Somalia: the Hargeisa Berbera Road Project
AFRICAI{ DEVELOPMENTBANK ADB/ID/WgTB4I139 I October 1984 MEUORANDUM OriqinaL : ENGLISH
TO BOARDOF H(ECUTIVE DIRECTORS
D. BIHUÏE Acting President
'901ttâI,IA - :j. .: SUBJECT .: : POST-EVALUATIONREPORT 0N THE-'IiARGXI SA-BERBEM PROJECT
.ir:r-'." : l. This report discirsses the Hargeisa-Betbera Road projecr in the Sonali Denocratic Rêpublic. This project represented the Bankts first invol-venent in Somalia.
2. Early in 1965, the Gôvernm€nt of SornaLiarequested the UNDPto assi'st in the financing af a feasibiLity strrdy of two roade in rhe Northern Region of Sonialia of which the llargeisa-Berbera Road was one. rtre feasibility study of the road was prepared by Messre Grimble and Associateg'''àA'a IBRD/IDA as executing agent. The study was conpleted in . Marck i1966. In;1969" the ADBjointly with UNDP, the'fol.Low-up {inanced detai-l'e{ erigineeri!!g ;stud} under its technical assiStànce prograrme. Ttris'studi vas conduitea ty Messrs Ingenieuribuero Dorsch and completed in'1970. ; . , ' the.-'Èrojeet ilg Otjectiveà ?nd _ . ,' . ,' , ,:.,, 3. .' ,The project was appraised in Éeeenber 1970 with the participation 'ôr tr,e rDA and rùas approved by the ADB Board on 20 ocrober. Lg7L. A Loan Agreementfor rhe esuivalenÈ of US $ l.O million (UA 1.0 nillfon) was signed on'10 December1971. IDA provided US $ 9.6 niLtion o.rl of " totât project cost of us $ 10.6 miLLion. The project, compris.edthe conétruction, including paving ef a two-lane highway between Hârgeisa and Berbera (about 158 lfu); "orr".ritancy s"rvices to supenzise road eonstruction, a feasibitity etudy and detailed enginéering of the Hargeiea-Boraoa road (about 140 Kn) including â spur to Tug I,traJrale (about 20 Kn) as well. as the revierring and updating of the transporrél
.. ,12 .tr.
tion surrrey undertaken in Somalia in 1966. the nnain objectives of the project were to assist the Government of Somalia (COS) in (a) improving its transportation network and (b) plutttting transportation investnents.
Project Inplenentation and fnpact
4. The contract for road construction was awarded to the lowest bidder, contracting and rrading company (cAt or Lebanon) in February !972. The road construction was conpleted on May g, 1975, only six months behind schedule. This was due to a number of factors including disputes between the nain contractor and the haulage sub-contractors rggarding transport rates, lack of a high capacity crusher for a period of t,ime, withdrawal of work permits for B of the contractorfs expa- triate staff" lhe quality of construction and contractor maintenance of the road rrere "sati eJa,ctory. The supenrisory consultant I s staf f made significant contribution to the successful conpletion of the road contract. AlL centractor claims were settled.
5. The feasibility study and detailed,engineerinq of the Hargeisa- Borarna Road etc. Itere carried out by consultants, Renardet-Sauti (rtaty). The quality of work produced by the consultants was judged unsatisfactory. I{ith the Bankfs concurrence, the GOS retained Dorsch Consult (Federal Republ,ic of Ge::nany) to review the detaiLed engineering and bidding documents prepared by sauti. The report on transportation survey of somalia produced by sauti, as part. of the asgistance in transport planning was judged generally satisfactory.
6. ,., The principal, purpose for the construction of the road was to connect Hargeisa and Berbera, the nain tosrïrs in the northern region of somalia. The road has provided easy access to the port, of Berbera which handlee a pubstantial amunt of Solsaliats exports .(particularly livestock) and..imports. The zone of infLuence of the Hargeisa-Berbera road has been favourably affected by the initiation in recent years cf Rvo najor projects. one of these is the rDA - financed,Northwesr Regional. Agricultural Projects, epproved in April 1976,.which is assisting in the development of the 1601000 ha of potentially arabl.e La:rd in the region.
...13 7. The other is the Ncrthern Rangelands Prc'ject which is aiding in the managèmentof grazing areas so vital to the l-ivestock production of Sornalia. The Eargeisa-Berbera road has facilitated the irnpleurentation of these projects and will play a useful role over the long-tercr in transporting products stimulated by these conplementary investnents. the rol-e of the Hargeisa-Berbera roa 8. The objectives of the project have been fully achieved. The actual total cost of the project lras US $ 10.69 million, comparerl to appraisal estinates of US $ t0.60 miliion. The actual disbursemenrs under the loan were lower than the appri:isal entinates. ft€ Bank extended the closing Borrower and Bank Performance 9. The perforrnance of the borrowerts executing agency, the civil Engineering Department of the Ministry of Public Works, rras generally satisfactory. It took anpropriate action to resolve problerns âs they rose. The ef,ficient supervision and prompt handLing of contractor claims by the supe:rrisory consultants and forthright attitude of the contractor played a rnajor role in the successful. conpletion of the road contract- The area in which the borrower perforned less satisfË6: tgrily was the withdrawal of work pernits of the contractorrs expa- triate staff; (this was a contravention of one of the covenants of the Joint Financing Agreernent) and to a leseer extent, the diversion of personneL and equipnent on the nroject. On the whoLe the project was adequately supenrised by IDA staff, and ADB was consulted fully on all âspectâ of the project inplernentation as set out in the Joint Financing Agreernent. The ADB on its own aLso undertook regular super- vieion and follow-up nissions. All these helped in the eventual success of the project ,..14 Lessong l0: The Cecision to ag'ree on exact financing and costing after the resuLts of the bidding were known lrae a rational one; the lesson being that it led to a better designec pf,oject in tenie of coet coDtrol. ll. Muêh of the implementation success on this project could be attributed to the constant and regular supervisicn by the IDA/ADB uissions. (Part of the success was also due to the executing agency, and the supervising engineers). In terns of a lesson, it seerns that the Bank should in rll cases undertake regular superrrision missions. The nunber of apætili.q-.odÉàr-troLlm:.np rai-seions should nct be increased only after a problen has been Recomrendations 12. In the light of the discussions of this post-evaluarion riport, and the experience gained cluring the execution of this project, the following recornmeodations are nade g Borrower (i) ehould atterûpt in the future in similar orojects to endeavour to honour its pledge in ter:rs of the use of facilities, machinery, and equipment for the specific projects being financed by the Bank. (ii) should as a matter of urgency, initiate the collection of traffic, transportation and other data in a systeuatic Eeaner. This is particularly iuportant for the econcmic appnaisal of new transpofr investment. Bank (i.ii) shouLd seriously consider the possibility of inelucing guideLines in Aporaisàl Reports and Loan Agreenents for thé collection of data during and. after the implenentation of projects. Ttris wouLd ensure the awareness/obligaticns of Borrowerst in the systenatic coLLection of cata for nonitoring and evaluation of projects. .*'t I I I I I ;l !l Ji ,Æa$rf;*lfr ffi ffiæveftmpilflsils* ffiæm$q AJI$/PPr.R/Bt4 /rJ7 Sèptenber I 984 ilNGi,ISË,t Original : E|NÇLISH DISTRI$UTION ; LII'IITED PCSI'*EVAI,T*]ÀTIû}; FJ]P{-TATfJN T1{.8 }Tê.RçEIS;\- BERTERA F.OÀD ifjOUAT,TÂ} (Loanr'[o. cs/$/irti 71/0û1 i ï'his ïenort has T:eênrr::çrsared for tne Ev-clrrsive rr[ie of the Banh Grcrrp PT,ANNII,iG I!:'{'Ir RTgEAI{.CH Ë VALUAT iON DIVISNOT.d DfiPA}iTI'ÏË}IT { *il -1- T/$L8 OF CONTENTS TNTRODUCTION Economicand Social Setting ...... | ...... I The Transport Systemand Investment .....o...... 2 Bank Group operations in the Transport Sector ...... 4 II. PROJEqT IDËI{TIFICAÎION PREPAEATIONAI{D APPRATSAL 5 5 6 Financing and Coets aa ar aa oaaaa aaaaa aa aoaaaaaaaa 7 IIÏ. IMÊI.EI,IEIÏTATIONOF TTTEFROJECT t0 Procurement aaa aat a.aaaaaaaaaaaaa aao aa aa aaaaaaaaaaar t0 t2 t4 l5 t7 l7 v. ECOFOMIC RE-EVALUATION A}TD PROJECT IMPA TS AppraisalExpectàtion ...... ô..o...... o...... oo...... lg Project Effects and Developoents...... r...... 2a Recalculation of EcononicRate of Return...... ,..... 23 VI. CONCLUSIONSAND RECOMT,IENDATIONS Conclusiotlg ...... o...... r...... r.... 25 Leggong ...... r...... 26 Recomgndations ...... i. o...... 26 AmrExES " " ".'