World Bank Document

ReportNo. 1411a-BEN F 1 L E Appraisalof a FeederRoads FILCOPY Project People'sRepublic of Benin

May 10, 1977 Public Disclosure Authorized ResidentMission Western Afnrca FeederRoad Section

FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Do«unfnt of the WorkdBank

Thisdocument has a restricteddistribution and may be used by recipents onlyin theperformance of therrofficiai duties. Its contentsmay not otherwesebe disclosedwithout Worid Bankauthorization. CURRENCY EQUIVALENTS

Currency Unit: CFA Francs (CFAF) US$1.00 CFAF 245 CFAF 1 million = US$4,081

Fiscal Year

January 1 - December 31

System of Weights and Measures: Metric

Metric US Eequivalents

.1meter (m) 2 3.28 feet (ft) 1 square meter (! ) 10.8 square feet (sq. ft.) 1 cubic meter (m ) 35.3 cubic feet (cu ft) 1 kilometer (km) 2 0.620 mile (mi) 1 square kilometer (km2 ) 0.386 square mile (sq. mi) 1 hectare (ha) 2.47 acres 1 metric ton (t) 2,204 pounds (lb)

Abbreviations and Acronyms

CARDER Centre d'Action Regionale pour le Developpement Rural DLT Directorate of Land Transport DRB Directorate of Roads and Bridges FAC Fonds d'Aide et de Cooperation FED Fonds Europeen de Developpement ME Ministry,of Equipment MRD Ministry of Rural Development OCBN Organisation Commune Benin-Niger des Chemins de Fer et des Transports SONACO Societe Nationale pour le Developpment du Coton SONAGRI Societe Nationale pour le Developpement Agricole SONICOG Societe National Industrielle pour les Corps Gras STI Services des Techniques Industrielles USAID United States Agency for International Development v.p.d. Vehicles per day FOR OFFICIAL USE ONLY

PEOPLE'S REPUBLIC OF BENIN

APPRAISAL OF A FEEDER ROADS PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... i-iii

1. INTRODUCTION ...... 1

2. BACKGROUND ...... 2

A. Economic and Geographical Setting ...... 2 B. Agricultural Characteristics ...... 2 C. The Transport System ...... 3

3. THE ROAD AND ROAD TRANSPORT SYSTEMS ...... 3

A. The Road Network ...... 3 B. Road Traffic ...... 0 ...... 4 C. Road Transport ...... 4 D. Road Administration ...... O... . 5 E. Road Maintenance ...... 5 F. Road Engineering and Construction ...... 6 G. Financing ...... 6

4. THE PROJECT ...... 7

A. General Description ...... 7 B. Improvement and Maintenance of Feeder Roads ...... 8 C. Technical Assistance ...... 9 D. Equipment Purchases ...... 9 E. Execution ...... a ...... lO F. Project Monitoring and Planning .. il...... G. Cost Estimates ...... 13 H. Procurement ...... 14 I. Financing and Disbursements ...... 15

5. ECONOMIC AND SOCIAL EVALUATION ...... 15

A. Framework ...... 16 B. Benefits ...... o...... 16 C. Costs ...... 18 D. Conclusions ...... 18

6. AGREEMENTS REACHED AND RECOMMENDATION ...... 19

Thibdocumnt bu a rutUklsd dJultbuUon nd May be ussdby rocipientonly intheperfonnnhnce | t *à-. _A^o A a"..... - -- _ ... -_ - _. __...... AI ------et -_ -- _ :_._]_..s__.___ -2-

TABLES

1. Highway Network, 1976 2. Motor Vehicle Fleet (1967, 1970, 1975) 3. Expenditureson Roads, 1970-1976,and their Financing 4. Government Revenues from Road Users, 1975 5. Road Design Standards 6. 1978 Improvement Program 7. Provisional 1979 Improvement Program 8. Provisional 1980 Improvement Program 9. Feeder Road Maintenance Program 10. Equipment and Tools to be Purchased 11. Estimated Average Annual Costs for Each Brigade Type 12. Project Costs 13. Implementation Schedule 14. Estimated Schedule of Disbursements

ANNEXES

1. AgriculturalBackground

2. Light (Labour Intensive),Intermediate and Reavy Brigades

3. Details of Technical Assistance to Ministry of Equipment

4. Guidelines for Feeder Road Project Monitoring, Evaluation and Planning

5. Details of Economic and Social Evaluation

CHART

Organizationof the Directorate of Roads and Bridges (DRB) - 1976

MAP

IBRD 12709 - People's Republic of Benin: Feeder Roads Project PEOPLE'S REPUBLIC OF BENIN

APPRAISAL OF A FEEDER ROADS PROJECT

SUMMARY AND CONCLUSIONS i. Benin is among the poorest nations of the world with an estimated 1975 per capita gross national product of US$140 equivalent. The agricultural sector provides a living for approximately 80% of the population of 3.1 million and contributes 30% of the gross domestic product and 90% of the value of exports. The principal cash crops are palm products, cotton and groundnuts, grown mostly by peasant farmers. Cotton and groundnuts are grown mainly in the centre and the north, and palm products in the south. Tomatoes and rice are assuming increasing importance. Soils are generally fertile and given adequate applications of fertilizer and pesticides, crop yields could be considerably higher than those currently obtained. ii. Government policy is directed towards increasing domestic food production in order to lessen dependance on imported foods and developing industrial crops such as cotton, oil-palms and groundnuts to increase peasant farmers' incomes and provide export earnings. The Ministry of Rural Develop- ment is responsible for policy matters and coordination within the agricultural sector and operates, through the Directorate of Agriculture, specialized crop agencies and the Centres d'Action Regionale pour le Developpement Rural (CARDER). The CARDERs are responsible for agricultural transport, marketing, the supply of inputs and agricultural extension services at farm level. iii. Development programs in the agricultural sector have been financed mainly from foreign sources including IDA, and investment amounted to about US$42.8 million equivalent over the period 1971-1975. This has included two IDA-financed projects: the Hinvi Agricultural Development Project (Cr. 144-DA) concerned with palm products and the Zou-Borgou Cotton Project (Cr. 307-DA) concerred with cotton and food crops but with a significant feeder road element. iv. Prices paid to the farmers and by the consumer have been fixed for all crops since August 1976. The Government pricing system is intended to keep prices paid by the consumer under control while providing the farmer with adequate incentive to grow both food and cash crops. However, during the last three years the Gcvernment's pricing policies have not encouraged cotton production which fell 50% during that period. Crop prices were revised in November 1976, and with the exception of maize they now compare favorably with free market prices in neighboring countries. v. Although Benin's main and secondary road system is reasonably adequate, there are serious deficiencies in the tertiary and feeder road network serving agricultural areas; this has acted as a brake on agricultural development. The proposed Feeder Roads Project is designed as a first stage in improving rural access roads. The project will permit the ready transport of agricultural inputs and extension services to farmers and evacuation of produce, thus stimulating agricultural production and increasing farmers' incomes. The proposed roads will serve approximately 200,000 inhabitants. - ii - vi. The proposed project consists of a three-year program for the constructionand improvementof about 845 km of feeder roads (includinga minimum of 160 km of Zou-Borgou Cotton Project roads and their subsequent maintenance)and maintenance of 425 km of existing feeder roads. In order to provide the necessary flexibility in planning and executing feeder road programs, only the first year's (1978) program has been defined. The tentative programs for 1979 and 1980 will be subject to revision by the monitoring and planning unit that will be an important and integral part of the project. A methodologyhas been proposed for project monitoring and program planning. Changes in future programs would be discussed and agreed by an InterministerialTechnical Committee and approved by the Association. vii. Project costs are estimated at US$6.1 million equivalent,net of taxes, with a foreign exchange cost of US$4.0 million (66%); taxes and duties are estimated at US$0.6 million equivalent. The proposed credit of US$5.5 million would finance 100% of foreign exchange costs of the project and about 70% of local costs. The Government'scontribution would be US$0.6 million equivalent or about 10% of total project costs, net of taxes. The proposed project includes contingenciesamounting to US$1.2 million. viii. The Government has agreed to examine ways in which the local population directly benefitting from the road improvementscould contribute to the cost of improvementor subsequent maintenance. This could possibly be or- ganized through the regional CARDERS.

ix. Execution of the project vould be the responsibilityof the Ministry of Equipmentwhich will create a new Division of Feeder Roads to implement the project. With few exceptions all work will be carried out by force account. The works will be carried out using different techniques. Where unskilled labour is not readily available and engineering considerations warrant, a fully mechanized brigade will be used; where reasonable supplies of labour are available and engineering conditions permit, an intermediate (less mechanized) brigade will be employed;where labour is readily available and the volume of works is suitable, a light (labour intensive) brigade will be used which will be increased to two such brigades after one year. One reason for the relatively large local cost element in this project is the use of labour-intensiveconstruction methods, and it was deemed necessary to finance a large part of these labour costs out of IDA funds if labour intensive operations were to be used and assessed.

x. Credit funds will be disbursed as follows: (a) 100% of foreign expendituresand 70% of local expendituresfor equipment, spare parts, supplies and materials; (b) 70% of expendituresfor road improvementand maintenance works by force acount; (c) 75% of total expendituresfor civil works done by contractors;and (d) 100% of foreign expendituresand 70% of local expendituresfor consulting services and technical assistance. - iii - xi. Equipment,materials, and supplies amounting to US$3.2 million, net of taxes, would be procured on the basis of internationalcompetitive bidding in accordancewith Bank Group Guidelines. Contracts for equipment, materials and supplies costing less than US$50,000 and for spare parts can be awarded on the basis of competitivebidding following local procedures acceptable to the Association;the total amount will not exceed US$400,000. xii. Improvementand maintenance of feeder roads (with exception of Zou-BorgouCotton Project roads) have been justified on the basis of vehicle operating cost savings accruing to normal traffic and net value added agricultural production-- the latter accruing directly to the farmer. In the case of feeder roads still outstandingin the Zou-Borgou Cotton Project, which were justified in the appraisal of that project, only engineering studies were carried out to up-date costs. xiii. Institutionbuilding is an element of primary importance in the proposed project. For this reason, a considerabletechnical assistance element has been included. A primary objective will be the establishment of a strong road planning and building capability within the Directorate of Roads and Bridges (DRB), which would hopefully permit future reductions in the employmentof consultants. Also, the monitoring function that would be performed by the Feeder Road Division will not only assist the proposed project in achieving its objectives but should also provide socio-economic evaluationand engineeringknowledge for applicationin future projects. xiv. All roads included in the proposed project have an internal rate of return greater than 12% and, excluding roads of the Zou-BorgouCotton Project, the overall rate of return is about 27%. The project is only moderately sensitive to variations in project cost and benefits. xv. During negotiationsagreement was reached with the Government on the items mentioned in para. 6.01, and assurancesobtained on the points in para. 6.02. The proposed project is suitable for a Credit to the Peoples' Republic of Benin of US$5.5 million on standard IDA terms.

PEOPLE'S REPUBLIC OF BENIN

APPRAISAL OF A FEEDER ROADS PROJECT

I. INTRODUCTION

1.01 Benin is among the poorest nations of the world with an estimated 1975 per capita gross national product of US$140 equivalent,which has probably not grown since then in real terms. Its economy is based on agriculture,and in the foreseeablefuture developmentwill depend on the growth of this sector. One of the major constraintson agriculturaldevelopment is the inadequacy of transport services in existing and potential crop-producing areas. These transport services cannot be improved unless the quality of the access roads, particularlyagricultural feeder roads, is improved. In 1973, the Government requested the Bank Group to assist in financing a program to build, improve and maintain agriculturalfeeder roads. Subsequently,with financing under the Second Highway Project (Cr. 415-DA, US$11.8 million, 1973), a study of feeder road needs was undertaken by the consultantsLamarre Valois International(Canada). It is this study, completed in June 1975 with certain modifications,together with additionalroads proposed by the Ministry of Rural Development (MERD),and a part of those roads included in the Zou-Borgou Cotton Project but not completed, that form the basis of the proposed project.

1.02 The project would be the Bank Group's third lending operation for road developmentin Benin. The First Highway Project (Cr. 215-DA, US$4.1 million) running from 1971-1974,was mainly concernedwith upgrading and maintaining the main and secondary road system. The work of upgrading and maintaining the road system was extended under the Second Highway Project which also included design and reconstructionof part of the Parakou-Malanville road and preliminary engineering and a feasibilitystudy for improvementof the Godomey-Bohiconroad. Due to inflation, this project exceeded its estimated cost and a supplementarycredit of US$9.0 million was made in 1976; project completion is due by June 1977. The execution of these projects has generally been successful. Two additionalprojects are under considerationby the Association: a Third Highway Project for financing the reconstructionof the Godomey-Bohiconroad, eliminationof backlog of periodic maintenance for primary and secondary roads, and continued technical assistance,and a project for the extension of Cotonou Port.

1.03 The proposed Feeder Roads Project is designed to support agricultural development and to strengthenthe institutionalframework for the improvement and adequate maintenance of the feeder road network. The proposed project includes a three-yearprogram for improvementand subsequentmain- tenance of about 845 km of feeder roads and maintenance of about 425 km of existing feeder roads.

1.04 Project cost is estimated at US$6.1 million equivalent,net of taxes, with a foreign cost of US$4.0 million. Taxes are estimatedat US$0.6 million equivalent. The proposed credit of US$5.5 million would finance the entire foreign cost and US$1.5 million of local project costs. The Government'scontribution would be US$0.6 million equivalent or 10% of total project cost, net of taxes.

1.05 The report is based on data contained in the Lamarre Valois study and provided by MRD, on the findings of an appraisal mission comprising Messrs. S. Hertel (Engineer)and R. Bonney (Economist)which visited Benin in July 1976, supplementedby a post appraisal mission by Messrs. B. Coukis (Economist)and B. Nilsson (Engineer) in October and a short additional study during November 1976, carried out by Messrs. Thriscutt and Knighton (consultants). The need for this additional post-appraisalwork stemmed from the fact that no pre-appraisalmission had been undertaken.

2. BACKGROUND

A. Economic and GeographicalSetting 2 2.01 Benin has an area of 112,600km and a population of about 3.1 million and is situated in Western Africa on the Atlantic coast between Togo to the west and Nigeria to the east. From the port and commercial center of Cotonou in the south to the Niger border on the north the distance is approximately 700 km. The greater part of the country is relatively flat or rolling except in the north-west where the Atakora mountains are located. ClimaticallyBenin can be divided into two distinct zones: the south with a main rainy season from May to June (average annual rainfall about 1,300 mm); the north with a main rainy season from July to September (average annual rainfall about 800 mm).

B. AgriculturalCharacteristics

2.02 Benin has a predominantlyagricultural economy with 80% of the population dependent on farming. It is ranked as one of the world's poorest countries with an estimated gross national product per2capita of US$140 in 1975. Average population density is 28 inhabitants/km but the population is unevenly distributed. The most densely populated2areas are in the extreme south where there are about 60 to 120 inhabitants/km. The main commercial crops are palm products, cotton and groundnuts which provide about 80% of the value of exports and constitute 10% of agriculturalproduction. The major domestic food crops are maize, sorghum, yams and cassava, totalling about 1.3 million tons of which 15% to 20% are marketed.

2.03 Most agriculturalactivity is in the hands of peasant farmers, and recent changes in Government policy encourage them to organize into farmer cooperativeswhich conduct marketing, input supply and training operations through regional Centres d'Action Regionale Pour le DeveloppementRural (CARDERs). Annex I describes in more detail the agriculturalbackground. - 3-

2.04 There is a free market for small amounts of produce sold at local markets, but Government agencies buy, sell and set the prices for the major cash crops and a large part of food crops. Transport used in marketing these crops and in supplying inputs is either owned by the Government or, when private transportersare used, paid at a rate fixed by the Government. However, private bush buses and taxis are common in all areas and are used to carry people and small amounts of produce to local markets. This marketing and transport system obviously has considerableimplications in the project analysis and these are discussed in Annex 5.

2.05 The MRD is responsiblefor policy and overall coordinationin the agriculturalsector. The central staff of MRD's Directorate of Agriculture is very small and the Ministry functionsmainly through the provincial CARDERs. MRD is also responsiblefor coordinatingthe seven state enterprises which are involved in specific fields of agriculturaldevelopment. The Ministry also has a newly created Directorate for Planning, but this is not yet functioningfully due to lack of qualified staff.

C. The Transport System

2.06 Benin's primary transport system (see Map) is relativelywell developed and is being improved. Land transport centers on Cotonou with its modern deep-waterport and internationalairport. Cotonou is also the focal point for the OCBN (OrganisationCommune Benin-Niger des Chemins de Fer et des Transports) railway, particularlythe 438 km section from Cotonou to Parakou which forms an important part of the link between landlockedNiger and the sea.

2.07 Road services are the predominant form of transport in the country and are estimated to carry about 70% of domestic freight and 90% of domestic passenger traffic; the remainder is carried by rail. Total land transport demand (includingrail traffic) is expected to grow at an average annual rate of about 5% over the next five years, but this includes an expected increase in Niger transit traffic and a rapid increase in Nigerian transit traffic using the port of Cotonou. Domestic road traffic is forecast to grow an average 4% per annum at the maximum.

3. THE ROAD AND ROAD TRANSPORT SYSTEMS

A. The Road Network

3.01 The road network (see Table 1 and Map) totals approximately 6,900 km of classified and unclassifiedroads and tracks (excludingurban roads) of which 759 km are paved. The roughly 5,000-km road network maintained by the Directorate of Roads and Bridges gDRB) corresponds to an average density of approximately 40 km per 1,000 km . The size and distributionof the primary and secondary networks generallymeet the country's needs. However, there is a need for improvements,rehabilitation and a higher standard of maintenance. - 4 -

3.02 There are important deficienciesin the about 3,500 km of earth roads which serve villages and agriculturalareas. In some cases where adequate structures exist, the roads are impassable to vehicles because of the severe deteriorationof the road formation, which is due either to inadequate constructionor lack of maintenance or a combination of the two. Even where trafficableroads exist, they are frequently impassable during critical periods of planting and input supply and at other times can only be used if high vehicle operating costs are tolerated.

B. Road Traffic

3.03 About 70% of total domestic freight is carried by road. Estimates of the annual average growth rate (based on limited traffic counts and official estimates of freight through the port of Cotonou) for all road traffic are about 4%, with a higher rate for light vehicles than for vehicles over three tons, although individual growth rates vary considerablyfrom route to route. Overall growth rates, however, cannot be applied to the majority of feeder roads where the condition of the roads acts as physical brake on the volume of traffic.

3.04 Traffic on feeder roads varies from two or three vehicles per day (v.p.d.) to about 40 v.p.d. Traffic consists mainly of 7-10 ton trucks for major commoditymovements and bush buses (generally 1.5 to 2.5 ton utility vehicles) and bush taxis for passenger and small commoditymovements.

