Document of The World Bank p -

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 3450-COM

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS Public Disclosure Authorized SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT Public Disclosure Authorized

June 3, 1981 Public Disclosure Authorized

Highways Project Division Eastern Africa Regional Office

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

Currency Unit = Comorian Franc (CF) US$1.00 = CF 250 CF 100 = US$0.40

'4 WEIGHTS AND MIEASURES

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) = 2.47 acres (ac) 4 1 metric ton (ton) 2 = 2,204 pounds (lb) 1 square kilometer (km ) = .3861 square mile (sq mi)

GLOSSARY OF ABBREVIATIONS

AfDB - African Development Bank AfDF - African Development Fund BCEOM - Bureau Central pour les Equipements d-Outre-Mer EDF - European Development Fund FAC - Fonds d-Aide et de Cooperation FIDES - Fonds dlInvestissements pour le Developpement Economique et Social GDP - Gross Domestic Product GNP - Gross National Product MEE - Ministry of Equipment and the Environment (Ministere de l'Equipement et de l'Environnement) OPEC - Organization of Petroleum Exporting Countries PWD - Public Works Department SECMO - Societe d-Etudes de Construction de Maisons et Ouvrages vocs - Vehicle operating cost savings vpd - Vehicles per day

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

FISCAL YEAR

January 1 - December 31 FOR OFFICIAL USE ONLY

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

1. THE TRANSPORT SECTOR...... 1

A. Geographic and Economic Setting ...... 1 B. The Transport System ...... 2 C. Transport Policy and Coordination...... 3

II. THE HIGHWAY SUBSECTOR...... 4

A. 'The Network ...... 4 B. Road Use ...... 5 C. Administration...... 7 D. Training ...... 8 E. Planning ...... 9 F. Financing...... 9 G. Engineering...... 12 H. Construction...... 13 I. Road Maintenance and Improvement...... 13 J. Previous Bank Group Involvement in the Sector...... 14

III. THE PROJECT...... 16

A. Objectives...... 16 B. Project Description.16 C. Cost Estimates.19 D. Financing.21 E. Implementation and Procurement...... 24 F. Disbursements...... 25 G. Accounting, Auditing and Reporting Requirements...... 26 H. Ecology...... 26

IV. ECONOMIC EVALUATION ...... 27

A. Introduction...... 27 B. Benefits and Beneficiaries...... 27 C. Economic Analysis...... 28 D. Sensitivity and Risks ...... 29

V. AGREEMENTS REACHED AND RECOMMENDATION ...... 30

This report was prepared by J. Paintner (Engineer) and J. de Weille (Senior Economist), who appraised the project in December 1980. The report was edited by C. Applegate (Technical Editor).

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii -

Table of Contents (cont'd)

Annexes

1. Tables

1. Road Network, 1981 2. Expendituresfor Road Construction,1974-1982 3. Design Standard of Paved and Gravel Roads 4. Three-year(mid-1981 to mid-1984) Work Program for ImprovementUnits 5. Three-year(mid,-1981 to mid-1984) Work Program for Patching and Resealing Units 6. Compositionof MechanizedUnits 7. Equipment to be Procured 8. Tires, Spare Parts, Fuel and Material to be Procured 9. Estimated Schedule of Disbursement 10. Economic Evaluationof Road ImprovementUnits 11. Vehicle Operating Costs and Savings 12. Economic Evaluationof Patching and Resealing Units

2. Outline Terms of Reference for Technical Assistancefor Three-Year Road Improvementand MaintenanceProgram 3. Progress Reporting System 4. Economic Evaluationof IndividualRoads to be Improved during the First Year of the Project 5. InformationAvailable in Project File

Maps

Grande Comore Anjouan Moheli

. FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

I. THE TRANSPORT SECTOR

A. Geographic and Economic Setting

1.01 The Comoros archipelago, located at the northern end of the 2

Mozambique Channel, consists of four islands yith a land area of2 2,166 km Three o5 the islands--Grande Comore (1,148 km ), Anjouan (424 km ) amd Moheli (220 km )--constitute the Federal Islamic Republic of the Comoros (see Maps); the fourth island--Mayotte (374 km )--is under French rule. The islands are of volcanic origin and characterized by a rugged topography with steep, rocky coastlines. Rainfall, up to 400 mm per month during the six-month rainy season, combines with rich laterite soils to produce a lush vegetation. During the rainy season devastating cyclones occasionally occur causing economic havoc and disrupting the transport and communications systems. Being a country of three islands also presents special problems. Each island requires airport and minimal port facilities as well as its own road mainte- nance crews and plant repair facilities. Also, the rocky coastlines without harbors impede coastal shipping, and land transport is hampered by the islands rugged topography, steep gradients, clayish soils and heavy rains all of which make road construction and maintenance expensive.

1.02 The population was estimated at 400,000 in mid-1980 with an average annual growth rate of ab2ut 3.5%, which gives the Comoros a very high popula- tion density (325 per km of agricultural land). The islands of Anjouan and, to a lesser extent, Grande Comore are becoming overpopulated and, given the limited opportunities for employment, are suffering from unemployment and underemployment problems.

1.03 The Comorian economy is based on agriculture which contributes an estimated 40% of GDP. Agriculture provides nearly all export earnings through four principal crops: ylang-ylang (used in the manufacture of perfume), copra, vanilla and cloves, whose prices can fluctuate widely thereby making it difficult to estimate the country's export earnings. The only significant industrial activity is the distillation of ylang-ylang. The service sector contributes another 40% of GDP while the transport sector contributes 2% of GDP. The GNP per capita is estimated at US$260, one of the lowest in East Africa.

1.04 When the Comoros became independent in 1975, France, the principal source of financial and technical assistance, suspended all aid. Most of the French community departed, causing an immediate adverse impact on the economy since the French manned many of the key public services. It is estimated that GDP reached US$71 million in 1974, having grown at a rate of between 6 and 7% p.a. in real terms over the previous five years. As a consequence of the events surrounding independence, real GDP fell 13% in 1975. The new Government had to cutback drastically on most activities and total - 2 - public expenditure was halved. The Government's appeals for help initially brought free food and medical supplies in early 1976, followed by a US$10 million loan from the Special Arab Aid Fund for Africa and a US$10 million suppliers' credit from the People's Republic of China. Since then Arab sources have provided aid for specific projects, and in 1979 France resumed budgetary aid. Multilateral sources, mostly the African Development Fund (AfDF), IDA, the European Development Fund (EDF) and the UN have been providing technical assistance and project aid. The Comoros' budgetary problems are still critical and will continue to restrict Government contributions to development projects. These problems are being taken into account in project design to avoid implementation delays.

B. The Transport System *

The Transport Network

1.05 The Comoros' transport system consists of about 762 km of roads, two seaports, and one international airport and three airfields. There are no railways or navigable rivers. The principal features of the system are: a main road network essentially comprising a coastal ring road on each island, linking the settlements in the export crop producing areas to the ports; a system of feeder roads and tracks, penetrating inland to the highlands where food crops are grown; two artificial harbors, one each on Grande Comore and Anjouan; and airports to accommodate international and interisland traffic, particularly passengers. Road transport dominates internal transport, while maritime transport Ls the main mode for both exports and imports and inter- island freig'-.

Ports and Sea Transport

1.06 Mutsamudu on Anjouan is the country's main port; it can accommo- date only one 3,000-ton ship or two small vessels at one time due to limited port infrastructure. The port of Moroni on Grande Comore can accommodate ships up to 500 tons. At both ports larger ships must anchor offshore and lighterage is undertaken by dhows, but even this is often impossible during the cyclone season. Moheli has no port; small boats must be handled at the beach near Fomboni. The ports are run by a state company, and the Government is a part owner of the interisland shipping company.

1.07 International trade and communications are hampered by long distances to foreign markets, mostly Europe and North America, and by the lack of a natural deep-water harbor for oceangoing vessels. Oceangoing vessels must use ports in neighboring countries for transshipment, the island of Reunion being the most frequently used for this purpose, or undertake lighterage operations. Because of these difficulties, higher value imports and exports are carried by air. The Government is considering the construc- tion of a deep-water harbor on Anjouan (para. 1.13). -3-

Airports and Civil Aviation

1.08 Grande Comore has an international airport (at Hahaya) with a 2,900 m runway, long enough to accommodate Boeing 707-300-type aircraft. Each island has a small airport with paved runways capable of handling DC4s.

1.09 The Comoros is served by weekly Air France flights between Paris and the international airport on Grande Comore. Both Air Comoros, a para- statal company, and Tanzania Airways provide regional service between the Comoros, Kenya, Tanzania and Mauritius. Air Comoros' main function is to provide air service between the islands, generally two to three flights a week. Even though air fares are considerably higher than ship (about double), Air Comoros is the principal means of interisland passenger transport, carrying * about 85% of the traffic. Interisland air freight traffic is minor and likely to remain so in the future.

Roads and Road Traffic

1.10 Details of the highway subsector are given in Chapter II.

C. Transport Policy and Coordination

1.11 The Government does not have a formal transport plan. However, a UNDP-financed planning team recently arrived to assist the Government in (i) preparing a development plan to be ready in 1982, and (ii) creating a planning capability in the Ministry of Finance by training Comorian staff.

1.12 Pending the finalization of a formal transport plan, the Government places high priority on the improvement of transport infrastructure and services. One objective is the upgrading of the road network on all three islands to facilitate rural development and agricultural production. The Association is supporting this objective; both the First Highway Project and the proposed project include road improvement components to assist in upgrading earth roads to gravel standard. More ambitious road improvements involving upgrading of earth and gravel roads to paved standards, as proposed by the Government, do not seem to be economically justified given the present level of economic development and traffic. Far more important are the maintenance of the existing road network and improvement of earth roads to gravel standard. At negotiations it was agreed that during implementation of the proposed proj- ect the Government will consult with the Association before undertaking any other project in the highway subsector.

1.13 A second transport objective is the construction of a deepwater berth at Mutsamudu on Anjouan to accommodate oceangoing vessels and thereby to avoid lighterage and transshipment through neighboring countries. Given the Comoros' small volume of trade, the economic justification of such a project seems marginal and is being reviewed. Other aims are the construction of a small port on Moheli and improvement of the international airport (provision of freight and aircraft hangars and a radar cyclone-tracking system). - 4 -

1.14 Transport coordinationis not an issue in the Comoros. The trans- port system is simple and straightforwardand problems of intermodal competi- tion do not arise. Last year the Government created a Ministry of Transport, Tourism, Post Office and Telecommunicationsto oversee, inter-alia,all transportactivities except road constructionand maintenancewhich remain the responsibilityof the Ministry of Works. A Minister of Transportand Tourism has been appointed and the Government is in the process of staffing the ministry. For the time being the Ministry of Finance will continue to be responsiblefor whatever limited planning there is. However, in the future the new transportministry will play a role in planning port and airport development.

II. THE HIGHWAY SUBSECTOR

A. The Network

2.01 The road network totals 762 km, of which 377 km (49%) are paved and the remaining 385 km (51%) are gravel and earth roads (Table 2.1). Annex 1, Table 1 provides a listing of the roads by island. Since 1972 the road network has increased by 58% while the length of paved roads has increased by 82%.

Table 2.1: Developmentof the Road Network, 1972-1981 (km)

1972 1977 1981 Gravel/ Gravel/ Being Gravel! Paved Earth Total Paved Earth Total Paved Paved Earth Total

Grande Comore 125 136 261 206 199 405 206 43 175 424

Anjouan 79 55 134 100 87 187 137 6 96 239

Moheli 3 85 88 30 65 95 34 25 40 99

Total 207 276 483 336 351 687 377 74 311 762

Source: Ministry of Works, 1980.

In 1979 the Ministry of Equipment and the Environment (MEE) classifiedthe main roads -- mainly paved roads -- as national roads and the rest as regional roads. This system, however, has not yet been officially approved by the Government. Road density is about 425 km per 1,000 km2 or 1.9 km per 1,000 inhabitants,which is above average for East African countriesand sufficient for the country'sneeds. -5-

2.02 The conditionof the paved roads is fair to good. However, a number of cuilvertsand retainingwalls need to be repaired, and worn-off pavement edges need to be restored to their original width on some short sections. Numerous earth roads need upgrading to gravel standard. Each year after the rainy season many of them have to be reconstructedas they are eroded by water from the torrential rains which races down the islands' steep slopes. While the roads are closed, the villages and settlementsthey serve are cut off from the rest of the island. The First Highway Project is assisting the Government to repair the paved roads and improve earth roads. The proposed project will reinforceand extend these efforts (paras. 3.04-3.06).

B. Road Use

Vehicle Fleet

2.03 The currentvehicle fleet is estimated at roughly 1,800 vehicles of which about 15% are heavy vehicles. Available informationon the vehicle fleet is limited to the number of new, privately owned vehicles regis- tered each year and an estimate of Government-ownedvehicles. Annual vehicle registrationis not required and vehicles are not deleted from the registration lists when they are no longer in service. Informationindicates that new registrationsdeclined sharply during the years immediatelyafter independence as expatriatesleft the country but have steadily increased since 1977.

Table 2.2: Motor Vehicle Statistics,1970-1980 1/

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

New Vehicles Registered 257 338 256 388 347 313 217 26 174 364 355

Estimated Vehicle Fleet 2/ - - - - - 1,899 1,859 1,547 1,465 1,441 1,449

1/ Figures exclude Governmentvehicles, estimatedat 300 in 1980.