...... '...... o..... r.. o...... ZB :i-_--rhls report was prepared by It. lfYAl,tE-MENSÆ1,lransport Econooist. It is -prepared nainly on the basis of an earlier Mission'tc sorcalia undertaken by Messrs. p. RWUTAHTRAand K. FURUT(AWA(Bconomists) in ApriL, 19g0. -11 - PREFACE This Post-Evaluation Report This report is tentative in te::ms of data. rt is supposed to augpent and update the 1980 findings. However, just like the 1980 rnission, it is apt to point out the paucity of Èransport rlata. It would have been appropriate to harze, for qxamplce historical Èraffic flon data since 1975 when the projeet was conpleted. This ie not 8o due to the inability of Sonalia to collect any systematic data. llowever, uaing other sourcea, this report updates and presents the 1980 findings in an acceptable format. The report also relies treavily on the 1978 data collected by the IBRD for its project completion report and its subsequent project performance audit r€porÈ.. the first chapter of the report stmmarizee the econonic, sbcial and transport system and the Bank involvement in the transport sector in Sonalia. The second chapter presents the backqround data and analysis at appraisal level. The third and fourth chapters contain an analysie of the degree to which goals and objectives at appraisal level were achieved. These cover an analysis of the inrplenrentation and performance of the Borrower, the Bank, and the Contractorst irwolve In the Preparation of this post-evaluation report, source6 of data and information includedl i) ADB project Files ii) IBRD project Completicn Report 1978 iii) ADB Appraieal Report 1971 and iv) Findings of the ADB Post-Erraluation Mission 1980. -111- EQUIVALEMS /TND ABBR.EVIATIONS Currency Units Sonali ShiLlinga : So. Sh. ' Bank Unit of Account '' : BUA U.S. Dollar : US $ Exchanse Rates # BUA US$ So. Sh. At Appraieal (Wl7ù 1 I 7.t4 lst Disbursement (lul2l72) L 1.08571 7.49 Last DisbursemenÈQSlS/7g) I 1.31733 8.29 ABtsREVIATIONS ADB : African Develoirnent Bank ADT ; Averai;e Daily Traffic C,AT : Contracting and lrading Conpany, Lebanon CED : Civil Engineering Department, I'IPW ERR : Economic Rate of Return GOS : Goverunent, of Sonralia IBRD : International Bank for Reconstruction and Development IDA : International DeveltpmenÈ Association ISDB : lsLamic Devel"opment Bank MPW : Minietry of Publ-ic l.Jorks, SouaLia SIETCO : Sichuan Corporation for International Techno-Economic Corporation of China Ut'lDP : United Nations Development prograome VOC : Vehicle Operating Cost FISCAL YEAR 1 January - 31st Decenber. -1.lf- LIST OF TAJJLES PaPe I. Details of Initial Cost Estinate of the Hargeisa-Berbera Road...... r...... B 2t Sourcgsof Finance ...... rieoooo I 3- Actual vs. Appraisal EetiEates of Cost ...... 14 4. Averac;eDaily Traffic, lgTl o...... o...oo...... orio...r...... 2e 5- Developrnentof Port Traffic 1975-1980 ...o...... 22 -v LIST OF ANNEXES Page_ lITLE I Project Location ...... r ...... o. i or ...... r ...... zB 2 Design standards for the llargeisa-Berbera Road ...... Zg 3 Revisedcost Estirnateeand Financing ...... 30 4. ActuaL and Expected project Iaplenentation ...... :...... 3l 5 Actual antl Appraisal Estimates of Disbursements ...... ,.. 32 6 RoadMaintenance Allocation by Government ....,....,...... 33 7 Traffic Forecast...... r...... rrrri...... 34 I EconornicVehicle operating cost .. r...... r...... 35 9 vehicle Operating cost savings e...... r...... 36 l0 RecalcuLation of Economic Rate of Return .....orco....;i,irorrroj 37 It a a a a a.'a a a a a r a -Vl. - BASICPROJECT DATA PROJECT : TIARGEISA-BERBERAROAD LOANNo CS/S/TR/71loot Borrorser : Governrnent of Sornalia Execution Agency : civil Engineering Departrnent, ltinistry of Worke I. KEY PRO.'ECTDATA Loan lenns Appraisal Actual ToÈal Project Cost BUA10,600"000 BUA 10,690,000 Loan anount (ADB) BUA 1rO00,000 BUA 1,000 ,000 Rate of interest, 6Z 6Z Statutory Cormission LZ tz Comitnent charge on the undisbursed portion of ttre loan: o.75 Z 0.75 Z Repayment period 20 years 20 years Grace period 5 years 5 years Disbursement Loan amount BUA 1,000,00o BUA 901,195 Disbursenents BUA 1,0O0,000 BUA 90l, 195 Undisbursed balance (cancelled): 98"805 Repalment on loan a 337"948 (8/84) OuËstanding balance ott loan : 563"247 1g/8a) 2. SIGNTFTCAIMEITENÎS AND DATES Planned Actual Requeet for loan t9lt0l67 Project appraisal 2816-e17l7t Loan negotiations rt-r?lto17L Board approval 22lto17L Signature of loan agreenent L0lLZlTL Loan effectiveness date 5/Lrl72 Date of first disbursement 3tlt2172 3018172 Date of last disbursement 3r/12/75 2415/79 Project completion date L3/L2 /7 4 r/6/75 - vtl - 3. MISSIONDATA Type of nission Nunnberof Number of persons Period days Man/day (a) Preparation/ (1) I LO-aA/,f|67 10 10 preappraisal (2) I 20-25ls /68 5 5 (b) AppraisaL I t0-22/12/70 l2 t2 (c) Launching and foll"oro-up (d) Supenrision I 2 rt-rÛ12173 7 T; II 2 17| LL-e/12173 22 44 TII 2 24/Lt-r6lt2/73 22 44 Follow-rp I 1 28/417 4 I I II 2 1-14/2/75 t4 28 Supervision IV I r2-2slLoi79 13 13 v (e) Post-Evaluation 2 rr-zs14180 t4 28 4. O1TIERBAI{K CROUPPROJECTS IN THE SECTOR Conraitroents Project (in-ffi-ETTïIons) Date of approvaL Conpletion date ADF Rosd Rehabititation 3.0 eltol74 L977 Hargeisa-Boroma 5.0 6/6 /77 8.0 1. INTRODUCTÏON 1.1 Econornic and Social Setting 1.1.1 Soualia is located on the horn of Africa and is bordefed by: Djibouti, Ethiopia, Kenya and the Indian Ocean. The country has a total surface area of ) 6381000 ks'. In 1983, the population of Somalia was estimated at 5.44 rnillion persons with a growth rate of 2.25 per cent per year. The population density is 8.5 persons".per equare kilornetre. About 60 per cent of the population is nomadic or semi-nomadic, 20 per cent are settled farners operating near the rivers Juba anrl Shebelle, while the rest could be classified as urban. In recent years the exodus of skilled personnel, especialLy to the Arabian peni- sula and Arabian Gulf, has 1ed to acute shortage of manpower and the need for recruiting non-nationaLs to fill technical and managerial positions. 1.L.2 Somalia's economy is based on livesÈock and agriculture. fn 1978, livestock, agriculture ancl forestry accounÈed for more than 60 per cent of the gross naticnal product (CNp), industry about 7 per cent, transport 5 per cent, ,and traCe and services accounted for the balance. L.ivestcck and'asso- ,ciated'products are the main export accounting for nore than 75 per cent of expcirt earnings. The ooly other important export is bananas, grown near the south'coast; in recent, years bananas hzrve contributed about 10 per cent of the annual export earnings" Livestock and Agriculture will continue to dominate the.econony. Areas of most potentiaL for agricultural devel-opment are the Bay region ancl the basins of the Juba an<1Shabelle riVers in the souËh and 'in the tlest Galbeed regioir the north. In the period Lg72-Lg78, GN? is estimated to have grorrrn at a rate of about 2.5 per cent per year in constant prices. Per capita GNPwas estir.lated at US.$ fgS rnillion in 1978 oaking Sarnal,ia one of the poorest countries in the world. 1.1.3 The Scrnalian econoray staenated cver the last few years and even suffered. some decline between 1978 and 1981. GNP registered a nep:ative averafie llrowÈh rate cf I per cent. The agricultural sector Ceclined drasti- cally in 1979 and.1980, but in 1981, Èhis trend was reversed and the sectorts perforoance reached 1978 production levele. The improvements i-n this sector were mainly due to favourabl-e weather conditions and alsc Èo substantial increases in product prices. -2- 1.f.4 Except for 1981, the production of prains, bananaso 6uoar cane, sesaMer vegetables and cottcn recorded declines due to the constraints cf foreign exchange which curtailed iraportations of a.ericultural inputs such ! as fertilizet, pesticides, fuel and spare parÈs; frice incentives introducecl in 1981 spurred increased agriculturaL activity and productivity. The pro- ductive sectors of the econotny have gror.m consiclerabl-y slor.rer than the service sectors, causinq a stagnation in production and expôrts. Increasing buCget deficite and a steeply rising rate of inflation have been couplecl with a sharr,ly worsenin6; balance of paynents position. The economic situat,ion has been reflectecl. in inadequate funtling of road naintenance operations; it has also caused a strain on neqt capital investments, calling for oriorities to be accorded to those projects,which preserve past investtcents 1.2 Transport System and Investnent Transport System 1.2.1 Road transport is by far the prineipal nreans of internal transport. However, aninal transport - canels and Sector Inveetoents 1.2.2 Under the 1974-1978 Developroent