, on average, only 50 cents end up on the roads). The ratio is imbalanced,yet has tended to increaselately, to 7.8:1 in 1992 and about 7:1 in 1993 (see Table 2.4). Comparablefigures in Uruguay for instance, have been 1:1 con- sistentlythrough the 1980s;in Chile they were 2:1 at the beginningof the 1980sand 1:2 at the end of the decade, they are expectedto remain about 1:1.5 throughthe 1990s. The imbalancein Paraguayshould be remedied and a higher proportion of the budget should be devoted to maintenance.

2.24 A recent study of road needs carried out with the help of the HDM model' concludedthat to keep the networkin a reasonablecondition about US$20million should be spent on maintenanceevery year in the next five (1992-1996)". A review of expenditures in 1993 (Table 2.4) shows that whilethere was a considerableincrease in maintenance fundingover earlier years, a significantshortfall vis-a-visthe consultant's recommendation(about US$10million) still exists. A fresh review of maintenanceneeds, and new NationalRoad MaintenancePlan will be prepared under IDB's auspices, this would include a reassessmentof maintenancefunding. For the time being, though, as a minimum commitmentof the governmentto graduallyincrease maintenance funding, the Bank should seek assurancesthat the proposed 1994 budgetaryallocation for maintenancewill be upheld, that it will be increased to become not less than the equivalent of G/. 26 million (1994 guaranies)(about US$13million) by 1995, and that this level will be maintained, in real terms, thereafter until the project is completed(Table 2.4) (see also para. 2.28).

2.25 Financing. Highwayand road expendituresare funded throughbudgetary appropriations. These, in turn, are tied to designated,specific sources of funds. If revenues from the designated source materialize, an appropriationmay be made to the agency. In turn, the size of the appropriationdepends on what other expenses are financed from that same source and the priority the governmentassigns to the different expenditures financed by the source. Ordinary resources (taxes, includingroad user taxes) and, in recent years, part of the Itaipd royalties, have financedMOPC's current expenditures. Capital expendituresare financedpartly with ordinaryresources and Itaipl5royalties (both local resources), and mostly with foreign borrowing. When funds from any source fail to materialize,or the funds of a source are put to differentuse, the investmentprogram shrinks. In 1989 and 1990 for instance, when fewer foreign funds were available,local appropriationsto MOPC were increasedto prevent investmentsfrom falling too much (Table 2.3 budgetary executionby source of funds) .

2.26 Foreign borrowinghas traditionallyaccounted for about 70% of total road investments; however, in 1989 and 1990 the proportion was considerablylower, about 25%, because most donors (exceptthe IDB) withdrewfrom Paraguay in the mid-1980s,their

1J/ Estudio de la financiaci6n y recaudaci6n de fondos para carreteras, SAE- CONTEC, 1991.

.1/ Assuminga similar growth of the networkas was accomplishedby MOPC in the last five years. - 15 - projects were completedand no new projects followed. The proportion increased again in the early 1990s as foreign financial institutionsrebuilt their project portfolio.

2.27 The recovery ratio on highwayexpenditures (investments, operation and maintenance) is about 1.5:1. Road users generated,through taxes on motor fuels, lubricants, spare parts, tires, importduties on vehicles,and as tolls, and vehicle and driver licensing fees, annual average receiptsof over US$61million between 1985 and 1990 (Table 2.5), while expensesaveraged about US$40 million. Taxes, includingduties, typically account for about 75% of receipts, the rest are tolls and fees some of which accrue directly to MOPC and some to municipalities.

2.28 However, road-user charges and taxes are not earmarked. Thus, while user-fees and taxes are more than enoughto recover the cost incurred in providingthe public roads system there is no guarantee that enoughfunds will be availableto finance all necessary expenses. During project preparation, the desirability of earmarkingat least a portion of road-user revenues, to cover part of the underfundedmaintenance was discussedwith government. The Ministryof Finance (MOF), understandably,refused to earmark road- user related revenues. Instead, it agreed to appropriateenough funds to ensure proper maintenanceof the roads. The Bank should insiston appropriations(in real 1994 guaranies) of not less than G/.19,600 million in 1994 and G/. 26,000 million in 1995 and every year thereafteruntil the project closes (about USS 13 million in constant real terms per year). This is below the amount estimated by consultantsto be needed for maintenance in the next five years (US$20million per year, para. 2.24) but is still muchhigher than recent expenditures(which were on average only about US$5 million per year). This commitmentwas confirmedat negotiations.

2.29 Future Investmentand MaintenanceExpenditures In the next few years MOPC expects to increase maintenanceexpenditures as described above, and at the same time increase considerablyits road projects spending. Disbursementson these two items, if MOPC's wishes materialize,would rise from the roughly US$58 million spent in 1992, to US$94 million in 1993, to US$104million in 1994, to US$120million in 1995 (Table 2.4). Table 2.6 shows in detail MOPC's proposed investmentand maintenancespending program (1994-1998),it includes:funds necessary for the proposedproject; the suggested maintenanceincreases (para. 2.28); other foreign financedprojects: notably IDB, OECF and FONPLATAprojects; and locally funded projects.

2.30 These investmentincreases, while large (work volumes would be three- to four- times historic averages) are technicallyfeasible. They postulate,however, that enough resources will indeed be made availableto MOPC to carry out such a large program. To materializethe program, budgetaryexecution (appropriations) traditionally only 45%- 50% of budgetary forecasts would have to increase to 100%. To just comply with currently committed,unavoidable expenses for foreign-financedprojects (includingthe Bank project), that is, excludinglocally financed projects, budgetary executionwould have to increaseto 80%. The proposedBank project, about 15% of the whole program, would impose a heavy burden on funding needs. This effort is sought at a time when Paraguay's short and medium term fiscal prospects are tight (and for macroeconomic stability reasons should continue to be kept tight), and when, thus, the Ministry of Fi- nance may find it hard to appropriatethe funds. MOPC, however, foreseesno problem in fundingthe project and carrying it out accordingto the proposed schedule (Table3.3). - 16 - 2.31 Given these financial uncertaintiesthough, the Bank, while accepting the proposed project and its executionschedule, soughtadditonal assurances over and above the standardcontractual commitment, wherein the governmentvouches to providethe necessary counterpartfunds for the project promptlyas needed every year. The Bank sought to ensure that MOPC's counterpartbudgetary appropriationsfor the project, and funds for the maintenanceof roads were at least as follows:

YEARLY MAINTENANCE AND WORLD BANK PROJECTAPPROPRIATIONS (in jiiionsof 1994 guaranies)

1994 1995 1996 1997 1998 1999

bLaizentnce 19,600 26,000 26,000 26,000 26,000 26,000

WB Project 9,200 9,500 9,000 9,000 8,000

TOTAL 28,800.00 35,500.00 35,000.00 35,000.00 34,000.00 26,000.00

(1994 USS) 14.40 17.75 17.50 17.50 17.00 13.00

2.32 To monitorcompliance with these appropriations,reporting requirementsinclude MOPC informingthe Bank: (a) a month beforethe budgetproposal for MOPC is submitted to Congress, of the contents of such proposal, item by item and project by project includingthe maintenance; (b) within a month of Congress' approval of the budget, of the contentsof MOPC's approvedbudget, item by item and project by project including mnaintenance;and, (c) within a month of the conclusionof each fiscal year, starting with FY 1993, of MOPC's budgetary execution for the fiscal year just concluded, item by item and project by project includingthe maintenance. Review requirementsinclude formal meetingsevery year, within three monthsof the conclusionof the fiscal year, for the purpose of discussingMOPC's budgetary executionand project progress.

E. Higghwaysand the Environment

2.33 Oversightof environmentalmatters in Paraguay is the responsibilityof the Natu- ral Resources and Environment Undersecretariatof the Ministry of Agriculture and Livestock (MAG). In January, 1991 an InterministerialCommission" 2 was created to coordinateenvironmental impact assessments(ELAs) and review studies on how to mitigate the effects of roadworks. The Commissionincludes representatives of other sectors that mightbe affectedby road projects and, if necessary,may solicit the participationof other public and private agencies.

2.34 In March, 1991 MOPC created its own EnvironmentalUnit reporting to the Undersecretaryof Public Works. It largely parallels the InterministerialCommission. The Unit is charged with preparing EIAs for all public road projects and to coordinate the study and implementationof mitigating measures found necessary in each project.

IZ/ The Commissionis chairedby the Undersecretaryfor Natural Resourcesand the Environmentof MAG and includes as regular members MOPC's Directors of Highwaysand of Rural Roads, the TechnicalDirector of the ParaguayanInstitute of IndigenousAffairs (NDI), MAG's Director of the NationalOffice for Project Coordination and Administration(ONCAP), the Director of Planning of the Rural WelfareInstitute (IBR), the Director of the NationalForest Service (DRF), and the Director of the National Park and Wildlife Service. - 17 - The Unit has a staff of five, it is headed by a graduate biologist, and supported by a geographer-engineer,a civil engineer, a forester and a humanecologist. This is adequate for its current workload. At present the Unit is monitoringthe implementationof mitigation measureson two IDB supportedroad projects. The Unit coordinatedand followed the preparationof the EIA studies that consultantsprepared for this project.

2.35 The group is young and inexperiencedand needs training in all aspects of EIA work includingthe preparation of TORs, and the contracting and managingof consultants. Supportto equip the Unit was includedin the IDB projects. The proposedproject intends to provide for some elements not covered by the IDB, like additional training and, especially, professional exposure of the staff. This would include financing the participation of Unit staff in training seminars and conferences, and the provision of training scholarships.

2.36 Environmentalwork is stillseen as an activity imposedby outsiders. The degree of environmentalawareness within MOPC and the governmentmore generally, is low and integratingthe Unit's work into MOPC's routine operations is needed. Therefore, the projectincludes financial resources to organizeawareness and disseminationseminars especiallyfor design and constructionengineers in both, MOPC and the municipalities, and in other governmentagencies.

2.37 Ideally, the EnvironmentalUnit shouldcover envirommentalissues related to all modes of transport, not just roads. It would appear reasonable,then, to locate the Unit together with the ministry's PlanningOffice which alsohas a multimodalmandate, rather than under the Undersecretariatof Public Works. The issue will be reviewed in the context of the ministry's managementreview.

F. The Road Transport Industry

2.38 Passenger travel in Paraguay is predominantlyby bus; road transport accounts for about 85% of total inter-urban passenger movements. Domestic interurban road transport is handled by some 309 private companieswith an average of six buses each (Table2.5). Public passengertransport, as in most countries, is tightly regulated: there are entry, route and tariff controls. Tariffs vary accordingto distance and road surface and their level appears reasonable. The Surface Transport Departmentin the Transport Undersecretariatis in charge of controllingthe industry and fixing tariffs, they have a well definedmethodology (copied form Brazilianstandards) to update periodicallypassen- ger fares. The growth of the fleet at some 5.2% over the last decade, and a shift to larger vehicles would indicatethat the industryis healthy and has grown in parallel with the improvementof the road network.

2.39 Paraguay's trucking industry comprises two distinct segments: a domesticseg- ment dominatedby one vehicle owner-operators,and an internationalsegment of mostly big trucking firms. There are no entry, route or tariff restrictions to trucking, and regulationsare limited to the yearly registration of operators and the licensingof vehicles. The capacity and compositionof the trucking fleet for the domestlc market is reportedly adequate, although no accurate figures are available. OPIT estimates that there are about 25,000 trucks involved in domestic trucking services, of which about 5,000 are not registered (mostly older vehicles).

2.40 There are 113 intenational trucking operators licensed in the country and the industry appears healthy. Internationaltrucking, mostly soybeans destined for the port of Paranagua in Brazil, is the subjectof a bilateralagreement with Brazil. The agreement - 18 - defines the number of trucks that may cross from Paraguay into Brazil per day and the times at which they may travel. During the 1991 harvest season, 410 trucks were allowed each night. The agreement also specifies what proportion of the trucks must be Brazilian. During the 1991 harvest season the Brazilian share was 50%; this still leaves Paraguayantruckers with a share of the marketthat is beyondtheir capacity. Paraguayan truckers often lease Brazilian trucks to fulfill their own quota.

2.41 At times, the limitationon the numberof trucks has affectedexports, and for this reason the share of trucking in soybean exports has progressivelydeclined from about 82% in 1986to 47% in 1990. The share of river transport has correspondinglyincreased from 11% to 39% during the same period. The limitationshave also forced Paraguay to search for other export routes. However, the options are few and in recent years, CAPECO, the soybean exporters association,has concentratedon negotiating increases in the number of trucks provided in the agreementwith the Braziliangovernment.

2.42 The road vehicle registration records carried at present in Paraguay are quite limitedand poor, witness the lack of informationon the number of trucks in the country. In fact, each municipalityis currently empoweredto register vehicles, and few questions are asked as to their origin and ownership. Becauseof the importanceof the registryfor transport and traffic planning, for traffic safety, to charge road users for road costs, as well as for purposes of law enforcement, the proposed project includes resources to finance the installationof a national vehicle registry. The new registry, which will be computerized,is expectedto allow a better control of vehicle imports and vehicle ownership, to charge properly for vehicle registration and thus increase the revenue collected from registrationfees, to enforce better the traffic code and to collect traffic fines, and generally to improve traffic safety.

2.43 More than ten years ago, under the Seventh Highway Project, the Bank helped to finance the acquisitionof equipmentand the constructionof facilities to control truck axle loads. However, some of the equipmenthas yet to be installedand effective control of loads has yet to be vigorouslyenforced. Another study recently financedby IDB has again recommendedimproving axle load enforcement. MOPC has restated its intention to enforce vehicle weight controls.

2.44 Road safety, the policingof road traffic, and enforcementof the traffic code are the responsibilityof MOPC's Traffic Police Departmentin the Undersecretariatof Trans- port. However, the Departmentlacks a comprehensiveroad safety program, and has little equipment, manpower, and operating funds. An IDB highway project includes assistanceto improveroad safety, it would assist MOPCwith the identificationof danger- ous or black spots along the roads, the improvementof road accidentdata collection,the developmentof TORs to study and design improved road signalling,the preparationof TORs to contract an updatingof accident cost information,the preparationof TORs for the developmentof a vehicle inspectionprogram, and the developmentof TORs for a traffic safety campaign. Based on the results of these studies and further assessmentof the road safety problem in Paraguay future Bankprojects may include a comprehensive traffic safety program. - 19 -

3. THE PROJECT

A. Background

3.1 The new governmentthat took over in Paraguay in 1989 requested Bank assistance to review the operation and managementof ports and inland waterways, with a view to engagingin a project that would help to improve import/exportoperations. The review concludedthat most port investmentswere either alreadyunder way, or had been taken on by the private sector. The request was then extendedto includeport accesses.

3.2 With an uncommittedbalance of the SeventhHighway Project (Loan 2140-PA) a study of the export corridors and their related road facilities was done. The study identifieda number of urgently needed improvements. The most obviouswere to reduce traffic congestionon the southern access to Asunci6n (from Paraguarfthrough Ita, Gua- rambare, Ypane, Nembyto Cuatro Mojones), on the major traffic distributor(ringroad) within the city (Cuatro Mojones - Defensores del Chaco - Madame Lynch - to the junction with Rt.9), and at the port of Asunci6n. Becausethe port is now surroundedby the city and its land-sideaccess has becomepoor, it was concludedthat it was best to encourage the transfer of port operations to Villeta, about 40 km south of Asunci6n. For this to be possible access to Villeta had to be made more expeditious. This matched the already identified improvementof the southern access of the city, and would have the addedbenefit of facilitatinguse of the port of San Antonio, a private facility about 30 km south of Asunci6n (Map IBRD 24199).

3.3 Reducing congestionalong the ringroad (Defensoresdel Chaco - Mme. Lynch) would not only improve traffic in-and-aroundthe city, but also help to solve a major problem with floods that occur as frequently as it rains in Asuncion. The floods are a hazard and nuisance to people who live in the area, and bring the city to a standstill because traffic on the ringroad stops. The designof the improvedringroad providesfor the constructionof flood control and drainage structures to evacuate storm water and prevent future flooding.

3.4 Upgradingthe highly used unpaved section from Limpio to Emboscada(Rt. 3) on the northern access to Asunci6nwas another obviousneed; improvingit will enhance the qualityof life for people in the suburb of Emboscadawho use the road for their daily commute.

3.5 The resurfacing of 100 kms of Route 6, at the eastern end of the country is another urgent need. Route 6 runs parallel to the Parana river from Encarnaci6n to Ciudad de Este. It traverses the most productive agriculturalland of the country; the area producesover 70% of the soybeanexports. The road is intenselytravelled, particularly during harvest season when loaded trucks travel north to Ciudad del Este to cross the Parana river and proceed to the Brazilianport of Paranagua from whencethe soybean is exportedto the world. The road was built under the Sixth Highway Project in the late 1970s and early 1980s. The section now includedin the project has not been resurfaced since. The pavementis showing sings of distress and resurfacingwould prevent further deteriorationand higher rehabilitationcosts.

3.6 The size and conditionof the unpaved national roads networkhas long been an MOPC as well as Bank concern. The opportunityof this project was seized to include in it a pilot program to assess the behavior in Paraguayof a new sulphonatedcompound - 20 - developedin South Africa to surface unpaved roads and improve their rideability, increase their durability, and reduce dustpollution. The materialhas been used successful- ly in South Africa, Venezuela,Colombia and a few other countries, and if successfulin Paraguay could becomea comparativelylow cost solutionto improve the large network of unpaved national and village roads.

3.7 While the studiesand engineeringdesigns were being prepared, MOPC management reorganizedthe Ministrywith a view to modernizeit, correct major organizational deficiencies,enhance working conditions,improve its ability to deliver more, better and more economicalroads, and to revamp sector management. The Bank's assistanceto strengthenthe new organizationwas requested, and technicalassistance in selectedareas has been includedin the project.

B. Project Objectives

3.8 The proposedproject is principallyaimed at strengtheningMOPC's organization and promotingteam-work at its highestlevel, thus, improvingits capacityto delivergood roads and a well maintainednetwork. This objective would be accomplishedthrough the financingof selective technical assistanceand training, and of civil works. The latter would, in addition, ease the problemsof rapid urbanization,and: (a) reduce enviromnen- tal hazards and the nuisance caused by frequent floods along Asunci6n's ringroad; (b) expedite exportsby facilitatingthe use of alternativeports, (c) lower the costsof trucking soybeanexports to the Brazilianborder; (d) enhanceDH highwaydesign and roadworks planning capability, (e) improve enviromnentalassessment skills at the ministry; and (f) assist in establishinga NationalVehicle Registry.

3.9 The proposed project is framed within the Bank's country assistancestrategy of addressing the physical constraints and social pressures arising out of the rural-urban migrationthat results from the high rural populationgrowth of Paraguay. The strategy also calls for support to exports by upgrading the transport infrastructure.

3.10 After a seven year lending gap in Paraguay, Bank activities must also be cogni- zant of, and blend in with the activitiesof other donors. The proposed project would complementthe considerableassistance included in parallel IDB and OECF projects: these deal with improvingthe nationalhighway network and improvingmaintenance, and are based on developingstronger in-housecapabilities at MOPC to carry them out (An- nex 1). The technical assistance in the project would move in a different direction, however, namely to help MOPC organize itself to contract with the private sector the maintenance,construction, planning, engineering services, and other tasks MOPC has to carry out. This approach would spare MOPC staff to coordinate and manage the program rather than do it themselves. An initial step in the new direction is to develop stronger internal team work and coordinationin the decisionmaking and implementation of decisions, while at the same time ensuring that systems are in place that allow for more efficient and effective performance. - 21 -

C. Project Description

3.11 The proposed project would consist of:

(i) Civil Works (US$66.5million)

(a) Road Improvements(US$59.4 million):

- Route 1: Paraguarf - Ita (south access to Asunci6n, 24.0 km, US$3.3 mln.): addingpaved shoulders and strengtheningthis 2-lane road, including the constructionof off-road bus-stopsthroughout.

- Ita - Guarambare - Ypane - Nemby - Cuatro Mojones (south access to Asunci6n, 34.6 km, US$18.4 m1n.):construction of a new 2-lane road from ItA to a point on the existing Ypane - Nemby road near Remby (21.8 km), includingby-passes of the towns of Guarambareand Ypane and the provisionof off-roadbus stops; wideningto 4-lanes between the junction with the existingYpane - Nembyroad (near Nemby, above)and Cuatro Mojones (12.8 km), including strengtheningof the existing 2- lanes, a by-pass of the town of Nemby, and the provisionof off-roadbus stops.

- Cuatro Moiones - to Route 9 (ringroad of Asuncion, 12.3 km, US$26.9 mln.): wideningto urban 4-lane standard the existing, mostly 2- some- times 3- to 4-lane road; interconnectingthe new highwayto all city access routes including constructionof three major over-passes and improvementof three other intersections(Table 3.1). Work would include constructionof a new roadway,strengthening the existingpavement, traffic lights, the constructionof a bicyclewayoff the main road, provision of pedestrian crosswalks, and improvement of two main storm-drain canals (along the Defensoresdel Chaco section and the Madame Lynch section of the ringroad)to prevent continuedflooding in the area.

- Route 3: Limpio - Emboscada (north access to Asuncion, 17.0 km, US$6.2 mln.): paving the existing 2-lane gravel road between Limpio and Emboscada,including replacement of an old bridge and provisionof off-road bus-stops.

(b) Road Rehabilitation(US$6.1 million):

- Route 6: from Jct.Rt.7 to km 100 (100km,US$6.1 min.) : rehabilitation and strengtheningof the existing2-lane paved road, includingconstruc- tion of off-road bus-stops.

- stabilizingapproximately 40 km of unpavedrural roads with sulphonated oils (US$1.0 mln.). - 22 - (ii) ConsultingServices (US$8.8million)

(a) EngineeringServices (US$6.1mln)

- supervisionof all civil works (US$4.0 mln); - engineeringdesigns for the rehabilitationof Rt.6 (US$0.2 mln); - engineeringdesign, control and technicalassistance for the pilot unpaved road stabilizationprogram (US$0.1 mln); - engineeringstudy and design of improvementsto the Ytay and the Lam- bare creeks (US$0.3 mln); - refinancingof expendituresincurred under the PPF facility for engineering services (US$1.1 m]n).

(b) Studies (US$0.7 mln.)

- preparation of a highway master-plan (20 to 25 year horizon) for the greater Asunci6narea includingthe identificationof mediumterm priorities and the location of a possible outer-ringroad(US$0.5 mln); - refinancingof expendituresincurred under the PPF facility for environmental studies (US$0.1 mln).

- to strengthen MOPC's organization including a management audit (US$1.0 mln); - to strengthen MOPC's EnvironmentalUnit (US$0.1 mln); - to strengthenMOPC's DH Departmentof Planning and Projects (US$0.1 min); - to establish a National VehicleRegistry (US$1.0 mln); - refinancingof expendituresincurred under the PPF facility for technical assistanceand organizationalstudies (US$0.3 min).

(iii) Eguipment(US$0.5 mln.)

- computersand softwarerequired in connectionwith the implementation of the national vehicle registry (US$0.4 mln); and - equipmentfor a soils and materials laboratory(US$0.1 mln).

3.12 Detailed descriptionsof all major project items are in annexes: Annex 2 has a detailed descriptionof the road improvementworks includingthe stormwater drainage works; Annex 3 has a detaileddescription of the pilot unpavedroad stabilizationprogram includingthe terms of reference for the consultant; Annex 4 are the terms of reference for the consultantthat carries out the surveyingand design work for the improvementof the Ytay and Lambarecreeks which are beyond the stormwaterdrainage works included in the project; Annex 5 are the terms of reference to carry out the Asunci6n transport Master Plan; Annex 6 are the managementconsultant's terms of reference; Annex 7 describes the strengtheningof MOPC's EnvironmentalUnit; Annex 8 describes the strengtheningof the Departmentof Planningand Projects; and Annex 9 containsdetailed terms of reference to establishthe NationalVehicle Registry. - 23 - D. Project Preparation

3.13 A US$1.5 million Project Preparation Facility (PPF) advance was used to financed a considerableamount of consultantsupport to help MOPCto prepare the project, more specifically:

USec. Public Works consultingservices provided to DH to: (a) coordinateproject preparation (US$15,600) (b) prepare the detailed engineeringdesigns for the road improvementcomponents (US$1,068,000); (c) prepare design standardsand review pavement designs prepared by the consultantsin (b) (US$61,100); (d) prepare the TORs to contract, and then carry out the environmentalimpact assessment(EIA) studies for the roads improvementcomponent (US$147,200); (e) review DH's organization,assess the organizationalshortcomings and recommendimprovements (US$12,250); (f) assess the most immediatemaintenance needs (US$20,000);(g) install and run the highway design and maintenancemodel (HDM) (US$7,500);and (h) prepare TORs to hire a consultant to prepare and help to executethe pilot unpavedroad stabilizationprogram (US$25,000).

USec. Transport consultingservices to: (a) prepare the TORs to contract the technicalassistance and consultantsto set up the national vehicle registry (US$26,500); and (b) review the Undersecretariat's organization and recommend improvements (US$30,000).

USec. Administrationand Finance consulting services to design, set up and implementan improved, computerizedbudgeting, accounting and budget management system (US$128,000).

3.14 The PPF advancewill be refinancedwith loan proceeds as soon as the proposed project becomeseffective. The amountsdisbursed under the advancehave been included as part of project costs.

3.15 Detailed engineeringdesigns for the road improvementcomponents were done by CONSULPARand FORAGRO-PARELCboth Paraguayanengineering firms and by SAE-CONTECan paraguayan-argentineanjoint venture, they were assisted at times by specializedconsultants. The designs were professionallydone and are sufficientlyde- tailed to allow the works to be tendered confidently. Some constructiondetails are still to be settled, in particular detailed site tests and investigationsare needed to: (a) determine the exact structure of pavements,especially along side streets that will be used as the leaves of the clover-leafintersections, (b) complete design of some intersectionsand corners, (c) finalize design of signalling, traffic lights and other traffic control devices, (d) finalize the street lighting and electrical plans, and (e) finish the detailed plans for complementaryworks. It is normal for some of this work to be done by the supervision consultantin parallel with the supervisionof the works; however, because of the number of tests and site investigationsneeded, and because of the complexityof the construction, particularlythe ringroad,the qualificationsof the supervisionconsultant is critical. It has been agreed with MOPC, therefore, that the consultantwould be selectedfrom a shortlist of highly qualifiedconsultants with extensiveexperience in major urban roadworks.

3.16 Special care was taken to incorporateinto the engineeringdesigns, particularly of the ringroad, physical featuresthat would mitigate the social impact of the roads such as: sheltered bus waiting areas, large bus-stop bays, sufficientparking for commercial and businessestablishments along the routes, lower curbs to accessoff-street parking lots, constructionof a tunnel under the ringroad to access the wholesale market, overhead pedestrian crossings at strategic places, traffic light protected at-level pedestriancross- - 24 - ings, wider sidewalks,appropriate street lighting,appropriately sloped sidewalks to avoid water puddles, use of non-slip materialon sidewalksteps, use of center barriers to prevent people from jaywalking,construction of a parallel bicyclewayto access a park, and appropriatelandscaping to blend the constructionto the surrounding environment.

3.17 Similarly, specialcare was taken to minimizethe environmentalconsequences of the project: adequateenvironmental protection standards for road constructionworks exist in Paraguay, these deal with the handlingof construction,excavation and fill materials, the disposalof waste materials,the contaminationof streams and water course, limits to constructiondust and fumes, and many other constructionrelated factors. Complying with these regulationsis a normal contractualrequirement. However, in the case of the ringroad additionalprotective requirementshave been imposedon the contractorto limit dust pollution, to limit the size of constructionvehicles that can be used on site, to specifywhere and at what times constructionmaterials can be stockpiled,and to demand constructionof the stormwater drainageworks before the roadworks are started.

3.18 Detailed engineering for the resurfacing of Rt.6 and for the pilot stabilization program would be prepared as a part of, and within the project.

E. Project Costs

3.19 Total project costs are estimated to be US$90.0 million, including US$ 9.9 million (about 11%) in taxes and duties, US$7.6 million of physical contingenciesand US$ 6.6 million of price contingencies. Physicalcontingencies were estimateas 10% of base costs. In line with Bank guidelines, price contingencieswere estimated as 3.8 % for 1993, 1.9% for 1994, and 2.7% for 1995, 3.4% for 1996 and 3.6% from 1997to 1999. The foreign exchangecomponent of the project is estimatedto be 62%, some US$ 56.1 million.