2/ Assuming a 6-year average vehicle life.

Source: Bureau of Mines, Comoros, December 1980.

To improve its informationon the vehicle fleet, the MEE is implementinga new system for the registrationof vehicles (para. 2.10). More precise informa- tion on the vehicle fleet will be available during 1981 as the new system becomes fully operational. -6-

Traffic

2.04 There were no systematic traffic counts in Comoros until 1979 when MEE, assisted by consultantsBCEOM (France),began semi-annualtraffic counts at importantpoints on the network. That year traffic counts were taken on all paved roads on Grande Comore and Anjouan islands; they were extended to the paved roads on Moheli island in 1980. MEE intends eventually to include regional roads upgraded to gravel standard in the counts.

2.05 The highest traffic volumes, around 300 vehicles per day, are registeredin the vicinity of Moroni, the capital, and on the road between the capitaland the internationalairport. The average daily traffic on paved roads for the country as a whole is about 100 vehicles. Traffic volumes on Grande Comore are higher than those on the other two islands reflecting its relative economic importance.

Road Transport,Industry and Regulation

2.06 Public passenger road transportis provided by owner-operated vehicles. In the cities Renault 4s are used as group taxis to carry up to four passengers. For longer trips 1-ton pick-up vehicles carry up to 17 passengersor freight. There are no buses for public transport.

2.07 In 1979 the Government (i) introducedan axle load limit of 8 tons which is enforced by MEE, and (ii) inaugurateda vehicle registration and inspection system which is administeredby the Public Works Department. While damage to the roads through overloadinghas not been a problem, the new regulationsare designed to prevent any future problems. Passengerfares are establishedby MEE in collaborationwith the various prefecturesand are generallyadhered to by the operators. They are adjusted from time to time for inflation. Fares are based on length and type of road and terrain and reflect operating costs. As soon as a road is improved,transport savings are passed on to users as lower fares. There are no official tariffs for freight, since the heavy vehicles are generally owned by the Government or by contractors and traders for their own use. Entry into the road transport industry requires a license from MEE. This license is routinelyprovided at a nominal fee and does not include any restrictionsas to itineraryor goods to be carried.

Automotive Fuel Prices and Costs

2.08 Gasoline and diesel oil are imported mainly from Kenya and Madagascar. The followingtable summarizesprices and costs as of December 1980. - 7 -

Table 2.3: Prices and Costs of Fuel

Gasoline Diesel Oil (CF/liter)

C.I.F. price plus inland distributioncost 90 88 Profit margin of Hydrocarbure 22 19

Subtotal 112 107

Taxes and duties 38 13

Retail price including taxes 150 120

Source: Hydrocarbureand Ministry of Finance, December 1980

Retail fuel prices in the Comoros are higher than in other countriesof the region. For example, retail prices (includingtaxes) for gasoline in Kenya and Madagascar are 15% and 27% lower, respectively,and for diesel oil 30% and 55% lower, respectively,than in the Comoros. This difference in prices between the countriesis generally true for other imported goods as well.

C. Administration

2.09 MEE is in charge of all public works through its Public Works Department (PWD), which administersall matters related to the entire road network, includingurban roads. It establishesconstruction, improvement and maintenanceprograms; prepares economic and engineeringstudies with its own staff or with consultants assistance;follows up contracts for civil works and procurementof equipment; supervises force account operationsand work- shops; and runs the soils and materials laboratory. MEE is also responsible for the enforcementof vehicle regulationsand for vehicle registrationand inspection. PWD performs its functions through three regional departments (one for each island), each of which operates its own workshop. - 8-

Organizationof Mvlinistryof Equipmentand the Environment

| Minister |

| ra"'nn t5epar-trnentGeneraDelprtmetaof of Department °| Depatment ofo S E c and LPulic Work Arhtctr.nd Wtr CoPa. Eouiprr,ent~ ~~ I ~-.,If LEnivironment reOl ni11 _S_ __ El._ . ,

Departmnent for Studies, Departrrent of Department of Laboratory for Public Program and Control Eciipment Port, Works and Buildings

Regionat Department r egionSl Departvnen Regional Depanrment Granda Comore Anjouan Mhl

Source: MEE, 1980 World Denk - 22598

2.10 The existing highway organization follows recommendations of a consultants study financed by the Project Preparation Facility under the ongoing First Highway Project. Technical assistance experts financed under that project are assisting the Government in establishing the procedures for and operation of MEE and the three regional Public Works Departments. So far, the Government has introduced procedures for programming, budgeting, cost accounting, vehicle registration and traffic counts and for procuring, storing and maintaining equipment. While the overall progress in setting up a highway administration has been satisfactory, actual implementation of the procedures has just begun and some technical assistance, albeit limited, is still needed to consolidate gains and further improve efficiency. The proposed project provides for this (para. 3.09).

D. Training

2.11 The Comoros has no higher education facilities for staff in road- related specialties, but the limited size of the road network and the small number of experts needed do not warrant a specialized training facility. - 9 -

Higher level staff, mostly engineers, lab techniciansand workshop managers, has been trained abroad and subsequentlyon the job by engineeringconsultants and civil works contractors. The First Highway Project followed this pattern by providingassistance to train Comorian staff. Since January 1979, 149 persons, including 12 road technicians,58 foremen, 5 operators, 39 skilled laborers,8 administratorsand 27 mechanics, have had some training in road maintenance,equipment repair and workshop management.

2.12 Most trainees in road maintenancehave acquired the basic skills required to execute their tasks, and since mid-1980 all maintenanceunits are * managed in the field by Comorians. Although much progress has been made and performanceis reasonablysatisfactory, most maintenancepersonnel still need technicalsupport and periodic field visits by experiencedtechnical assistance personnel. Local foremen lack the necessaryexperience to organize operations efficiently;in addition, the level of skills of the mechanics is low and needs to be raised. Though on a considerablysmaller scale than under the ongoing project, the proposed project will continue to provide technical assistancefor on-the-job training for both workshop and road maintenance personnelto reinforce and expand the knowledge and skills they have already acquired (para. 3.09). In addition a few Comorianswill be selected for training at schools abroad (para. 3.10).

E. Planning

2.13 Overall planning is the responsibilityof the Ministry of Finance, but it lacks an experiencedand well-trainedplanning staff. As mentioned in para. 1.11 a planning team, funded under a UNDP project for which the Bank has acted as executingagency, recently arrived in the Comoros and has started its work. One of the team's responsibilitieswill be to draw up a developmentprogram for the highway sector in close collaborationwith MEE; this should be availablein 1982. MEE itself does not have a formal planning unit and none is recommended,given the fairly limited task of such a unit and the need to economizethe small number of experiencedplanning staff in the Comoros. Planning can be handled centrallyin the Ministry of Finance, supportedby technicalexpertise and information (traffic counts, etc.) provided by MEE, once the necessary staff has been trained by the UNDP team.

F. Financing

2.14 Because of the Government'svery tight financialposition, road constructionand maintenance,including most operating costs, are largely financed by bilateralaid (Kuwait and Saudi Funds, Fonds d'Aide et de Cooperation(FAC) and multilateralsources (AfDF, IDA, Organizationof PetroleumExporting Countries (OPEC) and EDF); the Government'sfinancial contributionfrom general revenue is and will continue to be minor. During - 10 -

the period 1974-1982expenditures for constructionwill total US$34.89 million equivalent(Annex 1, Table 2). In 1981, the first year in which all road maintenanceequipment acquired under the First Highway Project will be fully operational,maintenance operations(including equipment depreciation) will total an estimatedUS$2.8 million equivalentwith routine maintenance accountingfor US$0.4 million and periodicmaintenance for US$2.4 million. The Government'scontribution will amount to 13% or US$360,000.

2.15 Road users contributeto Governmentrevenue through taxes and duties on fuel, vehicles and spare parts (Table 2.4) and through annual road-user license fees. The major sources of revenues are the duties and taxes on fuel, which, based on fuel consumptionin 1980 and the correspondingprices, tax rates and duties, should have amounted to CF 200 million (US$800,000),short cf the funds needed to adequatelysupport road maintenanceoperations. In order to augment its Road Fund revenues,the Governmentrecently increased fuel taxes (para. 2.17).

Table 2.4: Road TransportRelated Duties and Taxes, 1980

Customs Consumption Duties Taxes ---- (% of CIF value)---- (CF/L)

Gasoline 13 - 29 1/ Diesel oil 3 16

Passenger cars 8 43 Trucis 3 27

Spare parts for

- Passenger cars 13 43 - Trucks 13 32

1/ Includes CF 10 per liter allocated to the Road Fund and earmarked for road maintenance.

Source: Ministry of Finance.

2.16 Not all the revenues collectedfrom road users, however, are allo- cated to road maintenance. Since January 1980, a portion of the taxes on gasoline (CF 10/liter)has been earmarked for financingroad maintenance operationsand depositedin a separate Road Fund account. The Road Fund tax is levied by customs at the time the gasoline is imported,along with the import duty and a consumptiontax. Hydrocarbure,the Governmentcompany which imports and distributespetroleum products, is responsiblefor paying the taxes to customs. Although there has been a Road Fund for a number of years, its revenues have been used as part of general revenue. Thus far MEE has not been provided funds from the Road Fund to help finance road mainte- nance. As of December 31, 1980, CF 13 million (US$52,000equivalent) had - 11 - accumulatedin the Road Fund from the year's receipts,whereas based on actual gasoline imports, the year-s receipts should have been CF 35 million (US$140,000equivalent). The reason for the shortfalllies principallywith the state electric company and other Governmentagencies which are slow in paying their bills to Hydrocarbure;the latter, in turn, is unable to make timely payments to customs. The problem of the delay in collectingthe revenues for the Road Fund and how to remedy it is being studied by the Governmentand was discussedduring negotiations. To ensure that the Governmentwill be able to finance an increasing share of the wages of temporary local staff engaged in maintenanceand improvementoperations, during negotiationsthe Governmentagreed to set up an advance account in the Treasury of the Comoros to serve as a revolving fund. It also agreed to replenish the account at the beginning of each quarter in amounts sufficient to cover its share of the aforementionedwages for that quarter (para. 3.17). Revenues for this account are expected to come from the Road Fund. A condition of credit effectivenesswill be that the Governmentmake an initial payment of CFlO.0 million (US$40,000equivalent) into the advance account.

2.17 The ultimate, long-termobjective is to enable the Governmentto carry the full cost of road maintenanceusing its own resources. With this objective in mind, the Associationhas suggested that the Government,as a first step, gradually increase Road Fund revenue over the next few years so that by FY1984 (the end of the proposed project) enough revenue would be generated to finance the entire local personnel cost of road maintenanceand improvement(Table 3.3). In July 1981, the Government (i) increased the tax on gasoline from CF 10 to CF 13/liter and (ii) introduceda new tax of CF 5/liter on diesel oil for automotive use, to be increasedto CF 10/liter in January 1982 and to CF 15/liter in January 1983. As a result of these measures, the Road Fund should have accumulatedCF 407 million by June 1984 based on estimatedgasoline and (automotive)diesel oil consumptionand assuming no delay in collection (Table 2.5). - 12 -

Table 2.5: Estimated Road Fund Revenue, 1980 to mid-1984

First 6 Months 1980 to 1980 1981 1982 1983 1984 mid-1984

Tax Rate (CF/liter)

- Gasoline 10 10/13 13 13 13 - Diesel oil 1/ 0 015 10 15 15

Fuel Consumption2/ (million liters)

- Gasoline 4.2 4.6 5.1 5.6 3.0 - Diesel oil 1/ 2.9 3.2 3.5 3.9 2.1

Road Fund Revenue (CF million) 3/

- Gasoline 42 53 66 73 39 273 - Diesel oil I/ 0 8 35 59 32 134

Total Revenue 42 61 101 132 71 407

1/ For automotive use only.

2/ Assuming a 10% annual rate of growth of fuel consumption.

3/ No allowance is made for delays in tax collection.

Source: Hydrocarbure,Ministry of Finance, and Mission estimates.

February 1981

G. Engineering

2.18 The Public Works Department-sStudies, Program and Control Section is responsiblefor the initiationand executionof feasibilityand detailed engineeringstudies and carries out preliminaryinvestigations for minor road and bridge design. A laboratory for soils and materials testing, established under the First Highway Project, will assist MEE in performing these func- tions. Feasibility and engineering studies for larger projects exceed the section's capacity and are therefore carried out by foreign consultants. There are no domestic consulting firms.

2.19 Engineering standards follow French design practices and take into account traffic volume, maximum axle load (8 t), topographic conditions, available constructionmaterials and safety requirements(Annex 1, Table 3). Alignments of improved roads generallyfollow existing tracks to minimize earthworksand to take advantageof existing drainage structures. Due to the - 13 - rugged topography, curves are sharp and 10 curves per km are frequent, slopes are as steep as 10% on paved roads and considerably steeper on earth and gravel roads. The width of earth roads generally is less than 3.0 m, while the width of gravel and paved roads ranges from 3.5 m for older to 5.5 m for newer roads. Paved surfaces consist of a double bituminous treatment on a 10-15 cm granular base. Retaining walls are mostly masonry work, bridges, all of which are short spans, are designed in concrete.