plan, translrort irwestsents accounted for about 25 ,ler cent of total planned public investment, or So. Sh. lrl}4.l nillion (US 6 L75.6 milLion). The actual funds expended were clcse to the smount planned; however, due to cost overruns and deLays; some projects îrere traneferred to the following 1979-1981 p1an. Irnrestments in roads accounted tor 63 per cent (So. Sh" 695 milLion) of transport sector investments iand an additional 8 per cent was spent for a !?arastatal roa.d transport conpany; 26 per cent was invesÈed in ports and roarine transport; and only 3 per cent in civil aviation. the Governnent financed about 27 per cent of the projectse -3- ccst in the sectcr; external aid or loans contributed the renaininp 73 per cent. Under the 1979-1981Plan 17 per cent of the total investments were allocated to the sector; the roads and road transport sub-sector has still a maj:r share, 57 per cent, followed by ports, 32 per cent and civil aviaticn 11 per cent. I.2.3 The Government of Sonalia has prepared a 5-year Development Flan for 1982-1986. Out of So. Sh. 141600 rnillion of investments planneC for the whol.e econoay' only 12.3 per cent or Sc. Sh. 1"800 rnillion is envisaged for the transport sector. I^Ihile this represents a substantial" reduction of the sectores share froà previous plans, it is in line with the sector?s needs. The Government has been promised about 75 per cent ôf the financing needed to carry out the plan. For the transport sector, however, financing for only 50 per cent of the plannerl investments is available as yet. The roads sub- aectorrs share (So. Sh. t,26O mill-ion) arûounts to 70 pet cent of all investments in the sector' which is justifiable 1;iven the preclominance of the sub-sector and its neecls. Civil aviationts share is 21.5 per cent and portsr 8.5 per cent. In addition to Èhe So. Sh. 14,600 rni1lion, the plan includes a group of projects which are stiLl- at the conceptual stare; .?aong them are a nunnber of transport projects totalling So. sh. 21770 nillion. In light of the financial and overall economic situaticn in the countryr it is'unLikely that this additional prograrme will be carried cut" : The RoaC Network l-2.4 The road netvork totals about 271644 kCI of which 2,560 km are paved" 565 km are gravelled and the rest are earth roads and tracks. In terms of administrative cLassificaticn, the lengths of prinary, secondary, ând n*a;l feeder roads are about 41296 kE, 5r34g kn and 121000 kon respeetivety (see Annex ll). 1.2.5 The covera.qe of the network is atlequate for the countryrs present needs, but the standards and condition of the roads are not satisfactory. Low staadard roads prevail, j..:..1.. although there has been considerabl.e road upgrading; paved the roads increased fron about 900 kn in 1971 rô 2,300 kro in 1980. In past, the earth roeds \ùere upsraded to pave.J standards in order to provide a basic road network linking rnajor connercial centets. In the future, the normal developuent from eatxhfgravel to paved stândards shoulcl be followed. The backbone of the country?s road. systen is the north-south link between -4- Mogadishu and Berbera via Gal-kayo, Garoe and llarg3eisa (about 21000 krn); when the Burao-ilerbera Rcad (120 kn) now under constructicn is completed, a riirect link wiLl be established to Berbera through Burao. The other most inportant roads are the coastal road frorn Mosadishu to Kismayo leading on to Liboi on the Kenya border (about 700 ko) and the road frorn Mogaclishu to Dolo on the Ethiopian border via Afeoi and Raidoa (about 600 krn). 1.3 Bank Group ûFeraticns in Transport Sector 1.3.1 The pther Bank Group operations in the transnort sector in Somalia include: (i) Roarl Rehabilitation and Maintenance Prcject (ADF): The project'consisted of road maintenance equipment'and spare parts needed by the CED for maintenance of roads. The projecÈ was successfully conpleÈed in Lg7i. The loan is fully ,lisbursed 'Hargeisa (ii) - Borama Road projecr (ADF): The detailed engineerinq of this project was funded uncler the Harpeisa-Berbera Road Project (para. 2.1.6). It was jointly financed by ADF (fUa S.0 nillion); Arab FunC (FUA 7.27 mill.ion); Islaaic Developuent Bank, ISDB, (rua 0.82 rnillion); rDA (FUA 6"36 nilliori) and cos (1.g3 nillion). The project has been fraught with problems. Recently the ADF approved Èhe award of contracÈ to srETco for the construction of the road ftoo km 56 to krn 70 (CeUile-ttabadid) and works starreC in June 19g3, with completicn scheduled for February l9B5.l/ Ll The Bank actual involvement started with the BUA 36,000 Technical Assistance t'irant in 1969, which was used' for the engineering studies of the Hargeisa-Berbera Road (para.2.l.4). -5- 2. PROJECTTDEI{TIFTCATION PREFARATIONA.ND APPRAISAL 2.t Project Identification 2.1.1 A survey of Èransport facilitieç was undertaken by the Canadian ConsulÈant Grimble,and AssociaÈes. This survey riras undertaken in 1965-1966 as part of the UNDP-financed Technical Assist,a4ce Programe (under the SomaLia First,Highway FrojecË) executcd by the World Bank.. The survey, among other tlriggs, identified the Hargeisa-Berbera (l5q km) and the Berbera-Ilurao (141.2 km) roads for inprovenent. The llargeisa-Berbera Road was given a higher priority and based on the Consultantrs recor@endations, it was included in Sonaliars 1971-1973 Development P1an. 2.L.2 In view of the potential traffic ancl the economic significance of the Hargeisa-Berbera Road to the cettle indusËry, it was recornmended for detailecl engineering and design studies. ,Îhe, Grimble. feasibility studies were then reviewed by Kaiser Engineers and the Economist Intelligence Unit at the request of the ÂDB in October L967. .2.1.3 on the basis.of' their reeormêndations, tho ADB wâs approached by the Gorrernment of Sonalia (COS) for assistance in financing and undertaking the required detail-ed engineering studies. : The roa Preparation and Appraisal 2'.1.4 GoS approached the Bank to finance the detailed engineering studies in November 1967. SinuLtaneously, GOScontacted IDA/IBRD and UNDp for support in conducting the feasibility studies. Meanwhile, IINDP offere 2.1.5 the detailed engineering study of the road was prepared by the consulting firno Dorsch Consult of the Ferleral Republic of Germany. A joint ADB/toa mission appraised the project in December 1970 anrl the consultantes cost estimate of so. shs. 44.1 million or about us $ 6.2 nillion (nua 6.2 rnillion), excluding contingencies, for the road construction was found to be very lcm. The project as appraised by the ADB/IDA team was estimated to cost aboùt Us $ 9.5 nilLion (euA, 9.5 nnillion). The econonic evaluarion in the appraisal report was concerned with the'civi'l works which together with the associated consultantr s services for final engineering anC 'supervision ærounted toiabout 88 per cent of the estimated cost. The econonic râte of return (ERR) was esÊimated to be 19 per cent The Project 2.L.6 The main objectives of Èhe project were to - (a) inprove Soualia trânsportation network; and to (b) plan transportation investments. Tvo types of quantifiable benef,its considered for the project were savings in vehicle operating costs (VOC) and avoidance of loss of weight and death of, Livestock during transport on the project road. the project consisted of: A.' ' Road Construction (i) construction of the 158 km Èwo-lane bitumen to"d ftor'' Hargeisa to tserbera; (iii), supenrision of const:rrction. : : "., Prqject coppcnents 9çher ! ' (i) feasibility study ancl subsequent'detaïled engineering of ,' the llargeisa-Eoraoa Road (131 km) with a link to T,rg' l'laj ale ( tt t-rn); -7- (ii) technical âssistailce in transport planning. 2.1"7 The project road cônnects Hargeisao the second lar;est city in Sonal.ia and rnain city in the nortnlern regiono with tlre port of Berbera on ttre Gulf of Aden. Previously, access was provicled by a desert track having poor alignment and drainage. The new road follows the s€rne generaL aLignrnent of the old track between Berbera and Dubatoo but between Dubato and Derbera it follows a conpletely new alignment', and is 20 km shorter. The road traverses nostly rolling terrain interspersed by short rocky streÈches, except for sôme short distances near Hargeisa and llerbera where the terrain is fairly fLât. The design standards for the road which rùere considered adequate are shown in Annex 2. A 6.5 n doubLe bituminous surface-treate,i parred was'provided to.carry the estinated traffic volùmès over the 2C-veer econcmic life cf the road. 2.1.8 Funds were included for carrying out feasibility study and subsequent detailed engineering studies of the road between Hargeisa and Boramâr including a link to Tug l,lajale on Èhe Ethiopian border, wirich was among the priority projects identified by Grimble ancl Associâtes'in its 1.966lransporr Survey. lechnical assistance !