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World Bank Document Document of The World Bank t*lE OPY FOR OFFICIAL USE ONLY Public Disclosure Authorized ReportNo. 3388b-PAN STAFF APPRAISAL REPORT Public Disclosure Authorized ROAD REHABILITATIONPROJECT PANAMA Public Disclosure Authorized May 21, 1981 Public Disclosure Authorized Projects Department Latin America and the CaribbeanRegional Office This documenthas a restricteddistribution and may be used by recipientsonly in the performanceof their official duties. Its contentsmay not otherwisebe disclosed withoutWorld Bank authorization. Currency Equivalents Currency Unit = Balboa US$1.00 = B/. 1.00 Fiscal Year January 1 - December 31 System of Weights and Measures: Metric 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) 2 = 0.62 mile (mi) 1 square kilometer (km ) = 0.386 square mile (sq mi) 1 metric ton (ton) = 1.1 US short ton (sh ton) Abbreviations and Acronyms AADT - Annual Average Daily Traffic AASHTO - American Association of State Highway Transportation Officials APN - National Port Authority (Autoridad Portuaria Nacional) BNP - National Bank of Panama (Banco Nacional de Panama) CLCR - Chiriqui Land Company Railway COPA - Panamanian Aviation Co. (Compania Panamena de Aviacion, S.A.) CPA - Directorate of Pan-American Highway of Engineering within MOP DAC - Direccion de Aeronautica Civil (Civil Aviation Authority) DDI - Directorate of Design and Inspection within MOP DET - Directorate of Equipment and Workshops within MOP DI - Directorate of Fixed Plant within MOP DMV - Directorate of Highway Maintenance within MOP DPE - Directorate of Special Projects within MOP DTLT - Directorate of Transit and Land Transport within MOP DV - Directorate of Valorization within MOP HDM - Highway Design and Maintenance ICB - International Competitive Bidding IDB - Inter-American Development Bank IGN - National Geographic Institute within MOP ILO - International Labor Organization LCB - Local Competitive Bidding MIPPE - Ministry of Planning and Economic Policy (Ministerio de Planificacion y Politica Economica) MOP - Ministry of Public Works (Ministerio de Obras Publicas) NTS - National Transport Survey ORP - Price Regulation Office PCR - Panama Canal Railway Ro-Ro - Roll-on/Roll-off SENAFORP - Servicio Nacional de Formacion Profesional UNDP - United Nations Development Program VOC - Vehicle Operating Cost vpd - Vehicles per day FOR OFFICIALUSE ONLY STAFF APPRAISAL REPORT ROAD REHABILITATION PROJECT PANAMA TABLE OF CONTENTS Page No. I. THE TRANSPORT SECTOR ...................................... 1 A. General . ............................................... B. The Transport System .................................. 1 C. Sectoral Coordination, Planning, Financing and Regulation .......................................... 4 LI. ROAD TRANSPORT ............................................ 5 A. General ........... .................................... 5 B. Characteristics and Growth of Road Traffic .... ........ 5 C. Operation and Organization of the Industry .... ........ 6 D. Regulations of Weights and Dimensions .... ............. 7 II. THE ROAD SUBSECTOR ........................................ 8 A. The Network ........................................... 8 B. Administration ........................................ 9 C. Planning .............................................. 10 D. Financing ............................................. 11 E. Engineering ........................................... 11 F. Construction ............... 12 C. Maintenance ........................................... 12 H. Workshops and Equipment Maintenance ................... 13 I. Training .............................................. 14 IV. PAST AND ONGOING BANK ASSISTANCE FOR ROADS .... ............. 15 A. General ............................................... 15 B. Ongoing Highway Maintenance Project ................... 15 V. THE PROJECT ............................................... 17 A. Objectives and General Description .................... 17 B. MOP's Maintenance and Rehabilitation Program (1981-1985) 17 C. The Project's Road Rehabilitation Program .... ......... 19 D. Upgrading of Maintenance Capacity under the Project ... 21 This report is based on the findings of an appraisal mission which visited Panama during December 1980. The mission comprised Messrs. W. Matthey (Engineer), Martin Staab (Economist) and A. Byl (Economist). The report has been edited by Miss V. R. Foster. 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. TABLE OF CONTENTS (Continued) Page No. V. THE PROJECT (Continued) E. Technical Assistance for Transport Planning .... ......... 22 F. Cost Estimates, Financing and Disbursement .... .......... 23 G. Execution, Procurement and Monitoring ................... 