World Bank Document

Document of The World Bank FILE COpy

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 2329b-UR

STAFF APPRAISAL REPORT Public Disclosure Authorized SECOND HIGHWAYPROJECT

URUGUAY

Public Disclosure Authorized April 5, 1979 Public Disclosure Authorized

Projects Department Latin America and the Caribbean 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 = Peso (N$) US$1 = N$ 5.49 N$ 1 = US$0.18 N$ 1 million = US$182,000

Fiscal Year

January 1 to December 31

Weights and Measures

Metric British/US Equivalent

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 kilogram (kg) = 2.20 pounds (lb) 1 metric ton (ton) = 2.205 pounds

Abbreviationsand Acronyms

ADT Average Daily Traffic AFE Administracion de los Ferrocarriles del Estado AID Agency for International Development ANCAP Administracion Nacional de Combustibles, Alcohol y Portland ANP Administracion Nacional de Puertos CIF Cost, Insurance and Feeight CNPA Comision Nacional de Politica Aeronautica DAC Direccion General de Aviacion Civil DIGAN Direccion General de Aeropuertos Nacionales DNT National Directorate of Transportation DODE Directorate of Economic Development Works ERR Economic Rate of Return IDB Inter-American Development Bank MTOP Ministry of Transport and Public Works PLUNA Primeras Llneas Uruguayas de Navegacion Aerea RAM Road Analy8is Model SEPLACODI Secretarta de Planificacion, Coordinacion y Difusidn TAMU Transportes Aereo Militar Uruguayo TPU Transport Planning Unit UNDP United Nations Development Program Vialidad National Highway Directorate vph Vehicles per day FOR OFFICIAL USE ONLY

STAFF APPRAISAL REPORT

SECOND HIGHWAYPROJECT

URUGUAY

TABLE OF CONTENTS

Page No.

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

A. General . . 1 B. The Transport System ...... *...... 0-..g* 1 C. Transport Planning and Coordination ...... o ...... 4

II. THE HIGHWAY SUBSECTOR .. o*...... o...o....o 6

A. The Highway Network ...... 6 B. Characteristics and Growth of Road Traffic and Regulations ooo ...... 6 C. Highway Administration ...... 9...... 9 D. Highway Planning and Engineering ... o ...... 9...9 E. Highway Financing ...... 10 F. Highway Construction ...... o..o...... 10 G. Highway Maintenance ...... 10

III. PAST BANK ASSISTANCE TO THE HIGHWAY SUBSECTOR ...... o.. 12

IV. THE PROPOSED PROJECT .. o.o...... o...... 13

A. Objectives and General Description ...... 13 B. Cost Estimates and Financing .-. - ...... 13 C. Execution, Procurement and Monitoring ...... 16 Do Risks ...... ooo ...... o..o.... 17

V. RECONSTRUCTION OF ROUTE 8 .. o... .. 17

A. Description .17 B. Preparationrand Engineering 18 C. Consultant Services for Supervision ...... o ... 19 D. Project Impact ...... 19 E. Economic Evaluation .. o.o...... 19

This report is based on the findings of an appraisal mission which visited Uruguay during August/September 1978. The mission comprised Messrs. C-H. Mumme (Economist) and L. Revuelta (Engineer). The report has been edited by Miss V.R. Foster.

I This document has a restricted distribution and may be usd by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TABLE OF CONTENTS (Continued)

Page No.

VI. TRANSPORT SECTOR MANAGEMENT ...... 22

A. Preparation of a Four-Year Program of Rehabilitation and Reconstruction of Roads and a Bridge Improvement Program ...... 22 B. Engineering of Roads Identified Under (A) for the First Two-Year Tranche ...... 24 C. Transport Planning ...... 25

VII. AGREEMENTS REACHED AND RECOMMENDATION ...... 25

TABLES

2.1 Highway Network (1976) ...... 27 2.2 Gasoline and Gas-Oil Consumption...... 28 2.3 Highway Classification: Geometric Standards ...... 29 4.1 Estimated Schedule of Disbursements ...... 30 5.1 Design Standards of Route 8...... 31 5.2 Traffic Flows ...... 32 5.3 Economic Evaluation ...... 33 5.4 Incremental Analysis...... 34

ANNEXES

1. Consultant Services for Civil Works Supervision: Outline of Terms of Reference ...... 35 2. Vehicle Operating and Time Costs for Selected Sections.. 39 3. Four-Year Program for Rehabilitation, Strengthening and Reconstruction of Roads and Bridge Improvement Program: Outline of Terms of Reference ...... 45 4. Technical Assistance for Transport Planning: Outline of Terms of Reference ...... 49 5. Selected Documents and Data Available in the Project File 53

CHARTS

I. Organization of the National Highway Directorate (Vialidad) II. Implementation Schedule

MAP

IBRD 14225 - Uruguay Second Highway Project I. THE TRANSPORT SECTOR

A. General

1.01 Uruguay is a small fertile country with a population of less than three million, bordered by the two largest countries in South America, Argentina and Brazil. The country is endowed with a relative abundance of land, well suited to agriculture and grazing, and a pleasant temperate climate. The concentration of Uruguay's commercial activity and population in the Capital of Montevideo is reflected in the country's transport system. The interior, with relatively flat terrain, main rivers at boundaries, and low density agricultural activity, offered no obstacles to development of radial roads and rail networks, extending north, east and west from the metropolitan region around the seaport of Montevideo. Of the total freight traffic actually carried within the country in 1976, roads accounted for about 73%, rail 20% and water 7%.

B. The Transport System

(i) Highways

1.02 The principal problem of the road subsector as a whole is its aged and seriously deteriorated national network, notably the main international connections. The highway subsector is reviewed in detail in Chapter II.

(ii) Railways

1.03 Uruguay's railways were owned and operated by a British company for about 65 years (to 1949). The concession terms promoted construction of a large network, 3,000 km, radiating in five lines from Montevideo. To compete with the railway, the Uruguayan Government constructed roads paralleling many of the rail lines, and the British company ceased further investments after 1926. Consequently, the Uruguayan Government purchased an obsolete railway in 1949. The Administracion de los Ferrocarriles del Estado (AFE), a semi- autonomous Government agency, was set up in 1952 to operate the railways. AFE began replacing steam locomotives with diesel-electrics, but did not improve the obsolete permanent way and equipment. The intervening 26 years have seen a further deterioration in the condition of the railways through decapitaliza- tion. Inevitably, the quality of service has fallen markedly, being reflected in rapidly declining passenger and freight traffic. Several connections exist with the Argentine and Brazilian systems, but, in the latter case, because of difference in gauges, transshipment is necessary. By 1972, the railways reached, possibly, their lowest point. Permanent way was completely worn out (61% of rails were pre-1920) and ballast was largely non-existent; rolling stock was obsolete and diesel-electric locomotives were more than 20 years old; communications and signaling equipment were antiquated. Workshops were old, and maintenance equipment worn out and obsolete, making repair work inefficient; stations were old and decrepit. A recovery plan was drawn up in 1973, but without a concrete program of long-term investments; it included - 2 - purchase of rolling stock and modern workshop equipment. Some rolling stock has been acquired from the United States and Hungary. A program of mechanical processing of ballast is in progress, but no sleeper or rail replacementpro- gram is planned.

1.04 Despite its deterioratedcondition, the railway network still carries 20% of Uruguay's freight and passenger traffic. Therefore, although traffic has declined markedly, the railways retain a significantrole in meeting the country's transportneeds. Passenger traffic has halved since the early 1950s to the 1972 level of 343 million pass-km. No substantial long distance passenger traffic exists today, with the major part of traffic con- sisting of suburban commuter-typedemand, concentratedwithin 100 km of Montevideo. In this area, passenger numbers are still relatively substantial, and quality improvementsmight induce sufficient new riders to justify some moderate passenger service upgrading. Freight traffic had, by 1975, fallen to 290 million ton-km compared with 445 million ton-km in 1965. Principal items of freight are calcareous rock (not a high revenue earner by weight), rice, and, of lesser importance,other grains, sugar and fertilizers. The only lines with significanttraffic levels are the Salto-Artigas,Mercedes and Rio Branco lines. The new connection with the Argentine system at Salto has persuaded AFE to commence constructionof the 50-km connection of the Paysandu and Mercedes lines. AFE's cheap labor and second-handmaterials are minimizing the financial cost of the link. The link would facilitate through-trafficto Argentina and would provide an interconnectionon to Paraguay. However, its economics are unproved.

1.05 The managerial and operating procedures of AFE are antiquated and inefficient. This, combined with the poor physical condition of the system, has inevitably resulted in financial losses. These losses amounted to over US$7 million in 1976, a direct drain on the national Treasury and an increase of 45% over the 1975 deficit. The operating ratio in 1976 was about 1.9:1. A UNDP-financedtransport survey, for which the Bank was the executing agency, was conducted in 1978 (para 1.16). It concluded that all rail traffic could be carried more efficiently on roads. However, recognizing that complete closure of the rail system is politicallyremote, consultants SOTECNI (Italy) recommended a further study of limitation of passenger service to commuter lines near Montevideo and of specializedbulk cargoes such as minerals and fuels. The report provided, however, no economic analysis to suggest that retention of these services might prove justifiable. The proposed project will include, under the three- year program of technical assistance to strengthen and improve transport sector management, an intermodal comparison which will address itself, inter alia, to this problem (para 6.14).

(iii) Air Transport

1.06 Air transport has developed slowly in Uruguay, principallybecause of the concentrationof population in the Montevideo area, the country's easy topography resulting in an abundance of surface transportationand the short distances involved. Domestic air traffic has increased considerablyin recent years, but the total number of domestic passengers (60,000 in 1976) remains low. Internationaltraffic, mostly related to travel in the River Plata area, totaled about 620,000 passengers in 1976. Uruguay has only one functioning - 3 - international airport, Carrasco in Montevideo (2,450 m runway). The Government plans to lengthen the existing runway in the near future. A military airport to the north (Durazno) has been upgraded to emergency alternative status. Maldonado, near the tourist resort of Punta del Este, has a 1,500 m runway with unsatisfactory pavement and only daylight operations. Commercial airline operations are dominated by PLUNA, a state-owned company. PLUNA operates Fokker F27s, Fairchilds and smaller planes from Montevideo to seven towns in Uruguay. For limited international service, mostly between Montevideo, Punta del Este and Buenos Aires, PLUNA has Vickers Viscount 769s and 827s. Services to several domestic airports are provided in cooperation with TAMU (Transportes Aereos Militares Uruguayos).

1.07 Organizations involved in the administration of air transport are: Direccion General de Aviacion Civil (DAC); Direccion General de Aeropuertos Nacionales (DIGAN); and Comision Nacional de Politica Aeronautica (CNPA). The National Defense Ministry controls all these organizations, including PLUNA. DAC controls air operations, certification and licensing. DIGAN controls construction, maintenance, operation and administration of airports. CNPA was created in 1975 under the presidency of the Air Force Commander-in-Chief and includes the managers of DAC, DIGAN, PLUNA and the Director of National Transport in the Ministry of Transport and Public Works (MTOP). Its function is to advise the Commander-in-Chief on national air policy. In 1974, DIGAN prepared what is basically a works program totaling US$25.0 million for 1975-1984, including runway lengthening at Carrasco, proposals for upgrading Maldonado airport and various other runway lengthenings and upgradings, lighting, air stations and support facilities. The first four years of the plan envisaged significant upgrading of airports at Paysandu, Salto and Artigas which, in 1976, accounted for 77% of the domestic traffic. By the end of 1976, US$7.3 million had been spent, in general accordance with the plan.

(iv) Ports and Water Transport

1.08 Nearly 91% of Uruguay's foreign trade is handled by ports. Montevideo accounts for more than 70% of this traffic, while Colonia, Nueva Palmira, Fray Bentos and Paysandu handle the balance, mainly export of cereals and construction materials to Brazil and Argentina. An offshore mooring buoy berth has recently been installed at Punta Jose Ignacio to improve the facilities for import of crude oil.

1.09 Montevideo is a well sheltered port capable of receiving ships drawing up to 10 m. The port consists of 17 berths for ocean vessels built between 1905 and 1930; nothing much has been added since. With massive masonry wharves and structures, it operates on very old equipment over cobblestone pavement, but maintenance has been improved by the present administration. In 1977, it handled, in all, 2.9 million tons. This included 1.8 million tons of crude oil, discharged at the tanker berths of the oil refinery, which is being diverted to Punta Jose Ignacio. However, dry cargo traffic is expected to increase as a result of the Government's efforts to increase the export of grains and beef and to liberalize import restrictions. - 4-

1.10 Administracion Nacional de Puertos (ANP) is the national organization entrusted with the administration of ports. Created in 1916 as an autonomous agency, ANP is responsible to MTOP and functions under the direction of a Board of Directors composed of a president, vice-president, and one other member, all of whom are nominated by the Executive Power. The responsibili- ties of ANP include, in the case of all ports, the carrying out of loading and discharging operations, lighterage, towage, and salvage and, in the case of Montevideo only, the acquisition of the means necessary for providing maritime and land services, granting concessions for such services and fixing tariffs for port services (with prior approval of the Executive Power).

1.11 In the last few years, ANP has made considerable progress in certain areas, such as: the removal of the penalty surcharge on international traffic that had been levied by major shipping conferences, as a result of better port operations and improved vessel dispatch since 1974-1976; a reduction in the total number of port employees, from about 8,000 in 1972 to some 5,600 in mid-1978; and consistent reductions in total port operating costs in real terms between 1974 and 1978, notwithstanding increases in port traffic. Despite these improvements, ANP's costs are still very high, and efficiency is low.

1.12 ANP has a development program for the Montevideo port for 1978-1982 comprising a silo and shiploader for grain exports, a refrigerated warehouse for meat exports, cargo-handling equipment, dredge and related equipment, container area and handling equipment, tugs and river port improvements. ANP and the Bank are presently preparing a possible project for the Montevideo port. ANP has also considered the long term alternative of building a new deepwater port. However, this project has a low probability of materializing because it would be very costly and would depend heavily for its justification upon Argentine traffic being transshipped at the new port, thereby involving international issues.

1.13 The national maritime fleet of Uruguay consists of 19 vessels (ten seagoing and nine coastal), which include eight tankers, seven general cargo ships, two refrigerated cargo ships and two ferries. In 1975, about 26% of Uruguay's waterborne traffic was carried by the national fleet. Its share in the transport of petrol, oil and lubricants was slightly higher, at 31%. With the commissioning of the mooring berth at Punta Jose Ignacio, this share will go down unless large tankers are added to the national fleet.