H. Construction

2.20 Road construction in the Comoros is difficult and expensive. The terrain is rugged with steep gradients, the problem is compounded by adverse soil conditions and torrential rains. In addition, mobilization costs are high relative to the small size of the works. Nearly all equipment, materials and staff (except for unskilled labor) must be imported.

2.21 For major road projects, MEE employs foreign contractors following suitable prequalification and tendering procedures. There are no domestic road contractors, but two foreign contractors with headquarters in Madagascar and France are established in the Comoros. Equipment can be imported duty- free on a temporary basis, and remittances abroad by contractors are not restricted. Supervision of works is carried out by the Public Works Depart- ment with the assistance of consultants.

I. Road Maintenance and Improvement

2.22 The ongoing First Highway Project is providing part of the necessary assistance to resurrect road maintenance operations which had collapsed completely when France withdrew its experts and other aid at independence. The Public Works Department has been set up and given responsibility for the maintenance of all roads through its three regional departments (para. 2.09). Technical experts financed under the first project have helped re-establish maintenance procedures and operations and are providing executive support for carrying out a three-year road maintenance program and are training local staff. Comorian staff have gained the basic skills required and have since taken over most positions which had been filled by technical assistance experts (para. 2.12). Field work was initially carried out by one mechanized unit for improving earth roads to gravel standard, routine maintenance gangs and one resealing and two patching units for paved roads. Equipment for these units, financed by the Government, IDA, EDF, Kuwait Fund and OPEC, arrived late and full-scale operations did not get under way until September 1980. The units were supposed to be shared among the three islands as needed, but the Government has decided to assign an improvement unit and a patching/resealing unit to each island. This arrangement is reasonable for the routine maintenance gangs and patching crews since these activities need to be carried out concurrently on all three islands. However, given the low volume of improvement works to be performed on Moheli, this island will be - 14 - assi.gneda lighter unit for road improvementand resealingworks under the proposed project than the units stationed on Grande Comore and Anjouan for this type of work (paras. 3.05-3.06).

2.23 The first project also provided for the constructionand equipping of a workshop on each island for equipment maintenanceand repair with some training for Comorian staff. The proposed project will provide technical assistanceexperts to help complete the training of workshop staff and to assist in carrying out repairs. Improvementof a roads laboratoryand instal- lation of equipmentwere satisfactorilycompleted under the project. FAC will provide a soils engineer for three years. FAC has also been requested to finance (a) fellowshipsfor three engineers and (b) vehicles and additional testing equipment. Two laboratorytechnicians have already received training abroad but more trained laboratorypersonnel is required (para. 3.10).

2.24 Road maintenanceand improvementin the Comoros are carried out by equipment-intensivemethods. When the First Highway Project began, there was little choice but to employ equipment-intensivemethods since the country lacked the managerial, organizational,staffing and technical capabilities that are required for labor-intensivetechniques. With the experiencegained under the ongoing project and the skills acquired by the Comoriansengaged in maintenanceand improvementworks, it is an appropriatetime to begin consider- ing the possibilityof phasing in labor-intensivetechniques.

2.25 During appraisal of the proposed project the introductionof labor-intensivetechniques in road maintenance and improvementwas discussed with the Government. While the Government is indeed concernedabout the growing unemploymentand under-employmentin the Comoros and recognizesthat introduction of labor-intensive techniques is one way to help alleviate this problem, it believes that it would be premature to introduce them at present. The recently acquired road maintenance and improvement equipment (with some additional supplementary equipment) is sufficient to do the work over the next few years. Moreover, introductionof labor-intensivetechniques at this stage would unduly strain the still limited managerialand administrative capacity of MEE and thereby jeopardize the progress made over the last two years. The Government indicated that inclusion of a substantivelabor- intensive componentin a future Third Highway Project (1984/5-1986/7)would be more appropriateand that in preparationthereof, the issues involved should be studied and an action program formulated in the course of the proposed project (para. 3.11).

J. Previous Bank Group Involvementin the Sector

2,26 The Bank Group began lending operations in the Comoros with the ongoing First Highway Project (Credit 852-COM, US$5 million) which became effective January 29, 1979. The project's objectiveswere (i) to re-establish road maintenance organizationand procedures,(ii) to implementa three-year road improvementand maintenanceprogram, and (iii) to improve the existing road network to reduce transport costs, halt deteriorationand increase - 15 -

accessibility to isolated areas. The project included (i) construction of 20.4 km of road and reconstruction of 700 m of main road on Anjouan, (ii) establishment and operation of maintenance and improvement units, (iii) improvement of three workshops and establishment of a soils laboratory, procurement of equipment, and on-the-job and overseas training of personnel, and (iv) feasibility and engineering studies.

2.27 In order to carry out the project effectively and to cope with increasing road improvement and maintenance demands, the Government reorga- nized its public works administration in May 1979. The new organization is working reasonably satisfactorily (para. 2.10). The road construction and reconstruction components have been completed. The Government set up maintenance and improvement units which are operating satisfactorily. While the patching units have covered the entire network, the resealing and improve- ment units will be able to meet only about 30% and 70% of their targets, respectively, due to delayed procurement of equipment. This delay was due to the Government's unfamiliarity with the Bank Group's procurement procedures and the time needed by technical assistance staff to start effective opera- tions. All workshop and laboratory facilities have been set up and equipment delivered. About 150 staff at different levels have been trained. A feasi- bility study for construction to paved standard of a 20-km road section on Moheli, which was to be carried out under the project, showed a rate of return of only 6%. Detailed engineering for this road sectionwas therefore deleted from the project.

2.28 Owing to the Government's budgetary constraints during the initial phase of the First Highway Project, it proved impossible for MEE to pay the wages of temporary labor attached to the four maintenance and improvement units that were being established at the time. In order to permit operations to start as scheduled, the Government and the Association later agreed to finance such wages under the project at a decreasing annual rate (100% in 1980, 75% in 1981 and 50% in 1982). Under the proposed project the Associa- tion will continue to assist the Government in financing these wages (para. 3.17).

2.29 A second unforeseen claim on IDA funds under the project arose from the fact that the Kuwait Fund did not provide the considerable technical assistance input (three mechanics for three years each) that had been expected. As a result, the cost of this assistance was fully financed by the IDA Credit. Because of these two additional claims plus an increase in the cost of the workshops over the original cost estimate, project funds were largely exhausted by the end of June 1981. Since by then about two thirds of the three-year program had been implemented, the remaining one third will be absorbed by the proposed project.

2.30 Given the crisis conditions at the time the First Project was launched and despite the problems encountered during its implementation, the project's overall accomplishments to date are significant. A maintenance organization was created where none existed before and road maintenance and improvement activities, discontinued since 1975, got underway. In addition, and perhaps more important in the long-term development perspective of the Comoros, the First Project has succeeded in laying a proper foundation for effective, future maintenance and improvement of the road network. - 16 -

III. THE PROJECT

A. Objectives

3.01 The proposed project is aimed at continuing,consolidating and extending the effort started under the First Highway Project to strengthen the Government'sroad maintenanceand improvementoperations. Its objectives are: (a) to continue improving the condition of the existing road network to reduce transportcosts and increase accessibilityto isolated areas and to prevent a relapse to the situationfollowing independenceand before the first project; and (b) to continue increasingthe road maintenance capabilityof the MEE through on-the-job and formal training of local road maintenance personnel at all levels and executiveassistance from technical assistanceexperts.

B. Project Description

3.02 The proposed project consists of:

(a) a three-yearprogram for (i) the improvementof about 186 km of earth roads to all-weathergravel standard, (ii) the resealing of about 240 km of paved roads and (iii) the routine maintenance of the gravel roads in (i) above and the gravel roads constructed under the First Highway Project, and regular patching of the entire paved road network;

(b) technical assistanceto help the Government execute the project and train local staff,

(c) fellowshipsfor overseas training of local staff; and

(d) a study on the use of labor-intensivetechniques.

3.03 To these ends, the project will assist in financingthe following;

(a) purchase of additional road constructionand maintenance equipment and spare parts;

(b) purchase of materials and supplies including cement, fuel and lubricants,

(c) wages of local staff engaged in road improvementand incremental road maintenance,

(d) technical assistance,

(e) fellowships,and

(f) a study. - 17 -

Three-year Program to Strengthen Road Improvement and Maintenance Operations

3.04 The proposed project covers a three-year road improvement and maintenance program (mid-1981 to mid-1984). The program includes (a) the improvement of 186 km of earth roads to all-weather gravel standard, (b) the resealing of 240 km of paved roads, and (c) the routine maintenance of the gravel roads in (a) and those constructed under the First Highway Project, and the regular patching of the entire paved road network. This program (Annex I, Tables 4 and 5) was agreed upon with the Government at negotiations. It was also agreed that during project implementation the Government will submit for the Association's review and approval three months before the beginning of each fiscal year (i) an updated annual road improvement and maintenance program, including an economic justification of the proposed road improvements, and (ii) the proposed corresponding budget allocation.

3.05 The proposed improvement works on the earth roads will include (a) reshaping with or without roadbed widening, (b) gravelling and (c) build- ing, repairing and reinforcing drainage structures. The roads to be upgraded to gravel standard are listed in Annex 1, Table 4. Two road improvement units will be needed to carry out this work; one will be assigned to Grande Comore and the other to Anjouan. A lighter unit for both road improvement and resealing works will be assigned to Moheli. Maintenance will include reshaping, filling potholes, removal of pronounced corrugations, and clearing ditches, drains and drainage structures. Three maintenance units, one for each island, will carry out routine maintenance of the entire gravel road net- work. The composition of the units (Annex I, Table 6) and the design standards for the improved gravel roads (Annex I, Table 3) were agreed upon at negotiations.

3.06 The proposed works on paved roads will consist of resealing, filling potholes, repairing pavement edges, surface sections and reconstruction of shoulders, and, where critical, minor improvement of the alignment and widening of the pavement. In line with a six-year resealing cycle, about 240 km of paved roads are also expected to be resealed during the project period. Annex 1, Table 5 identifies the roads selected for resealing. To carry out this work, the following units will be needed; (a) two resealing units, one assigned to Grande Comore and one to Anjouan, (b) three patching units, one for each island, (c) two shoulder reconstruction units, one assigned to Grande Comore and one to Anjouan; and (d) five drainage units whose main function will be to line ditches with stone masonry and to build and improve culverts, two of these units will be assigned to Grande Comore, two to Anjouan and one to Moheli. In addition, Moheli will be assigned a lighter unit (para. 3.05) for both road improvement and resealing works. The type, number and composi- tion of the patching and resealing units, also detailed in Annex 1, Table 6, was agreed upon at negotiations.

3.07 It was originally intended that improvement and patching/resealing units set up under the First Highway Project could be shared among the three islands as needed. Also, since that was the Bank Group's first highway involvement in the Comoros, the exact equipment needs were not known. The - 18 - experience so far has shown that at least two improvementunits, two resealing units and three patching units are needed. The compositionof the existing units will be modified in some cases to reflect experienceto date. The compositionof the proposed units is shown in Annex 1, Table 5. The proposed project will provide the additionalequipment needed to modify the units' composition. The list of equipment to be procured (Annex 1, Table 7) was agreed upon with the Governmentat negotiations.

3.08 The proposed project will also finance the purchase of materials (fuel, lubricants,spare parts, bitumen, cement, steel, gravel and wood) as well as salaries and wages of local personnel. Annex 1, Table 8 gives a list of materials and supplies to be procured.

TechnicalAssistance

3.09 While the First Highway Project has trained Comorian staff, continued technical assistance, though on a considerably reduced scale 1/, will be required to properly organize and implement road improvement and maintenance operations. The proposed project provides 186 man-months of technical assistanceto aid the Government in continuingto build MEE's road improvementand maintenance capacity including on-the-jobtraining of local staff. The technicalassistance will comprise the followingpersonnel;

(i) a highway engineer (for three years) to head the consultants'team and to assist the MEE in plan- ning, coordinatingand implementingthe road improvementand maintenance program and in train- ing local staff in these areas;

(ii) three assistantworkshop managers (for three years each) to assist the workshop managers in organizing and supervisingthe maintenanceand repair of equip- ment and in training workshop staff,

(iii) a mechanical engineer (for a total of six months) for short term advisory services to the consultants'team leader; and

(iv) two road foremen (for 18 months each) to be attached to the road improvementunits to help organize and execute road improvementworks, they will also be available to aid the paved road units if needed.

Technical assistancepersonnel will devote about half their time to formal and on-the-jobtraining of local staff. The latter will include continued training for about 10 road engineersand technicians,30 road foremen and 100 mechanics and equipment operators. The experts' outline terms of reference, required qualificationsand schedule of assignmentwas agreed upon with the Government at negotiations(Annex 2).

1/ The First Highway Project financed 320 man-monthsof technical assistance. - 19 -

Fellowships

3.10 To complementthe on-the-job training provided by the technical assistancepersonnel (para. 3.09), the project provides 60 months of fellowships for overseas training of key local staff as follows:

(i) three foremen of mechanized road maintenanceunits (for seven months each);

(ii) three assistantworkshop managers (for seven months each);

(iii) three surveyorsfor MEE's Program and Control Section (for three months each); and

(iv) three laboratorytechnicians (for three months each).