ùas incLuded in the project to assist the Governrqent in formulating a transport plan by reviewing and updating the 1966 Transport Su:rrey. . Finagcing and Costs 2.f.9 The project was jointly financed by an IDA Credir of BUÀ 9.60 million and an ADB loan of BUA I ini11ion. Because of the financial difficulties, the GOS was unable to,contribute to the cost of the project. IDA and ADB were thue to finance the totaL project - ADB contributing about I0 per cent of the total projeeË costs. Table I sho!ùs the break-down of the estinated conrttuction costs by najor items. -8- lab1e I Details of rnitial cost Estimate of the liargeisa-Berbera Rc,ad Iten Ccst Estitaates So. Shs. BUA Equivalent (nillion) l. General ltems 1.71 ' o.z4 2. Earth works 17.64 2.47 3. Base and Surface 25.64 3.59 4. Drainage and Pipe Culverts I .21 0. 17 5. Structural works 4.50 0.63 Total 50.70 7.l0 Source: ADB Appraisal Report 1971, See Aanex 3 2.1.10 Of this ADB loan of BUA1.0 million, an estimated BUA700,000 was to be used to finance part of the foreign exchange cost and the rernainder to,finance local costs. The detailed financial plan is shorn in Table 2. Table 2 Sources cf Finance (ltiltions US $ EquivalenÈ) ' Foreiln LocrL Total .-ADB IDA ADB IDA ADB IDA A. Road Construction i. Berbera-Hargeisa Road (inc1"con- tingencies) ,0.70 .5.30 0"10 2.40 0.80 7.70 ii... Supervision of Construction 0.35 0"05 0.05 0" 35 B. Studieg FeasibiLity and Engineering of Hargeisa-Borana with spur Ëo Tug I'lajale O.5S 0.05 O.O5 O.O5 C. Updating of transpor- tation Study O.l0 0.01 .01 0.10 lotal 0.70 6.30 0"2t 2.40 0.91 8.70 Souqce: ADB Appraisal Report l97l; See Annex 3 -9- z.L.ll DisbursemenÈs from the ADB loan rûere to be done on the basis of l0 per cent of (or such other ratio as rnight be agreed roittr tOa) certified application for reimbursement. Althoush the GOSvas to submit identical. applications to the ADb and IDA (Sec. 2.03). the approval of the applicaticns for disbursenent was entrusted to the IDA (Sec" 2.04). However, under Sec. 2.05(b) of the sane Joint, Finance Agreement, after receiving notice of the IDA approval. and appointment of disbursements, the ADS was expected to pay the anount to be withdrawn fron ADB loan account subject to the rights of suspension and cancell"aËion. This inplied that a reajor loan disbursenent function was autualLy agreed to be excercised by IDA. : 2.I..T2 Overall responsibility for the arlninistration and execution cf the r.gads projeet ltas to be assumed by the Civil Engineering Departnrent .(CED) of the Miligtry llorks (tqpw) cn trehalf of 9f GoS. A Supenrising Engineer was to supervisà c.S,nltruction works anrl act as agent ,!he for the GOS in approving the worh and nnaking certification for payment. The works rrere expected to be cærpleted in 30 nonths. 10- 3. IMPLEMENTATIONOF THE PROJECT 3.1 Loan Effectiveness 3.1"1 The project rlaa presented to the Board on 22/L0/71 based on a revised financing plan providing for an rDB loan of BUA 1.0 million and an rDA credit of BUA9.6 miLlion (Annex 3). The Loan Agreement between ADB and GOSwas signed on rolt2/7t. 3.1.2 A Joint Financing Agreement between the GOS, ÆB and IDA was signed on March 300 L972. A condition of loan effectiveness was the enactenent of 1ègisLation to assure the allocation for highway maintenance of So. Sh. 6"4 nillion for the fiscal year L972. Major convenants of the Joint Financing Agreernent dealt with procurement procedures, prcnpt issuance of import licenses, visas, work per:urits ancl other necesgary documents, enforcement of traffic regulations, adequate maint.enance of the road neÈwork etc. and re- orçianization of C.E.D. All these conditions were fulfilled by the exchange of side letters. lhe tine span was within that stipulatecl at appraisal. The loan became effective in rhe third quarter (3018172) of. L972, instead of at end of the fourth quarter 30/12/72 as planned. 3.2 Procurement lendering 3.2.1 To avoid ilelay in the proceseing of the project, the ADB decide 3.2.2 Under terms of reference and conditions of contract satisfactory to the ADB, the GoS retained Dorsch Consul.t for supervision assistance in prequalification of contractors and evaluation of bids. The cost for these - lt - eewices vas financed retxoactively at COS request. Trrel.ve contractors arere prequalified and invited to subroit,bids; for construction of the project road. But onLy five tenders were received by the,closing daËe of October 30, I97L. Ihe L:west bid received was So" Sh. 51.f6 rnillion coupare'l to the appraisal estimate of So. Sh. 50 urilt,ion. 3.2.3 During preparation of the tender rlccuments, consideration was given to dividing the consttuctipn work into srnall corr-tracts which might be suitabLe for bidding by locaL contractors. .fhiç iclea rsas abandone À.2.4 Following negotiations and receipt of bids for road construction, the ADB/IDA reviewed and updated the project cc6Ës; taking into account subsequent changes in the re-aLignment of So.Sh. to the tlollar. As a resultl total project costs increased by US $ f.l niLlion - US $ 0.3 million artri- butable to project costs and US $ 0.8 rnillion to exchange rate changes. Contract Awards i) Contractor 3.2.5 The contract for road. construction r.ras awardeel to the lowest bidderi Contractingl and Trading Company (CAT) of Lebanon in Febru ary l97Z for an âpounr of so-sh. 51.6 naillioo (us $ 9.3 nillion equivalent). work starred on May 13r 1972 with compLetion scheduLed for November 8, 1984, all"owing a contract period of 130 weeks. I,tith a view to exploring the possibiLity of using 1oca1Ly availabLe granular naterial in base course construction, the Government reserved its right to substitute alternative pavement speeifications and to notify CAT accordingl.y within 3 nonths cf contract startinÊ date. 3.2-6 The supervisory consultants carried out additional site and roaterials investigations anrl verified the availability of cheaper rnaËerials for base course; es a resuLt tbe estimated contract cost was revised to sot sh.47.95 -12- (us million E 7.8 nillion equivalent). However, due to the delay caused in agreeing to reviser:l specifications for the base course, the contractor requested, and the Goverrnnent. approved, an extension of the contract period by 35 days extending the conpletion clate to December L3,1974. ii) cons,rltants for snpervision and rechnical Assietance 3.2,7 Dorsch Consult whc had carrietl out the detailed.engineering of the projeet road were 'selected for supenrision of, èonst.ruction. Funde were included for carrying out feasibility Btudy ancl subsequent rletailed engineering of the road' between Hargeisa and Borama,including a l-ink to Tug Wajale on the Ethiopian border. Also technicaL assistance was included in the project to assist the goverûrenË in foroulating a Èransport plan by reviewing and updating the 1966 Transport Survey. 3.2.8 The Consultants were selected by GOs with ADB and IDA eoncurrence. Messrs' Renardet-Sauti were to impleoent other project components. These conponents included the provision of Technica'l Assistance in Transport Planning and the conduct of Feasibility Stu 4.3 Execution of trIorks A. Civil l{orkg 3.3.1 Generally" the execution of the civil works by CAT proéeeded smoothly without any major problems. However the road construction was completed on Uay 8, 1975, six months behind scheduLe. This was due to a number of factors including disputes between the nain contractor (CAT) and the haulage sub- contractors regarding transporÈ rates; lack of a high capacity crusher for a period of tine; and withdrawal of work pennits for 8 of the contractorsl expatriate sËaff. 3-3.2 A Government Decree isaueC in November 1972 fixed certain ninirntrn daily rates for hire of trucks which represented an increage of about 65 per cent on the rates agreed beÈween CAT an rti ",:: :. : ir::i Jli.+f..d+,1;lliti' ji; increase haulage costs on the contract, the Government issued an order which exenpted the Hargeisa-Berbeta road conÈract froar the Decree. Nevertheless, the sub-contracÈors clained an increase in transport raËes which lerl to disputes between them and the contractor resulËinB in deLay in compl-etion of const.ruction. 