C. Transport Planning and Coordination

1.14 MTOP was created in 1967 and has, in principle, responsibility for the development of a national transport policy, transport coordination and establishment of tariffs for transport services. The Ministry has some nominal jurisdiction over the investment plans and operational policies and practices of the modal agencies, AFE, ANP, PLUNA and DIGAN; however, in practice, their plans and policies are formulated independently of MTOP. Although AFE is subject to strict regulatory procedures, its management has been able, to date, to resist pressures to halt rail investment and scale down operations. ANP formulates its own investment program, financed mainly from its lucrative - 5 - ad valorem tariff revenues, and decides its operating policies. Air transport planning and operations are, again, fairly autonomous. The National Directorate of Transportation (DNT), created in 1975 within MTOP, provides the formal channel of contact from the operational agencies through to the Secretaria de Planificacion, Coordinacion y Difusion (SEPLACODI - the national planning body responsible for Uruguay's social and economic planning and coordination at the macro level). SEPLACODIprepares the five-year plans and is supposed to determine sectoral priorities. DNT provides road transport investment and expenditure proposals to SEPLACODI, but information on other modes generally comes to SEPLACODIdirectly from the responsible agencies.

1.15 Sector management and intermodal coordination have been neglected in the past. Lack of sectoral coordination has a long history, starting early this century with the parallel and often competitive development of the then foreign-owned railway and the national highway network. The almost complete absence, until the 1978 transport survey, of data on transport costs and demand has preempted any efforts in this regard. There was no discussion of the transport sector in the Five-Year Plan (1973-1977) despite the allocation of almost 20% of total public sector investment to transport.

1.16 In recognition of this deficiency, consultants SOTECNI completed a UNDP-financed, Bank-executed transport survey in May 1978 which the Government has used to establish needs and current priorities of the transport sector and to identify the present project. This survey identified as key development issues the need for: (a) strengthening national transport planning; (b) improvement in road rehabilitation and reconstruction, particularly of the international connections to Argentina and Brazil; (c) reductions of the rail- road network, its operations and deficit; and (d) port modernization.

1.17 As a first step toward improving transport planning and coordination, the Conclave 1/ of December 1977 created a Transport Advisory Council which is led by DNT and which includes AFE, PLUNA, DIGAN, ANP and SEPLACODI. This Council is preparing a national transport plan which is to be based largely on the 1978-1982 investment plan recommendations of the SOTECNI survey. A transport planning unit (TPU) of DNT within MTOP, staffed with counterparts from the SOTECNI survey, is presently assisting the Transport Advisory Council in preparing a national transport plan. Technical assistance to strengthen this unit is considered a high priority component of the proposed highway project (paras 6.13 and 6.14).

1/ A consensus-making meeting of leading civilian and military authorities. - 6 -

II. THE HIGHWAY SUBSECTOR

A. The Highway Network

2.01 The road network consists of some 50,000 km, of which 9,800 km are national roads maintained by MTOP. One-third of the national network is paved, and about 90% of this third lies in the radial system originating in Montevideo (Map IBRD 14225). The remainder of the network, 40,000 km, consists of secondary and feeder roads.

2.02 Road development really commenced in the 1930s, when the main network barely reached 1,000 km; it tripled by 1940 and reached 7,500 km by 1950. At that time, the basic network linking main economic and population concentra- tions and making internationalconnections was substantiallycompleted. The rate of expansion of the national network slowed considerablyin the 1950s, reaching about 8,800 km in 1960. From 1972 to 1976, the limited investment resources were directed more toward improving the network than toward new construction; in fact, since 1972, no additional national roads were constructed. Following a similar pattern, the secondary network was basically complete by 1950, and growth in the last 25 years has been minimal.

2.03 The coverage of the national road network is adequate; the principal problem is its age and seriously deterioratedcondition, notably on the main internationalconnections, which have considerableimportance given the country's reliance on trade with its neighbors. Lack of timely periodic maintenance during the long period of economic stagnation has contributed significantlyto this deterioration. The departmentalroad network needs expansion mainly in the southwest, center, north and northwest Departments, which are areas with high agriculturalpotential. Only 2,000 km (5%) of the departmentalnetwork are paved; 4,000 km are gravel and 34,000 km are earth roads (Table 2.1). These departmentalroads are of low standard and poorly maintained and offer restricted serviceabilityduring the rainy season. Recently, Vialidad has been helping the Departments to improve this situation (para 2.20).

B. Characteristicsand Growth of Road Traffic and Regulations

2.04 The traffic counts conductedby SOTECNI during 1976 provide the most comprehensiveinformation yet available on road traffic in Uruguay. They showed average daily traffic (ADT) of 500 to 1,000 vehicles per day (vpd) on most major highways, ranging up to 4,500 vpd near Montevideo. Traffic growth in Uruguay has been low over recent years. High average vehicle age, deterioratingroad conditions, rising fuel prices and the overall state of the economy have apparently restricted countrywide growth of traffic to negligible proportions. National consumption of gasoline stagnated from 1957 to 1972 and then dropped significantlyby 1976. Consumption of diesel fuel, however, has continued to increase, implying a change in relative vehicle usage toward heavy vehicles (Table 2.2).

2.05 Informationon the composition of traffic in Uruguay is sparse. The major counts were simply vehicle counts, with no differentiationby type of vehicle. Only partial informationwas available for Montevideo, and negligible data were available for the rest of the country. Based on some very partial and somewhat out-of-date informationrelated to several routes, SOTECNI estimated the national average road traffic compositionas: 58% light vehicles; 36% trucks; and 6% buses. The most recent informationfor 1976 suggests that about 78% of all passenger traffic moves by road. Of the total estimated freight traffic for 1976 (1,880 million ton-km), about 1,370 million ton-km (73%) moved by road.

2.06 In the road transport industry, trucking companies with principally internationaloperations are few. They operate truck fleets which are reason- ably modern but smaller than the average for Latin America. However, international freight rates offered by Uruguayan firms are competitivewith those of Argentine and Brazilian operators. Trucks owned by companies operating mainly in Uruguay on short and medium haul trips are generally rather old. Short distances, mild climate, easy terrain and import restrictionsare the main factors accounting for the longevity of the equipment. The level of service offered and the capacity of the truck fleet is broadly adequate for the demand. Bus services are adequate for the country, with four interdepart- mental service companies owning fleets of over 40 buses each. The average age of the bus fleet is high, with half of the vehicles pre-dating 1960. The tourist bus fleet is reasonablymodern and efficient.

2.07 Uruguay requires a systematic nationwide collection of traffic counts to plan maintenance,rehabilitation and reconstructionof its road networks. Establishmentof a number of permanentand periodic counting stations is needed as well as a series of origin and destination(O&D) surveys to provide information on year-round distributionand flow of traffic. Developmentof a permanent traffic counting program and an implementationschedule would be one of the elements to be developed under the three-year technical assistance component to strengthen and improve transport sector planning (paras 4.02, 6.13 and 6.14).

2.08 Vehicle fleet statistics have not historicallybeen collected on a regular basis; therefore, little is known about the growth of the fleet (particularly the car fleet) except that it has been very low. The size and composition of the fleet, particularlyoutside the Montevideo region, remain uncer- tain. Available data are based on registrationsof vehicles, but, since there is no routine procedure by authoritiesfor cancellationof registrationfor vehicles no longer in use, the official statistics do not accurately represent the active vehicle fleet. The Government is trying to improve vehicle regis- tration procedureswith the establishmentof a central vehicle registry. Departmentswould continue being in charge of collecting registrationfees but would supply data on fees and vehicles to DNT, which would produce national vehicle fleet statistics. Using the Montevideo municipality'srecent statistics based on local annual license fees, SOTECNI estimated the national light vehicle fleet at 133,000,with about 50% more than 20 years old. The truck fleet is estimated at 40,000, with 50% over 20 years old and 85% with less than 5-ton capacity. However, the internationalfleet operated by the major national haulers appears adequately modern.

2.09 The quantitativeand price restrictionson vehicle imports are formidable. A decree of 1970 made compulsory the import of vehicles in kit -8- form. Kits may be imported only if there is a proportional compensatingex- port value of Uruguayan manufacturedvehicle parts. Given the very small size of Uruguayan plants, this is a most inefficientpolicy. However, aside from the economic effects, the obviously limited export opportunitieshave restricted imports, and, while import of fully assembled cars continues through various channels, the numbers are quantitativelysmall. Taxes on vehicle kit imports are very high. Various import duties and charges, as well as the value added tax incorporatedin 1974, representedan overall tax of 90% to 105% of the CIF cost. By 1976, this tax burden was reduced to about 60-65% of the CIF cost, but was still sufficient to limit import of vehicle kits to about 5,000 units. New registrationsin the Montevideo area for 1976 totaled only 3,600 vehicles.

2.10 Road transport is nominally regulated by DNT, which is under the responsibilityof MTOP; however, regulation is almost negligible. DNT is responsible for developing appropriate regulatory policies to obtain efficiency in road transport and administers licensing procedures for all vehicles. These are effective only in the Montevideo region, where computer control is available. The trucking industry at both domestic and internationallevels is highly competitive with completely free entry. Freight rates for internationaltrips are unregulated,being decided by bidding on a job basis. For local freight, lack of regulation and large numbers of small companies have resulted in freight tariffs often below cost and consequent rapid turnover of operators. Bus services are fairly closely regulated, with licenses being issued for three classes of operation -- long distance,medium distance (up to 100 km) and tourist. Scheduled internationalservices are undertaken through special permit by certain long distance carriers. The rates for buses are set by DNT and seem reasonable, and service levels are generally good.

2.11 Overloading of vehicles does not appear a serious problem in Uruguay. However, as the state of the main international highways, including bridges, continues to deteriorate and as long-haul modern truck traffic grows, the road network will become more sensitive to vehicle loads. Uruguay's vehicle weight control program is satisfactory. There are five fixed scales and 12 portable scales (the last ones recently acquired with an IDB loan). A countrywideweight control program is being operated in an adequate manner.

2.12 The present axle weight control law limits single axle weight to 10 tons, which is about the same as for Argentina (10.5 tons) and Brazil (10 tons). However, Uruguay limits gross vehicle weight to 36 tons, significantly below Argentina and Brazil, where gross loads are permitted up to 45 tons and 40 tons respectively. While not directly affecting axle load- ings, this regulation does tend to restrict the average size of Uruguayan trucks and, since it applies also to Argentine and Brazilian vehicles operating in Uruguay, it causes a reduction in the capacity and loading of these trucks. Off-loadingat the internationalborders to meet the 36-ton limit is frequently enforced. This regulation cannot be amended because of the large number of obsolete bridges along the Uruguayan road network. The proposed project includes the preparationof a bridge improvementprogram which would also assess the proper limit to be set on gross vehicle weight and would review the efficiency of the countrywide vehicle weight control program (paras 6.01 and 6.07). -9-

C. Highway Administration

2.13 For administrative purposes, the highway network is classified into national and departmental networks. The National Highway Directorate (Vialidad) within MTOP (Chart I) is responsible for planning, constructing and maintaining the national highway network through its headquarters in Montevideo and nine regional offices. Outside the direct control of Vialidad is the departmental road network, which is controlled by the Municipal Admin- istrations of each Department for construction and maintenance. All highway construction by Vialidad is performed under contract with private construction firms. Except for the major highways, Vialidad prepares all detailed engineering and supervises construction. Maintenance of highways is performed by Vialidad, using its own labor force and equipment. Vialidad lost a considerable number of professional staff because of lack of construction activity during the 1950s and early 1960s. Consequently, when major internationally financed works were being prepared in the early 1960s, a new Directorate of Economic Development Works (DODE) was created within MTOP (1964) to execute these works. Staffing of DODE consisted mainly of younger, more capable engineers than those employed by Vialidad. The large works on Route 5 (IBRD) and on Route 26 (IDB) were carried out using modern construction techniques. Supervision by DODE, with consultant assistance, was good. With the completion of these projects, DODE remained without a specific function and, in 1976, was absorbed by Vialidad. The present capabilitiesof Vialidad, mainly after the absorption of DODE, are satisfactoryeven if some scarcity of senior staff is still apparent.

D. Highway Planning and Engineering

2.14 Although five-year investmentplans were prepared for 1968-1972 and 1973-1977, there was no economic evaluation and, essentially,no coordination with other transport agencies,most significantlythe railroads. No economic justificationswere prepared for road projects until the SOTECNI survey, and the plans were drawn up on the basis of engineeringrequirements only. Consultants SOTECNI concluded that, over the period 1978-1982, a highway investmentprogram of about US$310 million (in 1976 prices), would be economicallyjustified. While it is very unlikely that an amount approachingthis would be expended on roads, it remains apparent that investment in roads over the next five years would be very substantial. Consequently,planning of highway rehabilitation, strengtheningand reconstructionis considered a high priority component of the proposed project (para 6.01).

2.15 In 1952, Vialidad adopted a set of road design standards, including bridges and culverts. These were changed in 1973 to take into account the characteristicsof modern vehicles (Table 2.3). Up to now, no specific standardshave existed for pavement design. These would be developed,however, under the four-year program of rehabilitation,strengthening and reconstruction (para 6.03). Vialidad has increasinglyused consultants for engineering of large- and medium-size projects,relying either on joint ventures of Uruguayan and foreign firms or solely Uruguayan. Design work performed by consultants has been, in general, satisfactory. 10 °

E. Highway Financing

2.16 Over the period 1972-1976, about 20% (averagingUS$3.6 million per year) of the national highway capital expenditureswas financed from external sources. The remaining funds came from MTOP's budget. Total road user revenues were growing at about 15% per year during this period and, by 1976, had reached over US$100 million, of which US$80 million was derived from fuel taxes 1/. MTOP expenditureon roads, i.e., for constructionand maintenance, was less than half the level of user charges, reaching about US$43 million in 1976. Total expenditureby MTOP on roads has been lagging behind revenues actually earmarked for roads by about 10% in recent years. About 42% of the fuel taxes are earmarked for MTOP, and, in 1976, this, plus revenue from minor user taxes, representedabout 75% of MTOP income. Of the remainder, 17% came from the national budget and 8% from external sources.

F. Highw^ayConstruction

2.17 All road constructionby Vialidad is done under contract with private contractors. Contracts have been performed satisfactorilybut with some delays in work completion. The constructionof major highways, undertaken with foreign financial assistance (Route 5 with IBRD, Route 26 with IDB and Route 9 with AID) was handled by DODE, which was created specificallyfor this purpose because of Vialidad's inability, in 1964, to execute large projects; however, its continued existence alongside Vialidad involved unnecessary duplication of effort and resources (para 2.13). DODE performed satisfactorilyand obtained good quality control.

2.18 Constructionis usually carried out in short sections, allowing the participation of national firms which generallyhave limited capacity. Since 1968, all contractorshave been required to register in MTOP's General Register of Contractors. Firms are classified according to field of specialization, financial capacity, availabilityof equipment, annual work capacity and past performance. The total capacity of Uruguayan contractorsis about N$ 400 million/year (about US$70 million/year). Only two contractorshave a capacity above N$ 40 million/year (US$7 million/year). Performance of large and small contractors is, in general, satisfactory. Unsatisfactory performances in civil works have generally been due to lack of adequate supervisionor delays in payments.