Study

3.11 The project provides for consultantsservices (6 man-months) to undertakea study on labor-intensivetechniques in road maintenance and improvement(para. 2.25). This study will identify the options, estimate their financial and employment implications,and recommend a program for implementationin the subsequenthighway project (HighwaysIII). The Associa- tion will aid the Government in the preparationof the terms of reference and the supervisionof the study. During negotiationsthe foregoingwas discussed and the Governmentagreed to engage consultantsto undertake the study by September30, 1982, on terms and conditions satisfactoryto the Association.

C. Cost Estimates

3.12 The total project cost includingcontingencies is estimatedat US$14.70 million, with a foreign exchange componentof US$11.80 million or 80% of total project costs. Excluding taxes and duties (US$1.20 million), the total cost is US$13.50 million. The base cost figures refer to mid-1981, the expected time of credit negotiations. - 20 -

Table 3.1: Estimated Project Costs

Foreign Exch. Local Foreign Total Local Foreign Total Comp. Z ------CF millon ------US$ million-----

(a) Strengtheningof road improvement and maintenance

(i) Procurement of road maintenance equipment 2.3 220.0 222.3 0.01 0.88 0.89 99

(ii) Operating costs

- spare parts, fuel, lubricants and materials 170.0 1,540.0 1,710.0 0.68 6.16 6.84 90

- salaries for permanent staff 183.0 - 183.0 0.73 - 0.73 0

- wages for temporary staff 147.7 - 147.7 0.59 - 0.59 0

(b) Technical assistance

186 man-months 57.5 522.5 580.0 0.23 2.09 2.32 90

(c) Fellowships 7.5 72.5 80.0 0.03 0.29 0.32 91

(d) Study

6 man-months 2.5 17.5 20.0 0.01 0.07 0.08 90

Subtotal (a) to (d) 570.5 2,372.5 2,943.0 2.28 9.49 11.77 81

(e) Contingencies

(i) Physical (10%) 57.1 237.3 294.3 0.23 0.95 1.18 (ii) Price 97.4 340.2 437.7 0.39 1.36 1.75

Subtotal (e) 154.5 577.5 732.0 0.62 2.31 2.93

Total Project Cost 725.0 2,950.0 3,675.0 2.90 11.80 14.70 80

Total Projects Cost excluding taxes and duties 425.0 2,950.0 3,375.0 1.70 11.80 13.50 87 - 21 -

3.13 Cost estimates for equipment, spare parts, materials and supplies are based on recent bid prices and quotations in the Comoros. Operating costs of equipment are based on experience of MEE's existing brigades. The cost of wages and salaries reflect current Government scales.

3.14 The cost of technical assistance,assumed to be provided by a foreign consultingfirm, is estimatedat US$12,500 per man-month including salaries,overheads and profits, as well as reimbursableexpenses payable to consultants,i.e. housing, travel and local subsistence. These are in line with recent experiencein the Comoros.

3.15 The cost of fellowshipsis based on the current cost of overseas training in Europe and includes tuition, subsistence,travel and insurance.

3.16 A quantity contingencyallowance of 10% for all project components has been included in the cost estimates. Provision for future price increases has been calculatedusing the followingrates for all items:

Item 1981 1982 1983 1984

Foreign costs (%) 9.0 8.5 7.5 7.5

Local costs (%) 10.0 10.0 10.0 10.0

D. Financing

3.17 The proposed IDA Credit of US$6.3 million plus parallel cofinancing of US$5.8 million by the AfDF will finance 100% of the foreign cost and 17% of the local cost of the project net of taxes. The Governmentwill finance the remaining local cost, which, excluding taxes of US$1.2 million, amounts to US$1.4 million equivalent,or about 10% of total project cost. Specifically, the Governmentwill finance all salaries of permanent, local road maintenance staff. In addition at negotiationsthe Governmentagreed to finance an increasingpercentage of total wages of temporarylocal road maintenance labor during the project period: 25% in 1981, 50% in 1982, 75% in 1983 and 100% thereafter. AfDF will finance the procurementof new equipment, tires, fuel, lubricantsand bitumen. IDA will finance the remainingoperating costs (spare parts, cement, steel, gravel and wood), technicalassistance, fellowshipsand a study. Table 3.2 presents the overall financingplan of the proposed project, while Table 3.3 shows the financing of local personnel by calendar year. Table 3.2: Financing Plan for Project (US$ million)

IDA AfDF Government Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total a. Strengtheningof road improvementand maintenance (i) Procurementof road maintenance equipment _ - _ .01 .88 .89 - - - .01 .88 .89 (ii) Operating cost - spare parts, fuel, lubricants and materials _ 2.36 2.36k - 3.80 3.8021 .68 - .68 .68 6.16 6.84 - salaries for permanent staff ------.73 - .73 .73 - .73 - wages for temporary staff .22 - .22 - - - .37 .37 .59 - .59 b. Technical Assistance - 2.09 2.09 - - - .23 - .23 .23 2.09 2.32 c. Fellovsbips * .29 .29 - - - .03 - .03 .03 .29 .32

d. Study .01 .07 .08 ------.01 .07 .08

Sub-total a-d .23 A-Al 5.04 .01 4.68 4.69 2.04 - 2.04 2.28 9.49 11.77 e. Contingencies .06 1.20 1.26 - 1.11 1.11 .56 - .56 .62 2.31 2.93 Grand total .29 6.01 6.30 .01 5.79 5.80 2.60 - 2.603/ 2.90 11.80 14.70

LI Cost ofspare-partaUS$4.36 million cement US$0.42 " steel US$0.06 " gravel US$0.49 t wood US$0.03 " Total US$2.36 million 2/ Cost of tires US$0.46 million fuel and lubricants US$1.72 t bitumen US$1.62 t Total US$3.80 million 3/ Includinga tax component of US$1.2 million; the Government'snet contributionis US$1.4 million. - 23 -

Table 3.3: Financing of Local Salaries and Wages, mid-1981 to mid-1984 1/

Last 6 First 6 Months Months 1981 1982 1983 1984 Total (CF million)

A. Expenditures

Salaries 35.15 73.81 81.20 42.53 232.69 Wages 28.37 59.59 65.54 34.33 187.83 Total Expenditures 63.52 133.40 146.74 76.86 420.52

B. Financing

IDA:

Decreasing% of wages 21.28 29.79 16.39 - 67.46 (75%) (50%) (25%) (36%)

Government:

Salaries and remainingwages 42.24 103.61 130.35 76.86 353.06 Total Financing 63.52 133.40 146.74 76.86 420.52

(US$ million)

IDA .28 Government 1.40

1/ Salaries refer to permanentNEE staff; wages refer to temporaryMEE labor engaged in the proposed project and include physical and price contingencies.

3.18 Effectivenessof the IDA Credit will be conditionalupon notifica- tion by the AfDF that all conditionsprecedent to the disbursementof the AfDF Loan, except for the effectivenessof the IDA Credit, have been ful- filled.

3.19 Retroactivefinancing up to US$200,000will be required to bridge the financinggap between the terminationof the First Highway Project (end of June 1981) and the expected date of Board presentationof the proposed project a few months later. This will cover technical assistanceand operating costs. - 24 -

E. Implementationand Procurement

3.20 MEE, through its Public Works Department,will be responsiblefor project execution includingoverall planning and budgeting for road improvement and maintenance operationsas well as for equipmentmaintenance and repair. The technicalassistance team under the project will assist the Public Works Departmentin the execution of the project. The project will be implemented as shown on the implementationschedule below. During negotiationsthe Governmentagreed to this schedule.

FEDERAL ISLAMIC REPUBLICOF THE COMOROS SECONDHIGHWAY (MAINTENANCE) PROJECT STAFF APPRAISALREPORT ImplementationSchedule

1981 1982 1983 1984 Activity .- 3 4 1 2 3 4 1 2 3 4 1 2

A. Strengthening of Road Improvement and Maintenance I i) Procurement of Equipment 1) Preparation of Bidding Documents 21 Agreement by Government end Association 3) International Shopping and ICE 4) Evaluation of Bids and Contract Awards 5) Equipmentt Lenivery lii) Executiorn of Program 1) Preparation of Progrem In 2) Agreement by Government and Association 3) Works

B. Technical Assistance _ __ p C. Fellowships

D. Study 1) Preparation of TOR . 2) Execution

Vlorld En,k-22E39

3.21 Road improvementand maintenanceworks. As under the first project, this will be carried out by force account using mechanizedunits established under that project and supplementedunder the proposed project. The Public Works Departmentwill prepare the necessarywork drawings and make engineering surveys for the works to be executed; its laboratorywill perform the site investigationsand soil and materials tests. Improvement,resealing and other units, assigned to the three Regional Public Works Departments,will implement the work program on the respective islands. The technical assistance team will help execute and supervise the works and will ensure cost and quality control and efficiency of the units. The Government has a core of personnel trained under the First Highway Project and has agreed to assign additional - 25 -

personnel,as required, to implementthe road improvementand maintenance program. Upon completionof the program under the project, the mechanized units will continue their work in line with Governmentpriorities.

3.22 Equipment (US$0.89million) and tires, fuel, lubricantsand bitumen (US$3.80million), under parallel financingby the AfDF, will be procured under AfDF procedures. Spare parts (US$1.36 million) financed by the Assoocia- tion will be procured through internationalcompetitive bidding; an exception may be made for proprietaryspare parts costing up to a total of US$500,000 which may be procured directly from original manufacturersor their agents. Cement (US$0.42 million) financed by IDA will be procured through international competitivebidding in line with Bank Group guidelines. The small amount of steel (US$0.06 million), also financed by IDA, will be procured by limited internationaltender in line with Bank Group guidelines. All items will be bulked to the extent possible to make them attractive to internationalmanu- facturers and dealers. Some materials acquired locally (namely,gravel and wood) together costing about US$500,000 can be procured under local competi- tive bidding proceduresacceptable to the Association. Lists of equipmentand material to be procured under the project are given in Annex 1, Tables 7 and 8. The Public Works Department,with the assistance of consultantsunder the project, will be responsiblefor procurement. The above arrangementswere agreed upon with the Governmentduring negotiations.

3.23 TechnicalAssistance. The Governmentwill select and employ consultantsfor technicalassistance on terms and conditionssatisfactory to the Association. ConsultantsBCEOM's services under the First Highway Project will be terminatedby end of June 1981, but will probably continue under the proposed project. The Government,however, has not yet decided. Completion of technicalassistance under the proposed project is expected by mid-1984. The contract for consultingservices will be awarded in accordance with 1981 Bank Group Guidelinesfor the Use of Consultants.

3.24 Fellowships. The Governmentagreed to submit to the Association for its approval by March 31, 1982, a detailed program for the overseas training of its local staff financed under the Project. This program will include, inter-alia,the names of the candidates selected for overseas training as well as their CVs; a description,timetable and cost of the training; the training institutions;and an indicationof the assignmentsof the candidates upon return from overseas training.

3.25 Study. The Governmentwill select and employ consultantsto execute the study on labor-intensivetechniques on terms and conditions satisfactoryto the Association.

F. Disbursements

3.26 The Credit Funds would be disbursed as follows:

(a) 75% of local wages for temporary road maintenance personnel in 1981, 50% in 1982, 25% in 1983; - 26 -

(b) 100% of foreign expendituresor 90% of local expendituresfor spare parts, cement, steel, gravel and wood;

(c) 100% of foreign expendituresfor technicalassis- tance and training;and

(d) 100% of total expendituresfor fellowships.

Disbursementsunder (b), (c) and (d) will be fully documented. Disbursements under (a) will be made against statementsof expenditurecertified by the Director of Public Works and retained in the Project Unit for inspectionby the Associationduring supervisionmissions. An estimated schedule of dis- bursement is given in Annex 1, Table 9; the Credit's closing date is June 30, 1985. The Government will open a special account in the Treasury of the Comoros to finance those local expendituresto be reimbursedby the Asso- ciation. The Associationwill make an initial deposit into the special account of the Comorian franc equivalentof US$200,000. Arrangementsfor the operationof the special account were agreed at negotiations.

G. Accounting,Auditing and ReportingRequirements

3.27 Project accounts, including statementsof expenditures,will be maintained by the Public Works Department with separate accounts for each component and will be availab'_ f'r inspecticnb- the Associationduring project supervisionmissions. MEEs financialcontroller, assisted by French technical assistance,has been responsiblefor maintaining project accounts under the First Highway Project. This arrangementhas worked satisfactorily and will be continued under the proposed project. During negotiations,the Government agreed that all project accounts will be audited by independent auditors acceptable to the Association and that the audited accounts together with the auditor'sreport will be submittedto IDA not later than six months after the end of each fiscal year during project implementation.

3.28 During negotiations,the Government and IDA agreed on progress reporting requirements(Annex 3), which should include indices for measuring implementationprogress, and submissionof a project completion report in a form satisfactoryto the Association not later than six months after the closing date of the Credit.

H. Ecology

3.29 The project is not expected to have any detrimentalimpact on the ecology. In fact, soil erosion on the improved roads during the rainy season will be less than at present as drainage facilitieswill be provided. Dust formation and its detrimentaleffect on surroundingvegetation along the improved roads during the dry season will be lower as a result of an adequate layer of gravel on the roads. - 27 -

IV. ECONOMIC EVALUATION

A. Introduction

4.01 In the absence of:railways and navigablewaterways, an adequate road network, which permits low cost and reliable transportof people and goods, is a sine qua non for economic development. Agriculture,the mainstay of the economy, is entirely dependent on roads for transportof inputs and outputs. Furthermore,access by the largely rural populationto educational,medical and administrativeservices would be criticallyhampered without an adequate road network.