3-3.3 In Septenber 1973, the sotreli Ministry of Labor withdretir work permits for I of the contrâctorrs expatriate staff, and requested thât they be replaced by Sonali staff. These pernits were l-arer re-issued aÈ AIB/IDA request. All clains submitted by the contractor to the Government for cost increases on haulage rates, fuel, cement and bitr:nen were settled with the assistance of Ëhe supervisory consultants. The actual and expecterl project inplementation sche 3.3.4 the quality of construction and contractcr uaintenance of the road judged was by Dotsch Consultants as saËisfactory, The works conpleted ghown conformed to Èhe standards in Annex 2; Hoicefrer, recent reports indicate that the physical performance of the road has been hamperecl aÈ sôme sections by floo 3.3.5 The feasibility study and the subsequent detailed engineering of the llargeisa-Borama R.oad, and assistance in transport planning was rendered by Renardet-Sauti" The feasibility study rvas ccmplered in July 1975 and the detail-ed engineering in Harch 1976. The quality of the detailed engineering studies etas unsatisfactory due to the fàct that Renardet-Sauti was found to harre used personnel not of a sufficiently high cal-ibre. B. Other project Cornponents 3'3'6 wtren the IBFJ nission visited somaLia to appraise a road project thcy discovered large ceposits of gravel in the project area which could be used as sub-base material instead of the utore expensive crushed gtonê proposed by Renardet-Sauti. The report on transportation sunzey of sonalia produced by sauti, a6 part of the assistance in transport planning was considered by the supervising consuLtents, the ADB and rDA to be generally satisfactory. "14- 3.4 Project Costs 3-4.1 At appraisal, project tctal costs were esti-mated at us $ 10.6 nilr.ion of which Us $ 9.81 millicrn was for road construction ancl related superrrision, inclucing contingencies. Cost estimates for road construction were based on the lowest bid received; contingency aLlowances totalling 18 per cent, l0 per cent for pocrible physical contingencies ancl 8 per cent for price escalation, were included. The ccst of consulting services for preparing the feasibility study and subsequent detailed engineering of the ltargeisa-Borana road was estimated on the basis of sinilar works carried out under the First Highway Project; cost of technical .the aseistance in transport planning was based on the cost of providing two transport experts for a one-year period. 3.4.2 Ttre actual total cost of the project was US $ f0.69 million, connpared to appraisal estirnates of us $ ro.6 nillion; aetual and appraisal estimates of cost are compared in Table. 3, lable 3 Actual coets a8 a Actual Appraisal proportion of Costs -uS-FEstinates Appraieal Eetinates nillion l. Road Construction 9.37 g.2r I02 2. Supenrision of I a"72 0.61 tl8 3. Feasibiliry StuCy and ) Detailed Engineering ), 4. lechnical Assistance in) Transport planning ) 0.60 0.78 77 Total 10.60 l9nÉ2= ==-== --====100.8s Source: IBRD Appraigal R.eport, 1972, pCR f97g. 3.4.3 there !ûas an increase of .US $ 1.57 rnillion eOZi) over the reduced negotiated conrract estimate of us $ 7.g niLlion (so. sh. 47.g5 nillion, para' 3'2'6) for roed constnrction resuLting nainly fron depreciation of the so' sh' and subsequent increases i-n coste of equipnent and materials such ae fuel, bit,menr. and cement since appraisaL; rhe us i o.1r nillion (rgz) increaee -15- in construction supervision cost was prineipall.y due to the longer eonstruc- tion tirne than originally envisaged. The actual- cost of the remaining components of the project was within the appraisal base cost estinate of US $ 0.71 nill.ion. Generally, the cost estimates at appraisal,as conpared to the final actual cost was very close and within accepted Linitg for simiLar proj ects . 3.5 Performance of Contractor anrl Consultants i) Contractor 3.5.1 : The performance of CAT was generally satisfactory.:,However, the progress on ryorks'was delayed because of disputes between the nain contTacËor and Ehe,haulage sub-contractors regarding transport,rates (see,para., 3.3): the disputes dragged on for soroe months resulting in the deterioration.in the progress of works. The contractor's limited rock crushing capacity aleo contribuÈed to some delay. Progtess irnproved generalLy after the governnentts action in tesolving the dispute between the contractor, truckers and labour; and the inJortation of a'Ëigh capacity crusher by the ccntractor. Relations between contractor, supervisory consultants and GOS officiale rdere generally good througJrout the project execution period. ii) Consultant for Civil l{orks 3.5.2 The quality of services rendered by Dorsch Consult who carried out detail.ed engineering of the project road, and supenrised road construction, was quite good. The etaff of Dorsch Coneult rnade significant contribution to the succ-gsful cornpLetion of the road contract vith their efficient super- vision and ptompt handl.ing of contractorls claims and other site probless. Much of the success of this project can be attributed to the services provided by Dorsch Consultants. iii) Performance on other Project Conponents 3.5.3 The quality of se:rrice provided by Sauti naa poor. Megsrs. Sauti used poor calibre personnel for the execution of the detailed engineering studies of the Hargeiea-Borama Road. their studies also failed to reflect local conditions in ter:ms of avaiLable material for the sub-base. llowever, '16-'.' ' their report on transportation,.su::vey of Sonalia:na$ judged by the GOS, ADB/fnA and the Dorsch Consultant .to be generally satisfactoryi Srmmary , i ! 3.5.4 In terlns of the totaL project execuÈiono this project was inple- mented fairly well. the loan becameeffective within the stipulated deadline set out in the Loan Agreement. The procurement of goods and servicee followed laid down ADBprocedures. 3.5.5 The only source of friction in the execution procese of Èhe project was the w,ithdrawal of wo:rk peroits for the expetriate staff of CAT, the main contractor for the civil rorks. However, this apd other ninor iasuee were resolved anicabLy. The six months time overrun recorded by the project dicl not naterially after the total final cosÈ of the project. -17- l+. BANK AND BORROI^IERPERFORMANCE 4.t Botrower Performance 4.1.1 Generally, the Borrowerts executing Àgency, the Civil Eneineering Department (CED) of the MPI,Iperforrned satisfactorily. CED took appropriate action to solve problms as they occurred. In all, there was general coupliamce with the convenants of the Joint Financing Agreenent except for the withdrawal of work per:mits of the contractorrs expatriate staff and GOE compliance with the conveaant dealing with road rnaintenance equipment. t 4.L.2 the GOSgave an undertaking to ADB and IDA in a side. letter to allocate and expend for highway maintenance funds anrounting to ûpt less than So. Sh. 6.7 million, 7.0 million and 7.4 nnillion for the year 1973, 1974 and 1975 respectively. Allocations made were in excess of these specifiqd amounts (annex 5). : , 4.1.3 In another undertaking, GOS agreecl to ensure that equipnent intended for highway rûaintenance would be used principally for the purpoee of higtmay maintenance. Ilowever, there were instances when road uaintenanc.e personnel ' .1. anrl equipment were diverted to unrelated works. (See IBRDts PCR and Project Performance Audit Report No. 2391, p. 52). Even thoug,Jr these diverg,ions ltere not significant enough to jeorpardise the overall inplementatipn of the project the Bank, as a tratter of principle and policy should e:{press reluctance and opposition to such dirrersiorr.f/ Also GoS has failed to collect or rnaintain any systematic transport data base beËween 1975 and l9B4 - Èhus making post-evaluation dif ficult. Bank Ferfonnance 4.2 Ap?raisal 4-2-l Looking back, Èhe appraisal process accpted by the Bank eoncentrated on the right issues in terms of project benefits and costs. The only handicap at appraisal lras the laek of coherent and systenatic traffic data. ll For IBRD (rol).3rd lligtnray prcject (co-financed with-the ADF), a specific condition was incluaeà in- tire aonvenant betrùeen Goi ""â-eôi réquiring cos use highway !