3.20 Cost estimatesfor the road improvementsare based on quantity estimatesin the detailed engineering,and on unit prices for similar works aroundJune 1992(Table 3.2). Road rehabilitationcosts are basedon work quantitiesobtained from detailedengineering for similarprojects and unit prices from bids also aroundJune 1992. Engineeringservic- es costs are based on contracts for similar services procured under the PPF advance, supervisioncosts were taken from similar services in IDB projects. The costsof studies and technical assistance were estimated using staff-month rates for foreign and local consultantscomparable to those paid during project preparation. The foreign exchange component (FEC) of civil works was estimated from similar contracts. The FEC of engineeringservices was estimatedassuming that supervisioncontracts and designstudies wouldbe awardedto joint-venturesof foreign and local firms with a limitedparticipation of foreign consultants. However, technical assistance for institutionaldevelopment is expectedto be providedmainly by a foreignmanagement consultant. For equipment,the FEC was estimatedto be 80% of CIF prices at the port of entry and assumingthat DH would pay all import duties, custom clearanceand port costs. - 25 -

SUMMARY OF PROJECT COSTS

(Estimated In Millions of US Dollars at 1994 Prices)

Description Local Foreign Total Foreign Cost Cost Cost Cost as % of Item Civil Works Road Improvements Paraguarf - Ita (Rt.1) 1.2 2.1 3.3 65 ItA - Cuatro Mojones 6.4 12.0 18.4 65 Cuatro Mojones - Jct.Rt.9 9.4 17.5 26.9 65 Limpio - Emboscada (Rt.3) 2.2 4.0 6.2 65 Land Acquisition 4.6 0.0 4.6 0 Resurfacing Rt.6 2.1 4.0 6.1 65

Stabilization Program 0.4 0.6 1.0 65 Sub-Total Civil Works 263 40.2 66.5 60 Consulting Services Engineering Civil Works Supervision 1.6 2.4 4.0 Design Rehabilitation of Rt.6 0.1 0.1 0.2 Pilot Stabilization Program 0.1 0.1 Engineering Design of Creeks 0.1 0.2 0.3 PPF Engineering Services 1.1 1.1 Studies Asuncion Trspt. Master Plan 0.2 0.3 0.5 PPF Environmental Studies 0.1 0.1 Technical Assistance & Training MOPC Management Asistce. 1.0 1.0 Environmental Unit 0.1 0.1 DPP Strengthening 0.1 0.1 National Vehicle Registry 1.0 1.0 PPF TA Expenditures 0.3 0.3 Sub-Total Consulting Services 2.0 6.8 8.8 75 Equipment 0.1 0.4 0.5 80 Base Cost 28.4 47.4 75.8 62 Physical Contingencies 2.9 4.7 7.6 Price Contingencies 2.4 4.2 6.6 Total Cost 33.7 56.3 90.0 62 - 26 - F. Project Financing

3.21 The Bank would finance72% of project cost, includingUS$ 9.4 million equivalent of local costs. The Governmentof Paraguay would finance the remainingproject costs.

Financing Plan (USS million)

Local Foreign Total

IBRD 9.4 55.6 65.0 Governmentof Paraguay 25.0 - 25.0

Total Project Costs 34.4 55.6 90.0

G. Project Implementation

3.22 Executionof the project wouldbe the responsibilityof MOPC. The Undersecre- tary of Public Works through its Directorate of Highways (DH) would manage the contractingof all civil works, the related supervision,the engineeringfor the resurfacing of Rte.6, the design of the improvementsto the Ytay and the Lambare creeks, and the implementationof its portion of the technicalassistance. DH would also be responsible for procuringthe laboratoryequipment in coordinationwith the Directorateof Goodsand Supplies. The Environmental Unit which also reports to the Undersecretary would implementits part of the technicalassistance.

3.23 The Undersecretariatof Administrationand Financewould coordinate the organization managementstudy. Once the results of the study have been discussed with the Bankand agreementhas been reached as to whichrecommendations would be implemented under the project, the Minister and his Undersecretarieswould take the leadership in implementingthose recommendationsand all administrativeunits would followwith their respectiveactions.

3.24 The Undersecretariatof Transport through the Directorate of Land Transport would establish the NationalVehicle Registry and through the Planning Office (OPIT), which currently reports to it, carry out the Asuncion Transport Master Plan.

3.25 A task force would be formed with DH and DVR personnel to manage and participatein monitoringthe Unpaved-RoadStabilization Program. The task force would receiveengineering technical assistance from foreign consultantswith previousexperience in sulphonated-oilroad stabilizationand would be trained on the job on how to use and follow up the performanceof the oil.

3.26 The Undersecretaryof Public Works throughthe Directorateof Highwayswould provide overallcoordination and would be responsiblefor reportingrequirements including preparationof quarterly reports for the Bank, and wouldtake the lead in organizing yearly progress review meetings.

3.27 The civil works have been arranged by MOPC to be done by contractorsin 48 monthsor less and the proposedproject has been scheduledto be completedin five years (1994-1998). This schedule is technicallyacceptable although it departs from the Bank's - 27 - standarddisbursement profile for projects in Paraguay whichshows the average disbursement period for all Bank projects in the country to be eight years. The standard profile, however, does not reflect recent experience,does not includehighway projects, and does not reflect recent improvementsat MOPC. Timing the project within the proposed schedule is technically feasible and at negotiationsthe governmentagreed to adhere to the financial implementationschedule in Table 3.3 and the physical schedule in Table 3.4.

H. Procurement

3.28 All contracts for road improvementand road rehabilitationwould be procured through international competitive bidding (ICB) among prequalified bidders. Local competitivebidding (LCB), satisfactoryto the Bank, would be used to contract the short and scattered sectionson which the sulphonatedoil would be tried, and limited international bidding (LIB) would be used for the procurementof goods. ICB would amount to about US$72.8million equivalent, approximately99% of all civil works, LCB would be used for about US$1.2 million equivalent, 1% of civil works, and LIB would amount to about US$600,000.

3.29 There will be four ICB contracts. One worth about US$26.0 million for the Paraguarf - Ita section (worth about US$4.0 million) and the Ita - Guarambare - Ypane - iRemby- Cuatro Mojones section (worth aboutUS$22.0 million). Both sectionstogether form the south access to Asunci6nand packagingof the two into one contract would be allowed. A second contract worth about US$32.0 million for the constructionof the ringroad (Cuatro Mojones - Defensores del Chaco - Madame Lynch - to the junction with Rt.9). A third contract worth about US$7.5 million would cover the reconstructionand paving of the Limpio - Emboscadaroad, the northern access to Asunci6n. The fourth contract would be for the resurfacing of Rt.6 and it would be worth about US$7.5 million.

3.30 Up to five small contracts (about US$250,000each) may be necessary to carry out the pilot road-stabilizationprogram (Annex 3). They would be worth about US$1.2 million in aggregate and would be procured using LCB procedures.

3.31 The computers,software and installationcosts necessary to implementthe Nation- al Motor VehicleRegistry (about US$400,000),and specializedequipment for the roads laboratory (about US$200,000)would be procured on the basis of limited international bidding (LIB) invited among manufacturerswith local representationwho can therefore provide technical assistanceand maintenancefor the equipment.

3.32 All consultingservices, about US$10.4million would be procured in accordance with Bank guidelinesand procedures.

3.33 Issuing bid documents,assessing proposals and awarding contractswould be the responsibility of the respective executing departments within MOPC. However, the Comptroller Generalof the Nation (CGN), formerly a branch of the Ministryof Finance (MOF) and now an independentagency with ministerialrank that reports directly to the Senate, reviews all governmentbidding documents ex-ante and all bid evaluationsand contract award proposals ex-post. - 28 -

SUMMARYOF PROCUREMENTARRANGEMENT (US$ millions equivalent) ITEMS ICB LCB OTHER N.B.F. TO- TAL Civil Works Road Improvementsand 72.8 - 5.0 77.8 ResurfacingRt.6 (56.2) (0.0) (56.2) Road Stabilization - 1.2 - - 1.2 (0.8) (0.8)

Eguipment - - 0.61 - 0.6 (0.4) (0.4) ConsultingServices - - 10.4 - 10.4 (7.6) (7.6) TOTAL 72.8 1.2 11.0 5.0 90.0 (56.2) (0.8) (8.0) (0.0) (65.0)

Notes: I/ L.I.B. = Limited InternationalBidding N.B.F. = Not bank Financed Figures in parenthesis are the amounts financedby the Bank Loan

3.34 Paraguayantendering procedures are governed by a 1909law, frequentlymodi- fied but not codified. The law, by now, contains a number of provisions incompatible with Bank guidelines and procedures, particularlyfor ICB. CGN and the MOF agree that for Bankprocedures to prevail, specificreference to all the differencesbetween Bank and Paraguayanprocedures has to be made in the loan agreement. Annex 10 lists those differencesand indicateswhat specificprovisions should be included in the loan documents.

3.35 The use of the Bank's StandardBidding Documents for the procurementof civil works and of goods, the use of the standard prequalificationdocuments for contractors, and the standard form of contractfor consultants,was discussedand agreed with MOPC and ratified at negotiations.

3.36 Prior review and the Bank's no-objectionwill be required for all bidding documents and award proposalsfor civil works and goods contracts,whether procured under ICB, LCB or LIB rules, and for consultants. These arrangementswere confirmedat negotiations and would result in the prior review of almost 100% of Bank financed contracts.

I. Loan Disbursements

3.37 The Bank loan wouldbe disbursed against allocatedexpenditures as follows:

,CategoryI Civil Works 75% of expendituresin local currency or 100% of expenditures in foreign currency;

Category II ConsultingServices 100%; - 29 - Category III Equipment 85% of expenditures in local currency or 100% of expenditures in foreign currency.

The closingdate to draw reimbursementsfrom the Loan account will be June 30, 1999.

3.38 Bank loan funds are expected to be disbursed over a period of five-years (FY 1995- 1999). The schedule of estimated expecteddisbursements is in Table 3.5.

3.39 An aggregate amount of up to US$1.5 million has been included in the project costs to refinancethe project preparationfacility advance. It is for expendituresincurred on engineeringand technicalassistance services used in project preparation. Disburse- ment-related matters were discussed and agreed with the Government and would be confirmedat negotiations.

J. Disbursements, Special Account and Auditing

3.40 All disbursementsfrom the loan account would be made following fully docu- mented disbursement applications. To maintain an adequate flow of funds and pay eligible expenditures expeditiouslyand with a minimum of administrativedelay, the Governmentwould establish a SpecialAccount in the Central Bank of Paraguay, under terms and conditionssatisfactory to the Bank. The Bank would, at the Government's request deposit from the loan account into the Special Account, an aggregate amount equivalentto a maximum of US$3.0 million (the average quarterly estimated expenditures). Withdrawalsfrom the SpecialAccount would be made as needed and the Account would be replenishedby the Bank periodicallyat the request of the Government. Re- cords of the Special Accountdeposits and withdrawalswould be availablefor review by Bank supervisionmissions and would be audited annuallyby an independentauditor.

3.41 An independent external auditor, acceptable to the Bank, would, in a timely manner: (i) audit all expendituresincurred under the projectfor exactnessand efficiency, (ii) audit project records and accounts, and the Special Account, and (iii) certify that generally accepted accounting standards and practices, and accounting methods and procedures are consistentlyapplied, in a manner satisfactoryto the Bank. Annual Audit Reports shall be presented by the Borrower to the Bank no later than three months after the end of each calendar year.

K. Reporting Requirements, Consultation and Project Monitoring

3.42 The Director of Highways with the assistance of the Director OPIT and the Director of the Computing Center, would prepare quarterly progress reports for the Bank, to be submittedwithin one month of the conclusion of each quarter, providing informationon expendituresfor, and physical progress on the: (i) civil works, (ii) consulting services: engineeringservices, studies and technicalassistance and training, and (iii) equipmentpurchases. The reports would also provide estimatesof expectedexpen- ditures and progress for the forthcomingquarter.

3.43 The last quarterly report of every year, starting with the conclusionof FY 1993, which would be submittedwithin the first two months of the followingyear, would also contain:(i) the road maintenanceprogram as carried out in the fiscal year just concluded, (ii) the proposed maintenanceprogram (road by road, and task by task) for the coming year, includingthe lengths to be maintainedroad by road, (iii) an up-dated evaluationof - 30 - the conditionof the networkroad by road, and (iv) an updated comparative(year-to-year) accountof traffic volumes on each main road section as results from the traffic counting program.

3.44 In addition, MOPC would inform the Bank: (a) a month before the budget proposal for MOPC is submittedto Congress, of the contents of such proposal, item by item and project by project includingseparately the proposed maintenanceexpenditures; (b) within a month of Congress' approval of the budget, of the contents of MOPC's budget, item by item and project by project includingmaintenance; and (c) within a month of the conclusionof each fiscal year, starting with FY 1993, of MOPC's budgetary executionfor the fiscal year, item by item and project by project includingthe maintenance.

3.45 Formal meetingswould take place every year, withinthree monthsof the conclusion of the fiscal year, to review project progress. The meeting would review also progress achieved in: road maintenance,in carrying out the institutionaldevelopment objectivesof the project, executionof the technical assistancecomponent, executionof the socio-environmentalmitigation plan; and review the proposed annualproject and road maintenanceprogram for the upcoming year. The meeting would also review MOPC's overall budgetary executionthe precedingyear, and the prospectiveproject and maintenance budget for the current year includingtheir correspondencewith agreed targets. Tle meetingto be held not later than March 31, 1996, will be the Mid-term Review on the project. At this metingparticular attention will be paid to assessingprogress achieved in reaching the project's key objective of the strengtheningMOPC's organization and operational capacity. The reporting, review and consultationarrangements were confirmed at negotiations.

3.46 Based on the informationMOPC would systematicallycollect and report (as described above), the Bank would closely monitorthe followingproject related parameters:

- actual against expectedbudgetary allocations(Table 2.3); - actual versus expectedbudgetary appropriations(Table 2.5); - actual versus expectedproject costs (Table 3.2) - actual against the expectedimplementation schedule (Table 3.3); - the actual against the expecteddisbursement schedule (Table 3.4); - periodic (bi-annual)traffic counts on the road network; - actual versus expected economicrates of return of civil works subpro- jects; - actual versus expected targets dates for execution of the Management Study; - actual versus agreed target dates for implementing the Management Study's recommendations-, - increases in budgetaryexecution as a measure of progress in reachingthe project's principal objective of strengtheningMOPC's organizationand capacity.

L. Socio-Environmental Impact

3.47 Improvementand rehabilitationof existingroads in alreadydeveloped corridors, has normally no major socio-environmentalimpact. However, because the project includes reconstructionand enlargementto 4-lanesof Asuncidn's ringroad, includingthree major overpasses at crossroads, and a considerableimprovement of the souther access - 31 - to the city, a special effort was made to assess the social and environmentalimpacts of the project works, and devisemitigatory measures to minimizethat impact. The ringroad in particular, was likely to create a considerable'barrier effect' on neighboringresiden- tial areas, and the designs were carefully adapted to avoid this and many other socio- environmentalproblems. As much as possible, the design was also made aesthetically pleasing and unintrusive to the surroundinglandscape.

3.48 Financed by the PPF advance (para. 3.13 above), and under terms of reference satisfactoryto the Bank, a full socio-environmentalimpact assessmentstudy was carried out. The studyincluded: (i) identificationof the positiveand negative impactson physical, bio-ecologicand socio-economic-culturalconditions of the area, (ii) identificationof standard environmentalprotection measures, and additionalproject specific measures that would be necessaryto preserve and/or improvethe above conditions,including avoidance of the barrier effect of the ringroad, provision of over- and under-passes, bicycleways, bus-stop bays, sheltered waiting areas for commuters, parking, landscapingetc., (iii) identificationof all properties affected by the project, (iv) carrying out a headcountof people affected, (v) a socioeconomicsurvey of the populationin the affectedproperties, (vi) identificationof the land tenure situationfor each property affected, (vii) the valua- tion of plots, buildingsand constructionson them, (viii) identificationof the legal framework applicableto the acquisitionof lands, buildingsand constructions,(ix) identification of the agenciesand organizationsresponsible for carrying out the provisionsof the local legislationon land and property acquisitionsand their capacity to implementthe necessary actions, (x) identificationof the affectees' preferred governmentalaction: whether just compensation,government organized relocation to alternativeplots and houses, or any other type of action preferences, (xi) developmentof detailed mitigatoryand socio- environmentalprotection plans and programs, and (xii) development of a community informationand participationprogram.

3.49 The report, a summaryof which is in Annex 11, assessed, for each road section in the project, the physical, bio-ecologicand socio-culturalconditions as they currently are, and as they would be after the project is done. This allowedto identifythe positive and negative impacts of 10 project effects, on 36 socio-environmentalvariables. The impacts were ranked from highly negative (-5) to highly positive (+5), where zero reflects no impact. A weighted incrementalimpact of the project on each road section was estimated,and a plan of mitigatorymeasures to neutralizenegative impacts was then devised.

3.50 The overall incrementalenvironmental impact, section by section, ranged from moderately positive (Limpio - Emboscadasection) to slightly negative (Itt - Ytorord section) with most impactsbeing slightlypositive (Paraguar!- Ita and Cuatro Mojones - Rt.9 sections)or neutral (Ytoror6 - Remby and Remby - Cuatro Mojonessections). The plan of mitigatorymeasures that allows arriving at this situations includesfour specific programs which would be implementedconcurrent with the project: (1) a program to protectnatural resources, (2) a program to protect historic properties and cultural assets, (3) a signallingand public safety program, (4) a pollutioncontrol program for the project area, and (5) a compensationand relocation program. In addition, as a result of the study, a number of recommendationsto improve the aesthetic impact of the proposed works were made and incorporatedinto the design drawings.

3.51 The program to protect natural resourceswould be enforcedby the Environmen- tal Unit of the Ministry and would include (a) ensuring that contractors adhere to the General TechnicalEnvironmental Specifications currently in force in Paraguay including additionalrequirements defined for this particularproject, both of which would be made - 32 - part of the specific conditionsof contracts for the civil works; and (b) a reforestation program which includesdetailed reforestationstandards to be used along the right of way and on the median. The reforestation would be carried out in collaborationwith the municipalitiesalong the road sections.

3.52 There are three historic places to be preserved along the roads in the project: the Ytoror6 Park, the grounds and the church at Yaguar6n, and the historic center and church of Emboscada. The EnvironmentalUnit of the Ministry would consult with an archeologist,and under a special agreementbetween MOPC and the Ministry of Educa- tion, the Directorate of Cultural Assets would become involved in ensuring that the preservationis properly done. Moreover, an archeologistwould be asked to assess the historic and/or cultural value of any property that needs to be demolishedas a result of the project and appropriatemeasures wouldbe taken to preserve or relocate the site if it is found to be of historicvalue.

3.53 The signallingand public safety program would entail enacting regulationsand enforcing measures to protect the public from the effects of the constructionof major arteries in Asunci6n and in the rural areas along the southern access. The program includes the provision of public transport stations as opposed to free bus stops along roads and streets, educationby means of audio-visualprograms for pedestrians, cyclists and drivers to be run by schools and other community organizations, regulating the installationof vendor stalls both along the city streets and along the open highway. The program would be carried out as a cooperativeventure between the Ministry of Works and the Municipalitiesin the project area.

3.54 The pollutioncontrol program wouldentail empoweringthe highwaypolice also to control and enforce exhaustand noise standards.

3.55 The relocation program in the mitigatorymeasures plan (para. 3.50) is designed to deal with the people affected, it includes compensationfor losses and help, if necessary, to find alternativehousing. The project would affect a total of 471 properties in various degrees: from very slightly, where the occupants would not have to leave the property, to considerably,where owners would lose the full property. Currently, there are 471 families on the properties: 299 owners, 105 leaseholdersand 67 occupants, a total of about 1,833 people. Not all 471 familieswill have to be resettled, most will not be displacedas only small portions of the land they are on will be acquired. However, some would have to leave, and some will use the occasion to move voluntarily. The heads of all families on the plots, and a few absentee owners (18) were interviewed during the course of the socio-environmentalsurvey. All except 23 familyheads antici- pate to negotiatesuccessfully with MOPCa just and equitablecompensation for whatever is being acquired from them, and deal with their situation on themselves. The 23 who did not anticipateto negotiate and settle amicably with MOPC (4 along the southern access to Asuncidnand 19 along the ringroad)would, presumably, litigate the purchase of their land, and would force MOPC to use standardjudicial expropriationprocedures.

3.56 The establishedlegal, regulatoryand administrativeframework to carry out land acquisitions,and, if necessary, to expropriatelands, is summarized in Annex 11 in the form of a legal-administrativeflow-chart of activities. The process includes ample opportunity for administrative and judicial appeals, the appointment of independent appraisersif no agreementcan be reached on price, and the judicial adjudicationof dis- putes. Regardlessof whether or not amicablesettlements are reached with the current owners, leaseholders,and occupiers of the plots, a law has to be passed by Congress declaring the lands along the roads in the project a 'public necessity." This is essential - 33 - for MOPC to obtain the necessary funds to carry out the acquisitions,and to enable the legal-administrativeprocess to proceed. It wouldbe a conditionof loan effectivenessthat Congressenacts this law.

3.57 Moreover, as is variouslyrecommended in the socio-environmentalimpact assessment study, land acquisitionshould take place promptlyand swiftlyto prevent an escala- tion of anxietiesand uncertaintiescaused by the acquisitionprocess. To ensure prompt- ness, it would be a conditionof disbursementagainst expendituresfor the civil works and their correspondingsupervision, that all lands necessary to carry out the project shall have been acquired,and that all people in those lands shall have been resettled according to the ResettlementProgram submittedby the governmentand accepted by the Bank.

3.58 As part of the relocationprogram (para.3.50), MOPC has agreed to establish a specialdesk for affecteesand their communityorganizations. The desk will provide: (a) informationabout the developmentof the project, current and future constructionactivi- ties, timetables,etc.; (b) help in identifyingavailable options to seek relief, before the land acquisitionprocess, and during and after the constructionworks; (c) help owners and dwellers in getting their compensationpayments quickly and expeditiously;(d) help affected families find alternative housing either in the market or through the National HousingCorporation (CONAVI);and (e) help affectees, who so prefer, process applications for alternativehousing with CONAVI.

3.59 A similar assistancedesk wouldbe establishedat CONAVI. A specialagreement between the Ministryand CONAVIwould ensure the establishmentof the desk. It would be a conditionof loan effectivenessthat the special agreementhas been signed.

3.60 The Environment Unit of MOPC-would follow up the implementationof the mitigationplan and each of the programs mentioned.

3.61 DH's technicalconstruction specifications have been reviewed and provide adequate socio-environmentalprotection. MOPChas enactedbasic, but detailed norms for the medical attentionof workers at road constructionsites, and there are generalenviron- mental requirementswith respect to: the operation of quarries, the use of borrow pits, the disposal of materials, the installationof asphalt plants, mitigatingthe effect of the constructionon erosionof side slopes and sedimentationof water courses, and mitigating the effect on water, air (dust and fumes) and noise pollution. Conformancewith these regulationsis routinelymonitored by MOPC's environmentalunit.

3.62 The project is also being used to help to prevent future flooding of the areas along the Mme. Lynch section of the ringroad. The floods are mostly the consequence of a lack of proper drainage and flood control canals. Provision has been made in the project, at a cost of about US$5.8 million, for the reconstructionof the canal along the Mme. Lynch section of the ringroad, and for the improvementof the heads of the Ytaf and Lambare creeks which are the natural drainage of the area. - 34 -

4. ECONOMIC JUSTIFICATION

A. Economic Analysis

4.1 Economicreturns were estimatedfor the four road improvementcomponents of the project. The streams of economiccost and benefits of not doing the improvements (base case, ALT 0) were compared with those of carrying them out (the with project case, ALT 1). Both options were modelled by consultants: SAE-CONTEC(Argenti- neanlParaguayan)for Paraguarf - ItA- Ypane - Nemby to Cuatro Mojones, and for the Limpio - Emboscadaroad; and FORAGRO-PARELC(Paraguayan) for Cuatro Mojones- Defensores del Chaco -Mme. Lynch -to the junction with Rt.9. Both consultantsused the highway design and maintenancemodel (HDM) developedby the Bank, to simulate the pattern of evolutionof costs and benefits. The analysis was done for an investment life of 20 years, improved maintenancepolicies over current practices were assumed. The economicfeasibility studies as well as the technicalstudies were placed in the Project File (Annex 11).

4.2 The techno-economicstudies for the rehabilitationof Rt.6 (from its junction with Rt.7 to km 100) are still to be done; similarly, no economicanalysis was done for the pilot unpaved-roadstabilization program, or the institutionalstrengthening component. However, because the rehabilitationinvolves comparativelylow cost works and traffic levels on the road are high, the rate of return for the works is expectedto be acceptable. If use of the sulphonated oil proves workable, the stabilizationprogram may produce significantbenefits in the future. The institutionalstrengthening component may produce substantialbenefits, if sustained.

4.3 The consultant's analysisof the improvementworks was done in constant 1992 guaranies. The analysiscompared the economiccosts of the roadworkswith benefits on accountof (i) savings in vehicle operatingcosts (voc); (ii) savings in crew and passenger time'3; and, (iii) where applicable,reductions in accident costs. Vehicle operating cost savings for generatedtraffic were computedon all sections except Limpio - Emboscada wherethe works are not expectedto generatenew traffic. Generatedtraffic savingswere computedat 50% of the value of savings to existing traffic.

4.4 , Current traffic volumeson the roads were measuredby the consultants,they also did origin-destinationsurveys; these measurementswere adjustedfor seasonalvariations. Seasonalvariations were estimated from historic counts at locations on the sections, or on representative,similar sections elsewhereon the network. Traffic growth rates were based on estimatesof annual growth of GDP and traffic growth elasticitieswith respect to GDP growth. GDP growth was assumed to be in the range of 4.0% - 5.5% p.a.

1/ SAE-CONTECused the followingvalues of time: for time saved during business or working hours Gl.2, 100 (about US$1.75) per rider/hour for car riders, and Gl.322 (about US$0.27)per rider/hour for bus riders; for time savedduring non- businessor working hours G/.629 (about US$0.52)per rider/hour for car riders, and G/.97 (about US$0.08) per rider/hour for bus riders.

FORAGRO-PARELCused somewhat more conservative estimates: for time saved during businessor working hours G/.495 (about US$0.41)per rider/hour irrespectiveof wherethey rode; and for time savedduring non-businessor working hours G/. 150 (about US$0.13)per rider/hour. - 35 - depending on the road section. Traffic elasticitiesto GDP growth were 1.5 for light vehicles, 0.8 for buses, and 1.0 for trucks. Traffic diverted to the newly improved routes was estimatedfrom the origin destinationsurveys.

4.5 Investmentcosts were based on detailed engineeringcost estimates and include supervision,physical contingencies,and land acquisitioncosts where applicable,net of taxes, duties and other transfers. Vehicle operating costs were estimated by the con- sultantsbased on estimatesof operatingcost elementprices (fuel, oil, tires, vehicle costs, crew costs, etc.) net of taxes and transfers. A standardconversion factor of 0.8 was used to translate financial costs into economiccosts.

4.6 All componentsare economicallyjustified. The best estimate of the internal economicrate of return of each section in the improvementcomponent of the project is as follows:

Economicrates of return, road improvementcomponent

Road section Estimated ERR economiccosts (G/.bln.) (%)

Paraguarf - Ita 4.8 8.9

Ita - Cuatro Mojones 27.6 14.3

Cuatro Mojones - Rte 9 43.9 27.4

Limpio - Emboscada 9.2 10.8

4.7 The sensitivityof these best estimatesto variations in cost and/or benefits was tested and the results show that even in the worst case scenario (10% increase in costs and at the same time a 5% decrease in benefits) all road sections are still economically justified:

Sensitivityof the ERR

Costs + 10% + 10% -10% -10% Section Benefits unchgd -5% unchgd +5%

Paraguarf - Ita 8.6 8.4 9.3 9.5

Ita - Cuatro Mojones 12.6 11.7 16.4 17.6

Cuatro Mojones - Rt.9 25.8 24.9 29.2 30.0

Limpio - Emboscada 9.8 9.3 12.0 12.5 - 36 - 4.8 A more detailed summary of the economicanalysis is in Tables 4.1 to 4.9 and in the followingparagraphs.

4.9 Paraguarf- It This is the southernmostsection of the south access to Asuncidn (see Map IBRD 24199) and long-distancetraffic is joined along its length by commuter and urban traffic. Initially, the intention was to improve Rt.Mfrom Paraguarf to San Lorenzo, where it joins Rt.2, and from there on to the ringroad, a 50 km section of road altogether. Routes 1 (the road to the Southand Argentina)and 2 (the road to Ciudad del Este and Brazil) are the two highest traffic corridors in the country, and when they join at San Lorenzo traffic volumesare very high. San Lorenzo itself is not a city prepared to handle those volumes on its city streets, which is how it is done now. The section Paraguarf - San Lorenzo was divided into six links each of which was assessed separately. All links proved to have high economicrates of return except the southern extreme, Paraguarf to Ita, which had a marginally acceptablerate of return (8.9%) only if time savings are included. However, in an urban/suburbansituation as alongthe project, time savings are of the essence. The higher return links: Ita - San Lorenzo, were then reviewed again in the context of a network alternative as described in paragraph 4.10 below.