4.02 Because of the deteriorationof the roads and the collapse of the road maintenanceorganization after independence,the First Highway Project concentratedon maintenance and imprqvementof the road network and building up a maintenanceorganLzatjon. The proposed Second Highway Project will continue the effort started in the first project with the same focus on improvingand maintaining the road network and building up a Comorian road maintenance capability.

B. Benefits and Beneficiaries

4.03 The improvement of earth roads to gravel standard will enable year- round travel on these roals, ii_provethe reliabilityof service, and result in a reduction in transport costs which is passed on to the rural population in the form of lower transport rates (para. 2.07). All three factors--increased accessibility,improved reliability and lower transport costs--willstimulate agriculturalproductior and provide improved access to health and educational facilitiesand other Government services,thus raising the standard of living of the rural populrition, In addition,with the upgrading of the earth roads to gravel standare and r uDisequentroutine and periodic maintenance, the cost of annually 'reopŽning" tlue earth roads after the rainy season will be avoided.

4.04 The p;itching and resealing of the main (paved) road network will prevent the deterioration of these roads. As a result, an increase in vehicle operating cost;swill be avo:ided and costly road reconstruction postponed. Moreover, proper patching and resealing should not only prevent an increase in vehicle operating (,sts but also improve driving conditions and reduce vehicle operating cost:3bXoJw, presiznt levels. The benefits of the patching and resealing acti'uit es are e:Kpected to accrue ultimately to the population at large, both pr3duicers and consumers,given the adjustment of transport charges tr improved road conditions.

4.05 The intititut:'on-bu-ildtngcomponent of the project represents a major benefit, even if not quantified (para. 2.09). It wtll continue to help improve road maintenance thereby reducing the waste of resources which results from inadequate zaintenanc;e and high transport costs. - 28

C. Economic Analysis

4.06 Costs and benefits have been calculatedfor (a) the improvementof 62 km of typical earth roads to gravel standard annually over a six-year period and their subsequentmaintenance and (b) the resealing of 80 km of typical paved roads annually over a six-year period and the regular patching of the paved road network. The overall rate of retuin of these two components is 17% and the benefit/costratio is 1.3:1 assuming a.10% cost of capital in the Comoros.

Road ImprovementUnits

4.07 This project component accounts for 27% of tot:alproject costs. The cost/benefitanalysis, including the detailed assumptions underlying the calculation,is presented in Annex 1, Table 10. The cos:s include (i) the (replacement)cost at the beginning of the proiect period of the equipment already in the Comoros (which recently arrived) plus the costs of some addi- tional, complementaryequipment to be financed under the project; (ii) the operating costs of all equipment of the road improvemLentunits during the six-year life of the equipment (includingfuel, lubri.cants,spare parts, material, and local personnel); (iii) the cost of sul,sequentroutine mainte- nance of the gravel roads during the ten-year life oi the roads; (iv) the cost of regravellingafter five years; and (v) the ccjstof technicalassis- tance directly attributableto the operation of the road improvementunits. The benefits include: (i) the avoided cost of annualAy "reopening"the earth roads after the rainy season; and (ii) the vehicle op,rratingcost savings (Annex 1, Table 11) estimated at US 40 cents per vehicle km, resulting from upgrading the earth roads to gravel standard and takir.ginto account a base year traffic of 30 vehicles per day and an annual traffic growth rate of 12%. The estimated base year traffic of 30 vehicles per day consists of 15 vehicles "normal" traffic reflectingthe actual traffic volume at present observed on typical earth roads plus an estimated 15 vehicles of "generated" traffic as a result of increased agriculturalproduction following r:oadimprovement. Because of the uncertainty surroundingthe generated t:rafficestimate the sensitivityanalysis (para 4.09) considers the impact of exciuding 50% of the generated traffic benefits from the economic analysis. The ilnternalrate of return of the improvementworks, of which the economie Life.spans a 16-year period, is 18% and the benefit/costratio is 1.3:1 aasumLng a 10% cost of capital in the Comoros.

4.08 In addition to the economic analysis of thteentire roa,iimprovement program in terms of upgrading "typical" earth roads,referred to in para. 4.06 (a) above, a separate analysis has been undertakenof the roads i'obe upgraded during the first year of the road improvementprograu . Annex 4 provides the details. The internal rates of return of t:hefour roads involve&.range between 25% and 41%. Details of the analysis are sh,ownin Anrex 4. - 29 -

Patching and ResealingUnits

4.09 This project componentaccounts for 60% of total project costs. The cost/benefitanalysis, including the detailed assumptionsunderlying the calculation,is presented in Annex 1, Table 12. The costs include: (i) the (replacement)cost at the beginningof the project period of the equipment already in the Comoros (which recently arrived) plus the cost of some addi- tional, complementaryequipment, to be financed under the project; (ii) the operating costs of all equipment of the patching and resealing units (including fuel, lubricants,spare parts, material, and local personnel)during the six-year life of the equipment;and (iii) the cost of technicalassistance directly attributableto the operation of the patching and resealing units. The benefits include: (i) the avoided road maintenance cost, i.e. the routine maintenance cost which would have been incurred in the absence of the project (filling of potholes, cutting of grass, etc. by manual labor); and (ii) the vehicle operating cost savings (see Annex 1, Table 11) which will graduallyincrease from US 2 cents to US 14 cents per vehicle km during the six years operation of the patching and resealing units (based on the assumptionthat during that period, in the absence of the project, the roads would slowly deteriorateto gravel standards),and gradually decline from US 14 cents per vehicle km to US 2 cents per vehicle km during the next six years (based on the assumption that the roads would slowly deteriorateupon the discontinuationof the patching and resealingoperations). The rate of return of resealing works, of which the economic life spans a 13-year period, is 16% and the benefit/costratio is 1.2:1 assuming a 10% cost of capital in the Comoros.

D. Sensitivityand Risks

Sensitivity

4.10 Road ImprovementUnits. This component is not very sensitive to reasonablechanges in estimates of costs and benefits: reducing vehicle operating cost savings by 15%, decreasing the benefits from generated traffic by 50% or increasingthe cost of equipmentoperation and routine maintenance by 30% reduces the rate of return from 18% to 13%.

4.11 Patching and Resealing Units. This component is more sensitive to quite possible changes in estimated costs and benefits: reducing vehicle operating cost savings by 15% reduces the rate of return from 16 to 11%. Increasingequipment operating costs by 30% or assuming an annual rate of traffic growth of 4% rather than 8% brings the return down to 10%.

Risks

4.12 Delays. Implementationof the First Highway Project experienced considerabledelays not only because it was the first Bank Group project in the highway sector but also because it was the first Bank Group project in the - 30 -

Comoros. The Government and MEE--because of the First Highway Project--are now in a better position to implement the proposed Second Highway Project more efficiently. Implementation delays as experienced during the First Highway Project are less likely to occur under the proposed project but cannot be ruled out. Intensive supervision and constant monitoring of progress under the proposed project are therefore imperative.

4.13 Local Financing. Another problem encountered under the First Highway Project was the Government's inability to provide the recurrent funds to pay the wages of local temporary labor. Under the proposed Second Highway Project, the Government is expected to finance 10% of total project costs amounting to the salaries of all permanent maintenance staff plus an increasing percentage of the wages of local temporary maintenance personnel (25% in 1981, 50% in 1982; 75% in 1983 and 100% thereafter).

4.14 Under the terms of the Credit Agreement of the proposed project the Government will be obliged to provide the necessary recurrent funds while during project implementation the Government's proposed budgetary allocations for road maintenance will be discussed and agreed annually with the Asso- ciation. Also, a Road Fund, of which the revenue is earmarked for road mainte- nance, was established last year (para. 2.16) and the Government (i) increased the fuel tax which generates the Road Fund revenue (para. 2.17) and (ii) intends to speed up the tax collection process (para. 2.16). The estimated potential Road Fund revenue available during the project period (Table 2.5) will be more than adequate to cover the Government's financial contribution to the project. Finally as a condition of credit effectiveness the Government will establish an advance account from which its contributions to the project will be financed (para. 2.16).

4.15 Despite these efforts, a recurrence of the Government's inability to provide the necessary local funds cannot be ruled out. Because of the Government's persistent very tight financial position, it may not be in a position to allocate the necessary funds from general revenue and it may decide at any time to revoke the earmarking of the Road Fund revenue and use the money for other purposes. Also, the Road Fund tax collection may not improve or may even deteriorate resulting in insufficient funds from that source.

4.16 During implementation of the project, the Government's financial contribution to the project should be given continued and careful attention to avoid recurrence of the problem encountered under the first project. If, nevertheless, the problem should arise again, remedial actions should promptly be formulated and agreed upon with the Government to avoid any interruption in project implementation. The proposed project is worthwhile in spite of these risks.

V. AGREEMENTS REACHED AND RECOMMENDATION

5.01 During negotiations the following items were discussed and agreed upon: - 31 -

(a) the Government will consult with the Association before undertaking any other project in the highway subsector (para. 1.12);

(b) the Government will establish and thereafter make quarterly payments into an advance account to cover its share of local wages for road maintenance (para. 2.16),

(c) a three-year (mid-1981 to mid-1984) road improvement and maintenance program, and submission to the Association for its review and approval at least three months before the beginning of each fiscal year of (i) an updated, annual road improvement and maintenance program, including an economic justification of the proposed road improvements, and (ii) the proposed corresponding budget (para. 3.04);

(d) the composition of the two road improvements units and the design standards for the improved gravel roads (para. 3.05),

(e) the type, number and composition of the patching and resealing units (para. 3.06),

(f) a list of road maintenance equipment to be procured (para. 3.07),

(g) outline terms of reference, required qualifications and schedule of assignment of technical assistance experts (paras. 3.09 and 3.23);

(h) appointment of consultants to conduct a study on labor- intensive methods in road maintenance and improvement by September 30, 1982, on terms and conditions satis- factory to the Association (para. 3.11);

(i) the Government's financing of an increasing percentage of total wages of temporary, local road maintenance labor during the project period: 25% in 1981, 50% in 1982, 75% in 1983 and 100% thereafter (para. 3.17);

(j) arrangements for the procurement of equipment, supplies and material (para. 3.22),

(k) submission of a detailed overseas training program to the Association for its review and approval by March 31, 1982 (para. 3.24);

(1) an audit of all project accounts by independent auditors acceptable to the Association and submission of the audited accounts together with the auditors- report to the Association not later than six months after the end of the fiscal year (para. 3.27), and - 32 -

(m) an implementationschedule, a progress reporting system and preparationof a project completion report (paras. 3.20 and 3.28).

5.02 The followingwill be conditions of effectivenessof the proposed Credit:

(a) an initial payment of CF 10.0 million (US$40,000 equivalent)into the advance account (para. 2.16);

(b) notificationby AfDF that all conditions precedent to the disbursementof the AfDF loan, except for the effectivenessof the IDA Credit, have been fulfilled (para. 3.18); and

(c) establishmentof a special account in the Treasury of the Comoros to be used to pay local expendituresfinanced by the Association (para. 3.26).

5.03 Agreement having been reached on the items listed in para. 5.01, the proposed project is suitable for an IDA Credit of US$6.3 million to the Federal Islamic Republic of the Comoros on standard terms.

October 1981 - 33 - ANNEX 1 Table 1

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS SECOND HIGHWAY (MAINTENANCE) PROJECT STAFF APPRAISAL REPORT

Road Network, 1981 (km) 1. GRANDE COMORE: 424

Paved roads Gravel and earth roads

Moroni-Mitsamiouli 36 Ivembeni-N'Tsoundjini 33 Mitsamiouli-Bahani 52 Bandamadji Itsikoudi 25 * Bahani-Moroni 11 Makorani-Tsinimoipanga 24 Moroni-Foumboni 49 Panda-Nioumadzaha 18 * Foumboni-Bandamagi 11 Memboidjou-Chezani 14 Moroni-M'Vouni 6 Maoueni-M'Beni 12 Itsandra-Bahani 8 Maoueni-Pdjani 8 N'Tsaoueni-Maoueni 10 Mitsoudje-Nioumbadjou 7 M'Kazi Link 2 Simboussa-Male 6 Ikoni Link 6 Mitsamiouli-Memboidjou 6 Urban roads: Moroni 14 Simboussa-Ouroveni 6 Mitsamiouli 1 206 M'Vouni-Boboni 6 Mandza-M'Chenazi 5 Various links 48 218 2. ANJOUAN: 239

Paved roads Gravel and earth roads

Nioumakele ring road 20 Dindi-Koni Djodjo 4 Mutsamudu-Ouani-Domoni 34 Niambamoro-Dagi 5 Domoni-M'Remani 16 Sima-Boungueni 4 Mutsamudu-Sima 20 Pomoni-Moya 6 Sima-Pomoni 21 Moya-M'Remani 17 Sima-Bimbini 6 Dindi-Pomoni 14 Domoni-Ajaho 3 Domoni-Nioumakele 14 Various Links 9 Bandamagi-Chiroroni 6 Urban roads: Mutsamudu 6 Bambao-Similime 19 Domoni 2 137 Mutsamudu-Koki 8 Various Links 5 102 3. MOHELI: 99

Paved roads Gravel and earth roads

Fomboni-Sambia 17 Fomboni-Miringoni 25 * Sambia-Nioumachoua 13 Miringoni-Nioumachoua 20 Urb4 roads: Fomboni 2 Wanani-Itsamia 12 Nioumachoua 2 34 Kangani-Hagnamoida 3 Various Links 5 65 TOTAL Paved 377 Gravel and earth roads 385 (451 by 1982)

* Road being constructed to bituminous standard, completion expected by 1981/82.