C. Road Transport

3.05 The latest complete motor vehicle statistics are from 1970. At that time the fleet included about 11,000 vehicles, about 65% of which were passenger cars and vans. In 1975, all vehicles had to receive new license plates and about 12,000 vehicles were re-registered (Table 2).

3.06 The legal single axle limit is 13 tons, but this is not always observed. Excessive axle loads probably do not occur on the feeder roads due to the condition of the roads. Traffic is reduced on earth and gravel roads during and after heavy rain by the closure of the roads.

3.07 Apart from OCBN which is responsible for the railway and interstate truck traffic, domestic transport has been carried out by small under-capitalizedoperators. However, recent Government policy calls for the development of state transport, especially in associationwith the regional CARDERs. Entry into the trucking business has been restricted by reducing the number of private operating licenses granted. The trend now, especially for transportof agriculturalproduction and inputs, is to use private transportersonly when government transport is not available. Private transportersgenerally negotiate a contract with the Government or the regional CARDER, and rates may vary according to the road standard. The following rates (for a 7-ton truck) were found in a recent contract: - 5 -

(i) paved road, CFAF 13.75 ton/km;

(ii) good quality laterite main and secondary roads, CFAF 22 ton/km; and

(iii) feeder roads CFAF 32 ton/km.

This policy tends to limit competition in the transport of agricultural produce, although competitionexists with bush buses and bush taxis. Vehicle operating cost savings derived from agriculturaltraffic due to road improvements would accrue to private truckers and government trucking operations. In neither case are these savings likely to be passed on directly to the farmer. It is probable that vehicle operating cost savings accruing to the CARDERs (either directly through their own vehicles or by negotiating cheaper contracts with private transporters)will be passed on to the farmers through more efficient farm extension and social services.

D. Road Administration

3.08 The Directorate of Roads and Bridges (DRB) of the Ministry of Equipment (ME) (see Chart) is responsible for the constructionand maintenance of 3,400 km of interstate and national roads and 1,500 km of secondary and feeder roads. The remaining2,000 km of unclassifiedfeeder roads and tracks are currently the responsibilityof the Ministry of Interior and local authorities. However, the Government intends to create a special Feeder Roads Division within the DRB, responsiblefor the construction,improvement and maintenance of feeder roads.

3.09 The new Feeder Roads Division will consist of a HeadquartersUnit based in Cotonou and three sub-divisions,each initially in charge of one constructionbrigade. The constructionbrigades' major equipment maintenance needs will be met by the Central Mechanical Workshops (STI) in Cotonou and Parakou. The existing General Studies Division of the DRB is restricted to drafting and design office function. There is a need for a second evaluation and planning capability within the DRB, especially if a large and continuing feeder road program is to be developed. The strengtheningof the Directorate of Land Transport's (DLT) planning capability (proposedunder the Third Highway Project) is unlikely to meet the needs of the feeder road program and, therefore, it is proposed to include within the new Feeder Roads Division a planning capability that, in cooperationwith interestedGovernment ministries, will be able to carry out project monitoring and planning.

E. Road Maintenance

3.10 Maintenance of interstate and national roads, which is under the direction of the MaintenanceDivision of the DRB, has improved during the past years as a result of the Association'stwo highway projects but is still hampered by lack of equipment and insufficientfunds. Maintenanceof feeder roads, which is the responsibilitypartly of DRB and partly of local -6-

authorities,has continued to be of a low quality (with the exception of those improved under the Zou-Borgou Cotton Project) due to inadequate resources. Considerableefforts are being made by the local population in many areas to improve and maintain roads manually, but without supervisionand advice these efforts have not been very successful.

F. Road Engineering and Construction

3.11 The DRB has a Chief Engineer heading the General Studies and New Works Division who is responsiblefor preparation and supervisionof new projects. Most projects financed by foreign aid agencies are prepared and supervisedby consultants. Without local contractingorganizations of suf- ficient capability,major works are undertaken by foreign contractors. However, improvementsto secondary roads under the Second Highway Project and feeder roads under the Zou-Borgou Cotton Project have been carried out sat- isfactorilyby force account by DRB. For improvementsto feeder roads under the proposed project, force account by DRB will also be adopted.

G. Financing

3.12 Table 3 gives the 1970-1976capital and recurrent expendituresfor roads as well as the source of financing. Total expenditurestripled between 1970 and 1975, when they amounted to about CFAF 2.7 billion (US$11 million). They are estimated to have more than doubled again in 1976, primarily due to constructionby Nigeria of a coastal link with Lagos and to IDA and USAID disbursementsfor the Parakou-Malanvilleroad under the Second Highway Project. Recurrent road maintenance expenditures,however, have declined from a maximum of CFAF 474 million in 1972 to an average of CFAF 403 million per year in the 1973-1975period--corresponding to an average expenditureof about CFAF 70,000 per km--when road maintenance costs rose considerablydue to worldwide inflation. In the 1970-75period, 63% of total Government expendituresfor roads (includingroad maintenance)and 85% of road investmentswere financed from foreign sources (IDA 34%, FED 29%, Nigeria 18%, USAID 15%, others 4%). Maintenance expenditures,excluding amortizationof equipment, have been financed from regular budget allocations (92%) and from the Road Fund which was reactivatedin 1970 and supplied with funds from an earmarked tax of CFAF 4 per liter on sales of gas-oil and gasoline (8%). However, the Road Fund was mainly used to pay small investmentsexecuted directly by the Government and the Government'sshare of larger investmentsfinanced from abroad. If the Road Fund revenue had been used exclusivelyfor road maintenance,it would have covered 62% of the maintenance expenditures. Table 4 details 1975 Government revenues from road users.

3.13 The Government should improve its maintenance performance in general. Under the proposed Third Highway Project the Government will be requested to increase its allocation for maintenance from CFAF 400 million in 1976 to CFAF 900 million in 1980. Within the scope of the proposed feeder roads project, the Government should take all administrative,technical and financial steps necessary to prepare and implementa five-year road maintenance program providing for the maintenance of primary, secondary and feeder roads in balanced proportions. This program, which would be furnished to the Associationby November 30, 1977 for review and comment, would establish gradually increasing physical targets for each year. In addition the Gov- ernment has agreed to maintain at an acceptable and agreed standard (from beginning 1978) a minimum of 600 km of feeder roads not included in the project.

3.14 The minimum acceptable maintenance standard will require: (i) one light grading at least annually, (ii) pot-hole repair by hand, (iii) elimi- nation of major surface corrugationsat intervals depending on soil conditions and traffic;and (iv) routine culvert and drainage repairs and cleaning. For the 1,300 km of project roads, annual recurrent costs would be about CFAF 32 million (US$130,000). This includes equipment depreciationbut excludes periodic regravellingwhich should take place every eight years at an estimated cost of CFAF 200,000 (US$800) per km.

3.15 The extent to which the rural communities,benefitting from the proposed feeder road improvementand maintenance program, could provide resources towards the program has been discussed with the Government. It was agreed that limited participationwould be desirable and several methods were considered;these included:

(a) a local tax on produce marketed;

(b) a local authority contributionas a percentage of the wage paid to casual labour (especialyon the labour- intensivebrigades);

(d) self-help labour.

At negotiationsthe Government agreed to review the possibility of obtaining participationof rural communities in the feeder road improvement and maintenanceprogram and to inform the Associationof the results of such review not later than June 30, 1978.

4. THE PROJECT

A. General Description

4.01 The proposed project consists of:

(a) a three-yearprogram for improvementand subsequent maintenanceof about 845 km of rural roads, and initial maintenanceof about 425 km of existing rural roads - 8 -

improved under the Zou-Borgou Project; the works will be carried out by one heavy (mechanical)brigade, one intermediate (less mechanized) brigade and two light (labor intensive) brigades for which all equipment and tools will be procured;

(b) strengtheningof the DRB in the ME by creating a new Division of Feeder Roads to plan, execute and monitor the feeder road program as well as to do forward planning; and

(c) technical assistance to assist local staff implementing the program and to train local staff so that it can gradually take over project responsibilityand eventually carry out a follow-up program with much reduced technical assistance.

The proposed project is the first phase of a long-term improvementand maintenance program that eventually might cover all potentiallyviable feeder roads in Benin.

B. Improvement and Maintenance of Feeder Roads

4.02 Official estimates, probably too low, identify about 3,500 km of tertiary roads and non-classifiedtracks which form the country's feeder road network, connecting agriculturalareas with markets, administrativecenters, and secondary and primary roads. This feeder road network has, for many years, received no or very little maintenance or improvement. As a result, the feeder roads have deterioratedwhich has led to a serious decrease in accessibilityto existing agriculturalareas and the failure to open new areas to production.

4.03 The project provides for improvement of about 845 km of feeder roads in all regions of the country. The proposed improvements consist of: (a) reshaping the roadway; (b) regravellingselected sections (estimatedat 50% of total length); and (c) building and reinforcingdrainage and drainage structures. Uniform geometric standards are proposed for all roads: 8-10 m wide clearing, 6 m road platform to be gravelled, where required, over a 4 m width to a thickness of 10-20 cm depending on soil conditions and expected level of traffic. However, for roads with an expected average daily traffic above 30, the road width will be increasedby 1 m on curves with limited visibility and over sections with soft subsoil (Table 5).

4.04 A firm work program has been established for the first year (Table 6) as well as a tentative work program for the second year (Table 7). For the third year a list of suggested roads has been indicated (Table 8). The second and third year programs are subject to change if new agricultural developments are launched or others are delayed.

4.05 The proposed project also provides maintenance for about 425 km of existing feeder roads mainly constructed under the IDA-financed Zou-Borgou Cotton Project; Table 9 details the roads to be maintained. In addition, the - 9 - roads improved under the present project will subsequently be maintained. The cost of this maintenance over the three-year project period is estimated at CFAF 67 million (US$0.27 million) including equipment depreciation. The necessary equipment for maintenance can be detached from the construction brigades in off-peak construction periods without reducing their capacity. Due to Benin's difficult financial situation the Association would participate in financing this limited maintenance which would include the minor betterment required following low-cost improvements. At the same time the Government has confirmed that it will ensure maintenance of a minimum of 600 km of feeder roads not included in this project with its own financial resources. In addition Government will, in connection with the proposed Third Highway Project, increase its maintenance efforts for the entire network.

C. Technical Assistance

4.06 Technical assistance would be provided under the project to the Government to help it to:

(a) define second and third year working programs (for 1979 and 1980);

(b) implement the improvement and maintenance programs;

(c) define a long term plan for improving and maintaining the whole feeder road network and prepare a working program for 1981/82 as a continuation of the proposed project and an outline program for the following three years; and

(d) monitor the project.

4.07 The technical assistance would provide on-the-job training for DRB engineers, technicians and one economist. The experts' outline job descriptions and required qualifications as well as duration of assignment are given in Annex 3; these were discussed and agreed upon with the Government at negotiations. The Government also confirmed that it will attach to the Feeder Roads Division qualified local staff on a permanent basis (list in Annex 3) as well as other personnel on a temporary basis, all to be trained by the experts.

D. Equipment Purchases

4.08 Existing ME equipment for road improvement and maintenance, which is not in working order, would be rehabilitated under the proposed Third Highway Project and would be used to improve and maintain the primary and secondary network. The ME equipment used to improve feeder roads under the Zou-Borgou Cotton Project was not procured under that project but was rented from the ministry; it will in the future be used on primary and secondary roads. The proposed project includes the purchase of all equipment and tools needed for the operation of the brigades, as listed in Table 10. Bidding documents for the equipment have been prepared by DRB with the assistance of the consultants providing services under the Highway Project. The documents were reviewed and approved by the Association during negotiations. - 10 -

The Project also provides funds for purchasingmaterials such as cement, steel, lumber and for spare parts and supplies such as fuel, lubricantsand tires.

E. Execution

4.09 Execution of the project would be the responsibilityof ME. A new Division of Feeder Roads will be created within the DRB (see Chart) to implement the project. The creation of this division would be a condition of effectivenessof the Credit. The brigades to execute the works will be directed by three subdivisions,two of which have already been created. This arrangementhas been confirmed by the Government.

4.10 Physical execution of the project is scheduled to start at the beginning of 1978 and to be completed in three years. With few exceptions,road improvementwill be carried out by force account, and maintenance undertaken exclusivelyby force account. Local contractorsmay be used for constructing smaller drainage structures.

4.11 The improvementworks will be carried out using different techniques, varying from labour intensive to mechanized as follows:

(a) In areas where surplus labour exists (such as in the south) and where the type of work is suitable, feeder roads will be improved using to the maximum extent hand labour with only a minimum of fairly simple equipment to ensure that the standard of the finished work is acceptable. Thus, clearing, shaping, raising of formations,digging and initial spreading of materials will all be done by hand. Transportationof materials, final shaping, watering and compactionwill be done by machines. One light, labour-intensive brigade would start working in January, 1978. Subject to its satisfactorilymeeting work targets, a second light brigade would be added one year later. It is estimated that each brigade, employing about 250 laborers, would improve 45-50 km of road per year;

(b) Where unskilled labour is not readily available or where the types of works call for more mechanized inputs, an intermediatemechanized brigade would be used. This brigade would rely on labour for loading of materials but would use equipment for practically all other operations. The intermediatebrigade would start working January 1978, and it is estimated it would improve about 75 km of road per year; and

(c) Where there is a shortage of labour a fully mechanized brigade would be used. The brigade's output is estimated at 135 km per year. - il -

4.12 Maintenancewill be done by applying at least one motor grader passage a year to the roadway and shaping the ditches. Experimentswill be carried out, using a tractor-drawnblade for intermittentroad maintenance, where required. It is expected that this method would become routine on feeder roads with relatively higher traffic volumes. Other maintenance operations will be done manually.

4.13 The Feeder Roads Division will be responsible for drafting a yearly program for the improvementand maintenance of feeder roads. This program will be presented to an InterministerialTechnical Committee (ITC) which the Government plans to create. The ITC would include inter alia, represen- tatives from ME, MRD, Ministry of Finance and Plan as well as agencies with direct interest in agriculturalfeeder roads. The ITC can be created by a ministerialorder, and the Government has provided assurances that ITC will be operationalnot later than October 31, 1977. Once the working program for each fiscal year has been defined by ITC, it should be forwarded to the Associationfor approval three months before the scheduled start of the works under that year's program. The Association should satisfy itself that roads selected for improvementmeet agreed criteria (see 4.15 below). These arrangements were confirmed by the Government at negotiations.

F. Proiect Monitoring and Planning

4.14 Institutionbuilding is of primary importance in the project and a capability would be created within the new Feeder Road Division of DRB to:

(a) monitor the economic, engineeringand social aspects of the project, the arrangementsfor which were agreed upon at negotiations;

(b) develop and redefine the second and third year programs of feeder road improvementand maintenance;

(d) prepare proposals for a possible follow-up project after completion of the proposed project.

These tasks would primarilybe undertakenby the chief of the technical assistance in the new Feeder Roads Division and a transport/development economist together with their Benin counterparts. However, close coordination will be maintainedwith other interestedministries.

4.15 The methodology and assumptionsof the design and socio-economic justificationof the project require careful monitoring to determine the extent to which they should be modified for the preparationof second - 12 -

and third year programs. For the purposes of justification,roads have been grouped into two categories (para. 5.04). A minimum internal rate of return of 10% will be applied in evaluating and selecting the second and subsequent years' programs.

4.16 An important element in project monitoring will be the study of the performanceof the different kinds of constructionbrigades (light, intermediateand heavy) in order to optimize the brigade type to be used in technical and socio-economicterms. Also it is proposed to study the performance of different standards of road constructionand maintenance on a limited experimentalbasis.

4.17 One of the benefits to be derived from the monitoring and planning function will be the opportunity it gives to improve the economic and social impact by better road selection, to reduce risks associated with this type of project and to improve future evaluation and planning methods. This proposed monitoring and planning function and selection criteria for roads (para. 5.04) were agreed with Government during negotiations. - 13 -

G. Cost Estimates

4.18 The total cost of the project, net of taxes and duties, is estimated at US$6.1 million equivalent,with a foreign exchange cost of US$4.0 million (66%). Taxes and duties are estimated at US$0.6 million equivalent. The following is a summary of costs; details of costs by brigade are given in Table 11 and by year in Table 12.

Local Total Local net net Total net Foreign IDA of of with of Exchange Partici- Tax Taxes Foreign tax tax Tax Foreign Total Component pation ---- CFAF Million----…------US$ Million---- % US$ Z

I. Equipment, Tools and Materials Equipment and Tools 34 60 406 440 500 0.14 1.66 1.80 92 1.76 98 Materials 49 12 40 89 101 0.20 0.16 0.36 45 0.31 86

II. Spare Parts & Supplies 19 27 218 237 264 0.08 0.89 0.97 92 0.95 98

III. Local Staff 242 12 - 242 254 0.98 - 0.98 0 0.69 70

IV. Technical Assistance 33 4 152 185 189 0.13 0.62 0.75 82 0.71 95

V. Works Con- tracted 2 2 8 10 12 0.01 0.03 0.04 65 0.03 75

TOTALS I-V 379 117 824 1,203 1,320 1.54 3.36 4.90 69 4.45 90

VI. Contingencies /1 (a) Physical 36 5 62 98 103 0.15 0.25 0.40 0.37 (b) Provision for future price increases 91 20 95 186 206 0.37 0.39 0.76 0.70 TOTAL 506 142 981 1 487 1,629 2.06 4.00 6.06 66 5.50 90

/1 For possible quantity increases a contingency of 5% is allowed on equipment and 10% on all other items. For price increases from November 1976 the following contingencies have been allowed:

Plant and Equipment Purchases and Spare Parts Other

1977-79 7.5% 9% 1980 7% 8% - 14 -

4.19 Estimates of equipment and tool costs are based on suppliers' quotationsreceived in November 1976 as well as bids received during 1976 for similar equipment. Operating costs of equipment for 180 working days are based on actual cost figures registered under the Second Highway Project and the Zou-Borgou Cotton Project. The average financial cost, net of tax, of improving roads is about CFAF 950,000 per kilometer (US$3,900)including equipment depreciation,but excluding technical assistance. This is a reasonable cost. The estimates show that the roads improved by labor-intensive methods may be slightly more expensive (financially,without shadow pricing of unskilled labor). l/ Estimated costs for maintenance per kilometer, excluding regravelling,are estimated at CFAF 25,000 (US$100) per year.

4.20 Technical assistance is assumed to be provided by consultants and would amount to six man-years of civil engineers/economistsand seven man- years of senior technicians. The average man-month cost is estimated at US$6,200 correspondingto rates of consulting firms working under similar circumstances. The possibility of reducing the cost of technical assistance by making use of individual consultants or volunteers (from UN or other organizations)for some of the positions will be actively examined with Government.