_o naint€lance etaff and equipm€nt exclusi.veLy for this i,rrpose. The ADF conrrenant did not inclurle such a prcnzision (see tire Hargeisa-goiama Road Projecr, ADF/0PS/SOÈ,I/TMNS/02of 22/3177). -18- Supenrision 4.2.2 Major disbursenent and supervision roles for the project were given to IDA (para. 2.f.12). On the whole the project \ras adequately eupervised by IDA staff, and ADB was consulted fully on all aspects of the project inple- mentation as set out in the Joint Financing Agreenent. The ADB on its own also undertook some supenrision and follow-up missione. All these helped in the eventual guccess of the project. Disbursements 4.2.3 The actual disbursementg were Lo'wer and behind those planned at appraisal (see Annxe 6). Even thougJr construction was substantially finished in'May 1975, there was delay in Gos applying for reinbursement. Gos requested on 17/12/75 for an extension of date for last disbursement froo 3L/12/75 to 3O/6/76. this was to enable the cæplerion of rhe derailed engineeiing study of the Hargeisa-Borama Road. 4.2.4 There rûas a second application for extension of disbursement fron 3016176 to 31/rc177. This $ras agreed by ADB in accordance with Section 5.04 of the Loan Agreemeat. The main reason rùas to give GoS enough tine to provide clarifications to ADB and IDA concerning an anount of about UA 970,635 to be paid to the contractor Êonards Bettlement of their final cl.ains on retention money (1OZ'or UA 97 ,630 A.DBshare). 4.2.5 On 2. 6. 78, the Bank informed GOS'of its intention to cancel UA l12rO5O outetandinEt on the ADB i.oan since it appeared to the Bank that there nas no related alternative use to which the balance eould be applied. Part of the outstanding balance was used to pay ADBfe share of analysis of bids by Dorsch Consult on the Hargeisa-Borama (amounting Èo DM 311832 or BUA 13,245). Al.so Part rtas used to purchase one bitunen sprayer and two emall rollers for road rehabilitation and mainten€ulce. The remaining balance of UA 98,804 was cancelled 4.2.6 In annmaty, the Boirower and the Bank perforned fairly well ln the utanageDent and execution of Èhis project, rn retrospect,, the appraisal concentrated on the pertinent issues. The project nas adequately supenrised, and the suggestioas given by the Bank and IDA resul.ted in the fulfilraent of the project objectives. -19- 5 ECONOMICRE-EVALTJATION AND ?ROJECT I}æACTS 5.1 Ar,i-trais al Exp_ectat ions 5.1.1 the, Berbera-llargeisa Road and the Hargeisa-Bor.ama Road (for which the feasibility and enirineering design $rere requirecl) were seLected by the GOS as having high priority within the road network system. For the period L97O-t974, thg coustruction of the llargeisa-Berbera Road was to constitute 45 per .cent .of the total expenditure of GOShighway construction programe. 5.1"2 At appraisaL the project road was to benefit the rnost inportant activity and the main Somal-ia export : livestock. It.was estinaated that' of the total- aninal exports for 1968, val-ued at sa.sh. 125,000,000,,.66 per cent moved.on the project road. The infLuenee of the project road was'j , estinated et 501000 kmz, extending from Berbera, on the coast, to Boræa , an 5.1.3 Important produce cultivated around the project area were sorghuo, wheato horticulturaL products and fruit whieh are consumed in the regiones - urban areas prinarily Hargeisa and Berbera. Ttre project road lrag envisaged to hei.p in agiicultural narketinlr especially the transporÈ of livestock:, fron Harqeisa to Berbera, the main a 5.1.4 The quanËifiable benefits attribuÈable to the project'at appraisal ltere derived frcm two nain sources: road user sawing, and decrease in loss of weight and oortal-ity rate of cattle during transport: Road user savings (vchic1eoperatingcostsavings)steM0edfromthedifferenceinoperating eosts on the then existing tract and the proposed pmred road, as well as the reduction in 20 l&, of traveL distance. voc saving rras to contribute -2A- 66 2 /3 per cent of the quantifiable benefits " The rest of the benefits was taken up by 4ecrease in mortality as a result of transporting cattle fastero safer and efficienttry on the new road. 5.1.5 Apart from above quantifiable benefits, the project road was envisaged at appraisal to aid in the irnproveûent of hauline live anirnals to the market in better condition. This was to prevent loss in sales as the Somalis rdere finding it increasingly difficult to trold their marker share in Saudi Arabia, their uain buyer due to the deteriorated etate in which Èhe livestock arrived in Saudi porÈs. 5.1.6 The AIII at appraisal was expected to increase by 5 per cent for the first 10 years after conrpletion of the road. I'hereafter, traffic was estirinated to grow at a reduced rate of 4 per cent throughout the next 10 years. (econonic Life of the project nas taken to be 20 yeare). No generated and/or diverted traffic trere e:rpected as a result of the pràject road. 5.2 Project Effects and lleveLopments 5.2.1 Traffic has developed nuch more rapidly than had been expected, as reflected in leble 4. Table 4 Average Daily lraffic, 1977 Appraisal Actual Actual'ae 7 of . No. 7" No. 7" Appraisal Snall Vehicles (cars, etc.) 27 20 152 : 31 5622 Mediun Vehicles (trucks, ) buses) ) 267 55 tleavy Trucks (trucks, ) 107 80 ffiTïers) ) 65 L4 3102 Total t34 100 484 r00 Source: Civil Engineering Departoent 1978. -21 - At appraisal (1971) ADT r"-asestimated at '100 although at tines traffic $as said to rise as high aa 300. Based on the 1evel of 100 ADT in 1971 and the 5 per cenÈ per year growth rate given in the appraisal report, the ADT in 1977 Hould be 134. Since the actual traffic in 1977 reached 484 ADT, the growth raÈe has been nnrch higher than 5 per cent per year unless the 1971 estinated traffic l-evel of 100 vehicles was lower than the average for Èhe year. ': 5.2.2. The senere drought that affected Swralia in 1974-1975 had short term and long tern effects on the area of infLuence of the llargeisa-Berbera Road. In the short tern, it caused an increase in ntrnnbers of livestock brought to market as producers found it difficult to feed then; also considerable relief suppLies were transported frorn Berbera to Hargeiea for.further distribution in the Northwest. In the long term, the reduced size of cattle herds caused by the drought can only gradually be restored to previous levels. Therefore, fcr the recalcul.ation of ERR, the forecasÈ of traffic on the project roed beyond 1978 should be based on a moderate growth rate. 5.2.3 the Hargeisa-Serbera Road has facilitated the e:rport and inport of goods inÈo Sonalia in the north on the Culf for the export of livestock and bananas. In the period 1975-1980, since the ccryl-etion of the project road, the Berbera port has had a moderate annual grovth of treffie of 4 per cent (faUle S). The project road has helped in the aovement of liveetock and bananas and has thus fulfilled a major expectation at appraisal. -22- TabLe 5 Development cf Port Traffic 1975-1980 (in t000 tons) Traffic in Ports t975 L976 L977 1978 L979 1980 Jnports 1/ i) Mogadiahnr 451.8 428.3 451.I 393.8 586"2 834.2 ii) Kisoayo 58.3 35.5 64.8 53.9 64.9 52.t iii) Berbera !2g,3 121.O 137.O tzg.2 150"3 164.6 - Total 63e.4 s84"8 652"9 576.9 80r.4 1050.6 I B. g*potts 3/ '20,9 i) Mogadishu 12.4 12.5 45.9 77.7 100.8 'ii) Kismayo 6r.4 53.4 36"7 38.4 35.6 4s.0 iii) Berbera 63.6 52.6 50.6 64.1 63.0 70.8 Total 176.3 2t6.6 L!!-.2 l!9sl =22=9 119*1 !======æE= Ll Includee petrolantr a MostLy livestock and bananas. Source: Sonaal,iPorts Authority, May 1981. 5.2.4 The atea of influence of the Hargeisa-Berbera road has been farrourabty affected by the initiation of two major prôjects: One of theee is the IDA- financed Northwest Regional AgricuLtural Projecte approved in April 1976, which is assisting in the development of the 2601000 ha of potentially arable land in the region. Ttre other is the Northern Rangelands Project uhich is aiding in the mdragement of gtazing areas so vital to the livestock production of Somalia. The Hargeisa-Berbera road. has facilitated the implenentation of these projects and wilL serve a usefuL role over the long tern in tranaporting products stinulated by these conpleoentary irrrvestments. _23_ 5.3 Recaleulation of Economic Rate of R.eturo 5.3.1. The EconoraicRate of Return (nnn) calculated in this post-evâluation report is based on an assessmentof costs and benefits with and without the project orer 20 yearse being the estimateC econorniclife of the iuproved road. 5.3.2 In recalcuLating the ERR, esÈimates of savings in VOCwere derived frm vehicle operating cosLs per Ifu (Annex B) in lg74 .md the best estinates of traffic over the f.ife of the road (Annor 7). Traffic estination ie based on the 1977 counts. Since it is difficult tc estimate the correct figures of traffic due to unavailability of periodic counts, the fo1-lowing have been taken into account in the estirnation: a) a 5 per cent grolrth rate on the basis of the 100 l\tl in 1971 at appraisal which may be taken to L'e the average growth growth trend for the whole of Sonalia; and b) the 8.3 per cent growth rate on the basis of 300 ADT observed ia 1971 which will reinforce rhe counted 484 AST in L977. This eount reptesents the specifie chaïacter of the zone of influence of the Hargeisa-Berbera Road. 5.3.3 Using the above assumptions, the forecast is based on the 1977 count of 484 ADT (taking on averase grcrwth rate of 8.3 per cent between L97l-1977). However, between L977 arrd 1983, a grolrth rate of 5 per cent is assumed w{rile a modest 3 per cent is forecast between 1984-1990 and thereafter. This is done taking into account ttre low growth in GDp and a 2.25 pet cent growth rate in populaticn. The totaL traffic for each year is divided into SrnalL Vehicles, Medium Vehicles and iteavy Vehiclee by the ratio of the 1977 count which was 31 per cent; 55 per cent and 14 per cent regpectively (Annex 7). Separate benefits are calculated for traffic transporting livestock for which separate benefits are calculaÈed. 