G. Highway Maintenance

2.19 Maintenance of all national highways is performed by Vialidad, using its own equipment and a manpower of about 2,100 workers and 40 engineers. Maintenance is carried out by nine regional offices subdivided into 26 dis- tricts. Each regional office is allocated its own maintenance equipment and has a field workshop for routine equipment maintenance. The central workshop, located in Colon (on the outskirts of Montevideo),performs all major equipment repairs and is the national center for maintenance training.

1/ The retail price of gasoline is US$0.39 per liter, of which about 43% is taxes, and the retail price of diesel is US$0.20 per liter with a tax content of 24%. - 11 -

2.20 Routine maintenance of trunk roads is generally acceptable. Periodic maintenance has historicallybeen unsatisfactory,mainly because of budgetary neglect and poor planning. Maintenance of the departmentalhighways is inadequate, and some pavements have deterioratedto the point at which passage becomes difficult during the rainy season. However, several agreementshave been reached recently between Vialidad and the departmentalauthorities to help improve their maintenance practices, such as provision of aggregates, asphalt and technicalstaff. Although the organizationalsetup for maintenance of roads is generally adequate, the main problems are lack of equipment and lack of an efficient labor force.

2.21 Acquisition of new equipment and increase in labor efficiency are therefore of high priority. ConsultantsHarris (USA) completed a study in 1977 for maintenancerequirements under an IDB-financedgrant. This study identified and recommendedequipment requirementsfor highway maintenance, reorganizationof Vialidad and training needs. Implementationof the study's recommendationshas already started, and highway maintenance (particularly periodic maintenance)is now recognized by the Government as a matter requiring continuingattention and budgetary support. Acquisition of new equipment (US$4 million equivalent)financed under the IDB loan 1/ is under way. Vialidad is also negotiatingwith equipment dealers in Uruguay for the acquisitionof an additional US$6.0 million worth of equipment. The operationalcapacity of Vialidad's existing training unit has been improved. Regular training courses have started for foremen and equipment operators in the centralworkshop of Colon, and courses in equipment maintenance are being prepared for implementationat headquartersand at the regional workshops. Training courses planned over the period 1979-1980will reach about 1,000 persons. A management accounting and informationsystem would be implemented following the recommendationsof a study carried out by consultantsArthur Young. During negotiations,agreement was reached with the Government that Vialidad would reorganize its accounting system to show, from 1980 onward, itemized expendituresof routine and periodic maintenance, minor improvements,rehabilitation, major improvements,reconstruction and construction.

2.22 Maintenance expendituresincreased from US$5.2 million in 1972 to US$22.9 million in 1976. These expendituresinclude rehabilitationworks, which have been increasing because of the rapidly deterioratingstate of the network. Only US$8.7 million was estimated to have been spent on routine maintenancein 1976. Of total maintenance and rehabilitationcosts in 1976, 55% was devoted to labor, 28% to fuel and lubricantsand less than 5% to equipment. During negotiations,agreement was reached that the Government would exchange views annually, during the period of project implementation,with the Bank on (a) the progress in the implementationof the road maintenanceprogram financed with the assistance of the IDB loan and (b) its overall maintenance program and related budgetary proposals in order to review, in particular, (i) the programs of periodic maintenancefor paved roads; (ii) renewal and acquisition of maintenance equipment; and (iii) assistance to the Departments for road maintenance.

2.23 Periodic maintenance on the national network, such as the renewal of the wearing course of paved roads, has improved considerablyduring the last year and is mostly being carried out by Vialidad using new and recently repaired equipment;this improvement is mainly due to the implementationof

1/ IDB Loan No. 391 of US$16.1 million, dated March 14, 1974. - 12 -

the Harris study's recommendations. Particularlygood results have been obtained by the two regional offices of Tacuarembo and Melo, with workshops acting as regional equipmentpools for maintenanceand overhaul of equipment, avoiding excessive dependencyupon the central workshop of Colon. Vialidad's goal is to obtain an adequate maintenance (routineand periodic) of the national network by the end of 1982.

III. PAST BANK ASSISTANCE TO THE HIGHWAY SUBSECTOR

3.01 Bank Group involvementin the Uruguayan transport sector has been limited. The Bank's only operation in the sector was a highway loan made in 1963 (Loan 324-UR, US$18.5 million equivalent)to assist financingof improvement, of Route 5 from the outskirts of Montevideo (Progreso)to Rivera on the Brazilian border (about 500 km), strengtheningof highway maintenance,including purchase of equipment, and a highway planning study. A final Supervision Report was prepared September 29, 1972.

3.02 The improvementof Route 5 consisted of widening, paving, raising the grades of certain sections frequently inundated, replacing of inadequate drainage structures,and replacing and widening of a number of bridges. The works were satisfactorilycompleted in 1971, but five years later than the appraisal estimate. This delay was due to incomplete engineeringdesigns, difficultiesin obtaining satisfactorybids and poor contractorperformance in two sections where part of the contractshad to be reassignedto other contractors. Cost overruns, mainly caused by the five-year delay, amounted to about 14%. Actual traffic data showed an average increase of about 50% over the appraisal estimates for 1971.

3.03 The maintenanceprogram comprised the purchase of highway maintenance equipment (US$3 million equivalent),improvement of the cost accounting system, reorganizationof warehouses, and an adequate distributionof maintenance equipment among the main, regional and district workshops. Equipment purchasedwas put to use, and the maintenanceof the national road network improved considerably. With the help of consultants,the quality of maintenance work performed in Vialidad'smain workshop in Colon and the regional and district workshops was raised to a satisfactorylevel, and overall organization was improved. The maintenancestudy carried out by INGEROUTE (France) in 1966 formed the basis for the organizationof a regular maintenance program in Uruguay. This program is being continued under financingfrom other internationalagencies.

3.04 The first Bank highway loan to Uruguay had a significantimpact on the operationalcapacity of MTOP through the creation,as suggestedby the Bank, of DODE in 1964. This new departmentwas in charge of all civil works financed by internationalagencies. Recently,DODE has been absorbed by Vialidad (para 2.13), thus increasing considerablyVialidad's operational capacity. The highway planning study prepared by consultantsINGEROUTE in 1966 provided the basis for Vialidad's five-yearinvestment plan 1973-1977.

3.05 Following a transportsector review undertakenin 1974, the Government obtained UNDP financingto carry out a comprehensivesurvey of the transport - 13 - sector. The survey was entrusted to consultantsSOTECNI with the Bank acting as Executing Agency; the final SOTECNI report was submitted in 1978. The survey pointed out the need for improvementin sector management and for systematic and coherent programs for rehabilitationand reconstructionof main national roads.

IV. THE PROPOSED PROJECT

A. Objectives and General Description

4.01 The proposed project would provide a basis to reestablishworking relationshipsin the highway sector and to prepare further improvementsin the direction suggested by the Transport Survey; in particular,it would assist the Government in improving the integrationof the northern area of the country and neighboringBrazil to Montevideo, Uruguay's capital and major port, and would strengthen the transport sector management,especially with regard to planning and programing of rehabilitationand strengtheningof road pavements and bridges.

4.02 The project would consist of:

(a) Reconstructionof Route 8 (140 km) between Punta Rieles (Km 13 from Montevideo) and Arroyo Marmaraja (Km 153) including:

(i) civil works by contractors;and

(ii) supervisionby consultants.

(b) Strengtheningof Transport Sector Management and Studies including:

(i) preparation of a four-year rehabilitationand reconstruction program of roads and a bridge improvementprogram;

(ii) detailed engineering of roads for the first two-year tranche of the program developed under (i) above; and

(iii) technical assistance to strengthen and improve transport sector planning.

4.03 Implementationof the project is expected to take about three-and- one-half years (April 1979 to December 1982). A detailed description,economic evaluation, and specific covenants concerningthe project are provided in Chapters V and VI.

B. Cost Estimates and Financing

4.04 The total cost of the project is estimated at about US$61.2 million equivalentwith a foreign exchange component of US$31.5 million (about 51%). - 14 -

The proposed Bank loan of US$26.5 million would finance the full estimated foreign exchange component of project components except civil works, for which the Bank would finance 42% of the costs against an estimated foreign exchange component of 51%. The Government confirmed, during negotiations,that it would finance the local cost of US$29.7 million equivalent. The Government expects to obtain financing from a private bank to finance the US$5.0 million balance of the foreign exchange component. Such financingwould be applied to civil works and would result in 51% of it being financed externally. Should the private bank loan not be made, the Government has undertaken to finance this US$5.0 million of foreign exchange requirement. This was confirmed during negotiations. There is a possibility that UNDP may finance US$0.4 million of the technical assistance to strengthen and improve transport planning. This project component would then be carried out as a UNDP project with the Bank acting as executing agency. The foreign exchange component for this technical assistance is estimated at US$600,000 equivalent. If UNDP funds are forthcoming, an equivalent amount of the proposed loan would be canceled.

4.05 In the event that private bank financing of US$5.0 million is obtained, the Bank would seek the agreement of the Government to amend the Loan Agreement so as to include the usual provision for co-financing. Such amended Loan Agreement should include: (a) a cross-defaultclause; (b) a skewed amortizationschedule of the Bank loan so that roughly constant semi- annual amortizationpayments would amortize both loans; and (c) a provision that disbursementsfor civil works would be conditionedon the co-lender's loan having been fully disbursed for the foreign exchange component of civil works before drawing on the Bank loan (this is expected to occur within the first year of the project period). In addition, the amended Loan Agreement should require the Borrower to furnish to the Bank quarterly reports certifying that the private bank funds have been used to finance eligible project expenditures.

4.06 A summary of the estimated project costs is given on the following page. Base costs are estimated at April 1979 prices. The estimated costs of reconstructionof the Route 8 Punta Rieles (Km 13) to Arroyo Marmaraja (Km 153) section are based on detailed engineeringprepared by consultant INVIAL (Uruguay)and current unit prices for similar works (para 5.05 and Table 5.1). Cost estimates for consulting services and technical assistance are based on recent contracts or man-month rates for similar services provided by local and foreign firms.

4.07 A contingency allowance of 10% has been included to cover increases in quantities usually expected in road works. About 12% of base costs plus physical contingencieshas been allowed for price variations assuming inflation rates as shown at the bottom of the cost table. These rates reflect recent worldwide estimatesand are relevant to Uruguay. Since it is the Government's policy to adjust the Peso/US$ exchange rate in line with respective inflation rates, and since constructionprices in Uruguay have moved in line with local inflation rates, a separate calculation for domestic prices has not been considered necessary.

4.08 Estimates of the foreign exchange component for civil works are based on an analysis of major constructioncosts (fuel, asphalt, equipment, - 15-

URUGUAY

SECOND HIGHWAYPROJECT

Project Cost Estimates and Financing

Foreign Exchange Bank US$ million(April 1979) Component Participation Local Foreign Total % US$ m % I. Reconstruction of Route 8 (140 Km)

(a) Civil works 22.3 23.2 45.5 51 19.3 42

(b) Supervision 0.9 0.9 1.8 50 0.9 51 Subtotal 23.2 24.1 47.3 20.2

II. Transport Sector Management

(a) preparation of a four-year rehabilitation and reconstruction program of national highways and a bridge improvement program 0.4 0.4 0.8 50 0.4 51

(b) detailed engineering of the first two-year tranche of the program developed under II (a) 0.5 0.5 1.0 50 0.5 51

(c) technical assistance to strengthen and im.prove transport sector planning 0.2 0.6 0.8 80 0.6 80 Subtotal 1.1 1.5 2.6 1.5

Base Cost (April 1979) 24.3 25.6 49.9 21.7

Contingencies

(a) Physical (10% of I (a)) 2.2 2.3 4.5 1.9

(b) Price escalation 1/ (about 12% of basic cost plus physical contingencies) 3.2 3.6 6.8 2.9 Subtotal 5.4 5.9 11.3 4.8

Total 29.7 31.5 61.2 51 26.5 43

1/ Based on the following estimated annual price increase: 7% for 1979-1982 - 16 -

labor and overheads),which include taxes and duties (16% of total cost). It was assumed that the works would be executed by firms from bordering countries working either independentlyor in joint ventures with local firms, as has been the case for recent similar projects and for the previous Bank highway project. A foreign exchange component of 51% has been estimated. Consulting services for civil work supervision,for the four-year rehabilitationand reconstructionprogram and bridge improvementprogram and for detailed engineering have an estimated foreign exchange component of 50% since they will be provided by local consultantswith limited input of foreign expertise. Technical assistance for transport sector planning is expected to be provided mainly by foreign experts. Past experienceindicates that 80% of the costs would be in foreign expenditures. The cost per man-month for consulting services and technical assistance is estimated to range from US$3,000 to US$9,000, includingsubsistence and travel costs, with an average of US$6,000 per man-month. The various consultingservices and technicalassistance would require a total of about 735 man-months.

4.09 Disbursementsof the Bank loan (Table 4.1) would be made against normal documentationas follows:

(a) 42% for civil works;

(b) 51% of total expendituresfor consultingservices for the rehabilitationprogram and bridge study and for detailed engineeringof selected road sections; and

C. Execution,Procurement and Monitoring

4.10 The execution of the project would be the responsibilityof MTOP. Vialidad would be the executing agency for all project componentsexcept the transport sector planning component,which would be under DNT. The Government would, not later than September 1, 1979, appoint a project coordinatordirectly responsible to the Minister of Transport and Public Works to serve as liaison between Vialidad and all other agencies involved in the execution of the project. This was agreed during negotiations. The project implementation schedule, shown in Chart II, was reviewed and agreed during negotiations.

4.11 Procurementunder the project would be in accordancewith the Bank's "Guidelinesfor Procurement' (March 1977). Civil works for reconstructionof Route 8 would be carried out on the basis of unit price contracts awarded in accordance with internationalcompetitive bidding proceduresto prequalified firms. For bidding purposes, the works would be divided into four lots, which would be bid simultaneously. The estimatedvalue of individual contracts would range from US$5 to US$10 million, so that medium-capacitylocal contractors would have an opportunityto bid. However, large contractorswould be allowed to bid on one or more lots. During negotiations,bidding and contracting procedures and details were reviewed and agreed. Terms of reference for consultingservices and technical assistancewere also reviewed and agreed during negotiations. The qualifications,experience, terms and conditions of employment of consultantsselected for these assignmentswould be acceptable to the Bank. This was confirmed during negotiations. - 17 -

4.12 The principal indicators for monitoring the project are identified in the implementationschedule (Chart II). In addition, the IDB-financed highway maintenance program and the Government'sannual program and budget for road maintenance,starting with the year 1980, would be monitored (paras 2.21 and 2.22). Indicators to measure annual maintenance performance would include fleet availabilityand utilization,grading of unpaved roads, and kilometers of roads regraveled, resealed or overlayed. The indicators to be used for monitoring the project were discussed and agreed during negotiations. The Government would be required to prepare a project completion report within six months of the loan closing date.

