World Bank Document

Document of The World Bank FL FOROFFCIAL USE ONLYFI E C P Public Disclosure Authorized ReportNo. 125 3b-HO STAFF PROJECT REPORT Public Disclosure Authorized SEVENTH HIGHWAYPROJECT HONDURAS November 10, 1976 Public Disclosure Authorized Public Disclosure Authorized Latin America and the Caribbean Projects Department This documenthas a restricteddistribution and may he used byrrecipients only In the performanceof their officia duties. Its contents may not otherwisebe disclosed without World Bank authorization. Currency Fquivalents Currency Unit = Lempira (L) IJS$1.00 = L 2.00 L = US$0.50 L l,000,000 = US$500,000 Fiscal Year January 1 - December 31 System of'Weights and Measures: Metric Metric British/US Equivalent 1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 mile 1 square kilometer (km2) = 0.336 square mile 1 hectare (ha) = 2.47 acres 1 metric ton (m ton) = 2.205 pounds Acronyms and Abbreviations ADT - Average Daily Traffic BR - Brown and Root (Consultant) CAB-I - Central American Bank for Economic Integration COHDFFOR - Gorporacion Hondurena de Desarrollo Forestal CONSUPLAN - Consetjo Superior de Planificacion Economica DGH - Directorate General for Highways DGIT-N - Directorate General for Highway Maintenance DGT - DirectorateGeneral for Transport ENP - Impresa Nacional Portuaria FAO - Food and AgriculturalOrganization FNIT - FerrocarrilNacional de Honduras HTH' - Howard IIunphreys,Keeble and Partners (Consultant) IDB - Tnter-American Development Bank MCOPT - Ministerio de Comunicaciones, Obras Pblicas y Transporte SIECA - Secretaria Permanentltdel Tratado de Integracion Fcon6mica Centro Americana USAID - US Agency for internationalDevelopment vpd - Vehicles per day FOR OFFICIAL USE ONLY STAFF PROJECT REPORT SEVENTH HIGHWAY PROJECT HONDURAS TABLE OF CONTENTS Page No. INTRODUCTION AND SUMMARY ...... .............. i -xiv I. THE TRANSPORT SECTOR ...... ......................... 1 A. The Distribution of Economic Activity ......... B. The Transport System .......................... 2 C. Transport Planning and Coordination .... ....... 5 Table 1.1 - Areas of Major Valleys .... ............. 8 Table 1.2 - Urban Population Centers - 1974 ........ 9 Table 1.3 - Honduras Natonal Railway - Traffic and Finance 1970-1975 .... ............ 10 Table 1.4 - Dry Cargo Traffic at Principal Ports - 1970-1975 ............................ 11 Table 1.5 - Passenger and Cargo Traffic and Major Airports 1965-1973 .... ......... 12 Table 1.6 - Public Investments in Transport 1973-1975.13 II. THE ROAD TRANSPORT INDUSTRY ........................ 14 A. The Road System .............................. 14 B. The Transport Industry ........................ 15 C. Regulations and Policies ..... ................. 22 D. Future Trends ................................. 24 III. THE HIGHWAY SUBSECTOR .............................. 27 A. The Highway Network ........................... 27 B. Bank Assistance in the Highway Subsector ...... 27 C. Traffic Growth and the Road Transport Industry .................................... 28 D. Highway Administration ........................ 30 E. Highway Planning and Financing .... ............ 31 F. Highway Engineering ........................... 32 G. Highway Construction .......................... 32 H. Highway Maintenance ........................... 33 This report has been prepared by Messrs. Robert Burns (Economist), Carlos F. de Castro (Transport Specialist), Raul Paraud (Engineer), and Luis Enrique Pinilla (Engineer) and has been edited by Miss Virginia R. Foster. This document has a restricteddistribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without Would Bankauthorization. Table of Contents (Continued) Page No. Table 3.1 - Development of the Highway Network 1964-1974 ....................... 36 Table 3.2 - Vehicle Registration 1964-1974 ....... 37 Table 3.3 - Highway Expenditures 1970-1975 ....... 38 Table 3.4 - Road User Charges and Highway Expenditures 1970-]974 ........................... 39 IV. THE PROJECT ...................... ,.,.... 40 A. General Description ........................... 40 B. Cost Estimates ................................ 45 C. Financing ..................................... 47 D. Implementation ................................ 48 E. Disbursements ................................. 50 Table 4.1 - Design Standards for Project Highways .. 51 Table 4.2 - Tentative List of Maintenance Equipment Included in the Project .... .......... 52 Table 4.3 - Summary of Construction Costs .... ...... 53 Table 4.4 - Estimated Schedule of Disbursements .... 54 Annex to Chapter IV -- Project Implementation Schedule 55 V. ECONOMIC ANALYSIS ................................... 56 A. Civil Works ................................... 56 B. Road Maintenance Equipment .................... 