4.21 A contingencyallowance of 5% on equipment and 10% on all other items has been included to allow for increases in quantities. Future price increaseshave been calculated separately for the various items and amount to about 17% of the total base cost.

H. Procurement

4.22 Equipment,materials and supplies amounting to about US$3.2 million, net of taxes, will be procured on the basis of internationalcompetitive bidding in accordance with Bank Group Guidelines. Contracts for equipment, materials and supplies costing under US$50,000 and for spare parts can be awarded on the basis of competitivebidding advertised locally in accordance with applicable Government procedures acceptable to the Association. The total amount of such purchases would not exceed US$400,000. Contracts for the constructionof selected civil works will, if awarded, follow local competi- tive bidding procedures acceptable to the Association. Since the Government has indicated that they intend to use contractorsonly in exceptionalcases, it is expected that the amount will not exceed US$100,000. Consultantsfor technical assistancewill be retained in agreement with and under terms of referenceand conditions satisfactoryto the Association. All above ar- rangementswere discussed and agreed with the Government at negotiations.

1/ Annex 2 calculates the following financial cost per km.:

Light brigade = CFAF 1.05 million Intermediatebrigade = CFAF 1.00 Heavy brigade = CFAF 0.92 - 15 -

I. Financing and Disbursements

4.23 The proposed Credit of US$5.5 million vill finance about 90% of total project costs, net of taxes i.e. all foreign costs (US$4.0 million) and US$1.5 million of local costs. The remaining local costs of the project (US$0.6million equivalent)plus about US$0.6 million in taxes would be provided by the Government; this vas confirmed by Government at negotiations. Credit funds will be disbursed as follows:

(a) 100% of the foreign expendituresand 70% of the local expendituresfor equipment, spare parts, supplies and materials;

(b) 70% road improvementand maintenance works by force account;

(d) 100% of foreign expendituresand 70% of local expenditures for consulting services and technical assistance.

4.24 Expendituresto be financed by IDA in the first year of the project and which would have to be paid by the Government before reimbursement can take place vould amount to US$1.2 million. The interim financing re- quirement, assuming a lag of three months between the time when expenditures are incurred and the time they are reimbursed,would be about US$300,000. In view of Benin's poor liquidity situation, it is proposed that IDA provide US$300,000 in advance as part of its contributionto project financing. These funds would be deposited in a Special Project Account, the opening of which would be a condition of effectivenessof the Credit.

4.25 Requests for disbursementsagainst items (a), (b) and (d) would be fully documented. Disbursements for item (b) would be against a certificate of expenditures;detailed documentationwould be retained by the Borrower and available for inspection by the Association. Any funds remaining undisbursed at the completion of the project would be cancelled.

5. ECONOMIC AND SOCIAL EVALUATION

5.01 The objectives of the proposed feeder roads project are:

(a) to provide and maintain the necessary road system for achieving increased agriculturalproduction and hence improved standards of living in rural areas;

(b) to provide adequate access to rural areas for the provision of social and administrativeservices; - 16 -

(c) to develop the most appropriate long-term construction and maintenance methods (consideringboth technical and socio-economicfactors) by evaluating and comparing the results of various types of technologies (including labour-intensivetechniques) incorporatedinto the project; and

(d) to develop within the Government adequate project evaluation and planning capabilitiesto support a continuing feeder road program.

A. Framework

5.02 Field observations,statements by rural development officials and the amount of self-help road improvementobserved, all firmly indicate that improvementof the feeder road system is a necessary condition for increasing agriculturalproduction and improving the standard of living in rural areas. For some roads in relatively good condition the benefits consist mainly of savings in transport costs only, but for others the benefits will consist of value added resulting from increased production volumes. The evaluation method is described in detail in Annex 5. The roads that were analyzed are listed in Table 1 of that Annex.

5.03 Tentatively included in the program are 26 roads totalling 562 km and up to about 260 km of roads serving the Zou-Borgou Cotton Project. The latter are sections of roads that were not completed under the cotton project due to financial constraints. These roads were appraised as part of the Zou-Borgou Cotton Project and were estimated to yield a rate of return in excess of 11.5% based on vehicle operating cost savings and hence are conservative. Of these roads, 160 km have already been selected by the MRD as being priority roads requiring completion (listed in Annex 5, Table 1). The Zou-Borgou project, which has almost been completed, has not achieved its main objective of increasing cotton production. One of the reasons has been inadequate road access. Annex 1 describes in detail the Zou-Borgou project.

B. Benefits

5.04 For the purposes of economic evaluation,roads have been grouped into two categories:

Case I: This category includes the improvementof existing roads, serving areas with establishedagricultural activities and where the road investment is not likely to result in benefits other than a reduction in transportcosts. As there would not be any quantifiabledevelopmental impact, the benefits are calculated as road user savings to existing and future traffic.

Case II: This category includes constructionof new roads or improvement of existing roads (tracks)with little or no existing traffic and which may form part of an agricultural - 17 -

developmentproject. In this case, a distinction is made between two benefit components, either or both of which may apply: (i) value added on existing and incrementalout- put resulting from the road constructionor from a combined road/agriculturalinvestment; this component is the only one included for new roads and it is a significantone for projects involving improvementof tracks with insignificant existing traffic volumes; (ii) road user savings for traffic not directly related to agriculturalproduction and which have not been included in calculationof the value added; these user savings, which can be substantial (e.g. savings to passenger traffic, cross-transportof freight and import of foodstuffs and consumer goods to deficit areas), are therefore supplementalto value added and do not representdouble counting of benefits.

For instance road 8, Natitingou-Boukombe,(Annex 5, Table 1 and 6) is in fairly good condition and belongs to category I while road 21 Save-Igbodja belongs to Category II with all benefits consisting of net value added.

5.05 Road user savings have been calculated in form of reduced vehicle operating costs to existing traffic plus normal growth, estimated at 2.5% p.a. Net value added has been calculated for the induced production of cash crops following improvementsin accessibilitybut assuming no significant complementaryinvestments. The project investment has been analyzed over the period 1978-1988 assuming a project life of 10 years.

5.06 The estimates of net added value benefits are explained in Annex 5. It is calculated that the total increased cash crop production as a result of the improvementsto 26 roads (562 km) would amount to about 1,500 t of cotton, 2,400 t of groundnuts,and 500 t of rice. This incrementalproduction represents a 3-7% increase over present national levels depending on the crop (or a 6% average increase).

5.07 The beneifts derived from the increase in cash crop production are expected to go directly to the producer thus raising the rural standard of living. The benefits derived from vehicle operating cost savings will (a) in the case of private transporters,largely be retained by them but will also be reflected in a higher standard of transport service and (b) in the case of Government transport, provide resource savings which in part will be passed on to the rural community via the Regional CARDERs through better transport, social and agriculturalextension services and supply of inputs.

5.08 In addition to social benefits derived from improved access to social and administrativeservices, in those areas where labor-intensiveroad constructionand maintenance take place, cash benefits derived from employ- ment, estimated over the three-year program at approximatelyCFAF 106 million, will pass directly to the local community. - 18 -

5.09 Net value added of increased crop production constitutesthe major part of the benefits for most of the project roads (Annex 5, Table 6, including reduction in losses to perishable crops). The benefits over the life of the project roads is estimated to be approximatelythree times the construction cost (para. 4.18) or about CFA 2.0 billion (US$8.5 million equivalent, Annex 5, Table 6). About four-fifthsof the total benefits would consist of net value added.

C. Costs

5.10 In the economic evaluation,net-of-tax costs have been used; for unskilled labour a shadow wage rate of 50% of actual wage has been used. Although it is expected that the three types of constructionbrigades proposed would have slightly different unit constructioncosts (Annex 2) and that there will be minor cost variations depending on constructionmethods, average unit costs (but not average kilometre costs) are employed in the analysis to avoid bias. During the course of the project, the proposed project monitoring and planning section will be responsiblefor determining the most suitable construction and maintenance techniquesfor future feeder road programs on a technical and economic basis.

D. Conclusions

5.11 The evaluation identified562 km of feeder roads justifying construction and improvementduring the course of the project. (A list of these roads is provided in Annex 1, Table 1). These roads provide an overall rate of return of 27% includingvehicle operating cost savings and the net value added of cash crop production. A minimum acceptable rate of return of 12% has been applied for each individual road. In addition, the proposed project will include six cotton roads totalling 160 km outstanding from the Zou-Borgou Cotton Project and already identified by the Government as being of high priority (these roads have a minimum return of 11.5%). In addition about 120 km of cotton roads in the Zou-Borgou project or other roads should be selected for inclusion in the second and third years' programs.

5.12 In order to reduce risks associated with the project, only the first year's constructionprogram (Table 6) is considered final. The outline programs for subsequentyears (Table 7 and 8) will be subjected to further analysis by the project monitoring and planning element built into the program, described in Annex 4.

5.13 Social beneifts would representa significantaddition to the quantified economic benefits. These will include improved access to social services for about 200,000 rural inhabitantsor about 10% of the rural population.

5.14 Although included in the total benefits (para. 5.08), the estimated net increase in the foreign exchange earnings derived from increased exports of cotton lint, cotton seed and groundnuts, are particularlyimpor- tant for Benin with very limited foreign exchange resources. This net increase has been estimated at CFAF 600 million (US$2.4 million equivalent) and represents about 30% of total benefits. - 19 -

5.15 The main areas of risk associatedwith the propsoed project are:

(a) the level of road maintenance after project completion;

(b) farmer response which will, in part, depend upon Govern- ment efforts to set sufficientlyhigh farmgate prices for cash crops and to provide adequate extension services; and

5.16 Although economicallyjustified, the proposed project is not likely to bring about all potential benefits, mainly because of the Government'sin- adequate pricing incentives to farmers and inadequate supply of farm inputs for cotton. These factors led to a 50% decline in cotton production over the last two years. However, new farmgate prices as of November 1976 for cash crops now compare favourablywith prices in neighbouringcountries. Apart from being an incentive to increased production,the higher prices would also eliminate any illegal sale to neighbouringcountries that might otherwise occur. In addition, the Technical Assistance Project would provide the expertise required to improve the marketing situation and prepare a follow-up cotton developmentproject. As stated above (para. 5.06) the economic justification is based on a small incrementalproduction in the agricultural sector. The economic rate of return is not expected to be less than 15% under the most conservativeassumptions of a 40% drop in baseline production but with the same percentage increase in incrementalproduction as a result of the road improvements.

6. AGREEMENTSREACHED AND RECOMMENDATION

6.01 During negotiationsagreement was reached with the Government on the following:

(a) conditions and terms of reference for consultants providing technical assistance and for local personnel to be attached to the project on a permanent and temporarybasis (para. 4.07 and Annex 3);and

(b) the implementationschedule (Table 13), and arrangements for monitoring the project (para. 4.14 and Annex 4).

6.02 Assurances have been obtained from the Government on the following:

(a) that the Government will review the possibilityof obtaining the participationof local communitiesin the feeder roads improvement and maintenance program and will inform the Association of the results of such review not later than June 30, 1978 (para. 3.15); - 20 -

(b) that the Government will take all administrative, technical and financial steps necessary to maintain (i) the project roads to an agreed and acceptable standard after completion of the project, and (ii) 600 km of feeder roads, not included in the proposed project, to an agreed and acceptable standard from beginning 1978 (para. 3.13 and 3.14);

(c) that the Government will establish an Interministerial Committee to be operative no later than October 31, 1977 (para. 4.13);

(d) that the Government will submit to the Association for approval the annual work programs no later than three months before the beginning of each working year (para. 4.13);

(e) that arrangementsfor procurementwill be on the basis of internationalcompetitive bidding in accordance with Bank Group Guidelines if not otherwise agreed between the Government and the Association (para. 4.22);

(f) that the Government will employ consultants for technical assistance under terms of reference and conditions acceptable to the Bank (para. 4.22); and

(g) that the Government will make all necessary budgetary arrangements to ensure that the required local staff is recruited on time and that all costs to be met by Government (including taxes) are paid on time (para. 4.23 and Annex 3).

6.03 Creation of a Feeder Roads Division and the Opening of a Special Project Account by the Government would be conditions of effectiveness of the Credit (paras. 4.09 and 4.24).

6.04 Since agreement has been reached with the Government on the items mentioned in paragraph 6.01, and assurances have been obtained on the points in paragraph 6.02, the proposed project is suitable for a Credit to the People's Republic of Benin in the amount of US$5.5 million on standard IDA terms.

May 1977 Table 1

PEOPLES'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Highway Network, 1976

(in kilometers)

Roads Paved Laterite Earth Total

A. Maintained by DRB 759 2,592 1,532 4,883

1. Interstate 662 1,461 - 2,123

2. National 97 1,131 - 1,228

3. (Secondary and) feeder roads 1/ - - 1,532 1,532

B. Maintained by Min. of Interior and by local authorities - - 2,317 2,317

1. Feeder roads and tracks - - 2,017 2,017

2. Urban roads - - 300 300

TOTAL 759 2,592 3 849 7,200

1/ Including 425 km of the Zou-Borgou Cotton Project.

Source: Directorate of Roads and Bridges, and World Road Statistics, 1974 edition.

January 1977 Table 2

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Motor Vehicle Fleet (1967, 1970, 1975) (Motorcycles and agricultural tractors excluded)

(Units)

1967 % 1970 % 1975 /1 % /2

Passenger cars 6,953 65 7,011 65 7,800 65

Light trucks 2,679 25 2,662 24 2,880 24

Trucks and trailers 896 8 981 9 1,080 9

Special purpose vehicles 177 2 195 2 240 2

Total 10,705 100 10,849 100 12,000 100

/1 Estimated on the basis of total number of registered vehicles that changed license plates when name of country changed.

/2 Composition assumed to be the same as in 1970.

Note: Average annual compound growth is about 1.2% between 1970 and 1975 (5 years).

Source: Ministry of Public Works and Transport, February 1972, and Directorate of Land Transport, July 1976.

November, 1976 PUO'LN'S UP8 IC or OMM Table 3

-um 4 PJRCT- ElDeaditur« for' oad. 1970-1976 *mdtblr-?Lmsaiag (CFA? uLo)

1970 1971 1972 1973 1974 1975 1976 .btimate

I. uxpesinur1 including Dula up or nFosaFunmd Reserves 910 1e M 1126 2374 &742 =1

1. Actual Road ExPenditures 746 f 1935 1126 2374 2680 5919

a. Maintenance Expendituresl/ 288 401 474 402 401 404 427

b. Investment Expenditures 458 695 1461 724 1973 2276 5192

i. Outuide budget 403 5 d 1215 565 1700 1967 4948

ii. Ordinary budget 55 `187 186 159 273 309 244

2. RoeudFund Reservesî/ build up 164 21 - - - 62 -

Il. Financing _ ___ 1126 237 5919

1. bocal Sources 5660 561 I 671

Governaento Budget./ 277 -360 3145 263 377 550 402 b.- od Fbnd Revenue 230 249 ?89 249 223 225 235 c. Une of Road Fund 26 49 84 - 34 2. ForeignAid à3 1 U700= 5248

a. IDA - 508 256 149 657 636 1198

_b _ 317 - - 1o6 608 827 500

c. Nigeria - - 900 225 - - 2250 .. USAIDI/ - -_429 - 504 1300

?.FAC 86 - 119 85 6 8 n.a.

t. Other ------n.a.

]/ Za4suA a about CFAFlbOmillion per ye _ in adbmistrative expenditures. âf Aatual reserves of the Road Fund vere CIFA 288 million et the end of 1973. i( IIn!!Ui.S revenues from eguipuent rent4l end special allotaint of CFAF 110 million ir t197 for the streets of Lsoosso. * / Céle,< - year cstir'ates based on actual disbursements during '. TFY. __ ;;x supplied by DRBp,the Miniztry of Finance and ±oreigndonors and lenders. Table 4

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Government Revenues from Road Users, 1975

CFAF million

Taxes on: gasoline and gas-oil 560 vehicles 400 tires and tubes 160 spare parts n.a. Vehicle registrationfees 760 Warrant of fitness, driving permit, tag charges 85

1,965

No estimate has been made of the receipts from taxes on spare parts. However, with these included, the total direct revenues from road users would most likely be between CFAF 2 billion and CFAF 2.5 billion. This total does not include any other charges made on transit traffic.

Source: Directorate of Roads and Bridges.

November, 1976 Table 5

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Road Design Standards

Existing access in rural areas varies from footpaths to roads of variable width and quality which range in service from closure during most of the rainy season to nearly all-weather standards. Average annual daily traffic (which is highly seasonal) ranges between less than 1 to 40 v.p.d. while yearly volumes transportedvary from less than 100 to about 9,000 tons. It is proposed that feeder roads should be improved to all- weather, one lane standard with the following characteristics:

Clearing 8 - 10 m

Road formationwidth 6 m

Gravel surface width 4 m (where necessary)

Thickness of gravel 10 - 20 cm

Drainage Lateral ditches, fords and culverts (bridges only where the size of river or the volume of traffic warrants this).

Source: Mission

November, 1976 Table 6

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

1978 Improvement Program

No. Route | Length (km) I No.1 Route |Length (km)

I ~~~~~~~IiI

Lightl(Labour Intensive) Brigadel | | Heavy Brigade I

34 | Kpinnou-Ferme Rizicole | 3 | 7 | Tiele-Gouande j 36

30 | Aplahoue-Atome 1 32 | 8 | Natitingou-Boukombe | 43 1 I I 1 31 | Djakatome-Hagoume I 15 | 4 I Anandana-Tchomi Tchomil 15

I 1 50 | 5 | Anandana-Dompago | 28

I Il I| 122

Intermediate Brigade I I

17 I Dassa-Mbatekoukou | 29 I I

16 | Cove-Pagnouignan (Part) I 48 I I

I1 77 I I | total for I I I tI year: 249

Note: Numbers refer to numbers allocated to individual project roads used in Tables 1, 5 and 6, Annex 5 and on Map.

Source: Mission

November 1976 Table 7

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Provisional 1979 Improvement Program

No. | Route | Length (km) | No.1 Route |Length (km)

33 | Houin-km 6 to Lobogo | 6 j 15 | Cove-Koussin | 7

32 | Bopa-Gbokpodji | 16 | 18 | Gbedava-R.I.E. No. 2 j 10

20 Zogbodome-Akiza I 14 | 21 | Save-Igbodja I 32 I I _ I I | | 45 | 14 | Bemkereke-Bouanri | 25 I I I I 86

Light (Labour Intensive) Brigade 2 I I Heavy Brigade J

I i11 Kandi-Saa-Angaradebou I 33 136 I I I | Total for year: | 309 km

/1 Allocation of roads to brigades are tentative only and final allocations should be made in the light of first year's experience.