D. Risks

4.13 Particular attention was given during project preparationto the major sources of implementationproblems encountered in past highway construction projects in Uruguay. The procurementphase of the project presents no special risk. Past experiencewith similar projects in Uruguay, however, shows that delays in project implementationof one or two years have occurred, mainly because of inadequate supervision. The arrangementsand the schedule for the tenderingphase of the project were carefully reviewed and agreed. This, together with the early engagement of consultantsfor supervision,would reduce the risk of delay in the initiation of the project. Sensitivity tests carried out on the delay hypothesis showed that the justificationof the project would not be affected (para 5.20).

V. RECONSTRUCTION OF ROUTE 8

A. Description

5.01 Route 8 is one of the main roads linkingMontevideo to the interior and is an important connector to Brazil. It extends from Montevideo to the Brazilian border at Acegua (441 km) where it connects to the Brazilian highway system. At Treinta y Tres (Km 271), Route 18 branches off Route 8 and crosses the border at Rio Branco (207 km) to form another connection with the Brazilian system. The Bank project comprises 140 km of Route 8 from the outskirts of Montevideo (Map IBRD 14225); the remainder of Route 8 is being rehabilitated and reconstructedwith the assistance of an IDB loan. Montevideo, the capital, * contains about 50% of the country's population and is the largest urban center. The port of Montevideo handles over 70% of Uruguay's foreign trade. Given the country's reliance on trade with its neighbors and the central role of the port of Montevideo in Uruguay's export-led developmentpolicy, the internationalconnections such as Route 8 assume considerableimportance.

5.02 The present road has a relativelynew four-lane divided highway (13 km long) ending in Punta Rieles on the outskirts of Montevideo. The rest of the road is an obsolete two-lane structureoriginally built at the begin- ning of the century following the alignmentof the tracks of animal-drawn vehicles. Its design standards are far below those required for present heavy traffic levels (para 5.11). The pavement and shouldersalong the 140 km in the project are in a very deterioratedstate, despite frequent and costly repairs, and are hazardous, especiallyduring wet weather. The characteristics - 18 - of the present road are shown in Table 5.1. The feeder roads in the area of influenceof Route 8 are generally adequate for the current and foreseeable level of activity.

B. Preparationand Engineering

5.03 In May 1977, the Government identified the reconstructionof Route 8 as its highest priority during the course of the UNDP-financedand Bank- executed Transport Survey. The SOTECNI final report confirmed the high economic priority of the Route 8 project and establishedrehabilitation, strengtheningand reconstructionof main intercity and internationalhighways as the major requirementsof a sound transport investmentprogram and the highest prioritiesin the highway subsector. These recommendationscoincide with Government priorities.

5.04 Detailed engineeringfor reconstructionof the 140 km along Route 8 was prepared in 1975 and updated between March and August 1978, following the recommendationof Bank staff. The updating, carried out by consultants INVIAL (Uruguay),included a detailed economic evaluation of alternativedesign standards and a complete review of the final engineering. Bank assistance in project preparationcontributed to more than 17% reduction in estimated cost and establishedsounder design concepts. Further minor adjustmentsneeded to reflect additionalreductions agreed during the appraisal mission were satisfactorilycompleted in mid-March 1979. These adjustmentsinclude a more modest pavement structure on the carriagewayand shoulders,reduction in shoulder width and eliminationof the bypass at Minas.

5.05 The 140 km of the project from Punta Rieles to Arroyo Marmaraja would be constructedas a modern road, of which the first 17.5 km, extending the existing four-lane access road to the northeast of Montevideo,would be upgraded to four-lane standards. The remainderwould be reconstructedto two-lane standardswith design and structure characteristicsclosely reflect- ing projected traffic volumes which decrease from about 3,000 vpd (over 50% heavy vehicles) to about 400 vpd as one moves away from Montevideo. For the purpose of analysis and design, the road has been divided into nine sections. Design standards for the nine sections, as well as constructioncosts, are shown in Table 5.1. The terrain crossed by the road is mostly undulating, which does not present major earthwork problems. However, the soil subgrade characteristicsare quite unfavorable. There is also a scarcity of suitable aggregates for pavement courses and structures. The new alignment parallels the existing one except on some stretches,where an entirely new horizontal alignment was formed. The gradients have been improved considerablyand, in general, are completelydifferent from those of the existing road. The four- lane section has no bridges, but bridges are relativelyabundant after Pando along the two-lane road; none of them, however, is expected to present special difficulties. Cost estimates,based on detailed engineering,range from about US$630,000 per km for the first section (four-lane)to US$290,000per km for the two-lane sections. - 19 -

C. ConsultantServices for Supervision

5.06 Vialidad,which has recently been strengthenedby the absorption of DODE (para 2.13), directly supervises highway constructioncontracts; however, it still suffers from some scarcity of senior technical staff. Because of the extent of the roadworksunder the proposed project, Vialidad would engage consultantsfor supervisionof civil works.

5.07 About 250 man-months of professionalservices would be required, startingwith the evaluation of the respectivebids and ending with the pro- visional reception of such civil works. During negotiations,it was agreed that contractingof these consultantswould be a condition of loan effectiveness. It was also agreed that Vialidad would provide, within its Department of Works, at least two experiencedand qualifiedengineers as counterparts. Annex 1 provides outline terms of referenceand cost estimates for consulting studies.

D. Project Impact

5.08 Route 8 to Acegua and its extension to Rio Branco constitute significant highway links with Brazil. The proposed highway project would provide less costly and more reliable transport services to its area of influence, which comprisesparts of the six eastern provinces of the country. This area produces significantproportions of the national output of rice, cattle and cereals. The improved Route 8 would facilitate the export of cement produced near the city of Minas to the Brazilian state of Rio Grande do Sul and would also help the Uruguayan fishing industry to improve the distributionof its perishable produce to the interior of the country and to Brazil. Montevideo would benefit from more fluent and less costly transportation,which would contribute to the developmentof its industry and enhance its role as Uruguay's leading port. The civil works of the project are expected to provide jobs for about 1,500 workers during the constructionperiod.

5.09 The proposed project would have no adverse environmentalimpact and would provide safer driving conditionsto cars, trucks, and buses using the road as well as to pedestriansand non-motorizedvehicles using the road sides.

E. Economic Evaluation

(i) General

5.10 The economic evaluation concentrateson the civil works component of the project (includingsupervision), which represents about 95% of the estimated project base cost. The evaluationwas carried out by means of the Bank's Road Analysis Model (RAM). A user's manual describesin detail the methodology used in the RAM. 1/ The evaluation considered the economic costs of civil

1/ Bank's Road Analysis Model (RAM), User's Manual, September 1976. - 20 - works, including.supervisionand physical contingencies,and also costs of maintenance,vehicle operation, time and accidents in the "without" and "with" project alternatives.

(ii) Traffic

5.11 Existing traffic volumes on Route 8 and its connectingroads were establishedthrough traffic surveys conductedby consultantsINVIAL (Uruguay) in 1978, which is the base year (Table 5.2). Current traffic varies from 3,000 vehicles per day (8,500 passenger car equivalent)to 400 vehicles per day (1,500 passenger car equivalent)between Punta Rieles and Arroyo Marmaraja. The proportionof trucks and buses ranges from 51% to 68%. Diverted traffic for light vehicles and trucks was assumed to be 15% for sections 1 and 2 and 2% for sections 3, 4 and 5. Traffic diverted from rail in the zone of influence of the project road is not significantand has not been considered in the economic evaluation.

5.12 The growth of normal traffic was estimated for a 22-year period (1980 to 2001). It ranges from 2.7% per year to 3.2% per year. These growth rates were based on estimated growth of population and per capita income in the area of influence of the road. Compared with previous traffic estimates made (e.g., the 1978 Uruguay Transport Survey), they can be considered fairly conservative. The proposed project, through reduction in vehicle operating costs, would, depending on the relevant section and on the type of vehicle, generate a traffic increase of 2% to 15% of normal traffic.

(iii) Benefits from the Project

5.13 Quantifiablebenefits from the proposed highway constructioninclude the direct benefits derived by highway users, i.e., vehicle operating cost savings, time savings and accident savings.

5.14 The new Route 8 would allow higher average speeds, which would reduce vehicle operating costs significantly. Estimatesof vehicle operating costs were prepared by the consultantsbased on de Weille, 1/ modified according to their experiencein Uruguay and using Uruguayan prices as input. A summary of the vehicle operating costs with and without the project is shown in Annex 2. Vehicle operating cost savings accounted for about 73% of total quantifiablebenefits.

5.15 Benefits derived from reductionsin travel time have been included; they accounted for about 16% of total quantifiablebenefits. Value of time was based on estimates of hourly income for the working populationin the zone of influence of the highway. Based on the consultants'O&D survey of the project road, about 85% of all passengerstravel for work or business- related purposes.

5.16 Benefits derived from reductionsof traffic accidentshave also been included in the evaluation. Although no reliable records of accident rates in Uruguay are available,the observationof traffic flow and road conditions and the analysis of reported accidents in the area indicate a relativelyhigh

1/ Quantificationof Road User Savings, World Bank OccasionalPaper No. 2, 1968. - 21 -

level of accidents per vehicle-km. Based on observationsin Uruguay and in other countries, the consultants estimated an order-of-magnituderate of accident savings for the project, as well as average costs per accident. Reductions of accidents accounted for about 4% of total quantifiablebenefits.

5.17 In addition to road user savings, savings in road maintenance costs were included in the evaluation,accounting for about 7% of total quantifiable benefits. Actual maintenance expendituresover the last five years on this highway were used as a base for determiningmaintenance costs without the proposed project. Future maintenance requirementsfor the proposed project were determined on the basis of empirical evidence gained on similar highways in Uruguay. In addition, an overlay has been assumed after ten years of service.

(iv) Benefit Distribution

5.18 The benefits resulting from savings in vehicle operating costs are expected to be passed on, in large part, to the users in the form of reductions or, more probably, avoided increasesin tariffs for road transport services. This assessment is based on the highly competitivenature of the trucking industry and the reasonable bus tariffs set by the Government (para 2.10); it would have a direct impact on economic production since most of the traffic on this highway is related to productive activities and trade. Additionally,the users would benefit from improved quality of service (comfort, safety, reliability,punctuality) and shorter travel time.

(v) Economic Returns

5.19 In carrying out the economic assessment, adjustmentshave been made to avoid the influence of taxes and subsidies. Economic costs net of taxes and subsidieshave been estimated for construction,maintenance, and vehicle operating costs. Shadow conversion factors for the exchange rate and labor were not used since the sensitivityanalysis showed that the economic rate of return (ERR) was not sensitive to these parameters within a reasonable range.

5.20 The ERR was computed on the costs and quantified benefits described above, over the project period 1980-2001, covering the constructionperiod plus economic life (Table 5.3). The proposed road is well justifiedwith an overall ERR of about 20%, its nine sections ranging between about 43% and 11% (the 11% concerns the end section Arroyo Campanero Chico - Arroyo Marmaraja). An analysis of the optimum timing for the nine sections shows that all of them should be undertaken as soon as possible to be in service by 1982. Sensitivity tests applied to the economic evaluationconsider a 15% increase in costs, a 25% decrease in benefits, no time savings and a two-year delay in the completion of the project (para 4.13). The overall rate of return is 18% for the cost increase hypothesis, 15% for the benefit decrease hypothesis, 16% for the time savings omittance hypothesis and 15% for the delay hypothesis, indicating that the project would remain justifiedwithin acceptablelimits. The above results were obtained on the assumption that all nine sections would be recon- structed commencing in 1980. In addition, a sensitivitytest has been carried out assuming that the end section Arroyo Campanero Chico - Arroyo Marmaraja - 22 - would not be included in the proposed project. Under the conservativeassump- tion that this would reduce the generated traffic of sections 1 to 8 only on the order of the traffic generated by section 9, the ERR of section 9 would increase from about 11% to 14%, if the foregone benefits of sections 1 and 8 from the lost generated traffic were attributedto section 9.

(vi) IncrementalAnalysis

5.21 An incrementalanalysis has been carried out for the first three sections, for which a four-lane divided highway is proposed. Two alternative design standards have been compared with constructinga four-lanedivided highway: (i) staged construction;and (ii) constructingonly a two-lane highway parallel to the existing road. Alternative (i) involves two stages: Stage I - completionof earthworksand constructionof one two-lane carriageway and Stage II - completionof constructionand addition of the second two-lane carriagewayin year 2, 5 or 10 after completionof Stage I. The incremental analysis of the staged constructionincluded two sub-alternatives(Table 5.4). Alternative (i)a considered,inter alia, for Stage I, the strengtheningof shouldersto be used by heavy traffic as an occasionalpassing lane. The constructioncosts of this alternative amounted to 85% of a four-lane divided highway. Alternative (i)b consideredno strengtheningof the shoulders for Stage I, and its constructioncost amounted to 75% of a four-lane divided highway. The constructioncosts of Stage II amounted to 41% of a four-lane divided highway in alternative (i)a and to 45% in alternative (i)b. The 4% cost differencewas caused by the inclusionof rehabilitationcosts for one shoulder in alternative (i)b. The constructioncosts of alternative (ii) were estimated to be at least equal to the costs of Stage I of alternative (i)a. The savings obtained from reductionsin earthworksless than compensatefor the cost of additional longitudinaldrainage needed in view of the proximity of the existing road. The selection of the design standards was based on the net present value criterion. The incrementalanalysis clearly demonstratedthat constructinga four-lane divided highway is economically superior to alternatives (i) and (ii) (Table 5.4).

VI. TRANSPORT SECTOR MANAGEMENT

A. Preparationof a Four-Year Program of Rehabilitationand Reconstructionof Roads and a Bridge ImprovementProgram

6.01 With a view toward preparing future highway programs, the proposed project includes consultingservices for the preparationof a four-year program of rehabilitation,strengthening and reconstructionof roads and a bridge improvementprogram along the main national highways to be implemented during the next ten years.

6.02 The four-year program of rehabilitationand reconstructionwill be based on the study carried out by consultants SOTECNI. The main objective of the SOTECNI study was the preparationof a transport sector investmentprogram (for the periods 1978-1982and 1983-1992). However, although the study has made a valuable contributionin assembling,for the first time, comprehensivedata - 23 - relating to the transport sector, the highway subsector analysis and the investment program were weak because of lack of analysis of current traffic under origin and destinationsurveys; the SOTECNI study was not required to provide any detailed analysis of the improvementneeded by the selected road sections.