Source: Ministry of Equipment and the Environment, 1980. FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Expenditures for Road Construction, 1974-82

Financed by

Road Section Island Length Tostl FIDES Fund AfDF / Saudi Government Construction

(Km) ------(US$ million ------

SAMBIA-NIOUMACHOUA Moheli 14.5 0.78 - 0.69 - 0.09 1974-77

SIMA-POMONI Anjouan 22.0 2.69 1.60 1.09 - 1974-77

MITSAMIOULI-M'BENI Gr. Comore 26.0 2.12 0.83 1.29 - _ - 1975-78

M'BENI-BAHANI Gr. Comore 23.7 1.79 0.19 1.60 - - - 1975-78

FOUMBONI-BANDAMADJI Gr. Comore 11.1 1.46 0.67 0.79 - _ - 1975-78

KOIMBANI LINK Gr. Comore 6.2 0.40 - 0.40 - - - 1975-78

POMONI-MOYA Anjouan 5.8 2.40 - 2.40 - - - 1979-81

NIOUMAKELE Anjouan 20.4 4.00 - - 4.00 - - 1979-81

BANDAMADJI-ITSIKOUDI PANDA-NIOUMADZANA Gr. Comore 42.8 9.75 - - - 9.75 - 1979-81

FOMBONI-MIRINGONI Moheli 26.7 9.50 - - - 9.50 - 1979-82

Total 199.2 34.89 3.29 8.26 4.00 19.25 0.09

_r __ 1/ Cofinancing under First Highway Project Credit 852-COM n x

Source: Ministry of Equipment and the Environment and Mission estimates, December 1980 - 35 - Annex 1 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS Table 3

SECOND HIGHWAY(MAINTENANCE) PROJECT STAFF APPRAISAL REPORT

A. Design Standard of Paved Roads

Design Speed (km/h) 50 l/ Minimum Horizontal Radius (m) 30 (12)- Minimum Vertical Radius: Concave (m) 700 Convex (m) 500 Maximum Gradient (%) 10.5 Maximum Superelevation (%) 7 Pavement Width (m) 5.0 (3.5) Formation Width (m) 6.0 (4.5) Maximum Widening of Pavement in Curvee (m) 2.5 Cross Fall: Pavement (%) 2 Shoulders (%) 3 Side Slope: Embankment (horizontal/vertical) 3/2 Cut ( " 1/2, (1/6)- Pavement Type: Sub-base 14 cm of selected materials Base 15-25 cm of crushed stone Surface Double Bituminous Surface Treatment Width of Structures same as Roadway Width

B. Design Standard of Gravel Roads

Design Speed (km/h) 40 Minimum Horizontal Radius (m) 20 (10)1 Maximum Gradient (%) 12 Maximum Superelevation (%) 8 Road Width (m) 4.5 Cross Fall: Gravel Surface (%) 3 Shoulder (%) 4 Side Slope: Embankment (horizontal/vertical) 3/2 Cut ( " / " ) 1/2 (1/6)2/ Road Structure: Base 10 cm of selected materials Surface 15 cm crushed stone Width of Structures same as Roadway Width.

1! ( ) refers to exceptional circumstances. 2/ In rock formation

Sc.rces: SECMO, 1978; BCEOM, 1980. Annex 1 -36o- Table 4

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Three-Year (mid-1981 to mid-1984) Work Program for Improvement TJnits (Km)

Improvement

Total Completed by end of Road Section Length 1st Year 2nd Year 3rd Year

(i) Grande Comore

Ivembeni-N'Tsoundjini 33 30 3 Dzahaojou-Tsinimoipanga 22 - 22 Tsinimoipanga-Pidjani 4 - 4 - Bambadjani-Nioumachoua 4 - 1 3 Fassi-Magueni-Moidn 20 - - 20 Nitsaqueni-lvembeni 6 - - 6

Subtotal (i) 89 30 30 29

(ii) Anjouan

Bambao-Jimilime 19 19 - - Moya-M'Remanini 17 6 11 Pomini-Dindi 14 - 14 - Domoni-M'Ramani 14 - 1 13 Other 1/ 13 - - 13

Subtotal (ii) 77 25 26 26

(iii)Moheli

Miringoni-Nioumachoua 20 6 7 7

Subtotal (iii) 20 6 7 7

Grand total 186 61 63 62

_/ The specific roads to be improved will be determined during project execution. - 37 - Annex 1 Table 5

FEDERAL ISLAMIC REPTJBLIC OF THE COMOROS

SECOND HIGHIAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Three-Year (mid-19R1 to mid-1984) Work Program for Patching and Resealing Units (1(m)

A. Resealing

Total Completed by end of Road Section Length 1st Year 2nd Year 3rd Year

(i) Grande Comore

Moroni-Mitsamiouli 36 36 - Moroni-Foumboni 48 4 40 4 Foumboni-Bandamadji 11 - - 11 Moroni-Bahani 11 - - 11 Iconi link 7 - - 7 Itsandra Bahani 8 - - 8

Subtotal (i) 121 40 40 41

(ii) Anjouan

Mutsamudu-Sima 19 - Mutsamudu-Ouani 6 6 - Ouani-Domoni 28 - 28 Sima-Marahare 4 4 - - Sima-Bimbini 6 - - 6 Domoni-M'Remani 16 - - 16 IJrbanStreets Mutsamudu 6 _ - 6

Subtotal (ii) 85 29 25 28

(iii)Moheli

Fomboni-Sambia 17 11 6 - Sambia-Nioumachoua 13 - 5 8 Urban Streets: Fomboni 2 - - 2 Nioumachoua 2 _ - 2

Subtotal (iii) 34 11 11 12

Grand total 240 80 79 81

B. Routine Maintenance (annually)

Asphalt patching 300 km Reshaping of shoulders 30 km Ditch cleaning 150 km Concrete/masonry construction 5000 cbm - 38 - Annex 1 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS Table 6 Page 1 of 3 SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Composition of Mechanized Units

A. Gravel Roads

2 Improvement Units _/ Grande Existing Equipment Comore Anjouan Total

Dozer (D6) 1 - 1 Dozer 814, Wheel 1 1 2 Graders 1 1 2 Wheel-loaders 1 1 2 Roller (lOt) 1 1 2 Water tanker 1 1 2 Dump trucks (4m3 ) 5 5 10 Lubrication truck 1 1 2 Cars 1 1 2 Compressors and Accessories 2 2 4 Water Pump 1 1 2

Complementary Equipment 2/

Vibrating roller 1 - 1 Water Pump 1 1 2 Cars 1 1 2

Staff

Foremen 6 Equipment Operators and drivers 28 Laborers 50

3 Maintenance Units 3/ Grande Existing Equipment Comore Anjouan Moheli Total

Dozer (75HP) 1 - - 1 Graders 1 1 - 2 Wheel loaders 1 1 1 3 Rollers 1 1 1 3 Dump trucks (2.5 m3 ) 2 2 1 5 Compressors 2 1 1 4 Vibration plates 1 1 1 3 Agricultural tractors with blade - 1 1 2

Complementary Equipment 2/ - - - -

Rubber tire roller - - I 1 Cars - - 1 1

Staff

Foremen 3 Equipment Operators and Drivers 16 Specialized laborers 7 Laborers 45 - 39 - Annex 1 Table 6 Page 2 of 3 B. Paved Roads

2 Resealing Units 11 Grande Comore Anjouan Total Existing Equipment

Bitumen Spreader (4000 1) 1 - 1 Chip Spreader (4 m 3 ) 1 1 2 Roller (6 t) 1 1 2 Crusher 6/ 1 1 2

Complementary Equipment 2/

Bitumen Spreader (4000 1) - 1 1 Chip Spreader (4 m 3 ) 1 1 2 Cars 1 1 2

Grande Comore Anjouan Moheli Total

3 Patching Units 3/

Bitumen Kettle & Accessories 1 1 1 3 Dump trucks (2.5 m 3 ) 2 2 1 5 Vibration Rollers 1 1 1 3 Vibration plates 1 1 1 3 Compressor & Accessories 1 1 1 3

Complementary Equipment 2/

Crushers (Mobile) - - 1 1 Patching truck - - 1 1

2 Shoulder Reconstruction Units V Grande Existing Equipment Comore Anjouan Total

Dump trucks (4m3 ) 2 2 4 Rollers 1 1 2 Agricultural Tractor with blade 1 1 2 Loader 1 1 2

Complementary Equipment - - - 40 - Annex 1 Table 6 Page 3 of 3

Grande Comore Aniouan Moheli Total

5 Drainage Improvement Units 4/

Existing Equipment

Concrete mixers, 400 1 2 2 1 5 Dump trucks (2.5 m 3)

Complementary Equipment 2|

Dump trucks (2.5 m 3 ) 2 2 1 5

Staff 5/

Foremen 23 Equipment operators and drivers 40 Specialized laborers 60 Laborers 180

7 One heavy unit for Grande Comore and Anjouan each; Moheli will be equipped with a light unit. 2/ To be purchased under project. 3/ One unit on each island; the brigade in Moheli will be strengthened to enable road improvement and resurfacing works. 4| Two units on Grande Comore and Anjouan each, 1 unit in Moheli. 5/ Including work gangs for cleaning of ditches (8) and quarry operations (3). 6/ Will also provide gravel for patching unit. - 41 - Annex 1 Table 7 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Equipment to be Procured

Item Number Costs - For Patching/ For Improve- Resealing Unit Total ment Units Units Total Cost Cost (US$ 000) Bitumen Spreader 4000 L 1 1 97.0 97.0

Chip Spreader - 2 2 71.0 142.0

Mobile Crusher - 1 1 130.0 130.0

Dump Truck 8T 5 - 5 62.0 310.0

Patching truck - 1 1 60.0 60.0

Rubber tire roller 1 - 1 54.0 54.0

Vibrating roller 1 - 1 46.0 46.0

Cars 3 2 5 9.0 45.0

Water pumps 2 - 2 3.0 6.0

TOTAL 890.0

1/ In prices as of mid-1981, net of taxes.

Source: Ministry of Equipment and the Environmentand Mission estimates,December 1980. - 42 - Annex 1 Table 8 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE)PROJECT

STAFF APPRAISAL REPORT

Tires, Spare Parts, Fuel and Material to be Procured

Item Costs -' (US$ million)

1. Tires 0.46

2. Spares 1.36

3. Fuel (700,0001) and lubricants (20,000 1) 1.72

4. Bitumen (2,200 t) 1.62

5. Cement (2,200 t) 0.42

6. Steel (36 t) 0.06

7. Gravel (10,000m ) 0.49

8. Wood 0.03

Total 1 - 8 6.16

1/ In prices as of mid-1981; net of taxes. Source: Ministry of Equipment and the Environmentand Mission estimates,December 1980 - 43 -

Annex 1 Table 9

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Estimated Schedule of Disbursement

Cumulative IDA Fiscal Year Disbursement at and Quarter end of Quarter (in US$000)

1982

Second 200 Third 600 Fourth 1200

1983

First 1900 Second 2400 Third 2900 Fourth 3400

1984

First 4000 Second 4500 Third 5000 Fourth 5500

1985

First 5900 Second 6300

Closing Date: June 30, 1985

Source: Mission estimates. - 44 - Annex 1 Tahle 10 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS Page 1

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Economic Evaluation of Road Improvement Units A. Basic Data (TSS 000) Yearl/ Costs Renefits Cost of Equip- Regra- Avoided Equip- ment operation 3/ veiling Technical Total VOC R. Maint. Total Total Net 4 6 ment 2/ & Routine Maint. / Costs 5/ Assistance / Costs Savings 7/ Costs R/ Benefits Benefits

1 2,400 843 - 153 3,396 263 32 2Q5 -3,1lnl 2 - 843 - 153 996 499 57 556 -440 3 - 843 - 153 996 763 82 845 -151 4 - 843 - 76 919 1,059 106 1,165 246 5 - B43 480 76 1,399 1,390 131 1,521 172 6 - 843 372 76 1,291 1,594 156 1,750 459 7 - 362 372 - 734 1,989 119 2,170 1,436 8 - 362 372 - 734 1,989 181 2,170 1,436 9 - 362 372 - 734 2,228 181 2,409 1,675 10 - 362 372 - 734 2,495 11 2,676 1,942 ll - 298 372 - 670 2,299 149 2,448 1,77R 12 - 248 - - 248 2,146 124 2,270 2,022 13 - 198 - - l98 1,922 99 2,021 1,823 14 - 149 - - 149 1,615 74 1,689 1,540 15 - 99 - - 99 1,225 50 1,275 1,176 16 - 50 - - 50 6R6 25 711 661

B. Results Present Value (10% Discount Rate) $000 %T of total 1. Costs - Equipment 2,400 25 - Cost of equipment operation and routine maintenance 5,096 54 - Regravelling 1,434 15 - Technical Assistance 575 6 Total 9,505 ion 2. Benefits - VOCS 11,528 92 - Avoided routine maintenance costs 947 R Total 12,475 100

3. Net Benefits (2-1) 2,970

Benefit Cost Ratio (2:1) 1.3:1

Internal Rate of Return (IRR) 18Z

Sensitivity Analysis IRR

(i) Cost of equipment operation & routine maintenance +30% 13%

(ii) Vehicle operating cost savings -15% 13X

(iii) Traffic generation -50% 13% 1/ Year 1 = 1981/82; year 16 = 1996/97. / Includes (replacement) cost of equipment (i.e. the new price of the equipment if it were to be replaced minus depreciation) at present in the Comoros and which has recently arrived plus cost of equipment to be financed under Highways II; economic life of all equipment is assumed to be 6 years underestimating somewhat the life of the new equipment. 3/ For year 1 through 6: refers to operating cost of all equipment used for this project component and covers improvement and routine maintenance. 4/ For year 7 through 16: refers to routine maintenance only; cost per km (including equipment depreciation charge) US$800 per year; life of gravel roads is 10 years; length of road to be maintained starts with PO km (recently improved) in year 1 and increases by 62 km annually to 452 km in year 7. 5/ Includes equipment depreciation charge; cost per km US$6000 after 5 years. 6/ Technical assistance costs directly attributable to this project component during year I to 3; during year 4 to 6 these costs are assumed to decrease to 50% of the previous level. 7/ US$0.40/vehicle km (calculated as the simple average of VOC savings of the four types of vehicles; see Annex 1, Table 11) for 30 vehicles/day (15 normal and 15 generated) in the first year the road is upgraded; growth rate 12% per year. 8/ Refers to the costs of routine maintenance of earth roads after the rainy season to make them again passable; cost per km: US$400 per year.