Note: Numbers refer to numbers allocated to individual project roads used in Tables 1, 5, and 6, Annex 5 and on Map.

Source: Mission.

November, 1976 Table 8

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Provisional 1980 ImprovementProgram

I Cotton Roads to be selected /1 I 15

I1 46 I I I i ~ ~ ~~~~~~~~~~~~II I I Light (Labour Intensive) Brigade 2 | | Heavy Brigade I

I I | 19 | Djebe-Ouessa-Kilibo I 44

I I I I I 131

I I I| Total for year: | 284

/1 Allocation of roads to brigades are tentative only and final allocationsshould be made in the light of first year's experience.

Note: Numbers refer to numbers allocated to individual project roads used in Tables l, 5, and 6, Annex 5 and on Map.

Source: Mission.

November, 1976 Table 9

PEOPLES'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Feeder Road Maintenance Program

1. As part of the proposed project, about 425 km of roads already improved under the Zou-Borgou Cotton Project will be maintained and eventually, as the feeder roads are constructed or improved under the proposed project, they will subsequently be maintained.

2. The initial maintenance program will include the following Zou-Borgou Cotton Project roads:

Km.

(a) Beniakora-Arbonga 9.0 (b) Baniakora-Arabenou 8.0 (c) Bankoto-Kokie 4.0 (d) Founagou-Aribonga 15.5 (e) Segbano-Kalale 85.0 (f) Liboussou-Ouarandji 4.0 (g) Ouarandji-Sokotindji 6.0 (h) Glazove-Aklampa 32.8 (i) Logozohe-Aklampa 38.7 (j) Tchetti-Kokondji 26.8 (k) Savalou-Kokondji 24.1 (1) Abomey-Tchetti 89.0 (m) Kokoro-Ouesse 25.0 (n) Guene-Karimamo 34.0 (o) Togon-Gbedaro 15.0 (p) Savalou-Monkpa 6.5 (q) Djalouka-Djalouba 2.0

. Total 425.4 km

Source: Ministry of Equipment and Mission

November, 1976 Table 10 Page 1 of 2

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Equipment and Tools to be Purchased (CFAF Millions)

Unit CosC _- Total Cost Equ±pmentNo e - o o i o O

200hp tractor with angladozer & ripper 2 1.5 20.6 3.6 32.7 3.0 55.2 7.2 65.4 140hp tractor with angledozer & ripper 1 1.1 20.6 2.7 24.4 1.1 20.6 2.7 24.4 125hp motor grader vith scarifier 3 0.9 16.7 2.2 19.8 2.7 50.1 6.6 59.4 lOOhp mechanical loader 1 0.7 12.6 1.7 15.0 0.7 12.6 1.7 1;.0 10/12t pneumatic tired towed roller 5 0.1 ' .2 0.3 2.6 0.5 11.0 1.5 13.0 65 hp agriculturaltractor 20 0.2 3.5 0.5 4.2 4.0 70.0 10.0 84.0 Grader attachment for tractor 5 0.1 2.3 0.3 2.7 0.5 11.5 1.5 13.5 Loader attachment for tractor 3 0.1 0.9 0.1 1.1 0.3 2.7 0.3 3.3 5,000 litre water truck 7 0.3 6-5 n,. 7.7 2.1 45.5 6.3 52.9 7/8t dump- truck 9 0.3 5.5 0.7 6.5 2.7 49.5 6.3 50.l 300 litre concrete mixer 5 0.1 1.3 0.2 1.6 0.5 6.5 1.0 8.0 Watar pump, petrol driven 5 0.1 0.6 0.1 0.8 0,5 3.0 0.5 4.0 Concretevibrator, petrol driven 4 0.1 0.9 0.1 1.1 0.4 3.6 0.4 4.4 3 2.5 m bottom dump trailer 26 0.4 0.4 0.1 0.9 10.4 10.4 2.6 23.4 Service truck 2 0.3 5.7 0.8 6.8 0.6 11.4 1.6 13.S Mobile stores trailer 2 0.1 1.4 0.,2 1.7 0.2 2.8 0.4 3.,> Rand tools and equipniet - - - - - 0.7 2.8 0.6 4.1 Mobile workshop, equipped 1 0.7 11.3 1.5 13.5 I 0.7 11.3 1.5 13.5 Articulated Plant transporter 1 0.6 9.4 1.3 11.3 0.6 9.4 1.3 11.3 Light Car 1' 1 0.1 0.7 0.1 0.9 0.1 0.7 0.1 0.9 Saloon car 2 0.1 2.0 0.2 2.3 0.2 4.0 0.4 4.' Station wagon 1' 2 0.2 2.1 0.2 2.5 0.4 4.2 0.4 5.0 Pick-up truck V 5 0.1 1.3 0.1 1.5 0.5 6.5 0.5 7.5 4 'Wheeldrive pick-up truck 4 0.2 2.2 0.2 2.6 0.8 8.8 O.8 10.4

34.2 414.1 56.2 50/4., 1/ To be purchased under contract for technical Assistance.

Note: Costi are as of November, 1976

Source: Mission and Coneultants'estimates

November, 1976 Table 10 Page 2 of 2

Light Intermnediate Reavy Unit Brigade B gae B Rigade Tools Cost No.1 Cost No. Cost No. Cost

Shovel 1,500 180 270,000 100 120,000 10 15,000

Hoe 1,000 120 120,000 40 40,000 5 5,000

Fork-hoe 1,000 100 100,000 20 20,000 5 5,000

Rake 1,000 50 50,000 20 20,000 5 5,000

Pickaxe 1,500 40 60,000 15 22,500 5 7,500

Crowbar 2,000 20 40,003 5 10,000 5 10,000

Matchet 500 150 75,000 50 25,000 20 10,000

Axe 1,500 50 75,000 10 15,000 2 3,000

Saw 1,500 20 30,000 5 7,500 - _

Wheelbarrow 12,000 12 144,000 5 60,000 2 24,000

Tape 5,000 10 50,000 5 25,000 2 10,000

Spirit level 3,000 5 15,000 5 15,000 2 6,000

-Mason'stools(set) 20,000 1 20,000 2 40,000 2 40,000

Carpenters' tools (set) 30,000 1 30,000 2 60,000 2 60,000

Mechanic'stool Kit (set) 100,000 1 100,300 2 200,090 2 200,000

Total: 1,179,000 680,000 400,500

say 1,200,000 say 700,000 say 400,000

Note: Costs are as of November, 1976

Source: Mission

November, 1976 PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Estimated AveragLeAnnual Costs for Each Brigade Type (Includina Equipment Depreclation) (Costs net of Tax and Duty)

Light Brigade Intermediate Brigade hea\vyBrigade CFAF millions US$ thousands CFAF millions US$ tbousands CFAF mitlions touands

1. Plant & Eauipment 11.00 44.90 23.6 96.3 4? .9 175.1

2. §Sps and E2ECEnt Maintenance 7.30 29.8() 1.3.8 56.3 23.8 97.1

3. Fuel and Lubricants 2.65 10.8'2 5.1 20.8 9.4 38.4

4. iages (Perian.ent Staff) 7.59 30.98 8.8 36.1 12.6 51.3

5, 3wgSSTcmporarY Staff 1S.12 61.71 10.3 42.0 2.8 11.6

6. laterials 4.62 18,84 5.6 22.8 7.3 29.8

7. General Stipervisior 1.05 4.29 1.6 6.5 8.5 34.7

8. T-chnical Assistanc1 *i.52 22.53 8.3 33.8 13.8 56.3

54.85 223.87 77.1 314.6 121.1 494.3

1/ 50Œ.of the technical essistance costs is chargod to the operation of the brigades.

Nïovember,1976 BENIN PEOPLES' REPUBLIC FEEDER ROADS PROJECT Pro ect Costs (Net of Tax) (CFAF million)

1977 1978 1979 1980 Total Local Foreign Total! Local Foreign Total Local Foreign Total , Local Foreign Total Local Foreign Total

1. Plant Equipement Purchase 2 28.6 370.8 399.4 5.6 43.3 48.9 -- - - - 34.2 414.1 448.3 2. Spares for Plant G Equip. - 3.2 47.5 50.7 3.6 54.4 58.0 3.6 54.4 58.0 - - - 10.4 156.3 3. Fuel 166.7 & Lubricants - - - 2.8 18.95 21.75 3.05 21.35 24.4 3.05 21.35 24.4 8.9 61.65 70.55 4. Wages (Permanent Staff) - - - 37.84 - 37.84 45.46 - 45.46 45*46 - 45.46 128.76 - 128.76 5. Waaes (Temporar Staff) - - - 28.25 - 28.25 43.37 - 43.37 43.37 - 43.37 115.1 - 115,1 6. Materials: i) Construction materials - - - 7.7 0.8 8.5 9.1 1.0 10.1 9.1 1.0 10.1 25.9 2.8 28.7 ii) Office supplies - 5.0 5.0 6.0 6.0 12.0 7.0 7.0 14.0 7.0 7.0 14.0 20.0 25.0 45.0 iii) Small consummables - 3.0 3.0 1.0 3.0 4.0 1.0 3.0 4.0 1.0 3.0 4.0 3.0 12.0 15.0 7. Technical assistance - - - 11.7 59.1 70.8 11.7 54.5 66.2 9.1 38.5 47,6 32.5 152.1 184,6 Sub-total 31.8 426.3 458.1 104.5 185.5 290.0 124.3 141.2 265.5 118.1 70.8 188.9 378.8 823.9 1202.7 Contingencies

Quantity increase: 3/ 1.7 24.1 25.8 10.2 16.4 26,6 12.4 14.1 26.5 11.8 7.1 18.9 36.1 64.7 97.8 Inflation 1+2 Mid (1.03-1) 77 3 0.95 12.55 13.5 0.95 12.55 13.5 Mid 78 (1.03x1:075-1)2 10o 0.98 110.45 11.43 Mid 79 (1.03x1l075 -1) 0 68 10.3 10.98 2 _1) 1 gl. 0.68 10.3 10.98 10.3 10.98 Mid 80 (1.03x1 .075 x1. 07-1) 270/ ~~~~~~~~~~~~~0.68 3+4+5+6+7 Mid 77 1.06-1) - 0.48 0.48 - 0.48 0.48 Mid 78 1.06x1l09-1) 159/o 14.3 13.17 27.47 14.3 13.17 27.47 Mid 2 79 1.06x1.09 -1) 26%1 31.37 22.58 53.95 31.37 22.58 53.95 Mid 80 (1.06x1.092xl.08-1) 36%. !42.5 25.48 67.98 42.5 25.48 67.98 Inflation sub-total 0.95 13.03 13,98, 15,28 23.62 38.90 32.05 32.88 64.93 42.5 25.48 67.98 90.98 .01 185.79 Grand Total 34.45 463.43 497.88|129.98 225.52 355.5 168.75 188.18 356.931172.4 103.38 275.98 j505.68 900.61 1486.29

1/ Plant and Equipmant for one labour intensive brigade is purchased in 1978. / First year spares purchased with squipment. 2/ 5 %/oallowed on equipment, 10 %oon ail other items. a. Source : Mission

March, 1977 N BENIN PEOPLES' REPUBLIC FEEDER ROADS PROJECT ImplementationSchedule

ACTIVITY 1t977 1978 197' 1980

INSTITUTION BUILDING EstabIlishinq Division of Rural Roads Establishinq Subdivision ot Rural Rorads

Estitllshin(q Intermrinisternli Cummittee *

Budilet allocation _ PROCUREMENT OF EQUIPMENT P,epire Bid(inq Documents

Call Ior Bîds A Evaluate Bîds _ Select supplhiers * Approve contracts

Deliver equipment

TECHNICAL ASSISTANCE - Prepare TOR for rechnical assistance _ Invite consultants to submit proposal Recerve consultants' proposal - Select consultants and avvard contract A Consultant provides services Reporting on project monitoring A A A i A A A A A A

PROGRAM PREPARATION - Preparation of Vearly program ...... - Present program to Intermin. Committee PROGRAM EXECUTION Heavy Brigade ......

Initermediate Brigrrde ...... -Light Briqade No. t ...... - Light Brigade No. 2 - Routine maintenance IDA SUPERVISION -Engineer A A A A A A A A A A

- Economîst A ,

Source: Mission

November, 1976 World Bank -16956 Table 14

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Estimated Schedule of Disbursements (US$ thousand)

Disbursement Undisbursed amount IDA Fiscal Year Quarter During Quarter Cumulated at end of Quarter

1 2 300 300 5,200 1978 3 1,400 1,700 3,800 4 600 2,300 3,200

1 200 2,500 3,000 1979 2 300 2,800 2,700 3 300 3,100 2,400 4 300 3,400 2,100

1 300 3,700 1,800 1980 2 300 4,000 1,500 3 300 4,300 1,200 4 300 4,600 900

1 300 4,900 600 1981 2 300 5,200 300 3 200 5,400 100 4 100 5,500 0

Source: Mission Estimate.

April, 1977 ANNEX 1 Page 1

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

AgriculturalBackground

A. The Environment

1. Benin may be divided into northern Sudanian and southern Equatorial type climates. Annual rainfall ranges, on average, from 1,300 mm in the south to 800 mm in the far north. Rainfall is generally insufficientto permit the successful cultivationof high-value tree crops such as coffee, cocoa, and rubber, and oil-palm yields are generally lower than in neighboring countries. However, favorable climatic conditions exist for the cultivation of food crops, groundnuts and cotton.

2. The fertility of soils is generally mediocre throughout the country, and in the south there are clear signs of soil depletion in some areas due to over-cultivation. Crop yields could be considerablyincreased in most parts of the country given adequate supplies of improved seed, fertilizer and pesticides at the right times of the year.

3. Benin has an estimated 9 million hectares suitable for cultivation. Of this area about 0.84 million hectares are cultivated by an agricultural population of about 2.1 million, or just over 0.4 hectares per capita (Table 1). Approximately two-thirds of this area is used for the production of food crops, mainly subsistence. Using traditionaltechniques it is unlikely that the area cultivated per capita will increase except in those regions where, due to inaccessibility,cash crop production is at a low level.

B. Agriculture in the Economy

4. It is estimated that the per capita gross national product (GNP) in 1975 was about US$140. Approximately 30% of GDP originates in the agricultural sector which also provides a living for approximately80% of the population. GDP per capita in the rural sector is very low, averaging about US$50.

5. The agriculturalsector provides 90% of the value of Benin's exports with palm products being the most important export crop, contributingabout one-third of total exports followed by cotton and groundnuts providing about 22% each. In the absence of other natural resources, the agriculturalsector will continue to be important to the economy.

6. In the five years to 1970 the rate of growth in agriculturewas estimated at about 5.5% per annum. Since 1970, although precise figures are unavailable,it is believed that the rate of growth has slowed down. ANNEX 1 Page 2

C. Main Crops

7. About 70% of the country's agriculturaloutput consists of subsistence root crops (yams and cassava) with another 20% comprised of cereals (Table 2). Cassava is grown widely in the main producing areas in the southern part of the country. Yams tend to replace cassava in the center and northern parts of the country (Table 3). Annual productionof root crops averages about 1 million tons, although it fell in 1975/76 to less than 900,000 tons; about 20% is marketed either locally or nationally. Annual cereal production amounts to about 300,000 tons, of which over 70% is maize which thrives best in the south-east and parts of the central area. Production of sorghum (80,000 tons) and millet (about 16,000 tons) is limited to the northern provinces of Atakora and Bourgou. About 15% of the cereal crop is marketed, equivalent to an annual volume of 50,000 tons. As with root crops, the provinces of Oueme and Atakora account for about 70% of market production. The combined market volumes of root crops and cereals (about 250,000 tons annually) are the largest single commodity flow on rural roads in the south- eastern and north-westernparts of the country.

8. Rice production is relatively modest but has developed rapidly in recent years through increased demand particularlyin the urban areas. Pro- duction is mainly in the northern part of the country where rice is grown under irrigation or lowland rainfed conditions,although several small schemes have been developed in the south. Rice production is estimated at 15,000-20,000 tons, having increased from only 5,000 tons in 1972/73. Although rice is a staple food in the producer areas, the majority of the crop is marketed.

9. Groundnuts and cotton are the main cash crops and they are grown primarily in the central and northern areas. Groundnut production amounts to about 40,000 tons annually and over 80% is marketed, and about 15% of that is exported. Zou province in the central part of the country accounts for 50% of the crop and Atakora province another 20%. Cotton productionhas fallen considerablyin the past three years from about 50,000 tons per year to about 20,000 tons in 1975/76. This has been due to a combinationof deficienciesin transport, input supply and extension services, unfavorable Government pricing policy and unfavorable climatic conditions. Borgou province in the north-east normally accounts for about 60% of the cotton crop with the remainder from Zou and Mono provinces in the center and south-west,but production has increased in Atakora which has natural potential for future growth. Given a restoration of support services and adequate grower incentives, cotton can regain its importance in the economy.

10. A main cash crop in the south is oil palm. About 150,000 tons of fruit bunches are processed each year, yielding about 25,000 tons of palm oil. Production of tomatoes has developed rapidly in recent years, and figures indicate an increase from about 10,000 tons in 1973/74 to an estimated 60,000 tons 1975/76. Coffee is a relatively insignificantcrop and less than 200 tons are marketed each year. Sheanut is produced in the north. ANNEX1 Page 3

D. AgriculturalPrices and Costs

11. Producer and consumer prices for agriculturalproduce have been fixed and controlled by Government since August 1976. Producer prices in November 1976 were as follows:

Groundnuts 40 CFAF/kilo Maize 30 CFAF/kilo Cotton (grain) 50 " Millet 20 Rice (paddy) 36 " Palm nuts 4.2 " Sorghum 25 " Haricot 55 " Yams 20 " Cassava 8

12. Government control of producer prices is intended to limit increases in the cost of living in urban areas in the case of food crops while providing the farmer with adequate incentive and producing Government revenue through the marketing of export crops. Comprehensivepricing policy is of vital importance to agriculturaldevelopment, and the established prices must provide adequate incentive to the producers if the results of investment for agricultural growth are to be satisfactory. The existing price structure for cash crops compares favorably with free market prices in neighboring countries; for maize crops, however, official producer prices have been insufficiently attractive.

13. The prices of agricultural inputs, such as fertilizersand pesticides, are subsidized by the Government, but it has been indicated by the MRD that as use increases and farmers' incomes rise, the subsidies will be progressivelyreduced. At present a form of revolving credit exists for farmers whereby inputs are provided at the start of the agricultural season and paid for after harvest. This appears to be working satisfactorily. The major crop using fertilizersand pesticides is cotton. Food crops benefit from the residual effects of cotton fertilizers. Fertilizer is also used on rice and hybrid maize.