6.03 The four-year program (1982-1985)would identify road sections having high priority for rehabilitation,strengthening and reconstruction. It would:

(a) produce and analyze current traffic surveys;

(b) carry out a detailed survey of soils, drainage, structures and pavement. Pavement survey would be carried out using deflectionmeasurements;

(c) develop an adequate methodology to determinewhen rehabilitation, strengtheningor reconstructionof a road should be needed;

(d) provide Vialidad with detailed informationabout investment needs of the road sections and their cost estimates;

(e) select a list, based on economic priority, of about 400 km which would form the four-year program of rehabilitation, strengtheningand reconstruction;and

(f) assist Vialidad in the supervisionof detailed engineering and updating of the economic evaluationbased on final designs of the 200 km carried out under Section B following.

The program would also develop, for the first time in Uruguay, specific standards for pavement design (para 2.15).

6.04 The bridge improvementprogram will be based on economic priorities. The program will mainly, but not exclusively,comprise bridges on the main internationalhighways. Such a program is urgently needed since most of the bridges were built 40 to 60 years ago and designed for traffic loads below the present level. Vehicle weights and dimensionspermitted in Argentina and Brazil could not allow the existing bridges to be used safely because of their obsolescenceand insufficientcapacity. Consequently,most of the trucks with internationalfreight have to be off-loadedat the Uruguay borders or under- take a lengthy detour to the north. This problem contributesto high transport costs in Uruguay and in the region and constitutesan obstacle to the development of Uruguay's internationaltrade.

6.05 The problem is important and affects the whole country, which has more than 1,000 bridges along the 10,000 km of the national network. There- fore, Vialidad concentratesmostly, but not entirely,on the main international highways, such as Routes 5, 8, 9, 18 and 26, which carry a high volume of internationaltraffic and whose bridges have so far been given less attention. Obsolete bridges exist, albeit in low quantity,on the other international routes and would also be taken into consideration. The bridge study would comprise about 400 bridges along 5,000 km of the national network. The average length would be 80 m with a maximum of 1,200 m. The accumulated length would be about 32,000 m. 24 -

6.06 Consultantswould complete an inventory of all bridges including geometricaland structuralcharacteristics, hydraulic records and an inspection of the present condition and would determine the permissibleload for each bridge and its ability to continue supporting the current loads. If needed, appropriate load tests would be carried out. Preliminary engineering and cost estimateswould be prepared for each one requiring rehabilitationor reconstruction(about 50% of them are standard bridges).

6.07 The bridge study would also include an economic feasibilityanalysis on the improvementor replacementof the bridges and a review of the present weight and vehicle dimensions regulations. The timing of rehabilitation, reconstructionor replacementof each bridge over the next ten years would be indicated based on technicaland economic considerations.

6.08 The studies (four-yearrehabilitation and reconstructionand bridge improvementprogram) are likely to be carried out by a joint venture of foreign and local consultantsover an 23-month period (Chart II). About 135 man-months of professionalservices will be required. Annex 3 provides outline terms of reference and cost estimates for consulting services.

6.09 To assist the consultantsin the developmentof both studies, it was agreed during negotiationsthat Vialidad would provide not less than one highway engineer, one structuralengineer and one economist,all with adequate qualificationsand experience.

B. Engineeringof Roads IdentifiedUnder (A) for the First Two-Year Tranche

6.10 The purpose of this component is to carry out detailed engineering of roads identifiedunder (A) that would be improved in the first two-year tranche. In accordancewith priorities agreed with the Bank staff, the proposed project to improveRoute 8 would be followed by the improvementof internationalroutes to Argentina. These improvementswould focus on InternationalRoutes 1, 2, 3, and 24, connectingMontevideo-Mercedes-Fray Bentos (Routes I and 2), Montevideo-Paysandu-Salto(Route 3) and Mercedes-Paysandu(Route 24), as indicatedin the SOTECNI study. Total length of this circuit amounts to about 850 km with many sections in a seriously deterioratedcondition.

6.11 These roads (a) connect the four most important and populous cities of Uruguay: Montevideo,Mercedes, Paysandu and Salto; (b) traverse the foremost agriculturalzone where the production of dairy products,wheat, and corn is concentrated;and (c) provide the only land connectionwith Argentina over the bridges of Fray Bentos, Paysandu and Salto (close to completion) across the Uruguay river.

6.12 Of the 850 km, a tranche of about 200 km, recommendedunder (A), in need of rehabilitation,strengthening or reconstructionand with the highest economic priority, would be selected. During negotiations,agreement was reached with the Government that Vialidad would (a) establish,at the time of completion of the study under (A) above, a list setting forth the sections for which detailed engineeringwould be done, and (b) furnish such list to the Bank for its approval. About 20 specialists,and also supportingtechnicians, - 25 - would be required-to carry out complete final engineering designs. The study, to be carried out by consultants,would last 12 months (about 240 man-months) and would be divided into three or four contracts. A consulting firm could participate in one or more contracts.

C. Transport Planning

6.13 As mentioned in paragraph 1.17, TPU of the National Directorateof Transport within MTOP is presently assisting the Transport Advisory Council in preparing a national transport plan. This unit, however, would need technical assistance to pursue and develop its role as the focal point for keeping information on the transport sector and advising the Government on all matters related to transport planning and transport policies. The proposed project would provide technical assistance by individual consultantsand/or a consulting firm of about four senior experts for a three-year period with a total of about 110 man-months.

6.14 The Government has drafted a plan of action to strengthen TPU, which, inter alia, would include: developmentof a sectoral information system, improvementof the models developed during the SOTECNI survey, inter-modal studies, recommendationof sector policies including tariff/usercharge studies, and preparation and continuous updating of the national transport plan. During negotiations,agreement was reached that the Government would present to the Bank for approval the plans of action for the transportplanning unit for the years 1980, 1981 and 1982 and staffing and budget requirementsof TPU. The plan of action for 1980 would include the completion,by December 31, 1980, of an intermodal comparisonstudy initiated under the SOTECNI study which would serve as a basis for coordinationof transport policies and investments. During negotiations,agreement was reached that the Governmentwould send to the Bank, not later than July 1, 1981, the intermodal comparison study with its comments and would afford the Bank a reasonable opportunity to express its views on such study. Annex 4 provides outlined terms of reference and cost estimates.

VII. AGREEMENTSREACHED AND RECOMMENDATION

7.01 During negotiations, agreement was reached with the Government on the following:

(a) Vialidad to reorganize its accounting system to show, from 1980 onward, itemized expendituresof routine and periodic maintenance,minor improvements,rehabilitation, major improvements,reconstruction and construction(para 2.21);

(b) The Government to exchange views annually, during the period of project implementation,with the Bank on (i) the progress in the implementationof the road maintenance program financed with the assistance of the IDB loan and (ii) its overall maintenance program and related budgetaryproposals in order to review, in particular, the programs of periodic maintenancefor 26 -

paved roads, renewal and acquisition of maintenance equipment and assistance to the Departments for road maintenance (para 2.22);

(c) The Government to finance the local cost of US$29.7 million equivalent and US$5.0 million of foreign exchange cost, should the private bank loan not be made (para 4.04);

(d) Vialidad to be the executing agency for all project components except the transport sector planning component, which would be under DNT; the Government to appoint, not later than September 1, 1979, a project coordinator directly responsible to the Minister of Transport and Public Works to serve as liaison between Vialidad and all other agencies involved in the execution of the project (para 4.10);

(e) schedule for project implementation (para 4.10);

(f) bidding and contracting procedures for civil works construction and details of the lots to be bid (para 4.11);

(g) terms of reference for technical assistance and consulting services; qualifications, experience, terms and conditions of employment of all consultants selected for these assignments to be acceptable to the Bank (para 4.11);

(h) indicators to be used for monitoring the project; project completion report to be prepared by the Government within six months of the loan closing date (para 4.12);

(i) Vialidad to provide, within its Department of Works, at least two experienced and qualified engineers as counterparts (para 5.07);

(j) Vialidad to provide not less than one highway engineer, one structural engineer and one economist, all with adequate qualifications and experience as counterparts (para 6.09);

(k) Vialidad to establish, at the time of the completion of the four-year program of rehabilitation and reconstruction of roads and the bridge improvement program, a list setting forth the road sections for which detailed engineering would be done, and to furnish such list to the Bank for its approval (para 6.12); and

(1) the Government to present to the Bank for approval the plans of action for the transport planning unit for the years 1980, 1981 and 1982 and staffing and budget requirements of TPU and to send to the Bank not later than July 1, 1981 the intermodal comparison study with its comments and to afford the Bank a the Bank a reasonable opportunity to express its views on such study (para 6.14).

7.02 A condition of loan effectiveness would be the contracting of consultants for the supervision of civil works (para 5.07).

7.03 Subject to the above, the project constitutes a suitable basis for a Bank loan of US$26.5 million equivalent to the Oriental Republic of Uruguay; the terms would be 15 years, including a three-year grace period. April 5, 1979 - 27 - Table 2.1

URUGUAY

SECOND HIGHWAY PROJECT

Highway Network (1976) 1/

Departmental2, National Network Network 2 Pavement Type and Condition km % km

Cement concrete (G) 20.7 0.2 _ Cement concrete (P) 4/ 100.2 1.0 - Cement concrete (B) 9.9 0.1 _

Asphalt concrete (G) 591.1 6.0 - Asphalt concrete (P) 309.9 3.1 - Asphalt concrete (B) 32.4 0.3 _

Double surface asphalt treatment (G) 409.8 4.1 350 Double surface asphalt treatment (P) 1,534.5 15.7 890 Double surface asphalt treatment (B) 441.0 4.5 760

Reinforced priming (G) 794.7 8.2 - Reinforced priming (P) 1,103.2 11.4 Reinforced priming (B) 260.4 2.7 _

Gravel (G) 243.7 2.5 500 Gravel (P) 1,535.9 15.8 1,500 Gravel (B) 1,834.7 18.8 2,000

Earth (G) 407.9 4.3 9,500 Earth (P) 14.5 0.1 10,500 Earth (B) 120.3 1.2 14,000

Total 9,764.8 100.0 40,000

1/ The 1976 inventory is the only existing one. No reliable data existed before. 2/ Estimated figures 3/ (G) = good 4/ (P) = precarious (incipient failure) 5/ (B) = bad

Source: SOTECNI Survey

April 1979 URUGUAY

SECOND HIGHWAY PROJECT

Gasoline and Gas-Oil Consumption ('OOOm 3)

Gasol i n c Gas- o i

Year Ordinary ICompensatedSuper tSperRural use Other Toial Ordinary Rural .se Total compensated

1957 151.2 59.7 85.3 46.5 5.7 343.4 133.0 23.8 156.8 1958 147.2 44.4 84.4 17.4 53.5 1 7.9 3G5.1 1 42.0 27.5 139.5 ,CD9 1V9.8 40.3 88.5 20.6 41.3 22.7 353.2 150.1 22.0 172.1 1930 121.0 52.8 93.5 15.5 42.4 13.8 339.0 168.2 23.- 1S5.j 1SG1 113.5 54.1 116.0 17.1 41.6 13.2 355.5 172.7 31.1 203.6 1SG2 121.7 32.9 136.5 17.4 40.0 14.5 364.1 190.3 40.1 233.4 1933 155.0 32.6 99.5 10.0 37.9 17.2 362.3 199.9 43.1' 243.0 1954 17G.4 37.4 99.1 11.5 42.5 15.6 382.5 217.5 51.9 2%9.! 1955 |157.6 38.6 99.1 11.5 42.5 15.6 382.5 217.5 51.S 2c9.4 0 1° 1 133.9 32.8 121.4 21.3 41.9 14.5 365.8 217.0 51. 4 268.4 1937 1 120.1 29.7 129.4 25.2 34.8 14.5 353.7 209.0 50.6 259.6 1 ('5 11 J. 9 29.9 129.0 22,5 30.93 12.9 341:1 224.1 54.01) 27s.0 1969'! f 133.0 23.1 150.3 14.6 26.2 13.9 361.1 252.2 61.1 313.3 I1,0 1 1t'12.1 _ 164.7 - 23.2 15.3 345.3 289.1 55.3 344 1971 136.1 _ 187.4 - 25.8 11.3 360.9 324.1 51.4. 3i7J.5

19`2 124".I 198.9 - 20. S.8 353.0 3143.2 49.8 39rj.1

1913 119.3 - 167.8 * 19.4 11.6 318.1 333.9 53.0 3&C.9 1S974 122.0 - 121.3 - 16.3 12.6 278.8 322.6 56.8 379.4 1975 14c.8 - 112.2 - 14.1 13.0 280.1 338.1 67.6 405.7 197G 139.6 - 99.9 11.7 12.3 263.5 378.9 57.3 43;.2

Source: ANCAP N . April 1979 URUGUAY

SECOND HIGHWAYPROJECT Highway Classification: Geomtr,ic Standards

Mi". Length of Crosa Section C.P..ity ~~~~~~~~~~~~~~~~~~MinisoaSight Distaoc Ver,ticalCone Road Bad Fill SlopesBide Inctraection (Co,udTafcDesign maaioo Milnim.- Radios Mxins Gradient Stopping Pssn Tpea Miniets -Faveet Without With Crido 5p .o a al Ra Category at 20th Yea) Terraic Speed Soeerslevtioc Deoirable Abaoluca Oeai,,ahle Abanlute Night Day Baa. Aha. Daa. Ahs. Saga width Width Goardrail Guardcail way width Load Min. Width Cross Cross

Special Vehi/dey annua Ave,rage - koo/h e e Z e. /I % Grad. GCad. eIn -

High Standard

Special 3000 (4 lens.) Flat 3% 150 H 555 400 3 3 lBS ORG 360 120 70 40 24.00 2.700 1:4 1,2 2x8O0 C1H 514.4 60 Dif Lay Dif Lay Special 3000 (4 la.s.) Billy 5%. 90 0 400 300 3 5 155 155 310 90 50 55 24.00 2a700 1:4 1:2 2.8O00 70 c u Special 3000 (4 laces) Mountain. HO H 3H0 225 5 7 130 130 260 60 35 30 24.00 2e700 1:3 1:15 2e8O0 HO First lOOOtoS300O(2 la) Flat ISO a 500 400 3 3 OHS 155 HSO 650 60 50 40 12.00 7.00 1:4 1:2 HUH C1H 514.4 60 Firstt 1000 tnSO000(2la) Hilly HO R 400 300 3 3 155 130 650 500 60 35 35 12.00 7.00 1:4 1:2 HUHoo 60c,u Firsc lOtoS30OO(2lI-)0 Mountain,. HO H 300 223 5 7 130 110 500 400 45 25 25 10.00 7.00 1:3 1:15 500 0 60

