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.