E. AgriculturalPolicy Institutions

14. Government policy in agriculture is directed towards increasing domestic food production in order to lessen dependence on imported food and to encouragedevelopment of industrial crops such as oil-palm, groundnuts and cotton. The MRD through the regional CARDERs, together with autonomous specializedagencies, is responsible for planning and action in this field.

15. The MRD is responsible for policy matters and coordinationin the agriculturalsector and provides agriculturalextension services, livestock, fisheries, rural engineeringand forestry. The Directorate of Agriculture itself is small and operates mainly through the regional CARDERs. A directorate of planning was created in 1976. The CARDERs are responsible in the respective regions for all aspects of agriculturaldevelopment including extension services and marketing of crops. MRD is also responsible for ANNEX 1 Page 4 coordinatingthe activities of seven state enterpriseswhich are involved with the developmentof specific crops or are responsiblefor specific activities in the sector. The most important is the Societe Nationale pour le Developpe- ment Agricole (SONAGRI)which is responsible for purchasing certain crops and distributingcrop inputs throughout the country. Two additional state enterpriseshandle the marketing and processing of the main cash crops--the Societe Beninoise pour le Palmier a Huile (SOBEPALM)for oil palm and the Societe Nationale Industriellepour les Crops Gras (SONICOG) for palm kernels and groundnuts. The marketing of both cash crops and subsistencecrops are now almost entirely in the hands of CARDERS or the state enterprises.

16. Comprehensivedata on investment in the agriculturalsector and its importance in relation to total Government expenditurewere not available to the mission. Developmentprograms in the sector have been mainly financed from foreign sources such as the Fonds Europeen de Developpement (FED), the French Fonds d'Aide et de Cooperation (FAC) and IDA. Investment from such sources have amounted to about CFAF 10.5 billion over the period 1971-1975 or about CFAF 2.5 billion annually. The Zou-Borgou Cotton Project financed by IDA, FAC and Government accounted for about one-third of foreign investments in the agriculturalsector during the last five years. Tentative proposals have been made by the Government for separate donors (FED, West Germany) to finance rural developmentprojects on a regional basis during the next 5-year plan (commencing1977).

F. Bank Group AgriculturalInvestment

17. There have been two IDA Credits in the agriculturalsector in Benin, the Hinvi AgriculturalDevelopment Project (Cr. 144-1 DA, and 144-2 DA) and the Zou Borgou Cotton Project (Cr. 307-DA).

The Hinvi AgriculturalDevelopment Project

18. The project, the main element of which was oil palm planting (6,000 ha), has been completed as scheduled, even though marginal climate conditions has delayed the growth of trees and probably reduced prospectiveyields to 75% of appraisal estimates. Prices of oil palm products have, however, increased, so that revenue to cooperativesmay be comparable to appraisal estimates.

The Zou-BorgouCotton Project

19. The main objective of the project was to increase seed cotton production in the provinces of Zou and Borgou (60% of the country's area) from 25,000 tons in 1970 to 56,000 tons by 1974. This was in line with Govern- ment's objective to improve the country'sbalance of payments and to improve the standard of living of farmers. This expansionwas to be brought about by increasing the areas planted in cotton from 29,000 to 59,000 ha, and the number of growers from 29,000 to 41,000. In addition to increasing cotton production, the productivityof other crops grown in rotation with cotton ANNEX 1 Page 5 was to be improved through the residual effects of fertilizers applied to cotton. The project was to follow up on a cotton development project carried out with French technical assistance since 1963.

20. Other objectives of the project were to (i) staff and equip the recently established SONACO to administer agriculturalextension, credit and primary marketing services; (ii) establish a revolving fund to supply short- and medium-term credit to cotton growers; (iii) construct two new ginneries; (iv) improve feeder roads; (v) conduct applied research; and (vi) undertake a feasibility study for agriculturaldiversification in the project area. The credit was to cover 48% of the project cost (US$12.7 million) with FAC con- tributing 25% of the financing.

21. Although the Credit Agreement was signed in May 1972, effectiveness was delayed until April 1973 pending the appointment of an acceptable Project Director. In September 1973 the Benin Government decided te take over cotton ginning and marketing from CFDT and to entrust these activities respectively to SONACO, the state agency implementingthe project, and SOCAD, the state marketing agency. CFDT is a French company which, in accordance with the Credit Agreement, managed the Government's together with its own ginneries in the project area and supplied technical and marketing services to the project. In 1973, a Benin delegation visited Washington to clarify Govern- ment's decision and to seek IDA's agreement to the proposed changes. IDA agreed to renegotiatethe credit agreement provided satisfactoryarrangements could be worked out between Government, SONACO and the French agencies on project organizationand management and marketing. Meanwhile, Government would refrain from claiming IDA disbursementsagainst project expenditures incurred after the decision to modify existing arrangements.

22. Early in 1974, SONACO entered into a new technical assistance agreement with CFDT; the French Government expressed willingness to continue its financial support to the project. Early in 1975, however, CFDT staff were withdrawn after disagreementswith Government.

23. The consequencehas been the collapse of the organizationand management of the project which, in turn, has resulted in a severe setback to Benin's cotton industry. Originally, the organizationand management of the project had been conceived as a vertical arrangement around the state enterprise,SONACO, which was directly responsible for input procurement and distributionand, with the technical support of SATEC and CFDT, for extension services including local field staff training, primary marketing and ginning. CFDT was responsiblefor cotton exports on behalf of the state. This organization has been progressively eroded through Government action. First, the responsibilityfor exports was transferredto the inexperiencedlocal agency, SOCAD, and the extension services from SONACO to the CARDERs. The area under cotton, about 40,000 ha in the 1974 growing season, has been progressively reduced to about 22,000 ha in 1975 and 1976. The shortfall in the output of seed cotton is even more marked: AANNEX1 Page 6

Growing Season 1971 1972 1973 1974 1975 '000 Tons ------

Appraisal Estimate 34 41 50 56 56

Actual 37 42 37 24 18

The shortfall in 1973 was more than offset by favorableworld prices.

24. Benin was affected by the southward extension of the Sahelian drought. The most important reason for the fall in production, however, was the failure to procure and distribute fertilizersand insecticideson time. This led to lower yields particularlyin Zou, and, in combinationwith higher food prices, to some switching to food crops. The failure to deliver inputs stemmed from the difficult world supply situation at the time; this difficulty was made worse by Benin's poor credit standing and by generally poor management on the part of SONACO. Another reason for the poor results was the abrupt transfer out of SONACO of many of its most experienced and senior field staff by the Ministry of Rural Development. In addition, the quality of cotton has deter- iorated as a result of a lack of proper supervision. The decline in output, low export prices associated with poor cotton quality and high costs have resulted in heavy losses to the economy, estimated at about US$10 million for 1974/75 partly compensatedby a STABE arrangementwith EEC. In summary, at the fourth anniversaryof the credit agreement, the cotton sector in Benin had retrogressedto the level of the late 1960's.

25. While having failed to achieve its main objectives,the project has succeeded in promoting the developmentof effective farmer groups able to organize primary marketing of cotton and to maintain participants'credit accounts. These groups operate like small cooperativesand some of them have demonstratedtheir ability to organize the distributionof farm inputs, to market household items, and to invest their savings in rural community development (schools,wells, dispensaries). Other significantbenefits of the project have been the literacy program, the developmentof hybrid maize, increased use of ox traction and progress in rice production.

26. SONACO has maintained activities not directly affected by Govern- ment's decisions, such as the operating of the ginneries,reasonably well. Accounting procedures are being improved with the help of a consultant financed by FAC: The 1974/75 accounts have been audited and satisfactoryarrangements have been made to ensure the audit of 1975/76 accounts.Ginneries have been satisfactorilymaintained and operated during the last campaign. Finan- cing of the campaign is secured by the "bareme" which allocates the proceeds of the cotton marketing to the agencies involved.However, the SONAGRI transport fleet is not satisfactorilyequipped and operated, and this has caused delays in the marketing of seed cotton and lint. In addition, lack of proper coordination with SOCAD and congestion at the harbor have resulted in storage problems of cotton bales in Cotonou. ANNEX 1 Table 1

PEOPLES' REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Rural Population, Cultivated Area and Population Density (1975)

Province Rural /1 Total Rural Cultivated % of Cultivated Population Area 2 Population Area Total Area per (1000) (1000 km ) Density2 (1000 ha) Area Rural inhab. _(per/km ) (in hectares)

Atakora 380 31.2 12.2 172 5.5 0.45 Borgou 395 51.0 7.7 103 2.0 0.26 Zou 400 18.7 21.4 165 /2 8.8 0.41 Oueme 410 4.7 87.2 265 56.4 0.64 Atlantique 200 3.2 62.5 61 19.1 0.31 Mono 300 3.8 78.9 72 /2 18.9 0.24 Total: 2085 112.6 18.5 838 7.4 0.40

/1 Excludes non-agricultural rural population (fishing villages).

/2 1974 figures.

Source: Ministry of Rural Development and CARDER Annual Reports.

November, 1976 ANNEX 1 Table 2

PEOPLES' REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Agricultural Production 1972/73 - 1976/77

(Volume in thousand tons; price in CFAF per kg; value in CFAF million)

Crop 1972/73 1973/74 1974/75 1975/76 1976/77 /2

Maize: Volume 207 238 229 217 135 Farmgate price /1 13 13 17 25 30 Production value 2691 3094 3893 5425 4050

Sorghum: Volume 50 78 79 52 86 Farmgate price 13 13 15 20 25 Production value 650 1014 1185 1040 2150

Rice: Volume 5 8 8 13 18 Farmgate price 20 20 22 30 36 Production value 100 160 176 390 648

Yams: Volume 535 500 428 445 422 Farmgate price 8 8 10 12 8 Production value 4280 4000 4280 2720 3376

Cassava: Volume 615 459 570 340 422 Farmgate price 6 6 6 8 8 Production value 3690 2754 3420 2720 3376

Groundnuts: Volume 42 60 42 35 41 Farmgate price 19 19 22 40 40 Production value 798 1140 924 1400 1640

Cotton: Volume 50 45 31 23 n.a. Farmgate price 28 28 42 45 50 Production value 1400 1260 1302 1035 n.a.

/1 Official prices for all crops except fruit and vegetables were introduced in 1976. Except for cash crops such as cotton and groundnuts, prices in other years reflect average prices paid to farmers.

/2 Data for first half season only. ANNEX 1 Table 2 Page 2

Crop 1972/73 1973/74 1974/75 1975/76 1976/77 /2

Tomatoes: Volume n.a. 10 il 61 n.a. Farmgate price n.a. 40 60 70 75 Production value n.a. 400 660 4270 n.a.

Total Agricultural Production Value:

Current value (CFAF Million) n.a. 13822 15840 21620 n.a.

Source: Ministry of Rural Development.

November, 1976 ANNEX 1 Table 3

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Agricultural Production in 1974/75 by Region (in tons; in hectares; in kg/ha)

Crop Atakora Borgou Zou Oueme Atlantique Mono Total

Maize: Production 5580 23650 49870 105070 26720 17630 228520 Area 7470 19540 46180 164900 39310 24240 301640 Yields 740 1210 1080 640 680 730 760

Sorgho: Production 50360 25530 2920 - - - 78810 Area 70820 38960 5270 - - - 115050 Yields 710 660 550 - - - 685

Rice: Production 4740 2130 390 - - 510 7770 Area 3270 1330 270 - - 410 5280 Yields 1450 1600 1440 - - 1240 1470

Yams: Production 141520 84020 191350 10400 - 1000 428290 Area 18740 12660 13890 1600 - 125 47015 Yields 7550 6640 13780 6500 - 8000 9110

Cassava: Production 16140 22000 54080 334700 86810 55790 569520 Area 5700 2800 9880 54180 14350 7420 94330 Yields 2830 7860 5470 6180 6050 7520 6040

Groundnuts: Production 9740 2890 21640 4370 1240 1740 41620 Area 12450 2100 29400 8930 2580 2870 58330 Yields 780 1380 740 490 480 610 710

Cotton: Production 730 17670 6390 1350 - 4470 30610 Area 1860 21230 13800 2220 - 9170 48280 Yields 390 830 460 610 - 490 630

Tomatoes: Production - - - 1800 2510 6980 11290 Area - - - 480 970 1170 2620 Yields - - - 3750 2590 5965 4310

Source: Ministry of Rural Development and CARDER Annual Reports.

November, 1976 ANNEX 2 Page 1

PEOPLES' REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Light (Labor Intensive), Intermediateand Heavy (Mechanical)Brigades

A. Description of Construction and ImprovementOperations

1. From field inspections,and taking into account of the expected traffic flows, weather conditions and soil types, the scope of improvement work required is covered by the following operations, although their relative importancevaries:

(i) clear and roughly shape the formation;

(ii) raise the formation to avoid flooding or where soils are saturated;

(iii) improve drainage by providing or repairing culverts or minor bridges;

(iv) import selected materials to improve the existing soils; and

(v) spread imported materials, shape and compact.

2. These operationsmay be done by hand labor or they may, apart from (iii), be done by the maximum use of machines and a minimum of hand labor. The amount of work required in an average case would typically be:

(i) clear approximately31ha per km of light bush cover and move approximately 700 m per km of materials a distance not exceeding 5 m.;

(ii) raise the formation over 10% (or less) of the total length by an average of 30 cms.;

(iii) provide one 60 cm or 80 cm diameter pipe culvert every two kilometers;

(iv) import 250 m lateriticmaterials or other selected material not more than 4 km haul; and

(v) shape road section, water and compact.

3. The main regional variation so far as road building is concerned is that good quality, non-plastic laterites are common in the north of the country but less so in the south. Also, surplus unskilled labor can be found towards the coast fairly easily but becomes progressivelymore difficult ANNEX 2 Page 2

as one moves inland. (This may make it necessary to supplement the equipment of the Labor Intensive Brigade described below, which would be possible within the contingenciesallowed).

4. Because of variations in the labor supply and other reasons, three types of operation would be incorporatedinto the project as described in the following paragraphs.

B. Light (Labor-Intensive)Brigades

5. In areas where a surplus of unskilled labor exists and where the scope of work is suitable, it is intended to construct and improve roads using the maximum amount of hand labor and only the minimum of relatively simple plant--sufficientto ensure that the standard of the finished work is acceptable and comparable to that of mechanized brigades. Thus, clearing, shaping, raising the formation, digging and loading selected materials and initial spreading will all be done by hand. However, it is essential that final shaping and compactionbe done by machine. The scale of these operations and the plant to be employed is consistent with a predominantlynon-mechanized organization.

6. Equipment, plant, materials and labor required for the light brigades are shown in Tables 1, 4 and 5 which also give estimated costs. The precise output of a light brigade will depend very much on the amount of material to be moved and especially the distance over which imported materials must be transported. The nature of trailer transportmakes it unsuitable for moving large amounts over long distances and the brigade would operate ideally where hauls are up to 2-3 km and not more than 40% of the road requires gravelling. TTnderthese circumstances,the annual output is estimated at 45-50 km. One light brigade would commence work in January 1978, and a second, one year later, each employing about 250 laborers.

C. IntermediateBrigade

7. Where unskilled labor is not so readily available or where the work calls for more mechanized inputs, an intermediatebrigade is planned which still relies largely upon labor-intensivemethods for loading but uses mechanical means for clearing, rough shaping and raising the formation, as well as for final shaping and compaction. An intermediatebrigade would employ up to 150 laborers and is estimated to have an annual output of 70 to 75 km of improvements. Ideally, hauls should still be limited to about 3 km average, but this type of brigade is more suitable to work through heavier bush cover and where the amount of earthworks required on the formation itself is significantlyabove the minimum. One intermediatebrigade would commence operations in January 1978. Detailsof equipment, plant, materials and labor for the intermediatebrigade are given in Tables 2, 4 and 5. ANNEX 2 Page 3

D. Heavy Brigade

8. Where there is a shortage of labor and where there is a need to haul selected materials over longer distances, a fully mechanized brigade would be used. Although the whole brigade is planned as a balanced unit, it has the ability to detach a part of its equipment to form a subsidiary maintenance unit, while still retaining the ability to function efficiently. This also allows a small reserve of equipment that can be used to keep the other brigades in operation in the event of extended breakdown to a vital piece of equipment. The heavy brigade has a staff of about 100, over half of whom are skilled or semi-skilled. Details of equipment,plant, materials and labor for the heavy brigade are given in Tables 3, 4 and 5. Annual output will depend on circumstances,but it is estimated to average 125 km a year.

E. Costs Estimates

9. In comparing costs or works by the three types of brigade, the main assumptionsmade in planning output are as follows:

(i) costs in Tables 1 through 5 refer to November 1976 and do not include tax or duty; except where stated, shadow prices have not been used;

(ii) plant life is 8,000 hours and annual depreciationis estimated on a life expectancy of 7 years, allowing about 1,200 hours work per annum;

(iii) overall equipment availabilityis 80% for the heavy brigade, and 90% for the intermediateand labor intensive brigades which are not so reliant on individual plant items;

(iv) output of plant is below the average standard of operator productivityand comparable to previous experience in Benin; and

(v) labor output corresponds to experiencegained on similar work in Benin, as checked against output in other parts of Africa.

F. Average ConstructionCosts

10. Tables 1 through 5 give the costs of operations by brigades, but to reflect the true estimate of constructioncosts, the following factors should be added:

(a) General Supervision

Tables 6 gives cost estimates for equipment and vehicles used for general supervisionof the project, excluding technical assistance. Including local supervisorystaff and office supplies etc., the total general supervisioncosts are estimated at CFAF 35.6 million annually, and have been allocated as follows: ANNEX 2 Page 4

Labor Intensive Brigades 1.05 million CFAF each per annum = 5.3 mil CFAF total Intermediate Brigade 1.6 " per annum = 4.8 " " " Heavy Brigade 8.5 2 = 25.5 " "

35.6

(b) Technical Assistance

Technical assistance is detailed in Annex 3 and is estimated to cost approximatelyUS$750,000 at November 1976 prices. This assistancewill be concerned partly with supervision of works and partly with general training and institutionbuilding. It is assumed that half the cost of technical assistance (i.e. US$375,000) should be charged to the constructionprogram, and this amount has been allocated between the brigades in proportion to their estimated output as follows:

Light Brigades, output 250 km in 5 brigade years IntermediateBrigade, output 220 km in 3 " Heavy Brigade, output 375 km in 3 "

Total 845 km

The proportionsof technical assistancecharged to each brigade per year are approximately:

Light brigade 6% Intermediatebrigade 9% Heavy brigade 15%

In addition to constructingand improving roads, the brigades will also fulfill a maintenance function on the feeder road network, commencingwith about 425 km of roads already improved in the Zou-Borgou area, and adding the maintenance of roads as they are improved. In order to carry out this operation without stopping the work of the rest of brigade, the heavy mechanizedbrigade is able to detach a regrading and regravellingunit consistingof:

1 tractor with angledozerblade and ripper 3 agriculturaltractors 1 grader attachment 1 loading attachment 1 10/12t. towed roller 1 water truck 8 t. dump trucks according to need ANNEX 2 Page 5

Variations of the team are possible according to need, and the other brigades also have the capacity for maintenance work, although to a more limited extent. The work required for road maintenance on roads of this nature is limited to one light grading operation annually, repair of pot-holes by hand, some grass cutting, and routine culvert and drainage repairs. -The annual cost of this is estimated at:

CFAF per km

Light grade at a rate of 10-16 km per day 14,000

Hand control of pot holes, side drains and vegetation at 1 laborer per 10-12 km 6,000

Culvert repairs at 1 culvert per 2 km and 10% repairs per year laborer 4,500

24,500

CFAF 25,000

Commencingwith 425 km and rising to about 1,300 km by the end of the project, the total costs of maintenanceduring the three year program will be CFAF 67 million. Allocating this between brigades in proportion to their estimated outputs, operating costs due to constructionwork are to be reduced by:

CFAF million per brigade p.a.