Note: All costs and benefits excluding taxes and in mid-1981 prices.

Source: Ministry of Equipment and the Environment, Consultants BCEOM, and Mission estimates.

oq ar P (D 0X m >4 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Vehicle Operating Costs and Savings (US cents/vehicle km)

Costs Savings Bitumen Gravel Earth Earth to Gravel to Vehicle Types Road Road Track Gravel Bitumen

Light Vehicles:

- Renault 4L (4 seats) 19 23 37 14 4 - Peugeot 404 Berline (5 seats) 28 35 57 22 7

Heavy Vehicles:

- Peugeot 404 U10 (17 seats) 43 58 107 49 15 - Renault SG4 (3.5 ton) 60 88 161 73 28

Note; All costs and savings excluding taxes and in mid-1981 prices

Source: Consultants BCEOM and Mission estimates a,|P - 47 - Annex 1 FEDERAL ISLAMIC REPUBLIC OF THE COMOROS Table 12

SECOND HIGHWAY(MAINTENANCE) PROJECT Page 1

STAFF APPRAISAL REPORT

Economic Evaluation of

Patching and Resealing Units

A. Basic Data (US$000)

Costs Benefits Equipment Technical Avoided 1/ Equip- Operating Assista ce Total Maint. VOC Total Yearl- ment V Costs 2' Costs 41 Costs Costs 5/ SavingsR Benefits Net Benefit 1 2,900 1,910 230 5,040 250 329 579 -4,461 2 - 1,910 230 2,140 250 709 959 -1,181 3 - 1,910 230 2,140 250 1,149 1,399 *-741

4 - 1,910 115 2,025 250 1,655 1,905 -120 5 - 1,910 115 2,025 250 2,235 2,485 460 6 - 1,910 115 2,025 250 2,896 3,146 1,121 7 - - - - 7- 3,649 3,649 3,649 8 - - - - 3,378 3,378 3,378 9 - - - - _ 3,040 3,040 3,040 10 - - - - - 2,626 2,626 2,626 11 - - - - - 2,127 2,127 2,127 12 - - - - - 1,531 1,531 1,531 13 - - - - 827 827 827

B. Results

Present Value (10% Discount Rate) % of $000 Total

1. Costs - Equipment 2,900 22 - Equipment Operating Costs 9,150 71 - Technical Assistance 865 7 Total 12,915 100

2. Benefits - Avoided Maintenance Costs 1,197 - VOCS 14,436 Total 15,633

3. Net Benefits (2-1) 2,718 Benefit/Cost Ratio (2,1) 1.2:1 Internal Rate of Return (IRR) 16%

Sensitivity Analysis IRR (i) Equipment operating cost +30% 107 (ii) Vehicle operating cost savings -15Z 11% (iii) Annual traffic growth 4% rather than 8% 10% - 48 -

Annex 1 Table 12 Page 2

1/ Year 1 = 1981/82; year 13 = 1993/94

2/ Include (replacement)cost of the equipmentat present in the Comoros and which has recently arrived plus cost of equipment to be financed under Highway II; economic life of all equipment is assumed to be six-yearsunderestimating somewhat the life of the new equipment.

3/ Refers to operatingcost of all maintenance equipmentused for this project component and covers patching, resealingand routine maintenance.

4/ Technical assistancecosts directly attributableto this project componentduring year 1 to 3; during year 4 to 6 these costs are assumed to decrease to 50% of the previous level.

51 Maintenancecosts which in the absence of the project would be incurred,i.e. annual wages of 450 workers (1 per km) plus 15% miscellaneouscosts.

6/ Based on 100 vpd in year 1 on a network of 450 km; traffic growth 8% per year; unit vehicle operation cost savings of US 2 cents in year 1 increasingto US 14 cents in year 1 and decreasing to zero in year 14.

7/ No benefits due to avoidance of maintenance costs have been included beyond year 6 since it is assumed that regular maintenance (see footnote 5/ ) will then be resumed.

Note: All costs and benefits excluding taxes and in mid-1981 prices. Patching and resealing operationsinclude reconstructionof shoulders.

Source: Ministry of Equipment and the Environment,Consultants BCEOM, and Mission estimates. - 49 - ANNEX 2 Page 1 of 4

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Outline Terms of Reference for Technical Assistance for Three-Year Road Improvement and Maintenance Program

I. Objectives

1.01 The purposes of the consulting services are (i) to provide technical assistance to the Ministry of Equipment and the Environment in (a) planning and implementing the three-year road improvement and maintenance program including procuring and handling of equipment and materials. For the imple- mentation of the work program, the consultants will be required to (i) assist the local managers of the three regional workshops in organizing and carrying out the maintenance and repair of equipment and vehicles; (ii) assist the local foremen of road maintenance and improvement units in organizing and carrying out road maintenance and improvement operations; and (iii) train existing staff, including tech]icians, workshop manaGers, mechanics, equipment operators and drivers, and new staff required for the three-year program.

II. Scope of Consulting Services

Technical assistance will be provided by a consultant's team of experts who will act as advisers and trainers to their Comorian counterparts.

The consultant's team will comprise the following personnel:

- a highway engineer, (team leader) 36 months - three assistant workshop managers (36 months each) 108 months - a mechanical engineer 6 months - two road foremen (18 months each) 36 months

TOTAL 186 months

The highway engineer will represent the consultant in dealings with the Government.

The experts will be expected to devote about half their time to formal and on-the-job training of local staff and will, therefore, need to have adequate skills and sufficient experience in training. They must also be fluent in French. Each expert will live on the island to which he is assigned. Travel on the assigned island and inter-island travel will be requested by all experts. - 50 - ANNEX 2 Page 2 of 4

Qualifications and Tasks of Consultant's Team

Qualifications and tasks of the individual experts are as follows:

Highway Engineer: Civil works engineer with at least 12 years experience in planning, organizing and executing maintenance and improvement operations on paved and gravel roads, including at least 5 years' experience of senior management level in a highway organization and at least 3 years' experience in developing countries. He will be assigned to the Ministry of Equipment and Environment and will assist and train the Director of Public Works in executing the road improvement and maintenance program. His activities, in particular, will include:

- establishing or improving administrative and technical procedures related to road improvement and maintenance;

- establishing and implementing work programs for road improvement and maintenance;

- helping to prepare the annual budget requirements of Public Works Department;

- recording and controlling expenditures for road improvement and maintenance, including establishment of a cost accounting system; and

- training of local staff.

Workshop Managers

Mechanics with at least 12 years' experience in maintaining and repairing of road construction equipment and vehicles, including at least 6 years' experience in workshop management and training. Each of them will be assigned to a regional workshop on one of the three islands and assist and train the local workshop manager in:

- organizing the maintenance and repair of equipment and vehicles;

- organizing supply, storage and handling of spare parts and materials; and

- training of workshop managers, mechanics, equipment operators and drivers. - 51 - ANNEX 2 Page 3 of 4

Mechanical Engineer

Mechanical engineer with at least 12 years' experience with equip- ment used for road construction and maintenance, including at least 5 years' experience at senior management level and at least 3 years' experience in developing countries. He will be assigned to the Ministry of Equipment and Environment and will assist and train the Director of the Equipment Branch in:

- supervising and coordinating the activities of the three regional workshops;

- preparing bid documents and contracts for the supply of equipment, spare parts and materials;

- controlling of work programs and recording of expenditures incurred by the Mechanical Branch; and

- setting up a training program for workshop managers, mechanics, equipment operators and drivers.

Road Foremen

Foremen with at least six years' experience in managing mechanized units for improvement and maintenance of gravel and paved roads, and thoroughly familiar with the operation and application of road construction and mainte- nance equipment to be used. They will assist and train the local foremen of the two road improvement units and the local foremen of the five maintenance units on paved roads in:

- organizing, managing and supervising the units and their resources in accordance with the units' work programs;

- carrying out the work programs; and

- training of foremen, operators, drivers and other personnel.

III. Timing

1st Year 2nd Year 3rd Year 1 Highway engineer

3 Workshop managers

1 Mechanical engineer

2 Foremen - 52 - ANNEX 2 Page 4 of 4

IV. Reports

The consultants shall submit the following reports (all in French) on a quarterly basis:

Initial Report (10 copies): this report should indicate an outline of the activities envisaged to accomplish the team's objectives.

Progress Report (10 copies): these reports should indicate the accomplish- ments and shortcomings during the reporting period and indicate the outline of activities planned for the following months.

Draft Project Completion Report (10 copies): two months before the end of the consultants' services, this report should contain detailed information on:

(i) the accomplished work;

(ii) the benefits to Government provided by consultants' services;

(iii) activities and objectives where the results were not satisfactory with discussion of the reasons; and

(iv) recommendations on how road maintenance could further be improved including suggestions for training of personnel.

Government will provide its comments on this report within 60 days after receipt of it to the consultants.

Project Completion Report (20 copies): within 60 days after receipt of Government's comments on the draft project completion report; this report should take into account Government's comments. - 53 -

ANNEX 3 Page 1

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE)PROJECT

STAFF APPRAISAL REPORT

Progress Reporting System

1. Progress Reports should be submittedquarterly in triplicate,no later than one calendar month after the end of each quarter. The first report should cover the period ending December 31, 1981.

2. The Report should contain the followinginformation:

I. General Information

(a) the physical progress accomplishedto date of report and during the reportingperiod;

(b) actual or expected deviations from the project implemen- tation schedule;

(c) actual or expected difficultiesor delays and their effect -n the implementationschedule and the actual steps taken oi planned to overcome the difficultiesand avoid delays;

(d) expected changes in the completiondates of the project;

(e) key personnel changes in the staffs of the MEE, consultants and contractors;

(f) matters which may affect the project cost; and

(g) any developmentactivity likely to affect the economic viability of the project components.

II. A bar-type progress chart, based on the project implementation schedule, showing the progress in each project componentand includinga planned and actual expendituregraph.

III. A financial statementset out in tabular form which shows for each of the project components:

(a) original estimatedcost;

(b) revised cost, if appropriate; - 54 -

ANNEX 3 Page 2

(c) actual expenditure;

(d) projected expenditure;and

(e) actual withdrawalsand projectedwithdrawals from the Credit Account.

IV. Brief confirmationof the status of action on each of the covenantsof the Credit Agreement. 55 - Annex 4 Page 1 of 4

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APRAISAL REPORT

Economic Evaluation of Individual Roads to be Improved during the First Year of the Project

1. This Annex provides the economic evaluation of the four earth roads to be upgraded to all-weather gravel standard and included in the first year of the road improvement program (Annex 1, Table 4). These roads are:

Grande Comore:

RR 128, Ivembeni-N'Tsoundjini, (33 km)

Anjouan:

RR 203, Bambao-Jimilime, (19 km) and RN 23, Moya-M'Remani, (17 km)

Moheli:

RN 32, Miringoni-Nioumachoua, (20 km)

2. On the cost side, the economic evaluation takes into account the cost of upgrading the earth roads to gravel standard, the cost of subsequent routine maintenance and the cost of regravelling after five years. On the benefit side, it considers for the first three roads -- because of the paucity of data -- only the vehicle operating cost savings of normal traffic growing at 12% per year and avoided routine maintenance costs (i.e the cost of reopening the earth roads annually after the rainy season); for the Miringoni-Nioumachoua road - on which there is virtually no traffic at present because of its very poor condi- tion - it considers only the net value of the incremental agricultural production which is expected to result from the upgrading of the road to all- weather standard. Other possible benefits, such as increased access to health and educational facilities, have not been taken into account. The life of the upgraded roads is assumed to be 10 years.