61 Table 5.1 - Actual and Proposed Cropping Patterns for Irrigated Areas of the Guayape Valley 62 Table 5.2 - Current Levels and Mix of Road Traffic 1976 ................................. 63 fable 5.3 - Traffic Projections ..... ............... 64 Table 5.4 - Cost and Benefit Streams Talanga- Juticalpa ............................ 65 Table 5.5 - Cost and "Benefit Streams Juticalpa- Catacamas ............................ 66 Table 5.6 - Road and Vehicle Operating Characteristics ...................... 67 Table 5.7 - Vehicle Operating Cost ................. 68 Table 5.8 - Farm Size Distribution in the Municipios of Talarnga and Juticalpa in 1965-1966 69 Table 5.9 - Current and Future Backlog of Road Maintenance with Current Expenditure 70 Table 5.10 - Reconstruction Costs of Roads not MIaintained 71 VI. AGREEMENTS REACHED AND RECOMMENDATION .... .......... 72 Table of Contents (Continued) ANNEX Related Documents and Data Available in the Project File CHARTS IBRD-15878 - Organization Chart of the Ministry of Communications, Public Works and Transport IBRD-15879 - Organization Chart of the Directorate General for Highways IBRD-15880 - Organization Chart of the Directorate General for Maintenance of Highways and Airports MAP IBRD-10395-RI - Honduras - Main Highway Network This report is based on information provided by the Government, by the UK consultant Howard Humphreys, Keeble and Partners; by the US consultant Brown and Root and local individual consultants; and on the findings of an appraisal mission to Honduras in February 1976 consisting of Messrs. Robert Burns (Economist), Carlos F. de Castro (Transport Specialist), Raul Paraud (Engineer) and Luis Enrique Pinilla (Engineer). Additional reports and data related to the project available in the Bank are listed in the Annex. STAFF PROJECT REPORT SEVENTH HIGHWAY PROJECT HONDURAS INTRODUCTION AND SUMMARY A. The Transport Sector Background 1. The Honduran transport system is dominated by roads and road transport. Because distances are short and the terrain rugged, railways are non- competitive, except in the northern coastal strip where specialized banana railways operate. Road transport carries 86% of the freight tonnage and 96% of the passenger traffic in the country. The primary road network connects the two principal cities, San Pedro Sula in the north, and the capital, Tegucigalpa, in the south, and is designed to service, what were historically and still are, the most important agricultural areas, the Sula and Choluteca Valleys and the Atlantic coastal strip. 2. Aside from infrastructure to serve the banana industry, major development of the transport sector began only in the mid-fifties with construction of the Inter-American highway in the southern part of the country; a modern all-weather road between Tegucigalpa and San Pedro Sula was not completed until 1970. Modernization of the principal port, Puerto Cortes on the Atlantic, did not begin until the creation of a National Port Authority in 1965; and, with Bank assistance, a deepwater Pacific Coast facility is only now being con- structed at San Lorenzo. Investment in transport infrastructure increased significantly in the 1970's, and highway projects are now planned, or under construction, to complete most of the country's primary highway network; when completed in the early 1980's, these projects will provide modern all-weather access to the increasingly important agricultural and timber areas of eastern Honduras, including the rich Aguan Valley in the north, the Guayape Valley and the Olancho forest reserve in central Honduras, and the Danli area in the south. The improvement and expansion of the feeder and access road system, to which the Government will be giving increasing emphasis over the next five years, will mean that the country will, for the first time, have an internal transport network adequate to serve its most important productive areas. Highways 3. Because of the topography of Honduras, road construction, in general, has been difficult and expensive; nevertheless, the road network grew from about 3,200 km (110 km paved) in 1960 to about 6,100 km (1,240 km paved) in 1975. In addition to the principal roads mentioned in the preceding paragraph, - ii - the primary system includes a road southwest from San Pedro Sula to the El Salvador border and a road along the north coast to La Ceiba. The country's secondary and tertiary road system is not yet well developed. 4. The road transport industry, operating in an environment of virtually no regulation, expanded rapidly in the decade from 1964 to 1974. During that period, the vehicle fleet grew from 16,000 to 43,900, an increase of 174%. The most notable growth occurred in the

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