Msdiom Pype

SIntend 550 to.1000 Flat 90 0 400 300 3 4 155 150 655 500 60 35 35 12.HO 7.00 1:4 1:2 BOO C18 514.4 60 Dif Lay Dif ay Secnd SOStolOOO Hilly HO H 100 225 4 6 130 110 SRI 400 45 25 25 12.00 7.00 1:3 1,15 000 60 Secon.d SOOctolOSO Mountain. 70 H 225 175 3 7 105 95 400 300 30 20 20 10.00 7.00 1:3 1:15 BOO 60

Low Cost

Thi,rd 100 to 300 F. -rHilly 00 H 300 225 4 6 130 110 500 400 45 25 25 10.00 6.00 1:5 1:15 600 50 Lvl ee Thir~d lOOtoSoO Mountai.- 70 H 223 173 6 H 105 HS 4Sf 300 30 20 20 H.0 6.00 13 1:15 ~ 51;H so$5 Lovel L_.Iv Fourch 100 F. orHilly 70 H 225 175 5 7 105 HS 400 300 30 20 20 0.00 5.50 1:3 1:15 400 C13 501.OH 30 Level Covet Fourth 100 Mountain. 60 H 175 125 7 10 HS HO '900 225 25 15 15 BOO0 5.50 1:3 1:15 400 30 Level Level

Soo-t: SOTECNI Survey

Ap,ril1979 -. 30 - Table 4.1

URUGUAY

SECOND HIGHWAY PROJECT

Estimated Schedule of Disbursements (US$ million)

Disbursed in Cumulative Disburse- IBRD Fiscal Year Quarter ment at end of Quarter %

FY 1980

March 31, 1980 0.2 0.2 0.1 June 30, 1980 0.3 0.5 0.2

FY 1981

September 30, 1980 1.0 1.5 6.0 December 31, 1980 2.0 3.5 13.0 March 31, 1981 3.0 6.5 24.0 June 30, 1981 4.0 10.5 40.0

FY 1982

September 30, 1981 5.0 15.5 58.0 December 31, 1981 3.0 18.5 70.0 March 31, 1982 3.0 21.5 81.0 June 30, 1982 3.0 24.5 92.0

FY 1983

September 30, 1982 1.5 26.0 98.0 December 31, 1982 0.3 26.3 99.0 March 31, 1983 0.1 26.4 99.0 June 30, 1983 0.1 26.5 100.0

Assumptions: Loan signature : May 1979 Invitations to bid : May 1979 Award of Contracts : December 1979 Comnencementsof Works: February 1980 Completion of Works January 1982

Source: Mission Estimates

April 1979 URUGUAY

SECOND HIGHWAYPROJECT

DeniA. Standards of Route 8

E.i.tip Route 8 Propo..ed Route 8 Pa ount Shoulders Construction Costs Vntnbility Shoudersdiavement VpiWllithy Design Surf-ce Lass No. Surfare Width (April 1979. USS'OOO) SectionLength Terrain ((450m) Surface Typoe L ne Na. af 1dLeth (C450e) S (T (ko/h). gp Width of Lanes Type (m) per kh Tctsl Sektion - (7.) & Condition Width Lanes. & Condition (m) tkm 1

1.80 4.6 100 100 A.C.l' 3.75 F.L.D.H.-/ S.S.T.-/ 2.40 603.6 2,777.0 1. Punts Ri.les- 7 Rolling 28 C.C (Red) Juortion Route 102 47 R1ig 2 CC!/ B) 3.00 2 G. (Bod)6062770

2. Ju-ction Route 102. 11.2 100 100 A.C. 3.75 P.L.D.H. S.S.T. 2.40 622.9 6,976.9 Junction Route 101 11.3 Roiling 31 C.C. (Rod) 3.00 2 G. (BRd) 1.50

Junction Route 101- 3. 1.6 100 100 A.C. 3.75 F.L.D.h. S.S.T. 2.40 787.3 1,259.8 Pendo 1.7 Flat 8 D.S.TA./(Bd) 2.90 2 G. (BRd) 1.50 7 Pando- 4. 8.3 49 100 A.C. 3.60 2 A.B.R.- 2.40 260.7 2,164.2 Jun ction Sle. 8.3 Rolling 18 D.S.T. (Rod) 3.60 2 G. (Rod) 2.00

5. Junction Olson- 1.30 18.4 69 .100 A.C. 3.60 2 5.5.T. 2.40 348.8 6,418.5 S..a 18.0 Rolling 8 D.S.T. (Rod) 3.35 2 G. (Rod)

6. Sorc- 9.00 64 100 A.C. 3.60 2 S.S.T. 2.40 318.0 2,862.5 Junction Route 9 10.7 Rolling 9 D.S.T. (BRd) 3.50 2 G. (BRd) 1.30

7. Junction Roots 9- 1.50 24.1 81 100 A.C. 3.60 2 S.S.T. 2.40 320.5 7,725.9 Junction Route 81 25.0 Rolling 14 D.S.T. (Red) 2.57 2 G. (Bad)

5. Ju-tno. Route 81- 60 100 D.5.T. 3.60 2 S.S.T. 1.40 267.6 8,937.4 Arroyo Cap anero Chico 33.9 Rolling 13 D.S.T. (Rod) 3.03 2 G. (BRd) 1.50 33.4

9. Arroyo Camp..ero Chico- 25.6 72 100 D.S.T. 3.60 2 5.5.T. 1.40 249.6 6.390.5 Arr-yn thrm raia 25.9 Rolling 20 D.S.T. (BRd) 3.07 2 G. (Bad) 1.50 45,512.7 139.5 136.2

1/ C.C. C-ent Concrete 2) G. .c.v-i 3/ A.C. = Aephalt Concrete F/P.L.D.B. _ Four-Lane Divided Highway 5/ S.S.T. - Single Surface Asphalt Tre-tment 6 DD.S.T. = ouble Surface Aephelt Treatmnt 7/ A.B.R. -Aspheltic Rose Reinforemeent

Source: INVIAL Feasibility Study

April 1979 URUGUAY

SECOND HIGHWAY PROJECT

Traffic Flows

Heavy Traffic in Percen- Generated Traffic in Per- Diverted Traffic in Per- Normal Average Annual Growth Traffic 1978 tage of Norm1a Traffic centage of Length Light Normal Traffic centage of Normal Traffic 1978 - 2001 Light Light Light Section (knR) Vehicles Buaea Trucka Total .ehicla Buses Trucks Vhicles Trucks Vehicles Buses Trucks Total

1. Punta Rielee- Junction Route 102 4.7 1,364 629 780 2,773 50.8 2.6 12.1 9.7 14.7 14.7 2.9 2.2 2.6 2.7 2. Junction Route 102- Junction Route 101 11.3 1,034 452 717 2,203 53.1 2.0 11.5 9.4 14.7 14.7 2.9 2.2 2.6 2.7 3. Junction Route 101- Pando 1.7 1,404 497 1,063 2,964 52.6 2.7 12.2 9.0 1.7 1.7 2.9 2.2 2.7 2.7 4. Pando- Junction Oloe 8.3 715 190 1,319 2,224 67.9 2.6 8.2 8.5 1.7 1.7 2.9 2.3 2.7 2.7 5. Junction Olos- Soca 18.0 388 111 684 1,183 67.2 2.4 8.6 8.1' 1.7 .1.7 3.0 2.3 2.8 2.8 6. Soca- Junction Route 9 10.7 383 106 694 1,183 67.6 8.4 15.3 14.4 - - 3.0 2.3 2.8 2.8 7. Junction Route 9- Junction Route 81 25.0 226 64 314 604 62.6 4.5 12.4 10.0 _ - 3.0 2.2 2.7 2.8 8. Junction Route 81- Arroyo Canpanero Chico 33.9 249 72 311 632 60.6 3.8 10.3 9.2 - - 3.1 2.1 2.7 2.8 9. Arroyo Campanero Chico- Arroyo llarmaraJa 25.9 130 39 197 366 64.5 3.0 10.8 9.0 - - 3.7 2.2 3.1 3.2

Source: INVIAL Feasibility Study April 1979 URUGUAY

SECOND HIGHWAYPROJECT

Economic Evaluation

Section Best Estimates Sensitivity Test Benefits Without 2-Year Delay in ______Cost Increased by 15% Bene. Decreased by 25% Time Savings Project Implementation Economic Net Present First Year Economic Net Present Economic Net Present Economic Net Present Economic Net Present Return Value Return Return Value Return Value Return Value Return Value 1. Punta Rieles- 8,694.0 20.9 12,439.5 Junction Route 102 30.4 18,750.1 38.6 26.8 12,078.5 23.3 11,276.6 20.8 2. Junction-Route 102- 16.3 14,967.4 Junction Route 101 21.3 24,638.9 20.8 18.7 20,490.9 16.2 11,524.6 14.7 8,299.2 3. Junction Route 101- 17.1 3,191.1 Pando 22.4 5,032.8 21.8 19.8 4,279.9 17.1 2,519.8 15.0 1,636.1 4. Pando- 19,893.0 27.5 19,018.4 Junction Ol- s 40.3 25,290.2 42.8 35.9 23,970.7 31.6 16,768.4 34.8 5. Junction Olmos- 18.7 16,546.6 20.5 16.3 12,661.5 13.9 5,934.8 15.3 8,819.3 14.3 8,330.7 Soca 24.9 20,004.2 6. Soca- 35.6 27,072.0 36.9 31.6 25,341.9 27.8 17,420.4 32.0 22,584.5 Junction Route 9 7. Junction Route 9- 14.3 7,648.0 19.8 12.2 2,995.9 10.1 -2,017.5 11.8 1,901.0 10.7 -878.9 Junction Route 81 3,496.4 8. Junction Route 81- 15.1 12,270.4 14.8 13.1 6,824.5 11.1 126.3 12.7 4,972.1 12.1 Arroyo Campanero Chico 8.8 -4,814.2 9. Arroyo Campanero Chico- 10.8 -522.9 10.9 9.1 -4,207.2 7.4 -6,532.6 9.0 -3,764.7 Arroyo !4armaraja -- Total 19.9 136,726.1 21.3 17.4 104,436.6 15.0 57.020.8 16.0 73,034.5 15.2 75,754.6

1/ An 11% opportunity cost of capital was used.

Source: INVIAL Feasibility Study and Mission Estimates

April 1979 - 34 - Table 5.4

URUGUAY

SECOND HIGHWAY PROJECT

Incremental Analysis

Stage II Net Present in Year 1 Value 2/

Alternative (i) a

Section 1 2 2,444.7 5 2,454.5 10 2,701.8

Section 2 2 5,308.4 5 4,729.9 10 4,426.4

Section 3 2 776.9 5 568.6 10 386.2

Alternative (i) b

Section 1 2 1,657.5 5 1,583.2 10 1,734.1

Section 2 2 3,239.3 5 2,456.8 10 1,919.4

Section 3 2 380.0 5 142.2 10 - 73.8 3/ Alternative (ii)

Section 1 3,211.3

Section 2 4,491.1

Section 3 272.7

1/ The analysis considered residual values also for Stage II in year 2, 5 or 10. 2/ An 11% opportunity cost of capital was used. 3/ Constructioncost of this alternative amounted to 85% of a four-lane divided highway. Source: INVIAL Feasibility Study and Mission Estimates April, 1979 - 35 - ANNEX 1 Page 1 of 3

URUGUAY

SECOND HIGHWAY PROJECT

Consulting Services for Civil Works Supervision

Outline of Terms of Reference

Objective

1. Consultantswill carry out the supervisionof the civil works for reconstructionof Route 8 between Punta Rieles (Km 13) and Arroyo de Marmaraja (Km 153). The first 17.5 km (Punta Rieles-Pando)would be a four-lane divided highway; from Pando to the end, a two-lane highway. The consultant work is expected to take 30 months.

Scope

2. The scope of works to be performed by the consultant will be dictated by normal engineering and management practices for projects of this nature, including the assignmentof the personnel required to perform adequately,but not necessarily limited to, the following functions:

(a) review bids received from contractorsand make recommendations to Vialidad regarding award of the contract;

(b) review proposed schedules and procedures and make recommendations for inspection and construction,quality control, measurement of partial and final constructionquantities, payments to contractors, and acceptance of the completed works;

(d) review work certificationsand make recommendationsto Vialidad for payment to the contractor;

(e) perform adequate check tests on the general fill, subgrade, sub-base, base and pavement courses as well as the concrete work related to bridges and drainage structures;and

(f) prepare monthly and quarterly reports on the work progress for transmittal to the Bank.

Basic Tests

3. Before final acceptance of the work, the consultant will perform a roughness survey and Benkleman Beam deflections properly documented and evaluated as a requisite for the terminationof the consulting work. - 36 - ANNEX 1 Page 2 of 3

4. Basic testing required by the consultant supplementingregular testing by Vialidad as follows:

Review:

(a) weekly work schedule and comment thereon;

(b) job mix formulas--allcourses--weekly;

Obtain:

(d) stabilizationtests--all courses if and when necessary;

(e) concrete job mix formulas for headwalls, wing walls, footing walls, and slabs in culverts;

(f) review results of concrete compressiontesting, water cement ratio, and slump tests;

(g) review of job mix formula and Marshall method pavement testing-- percent bituminousmaterial, stability, flow, and voids relationships.

Carry out:

(h) periodic check on the possible hydrophilicnature of aggregates and use of anti-strippingagent in bituminousmixes; and

(i) any other tests necessary for the acceptabilityof aggregates such as hardness, soundness,and deleteriouscontent that may be required.

5. It is the responsibilityof the consultant to assist in the formula- tion of an efficient and sound inspection policy. It is desirableto report on practices that require correctionor reconstructionimmediately in order to effectivelyprocess the work without delays.

6. No field changes will be permittedwithout written authorization from Vialidad.

7. Under advice by the consultant,claims by the contractormust be reported in writing within 30 days of occurrenceto Vialidad and the action taken by Vialidad must be prompt, providing that the deciding factors such as testing are completed.

8. A flow sheet must accompany each contractor'slist of equipmentand personnel to indicate that the contractorunderstands the work and obligations involved. - 37 - ANNEX 1 Page 3 of 3

Personnel and Cost

9. Personnel required for the supervisionmust include the following minimum qualified staff:

(a) one project engineer (project manager) with at least 10 years of combined field and office experience in the inspection of highway construction. Background must include soils, pavement and drainage structures as well as experience related to the evaluation and review of contractorcapability, awards, schedules, payments, technical assistance and the periodic report writing which is necessary;

(b) two resident engineerswith at least five years of field experience in the inspectionof highway construction,including soils, pavements, and concrete related to drainage structures;

(d) two soils laboratory techniciansqualified to run and analyze the required tests listed in basic tests to be performed;

(e) four qualified laboratoryassistants to sample and run the required tests listed in basic tests to be performed.