25 H. Project Risks ........................................... 26 VI. ECONOMIC EVALUATION ......................................... 27 A. Formulation of the Program .............................. 27 B. Traffic ................................................. 28 C. Benefits ................................................ 28 D. Economic Return and Sensitivity ......................... 29 E. Benefit Distribution .................................... 29 VII. AGREEMENTS REACHED AND RECOMMENDATION ....................... 30 TABLES 1.1 Domestic and International Freight Traffic by Mode in Selected years, 1967-1980 ............................. 32 1.2 Passenger Traffic by Mode in Selected Years, 1967-1980 .. 33 1.3 International Port Traffic in Selected Years, 1970-1980.. 34 1.4 Public Investment Expenditures in the Transport Sector, 1970-1980 ............................................. 35 1.5 Transport Investment Budget, 1981, and List of Possible Transport Projects, 1981-1985 ......................... 36 2.1 Road Traffic on Sample Links ............................ 37 2.2 Consumption of Petroleum Products ....................... 38 2.3 Vehicle Imports and Vehicle Fleet 1960-1980 .... ......... 39 2.4 Road Vehicle Operating Costs ............................ 40 3.1 Past and Projected Development of the Highway Network, 1969-1985 ............................................. 41 3.2 Financing of Road Investments 1970-1980 .... .............42 3.3 Road Expenditures and Receipts, 1974-1985, Selected Years ........................................ 43 3.4 MOP Highway Design Standards ............................ 44 5.1 MOP Five-Year Physical Road Maintenance and Rehabilitation Program, 1981-1985 ..................... 45 5.2 Projected Expenditures for Maintenance and Rehabilitation Program 1981-1985 ..................................... 46 5.3 Roads to be Rehabilitated during First, Second and Third Phases of Project ..................................... 47-49 5.4 List of New Equipment and Spare Parts to be Procured .... 50 5.5 Implementation Schedule ................................. 51 - 11ll - TABLE OF CONTENTS (Continued) Page No. ANNEXES 1. Completed Bank-Financed Highway Projects .... .......... 52 2. Outline of Proposed Technical Assistance .... .......... 53 3. Selected Documents and Data Available in the Project File ....................................... 56 CHARTS World Bank 22582 - MOP Organization ...... ................. 57 World Bank 22583 - Proposed DET Organization .... .......... 58 MAP IBRD 15638 - Panama Road Rehabilitation Project I. THE TRANSPORT SECTOR A. General 1.01 Panama is divided lengthwise by a mountain range and across by the Panama Canal. As a result, the country has developed on two main axes: one north-south along the Panama Canal, and the other east-west along the Pacific Coast in the south of the countrv and west of the Colon-Panama City Corridor. To the southeast of the Colon and Panama provinces lies the relatively unexplored Darien province with the narrow Comarca of San Blas to the north. These two areas of dense rain forests are relatively undeveloped, sparsely populated and without land transport facilities; air travel and coastal ship- ping are almost the only means of transportation available. B. The Transport System 1.02 The transport system in the developed areas of the country is broadly adequate; road transport is the basic mover of domestic freight and passengers. About 97% of all domestic freight traffic and 99% of passenger traffic is carried by road (Tables 1.1 and 1.2). 1.03 The most important international transport facilities are the Tocumen International Airport, the Panama Canal, the Canal ports of Cristobal (near Colon) and Balboa (near Panama City) and the Pan-American Highway. The Panama Canal, its ports and ancillary facilities, including a trans-isthmian railway and a small oil products pipeline, carry an important part of the international cargo traffic, while the canal ports handle most of Panama's general imports. The Pan-American Highway, although handling only 5% of the international traffic, is playing a growing role in the development of inter- regional commerce. International passenger traffic is mainly by air (some 80%). (i) Roads and Road Transport 1.04 The transport industry is dealt with in Chapter II and road infra- structure, for which the Ministry of Public Works (MOP) is responsible, in Chapter III. Some expansion and upgrading, especially for secondary and feeder roads, would be necessary to meet growing requirements and to give access to areas presently isolated and undeveloped. Maintenance and rehabili- tation of the existing network are the highest priorities in the subsector.
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