3. The cost data are based on detailed estimates of the work and inputs involved and thus should be fairly accurate. The estimates of the benefits, on the other hand, are less accurate because they are based on interviews with knowledgeable staff of the Ministry of Equipment and the Environment and the Ministry of Agriculture, supplemented with the appraisal mission's own impressions. Because of the uncertainty involved, the estimate of the benefits are somewhat conservative . Moreover, the sensitivity analysis, to reflect the uncertainty of the benefit estimates, considers the impact on the rate of return of a 15% reduction in vehicles operating cost savings for the first three roads and of a 30% reduction in the net value of the incremental agricultural production in the case of the Miringoni-Nioumachoua road. -56- Annex 4 Page 2 of 4

4. The followingtable summarizesthe results of the economic evaluation:

Roads IRR (%) SensivitityAnalysis: IRR (%)

Benefits -15%

1. Ivembeni-N'Tsoundjini 25 19

2. Bambao-Jimilime 41 32

3. Moya-M'Remani 34 27

Benefits -30%

4. Miringoni-Nioumachoua 37 19

The internal rates of return of the four roads range from 25% to 41%; the sensitivityanalysis indicates that, even with the reduction in benefits specifiedin the previous paragraph, each of the roads remains economically justified.

5. Ivembeni-N'Tsoundjini.This road is located in the southern part of Grande Comore and links the east and west coasts of the island. The daily traffic is estimatedat 30 vehicles of which 15 are light vehicles and 15 heavier vehicles (Annex 1, Table 11).

6. Upgrading the present track to all-weathergravel standard would no doubt increase agriculturalproduction - mainly maize - in the area. Because of the scarcity of data, however, no estimate has been made of the possible increase in agriculturalproduction which will be attributableto the road improvement.

7. The internal rate of return of this road is 25%. A reduction of 15% in the benefits would reduce the IRR to 19%. For details see Annex 4, Table 1.

8. Bambao-Jimilime. This road is located along the northeasterncoast of Anjouan and is Jimilime's only connectionwith the rest of the island. Daily traffic on this road is estimatedat some 45 vehicles of which 25 light vehicles and 20 heavier vehicles (Annex 1, Table 11).

9. Upgradingthis track to all-weatherstandards would stimulate agriculturalproduction. Present productionin the area mainly consists of cloves (200 ton/year)and food products. Because of the lack of more detailed information,however, no attempt has been made to quantify the impact of the road improvementin terms of the net value of the incrementalagricultural production.

10. The internal rate of return of this road is 41%. A 15% reduction in the estimatedbenefits would lower the IRR to 32% which is still satisfactory. For details see Annex 4, Table 2. Annex 4 Page 3 of 4

11. Moya-M'Remani. This road is located in the southeastern part of Moheli and forms part of the coastal road. Daily traffic is estimated at 40 vehicles a day equally divided between light and heavier vehicles (Annex 1, Table 11).

12. Agricultural production in the area mainly consists of cloves, copra and vanilla; upgrading of the road is expected to stimulate the productionof all three commodities. However, again because of the limited data, no estimate has been attempted of the net value of the incremental agricultural production resulting from the road improvement.

13. The internal rate of return of this road is 34%. A decrease in esti- mated benefits of 15% would reduce the IRR to 27% which is still acceptable. Annex 4, Table 3 provides details of the computation.

14. Miringoni-Nioumachoua. This road is located along the southern coast of Moheli and forms part of the island's coastal road. Its present condition is so bad that there is virtually no traffic using it.

15 The zone of influence of this road comprises one of the most fertile agricultural areas on Moheli. However, due to a lack of data, only coconut production can be quantified with any degree of accuracy. Aerial surveys taken in 1970 for a study of the coconut sector indicate that there are approximately 212,000 palms in the Nioumachoua sector of Moheli which extends from Sambia to just beyond Miringoni. About 70% of these, or 148,000 palms, would be between Miringoni and Nioumachoua.

16. A coconut tree produces an average 48 nuts a year. Surveys indicate that about 35% of these, or 17 nuts per tree, are lost due to rodent damage 1 /.Per capita consumption of nuts on Moheli is estimated at 181. Of the 4,580,000 nuts produced in this area (148,000 x 31), about 540,000 (181 x 3,000 (population)) are consumed by the local population. The remainder, 4,040,000, is transformed into copra.

17. Approximately 5.5 nuts are equivalent to 1 kg of copra so that 4,040,000 nuts equals 735,000 kg or 735 tons of copra. About 25% of this amount, on 184 tons, is presently lost through spoilage due to the inaccessi- bility of the area. If the area were more accessible, wastage would be reduced dramatically. In addition, the area's inaccessibility makes it logistically impossible for the Government to extend the rodent control component of the IDA-financed Coconut Rehabilitation and Rodent Control Project to this zone.

18. The principal quantifiable benefts of an all-weather road would be: (a) the Government would be able to extend its rodent control program to the area under question, thereby saving about 2,516,000 nuts (17 x 148,000 palms) or 457 tons of copra per year and (b) wastage would be reduced thereby saving an additional 184 tons of copra per year.

1/ Or 17 x 148,000 palms = 2,516,000 nuts for the area in question. - 58 - Annex 4 Page 4 of 4

19. An all-weatherroad could be responsiblefor increasingproduction by approximately641 tons of copra/yearwith a current value of around US$270,000 f.o.b. Comoros. Allowing for collection,transport and other costs the incrementalcopra production to be ascribed to the road has conservativelybeen valued at 60% of the f.o.b. value or US$160,000 per year. This is assumed to remain constantover the 10-year period of the life of the road.

20. The internal rate of return of this road is 37%. A 30% reduction in benefitswould lower the IRR to 19% which is still an acceptable rate of return. Annex 4, Table 4 provides details on the calculations. Annex 4 59 - Table 1

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Economic Evaluation of Road Improvement

Ivembeni-N'Tsoundjini, 33 km

(US$000) Year 1/ Costs Benefits Equip- Equipt. Routine Regra- Tech. Total VOC Avoided Total Total ment 2/ Operating Maint. 4/ velling 5/ Assist.6 / Costs Savings7 / R. Maint. Bene- Net Costs 3/ Costs 8/ fits Benefits

1 214 449 - - 82 745 72 13 85 -660

2 - - 26 - - 26 162 13 175 149

3 - - 26 - - 26 180 13 193 167

4 - - 26 - - 26 203 13 216 190

5 - - 26 198 - 224 227 13 240 16

6 - - 26 - - 26 256 13 269 243

7 - - 26 - - 26 284 13 297 271

8 - - 26 - - 26 318 13 331 305

9 - - 26 - - 26 356 13 369 343

10 - - 26 - - 26 399 13 412 386

Internal Rate of Return: 25%

Sensitivity Analysis

IRR if benefits -15%: 19%

1/ Year 1 = 1981/82; year 10 = 1990/91 2/ See Annex 1, Table 10, footnote 2/ ; US$6500/km. 3/ See Annex 1, Table 10, footnote S/; US$13,600/km. 4/ US$800/km. 5/ See Annex 1, Table 10, footnote 5/. 6/ See Annex 1, Table 10, footnote W/; US$2470/km. 7/ US$0.40/vehicle km (see Annex 1, Table 11) for 30 vehicles/day (normal traffic) in the first year the road is upgraded; growth rate 12% per year. 8/ See Annex 1, Table 10, footnote /

Source: Ministry of Equipment and the Environment, Consultants BCEOM, Mission estimates. - 60 - Annex 4 Table 2

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Economic Evaluation of Road Improvement

Bambao-Jimilime, 19 km

(US$ 000) Year 1/ Costs Benefits Equip- Equipt. Routine Regra- Tech. Total VOC Avoided Total Total aent 2/ Operating Maint. 4 / velling 5/ Assist. 6 / Costs Savings 7 / R. Maint. Bene- Net Costs 3/ Costs 8/ fits Benefits

1 123 258 - - 47 428 60 8 68 -360

2 - - 15 - - 15 133 8 141 126

3 - - 15 - - 15 14q 8 157 142

4 - - 15 - - 15 167 8 175 160

5 - - 15 114 - 129 187 8 195 66

6 - - 15 - - 15 209 8 217 202

7 - - 15 - - 15 234 8 242 227

8 - - 15 - - 15 262 8 270 255

9 - - 15 - - 15 293 8 301 286

10 - - 15 - - 15 320 8 336 321

Internal Rate of Return: 41%

Sensitivity Analysis

IRR if benefits -15%: 322

1/ Year 1 = 1981/82; year 10 1990/91 2/ See Annex 1, Table 10, footnote 2/; US$6500/km. 3/ See Annex 1, Table 10, footnote 3/; US$13,600/km. 4! US$800/km. 51 See Annex 1, Table 10, footnote 5/. 6/ See Annex 1, Table 10, footnote B/; US$2470/km. 7/ US$0.38/vehicle km (see Annex 1, Table 11) for 45 vehicles/day (normal traffic) in the first year the road is upgraded; growth rate 12% per year. 8/ See Annex 1, Table 10, footnote /.

Source: Ministry of Equipment and the Environment, Consultants BCEOM, Mission estimates. - 61 - Annex 4 Table 3

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MIAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Economic Evaluation of Road Improvemnent

Moya-M'Remani, 17 km

(US$000) Year l/ Costs Benefits Equip- Equipt. Routine Regra- Tech. Total VOC Avoided Total Total ment 2/ Operating Maint.4 / velling 5/ Assist.6 / Costs Savings7 / R. Maint. Bene- Net Costs 3/ Costs 8/ fits Benefits

1 110 82 - - 15 207 18 2 20 -187

2 - 149 5 - 27 181 76 7 83 -98

3 - - 14 - - 14 120 7 127 113

4 - - 14 - - 14 134 7 141 127

5 - - 14 102 - 116 150 7 157 41

6 - - 14 - - 14 168 7 175 161

7 - - 14 - - 14 188 7 195 181

8 - - 14 - - 14 211 7 218 204

9 - - 14 - - 14 236 7 243 229

10 - - 14 - - 14 264 7 271 257

Internal Rate of Return: 34%

Sensitivity Analysis

IRR if benefits -15%. 27%

1/ Year 1 = 1981/82; year 10 = 1990/91 2/ See Annex 1, Table 10, footnote 2/ ; US$6500/km. 3/ See Annex 1, Table 10, footnote 3/; US$13,600/km. 4/ US$800/km. 5/ See Annex 1, Table 10, footnote 5/. 6/ See Annex 1, Table 10, footnote W/;US$2470/km. 7/ US$0.40/vehicle km (see Annex 1, Table 11) for 40 vehicles/day (normal traffic) in the first year the road is upgraded; growth rate 12% per year. 8/ See Annex 1, Table 10, footnote K/.

Source: Ministry of Equipment and the Environment, Consultants BCEOM, Mission estimates. - 62 - Annex 4 Table 4

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Economic Evaluation of Road Improvement

Nioumachoua-Miringoni, 20 km

(US$000) Year 1/ Costs Benefits Equip- Equipt. Routine Regra- Tech. Total Total Total ment 2/ Operating Maint.4 / velling 5/ Assist.6 / Costs Bene- Net 7 ______Costs 3/ ______fits ! Benefits

1 131 82 - - 15 228 45 -183

2 - 95 5 - 17 117 100 -17

3 - 95 10 - 17 122 160 38

4 - - 16 - - 16 160 144

5 - - 16 - - 16 160 144

6 - - 16 72 - 88 160 72

7 - - 16 - - 16 160 144

8 - - 16 - - 16 160 144

9 - - 16 - - 16 160 144

10 - - 16 - - 16 160 144

11 - - 16 - - 16 160 144

Internal Rate of Return: 37 %

Sensitivity Analysis

IRR if benefits -30%: 19 %

1/ Year 1 = 1981/82; year 11 = 1991/92 2/ See Annex 1, Table 10, footnote 2/ ; US$6500/km. 3/ See Annex 1, Table 10, footnote 3/; US$13,600/km. 4/ US$800/km. 5/ See Annex 1, Table 10, footnote 5/. 6/ See Annex 1, Table 10, footnote 6/; US$2470/km. 7/ US$160,000/year; see Annex 4, para 19.

Source: Ministry of Equipment and the Environment, Ministry of Agriculture,Consultants BCEOM, Mission estimates. - 63 - ANNEX 5

FEDERAL ISLAMIC REPUBLIC OF THE COMOROS

SECOND HIGHWAY (MAINTENANCE) PROJECT

STAFF APPRAISAL REPORT

Information Available in Project File

1. World Bank Group,"The Comoros, Problems and Prospects of a Small Island Economy" July 1974.

2. World Bank Group, "Comoros - Transport Sector Memorandum" - 1977.

3. BCEOM, "Study of Road Maintenance and Development in Comoros July 1978.

4. BCEOM, Route Nationale 32 (Moheli), Section Miringoni-Nioumachoua, Etude de Factibilite, Aout 1979.

5. Ministry of Equipment and the Environment, Road Network Map, 1980.

6. Ministry of Equipment and the Environment, "Comptages Routiers, Periode du 3 au 9 Mai 1980", (including maps with counting stations), 1980.

7. Calculation of Economic Benefit/Cost Tables (computer printQuts), February 1981. 'I 4V15~ ~~ ~ ~ ~ ~ 1 23'`22 -S ;j ~%-,

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