4.10 The main benefit of improvingthe Paraguarf- Ita link is higher vehicle speeds; they are expectedto increase from 65 km/h to 80 km/h for trucks and buses, and from 70 km/h to 90 km/h for light vehicles. Provisionhas been made in the design to slow traffic down at the town of Yaguar6nwhere there is a historic church and where locals and visitors are likely to be about. Long sectionsof rumple-stripswill be built into the pavementto force traffic to slow down. The section was divided into two links both of which have considerablevolumes of traffic (Table 4.1), their average weightedERR is 8.9% (Table4.2).

4.11 ItA- 4 Moiones The economicreturn of this section were assessedin the context of a small network (see Map IBRD 24199). It starts at Ita and has two branches that connect back at Cuatro Mojones, one branch is the proposed new road section Ita - Ypane, and the improvement(widening to four lanes) of existingroads from Ypane to Cuatro Mojones; the other branch follows Rt. 1 to San Lorenzo, along Eusebio Ayala to the junction on the ringroad, and then along the ringroad to Cuatro Mojones. On this network the way traffic currently flows and the way it would flow with the project can be simulated(rable 4.3). The effect of the project on each link in the network can then be compared,with and without the project, and the total benefit of reducing congestion on one branch, while increasingtraffic on the other, can be assessed. The growth rates on existingtraffic along the route proposedto be improved(with less congestionthan the alternative)were estimatedto be 7.2% p.a. for light vehicles, 4.8% for buses and 5.5% for trucks. Traffic on Rt. 1 (the current route and consequentlyquite congested) was estimatedto grow at 4% p.a. for all vehicles (to accountfor the effect of the present and likely increasingfuture congestion).

4.12 The analysis showed that improvingRt. 1: Ita - San Lorenzo - Eusebio Ayala, yieldedhigh rates of return for individuallinks, and 21% on average. However, in view of the small differencein economicreturn between improvingItA - San Lorenzo and con- structing a new road from Ita to Ypan6 and widening the existing road from Ypan6 to Nembi to Cuatro Mojones as proposed in the project, 21% vs. 14.3% (Table 4.4), the governmentpreferred, and the Bank agreed, to proceed with the construction/improvement alternative. - 37 - 4.13 Cuatro Mojones - Rt.9 This is a section of Asuncidn's ringroad. For analysis purposes it was dividedinto six links from one major intersectionto the next. There are six major intersectionsalong the ringroad. Table 4.5 shows traffic volumes on each of the sections in selected years of the 20-year period analyzed; table 4.6 presents the summaryeconomic costs and benefitsfor the full section. This is the costliestcomponent of the project (aboutUS$38.5 million includingcontingencies and work supervision)and yields a robust 22.6% ERR excludingtime savings and 27.4% if time savings are included.

4.14 Works include the improvementof a storm drainage canal that currently runs alongside the Madame Lynch part of the ringroad which regularly overflows even with minor rains, floodingthe road and the surroundingarea. The storm drainage component associatedwith the proposed road improvementwas evaluated separately. Benefits for it were estimated to be the avoidanceof the effects of major floods every 1 1/2 year (a somewhatconservative assumption as major floods tend to occur a times a year). Bene- fits were twofold: property damage savings (900 houses at a G/.3.5 million, US$2,500, each), and savings from interferencewith traffic (a 5-km diversion for 30,000 vehicles is the alternative, though most often traffic simply comes to a standstill). The component's ERR is 22.4% (Table 4.7).

4.15 All six road intersectionswere assessed separately to compare the returns of improvingthem at-gradeas opposedto constructingviaducts. For three it was concluded that viaducts would be better than at-grade intersections.

4.16 Limpio-Emboscada The project is to pave the existingearth road. Benefits are mostly vehicle operating cost savings and some time savings. Table 4.8 shows the present and expectedtraffic flows and Table 4.9 the cost and benefits streams with and withoutthe value of time savings. The proposed work-swere assessed assumingthat the rest of the Route 3, from Emboscadato Tacuara is not built yet. The paving yields an economicreturn of about 10.8% includingtime value and 10.6% without.

B. Project Risks

4.17 MOPC's proposed investmentprogram for the next six years (1993-1998)entails a two- to three-fold increase in project and maintenancespending (Table 2.3). Project spending (includingthe proposed project) would grow from the average US$28 million invested in the last eight years to US$84 million, and maintenancespending from US$5 million average,to US$13million. These levels of spendingare considerablyhigherthan those MOPC has traditionallybeen able to carry out.

4.18 Under this scheme, MOPC intends to carry out the civil works of the proposed project in 48 months or less, while at the same time implementinganother six foreign- financedprojects: one with OECF (it includesthe purchase of large quantitiesof maintenance equipment and the resurfacing of paved roads throughoutthe country), four financed by IDB (Yby-Yau- Santa Rosa, Cuero Fresco - Concepcidn,both of which also include a collectionof resurfacings, and two rural road projects: one of which was just approved and signed), and an assortment of roadworks financed by FONPLATA. In addition, a considerableincrease in maintenancefunding is necessary as (i) the Bank would want to see a strong commitmentto improved maintenance, and (ii) an effort shouldbe made to use effectivelythe costly new maintenanceequipment purchased with OECF help. Further, MOPC plans to carry out a substantialprogram of investments financed with local resources and is seeking additional foreign financing (particularly from IDB) for another collectionof new projects. - 38 - 4.19 These large increases in investmentsare being sought at a time when Paraguay's public finances appear tight, and the Ministry of Finance, however willing, may find itself hard pressed to decide where to take the resources from. Hence, the proposed project needs strong protection against short counterpart funding. It would be cove- nanted, therefore, that no less than the following counterpartbudgetary appropriations would be made each year for purposes of carrying out the project and for maintenance expenditures,all measured in equivalent 1992 Guaranies:

YEARLY MANTEBNANCEAND WORLD BANK PROJECr APPROPRIATIONS _tn miflions of 1994 guaranies)

1994 1995 1996 1997 1998 199 Malioenance 19.600 26,000 26,000 26,000 26,000 26,000 WB Project 9,200 9,500 9,000 9,000 3,000 TOTAL 28,300.00 35,500.00 35,000.00 35,000.00 34,000.00 26,000.00

(1994 USS) 14.40 17.75 17.50 17.50 17.00 13.00

4.20 The Bank would monitorstrict adherenceto these spendinglevels, and provision would be made for yearly meetingsto take place within three months of the conclusion of a fiscal year, to review the previousfiscal year's budgetary executionand the budgetary allocationsfor the next fiscal year. The review meetings would start in 1994, at which time the budgetary execution for FY1993 and the budgetary allocations for FY1994 would be reviewed. Reporting requirementswould be covenantedso that the Bank is providedpromptly the budgetaryexecution and allocationinformation to monitor effectivelythe above figures. Should these spending levels not materialize the Bank would have the right to suspend disbursementsand eventuallycancel part, or the totality of the loan.

4.21 Finally, the burden of managingthe proposed volume of works, would be strain- ing enoughfor any large, well managedorganization; MOPC is small and not particularly well managed. To minimizeimplementation risks an intensivesupervision effort is planned (Table 3.3). Supervisionmissions will closely follow project performanceand monitorthe parameters mentionedin paragraph 3.46. - 39 -

S. AGREEMENTS AND RECOMMENDATION

5.1 At negotiationsthe followingagreements were reached with the Government:

(a) that before the Loan Agreement becomes effective a special law will have been passed allowingthe governmentto acquirethe lands necessary to carry out the civil works, and that a special agreementwill have been signedbetween MOPC and the NationalHousing Corporation (CONAVI) for purposesof assistingaffectees of the land acquisitionprocess (paras. 3.56 and 3.59);

(b) that a managementstudy of MOPC will be carried out before June 30, 1995, that the consultant'srecommendations will be discussed with the Bank within three monthsof the conclusionof the study and that recommendationsagreed to be carried out under the loan will be implemented by December31, 1995 (para. 2.20);

(c) that not less than the followingbudgetary appropriations will be made to MOPC each year: (i) for counterpartfunding the civil works investments includedin the project, and (ii) for fundingthe maintenanceof the highway network, all measured in constant 1994 Guaranies (para. 2.31):

YEARLYbMNTElNANCE ANID WORLD EUNK PROJEC APPROPRIATIONS ______Cnmillions of 1994 guaranics) 1994 1995 1996 1997 1998 1999

Maintance| 19,600 26,000 26,000 26,000 26,000 26,000

WNBProject 9,200 9,500 9,000 9,000 3,000

TOTAL 28,800.00 35,500.00 35,000.00 35,000.00 34,000.00 26,000.00 (1994US$) 14.40 17.75 17.50 17.50 17.00 13.00

(d) that, in addition to quarterlyprogress reports (to be submittedwithin a monthof the end of each respectivequarter, para. 3.42) of which the last for each fiscal year (which would be submitted within the first two month of the followingyear, para.3.43) would containinformation on (i) the maintenanceprogram carried out during the year just concluded,(ii) the proposed maintenanceprogram for the coming year, (iii) the condition of the network, and (iv) comparativetraffic volumes on the road network; reporting requirements will include MOPC informing the Bank: (1) a month before the budget proposal for MOPC is submittedto Congress, of the contents of such proposal, item by item and project by project includingthe maintenance;(2) within a month of Congress' approval of the budget, of the contents of MOPC's approvedbudget, item by item and project by project includingmaintenance; and, (3) within a month of the conclusionof the fiscal year, starting with FY 1993, of MOPC's budgetary executionfor the fiscal year just concluded,item by item and constructionand maintenanceproject by constructionand maintenance project (paras. 2.32 and 3.44); -40 -

(e) that formal meetings will take place yearly, within three months of the conclusionof each fiscal year, starting in 1994, for the purpose of dis- cussingproject progress, overallbudgetary execution the precedingyear, and the prospectiveproject and maintenancebudget for the current year, includingtheir correspondencewith the agreed targets (above), progress achieved in road maintenance,in carrying out the institutionaldevelopment and technicalassistance components, and of the socio-environmental mitigatoryplans (paras. 2.32 and 3.45); and that the meeting to be held not later than March 31, 1996 will be labeled the Mid-term Review of the projectand, in additionto the above items, would focus on assessing progress in achieving the project's key objective of strengthening MOPC's organizationaland operational capacity (para 3.45);

(f) that the project will be implementedaccording to the schedule in Table 3.4 and that the arrangementsto manageproject implementationwill be as described in paras. 3.22 to 3.27;

(g) that the Bank's standard biddingdocuments for works, standardprequa- lificationdocuments for contractors, and standard form of contract for consultantswill be used for purposes of carrying out the project; and that the inclusionof a descriptionof the differencesbetween Bank procedures and Paraguayanlaw in the Loan Agreementwill cause Bank procedures to prevail (paras. 3.34 and 3.35, and Annex 10);

(h) that prior review, and the Bank's no-objectionwill be required for all procurementdocuments to contract civil works, goods and or consulting services (para. 3.36);

(i) that before the Bank disburses any funds from the loan account for the civil works and their supervision,all lands necessaryto be acquired for purposes of carrying out those civil works will have ben acquired or expropriated; and that all people living in the area where the works will be carried out will have been resettled in accordance with the resettle- ment programpresented by the governmentas part of the Socio-Environ- mental EvaluationStudy (para. 3.56 and 3.57).

5.2 Subject to the above conditionsand assurances,the proposed project would be suitable for a Bank loan of US$65.0 million equivalent, repayable in twenty years, including five years of grace, amortized on an annuity basis at the Bank's standard variable interest rate.

sar.mst November 24, 1993 PUBLIC SECTOR DNV/ESTENTS IN TRANSPORT

(nilion Guaranie)

1985 1986 1987 1988 1989 1990

Roads 7,577 9,489 14,800 10,280 17,204 23,091

RiverFbP&Ut 936 694 470 499 400 1,010

Air 140 - a 5 - -

Rai IS0 137 207 176 79 210

TOTAL 8,803.00 10,320.00 15,415.00 10,960.00 17,683.00 24,311.00

US$m 28.7 30.4 2S.2 19.9 16.8 19.8

% of GNP 0.7 0.6 0.6 0.4 0.4 0.4

% of GN 3.4 3.0 3.1 1.8 2.2 2.0

S of F1 10.0 8.0 6.5 4.7 10.0 n.a.

Sourc: Mbision egimates

Match 1993

-I EXPECrED PUBLIC SECTOR INVESTMENTS IN TRANSPORT

(by source of funacing, milLion 1992 Guaranies)

1993 1994 1995

Loc Ext Tot Loc Et Toul Loc Ext Total

Roads 36,395 79,395 116,252 47,650 91,648 139,298 37,413 116,651 154,064

River/Ports 11,926 - 11,926 ------

Air 13,176 52,706 65,882 - - - -

Rail 3,036 - 3,036 3,838 - 3,838 4,865 - 4,865

TOTAL 64,533 132,101 197,096 51,488 91,648 143,136 42,278 116,651 158,929

USSm 44.5 91.1 135.6 35.5 63.2 98.7 29.2 80.4 109.6

1996 1997 1998

Roads 35,763 94,142 129,905 28,465 77,882 106,347 22,950 63,594 86,544

River/Ports ------

Air - -

Rail 6,183 - 6,183 ------

TOTAL 41,946 94,142 136,088 28,465 77,882 106,347 22,950 63,594 86,544

USSm 28.9 64.9 93.8 19.6 53.7 73.3 15.8 43.9 59.7

Source: Mision Estimates bsed on MOPC Planning Office forecasts

Match 1993

0- -43 -

TABLE 1.3

FORTSTRPI (Tons, 1990)

ORTI lM Is Cbotu Total

River Po

Asuncidn 187,463 212,593 15,148 415,204 Villct 12,725 tS4,622 236,1U4 403,531 Concepci6n - 294,339 16,742 311,081 Pibar 277 - - 277 Other Port 7.490 64.543 - 72.033

207,955 726,097 268,074 1,202,126

Dry Porf

Ciudad del Ease 215,971 169,760 - 1,085,731 Encamaci6a 47,579 407,466 - 455,045 Pedro J. Caballero 2,948 77,024 - 79,972 Salto del Guairi -A 122.9 - 126.958 270,522 1,477,14 - 1,747,706

Private Pos 576 4430 - 1.019.542

1,054,949 2,646,351 268,074 3,969,374

Source: MOPC, Planning Office

July 1992 - 44 -

Table 1.4

SHIPPING FLEET (1990)

Type of Veuel State-owned Fleet Private Fleet Total

I Capacity (tons) I Capacity I Capacity (tons) (tons)

Solid cargo barge 30 22,500 121 129,936 151 152,436

Liquid cargo barge 4 6,900 16 34,600 20 41,500

Other barges 5 2,800 19 6,448 24 9,248

Frteezerbarges 1 350 - - 1 350

Motor vesel 17 23,926 12 7,941 29 31,867

Tanker. 2 3,210 2 670 4 3,880

Tugs 6 - 19 - 25 -

TOTAL 65 59,686 189 179,595 254 239,281

Source: MOPC, Pbtaning Office (OPrl) ANNP

July, 1992 - 45 -

Table 2.1

NATIONALHIGHWAY NETWORK' (kun, 1991)

Tmnk Roads CollectorRoads LocalRoads TOTAL

Paved 1,89 700 40 22,629 Gravele 2U4 233 - $17

Earth 1,654 14,313 9,232 25,199 TOTAL 3,827 15,246 9,272 2S,345

I/ Roadsunder tbe renponsility of MOPC

Source:MOPC, Directoate Generl of Highways July 1992 rMUW1Y Olr PUBC MWo AM C3NMOCAT9O*U KD=gTARrY IZCULWO ty VS __t _ now CWEN__" 00" cm cw Oodon C6 ." C4"IC.Ir-

mm4 99.2 | 364 2.0 l0J. 3.7 557.3 19.2,X57.2 31.91 523.9 5.4 32,159.7 31,4X64 1,.1 35 659.3

~ :^147.3 44 6744 1.7 102.9 235.3 17.9 417.1 Ii. 379.2 54.9

h f 10.fl 14.2 17.1 212 27 445 0.2 47e9 9.1 667.9 3.2 M2. 30.3 213.7 Ye.e

o f3. OoW. 44.7 47. se 53.7 5.5 550e 59.1 13.2 40.7 240.2 115.2 2244.2 U2.2 1,90.1 574.2 73A.6 ,045#4A N.7

/ _T_ Tqm 9.2 45.2 4.3 Ie 56.6 5.0 66.0 104.3 21.6

hk Vm 532 J MA 77.1 97.3 3.5 216.4 21.2 3524 1.6 574.2 737 0.2 774

D I. Via I6.6 3.2 27. 9.1 23.4 5.2 24.2 3.2 23.6 21 43.7 I2 37.7 6.2 231.2 2.2 439.2 14.2

cU. hm an," 2.3 74 9.2 3.0 27.1 24.4 52.0 77.9 2.

U!. ro=m e 2 . Im. 1.5 24.4 60.9 39.5 223.2 4.3

U. FWd Vo 262 3. 13.5 SlA

A: T. V 41J4

L 4Tp_ 23.7 D.l 24I4 3 37.0 23.7 == 121.1 12 237.6 36.2

CAk. fLJL Too 563 553 1739 335.5 211.2 44. 217.7 14.9

StO&d._ Tl - _ 294.0 13.4 473.1 56.6 1,00. 42.5 967.0 251.6

D C atL Tao _ 2593 7.2 521.7 205.1 319.2 1412 355.6 450J

i. Tp T _n 2.O0 7.7 19.3 2.2 346 0.4 89.7 1.1 295.6 32.5 46M4 205 556.1 31.3 631.7 0.2

Cwh 43.4 55.9 72.1 114 37. 12.2 6.6 31.7

WeAdIA & Flh

23k .i Ero-.m 218.2 16J 271.2 21.3

2k. F _ 23D.0 0.9 22 .9 2.0 372. 76.4 2,47.2 265.6

i m. y _& _m 354.7 5.0 76 5.1 I I097.4 314.0 1,4M6.4 295.2

i.Cm_ _ = 67.1 1.3 106.1 2.9 163.6 5. 198.3 1.3

Dk.I.NIh - -_- - - - - 56.2 .66A 1373 256.2 19_ 2916 4C.0 -'~~~~~~~~~~~whf~ i f PmUC weU AI COMMIIIATOI - DIDGTAM ECUnO ______ly .tofnpmAkla, M_7 Gon "___

owt Oqid G. Ggbd ck w O C-." cod -.. t O.d C." .0 do C." 0.- Qumd am* *Oa

:&mg IIA 0.3 3.9 112A4 7s e I.I 41.2

fows. UJ13A MA J44 17.3 I. S5 D . .2 143 3755.37 125 3' 3227.7 25.4 4a 95.7

F -- &.7 93 3I 12.1 16.1 4.2' 2. 7.1 177J 4 19.5 21.1

t?" . 7.4 = 99 = 7 =.s = .9 = 2.9 250 43.71 52.4 1.2

373 1.9 39 30. 739 69.3

Dlr.h_ 32 293.7 1154 264A 121.5 36.1 1549 155.2 214.4 161 I'13.3399 IA9 1914-5 15.2 142 164.2

foodi 30._, , 3NJ3 5319 36.3 572.3 51.1 745.3 5.1 1a.l 35W01 MA _33 tOJ_ 1.9 mu.0 4.717

DobiiJC-P/ ______= = 2199 42.1 474 33.4

t A1.2 1 7 _14 4363 ,495 341212. m__ 1 9 3 42A*.7 34",2 17*9.9 39.1.1

7A 212.1 16A 214.91 34A 435.4 2431 1.132*| 1.7 2,47.1 39AI 36.71 99 54542| 27 436 945 7.35*

2.767.7 4I474

_* 3.40= 7I3.9 1 .1* 959 2990* 33.7 2.xxe| .159A 317A

Cm_hm vo_,"n ======| | ,119 73* ILAi 1| I9A 33*| 20.2 6a9

Xtsl 446 9364 123. 173. 20* 2443 113 3439 2143 1953

147.2 35 1.7 23.9

_=.1 43 33 42.3 174.3 43.9 27. 7. 5-5 39. tl,. 27.5 4.4 669.2

R&c__m 1.2 2MA* 6.2 2.2_ 3 I5

3I3 OA 4 . 141i.4 3* 0lB 55* 4033 L31 SW MJ 93 2I mu4

6.9 94* 299._w4 31 3|.3

d.2 31.1 =__ _ 3- . aI - - ~ -5 , f|mi|n|-| v6do"~ ~ ~ ~ ~ t* 21.7 21.2 38.7 27.1 S34m 36.A CA. 27* OA4 353, 94.A MA US 353* 54.