10. Personnelnoted in (a), (b) and (d) should be fluent in Spanish.

11. The consultantwill furnish adequate transportationfor the personnel involved and maintain two field soils laboratories(such laboratoryequipment to be suppliedby the consultant)properly equipped to do the necessary testing. An office with secretarialcapability and communicationsservice is required and should be provided by the consultant.

12. The estimated total cost would be US$1,800,000with a foreign exchange component of US$900,000 (246 man-months).

March 1979 URUGUAY

SECOND HIGHWAY PROJECT

Consulting Services for Civil Works Supervision

Outline of Terms of Reference

Staffing and Scheduling (in months)

sstaffingS 1 2 3 4 5 6 7 8 9 1011121314151617181920 21 2223241252627 28 29 alm/m 1 civil T engineer (project…30 manager) J3 2 resident

engineers …48

S assistant a i engineer…--24

2 soils laboratory -48 technicians

4 assistant …96 laboratory…… technicians F Total man/months 246

Source: MTOPand Mission

March 1979

rt URUGUAY

SECOND HIGHWAY PROJECT

Vehicle Operatingand Time Costs for Selected Sections

TRAFFIC AND SAVIIG SJMARY FOR VEHICLE TYPE 1 CAUTOMOVILLS ) ON SECTION Noe 1 (P.RIELEs-E.Rl02)

NOTE" MNETARY UjNI1'IS NUEVOS PESUJS SAVINGS ARL GIVEN IN THOUSANDS.

OPERATINS COST / KMi/ p DTEmTI AL LbAILY X ACTLIAL DAILY TRAFFLC __ i;;Hu ..... SAVINGS FROm 1/ YLAR TRAFFIL,COWNTS tiRO"NH NpRRAc GENRATLD TOTAL PTOUT PROJECT tOOO)

1978 945 * 2.6. 916 3 0 0*000 0.000 0.00 1979 972 2*05 944 0 0 0.000 0.000 0.00 19B0 1030 2.86 912 0 0 O.uOO 0.000 0.00 19E1 1029 2.od 1000 0 0 OOO 0oOO 0.00 182 i059 2.0J lOUo 30 1059 1.341 1,230 221.58 1953 10b9 2.03 10i6 31 1089 1.341 1.230 228.50 1914 1120 2.53 106b 32 1120 1.342 1.230 235,72 19C&5 1153 2*d 111.9 33 1153 1.j42 1.230 243*10 1986 1186 2.8 ilSl 34 119 1.342 1e230 2504.5 19E7 1220 2eO 11bA 3c 1220 1B343 1e230 258.78 19E6 i255 20d 121ti 37 1255 1*343 1.230 267.13 1969 i291 2*.0 125; 3d 1291 1.*43 1.230 275.66 1490 1329 2.d, 120i 3v 1329 I*344 1e230 2b4i55 1991 13b7 2.63 .13724 43 1367 1.344 1&230 293*73 1992 1406 2.bi 13bL 4e 140o 1.J45 .230 303*31 1993 1447 2.03 140'. 44 1447 16445 1.230 313.20 1994 14$6 2od3 1444 44 1488d 1i46 10230 323042 1995 151 2.63 1465 46 1 51 1aj46 1 .230 334.0d 11996 15(5 2.d 15e6 4? 15 5 1.347 1 _230 345S19 1997 1 621 2.83 1571 49 162 1.347 1.230 356.69 1998 1Q67 2.b3 1i61 51 1b66 1.348 1.230 368.69 1999 1715 2.3d 16b, 5i 1715 1.J49 1.230 381*09 20"0 1765 2.bi 1711 54 1765 1.349 1.230 393*94 2001 1816 2.03 1760 5b -116 1.350 1.230 407.46

1/ Includes Time Costs

Source: INVIALFeasibility Study and Mission Estimates April 1979 0

_. URUGUAY

SECOND HIGHWAY PRDJECT

Vehicle Operatingand Time Costs for Selected Sections

TRAFFIC AND SAVINGi SbJ4ARY FOR VEHICLE TYPc 3 CUMNI8US ) ON SECTION No. 1 (PaRIELES"E.RI02

NUTE MJNETkRY JNIT IS NULVOS PESUS. SAVINGS ARL GIVEN IN THOUSANDS.

OPLRATING COST / Kt4' ACTUAL DAILY TRAFFIC SAVINfli FROM l/ POTENTIA6 6AILY %wITHi;uT WITH OPERAAIN(. C OSrT Yi.AR TRAFFIC CORNTS OROFH NRiMA 6 GENERATLtD TOTAL PHUJLCT PROJ CT (o00)

1976 704 * 2*22 629 0 0 0.00 0.000 0.00 1979 720 2.2i 643 0 0 0.000 0,0J0 0.00 1950 736 2.22 657 0 0 0.u00 0.000 0.00 19el 752 2.22 6t2 0 0 0000 0.000 0.a00 14°2 769 2.22 667 8d 769 4.194 3*32a 1,864*93 963 766 2:22 792 84 786 4 /95 30323 IJ9070 19£4 6D4 2.22 717 80 d03 46196 3.323 1,950.25 19e5 821 2.22 7t3 o621 4 797 30324 1,994.41 1 19.56 840 2.22 749 90 039 4.199 3.324 2#039o6 0 19F7 a 58 2.22 7tO 92 b5d 40*0 3.32"4 2#085.81 19Eb 877 2.22 ,Tt3 94 877 4' 01 3*325 2,133*21 19E9 897 2.2~2 800o 90 6396 4.002 36325 2,181.67 19SU 917 2.22 81d 9o 916 44ut)4 3.326 2,231.27 1991 937 2.22 866 101 937 4oQ05 3.326 2,282*03 1992 958 2.22 815 10o 957 4o006 3.32? 2p334*00 1993 979 2.2i 8T3 1o0 979 4.608 3.327 2,357.20 19954 lOQ1 2.22 SI3 Ido 1Q00 4 ol0 36320 2,441*67 1994S 03 2.22 912 110 1022 4o01l 3.328 2,497.43 1996199S X~0461043 2.22 9.i391 112li 1G4512 '4.°134.013 33925453.3,29 20554o53 1997 10b9 2.22 9S3 Ili 1068 4.015 30329 2#612*98 1999 1117 2.22 974 120 1092 4.016 30331 2,612.83 20C0 1142 2 22 120 Ilu4 4 12083 .331 2,796 i s 2o01 21107 22 1040 126 1166 4002 3.332 2 ,861. 1

1/ Includes Time Costs

Source: INVIAL FeasibilityStudy and Mission Estimates April 1979 0;m URUGUAY

SECOND HIGHWAYPROJECT

Vehicle Operating and Time Costs for Selected Sections

TRAFFIC AND SAVING SU44ARY FUR VEHICLE TYPE 5 (CAMION pLS. ) ON SECTION NO* 1 CP.RIELESE*Rl02)

NUTE M3NLtARY JNIT IS NULVOS PESJSo SAVINGS ARL GIVEN IN THOUSANDS.

OPERATING COST / KM- ACTUAL DAILY TRAFFIC SAVIN? FROm YEAR ERAFFICC06NI iR3"H NiR,AL GEN;RATLD TOTAL PRUiLCT ;PROJgCT 0E G CO

1978 142 * 2.63 132 0 0 0000 0°000° 0.00 1979 146 2.bi 136 0 0 0i000 0.000 0.00 19t0 149 2*o3 139 0 0 0.000 0.000 0.00 1961 153 2.63 143 0 0 0.'Q00 0'000 0.00 19E2 158 2.63 147 11 15d 201 ? 26166 148.94 19F3 162 2.63 151 1i 162 2.(17 2.166 152.94 1954 166 2.03 1~5 11 166 ~ 'e7i7 2.166 157.03 19e5 11 2s6o 159 1 1j71 2.1 7 2.166 161.24 19E6 175 2Tb 1bi I gS .*/1? 2 166 165.56 19E7 iTo 2.60 4b 12 180 2.117 2.166 170.00 1986 185 2.63 172 1j 185 2.717 2.166 174.56 1989 190 2.oj3 l7 14 190 2.1 7 26166 179.24 19;9 195 2.b6s 11 1s 195 2.117 2.166 ld4.04 1991 200 2.6j 106 14 o00 2T17 2.166 168.9? 1992 205 2.63 191 14 205 2.117 2.166 194.04 1993 211 2*o6 196 14 11 2.t17 2.166 199.24 1994 216 2.64 2u2 ID 216 2.it7 2 166 204o5b 1995 222 2,6s 207 1 222 2.717 2.166 210.06 1996 228 2*65 212 16 228 2.1 7 2.166 215.69 1997 234 2a6 21d 1o d34 2.71 7 2.166 221.47 1998 241 2obt 224 l i4j 2 f17 21166 227s40 1999 247 2.6 230 1 247 2.717 2 166 23iS0 2000 2j4 2.63 2i6 17 254 2.117 2*166 2 39 06 20012 260 2.64 la 260 2.6717 2.166 246.18

1/ Includes Time Costs

Source: INVIAL Feasibility Study and Mission Estimates April 1979 URUGUAY

SECOND HIGHWAY PROJECT

Vehicle Operating and Time Costs for Selected Sections

TRAFFIC AN) SAVING SUMMARY FOR VEHICLE TYPE 1 (AUTOMOVILES ) ON SECrION NO. 9 (AoCAMP-MARb0ANAJ)

VOTE MONE.TARY UNIT IS NUEVOS PESOS. SAVINGS ARE GIvEN TN THOUSANDS.

*ACTUAL _ DAILY TRArFIC _OPERATING COST / Kbl'M 'DT;NTIAL DAILY … ------WITHOUT WITH OPLRATING COSTS Y7E%R TR?AFFIC COUNTS GROWTH NORMAL GENERATED TOTAL PROJECT PROJECT (000)

1973 98 3.65 94 0 0 O.000 0.000 O0OO 3. 6S 97 0 0 0°000 00 00n : 193? 193) ~~~~~105101 3.69 101 0 0 0.0000 0.000 0.00 1931 361 In 5 0 100:000 060)0.00 1933 1i3 3 69 tt8 4 113 1 °79 1 229 168o66 1933 117 3-65 112 4 117 1.379 1.229 175.08 121 3.69 17 4 121 1*379 1*229 lF1.45 1935 125 3.65 121 5 125 1.379 1.229 188o12 1935 1t0 3.69 125 5 130 1.79 1.229 195:04 193r li~15 3 63o 5. 135 1.379 1.229 125.016 193? 175 3.69 135 5 140 1:379 1:229 209.61 1939 14 3.69 139 5 145 1 379 1 229 217.30 199) 1JD 3.65 145 6 150 1.380 1.229 225o.31 klj56 {3.6r,56 C; i50 6 I:1566 ;'380I:8 8 I231.229 233:5k 192; 173 3.69 16r 6 173 1.380 1.229 260*27 1995 1M0 .3.69, 173 7 179 1.380 1.229 269.87 193S 1P6 3.65 }17 7 186 1.380 1.229 279.82 I19?7 1 93 3 .6r5 1 86 7 1 93 1.:380 1.,229 2 9 0.1 8 19 .: 2n3 3. 65 192 7 200 1 38g 1.229 30086 299; 207 3.69 200 8 2037 1.380 1.229 311.83 20)) 215 3.6r 207 8 215 1.380 1a229 3 42 223 3.69 214 8 223 18 1.3294 3

1/ Includes Time Costs

Source: INVIAL Feasibility Study and Mission Estimates Z.-

April 1979

. S~~~~~~~~0 URUGUAY

SECOND HIGHWAY PROJECT

Vehicle Operating and Time Costs for Selected Sections

TRAFFIC AVJ SAVING S6MMARY rOR VEHICLE TYPE 3 (OMNIRUS ) Oki SECTION NO. 9 (AoCAMP-MAR?AR4J

NITE- MnNLTARY UNI T IS NUEVOS PESOS. SAVINGS ARF GIVEN TN THOUSANDS,

J L H N ^ _ACTUALDAILY VEA~T AFIC COlUNTST5 GGROWTH49 OW T NflRMALn RM L GENERATEDTRAFFIC TOTAL --PROJECTP---ERATING COSPROJECT(D SAVr'NGS FrRa 1/

April43 2.2? 3 0 0 01000 0.000 197; ~~44 22? ~ 40 0.n0o n.00n 45 2.?) ~~~~~~~~41 0 0.000000 000 1931 46 2.2; 42 0 0 0.000 0.000 n.oo I1Q3 ? 2 .?42 i3' 4 4~7 3 3.5 42 5 83 .9 4 0 2-Pp 44 5 48 4*P94 ~~~~~~~~3.542 596.83 193',4 2.244 4.895 3543 651.23 1933 ~~~~~~~~~2.?'4 6 51 4.5395 3.543 637.19 193'r 95 2.2P 4So 5 53 4*0395 3.543 6510.23 1;3? 95 ~~~2.2? Si 56 4'i895 3.544 6t.5. 7 2.?? 5., 5 56 -489 3.544 695 17 19?? 99 ~~~2?,2 5.j 6 59 4.595 3.545 726.06 1 9 ~~3 6 3 2 .2?, ~ 4 6 60 4.5q95 3.545 714P.01 19;~~ 2.2~ 55 6 61 4.895 3.546 7r5.29. I 95; 3 2.2'?, 57 6 6.3 4.5J95 3o5 4 6 77-4 .9 2 t9;5 Ail 2.?,; 51 6 64 .9354 1Wf A5 2.2? 5 6 65 4.596 3.547 791-.9.0 i;;3 ~~~~~A7 2.?)> 6o 6 67 4.5I96 3.548 826.95 6 8~ 2.220 6 2 6 6 8 4, 59 6 3 454 8 8 a5.0 5 70 2.2, 63 7 70 4.563.4 835 23)1! 71 2.2? 65 . 71 4.96 3.549 862375

1/ Includes Time Costs

Source: INVIAL FeasibilityStudy and Mission Estimates 0% URUGUAY

SECOND HIGHWAY PROJECT

Vehicle Operating and Time Costs for Selected Sections

1RAFFIC AN) SAVING SUMMARY FOR VEHICLE TYPE 5 (CAMION PESo ) ON SECTION NO, 9 (A*CAMP-MARMARAJ:

VnTE- MnNLTARY UNIT IS NUEVOS PESOS. SAVINGS ARE GIVEN TN THOUSANDS*

fnPERATING COST / KM ACTUAL DAILy TRAFFIC ------______SAVINGS FR3 1/ *JTLNTIAL DATLy-…… WITHnUT WITH OPLRATING COSTS YEk? TRAFFIC COUNTS GRIWTH NORMAL GENERATED TOTAL PROJECT PROJECT