Light Brigades 6% of 67.5= 4.05 IntermediateBrigade 9% of 67.5= 6.08 Heavy Brigade 15% of 67.5= 10.13

11. Applying these corrections,average constructioncosts including equipment amortizationare:

Light Brigades: Financial cost per brigade year CFAF 52.6 million or CFAF 1,052,000per km. Applying a 50% shadow price to unskilled labor gives an economic cost of CFAF 901,000 per km. Intermediate Financial cost per brigade year CFAF 73.3 million Brigade: or CFAF 1,000,000per km. Shadow pricing unskilled labor reduces this to CFAF 930,000 per km. Heavy Brigade: Financial cost per brigade year CFAF 115.0 million or CFAF 921,000 per km. Shadow pricing unskilled labor reduces this to CFAF 910,000 per km.

The conclusion is that the estimated economic costs of the improvementworks are practically the same for all three brigade types. PEOPLE'S REPUBLIC OF BENIN I?EEDERROADS PROJECT h a Intensive Brigades) Plant and EupmenL Comte for one Brigade (CFAF millions)

Itemlrl Description No. J.itost Total Cost| Anriual k?fa Ir CosLt. Fuel hL U C4Qt in

l | B r R -| o |~C> .4 O:G | Oa | | Cr oO

5.6 43.3 62 7 5651 0.4 6.9 1.0 8.3 0.25 2.4 1.45 4.1

1) Poss5 il3tty of locd l muaipufacturig being exploreà

Soulrce: Mission F

Noveinhie r, 1 '97r6 PEOPLE'S REPUBLIC OF BENIN FEEDER ROADS PROJECT Intermediate Brigade: Plant and Eguipaent Costs (CFAF million;.)

Item Description No. Unit Cost Total Cost Annual Repair Co0t Fuel & Lub.Cost in __ Bri-'t 3X gade > 0 xX J o W Ut O 14 ' >1 O 1-4 140O1 41 1 200 hp tractorfangle dozer & ripper 1 .5 27.6 .6 32.7 1.5 27.6 3.6 32.7 0.2 3.3 0.4 3.9 0.15 1.10 0.65 1.9 2 125 hp motor grader+ Sacrifier 1 .9 16.7 .2 19.8 0.9 16.7 2.2 19.8 0.1 2.0 0.3 2.4 0.10 0.75 0.45 1.3 3 10/12t. P.T. Towed Roller 1 ).1 2.2 .3 2.6 0.1. 2.2 0.3 2.6 - 0.3 0.0 0.3 - - - 4 65 hp Agricultural Tractor 5 1.2 3.5 .5 4.2 1.0 17.5 2.3 20.8 0.1 2.1 0.3 2.5 0.2 1.8 1.05 3.05 5 Loader Attach- ment 1 D.1 0.9 .1 1.1 0.J. 0.9 0.1 1.1 - 0.1 0.0 0.1 - - - - 6 5,000 1. water truck 2 D.3 6.5 0.9 7.7 0.6 13.0 1.7 15.3 0.1 1.5 0.2 1.8 0.05 0.30 0.2 0.55 7 7/8t. Tipper Truck 1 D.3 5.5 0.7 6.5 0.3 5.5 0.7 6.5 0.0 0.7 0.1 0.8 0.05 0.2 0.15 0.40 8 2.5m 3 Bottom-duccp Trailer 1 ) 10 3.4 0.4 .1 0.9 4.0 4.0 1.0 9.0 0.1 0.9 0.1 1.1 . _ _ 9 300 1. Concrete Mixer 1 0.1 1.3 0.2 1.6 0.1. 1.3 0.2 1.6 0.0 0.2 0.0 0.2 0.1 0.05 0.15 10 Water Pump, petrol driven 1 ).1 0.6 0.1 0.8 0.1 0.6 0.1 0.8 0.0 0.1 0.0 0.1 0.05 0.05 0.1 il Concrete Vibrator, petrol driven 1 0.1 0.9 0.1 1.1 0.1 0.9 0.1 1.1 0.0 0.1 0,0 0.1 0.05 0.0 0.05 12 Service Truck 1 ).3 5.7 0.8 6.8 0.3 5.7 0.8 6.8 0.1 0.6 0.1 0.8 0.05 0.2 0.15 0.4 13 Mobile Stores l D.1 1.4 0.2 1.7 0.1 1,4 0.2 1.7 - 0.2 0.0 0.2 - - - 14 l1and tools & Equip- ment _ _ _ _ 0 0.5 0.1 0.8 0.1 0.9 0.1 1.1 _ - _ _ 9.t, 97.8 13.4 10.6 0.813.0 1.6 15.4 0.6 4.55 2.75 7.90 1) Possibility of local manufacturing being explored Source: Mission ÎÉf

November, 1976 » \ PEOPLE'S REPUBLIC OF BENIN FEEDER ROADS PROIECT lIeavy Brigde: Plant and Equipinent C0ots (CIAF million)

Iteti Description o. Unit Cost Total Cost nnual Repair Cost Fuel & Lub.Cost

gade Co , |Cd | |kj 0 |j a o0 MI 0o | | | 0v |

1 200 hp tractorA angle dozer & ripper 1 1.5 27.6 3.6 32.7 1.5 27.6 3.6 32.7 0.2 3.3 0.4 3.9 0.15 1.10 0.65 1.9 2 140 hp tractor4-angle dozer & ripper 1 1.1 20.6 2.7 24.4 1.1 20.6 2.7 24.4 0.1 2.5 0.3 2.9 0.15 1.05 0.65 1.85 3 125 hp motor grader 4- scarifier 2 0.9 16.7 2.2 19.8 l.8 33.4 4.4 39.6 0.2 4.0 0.5 4.7 0.2 1.5 0.9 2.6 4 100 hipmechanical 1oadca 1 0.7 12.6 1.7 15.0 0.7 12.6 1.7 15.0 0.1 1.5 0.2 1. 8 0.1 0.55 0.35 1.0 5 10/12t. P.T. towed Roller 2 0.1 2.' 0.3 2.6 0.2 4.4 0.6 5.2 0.0 0.6 0.1 0.7 - - - - 6 65 hp Agricultural Tractor 5 0.2 3.5 0.5 4.2 . 0 17.5 c.5 21.0 0.1 2.1 0.3 2.5 0.2 1.8 1.05 3.05 7 Grader Attachrment I 0.1 2.3 0.3 2.7 0.1 2.3 0.3 2.7 0.0 0.3 0.0 0.3 _- - - 8 Loader Attaclhment 2 0.1 0.9 0.1 1.1 0.2 1.8 0.2 2.2 0.0 0.1 0.0 0.1 - - - - 9 5,000 1. Water Truck 3 0.3 6.5 0.9 7.7 0.9 19.5 2.7 23.1 0.2 2.2 0.3 2.7 0.10 0.5 0.3 0.9 10 7/8t. Ttpper Truck 6 0.3 5.5 0.7 6.5 1.8 33.0 4.2 39.0 0.2 4.0 0.5 4.7 0.3 1.2 0.8 2.3 il 300 1. CoricreteMixer 2 0.1 1.3 0.2 1.6 0.2 2.6 0.4 3.2 0.0 0.4 0.1 0.5 0.0 0.2 0.1 0.3 12 Water Pump, petrol driven 2 0.1 0.6 0.1 0.8 0.2 1.2 0.2 1.6 0.0 0.1 0.0 0.1 0.0 0.05 0.05 0.1 1i Cotucrete Vibrator petrol driven 1 0.1 0.9 0.1 1.1 0.1 0.9 0.1 1.1 0.0 0.1 0.0 0.1 0.0 0.05 f.0 0.05 14 Setvice Truck 1 0.3 5.7 0.8 6.8 0.3 5.7 0.8 6.8 0.1 0.6 0.l 0.8 0.05 0.2 0.15 0.4 15 Mobile Stores Trailer I 0.1 1.4 0.2 1.7 0.1 1.4 0.2 1.7 0.0 0.2 0.0 0.2 - - _ 16 liai-dtoots & Eqlpuei _ _ _ _ 0.1 0. 3 0.1 10.5 °0.?2 0 o0.1 o.7 7 10.3 184.8 "4.7 219.8 1.4 22.4 2.9 ?6.7 1.25 8.20 5.00 14.45 Soturce:Misato.n

Noveitrber,1976 PROPLE?S Eupmlic 0LILN FiEER "Da PI)UC? Annual Labour Comte Hsavy Irizada Imtem_djate Brimbadt rlel Decriptlon 09ily Rate No. Daily Co t No. Daily Coat ne. 1X11y co

Pereneot Suif Technicien Engineer i/c 2, 0 1 2,500 1 2,500 1 2,5f0 Supervisor 1,600 1 1,600 1 1,600 1 1,600 Anet. Sup.rvisor8 1,400 2 2,800 2 2,800 2 2,800 Clark 1,000 1 1,000 1 1,000 1 1,000 Asat. Accountant 1,000 1 1,000 2 2,000 2 2,000 Typiat/Secretary 750 1 750 1 750 1 750 Machanices 900 2 1,800 1 900 1 900 Asnt. Mechanica 450 3 1,350 1 450 - Storeman 750 1 750 1 750 1 750 Operators 900 8 7,200 3 2,700 2 ,800 Drivers 700 20 14,0>0 9 6,300 8 5,600 Masons 800 2 1,600 2 1,600 1 800 Concretors 600 2 1,200 2 1,200 1 600 Assistants 450 4 1,ffl 4 1,800 2 00 Labourera 360 10 3,U6 10 3,600 10 3,600 Guards 450 2 0 2 900 2 900 43,f50 30,850 26,500 14.67 Social Security: 6f42 4.504 50.252 35.354 l.... itmporary Staff Plant Asate. 450 19 8,550 17 7,650 - Labourera 360 20 7,200 120 43,200 200 72,000 Foremen 600 - 3 1,800 5 3, 000 Ganger 450 - - 10 _5 20 q.0 15,750 57,150 84,000 Total Yearly Costa: 250 day. x 50,252 * 250 days x 35,354 * 250.daya x 30,369 CPAP 12.56 mil. CIPA 8.84 mil. CFAF 7.59 .i1. 180 daye x 15,750 a 180 day. x 57,150 - 180 daye x 84,000 CFA? 2.84 " CFAF 10.29 CFAF 15.12 Total: CFAF 15.40" lotal: CIFA 19.13 " Tot.l: CFA? 22.71 '

Source: Misaion

November, 1976 PEOPLE'S REPUBLIC OF BENIN ANNEX 2 FEEDER ROADS PROJECT Table 5 Annual Materials Cost Excluding Major Structures (CFAF) Length of :4aterial Description Amount Unit Unit Total Route to be Required Cost Cost improved for:- (CFAF) annually (Avex.age km) Light. Brig,àade 50 Culverts Cement 75 tons 15,000 1,125,000 & Drainage Cosrse aggregates 150 m3 1,100 165,000 (25 No. 0.60 m Fine aggregates 150 m3 500 75,000 Shutterina Item 125,000 Reinforcement Item 125,000 Office Stationery & office supplies Item 3,000,000 Light Brigade : Tot 1: 4,615 00

Intermediate Brigades 75 Culverts Cement 120 tons 15,000 1,800,000 & Drainage Coarse aggre- 3 gates 240 m 1,100 264,000| (40 N-. Fine aggregates 240 m 3 500 120,000 0.60 m e5 Shuttering Item _ - 200,000 Reinforcement Item - _ 200,000 Office Stationery & office supplies Item _ _ 3,000,000 Intermediate Brigade: Total: 5,580,000 Heavw Brigades 125 Culverts Cement 200 tons 15,000 3,000,000 & Drainag Coarse aggre- 1,100 44,0o0 gates 400 m3 (65 No. Fine aggregates 400 m c00 200,000 0.60 m ) Shuttering Item _ - 325,000 Reinforcement lTtem _ _ 325,000 Office Stationery & office supplies _ _ 3000,0003Item Heavy Brigade: Total: 7,290,000 CFAF

Source: Mission PEOPLE'S REPUBLIC OF BENIN FEEDER ROADS PROJECT General Project Supervision - EquipRnent and Vehicles Costa (CFAF tnillion) tem Description No. Unit Cost Ttal Cst 1/ nnual Repair Cost Fuel & Lub. Cost in

i - -A O' w Bri-ade |x c.> ~w uw1 c> wtoi.i w OPc> 1 C1 1 C E- j cd a-C- ______.4 H ,4 .~4

1 MobiLe Workshop l 0.7 11.3 1.50 13.5 0.7 11.3 1.5 13.5 0.1 1.4 0.2 1.7 0.05 0.2 0.15 0.4 2 ArticulatedPlant. transporter 1 0.6 9.4 1.3 11.3 0.6 9.4 1.3 11.3 0.1 1.1 0.2 1.4 0.10 0.4 0.25 0.75 . 3 Light Car l 0.1 0.7 0.1 0.9 0.1 0.7 0.1 0.9 0.0 0.1 0.0 0.1 0.05 0.2 0.15 0.4 4 Saloon Car 2 0.1 2.0 0.2 2.3 0.2 4.0 0.4 4.6 0.1 0.4 0.0 0.5 0.1 0.4 0.2 0.7 5 StatilonWagon 2 0.2 2.1 0.2 2.5 0.4 4.2 0.4 5.0 0.1 0.4 0.1 0.6 0.0 0.40 0.2 0.6 6 Pick-Up truck 5 0.1 1.3 0.1 1.5 0.5 6.7 0.5 7.5 0.1 0.7 0.1 0.9 0.2 1.2 0.6 2.0 7 4 Wheel drive pick-up truck 4 0.2 2.2 0.2 2.6 0.8 8.8 0.8 10.4 0.1 1.1 0.1 1.3 0.2 1.0 0.5 1.7

3.3 44.9 5.0 53.2 0.6 5.2 0.7 6.5 0.7 3.8 2.05 6.55

/ A residual value of 34% is assumned for plant and equipmnentat project completion. 'ource: Mission

I>2

oD X

{ovember,1976 ANNEX 3 Page 1

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Details of Technical Assistance to the Ministry of Equipment

1. A firm of consultantswould be engaged to provide technical assistance to the Ministry of Equipment. It is not required that one firm provides personnel for all positions mentioned below. A joint venture between two firms or engagement of individual consultants (or volunteers) for positions (2), (4), (5), (6) and (7) may also be considered. The following personnel is required:

(1) Chief of Technical Assistance Team (20 months) _/

Qualifications: Civil Engineer (minimum 10 years professional experience)with experience in (i) planning, constructionand supervisionof road works, including low class roads; (ii) public works administration;and (iii) personnelmanagement and training.

Ris duties will be, inter alia, to:

(i) maintain overall responsibilityfor work of technical assistance team;

(ii) plan, direct, supervise and monitor implementationof improvementand maintenanceworks in close cooperation with his counterpart;

(iii) implementadequate accounting and reporting procedures;

(iv) develop with the economista long-term strategy for feeder road improvementand maintenance,and a working program for 1981/82 and an outline program for the following three years; and

(v) draw up a training program for permanent and temporary local staff (para. 2), provide on-the-job training to his counterpartand other professionalpersonnel to ensure that local personnel can gradually take over project responsibility.

I/ Effective working period excluding leave time. After 20 months, the Engineer (Position 2) will take over responsibilityof the team; or as an alternative,the duration of Position (1) is extended to 30 months while duration of Position (2) is reduced to 20 months. ANNEX 3 Page 2

(2) Engineer for Labour Intensive Constructionand Maintenance Works (30 months)

Qualifications: Civil Engineer (minimum 10 years professional experience)with experience in civil constructionprojects using labour intensivemethods.

Ris duties will be, inter alia, to:

(i) plan, direct, supervise and monitor the works of the light brigades in close cooperationwith his counterpart;and

(ii) provide on-the-job training to local staff involved in the implementationof works carried out by the light brigades.

(3) Economist for Project Planning, Monitoring and Evaluation (10 Months total, at periodic intervals)

Qualifications: Degree in Economics (minimum 5 years professional experience)with experience in program preparation/evaluationin agricultureand transportation.

Ris duties will be, inter alia, to:

(i) define criteria for feeder road developmentand selection;

(ii) draw up annual feeder road programs;

(iii) monitor the socio-economicaspects and impacts of feeder road improvementsbeing undertaken; and

(iv) provide on-the-job training to local counterparts.

(4) and (5) Technician - Mechanized Brigades (12 months each)

Qualifications: Technician or inspector of work with training as mechanic or topographer (minimum 8 years professionalexperience) with experience in operation of mechanized road brigades (as chief of brigade) in developing countries.

Their duties will be, inter alia, to:

(i) plan and direct the work of a mechanized brigade ensuring adequate efficiency and quality; and ANNEX 3 Page 3

(ii) conduct on-the-job training of local staff (chief of brigades, and mechanics) to ensure that the daily operations of the brigades can be competentlyhandled after their departure.

(6) and (7) Technicians- Light brigades (20 and 30 months, respectively)

Qualifications: Technicianswith sub-professionaleducation and substantialpractical experience in directing and super- vising major constructionworks where large labour forces have been employed in labour-intensiveoperations. Part of exprerienceshould have been in connectionwith construction/ maintenanceof roads.

Their duties will be, inter alia, to:

(i) plan and direct work of the light brigades ensuring adequate efficiency and quality; and

(ii) conduct on-the-job training of local staff (chief of brigade, foreman, etc), to ensure that daily operations of the light brigades can be competentlyhandled after the experts' departures.

2. The Government would provide the following permanent professional and subprofessionalpersonnel to implement the feeder road program:

for the Division of Feeder Roads:

Chief of Division 1 Engineer or senior technician 2 Economist 1 Accountant 1 Secretary 1

for each Sub-Divisionof Feeder Roads:

Senior Technician 1 Accountant 1 Typist 1

for each Brigade

Chief of Brigade 1 Mechanic 1 i/ i/ For the heavy brigade, one additionalmechanic is needed.

In addition, the Government would on a temporarybasis from time to time attach other professionaland semi-personnelto receive training by the technical assistance team. ANNEX 4 Page 1

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Guidelines for Feeder Road Project Monitoring, Evaluation and Planning

A. Objectives

1. Within the new Feeder Road Division of the DRP, a capability would be developed to:

- monitor the economic, engineering and social aspects of the project;

- prepare physical and financial plans for the second and subsequent years' programs of feeder road construction and improvement; and

- evaluate the second and subsequent years' programs of feeder road construction, improvement and maintenance.

2. These tasks would primarily be undertaken by the Chief of Technical Assistance in the new Feeder Roads Division and a Transport/Development Economist together with their Benin counterparts. Other interested ministries would also participate, in particular the Ministry of Rural Development and the Ministry of Interior.

3. One of the benefits from this monitoring and evaluation function will be the opportunity to improve the economic and social impact, to reduce risks associated with this type of project and to improve future evaluation and planning methods.

4. The monitoring and evaluation would only be carried out on a sampling basis. Also, if time permits a few villages will be selected for an in-depth study.

B. Methodology

Economic Monitoring and Evaluation: The activities will be as follows:

(a) measurement of agricultural production and marketing, traffic flows and population movements showing the effect of the roads constructed and improved as part of the project;

(b) comparison of actual results with the predicted results derived from the use of the present evaluation method making necessary changes and refinements to improve its accuracy and reliability; ANNEX 4 Page 2

(c) in the light of additionaldata collected and experiencegained as the project progresses, the second and subsequentyears' feeder road construction,improvement and maintenance programs will be re-evaluatedand refined;

(d) for the second and third years, DRP will, based on social and economic data collected by all interestedministries, prepare final yearly programs for the construction,improvement and maintenance of feeder roads;

(e) these programs will be presented for approval to an Interministerial Committee (chairedby the Minister of Equipment) and with repre- sentatives,inter alia from the Ministries of Equipment, Planning, Rural Development,Finance and Interior together with the Regional CARDERs and interested state agencies; the Governmentwould, no later than three months before implementationof a new program starts, forward the proposed program to the Association for review and approval.

Engineering Monitoring and Evaluation: The engineeringactivity will be as follows:

(a) monitoring the productivityand costs of the heavy, intermediate and light constructionbrigades, and maintenance operations;

(b) monitoring the quality of operationsand the rate of deterioration of project roads in relation to materials, rainfall and traffic;

(d) depending on the informationderived from (a), (b), (c) propose modifications to the method of operation,equipment, road standards, etc., which should be agreed upon by the Governmentand IDA for incorporationin the second and subsequentyears' programs;and

(e) results from the engineeringmonitoring will be an input to the economic evaluation.

C. Data Collection

5. In order to complete the tasks outlined above, data will have to be collected on a regular basis using available data and data collection chan- nels. Arrangementswill be made at the start of the project for the collection of these data. The following checklist indicates the more important data required.

(a) Economic and Social Data:

(i) population and family size by road, within its area of influence 1/;

1/ On average the area of influence correspondsto a strip 2.5 km on either side of the road. ANNEX4 Page 3

(ii) estimates of area under cultivation and crop yields by road;

(iii) land tenure pattern and marketing system;

(iv) estimates of crops for home consumption and marketed by road;

(v) estimates of agricultural input usage by road;

(vi) data on extent of agricultural extension service, social service and administration service visits by road;

(vii) traffic counts by road taking care to make them seasonally representative and statistically valid;

(viii) load factors of traffic;

(ix) updated vehicle operating costs;

(x) data on parallel investments in those areas served by the roads;

(xi) price data for crops and inputs; and

(xii) transport prices and the transport industry.

An agricultural census is planned for 1977 and this should provide many of the basic data required.

(b) Engineering Data

(i) productivity in physical terms of individual construction and maintenance operations by the heavy, intermediate and light brigades;

(ii) total costs and costs by separate operations for the heavy, intermediate and light construction brigades;

(iii) material quantities by road;

(iv) rate of road deterioration measured by gravel loss, average rut depth and surface roughness estimates;

(v) rainfall and number of days closure by road;

(vi) frequency and type of recurrent and periodic maintenance; and

(vii) unit costs for labor, fuel, spare parts. ANNEX4 Page 4

It is intended, especiallywith reference to (iv) above to arrange some simplified experimentalroad sections in order to increase local knowledge of road performance in relation to road constructionand maintenancemethods and standards.

D. Conclusions

6. Particular importanceis placed on this monitoring and planning operation as it is vital to ensure the success of the project and future feeder road programs. The new Feeder Roads Division should produce quarterly reports detailing the results derived from the monitoring operation and listing proposed action. ANNEX 5 Page 1

PEOPLES' REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Details of Economic and Social Evaluation

A. Project Obiectives

1. The main objectives of the project are:

(a) to reduce the operating costs of vehicles using agriculturalfeeder roads;

(b) to stimulate agriculturalproduction thereby increasing farm income;

(d) to develop rational planning and implementationprocedures for the improvementand upkeep of the feeder road network, including the creation of permanent institutionsfor this purpose.

B. Economic Evaluation

2. Characteristicfor feeder road projects (as well as for other rural development projects) are that most part of the justificationhas to be based on an assessment of the future developmentalimpact of these projects rather than provide the benefits in form of cost reductions to existing activities which frequently are on a low level. The difficultiesassociated with this type of evaluation are well recognized,particularly because only limited em- pirical information is available on the likely response of the target population. The estimates made are however believed to be realistic and attain- able. Furthermore,with the help of technical assistance a system of data collection will be established to permit monitoring of the evaluation and thus lead to an improvementin the data base for future planning and, at the same time, enabling adjustmentsto be made to the project. A proposal for data collection,project monitoring and initial evaluation of project impact is outlined in Annex 4. In the following, details of the economic evaluation are provided and illustratedby two roads included in the project.

Construction and MaintenanceCosts

3. Roads will be constructed,improved and maintained to one specified minimum standard, engineeringdetails of which are given in Table 5 (Standard "A"). Standard "A" will provide all-weather access, with the exception of short closures of one or two days due to paved fords being submerged, and will have a capacity of more than 40 vehicles per day (v.p.d.). On most of the roads, sight distance is good and in those few cases where sight distance is restricted,the roads will be widened to a 5-meter running surface on a 7- meter formationover that particular section. ANNEX 5 Page 2

4. Project roads have been listed in Table 1 classifiedby the following present standards:

(a) Category "B" provides nearly all-weather access, although there is a need for local improvementsto the running surface, drainage and some structures.

(b) Category "C" provides adequate access only in the dry season and is frequently impassable during the rains: considerablelocal reconstruction,regravelling and drainage works are necessary.

(c) Category "D" provides very limited access, being impassable for most of the rainy season and difficult to traverse at other times: virtual reconstructionover the entire length is required.

(d) Category "E" does not permit four-wheeledaccess of any kind and requires completelynew construction.

The cost of improving and maintaining these roads have been estimated indivi- dually for each road on basis of information in Annex 2. These costs are shown in Table 6. For instance, the Natitingou-Boukomberoad (No. 8) is according to Table 1 a category "B" road and would cost CFA 12.1 million (US$55,000equivalent) to improve (Table 6). The cost per km is a low CFA 0.28 million (US$1250) as the road is already in a fairly good condition. On the other hand, road 21, Save-Igbodja,is in very poor condition (category "D" Table 1) with a constructioncost of CFA 37.4 million US$150,000 equivalent,Table 6). The road requires new constructionand the cost per km is consequentlysubstantially higher, CFA 1.1 million (US$4,500).

5. For road maintenance,a fixed cost of CFAF 25,000 (US$100) per km has been used except for category "B" roads where existing maintenance is considered adequate. It is assumed that regravellingwould be undertaken, on the average, every eight years. As regravellingwould be done towards the end of the 10-year analysis period, the omission of its cost in the economic analysis does not represent a significanterror. To counterbalance this assumption,no residual value was assigned to the roadway at the end of the economic analysis. The estimatedmaintenance costs are presented for each road in Table 6.

Traffic, Vehicle Operating Costs and Savings

6. Traffic counts on minor secondary roads have indicated that approximately one-third of the traffic consisted of trucks greater than 5 t carrying capacity, one-third light commercialvehicles with 1.5-2.5 t carrying capacity (mainly dual purpose freight and passengervehicles) and one-thirdpassenger cars (mainly "bush taxis"). The usual truck size in agriculturalareas is 7 tons, although as roads improve the size may increase. ANNEX 5 Page 3

7. The consultants (LamarreValois International)updated to August 1976 prices the typical vehicle operating costs for road categoriesA,B,C, and D. These cost figures are used in this evaluation and are given below:

Vehicle Operating Costs CFAF/Vehiclekm (net of tax)

Vehicle Type Class A Class B Class C Class D

Pick-up 36.7 46.1 54.5 68.5 2-ton truck/bus 50.8 64.0 75.4 94.7 7-ton truck 128.2 153.8 183.7 218.4

8. Using the projectionsof existing traffic given in Table 5 and the vehicle operating cost figures given above, total vehicle operating cost savings (excludinggenerated traffic) by road are presented in Table 6 for the 10 year evaluation period. The traffic forecasts have been based on estimated existing traffic applying an annual growth rate of 2.5%.

Estimation of Present AgriculturalProduction

9. Estimates of agriculturalproduction and sales are required to cal- culate traffic volumes and induced increase in agriculturalproduction following road improvement. Although, in some cases, actual data on production and sales are available, they are generally insufficientand were only used as checks on derived estimated. Clearly this is an area which will receive primary attention in monitoring the project roads.

10. Lacking more accurate data, the agriculturalproduction (Table 2) and consumption (Table 3) per average family was estimated on a regional basis. The size of the average family was also estimated on a regional basis, and as population estimateswere available for each of the project road's influence area, the total production and consumptioncould be determined had the area a level "C" access (para. 4) which can be considered the typical existing condition. With a higher, "A" and "B" level access, the production of cash crop was assumed to be 30% higher than in the typical "C" level area. Areas with access "D" and "E" were assumed to be on a subsistencelevel, which was supported by evidence, and not produce any cash or food crops for local markets. An example of calculationof present agriculturalproduction is for roads 8 and 21 (Table 6) provided in Table 7.

11. Where estimates of actual marketed agriculturalproduction by road existed, these were used a check on the derived estimates. Although a suffi- cient number of actual estimateswas not available to perform a statistical comparison,the two sets of figures were of the same order of magnitude. The project monitoring would correct and refine the assumptionsmade. ANNEX 5 Page 4

Induced AgriculturalProduction

12. CARDER and agriculturalofficials cited several cases where the constructionor improvementof a road had led to large increases in marketed agriculturalproduction or large increases in traffic but unfortunatelyno figures were available.

13. Induced cash crop production following improvementin accessibility has been forecast in the followingway:

(a) improvement of access from level "B" to level "A" will not lead to any increase of yields as the change in accessibilitywill be relatively small;

(b) improvementof access from level "C" to level "A" will lead to an average increase of 30% over a two-year period through yields improving to the 65th percentile yield for the region; and

(c) improvementof access from levels "E" and "D" (which presently have no cash crops) to level "A" will result in an increase equivalent to the average of level "A/B" production per family holding for the region over a four-year period.

These increases are below those assumed for the early stages of the Zou-Borgou Cotton Project and the Togo Maritime AgriculturalProject (for these projects, increases in production at the early stages was assumed to be a function of fertilizer use only), and apply to all cash crops except tomatoes. The proposed increases do not assume complementaryinvestment in other areas such as water suppLy, cotton ginneries or buildings, but anticipate more effective use of existing resources.

14. The value of cash crop production was estimated using official (November,1976) prices which closely reflect estimated economic prices when combined with the subsidized costs of inputs to the farmers. 1/ The prices used are as follows:

Seed cotton 50 CFAF/kg Groundnuts (unshelled) 40 CFAF/kg Rice (paddy) 36 CFAF/kg Tomatoes 75 CFAF/kg

Allowance was made for the increased use of inputs and extension services necessary to achieve the forecast net increases in production. Once the expected increase in agriculturalproduction for each road is achieved, it is assumed to remain constant for the remainder of the analysis period. Thus, for "C" access improvement,production is assumed to remain constant from

1/ A more precise economic calculationindicates that this assumption is slightly conservative. ANNEX 5 Page 5 year 3 and for "E" and "D" access improvements,production is constant from year 5 onwards. No allowance has been made for possible migration into the areas served by the roads.

Reduced Losses on Crops

15. Improved transport conditions are expected to reduce the amount of spoilage for certain perishable crops. Estimates of the net reduction in losses following road improvementhave been limited to tomatoes which constitute an important crop in the south of the country. It is assumed that the net reduction in losses on the tomato crop marketed would be 10% for "C" access improvementand 5% for "B" access improvement.

Evaluation of Special Cases

16. Two project roads constitute special cases in that their main purpose is to serve irrigated rice schemes. The roads are Cove-Koussin 7 km (No. 15) and Kpinnou-FermeRizicole 3 km (No. 34). Estimates of existing rice production, potential yield increases through more timely delivery of inputs, and expected net reduced losses on the marketed crop following road improvement were obtained from the Rural EquipmentDivision of MRD.

Government Revenue

17. Incrementalexport duties on cotton lint and groundnuts will amount to about CFAF 5 million a year when the project is fully operational.

Foreign Exchange Earnings

18. Increased foreign exchange earnings derived from the project will be obtained through incrementalincreases in cotton fiber, cotton seed and groundnut exports. The estimated average f.o.b. prices during the 10-year analysis period based on World Bank forecasts are:

- cotton fiber 350 CFAF/kilo - cotton seed 35 - groundnuts 66 (approximately15% exported)

Based on these prices, the estimated net foreign exchange earnings discounted at 12% over the 10-year period have been calculated to be the following:

CFAF Million

Cotton Fiber Cotton Seed Groundnuts Total

36.0 81 62 503 ANNEX 5 Page 6

It is possible that cotton fiber exports may decrease as more cotton fiber is used in the domestic manufactureof textiles,but it was assumed that the import substitutioneffect of this use would be equivalent to the export earnings forgone.

C. Sensitivity tests

19. To evaluate the effect of cost variation and changes in benefits on the economic return of the 562 km of roads identified and analyzed, the following hypotheses were tested:

(a) 20% increase in road construction,improvement and maintenance costs, ERR = 22%;

(b) 40% reduction in net added value of cash crop, ERR = 15%;

(d) 20% increase in costs, 40% decrease in crop value, ERR = 12%.

D. Conclusions

20. Table 6 summarizes the results of the economic analysis on a road by road basis (including the 160 km of Zou-Borgou Cotton Project roads which were not re-analyzed). Using a minimum internal rate of return of 12%, and excluding the cotton roads already justified as part of the Zou-Borgou Project, 26 roads totalling 562 km are identified as economicallyjustified.

21. The most likely estimate of the overall rate of return for the 26 roads, retained as economicallyjustified, is 27%. Table 8 summarizes the results of the global economic analysis for the 26 roads mentioned, including a sensitivityanalysis of hypotheses reflecting changes in costs and benefits.

22. In view of the project risks -- the level of road maintenance after project completion,farmer response which depends upon the Government's setting sufficientlyhigh farmgate prices for cash crops and providing adequate extension services, and climatic conditions-- it is difficult to provide any accurate estimates on what the future agriculturalproduction will be. It is however envisaged that as a minimum, it will be higher with the project than without it. Assuming that the project would result, on the average, in a 6% incrementalincrease in production,a 40% drop in baseline production would still yield a 15% return. If this drop in productionwere combined with a 20% increase in constructioncosts, the rate of return would fall to 12%. This is, however, an excessivelyconservative estimate, but would still provide an acceptable economic rate of return. ANNEX 5 Table 1

PEOPLE'S REPUhLIC OF BENIN

FEEDER ROADS PROJECT

List of Roads, Population served and Road Condition

Region No. Road Population Km Road Condition served (1000) (B) (C) (D) (E) Atakora 1 Kotapounga-Banguiratamou 6.5 18 18 2 Kouarfa-Peperkou 4.5 13 13 3 Vabou-Toukountouna 3.5 10 10 4 Anandana-TchoumiTchoumi 2.0 15 15 5 Anandana-Dompago 6.0 28 14 14 6 Kouandé-Brinyamaro 14.0 71 71 7 Tieli-Gouandé 15.0 36 17 19 8 Natitingou-Boukombé 40.0 43 43 Rorgou 9 Garou-Kassa 6.0 30 30 10 Gbassaka-Guenlaga 2) 3.0) (37) (37) Il Kandi-Saa-Angara-Dabou 1) 5.0 33 33 12 Fouay-Angara-Debou1) 1.5 16 16 13 Bagou-Sonsoro 1/ 3.9 32 32 14 Bembéréké-Bouanri1/ 5.0 25 10 15 Zou 15 Cové-Koussin 0.7 7 7 16 Cové-Paouignan 5.0 60 60 17 Dassa-Mbétékoukou 10.0 29 29 18 Gbedavo-RIE-2 1/ 1.0 10 10 19 Djébé-Ouessé-Kilibo 1/ 4.5 44 26 18 20 Zogbodomé-Akiza 3.0 14 14 21 Savé-Igbodja 4.0 32 32 22 Ketou-Adekambi 4.0 22 22 Oueme 23 Issaba-Ouedja 2/ (10.0) (30) (30) 24 Bonou Ita Djebou 2/ ( 9.0) (23) (23) 25 Adja Ouéré Pobé 8.2 10 10 26 Katou Adakplamé 5.0 12 12 27 Kpedekpo Gbegon 1.4 6 6 Atlantique 28 Savi-Haouikadji 4.0 10 10 29 Domé-Savi 4.0 15 15 Mono 30 Aplahoué-Atomé 16.0 32 32 31 Djakatomé-Agoumé 5.0 15 15 32 Bopa-Gbakpodji 6.5 16 16 33 Houin Km6 to Lobogo 2.0 6 6 34 Kpinnou-Ferme Rizicole 0.5 3 3 35 Lalo-Tchi Ahomadegbé 4.5 9 9

Total 205.2 722 100 301 303 18 Total excl.cotton roads 562 100 233 207 18

Source: Ministry of Rural Development and Mission

1/ Cotton roads evaluated as part of Zou Borgou Cotton 2/ Because of low priority roadsiO, 23 and 24 are not included in Program ana iLj toLals. PEOPLE'S REPUBLIC OF BENIN FEMD ROADS PROJECT

Typic l Resfal Faru Type 1/ (Area in hectares: Yielda in kg/ha)

Atakora Borgou Zou Ouom Atlantique Mono

Crop AreA Yiclds Area Yields Area Yielda Ares Yields Aro Yielda Area Yielda

Cash Crops:

Rice 0.07 1450 0.0? 1600 0.01 1600 - - - - 0.01 1150

Groundnut3 0.2( 780 0.04 950 0.53 950 0.13 490 0.08 480 0.05 460 Cotton 0.04 390 0.38 830 0.3? 680 0.03 610 - - 0.18 510 Tomatocs - - - - - 0.01 3750 0.03 2590 0.03 6460 Food Zrops:

Sorghum 1.49 710 0.69 660 0.24 480 - - - - - Millet 0.81 '430 ------_ _ _ _ Maize 0.31 480 0.35 1210 0.87 1150 2.41 640 1.18 680 0.90 860 Yams 0.39 7550 0.22 6640 0.?0 15865 0.02 6500 - 0.01 7460 Cassava 0.1° 2830 0.05 7860 0.08 5540 0.79 6180 0.43 6050 0.22 7190 Beans 0.12 550 0.08 430 0.23 350 0.29 355 0.10 295 0.04 470 Potatoes ------0.18 4100 0.02 2870 - -

Toro ------0.02 6580 - - -

Total 3.62 1.83 2.48 3.88 1.84 1.44 >b

______l/ Average farm size is 6persons in all provinces except Borgou and Atakora iC where it is 7 and 8 persons respectively.

Source: Mission estimatet based on agrilootural data for typical years (see AfNNB 1)

November, 1976 ANNEX 5 Table 3

PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADSPROJECT

Minimum Area Requirements for Subsistence Crops per Farm

Consumption Average Yield Equivalent Region Crop per Farm (kg/yr) (kg/ha) Area (ha)

Atakora Cereals 1,200 600 2.00 Yams/Cassava 2,400 6,020 0.40 Groundnuts 24 780 0.03 Vouandzou 64 550 0.12 2.55

Borgou Cereals 840 840 1.00 Yams/Cassava 1,820 6,860 0.26 Groundnuts 28 1,380 0.02 Vouandzou 35 430 0.08 1.36

Zou Cereals 960 1,010 0.95 Yams/Cassava 3,240 12,780 0.25 Groundnuts 72 1,190 0.06 Beans 48 350 0.14 1.40

Ouemé Cereals 1,200 640 1.88 Yams/Cassava 3,300 6,190 0.53 Potatoes 480 4,100 0.12 Toro 60 6,580 0.01 Beans 90 355 0.25 Groundnuts 36 490 0.07 Tomatoes 12 3,750 - 2.86

Atlantique Cereals 720 680 1.06 Cassava 1,800 6,050 0.30 Potatoes 36 2,870 0.01 Groundnuts 24 480 0.05 Beans 24 295 0.08 Tomatoes 18 2,590 0.01 1.51

Mono Cereals 690 860 0.80 Yams/Cassava 1,500 7,200 0.21 Groundnuts 12 460 0.03 Beans 18 470 0.04 Tomatoes 42 6,460 0.01 1.09

Source: Mission estimates PEOILE'~~~~~~W S IIUEI

FEED5R ROADS PEOJICT

Costu of Agricultural Inputs sud xtMoisou 8Srvices for Cash Croow (1976 pritsu)

A. Actual and R.cc..nded Usage

Fertilizer: InDuta (kg/ha) Average CAF Price Permer Pricé Recomd. Actual I/ CAF/kg

Rice 100 60 80 25 Groundnuts 100 35 45 25 Cotton 200 160 55 25

Pesticides: Inuwte (1/ha) Average CAF Price Fsr r Priel Recoud. Actual 1/ CAF/Liter CAt«

Cotton 17.5 17.5 715 300

Extension Services: Cost CFAF/ha Second. Actual 400 300 B. Value of Incrontel Inputs to Incrsmtal Gros* Croc aLu

D/E Type Roads (no previous cash crops)

Typical Improved Grose CroR Yields

Pesticides: Cotton 1,100 55 17.5 1/ha 23%

Extension Services Average Cash Crop 1,500 63 400 CFAF/ha 0.6%

C Type Roads Typical Yields Gros. Crop Value/ha Supplemen- Velue share CFAF 1000 tary Inputs of Inputs 4/ Fertilizer: W/O with w/o with Net Inc. Rice 1,500 2,000 54 72 18 40 kg/ha 18% Groundnuts 700 1,500 28 60 32 65 kg/ha 91 Cotton 850 1,100 42.5 55 12.5 40 kg/ha 181 Extension Services: Average cash crop 1,015 1,500 42.6 63 20.4 100 CFAF/ha 0.51

1/ Based on actual data for Atakora and Borgou Regions. 2/ Incremental labor requirements are considçred to be marginal and incur no ecouoeic coet. 3/ See ANNEX 1 for farmgate prices. 4/ Inputs are shadow priced and farm labour where subsistence needs are already met - has a zero shadow price. Source: SONAGRI and Mission estimates. November. 1976 PEOPLE'S REPUBLIC OF BENIN

(vpd)V 98 Traffic Forecasta _ * lyrg ~~~~~~~~~~1988 - Road Normal Generated Total Normal Generased Total <1 Kotapounga-Banguiratamou 4 <1 4 3 <1 3 3 <1 4 Kouarfa-Peperkou 3 <1 3 Wabou-Toukountouna 2 <1 2 - <1 <1 Anandana-TchoumiTchoumi - <1 <1 2 C1 2 2 1 3 Anandana-Dompago 12 g <1 9 il 1 Kouandd-Brinyamaro 5 2 7 Tieli-Gouandé 4 1 5 19 4 23 Natitingou.Bou1kcoIbé 14 3 17 _ <1 <1 2 2 Garou-Kassa _ 1 1 Gbassaka-Guenlaga _ <1 <1 2 <1 2 2 (1 2 Cove-Koussin 3 3 Cove-Pagouignan _ 1 1 10 2 12 Dassa-Mbetekoukou 8 1 9 3 4 Zogbodomé-Akiza 2 <1 3 3 3 Savé.-Igbodja - 1 1 <1 <1 _ <1 41 Ketou-Adekambi _ 1 1 Issaba-Houedja _ <1 <1 24

f{ExcludingCotton roads. annual traffic figures NB.: Figures are rounded and do not imply average daily traffic but are averaged over the year. 't Source: Mission estimates.

November, 1976 PEL' S IEFULXC if'_ FEECDURROADO PROJZEC

Costu of Agricultural Inputs a*d Extemsion S9rvices for Cash cropo (1976 prie.)

A. Actual and R.commended Usage

Fertilizer: Inputs (kg/ha) Average CAF Price #armar Price Recomd. Actual 1' CAF/kg

Rice 100 60 80 25 Groundnute 100 35 45 2S Cotton 200 160 55 25

Pesticides: Inuts (1/ha) Average CAF Price Former Pries Recomd. Actual 1/ CAF/LUter CAYAL

Cotton 17.5 17.5 715 300

xtension Services: Cost CFAF/ha 5ecd. Actual 400 300 ». Value of lacremmtal Inputs to Iacr.atel* Gros* Cro, VL

D/F Type Roads (no previous cash crops)

Typical Improved Gross Crop Yields (kg/ha) Value/ha -/ Value aharé CFAF 1000 Inputs of Imeuts 4 Fertilizer: Rice 2,000 72 100 kg/ha 112 Groundnuts 1,000 60 100 kg/ha 8% Cotton 900 55 200 kg/ha 20Z

Pesticides: Cotton 1,100 55 17.5 1/ha 23%

Extension Services Average Cash Crop 1,500 63 400 CFAF/ha 0.6%

C Type Roads Typical Yields Gross Crop Value/ha Supplemen- Value sharo CFAF 1000 tary Inputs of Inputs 4/ Fertilizer: w/o with w/o with Net Inc. Rice 1,500 2,000 54 72 18 40 kg/ha 18% Groundnuts 700 1,500 28 60 32 65 kg/ha 9% Cotton 850 1,100 42.5 55 12.5 40 kg/ha 18% ExtensionServices: Averagecash crop 1,015 1,500 42.6 63 20.4 100 CFAF/ha 0.5%

1/ Based on actual data for Atakoraand BorgouRegions. 2/ Incrementallabor requirementsare considçredto be marginaland incur no econodc coat. 3/ See ANNEX 1 for farmgateprices. 4/ Inputs are shadowpriced and farm labourwhere subsistenceneeds are alreadymet has a zero shadow price. Source: SONAGRIand Missionestimates. November,1976 PEOPLE'S REPUBLIC OF BENIN

Traffic Forecasts (vpd)_ 1988

Road Normal Generated Total Normal Generated ` _ta 5 <1 5 Kotapounga-Banguiratamou 4 <1 4 3 <1 4 Kouarfa-PeperkOu 3 <1 3 2 <1 2 3 <1 3 Wabou-Toukountouna <1 <1 Anandana-TchoumiTchoumi - <1 <1 - 2 l 3 Anandana-Dompago 2 <1 2 il 1 12 Kouand8-Brinyamaro 9 <1 9 5 2 7 Tieli-Gouandé 4 1 5 14 3 17 19 4 23 Natitingou-Boukomb8 2 2 Garou-KaSsa _ <1 <1 _ 1 1 Gbassaka-Guenlaga _ <1 <1 2 <1 2 2 (1 2 Cove-Koussin - 3 3 Cove-Pagouignan _ 1 1 10 2 12 Dassa-Mbetekoukou 8 1 9 3 <1 4 Zogbodom8-Akiza 2 <1 3 - 3 3 Savé-Igbodja - 1 1 <1 <1 _ <1 41 Ketou-Adekambi _ 1 1 Issaba-Houedja <1 <1 24 <1 24 Bonou-Ita Djebou 19 - 19 15 3 18 19 3 22 Adja Ouere-Pobe <1 C1 Ketou-Adakplame C1< < 1 - - <1 Z1 Kpedekpo-Gbegon - - 7 - 7 Savi-Advocodj i 6 _ 6 10 - 10 Dom8-Savi 8 - 8 6 1 7 Aplahoué-AtOmé 5 <1 6 5 1 6 Djakatomé-Hazoumé 4 1 5 2 <1 2 Bopa-Gbakpodji 2 - 2 6 <1 6 Houin-km 6 to Lobogo 5 - 5 2 <1 2 Kpinnou-FermeRizicole 1 <1 1 _ 1 1 Lalo-Tchi Ahomedegb8 - <1 <1

{ExcludingCotton roads. traffic figures NB.: Figures are rounded and do not imply average daily traffic but are annual averaged over the year. M

Source: Mission estimates.

November, 1976 PULE S EBULC OT r FEEDER ROADS PROJECT

Sumrwy of Project Evaluation (Comts and Benefits in CFAF million net of tax over period 1978 - 1988)

Comts Benefits Jo. Road Length (km) Const. Maint. Transp.Coste Net Value Net Beduced IR inh.bo Ont. euià&. Added CroD Loos (CaAF lm) 1 Kotapoinga-Banguiritamou 18 15.6 4.5 4.8 29.4 - 13 360 2.4 2 Koburfa-Peperkou 13 11.1 3.3 2.4 21.4 - 12 345 2.7 3 Wsbou-oukountouea 10 4.5 2.5 1.4 15.7 - 24 350 1.3 4 Annd Tehouti Tchoumi 15 13.7 3.8 - 34.5 - 16 135 6.8 5 Anf4Mae-DOIaso 28 19.7 7.0 1.7 65.2 - 24 215 3.3 6 KouamU-Briayaa.ro 71 56.7 17.8 41.7 61.6 - 12 195 4.7 7 Tieli-Gomandé 36 37.7 9.0 4.8 169.9 - 3 415 2.5 8 Nltitinaou-Boukombé 43 12.1 - 450 - 930 0.3 9 Garou-Kassa 30 31.1 7.5 - 125.2 - 28 200 5.2 10 Gbessaka-Guenelagal/ 37 53.5 9.3 - 62.9 - 3 80 17.8 il Xandi-8am-Angare_Dqou 33 33.8 8.3 n. na _ >12 150 6.. 12 Fou y-Angara- ou 16 11.2 4.0 na na - >12 95 7.5 13 Bagou-SoncoroÂ 32 47.1 8.o na na - >12 170 8.5 14 Bembir6k6-Bouanri 25 36.2 6.3 na na _ >12 200 7.2 15 Cové-Koussin 7 9.2 1.8 2.7 12.6 10.1 20 100 13.1 16 Cov4-Paouignan 60 51.1 15.0 - 242.5 - 31 85 10.2 17 Dasss-Mbetekopkpu 29 22.4 7.3 15.9 139.9 - 42 3b5 2.2 18 Gbedavo-RIE2-' 10 7.5 2.5 na na - >12 100 3.8 19 Djebé-Ouesse-Kilibo,J 44 19.8 11.0 na na - .12 100 4.5 20 Zogbodoua-Akiza 14 8.4 3.5 2.3 38.3 - 36 215 2.8 21 Sav6-Igbodja 32 37.4 8.0 - 177.5 - 33 125 9.4 22 Ketou-Adekambi 22 16.2 5.5 - 35.3 - 12 180 4.1 23 Insaba-Houedjai) 30 76.3 7.5 - 87.3 - 1 335 7.6 24 Bonou-Ita Djebou_o/ 23 23.7 5.ô 29.1 14.9 2.7 il 390 2.6 25 Adja Ouere-Pobé 10 2.1 - 5.3 - 1.7 24 820 o.6 26 Ketou-Adakplamé 12 12.2 3.0 - 43.3 - 25 415 2.5 27 Kpedekpo-Gbegon 6 6.0 1.5 12.8 - 13 L35 ,4.3 28 Savi-AhouikodJii 10 5.1 2.5 4.1 3.4 3.7 12 400 1.3 ç jl 29 Domé-Savi 15 5.7 3.8 7.8 3.4 3.7 12 265 1.4 fl1 30 Aplahoué-Atomé 32 11.8 - 6.o - 19.0 17 500 0.7 >i 31 Djakotomé-Hagouné 15 1.7 - 2.3 - 7.6 46 330 0.3 32 Bopa-Gbakpodji 16 15.0 4.o 1.8 15.7 17.7 16 405 2.3 33 Houin-km 6 to Lobogo 6 4.5 1.5 1.9 4.9 5.6 18 335 2.3 34 Kpinnou-FermeRizicole 3 2.9 0.8 1.0 14.4 7.2 60 150 6.5 35 Lalo-Tchi Ahomadegbe 9 19.7 2.3 - 97.9 - 35 500 4.4 1/ Cotton roads evaluated as part of Zou-Borgou Cotton Project vith IRE exceeding 11.5% on tranmport cout scaiua alose. 21 nf lev pFterity md nt dneluid is t,v.p

Source: Mission cetimta« April 1977 ANNEX 5 Table 7 Page 1

PEOPLES' REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Sample Calculations of ERR

1. The calculationsof economic justificationsare illustratedfor the following two roads:

Road No. 8 - Natitingou-Boukombe,and

Road No. 21 - Save-Igbodja

Road No. 8

2. This 43 km road in the Atakora Province serving a population of 40,000 (5,000 families) is in a fair condition (Class B) and it is therefore assumed that the only benefit from improving the road to Class A would be reduced vehicle operating costs to normal traffic. The existing production and production needed for subsistence (see Table 2 and 3) are:

Production per family-year in kg

Actual Subsistence Surplus

Cereals 1550 1200 350

Yams/Cassava 3300 2400 900

Groundnut 270 20 250

Rice 130 - 130

Cotton 20 - 20

Total surplus per family 1650 kg

Total surplus in area of influence: 5,000 x 1,650 = 8,250 t

Presently these products are transportedon 7t trucks at a tkm cost of CFAF 62 which after improvementwould be reduced to CFAF 51. The average daily traffic of 7t trucks would amount to 4.5. In addition an average daily traffic of 9 vehicles (50% 2t trucks/busesand 50% pick-ups) is estimated (para. 6). Total vehicle cost savings (1977) thus becomes: ANNEX 5 Table 7 Page 2

7t trucks: 43/2 x 8,250 x (62-51) = 1,950,000

other traffic: 43 x 365 x 4.5 (13.2 + 9.6) 1/ = 1,650,000

CFAF 3,600,000 which corresponds to a first year benefit of about 30% and consideringa 2.5% normal growth over the 10 year evaluation period a rate of return of 28%.

Road No. 21.

3. This road in the Zou Province serving a population of 4,000 (670 families) is in a bad condiLion (Class "D") and it is thereforeassumed that no cash crops are grown. After improving the road to Class "A" the population will increase its productionmainly of cash crops (groundnutsand cotton) so as to reach in the fifth year (per family):

Groundnuts - 560 kg

Cotton - 260 kg

During the remaining years of the 10 year evaluation period production per family is assumed to remain constant. The net added value of the increased cash crop production is calculatedas the farmgate price less the value of farm inputs (para. 14 and Table 4). In year 5 the net added value would be (per family):

Groundnuts 560 x 40 x 0.91 = CFAF 21,000

Cotton 260 x 50 x 0.56 = 7,300

CFAF 28,300

or total in year 5 CFAF 19 millions

Net added value of other crops amounts in year 5 to CFAF 3 million. The rate of return over the 10-year evaluationperiod is 33%.

1/ Vehicle operating cost savings for 2t truck/bus: CFAF 13.2

"l " " " "pick-up: CFAF 9.6

Source: Mission

April 1977 ANNEX 5 Table 8

PEOPLES' REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Project Evaluation 1/

(Costs and benefits in CFAF million net of tax)

A. Best Estimates

Costs Benefits Construction Maintenance Transport Net Value Net Reduced Net Costs Added losses Benefits

1978 433.5 - - - - - 433.5

1979 11.6 13.7 51.8 6.7 61.6

1980 11.6 14.0 101.0 6.8 110.2

1981 11.6 14.4 129.6 7.0 139.4

1982 11.6 14.7 158.9 7.2 169.2

1983 11.6 15.1 158.9 7.3 169.7

1984 11.6 15.5 158.9 7.5 170.3

1985 11.6 15.8 158.9 7.7 170.8

1986 11.6 16.2 158.9 7.9 171.4

1987 11.6 16.6 158.9 8.1 172.0

1988 (39.9) 2/ 11.6 17.1 158.9 8.3 212.1

Rate of Return = 27.1%

B. SensitivityTests a) 20% increase in constructionand maintenance costs ERR = 22% b) 40% decrease in cash crop value ERR = 15%

c) 20% reduction in transport cost savings ERR = 26%

d) a) and b) ERR = 12%

1/ Evaluation of 26 routes with individual rates of return exceeding 12% totalling562 km; six cotton roads totalling 160 km are excluded. 2/ Residual vlue on drainage works (culvertsand small bridges).

Source: Mission estimates BENIN FEEDER ROADS PROJECT Organization of the Directorate of Roads and Bridges (DRB) - 1976

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