3791.423* 93.7 2,39* W~ 3.3193 131A* W4271. 7 7192- 3

T_t_- .a - -= -53.2 -'14* 2.3*X- 315 *9-4" 3r - .2 -J -Su - MDWThY OCE MUUCW6AM 610 04Wg4CATI0U.DLUGKrAY E3CUmON

~~~~______e _ __ e p d b % ~ G . u ______

__- Y _ 44* 3353 10633II 131.7II5m3

4 .u_b . Few 4.2 ll. 3* 2.7J5 33.3 I35.1 397* 3,l353

Rai YhpYm.NCbo 1,137* 2,172.06

- W _ ZwIw2343 IM5A.4 313.2 339.4 m9.9 5,447.

.,______1_ 37.7 75A.4

3*,03 227A 3,470.4 246. I0.1 2,45. 139.4

h N a m _2=33_ I34.3 3,56.1 79.2 3,724.6

pb_ 54.4 3*A I

VM.A. - R.A IO99 3=.3 430.4 Ka 3,IS3 33.3 11010. 7 543.7 3,33.1 343.4 2A .J = 540S _

AndJ -"__ p I _ _ ======2 4.239J _ 4.430A

11 T _ 17A3 35. 4D 29.41

Ib9f - .*3A) 19.4 40D _

E Tk.9T T_il 590* 309.7 1643 03.1 ISla 3,,10.9

-- *-F. 3_6.6 94* 3.5 147.2 273. 4G1.2 435.5 347* 13,464.2 39.1 . 1,10.2 |

17.4 23.1 _ _

3A.4 77.5 5.3 49._

A F il_ = _ 53* 3,523 1,2133 3.=.7

A re B ou_ P _m 10*0 1044 412J _ 36* 64.5

AmNv I._ _ 72.7 3=6

aid" bmdm45Ji_ 49.2 6596 66.6 =

I A_, d_ 179 212* 266.5 _ 30A 360*0 3214 349.=

Pb Aagig9l 3.4 15.2 _5.3

Ala.. Ossin 26.9 24.7 134.2 206.4 5$1A 4J 74.4

Am APis. Sb_ 3.1 43.7 3A 0.6

Am E=E ======96=- 999J 123.9 3,447.1 57* 36.425. 65* 66,34.9

_j.U P- Aawvh 5.4 10.5 15.3

U4 _ - ha _s 1343.4

4 M*m - _.W9 129.2 MlINISRlY Of rURLIC WORIS AND COMMUlNMCATIONS- BUDGrTARY *X8CtON

(by Iy o exprnOtw. mdU6l. Giarmah)_ _ _ _ _

im =16 167 196 1s" 199 1 1992 193

b~~~~~~~~~~o 3ja.6 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~262.7

eRuaii OBCF 19.5 2.11

SL3TOTAL 2K.1 7,372J 31.7 9,197.6 10.6 13,77J 7724 9,37.1 1,6. 16,15 1,2. 21 6.7 1,6.7 40,31.1 S,310 31,414.A 9J34 15645.0

HIGHWAY MAINTEKANC 371.4 676.0 514.1 6l1.0 564.6 1097.6n 7I1 1,401.1 4.0 3,8 2.7 344. 3 .1 7912.1 9,579. 5.62.1

SUBTOTAL 371A. 670 514.1 SO 34.6 1 ,6 7. J 313 1 .1 3 . 72.2 41333 4,1Q. . 3,299.1 7,912. 953 S,

oEu1bie T_ 16.41 2.5 19.6 30.0 37.6 262 411 116.7 135.2 12.2 199.7 104

FeiCmu A Ldpi 420.0 _ 514A 673A0 764.0 1,182.1 ,5763 3,2553 2,941.5 9311 5,678.9

Umoa M ee 5.0 5.5 5.7 0.5 655 D.2 5.0 16.3 0.9 35.9 1.4 167.8 129.0

F1 o _ert 6,144.4 2961 13S1.0 124.2

E_ N_Lim del FAN_ 12.6 21.5

UtElOAL 44A 2 539J to 7G.7 es 31 0o 67.7 6.0 1,04.9 16.4I.&A3,67. 353.9 1,144S| 366.7 8313

G RANDraAL NW ct-) _ ML Il7 as = . S-2,S4.1A10,7,4 S JI lgm 24ns.4 ;,J l2k"4J4 514. ^2f4|2

YEARLY GRAND TOTAL (C/rn) 10,406.6 12,975.2 11,341 1 5,734.9 32,365.9 41,0403 71,457.1 179,415.9 292,357.i

Us DQor E w Rift 306.70 33920 55M0 550-0 1,056.20 1,229.91 1,325.20 5I0.0SM 1,750.0

GRANDTOTAL_CM_ D_ 6.61 27.91 7Z1Z 31 S [ 2721 7Z21 2ZS1 III" 1Ii32 144 49i. 346r 83Jr 2.744

YEARLY GRAND TOTAL 1 |SL 33.9 3e.0 34.3 27.7 30.6 33.7 53.9 119.6 167J

(') Easms for fulf b bbsd in 1 ell.arn for fni ,m mmWa.

Noe: 1992Im 1993b. oepAD or3 if faeip deb.

S_mo: Buday EFaglm Ubdety of PudeoWorlm me Com tmi, UeLeoruat of F . Ex_b Row: hierneudoi b4o y Faud, _hsmo,rl F Da1 SLdiec

Ocwbe 1M3 INixrY OF PUKJC WO=C AND COMNUNIAT3s - BUDGErARY EXBCUnOi

INS195 6 1917 1919 19%9 1991 1991 1993( Ld| F. L Fql L |I F,W2!LIZF. 2 L I F, d |I Ai | Fp Lxl

L _5ed- W3 19.2 13.5 19.5 7.2 2I73911 I,693 L62,5.2 1,016.9 36,913.9

I S. JA -h I I I _ I I I | X5JI | 69.2 71.9 303.2 446 434.11

P1_f.TsA39Ir 142 17.1 21.3 2.7 4.7 479.6 671.1 232.4 463.71

1. y DV. Ob. PA, 91.7 MAI 1203 237.3 260.9 2,359.4 2,037. 1 3122 1,5.1I

T_ de T"& 49.3 49. 61.6 66 0 125.91

Obm Vhh 533 6.4 77.1 970 32.5 237.6 36. _ 1,311.9 907.7

|-so~ J~m VhjSS 19.7 = 2.522.9 27.4 34.6 50.2 93.9 133.3 513.3

I C hus_ 21 7.5 9.2 8.1 17.1 24.4 510 79.9

U. Too. ML Few. 1.0 1.9 33.1 321 41.1 121.6 42C

U. Caindl o do Vo= = = 2.5 42.3 51.4 =

IA . Tm. D.G.V. 41.5

Am. GOL doT _oip 23.7 20.1 24.4 235 I 37.0 18.7 = =.1 2M73

|Drf.CarL Sa& Ttoo _111.6 S60 255.7 232.6

SZOLT"Msko ~~~~~~~ ~~~~~~~~~~~~~307.41531.7 1,042. 1,2131

lDpw CtrL Tnmho ~~~~~ ~ ~~~726. ~ ~~~~~~~~~~266.4461.0 695.6

TpIW Te_ean 17.7 192 2F.2 34.9 9D1g 328.1 5740 5117.9 719.9

P|s& CM&= 4.A 55.9 = 3.6 9.1 100.21

[email protected]. F m ======4.9 M= 2=3.01

|Dit. F_~ _ _ .12D.9 230.9 94" 1.312J _

Mr. B_. y_ _amew =3.2 1,261.6 1,411.0 1,721.

JIDr. Com&,& _ _ 61.4 I09.0 16.7 30.1

5718 13.3 249 331.6 U0INWIlY OF FUIIJ WORKSAND coMMUNATONS* BUDGErARY EECUMON -yseso sadmadm. a,111mOCmans3 ______

985 31964 197 39 9 1919 1991 1992 19WI

La F1np L- Fep L Frps 14_ Pap LA FrPp L Fap LA Ffp -4 FPa LA Pap

IJm m & 1mmv 23.9 S3.9 jIt3 5323

D". Remo. Mbs. 66.6 33.7 23.6 23.5 14:3 93.2 139.4 2=3A = 5359

FPhak Fuadf. 6.7 93 - 4.1 - 12.1 - 3.30 33.5 2 42.6

Oqbs. 79.4.. 7A 9.4 73. 3l 3.91 47.9 04A 36= jUt.l =b ______- = - 3 9 39.2 = 4 =A143.2

Dhmdin bTw3m 376.9 390 417.6 309.2 375.9 1.A 1311A 1,02.7 1,7413

D1ined Sovid P3 4t.7 56t.1 A3.4 310.2 ,327.4 1,197. 2_ A, 2,181.9 4,710.7

33.p..m .MMt PARJIA" 313. Mgo.9

CooNm. LPi gsco 343.2

31J32r7rAL37 41.4 1.464 0 1,53.2 3.3 2,3 .4 3.6 3_-. 0. 9,03 3 12,3. 12. 7, 13.9 166".9 6.0 NUIHWAY 130J3C1

C,_J_bs. Dug.. y Rin| 219.7 254.3 455.0 | ,15.31 2,565. | 3,99313 5,755.7 496.92" 3,45 me_o" o de IaI II 989.2 3,274.9

. |N _I II 13,4 | 1,173.9 2,0954 2,333.7 2,063.0

[c-in . rC v._h. I91.0 33.8 3699i. 975.A 1944

w m,_ Dm3. 1 V3 553.31 69t 235.71 57.1 447.1 231 39.61 m1 T 1T IIT

| nR s bps 1.. 147.2 | 5.2 2t.6

C Fxml. E. Na. 69.1 132.5 216A. 321.4 567.6 73.3 76.I 315.5 555.0 27.3 5t.9 145.2

Rush. -_ CA. 2.5 24.3 6.2 110.7,

| s -.c|mp 39. | 57.6 399.2 1933 522|. 23.6 4465 4tt4 2,95t.7| 4379.5 337.3 424.9

C ; lus um 434.4 4.421*

l - Lb - Tm -m 0.9 94.0 2 374A 3.5 V.o1.. Depm. Ca 32.

I V T. 447 59.9 79.5. 979 ODA 129.7 191. 1 237

IamI . 2294m. M..l 33.0 72.21 1333

|D_ 2 ToS. _LmE. A| 455A I33J I 642 |3,.73.71 a635 2,319A|4, 3t.5 71.A

3Ts _M_Rom I 38t3 1,3.3 21136 3.421 210.13 3_3.9 3t7.7 I3,0.0 2.I

3 Too Ou_m Iag 117.913 *33.3 13,I4.7 3,6731 597| I I*5.7 I *J| 2.1 MUINLTRYOF PUBLJCWORKS AND COMMUNICATIONS *BUDGETARY XECUMON ______~~~~~(byswx of ? n. ifii G(jqmm.m ____

INS - 1 6 1917 198 1969 1990M91 1 1992 IS

LAI Ft LcA Ftp Le- Frtp 1A Ftp L.| Frg Ld Ftp L |A Frp 1-4 Ftf 14 Ftp

R.3 Sam. Rens-Yby-Y.ia 2.6 41.4 2,6118 1,759.3 3=.036 10,53.9

Rig. 4 Sm Ipado - PIke 1,066A 2,761.2 1,539.6 2,132.5 511.9

Rig. 5 Yby Yb YPJ.C o 336.3 850.4 12. 2160A,_.0

Rule 5 PJ.CgbiU .o4 o.. 1,799.9

Rut. 5 Cum=F=.======234.3 155.3 3=0.5 1,7369 .9 5

Rig 5 P e/AcoioCwmci& 2325A 1693.3 3,569.1 1,803.t

Ri 5 cU2Oi9 Ap( CQICtdo 2,913.1

Ri P.MUl Po Colouddo 1,61.0 3,796.4 2,346.9 4,186.3 123.4

RuL.6 P-p. 117.6 334.9 ______

Rum I VM.. .1R..i 8.2 IN.7 70.0 370.4 10.0 1.1911 336.5 175.2 409.7 756.1 714.1 1.496.5 339.9

Rig I Siq.u.c. I - - 4.264J8 4,540.0

Rig 9 Truwudoo 17.6 35.61 33.4

R,A. 9 Mjw I.o.- 14RA I I = I 4200=

Rum 9 T , _ Ti... 3 590.7 =8 9.71 967.4 1.3311

E|rhF . RL9 * F1il.& 18.6 18.5 79.6 15.3 131.9 B63. 4,272.5 2,895J 11,636.7 1,464.2 3,669.1 1,000.2

cow.0. -S. 9o9.6 135_

|N_ilb.TakwwTmdc. 38.4 77.5 54.9

A *Foa F= =de= = 531S. 1,521.5 1,210.4 105.7 _

Az_oa Pmi EamnuckI sead 10.0 104.4 402.1 * 36. 64.5

AINo N== LA= =7 72.7 ===

|R8 . Ri.. bo 45J 49.2 59.61 60 . 66.6

EI _AM . FlduBipo 179.6 2120 269.5 1800C 3609 321.4 3491

Pau- Ru sag 13.4 15.2 15.1 - -

Aft ag9_W 26.9 24.7 340.6 62.3 74.4

A. Awaio SAma_ _ 51J 09.2_

A.yzo_ de&SE_ 1,096.6 3,576.0 23,42,5 1310.0A 23,06.0 40,634.9

M . Phi AWrknj 5.4 10.5 15.3 . r4 b14-b. h_ ==_ = = == =l 163.4 4 Majamse.ItM.9 129.2 MISTY OF KULIC WORKS AND OMMUNICATIONS - BUDGErARY EECUTON |______(y, Of &uac g. tmilian Oud&_s)

19_5 15 6 _ 87 ISS 19B9 1990 1991 | 1992 | 993

L4 Ftp Ld Ftp L4 Frp L4 Ftp L4 Ftpm | 4 Fp 4 I Ftp Ldi Ftp Ld4 FM&

Lo . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 7~~~~~~~~~~~~6.7

|Rmuo Ru.. 6 | J7262.II

Rampao Rus OECF 15__ 2.1 =

SUWIWBAL 2,9.1 3234 2,3J 7,1454 3,58. U.21" 4A9.4 5891 12.337S 4,464 16,11.7 6,35I 23,04L. 1 ,388.9 521772 34,m36 53.966.1 UOAZJ

IGCHWAY MAINIANcZ 1047.4 1_8. 1__ 2,132.9 3,945.8 7,610.5 12,3A 11,112.2 15,2$2.

SUDYOTAL 1,07.4 to 1 . Le 1.622 Lo, 2, Le80 3,56. LI 7410S. 0.4 12A0A 8A UAW Le is.6 Lo

AG'6Gin

[inu.Elsauo 13.9 19A 30.0 37.5 26.2 41.9 116.7 147.4 210.1

Fwvil C. Amio Laps 4. 514A 673.0 76A 1,132.0 1,5763 | 2553=3 3.9233 5.67S.9

Mau-mMm 50 5.5 6.2 6.2 5.0 17A 104.3 36

IFI^_ _ 6,44.41 263 305.2

EsmsNwAshdel 1iodI 34.1

StITarAL 403 539.1 Le 79.2 LO 3117 8 857A LO 1.90 LO 346 LO 4,9 8.0 6,1S.2 Le0

GRAND TUrAL _ _ J _A 7,1415A 7, 2 9_ S 2A1 4,N" 3s1 , 3 | | 3M1.19MS 343231 llS".21 Il A Ull

YEARLY GRAND TUFAL (G/a, 101.44 12,75.2 183 152346 32365A4 41,40S- 71,457.0 179.413J | 29.357

US lDobwF ap Ra 307 339 55 5,6 1.3 1,0 I'm |~~~~~~~~~~~~~Nl)A(lIX.1 GR GNDTMFAL 0 ~ 1j7Al.1 ]93~~.1D D 39 .| tJ @| jI~^1 4 2S.51 51 331247 ]l95.9 3.7 1J°|I

|YEARLY GRANDT i=AL= ) 333 | 37.9 343 27.7 30.6 33.7 54.0 119. 167.1

(9 t s. 1Ay bWhs a- fr 34 _ c4 _ _

NM 1892m 193 _bi. upM Oi dus

8.w _isI Emsal Mecy dcPAb Wed, I _ln of F _m Rafs: _oI M u_q F_ _bmm FI bash

Ougobw196 -54 - Table 2.4

E _i }i i

I I~~~~~~~~~~~~~~~~I

ItR liii'!* 3~~~~~IR i E

_I ij s I TAX COLLECTED FROM ROAD USERS

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 80-90 85-90 AVRG AVRG

(current Guaranies millions)

Direct Taxes 1,943 2,044 2,912 5,436 9,018 15,145 18,258 23,991 29,026 35,506 55,318 18,054 29,541

Indirect Taxes 973 1,123 867 1,468 2,634 2,597 3,561 3,909 4,654 5,379 6,873 3,094 4,496

Sub Total 2,916 3,167 3,779 6,904 11,652 17,742 21,819 27,900 33,680 40,885 62,191 21,149 34,036

MunicipalTaxes 439 580 775 738 783 803 84 1,578 2,278 2,111 2,868 1,258 1,754

Total 3,355 3,747 4,554 7,642 12,435 18,545 22,703 29,478 35,958 42,996 65,059 22,407 35,790

(miions of 1990 Guaranies)

Direct Taxes 18,849 17,055 23,134 37,749 49,305 66,143 60,612 61,085 59,123 55,057 55,318 45,766 59,556

Indirect Taxes 12,531 12,463 9,980 13,284 17,489 13,605 12,445 10,577 10,104 9,999 7,903 11,853 10,773

Sub Toal 31,380 29,518 33,114 51,033 66,794 79,748 73,057 71,662 69,227 65,056 63,226 57,620 70,329

Municipal Taxes 4,263 4,839 6,160 5,128 4,280 3,508 2,933 4,019 4,641 3,273 2,868 4,174 3,540

Total 35,643 34,357 39,274 56,161 71,074 83,256 75,990 75,681 73,868 68,329 66,094 61,793 73,870

(million of 1990 USS)

Direct Taxes 15.7 14.2 19.3 31.5 41.1 55.1 50.5 50.9 49.3 45.9 46.1 38.15 49.63

IndirectTaxes 10.4 10.4 8.3 11.1 14.6 11.3 10.4 8.8 8.4 8.3 6.6 9.87 8.97

Sub Total 26.1 24.6 27.6 42.6 55.7 66.4 60.9 59.7 57.7 54.2 52.7 48.02 58.60

Municipal Taxes 3.6 .4 5.1 4.3 3.6 2.9 2.4 3.3 3.9 2.7 2.4 3.47 2.93

TOl 29.7 28.6 32.7 46.9 59.3 69.3 63.3 63.0 61.6 56.9 55.1 51.49 61.53

Dirt txes ae oseno psoline, oil, habicants, repair and tois.

Indiract tae an s on vehicle inpontion, iwunnr tuxe, and dw taxes in LaNs 449/67 and 468/174.

Muicip taxes ae vehicle tegiitioo and odher fes coLlectedby ucipaliies.

SOURCE: SAE-CONTEC, EFudio de In Fsincion y Recoleccin de Fona pare Caure, 1991 July 1992 - 56 - Table 2.6

--- El m ni _ nnmnnn0ii X 171BT Ts RTT^ 1 FIUl-§Ii rlT 1

01g FA jS

, I t1§52!15 XCMe?T i vm6 Ls S Mv | t S1 S^1 1 1 XI Trl 4 r C m~

-I -|!| |- _ B ! _ ; ; 5 i ! + -

WiX~~~~~ i2 VP2 fl-- 1 |941a 1I t TaTAL LOM ErMTaAL )LOM EXL TUBAL LOC TGTAL

MOPC tPOJRCIU

Com dc oRom. anb 3Mg5T I,us 3.35 1l1.92 1 1,96 12,201 12,2)1 12,445 12,445 12,64 12,64

Comwmuxdm * Msbiem of Krz.Rds. 1,217 1,217 ______

O° Mw P,_ 3,190 3,190 s,7a 5,700 6, 6,40 8,3g tt /J 9,850 9,5

AUMul.ASmp (0 KA) 5,009 1___ 509___

CininPd"o Pm. CoIido 3,619 3,6 __= = _==

S.JP.d . tuo ip1h 2I9 2,97 _

RrIRde.aCz1.inC20 ep 3 203 _ _

RrI.PAP. in Rz1Jdthmmu 192 182

Mhom4sho del omnizi_ _

SiEh nkoftmmhio (92 kmn)

SUBTOTAL 24,972 4 2A.lfl 17,662 a 17,662 19,041 19,041 23,633 20,653 n,344 =,544

TOAL 1NVXSTSWE W3OJKc1U 0,363 139,9M 269.25 5, 173.411 246,0 44,173 169,1 246,34 0.09 10,80 22A69 46.M 10,5 2MS

Hlawuy M 19,409 19,400 20,000 26,000 26,00 _____ 6,0 26,OW 26,00 26,0 2,0

TOTAL HIGHWAY KInNDFrUK 5,793 139,9M ZZ,6U 91, 175,4111 26,0 ",11 102,10 272,341 09,5 1,6 .42 986 101 2,3635

TOTAL 19941US$mllk (0 U531-GI.2)0 44.4 70.01 114.3 43.3 37.71 133.21 45.11 91.11 136.2 45.01 32.3 127.* 46*I 71.6 117.6

SaAm. MOPC, fiDinie. of 1Egl..

Oaakm 1093 Table2.7

ROAD TRANSPORT OPNE (1991)

No. of No. of Compnies Vehicles

DomesticPsenger Srvice Reular 139 1,627 Tourism 51 76 DedicatedService IS 23 Odhers 87 96 InternationalPaMeCgerr Svice OfFargusyanorigin 1 135 Of foreign orgin 14 138 Dometic FreightService For hire companies a a 25,000' Own accountheulbrc a Ia InternationalFreight Service Of Paraguayanorigin 41 9SS Of forein origin 72 1,576

I/ Esimate

Source:MOPC, Planin Ofce

July IM - 59 -

Table 3.1

CUATRO MOJONES TO Rt. 9 TRAFFIC AT MAIN INTERSECTIONS

(Average Annual Daily Traffic (AADI) - Vehiclcs per day (vpd))

Intersecting Road South Side North Side West Side East Side

Ave. Fernando de Is Mora 10,692 18,019 24,217 15,502

Ave. Eusebio Ayala 13,850 10,768 27,573 32,639

Ave. Mariacal Lopez 7,236 7,708 22,181 20,819

Ave. Santa Terea 8,039 11,397 8,139 6,561

Ave. Aviadores del Chaco 8,905 9,669 18,334 18,838

Route 9 (Trmnachaco) 7,318 - 12,091 15,927

Source: Conoultmnt's Report

October 1992 - 60 -

Table 3.2

ROAD IMPROVEMENTS COST SUMMARY

(estimated 1994 USS)

Iteme Description Paraguari- Ita-Cuatro Cuatro Mojo- ULnpio - Ita Mojones nes- Rt.9 Emboscada

Roadworks Earthworks, Pavement, Drainage, 3,307,000 15,440,000 14,733,000 5,756,000 Signs and Mobilization

Bridges Structures and Approaches 2,986,000 5,460,000 452,000

Total Roadworks 3,307,000 18,426,000 21,193,000 6,208,000

Stormwater Drainage Canals 5,750,000

Total Base Cosu 3,307,000 18,426,000 26,943,000 6,208,000

Land Acquisition 575,000 3,850,000 178,000

Supervision 218,000 1,216,000 1,778,000 410,000

Qtty. Contingcs. 331,000 1,843,000 2,695,000 621,000

GRAND TOTAL 3,856,000 22,060,000 35,266,000 7,417,000

CIVIL WORKS INVESTMENT SCHEDULE

(millions at 1994 prices)

1994 1995 1996 1997 1998 TOTAL

(USS) _

Paraguarf - Iti 0.97 0.97 0.96 0.96 3.86

Iti - 4 Mojones 0.57 5.38 5.38 5.38 5.35 22.09

4 Mojones - Rl.9 3.85 7.86 7.86 7.85 7.85 35.27

Li|npio - Emboscada 0.18 1.82 1.82 1.82 1.78 7.42

Resurfacing Rt.6 2.18 2.18 2.18 0.56 7.10

Stabilization Program 1.20 1.20

TOTAL 4.60 19.41 18.21 18.19 16.50 76.94

(0/. a USSI=G/.2,000)

Paraguarf- Iti ,940 1,940 1,920 1,920 7,720

|Id - 4 Mojones 1,140 10,760 10,760 10,760 10,700 44,120

4 Mojones - Rt.9 7,700 15,720 15,720 15,700 15,700 70,540

Limpio - Emboscada 360 3,640 3,640 3,640 3,560 14,840

ResurfacingRt.6 4,360 4,360 4,360 1,120 14,200

StabilizationProgram 2,400 2,400

TOTAL 9,200 38,820 36,420 36,380 33,000 153,820

Source: Ministry of Public Works and Communications September 1993 CIVIL WORI SCREDUKI

(1994 Ouuris .MiE 0 US$l - C/.2,000)

199 1995 Ion0 1997 193 TOW

L-- Ew. To I.- I w. TOW L-& am TOW LA. - L- TOW Lw- | L Tod LA|. | w. Tod

Pwa.sui4kA 4W 1.410 1.96 46 1,4W 1,96 4f 1,4t 1.93 460 1,4W 193D 1,4 5,3 7,73 ki-4Mej 1,140 1,141 2,4 3, 1%0, 2.56 , 10.70 2,540 3 10,7W0 2,5 3,130 10,-7 113m0 32,4 44.14I

G&m-3Lg 7, 7 1 7,73 3,7 12,OM 15.72 3,7W 12,0 15,7A 3,7 12,M0 15,13 3,7M 12,0 15,70 250 410M 23.50

Luqiv e 30 30 3 2,70 36 3W 2,70 34" M 2,7W 3,60 3 2,730 3,56 3,30 11,0WI13 100

RdSmf _nA I.= 3,= 4,3 1, 3,0 4,M ID 3,D 430 230 s6 1,120 3_5 l.= 14,30

3~~~.Pmgm 0W~~~~~~~NI,9 2.4W 93 l,3 2,60

Toml , 0 9,X0 9,20 W,M ,93 3,O 7,06 27,70 30n,3 7,0 25_= 3,0 4e5 Il_.= 153_

- - = ------* -. * * - = - - - = - = - = = - - - - =~~~~~~~~~~~~~~~~~~~~~~<

W9 HWUMLEMBTno S8COtLE

Its - Cmato ljSmsm,

L bmo- Emodsn : : : :j Ru.uwfu Rt6 II StabOlihMbft ODNSuL1nNG SERVIRS SupmnWI o Road 1m1immuWaft SupstwJk0dltaU .11Pr D.lp Rt.6 RA6ZkIS8 DoaJphaprnm of .Y-Iyd Lam.bweQe&bS AssodamTrapmtMaszwTMm MOPCUMSevlocAms.etaneie

ANKSUERVISINMuIUONa

Land AcqMaior2 Res.lMg eole Tendstfrg Bkdn and Caioidhg Time CortMCtE2,aCsOn Period

H w* I-' - 63 -

TABLB3.5

ESTIMATEDSCHEDULE OP DISBURSEMENTS (millionUS Dolbars)

By the End of FiscalYear Annual Cumulative Pcenta 1994 0.0 0.0 0 1995 10.0 10.0 IS 1996 16.4 26.4 41 1997 16.0 42.4 65 1998 15.3 57.7 89 1999 7.3 65.0 100

AswmqKiona: Lon Signing: January, 1994 LAn effectivenes: March, 1994 ProjectCompletion: Decemiber,1998 Loan Closn Date: June, 1999

October 1993 - 64-

Table 4.1

PARAUAR - ffA

Averp Daily Traffic with Project

,b&Ysua^ & Yamr6p taram sction Xm liLxhtvehoil Ebus In a lad LightvehicleM b s nI b rag 0 1513 461 742 2716 1185 370 532 2087 1 1622 483 733 2623 1270 363 561 2219 2 1739 506 326 3071 1362 406 592 2360 3 1664 531 871 3266 1460 426 625 2510 4 1998 556 919 3473 1565 446 659 2670 5 2142 533 970 3695 1673 468 695 2841 6 2296 611 1023 3930 1798 490 734 3022 7 2469 640 1079 4131 1928 514 774 3216 8 2639 671 1139 4448 2067 538 316 3422 9 2829 703 1201 4733 2215 564 361 3641 10 3052 737 1267 5037 2375 591 909 3875 11 3251 772 1337 5360 2546 620 959 4124 12 3485 309 1411 570S 2729 649 1011 4390 13 3736 648 1488 6072 2926 681 1067 4674 14 4005 389 1570 6464 3137 713 1126 4976 IS 4293 931 1656 6881 3362 748 1198 5293 16 4602 976 1748 7326 3604 7U3 1253 5641 17 4933 1023 1344 7300 3864 621 1322 6007 IS 5289 1072 1945 U306 4142 860 1395 6397 19 5669 1123 2052 S345 4440 902 1471 6813 20 6078 1177 2165 9420 4760 945 1552 7257 21 6515 1234 2234 10033 5103 990 1633 7731 22 6934 1293 2410 10687 5470 1033 1728 8236 23 7497 1355 2542 11335 5864 1088 1323 8774

Source: SAE-CONTEC Jluy 1992 PARAGUARI - ITA

Cost-Benefit Streams With and Without Value of rime Paraguari - Yaguar6n Section Yagusr6n - Iti Section Benefits Net Benefits Benefits Net Benefits Coast. Without With Without With Const. Without With Without With Year Coda V.T. V.T. V.T. V.T. Costs V.T. V.T. V.T. V.T. 0 1154 0 0 -114 -1154 769 0 0 -769 -769 1 1732 0 0 -1732 -1732 1154 0 0 -1154 -1154 2 26 166 26 166 7 129 7 129 3 28 173 28 173 8 132 a 132 4 27 197 27 197 a 136 S 136 5 29 206 29 206 2 170 2 170 6 31 214 31 214 2 175 2 175 7 32 223 32 223 2 179 2 179 8 34 232 34 232 7 223 7 223 9 37 271 37 271 7 227 7 227 10 39 282 39 282 7 231 7 231 11 13 41 292 28 279 30 5 277 25 247 12 43 302 43 302 4 281 4 281 13 33 377 33 377 20 346 20 346 14 34 339 34 389 19 350 19 350 15 35 401 35 401 24 403 24 403 16 19 497 19 497 22 404 22 404 17 19 511 19 511 52 477 52 477 1 19 523 19 523 50 473 50 473 19 27 630 27 630 65 521 65 521 n 20 -862 28 642 390 1504 -575 S1 570 656 1145 ERR - -4.2% without value of time ERR - -4.4% widoaut value of time ERR= 7.9%withvalueoftime ERR = 10.3% with value of time

Source: Updated SAE-CONTEC Report April 1993 -66 -

Table 4.3

ITA - CUATRO MOJONES

Traffic Estinutes With and Without the Proiect

Without Project Section Cars Buaea Trucks Total

via Rt. I Fdo. de Ia Mora-San Lorenzo 10500 3000 1500 15000

San Lorenzo-Ybyru 6444 2118 1432 9994

Ybymr6-Acc.Guamrmbar6 2141 822 1000 3963

Acc.Guramnbar6-Acc.N.1td ISS0 561 965 3406

Acc.N.Ih-Acc.S.ltd 1750 513 873 3141

Cuatro Mojones-Ita Cuatro Mojonea-Tres Bocas 8890 1707 1260 11357

Tres Boca4frnemby 3423 1339 955 5717

Remnby-Ypane 1442 667 374 24S3

Ypand-Acc.Villeta 736 34 493 1263

Acc.Villeta-Guarambard 530 194 332 1056

Guamrmbard-lid 550 275 374 1199

With Project

via Rt. I Fdo. de Ia Mora-San Lorenzo 8974 2224 1018 12216

San Lorenzo-Ybyraro 4899 1342 930 7171

Ybyrar6-Guammbare 596 278 498 1372

Guartnibard-Acc.N.Iti 359 278 540 1177

Acc.N.Itf-Acc.S.ItI 229 278 448 955

South Acceu to Asunci6n Cuatro Mojones-Acc.N.Remby 7566 2274 14S8 11328

Acc.N.fNemby-Itororo 2716 1362 778 4856

Itororo-Acc.S.Ypane 2012 889 808 3709

Acc.S.Ypand-Acc.Guarmbare 1663 847 598 3108

Acc.Guamnbar6-Ita 1383 608 424 2415

Itororo-Ypan6 1226 567 317 2120

Ypan&Acc.S.Ypand 367 17 245 629

Acc.S.Ypane-Acc.Villeta 395 39 317 751

Guaranmbar-Acc.Guarambare 526 443 265 1234

Acc.Guorarnbari-Acc.Villeta 236 75 93 404

Acc.Nniiemby-Reonby 2270 805 655 3730

Remby-Cia.lRemby 308 275 87 670

Guammbare-Ita 496 111 297 904

Source: SAE-CONTEC June 1991 1TA - CUATRO MOJONES

Economic Coda with and wiout the project (billion Guaranie)

ALT 0 ALT I

Section Conr. & Main- Vehicle rtme Toal Consr. & Main- Vehicle rune Toal eco- inyrov. tennce Opeting costs economic improv. ten- operating coft nomic cost coda cost costs codas co ance costs cod$

F. Mom-SanLonzo 0 .347 216.654 57.009 274.010 0 .327 132.813 49.393 232.533

San Lorenzo-Ybyraro 0 .266 566.53 139.309 892.S57 0 .210 397.775 100.364 591.140

Ybyraro-Acc.Guauaeare 0 .079 105.240 21.450 130.548 0 .059 39.967 71.221 47.247

Acc.Guarambare-Acc.N.ha 0 .053 206.437 3S.557 249.S97 0 .136 83.147 12.031 96.315

Acc.N.ha-AccS.ltc 0 .053 62.893 11.S4S 30.381 0 .043 23.022 3.739 26.304

Cuato Mqonoa-Acc.N.Nenby 0 .487 393.355 100.770 591.193 3.575 .107 171.330 46.402 231.922

Acc.N. Nembfy-loo 0 .054 49.938 12.649 71.422 3.850 .111 93.279 24.330 120.600

hororo-Acc.S.Yp_w 0 .062 57.102 14.469 71.673 2.200 .060 76.671 17.510 95.912

Acc.S.Ypane-Acc.N.Ypane 0 .214 52.612 6.858 59.674 3.025 .079 79.613 19.299 101.178

Acc.N.Ypa-Acc.S.lpcne 0 .228 40.241 7.640 4S.115 7.425 .0S9 285.S73 3.966 299.500

Acc.S.Ypane-ha 0 .245 47.729 9.429 57.404 7.425 .240 209.041 51.110 266.500

TOWalproect component 0 2.548 2,020.939 477.002 2,500.489 27.500 2.420 1,944.011 113.353 2,035.500

ERR - 14.3%

Source: Updated SAE-CONTEC Report April 1993 - 68-

Table 4.5

CUATRO MOJONES - ROUTE 9 Averap Daily Tafic With andWithout the Project

Without Project With Project

Scstion uree T h mclka 11 CM U TruckrTo te 1. Cuatro 0 12454 3774 2642 18870 12454 3774 2642 18870

Mojoncr- 3 14484 4229 2989 21702 15024 4582 3210 22817

Mercado S 18588 5087 3658 37333 19358 5575 3962 28894

Abuto 13 23614 6001 4403 34017 24940 6781 4889 36611

18 28625 6685 4971 40281 32130 8244 6032 46406

22 34749 6592 5823 47164 39350 8242 7138 54731

2.Mercado 0 13730 3582 2587 19899 13730 3582 2587 19899 Abastoe- 3 15377 3825 2758 21961 17272 4740 3349 25360

Av. Ayala a 18919 4216 3140 26275 72254 5766 4133 32153

13 10266 2833 1965 15064 10870 3173 2154 16197

IS 13154 3385 2392 18931 14006 3860 2659 20525 22 15824 3817 2745 22387 17154 4515 3147 24816

3.Av. Ayala- 0 5318 1718 1145 8I18 5318 1718 1145 8I18 Mca. Lopez 3 6191 1931 1299 9421 6547 2143 1414 10105 8 7976 2344 1600 11919 8436 2608 1745 12789

13 10266 2833 1965 15064 10870 3173 2154 16197

1s 13154 3385 2392 18931 14006 3860 2659 20525

22 15824 3817 2745 22387 17154 4515 3147 24816

4. Mcal. Lopez- 0 5125 1337 966 7423 5125 1337 966 7428

Ste.Terer 3 5967 1503 1096 8566 6313 1668 1195 9176

8 , 7687 1826 1351 10864 8134 2030 1475 11639

13 9900 2212 1662 13775 10481 2470 1820 14771

iS 12723 2661 2034 17413 13504 3005 2247 18756

22 15444 3042 2362 20848 16540 3515 2659 22713

S.Ste. Teresa - 0 7341 1678 1468 10487 7341 1678 1468 10487

Aviadores del 3 3544 1884 1663 12091 8977 2077 1803 12857

Chaco a 10992 2276 2042 15310 11566 2527 2225 16319 13 14069 2715 2483 19267 14903 3075 2747 20724

IS 17314 3092 2841 23248 19202 3741 3390 26333

22 20119 3303 3139 26561 23517 4376 4012 31905

6.Avisdore 0 6713 1379 1104 9196 6713 1379 1104 9196

del Chaco- 3 7815 1550 1252 10617 8196 1701 1352 11249

Rt.9 a 10064 IS1O 1542 13486 10560 2070 1668 14298 13 12942 2269 1392 17104 13606 2518 2059 18184

I1 16541 2701 2296 21537 17531 3064 2542 23137

22 19429 2985 2536 24950 21472 3584 3008 28064 - 69 -

Table 4.6

CUATROMOJONES - ROUTE 9

Coat andBenefits with and withoutvalue of tirn (million1992 Guaranies) Year Cost Benefits Net Benefits Without With Wsiout With value of time value of rims valu, of time value of tin. 0 13,400 0 0 -13,400 -13,400 1 11,500 0 0 -11,500 -11,500 2 11,500 0 0 -11,500 -11.500 3 7,500 0 0 -7,500 -7,500 4 10,667 13,553 10,667 13,553 5 12,250 15,494 12,250 15,494 6 12,792 16,437 12,792 16,437 7 13,346 17,414 13,346 17,414 S 14,198 18,917 14,198 18,917 9 15,648 21,481 15,648 21,481 10 17,305 24,409 17,305 24,409 11 18,132 25,728 18,132 25,728 12 18,912 26,955 18,912 26,955 13 19,750 28,292 19,750 28,292 14 991 20,658 29,766 19,667 28,775 15 21,655 31,408 21,65S 31,408 16 22,767 33,268 22,767 33,268 17 24,001 35,368 24,001 35,368 IS 25,452 37,862 25,452 37,862 19 28,384 42,566 28,S84 42,566 20 16,300 29,940 44,217 46,740 61,017

ERRS 22.6 ERRS 27.4

Soume:Updated FORAGRO-PARELC Report April 1993 - 70-

Tabl. 4.7

CUATRO MOJONES - ROUTE 9

Storm Drainag Component, Cod/Benefit Streams (million 1992 Guaranies)

Year Constuction Coda Benefits Net Benefits

0 4,170 - -4,170

1 4,170 - - 4,170

2 2,136 2,136

3-1S 2,136 2,136

ERR% 22.4

Source: Updated FORAGRO - PARELC Report April 1993 - 71 -

Table4.1

LIMPIO - EMBOSCADA

Average daily traffic with andwithout the project (number of vehicles)

Without Project With Project

1w 5l am TOc ToImsa E c TrucIi i2W 1 265 75 307 647 421 124 584 1129

2 214 71 323 6S5 452 129 614 1195

3 305 12 340 727 485 135 646 1886

4 327 SS 357 769 520 141 680 1341

5 351 89 376 816 55S 147 715 1420

6 377 93 395 865 599 154 752 1505

7 404 97 416 917 643 161 791 1595

8 434 101 438 973 689 168 832 1689

9 466 106 460 1032 740 175 876 1791

10 500 111 484 1095 794 103 921 1898

11 536 115 510 1161 852 191 969 2012

12 575 120 536 1231 914 199 1019 2132

13 617 126 564 1307 981 208 1072 2261

14 662 131 593 1386 1052 217 1128 2397

15 711 137 624 1472 1129 227 1187 2543

16 762 143 656 1561 1211 237 1249 2697

17 11i 149 690 1657 1300 250 1314 2864

18 178 156 726 1760 1395 258 1382 3035

19 942 163 765 1870 1497 269 1454 3220

20 1011 170 804 1985 1606 281 1529 3416

Source:SAE-CONTEC

June 1992 - 72 -

Tabb 4.9

LIMPIO- EMBOSCADA Net EconomicBenefits with andwithoa Valueof rume (1992 Guaraniesbillion)

Savingsin Savingsin Total EconomicBenefits Increasein exising Generated Existing Generated Increa in Road vehicle Vehicle Vehicle Vehicle Without Road Capi- Recurrent operating Operating Travel TrovelTr,m TaveJl rus Wit TxM- Year tal Cost Cost cosd Benefits Tine cost Benefits vel rTm 0 2.000 .000 .000 .000 .000 .000 -2.000 -2.000 1 2.700 .000 .000 .000 .000 .000 -2.700 -2.700 2 2.700 .000 .000 .000 .000 .000 -2.700 -2.700 3 1.S00 .000 .000 .000 .000 .000 -1.S00 -1.S00 4 .000 -.005 .75S .061 .092 .016 .916 .932 5 .000 -.005 .804 .066 .098 .017 .973 .990 6 .000 -.005 .S53 .070 .104 .01 1.033 1.051 7 .000 -.005 .906 .075 .111 .019 1.093 1.117 I .000 -.005 .961 .081 .118 .021 1.165 1.136 9 .000 -.005 1.020 .0S7 .126 .022 1.238 1.260 10 .000 -.005 1.0S3 .093 .134 .024 1.315 1.339 11 .000 -.005 1.149 .100 .143 .026 1.397 1.423 12 .000 -.005 1.220 .107 .153 .028 1.4S4 1.512 13 .000 .036 1.294 .115 .163 .030 1.535 1.565 14 1.277 -.005 1.3S6 .124 .175 .032 .414 .446 15 .000 -.005 1.528 .139 .195 .036 1.866 1.902 16 .000 -.005 1.670 .154 .215 .040 2.043 2.0S3 17 .000 -.005 1.823 .170 .236 .044 2.233 2.277 1i .000 -.005 1.9S7 .1S .259 .048 2.439 2.487 19 .000 -.005 2.163 .207 .254 .053 2.659 2.712 20 -2.765 -.005 2.351 .227 .312 .059 5.660 5.710

ERR -10.6% ERR - 10.3%

Source: UpdatedSAE-CONTEC Report April 1993 - 73 -

ANNEX 1

PARAGUAY

EIGHT HIGHWAY PROJECT

External Assistanceto the Highway Sub-sector

1. In additionto the Bank, the InteramericanDevelopment Bank (IDB), the Japanese OverseasEconomic Cooperation Fund (OECF)and the US Federal HighwayAdministra- tion (FHWA) are providing MOPC, principally DH, technical assistance and other support to strengthen their capacity.

2. IDB's loan 829/SF-PR includes about US$ 1.5 million to finance consulting services to prepare a medium-to long-term NationalRoad Maintenance'4 Plan'5. This Plan would includes developmentof a road and equipment maintenancemanagement system. Over 90 man-months,in a period of 2-3 years would be applied to develop it. Terms of referenceto prepare the Plan, taken from IDB's project report are in the project file (documentG41712). The TORs were reviewed by Bank staff and found to be somewhat outmodedin that they aim at settingup a force-accountcapability including its cor- respondingmanagement systems and organization, instead of helping to prepare MOPC for the use of contract maintenance.

3. DH went alreadyonce through this exercisein the early 1970s, under the Bank's Fourth Highway Project. Roy Jorgenson Inc. (RhI) provided seven years of intense technicalassistance for the purpose but, none of the systemsthat were put in place at the time, none of the planning that was done, and none of the staff that were trained have survived. The claim is that the RJI planning/programmingsystem was too complex,un- wieldy, lacked transparency,and was difficult to sustain. Yet, with some modifications and simplification,it has survived and succeededat the HighwaysDepartments of the states of Parana, Minas Gerais and a few others in Brazil. Parana, the Brazilianborder- state to Paraguay, is one of the more successfulRJI projects. Progress under the IDB assistance is slow.

4. Other studies includedunder IDB's technicalassistance are mostly follow-upand elaboration of studies and work initiated by consultantsto MOPC's Planning Office (OCPIT at the time, OPIT now), commencedunder the Bank's earlier projects including the SeventhHighway Project (Loan 2140-PA). They include(i) extendingand fine-tun- ing accident data collection, (ii) computerizingthe rolling four-year NationalTransport Plan and monitoringits implementation,(iii) updatingvehicle operating costs, (iv) follow- up on user charge collectionand how highwayinfrastructure costs are financed, (v) ana- lyzing energy consumptionin the transport sector, and (vi) training OPIT staff in the use of personal computers.

14/ The term maintenanceis defined as encompassingrehabilitation, reconstruction and improvement,as well as routine maintenancetasks.

15t Also included are other studies and assistance to MOPC's transport planning office OPIT. - 74 - 5. MOPC is also the executingagency for two IDB rural roads projects: the Rural Roads in Rural Coloniesprogram, whichjust started (1993)and would extend until 1996; and the NationalRural Roads program, which was just approved and signed, and which would extend until 1997.

6. The OECF is engaged in financinga sizeableequipment replacement program for MOPC. The program financesabout US$ 34.4 million worth of equipmentand the fuel and lubricantsto operate it for three years. A sizeable (3-year, 150 man-months)technical assistanceprogram to train operators and mechanicalstaff in the use and repair of the equipment is also included. This program grew out of a Bank financed study on equipmentrenewal and maintenanceneeds, carried out under the SeventhHighway Pro- ject and completed in December 1985. The equipmentwas becomingdated at the time, and much of it needed intensivemaintenance, and eventualreplacement. The study also reviewed and made many recommendationson the operationand managementof the San Lorenzo central workshop. The recommendationsof the study were never implemented: the managementand operations recommendationsfor the San Lorenzo workshop were forgotten, the equipmentwas not maintainedas intensivelyas needed or replaced in time and, thus, equipmentavailability became a seriousproblems first, and eventuallya crisis. Lack of equipmentis now blamedas a contributingfactor for the breakdownand eventual abandonmentof RJI maintenancesystem. Since the study was done, DH's maintenance districtshave becometotally ineffectual,and control over the San Lorenzo central workshop has been transferred from the DH in the Undersecretariatof Public Works, to the Undersecretariatof Administrationand Finance.