5.3.4 the new road made possible the shift from costl-y walking or treking of Livestock to truck transport froro llargeiea to Ëerbera, and estisates were developed of the increased revenue from Livestock exports attributable tc the -24- road impr6vomênt,. Data on livestock moverqents indicate that sooe 8101000 sheep and goats and 631000 cattle nere transported on the road in 1975. At 30 kg ç;er srnall animal and 235 kg per larqe animal, their total weight was about 39 nillion kg. By tnrcking these Livestock soroe 12 per cent of their weight or 4.7 oillion kg was saved âs compared with walking Ëhero. The 3 per cent weight saving ehown in the appraisal report is 1ow in vielr of recent research done on this subject. Taking the weighted average value of the livestock at So. Sh. 4 per kg, Èhe vaLue of the 4.7 oillion kg of weighË saved is So. Sh. 18.8 nillion. After deducting transport and adninistrative costs the net value of the benefit is So. Sh. 13.6 nillion in 1976. In view of the long term problem of rebuilding cattLe herds, these savinge are assumed to grow at a modest 4 per cent per year over the life of the road. 5.3.5 Cùrrent ioutine and periodic rood maintenance costs, with anC without the project roaC, were estirnated and appropriately deflated for purposes of the anaLysis. The economic rate of return was calculated based on actual capital eost, new estimates of savings in vehicle operating costse value of increaeed revenue frou livestoek exports att,ributable to the nes road and savings in road oaintenance cost (annex 9). The result ehow an econonic rate of return of 25 per cent which is relatively higher tban Èhe 19 per cent derived at the appraisaL (Annex 1C). _25_ 6. CONSLUSIONSAND RËCOWIENDATIONS 6.1 Conclusicns 6.1"1 Ttie principal purpose for the construction of the road was to connecË Hargeisa and Berbera, the main torrns in the Northern region'of Sorualia. To the extent that it can be neasured the effect of the roacl on Sornali econony has been favourai:1.e" The road has Lived up to expectations and rnost of the objeetives of the project were fully achieved. This success couLd be attributed to the participants in the execution of the project" l:l.e main factor incLudes the perfornances of the Eorrower, the Co-financiers'the Contractor and especially the sup,ervising eneineers. 6.1.2 The perform,lnce of the borrowerrs executing agency, the civil Engineering Department of the Ministry of Rrblic workse nas generally saÈisfactory. It took appropriate action to solve problen:s as they rose. The efficient superuision a::d pronpt hanCl"ing cf contractor clairns by the supenrisory consultants and forthright âttitude of the contractor played a najor role in the successful coopletion of the road conÈract. The project was aclequately sug:e1vis.d by IDA/ADB supewision missions. 6.1-3 Thê other aspect of the success of the project is its importance and role in the }Jorthern region of Sonalia. ïhe road has provided easy access to the port of Berbera çrhich handles a substantial anount of Somaliars exports (i;articularly livestock) and inports. The zone of influence of the Hargeisa- Berbera road has been favourably affected by the initiation in recent years of two major projects. One of these is the ÏDA-financed Northwest Regional Agricultural Projecte approved in April 1g76, which is assisting in the development of the 150,000 ha of potentLaLly arable lan 6.1.4 In conclusion, the objectives of the project nere generally achierred. the actual total cost of the project &ras ûS $ f0.69 mi1lion, comparcd to appraisal estinates of US $ 10.60 nillion. The actual disbursements under the loan were lower than apnraisel esÈinates. The Bank extended the date of the loan thrice to June 30 u 1979; the cre.iit was fully clisbursed on June 30, lg7g. An economic re-evaluation of the project road shows a rate of return af 25 per cent coropared to 19 per cent calculated at the tirne of appraisal in 1972, Lessons 6.1.5 The decision to agree on exact costing and financing after the results of tendering were known sas a rational one; the lesson beinR that it led to a better design project in terms of cost control. 6.1.6 Much of the inplemente^tion success on this project could be contributed to the constant, regular and coinposition of supewision oissions of thé IDA/ADB. (Part of the success was also due to the executing agency and the supewising engineerg). In ter:ms of a lesson, it seems that the Bank should in all cases undertake regular superwision nissions. The degree of supenzision and/or follorrup visits should not be increaeed only after a problero has been detected. Supervision and fcllor.r-up missions should be an on-going process throughout Èhe inplementation of a project. 6.2 Reconnendations 6.2"1 In the light of the Ciscussicns of this post-evaluation reportr and the experience gained during the execution of this project the foli.owing recomnendations are made for: Borroser (i) Should attempÈ in the future in similar projects to endeavour and to honour its pledge in terms of the use of facilities, machinery, equipraent and personnel for the specific project being financed by the Bank" -27- (ii) Should as a natter of urgency initiate the collection of traffic, transportation and other data in a systematic manner. Ttris ie partieulârly imporÈant for the economic appraisal of neTùtransport - investoent. Dank (iii) Should seriously consider the poseibility of drawing up guidelines provisions and loan agreements $r and including in appraisal reports ,, :,: on the collection of data during and after the inpLenentation of projects. Ttris would ensure the awarenessjobligations of borrowere in the systernatic collection of data for monitoring and evaluation of projects" ir{ --{-.>Q Alii.{BN PROJÉCÎ LOCATION .l truocRalrC (N Yf^iÉN Gull o{ Aden I t t' I I - --'.. Oa,? I .fI É'ir@rg$-,/ I , l I , -.- I t t - SANA^G I t_ IND'IAN OCEAN Z--\\ SOr,lAl,lA brù \ TECENTECOr.'Crâ,ilC bricrouô-,\ DEVETOPârtENTS .' * lËrf *Est acthct Llrrta|- If,ytrrrqfl.t tÊ)J€gf tâËr6, .'E âo*f ô|.barfiidarc t ta I t[ nrryradr -rotorlra r'ù. I Dqrc.l ||gr ! elf: rvæor, srçÉ rrce F--lilil} .,t i !ùelroÊ( æqrÊCt ! r ru rrnrclrpi fnor[cîs z'cfltTRAI iÉr.! ls-rtll à-Ar tttr-rll ' .l . i, îl |rËtcu,t î c.' .*_:-_rc ? rço q. t.æ '.- -; r,tctSrttt ENADIR -t!.rn€tdûtr É altC rEdr tÊtrr ænaùar - Fnaor.ll 'ora.f ædr -AdC136t srtmÉ E€ar:|.ltÉr .*lrilenCr i..-æ f,*tr I :i'. ràl arrc I I r,qr r.ùca O llû trr!ûrr ' ut0taî, r)F t"rrtotl*r a.1ri rf ooilr,c croatt ocE.t G etùsÀ f ,-or. O lrt .æ aôa H&# ---- âtg,crot brrdoflrl tlLf a o.3. 66ç4ç6t6t ùqnrbrlr g 'lro tæ Dô r& @È rt((rf tlrç 29 ANI{BX 2 SOUALTA HARGETSA-BERBERAR0Ap-rOAN No CS/S/TR/7lrcgl Deeign StandarA for tt" ttargeiga Design Speed (krn) 80 t' width of Roadway(n) 9.00 , I.ridth of Surfacing (m) 6.50 Width of Shoul-ders I " 25 each , Mininuur Radiue of Curvature (n) 400 Maxinun Grade 77. Depth of DiËches (rn) 0.5 lype of Surfaee DoubLebituminous surface treatment Main Drainage strucrurês rrish crossing (paved fords) Axle Load 1o metric tons Soutee: Joint Fiuancing Agraement -30 Annex 3 SOI'{ALIA HARGEISA-BERBERAROAD-LOA}T NO cs/s/TR/71/l0t REVISED COSTESTIMATES AND FINAI.ICING A. Project Cost conpement,s z Foreigtr So.Sh. (million) US$(mi1lion) Exchinge Item Local Foreign I"t.T Local Foreign lota1 Coaponent I. Constructi.on of .,the Hargeisa-Berbera Road 15"20 36.00 51.20 2"32 s.45 7.80 70 II. Supervision of I 0.35 3.3: 3.70 0.05 0.50 0.s5 90 III. Feasibilitv Srudy and Detailed Engineering 0.45 3.85 4. 