19T3 109 * 3.17 101 0 0 0.n°0 n.000 0.00 1 97 113 3.1? 1104 0 () 0.O0 0.000n 0 0) 193) 116 3.17 1n7I ° 07000 0.0r0 .:o 1931 1 3.1? I i 0 00.000 n.Ifn(O 0.00 19,2 124 3.17 114 10 124 2o717 2.101 712.14 1933 12R 3. 17 8 1 0 128 2.717 2.101 734.36 193k 132 [email protected]? lo I132 2;717 211 7 57 . 8 49 19~~~~~ 136~~~~~~3. 1? 125 1013 6 2.17.0 1 7P0.90 1935 1a0 3.1s 129 11 l) 2.717 2.101 c805.27 s137144 3 . 133 1 144 2.717 2.101 8130.39 1933 la4 3.17 137 11 14i 2.717 2.101 856.30 193; 193 3.1^ 1t2 12 153 2.717 2.101 Bt,3.02 198 3.1, 1 6 12 158 2.717 2.101 91 0.57 3., 6.1A 96 .2: 1I;3 173 3.1? ib7 163 173 2.717 2.101(9984 8 14 1 79 3.17 1e5 164 79 2.717 2.101 1029.a63 199?1995 2105196 3.17>3.17 176.t99 15119 196 2.717 2.1012P.11 1129.0891;61*876 1 9 93 20?) 3. 12 16~7 1 6 202 2.717 2.1 01 1,P164.o2 7 19?9 209 3.17 193 16 209 2.717 2.1.01 1,200.60 215 3.17 ~~~~~~~~~~1997 21 5 2 71 7 I 1I,2 3 8 n6 23)1 222 3.1?IP5 17 222 2.717 j 01 1,276.68

l/ Includes Time Costs

Source: INVIAL FeasibilityStudy and Mission Estimates April 1979 - 45 -

ANNEX 3 Page 1 of 3

URUGUAY

SECOND HIGHWAY PROJECT

Four-YearProgram for Rehabilitation,Strengthening and Reconstruction of Roads and a Bridge ImprovementProgram

ConsultingServices

Outline of Terms of Reference

A. Four-YearProgram Objective

1. The main objectivesof the program are to:

(a) develop an adequate methodologyto determinewhen rehabilitation, strengtheningor reconstructionof roads should be needed;

(b) select a list, based on economic priority, of about 400 km which would form the four-year program of rehabilitation, strengtheningand reconstruction;

(d) assist Vialidad in the supervisionof detailed engineeringof roads and updating of the economic evaluationbased on final designs of the first two-year tranche of the four-yearprogram (200 km); and

(e) develop, for the first time in Uruguay, specific standards for pavement design.

Scope

2. The study would review methodologiescurrently in use for estab- lishing a final methodologyto determinewhen rehabilitation,strengthening or reconstructionshould be needed. With the SOTECNI Study as a basis, Vialidad would be assisted in undertakingkield studies and deflectionsof existing pavements in relation to subgrade slpport, climatic conditionsand traffic, analyzing all the data obtained. A clear understandingof the relationshipbetween vehicle operatingcosts and pavement conditions should be developed. Pavement conditions should be characterizedby measurements of deflection,roughness and skid resistance. Equipment for measurementof roughnessand skid resistance should be provided by the consultants. The other equipment is available at Vialidad. Recommendationswould be made on organization,staffing methods and training of personnel. - 46 -

ANNEX 3 Page 2 of 3

3. The study would select about 400 km of highest priority roads in need of improvement (rehabilitation,strengthening or reconstruction) and would be the basis of Vialidad's investmentprogram for the next four years.

4. The detailed engineering of roads of the first two-year tranche would be carried out by other consultants. However, the consultants for the four-year program would supervise the detailed engineeringand would carry out the economic evaluation based on final designs (Chart II). The development of specific standards for pavement design would be carried out under periodic consultationswith ANCAP. These standards would apply not only to new pavements but also to rehabilitationand strengtheningof existing ones.

B. Bridge ImprovementProgram Objective

5. The main objectives of the bridge improvementprogram are to:

(a) carry out an inventory of bridges;

(b) obtain the permissible load for each bridge;

(d) prepare an economic feasibility study on the improvement or replacementof bridges; and

(e) review the present weight and vehicle regulations.

Scope

6. The study would review the methodologycurrently being used for the technical and economic evaluation of bridges, as well as practices used for the preparationof cost estimates and bid documents. Recommendationswould be made on organization,staffing methods, training and equipment necessary to maintain a bridge improvement program in the future by Vialidad. Recommenda- tions would also be made for updating the present weight and vehicle regulations. As a result of this study, Vialidad would be able to determine optimum solutions for bridges of the whole network.

C. Personnel for Both Studies

7. Personnel required will include:

(a) a project manager (highway engineer) with at least 10 years of combined field and office experiencein highway planning and construction. He should have experiencein technical assistance and project management. His backgroundmust include soils, pavement and drainage structures,experience in review and preparation of contract documents and an in-depth knowledge of highway planning; - 47 -

ANNEX 3 Page 3 of 3

(b) one highway engineer with at least five years of combined field and office experience for highway planning and construction;

(d) one traffic engineer with at least five years of experience in highway traffic and transport policy;

(e) one structural engineer with at least ten years of experience in design and constructionof bridges;

(f) one transport economistwith at least five years of experience in highway transportation;

(g) one systems analyst with three years of relative experience;

(h) two surveyors with at least two years of experience in highway design and construction;and

(i) three draftsmen.

8. All the experts, except the systems analyst, the surveyors, and the draftsmen, should have an acceptable knowledge of Spanish.

9. The consultantswill furnish adequate transportationfor the personnel involved and maintain an office with secretarialcapability and communications service at its own account.

10. The estimated total cost would be US$800,000 equivalent with a foreign componentof US$400,000. The required manpower is 135 man/months.

March 1979 URUGUAY

SECOND HIGHWAY PROJECT

Four-Year Program for Rehabilitation,Strengthening and Reconstructionof Roads and a Bridge Improvement Program

Outline of Terms of Reference

Staffing and Schedulingof ConsultingServices

Staffing 1 2 3 4 5 6 7 8 9 10111213141516171819 20212223 Total m/m 1 project manager ………………18

1 highway engineer… … … … … … … 9

1 pavement expert 9

1 traffic engineer 7 4

1 structural engineer ………………… 14

1 transporteconomist 12

1 systems analyst 6

2 surveyors _ - 24

3draftsmen 36 Total man/months 135

Source: MTOP and Mission

March 1979

tM - 49 -

ANNEX 4 Page 1 of 4

URUGUAY

SECOND HIGHWAY PROJECT

Technical Assistance for Transport Planning

Outline of Terms of Reference

Objective

Technical assistance for transport planning will be provided by consultantsover a period of three years, with the objectives of enabling the Government to:

(i) formulate a detailed program of transport investments;

(ii) improve planning and organizationof each transportmode;

(iii) improve transport policies, especially those related to effective coordinationamong all modes of transport;

(iv) complete, by December 31, 1980, an intermodal comparison study, initiated under the SOTECNI study, which shall serve as a basis for coordinationof the Borrower's transport policies and investments;

(v) assist the Government in recruiting and training adequate Government personnel in transport planning, and provide on-the-job training to ensure that, by the end of the three-year period, the Transport Planning Unit (TPU) of the National Directorate of Transport within the Ministry of Transport and Public Works will be capable of carrying on its functionswithout further technical assistance.

Scope

The services to be provided by the consultantswill cover the same areas as those in which TPU acts. The consultants'personnel will work side by side with counterpart staff assigned by the Government on a permanent basis in order to initiate and continue action in the following areas:

1. Initial Activities

The consultants'coordinator should start working six months before the main part of the consultants staff arrive. During this initial period the coordinator shall advise and assist the Government in: - 50 -

ANNEX 4 Page 2 of 4 (a) coordinatingongoing transportationstudies;

(b) reviewing existing study reports and investmentplans;

(d) outlining TPU's plan of action for 1980 and identifyinglocal staff requirements;recruiting professionalpersonnel.

2. Sectoral Economics and Planning (Multimodal)

(a) the review, compilation and updating of data on traffic generatingsources and preparation of traffic forecasts;

(b) the determinationof financial and economic operating costs for the several modes of transport under various operating conditions;

(c) the analysis of economic benefits to be derived from recommendedtransport programs and the determinationof economic priorities of major programs;

(d) the review and analysis of current and proposed Government laws, regulations and procedures relating to transport pricing, entry and route permits, determining to which extent these are effectively implemented;analyzing the economic and social objectivesof these regulations and their effectiveness;

(e) the determinationand analysis of total distributioncosts for major commoditiesby each of the various modes for domestic and international traffic, examining the tradeoff between service, time and cost and the effect that user choices for various transport services have on the final cost of the commodity to the consumer;

(f) the review and analysis of the present structure and level of user charges in the various transport modes and the relationshipbetween charges and economic costs; and

(g) the formulationof criteria to evaluate and select transport investmentsand the recommendationof procedures for reviewing and updating transport investmentprograms, determining their economic feasibilityand priority con- sidering budgetary constraints.

3, Sectoral Statisticsand Information Systems

(a) the revision and evaluation of existing transport data, identifyingareas where additionaland more reliable data are required; and - 51 - ANNEX 4 Page 3 of 4

(b) the type of data to be collected, the format for presenting the data for analysis and the methods of storage, as well as the preparation of forms for the collection of data and the methods of collection,all at the lowest cost sufficient to meet the planning requirements.

4. Modal Reviews and Evaluation 1/

Regarding the various transportmodes, such as railways, highways, road transport, ports and shipping,airports and civil aviation, the consultantswill:

(a) review and evaluate existing infrastructureand transport capacity, identifyingproblem areas and making recommendations for improvements,in order that services adequately meeting consumer demand be provided at reasonable prices;

(b) review traffic data collecting systems, traffic counting programs, and origin and destinationsurveys, including internationaland domestic traffic;

(c) analyze and evaluate transport costs (financialand economic) and tariffs of the several modes and the financial situation of the modes, and recommend policies and systems of tariffs consistentwith economic development;

(d) assess the policies and regulationsgoverning the various modes, determiningthe extent to which these policies and regulationsare effective in furthering economic development; and

(e) formulate criteria to evaluate investmentsin the various modes and establish procedures for reviewing and updating investment programs and determining their feasibilityand priority.

5. CounterpartTraining

Through their day-to-day assistance and advisory services, the consultantsshall train the staff of TPU in their respective disciplines. In addition the consultants shall conduct an organized training program for the counterpartsand other personnel of MTOP. Also, the consultants shall assist TPU in selecting professionalpersonnel, preparing their job descrip- tions and advising on their compensation.

1/ In case of the highway mode, the consultant will coordinatewith consultants preparing the four-year program of rehabilitationand reconstructionof roads (Annex 3) and incorporatetheir results in the multimodal system. - 52 -

ANNEX 4 Page 4 of 4

6. Personnel and Cost

About four senior experts would be required for a three-year period with a total of about 108 man-months. The total cost would be US$800,000 with a foreign exchange component of US$600,000.

March 1979 53 -

ANNEX 5

URUGUAY

SECOND HIGHWAY PROJECT

Selected Documents and Data Available in the Project File

1. Estudio de Factibilidad Tecnico-Economica del Proyecto de la Ruta No. 8 "Brigadier General Juan Antonio Lavalleja". Tramo Montevideo-Arroyo de Marmaraja. Informe Final. INVIAL Ingenieros Consultores. Septiembre 1978.

2. Organizacion de la Direccion de Vialidad y Mantenimiento de Carreteras y Equipos. Harris - ICA Consulting Engineers. Junio 1977.

3. Appraisal of a Highway Project in Uruguay. (Bank). October 9, 1962.

4. Integrated Transport Study - SOTECNI (UNDP-Bank) Consulting Engineers. 1976-1977.

5. Uruguay Transport Sector Brief (Bank). August 1978.

6. Uruguay: Resena de la Actividad Economica-Financiera. Abril de 1978.

7. Detailed Engineering Studies Punta Rieles-Arroyo Marmaraja (SURCO, INVIAL, VIALUR and ICA Consulting Engineers). 1974.

8. Plan de Mantenimiento 1978 - Vialidad.

9. Estudio para Mejorar el Area de Administracion Financiera del MTOP. Arthur Young and Co. Febrero 1977.

10. Plan Nacional de Transporte 1978.

11. Uruguay - Reglamento Nacional de Transito (MTOP). 7 Abril 1964.

12. Final Engineering Studies, March 1979.

April 1979

URUGUAY SECOND HIGHWAY PROJECT Organization of the National Highway Directorate (Vialidad)

3~~~n Admnitrti General

Sertites Secretary

Pesnnel Tesury SupisAdministrative Communications Documents

Works Planning Maneace Research Equipmntca

Source: SOTECNI Survey World Bank -19873 April 1979

URUGUAY SECONDHIGHWAY PROJECT ImplementationSchedule (months, startingApril 1, 1979)1/

Item ExecutingAgency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 CIVIL WORAKS Reconstructionof 140 km Rte 8 Vialidad 1. Reviewof pnequalifyingand bidding documents 2. Prequalifyingand bidding period 3. Preqaalificationand bid analysis,contract award 4. Contractapproval by Government 5. Contract Signing

6. Construction E E E E E E E ConsultingServices for the Supervisionof Vialidad Civil Works above 7. Preparationof documentsto call for proposals 8. Evaluationof proposalsand selection of exparts 9. Supervisionof bidding and contracting 10. Supervisionof construction works up _ _ _ __E to mneeption TAANSPOATSECTOA MANAGEMENT ConsultingServices for the Preparationof Vialidad a 4-Year Programof Rehabilitation, Strengtheningand Reconstructionof Roads andfor a Programfor Improvementof Bridges 11. Preparationof documentsto call for 4, proposals 12. Evaluationof proposalsand selection of experts 13. Execution ConsultingServices to Carry out Detailed Vialidad Engineeringof about 200 km of Roads Includedin the First 2-Year Period of 4- Year Programabove 14. Preparationof documentsto call for proposals 15. Evaluationof proposalsand selection * of consultants 16. Execution TechnicalAssistance for the Strengthening National Directorateof of TransportSector Planning Transport (MTOP) 17. Preparationof documentsto call for proposals 18. Evaluationof proposalsand selection of candidates 19. Execution ...... 1with 8ankapproval 1/ First advertisementof the Project: DevelopmentForum, April 9,1979 which is the basicdate to start implemantationof the Project. y Supervisionof detailed engineeringand updatingof economicevaluation of the 200 km of the first two-yearperiod of the 4-year program. Source: MTOPand MissionEstimates

April 1979 World Bank - 20263 wa /y- -fm ------

Ocqon ;X.:r,,0-S',,'~~~~~~~~~~L-j,,,,L \

2~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2 I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~/XC ANT ANr>FX;t ,

;H_:t~~~~~~~~~~~~~~~~~~~~~~~~~~~~E,

Ak~~~~~~~~~~~~~~ ~~~~-. - - BU- ,,,

/0~~~~~~~~~5 55* 54