7. The road maintenanceneeds identifiedin the studyformed the basis for a 264 km road rehabilitationprogram for which OECF financingwas eventually requested. The works were to have been executed between 1988 and 1990 but delays in making the OECF loan effectivehave held up commencementof the works. The first few rehabilitation lots are only now being contracted.

8. Sinceresuming operations in Paraguayin 1989, the Bank has principallysupport- ed modernizationof MOPC, in close cooperationwith the IDB and OECF, both of whom stayed in Paraguay all along. For instance,with funds of the SeventhProject computers and softwarewere procured to bring up to date DH's Planning and ProgrammingDepart- ment, and its Controland EvaluationDepartment. A cooperationagreement with the US Federal HighwaysAdministration was promotedthat would give MOPC accessto a wide range of highwayengineering design, planning, and control software. MOPCstaff need training in the use of these computerassisted engineering techniques; providing some of the training is being pursued by MOPC with the US-FHWA.

9. As computershave come into more frequent use at MOPC, the Bank has promot- ed the utilizationof the Highway Design and MaintenanceModel developed in the Bank. MOPC staff and consultantshired to prepare the proposedproject, were trained in using the program and prompted to use it. A basic capabilitynow exists at DH. Use of the model, coupled with the formation of a Pavement Evaluation Unit (UTEP) to assess pavement condition, has considerably facilitated assessing road rehabilitation needs, especiallythe considerationof alternativemaintenance options. The Unit has identified and evaluatedanother 500 km for rehabilitation. These 500 km of deferred maintenance needs have been accumulatingpending initiationof the works under the OECF loan. Additionalrehabilitation is proposed to be financedwith an IDB loan.

10. A recent computeracquisition under the SeventhHighway Project was intended to make availablePCs at each of the five maintenancedistricts, so that maintenanceplan- - 75 - ning and control, and workshop management,inventory and cost control systems could be brought into use there. However, the computershave not been distributed because it has been difficultto find and train the staff necessaryto operate the computers. Suppli- ers of standard, off-the-shelvesoftware packages have been training MOPC staff on the use of their packages and it is expected that the people trained would then be able to adapt the packages for the specificuses necessary in the districts.

11. Under the SeventhProject, the Bank financedthe purchase of traffic counting equipment, to replace older, no longer serviceable models. The equipment would be installed soon and the traffic data collection program is expected to be re-initiated promptlyas installationis ready.

12. A Special Commissionsuggested by FHWA to be formed to study how to improve vehicle weight and axle load controls, was created with support of an IDB/UNDP cooperativeprogram. One of the recommendationsof the Commissionwas to purchase more weighingequipment; MDBintends to finance the equipment. However, progress in this area, in which considerableBank funds were also spent about a decade ago, is crawlinglyslow.

- 77 - ANNEX2

PARAGUAY

EIGHTH HIGHWAYPROJECT

DetailedDescription of Project Works

Paraguarf - It$

1. The road section is part of Rt.1 the southern axis that connects Asunci6n and Encarnacidnand beyondto Argentina. It carries considerablevolumes of local and long distance traffic and at present has no paved shoulders. The proposed works would involve resurfacing the roadway and constructingpaved shoulders alongside. Also, shelteredbus-stops would be provided for the substantialnumbers of people who use the bus services that run along the road to San Lorenzo and to Asunci6n, and a long section of rumble strip would be built within the town of Yaguar6nto slow down traffic and protect pedestrians, especiallytourists who come visit a historic Jesuit church there.

Ita - Cuatro Mojones

2. The road branches off Rt. 1, the south access to Asunci6n, at Ita and generally runs parallel to Rt. 1, south of it. It passes throughNemby, Ypane and Guarambar6and connects at Ita with Rt. 1. This allows an expeditiousconnection from Rt. 1 to the ports of Villeta and San Antonio. In additionto relieving congestionon the heavily travelled Rt. 1, improvingthe Ita - Cuatro Mojones road would divert part of the traffic bound for the port of Asuncidnto these other ports.

3. Under the proposed project a new 2-lane road would be constructedbetween ItA and Ypane, includinga by-pass of the city of Ipane. The new road would then join the old shortly before Nemby from where it would be widened to 4-lanes all the way to Cuatro Mojones at the main traffic junctionwith Asunci6n'sringroad. The works would include the provision of sheltered bus-stopsand adequate provision for pedestrian and animal traffic in the rural areas.

Cuatro Moiones - Rt.9 (Defensores del Chaco - Madame Lynch)

4. This is the main urban traffic distributoraround Asunci6n. It rings the city from Cuatro Mojonesat the southernend, to Rt.9, the Trans-Chacohighway on the north,just before reachingthe bridge across the Paraguay river into the Chaco. Traffic congestion is a perennial problem along the ring road, particularlyat the main intersectionswhere long waits at traffic lights generate interminablequeues especially during peak hours. The narrower section of Madame Lynch, which is only 2-lanes wide and has no shoulders, carries between 8,500 to 10,000 vehiclesper day. The ring road is composedof the Defensoresdel Chaco Ave. and MadameLynch Ave. It intersectsevery major road access into Asunci6n. The six main intersectionsalong the road are:

5. Cuatro Mojones, the southern access serves, in addition to the long distance traffic accessingthe city; the suburbanarea whichhas somelight industryand commerce; the only oil refinery of the country which is at the end of the Defensores del Chaco extension just south of Cuatro Mojones, near the river; the Asuncidn wholesale food market which is located just down the road on Defensores Del Chaco; and the city's - 78 - inter-urban bus terminal which is on Fernando de la Mora Ave. about 1 km from the Cuatro Mojones intersection. A viaduct will be constructedin this area.

6. Eusebio Ayala Ave. Intersectionthis is the mostused truck route (passengercars may chooseto use the MariscalLopez Ave. instead)to San Lorenzo, an important indus- trial and distributioncenter and the split of Rt. 1 to the south, Encarnacionand Argentina, and Rt.2 to the east, Ciudad del Este and Brazil. All long distancetraffic out of Asun- ci6n to the south and east must pass through San Lorenzo. The junction is a key node and will remain such despite the relief that improvementof the Paraguarf- Ita road will bring. A viaduct will be constructedat this intersection.

7. Mariscal Lopez Ave. Intersectionthe Avenueis restricted to cars and light truck use on the way to San Lorenzo; neverthelessit carries a high volume of traffic (about 20,000 vehiclesper day). A viaductwill be constructedat this junction too.

8. Santa Teresa Intersection Sta Teresa road joins Ave. Mariscal Lopez a short distance to the west of the intersectionand carries mostly traffic to or from the north eastern areas of the city. An improved at-grade crossing with signal lights will be built at this intersection.

9. Aviadoresdel Chaco Intersectionthis is the intersectionwith the super-highway leading to the airport, continuingon as a two lane road to the suburb of Luque and beyond. An improved rotary will be built at this point.

10. Junction with Rt.9 Route 9 is the Trans-Chacohighway it serves the northeast of the country and considerabletraffic reaches the city at this point. Rt.9 crosses the Paraguay River at RemansoBridge and just off the bridge on the west side of the river the road splits one branch leads south to an internationalbridge to Argentina, and the other leads to the northwestand the Chaco.

11. Also at the MadameLynch/Rt.9 junction, Rt.9 joins Rt.3. Rt.3 leads to Limpio- Emboscadaand beyondto San Estanislaoand Tacuara on the center-eastof the country. The project includes paving of the Limpio - Emboscadasection and the preparation of the engineeringand environmentalstudies for the continuationof the road to Tacuara. An improvedjunction with traffic lights is foreseen at this intersection.

12. To minimize land and housing expropriationwhere the three viaducts will be built, existing city streets would be improvedto serve right turn traffic movements,in clover-leaffashion, and all left turn movementswill be eliminated.

13. Anotherinter-related problem is beingdealt with, with the proposedimprovement of the ring road. It is the absence of adequate storm water drainage. This results not only in sections of the road flooding, which brings traffic to a standstill, but in entire residential and commercialareas abuttingthese roads flooding as well.

14. The proposed road improvementswould: up-grade the road to 4-lane, urban standard; provide three overpass viaducts at three main intersectionsthus replacing the present traffic signals; and improve the other three main at-grade intersectionsincluding the installationof appropriatetraffic signals. -79- Storm Drainage Improvements

15. To ensure adequate provision of storm water drainage for the ringroad, it was necessary to deal with constructionsalong the main natural channels into the Paraguay river. Also, to ensure that the viaducts and intersectionswould be drained, and that intersectingroads at critical locationswould drain duringthe frequenttorrential rains that affectAsunci6n, improvementsto secondarychannels were also needed. The consultant's designwas closely coordinatedwith CORPOSANA,the authorityresponsible for municipal drainage;drew on a storm drainageimprovement study for the city, financedby JICA in 1987; and was helped by an engineeringstudy to improve the Itay watercourse, prepared for CORPOSANAin 1989.

16. Along the existing Madame Lynch road runs a 5-meter wide collector ditch, which has been partly improvedwith masonrywalls. This ditch improvementwould be completed, the bottompaved and, most importantly,the connectionto the main drainage outlet at the Itay watercourse would be improved. The ditch would remain open and would be the medianbetween the traffic lanes on the new ringroad. The two new lanes of the road would be built on the side of the ditch which was not developedbecause the ditch blocked it from accessto the road. Most of the land expropriationwould take place there but no buildings are affected. The alternativeof paving over the ditch to reduce expropriationcosts was also studied but discarded.

17. Secondarychannels feeding into the Madame Lynch ditch from either side would also be improved. This requires the road grade to be raised along portions of the road. Along raised sections of the road a frontage road would be built to serve existingroad- side businessesand housing developmentswhere alternativeaccess would not be available. Surface water run-off on Aviadores del Chaco (a main interceptor) would be collectedup-hill from the rotary and led by an improved channel also to the Itay watercourse. An old, insufficientculvert under the existingroad, which causes flooding of residences in the area, would be replaced.

18. The other major improvementwould be the wideningof a section of the Lambare creek. This creek crosses under a bridge on Fernandode la Mora Ave., between Cuatro Mojonesand the inter-citybus terminal. The bridge normallybecomes submergedduring rains because the creek is too narrow about 100 meters down-stream. No buildings would be affectedbut a fringe of land would need to be expropriated. Two other channels feeding into the creek just upstream from the bridge would also be improved as drainage from the Cuatro Mojones area would also be dischargedinto the creek.

Limpio - Emboscada

19. Paving the Limpio-Emboscadagravel road is currently mostly a solution to a suburbantraffic problem. However, the section (17.0 km long) is part of Rt.3, a national trunk road that links Asuncidnto the north of the country and to BellaVista in Brazil. Rt.3 joins at Tacuara the country's central north-southcorridor which runs from Coronel Oviedo to Santa Rosa and Yby-Yau which in turn serves traffic from and to Asuncidn and San Pedro, Concepcidn,Amambay and Canindeyu. This traffic is currently forced to travel southto Coronel Oviedoand join the congestedRt.2 into Asuncion. When Rt.3 is completeda considerablerelief will be felt along Rt.2, especiallySan Lorenzo and the southern end of Asuncion's ringroad - 80 - 20. The existingroad is a dry-weatherearth road which is often closed to traffic after rain. Daily traffic in 1991was some 650 vehiclesof which about 47% were trucks. The proposed works includeconstruction of a 2-lane, 6.40 meter wide paved road, 2.5 meter wide paved shoulders and the replacementof a 50-year old bridge at the Salado river. - al -

ANNEX 3 PARAGUAY

EIGHTHHIGHWAY PROJECT

Pilot Program of Earth-RoadStabilization

Backgzround

1. Earth road stabilizationwith sulphonatedoil is a relativelynew techniquewhich has gained rapid acceptance. About 1,500 miles have reportedly been constructedin South Africa (one of the producersof the oil), use in Venezuelahas also been widespread (another producer). It has been used in the United States northweston logging roads, and in repair applications(by injection)at considerablesavings comparedto more classi- cal construction/repairtechniques. US laboratories have declared the material to be environmentallyneutral.

2. To apply the oil, standard constructionand compaction of earth embankment equipmentand proceduresare used. However, instead of sprayingplain water to com- pact the soils, a water solution of sulphonatedoil is appliedon the upper courses of the embankmentbefore compactingthe surface (rates of oil to water of between 1:300 and 1:500gallons or liters). The added cost of the oil has been estimatedto be about $5,000 per kilometer of 6-meter wide roadbed.

3. The sulphonatedoil seemsto be most effectiveon clay soils, such as are common in Paraguay. Clay surfaces, well compacted,provide excellentriding quality when dry, but deform rapidly (rut and pot-hole) under traffic when wet. The reason is that clay's attract and absorb water, which lubricatesthe clay and destroys the cohesionit has when dry, thus ruining the resistanceto loads. The sulphonatedoil produces an ionic change in the clays' behavior that makes it repel water and behave as though still dry, even under wet conditions.

4. A five kilometer test sectionwas recentlydone and is performinggenerally well. Differences in performanceare visible on different parts of the section; however, the section was constructedwithout much control regarding soil quality, and possiblyusing different road-sidematerials. Also, constructioncosts, subsequentmaintenance requirements and the quality control requirementsneed systematicinvestigation.

The Pilot Program

5. The purpose of the pilot program is to determine: (i) the extent specifications used in other countries need to be adapted to Paraguayan conditions; (ii) the extent control of soil quality is critical during construction(i.e. does the dosage need adjusting for soil changes); (iii) how best to specify, contract, and supervisethe work; (iv) what the cost of constructionis, and how it compares with gravelingcosts (a Colombianrural roads agency reported that at gravel haul distancesof more than 25 km, the sulphonated oil was less costly); and (v) what maintenancework is subsequentlyrequired, at what cost.

6. The proposedproject would consist of improvingabout 40 km of unpaved road with the material (five carefullyselected road sectionsof about 8 km each). Supervision would be done by an experiencedinternational consultant and the consultant'sadvise and - 82 - instructionswould be followedclosely. One or two sections would be done by contractors who would provide the necessarylabor and operate their own equipment,under the direct supervisionand managementof MOPC advised by the consultant. Once some experienceis gained, unit-pricecontracts would be used to contractthe rest of the experi- mental sections. Maintenancewould be contracted.

ConsultingServices

7. The consultingservices, which wouldbe financedas a part of the project, would include:

Soils investigationsrelated to each road section, engineering design and the technical specifications for each section (assuming that different soils might require some difference in the specification). The program should also be open to testing the use of sulphonatedoil products from different suppliers so as to permit contractorsto seek competitiveprices;

Preparing bidding documentand assistingMOPC in the bidding and bid evaluation. The contract documentswould permit MOPC and the supervision,to vary constructionprocedures during construction. Procedures which prove to be the most efficient and satisfactorywould be included in the technical specifications so that standardunit price bids, for this type of work, may later be requested;

Supervisingthe work being performed:test alternativeconstruction procedures and maintain related cost records so as to modify or up-date specifications, if necessary. At the same time the consultantwould conduct strict laboratory controls on the materials (soils) and dosages of the chemicalproduct used. The consultantwould monitor closely the evolutionof the stabilizationprocess and the performanceof the finished product, over time and under traffic. The consultantwould maintaindetailed recordsto documentthe history and resultsof the work;

- .-Supervisingthe maintenanceof the sections, and recording the costs thereof. Maintainingby contract wouldbe tried, initialcontracts would probably require two years of maintenanceby the contractor; and

- Preparing regular progress reports, including recommendationsto MOPC on changeswhich might need to be made in the program, and a final evaluationat the end of the program.

8. The consultantwould also provide on-the-jobtraining to DH and DVR technicians and engineers, and produce a manual to replicatethe process in the future.

Schedule

9. The pilot program would be carried out over a period of 9 months and supervision services would extend for 15 monthsto provide followup and thoroughlydocument the procedures used. MOPC would subsequentlymonitor the work's behavior and produce a report on the experiment12 and 24 monthsafter the completionof the works. - 83 -

ANNEX 4 PARAGUAY

EIGHTH HIGHWAYPROJECT

Terms of Referenceto Prepare EngineeringDesigns for the Improvementof the Ytay and Lambare Creeks

Background

10. The Ministryof PublicWorks and Communications(MOPC) has decidedto carry out, with the financialsupport of the World Bank, a studyto devise alternativesto handle the flow of water that will be carried by the Ytay and Lambare creeks once upstream improvementsincluded in the Eighth Highway Project are completed. The study would includethe preparationof the engineeringdesigns for the solutionadopted as most desir- able technicallyand economically.

11. The Ytay creek has its source at the Santa Maria development,east of the Mada- ma Lynch section of Asunci6n's ringroad and runs north towards the Paraguay river, a distanceof about 12 km. Roughlytwo kilometersfrom its source the creek is joined by the MadamaLynch canal, whichruns alongsidethe ringroad and which will be considerably improvedunder the EighthHighway Project. Improvementswill also includeabout 400 meters of the creek below this junction and up to the Aviadores del Chaco road where the bridge over the creek will also be improved. These improvementswill considerably increasethe flow of water carried by the creek.

12. The Lambare creek has its source at the YtAYbate development,roughly at the intersection of the Fernando de la Mora and Defensores del Chaco avenues, a place known as Cuatro Mojonesand runs southtowards the Paraguay river, a distanceof about 8 km. Storm water drains from the Cuatro Mojones intersectionto the creek will be improved under the Eighth Highway Project. These improvementswill considerablyin- crease the flow of water carried by the creek.

Obiectives

13. The consultant should study different engineering alternativesto prevent fore- seeablenegative socio-environnental effects, includingthose of floods that the substantial increase in the flow of water of these creeks would bring about. The consultantshould assess which the most viable alternative is from the technical and economic points of view.

Sce of Servi

14. The consultantshall review alternativesto regulate the flow of water on each of the creeks, this should include, inter alia, the following:

A. For the Itay Creek

(a) an analysisof the location and possibledesign of a flow regulatingreservoir to prevent backflowsfrom running into tributaries as well as prevent obstruction of the structures built along the Madame Lynch Avenue canal, and below the Aviadores del - 84- Chaco Ave. particularly at the Salvadordel Mundo street and the Nu Guazd Park area. The reservoirto be located, most probably, in the area between the railroad track and Nu GuazdPark near the entranceto First Army Corps Barracks. Features to be considered would be: (i) a low earthfill dam, most likely to be built using excavationmaterial from the reservoir itself and/or surplus materials from excavation for the works on the Ma- dame Lynch canal and its tributaries; (ii) sodded faces; (iii) control devices, gates, runways; (iv) the crest to be treated to includea bicycle and jogging path which would connect to the bicyclewaybuilt along the ringroad; (v) guardrailsand other devices for user safety; (vi) the design to be blended into the surroundinglandscape.

(b) the cleaning and straighteningof the channel downstreambelow the bridge at the Aviadoresdel Chaco Ave. Features to be consideredwould be: (i) deepeningof some stretches to allowproper drainageof the internationalairport drains and keep them from becomingclogged due to backflowor overtopping;(ii) wideningof narrow stretches; (iii) straighteningof meanders; (iv) reinforcingflood-prone banks, especially in areas adjacentto the airport runways; (v) ancillary works/structures,footbridges, etc.

(c) survey and design to rebuild and/or expand the hydraulic sections to handle the increasedflows generated by new runoff conditionscaused by works on Madame Lynch Avenue, of the following bridges: (i) the railway bridge at Nu GuazlS,(ii) the caballerfabridge at Nu Guazd, (iii) the paseo Nandeyarabridge at Expo, (iv) the calle Aeropuertobridge - Surubii, (v) the paso Damian bridge on the road to Limpio, and (vi) any other bridges as necessary.

(d) landscapingand reforestation. Preparationof areas for parkland, plantingof trees along the banks of the creek, erosion control devices, footpaths, etc.

(e) cadastral surveys. Cadastral surveys, interviews, studies for property appraisal, expropriationcompensation, relocation of residents affected by floods, etc.

B. For the Lambare Creek

(a) cleaning and straighteningof channelto improve the flow downstreamof the Fernandode la Mora Ave. as far as the Paraguayriver. The following features would be considered:(i) deepeningof somestretches to allow for proper drainagefrom adjacent urban areas and prevent overtopping;(ii) wideningof narrow stretches; (iii) straightening of meanders; (iv) reinforcementof flood-pronebanks, especiallyin the vicinityof built- up areas; (v) ancillary works/structures,footbridges, etc.

(b) survey and design of works to expand the hydraulic sections to handle the increasedvolumes of runoff waters causedby works on MadameLynch Avenuenear the wholesale market,for the following bridges: (i) the Primavera bridge, (ii) the Hernan Cortes Avenue bridge, (iii) the 1° de Marzo Avenue bridge, (iv) the Per6n Avenue bridge, and (v) any other bridges as necessary.

(c) landscapingand reforestation. Preparationof areas for parkland, planting of trees along banks of creek, erosion control devices, footpathsfor visitors, etc.

(d) cadastralsurveys. Cadastralsurveys, interviews,studies for property appraisal, expropriationcompensation, relocation of residents affectedby flooding, etc. - 85 - Descriptionof ConsultingServices

15. The designs shall be completedin three stages:

Phase I PreliminarySurveys Phase II LocationSurvey - Final Location Phase III Final Design - Tender Documents

Phase I

16. Before starting the surveys required in this phase, the Consultantshall obtain at least the followinginformation from the Owner: (a) particularsof catchmentareas, based on hydrologicalsurveys of the watercourses,socioeconomic character of the immediate area of influence,and the recommendationsfrom the environmentalimpact assessments; (b) confirmationof the approximatelengths of the creek reaches to be surveyed and design characteristicsbased on the inventory produced in the environmental impact assessments;(c) other significantinformation for the Project.

16.1 Reconnaissanc The followingshall be included:

a. Compilationof basic data in the form of topographicmaps, aerial pho- tographs, satelliteimages, subdivisionplats, road designs in area, hydrologic data, road inventory and any other information relevant to the Project.

b. Preparationof photomaps, mosaics, etc., to identify on maps, at appropriate scale, terminal points and criticalpoints to which Project will need to afford special attention.

c. Stereoscopicexamination of aerial photographsand survey of grade lines on contour maps, and general determinationof the feasible alternatives for the planned works, taking as a basis the recommendationsof the environmentalimpact assessment.

16.2 Site investingaio The followingshall be included:

a. Examinationof the site with persons familiar with the area to obtain informationneeded to determinealternatives for the Project and ascertain any potential legal implicationsvis-a-vis current owners that would be affected by the works.

b. Checking grades and lines establishedtentatively during the reconnais- sance stage, using direct field measurements, particularly on critical stretches.

16.3 Appraisal of altematives and selectionof preferred ontion

a. Estimate the volumes of earthwork from typical sections of planned canal. Estimate also the amounts and size of masonry and drainage structuresand other appurtenantstructures for each altemative proposed.

b. For each alternative,estimate construction,operating, and maintenance costs on the basis of quantitiesneeded for major work items. - 86- c. Using data compiled, assess importantfactors such as site configuration, lengths, geologicalproblems, availabilityof materials, and others relevant to this phase.

d. After due comparisonof findings,select best alternativefrom the technical and economicstandpoint and recommendationof an alternativefor an eventualfinal design.

16.4 Documentationand report The report containing or accompanyingthe documentationon reconnaissancesurveys, appraisalof alternatives,and selection of preferred alternative, must containthe following:

a. Descriptionof the surveyedarea with full detailsrelevant to the different alternatives, and particularlyto the selection of each section surveyed, with sound technicaland economicaljustification.

b. Synopsisof the technical features of each alternative examined, particularly in regard to preliminaryscaling of required hydraulic sections.

c. Quantityand cost estimatesfor each alternative.

d. Sketch of longitudinalprofiles of lines surveyed, using horizontal scale 1:10 000 and vertical scale 1:1 000, showing average grade on canal reaches and location of masonry and drainage structures.

e. Plan view (scale 1: 10 000) showing terminal points of lines surveyed, significantpoints, junctionswith roads, rivers, creeks, etc.

f. Synopsisof the economicconditions of each alternativeexamined.

Phase II - Location Survey. Final Location

17. After the Phase I report has been approved, the Consultantshall conduct field surveys to determine the final location of the alternativechosen as most economic, in accordancewith reconnaissanceplans. Technicalstandards of the RoadsDirectorate and those of the EnvironmentalUnit of the Ministry of Public Works and Communications (MOPC)are to serve as the guidelineor frame of referencefor the topographicsurveys from which will result the ground and contour maps of the project zone, and will also be the guidelinefor the final engineeringdesigns.

17.1 Maintenanceprogram The Consultantshall prepare a detailedmaintenance program for the works on the two creeks, including a routine and a periodic maintenanceprogram.

17.2 Special Studies Concurrent with designing the traverse, the Consultant shallperform detailedstudies of the hydrology,cadastre and properties,drainage, and soils as well as the geotechnicalsurveys. The guidelinesfor this work will be provided by Owner together with the findings and recommendationsof the environmentalimpact assessment. The special Studies will be critical in the location of the center line and will be taken into account in the final design.

17.3 CadastralSurvevs shouldbe done on standardforms designedfor this purpose by the EnvironmentalUnit of the Ministry, so that the informationis as reli- - 87 - able as possible and can then be use later to appraise the property affectedby the Project and to compensateowners whose properties must be bough if necessary.

17.4 Appraisal and compensationstudies for land and buildings are to include plans for the relocation of familiesaffected by the Project.

17.5 Documentationand reports of Phase 11The reports for this phase shall contain:

a. Traverse survey alignmentfield books, includingresults of adjustments and error of closure, locationand measurementsof main bench marks on traverse and location sketchesof culverts and drains.

b. Level books (rise and fall, latitudinal) clearly showing sequence for checkingBM levelling, and errors of closure compared with allowable error as per formulaeestablished for checks.

c. Sketch of longitudinalprofile of center line, to scales: V= 1:200, H =2 000, showingall inflectionpoints in the terrain, and affluentwater- courses. Draw a light line for tentativegrade both for channelbed and bank protection structures.

d. Sketchof cross sections of terrain, scale H = V = 1:200.

e. Plan view of strip surveyed with 2 m contour intervals, scale 1:2 000, showing prominent natural features, buildings within core strip, high- tension lines, cables, intersections,accesses, etc.

f. Report summarizingmethodology used for this phase, clearly settingout commentson solutionsadopted for critical stretchesand specific circumstances noted in special surveys.

g. Other documents required or considereduseful in accordance with the Terms of Reference or otherwiserequested by Owner.

Phase III - Final Design - Tender Documents

18. Once the Phase II report has been approved, the Consultantshall prepare the final designs and the tender documents.

18.1 Final desig The Consultantshall carry out the following tasks:

a. Confirm the center line through observation and analysisof longitudinal and cross-sectionprofiles approved by Owner. Variants in the center line will be permitted if they offer technical and economic advantages over the original line, with due regard to Owner's observationsand rec- ommendationsin Phase II.

b. Plot the grade line of the channel bed and creek bank protection structures in longitudinaland cross-sectionprofile, with due regard to recommendationsof special surveys to minimizeearthwork volumes. - 88 - c. Design and sizing of bridges and culverts and drainage systemfor lateral inlets to main channel. d. Design of appurtenantstructures and ancillary works.

18.2 Ouantitiesand cost estimates When the channel elementshave been designed and sized, the Consultantwill carry out the following tasks: a. Quantityestimates of earthworkneeded, using averageend-area method. Mass diagram not needed for longitudinalbalancing since most earthwork will be cuts, with minimalfills. b. Quantity estimatesfor work items. c. Unit price analysis and determination. d. Constructioncost estimate. e. Constructionwork plan in accordancewith prioritiesset in environmental impact study.

18.3 Topographicplans The Consultantshall prepare the followingdocumenta- tion: a. Contourplans on sheets showing 1.5 km of channelat scale H = 1:2000, followingthe Owner's establishedmodel. The followingto be shown on the plan:

- Graphic representationof center line of channel with mileage - Circular curve elements if necessary - Graphic representationof limits of core strip showing major building structures - Locationof masonryand drainagestructures showingdirection of water flow, skew, and dimensionsof works, and affluent flows to main channel. b. Longitudinalprofiles including:

- Profile of the natural terrain - Graphic representationof channelbed grade and bank top-outs, showing principal elements and flow velocity control devices. - Stake mileage - Ground and grade elevation - Values of channelbed slopes and lengths - Locationof masonryand cross-drainagestructures, particularlyat affluent inlet points. c. Cross-sectionplans on sheetsof the same size as the contour plans, scale H=V= 1:200, with followinginformation:

- Cross-sectionprofile of terrain showing fences - Graphic representationof channelbed grade and bank top-outs, showing slopes, erosion protectiondevices, etc. - 89 - - Stake mileage and ground and grade elevations - Location of masonry and drainage structures, particularly at affluent inlet points. - Areas of cut or fill sectionsto computevolume of earthworksor grad- ing, to within 0.1 in2

d. General Plan referenced to National Map, scale 1:50 000.

e. Special plans/drawingsif necessary.

Final report

19. When the design work is finished, the Consultantshall present a final report (five copies) summarizingall work done, and the findingsobtained during developmentof the project, includingcomments. With the final report, the Consultantshall submit, for the Owner to review and approve, all final documentationon the project, as listed below,:

a. Engineer's report b. Summaryof quantity estimates c. Unit price analysis d. Official project estimate e. Constructionwork plan f. Tender documents including: - Instructionsto Bidders - Generaland Special Conditions - TechnicalSpecifications for ConstructionWork - DraftConstruction Contract g. Contour plans h. Cross-sectionplans i. General plan j. Detail drawings

20. The Owner may, during the courseof the Project, specify any addition,deletion, or modificationof the conditionsof these Terms of Reference, where such action would in its view offer improvementsto help achievethe objectivesset out in the environmental impact assessment.

CompletionSchedule

21. Work shall be completedby the Consultantin 180 days counted from the day the order to commence the work is issued. Reports shall be presented according to the followingtimetable (all times counted from date of the order to commence):

Phase I report: 45 days Phase II report: 120 days Final report: 180 days

Ministry of Public Works and Transport March 1993 a - 91 - ANNEX5

PARAGUAY

EIGHTH HIGHWAYPROJECT

Terms of Referenceto Prepare A TransportationMaster Plan for the City of Asunci6n

Background

1. The Ministryof Public Works and Communications(MOPC), with the financial support of the World Bank, has decidedto carry out a study on how to improve Greater Asunci6n's road accesses includingand identificationof road investments,public transit alternativesand traffic managementmeasures that could help solve congestionproblems that currently exist in and around the Metropolitanarea.

2. MOPC's Planning Office (OPMI)will be the focal point for the study and it and the consultantwill work closelywith the municipalexperts on all aspectsof the metropol- itan area's road network.

3. Asunci6n is a city of 620,000 inhabitantsgrowing at a rate of 1.9 % annually. If the populationof the surroundingmunicipalities is taken into accountthe total population of the metropolitanarea increases to about 1,150,000 inhabitantsgrowing at about 3.3 %.

4. Vehiculartraffic in the area is currentlydifficult; there is peak hour congestion, and during off-peakhours there is an inadequatelevel of service on most main streets and roads. The road system has a limited capacity due to many factors: from inadequately designed and poorly maintained roads and a lack of traffic signs, to crossroads and intersectionsdesigned for much lower volumes of traffic than those using them today.

Objective

5. The study is expectedto offer recommendationswhich will result in an improvement of the present traffic situation and an orderly long-run growth of the road infrastructure. The immediateperiod of analysis would be the 5 years after the completion of the study, and the long term outlook would be twenty years.

6. The results of the investigationsshould lead to the preparation of a short term investmentplan or program, whose effects must be a part of the long term objectives.

7. The short term plan or program shouldidentify the main traffic generatingareas, measuresto regulate traffic (signs, traffic control measures, regulations,education, etc.) and any other elements the consultant may consider adequate to solve the immediate problems detected.

Scope of the Study

8. The study would includethe city of Asunci6n and the municipalitiesof Mariano Roque Alonso, Luque, San Lorenzo, Nemby and San Antonio. However, the area of - 92 - analysis may be enlarged if deemed necessary by findings during the execution of the study, in particular as a result of the origin/destinationsurveys.

9. The study would include, but not be limitedto, the following:

10. Field surveys to assess vehicle traffic volumes on the basic road network. Ori- gin/ destinationsurveys to determine existingtraffic patterns in the area, includingpas- senger surveys of bus and other public transport usage. Short, medium and long-term trafficprojections, including an analysisof the vehicle mixturein traffic and a breakdown of the private vs. public transport use. Time and speed studies to determine prevailing levels of service of the road network and its variation over the years.

11. The surveysshall be carried out taking into accountthat the objective is to assess the traffic streams to, from and within the belt definedby the metropolitanarea of Asun- ci6n.

12. The present infrastructure will be studied based on available cartography and aerial photography,complemented by land reconnaissanceas necessary. The basic road networkto be studiedwill be defined togetherwith MOPCand the surroundingmunicipal govermments,and will be followed by a systematicinventory of this network. Based on such inventory, the field reconnaissanceand the traffic studies, improvementswill be suggested. The possiblelocation of a system of ringroadsor beltways, skirting the area and connectingthe municipalitiesin the metropolitanarea shouldbe considered. Access routes for freight transportby truck, freight transfer stationsand truck parks, and the best location for freight stations should be identified. Preliminary designs for the roadways and other physical works under considerationincluding possible designs for important intersectionsand freight stationsshould be offered.

13. The potential use of non-motorizedvehicles in the area should be explored. If it appears that there is a potential for NM transport specific recommendationson the subject should be offered, includingsuggestions for segregatingthis traffic and possible location of NM transport routes.

14. In additionto determiningthe traffic demands,research shouldbe done to recommend improvementsto the public passengertransportation system of the area. Alterna- tives to move passengers using public transport should be contemplated(exclusive bus- ways and/or other viable means). The main arteries for public passengerservices would be identified, as well as the best location for inter-citybus terminals.

15. The regulatoryenvironment for passengertransport should be researched, especially with regard to route licensing,service frequency requirementsand price controls. Best internationalpractices in this area shouldbe identifiedand recommendationson what and how to improve to approach those practices should be offered.

16. Accidentprevention should figure importantlyin the reviewand recommendations on measuresto this end should be included,particularly, but not limited to, the design of pedestrian crossings,pedestrian overpasses, and the use of traffic lights.

17. The installationof appropriate traffic control systems shall be analyzed on all arteries that may require them because of their traffic volumes, and recommendations would be expected on the use of pricing mechanismsto discourage use of high traffic density streets by private vehicles and/or for parking. - 93 - 18. Because of the heavy influence of rivers and rainfall drainage on designs and improvements,concurrent with these investigations,a hydrologic and hydraulicstudy of the area shouldbe included. For this purpose (i) informationon the rivers and basins of interest to the area and on rainfall in it would be gathered, (ii) recent drainage projects and/or any other work under preparationthat may have an incidenceon the area would be obtained, (iii) the performanceof works already completed would be evaluated and taken into accountin recommendingactions for the area, (iv) the overall hydrologic performance of all the systems involved and their compatibilitywith the receiving bodies wouldbe assessed, and (v) preliminarycosts of the works associatedwith drainagewould be estimated.

19. The studiesshould pay particularattention to the environmentalconsequences not only of traffic but constructionand operation of the roads. All proposed investments should include an evaluationof their possible environmentalimpact. The evaluations shall pay specialattention to traffic induced effects such as noise, air pollutionand vibra- tion. Improvementsmust be planned taking into account growth in the urban environment, wherever it will take place, and avoid negative effects such as 'barrier effects", restrictions to commercial, residential and/or amusement activities, limitations to the movementof pedestriansand cyclists, etc., whichare normallyproduced by heavy traffic lanes. The proposed designs must also be pleasing from an aesthetic standpoint and agreeableto the eye, not destructiveof the geographicenvironment. Moreover, surface drainage and necessary, if any, protection against erosion must be recommended.

20. Recommendationswould be expectedon how to use prices to control the pollut- ing effects of motor vehicles, to encouragea rationaluse of the road network and incen- tivate the use of public transport within the metropolitanarea.

21. The economicfeasibility of each proposed recommendationmust be analyzed. An economicevaluation shall be made of each individualproject or proposal, as well as for the overallprogram. Ihe practicalstages of the constructionprogram and its timing shouldbe establishedbased on the economicreturn of each proposal. Programmingand schedulingthe works shouldalso take into accountbudgetary restrictionsanticipated by the authorities.

Work programmingand reporting

22. The study will be phased as follows:

Phase I : Introductionand diagnosis Phase II: Assessmentand design of short term measures Phase III: Assessmentand design of long term measures

23. An InceptionReport will be produced within three monthsof initiatingthe study and bimonthlyreports would be submittedthereafter to show progress.

24. Three technicalreports shall be produced:

TechnicalReport of Phase I TechnicalReport of Phase II Final Report

25. The Study shall be completedin 18 months.

- 95 - ANNEX 6

PARAGUAY

EIGHTH HIGHWAYPROJECT

Terms of Referencefor the Technical Assistanceto StrengthenMOPC's Organization

Background

1. The Ministryof PublicWorks and Communications(MOPC) has decidedto hire, with the financial support of the World Bank, consultantsto carry out a management assessmentof the ministry, with the view to identifyingways and means of raising the effectivenessand efficiencyof the ministry's overall organizationalperformance.

2. The objectivesof the ministryare to build the most economicroad and highway network for the country in the most cost-effectivemanner possible, and to maintainthat network in optimalcondition at a minimumcost. The proposed study is aimedat identi- fying managementinterventions that would help to improve the effectivenessof the organizationin achievingthose objectives.

3. Technicalassistance to improveperformance in micro-managementactivities (accounting, internal auditing, management of own funds, investment management and follow-up,purchases, etc.) at the Administrationand Finance UnderSecretariathas been going on for some time, and procedural manuals to improve the execution of these activitieshave been produced by a consultant. Work has been extendedto the Public Works UnderSecretariatand will be followedby similar micro-managementreviews and assessmentsin the Transport, and the Mines and Energy UnderSecretariats.

Objectives

4. The purpose of the study is to design improved macro-managementmethods to help the Ministry discharge its responsibilitiesin a more effective and cost efficient manner, taking into accountthe strategic alternativesavailable to the ministryto accom- plish its objectives.

5. The study is expected,inter alia, to set in motiona process to improve coordination in the developmentof policy guidelines, strategic plans (includinghighways and other modal plans), economicplanning parameters, technicalguidelines, and administrative processes and procedures;and to improvecoordination and team-workin implementing directivesand carrying out the ministry's tasks. If necessary,the studywould recommend the establishmentof new structures and systems.

Scope of the Study

6. The consultantshould critically review and analyze current managementprocedures and their resulting operationaleffectiveness, and collect all necessaryinformation, includingperformance and other surveys and an in-depthreview of the staff and staffing constraintsfaced by the ministry, to allow the preparationof a detailed diagnosisof the current performanceof the ministry. Based on the diagnosisand on his experiencethe consultantwould prepare a set of recommendations. - 96 - 7. The consultant's recommendationswould be followed by a period of active consultationbetween the consultantand the client, particularlytop and mid-level managers, during which alternative interventionswould be examinedand discussed, including the consultant's recommendations. The consultantwould documentthe results of this interactionfor the client's top management. As a result of this interactionand the feed- back process, the consultantwould develop a plan of action to improve the ministry's performance. The consultantwould document in detail the plan of action and prepare proceduralmanuals on how to implementit. He would also assist the client in its initial implementationand assessmentof initial results.

B. If agreed upon, the consultantwould return for a second phase of the study to reassessperformance under the plan of action, to feedbackobservations and recommendations to the client and, if necessary, revise the plan of action.

Work Schedule and Reporting

9. The office of the UnderSecretaryAdministration and Finance assistedby a Com- mitteeof top and mid-levelmanagers, will be the executingagent for the study, and will coordinatethe consultant's activities.

10. The study would be carried out in two phases, the second contingenton agreement being reached between the governmentthe Bank to extend the study to a second phase.

11. The first Dhas would comprise the review and assessmentof current practices, preparationof the consultant'sdiagnosis and recommendations,the discussionand exami- nation of alternatives,the developmentof the plan of action, its initial implementation and the preliminary assessmentof results.

12. The secondi has , if agreed upon, would comprise a revisit by the consultant which would include an evaluationof results, feeding back his assessmentto the client, discussingimplementation experience and, if necessary, reviewing and reorienting the plan of action.

13. Phase One is expectedto take six months. Phase Two, if carried out, three months.

14. An InceptionReport would be submittedby the consultantone month after the start of the study. In three months the consultantwould submit his Diagnosisand Rec- ommendations. This would be followed,within a month of the submissionof the Diag- nosis and Recommendations,by a report on the Plan of Action and the Manualson how to implement it. On completionof phase one the consultant would submit his initial assessmentof results.

15. Within a month of initiatingphase two the consultantwould prepare an Evalua- tion Report and on completionof phase two a final report wouldbe submitted,including any further recommendationsthe consultantmay wish to make. - 97 -

ANNEX7 PARAGUAY

EIGHTH HIGHWAYPROJECT

StrengtheningMOPC's EnvironmentalUnit

Background

1. MOPCestablished recently an EnvironmentalUnit to accompanythe development of highway projects, and prepare when necessary environmentalimpact assessments (EIAs) for the projects the ministry finances. The Unit is adequately staffed but the group is young in age and inexperiencedand lacks professionalexposure; in additionthe Unit needs to be properly equipped. With financingincluded in two recent IDB projects the Unit is being provided with a vehicle, office, computerand other equipment,as well as salary supplementsto keep someof the staff employedby the Unit full time; all geared to satisfy the environmentalassessment and monitoringneeds imposed by IDB's own projects.

Objecive

2. The proposedproject intends to provide some additionaltraining and, in particular, professionalexposure to the staff. In addition, the project would provide help to the Unit to raise the level of environmentalawareness, not only within the ministry but also among other agenciesclosely related to MOPC's activities.

Scope of the assistance

(a) EnvironmentalExposure

3. The proposed projectwould financeregistration fees, travel and subsistencecosts for Unit staff to attend professionalconferences and workshopson environmentalassessment and impactevaluation, outside Paraguay. These conferencesand workshopswould last from a few days to perhaps a week and may be preferably within the Latin America region but also abroad. A total of ten such conference attendancesare expectedto be sponsored.

4. The average cost of each attendanceis estimatedto be about US$3,000for a total cost of this item of US$30,000.

(b) Training

5. The proposed project would finance two scholarships for Unit staff to attend longer residentialcourses at any of a numberof academicinstitutions such as the Nation- al Universityof Popayan in Colombiawhere a formal course on environmentalmanage- ment of roads and road constructionis offered, or at the Inter-americanCenter for Inte- grated Developmentof Land and Water (CIDIAT)where intensivecourses on environmental assessmentare offered.

6. The scholarshipswould includepayment of tuition, transport and subsistenceand are estimatedto cost about US$15,000each, for a total cost of this item of US$30,000. - 98 - (c) EnvironmentalAwareness and Dissemination

7. The proposed project would includefinancial assistancefor the Unit to organize two workshopscum seminars on environmentalaspects (i) of highways and road transport, and (ii) of ports and river transport.

8. The objective of these workshops would be to familiarize top and middle-level managersof the ministryand of other agenciesrelated to MOPC's activities (municipalities in particular) with environmentalmatters including EIA. The workshops would include a general introductionto environmentalaspects in the project cycle (as in the framework of the Bank's OperationalDirective 4.01: EnvironmentalAssessment), they would deal with the social, institutionaland the properly environmentalaspects of the dilemmagenerically called environmentalproblem. The workshopswould also deal with issues associatedwith land rights, involuntaryresettlement the evaluationand quantifica- tion of alternatives,development of mitigatingmeasures and environmentalsustainability.

9. The intendedtarget group for the seminarswould includeMOPC's other directorates, in particularthe VillageRoads directorate, other ministries, in particular agriculture, indian agencies(INDI), consultantsand NGOs.

10. The Bank would assist with technical material: the EnvironmentalAssessment SourceBook, operationaldirectives, Environmental Aspects of Land Transport Construc- tion and Maintenance, and overall logisticalsupport. The Project would finance the participation of reputable consultants to act as resource persons at the workshops (it would pay fees, travel and subsistencecosts), in additionto the cost of physical facilities and accommodation,and other materials and logistic support as necessary.

11. The workshopsare estimatedto cost aboutUS$20,000 each for a total cost of this item of US$40,000. - 99 - ANNEX 8 PARAGUAY EIGHTH HIGHWAYPROJECT

Strengtheningthe Planning and Projects Department of the Directorate of Highways

Backffound

1. During project preparationDH's Departmentof Planningand Projects (DPP) was furnishedwith engineeringdrafting software (AUTOCAD)to familiarize the staff in the departmentwith modernengineering design techniques and to help them review engineering designs prepared by consultants. Althoughconsultants (from the US Federal High- way Administration)went to Paraguay and trained some of the Department's engineers in the basic used of the softwarepackage, and one of them visitedthe US-FHWAto learn more about the multiple potentialsof this tool, the DPP is far from knowledgeableon computer-assisteddesigns.

2. AUTOCADis a computer-assisteddrafting system that has to be interfacedwith other engineeringsoftware (such as that producedby DCA, a US engineeringcompany) to become a useful design tool. Other software packages (for instance, ROADCAD developed by Sito of Finland) are more complete and self contained computer-assisted engineeringdesign systems for planning and designinghighways, streets, railways and other traffic arteries. The packages are usually linked forward with compatiblemodels to design bridges, and backwardto appropriatedata collectionand storingtechniques for geotechnical,survey and map information.

3. The packagesare usually composedof three modules:the input module, the data base and the output module. Required inputs are normallydigitized data on photogram- metry, surveys, soil tests, laboratorytests, and other geotechnicalinformation. The data base is then manipulatedwith a specially designed user interface model which accepts predefineddesign parameters and allows assembling,editing, managing,listing, plotting, viewing and filing the manipulateddata or computer-assisteddesign. The output module permits obtaining longitudinalsections, cross sections, maps, geometrical information, perspectivepictures of the design, and bills of quantities for contractinguse.

Objective

4. The purpose of the assistanceincluded in the project is to train a small group of MOPC-DPPengineers in the use of computer-assisteddesign techniques,at least to the level where they can effectivelysupervise the work done by consultants. - 100 - Scope of the Assistance

5. The proposedproject would financeregistration fees, travel and subsistencecosts for DPP staff to attend training courses on the subject, most likely in Florida, USA wherea specializedinstitute exists. The project would also financehiring expert consultants (most likely US-FHWApersonnel) to help DPP become conversantwith the tech- nology. Also included would be the purchasing of linkable and computer hardware compatibleengineering software.

6. The proposed training, associatedhiring of consultantsand software would cost no more than US$100,000. - 101 -

ANNEX 9 PARAGUAY

EIGHTH HIGHWAYPROJECT

Terms of Referenceto Prepare and Implement The NationalMotor VehicleRegistry

1. Introduction

1.1 For some time the Transportation Undersecretariatof the Ministry of Public Works and Communications(MOPC) has been intendingto take steps to create an effective control over the property and licensingof vehicles.

1.2 Implementingsuch a system would make it possible to maintain a statistical record of all vehicles, allow to effectivelycollect registration and other fees that could be appliedto road improvementswhich, in turn, would improve traffic safety, and there is also the intentionto eliminatethe use of illegal circulationpermits such as those issued to vehicles in bordering countries.

1.3 An efficientcontrol will require a computerizedsystem of informationto permit consultationfrom differentpoints of the country.

1.4 A proposed law is currentlybeing processedin Congresswhich will establishthe nationalvehicle registry in the country, and will establishthe dates for all vehicles to be registered with the new system.

2. Objectives

2.1 The project is to establish a computerized National Motor Vehicle Registry (RNA), operated centrally and by the municipalities. The system would be run through a computerizedsystems of data input, storage and retrieval of informationon vehicles, owners and drivers, that can be consultedby the agenciesduly authorizedto that effect.

3. Main activitiesof the project

3.1 Survey of the present system of motor vehicles/owners/driversregistration. It would consistof the following:

- Visits/Interviewswith persons acquainted with the present system of vehicle control. - Becomingfamiliar with informationpresently handled in that area.

3.2 Functionalanalysis of existingapplications. It would consist of the following:

- Detectingfailures in the present system. - Meetingwith politicians and responsibleofficials in the Ministryto determine the scope of the project. - Visits/Interviewswith persons familiar with the present system in order to define the ideal model to satisfy local needs. - Preparationof the proposed solution (preliminarydraft) - 102 - 3.3 Training of paraguayantechnicians. It would consist of the following:

Carry out the necessary training to adjust the transfer of knowledge between the to the Paraguayanteams. Training Paraguayanofficers in DevelopmentMethodology, Functional Analysis, Data Analysis, ProgrammingLanguages to be defined, Open Systems,Servers Controller.

3.4 Preparationof the logical project. It would consistof the following:

- Gather detailed informationon the solution agreed in Activity II, based on the DevelopmentMethodology which is the object of Activity III. - Define the architectureof the whole system and the type to be initially establishedin the project. - Apply techniquesto treat the informationconverted into data base. - Define the informationfor Data Input/Output - Define the organizationalprocedures of the project. - Define the specificdocuments (registrationcertificate, fines, documents for paymentof property tax on vehicles, etc.)

3.5 Specificationof data processingeauipment. It would consist of the following:

Define the size of the required equipment(hardware and software))for the developmentand executionof the project.

3.6 Developmentof the physical proiect. It would consist of the following:

- Definition of forms for data input. - Specification,coding and testing of the programs. - Preparationand printing of the operatingmanuals and those for the users. - Creation of the environmentfor the development,tests and production of the equipment. - Definitionof the report and forms for data output.

3.7 General simulationof the project. It would consistof the following:

- Link the programs making up the system. - Simulatethe executionof the project with real data. - Evaluate its performance in terms of time required to answer consultations. - Verify the operative capacityof the project.

3.8 Preparation of a geographic location map to establish the proiect. It would consist of the following:

Prepare strategiesto establish/advertisethe system. Administrative improvements. - 103 - 3.9 Nationalawareness on the use of the project. It would consist of the following:

- Use of the media (television,newspapers) to make people aware of the project applicationaccording to the adopted strategy .

3.10 Implementationof administrativeroutines. It would consist of the following:

- Administrativeimprovements of the agenciesresponsible for the flow of project information.

3.11 New registration of the national fleet/owners/drivers. It would consist of the following:

- New registration of all vehicles circulating in Paraguay and of their owners. - New registrationof all vehicle drivers. - Supervisethe executionof the project during the first 6 months, making the necessary adjustments.

3.12 General project administration. It would consistof the following:

Permanenttechnical and administrativesupport of all activities. General project monitoringthrough the establishmentof control points.

Viability- of the required administrativemeasures for the correct performance of the project.

4. Remarks

4.1 In planningthe project, it mustbe consideredthat local staff -4 top level systems analysts and 4 mid level technicians(programmers)- will be permanentlyassigned to the project. They will later be responsiblefor the system.

4.2 The estimatedlength of the project is two years, tentativelydivided in the following manner: * Development 16 months * Establishment 2 months * New registrationof the fleet 6 months

5. Indicationsabout the equiRment

5.1 Selection of equipmentwill be done in stage 5 of the project (see 4.5 above). However, the Ministry of Public Works and Communicationsis working today with an IBM AS/400 unit and the technical staff is qualified in its use. Perhaps, though, at the time of selecting the equipment, thought should be given to the possibilityof an open architecture (servers with terminals in local networks), this being the world trend, in additionto having lower acquisitioncosts. It is importantto point out that this architecture is being adopted by the Ministry of Finance and that a standardtype of architecture and software should be maintainedat governmentlevel. The Ministry of Finance uses the UNIX operational systemand the ORACLE data base controller. - 104- The equipmentshould contemplatethe installationof a central computer in the MOPC to which approximately 15 local terminals will be connected, plus another about 15 remoteterminals (in the principalDepartments), through modems and multiplexors. The communicationstechnology must also be defined: point to point linkage, dialed line, microwaves, radio hookup, etc.

Initially the use of the remote linkage system would be only for consultations,inclu- sions/alterationsto be made by means of diskettes because there is not much reliability on the remote linkages currently available. - 105 -

ANNEX 10 PARAGUAY

EIGHTH HIGHWAYPROJECT

Paraguayanand Bank ProcurementPractices

Background

1. In May 1990, the Bank's legal staff surveyedParaguay's procurementlegislation. A summaryof their findings is below (section A). In January 1992, a review was done of Paraguayanprocurement practices. Many discrepanciesbetween local law and Bank procedures were identified. They are listed below (sectionB).

2. Project missionshave discussed with DH and the Comptroller General of the Nation (CGN) the need to adapt bidding documentsto Bank practice not only for use in the proposed project, but becausethey are the result of many years of proven successful practice aroundthe world. The missionwas assured that this would be done and that the Bank's samplebidding documentswould be used. Accordingto the ComptrollerGeneral followingBank practice posed no problemprovided that the Loan Agreementcontain specific mention of each item, for the procurementof civil works, goods, and/or services, on whichthe SampleBidding Documents differ from Paraguayanlegislation, as was done in the SENASAproject. The Loan Agreement, accordingto the CGN, prevails over local legislation.

3. At appraisalthe itemslisted in section B below were reviewedagain with DH and CGN, and spanishtranslations of the Bank'gSample Bidding Documents, sample consultant's contract, and sample prequalificationdocuments were provided to MOPC and the CGN. MOPCwas advisedthat use of the Bank standardbidding documentswas mandatory after May 1, 1993 and that corresponding and equivalent documents for use in Paraguay would have to be prepared prior to negotiationsfor the proposed loan.

A. Compendiumof ParaguayanProcurement Legislation

4. AdministrativeOrganization Law of June 22. 1909

(a) Art. 192. Regimefor acquisitionsand works. It calls for public bidding for all purchasesof goods and worksfor the governmentaladministration. Minor items, deserted bids, and urgent purchases are exempted.

(b) Art. 204. Requires as a conditionof eligibilitythat a bidder be 'previously recognizedas eligible by the administration".

5. Decree No. 14161of December13. 1921. Establishesprocedures for the acquisition of goods and for the executionof works by force-account("administraciOn").

6. Decree No. 33789 of June 22. 1929. Establishes that the procurementof goods and works by the administrationrequire prior review of the ComptrollerGeneral (Contra- lorfa). - 106- 7. Decree No. 3119 of July 23. 1936. Forbids governmentalagencies ("r.arti ciones p.Sblica") from purchasing directly from suppliers without the prior consent of the Ministryof Finance.

8. Decree 20203 of February 7. 1940. Forbids public agencies from considering bids submittedafter the bid closing date.

9. Decree 2973 of March 20. 1944. Authorizesministers to approve bidding documents and contractingconditions for their respectiveMinistries.

10. Decree No. 35635 of September20, 1982. Requires the central administration and decentralizedagencies, to use public bidding proceduresapproved by the executive, to procure goods and services financed from internal or external sources. Except one purchase per type per fiscal year below G/.500,000.

11. ResolutionNo. 117 of January 15. 1983. Requires:

(a) pre-qualificationof bidders;

(b) that central governmentagencies, autonomous entities, autarchic entities and mixedenterprises utilizingeither their own funds or domesticor international financing, contract feasibility studies, project designs, and works supervision in compliancewith decree 28482 of September22, 1972. The decree requires that all feasibility studies, engineeringand architecturalprojects, works and works supervision of an official and private nature, be carried out by local enterprises either on their own or in associationwith foreign partners.

12. Decree No. 9319 of October20. 1941. Creates a Registry of Bidders for Public Works.

B. Discrepanciesbetween the local law and Bank ICB procedures

13. (a) Foreign firms are forced to enter into joint ventures with local firms for carrying out civil works (40% minimum participation of local firms), supply and erection of electromechanicalequipment (20% minimum participation),and consultingservices (30% minimumparticipation).

(b) All consultingservices must be procured from 1QSI registered firms through a form of LCB.

(c) There are no bid evaluationcriteria, and the conceptof "lowestevaluated bid' is not provided for. Law 1045states that the lowest bid should be awardedthe contract as long as it is responsive. Yet, the law also allows awarding contracts to the second lowest bidder as long as the price is within 3% of the lowest bid.

(d) Prior registrationof bidders is required. - 107 - (e) Price adjustmentsfor materials are allowed only when changes of more than 15% have occurred.

(f) Hiring of consultantsis treated in exactly the same manner as that of contractors (i.e. by public bids). However, direct contractingof technicalconsul- tants is allowed.

(g) Three bids are required to award a contract.

(h) The followingare usually treated in a manner unsatisfactoryto the Bank: (1) site visits are mandatory;(2) bids are submittedin two or three enve- lopes that separateout requirementsand items; (3) bid, and payment cur- rencies are not treated appropriately.

14. LCB bidding documentslack specificityon evaluationcriteria and do not use the concept of the "lowest evaluatedbid," and they do not provide for the participationof foreign bidders.

15. Althoughapproved previously by the Bank ICB biddingdocuments used in Bank projects"6 contain unsatisfactorytreatment of certain items. An effort to follow Bank requirementsis evident; yet, the documentscontain the followingunacceptable items:

(a) only joint ventures of two or more firms are allowed to bid;

(b) two or three envelopesthat are opened simultaneouslyare required;

(d) documents submitted by foreign bidders must be protocolized by the Paraguayan consul in the foreign country and the Ministry of Foreign Affairs;

(e) bid evaluationcriteria were vague;

(f) all labor, except managers and some technical staff, has to be Paraguayan;

(g) bid and payment currency are inconsistentlyspecified and not in agreement with Bank guidelines;

(h) the price adjustmentformula for local costs was incorrect, and the price adjustmentformula for foreign costs was left up to the bidder; and

(i) all cement has to be of local origin.

16/ For instance, those for works in MOPC's ICB No. 3 of September 1991, Loan 2087-PA, for the CaminoTroncal de Todo Tiempo, Desarrollo Rural Caazapa. - 108 - C. SpecialProvision to be Included in the Loan Documents

16. In view of the above discrepanciesand the treatmentof items in a manner contra- dictory to Bank practice, the followingspecial provision should be stated explicitlyin the loan documents,that:

(a) foreign consultantsor contractors should not be required to enter into joint venture agreementswith local consultantsor contractorsas a condition for submittingproposals or bids, neither should they be required to register prior to bidding;

(b) foreign consultantsor contractorsshould not be required to legalize their proposals or bidding documentsand supportingdocuments either at Para- guayan consulatesor the Ministry of Foreign Affairs as a condition for proposing or bidding;

(c) no minimumnumber of bidders shouldbe necessary for competitivebids to take place, and no minimum number of responsive bids should be required to award a contract;

(d) contractsshould be awarded to the lowest evaluatedbid;

(e) contract prices should be adjustable according to the yearly change in prices during the life of the contract, regardless of the amount of the change;

(f) contractorsshall be free to procure materials and labor necessaryto carry out the contract accordingto their best judgment and not necessarilyin the local market or from local suppliers; and,

(g) foreign biddersshall be allowedto participateon an equal footingin local competitivebids. - 109-

ANNEX I1 PARAGUAY

EIGHTH HIGHWAYPROJECT

EnvironmentalImpact Assessment

1. PROJECTDESCRIPTION

1.1 The Eighth Highway Project includes the construction, rehabilitation and/or improvementof the (i) Paraguarf-ItA-Guarambar&-Ypanl-Nemby-CuatroMojones, (ii) Cuatro Mojones-MadameLynch- Junction to Route 9, and a. Limpio-Emboscadaroad sections. The project is designedto address severe congestionproblems, pedestrianand vehicle safety, and road capacity problems.

1.2 The proposed works traverses urban, suburban, semi-rural and rural areas and have different design characteristics.The followingtable summarizesthe nature of the proposed improvementsand of the surroundingareas.

SECTION SUBSECTION PROPOSED WORK AREA CATEGORY

Pareguarf-Iti-Ypan0- Paraguarf-lti Reinforeement of existing Rural except municipalities fRemby-CustroMojo- road traversed

Ita-Ytoror6 New road. Rural

Ytororb-hemby Improvement of existing Semi-rural to semi-urban road

Remby-Cuatro Mojones Widening to 4 lanes Suburban to urban

Cuatro Mojones-Ma- CuatroMojones-Eu- Widening to 4 lanes, via- Urban dane Lynch-Junction sebio Ayala ducts Route 9 Eusebio Ayala-Av. Widening to 4 lanes, recon- Santa Terem utction of Mmne.Lynch drainage canal,bicycle path

Santa Terem-Aviadores Widening to 4 lanes recon- del Chaco struction of Mme.Lynch drainage canal, bicycle path

Aviadores del Chaco- Widening to 4 lanes, bicy- Junction Route 9 clepath

Uirpio-Emboacada Linpio- Embosceda Paving of existing road Urban within the municipalities at both ends, 50% of section in between erni- rural, rest is rural

1.3 The roadworksin the project will substantiallyincrease the traffic capacityof the roads and its consequentpedestrian and vehicular dangers, its effects on the natural and social environmentand increasepollution. However they will also encouragelocal and regional economicactivity, particularlyby facilitating accessto the city and its services, improve access to the ports for exports, improve accessibilityto the wholesale market located along the ringroad, and to Asuncion'sbus terminal located near Cuatro Mojones. - 110 -

Traffic from and to the country's western and southern regions and to Argentina will considerably improve. Most importantlytraffic in and around the city will improve considerably,commuting times will be shortened and traffic overall will be made more reliable.

2. BASE LINE

Natural environment

2.1 The study area is situatedwithin the followinglimits: North: 250 04', South: 25° 40', East: 570 02', and West: the Paraguay River.

Physical environment

Geologyand geomorphology

2.2 The area's belongsto the Ordovician-Silurian,Cretaceous, Tertiary and Quaterna- ry periods, with some Pre-Cambrianoutcroppings. The Ordovician-Silurianformations are the sandstones of Paraguarf, Cerro JhLI,Eusebio Ayala, Cariy and the micaceous leucites of Vargas Pefla. The Cretaceousformations are the intrusive alkaline rocks of Sapucai and the conglomeratesof Patifho. The Tertiary formationis the so-calledNem- by, made up of basic intrusiverocks. The Quaternary formationconsists of sandstones accumulatedin the area influencedby the Paraguay River and its tributaries. The Pre- Cambriangranite outcrops constitutethe area's crystalline base.

2.3 The area's geomorphologyis generallythe result of subsidenceand upthrust, as well as folding with stepped faults running chiefly NW-SE and subsequentsedimentary deposits.

Climate

2.4 The averageannual temperatureis 22.5°C., with the highest and lowest on record being 42°C and 0°C. Average annualrainfall is 1,400 mm with rainy summers and drier winters. Average annual potential evapotranspirationis 1,200 mm (accordingto Thorn- thwaite, for the period 1951-80). Average annual surface run-off, for the same period, is 400 mm. The humidityindex (accordingto Thornthwaite)is 20, which represents the cross-over from subhumidto humid. Prevailingwinds are S-SW.

Hydrography

2.5 The area belongs to the watershedof the left bank of the Paraguay River, on the sub-basinof Lake Ypacaraf, one of the region's most importantin terms of capacity and characteristics. The area's predominanthydrographic system is of the dendritic and meandrotic type, with hydrological regimes much altered by intensive urbanization associated with human settlement. Some cases involve considerablesedimentation and others severe erosion. The area's most importantwatershed is that of the Salado River, followed by the CaafAab6Creek watershed. Both empty into the Paraguay River. The remaining creeks all belong to small watersheds whose waters flow directly into the Paraguay River.

2.6 Pollutionby variousagents, amongthem industrialand residentialwaste discharg- es, and the spreadof agriculturalcontaminants have left watercoursesbiologically degrad- ed. - 111 - Biologicalenvironment

2.7 The area supportsa bioenvironmentof the thermo-mesophytetype, consistingof trees growing in stands and irregular and heterogeneousgroups which alternate with clearings and meadows and cultivated fields. The woods are transitional between the formations of the Central Forest (eastern region) and the flood plain of the Paraguay River (westernregion).

2.8 The types of natural communitiespresent in the area are lagoons, swamps, tide- lands, semicaducifoliatewoods (averageand low), savannas,rivers, streams and headwa- ters. The area's flora and fauna are much the same as those of the Chaco. Specific habitats such as extensivewetlands and lagoons harbor many aquatic species.

Human environment

Paraguarf-Ita

2.9 Semi-rural,tending to urban. Includes the culturallyhistoric (colonial and post- colonial)towns of Yaguar6nand Paraguarf. The constructionwill not affect properties physically,but it does not attempt to correct present trouble spots that endanger life and property such as the curves at kms 43 and 50-51 and the Yaguard bridge. The risk of accidents at these curves is high, with an expected average rate of 1.5 accidents per month.

2.10 Surveysof the populationindicate that 72% live in their own properties, 1% on leased property and 23% are occupiers of someoneelse's property. Of 145 properties surveyed, 80% are used as dwellings, 1% as commercialbusinesses, 11% as combined dwellingsand commercialbusinesses, 1% have industrialuse and 5% have agricultural use. 'Te occupationalstructure of heads of householdshows that 37 % engage in agricultural activity, 4% in brick-making,4% in trade, 1% in industry, 41% in personal services and 14% in miscellaneousindependent activities.

2.11 A total of 73% of properties have electric power, 7% have generators and 18% have alternativesources. 15% have public water supply, 63% have wells and 21% rely on other sources of water. There is no public sewer system. 95% of properties are equipped with septic tanks, pit latrines or sanitary latrines.

2.12 The populationdoes not show oppositionto the project; only 4% states that it would not be willing to amicably negotiate a settlementfor the property that is taken from them. A fair compensationis expectedby 43%; of these, 11% voice a desire to obtain another property in the area, 6% would leave voluntarily if paid, while 25% would stay on their property.

Ita - Ytoror6

2.13 The Ita - Ypane section of the road is rural in the Ypane - Ytoror6 section is semi-rural. The rural sector has low populationdensity and few basic services. Some large and medium-sizedproperties coexist with small agriculturalplots. The large and medium-sizedoperations are generallydairies and brick factories. Brick manufacturing is an importantsources of work and incomefor the people of the area. The new segment will mainly affect small properties, whose dwellers will have to be relocated. - 112 -

Ytororo - Nemby

2.14 This is a mostly urban section with low populationand structuraldensity. How- ever, the few empty spacescurrently available are in process of urbanizationwith a trend towards higher density settlements. Three properties are affected with three houses in them, also the Ytoror6 NationalPark wouldbe affected. The section has some accident- prone spots, one of which is the bridge over the Ytoror6 creek. Land-useis urban except for a ranch and the Ytoror6 National Park, this includes miscellaneous commercial businesses69% of properties;industries 5%; services, 3%; and educational,religious and recreational institutions 1 %; unused structures are 13% of properties and unfinished structures 4%.

Nemby - Cuatro Mojones

2.15 The section, includingthe town of Nemby, is mostly urban. The latter is densely populatedand merges into Asunci6n. The project will affect 26 properties, 25 of them residential and a soccer field. Indirectly it would affect another 13 properties which would now be farther away from the main route (11 commercialbusinesses, one ware- house and one petrol station).

2.16 The population affected sees the project as necessary, because of the current dangersof accidentson the road. This sector and the one from Paf Rd to the edge of the Coca Cola factory are critically congested as traffic ties up and accidents occur on two bridges built on curves. Most of the 26 properties affected are part of a neighborhood with slum-likefeatures but a social cohesivenessthat will be disruptedby the new road.

Cuatro Mojones - Junction Rte.9

2.17 This is the ringroad section of the project. It is fully urbanized, and the project would directly impact988 frontage properties of which 29% will be physicallyaffected by the new road-line. 61% of all properties affectedproperties (directly and indirectly) and 57% of all frontage properties are used for commercialactivities. Of theses activities, 72 % are businessesof which the Asuncidnwholesale market as the largest. Unused and idle properties accountfor 10% of the total, and 30% are rented out.

2.18 Dwellingsare 46% of the properties affected. Of these, 54% are occupied by their owners and 30% by tenants, the remaining 16% are occupiedby family members, caretakers,or simplyoccupants. Of the dwellingunits, 60% have brick walls, 94% have tile roofs and 78% have a calcareousfloor.

2.19 There is electricityin 97% of the propertiesand 51 % have running water. There is no public sewerage system in the area. Waste water disposal is available in 17% of the properties. the remaining 83 % disposesof sewage by dumping it into the adjoining canal and onto the road.

2.20 Of the populationaffected, 77% believesthe area has serious environmentprob- lems. 55% of the populationhas lived in the area for more than five years, and 13% were born there. Of those living there less than five years, 58% are tenants, 22.5% of whom have been in there for less than a year. These figures reflect a highly mobile population,especially among the tenant group. Average family size is 3.5 persons, 4.5 for non-owners. - 113 - 2.21 24% of the dwellings have two bedrooms and the average number of residents per unit is 3.9, which shows there is no overcrowdingin the area. 9% of household heads have higher academiceducation, 16% have mid-leveleducation and 75% havejust basic education.

2.22 The socio-communalprofile of the area is that of a configurationof neighbor- hoods whose populations interact with adjoining municipalities. The lack of public hygiene in the sectors adjoiningthe creek may be indicativeof a lack of identification with the locale, with resulting aggression against the environment. The population acceptsthe road constructionas beneficialand agrees with the project design; however, they would want safeguardsfor the safety of pedestrians and cyclists (walkways, bicycle paths) and to ease access to crowdedareas like the wholesalemarket and the East Ceme- tery. The taking of properties under eminent domain is understood and there is little resistanceto negotiatingwith MOPCand movingout of the area if necessary.Only 10% of affectedhousehold heads say they would not move, 69% of them are owners. Affect- ed individualsmosdy just want a fair price for the propertytaken. Of those responding, 4% state that they would leave the area on their own account, 65% of these respondents are owners.

2.23 The engineeringdesign of the section was found to have the followingtechnical and social shortcomings:(i) inadequateprovisions to facilitatesafe vehicular and pedestrian movements,and (ii) the bicyclepath was not connectedto the final and usual destina- tion of cyclists,

2.24 The populationof the area was generally ill informedon how their interests were being safeguarded. The fact that 20% to 70% of the properties will be affected and hence acquiredwill require many people to relocate, this most declared to be willingto do voluntary.

Limpio - Emboscada

2.25 The section varies in terms of physical and geographic features, population density, basic services and land use. There is a definitelyurban portion of the section, a suburban, a semi-rural and a rural portion of its, with the latter two predominating. The urban portions are at the two extremesof the section, the semi-ruralportions, most of what is in betweenthe two extremes,are small concentrationsof people. Few services are available to the inhabitantsof the area, and land use is predominantlyresidential. They constitutefrontage and linear 'islands of settlement"surrounded by cattle raising ranches.

2.26 The rural portionsof the sectionsare thinly populatedwith little constructionand have few or no services. Extensivecattle raising properties predominate. A total of 23 properties will be affected, and then only in the town of Emboscada. Of these, two are frontage properties on the current road in the town center, and twenty-oneare properties located in the area of a new city by-pass. In this area there is a school, which would front the road and exposed studentsto exhaust emissionsand traffic hazards.

2.27 Of the 23 properties affected, 83% are owner-occupied,9% are leased and 8% are otherwise occupied. Of the properties affected, 65% have dwellingsin them, 22% are combineddwellings and businesses,and 13% are unused. Public water supplyserves 78% of the properties, electric power 74%, and sanitary waste removal 81%. There is no public seweragesystem. - 114- 2.28 Of householdheads 39% have mid-levelacademic training and 61% basic school- ing. Averagefamily size is 4.5 persons.

2.29 The population accepts the project, 96% believe it will have positive effects. 43% would amicably settle a fair compensationfor the properties taken, but 9% of resident owners say they would rather receive an equivalentproperty outside the area in compensation. However, if compensatedin cash no affecteewould leave the area. 26% would remain on their property if that property is not totally expropriated.This attitude is an indicationof how attached residents feel to their property.

2.30 The project would change the characterof the town of Emboscadafrom a "quiet and traditionalvillage" into a "dormitorytown."

3. EVALUATIONOF ENVIRONMENTALAND SOCIALIMPACTS

Methodology

3.1 A Leopold matrix type of analysiswas taken as the working foundation. It was adaptedon the basis of the methodologicalguidelines prepared by the Ministry of Public Works and Urban Developmentof Spain (General Directorate of Environment)and of the EnvironmentalAssessment Sourcebook of the World Bank. The overall evaluation done was a first level, or macroevaluation,to locate the work in the general context of the resources, uses and activitiesof the areas of impact.

3.2 The methodologyemployed consisted of the followingsuccessive steps:

(a) Identificationof the principal current actions (withoutthe project) and those derived from the project (during and after its implementation);

(b) Identificationand characterizationof the principal conditionsof the medium susceptibleto modificationby the previous actions, based on three sets of conditions: physical, bio-ecologicaland socio-econo-cultural;

(c) Identificationof the crossing points in a base matrix, i.e., of the concrete conditions - from among all those possible - in which each action would have potential measurableimpacts, whatever they might be;

(d) Determinationof the possible magnitudeof the modifications, in matrices section by section, on the basis of a scale from -5 to +5 (from "very high negative magnitude"to "very high positivemagnitude," the intermediatevalues being graduated as follows: high (4), moderate (3), light (2) and very light (1). Zero signifies "nonexistenceof crossing point," i.e., the action has no impact on the condition;

(e) Determinationof the overall self-weightedaverage impactsby the weight of each set of conditionsof the average in each highway section, conductedin the same matrices as previously indicated;

(f) Analysisof the averageoverall impacts,at the level of each section, identify- ing the incrementalimpacts in the presence of the project as compared with the current situation; - 115 - (g) Identificationof the set of conditionsof the setting most impactedpositively in each section, with the project as a given, and a list of the principal actions that contribute that type of impact;

(h) Determinationof at least two sets of conditionsof the setting that are most impacted negatively in each section - with the project as a given - in order to incorporatethe MitigationPlan into them;

(i) Determination,within each group of conditionsof the setting identifiedin the previous item, of those actions of the project that produce the most important negative impacts, in order to design measures for mitigatingthem;

0) Description of the negative impactsby importance, likelihood,time period, duration and type of alterations caused to the physical, biological and human environment;

(k) Rankingof impactsaccording to likelihood,time at which they would begin to occur, importanceand duration;

(1) Identificationof mitigationmeasures, section by section and impact by impact, accordingto the conditionof the settingaffected and the componentof the project giving rise to them.

3.3 The matrices were prepared for relatively homogeneoussections of the roads. This led to, for example, subdividingthe ItA - Nemby section in order to separate the portion of new road constructionfrom that on which only reconstructionwould be done. The followingsections were used:

(A) Paraguarf - Ita (rural section of the southern access road to Asunci6n)

(B) ItA- Ytoror6 (a new section of the southern access to Asunci6n)

(D) Nemby- Cuatro Mojones (a rural-suburbansection of southern access)

(E) Cuatro Mojones - Junction Rte.9 (an urban section)

(F) Limpio - Emboscada(a rural section of northern access to Asunci6n)

3.4 The main report contains a summary of characteristicsby section accordingto conditionsat the present time, duringproject implementation(including the preoperation- al phases) and after project completion.

Overall assessment - Results

3.5 Matrices were prepared section by section, for the current situation(prior to the project) and for the situationfollowing the project (operationalphase), as they appear in the main report. For the purpose of comparingthe two situations(before and after the project), the incrementalvalues of the impacts were determined for each set of conditions, in order to evaluate how the project improvesor worsens the situationoverall. A summarywas prepared by extractingthe most striking conclusions:these are summarized in the followingdiscussion and table on the followingpage. - 116-

Section A Paraguarf - Ita

3.6 Seventy-fivepossible impacts of the project on environmentalconditions were identified. Sixty-onepercent of the impactswere socio-econo-cultural,25% physical and 13% as bio-ecological. The current (no project) situation shows a negative overall situation: slightly negativein terms of physical conditionsand very slightly so in terms of bio-ecologicalconditions. The situationwith the project shows a very slight decreases in the negative impactson the physical and socio-econo-culturalconditions. The overall effect of the project on the socio-environmentalconditions is neutral, as a number of harmful environmentaleffects of the current situationare being removedby the project. The actual overall effect may even turn out to be very slightly positive (a score of + 1).

Average Envitonmental Impact Before andAflter the Project Incremental Impact of the Project on Each Environmental Condition

Condition

Road Sec- Physical Envi- Bio-Ecologic Socio-Economic- Total tion ronment Environment Culturl Environ- Scote mont

Cros-over points A 19 10 46 75 B 20 25 50 95 C 19 10 39 68 D 19 12 42 73 E 20 15 62 97 F 19 24 43 S6

Average Impact A -2 -I 0 -I Before the Pro- B 0 0 0 0 ject C -I -1 0 -I D -I -1 0 -1 E -2 -I -I -1 F -2 -1 0 -1

Averge Impact A -1 -1 + I 0 After the Project B -3 -3 0 -1 C -1 -1 0 -I D -2 -3 0 -1 E -3 -3 0 -I F -2 -3 + I -1

Incremental Im- A +1 0 +I +I pact B -3 -3 0 -I C 0 0 0 0 D -I -2 0 0 E -1 -2 +1 +1 F 0 -2 +1 +2

Source: Fomgro-Pareic, matrices in Appendix 4 of EnvironmentalImpact Study

Section B Ita - Ytorord

3.7 Ninety-fivepossible impacts were identified,53% of them were socio-economic- cultural, 26% bio-ecologicaland 21% physical in nature. The current (no project) situationis neutral across the board, for the simple reason that the road does not exist. The situation with the project shows moderately negative physical and bio-ecological impacts.In the socio-econo-culturalfield positiveand negativeimpacts cancel each other out, bringing about an overall neutral result. All in all, the project as planned may have a very slightly negativetotal impact (-1). - 117 -

Section C Ytororo - Nemby

3.8 Sixty-eight possible impacts were identified, 57% of them were socio-econo- cultural, 28% physical and 15% bio-ecological. This section is the one with the least varied impacts. The current (no project)situation shows a very slightlynegative situation overall, of a physical and bio-ecologicalnature. The situationwith the project does not show significantlyincreased negative impacts. Overall, negativesand positives cancel each other out with a very slightly negative (-1) general impact.

Section D Nemby-CuatroMojones

3.9 Seventy-threepossible impacts were identifiedalong this section, 58% of them socio-economic-cultural,26% physical and 16% bio-ecological. The current (no project) overall situation is very slightly negative primarily in the physical and bio-ecological areas. The situation with the project would slight improve the bio-ecologicalsituation and very slight improvethe physical aspects. The with projectcondition would otherwise be neutral, with negativeand positiveimpacts canceling each other out as in the previous road section. The overall impact of the project may be very slightly negative (-1).

Section E Cuatro Mojones - Junction Rte.9

3.10 Ninety-sevenpossible impacts were identified, 64% were socio-econo-cultural, 21% physical and 15% bio-ecological.This section has the highest number of cross-over points in the matrix, i.e., impactsof human activitieson the environment. The overall current (no project) situationis slightlyto very slightlynegative across the board. This assessmentobviously does not take into account the original alterations created by the occupationof the area, which is now over. The situationwith the project would become slight worse bio-ecologicallyand very slight worse physically. The project is shown not to worsen the socio-econo-culturalsituation (positive and negative impacts offset each other). The overall impact of the project may be very slightlynegative (-1).

Section F Limpio - Emboscada

3.11 Eighty-sixpossible impacts were identified,50% were socio-econo-cultural,28% bio-ecologicaland 22% physical. The current (no project) situation shows is slightly negative,basically of a physicaland bio-ecologicalnature. The project would deteriorate the negative bio-ecologicalsituation only. There would be no physical effect, and the socio-econo-culturalimpacts would be very slightly positive. The overall effect of the project may be very slightlynegative.

4. LEGAL FRAMEWORK

General framework

4.1 The country has no specificexpropriation law, but various provisionsembodied in a number of statutes frame the conceptof "socialinterest," "publicinterest" or "social usefulness," thus providing a basis for expropriatingland on eminent domain grounds. Similarly, agreements between parties are thus legislated, including mechanisms for acquiringland for public interest reasons either amicablyor in cases when this approach fails to materialize.

4.2 Article 109 of the Constitutionis the main provision in this area. Of recent enactment(1992), it did not supersededolder laws but calls for their reinterpretation, - 118 - which in some cases would entail the enactmentof supplementaryrules. The following overview groups the existingjurisprudence under the headings of general, special and enforcementlaws.

General provisions

4.3 These are in the Constitution,the AdministrativeLaw, the Civil Code, the Rural Code and Law 40/54 partially amending it. Analysis of the constitutionalprovisions indicatesthat private property is guaranteed and can be taken only by judicial order or by expropriation;expropriations have to be compensatedprior to the taking of possession by the expropriator; and the compensationmust be agreed upon by the parties or else determinedby judicial adjudication.

4.4 The AdministrativeLaw sets out the conditionsgoverning acquisitions and expropriations (Art. 222). These provisionsare supplementedby those in the Civil Code with respect to the rules for purchase and sale, ownership, fair compensation,the expropriated party's right of appeal and related matters. The Rural Code as amendedby Law 40/54 explicitly refers to expropriationsfor the purpose of carrying out road projects. The Constitutionrepeals several provisionsof the Rural Code as they reflect new thinkingand changingtimes.

Special provisions

4.5 There are special provisionon the subject of land acquisitionsand/or expropriation in the MunicipalOrganic Law, in Law 75/69 which redefined the Directorate of Roads, in the Forestry Law 422/73, as well as in the Corposana, ANDE, Railroad, IBR and Agrarian Laws.

4.6 The MunicipalOrganic Law regulatesthe expropriationof buildingsintended for urban developmentprojects. This law also establishesrelevant administrative procedures. The NationalDirectorate of Roads Law of 1968, as amendedby Law 75/69, empowers the directorateto occupy, and/or authorizethe occupationof propertiesdeclared of social need, and empowers the Ministry of Works to expropriatethe lands. The provision, however, can only be exercisedafter compensationhas been determined and paid.

4.7 The CORPOSANA(244/54), ANDE (966/64), Railroads (1079/64), IBR (852/) and Agrarian (854/63)laws contain provisionspertaining to expropriationand generally set the rules relevant thereto.

Enforcement provisions

4.8 Decrees 10.025/60,14.171/52, 18.000/66 and 19.983/56,Resolution 253/75, and Decree-Law288/61 provide the following elements: (i) they define "social utility" and permit the expropriationof lands and plots for road construction; (ii) they authorize MOPCto occupy and take possessionof landsexpropriated; (iii) they require the drawing up of a plat and obligate owners to submit their deeds to determine the value of their property; (iv) they allow the expropriatorto use forestry resources. However, many of the elementscontained in these laws are not applicabletoday without further interpreta- tion, because the new Constitutionhas cast a differentlight on them. Moreover, Decree 14.171 and Resolution253 has imposed further limits on owners' rights over property which, though not expropriated, is contiguousto roads. - 119 - Sequence of expropriation procedures

4.9 A draft bill " Bill on the Expropriationof the Ringroad" is attached to the main environmentalreport. It was drafted to indicate the tenor of the enabling legislation necessaryto expropriatethe lands and plots necessary for this project.

4.10 In the annex to this report is a flow chart of administrativeprocedures which, accordingto current legislation,must be followedto expropriatelands and plots.

5. MITIGATIONPLAN

Methodology

5.1 The elementsof the mitigationplan were establishedfrom comparingthe project's positiveand negativeimpacts and identifyingwhich project activitiesand actionsgenerat- ed those impacts. Positive impactswill flow as soon as the new roads are opened and they will impactprincipally the socio-economic-culturalsituation in the project area. The relevant matrices show no less than 90% of the total positive impactsfor each section to fall within that area. Negative impactswere analyzed in terms of:

(a) Type of damageor alteration; (b) Extent of the impact, defined as minor, moderate or major; (c) Probabilityof the event occurringdefined as certain, probable or improbable; (d) Duration of the impact, defined as temporary or permanent; and (e) When the impact would begin defined as short-term, medium-termor long- term.

General mitigatory measures

5.2 A section-by-sectionmitigation plan was prepared for the project based on the above considerationsand findings. The plan was conceivedwith the followingin mind, that: (i) preventiveor corrective measuresare establishedin order to lessen the negative impacts, and in some cases to strengthenthe positiveones; (ii) the preventive or corrective measuresare incorporatedin the final designof the project, scaling and redesigning the works accordingly;and (iii) in order to optimize costs and benefits, the plan is tai- lored to the importance, magnitude,likelihood, and duration of the impacts.

5.3 Mitigatorymeasures of a global character, intendedto be implementedmainly during the constructionstage and which were not aimedat specificissues on specificroad sectionswere developedas modificationsto the General EnvironmentalSpecifications and are described in detail in the annex of the main report. Mitigatorymeasures of a specific character linked to specificsections of the project are detailed in Chapter V Section 3 of the main report and are described below in the form of actions to be taken accordingto chronogramthat starts with the initiationof the constructionworks. - 120 - SECTIONA Paraguarf-ItA

5.4 The project is scheduledfor completionin 30 months,five semesters. Mitigatory measures, semester by semester would includethe following:

3rd. semester Introduce erosion control measures at points on section where risk is highest, as work progress dictates, deepen the section of the Yaguaron and Paranambdcreeks 300 meters on both sides of the projectbridge, and clean the canal periodically;

4th. semester Enlarge and improve the area in front of the Church of Yaguar6n to provide visitor parking; regulate the size and placementof commercial billboardsand company signs at formal and informalshopping areas and adequatelysignal the presence of shoppingareas; install a raised median 20 cm high and 1.5 meters wide from one end to the other of the city of Yaguar6n;

5th. semester Post warningsigns at black spots alongthe road and install rumble strips at entry and exit of all urban areas; determine areas on which vending stalls will not be allowed near the road; install rumble strips at regular intervals all along the shoulder; install signs and rumble strips in each direction of the road 100 m to the entrance to the Church of Yaguardn; install a safety barrier at the curve by the Church of Yaguar6n; build shelters at publictransport stops; restore and maintaingreen cover on the slopes of embankments;install lighting along the section of road passing through the town of Yaguar6n;

6th. semester Post signs at bus stops; post signs indicating the beginning and end of urban and suburban areas, speed limits and the town's most important public services; make vehicle exhaust emissions and noise subject to control by the highway police; restore green cover in areas with active erosion; clean drains until replanting takes hold at run-off points;

SECTION B Itg - Ytoror6

5.5 The constructionproject is scheduledfor completionin 30 months, five semesters. Mitigationmeasures and their implementationschedules are given below:

1st. semester Re-surveyall properties along the existingroads 500 meters on each side of the line to adjust the proposed line to existingproperty limits and keep it along existingroads and thus minimizebreaking-up farms and dwellings; process at the earliest opportunitythe appraisalof lands to be acquired and/or expropriated,to minimizethe uncertaintiescreated by the procedures; identifythe familiesthat may have to be relocated and make availableto them: (i) informationon alternativeproperties in and outside the area throughan agreementbetween MOPCand the municipalitiesand between MOPCand IBR; (ii) assistancewith institutionshandling requests for housingunder MOPC's agreementswith CONAVIand with grassroots organizations;(iii) informationon assistancefrom institutionsoffering job training under a MOPC-SNPPagreement; (iv) 50% financingof moving costs (agreementinvolving MOPC and agencies); regulate that woods of any type to be felled as a result of the road constructionin the corridor shall be confined strictly to the width of the right of way mini- - 121 - mizing alterations to the surrounding areas; cut and stack any timber extracted for use by the expropriated owners, as a marginal form of compensation;during the earth-movingperiod engage the services of an archaeologistthrough the Directorateof CulturalProperty (with expertise in historical areas of the War of 1870);

2nd. semester Signpostthe access to the Ytoror6 HistoricalMonument and the Ytorord Country Club recreationalarea;

3rd. semester Containthe run-off and erosionat downhillintersections with local roads;

4th. semester Place wire fencing, paid for by the project, at the boundarybetween the right of way and properties;

5th. semester Replant unpaved portions of the corridor with a gradient of more than 5%, or where cuts and fills are built; where embankmentsare built or cuts more than 100 m long are made, replant with trees and shrubs that will help to partially restore the environmentand diminish the barrier effect on the fauna; plant trees in the vicinity of recreation areas;

6th. semester Make vehicle exhaustemissions and noise subject to control by the highway police.

SECTION C Ytororo - Nemby

5.6 The constructionperiod is scheduledfor 30 months, five semesters. Mitigation measuresand their implementationschedules are given below:

1st. semester Proceed quickly with the appraisalof lands and properties to be acquired or expropriated to expedite the process and minimize the uncertainty created by it; identifythe families that may have to relocated and assist them through a unit specificallycreated for that purpose under MOPC- CONAVIagreements (MOPC and agenciesincluded in an agreementwith MOPC); identifyparking areas, designbus shelters, place signs at pedestrian crossingsand vehicularturns;

4th. semester Install erosion control devices where risk are high;

5th. semester Restore and maintaingreen cover on the slopes of embankments;install a raised median0.20 meters high and 1.5 meters wide from one end to the other of the town of Nembyand at least 100 m alongthe access to the port of San Antonio; post signs at bus stops;

6th. semester Make vehicle exhaust emissionsand noise subject to control by the highway police; plant trees along the sections of the route passing through populatedareas and create small, dense stands at the edge of the corridor, especially at the Nemby entrance and exit; post signs at black spots and install rumble strips on the access to Nembyand at the intersectionof the road to San Antonio; determine areas at which vending stalls will be banned; regulate the size, frequency and placementof commercialsigns and billboards; signpost the presence of shopping areas; install lighting along the section of road passing through the town of Nemby and on the accesses to San Antonio; install rumble strips at regular distances all - 122 - along the shoulder; post signs to alert drivers to their presence in an urban area and indicating speed limits and the town's most important public services.

SECTION D Nemby - Cuatro Mojones

5.7 The constructionproject is scheduledfor completion in 30 months, five semesters. Mitigationmeasures and their implementationschedules are given below:

1st. semester Identify parking areas, design bus shelters, locate pedestrian crossings and vehicularturns; in accordancewith the register of properties affected by the road, proceed promptly with the appraisal of land and dwellings in them, to minimizethe uncertaintycreated by the process; identify the familiesthat may have to be relocated because and advise them of assistance providedthem through the MOPC-CONAVIdesks and tell them of the help and informationon alternativeproperties available through the MOPC-Municipalities,MOPC-IBR, MOPC-CONAVI and MOPC-grassroots desks;

2nd. semester Install wire fencing, paid for by the project, at the boundary betweenthe right of way and properties;

4th. semester Install erosioncontrol devices where risks are high along the route, especiallyat points with a gradientof more than 5%, consistentwith progress in construction; regulate size, frequency and placementof commercial signs and billboards;

5th. semester Install raised median0.20 meters high and 1.5 meters wide from one end to the other of the town of Nemby and at least 100 m along the intersections with built-up residential areas; install lighting along the section of road passing through the town of Nemby; define and signpostbus stops; install rumble strips at regular distances all along the shoulder; restore green cover in areas showingsigns of active erosion; clean drains at run- off points showing signs of active erosion until replanting is completed; restore and maintain grass cover on the slopes of embankments;widen the median strip between lanes in oppositedirections to 1.5 meters, and providepedestrian crossings at intersectionsand a hedgegrowbarrier with speciesno higher than 1.2 meters; plant trees on sections passingthrough populatedareas and create small, dense stands at the edge of the right of way, especiallyat the entranceand exit of the town of Nemby;plant trees of mediumheight on both sides of the road at the edge of the right of way alternatingwith tall shrubs that tolerate shade; install rumble strips at the Nemby town limits; define areas in which vending stalls will be allowed;

6th. semester Make vehicle exhaustemissions and noise subject to control by the highway police; - 123 - SECTIONE Cuatro Mojones - Junction Rte.9

5.8 The project is scheduled for completionin 36 months, six semesters. Mitigation measures and their implementationschedule is given below:

1st. semester Appraise promptly land and dwellings; expropriate all of the property when the owner claimsnot to be able to remain in his residenceor carry out his normal activities in what would remains of his property after partial expropriation; finance 50% of the moving costs for relocatees; expeditethe expropriationprocess and provide relocationassistance; keep those affected informed of the necessary formalities, the nature of the project and assistance available through MOPC's special desk; identify the familiesthat may have to relocated and make the followingavailable to them: (i) informationon alternativeproperties in and outside the area by implementingthe agreementbetween MOPC and the municipalities; (ii) assistance with institutions handling requests for housing under MOPC's agreementswith CONAVI and with grassroots organizations; and (iii) informationand assistancefrom institutionsoffering job training under the MOPC-SNPPagreement; properties that would be demolished and those at risk should be identifiedand evaluatedby the Directorate of Cultural Property of MEC, to determine whether they possess historical or cultural value that would justify their preservationor rescue; conduct an environmentalimpact assessmentof the effects of dischargingrunoff waters on the Ytay and Lambare creeks;

5th. semester Plant trees of medium height on both sides of the route at the right of way, alternatingtall shrubs that tolerate shade, this would absorb and reflect part of the vehicularemissions; plant shrubs no taller than 1.20 m at appropriate points of the median; design and conduct an educational campaignon road safety;

6th. semester Installsigns to educatethe publicon urban environmentalgood manners; make vehicle exhaust emissionsand noise subject to control by the highway police; maintain the creek beds to ensure low levels of solid-waste deposits.

SECTION F Limpio - Emboscada

5.9 Constructionis scheduledfor completionin 24 months, four semesters). Mitiga- tory measures and their implementationschedules are given below:

1st. semester Regulate the felling of trees and restrict it to the right of way, enforce minimizingthe disturbanceto adjoiningareas; expeditethe expropriation process and minimizethe uncertainty created by it; review and redesign if necessary the drainage system in low-lying wetlands crossed by embankments,replacing tubular drainpipes with trapezoidalsection pipes;

3rd. semester Install erosion control devices where risks are high; install wire fencing, paid for by the project, at the boundaryof the right of way and neigh- boring properties;

4th. semester Where embankmentsare built or cuts of more than 100 m are made, replant with species of trees and shrubs that will help to partially restore - 124 - the environmentthis will diminishthe barrier effecton fauna and prevent erosion; install signs to educate and alert the public on ecosystemsand fauna protection; restore and maintain the grass cover on the slopes of embankments;replant areas along the road where the gradient is more than 5%, or where cut and fill is done; restore plant cover in areas with active erosion; clean drains periodicallyuntil replanting is completed.

6. FOLLOW-UPPLAN

6.1 The objectiveof the follow-upplan is to establishthe operationaland institutional mechanismsto monitor the implementationof the mitigationplan. It is proposed to monitor certain parameters and to follow-upwith the institutionscharged with applying the mitigatorymeasures.

6.2 The parametersto be monitoredwere selected based on the types of mitigatory measures proposed and for their ease of measurement. The periodic measurementsor evaluationswill, with regard to physical and bio-ecologicalconditions, be conductedin the corridor and its immediateimpact area. With regard to socio-econo-culturalconditions they will be conductedin a wider area (which will have to be defined for each road section when the monitoringprogram is scheduled in detail). Accordingly, they have been grouped in parameters connectedto both major group of conditionsof the socio- environmentalsetting.

Parameters selected

6.3 Physical and bio-ecological:

Turbidityof run-off waters Number of active erosion points and their size Blockageof drainage structures (monitor servicing) Design of drainage structures Clearing (ensurethat it is carried out in accordancewith the guidelinescovering implementationand the handlingand disposal of materialremoved) Replantingat critical points (design, implementationand maintenance) Plantingof trees and shrubs (design, implementationand maintenance)

6.4 Socio-econo-cultural:

Rules governingcommercial advertising (monitortheir drafting, enactment and enforcement) Constructionof engineeringworks included as mitigationmeasures (separators, screens, lighting,washboard paving, parking areas, signs, fences, barriers, retain- ing walls, etc.), and monitoring of their incorporationinto the design, their constructionand their actual operationunder the conditionsfor which they are designed Vehicleexhaust (monitorcontrol by highwaypolice, and draft, enact and enforce standards) Stops and vending sites (draw up and enforce rules governing them) Registry, appraisal, expropriationformalities and relocation assistance (monitor their schedulingand implementation) Eliminationand handling of constructionwaste (monitorimplementation) Correction and adjustment of road layout with respect to section B (monitor design and implementation) - 125 -

Implementation of follow-up

6.5 These parameters will be followed on each of the road sections in the project, with the intensityand frequency appropriateto their relative importance. Each measure will be implementedas scheduled in the mitigationplan. The agency for follow-upwill be the EnvironmentalUnit of the Ministry of Works and Communicationswith the assistanceof other departments,especially for purposes of monitoringcontractors. - 126 -

PRIMERA ETAPA IL II.O.P.C. SOLICITA AL CODGRESO IA LZY NECEAIA

N.O.P.C. _LAMOS DESCUtIPTUOS PROY CSO UJIAL _ l IWIEIISPNroy¶ PROFESIOLES ------IIACTO NOLEMTALCATASThO iFprgpiaclonr_ de dominlo Todo lo nricosoro para Priva,o, Urbanoo y Raraloe. dete raner con uxactitud la co1 a quo ha de _ DlSCODE liMlERIA o,cpt 1arwoo

LECISLADOR El n.O.P.C. goatlon - traw_ del ?oder Ejoatl antO el Congroo la Lay flocomat.a.

DECLARACIO#4 DE CAMIINO |ACIOIAL.

LEY _ |xtorizacboi Callfbcacion.

Autourtza a un poder So Id stirie a del Estado a actuar Indi bduab ba el M. 0. P. C. an tal on..bdn. bamasbleo bwushtona a exproplar.

EL r.o.F.c REaLIZA LATASAACION SEGUNDA ETAPA V LANO TIFCACIOA PROPlEOARN EAL

M O.P. P C.NI O A

s = ~~~~~~HAsiDOAuiJORIZADO POR EL UJEaJTIVO PARA DEROPIAR

DEPARTIteIElTO DE AUAZU10 PRLrD IOS URBOMO

2 ;~~ ~ ~ ~~~~~~~--- ASESOR;IA UICA RESOLUCI0N WCr l-- | ~~~~~~~~~DEL"Iti ISTERIO | P ONSU DELZC^DO 0 StJ DELEGADO

PROP IXTAR10 itu;&o dn propiidad del Ib;-u MOTIICACION ADIiNISTRATIUA Inxcrito on el Rogl-tro C-noral Tle*pa colacionada a au de la Propiodad. Aoleilbo tP.opledad oibjto C.probanta do I.pueet &I di.. Ao expropiacban).(DIA ). Cortificado de libr- gxra-an. o libr- disponibliAd. FProala tIbnicipal de "IfIcaclon, on caso do Inbumbles.

L SE PRXSZTA |O St PRESET A

ITERCERA ETAPA - 127 -

TERCERA ETAPA - NE--OCH!?KAC ION So of rta avaluo O icial Al proplot rlo. pwjlaa . '

De CO AaJuno NO HAYCOU RW Ac_up o_ _ _eta No acapta of ta O SE PRESDTA

| ItNISMI DE ::I~E |JP^d Ev Notificacion Judicial a! expropiado de la taxacion Pago diracto Pao Indirecto y del plaza para reclaar a l.pugnar la tamcion.

Ndaatizap. NOTIFICA |Pus"e utorls tSIrr | poscoIon Inmdle t - Tasaclon. - Pla*s para Impugnarla. ______-______Conwignacion. St CSRI tURA - Aprcibini.uto. - La trauufdrencla a fator del Eatado dab, *or a trawm del PROPIETARIO Esrmibano mayor del Gobl-rno. RECWL A LA TASACIO#N (Plaza 13 dl&)_

CUTIflICACION FAJDIECIA SE D121I4A PE!-I 1 COIlIEROLEN DISCORDI

(Plaz re sl..

ALZSATOS DE BLMC* PRU1JA (PlazaS Alas)

SALDO0 ELTOTAL 33LA PEIT INOW ~ ~ ~ ~ ~ ~ SENTEVC1^A (Plaa so1 la-)

ALCATO Y OUIISCIOM< H [ RISJL Su eriorl ZXPROPIANTECO"s [GM EL (plazala Alas) AtPELA - (Plaza dia-)| SALWO E1ZTOTOIL DR LA I IPMDIZACION | SENTCIA DE AU (Qlaxo'38d la*) (l&xQ 46 4 lea)

- 129 -

ANNEX 12

PARAGUAY

EIGHTH HIGHWAYPROJECT

SelectedDocuments in the Project File

A. General Material

1. Japanese InternationalCooperation Agency (JICA); National TransportMaster Plan, Interim Report, March 1991

2. Japanese International Cooperation Agency (ICA); National TransportMaster Plan, Draft Final Report, October 1991

3. Japanese InternationalCooperation Agency (JICA); National TransportMaster Plan, Summary, January 1992

4. SAE-CONTEC;Export CorridorsStudy, Vol. 1, 2, 3 and Annex, April 1991, documentNo. 651014 A, B, C

5. SAE-CONTEC;Traffic Study on the NationalRoads, October 1989, Document No. G35508

6. SAE-CONTEC;Study of the Revenuesand Financingof NationalRoads, June 1991

7. Orb and Medina; Diagnosis and Recommendationson Weighing Vehicles and Chargingfor the Use of Roads in Paraguay,September 1991

8. Ministry of Public Works and Communications;National TransportationPlan, 1987-1991, 1988-1992, 1989-1993,1990-1994

9. Ministry of Public Works and Communications;Design Normsfor Rural Roads

10. National Ports and NavigationAdministration; Annual Report, 1990, 1991

11. National Ports and NavigationAdministration; Organization, Tariffs and Other Legal Requirements, 1992

12. NationalPorts and NavigationAdministration; Decree 12499, Port Tariffs, 1992

13. Barbosa-Roca,Carlos; Diagnosis of the Undersecretariatof Administrationand Finance of the Ministry of Public Works and Commnunications,June 1992

14. Republic of Paraguay; Decree Law No.5/91 that establishes the structure and functions of the Ministry of Public Works and Communications,March 1991

15. Republic of Paraguay; Law No. 109/91 amending decree-law No.15/90 that establishesthe structureandfunctions of the Ministry of Finance, January 1992 - 130 - 16. Ministryof PublicWorks and Communications;Budgetary Execution 1985-1992, March 1993.

B. Project SnecificMaterial

1. SAE-CONTEC;Techno-Economic Feasibility Study, San Lorenzo - Paraguart, Final Report, December 1990

2. SAE-CONTEC; Techno-EconomicFeasibility Study, San Lorenzo - Paraguarf includingSouth Access to Asunci6n, Final Report, July 1991

3. SAE-CONTEC; Techno-Economic Feasibility Study, Limpio - Emboscada - Ar- royo y Esteros - Tacuara,Final Report, June 1991

4. SAE-CONTEC;Techno-Economic Feasibility Study, South Access to Asunci6n, CuatroMojones - JunctionRt.1, Final Report, June 1991

5. FORAGRO-PARELC;Techno-Economic Feasibility Study, Cuatro Mojones - MadameLynch Ave. - Junction Rt.9, Final Report and Annexes, June 1992

6. FORAGRO-PARELC;Estudio del Impacto Amblental del Tramo: Praguart - Yaguar6n -ltd - Guarambare - Ypane -Aemby - Cuatro Mojones - Empalme Rta.9 - Llmpio - Emboscada, Resumen Ejecutivo, Informe Final, Anexos, Planos, Mayo 1993. - 131 - Chart 1

| OPCBINISTER

LEGAL- SERYENA

UNDIRSECTY UNDERSECTRY UNDERSECTRY UNDERSECTRY PUELC UORXS TRANSPORT ADBINISTRATN NINE CnnUNIC. &FINANCE &ENERGY

DIRECTOR D1RtCTOR DIRECTOR DIRECTOR RU8C.UXHGEERAL_ .8 PLANNINGCONOnDI IESOURDESNER6Y

DiECOR D RECTOR DIRETOI

?DIRECOR DIRECTR DIRECTOR

DIECOR DIIECCOOS

_ ERERAL_ R4F IC 4~REUCES!6_OT DIRECTOR DIIECPOI DIRECTOR

DIRE¢TOR, I~~~~DIRECTORI

TOURISM L...FL

AP, . '', 4 MOJONES- DEFENSORESDEL CHACO - 0 / t~~ oo 8_dMADAME o OOwo LYNCH - ROUTE 9

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P A R A G U A Y b \ i X . / EIGHTH HIGHWAY PROJECT

PIIOJECT, tEAWLITATE.RR. FRDTI EXIST..G, SEE INSE

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