30 0.05 0.60 0.65 90 IV. Technical Assistance in Transportation Planning 0,05 0"35 0:49 0.01 0.0s 0.06 90 V, Contingency Allowances: a) on I-l8Z (lOZ l.5s 3.65 5.20 0.23 0.55 0.78 70 physical and 82 Price) 1.30 3.00 4.30 0.20 0.43 0.63 70 b) on II, III' and w- l0z physical 0. l0 0.80 0" 90 0.01 o.t2 0. t3 sub-total v 2.95 7.45 .10.40 0.44 l.l0 1"54 Total Projeet Costc 19.00 51.00 7L\"09 2,90 7.74 t0.60 70 B. Source of Finance Item IDA ADB Total (usÉErlion) I. Construction 7.O5 o,75 7.80 II. Supervision of I 0"50 0.0s 0.5s fII. Feasibiliry Study and DetaiLed Engineering 0" 60 0.0s 0.65 IV. Technical Assistance 0.05 0.01 0.06 V. Gontingency Allowances r.4c 0.14 t.54 Total 9.60 I .00 t0.60 Sotrrce: IBRD/IDA : Appraisal of 2nd Highway Project" Somalia, January 1972 J4l .s .if tn!ô l.{l l\ N|\ SlEl e ô or o\ lrJl L' t{ itst ts o rd .c "fÊl 2 a E O lI&I I .Fl I Ln rô lO \O l.|l r\ I\F cl l'-t I q1\ Or g\ Ëlgl ÈO\ >! t{ èo BlËl h r! $â (rl (\ ôl .if .t .5d l\ r\ H qr .o t5 Êol o'l lx h ÊEt l+{ q, ($ rd o E FJF) èx iE ë ôl (\ .+ .+ .Fl I\F Ë tà o\ o\ .q\ i : ..'i É l. - Ê u0 lx h '. l'l ot c, È& Èl nct lg E q lEl ît rtl H ql gl =' z z B ,rl .L, Àt ôl U o tU t{t o\ o\ o t{ çil .lJ ,l * É +rl € tJ ()o & É €l Ë H çrf vt Ot C) o z qtà I 2 = ÉHl E'oô0 "eg $ryg.g +,' x'd Ë E râ rË H 'iro t6 q) r+{ tr É o AJ .r{ Ët :Ë i #-agî h .LJ g's C) Ël f# .g 1Ë o â{ Ëg :g Ër Eâ' o 'Ès }J 8l !'Ë È fi P1 ïl Ëi 8" HS €F' ql ol '31 8g # Ê ,g.g ol r. l f{l . l-l 9' Ê{l - ! t-t H l-l H F.l t{ 3f 32 ANNEx5 SOMALIA HARGEISA-BERBERAROAD-LOAN NO CS/S/ÎR 17I / OOI Road Maintenance Allocation by Government Sonali FiacaL Year Maintenance Allocation (So. Sh. nillion) 1972 6.40 t973 9.58 t974 7.86 t975 6.84 t976 7"96 r977 7.96 1 lource: Civil Engineering Departoent *.,$,r:*i]r'.-, :: Annex 6 33 Sonalia Itergeisa - Bjrbqra Road:@-n" ctlS/TR/711901 /-.-,"dctual. and AppraisaL Estimâtes of Disbursenents lCurnulative) Actual disbur- ADB Appraieâ1 gement as a Fiscal Year Actuel Estimates percentage of (Quarters) Àppraisal tt: us$ Egtipates. : 1971 s IV loo 000 1972 z I 140 000 II 210 000 116o297.83 290 000 .40 IV 134,817.55 370 000 .,36 1973 z I 165,464" 13 450 000 37 II 198,336. I 7 530 000 ,37 III 248' 139.3O 610 000 4l IV 293,282"3A 690 000 43 1974 z I 338,929.83 780 000 43 II 4O2,508.55 900 000 45 III 452o 538. 05 IV 591,747.61 ': 1975 z I 8O3rt49.06 II 9O5,517.77 IIT 937"849.64 ïv 939,492.69 1976 : I 954,239.55 II 956"392.66 III 956,392"66 IV 969,369.51 1977 z I 969,369"51 II 1 013"5O0.82 III I 013,5OO.82 1978 z I 1013,50O.82 II I 013,50O.92 III I 013,50O.82 IV I or3,5o0.82 1979 z II 1Ot+S,333.28 Source : Appraisal Report" 1B October 1971 Diebursement File 34 Annex 7 Somalia Hareeisa - Berbera Road - Loan n" CS/S/ÎR/71lOO1 Traffic Forecast (Aûf) SmaLl Vehicle Mediuo Vehicl-e Iteavy Vehicle TOTAL 1976 89 150 40 288 1977 96 170 43 309 1978 103 183 47 333 1979 tlt 197 50 358 | 980 119 212 54 385 1981 127 226 57 410 1982 t38 246 62 446 1983 149 265 67 481 1984 161 284 73 518 I 985 173 306 78 557 | 986 179 319 81 579 1987 187 331 84 602 t988 194 345 88 627 I 989 202 3s8 92 652 1990 210 373 95 678 1991 219 387 99 705 1992 227 403 t03 733 1993 236 419 107 762 1994 246 436 1t1 793 t 99s 256 453 115 824 Total traffie is separated into Small, Medium and Eearry Vehicles by 1977 count of 31 7., 55 Z and 14 Z respectively. lraffic growth is assumedas 1977-1983, 5 Z, 3 Z growth tate fox the period 1984-1990' thereafter Source : Mission Estimatee sl o o rô rô rn .F{ Nrôco 0O î\ C{ s6 â .aa ç .'f \O O rt{ }.t . o1ôc'\ o@\{) âb33O.t UJp.}r\, (Y) t\ @ U, ê n1 t\ Or (t) o60 o (\OO tâFlO a ô0l{ou) ôl (n dl ÉO.r{v æoc! .;l Ê. 5 >\ c{ c\ o \.1âl qt Fl 2-r q.til € É 6 ,l( url al \lo co ..dl rn (t) (/Jl d) ôt co e rn"lFl FC! 8l FolNco\ rl r, {n|,.. ol u, I o rzl co C\l (ôl@Nrôt4 zlg (d(J()lF È L) O Ol Al àD IH € sl -E (d+, Fl o(J rfl ûo (?) 'rtooEiir- @ ,l fi (f! o\ o\ O t{ ! .,tra l\tnl\ ,t taÊ{d\ FF\O o IroÉÊ t/l € o\ Ê-çîn aa (â âl q) O+lc) oao Ol Fl t{:.{()O Éle Ê{Ê .g| Él H o\ HI ,al ûl É aâ €o or t\ u FTI C.t .!i r\ d't ot (') l.l tCl I ..{ ÈO o\ o\ r\ o æv, a È +t Ë |sXv oO(1r0 o o \gdtF É Ht I o(JL) cî (n lrl I cJ (ttoO .tJ (?l trli {c) É rÉ *r 3l Fl +, (J I '!t o ul lg . t-l Ê ao o ÉHv, (J Ê{O èr0 +r ê 'cl Eirr('.:i O.Srô É .r{i!fr\. \O \g (d .uo,É C!T\F argv, g'r ao F .F{l)(J aaa {J XtFI()O F({ *{ Hp'l= o A & nt tt (û lr Out a (l, O ?1 (1, a, t-l t2 Fl O r-i îJ V' U .r{ (J .r'l t! .t-.{ S .r{ .E ?1 .'j,O-É o}L) o a ir FlAh F{ .r{ fE€6, 3l Eoq) U)EIC 3l Annex 9 36 Somalia rsa - Berbera Roâ?--i6an cs/s/rR/7| læ1 (so.stl. 'ooo,ooo) Sna11 l{edium Eearry Total ïarr VehicLes Vehicles Vehiclee 1976 2.6704 11.9021 3.2676 17.8401 1977 2.8803 12"7255 3.s126 19"1184 | 978 3. 0904 t 3 .6986 3.8394 20.6284 1979 3.3304 14.7466 4.0845 22,1615 '23.8512 1980 3.5705 15 .8695 4.4112 1981 3.8rO5 16.9174 4.6563 25.3842 1982 4, 1405 18.4145 5.0647 ,27.6197 1983 4.6706 19.8368 5.4732 29.7806 1984 4"8306. 21.2591 5.9633 32.0530 I 985 5 " 1907 22.9059 6.3718 34.4631 1986 s.3707 23.8791 6.6169 35.8667 r987 5 . 6107 24.7773 6.86t9 37.2499 | 988 5.8208 2s.8253 7.1887 38.8348 f989 6.0608 26.7984 7.5154 40.3746 1990 6.3008 27.9212 7.76A5 t+l.982s 1991 6,5709 28.9693 8.0873 43.6275 1992 6. 8109 30"1 669 I "4141 45.3919 1993 7.0809 31.3646 8.7408 47.1863 1994 7.38 10 32.6372 9.0676 49.OB5B r995 7.6810 33.9097 9"3943 50.9850 Source : Mission Estinates -37 Annex 1O SOMALIA IIARGEISA-BERBEBARoad-Ioan NO cs/s/rR 17 I I OOI REOAI,CIJI.ATTONOF ECONOMICRAÎE OF-REIWF- (So. Sh.'000,000) Vehicule Road Capital Operating Livestock Maintenance Net Year CosÈ Cost saving Benefits Cost saving Benefits 1972 14.30 ( t4.31) I 973 26.84 (26.84) 1974 2().84 (26.84) t975 12.lg (t2.t9) r976 9.45 13.6 -.2 22,95 1977 I0.07 l4.l -.2 23.47 I 978 I0.93 t4.7 3.2 28.83 r979 1r.75 r5.3 -.2 26.85 1980 L2.64 15.9 ^.2 29.74 l98l I 3.45 r6.5 -.2 29.75 I 982 t4.64 17.2 -2.4 29.44 1983 15.7g 17.9 '.2 33.48 1984 16.99 r8.6 -.2 35.39 1985 I 8.26 19.3 4.9 42.16 r986 r9.01 20. I -.2 38.gl t987 t9.74 2t.9 -.2 40.44 1988 20.58 21.7 -.7 4t.58 1989 2l .39 22"6 -.2 43,79 I 990 22.25 23.5 6.6 52.35 l99l 23.12 24,4 t12 47.32 r992 24,06 25.4 6.6 56.06 1993 25.01 26"4 4.9 46.51 t994 26,01 27.4 -"7 52.71 I 995 27.02 28.5 4.9 60.42 ERR= 252 -Source: l'lission Estiuates BCIIItsÛ!.;ERSCOMI{ENTS ANNEXiI JAMNUURTTAUNA T}Iffi. SÛMATTTTA SSMAT,TDEh{SCN,AîIC BEPUST,Ï IttasÂÂBADDA nASI{LAII GLUS & &{tAffisVH. AilNNTSTBTOF PLIBN,TCWSFKS & HETJSI WAAIfi}A SflËAPKA CIVTT trHGTTTEENI$G NNTABITf,ETT s. B. 9$8 F. û. Ëox $|S$ lsletds: T0ûCEiII lfitû SûM Telex: T00 CED rfiOG $t[t ftIeloon: 80911- 80{Tâ - S0{fg lelephone: 802T1- 804?1- fôfld.7? gôorû*f,Uyê Iûogûdtrn$ l SourpJfs. Ituqdtgtm / Our Ref : cED/ ,T4û IAA Mogadishu, 17 .06 . 1984 To: Mr. T. Gedamu, Diteetor Planning and'Research Depat'tment African DeveL:proent Bank P. O. 8ox 1387 Abidjan - Ij*ory toajt Subject: Corncnenton ?ost EvalgLCjPJ Repo.rt.of Hargei€3 - Berbera Road '-' Dear Sir, l{e are pteased to acknonledge receipt of your letter datçd 5th !'Iarch 1984 ' - together with the text of the post evaluat.ion teport of tlargeisa Befbera Road project and pleased to inforrn you Êhat afeer examining thorougbly the inforrnations described in the text af the report, I,r€ are in agreeuent ûith Èhe content of the reporÈ except mi.nor pointe nhich are indieated below; PaEe 2 Under trérnsport sysÈeo, coastal Line of Souralia is 30360 tfurs and not 2,50û ltois. PaLq. 3 .. Under road aet work ( up date to 1984) I3:gg:l-tgggg Secondary_Roa-Êg Fgl:-a1/fqedejl-loads All Roade Paved 2525 35 '220, Gravel 350 215 - Earth t+?! 5098 Je,0oo 18519' lotal 4296 5348 12,t0ç 21644 Page 4 Under (ii) Hargeisa - Boraus Road (Gebile -' Nabadid Section) The second coutract of, llargeisa - Batama Road (Gebile - Nabadid section) had been awarded to Chinese finn Mee$rs. SlEfCO. Agreenent.betseen the Sorali Go'rernuent and SIETCO vas signe-d an 10/5/83, the duration of the contract is l? ænths for the ccmpletion of the above mentioned section. Hovevero due to deLay of the advance payeent of the tontrâctor, the projeet ie delayed approx. B aronthe, CompletLoa of. Gebile - Nabadid sectiotl ie expected to be completed early !'ebruary 1985. -).- 2l.., t. 'I Pgse 6 tlnder S (;.) The X.*ngt.h of !3*r6eteæ - Bcrr;:*.:saË.*ccti ie 13T g:cs a$d the lir* ta fug lCejale É* T9 Rr**" Fage 13 - ti*der p&Ës. 3.3.4" turin6g *pril 19SZ a c3rctror.eôarrging high iaeeurlty reÊa hit tbe Cuase*I lire of $ornaÏ.ir along Ëhe ret.? eea êsd as a resuÎ,t of ttre estrs orrtiaary irrÈensity oË sals 30 kme of Scrgei.sâ * B*rbera Ro*d sae eorgLetely uexhad out* hovever, the SonmÏ.i GovernseËrt hed iædiseeÏ.y *l3.oceted frrnd and ehe Civil F.ag{.ncering Depertûent hâd rer*conatructed the daængedse{:tiou rf the road to the design sraËdrrd of the project. îhe preeent eÈtur$tion of Eergeisa - Berbeta ftoad is in goad Btsnderd ës & trholë. H,indly sccepÈ Ehe asaursnce of qy highe*t eonsideratioûs. f airtrf À1i Eirector Dept, ccl iliaietry of Fin*nce tlo8adiehu - -1j .. ,. :. : . :âi;' 'f.,: